Protolabs Reports First Quarter 2019 Financial Results

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 Months Ended March 31, 2018		%		% Change Constant
	GAAP		Adjustments ¹		Non-GAAP		GAAP		Change ²		Currencies ³
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

« Previous Page 1 | 2 | 3 Next Page »