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Fathom reports revenues of $161.1 million in FY 2022 (+5.9%)

Company also recorded $1,109.2 million loss due to a non-cash goodwill impairment charge - may implement reverse stock split to avoid delisting

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Fathom Digital Manufacturing Corp. (NYSE: FATH), an industry leader in on-demand digital manufacturing services, reported the company’s revenue increased 5.9% to $161.1 million in FY 2022 from $152.2 million for the same period in 2021 with higher sales driven by acquisition-related activity and growth within Fathom’s strategic accounts. Revenue for the fourth quarter of 2022 was $38.4 million compared to $44.3 million in the fourth quarter of 2021, a decrease of 13.3% primarily due to lower production volumes.

Due to declining stock price, the company was notified on March 29, 2023, by the New York Stock Exchange that the average closing price of the Company’s Class A common stock (the “Common Stock”) over the prior 30 consecutive trading day period was below $1.00 per share. As a result Fathom now has a period of six months following the receipt of the notice to regain compliance with the minimum share price requirement, or until the Company’s next annual meeting of stockholders if stockholder approval is required to cure the share price non-compliance, as would be the case to effectuate a reverse stock split.

The Company can regain compliance at any time during the six-month cure period if on the last trading day of any calendar month during the cure period, the Common Stock has a closing price of at least $1.00 per share and an average closing price of at least $1.00 per share over the 30-trading day period ending on the last trading day of such month.

As required by the NYSE, the Company intends to timely respond to the NYSE with respect to its intent to cure the deficiency to regain compliance with the price criteria. The notice has no immediate impact on the listing of the Common Stock, which will continue to be listed and traded on the NYSE during this period, subject to the Company’s compliance with the other continued listing requirements of the NYSE. Failure to satisfy the conditions of the cure period or to maintain other listing requirements could lead to a delisting.

“Our fourth quarter results were below our expectations and primarily reflect ongoing softness in the macro environment along with the continued ramp-up of our new commercial activities,” said Ryan Martin, Fathom Chief Executive Officer. “In response, we have both accelerated and augmented our plan to drive greater efficiencies in the business and currently expect to generate approximately $19.5 million in annualized cost savings upon completion of our plan in Q2 2023. We also appointed a new Vice President of Sales with a proven track record in enterprise sales and strategic growth management as we remain focused on strengthening our go-to-market strategies. We are confident our new sales leadership and efficiency measures will support our efforts to increase the scalability of our broad on-demand platform and deliver profitable, long-term growth.”

Fathom reports revenues of $161.1 million in FY 2022 (+5.9%) and records $1,109.2 million loss due to non-cash goodwill impairment charge Gross profit for the fourth quarter of 2022 totaled $10.0 million, or 26.0% of revenue, compared to $17.4 million, or 39.2% of revenue, in the fourth quarter of 2021. Gross profit for the year ended December 31, 2022 was $52.5 million, or 32.6% of revenue, which includes approximately $3.2 million in non-cash purchase accounting adjustments, compared to $59.2 million, or 38.9% of revenue, for the same period in 2021. Excluding the $3.2 million in non-cash purchase accounting adjustments, gross profit for the year ended December 31, 2022, was $55.8 million, or 34.6% of revenue.

Net loss for the year ended December 31, 2022, was $(1,109.2) million, which included a non-cash goodwill impairment charge of $1,189.5 million. This compares to a net income of $17.0 million for the same period in 2021. For the year ended December 31, 2022, Fathom reported an adjusted net loss of $(0.9) million compared to an adjusted net loss of $(1.6) million for the same period in 2021.

Adjusted EBITDA for the fourth quarter of 2022 totaled $3.0 million versus $10.5 million for the same period in 2021 primarily due to lower production volumes and related excess labor as well as the incurrence of public company expenses totaling approximately $1.8 million. The Adjusted EBITDA margin in the quarter was 7.9% compared to 23.8% in the fourth quarter of 2021.

For the year ended December 31, 2022, Adjusted EBITDA totaled $24.9 million versus $34.4 million for the same period in 2021 primarily due to recurring public company expenses totaling approximately $7.0 million. The Adjusted EBITDA margin for the year ended December 31, 2022 was 15.5% compared to 22.6% for the same period in 2021.

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Davide Sher

Since 2002, Davide has built up extensive experience as a technology journalist, market analyst and consultant for the additive manufacturing industry. Born in Milan, Italy, he spent 12 years in the United States, where he completed his studies at SUNY USB. As a journalist covering the tech and videogame industry for over 10 years, he began covering the AM industry in 2013, first as an international journalist and subsequently as a market analyst, focusing on the additive manufacturing industry and relative vertical markets. In 2016 he co-founded London-based VoxelMatters. Today the company publishes the leading news and insights websites VoxelMatters.com and Replicatore.it, as well as VoxelMatters Directory, the largest global directory of companies in the additive manufacturing industry.

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