![](/cdn/assets/images/search/clock.png)
We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
FARO Technologies Inc | NASDAQ:FARO | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 17.34 | 16.22 | 19.50 | 0 | 11:22:53 |
|
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Florida
|
59-3157093
|
(State or other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
|
|
250 Technology Park, Lake Mary, Florida
|
32746
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
o
|
|
|
|
|
|
Non-accelerated filer
|
o
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
o
|
Emerging growth company
|
o
|
|
|
|
|
|
|
PAGE
|
PART I.
|
|
|
|
|
|
Item 1.
|
|
|
|
|
|
a)
|
||
|
|
|
b)
|
||
|
|
|
c)
|
||
|
|
|
d)
|
||
|
|
|
e)
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
PART II.
|
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 6.
|
||
|
|
|
(in thousands, except share data)
|
September 30,
2017 (unaudited) |
|
December 31,
2016 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
129,841
|
|
|
$
|
106,169
|
|
Short-term investments
|
10,970
|
|
|
42,942
|
|
||
Accounts receivable, net
|
60,449
|
|
|
61,364
|
|
||
Inventories, net
|
59,044
|
|
|
51,886
|
|
||
Prepaid expenses and other current assets
|
20,919
|
|
|
16,304
|
|
||
Total current assets
|
281,223
|
|
|
278,665
|
|
||
Property and equipment:
|
|
|
|
||||
Machinery and equipment
|
66,049
|
|
|
57,063
|
|
||
Furniture and fixtures
|
6,863
|
|
|
6,099
|
|
||
Leasehold improvements
|
19,588
|
|
|
18,778
|
|
||
Property and equipment, at cost
|
92,500
|
|
|
81,940
|
|
||
Less: accumulated depreciation and amortization
|
(60,189
|
)
|
|
(50,262
|
)
|
||
Property and equipment, net
|
32,311
|
|
|
31,678
|
|
||
Goodwill
|
52,567
|
|
|
46,744
|
|
||
Intangible assets, net
|
22,983
|
|
|
22,279
|
|
||
Service and sales demonstration inventory, net
|
35,250
|
|
|
29,136
|
|
||
Deferred income tax assets, net
|
14,498
|
|
|
14,307
|
|
||
Other long-term assets
|
1,049
|
|
|
905
|
|
||
Total assets
|
$
|
439,881
|
|
|
$
|
423,714
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
11,964
|
|
|
$
|
11,126
|
|
Accrued liabilities
|
22,507
|
|
|
24,572
|
|
||
Income taxes payable
|
—
|
|
|
618
|
|
||
Current portion of unearned service revenues
|
29,080
|
|
|
27,422
|
|
||
Customer deposits
|
3,065
|
|
|
2,872
|
|
||
Total current liabilities
|
66,616
|
|
|
66,610
|
|
||
Unearned service revenues - less current portion
|
12,665
|
|
|
13,813
|
|
||
Deferred income tax liabilities
|
1,683
|
|
|
1,409
|
|
||
Other long-term liabilities
|
2,191
|
|
|
2,225
|
|
||
Total liabilities
|
83,155
|
|
|
84,057
|
|
||
Commitments and contingencies - See Note 16
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Common stock - par value $.001, 50,000,000 shares authorized; 18,197,628 and 18,170,267 issued, respectively; 16,711,152 and 16,680,791 outstanding, respectively
|
18
|
|
|
18
|
|
||
Additional paid-in capital
|
218,242
|
|
|
212,602
|
|
||
Retained earnings
|
179,682
|
|
|
183,436
|
|
||
Accumulated other comprehensive loss
|
(9,387
|
)
|
|
(24,561
|
)
|
||
Common stock in treasury, at cost; 1,486,476 and 1,489,476 shares, respectively
|
(31,829
|
)
|
|
(31,838
|
)
|
||
Total shareholders’ equity
|
356,726
|
|
|
339,657
|
|
||
Total liabilities and shareholders’ equity
|
$
|
439,881
|
|
|
$
|
423,714
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in thousands, except share and per share data)
|
September 30, 2017
|
|
September 30, 2016
|
|
September 30, 2017
|
|
September 30, 2016
|
||||||||
Sales
|
|
|
|
|
|
|
|
||||||||
Product
|
$
|
68,563
|
|
|
$
|
61,280
|
|
|
$
|
193,476
|
|
|
$
|
182,232
|
|
Service
|
21,687
|
|
|
18,320
|
|
|
61,018
|
|
|
51,654
|
|
||||
Total sales
|
90,250
|
|
|
79,600
|
|
|
254,494
|
|
|
233,886
|
|
||||
Cost of Sales
|
|
|
|
|
|
|
|
||||||||
Product
|
26,673
|
|
|
25,880
|
|
