LAKE MARY, Fla., July 16, 2021 /PRNewswire/ -- FARO®
Technologies, Inc. (Nasdaq: FARO), a global leader of 3D
measurement, imaging, and realization solutions for the 3D
Metrology, AEC (Architecture, Engineering & Construction), and
Public Safety Analytics markets, today announced the signing of an
agreement to outsource its manufacturing to Sanmina Corporation, a
US-based Fortune-500 Electronic Manufacturing Service (EMS)
provider.
"As the next step in our business transformation, we plan to
transition FARO production from our three manufacturing sites in
Lake Mary, Florida, Exton, Pennsylvania and Stuttgart, Germany to Sanmina," stated
Michael Burger, President and Chief
Executive Officer. "Following a rigorous selection process, we
selected Sanmina as our partner based upon their proven ability to
deliver quality products on required timelines. Together, we are
confident in our ability to meet customer demand throughout the
transition process."
"While this decision is not easy as it directly affects FARO
employees, once complete our new operational model greatly
simplifies operations, reduces costs and allows our management team
to focus on the development and sale of differentiated technology
to customers in our target markets," Burger continued.
The phased transition to a Sanmina production facility is
expected to be completed over the next twelve months and result in
approximately $12 million in
annualized labor and material savings when complete. FARO believes
the expected savings will have a negligible impact on 2021,
followed by steady improvement through 2022, with the full benefit
to be realized in the first quarter of 2023.
The Company expects to incur a cash charge of approximately
$6 million in the second half of
2021, primarily consisting of cash severance and total pre-tax
charges of $15 to $20 million through the first half of 2022 when
including the impact of facility and other asset write-downs. With
these charges, the Company expects it will fully realize the
$75 to $85
million in restructuring charges announced in February 2020.
About FARO
For 40 years, FARO has provided industry-leading technology
solutions that enable customers to measure their world, and then
use that data to make smarter decisions faster. FARO continues to
be a pioneer in bridging the digital and physical worlds through
data-driven reliable accuracy, precision, and immediacy. For more
information, visit www.faro.com.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995
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 expectations regarding its consolidation and
outsourcing of manufacturing operations, FARO's ability to meet
customer demand, FARO's expectations regarding the planned
transition to a Sanmina production facility, FARO's expectations
regarding Sanmina's ability to deliver quality and cost on required
deadlines, and FARO's strategic and restructuring plans and
initiatives, including but not limited to the additional
restructuring charges expected to be incurred in connection with
our restructuring plan and the timing and amount of cost savings
and other benefits expected to be realized from the restructuring
plan and other strategic initiatives. 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,"
"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 ability to realize the intended benefits of its
undertaking to transition to a company that is reorganized around
functions to improve the efficiency of its sales organization and
to improve operational effectiveness;
- the Company's inability to successfully execute its new
strategic plan and restructuring plan, including but not limited to
additional impairment charges and/or higher than expected severance
costs and exit costs, and its inability to realize the expected
benefits of such plans;
- the Company's inability to realize the anticipated benefits of
its partnership with Sanmina and to successfully transition its
manufacturing operations to Sanmina's production facility;
- 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 effect of the COVID-19 pandemic, including on our business
operations, as well as its impact on general economic and financial
market conditions;
- the impact of fluctuations in 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, 2020 that was filed on
February 17, 2021.
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.
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SOURCE FARO