These slides and accompanying oral presentation 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, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other comparable terminology. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and that could materially affect actual results, levels of activity, performance, or achievements.
Other factors that could materially affect actual results, levels of activity, performance or achievements can be found in Proto Labs’ SEC filings, including the Form 10-K for the year ended December 31, 2015 and the quarterly Form 10-Q filings. If any of these risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what we projected. Any forward-looking statement you see or hear during this presentation reflects our current views with respect to future events and is subject to these and other risks, uncertainties, and assumptions relating to our operations, results of operations, growth strategy, and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise.
Proto Labs is a digital manufacturer that helps companies large and small
improve product development, reduce risk and accelerate product launch.
•
World’s fastest on-demand manufacturer of custom prototypes
and low-volume production parts.
•
Unprecedented speed-to-market value for product developers and
engineers worldwide.
•
Capability to ship parts as soon as the same day they are ordered.
•
eCommerce-driven digital manufacturing model.
•
Proprietary software automation reduces development cycle and
design risks — driving significant savings for companies.
•
Technology-agnostic with three distinct rapid manufacturing services:
•
Injection molding
•
CNC machining
•
3D printing
>
About Proto Labs
>
A Reputation for Financial Growth
A Strong Foundation
1999–2006
Rapid Expansion
2007–2011
A Public Introduction
2012–2013
Eyeing the Future
2014 & Beyond
1999
• Humble beginnings: ProtoMold founded
2005
• European expansion:
Manufacturing plant opened in the UK
2007
• New service: Firstcut CNC Machining launched
2009
• Rebranded:Protomold + Firstcut = Proto Labs
• Japan expansion:
Manufacturing plant opened
2010
• Revenue builds: >$50 million
2012
• Revenue doubles:
>$100 million, EPS of $0.98 per share • IPO in February at $16 /
share valuing the company at $370 million
• New injection molding facility opened in MN
2014
• Revenue doubles, again:
>$200 million, EPS of $1.60 per share
• Vicki Holt named CEO • FineLine Prototyping
acquired adding 3D printing service
• New MN facility opened • LSR and lathe manufacturing
processes launched
2015
• Growth continues:
Germany-based Alphaform AG acquired
• Stereolithography
• Selective Laser Sintering • Direct Metal Laser Sintering
>> 3D PRINTING
• Milling • Turning
>> CNC MACHINING
• Plastic Injection Molding • Liquid Silicone Rubber
>> INJECTION MOLDING
Volume: 1 to 50+ parts Speed: Shipped in 1 to 7 days Cost: Starting at $95
Volume: 25 to 10,000+ parts Speed: Shipped in 1 to 15 days Cost: Starting at $1,495
Volume: 1 to 200+ parts Speed: Shipped in 1 to 3 days Cost: Starting at $65
>
Digital Manufacturing Services
Industrial 3D printing works best for rapid prototyping, complex designs, multipart assemblies and even functional, end-use parts. Stereolithography (SL), selective laser sintering (SLS) and direct metal laser sintering (DMLS) are offered.
Our machining capabilities include both milling and turning with live tooling. Quick-turn machining is ideal for functional prototypes, non-orthogonal parts and end-use components in small quantities.
Rapid injection molding produces thermoplastic and liquid silicone rubber parts. It’s ideal for engineering-grade prototypes, bridge tooling and low-volume production parts.
>
2015 Revenue by Service and Geography
Injection Molding
61.9%
CNC Machining
28.2%
3D Printing 9.5%
Other 0.5%
United States
78.8%
Europe 18.0%
Japan 3.3%
REVENUE BY GEOGRAPHY
REVENUE BY SERVICE
>
Industries Served
•
UNIQUE PRODUCT DEVELOPERS SERVED:
27,235
in 2015
•
PARTS MOLDED:
2.9 million
each month
•
PARTS 3D PRINTED:
45,000
each month
•
MACHINES MANUFACTURING PARTS:
750+
BASED ON 2015 GLOBAL STATISTICS.
