First Quarter 2023 Highlights

• Revenue totaled $35.0 million
• Total orders were $34.6 million
• Net loss totaled $(1.3) million; Adjusted net loss¹ was $(5.5) million
• Adjusted EBITDA¹ totaled $4.1 million, representing an Adjusted EBITDA margin¹ of 11.7%

HARTLAND, Wis. — (BUSINESS WIRE) — May 14, 2023 — Fathom Digital Manufacturing Corp. (NYSE: FATH), an industry leader in on-demand digital manufacturing services, today announced financial results for the first quarter ended March 31, 2023.

“Our results for the first quarter reflect the strong execution of our $19.5 million optimization plan, enabling Fathom to extend its history of Adjusted EBITDA and cash generation,” said Ryan Martin, Fathom Chief Executive Officer. “During the quarter, we consolidated our two existing facilities in Texas and implemented other productivity initiatives, contributing to a gross margin improvement of 810 basis points on a sequential basis. Our strategic actions focused on driving future performance continue to gain traction while the macro environment remains challenging. Going forward, we will maintain our focus on actively managing our cost structure to ensure production levels are in-line with customer demand and capitalizing on our increased scalability as market conditions improve.”

Summary of Financial Results

Revenue for the first quarter of 2023 was $35.0 million compared to $40.5 million in the first quarter of 2022, a decrease of 13.7% primarily due to lower production volumes driven by the softer macroeconomic environment.

Gross profit for the first quarter of 2023 totaled $11.9 million, or 34.1% of revenue, compared to $12.0 million, or 29.6% of revenue, in the first quarter of 2022. Excluding approximately $3.2 million in non-cash purchase accounting adjustments, gross profit for the first quarter 2022 was $15.2 million, or 37.5% of revenue.

Net loss for the first quarter of 2023 was $(1.3) million compared to net income of $19.0 million in the first quarter of 2022. Excluding the revaluation of Fathom warrants and earnout shares, stock compensation expense, optimization plan expenses, and other costs, Fathom reported an adjusted net loss in the first quarter of 2023 totaling $(5.5) million compared to an adjusted net loss of $(0.8) million for the same period in 2022.

Adjusted EBITDA for the first quarter of 2023 totaled $4.1 million versus $6.2 million for the same period in 2022 primarily due to lower volume leverage, partially offset by cost savings from the execution of Fathom’s optimization plan. The Adjusted EBITDA margin in the quarter was 11.7% compared to 15.2% in the first quarter of 2022.

Conference Call

Fathom will host a conference call on Monday, May 15, 2023 at 8:30 am Eastern Time to discuss the results for the first quarter 2023 and provide the company’s outlook for the second quarter 2023. The dial-in number for callers in the U.S. is +1-833-470-1428 and the dial-in number for international callers is +1-833-950-0062. The access code for all callers is 522761. The conference call will be broadcast live over the Internet and include a slide presentation. To access the webcast and supporting materials, please visit the investor relations section of Fathom’s website at https://investors.fathommfg.com.

A replay of the conference call can be accessed through May 22, 2023, by dialing +1-866-813-9403 (US) or +1-226-828-7578 (international), and then entering the access code 412938. The webcast will also be archived on Fathom’s website.

About Fathom Digital Manufacturing

Fathom is one of the largest on-demand digital manufacturing platforms in North America, serving the comprehensive product development and low- to mid-volume manufacturing needs of some of the largest and most innovative companies in the world. With more than 25 quick turn manufacturing processes combined with an extensive national footprint, Fathom seamlessly blends in-house capabilities across plastic and metal additive technologies, CNC machining, injection molding and tooling, sheet metal fabrication, design and engineering, and more. Fathom has more than 35 years of industry experience and is at the forefront of the Industry 4.0 digital manufacturing revolution, serving clients in the technology, defense, aerospace, medical, automotive, IOT sectors, and others. Fathom's certifications include: ITAR Registered, ISO 9001:2015 Design Certified, ISO 9001:2015, ISO 13485:2016, AS9100:2016, and NIST 800-171. To learn more, visit https://fathommfg.com/.

Forward-Looking Statements

Certain statements made in this press release are “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Words such as “estimates,” “projects,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “would,” “should,” “future,” “propose,” “target,” “goal,” “objective,” “outlook” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the control of Fathom Digital Manufacturing Corporation (“Fathom”) that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include: the inability to recognize the anticipated benefits of our business combination with Altimar Acquisition Corp. II; changes in general economic conditions, including as a result of the COVID-19 pandemic or any future outbreaks of other highly infectious or contagious disease; the implementation of our optimization plan could result in greater costs and fewer benefits than we anticipate; the outcome of litigation related to or arising out of the business combination, or any adverse developments therein or delays or costs resulting therefrom; the ability to meet the New York Stock Exchange’s listing standards following the consummation of the business combination; costs related to the business combination and additional factors discussed in Fathom’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission (the “SEC”) on April 7, 2023, as amended on May 1, 2023, as well as Fathom’s other filings with the SEC. If any of the risks described above materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by our forward-looking statements. There may be additional risks that Fathom does not presently know or that Fathom currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Fathom’s expectations, plans or forecasts of future events and views as of the date of this press release. These forward-looking statements should not be relied upon as representing Fathom’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements. Fathom undertakes no obligation to update or revise any forward-looking statements made by management or on its behalf whether as a result of future developments, subsequent events or circumstances or otherwise, except as required by law.