Proto Labs Reports Record Revenue for the First Quarter 2015
Quarterly Revenue Increases 27% Year over Year to
Highlights include:
-
Revenue for the first quarter of 2015 increased to a record
$58.5 million , 27 percent above revenue of$46.1 million in the first quarter of 2014, and an increase of 31 percent versus the prior year in constant currencies. -
Revenue from additive services (3D printing) through the FineLine
acquisition completed last April totaled
$4.5 million in the first quarter, a 79 percent increase compared to FineLine’s first quarter of 2014. - Revenue growth was driven by a 44 percent increase in the number of unique product developers and engineers served over the prior year period.
-
Net income for the first quarter of 2015 was
$10.5 million , or$0.40 per diluted share. Non-GAAP net income, excluding the after tax expense of stock compensation, amortization of intangibles, and non-cash unrealized foreign currency losses, was$11.9 million , or$0.45 per diluted share. See “Non-GAAP Financial Measure” below.
“We generated strong revenue growth in the first quarter, with growth on
a constant currency basis in all three of our geographies,” said
Additional Highlights include:
- Gross margin was 60.2 percent of revenue for the first quarter of 2015 compared with 63.0 percent during the same quarter last year and 59.9 percent in the fourth quarter of 2014. Contributing to the year over year decline was a lower gross margin on the additive business, representing approximately 110 basis points, and a 220 basis point impact from foreign currency exchange rates.
- GAAP operating margin was 27.1 percent of revenue during the first quarter of 2015 compared to 31.4 percent for the first quarter of 2014 and 26.2 percent in the fourth quarter of 2014.
-
Cash generated from operations during the first quarter totaled
$15.4 million . Cash, cash equivalents and investments totaled$137.2 million atMarch 31, 2015 .
“We remain focused on the growth initiatives we established for 2015. We
continue to invest in sales and marketing efforts, adding staff in
select areas, installing new sales and marketing automation software and
pursuing new approaches to expand awareness and drive sales. Expansion
of new materials and processes is proceeding on plan. We completed the
full launch of lathe-turned parts in
Non-GAAP Financial Measures
The company has included non-GAAP adjusted revenue growth that excludes the impact of changes in foreign currency exchange rates from total revenues in this press release to provide investors with additional information regarding the company’s financial results. Management believes this metric is useful in evaluating the underlying business trends and ongoing operating performance of the company.
The company has also included non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, and non-cash unrealized foreign currency activity (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 a reconciliation of non-GAAP net income to net income, the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP net income is used by the company’s management and board of directors to understand and evaluate operating performance and trends and provides a useful measure for period-to-period comparisons of the company’s business. Accordingly, the company believes that non-GAAP net income provides 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
financial results today,
About
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
Proto Labs, Inc. | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(In thousands) | ||||||||
|
||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 52,553 | $ | 43,329 | ||||
Short-term marketable securities | 29,055 | 30,706 | ||||||
Accounts receivable, net | 28,382 | 24,226 | ||||||
Inventory | 6,386 | 6,194 | ||||||
Other current assets | 4,836 | 3,889 | ||||||
