Greetings. Welcome to the Proto Labs conference call. At this time, all participants are in a listen-only mode. 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 this conference is being recorded. At this time, I'll turn the conference over to Daniel Schumacher, Head of Investor Relations for Proto Labs. You may now begin. Good morning, everyone. This is Dan Schumacher, head of investor relations for Proto Labs. Earlier today, Proto Labs announced the signing of a definitive agreement to acquire 3D Hubs. Joining me today to discuss this announcement are Proto Labs President and Chief Executive Officer, Vicki Holt, Vice President and General Manager of the Americas, and incoming President and Chief Executive Officer, Rob Bodor, and Chief Financial Officer, John Way. We are very excited to also have Bram de Zwart, 3D Hubs co-founder and Chief Executive Officer, with us today. After our prepared remarks regarding the transaction and our strategic rationale, we welcome your questions. 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 risks and uncertainties that could cause actual results to differ materially from expectations. Please refer to our 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. I'd like to turn the call over to Vicki. Thanks, Dan, and good morning, everyone. Thank you for joining us today, and a special thank you to Bram from 3D Hubs for being with us. Earlier this morning, we announced that we have signed an agreement to acquire 3D Hubs, an online manufacturing platform that provides engineers with on-demand access to a global network of manufacturing partners. This is a transformative acquisition for Proto Labs that will allow us to provide more value to our customers by enabling us to serve them more holistically than we do today. In 3D Hubs, we are acquiring a platform to provide outsourced manufacturing capabilities through a global network of premier manufacturing partners, which will augment Proto Labs' in-house technology-enabled manufacturing, creating the most comprehensive digital manufacturing offering in the world. Consideration for the transaction includes $280 million at closing, plus contingent consideration of up to $50 million, subject to the achievement of certain financial performance targets. This is a very exciting day for all of us. Today marks the beginning of a new chapter in the Proto Labs story, and with this new chapter comes new leadership. This is the perfect time for Rob Bodor to transition into the role of President and Chief Executive Officer as the business continues to evolve. Rob has been a member of our executive leadership team for the past eight years and was an integral part of creating the strategy that led us to pursue 3D Hubs as a partner and candidate for acquisition. Rob, who will transition into the role of President and CEO on March first, led the diligence process and execution of this transaction. I will now turn the call over to Rob for a brief overview of 3D Hubs and a deeper dive into our strategic rationale for the acquisition. Rob? Thank you, Vicki. I'd like to reiterate our enthusiasm about this next chapter and the evolution of our strategy this acquisition represents for Proto Labs and our ability to serve customers more holistically. We published slides supporting this transaction in the investor relations section of our website. Slide six lays out an overview of our strategic rationale, which I will cover in more detail. 3D Hubs brings to Proto Labs a best-in-class team, platform, manufacturing partner network, and a strong, growing business, which allows us to enhance our customer value proposition across prototyping and global production. Even more exciting, the combination of the two businesses will expand our total addressable market, enabling further growth for years to come. Turning to slide seven, you can see that Proto Labs has consistently innovated to transform the customer offer over the last two decades. From our inception in 1999 with a single manufacturing service, injection molding, to the leader in digital custom parts manufacturing, offering four services today, much of our growth is due to the improvement and expansion of our offerings. Because we've automated the back-end manufacturing process, Proto Labs is known for unprecedented turnaround times for low volumes. This has served us very well and provided our customers with an offering that they could not get elsewhere. As we continue to work to serve the needs of our customers further, we want to continue to expand our offerings to create a more holistic offer focused on more complete parts, an improved user experience, and more price and lead time options. To that end, we're teaming up with 3D Hubs to create the world's most comprehensive digital manufacturing offer. The acquisition gives Proto Labs a platform to evolve our service model to provide unprecedented manufacturing flexibility to our customers, which is top of mind for many as we reflect on the global COVID-19 pandemic and the other events of 2020. For a brief overview of 3D Hubs on slides nine through 11. 3D Hubs is an online manufacturing platform that provides companies with on-demand access to a network of 240 manufacturing partners across 20 countries. Founded in 2013, the company has facilitated the production of over six million custom parts and products through its platform, which incorporates machine learning to continuously advance. 3D Hubs offers CNC machining, injection molding, 3D printing, and sheet metal fabrication services. Customers receive instant pricing and design feedback, and the company has shown explosive growth in recent years. We admire the platform 3D Hubs has built and are extremely excited to welcome them to the Protolabs family. As Vicki mentioned, the acquisition of 3D Hubs is a key inflection point for our company's evolution to better serve customers. As we outline on slide 14, Protolabs and 3D Hubs' respective offerings are truly complementary. 