Reports of record quarterly revenue and profit have become the norm in recent years at Proto Labs Inc., an on-demand manufacturer that does virtually all of its sales through e-commerce. But some new developments could help spur its growth even more, executives said today while announcing new financial highs for the second quarter.
Proto Labs specializes in using 3D printing and other forms of computerized digital manufacturing to produce industrial parts that customers order through its e-commerce site, Protolabs.com. For the second quarter ended June 30, revenue grew 33.7% to a quarterly record $109.7 million, resulting in new profit high of $18.3 million.
The manufacturer is expecting continued robust growth, particularly as it expands its manufacturing services, integrates its sales operations with the Rapid Manufacturing unit it acquired late last year and participates as a new technology partner with GE Additive, a unit of General Electric Co. working with 3D printing and other forms of digital manufacturing.
Since Proto Labs’s founding in 1999, much of its business has been in producing product prototypes for technology developers and engineers, but now it is also shifting into producing more manufacturing production parts for customers through its on-demand manufacturing services. A particularly strong growth area of late has been CNC machining, which uses computerized machines to cut an industrial part out of a block of metal or other material.
Vicki Holt, president and CEO, says growth in the company’s manufacturing services stems from the Proto Labs digital business model, which is designed to quickly produce custom parts according to specifications customers upload along with their online orders.
“Through the first half of the year, our CNC machining business has experienced explosive growth in excess of 60%,” she says. “Our ability to serve our customers with this level of growth demonstrates the tremendous value and scalability of our digital business model.”
In a conference call with stock analysts today, Holt said Proto Labs expects to benefit in multiple ways by joining GE Additive’s Manufacturing Partner Network. As it works on manufacturing projects received through that network, Proto Labs will have access to equipment, software and materials GE has developed for additive manufacturing.
Participating in the partner network “may involve Proto Labs providing some 3-D-printed parts to GE Aerospace or GE Medical,” Holt said on the conference call. But the manufacturer’s participation in the network will focus mostly on working with GE Additive to expand the use of metal 3-D printing manufacturing services, she added.
Proto Labs, with manufacturing facilities and online customers in the United States, Europe and Japan, provides several types of custom manufacturing that customers can order online: 3D printing, which uses digital blueprints to construct items by adding or removing materials layer by layer; additive manufacturing, a form of 3D printing used to add materials to build products; injection molding, a process by which material is forced into a mold to form a product; and CNC, or computer numerical control, a process by which machining or milling tools operate via computer programming.
“As we look ahead, we are confident that our current market trends are favorable to our strengths and our business model,” Holt said. “Our differentiated technology-enabled digital manufacturing platform has demonstrated the ability to help companies and entrepreneurs get their products to market faster than their competition.”
For the second quarter ended June 30, Proto Labs reported:
- Revenue of $109.65 million, up 33.7% from $82.04 million a year earlier;
- Gross profit of $59.21 million, up 27.7% from $46.37 million, resulting in a gross profit margin of 54.0%, down slightly from 56.5%;
- Net income of $18.314 million, up 51.5% from $12.086 million.
For the six months ended June 30, Proto Labs reported:
- Revenue of $217.40 million, up 34.0% from $162.21 million a year earlier;
- Gross profit of $117.12 million, up 27.8% from $91.64 million, resulting in a gross profit margin of 53.9%, down from 56.5%;
- Net income of $36.37 million, up 49.7% from $24.29 million.
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