Protolabs Reports Financial Results for the Second Quarter of 2023

Revenue of $122.3 million in the Second Quarter of 2023

Network revenue of $20.2 million; a 79.3% YoY increase

GAAP Loss Per Share of $0.01; Non-GAAP Earnings Per Share of $0.33

Proto Labs, Inc. (the "Company" or "Protolabs") (NYSE: PRLB), the world’s leading provider of digital manufacturing services, today announced financial results for the second quarter ended June 30, 2023.

Second Quarter 2023 Highlights:

  • Revenue for the second quarter of 2023 was $122.3 million, representing a 3.7 percent decrease compared to revenue of $126.9 million in the second quarter of 2022.
  • Revenue generated from our digital network powered by Hubs was $20.2 million in the second quarter, representing growth of 79.3 percent over the second quarter of 2022 and 17.6 percent sequential growth compared to the first quarter of 2023.
  • Net loss for the second quarter of 2023 was $0.4 million, or $0.01 per diluted share.
  • Non-GAAP net income was $8.7 million, or $0.33 per diluted share. See “Non-GAAP Financial Measures” below.

“Our broad customer offer, powered by internal digital factories and network manufacturing partners, allows us to offer customers a differentiated value proposition and serve their varying needs in any economic climate,” said Rob Bodor, President and Chief Executive Officer. “Amidst the continued contraction of manufacturing, Protolabs improved gross and operating margins sequentially while continuing to delight our customers and advance our 2023 strategic initiatives.”

Additional Second Quarter 2023 Highlights:

  • Protolabs served 23,377 unique product developers during the quarter.
  • The Company repurchased $9.0 million of shares during the quarter.
  • Gross margin was 43.4 percent of revenue in the second quarter of 2023.
  • Non-GAAP gross margin was 44.1 percent of revenue in the second quarter of 2023, representing a sequential increase of 70 basis points. See “Non-GAAP Financial Measures” below.
  • EBITDA was $11.4 million, or 9.3 percent of revenue, in the second quarter of 2023, compared to $15.1 million, or 11.9 percent of revenue, in the second quarter of 2022. See “Non-GAAP Financial Measures” below.
  • Adjusted EBITDA was $19.2 million, or 15.7% of revenue, in the second quarter of 2023, compared to $24.6 million, or 19.4% of revenue, in the second quarter of 2022. See “Non-GAAP Financial Measures” below.
  • Cash and investments balance was $102.8 million as of June 30, 2023.

“Driven by the current economic climate, through the first half of 2023 demand for our longer lead times and lower-priced offerings has outpaced demand for our quick-turn offer, and we will continue to adapt our operations to align with demand,” said Dan Schumacher, Chief Financial Officer. “We are among the most profitable and positive cash generating digital manufacturers, enabling us to continue to invest in future growth among economic volatility and dynamic customer preferences.”

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 (collectively, “non-GAAP revenue growth”). Management believes these metrics, when viewed in conjunction with the comparable GAP 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 costs related to the Japan closure activities (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 and costs related to the Japan closure activities (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 and costs related to the closure of Japan (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, and costs related to the Japan closure activities (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 costs related to the closure of Japan (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 second quarter 2023 financial results and third quarter 2023 outlook today, August 4, 2023 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/ik5odgi6. 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 fastest and most comprehensive digital manufacturing service in the world. Our digital factories produce low-volume parts in days while our digital network of manufacturing partners powered by Hubs unlocks advanced capabilities and volume pricing at higher quantities. The result? One manufacturing source—from prototyping to production—for product developers, engineers, and supply chain teams across the globe. See what's next at 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 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,

2023

 

December 31,

2022

 

(Unaudited)

 

 

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

66,493

 

$

56,558

Short-term marketable securities

 

19,945

 

 

23,568

Accounts receivable, net

 

75,034

 

 

76,225

Inventory

 

14,311

 

 

13,578

Income taxes receivable

 

868

 

 

4,042

Prepaid expenses and other current assets

 

8,501

 

 

12,597

Total current assets

 

185,152

 

 

186,568

 

 

 

 

Property and equipment, net

 

248,614

 

 

257,785

Goodwill

 

273,991

 

 

273,991

Other intangible assets, net

 

28,353

 

 

31,250

Long-term marketable securities

 

16,344

 

 

26,419

Operating lease assets

 

3,084

 

 

3,844

Finance lease assets

 

16,934

 

