In a previous article, I wrote highly of small-cap company Proto Labs (NYSE:PRLB). The producer of CNC-machined and injection-molded plastic parts has performed well in recent years by growing its revenue and earnings at consistently high levels. Proto Labs remains a viable high-growth investment and the company's recent solid earnings report indicates as much.

However, since the company is often and inaccurately grouped together with traditional 3-D printing companies, it shares some of their headline risk. Nonetheless, the utilitarian nature of Proto Labs' business compared to those of companies like 3D Systems (NYSE:DDD) and Stratasys (NASDAQ:SSYS) makes the company a practical alternative in the 3-D space.

Record earnings results
Proto Labs reported fourth-quarter results for fiscal 2013 which were impressive in all regards. The company's fourth-quarter revenue of $44.04 million, which represented year-over-year growth of 31%, set a record. Additionally, Proto Labs' fourth-quarter diluted earnings per share of $0.36, which represented year-over-year growth of 24%, also set a record. 

Departing President and CEO Brad Cleveland explained, "We were very successful during 2013 on all fronts, including gains with product developers, progress with our Protoworks initiatives, enhancements in our software, exceptional new employees, and of course, successive quarters of record financial results." 

The company's results also managed to beat consensus estimates on the top and bottom lines. On average, analysts expected Proto Labs in the fourth quarter to report revenue of $43.66 million and basic EPS of $0.37. The company's actual revenue of $44.04 million and basic EPS of $0.39 represent solid beats. 

Utilitarian business and why it matters
Proto Labs claims it is "the world's fastest source for custom CNC machined and injection molded parts." The company provides customers with the ability to obtain low volumes of prototype design models in a fast and relatively cheap manner.

The reason Proto Labs is often grouped together with more traditional 3-D companies like 3D Systems and Stratasys is because the company requires 3-D computer-aided-design models from its customers, which it then inputs into a custom tooling system to create the desired molds.

This business, which focuses on the specific needs of individual design-oriented consumers, means Proto Labs has a relatively dependable clientele. This was made most evident last year when management announced it was growing its existing consumer base rather well. In 2013, Proto Labs grew its existing consumer base by 20%, from 4,763 consumers to 5,734 consumers; this means that management has been effective at driving repeat business in its largest segment by revenue. 

3-D type growth
While not a traditional 3-D printing company, Proto Labs is still projected to experience robust growth going forward, growth that is not too far behind the results from more popular and rapidly growing companies 3D Systems and Stratasys. The following table breaks down all three companies' growth projections going forward: 


Proto Labs


3D Systems

Revenue Growth 2014




EPS Growth 2014




Not your average 3-D company
Proto Labs represents a nice alternative investment in the 3-D space. The company is growing rapidly and it recently reported solid earnings results, which indicate that the transition to new management should be achievable in an effective manner.

With a stable business and less headline risk, Proto Labs remains a unique way for investors to benefit from the rise in 3-D design.

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Philip Saglimbeni has no position in any stocks mentioned. The Motley Fool recommends 3D Systems, Proto Labs, and Stratasys. The Motley Fool owns shares of 3D Systems, Proto Labs, and Stratasys. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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