Cohen, Milstein, Hausfeld & Toll, P.L.L.C. Announces Class Action Lawsuit on Behalf of Investors of Faro Technologies

The law firm of Cohen, Milstein, Hausfeld & Toll,
P.L.L.C. has filed a lawsuit on behalf of its client and on behalf of
purchasers of the securities of Faro Technologies, Inc. (Nasdaq:FARO)
("Faro" or the "Company") between May 6, 2004, and November 3, 2005,
inclusive (the "Class Period"), in the United States District Court
for the Middle District of Florida. The Complaint charges Faro and
certain executive officers of Faro with violations of federal
securities laws.
   FARO and its subsidiaries develop, manufacture, market and support
software-based three-dimensional measurement devices for
manufacturing, industrial, building construction and forensic
applications. The complaint charges FARO and Simon Raab (Chief
Executive Officer and Chairman), Gregory A. Fraser (Executive Vice
President, Secretary, Treasurer and a director), and Barbara R. Smith
(Chief Financial Officer) with violations of the Securities Exchange
Act of 1934, and alleges that throughout the Class Period, these
defendants directly participated in accounting fraud which materially
misrepresented the Company's financial results in violation of
Generally Accepted Accounting Principles ("GAAP").
   More specifically, the Complaint alleges that at or about the
beginning of the Class Period, the defendants represented that the
Company had implemented practices that purportedly increased the
Company's production capacity by, among other improvements,
eliminating overproduction, wait time, inefficient processes, and
product defects. During the Class Period, defendants issued strong
results and positive guidance which they attributed in material part
to the Company's purported implementation of adequate controls and
more efficient practices. The Complaint alleges that defendants' Class
Period representations regarding the Company's financial performance
and prospects were materially false and misleading when made because
the Company's internal inventory and accounting controls and
procedures were wholly defective and inadequate during the Class
Period.
   The truth began to emerge on July 18, 2005. On that day, the
Company issued a press release revealing that it had a backlog of
unfilled customer orders that had grown significantly in the second
quarter of 2005 and that, as a result, the Company significantly
lowered its earnings guidance for that quarter. Further, on November
3, 2005, after the market closed, the Company announced that it had
incurred $1.6 million in "inventory costing and consumption variances"
related to the implementation of a new accounting and inventory
management system. Defendant Simon Raab later admitted that the
Company had not been able to keep up with customer orders which
resulted in "substantially more complex inventory management
situations, and ... substantial inventory increases." In reaction to
this news, the price of FARO stock plummeted $4.39, or 19.6%, from its
closing price of $22.38 on November 3, 2005, to finally close on
November 4, 2005, at $17.99, on unusually heavy trading volume.
   The Complaint also alleges that during the Class Period, before
the truth was revealed to investors, defendants sold or caused to be
sold more than 1.48 million of their own shares of Faro stock, for net
proceeds of approximately $40.9 million, including through the use of
highly complicated forward sales transactions that allowed defendants
to both realize immediate profits and avoid current tax liabilities.
   If you purchased or acquired Faro stock during the Class Period,
you may, no later than February 6, 2006, move the court to be
appointed as Lead Plaintiff. There are certain legal requirements to
serve as Lead Plaintiff.
   Any member of the purported class may move the court to serve as
Lead Plaintiff through counsel of their choice or may choose to remain
an absent class member. Your ability to share in any recovery is not,
however, affected by the decision whether or not to serve as Lead
Plaintiff. To be a member of the class, you need not take any action
at this time.
   Cohen, Milstein, Hausfeld & Toll, P.L.L.C. has significant
experience in prosecuting investor class actions and actions involving
securities fraud. The firm has offices in Washington, D.C., New York
and Chicago, and is active in major litigation pending in federal and
state courts throughout the nation. You may visit the firm's website
at www.cmht.com.
   The firm's reputation for excellence has been recognized on
repeated occasions by courts which have appointed the firm to lead
positions in complex multi-district or consolidated litigation. Cohen,
Milstein, Hausfeld & Toll, P.L.L.C. has taken a lead role in numerous
important cases on behalf of defrauded investors, and has been
responsible for a number of outstanding recoveries which, in the
aggregate, total in the billions of dollars.
   If you have any questions about this notice or the action, or with
regard to your rights, please contact either of the following:
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Cohen, Milstein, Hausfeld & Toll, P.L.L.C.
Steven J. Toll, Esq.
Audrey Braccio
1100 New York Avenue, N.W.
West Tower - Suite 500
Washington, D.C. 20005
Telephone: [phone] or 202-408-4600
E-mail: [e-mail] or [e-mail]
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