Protolabs Reports Financial Results for the Fourth Quarter and Full Year 2021 By: Proto Labs, Inc. via Business Wire February 11, 2022 at 06:00 AM EST Revenue of $123.6 million in the Fourth Quarter of 2021, an increase of 18% year-over-year Record Annual Revenue of $488.1 million in 2021 Proto Labs, Inc. (NYSE: PRLB), the world’s leading provider of digital manufacturing services, today announced financial results for the fourth quarter and full year ended December 31, 2021. Fourth Quarter 2021 Highlights include: Revenue for the fourth quarter of 2021 was $123.6 million, representing a 17.5 percent increase compared to revenue of $105.2 million in the fourth quarter of 2020. Hubs generated $9.9 million of revenue in the fourth quarter, representing 13.0 percent sequential growth compared to the third quarter of 2021. Net income for the fourth quarter of 2021 was $11.9 million, or $0.43 per diluted share. Non-GAAP net income was $11.4 million, or $0.41 per diluted share. See “Non-GAAP Financial Measures” below. “We are pleased with the performance of our business in the fourth quarter, highlighted by strong growth and revenue above our expectations,” said Rob Bodor, President and Chief Executive Officer. “Our employees around the globe worked tirelessly in a challenging environment to finish the year strong and set us up for success in 2022.” Full Year 2021 Highlights include: Record annual revenue of $488.1 million in 2021, an increase of 12.4 percent over $434.4 million in 2020. Protolabs served 55,330 unique product developers during the year. Gross margin was 45.6 percent of revenue in 2021, compared to 50.1 percent in 2020. EBITDA margin was 16.5 percent of revenue in 2021, compared to 21.7 percent in 2020. Adjusted EBITDA margin was 18.3 percent of revenue in 2021, compared to 24.8 percent in 2020. See “Non-GAAP Financial Measures” below. Net income for 2021 was $33.4 million, or $1.21 per diluted share. Non-GAAP net income was $42.8 million, or $1.55 per diluted share. See “Non-GAAP Financial Measures” below. Cash and investments balance was $91.8 million as of December 31, 2021. “2021 was a transformative year for Protolabs. With the acquisition of Hubs and the launch of Protolabs 2.0, we are well positioned to execute on our long-term strategy to accelerate revenue growth and expand profitability,” added Rob Bodor. “We are uniquely positioned in this large and growing digital manufacturing market as the only company with industry-leading in-house digital manufacturing capabilities coupled with a premium network of manufacturing partners. We have the right strategic priorities in place to capture the opportunity ahead of us in 2022: to accelerate revenue growth, delight our customers, be the digital leader at scale, and continue to be a great place for our employees. I am excited for what we will achieve in 2022.” Non-GAAP Financial Measures The company has included non-GAAP revenue growth that excludes the impact of changes in foreign currency exchange rates and revenue earned from our acquisition of Hubs (collectively, “non-GAAP revenue growth”). Management believes these metrics are useful in evaluating the underlying business trends and ongoing operating performance of the company. The company has included earnings before interest, taxes, depreciation and amortization (“EBITDA”) and EBITDA, adjusted for stock-based compensation expense, unrealized (gain) loss on foreign currency, and transaction costs (collectively, “Adjusted EBITDA”), in this press release to provide investors with additional information regarding the company’s financial results. The company has included non-GAAP operating margin, adjusted for stock-based compensation expense, amortization expense, and transaction costs (collectively, “non-GAAP operating margin”), in this press release to provide investors with additional information regarding the company’s financial results. The company has included