Business Wire | Nov 15, 2021 04:06PM EST

Desktop Metal Announces Third Quarter 2021 Financial Results

Nov. 15, 2021

BOSTON--(BUSINESS WIRE)--Nov. 15, 2021--Desktop Metal, Inc. (NYSE: DM) today announced its financial results for the third quarter ended September 30, 2021.

"During the third quarter, we delivered solid financial performance underscored by sequential top-line growth of 34% and more than a 180 basis point sequential increase in our gross margins as we continue to gain scale," said Ric Fulop, Founder and CEO of Desktop Metal. "Our core metals business was a key driver of this success, which demonstrates the market enthusiasm for our AM 2.0 technology. With the addition of ExOne, and the Production System P-50 progressing toward initial shipments, we are extremely well-positioned as we head into our second year as a public company to deliver on our long-term commitments to shareholders."

Third Quarter 2021 and Recent Business Highlights:

* Production System(tm) P-50 targeted for shipment in the fourth quarter of 2021, with final component procurement and assembly of initial builds underway * Tripled manufacturing capacity dedicated to the P-50 to accelerate production ramp and meet early demand * Closed ExOne acquisition, cementing leadership in additive manufacturing for mass production * Acquired Meta Additive, adding next-generation functional binder technology focused on reducing part shrinkage during sintering * Acquired Aidro, adding AM design expertise and volume production capabilities for manifolds, hydraulics, and fluid power systems * Launched a new initiative under Desktop Health to develop a dental and biofabrication parts platform with additive manufacturing at its core, including completing initial acquisitions towards this strategy

Third Quarter 2021 Financial Highlights:

* Revenue of $25.4 million, up 34% sequentially from the second quarter of 2021, and up 907% year-over-year from the third quarter of 2020, including strength in core metals business and contributions from recent acquisitions * GAAP gross margin of 16%; non-GAAP gross margin of 27%, increasing more than 180 basis points sequentially from 25% in the second quarter of 2021 * Net loss of $66.9 million, including $15.2 million of in-process research and development assets related to acquisitions * Adjusted EBITDA of $(26.0) million * Strong liquidity position with cash, cash equivalents, and short-term investments of $423.9 million as of September 30, 2021

Outlook for Full Year 2021:

* Revising expectation to between $92 and $102 million of revenue for 2021, excluding the effects of acquiring ExOne, representing between 459% to 519% year-over-year growth from 2020 * Revising expectation to between $(80) and $(90) million of adjusted EBITDA for 2021, excluding the effects of acquiring ExOne

Conference Call Information:

Desktop Metal will host a conference call on Monday, November 15, 2021 at 4:30 p.m. EST to discuss third quarter 2021 results. Participants may access the call at 1-844-826-3033, international callers may use 1-412-317-5185, 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 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, named to MIT Technology Review's list of 50 Smartest Companies, and the 2021 winner of Fast Company's Innovation by Design Award in materials.

For more information, visit www.desktopmetal.com.

Forward-looking Statements:

This press release contains certain forward-looking statements within the meaning of the federal securities laws. 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 risks associated with the acquisition and integration of the business and operations of ExOne and other acquired businesses, and risks associated with supply and logistics, 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-Q filed with the SEC on November 15, 2021, 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)



September 30, December 31,

2021 2020

Assets

Current assets:

Cash and cash equivalents $ 131,676 $ 483,525

Short?term investments 292,272 111,867

Accounts receivable 22,878 6,516

Inventory 32,730 9,708

Prepaid expenses and other current assets 7,250 976

Total current assets 486,806 612,592

Restricted cash 676 612

Property and equipment, net 23,782 12,160

Capitalized software, net 179 312

Goodwill 262,343 2,252

Intangible assets, net 180,129 9,102

Other noncurrent assets 17,679 4,879

Total Assets $ 971,594 $ 641,909

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $ 16,985 $ 7,591

Customer deposits 2,876 1,480

Current portion of lease liability 2,677 868

Accrued expenses and other current liabilities 20,686 7,565

Deferred revenue 5,530 3,004

Current portion of long?term debt, net of 1,030 9,991 deferred financing costs

Total current liabilities 49,784 30,499

Long-term debt, net of current portion 680 -

Warrant liability - 93,328

Contingent consideration, net of current portion 4,528 -

Lease liability, net of current portion 7,802 2,157

Deferred tax liability 7,881 -

Other noncurrent liabilities 1,417 -

Total liabilities 72,092 125,984

Commitments and Contingencies (Note 16)

