Proto Labs (PRLB) 10-Q 6 Aug 15 2015 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Jul. 30, 2015
Entity Registrant Name	Proto Labs Inc
Entity Central Index Key	1,443,669
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		26,136,434
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Amendment Flag	false

Consolidated Balance Sheets (Cu

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Current assets
Cash and cash equivalents	$ 56,324	$ 43,329
Short-term marketable securities	31,190	30,706
Accounts receivable, net of allowance for doubtful accounts of $150 and $198 as of June 30, 2015 and December 31, 2014, respectively	29,493	24,226
Inventory	6,828	6,194
Prepaid expenses and other current assets	3,935	$ 3,406
Income taxes receivable	2,931
Deferred tax assets	464	$ 483
Total current assets	131,165	108,344
Property and equipment, net	100,921	91,626
Goodwill	28,916	28,916
Other intangible assets, net	3,710	4,083
Long-term marketable securities	54,482	54,318
Other long-term assets	197	227
Total assets	319,391	287,514
Current liabilities
Accounts payable	11,334	7,882
Accrued compensation	8,264	6,067
Accrued liabilities and other	$ 1,779	2,718
Income taxes payable		1,953
Current portion of long-term debt obligations	$ 71	139
Total current liabilities	21,448	18,759
Long-term deferred tax liabilities	$ 2,423	1,846
Long-term debt obligations		10
Other long-term liabilities	$ 1,533	1,360
Total liabilities	$ 25,404	$ 21,975
Shareholders' equity
Preferred stock, $0.001 par value, authorized 10,000,000 shares; issued and outstanding 0 shares as of each of June 30, 2015 and December 31, 2014
Common stock, $0.001 par value, authorized 150,000,000 shares; issued and outstanding 25,953,735 and 25,838,110 shares as of June 30, 2015 and December 31, 2014, respectively	$ 26	$ 26
Additional paid-in capital	187,070	180,960
Retained earnings	109,621	87,482
Accumulated other comprehensive loss	(2,730)	(2,929)
Total shareholders' equity	293,987	265,539
Total liabilities and shareholders' equity	$ 319,391	$ 287,514

Consolidated Balance Sheets (C3

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Allowance for doubtful accounts	$ 150	$ 198
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, shares issued (in shares)	25,953,735	25,838,110
Common stock, shares outstanding (in shares)	25,953,735	25,838,110

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Statements of Operations:
Revenue	$ 63,969	$ 52,866	$ 122,505	$ 98,940
Cost of revenue	26,419	20,183	49,701	37,233
Gross profit	37,550	32,683	72,804	61,707
Operating expenses
Marketing and sales	9,502	7,261	18,356	13,678
Research and development	4,397	3,914	8,711	7,370
General and administrative	6,304	5,534	12,549	10,237
Total operating expenses	20,203	16,709	39,616	31,285
Income from operations	17,347	15,974	33,188	30,422
Other income (expense), net	(36)	(66)	(493)	37
Income before income taxes	17,311	15,908	32,695	30,459
Provision for income taxes	5,625	4,952	10,556	9,401
Net income	$ 11,686	$ 10,956	$ 22,139	$ 21,058
Net income per share:
Basic (in dollars per share)	$ 0.45	$ 0.43	$ 0.86	$ 0.82
Diluted (in dollars per share)	$ 0.44	$ 0.42	$ 0.84	$ 0.81
Shares used to compute net income per share:
Basic (in shares)	25,921,111	25,620,005	25,885,888	25,597,055
Diluted (in shares)	26,277,503	26,146,848	26,245,135	26,132,265
Comprehensive Income (net of tax)
Comprehensive income	$ 12,960	$ 11,488	$ 22,338	$ 21,762

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Operating activities
Net income	$ 22,139	$ 21,058
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	6,940	4,683
Stock-based compensation expense	2,909	2,248
Deferred taxes	620	107
Excess tax benefit from stock-based compensation	(989)	(1,623)
Amortization of held-to-maturity securities	632	854
Changes in operating assets and liabilities:
Accounts receivable	(5,219)	(5,742)
Inventories	(663)	(306)
Prepaid expenses and other	(469)	(372)
Income taxes	(3,687)	2,431
Accounts payable	3,377	5,143
Accrued liabilities and other	2,243	(2,464)
Net cash provided by operating activities	27,833	26,017
Investing activities
Purchases of property and equipment	$ (15,717)	(31,625)
Acquisitions, net of cash acquired		(33,864)
Purchases of marketable securities	$ (25,389)	(38,463)
Proceeds from sales and maturities of marketable securities	24,109	55,441
Net cash used in investing activities	(16,997)	(48,511)
Financing activities
Payments on debt	(77)	(954)
Acquisition-related contingent consideration	(1,000)	(400)
Proceeds from exercises of stock options and other	2,207	1,806
Excess tax benefit from stock-based compensation	989	1,623
Net cash provided by financing activities	2,119	2,075
Effect of exchange rate changes on cash and cash equivalents	40	234
Net increase (decrease) in cash and cash equivalents	12,995	(20,185)
Cash and cash equivalents, beginning of period	43,329	43,039
Cash and cash equivalents, end of period	$ 56,324	$ 22,854

