LAKE MARY, Fla., Feb. 16, 2022 /PRNewswire/
-- FARO® (Nasdaq: FARO), a leading global source
for 3D measurement and imaging solutions for the 3D Metrology, AEC
(Architecture, Engineering & Construction), and Public Safety
Analytics applications, today announced its financial results for
the fourth quarter and full year ended December 31, 2021.
"Fourth quarter revenue grew sequentially 27% to $100.2 million as a result of continued pandemic
related market recovery, seasonal strength and a 43% sequential
increase in arm shipments fueled by our recently released Quantum
Max ScanArm, while a strong dollar exchange rate and supply chain
challenges muted overall reported revenue levels," stated
Michael Burger, President and Chief
Executive Officer. "Additionally, our Holobuilder SaaS revenue
remains on track to double over the next year, with the addition of
a mid-six figure annual recurring revenue deal signed in the
quarter."
Mr. Burger continued, "Looking ahead, we are encouraged by the
pace of demand recovery and while the current supply chain
environment creates uncertainty, we believe the combination of new
product introductions and the launch of FARO Sphere will further
strengthen demand as we move through 2022."
Fourth Quarter 2021 Financial Summary
Total sales were $100.2 million
for fourth quarter 2021 representing a 27% sequential quarterly
increase when compared to $79.2
million in the third quarter 2021, and an 8% increase when
compared with total sales of $93.0
million for fourth quarter 2020. The sales increases
were primarily driven by seasonal fourth quarter strength as well
as increased demand for our Quantum Max product, and continued
recovery from pandemic related softness in the prior year
period.
Gross margin was 55.6% for the fourth quarter 2021, as compared
to 54.6% for the same prior year period. Non-GAAP gross margin was
55.8% for the fourth quarter 2021 compared to 54.9% for the fourth
quarter 2020. The annual increase in gross margin was primarily a
result of higher volume compared to the prior year period.
Operating expenses were $51.8
million for the fourth quarter 2021, compared to
$48.1 million for the same prior year
period. Non-GAAP operating expenses were $44.2 million for the fourth quarter 2021
compared to $42.9 million for the
fourth quarter 2020.
Net loss was $31.7 million, or
$1.74 per share, for the fourth
quarter 2021, as compared to a net income of $27.4 million, or $1.52 per share, for the fourth quarter 2020.
Fourth quarter 2021 GAAP net loss included income tax expense of
$26.5 million associated with the
creation of a valuation allowance against primarily US deferred tax
assets. Non-GAAP net income was $8.7
million, or $0.48 per share,
for the fourth quarter 2021 compared to non-GAAP net income of
$6.3 million, or $0.35 per share, for the fourth quarter
2020.
Adjusted EBITDA was $14.2 million,
or 14.2% of non-GAAP total sales, for the fourth quarter of 2021
compared to $11.0 million, or 11.9%
of non-GAAP net sales in the fourth quarter of 2020.
The Company's cash and short-term investments decreased
$3.8 million to $122.0 million as of the end of the fourth
quarter of 2021 due primarily to timing of customer cash
receipts. Accounts receivable increased $19.6 million in the fourth quarter. The
Company remained debt-free.
Full Year 2021 Financial Summary
Total sales were $337.8 million
for the full year 2021, as compared with $303.8 million for 2020. New order bookings
were $351.5 million for 2021, as
compared to $306.4 million for
2020.
Net loss was $40.0 million, or
$2.20 per share, for 2021, as
compared to net income of approximately $0.6
million, or $0.04 per share,
for 2020. Non-GAAP net income was $10.2
million, or $0.56 per share,
for 2021 compared to net loss of $1.8
million, or $0.10 per share,
for 2020.
* A reconciliation of the non-GAAP financial measures to the
most directly comparable GAAP financial measures is provided in the
financial schedules portion at the end of this press release. An
additional explanation of these measures is included below under
the heading "Non-GAAP Financial Measures".
Outlook for the First Quarter 2022
For the first quarter ending March 31,
2022, revenues are expected to be in the range of
$80 to $88
million with non-GAAP earnings per share in the range of
($0.08) to $0.12. Note that included in our first quarter
expectations are approximately 200 basis points of unfavorable
material cost that are adversely affecting gross margins.
