LAKE MARY, Fla., Feb. 25, 2015 /PRNewswire/ -- FARO
Technologies, Inc. (NASDAQ: FARO) today announced results for the
fourth quarter and fiscal year ended December 31, 2014. Sales in the fourth
quarter of 2014 increased 15.9% to $104.2
million from $89.9 million in
the fourth quarter of 2013. Net income increased $2.8 million, or 34.6%, to $11.1 million, or $0.64 per share, in the fourth quarter of 2014
from $8.3 million, or $0.48 per share, in the fourth quarter of
2013.
Fiscal 2014 sales increased 17.2% to $341.8 million compared with the preceding
year. Net income for fiscal 2014 increased 56.4% to
$33.6 million or $1.93 per share, as compared with $21.5 million or $1.25 per share in fiscal 2013. Excluding a
discrete tax benefit of $4.5 million
recorded in the third quarter of 2014, net income for fiscal 2014
would have been $29.1 million or
$1.67 per share, up 35.4% from fiscal
2013.
New order bookings for the fourth quarter of 2014 increased
$10.6 million, or 10.7%, to
$109.2 million from $98.6 million in the fourth quarter of 2013
representing a 1.05 book to bill ratio for the quarter.
Gross profit in the fourth quarter increased $8.0 million, or 16.1%, to $57.3 million from $49.3
million in the prior year quarter primarily driven by strong
sales volume in Arms due to the release of the Company's new Laser
Line Probe HD. Gross margin of 55.0% increased 10 basis
points from the fourth quarter of 2013 primarily driven by a
favorable sales mix with the strong sales volume of Arms combined
with an increase in average selling price of Arms.
Operating margin decreased slightly to 12.5% in the fourth
quarter of 2014 from 12.6% in the fourth quarter of 2013 mainly due
to the Company's commitment to increasing its investment in
developing new disruptive products and executing infrastructure
growth projects. In fiscal year 2014, operating margin
increased by 60 basis points to 10.9%.
"Market demand remained strong in the fourth quarter, driving
16% sales growth. We demonstrated market leadership,
with the new FARO Laser Line Probe HD and the FARO Laser Scanner
performing particularly well. In total, 2014 was a good year
for the Company. We achieved mid-teens top line growth,
increased our operating margin, executed on several planned
infrastructure projects, and completed the acquisition of The CAD
Zone," stated Jay Freeland, FARO's
President and CEO. "We entered 2015 by launching a brand new
product for the Company, the FARO Freestyle, an innovative,
hand-held 3D Laser Scanner. We also announced the acquisition
of ARAS 360, a leader in accident and crime scene reconstruction
software. In the year ahead, we will continue driving towards
our longer term model of mid-teens organic growth, accelerating
product innovation, and capitalizing on market opportunities to
expand our offerings."
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:
- the Company's inability to successfully identify and acquire
target companies or achieve expected benefits from acquisitions
that are consummated;
- 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 ended
December 31, 2013 and Part II, Item
A. Risk Factors in the Company's Quarterly Report on Form 10-Q for
the quarter ended June 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.
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.
