QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Large accelerated filer | ☐ | ☒ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
PAGE | ||||||||
PART I. | ||||||||
Item 1. | ||||||||
a) | Condensed Consolidated Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023 | |||||||
b) | Condensed Consolidated Statements of Operations (Unaudited) For the Three Months Ended March 31, 2024 and March 31, 2023 | |||||||
c) | Condensed Consolidated Statements of Comprehensive Loss (Unaudited) For the Three Months Ended March 31, 2024 and March 31, 2023 | |||||||
d) | Condensed Consolidated Statements of Cash Flows (Unaudited) For the Three Months Ended March 31, 2024 and March 31, 2023 | |||||||
e) | Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) For the Three Months Ended March 31, 2024 and March 31, 2023 | |||||||
f) | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
(in thousands, except share and per share data) | March 31, 2024 (unaudited) | December 31, 2023 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Short-term investments | |||||||||||
Accounts receivable, net | |||||||||||
Inventories, net | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Non-current assets: | |||||||||||
Property, plant and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Service and sales demonstration inventory, net | |||||||||||
Deferred income tax assets, net | |||||||||||
Other long-term assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Income taxes payable | |||||||||||
Current portion of unearned service revenues | |||||||||||
Customer deposits | |||||||||||
Lease liabilities | |||||||||||
Total current liabilities | |||||||||||
Loan - | |||||||||||
Unearned service revenues - less current portion | |||||||||||
Lease liabilities - less current portion | |||||||||||
Deferred income tax liabilities | |||||||||||
Income taxes payable - less current portion | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies - See Note 12 | |||||||||||
Shareholders’ equity: | |||||||||||
Common stock - par value $ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Common stock in treasury, at cost - | ( | ( | |||||||||
Total shareholders’ equity | |||||||||||
Total liabilities and shareholders’ equity | $ | $ |
Three Months Ended March 31, | |||||||||||
(in thousands, except share and per share data) | 2024 | 2023 | |||||||||
Sales | |||||||||||
Product | $ | $ | |||||||||
Service | |||||||||||
Total sales | |||||||||||
Cost of sales | |||||||||||
Product | |||||||||||
Service | |||||||||||
Total cost of sales | |||||||||||
Gross profit | |||||||||||
Operating expenses | |||||||||||
Selling, general and administrative | |||||||||||
Research and development | |||||||||||
Restructuring costs | |||||||||||
Total operating expenses | |||||||||||
Loss from operations | ( | ( | |||||||||
Other (income) expense | |||||||||||
Interest expense | |||||||||||
Other (expense) income, net | ( | ||||||||||
Loss before income tax | ( | ( | |||||||||
Income tax expense | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Net loss per share - Basic | $ | ( | $ | ( | |||||||
Net loss per share - Diluted | $ | ( | $ | ( | |||||||
Weighted average shares - Basic | |||||||||||
Weighted average shares - Diluted | |||||||||||
Three Months Ended March 31, | |||||||||||
(in thousands) | 2024 | 2023 | |||||||||
Net loss | $ | ( | $ | ( | |||||||
Currency translation adjustments, net of income taxes | ( | ||||||||||
Comprehensive loss | $ | ( | $ | ( |
Three Months Ended March 31, | |||||||||||
(in thousands) | 2024 | 2023 | |||||||||
Cash flows from: | |||||||||||
Operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation | |||||||||||
Deferred income tax (benefit) and other non-cash charges | ( | ||||||||||
Provision for excess and obsolete inventory | |||||||||||
Amortization of debt discount and issuance costs | |||||||||||
Loss on disposal of assets | |||||||||||
Provisions for bad debts, net of recoveries | |||||||||||
Change in operating assets and liabilities: | |||||||||||
Decrease (Increase) in: | |||||||||||
Accounts receivable | |||||||||||
Inventories | ( | ||||||||||
Prepaid expenses and other current assets | ( | ||||||||||
(Decrease) Increase in: | |||||||||||
Accounts payable and accrued liabilities | ( | ( | |||||||||
Income taxes payable | ( | ||||||||||
Customer deposits | ( | ||||||||||
Unearned service revenues | |||||||||||
Other liabilities | ( | ||||||||||
Net cash provided by (used in) operating activities | ( | ||||||||||
Investing activities: | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Purchases of short-term investments | ( | ||||||||||
Cash paid for technology development, patents and licenses | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Financing activities: | |||||||||||
Payments on finance leases | ( | ( | |||||||||
Cash settlement of equity awards | |||||||||||
Proceeds from issuance of | |||||||||||
Net cash (used in) provided by financing activities | ( | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
Increase in cash and cash equivalents | |||||||||||
Cash and cash equivalents, beginning of period | |||||||||||
Cash and cash equivalents, end of period | $ | $ |
Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Common Stock in Treasury | |||||||||||||||||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except share data) | Shares | Amounts | Total | |||||||||||||||||||||||||||||||||||||||||
BALANCE JANUARY 1, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Common stock issued, net of shares withheld for employee taxes | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
BALANCE MARCH 31, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Common Stock in Treasury | ||||||||||||||||||||||||||||||||||||||||||
Common Stock | Retained Earnings | |||||||||||||||||||||||||||||||||||||||||||
(in thousands, except share data) | Shares | Amounts | Total | |||||||||||||||||||||||||||||||||||||||||
BALANCE JANUARY 1, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Common stock issued, net of shares withheld for employee taxes | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
BALANCE MARCH 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Cost of sales | |||||||||||
