LAKE MARY, Fla., Aug. 2, 2016 /PRNewswire/ -- FARO®
(NASDAQ: FARO), the world's most trusted source for 3D measurement
and imaging solutions for metrology, factory automation, product
design, public safety, BIM-CIM and 3D solutions and services, today
announced its financial results for the second quarter and six
months ended June 30, 2016.
Six months ended June 30,
2016
Sales were $154.3
million for the six months ended June
30, 2016, up 0.4% compared with $153.7 million for the six months ended
June 27, 2015. Excluding the
negative impact of foreign exchange rates on sales of $0.9 million, sales for the first six months of
2016 would have increased approximately 1% compared with the same
prior year period. Our year-to-date 2016 sales increase is
mostly related to year-over-year growth in service revenue and
metrology product sales offset partly by lower 3D documentation
sales.
New order bookings for the six months ended June 30, 2016 were $155.1
million, up 1.4% compared with $152.9
million for the six months ended June
27, 2015.
Gross margin was 56.1%, up 1.4 percentage points compared with
54.7% in the prior year period mostly due to higher average selling
prices and favorable sales mix.
Operating income was $8.8 million,
up 21.3% compared with $7.3 million
in the same prior year period, reflecting an increase in gross
margin on slightly higher sales.
Net income and EPS for the first six months of 2016 was
$6.5 million and $0.39 per share, respectively, up 34.5% as
compared with $4.8 million and
$0.27 per share, respectively, for
the first six months of 2015.
Our cash and short-term investments increased by $26.1 million to $176.5
million at June 30, 2016 from
$150.4 million at December 31, 2015 primarily driven by strong cash
flow from operations of $27.7
million.
Second quarter 2016
Sales for the quarter ended
June 30, 2016 were $78.5 million, down 6.3% compared with
$83.8 million in the second quarter
last year. Foreign exchange rates had a slightly positive
impact on sales of $0.2 million,
increasing sales growth by 0.2 percentage points. Our
decrease in sales reflected lower product sales within the Americas
region given strong prior year performance, offset partly by higher
metrology sales in Asia-Pacific
and an increase in global service revenue.
New order bookings were $81.6
million for the second quarter of 2016, down 2.7% compared
with $83.8 million for the second
quarter of 2015.
Gross margin for the quarter was 55.9%, up 2.7 percentage points
compared with 53.2% in the prior year period mostly due to higher
average selling prices, warranty revenue growth, and higher
manufacturing costs in the prior year period.
Operating income for the quarter was $4.5
million, down 17.1% compared with $5.4 million in the prior year period, mostly due
to lower product sales partially offset by an increase in gross
margin.
Net income and EPS for the quarter was $3.4 million and $0.20 per share, respectively, compared with
$4.1 million and $0.24 per share, respectively, in the prior year
period.
"For the first six months of 2016, we delivered a 35% increase
in net income by driving gross margin and managing operating
expenses," stated Dr. Simon Raab,
President and Chief Executive Officer. "We continue to
execute on our renewal initiatives to ensure FARO's technical and
market leadership in 3D measurement. The vertical focus is
guiding our R&D teams and M&A efforts in the development of
a regular drumbeat of new market-leading product solutions for
those areas of interest. We released six new or upgraded
products in the quarter; and on July
11th, we acquired BuildIT Software &
Solutions Ltd. to strengthen our metrology software offering.
We will remain attentive to annual performance while undertaking
this top-to-bottom reorganization in order to deliver long-term
shareholder value."
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 long-term growth, demand for and
customer acceptance of FARO's products, anticipated improvement in
the markets in which FARO operates, and FARO's product development
and product launches. 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,"
"are," "expects," "continues," "may," "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 inability to successfully identify and acquire
target companies or achieve expected benefits from acquisitions
that are consummated;
- 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 of 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, 2015.
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.
About FARO
FARO is the world's most trusted source for 3D measurement
technology. The Company develops and markets computer-aided
measurement and imaging devices and software. Technology from FARO
permits high-precision 3D measurement, imaging and comparison of
parts and complex structures within production and quality
assurance processes. The devices are used for inspecting components
and assemblies, rapid prototyping, documenting large volume spaces
or structures in 3D, surveying and construction, as well as for
investigation and reconstruction of accident sites or crime
scenes.
FARO's global headquarters are 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™ and FARO Factory Array 3D Imager 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, Vietnam, Thailand, South
Korea, and Japan.
More information is available at http://www.faro.com.
