LAKE MARY, Fla., Aug. 4 /PRNewswire-FirstCall/ -- FARO
Technologies, Inc. (Nasdaq: FARO) today announced results for the
second quarter ended July 3, 2010.
Sales in the second quarter of 2010 increased 32.4%, to
$45.7 million, from $34.6 million in the second quarter of 2009.
The Company reported net income of $1.8 million, or $0.11 per share, compared to a net loss of
$0.13 per share in the second quarter
of 2009. Net income in the second quarter of 2010 includes
the effects of foreign currency transaction losses of $1.8 million, or $0.08 per share, related to the weakening of the
Euro on the value of intercompany account balances.
New order bookings for the second quarter of 2010 were
$43.9 million, an increase of
$8.5 million, or 24.0%, compared to
$35.4 million in the second quarter
of 2009.
"FARO's ongoing dedication to serving our customers, combined
with strong global demand for our product offerings, drove sales
growth of more than 30% in the second quarter," stated Jay Freeland, FARO's President and CEO.
"We continued to see increased activity from all verticals
and across all three regions in the second quarter. Asia
showed substantial strength, growing more than 50% for the second
quarter in a row, with Europe and
the Americas also delivering high double-digit growth."
Gross margin for the second quarter of 2010 was 59.3%, compared
to 56.1% in the second quarter of 2009. Gross margin increased
primarily due to an increase in the proportion of higher margin
product sales relative to lower margin service revenue.
"Gross margin has returned to historical levels and we've been
able to maintain stable prices. Tight cost controls allowed
us to leverage the efficiency we created within the business last
year and as a result, generated operating margin of 9.9%, or
$4.5 million, almost a 20 point
improvement from 2009. I'm very pleased with the Company's
performance in the first half and we remain cautiously optimistic
about 2010. However, because of the ongoing economic
uncertainty around the world, I am maintaining our practice of not
providing guidance for this year," Freeland concluded.
This press release contains forward-looking statements
(within the meaning of the Private Securities Litigation Reform Act
of 1995) that are subject to risks and uncertainties, such as
statements about FARO's focus, plans and strategies, and its future
operating results and financial condition. Statements that are not
historical facts or that describe the Company's plans, objectives,
projections, expectations, assumptions, strategies, or goals are
forward-looking statements. In addition, words such as "intend,"
"believe," "will," "expect" and similar expressions or discussions
of our strategy or other intentions identify forward-looking
statements. Forward-looking statements are not guarantees of future
performance and are subject to various known and unknown risks,
uncertainties, and other factors that may cause actual results,
performances, or achievements to differ materially from future
results, performances, or achievements expressed or implied by such
forward-looking statements. Consequently, undue reliance should not
be placed on these forward-looking statements.
Factors that could cause actual results to differ materially
from what is expressed or forecasted in such forward-looking
statements include, but are not limited to:
- development by others of new or improved products, processes
or technologies that make the Company's products obsolete or less
competitive;
- the cyclical nature of the industries of the Company's
customers and material adverse changes in customers' access
to liquidity and capital;
- declines or other adverse changes, or lack of improvement,
in industries that the Company serves or the domestic and
international economies in the regions of the world where the
Company operates and other general economic, business, and
financing conditions;
- fluctuations in the Company's annual and quarterly operating
results and the inability to achieve its financial operating
targets;
- risks associated with expanding international operations,
such as fluctuations in currency exchange rates, difficulties in
staffing and managing foreign operations, political and economic
instability, compliance with import and export regulations, and the
burdens and potential exposure of complying with a wide variety of
U.S. and foreign laws and labor practices;
- other risks detailed in Part I, Item 1A. Risk Factors
in the Company's Annual Report on Form 10-K for the year
ended December 31, 2009.
Forward-looking statements in this release represent the
Company's judgment as of the date of this release. The Company
undertakes no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events,
or otherwise.
About FARO
With approximately 20,000 installations and 11,000 customers
globally, FARO Technologies, Inc. designs, develops, and markets
portable, computerized measurement and imaging devices and software
used to create digital models -- or to perform evaluations against
an existing model -- for anything requiring highly detailed 3-D
measurements, including part and assembly inspection, factory
planning and asset documentation, as well as specialized
applications ranging from surveying, recreating accident sites and
crime scenes to digitally preserving historical sites.
FARO's technology increases productivity by dramatically
reducing the amount of on-site measuring time, and the various
industry-specific software packages enable users to process and
present their results quickly and more effectively.
Principal products include the world's best-selling portable
measurement arm -- the FaroArm; the world's best-selling laser
tracker -- the FARO Laser Tracker X and Xi; the FARO Laser ScanArm;
FARO Photon Laser Scanners; the FARO Gage, Gage-PLUS and PowerGAGE;
and the CAM2 Q family of advanced CAD-based measurement and
reporting software. FARO Technologies is ISO-9001 certified and
ISO-17025 laboratory registered.
