Proto Labs Reports Record Revenue and Net Income for the Third Quarter 2015
Quarterly Revenue Up 24% Year over Year to
Record Quarterly Net Income of
Highlights include:
-
Revenue for the third quarter of 2015 increased to a record
$67.8 million , 24 percent above revenue of$54.6 million in the third quarter of 2014. On a constant currency basis, revenue was up 28 percent versus the prior year. -
Revenue from additive services (3D printing) totaled
$6.0 million , an increase of 79 percent from the third quarter of 2014. - Revenue growth reflected a 24 percent increase in the number of unique product developers and engineers served over the prior year period.
-
Net income for the third quarter of 2015 was a record
$12.4 million , or$0.47 per diluted share. Non-GAAP net income, excluding the after-tax expense of stock compensation, transaction costs related to theAlphaform acquisition, amortization of intangibles and unrealized foreign currency gains, was$13.7 million , or$0.52 per diluted share. See “Non-GAAP Financial Measures” below.
“We continued to demonstrate strong momentum in the third quarter,
reflecting solid execution of our marketing and sales, manufacturing,
and new product and service initiatives,” said
Additional Third Quarter Highlights include:
- Gross margin was 59.4 percent of revenue for the third quarter of 2015 compared with 58.7 percent for the second quarter of 2015 and 60.6 percent during the same quarter last year.
- GAAP operating margin, including transaction expenses, was 25.7 percent of revenue during the third quarter of 2015 compared to 28.3 percent for the third quarter of 2014. On a non-GAAP basis, operating margins were 29.3 percent. See “Non-GAAP Financial Measures” below.
-
Cash generated from operations during the third quarter totaled
$13.5 million . Cash, cash equivalents and investments were$150.0 million atSeptember 30, 2015 compared with$142.0 million atJune 30, 2015 .
“On
“We are on track with the roll out of our new materials and service
offerings. Demand for our Stereolithography service 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 operating margin, adjusted for
stock-based compensation expense, transaction expenses related to the
acquisition of
The company has also included non-GAAP net income, adjusted for
stock-based compensation expense, transaction expenses related to the
acquisition of
The company has provided below a reconciliation of non-GAAP operating margin to operating margin and non-GAAP net income to net income, the most directly comparable measures calculated and presented in accordance with GAAP. Non-GAAP operating margins and non-GAAP net income 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 non-GAAP operating margin and net income 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
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) | ||||||||
September 30, | December 31, | |||||||
2015 | 2014 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 64,131 | $ | 43,329 | ||||
Short-term marketable securities | 28,062 | 30,706 | ||||||
Accounts receivable, net | 32,897 | 24,226 | ||||||
Inventory | 7,228 | 6,194 | ||||||
Income taxes receivable | 4,029 | - | ||||||
Other current assets | 6,193 | 3,889 | ||||||
Total current assets | 142,540 | 108,344 | ||||||
Property and equipment, net | 108,626 | 91,626 | ||||||
Long-term marketable securities | 57,801 | 54,318 | ||||||
Goodwill | 28,916 | 28,916 | ||||||
Other intangible assets, net | 3,523 | 4,083 | ||||||
Other long-term assets | 520 | 227 | ||||||
Total assets | $ | 341,926 | $ | 287,514 | ||||
Liabilities and shareholders' equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 11,552 | $ | 7,882 | ||||
Accrued compensation | 10,519 | 6,067 | ||||||
Accrued liabilities and other | 2,424 | 2,718 | ||||||
Income taxes payable | - | 1,953 | ||||||
Current portion of long-term debt obligations | 39 | 139 | ||||||
Total current liabilities | 24,534 | 18,759 | ||||||
Long-term deferred tax liabilities | 1,488 | 1,846 | ||||||
Long-term debt obligations | - | 10 | ||||||
Other long-term liabilities | 1,716 | 1,360 | ||||||
Shareholders' equity | 314,188 | 265,539 | ||||||
Total liabilities and shareholders' equity | $ | 341,926 | $ | 287,514 | ||||
