ex_332580.htm

EX-99.1 2 ex_332580.htm EXHIBIT 99.1 ex_332580.htm

Exhibit 99.1

3D Printing

CNC Machining

Sheet Metal Fabrication

Injection Molding

Protolabs Reports Financial Results for the Fourth Quarter and Full Year 2021

Revenue of $123.6 million in the Fourth Quarter of 2021, an increase of 18% year-over-year

Record Annual Revenue of $488.1 million in 2021

MAPLE PLAIN, Minn. – February 11, 2022 – Proto Labs, Inc. (NYSE: PRLB), the world’s leading provider of digital manufacturing services, today announced financial results for the fourth quarter and full year ended December 31, 2021.

Fourth Quarter 2021 Highlights include:

●

Revenue for the fourth quarter of 2021 was $123.6 million, representing a 17.5 percent increase compared to revenue of $105.2 million in the fourth quarter of 2020.

●

Hubs generated $9.9 million of revenue in the fourth quarter, representing 13.0 percent sequential growth compared to the third quarter of 2021.

●

Net income for the fourth quarter of 2021 was $11.9 million, or $0.43 per diluted share.

●

Non-GAAP net income was $11.4 million, or $0.41 per diluted share. See “Non-GAAP Financial Measures” below.

“We are pleased with the performance of our business in the fourth quarter, highlighted by strong growth and revenue above our expectations,” said Rob Bodor, President and Chief Executive Officer. “Our employees around the globe worked tirelessly in a challenging environment to finish the year strong and set us up for success in 2022.”

Full Year 2021 Highlights include:

●

Record annual revenue of $488.1 million in 2021, an increase of 12.4 percent over $434.4 million in 2020.

●

Protolabs served 55,330 unique product developers during the year.

●

Gross margin was 45.6 percent of revenue in 2021, compared to 50.1 percent in 2020.

●

EBITDA margin was 16.5 percent of revenue in 2021, compared to 21.7 percent in 2020.

●

Adjusted EBITDA margin was 18.3 percent of revenue in 2021, compared to 24.8 percent in 2020. See “Non-GAAP Financial Measures” below.

●

Net income for 2021 was $33.4 million, or $1.21 per diluted share.

●

Non-GAAP net income was $42.8 million, or $1.55 per diluted share. See “Non-GAAP Financial Measures” below.

●

Cash and investments balance was $91.8 million as of December 31, 2021.

“2021 was a transformative year for Protolabs. With the acquisition of Hubs and the launch of Protolabs 2.0, we are well positioned to execute on our long-term strategy to accelerate revenue growth and expand profitability,” added Rob Bodor. “We are uniquely positioned in this large and growing digital manufacturing market as the only company with industry-leading in-house digital manufacturing capabilities coupled with a premium network of manufacturing partners. We have the right strategic priorities in place to capture the opportunity ahead of us in 2022: to accelerate revenue growth, delight our customers, be the digital leader at scale, and continue to be a great place for our employees. I am excited for what we will achieve in 2022.”

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 fourth quarter and full year 2021 financial results and first quarter 2022 outlook today, February 11, 2022 at 8:30 a.m. EST. 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. EST 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/cgi7nsd7. 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

Ryan Johnsrud, 612-225-4873

Manager of Investor Relations, Corporate Development and Global FP&A

ryan.johnsrud@protolabs.com

Media Contact

Protolabs

Brent Renneke, 763-479-7704

PR & Media Strategist

brent.renneke@protolabs.com

Proto Labs, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

	December 31,		December 31,
	2021		2020
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	65,929	$	127,603
Short-term marketable securities		11,580		34,088
Accounts receivable, net		80,051		57,877
Inventory		13,161		10,862
Income taxes receivable		1,321		540
Prepaid expenses and other current assets		11,450		11,032
Total current assets		183,492		242,002

Property and equipment, net		280,346		282,666
Goodwill		400,610		128,752
Other intangible assets, net		37,998		14,350
Long-term marketable securities		14,340		59,357
Operating lease assets		5,578		9,855
Finance lease assets		1,898		2,396
Other long-term assets		4,320		4,826
Total assets	$	928,582	$	744,204

Liabilities and shareholders' equity
Current liabilities
Accounts payable	$	25,364	$	18,248
Accrued compensation		13,704		11,989
Accrued liabilities and other		11,980		16,193
Current operating lease liabilities		3,298		3,272
Current finance lease liabilities		550		552
Total current liabilities		54,896		50,254

Long-term operating lease liabilities		2,245		7,586
Long-term finance lease liabilities		1,351		1,919
Long-term deferred tax liabilities		35,892		33,854
Other long-term liabilities		5,705		6,235