|
78,186
|
|
|
74,938
|
|
||||
Service
|
11,543
|
|
|
11,042
|
|
|
33,765
|
|
|
29,665
|
|
||||
Total cost of sales (exclusive of depreciation and amortization, shown separately below)
|
38,216
|
|
|
36,922
|
|
|
111,951
|
|
|
104,603
|
|
||||
Gross Profit
|
52,034
|
|
|
42,678
|
|
|
142,543
|
|
|
129,283
|
|
||||
Operating Expenses:
|
|
|
|
|
|
|
|
||||||||
Selling and marketing
|
25,990
|
|
|
19,781
|
|
|
74,884
|
|
|
56,399
|
|
||||
General and administrative
|
10,307
|
|
|
10,747
|
|
|
32,883
|
|
|
31,139
|
|
||||
Depreciation and amortization
|
4,368
|
|
|
3,381
|
|
|
12,075
|
|
|
9,733
|
|
||||
Research and development
|
9,019
|
|
|
7,928
|
|
|
26,530
|
|
|
22,344
|
|
||||
Total operating expenses
|
49,684
|
|
|
41,837
|
|
|
146,372
|
|
|
119,615
|
|
||||
Income (loss) from operations
|
2,350
|
|
|
841
|
|
|
(3,829
|
)
|
|
9,668
|
|
||||
Other (income) expense
|
|
|
|
|
|
|
|
||||||||
Interest income, net
|
(78
|
)
|
|
(21
|
)
|
|
(249
|
)
|
|
(119
|
)
|
||||
Other (income) expense, net
|
(147
|
)
|
|
(167
|
)
|
|
320
|
|
|
824
|
|
||||
Income (loss) before income tax expense (benefit)
|
2,575
|
|
|
1,029
|
|
|
(3,900
|
)
|
|
8,963
|
|
||||
Income tax expense (benefit)
|
947
|
|
|
(61
|
)
|
|
(442
|
)
|
|
1,401
|
|
||||
Net income (loss)
|
$
|
1,628
|
|
|
$
|
1,090
|
|
|
$
|
(3,458
|
)
|
|
$
|
7,562
|
|
Net income (loss) per share - Basic
|
$
|
0.10
|
|
|
$
|
0.07
|
|
|
$
|
(0.21
|
)
|
|
$
|
0.45
|
|
Net income (loss) per share - Diluted
|
$
|
0.10
|
|
|
$
|
0.07
|
|
|
$
|
(0.21
|
)
|
|
$
|
0.45
|
|
Weighted average shares - Basic
|
16,708,446
|
|
|
16,674,176
|
|
|
16,697,729
|
|
|
16,647,662
|
|
||||
Weighted average shares - Diluted
|
16,796,518
|
|
|
16,701,617
|
|
|
16,697,729
|
|
|
16,669,550
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in thousands)
|
September 30, 2017
|
|
September 30, 2016
|
|
September 30, 2017
|
|
September 30, 2016
|
||||||||
Net income (loss)
|
$
|
1,628
|
|
|
$
|
1,090
|
|
|
$
|
(3,458
|
)
|
|
$
|
7,562
|
|
Currency translation adjustments, net of income tax
|
3,875
|
|
|
1,339
|
|
|
15,174
|
|
|
6,165
|
|
||||
Comprehensive income
|
$
|
5,503
|
|
|
$
|
2,429
|
|
|
$
|
11,716
|
|
|
$
|
13,727
|
|
|
Nine Months Ended
|
||||||
(in thousands)
|
September 30, 2017
|
|
September 30, 2016
|
||||
Cash flows from:
|
|
|
|
||||
Operating activities:
|
|
|
|
||||
Net (loss) income
|
$
|
(3,458
|
)
|
|
$
|
7,562
|
|
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
12,075
|
|
|
9,733
|
|
||
Stock-based compensation
|
4,823
|
|
|
4,068
|
|
||
Provision for bad debts
|
321
|
|
|
727
|
|
||
Loss on disposal of assets
|
263
|
|
|
814
|
|
||
Provision for excess and obsolete inventory
|
1,271
|
|
|
2,937
|
|
||
Deferred income tax expense (benefit)
|
224
|
|
|
(734
|
)
|
||
Income tax benefit from exercise of stock options
|
—
|
|
|
(354
|
)
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Decrease (increase) in:
|
|
|
|
||||
Accounts receivable
|
3,701
|
|
|
12,850
|
|
||
Inventories
|
(11,450
|
)
|
|
(8,689
|
)
|
||
Prepaid expenses and other current assets
|
(3,834
|
)
|
|
(995
|
)
|
||
(Decrease) increase in:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
(2,774
|
)
|
|
1,128
|
|
||
Income taxes payable
|
(598
|
)
|
|
—
|
|
||
Customer deposits
|
(6
|
)
|
|
(1,155
|
)
|
||
Unearned service revenues
|
(1,326
|
)
|
|
559
|
|
||
Net cash (used in) provided by operating activities
|
(768
|
)
|
|
28,451
|
|
||
Investing activities:
|
|
|
|
||||
Proceeds from sale of investments
|
32,000
|
|
|
11,000
|
|
||
Purchases of property and equipment
|
(6,081
|
)
|
|
(5,272
|
)
|
||
Payments for intangible assets
|
(1,345
|
)
|
|
(1,440
|
)
|
||
Acquisition of business
|
(5,496
|
)
|
|
(20,911
|
)
|
||
Net cash provided by (used in) investing activities
|
19,078
|
|
|
(16,623
|
)
|
||
Financing activities:
|
|
|
|
||||
