COMPANY NOTE

January 28, 2016

Proto Labs, Inc. (PRLB)

Neutral

Earnings Preview: Expect Another Strong Qtr, but LT Targets Will Be Big Focus
CONCLUSION

PRICE: US$54.37
TARGET: US$65.00
25x fully taxed CY16E Op Inc + Cash

We believe PRLB will report Q4 results that are in line to slightly above consensus
estimates when it reports on February 4, before market open. Our confidence in Q4
stems from our recent channel survey report that showed balanced demand from service
bureau operators, as well as Proto Labs history of strong execution. While confident
in the companys ability to meet/exceed Wall Street expectations, we believe the bigger
focus on this upcoming earnings call will be modestly adjusting its long-term growth
targets. We believe a modest cut to LT targets could sit poorly with some investors.
Nevertheless, we remain confident in the companys market position and already strong
business model that is backed by an even stronger Management team. At current levels,
we are reiterating our Neutral rating and $65 price target.

Troy D. Jensen, CFA

Sr Research Analyst, Piper Jaffray & Co.
612 303-6291, troy.d.jensen@pjc.com
Austin R. Bohlig
Research Analyst, Piper Jaffray & Co.
612 303-6987, austin.r.bohlig@pjc.com
Changes
Rating
Price Tgt
FY15E Rev (mil)
FY16E Rev (mil)
FY15E EPS
FY16E EPS

Expecting Solid Q4 Results - We believe the company will report solid Q4 results

that are in-line to slightly above consensus revenue and EPS estimates of $72.0M and
$0.47, respectively. The guidance provided from the company was revenue of $70-74M
with EPS in the range of $0.45-$0.49, and consensus is relatively at the mid-point of
guidance. Our confidence in Q4 stems from our recent channel survey report that
showed balanced demand from service bureau operators, as well as Proto Labs history
of strong execution. That being said, similar to this quarter our survey as traditionally
indicated in-line quarters, and the fact Proto Labs has typically out performed these
results, we expect the company will see another quarter of strong growth.

Previous

52-Week High / Low

Shares Out (mil)
Market Cap. (mil)
Avg Daily Vol (000)
Book Value/Share
Net Cash Per Share
Debt to Total Capital
Div (ann)
Fiscal Year End

Long-Term

Targets Likely Come Down - Since PRLB current LT targets were

primarily based on the companys legacy businesses (Protomold and Firstcut), we
believe their LT model needs to be slightly modified since the large addition and
expansion of their 3D offering. We do not believe LT targets will be significantly
altered, but as we have believed for the past year, we expect the company will begin
to endorse an organic of 20%, or 20-25% year/year versus 25%+. We do not believe
this is a competitive issue, but more of a math-related situation (law of large numbers)
and as any company becomes larger it will be harder to sustain growth rates of
that magnitude. We believe a 20%, or 2025% target will be more appropriate and
sustainable for several years.

Current
Neutral
US$65.00
US$262.3
US$322.5
US$1.94
US$2.39

US$79.95 / US$52.68
26.4
US$1,435.4
184
US$11.91
US$5.68
NM
NA
Dec

Price Performance - 1 Year

USD

85
80
75
70
65
60

Survey

55

Suggests Bullish Growth in 2016 - We were very encouraged to see the

2016 outlook improve significantly for service bureaus in our 4Q15 3D survey. On
a weighted-average basis, total growth expectations increased 6 percentage points,
to 17% in the December quarter, which includes ~38% of all survey respondents
expecting their service business to grow 21%+. We believe this outlook bodes well for
Proto Labs, and anticipate the company to have another strong year in 2016.

50
Jan-15 Mar-15

May-15

Jul-15

Sep-15

Nov-15

Jan-16

Source: Bloomberg

R I S K S T O A C H I E V E M E N T O F P R I C E TA R G E T

Macro economic slowdown, disruptive new technologies, and software duplication.

COMPANY DESCRIPTION

Proto Labs is a leading provider of CNC machined and injection molded parts.
YEAR

REVENUE (US$ m)

EARNINGS PER SHARE (US$)

Mar

Jun

Sep

Dec

FY

FY RM

Mar

Jun

Sep

Dec

FY

2014A

46.1

52.9

54.6

56.1

209.6

6.8x

0.41

0.45

0.44

0.43

1.73

FY P/E
31.4x

2015E

58.5A

64.0A

67.8A

72.0

262.3

5.5x

0.45A

0.50A

0.52A

0.47

1.94

28.0x

2016E

76.0

79.8

82.6

84.2

322.5

4.5x

0.54

0.58

0.61

0.65

2.39

22.7x

Piper Jaffray does and seeks to do business with companies covered in its research reports. As a result, investors should be aware
that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as
only a single factor in making their investment decisions. This report should be read in conjunction with important disclosure
information, including an attestation under Regulation Analyst certification, found on pages 16 - 17 of this report or at the
following site: http://www.piperjaffray.com/researchdisclosures..
Proto Labs, Inc.
Page 1 of 17

COMPANY NOTE
January 28, 2016

4Q15 Earnings
Preview

Proto Labs is expected to report Q4 results before the market open on Thursday, February
4. We believe the company will report a solid December quarter that is in-line to slightly
above consensus revenue and EPS estimates of $72.0 million and $0.47, respectively. The
guidance provided from the company was revenue of $70-74 million with EPS in the range
of $0.45-$0.49, and consensus is relatively at the mid-point of guidance. Our confidence in
the December quarter results stems from our recent channel survey report that showed
balanced demand from service bureau operators, as well as Proto Labs history of strong
execution, which we display in the exhibit below. While confident in the companys ability
to meet/exceed Wall Street expectations, we believe the bigger focus on this upcoming
earnings call will be discussions surrounding its long-term business model targets. We do
not believe long-term targets will be significantly altered, but as we have started to believe
about a year ago, a 25%+ run rate is going to be hard to sustain as the company becomes
larger and a 20% or 20-25% target seems be more appropriate. Furthermore, we may see
some modest changes to the margin profile given the strong growth we are seeing from the
companys 3D printing (Fineline) segment and the dilutive acquisition of Alphaform.
We do not believe a revision to its long-term business model is related to any competitive
issue, but with the addition and expansion of their 3D offering the model has changed over
time. That being said, we continue to believe Proto Labs quick-turn business model is
untouched from a competitive standpoint and given the bullish outlook we saw in our
survey, 2016 is likely to be another strong year for Proto Labs. Given Proto Labs is already
a high-multiple stock, we believe a modest cut to long-term targets could sit poorly with
some investors, given the low tolerance for estimate cuts in this macro environment. The
companys market position and already strong business model is backed by an even
stronger Management team. We believe Proto Labs is a great growth story, and our Neutral
rating on Proto Labs has been largely related to valuation and modest concerns about
revised business model targets. Since the stock has pulled back considerably in 2016, we
may revisit our rating following the earnings results. Throughout this report, we address
the companys current business model targets, as well as revisit our service bureau findings
in our most recent 3D survey.