Stockholders' Equity

Preferred Stock, $0.0001 par value-authorized,50,000,000 shares; no shares issued and - - outstanding at September 30, 2021 and December31, 2020, respectively

Common Stock, $0.0001 par value-500,000,000shares authorized; 261,914,672 and 226,756,733shares issued at September 30, 2021 and December 26 23 31, 2020, respectively, 261,567,100 and224,626,597 shares outstanding at September 30,2021 and December 31, 2020, respectively

Additional paid?in capital 1,398,039 844,188

Accumulated deficit (497,444 ) (328,277 )

Accumulated other comprehensive income (loss) (1,119 ) (9 )

Total Stockholders' Equity 899,502 515,925

Total Liabilities and Stockholders' Equity $ 971,594 $ 641,909

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2021

2020

2021

2020

Revenues

Products

$

23,949

$

1,888

$

51,820

$

6,113

Services

1,489

639

3,908

1,988

Total revenues

25,438

2,527

55,728

8,101

Cost of sales

Products

20,450

3,732

46,427

18,145

Services

1,033

1,096

3,561

3,365

Total cost of sales

21,483

4,828

49,988

21,510

Gross profit/(loss)

3,955

(2,301

)

5,740

(13,409

)

Operating expenses

Research and development

19,311

9,195

45,820

31,362

Sales and marketing

13,224

2,542

29,567

9,994

General and administrative

19,833

5,415

46,821

11,004

In-process research and development assets acquired

15,181

-

25,581

-

Total operating expenses

67,549

17,152

147,789

52,360

Loss from operations

(63,594

)

(19,453

)

(142,049

)

(65,769

)

Change in fair value of warrant liability

-

-

(56,576

)

-

Interest expense

(12

)

(98

)

(137

)

(253

)

Interest and other (expense) income, net

(3,796

)

94

(3,166

)

995

Loss before income taxes

(67,402

)

(19,457

)

(201,928

)

(65,027

)

Income tax benefit

523

-

32,761

-

Net loss

$

(66,879

)

$

(19,457

)

$

(169,167

)

$

(65,027

)

Net loss per share-basic and diluted

$

(0.26

)

$

(0.12

)

$

(0.67

)

$

(0.41

)

Weighted average shares outstanding, basic and diluted

260,555,655

159,968,300

251,467,644

158,120,826

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)



Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Revenues

Products $ 23,949 $ 1,888 $ 51,820 $ 6,113

Services 1,489 639 3,908 1,988

Total revenues 25,438 2,527 55,728 8,101

Cost of sales

Products 20,450 3,732 46,427 18,145

Services 1,033 1,096 3,561 3,365

Total cost of 21,483 4,828 49,988 21,510 sales

Gross profit/ 3,955 (2,301 ) 5,740 (13,409 )(loss)

Operating expenses

Research and 19,311 9,195 45,820 31,362 development

Sales and 13,224 2,542 29,567 9,994 marketing

General and 19,833 5,415 46,821 11,004 administrative

In-processresearch anddevelopment 15,181 - 25,581 - assetsacquired

Totaloperating 67,549 17,152 147,789 52,360 expenses

Loss from (63,594 ) (19,453 ) (142,049 ) (65,769 )operations

Change in fairvalue of - - (56,576 ) - warrantliability

Interest (12 ) (98 ) (137 ) (253 )expense

Interest andother (3,796 ) 94 (3,166 ) 995 (expense)income, net

Loss before (67,402 ) (19,457 ) (201,928 ) (65,027 )income taxes

Income tax 523 - 32,761 - benefit

Net loss $ (66,879 ) $ (19,457 ) $ (169,167 ) $ (65,027 )