Note 1 - Basis of Presentation

Note 1 - Basis of Presentation	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	Note 1 – Basis of Presentation The unaudited interim Consolidated Financial Statements of Proto Labs, Inc. (Proto Labs, the Company, we, us or our) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. These statements are unaudited but, in the opinion of management, reflect all adjustments necessary for a fair presentation of the Company’s statement of financial position, results of operations and cash flows for the periods presented. Except as otherwise disclosed herein, these adjustments consist of normal, recurring items. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. On April 23, 2014, the Company completed the acquisition of FineLine Prototyping, Inc. (FineLine). The operations of FineLine have been integrated into the operations of the Company and operating results beginning April 23, 2014 are included in the consolidated results under the Fineline product line. The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. For further information, refer to the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 as filed with the Securities and Exchange Commission (SEC) on February 27, 2015. The accompanying Consolidated Balance Sheet as of December 31, 2014 was derived from the audited Consolidated Financial Statements but does not include all disclosures required by U.S. GAAP for a full set of financial statements. This Form 10-Q should be read in conjunction with the Company’s Consolidated Financial Statements and Notes included in the Annual Report on Form 10-K filed on February 27, 2015 as referenced above.

Note 2 - Recent Accounting Pron

Note 2 - Recent Accounting Pronouncements	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]	Note 2 – Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue from the transfer of goods or services to customers in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. The Company is required to adopt the new pronouncement using one of two retrospective application methods. On July 9, 2015, the FASB voted to approve a one-year deferral of the effective date of ASU 2014-09 by one year to December 15, 2017 for annual reporting periods beginning after that date. The Company is evaluating the application method and the impact of this new standard on our financial statements, but does not expect the impact to be material.

Note 3 - Net Income per Common

Note 3 - Net Income per Common Share	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Earnings Per Share [Text Block]	Note 3 – Net Income per Common Share Basic net income per share is computed based on the weighted-average number of common shares outstanding. Diluted net income per share is computed based on the weighted-average number of common shares outstanding, increased by the number of additional shares that would have been outstanding had potentially dilutive common shares been issued and reduced by the number of shares the Company could have repurchased from the proceeds from issuance of the potentially dilutive shares. Potentially dilutive shares of common stock include stock options, restricted stock units and restricted stock awards granted under stock-based compensation plans and shares committed to be purchased under the employee stock purchase plan. The table below sets forth the computation of basic and diluted net income per share: Three Months Ended Six Months Ended June 30, June 30, (in thousands, except share and per share amounts) 2015 2014 2015 2014 Net income $ 11,686 $ 10,956 $ 22,139 $ 21,058 Basic - weighted-average shares outstanding: 25,921,111 25,620,005 25,885,888 25,597,055 Effect of dilutive securities: Employee stock options and other 356,392 526,843 359,247 535,210 Diluted - weighted-average shares outstanding: 26,277,503 26,146,848 26,245,135 26,132,265 Net income per share: Basic $ 0.45 $ 0.43 $ 0.86 $ 0.82 Diluted $ 0.44 $ 0.42 $ 0.84 $ 0.81

Note 4 - Goodwill and Other Int

Note 4 - Goodwill and Other Intangible Assets	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Goodwill and Intangible Assets Disclosure [Text Block]	Note 4 – Goodwill and Other Intangible Assets The changes in the carrying amount of Goodwill during the six months ended June 30, 2015 were as follows: (in thousands) Six Months Ended June 30, 2015 Balance as of the beginning of the period $ 28,916 Goodwill acquired during the period - Balance as of the end of the period $ 28,916 Intangible assets other than Goodwill at June 30, 2015 and December 31, 2014 were as follows: June 30, 2015 December 31, 2014 Useful Weighted Average Accumulated Accumulated Life Useful Life (in thousands) Gross Amortization Net Gross Amortization Net (in years) Remaining (in years) Intangible Assets with finite lives: Marketing assets $ 930 $ (109 ) $ 821 $ 930 $ (62 ) $ 868 10.0 8.8 Non-compete agreement 190 (111 ) 79 190 (63 ) 127 2.0 0.8 Trade secrets 250 (58 ) 192 250 (33 ) 217 5.0 3.8 Internally developed software 680 (264 ) 416 680 (151 ) 529 3.0 1.8 Customer relationships 2,530 (328 ) 2,202 2,530 (188 ) 2,342 9.0 7.8 Total intangible assets $ 4,580 $ (870 ) $ 3,710 $ 4,580 $ (497 ) $ 4,083 Amortization expense for intangible assets for the three and six months ended June 30, 2015 was $0.2 million and $0.4 million, respectively. Amortization expense for intangible assets, which were acquired in the purchase of FineLine in April 2014, was $0.1 million for each of the three and six months ended June 30, 2014. Estimated aggregated amortization expense based on the current carrying value of the amortizable intangible assets is as follows: (in thousands) Estimated Amortization Expense Remaining 2015 $ 373 2016 682 2017 500 2018 424 2019 391 Thereafter 1,340 Total estimated amortization expense $ 3,710