3D Hubs' manufacturing partner network offers an extensive range of manufacturing capabilities and price and lead time options. 3D Hubs brings two great benefits to Protolabs customers. First, a complementary network of manufacturing partners to fulfill a breadth of capabilities outside of our current envelope. Second, a broader selection of pricing and lead time options. As we continue to slide 15, you'll see how adding 3D Hubs' capabilities will enable Protolabs to bolster our customer offer and serve more of the global custom contract manufacturing market. Together, we will serve up a broader selection of materials, tighter tolerances, more complete parts, more finishing options, as well as more lead time options and competitive pricing at higher volumes to existing and new customers. Protolabs and 3D Hubs will be able to fulfill nearly every custom manufacturing need across the product life cycle, from idea to prototype to full end-use part production. Together, our value proposition becomes even stronger, allowing us to increase our customer share of wallet, customer retention, and addressable market. Protolabs' proven growth strategy has been composed of the same three growth vectors since we went public in 2012. Those are displayed on slide 16. In order to drive continuous growth, we look to expand our customer base, broaden our part envelope, and offer new manufacturing services, including additional processes and secondary operations. 3D Hubs provides a platform to augment our current offering and will be accretive to our long-term growth rate through the acceleration of all three growth vectors. With the world's most comprehensive digital manufacturing offer, we will expand our addressable market and continue to accelerate these growth vectors, allowing us to achieve $1 billion in revenue even faster. We are excited to start this journey with Bram and the immensely talented 3D Hubs team. Let me now turn it over to Bram for his perspective on how this combination will accelerate 3D Hubs' achievement of its strategy. Bram? Yeah. Thank you, Rob, and good morning, everyone. The entire 3D Hubs team, including my co-founders, Brian and Filemon, is thrilled to join Proto Labs and continue to revolutionize the manufacturing industry through innovation. We've admired them for a long time. They are the leaders in the industry. We are proud of what we've built at 3D Hubs, and we share Proto Labs' desire to better serve both our customers. As Rob explained, 3D Hubs' offering is very complementary to Proto Labs, and we are excited to bring our offer to the hundreds of thousands of customers that they have already served, as well as attract new customers with the combined offering. As you may know, we founded 3D Hubs in 2013 as a peer-to-peer 3D printing platform. In recent years, we have transitioned to become fully B2B focused, adding additional manufacturing services and partners. Our goal is to empower companies to create revolutionary products. This is very well aligned with Protolabs' mission of helping companies accelerate product development and optimize supply chains by providing quality on-demand manufacturing services. Looking at this transaction from the 3D Hubs perspective, the strategic combination with Protolabs will help accelerate our mission and our growth, allowing us to empower more companies to create more revolutionary products and bring them to the world. I also want to take a moment to thank the 3D Hubs employees who work hard every day to revolutionize the manufacturing industry. They have built 3D Hubs into what it is today and will continue to play a key part in our success as part of Protolabs. As we partnered throughout this process, we found that our cultures are very similar. Both organizations are very entrepreneurial-minded and promotes transparency. We look forward to working closely with the Protolabs team and starting the new chapter that Vicki referenced at the beginning of this call as we bring our companies together to capitalize on the massive opportunities ahead. John will walk through the financials of the transaction. Thank you, Bram. Turning now to the transaction summary on slide 20. Under the terms of the agreement, closing consideration of $280 million will be funded with $130 million in cash and $150 million in Protolabs common stock. An additional $50 million of contingent consideration is payable subject to financial performance-based targets over two years after the close of the transaction, funded with 50% cash and 50% stock. We have also established an employee incentive fund payable to 3D Hubs employees based on the achievement of both financial performance and employee retention. The transaction is expected to close before the end of January 2021, subject to customary closing conditions. We have cash in excess of $200 million, no debt on the balance sheet. After funding the $130 million cash portion of the closing consideration, we will still maintain our strong financial position. 