Conference Call
The Company will host a conference call to discuss these results
on Wednesday, February 16, 2022 at
5:00 p.m. ET. Interested parties can
access the conference call by dialing (866) 518-6930 (U.S.) or +1
(203) 518-9797 (International) and using the passcode FARO. A live
webcast will be available in the Investor Relations section of
FARO's website at:
https://www.faro.com/en/About-Us/Investor-Relations/Financial-Events-and-Presentations
A replay webcast will be available in the Investor Relations
section of the company's web site approximately two hours after the
conclusion of the call and will remain available for approximately
30 calendar days.
About FARO
For 40 years, FARO has provided industry-leading technology
solutions that enable customers to quickly and easily 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 http://www.faro.com
Non-GAAP Financial Measures
This press release contains information about our financial
results that are not presented in accordance with U.S. generally
accepted accounting principles ("GAAP"). These non-GAAP financial
measures, including non-GAAP total sales, non-GAAP gross profit,
non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income
(loss) from operations, non-GAAP other expense, net, non-GAAP net
income (loss) and non-GAAP net income (loss) per share, exclude the
GSA sales adjustment (as defined in the tables below), the impact
of purchase accounting intangible amortization expense, stock-based
compensation, imputed interest expense recorded related to the GSA
Matter, restructuring charges, and other tax adjustments, and are
provided to enhance investors' overall understanding of our
historical operations and financial performance.
In addition, we present EBITDA, which is calculated as net
(loss) income before interest expense (income), net, income tax
expense (benefit) and depreciation and amortization, and Adjusted
EBITDA, which is calculated as EBITDA, excluding other expense,
net, the GSA sales adjustment, stock-based compensation, and
restructuring charges, as measures of our operating
profitability. The most directly comparable GAAP measure to
EBITDA and Adjusted EBITDA is net (loss) income. We also present
Adjusted EBITDA margin, which is calculated as Adjusted EBITDA as a
percent of Non-GAAP total sales.
Management believes that these non-GAAP financial measures
provide investors with relevant period-to-period comparisons of our
core operations using the same methodology that management employs
in its review of the Company's operating results. These financial
measures are not recognized terms under GAAP and should not be
considered in isolation or as a substitute for a measure of
financial performance prepared in accordance with GAAP. These
non-GAAP financial measures have limitations that should be
considered before using these measures to evaluate a company's
financial performance. These non-GAAP financial measures, as
presented, may not be comparable to similarly titled measures of
other companies due to varying methods of calculation. The
financial statement tables that accompany this press release
include a reconciliation of these non-GAAP financial measures to
the most directly comparable GAAP financial measures.
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 demand for and customer acceptance of FARO's products, FARO's
product development and product launches, FARO's growth, 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, and FARO's
growth potential and profitability. 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 outcome of the U.S. Government's review of, or
investigation into, the GSA Matter; any resulting penalties,
damages, or sanctions imposed on the Company and the outcome of any
resulting litigation to which the Company may become a party; loss