Product | $ | $ | |||||||||
Service | |||||||||||
Total cost of sales | |||||||||||
Operating expenses | |||||||||||
Selling, general and administrative | |||||||||||
Research and development | |||||||||||
Total operating expenses | |||||||||||
Total stock-based compensation | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Product sales | ||||||||||||||
Product transferred to customers at a point in time | $ | $ | ||||||||||||
Product transferred to customers over time | ||||||||||||||
Total product sales | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Service sales | ||||||||||||||
Service transferred to customers at a point in time | $ | $ | ||||||||||||
Service transferred to customers over time | ||||||||||||||
Total service sales | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Total sales to external customers | ||||||||||||||
Americas (1) | $ | $ | ||||||||||||
EMEA (1) | ||||||||||||||
APAC (1) | ||||||||||||||
$ | $ |
As of March 31, 2024 | As of December 31, 2023 | ||||||||||
Accounts receivable | $ | $ | |||||||||
Allowance for credit losses | ( | ( | |||||||||
Total | $ | $ |
Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | ||||||||||
Beginning balance of the allowance for credit losses | $ | $ | |||||||||
Current period provision for expected credit losses, net of recoveries | |||||||||||
Charge-offs of amounts previously expensed | ( | ( | |||||||||
Ending balance of the allowance for credit losses | $ | $ |
As of March 31, 2024 | As of December 31, 2023 | ||||||||||
Raw materials | $ | $ | |||||||||
Finished goods | |||||||||||
Inventories, net | |||||||||||
Service and sales demonstration inventory, net | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Numerator: | ||||||||||||||
Net loss | $ | ( | $ | ( | ||||||||||
Denominator: | ||||||||||||||
Weighted average shares - Basic | ||||||||||||||
Weighted average shares - Diluted | ||||||||||||||
Net loss per share - Basic | $ | ( | $ | ( | ||||||||||
Net loss per share - Diluted | $ | ( | $ | ( |
As of March 31, 2024 | As of December 31, 2023 | ||||||||||
Accrued compensation and benefits | $ | $ | |||||||||
Accrued restructuring costs | |||||||||||
Accrued warranties | |||||||||||
Professional and legal fees | |||||||||||
Accrued interest | |||||||||||
Taxes other than income | |||||||||||
Other accrued liabilities | |||||||||||
Total accrued liabilities | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Balance, beginning of period | $ | $ | |||||||||
Provision for warranty expense | |||||||||||
Fulfillment of warranty obligations | ( | ( | |||||||||
Balance, end of period | $ | $ |
As of March 31, 2024 | |||||||||||||||||
Assets | Level 1 | Level 2 | Level 3 | ||||||||||||||
Short-term investments: U.S. Treasury securities | $ | $ | $ | ||||||||||||||
Total | $ | $ | $ |
As of December 31, 2023 | |||||||||||||||||
Assets | Level 1 | Level 2 | Level 3 | ||||||||||||||
Cash and cash equivalents: U.S. Treasury securities | $ | $ | $ | ||||||||||||||
Short-term investments: U.S. Treasury securities | |||||||||||||||||
Total | $ | $ | $ |
Severance and other benefits | Professional fees and other related charges | Total | |||||||||||||||
Balance at December 31, 2023 | $ | $ | $ | ||||||||||||||
Additions charged to expense | |||||||||||||||||
Cash payments | ( | ( | |||||||||||||||
Balance at March 31, 2024 | $ | $ | $ | ||||||||||||||
Severance and other benefits | Professional fees and other related charges | Total | |||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | ||||||||||||||
Additions charged to expense | |||||||||||||||||
Cash payments | ( | ( | |||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | ||||||||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Operating lease cost | $ | $ | |||||||||
Finance lease cost: | |||||||||||
Amortization of ROU assets | |||||||||||
Interest on lease liabilities | |||||||||||
Total finance lease cost | $ | $ | |||||||||
As of | As of | ||||||||||
March 31, 2024 | December 31, 2023 | ||||||||||
Operating leases: | |||||||||||
Operating lease right-of-use assets | $ | $ | |||||||||
Finance leases: | |||||||||||
Property and equipment, at cost | |||||||||||
Accumulated amortization | ( | ( | |||||||||
$ | $ | ||||||||||
Weighted Average Remaining Lease Term (in years): | |||||||||||
Operating leases | |||||||||||
Finance leases | |||||||||||
Weighted Average Discount Rate: | |||||||||||
Operating leases | % | % | |||||||||
Finance leases | % | % |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flows from operating leases | $ | $ | |||||||||
Operating cash flows from finance leases | |||||||||||
Financing cash flows from finance leases | |||||||||||
ROU assets obtained in exchange for lease obligations: | |||||||||||
Operating leases | $ | $ |
Year Ending December 31, | Operating leases | Finance leases | |||||||||
2024 (excluding the first 3 months) | $ | $ | |||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
2028 | |||||||||||
Thereafter | |||||||||||
Total lease payments | |||||||||||
Less imputed interest | ( | ( | |||||||||
Total | $ | $ |
As of March 31, 2024 | As of December 31, 2023 | ||||||||||
Principal | $ | $ | |||||||||
Unamortized discount and issuance costs | ( | ( | |||||||||
Net carrying amount | $ | $ |
Three months ended March 31, 2024 | Three months ended March 31, 2023 | ||||||||||
Contractual interest expense | $ | $ | |||||||||
Amortization of discount and issuance costs | |||||||||||
Total interest expense related to the Notes | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
Current Assets: | |||||||||||
Prepaid expenses and other current assets | $ | 9,251 | $ | 9,540 | |||||||
Current Liabilities: | |||||||||||
Accounts payable (1) | $ | 7,549 | $ | 6,454 |
Three Months Ended March 31, | |||||||||||||||||||||||
(dollars in thousands) | 2024 | % of Sales | 2023 | % of Sales | |||||||||||||||||||
Sales | |||||||||||||||||||||||
Product | $ | 63,536 | 75.4 | % | $ | 65,240 | 76.8 | % | |||||||||||||||
Service | 20,708 | 24.6 | % | 19,727 | 23.2 | % | |||||||||||||||||
Total sales | 84,244 | 100.0 | % | 84,967 | 100.0 | % | |||||||||||||||||
Cost of sales | |||||||||||||||||||||||
Product | 30,452 | 36.1 | % | 33,957 | 40.0 | % | |||||||||||||||||
