Fathom Digital Manufacturing Reports Third Quarter 2023

Fathom Digital Manufacturing Reports Third Quarter 2023 Financial Results

Consolidated Balance Sheets
	Period Ended
	September 30, 2023 (Unaudited)			December 31, 2022
Assets
Current assets
Cash	$	7,821		$	10,713
Accounts receivable, net ⁽¹⁾		22,040			28,641
Inventory		16,779			15,718
Prepaid expenses and other current assets		2,403			3,588
Total current assets		49,043			58,660
Property and equipment, net		47,164			47,703
Right-of-use lease assets, net		11,469			12,565
Intangible assets, net		237,807			251,412
Other non-current assets		142			175
Total assets	$	345,625		$	370,515
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	9,401		$	7,982
Accrued expenses		7,691			8,176
Current lease liability		2,143			2,374
Other current liabilities		2,671			4,828
Current portion of debt, net		157,321			42,744
Total current liabilities		179,227			66,104
Long-term debt, net		-			114,327
Fathom earnout shares liability		283			5,960
Sponsor earnout shares liability		49			930
Warrant liability		191			2,780
Payable to related parties pursuant to the tax receivable agreement (includes $4,416 and $4,000 at fair value, respectively)		25,800			25,360
Noncurrent lease liability		9,709			11,083
Total liabilities		215,259			226,544
Commitments and Contingencies:
Contingently Redeemable Preferred Equity:
Redeemable non-controlling interest in Fathom OpCo		76,144			92,207
Shareholders' Equity:
Class A common stock, $0.0001 par value; 15,000,000 shares authorized; issued and outstanding 3,507,084 and 3,290,438 shares as of September 30, 2023 and December 31, 2022, respectively ⁽²⁾		-			7
Class B common stock, $0.0001 par value; 9,000,000 shares authorized; issued and outstanding 3,327,379 and 3,507,653 shares as of September 30, 2023 and December 31, 2022, respectively ⁽²⁾		-			7
Class C common stock, $0.0001 par value; 500,000 shares authorized; 0 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		-			-
Preferred stock, $0.0001 par value; 500,000 shares authorized; 0 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		-			-
Additional paid-in-capital		595,785			587,941
Accumulated other comprehensive loss		(107	)		(107	)
Accumulated deficit		(541,456	)		(536,084	)
Shareholders’ equity attributable to Fathom Digital Manufacturing Corporation		54,222			51,764
Total Liabilities, Shareholders’ Equity, and Redeemable Non-Controlling Interest	$	345,625		$	370,515

Consolidated Statements of Comprehensive Income (Loss)
	Three Months Ended						Nine Months Ended
	September 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022

Revenue	$	31,458		$	40,210		$	100,939		$	122,737
Cost of revenue ⁽¹⁾ ⁽²⁾		23,194			25,144			70,196			80,126
Gross profit		8,264			15,066			30,743			42,611
Operating expenses
Selling, general, and administrative		8,117			11,960			28,335			38,341
Depreciation and amortization		4,627			4,627			13,845			13,595
Restructuring		718			996			2,774			996
Goodwill impairment		-			1,066,564			-			1,066,564
Total operating expenses		13,462			1,084,147			44,954			1,119,496
Operating loss		(5,198	)		(1,069,081	)		(14,211	)		(1,076,885	)
Interest expense and other expense (income)
Interest expense		3,993			2,406			11,422			5,738
Other expense		435			81			573			276
Other income		(1,049	)		(25,548	)		(9,152	)		(88,771	)
Total interest expense and other expense (income), net		3,379			(23,061	)		2,843			(82,757	)
Net loss before income tax		(8,577	)		(1,046,020	)		(17,054	)		(994,128	)
Income tax expense (benefit)		(9	)		(7,050	)		110			(8,435	)
Net loss		(8,568	)		(1,038,970	)		(17,164	)		(985,693	)
Net loss attributable to Fathom OpCo non-controlling interest (Note 14)		(4,206	)		(556,027	)		(11,792	)		(561,728	)
Net loss attributable to controlling interest		(4,362	)		(482,943	)		(5,372	)		(423,965	)
Comprehensive loss:
Loss from foreign currency translation adjustments		-			-			-			(107	)
Comprehensive loss, net of tax	$	(4,362	)	$	(482,943	)	$	(5,372	)	$	(424,072	)
Earnings per Share:
Net loss per share attributable to shares of Class A common stock
Basic ⁽⁴⁾	$	(1.24	)	$	(0.05	)	$	(1.56	)	$	(153.20	)
Diluted ⁽⁴⁾	$	(1.24	)	$	(0.05	)	$	(1.56	)	$	(153.20	)
Weighted average Class A common shares outstanding
Basic ⁽⁴⁾		3,504,859			3,140,809			3,448,030			2,767,401
Diluted ⁽⁴⁾		3,504,859			3,140,809			3,448,030			2,767,401

