8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 15, 2023

FATHOM DIGITAL MANUFACTURING CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	001-39994	98-1571400
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1050 Walnut Ridge Drive

Hartland, WI 53029

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (262) 367-8254

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	FATH	NYSE
Warrants to purchase Class A common stock	FATH.WS	NYSE

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

er next two years Expanded mid-volume production of existing program $1.7 million in 2021; expect $4-$8 million in 2022 orders Prototype with mid-volume production follow-on $4.5 million over three-month period New cross-sell of sheet metal low-volume production $450k in 2021; expect over $1.5 million in 2022 orders Prototype & low-volume production Global healthcare company Global semiconductor company Disruptive electric vehicle manufacturer Global leader in mobile robotics 1 2 3 4 5 6 Global leader in gas measurement instruments and technologies Leading subsea technology company $550K production order Expansion to higher volume production of existing program New Strategic Accounts Existing Strategic Accounts

Statement (preliminary unaudited) Repor

Item 2.02. Results of Operations and Financial Condition.

On May 15, 2023, Fathom Digital Manufacturing Corporation (“Fathom”) issued a press release announcing its financial results for the quarter ended March 31, 2023. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

In accordance with General Instruction B.2 of Form 8-K, the information contained in Item 2.02 of this Current Report and in Exhibit 99.1 is being furnished and shall not be deemed “filed” with the Securities and Exchange Commission (the “SEC”) for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section and will not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such filing.

Exhibit 99.1 to this Current Report contains certain financial measures that are considered “non-GAAP financial measures” as defined in the SEC rules. Exhibit 99.1 to this Current Report also contains the reconciliation of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles, as well as the reasons why Fathom’s management believes that presentation of the non-GAAP financial measures provides useful information to investors regarding Fathom’s results of operations and, to the extent material, a statement disclosing any other additional purposes for which Fathom’s management uses the non-GAAP financial measures.

Item 7.01. Regulation FD Disclosure.

Fathom is posting an earnings presentation for the quarter ended March 31, 2023 to its website at https://investors.fathommfg.com. A copy of the presentation is being furnished herewith as Exhibit 99.2. Fathom will use the presentation during its conference call on May 15, 2023 and also may use the presentation from time to time in conversations with analysts, investors and others.

In accordance with General Instruction B.2 of Form 8-K, the information contained in Item 7.01 of this Current Report and in Exhibit 99.2 is being furnished and shall not be deemed “filed” with the Securities and Exchange Commission (the “SEC”) for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section and will not be incorporated by reference into any registration statement or other document filed under the Securities Act, or the Exchange Act, except as expressly set forth by specific reference in such filing.

The information contained in Exhibit 99.2 is summary information that is intended to be considered in the context of Fathom’s filings with the SEC. Fathom undertakes no duty or obligation to publicly update or revise the information contained in this Current Report, although it may do so from time to time as its management believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.

Exhibit 99.2 to this Current Report contains certain financial measures that are considered “non-GAAP financial measures” as defined in the SEC rules. Exhibit 99.2 to this Current Report also contains the reconciliation of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles, as well as the reasons why Fathom’s management believes that presentation of the non-GAAP financial measures provides useful information to investors regarding Fathom’s preliminary unaudited results of operations and, to the extent material, a statement disclosing any other additional purposes for which Fathom’s management uses the non-GAAP financial measures.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

Exhibit Number	Description
99.1	Press Release dated March 15, 2023
99.2	Fathom Presentation, March 15, 2023
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

FATHOM DIGITAL MANUFACTURING CORPORATION
By:	/s/ Mark Frost
Name:	Mark Frost
Title:	Chief Financial Officer

Date: May 15, 2023

EX-99.1

 

Fathom Digital Manufacturing Reports First Quarter 2023 Financial Results

First Quarter 2023 Highlights

•Revenue totaled $35.0 million

•Total orders were $34.6 million

•Net loss totaled $(1.3) million; Adjusted net loss1 was $(5.5) million

•Adjusted EBITDA1 totaled $4.1 million, representing an Adjusted EBITDA margin1 of 11.7%

HARTLAND, Wis., May 15, 2023-- Fathom Digital Manufacturing Corp. (NYSE: FATH), an industry leader in on-demand digital manufacturing services, today announced financial results for the first quarter ended March 31, 2023.

