LAKE MARY, Fla., April 25, 2018 /PRNewswire/ -- FARO®
(NASDAQ: FARO), the world's most trusted source for 3D measurement
and imaging solutions for 3D factory, construction BIM, product
design, and public safety forensics, today announced its financial
results for the first quarter ended March
31, 2018. Highlights from the quarter included:
- Quarterly sales of $92.8 million,
up 13.8% year-over-year
- Construction BIM segment quarterly sales of $22.7 million, up 19.8% year-over-year
- Increased gross margin year-over-year to 57.9% for the
quarter
- Decreased G&A expense to 11.9% of sales, down 1.2
percentage points year-over-year
![FARO logo. (PRNewsFoto/FARO Technologies, Inc.) FARO logo. (PRNewsFoto/FARO Technologies, Inc.)](https://mma.prnewswire.com/media/95369/faro_technologies__inc__logo.jpg)
"Our first quarter performance provides another quarter that
validates our vertical market strategy and growth initiatives with
our third consecutive quarter of double digit sales growth and
gross margin increase year-over-year," stated Dr. Simon Raab, President and Chief Executive
Officer. "We continued our innovation in the construction BIM
market by releasing FARO BuildIT Construction software to leverage
laser scanner technology to eliminate waste and enhance quality
control in construction projects. Our emerging verticals of
product design and public safety forensics combined to deliver
strong year-over-year sales growth, demonstrating the high growth
potential in these markets and the returns associated with our
sales headcount investments. Quarterly earnings were affected
by our intentional acceleration of R&D activities for the
fast-growing BIM and 3D machine vision markets. In the
quarter, we kicked off our global lean continuous improvement
initiative named FARO Best! to further drive efficiencies and
improvement in operating margin. With these initiatives and
continued investment in R&D, both organically and through the
acquisition of strong talent and technologies, we continue to
provide more value to our customers and shareholders."
Total sales increased by $11.2
million, or 13.8%, to $92.8
million for the quarter ended March
31, 2018 from $81.6 million
for the quarter ended March 31,
2017. Our sales increase was primarily driven by a strong
increase in product unit sales in our construction BIM segment,
higher average selling prices in our 3D factory segment, and
continued service revenue growth. New order bookings
increased by $9.2 million, or 10.6%,
to $96.1 million for the quarter
ended March 31, 2018 from
$86.9 million for the quarter ended
March 31, 2017.
Gross margin for the quarter was 57.9%, up 4.3 percentage points
compared with 53.6% in the same prior year period, reflecting a
strong increase in our product gross margin, mostly due to higher
average selling prices especially in our 3D factory segment and
improved manufacturing efficiencies with our volume increases in
the construction BIM and public safety forensics verticals.
Operating income was $0.7 million
for the first quarter of 2018, reflecting an increase of
$2.7 million compared with an
operating loss of $2.0 million in the
first quarter last year. This increase was primarily driven
by the execution of our strategic initiatives to deliver double
digit sales growth and a strong increase in gross margin by
developing next-generation, market-leading products and expanding
our sales headcount across our vertical markets.
Net income for the first quarter of 2018 was $0.5 million or $0.03 per share, compared with a net loss of
$1.5 million or $0.09 per share in the first quarter last
year.
As of March 31, 2018, cash and
short-term investments totaled $149.8
million, of which $93.9
million was held by foreign subsidiaries.
*****
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 continuous improvement initiatives and FARO's growth potential.
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:
- 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 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, 2017 and in Part II,
Item 1A. Risk Factors in the Company's Quarterly Report on Form
10-Q for the quarter ended March 31,
2018.
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 is the world's most trusted source for 3D measurement,
imaging and realization technology. The Company develops and
markets computer-aided measurement and imaging devices and software
for the following vertical markets:
- Factory Metrology - High-precision 3D measurement, imaging and
comparison of parts and complex structures within production and
quality assurance processes
- 3D Machine Vision - 3D vision for both control and measurement
to the manufacturing floor through 3D sensors and custom
solutions
- Construction BIM - 3D capture of as-built construction projects
and factories to document complex structures and perform quality
control, planning and preservation
- Public Safety Forensics - Capture and analysis of on-site real
world data to investigate crash, crime and fire, plan security
activities and provide virtual reality training for public safety
personnel
- Product Design - Capture detailed and precise 3D data from
existing products permitting CAD analysis and redesign, after
market design and legacy part replication
FARO's global headquarters is located in Lake Mary, Florida. The Company also has a
technology center and manufacturing facility consisting of
approximately 90,400 square feet located in Exton, Pennsylvania containing research and
development, manufacturing and service operations of our FARO Laser
Tracker™, FARO Cobalt Array Imager, and
Tracer product lines. The Company's European regional headquarters
is located in Stuttgart, Germany
and its Asia-Pacific regional
headquarters is located 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,
India, China, Malaysia, Thailand, South
Korea, Japan, and
Australia.
