FARO Reports First Quarter 2013 Results

                   FARO Reports First Quarter 2013 Results

PR Newswire

LAKE MARY, Fla., April 30, 2013

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:

  odevelopment by others of new or improved products, processes or
    technologies that make the Company's products obsolete or less
  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, 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.

                                      Three Months Ended
(in thousands, except share data)     March 30, 2013       March 31, 2012
Product                               $     52,482    $     54,424
Service                               12,888               10,805
Total Sales                           65,370               65,229
Product                               21,339               20,506
Service                               7,206                7,537
Total Cost of Sales (exclusive of
depreciation and amortization,        28,545               28,043

shown separately below)
GROSS PROFIT                          36,825               37,186
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
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

                                                  March 30,    December 31,
                                                  2013         2012
(in thousands, except share data)                 (unaudited)
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
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      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   17           19
Total Liabilities                                 64,501       68,071
Shareholders' Equity:
Common stock - par value $.001, 50,000,000
shares authorized; 17,771,559 and
                                                  18           18
17,653,879 issued; 17,091,324 and 16,973,644
outstanding, respectively
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       (9,075)      (9,075)
Total Shareholders' Equity                        288,757      282,736
Total Liabilities and Shareholders' Equity        $ 353,258   $   350,807

                                           Three Months Ended
(in thousands)                             March 30, 2013       March 31, 2012
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         1,018                773
restricted stock units
Provision for bad debts                    274                  11
Deferred income tax (benefit) expense      1,162                (5)
Change in operating assets and
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  (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           10,273               4,334
operating activities
Purchases of property and equipment        (256)                (703)
Payments for intangible assets             (494)                (193)
 Net cash used in investing         (750)                (896)
Payments on capital leases                 (63)                 (131)
Income tax benefit from exercise of stock  808                  1,056
Proceeds from issuance of stock, net       3,049                5,288
 Net cash provided by financing     3,794                6,213
EFFECT OF EXCHANGE RATE CHANGES ON CASH    (1,952)              (603)
INCREASE IN CASH AND CASH EQUIVALENTS     11,365               9,048
CASH AND CASH EQUIVALENTS, BEGINNING OF    93,233               64,540
CASH AND CASH EQUIVALENTS, END OF PERIOD   $      104,598  $      

                                    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.

Website: http://www.faro.com
Contact: Keith Bair, Senior Vice President and CFO, keith.bair@FARO.com,
Press spacebar to pause and continue. Press esc to stop.