Net loss pershare-basic $ (0.26 ) $ (0.12 ) $ (0.67 ) $ (0.41 )and diluted

Weightedaverage sharesoutstanding, 260,555,655 159,968,300 251,467,644 158,120,826 basic anddiluted

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(in thousands)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2021

2020

2021

2020

Net loss

(66,879

)

(19,457

)

$

(169,167

)

$

(65,027

)

Other comprehensive (loss) income, net of taxes:

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

(7

)

(43

)

(11

)

(70

)

Foreign currency translation adjustment

(1,216

)

-

(1,099

)

-

Total comprehensive loss, net of taxes of $0

(68,102

)

(19,500

)

$

(170,277

)

$

(65,097

)

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(in thousands)



Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Net loss (66,879 ) (19,457 ) $ (169,167 ) $ (65,027 )

Other comprehensive(loss) income, net of taxes:

Unrealized gain(loss) onavailable-for-sale (7 ) (43 ) (11 ) (70 ) marketablesecurities, net

Foreign currencytranslation (1,216 ) - (1,099 ) - adjustment

Total comprehensive loss, net of taxes (68,102 ) (19,500 ) $ (170,277 ) $ (65,097 )of $0

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(UNAUDITED)

(in thousands, except share amounts)

Three Months Ended September 30, 2021

Accumulated

Other

Common Stock

Additional

Comprehensive

Total

Voting

Paid?in

Accumulated

(Loss)

Stockholders'

Shares

Amount

Capital

Deficit

Income

Equity

BALANCE-July 1, 2021

259,545,731

$

26

$

1,387,779

$

(430,565

)

$

104

$

957,344

Exercise of Common Stock options

1,615,484

-

1,576

-

-

1,576

Vesting of restricted Common Stock

295,599

-

-

-

-

-

Vesting of restricted stock units

259,735

-

-

-

-

-

Net share settlement related to employee tax withholdings upon vesting of restricted stock units

(40,299

)

-

(309

)

-

-

(309

)

Issuance of Common Stock for acquisitions

-

-

-

-

-

-

Issuance of common stock for acquired in-process research and development

-

-

-

-

-

-

Net share settlement related to employee tax withholdings upon vesting of restricted stock awards

(109,150

)

-

(958

)

-

-

(958

)

Stock?based compensation expense

-

-

9,951

-

-

9,951

Net loss

-

-

-

(66,879

)

-

(66,879

)

Other comprehensive income (loss)

-

-

-

-

(1,223

)

(1,223

)

BALANCE-September 30, 2021

261,567,100

$

26

$

1,398,039

$

(497,444

)

$

(1,119

)

$

899,502

Nine Months Ended September 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

4,462,218

-

5,241

-

-

5,241

Vesting of restricted Common Stock

407,629

-

-

-

-

-

Vesting of restricted stock units

303,656

-

-

-

-

-

Net settlement of shares related to employee tax withholdings upon vesting of restricted stock units

(49,471

)

-

(454

)

-

-

(454

)

Issuance of Common Stock for acquisitions

9,049,338

1

208,988

-

-

208,989

Issuance of common stock for acquired in-process research and development

334,370

-

4,300

-

-

4,300

Net share settlement related to employee tax withholdings upon vesting of restricted stock awards

(109,150

)

-

(958

)

(958

)

Stock?based compensation expense

-

-

16,167

-

-

16,167

Vesting of Trine Founder shares

1,850,938

-

-

-

-

-

Exercise of warrants

20,690,975

2

320,567

-

-

320,569

Net loss

-

-

-

(169,167

)

-

(169,167

)

Other comprehensive income (loss)

-

-

-

-

(1,110

)

(1,110

)

BALANCE-September 30, 2021

261,567,100

$

26

$

1,398,039

$

(497,444

)

$

(1,119

)

$

899,502

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(UNAUDITED)

(in thousands, except share amounts)



Three Months Ended September 30, 2021

Accumulated

Other

Common Stock Additional Comprehensive Total

Voting Paid?in Accumulated (Loss) Stockholders'

