Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Protolabs Reports Financial Results for the Third Quarter of 2022 By: Proto Labs, Inc. via Business Wire November 04, 2022 at 06:00 AM EDT Revenue of $121.7 million in the Third Quarter of 2022; GAAP Earnings Per Share of $0.14, Non-GAAP Earnings Per Share of $0.40 Proto Labs, Inc. (NYSE: PRLB), the world’s leading provider of digital manufacturing services, today announced financial results for the third quarter ended September 30, 2022. Third Quarter 2022 Highlights include: Revenue for the third quarter of 2022 was $121.7 million, representing a 2.9 percent decrease compared to revenue of $125.3 million in the third quarter of 2021. Hubs generated $12.1 million of revenue in the third quarter, representing year-over-year growth of 38.5 percent. On a GAAP basis, costs related to the closure of Japan operations were $1.2 million in the quarter. Total costs year to date are $6.4 million. These costs have been excluded from our Non-GAAP results. See “Non-GAAP Financial Measures” below. Net income was $4.0 million, or $0.14 per diluted share. Non-GAAP net income was $10.9 million, or $0.40 per diluted share. “We experienced continued softening of our Injection Molding business, however, we are pleased with the continued growth of our other digital manufacturing services and Hubs business,” said Rob Bodor, President and Chief Executive Officer. “As we face an uncertain economic environment ahead, I am confident in our strategy and the value we bring to market, and the ability of our team to deliver long term revenue growth and profitability.” Additional Third Quarter 2022 Highlights include: Protolabs served 23,816 unique product developers during the third quarter of 2022. Gross margin was 44.1 percent of revenue, compared to 45.2 percent of revenue in the second quarter of 2022. Non-GAAP gross margin was 44.8 percent of revenue, compared to 45.9 percent of revenue in the second quarter of 2022. EBITDA was $15.5 million, or 12.7 percent of revenue. Adjusted EBITDA was $22.0 million, or 18.0 percent of revenue. Cash and investments balance was $113.9 million as of September 30, 2022. “Our financial position remains strong as we produced $20.5 million in cash from operations in the quarter,” said Dan Schumacher, Chief Financial Officer. “As we monitor the economy, we are tightening our cost controls and will continue to focus investments to fuel the execution of our strategy.” 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 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, costs related to the Japan closure activities 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 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, costs related to the Japan closure activities and transaction costs (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, costs related to the Japan closure activities 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 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, costs related to the Japan closure activities and transaction costs (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, costs related to Japan closure activities 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 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 2022 financial results and fourth quarter 2022 outlook today, November 4, 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/gfmzxbyg. 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. Proto Labs, Inc. Condensed Consolidated Balance Sheets (In thousands) September 30, December 31, 2022 2021 (Unaudited) Assets Current assets Cash and cash equivalents $ 59,361 $ 65,929 Short-term marketable securities 25,253 11,580 Accounts receivable, net 80,611 80,051 Inventory 14,617 13,161 Income taxes receivable 763 1,321 Prepaid expenses and other current assets 11,752 11,450 Total current assets 192,357 183,492 Property and equipment, net 259,856 280,346 Goodwill 383,558 400,610 Other intangible assets, net 31,907 37,998 Long-term marketable securities 29,257 14,340 Operating lease assets 4,293 5,578 Finance lease assets 1,524 1,898 Other long-term assets 4,186 4,320 Total assets $ 906,938 $ 928,582 Liabilities and shareholders' equity Current liabilities Accounts payable $ 16,893 $ 25,364 Accrued compensation 15,087 13,704 Accrued liabilities and other 25,478 11,980 Current operating lease liabilities 1,773 3,298 Current finance lease liabilities 1,484 550 Income taxes payable 5 - Total current liabilities 60,720 54,896 Long-term operating lease liabilities 2,477 2,245 Long-term finance lease liabilities - 1,351 Long-term deferred tax liabilities 26,864 35,892 Other long-term liabilities 6,031 5,705 Shareholders' equity 810,846 828,493 Total liabilities and shareholders' equity $ 906,938 $ 928,582 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, 2022 2021 2022 2021 Revenue Injection Molding $ 48,940 $ 57,685 $ 155,693 $ 172,212 CNC Machining 47,489 43,658 141,809 121,953 3D Printing 19,823 18,589 59,458 53,994 Sheet Metal 5,219 4,854 15,066 14,790 Other 250 556 765 1,567 Total revenue 121,721 125,342 372,791 364,516 Cost of revenue 68,089 70,018 205,933 197,237 Gross profit 53,632 55,324 166,858 167,279 Operating expenses Marketing and sales 20,594 21,422 62,235 61,946 Research and development 9,309 10,614 29,316 33,855 General and administrative 16,477 16,361 49,770 44,186 Closure of Japan business 1,194 - 6,388 - Total operating expenses 47,574 48,397 147,709 139,987 Income from operations 6,058 6,927 19,149 27,292 Other income (loss), net (24) 136 (323 ) (40) Income before income taxes 6,034 7,063 18,826 27,252 Provision for income taxes 2,083 2,228 7,223 5,790 Net income $ 3,951 $ 4,835 $ 11,603 $ 21,462 Net income per share: Basic $ 0.14 $ 0.17 $ 0.42 $ 0.78 Diluted $ 0.14 $ 0.17 $ 0.42 $ 0.77 Shares used to compute net income per share: Basic 27,505,097 27,713,229 27,512,057 27,638,611 Diluted 27,508,217 27,730,105 27,522,734 27,707,784 Proto Labs, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Nine Months Ended September 30, 2022 2021 Operating activities Net income $ 11,603 $ 21,462 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 29,981 30,231 Stock-based compensation expense 13,335 15,539 Deferred taxes (8,920 ) (139 ) Changes in fair value of contingent consideration - (8,513 ) Impairments related to closure of Japan business 2,842 - Gain on disposal of property and equipment (1,174 ) - Other 11 442 Changes in operating assets and liabilities 3,886 (26,797 ) Net cash provided by operating activities 51,564 32,225 Investing activities Purchases of property, equipment and other capital assets (16,414 ) (27,956 ) Proceeds from sales of property, equipment and other capital assets 3,227 - Cash used for acquisitions, net of cash acquired - (127,413 ) Purchases of marketable securities (45,872 ) (15,159 ) Proceeds from sales of marketable securities 1,998 57,089 Proceeds from call redemptions and maturities of marketable securities 13,696 15,114 Net cash used in investing activities (43,365 ) (98,325 ) Financing activities Proceeds from exercises of stock options and other 2,311 3,838 Purchases of shares withheld for tax obligations (1,615 ) (4,209 ) Repurchases of common stock (13,074 ) (13,036 ) Principal repayments of finance lease obligations (417 ) (413 ) Net cash used in financing activities (12,795 ) (13,820 ) Effect of exchange rate changes on cash and cash equivalents (1,972 ) 119 Net decrease in cash and cash equivalents (6,568 ) (79,801 ) Cash and cash equivalents, beginning of period 65,929 127,603 Cash and cash equivalents, end of period $ 59,361 $ 47,802 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, 2022 2021 2022 2021 Non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, costs related to Japan closure activities and transaction costs GAAP net income $ 3,951 $ 4,835 $ 11,603 $ 21,462 Add back: Stock-based compensation expense 4,907 4,978 13,335 15,539 Amortization expense 1,510 1,568 4,582 4,601 Unrealized (gain) loss on foreign currency 382 121 742 341 Costs related to Japan closure activities 1,194 - 6,388 - Transaction costs 1 - (730 ) - (5,870 ) Total adjustments 2 7,993 5,937 25,047 14,611 Income tax benefits on adjustments 3 (1,060 ) (1,063 ) (2,518 ) (4,639 ) Non-GAAP net income $ 10,884 $ 9,709 $ 34,132 $ 31,434 Non-GAAP net income per share: Basic $ 0.40 $ 0.35 $ 1.24 $ 1.14 Diluted $ 0.40 $ 0.35 $ 1.24 $ 1.13 Shares used to compute non-GAAP net income per share: Basic 27,505,097 27,713,229 27,512,057 27,638,611 Diluted 27,508,217 27,730,105 27,522,734 27,707,784 1 Transaction costs include direct costs incurred in the Company's 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, costs related to Japan closure activities and transaction costs were included in the following GAAP consolidated statement of operations categories: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Cost of revenue $ 902 $ 986 $ 2,701 $ 2,974 Marketing and sales 929 1,059 2,479 2,841 Research and development 602 776 1,702 2,144 General and administrative 3,984 2,995 11,035 6,311 Closure of Japan business 1,194 - 6,388 - Total operating expenses 6,709 4,830 21,604 11,296 Other (income) expense, net 382 121 742 341 Total adjustments $ 7,993 $ 5,937 $ 25,047 $ 14,611 3 For the three- and nine-month periods ended September 30, 2022 and 2021, 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 Nine Months Ended Three Months Ended September 30, September 30, June 30, 2022 2021 2022 2021 2022 2021 Revenue $ 121,721 $ 125,342 $ 372,791 $ 364,516 $ 126,902 $ 123,048 Gross Profit 53,632 55,324 166,858 167,279 57,422 56,625 GAAP gross margin 44.1 % 44.1 % 44.8 % 45.9 % 45.2 % 46.0 % Add back: Stock-based compensation expense 560 644 1,674 1,947 528 668 Amortization expense 342 342 1,027 1,027 342 343 Total adjustments 902 986 2,701 2,974 870 1,011 Non-GAAP gross profit $ 54,534 $ 56,310 $ 169,559 $ 170,253 $ 58,292 $ 57,636 Non-GAAP gross margin 44.8 % 44.9 % 45.5 % 46.7 % 45.9 % 46.8 % Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Gross Margin Excluding Japan (In thousands) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ 121,721 $ 125,342 $ 372,791 $ 364,516 Revenue excluding Japan $ 120,434 $ 122,282 $ 364,562 $ 354,783 Gross Profit 53,632 55,324 166,858 167,279 GAAP gross margin 44.1 % 44.1 % 44.8 % 45.9 % Less: Japan gross profit 47 1,151 3,150 3,845 Gross Profit excluding Japan 53,585 54,173 163,708 163,434 GAAP gross margin excluding Japan 44.5 % 44.3 % 44.9 % 46.1 % Add back: Stock-based compensation expense 560 644 1,674 1,947 Amortization expense 342 342 1,027 1,027 Less: Japan stock-based compensation expense 13 26 61 70 Japan amortization expense - - - - Total adjustments 889 960 2,640 2,904 Non-GAAP gross profit excluding Japan $ 54,474 $ 55,133 $ 166,348 $ 166,338 Non-GAAP gross margin excluding Japan 45.2 % 45.1 % 45.6 % 46.9 % Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Operating Margin (In thousands) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ 121,721 $ 125,342 $ 372,791 $ 364,516 Income from operations 6,058 6,927 19,149 27,292 GAAP operating margin 5.0 % 5.5 % 5.1 % 7.5 % Add back: Stock-based compensation expense 4,907 4,978 13,335 15,539 Amortization expense 1,510 1,568 4,582 4,601 Transaction costs 1 - (730 ) - (5,870 ) Costs related to Japan closure activities 1,194 - 6,388 - Total adjustments 7,611 5,816 24,305 14,270 Non-GAAP income from operations $ 13,669 $ 12,743 $ 43,454 $ 41,562 Non-GAAP operating margin 11.2 % 10.2 % 11.7 % 11.4 % 1 Transaction costs include direct costs incurred in the Company's 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 to Non-GAAP Operating Margin Excluding Japan (In thousands) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ 121,721 $ 125,342 $ 372,791 $ 364,516 Revenue excluding Japan $ 120,434 $ 122,282 $ 364,562 $ 354,783 Income from operations 6,058 6,927 19,149 27,292 GAAP operating margin 5.0 % 5.5 % 5.1 % 7.5 % Less: Japan income from operations (724 ) (521 ) (720 ) (1,174 ) Income from operations excluding Japan 6,782 7,448 19,869 28,466 GAAP operating margin excluding Japan 5.6 % 6.1 % 5.5 % 8.0 % Add back: Stock-based compensation expense 4,907 4,978 13,335 15,539 Amortization expense 1,510 1,568 4,582 4,601 Transaction costs 1 - (730 ) - (5,870 ) Costs related to Japan closure activities 1,194 - 6,388 - Less: Japan stock-based compensation expense 89 160 386 464 Japan amortization expense - - - - Total adjustments 7,522 5,656 23,919 13,806 Non-GAAP income from operations excluding Japan $ 14,304 $ 13,104 $ 43,788 $ 42,272 Non-GAAP operating margin excluding Japan 11.9 % 10.7 % 12.0 % 11.9 % 1 Transaction costs include direct costs incurred in the Company's 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 Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ 121,721 $ 125,342 $ 372,791 $ 364,516 GAAP net income 3,951 4,835 11,603 21,462 GAAP net income margin 3.2 % 3.9 % 3.1 % 5.9 % Add back: Amortization expense $ 1,510 $ 1,568 $ 4,582 $ 4,601 Depreciation expense 8,197 8,536 25,399 25,630 Interest income, net (265 ) (55 ) (459 ) (207 ) Tax expense 2,083 2,228 7,223 5,790 EBITDA 15,476 17,112 48,348 57,276 EBITDA Margin 12.7 % 13.7 % 13.0 % 15.7 % Add back: Stock-based compensation expense 4,907 4,978 13,335 15,539 Unrealized (gain) loss on foreign currency 382 121 742 341 Costs related to Japan closure activities 1,194 - 6,388 - Transaction costs 1 - (730 ) - (5,870 ) Total adjustments 6,483 4,369 20,465 10,010 Adjusted EBITDA $ 21,959 $ 21,481 $ 68,813 $ 67,286 Adjusted EBITDA Margin 18.0 % 17.1 % 18.5 % 18.5 % 1 Transaction costs include direct costs incurred in the Company's 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 