DM
Desktop Metal, INC
NYSE
10-K: Desktop Metal 2023 Annual Report: Focus on Additive Manufacturing 2.0 and Cost Optimization
Sentiment:
Annual Results
15 March 2024 4:12 PM
Desktop Metal's 2023 annual report highlights a shift towards Additive Manufacturing 2.0, cost optimization efforts, and a strategic review of its industrial photopolymer business.
Worse than expected
The company experienced a net loss of $323.3 million in 2023, which is worse than the previous year.
The company's revenue decreased by 9% in 2023 compared to 2022.
The company's gross profit decreased by $25.2 million in 2023 compared to 2022.
Capital raise
The company may need to further increase its capital resources by issuing additional shares of its capital stock or offering debt or other equity securities.
The company may not be able to obtain additional financing on terms favorable to it, if at all.
Summary
- Desktop Metal's 2023 annual report details a focus on Additive Manufacturing 2.0, aiming for volume production of end-use parts.
- The company's strategy includes research and development, a global distribution network, and direct parts manufacturing.
- The global additive manufacturing market is projected to grow from $18 billion in 2022 to $100 billion by 2032, with a compound annual growth rate of approximately 20%.
- Desktop Metal is shifting from delivering accessible technology to ensuring successful use of its systems for higher throughput production.
- The company is partnering with customers to use its AM 2.0 solutions for specific production applications and goals.
- Desktop Metal is developing programs like AM2.Production and ScanUp to help customers transition to additive manufacturing.
- The company is refining its sales network to a blend of direct and channel partners.
- Desktop Metal is focusing on the highest and nearest term revenue recognition opportunities.
- The company is promoting awareness through focused marketing, training, and education programs.
- Desktop Metal offers a comprehensive portfolio of integrated additive manufacturing solutions, including metal, photopolymer, digital casting, and biofabrication systems.
- The company sells consumable materials, including binders, resins, and metal powders, for use with its systems.
- Desktop Metal's Live Suite software integrates and coordinates 3D printers, accessories, and processes.
- The company is developing Desktop Labs, an end-to-end platform for dental and biofabrication solutions.
- Desktop Metal's customers range from small and medium-sized enterprises to Fortune 500 companies.
- The company has over 950 employees as of December 31, 2023.
- The company is subject to various laws and regulations, including environmental, health and safety, anti-corruption, export controls, and FDA regulations.
- The company is exploring strategic alternatives for its industrial photopolymer business, which may include divestitures, curtailment of investment or winding down of the business.
Sentiment
Score: 4
Explanation: The document presents a mixed picture. While the company is making strategic moves to position itself for future growth, the current financial results are concerning, with significant losses and declining revenue. The cost optimization efforts and strategic review of the photopolymer business suggest a proactive approach to addressing challenges, but the overall sentiment is cautious due to the financial performance.
Positives
- Desktop Metal is well-positioned to capitalize on the growing additive manufacturing market.
- The company has a comprehensive portfolio of integrated additive manufacturing solutions.
- Desktop Metal is investing in research and development to advance its technology.
- The company has a global distribution network and a direct sales force.
- Desktop Metal is developing programs to support customer adoption of its technologies.
- The company is focused on cost optimization and efficiency improvements.
- The company has a strong intellectual property portfolio with over 1,000 patents and pending applications.
Negatives
- The company experienced a net loss of $323.3 million in 2023.
- The company has a history of losses and may not achieve or maintain profitability in the future.
- The company is subject to price competition and may need to reduce prices.
- The company is dependent on a limited number of third-party contract manufacturers.
- The company has identified material weaknesses in its internal control over financial reporting.
- The company is subject to various risks and uncertainties, including those related to the COVID-19 pandemic, global economic conditions, and competition.
Risks
- The company may experience delays in the design, production, and launch of its products.
- Demand for the company's products may not grow as expected.
- The company may not be able to achieve its cost savings targets.
- The company may face difficulties in integrating acquired businesses.
- The company may be subject to product liability claims.
- The company may be unable to attract and retain key employees.
- The company's global operations are subject to various risks and uncertainties.
- The company's information technology systems are vulnerable to cyberattacks.
- The company may require additional capital to support its growth.
- The company is subject to various laws and regulations, including environmental, health and safety, anti-corruption, export controls, and FDA regulations.
- The company may face increasing competition in the additive manufacturing market.
- The company's stock price may be volatile or may decline regardless of its operating performance.
- The company's indebtedness could limit its cash flow and expose it to risks.
- The company may fail to meet its publicly announced guidance or other expectations about its business.
Future Outlook
The company expects to continue to incur operating losses and negative cash flow in the near-term as it continues to invest in its business. The company anticipates at least $50 million of aggregate cost savings resulting in sequential cost reductions across the first half of 2024 as a result of the 2024 Initiative.
Management Comments
- The company is focused on partnering with customers to use its AM 2.0 solutions for specific production applications and goals.
- The company is developing programs to assist mainstream manufacturers in transitioning to AM 2.0 systems.
- The company is refining its sales network to a smart blend of direct and channel partners.
- The company is focusing its go-to-market attention on the highest and nearest term revenue recognition opportunities.
Industry Context
This announcement reflects the broader trend of companies in the additive manufacturing industry focusing on end-use part production and cost optimization. The company is positioning itself to capitalize on the projected growth of the additive manufacturing market by expanding its product portfolio and distribution network.
Comparison to Industry Standards
- Desktop Metal's focus on Additive Manufacturing 2.0 aligns with the industry's shift towards volume production of end-use parts, similar to companies like HP and Stratasys.
- The company's efforts to develop programs like AM2.Production and ScanUp are comparable to other companies' initiatives to facilitate customer adoption of additive manufacturing technologies.
- Desktop Metal's global distribution network is similar to those of other major players in the industry, such as 3D Systems and EOS.
- The company's investment in research and development is consistent with the industry's focus on innovation and technological advancement.
- The company's cost optimization efforts are in line with the industry's need to improve profitability and competitiveness.
Stakeholder Impact
- Shareholders may be concerned about the company's financial performance and the potential for further losses.
- Employees may be affected by the company's workforce reductions and cost optimization efforts.
- Customers may benefit from the company's focus on Additive Manufacturing 2.0 and its efforts to improve its products and services.
- Suppliers may be affected by the company's cost optimization efforts and its review of its supply chain.
Next Steps
- The company will continue to implement measures to remedy its internal control deficiencies.
- The company will continue to evaluate its facility footprint to identify and assess operational savings and efficiencies.
- The company will continue to work with Schaeffler on developing the technology for binder jet 3D printing.
- The company will continue to explore strategic alternatives for its industrial photopolymer business.
Legal Proceedings
- The company is involved in several legal proceedings, including a class action lawsuit and derivative complaints.
- The company believes that these complaints are all without merit and intends to defend against them vigorously.
Related Party Transactions
- The company has entered into certain agreements with entities affiliated with a former director and executive officer.
- The company sells products to Lightforce Orthodontics and Bloom Energy, which are affiliated with members of the company's Board of Directors.
Key Dates
- September 2018: Trine was incorporated as a blank check company.
- 2015: Legacy Desktop Metal was incorporated.
- December 9, 2020: The Business Combination was consummated and Trine was renamed Desktop Metal, Inc.
- May 25, 2023: Desktop Metal entered into a merger agreement with Stratasys.
- September 28, 2023: Stratasys shareholders did not approve the merger agreement, leading to its termination.
- September 29, 2023: Desktop Metal completed the sale of Aerosint SA to Schaeffler AG.
- January 22, 2024: Desktop Metal committed to a strategic integration and cost optimization initiative (the 2024 Initiative).
- March 14, 2024: Desktop Metal committed to a plan that includes a review of strategic alternatives for its industrial photopolymer business.
Keywords
additive manufacturing, 3D printing, metal printing, polymer printing, digital casting, biofabrication, manufacturing, AM 2.0, cost optimization, research and development, consumables, software, dental, healthcare, industrial
DM
Desktop Metal, INC
NYSE
Sector: TBD
Filings with Classifications
Worse than expected
26 March 2025 5:20 PM
8-K Filing
- Revenue decreased from $189.7 million to $148.8 million year-over-year.
Worse than expected
31 October 2024 7:00 AM
Quarterly Report
- The company's revenue decreased by 15% year-over-year.
- The company reported a net loss of $35.4 million for the quarter and $191.0 million for the first nine months.
- The company's gross margin, while improved, is still relatively low at 9%.
Capital raise
31 October 2024 7:00 AM
Quarterly Report
- The company may need to raise additional capital through arrangements with Nano or from other sources, including equity and debt financings.
- The company has a multi-draw term loan credit facility with Nano for up to $20 million, available after January 7, 2025.
- The company may need to issue additional shares of capital stock or offer debt or other equity securities if the merger is not completed.
Worse than expected
23 September 2024 4:24 PM
Proxy Statement
- The company warns of potential dilutive financings or bankruptcy if the merger fails.
- Desktop Metal expects to run out of cash by the end of the first quarter of 2025 if the merger is not approved.
Worse than expected
13 September 2024 4:02 PM
Proxy Statement
- The company expects to run out of cash by the end of the first quarter 2025 if the merger is not approved.
- The company may need to undertake financings that may be severely dilutive to stockholders if the merger is not approved.
- There is a risk of bankruptcy if the merger is not approved.
Capital raise
13 September 2024 4:02 PM
Proxy Statement
- The document mentions that if the merger is not approved, Desktop Metal may need to undertake financings.
- These financings may be severely dilutive to stockholders.
Worse than expected
6 September 2024 4:38 PM
Proxy Statement
- Desktop Metal expects to run out of cash by the end of the first quarter of 2025 if the merger is not approved.
Capital raise
15 August 2024 7:00 AM
Definitive Proxy Statement
- The merger agreement includes a provision for a multi-draw term loan credit facility (Bridge Loan Facility) from Nano to Desktop Metal, up to $20 million, to provide working capital and liquidity.
Worse than expected
31 July 2024 4:15 PM
Earnings Conference Call Transcript
- The company's Q2 2024 revenue was down compared to the previous year.
- The company's non-GAAP gross margins were down compared to the previous year.
- The company's adjusted EBITDA was negative.
Worse than expected
30 July 2024 4:53 PM
Quarterly Report
- The company's revenue decreased by 27% compared to the same quarter last year.
- The company's gross margin was -83%, indicating significant losses on sales.
- The company's net loss increased significantly compared to the same quarter last year.
Capital raise
30 July 2024 4:53 PM
Quarterly Report
- The company plans to raise additional capital through a combination of potential options, including equity and debt financings.
- Nano Dimension agreed to provide a multi-draw term loan credit facility in an aggregate principal amount not to exceed $20.0 million, subject to certain conditions.
Worse than expected
30 July 2024 4:36 PM
Quarterly Report
- Revenue decreased from $53.3 million to $38.9 million compared to the same quarter last year.
- The company reported a net loss of $(103.4) million.
Worse than expected
30 July 2024 4:35 PM
Quarterly Report
- The company's revenue decreased significantly year-over-year.
- The company reported a substantial net loss, primarily due to one-time non-cash charges.
- The company's GAAP gross margin was negative, indicating poor profitability.
Delay expected
3 July 2024 4:24 PM
Merger Announcement
- The transaction is expected to close at the end of the year, but based on delays, maybe a few months later.
Worse than expected
3 July 2024 4:24 PM
Merger Announcement
- The combined company expects negative cash flow for the next six to eight quarters.
Capital raise
3 July 2024 7:32 AM
Merger Announcement
- Nano Dimension has committed to providing Desktop Metal with a $20 million secured loan facility if the closing of the transaction extends into 2025.
- The purchase price may be adjusted based on the amount drawn from the loan facility prior to closing.
Worse than expected
3 July 2024 7:32 AM
Merger Announcement
- The final purchase price is subject to downward adjustments based on transaction expenses and potential draws on a loan facility, which could reduce the value of the deal for Desktop Metal shareholders.
Delay expected
3 July 2024 7:32 AM
Merger Announcement
- The closing of the transaction is expected in the fourth quarter of 2024, but is subject to customary closing conditions, including regulatory approvals, which could cause delays.
Capital raise
9 May 2024 6:02 AM
Quarterly Report
- The company entered into an Open Market Sale Agreement with Cantor Fitzgerald & Co. to sell shares of common stock for an aggregate offering price of up to $75.0 million.
- The company may need to further increase its capital resources by issuing additional shares of its capital stock or offering debt or other equity securities.
Worse than expected
9 May 2024 6:02 AM
Quarterly Report
- The company's revenue decreased by 2% year-over-year, indicating worse than expected sales performance.
- The company reported a gross loss of $2.2 million, indicating worse than expected profitability.
- The company's net loss of $52.1 million was significant, indicating worse than expected financial results.
Better than expected
9 May 2024 6:00 AM
Quarterly Report
- The company's adjusted EBITDA improved by 44% year-over-year, indicating better than expected cost management.
- Non-GAAP operating expenses decreased for nine consecutive quarters, showing better than expected cost control.
- Cash consumption decreased by 47% year-over-year, demonstrating better than expected cash management.
Worse than expected
23 April 2024 7:15 AM
Proxy Statement
- The company needs to implement a reverse stock split to regain compliance with the NYSE minimum bid price requirement, indicating that the share price has fallen below acceptable levels.
Capital raise
23 April 2024 7:15 AM
Proxy Statement
- The company may offer common and preferred stock, debt securities, warrants, and units of up to $250.0 million in the aggregate under a shelf registration statement.
- The company may sell shares of its Class A common stock having aggregate sales proceeds of up to $75.0 million pursuant to an at the market offering program.
- The company intends to raise capital through equity or debt financing to fund its current operations.
Capital raise
15 March 2024 4:12 PM
Annual Results
- The company may need to further increase its capital resources by issuing additional shares of its capital stock or offering debt or other equity securities.
- The company may not be able to obtain additional financing on terms favorable to it, if at all.
Worse than expected
15 March 2024 4:12 PM
Annual Results
- The company experienced a net loss of $323.3 million in 2023, which is worse than the previous year.
- The company's revenue decreased by 9% in 2023 compared to 2022.
- The company's gross profit decreased by $25.2 million in 2023 compared to 2022.
Better than expected
15 March 2024 7:00 AM
Quarterly Report
- The company's net loss significantly decreased year-over-year, indicating improved financial performance.
- Adjusted EBITDA showed a substantial improvement, reaching the company's strongest quarterly performance to date.
- Non-GAAP gross margins improved significantly year-over-year.
Worse than expected
24 January 2024 8:05 AM
Strategic Business Review
- The company is implementing a significant workforce reduction and restructuring plan, indicating that the current financial performance is worse than expected.
- The company is facing a downturn in the additive manufacturing industry and a softer demand environment, which are contributing to the need for these cost-cutting measures.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.