Payments on capital leases
|
(6
|
)
|
|
(6
|
)
|
||
Payment of contingent consideration for acquisitions
|
(521
|
)
|
|
(434
|
)
|
||
Income tax benefit from exercise of stock options
|
—
|
|
|
354
|
|
||
Proceeds from issuance of stock
|
387
|
|
|
519
|
|
||
Net cash (used in) provided by financing activities
|
(140
|
)
|
|
433
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
5,502
|
|
|
1,732
|
|
||
Increase in cash and cash equivalents
|
23,672
|
|
|
13,993
|
|
||
Cash and cash equivalents, beginning of period
|
106,169
|
|
|
107,356
|
|
||
Cash and cash equivalents, end of period
|
$
|
129,841
|
|
|
$
|
121,349
|
|
•
|
The Factory Metrology reporting segment provides solutions for manual and automated measurement and inspection in an industrial or manufacturing environment. Applications include alignment, part inspection, dimensional analysis, first article inspection, incoming and in-process inspection, machine calibration, non-contact inspection, robot calibration, tool building and set-up, and assembly guidance.
|
•
|
The Construction BIM-CIM reporting segment provides solutions for as-built data capturing and 3D visualization in building information modeling and construction information management applications, allowing our customers in the architecture, engineering and construction markets to quickly and accurately extract two-dimensional (“2D”) and 3D measurement points. Applications include as-built documentation, construction monitoring, surveying, asset and facility management, and heritage preservation.
|
•
|
The Other reporting segment includes our Product Design, Public Safety Forensics and 3D Machine Vision (formerly known as 3D Solutions) operating segments. Our Product Design operating segment provides advanced 3D solutions to assist in the engineering or design of a movable object, enabling a full digital workflow for applications that include reverse engineering and virtual simulation. Our Public Safety Forensics operating segment provides solutions to public safety officials and professionals to capture environmental or situational scenes in 2D and 3D for crime, crash and fire scene investigations and environmental safety evaluations. Our 3D Machine Vision operating segment provides solutions to customers who require customized 3D measurement and realization solutions not otherwise addressed by our off-the-shelf product offerings.
|
|
Nine Months Ended
|
||||
|
September 30,
2017 |
|
September 30,
2016 |
||
Risk-free interest rate
|
1.88% - 2.02%
|
|
|
1.06% - 1.21%
|
|
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
Expected term of option
|
5 years
|
|
|
4 years
|
|
Expected volatility
|
45.2
|
%
|
|
46.7% - 47.0%
|
|
Weighted-average expected volatility
|
45.2
|
%
|
|
46.7
|
%
|
|
Options
|
|
Weighted-
Average
Exercise Price
|
|
Weighted-Average
Remaining
Contractual Term
(Years)
|
|
Aggregate Intrinsic
Value as of September 30, 2017 |
|||||
Outstanding at January 1, 2017
|
1,090,160
|
|
|
$
|
48.02
|
|
|
|
|
|
||
Granted
|
267,039
|
|
|
34.79
|
|
|
|
|
|
|||
Forfeited or expired
|
(72,015
|
)
|
|
44.39
|
|
|
|
|
|
|||
Exercised
|
(14,520
|
)
|
|
26.68
|
|
|
|
|
|
|||
Unearned performance-based options
|
(19,362
|
)
|
|
59.97
|
|
|
|
|
|
|||
Outstanding at September 30, 2017
|
1,251,302
|
|
|
$
|
45.47
|
|
|
4.2
|
|
$
|
2,235
|
|
Options exercisable at September 30, 2017
|
963,891
|
|
|
$
|
42.82
|
|
|
3.0
|
|
$
|
612
|
|
|
Shares
|
|
Weighted-Average
Grant Date
Fair Value
|
|||
Non-vested at January 1, 2017
|
150,682
|
|
|
$
|
33.39
|
|
Granted
|
152,207
|
|
|
35.42
|
|
|
Forfeited
|
(20,844
|
)
|
|
33.84
|
|
|
Vested
|
(21,101
|
)
|
|
33.65
|
|
|
Unearned performance-based awards
|
(604
|
)
|
|
52.83
|
|
|
Non-vested at September 30, 2017
|
260,340
|
|
|
$
|
34.60
|
|
|
As of
September 30, 2017 |
|
As of
December 31, 2016 |
||||