	Three Months Ended
($ in thousands)	3/31/2023	3/31/2022
Revenue	$35,007	$40,541
Net income (loss)	$(1,332)	$18,999
Adjusted net income (loss)1	$(5,504)	$(824)
Adjusted EBITDA1	$4,100	$6,178
Adjusted EBITDA margin1	11.7%	15.2%

1 See “Non-GAAP Financial Information.” Reconciliations of non-GAAP financial measures are included in the appendix.

“Our results for the first quarter reflect the strong execution of our $19.5 million optimization plan, enabling Fathom to extend its history of Adjusted EBITDA and cash generation,” said Ryan Martin, Fathom Chief Executive Officer. “During the quarter, we consolidated our two existing facilities in Texas and implemented other productivity initiatives, contributing to a gross margin improvement of 810 basis points on a sequential basis. Our strategic actions focused on driving future performance continue to gain traction while the macro environment remains challenging. Going forward, we will maintain our focus on actively managing our cost structure to ensure production levels are in-line with customer demand and capitalizing on our increased scalability as market conditions improve.”

Summary of Financial Results

Revenue for the first quarter of 2023 was $35.0 million compared to $40.5 million in the first quarter of 2022, a decrease of 13.7% primarily due to lower production volumesdriven by the softer macroeconomic environment.

Gross profit for the first quarter of 2023 totaled $11.9 million, or 34.1% of revenue, compared to $12.0 million, or 29.6% of revenue, in the first quarter of 2022. Excluding approximately $3.2 million in non-cash purchase accounting adjustments, gross profit for the first quarter 2022 was $15.2 million, or 37.5% of revenue.

Net loss for the first quarter of 2023 was $(1.3) million compared to net income of $19.0 million in the first quarter of 2022. Excluding the revaluation of Fathom warrants and earnout shares, stock compensation expense, optimization plan expenses, and other costs, Fathom reported an adjusted net loss in the first quarter of 2023 totaling $(5.5) million compared to an adjusted net loss of $(0.8) million for the same period in 2022.

 

Adjusted EBITDA for the first quarter of 2023 totaled $4.1 million versus $6.2 million for the same period in 2022 primarily due to lower volume leverage, partially offset by cost savings from the execution of Fathom’s optimization plan. The Adjusted EBITDA margin in the quarter was 11.7% compared to 15.2% in the first quarter of 2022.

Conference Call

Fathom will host a conference call on Monday, May 15, 2023 at 8:30 am Eastern Time to discuss the results for the first quarter 2023 and provide the company’s outlook for the second quarter 2023. The dial-in number for callers in the U.S. is +1-833-470-1428 and the dial-in number for international callers is +1-833-950-0062. The access code for all callers is 522761. The conference call will be broadcast live over the Internet and include a slide presentation. To access the webcast and supporting materials, please visit the investor relations section of Fathom’s website at https://investors.fathommfg.com.

A replay of the conference call can be accessed through May 22, 2023, by dialing +1-866-813-9403 (US) or +1-226-828-7578 (international), and then entering the access code 412938. The webcast will also be archived on Fathom’s website.

About Fathom Digital Manufacturing

Fathom is one of the largest on-demand digital manufacturing platforms in North America, serving the comprehensive product development and low- to mid-volume manufacturing needs of some of the largest and most innovative companies in the world. With more than 25 quick turn manufacturing processes combined with an extensive national footprint, Fathom seamlessly blends in-house capabilities across plastic and metal additive technologies, CNC machining, injection molding and tooling, sheet metal fabrication, design and engineering, and more. Fathom has more than 35 years of industry experience and is at the forefront of the Industry 4.0 digital manufacturing revolution, serving clients in the technology, defense, aerospace, medical, automotive, IOT sectors, and others. Fathom's certifications include: ITAR Registered, ISO 9001:2015 Design Certified, ISO 9001:2015, ISO 13485:2016, AS9100:2016, and NIST 800-171. To learn more, visit https://fathommfg.com/.

