LAKE MARY, Fla., April 28, 2015 /PRNewswire/ -- FARO Technologies,
Inc. (NASDAQ: FARO) today announced its financial results for the
first quarter ended March 28,
2015.
The Company's first quarter 2015 sales of $69.9 million decreased 4.7% from $73.4 million in the first quarter of 2014.
Excluding approximately $7.0 million
of unfavorable foreign exchange impacts, the Company's first
quarter 2015 sales would have increased approximately 5% as
compared to the first quarter of 2014. Net income decreased
$4.3 million, or 86.7%, to
$0.7 million, or $0.04 per share, in the first quarter of 2015
from $5.0 million, or $0.29 per share, in the first quarter of
2014.
First quarter 2015 new order bookings of $69.1 million decreased by $1.8 million, or 2.6%, from $70.9 million in the first quarter of 2014.
Excluding approximately $7.0 million
of unfavorable foreign exchange impacts, new order bookings would
have increased approximately 7% as compared to the same quarter
last year.
Gross margin of 56.6% increased 2.0 percentage points in the
first quarter of 2015 as compared to the first quarter of
2014. This solid increase was primarily driven by a higher
Arm average selling price and an increase in service margin from
strong revenue growth as the Company's installed base continues to
grow in the market.
Operating margin decreased to 2.7% in the first quarter of 2015
from 9.5% in the first quarter of 2014 primarily driven by a
decrease in gross profit on lower sales and higher fixed operating
expenses in support of long term growth. The Company
continued to demonstrate its commitment to new disruptive product
development by increasing research and development spending by
$0.9 million, or 17.1% from the first
quarter of 2014, to $6.4 million in
the first quarter of 2015.
"Our first quarter sales reflect the impacts of foreign currency
and challenging macro-economic conditions for capital spending, but
do not tell the complete story of the underlying FARO business to
start 2015," stated Jay Freeland,
FARO's President and CEO. "Excluding approximately
$5.4 million of unfavorable foreign
exchange impacts, our Europe/Africa
reported sales of $22.2 million would
have shown year-over-year growth of almost 16%. Our 3D
documentation portfolio continued its strong growth with the FARO
Focus3D laser scanner posting over 20% year-over-year
unit sales growth and our new FARO Freestyle3D laser
scanner launching with strong demand. In the first quarter,
we continued our strategic focus to strengthen our position in the
AEC and law enforcement verticals by acquiring highly regarded
software innovators, ARAS 360 and kubit GmbH. In response to
the top line growth headwinds, we are taking pro-active, deliberate
action now to opportunistically take cost out of the business,
without inhibiting our ability to continue to develop new,
disruptive products to deliver long term growth for our
shareholders."
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 growth, demand for and customer
acceptance of FARO's products, anticipated improvement in the
markets in which FARO operates, and FARO's product development and
product launches. 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 "is,"
"are," "future," "will," 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:
- the Company's inability to successfully identify and acquire
target companies or achieve expected benefits from acquisitions
that are consummated;
- development by others of new or improved products, processes
or technologies that make the Company's products less
competitive or obsolete;
- the Company's inability to maintain its technological
advantage by developing new products and enhancing its existing
products;
- 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
financial conditions;
- the impact of fluctuations of foreign exchange rates;
and
- 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, 2014.
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, unless otherwise required
by law.
About FARO
FARO is the world's most trusted source for 3D measurement
technology. The Company develops and markets computer-aided
measurement and imaging devices and software. Technology from FARO
permits high-precision 3D measurement, imaging and comparison of
parts and complex structures within production and quality
assurance processes. The devices are used for inspecting components
and assemblies, rapid prototyping, documenting large volume spaces
or structures in 3D, surveying and construction, as well as for
investigation and reconstruction of accident sites or crime
scenes.
The Company's global headquarters is located in Lake Mary, FL; its European regional
headquarters in Stuttgart,
Germany; and its Asia
Pacific regional headquarters in Singapore. FARO has other offices in
the United States, Canada, Mexico, Brazil, Germany, the United
Kingdom, France,
Spain, Italy, Poland, Turkey, the
Netherlands, Switzerland,
Portugal, India, China,
Malaysia, Vietnam, Thailand, South
Korea, and Japan.
