Revenue of $113.5 million, an increase of 5%
over Q1 2018
Unique Product Developers served increased
9% over Q1 2018
Proto Labs, Inc. (NYSE: PRLB), a leading online and
technology-enabled, quick-turn, on-demand manufacturer, today
announced financial results for the first quarter ended March 31,
2019.
First Quarter 2019 Highlights include:
- Revenue for the first quarter of 2019
was $113.5 million, representing a 5.3 percent increase over
revenue of $107.7 million for the first quarter of 2018.
- The number of unique product developers
and engineers served through our web-based customer interface
totaled 20,573 in the first quarter of 2019, an increase of 9.3
percent over the first quarter of 2018.
- Net income for the first quarter of
2019 was $15.5 million, or $0.57 per diluted share.
- Non-GAAP net income was $18.8 million,
or $0.69 per diluted share. See “Non-GAAP Financial Measures”
below.
“Protolabs reported another quarter of top-line growth with
record revenue in our 3D printing and injection molding services,”
said Vicki Holt, President and Chief Executive Officer. “We had
strong growth in Europe and Japan; however, we had some challenges
with our sheet metal service and expanded CNC offering acquired
with the Rapid Manufacturing transaction.”
Additional First Quarter 2019 highlights include:
- Gross margin was 51.9 percent of
revenue for the first quarter of 2019, compared with 53.7 percent
for the first quarter of 2018.
- GAAP operating margin was 17.1 percent
of revenue for the first quarter of 2019, compared to 20.2 percent
for the first quarter of 2018.
- Non-GAAP operating margin was 20.6
percent of revenue for the first quarter of 2019, compared to 23.0
percent for the first quarter of 2018. See “Non-GAAP Financial
Measures” below.
- Adjusted EBITDA was $29.8 million, or
26.3% of revenue, for the first quarter of 2019.
- The Company repurchased $17.3 million,
or 157,716 shares, of common stock.
- Cash and investments balance was $138.7
million at March 31, 2019.
- Recognized by the National Association
of Manufacturers for outstanding achievement in engineering and
production technology.
- Announced partnership with Wohlers and
Associates to offer a new immersive course on Design for Additive
Manufacturing.
“In the first quarter of 2019, the headwinds described in our Q1
outlook were greater than anticipated, including a decline in our
acquired services,” said John Way, Chief Financial Officer. “The
organization is focused on actions to improve the performance of
this business, delivering differentiated services to our
customers.”
Non-GAAP Financial Measures
The company has included non-GAAP revenue growth that excludes
the impact of changes in foreign currency exchange rates.
Management believes these metrics are useful in evaluating the
underlying business trends and ongoing operating performance of the
company.
The company has included earnings before interest, taxes,
depreciation and amortization (“EBITDA”) and EBITDA, adjusted for
stock-based compensation expense and unrealized loss on foreign
currency (collectively, “EBITDA and Adjusted EBITDA”), in this
press release to provide investors with additional information
regarding the company’s financial results.
The company has included non-GAAP operating margin, adjusted for
stock-based compensation expense and amortization expense
(collectively, “non-GAAP operating margin”), in this press release
to provide investors with additional information regarding the
company’s financial results.
The company has included non-GAAP net income, adjusted for
stock-based compensation expense, amortization expense, and
unrealized loss on foreign currency (collectively, “non-GAAP net
income”), in this press release to provide investors with
additional information regarding the company’s financial
results.
The company has provided below reconciliations of GAAP to
non-GAAP net income, operating margin, revenue growth and EBITDA,
the most directly comparable measures calculated and presented in
accordance with GAAP. These non-GAAP measures are used by the
company’s management and board of directors to understand and
evaluate operating performance and trends and provide useful
measures for period-to-period comparisons of the company’s
business. Accordingly, the company believes that these non-GAAP
measures provide useful information to investors and others in
understanding and evaluating operating results in the same manner
as our management and board of directors.
Conference Call
The company has scheduled a conference call to discuss its first
quarter 2019 financial results and second quarter outlook today,
April 25, 2019 at 8:30 a.m. ET. To access the call in the U.S.
please dial 877-709-8150 or outside the U.S. dial 201-689-8354 at
least five minutes prior to the 8:30 a.m. start time. No
participant code is required. A presentation containing information
on the company’s first quarter financial results and second quarter
outlook will be available prior to the call. A simultaneous webcast
of the call and slide presentation will be available via the
investor relations section of the Protolabs website and the
following link: https://edge.media-server.com/m6/p/25uxfqee. A
replay will be available for 14 days following the call on the
investor relations section of the Protolabs website.
About Protolabs
Protolabs is the world's fastest digital manufacturing source
for rapid prototyping and on-demand production. The
technology-enabled company produces custom parts and assemblies in
as fast as one day with automated 3D printing, CNC machining, sheet
metal fabrication, and injection molding processes. Its digital
approach to manufacturing enables accelerated time to market,
reduces development and production costs, and minimizes risk
throughout the product life cycle. Visit protolabs.com for more
information.
