Proto Labs Inc.
10/28/2021 | Press release | Distributed by Public on 10/28/2021 04:10
Record Revenue of $125.3 million in the Third Quarter of 2021, an increase of 17% year-over-year - Form 8-K
Record Revenue of $125.3 million in the Third Quarter of 2021, an increase of 17% year-over-year
MAPLE PLAIN, Minn. - October 28, 2021 - Proto Labs, Inc. (NYSE: PRLB), the world's leading provider of digital manufacturing services, today announced financial results for the third quarter ended September 30, 2021.
Third Quarter 2021 Highlights include:
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● |
Revenue for the third quarter of 2021 was $125.3 million, representing a 16.6 percent increase compared to revenue of $107.5 million in the third quarter of 2020. |
|
● |
Hubs generated $8.8 million of revenue in the third quarter. |
|
● |
Net income for the third quarter of 2021 was $4.8 million, or $0.17 per diluted share. |
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● |
Non-GAAP net income was $9.7 million, or $0.35 per diluted share. See "Non-GAAP Financial Measures" below. |
"We achieved record revenue in the third quarter amidst a difficult backdrop of global supply chain issues and labor and materials constraints. During the quarter, we also received external recognition of our best-in-class digital manufacturing capabilities as the World Economic Forum announced our induction into their Global Lighthouse Network, recognizing our industry leading efforts to implement Fourth Industrial Revolution technologies," noted Rob Bodor, President and Chief Executive Officer. "We continue to focus on the long-term market opportunities and invest in the business to serve the evolving needs of our customers."
Additional Third Quarter 2021 Highlights include:
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● |
Protolabs served 23,457 unique product developers during the quarter, representing a 24.8 percent increase over the third quarter of 2020. |
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● |
Gross margin in the third quarter of 2021 was 44.1 percent of revenue; Non-GAAP gross margin was 44.9 percent of revenue. See "Non-GAAP Financial Measures" below. |
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● |
EBITDA margin was 13.7 percent of revenue in the third quarter of 2021; adjusted EBITDA margin was 17.1 percent of revenue in the third quarter of 2021. See "Non-GAAP Financial Measures" below. |
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● |
Cash and investments balance was $83.9 million as of September 30, 2021. |
"Our earnings in the third quarter were impacted by post pandemic-related cost inflation, as well as continued investments in our systems and product offering in order to maintain our position as the largest and fastest provider of digital manufacturing services," added John Way, Chief Financial Officer. "We have a very strong balance sheet with $84 million in cash and investments and no debt, allowing us to continue to invest in future growth and return capital to our shareholders."
Non-GAAP Financial Measures
The company has included non-GAAP revenue growth that excludes the impact of changes in foreign currency exchange rates and revenue earned from our acquisition of Hubs (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 third quarter 2021 financial results and fourth quarter 2021 outlook today, October 28, 2021 at 8:30 a.m. EDT. 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. EDT start time. No participant code is required. A simultaneous webcast of the call and accompanying presentation will be available via the investor relations section of the Protolabs website and the following link: https://edge.media-server.com/mmc/p/kff4bprd. 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 provider of digital manufacturing services. The e-commerce-based company offers injection molding, CNC machining, 3D printing, and sheet metal fabrication to product developers, engineers, and supply chain teams across the globe. Protolabs serves customers using in-house production capabilities that bring unprecedented speed in tandem with Hubs, a Protolabs Company, which serves customers through its network of premium manufacturing partners. Together, they help companies bring new ideas to market with the fastest and most comprehensive digital manufacturing service in the world. 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.
Source: Proto Labs, Inc.