Exhibit 1

EARNINGS HISTORY

Source: Piper Jaffray & Co. Investment Research, Factset

Believe Management
Will Address LT
Targets

Proto Labs, Inc.

On Proto Labs previous earnings call and at a recent Tech Conference, Management has
continued to endorse it will be addressing its business model targets on the upcoming Q4
earnings call. Since the current targets were primarily based on the companys legacy
businesses (Protomold and Firstcut), we believe the long-term model needs to be slightly
modified with the large addition and expansion of its 3D offering. We do not believe longterm targets will be significantly altered, but as we have been saying for the past year, we
believe the company will begin to endorse an organic growth rate of 20%, or 20-25%
year/year vs. 25%+. As previously stated, we do not believe this is a competitive issue, but

Page 2 of 17

COMPANY NOTE
January 28, 2016

more of a math-related situation (Law of Large Numbers) and as any company becomes
larger it will be harder to sustain growth rates of that magnitude. We believe a 20%, or 20
25% target, will be more appropriate and sustainable for several years. Note before the
acquisition of Fineline anniversaried and was not yet apart of organic revenues, Proto Labs
organic year/year growth rate decelerated to 21.9%, 18.5%, 17.2%, and 15.3% in 3Q14,
4Q14, 1Q15, and 2Q15, respectively. However, when Fineline was included in 3Q15 as
organic revenues, year/year organic growth accelerated to 24.3%. Given the ramp Proto
Labs is seeing for 3D printing services, the recent expansion into Europe and the launch of
new products, we do not believe 25%+ growth rates are unattainable metrics, but looking
3-5 years down the road 20%, or 20 25% is more likely.
We also believe management will modestly adjust margin targets, given the companys 3D
service acquisitions. Today the company is targeting 61- 63% gross margins and 27- 29%
operating margins, but recall these are GAAP targets, so we estimate non-GAAP numbers
would be 2- 3% higher for the operating margin. We believe these targets have historically
been great for the companys legacy businesses, but with the acquisition of Fineline and
Alphaform, these numbers may be a bit high. While we are unaware of the companys
operating margin profile for its 3D services, we do believe 3D service gross margins are
modestly below the company average (60%) and within 50-53% range. Over time we
believe the company can get these margins closer to the company average due to quick turns
and eliminating some post processing tasks, but as we highlight later, our most recent
survey indicated there was a modest increase in pricing pressure among service bureaus in
Q4. Owing to increased competition within the 3D service market, we could see increased
pricing pressure prevail which could affect 3D service margins. Today, Fineline accounts
for ~9% of total revenues, but we expect this segment to see robust growth over the next
several years and as this segment becomes a bigger piece of the story it may weigh on the
corporate margin profile. We believe management could start to endorse 58- 60% long-term
gross margin targets. That being said, below we highlight Wall Street estimates, and today
analysts are expecting an average of 24% year/year growth and ~59% gross margins and
~27% operating margins through 2017, which means a business model target cut could be
somewhat factored into shares.
Exhibit 2

ANALYST LONG-TERM EXPECTATIONS

Source: Piper Jaffray & Co Investment Research, FactSet

Proto Labs, Inc.

Page 3 of 17

COMPANY NOTE
January 28, 2016

4Q15 3D Printing
Survey Results Give
Us Confidence in
PRLB Dec Quarter

Despite these modest concerns about long-term target revisions, we remain confident in the
December-quarter results, which stems from our recent channel survey report that showed
balanced demand from service bureau operators. We conducted our end-of-the-quarter 3D
printing industry survey and received feedback from 73 different industry contacts within
the broader 3D printing and Additive Manufacturing (AM) markets. Of the 73 respondents,
88% were located in North America and 12% in Europe. Roughly 32% of respondents
classified themselves as both a system reseller and service bureau operator (very common
within the industry) with 36% indicating their primary business was exclusively operating a
service bureau and the remaining 32% are solely system resellers. Historically, our 3D
survey has never been a direct read into Proto Labs traditional injection molding and CNC
businesses; however, the companys 3D printing component (Fineline) is beginning to
become a bigger piece of the story. We think as Fineline continues to grow, our results from
our 3D survey can become more effective for the overall company. That being said, similar
to this quarter our survey as traditionally indicated in-line quarters, and the fact Proto Labs
has typically out performed these results, we expect the company will see another quarter of
strong growth. Furthermore, we believe the positive service bureau outlook our 3D survey
indicated are great data points for Proto Labs North American and recently opened
European 3D service facilities.
The service bureau market seemed to be in-line with prior-quarter results with the number
of below-plan responses slightly out numbering above-plan responses, but once again the
majority of results pointed to an in-line quarter. In our 4Q15 survey, 13% (7) of service
bureaus reported an above-plan quarter versus 19% (10) indicating they were below plan.
The remaining 67% (35) of service bureaus indicated Q4 was in-line with expectations.
These results equate to a net negative of 3%, which is equal to (23% above plan - 26%
below plan = -3% in 3Q15) our 3Q15 survey results. That being said, we continue to
believe service bureaus in general are a great way to get exposure to 3D technology without
encountering the high upfront capital investment. In fact, we believe as companies continue
to delay their system orders, they will outsource their 3D printing service, which bodes well
for many in the service bureau industry. The exhibit below highlights the results from our
4Q15 3D printing industry survey.
Exhibit 3

4Q15 SERVICE SALES VS EXPECTATIONS

100%
20%

25%

26%

63%

58%

51%

16%

18%

23%

1Q15

2Q15

3Q15

80%

19%

60%
40%

67%

20%
0%
Above Plan

In-line

13%
4Q15

Below Plan

Source: Piper Jaffray 4Q15 3D Printing Survey Q7; 4Q15 n=52, 3Q15 n=53, 2Q15 n=57, 1Q15 n49

Proto Labs, Inc.

Page 4 of 17

COMPANY NOTE
January 28, 2016

Solid Growth in 2015,

But Modestly
Affected By Foreign
Macro Headwinds

We have historically believed service bureaus that primarily printed prototypes could grow
10-15% annually, but as companies begin to print more end-use parts we believe some
service bureaus could grow in excess of 15%+. Given our bullish view on growth for
metals, we believe companies with high metal exposure can grow 20%+. In our 4Q15
survey, we asked service bureaus how much they grew in 2015, and on average service
bureaus grew ~10%. While this is at the low-end of our expectations, our data suggests
international macro and FX headwinds could have affected demand. Proto Labs 3D
printing service business has been growing at rates much faster than the average service
bureau over the past couple quarters, and due to the cross selling synergies between the
companys 3 businesses we would not be surprised to see Proto Labs continue to grow
faster than the overall market. Looking longer term, we believe the company can sustain
20%+ growth rates, largely due to the companys expansion into Europe, as well as the
companys growing metal offering.
Exhibit 4

WHAT WAS YOUR SERVICE BUREAU GROWTH IN 2015?

30%+

15%

21-30%

15%

11-20%

13%

1-10%

26%

Flat

26%

(1-10%)
(10%+)

4%
0%

5%

10%

15%

20%

25%

30%

Source: Piper Jaffray 4Q15 3D Printing Survey Q13, n=53

33% of Service
Bureaus Offer Metals

Proto Labs, Inc.

