prlb20140331_10q.htm

 



 

UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________

 

FORM 10-Q/A

(Amendment No 1)

(Mark One)

 

 

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

or

 

 

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

 

Commission File Number: 001-35435

 

 

Proto Labs, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Minnesota

 

41-1939628

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

 

 

 

5540 Pioneer Creek Drive

 

 

Maple Plain, Minnesota

 

55359

(Address of principal executive offices)

 

(Zip Code)

 

(763) 479-3680

(Registrant’s telephone number, including area code)

 

                   Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

____________________________________________

 

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                ☑Yes    ☐No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).                      ☑Yes    ☐No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

 Large accelerated filer     ☑ 

 

Accelerated filer     ☐

Non-accelerated filer     ☐

 

(Do not check if a smaller reporting company)

 

Smaller reporting company     ☐

  

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐Yes    ☑No

 

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 25,611,140 shares of Common Stock, par value $0.001 per share, were outstanding at April 30, 2014.



 

 

 
 

 

 

Explanatory Note

 

Proto Labs, Inc. (the “Company”) is filing this amendment to its Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 (the “Original Form 10-Q”), filed with the U.S. Securities and Exchange Commission on May 6, 2014, to correct an error on the cover page. The cover page of the Original Form 10-Q inadvertently omitted the number of shares of the Company’s Common Stock outstanding as of April 30, 2014. The cover page of this Form 10-Q/A includes the number of shares of the Company’s Common Stock outstanding as of April 30, 2014. This Form 10-Q/A amends and restates in its entirety the Original Form 10-Q, but, except as specifically noted above, contains the same disclosure as is in the Original Form 10-Q.

 

 
 

 

 

 

Proto Labs, Inc.

TABLE OF CONTENTS

 

 

Item

 

Description

 

Page 

         

 

 

PART I 

 

 

1. 

 

Financial Statements 

 

2. 

 

Management's Discussion and Analysis of Financial Condition and Results of Operations 

 

13

3. 

 

Quantitative and Qualitative Disclosures About Market Risk 

 

19

4. 

 

Controls and Procedures 

 

20

 

 

PART II 

 

 

1. 

 

Legal Proceedings 

 

21

1A. 

 

Risk Factors 

 

21

6. 

 

Exhibits 

 

21

 

 

 

 

 

 

 

 
2

 

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

 

Proto Labs, Inc.

Consolidated Balance Sheets

(In thousands, except share and per share amounts)


             
   

March 31,

2014

   

December 31,

2013

 
   

(Unaudited)

         
Assets                
Current assets                

Cash and cash equivalents

  $ 44,201     $ 43,039  

Short-term marketable securities

    34,360       36,339  

Accounts receivable, net of allowance for doubtful accounts of $98 and $90 as of March 31, 2014 and December 31, 2013, respectively

    21,905       18,320  

Inventory

    5,346       5,166  

Prepaid expenses and other current assets

    4,406       3,569  

Income taxes receivable

    -       2,907  

Deferred tax assets

    456       455  
Total current assets     110,674       109,795  
Property and equipment, net     63,963       56,101  
Long-term marketable securities     71,315       64,023  
Other long-term assets     249       256  
Total assets   $ 246,201     $ 230,175  
                 
Liabilities and shareholders' equity                
Current liabilities                

Accounts payable

  $ 10,405     $ 6,455  

Accrued compensation

    4,779       6,196  

Accrued liabilities and other

    1,304       808  

Income taxes payable

    145       -  

Current portion of long-term debt obligations

    208       204  
Total current liabilities     16,841       13,663  
Long-term deferred tax liabilities     3,779       3,682  
Long-term debt obligations     106       159  
Other long-term liabilities     999       1,028  
Total liabilities     21,725       18,532  
                 
Shareholders' equity                

Preferred stock, $0.001 par value, authorized 10,000,000 shares; issued and outstanding 0 shares as of each of March 31, 2014 and December 31, 2013

    -       -  

Common stock, $0.001 par value, authorized 150,000,000 shares; issued and outstanding 25,606,090 and 25,546,107 shares as of March 31, 2014 and December 31, 2013, respectively

    26       26  

Additional paid-in capital

    169,420       166,861  

Retained earnings

    55,949       45,847  

Accumulated other comprehensive income (loss)

    (919 )     (1,091 )
Total shareholders' equity     224,476       211,643  
Total liabilities and shareholders' equity   $ 246,201     $ 230,175  

 


 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 
3

 

 

 

Proto Labs, Inc.

Consolidated Statements of Comprehensive Income

(In thousands, except share and per share amounts)

(Unaudited)


 

 

   

Three Months Ended

March 31,

 
   

2014

   

2013

 
                 

Statements of Operations:

               

Revenue

  $ 46,074     $ 37,313  

Cost of revenue

    17,050       14,034  

Gross profit

    29,024       23,279  

Operating expenses

               
Marketing and sales     6,417       5,263  
Research and development     3,456       2,628  
General and administrative     4,703       3,994  
Total operating expenses     14,576       11,885  

Income from operations

    14,448       11,394  

Other income, net

    103       3  

Income before income taxes

    14,551       11,397  

Provision for income taxes

    4,449       3,110  

Net income

  $ 10,102     $ 8,287  
                 

Net income per share:

               
Basic   $ 0.40     $ 0.33  
Diluted   $ 0.39     $ 0.32  
                 

Shares used to compute net income per share:

               
Basic     25,573,851       25,014,907  
Diluted     26,091,069       25,645,744  
                 

Comprehensive Income (net of tax)

               

Comprehensive income

  $ 10,274     $ 7,380  

 