of future government sales; and potential impacts on customer and
supplier relationships and the Company's reputation;
- 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 will be filed
with the SEC following this earnings release.
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.
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(UNAUDITED)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
(in thousands, except
share and per share data)
|
December 31,
2021
|
|
December 31,
2020
|
|
December 31,
2021
|
|
December 31,
2020
|
Sales
|
|
|
|
|
|
|
|
Product
|
$
78,355
|
|
$
71,721
|
|
$
251,103
|
|
$
218,587
|
Service
|
21,849
|
|
21,232
|
|
86,711
|
|
85,181
|
Total sales
|
100,204
|
|
92,953
|
|
337,814
|
|
303,768
|
Cost of
Sales
|
|
|
|
|
|
|
|
Product
|
33,115
|
|
32,052
|
|
109,024
|
|
98,864
|
Service
|
11,382
|
|
10,121
|
|
44,863
|
|
45,057
|
Total cost of
sales
|
44,497
|
|
42,173
|
|
153,887
|
|
143,921
|
Gross
Profit
|
55,707
|
|
50,780
|
|
183,927
|
|
159,847
|
Operating
Expenses
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
35,859
|
|
35,304
|
|
136,234
|
|
131,827
|
Research and
development
|
12,297
|
|
11,541
|
|
48,761
|
|
42,896
|
Restructuring
costs
|
3,689
|
|
1,243
|
|
7,368
|
|
15,806
|
Total operating
expenses
|
51,845
|
|
48,088
|
|
192,363
|
|
190,529
|
Income (loss) from
operations
|
3,862
|
|
2,692
|
|
(8,436)
|
|
(30,682)
|
Other (income)
expense
|
|
|
|
|
|
|
|
Interest
income
|
—
|
|
(747)
|
|
—
|
|
(340)
|
Other expense,
net
|
503
|
|
97
|
|
70
|
|
431
|
Interest
expense
|
1
|
|
—
|
|
55
|
|
—
|
Income (loss) before
income tax expense (benefit)
|
3,358
|
|
3,342
|
|
(8,561)
|
|
(30,773)
|
Income tax expense
(benefit)
|
35,070
|
|
(24,066)
|
|
31,403
|
|
(31,402)
|
Net (loss)
income
|
$
(31,712)
|
|
$
27,408
|
|
$
(39,964)
|
|
$
629
|
Net (loss) income per
share - Basic
|
$
(1.74)
|
|
$
1.53
|
|
$
(2.20)
|
|
$
0.04
|
Net (loss) income per
share - Diluted
|
$
(1.74)
|
|
$
1.52
|
|
$
(2.20)
|
|
$
0.04
|
Weighted average
shares - Basic
|
18,204,386
|
|
17,872,307
|
|
18,187,946
|
|
17,769,958
|
Weighted average
shares - Diluted
|
18,204,386
|
|
18,064,754
|
|
18,187,946
|
|
17,926,324
|
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(UNAUDITED)
|
|
(in thousands, except
share and per share data)
|
December 31,
2021
|
|
December 31,
2020
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
121,989
|
|
$
185,633
|
Short-term
investments
|
—
|
|
|
Accounts receivable,
net
|
78,523
|
|
64,616
|
Inventories,
net
|
53,145
|
|
47,391
|
Prepaid expenses and
other current assets
|
19,793
|
|
26,295
|
Total current
assets
|
273,450
|
|
323,935
|
Non-current
assets:
|
|
|
|
Property, plant and
equipment, net
|
22,194
|
|
23,091
|
Operating lease
right-of-use asset
|
22,543
|
|
26,107
|
Goodwill
|
82,096
|
|
57,541
|
Intangible assets,
net
|
25,616
|
|
13,301
|
Service and sales
demonstration inventory, net
|
30,554
|
|
31,831
|
Deferred income tax
assets, net
|
21,277
|
|
47,450
|
Other long-term
assets
|
2,010
|
|
2,336
|
Total
assets
|
$
479,740
|
|
$
525,592
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
14,199
|
|
$
14,121
|
Accrued
liabilities
|
28,208
|
|
42,593
|
Income taxes
payable
|
4,499
|
|
3,442
|
Current portion of
unearned service revenues
|
40,838
|
|
39,149
|
Customer
deposits
|
5,399
|
|
2,807
|
Lease
liability
|
5,738
|
|
5,835
|
Total current
liabilities
|
98,881
|
|
107,947
|
Unearned service
revenues - less current portion
|
22,350
|
|
21,757
|
Lease liability -
less current portion
|
18,648
|
|
22,131
|
Deferred income tax
liabilities
|
1,058
|
|
787
|
Income taxes payable
- less current portion
|
11,297
|
|
11,583
|
Other long-term
liabilities
|
1,047
|
|
1,084
|
Total
liabilities
|
153,281
|
|
165,289
|
Shareholders'
equity:
|
|
|
|
Common stock - par
value $0.001, 50,000,000 shares authorized; 19,588,003 and