In our survey, service bureaus with high metal exposure saw exceptional demand
throughout 2015 and some even experienced year/year growth in excess of 30%. Given the
strong demand for metal printing services, we asked service bureaus if they offer metal
printing abilities or anticipate to in 2016. Our results indicated that the majority (57%) do
not offer metal services. Approximately 33% of service bureaus have metal printing
abilities, and the remaining 10% anticipate adding metal printing to their portfolio in 2016.
Although we are bullish about metals, we are not completely surprised only 33% currently
offer this service since metal printers are extremely expensive and the process is more
difficult than printing with other 3D technologies. However, we believe these barriers to
entry benefit companies partaking in the metal service space, such as Proto Labs, who is
significantly expanding their metal offering in 2016. Furthermore, companys may also be
able to charge a premium for metal printed parts, which is likely not going to be the case
for other 3D printed materials. Regarding specific metal materials, we asked service
bureaus what is the most common type of metal material customers are requesting. As
displayed below, stainless steel, aluminum and titanium are the 3 top metal materials.

Page 5 of 17

COMPANY NOTE
January 28, 2016

Exhibit 5

METAL SERVICES AND MATERIALS

No, but
plan to in
2016,
10%

Stainless Steel

29%

Aluminium

24%

Titanium
Yes, 33%

19%

Cobalt Chrome

11%

Inconel

11%

Steel

5%

Other

No, 57%

1%

Nickel

0%
0%

5%

10%

15%

20%

25%

30%

35%

Source: Piper Jaffray 4Q15 3D Printing Survey Q50 & Q51; Metal Services n=49, Materials n=17

Modest Discounting
Seen In Q4

While the barriers to entry are higher for companies looking to pursue the metal market,
the barriers to compete in traditional 3D printing services such as SLA, FDM or SLS is
considerably lower. There have been a number of new entrants into the 3D printing service
space. While companies are able to find some ways to differentiate, such as speed with
Proto Labs, it is hard to find additional ways to improve the final 3D printing product. For
that reason, we believe we are starting to see modest discounting in the service space. We
asked service bureaus how the pricing environment for 3D printing services changed in
recent quarters. As displayed in the exhibit below, 47% of service bureaus saw modest
discounting in the December quarter, which is up from 27% in the prior quarter.
Meanwhile, the percentage of service bureaus seeing significant discounting remained at
6%. There was a 7 percentage point increase from 2% to 9% of service bureaus seeing
premium pricing, but we would expect this is for metal or other highly custom applications.
Although we do not believe the increase in discounting is a huge concern today, we do
believe as more companies enter this space we could see further pricing pressure in the
future. This could ultimately cause some margin erosion.
Exhibit 6

HOW HAS PRICING ENVIORNMENT CHANGED FOR 3D SERVICES?

4Q15
3Q15

8%

Premium Pricing

2%
39%

Stable Pricing

65%

47%

Modest Discounting

27%
6%
6%

Significant Discounting
0%

10%

20%

30%

40%

50%

60%

70%

Source: Piper Jaffray 4Q15 3D Printing Survey Q42; 4Q15 n=49, 3Q15 n=49

Proto Labs, Inc.

Page 6 of 17

COMPANY NOTE
January 28, 2016

Bullish Service
Bureau Outlook

All that said, we were very encouraged to see the 2016 outlook improve significantly for
service bureaus. On a weighted-average basis, total growth expectations increased 6
percentage points, to 17% in the December quarter, which includes ~38% of all survey
respondents expecting their service business to grow 21%+, up from 21% of respondents in
the prior quarter. In addition, only 6% of service bureaus expect to not grow or be flat for
the year, which is down from 19% in 3Q15. From a geographic perspective, North
American service bureaus are expected to grow 17%, while Europe is indicating an
acceleration of 14%. Our belief is the service market can grow 15%+ for the next several
years, which we expect will be led by growing DDM application in the Aerospace and
Medical verticals. We believe this outlook bodes well for Proto Labs, and anticipate them to
have another strong year in 2016.

Exhibit 7

1-YEAR SERVICE GROWTH PROJECTIONS - AGGREGATE

50%
40%
30%
20%
10%
0%
1Q15

(1-10%)
0%

Flat
10%

1-10%
39%

11-20%
29%

21-30%
12%

30%+
10%

Cumulative
12%

2Q15

3%

15%

31%

24%

15%

12%

12%

3Q15

4%

15%

35%

25%

8%

13%

11%

4Q15

0%

6%

25%

31%

17%

21%

17%

Source: Piper Jaffray 4Q15 3D Printing Survey Q49; 4Q15 n=52, 3Q15 n=52, 2Q15 n=57, 1Q15 n=49

Investment
Conclusion

Proto Labs, Inc.

We believe Proto Labs will report a solid December quarter that is in-line to slightly above
consensus revenue and EPS estimates when they report on February 4, before market open.
Our confidence in Q4 results stems from our recent channel survey report that showed
balanced demand from service bureau operators, as well as Proto Labs history of strong
execution. While confident in the companys ability to meet Wall Street expectations, we
believe the bigger focus on this upcoming earnings call will be discussing its long-term
growth targets. That being said, we continue to believe Proto Labs quick-turn business
model is untouched from a competitive standpoint and given the bullish outlook we saw in
our survey, 2016 is likely to be another strong year for Proto Labs. Given Proto Labs is
already a high multiple stock, we believe a modest cut to long-term targets could sit poorly
with some investors. Nevertheless, we remain confident in the companys market position
and already strong business model that is backed by an even stronger management
team. At current levels, we are reiterating our Neutral rating and $65 price target. Our $65
target equates to 25x our fully-taxed 2016 operating income assumption plus cash. The
following exhibit highlights our price target calculation.

Page 7 of 17

COMPANY NOTE
January 28, 2016

Exhibit 8

PRICE TARGET CALCULATION

Source: Piper Jaffray & Co. Investment Research

Proto Labs, Inc.