Note 5 - Fair Value Measurement

Note 5 - Fair Value Measurements	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Fair Value Disclosures [Text Block]	Note 5 – Fair Value Measurements ASC 820, Fair Value Measuremen Level 1 Level 2 Level 3 The Company’s cash consists of bank deposits. The Company’s cash equivalents measured at fair value consist of money market mutual funds. The Company determines the fair value of these investments using Level 1 inputs. A summary of financial assets as of June 30 , 2015 and December 31, 2014 measured at fair value on a recurring basis follows: June 30, 2015 December 31, 2014 (in thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Financial Assets: Cash and cash equivalents Money market mutual fund $ 15,761 $ - $ - $ 6,129 $ - $ - Total $ 15,761 $ - $ - $ 6,129 $ - $ -

Note 6 - Marketable Securities

Note 6 - Marketable Securities	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Investment [Text Block]	Note 6 – Marketable Securities The Company invests in short-term and long-term agency, municipal, corporate, commercial paper and other debt securities. The securities are categorized as held-to-maturity and are recorded at amortized cost. Categorization as held-to-maturity is based on the Company’s ability and intent to hold these securities to maturity. Information regarding the Company’s short-term and long-term marketable securities as of June 30, 2015 and December 31, 2014 is as follows: June 30, 2015 (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value U.S. municipal securities $ 32,661 $ 20 $ (49 ) $ 32,632 Corporate debt securities 25,932 5 (31 ) 25,906 U.S. government agency securities 19,857 9 (23 ) 19,843 Certificates of deposit/time deposits 5,656 12 - 5,668 Commercial paper 1,566 - (1 ) 1,565 Total marketable securities $ 85,672 $ 46 $ (104 ) $ 85,614 December 31, 2014 (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value U.S. municipal securities $ 30,004 $ 32 $ (18 ) $ 30,018 Corporate debt securities 29,316 7 (79 ) 29,244 U.S. government agency securities 20,048 - (71 ) 19,977 Certificates of deposit/time deposits 5,656 5 (15 ) 5,646 Total marketable securities $ 85,024 $ 44 $ (183 ) $ 84,885 Fair values for the corporate debt securities are primarily determined based on quoted market prices (Level 1). Fair values for the U.S. municipal securities, U.S. government agency securities, certificates of deposit and commercial paper are primarily determined using dealer quotes or quoted market prices for similar securities (Level 2). The Company tests for other-than-temporary losses on a quarterly basis and has considered the unrealized losses indicated above, which are the result of changes in interest rates, to be temporary in nature. In reaching this conclusion, the Company considered the credit quality of the issuers of the debt securities as well as the Company's intent to hold the investments to maturity and recover the full principal. Classification of marketable securities as current or non-current is based upon the security’s maturity date as of the date of these financial statements. The June 30, 2015 balance of held-to-maturity debt securities by contractual maturity is shown in the following table at amortized cost. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties. June 30, (in thousands) 2015 Due in one year or less $ 31,190 Due after one year through five years 54,482 Total marketable securities $ 85,672

Note 7 - Inventory

Note 7 - Inventory	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Inventory Disclosure [Text Block]	Note 7 – Inventory Inventory consists primarily of raw materials, which are recorded at the lower of cost or market using the average-cost method, which approximates first-in, first-out (FIFO) cost. The Company periodically reviews its inventory for slow-moving, damaged and discontinued items and provides allowances to reduce such items identified to their recoverable amounts. The Company’s inventory consists of the following: June 30, December 31, (in thousands) 2015 2014 Raw materials $ 6,108 $ 5,728 Work in process 922 653 Total inventory 7,030 6,381 Allowance for obsolescence (202 ) (187 ) Inventory, net of allowance $ 6,828 $ 6,194

