2014

FARO Reports Fourth Quarter and Full Year 2012 Results

LAKE MARY, Fla., Feb. 27, 2013 /PRNewswire/ -- FARO Technologies, Inc. (NASDAQ: FARO) today announced results for the fourth quarter ended December 31, 2012.  Sales in the fourth quarter of 2012 increased 4.7% to $80.7 million, from $77.1 million in the fourth quarter of 2011.  The Company reported net income decreased to $7.8 million, or $0.46 per share, in the fourth quarter of 2012, from $9.5 million, or $0.56 per share, in the fourth quarter of 2011.

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

Fiscal 2012 sales were $273.4 million, an increase of 7.6% compared to fiscal 2011 sales of $254.2 million.  Net income for fiscal 2012 was $23.0 million compared to $23.4 million in fiscal 2011.  The decline in net income was attributable in part to legal fees of $3.7 million in fiscal 2012, compared with $1.3 million in 2011, associated with the FCPA Monitor and the Nikon Patent case, both of which were substantially and favorably resolved during 2012.  Cash flow from operating activities for 2012 was $27.9 million, compared to $8.7 million in 2011.

New order bookings for the fourth quarter of 2012 were $82.1 million, an increase of $5.0 million, or 6.5%, compared to $77.1 million in the fourth quarter of 2011.  New order bookings for fiscal 2012 were $276.2 million, an increase of 8.0% from $255.7 million in fiscal 2011.   

"Performance in the fourth quarter and for the full year was solid in light of the economic headwinds we faced in most of our end markets.  Although customer interest was strong throughout the year and our new products were well received, deal closure rates were slower reflecting continued economic uncertainty," stated Jay Freeland, FARO's President & CEO.    

Sales of the Focus Laser Scanner were particularly strong.  Gross margins on this product are lower than the Company's other products primarily because of greater reliance on the distribution channel compared to the Company's other products. However, those sales involve minimal associated sales and marketing expenses.  Overall gross margin for the fourth quarter of 2012 was 53.4%, compared to 56.5% in the fourth quarter of 2011.

The Company's operating margin for the fourth quarter decreased to 13.9%, compared to 16.7% in the fourth quarter of 2011 and included approximately $0.4 million of professional fees related to the Company's patent litigation.

"Although our overall 2012 results were satisfactory, they did not meet our expectations.  In 2013, we anticipate continuing market uncertainty.  To address this and drive improved performance, we expect to continue to strengthen our product portfolio, increase sales coverage around the world, and tighten cost controls across the Company's operations," 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
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 



Twelve Months Ended 



















(in thousands, except share and per share data)

Dec 31, 2012


Dec 31, 2011



Dec 31, 2012


Dec 31, 2011

SALES









Product

$               68,775


$               65,953



$             227,905


$             212,635

Service

11,895


11,127



45,490


41,529

Total Sales

80,670


77,080



273,395


254,164

COST OF SALES 









Product

30,170


25,881



94,103


82,408

Service

7,431


7,687



29,673


28,067

Total Cost of Sales (exclusive of depreciation and amortization, shown separately below)

37,601


33,568



123,776


110,475

GROSS PROFIT

43,069


43,512



149,619


143,689










OPERATING EXPENSES:









Selling 

18,413


17,960



64,446


62,117

General and administrative

7,037


6,875



29,065


26,806

Depreciation and amortization

1,812


1,665



6,976


6,712

Research and development

4,580


4,159



17,578


15,196

Total operating expenses

31,842


30,659



118,065


110,831

INCOME FROM OPERATIONS

11,227


12,853



31,554


32,858

OTHER (INCOME) EXPENSE









Interest income

(19)


(17)



(160)


(101)

Other expense, net

529


442



744


1,217

Interest expense

6


4



28


37

INCOME BEFORE INCOME TAX  EXPENSE 

10,711


12,424



30,942


31,705

INCOME TAX EXPENSE

2,870


2,952



7,944


8,328

NET INCOME 

$                7,841


$                9,472



$               22,998


$               23,377

NET INCOME PER SHARE - BASIC

$                  0.46


$                  0.57



$                   1.36


$                   1.42










NET INCOME PER SHARE - DILUTED

$                  0.46


$                  0.56



$                   1.34


$                   1.39










Weighted average shares - Basic

16,966,063


16,668,567



16,910,830


16,503,773










Weighted average shares - Diluted

17,074,074


16,940,438



17,129,128


16,868,430

 