Service | 10,485 | 12.4 | % | 11,294 | 13.3 | % | |||||||||||||||||
Total cost of sales | 40,937 | 48.6 | % | 45,251 | 53.3 | % | |||||||||||||||||
Gross profit | 43,307 | 51.4 | % | 39,716 | 46.7 | % | |||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Selling, general and administrative | 39,593 | 47.0 | % | 41,376 | 48.7 | % | |||||||||||||||||
Research and development | 9,024 | 10.7 | % | 12,718 | 15.0 | % | |||||||||||||||||
Restructuring costs | — | — | % | 4,238 | 5.0 | % | |||||||||||||||||
Total operating expenses | 48,617 | 57.7 | % | 58,332 | 68.7 | % | |||||||||||||||||
Loss from operations | (5,310) | (6.3) | % | (18,616) | (21.9) | % | |||||||||||||||||
Other (income) expense | |||||||||||||||||||||||
Interest expense | 831 | 1.0 | % | 835 | 1.0 | % | |||||||||||||||||
Other (expense) income, net | 25 | — | % | (220) | (0.3) | % | |||||||||||||||||
Loss before income tax | (6,166) | (7.3) | % | (19,231) | (22.6) | % | |||||||||||||||||
Income tax expense | 1,101 | 1.3 | % | 1,933 | 2.3 | % | |||||||||||||||||
Net loss | $ | (7,267) | (8.6) | % | $ | (21,164) | (24.9) | % |
EXHIBIT INDEX | ||||||||||||||||||||||||||||||||
Incorporated by Reference | Provided Herewith | |||||||||||||||||||||||||||||||
Exhibit Number | Exhibit Description | Form | Exhibit | Filing Date | ||||||||||||||||||||||||||||
S-1/A | 3.1 | September 10,1997 | ||||||||||||||||||||||||||||||
8-K | 3.1 | May 30, 2023 | ||||||||||||||||||||||||||||||
S-1/A | 4.1 | September 10, 1997 | ||||||||||||||||||||||||||||||
8-K | 10.1 | January 16, 2024 | ||||||||||||||||||||||||||||||
8-K | 10.2 | January 16, 2024 | ||||||||||||||||||||||||||||||
X | ||||||||||||||||||||||||||||||||
X | ||||||||||||||||||||||||||||||||
X | ||||||||||||||||||||||||||||||||
X | ||||||||||||||||||||||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||||||||||||||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||||||||||||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||||||||||||||||||||||||
101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document | X | ||||||||||||||||||||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.) | X | ||||||||||||||||||||||||||||||
FARO Technologies, Inc. | |||||||||||
(Registrant) | |||||||||||
Date: May 1, 2024 | By: | /s/ Matthew Horwath | |||||||||
Name: Matthew Horwath | |||||||||||
Title: Chief Financial Officer | |||||||||||
(Duly Authorized Officer and Principal Financial Officer) |
/s/ Peter J. Lau | ||
Peter J. Lau President and Chief Executive Officer (Principal Executive Officer) |
/s/ Matthew Horwath | ||
Matthew Horwath Chief Financial Officer (Principal Financial Officer) |
/s/ Peter J. Lau | ||
Peter J. Lau President and Chief Executive Officer (Principal Executive Officer) |
/s/ Matthew Horwath | ||
Matthew Horwath Chief Financial Officer (Principal Financial Officer) |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 20,578,403 | 20,343,359 |
Common stock, shares outstanding (in shares) | 19,205,361 | 18,968,798 |
Treasury stock, shares (in shares) | 1,373,042 | 1,374,561 |
5.50% Convertible Senior Notes Due 2028 | Convertible Debt | ||
Stated interest rate (as a percent) | 5.50% |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Sales | $ 84,244 | $ 84,967 |
Cost of sales | 40,937 | 45,251 |
Gross profit | 43,307 | 39,716 |
Operating expenses | ||
Selling, general and administrative | 39,593 | 41,376 |
Research and development | 9,024 | 12,718 |
Restructuring costs | 0 | 4,238 |
Total operating expenses | 48,617 | 58,332 |
Loss from operations | (5,310) | (18,616) |
Other (income) expense | ||
Interest expense | 831 | 835 |
Other (expense) income, net | 25 | (220) |
Loss before income tax | (6,166) | (19,231) |
Income tax expense | 1,101 | 1,933 |
Net loss | $ (7,267) | $ (21,164) |
Net loss per share - Basic (in dollars per share) | $ (0.38) | $ (1.12) |
Net loss per share - Diluted (in dollars per share) | $ (0.38) | $ (1.12) |
Weighted average shares - Basic (in shares) | 19,046,855 | 18,816,110 |
Weighted average shares - Diluted (in shares) | 19,046,855 | 18,816,110 |
Product | ||
Sales | $ 63,536 | $ 65,240 |
Cost of sales | 30,452 | 33,957 |
Service | ||
Sales | 20,708 | 19,727 |
Cost of sales | $ 10,485 | $ 11,294 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (7,267) | $ (21,164) |
Currency translation adjustments, net of income taxes | (3,898) | 2,780 |
Comprehensive loss | $ (11,165) | $ (18,384) |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) |
Mar. 31, 2024 |
Jan. 24, 2023 |
---|---|---|
5.50% Convertible Senior Notes Due 2028 | Convertible Debt | ||
Stated interest rate (as a percent) | 5.50% | 5.50% |
Description of Business |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | DESCRIPTION OF BUSINESS FARO Technologies, Inc. and its subsidiaries (collectively “FARO,” the “Company,” “us,” “we” or “our”) design, develop, manufacture, market and support software driven, three-dimensional (“3D”) measurement, imaging, and realization solutions for the manufacturing, architecture, engineering and construction (“AEC”), Operations and Maintenance (“O&M”) and public safety analytics markets. We enable our customers to capture, measure, manipulate, interact with and share 4D, 3D and 2D data from the physical world in a virtual environment and then translate this information back into the physical domain. Our broad technology set equips our customers with a wide range of 3D capture technologies that range from ultra-high accuracy laser-scanner-based technology to lower accuracy, photogrammetry-based technology. Our FARO suite of 3D products and software solutions are used for inspection of components and assemblies, rapid prototyping, reverse engineering, documenting large volume or structures in 3D, surveying and construction, construction management, assembly layout, machine guidance as well as in investigation and reconstructions of crash and crime scenes. We sell the majority of our solutions through a direct sales force, with an increasing volume being sold through an indirect channel across a range of sectors including manufacturing, surveying, architecture, engineering and construction, public safety forensics and other industries.
