Protolabs Reports Financial Results for the Second Quarter of 2021

Record Revenue of $123.0 million in the Second Quarter of 2021, an increase of 15% over the Second Quarter of 2020

MAPLE PLAIN, Minn. — (BUSINESS WIRE) — July 29, 2021 — Proto Labs, Inc. (NYSE: PRLB), the world’s largest ecommerce manufacturer and supplier of on-demand prototype and production parts, today announced financial results for the second quarter ended June 30, 2021.

Second Quarter 2021 Highlights include:

  • Revenue for the second quarter of 2021 was $123.0 million, representing a 15.5 percent increase compared to revenue of $106.6 million in the second quarter of 2020.
  • Hubs generated $8.9 million of revenue in the second quarter, representing growth of 45.6 percent over the second quarter of 2020.
  • Net income for the second quarter of 2021 was $12.9 million, or $0.47 per diluted share.
  • Non-GAAP net income was $10.7 million, or $0.39 per diluted share. See “Non-GAAP Financial Measures” below.

“During the second quarter of 2021, we experienced strong demand, and delivered record revenues despite the challenges of labor availability in the US. We are emerging from the pandemic stronger than ever in the custom parts space,” said Rob Bodor, President and Chief Executive Officer. “I want to thank the employees of Protolabs for all that they did in the quarter, and we are confident that the best is yet to come.”

Additional Second Quarter 2021 Highlights include:

  • Protolabs served 23,253 unique product developers during the quarter, representing a 36.5 percent increase over the second quarter of 2020.
  • Gross margin in the second quarter of 2021 was 46.0 percent of revenue; Non-GAAP gross margin was 46.8 percent of revenue. See “Non-GAAP Financial Measures” below.
  • EBITDA margin was 21.3 percent of revenue in the second quarter of 2021; adjusted EBITDA margin was 18.8 percent of revenue in the second quarter of 2021. See “Non-GAAP Financial Measures” below.
  • Cash and investments balance was $89.0 million as of June 30, 2021.

“The environment is ripe for growth and our digital manufacturing model is leading the way,” added John Way, Chief Financial Officer. “Our profitable business model drives a healthy balance sheet with $89 million in cash and investments and no debt, giving us the flexibility to continue to invest in future growth and lead the digital custom parts space.”

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 second quarter 2021 financial results and third quarter 2021 outlook today, July 29, 2021 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/4ugs54z8. 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 digital manufacturing source for rapid prototyping and on-demand production. The technology-enabled company produces custom components in as fast as 1 day with automated 3D printing, CNC machining, sheet metal fabrication, and injection molding processes. Its digital approach to manufacturing enables accelerated time to market, reduces manufacturing costs, and enables supply chain agility throughout the product life cycle. 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.

 
Proto Labs, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
 
 

June 30,

 

December 31,

 

2021

 

 

2020

(Unaudited)

 

 

Assets
Current assets
Cash and cash equivalents

$

41,909

$

127,603

Short-term marketable securities

 

18,341

 

34,088

Accounts receivable, net

 

83,470

 

57,877

Inventory

 

9,111

 

10,862

Income taxes receivable

 

4,575

 

540

Prepaid expenses and other current assets

 

10,107

 

11,032

Total current assets

 

167,513

 

242,002

 
Property and equipment, net

 

288,495

 

282,666

Goodwill

 

407,191

 

128,752

Other intangible assets, net

 

41,674

 

14,350

Long-term marketable securities

 

28,700

 

59,357

Operating lease assets

 

8,801

 

9,855

Finance lease assets

 

2,147

 

2,396

Other long-term assets

 

4,769

 

4,826

Total assets

$

949,290

$

744,204

 
Liabilities and shareholders' equity
Current liabilities
Accounts payable

$

26,038

$

18,248

Accrued compensation

 

14,930

 

11,989

Accrued liabilities and other

 

15,072

 

16,193

Current contingent consideration

 

2,936

 

-

Current operating lease liabilities

 

2,847

 

3,272

Current finance lease liabilities

 

554

 

552

Income taxes payable

 

40

 

-

Total current liabilities

 

62,417

 

50,254

 
Long-term contingent consideration

 

