Sigma Labs Reports Fourth Quarter and Full Year 2021 Financial Results
Management to Host Conference Call Today at 4:30 p.m. ET
SANTA FE, NM / ACCESSWIRE / March 24, 2022 / Sigma Labs, Inc. (NASDAQ:SGLB) ("Sigma Labs"), a leading developer of quality assurance software to the commercial 3D printing industry, has reported its financial and operational results for the fourth quarter and full year ended December 31, 2021.
Key Operational Highlights
- Revenues increased 105% to $1.7 million for the full year of 2021 as compared to $0.8 million for the full year of 2020 due to increased PrintRite3D® unit sales. Gross margin for the full year of 2021 was 66% compared to gross margin of 27% for the full year 2020.
- Increased sales and distribution channels, including a worldwide OEM agreement with Aconity3D, and expanded U.S. federal government market coverage with the appointment of Phillips Federal, a Division of Phillips Corporation, as the company's exclusive reseller to the United States federal government.
- In partnership with Materialise (NASDAQ:MTLS), a leading provider of additive manufacturing (AM) software and services, developed what Sigma believes to be a breakthrough technology to enhance the scalability of metal AM applications. The new platform combines the Materialise Control Platform and Sigma Labs' PrintRite3D® sensor technology to allow users to identify and correct metal build issues in real-time.
- Announced an evolution in Sigma Labs' business model that will enable distribution at scale for a software only solution through a flexible OEM model, and subscription-based pricing to lower the barrier of entry for customers with multi-printer factories.
Management Commentary
"The fourth quarter of 2021 was highlighted by multiple strategic partnerships and agreements to expand our depth and global reach as a company," said Mark K. Ruport, CEO of Sigma Labs. "These new partnerships were the culmination of a milestone year at Sigma in 2021 in which we doubled revenues, increased margins, strengthened our balance sheet and positioned the company's technology and strategy to capture market share with our first mover advantage," he added.
Mr. Ruport continued, "Most recently with Phillips Federal, we combined to offer a scalable quality assurance solution that delivers an agnostic quality monitoring and analytics solution to standardize qualification across government installations, unify various technologies and accelerate readiness, quality, scale, and supply chain options for the U.S. government.
"Our new collaboration with long-term partner Materialise has resulted in a technology platform that delivers an industry-first ability to identify and address process and quality issues in real time. We believe the combination of the Materialise Control Platform with Sigma's real-time melt pool monitoring and analytics software has created a significant breakthrough in the additive manufacturing industry," continued Mr. Ruport.
Change in Business Model and Strategy
In January 2022 the Company announced a strategic shift in its business model to accelerate adoption of its technology in additive manufacturing production by setting the standard for in-situ quality monitoring and analytics. These included:
- Lowering the barriers of entry for end users by adding monthly subscription pricing, which is expected to have an impact on near-term revenue growth, while allowing for faster adoption and expansion by end users in addition to more predictable and profitable revenue streams.
- Deploying an innovative multi-tiered OEM program designed to leverage the Company's intellectual property across the spectrum of OEMs, including established OEMs, and well-funded new entrants that are designing the next generation of printers.
- Creating out of the box end-user applications in conjunction with customers and standards groups that the Company believes will move PrintRite3D out of R&D and into production.
- Expanding the Company's partner ecosystem with Additive software companies to optimize the end-to-end additive manufacturing process.
Jacob Brunsberg, Sigma's President and COO noted, "Looking ahead, 2022 presents an exciting opportunity for Sigma to continue to move closer to our customers, further enabling our growth trajectory. We believe the continued migration to our software only model will not only deliver more value to our customers but will also increase shareholder value through greater adoption of an increasing margin product.
"Moreover, 2022 is off to a strong start as continued advances in our technology platform are coinciding with our increasing participation at upcoming industry events such as the Additive Manufacturing Users Group Conference (AMUG) in April, where we will jointly with our new collaboration partner AMFG, present details of an optimized AM solution that increases quality and efficiency while decreasing the costs of serial production. Also, during the second quarter, we will be presenting at the RAPID + TCT Conference in Detroit and the AM Industry Summit in Long Beach, where we will display our solutions and connect with existing and potential partners. I look forward to providing additional updates in the months to come on our progress," Brunsberg concluded.