by Region (In thousands) (Unaudited) Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 % % GAAP Foreign Currency1 Hubs Acquisition Non-GAAP GAAP Change3 Change Organic4 Revenues United States $ 98,970 $ - $ - $ 98,970 $ 100,127 (1.2 )% (1.2 )% Europe 21,464 3,789 - 25,253 22,155 (3.1 ) 14.0 Japan 1,287 310 - 1,597 3,060 (57.9 ) (47.8 ) Total Revenue $ 121,721 $ 4,099 $ - $ 125,820 $ 125,342 (2.9 )% 0.4 % Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 % % GAAP Foreign Currency1 Hubs Acquisition2 Non-GAAP GAAP Change3 Change Organic4 Revenues United States $ 295,121 $ - $ (1,049 ) $ 294,072 $ 286,524 3.0 % 2.6 % Europe 69,441 7,165 (1,279 ) 75,327 68,259 1.7 10.4 Japan 8,229 1,226 - 9,455 9,733 (15.5 ) (2.9 ) Total Revenue $ 372,791 $ 8,391 $ (2,328 ) $ 378,854 $ 364,516 2.3 % 3.9 % 1 Revenue for the three- and nine-month periods ended September 30, 2022 has been recalculated using 2021 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 nine-month period ended September 30, 2022 has been recalculated to exclude revenue earned from the Company's acquisition of Hubs, Inc. for the period from January 1, 2022 to January 21, 2022 to provide information useful in evaluating the underlying business trends excluding the impact of acquisitions. The Hubs, Inc. acquisition occurred on January 22, 2021 and was included in 2021 revenue after that date. 3 This column presents the percentage change from GAAP revenue for the three- and nine-month periods ended September 30, 2021 to GAAP revenue for the three- and nine-month periods ended September 30, 2022. 4 This column presents the percentage change from GAAP revenue for the three- and nine-month periods ended September 30, 2021 to non-GAAP revenue for the three- and nine-month periods ended September 30, 2022 (as recalculated using the foreign currency exchange rates in effect during the three- and nine-month periods ended September 30, 2021, excluding the impact of Hubs, Inc. acquisition) 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, 2022 Three Months Ended September 30, 2021 % % GAAP Foreign Currency1 Hubs Acquisition Non-GAAP GAAP Change3 Change Organic4 Revenues Injection Molding $ 48,940 $ 1,677 $ - $ 50,617 $ 57,685 (15.2 )% (12.3 )% CNC Machining 47,489 1,580 - 49,069 43,658 8.8 12.4 3D Printing 19,823 803 - 20,626 18,589 6.6 11.0 Sheet Metal 5,219 39 - 5,258 4,854 7.5 8.3 Other 250 - - 250 556 (55.0 ) (55.0 ) Total Revenue $ 121,721 $ 4,099 $ - $ 125,820 $ 125,342 (2.9 )% 0.4 % Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 % % GAAP Foreign Currency1 Hubs Acquisition2 Non-GAAP GAAP Change3 Change Organic4 Revenues Injection Molding $ 155,693 $ 4,102 $ (189 ) $ 159,606 $ 172,212 (9.6 )% (7.3 )% CNC Machining 141,809 2,693 (1,637 ) 142,865 121,953 16.3 17.1 3D Printing 59,458 1,553 (408 ) 60,603 53,994 10.1 12.2 Sheet Metal 15,066 39 (84 ) 15,021 14,790 1.9 1.6 Other 765 4 (10 ) 759 1,567 (51.2 ) (51.6 ) Total Revenue $ 372,791 $ 8,391 $ (2,328 ) $ 378,854 $ 364,516 2.3 % 3.9 % 1 Revenue for the three- and nine-month periods ended September 30, 2022 has been recalculated using 2021 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 nine-month period ended September 30, 2022 has been recalculated to exclude revenue earned from the Company's acquisition of Hubs, Inc. for the period from January 1, 2022 to January 21, 2022 to provide information useful in evaluating the underlying business trends excluding the impact of acquisitions. The Hubs, Inc. acquisition occurred on January 22, 2021 and was included in 2021 revenue after that date. 3 This column presents the percentage change from GAAP revenue for the three- and nine-month periods ended September 30, 2021 to GAAP revenue for the three- and nine-month periods ended September 30, 2022. 4 This column presents the percentage change from GAAP revenue for the three- and nine-month periods ended September 30, 2021 to non-GAAP revenue for the three- and nine-month periods ended September 30, 2022 (as recalculated using the foreign currency exchange rates in effect during the three- and nine-month periods ended September 30, 2021, 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 Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Unique product developers and engineers served 23,816 23,457 47,793 46,687 View source version on businesswire.com: https://www.businesswire.com/news/home/20221104005157/en/Contacts Investor Relations Contact Protolabs Ryan Johnsrud, 612-225-4873 Manager – Investor Relations and FP&A ryan.johnsrud@protolabs.com Media Contact Protolabs Brent Renneke, 763-479-7704 PR & Media Strategist brent.renneke@protolabs.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Protolabs Reports Financial Results for the Third Quarter of 2022 By: Proto Labs, Inc. via Business Wire November 04, 2022 at 06:00 AM EDT Revenue of $121.7 million in the Third Quarter of 2022; GAAP Earnings Per Share of $0.14, Non-GAAP Earnings Per Share of $0.40 Proto Labs, Inc. (NYSE: PRLB), the world’s leading provider of digital manufacturing services, today announced financial results for the third quarter ended September 30, 2022. Third Quarter 2022 Highlights include: Revenue for the third quarter of 2022 was $121.7 million, representing a 2.9 percent decrease compared to revenue of $125.3 million in the third quarter of 2021. Hubs generated $12.1 million of revenue in the third quarter, representing year-over-year growth of 38.5 percent. On a GAAP basis, costs related to the closure of Japan operations were $1.2 million in the quarter. Total costs year to date are $6.4 million. These costs have been excluded from our Non-GAAP results. See “Non-GAAP Financial Measures” below. Net income was $4.0 million, or $0.14 per diluted share. Non-GAAP net income was $10.9 million, or $0.40 per diluted share. “We experienced continued softening of our Injection Molding business, however, we are pleased with the continued growth of our other digital manufacturing services and Hubs business,” said Rob Bodor, President and Chief Executive Officer. “As we face an uncertain economic environment ahead, I am confident in our strategy and the value we bring to market, and the ability of our team to deliver long term revenue growth and profitability.” Additional Third Quarter 2022 Highlights include: Protolabs served 23,816 unique product developers during the third quarter of 2022. Gross margin was 44.1 percent of revenue, compared to 45.2 percent of revenue in the second quarter of 2022. Non-GAAP gross margin was 44.8 percent of revenue, compared to 45.9 percent of revenue in the second quarter of 2022. EBITDA was $15.5 million, or 12.7 percent of revenue. Adjusted EBITDA was $22.0 million, or 18.0 percent of revenue. Cash and investments balance was $113.9 million as of September 30, 2022. “Our financial position remains strong as we produced $20.5 million in cash from operations in the quarter,” said Dan Schumacher, Chief Financial Officer. “As we monitor the economy, we are tightening our cost controls and will continue to focus investments to fuel the execution of our strategy.” 