LAKE MARY, Fla., May 2 /PRNewswire-FirstCall/ -- FARO Technologies,
Inc. (NASDAQ:FARO) today announced results for the first quarter
ended March 31, 2007. Net income for the first quarter was $3.2
million, or $0.22 per diluted share, an increase of $2.7 million,
compared to $0.5 million, or $0.03 per diluted share, in the first
quarter of 2006. Sales for the first quarter of 2007 were $40.3
million, an increase of $8.2 million, or 25.5%, from $32.1 million
in the first quarter of 2006. New order bookings for the first
quarter were $38.2 million, an increase of $5.1 million, or 15.4%,
compared with $33.1 million in the year-ago quarter. "Sales growth
in the first quarter was driven by our strong orders performance in
the fourth quarter of 2006 and continued demand for our products
around the world," stated Jay Freeland, President and CEO. "We saw
particular strength in the Americas and total sales for the Company
in the first quarter met our internal targets. As expected, growth
in new orders in the first quarter of 2007 was affected by
exceptional order intake in the fourth quarter of 2006 as well as
by the timing of purchase decisions by our customers. However, we
expect that new order bookings for the year in total will support
our overall growth targets." Gross margin for the first quarter of
2007 was 59.2%, compared to 58.8% in the first quarter of 2006.
Gross margin increased primarily as the result of a change in the
sales mix resulting in an increase in unit sales of product lines
with a lower than average cost of sales. Gross margin for the first
quarter of 2007 was in line with previously issued guidance of
approximately 57.0% to 59.0% Selling expenses as a percentage of
sales decreased to 30.5% in the first quarter of 2007 compared to
32.0% in the first quarter of 2006 primarily due to improved sales
force productivity. General and administrative expenses were 12.5%
of sales for the first quarter of 2007 compared to 17.6% of sales
in the first quarter of 2006. General and administrative expenses
in the first quarter of 2007 included $0.6 million of professional
fees related to the Company's Foreign Corrupt Practices Act
("FCPA") matter and its recently settled patent litigation compared
to $1.6 million in the first quarter of 2006 for these matters.
Research and development expenses were $2.0 million for the first
quarter of 2007, up slightly from $1.9 million in the first quarter
of 2006. Operating margin for the first quarter of 2007 was 8.6%,
compared to 0.2% in the year ago quarter. Income tax expense was
$0.8 million for the first quarter of 2007 compared to $0.1 million
in the first quarter of 2006 primarily as a result of an increase
in pretax income. The Company's effective tax rate was 20.5% in the
first quarter of 2007 compared to 18.0% in the first quarter of
2006 due to an increase in taxable income in jurisdictions with
higher tax rates. "The ongoing strength in our sales performance,
combined with gross margin improvement, sales force productivity
and reduced legal expenditures drove solid first quarter earnings.
We continue to execute according to plan in all aspects of the
business. As such we are maintaining our previously stated full
year guidance ranges of approximately 20% - 25% sales growth and
57% to 59% gross margin," 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 our plans,
objectives, projections, expectations, assumptions, strategies, or
future events. 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 "may," "believes,"
"anticipates," "expects," "intends," "plans," "seeks," "estimates,"
"will," "should," "could," "projects," "forecast," "target,"
"goal," and similar expressions or discussions of our strategy or
other intentions identify forward-looking statements. Other written
or oral statements, which constitute forward-looking statements,
also may be made by the Company from time to time. 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 forward-looking statements include, but are not
limited to: -- our inability to further penetrate our customer
base; -- development by others of new or improved products,
processes or technologies that make our products obsolete or less
competitive; -- our inability to maintain our technological
advantage by developing new products and enhancing our existing
products; -- our inability to successfully identify and acquire
target companies or achieve expected benefits from acquisitions
that are consummated; -- the cyclical nature of the industries of