Three Months 2023 Revenue by Product Line

	Three Months Ended
($ in thousands)	9/30/2023	% Revenue	9/30/2022	% Revenue	% Change
Revenue By Product Line
Additive manufacturing	$2,692	8.6%	$3,154	7.8%	-14.6%
Injection molding	$5,372	17.1%	$5,984	14.9%	-10.2%
CNC machining	$12,486	39.7%	$15,530	38.6%	-19.6%
Precision sheet metal	$9,542	30.3%	$13,719	34.1%	-30.4%
Other revenue	$1,366	4.3%	$1,823	4.5%	25.1%
Total	$31,458	100.0%	$40,210	100.0%	-21.8%


	Nine Months Ended
($ in thousands)	9/30/2023	% Revenue	9/30/2022	% Revenue	% Change
Revenue By Product Line
Additive manufacturing	$9,567	9.5%	$11,713	9.5%	-18.3%
Injection molding	$16,114	16.0%	$19,892	16.2%	-19.0%
CNC machining	$39,956	39.6%	$43,441	35.4%	-8.0%
Precision sheet metal	$30,089	29.8%	$43,153	35.2%	-30.3%
Other revenue	$5,213	5.2%	$4,538	3.7%	14.9%
Total	$100,939	100.0%	$122,737	100.0%	-17.8%

Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income (Loss)
	Three Months Ended						Nine Months Ended
	September 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
Net loss	$	(8,568	)	$	(1,038,970	)	$	(17,164	)	$	(985,694	)
Stock compensation		1,139			1,762			3,471			5,687
Inventory step-up amortization ⁽¹⁾		-			-			-			3,241
Goodwill impairment		-			1,066,564			-			1,066,564
Restructuring expense		718			996			2,774			996
Change in fair value of warrant liability ⁽²⁾		(409	)		(7,400	)		(2,589	)		(28,000	)
Change in fair value of earnout share liabilities ⁽²⁾		(613	)		(18,080	)		(6,558	)		(59,980	)
Change in fair value of TRA liability ⁽²⁾		392			-			442			(200	)
Integration, non-recurring, non-operating, cash, and non-cash costs ⁽³⁾		203			492			1,315			3,443
Adjusted net loss	$	(7,138	)	$	5,364		$	(18,309	)	$	6,057

Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
	Three Months Ended						Nine Months Ended
	September 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
Net loss	$	(8,568	)	$	(1,038,970	)	$	(17,164	)	$	(985,694	)
Depreciation and amortization		6,248			6,335			18,792			18,539
Interest expense, net		3,993			2,406			11,422			5,738
Income tax expense (benefit)		(9	)		(7,050	)		110			(8,434	)
Stock compensation		1,139			1,762			3,471			5,687
Goodwill impairment		-			1,066,564			-			1,066,564
Inventory step-up amortization ⁽¹⁾		-			-			-			3,241
Restructuring expense		718			996			2,774			996
Change in fair value of warrant liability ⁽²⁾		(409	)		(7,400	)		(2,589	)		(28,000	)
Change in fair value of earnout share liabilities ⁽²⁾		(613	)		(18,080	)		(6,558	)		(59,980	)
Change in fair value of TRA ⁽²⁾		392			-			442			(200	)
Integration, non-recurring, non-operating, cash, and non-cash costs ⁽³⁾		203			492			1,315			3,443
Adjusted EBITDA	$	3,094		$	7,055		$	12,015		$	21,900

« Previous Page 1 | 2 | 3 | 4 Next Page »