Total current assets | 121,212 | 108,344 | ||||||
Property and equipment, net | 94,028 | 91,626 | ||||||
Long-term marketable securities | 55,594 | 54,318 | ||||||
Goodwill | 28,916 | 28,916 | ||||||
Other intangible assets, net | 3,896 | 4,083 | ||||||
Other long-term assets | 226 | 227 | ||||||
Total assets | $ | 303,872 | $ | 287,514 | ||||
Liabilities and shareholders' equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 8,566 | $ | 7,882 | ||||
Accrued compensation | 7,865 | 6,067 | ||||||
Accrued liabilities and other | 2,048 | 2,718 | ||||||
Income taxes payable | 3,958 | 1,953 | ||||||
Current portion of long-term debt obligations | 95 | 139 | ||||||
Total current liabilities | 22,532 | 18,759 | ||||||
Long-term deferred tax liabilities | 2,170 | 1,846 | ||||||
Long-term debt obligations |
- |
10 | ||||||
Other long-term liabilities | 1,522 | 1,360 | ||||||
Shareholders' equity | 277,648 | 265,539 | ||||||
Total liabilities and shareholders' equity | $ | 303,872 | $ | 287,514 | ||||
Proto Labs, Inc. | ||||||||||
Condensed Consolidated Statements of Operations | ||||||||||
(In thousands, except share and per share amounts) | ||||||||||
(Unaudited) | ||||||||||
Three Months Ended | ||||||||||
March 31, | ||||||||||
2015 |
2014 |
|||||||||
Revenue | ||||||||||
Protomold | $ | 37,618 | $ | 32,694 | ||||||
Firstcut | 16,370 | 13,380 | ||||||||
Fineline | 4,548 | - | ||||||||
Total revenue | 58,536 | 46,074 | ||||||||
Cost of revenue | 23,282 | 17,050 | ||||||||
Gross profit | 35,254 | 29,024 | ||||||||
Operating expenses | ||||||||||
Marketing and sales | 8,854 | 6,417 | ||||||||
Research and development | 4,314 | 3,456 | ||||||||
General and administrative | 6,245 | 4,703 | ||||||||
Total operating expenses | 19,413 | 14,576 | ||||||||
Income from operations | 15,841 | 14,448 | ||||||||
Other income (expense), net | (457 | ) | 103 | |||||||
Income before income taxes | 15,384 | 14,551 | ||||||||
Provision for income taxes | 4,931 | 4,449 | ||||||||
Net income | $ | 10,453 | $ | 10,102 | ||||||
Net income per share: | ||||||||||
Basic | $ | 0.40 | $ | 0.40 | ||||||
Diluted | $ | 0.40 | $ | 0.39 | ||||||
Shares used to compute net income per share: | ||||||||||
Basic | 25,850,274 | 25,573,851 | ||||||||
Diluted | 26,214,204 | 26,091,069 | ||||||||
Proto Labs, Inc. | |||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||
(In thousands) | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2015 | 2014 | ||||||||||
Operating activities | |||||||||||
Net income | $ | 10,453 | $ | 10,102 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 3,399 | 2,106 | |||||||||
Stock-based compensation expense | 1,342 | 998 | |||||||||
Deferred taxes | 343 | 107 | |||||||||
Excess tax benefit from stock-based compensation | (510 | ) | (897 | ) | |||||||
Amortization of held-to-maturity securities | 305 | 482 | |||||||||
Changes in operating assets and liabilities | 85 | 2,368 | |||||||||
Net cash provided by operating activities | 15,417 | 15,266 | |||||||||
Investing activities | |||||||||||
Purchases of property and equipment | (6,230 | ) | (9,892 | ) | |||||||
Purchases of marketable securities | (11,575 | ) | (32,385 | ) | |||||||
Proceeds from sales and maturities of marketable securities | 11,646 | 26,590 | |||||||||
Net cash used in investing activities | (6,159 | ) | (15,687 | ) | |||||||
Financing activities | |||||||||||
Payments on debt | (49 | ) | (50 | ) | |||||||
Acquisition-related contingent consideration | (1,000 | ) | - | ||||||||
Proceeds from exercises of stock options and other | 878 | 665 | |||||||||
Excess tax benefit from stock-based compensation | 510 | 897 | |||||||||
Net cash provided by financing activities | 339 | 1,512 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (373 | ) | 71 | ||||||||
Net increase in cash and cash equivalents | 9,224 | 1,162 | |||||||||
