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Actionable news in PRLB: PROTO LABS Inc,

Proto: Increases 24% Year Over Year To $72.6 Million MAPLE PLAIN, Minn.

The following excerpt is from the company's SEC filing.

Proto Labs, Inc. (NYSE: PRLB), a leading online and technology-enabled, quick-turn, on-demand manufacturer, today announced financial results for the first quarter ended March 31, 2016.

First Quarter 2016 Highlights include:

Revenue for the first quarter of 2016 was $72.6 million, 24 percent above revenue of $58.5 million in the first quarter of 2015. Alphaform, the German company acquired in the fourth quarter of 2015, generated $4.9 million in revenue in the first quarter. Excluding this contribution, legacy revenue totaled $67.7 million, an increase of 16 percent compar ed with the first quarter of 2015.

Revenue from 3D printing totaled $9.1 million. Excluding Alphaform’s 3D printing revenue of $2.5 million, legacy 3D printing revenue was $6.6 million, an increase of 46 percent from the 2015 first quarter.

The number of unique product developers and engineers served increased 20 percent to 13,249 from 11,009 in the first quarter of 2015.

Net income for the first quarter of 2016 was $10.7 million, or $0.40 per diluted share. Non-GAAP net income, excluding the after-tax expense of stock compensation, amortization of intangibles and unrealized foreign currency gains, was $11.7 million, or $0.44 per diluted share. See “Non-GAAP Financial Measures” below.

“We continued to generate revenue growth in the quarter, driven by strong 3D printing revenue, steady injection molding and CNC machining growth and the contribution from Alphaform,” said Vicki Holt, President and Chief Executive Officer. “We continue to make good progress with our 3D printing business. We are in the process of moving into our new 3D printing facility in North Carolina and manufacturing there has begun. The integration of Alphaform is tracking to plan. We have implemented our web-based order system and digital manufacturing platform and are ready to begin our full scale marketing and sales effort of our 3D printing services in Europe.

“While within our guidance for the quarter, revenue growth from our legacy injection molding and CNC machining services was tempered by a slowdown in industrial production. Despite these headwinds, growth of unique product developers remained very strong, demonstrating the impact of key marketing initiatives and our sales team focus on helping new customers unlock the power of Proto Labs’ digital manufacturing model.”

Additional First Quarter 2016 Highlights include:

Gross margin was 54.6 percent of revenue for the first quarter compared with 56.0 percent for the fourth quarter of 2015. Alphaform had a 380 basis point negative impact on gross margin in the first quarter of 2016.

GAAP operating margin was 20.9 percent of revenue during the first quarter of 2016 compared to 27.1 percent for the first quarter of 2015. On a non-GAAP basis, operating margin was 23.5 percent. See “Non-GAAP Financial Measures” below.

Cash generated from operations during the first quarter totaled $16.9 million. Cash and investments increased $11.5 million during the quarter to $157.2 million at March 31, 2016.

“Looking ahead, we foresee challenges with the industrial economy over the next few quarters. We believe the initiatives we put in place in the second half of 2015 to capitalize on new market opportunities are progressing. These initiatives include segmenting and targeting the markets we serve and developing more strategic relationships with our customers. We can see that we are gaining traction in the market, as evidenced by our growth in product developers served. We remain committed to our strategy for growth and are focused on achieving our objectives,” Ms. Holt concluded.

The company has included non-GAAP adjusted revenue growth that excludes the impact of changes in foreign currency exchange rates and legacy revenue excluding the revenue contribution from Alphaform from total revenues in this press release to provide investors with additional information regarding the company’s financial results. Management believes these metrics are useful in evaluating the underlying business trends and ongoing operating performance of the company.

The company has also included non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, and unrealized foreign currency activity (collectively, “non-GAAP net income”), in this press release to provide investors with additional information regarding the company’s financial results.

The company has also included a reconciliation of non-GAAP condensed consolidated statement of operations to GAAP condensed consolidated statement of operations. The non-GAAP condensed consolidated statement of operations provides non-GAAP operating income and non-GAAP net income, which 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 non-GAAP operating income and non-GAAP net income 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 first quarter financial results today, April 28, 2016 at 8:30 a.m. ET. To access the call in the U.S. please dial 877-709-8150. Outside the U.S. please dial 201-689-8354. No participant code is required. A simultaneous webcast of the call will be available via the investor relations section of the Proto Labs website and the following link:

http://edge.media-server.com/m/p/zqwvkhgd

A replay will be available for 14 days following the call on the investor relations section of Proto Labs’ website.

About Proto Labs, Inc.

Proto Labs is the world’s fastest digital manufacturing source for custom prototypes and low-volume production parts. The technology-enabled company uses advanced 3D printing, CNC machining and injection molding technologies to produce parts within days. The result is an unprecedented speed-to-market value for product designers and engineers worldwide. 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 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.