Forward-Looking Statements
Statements contained in this press release regarding matters
that are not historical or current facts are “forward-looking
statements” within the meaning of The Private Securities Litigation
Reform Act of 1995. These statements involve known and unknown
risks, uncertainties and other factors which may cause the results
of Protolabs to be materially different than those expressed or
implied in such statements. Certain of these risk factors and
others are described in the “Risk Factors” section within reports
filed with the SEC. Other unknown or unpredictable factors also
could have material adverse effects on Protolabs’ future results.
The forward-looking statements included in this press release are
made only as of the date hereof. Protolabs cannot guarantee future
results, levels of activity, performance or achievements.
Accordingly, you should not place undue reliance on these
forward-looking statements. Finally, Protolabs expressly disclaims
any intent or obligation to update any forward-looking statements
to reflect subsequent events or circumstances.
Proto Labs,
Inc. Condensed Consolidated Balance Sheets (In
thousands) March 31,
December 31, 2019 2018
(Unaudited) Assets Current assets Cash
and cash equivalents $ 85,350 $ 85,046 Short-term marketable
securities 35,045 46,750 Accounts receivable, net 61,535 59,155
Inventory 9,356 10,087 Income taxes receivable 2,852 5,757 Prepaid
expenses and other current assets 8,613 8,567 Total
current assets 202,751 215,362 Property and equipment, net
234,211 228,001 Goodwill 128,752 128,752 Other intangible assets,
net 18,979 19,850 Long-term marketable securities 18,262 23,579
Operating lease assets 11,965 - Other long-term assets 3,676
3,441 Total assets $ 618,596 $ 618,985
Liabilities
and shareholders' equity Current liabilities Accounts payable $
16,672 $ 17,411 Accrued compensation 10,129 18,130 Accrued
liabilities and other 11,027 16,702 Current operating lease
liabilities 3,021 - Income taxes payable 594 491
Total current liabilities 41,443 52,734 Long-term operating
lease liabilities 9,107 - Long-term deferred tax liabilities 20,549
20,162 Other long-term liabilities 4,702 4,592 Shareholders'
equity 542,795 541,497 Total liabilities and
shareholders' equity $ 618,596 $ 618,985
Proto Labs, Inc. Condensed
Consolidated Statements of Operations (In thousands, except
share and per share amounts) (Unaudited) Three
Months Ended March 31,
2019
2018
Revenue Injection Molding $ 55,311 $ 51,343 CNC Machining 37,872
36,731 3D Printing 14,480 12,325 Sheet Metal 5,025 6,241 Other
764 1,105 Total revenue
113,452 107,745 Cost of revenue
54,592
49,837 Gross profit 58,860 57,908
Operating expenses Marketing and sales 18,577 16,572 Research and
development 8,013 6,665 General and administrative
12,822 12,943 Total operating
expenses
39,412 36,180
Income from operations 19,448 21,728 Other income, net
213 178 Income before income taxes
19,661 21,906 Provision for income taxes
4,150
3,855 Net income
$
15,511 $ 18,051 Net
income per share: Basic
$ 0.58
$ 0.67 Diluted
$
0.57 $ 0.66 Shares
used to compute net income per share: Basic 26,963,366 26,879,388
Diluted 27,177,039 27,197,099
Proto Labs,
Inc. Condensed Consolidated Statements of Cash Flows
(In thousands) (Unaudited) Three Months
Ended March 31, 2019 2018 Operating
activities Net income $ 15,511 $ 18,051 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation and amortization 7,439 6,259 Stock-based compensation
expense 3,040 2,307 Deferred taxes 379 612 Amortization of
held-to-maturity securities 16 163 Other 236 106 Changes in
operating assets and liabilities
(8,619
) (1,353 ) Net cash
provided by operating activities
18,002
26,145 Investing
activities Purchases of property, equipment and other capital
assets (12,735 ) (25,513 ) Cash used for acquisitions, net of cash
acquired - (90 ) Purchases of other assets and investments (4,000 )
- Purchases of marketable securities - (3,389 ) Proceeds from
maturities of marketable securities
17,006
13,551 Net cash provided by (used
in) investing activities
271
(15,441 ) Financing
activities Payments on debt - (5,000 ) Proceeds from exercises
of stock options and other 174 2,880 Purchases of shares withheld
for tax obligations (594 ) (628 ) Repurchases of common stock
(17,309 ) -
Net cash used in financing activities
(17,729 ) (2,748
) Effect of exchange rate changes on cash and cash
equivalents
(240 )
432 Net increase in cash and cash