19,384,350 issued; 18,205,636 and 17,990,707 outstanding,
respectively
|
20
|
|
19
|
Additional paid-in
capital
|
301,061
|
|
287,979
|
Retained
earnings
|
73,544
|
|
113,508
|
Accumulated other
comprehensive loss
|
(17,374)
|
|
(10,160)
|
Common stock in
treasury, at cost - 1,382,367 and 1,393,643 shares held,
respectively
|
(30,792)
|
|
(31,043)
|
Total shareholders'
equity
|
326,459
|
|
360,303
|
Total liabilities and
shareholders' equity
|
$
479,740
|
|
$
525,592
|
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
|
|
Years Ended
December 31,
|
(in
thousands)
|
2021
|
|
2020
|
CASH FLOWS
FROM:
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
Net (loss)
income
|
$
(39,964)
|
|
$
629
|
Adjustments to
reconcile net (loss) income to net cash used by operating
activities:
|
|
|
|
Depreciation and
amortization
|
13,396
|
|
14,239
|
Stock-based
compensation
|
11,456
|
|
8,314
|
Provision for bad
debts (net of recoveries)
|
176
|
|
440
|
Loss on disposal of
assets
|
218
|
|
383
|
Provision for excess
and obsolete inventory
|
2,297
|
|
1,349
|
Impairment of
goodwill
|
—
|
|
—
|
Impairment of acquired
intangibles
|
—
|
|
—
|
Impairment of loan to
affiliate
|
—
|
|
—
|
Deferred income tax
benefit
|
24,706
|
|
(28,444)
|
Change in operating
assets and liabilities, net of acquisitions:
|
|
|
|
(Increase) decrease
in:
|
|
|
|
Accounts receivable,
net
|
(15,577)
|
|
12,346
|
Inventories
|
(6,706)
|
|
10,343
|
Prepaid expenses and
other assets
|
5,996
|
|
3,862
|
(Decrease) increase
in:
|
|
|
|
Accounts payable and
accrued liabilities
|
(13,260)
|
|
2,390
|
Income taxes
payable
|
847
|
|
(3,357)
|
Customer
deposits
|
2,627
|
|
(374)
|
Unearned service
revenues
|
312
|
|
(726)
|
Net cash (used in)
provided by operating activities
|
(13,476)
|
|
21,394
|
INVESTING
ACTIVITIES:
|
|
|
|
Purchases of
investments
|
—
|
|
—
|
Proceeds from sale of
investments
|
—
|
|
25,000
|
Purchases of property
and equipment
|
(7,035)
|
|
(4,774)
|
Cash paid for
technology development, patents and licenses
|
(4,905)
|
|
(1,298)
|
Acquisition of
business, net of cash received
|
(33,800)
|
|
(6,036)
|
Other
|
—
|
|
1,015
|
Net cash provided by
(used in) investing activities
|
(45,740)
|
|
13,907
|
FINANCING
ACTIVITIES:
|
|
|
|
Payments on capital
leases
|
(296)
|
|
(338)
|
Payments of contingent
consideration for acquisitions
|
—
|
|
(733)
|
Payments for taxes
related to net share settlement of equity awards
|
(4,002)
|
|
(2,602)
|
Proceeds from issuance
of stock related to stock option exercises
|
5,880
|
|
14,731
|
Net cash provided by
financing activities
|
1,582
|
|
11,058
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
(6,010)
|
|
5,640
|
INCREASE IN CASH AND
CASH EQUIVALENTS
|
(63,644)
|
|
51,999
|
CASH AND CASH
EQUIVALENTS, BEGINNING OF YEAR
|
185,633
|
|
133,634
|
CASH AND CASH
EQUIVALENTS, END OF YEAR
|
$
121,989
|
|
$
185,633
|
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
|
RECONCILIATION OF
GAAP TO NON-GAAP
|
(UNAUDITED)
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
(dollars in
thousands, except per share data)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Total sales, as
reported
|
$
100,204
|
|
$
92,953
|
|
$
337,814
|
|
$
303,768
|
GSA sales adjustment
(1)
|
—
|
|
—
|
|
—
|
|
608
|
Non-GAAP total
sales
|
$
100,204
|
|
$
92,953
|
|
$
337,814
|
|
$
304,376
|
|
|
|
|
|
|
|
|
Gross profit, as
reported
|
$
55,707
|
|
$
50,780
|
|
$
183,927
|
|
$
159,847
|
GSA sales adjustment
(1)
|
—
|
|
—
|
|
—
|
|
608
|
Stock-based
compensation (2)
|
165
|
|
211
|
|
635
|
|
702
|
Non-GAAP adjustments
to gross profit
|
165
|
|
211
|
|
635
|
|
1,310
|
Non-GAAP gross
profit
|
$
55,872
|
|
$
50,991
|
|
$
184,562
|
|
$
161,157
|
Gross margin, as
reported
|
55.6 %
|
|
54.6 %
|
|
54.4 %
|
|
52.6 %
|
Non-GAAP gross
margin
|
55.8 %
|
|
54.9 %
|
|
54.6 %
|
|
52.9 %
|
|
|
|
|
|
|
|
|
Selling, general and