Forward-Looking Statements
Certain statements made in this press release are “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Words such as “estimates,” “projects,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “would,” “should,” “future,” “propose,” “target,” “goal,” “objective,” “outlook” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the control of Fathom Digital Manufacturing Corporation (“Fathom”) that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include: the inability to recognize the anticipated benefits of our business combination with Altimar Acquisition Corp. II; changes in general economic conditions, including as a result of the COVID-19 pandemic or any future outbreaks of other highly infectious or contagious disease; the implementation of our optimization plan could result in greater costs and fewer benefits than we anticipate; the outcome of litigation related to or arising out of the business combination, or any adverse developments therein or delays or costs resulting therefrom; the ability to meet the New York Stock Exchange’s listing standards following the consummation of the business combination; costs related to the business combination and additional factors discussed in Fathom’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission (the “SEC”) on April 7, 2023, as amended on May 1, 2023, as well as Fathom’s other filings with the SEC. If any of the risks described above materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by our forward-looking statements. There may be additional risks that Fathom does not presently know or that Fathom currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Fathom’s expectations, plans or forecasts of future events and views as of the date of this press release. These

 

forward-looking statements should not be relied upon as representing Fathom’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements. Fathom undertakes no obligation to update or revise any forward-looking statements made by management or on its behalf whether as a result of future developments, subsequent events or circumstances or otherwise, except as required by law.

Non-GAAP Financial Information This press release includes Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP financial measures that we use to supplement our results presented in accordance with U.S. GAAP. We believe Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA margin are useful in evaluating our operating performance, as they are similar to measures reported by our public competitors and regularly used by security analysts, institutional investors and other interested parties in analyzing operating performance and prospects. Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA margin are not intended to be a substitute for any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.

We define and calculate Adjusted Net Income as net income (loss) before the impact of any change in the estimated fair value of the company’s warrants or earnout shares, tax receivable agreement liability, optimization plan expenses, goodwill impairment, stock-based compensation, and certain other non-cash and non-core items, as described in the reconciliation included in the appendix to this press release. We define and calculate Adjusted EBITDA as net income (loss) before the impact of interest income or expense, income tax expense and depreciation and amortization, and further adjusted for the following items: change in the estimated fair value of the company’s warrants or earnout shares, tax receivable agreement liability, optimization plan expenses, goodwill impairment, stock-based compensation, and certain other non-cash and non-core items, as described in the reconciliation included in the appendix to this press release. Adjusted EBITDA excludes certain expenses that are required in accordance with U.S. GAAP because they are non-recurring (for example, in the case of optimization plan expenses), non-cash (for example, in the case of depreciation, amortization, goodwill impairment, and stock-based compensation) or are not related to our underlying business performance (for example, in the case of interest income and expense). Adjusted EBITDA margin represents Adjusted EBITDA divided by total revenue. We include these non-GAAP financial measures because they are used by management to evaluate Fathom’s core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments.

Information reconciling forward-looking Adjusted EBITDA to GAAP financial measures is unavailable to Fathom without unreasonable effort. The company is not able to provide reconciliations of forward-looking Adjusted EBITDA to GAAP financial measures because certain items required for such reconciliations are outside of Fathom's control and/or cannot be reasonably predicted, such as the provision for income taxes. Preparation of such reconciliations would require a forward-looking balance sheet, statement of income and statement of cash flow, prepared in accordance with GAAP, and such forward-looking financial statements are unavailable to Fathom without unreasonable effort. Fathom provides a range for its Adjusted EBITDA forecast that it believes will be achieved, however it cannot accurately predict all the components of the Adjusted EBITDA calculation. Fathom provides an Adjusted EBITDA forecast because it believes that Adjusted EBITDA, when viewed with the company's results under GAAP, provides useful information for the reasons noted above. However, Adjusted EBITDA is not a measure of financial performance or liquidity under GAAP and, accordingly, should not be considered as an alternative to net income or cash flow from operating activities as an indicator of operating performance or liquidity.