Accounts receivable
|
$
|
62,489
|
|
|
$
|
63,193
|
|
Allowance for doubtful accounts
|
(2,040
|
)
|
|
(1,829
|
)
|
||
Total
|
$
|
60,449
|
|
|
$
|
61,364
|
|
|
As of
September 30, 2017 |
|
As of
December 31, 2016 |
||||
Raw materials
|
$
|
39,285
|
|
|
$
|
36,760
|
|
Finished goods
|
19,759
|
|
|
15,126
|
|
||
Inventories, net
|
$
|
59,044
|
|
|
$
|
51,886
|
|
|
|
|
|
||||
Service and sales demonstration inventory, net
|
$
|
35,250
|
|
|
$
|
29,136
|
|
|
Three Months Ended
|
||||||||||||
|
September 30, 2017
|
|
September 30, 2016
|
||||||||||
|
Shares
|
|
Per-Share
Amount
|
|
Shares
|
|
Per-Share
Amount
|
||||||
Basic EPS
|
16,708,446
|
|
|
$
|
0.10
|
|
|
16,674,176
|
|
|
$
|
0.07
|
|
Effect of dilutive securities
|
88,072
|
|
|
—
|
|
|
27,441
|
|
|
—
|
|
||
Diluted EPS
|
16,796,518
|
|
|
$
|
0.10
|
|
|
16,701,617
|
|
|
$
|
0.07
|
|
|
Nine months ended
|
||||||||||||
|
September 30, 2017
|
|
September 30, 2016
|
||||||||||
|
Shares
|
|
Per-Share
Amount
|
|
Shares
|
|
Per-Share
Amount
|
||||||
Basic EPS
|
16,697,729
|
|
|
$
|
(0.21
|
)
|
|
16,647,662
|
|
|
$
|
0.45
|
|
Effect of dilutive securities
|
—
|
|
|
—
|
|
|
21,888
|
|
|
—
|
|
||
Diluted EPS
|
16,697,729
|
|
|
$
|
(0.21
|
)
|
|
16,669,550
|
|
|
$
|
0.45
|
|
|
As of
September 30, 2017 |
|
As of
December 31, 2016 |
||||
Accrued compensation and benefits
|
$
|
12,347
|
|
|
$
|
13,649
|
|
Accrued warranties
|
2,584
|
|
|
2,594
|
|
||
Professional and legal fees
|
1,442
|
|
|
1,775
|
|
||
Taxes other than income
|
2,697
|
|
|
4,026
|
|
||
Other accrued liabilities
|
3,437
|
|
|
2,528
|
|
||
|
$
|
22,507
|
|
|
$
|
24,572
|
|
|
Nine Months Ended
|
||||||
|
September 30, 2017
|
|
September 30, 2016
|
||||
Balance, beginning of period
|
$
|
2,594
|
|
|
$
|
2,309
|
|
Provision for warranty expense
|
2,606
|
|
|
2,292
|
|
||
Fulfillment of warranty obligations
|
(2,616
|
)
|
|
(1,925
|
)
|
||
Balance, end of period
|
$
|
2,584
|
|
|
$
|
2,676
|
|
|
As of September 30, 2017
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
||||||
Short-term investments (1)
|
$
|
10,970
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
$
|
10,970
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
||||||
Contingent consideration (2)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,742
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,742
|
|
|
As of December 31, 2016 |
||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
||||||
Short-term investments (1)
|
$
|
42,942
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
$
|
42,942
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
||||||
Contingent consideration (2)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,100
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,100
|
|
(1)
|
Short-term investments in the accompanying consolidated balance sheets are six-month U.S. Treasury Bills. The fair values of these assets are based on Level 1 inputs in the fair value hierarchy.
|
(2)
|
Contingent consideration liability represents arrangements to pay the former owners of certain companies we acquired. The remaining undiscounted maximum payment under the arrangements is
$5.6 million
. We estimated the fair value of the contingent consideration using a Monte Carlo Simulation, which is based on significant inputs, primarily forecasted future results of the acquired businesses not observable in the market, and thus represents a Level 3 measure. During the
three and nine
months ended
September 30, 2017
, we paid
$0.5 million
as part of these arrangements. During the
three and nine
months ended
September 30, 2016
, we paid
$0.3 million
and
$0.4 million
, respectively, as part of these arrangements. The remaining change in the fair value of the contingent consideration from
December 31, 2016
to
September 30, 2017
is related to changes in foreign currency rates.
