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Protolabs Reports Financial Results for the Second Quarter of 2022

05 August 2022

Proto Labs, Inc. (“Protolabs” or “the company”) (NYSE: PRLB), the world’s leading provider of digital manufacturing services, today announced financial results for the second quarter ended June 30, 2022.

Second Quarter 2022 Highlights include:

  • Revenue for the second quarter of 2022 was $126.9 million, representing a 3.1 percent increase compared to revenue of $123.0 million in the second quarter of 2021.
  • Hubs generated $11.3 million of revenue in the second quarter, representing year-over-year growth of 26.3 percent.
  • On a GAAP basis, costs related to the closure of Japan operations were $5.2 million in the quarter. These costs have been excluded from our Non-GAAP results. See “Non-GAAP Financial Measures” below.
  • Net income was $2.6 million, or $0.09 per diluted share.
  • Non-GAAP net income was $12.8 million, or $0.46 per diluted share.

“Protolabs performed well in the quarter amid continuing supply chain challenges in the broader manufacturing industry and macroeconomic growth concerns,” said Rob Bodor, President and Chief Executive Officer. “We continue to make progress on our 2022 strategic priorities and are focused to execute on the integration of Protolabs and Hubs, bringing together two leading digital manufacturing offers to create the most comprehensive digital manufacturing offer to serve our customers.”

Additional Second Quarter 2022 Highlights include:

  • Protolabs served 24,058 unique product developers during the second quarter of 2022.
  • Gross margin was 45.2 percent of revenue, compared to 44.9 percent of revenue in the first quarter of 2022.
  • Non-GAAP gross margin was 45.9 percent of revenue, compared to 45.7 percent of revenue in the first quarter of 2022.
  • EBITDA was $15.1 million, or 11.9 percent of revenue.
  • Adjusted EBITDA was $24.6 million, or 19.4 percent of revenue.
  • Cash and investments balance was $110.1 million as of June 30, 2022.

“We are pleased with the sequential improvements in our margins in the second quarter,” said Dan Schumacher, Chief Financial Officer. “We continue to focus on executing our strategy through disciplined investments and cost controls while delivering value to our customers and profitable growth to our shareholders.”

Non-GAAP Financial Measures

The company has included non-GAAP revenue growth by region and by service line that excludes the impact of changes in foreign currency exchange rates and revenue earned from our acquisition of Hubs (collectively, “non-GAAP revenue growth”). Management believes these metrics are useful in evaluating the underlying business trends and ongoing operating performance of the company.

The company has included earnings before interest, taxes, depreciation and amortization (“EBITDA”) and EBITDA, adjusted for stock-based compensation expense, unrealized (gain) loss on foreign currency, costs related to the Japan closure activities and transaction costs (collectively, “Adjusted EBITDA”), in this press release to provide investors with additional information regarding the company’s financial results. The company has also included earnings before interest, taxes, depreciation and amortization margin (“EBITDA margin”) and EBITDA margin, adjusted for stock-based compensation expense, unrealized (gain) loss on foreign currency, costs related to the Japan closure activities and transaction costs (collectively, “Adjusted EBITDA margin”), in this press release to provide investors with additional information regarding the company’s financial results.

The company has included non-GAAP gross margin, adjusted for stock-based compensation expense and amortization expense, in this press release to provide investors with additional information regarding the company’s financial results.

The company has included non-GAAP operating margin, adjusted for stock-based compensation expense, amortization expense, costs related to the Japan closure activities and transaction costs (collectively, “non-GAAP operating margin”), in this press release to provide investors with additional information regarding the company’s financial results.

The company has included non-GAAP gross margin excluding Japan, adjusted for stock-based compensation expense and amortization expense in this press release to provide investors with additional information regarding the company’s financial results. The company has included non-GAAP operating margin excluding Japan, adjusted for stock-based compensation expense, amortization expense, costs related to the Japan closure activities and transaction costs (collectively, “non-GAAP operating margin excluding Japan”), in this press release to provide investors with additional information regarding the company’s financial results.