2,693

 

-

Long-term operating lease liabilities

 

7,097

 

7,586

Long-term finance lease liabilities

 

1,639

 

1,919

Long-term deferred tax liabilities

 

36,898

 

33,854

Other long-term liabilities

 

6,569

 

6,235

 
Shareholders' equity

 

831,977

 

644,356

Total liabilities and shareholders' equity

$

949,290

$

744,204

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

Three Months Ended

Six Months Ended

June 30,

June 30,

 

2021

 

2020

 

2021

 

 

2020

Revenue
Injection Molding

$

58,168

$

57,894

$

114,527

 

$

112,670

CNC Machining

 

41,592

 

28,760

 

78,295

 

 

66,645

3D Printing

 

18,170

 

14,236

 

35,405

 

 

30,184

Sheet Metal

 

4,717

 

4,669

 

9,936

 

 

10,318

Other

 

401

 

1,016

 

1,011

 

 

1,866

Total revenue

 

123,048

 

106,575

 

239,174

 

 

221,683

 
Cost of revenue

 

66,423

 

54,119

 

127,219

 

 

111,127

Gross profit

 

56,625

 

52,456

 

111,955

 

 

110,556

 
Operating expenses
Marketing and sales

 

21,044

 

16,936

 

40,524

 

 

35,116

Research and development

 

11,060

 

8,648

 

23,241

 

 

17,635

General and administrative

 

8,417

 

12,521

 

27,825

 

 

26,629

Total operating expenses

 

40,521

 

38,105

 

91,590

 

 

79,380

Income from operations

 

16,104

 

14,351

 

20,365

 

 

31,176

Other income (loss), net

 

137

 

767

 

(176

)

 

1,821

Income before income taxes

 

16,241

 

15,118

 

20,189

 

 

32,997

Provision for income taxes

 

3,326

 

2,511

 

3,562

 

 

6,406

Net income

$

12,915

$

12,607

$

16,627

 

$

26,591

 
Net income per share:
Basic

$

0.47

$

0.47

$

0.60

 

$

1.00

Diluted

$

0.47

$

0.47

$

0.60

 

$

0.99

 
Shares used to compute net income per share:
Basic

 

27,735,732

 

26,660,498

 

27,600,684

 

 

26,718,652

Diluted

 

27,744,870

 

26,760,866

 

27,741,464

 

 

26,837,938

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

Six Months Ended

June 30,

 

2021

 

 

2020

 

Operating activities
Net income

$

16,627

 

$

26,591

 

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization

 

20,127

 

 

15,855

 

Stock-based compensation expense

 

10,561

 

 

6,672

 

Deferred taxes

 

419

 

 

5,651

 

Amortization of marketable securities

 

261

 

 

129

 

Realized gain on available-for-sale securities

 

(117

)

 

-

 

Other

 

125

 

 

(854

)

Changes in operating assets and liabilities

 

(19,511

)

 

(627

)

Changes in fair value of contingent consideration

 

(7,763

)

 

-

 

Net cash provided by operating activities

 

20,729

 

 

53,417

 

 
Investing activities
Purchases of property, equipment and other capital assets

 

(23,929

)

 

(33,305

)

Cash used for acquisitions, net of cash acquired

 

(127,413

)

 

-

 

Purchases of other assets and investments

 

-

 

 

(3,000

)

Purchases of marketable securities

 

(15,159

)

 

(57,212

)

Proceeds from sales of marketable securities

 

47,694

 

 

-

 

Proceeds from maturities of marketable securities

 

13,725

 

 

28,225

 

Net cash used in investing activities

 

(105,082

)

 

(65,292

)

 
Financing activities
Proceeds from exercises of stock options and other

 

3,838

 

 

2,855

 

Purchases of shares withheld for tax obligations

 

(4,209

)

 

(3,367

)

Repurchases of common stock

 

(1,210

)

 

(14,686

)

Principal repayments of finance lease obligations

 

(275

)

 

-

 

Net cash used in financing activities

 

(1,856

)

 

(15,198

)

Effect of exchange rate changes on cash and cash equivalents

 

515

 

 

(149

)

Net decrease in cash and cash equivalents

 

(85,694

)

