FARO Reports Third Quarter 2016 Financial Results

LAKE MARY, Fla., Nov. 1, 2016 /PRNewswire/ -- FARO^® FARO, the world's most trusted source for 3D measurement and imaging solutions and services for factory metrology, product design, construction BIM/CIM, and public safety forensics applications, today announced its financial results for the third quarter and nine months ended September 30, 2016.

"FARO continued to execute on its renewal and reorganization initiatives," stated Dr. Simon Raab, President and Chief Executive Officer.  "Our new product drumbeat included the launch of the next-generation FARO Focus^S 150/350 Laser Scanners.  Strategically, we completed two important acquisitions: Laser Projection Technologies, Inc. and BuildIT Software & Solutions Ltd.  These acquisitions broadened our product lines and added new technologies and capabilities that will enhance our competitive position in certain key vertical markets.  Our third quarter financial performance was highlighted by a 9.8% increase in sales.  We have made excellent progress on all our renewal initiatives.  While year-to-date net income increased by 92.5%, it may continue to be negatively impacted by our reorganization initiatives which we expect to complete by mid-2017."

Nine months ended September 30, 2016

Sales at $233.9 million for the nine months ended September 30, 2016, grew 3.4% compared with $226.2 million in the comparable period last year on increased metrology products and global services revenue. New order bookings at $234.9 million, increased by 4.3% compared with $225.2 million in the same prior year period.

Gross margin was 55.3%, increased by 2.7 percentage points over the comparable prior year period due to higher average selling prices, strong service revenue growth, and the effect of a $7.9 million write-down of inventory in the third quarter of 2015.

Operating income was $9.7 million, up 52.1% compared with $6.4 million in the same prior year period, reflecting higher sales and gross margin offset partly by an increase in operating expenses arising largely from increased staffing, compensation and acquisition expenses.  Operating margin was 4.1% for the first nine months of 2016, compared with 2.8% in the comparable period last year.

Net income was $7.6 million or $0.45 per diluted share, compared with $3.9 million or $0.22 per diluted share for the first nine months of 2015.

Cash flow from operations for the first nine months of 2016 was $28.5 million, up $20.6 million compared with $7.9 million in the prior year period reflecting improved inventory and accounts payable management.  As of September 30, 2016 cash and short-term investments totaled $153.3 million of which $92.5 million was held by foreign subsidiaries.

Third quarter 2016

Sales for the quarter ended September 30, 2016 were $79.6 million, up 9.8% compared with $72.5 million in the third quarter last year reflecting a significant increase in product sales within the Asia region, a modest product sales growth in the Americas region, and a strong global growth in service revenue. New order bookings were $79.8 million for the third quarter of 2016, up 10.5% compared with $72.3 million for the third quarter of 2015.

Gross margin for the quarter was 53.6%, up 5.5 percentage points compared with 48.1% in the prior year period primarily due to a $7.9 million write-down of inventory recorded in the third quarter of 2015, partially offset by lower average selling prices arising from our initiative to reduce aged service and sales demonstration inventory.

Operating income for the quarter was $0.8 million compared with a loss of $0.9 million in the prior year period reflecting higher sales and gross margin offset partly by an increase in operating expenses.  Operating margin was 1.1% in the third quarter of 2016, compared with (1.3)% in the prior year period.

Net income for the quarter was $1.1 million or $0.07 per diluted share, compared with a loss of $0.9 million or $0.05 per diluted share in the prior year period.

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 Cobalt Array 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, Japan, and Australia.

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

 

 

 

 

 

 

 

 

 

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SOURCE FARO Technologies, Inc.