Contact:

Michael Cimini

Director, Investor Relations

Fathom Digital Manufacturing

(262) 563-5575

michael.cimini@fathommfg.com

 

Consolidated Balance Sheets

($ in thousands)	Period Ended
	March 31, 2023		December 31, 2022
Assets
Current assets
Cash	$	12,129	$	10,713
Accounts receivable, net		26,275		28,641
Inventory		16,771		15,718
Prepaid expenses and other current assets		3,403		3,588
Total current assets		58,578		58,660
Property and equipment, net		47,809		47,703
Right-of-use lease assets, net		12,804		12,565
Intangible assets, net		246,877		251,412
Other non-current assets		190		175
Total assets	$	366,258	$	370,515
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	7,280	$	7,982
Accrued expenses		8,701		8,176
Current lease liability		2,294		2,374
Other current liabilities		4,617		4,828
Current portion of debt, net		48,377		42,744
Total current liabilities		71,269		66,104
Long-term debt, net		111,738		114,327
Fathom earnout shares liability		1,780		5,960
Sponsor earnout shares liability		280		930
Warrant liability		1,000		2,780
Payable to related parties pursuant to the tax receivable agreement (includes $4,300 and $4,000 at fair value, respectively)		28,160		25,360
Noncurrent lease liability		10,799		11,083
Total liabilities		225,026		226,544
Commitments and Contingencies:
Contingently Redeemable Preferred Equity:
Redeemable non-controlling interest in Fathom OpCo		84,283		92,207
Shareholders' and Members' Equity:
Class A common stock, $0.0001 par value; 300,000,000 shares authorized; issued and outstanding 69,546,514 and 65,808,764 shares as of March 31, 2023 and December 31, 2022, respectively		7		7
Class B common stock, $0.0001 par value; 180,000,000 shares authorized; issued and outstanding 66,692,781 and 70,153,051 shares as of March 31, 2023 and December 31, 2022, respectively		7		7
Additional paid-in-capital		591,011		587,941
Accumulated other comprehensive loss		(107)		(107)
Accumulated deficit		(533,969)		(536,084)
Shareholders’ equity attributable to Fathom Digital Manufacturing Corporation		56,949		51,764
Total Liabilities, Shareholders’ Equity, Members' Equity, and Redeemable Non-Controlling Interest	$	366,258	$	370,515

 

Consolidated Statements of Comprehensive Income (Loss)

	Three Months Ended
($ in thousands)	March 31, 2023		March 31, 2022
Revenue	$	35,007	$	40,541
Cost of revenue		23,062		28,544
Gross profit		11,945		11,997
Operating expenses
Selling, general, and administrative		10,771		14,763
Depreciation and amortization		4,576		4,517
Restructuring		650		-
Total operating expenses		15,997		19,280
Operating loss		(4,052)		(7,283)
Interest expense and other (income) expense
Interest expense		3,470		1,473
Other expense		365		116
Other income		(6,610)		(27,165)
Total interest expense and other (income) expense, net		(2,775)		(25,576)
Net (loss) income before income tax		(1,277)		18,293
Income tax expense (benefit)		55		(706)
Net (loss) income	$	(1,332)	$	18,999
Net loss attributable to Fathom OpCo non-controlling interest		(3,447)		(5,259)
Net income attributable to controlling interest		2,115		24,258
Comprehensive income:
Loss from foreign currency translation adjustments		-		(107)
Comprehensive income, net of tax	$	2,115	$	24,151
Weighted average Class A common shares outstanding
Basic		67,047,713		50,785,656
Diluted		136,124,236		135,839,973

