FORM 8-K | ||
FARO TECHNOLOGIES, INC. | ||
(Exact name of registrant as specified in its charter) | ||
Florida | 0-23081 | 59-3157093 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit Number | Description | ||
99.1 | Press release dated | February 22, 2017 |
FARO Technologies, Inc. (Registrant) | ||||||
February 22, 2017 | /s/ Robert Seidel | |||||
By: | Robert Seidel | |||||
Its: | Chief Financial Officer | |||||
(Duly Authorized Officer and Principal Financial Officer) |
Exhibit Number | Description | ||
99.1 | Press release dated | February 22, 2017 |
NEWS BULLETIN | ||
![]() | FARO Technologies, Inc. 250 Technology Park Lake Mary, FL 32746 | |
The Measure of Success | FOR IMMEDIATE RELEASE |
• | 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; |
• | the impact of fluctuations of 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, 2015. |
Three Months Ended | Twelve Months Ended | ||||||||||||||
(in thousands, except share and per share data) | December 31, 2016 | December 31, 2015 | December 31, 2016 | December 31, 2015 | |||||||||||
SALES | |||||||||||||||
Product | $ | 73,778 | $ | 77,558 | $ | 256,010 | $ | 259,842 | |||||||
Service | 17,920 | 13,769 | 69,574 | 57,706 | |||||||||||
Total sales | 91,698 | 91,327 | 325,584 | 317,548 | |||||||||||
COST OF SALES | |||||||||||||||
Product | 33,032 | 33,406 | 107,965 | 114,257 | |||||||||||
Service | 9,989 | 9,398 | 39,659 | 36,055 | |||||||||||
Total cost of sales (exclusive of depreciation and amortization, shown separately below) | 43,021 | 42,804 | 147,624 | 150,312 | |||||||||||
GROSS PROFIT | 48,677 | 48,523 | 177,960 | 167,236 | |||||||||||
OPERATING EXPENSES | |||||||||||||||
Selling and marketing | 23,634 | 21,328 | 79,870 | 79,837 | |||||||||||
General and administrative | 9,477 | 10,041 | 40,813 | 36,370 | |||||||||||
Depreciation and amortization | 4,135 | 3,195 | 13,868 | 11,217 | |||||||||||
Research and development | 7,815 | 7,195 | 30,125 | 26,690 | |||||||||||
Total operating expenses | 45,061 | 41,759 | 164,676 | 154,114 | |||||||||||
INCOME FROM OPERATIONS | 3,616 | 6,764 | 13,284 | 13,122 | |||||||||||
OTHER (INCOME) EXPENSE | |||||||||||||||
Interest income, net | (45 | ) | (19 | ) | (164 | ) | (55 | ) | |||||||
Other (income) expense, net | (2 | ) | (1,150 | ) | 822 | 371 | |||||||||
INCOME BEFORE INCOME TAX EXPENSE (BENEFIT) | 3,663 | 7,933 | 12,626 | 12,806 | |||||||||||
INCOME TAX EXPENSE (BENEFIT) | 118 | (952 | ) | 1,519 | (7 | ) | |||||||||
NET INCOME | $ | 3,545 | $ | 8,885 | $ | 11,107 | $ | 12,813 | |||||||
NET INCOME PER SHARE - BASIC | $ | 0.21 | $ | 0.52 | $ | 0.67 | $ | 0.74 | |||||||
NET INCOME PER SHARE - DILUTED | $ | 0.21 | $ | 0.52 | $ | 0.67 | $ | 0.74 | |||||||
Weighted average shares - Basic | 16,676,764 | 17,051,427 | 16,654,786 | 17,288,665 | |||||||||||
Weighted average shares - Diluted | 16,720,571 | 17,103,622 | 16,681,710 | 17,389,473 |
(in thousands, except share data) | December 31, 2016 | December 31, 2015 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 106,169 | $ | 107,356 | ||||
Short-term investments | 42,942 | 42,994 | ||||||
Accounts receivable, net | 61,364 | 69,918 | ||||||
Inventories, net | 51,886 | 45,571 | ||||||
Deferred income tax assets, net | 7,565 | 7,792 | ||||||
Prepaid expenses and other current assets | 16,304 | 18,527 | ||||||
Total current assets | 286,230 | 292,158 | ||||||
Property and equipment: | ||||||||
Machinery and equipment | 57,063 | 54,124 | ||||||
Furniture and fixtures | 6,099 | 5,945 | ||||||
Leasehold improvements | 18,778 | 18,471 | ||||||
Property and equipment at cost | 81,940 | 78,540 | ||||||
Less: accumulated depreciation and amortization | (50,262 | ) | (42,594 | ) | ||||
Property and equipment, net | 31,678 | 35,946 | ||||||
Goodwill | 46,744 | 26,371 | ||||||
Intangible assets, net | 22,279 | 15,985 | ||||||
Service and sales demonstration inventory, net | 29,136 | 33,709 | ||||||
Deferred income tax assets, net | 6,742 | 4,050 | ||||||
Other long-term assets | 905 | 967 | ||||||
Total assets | $ | 423,714 | $ | 409,186 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 11,126 | $ | 11,345 | ||||
Accrued liabilities | 24,572 | 22,574 | ||||||
Income taxes payable | 618 | — | ||||||
Current portion of unearned service revenues | 27,422 | 26,114 | ||||||
Customer deposits | 2,872 | 2,998 | ||||||
Total current liabilities | 66,610 | 63,031 | ||||||
Unearned service revenues - less current portion | 13,813 | 15,025 | ||||||
Deferred income tax liabilities | 1,409 | 686 | ||||||
Other long-term liabilities | 2,225 | 2,800 | ||||||
