Fathom Digital Manufacturing : First Quarter 2023 Presentation

Q1 2023 Financial Results

May 15, 2023

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Disclaimers

Forward-Looking Statements

Certain 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 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 presentation. 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. 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 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 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 presentation. 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 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 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.

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Q1 2023 Highlights

Expanded Company-Wide	Opened New Silicon Valley
Optimization Plan	Technology Center

Increased Financial

Flexibility

• Increased total expected cost savings to ~$19.5 million on annualized basis
• Realized $3.5 million in savings during Q1, bringing cumulative savings to $5.3 million
• Remaining $14.2 million of expected cost savings to be realized throughout remainder of 2023

• Advanced hub showcases latest innovations in manufacturing technologies, accelerating customer engagement
• Ensures continuous proximity to strategic customers in Bay area
• Evolve STEP technology delivered to new facility in February 2023 and is currently producing customer parts

• Amended credit agreement under favorable terms
• Net cash provided by operations totaled $0.5 million in Q1; Adj. EBITDA of $4.1 million above expectations
• Remain on track to generate positive free cash flow in FY 2023

Fathom's Q1 results reflect the strong execution of its expanded optimization plan, extending company's history of profitable Adjusted EBITDA and cash generation

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Q1 2023 Revenue

Q1 2023 Revenue ($ in thousands)

$40,541-13.7%

Q1 2023 Revenue by Product Line

$35,007

Q1 2022

Q1 2023

6.1% 10.2%

13.4%

29.7%

40.6%

Additive Manufacturing

Injection Molding

CNC Machining

Precision Sheet Metal

Other Revenue

• Q1 2023 revenue led by growth in CNC Machining of ~7%
• Production orders continue to be adversely affected by ongoing softness in macro environment
• New commercial activities focused on growing strategic accounts and fully leveraging broad on- demand platform continue to gain traction under new leadership

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Q1 2023 Adjusted EBITDA1

Q1 2023 Adjusted EBITDA ($ in thousands)

$6,178	-33.6%
	$4,100
Q1 2022	Q1 2023

• Q1 performance reflects impact of lower volume leverage, partially offset by cost savings to date from $19.5 million optimization plan
• Gross margin was 34.1%, up sequentially by 810 basis points
• SG&A as percentage of sales declined to 30.8% in Q1 2023
• Q1 2023 Adjusted EBITDA margin2 of 11.7% improved 380 basis points sequentially

1	Adjusted EBITDA is a non-GAAP financial measure. Reconciliation of GAAP net income (loss) to Adjusted EBITDA is included in the Appendix.	5
2	Adjusted EBITDA margin represents Adjusted EBITDA divided by total revenue.