|
|
|
Factory Metrology
|
|
Construction BIM-CIM
|
|
Other
|
|
Total
|
||||||||
Three Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Total sales
|
|
$
|
59,339
|
|
|
$
|
22,751
|
|
|
$
|
8,160
|
|
|
$
|
90,250
|
|
Segment profit
|
|
$
|
20,144
|
|
|
$
|
5,407
|
|
|
$
|
493
|
|
|
$
|
26,044
|
|
General and administrative
|
|
|
|
|
|
|
|
10,307
|
|
|||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
4,368
|
|
|||||||
Research and development
|
|
|
|
|
|
|
|
9,019
|
|
|||||||
Income from operations
|
|
|
|
|
|
|
|
$
|
2,350
|
|
|
|
Factory Metrology
|
|
Construction BIM-CIM
|
|
Other
|
|
Total
|
||||||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Total sales
|
|
$
|
58,310
|
|
|
$
|
15,925
|
|
|
$
|
5,365
|
|
|
$
|
79,600
|
|
Segment profit
|
|
$
|
16,305
|
|
|
$
|
4,704
|
|
|
$
|
1,888
|
|
|
$
|
22,897
|
|
General and administrative
|
|
|
|
|
|
|
|
10,747
|
|
|||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
3,381
|
|
|||||||
Research and development
|
|
|
|
|
|
|
|
7,928
|
|
|||||||
Income from operations
|
|
|
|
|
|
|
|
$
|
841
|
|
|
|
Factory Metrology
|
|
Construction BIM-CIM
|
|
Other
|
|
Total
|
||||||||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Total sales
|
|
$
|
173,531
|
|
|
$
|
60,550
|
|
|
$
|
20,413
|
|
|
$
|
254,494
|
|
Segment profit
|
|
$
|
53,497
|
|
|
$
|
13,799
|
|
|
$
|
363
|
|
|
$
|
67,659
|
|
General and administrative
|
|
|
|
|
|
|
|
32,883
|
|
|||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
12,075
|
|
|||||||
Research and development
|
|
|
|
|
|
|
|
26,530
|
|
|||||||
Loss from operations
|
|
|
|
|
|
|
|
$
|
(3,829
|
)
|
|
|
Factory Metrology
|
|
Construction BIM-CIM
|
|
Other
|
|
Total
|
||||||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Total sales
|
|
$
|
168,418
|
|
|
$
|
47,529
|
|
|
$
|
17,939
|
|
|
$
|
233,886
|
|
Segment profit
|
|
$
|
53,034
|
|
|
$
|
12,868
|
|
|
$
|
6,982
|
|
|
$
|
72,884
|
|
General and administrative
|
|
|
|
|
|
|
|
31,139
|
|
|||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
9,733
|
|
|||||||
Research and development
|
|
|
|
|
|
|
|
22,344
|
|
|||||||
Income from operations
|
|
|
|
|
|
|
|
$
|
9,668
|
|
|
|
BuildIT
|
|
LPT
|
|
MWF
|
|
Nutfield
|
||||||||
Accounts receivable
|
|
$
|
237
|
|
|
$
|
54
|
|
|
$
|
150
|
|
|
$
|
160
|
|
Inventory
|
|
—
|
|
|
322
|
|
|
—
|
|
|
539
|
|
||||
Other assets
|
|
36
|
|
|
160
|
|
|
666
|
|
|
96
|
|
||||
Deferred income tax assets
|
|
—
|
|
|
1,112
|
|
|
—
|
|
|
—
|
|
||||
Intangible assets
|
|
1,015
|
|
|
5,474
|
|
|
1,816
|
|
|
2,329
|
|
||||
Goodwill (1)
|
|
3,393
|
|
|
11,922
|
|
|
5,364
|
|
|
2,488
|
|
||||
Accounts payable and accrued liabilities
|
|
(95
|
)
|
|
(747
|
)
|
|
(700
|
)
|
|
(12
|
)
|
||||
Other liabilities
|
|
(471
|
)
|
|
(1,086
|
)
|
|
(345
|
)
|
|
(104
|
)
|
||||
Deferred income tax liabilities
|
|
(205
|
)
|
|
—
|
|
|
(364
|
)
|
|
—
|
|
||||
Total purchase price, net of cash acquired
|
|
$
|
3,910
|
|
|
$
|
17,211
|
|
|
$
|
6,587
|
|
|
$
|
5,496
|
|
|
|
BuildIT
|
|
LPT
|
|
MWF
|
|
Nutfield
|
||||||||||||||||
|
|
Amount
|
|
Weighted Average Life (Years)
|
|
Amount
|
|
Weighted Average Life (Years)
|
|
Amount
|
|
Weighted Average Life (Years)
|
|
Amount
|
|
Weighted Average Life (Years)
|
||||||||
Trade name
|
|
$
|
346
|
|
|
7
|
|
$
|
64
|
|
|
1
|
|
$
|
36
|
|
|
1
|
|
$
|
29
|
|
|
1
|
Non-competition agreement
|
|
31
|
|
|
5
|
|
—
|
|
|
0
|
|
3
|
|
|
2
|
|
144
|
|
|
5
|
||||
Technology
|
|
361
|
|
|
7
|
|
4,260
|
|
|
7
|
|
951
|
|
|
5
|
|
1,970
|
|
|
10
|
||||
Customer relationship
|
|
277
|
|
|
7
|
|
1,150
|
|
|
7
|
|
826
|
|
|
5
|
|
95
|
|
|
10
|
||||
Favorable in-place lease
|
|
—
|
|
|
0
|
|
—
|
|
|
0
|
|
—
|
|
|
0
|
|
91
|
|
|
12
|
||||
Fair value of intangible assets acquired
|
|
$
|
1,015
|
|
|
7
|
|
$
|
5,474
|
|
|
7
|
|
$
|
1,816
|
|
|
5
|
|
$
|
2,329
|
|
|
10
|
•
|
an economic downturn in the manufacturing industry or the domestic and international economies in the regions of the world where we operate;
|
•
|
our inability to further penetrate our customer base and target markets;
|
•
|
development by others of new or improved products, processes or technologies that make our products less competitive or obsolete;
|
•
|
our inability to maintain our technological advantage by developing new products and enhancing our existing products;
|
•
|
risks associated with expanding international operations, such as fluctuations in currency exchange rates, difficulties in staffing and managing foreign operations, increased political and economic instability, compliance with potentially evolving 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;
|
•
|
our inability to successfully identify and acquire target companies and achieve expected benefits from, and effectively integrate, acquisitions that are consummated;
|
•
|
the cyclical nature of the industries of our customers and material adverse changes in our customers’ access to liquidity and capital;
|
•
|
change in the potential for the computer-aided measurement (“CAM2”) market and the potential adoption rate for our products, which are difficult to quantify and predict;
|
•
|
our inability to protect our patents and other proprietary rights in the United States and foreign countries;