 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 
4

 

 

 

Proto Labs, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


 

   

Three Months Ended

March 31,

 
   

2014

   

2013

 
                 
Operating activities                

Net income

  $ 10,102     $ 8,287  
Adjustments to reconcile net income to net cash provided by operating activities:                
Depreciation and amortization     2,106       1,734  
Stock-based compensation expense     998       865  
Deferred taxes     107       148  
Excess tax benefit from stock-based compensation     (897 )     (4,067 )
Amortization of held-to-maturity securities     482       304  
Changes in operating assets and liabilities:                
Accounts receivable     (3,554 )     (1,929 )
Inventories     (166 )     (183 )
Prepaid expenses and other     (828 )     393  
Income taxes     3,951       2,719  
Accounts payable     3,929       1,115  
Accrued liabilities and other     (964 )     1,759  

Net cash provided by operating activities

    15,266       11,145  
                 
Investing activities                

Purchases of property and equipment

    (9,892 )     (2,548 )

Purchases of marketable securities

    (32,385 )     (41,088 )

Proceeds from maturities of marketable securities

    26,590       18,313  

Net cash used in investing activities

    (15,687 )     (25,323 )
                 
Financing activities                

Payments on debt

    (50 )     (92 )

Proceeds from exercises of stock options and other

    665       1,619  

Excess tax benefit from stock-based compensation

    897       4,067  

Net cash provided by financing activities

    1,512       5,594  
Effect of exchange rate changes on cash and cash equivalents     71       (246 )
Net increase (decrease) in cash and cash equivalents     1,162       (8,830 )
Cash and cash equivalents, beginning of period     43,039       36,759  
Cash and cash equivalents, end of period   $ 44,201     $ 27,929  

 


 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 
5

 

 

 

Proto Labs, Inc. 

Notes to Consolidated Financial Statements

(Unaudited)

 

 

Note 1 – Basis of Presentation

 

The unaudited interim Consolidated Financial Statements of Proto Labs, Inc. (Proto Labs, the Company, we, us or our) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. These statements are unaudited but, in the opinion of management, reflect all adjustments necessary for a fair presentation of the Company’s statement of financial position, results of operations and cash flows for the periods presented. Except as otherwise disclosed herein, these adjustments consist of normal, recurring items. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole.

 

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. For further information, refer to the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 as filed with the Securities and Exchange Commission (SEC) on February 28, 2014.

 

The accompanying Consolidated Balance Sheet as of December 31, 2013 was derived from the audited Consolidated Financial Statements but does not include all disclosures required by U.S. GAAP for a full set of financial statements. This Form 10-Q should be read in conjunction with the Company’s Consolidated Financial Statements and Notes included in the Annual Report on Form 10-K filed on February 28, 2014 as referenced above.

 

Note 2 – Net Income per Common Share

 

Basic net income per share is computed based on the weighted-average number of common shares outstanding. Diluted net income per share is computed based on the weighted-average number of common shares outstanding, increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued and reduced by the number of shares the Company could have repurchased from the proceeds from issuance of the potentially dilutive shares. Potentially dilutive shares of common stock include stock options, restricted stock units and restricted stock awards granted under stock-based compensation plans and shares committed to be purchased under the employee stock purchase plan.

 

The table below sets forth the computation of basic and diluted net income per share:

 


 

   

Three Months Ended

March 31,

 

(in thousands, except share and per share amounts)

 

2014

   

2013

 
                 

Net income

  $ 10,102     $ 8,287  
                 

Basic - weighted-average shares outstanding:

    25,573,851       25,014,907  

Effect of dilutive securities:

               
Employee stock options and other     517,218       630,837  

Diluted - weighted-average shares outstanding:

    26,091,069       25,645,744  

Net income per share:

               
Basic   $ 0.40     $ 0.33  
Diluted   $ 0.39     $ 0.32  

 


 

 

 
6

 

 

 

Proto Labs, Inc. 

Notes to Consolidated Financial Statements

(Unaudited)

 

 

Note 3 – Fair Value Measurements

 

Accounting Standards Codification (ASC) 820, Fair Value Measurement (ASC 820), defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

 

Level 1—Quoted prices in active markets for identical assets or liabilities.

 

Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

The Company’s cash consists of bank deposits. The Company’s cash equivalents measured at fair value consist of money market mutual funds. The Company determines the fair value of these investments using Level 1 inputs.

 

A summary of financial assets as of March 31, 2014 and December 31, 2013 measured at fair value on a recurring basis follows:

 


 

   

March 31, 2014

   

December 31, 2013

 

(in thousands)

 

Level 1

   

Level 2

   

Level 3

   

Level 1

   

Level 2

   

Level 3

 
                                                 

Financial Assets:

                                               

Cash and cash equivalents

                                               
Money market mutual fund   $ 14,339     $ -     $ -     $ 5,524     $ -     $ -  
Total   $ 14,339     $ -     $ -     $ 5,524     $ -     $ -  

 


 

Note 4 – Marketable Securities

 

The Company invests in short-term and long-term agency, municipal, corporate, commercial paper and other debt securities. The securities are categorized as held-to-maturity and are recorded at amortized cost. Categorization as held-to-maturity is based on the Company’s ability and intent to hold these securities to maturity. Information regarding the Company’s short-term and long-term marketable securities as of March 31, 2014 and December 31, 2013 is as follows:

 


 

    March 31, 2014  

(in thousands)

 

Amortized

Cost

   

Unrealized

Gains

   

Unrealized

Losses

   

Fair Value

 
                                 

U.S. government agency securities

  $ 24,476     $ 1     $ (63 )   $ 24,414  

Corporate debt securities

    37,314       30       (76 )     37,268  

Commercial paper

    1,996       -       (15 )     1,981  

U.S. municipal securities

    36,949       60       (10 )     36,999  

Certificates of deposit/time deposits

    4,940       8       (2 )     4,946  

Total marketable securities

  $ 105,675     $ 99     $ (166 )   $ 105,608  

 


 

 

 
7

 

 

 

Proto Labs, Inc. 