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 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, costs related to the Japan closure activities 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 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, costs related to the Japan closure activities and transaction costs (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, costs related to the Japan closure activities 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 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, costs related to the Japan closure activities and transaction costs (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, costs related to Japan closure activities 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 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 2022 financial results and fourth quarter 2022 outlook today, November 4, 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/gfmzxbyg. 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. Proto Labs, Inc. Condensed Consolidated Balance Sheets (In thousands) September 30, December 31, 2022 2021 (Unaudited) Assets Current assets Cash and cash equivalents $ 59,361 $ 65,929 Short-term marketable securities 25,253 11,580 Accounts receivable, net 80,611 80,051 Inventory 14,617 13,161 Income taxes receivable 763 1,321 Prepaid expenses and other current assets 11,752 11,450 Total current assets 192,357 183,492 Property and equipment, net 259,856 280,346 Goodwill 383,558 400,610 Other intangible assets, net 31,907 37,998 Long-term marketable securities 29,257 14,340 Operating lease assets 4,293 5,578 Finance lease assets 1,524 1,898 Other long-term assets 4,186 4,320 Total assets $ 906,938 $ 928,582 Liabilities and shareholders' equity Current liabilities Accounts payable $ 16,893 $ 25,364 Accrued compensation 15,087 13,704 Accrued liabilities and other 25,478 11,980 Current operating lease liabilities 1,773 3,298 Current finance lease liabilities 1,484 550 Income taxes payable 5 - Total current liabilities 60,720 54,896 Long-term operating lease liabilities 2,477 2,245 Long-term finance lease liabilities - 1,351 Long-term deferred tax liabilities 26,864 35,892 Other long-term liabilities 6,031 5,705 Shareholders' equity 810,846 828,493 Total liabilities and shareholders' equity $ 906,938 $ 928,582 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, 2022 2021 2022 2021 Revenue Injection Molding $ 48,940 $ 57,685 $ 155,693 $ 172,212 CNC Machining 47,489 43,658 141,809 121,953 3D Printing 19,823 18,589 59,458 53,994 Sheet Metal 5,219 4,854 15,066 14,790 Other 250 556 765 1,567 Total revenue 121,721 125,342 372,791 364,516 Cost of revenue 68,089 70,018 205,933 197,237 Gross profit 53,632 55,324 166,858 167,279 Operating expenses Marketing and sales 20,594 21,422 62,235 61,946 Research and development 9,309 10,614 29,316 33,855 General and administrative 16,477 16,361 49,770 44,186 Closure of Japan business 1,194 - 6,388 - Total operating expenses 47,574 48,397 147,709 139,987 Income from operations 6,058 6,927 19,149 27,292 Other income (loss), net (24) 136 (323 ) (40) Income before income taxes 6,034 7,063 18,826 27,252 Provision for income taxes 2,083 2,228 7,223 5,790 Net income $ 3,951 $ 4,835 $ 11,603 $ 21,462 Net income per share: Basic $ 0.14 $ 0.17 $ 0.42 $ 0.78 Diluted $ 0.14 $ 0.17 $ 0.42 $ 0.77 Shares used to compute net income per share: Basic 27,505,097 27,713,229 27,512,057 27,638,611 Diluted 27,508,217 27,730,105 27,522,734 27,707,784 Proto Labs, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Nine Months Ended September 30, 2022 2021 Operating activities Net income $ 11,603 $ 21,462 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 29,981 30,231 Stock-based compensation expense 13,335 15,539 Deferred taxes (8,920 ) (139 ) Changes in fair value of contingent consideration - (8,513 ) Impairments related to closure of Japan business 2,842 - Gain on disposal of property and equipment (1,174 ) - Other 11 442 Changes in operating assets and liabilities 3,886 (26,797 ) Net cash provided by operating activities 51,564 32,225 Investing activities Purchases of property, equipment and other capital assets (16,414 ) (27,956 ) Proceeds from sales of property, equipment and other capital assets 3,227 - Cash used for acquisitions, net of cash acquired - (127,413 ) Purchases of marketable securities (45,872 ) (15,159 ) Proceeds from sales of marketable securities 1,998 57,089 Proceeds from call redemptions and maturities of marketable securities 13,696 15,114 Net cash used in investing activities (43,365 ) (98,325 ) Financing activities Proceeds from exercises of stock options and other 2,311 3,838 Purchases of shares withheld for tax obligations (1,615 ) (4,209 ) Repurchases of common stock (13,074 ) (13,036 ) Principal repayments of finance lease obligations (417 ) (413 ) Net cash used in financing activities (12,795 ) (13,820 ) Effect of exchange rate changes on cash and cash equivalents (1,972 ) 119 Net decrease in cash and cash equivalents (6,568 ) (79,801 ) Cash and cash equivalents, beginning of period 65,929 127,603 Cash and cash equivalents, end of period $ 59,361 $ 47,802 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, 2022 2021 2022 2021 Non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, costs related to Japan closure activities and transaction costs GAAP net income $ 3,951 $ 4,835 $ 11,603 $ 21,462 Add back: Stock-based compensation expense 4,907 4,978 13,335 15,539 Amortization expense 1,510 1,568 4,582 4,601 Unrealized (gain) loss on foreign currency 382 121 742 341 Costs related to Japan closure activities 1,194 - 6,388 - Transaction costs 1 - (730 ) - (5,870 ) Total adjustments 2 7,993 5,937 25,047 14,611 Income tax benefits on adjustments 3 (1,060 ) (1,063 ) (2,518 ) (4,639 ) Non-GAAP net income $ 10,884 $ 9,709 $ 34,132 $ 31,434 Non-GAAP net income per share: Basic $ 0.40 $ 0.35 $ 1.24 $ 1.14 Diluted $ 0.40 $ 0.35 $ 1.24 $ 1.13 Shares used to compute non-GAAP net income per share: Basic 27,505,097 27,713,229 27,512,057 27,638,611 Diluted 27,508,217 27,730,105 27,522,734 27,707,784 1 Transaction costs include direct costs incurred in the Company's 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, costs related to Japan closure activities and transaction costs were included in the following GAAP consolidated statement of operations categories: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Cost of revenue $ 902 $ 986 $ 2,701 $ 2,974 Marketing and sales 929 1,059 2,479 2,841 Research and development 602 776 1,702 2,144 General and administrative 3,984 2,995 11,035 