 

17,532

Other long-term assets

 

4,738

 

 

4,779

Total assets

$

777,210

 

$

802,168

 

 

 

 

Liabilities and shareholders' equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

16,474

 

$

17,356

Accrued compensation

 

12,486

 

 

12,743

Accrued liabilities and other

 

19,155

 

 

22,384

Current operating lease liabilities

 

1,209

 

 

1,561

Current finance lease liabilities

 

16,549

 

 

17,537

Income taxes payable

 

348

 

 

Total current liabilities

 

66,221

 

 

71,581

 

 

 

 

Long-term operating lease liabilities

 

1,833

 

 

2,255

Long-term finance lease liabilities

 

745

 

 

Long-term deferred tax liabilities

 

20,790

 

 

26,322

Other long-term liabilities

 

4,936

 

 

4,362

 

 

 

 

Shareholders' equity

 

682,685

 

 

697,648

Total liabilities and shareholders' equity

$

777,210

 

$

802,168

 

Proto Labs, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2023

 

2022

 

2023

 

2022

Revenue

 

 

 

 

 

 

 

Injection Molding

$

48,819

 

 

$

53,355

 

$

100,767

 

 

$

106,753

 

CNC Machining

 

48,297

 

 

 

48,222

 

 

96,401

 

 

 

94,320

 

3D Printing

 

21,005

 

 

 

19,963

 

 

42,330

 

 

 

39,635

 

Sheet Metal

 

3,939

 

 

 

5,160

 

 

8,187

 

 

 

9,847

 

Other Revenue

 

205

 

 

 

202

 

 

439

 

 

 

515

 

Total Revenue

 

122,265

 

 

 

126,902

 

 

248,124

 

 

 

251,070

 

 

 

 

 

 

 

 

 

Cost of revenue

 

69,142

 

 

 

69,480

 

 

141,225

 

 

 

137,844

 

Gross profit

 

53,123

 

 

 

57,422

 

 

106,899

 

 

 

113,226

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

Marketing and sales

 

21,730

 

 

 

21,055

 

 

44,181

 

 

 

41,641

 

Research and development

 

9,865

 

 

 

9,450

 

 

20,542

 

 

 

20,007

 

General and administrative

 

15,822

 

 

 

16,522

 

 

32,655

 

 

 

33,293

 

Closure of Japan business

 

98

 

 

 

5,194

 

 

164

 

 

 

5,194

 

Total operating expenses

 

47,515

 

 

 

52,221

 

 

97,542

 

 

 

100,135

 

Income from operations

 

5,608

 

 

 

5,201

 

 

9,357

 

 

 

13,091

 

Other (loss) income, net

 

(3,368

)

 

 

1

 

 

(2,078

)

 

 

(299

)

Income before income taxes

 

2,240

 

 

 

5,202

 

 

7,279

 

 

 

12,792

 

Provision for income taxes

 

2,623

 

 

 

2,645

 

 

5,003

 

 

 

5,140

 

Net (loss) income

$

(383

)

 

$

2,557

 

$

2,276

 

 

$

7,652

 

 

 

 

 

 

 

 

 

Net (loss) income per share:

 

 

 

 

 

 

 

Basic

$

(0.01

)

 

$

0.09

 

$

0.09

 

 

$

0.28

 

Diluted

$

(0.01

)

 

$

0.09

 

$

0.09

 

 

$

0.28

 

 

 

 

 

 

 

 

 

Shares used to compute net (loss) income per share:

 

 

 

 

 

 

 

Basic

 

26,210,478

 

 

 

27,530,739

 

 

26,414,467

 

 

 

27,515,583

 

Diluted

 

26,210,478

 

 

 

27,536,823

 

 

26,445,427

 

 

 

27,524,019

 

 

 

 

 

 

 

 

 

Proto Labs, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

 

 

 

Six Months Ended

June 30,

 

2023

 

2022

Operating activities

 

 

 

Net income

$

2,276

 

 

$

7,652

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

18,883

 

 

 

20,274

 

Stock-based compensation expense

 

7,370

 

 

 

8,428

 

Deferred taxes

 

(5,605

)

 

 

(5,653

)

Interest on finance lease obligations

 

568

 

 

 

-

 

Loss on foreign currency translation

 

3,906

 

 

 

-

 

Impairments related to closure of Japan business

 

-

 

 

 

1,792

 

Gain on disposal of property and equipment

 