 

(27,222

)

Cash and cash equivalents, beginning of period

 

127,603

 

 

125,225

 

Cash and cash equivalents, end of period

$

41,909

 

$

98,003

 

 
 
 
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

Six Months Ended

June 30,

June 30,

 

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

$

12,915

 

$

12,607

 

$

16,627

 

$

26,591

 

Add back:
Stock-based compensation expense

 

4,941

 

 

3,639

 

 

10,561

 

 

6,672

 

Amortization expense

 

1,490

 

 

754

 

 

3,033

 

 

1,508

 

Unrealized (gain) loss on foreign currency

 

(402

)

 

(139

)

 

220

 

 

(936

)

Transaction costs 1

 

(7,655

)

 

-

 

 

(5,140

)

 

-

 

Total adjustments 2

 

(1,626

)

 

4,254

 

 

8,674

 

 

7,244

 

Income tax benefits on adjustments 3

 

(575

)

 

(987

)

 

(3,576

)

 

(1,662

)

Non-GAAP net income

$

10,714

 

$

15,874

 

$

21,725

 

$

32,173

 

 
Non-GAAP net income per share:
Basic

$

0.39

 

$

0.60

 

$

0.79

 

$

1.20

 

Diluted

$

0.39

 

$

0.59

 

$

0.78

 

$

1.20

 

 
Shares used to compute non-GAAP net income per share:
Basic

 

27,735,732

 

 

26,660,498

 

 

27,600,684

 

 

26,718,652

 

Diluted

 

27,744,870

 

 

26,760,866

 

 

27,741,464

 

 

26,837,938

 

 
 
1 Transaction 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.
2 Stock-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

Six Months Ended

June 30,

June 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Cost of revenue

$

1,011

 

$

936

 

$

1,988

 

$

1,799

 

 
Marketing and sales

 

929

 

 

750

 

 

1,782

 

 

1,368

 

Research and development

 

744

 

 

607

 

 

1,368

 

 

1,128

 

General and administrative

 

(3,908

)

 

2,100

 

 

3,316

 

 

3,885

 

Total operating expenses

 

(2,235

)

 

3,457

 

 

6,466

 

 

6,381

 

 
Other (income) loss, net

 

(402

)

 

(139

)

 

220

 

 

(936

)

Total adjustments

$

(1,626

)

$

4,254

 

$

8,674

 

$

7,244

 

 
3 For the three and six-month periods ended June 30, 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

Six Months Ended

June 30,

June 30,

2021

2020

2021

2020

Revenue

$

123,048

 

$

106,575

 

$

239,174

 

$

221,683

 

Income from operations

 

16,104

 

 

14,351

 

 

20,365

 

 

31,176

 

GAAP operating margin

 

13.1

%

 

13.5

%

 

8.5

%

 

14.1

%

Add back:
Stock-based compensation expense

 

4,941

 

 

3,639

 

 

10,561

 

 

6,672

 

Amortization expense

 

1,490

 

 

754

 

 

3,033

 

 

1,508

 

Transaction costs 1

 

(7,655

)

 

-

 

 

(5,140

)

 

-

 

Total adjustments

 

(1,224

)

 

4,393

 

 

8,454

 

 

8,180

 

Non-GAAP income from operations

$

14,880

 

$

18,744

 

$

28,819

 

$

39,356

 

Non-GAAP operating margin

 

12.1

%

 

17.6

%

 

12.0

%

 

17.8

%

 
 

1 Transaction 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

 

Six Months Ended

June 30,

 

June 30,

2021

 

2020

 

2021

 

2020

GAAP net income

$

12,915

 

$

12,607

 

$

16,627

 

$

26,591

 

Amortization expense

 

1,490

 

 

754

 

 

3,033

 

 

1,508

 

Depreciation expense

 

8,578

 

 

7,143

 

 

17,094

 

 

14,347

 

Interest income, net

 

(65

)

 

(368

)

 

(152

)

 

(928

)

Tax expense

 

3,326

 

 

2,511

 

 

3,562

 

 

6,406

 

EBITDA

 

26,244

 

 

22,647

 

 

40,164

 

 

47,924

 

Add back:
Stock-based compensation expense

 

