Proto Labs(US:PRLB)2023-02-21 17:52Revenue and Growth - Revenue increased from $126.0 million in 2012 to $488.4 million in 2022, reflecting significant growth in the custom parts manufacturing market[53]. - Total revenue for the year ended December 31, 2022, was $488,398,000, a slight increase from $488,098,000 in 2021, representing a growth of 0.06%[311]. - The company has experienced significant growth, increasing from 2,487 full-time employees as of December 31, 2018, to 2,568 full-time employees as of December 31, 2022[142]. - The company may not be able to maintain its revenue growth due to various factors, including competition and economic conditions[110]. Financial Performance - Gross profit for 2022 was $215,465,000, down from $222,691,000 in 2021, indicating a decrease of approximately 3.5%[311]. - The company reported a net loss of $103,462,000 for 2022, compared to a net income of $33,372,000 in 2021, reflecting a significant decline in profitability[311]. - Operating expenses increased to $313,448,000 in 2022, up from $182,349,000 in 2021, primarily due to a goodwill impairment of $118,008,000[311]. - The company reported a comprehensive loss of $121,000,000 for 2022, compared to a comprehensive income of $19,975,000 in 2021[311]. - The company’s cash and cash equivalents decreased to $56,558,000 in 2022 from $65,929,000 in 2021, a decrease of approximately 14.5%[309]. - The company incurred $21.686 million in capital expenditures for property and equipment in 2022, down from $34.209 million in 2021[318]. Operations and Capabilities - The company operates a digital model where 98% of orders are manufacturable, and the majority of sourced orders are paired automatically using a smart order routing system[37]. - The acquisition of Hubs in 2021 expanded the company's manufacturing capabilities and allowed for a more comprehensive service offering to customers[42]. - The integration of Protolabs and Hubs aims to provide a single e-commerce storefront for customers, enhancing the overall service offering[47]. - The company has produced over 12.0 million parts using machine learning to optimize manufacturing processes[37]. - The company relies on a network of nine manufacturing facilities located in the U.S. and Europe, which are vulnerable to natural or man-made disasters that could disrupt operations[124]. Customer Focus and Market Strategy - The company serves a diverse customer base across over a dozen industries, reducing reliance on any single industry for growth[48]. - The company focuses on two main customer types: design engineers and production buyers, with strategies tailored to meet their specific needs[50][51]. - The company aims to leverage scale and innovation to expand profitability and capture operational efficiencies in the long term[54]. - The company has initiated marketing efforts to strengthen its brand, which is crucial for attracting new and repeat customers[138]. Sustainability and Corporate Responsibility - The company installed nearly 1,900 solar panels in Plymouth, MN, covering approximately 20% of energy use and offsetting 1.3 million pounds of CO2 annually[76]. - The company aims to maximize recycling in manufacturing and office facilities, recycling metal, plastic, and water used in processes[77]. - The company hosted InspirON in Europe in 2022, focusing on sustainable product design and manufacturing[75]. - The company is committed to supporting STEM education through grants and partnerships with educational institutions[85]. Risks and Challenges - The company faces significant competition in the custom parts manufacturing market, which is fragmented and highly competitive[104]. - Economic uncertainty arising from the COVID-19 pandemic has adversely affected the company's business and results of operations[109]. - The company may face challenges in staffing and managing foreign operations, particularly in new geographic locations[122]. - The company faces risks related to supply chain disruptions, particularly from single or limited source suppliers, which could adversely affect customer relationships and financial condition[145]. Governance and Compliance - The company’s governance priorities include developing a formal enterprise risk management program to enhance oversight and compliance[71]. - The company is required to maintain effective internal controls over financial reporting as mandated by the Sarbanes-Oxley Act, with annual evaluations and testing[169]. - The company is subject to evolving government regulations regarding the Internet and e-commerce, which could harm its business and results of operations[153]. Intellectual Property and Innovation - As of December 31, 2022, the company owned 34 issued patents and had 12 applications pending in the United States[92]. - The expansion of the company's intellectual property portfolio is crucial for revenue growth, but it faces uncertainties and potential costs in obtaining valuable patents[148]. - The company may face challenges in adequately protecting its intellectual property rights, which could impair its competitive position and lead to increased competition and lower revenue or gross margin[146]. Employee and Workforce Management - In 2022, the company had 2,568 full-time employees, with 1,787 in the United States, 777 in Europe, and 4 in Japan[79]. - The attrition rates in 2022 were 21.8% in the United States and 23.1% in Europe, which were higher than normal[81]. - The company provides an Educational Assistance Program, with employees spending an average of 36 hours in training sessions in 2022[84]. - The company has established a Diversity, Equity, and Inclusion Leadership Council to promote inclusivity and fairness in the workplace[78].