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Desktop Metal Announces Second Quarter 2021 Financial Results

  • Revenue up 68% from the first quarter of 2021 to $19.0 million
  • GAAP gross margin of 12%; non-GAAP gross margin of 25%
  • Customer adoption momentum as new customers grew 44% sequentially from the first quarter of 2021
  • Accelerating metal systems shipments, including strong growth across Production System P-1, Shop System, and Studio System 2
  • Acquired Aerosint, adding multi-material capabilities to AM 2.0 portfolio
  • Acquired Beacon Bio, adding PhonoGraft biofabrication platform to Desktop Health portfolio
  • Robust liquidity position with cash, cash equivalents and short-term investments of $514.5 million as of June 30, 2021
  • Desktop Metal enters into definitive agreement to acquire The ExOne Company

Desktop Metal, Inc. (NYSE: DM) today announced its financial results for the second quarter ended June 30, 2021.

“I’m proud of the team’s performance in the quarter delivering strong revenue growth and meaningfully expanding gross margins as our customer install base continues to grow,” said Ric Fulop, Founder and CEO of Desktop Metal. “We continue to see significant opportunities to gain share in the additive manufacturing market by leveraging our industry leading product portfolio and diversified materials platform. The Company is firing on all cylinders as we make rapid progress delivering on our vision to accelerate the adoption of AM 2.0.”

Second Quarter 2021 and Recent Business Highlights:

  • Customer adoption momentum as new customers grew 44% sequentially from the first quarter of 2021
  • Accelerating metal systems shipments, including strong growth across Production System P-1, Shop System, and Studio System 2
  • Production System P-50 on track to begin shipments in fourth quarter of 2021
  • Continued material portfolio expansion including cobalt chrome on Shop System, titanium Ti64 on Studio System 2, 4140 low-alloy steel and 316L stainless steel on Production System, and Flexcera Smile and FDA-cleared Flexcera Base on EnvisionTEC platforms
  • Forust product launch exceeded all expectations with overwhelming demand
  • Acquired Aerosint, adding multi-material capabilities to AM 2.0 portfolio
  • Acquired Beacon Bio, adding PhonoGraft biofabrication platform to Desktop Health portfolio
  • Closed Adaptive3D acquisition, bringing best-in-class elastomers to market alongside our EnvisionTEC platforms like the Xtreme 8K
  • Grew Desktop Metal team to over 500 employees today, up from 171 employees in August 2020

Second Quarter 2021 Financial Highlights:

  • Revenue of $19.0 million, up 68% from the first quarter of 2020, and up 767% from the second quarter of 2020
  • Net loss of $43.2 million, including in-process research and development assets acquired of $10.4 million related to the Beacon Bio acquisition
  • GAAP gross margin of 12%; non-GAAP gross margin of 25%, up from 5% in the first quarter of 2021
  • Adjusted EBITDA of $(24.5) million
  • Strong liquidity position with cash, cash equivalents and short-term investments of $514.5 million as of June 30, 2021

Outlook for Full Year 2021:

  • Reiterating expectation of over $100 million of revenue for 2021, exiting the year with an annualized revenue run rate of $160 million, excluding the effects of acquiring ExOne
  • Adjusted EBITDA in the range of $(70)–(80) million, excluding the effects of acquiring ExOne

Desktop Metal to Acquire ExOne:

In a separate press release issued today, Desktop Metal announced it has entered into a definitive agreement to acquire The ExOne Company, cementing its leadership in additive manufacturing for mass production. Additional details on this acquisition can be found in the separate press release and corresponding presentation, accessible on the Investor Relations section of Desktop Metal’s website, https://ir.desktopmetal.com.

Conference Call Information:

Desktop Metal will host a joint conference call on August 11, 2021 at 4:30 p.m. EST to discuss second quarter 2021 results and the ExOne acquisition announcement. Participants may access the call at 1-877-300-8521, international callers may use 1-412-317-6026, and request to join the Desktop Metal financial results conference call. A simultaneous webcast of the conference call, financial results presentation, and transaction overview presentation may be accessed online from a link in the Events & Presentations section of https://ir.desktopmetal.com. A replay will be available shortly after the conclusion of the conference call at the same website.

