Exhibit 99.1
 |  | ||||
Protolabs Reports Financial Results for the Third Quarter of 2023
Record Revenue of $130.7 million in the Third Quarter
Record Network Revenue of $22.6 million; an 87% YoY increase
GAAP Earnings Per Share of $0.31; Non-GAAP Earnings Per Share of $0.51
MAPLE PLAIN, Minn. – November 3, 2023 – Proto Labs, Inc. ("Protolabs" or the "Company") (NYSE: PRLB), the world’s leading provider of digital manufacturing services, today announced financial results for the third quarter ended September 30, 2023.
Third Quarter 2023 Highlights:
•Revenue for the third quarter of 2023 was a record $130.7 million, representing a 7.4% increase over the third quarter of 2022.
•Revenue generated from the digital network, powered by Hubs, was $22.6 million in the third quarter, representing growth of 86.9% over the third quarter of the prior year.
•Net income for the third quarter of 2023 was $8.0 million, or $0.31 per diluted share.
•Non-GAAP net income was $13.2 million, or $0.51 per diluted share. See “Non-GAAP Financial Measures” below.
"Protolabs produced third quarter financial results that surpassed our expectations on the top and bottom line. We generated record revenue, improved profitability, generated substantial cash flow, and returned capital to shareholders." said Rob Bodor, President and Chief Executive Officer. "This excellent financial performance demonstrates the success of our strategy; Protolabs' unique hybrid model combining the digital factory and the digital network is the best way to grow profitably in our industry. We experienced increased demand for our comprehensive digitally-enabled manufacturing capabilities in the quarter. The model is winning and customers are delighted."
Additional Third Quarter 2023 Highlights:
•Protolabs served 23,080 unique product developers during the quarter.
•Gross margin was 45.4% in the third quarter of 2023, up sequentially from 43.4% in the second quarter of 2023.
•Non-GAAP gross margin was 46.0% in the third quarter of 2023, representing a sequential increase of 190 basis points. See “Non-GAAP Financial Measures” below.
•EBITDA was $19.5 million, or 14.9% of revenue, in the third quarter of 2023, compared to $11.4 million, or 9.3% of revenue, in the second quarter of 2023. See “Non-GAAP Financial Measures” below.
•Adjusted EBITDA was $23.9 million, or 18.3% of revenue, in the third quarter of 2023, compared to $19.2 million, or 15.7% of revenue, in the second quarter of 2023. See “Non-GAAP Financial Measures” below.
•Cash flow from operations was $24.2 million in the third quarter of 2023, compared to $9.3 million in the second quarter of 2023.
•The Company repurchased $9.0 million of shares during the quarter.
•Cash and investments balance was $114.9 million as of September 30, 2023.
"Along with record revenue in the third quarter, we made substantial progress on our priority to improve profitability in both the digital factory and the digital network," said Dan Schumacher, Chief Financial Officer. "Through a challenging macro environment, Protolabs has demonstrated the industry-leading earnings power and cash flow generation of our business model, enabling us to continue to invest in future growth and return capital to shareholders."
Non-GAAP Financial Measures
The Company has included non-GAAP revenue growth by region and by service line that excludes the impact of changes in foreign currency exchange rates (collectively, “non-GAAP revenue growth”). Management believes these metrics, when viewed in conjunction with the comparable GAAP 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 costs related to the Japan closure activities (collectively, “Adjusted EBITDA”), in this press release to provide investors with additional information regarding the Company’s financial results. The Company has also included earnings before interest, taxes, depreciation and amortization margin (“EBITDA margin”) and EBITDA margin, adjusted for stock-based compensation expense, unrealized (gain) loss on foreign currency and costs related to the Japan closure activities (collectively, “Adjusted EBITDA margin”), in this press release to provide investors with additional information regarding the Company’s financial results.