Notes to Consolidated Financial Statements

(Unaudited) 

 


 

    December 31, 2013  

(in thousands)

 

Amortized

Cost

   

Unrealized

Gains

   

Unrealized

Losses

   

Fair Value

 
                                 

U.S. government agency securities

  $ 21,713     $ 2     $ (22 )   $ 21,693  

Corporate debt securities

    29,480       30       (20 )     29,490  

U.S. municipal securities

    44,474       49       (22 )     44,501  

Certificates of deposit/time deposits

    4,695       5       (8 )     4,692  

Total marketable securities

  $ 100,362     $ 86     $ (72 )   $ 100,376  

 


 

Fair values for the corporate debt securities are primarily determined based on quoted market prices (Level 1).  Fair values for the U.S. municipal securities, U.S. government agency securities, certificates of deposit and commercial paper are primarily determined using dealer quotes or quoted market prices for similar securities (Level 2).

 

The Company tests for other than temporary losses on a quarterly basis and has considered the unrealized losses indicated above to be temporary in nature. The Company intends to hold the investments to maturity and recover the full principal.

 

Classification of marketable securities as current or non-current is based upon the security’s maturity date as of the date of these financial statements.

 

The March 31, 2014 balance of held-to-maturity debt securities by contractual maturity is shown in the following table at amortized cost. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.

 


 

(in thousands)

 

March 31,

2014

 
         

Due in one year or less

  $ 34,360  

Due after one year through five years

    71,315  
         

Total marketable securities

  $ 105,675  

 


 

 

Note 5 – Inventory

 

Inventory consists primarily of raw materials, which are recorded at the lower of cost or market using the average-cost method, which approximates first-in, first-out (FIFO) cost. The Company periodically reviews its inventory for slow-moving, damaged and discontinued items and provides allowances to reduce such items identified to their recoverable amounts.

 

 

 
8

 

 

 

Proto Labs, Inc. 

Notes to Consolidated Financial Statements

(Unaudited)

 

 

The Company’s inventory consists of the following:

 


 

(in thousands)

 

March 31,

2014

   

December 31,

2013

 
                 

Raw materials

  $ 4,996     $ 4,875  

Work in process

    535       410  

Total inventory

    5,531       5,285  

Allowance for obsolescence

    (185 )     (119 )
                 

Inventory, net of allowance

  $ 5,346     $ 5,166  

 


 

 

Note 6 – Stock-Based Compensation

 

Under the 2012 Long-Term Incentive Plan (2012 Plan), the Company has the ability to grant stock options, stock appreciation rights (SARs), restricted stock, stock units, other stock-based awards and cash incentive awards. Awards under the 2012 Plan will have a maximum term of ten years from the date of grant. The compensation committee may provide that the vesting or payment of any award will be subject to the attainment of specified performance measures in addition to the satisfaction of any continued service requirements and the compensation committee will determine whether such measures have been achieved. The per share exercise price of stock options and SARs granted under the 2012 Plan generally may not be less than the fair market value of a share of our common stock on the date of the grant. 

 

Employee Stock Purchase Plan

 

The Company’s 2012 Employee Stock Purchase Plan (ESPP), allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15 percent of their eligible compensation, subject to plan limitations. The ESPP provides for six-month offering periods ending May 15 and November 15, respectively. At the end of each offering period, employees are able to purchase shares at 85 percent of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the last trading day of the offering period.

 

Stock-Based Compensation Expense

 

Stock-based compensation expense was $1.0 million and $0.9 million for the three months ended March 31, 2014 and 2013, respectively.

 

Stock Options

 

A summary of stock option activity for the three months ended March 31, 2014 is as follows:

 


 

   

Stock Options

   

Weighted-

Average

Exercise Price

 
                 

Options outstanding at December 31, 2013

    1,143,250     $ 19.03  

Granted

    69,350       78.59  

Exercised

    (47,255 )     14.06  

Forfeited

    (804 )     30.58  

Options outstanding at March 31, 2014

    1,164,541     $ 22.77  
                 

Exercisable at March 31, 2014

    434,412     $ 10.99  

 


 

 

 
9

 

 

 

Proto Labs, Inc. 

Notes to Consolidated Financial Statements

(Unaudited)

 

 

The outstanding options generally have a term of ten years. For employees, options granted become exercisable ratably over the vesting period, which is generally a five-year period beginning on the first anniversary of the grant date, subject to the employee’s continuing service to the Company. For directors, options generally become exercisable in full on the first anniversary of the grant date.

 

The weighted-average grant date fair value of options that were granted during the three months ended March 31, 2014 was $39.85.

 

The following table provides the assumptions used in the Black-Scholes pricing model valuation of options during the three months ended March 31, 2014 and 2013, respectively:

 


 

   

Three Months Ended March 31,

 
   

2014

   

2013

 
                 

Risk-free interest rate

    2.14 %     1.27 %

Expected life (years)

    6.50       6.50  

Expected volatility

    49.30 %     53.54 %

Expected dividend yield

    0 %     0 %

 


 

As of March 31, 2014, there was $9.0 million of unrecognized compensation expense related to unvested stock options, which is expected to be recognized over a weighted-average period of 3.8 years.

