Fathom Digital Manufacturing Corporation Class A

Thank you for your patience. The Fathom Digital Manufacturing Conference call will begin in approximately one minute. Hello and welcome everyone to the Fathom Digital Manufacturing Conference call. This call is being recorded and a replay will be available later today. After the company's presentation, there will be a Q&A session with instructions to follow at that time. I would now like to turn the call over to Michael Simonyi, Fathom's Director of Investor Relations. Michael, please go ahead.

Thank you, Lauren, and good morning, everyone. Welcome to Fathom's fourth quarter and full year 2021 earnings conference call. Before we begin, I'd like to mention that today's presentation and earnings press release are available on Fathom's website, at fathommfg.com, where you can also find links to our SEC filings along with other important information about our company. Turning to slide two, we note that this presentation contains forward-looking statements within the meaning of the Securities Exchange Act. We encourage you to read the risk factors contained in our filings with the SEC, become aware of the risks and uncertainties in our business, and understand that forward-looking statements are only estimates of future performance and should be taken as such. The forward-looking statements represent management's expectations only as of today, and the company disclaims any obligation to update them. On slide three, today's presentation includes non-GAAP financial measures to describe the way in which we manage and operate our business. We reconcile these measures to the most comparable GAAP measure, and you are encouraged to examine those reconciliations, which are found in the appendix to both the press release and the slide presentation. We also note Fathom has not yet completed its reporting process for the three and 12 months ended December 31st, 2021. Full financial statements for these periods will be filed on or before March 31st, 2022. Our preliminary unaudited results are based on Fathom's reasonable estimates and the information available at this time. With us today are Ryan Martin, Fathom's Chief Executive Officer, and Mark Frost, the Chief Financial Officer. I will now hand it over to Ryan.

