Protolabs says global macroeconomic headwinds slowed customer activity

Global-manufacturing activity slowed in the fourth quarter, dampening the fourth-quarter earnings of Protolabs Inc.

Shares were down more than 12% Thursday on the news.

Maple Plain-based Protolabs is an e-commerce driven manufacturer that utilizes 3-D and CNC machining and injection molding to rapidly produce prototypes or short-run production pieces.

The company said its annual revenue grew 2.9% to $459 million, but its fourth-quarter revenue was down 0.8% to $112 million.

"Macroeconomic headwinds across various industries and all the geographies we operate in have resulted in less activity from our customers in 2019," said Vicki Holt, president and CEO of Protolabs, on the company's earnings call with analysts.

She added the fourth quarter didn't get a boost from companies who might have otherwise rushed to finish projects by the end of the year.

Protolabs is accustomed to double-digit annual revenue growth rates. The full-year results were the slowest growth since the recession in 2009.

The company earned $15.2 million in the quarter, or 56 cents per share, compared with $19.3 million, or 71 cents per share, in the fourth quarter last year.

For the full-year 2019 the company's EPS was $2.35 per share, down 16% from the $2.81 EPS in 2018.

Holt announced a new initiative being rolled out in the second half of 2020. She called it Protolabs 2.0, a re-engineering of their e-commerce systems to make it easier for customers to order multiple parts and different services while also shoring up the back-end systems to accept and manage customer projects.

The new strategy is expected to support Protolabs and its customers for the next decade and would help Holt deliver on her long-term goal of growing Protolabs to $1 billion in annual revenue.

The company's shares closed at $99.02 per share, down $14.03 per share. Over the last 52 weeks, shares have traded between $88.75 and $119.98 per share.

Patrick Kennedy • 612-673-7926