MAPLE PLAIN, Minn. — (BUSINESS WIRE) — February 12, 2021 — Proto Labs, Inc. (NYSE: PRLB), a leading online and technology-enabled, quick-turn on-demand manufacturer, today announced financial results for the fourth quarter and full year ended December 31, 2020.
Fourth Quarter 2020 Highlights include:
- Revenue for the fourth quarter of 2020 was $105.2 million, representing a 2.1 percent decline compared to revenue of $107.5 million in the third quarter of 2020.
- EBITDA margin was 19.1 percent of revenue in the fourth quarter of 2020, compared to 24.4 percent in the third quarter of 2020.
- Adjusted EBITDA margin was 23.0 percent of revenue in the fourth quarter of 2020, compared to 27.9 percent in the third quarter of 2020. See “Non-GAAP Financial Measures” below.
- Net income for the fourth quarter of 2020 was $9.6 million, or $0.36 per diluted share.
- Non-GAAP net income was $13.5 million, or $0.50 per diluted share. See “Non-GAAP Financial Measures” below.
“Protolabs responded very well in the face of unforeseen challenges driven by the emergence of the global pandemic and the ensuing substantial decline in global economic activity during 2020. As an organization, we prioritized the health of our employees, while continuing to serve our customers and advance our long-term business opportunities. As a result, we further enhanced our leadership in the digital manufacturing space,” said Vicki Holt, President and Chief Executive Officer.
“2020 showcased the adaptability of our workforce and our ability to further expand and improve our digital model,” said Rob Bodor, Vice President and General Manager of the Americas and incoming President and Chief Executive Officer. “There is tremendous opportunity ahead of us, and we have clear strategic objectives for 2021 and beyond: create a world-class customer experience, expand our digital manufacturing offer, and further invest in our employees. With the successful go-live of Protolabs 2.0 and the addition of 3D Hubs, we are uniquely positioned to capitalize on that opportunity. I look forward to partnering with all employees to drive the long-term success of Protolabs.”
Full Year 2020 Highlights include:
- 2020 revenue of $434.4 million, compared to $458.7 million in 2019.
- Protolabs served 40,267 product developers during the year.
- Gross margin was 50.1 percent of revenue in 2020, compared to 51.3 percent in 2019.
- EBITDA margin was 21.7 percent of revenue in 2020, compared to 24.0 percent in 2019.
- Adjusted EBITDA margin was 24.8 percent of revenue in 2020, compared to 26.5 percent in 2019. See “Non-GAAP Financial Measures” below.
- Net income for 2020 was $50.9 million, or $1.89 per diluted share.
- Non-GAAP net income was $63.6 million, or $2.36 per diluted share.
- The company generated $107.0 million in cash from operations in 2020.
- Cash and investments balance was $221.0 million at December 31, 2020.
“2020 was the most difficult backdrop our business has ever faced, yet our digital manufacturing model continued its strong cash flow generation, allowing us to proceed with investments to support the long-term growth of the business, while maintaining our financial strength and flexibility,” added John Way, Chief Financial Officer.