 

Restricted Stock

 

Restricted stock are non-vested stock that include grants of restricted stock awards (RSA) and grants of restricted stock units (RSU). During the three months ended March 31, 2014, the Company granted both RSA and RSU.

 

Non-vested restricted stock as of March 31, 2014 and changes during the three months ended March 31, 2014 were as follows:

 


 

   

Stock Options

   

Weighted-

Average

Grant Date

Fair Value

Per Share

 
                 

Restricted stock outstanding at December 31, 2013

    -     $ -  

Granted

    31,693       78.59  

Vested

    -       -  

Forfeited

    -       -  

Restricted stock outstanding at March 31, 2014

    31,693     $ 78.59  

 


 

As of March 31, 2014, there was $2.4 million of unrecognized compensation expense related to non-vested restricted stock, which is expected to be recognized over a weighted-average period of 4.5 years.

 

 

 
10

 

 

 

Proto Labs, Inc. 

Notes to Consolidated Financial Statements

(Unaudited)

 

 

Employee Stock Purchase Plan

 

The following table presents the assumptions used to estimate the fair value of the ESPP during the three months ended March 31, 2014 and 2013, respectively:

 


 

   

Three Months Ended March 31,

 
   

2014

   

2013

 
                 

Risk-free interest rate

    0.11 %     0.13 %

Expected life (months)

    6.00       6.00  

Expected volatility

    39.80 %     53.14 %

Expected dividend yield

    0 %     0 %

 


 

Note 7 – Accumulated Other Comprehensive Income

 

Other comprehensive income (loss) is comprised entirely of foreign currency translation adjustments. The following table presents the changes in accumulated other comprehensive income balances during the three months ended March 31, 2014 and 2013, respectively:

 


 

   

Three Months Ended

March 31,

 
(in thousands)  

2014

   

2013

 
                 
Foreign currency translation adjustment, net of tax                

Balance at beginning of period

  $ (1,091 )   $ (928 )

Other comprehensive income before reclassifications

    172       (907 )

Amounts reclassified from accumulated other comprehensive income

    -       -  

Net current-period other comprehensive income

    172       (907 )

Balance at end of period

  $ (919 )   $ (1,835 )

 


 

Note 8 – Income Taxes

 

The Company is subject to income tax in multiple jurisdictions and the use of estimates is required to determine the provision for income taxes. For the three months ended March 31, 2014 and 2013 the Company recorded an income tax provision of $4.4 million and $3.1 million, respectively. The income tax provision is based on the estimated annual effective tax rate for the year applied to pre-tax income. The effective income tax rate for the three months ended March 31, 2014 was 30.6 percent compared with 27.3 percent in the same period of the prior year.

 

The effective income tax rate for the three months ended March 31, 2014 differs from the U.S. federal statutory rate of 35 percent due primarily to the mix of revenue earned in domestic and foreign tax jurisdictions and deductions for which the Company qualifies.

 

On January 2, 2013, the American Taxpayer Relief Act of 2012 (the Act) was signed into law. Included in the Act was the extension of the research and development credit for years 2012 and 2013. As the Act was enacted during 2013, the federal portion of the 2012 research and development credit was recognized in the first quarter of 2013. As a result, during the three months ended March 31, 2013, the Company recorded a tax benefit of $0.3 million, which translated to an effective income tax rate reduction of 3.0 percent related to the federal research and development credit for 2012. Absent the impact of the Act, the effective income tax rates would have been similar for the three month periods ended March 31, 2014 and 2013, respectively.

 

The Company has liabilities related to unrecognized tax benefits totaling $0.7 million at March 31, 2014 and December 31, 2013. There were no material adjustments to the unrecorded tax benefits during the three months ended March 31, 2014, and the Company does not anticipate that total unrecognized tax benefits will materially change in the next twelve months. The Company recognizes interest and penalties related to income tax matters in income tax expense, and reports the liability in current or long-term income taxes payable as appropriate.

 

 

 
11

 

 

 

Proto Labs, Inc. 

Notes to Consolidated Financial Statements

(Unaudited)

 

 

Note 9 – Revenue and Geographic Information

 

The Company’s revenue is derived from its Protomold injection molding and Firstcut computer numerical control (CNC) machining product lines. Total revenue by product line is as follows:

 


 

   

Three Months Ended March 31,

 
(in thousands)  

2014

   

2013

 
                 
Revenue:                

Protomold

  $ 32,694     $ 26,880  

Firstcut

    13,380       10,433  

Total revenue

  $ 46,074     $ 37,313  

 


 

Revenue to external customers based on the billing location of the end user customer and long-lived assets by geographic region are as follows:

 


 

   

Three Months Ended March 31,

 
(in thousands)  

2014

   

2013

 
                 
Revenue:                

United States

  $ 33,022     $ 28,148  

International

    13,052       9,165  

Total revenue

  $ 46,074     $ 37,313  

 


 


 

(in thousands)  

March 31,

2014

   

December 31,

2013

 
                 
Long-lived assets:                

United States

  $ 55,897     $ 48,381  

International

    8,066       7,720  

Total long-lived assets

  $ 63,963     $ 56,101  

 


 

Note 10 – Subsequent Events

 

In April 2014, the Company acquired 100 percent of the shares of FineLine Prototyping, Inc., a leading provider of additive manufacturing services. Total consideration paid for this acquisition was $37 million, $34 million of which was paid in cash at the time of closing and up to an additional $3 million in cash based on the achievement of certain milestones related to the integration of FineLine’s and the Company’s businesses. The acquisition is not significant to the Company’s operating results.

 

 

 
12

 

 

 

 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2013.