(428

)

 

 

-

 

Other

 

215

 

 

 

32

 

Changes in operating assets and liabilities:

 

4,682

 

 

 

(1,485

)

Net cash provided by operating activities

 

31,867

 

 

 

31,040

 

 

 

 

 

Investing activities

 

 

 

Purchases of property, equipment and other capital assets

 

(6,829

)

 

 

(6,030

)

Proceeds from sales of property, equipment and other capital assets

 

623

 

 

 

-

 

Purchases of marketable securities

 

-

 

 

 

(38,882

)

Proceeds from sales of marketable securities

 

 

 

 

1,000

 

Proceeds from call redemptions and maturities of marketable securities

 

14,020

 

 

 

7,396

 

Net cash provided by (used in) investing activities

 

7,814

 

 

 

(36,516

)

 

 

 

 

Financing activities

 

 

 

Proceeds from exercises of stock options

 

1,986

 

 

 

2,311

 

Purchases of shares withheld for tax obligations

 

(1,425

)

 

 

(1,615

)

Repurchases of common stock

 

(30,064

)

 

 

(5,239

)

Principal repayments of finance lease obligations

 

(163

)

 

 

(278

)

Net cash used in financing activities

 

(29,666

)

 

 

(4,821

)

Effect of exchange rate changes on cash and cash equivalents

 

(80

)

 

 

(966

)

Net increase (decrease) in cash and cash equivalents

 

9,935

 

 

 

(11,263

)

Cash and cash equivalents, beginning of period

 

56,558

 

 

 

65,929

 

Cash and cash equivalents, end of period

$

66,493

 

 

$

54,666

 

 

 

 

 

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

June 30,

 

Six Months Ended

June 30,

 

2023

 

2022

 

2023

 

2022

Non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and costs related to Japan closure activities

 

 

 

 

 

 

 

GAAP net (loss) income

$

(383

)

 

$

2,557

 

 

$

2,276

 

 

$

7,652

 

Add back:

 

 

 

 

 

 

 

Stock-based compensation expense

 

3,675

 

 

 

4,031

 

 

 

7,370

 

 

 

8,428

 

Amortization expense

 

1,484

 

 

 

1,527

 

 

 

3,010

 

 

 

3,072

 

Unrealized (gain) loss on foreign currency

 

187

 

 

 

271

 

 

 

115

 

 

 

360

 

Costs related to Japan closure activities

 

4,004

 

 

 

5,194

 

 

 

4,070

 

 

 

5,194

 

Total adjustments 1

 

9,350

 

 

 

11,023

 

 

 

14,565

 

 

 

17,054

 

Income tax benefits on adjustments 2

 

(296

)

 

 

(776

)

 

 

(298

)

 

 

(1,458

)

Non-GAAP net income

$

8,671

 

 

$

12,804

 

 

$

16,543

 

 

$

23,248

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income per share:

 

 

 

 

 

 

 

Basic

$

0.33

 

 

$

0.47

 

 

$

0.63

 

 

$

0.84

 

Diluted

$

0.33

 

 

$

0.46

 

 

$

0.63

 

 

$

0.84

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Basic

 

26,210,478

 

 

 

27,530,739

 

 

 

26,414,467

 

 

 

27,515,583

 

Diluted

 

26,224,562

 

 

 

27,536,823

 

 

 

26,445,427

 

 

 

27,524,019

 

 

 

 

 

 

 

 

 

1 Stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and costs related to Japan closure activities were included in the following GAAP consolidated statement of operations categories:

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

Cost of revenue

$

803

 

$

870

 

$

1,611

 

$

1,799

 

 

 

 

 

 

 

 

Marketing and sales

 

855

 

 

813

 

 

1,547

 

 

1,550

Research and development

 

641

 

 

471

 

 

1,212

 

 

1,100

General and administrative

 

2,861

 

 

3,404

 

 

6,010

 

 

7,051

Closure of Japan business

 

98

 

 

5,194

 

 

164

 

 

5,194

Total operating expenses

 

4,455

 

 

9,882

 

 

8,933

 

 

14,895

 

 

 

 

 

 

 

 

Other income (loss), net

 

4,092

 

 

271

 

 

4,021

 

 

360

Total adjustments

$

9,350

 

$

11,023

 

$

14,565

 

$

17,054

 

 

 

 

 

 

 

 

2 For the three and six months ended June 30, 2023 and 2022, 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

June 30,

 

