Proto Labs Reports Record Revenue and Net Income for the Second Quarter 2013
Proto Labs Reports Record Revenue and Net Income for the Second Quarter 2013
Quarterly Revenue Increases 33% Year over Year to $39.7 Million
Quarterly Net Income Increases 67% Year over Year to $8.6 Million
MAPLE PLAIN, Minn.--(BUSINESS WIRE)-- Proto Labs, Inc. (NYS: PRLB) , a leading online and technology-enabled quick-turn manufacturer, today announced its record financial results for the second quarter ended June 30, 2013.
Highlights include:
Revenue for the second quarter of 2013 increased to a record $39.7 million, 33 percent above revenue of $30.0 million in the second quarter of 2012.
The record quarterly revenue was achieved through a 22 percent increase in the number of product developers served combined with an increase of 8 percent in spending per product developer.
Net income for the second quarter of 2013 increased to a record $8.6 million, or $0.33 per diluted share. Non-GAAP net income, excluding the after tax expense of stock compensation, was $9.3 million, or $0.36 per diluted share. See "Non-GAAP Financial Measure" below.
"This past quarter again demonstrates that product developers value our services. Businesses today compete globally and need to use technology to accelerate their new ideas to the market. As the world's fastest provider of CNC and injection-molded parts using engineering-grade materials and real manufacturing processes, we are well-placed to benefit from this trend and make product developers more successful," said Proto Labs' President and CEO Brad Cleveland.
Additional highlights include:
Gross margin was 62.5 percent of revenue in the second quarter of 2013 compared with 59.1 percent during the same quarter in 2012.
During the second quarter of 2013, spending on research and development, including the Protoworks initiatives, totaled $2.8 million, or 6.9 percent of revenue. This compares to $2.4 million, or 8.0 percent of revenue during the second quarter of 2012.
Operating margin was 31.8 percent of revenue during the second quarter of 2013 compared to 24.9 percent in the second quarter of 2012.
Gross margin in the second quarter exceeded the target model for the third consecutive quarter; and for the fourth consecutive quarter, operating margin also exceeded the target model.
As measured on a year to date basis, cash generated from operations totaled $19.4 million and expenditures on capital equipment were $6.1 million.
"Our sales and marketing teams dig deeper and wider in our customer base. We are making progress in our R&D efforts to expand the part envelope and services we offer. Our world-wide manufacturing teams stress both productivity and quality and these results are clearly seen in our excellent gross margins. We anticipate that all of these efforts will generate solid growth for our company in future quarters," concluded Mr. Cleveland.
Non-GAAP Financial Measure
The company has included non-GAAP net income, adjusted for stock-based compensation expense in this press release to provide investors with additional information regarding the company's financial results. The company has provided below a reconciliation of non-GAAP net income, adjusted for stock-based compensation expense, to net income, the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP net income, adjusted for stock-based compensation expense, is used by the company's management and board of directors to understand and evaluate operating performance and trends and provides a useful measure for period-to-period comparisons of the company's business. Accordingly, the company believes that non-GAAP net income, adjusted for stock-based compensation expense, provides 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 financial results today, August 1 at 8:30 a.m. ET. To access the call in the U.S. please dial 877-474-9506. Outside the U.S. please dial 857-244-7559. Use participant code 36641968#. A simultaneous webcast of the call will also be available on the investor relations section of the company's website at www.protolabs.com/investors. An audio replay will be available for 14 days following the call on the investor relations website of Proto Lab's website.
About Proto Labs, Inc.
Proto Labs is a leading online and technology-enabled quick-turn manufacturer of custom parts for prototyping and short-run production. Proto Labs provides "Real Parts, Really Fast" to product developers worldwide. Proto Labs utilizes computer numerical control (CNC) machining and injection molding to manufacture custom parts for our customers. For more information, visit protolabs.com.