Investor Relations Contact
Protolabs
Dan Schumacher, 763-479-7240
Vice President of Investor Relations and FP&A
Media Contact
Protolabs
Brent Renneke, 763-479-7704
PR & Media Strategist
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Proto Labs, Inc. |
|
Condensed Consolidated Balance Sheets |
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(In thousands) |
|
September 30, |
December 31, |
|||||||
|
2021 |
2020 |
|||||||
|
(Unaudited) |
||||||||
|
Assets |
||||||||
|
Current assets |
||||||||
|
Cash and cash equivalents |
$ | 47,802 | $ | 127,603 | ||||
|
Short-term marketable securities |
16,542 | 34,088 | ||||||
|
Accounts receivable, net |
85,629 | 57,877 | ||||||
|
Inventory |
9,813 | 10,862 | ||||||
|
Income taxes receivable |
1,766 | 540 | ||||||
|
Prepaid expenses and other current assets |
10,571 | 11,032 | ||||||
|
Total current assets |
172,123 | 242,002 | ||||||
|
Property and equipment, net |
283,019 | 282,666 | ||||||
|
Goodwill |
404,240 | 128,752 | ||||||
|
Other intangible assets, net |
39,816 | 14,350 | ||||||
|
Long-term marketable securities |
19,557 | 59,357 | ||||||
|
Operating lease assets |
5,197 | 9,855 | ||||||
|
Finance lease assets |
2,022 | 2,396 | ||||||
|
Other long-term assets |
4,337 | 4,826 | ||||||
|
Total assets |
$ | 930,311 | $ | 744,204 | ||||
|
Liabilities and shareholders' equity |
||||||||
|
Current liabilities |
||||||||
|
Accounts payable |
$ | 22,735 | $ | 18,248 | ||||
|
Accrued compensation |
15,269 | 11,989 | ||||||
|
Accrued liabilities and other |
12,636 | 16,193 | ||||||
|
Current contingent consideration |
2,506 | - | ||||||
|
Current operating lease liabilities |
2,362 | 3,272 | ||||||
|
Current finance lease liabilities |
555 | 552 | ||||||
|
Total current liabilities |
56,063 | 50,254 | ||||||
|
Long-term contingent consideration |
2,294 | - | ||||||
|
Long-term operating lease liabilities |
2,792 | 7,586 | ||||||
|
Long-term finance lease liabilities |
1,498 | 1,919 | ||||||
|
Long-term deferred tax liabilities |
36,331 | 33,854 | ||||||
|
Other long-term liabilities |
6,712 | 6,235 | ||||||
|
Shareholders' equity |
824,621 | 644,356 | ||||||
|
Total liabilities and shareholders' equity |
$ | 930,311 | $ | 744,204 |
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Proto Labs, Inc. |
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Condensed Consolidated Statements of Operations |
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(In thousands, except share and per share amounts) |
|
(Unaudited) |
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||
|
September 30, |
September 30, |
|||||||||||||||
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2021 |
2020 |
2021 |
2020 |
|||||||||||||
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Revenue |
||||||||||||||||
|
Injection Molding |
$ | 57,685 | $ | 53,257 | $ | 172,212 | $ | 165,927 | ||||||||
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CNC Machining |
43,658 | 33,115 | 121,953 | 99,760 | ||||||||||||
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3D Printing |
18,589 | 16,294 | 53,994 | 46,478 | ||||||||||||
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Sheet Metal |
4,854 | 3,988 | 14,790 | 14,306 | ||||||||||||
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Other |
556 | 850 | 1,567 | 2,716 | ||||||||||||
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Total revenue |
125,342 | 107,504 | 364,516 | 329,187 | ||||||||||||
|
Cost of revenue |
70,018 | 52,861 | 197,237 | 163,988 | ||||||||||||
|
Gross profit |
55,324 | 54,643 | 167,279 | 165,199 | ||||||||||||
|
Operating expenses |
||||||||||||||||
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Marketing and sales |
21,422 | 16,705 | 61,946 | 51,821 | ||||||||||||
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Research and development |
10,614 | 7,915 | 33,855 | 25,550 | ||||||||||||
|
General and administrative |
16,361 | 12,354 | 44,186 | 38,983 | ||||||||||||
|
Total operating expenses |
48,397 | 36,974 | 139,987 | 116,354 | ||||||||||||
|
Income from operations |
6,927 | 17,669 | 27,292 | 48,845 | ||||||||||||
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Other income (expense), net |
136 | 728 | (40 | ) | 2,549 | |||||||||||
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Income before income taxes |
7,063 | 18,397 | 27,252 | 51,394 | ||||||||||||
|
Provision for income taxes |
2,228 | 3,700 | 5,790 | 10,106 | ||||||||||||
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Net income |
$ | 4,835 | $ | 14,697 | $ | 21,462 | $ | 41,288 | ||||||||
