LAKE MARY, Fla., Oct. 31, 2012 /PRNewswire/ -- FARO
Technologies, Inc. (NASDAQ: FARO) today announced results for the
third quarter ended September 29,
2012. Sales in the third quarter of 2012 decreased
6.3% to $60.7 million, from
$64.8 million in the third quarter of
2011. The Company reported net income decreased to
$3.7 million, or $0.21 per share, in the third quarter of 2012,
from $6.4 million, or $0.38 per share, in the third quarter of
2011.
(Logo: http://photos.prnewswire.com/prnh/20110415/MM84316LOGO
)
New order bookings for the third quarter of 2012 were
$61.0 million, an increase of 1.3%
from $60.2 million in the third
quarter of 2011.
"Customer interest was strong in the third quarter, with leads
and demos at historical rates, but economic weakness and
uncertainty, particularly in Europe, resulted in delayed customer purchase
decisions," stated Jay Freeland,
FARO's President and CEO. "We successfully launched the new
Vantage Laser Tracker which received positive customer response and
we undertook several product promotions. However, these
initiatives were still not sufficient to offset the impact of the
difficult economic climate overall."
Gross margin for the third quarter of 2012 was 53.2%, compared
to 56.1% in the third quarter of 2011 and reflects lower average
selling prices across major product lines, due to promotions for
older model products and other pricing initiatives as well as
additional manufacturing costs related to the introduction of the
new Vantage Laser Tracker.
The Company's operating margin for the third quarter decreased
to 8.3%, compared to 15.4% in the third quarter of 2011 and
included approximately $1.0 million
of professional fees related to the Company's patent
litigation.
"In anticipation of continuing economic uncertainty, we intend
to aggressively pursue all available sales channels, invest in
R&D and maintain tight cost controls across all areas of the
business," 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 demand for its products, 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 FARO's plans 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;
- production delays caused by shortages of raw materials
incorporated in the Company's products;
- 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;
- risks associated with 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, 2011.
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 over 30,000 installations and 15,000 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 Vantage; the FARO Laser ScanArm;
FARO Focus 3D Laser Scanner; 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 BALANCE SHEETS
|
|
|
|
|
|
|
|
September
29,
|
|
|
|
|
2012
|
|
December
31,
|
(in
thousands, except share data)
|
|
Unaudited
|
|
2011
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and
cash equivalents
|
|
$
80,505
|
|
$
64,540
|
Short-term
investments
|
|
64,989
|
|
64,997
|
Accounts
receivable, net
|
|
51,014
|
|
57,512
|
Inventories, net
|
|
53,348
|
|
49,934
|
Deferred
income taxes, net
|
|
6,090
|
|
5,297
|
Prepaid
expenses and other current assets
|
|
10,383
|
|
9,207
|
Total
current assets
|
|
266,329
|
|
251,487
|
Property
and Equipment:
|
|
|
|
|
Machinery
and equipment