The company has included non-GAAP net income, adjusted for stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, costs related to Japan closure activities and transaction costs (collectively, “non-GAAP net income”), in this press release to provide investors with additional information regarding the company’s financial results.

The company has provided below reconciliations of GAAP to non-GAAP net income, non-GAAP gross margin, non-GAAP gross margin excluding Japan, non-GAAP operating margin, non-GAAP operating margin excluding Japan, non-GAAP revenue growth by region and by service, and Adjusted EBITDA and Adjusted EBITDA margin, to 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 2022 financial results and third quarter 2022 outlook today, August 5, 2022, 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/bfhv9mwu. 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)
             
             
       

June 30,

 

December 31,

       

2022

 

2021

       

(Unaudited)

 

 

  Assets        
  Current assets      
    Cash and cash equivalents

$

54,666

 

$

65,929

    Short-term marketable securities

 

24,379

 

 

11,580

    Accounts receivable, net

 

82,469

 

 

80,051

    Inventory

 

15,051

 

 

13,161

    Income taxes receivable

 

2,627

 

 

1,321

    Prepaid expenses and other current assets

 

11,484

 

 

11,450

      Total current assets

 

190,676

 

 

183,492

             
  Property and equipment, net

 

260,631

 

 

280,346

  Goodwill

 

390,354

 

 

400,610

  Other intangible assets, net

 

34,026

 

 

37,998

  Long-term marketable securities

 

31,068

 

 

14,340

  Operating lease assets

 

4,037

 

 

5,578

  Finance lease assets

 

1,649

 

 

1,898

  Long-term assets held for sale

 

1,985

 

 

-

  Other long-term assets

 

4,223

 

 

4,320

      Total assets

$

918,649

 

$

928,582

             
  Liabilities and shareholders' equity      
  Current liabilities      
    Accounts payable

$

15,642

 

$

25,364

    Accrued compensation

 

16,687

 

 

13,704

    Accrued liabilities and other

 

24,011

 

 

11,980

    Current operating lease liabilities

 

2,140

 

 

3,298

    Current finance lease liabilities

 

436

 

 

550

      Total current liabilities

 

58,916

 

 

54,896

             
  Long-term operating lease liabilities

 

1,886

 

 

2,245

  Long-term finance lease liabilities

 

1,188

 

 

1,351

  Long-term deferred tax liabilities

 

30,177

 

 

35,892

  Other long-term liabilities

 

5,784

 

 

5,705

             
  Shareholders' equity

 

820,698

 

 

828,493

  Total liabilities and shareholders' equity

$

918,649

 

$

928,582

             
                 
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,

   

2022

 

2021

 

2022

 

2021

  Revenue

 

 

 

 

 

 

 

  Injection Molding

$

53,355

 

$

58,168

 

$

106,753

 

 

$

114,527

 

  CNC Machining

 

48,222

 

 

41,592

 

 

94,320

 

 

 

78,295

 

  3D Printing

 

19,963

 

 

18,170

 

 

39,635

 

 

 

35,405

 

  Sheet Metal

 

5,160

 

 

4,717

 

 

9,847

 

 

 

9,936

 

  Other

 

202

 

 

401

 

 

515

 

 

 

1,011

 

  Total revenue

 

126,902

 

 

123,048

 

 

251,070

 

 

 

239,174

 

                 
  Cost of revenue

 

69,480

 

 

66,423

 

 

137,844

 

 

 

127,219

 

  Gross profit

 

57,422

 

 

56,625

 

 

113,226

 

 

 

111,955

 

                 
  Operating expenses              
  Marketing and sales

 

21,055

 

 

21,044

 

 

41,641

 

 

 

40,524

 

  Research and development

 

9,450

 

 

11,060

 

 

20,007

 

 

 

23,241

 

  General and administrative

 

16,522

 

 

8,417

 

 

33,293

 

 

 

27,825

 

  Closure of Japan business

 

5,194

 

 

-

 