Non-GAAP Financial Measures
The company has included non-GAAP revenue growth that excludes the impact of changes in foreign currency exchange rates (collectively, “non-GAAP revenue growth”). 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, unrealized (gain) loss on foreign currency, and transaction costs (collectively, “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, amortization expense, and transaction costs (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, unrealized (gain) loss on foreign currency, and transaction costs (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, non-GAAP operating margin, non-GAAP revenue growth and Adjusted 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 fourth quarter and full year 2020 financial results today, February 12, 2021 at 8:30 a.m. EST. 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. EST start time. No participant code is required. A simultaneous webcast of the call will be available via the investor relations section of the Protolabs website and the following link: https://edge.media-server.com/mmc/p/7ayaedkz. 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 leading source for digital manufacturing services. The technology-enabled company produces custom components in as fast as 1 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 manufacturing costs, and enables supply chain agility 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) | ||||||
| December 31, |
|
December 31, |
||||
| 2020 |
|
2019 |
||||
| (Unaudited) |
|
|
||||
| Assets | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ 127,603 |
$ 125,225 |
||||
| Short-term marketable securities | 34,088 |
35,437 |
||||
| Accounts receivable, net | 57,877 |
57,450 |
||||
| Inventory | 10,862 |
10,075 |
||||
| Income taxes receivable | 540 |
- |
||||
| Prepaid expenses and other current assets | 11,032 |
8,232 |
||||
| Total current assets | 242,002 |
236,419 |
||||
| Property and equipment, net | 282,666 |
263,712 |
||||
| Goodwill | 128,752 |
128,752 |
||||
| Other intangible assets, net | 14,350 |
17,369 |
||||
| Long-term marketable securities | 59,357 |
12,960 |
||||
| Operating lease assets | 9,855 |
11,425 |
||||
| Finance lease assets | 2,396 |
- |
||||
| Other long-term assets | 4,826 |
3,030 |
||||
| Total assets | $ 744,204 |
$ 673,667 |
||||
| Liabilities and shareholders' equity | ||||||
| Current liabilities | ||||||
| Accounts payable | $ 18,248 |
$ 16,804 |
||||
| Accrued compensation | 11,989 |
15,058 |
||||
| Accrued liabilities and other | 16,193 |
11,057 |
||||
| Current operating lease liabilities | 3,272 |
3,340 |
||||
| Current finance lease liabilities | 552 |
- |
||||
| Income taxes payable | - |
1,322 |
||||
| Total current liabilities | 50,254 |
47,581 |
||||
| Long-term operating lease liabilities | 7,586 |
8,565 |
||||
| Long-term finance lease liabilities | 1,919 |
- |
||||
| Long-term deferred tax liabilities | 33,854 |
26,283 |
||||
| Other long-term liabilities | 6,235 |
5,448 |
||||
| Shareholders' equity | 644,356 |
585,790 |
||||
| Total liabilities and shareholders' equity | $ 744,204 |
$ 673,667 |
||||
| Proto Labs, Inc. | ||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||
| (In thousands, except share and per share amounts) | ||||||||||
| (Unaudited) | ||||||||||
| Three Months Ended |
|
Year Ended |
||||||||
| December 31, |
|
December 31, |
||||||||
| 2020 |
2019 |
|
2020 |
2019 |
||||||
| Revenue | ||||||||||
| Injection Molding | $ 52,065 |
$ 51,480 |