 

FARO TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS













December 31,


December 31,

(in thousands, except share data)


2012


2011

ASSETS





Current Assets:





Cash and cash equivalents


$        93,233


$        64,540

Short-term investments


64,990


64,997

Accounts receivable, net


62,559


57,512

Inventories, net


48,894


49,934

Deferred income taxes, net


7,216


5,297

Prepaid expenses and other current assets


11,186


9,207

Total current assets


288,078


251,487

Property and Equipment:





Machinery and equipment


32,236


29,171

Furniture and fixtures


6,516


5,963

Leasehold improvements


10,897


10,233

    Property and equipment at cost


49,649


45,367

Less: accumulated depreciation and amortization


(34,305)


(29,134)

    Property and equipment, net


15,344


16,233

Goodwill


18,816


18,610

Intangible assets, net


7,048


6,849

Service inventory


19,125


17,316

Deferred income taxes, net


2,396


2,296

Total Assets


$      350,807


$      312,791

LIABILITIES AND SHAREHOLDERS' EQUITY





Current Liabilities:





Accounts payable


$        10,413


$        13,396

Accrued liabilities


18,216


18,076

Income taxes payable


4,886


2,682

Current portion of unearned service revenues


19,460


15,638

Customer deposits


2,662


4,072

Current portion of obligations under capital leases


45


84

      Total current liabilities


55,682


53,948

Unearned service revenues - less current portion


11,221


9,540

Deferred tax liability, net


1,149


1,148

Obligations under capital leases - less current portion


19


257

Total Liabilities


68,071


64,893






Shareholders' Equity:





Common stock - par value $.001, 50,000,000 shares authorized; 17,653,879 and 17,381,110 issued; 16,973,644 and 16,700,875 outstanding, respectively


18


17

Additional paid-in capital


181,094


169,780

Retained earnings


104,358


81,360

Accumulated other comprehensive income


6,341


5,816

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


(9,075)


(9,075)

Total Shareholders' Equity


282,736


247,898

Total Liabilities and Shareholders' Equity


$      350,807


$      312,791

 

 

FARO TECHNOLOGIES, INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF CASH FLOWS















Years Ended December 31,








(in thousands)


2012


2011


2010

CASH FLOWS FROM:







OPERATING ACTIVITIES:







Net income 


$    22,998


$    23,377


$       11,068

Adjustments to reconcile net income to net cash provided by







    operating activities:







Depreciation and amortization


6,976


6,712


6,326

Compensation for stock options and restricted stock units


4,018


2,727


2,392

Provision for (net recovery of) bad debts


(23)


2,169


2,408

Deferred income tax benefit


(2,016)


(672)


(693)

Change in operating assets and liabilities:







Decrease (increase) in:







Accounts receivable


(4,840)


(8,979)


(13,018)

Inventories, net 


(844)


(27,329)


(6,273)

Prepaid expenses and other current assets


(1,870)


(1,417)


(2,172)

Income tax benefit from exercise of stock options


(1,135)


(1,593)


(133)

Increase (decrease) in:







Accounts payable and accrued liabilities


(3,079)


4,644


10,435

Income taxes payable


3,497


2,998


829

Customer deposits


(1,374)


668


1,474

Unearned service revenues


5,565


5,384


2,338

            Net cash provided by (used in) operating activities


27,873


8,689


14,981








INVESTING ACTIVITIES:







Purchases of property and equipment


(3,843)


(4,474)


(4,047)

Payments for intangible assets


(1,361)


(890)


(979)

        Net cash used in investing activities


(5,204)


(5,364)


(5,026)








 FINANCING ACTIVITIES:







Proceeds from notes payable


-


-


2,490

Payments on notes payable


-


-


(2,490)

Payments on capital leases


(132)


(163)


(84)

Income tax benefit from exercise of stock options


1,135


1,593


133

Proceeds from issuance of stock, net


6,162


9,150


1,405

        Net cash provided by financing activities


7,165


10,580


1,454








EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS


(1,141)


(87)


4,235








INCREASE  IN CASH AND CASH EQUIVALENTS


28,693


13,818


15,644








CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR


64,540


50,722


35,078








CASH AND CASH EQUIVALENTS, END OF YEAR


$    93,233


$    64,540


$       50,722

 

 

SOURCE FARO Technologies, Inc.



RELATED LINKS
http://www.faro.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.