Proto Labs, Inc.

Greetings. Welcome to ProtoLabs' fourth quarter and year-end 2020 earnings call. At this time, all participants are in a list-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note that today's conference is being recorded. I'll now turn the conference over to Daniel Schumacher, Director of Investor Relations. Mr. Schumacher, you may begin.

Thank you, Rob, and good morning, everyone. With me today are Protolabs President and Chief Executive Officer, Vicki Holt, Vice President and General Manager of the Americas, and incoming President and Chief Executive Officer, Rob Bedore, and Chief Financial Officer, John Way. This morning, Protolabs issued a press release announcing its financial results for the fourth quarter and full year ended December 31st, 2020. The release is available on the company's website, In addition, a prepared slide presentation is available online at the web address provided in our press release. Before we begin, I would like to remind everyone that our discussion will include statements relating to future performance and expectations that are or may be considered forward-looking statements and subject to many risks and uncertainties that could cause actual results to differ materially from expectations. Please refer to our earnings press release and recent SEC filings, including our annual report on Form 10-K for information on certain risks that could cause actual outcomes to differ materially and adversely from any forward-looking statements made today. The results and guidance we will discuss include non-GAAP financial measures consistent with our past practice. Please refer to our press release and the accompanying slide presentation at the investor relations section of our company website for a complete reconciliation of non-GAAP to GAAP results. Now I'd like to turn the call over to Vicki Holt, President and Chief Executive Officer of ProtoLabs. Vicki?

Vicki Holt Thanks, Dan, and good morning, everyone. Thank you for joining us today for our fourth quarter and full year 2020 earnings conference call. Before we go through our 2020 financial performance and look ahead to 2021, I wanted to take a moment and reflect on 2020, a year of change. As we all know, 2020 brought many unforeseen challenges due to the COVID-19 pandemic that began suddenly in the first quarter. I am very proud of how Protolife's responded. Our employees took these challenges and turned them into opportunities to better serve our customers and contribute to the fight against the pandemic. ProtoLabs employees displayed incredible adaptability guided by our core values of teamwork, trust, and achievement. Throughout the pandemic, our top priority has been to keep our employees, communities, and customers safe while continuing to delight our customers. Our digital manufacturing model allowed us to help our customers produce parts at market-leading turnaround times to respond to COVID-19, including components for ventilators and diagnostic equipment, as well as personal protective equipment for healthcare providers. In total, we generated $18 million of revenue from COVID-19-related customer projects. We are humbled and grateful that customers trusted us to assist in the fight against COVID-19. In addition to helping the world innovate to fight the pandemic, Protolabs also took actions to transform for the future throughout 2020. Most notably, we accomplished our number one priority entering 2020, the successful launch of Protolabs 2.0. Our employees demonstrated outstanding productivity as we diligently worked through launch dates amidst new working environments. As you know, we launched our refreshed system in Europe in November, and I am happy to report that Protolabs 2.0 went live successfully in the Americas on February 1st. Both launches went as expected, and initial customer feedback has been very positive. Today, we remain in the hypercare monitoring phase as we continue to make improvements in response to customer and internal user feedback, as is customary with any system launch. Protolabs 2.0 offers a much improved customer experience and will allow us to maintain and extend our position as the leader in digital manufacturing. As the economy continues its gradual recovery, We expect higher customer satisfaction and retention moving forward. This exciting new growth platform is the result of the multi-year effort of our incredible employees who have worked tirelessly to accomplish our top priority and continue to inspire and innovate as we serve our customers. 2021 will be a transformative year for ProtoLabs and marks the beginning of a new chapter. We have already made significant strategic progress early this year, including the launch of Protolabs 2.0 in the Americas and acquiring 3D Hubs, positioning us to serve our customers and realize growth as the market recovers in 2021 and beyond. As one chapter begins, another ends. And as you may know, this is my last earnings call as President and Chief Executive Officer of this wonderful organization. I am proud to have served alongside a great team of employees at Protolab for the last seven years, and I am confident that Rob Bedore will lead the company to great success. Rob will assume the role of President and Chief Executive Officer on March 1st, and you will hear from him later in this call as he provides an overview of our long-term strategic objectives and 2021 priorities. Turning now to our financial results for the fourth quarter of 2020, we are pleased to report fourth quarter revenue and earnings within our expectations. Revenue of $105 million represents a year-over-year decline of 6% as global economic activity remains below levels from a year ago. Our fourth quarter revenue declined 2% compared to the third quarter of 2020, in line with recent seasonality patterns. Revenue by geography for the fourth quarter is highlighted on slide five of our earnings presentation. America's revenue declined 6% year-over-year and 3% sequentially, consistent with overall customer demand trends. Similarly, Europe's fourth quarter revenue declined 8% year-over-year, 12% in constant currency, consistent with third quarter results. In Japan, revenue declined only 1% compared to the same period a year ago. 5% in constant currencies and improved 21% sequentially. Turning to earnings, we reported fourth quarter non-GAAP diluted earnings per share of 50 cents per share, in line with our expectations for the quarter. Our earnings in the fourth quarter were down sequentially as anticipated, primarily due to the impact of launch of Protolabs 2.0 in November and lower seasonal volumes. Our fourth quarter performance resulted in a full year 2020 revenue of $434 million, representing a decline of 5% compared to 2019, or 6% in constant currencies. Please see slides seven through 10 for additional information on our 2020 revenue performance. Given the emergence of a global pandemic and a sudden substantial drop in global economic activity, as well as other unforeseen challenges in 2020, we responded very well as we focused on the health of our employees, servicing our customers, and our long-term business opportunities. Our 2020 non-GAAP diluted earnings per share were $2.36 compared to $2.79 in 2019 as we managed costs where appropriate and continued to invest in our future in the form of our Protolabs 2.0 project throughout the year. John will now provide a more detailed view into our financial results. John?