UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 13, 2013
Proto Labs, Inc.
(Exact name of registrant as specified in its charter)
| Minnesota | 001-35435 | 41-1939628 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification Number) | ||
| 5540 Pioneer Creek Drive Maple Plain, Minnesota |
55359 | |||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: (763) 479-3680
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02. | Results of Operations and Financial Condition |
On February 13, 2013, Proto Labs, Inc. issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2012. A copy of the press release is furnished as Exhibit 99.1 to this report.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
| 99.1 | Press release of Proto Labs, Inc. dated February 13, 2013, announcing its financial results for the fourth quarter and fiscal year ended December 31, 2012 | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Proto Labs, Inc. | ||||||
| Date: February 13, 2013 | By: | /s/ John R. Judd | ||||
| John R. Judd | ||||||
| Chief Financial Officer | ||||||
EXHIBIT INDEX
| Exhibit Number |
Description |
Manner of Filing |
||||
| 99.1 | Press release of Proto Labs, Inc. dated February 13, 2013, announcing its financial results for the fourth quarter and fiscal year ended December 31, 2012. | Filed electronically | ||||
Exhibit 99.1
Proto Labs Reports Record Revenue and Net Income for the Fourth Quarter 2012
Quarterly Revenue Increases 31% Year over Year to $33.6 Million
Quarterly Net Income Increases 129% Year over Year to $7.4 Million
MAPLE PLAIN, Minn.—February 13, 2013— Proto Labs, Inc. (NYSE: PRLB), a leading online and technology-enabled quick-turn manufacturer, today announced its financial results for the fourth quarter and the year ended December 31, 2012.
Highlights include:
| • | Revenue for the fourth quarter of 2012 increased to a record $33.6 million, 31 percent above revenue of $25.6 million in the fourth quarter of 2011. |
| • | For the year ended 2012, revenue increased to $126.0 million, or 27 percent above revenue of $98.9 million during 2011. |
| • | During 2012, revenue from 2,991 new customer companies totaled $20.8 million and revenue from 4,763 existing customer companies totaled $105.2 million. |
| • | Net income for the fourth quarter of 2012 totaled $7.4 million, or $0.29 per diluted share. Non-GAAP net income, excluding the after tax expense of stock compensation, was $7.9 million, or $0.31 per diluted share. See “Non-GAAP Financial Measure” below. |
| • | Net income during 2012 totaled $24.0 million, or $0.98 per diluted share. Non-GAAP net income, excluding the after tax expense of stock compensation, was $26.2 million, or $1.07 per diluted share. See “Non-GAAP Financial Measure” below. |
“The fourth quarter was a strong finish to a very good year, marked by record quarterly revenue and net income for Proto Labs,” said Brad Cleveland, President and CEO. “It is particularly encouraging that each of our global operations in the United States, Europe and Japan achieved quarterly revenue records. Our global colleagues did a tremendous job during the quarter despite significant economic challenges.”
Additional highlights include:
| • | Gross margin was 62.5 percent of revenue in the fourth quarter of 2012 compared with 56.8 percent during the same quarter in 2011. |
| • | During the fourth quarter of 2012, spending on research and development, including the Protoworks initiatives, totaled $2.5 million, or 7.5 percent of revenue. This compares to $1.6 million, or 6.2 percent of revenue during the fourth quarter of 2011. |
| • | Operating margin was 30.5 percent of revenue during the fourth quarter of 2012 compared to 19.1 percent in the fourth quarter of 2011. |
| • | Cash generated from operations totaled $25.3 million during 2012. Expenditures on capital equipment were $17.4 million during 2012. |
“Our manufacturing and engineering teams also continued their focus on streamlining our processes and further improving our already excellent margins. The result was yet another increase in our net income, and I would like to congratulate everyone involved on the success of their efforts,” concluded Mr. Cleveland.
Non-GAAP Financial Measure
The company has included non-GAAP net income, adjusted for stock-based compensation expense in this press release to provide investors with additional information regarding the company’s financial results. The company has provided below a reconciliation of non-GAAP net income, adjusted for stock-based compensation expense, to net income, the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP net income, adjusted for stock-based compensation expense, is used by the company’s management and board of directors to understand and evaluate operating performance and trends and provides a useful measure for period-to-period comparisons of the company’s business. Accordingly, the company believes that non-GAAP net income, adjusted for stock-based compensation expense, provides useful information to investors and others in understanding and evaluating operating results in the same manner as our management and board of directors.
Conference Call
The company has scheduled a conference call to discuss its fourth quarter financial results today, February 13, at 8:30 a.m. ET. To access the call in the U.S. please dial 800-659-2032. Outside the U.S. please dial 617-614-2712. Use participant code 74470100#. A simultaneous webcast of the call will also be available on the investor relations section of the company’s website at www.protolabs.com/investors. An audio replay will be available for 14 days following the call on the investor relations website of Proto Lab’s website.
