By acquiring Fineline Prototyping, rapid manufacturing specialist Proto Labs (NYSE:PRLB) now has the ability to offer a suite of 3-D printing services to its existing customer base, of which 70% already use 3-D printing as part of their product development process. The acquisition underscores Proto Labs' relentless focus on serving its customers better, while also taking advantaging of a growing worldwide market opportunity in 3-D printing services. From an investor perspective, the move makes a lot of strategic sense, because it uniquely positions Proto Labs to serve product designers all the way from the early prototyping stages to mid-volume manufacturing runs with real manufacturing processes like injection molding.
I recently had the opportunity to exchange emails with Proto Labs' recently appointed CEO Vicki Holt about the Fineline acquisition and the company's future 3-D printing plans. Below is an excerpt from our conversation about how Proto Labs' customers use 3-D printing. Going forward, Proto Labs investors should expect that not only will the company solicit its existing customers for 3-D printing services, but it will likely target specific 3-D printing applications that are increasing in popularity, like aerospace and medical.
Steve Heller: Which 3-D printing technologies are Proto Labs' customers asking for the most, and for what purpose?
Vicki Holt: Some customers know exactly what they want; they need a particular part made in a specific material and manufacturing service. What we are finding, though, is that there are segments of customers that just need a part. One of the advantages with Proto Labs is that we have one of the broadest scopes of prototyping options available to product development engineers. We can then work with our customers in a more consultative manner to direct them into the additive [3-D printing], or machining, or molding service that is best suited for their project.
For example, if an engineer needs a few metal parts, it might make sense to conduct early prototyping with DMLS [direct metal laser sintering; a 3-D printing process] for concept models and form and fit testing, or CNC machining for functional testing, then when their design is properly vetted and volume is increased, metal injection molding might be a logical next step. We try to understand part geometry, how many parts they need, their stage in the development process, and other factors, then guide them into the right process.
Heller: From a business perspective, what 3-D printing applications will Proto Labs be most focused on?
Holt: Like Proto Labs' Firstcut CNC machining and Protomold injection molding services, our Fineline additive manufacturing [3-D printing] processes create parts for applications across all industries, but we do work within certain industries more than others. Fineline has a history of working with many medical companies to produce parts for devices, but also builds parts for electronics, consumer products, and the aerospace industry.