LAKE MARY, Fla., Oct. 28, 2014 — FARO Technologies, Inc. today announced results for the third quarter ended September 27, 2014. Sales in the third quarter of 2014 increased 20.6% to $82.2 million from $68.2 million in the third quarter of 2013. Net income increased $6.2 million, or 122.6%, to $11.2 million, or $0.64 per share, in the third quarter of 2014 from $5.0 million, or $0.29 per share, in the third quarter of 2013. In the three months ended September 27, 2014, the Company recorded a discrete tax benefit of $4.5 million due to the reversal of a valuation allowance originally established against certain net operating losses. Excluding the tax benefit, Q3 Net Income would have been $6.7 million or $0.38 per share, up 31.0% from the third quarter of 2013.
New order bookings for the third quarter of 2014 increased $13.7 million, or 21.8%, to $77.0 million from $63.3 million in the third quarter of 2013.
Gross profit increased $7.2 million, or 18.6%, to $46.0 million from $38.8 million in the prior year quarter primarily driven by higher sales volume in laser scanners and arms. Gross margin of 56.0% decreased 90 basis points from the third quarter of 2013 primarily driven by a less favorable sales mix with the strong growth of laser scanner sales and reduced service margin.
Operating margin decreased slightly to 10.9% in the third quarter of 2014 from 11.1% in the third quarter of 2013 primarily due to the lower gross margin and higher investment in R&D. In the third quarter of 2014, R&D spending increased $1.5 million, or 24.9%, to$7.4 million from $5.9 million in the third quarter of 2013.
“FARO performed very well in the third quarter. We produced strong top line growth with solid margins and operating earnings, while continuing to invest in new product development, expansion of our sales organization and IT systems infrastructure. Our sales growth was driven by continued strength in laser scanning and meaningful growth in the arm product line with the release of the new laser line probe. In this quarter, we also acquired The CAD Zone, which we expect will accelerate our penetration in the law enforcement forensic technologies market – keeping in mind the market is still in the early stages of development,” stated Jay Freeland, FARO’s President and CEO. “We expect our revenue for 2014 will be consistent with our targeted longer term organic growth model of mid-teens annual revenue growth. In total, the third quarter was very strong for the Company.”
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 FARO’s growth, demand for and customer acceptance of FARO’s products, anticipated improvement in the markets in which FARO operates, and FARO’s product development and product launches. 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 “is”, “future,” “will,” 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:
- development by others of new or improved products, processes or technologies that make the Company’s products less competitive or obsolete;
- the Company’s inability to maintain its technological advantage by developing new products and enhancing its existing products;
- declines 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 financial conditions; and
- other risks detailed in Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year endedDecember 31, 2013 and Part II, Item 1A. Risk Factors in the Company’s Quarterly Report on Form 10-Q for the quarter endedJune 28, 2014.
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 other offices in the United States, Canada, Mexico, Brazil, Germany, the United Kingdom,France, Spain, Italy, Poland, Turkey, the Netherlands, Switzerland, Portugal, India, China, Malaysia, Vietnam, Thailand, South Korea, and Japan.