About Proto Labs, Inc. Proto Labs is a leading online and technology-enabled quick-turn manufacturer of custom parts for prototyping and short-run production. Proto Labs provides “Real Parts, Really Fast” to product developers worldwide. Proto Labs utilizes computer numerical control (CNC) machining and injection molding to manufacture custom parts for our customers. For more information, visit protolabs.com.
Forward-Looking Statements
Statements contained in this press release regarding matters that are not historical or current facts are “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors which may cause the results of Proto Labs to be materially different than those expressed or implied in such statements. Certain of these risk factors and others are described in the “Risk Factors” section within reports filed with the SEC. Other unknown or unpredictable factors also could have material adverse effects on Proto Labs’ future results. The forward-looking statements included in this press release are made only as of the date hereof. Proto Labs cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Proto Labs expressly disclaims any intent or obligation to update any forward-looking statements to reflect subsequent events or circumstances.
Contacts:
Investor Relations:
Jack Judd, 763-479-7408
jack.judd@protolabs.com
Media Relations:
Bill Dietrick, 763-479-7664
bill.dietrick@protolabs.com
Proto Labs, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
| December 31, | December 31, | |||||||
| 2012 | 2011 | |||||||
| (Unaudited) | ||||||||
| Assets |
||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ | 36,759 | $ | 8,135 | ||||
| Short-term marketable securities |
25,137 | 250 | ||||||
| Accounts receivable, net |
15,791 | 11,533 | ||||||
| Inventory |
4,619 | 3,797 | ||||||
| Other current assets |
7,850 | 4,362 | ||||||
|
|
|
|
|
|||||
| Total current assets |
90,156 | 28,077 | ||||||
| Property and equipment, net |
45,316 | 34,249 | ||||||
| Long-term marketable securities |
36,965 | — | ||||||
| Other long-term assets |
1,493 | — | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 173,930 | $ | 62,326 | ||||
|
|
|
|
|
|||||
| Liabilities, redeemable convertible stock and shareholder’s equity (deficit) |
||||||||
| Current liabilities |
||||||||
| Accounts payable |
$ | 4,758 | $ | 4,431 | ||||
| Accrued compensation |
5,995 | 4,767 | ||||||
| Accrued liabilities and other |
513 | 351 | ||||||
| Current portion of long-term debt obligations |
273 | 390 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
11,539 | 9,939 | ||||||
| Deferred tax liability |
4,554 | 4,252 | ||||||
| Long-term debt obligations |
356 | 613 | ||||||
| Other |
782 | 871 | ||||||
| Redeemable convertible preferred and common stock |
— | 66,894 | ||||||
| Shareholders’ equity (deficit) |
156,699 | (20,243 | ) | |||||
|
|
|
|
|
|||||
| Total liabilities, redeemable convertible stock and shareholders’ equity (deficit) |
$ | 173,930 | $ | 62,326 | ||||
|
|
|
|
|
|||||
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, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenues |
||||||||||||||||
| Protomold |
$ | 23,674 | $ | 19,002 | $ | 90,371 | $ | 74,090 | ||||||||
| Firstcut |
9,942 | 6,635 | 35,620 | 24,849 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenues |
33,616 | 25,637 | 125,991 | 98,939 | ||||||||||||
| Cost of revenues |
12,611 | 11,073 | 49,853 | 39,324 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gross profit |
21,005 | 14,564 | 76,138 | 59,615 | ||||||||||||
| Operating expenses |
||||||||||||||||
| Marketing and sales |
4,658 | 4,612 | 18,098 | 15,752 | ||||||||||||
| Research and development |
2,515 | 1,584 | 9,137 | 5,222 | ||||||||||||
| General and administrative |
3,564 | 3,475 | 13,957 | 11,772 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
10,737 | 9,671 | 41,192 | 32,746 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from operations |
10,268 | 4,893 | 34,946 | 26,869 | ||||||||||||
| Other income (expense), net |
114 | (132 | ) | 23 | (114 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before income taxes |
10,382 | 4,761 | 34,969 | 26,755 | ||||||||||||
| Provision for income taxes |
2,987 | 1,531 | 10,944 | 8,783 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
7,395 | 3,230 | 24,025 | 17,972 | ||||||||||||
| Less: dividends on redeemable preferred stock |
— | (1,053 | ) | — | (4,179 | ) | ||||||||||
| Less: undistributed earnings allocated to preferred shareholders |
— | (673 | ) | — | (4,507 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income attributable to common shareholders |
$ | 7,395 | $ | 1,504 | $ | 24,025 | $ | 9,286 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income per share: |
||||||||||||||||