More information is available at http://www.faro.com
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FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
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CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
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(UNAUDITED)
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Three Months
Ended
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(in thousands, except
share and per share data)
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March 28,
2015
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March 29,
2014
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SALES
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Product
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$
55,044
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$
59,822
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Service
|
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14,895
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13,552
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Total
sales
|
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69,939
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73,374
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COST OF
SALES
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Product
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22,177
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25,153
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Service
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|
8,151
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8,138
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Total cost of
sales (exclusive of depreciation and amortization, shown separately
below)
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30,328
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33,291
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GROSS
PROFIT
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39,611
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40,083
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OPERATING
EXPENSES
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Selling and
marketing
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19,105
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17,433
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General and
administrative
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9,801
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8,413
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Depreciation and
amortization
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2,493
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1,847
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Research and
development
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6,356
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5,430
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Total operating
expenses
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37,755
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33,123
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INCOME FROM
OPERATIONS
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1,856
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6,960
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OTHER (INCOME)
EXPENSE
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Interest
income
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(19)
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(17)
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Other expense,
net
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1,307
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|
160
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INCOME BEFORE INCOME
TAX (BENEFIT) EXPENSE
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|
568
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6,817
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INCOME TAX (BENEFIT)
EXPENSE
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(96)
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1,841
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NET
INCOME
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$
664
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|
$
4,976
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NET INCOME PER SHARE
- BASIC
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$
0.04
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$
0.29
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NET INCOME PER SHARE
- DILUTED
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$
0.04
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$
0.29
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Weighted average
shares - Basic
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17,335,464
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17,205,892
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Weighted average
shares - Diluted
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17,511,821
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17,364,373
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FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
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CONDENSED
CONSOLIDATED BALANCE SHEETS
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March 28,
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2015
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December
31,
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(in thousands, except
share data)
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(unaudited)
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2014
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ASSETS
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Current
assets:
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Cash and cash
equivalents
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$ 96,066
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$ 109,289
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Short-term
investments
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64,993
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64,995
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Accounts
receivable, net
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62,339
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83,959
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Inventories,
net
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66,652
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59,334
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Deferred income
taxes, net
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5,860
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5,936
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Prepaid
expenses and other current assets
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17,809
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17,021
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Total current assets
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313,719
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340,534
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Property and
equipment:
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Machinery and
equipment
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46,067
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45,254
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Furniture and
fixtures
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5,984
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6,156
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Leasehold
improvements
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19,658
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19,676
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Property and equipment at cost
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71,709
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71,086
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Less:
accumulated depreciation and amortization
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(41,608)
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(41,741)
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Property and equipment, net
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30,101
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29,345
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Goodwill
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25,761
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19,205
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Intangible assets,
net
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16,933
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9,109
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Service
inventory
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21,494
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20,646
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Deferred income
taxes, net
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6,453
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|
6,624
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Total
assets
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$ 414,461
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$ 425,463
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LIABILITIES AND
SHAREHOLDERS' EQUITY
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Current
liabilities:
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Accounts
payable
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$ 11,196
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$ 15,437
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Accrued
liabilities
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19,771
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26,127
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Current portion
of unearned service revenues
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23,040
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23,572
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Customer
deposits
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1,556
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2,046
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Total current
liabilities
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55,563
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67,182
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Unearned service
revenues - less current portion
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13,201
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13,799
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Deferred income tax
liability
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2,025
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-
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Other long-term
liabilities
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2,423
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628
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Total
liabilities
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73,212
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81,609
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Shareholders'
equity:
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Common stock -
par value $.001, 50,000,000 shares authorized; 18,057,768 and
17,997,665 issued; 17,377,533 and 17,317,430 outstanding,
respectively
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18
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18
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Additional
paid-in capital
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203,599
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200,090
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Retained
earnings
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160,180
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159,516
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Accumulated
other comprehensive income
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(13,473)
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(6,695)
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Common stock in
treasury, at cost - 680,235 shares
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(9,075)
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(9,075)
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Total shareholders'
equity
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341,249
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343,854
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Total liabilities and
shareholders' equity
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$ 414,461
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$ 425,463
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FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
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(UNAUDITED)
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Three Months
Ended
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(in
thousands)
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March 28,
2015
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March 29,
2014
|
CASH FLOWS
FROM:
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OPERATING
ACTIVITIES:
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Net
income
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$
664
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$
4,976
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Adjustments to
reconcile net income to net cash provided by (used in) operating
activities:
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Depreciation
and amortization
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2,493
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1,847
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Compensation
for stock options and restricted stock units
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1,198
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1,246
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(Net
recovery of) provision for bad debts
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319
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(120)
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Write-down of inventories
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1,028
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1,661
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Deferred
income tax (benefit) expense
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2,272
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(410)
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Income
tax benefit from exercise of stock options
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(292)
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(58)
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Change in operating
assets and liabilities:
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Decrease
(increase) in:
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Accounts
receivable
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18,405
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1,869
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Inventories
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(14,221)
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(4,202)
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Prepaid
expenses and other current assets
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(1,562)
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(539)
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(Decrease)
increase in:
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Accounts
payable and accrued liabilities
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(9,550)
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(6,103)
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Income
taxes payable
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263
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(1,619)
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Customer
deposits
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(457)
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(645)
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Unearned
service revenues
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211
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1,274
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Net cash
provided by (used in) operating activities
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771
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(823)
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INVESTING
ACTIVITIES:
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Purchases of
property and equipment
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(2,436)
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(2,124)
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Payments
for intangible assets
|
|
(133)
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(419)
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Purchase of
business acquired
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(12,011)
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-
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Net cash
used in investing activities
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(14,580)
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(2,543)
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FINANCING
ACTIVITIES:
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Payments on
capital leases
|
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(2)
|
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(50)
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Income
tax benefit from exercise of stock options
|
|
292
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|
58
|
Proceeds from
issuance of stock, net
|
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2,019
|
|
1,619
|
Net cash
provided by financing activities
|
|
2,309
|
|
1,627
|
|
|
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|
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EFFECT OF EXCHANGE
RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
|
(1,723)
|
|
(175)
|
|
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DECREASE IN CASH AND
CASH EQUIVALENTS
|
|
(13,223)
|
|
(1,914)
|
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CASH AND CASH
EQUIVALENTS, BEGINNING OF PERIOD
|
|
109,289
|
|
124,630
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS, END OF PERIOD
|
|
$
96,066
|
|
$
122,716
|
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
(UNAUDITED)
|
|
|
|
|
|
|
|
Three Months
Ended
|
(in
thousands)
|
|
March 28,
2015
|
|
March 29,
2014
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
664
|
|
$
4,976
|
Currency translation
adjustments, net of tax
|
|
(6,778)
|
|
(81)
|
Comprehensive income
(loss)
|
|
$
(6,114)
|
|
$
4,895
|
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SOURCE FARO Technologies, Inc.