|
Principles of Consolidation |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | PRINCIPLES OF CONSOLIDATIONOur condensed consolidated financial statements include the accounts of FARO Technologies, Inc. and its subsidiaries, all of which are wholly-owned. All intercompany transactions and balances have been eliminated. The financial statements of our foreign subsidiaries are translated into U.S. dollars using exchange rates in effect at period-end for assets and liabilities and average exchange rates during each reporting period for results of operations. Adjustments resulting from financial statement translations are reflected as a separate component of accumulated other comprehensive loss. Foreign currency transaction gains and losses are included in net income (loss) |
Basis of Presentation |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements and notes thereto have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements include all normal recurring accruals and adjustments considered necessary by management for a fair presentation in conformity with U.S. GAAP. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The condensed consolidated results of operations for the three months ended March 31, 2024 are not necessarily indicative of results that may be expected for the year ending December 31, 2024, or any future period. The information included in this Quarterly Report on Form 10-Q, including the interim condensed consolidated financial statements and the accompanying notes, should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The accompanying December 31, 2023 condensed consolidated balance sheet has been derived from those audited consolidated financial statements. Stock-based compensation expense is allocated to the applicable departmental cost in our condensed consolidated financial statements. The following table summarizes total stock-based compensation expense for each of the line items on our condensed consolidated statements of operations:
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Impact of Recently Issued Accounting Pronouncements |
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Mar. 31, 2024 | |
Accounting Changes and Error Corrections [Abstract] | |
Impact of Recently Issued Accounting Pronouncements | IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Recently Issued Accounting Pronouncements Not Yet Adopted In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires disclosure of significant segment expenses and other segment items on an annual and interim basis under Accounting Standards Codification 280. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods beginning after December 15, 2024. Early adoption is permitted and the amendments in ASU 2023-07 should be applied on a retrospective basis to all periods presented. The Company is currently evaluating the impact of ASU 2023-07 on its disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which improves income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. ASU 2023-09 indicates that all entities will apply its guidance prospectively with an option for retroactive application to each period in the financial statements. The Company is currently evaluating the impact of ASU 2023-09 on its disclosures.
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Revenues |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | REVENUES The following tables present our revenues by sales type as presented in our condensed consolidated statements of operations disaggregated by the timing of transfer of goods or services:
The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers:
(1) Regions represent North America and South America (the “Americas”); Europe, the Middle East, and Africa (“EMEA”); and Asia-Pacific (“APAC”). For revenue related to our measurement and imaging equipment and related software, we allocate the contract price to performance obligations based on our best estimate of the standalone selling price. We make this allocation estimate utilizing data from the sale of our applicable products and services to customers separately in similar circumstances. Revenue related to our measurement and imaging equipment and related software is generally recognized upon shipment from our facilities or when delivered to the customer location, as determined by the agreed upon shipping terms, at which time we are entitled to payment and title and control has passed to the customer. Software arrangements generally include short-term maintenance that is considered post-contract support (“PCS”), which is considered to be product transferred to the customer over time and a separate performance obligation. We generally establish a standalone sales price for this PCS component based on our maintenance renewal rate. Maintenance renewals are recognized on a straight-line basis over the term of the maintenance agreement. Payments for products and services are collected within a short period of time following transfer of control or commencement of delivery of services, as applicable. Further, customers frequently purchase extended hardware service contracts with the purchase of measurement equipment and related software. Hardware service contracts are considered a performance obligation when services are transferred to a customer over time, and, as such, we recognize revenue on a straight-line basis over the contractual term. Hardware service contracts include contract periods that extend between one month to three years. We capitalize commission expenses related to deliverables transferred to a customer over time and amortize such costs ratably over the term of the contract. As of March 31, 2024, the deferred cost asset related to deferred commissions was approximately $4.4 million. For classification purposes, $3.4 million and $1.0 million are comprised within the Prepaid expenses and other current assets and Other long-term assets, respectively, on our condensed consolidated balance sheet as of March 31, 2024. As of December 31, 2023, the deferred cost asset related to deferred commissions was approximately $4.6 million. For classification purposes, $3.5 million and $1.1 million were comprised within the Prepaid expenses and other current assets and Other long-term assets, respectively, on our condensed consolidated balance sheet as of December 31, 2023. The unearned service revenue liabilities reported on our condensed consolidated balance sheets reflect the contract liabilities to satisfy the remaining performance obligations for extended warranties, subscription-based software and software maintenance. The current portion of unearned service revenues on our condensed consolidated balance sheets is what we expect to recognize as revenue within twelve months after the applicable balance sheet date relating to extended warranties, subscription-based software and software maintenance contract liabilities. The unearned service revenues less the current portion on our condensed consolidated balance sheets is what we expect to recognize as revenue extending beyond twelve months after the applicable balance sheet date relating to extended warranties, subscription-based software and software maintenance contract liabilities. Customer deposits on our condensed consolidated balance sheets represent customer prepayments on contracts for performance obligations that we must satisfy in the future to recognize the related contract revenue. These amounts are generally related to performance obligations which are delivered in less than 12 months. During the three months ended March 31, 2024, we recognized $12.1 million of revenue that was deferred on our condensed consolidated balance sheet as of December 31, 2023. During the three months ended March 31, 2023, we recognized $11.4 million of revenue that was deferred on our condensed consolidated balance sheet as of December 31, 2022. The nature of certain of our contracts gives rise to variable consideration, primarily related to an allowance for sales returns. We are required to estimate the contract asset related to sales returns and record a corresponding adjustment to Cost of sales. Our allowance for sales returns for each of March 31, 2024 and December 31, 2023 was less than $0.1 million. Shipping and handling fees billed to customers in a sales transaction are recorded in Product Sales and shipping and handling costs incurred are recorded in Cost of sales. We exclude from Sales any value-added sales and other taxes that we collect concurrently with revenue-producing activities.