Page 8 of 17

Proto Labs

Troy Jensen, CFA (612-303-6291)

Troy.D.Jensen@pjc.com
Piper Jaffray

Income Statement
(data in millions, except per share)
1/28/2016
Fiscal 2015 by Quarter
Jun
Sep
Q2 15
Q3 15
$64.0
$67.8
26.3
27.4
$37.7
$40.5

Dec
Q4 15E
$72.0
31.0
$41.0

Mar
Q1 16E
$76.0
32.3
$43.7

Fiscal 2016 by Quarter

Jun
Sep
Q2 16E
Q3 16E
$79.8
$82.6
33.5
34.3
$46.3
$48.3

Dec
Q4 16E
$84.2
34.1
$50.1

Mar
Q1 17E
$89.9
36.2
$53.7

Fiscal 2017 by Quarter

Jun
Sep
Q2 17E
Q3 17E
$95.3
$99.6
38.2
39.8
$57.1
$59.9

Fiscal Year Ending

Revenues
Cost of Goods Sold
Gross Profits

Mar
Q1 15
$58.5
23.2
$35.4

Dec
Q4 17E
$108.6
43.1
$65.5

2014
$209.6
80.8
$128.8

2015E
$262.3
107.8
$154.5

2016E
$322.5
134.2
$188.4

2017E
$393.5
157.3
$236.2

Sales and Marketing

Research and Development
General and Administrative
Operating Income

$8.6
4.0
5.4
$17.4

$9.2
4.1
5.3
$19.1

$9.5
4.4
6.7
$19.8

$10.9
4.7
7.1
$18.3

$10.4
4.8
7.3
$21.2

$10.7
4.9
7.5
$23.2

$10.9
5.1
7.7
$24.6

$11.0
5.1
7.8
$26.1

$12.1
5.5
8.3
$27.9

$12.9
5.7
8.7
$29.8

$13.5
6.0
9.2
$31.2

$14.9
6.4
9.9
$34.3

$28.0
15.6
19.4
$65.8

$38.3
17.2
24.4
$74.6

$43.0
19.9
30.4
$95.0

$53.4
23.6
36.0
$123.2

Other Income (Expense)

Pretax Income
Taxes
Net Income

($0.0)
17.4
5.5
$11.9

$0.1
19.2
6.2
$13.0

$0.2
20.0
6.3
$13.7

$0.0
18.3
5.9
$12.4

$0.0
21.2
6.8
$14.4

$0.0
23.2
7.4
$15.8

$0.0
24.6
7.9
$16.7

$0.0
26.2
8.4
$17.8

$0.0
27.9
8.9
$19.0

$0.0
29.8
9.5
$20.3

$0.0
31.2
10.0
$21.2

$0.0
34.4
11.0
$23.4

$0.0
65.8
20.6
$45.2

$0.3
74.9
23.9
$51.0

$0.0
95.1
30.4
$64.7

$0.0
123.3
39.4
$83.8

Pro-Forma EPS
Shares Outstanding

$0.45
26.2

$0.50
26.3

$0.52
26.4

$0.47
26.6

$0.54
26.8

$0.58
27.0

$0.61
27.2

$0.65
27.4

$0.69
27.6

$0.73
27.8

$0.76
28.0

$0.83
28.2

$1.73
26.1

$1.94
26.4

$2.39
27.1

$3.01
27.9

Margin Analysis
Gross Margins
Sales and Marketing
Research and Development
General and Administrative
Operating Income
Tax Rate
Net Income

60.4%
14.7%
6.9%
9.2%
29.7%
31.7%
20.3%

58.9%
14.4%
6.3%
8.3%
29.9%
32.2%
20.4%

59.6%
14.1%
6.5%
9.8%
29.3%
31.6%
20.2%

57.0%
15.2%
6.5%
9.9%
25.4%
32.0%
17.3%

57.5%
13.7%
6.3%
9.7%
27.9%
32.0%
18.9%

58.0%
13.4%
6.1%
9.5%
29.1%
32.0%
19.8%

58.5%
13.2%
6.2%
9.4%
29.8%
32.0%
20.2%

59.5%
13.1%
6.1%
9.3%
31.1%
32.0%
21.2%

59.7%
13.4%
6.1%
9.2%
31.0%
32.0%
21.1%

59.9%
13.5%
6.0%
9.1%
31.3%
32.0%
21.3%

60.1%
13.6%
6.0%
9.2%
31.3%
32.0%
21.3%

60.3%
13.7%
5.9%
9.1%
31.6%
32.0%
21.5%

61.4%
13.4%
7.4%
9.2%
31.4%
31.3%
21.6%

58.9%
14.6%
6.5%
9.3%
28.4%
31.9%
19.5%

58.4%
13.3%
6.2%
9.4%
29.5%
32.0%
20.0%

60.0%
13.6%
6.0%
9.1%
31.3%
32.0%
21.3%

Quarter/Quarter % Change
Total Revenues
Operating Income
Net Income

4.4%
7.9%
6.3%

9.3%
10.0%
9.8%

6.1%
3.9%
5.2%

6.1%
-7.9%
-9.3%

5.6%
15.7%
15.7%

5.0%
9.5%
9.5%

3.5%
6.0%
6.0%

2.0%
6.5%
6.7%

6.8%
6.6%
6.4%

6.0%
7.0%
7.0%

4.5%
4.5%
4.5%

9.0%
10.0%
10.2%

Year/Year % Change
Total Revenues
Operating Income
Net Income

27.0%
12.4%
10.0%

21.0%
10.1%
9.6%

24.3%
17.1%
20.2%

28.4%
13.6%
11.3%

29.8%
21.8%
21.3%

24.7%
21.3%
20.9%

21.7%
23.8%
21.9%

17.0%
43.0%
43.3%

18.4%
31.8%
31.8%

19.5%
28.8%
28.8%

20.7%
27.0%
27.0%

28.9%
31.2%
31.2%

28.5%
20.2%
19.4%

25.2%
13.3%
12.8%

23.0%
27.4%
26.7%

22.0%
29.6%
29.6%

Other Metrics
Net Cash and Equivalents
Cash per Share
Days Sales Outstanding

$137.1
$5.23
44

$141.9
$5.40
41

$150.0
$5.68
44

Proto Labs, Inc.

$128.2
$4.90
39

Page 9 of 17
Current disclosure information for this company can be found at http://www.piperjaffray.com/researchdisclosures.

Proto Labs

Troy Jensen, CFA (612-303-6291)

Troy.D.Jensen@pjc.com
Piper Jaffray

Balance Sheet
($ in millions, except per share)
1/28/2016
ASSETS
Cash and Equivalents
Receivables
Inventory
Prepaid Expenses
Other Current Assets
Total Current Assets

Dec
Q4 10
$6.9
8.4
1.6
1.8
0.2
$18.9

Dec
Q4 11
$8.4
11.5
3.8
3.4
0.9
$28.1

Mar
Q1 12
$79.7
14.8
3.9
4.3
0.0
$102.7

Jun
Q2 12
$78.7
13.7
4.0
4.5
0.0
$100.9

Fixed Assets
Goodwill and Intangible
Long-Term Investments
Total Assets

$19.5
0.0
0.0
$38.4

$34.2
0.0
0.0
$62.3

$41.1
0.0
0.0
$143.8

$44.1
0.0
0.0
$145.0

$44.5
0.0
29.7
$156.9

$45.3
0.0
38.5
$173.9

$45.6
0.0
49.1
$189.0

LIABILITIES
Accounts Payable
Accrued Compensation
Accrued Liabilities
Income Taxes Payable
Current Debt Obligation
Total Current Liabilities