About Desktop Metal:

Desktop Metal, Inc., based in Burlington, Massachusetts, is accelerating the transformation of manufacturing with an expansive portfolio of 3D printing solutions, from rapid prototyping to mass production. Founded in 2015 by leaders in advanced manufacturing, metallurgy, and robotics, the company is addressing the unmet challenges of speed, cost, and quality to make additive manufacturing an essential tool for engineers and manufacturers around the world. Desktop Metal was selected as one of the world’s 30 most promising Technology Pioneers by the World Economic Forum and named to MIT Technology Review’s list of 50 Smartest Companies.

For more information, visit www.desktopmetal.com.

Cautionary Note Regarding Forward Looking Statements:

This press release relates to a proposed business combination transaction between Desktop Metal and ExOne. This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this press release, including statements regarding the anticipated benefits of the proposed transaction, anticipated impact of the proposed transaction on Desktop Metal’s and ExOne’s future results of operations and financial position, the amount and timing of synergies from the proposed transaction, the anticipated closing date, and other aspects of Desktop Metal’s and ExOne’s operations or results, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this press release are only predictions. Each of Desktop Metal and ExOne has based these forward-looking statements on current information and their respective management’s current expectations and beliefs. These forward-looking statements speak only as of the date of this press release and are subject to a number risks and uncertainties, including, without limitation, the following: the impact of the COVID-19 pandemic on Desktop Metal’s and ExOne’s business, including their suppliers and customers; the effect of the transaction (or announcement thereof) on the ability of Desktop Metal or ExOne to retain and hire key personnel and maintain relationships with customers, suppliers and others with whom they do business; risks that the transaction disrupts current plans and operations; the ability of Desktop Metal and ExOne to consummate the proposed transaction in a timely manner or at all, including the ability to secure regulatory approvals; impact to Desktop Metal’s business if the transaction is not consummated; successful integration of Desktop Metal’s and ExOne’s businesses and realization of synergies and benefits; the ability of Desktop Metal to implement business plans, forecasts and other expectations following the completion of the transaction; risk that actual performance and financial results following completion of the transaction differ from projected performance and results; and business disruption following the transaction. A more fulsome discussion of the risks related to the proposed transaction will be included in the proxy statement/prospectus. For additional information about other risks and uncertainties that could cause actual results of the transaction to differ materially from those described in the forward-looking statements in this press release of Desktop Metal’s business, financial condition, results of operations and prospects generally, please refer to Desktop Metal’s reports filed with the Securities Exchange Commission (“SEC”), including without limitation the “Risk Factors” and/or other information included in the Form 8-K to be filed by Desktop Metal in connection with the transaction, the Form 10-Q filed with the SEC on August 11, 2021 and such other reports as Desktop Metal has filed or may file with the SEC from time to time. For additional information about risks and uncertainties that may cause actual results of the transaction to differ materially from those described, please refer to ExOne’s reports filed with the SEC, including without limitation the “Risk Factors” and/or other information included in such reports. While the list of factors presented here is, and the list of factors presented in the proxy statement/prospectus will be considered representative, no such list should be considered to be a complete statement of all risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Except as required by applicable law, neither Desktop Metal nor ExOne will update any forward-looking statements to reflect new information, future events, changed circumstances or otherwise.

No Offer or Solicitation:

This press release is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Additional Information and Where to Find It:

In connection with the proposed transaction, Desktop Metal intends to file a registration statement on Form S-4 with the Securities and Exchange Commission (the “SEC”), which will include a preliminary proxy statement of ExOne and a prospectus with respect to shares of Desktop Metal’s common stock to be issued in the proposed transaction (the “proxy statement/prospectus”). INVESTORS AND SECURITY HOLDERS OF DESKTOP METAL AND EXONE ARE URGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT ARE OR WILL BE FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT/PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS. The final proxy statement/prospectus will be mailed to stockholders of ExOne in connection with meeting to be held to request approval of the proposed transaction. Investors and security holders will be able to obtain the documents free of charge at the SEC’s website, www.sec.gov, from Desktop Metal at its website, ir.desktopmetal.com, or from ExOne at its website, investor.exone.com.