6,311 Closure of Japan business 1,194 - 6,388 - Total operating expenses 6,709 4,830 21,604 11,296 Other (income) expense, net 382 121 742 341 Total adjustments $ 7,993 $ 5,937 $ 25,047 $ 14,611 3 For the three- and nine-month periods ended September 30, 2022 and 2021, 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 Nine Months Ended Three Months Ended September 30, September 30, June 30, 2022 2021 2022 2021 2022 2021 Revenue $ 121,721 $ 125,342 $ 372,791 $ 364,516 $ 126,902 $ 123,048 Gross Profit 53,632 55,324 166,858 167,279 57,422 56,625 GAAP gross margin 44.1 % 44.1 % 44.8 % 45.9 % 45.2 % 46.0 % Add back: Stock-based compensation expense 560 644 1,674 1,947 528 668 Amortization expense 342 342 1,027 1,027 342 343 Total adjustments 902 986 2,701 2,974 870 1,011 Non-GAAP gross profit $ 54,534 $ 56,310 $ 169,559 $ 170,253 $ 58,292 $ 57,636 Non-GAAP gross margin 44.8 % 44.9 % 45.5 % 46.7 % 45.9 % 46.8 % Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Gross Margin Excluding Japan (In thousands) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ 121,721 $ 125,342 $ 372,791 $ 364,516 Revenue excluding Japan $ 120,434 $ 122,282 $ 364,562 $ 354,783 Gross Profit 53,632 55,324 166,858 167,279 GAAP gross margin 44.1 % 44.1 % 44.8 % 45.9 % Less: Japan gross profit 47 1,151 3,150 3,845 Gross Profit excluding Japan 53,585 54,173 163,708 163,434 GAAP gross margin excluding Japan 44.5 % 44.3 % 44.9 % 46.1 % Add back: Stock-based compensation expense 560 644 1,674 1,947 Amortization expense 342 342 1,027 1,027 Less: Japan stock-based compensation expense 13 26 61 70 Japan amortization expense - - - - Total adjustments 889 960 2,640 2,904 Non-GAAP gross profit excluding Japan $ 54,474 $ 55,133 $ 166,348 $ 166,338 Non-GAAP gross margin excluding Japan 45.2 % 45.1 % 45.6 % 46.9 % Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Operating Margin (In thousands) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ 121,721 $ 125,342 $ 372,791 $ 364,516 Income from operations 6,058 6,927 19,149 27,292 GAAP operating margin 5.0 % 5.5 % 5.1 % 7.5 % Add back: Stock-based compensation expense 4,907 4,978 13,335 15,539 Amortization expense 1,510 1,568 4,582 4,601 Transaction costs 1 - (730 ) - (5,870 ) Costs related to Japan closure activities 1,194 - 6,388 - Total adjustments 7,611 5,816 24,305 14,270 Non-GAAP income from operations $ 13,669 $ 12,743 $ 43,454 $ 41,562 Non-GAAP operating margin 11.2 % 10.2 % 11.7 % 11.4 % 1 Transaction costs include direct costs incurred in the Company's 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 to Non-GAAP Operating Margin Excluding Japan (In thousands) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ 121,721 $ 125,342 $ 372,791 $ 364,516 Revenue excluding Japan $ 120,434 $ 122,282 $ 364,562 $ 354,783 Income from operations 6,058 6,927 19,149 27,292 GAAP operating margin 5.0 % 5.5 % 5.1 % 7.5 % Less: Japan income from operations (724 ) (521 ) (720 ) (1,174 ) Income from operations excluding Japan 6,782 7,448 19,869 28,466 GAAP operating margin excluding Japan 5.6 % 6.1 % 5.5 % 8.0 % Add back: Stock-based compensation expense 4,907 4,978 13,335 15,539 Amortization expense 1,510 1,568 4,582 4,601 Transaction costs 1 - (730 ) - (5,870 ) Costs related to Japan closure activities 1,194 - 6,388 - Less: Japan stock-based compensation expense 89 160 386 464 Japan amortization expense - - - - Total adjustments 7,522 5,656 23,919 13,806 Non-GAAP income from operations excluding Japan $ 14,304 $ 13,104 $ 43,788 $ 42,272 Non-GAAP operating margin excluding Japan 11.9 % 10.7 % 12.0 % 11.9 % 1 Transaction costs include direct costs incurred in the Company's 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 Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ 121,721 $ 125,342 $ 372,791 $ 364,516 GAAP net income 3,951 4,835 11,603 21,462 GAAP net income margin 3.2 % 3.9 % 3.1 % 5.9 % Add back: Amortization expense $ 1,510 $ 1,568 $ 4,582 $ 4,601 Depreciation expense 8,197 8,536 25,399 25,630 Interest income, net (265 ) (55 ) (459 ) (207 ) Tax expense 2,083 2,228 7,223 5,790 EBITDA 15,476 17,112 48,348 57,276 EBITDA Margin 12.7 % 13.7 % 13.0 % 15.7 % Add back: Stock-based compensation expense 4,907 4,978 13,335 15,539 Unrealized (gain) loss on foreign currency 382 121 742 341 Costs related to Japan closure activities 1,194 - 6,388 - Transaction costs 1 - (730 ) - (5,870 ) Total adjustments 6,483 4,369 20,465 10,010 Adjusted EBITDA $ 21,959 $ 21,481 $ 68,813 $ 67,286 Adjusted EBITDA Margin 18.0 % 17.1 % 18.5 % 18.5 % 1 Transaction costs include direct costs incurred in the Company's 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 by Region (In thousands) (Unaudited) Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 % % GAAP Foreign Currency1 Hubs Acquisition Non-GAAP GAAP Change3 Change Organic4 Revenues United States $ 98,970 $ - $ - $ 98,970 $ 100,127 (1.2 )% (1.2 )% Europe 21,464 3,789 - 25,253 22,155 (3.1 ) 14.0 Japan 1,287 310 - 1,597 3,060 (57.9 ) (47.8 ) Total Revenue $ 121,721 $ 4,099 $ - $ 125,820 $ 125,342 (2.9 )% 0.4 % Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 % % GAAP Foreign Currency1 Hubs Acquisition2 Non-GAAP GAAP Change3 Change Organic4 Revenues United States $ 295,121 $ - $ (1,049 ) $ 294,072 $ 286,524 3.0 % 2.6 % Europe 69,441 7,165 (1,279 ) 75,327 68,259 1.7 10.4 Japan 8,229 1,226 - 9,455 9,733 (15.5 ) (2.9 ) Total Revenue $ 372,791 $ 8,391 $ (2,328 ) $ 378,854 $ 364,516 2.3 % 3.9 % 1 Revenue for the three- and nine-month periods ended September 30, 2022 has been recalculated using 2021 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 nine-month period ended September 30, 2022 has been recalculated to exclude revenue earned from the Company's acquisition of Hubs, Inc. for the period from January 1, 2022 to January 21, 2022 to provide information useful in evaluating the underlying business trends excluding the impact of acquisitions. The Hubs, Inc. acquisition occurred on January 22, 2021 and was included in 2021 revenue after that date. 3 This column presents the percentage change from GAAP revenue for the three- and nine-month periods ended September 30, 2021 to GAAP revenue for the three- and nine-month periods ended September 30, 2022. 