8-K/A 1 dkm146.txt AMENDMENT TO FORM 8-K DATED 01/16/02 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of the earliest event reported) JANUARY 16, 2002 ------------------ Commission File Number 0-23081 FARO TECHNOLOGIES, INC. (Exact Name of Registrant as Specified in Its Charter) Florida 59-3157093 ----------------------------- ----------------------- (State or Other Jurisdiction (IRS Employer of Incorporation) Identification No.) 125 TECHNOLOGY PARK, LAKE MARY, FLORIDA 32746 -------------------------------------------- ----------------------- (Address of Principal Executive Offices) (Zip Code) (407) 333-9911 ------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On January 31, 2002, FARO Technologies, Inc. ("FARO" or the "Company") filed a Current Report on Form 8-K relating to the FARO's acquisition on January 16, 2002 of SpatialMetriX Corporation ("SMX") pursuant to an Agreement and Plan of Merger dated September 14, 2001, as amended (the "Agreement"), acquired . In connection with the SMX acquisition, FARO agreed to issue 500,000 shares of FARO common stock to SMX shareholders and certain SMX employees and satisfied certain obligations of SMX. Specifically, the Company issued an additional 350,000 shares of FARO common stock and paid approximately $2.0 million in cash to fully satisfy SMX's obligations to its two lenders. The Company also paid approximately $700,000 in cash to satisfy other obligations of SMX.The total consideration, given the $2.25 per share price of FARO common stock on January 16, 2002, was approximately $4.6 million. The transaction will be recorded utilizing the purchasing method of accounting. SMX Corp. is a leading manufacturer and supplier of laser trackers and targets, metrology software, and contract inspection services. In April 2001, the Company provided $1.5 million in financing to SMX by entering into a Participation Agreement with SMX's bank pursuant to which the Company funded and simultaneously acquired a $1.5 million interest in SMX's then outstanding $3.8 million bank line of credit. In October 2001, the Company and SMX entered into an additional agreement pursuant to which the Company would provide to SMX up to an additional $1.5 million in financing. The Company and SMX's bank amended the Participation Agreement so that such additional financing to SMX also would be made through participation in SMX's bank line of credit. Consequently, SMX's bank line of credit could increase to a maximum of $5.3 million, of which FARO would own up to $3.0 million. Prior to closing, the Company had provided $2.9 million of aggregate financing to SMX pursuant to the Participation Agreement. There were no other material relationships between FARO and SMX prior to the Agreement. None of the directors or the executive officers of SMX owned shares of FARO common stock prior to the Agreement. In addition, none of the directors or the executive officers of the Company owned shares of stock of SMX as of the date of the Agreement. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial statements of business acquired: Included as Exhibit 99.2, are the audited financial statements of SpatialMetriX Corporation for each of the two years in the period ended December 31, 2001. (b) Pro forma financial information: The operating results of SMX will be included in the Registrant's consolidated financial statements effective at the date of acquisition. The following pro forma financial data is presented for informational purposes assuming that the Company had acquired SMX as of January 1, 2001. The pro forma selected financial data has been prepared for comparative purposes only and does not purport to be 2 FARO TECHNOLOGIES, INC. AND SUBSIDIARIES PRO FORMA CONDENSED BALANCE SHEETS
December 31, ---------------------------------- 2001 2000 -------------- ------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 6,238,564 $ 4,154,318 Short term investments 3,115,101 4,205,995 Accounts receivable, net 11,556,568 12,523,972 Income taxes refundable 545,118 - Inventories, net 6,862,793 7,651,290 Prepaid expenses and other current assets 1,497,820 1,142,881 Deferred income taxes 76,418 203,816 -------------- ------------- Total current assets 29,892,382 29,882,272 -------------- ------------- PROPERTY AND EQUIPMENT - at cost: Machinery and equipment 4,238,582 3,780,892 Furniture and fixtures 1,413,809 1,353,248 Leasehold improvements 139,555 89,171 -------------- ------------- Total 5,791,946 5,223,311 Less accumulated depreciation and amortization (3,945,247) (3,121,029) -------------- ------------- Property and equipment, net 1,846,699 2,102,282 -------------- ------------- INTANGIBLE