Total liabilities | 84,057 | 81,542 | ||||||
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; 18,170,267 and 18,077,594 issued; 16,680,791 and 16,588,118 outstanding, respectively | 18 | 18 | ||||||
Additional paid-in capital | 212,602 | 206,996 | ||||||
Retained earnings | 183,436 | 172,329 | ||||||
Accumulated other comprehensive loss | (24,561 | ) | (19,861 | ) | ||||
Common stock in treasury, at cost - 1,489,476 shares | (31,838 | ) | (31,838 | ) | ||||
Total shareholders’ equity | 339,657 | 327,644 | ||||||
Total liabilities and shareholders’ equity | $ | 423,714 | $ | 409,186 |
Years ended December 31, | ||||||||||||
(in thousands) | 2016 | 2015 | 2014 | |||||||||
Net income | $ | 11,107 | $ | 12,813 | $ | 33,649 | ||||||
Currency translation adjustments, net of tax | (4,700 | ) | (13,166 | ) | (13,961 | ) | ||||||
Comprehensive income (loss) | $ | 6,407 | $ | (353 | ) | $ | 19,688 |
Years Ended December 31, | ||||||||||||
(in thousands) | 2016 | 2015 | 2014 | |||||||||
CASH FLOWS FROM: | ||||||||||||
OPERATING ACTIVITIES: | ||||||||||||
Net income | $ | 11,107 | $ | 12,813 | $ | 33,649 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 13,868 | 11,217 | 7,428 | |||||||||
Compensation for stock options and restricted stock units | 5,374 | 4,306 | 4,678 | |||||||||
Provision for bad debts (net recovery of) | 898 | 346 | (306 | ) | ||||||||
Loss on disposal of assets | 860 | 947 | — | |||||||||
Write-down of inventories | 4,134 | 10,878 | 3,272 | |||||||||
Deferred income tax benefit | (2,002 | ) | (655 | ) | (4,707 | ) | ||||||
Income tax benefit from exercise of stock options | (357 | ) | (313 | ) | (169 | ) | ||||||
Change in operating assets and liabilities: | ||||||||||||
Decrease (increase) in: | ||||||||||||
Accounts receivable, net | 6,727 | 9,584 | (24,587 | ) | ||||||||
Inventories, net | (6,729 | ) | (18,021 | ) | (21,995 | ) | ||||||
Prepaid expenses and other assets | 3,588 | (2,834 | ) | (3,501 | ) | |||||||
(Decrease) increase in: | ||||||||||||
Accounts payable and accrued liabilities | 534 | (6,401 | ) | 8,867 | ||||||||
Income taxes payable | 618 | — | (1,560 | ) | ||||||||
Customer deposits | (1,310 | ) | 1,114 | (724 | ) | |||||||
Unearned service revenues | 273 | 5,051 | 5,313 | |||||||||
Net cash provided by operating activities | 37,583 | 28,032 | 5,658 | |||||||||
INVESTING ACTIVITIES: | ||||||||||||
Proceeds from sale of investments | — | 22,001 | — | |||||||||
Purchases of property and equipment | (7,720 | ) | (14,169 | ) | (18,722 | ) | ||||||
Payments for intangible assets | (1,657 | ) | (2,140 | ) | (1,221 | ) | ||||||
Acquisition of business, net of cash received | (27,708 | ) | (12,066 | ) | (1,150 | ) | ||||||
Net cash used in investing activities | (37,085 | ) | (6,374 | ) | (21,093 | ) | ||||||
FINANCING ACTIVITIES: | ||||||||||||
Payments on capital leases | (8 | ) | (8 | ) | (8 | ) | ||||||
Payments of contingent consideration for acquisitions | (774 | ) | — | — | ||||||||
Repurchase of common stock | — | (22,763 | ) | — | ||||||||
Income tax benefit from exercise of stock options | 357 | 313 | 169 | |||||||||
Proceeds from issuance of stock, net | 674 | 2,287 | 3,369 | |||||||||
Net cash provided by (used in) financing activities | 249 | (20,171 | ) | 3,530 | ||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (1,934 | ) | (3,420 | ) | (3,436 | ) | ||||||
DECREASE IN CASH AND CASH EQUIVALENTS | (1,187 | ) | (1,933 | ) | (15,341 | ) | ||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 107,356 | 109,289 | 124,630 | |||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 106,169 | $ | 107,356 | $ | 109,289 |
Factory Metrology | Construction BIM-CIM | Other | Total | |||||||||||||
2016 | ||||||||||||||||
Net sales to external customers | $ | 236,313 | $ | 65,056 | $ | 24,215 | $ | 325,584 | ||||||||
Segment profit | $ | 69,845 | $ | 18,250 | $ | 9,995 | $ | 98,090 | ||||||||
General and administrative | 40,813 | |||||||||||||||
Depreciation and amortization | 13,868 | |||||||||||||||
Research and development | 30,125 | |||||||||||||||
Income from operations | $ | 13,284 |
Factory Metrology | Construction BIM-CIM | Other | Total | |||||||||||||
2015 | ||||||||||||||||
Net sales to external customers | $ | 222,745 | $ | 70,849 | $ | 23,954 | $ | 317,548 | ||||||||
Segment profit | $ | 63,463 | $ | 16,299 | $ | 7,637 | $ | 87,399 | ||||||||
General and administrative | 36,370 | |||||||||||||||
Depreciation and amortization | 11,217 | |||||||||||||||
Research and development | 26,690 | |||||||||||||||
Income from operations | $ | 13,122 |