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Net income per share: |
||||||||||||||||
|
Basic |
$ | 0.17 | $ | 0.55 | $ | 0.78 | $ | 1.54 | ||||||||
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Diluted |
$ | 0.17 | $ | 0.55 | $ | 0.77 | $ | 1.54 | ||||||||
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Shares used to compute net income per share: |
||||||||||||||||
|
Basic |
27,713,229 | 26,736,709 | 27,638,611 | 26,724,715 | ||||||||||||
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Diluted |
27,730,105 | 26,886,433 | 27,707,784 | 26,861,647 |
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Proto Labs, Inc. |
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Condensed Consolidated Statements of Cash Flows |
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(In thousands) |
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(Unaudited) |
|
Nine Months Ended |
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|
September 30, |
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|
2021 |
2020 |
|||||||
|
Operating activities |
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|
Net income |
$ | 21,462 | $ | 41,288 | ||||
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Adjustments to reconcile net income to net cash provided by operating activities: |
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|
Depreciation and amortization |
30,231 | 23,891 | ||||||
|
Stock-based compensation expense |
15,539 | 10,617 | ||||||
|
Deferred taxes |
(139 | ) | 6,578 | |||||
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Amortization of marketable securities |
374 | 202 | ||||||
|
Realized gain on available-for-sale securities |
(72 | ) | - | |||||
|
Changes in fair value of contingent consideration |
(8,513 | ) | - | |||||
|
Other |
140 | (865 | ) | |||||
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Changes in operating assets and liabilities |
(26,797 | ) | 664 | |||||
|
Net cash provided by operating activities |
32,225 | 82,375 | ||||||
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Investing activities |
||||||||
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Purchases of property, equipment and other capital assets |
(27,956 | ) | (40,489 | ) | ||||
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Cash used for acquisitions, net of cash acquired |
(127,413 | ) | - | |||||
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Purchases of other assets and investments |
- | (3,000 | ) | |||||
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Purchases of marketable securities |
(15,159 | ) | (90,596 | ) | ||||
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Proceeds from sales of marketable securities |
57,089 | - | ||||||
|
Proceeds from maturities of marketable securities |
15,114 | 56,428 | ||||||
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Net cash used in investing activities |
(98,325 | ) | (77,657 | ) | ||||
|
Financing activities |
||||||||
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Proceeds from exercises of stock options and other |
3,838 | 5,674 | ||||||
|
Purchases of shares withheld for tax obligations |
(4,209 | ) | (3,367 | ) | ||||
|
Repurchases of common stock |
(13,036 | ) | (14,686 | ) | ||||
|
Principal repayments of finance lease obligations |
(413 | ) | - | |||||
|
Net cash used in financing activities |
(13,820 | ) | (12,379 | ) | ||||
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Effect of exchange rate changes on cash and cash equivalents |
119 | 690 | ||||||
|
Net decrease in cash and cash equivalents |
(79,801 | ) | (6,971 | ) | ||||
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Cash and cash equivalents, beginning of period |
127,603 | 125,225 | ||||||
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Cash and cash equivalents, end of period |
$ | 47,802 | $ | 118,254 |
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Proto Labs, Inc. |
|
Reconciliation of GAAP to Non-GAAP Net Income per Share |
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(In thousands, except share and per share amounts) |
|
(Unaudited) |
|
Three Months Ended |
Nine Months Ended |
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|
September 30, |
September 30, |
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|
2021 |
2020 |
2021 |
2020 |
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|
Non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and transaction costs |
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GAAP net income |
$ | 4,835 | $ | 14,697 | $ | 21,462 | $ | 41,288 | ||||||||