Shareholders' equity		828,493		644,356
Total liabilities and shareholders' equity	$	928,582	$	744,204

Proto Labs, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)

	Three Months Ended					Year Ended
	December 31,					December 31,
	2021			2020		2021			2020
Revenue
Injection Molding	$	53,905		$	52,065	$	226,117		$	217,992
CNC Machining		44,858			31,827		166,811			131,587
3D Printing		18,727			16,024		72,721			62,502
Sheet Metal		5,607			4,532		20,397			18,838
Other		485			760		2,052			3,476
Total revenue		123,582			105,208		488,098			434,395

Cost of revenue		68,170			52,580		265,407			216,568
Gross profit		55,412			52,628		222,691			217,827

Operating expenses
Marketing and sales		20,229			17,488		82,175			69,309
Research and development		10,386			11,390		44,241			36,940
General and administrative		11,747			12,759		55,933			51,742
Total operating expenses		42,362			41,637		182,349			157,991
Income from operations		13,050			10,991		40,342			59,836
Other income (expense), net		(118	)		560		(158	)		3,109
Income before income taxes		12,932			11,551		40,184			62,945
Provision for income taxes		1,022			1,972		6,812			12,078
Net income	$	11,910		$	9,579	$	33,372		$	50,867

Net income per share:
Basic	$	0.43		$	0.36	$	1.21		$	1.90
Diluted	$	0.43		$	0.36	$	1.21		$	1.89

Shares used to compute net income per share:
Basic		27,555,357			26,775,279		27,617,627			26,737,425
Diluted		27,562,694			26,976,582		27,653,099			26,896,357

Proto Labs, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

	Year Ended
	December 31,
	2021			2020
Operating activities
Net income	$	33,372		$	50,867
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		40,488			32,594
Stock-based compensation expense		19,095			14,673
Deferred taxes		339			7,577
Amortization of marketable securities		-			415
Realized loss on available-for-sale securities		567			-
Changes in fair value of contingent consideration		(13,253	)		-
Other		275			(336	)
Changes in operating assets and liabilities		(25,641	)		1,179
Net cash provided by operating activities		55,242			106,969

Investing activities
Purchases of property, equipment and other capital assets		(34,209	)		(47,010	)
Cash used for acquisitions, net of cash acquired		(127,413	)		-
Purchases of other assets and investments		-			(3,000	)
Purchases of marketable securities		(16,159	)		(113,200	)
Proceeds from sales of marketable securities		64,913			-
Proceeds from maturities of marketable securities		18,204			67,737
Net cash used in investing activities		(94,664	)		(95,473	)

Financing activities
Proceeds from exercises of stock options and other		5,862			7,557
Purchases of shares withheld for tax obligations		(4,225	)		(3,443	)
Repurchases of common stock		(23,279	)		(14,686	)
Principal repayments of finance lease obligations		(552	)		(154	)
Other		(4	)		-
Net cash used in financing activities		(22,198	)		(10,726	)
Effect of exchange rate changes on cash and cash equivalents		(54	)		1,608
Net (decrease) increase in cash and cash equivalents		(61,674	)		2,378
Cash and cash equivalents, beginning of period		127,603			125,225
Cash and cash equivalents, end of period	$	65,929		$	127,603

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						Year Ended
	December 31,						December 31,
	2021			2020			2021			2020
Non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and transaction costs
GAAP net income	$	11,910		$	9,579		$	33,372		$	50,867
Add back:
Stock-based compensation expense		3,556			4,056			19,095			14,673
Amortization expense		1,552			754			6,153			3,016
Unrealized (gain) loss on foreign currency		215			(353	)		556			(1,373	)
Transaction costs ¹		(4,705	)		427			(10,575	)		427
Total adjustments ²		618			4,884			15,229			16,743
Income tax benefits on adjustments ³		(1,150	)		(1,013	)		(5,789	)		(4,043	)
Non-GAAP net income	$	11,378		$	13,450		$	42,812		$	63,567


Non-GAAP net income per share:
Basic	$	0.41		$	0.50		$	1.55		$	2.38
Diluted	$	0.41		$	0.50		$	1.55		$	2.36

Shares used to compute non-GAAP net income per share:
Basic		27,555,357			26,775,279			27,617,627			26,737,425
Diluted		27,562,694			26,976,582			27,653,099			26,896,357

¹Transaction 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.
²Stock-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:

	Three Months Ended						Year Ended
	December 31,						December 31,
	2021			2020			2021		2020

Cost of revenue	$	990		$	1,032		$	3,964	$	3,820

Marketing and sales		895			888			3,736		3,121
Research and development		689			675			2,833		2,441
General and administrative		(2,171	)		2,642			4,140		8,734
Total operating expenses		(587	)		4,205			10,709		14,296

Other (income) expense, net		215			(353	)		556		(1,373	)
Total adjustments	$	618		$	4,884		$	15,229	$	16,743

³For the three-month and year-ended periods ended December 31, 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.