More information is available at http://www.faro.com
Financial tables to follow:
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except
share and per share data)
|
|
December
31,
2014
|
|
December
31,
2013
|
|
December
31,
2014
|
|
December
31,
2013
|
SALES
|
|
|
|
|
|
|
|
|
Product
|
|
$
89,362
|
|
$
76,171
|
|
$
284,147
|
|
$
238,841
|
Service
|
|
14,791
|
|
13,724
|
|
57,679
|
|
52,943
|
Total
sales
|
|
104,153
|
|
89,895
|
|
341,826
|
|
291,784
|
COST OF
SALES
|
|
|
|
|
|
|
|
|
Product
|
|
36,809
|
|
31,998
|
|
114,994
|
|
97,630
|
Service
|
|
10,071
|
|
8,576
|
|
37,918
|
|
32,261
|
Total cost of sales
(exclusive of depreciation and amortization, shown separately
below)
|
|
46,880
|
|
40,574
|
|
152,912
|
|
129,891
|
GROSS
PROFIT
|
|
57,273
|
|
49,321
|
|
188,914
|
|
161,893
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
Selling and
marketing
|
|
23,950
|
|
21,957
|
|
80,157
|
|
71,689
|
General and
administrative
|
|
10,367
|
|
7,984
|
|
36,479
|
|
30,600
|
Depreciation and
amortization
|
|
1,908
|
|
1,770
|
|
7,428
|
|
7,038
|
Research and
development
|
|
8,070
|
|
6,241
|
|
27,510
|
|
22,412
|
Total operating
expenses
|
|
44,295
|
|
37,952
|
|
151,574
|
|
131,739
|
INCOME FROM
OPERATIONS
|
|
12,978
|
|
11,369
|
|
37,340
|
|
30,154
|
OTHER (INCOME)
EXPENSE
|
|
|
|
|
|
|
|
|
Interest
income
|
|
(29)
|
|
(20)
|
|
(96)
|
|
(74)
|
Other (income)
expense, net
|
|
(16)
|
|
(71)
|
|
(94)
|
|
1,357
|
Interest
expense
|
|
2
|
|
6
|
|
8
|
|
9
|
INCOME BEFORE INCOME
TAX EXPENSE
|
|
13,021
|
|
11,454
|
|
37,522
|
|
28,862
|
INCOME TAX
EXPENSE
|
|
1,899
|
|
3,192
|
|
3,873
|
|
7,353
|
NET
INCOME
|
|
$
11,122
|
|
$
8,262
|
|
$
33,649
|
|
$
21,509
|
NET INCOME PER SHARE
- BASIC
|
|
$
0.64
|
|
$
0.48
|
|
$
1.95
|
|
$
1.26
|
|
|
|
|
|
|
|
|
|
NET INCOME PER SHARE
- DILUTED
|
|
$
0.64
|
|
$
0.48
|
|
$
1.93
|
|
$
1.25
|
|
|
|
|
|
|
|
|
|
Weighted average
shares - Basic
|
|
17,288,507
|
|
17,141,851
|
|
17,247,727
|
|
17,087,104
|
|
|
|
|
|
|
|
|
|
Weighted average
shares - Diluted
|
|
17,467,066
|
|
17,299,227
|
|
17,416,453
|
|
17,241,115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
|
CONSOLIDATED BALANCE
SHEETS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
(in thousands, except
share data)
|
|
2014
|
|
2013
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$ 109,289
|
|
$ 124,630
|
Short-term
investments
|
|
64,995
|
|
64,994
|
Accounts receivable,
net
|
|
83,959
|
|
66,309
|
Inventories,
net
|
|
59,334
|
|
48,940
|
Deferred income
taxes, net
|
|
5,936
|
|
4,601
|
Prepaid expenses and
other current assets
|
|
17,021
|
|
14,645
|
Total current
assets
|
|
340,534
|
|
324,119
|
Property and
equipment:
|
|
|
|
|
Machinery and
equipment
|
|
45,254
|
|
36,924
|
Furniture and
fixtures
|
|
6,156
|
|
6,888
|
Leasehold
improvements
|
|
19,676
|
|
11,765
|
Property and equipment at cost
|
|
71,086
|
|
55,577
|
Less: accumulated
depreciation and amortization
|
|
(41,741)
|
|
(39,126)
|
Property and equipment, net
|
|
29,345
|
|
16,451
|
Goodwill
|
|
19,205
|
|
19,358
|
Intangible assets,
net
|
|
9,109
|
|
8,112
|
Service
inventory
|
|
20,646
|
|
19,033
|
Deferred income
taxes, net
|
|
6,624
|
|
4,423
|
Total
assets
|
|
$ 425,463
|
|
$ 391,496
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$ 15,437
|
|
$ 14,881
|
Accrued
liabilities
|
|
26,127
|
|
20,141
|
Income taxes
payable
|
|
-
|
|
1,690
|
Current portion of
unearned service revenues
|
|
23,572
|
|
21,331
|
Customer
deposits
|
|
2,046
|
|
2,910
|
Total current
liabilities
|
|
67,182
|
|
60,953
|
Unearned service
revenues - less current portion
|
|
13,799
|
|
13,414
|
Deferred income tax
liability
|
|
-
|
|
1,171
|
Other long-term
liabilities
