LAKE MARY, Fla., Aug. 3, 2011 /PRNewswire/ -- FARO Technologies,
Inc. (NASDAQ: FARO) today announced results for the quarter ended
July 2, 2011. Sales in the
second quarter of 2011 increased 30.6%, to $59.7 million, from $45.7
million in the second quarter of 2010. The Company
reported net income increased to $4.2
million, or $0.25 per share,
in the second quarter of 2011, from $1.8
million, or $0.11 per share,
in the second quarter of 2010.
(Logo: http://photos.prnewswire.com/prnh/20110415/MM84316LOGO
)
New order bookings for the second quarter of 2011 were
$62.5 million, an increase of
$18.6 million, or 42.4%, compared to
$43.9 million in the second quarter
of 2010.
"Market demand remains strong, demonstrated by our 42% growth in
orders last quarter. The Americas grew 57%, while
Asia and Europe each grew 35%," stated Jay Freeland, FARO's President and CEO.
"We're seeing solid revenue growth in all product lines, and
the Focus Laser Scanner continues to exceed our expectations."
Due to the sizable increase in laser scanner sales relative to
the Company's historical product mix and the associated production
start-up costs, gross margin for the second quarter of 2011 was
56.1%, compared to 59.3% in the second quarter of 2010. The
Company expects the start-up costs to diminish in the near
term.
In order to reach a broader customer base for the laser scanner,
the Company has and may increasingly use distributors in addition
to its own sales force. Sales through distributors generally
carry lower gross margin. However, there is a partially
offsetting reduction in selling expenses. As a result, the
Company expects that higher laser scanner sales should generate
improved operating margin and profits.
"Our results in the second quarter were extremely strong, as we
delivered 127% EPS growth on a 31% increase in sales. We
expect positive momentum for our core metrology products as well as
the Focus Laser Scanner to continue through the rest of 2011 and
into 2012," 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 FARO's focus, plans and strategies, and product
releases, and its future operating results and financial condition.
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 "intend," "believe," "will," "expect"
and similar expressions or discussions of our strategy 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 obsolete or less
competitive;
- delays in the introduction of new products by the
Company;
- production delays caused by shortages of raw materials
incorporated in the Company's products;
- the cyclical nature of the industries of the Company's
customers and material adverse changes in customers' access
to liquidity and capital;
- 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
financing conditions;
- fluctuations in the Company's annual and quarterly operating
results and the inability to achieve its financial operating
targets;
- risks associated with expanding international operations,
such as fluctuations in currency exchange rates, difficulties in
staffing and managing foreign operations, political and economic
instability, compliance with import and export regulations, and the
burdens and potential exposure of complying with a wide variety of
U.S. and foreign laws and labor practices;
- 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, 2010.
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 over 20,000 installations and 11,000 customers globally,