Participants in the Solicitation:

Desktop Metal, ExOne and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information concerning Desktop Metal’s participants is set forth in the proxy statement, filed June 17, 2021, for Desktop Metal’s 2021 annual meeting of stockholders as filed with the SEC on Schedule 14A and on certain of its Current Reports on Form 8-K. Information concerning ExOne’s participants is set forth in the proxy statement, filed April 1, 2021, for ExOne’s 2021 annual meeting of stockholders as filed with the SEC on Schedule 14A and on certain of its Current Reports on Form 8-K. Additional information regarding the interests of such participants in the solicitation of proxies, including direct and indirect interests, in respect of the proposed transaction will be included in the registration statement and proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

 

2021

 

2020

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

188,199

 

$

483,525

Short‑term investments

 

 

326,318

 

 

111,867

Accounts receivable

 

 

13,441

 

 

6,516

Inventory

 

 

25,407

 

 

9,708

Prepaid expenses and other current assets

 

 

7,078

 

 

976

Total current assets

 

 

560,443

 

 

612,592

Restricted cash

 

 

676

 

 

612

Property and equipment, net

 

 

13,228

 

 

12,160

Capitalized software, net

 

 

226

 

 

312

Goodwill

 

 

251,060

 

 

2,252

Intangible assets, net

 

 

178,860

 

 

9,102

Other noncurrent assets

 

 

12,210

 

 

4,879

Total Assets

 

$

1,016,703

 

$

641,909

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

9,214

 

$

7,591

Customer deposits

 

 

2,829

 

 

1,480

Current portion of lease liability

 

 

1,983

 

 

868

Accrued expenses and other current liabilities

 

 

20,968

 

 

7,565

Deferred revenue

 

 

4,814

 

 

3,004

Current portion of contingent consideration

 

 

1,429

 

 

Current portion of long‑term debt, net of deferred financing costs

 

 

311

 

 

9,991

Total current liabilities

 

 

41,548

 

 

30,499

Warrant liability

 

 

 

 

93,328

Subscription agreement

 

 

474

 

 

Contingent consideration, net of current portion

 

 

4,655

 

 

Lease liability, net of current portion

 

 

3,959

 

 

2,157

Deferred tax liability

 

 

8,723

 

 

Total liabilities

 

 

59,359

 

 

125,984

Commitments and Contingences (Note 15)

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and

outstanding at June 30, 2021 and December 31, 2020, respectively

 

 

 

 

Common Stock, $0.0001 par value—500,000,000 shares authorized; 259,712,899 and

226,756,733 shares issued at June 30, 2021 and December 31, 2020, respectively,

259,545,731 and 224,626,597 shares outstanding at June 30, 2021 and December 31, 2020, respectively

 

 

26

 

 

23

Additional paid‑in capital

 

 

1,387,779

 

 

844,188

Accumulated deficit

 

 

(430,565)

 

 

(328,277)

Accumulated other comprehensive income (loss)

 

 

104

 

 

(9)

Total Stockholders’ Equity

 

 

957,344

 

 

515,925

Total Liabilities and Stockholders’ Equity

 

$

1,016,703

 

$

641,909

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2021

 

2020

 

2021

 

2020

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

17,560

 

$

1,531

 

$

27,871

 

$

4,225

Services

 

 

1,417

 

 

658

 

 

2,419

 

 

1,349

Total revenues

 

 

18,977

 

 

2,189

 

 

30,290

 

 

5,574

Cost of sales

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

 

15,490

 

 

9,372

 

 

25,977

 

 

14,413

Services

 

 

1,115

 

 

1,106

 

 

2,528

 

 

2,269

Total cost of sales

 

 

16,605

 

 

10,478

 

 

28,505

 

 

16,682

Gross profit/(loss)

 

 

2,372

 

 

(8,289)

 

 

1,785

 

 

(11,108)

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

15,651

 

 

9,827

 

 

26,509

 

 

22,167

Sales and marketing

 

 

10,894

 

 

2,958

 

 

16,343

 

 

7,452

General and administrative

 

 

13,142

 

 

2,964

 

 

26,988

 

 

5,589

In-process research and development assets acquired

 

 

10,400

 

 

 

 

10,400

 

 

Total operating expenses

 

 

50,087

 

 

15,749

 

 

80,240

 

 

35,208

Loss from operations

 

 

(47,715)

 

 

(24,038)

 

 

(78,455)

 

 

(46,316)

Change in fair value of warrant liability

 

 

 

 

 

 

(56,576)

 

 

Interest expense

 

 

(51)

 

 

(51)

 

 

(125)

 

 

(155)

Interest and other income, net

 