$8.5
$2.8
1.7
0.3
0.0
3.7
$8.5

$4.4
4.8
0.3
0.0
0.4
$9.9

$5.8
3.5
4.1
0.0
0.4
$13.7

$4.1
3.7
1.4
0.0
0.4
$9.6

$4.2
5.5
0.7
0.0
0.3
$10.7

$4.8
6.0
0.5
0.0
0.3
$11.5

Deferred Tax Liability

Long-Term Debt Obligation
Other
Total Liabilities

$1.3
1.3
0.7
$11.7

$4.3
0.6
0.9
$15.7

$4.3
0.5
0.9
$19.3

$4.3
0.4
0.8
$15.1

$4.3
0.4
0.8
$16.2

EQUITY
Total Shareholders Equity
Total Liab & Shrhldrs Equity

$26.6
$38.4

$46.7
$62.3

$124.4
$143.8

$129.9
$145.0

$140.7
$156.9

BALANCE SHEET METRICS

Current Ratio
Quick Ratio
Debt to Capital
Debt to Assets
Return on Equity
Days Sales Outstanding
Sales to Current Assets
Sales to Working Capital
Sales to Equity
Sales to Total Assets
Book Value Per Share
Net Cash Per Share

2.2x
1.8x
15.9%
13.1%
45.3%
41
3.4x
6.2x
2.4x
1.7x
$1.40
$0.10

2.8x
2.0x
2.1%
1.6%
40.1%
40
3.5x
5.5x
2.1x
1.6x
$2.34
$0.37

7.5x
6.9x
0.7%
0.6%
15.4%
44
1.0x
1.2x
0.9x
0.7x
$5.60
$3.54

10.5x
9.7x
0.6%
0.6%
15.6%
41
1.1x
1.2x
0.9x
0.8x
$5.14
$3.08

Sep
Q3 12
$58.0
15.3
4.3
5.2
0.0
$82.8

7.7x
6.8x
0.5%
0.5%
15.5%
42
1.4x
1.6x
0.8x
0.8x
$5.56
$3.43

Dec
Q4 12
$61.9
15.8
4.6
7.9
0.0
$90.2

Sep
Q3 13
$73.0
18.0
5.0
8.3
0.0
$104.3

Dec
Q4 13
$79.4
18.3
5.2
6.9
0.0
$109.8

Mar
Q1 14
$78.6
21.9
5.3
4.9
0.0
$110.7

$47.1
0.0
54.4
$198.2

$52.4
0.0
59.7
$216.4

$56.1
0.0
64.3
$230.2

$64.0
0.0
71.6
$246.2

$87.3
33.6
57.3
$265.0

$5.8
7.5
0.6
0.0
0.2
$14.0

$5.7
4.4
0.6
0.0
0.2
$10.9

$6.3
6.8
1.1
0.0
0.2
$14.5

$6.5
6.2
0.8
0.0
0.2
$13.7

$10.4
4.8
1.3
0.1
0.2
$16.8

$4.6
0.4
0.8
$17.2

$3.3
0.3
0.7
$18.4

$3.3
0.2
0.7
$15.2

$3.3
0.2
0.7
$18.8

$3.7
0.2
1.0
$18.5

$156.7
$173.9

$170.6
$189.0

$183.0
$198.2

$197.6
$216.4

$211.6
$230.2

7.8x
6.7x
0.4%
0.4%
16.7%
42
1.4x
1.6x
0.8x
0.7x
$6.18
$3.93

Mar
Q1 13
$63.6
17.5
4.7
8.4
0.0
$94.2

6.7x
5.8x
0.3%
0.3%
17.5%
42
1.4x
1.7x
0.8x
0.7x
$6.65
$4.38

Jun
Q2 13
$65.8
17.5
4.9
8.5
0.0
$96.6

8.9x
7.7x
0.2%
0.2%
18.2%
40
1.5x
1.7x
0.8x
0.7x
$7.08
$4.63

7.2x
6.3x
0.2%
0.2%
18.0%
39
1.5x
1.7x
0.8x
0.7x
$7.60
$5.09

8.0x
7.2x
0.2%
0.2%
17.9%
37
1.5x
1.7x
0.8x
0.7x
$8.10
$5.49

Dec
Q4 14
$74.0
24.2
6.2
3.9
0.0
$108.3

Mar
Q1 15
$81.6
28.4
6.4
4.8
0.0
$121.2

Jun
Q2 15
$87.5
29.5
6.8
2.9
4.4
$131.2

Sep
Q3 15
$92.2
32.9
7.2
6.2
4.0
$142.5

$88.0
33.2
60.7
$279.4

$91.6
33.2
54.3
$287.5

$94.0
33.0
55.6
$303.9

$100.9
32.8
54.5
$319.4

$108.6
33.0
57.8
$341.9

$11.8
5.8
3.5
0.0
0.2
$21.3

$8.0
8.2
3.8
0.0
0.2
$20.1

$7.9
6.1
2.7
2.0
0.1
$18.8

$8.6
7.9
2.0
4.0
0.1
$22.5

$11.3
8.3
1.8
0.0
0.1
$21.4

$11.6
10.5
2.4
0.0
0.0
$24.5

$3.8
0.1
1.0
$21.7

$3.7
0.1
0.8
$25.9

$4.1
0.0
0.9
$25.1

$1.8
0.0
1.4
$22.0

$2.2
0.0
1.5
$26.2

$2.4
0.0
1.5
$25.4

$1.5
0.0
1.7
$27.7

$224.5
$246.2

$239.1
$265.0

$254.3
$279.4

$265.5
$287.5

$277.6
$303.9

$294.0
$319.4

$314.2
$341.9

5.8x
5.2x
0.1%
0.1%
17.0%
39
1.9x
2.3x
0.8x
0.7x
$10.15
$4.90

5.4x
4.9x
0.0%
0.0%
16.7%
44
1.8x
2.3x
0.8x
0.7x
$10.59
$5.23

6.1x
5.5x
0.0%
0.0%
16.1%
41
1.8x
2.1x
0.8x
0.7x
$11.19
$5.40

5.8x
5.1x
0.0%
0.0%
15.8%
44
1.7x
2.1x
0.8x
0.7x
$11.91
$5.68

6.6x
6.0x
0.1%
0.1%
17.7%
43
1.6x
1.8x
0.8x
0.7x
$8.60
$5.74

Jun
Q2 14
$48.1
25.2
5.8
7.6
0.0
$86.7

4.1x
3.4x
0.1%
0.1%
17.7%
43
2.1x
2.8x
0.8x
0.7x
$9.14
$4.02

Proto Labs, Inc.

Sep
Q3 14
$58.5
25.5
5.7
8.0
0.0
$97.6

4.9x
4.2x
0.1%
0.1%
17.4%
42
2.0x
2.5x
0.8x
0.7x
$9.71
$4.54

Page 10 of 17
Current disclosure information for this company can be found at http://www.piperjaffray.com/researchdisclosures.

