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

 


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