Q1 2023 Revenue by Product Line

	Three Months Ended
($ in thousands)	3/31/2023	% Revenue	3/31/2022	% Revenue	% Change
Revenue By Product Line
Additive manufacturing	$3,588	10.2%	$4,149	10.2%	-13.5%
Injection molding	$4,679	13.4%	$6,815	16.8%	-31.3%
CNC machining	$14,230	40.6%	$13,326	32.9%	6.8%
Precision sheet metal	$10,383	29.7%	$14,683	36.2%	-29.3%
Other revenue	$2,127	6.1%	$1,568	3.9%	35.7%
Total	$35,007	100.0%	$40,541	100.0%	-13.7%

 

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

($ in thousands)	Three Months Ended
	March 31, 2023		March 31, 2022
Net income (loss)	$	(1,332)	$	18,999
Stock compensation		1,093		2,128
Inventory step-up amortization		-		3,241
Restructuring		650		-
Change in fair value of warrant liability (1)		(1,780)		(8,100)
Change in fair value of earnout shares liability (1)		(4,830)		(18,970)
Change in fair value of tax receivable agreement (1)		-		-
Integration, non-recurring, non-operating, cash, and non-cash costs (2)		395		1,878
Adjusted net income (loss)	$	(5,504)	$	(824)

1 Represents the impacts from the change in fair value related to the earnout shares liability, the warrant liability and the tax receivable agreement associated with the business combination completed on December 23, 2021; 2 Represents adjustments for other integration, non-recurring, non-operating, cash, and non-cash costs related primarily to integration costs for acquisitions and severance.

Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA

($ in thousands)	Three Months Ended
	March 31, 2023		March 31, 2022
Net income (loss)	$	(1,332)		$	18,999
Depreciation and amortization		6,079			6,208
Interest expense, net		3,470			1,500
Income tax benefit		55			(706)
Stock compensation		1,093			2,128
Inventory step-up amortization		-			3,241
Restructuring		650			-
Change in fair value of warrant liability (1)		(1,780)			(8,100)
Change in fair value of earnout shares liability (1)		(4,830)			(18,970)
Change in fair value of tax receivable agreement (1)		300			-
Integration, non-recurring, non-operating, cash, and non-cash costs (2)		395			1,878
Adjusted EBITDA	$	4,100		$	6,178

1 Represents the impacts from the change in fair value related to the earnout shares liability, the warrant liability and the tax receivable agreement associated with the business combination completed on December 23, 2021; 2 Represents adjustments for other integration, non-recurring, non-operating, cash, and non-cash costs related primarily to integration costs for acquisitions and severance.

 