Proto Labs

Troy Jensen, CFA (612-303-6291)

Troy.D.Jensen@pjc.com
Piper Jaffray

Statement of Cash Flows

(data in millions, except per share)
1/28/2016
Dec
Q4 11
(Full Year)
$18.0
4.3
1.1
2.2
(0.67)

Cash flows from operating activities:

Net income
Depreciation
Stock option compensation expense
Changes in deferred taxes
Other
Changes in assets and liabilities:
Accounts receivable
Inventory
Prepaid expenses and other assets
Income taxes payable
Accounts payable
Accrued liabilities and others
Net cash provided by operating activities

Dec
Mar
Jun
Sep
Q4 12
Q1 13
Q2 13
Q3 13
(Full Year) (3 Months) (6 Months) (9 Months)
$24.0
$8.3
$16.9
$25.8
6.1
1.7
3.6
5.5
3.0
0.9
1.7
2.6
(0.6)
0.1
0.3
(0.1)
(6.1)
(3.8)
(5.2)
(7.1)

Dec
Mar
Jun
Sep
Q4 13
Q1 14
Q2 14
Q3 14
(Full Year) (3 Months) (6 Months) (9 Months)
$35.3
$10.1
$21.1
$31.4
7.6
2.1
4.7
7.7
3.5
1.0
2.2
3.6
0.5
0.1
0.1
0.5
(8.3)
(0.4)
(0.8)
(3.2)

Dec
Mar
Jun
Sep
Q4 14
Q1 15
Q2 15
Q3 15
(Full Year) (3 Months) (6 Months) (9 Months)
$41.6
$10.5
$22.1
$34.5
11.1
3.4
6.9
10.4
4.8
1.3
2.9
4.5
(1.9)
0.3
0.6
-0.3
(3.0)
(0.2)
(0.4)
(4.3)

($3.5)
(2.2)
(0.6)
0.0
1.5
3.3
$23.5

($4.4)
(0.8)
(1.9)
4.3
0.3
1.3
$25.3

($1.9)
(0.2)
0.4
2.7
1.1
1.8
$11.2

($2.0)
(0.4)
1.7
3.1
1.1
(1.3)
$19.4

($2.2)
(0.4)
1.5
6.1
1.6
1.6
$34.9

($2.5)
(0.6)
1.6
8.8
1.7
0.9
$48.4

($3.6)
(0.2)
(0.8)
4.0
3.9
(1.0)
$15.3

($5.7)
(0.3)
(0.4)
2.4
5.1
(2.5)
$26.0

($6.3)
(0.3)
(0.7)
4.0
1.4
1.9
$40.0

($5.3)
(0.9)
0.1
9.4
1.4
(0.3)
$57.2

($4.36)
(0.2)
(1.0)
2.7
0.8
2.2
$15.4

($5.22)
(0.7)
(0.5)
(3.7)
3.4
2.2
$27.8

($3.59)

($19.0)
0.5
($18.5)

($17.4)
(61.9)
($79.2)

($2.5)
(22.8)
($25.3)

($6.1)
(23.0)
($29.1)

($13.0)
(32.0)
($45.0)

($18.8)
(39.7)
($58.5)

($9.9)
(5.8)
($15.7)

($31.6)
(16.9)
($48.5)

($69.8)
14.6
($55.2)

($43.5)
(20.0)
($63.5)

($6.2)
0.1
($6.2)

($15.7)
(1.3)
($17.0)

($27.3)
(1.8)
($29.0)

Cash flows from financing activities:

Proceeds (payments) from debt
Proceeds from common stock
ExcessTax benefit from stock compensation
Other
Net cash provided by financing activities

($4.0)
0.0
0.7
0.5
($2.8)

($0.4)
71.5
6.2
5.4
$82.8

($0.1)
0.0
4.1
1.6
$5.6

($0.2)
0.0
5.9
2.9
$8.6

($0.2)
0.0
8.2
4.6
$12.6

($0.3)
0.0
9.9
6.5
$16.1

($0.1)
0.7
0.9
0.0
$1.5

($1.0)
1.8
1.6
(0.4)
$2.1

($1.0)
4.0
4.4
(0.8)
$6.5

($1.1)
4.8
4.5
(1.2)
$7.0

($0.0)
0.9
0.5
(1.0)
$0.3

($0.1)
2.2
1.0
(1.0)
$2.1

($0.1)
5.2
5.2
(1.4)
$8.9

Exchange rate effects on cash and equivalents

Net increase in cash and equivalents
Cash and equivalents, beginning of period
Cash and equivalents, end of period

($0.2)
2.0
6.1
$8.1

($0.2)
28.6
8.1
$36.8

($0.2)
(8.82)
36.8
$27.9

($0.3)
(1.31)
36.8
$35.4

$0.1
2.6
36.8
$39.4

$0.2
6.3
36.8
$43.0

$0.1
1.2
43.0
$44.2

$0.2
(20.19)
43.0
$22.9

($0.1)
(8.77)
43.0
$34.3

($0.5)
0.3
43.0
$43.3

($0.4)
9.2
43.3
$52.6

$0.0
13.0
43.3
$56.3

($0.3)
20.8
43.3
$64.1

Cash flows from investing activities:

Capital expenditures
Other assets
Net cash used in investing activities

Proto Labs, Inc.

Current disclosure information for this company can be found at http://www.piperjaffray.com/researchdisclosures.

$41.3

Page 11 of 17

Proto Labs

Troy Jensen, CFA (612-303-6291)

Troy.D.Jensen@pjc.com
Piper Jaffray

Additional Information
(data in millions)
1/28/2016
Dec
Q4 12
$23.7
9.9
0.0
$33.6

Mar
Q1 13
$26.9
10.4
0.0
$37.3

Jun
Q2 13
$27.9
11.8
0.0
$39.7

Sep
Q3 13
$29.5
12.5
0.0
$42.0

Dec
Q4 13
$30.7
13.3
0.0
$44.0

Mar
Q1 14
$32.7
13.4
0.0
$46.1

Jun
Q2 14
$36.3
14.5
2.1
$52.9

Sep
Q3 14
$35.7
15.5
3.4
$54.6

Dec
Q4 14
$35.7
16.5
3.9
$56.1

Mar
Q1 15
$37.6
16.4
4.5
$58.5

Jun
Q2 15
$39.9
18.6
5.5
$64.0

Sep
Q3 15
$42.0
19.8
6.0
$67.8

FY
2012
$90.4
35.6
0.0
$126.0

FY
2013
$115.1
48.0
0.0
$163.1

FY
2014
$140.3
59.9
9.4
$209.6

70.4%
29.6%
0.0%
100.0%

72.0%
28.0%
0.0%
100.0%

70.3%
29.7%
0.0%
100.0%

70.3%
29.7%
0.0%
100.0%

69.8%
30.2%
0.0%
100.0%

71.0%
29.0%
0.0%
100.0%

68.6%
27.4%
4.0%
100.0%

65.3%
28.5%
6.2%
100.0%

63.6%
29.4%
6.9%
100.0%

64.3%
28.0%
7.8%
100.0%

62.4%
29.1%
8.5%
100.0%

61.9%
29.2%
8.9%
100.0%

71.7%
28.3%
0.0%
100.0%

70.5%
29.5%
0.0%
100.0%

66.9%
28.6%
4.5%
100.0%

Revenue Mix (Y/Y)