administrative, as reported
|
$
35,859
|
|
$
35,304
|
|
$
136,234
|
|
$
131,827
|
Stock-based
compensation (2)
|
(2,196)
|
|
(1,661)
|
|
(8,985)
|
|
(6,327)
|
Purchase accounting
intangible amortization
|
(259)
|
|
(193)
|
|
(908)
|
|
(564)
|
Non-GAAP selling,
general and administrative
|
$
33,404
|
|
$
33,450
|
|
$
126,341
|
|
$
124,936
|
|
|
|
|
|
|
|
|
Research and
development, as reported
|
$
12,297
|
|
$
11,541
|
|
$
48,761
|
|
$
42,896
|
Stock-based
compensation (2)
|
(438)
|
|
(14)
|
|
(1,836)
|
|
(1,285)
|
Purchase accounting
intangible amortization
|
(1,072)
|
|
(411)
|
|
(2,133)
|
|
(1,505)
|
Non-GAAP research and
development
|
$
10,787
|
|
$
11,116
|
|
$
44,792
|
|
$
40,106
|
|
|
|
|
|
|
|
|
Operating expenses,
as reported
|
$
51,845
|
|
$
48,088
|
|
$
192,363
|
|
$
190,529
|
Stock-based
compensation (2)
|
(2,634)
|
|
(1,675)
|
|
(10,821)
|
|
(7,612)
|
Restructuring costs
(3)
|
(3,689)
|
|
(1,243)
|
|
(7,368)
|
|
(15,806)
|
Other product charge
(4)
|
—
|
|
(1,644)
|
|
—
|
|
(1,644)
|
Purchase accounting
intangible amortization
|
(1,331)
|
|
(604)
|
|
(3,041)
|
|
(2,069)
|
Non-GAAP adjustments
to operating expenses
|
(7,654)
|
|
(5,166)
|
|
(21,230)
|
|
(27,131)
|
Non-GAAP operating
expenses
|
$
44,191
|
|
$
42,922
|
|
$
171,133
|
|
$
163,398
|
|
|
|
|
|
|
|
|
Income (loss) from
operations, as reported
|
$
3,862
|
|
$
2,692
|
|
$
(8,436)
|
|
$
(30,682)
|
Non-GAAP adjustments
to gross profit
|
165
|
|
211
|
|
635
|
|
1,310
|
Non-GAAP adjustments
to operating expenses
|
7,654
|
|
5,166
|
|
21,230
|
|
27,131
|
Non-GAAP income
(loss) from operations
|
$
11,681
|
|
$
8,069
|
|
$
13,429
|
|
$
(2,241)
|
|
|
|
|
|
|
|
|
Other expense
(income), net, as reported
|
$
521
|
|
$
(650)
|
|
$
142
|
|
$
91
|
Interest adjustment
due to GSA sales adjustment (1)
|
—
|
|
727
|
|
—
|
|
168
|
Non-GAAP adjustments
to other expense (income), net
|
—
|
|
727
|
|
—
|
|
168
|
Non-GAAP other
expense, net
|
$
521
|
|
$
77
|
|
$
142
|
|
$
259
|
|
|
|
|
|
|
|
|
Net (loss) income, as
reported
|
$
(31,712)
|
|
$
27,408
|
|
$
(39,964)
|
|
$
629
|
Non-GAAP adjustments
to gross profit
|
165
|
|
211
|
|
635
|
|
1,310
|
Non-GAAP adjustments
to operating expenses
|
7,654
|
|
5,166
|
|
21,230
|
|
27,131
|
Non-GAAP adjustments
to other expense (income), net
|
—
|
|
(727)
|
|
—
|
|
(168)
|
Income tax effect of
non-GAAP adjustments
|
(1,191)
|
|
(2,305)
|
|
(5,432)
|
|
(7,235)
|
Other tax adjustments
(5)
|
33,779
|
|
(23,501)
|
|
33,779
|
|
(23,501)
|
Non-GAAP net income
(loss)
|
$
8,695
|
|
$
6,252
|
|
$
10,248
|
|
$
(1,834)
|
|
|
|
|
|
|
|
|
Net (loss) income per
share - Diluted, as reported
|
$
(1.74)
|
|
$
1.52
|
|
$
(2.20)
|
|
$
0.04
|
GSA sales adjustment
(1)
|
—
|
|
—
|
|
—
|
|
0.03
|
Stock-based
compensation (2)
|
0.16
|
|
0.11
|
|
0.63
|
|
0.46
|
Restructuring costs
(3)
|
0.20
|
|
0.07
|
|
0.40
|
|
0.88
|
Other product charges
(4)
|
—
|
|
0.09
|
|
—
|
|
0.09
|
Purchase accounting
intangible amortization
|
0.07
|
|
0.03
|
|
0.17
|
|
0.12
|
Interest expense
increase due to GSA sales adjustment (1)
|
—
|
|
(0.04)
|
|
—
|
|
(0.01)
|
Income tax effect of
non-GAAP adjustments
|
(0.06)
|
|
(0.13)
|
|
(0.30)
|
|
(0.40)
|
Other tax adjustments
(5)
|
1.85
|
|
(1.30)
|
|
1.86
|
|
(1.31)
|
Non-GAAP net income
(loss) per share - Diluted
|
$
0.48
|
|
$
0.35
|
|
$
0.56
|
|
$
(0.10)
|
|
(1) Late
in the fourth quarter of 2018, during an internal review we
preliminarily determined that certain of our pricing practices may
have resulted in the U.S. Government being overcharged under our
General Services Administration ("GSA") Federal Supply Schedule
contracts (the "Contracts") (the "GSA Matter"). During the twelve
months ended December 31, 2020, we reduced our total sales by $0.6
million (the "GSA sales adjustment"). During the first nine months
of 2020 we recorded an incremental $0.6 million of imputed interest