 

Forward-Looking Statements

 

Statements contained in this report 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. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve known and unknown risks, uncertainties and other factors which may cause our results to be materially different than those expressed or implied in such statements. Certain of these risk factors and others are described in Item 1A. “Risk Factors” of our Annual Report on Form 10-K as filed with the SEC. Other unknown or unpredictable factors also could have material adverse effects on our future results. We cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, we expressly disclaim any intent or obligation to update any forward-looking statements to reflect subsequent events or circumstances.

 

Overview

 

We are a leading online and technology-enabled manufacturer of quick-turn CNC-machined and injection-molded custom parts for prototyping and short-run production. We provide “Real Parts, Really Fast” to product developers worldwide, who are under increasing pressure to bring their finished products to market faster than their competition. We believe low-volume manufacturing has historically been an underserved market due to the inefficiencies inherent in the quotation, equipment set-up and non-recurring engineering processes required to produce custom parts. Our proprietary technology eliminates most of the time-consuming and expensive skilled labor conventionally required to quote and manufacture parts in low volumes, and our customers conduct nearly all of their business with us over the Internet. We target our services to the millions of product developers who use three-dimensional computer-aided design (3D CAD) software to design products across a diverse range of end-markets. Our primary manufacturing services currently include Firstcut, which is our CNC machining service, and Protomold, which is our injection molding service.

 

Key Financial Measures and Trends

 

Revenue

 

The Company’s operations are comprised of three geographic business units in the United States, Europe and Japan. Revenue within each of our business units is derived from our Firstcut and Protomold services. Firstcut revenue consists of sales of CNC-machined custom parts. Protomold revenue consists of sales of custom injection molds and injection-molded parts. Our historical and current efforts to increase revenue have been directed at gaining new customers and selling to our existing customer base by increasing marketing and selling activities, offering additional services such as the introduction of our Firstcut service in 2007, expanding internationally such as the opening of our Japanese plant in 2009, improving the usability of our services such as our web-centric applications, and expanding the breadth and scope of our products such as by adding more sizes and materials to our offerings. During the three months ended March 31, 2014, we served approximately 7,700 unique product developers, an increase of 18% over the same period in 2013.

 

Cost of Revenue, Gross Profit and Gross Margin

 

Cost of revenue consists primarily of raw materials, equipment depreciation, employee salaries, benefits, stock-based compensation, bonuses and overhead allocations associated with the manufacturing process for molds and custom parts. We expect cost of revenue to increase in absolute dollars, but remain relatively constant as a percentage of total revenue.

 

We define gross profit as our revenue less our cost of revenue, and we define gross margin as gross profit expressed as a percentage of revenue. Our gross profit and gross margin are affected by many factors, including pricing, sales volume and manufacturing costs, the costs associated with increasing production capacity, the mix between domestic and foreign revenue sources and foreign exchange rates.

 

 

 
13

 

 

 

Operating Expenses

 

Operating expenses consist of marketing and sales, research and development and general and administrative. Personnel-related costs are the most significant component of the marketing and sales, research and development and general and administrative expense categories.

 

Our recent growth in operating expenses is mainly due to higher headcounts to support our growth and expansion, and we expect that trend to continue. Our business strategy is to continue to be a leading online and technology-enabled manufacturer of quick-turn CNC machined and injection-molded custom parts for prototyping and short-run production. For us to achieve our goals, we anticipate continued substantial investments in technology and personnel, resulting in increased operating expenses.

 

Marketing and sales. Marketing and sales expense consists primarily of employee compensation, benefits, commissions, stock-based compensation, marketing programs such as print and pay-per-click advertising, trade shows, direct mail and other related overhead. We expect sales and marketing expense to increase in the future as we increase the number of marketing and sales professionals and marketing programs targeted to increase our customer base.

 

Research and development. Research and development expense consists primarily of employee compensation, benefits, stock-based compensation, depreciation on equipment, outside services and other related overhead. All of our research and development costs have been expensed as incurred. We expect research and development expense to increase in the future as we seek to enhance and expand our service offerings.

 

General and administrative. General and administrative expense consists primarily of employee compensation, benefits, stock-based compensation, professional service fees related to accounting, tax and legal services and other related overhead. We expect general and administrative expense to increase on an absolute basis as we continue to grow and expand our operations.

 

Other Income (Expense), Net

 

Other income (expense), net primarily consists of foreign currency-related gains and losses, interest income on cash balances and investments, and interest expense on borrowings. Our foreign currency-related gains and losses will vary depending upon movements in underlying exchange rates. Our interest income will vary each reporting period depending on our average cash balances during the period, composition of our marketable security portfolio and the current level of interest rates. Our interest expense will vary based on borrowings and interest rates.

 

Provision for Income Taxes

 

Provision for income taxes is comprised of federal, state, local and foreign taxes based on pre-tax income. We expect income taxes to increase as our taxable income increases and our effective tax rate to remain relatively constant.

 

 

 
14

 

 

 

Results of Operations

 

The following table sets forth a summary of our results of operations and the related changes for the periods indicated. The results below are not necessarily indicative of the results for future periods.