3D Hubs generated approximately $25 million of revenue in 2020 and has grown revenue at a compounded annual growth rate of approximately 200% since 2017. We expect this acquisition will be accretive to our revenue growth, but dilutive to our non-GAAP earnings per share in 2021. Earnings dilution will occur as we continue to invest in the combined Proto Labs and 3D Hubs platform to support and expand the manufacturing partner network, scale the operations, and realize eventual synergies. We anticipate the acquisition will be accretive to non-GAAP earnings per share in 2023. The acquisition is focused on serving our customers more holistically. A broader service offering will allow us to serve more of our customers' custom part needs, resulting in an increased share of wallet. By continuing to focus on our customers, we expect an acceleration in our revenue growth that will, in turn, lead to increased profit over the long term. I will now turn the call back to Rob for closing comments. Rob? Thanks, John. In summary, we are extremely enthusiastic about the transformational acquisition of 3D Hubs and how it will expand our service offering, as well as the value it will create for our shareholders. I want to thank the members of our team, the 3D Hubs team, and both organizations' advisors who worked diligently to make this happen in a very unique diligence environment. We're eager to get to work and capture the large opportunities ahead of us. We look forward to providing you information on our Q4 and full year 2020 performance, as well as our 2021 priorities on our earnings call in February. Additionally, we will be hosting a virtual investor and analyst conference this spring to go into further detail on the continued evolution of Proto Labs and our long-term strategy. Thanks again for joining us today, and we will now take your questions. Thank you. Thank you. Our first question is from the line of Brian Drab with William Blair. Please proceed with your question. Hi. Good morning, everyone, and congratulations on the acquisition. Thanks, Brian. Good morning, Brian. Rob, looking forward to working with you in the new role, and congratulations on the move to CEO. Thanks very much, Brian. We'll miss you. Yeah. Yeah. I have a lot of questions. Just to ask a few now and save some for later, but the 3D Hubs breakdown in revenue, I don't know if I saw that in the slides in terms of breakdown between 3D printing, injection molding, and the other services. Can you give us any sense there? Yeah. We disclosed that in 2020, revenue will be about $25 million, in that range. CNC is the largest portion, just over 50%. 3D printing's about a third, and the remainder's in injection molding and sheet metal. CNC is the biggest portion. Okay. Can I press you for any more granularity? I'm just curious how much injection molding revenue, first of all, here? Obviously, it's less than a third. There's not a lot of overlap there in terms of injection molding, right? I think injection molding and sheet metal are areas of the platform that we'll continue to build out in order to serve the customers over the long term. The revenue base today, like I said, is first CNC and then 3D printing. Right. Okay. The manufacturing partners are, my understanding is that they're in China, India, and Mexico. Is that the case? Is that where all the manufacturing happens? Brian, you're right about those countries, but there are also partners in Europe and the U.S. It's a really global truly global manufacturing network. Got it. Okay. The 200%-plus revenue growth, obviously very impressive, but it's a little early here, but if I think I'm doing the math correctly, that would mean that revenue was about $1 million in 2017. Do I have that correct? Yeah. I think you're looking at it and seeing that with the existing revenue base; the percentages look large. I think we are looking at the potential in combining the offer really to serve our customers more holistically. Okay. I'd be interested to know just a little bit about the history of the company between 2013 and 2017. I know some, but as long as I've got all of you on the call, I'd love to get some detail around what happened. How did the company evolve from 2013 to 2017? Also, I'm wondering, was 2020 an outlier in terms of a lot of e-commerce companies, obviously did very well in the midst of the pandemic, or was the pandemic more of a headwind? I'm just wondering, did revenue end up quadrupling in 2020 because of the pandemic, or vice versa? Yeah, Brian, I'm not sure if you're looking for financial details related to the company or- Just the revenue trajectory. Yeah Did the business model change in 2017? Because based on I'm just looking at the revenue growing 200% over the last few years, and then it seemed like from 2013 to 2017, maybe it was just finding its footing, and then things just took off in 2017, or did the business model change? I think Bram referenced it a little in the call that the business model did shift from a consumer-based business model to a business-to-business model. There has been a transition there as they work through it. Specifically related to 2020, the business was impacted just like most businesses around the world. They did experience growth in 2020, roughly 40%. Not where their targets were, but still strong growth in the environment they were operating. Okay. Got it. Thanks very much. The next question comes from the line of Greg Palm with Craig-Hallum. Please proceed with your questions. All right. Thanks. I guess maybe just starting out, I get the call it the defensive nature of the acquisition, but I also want to focus on some of the potential growth drivers. Is there a meaningful cross-selling opportunity here? What does the combination of these two companies bring that maybe either can't do alone? It'd be helpful to just get a little bit more color on sort of the TAM expansion that you alluded to. Yeah, sure. We're actually really excited about this because of the combination of the two companies. What they bring is very complementary to Protolabs in terms of offering. It's really on two dimensions, and I referenced it in the call. Much broader envelope of manufacturing capabilities, as well as longer lead times and a broader range of prices. It really allows us to serve our customers more holistically across many more use cases that they have in the marketplace. There is cross-selling that can occur. There's very little customer overlap between the two customer