Note 8 - Stock-based Compensati

Note 8 - Stock-based Compensation	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	Note 8 – Stock-Based Compensation Under the 2012 Long-Term Incentive Plan (2012 Plan), the Company has the ability to grant stock options, stock appreciation rights (SARs), restricted stock, stock units, other stock-based awards and cash incentive awards. Awards under the 2012 Plan will have a maximum term of ten years from the date of grant. The compensation committee may provide that the vesting or payment of any award will be subject to the attainment of specified performance measures in addition to the satisfaction of any continued service requirements and the compensation committee will determine whether such measures have been achieved. The per share exercise price of stock options and SARs granted under the 2012 Plan generally may not be less than the fair market value of a share of our common stock on the date of the grant. Employee Stock Purchase Plan The Company’s 2012 Employee Stock Purchase Plan (ESPP) allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15 percent of their eligible compensation, subject to plan limitations. The ESPP provides for six-month offering periods ending May 15 and November 15, respectively. At the end of each offering period, employees are able to purchase shares at 85 percent of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the last trading day of the offering period. Stock-Based Compensation Expense Stock-based compensation expense was $1.6 million and $1.2 million for the three months ended June 30, 2015 and 2014, respectively, and $2.9 million and $2.2 million for the six months ended June 30, 2015 and 2014, respectively. Stock Options A summary of stock option activity during the six months ended June 30, 2015 is as follows: Weighted- Average Stock Options Exercise Price Options outstanding at December 31, 2014 998,987 $ 26.49 Granted 110,335 67.36 Exercised (86,656 ) 15.72 Forfeited (25,713 ) 52.39 Options outstanding at June 30, 2015 996,953 $ 31.28 Exercisable at June 30, 2015 515,568 $ 19.12 The outstanding options generally have a term of ten years. For employees, options granted become exercisable ratably over the vesting period, which is generally a five-year period beginning on the first anniversary of the grant date, subject to the employee’s continuing service to the Company. For directors, options generally become exercisable in full on the first anniversary of the grant date. The weighted-average grant date fair value of options that were granted during the six months ended June 30, 2015 was $32.42. The following table provides the assumptions used in the Black-Scholes pricing model valuation of options during the six months ended June 30, 2015 and 2014, respectively: Six Months Ended June 30, 2015 2014 Risk-free interest rate 1.69 - 1.77% 0.43 - 2.14% Expected life (years) 5.50 - 6.50 2.00 - 6.50 Expected volatility 46.80 - 47.23% 48.87 - 49.30% Expected dividend yield 0% 0% As of June 30, 2015, there was $8.8 million of unrecognized compensation expense related to unvested stock options, which is expected to be recognized over a weighted-average period of 3.3 years . Restricted Stock The 2012 Plan provides for the award of restricted stock or restricted stock units. Restricted stock awards are share settled awards and restrictions lapse ratably over the vesting period, which is generally a five-year period, beginning on the first anniversary of the grant date, subject to the employee's continuing service to the Company. For directors, restricted stock awards generally vest in full on the first anniversary of the grant date. A summary of restricted stock activity during the six months ended June 30, 2015 is as follows: Weighted- Average Grant Date Restricted Fair Value Stock Per Share Nonvested restricted stock at December 31, 2014 76,574 $ 69.27 Granted 68,580 68.89 Vested (16,161 ) 69.47 Forfeited (1,858 ) 78.59 Nonvested restricted stock at June 30, 2015 127,135 $ 68.90 As of June 30 , 2015, there was $7.9 million of unrecognized compensation expense related to non-vested restricted stock, which is expected to be recognized over a weighted-average period of 4.1 years. Employee Stock Purchase Plan The following table presents the assumptions used to estimate the fair value of the ESPP during the six months ended June 30 , 2015 and 2014, respectively: Six Months Ended June 30, 2015 2014 Risk-free interest rate 0.08 - 0.10% 0.01 - 0.11% Expected life (months) 6.00 6.00 Expected volatility 33.68 - 37.64% 39.16 - 39.80% Expected dividend yield 0% 0%

Note 9 - Accumulated Other Comp

Note 9 - Accumulated Other Comprehensive Income	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Disclosure of Reclassification Amount [Text Block]	Note 9 – Accumulated Other Comprehensive Income (Loss) Other comprehensive income (loss) is comprised entirely of foreign currency translation adjustments. The following table presents the changes in accumulated other comprehensive income (loss) balances during the three and six months ended June 30 , 2015 and 2014, respectively: Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2015 2014 2015 2014 Foreign currency translation adjustments Balance at beginning of period $ (4,004 ) $ (919 ) $ (2,929 ) $ (1,091 ) Other comprehensive income before reclassifications 1,274 532 199 704 Amounts reclassified from accumulated other comprehensive income (loss) - - - - Net current-period other comprehensive income 1,274 532 199 704 Balance at end of period $ (2,730 ) $ (387 ) $ (2,730 ) $ (387 )

Note 10 - Income Taxes

Note 10 - Income Taxes	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Income Tax Disclosure [Text Block]	Note 10 – Income Taxes The Company is subject to income tax in multiple jurisdictions and the use of estimates is required to determine the provision for income taxes. For the three months ended June 30, 2015 and 2014, the Company recorded an income tax provision of $5.6 million and $5.0 million, respectively. For the six months ended June 30, 2015 and 2014, the Company recorded an income tax provision of $10.6 million and $9.4 million, respectively. The income tax provision is based on the estimated annual effective tax rate for the year applied to pre-tax income. The effective income tax rate for the three months ended June 30, 2015 was 32.5 percent compared with 31.1 percent in the same period of the prior year. The effective income tax rate for the six months ended June 30, 2015 was 32.3 percent compared with 30.9 percent in the same period of the prior year. The effective income tax rate for the three and six months ended June 30, 2015 differs from the U.S. federal statutory rate of 35 percent due primarily to the mix of income earned in domestic and foreign tax jurisdictions and deductions for which the Company qualifies. The Company had liabilities related to unrecognized tax benefits totaling $1.5 million at June 30 , 2015 and $1.3 million at December 31, 2014, all of which, if recognized, would affect the Company’s effective tax rate. The Company recognizes interest and penalties related to income tax matters in income tax expense, and reports the liability in current or long-term income taxes payable as appropriate. During the six months ended June 30, 2015, the Company increased its current year uncertain tax positions by $0.2 million. The increase was due to certain tax positions not meeting the more-likely-than-not standard for accounting for uncertain tax positions under the Company’s current facts and circumstances. Based upon the information available as of June 30, 2015, the Company anticipates the amount of uncertain tax positions will change in the next twelve months; however, the change is not expected to be material.