Proto Labs, Inc. | ||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||
(In thousands, except share and per share amounts) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
September 30, | September 30, | |||||||||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||||||||
Revenue | ||||||||||||||||||
Protomold | $ | 41,971 | $ | 35,655 | $ | 119,521 | $ | 104,604 | ||||||||||
Firstcut | 19,833 | 15,549 | 54,788 | 43,407 | ||||||||||||||
Fineline | 6,038 | 3,370 | 16,038 | 5,503 | ||||||||||||||
Total revenue |
67,842 | 54,574 | 190,347 | 153,514 | ||||||||||||||
Cost of revenue | 27,517 | 21,492 | 77,218 | 58,725 | ||||||||||||||
Gross profit | 40,325 | 33,082 | 113,129 | 94,789 | ||||||||||||||
Operating expenses | ||||||||||||||||||
Marketing and sales | 10,027 | 7,351 | 28,383 | 21,029 | ||||||||||||||
Research and development | 4,760 | 4,555 | 13,471 | 11,925 | ||||||||||||||
General and administrative | 8,134 | 5,733 | 20,683 | 15,970 | ||||||||||||||
Total operating expenses | 22,921 | 17,639 | 62,537 | 48,924 | ||||||||||||||
Income from operations | 17,404 | 15,443 | 50,592 | 45,865 | ||||||||||||||
Other income (expense), net | 593 | (56 | ) | 100 | (19 | ) | ||||||||||||
Income before income taxes | 17,997 | 15,387 | 50,692 | 45,846 | ||||||||||||||
Provision for income taxes | 5,615 | 5,003 | 16,171 | 14,404 | ||||||||||||||
Net income | $ | 12,382 | $ | 10,384 | $ | 34,521 | $ | 31,442 | ||||||||||
Net income per share: | ||||||||||||||||||
Basic | $ | 0.47 | $ | 0.40 | $ | 1.33 | $ | 1.23 | ||||||||||
Diluted | $ | 0.47 | $ | 0.40 | $ | 1.31 | $ | 1.20 | ||||||||||
Shares used to compute net income per share: | ||||||||||||||||||
Basic | 26,083,405 | 25,757,593 | 25,952,451 | 25,651,156 | ||||||||||||||
Diluted | 26,381,313 | 26,200,741 | 26,290,758 | 26,109,539 | ||||||||||||||
Proto Labs, Inc. | ||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||
(In thousands) | ||||||||||
(Unaudited) | ||||||||||
Nine Months Ended | ||||||||||
September 30, | ||||||||||
2015 | 2014 | |||||||||
Operating activities | ||||||||||
Net income | $ | 34,521 | $ | 31,442 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 10,422 | 7,696 | ||||||||
Stock-based compensation expense | 4,515 | 3,561 | ||||||||
Deferred taxes | (310 | ) | 487 | |||||||
Excess tax benefit from stock-based compensation | (5,212 | ) | (4,383 | ) | ||||||
Amortization of held-to-maturity securities | 936 | 1,194 | ||||||||
Changes in operating assets and liabilities | (3,588 | ) | 7 | |||||||
Net cash provided by operating activities | 41,284 | 40,004 | ||||||||
Investing activities | ||||||||||
Purchases of property and equipment | (27,259 | ) | (35,928 | ) | ||||||
Acquisitions, net of cash acquired | - | (33,864 | ) | |||||||
Purchases of marketable securities | (42,674 | ) | (47,338 | ) | ||||||
Proceeds from sales and maturities of marketable securities | 40,899 | 61,896 | ||||||||
Net cash used in investing activities | (29,034 | ) | (55,234 | ) | ||||||
Financing activities | ||||||||||
Payments on debt | (107 | ) | (1,005 | ) | ||||||
Acquisition-related contingent consideration | (1,400 | ) | (800 | ) | ||||||
Proceeds from exercises of stock options and other | 5,165 | 3,962 | ||||||||
Excess tax benefit from stock-based compensation | 5,212 | 4,383 | ||||||||
Net cash provided by financing activities | 8,870 | 6,540 | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (318 | ) | (81 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | 20,802 | (8,771 | ) | |||||||
Cash and cash equivalents, beginning of period | 43,329 | 43,039 | ||||||||
Cash and cash equivalents, end of period | $ | 64,131 | $ | 34,268 | ||||||
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 | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||||||||||
Non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized loss (gain) on foreign currency, and acquisition costs: |
||||||||||||||||||||
GAAP net income | $ | 12,382 | $ | 10,384 | $ | 34,521 | $ | 31,442 | ||||||||||||
Add back: | ||||||||||||||||||||
Stock-based compensation expense | 1,606 | 1,313 | 4,515 | 3,561 | ||||||||||||||||
Income tax benefits on stock-based compensation expense | (494 | ) | (417 | ) | (1,378 | ) | (1,128 | ) | ||||||||||||
Amortization expense | 186 | 186 | 559 | 311 | ||||||||||||||||
