OREANDA-NEWS. 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 compared 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's 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.

Non-GAAP Financial Measures

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.

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.