LAKE MARY, Fla., July 31, 2012 /PRNewswire/ -- FARO
Technologies, Inc. (NASDAQ: FARO) today announced results for the
second quarter ended June 30, 2012.
Sales in the second quarter of 2012 increased 11.8% to
$66.8 million, from $59.7 million in the second quarter of
2011. The Company reported net income increased by 11.8% to
$4.7 million, or $0.28 per share, in the second quarter of 2012,
from $4.2 million, or $0.25 per share, in the second quarter of
2011.
(Logo: http://photos.prnewswire.com/prnh/20110415/MM84316LOGO
)
New order bookings for the second quarter of 2012 were
$71.0 million, an increase of 13.6%
from $62.5 million in the second
quarter of 2011.
"We had strong results in Asia
and the Americas with sales increasing by 28.8% and 17.4%,
respectively, over the second quarter of last year. Despite a
sluggish and uncertain European economy, sales in Europe increased 9.4% when measured in Euros.
However, due to the strengthening of the US dollar, European sales
showed a modest decline of 2.9% when translated to US dollars,"
stated Jay Freeland, FARO's
President and CEO. "Net income grew at the same pace as
revenue even after absorbing considerable expenses related to
litigation, the completion of FCPA monitoring activities and the
unfavorable effect of exchange rates."
Gross margin for the second quarter of 2012 was 55.5%, compared
to 56.1% in the second quarter of 2011 and reflects lower average
selling prices resulting from promotions to reduce inventory in
preparation for new product introductions and an increase in sales
of the Laser Scanner products sold through our distributor
channel.
The Company's operating margin for the second quarter increased
to 10.3%, compared to 9.6% in the second quarter of 2011 and
included approximately $1.2 million
of professional fees related to the final review by the FCPA
Monitor and an increase in patent litigation expenses of
$0.4 million. The Company does
not expect to incur further expenses related to FCPA matter going
forward.
"In the second half of the year, we expect continuing economic
headwinds in Europe that could
spill over to other regions. Accordingly, we will be vigilant
in cost containment while continuing to invest in product
development and driving aggressive sales and marketing activities,"
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 demand for its products, 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 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 obsolete or less
competitive;
- 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;
- risks associated with 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, 2011.
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 30,000 installations and 15,000 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.
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|
FARO
TECHNOLOGIES, INC. AND SUBSIDIARIES
|
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
2012
|
|
2011
|
(in
thousands, except share data)
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
74,748
|
|
$
64,540
|
Short-term investments
|
|
64,989
|
|
64,997
|
Accounts receivable, net
|
|
53,246
|
|
57,512
|
Inventories, net
|
|
54,057
|
|
49,934
|
Deferred income taxes, net
|
|
6,190
|
|
5,297
|
Prepaid expenses and other current assets