|
•
|
our inability to adequately establish and maintain effective internal controls over financial reporting;
|
•
|
fluctuations in our annual and quarterly operating results and the inability to achieve our financial operating targets as a result of a number of factors including, without limitation (i) litigation and regulatory action brought against us, (ii) quality issues with our products, (iii) excess or obsolete inventory, shrinkage or other inventory losses due to product obsolescence, change in demand for our products, scrap or material price changes, (iv) raw material price fluctuations and other inflationary pressures, (v) expansion of our manufacturing capability, (vi) the size and timing of customer orders, (vii) the amount of time that it takes to fulfill orders and ship our products, (viii) the length of our sales cycle to new customers and the time and expense incurred in further penetrating our existing customer base, (ix) increases in operating expenses required for product development and new product marketing, (x) costs associated with new product introductions, such as product development, marketing, assembly line start-up costs and low introductory period production volumes, (xi) the timing and market acceptance of new products and product enhancements, (xii) customer order deferrals in anticipation of new products and product enhancements, (xiii) the inability of our sales and marketing programs to achieve their sales targets, (xiv) start-up costs associated with opening new sales offices outside of the United States, (xv) fluctuations in revenue without proportionate adjustments in fixed costs, (xvi) inefficiencies in the management of our inventories and fixed assets, (xvii) compliance with government regulations including health, safety, and environmental matters, (xviii) investment costs associated with the training and ramp-up time for new sales people, and (xix) manufacturing inefficiencies associated with new product introductions;
|
•
|
our ability to achieve profitability;
|
•
|
changes in gross margins due to a changing mix of products sold and the different gross margins on different products and sales channels;
|
•
|
our inability to successfully comply with the requirements of the Restriction of Hazardous Substances Directive and the Waste Electrical and Electronic Equipment Directive in the European Union;
|
•
|
the inability of our products to displace traditional measurement devices and attain broad market acceptance;
|
•
|
the impact of competitive products and pricing on our current offerings;
|
•
|
the loss of our Chief Executive Officer or other key personnel;
|
•
|
difficulties in recruiting research and development engineers and application engineers;
|
•
|
the failure to effectively manage the effects of our growth;
|
•
|
the impact of reductions or projected reductions in government spending, particularly in the defense sector;
|
•
|
variations in the effective income tax rate and the difficulty in predicting the tax rate on a quarterly and annual basis;
|
•
|
the loss of key suppliers and the inability to find sufficient alternative suppliers in a reasonable period of time or on commercially reasonable terms;
|
•
|
the impact of fluctuations in exchange rates;
|
•
|
the effect of estimates and assumptions with respect to critical accounting policies and the impact of the adoption of recently issued accounting pronouncements;
|
•
|
the impact of changes in technologies on the competitiveness of our products or their components;
|
•
|
the impact of new product introductions;
|
•
|
the magnitude of increased warranty costs from new product introductions and enhancements to existing products;
|
•
|
the sufficiency of our plants to meet manufacturing requirements;
|
•
|
the continuation of our share repurchase program;
|
•
|
the sufficiency of our working capital and cash flow from operations to fund our long-term liquidity requirements;
|
•
|
the impact of geographic changes in the manufacturing or sales of our products on our tax rate;
|
•
|
our ability to comply with the requirements for favorable tax rates in foreign jurisdictions; and
|
•
|
other risks and uncertainties discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended
December 31, 2016
, and in Part II, Item 1A. Risk Factors in the Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2017 and June 30, 2017.
|
•
|
reorganizing our business to align our sales, marketing, product management and research and development around specific vertical markets and to better define our end market applications;
|
•
|
modernizing our sales process to improve the efficiency of our sales organization by supplementing our current direct sales approach of conducting on-site demonstrations with multimedia, web-based demonstrations and cloud-based customer relations development;
|
•
|
accelerating and maintaining a consistent schedule of new product introductions; and
|
•
|
reorganizing all functions, processes and people to a harmonized global mindset from our historically regional business structure to improve operational efficiencies.