Note 11 - Revenue and Geographi

Note 11 - Revenue and Geographic Information	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Segment Reporting Disclosure [Text Block]	Note 11 – Revenue and Geographic Information The Company’s revenue is derived from its Protomold injection molding, Firstcut computer numerical control (CNC) machining and Fineline additive manufacturing (3D printing) product lines. Total revenue by product line is as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2015 2014 2015 2014 Revenue: Protomold $ 39,932 $ 36,255 $ 77,550 $ 68,949 Firstcut 18,585 14,478 34,955 27,858 Fineline 5,452 2,133 10,000 2,133 Total revenue $ 63,969 $ 52,866 $ 122,505 $ 98,940 Revenue to external customers based on the billing location of the end user customer and long-lived assets by geographic region are as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2015 2014 2015 2014 Revenue: United States $ 49,298 $ 39,966 $ 94,143 $ 72,988 International 14,671 12,900 28,362 25,952 Total revenue $ 63,969 $ 52,866 $ 122,505 $ 98,940 June 30, December 31, (in thousands) 2015 2014 Long-lived assets: United States $ 84,014 $ 76,923 International 16,907 14,703 Total long-lived assets $ 100,921 $ 91,626

Note 3 - Net Income per Commo17

Note 3 - Net Income per Common Share (Tables)	6 Months Ended
	Jun. 30, 2015
Notes Tables
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	Three Months Ended Six Months Ended June 30, June 30, (in thousands, except share and per share amounts) 2015 2014 2015 2014 Net income $ 11,686 $ 10,956 $ 22,139 $ 21,058 Basic - weighted-average shares outstanding: 25,921,111 25,620,005 25,885,888 25,597,055 Effect of dilutive securities: Employee stock options and other 356,392 526,843 359,247 535,210 Diluted - weighted-average shares outstanding: 26,277,503 26,146,848 26,245,135 26,132,265 Net income per share: Basic $ 0.45 $ 0.43 $ 0.86 $ 0.82 Diluted $ 0.44 $ 0.42 $ 0.84 $ 0.81

Note 4 - Goodwill and Other I18

Note 4 - Goodwill and Other Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2015
Notes Tables
Schedule of Finite-Lived Intangible Assets [Table Text Block]	(in thousands) Six Months Ended June 30, 2015 Balance as of the beginning of the period $ 28,916 Goodwill acquired during the period - Balance as of the end of the period $ 28,916
Schedule of Goodwill [Table Text Block]	June 30, 2015 December 31, 2014 Useful Weighted Average Accumulated Accumulated Life Useful Life (in thousands) Gross Amortization Net Gross Amortization Net (in years) Remaining (in years) Intangible Assets with finite lives: Marketing assets $ 930 $ (109 ) $ 821 $ 930 $ (62 ) $ 868 10.0 8.8 Non-compete agreement 190 (111 ) 79 190 (63 ) 127 2.0 0.8 Trade secrets 250 (58 ) 192 250 (33 ) 217 5.0 3.8 Internally developed software 680 (264 ) 416 680 (151 ) 529 3.0 1.8 Customer relationships 2,530 (328 ) 2,202 2,530 (188 ) 2,342 9.0 7.8 Total intangible assets $ 4,580 $ (870 ) $ 3,710 $ 4,580 $ (497 ) $ 4,083
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]	(in thousands) Estimated Amortization Expense Remaining 2015 $ 373 2016 682 2017 500 2018 424 2019 391 Thereafter 1,340 Total estimated amortization expense $ 3,710

Note 5 - Fair Value Measureme19

Note 5 - Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2015
Notes Tables
Fair Value, Assets Measured on Recurring Basis [Table Text Block]	June 30, 2015 December 31, 2014 (in thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Financial Assets: Cash and cash equivalents Money market mutual fund $ 15,761 $ - $ - $ 6,129 $ - $ - Total $ 15,761 $ - $ - $ 6,129 $ - $ -