EX-99.2

Q1 2022 Financial ResultsMay 16, 2022

Forward-Looking StatementsCertain statements made in this presentation are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Words such as “estimates,” “projects,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “would,” “should,” “future,” “propose,” “target,” “goal,” “objective,” “outlook” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the control of Fathom Digital Manufacturing Corporation (“Fathom”) that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include: the inability to recognize the anticipated benefits of our business combination with Altimar Acquisition Corp. II; changes in general economic conditions, including as a result of the COVID-19 pandemic; the outcome of litigation related to or arising out of the business combination, or any adverse developments therein or delays or costs resulting therefrom; the ability to meet the New York Stock Exchange’s listing standards following the consummation of the business combination; costs related to the business combination and additional factors discussed in Fathom’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the Securities and Exchange Commission (the “SEC”) on April 8, 2022 as well as Fathom’s other filings with the SEC. If any of the risks described above materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by our forward-looking statements. There may be additional risks that Fathom does not presently know or that Fathom currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Fathom’s expectations, plans or forecasts of future events and views as of the date of this presentation. Although Fathom may elect to update these forward-looking statements at some point in the future, Fathom specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Fathom’s assessments as of any date subsequent to the date of this presentation. Accordingly, undue reliance should not be placed upon the forward-looking statements. Non-GAAP Information This presentation includes Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP financial measures that we use to supplement our results presented in accordance with U.S. GAAP. We believe Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA margin are useful in evaluating our operating performance, as they are similar to measures reported by our public competitors and regularly used by security analysts, institutional investors and other interested parties in analyzing operating performance and prospects. Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA margin are not intended to be a substitute for any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry. We define and calculate Adjusted Net Income as net income (loss) before the impact of any increase or decrease in the estimated fair value of the company’s warrants or earnout shares. We define and calculate Adjusted EBITDA as net losses before the impact of interest income or expense, income tax expense and depreciation and amortization, and further adjusted for the following items: stock-based compensation, transaction-related costs, and certain other non-cash and non-core items, as described in the reconciliation included in the Appendix to this presentation. Adjusted EBITDA excludes certain expenses that are required in accordance with U.S. GAAP because they are non-recurring (for example, in the case of transaction-related costs), non-cash (for example, in the case of depreciation and amortization, stock-based compensation) or are not related to our underlying business performance (for example, in the case of interest income and expense). Adjusted EBITDA margin represents Adjusted EBITDA divided by total revenue. We include these non-GAAP financial measures because they are used by management to evaluate Fathom’s core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. Information reconciling forward-looking Adjusted EBITDA to GAAP financial measures is unavailable to Fathom without unreasonable effort. The company is not able to provide reconciliations of forward-looking Adjusted EBITDA to GAAP financial measures because certain items required for such reconciliations are outside of Fathom's control and/or cannot be reasonably predicted, such as the provision for income taxes. Preparation of such reconciliations would require a forward-looking balance sheet, statement of income and statement of cash flow, prepared in accordance with GAAP, and such forward-looking financial statements are unavailable to Fathom without unreasonable effort. Fathom provides a range for its Adjusted EBITDA forecast that it believes will be achieved, however it cannot accurately predict all the components of the Adjusted EBITDA calculation. Fathom provides an Adjusted EBITDA forecast because it believes that Adjusted EBITDA, when viewed with the company's results under GAAP, provides useful information for the reasons noted above. However, Adjusted EBITDA is not a measure of financial performance or liquidity under GAAP and, accordingly, should not be considered as an alternative to net income or cash flow from operating activities as an indicator of operating performance or liquidity. Disclaimers

Q1 2022 Highlights 1 Adjusted EBITDA is a non-GAAP financial measure. Reconciliations of Non-GAAP financial measures are included in the Appendix. Total Orders: $43.8 million Revenue: $40.5 million Adjusted EBITDA1: $6.2 million Fathom delivered positive results in its first full quarter as a public company, furthering its growth profile and history of profitability and cash generation

Fathom Accelerates Manufacturing Innovation CustomerEnd-Market Robotics Consumer Electronics Semiconductor Agricultural Equipment Precision Equipment Measurement Macro Trend Product LifecyclesCondensing & Digitization Adoption of Additive Manufacturing  Supply Chain Transformation Adoption of Additive Manufacturing  Supply ChainTransformation BusinessImpact Reduce time to market from 12 weeks to 5 weeks Solved customer labor shortage by leveraging Manufacturing As A Service (MAAS) agreement On-boarded as a new supplier 75% faster than standard process, allowing FATH to ramp to meet customer needs Prevented down line situation expected to last 5 days at 3 shifts per day Incumbent supplier struggled, FATH ramped quickly to double output to meet long term demand Advanced Technologies CNC Machining Additive Manufacturing Sheet Metal Injection Molding Manufacturing as a Service (MAAS) Additive Manufacturing Sheet Metal CNC Machining Additive Manufacturing Manufacturing as a Service (MAAS) Additive Manufacturing Color Tech Dyeing CNC Machining Wire EDM

Q1 2022 Revenue 1 Pro forma revenue is a non-GAAP financial measure. Calculation of Q1 2021 pro forma revenue is included in the Appendix. Revenue growth of ~33% driven by increase in volume of customers served, primarily via M&A Fathom completed five acquisitions in 2021, including Injection Molding business in Q1 2021 Q1 2022 revenue over Q1 2021 pro forma revenue1 increased 6.0% led by organic growth in Precision Sheet Metal and CNC Machining technologies +32.8%