 

268

 

 

323

 

 

630

 

 

901

Loss before income taxes

 

 

(47,498)

 

 

(23,766)

 

 

(134,526)

 

 

(45,570)

Income tax benefit

 

 

4,318

 

 

 

 

32,238

 

 

Net loss

 

$

(43,180)

 

$

(23,766)

 

$

(102,288)

 

$

(45,570)

Net loss per share—basic and diluted

 

$

(0.17)

 

$

(0.15)

 

$

(0.41)

 

$

(0.29)

Weighted average shares outstanding, basic and diluted

 

 

255,097,905

 

 

158,124,160

 

 

246,717,400

 

 

157,186,939

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2021

 

2020

 

2021

 

2020

 

Net loss

 

 

(43,180)

 

 

(23,766)

 

$

(102,288)

 

$

(45,570)

 

Other comprehensive (loss) income, net of taxes:

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on available-for-sale marketable securities, net

 

 

(5)

 

 

132

 

 

(4)

 

 

(27)

 

Foreign currency translation adjustment

 

 

130

 

 

 

 

117

 

 

 

Total comprehensive loss, net of taxes of $0

 

 

(43,055)

 

 

(23,634)

 

$

(102,175)

 

$

(45,597)

 

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(in thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Common Stock

 

Additional

 

 

 

 

Comprehensive

 

Total

 

 

Voting

 

Paid‑in

 

Accumulated

 

(Loss)

 

Stockholders’

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Income

 

Equity

BALANCE—April 1, 2021

 

252,436,919

 

$

25

 

$

1,326,945

 

$

(387,385)

 

$

(21)

 

$

939,564

Exercise of Common Stock options

 

2,683,506

 

 

 

 

3,485

 

 

 

 

 

 

3,485

Vesting of restricted Common Stock

 

56,015

 

 

 

 

 

 

 

 

 

 

Vesting of restricted stock units

 

28,656

 

 

 

 

 

 

 

 

 

 

Repurchase of shares for employee tax withholdings

 

(6,931)

 

 

 

 

(91)

 

 

 

 

 

 

(91)

Issuance of Common Stock for acquisitions

 

4,347,566

 

 

1

 

 

53,441

 

 

 

 

 

 

53,442

Stock‑based compensation expense

 

 

 

 

 

3,999

 

 

 

 

 

 

3,999

Net loss

 

 

 

 

 

 

 

(43,180)

 

 

 

 

(43,180)

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

125

 

 

125

BALANCE—June 30, 2021

 

259,545,731

 

$

26

 

$

1,387,779

 

$

(430,565)

 

$

104

 

$

957,344

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Common Stock

 

Additional

 

 

 

 

Comprehensive

 

Total

 

 

Voting

 

Paid‑in

 

Accumulated

 

(Loss)

 

Stockholders’

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Income

 

Equity

BALANCE—January 1, 2021

 

224,626,597

 

$

23

 

$

844,188

 

$

(328,277)

 

$

(9)

 

$

515,925

Exercise of Common Stock options

 

2,846,734

 

 

 

 

3,665

 

 

 

 

 

 

3,665

Vesting of restricted Common Stock

 

112,030

 

 

 

 

 

 

 

 

 

 

Vesting of restricted stock units

 

43,921

 

 

 

 

 

 

 

 

 

 

Repurchase of shares for employee tax withholdings

 

(9,172)

 

 

 

 

(145)

 

 

 

 

 

 

(145)

Issuance of Common Stock for acquisitions

 

9,383,708

 

 

1

 

 

213,288

 

 

 

 

 

 

213,289

Stock‑based compensation expense

 

 

 

 

 

6,216

 

 

 

 

 

 

6,216

Vesting of Trine Founder shares

 

1,850,938

 

 

 

 

 

 

 

 

 

 

Exercise of warrants

 

20,690,975

 

 

2

 

 

320,567

 

 

 

 

 

 

320,569

Net loss

 

 

 

 

 

 

 

(102,288)

 

 

 

 

(102,288)

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

113

 

 

113

BALANCE—June 30, 2021

 

259,545,731

 

$

26

 

$

1,387,779

 

$

(430,565)

 

$

104

 

$

957,344

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Legacy Convertible

 

 

Common Stock

 

Additional

 

 

 

 

Comprehensive

 

Total

 

 