equivalents 304 8,388
Cash and cash equivalents, beginning
of period 85,046
36,707 Cash and cash equivalents, end of
period $ 85,350 $
45,095
Proto Labs, Inc. Reconciliation of GAAP to
Non-GAAP Net Income per Share (In thousands, except share
and per share amounts) (Unaudited) Three
Months Ended March 31,
2019
2018
Non-GAAP net income, adjusted for
stock-based compensation expense, amortization expense and
unrealized loss on foreign currency
GAAP net income $ 15,511 $ 18,051 Add back: Stock-based
compensation expense 3,040 2,307 Amortization expense 871 764
Unrealized loss on foreign currency
247
156 Total adjustments 1 4,158 3,227
Income tax benefits on adjustments 2
(919
) (2,043 ) Non-GAAP
net income
$ 18,750 $
19,235 Non-GAAP net income per
share: Basic
$ 0.70 $
0.72 Diluted
$ 0.69
$ 0.71 Shares used
to compute non-GAAP net income per share: Basic 26,963,366
26,879,388 Diluted 27,177,039 27,197,099
1 Stock-based compensation expense,
amortization expense and unrealized loss on foreign currency were
included in the following GAAP consolidated statement of operations
categories:
Three Months Ended March 31,
2019
2018
Cost of revenue $ 733 $ 287 Marketing and sales 549
377 Research and development 423 314 General and administrative
2,206 2,093
Total operating expenses 3,178 2,784 Other income, net
247 156 Total
adjustments
$ 4,158 $
3,227 2 For the three-month periods
ended March 31, 2019 and 2018, income tax effects were calculated
using the effective tax rate for the relevant jurisdictions. Our
non-GAAP tax rates differ from our GAAP tax rates due primarily to
the mix of activity incurred in domestic and foreign tax
jurisdictions and removing effective tax rate benefits from
stock-based compensation activity in the quarter.
Proto Labs, Inc.
Reconciliation of GAAP to Non-GAAP Operating Margin (In
thousands) (Unaudited) Three Months Ended
March 31,
2019
2018
Revenue $ 113,452 $ 107,745 Income from operations
19,448 21,728 GAAP
operating margin 17.1 % 20.2 % Add back: Stock-based compensation
expense 3,040 2,307 Amortization expense
871
764 Total adjustments 3,911 3,071
Non-GAAP income from operations
$ 23,359
$ 24,799 Non-GAAP operating
margin 20.6 % 23.0 %
Proto Labs, Inc.
Reconciliation of GAAP Net Income to EBITDA and Adjusted
EBITDA (In thousands) (Unaudited) Three
Months Ended March 31,
2019
2018
GAAP net income $ 15,511 $ 18,051 Amortization expense 871 764
Depreciation expense 6,568 5,495 Interest income, net (581 ) (266 )
Tax expense
4,150
3,855 EBITDA
26,519
27,899 Add back: Stock-based
compensation expense 3,040 2,307 Unrealized loss on foreign
currency
247 156
Total adjustments 3,287 2,463 Adjusted EBITDA
$
29,806 $ 30,362
Proto
Labs, Inc. Comparison of GAAP to Non-GAAP Revenue Growth
(In thousands) (Unaudited)
Three Months Ended
March 31, 2019
Three
MonthsEndedMarch 31,
2018
% % Change
Constant
GAAP
Adjustments1
Non-GAAP GAAP
Change2
Currencies3 Revenues United
States $ 87,811 $ - $ 87,811 $ 84,167 4.3 % 4.3 % Europe 21,254
1,634 22,888 19,945 6.6 % 14.8 % Japan
4,387
88 4,475
3,633
20.8
%
23.2
% Total Revenue
$ 113,452
$ 1,722 $
115,174 $ 107,745 5.3 % 6.9
%
1 Revenue for the three-month period ended
March 31, 2019 has been recalculated using 2018 foreign currency
exchange rates in effect during comparable periods to provide
information useful in evaluating the underlying business trends
excluding the impact of changes in foreign currency exchange rates.
2 This column presents the percentage change from GAAP revenue for
the three-month period ended March 31, 2018 to GAAP revenue for the
three-month period ended March 31, 2019. 3 This column presents the
percentage change from GAAP revenue for the three-month period
ended March 31, 2018 to non-GAAP revenue for the three-month period
ended March 31, 2019 (as recalculated using the foreign currency
exchange rates in effect during the three-month period ended March
31, 2018) in order to provide a constant-currency comparison.
Proto Labs, Inc.
Product Developer Information (Unaudited)
Three Months Ended March 31, 2019 2018
Unique product developers and engineers served
20,573
18,816
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190425005261/en/
Investor Relations Contact:ProtolabsDan Schumacher,
763-479-7240Director of Investor
Relationsdaniel.schumacher@protolabs.comorMedia
Contact:ProtolabsSarah Ekenberg, 763-479-7560Marketing Manager, PR
& Mediasarah.ekenberg@protolabs.com
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