Protomold
Firstcut
Fineline
Total

24.6%
49.9%
NE
31.1%

23.3%
27.6%
NE
24.5%

30.2%
39.0%
NE
32.7%

25.9%
38.7%
NE
29.4%

29.8%
33.9%
NE
31.0%

21.6%
28.2%
NE
23.5%

29.8%
22.4%
NE
33.0%

20.7%
24.7%
NE
29.9%

16.1%
24.0%
NE
27.3%

15.1%
22.3%
NE
27.0%

10.1%
28.4%
155.6%
21.0%

17.7%
27.6%
79.2%
24.3%

22.0%
43.3%
NE
27.3%

27.3%
34.9%
NE
29.5%

21.9%
24.7%
NE
28.5%

Revenue Mix (Q/Q)

Protomold
Firstcut
Fineline
Total

0.9%
10.5%
NE
3.6%

13.5%
4.9%
NE
11.0%

3.9%
13.3%
NE
6.5%

5.8%
5.5%
NE
5.7%

4.1%
6.7%
NE
4.8%

6.4%
0.5%
NE
4.6%

10.9%
8.2%
NE
14.7%

-1.7%
7.4%
58.0%
3.2%

0.1%
6.2%
15.3%
2.7%

5.4%
-0.8%
17.1%
4.4%

6.2%
13.5%
19.9%
9.3%

5.1%
6.7%
10.7%
6.1%

Y/Y Organic Growth

31.1%

24.5%

32.7%

29.4%

31.0%

23.5%

27.6%

21.9%

18.5%

17.2%

15.3%

24.3%

27.3%

29.5%

22.7%

Revenue Mix ($)

Protomold
Firstcut
Fineline
Total
Revenue Mix (%)
Protomold
Firstcut
Fineline
Total

Proto Labs, Inc.

Current disclosure information for this company can be found at http://www.piperjaffray.com/researchdisclosures.

Page 12 of 17

Proto Labs

Troy Jensen, CFA (612-303-6291)

Troy.D.Jensen@pjc.com
Piper Jaffray

Additional Information
(data in millions)
1/28/2016
Revenue Mix ($)
New Customers
Existing Customers
Total

Dec
Q4 12
$7.2
26.5
$33.6

Mar
Q1 13
$3.1
34.2
$37.3

Jun
Q2 13
$4.9
34.9
$39.7

Sep
Q3 13
$6.7
35.3
$42.0

Dec
Q4 13
$7.9
36.1
$44.0

Mar
Q1 14
$3.2
42.9
$46.1

Jun
Q2 14
$6.0
46.9
$52.9

Sep
Q3 14
$6.9
47.7
$54.6

Dec
Q4 14
$9.5
46.5
$56.1

Revenue Mix (%)

New Customers
Existing Customers
Total

21.3%
78.7%
100.0%

8.2%
91.8%
100.0%

12.3%
87.7%
100.0%

15.9%
84.1%
100.0%

17.9%
82.1%
100.0%

6.9%
93.1%
100.0%

11.3%
88.7%
100.0%

12.6%
87.4%
100.0%

Revenue Mix (Y/Y)

New Customers
Existing Customers
Total

12.0%
37.5%
31.1%

6.1%
26.5%
24.5%

8.3%
37.0%
32.7%

7.8%
34.5%
29.4%

10.2%
36.7%
31.0%

3.8%
25.2%
23.5%

22.5%
34.5%
33.0%

Revenue Mix (Q/Q)

New Customers
Existing Customers
Total

15.6%
0.7%
3.6%

-57.0%
29.4%
11.0%

58.3%
1.9%
6.5%

37.1%
1.3%
5.7%

18.1%
2.3%
4.8%

-59.5%
18.6%
4.6%

Existing Customers (YTD)

Incremental additions
Y/Y Growth
Q/Q Growth

4,763
369
38.9%
8.4%

3,528
-1,235
20.4%
-25.9%

4,644
1,116
20.6%
31.6%

5,315
671
21.0%
14.4%

5,734
419
20.4%
7.9%

New Customers (YTD)

Y/Y Growth
Q/Q Growth

2,991
15.1%
32.9%

710
-5.7%
-76.3%

1,435
-4.3%
102.1%

2,261
0.4%
57.6%

Unique Product Developers

Y/Y Growth
Q/Q Growth

6,043
26.3%
1.9%

6,488
20.8%
7.4%

6,885
22.4%
6.1%

7,308
23.3%
6.1%

Proto Labs, Inc.

Mar
Q1 15

Jun
Q2 15

Sep
Q3 15

FY
2012
$20.8
105.2
$126.0

FY
2013
$22.5
140.6
$163.1

FY
2014
$25.6
184.0
$209.6

$58.5

$64.0

$67.8

17.0%
83.0%
100.0%

16.5%
83.5%
100.0%

13.8%
86.2%
100.0%

12.2%
87.8%
100.0%

3.0%
35.0%
29.9%

20.8%
28.7%
27.3%

12.6%
30.7%
27.3%

8.5%
33.6%
29.5%

13.6%
30.9%
28.5%

86.9%
9.4%
14.7%

15.3%
1.7%
3.2%

38.6%
-2.4%
2.7%

4,325
-1,409
22.6%
-24.6%

5,366
1,041
15.5%
24.1%

6,154
788
15.8%
14.7%

6,719
565
17.2%
9.2%

4,763
1,333
38.9%

5,734
971
20.4%

6,719
985
17.2%

3,027
1.2%
33.9%

559
-21.3%
-81.5%

1,659
15.6%
196.8%

2,564
13.4%
54.6%

3,425
13.1%
33.6%

2,991
15.1%

3,027
1.2%

3,425
13.1%

7,290
20.6%
-0.2%

7,669
18.2%
5.2%

8,222
19.4%
7.2%

8,680
18.8%
5.6%

8,773
20.3%
1.1%

11,009
43.6%
25.5%

11,822
43.8%
7.4%

12,541
44.5%
6.1%

Page 13 of 17

Proto Labs

Troy Jensen, CFA (612-303-6291)

Troy.D.Jensen@pjc.com
Piper Jaffray

Additional Information
(data in millions)
1/28/2016
Dec
Q4 12
$26.0
6.2
1.4
$33.6

Mar
Q1 13
$29.5
6.5
1.3
$37.3

Jun
Q2 13
$31.6
6.8
1.3
$39.7

Sep
Q3 13
$31.9
8.6
1.6
$42.0

Dec
Q4 13
$32.8
9.7
1.6
$44.0

Mar
Q1 14
$35.0
9.2
1.9
$46.1

Jun
Q2 14
$42.4
9.0
1.4
$52.9

Sep
Q3 14
$43.4
9.3
1.9
$54.6

Dec
Q4 14
$44.3
10.0
1.8
$56.1

Mar
Q1 15
$47.4
8.8
2.3
$58.5

Jun
Q2 15
$52.3
10.1
1.6
$64.0

Sep
Q3 15
$54.4
11.3
2.1
$67.8

FY
2012
$98.7
22.5
4.8
$126.0

FY
2013
$125.7
31.5
5.9
$163.1

FY
2014
$165.1
37.5
7.0
$209.6

77.4%
18.5%
4.2%
100.0%

79.1%
17.3%
3.6%
100.0%

79.5%
17.2%
3.3%
100.0%

75.9%
20.4%
3.8%
100.0%

74.4%
21.9%
3.6%
100.0%

75.9%
20.0%
4.1%
100.0%

80.3%
17.0%
2.7%
100.0%

79.5%
17.1%
3.4%
100.0%

79.1%
17.8%
3.1%
100.0%

81.0%
15.0%
4.0%
100.0%

81.7%
15.8%
2.5%
100.0%

80.2%
16.7%
3.1%
100.0%

78.3%
17.9%
3.8%
100.0%

77.1%
19.3%
3.6%
100.0%

78.8%
17.9%
3.3%
100.0%

Geographic Mix (Y/Y)