4,941

 

 

3,639

 

 

10,561

 

 

6,672

 

Unrealized (gain) loss on foreign currency

 

(402

)

 

(139

)

 

220

 

 

(936

)

Transaction costs 1

 

(7,655

)

 

-

 

 

(5,140

)

 

-

 

Total adjustments

 

(3,116

)

 

3,500

 

 

5,641

 

 

5,736

 

Adjusted EBITDA

$

23,128

 

$

26,147

 

$

45,805

 

$

53,660

 

 
 
1 Transaction 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
June 30, 2021

Three Months Ended
June 30, 2020

%

GAAP

Foreign Currency 1

Hubs Acquisition 2

Non-GAAP

GAAP

Change 3

% Change Organic 4

Revenues
United States

$

95,344

$

-

 

$

(4,626

)

$

90,718

$

86,823

9.8

%

4.5

%

Europe

 

24,655

 

(1,913

)

 

(4,314

)

 

18,428

 

16,729

47.4

 

10.2

 

Japan

 

3,049

 

54

 

 

-

 

 

3,103

 

3,023

0.9

 

2.6

 

Total Revenue

$

123,048

$

(1,859

)

$

(8,940

)

$

112,249

$

106,575

15.5

%

5.3

%

 
 

Six Months Ended
June 30, 2021

Six Months Ended
June 30, 2020

%

GAAP

Foreign Currency 1

Hubs Acquisition 2

Non-GAAP

GAAP

Change 3

% Change Organic 4

Revenues
United States

$

186,397

$

-

 

$

(7,783

)

$

178,614

$

176,899

5.4

%

1.0

%

Europe

 

46,104

 

(3,473

)

 

(6,920

)

 

35,711

 

37,516

22.9

 

(4.8

)

Japan

 

6,673

 

(31

)

 

-

 

 

6,642

 

7,268

(8.2

)

(8.6

)

Total Revenue

$

239,174

$

(3,504

)

$

(14,703

)

$

220,967

$

221,683

7.9

%

(0.3

)%

 
1 Revenue for the three and six-month periods ended June 30, 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 and six-month periods ended June 30, 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 and six-month periods ended June 30, 2020 to GAAP revenue for the three and six-month periods ended June 30, 2021.
4 This column presents the percentage change from GAAP revenue for the three and six-month periods ended June 30, 2020 to non-GAAP revenue for the three and six-month periods ended June 30, 2021 (as recalculated using the foreign currency exchange rates in effect during the three- and six-month periods ended June 30, 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

Six Months Ended

June 30,

June 30,

2021

2020

2021

2020

Unique product developers and engineers served

23,253

17,037

37,501

29,703

 

1 | 2  Next Page »



Review Article Be the first to review this article
Featured Video
Editorial
Jobs
Director, Industrial Machinery Solutions- SISW PLM for Siemens AG at Livonia, Michigan
Product Design Engineer - Softgoods for Apple Inc at Cupertino, California
Assistant Professor in Applied GIS for University of San Diego at San Diego, California
Senior Highway Engineer for RS&H at Jacksonville, Florida
GIS Specialist for Schneider Geospatial at Indianapolis, Indiana
ASIC Architects and Hardware Engineers at D. E. Shaw Research for D. E. Shaw Research at New York, New York
Upcoming Events
Canadian Manufacturing Technology Show 2021 at The International Centre (Hall 2) 6900 Airport Road Mississauga, Ontario L4V 1E8 Canada - Oct 4 - 7, 2021
Houstex 2021 at George R. Brown Convention Center Houston TX - Oct 5 - 7, 2021
Autodesk University 2021 | Free digital conference at United States - Oct 5 - 14, 2021
HxGN Live Design & Engineering 2021 - Virtual at United Kingdom - Oct 12 - 14, 2021



© 2021 Internet Business Systems, Inc.
670 Aberdeen Way, Milpitas, CA 95035
+1 (408) 882-6554 — Contact Us, or visit our other sites:
AECCafe - Architectural Design and Engineering EDACafe - Electronic Design Automation GISCafe - Geographical Information Services TechJobsCafe - Technical Jobs and Resumes ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy PolicyAdvertise