$ 217,992 |
$ 217,415 |
||||||
| CNC Machining | 31,827 |
38,494 |
131,587 |
155,473 |
||||||
| 3D Printing | 16,024 |
15,708 |
62,502 |
61,352 |
||||||
| Sheet Metal | 4,532 |
5,223 |
18,838 |
21,000 |
||||||
| Other | 760 |
984 |
3,476 |
3,488 |
||||||
| Total revenue | 105,208 |
111,889 |
434,395 |
458,728 |
||||||
| Cost of revenue | 52,580 |
55,311 |
216,568 |
223,438 |
||||||
| Gross profit | 52,628 |
56,578 |
217,827 |
235,290 |
||||||
| Operating expenses | ||||||||||
| Marketing and sales | 17,488 |
17,510 |
69,309 |
72,976 |
||||||
| Research and development | 11,390 |
8,151 |
36,940 |
32,692 |
||||||
| General and administrative | 12,759 |
11,355 |
51,742 |
49,766 |
||||||
| Total operating expenses | 41,637 |
37,016 |
157,991 |
155,434 |
||||||
| Income from operations | 10,991 |
19,562 |
59,836 |
79,856 |
||||||
| Other income, net | 560 |
(229) |
3,109 |
1,337 |
||||||
| Income before income taxes | 11,551 |
19,333 |
62,945 |
81,193 |
||||||
| Provision for income taxes | 1,972 |
4,147 |
12,078 |
17,538 |
||||||
| Net income | $ 9,579 |
$ 15,186 |
$ 50,867 |
$ 63,655 |
||||||
| Net income per share: | ||||||||||
| Basic | $ 0.36 |
$ 0.57 |
$ 1.90 |
$ 2.37 |
||||||
| Diluted | $ 0.36 |
$ 0.56 |
$ 1.89 |
$ 2.35 |
||||||
| Shares used to compute net income per share: | ||||||||||
| Basic | 26,775,279 |
26,777,536 |
26,737,425 |
26,866,985 |
||||||
| Diluted | 26,976,582 |
26,945,927 |
26,896,357 |
27,049,423 |
||||||
| Proto Labs, Inc. | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| Year Ended |
||||||||
| December 31, |
||||||||
| 2020 |
|
2019 |
||||||
| Operating activities | ||||||||
| Net income | $ 50,867 |
$ 63,655 |
||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 32,594 |
30,864 |
||||||
| Stock-based compensation expense | 14,673 |
10,781 |
||||||
| Deferred taxes | 7,577 |
6,106 |
||||||
| Amortization of held-to-maturity securities | 415 |
5 |
||||||
| Other | (336) |
391 |
||||||
| Changes in operating assets and liabilities | 1,179 |
4,250 |
||||||
| Net cash provided by operating activities | 106,969 |
116,052 |
||||||
| Investing activities | ||||||||
| Purchases of property, equipment and other capital assets | (47,010) |
(62,230) |
||||||
| Purchases of other assets and investments | (3,000) |
(4,000) |
||||||
| Purchases of marketable securities | (113,200) |
(46,403) |
||||||
| Proceeds from maturities of marketable securities | 67,737 |
68,330 |
||||||
| Net cash used in investing activities | (95,473) |
(44,303) |
||||||
| Financing activities | ||||||||
| Principal repayments of finance lease obligations | (154) |
- |
||||||
| Proceeds from exercises of stock options | 7,557 |
4,391 |
||||||
| Purchases of shares withheld for tax obligations | (3,443) |
(2,487) |
||||||
| Repurchases of common stock | (14,686) |
(33,521) |
||||||
| Net cash used in financing activities | (10,726) |
(31,617) |
||||||
| Effect of exchange rate changes on cash and cash equivalents | 1,608 |
47 |
||||||
| Net increase in cash and cash equivalents | 2,378 |
40,179 |
||||||
| Cash and cash equivalents, beginning of period | 125,225 |
85,046 |
||||||
| Cash and cash equivalents, end of period | $ 127,603 |
$ 125,225 |
||||||
| 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 |
|
Year Ended |
||||||||||||||||
| December 31, |
|
December 31, |
||||||||||||||||
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
||||||
| Non-GAAP net income, adjusted for stock-based compensation expense, | ||||||||||||||||||