Fourth Quarter and Full Year 2021 Financial Results
Revenue for the full year of 2021 totaled $1.7 million of which $0.35 million, or 21% was earned in the fourth quarter. This compares to revenues of $0.8 million for the full year of 2020, of which $0.2 million was earned in the fourth quarter. The growth was driven by increased PrintRite3D unit sales, including the Company's first multi-unit sale in the third quarter.
Gross profit for the full year of 2021 $1.1 million, of which the fourth quarter contributed $0.2 million, compared to gross profit for the full year of 2020 of $0.2 million, of which the fourth quarter contributed negative $22,000. Gross margin for the full year of 2021 was 66% compared to gross margin of 27% for the full year 2020. The gross margin improvement was primarily driven by lowering certain component costs combined with engineering enhancements and efficiencies.
Total operating expenses for 2021 were $9.6 million, of which $2.6 million were incurred in the fourth quarter. Total operating expenses for 2020 totaled $5.9 million, of which $1.5 million were incurred in the fourth quarter. The increase in operating expenses was mainly attributable to additional employee headcount, R&D expenses and organizational costs.
Net loss applicable to common shareholders for the full year of 2021 was $7.5 million, or $(0.76) per share, as compared to a net loss applicable to common shareholders of $7.0 million, or $(1.83) per share, in 2020. Net loss in the fourth quarter of 2021 totaled $2.4 million, compared to a net loss of $1.6 million, in the fourth quarter of 2020.
Cash totaled $11.5 million at December 31, 2021, as compared to $3.7 million at December 31, 2020. Cash used in operating activities for the year ended December 31, 2021 totaled $6.3 million, compared to $4.8 million in the year ended December 31, 2020. Cash used in operating activities totaled $1.5 million for the fourth quarter of 2021, as compared to $1.1 million in the fourth quarter of 2020. Cash provided by financing activities in fiscal 2021 increased to $14.4 million from $8.7 million in fiscal 2020.
Fourth Quarter and Full Year 2021 Results Conference Call
Sigma Labs CEO Mark Ruport, President and COO Jacob Brunsberg, and CFO Frank Orzechowski will host the conference call, followed by a question-and-answer period.
To access the call, please use the following information:
Date: Thursday, March 24, 2022
Time: 4:30 p.m. Eastern time, 1:30 p.m. Pacific time
Toll-free dial-in number: 1-877-407-9039
International dial-in number: 1-201-689-8470
Conference ID: 13727865
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact MZ Group at 1-949-491-8235.
The conference call will be broadcast live and available for replay at https://themediaframe.com/mediaframe/webcast.html?webcastid=g0hPQj8H and via the investor relations section of the Company's website at www.sigmalabsinc.com.
A replay of the conference call will be available after 7:30 p.m. Eastern time through April 7, 2022.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13727865
About Sigma Labs
Sigma Labs Inc. is a leading provider of in-process quality assurance (IPQA™) software to the additive manufacturing industry. Sigma Labs specializes in the development and commercialization of real-time monitoring and analytics solutions known as PrintRite3D® for 3D metal and polymer advanced manufacturing technologies. PrintRite3D detects and classifies defects and anomalies real-time during the manufacturing process, enabling significant cost-savings and production efficiencies. Sigma Labs believes its software product will be a major catalyst for the acceleration and adoption of industrial 3D printing. For more information, please visit www.sigmalabsinc.com.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Statements preceded by, followed by or that otherwise include the words "believe," "anticipate," "estimate," "expect," "intend," "plan," "project," "prospects," "outlook," and similar words or expressions, or future or conditional verbs such as "will," "should," "would," "may," and "could" are generally forward-looking in nature and not historical facts. These forward-looking statements involve known and unknown risks, uncertainties and other factors. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are risks relating to, among other things, market and other conditions, Sigma Labs' business and financial condition, the extent of the market's acceptance of PrintRite3D, Sigma Labs' new monthly subscription pricing model, and of Sigma Labs' business relationships with companies such as Aconity3D and Materialise, and the Company's ability to develop new business relationships with OEMs, the ability of 3D metal printing to move from prototyping to full production, Sigma Labs' ability to satisfy its capital needs through increasing its revenue and obtaining additional financing, and the impact of COVID-19, general economic, industry, political or geopolitical conditions in the United States or internationally. The Company disclaims any intention to, and undertakes no obligation to, revise any forward-looking statements, whether as a result of new information, a future event, or otherwise. For additional risks and uncertainties that could impact the Company's forward-looking statements, please see disclosures contained in Sigma Labs' public filings with the SEC, including the "Risk Factors" in Sigma Labs' Annual Report on Form 10-K, and which may be viewed at www.sec.gov.