related to the estimated cumulative sales adjustment and in the
fourth quarter of 2020 we determined that an adjustment to reduce
imputed interest by $0.7 million was required. Effective as of
February 25, 2021, as a result of the review, we entered into a
settlement agreement with the GSA and have paid in full and final
satisfaction of any and all claims, causes of actions, appeals and
the like, including damages, costs, attorney's fees and interest
arising under or related to the GSA Matter.
|
|
(2) We
exclude stock-based compensation, which is non-cash, from the
non-GAAP financial measures because the Company believes that such
exclusion provides a better comparison of results of ongoing
operations for current and future periods with such results from
past periods.
|
|
(3) On
February 14, 2020, our Board of Directors approved a global
restructuring plan (the "Restructuring Plan"), which is intended to
support our strategic plan in an effort to improve operating
performance and ensure that we are appropriately structured and
resourced to deliver increased and sustainable value to our
shareholders and customers. In connection with the Restructuring
Plan, during the twelve months ended December 31, 2021 and December
31, 2020 we recorded a pre-tax charge of approximately $7.4 million
and $15.8 million, respectively, primarily consisting of severance
and related benefits.
|
|
(4) During
the fourth quarter of 2020, we recognized a charge related to the
replacement of a prior generation product that was exhibiting lower
than desired reliability as part of our ongoing focus on customer
satisfaction.
|
|
(5) The
2021 tax adjustments were driven by an increase in our valuation
allowance primarily related to domestic and foreign deferred tax
assets that, in the judgment of management, were not more likely
than not to be realized. The 2020 tax adjustments were driven
primarily by the establishment of deferred tax assets in relation
to intra-entity transfers of certain intellectual property rights
in December 2020.
|
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
|
RECONCILIATION OF NET
INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA
|
(UNAUDITED)
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
(in
thousands)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net (loss)
income
|
$
(31,712)
|
|
$
27,408
|
|
$
(39,964)
|
|
$
629
|
Interest expense
(income), net
|
1
|
|
(747)
|
|
55
|
|
(340)
|
Income tax expense
(benefit)
|
35,070
|
|
(24,066)
|
|
31,403
|
|
(31,402)
|
Depreciation and
amortization
|
3,836
|
|
3,608
|
|
13,396
|
|
14,239
|
EBITDA
|
7,195
|
|
6,203
|
|
4,890
|
|
(16,874)
|
Other expense,
net
|
503
|
|
97
|
|
70
|
|
431
|
Stock-based
compensation
|
2,799
|
|
1,886
|
|
11,456
|
|
8,314
|
GSA sales adjustment
(1)
|
—
|
|
—
|
|
—
|
|
608
|
Other product charges
(2)
|
—
|
|
1,644
|
|
—
|
|
1,644
|
Restructuring costs
(3)
|
3,689
|
|
1,243
|
|
7,368
|
|
15,806
|
Adjusted
EBITDA
|
$
14,186
|
|
$
11,073
|
|
$
23,784
|
|
$
9,929
|
Adjusted EBITDA
margin (4)
|
14.2 %
|
|
11.9 %
|
|
7.0 %
|
|
3.3 %
|
|
(1)
Late in the fourth quarter of 2018, during an internal review we
preliminarily determined that certain of our pricing practices may
have resulted in the U.S. Government being overcharged under our
General Services Administration ("GSA") Federal Supply Schedule
contracts (the "Contracts") (the "GSA Matter"). During the twelve
months ended December 31, 2020, we reduced our total sales by $0.6
million (the "GSA sales adjustment"). Effective as of February 25,
2021, as a result of the review, we entered into a settlement
agreement with the GSA and have paid in full and final satisfaction
of any and all claims, causes of actions, appeals and the like,
including damages, costs, attorney's fees and interest arising
under or related to the GSA Matter.