Preferred Stock

 

 

Voting

 

Paid‑in

 

Accumulated

 

(Loss)

 

Stockholders’

 

 

Shares

 

Amount

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Income

 

Equity

BALANCE—April 1, 2020

 

100,038,109

 

$

436,533

 

 

26,813,113

 

$

3

 

$

16,722

 

$

(316,066)

 

$

(84)

 

$

(299,425)

Retroactive

application of

recapitalization (Note 1)

 

(100,038,109)

 

 

(436,533)

 

 

130,138,012

 

 

13

 

 

438,037

 

 

 

 

 

 

438,050

Adjusted balance,

beginning of period

 

 

 

 

 

156,951,125

 

 

16

 

 

454,759

 

 

(316,066)

 

 

(84)

 

 

138,625

Exercise of Common

Stock options

 

 

 

 

 

28,173

 

 

 

 

4

 

 

 

 

 

 

4

Vesting of restricted

Common Stock

 

 

 

 

 

1,750,360

 

 

 

 

2

 

 

 

 

 

 

2

Stock‑based

compensation expense

 

 

 

 

 

 

 

 

 

1,074

 

 

 

 

 

 

1,074

Common Stock

warrants issued

 

 

 

 

 

 

 

 

 

87

 

 

 

 

 

 

87

Net loss

 

 

 

 

 

 

 

 

 

 

 

(23,766)

 

 

 

 

(23,766)

Other comprehensive

income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

132

 

 

132

BALANCE—

June 30, 2020

 

 

$

 

 

158,729,658

 

$

16

 

$

455,926

 

$

(339,832)

 

$

48

 

$

116,158

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Legacy Convertible

 

 

Common Stock

 

Additional

 

 

 

 

Comprehensive

 

Total

 

 

Preferred Stock

 

 

Voting

 

Paid‑in

 

Accumulated

 

(Loss)

 

Stockholders’

 

 

Shares

 

Amount

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Income

 

Equity

BALANCE—January 1, 2020

 

100,038,109

 

$

436,533

 

 

26,813,113

 

$

3

 

$

16,722

 

$

(294,262)

 

$

75

 

$

(277,462)

Retroactive

application of

recapitalization (Note 1)

 

(100,038,109)

 

 

(436,533)

 

 

128,100,821

 

 

13

 

 

436,520

 

 

 

 

 

 

436,533

Adjusted balance,

beginning of period

 

 

 

 

 

154,913,934

 

 

16

 

 

453,242

 

 

(294,262)

 

 

75

 

 

159,071

Exercise of Common

Stock options

 

 

 

 

 

314,809

 

 

 

 

136

 

 

 

 

 

 

136

Vesting of restricted

Common Stock

 

 

 

 

 

3,500,915

 

 

 

 

4

 

 

 

 

 

 

4

Stock‑based

compensation expense

 

 

 

 

 

 

 

 

 

2,333

 

 

 

 

 

 

2,333

Common Stock

warrants issued

 

 

 

 

 

 

 

 

 

211

 

 

 

 

 

 

211

Net loss

 

 

 

 

 

 

 

 

 

 

 

(45,570)

 

 

 

 

(45,570)

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

(27)

 

 

(27)

BALANCE—June 30, 2020

 

 

$

 

 

158,729,658

 

$

16

 

$

455,926

 

$

(339,832)

 

$

48

 

$

116,158

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

2021

 

2020

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(102,288)

 

$

(45,570)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

9,524

 

 

4,475

Stock‑based compensation

 

 

6,216

 

 

2,333

Change in fair value of warrant liability

 

 

56,576

 

 

Change in fair value of subscription agreement

 

 

474

 

 

Expense related to Common Stock warrants issued

 

 

 

 

43

Amortization (accretion) of discount on investments

 

 

1,304

 

 

Amortization of debt financing cost

 

 

9

 

 

10

Provision for bad debt

 

 

164

 

 

285

Acquired in-process research and development

 

 

10,400

 

 

(Gain) loss on disposal of property and equipment

 

 

(7)

 

 

10

Gain on investment, related to Make Composites, Inc.