United States
Europe
Asia
Total

36.0%
12.7%
39.5%
31.1%

27.5%
18.0%
-0.7%
24.5%

32.0%
35.3%
37.3%
32.7%

24.6%
48.3%
44.2%
29.4%

26.1%
55.4%
14.9%
31.0%

18.6%
42.4%
39.7%
23.5%

34.3%
31.4%
9.9%
33.0%

36.1%
9.1%
18.3%
29.9%

35.2%
3.3%
10.1%
27.3%

35.6%
-4.6%
23.4%
27.0%

23.2%
12.2%
11.7%
21.0%

25.5%
21.0%
13.8%
24.3%

28.7%
15.8%
68.8%
27.3%

27.4%
40.0%
21.7%
29.5%

31.3%
19.0%
19.1%
28.5%

Geographic Mix (Q/Q)

United States
Europe
Asia
Total

1.7%
7.6%
26.8%
3.6%

13.4%
4.1%
-3.4%
11.0%

7.1%
5.8%
-2.4%
6.5%

0.9%
25.1%
20.6%
5.7%

2.9%
12.8%
1.0%
4.8%

6.7%
-4.6%
17.5%
4.6%

21.3%
-2.4%
-23.2%
14.7%

2.2%
3.9%
29.8%
3.2%

2.2%
6.8%
-6.0%
2.7%

7.0%
-11.9%
31.7%
4.4%

10.2%
14.8%
-30.5%
9.3%

4.1%
12.0%
32.2%
6.1%

Geographic Mix ($)

United States
Europe
Asia
Total
Geographic Mix (%)
United States
Europe
Asia
Total

Proto Labs, Inc.

Current disclosure information for this company can be found at http://www.piperjaffray.com/researchdisclosures.

Page 14 of 17

Proto Labs

Troy Jensen, CFA (612-303-6291)

Troy.D.Jensen@pjc.com
Piper Jaffray

5-Year Forecast
(data in millions, except per share)
1/28/2016
Fiscal Year Ending
2014
$209.6
80.8
$128.8

2015E
$262.3
107.8
$154.5

2016E
$322.5
134.2
$188.4

2017E
$393.5
157.3
$236.2

2018E
$482.1
192.7
$289.3

2019E
$590.5
236.1
$354.4

Sales and Marketing

Research and Development
General and Administrative
Operating Income

$28.0
15.6
19.4
$65.8

$38.3
17.2
24.4
$74.6

$43.0
19.9
30.4
$95.0

$53.4
23.6
36.0
$123.2

$64.4
28.4
43.6
$152.9

$77.7
34.2
52.8
$189.6

Other Income (Expense)

Pretax Income
Taxes
Net Income

$0.0
65.8
20.6
$45.2

$0.3
74.9
23.9
$51.0

$0.0
95.1
30.4
$64.7

$0.0
123.3
39.4
$83.8

$0.0
152.9
48.9
$104.0

$0.0
189.6
60.7
$129.0

Pro-Forma EPS
Shares Outstanding

$1.73
26.1

$1.94
26.4

$2.39
27.1

$3.01
27.9

$3.62
28.7

$4.37
29.5

Margin Analysis
Gross Margin
Sales and Marketing
Research and Development
General and Administrative
Operating Margin
Tax Rate
Net Income

61.4%
13.4%
7.4%
9.2%
31.4%
31.3%
21.6%

58.9%
14.6%
6.5%
9.3%
28.4%
31.9%
19.5%

58.4%
13.3%
6.2%
9.4%
29.5%
32.0%
20.0%

60.0%
13.6%
6.0%
9.1%
31.3%
32.0%
21.3%

60.0%
13.4%
5.9%
9.0%
31.7%
32.0%
21.6%

60.0%
13.2%
5.8%
8.9%
32.1%
32.0%
21.8%

25.2%
13.3%
12.8%

23.0%
27.4%
26.7%

22.0%
29.6%
29.6%

22.5%
24.1%
24.0%

22.5%
24.0%
24.0%

Revenues
Cost of Goods Sold
Gross Profits

Year/Year % Change
Revenue
Operating Income
Net Income

Proto Labs, Inc.

Page 15 of 17

COMPANY NOTE
January 28, 2016

IMPORTANT RESEARCH DISCLOSURES

Notes: The boxes on the Rating and Price Target History chart above indicate the date of the fundamental Equity Research Note, the rating and
the price target. Each box represents a date on which an analyst made a change to a rating or price target, except for the first box, which may only
represent the first Note written during the past three years.
Legend:
I: Initiating Coverage
R: Resuming Coverage
T: Transferring Coverage
D: Discontinuing Coverage
S: Suspending Coverage
OW: Overweight
N: Neutral
UW: Underweight
NA: Not Available
UR: Under Review
Distribution of Ratings/IB Services
Piper Jaffray
IB Serv./Past 12 Mos.
Rating

Count

Percent

Count

Percent

BUY [OW]

413

59.68

98

23.73

HOLD [N]

265

38.29

12

4.53

14

2.02

7.14

SELL [UW]

Note: Distribution of Ratings/IB Services shows the number of companies currently covered by fundamental equity research in each rating category
from which Piper Jaffray and its affiliates received compensation for investment banking services within the past 12 months. FINRA rules require
disclosure of which ratings most closely correspond with "buy," "hold," and "sell" recommendations. Piper Jaffray ratings are not the equivalent of
buy, hold or sell, but instead represent recommended relative weightings. Nevertheless, Overweight corresponds most closely with buy, Neutral with
hold and Underweight with sell. See Stock Rating definitions below.

Analyst Certification Troy D. Jensen, CFA, Sr Research Analyst

The views expressed in this report accurately reflect my personal views about the subject company and the subject security. In addition, no part of
my compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this report.

Proto Labs, Inc.

Page 16 of 17

COMPANY NOTE
January 28, 2016

Research Disclosures
Piper Jaffray was making a market in the securities of Proto Labs, Inc. at the time this research report was published. Piper Jaffray will buy and sell
Proto Labs, Inc. securities on a principal basis.
Piper Jaffray has received compensation for non-investment banking services from or has had a client relationship with Proto Labs, Inc. in the past
12 months.
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Copyright 2016 Piper Jaffray. All rights reserved.

Proto Labs, Inc.

Page 17 of 17