More information is available at http://www.faro.com
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
|
|
Three Months
Ended
|
(in thousands, except
share and per share data)
|
March 31,
2018
|
|
March 31,
2017
|
Sales
|
|
|
|
Product
|
$
|
70,581
|
|
|
$
|
62,380
|
|
Service
|
22,253
|
|
|
19,182
|
|
Total
sales
|
92,834
|
|
|
81,562
|
|
Cost of
Sales
|
|
|
|
Product
|
26,884
|
|
|
27,058
|
|
Service
|
12,164
|
|
|
10,755
|
|
Total cost of sales
(exclusive of depreciation and amortization,
shown separately below)
|
39,048
|
|
|
37,813
|
|
Gross
Profit
|
53,786
|
|
|
43,749
|
|
Operating
Expenses
|
|
|
|
Selling and
marketing
|
28,271
|
|
|
22,872
|
|
General and
administrative
|
11,073
|
|
|
10,699
|
|
Depreciation and
amortization
|
4,343
|
|
|
3,718
|
|
Research and
development
|
9,406
|
|
|
8,466
|
|
Total operating
expenses
|
53,093
|
|
|
45,755
|
|
Income (loss) from
operations
|
693
|
|
|
(2,006)
|
|
Other expense
(income)
|
|
|
|
Interest
income
|
(73)
|
|
|
(82)
|
|
Other expense,
net
|
184
|
|
|
8
|
|
Income (loss) before
income tax expense (benefit)
|
582
|
|
|
(1,932)
|
|
Income tax expense
(benefit)
|
127
|
|
|
(471)
|
|
Net income
(loss)
|
$
|
455
|
|
|
$
|
(1,461)
|
|
Net income (loss) per
share - Basic
|
$
|
0.03
|
|
|
$
|
(0.09)
|
|
Net income (loss) per
share - Diluted
|
$
|
0.03
|
|
|
$
|
(0.09)
|
|
Weighted average
shares - Basic
|
16,837,754
|
|
|
16,684,164
|
|
Weighted average
shares - Diluted
|
17,142,770
|
|
|
16,684,164
|
|
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(in thousands, except
share data)
|
March 31,
2018
(unaudited)
|
|
December 31,
2017
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
138,826
|
|
|
$
|
140,960
|
|
Short-term
investments
|
10,957
|
|
|
10,997
|
|
Accounts receivable,
net
|
71,631
|
|
|
72,105
|
|
Inventories,
net
|
58,376
|
|
|
53,786
|
|
Prepaid expenses and
other current assets
|
19,119
|
|
|
16,311
|
|
Total current
assets
|
298,909
|
|
|
294,159
|
|
Property and
equipment:
|
|
|
|
Machinery and
equipment
|
69,355
|
|
|
66,514
|
|
Furniture and
fixtures
|
6,853
|
|
|
6,945
|
|
Leasehold
improvements
|
20,230
|
|
|
19,872
|
|
Property and
equipment at cost
|
96,438
|
|
|
93,331
|
|
Less: accumulated
depreciation and amortization
|
(64,907)
|
|
|
(61,452)
|
|
Property and
equipment, net
|
31,531
|
|
|
31,879
|
|
Goodwill
|
54,511
|
|
|
52,750
|
|
Intangible assets,
net
|
25,399
|
|
|
22,540
|
|
Service and sales
demonstration inventory, net
|
41,703
|
|
|
39,614
|
|
Deferred income tax
assets, net
|
15,738
|
|
|
15,606
|
|
Other long-term
assets
|
2,861
|
|
|
2,030
|
|
Total
assets
|
$
|
470,652
|
|
|
$
|
458,578
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
11,145
|
|
|
$
|
11,569
|
|
Accrued
liabilities
|
24,367
|
|
|
27,362
|
|
Income taxes
payable
|
2,104
|
|
|
4,676
|
|
Current portion of
unearned service revenues
|
30,976
|
|
|
29,674
|
|
Customer
deposits
|
2,456
|
|
|
2,604
|
|
Total current
liabilities
|
71,048
|
|
|
75,885
|
|
Unearned service
revenues - less current portion
|
12,531
|
|
|
11,815
|
|
Deferred income tax
liabilities
|
700
|
|
|
695
|
|
Income taxes payable
- less current portion
|
15,952
|
|
|
15,952
|
|
Other long-term
liabilities
|
2,092
|
|
|
2,165
|
|
Total
liabilities
|
102,323
|
|
|
106,512
|
|
Commitments and
contingencies
|
|
|
|
Shareholders'
equity:
|
|
|
|
Common stock - par
value $.001, 50,000,000 shares authorized; 18,416,020 and
18,277,142 issued, respectively; 16,955,679 and 16,796,884
outstanding, respectively
|
18
|
|
|
18
|
|
Additional paid-in
capital
|
231,209
|