Six Months Ended

June 30,

 

2023

 

2022

 

2023

 

2022

Revenue

$

122,265

 

 

$

126,902

 

 

$

248,124

 

 

$

251,070

 

Gross profit

 

53,123

 

 

 

57,422

 

 

 

106,899

 

 

 

113,226

 

GAAP gross margin

 

43.4

%

 

 

45.2

%

 

 

43.1

%

 

 

45.1

%

Add back:

 

 

 

 

 

 

 

Stock-based compensation expense

 

461

 

 

 

528

 

 

 

927

 

 

 

1,115

 

Amortization expense

 

342

 

 

 

342

 

 

 

684

 

 

 

684

 

Total adjustments

 

803

 

 

 

870

 

 

 

1,611

 

 

 

1,799

 

Non-GAAP gross profit

$

53,926

 

 

$

58,292

 

 

$

108,510

 

 

$

115,025

 

Non-GAAP gross margin

 

44.1

%

 

 

45.9

%

 

 

43.7

%

 

 

45.8

%

 

 

 

 

 

 

 

 

Proto Labs, Inc.

Reconciliation of GAAP to Non-GAAP Gross Margin Excluding Japan

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2023

 

2022

 

2023

 

2022

Revenue

$

122,265

 

 

$

126,902

 

 

$

248,124

 

 

$

251,070

 

Revenue excluding Japan

$

122,265

 

 

$

124,046

 

 

$

248,124

 

 

$

244,128

 

Gross profit

 

53,123

 

 

 

57,422

 

 

 

106,899

 

 

 

113,226

 

GAAP gross margin

 

43.4

%

 

 

45.2

%

 

 

43.1

%

 

 

45.1

%

Less: Japan gross profit

 

-

 

 

 

1,063

 

 

 

-

 

 

 

3,102

 

Gross Profit excluding Japan

 

53,123

 

 

 

56,359

 

 

 

106,899

 

 

 

110,124

 

GAAP gross margin excluding Japan

 

43.4

%

 

 

45.4

%

 

 

43.1

%

 

 

45.1

%

Add back:

 

 

 

 

 

 

 

Stock-based compensation expense

 

461

 

 

 

528

 

 

 

927

 

 

 

1,115

 

Amortization expense

 

342

 

 

 

342

 

 

 

684

 

 

 

684

 

Less:

 

 

 

 

 

 

 

Japan stock-based compensation expense

 

-

 

 

 

22

 

 

 

-

 

 

 

47

 

Japan amortization expense

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total adjustments

 

803

 

 

 

848

 

 

 

1,611

 

 

 

1,752

 

Non-GAAP gross profit excluding Japan

$

53,926

 

 

$

57,207

 

 

$

108,510

 

 

$

111,876

 

Non-GAAP gross margin excluding Japan

 

44.1

%

 

 

46.1

%

 

 

43.7

%

 

 

45.8

%

 

 

 

 

 

 

 

 

Proto Labs, Inc.

Reconciliation of GAAP to Non-GAAP Operating Margin

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2023

 

2022

 

2023

 

2022

Revenue

$

122,265

 

 

$

126,902

 

 

$

248,124

 

 

$

251,070

 

Income from operations

 

5,608

 

 

 

5,201

 

 

 

9,357

 

 

 

13,091

 

GAAP operating margin

 

4.6

%

 

 

4.1

%

 

 

3.8

%

 

 

5.2

%

Add back:

 

 

 

 

 

 

 

Stock-based compensation expense

 

3,675

 

 

 

4,031

 

 

 

7,370

 

 

 

8,428

 

Amortization expense

 

1,484

 

 

 

1,527

 

 

 

3,010

 

 

 

3,072

 

Costs related to Japan closure activities

 

98

 

 

 

5,194

 

 

 

164

 

 

 

5,194

 

Total adjustments

 

5,257

 

 

 

10,752

 

 

 

10,544

 

 

 

16,694

 

Non-GAAP income from operations

$

10,865

 

 

$

15,953

 

 

$

19,901

 

 

$

29,785

 

Non-GAAP operating margin

 

8.9

%

 

 

12.6

%

 

 

8.0

%

 

 

11.9

%

 

 

 

 

 

 

 

 

Proto Labs, Inc.

