Desktop Metal Announces First Quarter 2024 Financial Results

  • Revenue of $40.6 million, down less than 2% year over year
  • 1Q 2024 net loss of $(52.1) million, impacted by one-time noncash charges related to accelerated amortization and depreciation on certain intangible and fixed assets
  • Adjusted EBITDA of $(13.6 million), a year-over-year improvement of 44%
  • Ongoing cost reduction efforts continue to yield improvements to adjusted EBITDA, gross margins, non-GAAP gross margins, operating expenses, and operating cash flow
  • Quarterly GAAP operating expenses declined 7% year over year. Quarterly non-GAAP operating expenses declined for nine consecutive quarters to $28.6 million, down 45% from the quarter before start of DM’s cost reduction initiative
  • Continue to explore strategic alternatives for Desktop Metal’s photopolymer portfolio to accelerate the path to positive adjusted EBITDA

BOSTON — (BUSINESS WIRE) — May 9, 2024 — Desktop Metal, Inc. (NYSE: DM), a global leader in Additive Manufacturing 2.0 technologies for mass production, today announced its financial results for the first quarter ended March 31, 2024.

“We started 2024 on a solid foot, despite persistent challenges across the capital investment backdrop, which has been a headwind to our overall demand function. The DM team has shown a continued ability to improve operational performance as we decrease our operating expenses for the ninth consecutive quarter,” said Ric Fulop, Founder and CEO of Desktop Metal.

“We are continuing to see strong demand for our production binder jet systems that produce metal, sand and ceramic parts, as well as a constructive environment for the value of Additive Manufacturing 2.0 systems. Looking ahead to the balance of 2024, we are confident in achieving positive adjusted EBITDA in the second half of 2024. Given our strategic cost-outs, we expect strong leverage as sales growth returns.”

First Quarter 2024 Recent Business Highlights:

Corporate

  • Continued execution of cost reduction plans with expectation of positive adjusted EBITDA in the second half of 2024

Product Performance

  • Desktop Health launches ScanUp™ digital dentistry adoption subscription program to modernize dental practice efficiency and patient care
  • Desktop Metal and Evonik expand partnership, announce qualification of INFINAM® ST 6100 L on large format Additive Manufacturing 2.0 systems for high-performance, high-temperature products
  • Desktop Health™ announces Flexcera™ Base Ultra+ dental resin for stronger, more comfortable 3D Printed dentures

First Quarter 2024 Financial Highlights

  • Revenue of $40.6 million, down from $41.3 million in the same quarter a year ago.
  • GAAP gross margin of (5.4)%; Non-GAAP gross margin of 30.5%, a year-over-year improvement of 69.9%. GAAP gross margins impacted by one-time noncash charges related to accelerated amortization and depreciation on certain intangible and fixed assets
  • 1Q 2024 net loss of $(52.1) million, impacted by one-time noncash charges related to accelerated amortization and depreciation on certain intangible and fixed assets
  • Adjusted EBITDA of $(13.6) million, a year-over-year improvement of 44.3%
  • Cash, cash equivalents, and short-term investments closed first quarter 2024 at $66.3 million, as rate of cash consumption declined 47% compared to the same year-ago quarter

Financial Outlook

Reaffirm 2024 full year guidance of:

  • Revenue expectation of between $175 million to $215 million for 2024
  • Adjusted EBITDA of between $(30) million to $(10) million for full-year 2024

Desktop Metal has not provided a reconciliation of its Adjusted EBITDA outlook to net income because estimates of all of the reconciling items cannot be provided without unreasonable efforts. See “Non-GAAP Financial Information.”

Conference Call Information:

Desktop Metal will host a conference call on Thursday, May 9, 2024 at 8:30 am ET to discuss first quarter 2024 results. Participants may access the call at 1-888-886-7786, international callers may use 1-416-764-8658, and request to join the Desktop Metal financial results conference call. A simultaneous webcast of the conference call and the accompanying summary presentation may be accessed online at the Events & Presentations section of 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 (NYSE: DM) is driving Additive Manufacturing 2.0, a new era of on-demand, digital mass production of industrial, medical, and consumer products. Our innovative 3D printers, materials, and software deliver the speed, cost, and part quality required for this transformation. We’re the original inventors and world leaders of the 3D printing methods we believe will empower this shift, binder jetting and digital light processing. Today, our systems print metal, polymer, sand and other ceramics, as well as foam and recycled wood. Manufacturers use our technology worldwide to save time and money, reduce waste, increase flexibility, and produce designs that solve the world’s toughest problems and enable once-impossible innovations. Learn more about Desktop Metal and our #TeamDM brands at www.desktopmetal.com.

