FARO Reports First Quarter 2013 Results

Apr 30, 2013, 16:02 ET from FARO Technologies, Inc.

LAKE MARY, Fla., April 30, 2013 /PRNewswire/ -- FARO Technologies, Inc. (NASDAQ: FARO) today announced results for the first quarter ended March 30, 2013. Sales in the first quarter of 2013 increased $0.2 million to $65.4 million, from $65.2 million in the first quarter of 2012. The Company reported net income of $4.6 million, or $0.27 per share, in the first quarter of 2013, compared with $6.7 million, or $0.39 per share, in the first quarter of 2012.

(Logo:  http://photos.prnewswire.com/prnh/20110415/MM84316LOGO )

New order bookings for the first quarter of 2013 were $64.6 million, an increase of 4.0% from $62.1 million in the first quarter of 2012.

Gross margin for the first quarter of 2013 was 56.3%, compared with 57.0% in the first quarter of 2012. Gross margins were slightly lower, primarily as a result of proportionately higher laser scanner sales sold through the distribution channel, which yield lower margins but allow FARO to avoid incurring related selling expense, as well as some pricing pressure in certain metrology products. Gross margins have improved from 53.4% in the fourth quarter of 2012, largely as a result of manufacturing cost improvements and increased margins from warranty sales.

The Company's operating margin for the first quarter of 2013 decreased to 8.7% from 12.9% in the first quarter of 2012, resulting from slightly lower gross margins and increased staffing and travel costs of approximately $1.6 million primarily in our sales and marketing, customer service and research and development organizations.

The Company's cash balance increased by $11.3 million during the quarter.

"Our results for the quarter reflect continuing sluggish European and Asian markets where order and sales levels remain somewhat weaker than expected. In the Americas, order volume in the quarter was particularly strong, up 25% year-over-year.  As expected, competition has intensified in tight markets.  Our overarching goals are to remain the industry leader and grow sales and earnings in all market conditions.  As such, in the first quarter of 2013 we made additional investments in sales and marketing personnel to aggressively grow product and service revenue, and expanded our research & development teams to accelerate new product development," stated Jay Freeland, President and Chief Executive Officer.

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 and competition for its products, its position as industry leader 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;
  • 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, 2012.

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 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.

Approximately 15,000 customers are operating more than 30,000 installations of FARO's systems, worldwide. The Company's global headquarters is located in Lake Mary, FL; its European regional headquarters in Stuttgart, Germany; and its Asia/Pacific regional headquarters in Singapore. FARO has offices in Brazil, Mexico, United Kingdom, France, Spain, Italy, Poland, Netherlands, India, China, Malaysia, Vietnam, Thailand and Japan.

More information is available at http://www.faro.com.

  

FARO TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

Three Months Ended 

(in thousands, except share data)

March 30, 2013

March 31, 2012

SALES

Product

$          52,482

$          54,424

Service

12,888

10,805

Total Sales

65,370

65,229

COST OF SALES 

Product

21,339

20,506

Service

7,206

7,537

Total Cost of Sales (exclusive of depreciation and amortization,

shown separately below)

28,545

28,043

GROSS PROFIT

36,825

37,186

OPERATING EXPENSES:

Selling 

16,650

16,038

General and administrative

7,515

6,628

Depreciation and amortization

1,833

1,679

Research and development

5,125

4,408

Total operating expenses

31,123

28,753

INCOME FROM OPERATIONS

5,702

8,433

OTHER (INCOME) EXPENSE

Interest income

(16)

(101)

Other expense (income), net

115

(140)

Interest expense

1

13

INCOME BEFORE INCOME TAX  EXPENSE 

5,602

8,661

INCOME TAX EXPENSE

1,028

1,911

NET INCOME 

$            4,574

$            6,750

NET INCOME PER SHARE - BASIC

$              0.27

$              0.40

NET INCOME PER SHARE - DILUTED

$              0.27

$              0.39

Weighted average shares - Basic

17,009,773

16,788,241

Weighted average shares - Diluted

17,176,876

17,162,959

  