|
|
31,427
|
|
29,171
|
Furniture
and fixtures
|
|
6,406
|
|
5,963
|
Leasehold
improvements
|
|
10,780
|
|
10,233
|
Property and equipment at cost
|
|
48,613
|
|
45,367
|
Less:
accumulated depreciation and amortization
|
|
(32,776)
|
|
(29,134)
|
Property and equipment, net
|
|
15,837
|
|
16,233
|
Goodwill
|
|
18,517
|
|
18,610
|
Intangible
assets, net
|
|
6,727
|
|
6,849
|
Service
inventory
|
|
19,535
|
|
17,316
|
Deferred
income taxes, net
|
|
2,270
|
|
2,296
|
Total
Assets
|
|
$
329,215
|
|
$
312,791
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
7,995
|
|
$
13,396
|
Accrued
liabilities
|
|
16,242
|
|
18,076
|
Income
taxes payable
|
|
1,611
|
|
2,682
|
Current
portion of unearned service revenues
|
|
17,163
|
|
15,638
|
Customer
deposits
|
|
2,347
|
|
4,072
|
Current
portion of obligations under capital leases
|
|
18
|
|
84
|
Total current
liabilities
|
|
45,376
|
|
53,948
|
Unearned
service revenues - less current portion
|
|
9,648
|
|
9,540
|
Deferred
tax liability, net
|
|
1,259
|
|
1,148
|
Obligations under capital leases - less current
portion
|
|
66
|
|
257
|
Total
Liabilities
|
|
56,349
|
|
64,893
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity:
|
|
|
|
|
|
|
|
|
|
Common
stock - par value $.001, 50,000,000 shares authorized;
17,651,780
and
17,381,110 issued; 16,971,545 and 16,700,875 outstanding,
respectively
|
|
18
|
|
17
|
Additional
paid-in-capital
|
|
179,975
|
|
169,780
|
Retained
earnings
|
|
96,519
|
|
81,360
|
Accumulated other comprehensive income
|
|
5,429
|
|
5,816
|
Common
stock in treasury, at cost - 680,235 shares
|
|
(9,075)
|
|
(9,075)
|
Total
Shareholders' Equity
|
|
272,866
|
|
247,898
|
Total
Liabilities and Shareholders' Equity
|
|
$
329,215
|
|
$
312,791
|
FARO
TECHNOLOGIES, INC. AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Nine
Months Ended
|
|
|
|
|
|
|
|
|
|
(in
thousands, except share and per share data)
|
|
Sept 29,
2012
|
|
Oct 1,
2011
|
|
Sept 29,
2012
|
|
Oct 1,
2011
|
SALES
|
|
|
|
|
|
|
|
|
Product
|
|
$
49,274
|
|
$
54,032
|
|
$
159,130
|
|
$
146,682
|
Service
|
|
11,460
|
|
10,775
|
|
33,595
|
|
30,402
|
Total
Sales
|
|
60,734
|
|
64,807
|
|
192,725
|
|
177,084
|
|
|
|
|
|
|
|
|
|
COST OF
SALES
|
|
|
|
|
|
|
|
|
Product
|
|
21,107
|
|
21,605
|
|
63,933
|
|
56,527
|
Service
|
|
7,323
|
|
6,813
|
|
22,242
|
|
20,380
|
Total Cost
of Sales (exclusive of depreciation and
amortization, shown separately below)
|
|
28,430
|
|
28,418
|
|
86,175
|
|
76,907
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
32,304
|
|
36,389
|
|
106,550
|
|
100,177
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
Selling
|
|
14,154
|
|
14,696
|
|
46,033
|
|
44,157
|
General
and administrative
|
|
7,266
|
|
6,424
|
|
22,028
|
|
19,931
|
Depreciation and amortization
|
|
1,796
|
|
1,711
|
|
5,164
|
|
5,047
|
Research
and development
|
|
4,065
|
|
3,591
|
|
12,998
|
|
11,037
|
Total
operating expenses
|
|
27,281
|
|
26,422
|
|
86,223
|
|
80,172
|
|
|
|
|
|
|
|
|
|
INCOME
FROM OPERATIONS
|
|
5,023
|
|
9,967
|
|
20,327
|
|
20,005
|
|
|
|
|
|
|
|
|
|
OTHER
(INCOME) EXPENSE
|
|
|
|
|
|
|
|
|
Interest
income
|
|
(20)
|
|
(19)
|
|
(141)
|
|
(84)
|
Other
expense, net
|
|
(46)
|
|
780
|
|
215
|
|
775
|
Interest
expense
|
|
2
|
|
2