Q1 2022 Adjusted EBITDA1 1 Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. Reconciliation of GAAP net income (loss) to Adjusted EBITDA is included in the Appendix. Adjusted EBITDA margin represents Adjusted EBITDA divided by total revenue. Q1 2022 Adjusted EBITDA totaled $6.2 million SG&A rose to $14.8 million primarily due to expansion of public company infrastructure following NYSE listing in December 2021 Public company costs totaled ~$3.6 million, of which $1.3 million was non-recurring Q1 2022 Adjusted EBITDA margin1 of 15.2% versus 25.2% in Q1 2021 -19.5%

Liquidity and Cash Flow Availability Liquidity ($ in millions) 3/31/2022 Term debt $124.2 Secured revolving credit facility $22.0 Gross debt $146.2 Cash and cash equivalents $12.0 Net debt $134.2 Undrawn revolver commitments $28.0 Available liquidity $40.0 Cash Flow Summary ($ in millions) Q1 2022 Net cash provided by operations $0.7 Capital expenditures $3.3 Payments on debt $5.8 Available liquidity totaled $40.0 million as of 3/31/2022 Gross debt declined by $5.8 million in Q1 2022 Net debt totaled $134.2 million as of 3/31/2022 Net cash provided by operations totaled $0.7 million and capital expenditures were $3.3 million in Q1 2022

Financial Guidance ($ in thousands) Low End High End Revenue $182,000 $192,000 Adjusted EBITDA2 $40,000 $45,000 1 Source: Fathom’s full year 2022 forecast, as of May 16, 2022, reflects management projections and macroeconomic outlook. 2 Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See Appendix for a reconciliation of GAAP net income (loss) to Adjusted EBITDA. Adjusted EBITDA margin represents Adjusted EBITDA divided by total revenue. Full Year 2022 Forecast1 Highlights Reaffirmed financial guidance for full year 2022 Projected annual revenue growth of approximately 20% to 26% Adjusted EBITDA2 expected to increase approximately 16% to 31% Adjusted EBITDA margin2 expected to range between 22.0% and 23.4% Annual guidance excludes the impact of unannounced future acquisitions

Summary 1 Reconciliations of non-GAAP financial measures to the most comparable GAAP measures are included in the Appendix. Positive Q1 results highlighted by revenue growth of ~33% 1 2 4 5 3 Order volume of $43.8 million reflects ongoing demand for broad manufacturing services Maintained financial outlook for full year 2022 amid volatile macro environment Strong financial position supports continued execution of growth strategy Adjusted EBITDA1 of $6.2 million underscores differentiated business model

Appendix

Income Statement   Reported Three Months Ended ($ in thousands) 3/31/2022 3/31/2021 Revenue $40,541 $30,534 Cost of revenue1 $28,544 $17,123 Gross profit $11,997 $13,411       Selling, general, and administrative (SG&A) $14,763 $7,670 Depreciation and amortization $4,517 $2,672 Total operating expenses $19,280 $10,342       Operating income (loss) ($7,283) $3,069       Interest expense $1,473 $2,114 Other expense (income), net ($27,049) $1,446       Income (loss) before taxes $18,293 ($491)       Income tax expense $454 $9       Net income (loss) $17,839 ($500)       Adjusted net income (loss)2 ($1,984) $2,060 1 Cost of revenue for the three months ended March 31, 2022, includes approximately $3.5 million in amortization costs related to purchase accounting adjustments following the closing of Fathom’s business combination on December 23, 2021. Excluding these non-cash purchase accounting adjustments, the cost of revenue for the three months ended March 31, 2022, was $15.5 million, or 38.2% of revenue. 2 See reconciliation of GAAP net income (loss) to adjusted net income (loss) in the Appendix.