Reconciliation of GAAP to Non-GAAP Operating Margin Excluding Japan

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2023

 

2022

 

2023

 

2022

Revenue

$

122,265

 

 

$

126,902

 

 

$

248,124

 

 

$

251,070

 

Revenue excluding Japan

$

122,265

 

 

$

124,046

 

 

$

248,124

 

 

$

244,128

 

Income from operations

 

5,608

 

 

 

5,201

 

 

 

9,357

 

 

 

13,091

 

GAAP operating margin

 

4.6

%

 

 

4.1

%

 

 

3.8

%

 

 

5.2

%

Less: Japan (loss) income from operations

 

(128

)

 

 

(542

)

 

 

(474

)

 

 

4

 

Income from operations excluding Japan

 

5,736

 

 

 

5,743

 

 

 

9,831

 

 

 

13,087

 

GAAP operating margin excluding Japan

 

4.7

%

 

 

4.6

%

 

 

4.0

%

 

 

5.4

%

Add back:

 

 

 

 

 

 

 

Stock-based compensation expense

 

3,675

 

 

 

4,031

 

 

 

7,370

 

 

 

8,428

 

Amortization expense

 

1,484

 

 

 

1,527

 

 

 

3,010

 

 

 

3,072

 

Costs related to Japan closure activities

 

98

 

 

 

5,194

 

 

 

164

 

 

 

5,194

 

Less:

 

 

 

 

 

 

 

Japan stock-based compensation expense

 

7

 

 

 

147

 

 

 

17

 

 

 

297

 

Japan amortization expense

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total adjustments

 

5,250

 

 

 

10,605

 

 

 

10,527

 

 

 

16,397

 

Non-GAAP income from operations excluding Japan

$

10,986

 

 

$

16,348

 

 

$

20,358

 

 

$

29,484

 

Non-GAAP operating margin excluding Japan

 

9.0

%

 

 

13.2

%

 

 

8.2

%

 

 

12.1

%

 

 

 

 

 

 

 

 

Proto Labs, Inc.

Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2023

 

2022

 

2023

 

2022

Revenue

$

122,265

 

 

$

126,902

 

 

$

248,124

 

 

$

251,070

 

GAAP net (loss) income

 

(383

)

 

 

2,557

 

 

 

2,276

 

 

 

7,652

 

GAAP net (loss) income margin

 

(0.3

%)

 

 

2.0

%

 

 

0.9

%

 

 

3.0

%

Add back:

 

 

 

 

 

 

 

Amortization expense

$

1,484

 

 

$

1,527

 

 

$

3,010

 

 

$

3,072

 

Depreciation expense

 

8,011

 

 

 

8,515

 

 

 

15,873

 

 

 

17,202

 

Interest income, net

 

(372

)

 

 

(149

)

 

 

(722

)

 

 

(194

)

Provision for income taxes

 

2,623

 

 

 

2,645

 

 

 

5,003

 

 

 

5,140

 

EBITDA

 

11,363

 

 

 

15,095

 

 

 

25,440

 

 

 

32,872

 

EBITDA Margin

 

9.3

%

 

 

11.9

%

 

 

10.3

%

 

 

13.1

%

Add back:

 

 

 

 

 

 

 

Stock-based compensation expense

 

3,675

 

 

 

4,031

 

 

 

7,370

 

 

 

8,428

 

Unrealized (gain) loss on foreign currency

 

187

 

 

 

271

 

 

 

115

 

 

 

360

 

Costs related to Japan closure activities

 

4,004

 

 

 

5,194

 

 

 

4,070

 

 

 

5,194

 

Total adjustments

 

7,866

 

 

 

9,496

 

 

 

11,555

 

 

 

13,982

 

Adjusted EBITDA

$

19,229

 

 

$

24,591

 

 

$

36,995

 

 

$

46,854

 

Adjusted EBITDA Margin

 

15.7

%

 

 

19.4

%

 

 

14.9

%

 

 

18.7

%

 

 

 

 

 

 

 

 

Proto Labs, Inc.