non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, and transaction costs (collectively, “non-GAAP net income”), in this press release to provide investors with additional information regarding the company’s financial results. The company has provided below reconciliations of GAAP to non-GAAP net income, non-GAAP operating margin, non-GAAP revenue growth and Adjusted EBITDA, the most directly comparable measures calculated and presented in accordance with GAAP. These non-GAAP measures are used by the company’s management and board of directors to understand and evaluate operating performance and trends and provide useful measures for period-to-period comparisons of the company’s business. Accordingly, the company believes that these non-GAAP measures provide useful information to investors and others in understanding and evaluating operating results in the same manner as our management and board of directors. Conference Call The company has scheduled a conference call to discuss its fourth quarter and full year 2021 financial results and first quarter 2022 outlook today, February 11, 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/cgi7nsd7. 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) December 31, December 31, 2021 2020 (Unaudited) Assets Current assets Cash and cash equivalents $ 65,929 $ 127,603 Short-term marketable securities 11,580 34,088 Accounts receivable, net 80,051 57,877 Inventory 13,161 10,862 Income taxes receivable 1,321 540 Prepaid expenses and other current assets 11,450 11,032 Total current assets 183,492 242,002 Property and equipment, net 280,346 282,666 Goodwill 400,610 128,752 Other intangible assets, net 37,998 14,350 Long-term marketable securities 14,340 59,357 Operating lease assets 5,578 9,855 Finance lease assets 1,898 2,396 Other long-term assets 4,320 4,826 Total assets $ 928,582 $ 744,204 Liabilities and shareholders' equity Current liabilities Accounts payable $ 25,364 $ 18,248 Accrued compensation 13,704 11,989 Accrued liabilities and other 11,980 16,193 Current operating lease liabilities 3,298 3,272 Current finance lease liabilities 550 552 Total current liabilities 54,896 50,254 Long-term operating lease liabilities 2,245 7,586 Long-term finance lease liabilities 1,351 1,919 Long-term deferred tax liabilities 35,892 33,854 Other long-term liabilities 5,705 6,235 Shareholders' equity 828,493 644,356 Total liabilities and shareholders' equity $ 928,582 $ 744,204 Proto Labs, Inc. Condensed Consolidated Statements of Operations (In thousands, except share and per share amounts) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2021 2020 2021 2020 Revenue Injection Molding $ 53,905 $ 52,065 $ 226,117 $ 217,992 CNC Machining 44,858 31,827 166,811 131,587 3D Printing 18,727 16,024 72,721 62,502 Sheet Metal 5,607 4,532 20,397 18,838 Other 485 760 2,052 3,476 Total revenue 123,582 105,208 488,098 434,395 Cost of revenue 68,170 52,580 265,407 216,568 Gross profit 55,412 52,628 222,691 217,827 Operating expenses Marketing and sales 20,229 17,488 82,175 69,309 Research and development 10,386 11,390 44,241 36,940 General and administrative 11,747 12,759 55,933 51,742 Total operating expenses 42,362 41,637 182,349 157,991 Income from operations 13,050 10,991 40,342 59,836 Other income (expense), net (118 ) 560 (158 ) 3,109 Income before income taxes 12,932 11,551 40,184 62,945 Provision for income taxes 1,022 1,972 6,812 12,078 Net income $ 11,910 $ 9,579 $ 33,372 $ 50,867 Net income per share: Basic $ 0.43 $ 0.36 $ 1.21 $ 1.90 Diluted $ 0.43 $ 0.36 $ 1.21 $ 1.89 Shares used to compute net income per share: Basic 27,555,357 26,775,279 27,617,627 26,737,425 Diluted 27,562,694 26,976,582 27,653,099 26,896,357 Proto Labs, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Year Ended December 31, 2021 2020 Operating activities Net income $ 33,372 $ 50,867 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 40,488 32,594 Stock-based compensation expense 