Proto Labs (PRLB) 8-K Proto Labs Reports Record Revenue and Net Income for the Third Quarter 2013 and Announces 2014 CEO Transition Plan

Exhibit 99.1

Proto Labs Reports Record Revenue and Net Income for the Third Quarter 2013 and Announces 2014 CEO Transition Plan

Quarterly Revenue Increases 29% Year over Year to $42.0 Million

Quarterly Net Income Increases 32% Year over Year to $8.9 Million

MAPLE PLAIN, Minn.—October 31, 2013— Proto Labs, Inc. (NYSE: PRLB), a leading online and technology-enabled quick-turn manufacturer, today announced record financial results for the third quarter ended September 30, 2013.

Highlights include:

• Revenue for the third quarter of 2013 increased to a record $42.0 million, 29 percent above revenue of $32.5 million in the third quarter of 2012.

• The record quarterly revenue was achieved through a 23 percent increase in the number of product developers served, combined with an increase of 5 percent in spending per product developer.

• Net income for the third quarter of 2013 increased to a record $8.9 million, or $0.34 per diluted share. Non-GAAP net income, excluding the after tax expense of stock compensation, was $9.5 million, or $0.37 per diluted share. See “Non-GAAP Financial Measure” below.

“Our world-wide marketing and sales efforts led to a record number of product developers selecting Proto Labs to help them accelerate their ideas to markets. This resulted in record revenue globally and in each of our geographic markets. As we prepare to roll out additional services over the next few quarters, we remain confident that our ability to offer solutions to product developers will continue to drive our business forward,” said Proto Labs’ President and CEO Brad Cleveland.

Additional highlights include:

• Gross margin was 61.8 percent of revenue in the third quarter of 2013 compared with 60.7 percent during the same quarter in 2012.

• During the third quarter of 2013, spending on research and development, including the Protoworks initiatives, totaled $3.0 million, or 7.2 percent of revenue. This compares to $2.6 million, or 7.9 percent of revenue during the third quarter of 2012.

• Operating margin was 31.9 percent of revenue during the third quarter of 2013 compared to 29.5 percent in the third quarter of 2012.

• As measured on a year to date basis, cash generated from operations totaled $34.9 million and expenditures on capital equipment were $13.0 million.

Proto Labs also announced that CEO Brad Cleveland has notified the Board of Directors of his intent to resign once the Company has found a new CEO capable of leading the company’s continued growth.

“I feel very fortunate to be a part of this successful organization and I am grateful to have worked with so many talented people through the years. I’ve been the CEO from $1 million in revenue until today. I’ve thoroughly enjoyed the experience and would welcome the chance to someday do it all over again in another industry. I am confident that in the coming months we will recruit an excellent executive with the experience required to lead Proto Labs to even greater levels of success. I look forward to staying with the company through the entire leadership transition period,” concluded Mr. Cleveland.

Non-GAAP Financial Measure

The company has included non-GAAP net income, adjusted for stock-based compensation expense in this press release to provide investors with additional information regarding the company’s financial results. The company has provided below a reconciliation of non-GAAP net income, adjusted for stock-based compensation expense, to net income, the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP net income, adjusted for stock-based compensation expense, is used by the company’s management and board of directors to understand and evaluate operating performance and trends and provides a useful measure for period-to-period comparisons of the company’s business. Accordingly, the company believes that non-GAAP net income, adjusted for stock-based compensation expense, provides useful information to investors and others in understanding and evaluating operating results in the same manner as our management and board of directors.

Conference Call

The company has scheduled a conference call to discuss its third quarter financial results today, October 31 at 8:30 a.m. ET. To access the call in the U.S. please dial 877-415-3184. Outside the U.S. please dial 857-244-7327. Use participant code 58246380#. A simultaneous webcast of the call will also be available on the investor relations section of the company’s website at www.protolabs.com/investors. An audio replay will be available for 14 days following the call on the investor relations website of Proto Lab’s website.

About Proto Labs, Inc.

Proto Labs is a leading online and technology-enabled quick-turn manufacturer of custom parts for prototyping and short-run production. Proto Labs provides “Real Parts, Really Fast” to product developers worldwide. Proto Labs utilizes computer numerical control (CNC) machining and injection molding to manufacture custom parts for our customers. For more information, visit protolabs.com.

Forward-Looking Statements

Statements contained in this press release regarding matters that are not historical or current facts are “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors which may cause the results of Proto Labs to be materially different than those expressed or implied in such statements. Certain of these risk factors and others are described in the “Risk Factors” section within reports filed with the SEC. Other unknown or unpredictable factors also could have material adverse effects on Proto Labs’ future results. The forward-looking statements included in this press release are made only as of the date hereof. Proto Labs cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Proto Labs expressly disclaims any intent or obligation to update any forward-looking statements to reflect subsequent events or circumstances.