Income tax benefits on amortization expense | (65 | ) | (65 | ) | (196 | ) | (109 | ) | ||||||||||||
Unrealized loss (gain) on foreign currency | (407 | ) | 104 | 211 | 231 | |||||||||||||||
Income tax benefits on unrealized loss (gain) on foreign currency | 78 | (26 | ) | (50 | ) | (47 | ) | |||||||||||||
Acquisition costs | 648 | - | 648 | - | ||||||||||||||||
Income tax benefits on acquisition costs | (227 | ) | - | (227 | ) | - | ||||||||||||||
Total adjustments | 1,325 | 1,095 | 4,082 | 2,819 | ||||||||||||||||
Non-GAAP net income adjusted for stock-based compensation expense, amortization expense, unrealized loss (gain) on foreign currency, and acquisition costs |
$ | 13,707 | $ | 11,479 | $ | 38,603 | $ | 34,261 | ||||||||||||
Non-GAAP net income per share: | ||||||||||||||||||||
Basic | $ | 0.53 | $ | 0.45 | $ | 1.49 | $ | 1.34 | ||||||||||||
Diluted | $ | 0.52 | $ | 0.44 | $ | 1.47 | $ | 1.31 | ||||||||||||
Shares used to compute non-GAAP net income per share: | ||||||||||||||||||||
Basic | 26,083,405 | 25,757,593 | 25,952,451 | 25,651,156 | ||||||||||||||||
Diluted | 26,381,313 | 26,200,741 | 26,290,758 | 26,109,539 | ||||||||||||||||
Proto Labs, Inc. | ||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Operating Margin | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||||||||||
Revenue | $ | 67,842 | $ | 54,574 | $ | 190,347 | $ | 153,514 | ||||||||||||
Income from operations | 17,404 | 15,443 | 50,592 | 45,865 | ||||||||||||||||
GAAP operating margin | 25.7 | % | 28.3 | % | 26.6 | % | 29.9 | % | ||||||||||||
Add back: | ||||||||||||||||||||
Stock-based compensation expense | 1,606 | 1,313 | 4,515 | 3,561 | ||||||||||||||||
Amortization expense | 186 | 186 | 559 | 311 | ||||||||||||||||
Acquisition costs | 648 | - | 648 | - | ||||||||||||||||
Total adjustments | 2,440 | 1,499 | 5,722 | 3,872 | ||||||||||||||||
Non-GAAP income from operations adjusted for stock-based compensation expense, amortization expense and acquisition costs |
$ | 19,844 | $ | 16,942 | $ | 56,314 | $ | 49,737 | ||||||||||||
Non-GAAP operating margin | 29.3 | % | 31.0 | % | 29.6 | % | 32.4 | % | ||||||||||||
Proto Labs, Inc. | ||||||||||||||||||||||||||||||||
Comparison of GAAP to Non-GAAP Revenue Growth | ||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||
Three Months Ended | % Change | Nine Months Ended | % Change | |||||||||||||||||||||||||||||
September 30, | % | Constant | September 30, | % | Constant | |||||||||||||||||||||||||||
2015 |
2014 |
Change | Currencies1 |
2015 |
2014 |
Change | Currencies1 | |||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||||
United States | $ | 54,408 | $ | 43,363 | 25.5 | % | 25.5 | % | $ | 154,107 | $ | 120,781 | 27.6 | % | 27.6 | % | ||||||||||||||||
Europe | 11,297 | 9,333 | 21.0 | % | 39.9 | % | 30,161 | 27,523 | 9.6 | % | 27.9 | % | ||||||||||||||||||||
Japan | 2,137 | 1,878 | 13.8 | % | 33.4 | % | 6,079 | 5,210 | 16.7 | % | 36.9 | % | ||||||||||||||||||||
Total Revenue | $ | 67,842 | $ | 54,574 | 24.3 | % | 28.2 | % | $ | 190,347 | $ | 153,514 | 24.0 | % | 28.0 | % | ||||||||||||||||
1 Revenue growth for the three- and nine-month periods ended September 30, 2015 has been recalculated using 2014 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. | ||||||||||||||||||||||||||||||||
Proto Labs, Inc. | ||||||||||||||||
Revenue by Geography - Based on Shipping Location | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||||||
Revenues | ||||||||||||||||
Domestic | ||||||||||||||||
United States | $ | 50,214 | $ | 40,822 | $ | 144,356 | $ | 113,810 | ||||||||
International | ||||||||||||||||
Europe | 11,297 | 9,333 | 30,161 | 27,523 | ||||||||||||
Japan | 2,137 | 1,878 | 6,079 | 5,210 | ||||||||||||
United States | 4,194 | 2,541 | 9,751 | 6,971 | ||||||||||||
Total international | 17,628 | 13,752 | 45,991 | 39,704 | ||||||||||||
Total revenue | $ | 67,842 | $ | 54,574 | $ | 190,347 | $ | 153,514 | ||||||||
Proto Labs, Inc. | ||||||||||||
Product Developer Information | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||
Unique product developers and engineers served | 12,541 | 10,097 | 22,633 | 17,526 | ||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20151022005304/en/
Source:
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