   

Three Months Ended March 31,

   

Change

 

(dollars in thousands)

 

2014

   

2013

      $       %  
                                                 

Revenue

  $ 46,074       100.0 %   $ 37,313       100.0 %   $ 8,761       23.5 %

Cost of revenue

    17,050       37.0       14,034       37.6       3,016       21.5  

Gross profit

    29,024       63.0       23,279       62.4       5,745       24.7  

Operating expenses:

                                               
Marketing and sales     6,417       13.9       5,263       14.2       1,154       21.9  
Research and development     3,456       7.5       2,628       7.0       828       31.5  
General and administrative     4,703       10.2       3,994       10.7       709       17.8  
Total operating expenses     14,576       31.6       11,885       31.9       2,691       22.6  

Income from operations

    14,448       31.4       11,394       30.5       3,054       26.8  

Other income, net

    103       0.2       3       -       100       *  

Income before income taxes

    14,551       31.6       11,397       30.5       3,154       27.7  

Provision for income taxes

    4,449       9.7       3,110       8.3       1,339       43.1  

Net income

  $ 10,102       21.9 %   $ 8,287       22.2 %   $ 1,815       21.9 %

 


* Percentage change not meaningful

 

Stock-based compensation expense included in the statements of operations data above is as follows:

 


 

   

Three Months Ended March 31,

 

(dollars in thousands)

 

2014

   

2013

 
                 

Stock options and restricted stock

  $ 912     $ 776  

Employee stock purchase plan

    86       89  

Total stock-based compensation expense

  $ 998     $ 865  
                 

Cost of revenue

  $ 82     $ 71  

Operating expenses:

               
Marketing and sales     195       150  
Research and development     215       173  
General and administrative     506       471  

Total stock-based compensation expense

  $ 998     $ 865  

 


 

 

 
15

 

 

 

Comparison of Three Months Ended March 31, 2014 and 2013

 

Revenue

 

The Company’s revenue is derived from its Protomold injection molding and Firstcut computer numerical control (CNC) services. Total revenue by service and the related changes for the three months ended March 31, 2014 and 2013 were as follows:

 


 

 

   

Three Months Ended March 31,

                 
   

2014

   

2013

   

Change

 

(dollars in thousands)

     $    

% of Total

Revenue

       $    

% of Total

Revenue

         

%

 
                                                 

Revenue

                                               
Protomold   $ 32,694       71.0 %   $ 26,880       72.0 %   $ 5,814       21.6 %
Firstcut     13,380       29.0       10,433       28.0       2,947       28.2  
                                                 

Total revenue

  $ 46,074       100.0 %   $ 37,313       100.0 %   $ 8,761       23.5 %

 


Revenue by geographic region, based on the billing location of the end customer, is summarized as follows:


 

 

   

Three Months Ended March 31,

                 
   

2014

   

2013

   

Change

 

(dollars in thousands)

       

% of Total

Revenue

       $    

% of Total

Revenue

       $    

%

 
                                                 

Revenue

                                               
United States   $ 33,022       71.7 %   $ 28,148       75.4 %   $ 4,874       17.3 %
International     13,052       28.3       9,165       24.6       3,887       42.4  
                                                 

Total revenue

  $ 46,074       100.0 %   $ 37,313       100.0 %   $ 8,761       23.5 %

 


 

Our revenue increased $8.8 million, or 23.5%, for the three months ended March 31, 2014 compared with the same period in 2013. This revenue growth was driven by a 17.3% increase in United States revenue, 42.4% increase in international revenue, 21.6% increase in Protomold revenue and 28.2% increase in Firstcut revenue, in each case for the three months ended March 31, 2014 compared with the same period in 2013.

 

Our revenue growth in the three months ended March 31, 2014 was the result of increased volume and spending of the product developers we served. During the three months ended March 31, 2014, we served approximately 7,700 unique product developers, an increase of 18% over the same period in 2013. Average revenue per product developer also increased 4% during the three months ended March 31, 2014 compared to the same period in 2013.

 

Our revenue increases were primarily driven by increases in sales personnel and marketing activities. Our sales personnel focus on gaining new customer accounts and expanding the depth and breadth into existing customer accounts. Our marketing personnel focus on trade show and marketing activities that have proven to result in the greatest number of customer leads to support sales activity. International revenue was favorably impacted by $0.4 million in the three months ended March 31, 2014 compared to the same period in 2013 due to the strengthening of foreign currencies relative to the United States dollar. The effect of pricing changes on revenue was immaterial for the three months ended March 31, 2014 compared to the same period in 2013.

 

Cost of Revenue, Gross Profit and Gross Margin

 

Cost of Revenue. Cost of revenue increased $3.0 million, or 21.5%, for the three months ended March 31, 2014 compared to the same period in 2013, which was slightly slower than the rate of revenue increase of 23.5% for the three months ended March 31, 2014 compared to the same period in 2013. The increase in cost of revenue was due to raw material and production cost increases of $0.6 million to support increased sales volumes, equipment and facility-related cost increases of $0.6 million and an increase in direct labor headcount resulting in personnel and related cost increases of $1.8 million.

 

Gross Profit and Gross Margin. Gross profit increased to $29.0 million, or 63.0% of revenues, for the three months ended March 31, 2014 from $23.3 million, or 62.4% of revenues, for the three months ended March 31, 2013 due to increases in revenue offset by the cost of revenue as discussed above. Gross margin increased primarily as a result of efficiencies gained through higher equipment utilization and continually refined manufacturing processes.

 

 

 
16

 

 

 

Operating Expenses, Other Income, Net and Provision for Income Taxes

 

Marketing and Sales. Marketing and sales expense increased $1.2 million, or 21.9%, for the three months ended March 31, 2014 compared to the same period in 2013 due primarily to an increase in headcount resulting in personnel and related cost increases of $0.9 million and marketing program cost increases of $0.3 million. The increase in marketing program costs is the result of our focus and concentration on funding those programs which have proven to be the most effective in growing our business.