| amortization expense, unrealized (gain) loss on foreign currency and | ||||||||||||||||||
| transaction costs | ||||||||||||||||||
| GAAP net income | $ |
9,579 |
|
$ |
15,186 |
|
$ |
50,867 |
|
$ |
63,655 |
|
||||||
| Add back: | ||||||||||||||||||
| Stock-based compensation expense |
|
4,056 |
|
|
1,043 |
|
|
14,673 |
|
|
10,781 |
|
||||||
| Amortization expense |
|
754 |
|
|
889 |
|
|
3,016 |
|
|
3,482 |
|
||||||
| Unrealized (gain) loss on foreign currency |
|
(353 |
) |
|
286 |
|
|
(1,373 |
) |
|
677 |
|
||||||
| Transaction costs |
|
427 |
|
|
- |
|
|
427 |
|
|
- |
|
||||||
| Total adjustments 1 |
|
4,884 |
|
|
2,218 |
|
|
16,743 |
|
|
14,940 |
|
||||||
| Income tax benefits on adjustments 2 |
|
(1,013 |
) |
|
(350 |
) |
|
(4,043 |
) |
|
(3,225 |
) |
||||||
| Non-GAAP net income | $ |
13,450 |
|
$ |
17,054 |
|
$ |
63,567 |
|
$ |
75,370 |
|
||||||
| Non-GAAP net income per share: | ||||||||||||||||||
| Basic | $ |
0.50 |
|
$ |
0.64 |
|
$ |
2.38 |
|
$ |
2.81 |
|
||||||
| Diluted | $ |
0.50 |
|
$ |
0.63 |
|
$ |
2.36 |
|
$ |
2.79 |
|
||||||
| |
|
|
|
|||||||||||||||
| Shares used to compute non-GAAP net income per share: | ||||||||||||||||||
| Basic |
|
26,775,279 |
|
|
26,777,536 |
|
|
26,737,425 |
|
|
26,866,985 |
|
||||||
| Diluted |
|
26,976,582 |
|
|
26,945,927 |
|
|
26,896,357 |
|
|
27,049,423 |
|
||||||
| 1 Stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and transaction costs were included in the following GAAP consolidated statement of operations categories: | ||||||||||||||||||
| Three Months Ended |
|
Year Ended |
||||||||||||||||
| December 31, |
|
December 31, |
||||||||||||||||
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
||||||
| Cost of revenue | $ |
1,032 |
|
$ |
933 |
|
$ |
3,820 |
|
$ |
3,335 |
|
||||||
| Marketing and sales |
|
888 |
|
|
708 |
|
|
3,121 |
|
|
2,631 |
|
||||||
| Research and development |
|
675 |
|
|
365 |
|
|
2,441 |
|
|
1,851 |
|
||||||
| General and administrative |
|
2,642 |
|
|
(74 |
) |
|
8,734 |
|
|
6,446 |
|
||||||
| Total operating expenses |
|
4,205 |
|
|
999 |
|
|
14,296 |
|
|
10,928 |
|
||||||
| Other income, net |
|
(353 |
) |
|
286 |
|
|
(1,373 |
) |
|
677 |
|
||||||
| Total adjustments | $ |
4,884 |
|
$ |
2,218 |
|
$ |
16,743 |
|
$ |
14,940 |
|
||||||
| 2 For the three-month and year-ended periods ended December 31, 2020 and 2019, 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 |
|
Year Ended |
||||||||||||||||
| December 31, |
|
December 31, |
||||||||||||||||
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
||||||
| Revenue | $ |
105,208 |
|
$ |
111,889 |
|
$ |
434,395 |
|
$ |
458,728 |
|
||||||
| Income from operations |
|
10,991 |
|
|
19,562 |
|
|
59,836 |
|
|
79,856 |
|
||||||
| GAAP operating margin |
|
10.4 |
% |
|
17.5 |
% |
|
13.8 |
% |
|
17.4 |
% |
||||||
| Add back: | ||||||||||||||||||
| Stock-based compensation expense |
|
4,056 |
|
|
1,043 |
|
|
14,673 |
|
|
10,781 |
|
||||||
| Amortization expense |
|
754 |
|
|
889 |
|
|
3,016 |
|
|
3,482 |
|
||||||
| Transaction costs |
|
427 |
|
|
- |
|
|
427 |
|
|
- |
|
||||||
| Total adjustments |
|
5,237 |
|
|
1,932 |
|
|
18,116 |
|
|
14,263 |
|
||||||
| Non-GAAP income from operations | $ |
16,228 |
|
$ |
21,494 |
|
$ |
77,952 |
|
$ |
94,119 |
|
||||||
| Non-GAAP operating margin |
|
15.4 |
% |
|
19.2 |
% |
|
17.9 |
% |
|
20.5 |
% |
||||||
| Proto Labs, Inc. | ||||||||||||||||||
| Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| Three Months Ended |
|
Year Ended |
||||||||||||||||
| December 31, |
|
December 31, |