our customers and the financial condition of our customers; -- the
fact that the market potential for the CAM2 market and the
potential adoption rate for our products are difficult to quantify
and predict; -- the inability to protect our patents and other
proprietary rights in the United States and foreign countries; --
fluctuations in our annual and quarterly operating results, and the
inability to achieve our financial operating targets as a result of
a number of factors including, but not limited to (i) litigation
and regulatory actions brought against us, (ii) quality issues with
our products, (iii) excess or obsolete inventory,(iv) raw material
price fluctuations, (v) expansion of our manufacturing capability
and other inflationary pressures, (vi) the size and timing of
customer orders, (vii) the amount of time that it takes to fulfill
orders and ship our products, (viii) the length of our sales cycle
to new customers and the time and expense incurred in further
penetrating our existing customer base, (ix) increases in operating
expenses required for product development and new product
marketing, (x) costs associated with new product introductions,
such as product development, marketing, assembly line start-up
costs and low introductory period production volumes, (xi) the
timing and market acceptance of new products and product
enhancements, (xii) customer order deferrals in anticipation of new
products and product enhancements, (xiii) our success in expanding
our sales and marketing programs, (xiv) costs associated with
opening new sales offices outside of the United States, (xv)
fluctuations in revenue without proportionate adjustments in fixed
costs, (xvi) the efficiencies achieved in managing inventories and
fixed assets; (xvii) investments in potential acquisitions or
strategic sales, product or other initiatives, (xviii)shrinkage or
other inventory losses due to product obsolescence, scrap, or
material price changes, (xix) adverse changes in the manufacturing
industry and general economic conditions, and (xx) other factors
noted herein; -- changes in gross margins due to changing product
mix of products sold and the different gross margins on different
products, -- our inability to successfully implement the
requirements of Restriction of use of Hazardous Substances (RoHS)
and Waste Electrical and Electronic Equipment (WEEE) compliance
into our products; -- the inability of our products to displace
traditional measurement devices and attain broad market acceptance;
-- the impact of competitive products and pricing in the CAM2
market and the broader market for measurement and inspection
devices; -- the effects of increased competition as a result of
recent consolidation in the CAM2 market; -- risks associated with
expanding international operations, such as fluctuations in
currency exchange rates, difficulties in staffing and managing
foreign operations, political and economic instability, and the
burdens of complying with a wide variety of foreign laws and labor
practices; -- unforeseen developments in our FCPA matter or in
complying with the FCPA in the future; -- the outcome of the class
action securities litigation against us; -- higher than expected
increases in expenses relating to our Asia-Pacific expansion or our
Singapore manufacturing facility; -- our inability to find less
expensive alternatives to stock options to attract and retain
employees; -- the loss of our Chief Executive Officer, our Chief
Technology Officer, our Chief Financial Officer, or other key
personnel; -- difficulties in recruiting research and development
engineers, and application engineers; -- the failure to effectively
manage our growth; -- variations in the effective tax rate and the
difficulty predicting the tax rate on a quarterly and annual basis;
-- the loss of key suppliers and the inability to find sufficient
alternative suppliers in a reasonable period or on commercially
reasonable terms; and -- the other risks detailed in the Company's
Annual Report on Form 10-K and other filings from time to time with
the Securities and Exchange Commission. 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
approximately 13,500 installations and 6,500 customers globally,
FARO Technologies, Inc. designs, develops, and markets portable,
computerized measurement 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 X and Xi; the FARO Laser
ScanArm; FARO Laser Scanner LS; the FARO Gage, Gage-PLUS and
PowerGAGE; and the CAM2 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 STATEMENTS OF INCOME (UNAUDITED) Three