Thanks, Michael, and welcome everyone to Fathom's first earnings conference call since becoming a publicly traded company in December. We're excited to be here today and have a full agenda as outlined on slide four. I will begin by providing a brief overview of Fathom. I will then provide a business update before turning the call over to Mark to discuss our results for the fourth quarter and full year 2021. Mark will also provide an overview on our strong capital position and outline our financial guidance for 2022. I will then provide some closing remarks before we open the call up for questions. Turning to slide five, Fathom's mission is to accelerate manufacturing innovation for the most product-driven companies in the world. We are an industry leader in on-demand digital manufacturing. with over 35 years of experience in providing enterprise level customers with integrated solutions across both additive manufacturing and advanced traditional manufacturing technologies. We do this by leveraging our 12 domestic manufacturing facilities as well as our domestic and international supply chain partners. We enable our customers to accelerate their product development and production manufacturing by giving them access to more than 25 different manufacturing processes. Fathom's comprehensive capabilities provide corporate customers with the ability to capitalize on their increasing adoption of industry 4.0 practices, including the digitization of manufacturing, further adoption of additive manufacturing, the reshoring of company supply chains. These evolving macro trends are shortening product life cycles, driven not only by higher consumer demands, but also by the advanced technologies that allow new products to be developed faster than ever before. At the same time, companies are taking steps to ensure their supply chains are more agile and resilient, giving the numerous constraints that have extended beyond the ongoing COVID pandemic. Whether it's support congestion challenges, severe weather disruptions, labor shortages, companies have had to rethink their supply chains, and COVID has only accelerated this transformation. And Fathom is uniquely poised to take full advantage of these secular tailwinds. We believe that we are the only at-scale end-to-end solution within this highly fragmented $25 billion market serving the low to mid-volume manufacturing. And we have uniquely positioned Fathom to meet the needs of some of the largest and most innovative product-driven companies in the world today. With our broad on-demand platform, we provide turnaround times in as little as 24 hours, combined with a unified digital approach, dedicated customer-facing engineers, design support and material expertise, our customers are able to iterate more efficiently in their development pipeline and ultimately get their products to market faster because of us. This helps the companies we work with to gain a competitive advantage over their competition as we become an extension of their R&D efforts and manufacturing teams. The application of our breadth of offering spans multiple industries, As we are proud to say, we work with many of the top 10 Fortune 500 tier customers within the aerospace, automotive, consumer, industrial, medical, and technology sectors. And as Mark will discuss in more detail later in the call, Fathom has an attractive financial profile with a history of profitability and cash generation. This is yet another core differentiator core differentiation of our company. We also have a leadership team with decades of combined experience and a track record of scaling high growth companies along with a stellar board comprised of a diverse group of business leaders with a track record of advising and driving innovation for some of the world's leading companies. Moving on to slide six, we will illustrate how Fathom is focused uniquely on the high margin rapid prototyping, and low to mid-volume production. We work with enterprise customers to help them develop their initial product, transforming their digital file into a physical product, utilizing our deep expertise in additive manufacturing, CNC machining, injection molding, and precision sheet metal fabrication and many more applications as well. Fathom is a service business and our service is manufacturing. Although you won't see a product in the market with Fathom's name on it, you are still interacting with hundreds if not thousands of products that we were directly impacted by our company. Whether it's the smartphone waking you up in the morning or the machine you maybe got your coffee from, the food that's in your fridge or the shoes you put on your feet, the car you drive or the plane you board, we are impacting all of those products and so many more. As I mentioned earlier in the call, We offer more than 25 different manufacturing processes across our 12 domestic manufacturing facilities. This allows us to produce anywhere from one to tens of thousands, and in some cases, hundreds of thousands of parts for certain customers. We're not producing the same part over and over again in a commoditized fashion. Instead, we focus on complex orders with high mix and low volume, which ultimately helps our customers accelerate the pace of their manufacturing innovation in a way that we believe no other company can replicate. And we do this at scale. Now turning to slide seven, we outline Fathom's differentiated strategy. Enterprise customers choose Fathom due to our focus on speed, adaptive technical responsiveness, flexible problem solving, our ability to handle quality, full service support, and comprehensive capabilities as I've outlined. We pull all of this together with a proprietary software suite that allows our customers to interact with us regarding quoting, project management, design, all the way through to production, acting as a key enablement tool for us. At Fathom, we serve at the inflection between traditional manufacturing and additive manufacturing to solve the complex challenges for some of the world's most product-driven companies, helping them to iterate faster and often shortening their development cycles from months down to days. We are a pioneer in the on-demand digital manufacturing space and an early adopter of both plastic and metal additive manufacturing. Importantly, we utilize our over three decades of manufacturing expertise and our technology agnostic approach to apply the best manufacturing process to deliver the most effective solution that achieves the desired outcome for our customer. This provides a differentiated customer experience during the process. We continue to adopt the latest technologies and materials that take hold in the evolving digital manufacturing market so that our customers can leverage them in a more efficient manner as opposed to trying to bring them all in-house. This allows our customers to consolidate their supply chain by sourcing through a unified supplier to meet their various needs. Our unique ability to essentially act as an ETF for the digital manufacturing market combined with our in-depth knowledge and insights into future trends, allows Fathom to serve as a trusted advisor for our customers. We have become an entrenched partner to some of the world's most innovative Fortune 500 companies, some of which are noted on the bottom of this slide. We have partnered with some of our top customers for over 15 years, working with them across multiple sites, and in many cases, we're developing hundreds of contacts within each of these companies providing highly reoccurring revenue streams for our business. On slide eight, we highlight some of our key business wins during the fourth quarter and year to date. The acceleration of our customer engagement is directly attributed to the ongoing execution of our strategy to both increase penetration among our existing customer base and expand through new enterprise customer relationships. Once we establish an existing relationship, we seek to broaden the number of customer contacts for each account using our automated software solution and commercial operations. This land and expand model has been very effective for Fathom, allowing us to leverage initial customer acquisition costs within these individual accounts and continue to deliver profitable growth. As you can see on this slide, this includes several multi-million dollar orders We continue to have success in expanding our share of wallet with blue chip customers and adding new corporate accounts as well. Also of note on this slide is the diversity of the end markets, which are largely high growth sectors across medical, electric vehicles, robotics, semiconductors, and others. We have an intense focus on accelerating the time to market for these customers and maintaining a more local and more agile supply chain for them. Turning now to slide nine, we provide our financial highlights for the fourth quarter. Fathom's unique go-to-market strategy, which combines our broad set of manufacturing capabilities and advanced software and deep technical expertise, allows us to adapt our manufacturing processes to our customers' specific needs. They do not need to sacrifice their design intent to match our capabilities. This has led to robust customer engagement that we have translated into positive financial results for our company. Our total orders in fourth quarter increased year over year by approximately 26%, to a record $49.1 million, further expanding our backlog of new business and increasing our visibility into future revenues. While Mark will review our financials in more detail, our reported revenue for the quarter totaled $44.3 million for a year-over-year increase of 133%, of which $6.9 million was organic and $18.3 million was through acquisition-related activity. We expect our record orders growth in Q4 to contribute to revenue throughout 2022. as shipments for new orders often extend beyond a quarter or two, depending on the size and order type. Also in Q4, we continue to deliver profitable growth with reported adjusted EBITDA increasing to 10.5 million, representing a margin of 23.8%. We believe our solid performance in Q4 reflects the strength of Fathom's unique business model and reinforces the strong fundamentals of our industry. As we continue to build upon our positive momentum, we remain focused on achieving greater market share for our additive and traditional manufacturing technologies among enterprise customers and continue to solve complex manufacturing challenges that exist throughout our large and fast-growing industry. With that, I will now turn the call over to Mark.