 

Research and Development. Our research and development expense increased $0.8 million, or 31.5%, for the three months ended March 31, 2014 compared to the same period in 2013 due to an increase in headcount resulting in personnel and related cost increases of $0.6 million and operating cost increases of $0.2 million.

 

General and Administrative. Our general and administrative expense increased $0.7 million, or 17.8%, for the three months ended March 31, 2014 compared to the same period in 2013 due to an increase in headcount resulting in personnel and related cost increases of $0.1 million, administrative cost increases of $0.2 million and professional service cost increases of $0.4 million. The increase in professional service costs is primarily attributable to compliance efforts in response to our first internal control audit under the requirements of Section 404 of the Sarbanes Oxley Act of 2002.

 

Other Income, Net. Other income, net increased $0.1 million for the three months ended March 31, 2014 compared to the same period in 2013 due to changes in foreign currency rates.

 

Provision for Income Taxes. Our effective tax rate of 30.6% for the three months ended March 31, 2014 increased by 3.3% when compared to our effective tax rate of 27.3% for the same period in 2013. The increase in our effective tax rate is due primarily to the American Taxpayer Relief Act of 2012, which was enacted on January 2, 2013 and required that we recognize the federal portion of our 2012 research and development credit in the three months ended March 31, 2013. Refer to Footnote 8 for additional information. As a result of the change in effective tax rate as well as increased income attributable to the fluctuations described above, our income tax provision increased by $1.3 million to $4.4 million for the three months ended March 31, 2014 compared to our income tax provision of $3.1 million for the three months ended March 31, 2013.

 

Liquidity and Capital Resources

 

Cash Flows

 

The following table summarizes our cash flows for the three months ended March 31, 2014 and 2013:

 


 

   

Three Months Ended March 31,

 

(dollars in thousands)

 

2014

   

2013

 
                 

Net cash provided by operating activities

  $ 15,266     $ 11,145  

Net cash used in investing activities

    (15,687 )     (25,323 )

Net cash provided by financing activities

    1,512       5,594  

Effect of exchange rates on cash and cash equivalents

    71       (246 )

Net increase (decrease) in cash and cash equivalents

  $ 1,162     $ (8,830 )

 


 

Sources of Liquidity

 

Historically we have financed our operations and capital expenditures primarily through cash flow from operations and, to a lesser extent, lease financing and the use of bank loans. We had cash and cash equivalents of $44.2 million as of March 31, 2014, an increase of $1.2 million from December 31, 2013. The increase in our cash was primarily due to proceeds received from exercises of stock options.

 

 

 
17

 

 

 

Cash Flows from Operating Activities

 

Cash provided by operating activities was $15.3 million for the three months ended March 31, 2014. We had net income of $10.1 million, which included non-cash charges consisting of $2.1 million in depreciation, $1.0 million in stock-based compensation, $0.5 million in amortization of held-to-maturity securities and $0.1 million in deferred taxes, partially offset by $0.9 million of excess tax benefit on stock-based compensation. Other sources of cash in operating activities totaled $2.4 million, which included an increase in income taxes payable of $4.0 million and increase in accounts payable of $3.9 million, which were partially offset by an increase in accounts receivable of $3.5 million, decrease in accrued liabilities and other of $1.0 million, increase in prepaid expenses and other of $0.8 million and increase in inventory of $0.2 million. These operating cash increases in accounts receivable, accounts payable, inventories and other reflect increases in revenue and the growth of our business.

 

Cash provided by operating activities was $11.1 million for the three months ended March 31, 2013. We had net income of $8.3 million, which included noncash charges consisting of $1.7 million in depreciation, $0.9 million in stock-based compensation, $0.3 million in amortization of held-to-maturity securities and $0.1 million in deferred taxes, offset by $4.1 million of excess tax benefit on stock-based compensation. Other sources of cash in operating activities totaled $3.9 million, which included an increase in income taxes payable of $2.7 million, increase in accrued liabilities and other of $1.8 million, increase in accounts payable of $1.1 million and a decrease in prepaid expenses and other of $0.4 million, which were partially offset by an increase in accounts receivable of $1.9 million and increase in inventories of $0.2 million. These operating cash increases in accounts receivable, accounts payable, inventories and other reflect increases in revenue and the growth of our business.

 

Cash Flows from Investing Activities

 

Cash used in investing activities was $15.7 million for the three months ended March 31, 2014, consisting of $9.9 million for the purchase of property and equipment and $32.4 million for the purchase of marketable securities, which were partially offset by $26.6 million in proceeds from the maturities and call redemptions of marketable securities.

 

Cash used in investing activities was $25.3 million for the three months ended March 31, 2013, consisting of $2.5 million for the purchase of property and equipment and $41.1 million for the purchase of marketable securities, which were partially offset by $18.3 million in proceeds from the maturities and call redemptions of marketable securities.

 

Cash Flows from Financing Activities

 

Cash provided by financing activities was $1.5 million for the three months ended March 31, 2014, consisting of excess tax benefit on stock-based compensation of $0.9 million and $0.7 million in proceeds from exercises of stock options, which were partially offset by $0.1 million for payments of debt.

 

Cash provided by financing activities was $5.6 million for the three months ended March 31, 2013, consisting of excess tax benefit on stock-based compensation of $4.1 million and $1.6 million in proceeds from exercises of stock options, which were partially offset by $0.1 million for payments of debt.

 

Off-Balance Sheet Arrangements

 

Since our inception, we have not engaged in any off-balance sheet arrangements, including the use of structured finance, special purpose entities or variable interest entities.

 

Critical Accounting Policies and Use of Estimates

 

We have adopted various accounting policies to prepare the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Our significant accounting policies are disclosed in Note 2 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2013. There were no material changes in our significant accounting policies during the three months ended March 31, 2014.