>
Follow the Numbers (2015)
13
•
ONLINE QUOTES GENERATED:
2 million
•PARTS MACHINED:
40,000
each month
•
COMPUTING POWER:
1 trillion
floating point operations per second
>
Speed to Market
Automating front-end
of injection molding
can save up to
12 weeks
12
WEEKS
>
Growth Story
•
Revenue up 26% to $264 million
•
Diluted EPS up $.23 to $1.97
•
Gross margin: 58.6%
•
Operating profit: 25.4%
17
GROWTH
2015 FINANCIAL
DATA
TECHNOLOGY
LEADERSHIP
TEAM
•
Diverse, growing customer base
•
Compound annual growth rate of 28% since 2012
•
Proprietary technology creates high barrier to entry
•
Strong organic growth with large total addressable market
•
New executive team focused on continued growth
ADDRESSABLE
MARKET
RECORD
Expand Customer Base
•
Acquire new customers
•Increase sales within
existing customers
•Expand geographically
Broaden Part Envelope
•Larger sizes
•
Increased complexity
•New materials
Significant opportunity to capitalize on the current Total
Addressable Market - estimated at $7 to $8 billion
>
Growth Strategies
Launch New
Manufacturing
Processes
1
2
3
18>>
This is a key metric in measuring the growth of our business as it captures both new
customers and growth in existing accounts.
>
Digital Differentiation
>> ProtoFlow Analysis >> ProtoQuote
>> Process Planning,
Control & Monitoring
>> Automated Toolpath
Generation
>> Manufacturability Analysis
Proprietary CAD Applications Proprietary Manufacturing Applications Proprietary Quoting Applications Web-enabled Sales & Support
System Proprietary CAM Applications Online Marketing Resources
CAD analysis
+
Design feedback
+
Ordering
+
Production
Custom parts as
fast as same day
•
Titanium (machined)
•Nylon (3D printing)
•
Turning
•
5-axis milling
>
Research & Development Investment
New
Materials
New
Capabilities
•
LSR molding
•Overmolding
•
3D printing
New
Processes
New
Services
25
•
eCommerce platform
•CAD analysis
•
Manufacturing software
Large-scale manufacturing
operations are focused on
high-volumes, low-margins.
In-house or machine shop
operations are labor
intensive and focused
on complex parts.
SPEED
COST
QUALITY
SCALE
ACCESSIBILITY RANGE OF SERVICES
Small
Shops
Production
Facilities
✓
✓
✓
✓
✓
✓
✓
✓
✓
>>
Proto Labs is a highly scalable company optimized for low-volumes and high-margins.
SMALL SHOPS
PRODUCTION FACILITIES
>
Steady Growth
28
$50.0 $100.0 $150.0 $200.0 $250.0 $300.0
2010 2011 2012 2013 2014 2015
Annual Revenue
(in $ millions)Adjusted Net Income*
(in $ 000’s)>
Consistent Profitability
* Net income plus after-tax stock based compensation and intangible asset amortization.
>
Long Term Financial Model
30
Non
‐
GAAP
Adjustments
Revenue
Growth
20
‐
25%
20
‐
25%
GAAP
Operating
Income
26–29%
200
to
250
basis
points
28
‐
30%
Gross
Margin
58–62%
‐
58–62%
Marketing
&
Sales
13–15%
50
bp
12.5–14.5%
Research
&
Development
6–8%
50
bp
5.5–7.5%
General
&
Administrative
9–10%
100
to
150
basis
points
8–9%
Long
Term
Target
‐
GAAP
Long
Term
Target
‐
>
Cash Generation
31 $10,000 $20,000 $30,000 $40,000 $50,000 $60,0002011 2012 2013 2014 2015
Operating Cash Flow
In $ 000’s
Equipment Investment
Facility Investments
Free Cash Flow
Investments in equipment and facilities predominantly support future
growth
Annual operating cash flow is sufficient to fund growth capital and increase
cash position
>
Strong Balance Sheet
32
