Slide 1: Earnings Presentation Q1 2020
Earnings Presentation Q1 2020 April 30, 2020
Slide 2: Safe Harbor
SAFE HARBOR These slides and accompanying oral presentation may contain forward-looking statements. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity,
Slide 3: COVID-19 Response
y COVID-19 RESPONSE
Slide 4: COVID-19 | Protolabs Response
COVID-19 | PROTOLABS RESPONSE • Our response is guided by our core values: Teamwork | Trust | Achievement • Number one priority is the health and safety of: Our employees Our communities Our customers • Contribute to slowing the spread of the virus Monitor and quickly adapt to the crisis •
Slide 5: COVID-19 | Protolabs Response
COVID-19 | PROTOLABS RESPONSE Employee Health Proactive Financial Serving Our Customers Community Support and Safety Measures Manufacturing: new Prioritize COVID-19 customer Doubled employee charitable Scrutinize administrative spend, cleaning/sanitizing procedures; needs and waive expedite fees con
Slide 6: COVID-19 | Select Customer Examples
COVID-19 | SELECT CUSTOMER EXAMPLES • Zverse – CAD design services • NeuMoDx – Sample-to-result • University of Minnesota • Mercedes AMG High company – shifted business molecular diagnostic company Performance Powertrains (HPP) • Application – Prototype model to produce reusable face – British Formu
Slide 7: Q1 2020 Overview
y Q1 2020 OVERVIEW
Slide 8: Financial Highlights | Q1
FINANCIAL HIGHLIGHTS | Q1 Revenue • Revenue of $115.1 million, up 1.5% YoY ($M) 1.5% Middle of our guidance range $113.5 $115.1 Unique product developer growth of 1.5% 2019 2020 Non-GAAP EPS* • Non-GAAP EPS of $0.61, down $(0.08) YoY (12)% Above our guidance range Variable cost management to
Slide 9: Regional Revenue | Q1
REGIONAL REVENUE | Q1 YoY Revenue % by Region ($M) Q1 20 Q1 19 CHANGE* Q1 2020 Americas $90.1 $87.8 3% 4% 18% Europe $20.8 $21.3 1% Japan $4.2 $4.4 (4)% 78% TOTAL $115.1 $113.5 2% Americas Europe Japan *YoY CHANGE reflected in constant currency See reconciliation in Appendix. 9
Slide 10: Revenue by Service | Q1
REVENUE BY SERVICE | Q1 Injection Molding - Revenue CNC Machining - Revenue ($M) (1)% ($M) 0% $55.3 $54.8 $37.9 $37.9 2019 2020 2019 2020 3D Printing - Revenue Sheet Metal - Revenue ($M) ($M) 10% 12% $14.5 $15.9 $5.0 $5.6 2019 2020 2019 2020 10
Slide 11: Q1 2020 Financial Information
Q1 2020 FINANCIAL INFORMATION
Slide 12: Financial Results | Q1
FINANCIAL RESULTS | Q1 $M, EXCEPT SEQ. YoY PER SHARE AMOUNTS Q1 20 Q4 19 CHANGE Q1 19 CHANGE Revenue $115.1 $111.9 3% $113.5 1.5% Gross Margin 50.5% 50.6% (10) bps 51.9% (140) bps Non-GAAP 17.9% 19.2% (130) bps 20.6% (270) bps Operating Margin* Non-GAAP $0.61 $0.63 (4)% $0.69 (12)% Earnings Per Shar
Slide 13: YoY GAAP to Non-GAAP P&L | Q1
YoY GAAP to Non-GAAP P&L | Q1 Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 $ in thousands GAAP Adjustments Non-GAAP* GAAP Adjustments Non-GAAP* Revenue $115,108 - $115,108 $113,452 - $113,452 Cost of Revenue 57,008 (863) 56,145 54,592 (733) 53,859 Gross Profit $58,100 $863 $58
Slide 14: QoQ GAAP to Non-GAAP P&L | Q1
QoQ GAAP to Non-GAAP P&L | Q1 Three Months Ended March 31, 2020 Three Months Ended December 31, 2019 $ in thousands GAAP Adjustments Non-GAAP* GAAP Adjustments Non-GAAP* Revenue $115,108 - $115,108 $111.889 - $111.889 Cost of Revenue 57,008 (863) 56,145 55,311 (933) 54,378 Gross Profit $58,100 $863
Slide 15: Cash Flow and Balance Sheet | Q1
CASH FLOW and BALANCE SHEET | Q1 $M Q1 20 Q4 19 FY Q118 19 Operating Cash Flow $22.4 $32.3 $18.0 Capital Expenditures $13.4 $16.1 $12.7 Share Repurchases $11.2 $0 $17.3 Cash and Investments* $167.2 $173.6 $138.7 Debt* $0 $0 $0 *Balance Sheet items as of the end of the period. 15
Slide 16: Protolabs 2.0
y PROTOLABS 2.0
Slide 17: Protolabs 2.0 | Overview
PROTOLABS 2.0 | OVERVIEW • April 2020 Update: Protolabs 2.0 remains a priority for our business, but our top priority is to maintain the health and safety of our employees, communities, and customers as we continue to manage through the COVID-19 crisis. As a result, our Protolabs 2.0 timeline will l
Slide 18: Protolabs 2.0 | Benefits
PROTOLABS 2.0 | BENEFITS Customer Internal Speed Business Experience Productivity & Scalability Insights • More intuitive user • Less system • Ability to launch new • Easier access to data experience maintenance services faster across the enterprise, • Fewer clicks, better • More focus on • Easier t
Slide 19: Financial Outlook
y FINANCIAL OUTLOOK
Slide 20: Q2 2020 | April Projection
Q2 2020 | APRIL PROJECTION Projected April Revenue Performance by Region April – Projected YoY Revenue Growth • Americas April YoY growth: ~0% Injection Molding – Parts ~25% Excluding COVID-19 revenue: ~(15)% • Europe April per-day YoY growth: ~(15)% Injection Molding ~15% • Japan April per-day Yo
Slide 21: Thank You
THANK YOU PROTOLABS Manufacturing. Accelerated.
Slide 22: Appendix
APPENDIX
Slide 23: GAAP to Non-GAAP Reconciliation | EPS
GAAP to NON-GAAP RECONCILIATION | EPS ($ in thousands, except share and per share amounts) Three Months Ended March 31, 2020 2019 Non-GAAP net income, adjusted for stock-based compensation expense, amortization expense and unrealized (gain) loss on foreign currency GAAP net income $ 13,984 $ 15,511
Slide 24: GAAP to Non-GAAP Reconciliation | Revenue
GAAP to NON-GAAP RECONCILIATION | Revenue ($ in thousands) Three Months Three Months Ended Ended % Change March 31, 2020 March 31, 2019 % Constant 1 2 3 GAAP Adjustm ents Non-GAAP GAAP Change Currencies Revenues United States $ 90,076 $ - $ 90,076 $ 87,811 2.6% 2.6% Europe 20,787 648 21,435 21,254 (
Slide 25: GAAP to Non-GAAP Reconciliation | EBITDA
GAAP to NON-GAAP RECONCILIATION | EBITDA ($ in thousands) Three Months Ended March 31, 2020 2019 GAAP net income $ 13,984 $ 15,511 Amortization expense 754 871 Depreciation expense 7,204 6,568 Interest income, net (560) (581) Tax expense 3,895 4,150 EBITDA 25,277 26,519 Add back: Stock-based compens