 

Recent Accounting Pronouncements

 

There have been no accounting pronouncements issued or adopted in the period that apply to, or impact, the financial reporting of the Company.

 

 

 
18

 

 

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

Foreign Currency Risk

 

As a result of our foreign operations, we have revenue and expenses, assets and liabilities that are denominated in foreign currencies. A number of our employees are located in Europe and Japan. Therefore, a portion of our payrolls and operating expenses are paid and incurred in the British Pound, Euro and Yen. Our operating results and cash flows are adversely impacted when the U.S. dollar depreciates relative to other foreign currencies. We have not used any forward contracts or currency borrowings to hedge our exposure to foreign currency exchange risk. Foreign currency risk can be quantified by estimating the change in cash flows resulting from a hypothetical 10% adverse change in foreign exchange rates. We believe such a change would not have a material impact on our results of operations.

 

 

 
19

 

 

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (Exchange Act)) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this quarterly report, our disclosure controls and procedures are effective and provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported accurately and within the time frames specified in the SEC’s rules and forms and accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

 

 

 
20

 

 

 

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings

 

From time to time, we are subject to various legal proceedings and claims that arise in the ordinary course of our business activities. Although the results of litigation and claims cannot be predicted with certainty, as of the date of these financial statements, we do not believe we are party to any litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business. 

 

Item 1A. Risk Factors

 

The risk factor discussed below updates the risk factors we previously disclosed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2013.

 

Our acquisition of FineLine Prototyping, Inc. presents risks to our business and could harm our operating results and financial condition.

 

On April 23, 2014, we entered into a stock purchase agreement for the purchase of all of the outstanding shares of capital stock of FineLine Prototyping, Inc. At the closing, we paid cash consideration of $34 million to the sellers, which amount is subject to adjustment based on FineLine’s indebtedness and net working capital as of the closing date and FineLine’s expenses in connection with the transactions contemplated by the stock purchase agreement. The stock purchase agreement also provides that we will pay the sellers up to an additional $3 million if FineLine’s revenue for 2014 exceeds certain amounts and if certain milestones relating to the integration of FineLine’s and our businesses are achieved. FineLine provides additive manufacturing services. Our acquisition of FineLine subjects us to certain risks, including:

 

 

We have not previously provided additive manufacturing services and the complexity of our operations therefore has increased, and we may not be able to maintain or grow the newly acquired portion of our business as quickly or significantly as anticipated, or at all;

 

Integrating FineLine’s operations with our historic operations could divert management’s attention and cause our results of operations to suffer;

 

We may be unable to integrate successfully FineLine’s business and realize the anticipated benefits of the acquisition;

 

Our acquisition of FineLine includes significant goodwill, which could result in future impairment charges that would reduce our earnings;

 

Our acquisition of FineLine and the integration of its business may involve unexpected costs, unexpected liabilities or unexpected delays; and

 

Our acquisition of FineLine may harm relationships with FineLine’s customers, suppliers and employees.

 

Any failure to successfully address these challenges or risks could disrupt our business and harm our operating results and financial condition.

 

Item 6. Exhibits

 

The following documents are filed as part of this report:

 

 

 
21

 

 

 

Exhibit Number

 

Description of Exhibit

3.1(1)

 

Third Amended and Restated Articles of Incorporation of Proto Labs, Inc.

3.2(2)

 

Amended and Restated By-Laws of Proto Labs, Inc.

10.1(3)#

 

Executive Employment Agreement, dated February 6, 2014, by and between Proto Labs, Inc. and Victoria M. Holt

10.2(4)#

 

Form of Restricted Stock Agreement under 2012 Long-Term Incentive Plan for initial grant to Victoria M. Holt

10.3(5)#

 

Form of Restricted Stock Unit Agreement under 2012 Long-Term Incentive Plan (U.S. Employees)

10.4(6)#

 

Form of Restricted Stock Unit Agreement under 2012 Long-Term Incentive Plan (U.K. Employees)

31.1

 

Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act

31.2

 

Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act

32.1

 

Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act

101.INS

 

XBRL Instance Document

101.SCH

 

XBRL Taxonomy Extension Schema Document

101.CAL

 

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

 

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

 

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

 

XBRL Taxonomy Extension Presentation Linkbase Document

 

(1) 

Previously filed as Exhibit 3.2 to the Company’s Registration Statement on Form S-1/A (File No. 333-175745), filed with the Commission on February 13, 2012, and incorporated by reference herein.

(2) 

Previously filed as Exhibit 3.4 to the Company’s Registration Statement on Form S-1/A (File No. 333-175745), filed with the Commission on February 13, 2012, and incorporated by reference herein.

(3) 

Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-35435), filed with the Commission on February 6, 2014, and incorporated by reference herein.

(4) 

Previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-35435), filed with the Commission on February 6, 2014, and incorporated by reference herein.

(5) 

Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-35435), filed with the Commission on February 12, 2014, and incorporated by reference herein.

(6) 

Previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-35435), filed with the Commission on February 12, 2014, and incorporated by reference herein.

 

 

 
22

 

 

 

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 thereunto duly authorized.

 

 

 

 

 

        Proto Labs, Inc.

 

 

Date: May 6, 2014

 

/s/ Victoria M. Holt

 

 

 

Victoria M. Holt

 

 

 

President and Chief Executive Officer

(Principal Executive Officer)

 

       
Date: May 6, 2014   /s/ John R. Judd  
    John R. Judd  
   

Chief Financial Officer

(Principal Financial Officer)

 

 

 

 

 

 

 

 21