 

5,194

 

 

 

-

 

  Total operating expenses

 

52,221

 

 

40,521

 

 

100,135

 

 

 

91,590

 

  Income from operations

 

5,201

 

 

16,104

 

 

13,091

 

 

 

20,365

 

  Other income (loss), net

 

1

 

 

137

 

 

(299

)

 

 

(176

)

  Income before income taxes

 

5,202

 

 

16,241

 

 

12,792

 

 

 

20,189

 

  Provision for income taxes

 

2,645

 

 

3,326

 

 

5,140

 

 

 

3,562

 

  Net income

$

2,557

 

$

12,915

 

$

7,652

 

 

$

16,627

 

                 
  Net income per share:              
  Basic

$

0.09

 

$

0.47

 

$

0.28

 

 

$

0.60

 

  Diluted

$

0.09

 

$

0.47

 

$

0.28

 

 

$

0.60

 

                 
  Shares used to compute net income per share:              
  Basic

 

27,530,739

 

 

27,735,732

 

 

27,515,583

 

 

 

27,600,684

 

  Diluted

 

27,536,823

 

 

27,744,870

 

 

27,524,019

 

 

 

27,741,464

 

                 
                 
Proto Labs, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
       
 

Six Months Ended

 

June 30,

 

2022

 

2021

Operating activities      
Net income

$

7,652

 

 

$

16,627

 

Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization

 

20,274

 

 

 

20,127

 

Stock-based compensation expense

 

8,428

 

 

 

10,561

 

Deferred taxes

 

(5,653

)

 

 

419

 

Changes in fair value of contingent consideration

 

-

 

 

 

(7,763

)

Impairments related to closure of Japan business

 

1,792

 

 

 

-

 

Other

 

32

 

 

 

269

 

Changes in operating assets and liabilities

 

(1,485

)

 

 

(19,511

)

Net cash provided by operating activities

 

31,040

 

 

 

20,729

 

       
Investing activities      
Purchases of property, equipment and other capital assets

 

(6,030

)

 

 

(23,929

)

Cash used for acquisitions, net of cash acquired

 

-

 

 

 

(127,413

)

Purchases of marketable securities

 

(38,882

)

 

 

(15,159

)

Proceeds from sales of marketable securities

 

1,000

 

 

 

47,694

 

Proceeds from call redemptions and maturities of marketable securities

 

7,396

 

 

 

13,725

 

Net cash used in investing activities

 

(36,516

)

 

 

(105,082

)

       
Financing activities      
Proceeds from exercises of stock options and other

 

2,311

 

 

 

3,838

 

Purchases of shares withheld for tax obligations

 

(1,615

)

 

 

(4,209

)

Repurchases of common stock

 

(5,239

)

 

 

(1,210

)

Principal repayments of finance lease obligations

 

(278

)

 

 

(275

)

Net cash used in financing activities

 

(4,821

)

 

 

(1,856

)

Effect of exchange rate changes on cash and cash equivalents

 

(966

)

 

 

515

 

Net decrease in cash and cash equivalents

 

(11,263

)

 

 

(85,694

)

Cash and cash equivalents, beginning of period

 

65,929

 

 

 

127,603

 

Cash and cash equivalents, end of period

$

54,666

 

 

$

41,909

 

       
       
 
               
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

 

Six Months Ended

 

June 30,

 

June 30,

 

2022

 

2021

 

2022

 

2021

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

$

2,557

 

 

$

12,915

 

 

$

7,652

 

 

$

16,627

 

Add back:              
Stock-based compensation expense

 

4,031

 

 

 

4,941

 

 

 

8,428

 

 

 

10,561

 

Amortization expense

 

1,527

 

 

 

1,490

 

 

 

3,072

 

 

 

3,033

 

Unrealized (gain) loss on foreign currency

 

271

 

 

 

(402

)

 

 

360

 

 

 

220

 

Costs related to Japan closure activities

 

5,194

 

 

 

-

 

 

 

5,194

 

 

 