19,095 14,673 Deferred taxes 339 7,577 Amortization of marketable securities - 415 Realized loss on available-for-sale securities 567 - Changes in fair value of contingent consideration (13,253 ) - Other 275 (336 ) Changes in operating assets and liabilities (25,641 ) 1,179 Net cash provided by operating activities 55,242 106,969 Investing activities Purchases of property, equipment and other capital assets (34,209 ) (47,010 ) Cash used for acquisitions, net of cash acquired (127,413 ) - Purchases of other assets and investments - (3,000 ) Purchases of marketable securities (16,159 ) (113,200 ) Proceeds from sales of marketable securities 64,913 - Proceeds from maturities of marketable securities 18,204 67,737 Net cash used in investing activities (94,664 ) (95,473 ) Financing activities Proceeds from exercises of stock options and other 5,862 7,557 Purchases of shares withheld for tax obligations (4,225 ) (3,443 ) Repurchases of common stock (23,279 ) (14,686 ) Principal repayments of finance lease obligations (552 ) (154 ) Other (4 ) - Net cash used in financing activities (22,198 ) (10,726 ) Effect of exchange rate changes on cash and cash equivalents (54 ) 1,608 Net (decrease) increase in cash and cash equivalents (61,674 ) 2,378 Cash and cash equivalents, beginning of period 127,603 125,225 Cash and cash equivalents, end of period $ 65,929 $ 127,603 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 Year Ended December 31, December 31, 2021 2020 2021 2020 Non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and transaction costs GAAP net income $ 11,910 $ 9,579 $ 33,372 $ 50,867 Add back: Stock-based compensation expense 3,556 4,056 19,095 14,673 Amortization expense 1,552 754 6,153 3,016 Unrealized (gain) loss on foreign currency 215 (353 ) 556 (1,373 ) Transaction costs 1 (4,705 ) 427 (10,575 ) 427 Total adjustments 2 618 4,884 15,229 16,743 Income tax benefits on adjustments 3 (1,150 ) (1,013 ) (5,789 ) (4,043 ) Non-GAAP net income $ 11,378 $ 13,450 $ 42,812 $ 63,567 Non-GAAP net income per share: Basic $ 0.41 $ 0.50 $ 1.55 $ 2.38 Diluted $ 0.41 $ 0.50 $ 1.55 $ 2.36 Shares used to compute non-GAAP net income per share: Basic 27,555,357 26,775,279 27,617,627 26,737,425 Diluted 27,562,694 26,976,582 27,653,099 26,896,357 1 Transaction costs include direct costs incurred in our acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations. 2 Stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and transaction costs were included in the following GAAP consolidated statement of operations categories: Three Months Ended Year Ended December 31, December 31, 2021 2020 2021 2020 Cost of revenue $ 990 $ 1,032 $ 3,964 $ 3,820 Marketing and sales 895 888 3,736 3,121 Research and development 689 675 2,833 2,441 General and administrative (2,171 ) 2,642 4,140 8,734 Total operating expenses (587 ) 4,205 10,709 14,296 Other (income) expense, net 215 (353 ) 556 (1,373 ) Total adjustments $ 618 $ 4,884 $ 15,229 $ 16,743 3 For the three-month and year-ended periods ended December 31, 2021 and 2020, income tax effects were calculated using the effective tax rate for the relevant jurisdictions. Our non-GAAP tax rates differ from our GAAP tax rates due primarily to the mix of activity incurred in domestic and foreign tax jurisdictions and removing effective tax rate benefits from stock-based compensation activity in the quarter. Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Operating Margin (In thousands) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2021 2020 2021 2020 Revenue $ 123,582 $ 105,208 $ 488,098 $ 434,395 Income from operations 13,050 10,991 40,342 59,836 GAAP operating margin 10.6 % 10.4 % 8.3 % 13.8 % Add back: Stock-based compensation expense 3,556 4,056 19,095 14,673 Amortization expense 1,552 754 6,153 3,016 Transaction costs 1 (4,705 ) 427 (10,575 ) 427 Total adjustments 403 5,237 14,673 18,116 Non-GAAP income from operations $ 13,453 $ 16,228 $ 55,015 $ 77,952 Non-GAAP operating margin 10.9 % 15.4 % 11.3 % 17.9 % 1 Transaction costs include direct costs incurred in our acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations. Proto Labs, Inc. Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA (In thousands) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2021 2020 2021 2020 GAAP net income $ 11,910 $ 9,579 $ 33,372 $ 50,867 Amortization expense 1,552 754 6,153 3,016 Depreciation expense 8,705 7,949 34,335 29,578 Interest income, net (23 ) (149 ) (230 ) (1,332 ) Tax expense 1,022 1,972 6,812 12,078 EBITDA 23,166 20,105 80,442 94,207 Add back: Stock-based compensation expense 3,556 4,056 19,095 14,673 Unrealized (gain) loss on foreign currency 215 (353 ) 556 (1,373 ) Transaction costs 1 (4,705 ) 427 (10,575 ) 427 Total adjustments (934 ) 4,130 9,076 13,727 Adjusted EBITDA $ 22,232 $ 24,235 $ 89,518 $ 107,934 1 Transaction costs include direct costs incurred in our acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations. Proto Labs, Inc. Comparison of GAAP to Non-GAAP Revenue Growth (In thousands) (Unaudited) Three Months EndedDecember 31, 2021 Three Months EndedDecember 31, 2020 % GAAP Foreign Currency1 Hubs Acquisition2 Non-GAAP GAAP Change3 % Change Organic4 Revenues United States $ 97,934 $ - $ (5,109 ) $ 92,825 $ 83,201 17.7 % 11.6 % Europe 22,140 294 (4,784 ) 17,650 18,383 20.4 (4.0 ) Japan 3,508 310 - 3,818 3,624 (3.2 ) 5.4 Total Revenue $ 123,582 $ 604 $ (9,893 ) $ 114,293 $ 105,208 17.5 % 8.6 % Year EndedDecember 31, 2021 Year EndedDecember 31, 2020 % GAAP Foreign Currency1 Hubs Acquisition2 Non-GAAP GAAP Change3 % Change Organic4 Revenues United States $ 384,458 $ - $ (17,621 ) $ 366,837 $ 345,708 11.2 % 6.1 % Europe 90,399 (3,692 ) (15,726 ) 70,981 74,796 20.9 (5.1 ) Japan 13,241 393 - 13,634 13,891 (4.7 ) (1.9 ) Total Revenue $ 488,098 $ (3,299 ) $ (33,347 ) $ 451,452 $ 434,395 12.4 % 3.9 % 1 Revenue for the three-month and year-ended periods ended December 31, 2021 has been recalculated using 2020 foreign currency exchange rates in effect during comparable periods to provide information useful in evaluating the underlying business trends excluding the impact of changes in foreign currency exchange rates. 2 Revenue for the three-month and year-ended periods ended December 31, 2021 has been recalculated to exclude revenue earned from our acquisition of Hubs, Inc. to provide information useful in evaluating the underlying business trends excluding the impact of acquisitions. 3 This column presents the percentage change from GAAP revenue for the three-month and year-ended periods ended December 31, 2020 to GAAP revenue for the three-month and year-ended periods ended December 31, 2021. 4 This column presents the percentage change from GAAP revenue for the three-month and year-ended periods ended December 31, 2020 to non-GAAP revenue for the three-month and year-ended periods ended December 31, 2021 (as recalculated using the foreign currency exchange rates in effect during the three-month and year-ended periods ended December 31, 2020, excluding the impact of Hubs, Inc. acquisition) in order to provide a constant-currency comparison. Proto Labs, Inc. Product Developer Information (Unaudited) Three Months Ended Year Ended December 31, December 31, 2021 2020 2021 2020(1) Unique product developers and engineers served 23,376 18,157 55,330 43,808 (1) The unique product developers and engineers served for the year ended December 31, 2020 has been restated to include unique product developers and engineers who purchased injection molding parts only. Historically we included only those developers who purchased injection molds in our metric. View source version on businesswire.com: https://www.businesswire.com/news/home/20220211005097/en/Contacts Investor Relations Contact Protolabs Ryan Johnsrud, 612-225-4873 Manager of Investor Relations, Corporate Development and Global FP&A ryan.johnsrud@protolabs.com Media Contact Protolabs Brent Renneke, 763-479-7704 PR & Media Strategist brent.renneke@protolabs.com