FARO Technologies, Inc. designs, develops, and markets portable,
computerized measurement and imaging 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 Focus 3D Laser Scanner; the FARO Gage, Gage-PLUS and
PowerGAGE; and the CAM2 Q 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
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except share and
per share data)
|
|
July 2,
2011
|
|
July 3,
2010
|
|
July 2,
2011
|
|
July 3,
2010
|
|
SALES
|
|
|
|
|
|
|
|
|
|
Product
|
|
$
49,692
|
|
$
37,212
|
|
$
92,650
|
|
$
71,150
|
|
Service
|
|
10,019
|
|
8,493
|
|
19,627
|
|
16,824
|
|
Total Sales
|
|
59,711
|
|
45,705
|
|
112,277
|
|
87,974
|
|
COST OF SALES
|
|
|
|
|
|
|
|
|
|
Product
|
|
19,349
|
|
12,620
|
|
34,922
|
|
23,895
|
|
Service
|
|
6,846
|
|
5,997
|
|
13,567
|
|
11,600
|
|
Total Cost of Sales
(exclusive of depreciation and amortization, shown separately
below)
|
|
26,195
|
|
18,617
|
|
48,489
|
|
35,495
|
|
GROSS PROFIT
|
|
33,516
|
|
27,088
|
|
63,788
|
|
52,479
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
Selling
|
|
15,309
|
|
12,027
|
|
29,461
|
|
23,262
|
|
General and
administrative
|
|
6,917
|
|
6,028
|
|
13,507
|
|
12,275
|
|
Depreciation and
amortization
|
|
1,722
|
|
1,515
|
|
3,336
|
|
3,055
|
|
Research and
development
|
|
3,814
|
|
2,997
|
|
7,446
|
|
5,986
|
|
Total operating
expenses
|
|
27,762
|
|
22,567
|
|
53,750
|
|
44,578
|
|
INCOME FROM
OPERATIONS
|
|
5,754
|
|
4,521
|
|
10,038
|
|
7,901
|
|
OTHER (INCOME)
EXPENSE
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
(39)
|
|
(26)
|
|
(65)
|
|
(45)
|
|
Other expense (income),
net
|
|
124
|
|
1,839
|
|
(5)
|
|
2,344
|
|
Interest
expense
|
|
2
|
|
2
|
|
31
|
|
29
|
|
INCOME BEFORE INCOME TAX
EXPENSE
|
|
5,667
|
|
2,706
|
|
10,077
|
|
5,573
|
|
INCOME TAX EXPENSE
|
|
1,434
|
|
869
|
|
2,601
|
|
1,672
|
|
NET INCOME
|
|
$
4,233
|
|
$
1,837
|
|
$
7,476
|
|
$
3,901
|
|
NET INCOME PER SHARE -
BASIC
|
|
$
0.26
|
|
$
0.11
|
|
$
0.46
|
|
$
0.24
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME PER SHARE -
DILUTED
|
|
$
0.25
|
|
$
0.11
|
|
$
0.45
|
|
$
0.24
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares -
Basic
|
|
16,448,229
|
|
16,148,233
|
|
16,349,190
|
|
16,136,447
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares -
Diluted
|
|
16,845,877
|
|
16,320,596
|
|
16,724,019
|
|
16,289,963
|
|
|
|
|
|
|
|
|
|
|
FARO
TECHNOLOGIES, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July
2,
|
|
December
31,
|
|
|
|
2011
|
|
2010
|
|
(in thousands, except share
data)
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$ 57,339
|
|
$
50,722
|
|
Short-term
investments
|
|
64,992
|
|
64,986
|
|
Accounts receivable,
net
|
|
46,951
|
|
51,862
|
|
Inventories,
net
|
|
44,742
|
|
28,242
|
|
Deferred income taxes,
net
|
|
4,471
|
|
4,455
|
|
Prepaid expenses and other
current assets
|
|
10,621
|
|
8,045
|
|
Total current
assets
|
|
229,116
|
|
208,312
|
|
Property and
Equipment:
|
|
|
|
|
|
Machinery and
equipment
|
|
27,713
|
|
24,840
|
|
Furniture and
fixtures
|
|
6,213
|
|
5,700
|
|
Leasehold
improvements
|
|
10,412
|
|
9,682
|
|
Property and
equipment at cost
|
|
44,338
|
|
40,222
|
|
Less: accumulated
depreciation and amortization
|
|
(28,034)
|
|
(24,982)
|
|
Property and
equipment, net
|
|
16,304
|
|
15,240
|
|
Goodwill
|
|
20,044
|
|
19,015
|
|
Intangible assets,
net
|
|
7,233
|
|
7,204
|
|
Service inventory
|
|
14,255
|
|
13,726
|
|
Deferred income taxes,
net
|
|
2,680
|
|
2,522
|
|
Total Assets
|
|
$ 289,632
|
|
$
266,019
