FARO Reports Fourth Quarter and Full Year 2012 Results PR Newswire LAKE MARY, Fla., Feb. 27, 2013 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: odevelopment by others of new or improved products, processes or technologies that make the Company's products obsolete or less competitive; oproduction delays caused by shortages of raw materials incorporated in the Company's products; othe cyclical nature of the industries of the Company's customers and material adverse changes in customers' access to liquidity and capital; odeclines 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; orisks 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; oother 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 Dec 31, 2012 Dec 31, 2011 Dec 31, 2012 Dec 31, 2011 share data) 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 37,601 33,568 123,776 110,475 amortization, shown separately below) GROSS PROFIT 43,069 43,512 149,619 143,689 OPERATING EXPENSES: Selling 18,413 17,960 64,446 62,117 General and 7,037 6,875 29,065 26,806 administrative Depreciation and 1,812 1,665 6,976 6,712 amortization Research and 4,580 4,159 17,578 15,196 development Total operating 31,842 30,659 118,065 110,831 expenses INCOME FROM 11,227 12,853 31,554 32,858 OPERATIONS 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 10,711 12,424 30,942 31,705 TAX EXPENSE 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 16,966,063 16,668,567 16,910,830 16,503,773 shares - Basic Weighted average 17,074,074 16,940,438 17,129,128 16,868,430 shares - Diluted 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 (34,305) (29,134) amortization 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 45 84 leases Total current liabilities 55,682 53,948 Unearned service revenues - less current 11,221 9,540 portion Deferred tax liability, net 1,149 1,148 Obligations under capital leases - less 19 257 current portion 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 18 17 issued; 16,973,644 and 16,700,875 outstanding, respectively 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 (9,075) (9,075) shares 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 4,018 2,727 2,392 restricted stock units Provision for (net recovery of) bad (23) 2,169 2,408 debts 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 (1,870) (1,417) (2,172) assets Income tax benefit from exercise of (1,135) (1,593) (133) stock options Increase (decrease) in: Accounts payable and accrued (3,079) 4,644 10,435 liabilities 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 27,873 8,689 14,981 (used in) operating activities 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 (5,204) (5,364) (5,026) activities 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 1,135 1,593 133 stock options Proceeds from issuance of stock, net 6,162 9,150 1,405 Net cash provided by 7,165 10,580 1,454 financing activities EFFECT OF EXCHANGE RATE CHANGES ON (1,141) (87) 4,235 CASH AND CASH EQUIVALENTS INCREASE IN CASH AND CASH 28,693 13,818 15,644 EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING 64,540 50,722 35,078 OF YEAR CASH AND CASH EQUIVALENTS, END OF $ 93,233 $ 64,540 $ 50,722 YEAR SOURCE FARO Technologies, Inc. Website: http://www.faro.com Contact: Keith Bair, Senior Vice President and CFO, keith.bair@FARO.com, +1-407-333-9911
FARO Reports Fourth Quarter and Full Year 2012 Results
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