Note 6 - Marketable Securities

Note 6 - Marketable Securities (Tables)	6 Months Ended
	Jun. 30, 2015
Notes Tables
Held-to-maturity Securities [Table Text Block]	December 31, 2014 (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value U.S. municipal securities $ 30,004 $ 32 $ (18 ) $ 30,018 Corporate debt securities 29,316 7 (79 ) 29,244 U.S. government agency securities 20,048 - (71 ) 19,977 Certificates of deposit/time deposits 5,656 5 (15 ) 5,646 Total marketable securities $ 85,024 $ 44 $ (183 ) $ 84,885 June 30, 2015 (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value U.S. municipal securities $ 32,661 $ 20 $ (49 ) $ 32,632 Corporate debt securities 25,932 5 (31 ) 25,906 U.S. government agency securities 19,857 9 (23 ) 19,843 Certificates of deposit/time deposits 5,656 12 - 5,668 Commercial paper 1,566 - (1 ) 1,565 Total marketable securities $ 85,672 $ 46 $ (104 ) $ 85,614
Investments Classified by Contractual Maturity Date [Table Text Block]	June 30, (in thousands) 2015 Due in one year or less $ 31,190 Due after one year through five years 54,482 Total marketable securities $ 85,672

Note 7 - Inventory (Tables)

Note 7 - Inventory (Tables)	6 Months Ended
	Jun. 30, 2015
Notes Tables
Schedule of Inventory, Current [Table Text Block]	June 30, December 31, (in thousands) 2015 2014 Raw materials $ 6,108 $ 5,728 Work in process 922 653 Total inventory 7,030 6,381 Allowance for obsolescence (202 ) (187 ) Inventory, net of allowance $ 6,828 $ 6,194

Note 8 - Stock-based Compensa22

Note 8 - Stock-based Compensation (Tables)	6 Months Ended
	Jun. 30, 2015
Notes Tables
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]	Weighted- Average Stock Options Exercise Price Options outstanding at December 31, 2014 998,987 $ 26.49 Granted 110,335 67.36 Exercised (86,656 ) 15.72 Forfeited (25,713 ) 52.39 Options outstanding at June 30, 2015 996,953 $ 31.28 Exercisable at June 30, 2015 515,568 $ 19.12
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions [Table Text Block]	Six Months Ended June 30, 2015 2014 Risk-free interest rate 1.69 - 1.77% 0.43 - 2.14% Expected life (years) 5.50 - 6.50 2.00 - 6.50 Expected volatility 46.80 - 47.23% 48.87 - 49.30% Expected dividend yield 0% 0%
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]	Weighted- Average Grant Date Restricted Fair Value Stock Per Share Nonvested restricted stock at December 31, 2014 76,574 $ 69.27 Granted 68,580 68.89 Vested (16,161 ) 69.47 Forfeited (1,858 ) 78.59 Nonvested restricted stock at June 30, 2015 127,135 $ 68.90
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]	Six Months Ended June 30, 2015 2014 Risk-free interest rate 0.08 - 0.10% 0.01 - 0.11% Expected life (months) 6.00 6.00 Expected volatility 33.68 - 37.64% 39.16 - 39.80% Expected dividend yield 0% 0%

Note 9 - Accumulated Other Co23

Note 9 - Accumulated Other Comprehensive Income (Tables)	6 Months Ended
	Jun. 30, 2015
Notes Tables
Comprehensive Income (Loss) [Table Text Block]	Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2015 2014 2015 2014 Foreign currency translation adjustments Balance at beginning of period $ (4,004 ) $ (919 ) $ (2,929 ) $ (1,091 ) Other comprehensive income before reclassifications 1,274 532 199 704 Amounts reclassified from accumulated other comprehensive income (loss) - - - - Net current-period other comprehensive income 1,274 532 199 704 Balance at end of period $ (2,730 ) $ (387 ) $ (2,730 ) $ (387 )

Note 11 - Revenue and Geograp24

Note 11 - Revenue and Geographic Information (Tables)	6 Months Ended
	Jun. 30, 2015
Notes Tables
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]	Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2015 2014 2015 2014 Revenue: Protomold $ 39,932 $ 36,255 $ 77,550 $ 68,949 Firstcut 18,585 14,478 34,955 27,858 Fineline 5,452 2,133 10,000 2,133 Total revenue $ 63,969 $ 52,866 $ 122,505 $ 98,940
Revenue from External Customers by Products and Services [Table Text Block]	Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2015 2014 2015 2014 Revenue: United States $ 49,298 $ 39,966 $ 94,143 $ 72,988 International 14,671 12,900 28,362 25,952 Total revenue $ 63,969 $ 52,866 $ 122,505 $ 98,940
Long-lived Assets by Geographic Areas [Table Text Block]	June 30, December 31, (in thousands) 2015 2014 Long-lived assets: United States $ 84,014 $ 76,923 International 16,907 14,703 Total long-lived assets $ 100,921 $ 91,626

Note 3 - Net Income per Commo25

Note 3 - Net Income per Common Share - Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Net income	$ 11,686	$ 10,956	$ 22,139	$ 21,058
Basic (in shares)	25,921,111	25,620,005	25,885,888	25,597,055
Effect of dilutive securities:
Employee stock options and other (in shares)	356,392	526,843	359,247	535,210
Diluted - weighted-average shares outstanding: (in shares)	26,277,503	26,146,848	26,245,135	26,132,265
Net income per share:
Basic (in dollars per share)	$ 0.45	$ 0.43	$ 0.86	$ 0.82
Diluted (in dollars per share)	$ 0.44	$ 0.42	$ 0.84	$ 0.81