|
|
10,617
|
|
9,207
|
Total current assets
|
|
263,847
|
|
251,487
|
Property
and Equipment:
|
|
|
|
|
Machinery and equipment
|
|
30,587
|
|
29,171
|
Furniture and fixtures
|
|
6,197
|
|
5,963
|
Leasehold improvements
|
|
10,728
|
|
10,233
|
Property
and equipment at cost
|
|
47,512
|
|
45,367
|
Less:
accumulated depreciation and amortization
|
|
(31,373)
|
|
(29,134)
|
Property and
equipment, net
|
|
16,139
|
|
16,233
|
Goodwill
|
|
18,339
|
|
18,610
|
Intangible
assets, net
|
|
6,670
|
|
6,849
|
Service
inventory
|
|
18,160
|
|
17,316
|
Deferred
income taxes, net
|
|
2,240
|
|
2,296
|
|
|
|
|
|
Total
Assets
|
|
$
325,395
|
|
$
312,791
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts payable
|
|
$
9,295
|
|
$
13,396
|
Accrued liabilities
|
|
15,674
|
|
18,076
|
Income taxes payable
|
|
2,448
|
|
2,682
|
Current portion of unearned service revenues
|
|
16,751
|
|
15,638
|
Customer deposits
|
|
4,339
|
|
4,072
|
Current portion of obligations under capital leases
|
|
38
|
|
84
|
Total current
liabilities
|
|
48,545
|
|
53,948
|
Unearned
service revenues - less current portion
|
|
9,232
|
|
9,540
|
Deferred
tax liability, net
|
|
1,279
|
|
1,148
|
Obligations under capital leases - less current
portion
|
|
65
|
|
257
|
|
|
|
|
|
Total
Liabilities
|
|
59,121
|
|
64,893
|
|
|
|
|
|
Shareholders' Equity:
|
|
|
|
|
Common stock - par value $.001, 50,000,000 shares authorized;
17,626,558
and 17,381,110 issued; 16,946,323 and 16,700,875
outstanding, respectively
|
|
18
|
|
17
|
Additional paid-in capital
|
|
178,361
|
|
169,780
|
Retained earnings
|
|
92,844
|
|
81,360
|
Accumulated other comprehensive income
|
|
4,126
|
|
5,816
|
Common stock in treasury, at cost - 680,235 shares
|
|
(9,075)
|
|
(9,075)
|
|
|
|
|
|
Total
Shareholders' Equity
|
|
266,274
|
|
247,898
|
|
|
|
|
|
Total
Liabilities and Shareholders' Equity
|
|
$
325,395
|
|
$
312,791
|
|
|
|
|
|
|
|
|
|
|
FARO
TECHNOLOGIES, INC. AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands, except share and per share data)
|
|
June 30,
2012
|
|
July 2,
2011
|
|
|
June 30,
2012
|
|
July 2,
2011
|
SALES
|
|
|
|
|
|
|
|
|
|
Product
|
|
$
55,432
|
|
$
49,692
|
|
|
$
109,856
|
|
$
92,650
|
Service
|
|
11,330
|
|
10,019
|
|
|
22,135
|
|
19,627
|
Total
Sales
|
|
66,762
|
|
59,711
|
|
|
131,991
|
|
112,277
|
COST OF
SALES
|
|
|
|
|
|
|
|
|
|
Product
|
|
22,320
|
|
19,349
|
|
|
42,826
|
|
34,922
|
Service
|
|
7,382
|
|
6,846
|
|
|
14,919
|
|
13,567
|
Total Cost
of Sales (exclusive of depreciation and amortization, shown
separately below)
|
|
29,702
|
|
26,195
|
|
|
57,745
|
|
48,489
|
GROSS
PROFIT
|
|
37,060
|
|
33,516
|
|
|
74,246
|
|
63,788
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
Selling
|
|
15,841
|
|
15,309
|
|
|
31,879
|
|
29,461
|
General
and administrative
|
|
8,134
|
|
6,917
|
|
|
14,762
|
|
13,507
|
Depreciation and amortization
|
|
1,689
|
|
1,722
|
|
|
3,368
|
|
3,336
|
Research
and development
|
|
4,525
|
|
3,814
|
|
|
8,933
|
|
7,446
|
Total
operating expenses
|
|
30,189
|
|
27,762
|
|
|
58,942
|
|
53,750
|
INCOME
FROM OPERATIONS
|
|
6,871
|
|
5,754
|
|
|
15,304
|
|
10,038
|
OTHER
(INCOME) EXPENSE
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
(20)
|
|
(39)
|
|
|
(121)
|
|
(65)
|
Other
(income) expense, net
|
|
401
|
|
124
|
|
|
261
|
|
(5)
|
Interest
