Digital manufacturing and ecommerce company Proto Labs Inc. turned in a mediocre second quarter. It’s now doing some business and technology platform consolidation to improve future results. The manufacturer’s Protolabs is an ecommerce-based company that offers injection molding, CNC machining, 3D printing, and sheet metal fabrication to about 50,000 product developers, engineers, and supply chain teams throughout the world.
Protolabs revenue and sales
Protolabs grew revenue to $126.9 million. That represents a 3.1% increase compared to revenue of $123.0 million in the second quarter of 2021.
Net income from Q2 ended June 30, was $2.3 million vs. $12.9 million in Q2 2021. Weaker demand for its injection molding sales impacted the company’s financial performance, Protolabs CEO Rob Bodor says.
“Our injection molding growth rate was negatively impacted by the absence of several large code-related medical orders that occurred in the first half of 2021,” Bodor told analysts in its recent Q2 earnings call. “In addition, we experienced many customers placing unusually large orders in 2021 to stockpile inventory during that time of high uncertainty. In 2022, that behavior has significantly reduced among our customers, in line with macro inventory trends in the industries we serve.”
Injection molding sales in the second quarter declined to about $53.4 million. That’s down 8% from $58.1 million the second quarter of 2021. To improve performance, Protolabs in shuttering its Japanese businesses.
“In May, our board of directors approved a plan to cease operations in Japan and close our manufacturing facility in the region,” he said. “Protolabs entered Japan in 2009, but our Japanese business only grew to 3% of our total revenue over that period and did not meet our profitability expectations.”
The company also continues to consolidate its domestic and its Hub international ecommerce systems into a universal ecommerce platform. In January 2021, Protolabs agreed to pay $280 million (plus up to $50 million contingent on performance) for Amsterdam-based Hubs. Hubs offers digital manufacturing services through an international network of hundreds of manufacturers and also processes orders online.
“Regarding the integration of the Protolabs and Hubs offers into one ecommerce platform, we continue to make good progress with a dedicated focus on the customer experience,” Bodor told analysts. “We’re on track, and we’ll have the initial integrated CNC machining release by the end of the year.”
For the first six months of the year, sales decreased to $106.8 million. That’s down 6.7% from $114.5 million in the first half of 2021. Net income through the second quarter was $7.7 million vs. $16.6 million in the prior year.
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