4 This column presents the percentage change from GAAP revenue for the three- and nine-month periods ended September 30, 2021 to non-GAAP revenue for the three- and nine-month periods ended September 30, 2022 (as recalculated using the foreign currency exchange rates in effect during the three- and nine-month periods ended September 30, 2021, excluding the impact of Hubs, Inc. acquisition) 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, 2022 Three Months Ended September 30, 2021 % % GAAP Foreign Currency1 Hubs Acquisition Non-GAAP GAAP Change3 Change Organic4 Revenues Injection Molding $ 48,940 $ 1,677 $ - $ 50,617 $ 57,685 (15.2 )% (12.3 )% CNC Machining 47,489 1,580 - 49,069 43,658 8.8 12.4 3D Printing 19,823 803 - 20,626 18,589 6.6 11.0 Sheet Metal 5,219 39 - 5,258 4,854 7.5 8.3 Other 250 - - 250 556 (55.0 ) (55.0 ) Total Revenue $ 121,721 $ 4,099 $ - $ 125,820 $ 125,342 (2.9 )% 0.4 % Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 % % GAAP Foreign Currency1 Hubs Acquisition2 Non-GAAP GAAP Change3 Change Organic4 Revenues Injection Molding $ 155,693 $ 4,102 $ (189 ) $ 159,606 $ 172,212 (9.6 )% (7.3 )% CNC Machining 141,809 2,693 (1,637 ) 142,865 121,953 16.3 17.1 3D Printing 59,458 1,553 (408 ) 60,603 53,994 10.1 12.2 Sheet Metal 15,066 39 (84 ) 15,021 14,790 1.9 1.6 Other 765 4 (10 ) 759 1,567 (51.2 ) (51.6 ) Total Revenue $ 372,791 $ 8,391 $ (2,328 ) $ 378,854 $ 364,516 2.3 % 3.9 % 1 Revenue for the three- and nine-month periods ended September 30, 2022 has been recalculated using 2021 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 nine-month period ended September 30, 2022 has been recalculated to exclude revenue earned from the Company's acquisition of Hubs, Inc. for the period from January 1, 2022 to January 21, 2022 to provide information useful in evaluating the underlying business trends excluding the impact of acquisitions. The Hubs, Inc. acquisition occurred on January 22, 2021 and was included in 2021 revenue after that date. 3 This column presents the percentage change from GAAP revenue for the three- and nine-month periods ended September 30, 2021 to GAAP revenue for the three- and nine-month periods ended September 30, 2022. 4 This column presents the percentage change from GAAP revenue for the three- and nine-month periods ended September 30, 2021 to non-GAAP revenue for the three- and nine-month periods ended September 30, 2022 (as recalculated using the foreign currency exchange rates in effect during the three- and nine-month periods ended September 30, 2021, 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 Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Unique product developers and engineers served 23,816 23,457 47,793 46,687 View source version on businesswire.com: https://www.businesswire.com/news/home/20221104005157/en/Contacts Investor Relations Contact Protolabs Ryan Johnsrud, 612-225-4873 Manager – Investor Relations and FP&A ryan.johnsrud@protolabs.com Media Contact Protolabs Brent Renneke, 763-479-7704 PR & Media Strategist brent.renneke@protolabs.com
Revenue of $121.7 million in the Third Quarter of 2022; GAAP Earnings Per Share of $0.14, Non-GAAP Earnings Per Share of $0.40
Proto Labs, Inc. (NYSE: PRLB), the world’s leading provider of digital manufacturing services, today announced financial results for the third quarter ended September 30, 2022. Third Quarter 2022 Highlights include: Revenue for the third quarter of 2022 was $121.7 million, representing a 2.9 percent decrease compared to revenue of $125.3 million in the third quarter of 2021. Hubs generated $12.1 million of revenue in the third quarter, representing year-over-year growth of 38.5 percent. On a GAAP basis, costs related to the closure of Japan operations were $1.2 million in the quarter. Total costs year to date are $6.4 million. These costs have been excluded from our Non-GAAP results. See “Non-GAAP Financial Measures” below. Net income was $4.0 million, or $0.14 per diluted share. Non-GAAP net income was $10.9 million, or $0.40 per diluted share. “We experienced continued softening of our Injection Molding business, however, we are pleased with the continued growth of our other digital manufacturing services and Hubs business,” said Rob Bodor, President and Chief Executive Officer. “As we face an uncertain economic environment ahead, I am confident in our strategy and the value we bring to market, and the ability of our team to deliver long term revenue growth and profitability.” Additional Third Quarter 2022 Highlights include: Protolabs served 23,816 unique product developers during the third quarter of 2022. Gross margin was 44.1 percent of revenue, compared to 45.2 percent of revenue in the second quarter of 2022. Non-GAAP gross margin was 44.8 percent of revenue, compared to 45.9 percent of revenue in the second quarter of 2022. EBITDA was $15.5 million, or 12.7 percent of revenue. Adjusted EBITDA was $22.0 million, or 18.0 percent of revenue. Cash and investments balance was $113.9 million as of September 30, 2022. “Our financial position remains strong as we produced $20.5 million in cash from operations in the quarter,” said Dan Schumacher, Chief Financial Officer. “As we monitor the economy, we are tightening our cost controls and will continue to focus investments to fuel the execution of our strategy.” 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 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, costs related to the Japan closure activities 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 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, costs related to the Japan closure activities and transaction costs (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, costs related to the Japan closure activities 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 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, costs related to the Japan closure activities and transaction costs (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, costs related to Japan closure activities 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 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 2022 financial results and fourth quarter 2022 outlook today, November 4, 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/gfmzxbyg. 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. Proto Labs, Inc. Condensed Consolidated Balance Sheets (In thousands) September 30, December 31, 2022 2021 (Unaudited) Assets Current assets Cash and cash equivalents $ 59,361 $ 65,929 Short-term marketable securities 25,253 11,580 Accounts receivable, net 80,611 80,051 Inventory 14,617 13,161 Income taxes receivable 763 1,321 Prepaid expenses and other current assets 11,752 11,450 Total current assets 192,357 183,492 Property and equipment, net 259,856 280,346 Goodwill 383,558 400,610 Other intangible assets, net 31,907 37,998 Long-term marketable securities 29,257 14,340 Operating lease assets 4,293 5,578 Finance lease assets 1,524 1,898 Other long-term assets 4,186 4,320 Total assets $ 906,938 $ 928,582 Liabilities and shareholders' equity Current liabilities Accounts payable $ 16,893 $ 25,364 Accrued compensation 15,087 13,704 Accrued liabilities and other 25,478 11,980 Current operating lease liabilities 1,773 3,298 Current finance lease liabilities 1,484 550 Income taxes payable 5 - Total current liabilities 60,720 54,896 Long-term operating lease liabilities 2,477 2,245 Long-term finance lease liabilities - 1,351 Long-term deferred tax