bases, so there's certainly opportunities for cross-selling. We know that at any point in time, some of our customers might not need Protolabs' speed, and they might have more options for some different kind of fulfillment models. This really allows us to be able to serve them across all of those use cases and needs. You mentioned the mix between services, CNC, 3D printing. What about the mix of low-volume prototyping versus higher volume production? Does it skew one way or the other relative to the Protolabs business? Greg, I think it's fairly comparable to our business as it operates today. I think when production can have a greater impact in shorter periods of time, just because of the size of some of the orders. In general, I'd say the portfolio looks similar to ours. Okay. Then just in the broader landscape of these, I don't know, I think Vicki, you've called them digital brokers, but these sort of manufacturing platforms that have evolved over recent years. I'm curious, what does 3D Hubs add that maybe is differentiated relative to some of the others that we've seen pop up over recent years? As we've been looking to pursue this strategy to really accelerate the roadmap and our capabilities to serve customers more holistically, we took a look at internally building versus what was available out there for us to partner with, and we really felt that 3D Hubs had a combination of a very strong architecture of their manufacturing partners, premium manufacturing partners, how they're well-vetted for quality and ability to serve, as well as how their technology works to match a customer part need with the right manufacturing partner. More importantly, we also felt that 3D Hubs had a strong, talented team that we felt would really fit into the culture we have here at Protolabs. The combination of technology, manufacturing partner, the skills of the leadership team, as well as the culture of 3D Hubs, we felt was absolutely the best fit for Protolabs. Got it. Okay. Helpful color. I'll hop back in queue. Thanks. Thank you. Our next question comes from the line of Kenneth Vallace with Varenbrau Capital. Please proceed with your questions. Morning, everyone. Congratulations on the deal. Thanks. The first question from me, wondering on kind of gross margins of 3D Hubs. If you could give any color there, I think that'd be very interesting. Yeah. I think as we look at it, the growth margins today are in the mid-20s. I think we're looking at opportunities related to that, but today they currently sit in the mid-20s. Cool. The next one. Today, Proto Labs' revenue breakdown is definitely skewed more towards the U.S. Just wondering if 3D Hubs kind of has greater exposure to Europe or Asia, if maybe that was a part of the opportunity here in terms of growing your revenue base abroad. Yeah, that's right. The split of 3D Hubs revenue is kind of 50/50 between the U.S. and Europe. That's another reason for the synergy and where we think it's complementary. It helps us to grow our business in Europe. Awesome. Then last one. Last one from me, in terms of integrating 3D Hubs, what are the plans there? Are you going to have two different e-commerce platforms, or will the websites be combined in any capacity? Could you just talk through how that is all going to work out? Yeah, absolutely. We touched on this in the opening remarks as well. We see a vision for a combined offering that's very exciting. We're now in the midst of the integration plans. Certainly, our immediate priority in the Americas is to complete the launch of 2.0 in the Q1, as you're probably aware of. The two companies will continue to operate independently for some time as we get 2.0 launched and then continue our work and the roadmap for how we will do that joint integration to realize that vision. Great. Thank you. I'll hop back in the queue. Thank you. The next question comes from the line of Tom Hayes with Northcoast Research. Please proceed with your questions. Good morning. Thanks for taking my questions. Rob, I think you mentioned, I just wanted to make sure that the initial plan is not to include 3D Hubs on the 2.0 rollout, and just add them on subsequent to that? That's right. Okay. I guess just one last follow-up, maybe for John. What's the expected share count that you guys will be adding? Oh, share count? It'll turn out to be about 900,000 shares. Okay. All right. Thank you very much. Our next question is from the line of Ben Rose with Battle Road Research. Please proceed with your question. Yes, good morning. Thank you for taking my question. I confess at the outset that I joined the call a bit late. I have a few questions. Firstly, how long have the two companies been speaking to one another? I think since the summer, I think, is when some of the initial conversations took place. Okay. If I may, why now? Are there specific reasons that the deal makes sense for Proto Labs at this stage? Yeah, I'll take that question. I think the timing is perfect right now because as we look at what's happening in the world, first, the B2B e-commerce acceleration that I think is going to be taking place post-COVID is real. We really felt we want to be in the strongest position to maintain our leadership in the e-commerce B2B supply of custom parts to the industrial customer. Our normal approach of accelerating our roadmap and bringing things into our digital platform just was not fast enough for the pace of change happening in e-commerce today. We felt it was really important to augment our current offering with an opportunity for outsourcing. Again, that's where we said, "Let's look at what's out there with some of these platforms that are already being built and look to combine that with our e-commerce solution so we can provide our customers with the most holistic, complete offering from various lead