|
|
223,055
|
|
Retained
earnings
|
171,444
|
|
|
168,624
|
|
Accumulated other
comprehensive loss
|
(2,608)
|
|
|
(7,822)
|
|
Common stock in
treasury, at cost; 1,460,341 and 1,480,258 shares,
respectively
|
(31,734)
|
|
|
(31,809)
|
|
Total shareholders'
equity
|
368,329
|
|
|
352,066
|
|
Total liabilities and
shareholders' equity
|
$
|
470,652
|
|
|
$
|
458,578
|
|
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
Three Months
Ended
|
(in
thousands)
|
March 31,
2018
|
|
March 31,
2017
|
Cash flows
from:
|
|
|
|
Operating
activities:
|
|
|
|
Net income
(loss)
|
$
|
455
|
|
|
$
|
(1,461)
|
|
Adjustments to
reconcile net income (loss) to net cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
4,343
|
|
|
3,718
|
|
Stock-based
compensation
|
1,553
|
|
|
1,417
|
|
Provision for bad
debts
|
24
|
|
|
89
|
|
Loss on disposal of
assets
|
127
|
|
|
77
|
|
Provision for excess
and obsolete inventory
|
312
|
|
|
567
|
|
Deferred income tax
(benefit) expense
|
(128)
|
|
|
6
|
|
Change in operating
assets and liabilities:
|
|
|
|
Decrease (increase)
in:
|
|
|
|
Accounts
receivable
|
1,808
|
|
|
1,722
|
|
Inventories
|
(5,208)
|
|
|
(2,480)
|
|
Prepaid expenses and
other current assets
|
(936)
|
|
|
(1,181)
|
|
(Decrease) increase
in:
|
|
|
|
Accounts payable and
accrued liabilities
|
(4,846)
|
|
|
(2,442)
|
|
Income taxes
payable
|
(2,571)
|
|
|
(618)
|
|
Customer
deposits
|
(213)
|
|
|
(123)
|
|
Unearned service
revenues
|
1,231
|
|
|
430
|
|
Net cash used in
operating activities
|
(4,049)
|
|
|
(279)
|
|
Investing
activities:
|
|
|
|
Purchases of property
and equipment
|
(2,243)
|
|
|
(1,745)
|
|
Payments for
intangible assets
|
(650)
|
|
|
(332)
|
|
Acquisition of
businesses
|
(3,966)
|
|
|
—
|
|
Net cash used in
investing activities
|
(6,859)
|
|
|
(2,077)
|
|
Financing
activities:
|
|
|
|
Payments on capital
leases
|
(46)
|
|
|
(2)
|
|
Proceeds from
issuance of stock related to stock option exercises
|
6,785
|
|
|
268
|
|
Net cash provided by
financing activities
|
6,739
|
|
|
266
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
2,035
|
|
|
1,779
|
|
Decrease in cash
and cash equivalents
|
(2,134)
|
|
|
(311)
|
|
Cash and cash
equivalents, beginning of period
|
140,960
|
|
|
106,169
|
|
Cash and cash
equivalents, end of period
|
$
|
138,826
|
|
|
$
|
105,858
|
|
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
|
|
|
Three Months
Ended
|
(in
thousands)
|
March 31,
2018
|
|
March 31,
2017
|
Net income
(loss)
|
$
|
455
|
|
|
$
|
(1,461)
|
|
Currency translation
adjustments, net of income tax
|
5,214
|
|
|
4,159
|
|
Comprehensive
income
|
$
|
5,669
|
|
|
$
|
2,698
|
|
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
|
UNAUDITED
SUPPLEMENTAL DATA
|
|
(revenue in
thousands)
|
|
Q1 2018
Revenue
|
|
Q1 2017
Revenue
|
|
%
Change
|
Reporting
Segments
|
|
|
|
|
|
|
3D
Factory(1)
|
|
$
|
61,358
|
|
|
$
|
57,222
|
|
|
7.3
|
%
|
Construction
BIM(2)
|
|
22,682
|
|
|
18,941
|
|
|
19.8
|
%
|
Emerging
Verticals(3)
|
|
8,794
|
|
|
5,399
|
|
|
62.9
|
%
|
Total
|
|
$
|
92,834
|
|
|
$
|
81,562
|
|
|
13.8
|
%
|
(1) The 3D
Factory reporting segment (formerly known as Factory Metrology)
includes our Factory Metrology and 3D Machine Vision
verticals.
|
(2) The
Construction BIM reporting segment contains solely our Construction
BIM vertical (formerly known as Construction BIM-CIM).
|
(3) The
Emerging Verticals reporting segment (formerly known as Other)
includes our Product Design and Public Safety Forensics
verticals.
|
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SOURCE FARO Technologies, Inc.