The Company has included non-GAAP gross margin, adjusted for stock-based compensation expense and amortization expense 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 costs related to the closure of Japan (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 gross margin excluding Japan, adjusted for stock-based compensation expense and amortization expense in this press release to provide investors with additional information regarding the Company’s financial results. The Company has included non-GAAP operating margin excluding Japan, adjusted for stock-based compensation expense, amortization expense, and costs related to the Japan closure activities (collectively, “non-GAAP operating margin excluding Japan”), 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 costs related to the closure of Japan (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 gross margin, non-GAAP gross margin excluding Japan, non-GAAP operating margin, non-GAAP operating margin excluding Japan, non-GAAP revenue growth by region and by service, and Adjusted EBITDA and Adjusted EBITDA margin, 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 2023 financial results and fourth quarter 2023 outlook today, November 3, 2023 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/ic4eziw6. 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 fastest and most comprehensive digital manufacturing service in the world. Our digital factories produce low-volume parts in days while our digital network of manufacturing partners powered by Hubs unlocks advanced capabilities and volume pricing at higher quantities. The result? One manufacturing source—from prototyping to production—for product developers, engineers, and supply chain teams across the globe. See what's next at protolabs.com.
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
Ryan Johnsrud, 612-225-4873
Manager – Investor Relations and FP&A
Media Contact
Protolabs
Brent Renneke, 763-479-7704
PR & Media Strategist
Proto Labs, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
| September 30, 2023 | December 31, 2022 | ||||||||||
| (Unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 83,496 | $ | 56,558 | |||||||
| Short-term marketable securities | 19,204 | 23,568 | |||||||||
| Accounts receivable, net | 78,395 | 76,225 | |||||||||
| Inventory | 13,803 | 13,578 | |||||||||
| Income taxes receivable | 891 | 4,042 | |||||||||
| Prepaid expenses and other current assets | 8,722 | 12,597 | |||||||||
| Total current assets | 204,511 | 186,568 | |||||||||
| Property and equipment, net | 243,022 | 257,785 | |||||||||
| Goodwill | 273,991 | 273,991 | |||||||||
| Other intangible assets, net | 26,668 | 31,250 | |||||||||
| Long-term marketable securities | 12,212 | 26,419 | |||||||||
| Operating lease assets | 2,737 | 3,844 | |||||||||
| Finance lease assets | 16,763 | 17,532 | |||||||||
| Other long-term assets | 4,341 | 4,779 | |||||||||
| Total assets | $ | 784,245 | $ | 802,168 | |||||||
| Liabilities and shareholders' equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | 17,922 | $ | 17,356 | |||||||
| Accrued compensation | 16,337 | 12,743 | |||||||||
| Accrued liabilities and other | 21,027 | 22,384 | |||||||||
| Current operating lease liabilities | 1,568 | 1,561 | |||||||||
| Current finance lease liabilities | 16,630 | 17,537 | |||||||||
| Income taxes payable | 1,144 | — | |||||||||
| Total current liabilities | 74,628 | 71,581 | |||||||||
| Long-term operating lease liabilities | 1,545 | 2,255 | |||||||||
| Long-term finance lease liabilities | 671 | — | |||||||||
| Long-term deferred tax liabilities | 17,138 | 26,322 | |||||||||
| Other long-term liabilities | 5,341 | 4,362 | |||||||||