liabilities 26,864 35,892 Other long-term liabilities 6,031 5,705 Shareholders' equity 810,846 828,493 Total liabilities and shareholders' equity $ 906,938 $ 928,582 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, 2022 2021 2022 2021 Revenue Injection Molding $ 48,940 $ 57,685 $ 155,693 $ 172,212 CNC Machining 47,489 43,658 141,809 121,953 3D Printing 19,823 18,589 59,458 53,994 Sheet Metal 5,219 4,854 15,066 14,790 Other 250 556 765 1,567 Total revenue 121,721 125,342 372,791 364,516 Cost of revenue 68,089 70,018 205,933 197,237 Gross profit 53,632 55,324 166,858 167,279 Operating expenses Marketing and sales 20,594 21,422 62,235 61,946 Research and development 9,309 10,614 29,316 33,855 General and administrative 16,477 16,361 49,770 44,186 Closure of Japan business 1,194 - 6,388 - Total operating expenses 47,574 48,397 147,709 139,987 Income from operations 6,058 6,927 19,149 27,292 Other income (loss), net (24) 136 (323 ) (40) Income before income taxes 6,034 7,063 18,826 27,252 Provision for income taxes 2,083 2,228 7,223 5,790 Net income $ 3,951 $ 4,835 $ 11,603 $ 21,462 Net income per share: Basic $ 0.14 $ 0.17 $ 0.42 $ 0.78 Diluted $ 0.14 $ 0.17 $ 0.42 $ 0.77 Shares used to compute net income per share: Basic 27,505,097 27,713,229 27,512,057 27,638,611 Diluted 27,508,217 27,730,105 27,522,734 27,707,784 Proto Labs, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Nine Months Ended September 30, 2022 2021 Operating activities Net income $ 11,603 $ 21,462 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 29,981 30,231 Stock-based compensation expense 13,335 15,539 Deferred taxes (8,920 ) (139 ) Changes in fair value of contingent consideration - (8,513 ) Impairments related to closure of Japan business 2,842 - Gain on disposal of property and equipment (1,174 ) - Other 11 442 Changes in operating assets and liabilities 3,886 (26,797 ) Net cash provided by operating activities 51,564 32,225 Investing activities Purchases of property, equipment and other capital assets (16,414 ) (27,956 ) Proceeds from sales of property, equipment and other capital assets 3,227 - Cash used for acquisitions, net of cash acquired - (127,413 ) Purchases of marketable securities (45,872 ) (15,159 ) Proceeds from sales of marketable securities 1,998 57,089 Proceeds from call redemptions and maturities of marketable securities 13,696 15,114 Net cash used in investing activities (43,365 ) (98,325 ) Financing activities Proceeds from exercises of stock options and other 2,311 3,838 Purchases of shares withheld for tax obligations (1,615 ) (4,209 ) Repurchases of common stock (13,074 ) (13,036 ) Principal repayments of finance lease obligations (417 ) (413 ) Net cash used in financing activities (12,795 ) (13,820 ) Effect of exchange rate changes on cash and cash equivalents (1,972 ) 119 Net decrease in cash and cash equivalents (6,568 ) (79,801 ) Cash and cash equivalents, beginning of period 65,929 127,603 Cash and cash equivalents, end of period $ 59,361 $ 47,802 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, 2022 2021 2022 2021 Non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, costs related to Japan closure activities and transaction costs GAAP net income $ 3,951 $ 4,835 $ 11,603 $ 21,462 Add back: Stock-based compensation expense 4,907 4,978 13,335 15,539 Amortization expense 1,510 1,568 4,582 4,601 Unrealized (gain) loss on foreign currency 382 121 742 341 Costs related to Japan closure activities 1,194 - 6,388 - Transaction costs 1 - (730 ) - (5,870 ) Total adjustments 2 7,993 5,937 25,047 14,611 Income tax benefits on adjustments 3 (1,060 ) (1,063 ) (2,518 ) (4,639 ) Non-GAAP net income $ 10,884 $ 9,709 $ 34,132 $ 31,434 Non-GAAP net income per share: Basic $ 0.40 $ 0.35 $ 1.24 $ 1.14 Diluted $ 0.40 $ 0.35 $ 1.24 $ 1.13 Shares used to compute non-GAAP net income per share: Basic 27,505,097 27,713,229 27,512,057 27,638,611 Diluted 27,508,217 27,730,105 27,522,734 27,707,784 1 Transaction costs include direct costs incurred in the Company's 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, costs related to Japan closure activities and transaction costs were included in the following GAAP consolidated statement of operations categories: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Cost of revenue $ 902 $ 986 $ 2,701 $ 2,974 Marketing and sales 929 1,059 2,479 2,841 Research and development 602 776 1,702 2,144 General and administrative 3,984 2,995 11,035 6,311 Closure of Japan business 1,194 - 6,388 - Total operating expenses 6,709 4,830 21,604 11,296 Other (income) expense, net 382 121 742 341 Total adjustments $ 7,993 $ 5,937 $ 25,047 $ 14,611 3 For the three- and nine-month periods ended September 30, 2022 and 2021, 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 Nine Months Ended Three Months Ended September 30, September 30, June 30, 2022 2021 2022 2021 2022 2021 Revenue $ 121,721 $ 125,342 $ 372,791 $ 364,516 $ 126,902 $ 123,048 Gross Profit 53,632 55,324 166,858 167,279 57,422 56,625 GAAP gross margin 44.1 % 44.1 % 44.8 % 45.9 % 45.2 % 46.0 % Add back: Stock-based compensation expense 560 644 1,674 1,947 528 668 Amortization expense 342 342 1,027 1,027 342 343 Total adjustments 902 986 2,701 2,974 870 1,011 Non-GAAP gross profit $ 54,534 $ 56,310 $ 169,559 $ 170,253 $ 58,292 $ 57,636 Non-GAAP gross margin 44.8 % 44.9 % 45.5 % 46.7 % 45.9 % 46.8 % Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Gross Margin Excluding Japan (In thousands) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ 121,721 $ 125,342 $ 372,791 $ 364,516 Revenue excluding Japan $ 120,434 $ 122,282 $ 364,562 $ 354,783 Gross Profit 53,632 55,324 166,858 167,279 GAAP gross margin 44.1 % 44.1 % 44.8 % 45.9 % Less: Japan gross profit 47 1,151 3,150 3,845 Gross Profit excluding Japan 53,585 54,173 163,708 163,434 GAAP gross margin excluding Japan 44.5 % 44.3 % 44.9 % 46.1 % Add back: Stock-based compensation expense 560 644 1,674 1,947 Amortization expense 342 342 1,027 1,027 Less: Japan stock-based compensation expense 13 26 61 70 Japan amortization expense - - - - Total adjustments 889 960 2,640 2,904 Non-GAAP gross profit excluding Japan $ 54,474 $ 55,133 $ 166,348 $ 166,338 Non-GAAP gross margin excluding Japan 45.2 % 45.1 % 45.6 % 46.9 % Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Operating Margin (In thousands) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ 121,721 $ 125,342 $ 372,791 $ 364,516 Income from operations 6,058 6,927 19,149 27,292 GAAP operating margin 5.0 % 5.5 % 5.1 % 7.5 % Add back: Stock-based compensation expense 4,907 4,978 13,335 15,539 Amortization expense 1,510 1,568 4,582 4,601 Transaction costs 1 - (730 ) - (5,870 ) Costs related to Japan closure activities 1,194 - 6,388 - Total adjustments 7,611 5,816 24,305 14,270 Non-GAAP income from operations $ 13,669 $ 12,743 $ 43,454 $ 41,562 Non-GAAP