FARO Reports Third Quarter Revenue Growth of 12%, EPS Growth of 38%

     FARO Reports Third Quarter Revenue Growth of 12%, EPS Growth of 38%

PR Newswire

LAKE MARY, Fla., Oct. 30, 2013

LAKE MARY, Fla., Oct. 30, 2013 /PRNewswire/ --FARO Technologies, Inc.
(NASDAQ: FARO) today announced results for the third quarter ended September
28, 2013. Sales in the third quarter of 2013 increased $7.5 million, or
12.3%, to $68.2 million, from $60.7 million in the third quarter of 2012. The
Company reported net income increased 37.3% to $5.0 million, or $0.29 per
share, in the third quarter of 2013 compared to $3.7 million, or $0.21 per
share, in the third quarter of 2012.

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

New order bookings for the third quarter of 2013 were $63.4 million, an
increase of 3.9% from $61.0 million in the third quarter of 2012.

Gross margin for the third quarter of 2013 was 56.9%, compared to 53.2% in the
third quarter of 2012. Gross margins increased primarily due to lower
manufacturing costs with improved average selling prices for certain metrology
products.

The Company's operating margin for the third quarter increased to 11.1%,
compared to 8.3% in the third quarter of 2012. Operating expenses increased
due to staffing costs and related expenses of $4.1 million primarily in our
sales and marketing and research and development organizations, offset by
lower legal and professional fees of approximately $1.0 million.

"Our strong third quarter revenue growth reflects improved market conditions,
excellent sales execution and the positive effect of several new product
launches. We continued to accelerate our R&D spending in the quarter and we
successfully leveraged our cost base to generate a 38% increase in earnings,"
stated Jay Freeland, FARO's President & CEO. "We launched two important new
products over the last two months.The first was our next generation Laser
Line Probe with increased speed and data density. The second, launched at the
start of the fourth quarter, is our next generation Laser Scanner, the X330.
This new, disruptive scanner increases our measurement range to beyond 330
meters, while improving image clarity twofold and incorporating GPS technology
for positioning. Overall it was a very good quarter for the Company and we
continue to maintain our leadership in the market."

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,
anticipated improvement in the markets in which it operates, its sales
strategy and execution, its product launches, its ability to maintain market
leadership, 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;
  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; and
  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, 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.

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         Nine Months Ended
(in thousands,        September 28,  September    September 28,  September 29,
except share data)    2013           29, 2012     2013           2012
SALES
                      $        $       $        $      
Product                  55,014                          
                                     49,274      162,670       159,130
Service               13,176         11,460       39,219         33,595
Total Sales           68,190         60,734       201,889        192,725
COST OF SALES
Product               21,372         21,107       65,632         63,933
Service               7,997          7,323        23,685         22,242
Total Cost of Sales
(exclusive of
depreciation and      29,369         28,430       89,317         86,175
amortization, shown
separately below)
GROSS PROFIT          38,821         32,304       112,572        106,550
OPERATING EXPENSES:
Selling              16,366         14,154       49,732         46,033
General and           7,275          7,266        22,616         22,028
administrative
Depreciation and      1,699          1,796        5,268          5,164
amortization
Research and          5,884          4,065        16,171         12,998
development
Total operating       31,224         27,281       93,787         86,223
expenses
INCOME FROM           7,597          5,023        18,785         20,327
OPERATIONS
OTHER (INCOME)
EXPENSE
Interest income       (19)           (20)         (54)           (141)
Other expense, net    809            (46)         1,428          215
Interest expense      2              2            3              22
INCOME BEFORE INCOME  6,805          5,087        17,408         20,231
TAX EXPENSE
INCOME TAX EXPENSE    1,763          1,414        4,161          5,074
                      $        $       $        $      
NET INCOME                                             
                      5,042         3,673       13,247        15,157
NET INCOME PER SHARE  $        $       $        $      
- BASIC                                               
                      0.29          0.22        0.78           0.90
NET INCOME PER SHARE  $        $       $        $      
- DILUTED                                             
                      0.29          0.21        0.77           0.88
Weighted average      17,095,066     16,944,120   17,053,223     16,892,338
shares - Basic
Weighted average      17,185,380     17,094,102   17,191,407     17,148,555
shares - Diluted



FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
                                         September 28,
                                         2013                 December 31,
(in thousands, except share data)        (unaudited)          2012
ASSETS
Current Assets:
Cash and cash equivalents                $     116,905   $     93,233
Short-term investments                   64,995               64,990
Accounts receivable, net                 52,939               62,559
Inventories, net                         48,973               48,894
Deferred income taxes, net               6,207                7,216
Prepaid expenses and other current       14,614               11,186
assets
Total current assets                     304,633              288,078
Property and Equipment:
Machinery and equipment                  34,519               32,236
Furniture and fixtures                   6,748                6,516
Leasehold improvements                   11,211               10,897
 Property and equipment at cost       52,478               49,649
Less: accumulated depreciation and       (38,143)             (34,305)
amortization
 Property and equipment, net          14,335               15,344
Goodwill                                 19,125               18,816
Intangible assets, net                   7,972                7,048
Service inventory                        18,137               19,125
Deferred income taxes, net               2,452                2,396
Total Assets                             $     366,654   $    350,807
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable                         $       8,902  $     10,413
Accrued liabilities                      18,786               18,216
Income taxes payable                     324                  4,886
Current portion of unearned service      19,526               19,460
revenues
Customer deposits                        2,324                2,662
Current portion of obligations under     4                    45
capital leases
 Total current liabilities          49,866               55,682
Unearned service revenues - less         11,701               11,221
current portion
Deferred tax liability, net              1,171                1,149
Obligations under capital leases - less  17                   19
current portion
Total Liabilities                        62,755               68,071
Commitments and contingencies
Shareholders' Equity:
Common stock - par value $.001,
50,000,000 shares authorized;
17,795,117 and 17,653,879 issued;        18                   18
17,114,882 and 16,973,644 outstanding,
respectively
Additional paid-in capital               188,413              181,094
Retained earnings                        117,607              104,358
Accumulated other comprehensive income   6,936                6,341
Common stock in treasury, at cost -      (9,075)              (9,075)
680,235 shares
Total Shareholders' Equity               303,899              282,736
Total Liabilities and Shareholders'      $     366,654   $    350,807
Equity



FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
                                  Nine Months Ended
(in thousands)                    September 28, 2013     September 29, 2012
CASH FLOWS FROM:
OPERATING ACTIVITIES:
Net income                       $            $          
                                    13,247               15,157
Adjustments to reconcile net
income to net cash provided by
 operating activities:
Depreciation and amortization     5,268                  5,164
Compensation for stock options    3,237                  2,956
and restricted stock units
Provision for (net recovery of)   426                    (155)
bad debts
Deferred income tax expense       996                    (670)
(benefit) expense
Change in operating assets and
liabilities:
Decrease (increase) in:
Accounts receivable               8,951                  6,398
Inventories, net                 620                    (5,998)
Prepaid expenses and other        (3,365)                (1,231)
current assets
Income tax benefit from exercise  (814)                  (1,135)
of stock options
Increase (decrease) in:
Accounts payable and accrued      (925)                  (7,307)
liabilities
Income taxes payable              (3,700)                82
Customer deposits                 (258)                  (1,707)
Unearned service revenues         512                    1,730
 Net cash provided by  24,195                 13,284
operating activities
INVESTING ACTIVITIES:
Purchases of property and         (1,883)                (3,139)
equipment
Payments for intangible assets    (1,787)                (772)
 Net cash used in          (3,670)                (3,911)
investing activities
FINANCING ACTIVITIES:
Payments on capital leases        (76)                   (119)
Income tax benefit from exercise  814                    1,135
of stock options
Proceeds from issuance of stock,  3,267                  6,107
net
 Net cash provided by      4,005                  7,123
financing activities
EFFECT OF EXCHANGE RATE CHANGES
ON CASH AND CASH                  (858)                  (531)
EQUIVALENTS
INCREASE IN CASH AND CASH        23,672                 15,965
EQUIVALENTS
CASH AND CASH EQUIVALENTS,        93,233                 64,540
BEGINNING OF PERIOD
CASH AND CASH EQUIVALENTS, END    $            $          
OF PERIOD                          116,905                80,505



FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
                      Three Months Ended             Nine Months Ended
(in thousands)        September 28,      September    September    September
                      2013               29, 2012     28, 2013     29, 2012
                      $          $       $       $     
Net income               5,042                           
                                         3,673        13,247       15,157
Currency translation  3,558              1,303        597          (385)
adjustments
Comprehensive         $          $       $       $     
income                   8,600                           
                                         4,976        13,844       14,772



SOURCE FARO Technologies, Inc.

Website: http://www.faro.com
Contact: Keith Bair, Senior Vice President and CFO, keith.bair@FARO.com,
407-333-9911
 
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