Forward-looking Statements:

This press release contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical facts contained in these communications, including statements regarding Desktop Metal’s future results of operations and financial position, financial targets, business strategy, and plans and objectives for future operations, are forward-looking statements. Forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this document, including but not limited to: demand for Desktop Metal’s products and services; the global macro-economic environment; impacts of rapid technological change in the additive manufacturing industry; Desktop Metal’s ability to realize the benefits from cost saving measures; and supply and logistics disruptions, including shortages and delays. For more information about risks and uncertainties that may impact Desktop Metal’s business, financial condition, results of operations and prospects generally, please refer to Desktop Metal’s reports filed with the SEC, including without limitation the “Risk Factors” and/or other information included in the Form 10-K filed with the SEC on March 15, 2024, and such other reports as Desktop Metal has filed or may file with the SEC from time to time. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Desktop Metal, Inc. assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

 

2024

 

2023

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

65,559

 

 

$

83,845

 

Current portion of restricted cash

 

 

216

 

 

 

233

 

Short-term investments

 

 

495

 

 

 

625

 

Accounts receivable

 

 

35,420

 

 

 

37,690

 

Inventory

 

 

83,097

 

 

 

82,639

 

Prepaid expenses and other current assets

 

 

11,008

 

 

 

11,105

 

Assets held for sale

 

 

1,528

 

 

 

 

Total current assets

 

 

197,323

 

 

 

216,137

 

Restricted cash, net of current portion

 

 

612

 

 

 

612

 

Property and equipment, net

 

 

31,651

 

 

 

35,840

 

Intangible assets, net

 

 

146,545

 

 

 

168,259

 

Other noncurrent assets

 

 

35,899

 

 

 

37,153

 

Total Assets

 

$

412,030

 

 

$

458,001

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

18,332

 

 

$

18,190

 

Customer deposits

 

 

4,271

 

 

 

5,356

 

Current portion of lease liability

 

 

7,793

 

 

 

7,404

 

Accrued expenses and other current liabilities

 

 

24,936

 

 

 

27,085

 

Current portion of deferred revenue

 

 

14,179

 

 

 

11,739

 

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

 

 

276

 

 

 

330

 

Total current liabilities

 

 

69,787

 

 

 

70,104

 

Long-term debt, net of current portion

 

 

58

 

 

 

89

 

Convertible notes

 

 

112,747

 

 

 

112,565

 

Lease liability, net of current portion

 

 

22,563

 

 

 

23,566

 

Deferred revenue, net of current portion

 

 

3,564

 

 

 

3,696

 

Deferred tax liability

 

 

3,202

 

 

 

3,523

 

Other noncurrent liabilities

 

 

2,771

 

 

 

2,806

 

Total liabilities

 

 

214,692

 

 

 

216,349

 

Commitments and Contingencies (Note 17)

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

 

 

 

 

 

 

Common Stock, $0.0001 par value—500,000,000 shares authorized; 329,705,193 and 325,277,419 shares issued at March 31, 2024 and December 31, 2023, respectively, 329,705,193 and 325,271,670 shares outstanding at March 31, 2024 and December 31, 2023, respectively

 

 

33

 

 

 

33

 

Additional paid-in capital

 

 

1,917,506

 

 

 

1,908,504

 

Accumulated deficit

 

 

(1,684,323

)

 

 

(1,632,225

)

Accumulated other comprehensive loss

 

 

(35,878

)

 

 

(34,660

)

Total Stockholders’ Equity

 

 

197,338

 

 

 

241,652

 

Total Liabilities and Stockholders’ Equity

 

$

412,030

 

 

$

458,001

 

 

See notes to condensed consolidated financial statements

 

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

 

2024

 

2023

Revenues

 

 

 

 

 

 

Products

 

$

35,631

 

 

$

36,697

 

Services

 

 

4,969

 

 

 

4,619

 

Total revenues

 

 

40,600

 

 

 

41,316

 

Cost of sales

 

 

 

 

 

 

Products

 

 

39,019

 

 

 

38,891

 

Services

 

 

3,787

 

 

 

3,789

 

Total cost of sales

 

 

42,806

 

 

 

42,680

 

Gross loss

 

 

(2,206

)

 

 

(1,364

)

Operating expenses

 

 

 

 

 

 

Research and development

 

 

19,813

 

 

 

23,144

 

Sales and marketing

 

 

11,153

 

 

 

9,607

 

General and administrative

 

 

16,217

 

 

 

18,202

 

Total operating expenses

 

 

47,183

 

 

 

50,953

 

Loss from operations

 

 

(49,389

)

 

 

(52,317

)

Interest expense

 

 

(1,491

)

 

 

(811

)

Interest and other expense, net

 

 

(1,416

)

 

 

(71

)

Loss before income taxes

 

 

(52,296

)

 

 

(53,199

)

Income tax benefit

 

 

198

 

 

$

557

 

Net loss

 

$

(52,098

)

 

$

(52,642

)

Net loss per share—basic and diluted

 

 

(0.16

)

 

 

(0.16

)

Weighted average shares outstanding, basic and diluted

 

 

327,124,115

 

 

 

319,095,656

 

 

See notes to condensed consolidated financial statements.

 

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

 

2024

 

2023

Net loss

 

$

(52,098

)

 

$

(52,642

)

Other comprehensive loss, net of taxes:

 

 

 

 

 

 

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

 

 

(451

)

 

 

189

 

Foreign currency translation adjustment

 

 

(767

)

 

 

1,549

 

Total comprehensive loss, net of taxes of $0

 

$

(53,316

)

 

$

(50,904

)

 

See notes to condensed consolidated financial statements.

 

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(in thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Common Stock

 

Additional

 

 

 

 

Comprehensive

 

Total

 

 

Voting

 

Paid-in

 

Accumulated

 

(Loss)

 

Stockholders’

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Income

 

Equity

BALANCE—January 1, 2024

 

325,271,670

 

 

$

33

 

$

1,908,504

 

 

$

(1,632,225

)

 

$

(34,660

)

 

$

241,652

 

Exercise of Common Stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted Common Stock

 

5,749

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted stock units

 

4,963,667

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of shares for employee tax withholdings

 

(535,893

)

 

 

 

 

(328

)

 

 

 

 

 

 

 

 

(328

)

Issuance of common stock related to share-based liability awards

 

 

 

 

 

 

1,997

 

 

 

 

 

 

 

 

 

1,997

 

Stock-based compensation expense

 

 

 

 

 

 

7,333

 

 

 

 

 

 

 

 

 

7,333

 

Net loss

 

 

 

 

 

 

 

 

 

(52,098

)

 

 

 

 

 

(52,098

)

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

(1,218

)

 

 

(1,218

)

BALANCE—March 31, 2024

 

329,705,193

 

 

$

33

 

$

1,917,506

 

 

$

(1,684,323

)

 

$

(35,878

)

 

$

197,338

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Common Stock

 

Additional

 

 

 

 

Comprehensive

 

Total

 

 

Voting

 

Paid-in

 

Accumulated

 

(Loss)

 

Stockholders’

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Income

 

Equity

BALANCE—January 1, 2023

 

318,133,434

 

 

$

32

 

$

1,874,792

 

 

$

(1,308,954

)

 

$

(38,368

)

 

$

527,502

 

Exercise of Common Stock options

 

495,876

 

 

 

 

 

597

 

 

 

 

 

 

 

 

 

597

 

Vesting of restricted Common Stock

 

25,375

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted stock units

 

1,808,422

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of shares for employee tax withholdings

 

(61,718

)

 

 

 

 

(99

)

 

 

 

 

 

 

 

 

(99

)

Stock-based compensation expense

 

 

 

 

 

 

8,474

 

 

 

 

 

 

 

 

 

8,474

 

Net loss

 

 

 

 

 

 

 

 

 

(52,642

)

 

 

 

 

 

(52,642

)

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

1,738

 

 

 

1,738

 

BALANCE—March 31, 2023

 

320,401,389

 

 

$

32

 

$

1,883,764

 

 

$

(1,361,596

)

 

$

(36,630

)

 

$

485,570

 

 

See notes to condensed consolidated financial statements.