Forward-Looking Statements
Statements contained in this press release regarding matters that are not historical or current facts are "forward-looking statements" within the meaning of The Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors which may cause the results of Proto Labs 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 Proto Labs' future results. The forward-looking statements included in this press release are made only as of the date hereof. Proto Labs cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Proto Labs 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, | |||||||
2013 | 2012 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 35,446 | $ | 36,759 | ||||
Short-term marketable securities | 30,330 | 25,137 | ||||||
Accounts receivable, net | 17,529 | 15,791 | ||||||
Inventory | 4,875 | 4,619 | ||||||
Other current assets | 8,461 | 7,850 | ||||||
Total current assets | 96,641 | 90,156 | ||||||
Property and equipment, net | 47,144 | 45,316 | ||||||
Long-term marketable securities | 54,169 | 36,965 | ||||||
Other long-term assets | 246 | 285 | ||||||
Total assets | $ | 198,200 | $ | 172,722 | ||||
Liabilities and shareholders' equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 5,712 | $ | 4,758 | ||||
Accrued compensation | 4,372 | 5,995 | ||||||
Accrued liabilities and other | 623 | 513 | ||||||
Current portion of long-term debt obligations | 180 | 273 | ||||||
Total current liabilities | 10,887 | 11,539 | ||||||
Deferred tax liabilities | 3,346 | 3,346 | ||||||
Long-term debt obligations | 241 | 356 | ||||||
Other long-term liabilities | 700 | 782 | ||||||
Shareholders' equity | 183,026 | 156,699 | ||||||
Total liabilities and shareholders' equity | $ | 198,200 | $ | 172,722 | ||||
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, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Revenues | |||||||||||||||||
Protomold | $ | 27,924 | $ | 21,446 | $ | 54,804 | $ | 43,239 | |||||||||
Firstcut | 11,825 | 8,505 | 22,258 | 16,682 | |||||||||||||
Total revenues | 39,749 | 29,951 | 77,062 | 59,921 | |||||||||||||
Cost of revenues | 14,896 | 12,239 | 28,930 | 24,482 | |||||||||||||
Gross profit | 24,853 | 17,712 | 48,132 | 35,439 | |||||||||||||
Operating expenses | |||||||||||||||||
Marketing and sales | 5,550 | 4,557 | 10,813 | 8,998 | |||||||||||||
Research and development | 2,751 | 2,401 | 5,379 | 4,061 | |||||||||||||
General and administrative | 3,923 | 3,288 | 7,917 | 7,276 | |||||||||||||
Total operating expenses | 12,224 | 10,246 | 24,109 | 20,335 | |||||||||||||
Income from operations | 12,629 | 7,466 | 24,023 | 15,104 | |||||||||||||
Other income (expense), net | 116 | 173 | 119 | (404 | ) | ||||||||||||
Income before income taxes | 12,745 | 7,639 | 24,142 | 14,700 | |||||||||||||
Provision for income taxes | 4,134 | 2,493 | 7,244 | 4,772 | |||||||||||||
Net income | $ | 8,611 | $ | 5,146 | $ | 16,898 | $ | 9,928 | |||||||||
Net income per share: | |||||||||||||||||
Basic | $ | 0.34 | $ | 0.22 | $ | 0.68 | $ | 0.44 | |||||||||
Diluted | $ | 0.33 | $ | 0.20 | $ | 0.66 | $ | 0.42 | |||||||||
Shares used to compute net income per share: | |||||||||||||||||
Basic | 25,258,932 | 23,929,886 | 25,030,283 | 22,432,415 | |||||||||||||
Diluted | 25,850,247 | 25,280,835 | 25,627,382 | 23,743,122 | |||||||||||||
Proto Labs, Inc. | ||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||
(In thousands) | ||||||||||
(Unaudited) | ||||||||||
Six Months Ended | ||||||||||
June 30, | ||||||||||
2013 | 2012 | |||||||||
Operating activities | ||||||||||
Net income | $ | 16,898 | $ | 9,928 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 3,582 | 2,768 | ||||||||
Stock-based compensation expense | 1,736 | 1,620 | ||||||||
Deferred taxes | 307 | - | ||||||||
Excess tax benefit from stock-based compensation | (5,929 | ) | - | |||||||
Amortization of held-to-maturity securities | 633 | 24 | ||||||||
Loss on disposal of property and equipment | 59 | - | ||||||||
Changes in operating assets and liabilities: | 2,162 | (2,838 | ) | |||||||
Net cash provided by operating activities | 19,448 | 11,502 | ||||||||
Investing activities | ||||||||||
Purchases of property and equipment | (6,069 | ) | (12,664 | ) | ||||||
Purchases of marketable securities | (57,310 | ) | (34,366 | ) | ||||||
Proceeds from maturities of marketable securities | 34,280 | 250 | ||||||||
Net cash used in investing activities | (29,099 | ) | (46,780 | ) | ||||||
Financing activities | ||||||||||
Proceeds from initial public offering, net of offering costs | - | 71,530 | ||||||||
Payments on debt | (166 | ) | (191 | ) | ||||||
Proceeds from exercises of warrants and stock options | 2,870 | 37 | ||||||||
Excess tax benefit from stock-based compensation | 5,929 | - | ||||||||
Net cash provided by financing activities | 8,633 | 71,376 | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (295 | ) | 153 | |||||||
Net increase (decrease) in cash and cash equivalents | (1,313 | ) | 36,251 | |||||||
Cash and cash equivalents, beginning of period | 36,759 | 8,135 | ||||||||
Cash and cash equivalents, end of period | $ | 35,446 | $ | 44,386 | ||||||
Proto Labs, Inc. | ||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measure | ||||||||||
(In thousands, except share and per share amounts) | ||||||||||
(Unaudited) | ||||||||||
Three Months Ended | Six Months Ended | |||||||||
June 30, 2013 | June 30, 2013 | |||||||||
Non-GAAP n | ||||||||||