| Shareholders' equity | 684,922 | 697,648 | |||||||||
| Total liabilities and shareholders' equity | $ | 784,245 | $ | 802,168 | |||||||
Proto Labs, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Injection Molding | $ | 51,688 | $ | 48,940 | $ | 152,455 | $ | 155,693 | |||||||||||||||
| CNC Machining | 52,916 | 47,489 | 149,317 | 141,809 | |||||||||||||||||||
| 3D Printing | 21,622 | 19,823 | 63,952 | 59,458 | |||||||||||||||||||
| Sheet Metal | 4,291 | 5,219 | 12,478 | 15,066 | |||||||||||||||||||
| Other Revenue | 188 | 250 | 627 | 765 | |||||||||||||||||||
| Total Revenue | 130,705 | 121,721 | 378,829 | 372,791 | |||||||||||||||||||
| Cost of revenue | 71,423 | 68,089 | 212,648 | 205,933 | |||||||||||||||||||
| Gross profit | 59,282 | 53,632 | 166,181 | 166,858 | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Marketing and sales | 21,682 | 20,594 | 65,863 | 62,235 | |||||||||||||||||||
| Research and development | 10,105 | 9,309 | 30,647 | 29,316 | |||||||||||||||||||
| General and administrative | 17,058 | 16,477 | 49,713 | 49,770 | |||||||||||||||||||
| Closure of Japan business | 22 | 1,194 | 186 | 6,388 | |||||||||||||||||||
| Total operating expenses | 48,867 | 47,574 | 146,409 | 147,709 | |||||||||||||||||||
| Income from operations | 10,415 | 6,058 | 19,772 | 19,149 | |||||||||||||||||||
| Other income (loss), net | 320 | (24) | (1,758) | (323) | |||||||||||||||||||
| Income before income taxes | 10,735 | 6,034 | 18,014 | 18,826 | |||||||||||||||||||
| Provision for income taxes | 2,781 | 2,083 | 7,784 | 7,223 | |||||||||||||||||||
| Net income | $ | 7,954 | $ | 3,951 | $ | 10,230 | $ | 11,603 | |||||||||||||||
| Net income per share: | |||||||||||||||||||||||
| Basic | $ | 0.31 | $ | 0.14 | $ | 0.39 | $ | 0.42 | |||||||||||||||
| Diluted | $ | 0.31 | $ | 0.14 | $ | 0.39 | $ | 0.42 | |||||||||||||||
| Shares used to compute net income per share: | |||||||||||||||||||||||
| Basic | 26,023,830 | 27,505,097 | 26,296,304 | 27,512,057 | |||||||||||||||||||
| Diluted | 26,028,456 | 27,508,217 | 26,327,606 | 27,522,734 | |||||||||||||||||||
Proto Labs, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2023 | 2022 | ||||||||||
| Operating activities | |||||||||||
| Net income | $ | 10,230 | $ | 11,603 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 28,213 | 29,981 | |||||||||
| Stock-based compensation expense | 11,811 | 13,335 | |||||||||
| Deferred taxes | (9,197) | (8,920) | |||||||||
| Interest on finance lease obligations | 859 | - | |||||||||
| Loss on foreign currency translation | 3,906 | - | |||||||||
| Impairments related to closure of Japan business | - | 2,842 | |||||||||
| Gain on disposal of property and equipment | (498) | (1,174) | |||||||||
| Other | 122 | 11 | |||||||||
| Changes in operating assets and liabilities: | 10,600 | 3,886 | |||||||||
| Net cash provided by operating activities | 56,046 | 51,564 | |||||||||
| Investing activities | |||||||||||
| Purchases of property, equipment and other capital assets | (9,935) | (16,414) | |||||||||
| Proceeds from sales of property, equipment and other capital assets | 693 | 3,227 | |||||||||
| Purchases of marketable securities | - | (45,872) | |||||||||
| Proceeds from sales of marketable securities | - | 1,998 | |||||||||
| Proceeds from call redemptions and maturities of marketable securities | 19,115 | 13,696 | |||||||||
| Net cash provided by (used in) investing activities | 9,873 | (43,365) | |||||||||
| Financing activities | |||||||||||
| Proceeds from exercises of stock options | 1,986 | 2,311 | |||||||||
| Purchases of shares withheld for tax obligations | (1,436) | (1,615) | |||||||||
| Repurchases of common stock | (39,053) | (13,074) | |||||||||