|
|
628
|
|
8
|
Total
liabilities
|
|
81,609
|
|
75,546
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Preferred stock - par
value $0.01, 10,000,000 shares authorized; none issued
|
|
-
|
|
-
|
Common stock - par
value $.001, 50,000,000 shares authorized; 17,997,665 and
17,868,372 issued; 17,317,430 and 17,188,137 outstanding,
respectively
|
|
18
|
|
18
|
Additional paid-in
capital
|
|
200,090
|
|
191,874
|
Retained
earnings
|
|
159,516
|
|
125,867
|
Accumulated other
comprehensive (loss) income
|
|
(6,695)
|
|
7,266
|
Common stock in
treasury, at cost - 680,235 shares
|
|
(9,075)
|
|
(9,075)
|
Total shareholders'
equity
|
|
343,854
|
|
315,950
|
Total liabilities and
shareholders' equity
|
|
$ 425,463
|
|
$ 391,496
|
|
|
|
|
|
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December
31,
|
|
|
|
|
|
|
|
(in
thousands)
|
|
2014
|
|
2013
|
|
2012
|
CASH FLOWS
FROM:
|
|
|
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
|
|
|
Net
income
|
|
$
33,649
|
|
$
21,509
|
|
$
22,998
|
Adjustments to
reconcile net income to net cash provided by
|
|
|
|
|
|
|
operating activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
7,428
|
|
7,038
|
|
6,976
|
Compensation for
stock options and restricted stock units
|
|
4,678
|
|
4,367
|
|
4,018
|
(Net recovery of)
provision for bad debts
|
|
(306)
|
|
1,001
|
|
(23)
|
Write-down of
inventories
|
|
3,272
|
|
1,167
|
|
1,978
|
Deferred income tax
(benefit) expense
|
|
(4,707)
|
|
645
|
|
(2,016)
|
Income tax benefit
from exercise of stock options
|
|
(169)
|
|
(969)
|
|
(1,135)
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
Decrease (increase)
in:
|
|
|
|
|
|
|
Accounts
receivable
|
|
(24,587)
|
|
(4,053)
|
|
(4,840)
|
Inventories
|
|
(21,995)
|
|
(1,286)
|
|
(2,822)
|
Prepaid expenses and
other current assets
|
|
(3,501)
|
|
(3,346)
|
|
(1,870)
|
(Decrease) increase
in:
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
8,867
|
|
6,108
|
|
(3,079)
|
Income taxes
payable
|
|
(1,560)
|
|
(2,028)
|
|
3,497
|
Customer
deposits
|
|
(724)
|
|
353
|
|
(1,374)
|
Unearned service
revenues
|
|
5,313
|
|
3,772
|
|
5,565
|
Net cash
provided by operating activities
|
|
5,658
|
|
34,278
|
|
27,873
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(18,722)
|
|
(4,350)
|
|
(3,843)
|
Payments for
intangible assets
|
|
(1,221)
|
|
(2,204)
|
|
(1,361)
|
Purchase of business
acquired
|
|
(1,150)
|
|
-
|
|
-
|
Net cash
used in investing activities
|
|
(21,093)
|
|
(6,554)
|
|
(5,204)
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
Payments on capital
leases
|
|
(8)
|
|
(93)
|
|
(132)
|
Income tax benefit
from exercise of stock options
|
|
169
|
|
969
|
|
1,135
|
Proceeds from
issuance of stock, net
|
|
3,369
|
|
5,444
|
|
6,162
|
Net cash
provided by financing activities
|
|
3,530
|
|
6,320
|
|
7,165
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
|
(3,436)
|
|
(2,647)
|
|
(1,141)
|
|
|
|
|
|
|
|
(DECREASE) INCREASE
IN CASH AND CASH EQUIVALENTS
|
|
(15,341)
|
|
31,397
|
|
28,693
|
|
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS, BEGINNING OF YEAR
|
|
124,630
|
|
93,233
|
|
64,540
|
|
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS, END OF YEAR
|
|
$
109,289
|
|
$
124,630
|
|
$
93,233
|
|
|
|
|
|
|
|
FARO TECHNOLOGIES,
INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
Years ended December
31,
|
(in
thousands)
|
|
2014
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
33,649
|
|
$
21,509
|
|
$
22,998
|
Currency translation
adjustments, net of tax
|
|
(13,961)
|
|
925
|
|
525
|
Comprehensive
income
|
|
$
19,688
|
|
$
22,434
|
|
$
23,523
|
|
|
|
|
|
|
|
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SOURCE FARO Technologies, Inc.