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Add back: |
||||||||||||||||
|
Stock-based compensation expense |
4,978 | 3,945 | 15,539 | 10,617 | ||||||||||||
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Amortization expense |
1,568 | 754 | 4,601 | 2,262 | ||||||||||||
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Unrealized (gain) loss on foreign currency |
121 | (84 | ) | 341 | (1,020 | ) | ||||||||||
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Transaction costs 1 |
(730 | ) | - | (5,870 | ) | - | ||||||||||
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Total adjustments 2 |
5,937 | 4,615 | 14,611 | 11,859 | ||||||||||||
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Income tax benefits on adjustments 3 |
(1,063 | ) | (1,368 | ) | (4,639 | ) | (3,030 | ) | ||||||||
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Non-GAAP net income |
$ | 9,709 | $ | 17,944 | $ | 31,434 | $ | 50,117 | ||||||||
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Non-GAAP net income per share: |
||||||||||||||||
|
Basic |
$ | 0.35 | $ | 0.67 | $ | 1.14 | $ | 1.88 | ||||||||
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Diluted |
$ | 0.35 | $ | 0.67 | $ | 1.13 | $ | 1.87 | ||||||||
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Shares used to compute non-GAAP net income per share: |
||||||||||||||||
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Basic |
27,713,229 | 26,736,709 | 27,638,611 | 26,724,715 | ||||||||||||
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Diluted |
27,730,105 | 26,886,433 | 27,707,784 | 26,861,647 |
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1 Transaction costs include direct costs incurred in our acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations. |
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2 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: |
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Three Months Ended |
Nine Months Ended |
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|
September 30, |
September 30, |
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|
2021 |
2020 |
2021 |
2020 |
|||||||||||||
|
Cost of revenue |
$ | 986 | $ | 989 | $ | 2,974 | $ | 2,788 | ||||||||
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Marketing and sales |
1,059 | 865 | 2,841 | 2,233 | ||||||||||||
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Research and development |
776 | 638 | 2,144 | 1,766 | ||||||||||||
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General and administrative |
2,995 | 2,207 | 6,311 | 6,092 | ||||||||||||
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Total operating expenses |
4,830 | 3,710 | 11,296 | 10,091 | ||||||||||||
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Other (income) loss, net |
121 | (84 | ) | 341 | (1,020 | ) | ||||||||||
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Total adjustments |
$ | 5,937 | $ | 4,615 | $ | 14,611 | $ | 11,859 |
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3 For the three and nine-month periods ended September 30, 2021 and 2020, 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. |
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Proto Labs, Inc. |
|
Reconciliation of GAAP to Non-GAAP Operating Margin |
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(In thousands) |
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(Unaudited) |
|
Three Months Ended |
Nine Months Ended |
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|
September 30, |
September 30, |
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|
2021 |
2020 |
2021 |
2020 |
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Revenue |
$ | 125,342 | $ | 107,504 | $ | 364,516 | $ | 329,187 | ||||||||
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Income from operations |
6,927 | 17,669 | 27,292 | 48,845 | ||||||||||||
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GAAP operating margin |
5.5 | % | 16.4 | % | 7.5 | % | 14.8 | % | ||||||||
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Add back: |
||||||||||||||||
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Stock-based compensation expense |
4,978 | 3,945 | 15,539 | 10,617 | ||||||||||||
|
Amortization expense |
1,568 | 754 | 4,601 | 2,262 | ||||||||||||
|
Transaction costs 1 |
(730 | ) | - | (5,870 | ) | - | ||||||||||
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Total adjustments |
5,816 | 4,699 | 14,270 | 12,879 | ||||||||||||
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Non-GAAP income from operations |