expense
|
|
7
|
|
2
|
|
|
20
|
|
31
|
INCOME
BEFORE INCOME TAX EXPENSE
|
|
6,483
|
|
5,667
|
|
|
15,144
|
|
10,077
|
INCOME TAX
EXPENSE
|
|
1,749
|
|
1,434
|
|
|
3,660
|
|
2,601
|
NET INCOME
|
|
$
4,734
|
|
$
4,233
|
|
|
$
11,484
|
|
$
7,476
|
NET INCOME
PER SHARE - BASIC
|
|
$
0.28
|
|
$
0.26
|
|
|
$
0.68
|
|
$
0.46
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
PER SHARE - DILUTED
|
|
$
0.28
|
|
$
0.25
|
|
|
$
0.67
|
|
$
0.45
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares - Basic
|
|
16,921,012
|
|
16,448,229
|
|
|
16,861,221
|
|
16,349,190
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares - Diluted
|
|
17,140,115
|
|
16,845,877
|
|
|
17,157,185
|
|
16,724,019
|
|
|
|
|
|
|
|
|
|
FARO
TECHNOLOGIES, INC. AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Six Months
Ended
|
(in
thousands)
|
|
June 30,
2012
|
|
July 2,
2011
|
|
June 30,
2012
|
|
July 2,
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
4,734
|
|
$
4,233
|
|
$
11,484
|
|
$
7,476
|
Currency
translation adjustments
|
|
(3,022)
|
|
2,771
|
|
(1,688)
|
|
5,342
|
Comprehensive income
|
|
$
1,712
|
|
$
7,004
|
|
$
9,796
|
|
$
12,818
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FARO
TECHNOLOGIES, INC. AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
Six
Months Ended
|
|
|
|
|
|
(in
thousands)
|
|
June
30, 2012
|
|
July 2,
2011
|
CASH FLOWS
FROM:
|
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
|
Net
income
|
|
$
11,484
|
|
$
7,476
|
Adjustments to reconcile net income to net cash provided
by
|
|
|
|
|
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
|
3,368
|
|
3,336
|
Compensation for stock options and
restricted stock units
|
|
1,866
|
|
1,366
|
Provision for (net recovery of)
bad debts
|
|
(84)
|
|
1,082
|
Deferred income tax
benefit
|
|
(744)
|
|
(16)
|
Change in operating assets and
liabilities:
|
|
|
|
|
Decrease (increase)
in:
|
|
|
|
|
Accounts
receivable
|
|
3,535
|
|
5,920
|
Inventories, net
|
|
(6,173)
|
|
(14,773)
|
Prepaid expenses and other current
assets
|
|
(1,569)
|
|
(2,032)
|
Income tax benefit from exercise
of stock options
|
|
(1,114)
|
|
(1,013)
|
Increase (decrease) in:
|
|
|
|
|
Accounts payable and accrued
liabilities
|
|
(6,313)
|
|
44
|
Income taxes payable
|
|
933
|
|
197
|
Customer deposits
|
|
317
|
|
(1,723)
|
Unearned service
revenues
|
|
1,191
|
|
2,200
|
Net cash provided by operating activities
|
|
6,697
|
|
2,064
|
|
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
Purchases of property and
equipment
|
|
(2,533)
|
|
(2,534)
|
Payments for intangible
assets
|
|
(443)
|
|
(425)
|
Net cash used in investing activities
|
|
(2,976)
|
|
(2,959)
|
|
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
Payments on capital leases
|
|
(98)
|
|
(117)
|
Income tax benefit from exercise of
stock options
|
|
1,114
|
|
1,013
|
Proceeds from issuance of stock,
net
|
|
5,601
|
|
6,875
|
Net cash provided by financing activities
|
|
6,617
|
|
7,771
|
|
|
|
|
|
EFFECT OF
EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS
|
|
(130)
|
|
(259)
|
|
|
|
|
|
INCREASE
IN CASH AND CASH EQUIVALENTS
|
|
10,208
|
|
6,617
|
|
|
|
|
|
CASH AND
CASH EQUIVALENTS, BEGINNING OF PERIOD
|
|
64,540
|
|
50,722
|
|
|
|
|
|
CASH AND
CASH EQUIVALENTS, END OF PERIOD
|
|
$
74,748
|
|
$
57,339
|
SOURCE FARO Technologies, Inc.