| Principal repayments of finance lease obligations | (234) | (417) | |||||||||
| Net cash used in financing activities | (38,737) | (12,795) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | (244) | (1,972) | |||||||||
| Net increase (decrease) in cash and cash equivalents | 26,938 | (6,568) | |||||||||
| Cash and cash equivalents, beginning of period | 56,558 | 65,929 | |||||||||
| Cash and cash equivalents, end of period | $ | 83,496 | $ | 59,361 | |||||||
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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and costs related to Japan closure activities | |||||||||||||||||||||||
| GAAP net income | $ | 7,954 | $ | 3,951 | $ | 10,230 | $ | 11,603 | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Stock-based compensation expense | 4,441 | 4,907 | 11,811 | 13,335 | |||||||||||||||||||
| Amortization expense | 1,461 | 1,510 | 4,471 | 4,582 | |||||||||||||||||||
| Unrealized (gain) loss on foreign currency | (29) | 382 | 86 | 742 | |||||||||||||||||||
| Costs related to Japan closure activities | 22 | 1,194 | 4,093 | 6,388 | |||||||||||||||||||
Total adjustments 1 | 5,895 | 7,993 | 20,461 | 25,047 | |||||||||||||||||||
Income tax benefits on adjustments 2 | (633) | (1,060) | (931) | (2,518) | |||||||||||||||||||
| Non-GAAP net income | $ | 13,216 | $ | 10,884 | $ | 29,760 | $ | 34,132 | |||||||||||||||
| Non-GAAP net income per share: | |||||||||||||||||||||||
| Basic | $ | 0.51 | $ | 0.40 | $ | 1.13 | $ | 1.24 | |||||||||||||||
| Diluted | $ | 0.51 | $ | 0.40 | $ | 1.13 | $ | 1.24 | |||||||||||||||
| Shares used to compute non-GAAP net income per share: | |||||||||||||||||||||||
| Basic | 26,023,830 | 27,505,097 | 26,296,304 | 27,512,057 | |||||||||||||||||||
| Diluted | 26,028,456 | 27,508,217 | 26,327,606 | 27,522,734 | |||||||||||||||||||
1Stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and costs related to Japan closure activities were included in the following GAAP consolidated statement of operations categories:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Cost of revenue | $ | 805 | $ | 902 | $ | 2,416 | $ | 2,701 | |||||||||||||||
| Marketing and sales | 961 | 929 | 2,508 | 2,479 | |||||||||||||||||||
| Research and development | 675 | 602 | 1,888 | 1,702 | |||||||||||||||||||
| General and administrative | 3,461 | 3,984 | 9,471 | 11,035 | |||||||||||||||||||
| Closure of Japan business | 22 | 1,194 | 186 | 6,388 | |||||||||||||||||||
| Total operating expenses | 5,119 | 6,709 | 14,053 | 21,604 | |||||||||||||||||||
| Other income (loss), net | (29) | 382 | 3,992 | 742 | |||||||||||||||||||
| Total adjustments | $ | 5,895 | $ | 7,993 | $ | 20,461 | $ | 25,047 | |||||||||||||||
2For the three and nine months ended September 30, 2023 and 2022, income tax effects were calculated using the effective tax rate for the relevant jurisdictions. The Company's non-GAAP tax rates differ from its 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 Gross Margin
(In thousands)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Revenue | $ | 130,705 | $ | 121,721 | $ | 378,829 | $ | 372,791 | |||||||||||||||
| Gross profit | 59,282 | 53,632 | 166,181 | 166,858 | |||||||||||||||||||
| GAAP gross margin | 45.4 | % | 44.1 | % | 43.9 | % | 44.8 | % | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Stock-based compensation expense | 462 | 560 | 1,388 | 1,674 | |||||||||||||||||||
| Amortization expense | 343 | 342 | 1,028 | 1,027 | |||||||||||||||||||
| Total adjustments | 805 | 902 | 2,416 | 2,701 | |||||||||||||||||||
| Non-GAAP gross profit | $ | 60,087 | $ | 54,534 | $ | 168,597 | $ | 169,559 | |||||||||||||||
| Non-GAAP gross margin | 46.0 | % | 44.8 | % | 44.5 | % | 45.5 | % | |||||||||||||||
Proto Labs, Inc.