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except
share and per share data)
|
|
June 30,
2016
|
|
June 27,
2015
|
|
June 30,
2016
|
|
June 27,
2015
|
SALES
|
|
|
|
|
|
|
|
|
Product
|
|
$
61,640
|
|
$
69,437
|
|
$
120,952
|
|
$
124,481
|
Service
|
|
16,898
|
|
14,338
|
|
33,334
|
|
29,233
|
Total sales
|
|
78,538
|
|
83,775
|
|
154,286
|
|
153,714
|
COST OF
SALES
|
|
|
|
|
|
|
|
|
Product
|
|
25,055
|
|
29,532
|
|
49,063
|
|
51,709
|
Service
|
|
9,547
|
|
9,697
|
|
18,614
|
|
17,848
|
Total cost of sales
(exclusive of depreciation and amortization, shown separately
below)
|
|
34,602
|
|
39,229
|
|
67,677
|
|
69,557
|
GROSS
PROFIT
|
|
43,936
|
|
44,546
|
|
86,609
|
|
84,157
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
Selling and
marketing
|
|
18,747
|
|
20,063
|
|
36,372
|
|
39,168
|
General and
administrative
|
|
10,167
|
|
9,066
|
|
20,708
|
|
18,867
|
Depreciation and
amortization
|
|
3,266
|
|
2,739
|
|
6,352
|
|
5,232
|
Research and
development
|
|
7,259
|
|
7,254
|
|
14,350
|
|
13,610
|
Total operating
expenses
|
|
39,439
|
|
39,122
|
|
77,782
|
|
76,877
|
INCOME FROM
OPERATIONS
|
|
4,497
|
|
5,424
|
|
8,827
|
|
7,280
|
OTHER (INCOME)
EXPENSE
|
|
|
|
|
|
|
|
|
Interest income,
net
|
|
(54)
|
|
(24)
|
|
(98)
|
|
(43)
|
Other expense,
net
|
|
240
|
|
83
|
|
991
|
|
1,390
|
INCOME BEFORE INCOME
TAX EXPENSE
|
|
4,311
|
|
5,365
|
|
7,934
|
|
5,933
|
INCOME
TAX EXPENSE
|
|
919
|
|
1,217
|
|
1,462
|
|
1,121
|
NET INCOME
|
|
$
3,392
|
|
$
4,148
|
|
$
6,472
|
|
$
4,812
|
NET INCOME PER SHARE
- BASIC
|
|
$
0.20
|
|
$
0.24
|
|
$
0.39
|
|
$
0.28
|
|
|
|
|
|
|
|
|
|
NET INCOME PER SHARE
- DILUTED
|
|
$
0.20
|
|
$
0.24
|
|
$
0.39
|
|
$
0.27
|
|
|
|
|
|
|
|
|
|
Weighted average
shares - Basic
|
|
16,659,115
|
|
17,384,382
|
|
16,634,323
|
|
17,360,749
|
|
|
|
|
|
|
|
|
|
Weighted average
shares - Diluted
|
|
16,672,600
|
|
17,502,219
|
|
16,654,415
|
|
17,500,619
|
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
2016
|
|
December
31,
|
(in thousands, except
share data)
|
|
(unaudited)
|
|
2015
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
133,541
|
|
$
107,356
|
Short-term
investments
|
|
42,975
|
|
42,994
|
Accounts receivable,
net
|
|
56,825
|
|
69,918
|
Inventories,
net
|
|
51,809
|
|
45,571
|
Deferred income tax
assets, net
|
|
7,547
|
|
7,792
|
Prepaid expenses and
other current assets
|
|
16,592
|
|
18,527
|
Total current
assets
|
|
309,289
|
|
292,158
|
Property and
equipment:
|
|
|
|
|
Machinery and
equipment
|
|
55,702
|
|
54,124
|
Furniture and
fixtures
|
|
6,164
|
|
5,945
|
Leasehold
improvements
|
|
19,271
|
|
18,471
|
Property and equipment, at cost
|
|
81,137
|
|
78,540
|
Less: accumulated
depreciation and amortization
|
|
(47,745)
|
|
(42,594)
|
Property and equipment, net
|
|
33,392
|
|
35,946
|
Goodwill
|
|
26,963
|
|
26,371
|
Intangible assets,
net
|
|
15,573
|
|
15,985
|
Service and sales
demonstration inventory, net
|
|
33,097
|
|
33,709
|
Deferred income tax
assets, net
|
|
4,087
|
|
4,050
|
Other long term
assets
|
|
947
|
|
967
|
Total
assets
|
|
$
423,348
|
|
$
409,186
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
10,848
|
|
$
11,345
|
Accrued
liabilities
|
|
21,737
|
|
22,574
|
Income taxes
payable
|
|
452
|
|
-
|
Current portion of
unearned service revenues
|
|
26,940
|
|
26,114
|
Customer
deposits
|
|
2,085
|
|
2,998
|
Total current
liabilities
|
|
62,062
|
|
63,031
|
Unearned service
revenues - less current portion
|