Shares Amount Capital Deficit Income Equity

BALANCE-July 1, 259,545,731 $ 26 $ 1,387,779 $ (430,565 ) $ 104 $ 957,344 2021

Exercise ofCommon Stock 1,615,484 - 1,576 - - 1,576 options

Vesting ofrestricted Common 295,599 - - - - - Stock

Vesting ofrestricted stock 259,735 - - - - - units

Net sharesettlementrelated toemployee tax (40,299 ) - (309 ) - - (309 )withholdings uponvesting ofrestricted stockunits

Issuance ofCommon Stock for - - - - - - acquisitions

Issuance ofcommon stock foracquired - - - - - - in-processresearch anddevelopment

Net sharesettlementrelated toemployee tax (109,150 ) - (958 ) - - (958 )withholdings uponvesting ofrestricted stockawards

Stock?basedcompensation - - 9,951 - - 9,951 expense

Net loss - - - (66,879 ) - (66,879 )

Othercomprehensive - - - - (1,223 ) (1,223 )income (loss)

BALANCE-September 261,567,100 $ 26 $ 1,398,039 $ (497,444 ) $ (1,119 ) $ 899,502 30, 2021





Nine Months Ended September 30, 2021

Accumulated

Other

Common Stock Additional Comprehensive Total

Voting Paid?in Accumulated (Loss) Stockholders'

Shares Amount Capital Deficit Income Equity

BALANCE-January 224,626,597 $ 23 $ 844,188 $ (328,277 ) $ (9 ) $ 515,925 1, 2021

Exercise ofCommon Stock 4,462,218 - 5,241 - - 5,241 options

Vesting ofrestricted Common 407,629 - - - - - Stock

Vesting ofrestricted stock 303,656 - - - - - units

Net settlement ofshares related toemployee taxwithholdings upon (49,471 ) - (454 ) - - (454 )vesting ofrestricted stockunits

Issuance ofCommon Stock for 9,049,338 1 208,988 - - 208,989 acquisitions

Issuance ofcommon stock foracquired 334,370 - 4,300 - - 4,300 in-processresearch anddevelopment

Net sharesettlementrelated toemployee tax (109,150 ) - (958 ) (958 )withholdings uponvesting ofrestricted stockawards

Stock?basedcompensation - - 16,167 - - 16,167 expense

Vesting of Trine 1,850,938 - - - - - Founder shares

Exercise of 20,690,975 2 320,567 - - 320,569 warrants

Net loss - - - (169,167 ) - (169,167 )

Othercomprehensive - - - - (1,110 ) (1,110 )income (loss)

BALANCE-September 261,567,100 $ 26 $ 1,398,039 $ (497,444 ) $ (1,119 ) $ 899,502 30, 2021

Three Months Ended September 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-July 1, 2020

100,038,109

$

436,533

29,937,631

$

3

$

21,254

$

(339,832

)

$

48

$

(318,527

)

Retroactive application of recapitalization (Note 1)

(100,038,109

)

(436,533

)

128,792,027

13

434,672

-

-

434,685

Adjusted balance, beginning of period

-

-

158,729,658

16

455,926

(339,832

)

48

116,158

Exercise of Common Stock options

-

-

184,447

-

131

-

-

131

Vesting of restricted Common Stock

-

-

1,751,364

-

2

-

-

2

Stock?based compensation expense

-

-

-

-

1,895

-

-

1,895

Common Stock warrants issued

-

-

-

-

-

-

-

-

Net loss

-

-

-

-

-

(19,457

)

-

(19,457

)

Other comprehensive income (loss)

-

-

-

-

-

-

(43

)

(43

)

BALANCE-September 30, 2020

-

$

-

160,665,469

$

16

$

457,954

$

(359,289

)

$

5

$

98,686

Nine Months Ended September 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

-

-

499,256

-

267

-

-

267

Vesting of restricted Common Stock

-

-

5,252,279

-

6

-

-

6

Stock?based compensation expense

-

-

-

-

4,228

-

-

4,228

Common Stock warrants issued

-

-

-

-

211

-

-

211

Net loss

-

-

-

-

-

(65,027

)

-

(65,027

)

Other comprehensive income (loss)

-

-

-

-

-

-

(70

)

(70

)

BALANCE-September 30, 2020

-

$

-

160,665,469

$

16

$

457,954

$

(359,289

)