Reconciliation of GAAP to Non-GAAP Gross Margin Excluding Japan
(In thousands)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Revenue | $ | 130,705 | $ | 121,721 | $ | 378,829 | $ | 372,791 | |||||||||||||||
| Revenue excluding Japan | $ | 130,705 | $ | 120,434 | $ | 378,829 | $ | 364,562 | |||||||||||||||
| Gross profit | 59,282 | 53,632 | 166,181 | 166,858 | |||||||||||||||||||
| GAAP gross margin | 45.4 | % | 44.1 | % | 43.9 | % | 44.8 | % | |||||||||||||||
| Less: Japan gross profit | - | 47 | - | 3,150 | |||||||||||||||||||
| Gross Profit excluding Japan | 59,282 | 53,585 | 166,181 | 163,708 | |||||||||||||||||||
| GAAP gross margin excluding Japan | 45.4 | % | 44.5 | % | 43.9 | % | 44.9 | % | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Stock-based compensation expense | 462 | 560 | 1,388 | 1,674 | |||||||||||||||||||
| Amortization expense | 343 | 342 | 1,028 | 1,027 | |||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Japan stock-based compensation expense | - | 13 | - | 61 | |||||||||||||||||||
| Japan amortization expense | - | - | - | - | |||||||||||||||||||
| Total adjustments | 805 | 889 | 2,416 | 2,640 | |||||||||||||||||||
| Non-GAAP gross profit excluding Japan | $ | 60,087 | $ | 54,474 | $ | 168,597 | $ | 166,348 | |||||||||||||||
| Non-GAAP gross margin excluding Japan | 46.0 | % | 45.2 | % | 44.5 | % | 45.6 | % | |||||||||||||||
Proto Labs, Inc.
Reconciliation of GAAP to Non-GAAP Operating Margin
(In thousands)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Revenue | $ | 130,705 | $ | 121,721 | $ | 378,829 | $ | 372,791 | |||||||||||||||
| Income from operations | 10,415 | 6,058 | 19,772 | 19,149 | |||||||||||||||||||
| GAAP operating margin | 8.0 | % | 5.0 | % | 5.2 | % | 5.1 | % | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Stock-based compensation expense | 4,441 | 4,907 | 11,811 | 13,335 | |||||||||||||||||||
| Amortization expense | 1,461 | 1,510 | 4,471 | 4,582 | |||||||||||||||||||
| Costs related to Japan closure activities | 22 | 1,194 | 186 | 6,388 | |||||||||||||||||||
| Total adjustments | 5,924 | 7,611 | 16,468 | 24,305 | |||||||||||||||||||
| Non-GAAP income from operations | $ | 16,339 | $ | 13,669 | $ | 36,240 | $ | 43,454 | |||||||||||||||
| Non-GAAP operating margin | 12.5 | % | 11.2 | % | 9.6 | % | 11.7 | % | |||||||||||||||
Proto Labs, Inc.
Reconciliation of GAAP to Non-GAAP Operating Margin Excluding Japan
(In thousands)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Revenue | $ | 130,705 | $ | 121,721 | $ | 378,829 | $ | 372,791 | |||||||||||||||
| Revenue excluding Japan | $ | 130,705 | $ | 120,434 | $ | 378,829 | $ | 364,562 | |||||||||||||||
| Income from operations | 10,415 | 6,058 | 19,772 | 19,149 | |||||||||||||||||||
| GAAP operating margin | 8.0 | % | 5.0 | % | 5.2 | % | 5.1 | % | |||||||||||||||
| Less: Japan (loss) income from operations | (7) | (724) | (481) | (720) | |||||||||||||||||||
| Income from operations excluding Japan | 10,422 | 6,782 | 20,253 | 19,869 | |||||||||||||||||||
| GAAP operating margin excluding Japan | 8.0 | % | 5.6 | % | 5.3 | % | 5.5 | % | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Stock-based compensation expense | 4,441 | 4,907 | 11,811 | 13,335 | |||||||||||||||||||
| Amortization expense | 1,461 | 1,510 | 4,471 | 4,582 | |||||||||||||||||||
| Costs related to Japan closure activities | 22 | 1,194 | 186 | 6,388 | |||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Japan stock-based compensation expense | - | 89 | 17 | 386 | |||||||||||||||||||
| Japan amortization expense | - | - | - | - | |||||||||||||||||||
| Total adjustments | 5,924 | 7,522 | 16,451 | 23,919 | |||||||||||||||||||
| Non-GAAP income from operations excluding Japan | $ | 16,346 | $ | 14,304 | $ | 36,704 | $ | 43,788 | |||||||||||||||
| Non-GAAP operating margin excluding Japan | 12.5 | % | 11.9 | % | 9.7 | % | 12.0 | % | |||||||||||||||
Proto Labs, Inc.
Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA
(In thousands)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Revenue | $ | 130,705 | $ | 121,721 | $ | 378,829 | $ | 372,791 | |||||||||||||||
| GAAP net income | 7,954 | 3,951 | 10,230 | 11,603 | |||||||||||||||||||
| GAAP net income margin | 6.1 | % | 3.2 | % | 2.7 | % | 3.1 | % | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Amortization expense | $ | 1,461 | $ | 1,510 | $ | 4,471 | $ | 4,582 | |||||||||||||||
| Depreciation expense | 7,869 | 8,197 | 23,742 | 25,399 | |||||||||||||||||||
| Interest income, net | (561) | (265) | (1,283) | (459) | |||||||||||||||||||
| Provision for income taxes | 2,781 | 2,083 | 7,784 | 7,223 | |||||||||||||||||||
| EBITDA | 19,504 | 15,476 | 44,944 | 48,348 | |||||||||||||||||||
| EBITDA Margin | 14.9 | % | 12.7 | % | 11.9 | % | 13.0 | % | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Stock-based compensation expense | 4,441 | 4,907 | 11,811 | 13,335 | |||||||||||||||||||
| Unrealized (gain) loss on foreign currency | (29) | 382 | 86 | 742 | |||||||||||||||||||
| Costs related to Japan closure activities | 22 | 1,194 | 4,093 | 6,388 | |||||||||||||||||||
| Total adjustments | 4,434 | 6,483 | 15,990 | 20,465 | |||||||||||||||||||
| Adjusted EBITDA | $ | 23,938 | $ | 21,959 | $ | 60,934 | $ | 68,813 | |||||||||||||||
| Adjusted EBITDA Margin | 18.3 | % | 18.0 | % | 16.1 | % | 18.5 | % | |||||||||||||||
Proto Labs, Inc.
Comparison of GAAP to Non-GAAP Revenue Growth by Region
(In thousands)
(Unaudited)
| Three Months Ended September 30, 2023 | Three Months Ended September 30, 2022 | % Change2 | % Change Organic3 | ||||||||||||||||||||||||||||||||
| GAAP | Foreign Currency1 | Non-GAAP | GAAP | ||||||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||
| United States | $ | 103,940 | $ | - | $ | 103,940 | $ | 98,970 | 5.0 | % | 5.0 | % | |||||||||||||||||||||||
| Europe | 26,765 | (1,666) | 25,099 | 21,464 | 24.7 | % | 16.9 | % | |||||||||||||||||||||||||||
| Japan | - | - | - | 1,287 | (100.0 | %) | (100.0 | %) | |||||||||||||||||||||||||||
| Total revenue | $ | 130,705 | $ | (1,666) | $ | 129,039 | $ | 121,721 | 7.4 | % | 6.0 | % | |||||||||||||||||||||||
| Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 | % Change2 | % Change Organic3 | ||||||||||||||||||||||||||||||||
| GAAP | Foreign Currency1 | Non-GAAP | GAAP | ||||||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||
| United States | $ | 298,007 | $ | - | $ | 298,007 | $ | 295,121 | 1.0 | % | 1.0 | % | |||||||||||||||||||||||
| Europe | 80,822 | 1,311 | 82,133 | 69,441 | 16.4 | % | 18.3 | % | |||||||||||||||||||||||||||
| Japan | - | - | - | 8,229 | (100.0 | %) | (100.0 | %) | |||||||||||||||||||||||||||
| Total revenue | $ | 378,829 | $ | 1,311 | $ | 380,140 | $ | 372,791 | 1.6 | % | 2.0 | % | |||||||||||||||||||||||
1Revenue for the three and nine months ended September 30, 2023 has been recalculated using 2022 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.