Months Ended (in thousands, except per share data) Mar 31, 2007 Apr
1, 2006 SALES $40,289 $32,056 COST OF SALES (exclusive of
depreciation and amortization, shown separately below) 16,453
13,221 GROSS PROFIT 23,836 18,835 OPERATING EXPENSES: Selling
12,304 10,251 General and administrative 5,023 5,647 Depreciation
and amortization 1,091 1,011 Research and development 1,972 1,852
Total operating expenses 20,390 18,761 INCOME FROM OPERATIONS 3,446
74 OTHER (INCOME) EXPENSE Interest (income) (256) (158) Other
(income) expense, net (325) (375) Interest expense 2 2 INCOME
BEFORE INCOME TAX 4,025 605 INCOME TAX EXPENSE 827 109 NET INCOME
$3,198 $496 NET INCOME PER SHARE - BASIC $0.22 $0.03 NET INCOME PER
SHARE - DILUTED $0.22 $0.03 FARO TECHNOLOGIES, INC. AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) March 31,
December 31, (in thousands, except share data) 2007 2006 ASSETS
Current Assets: Cash and cash equivalents $17,291 $15,689
Short-term investments 15,790 15,790 Accounts receivable, net
40,053 42,706 Inventories 21,796 23,429 Deferred income taxes, net
1,788 1,845 Prepaid expenses and other current assets 6,442 3,222
Total current assets 103,160 102,681 Property and Equipment:
Machinery and equipment 9,647 9,131 Furniture and fixtures 4,225
3,988 Leasehold improvements 2,684 2,615 Property and equipment at
cost 16,556 15,734 Less: accumulated depreciation and amortization
(9,786) (8,889) Property and equipment, net 6,770 6,845 Goodwill
17,535 17,266 Intangible assets, net 6,080 6,221 Service Inventory
7,906 7,278 Deferred income taxes, net 3,970 3,985 Total Assets
$145,421 $144,276 LIABILITIES AND SHAREHOLDERS' EQUITY Current
Liabilities: Accounts payable $8,234 $11,182 Accrued liabilities
7,736 10,379 Income taxes payable 955 2,151 Current portion of
unearned service revenues 5,427 4,569 Customer deposits 376 618
Current portion of long-term debt and obligations under capital
leases 106 90 Total current liabilities 22,834 28,989 Unearned
service revenues - less current portion 3,642 2,917 Deferred tax
liability, net 1,216 1,200 Long-term debt and obligations under
capital leases - less current portion 106 115 Total Liabilities
27,798 33,221 Commitments and contingencies Shareholders' Equity:
Common stock - par value $.001, 50,000,000 shares authorized;
14,790,801 and 14,586,402 issued; 14,669,114 and 14,464,715
outstanding, respectively 15 14 Additional paid-in-capital 88,139
85,160 Retained earnings 28,651 25,452 Accumulated other
comprehensive (loss) 969 580 Common stock in treasury, at cost -
40,000 shares (151) (151) Total Shareholders' Equity 117,623
111,055 Total Liabilities and Shareholders' Equity $145,421
$144,276 FARO TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31,
2007 April 1, 2006 CASH FLOWS FROM: OPERATING ACTIVITIES: Net
income $3,198 $496 Adjustments to reconcile net income to net cash
used in operating activities: Depreciation and amortization 1,092
1,011 Amortization of stock options and restricted stock units 199
113 Provision for bad debts 31 - Deferred income tax benefit
(expense) 111 (278) Change in operating assets and liabilities:
Decrease (increase) in: Accounts receivable, net 2,960 953
Inventories 1,242 1,334 Prepaid expenses and other current assets
(3,176) (596) Increase (decrease) in: Accounts payable and accrued
liabilities (5,509) (6,132) Income taxes payable (1,171) 92
Customer deposits (266) 75 Unearned service revenues 1,647 589 Net
cash provided by (used in) operating activities 358 (2,343)
INVESTING ACTIVITIES: Purchases of property and equipment (719)
(775) Payments for intangible assets (42) (425) Proceeds from
short-term investments - 600 Net cash used in investing activities
(761) (600) FINANCING ACTIVITIES: Proceeds from capital leases 53
67 Payments of capital leases (44) (53) Income tax benefit from
exercise of stock options 1,422 - Proceeds from issuance of stock,
net 1,224 - Net cash provided by financing activities 2,655 14
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (650)
49 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,602 (2,880)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 15,689 9,278 CASH
AND CASH EQUIVALENTS, END OF PERIOD $17,291 $6,398 DATASOURCE: FARO
Technologies, Inc. CONTACT: Keith Bair, Senior Vice President and
CFO, FARO Technologies, Inc., +1-407-333-9911, Web site:
http://www.faro.com/
Copyright
FARO Technologies (NASDAQ:FARO)
Historical Stock Chart
From Jun 2024 to Jul 2024
FARO Technologies (NASDAQ:FARO)
Historical Stock Chart
From Jul 2023 to Jul 2024