operating margin 11.2 % 10.2 % 11.7 % 11.4 % 1 Transaction costs include direct costs incurred in the Company's 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 to Non-GAAP Operating Margin Excluding Japan (In thousands) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ 121,721 $ 125,342 $ 372,791 $ 364,516 Revenue excluding Japan $ 120,434 $ 122,282 $ 364,562 $ 354,783 Income from operations 6,058 6,927 19,149 27,292 GAAP operating margin 5.0 % 5.5 % 5.1 % 7.5 % Less: Japan income from operations (724 ) (521 ) (720 ) (1,174 ) Income from operations excluding Japan 6,782 7,448 19,869 28,466 GAAP operating margin excluding Japan 5.6 % 6.1 % 5.5 % 8.0 % Add back: Stock-based compensation expense 4,907 4,978 13,335 15,539 Amortization expense 1,510 1,568 4,582 4,601 Transaction costs 1 - (730 ) - (5,870 ) Costs related to Japan closure activities 1,194 - 6,388 - Less: Japan stock-based compensation expense 89 160 386 464 Japan amortization expense - - - - Total adjustments 7,522 5,656 23,919 13,806 Non-GAAP income from operations excluding Japan $ 14,304 $ 13,104 $ 43,788 $ 42,272 Non-GAAP operating margin excluding Japan 11.9 % 10.7 % 12.0 % 11.9 % 1 Transaction costs include direct costs incurred in the Company's 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 Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ 121,721 $ 125,342 $ 372,791 $ 364,516 GAAP net income 3,951 4,835 11,603 21,462 GAAP net income margin 3.2 % 3.9 % 3.1 % 5.9 % Add back: Amortization expense $ 1,510 $ 1,568 $ 4,582 $ 4,601 Depreciation expense 8,197 8,536 25,399 25,630 Interest income, net (265 ) (55 ) (459 ) (207 ) Tax expense 2,083 2,228 7,223 5,790 EBITDA 15,476 17,112 48,348 57,276 EBITDA Margin 12.7 % 13.7 % 13.0 % 15.7 % Add back: Stock-based compensation expense 4,907 4,978 13,335 15,539 Unrealized (gain) loss on foreign currency 382 121 742 341 Costs related to Japan closure activities 1,194 - 6,388 - Transaction costs 1 - (730 ) - (5,870 ) Total adjustments 6,483 4,369 20,465 10,010 Adjusted EBITDA $ 21,959 $ 21,481 $ 68,813 $ 67,286 Adjusted EBITDA Margin 18.0 % 17.1 % 18.5 % 18.5 % 1 Transaction costs include direct costs incurred in the Company's 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 by Region (In thousands) (Unaudited) Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 % % GAAP Foreign Currency1 Hubs Acquisition Non-GAAP GAAP Change3 Change Organic4 Revenues United States $ 98,970 $ - $ - $ 98,970 $ 100,127 (1.2 )% (1.2 )% Europe 21,464 3,789 - 25,253 22,155 (3.1 ) 14.0 Japan 1,287 310 - 1,597 3,060 (57.9 ) (47.8 ) Total Revenue $ 121,721 $ 4,099 $ - $ 125,820 $ 125,342 (2.9 )% 0.4 % Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 % % GAAP Foreign Currency1 Hubs Acquisition2 Non-GAAP GAAP Change3 Change Organic4 Revenues United States $ 295,121 $ - $ (1,049 ) $ 294,072 $ 286,524 3.0 % 2.6 % Europe 69,441 7,165 (1,279 ) 75,327 68,259 1.7 10.4 Japan 8,229 1,226 - 9,455 9,733 (15.5 ) (2.9 ) Total Revenue $ 372,791 $ 8,391 $ (2,328 ) $ 378,854 $ 364,516 2.3 % 3.9 % 1 Revenue for the three- and nine-month periods ended September 30, 2022 has been recalculated using 2021 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 nine-month period ended September 30, 2022 has been recalculated to exclude revenue earned from the Company's acquisition of Hubs, Inc. for the period from January 1, 2022 to January 21, 2022 to provide information useful in evaluating the underlying business trends excluding the impact of acquisitions. The Hubs, Inc. acquisition occurred on January 22, 2021 and was included in 2021 revenue after that date. 3 This column presents the percentage change from GAAP revenue for the three- and nine-month periods ended September 30, 2021 to GAAP revenue for the three- and nine-month periods ended September 30, 2022. 4 This column presents the percentage change from GAAP revenue for the three- and nine-month periods ended September 30, 2021 to non-GAAP revenue for the three- and nine-month periods ended September 30, 2022 (as recalculated using the foreign currency exchange rates in effect during the three- and nine-month periods ended September 30, 2021, excluding the impact of Hubs, Inc. acquisition) 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, 2022 Three Months Ended September 30, 2021 % % GAAP Foreign Currency1 Hubs Acquisition Non-GAAP GAAP Change3 Change Organic4 Revenues Injection Molding $ 48,940 $ 1,677 $ - $ 50,617 $ 57,685 (15.2 )% (12.3 )% CNC Machining 47,489 1,580 - 49,069 43,658 8.8 12.4 3D Printing 19,823 803 - 20,626 18,589 6.6 11.0 Sheet Metal 5,219 39 - 5,258 4,854 7.5 8.3 Other 250 - - 250 556 (55.0 ) (55.0 ) Total Revenue $ 121,721 $ 4,099 $ - $ 125,820 $ 125,342 (2.9 )% 0.4 % Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 % % GAAP Foreign Currency1 Hubs Acquisition2 Non-GAAP GAAP Change3 Change Organic4 Revenues Injection Molding $ 155,693 $ 4,102 $ (189 ) $ 159,606 $ 172,212 (9.6 )% (7.3 )% CNC Machining 141,809 2,693 (1,637 ) 142,865 121,953 16.3 17.1 3D Printing 59,458 1,553 (408 ) 60,603 53,994 10.1 12.2 Sheet Metal 15,066 39 (84 ) 15,021 14,790 1.9 1.6 Other 765 4 (10 ) 759 1,567 (51.2 ) (51.6 ) Total Revenue $ 372,791 $ 8,391 $ (2,328 ) $ 378,854 $ 364,516 2.3 % 3.9 % 1 Revenue for the three- and nine-month periods ended September 30, 2022 has been recalculated using 2021 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 nine-month period ended September 30, 2022 has been recalculated to exclude revenue earned from the Company's acquisition of Hubs, Inc. for the period from January 1, 2022 to January 21, 2022 to provide information useful in evaluating the underlying business trends excluding the impact of acquisitions. The Hubs, Inc. acquisition occurred on January 22, 2021 and was included in 2021 revenue after that date. 3 This column presents the percentage change from GAAP revenue for the three- and nine-month periods ended September 30, 2021 to GAAP revenue for the three- and nine-month periods ended September 30, 2022. 4 This column presents the percentage change from GAAP revenue for the three- and nine-month periods ended September 30, 2021 to non-GAAP revenue for the three- and nine-month periods ended September 30, 2022 (as recalculated using the foreign currency exchange rates in effect during the three- and nine-month periods ended September 30, 2021, 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 Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Unique product developers and engineers served 23,816 23,457 47,793 46,687 View source version on businesswire.com: https://www.businesswire.com/news/home/20221104005157/en/
Investor Relations Contact Protolabs Ryan Johnsrud, 612-225-4873 Manager – Investor Relations and FP&A ryan.johnsrud@protolabs.com Media Contact Protolabs Brent Renneke, 763-479-7704 PR & Media Strategist brent.renneke@protolabs.com