 

 

 

 

120

Net increase in accrued interest related to marketable securities

 

 

(1,062)

 

 

Net unrealized (gain) on marketable securities

 

 

32

 

 

Deferred tax benefit

 

 

(32,354)

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(3,584)

 

 

1,562

Inventory

 

 

(6,635)

 

 

(1,378)

Prepaid expenses and other current assets

 

 

(3,692)

 

 

1,033

Other assets

 

 

(719)

 

 

Accounts payable

 

 

(278)

 

 

(1,178)

Accrued expenses and other current liabilities

 

 

(5,362)

 

 

(1,074)

Customer deposits

 

 

(1,372)

 

 

(57)

Deferred revenue

 

 

693

 

 

(756)

Change in right of use assets and lease liabilities, net

 

 

(92)

 

 

(162)

Net cash used in operating activities

 

 

(72,053)

 

 

(40,304)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(1,266)

 

 

(1,819)

Purchase of other investments

 

 

(3,710)

 

 

Purchase of marketable securities

 

 

(281,438)

 

 

(24,142)

Proceeds from sales and maturities of marketable securities

 

 

66,741

 

 

74,616

Cash paid to acquire in-process research and development

 

 

(6,050)

 

 

Cash paid for acquisitions, net of cash acquired

 

 

(161,837)

 

 

Net cash (used in) provided by investing activities

 

 

(387,560)

 

 

48,655

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from the exercise of stock options

 

 

3,665

 

 

135

Proceeds from the exercise of stock warrants

 

 

170,665

 

 

Proceeds from PPP loan

 

 

 

 

5,379

Repayment of PPP loan

 

 

 

 

(5,379)

Repayment of term loan

 

 

(10,000)

 

 

Net cash provided by financing activities

 

 

164,330

 

 

135

Net (decrease) increase in cash, cash equivalents, and restricted cash

 

 

(295,283)

 

 

8,486

Effect of exchange rate changes

 

 

21

 

 

Cash and cash equivalents at beginning of period

 

 

483,525

 

 

66,161

Restricted cash at beginning of period

 

 

612

 

 

612

Cash and cash equivalents at end of period

 

$

188,199

 

$

74,647

Restricted cash at end of period

 

$

676

 

$

612

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

Interest paid

 

$

125

 

 

182

Taxes paid

 

$

150

 

 

 

 

 

 

 

 

 

Non‑cash investing and financing activities:

 

 

 

 

 

 

Net unrealized loss on investments

 

$

4

 

$

Exercise of private placement warrants

 

$

149,904

 

$

Common Stock issued for acquisitions

 

$

213,289

 

$

Cash held back in acquisitions

 

$

50

 

$

Additions to right of use assets and lease liabilities

 

$

852

 

$

Purchase of property and equipment included in accounts payable

 

$

 

$

Purchase of property and equipment included in accrued expense

 

$

33

 

$

139

Tax liabilities related to withholdings on Common Stock

 

$

145

 

$

Contingent consideration in connection with acquisitions

 

$

6

 

$

NON-GAAP FINANCIAL INFORMATION

This press release contains non-GAAP financial measures, including Non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, EBITDA and Adjusted EBITDA.

  • We define Non-GAAP gross margin as GAAP gross margin excluding the effect of stock-based compensation, amortization of acquired intangible assets, acquisition-related and other transactional charges included in general and administrative expenses and change in fair value of warrant liability
  • We define Non-GAAP operating loss as GAAP operating loss excluding the effect of stock-based compensation, amortization of acquired intangible assets, acquisition-related and other transactional charges included in general and administrative expenses and change in fair value of warrant liability
  • We define Non-GAAP net loss as GAAP net loss excluding the effect of stock-based compensation, amortization of acquired intangible assets, acquisition-related and other transactional charges included in general and administrative expenses and change in fair value of warrant liability
  • We define EBITDA as GAAP net income (loss) excluding interest, income taxes and depreciation and amortization expense
  • We define Adjusted EBITDA as EBITDA excluding stock based compensation, warrant expenses and transaction costs associated with acquisitions

In addition to Desktop Metal’s results determined in accordance with GAAP, Desktop Metal’s management uses this non-GAAP financial information to evaluate the Company’s ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial information, when taken collectively, may be helpful to investors in assessing Desktop Metal’s operating performance.

We believe that the use of Non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends because it eliminates the effect of financing, capital expenditures, and non-cash expenses such as stock-based compensation and warrants, and provides investors with a means to compare Desktop Metal’s financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, investors should be aware that when evaluating Non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, EBITDA and Adjusted EBITDA, we may incur future expenses similar to those excluded when calculating these measures. In addition, our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of these measures may not be comparable to other similarly titled measures computed by other companies because not all companies calculate these measures in the same fashion.