ASSETS - net 7,844,586 10,942,305 INVESTMENTS 2,129,679 4,755,572 NOTES RECEIVABLE 1,052,932 1,128,846 DEFERRED INCOME TAXES - 675,324 -------------- ------------- TOTAL ASSETS $ 42,766,278 $ 49,486,601 ============== ============= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 25,120 $ 17,397 Accounts payable 5,381,271 5,409,417 Accrued liabilities 3,803,463 4,859,404 Income taxes payable 100,000 784,409 Current portion of unearned service revenues 2,207,120 2,039,566 Customer deposits 231,845 133,984 -------------- ------------- Total current liabilities 11,748,819 13,244,177 OTHER LONG-TERM LIABILITIES 203,844 134,644 -------------- ------------- Total liabilities 11,952,663 13,378,821 -------------- ------------- SHAREHOLDERS' EQUITY: Class A preferred stock - par value $.001, 10,000,000 shares authorized, no shares issued and outstanding Common stock - par value $.001, 50,000,000 shares authorized, 11,925,252 and 11,915,225 issued; 11,885,252 and 11,875,225 outstanding, respectively 11,925 11,916 Additional paid-in capital 49,530,737 49,396,709 Unearned compensation (109,000) - Accumulated deficit (15,466,444) (10,943,307) Other comprehenvive loss (3,002,978) (2,206,913) Common stock in treasury, at cost - 40,000 shares in 2001 and 2000 (150,625) (150,625) -------------- ------------- Total shareholders' equity 30,813,615 36,107,780 -------------- ------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 42,766,278 $ 49,486,601 ============== =============
3 FARO TECHNOLOGIES, INC. AND SUBSIDIARIES PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
Years Ended December 31 ---------------------------------------- 2001 2000 ---------------------------------------- SALES $ 46,471,645 $ 54,397,344 COST OF SALES 22,800,608 22,440,189 ----------------- ----------------- Gross profit 23,671,037 31,957,155 OPERATING EXPENSES Selling 16,573,666 16,951,783 General and administrative 7,288,049 6,329,452 Depreciation and amortization 4,346,861 4,788,084 Research and development 5,682,301 5,112,995 Employee stock options - 123,404 ----------------- ----------------- Total operating expenses 33,890,877 33,305,718 ----------------- ----------------- LOSS FROM OPERATIONS (10,219,840) (1,348,563) OTHER INCOME (EXPENSES) Interest income 900,281 871,009 Other income, net 964,950 302,378 Interest expense (19,899) (1,334) ----------------- ----------------- INCOME (LOSS) BEFORE INCOME TAXES (8,374,508) (176,510) INCOME TAX EXPENSE (BENEFIT) 341,738 759,841 ----------------- ----------------- NET INCOME (LOSS) $ (8,716,246) $ (936,351) ================= ================= NET LOSS PER SHARE - BASIC ($0.73) ($0.08) ================= ================= NET LOSS PER SHARE - DILUTED ($0.73) ($0.08) ================= =================
Note: The above pro forma data reflects the following pro forma adjustments: A - Entry to record consideration given upon closing of the purchase of SMX ($7,931,958). B - Entry to record additional acquisition costs incurred prior to closing ($383,183). C - Adjustment to the purchase price for liabilities paid at closing but previously recorded by SMX ($1,643,000). D - Entry to eliminate Investment in SMX in consolidation. F - Entry to reverse interest expense recorded by SMX on bank loans paid upon closing ($866,062 and $843,008 in 2001 and 2000, respectively). G - Entry to record amortization of intangible assets acquired (including $1,200,000 of amortization of goodwill). 4 (c) Exhibits: Exhibit No. Description ----------- ----------- 2.1 Agreement and Plan of Merger among SpatialMetriX Corporation, FARO Technologies, Inc., and FARO Acquisition LLC, dated as of September 14, 2001, as amended on December 26,2001, and as further amended on January 16, 2002 (incorporated by reference to exhibit 2.1 filed with Registrant's Current Report on Form 8-K dated January 16, 2002). 23.1 Consent of Arthur Andersen LLP. 99.1 Confirmation letter from Faro Technologies, Inc. pursuant to Securities and Exchange Commission Release Nos. 33-8070; 34-45590; 35-27503; 39-2395; IA-2018; IC-25464; FR-62; File No. S7-03-02 (filed herein). 99.2 Financial Statements of SpatialMetriX Corporation as of December 31, 2001 and 2000 and for each of the two years in the period ended December 31, 2001 (filed herein). SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Se Exchange Act of 1934, the Registrant has duly caused this report to be on its behalf by the undersigned, thereunto duly authorized. FARO TECHNOLOGIES, INC. By: /s/ Gregory A. Fraser -------------------------------------- Gregory A. Fraser Executive Vice President, Secretary, Treasurer, and Director Date: April 1, 2002 5