-

 

Transaction costs 1

 

-

 

 

 

(7,655

)

 

 

-

 

 

 

(5,140

)

Total adjustments 2

 

11,023

 

 

 

(1,626

)

 

 

17,054

 

 

 

8,674

 

Income tax benefits on adjustments 3

 

(776

)

 

 

(575

)

 

 

(1,458

)

 

 

(3,576

)

Non-GAAP net income

$

12,804

 

 

$

10,714

 

 

$

23,248

 

 

$

21,725

 

               
               
Non-GAAP net income per share:              
Basic

$

0.47

 

 

$

0.39

 

 

$

0.84

 

 

$

0.79

 

Diluted

$

0.46

 

 

$

0.39

 

 

$

0.84

 

 

$

0.78

 

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

 

27,530,739

 

 

 

27,735,732

 

 

 

27,515,583

 

 

 

27,600,684

 

Diluted

 

27,536,823

 

 

 

27,744,870

 

 

 

27,524,019

 

 

 

27,741,464

 

               
               
1 Transaction costs include direct costs incurred in the Company's acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations.
2 Stock-based compensation expense, amortization expense, unrealized (gain) loss on foreign currency, costs related to Japan closure activities and transaction costs were included in the following GAAP consolidated statement of operations categories:
 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2022

 

2021

 

2022

 

2021

               
Cost of revenue

$

870

 

 

$

1,011

 

 

$

1,799

 

 

$

1,988

 

               
Marketing and sales

 

813

 

 

 

929

 

 

 

1,550

 

 

 

1,782

 

Research and development

 

471

 

 

 

744

 

 

 

1,100

 

 

 

1,368

 

General and administrative

 

3,404

 

 

 

(3,908

)

 

 

7,051

 

 

 

3,316

 

Closure of Japan business

 

5,194

 

 

 

-

 

 

 

5,194

 

 

 

-

 

Total operating expenses

 

9,882

 

 

 

(2,235

)

 

 

14,895

 

 

 

6,466

 

               
Other (income) expense, net

 

271

 

 

 

(402

)

 

 

360

 

 

 

220

 

Total adjustments

$

11,023

 

 

$

(1,626

)

 

$

17,054

 

 

$

8,674

 

               
3 For the three- and six-month periods ended June 30, 2022 and 2021, income tax effects were calculated using the effective tax rate for the relevant jurisdictions. The Company's non-GAAP tax rates differ from its GAAP tax rates due primarily to the mix of activity incurred in domestic and foreign tax jurisdictions and removing effective tax rate benefits from stock-based compensation activity in the quarter.
 
 
 
Proto Labs, Inc.
Reconciliation of GAAP to Non-GAAP Gross Margin
(In thousands)
(Unaudited)
                       
 

Three Months Ended

 

Six Months Ended

 

Three Months Ended

 

June 30,

 

June 30,

 

March 31,

 

2022

 

2021

 

2022

 

2021

 

2022

 

2021

Revenue

$

126,902

 

 

$

123,048

 

 

$

251,070

 

 

$

239,174

 

 

$

124,168

 

 

$

116,126

 

Gross Profit

 

57,422

 

 

 

56,625

 

 

 

113,226

 

 

 

111,955

 

 

 

55,804

 

 

 

55,330

 

GAAP gross margin

 

45.2

%

 

 

46.0

%

 

 

45.1

%

 

 

46.8

%

 

 

44.9

%

 

 

47.6

%

Add back:                      
Stock-based compensation expense

 

528

 

 

 

668

 

 

 

1,115

 

 

 

1,303

 

 

 

587

 

 

 

635

 

Amortization expense

 

342

 

 

 

343

 

 

 

684

 

 

 

685

 

 

 

342

 

 

 

342

 

Total adjustments

 

870

 

 

 

1,011

 

 

 

1,799

 

 

 

1,988

 

 

 

929

 

 

 

977

 

Non-GAAP gross profit

$

58,292

 

 

$

57,636

 

 

