Proto Labs(US:PRLB)2024-02-16 18:50Financial Performance - Revenue for the year ended December 31, 2023, was $503.877 million, an increase of 3.0% compared to $488.398 million in 2022[273]. - Gross profit for 2023 was $221.993 million, up from $215.465 million in 2022, reflecting a gross margin of approximately 44.0%[273]. - Net income for 2023 was $17.220 million, compared to a net loss of $103.462 million in 2022, resulting in a net income per share of $0.66[273]. - The company reported a comprehensive income of $23.562 million for 2023, compared to a comprehensive loss of $121.000 million in 2022[273]. - Total current assets increased to $200.660 million in 2023 from $186.568 million in 2022, primarily driven by an increase in cash and cash equivalents[271]. - Total liabilities decreased significantly to $77.058 million in 2023 from $104.520 million in 2022, indicating improved financial health[271]. - Shareholders' equity remained stable at $695.295 million in 2023, slightly down from $697.648 million in 2022[271]. - Operating expenses for 2023 totaled $193.826 million, a decrease from $313.448 million in 2022, largely due to the absence of goodwill impairment charges[273]. - Net cash provided by operating activities increased to $73.27 million in 2023, up from $62.08 million in 2022, reflecting a 17.5% growth[279]. - Cash and cash equivalents increased to $83.790 million in 2023 from $56.558 million in 2022, reflecting improved liquidity[271]. Research and Development - Research and development costs were approximately $40.1 million, $38.2 million, and $44.2 million for the years ended December 31, 2023, 2022, and 2021, respectively[105]. - Research and development expenses for 2023 were approximately $40.1 million, compared to $38.2 million in 2022, reflecting a 5.0% increase[308]. Market and Competitive Factors - The company emphasizes the importance of quick turnaround times for custom parts to meet customer expectations, which is critical for business performance[106]. - Competitive pricing is a significant factor in demand for the company's product lines, and any failure to meet price expectations could negatively impact revenue[107]. - The ability to meet specific quality specifications is crucial for maintaining demand for the company's products, and failure in this area could adversely affect operations[108]. - The volume of new part designs processed and the diversity of the customer base are essential for identifying business opportunities and meeting customer needs[110]. Risks and Challenges - The company faces risks related to the loss of key management personnel, which could disrupt operations and hinder business growth[111]. - Supply chain risks exist due to reliance on single or limited source suppliers, which could adversely affect customer relationships and financial condition[112]. - The company may face challenges in protecting its intellectual property, which is critical for maintaining a competitive position in the market[114]. - Fluctuations in operating results and financial condition may occur on a quarterly and annual basis, impacting stock market performance[124]. - The company is subject to payment-related risks, including potential increases in interchange fees that could lower profitability[128]. - The company has not used forward contracts or currency borrowings to hedge foreign currency risk, which could materially impact results of operations[241]. Stock and Dividends - The company has never declared or paid any cash dividends and does not anticipate doing so in the foreseeable future[135]. - The common stock traded between $40.47 and $23.01 during the year ended December 31, 2023, indicating significant volatility[129]. - The company’s stock price may decline if analysts publish unfavorable research or downgrade the stock[131]. Compliance and Internal Controls - The company’s internal controls over financial reporting must comply with the Sarbanes-Oxley Act, and failure to do so could harm the business and stock price[132]. - The company maintained effective internal control over financial reporting as of December 31, 2023, according to the COSO criteria[262]. International Operations - The company recognized a foreign currency translation loss of $3.9 million related to the closure of its Japan business during the year ended December 31, 2023[241]. - The company has ceased operations in Japan as of December 2023, following the closure of its manufacturing facility in May 2022[283]. Investments and Assets - The company’s investment policy focuses on capital preservation and liquidity, maintaining a portfolio of debt securities with maturities ranging from one to three years[238]. - Total long-lived assets decreased to $253.7 million as of December 31, 2023, from $257.8 million in 2022[378]. - Expenditures for additions to long-lived assets totaled $28.1 million in 2023, compared to $21.7 million in 2022[378]. Taxation - The company recorded an income tax provision of $10.7 million for the year ended December 31, 2023, with an effective income tax rate of 38.4%[365]. - The effective tax rate increased to 38.4% for the year ended December 31, 2023, compared to a negative 5.7% in 2022, primarily due to the impact of goodwill impairment and a shift from a loss to income position[366][367].