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Accounts Receivable |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable | ACCOUNTS RECEIVABLE Accounts receivable consist of the following:
Activity related to the allowance for credit losses was as follows:
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | INVENTORIES Inventories are stated at the lower of cost or net realizable value using the first-in first-out (FIFO) method. We have three principal categories of inventory: 1) manufactured product to be sold; 2) sales demonstration inventory - completed product used to support our sales force for demonstrations and held for sale; and 3) service inventory - completed product and parts used to support our service department and held for sale. Shipping and handling costs are classified as a component of Cost of sales in our condensed consolidated statements of operations. Sales demonstration inventory is held by our sales representatives for up to three years, at which time it would be refurbished and transferred to finished goods as used equipment, stated at the lower of cost or net realizable value. We expect these refurbished units to remain in finished goods inventory and sold within 12 months at prices that produce reduced gross margins. Service inventory is used to provide a temporary replacement product to a customer covered by a premium warranty when the customer’s unit requires service or repair and as training equipment. Service inventory is available for sale; however, management does not expect service inventory to be sold within 12 months and, as such, classifies this inventory as a long-term asset. Service inventory that we utilize for training or repairs and which we deem as no longer available for sale is transferred to fixed assets at the lower of cost or net realizable value and depreciated over the remaining life, typically three years. Inventories consist of the following:
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Loss Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss Per Share | LOSS PER SHARE Basic net loss per share is computed by dividing net loss by the weighted average number of shares outstanding. Diluted net loss per share is computed by also considering the impact of potential common stock on both net loss and the weighted average number of shares outstanding. Our potential common stock consists of employee stock options, time-based restricted stock units, market-based restricted stock unit awards, and common stock issued for settlement of the Notes (as defined in Note 15 to the condensed consolidated financial statements). Our potential common stock is included in the diluted earnings per share calculation when adding such potential common stock would not be anti-dilutive. Market-based awards are included in the computation of diluted earnings per share only to the extent that the underlying conditions (and any applicable market condition) (i) are satisfied as of the end of the reporting period or (ii) would be considered satisfied if the end of the reporting period were the end of the related contingency period and the result would be dilutive under the treasury stock method. When we report a net loss for the period presented, the calculation of diluted net loss per share excludes our potential common stock, as the effect would be anti-dilutive. As of March 31, 2024, there were approximately 1,754,711 shares issuable upon the exercise of options, the vesting of time-based restricted stock and the contingent vesting of market-based restricted stock units that were excluded from the dilutive calculations, as they were anti-dilutive. For the three months ended March 31, 2023, there were approximately 1,077,583 issuable upon the exercise of options that were excluded from the dilutive calculations, as they were anti-dilutive. In addition, the Company issued $75 million aggregate principal amount of the Notes on January 24, 2023, which, if converted, would result in the issuance of a maximum of 2,124,645 shares of common stock. These shares were excluded from the dilutive calculations, as their effect would have been anti-dilutive. A reconciliation of the number of common shares used in the calculation of basic and diluted net loss per share is presented below:
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Accrued Liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities | ACCRUED LIABILITIES Accrued liabilities consist of the following:
Activity related to accrued warranties was as follows:
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Fair value measurements and investments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements and investments | FAIR VALUE MEASUREMENTS AND INVESTMENTS Fair Value Measurements The guidance on fair value measurements and disclosures defines fair value, establishes a framework for measuring fair value, and requires enhanced disclosures about assets and liabilities measured at fair value. Fair value is defined as the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are used to determine fair value. These models employ valuation techniques that involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity. Assets and liabilities recorded at fair value on a recurring basis in our condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, defined by the guidance on fair value measurements, are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities and are as follows: Level 1 - Valuation is based upon quoted market prices for identical instruments traded in active markets. Level 2 - Valuation is based on quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 3 - Valuation is generated from model-based techniques that use significant assumptions not observable in the market. Valuation techniques include use of discounted cash flow models and similar techniques. The fair values of our cash and cash equivalents, accounts receivable, and accounts payable, approximate their carrying amounts due to their short duration. Financial assets subject to the fair value disclosure requirements are included in the table below. All of our financial assets are classified as Level 1. At March 31, 2024 and December 31, 2023, the fair value of these investments approximated its carrying amount.
The fair value of the Notes (as defined in Note 15 to the condensed consolidated financial statements) was approximately $64.9 million and $65.3 million as of March 31, 2024 and December 31, 2023, respectively. Fair value was determined based on the closing trading price of the Notes as of the last trading day of the quarter and was primarily affected by the trading price of the Company's common stock and market interest rates. The fair value of the Notes is considered a Level 2 measurement as they are not actively traded.