Revenue By Product Line   Reported Three Months Ended ($ in thousands) 2022 % Revenue 2021 % Revenue % Change Revenue By Product Line           Additive manufacturing $4,149 10.2% $4,540 14.9% -8.6% Injection molding $6,815 16.8% $6,637 21.7% 2.7% CNC machining $13,326 32.9% $4,831 15.8% 175.8% Precision sheet metal $14,683 36.2% $13,117 43.0% 11.9% Other revenue $1,568 3.9% $1,409 4.6% 11.4% Total $40,541 100% $30,534 100% 32.8%

Reconciliation of GAAP Revenue to Pro Forma Adjusted Revenue1 ($ in thousands) Q1 2021 Revenue $30,534 2021 Acquisitions revenue2 7,714 Pro forma revenue $38,248 1 Pro forma revenue is a non-GAAP financial measure. 2 As described in Fathom’s 2021 Annual Report on Form 10-K, during 2021, Fathom completed the acquisitions of Summit Tooling, Inc., Summit Plastics, LLC, Centex Machine and Welding, Inc., Laser Manufacturing, Inc. and Screenshot Precisions, LLC d/b/a Micropulse West and Precisions Process Corp. (the “2021 Acquisitions”). Information gives pro forma effect to the 2021 Acquisitions as though such transactions occurred on January 1, 2021.

Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income (Loss) ($ in thousands) Q1 2022 Q1 2021 Net income (loss) $17,839 ($500) Acquisition expenses1 - 1,169 Stock compensation 2,128 - Inventory step-up amortization 3,241 277 Change in fair value of warrant liability2 (8,100) - Change in fair value of earnout share liability2 (18,970) - Integration, non-recurring, non-operating, cash, and non-cash costs3 1,878 1,114 Adjusted net income (loss) ($1,984) $2,060 1 Represents expenses incurred related to business acquisitions; 2 Represents the impacts from the change in fair value related to both the earnout share liability and the warrant liability associated with the business combination completed on December 23, 2021; 3 Represents adjustments for other integration, non-recurring, non-operating, cash, and non-cash costs related primarily to integration costs for new acquisitions, severance, and management fees paid to our principal owner.    

Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA ($ in thousands) Q1 2022 Q1 2021 Net income (loss) $17,839 ($500) Depreciation and amortization 6,208 3,526 Interest expense, net 1,500 2,114 Income tax expense 454 9 Acquisition expenses1 - 1,169 Stock compensation 2,128 - Inventory step-up amortization 3,241 277 Change in fair value of warrant liability2 (8,100) - Change in fair value of earnout share liability2 (18,970) - Integration, non-recurring, non-operating, cash, and non-cash costs3 1,878 1,114 Adjusted EBITDA $6,178 $7,709 1 Represents expenses incurred related to business acquisitions; 2 Represents the impacts from the change in fair value related to both the earnout share liability and the warrant liability associated with the business combination completed on December 23, 2021; 3 Represents adjustments for other integration, non-recurring, non-operating, cash, and non-cash costs related primarily to integration costs for new acquisitions, severance, and management fees paid to our principal owner.    

XML

Document and Entity Information	May 15, 2023
Document And Entity Information [Line Items]
Entity Registrant Name	FATHOM DIGITAL MANUFACTURING CORPORATION
Amendment Flag	false
Entity Central Index Key	0001836176
Document Type	8-K
Document Period End Date	May 15, 2023
Entity Incorporation State Country Code	DE
Entity File Number	001-39994
Entity Tax Identification Number	98-1571400
Entity Address, Address Line One	1050 Walnut Ridge Drive
Entity Address, City or Town	Hartland
Entity Address, State or Province	WI
Entity Address, Postal Zip Code	53029
City Area Code	262
Local Phone Number	367-8254
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Common Class A [Member]
Document And Entity Information [Line Items]
Security 12b Title	Class A common stock, par value $0.0001 per share
Trading Symbol	FATH
Security Exchange Name	NYSE
Class A Common Units [Member]
Document And Entity Information [Line Items]
Security 12b Title	Warrants to purchase Class A common stock
Trading Symbol	FATH.WS
Security Exchange Name	NYSE