2This column presents the percentage change from GAAP revenue for the three and nine months ended September 30, 2022 to GAAP revenue for the three and nine months ended September 30, 2023.
3This column presents the percentage change from GAAP revenue for the three and nine months ended September 30, 2022 to non-GAAP revenue for the three and nine months ended September 30, 2023 (as recalculated using the foreign currency exchange rates in effect during the three and nine months ended September 30, 2022) in order to provide a constant-currency comparison.
Proto Labs, Inc.
Comparison of GAAP to Non-GAAP Revenue Growth by Service Line
(In thousands)
(Unaudited)
| Three Months Ended September 30, 2023 | Three Months Ended September 30, 2022 | % Change2 | % Change Organic3 | ||||||||||||||||||||||||||||||||
| GAAP | Foreign Currency1 | Non-GAAP | GAAP | ||||||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||
| Injection Molding | $ | 51,688 | $ | (655) | $ | 51,033 | $ | 48,940 | 5.6 | % | 4.3 | % | |||||||||||||||||||||||
| CNC Machining | 52,916 | (708) | 52,208 | 47,489 | 11.4 | 9.9 | |||||||||||||||||||||||||||||
| 3D Printing | 21,622 | (390) | 21,232 | 19,823 | 9.1 | 7.1 | |||||||||||||||||||||||||||||
| Sheet Metal | 4,291 | (20) | 4,271 | 5,219 | (17.8) | (18.2) | |||||||||||||||||||||||||||||
| Other Revenue | 188 | 107 | 295 | 250 | (24.8) | 18.0 | |||||||||||||||||||||||||||||
| Total Revenue | $ | 130,705 | $ | (1,666) | $ | 129,039 | $ | 121,721 | 7.4 | % | 6.0 | % | |||||||||||||||||||||||
| Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 | % Change2 | % Change Organic3 | ||||||||||||||||||||||||||||||||
| GAAP | Foreign Currency1 | Non-GAAP | GAAP | ||||||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||
| Injection Molding | $ | 152,455 | $ | 781 | $ | 153,236 | $ | 155,693 | (2.1) | % | (1.6) | % | |||||||||||||||||||||||
| CNC Machining | 149,317 | 152 | 149,469 | 141,809 | 5.3 | 5.4 | |||||||||||||||||||||||||||||
| 3D Printing | 63,952 | 277 | 64,229 | 59,458 | 7.6 | 8.0 | |||||||||||||||||||||||||||||
| Sheet Metal | 12,478 | (9) | 12,469 | 15,066 | (17.2) | (17.2) | |||||||||||||||||||||||||||||
| Other Revenue | 627 | 110 | 737 | 765 | (18.0) | (3.7) | |||||||||||||||||||||||||||||
| Total Revenue | $ | 378,829 | $ | 1,311 | $ | 380,140 | $ | 372,791 | 1.6 | % | 2.0 | % | |||||||||||||||||||||||
1Revenue for the three and nine months ended September 30, 2023 has been recalculated using 2022 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.
2This column presents the percentage change from GAAP revenue for the three and nine months ended September 30, 2022 to GAAP revenue for the three and nine months ended September 30, 2023.
3This column presents the percentage change from GAAP revenue for the three and nine months ended September 30, 2022 to non-GAAP revenue for the three and nine months ended September 30, 2023 (as recalculated using the foreign currency exchange rates in effect during the three and nine months ended September 30, 2022) in order to provide a constant-currency comparison.
Proto Labs, Inc.
Product Developer Information
(Unaudited)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Unique product developers and engineers served | 23,080 | 23,816 | 45,668 | 47,793 | |||||||||||||||||||