| Basic |
$ | 0.30 | $ | 0.12 | $ | 1.03 | $ | 0.75 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted |
$ | 0.29 | $ | 0.11 | $ | 0.98 | $ | 0.67 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Shares used to compute net income per share: |
||||||||||||||||
| Basic |
24,557,878 | 12,895,918 | 23,373,593 | 12,352,004 | ||||||||||||
| Diluted |
25,359,071 | 14,045,402 | 24,443,665 | 13,939,072 | ||||||||||||
Proto Labs, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Year Ended | ||||||||
| December 31, | ||||||||
| 2012 | 2011 | |||||||
| Operating activities |
||||||||
| Net income |
$ | 24,025 | $ | 17,972 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
6,080 | 4,264 | ||||||
| Stock-based compensation expense |
3,039 | 1,130 | ||||||
| Deferred taxes |
(582 | ) | 2,230 | |||||
| Excess tax benefit from stock-based compensation |
(6,218 | ) | (657 | ) | ||||
| Loss on disposal of property and equipment |
154 | (10 | ) | |||||
| Changes in operating assets and liabilities: |
(1,192 | ) | (1,394 | ) | ||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
25,306 | 23,535 | ||||||
|
|
|
|
|
|||||
| Investing activities |
||||||||
| Purchases of property and equipment |
(17,397 | ) | (19,003 | ) | ||||
| Purchases of marketable securities |
(84,219 | ) | — | |||||
| Proceeds from sale of marketable securities |
22,368 | 500 | ||||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(79,248 | ) | (18,503 | ) | ||||
|
|
|
|
|
|||||
| Financing activities |
||||||||
| Proceeds from initial public offering, net of offering costs |
71,530 | — | ||||||
| Proceeds from follow-on offering, net of offering costs |
2,451 | — | ||||||
| Payments on debt |
(388 | ) | (4,049 | ) | ||||
| Proceeds from exercises of warrants and stock options |
2,975 | 547 | ||||||
| Excess tax benefit from stock-based compensation |
6,218 | 657 | ||||||
|
|
|
|
|
|||||
| Net cash provided by (used in) financing activities |
82,786 | (2,845 | ) | |||||
|
|
|
|
|
|||||
| Effect of exchange rate changes on cash and cash equivalents |
(220 | ) | (153 | ) | ||||
|
|
|
|
|
|||||
| Net increase in cash and cash equivalents |
28,624 | 2,034 | ||||||
| Cash and cash equivalents, beginning of period |
8,135 | 6,101 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents, end of period |
$ | 36,759 | $ | 8,135 | ||||
|
|
|
|
|
|||||
Proto Labs, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measure
(In thousands, except share and per share amounts)
(Unaudited)
| Three Months Ended | Year Ended | |||||||
| December 31, 2012 | December 31, 2012 | |||||||
| Non-GAAP net income, adjusted for stock-based compensation expense: |
||||||||
| GAAP net income |
$ | 7,395 | $ | 24,025 | ||||
| Add back: Stock-based compensation expense |
||||||||
| Cost of revenue |
87 | 335 | ||||||
| Marketing and sales |
118 | 418 | ||||||
| Research and development |
140 | 486 | ||||||
| General and administrative |
332 | 1,800 | ||||||
|
|
|
|
|
|||||
| Total stock-based compensation expense |
677 | 3,039 | ||||||
| Less: Tax benefit on stock-based compensation |
(181 | ) | (844 | ) | ||||
|
|
|
|
|
|||||
| Non-GAAP net income |
$ | 7,891 | $ | 26,220 | ||||
|
|
|
|
|
|||||
| Non-GAAP net income per share: |
||||||||
| Basic |
$ | 0.32 | $ | 1.12 | ||||
|
|
|
|
|
|||||
| Diluted |
$ | 0.31 | $ | 1.07 | ||||
|
|
|
|
|
|||||
| Shares used to compute non-GAAP net income per share: |
||||||||
| Basic |
24,557,878 | 23,373,593 | ||||||
| Diluted |
25,359,071 | 24,443,665 | ||||||
Proto Labs, Inc.
Revenue by Geography — Based on Shipping Location
(In thousands)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenues |
||||||||||||||||
| Domestic |
||||||||||||||||
| United States |
$ | 24,979 | $ | 18,287 | $ | 94,866 | $ | 73,010 | ||||||||
| International |
||||||||||||||||
| Europe |
6,212 | 5,512 | 22,517 | 19,453 | ||||||||||||
| Japan |
1,396 | 1,002 | 4,814 | 2,852 | ||||||||||||
| United States |
1,029 | 836 | 3,794 | 3,624 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total international |
8,637 | 7,350 | 31,125 | 25,929 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenue |
$ | 33,616 | $ | 25,637 | $ | 125,991 | $ | 98,939 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Proto Labs, Inc.
Customer Information
(In thousands, except customer amounts)
(Unaudited)
| Year Ended December 31, | ||||||||||||||||
| 2012 | 2011 | |||||||||||||||
| Number of Customers |
Revenue ($) | Number of Customers |
Revenue ($) | |||||||||||||
| New Customers |
2,991 | $ | 20,766 | 2,598 | $ | 18,401 | ||||||||||
| Existing Customers |
4,763 | 105,225 | 3,430 | 80,538 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
7,754 | $ | 125,991 | 6,028 | $ | 98,939 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||