Desktop Metal(US:DM)2024-10-31 11:00Financial Performance - For the three months ended September 30, 2024, the company recognized revenues of $36.4 million, while for the nine months, revenues totaled $115.9 million[154]. - The company incurred net losses of $35.4 million for the three months and $191.0 million for the nine months ended September 30, 2024[154]. - Total revenue for the three months ended September 30, 2024, was $36.4 million, a decrease of $6.4 million, or 15%, compared to $42.8 million in the same period of 2023[177]. - Total revenue for the nine months ended September 30, 2024, was $115.9 million, a decrease of $21.4 million, or 16%, compared to $137.4 million in 2023[193]. - Gross profit for the nine months ended September 30, 2024, was a loss of $31.2 million, compared to a profit of $6.6 million in the same period of 2023, reflecting a decrease of $37.8 million[197]. - GAAP net loss for the three months ended September 30, 2024, was $35.4 million, compared to a net loss of $46.4 million for the same period in 2023[226]. - The company incurred a net loss of $191.0 million for the nine months ended September 30, 2024, compared to a net loss of $148.7 million for the same period in 2023[227]. Cost Management and Initiatives - The 2022 Initiative resulted in $20.7 million in cost savings in the second half of 2022 and achieved $100 million in annualized cost savings in 2023[161]. - The company anticipates at least $50 million in aggregate annualized cost savings from the 2024 Initiative, which includes a global workforce reduction of approximately 20%[163]. - Restructuring charges related to the 2024 Initiative were $1.8 million for the three months and $3.9 million for the nine months ended September 30, 2024[164]. - The company expects total pre-tax restructuring charges of $82.1 million to $82.5 million under the Photopolymer Initiative, including $80.3 million in incremental depreciation and amortization[166]. Revenue Breakdown - Products revenue decreased by $5.6 million, or 15%, to $31.9 million, primarily due to a reduction in units shipped driven by macroeconomic conditions[178]. - Services revenue also decreased by $0.8 million, or 15%, to $4.5 million during the same period[178]. - Products revenue for the nine months ended September 30, 2024, decreased by $22.6 million, or 19%, to $98.9 million, while services revenue increased by $1.2 million, or 8%, to $17.0 million[193]. - Revenue from the Americas decreased by 14% to $75.8 million, while EMEA and APAC revenues fell by 22% and 10%, respectively[194]. Operating Expenses - Total cost of sales for the three months ended September 30, 2024, was $33.2 million, a decrease of $7.6 million, or 19%, compared to $40.8 million in 2023[181]. - Total cost of sales increased by 13% to $147.2 million, driven by incremental amortization related to the Photopolymer Initiative[195]. - Research and development expenses decreased by $9.0 million, or 44%, to $11.5 million for the three months ended September 30, 2024, compared to $20.5 million in 2023[186]. - Sales and marketing expenses increased by 57% to $45.0 million, driven by amortization related to the Photopolymer Initiative[201]. - General and administrative expenses increased by $7.8 million, or 82%, to $17.3 million for the three months ended September 30, 2024, compared to $9.5 million in 2023[188]. - General and administrative expenses rose by 18% to $59.7 million, influenced by incremental amortization and depreciation from the Photopolymer Initiative[202]. Cash Flow and Liquidity - Cash used in operating activities during the nine months ended September 30, 2024, was $53.4 million, with cash and cash equivalents at $30.6 million and current liabilities at $61.2 million[154]. - Cash and cash equivalents as of September 30, 2024, totaled $30.6 million, primarily invested in money market funds and fixed income instruments[228]. - The company has lease payment obligations of $26.6 million as of September 30, 2024, with $7.9 million payable within the next 12 months[231]. - A multi-draw term loan credit facility of up to $20.0 million is available to the company starting January 7, 2025, subject to certain conditions[229]. - Net cash used in operating activities was $53.4 million for the nine months ended September 30, 2024, consisting of $191.0 million in net losses, adjusted for non-cash items[238]. Legal Matters - Desktop Metal faced multiple legal challenges, including a dismissed Consolidated Complaint related to alleged securities violations, with the court ruling in favor of the defendants on September 21, 2023[259]. - A new complaint was filed on August 12, 2024, alleging omissions in the Preliminary Proxy Statement regarding the Nano Merger, but was voluntarily dismissed by the plaintiff on August 16, 2024[260]. - Additional complaints were filed in September 2024, alleging negligent misrepresentation and disclosure deficiencies in the Definitive Proxy Statement[260]. - Two stockholders filed actions in Delaware seeking records related to the Nano Merger under Section 220 of the Delaware General Corporations Code[261]. - Desktop Metal believes all complaints are without merit and intends to defend against them vigorously[261].