|
16,005
|
|
15,025
|
Deferred income tax
liabilities
|
|
872
|
|
686
|
Other long-term
liabilities
|
|
2,813
|
|
2,800
|
Total
liabilities
|
|
81,752
|
|
81,542
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Common stock - par
value $.001, 50,000,000 shares authorized; 18,163,600 and
18,077,594 issued; 16,674,124 and 16,588,118 outstanding,
respectively
|
|
18
|
|
18
|
Additional paid-in
capital
|
|
209,650
|
|
206,996
|
Retained
earnings
|
|
178,801
|
|
172,329
|
Accumulated other
comprehensive loss
|
|
(15,035)
|
|
(19,861)
|
Common stock in
treasury, at cost - 1,489,476 shares
|
|
(31,838)
|
|
(31,838)
|
Total shareholders'
equity
|
|
341,596
|
|
327,644
|
Total liabilities and
shareholders' equity
|
|
$
423,348
|
|
$
409,186
|
|
|
|
|
|
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
(in
thousands)
|
|
June 30,
2016
|
|
June 27,
2015
|
CASH FLOWS
FROM:
|
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
|
Net income
|
|
$
6,472
|
|
$
4,812
|
Adjustments to
reconcile net income to net cash provided by (used in)
|
|
|
|
|
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
|
6,352
|
|
5,232
|
Compensation for stock
options and restricted stock units
|
|
2,731
|
|
2,468
|
Provision for bad
debts
|
|
574
|
|
410
|
Loss on disposal of
assets
|
|
305
|
|
644
|
Write-down of
inventories
|
|
1,440
|
|
1,505
|
Deferred income tax
(benefit) expense
|
|
(261)
|
|
561
|
Income tax benefit
from exercise of stock options
|
|
(70)
|
|
(286)
|
Change in operating
assets and liabilities:
|
|
|
|
|
Decrease (increase)
in:
|
|
|
|
|
Accounts
receivable
|
|
13,818
|
|
11,820
|
Inventories
|
|
(4,918)
|
|
(15,097)
|
Prepaid expenses and
other current assets
|
|
2,115
|
|
(1,948)
|
(Decrease) increase
in:
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
(1,596)
|
|
(12,636)
|
Income taxes
payable
|
|
522
|
|
722
|
Customer
deposits
|
|
(870)
|
|
(589)
|
Unearned service
revenues
|
|
1,114
|
|
782
|
Net cash
provided by (used in) operating activities
|
|
27,728
|
|
(1,600)
|
|
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
Purchases of property
and equipment
|
|
(2,580)
|
|
(6,073)
|
Payments for
intangible assets
|
|
(712)
|
|
(1,185)
|
Purchase of businesses
acquired
|
|
-
|
|
(12,011)
|
Net cash
used in investing activities
|
|
(3,292)
|
|
(19,269)
|
|
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
Payments on capital
leases
|
|
(4)
|
|
(5)
|
Income tax benefit
from exercise of stock options
|
|
70
|
|
286
|
Proceeds from issuance
of stock, net
|
|
513
|
|
2,175
|
Net cash
provided by financing activities
|
|
579
|
|
2,456
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
|
1,170
|
|
(300)
|
|
|
|
|
|
INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS
|
|
26,185
|
|
(18,713)
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS, BEGINNING OF PERIOD
|
|
107,356
|
|
109,289
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS, END OF PERIOD
|
|
$
133,541
|
|
$
90,576
|
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in
thousands)
|
|
June 30,
2016
|
|
June 27,
2015
|
|
June 30,
2016
|
|
June 27,
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
3,392
|
|
$
4,148
|
|
$
6,472
|
|
$
4,812
|
Currency translation
adjustments, net of income tax
|
|
(1,795)
|
|
2,191
|
|
4,826
|
|
(4,587)
|
Comprehensive
income
|
|
$
1,597
|
|
$
6,339
|
|
$
11,298
|
|
$
225
|
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SOURCE FARO Technologies, Inc.