A Minneapolis digital manufacturing company that processes all transactions through B2B ecommerce recorded a flat first quarter. But in the wake of flat sales, Proto Labs Inc. says it’s making progress in some areas of operation.
“Macro conditions caused our longer lead time, lower-priced offerings to grow faster than expected early in the year, and demand for our quick-turn business was lower than expected, impacting profitability,” CEO Rob Bodor told analysts on the company’s latest earnings call. “Improving our profitability is dependent on increased volume and a higher mix of higher-priced quick-turn business, which has proven difficult in the current environment.”
Protolabs sales
For the first quarter ended March 31, Protolabs’ sales were $125.9 million. That’s up slightly from $124.2 million in the first quarter of 2022. Net income for the quarter was $2.7 million compared with $5.09 million in the prior year. Protolabs 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.
“We are taking direct actions to reduce costs in areas with lower demand while continuing to invest in high-growth areas. And due to the continued demand softness in our sheet metal service, we furloughed 25% of our sheet metal workforce in the second quarter,” Bodor told analysts. “We have made thoughtful reductions in other areas of the business as well to align with sales volumes. We continue to evaluate the business and reprioritize investments in our focus areas to support growth.”
Hubs offers digital manufacturing services through an international network of hundreds of manufacturers and processes orders online. Protolabs acquired Amsterdam-based Hubs in 2021 for $280 million.
Protolabs’ current services include:
- Injection molding
- 3D printing
- Sheet metal
- CNC machining
CNC machining is a manufacturing process in which pre-programmed applications dictate the movement of factory tools and machinery. The process enables three-dimensional cutting tasks to be accomplished in a single set of prompts.
“During the first quarter, we also continued to accelerate our innovation pipeline, with multiple new launches to expand our customer offerings, capture additional share of wallet, and gain new customers,” Bodor told analysts. “On the top line, we outperformed our expectations in two main areas: a strong start of the year in our European operations and continued strength in demand through our Hubs digital manufacturing partner network. Strong first quarter performance in Europe was driven by greater-than-anticipated demand in January and February, driven, in part, by large orders from key customers.”
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