Contacts:

Investor Relations:

John Way, 763-479-7726

john.way@protolabs.com

Jenifer Kirtland, 408-656-9496

jkirtland@evcgroup.com

Media Relations:

Bill Dietrick, 763-479-7664

bill.dietrick@protolabs.com

Condensed Consolidated Balance Sheets

(In thousands)

December 31,

(Unaudited)

Assets

Current assets

Cash and cash equivalents

50,626

47,653

Short-term marketable securities

38,804

33,201

Accounts receivable, net

36,152

36,125

Inventory

9,920

9,771

Income taxes receivable

2,029

6,028

Other current assets

6,617

5,224

Total current assets

144,148

138,002

Property and equipment, net

130,341

125,475

Long-term marketable securities

67,726

64,789

Goodwill

28,916

Other intangible assets, net

3,150

3,337

Other long-term assets

Total assets

374,835

361,036

Liabilities and shareholders' equity

Current liabilities

Accounts payable

13,541

13,643

Accrued compensation

8,747

9,993

Accrued liabilities and other

1,648

2,626

Total current liabilities

23,936

26,262

Long-term deferred tax liabilities

4,325

4,240

Other long-term liabilities

2,868

2,889

Shareholders' equity

343,706

327,645

Total liabilities and shareholders' equity

Condensed Consolidated Statements of Operations

(In thousands, except share and per share amounts)

Three Months Ended

Injection Molding (Protomold)

43,169

37,618

CNC Machining (Firstcut)

18,875

16,370

3D Printing (Fineline)

9,110

4,548

1,414

Total revenue

72,568

58,536

Cost of revenue

32,914

23,282

Gross profit

39,654

35,254

Operating expenses

Marketing and sales

10,942

8,854

Research and development

5,318

4,314

General and administrative

8,251

6,245

Total operating expenses

24,511

19,413

Income from operations

15,143

15,841

Other income (expense), net

Income before income taxes

15,768

15,384

Provision for income taxes

5,106

4,931

10,662

10,453

Net income per share:

Diluted

Shares used to compute net income per share:

26,222,148

25,850,274

26,442,357

26,214,204

Condensed Consolidated Statements of Cash Flows

Operating activities

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

Depreciation and amortization

3,789

3,399

Stock-based compensation expense

1,732

1,342

Deferred taxes

Excess tax benefit from stock-based compensation

(1,310

Amortization of held-to-maturity securities

Changes in operating assets and liabilities

1,693

Net cash provided by operating activities

16,944

15,417

Investing activities

Purchases of property and equipment

(8,275

(6,230

Purchases of marketable securities

(18,794

(11,575

Proceeds from sales and maturities of marketable securities

10,465

11,646

Net cash used in investing activities

(16,604

(6,159

Financing activities

Payments on debt

Acquisition-related contingent consideration

(1,000

Proceeds from exercises of stock options and other

1,614

1,310

Net cash provided by financing activities

2,524

Effect of exchange rate changes on cash and cash equivalents

Net increase in cash and cash equivalents

2,973

9,224

Cash and cash equivalents, beginning of period

43,329

Cash and cash equivalents, end of period

52,553

Reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of Operations

March 31, 2015

32,784

23,171

39,784

35,365

10,664

8,618

5,024

4,020

(1,216

7,035

5,358

(1,788

22,723

(1,417

17,996

1,918

17,061

1,528

17,369

1,594

17,362

1,981

17,365

5,643

5,499

1,057

11,719

1,413

11,866

Reconciliation of GAAP to Non-GAAP Net Income per Share

Non-GAAP net income, adjusted for stock-based compensation expense,

amortization expense and unrealized (gain) loss on foreign currency

Add back:

Amortization expense

Unrealized (gain) loss on foreign currency

Total adjustments

Income tax benefits on adjustments

Non-GAAP net income per share:

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

Comparison of GAAP to Non-GAAP Revenue Growth

% Change

Constant

Currencies

Revenues

United States

54,468

47,429

15,631

8,781

2,469

2,326

Total Revenue

Revenue growth for the three months ended March 31, 2016 has been recalculated using 2015 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.

10,739

67,676

Revenue growth for the three months ended March 31, 2016 has been recalculated to exclude revenue earned from our acquisition of Alphaform, and using 2015 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.

Revenue by Geography - Based on Shipping Location

Domestic

50,567

44,845

International

3,901

2,584

Total international

22,001

13,691

Product Developer Information

Unique product developers and engineers served

Note: the data above does not include product developers and engineers who purchased products attributable to our acquisition of Alphaform during the periods presented

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

Proto Labs director just cashed-in 4,000 options - April 18, 2016
Proto Labs releases salary data. CEO sees compensation rise 1% - April 8, 2016
Departure of Directors or Certain - April 8, 2016
Proto Labs's Vice President Global Sales just cashed-in 19,844 options - April 6, 2016