Contacts:
Investor Relations Contact:
Chris Tyson
Executive Vice President
MZ Group - MZ North America
949-491-8235
[email protected]
www.mzgroup.us
Company Contact:
Steven Gersten
Sigma Internal IR
813-334-9745
[email protected]
Sigma Labs, Inc.
Condensed Balance Sheets
| December 31, 2021 | December 31, 2020 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash | $ | 11,447,047 | $ | 3,700,814 | ||||
Accounts Receivable, net | 412,192 | 331,562 | ||||||
Inventory | 710,080 | 659,651 | ||||||
Prepaid Assets | 114,278 | 90,735 | ||||||
Total Current Assets | 12,683,597 | 4,782,762 | ||||||
Other Assets: | ||||||||
Property and Equipment, net | 232,282 | 138,626 | ||||||
Intangible Assets, net | 925,111 | 753,122 | ||||||
Long-Term Prepaid Asset | - | 26,000 | ||||||
Total Other Assets | 1,157,393 | 917,748 | ||||||
TOTAL ASSETS | $ | 13,840,990 | $ | 5,700,510 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts Payable | $ | 206,442 | $ | 128,937 | ||||
Deferred Revenue | 148,855 | 77,957 | ||||||
Accrued Expenses | 625,942 | 243,815 | ||||||
Total Current Liabilities | 981,239 | 450,709 | ||||||
Long-Term Liabilities | ||||||||
Stock Appreciation Rights | - | 48,341 | ||||||
CARES Act Deferred Payroll Taxes | - | 37,728 | ||||||
Total Long-Term Liabilities | - | 86,069 | ||||||
TOTAL LIABILITIES | 981,239 | 536,778 | ||||||
Stockholders' Equity | ||||||||
Preferred Stock, $0.001 par; 10,000,000 shares authorized; 465 and 715 shares issued and outstanding, respectively | 1 | 1 | ||||||
Common Stock, $0.001 par; 24,000,000 authorized; 10,498,802 and 5,995,320 shares issued and outstanding, respectively | 10,499 | 5,995 | ||||||
Additional Paid-In Capital | 53,442,431 | 38,262,744 | ||||||
Accumulated Deficit | (40,593,180 | ) | (33,105,008 | ) | ||||
Total Stockholders' Equity | 12,859,751 | 5,163,732 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 13,840,990 | $ | 5,700,510 | ||||
Sigma Labs, Inc.
Condensed Statements of Operations
| Year Ended | ||||||||
| December 31, 2021 | December 31, 2020 | |||||||
REVENUES | $ | 1,651,765 | $ | 807,488 | ||||
COST OF REVENUE | 559,965 | 591,957 | ||||||
GROSS PROFIT (LOSS) | 1,091,800 | 215,531 | ||||||
EXPENSES: | ||||||||
Salaries & Benefits | 4,286,368 | 2,622,162 | ||||||
Stock-Based Compensation | 1,066,455 | 596,842 | ||||||
Operations and R&D Costs | 890,553 | 351,404 | ||||||
Investor, Public Relations and Marketing | 503,823 | 408,717 | ||||||
Organizational Costs | 726,147 | 451,982 | ||||||
Legal & Professional Service Fees | 915,530 | 676,142 | ||||||
Office Expenses | 734,386 | 416,580 | ||||||
Depreciation & Amortization | 94,105 | 105,175 | ||||||
Other Operating Expenses | 353,818 | 285,295 | ||||||
Total Operating Expenses | 9,571,185 | 5,914,299 | ||||||
LOSS FROM OPERATIONS | (8,479,385 | ) | (5,698,768 | ) | ||||
OTHER INCOME (EXPENSE) | ||||||||
Interest Income | 13,866 | 1,058 | ||||||
State Incentives | - | 151,657 | ||||||
Exchange Rate Gain (Loss) | (263 | ) | (1,677 | ) | ||||
Other Income | 1,092,441 | 361,700 | ||||||
Interest Expense | (11,264 | ) | (13,908 | ) | ||||
Loss on Dissolution of Joint Venture | - | (201 | ) | |||||
Total Other Income (Expense) | 1,094,780 | 498,629 | ||||||
LOSS BEFORE PROVISION FOR INCOME TAXES | (7,384,605 | ) | (5,200,139 | ) | ||||
Provision for Income Taxes | - | - | ||||||
Net Loss | $ | (7,384,605 | ) | $ | (5,200,139 | ) | ||
Preferred Dividends | 103,567 | 1,809,275 | ||||||
Net Loss applicable to Common Stockholders | $ | (7,488,172 | ) | $ | (7,009,414 | ) | ||
Net Loss per Common Share - Basic and Diluted | $ | (0.76 | ) | $ | (1.83 | ) | ||
Weighted Average Number of Shares Outstanding - Basic and Diluted | 9,828,541 | 3,829,716 | ||||||
Sigma Labs, Inc.
