Desktop Metal Announces First Quarter 2022 Financial Results

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, non-GAAP operating expense, 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 and inventory step-up adjustments
  • 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 and inventory step-up adjustments
  • 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, inventory step-up adjustments, change in fair value of investments and change in fair value of warrant liability
  • We define Non-GAAP operating expense as GAAP operating expense excluding the effect of stock-based compensation, amortization of acquired intangible assets and acquisition-related and other transactional charges
  • 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, inventory step-up adjustments, change in fair value of warrant liability, change in fair value of investments and acquisition-related and other transactional charges

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, non-GAAP operating expense, 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, non-GAAP operating expense, 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, non-GAAP operating expense, 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

 

 

For the Three Months Ended

 

 

March 31,

(Dollars in thousands)

 

2022

 

2021

GAAP gross margin

 

$

(1,328)

 

$

(587)

Stock-based compensation included in cost of sales

 

 

487

 

 

117

Amortization of acquired intangible assets included in cost of sales

 

 

5,990

 

 

1,091

Acquisition-related and other transactional charges included in cost of sales

 

 

1,138

 

 

Inventory step-up adjustment in cost of sales

 

 

1,181

 

 

Non-GAAP gross margin

 

$

7,468

 

$

621

 

 

 

 

 

 

 

GAAP operating loss

 

$

(69,479)

 

$

(30,740)

Stock-based compensation

 

 

9,912

 

 

2,217

Amortization of acquired intangible assets

 

 

9,784

 

 

2,299

Inventory step-up adjustment in cost of sales

 

 

1,181

 

 

Acquisition-related and other transactional charges

 

 

3,986

 

 

4,984

Non-GAAP operating loss

 

$

(44,616)

 

$

(21,240)

 

 

 

 

 

 

 

GAAP net loss

 

$

(69,944)

 

$

(59,108)

Stock-based compensation

 

 

9,912

 

 

2,217

Amortization of acquired intangible assets

 

 

9,784

 

 

2,299

Inventory step-up adjustment in cost of sales

 

 

1,181

 

 

Acquisition-related and other transactional charges

 

 

3,986

 

 

4,984

Change in fair value of investments

 

 

1,700

 

 

Change in fair value of warrant liability

 

 

 

 

56,576

Non-GAAP net loss

 

$

(43,381)

 

$

6,968

DESKTOP METAL, INC.

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