|
|
(2) During
the fourth quarter of 2020, we recognized a charge related to the
replacement of a prior generation product that was exhibiting lower
than desired reliability as part of our ongoing focus on customer
satisfaction.
|
|
(3) On
February 14, 2020, our Board of Directors approved a global
restructuring plan (the "Restructuring Plan"), which is intended to
support our strategic plan in an effort to improve operating
performance and ensure that we are appropriately structured and
resourced to deliver increased and sustainable value to our
shareholders and customers. In connection with the Restructuring
Plan, during the twelve months ended December 31, 2021 and December
31, 2020 we recorded a pre-tax charge of approximately $7.4 million
and $15.8 million, respectively, primarily consisting of severance
and related benefits.
|
|
(4)
Calculated as Adjusted EBITDA as a percentage of Non-GAAP total
sales, which adjusts for the GSA sales adjustment.
|
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
|
KEY SALES
MEASURES
|
(UNAUDITED)
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
(in
thousands)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Total sales to
external customers
|
|
|
|
|
|
|
|
Americas
(1)
|
$
40,438
|
|
$
36,592
|
|
$
140,633
|
|
$
128,826
|
EMEA
(1)
|
29,035
|
|
30,332
|
|
104,350
|
|
91,390
|
APAC
(1)
|
30,731
|
|
26,029
|
|
92,831
|
|
83,552
|
|
$
100,204
|
|
$
92,953
|
|
$
337,814
|
|
$
303,768
|
|
(1) Regions
represent North America and South America (Americas); Europe, the
Middle East, and Africa (EMEA); and the Asia-Pacific
(APAC).
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
(in
thousands)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Product
|
$
64,661
|
|
$
59,677
|
|
$
206,024
|
|
$
180,246
|
Software
|
13,694
|
|
12,044
|
|
45,079
|
|
38,341
|
Service
|
21,849
|
|
21,232
|
|
86,711
|
|
85,181
|
Total
Sales
|
$
100,204
|
|
$
92,953
|
|
$
337,814
|
|
$
303,768
|
|
|
|
|
|
|
|
|
Product as a percentage
of total sales
|
64.5 %
|
|
64.2 %
|
|
61.0 %
|
|
59.3 %
|
Software as a
percentage of total sales
|
13.7 %
|
|
13.0 %
|
|
13.3 %
|
|
12.6 %
|
Service as a percentage
of total sales
|
21.8 %
|
|
22.8 %
|
|
25.7 %
|
|
28.0 %
|
|
|
|
|
|
|
|
|
Total Recurring
Revenue (2)
|
$
16,468
|
|
$
14,964
|
|
$
64,067
|
|
$
61,187
|
Recurring revenue as a
percentage of total sales
|
16.4 %
|
|
16.1 %
|
|
19.0 %
|
|
20.1 %
|
|
(2) Recurring revenue is
comprised of hardware service contracts, software maintenance
contracts, and subscription based software applications.
|
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
|
RECONCILIATION OF
OUTLOOK - GAAP TO NON-GAAP
|
|
|
|
Fiscal quarter
ending March 31, 2022
|
|
|
GAAP diluted earnings
(loss) per share range
|
($0.41) -
($0.16)
|
Stock-based
compensation
|
0.16
|
Purchase accounting
intangible amortization
|
0.05
|
Restructuring and
other costs
|
0.05
|
Non-GAAP tax
adjustments
|
0.07 -
0.02
|
Non-GAAP diluted
earnings (loss) per share
|
($0.08) -
$0.12
|
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SOURCE FARO