FARO Announces Third Quarter Financial Results

Management believes that these non-GAAP financial measures provide investors with relevant period-to-period comparisons of our core operations using the same methodology that management employs in its review of the Company's operating results. These financial measures are not recognized terms under GAAP and should not be considered in isolation or as a substitute for a measure of financial performance prepared in accordance with GAAP. These non-GAAP financial measures have limitations that should be considered before using these measures to evaluate a company's financial performance. These non-GAAP financial measures, as presented, may not be comparable to similarly titled measures of other companies due to varying methods of calculation. The financial statement tables that accompany this press release include a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
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 and customer acceptance of FARO's products, FARO's strategic and restructuring plans and initiatives, including but not limited to the additional restructuring charges expected to be incurred in connection with FARO's restructuring plan and the timing and amount of cost savings and other benefits expected to be realized from the restructuring plan and go-to-market strategy, FARO's ability to achieve strategic objectives and other benefits expected to be realized from the Company's acquisition of the ATS business, and FARO's growth and profitability potential. 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 "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" or words of similar meaning 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:

  • the Company's inability to realize the intended benefits of its undertaking to transition to a company that is reorganized around functions to improve the efficiency of its sales organization and to improve operational effectiveness;
  • the Company's inability to successfully execute its new strategic plan and restructuring plan, including but not limited to additional impairment charges and/or higher than expected severance costs and exit costs, and its inability to realize the expected benefits of such plans;
  • the Company's inability to realize the intended benefits of the technology, products, operations, contracts and personnel of the ATS business;
  • the outcome of the U.S. Government's review of, or investigation into, the GSA Matter; any resulting penalties, damages, or sanctions imposed on the Company and the outcome of any resulting litigation to which the Company may become a party; loss of future government sales; and potential impacts on customer and supplier relationships and the Company's reputation;
  • 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;
  • the effect of the COVID-19 pandemic, including on our business operations, as well as its impact on general economic and financial market conditions;
  • the impact of fluctuations in foreign exchange rates; and
  • other 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, 2019 and in Part II, Item 1A. Risk Factors in the Company's Quarterly Report on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020 and September 30, 2020.

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.

FARO TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)



Three Months Ended


Nine Months Ended

(in thousands, except share and per share data)

September 30,
2020


September 30, 2
019


September 30,
2020


September 30,
2019

Sales








Product

$

48,082



$

66,788



$

146,866



$

209,411


Service

22,654



23,728



63,949



68,213


Total sales

70,736



90,516



210,815



277,624


Cost of Sales








Product

22,413



27,086



66,812



85,542


Service

12,025



12,658



34,936



37,551


Total cost of sales

34,438



39,744



101,748



123,093


Gross Profit

36,298



50,772



109,067



154,531


Operating Expenses








Selling, general and administrative

30,163



45,880



96,523



131,909


Research and development

10,754



10,783



31,355



33,048


Restructuring costs

239





14,563




Total operating expenses

41,156



56,663



142,441



164,957


Loss from operations

(4,858)



(5,891)



(33,374)



(10,426)


Other (income) expense








Interest expense (income), net

161



(24)



407



72


Other (income) expense, net

(256)



514



334



2398


Loss before income tax benefit

(4,763)



(6,381)



(34,115)



(12,896)


Income tax benefit

(1,739)



(182)



(7,336)



(444)


Net loss

$

(3,024)



$

(6,199)



$

(26,779)



$

(12,452)


Net loss per share - Basic

$

(0.17)



$

(0.36)



$

(1.51)



$

(0.72)


Net loss per share - Diluted

$

(0.17)



$

(0.36)



$

(1.51)



$

(0.72)


Weighted average shares - Basic

17,797,390



17,367,228



17,757,359



17,352,386


Weighted average shares - Diluted

17,797,390



17,367,228



17,757,359



17,352,386



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