Note 4 - Goodwill and Other I26

Note 4 - Goodwill and Other Intangible Assets (Details Textual) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Amortization of Intangible Assets	$ 200	$ 100	$ 400	$ 100

Note 4 - Goodwill and Other I27

Note 4 - Goodwill and Other Intangible Assets - Intangible Assets Other Than Goodwill (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Marketing-Related Intangible Assets [Member]
Intangible Assets with finite lives:
Gross	$ 930	$ 930
Accumulated amortization	(109)	(62)
Net	$ 821	868
Useful life	10 years
Weighted average useful life remaining	8 years 292 days
Noncompete Agreements [Member]
Intangible Assets with finite lives:
Gross	$ 190	190
Accumulated amortization	(111)	(63)
Net	$ 79	127
Useful life	2 years
Weighted average useful life remaining	292 days
Trade Secrets [Member]
Intangible Assets with finite lives:
Gross	$ 250	250
Accumulated amortization	(58)	(33)
Net	$ 192	217
Useful life	5 years
Weighted average useful life remaining	3 years 292 days
Computer Software, Intangible Asset [Member]
Intangible Assets with finite lives:
Gross	$ 680	680
Accumulated amortization	(264)	(151)
Net	$ 416	529
Useful life	3 years
Weighted average useful life remaining	1 year 292 days
Customer Relationships [Member]
Intangible Assets with finite lives:
Gross	$ 2,530	2,530
Accumulated amortization	(328)	(188)
Net	$ 2,202	2,342
Useful life	9 years
Weighted average useful life remaining	7 years 292 days
Gross	$ 4,580	4,580
Accumulated amortization	(870)	(497)
Net	$ 3,710	$ 4,083

Note 4 - Goodwill and Other I28

Note 4 - Goodwill and Other Intangible Assets - Changes in Carrying Amount of Goodwill (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2015USD ($)
Balance as of the beginning of the period	$ 28,916
Goodwill acquired during the period	0
Balance as of the end of the period	$ 28,916

Note 4 - Goodwill and Other I29

Note 4 - Goodwill and Other Intangible Assets - Estimated Aggregated Amortization Expense (Details) - USD ($) $ in Thousands	Jun. 30, 2015
Remaining 2,015	$ 373
2,016	682
2,017	500
2,018	424
2,019	391
Thereafter	1,340
Total estimated amortization expense	$ 3,710

Note 5 - Fair Value Measureme30

Note 5 - Fair Value Measurements - Fair Value of Financial Assets Measured on a Recurring Basis (Details) - Fair Value, Inputs, Level 1 [Member] - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Cash and cash equivalents:
Money market mutual fund	$ 15,761	$ 6,129
Total	$ 15,761	$ 6,129

Note 6 - Marketable Securitie31

Note 6 - Marketable Securities - Short-term and Long-term Marketable Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
US States and Political Subdivisions Debt Securities [Member]
Amortized Cost	$ 32,661	$ 30,004
Unrealized Gains	20	32
Unrealized Losses	(49)	(18)
Fair Value	32,632	30,018
Corporate Debt Securities [Member]
Amortized Cost	25,932	29,316
Unrealized Gains	5	7
Unrealized Losses	(31)	(79)
Fair Value	25,906	29,244
US Government Agencies Debt Securities [Member]
Amortized Cost	19,857	$ 20,048
Unrealized Gains	9
Unrealized Losses	(23)	$ (71)
Fair Value	19,843	19,977
Commercial Paper, Not Included with Cash and Cash Equivalents [Member]
Amortized Cost	$ 1,566
Unrealized Gains
Unrealized Losses	$ (1)
Fair Value	1,565
Bank Time Deposits [Member]
Amortized Cost	5,656	5,656
Unrealized Gains	$ 12	5
Unrealized Losses		(15)
Fair Value	$ 5,668	5,646
Amortized Cost	85,672	85,024
Unrealized Gains	46	44
Unrealized Losses	(104)	(183)
Fair Value	$ 85,614	$ 84,885

Note 6 - Marketable Securitie32

Note 6 - Marketable Securities - Balance of Held-to-Maturity Debt Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Jun. 30, 2015
Due in one year or less	$ 31,190
Due after one year through five years	54,482
Total marketable securities	$ 85,672

Note 7 - Inventory - Inventory

Note 7 - Inventory - Inventory (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Raw materials	$ 6,108	$ 5,728
Work in process	922	653
Total inventory	7,030	6,381
Allowance for obsolescence	(202)	(187)
Inventory, net of allowance	$ 6,828	$ 6,194

Note 8 - Stock-based Compensa34

Note 8 - Stock-based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Employee Stock Option [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 8,800		$ 8,800
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			3 years 109 days
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			5 years
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			4 years 36 days
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options	7,900		$ 7,900
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period			10 years
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Offering Date			15.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period			180 days
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent			85.00%
Allocated Share-based Compensation Expense	$ 1,600	$ 1,200	$ 2,900	$ 2,200
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			5 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value			$ 32.42