|
|
22
|
|
33
|
|
|
|
|
|
|
|
|
|
INCOME
BEFORE INCOME TAX
EXPENSE
|
|
5,087
|
|
9,204
|
|
20,231
|
|
19,281
|
|
|
|
|
|
|
|
|
|
INCOME TAX
EXPENSE
|
|
1,414
|
|
2,775
|
|
5,074
|
|
5,376
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
|
$
3,673
|
|
$
6,429
|
|
$
15,157
|
|
$
13,905
|
|
|
|
|
|
|
|
|
|
NET INCOME
PER SHARE - BASIC
|
|
$
0.22
|
|
$
0.39
|
|
$
0.90
|
|
$
0.85
|
|
|
|
|
|
|
|
|
|
NET INCOME
PER SHARE - DILUTED
|
|
$
0.21
|
|
$
0.38
|
|
$
0.88
|
|
$
0.83
|
|
|
|
|
|
|
|
|
|
Weighted
average shares - Basic
|
|
16,944,120
|
|
16,609,005
|
|
16,892,338
|
|
16,435,337
|
|
|
|
|
|
|
|
|
|
Weighted
average shares - Diluted
|
|
17,094,102
|
|
16,849,282
|
|
17,148,555
|
|
16,788,776
|
FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Nine
Months Ended
|
(in
thousands)
|
|
Sept 29,
2012
|
|
Oct 1,
2011
|
|
Sept 29,
2012
|
|
Oct 1,
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
3,673
|
|
$
6,429
|
|
$
15,157
|
|
$
13,905
|
Currency
translation adjustments
|
|
1,303
|
|
(4,578)
|
|
(385)
|
|
764
|
Comprehensive income
|
|
$
4,976
|
|
$
1,851
|
|
$
14,772
|
|
$
14,669
|
FARO
TECHNOLOGIES, INC. AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
Nine
Months Ended
|
|
|
|
|
|
(in
thousands)
|
|
Sept
29, 2012
|
|
Oct 1,
2011
|
CASH FLOWS
FROM:
|
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
|
Net
income
|
|
$
15,157
|
|
$
13,905
|
Adjustments to reconcile net income to net cash
provided by (used in)
|
|
|
|
|
operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
5,164
|
|
5,047
|
Compensation for stock options and restricted stock
units
|
|
2,956
|
|
2,042
|
Provision
for bad debts
|
|
(155)
|
|
1,620
|
Deferred
income tax (benefit) expense
|
|
(670)
|
|
111
|
Change in
operating assets and liabilities:
|
|
|
|
|
Decrease
(increase) in:
|
|
|
|
|
Accounts
receivable
|
|
6,398
|
|
(460)
|
Inventories, net
|
|
(5,998)
|
|
(23,682)
|
Prepaid
expenses and other current assets
|
|
(1,231)
|
|
(2,707)
|
Income tax
benefit from exercise of stock options
|
|
(1,135)
|
|
(1,412)
|
Increase
(decrease) in:
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
(7,307)
|
|
1,068
|
Income
taxes payable
|
|
82
|
|
597
|
Customer
deposits
|
|
(1,707)
|
|
(1,116)
|
Unearned
service revenues
|
|
1,730
|
|
3,593
|
Net cash provided by (used in) operating activities
|
|
13,284
|
|
(1,394)
|
|
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
Purchases
of property and equipment
|
|
(3,139)
|
|
(3,370)
|
Payments
for intangible assets
|
|
(772)
|
|
(646)
|
Net
cash used in investing activities
|
|
(3,911)
|
|
(4,016)
|
|
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
Payments
on capital leases
|
|
(119)
|
|
(140)
|
Income tax
benefit from exercise of stock options
|
|
1,135
|
|
1,412
|
Proceeds
from issuance of stock, net
|
|
6,107
|
|
7,727
|
Net
cash provided by financing activities
|
|
7,123
|
|
8,999
|
|
|
|
|
|
EFFECT OF
EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
|
(531)
|
|
34
|
|
|
|
|
|
INCREASE IN
CASH AND CASH EQUIVALENTS
|
|
15,965
|
|
3,623
|
|
|
|
|
|
CASH AND
CASH EQUIVALENTS, BEGINNING OF PERIOD
|
|
64,540
|
|
50,722
|
|
|
|
|
|
CASH AND
CASH EQUIVALENTS, END OF PERIOD
|
|
$
80,505
|
|
$
54,345
|
SOURCE FARO Technologies, Inc.