Because of these limitations, Non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, EBITDA and Adjusted EBITDA on a supplemental basis. Management uses, and investors should consider, our non-GAAP financial measures only in conjunction with our GAAP results.

Set forth below is a reconciliation of each Non-GAAP financial measure used in this press release to its most directly comparable GAAP financial measure.

DESKTOP METAL, INC.

NON-GAAP RECONCILIATION TABLE

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

June 30,

 

June 30,

(Dollars in thousands)

 

2021

 

2020

 

2021

 

2020

GAAP gross margin

 

$

2,372

 

$

(8,289)

 

$

1,785

 

$

(11,108)

Stock-based compensation included in cost of sales

 

 

128

 

 

52

 

 

246

 

 

152

Amortization of acquired intangible assets included in cost of sales

 

 

2,235

 

 

 

 

3,327

 

 

Non-GAAP gross margin

 

$

4,735

 

$

(8,237)

 

$

5,358

 

$

(10,956)

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating loss

 

$

(47,715)

 

$

(24,037)

 

$

(78,455)

 

$

(46,315)

Stock-based compensation

 

 

3,999

 

 

1,074

 

 

6,216

 

 

2,333

Amortization of acquired intangible assets included in cost of sales

 

 

2,235

 

 

 

 

3,327

 

 

Amortization of acquired intangibles assets

 

 

2,033

 

 

160

 

 

3,241

 

 

324

Acquisition-related and other transactional charges included in

general and administrative expenses

 

 

3,329

 

 

 

 

8,313

 

 

In-process research and development assets acquired

 

 

10,198

 

 

 

 

10,198

 

 

Non-GAAP operating loss

 

$

(25,921)

 

$

(22,803)

 

$

(47,160)

 

$

(43,658)

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(43,180)

 

$

(23,766)

 

$

(102,288)

 

$

(45,570)

Stock-based compensation

 

 

3,999

 

 

1,074

 

 

6,216

 

 

2,333

Amortization of acquired intangible assets included in cost of sales

 

 

2,235

 

 

 

 

3,327

 

 

Amortization of acquired intangibles assets

 

 

2,033

 

 

160

 

 

3,241

 

 

324

Acquisition-related and other transactional charges included in

general and administrative expenses

 

 

3,329

 

 

 

 

8,313

 

 

In-process research and development assets acquired

 

 

10,198

 

 

 

 

10,198

 

 

Change in fair value of investments

 

 

(18)

 

 

 

 

(18)

 

 

Change in fair value of warrant liability

 

 

 

 

 

 

56,576

 

 

Non-GAAP net loss

 

$

(21,404)

 

$

(22,532)

 

$

(14,435)

 

$

(42,913)

DESKTOP METAL, INC.

ADJUSTED EBITDA RECONCILIATION TABLE

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

June 30,

 

June 30,

(Dollars in thousands)

 

2021

 

2020

 

2021

 

2020

Net loss attributable to common stockholders

 

$

(43,180)

 

$

(23,766)

 

$

(102,288)

 

$

(45,570)

Interest (income) expense, net

 

 

(140)

 

 

(185)

 

 

(182)

 

 

(663)

Income tax benefit

 

 

(4,317)

 

 

 

 

(32,238)

 

 

Depreciation and amortization

 

 

5,679

 

 

2,154

 

 

9,571

 

 

4,475

In-process research and development assets acquired

 

 

10,198

 

 

 

 

10,198

 

 

EBITDA

 

 

(31,760)

 

 

(21,797)

 

 

(114,939)

 

 

(41,758)

Change in fair value of warrant liability

 

 

 

 

 

 

56,576

 

 

Change in fair value of investments

 

 

(18)

 

 

 

 

(18)

 

 

Stock compensation expense

 

 

3,999

 

 

1,074

 

 

6,216

 

 

2,333

Warrant expense

 

 

 

 

87

 

 

 

 

211

Transaction costs associated with acquisitions

 

 

3,329

 

 

 

 

8,313

 

 

Adjusted EBITDA

 

$

(24,450)

 

$

(20,636)

 

$

(43,852)

 

$

(39,214)

 

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