Proto Labs, Inc.
Reconciliation of GAAP to Non-GAAP Operating Margin
(In thousands)
(Unaudited)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2021			2020			2021			2020
Revenue	$	123,582		$	105,208		$	488,098		$	434,395
Income from operations		13,050			10,991			40,342			59,836
GAAP operating margin		10.6	%		10.4	%		8.3	%		13.8	%
Add back:
Stock-based compensation expense		3,556			4,056			19,095			14,673
Amortization expense		1,552			754			6,153			3,016
Transaction costs¹		(4,705	)		427			(10,575	)		427
Total adjustments		403			5,237			14,673			18,116
Non-GAAP income from operations	$	13,453		$	16,228		$	55,015		$	77,952
Non-GAAP operating margin		10.9	%		15.4	%		11.3	%		17.9	%

¹Transaction 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.

Proto Labs, Inc.
Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA
(In thousands)
(Unaudited)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2021			2020			2021			2020
GAAP net income	$	11,910		$	9,579		$	33,372		$	50,867
Amortization expense		1,552			754			6,153			3,016
Depreciation expense		8,705			7,949			34,335			29,578
Interest income, net		(23	)		(149	)		(230	)		(1,332	)
Tax expense		1,022			1,972			6,812			12,078
EBITDA		23,166			20,105			80,442			94,207
Add back:
Stock-based compensation expense		3,556			4,056			19,095			14,673
Unrealized (gain) loss on foreign currency		215			(353	)		556			(1,373	)
Transaction costs¹		(4,705	)		427			(10,575	)		427
Total adjustments		(934	)		4,130			9,076			13,727
Adjusted EBITDA	$	22,232		$	24,235		$	89,518		$	107,934

¹Transaction 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.

Proto Labs, Inc.

Comparison of GAAP to Non-GAAP Revenue Growth

(In thousands)

(Unaudited)

	Three Months Ended December 31, 2021									Three Months Ended December 31, 2020		%
	GAAP		Foreign Currency¹		Hubs Acquisition²			Non-GAAP		GAAP		Change³			% Change Organic⁴
Revenues
United States	$	97,934	$	-	$	(5,109	)	$	92,825	$	83,201		17.7	%		11.6	%
Europe		22,140		294		(4,784	)		17,650		18,383		20.4			(4.0	)
Japan		3,508		310		-			3,818		3,624		(3.2	)		5.4
Total Revenue	$	123,582	$	604	$	(9,893	)	$	114,293	$	105,208		17.5	%		8.6	%

	Year Ended December 31, 2021										Year Ended December 31, 2020		%
	GAAP		Foreign Currency¹			Hubs Acquisition²			Non-GAAP		GAAP		Change³			% Change Organic⁴
Revenues
United States	$	384,458	$	-		$	(17,621	)	$	366,837	$	345,708		11.2	%		6.1	%
Europe		90,399		(3,692	)		(15,726	)		70,981		74,796		20.9			(5.1	)
Japan		13,241		393			-			13,634		13,891		(4.7	)		(1.9	)
Total Revenue	$	488,098	$	(3,299	)	$	(33,347	)	$	451,452	$	434,395		12.4	%		3.9	%

¹ Revenue for the three-month and year-ended periods ended December 31, 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-month and year-ended periods ended December 31, 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-month and year-ended periods ended December 31, 2020 to GAAP revenue for the three-month and year-ended periods ended December 31, 2021.

⁴ This column presents the percentage change from GAAP revenue for the three-month and year-ended periods ended December 31, 2020 to non-GAAP revenue for the three-month and year-ended periods ended December 31, 2021 (as recalculated using the foreign currency exchange rates in effect during the three-month and year-ended periods ended December 31, 2020, excluding the impact of Hubs, Inc. acquisition) in order to provide a constant-currency comparison.

Proto Labs, Inc.
Product Developer Information
(Unaudited)

Three Months Ended

Year Ended

December 31,

2021

2020

2021

2020⁽¹⁾

Unique product developers and engineers served

23,376

18,157

55,330

43,808

⁽¹⁾The unique product developers and engineers served for the year ended December 31, 2020 has been restated to include unique product developers and engineers who purchased injection molding parts only. Historically we included only those developers who purchased injection molds in our metric.