Proto Labs, Inc. (NYSE:PRLB) Q4 2018 Earnings Conference Call Transcript

Feb 07, 2019 • 08:30 am ET

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Proto Labs, Inc. (NYSE:PRLB) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Greetings, and welcome to Proto Labs Q4 and Full Year 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the conference over to Daniel Schumacher, Director of Investor Relations. Thank you. You may begin.

Executive
Daniel Schumacher

Thank you, operator, and good morning, everyone. With me today is Vicki Holt, our President and Chief Executive Officer; and John Way, our Chief Financial Officer.

This morning, before the market opened, Proto Labs issued a press release announcing its financial results for the fourth quarter and full year ended December 31st, 2018. The release is available on the Company's website at protolabs.com.

Before we begin, I would like to remind everyone that our discussion will include statements relating to future performance and expectations that are or may be considered forward-looking statements and subject to many risks and uncertainties that could cause actual results to differ materially from expectations. Please refer to our earnings press release and recent SEC filings, including our Annual Report on Form 10-K, for information on certain risks that could cause actual outcomes to differ materially and adversely from any forward-looking statements made today.

The results and guidance we will discuss include non-GAAP financial measures, consistent with our past practice. Please refer to our press release within the Investor Relations section of our Company website for a complete reconciliation of non-GAAP to GAAP results.

Now I'd like to turn the call over to Vicki Holt, President and Chief Executive Officer of Proto Labs. Vicki?

Executive
Victoria M. Holt

Thanks, Dan. Good morning, everyone. Thank you for joining us on our fourth quarter conference call. I will begin the call with our fourth quarter and full year 2018 financial results, as well as key accomplishments for 2018. Next, John will provide a more in-depth view of our fourth quarter and 2018 financials. Then, I will give an overview of our priorities for 2019. And finally, John will provide our financial outlook for the first quarter of 2019. After that, we will gladly take your questions.

Proto Labs had another strong quarter of revenue growth. However, fourth quarter financial results did fall below our expectations. This shortfall was primarily driven by the financial performance of our recent acquisition of Rapid Manufacturing, and to a lesser extent inefficiencies associated with the relocation of our CNC operations to a new facility.

We reported revenue of $113 million in the fourth quarter, representing growth of 20% over 2017. These results were on the lower end of the guidance range of $112 million to $117 million that we provided on our third quarter earnings call in October. We saw a strong start to the quarter. However, sales softened as we progressed through the quarter. As we've discussed in the past, December is a difficult month for us to predict and this year was no exception.

The revenue and earnings growth from our acquisition of