Comparison of GAAP to Non-GAAP Revenue Growth by Region

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

June 30, 2023

 

Three Months Ended

June 30, 2022

 

%

Change2

 

% Change

Organic3

 

GAAP

 

Foreign

Currency1

 

Non-GAAP

 

GAAP

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

United States

$

96,321

 

$

-

 

$

96,321

 

$

100,655

 

(4.3

%)

 

(4.3

%)

Europe

 

25,944

 

 

512

 

 

26,456

 

 

23,391

 

10.9

%

 

13.1

%

Japan

 

-

 

 

-

 

 

-

 

 

2,856

 

(100.0

%)

 

(100.0

%)

Total revenue

$

122,265

 

$

512

 

$

122,777

 

$

126,902

 

(3.7

%)

 

(3.3

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

June 30, 2023

 

Six Months Ended

June 30, 2022

 

%

Change2

 

% Change

Organic3

 

GAAP

 

Foreign

Currency1

 

Non-GAAP

 

GAAP

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

United States

$

194,067

 

$

-

 

$

194,067

 

$

196,151

 

(1.1

%)

 

(1.1

%)

Europe

 

54,057

 

 

2,977

 

 

57,034

 

 

47,977

 

12.7

%

 

18.9

%

Japan

 

-

 

 

-

 

 

-

 

 

6,942

 

(100.0

%)

 

(100.0

%)

Total revenue

$

248,124

 

$

2,977

 

$

251,101

 

$

251,070

 

(1.2

%)

 

%

 

 

 

 

 

 

 

 

 

 

 

 

1 Revenue for the three and six months ended June 30, 2023 has been recalculated using 2022 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 This column presents the percentage change from GAAP revenue for the three and six months ended June 30, 2022 to GAAP revenue for the three and six months ended June 30, 2023.

 

3 This column presents the percentage change from GAAP revenue for the three and six months ended June 30, 2022 to non-GAAP revenue for the three and six months ended June 30, 2023 (as recalculated using the foreign currency exchange rates in effect during the three and six months ended June 30, 2022) 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

June 30, 2023

 

Three Months Ended

June 30, 2022

 

%

Change2

 

% Change

Organic3

 

GAAP

 

Foreign

Currency1

 

Non-GAAP

 

GAAP

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

Injection Molding

$

48,819

 

$

257

 

 

$

49,076

 

$

53,355

 

(8.5

)%

 

(8.0

)%

CNC Machining

 

48,297

 

 

125

 

 

 

48,422

 

 

48,222

 

0.2

 

 

0.4

 

3D Printing

 

21,005

 

 

131

 

 

 

21,136

 

 

19,963

 

5.2

 

 

5.9

 

Sheet Metal

 

3,939

 

 

1

 

 

 

3,940

 

 

5,160

 

(23.7

)

 

(23.6

)

Other Revenue

 

205

 

 

(2

)

 

 

203

 

 

202

 

1.5

 

 

0.5

 

Total Revenue

$

122,265

 

$

512

 

 

$

122,777

 

$

126,902

 

(3.7

%)

 

(3.3

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

June 30, 2023

 

Six Months Ended

June 30, 2022

 

%

Change2

 

% Change

Organic3

 

GAAP

 

Foreign

Currency1

 

Non-GAAP

 

GAAP

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

Injection Molding

$

100,767

 

$

1,436

 

$

102,203

 

$

106,753

 

(5.6

)%

 

(4.3

)%

CNC Machining

 

96,401

 

 

860

 

 

97,261

 

 

94,320

 

2.2

 

 

3.1

 

3D Printing

 

42,330

 

 

667

 

 

42,997

 

 

39,635

 

6.8

 

 

8.5

 

Sheet Metal

 

8,187

 

 

11

 

 

8,198

 

 

9,847

 

(16.9

)

 

(16.7

)

Other Revenue

 

439

 

 

3

 

 

442

 

 

515

 

(14.8

)

 

(14.2

)

Total Revenue

$

248,124

 

$

2,977

 

$

251,101

 

$

251,070

 

(1.2

%)

 

%

 

 

 

 

 

 

 

 

 

 

 

 

1 Revenue for the three and six months ended June 30, 2023 has been recalculated using 2022 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 This column presents the percentage change from GAAP revenue for the three and six months ended June 30, 2022 to GAAP revenue for the three and six months ended June 30, 2023.

3 This column presents the percentage change from GAAP revenue for the three and six months ended June 30, 2022 to non-GAAP revenue for the three and six months ended June 30, 2023 (as recalculated using the foreign currency exchange rates in effect during the three and six months ended June 30, 2022) in order to provide a constant-currency comparison.

Proto Labs, Inc.

Product Developer Information

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

2023

 

2022

 

2023

 

2022

Unique product developers and engineers served

23,377

 

24,058

 

35,743

 

36,878

 

 

 

 

 

 

 

 

 

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