FARO TECHNOLOGIES, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except share and
per share data)
|
|
Jul 3, 2010
|
|
Jul 4, 2009
|
|
|
Jul 3, 2010
|
|
Jul 4, 2009
|
|
SALES
|
|
|
|
|
|
|
|
|
|
|
Product
|
|
$
37,212
|
|
$
27,203
|
|
|
$
71,150
|
|
$
51,416
|
|
Service
|
|
8,493
|
|
7,313
|
|
|
16,824
|
|
14,548
|
|
Total Sales
|
|
45,705
|
|
34,516
|
|
|
87,974
|
|
65,964
|
|
COST OF SALES
|
|
|
|
|
|
|
|
|
|
|
Product
|
|
12,620
|
|
10,259
|
|
|
23,895
|
|
19,386
|
|
Service
|
|
5,997
|
|
4,893
|
|
|
11,600
|
|
10,955
|
|
Total Cost of Sales (exclusive
of depreciation and amortization, shown separately
below)
|
|
18,617
|
|
15,152
|
|
|
35,495
|
|
30,341
|
|
GROSS PROFIT
|
|
27,088
|
|
19,364
|
|
|
52,479
|
|
35,623
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
Selling
|
|
12,027
|
|
12,128
|
|
|
23,262
|
|
24,952
|
|
General and
administrative
|
|
6,028
|
|
6,134
|
|
|
12,275
|
|
12,433
|
|
Depreciation and
amortization
|
|
1,515
|
|
1,389
|
|
|
3,055
|
|
2,680
|
|
Research and
development
|
|
2,997
|
|
3,285
|
|
|
5,986
|
|
6,764
|
|
Total operating
expenses
|
|
22,567
|
|
22,936
|
|
|
44,578
|
|
46,829
|
|
INCOME (LOSS) FROM
OPERATIONS
|
|
4,521
|
|
(3,572)
|
|
|
7,901
|
|
(11,206)
|
|
OTHER (INCOME)
EXPENSE
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
(26)
|
|
(36)
|
|
|
(45)
|
|
(194)
|
|
Other expense (income),
net
|
|
1,839
|
|
(837)
|
|
|
2,344
|
|
(176)
|
|
Interest expense
|
|
2
|
|
4
|
|
|
29
|
|
6
|
|
INCOME (LOSS) BEFORE INCOME TAX
EXPENSE (BENEFIT)
|
|
2,706
|
|
(2,703)
|
|
|
5,573
|
|
(10,842)
|
|
INCOME TAX EXPENSE
(BENEFIT)
|
|
869
|
|
(599)
|
|
|
1,672
|
|
(2,153)
|
|
NET INCOME (LOSS)
|
|
$
1,837
|
|
$
(2,104)
|
|
|
$
3,901
|
|
$
(8,689)
|
|
NET INCOME (LOSS) PER SHARE -
BASIC
|
|
$
0.11
|
|
$
(0.13)
|
|
|
$
0.24
|
|
$
(0.53)
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) PER SHARE -
DILUTED
|
|
$
0.11
|
|
$
(0.13)
|
|
|
$
0.24
|
|
$
(0.53)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares -
Basic
|
|
16,148,233
|
|
16,069,312
|
|
|
16,136,447
|
|
16,408,259
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares -
Diluted
|
|
16,320,596
|
|
16,069,312
|
|
|
16,289,963
|
|
16,408,259
|
|
|
|
|
|
|
|
|
|
|
|
FARO TECHNOLOGIES, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
|
|
|
|
July 3,
|
|
|
|
|
|
2010
|
|
December 31,
|
|
(in thousands, except share
data)
|
|
Unaudited
|
|
2009
|
|
ASSETS
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$ 41,929
|
|
$
35,078
|
|
Short-term
investments
|
|
64,985
|
|
64,986
|
|
Accounts receivable,
net
|
|
40,348
|
|
42,944
|
|
Inventories, net
|
|
27,184
|
|
26,582
|
|
Deferred income taxes,
net
|
|
4,242
|
|
4,473
|
|
Prepaid expenses and other
current assets
|
|
7,471
|
|
6,016
|
|
Total current assets
|
|
186,159
|
|
180,079
|
|
Property and
Equipment:
|
|
|
|
|
|
Machinery and
equipment
|
|
21,916
|
|
19,867
|
|
Furniture and
fixtures
|
|
5,013
|
|
5,225
|
|
Leasehold
improvements
|
|
9,366
|
|
9,434
|
|
Property and
equipment at cost
|
|
36,295
|
|
34,526
|
|
Less: accumulated depreciation
and amortization
|
|
(22,040)
|
|
(20,788)
|
|
Property and
equipment, net
|
|
14,255
|
|
13,738
|
|
Goodwill
|
|
18,249
|
|
19,934
|
|
Intangible assets,
net
|
|
7,208
|
|
7,985
|
|
Service inventory
|
|
12,192
|
|
12,079
|
|
Deferred income taxes,
net
|
|
1,677
|
|
1,895
|
|
Total Assets
|
|
$ 239,740
|
|
$
235,710
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$ 9,701
|
|
$
8,985
|
|
Accrued liabilities
|
|
10,860
|
|
8,173
|
|
Income taxes payable
|
|