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||
(dollars in thousands)
|
2017
|
|
% of Sales
|
|
2016
|
|
% of Sales
|
|
2017
|
|
% of Sales
|
|
2016
|
|
% of Sales
|
||||||||||||
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product
|
$
|
68,563
|
|
|
76.0
|
%
|
|
$
|
61,280
|
|
|
77.0
|
%
|
|
$
|
193,476
|
|
|
76.0
|
%
|
|
$
|
182,232
|
|
|
77.9
|
%
|
Service
|
21,687
|
|
|
24.0
|
%
|
|
18,320
|
|
|
23.0
|
%
|
|
61,018
|
|
|
24.0
|
%
|
|
51,654
|
|
|
22.1
|
%
|
||||
Total sales
|
90,250
|
|
|
100.0
|
%
|
|
79,600
|
|
|
100.0
|
%
|
|
254,494
|
|
|
100.0
|
%
|
|
233,886
|
|
|
100.0
|
%
|
||||
Cost of Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product
|
26,673
|
|
|
29.6
|
%
|
|
25,880
|
|
|
32.5
|
%
|
|
78,186
|
|
|
30.7
|
%
|
|
74,938
|
|
|
32.0
|
%
|
||||
Service
|
11,543
|
|
|
12.8
|
%
|
|
11,042
|
|
|
13.9
|
%
|
|
33,765
|
|
|
13.3
|
%
|
|
29,665
|
|
|
12.7
|
%
|
||||
Total cost of sales
|
38,216
|
|
|
42.3
|
%
|
|
36,922
|
|
|
46.4
|
%
|
|
111,951
|
|
|
44.0
|
%
|
|
104,603
|
|
|
44.7
|
%
|
||||
Gross Profit
|
52,034
|
|
|
57.7
|
%
|
|
42,678
|
|
|
53.6
|
%
|
|
142,543
|
|
|
56.0
|
%
|
|
129,283
|
|
|
55.3
|
%
|
||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling and marketing
|
25,990
|
|
|
28.8
|
%
|
|
19,781
|
|
|
24.9
|
%
|
|
74,884
|
|
|
29.4
|
%
|
|
56,399
|
|
|
24.1
|
%
|
||||
General and administrative
|
10,307
|
|
|
11.4
|
%
|
|
10,747
|
|
|
13.5
|
%
|
|
32,883
|
|
|
12.9
|
%
|
|
31,139
|
|
|
13.3
|
%
|
||||
Depreciation and amortization
|
4,368
|
|
|
4.8
|
%
|
|
3,381
|
|
|
4.2
|
%
|
|
12,075
|
|
|
4.7
|
%
|
|
9,733
|
|
|
4.2
|
%
|
||||
Research and development
|
9,019
|
|
|
10.0
|
%
|
|
7,928
|
|
|
10.0
|
%
|
|
26,530
|
|
|
10.4
|
%
|
|
22,344
|
|
|
9.6
|
%
|
||||
Total operating expenses
|
49,684
|
|
|
55.1
|
%
|
|
41,837
|
|
|
52.6
|
%
|
|
146,372
|
|
|
57.5
|
%
|
|
119,615
|
|
|
51.1
|
%
|
||||
Income (loss) from operations
|
2,350
|
|
|
2.6
|
%
|
|
841
|
|
|
1.1
|
%
|
|
(3,829
|
)
|
|
(1.5
|
)%
|
|
9,668
|
|
|
4.1
|
%
|
||||
Other (income) expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income, net
|
(78
|
)
|
|
(0.1
|
)%
|
|
(21
|
)
|
|
—
|
%
|
|
(249
|
)
|
|
(0.1
|
)%
|
|
(119
|
)
|
|
(0.1
|
)%
|
||||
Other (income) expense, net
|
(147
|
)
|
|
(0.2
|
)%
|
|
(167
|
)
|
|
(0.2
|
)%
|
|
320
|
|
|
0.1
|
%
|
|
824
|
|
|
0.4
|
%
|
||||
Income (loss) before income tax expense (benefit)
|
2,575
|
|
|
2.9
|
%
|
|
1,029
|
|
|
1.3
|
%
|
|
(3,900
|
)
|
|
(1.5
|
)%
|
|
8,963
|
|
|
3.8
|
%
|
||||
Income tax expense (benefit)
|
947
|
|
|
1.0
|
%
|
|
(61
|
)
|
|
(0.1
|
)%
|
|
(442
|
)
|
|
(0.2
|
)%
|
|
1,401
|
|
|
0.6
|
%
|
||||
Net income (loss)
|
$
|
1,628
|
|
|
1.8
|
%
|
|
$
|
1,090
|
|
|
1.4
|
%
|
|
$
|
(3,458
|
)
|
|
(1.4
|
)%
|
|
$
|
7,562
|
|
|
3.2
|
%
|
|
Three Months Ended
|
||||||||||||
|
September 30, 2017
|
|
% of
Total
|
|
September 30, 2016
|
|
% of
Total
|
||||||
Factory Metrology