 

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

2024

 

2023

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(52,098

)

 

$

(52,642

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

24,185

 

 

 

13,433

 

Stock-based compensation

 

 

7,838

 

 

 

9,313

 

Amortization (accretion) of discount on investments

 

 

 

 

 

(382

)

Amortization of deferred costs on convertible notes

 

 

182

 

 

 

183

 

Provision for bad debt

 

 

123

 

 

 

179

 

Loss on disposal of property and equipment

 

 

30

 

 

 

519

 

Net decrease in accrued interest related to marketable securities

 

 

 

 

 

(8

)

Net unrealized loss on equity investment

 

 

130

 

 

 

402

 

Deferred tax benefit

 

 

(198

)

 

 

(557

)

Foreign currency transaction loss (gain)

 

 

488

 

 

 

(25

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

2,001

 

 

 

2,792

 

Inventory

 

 

(1,763

)

 

 

(6,892

)

Prepaid expenses and other current assets

 

 

9

 

 

 

(4,664

)

Other assets

 

 

2,317

 

 

 

991

 

Accounts payable

 

 

87

 

 

 

(3,011

)

Accrued expenses and other current liabilities

 

 

(418

)

 

 

878

 

Customer deposits

 

 

(1,046

)

 

 

705

 

Current portion of deferred revenue

 

 

2,397

 

 

 

1,127

 

Change in right of use assets and lease liabilities, net

 

 

(1,684

)

 

 

(1,493

)

Other liabilities

 

 

11

 

 

 

1,806

 

Net cash used in operating activities

 

 

(17,409

)

 

 

(37,346

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(93

)

 

 

(1,011

)

Proceeds from sale of property and equipment

 

 

 

 

 

3,071

 

Purchase of marketable securities

 

 

 

 

 

(4,973

)

Proceeds from sales and maturities of marketable securities

 

 

 

 

 

64,840

 

Cash paid for acquisitions, net of cash acquired

 

 

 

 

 

(500

)

Net cash (used in) provided by investing activities

 

 

(93

)

 

 

61,427

 

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from the exercise of stock options

 

 

 

 

 

597

 

Payment of taxes related to net share settlement upon vesting of restricted stock units

 

 

(328

)

 

 

(99

)

Repayment of loans

 

 

(79

)

 

 

(250

)

Net cash (used in) provided by financing activities

 

 

(407

)

 

 

248

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

(394

)

 

 

217

 

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

 

 

(18,303

)

 

 

24,546

 

Cash, cash equivalents, and restricted cash at beginning of period

 

 

84,690

 

 

 

81,913

 

Cash, cash equivalents, and restricted cash at end of period

 

$

66,387

 

 

$

106,459

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information

 

 

 

 

 

 

Reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total shown in the condensed consolidated statements of cash flows:

 

 

 

 

 

 

Cash and cash equivalents

 

$

65,559

 

 

$

101,252

 

Restricted cash included in other current assets

 

 

216

 

 

 

4,595

 

Restricted cash included in other noncurrent assets

 

 

612

 

 

 

612

 

Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows

 

$

66,387

 

 

$

106,459

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

Interest paid

 

$

 

 

$

 

Taxes paid

 

$

 

 

$

 

 

 

 

 

 

 

 

Non-cash investing and financing activities:

 

 

 

 

 

 

Net unrealized gain on investments

 

$

 

 

$

(189

)

Additions to right of use assets and lease liabilities

 

$

863

 

 

$

1,531

 

Purchase of property and equipment included in accounts payable

 

$

190

 

 

$

183

 

Purchase of property and equipment included in accrued expense

 

$

 

 

$

32

 

Transfers from property and equipment to inventory

 

$

 

 

$

275

 

Transfers from PP&E to Asset Held-For-Sale

 

$

1,528

 

 

 

6,040

 

Transfers from inventory to property and equipment

 

$

772

 

 

$

1,067

 

 

See notes to condensed consolidated financial statements.

 

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