Protolabs Reports Financial Results for the Fourth Quarter and Full Year 2018

Q4 2018 Revenue of $112.8 million, an increase of 20% over Q4 2017
Full Year 2018 Revenue of $445.6 million, an increase of 29% over 2017
Q4 2018 Net Income of $19.3 million, an increase of 35% over Q4 2017
Full Year 2018 Net Income of $76.6 million, an increase of 48% over 2017

MAPLE PLAIN, Minn. — (BUSINESS WIRE) — February 7, 2019 — Proto Labs, Inc. (NYSE: PRLB), a leading online and technology-enabled, quick-turn, on-demand manufacturer, today announced financial results for the fourth quarter and full year ended December 31, 2018.

Fourth Quarter 2018 Highlights include:

  • Revenue for the fourth quarter of 2018 was $112.8 million, representing a 19.7 percent increase over revenue of $94.2 million in the fourth quarter of 2017.
  • The number of unique product developers and engineers served totaled 20,403 in the fourth quarter of 2018, an increase of 18.2 percent over the fourth quarter of 2017.
  • Net income for the fourth quarter of 2018 was $19.3 million, or $0.71 per diluted share.
  • Non-GAAP net income was $20.3 million, or $0.74 per diluted share. See “Non-GAAP Financial Measures” below.

“Protolabs had another quarter of strong revenue growth, however, fourth quarter financial results were below our expectations,” said Vicki Holt, President and Chief Executive Officer. “We experienced a strong start to the quarter in terms of revenue, followed by a weak December. In addition, our recent acquisition of Rapid Manufacturing is performing below our expectations. These factors, combined with the relocation of our CNC facility in the United States impacted our productivity during the quarter, negatively affecting our operating earnings.”

Additional Fourth Quarter 2018 Highlights include:

  • Gross margin was 52.5 percent of revenue for the fourth quarter of 2018, compared to 56.2 percent for the fourth quarter of 2017.
  • Operating expenses were 34.6 percent of revenue for the fourth quarter of 2018, compared to 36.2 percent for the fourth quarter of 2017.
  • GAAP operating margin was 17.9 percent of revenue during the fourth quarter of 2018, compared to 19.9 percent for the fourth quarter of 2017.
  • Non-GAAP operating margin was 21.2 percent of revenue during the fourth quarter of 2018, compared to 25.1 percent for the fourth quarter of 2017. See “Non-GAAP Financial Measures” below.
  • The company generated $38.0 million in cash from operations during the fourth quarter of 2018.
  • Cash and investments balance was $155.4 million at December 31, 2018.
  • The company repurchased $12.2 million or 104,600 shares of common stock.

“As a company, we are focused on serving our customers and driving growth and profitability over the long term,” said Holt. “Protolabs achieved several major milestones during the fourth quarter that will facilitate future growth. We successfully completed the relocation of our CNC operations in Minnesota while fulfilling commitments to customers, increased the number of product developers served in 2018 to nearly 46,000, and became a founding member of MIT’s ADAPT consortium.”

Full Year 2018 Financial Highlights include:

  • Revenue increased 29.3 percent to $445.6 million compared to $344.5 million in 2017. This growth includes the acquisition of Rapid Manufacturing in December 2017.
  • Net income for 2018 increased 47.9 percent to $76.6 million, or $2.81 per diluted share compared to $51.8 million, or $1.93 per diluted share in 2017.
  • Non-GAAP net income was $82.8 million, or $3.04 per diluted share. See “Non-GAAP Financial Measures” below.
  • Cash generated from operations during the year totaled $122.9 million.

Additional 2018 Highlights include:

  • Served nearly 46,000 product developers during the year, an increase of 22.5 percent over 2017.
  • Formed a partnership with Misumi, a Japanese parts distributer, to increase our brand recognition and demand in Japan.
  • Moved the company’s CNC operations, including nearly 300 machines over a six-week period, to a new 215,000 square foot state-of-the-art CNC machining digital manufacturing facility in Minnesota.
  • New Hampshire operations received national recognition, winning The FABRICATOR’s 2019 Industry Award, an award that recognizes Protolabs’ quick-turn production capabilities, lean manufacturing efforts, and overall evolution over the past year.
  • Became a founding member of MIT’s ADAPT (Additive and Digital Advanced Production Technologies) consortium along with other leading organizations in industry and academia.

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