|
$
|
59,339
|
|
|
65.8
|
%
|
|
$
|
58,310
|
|
|
73.3
|
%
|
Construction BIM-CIM
|
22,751
|
|
|
25.2
|
%
|
|
15,925
|
|
|
20.0
|
%
|
||
Other
|
8,160
|
|
|
9.0
|
%
|
|
5,365
|
|
|
6.7
|
%
|
||
Total sales
|
$
|
90,250
|
|
|
|
|
$
|
79,600
|
|
|
|
Factory Metrology
|
|
|
|
|
||||
(dollars in thousands)
|
|
Three Months Ended
|
||||||
|
|
September 30, 2017
|
|
September 30, 2016
|
||||
Total sales
|
|
$
|
59,339
|
|
|
$
|
58,310
|
|
Segment profit
|
|
$
|
20,144
|
|
|
$
|
16,305
|
|
Segment profit as a % of Factory Metrology segment sales
|
|
33.9
|
%
|
|
28.0
|
%
|
Construction BIM-CIM
|
|
|
|
|
||||
(dollars in thousands)
|
|
Three Months Ended
|
||||||
|
|
September 30, 2017
|
|
September 30, 2016
|
||||
Total sales
|
|
$
|
22,751
|
|
|
$
|
15,925
|
|
Segment profit
|
|
$
|
5,407
|
|
|
$
|
4,704
|
|
Segment profit as a % of Construction BIM-CIM segment sales
|
|
23.8
|
%
|
|
29.5
|
%
|
Other
|
|
|
||||||
(dollars in thousands)
|
|
Three Months Ended
|
||||||
|
|
September 30, 2017
|
|
September 30, 2016
|
||||
Total sales
|
|
$
|
8,160
|
|
|
$
|
5,365
|
|
Segment profit
|
|
$
|
493
|
|
|
$
|
1,888
|
|
Segment profit as a % of Other segment sales
|
|
6.0
|
%
|
|
35.2
|
%
|
|
Nine Months Ended
|
||||||||||||
|
September 30, 2017
|
|
% of
Total
|
|
September 30, 2016
|
|
% of
Total
|
||||||
Factory Metrology
|
$
|
173,531
|
|
|
68.2
|
%
|
|
$
|
168,418
|
|
|
72.0
|
%
|
Construction BIM-CIM
|
60,550
|
|
|
23.8
|
%
|
|
47,529
|
|
|
20.3
|
%
|
||
Other
|
20,413
|
|
|
8.0
|
%
|
|
17,939
|
|
|
7.7
|
%
|
||
Total sales
|
$
|
254,494
|
|
|
|
|
$
|
233,886
|
|
|
|
Factory Metrology
|
|
|
|
|
||||
(dollars in thousands)
|
|
Nine Months Ended
|
||||||
|
|
September 30, 2017
|
|
September 30, 2016
|
||||
Total sales
|
|
$
|
173,531
|
|
|
$
|
168,418
|
|
Segment profit
|
|
$
|
53,497
|
|
|
$
|
53,034
|
|
Segment profit as a % of Factory Metrology segment sales
|
|
30.8
|
%
|
|
31.5
|
%
|
Construction BIM-CIM
|
|
|
|
|
||||
(dollars in thousands)
|
|
Nine Months Ended
|
||||||
|
|
September 30, 2017
|
|
September 30, 2016
|
||||
Total sales
|
|
$
|
60,550
|
|
|
$
|
47,529
|
|
Segment profit
|
|
$
|
13,799
|
|
|
$
|
12,868
|
|
Segment profit as a % of Construction BIM-CIM segment sales
|
|
22.8
|
%
|
|
27.1
|
%
|
Other
|
|
|
||||||
(dollars in thousands)
|
|
Nine Months Ended
|
||||||
|
|
September 30, 2017
|
|
September 30, 2016
|
||||
Total sales
|
|
$
|
20,413
|
|
|
$
|
17,939
|
|
Segment profit
|
|
$
|
363
|
|
|
$
|
6,982
|
|
Segment profit as a % of Other segment sales
|
|
1.8
|
%
|
|
38.9
|
%
|
|
|
|
|
|
FARO Technologies, Inc.
|
|
|
|
(Registrant)
|
|
|
|
|
Date: October 26, 2017
|
By:
|
|
/s/ Robert Seidel
|
|
|
|
Name: Robert Seidel
|
|
|
|
Title: Chief Financial Officer
|
|
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
1 Year FARO Technologies Chart |
1 Month FARO Technologies Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions