DM
Desktop Metal, INC
NYSE
DEFA14A: Desktop Metal Announces Q2 2024 Results and Merger Agreement with Nano Dimension
Sentiment:
Quarterly Report
30 July 2024 4:36 PM
Desktop Metal reported a revenue decrease in Q2 2024 and announced a definitive merger agreement with Nano Dimension.
Worse than expected
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.
Summary
- Desktop Metal announced its Q2 2024 financial results, reporting revenue of $38.9 million, a decrease from $53.3 million in the same period last year.
- The company's Q2 net loss was $(103.4) million, impacted by one-time noncash charges related to accelerated amortization and depreciation.
- Adjusted EBITDA was $(13.2) million, an improvement from $(15) million in Q2 2023.
- GAAP operating expenses increased to $69.1 million due to accelerated amortization and depreciation from discontinued operations, while non-GAAP operating expenses were $27 million, a 22% year-over-year improvement.
- Services revenue increased 27% to $7.5 million.
- Desktop Metal announced a definitive merger agreement with Nano Dimension.
- The company has withdrawn its financial guidance for the remainder of the year due to the pending acquisition by Nano Dimension.
Sentiment
Score: 4
Explanation: The sentiment is mixed. While there are some positive aspects like improved Adjusted EBITDA and cost reductions, the significant revenue decrease and net loss weigh heavily on the overall sentiment. The merger announcement adds uncertainty but is presented as a positive strategic move.
Positives
- Adjusted EBITDA improved year-over-year, decreasing from $(15) million to $(13.2) million.
- Services revenue increased by 27% to $7.5 million.
- Non-GAAP operating expenses decreased 22% year-over-year to $27 million.
- The company continued execution of cost reduction plans.
- Desktop Metal launched the all-new PureSinter Furnace.
- Platinum is now customer-qualified on the DM Production System.
- The rate of operating cash consumption declined 40% compared to the same year-ago quarter.
Negatives
- 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.
- GAAP gross margin was (83)%, impacted by one-time noncash charges.
- GAAP operating expenses increased to $69.1 million.
Risks
- The company faces risks related to demand for its products and services.
- The global macro-economic environment poses a risk.
- Rapid technological change in the additive manufacturing industry could impact the company.
- The company's ability to realize the benefits from cost-saving measures is a risk.
- Supply and logistics disruptions, including shortages and delays, could impact the company.
- There are risks related to the completion of the proposed transaction with Nano Dimension.
Future Outlook
The company has withdrawn its financial guidance for the remainder of the year due to the pending acquisition by Nano Dimension. The proposed combination with Nano Dimension represents the best path forward for Desktop Metal and all of its stakeholders.
Management Comments
- Ric Fulop, Founder and CEO of Desktop Metal, stated that the company has worked tirelessly to align its cost structure with macroeconomic realities.
- Ric Fulop noted a concerning trend towards the end of the quarter with customers becoming hesitant to engage in closing deals due to the company's weakening financial outlook.
Industry Context
The announcement comes amid a challenging business environment with rising rates and slowing capex budgets, impacting the additive manufacturing industry. The merger with Nano Dimension is aimed at strengthening Desktop Metal's competitive position.
Comparison to Industry Standards
- It is difficult to compare Desktop Metal's results directly to industry standards without detailed competitor data.
- However, companies like 3D Systems and Stratasys are key competitors in the additive manufacturing space.
- These companies are also facing similar macroeconomic challenges, including supply chain disruptions and slowing capital expenditures.
- The merger with Nano Dimension could potentially create a stronger competitor in the long run.
Stakeholder Impact
- Shareholders face uncertainty due to the proposed merger and the company's financial performance.
- Employees may experience changes as a result of cost reduction plans and the merger.
- Customers may be affected by the company's financial stability and the potential changes resulting from the merger.
- Suppliers may be impacted by the company's cost reduction efforts and any changes in its business strategy.
Next Steps
- Desktop Metal intends to file a proxy statement with the SEC regarding the proposed transaction with Nano Dimension.
- The definitive proxy statement will be mailed to stockholders of Desktop Metal.
- Investors and security holders are urged to read the proxy statement and any other relevant documents that may be filed with the SEC.
Key Dates
- March 15, 2024: Date of Form 10-K filing with the SEC.
- March 21, 2024: Nano's Annual Report on Form 20-F was filed with the SEC.
- April 23, 2024: Desktop Metal's proxy statement for its 2024 Annual Meeting of Stockholders was filed with the SEC.
- June 30, 2024: End of the second quarter of 2024.
- July 30, 2024: Date of the press release announcing Q2 2024 financial results and merger agreement.
- July 31, 2024: Date of the conference call to discuss Q2 2024 results.
Keywords
Desktop Metal, Nano Dimension, merger, financial results, additive manufacturing, 3D printing, revenue, EBITDA, net loss
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.