$

115,025

 

 

$

113,943

 

 

$

56,733

 

 

$

56,307

 

Non-GAAP gross margin

 

45.9

%

 

 

46.8

%

 

 

45.8

%

 

 

47.6

%

 

 

45.7

%

 

 

48.5

%

                       
                       
Proto Labs, Inc.
Reconciliation of GAAP to Non-GAAP Gross Margin Excluding Japan
(In thousands)
(Unaudited)
               
 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2022

 

2021

 

2022

 

2021

Revenue

$

126,902

 

 

$

123,048

 

 

$

251,070

 

 

$

239,174

 

Revenue excluding Japan

$

124,046

 

 

$

119,999

 

 

$

244,128

 

 

$

232,501

 

Gross Profit

 

57,422

 

 

 

56,625

 

 

 

113,226

 

 

 

111,955

 

GAAP gross margin

 

45.2

%

 

 

46.0

%

 

 

45.1

%

 

 

46.8

%

Less: Japan gross profit

 

1,063

 

 

 

1,125

 

 

 

3,102

 

 

 

2,694

 

Gross Profit excluding Japan

 

56,359

 

 

 

55,500

 

 

 

110,124

 

 

 

109,261

 

GAAP gross margin excluding Japan

 

45.4

%

 

 

46.3

%

 

 

45.1

%

 

 

47.0

%

Add back:              
Stock-based compensation expense

 

528

 

 

 

668

 

 

 

1,115

 

 

 

1,303

 

Amortization expense

 

342

 

 

 

343

 

 

 

684

 

 

 

685

 

Less:              
Japan stock-based compensation expense

 

22

 

 

 

22

 

 

 

47

 

 

 

45

 

Japan amortization expense

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total adjustments

 

848

 

 

 

989

 

 

 

1,752

 

 

 

1,943

 

Non-GAAP gross profit excluding Japan

$

57,207

 

 

$

56,489

 

 

$

111,876

 

 

$

111,204

 

Non-GAAP gross margin excluding Japan

 

46.1

%

 

 

47.1

%

 

 

45.8

%

 

 

47.8

%

               
               
Proto Labs, Inc.
Reconciliation of GAAP to Non-GAAP Operating Margin
(In thousands)
(Unaudited)
                 
   

Three Months Ended

 

Six Months Ended

   

June 30,

 

June 30,

   

2022

 

2021

 

2022

 

2021

  Revenue

$

126,902

 

 

$

123,048

 

 

$

251,070

 

 

$

239,174

 

  Income from operations

 

5,201

 

 

 

16,104

 

 

 

13,091

 

 

 

20,365

 

  GAAP operating margin

 

4.1

%

 

 

13.1

%

 

 

5.2

%

 

 

8.5

%

  Add back:              
  Stock-based compensation expense

 

4,031

 

 

 

4,941

 

 

 

8,428

 

 

 

10,561

 

  Amortization expense

 

1,527

 

 

 

1,490

 

 

 

3,072

 

 

 

3,033

 

  Transaction costs 1

 

-

 

 

 

(7,655

)

 

 

-

 

 

 

(5,140

)

  Costs related to Japan closure activities

 

5,194

 

 

 

-

 

 

 

5,194

 

 

 

-

 

  Total adjustments

 

10,752

 

 

 

(1,224

)

 

 

16,694

 

 

 

8,454

 

  Non-GAAP income from operations

$

15,953

 

 

$

14,880

 

 

$

29,785

 

 

$

28,819

 

  Non-GAAP operating margin

 

12.6

%

 

 

12.1

%

 

 

11.9

%

 

 

12.0

%

                 
                 
  1 Transaction costs include direct costs incurred in the Company's acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations.
                 
                 
Proto Labs, Inc.
Reconciliation of GAAP to Non-GAAP Operating Margin Excluding Japan
(In thousands)
(Unaudited)
                 
   

Three Months Ended

 

Six Months Ended

   

June 30,

 

June 30,

   

2022

 

2021

 

2022

 

2021

  Revenue

$

126,902

 

 

$

123,048

 

 

$

251,070

 

 

$

239,174

 

  Revenue excluding Japan

$

124,046

 

 

$

119,999

 

 

$

244,128

 

 

$

232,501

 

  Income from operations

 

5,201

 

 

 

16,104

 

 

 

13,091

 

 

 

20,365

 

  GAAP operating margin

 

4.1

%

 

 

13.1

%

 

 

5.2

%

 

 

8.5

%

  Less: Japan income from operations

 

(542

)

 

 

(696

)

 

 

4

 

 

 

(654

)

  Income from operations excluding Japan

 

5,743

 

 

 

16,800

 

 

 

13,087

 

 

 

21,019

 

  GAAP operating margin excluding Japan

 

4.6

%

 

 

14.0

%

 

 

5.4

%

 

 

9.0

%

  Add back:              
  Stock-based compensation expense

 

4,031

 

 

 

4,941

 

 

 

8,428

 

 

 

10,561

 

  Amortization expense

 

1,527

 

 

 

1,490

 

 

 

3,072

 

 

 

3,033

 

  Transaction costs 1

 

-

 

 

 

(7,655

)

 

 

-

 

 

 

(5,140

)

  Costs related to Japan closure activities

 

5,194

 

 

 

-

 

 

 

5,194

 

 

 

-

 

  Less:              
  Japan stock-based compensation expense

 

147

 

 

 

160

 

 

 

297

 

 

 

303

 

  Japan amortization expense

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

  Total adjustments

 

10,605

 

 

 

(1,384

)

 

 

16,397

 

 

 

8,151

 

  Non-GAAP income from operations excluding Japan

$

16,348

 

 

$

15,416

 

 

$

29,484

 

 

$

29,170

 

  Non-GAAP operating margin excluding Japan

 

13.2

%

 

 

12.8

%

 

 

12.1

%

 

 

12.5

%

                 
   
  1 Transaction costs include direct costs incurred in the Company's acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations.
   
   
 
                 
Proto Labs, Inc.
Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA
(In thousands)
(Unaudited)
                 
   

Three Months Ended

 

Six Months Ended

   

June 30,

 

June 30,

   

2022

 

2021

 

2022

 

2021

  Revenue

$

126,902

 

 

$

123,048

 

 

$

251,070

 

 

$

239,174

 

  GAAP net income

 

2,557

 

 

 

12,915

 

 

 

7,652

 

 

 

16,627

 

  GAAP net income margin

 

2.0

%

 

 

10.5

%

 

 

3.0

%

 

 

7.0

%

  Add back:              
  Amortization expense

$

1,527

 

 

$

1,490

 

 

$

3,072

 

 

$

3,033

 

  Depreciation expense

 

8,515

 

 

 

8,578

 

 

 

17,202

 

 

 

17,094

 

  Interest income, net

 

(149

)

 

 

(65

)

 

 

(194

)

 

 

(152

)

  Tax expense

 

2,645

 

 

 

3,326

 

 

 

5,140

 

 

 

3,562

 

  EBITDA

 

15,095

 

 

 

26,244

 

 

 

32,872

 

 

 

40,164

 

  EBITDA Margin

 

11.9

%

 

 

21.3

%

 

 

13.1

%

 

 

16.8

%

  Add back:              
  Stock-based compensation expense

 

4,031

 

 

 

4,941

 

 

 

8,428

 

 

 

10,561

 

  Unrealized (gain) loss on foreign currency

 

271

 

 

 

(402

)

 

 

360

 

 

 

220

 

  Costs related to Japan closure activities

 

5,194

 

 

 

-

 

 

 

5,194

 

 

 

-

 

  Transaction costs 1

 

-

 

 

 

(7,655

)

 

 

-

 

 

 

(5,140

)

  Total adjustments

 

9,496

 

 

 

(3,116

)

 

 

13,982

 

 

 

5,641

 

  Adjusted EBITDA

$

24,591

 

 

$

23,128

 

 

$

46,854

 

 

$

45,805

 

  Adjusted EBITDA Margin

 

19.4

%

 

 

18.8

%

 

 

18.7

%

 

 

19.2

%

                 
                 
  1 Transaction costs include direct costs incurred in the Company's acquisition of Hubs, Inc. and the impact of changes in the fair value of acquisition-related contingent consideration obligations.
                 
 
                                     
Proto Labs, Inc.
Comparison of GAAP to Non-GAAP Revenue Growth by Region
(In thousands)
(Unaudited)
                                     
     

Three Months Ended
June 30, 2022

 

Three Months Ended
June 30, 2021

 

 

 

 

 

   
     

GAAP

 

Foreign

Currency1

 

Hubs

Acquisition

 

Non-GAAP

 

GAAP

 

%

Change3

 

 

% Change

Organic4

   
  Revenues                                  
  United States  

$

100,655

 

$

-

 

$

-

 

 

$

100,655

 

$

95,344

 

5.6

 

%

 

5.6

 

%

  Europe  

 

23,391

 

 

2,225

 

 

-

 

 

 

25,616

 

 

24,655

 

(5.1

)

   

3.9

   
  Japan  

 

2,856

 

 

524

 

 

-

 

 

 

3,380

 

 

3,049

 

(6.3

)

   

10.9

   
  Total Revenue  

$

126,902

 

$

2,749

 

$

-

 

 

$

129,651

 

$

123,048

 

3.1

 

%

 

5.4

 

%

                                     
                                     
     

Six Months Ended
June 30, 2022

 

Six Months Ended
June 30, 2021

 

 

 

 

 

   
     

GAAP

 

Foreign

Currency1

 

Hubs

Acquisition2

 

Non-GAAP

 

GAAP

 

%

Change3

 

 

% Change

Organic4

   
  Revenues                                  
  United States  

$

196,151

 

$

-

 

$

(1,049

)

 

$

195,102

 

$

186,397

 

5.2

 

%

 

4.7

 

%

  Europe  

 

47,977

 

 

3,376

 

 

(1,279

)

 

 

50,074

 

 

46,104

 

4.1

 

   

8.6

   
  Japan  

 

6,942

 

 

916

 

 

-

 

 

 

7,858

 

 

6,673

 

4.0

 

   

17.8

   
  Total Revenue  

$

251,070

 

$

4,292

 

$

(2,328

)

 

$

253,034

 

$

239,174

 

5.0

 

%

 

5.8

 

%

                                     
  1 Revenue for the three- and six-month periods ended June 30, 2022 has been recalculated using 2021 foreign currency exchange rates in effect during comparable periods to provide information useful in evaluating the underlying business trends excluding the impact of changes in foreign currency exchange rates.
  2 Revenue for the six-month period ended June 30, 2022 has been recalculated to exclude revenue earned from the Company's acquisition of Hubs, Inc. for the period from January 1, 2022 to January 21, 2022 to provide information useful in evaluating the underlying business trends excluding the impact of acquisitions. The Hubs, Inc. acquisition occurred on January 22, 2021 and was included in 2021 revenue after that date.
  3 This column presents the percentage change from GAAP revenue for the three- and six-month periods ended June 30, 2021 to GAAP revenue for the three- and six-month periods ended June 30, 2022.
  4 This column presents the percentage change from GAAP revenue for the three- and six-month periods ended June 30, 2021 to non-GAAP revenue for the three- and six-month periods ended June 30, 2022 (as recalculated using the foreign currency exchange rates in effect during the three-month period ended June 30, 2021, excluding the impact of Hubs, Inc. acquisition) in order to provide a constant-currency comparison.
   
   
 
                                 
Proto Labs, Inc.
Comparison of GAAP to Non-GAAP Revenue Growth by Service Line
(In thousands)
(Unaudited)
                                 
   

Three Months Ended
June 30, 2022

 

Three Months Ended
June 30, 2021

 

 

 

 

 

 
   

GAAP

 

Foreign

Currency1

 

Hubs

Acquisition

 

Non-GAAP

 

GAAP

 

%

Change3

 

 

% Change

Organic4

 
Revenues                                
Injection Molding

$

53,355

 

$

1,541

 

$

-

 

 

$

54,896

 

$

58,168

 

(8.3

)

%

 

(5.6

)

%

CNC Machining  

 

48,222

 

 

717

 

 

-

 

 

 

48,939

 

 

41,592

 

15.9

 

   

17.7

 

 
3D Printing  

 

19,963

 

 

490

 

 

-

 

 

 

20,453

 

 

18,170

 

9.9

 

   

12.6

 

 
Sheet Metal  

 

5,160

 

 

-

 

 

-

 

 

 

5,160

 

 

4,717

 

9.4

 

   

9.4

 

 
Other  

 

202

 

 

1

 

 

-

 

 

 

203

 

 

401

 

(49.6

)

   

(49.4

)

 
Total Revenue  

$

126,902

 

$

2,749

 

$

-

 

 

$

129,651

 

$

123,048

 

3.1

 

%

 

5.4

 

%

                                 
                                 
   

Six Months Ended
June 30, 2022

 

Six Months Ended
June 30, 2021

 

 

 

 

 

 
   

GAAP

 

Foreign

Currency1

 

Hubs

Acquisition2

 

Non-GAAP

 

GAAP

 

%

Change3

 

 

% Change

Organic4

 
Revenues                                
Injection Molding

$

106,753

 

$

2,425

 

$

(189

)

 

$

108,989

 

$

114,527

 

(6.8

)

%

 

(4.8

)

%

CNC Machining  

 

94,320

 

 

1,113

 

 

(1,637

)

 

 

93,796

 

 

78,295

 

20.5

 

   

19.8

 

 
3D Printing  

 

39,635

 

 

750

 

 

(408

)

 

 

39,977

 

 

35,405

 

11.9

 

   

12.9

 

 
Sheet Metal  

 

9,847

 

 

-

 

 

(84

)

 

 

9,763

 

 

9,936

 

(0.9

)

   

(1.7

)

 
Other  

 

515

 

 

4

 

 

(10

)

 

 

509

 

 

1,011

 

(49.1

)

   

(49.6

)

 
Total Revenue  

$

251,070

 

$

4,292

 

$

(2,328

)

 

$

253,034

 

$

239,174

 

5.0

 

%

 

5.8

 

%

                                 
1 Revenue for the three- and six-month periods ended June 30, 2022 has been recalculated using 2021 foreign currency exchange rates in effect during comparable periods to provide information useful in evaluating the underlying business trends excluding the impact of changes in foreign currency exchange rates.
2 Revenue for the six-month period ended June 30, 2022 has been recalculated to exclude revenue earned from the Company's acquisition of Hubs, Inc. for the period from January 1, 2022 to January 21, 2022 to provide information useful in evaluating the underlying business trends excluding the impact of acquisitions. The Hubs, Inc. acquisition occurred on January 22, 2021 and was included in 2021 revenue after that date.
3 This column presents the percentage change from GAAP revenue for the three- and six-month periods ended June 30, 2021 to GAAP revenue for the three- and six-month periods ended June 30, 2022.
4 This column presents the percentage change from GAAP revenue for the three- and six-month periods ended June 30, 2021 to non-GAAP revenue for the three- and six-month periods ended June 30, 2022 (as recalculated using the foreign currency exchange rates in effect during the three-month period ended June 30, 2021, excluding the impact of Hubs, Inc. acquisition) in order to provide a constant-currency comparison.
 
 
 
                       
Proto Labs, Inc.
Product Developer Information
(Unaudited)
                       
         

Three Months Ended

 

Six Months Ended

         

June 30,

 

June 30,

         

2022

 

2021

 

2022

 

2021

  Unique product developers and engineers served      

24,058

 

23,253

 

36,878

 

35,065

                       

 

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