times to full parts, and complete offers." I think the timing is perfect with what's happening in the B2B e-commerce environment today. Okay. Then, if I may, just a question on the, I guess, the partner ecosystem that the company has developed. I'm intrigued by the quality assessment that's probably required to vet these partners. Can you maybe just speak a little bit about how the company monitors the quality of the parts being produced by these partners? Are there actual site visits that are involved in the vetting process? Just maybe a little bit about their quality control over the parts that are manufactured? Yeah, certainly. That's obviously a very important aspect of this. The partners are vetted to make sure that they really have built a premium network of partners that includes upfront audits and evaluations that are quite comprehensive, as well as ongoing and continued auditing of the performance. That's done through the platform in a highly automated way, as well as with human oversight, tracking performance against all the key metrics, customer complaint levels being low, on-time delivery being high, high reliability, and also understanding the expertise of each partner so that they can ensure that we're routing the right parts to the partner that will best fulfill it. It's quite comprehensive. Great. That's extremely helpful. Thank you. Thank you. Our next question comes from the line of Brian with William Blair. Please proceed with your question. Hi. I just have one more thought here that I wanted to ask you about. CNC is a little more than half the revenue, let's say maybe that's around $15 million in 3D printings, $6 -$8 million in revenue. Today, you're doing around, let's call it around $150 million in CNC and about $60-some million in 3D printing. They're about 10% of the size of Proto Labs in those businesses. I'm just wondering, what percentage, maybe I know you won't give a specific percentage, but what portion of the jobs that come into 3D Hubs can you do already at Proto Labs? The reason for the question is just why would someone order CNC parts from 3D Hubs, or why would you use that service, that infrastructure that's set up at 3D Hubs today if a CNC order or a 3D printing order comes in to Proto Labs, and you might have to route it to another country instead of being able to ship it even same day like you can do already. For either one of those services, you already have an incredible presence and ability in the biggest market in the world for those parts. I'm just wondering, as you can see, is there some 3D Hubs business of that $25 million that gets cannibalized? Sure, Brian, thank you. Absolutely. Today, we can serve our customers with the fastest lead times and very high reliability with our legacy service. However, there are times when customers don't need the part that fast. They're willing to wait longer. They can be more planful, and they're interested in an offer that is at a different lead time and at a competitive price for that lead time. This allows us to fulfill those kinds of parts for our existing customers and for new customers in a very effective way. Furthermore, as we've talked in the past, we've automated everything in our back end, and sometimes there are very complex parts that a customer needs that we can't fully manufacture ourselves. Oftentimes, customers will order that part even with some of that material left over or whatever that constraint might be. Now we're able to, through the Protolabs Network, offer those parts complete, offer them with the full secondary operation that they might have, and fulfill those needs as well. As we talked about it being highly complementary, it offers us a broader set of capabilities and additional use cases and lead times that customers might need, right? That's the benefit, right? That we can now serve the customer across a much broader range of their needs. Right. No, it makes sense. Okay. Thanks, Rob. Thanks, everyone. Yeah, thank you. Our next question is from the line of Craig Hall with Craig- Hallum. Please proceed with your question. Thanks. Just a couple quick follow-ups. Just going back to the revenue profile of 3D Hubs. To be clear, do you think that 2020 was impacted by COVID-19 where maybe you could see a revenue growth acceleration coming out of this, or is that not the right way to think about it? Yeah, I think we're looking at the overall economic conditions, and ultimately, we believe 2021 will be better than 2020. I think the question is at what pace, with the uncertainty that's still there, and I think we'll provide greater detail on our earnings call in a few weeks. Okay. Sorry, I just want to be clear. I'm talking specific to 3D Hubs and the 40% revenue growth that you alluded to for 2020. Are you saying that the growth rate in 2021 should be better than that, or was that not what you were saying? I think that overall, we're expecting 2021 economic conditions to be better than 2020. I don't know that I'll comment on the overall growth rate. I think we'll get into that on our earnings call in a few weeks. Okay. Fair enough. I guess just on the earn-outs, assume those are based on revenue performance alone, or is it something else? Revenue and earnings. Okay, great. All right. Thanks so much. Thank you. As a reminder, to ask a question, you may press star one. Thank you. At this time, I would like to turn the floor back to management for any further remarks. Thank you very much for joining us today, and I really want to thank the Proto Labs team, the 3D Hubs team, and everybody who made this transaction happen. We are incredibly excited for the next chapter of the company's evolution and excited to have Rob here with us as CEO leading it. Thank you so much. Thank you all. Thank you. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.