$

5

$

98,686



Three Months Ended September 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-July 1, 100,038,109 $ 436,533 29,937,631 $ 3 $ 21,254 $ (339,832 ) $ 48 $ (318,527 )2020

Retroactiveapplication of (100,038,109 ) (436,533 ) 128,792,027 13 434,672 - - 434,685 recapitalization(Note 1)

Adjusted balance,beginning of - - 158,729,658 16 455,926 (339,832 ) 48 116,158 period

Exercise ofCommon Stock - - 184,447 - 131 - - 131 options

Vesting ofrestricted Common - - 1,751,364 - 2 - - 2 Stock

Stock?basedcompensation - - - - 1,895 - - 1,895 expense

Common Stock - - - - - - - - warrants issued

Net loss - - - - - (19,457 ) - (19,457 )

Othercomprehensive - - - - - - (43 ) (43 )income (loss)

BALANCE-September - $ - 160,665,469 $ 16 $ 457,954 $ (359,289 ) $ 5 $ 98,686 30, 2020





Nine Months Ended September 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 100,038,109 $ 436,533 26,813,113 $ 3 $ 16,722 $ (294,262 ) $ 75 $ (277,462 )1, 2020

Retroactiveapplication of (100,038,109 ) (436,533 ) 128,100,821 13 436,520 - - 436,533 recapitalization(Note 1)

Adjusted balance,beginning of - - 154,913,934 16 453,242 (294,262 ) 75 159,071 period

Exercise ofCommon Stock - - 499,256 - 267 - - 267 options

Vesting ofrestricted Common - - 5,252,279 - 6 - - 6 Stock

Stock?basedcompensation - - - - 4,228 - - 4,228 expense

Common Stock - - - - 211 - - 211 warrants issued

Net loss - - - - - (65,027 ) - (65,027 )

Othercomprehensive - - - - - - (70 ) (70 )income (loss)

BALANCE-September - $ - 160,665,469 $ 16 $ 457,954 $ (359,289 ) $ 5 $ 98,686 30, 2020

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

Nine Months Ended September 30,

2021

2020

Cash flows from operating activities:

Net loss

$

(169,167

)

$

(65,027

)

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

Depreciation and amortization

15,576

6,525

Stock?based compensation

16,167

4,228

Change in fair value of warrant liability

56,576

-

Change in fair value of subscription agreement liability

2,920

-

Expense related to Common Stock warrants issued

-

43

Amortization (accretion) of discount on investments

2,189

34

Amortization of debt financing cost

9

14

Provision for bad debt

316

333

Acquired in-process research and development

25,581

-

(Gain) loss on disposal of property and equipment

19

10

Net increase in accrued interest related to marketable securities

(414

)

162

Net unrealized loss on equity investment

1,880

-

Net unrealized gain on other investments

(639

)

-

Deferred tax benefit

(32,761

)

-

Change in fair value of contingent consideration

(166

)

-

Changes in operating assets and liabilities:

Accounts receivable

(8,476

)

2,881

Inventory

(11,067

)

(1,958

)

Prepaid expenses and other current assets

(3,096

)

1,082

Other assets

(118

)

-

Accounts payable

4,243

(5,800

)

Accrued expenses and other current liabilities

(9,294

)

430

Customer deposits

(1,298

)

(547

)

Deferred revenue

1,295

(1,094

)

Change in right of use assets and lease liabilities, net

(340

)

(243

)

Other liabilities

6

-

Net cash used in operating activities

(110,059

)

(58,927

)

Cash flows from investing activities:

Purchases of property and equipment

(4,145

)

(1,039

)

Purchase of other investments

(3,620

)

-

Purchase of equity investment

(20,000

)

-

Purchase of marketable securities

(330,873

)

(62,810

)

Proceeds from sales and maturities of marketable securities

163,882

94,116

Cash paid to acquire in-process research and development

(21,220

)

-

Cash paid for acquisitions, net of cash acquired

(191,146

)

-

Net cash (used in) provided by investing activities

(407,122

)

30,267

Cash flows from financing activities:

Proceeds from the exercise of stock options

5,241

255

Proceeds from the exercise of stock warrants

170,665

-

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

(454

)

-

Proceeds from PPP loan

-

5,379

Repayment of PPP loan

-

(5,379

)

Repayment of term loan

(10,000

)

-

Deferred financing costs paid

-

(400

)

Net cash provided by (used in) financing activities

165,452

(145

)

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

(351,729

)

(28,805

)

Effect of exchange rate changes

(56

)

-

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

131,676

37,356

Restricted cash at end of period

676

612

Total cash, cash equivalents and restricted cash, end of period

$

132,352

$

37,968

Supplemental cash flow information:

Interest paid

$

137

$

253

Taxes paid

$

150

$

-

Non?cash investing and financing activities:

Net unrealized loss on investments

$

11

$

-

Exercise of private placement warrants

$

149,904

$

-

Common Stock issued for acquisitions

$

208,989

$

-

Common Stock issued for acquisition of in-process research and development

$

4,300

$

-

Cash held back in acquisitions

$

50

$

-

Additions to right of use assets and lease liabilities

$

891

$

-

Purchase of property and equipment included in accounts payable

$

77

$

-

Purchase of property and equipment included in accrued expense

$

33

$

79

Contingent consideration in connection with acquisitions

$

6,083

$

-

Taxes related to net share settlement upon vesting of restricted stock awards in accrued expense

$

958

$

-

Forgiveness of PPP Loan

$

3,376

$

-

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.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)



Nine Months Ended September 30,

2021 2020

Cash flows from operating activities:

Net loss $ (169,167 ) $ (65,027 )

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

Depreciation and amortization 15,576 6,525

Stock?based compensation 16,167 4,228

Change in fair value of warrant liability 56,576 -

Change in fair value of subscription agreement 2,920 - liability

Expense related to Common Stock warrants issued - 43

Amortization (accretion) of discount on 2,189 34 investments

Amortization of debt financing cost 9 14

Provision for bad debt 316 333

Acquired in-process research and development 25,581 -

(Gain) loss on disposal of property and equipment 19 10

Net increase in accrued interest related to (414 ) 162 marketable securities

Net unrealized loss on equity investment 1,880 -

Net unrealized gain on other investments (639 ) -

Deferred tax benefit (32,761 ) -

Change in fair value of contingent consideration (166 ) -

Changes in operating assets and liabilities:

Accounts receivable (8,476 ) 2,881

Inventory (11,067 ) (1,958 )

Prepaid expenses and other current assets (3,096 ) 1,082

Other assets (118 ) -

Accounts payable 4,243 (5,800 )

Accrued expenses and other current liabilities (9,294 ) 430

Customer deposits (1,298 ) (547 )

Deferred revenue 1,295 (1,094 )

Change in right of use assets and lease (340 ) (243 )liabilities, net

Other liabilities 6 -

Net cash used in operating activities (110,059 ) (58,927 )

Cash flows from investing activities:

Purchases of property and equipment (4,145 ) (1,039 )

Purchase of other investments (3,620 ) -

Purchase of equity investment (20,000 ) -

Purchase of marketable securities (330,873 ) (62,810 )

Proceeds from sales and maturities of marketable 163,882 94,116 securities

Cash paid to acquire in-process research and (21,220 ) - development

Cash paid for acquisitions, net of cash acquired (191,146 ) -

Net cash (used in) provided by investing (407,122 ) 30,267 activities

Cash flows from financing activities:

Proceeds from the exercise of stock options 5,241 255

Proceeds from the exercise of stock warrants 170,665 -

Payment of taxes related to net share settlement (454 ) - upon vesting of restricted stock units

Proceeds from PPP loan - 5,379

Repayment of PPP loan - (5,379 )

Repayment of term loan (10,000 ) -

Deferred financing costs paid - (400 )

Net cash provided by (used in) financing 165,452 (145 )activities

Net (decrease) increase in cash, cash equivalents, (351,729 ) (28,805 )and restricted cash

Effect of exchange rate changes (56 ) -

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 131,676 37,356

Restricted cash at end of period 676 612

Total cash, cash equivalents and restricted cash, $ 132,352 $ 37,968 end of period