Note 8 - Stock-based Compensa35

Note 8 - Stock-based Compensation - Assumptions Used in the Black-Scholes Option Pricing Model (Details) - Employee Stock Option [Member]	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Minimum [Member]
Risk-free interest rate	1.69%	0.43%
Expected life (years)	5 years 182 days	2 years
Expected volatility	46.80%	48.87%
Maximum [Member]
Risk-free interest rate	1.77%	2.14%
Expected life (years)	6 years 182 days	6 years 182 days
Expected volatility	47.23%	49.30%
Expected dividend yield	0.00%	0.00%

Note 8 - Stock-based Compensa36

Note 8 - Stock-based Compensation - Assumptions Used to Estimate the Fair Value of the ESPP (Details) - ESPP [Member]	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Minimum [Member]
Risk-free interest rate	0.08%	0.01%
Expected volatility	33.68%	39.16%
Maximum [Member]
Risk-free interest rate	0.10%	0.11%
Expected volatility	37.64%	39.80%
Expected life (years)	180 days	180 days
Expected dividend yield	0.00%	0.00%

Note 8 - Stock-based Compensa37

Note 8 - Stock-based Compensation - Stock Option Activity (Details) - Jun. 30, 2015 - $ / shares	Total
Options outstanding (in shares)	998,987
Options outstanding (in dollars per share)	$ 26.49
Granted (in shares)	110,335
Granted (in dollars per share)	$ 67.36
Exercised (in shares)	(86,656)
Exercised (in dollars per share)	$ 15.72
Forfeited (in shares)	(25,713)
Forfeited (in dollars per share)	$ 52.39
Options outstanding (in shares)	996,953
Options outstanding (in dollars per share)	$ 31.28
Exercisable at June 30, 2015 (in shares)	515,568
Exercisable at June 30, 2015 (in dollars per share)	$ 19.12

Note 8 - Stock-based Compensa38

Note 8 - Stock-based Compensation - Non-vested Restricted Stock Options (Details) - 6 months ended Jun. 30, 2015 - Restricted Stock [Member] - $ / shares	Total
Nonvested restricted stock at December 31, 2014 (in shares)	76,574
Nonvested restricted stock at December 31, 2014 (in dollars per share)	$ 69.27
Granted (in shares)	68,580
Granted (in dollars per share)	$ 68.89
Vested (in shares)	(16,161)
Vested (in dollars per share)	$ 69.47
Forfeited (in shares)	(1,858)
Forfeited (in dollars per share)	$ 78.59
Nonvested restricted stock at June 30, 2015 (in shares)	127,135
Nonvested restricted stock at June 30, 2015 (in dollars per share)	$ 68.90

Note 9 - Accumulated Other Co39

Note 9 - Accumulated Other Comprehensive Income - Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Balance beginning of period	$ (4,004)	$ (919)	$ (2,929)	$ (1,091)
Other comprehensive income before reclassifications	1,274	532	199	704
Amounts reclassified from accumulated other comprehensive income (loss)	0	0	0	0
Net current-period other comprehensive income	1,274	532	199	704
Balance at end of period	$ (2,730)	$ (387)	$ (2,730)	$ (387)

Note 10 - Income Taxes (Details

Note 10 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	35.00%		35.00%
Income Tax Expense (Benefit)	$ 5,625	$ 4,952	$ 10,556	$ 9,401
Effective Income Tax Rate Reconciliation, Percent	32.50%	31.10%	32.30%	30.90%
Unrecognized Tax Benefits	$ 1,500		$ 1,500		$ 1,300
Unrecognized Tax Benefits, Increase Resulting from Current Period Tax Positions			$ 200

Note 11 - Revenue and Geograp41

Note 11 - Revenue and Geographic Information - Revenue to External Customers and Long-lived Assets by Geography (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
UNITED STATES
Revenues	$ 49,298	$ 39,966	$ 94,143	$ 72,988
International [Member]
Revenues	14,671	12,900	28,362	25,952
Revenues	$ 63,969	$ 52,866	$ 122,505	$ 98,940

Note 11 - Revenue and Geograp42

Note 11 - Revenue and Geographic Information - Total Revenue by Product Line (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Protomold [Member]
Revenue:
Revenues	$ 39,932	$ 36,255	$ 77,550	$ 68,949
First Cut [Member]
Revenue:
Revenues	18,585	14,478	34,955	27,858
Fineline [Member]
Revenue:
Revenues	5,452	2,133	10,000	2,133
Revenues	$ 63,969	$ 52,866	$ 122,505	$ 98,940

Note 11 - Revenue and Geograp43

Note 11 - Revenue and Geographic Information - Long-lived Assets by Geographic Region (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
UNITED STATES
Long-lived assets:
Long-lived assets	$ 84,014	$ 76,923
International [Member]
Long-lived assets:
Long-lived assets	16,907	14,703
Long-lived assets	$ 100,921	$ 91,626