-
|
|
229
|
|
Current portion of unearned
service revenues
|
|
11,888
|
|
12,226
|
|
Customer deposits
|
|
2,486
|
|
2,173
|
|
Current portion of obligations
under capital leases
|
|
43
|
|
80
|
|
Total
current liabilities
|
|
34,978
|
|
31,866
|
|
Unearned service revenues - less
current portion
|
|
5,932
|
|
5,910
|
|
Deferred tax liability,
net
|
|
1,008
|
|
1,143
|
|
Obligations under capital leases
- less current portion
|
|
203
|
|
193
|
|
Total Liabilities
|
|
42,121
|
|
39,112
|
|
|
|
|
|
|
|
Shareholders' Equity:
|
|
|
|
|
|
Common stock - par value $.001,
50,000,000 shares authorized; 16,839,592 and 16,795,289 issued;
16,159,357 and 16,115,054 outstanding, respectively
|
|
17
|
|
17
|
|
Additional paid-in
capital
|
|
153,961
|
|
152,380
|
|
Retained earnings
|
|
50,816
|
|
46,915
|
|
Accumulated other comprehensive
income
|
|
1,900
|
|
6,361
|
|
Common stock in treasury, at
cost - 680,235 shares
|
|
(9,075)
|
|
(9,075)
|
|
Total Shareholders'
Equity
|
|
197,619
|
|
196,598
|
|
Total Liabilities and
Shareholders' Equity
|
|
$ 239,740
|
|
$
235,710
|
|
|
|
|
|
|
FARO TECHNOLOGIES, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
(in thousands)
|
|
July 3,
2010
|
|
July 4,
2009
|
|
CASH FLOWS FROM:
|
|
|
|
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
Net income (loss)
|
|
$
3,901
|
|
$
(8,689)
|
|
Adjustments to reconcile net
income (loss) to net cash provided by
|
|
|
|
|
|
(used in) operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
3,055
|
|
2,680
|
|
Compensation for stock options
and restricted stock units
|
|
1,203
|
|
1,201
|
|
Provision for bad
debts
|
|
806
|
|
649
|
|
Deferred income tax
expense
|
|
280
|
|
180
|
|
Change in operating assets and
liabilities:
|
|
|
|
|
|
Decrease (increase)
in:
|
|
|
|
|
|
Accounts receivable
|
|
(1,388)
|
|
16,208
|
|
Inventories, net
|
|
(4,950)
|
|
4,088
|
|
Prepaid expenses and other
current assets
|
|
(1,837)
|
|
(2,402)
|
|
Income tax benefit from exercise
of stock options
|
|
(16)
|
|
-
|
|
Increase (decrease)
in:
|
|
|
|
|
|
Accounts payable and accrued
liabilities
|
|
4,003
|
|
(12,451)
|
|
Income taxes payable
|
|
(275)
|
|
(1,990)
|
|
Customer deposits
|
|
328
|
|
462
|
|
Unearned service
revenues
|
|
713
|
|
(688)
|
|
Net cash provided by (used in) operating
activities
|
|
5,823
|
|
(752)
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
Purchases of property and
equipment
|
|
(1,253)
|
|
(2,663)
|
|
Payments for intangible
assets
|
|
(382)
|
|
(291)
|
|
Purchases of short-term
investments
|
|
-
|
|
(64,972)
|
|
Proceeds from sales of
short-term investments
|
|
-
|
|
81,967
|
|
Net
cash (used in) provided by investing activities
|
|
(1,635)
|
|
14,041
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
Proceeds from notes
payable
|
|
2,490
|
|
-
|
|
Payments on notes
payable
|
|
(2,490)
|
|
-
|
|
Payments on capital
leases
|
|
(39)
|
|
(61)
|
|
Income tax benefit from exercise
of stock options
|
|
16
|
|
-
|
|
Purchases of treasury
stock
|
|
-
|
|
(8,829)
|
|
Proceeds from issuance of stock,
net
|
|
363
|
|
-
|
|
Net
cash provided by (used in) financing activities
|
|
340
|
|
(8,890)
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS
|
|
2,323
|
|
(1,103)
|
|
|
|
|
|
|
|
INCREASE IN CASH AND CASH
EQUIVALENTS
|
|
6,851
|
|
3,296
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD
|
|
35,078
|
|
23,494
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, END
OF PERIOD
|
|
$
41,929
|
|
$
26,790
|
|
|
|
|
|
|
SOURCE FARO Technologies, Inc.
Copyright g. 4 PR Newswire