Contacts:

Investor Relations:

Jack Judd, 763-479-7408

jack.judd@protolabs.com

Media Relations:

Bill Dietrick, 763-479-7664

bill.dietrick@protolabs.com

Proto Labs, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

	September 30,		December 31,
	2013		2012
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	39,382	$	36,759
Short-term marketable securities		33,647		25,137
Accounts receivable, net		18,016		15,791
Inventory		4,966		4,619
Other current assets		8,302		7,850
Total current assets		104,313		90,156
Property and equipment, net		52,378		45,316
Long-term marketable securities		59,441		36,965
Other long-term assets		247		285
Total assets	$	216,379	$	172,722
Liabilities and shareholders’ equity
Current liabilities
Accounts payable	$	6,340	$	4,758
Accrued compensation		6,848		5,995
Accrued liabilities and other		1,149		513
Current portion of long-term debt obligations		195		273
Total current liabilities		14,532		11,539
Deferred tax liabilities		3,345		3,346
Long-term debt obligations		206		356
Other long-term liabilities		699		782
Shareholders’ equity		197,597		156,699
Total liabilities and shareholders’ equity	$	216,379	$	172,722

Proto Labs, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share amounts)

(Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Revenues
Protomold	$	29,534	$	23,458	$	84,338	$	66,697
Firstcut		12,474		8,996		34,732		25,678
Total revenues		42,008		32,454		119,070		92,375
Cost of revenues		16,053		12,760		44,983		37,242
Gross profit		25,955		19,694		74,087		55,133
Operating expenses
Marketing and sales		5,409		4,442		16,222		13,440
Research and development		3,026		2,561		8,405		6,622
General and administrative		4,118		3,118		12,035		10,394
Total operating expenses		12,553		10,121		36,662		30,456
Income from operations		13,402		9,573		37,425		24,677
Other income (expense), net		31		314		149		(90	)
Income before income taxes		13,433		9,887		37,574		24,587
Provision for income taxes		4,561		3,185		11,804		7,957
Net income	$	8,872	$	6,702	$	25,770	$	16,630
Net income per share:
Basic	$	0.35	$	0.28	$	1.03	$	0.72
Diluted	$	0.34	$	0.26	$	1.00	$	0.68
Shares used to compute net income per share:
Basic		25,384,940		24,052,409		25,121,941		22,975,950
Diluted		26,002,240		25,312,643		25,794,950		24,356,785

Proto Labs, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine Months Ended
	September 30,
	2013			2012
Operating activities
Net income	$	25,770		$	16,630
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,528			4,380
Stock-based compensation expense		2,595			2,362
Deferred taxes		(61	)		—
Excess tax benefit from stock-based compensation		(8,198	)		(2,635	)
Amortization of held-to-maturity securities		1,007			173
Loss on disposal of property and equipment		111			—
Changes in operating assets and liabilities:		8,148			(1,476	)
Net cash provided by operating activities		34,900			19,434
Investing activities
Purchases of property and equipment		(12,976	)		(14,435	)
Purchases of marketable securities		(82,657	)		(61,568	)
Proceeds from maturities of marketable securities		50,663			10,290
Net cash used in investing activities		(44,970	)		(65,713	)
Financing activities
Proceeds from initial public offering, net of offering costs		—			71,530
Payments on debt		(211	)		(289	)
Proceeds from exercises of warrants and stock options		4,635			728
Excess tax benefit from stock-based compensation		8,198			2,635
Net cash provided by financing activities		12,622			74,604
Effect of exchange rate changes on cash and cash equivalents		71			(170	)
Net increase in cash and cash equivalents		2,623			28,155
Cash and cash equivalents, beginning of period		36,759			8,135
Cash and cash equivalents, end of period	$	39,382		$	36,290

Proto Labs, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measure

(In thousands, except share and per share amounts)

(Unaudited)

	Three Months Ended			Nine Months Ended
	September 30, 2013			September 30, 2013
Non-GAAP net income, adjusted for stock-based compensation expense:
GAAP net income	$	8,872		$	25,770
Add back: Stock-based compensation expense
Cost of revenue		89			233
Marketing and sales		154			455
Research and development		201			555
General and administrative		415			1,352
Total stock-based compensation expense		859			2,595
Less: Tax benefit on stock-based compensation		(216	)		(624	)
Non-GAAP net income	$	9,515		$	27,741
Non-GAAP net income per share:
Basic	$	0.37		$	1.10
Diluted	$	0.37		$	1.08
Shares used to compute non-GAAP net income per share:
Basic		25,384,940			25,121,941
Diluted		26,002,240			25,794,950

Proto Labs, Inc.

Revenue by Geography—Based on Shipping Location

(In thousands)

(Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Revenues
Domestic
United States	$	30,561	$	24,807	$	88,816	$	69,887
International
Europe		8,556		5,771		21,860		16,305
Japan		1,588		1,101		4,253		3,418
United States		1,303		775		4,141		2,765
Total international		11,447		7,647		30,254		22,488
Total revenue	$	42,008	$	32,454	$	119,070	$	92,375

Proto Labs, Inc.

Customer Information

(In thousands, except customer amounts)

(Unaudited)

	Nine Months Ended September 30,
	2013				2012
	Number of Customers		Revenue ($)		Number of Customers		Revenue ($)
New customers		2,261	$	14,636		2,251	$	13,564
Existing customers		5,315		104,434		4,394		78,811
Total		7,576	$	119,070		6,645	$	92,375

Proto Labs, Inc.

Product Developer Information

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Unique product developers served		7,308		5,928		13,421		11,126