FARO TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

March 30,

December 31,

2013

2012

(in thousands, except share data)

(unaudited)

ASSETS

Current Assets:

Cash and cash equivalents

$  104,598

$        93,233

Short-term investments

64,991

64,990

Accounts receivable, net

53,721

62,559

Inventories, net

50,024

48,894

Deferred income taxes, net

6,025

7,216

Prepaid expenses and other current assets

13,106

11,186

Total current assets

292,465

288,078

Property and Equipment:

Machinery and equipment

32,196

32,236

Furniture and fixtures

6,366

6,516

Leasehold improvements

10,812

10,897

    Property and equipment at cost

49,374

49,649

Less: accumulated depreciation and amortization

(34,913)

(34,305)

    Property and equipment, net

14,461

15,344

Goodwill

18,485

18,816

Intangible assets, net

7,186

7,048

Service inventory

18,316

19,125

Deferred income taxes, net

2,345

2,396

Total Assets

$  353,258

$      350,807

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:

Accounts payable

$     9,460

$        10,413

Accrued liabilities

18,260

18,216

Income taxes payable

2,379

4,886

Current portion of unearned service revenues

19,235

19,460

Customer deposits

2,692

2,662

Current portion of obligations under capital leases

28

45

      Total current liabilities

52,054

55,682

Unearned service revenues - less current portion

11,312

11,221

Deferred tax liability, net

1,118

1,149

Obligations under capital leases - less current portion

17

19

Total Liabilities

64,501

68,071

Shareholders' Equity:

Common stock - par value $.001, 50,000,000 shares authorized; 17,771,559 and

17,653,879 issued; 17,091,324 and 16,973,644 outstanding, respectively

18

18

Additional paid-in capital

185,969

181,094

Retained earnings

108,933

104,358

Accumulated other comprehensive income

2,912

6,341

Common stock in treasury, at cost - 680,235 shares

(9,075)

(9,075)

Total Shareholders' Equity

288,757

282,736

Total Liabilities and Shareholders' Equity

$  353,258

$      350,807

  

FARO TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Three Months Ended

(in thousands)

March 30, 2013

March 31, 2012

CASH FLOWS FROM:

OPERATING ACTIVITIES:

Net income 

$              4,574

$              6,750

Adjustments to reconcile net income to net cash provided by

    operating activities:

Depreciation and amortization

1,833

1,679

Compensation for stock options and restricted stock units

1,018

773

Provision for bad debts

274

11

Deferred income tax (benefit) expense

1,162

(5)

Change in operating assets and liabilities:

Decrease (increase) in:

Accounts receivable

7,541

9,254

Inventories, net 

(1,299)

(6,432)

Prepaid expenses and other current assets

(2,069)

(1,979)

Income tax benefit from exercise of stock options

(808)

(1,056)

Increase (decrease) in:

Accounts payable and accrued liabilities

(676)

(4,290)

Income taxes payable

(1,658)

(774)

Customer deposits

5

(258)

Unearned service revenues

376

661

            Net cash provided by operating activities

10,273

4,334

INVESTING ACTIVITIES:

Purchases of property and equipment

(256)

(703)

Payments for intangible assets

(494)

(193)

        Net cash used in investing activities

(750)

(896)

 FINANCING ACTIVITIES:

Payments on capital leases

(63)

(131)

Income tax benefit from exercise of stock options

808

1,056

Proceeds from issuance of stock, net

3,049

5,288

        Net cash provided by financing activities

3,794

6,213

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

(1,952)

(603)

INCREASE  IN CASH AND CASH EQUIVALENTS

11,365

9,048

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

93,233

64,540

CASH AND CASH EQUIVALENTS, END OF PERIOD

$           104,598

$             73,588

  

FARO TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended 

(in thousands)

March 30, 2013

March 31, 2012

Net income

$            4,574

$            6,750

Currency translation adjustments

(3,429)

1,334

Comprehensive income

$            1,145

$            8,084

 

SOURCE FARO Technologies, Inc.



RELATED LINKS

http://www.faro.com