Cash and cash equivalents, beginning of period | 43,329 | 43,039 | |||||||||
Cash and cash equivalents, end of period | $ | 52,553 | $ | 44,201 | |||||||
Proto Labs, Inc. | |||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measure | |||||||||||
(In thousands, except share and per share amounts) | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2015 |
2014 |
||||||||||
Non-GAAP net income, adjusted for stock-based compensation expense, | |||||||||||
amortization expense and unrealized loss (gain) on foreign currency: | |||||||||||
GAAP net income | $ | 10,453 | $ | 10,102 | |||||||
Add back: Stock-based compensation expense | |||||||||||
Cost of revenue | 111 | 82 | |||||||||
Marketing and sales | 236 | 195 | |||||||||
Research and development | 294 | 215 | |||||||||
General and administrative | 701 | 506 | |||||||||
Total stock-based compensation expense |
1,342 | 998 | |||||||||
Income tax benefits on stock-based compensation expense | (406 | ) | (312 | ) | |||||||
Non-GAAP net income adjusted for stock-based compensation expense | 11,389 | 10,788 | |||||||||
Add back: Amortization expense | |||||||||||
General and administrative | 186 | - | |||||||||
Income tax benefits on amortization expense | (65 | ) | - | ||||||||
Non-GAAP net income adjusted for stock-based compensation and | |||||||||||
amortization expenses | 11,510 | 10,788 | |||||||||
Add back: Unrealized loss (gain) on foreign currency | |||||||||||
Other income (expense), net | 453 | (13 | ) | ||||||||
Income tax benefits on unrealized loss (gain) on foreign currency | (97 | ) | 4 | ||||||||
Non-GAAP net income adjusted for stock-based compensation expense, | |||||||||||
amortization expense and unrealized loss (gain) on foreign currency | $ | 11,866 | $ | 10,779 | |||||||
Non-GAAP net income per share: | |||||||||||
Basic | $ | 0.46 | $ | 0.42 | |||||||
Diluted | $ | 0.45 | $ | 0.41 | |||||||
Shares used to compute non-GAAP net income per share: | |||||||||||
Basic | 25,850,274 | 25,573,851 | |||||||||
Diluted | 26,214,204 | 26,091,069 | |||||||||
Proto Labs, Inc. | |||||||||||||||||
Comparison of GAAP to Non-GAAP Revenue Growth | |||||||||||||||||
(In thousands) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Months Ended | % Change | ||||||||||||||||
March 31, | % | Constant | |||||||||||||||
2015 |
2014 |
Change | Currencies1 | ||||||||||||||
Revenues | |||||||||||||||||
United States | $ | 47,429 | $ | 34,984 | 35.6 | % | 35.6 | % | |||||||||
Europe | 8,781 | 9,205 | -4.6 | % | 10.3 | % | |||||||||||
Japan | 2,326 | 1,885 | 23.4 | % | 43.5 | % | |||||||||||
Total Revenue | $ | 58,536 | $ | 46,074 | 27.0 | % | 30.9 | % | |||||||||
1 First quarter 2015 growth has been recalculated using first quarter 2014 foreign currency exchange rates to provide information useful in evaluating the underlying business trends excluding the impact of changes in foreign currency exchange rates.
Proto Labs, Inc. | |||||||||
Revenue by Geography - Based on Shipping Location | |||||||||
(In thousands) | |||||||||
(Unaudited) | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2015 |
2014 |
||||||||
Revenues | |||||||||
Domestic | |||||||||
United States | $ | 44,845 | $ | 33,022 | |||||
International | |||||||||
Europe | 8,781 | 9,205 | |||||||
Japan | 2,326 | 1,885 | |||||||
United States | 2,584 | 1,962 | |||||||
Total international | 13,691 | 13,052 | |||||||
Total revenue | $ | 58,536 | $ | 46,074 | |||||
Proto Labs, Inc. | ||||||||
Product Developer Information | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Unique product developers and engineers served | 11,009 | 7,669 | ||||||
Source:
For Proto Labs, Inc.
Investor Relations:
John Way,
763-479-7726
john.way@protolabs.com
or
Jenifer
Kirtland, 408-656-9496
jkirtland@evcgroup.com
or
Media
Relations:
Bill Dietrick, 763-479-7664
bill.dietrick@protolabs.com