Supplemental cash flow information:

Interest paid $ 137 $ 253

Taxes paid $ 150 $ -



Non?cash investing and financing activities:

Net unrealized loss on investments $ 11 $ -

Exercise of private placement warrants $ 149,904 $ -

Common Stock issued for acquisitions $ 208,989 $ -

Common Stock issued for acquisition of in-process $ 4,300 $ - research and development

Cash held back in acquisitions $ 50 $ -

Additions to right of use assets and lease $ 891 $ - liabilities

Purchase of property and equipment included in $ 77 $ - accounts payable

Purchase of property and equipment included in $ 33 $ 79 accrued expense

Contingent consideration in connection with $ 6,083 $ - acquisitions

Taxes related to net share settlement upon vesting $ 958 $ - of restricted stock awards in accrued expense

Forgiveness of PPP Loan $ 3,376 $ -

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 For the Nine Months Ended Ended

September 30, September 30,

(Dollars in thousands) 2021 2020 2021 2020

GAAP gross margin $ 3,955 $ (2,301 ) $ 5,740 $ (13,409 )

Stock-basedcompensation included 341 68 587 220 in cost of sales

Amortization ofacquired intangible 2,515 - 5,841 - assets included incost of sales

Non-GAAP gross margin $ 6,811 $ (2,233 ) $ 12,168 $ (13,189 )



GAAP operating loss $ (63,594 ) $ (19,453 ) $ (142,049 ) $ (65,769 )

Stock-based 9,951 1,894 16,167 4,227 compensation

Amortization ofacquired intangible 2,515 - 5,841 - assets included incost of sales

Amortization ofacquired intangible 2,089 160 5,330 484 assets included inoperating expenses

Acquisition-relatedand othertransactional charges 5,675 - 13,786 - included in generaland administrativeexpenses

In-process researchand development assets 15,181 - 25,581 - acquired

Non-GAAP operating $ (28,183 ) $ (17,399 ) $ (75,344 ) $ (61,058 )loss



GAAP net loss $ (66,879 ) $ (19,457 ) $ (169,167 ) $ (65,027 )

Stock-based 9,951 1,894 16,167 4,227 compensation

Amortization ofacquired intangible 2,515 - 5,841 - assets included incost of sales

Amortization ofacquired intangible 2,089 160 5,330 484 assets included inoperating expenses

Acquisition-relatedand othertransactional charges 5,675 - 13,786 - included in generaland administrativeexpenses

In-process researchand development assets 15,181 - 25,581 - acquired

Change in fair value 4,204 - 4,186 - of investments

Change in fair value - - 56,576 - of warrant liability

Non-GAAP net loss $ (27,264 ) $ (17,403 ) $ (41,700 ) $ (60,316 )

DESKTOP METAL, INC.

ADJUSTED EBITDA RECONCILIATION TABLE

(in thousands)

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

(Dollars in thousands)

2021

2020

2021

2020

Net loss attributable to common stockholders

$

(66,879

)

$

(19,457

)

$

(169,167

)

$

(65,027

)

Interest (income) expense, net

(104

)

12

(286

)

(651

)

Income tax benefit

(523

)

-

(32,761

)

-

Depreciation and amortization

6,488

2,050

15,576

6,525

In-process research and development assets acquired

15,181

-

25,581

-

EBITDA

(45,837

)

(17,395

)

(161,057

)

(59,153

)

Change in fair value of warrant liability

-

-

56,576

-

Change in fair value of investments

4,204

-

4,186

-

Stock compensation expense

9,951

1,895

16,167

4,228

Warrant expense

-

-

-

211

Transaction costs associated with acquisitions

5,675

-

13,786

-

Adjusted EBITDA

$

(26,007

)

$

(15,500

)

$

(70,342

)

$

(54,714

)

View source version on businesswire.com: https://www.businesswire.com/news/home/20211115006239/en/

CONTACT: Investor Relations: Jay Gentzkow (781) 730-2110 jaygentzkow@desktopmetal.com Press Contact: Lynda McKinney (978) 224-1282 lyndamckinney@desktopmetal.com