$ | 12,743 | $ | 22,368 | $ | 41,562 | $ | 61,724 | ||||||||
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Non-GAAP operating margin |
10.2 | % | 20.8 | % | 11.4 | % | 18.8 | % |
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1 Transaction costs include direct costs incurred in our acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations. |
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Proto Labs, Inc. |
|
Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA |
|
(In thousands) |
|
(Unaudited) |
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||
|
September 30, |
September 30, |
|||||||||||||||
|
2021 |
2020 |
2021 |
2020 |
|||||||||||||
|
GAAP net income |
$ | 4,835 | $ | 14,697 | $ | 21,462 | $ | 41,288 | ||||||||
|
Amortization expense |
1,568 | 754 | 4,601 | 2,262 | ||||||||||||
|
Depreciation expense |
8,536 | 7,282 | 25,630 | 21,629 | ||||||||||||
|
Interest income, net |
(55 | ) | (255 | ) | (207 | ) | (1,183 | ) | ||||||||
|
Tax expense |
2,228 | 3,700 | 5,790 | 10,106 | ||||||||||||
|
EBITDA |
17,112 | 26,178 | 57,276 | 74,102 | ||||||||||||
|
Add back: |
||||||||||||||||
|
Stock-based compensation expense |
4,978 | 3,945 | 15,539 | 10,617 | ||||||||||||
|
Unrealized (gain) loss on foreign currency |
121 | (84 | ) | 341 | (1,020 | ) | ||||||||||
|
Transaction costs 1 |
(730 | ) | - | (5,870 | ) | - | ||||||||||
|
Total adjustments |
4,369 | 3,861 | 10,010 | 9,597 | ||||||||||||
|
Adjusted EBITDA |
$ | 21,481 | $ | 30,039 | $ | 67,286 | $ | 83,699 |
|
1 Transaction costs include direct costs incurred in our acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations. |
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Proto Labs, Inc. |
|
Comparison of GAAP to Non-GAAP Revenue Growth |
|
(In thousands) |
|
(Unaudited) |
|
Three Months Ended |
Three Months Ended |
% |
||||||||||||||||||||||||||
|
GAAP |
Foreign Currency1 |
Hubs Acquisition2 |
Non-GAAP |
GAAP |
Change3 |
% Change Organic4 |
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Revenues |
||||||||||||||||||||||||||||
|
United States |
$ | 100,127 | $ | - | $ | (4,729 | ) | $ | 95,398 | $ | 85,608 | 17.0 |
% |
11.4 |
% |
|||||||||||||
|
Europe |
22,155 | (513 | ) | (4,022 | ) | 17,620 | 18,897 | 17.2 | (6.8 | ) | ||||||||||||||||||
|
Japan |
3,060 | 114 | - | 3,174 | 2,999 | 2.0 | 5.8 | |||||||||||||||||||||
|
Total Revenue |
$ | 125,342 | $ | (399 | ) | $ | (8,751 | ) | $ | 116,192 | $ | 107,504 | 16.6 |
% |
8.1 |
% |
|
Nine Months Ended |
Nine Months Ended |
% |
||||||||||||||||||||||||||
|
GAAP |
Foreign Currency1 |
Hubs Acquisition2 |
Non-GAAP |
GAAP |
Change3 |
% Change Organic4 |
||||||||||||||||||||||
|
Revenues |
||||||||||||||||||||||||||||
|
United States |
$ | 286,524 | $ | - | $ | (12,512 | ) | $ | 274,012 | $ | 262,507 | 9.1 |
% |
4.4 |
% |
|||||||||||||
|
Europe |
68,259 | (3,986 | ) | (10,942 | ) | 53,331 | 56,413 | 21.0 | (5.5 | ) | ||||||||||||||||||
|
Japan |
9,733 | 83 | - | 9,816 | 10,267 | (5.2 | ) | (4.4 | ) | |||||||||||||||||||
|
Total Revenue |
$ | 364,516 | $ | (3,903 | ) | $ | (23,454 | ) | $ | 337,159 | $ | 329,187 | 10.7 |
% |
2.4 |
% |
|
1 Revenue for the three and nine-month periods ended September 30, 2021 has been recalculated using 2020 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 Revenue for the three and nine-month periods ended September 30, 2021 has been recalculated to exclude revenue earned from our acquisition of Hubs, Inc. to provide information useful in evaluating the underlying business trends excluding the impact of acquisitions. |
|
|
3 This column presents the percentage change from GAAP revenue for the three and nine-month periods ended September 30, 2020 to GAAP revenue for the three and nine-month periods ended September 30, 2021. |
|
|
4 This column presents the percentage change from GAAP revenue for the three and nine-month periods ended September 30, 2020 to non-GAAP revenue for the three and nine-month periods ended September 30, 2021 (as recalculated using the foreign currency exchange rates in effect during the three- and nine-month periods ended September 30, 2020, excluding the impact of Hubs, Inc. acquisition) in order to provide a constant-currency comparison. |
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Proto Labs, Inc. |
|
Product Developer Information |
|
(Unaudited) |
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||
|
September 30, |
September 30, |
|||||||||||||||
|
2021 |
2020 |
2021 |
2020 |
|||||||||||||
|
Unique product developers and engineers served |
23,457 | 18,796 | 49,300 | 37,504 |