Revenue of $123.6 million in the Fourth Quarter of 2021, an increase of 18% year-over-year Record Annual Revenue of $488.1 million in 2021
Proto Labs, Inc. (NYSE: PRLB), the world’s leading provider of digital manufacturing services, today announced financial results for the fourth quarter and full year ended December 31, 2021. Fourth Quarter 2021 Highlights include: Revenue for the fourth quarter of 2021 was $123.6 million, representing a 17.5 percent increase compared to revenue of $105.2 million in the fourth quarter of 2020. Hubs generated $9.9 million of revenue in the fourth quarter, representing 13.0 percent sequential growth compared to the third quarter of 2021. Net income for the fourth quarter of 2021 was $11.9 million, or $0.43 per diluted share. Non-GAAP net income was $11.4 million, or $0.41 per diluted share. See “Non-GAAP Financial Measures” below. “We are pleased with the performance of our business in the fourth quarter, highlighted by strong growth and revenue above our expectations,” said Rob Bodor, President and Chief Executive Officer. “Our employees around the globe worked tirelessly in a challenging environment to finish the year strong and set us up for success in 2022.” Full Year 2021 Highlights include: Record annual revenue of $488.1 million in 2021, an increase of 12.4 percent over $434.4 million in 2020. Protolabs served 55,330 unique product developers during the year. Gross margin was 45.6 percent of revenue in 2021, compared to 50.1 percent in 2020. EBITDA margin was 16.5 percent of revenue in 2021, compared to 21.7 percent in 2020. Adjusted EBITDA margin was 18.3 percent of revenue in 2021, compared to 24.8 percent in 2020. See “Non-GAAP Financial Measures” below. Net income for 2021 was $33.4 million, or $1.21 per diluted share. Non-GAAP net income was $42.8 million, or $1.55 per diluted share. See “Non-GAAP Financial Measures” below. Cash and investments balance was $91.8 million as of December 31, 2021. “2021 was a transformative year for Protolabs. With the acquisition of Hubs and the launch of Protolabs 2.0, we are well positioned to execute on our long-term strategy to accelerate revenue growth and expand profitability,” added Rob Bodor. “We are uniquely positioned in this large and growing digital manufacturing market as the only company with industry-leading in-house digital manufacturing capabilities coupled with a premium network of manufacturing partners. We have the right strategic priorities in place to capture the opportunity ahead of us in 2022: to accelerate revenue growth, delight our customers, be the digital leader at scale, and continue to be a great place for our employees. I am excited for what we will achieve in 2022.” Non-GAAP Financial Measures The company has included non-GAAP revenue growth that excludes the impact of changes in foreign currency exchange rates and revenue earned from our acquisition of Hubs (collectively, “non-GAAP revenue growth”). Management believes these metrics are useful in evaluating the underlying business trends and ongoing operating performance of the company. The company has included earnings before interest, taxes, depreciation and amortization (“EBITDA”) and EBITDA, adjusted for stock-based compensation expense, unrealized (gain) loss on foreign currency, and transaction costs (collectively, “Adjusted EBITDA”), in this press release to provide investors with additional information regarding the company’s financial results. The company has included non-GAAP operating margin, adjusted for stock-based compensation expense, amortization expense, and transaction costs (collectively, “non-GAAP operating margin”), in this press release to provide investors with additional information regarding the company’s financial results. The company has included non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, and transaction costs (collectively, “non-GAAP net income”), in this press release to provide investors with additional information regarding the company’s financial results. The company has provided below reconciliations of GAAP to non-GAAP net income, non-GAAP operating margin, non-GAAP revenue growth and Adjusted EBITDA, the most directly comparable measures calculated and presented in accordance with GAAP. These non-GAAP measures are used by the company’s management and board of directors to understand and evaluate operating performance and trends and provide useful measures for period-to-period comparisons of the company’s business. Accordingly, the company believes that these non-GAAP measures provide useful information to investors and others in understanding and evaluating operating results in the same manner as our management and board of directors. Conference Call The company has scheduled a conference call to discuss its fourth quarter and full year 2021 financial results and first quarter 2022 outlook today, February 11, 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/cgi7nsd7. 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) December 31, December 31, 2021 2020 (Unaudited) Assets Current assets Cash and cash equivalents $ 65,929 $ 127,603 Short-term marketable securities 11,580 34,088 Accounts receivable, net 80,051 57,877 Inventory 13,161 10,862 Income taxes receivable 1,321 540 Prepaid expenses and other current assets 11,450 11,032 Total current assets 183,492 242,002 Property and equipment, net 280,346 282,666 Goodwill 400,610 128,752 Other intangible assets, net 37,998 14,350 Long-term marketable securities 14,340 59,357 Operating lease assets 5,578 9,855 Finance lease assets 1,898 2,396 Other long-term assets 4,320 4,826 Total assets $ 928,582 $ 744,204 Liabilities and shareholders' equity Current liabilities Accounts payable $ 25,364 $ 18,248 Accrued compensation 13,704 11,989 Accrued liabilities and other 11,980 16,193 Current operating lease liabilities 3,298 3,272 Current finance lease liabilities 550 552 Total current liabilities 54,896 50,254 Long-term operating lease liabilities 2,245 7,586 Long-term finance lease liabilities 1,351 1,919 Long-term deferred tax liabilities 35,892 33,854 Other long-term liabilities 5,705 6,235 Shareholders' equity 828,493 644,356 Total liabilities and shareholders' equity $ 928,582 $ 744,204 Proto Labs, Inc. Condensed Consolidated Statements of Operations (In thousands, except share and per share amounts) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2021 2020 2021 2020 Revenue Injection Molding $ 53,905 $ 52,065 $ 226,117 $ 217,992 CNC Machining 44,858 31,827 166,811 131,587 3D Printing 18,727 16,024 72,721 62,502 Sheet Metal 5,607 4,532 20,397 18,838 Other 485 760 2,052 3,476 Total revenue 123,582 105,208 488,098 434,395 Cost of revenue 68,170 52,580 265,407 216,568 Gross profit 55,412 52,628 222,691 217,827 Operating expenses Marketing and sales 20,229 17,488 82,175 69,309 Research and development 10,386 11,390 44,241 36,940 General and administrative 11,747 12,759 55,933 51,742 Total operating expenses 42,362 41,637 182,349 157,991 Income from operations 13,050 10,991 40,342 59,836 Other income (expense), net (118 ) 560 (158 ) 3,109 Income before income taxes 12,932 11,551 40,184 62,945 Provision for income taxes 1,022 1,972 6,812 12,078 Net income $ 11,910 $ 9,579 $ 33,372 $ 50,867 Net income per share: Basic $ 0.43 $ 0.36 $ 1.21 $ 1.90 Diluted $ 0.43 $ 0.36 $ 1.21 $ 1.89 Shares used to compute net income per share: Basic 27,555,357 26,775,279 27,617,627 26,737,425 Diluted 27,562,694 26,976,582 27,653,099 26,896,357 Proto Labs, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Year Ended December 31, 2021 2020 Operating activities Net income $ 33,372 $ 50,867 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 40,488 32,594 Stock-based compensation expense 19,095 14,673 Deferred taxes 339 7,577 Amortization of marketable securities - 415 Realized loss on available-for-sale securities 567 - Changes in fair value of contingent consideration (13,253 ) - Other 275 (336 ) Changes in operating assets and liabilities (25,641 ) 1,179 Net cash provided by operating activities 55,242 106,969 Investing activities Purchases of property, equipment and other capital assets (34,209 ) (47,010 ) Cash used for acquisitions, net of cash acquired (127,413 ) - Purchases of other assets and investments - (3,000 ) Purchases of marketable securities (16,159 ) (113,200 ) Proceeds from sales of marketable securities 64,913 - Proceeds from maturities of marketable securities 18,204 67,737 Net cash used in investing activities (94,664 ) (95,473 ) Financing activities Proceeds from exercises of stock options and other 5,862 7,557 Purchases of shares withheld for tax obligations (4,225 ) (3,443 ) Repurchases of common stock (23,279 ) (14,686 ) Principal repayments of finance lease obligations (552 ) (154 ) Other (4 ) - Net cash used in financing activities (22,198 ) (10,726 ) Effect of exchange rate changes on cash and cash equivalents (54 ) 1,608 Net (decrease) increase in cash and cash equivalents (61,674 ) 2,378 Cash and cash equivalents, beginning of period 127,603 125,225 Cash and cash equivalents, end of period $ 65,929 $ 127,603 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 Year Ended December 31, December 31, 2021 2020 2021 2020 Non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and transaction costs GAAP net income $ 11,910 $ 9,579 $ 33,372 $ 50,867 Add back: Stock-based compensation expense 3,556 4,056 19,095 14,673 Amortization expense 1,552 754 6,153 3,016 Unrealized (gain) loss on foreign currency 215 (353 ) 556 (1,373 ) Transaction costs 1 (4,705 ) 427 (10,575 ) 427 Total adjustments 2 618 4,884 15,229 16,743 Income tax benefits on adjustments 3 (1,150 ) (1,013 ) (5,789 ) (4,043 ) Non-GAAP net income $ 11,378 $ 13,450 $ 42,812 $ 63,567 Non-GAAP net income per share: Basic $ 0.41 $ 0.50 $ 1.55 $ 2.38 Diluted $ 0.41 $ 0.50 $ 1.55 $ 2.36 Shares used to compute non-GAAP net income per share: Basic 27,555,357 26,775,279 27,617,627 26,737,425 Diluted 27,562,694 26,976,582 27,653,099 26,896,357 1 Transaction costs include direct costs incurred in our acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations. 2 Stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency and transaction costs were included in the following GAAP consolidated statement of operations categories: Three Months Ended Year Ended December 31, December 31, 2021 2020 2021 2020 Cost of revenue $ 990 $ 1,032 $ 3,964 $ 3,820 Marketing and sales 895 888 3,736 3,121 Research and development 689 675 2,833 2,441 General and administrative (2,171 ) 2,642 4,140 8,734 Total operating expenses (587 ) 4,205 10,709 14,296 Other (income) expense, net 215 (353 ) 556 (1,373 ) Total adjustments $ 618 $ 4,884 $ 15,229 $ 16,743 3 For the three-month and year-ended periods ended December 31, 2021 and 2020, income tax effects were calculated using the effective tax rate for the relevant jurisdictions. Our non-GAAP tax rates differ from our GAAP tax rates due primarily to the mix of activity incurred in domestic and foreign tax jurisdictions and removing effective tax rate benefits from stock-based compensation activity in the quarter. Proto Labs, Inc. Reconciliation of GAAP to Non-GAAP Operating Margin (In thousands) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2021 2020 2021 2020 Revenue $ 123,582 $ 105,208 $ 488,098 $ 434,395 Income from operations 13,050 10,991 40,342 59,836 GAAP operating margin 10.6 % 10.4 % 8.3 % 13.8 % Add back: Stock-based compensation expense 3,556 4,056 19,095 14,673 Amortization expense 1,552 754 6,153 3,016 Transaction costs 1 (4,705 ) 427 (10,575 ) 427 Total adjustments 403 5,237 14,673 18,116 Non-GAAP income from operations $ 13,453 $ 16,228 $ 55,015 $ 77,952 Non-GAAP operating margin 10.9 % 15.4 % 11.3 % 17.9 % 1 Transaction costs include direct costs incurred in our acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations. Proto Labs, Inc. Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA (In thousands) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2021 2020 2021 2020 GAAP net income $ 11,910 $ 9,579 $ 33,372 $ 50,867 Amortization expense 1,552 754 6,153 3,016 Depreciation expense 8,705 7,949 34,335 29,578 Interest income, net (23 ) (149 ) (230 ) (1,332 ) Tax expense 1,022 1,972 6,812 12,078 EBITDA 23,166 20,105 80,442 94,207 Add back: Stock-based compensation expense 3,556 4,056 19,095 14,673 Unrealized (gain) loss on foreign currency 215 (353 ) 556 (1,373 ) Transaction costs 1 (4,705 ) 427 (10,575 ) 427 Total adjustments (934 ) 4,130 9,076 13,727 Adjusted EBITDA $ 22,232 $ 24,235 $ 89,518 $ 107,934 1 Transaction costs include direct costs incurred in our acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations. Proto Labs, Inc. Comparison of GAAP to Non-GAAP Revenue Growth (In thousands) (Unaudited) Three Months EndedDecember 31, 2021 Three Months EndedDecember 31, 2020 % GAAP Foreign Currency1 Hubs Acquisition2 Non-GAAP GAAP Change3 % Change Organic4 Revenues United States $ 97,934 $ - $ (5,109 ) $ 92,825 $ 83,201 17.7 % 11.6 % Europe 22,140 294 (4,784 ) 17,650 18,383 20.4 (4.0 ) Japan 3,508 310 - 3,818 3,624 (3.2 ) 5.4 Total Revenue $ 123,582 $ 604 $ (9,893 ) $ 114,293 $ 105,208 17.5 % 8.6 % Year EndedDecember 31, 2021 Year EndedDecember 31, 2020 % GAAP Foreign Currency1 Hubs Acquisition2 Non-GAAP GAAP Change3 % Change Organic4 Revenues United States $ 384,458 $ - $ (17,621 ) $ 366,837 $ 345,708 11.2 % 6.1 % Europe 90,399 (3,692 ) (15,726 ) 70,981 74,796 20.9 (5.1 ) Japan 13,241 393 - 13,634 13,891 (4.7 ) (1.9 ) Total Revenue $ 488,098 $ (3,299 ) $ (33,347 ) $ 451,452 $ 434,395 12.4 % 3.9 % 1 Revenue for the three-month and year-ended periods ended December 31, 2021 has been recalculated using 2020 foreign currency exchange rates in effect during comparable periods to provide information useful in evaluating the underlying business trends excluding the impact of changes in foreign currency exchange rates. 2 Revenue for the three-month and year-ended periods ended December 31, 2021 has been recalculated to exclude revenue earned from our acquisition of Hubs, Inc. to provide information useful in evaluating the underlying business trends excluding the impact of acquisitions. 3 This column presents the percentage change from GAAP revenue for the three-month and year-ended periods ended December 31, 2020 to GAAP revenue for the three-month and year-ended periods ended December 31, 2021. 4 This column presents the percentage change from GAAP revenue for the three-month and year-ended periods ended December 31, 2020 to non-GAAP revenue for the three-month and year-ended periods ended December 31, 2021 (as recalculated using the foreign currency exchange rates in effect during the three-month and year-ended periods ended December 31, 2020, excluding the impact of Hubs, Inc. acquisition) in order to provide a constant-currency comparison. Proto Labs, Inc. Product Developer Information (Unaudited) Three Months Ended Year Ended December 31, December 31, 2021 2020 2021 2020(1) Unique product developers and engineers served 23,376 18,157 55,330 43,808 (1) The unique product developers and engineers served for the year ended December 31, 2020 has been restated to include unique product developers and engineers who purchased injection molding parts only. Historically we included only those developers who purchased injection molds in our metric. View source version on businesswire.com: https://www.businesswire.com/news/home/20220211005097/en/
Investor Relations Contact Protolabs Ryan Johnsrud, 612-225-4873 Manager of Investor Relations, Corporate Development and Global FP&A ryan.johnsrud@protolabs.com Media Contact Protolabs Brent Renneke, 763-479-7704 PR & Media Strategist brent.renneke@protolabs.com