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
$ 11,059
|
|
$
12,025
|
|
Accrued
liabilities
|
|
17,174
|
|
15,208
|
|
Income taxes
payable
|
|
266
|
|
1,138
|
|
Current portion of
unearned service revenues
|
|
14,924
|
|
13,357
|
|
Customer
deposits
|
|
2,017
|
|
3,679
|
|
Current portion of
obligations under capital leases
|
|
47
|
|
91
|
|
Total
current liabilities
|
|
45,487
|
|
45,498
|
|
Unearned service revenues - less
current portion
|
|
8,254
|
|
6,758
|
|
Deferred tax liability,
net
|
|
1,192
|
|
1,161
|
|
Obligations under capital leases
- less current portion
|
|
150
|
|
125
|
|
Total Liabilities
|
|
55,083
|
|
53,542
|
|
Commitments and contingencies -
See Note R
|
|
|
|
|
|
Shareholders' Equity:
|
|
|
|
|
|
Common stock - par value
$.001, 50,000,000 shares authorized; 17,256,199 and 16,894,374
issued; 16,575,964 and 16,214,139 outstanding,
respectively
|
|
17
|
|
17
|
|
Additional paid-in
capital
|
|
165,564
|
|
156,310
|
|
Retained
earnings
|
|
65,459
|
|
57,983
|
|
Accumulated other
comprehensive income
|
|
12,584
|
|
7,242
|
|
Common stock in treasury,
at cost - 680,235 shares
|
|
(9,075)
|
|
(9,075)
|
|
Total Shareholders'
Equity
|
|
234,549
|
|
212,477
|
|
Total Liabilities and
Shareholders' Equity
|
|
$ 289,632
|
|
$
266,019
|
|
|
|
|
|
|
FARO
TECHNOLOGIES, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
(in thousands)
|
|
July 2,
2011
|
|
July 3,
2010
|
|
CASH FLOWS FROM:
|
|
|
|
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
Net income
|
|
$
7,476
|
|
$
3,901
|
|
Adjustments to reconcile
net income to net cash provided by
|
|
|
|
|
|
operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
3,336
|
|
3,055
|
|
Compensation for stock
options and restricted stock units
|
|
1,366
|
|
1,203
|
|
Provision for bad
debts
|
|
1,082
|
|
806
|
|
Deferred income tax
(benefit) expense
|
|
(16)
|
|
280
|
|
Change in operating assets and
liabilities:
|
|
|
|
|
|
Decrease (increase)
in:
|
|
|
|
|
|
Accounts
receivable
|
|
5,920
|
|
(1,388)
|
|
Inventories,
net
|
|
(14,773)
|
|
(4,950)
|
|
Prepaid expenses and other
current assets
|
|
(2,032)
|
|
(1,837)
|
|
Income tax benefit from
exercise of stock options
|
|
(1,013)
|
|
(16)
|
|
Increase (decrease)
in:
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
44
|
|
4,003
|
|
Income taxes
payable
|
|
197
|
|
(275)
|
|
Customer
deposits
|
|
(1,723)
|
|
328
|
|
Unearned service
revenues
|
|
2,200
|
|
713
|
|
Net cash provided by operating activities
|
|
2,064
|
|
5,823
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
Purchases of property and
equipment
|
|
(2,534)
|
|
(1,253)
|
|
Payments for intangible
assets
|
|
(425)
|
|
(382)
|
|
Net
cash used in investing activities
|
|
(2,959)
|
|
(1,635)
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
Proceeds from notes
payable
|
|
-
|
|
2,490
|
|
Payments on notes
payable
|
|
-
|
|
(2,490)
|
|
Payments on capital
leases
|
|
(117)
|
|
(39)
|
|
Income tax benefit from
exercise of stock options
|
|
1,013
|
|
16
|
|
Proceeds from issuance of
stock, net
|
|
6,875
|
|
363
|
|
Net
cash provided by financing activities
|
|
7,771
|
|
340
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS
|
|
(259)
|
|
2,323
|
|
|
|
|
|
|
|
INCREASE IN CASH AND CASH
EQUIVALENTS
|
|
6,617
|
|
6,851
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD
|
|
50,722
|
|
35,078
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, END
OF PERIOD
|
|
$
57,339
|
|
$
41,929
|
|
|
|
|
|
|
SOURCE FARO Technologies, Inc.