||||||||||||||||
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
||||||
| GAAP net income | $ |
9,579 |
|
$ |
15,186 |
|
$ |
50,867 |
|
$ |
63,655 |
|
||||||
| Amortization expense |
|
754 |
|
|
889 |
|
|
3,016 |
|
|
3,482 |
|
||||||
| Depreciation expense |
|
7,949 |
|
|
7,317 |
|
|
29,578 |
|
|
27,383 |
|
||||||
| Interest income, net |
|
(149 |
) |
|
(560 |
) |
|
(1,332 |
) |
|
(2,095 |
) |
||||||
| Tax expense |
|
1,972 |
|
|
4,147 |
|
|
12,078 |
|
|
17,538 |
|
||||||
| EBITDA |
|
20,105 |
|
|
26,979 |
|
|
94,207 |
|
|
109,963 |
|
||||||
| Add back: | ||||||||||||||||||
| Stock-based compensation expense |
|
4,056 |
|
|
1,043 |
|
|
14,673 |
|
|
10,781 |
|
||||||
| Unrealized (gain) loss on foreign currency |
|
(353 |
) |
|
286 |
|
|
(1,373 |
) |
|
677 |
|
||||||
| Transaction costs |
|
427 |
|
|
- |
|
|
427 |
|
|
- |
|
||||||
| Total adjustments |
|
4,130 |
|
|
1,329 |
|
|
13,727 |
|
|
11,458 |
|
||||||
| Adjusted EBITDA | $ |
24,235 |
|
$ |
28,308 |
|
$ |
107,934 |
|
$ |
121,421 |
|
||||||
| Proto Labs, Inc. | ||||||||||||||||||||||
| Comparison of GAAP to Non-GAAP Revenue Growth | ||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
|
Three Months Ended
|
|
|
Three Months Ended
|
|
% |
|
% Change
|
|||||||||||||||
| GAAP |
|
Adjustments 1 |
|
Non-GAAP |
|
|
GAAP |
|
Change 2 |
|
Currencies 3 |
|||||||||||
| Revenues | ||||||||||||||||||||||
| United States | $ |
83,201 |
$ |
- |
|
$ |
83,201 |
$ |
88,329 |
(5.8 |
%) |
(5.8 |
%) |
|||||||||
| Europe |
|
18,383 |
|
(955 |
) |
|
17,428 |
|
19,889 |
(7.6 |
%) |
(12.4 |
%) |
|||||||||
| Japan |
|
3,624 |
|
(145 |
) |
|
3,479 |
|
3,671 |
(1.3 |
%) |
(5.2 |
%) |
|||||||||
| Total Revenue | $ |
105,208 |
$ |
(1,100 |
) |
$ |
104,108 |
$ |
111,889 |
(6.0 |
%) |
(7.0 |
%) |
|||||||||
| Year Ended
December 31, 2020 |
Year Ended
December 31, 2019 |
% | % Change
Constant |
|||||||||||||||||||
| GAAP | Adjustments 1 | Non-GAAP | GAAP | Change 2 |
Currencies 3 |
|||||||||||||||||
| Revenues | ||||||||||||||||||||||
| United States | $ |
345,708 |
$ |
- |
|
$ |
345,708 |
$ |
360,205 |
(4.0 |
%) |
(4.0 |
%) |
|||||||||
| Europe |
|
74,796 |
|
(718 |
) |
|
74,078 |
|
82,805 |
(9.7 |
%) |
(10.5 |
%) |
|||||||||
| Japan |
|
13,891 |
|
(298 |
) |
|
13,593 |
|
15,718 |
(11.6 |
%) |
(13.5 |
%) |
|||||||||
| Total Revenue | $ |
434,395 |
$ |
(1,016 |
) |
$ |
433,379 |
$ |
458,728 |
(5.3 |
%) |
(5.5 |
%) |
|||||||||
| 1 Revenue growth for the three-month and year-ended periods ended December 31, 2020 has been recalculated using 2019 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 growth for the three-month and year-ended periods ended December 31, 2019 to GAAP revenue growth for the three-month and year-ended periods ended December 31, 2020. | ||||||||||||||||||||||
| 3 This column presents the percentage change from GAAP revenue for the three-month and year-ended periods ended December 31, 2019 to non-GAAP revenue for the three-month and year-ended periods ended December 31, 2020 (as recalculated using the foreign currency exchange rates in effect during the three-month and year-ended periods ended December 31, 2019) in order to provide a constant currency comparison. | ||||||||||||||||||||||
| Proto Labs, Inc. | ||||||||
| Product Developer Information | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended |
|
Year Ended |
||||||
| December 31, |
|
December 31, |
||||||
| 2020 |
|
2019 |
|
2020 |
|
2019 |
||
| Unique product developers and engineers served | 18,157 |
20,595 |
40,267 |
47,774 |
||||
