Fathom Digital Manufacturing Reports Third Quarter 2022

Fathom Digital Manufacturing Reports Third Quarter 2022 Financial Results

Consolidated Statements of Comprehensive Income (Loss) ($ in thousands)
	Three Months Ended						Nine Months Ended
	September 30, 2022			September 30, 2021			September 30, 2022			September 30, 2021

Revenue	$	40,210		$	41,481		$	122,737		$	107,887
Cost of revenue		25,144			26,581			80,126			66,080
Gross profit		15,066			14,900			42,611			41,807
Operating expenses
Selling, general, and administrative		11,960			10,681			38,341			27,111
Depreciation and amortization		4,627			2,148			13,595			7,355
Restructuring		996			-			996			-
Goodwill impairment		1,066,564			-			1,066,564			-
Total operating expenses		1,084,147			12,829			1,119,496			34,466
Operating (loss) income		(1,069,081	)		2,071			(1,076,885	)		7,341
Interest expense and other (income) expense
Interest expense		2,406			4,376			5,738			8,800
Other expense		81			442			276			9,007
Other income		(25,548	)		-			(88,771	)		(3,215	)
Total interest expense and other (income) expense, net		(23,061	)		4,818			(82,757	)		14,592
Net loss before income tax		(1,046,020	)		(2,747	)		(994,128	)		(7,251	)
Income tax (benefit) expense		87			729			167			807
Net loss		(1,046,107	)		(3,476	)		(994,295	)		(8,058	)
Weighted average Class A common shares outstanding
Basic		62,816,174						55,348,018
Diluted		62,816,174						55,348,018

Q3 2022 Revenue by Product Line

	Reported Three Months Ended
($ in thousands)	9/30/2022	% Revenue	9/30/2021	% Revenue	% Change
Revenue By Product Line
Additive manufacturing	$3,154	7.8%	$4,480	10.8%	-29.6%
Injection molding	$5,984	14.9%	$7,812	18.8%	-23.4%
CNC machining	$15,530	38.6%	$14,160	34.1%	9.7%
Precision sheet metal	$13,719	34.1%	$13,284	32.0%	3.3%
Other revenue	$1,823	4.5%	$1,745	4.2%	4.5%
Total	$40,210	100%	$41,481	100%	-3.1%

First Nine Months 2022 Revenue by Product Line

	Reported Nine Months Ended
($ in thousands)	9/30/2022	% Revenue	9/30/2021	% Revenue	% Change
Revenue By Product Line
Additive manufacturing	$11,713	9.5%	$13,322	12.3%	-12.1%
Injection molding	$19,892	16.2%	$20,941	19.4%	-5.0%
CNC machining	$43,441	35.4%	$30,063	27.9%	44.5%
Precision sheet metal	$43,153	35.2%	$38,494	35.7%	12.1%
Other revenue	$4,538	3.7%	$5,067	4.7%	-10.4%
Total	$122,737	100%	$107,887	100%	13.8%

Consolidated Balance Sheets ($ in thousands)
	Period Ended
	September 30, 2022			December 31, 2021
Assets	(unaudited)
Current assets
Cash	$	8,004		$	20,357
Accounts receivable, net		27,237			25,367
Inventory		15,831			13,165
Prepaid expenses and other current assets		3,170			1,836
Total current assets		54,242			60,725
Property and equipment, net		49,197			44,527
Right-of-use operating lease assets, net		10,774			-
Right-of-use financing lease assets, net		2,308			-
Intangible assets, net		255,947			269,622
Goodwill		121,779			1,189,464
Other non-current assets		1,415			2,036
Total assets	$	495,662		$	1,566,374
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	11,779		$	9,409
Accrued expenses		8,162			5,957
Current operating lease liability		2,164			-
Current financing lease liability		195			-
Contingent consideration		700			2,748
Current portion of debt		31,955			29,697
Other current liabilities		2,037			2,058
Total current liabilities		56,992			49,869
Long-term debt, net		116,187			120,491
Fathom earnout shares liability		11,910			64,300
Sponsor earnout shares liability		1,790			9,380
Warrant liability		5,900			33,900
Payable to related parties pursuant to the tax receivable agreement (includes $4,400 and $4,600 at fair value, respectively)		26,100			4,600
Noncurrent contingent consideration		-			850
Noncurrent operating lease liability		9,041			-
Noncurrent financing lease liability		2,176			-
Deferred tax liability		-			17,570
Other noncurrent liabilities		-			4,655
Total liabilities		230,096			305,615
Commitments and Contingencies:
Redeemable non-controlling interest in Fathom Holdco, LLC.		161,407			841,982
Shareholders' Equity:
Class A common stock, $0.0001 par value; 300,000,000 shares authorized; 65,529,753 issued and outstanding as of September 30, 2022 and 50,785,656 issued and outstanding as of December 31, 2021		6			5
Class B common stock, $0.0001 par value; 180,000,000 shares authorized; 70,153,051 shares issued and outstanding as of September 30, 2022 and 84,294,971 shares issued and outstanding as of December 31, 2021		7			8
Class C common stock, $.0001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding as of September 30, 2022 and December 31, 2021		-			-
Preferred Stock, $.0001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding as of September 30, 2022 and December 31, 2021		-			-
Additional paid-in-capital		584,313			466,345
Accumulated other comprehensive loss					-
Accumulated deficit		(480,167	)		(47,581	)
Shareholders’ equity attributable to Fathom Digital Manufacturing Corporation		104,159			418,777
Total Liabilities, Shareholders’ Equity, and Redeemable Non-Controlling Interest	$	495,662		$	1,566,374

Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income (Loss)

($ in thousands)	Three Months Ended				Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Net loss	$	(1,046,107)	$	(3,476)	$	(994,295)	$	(8,058)
Acquisition expenses ⁽¹⁾		-		-		-		4,045
Stock compensation		1,762		-		5,687		-
Inventory step-up amortization		-		(277)		3,241		-
Goodwill impairment		1,066,564				1,066,564
Restructuring		996	-			996	-
Change in fair value of warrant liability ⁽²⁾		(7,400)		-		(28,000)		-
Change in fair value of earnout shares liability ⁽²⁾		(18,080)		-		(59,980)		-
Change in fair value of tax receivable agreement ²⁾		-		-		(200)		-
Integration, non-recurring, non-operating, cash, and non-cash costs ⁽³⁾		492		2,679		3,443		5,309
Adjusted net income (loss)	$	(1,773)	$	(1,074)	$	(2,544)	$	1,296

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