Condensed Statements of Cash Flows
| Year Ended | ||||||||
| December 31, 2021 | December 31, 2020 | |||||||
OPERATING ACTIVITIES | ||||||||
Net Loss | $ | (7,384,605 | ) | $ | (5,200,139 | ) | ||
Adjustments to reconcile Net Loss to Net Cash used in operating activities: | ||||||||
Noncash Expenses: | ||||||||
Depreciation and Amortization | 94,105 | 105,175 | ||||||
Gain on Derivative Liability | (1,092,441 | ) | - | |||||
Stock Based Compensation - Employees | 1,066,455 | 596,842 | ||||||
Stock Based Compensation - Third Party Services | 163,083 | 102,775 | ||||||
Stock Based Compensation - Directors | 538,585 | 239,883 | ||||||
Change in assets and liabilities: | ||||||||
Accounts Receivable | (80,630 | ) | (276,022 | ) | ||||
Inventory | (50,429 | ) | (60,932 | ) | ||||
Prepaid Assets | 2,457 | 134,991 | ||||||
Accounts Payable | 77,505 | (598,177 | ) | |||||
Deferred Revenue | 70,898 | (61,490 | ) | |||||
Accrued Expenses | 382,127 | 121,157 | ||||||
Long-term portion of Stock Appreciation Rights | (48,341 | ) | 48,341 | |||||
Long Term portion of Deferred Payroll Taxes under the CARES Act | (37,728 | ) | 37,728 | |||||
NET CASH USED IN OPERATING ACTIVITIES | (6,298,959 | ) | (4,809,868 | ) | ||||
INVESTING ACTIVITIES | ||||||||
Purchase of Property and Equipment | (182,522 | ) | (88,074 | ) | ||||
Purchase of Intangible Assets | (177,228 | ) | (210,785 | ) | ||||
Dissolution of Joint Venture | - | 500 | ||||||
NET CASH USED IN INVESTING ACTIVITIES | (359,750 | ) | (298,359 | ) | ||||
FINANCING ACTIVITIES | ||||||||
Gross Proceeds from Public and Private Issuances of Securities | 14,869,899 | 3,600,000 | ||||||
Less Offering Costs | (1,600,967 | ) | (820,228 | ) | ||||
Payment of Note Payable | - | (50,000 | ) | |||||
Proceeds from Exercise of Warrants | 1,136,010 | 5,992,350 | ||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 14,404,942 | 8,722,122 | ||||||
NET CHANGE IN CASH FOR PERIOD | 7,746,232 | 3,613,895 | ||||||
CASH AT BEGINNING OF PERIOD | 3,700,814 | 86,919 | ||||||
CASH AT END OF PERIOD | $ | 11,447,047 | $ | 3,700,814 | ||||
Supplemental Disclosures: | ||||||||
Noncash investing and financing activities disclosure: | ||||||||
Issuance of Common Shares for Preferred Dividends | $ | 103,567 | $ | 1,809,275 | ||||
Disclosure of Cash Received for: | ||||||||
Issuance of Preferred Stock for Exercise of Preferred Warrants | $ | - | $ | 5,992,350 | ||||
Other noncash operating activities disclosure: | ||||||||
Issuance of Securities for Services | $ | 701,668 | $ | 342,658 | ||||
Disclosure of cash paid for: | ||||||||
Interest | $ | 11,264 | $ | 13,908 | ||||
Income Taxes | $ | - | $ | - | ||||
SOURCE: Sigma Labs, Inc.
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