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Restructuring |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | RESTRUCTURING On February 14, 2020, our Board of Directors approved a global restructuring plan (the “Restructuring Plan”) to improve operating performance and help ensure that we are appropriately structured and resourced to deliver sustainable value to our shareholders and customers. Key activities under the Restructuring Plan have targeted and achieved approximately $40 million in annualized savings. We believe we have successfully redefined our go-to-market strategy to place an increased focus on our customers and to help enable our sales employees, supported by our talented pool of field application engineers, to sell all product lines globally. In conjunction with the Restructuring Plan, on July 15, 2021, we entered into a manufacturing services agreement (the “Agreement”) with Sanmina Corporation (“Sanmina”), in connection with the Restructuring Plan. Under the Agreement, Sanmina provides manufacturing services for the Company’s measurement device products previously manufactured by the Company at the Company’s Lake Mary, Florida, Exton, Pennsylvania, Stuttgart, Germany and Portugal manufacturing sites. This phased transition to a Sanmina production facility was completed at the beginning of the third quarter of 2022 as part of our cost reduction initiative. As a result of an evaluation on the usage of our manufacturing spaces, we decided to abandon 17,000 square feet of unused space at our Exton, Pennsylvania facility in the third quarter of 2022. Since the approval of the Restructuring Plan, we paid $24.8 million, primarily consisting of severance and related benefits. All actions under this plan were completed as of March 31, 2023, and the remaining amounts payable of $0.5 million were rolled forward to the Integration Plan discussed below. On February 7, 2023, our Board of Directors approved an integration plan (the "Integration Plan"), which is intended to streamline and simplify operations, particularly around our recent acquisitions and the resulting redundant operations and offerings. The Integration Plan was amended on May 3, 2023, and the Board approved increases to both the expected pre-tax charges and the annualized cost savings. Key activities under the Integration Plan include a planned decrease in headcount, consolidation of our cloud-based offerings from 3 platforms (2 acquired, 1 organic) into a single customer offering, and the optimization of our facility assets to align with current and expected future utilization. As of March 31, 2024, in relation with the Integration Plan, we have incurred total restructuring charges of $26.1 million, and have made cash payments of $9.1 million. In the first quarter of 2024, we did not incur costs relating to the Integration Plan, as substantially all of our planned activities under the Restructuring Plan and Integration Plan are complete. In the first quarter of 2023, we recognized $4.2 million in employee severance and other professional costs associated with the restructuring plans. Additionally, we paid $0.4 million and $0.8 million, respectively, for the three month ended March 31, 2024 and 2023, primarily consisting of severance and related benefits. Activity related to the accrued restructuring charges for the Integration Plan and cash payments during the three months ended March 31, 2024 and 2023 is as follows:
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Commitments and Contingencies |
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Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Purchase Commitments — We enter into purchase commitments for products and services in the ordinary course of business. These purchases generally cover production requirements for 60 to 120 days as well as materials necessary to service customer units through the product lifecycle and for warranty commitments. As of March 31, 2024, we had approximately $27.0 million in purchase commitments that are expected to be delivered within the next 12 months. The Company’s long-term purchase commitments were immaterial as a result of the ongoing transition towards direct sourcing with Sanmina. Legal Proceedings — We are involved in disputes, claims and other legal actions arising in the normal course of our business. Although it is not possible to predict the outcome of these matters, we believe that the results of these proceedings will not have a material adverse effect on our business, financial condition or results of operations. However, any litigation, regardless of its outcome, may be costly and may require significant time and attention of our management and technical personnel.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASES We have operating and finance leases for manufacturing facilities, corporate offices, research and development facilities, sales and training facilities, vehicles, and certain equipment under which we assume the role of lessee. We do not lease assets as a lessor. Our leases have remaining lease terms of less than one year to approximately eight years, some of which include options to extend the leases for up to fifteen years, and some of which include options to terminate the leases within three months. We do not participate in any material subleasing. We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use (“ROU”) asset, Lease liability, and Lease liability - less current portion in our condensed consolidated balance sheets. Finance leases are included in Property and equipment, net, Lease liability, and Lease liability - less current portion in our condensed consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized on the commencement date of the lease based on the present value of lease payments over the lease term. Variable lease payments that depend on an index or rate include the variable portion when calculating ROU assets and lease liabilities. Variable lease payments that do not depend on an index or rate are expensed as incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available on the commencement date of the lease to determine the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU assets also include any lease payments made and lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option at the time the lease is commenced. Lease expense for lease payments is recognized on a straight-line basis over the lease term. While we have lease agreements with lease and non-lease components, we account for the lease and non-lease components as a single lease component. The components of lease expense were as follows:
We recognize lease payments made for short-term leases where terms are 12 months or less as the payments are incurred. Our short-term lease costs for each of the three months ended March 31, 2024 and March 31, 2023 were less than $0.1 million. Supplemental balance sheet information related to leases was as follows:
Supplemental cash flow information related to leases was as follows:
Maturities of lease liabilities are as follows:
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Leases | LEASES We have operating and finance leases for manufacturing facilities, corporate offices, research and development facilities, sales and training facilities, vehicles, and certain equipment under which we assume the role of lessee. We do not lease assets as a lessor. Our leases have remaining lease terms of less than one year to approximately eight years, some of which include options to extend the leases for up to fifteen years, and some of which include options to terminate the leases within three months. We do not participate in any material subleasing. We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use (“ROU”) asset, Lease liability, and Lease liability - less current portion in our condensed consolidated balance sheets. Finance leases are included in Property and equipment, net, Lease liability, and Lease liability - less current portion in our condensed consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized on the commencement date of the lease based on the present value of lease payments over the lease term. Variable lease payments that depend on an index or rate include the variable portion when calculating ROU assets and lease liabilities. Variable lease payments that do not depend on an index or rate are expensed as incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available on the commencement date of the lease to determine the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU assets also include any lease payments made and lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option at the time the lease is commenced. Lease expense for lease payments is recognized on a straight-line basis over the lease term. While we have lease agreements with lease and non-lease components, we account for the lease and non-lease components as a single lease component. The components of lease expense were as follows:
We recognize lease payments made for short-term leases where terms are 12 months or less as the payments are incurred. Our short-term lease costs for each of the three months ended March 31, 2024 and March 31, 2023 were less than $0.1 million. Supplemental balance sheet information related to leases was as follows:
Supplemental cash flow information related to leases was as follows:
Maturities of lease liabilities are as follows:
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Income Taxes |
3 Months Ended |
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Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES For the three months ended March 31, 2024 , we recorded an income tax expense of $1.1 million compared with $1.9 million for the three months ended March 31, 2023. Our effective tax rate was 17.9% for the three months ended March 31, 2024, compared with 10.1% in the prior year period. The tax rate for the three months ended March 31, 2024 reflects a tax expense on a pre-tax loss consistent with the prior year period as our United States and Singapore entities remain in a full valuation allowance. Accordingly, we are not able to recognize the tax benefits associated with pre-tax losses generated in those jurisdictions. Our quarterly estimate of our annual effective tax rate, and our quarterly provision for income tax (benefit) expense, are subject to significant variation due to numerous factors, including variability in accurately predicting our pre-tax and taxable income or loss and the mix of jurisdictions to which they relate, as well as the amount of pre-tax income or loss recognized during the quarter.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT On January 24, 2023, the Company issued $75 million aggregate principal amount of 5.50% Convertible Senior Notes due 2028 (the “Notes”). The Notes are general senior unsecured obligations of the Company and will mature on February 1, 2028, unless earlier redeemed, repurchased or converted. The Notes will bear interest from January 24, 2023, at a rate of 5.50% per annum payable semiannually in arrears on February 1 and August 1 of each year, beginning August 1, 2023. The annual effective interest rate of the Notes is 6.27% when including discounts and offering expenses incurred by the Company. The Notes will be convertible at the option of the holders of the Notes at any time prior to November 1, 2027 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2023 (and only during such fiscal quarter), if the last reported sale price of the Company’s common stock, par value $0.001 per share (hereinafter referred to as “common stock”), for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on and including, the last trading day of the immediately preceding calendar quarter exceeds 130% of the conversion price on each applicable trading day; (2) during the five-business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate for the Notes on each such trading day; (3) upon the occurrence of certain corporate events or distributions on the Company’s common stock; (4) if the Company calls such Notes for redemption; or (5) upon the occurrence of specified corporate events. On or after November 1, 2027, holders may convert all or any portion of their Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date regardless of the foregoing conditions. Upon conversion, the Company will satisfy its conversion obligation by paying or delivering, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election. The conversion rate for the Notes will initially be 23.6072 shares of the common stock per $1,000 principal amount of the Notes, which is equivalent to an initial conversion price of approximately $42.36 per share of the common stock. The initial conversion price of the Notes represents a premium of approximately 20% to the $35.30 per share last reported sale price of the common stock on January 19, 2023. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the Indenture. During the three months ended March 31, 2024, the conditions allowing holders of the 2025 Notes to convert have not been met. The Notes are therefore not convertible as of March 31, 2024 and are classified in long term liabilities in the condensed consolidated balance sheet. The Company may not redeem the Notes prior to February 5, 2026. The Company may redeem for cash all or any portion of the Notes, at its option, on or after February 5, 2026 and on or before the 50th scheduled trading day immediately before the maturity date, if the last reported sale price of the common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on and including the last trading day immediately before the date on which the Company provides notice of redemption and (ii) the trading day immediately before the date the Company provides such notice. The redemption price will be equal to 100% of the principal amount of the Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Notes, which means that the Company is not required to redeem or retire the Notes periodically. Upon the occurrence of a fundamental change (as defined in the indenture governing the Notes) prior to the maturity date, subject to certain conditions, holders of the Notes may require the Company to repurchase all or a portion of the Notes for cash at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The proceeds from the issuance of the Notes are presented under the long term liabilities of our condensed consolidated balance sheet. The net proceeds from the issuance of the Notes were approximately $72.3 million, after deducting underwriting discounts of $2.3 million and other offering expenses of $0.4 million. As of March 31, 2024, the outstanding principal balance of the Notes was $75 million. The Company is in compliance with all covenants under the indenture governing the Notes as of March 31, 2024. The net carrying amount of the Notes was as follows:
The following table sets forth the interest expense recognized related to the Notes:
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Pay vs Performance Disclosure | ||
Net loss | $ (7,267) | $ (21,164) |
Insider Trading Arrangements |
3 Months Ended |
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Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Principles of Consolidation (Policies) |
3 Months Ended |
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Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | Our condensed consolidated financial statements include the accounts of FARO Technologies, Inc. and its subsidiaries, all of which are wholly-owned. |
Foreign Currency Translation | All intercompany transactions and balances have been eliminated. The financial statements of our foreign subsidiaries are translated into U.S. dollars using exchange rates in effect at period-end for assets and liabilities and average exchange rates during each reporting period for results of operations. Adjustments resulting from financial statement translations are reflected as a separate component of accumulated other comprehensive loss. Foreign currency transaction gains and losses are included in net income (loss) |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements and notes thereto have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements include all normal recurring accruals and adjustments considered necessary by management for a fair presentation in conformity with U.S. GAAP. |
Use of Estimates | Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires disclosure of significant segment expenses and other segment items on an annual and interim basis under Accounting Standards Codification 280. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods beginning after December 15, 2024. Early adoption is permitted and the amendments in ASU 2023-07 should be applied on a retrospective basis to all periods presented. The Company is currently evaluating the impact of ASU 2023-07 on its disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which improves income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. ASU 2023-09 indicates that all entities will apply its guidance prospectively with an option for retroactive application to each period in the financial statements. The Company is currently evaluating the impact of ASU 2023-09 on its disclosures.
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Inventories | Inventories are stated at the lower of cost or net realizable value using the first-in first-out (FIFO) method. We have three principal categories of inventory: 1) manufactured product to be sold; 2) sales demonstration inventory - completed product used to support our sales force for demonstrations and held for sale; and 3) service inventory - completed product and parts used to support our service department and held for sale. Shipping and handling costs are classified as a component of Cost of sales in our condensed consolidated statements of operations. Sales demonstration inventory is held by our sales representatives for up to three years, at which time it would be refurbished and transferred to finished goods as used equipment, stated at the lower of cost or net realizable value. We expect these refurbished units to remain in finished goods inventory and sold within 12 months at prices that produce reduced gross margins. Service inventory is used to provide a temporary replacement product to a customer covered by a premium warranty when the customer’s unit requires service or repair and as training equipment. Service inventory is available for sale; however, management does not expect service inventory to be sold within 12 months and, as such, classifies this inventory as a long-term asset. Service inventory that we utilize for training or repairs and which we deem as no longer available for sale is transferred to fixed assets at the lower of cost or net realizable value and depreciated over the remaining life, typically three years.
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Basis of Presentation (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-Based Payment Arrangement, Expensed and Capitalized, Amount | Stock-based compensation expense is allocated to the applicable departmental cost in our condensed consolidated financial statements. The following table summarizes total stock-based compensation expense for each of the line items on our condensed consolidated statements of operations:
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Revenues (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Revenue | The following tables present our revenues by sales type as presented in our condensed consolidated statements of operations disaggregated by the timing of transfer of goods or services:
The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers:
(1) Regions represent North America and South America (the “Americas”); Europe, the Middle East, and Africa (“EMEA”); and Asia-Pacific (“APAC”).
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Accounts Receivable (Tables) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable | Accounts receivable consist of the following:
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Schedule of Financing Receivable, Allowance for Credit Loss | Activity related to the allowance for credit losses was as follows:
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Inventories (Tables) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | Inventories consist of the following:
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Loss Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation of Number of Common Shares Used in Calculation of Basic and Diluted Earnings Per Share (EPS) | A reconciliation of the number of common shares used in the calculation of basic and diluted net loss per share is presented below:
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Accrued Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities | Accrued liabilities consist of the following:
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Schedule of Activity Related to Accrued Warranties | Activity related to accrued warranties was as follows:
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Fair value measurements and investments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets Measured at Fair Value on a Recurring Basis | Financial assets subject to the fair value disclosure requirements are included in the table below. All of our financial assets are classified as Level 1. At March 31, 2024 and December 31, 2023, the fair value of these investments approximated its carrying amount.
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Restructuring (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring and Related Costs | Activity related to the accrued restructuring charges for the Integration Plan and cash payments during the three months ended March 31, 2024 and 2023 is as follows:
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Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Cost and Supplemental Cash Flow Information Related to Leases | The components of lease expense were as follows:
Supplemental cash flow information related to leases was as follows:
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Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows:
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Schedule of Operating Lease, Liability, Maturity | Maturities of lease liabilities are as follows:
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Schedule of Finance Lease, Liability, Maturity | Maturities of lease liabilities are as follows:
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Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Carrying Amount | The net carrying amount of the Notes was as follows:
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Schedule of Interest Expense | The following table sets forth the interest expense recognized related to the Notes:
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Revenues - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Disaggregation of Revenue [Line Items] | |||
Capitalized contract cost, net | $ 4.4 | $ 4.6 | |
Recognized service revenue | 12.1 | $ 11.4 | |
Refund liability | 0.1 | 0.1 | |
Prepaid Expenses and Other Current Assets | |||
Disaggregation of Revenue [Line Items] | |||
Capitalized contract cost, net | 3.4 | 3.5 | |
Other Long-term Assets | |||
Disaggregation of Revenue [Line Items] | |||
Capitalized contract cost, net | $ 1.0 | $ 1.1 | |
Minimum | |||
Disaggregation of Revenue [Line Items] | |||
Extended product warranty term (in years) | 1 month | ||
Maximum | |||
Disaggregation of Revenue [Line Items] | |||
Extended product warranty term (in years) | 3 years |
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|---|---|
Receivables [Abstract] | ||||
Accounts receivable | $ 92,246 | $ 95,195 | ||
Allowance for credit losses | (3,338) | (3,167) | $ (2,228) | $ (2,285) |
Total | $ 88,908 | $ 92,028 |
Accounts Receivable - Allowance For Credit Loss (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance of the allowance for credit losses | $ 3,167 | $ 2,285 |
Current period provision for expected credit losses, net of recoveries | 300 | 33 |
Charge-offs of amounts previously expensed | (129) | (90) |
Ending balance of the allowance for credit losses | $ 3,338 | $ 2,228 |
Inventories - Additional Information (Details) |
3 Months Ended |
---|---|
Mar. 31, 2024
category
| |
Property, Plant and Equipment [Line Items] | |
Inventory categories | 3 |
Refurbished demonstration inventory selling period (in months) | 12 months |
Sales Inventory | |
Property, Plant and Equipment [Line Items] | |
Demonstration inventory shelf life (in years) | 3 years |
Service Inventory | |
Property, Plant and Equipment [Line Items] | |
Service inventory selling period (in months) | 12 months |
Inventory, remaining useful life (in years) | 3 years |
Inventories - Schedule of Inventory (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 19,450 | $ 18,460 |
Finished goods | 15,926 | 16,069 |
Inventories, net | 35,376 | 34,529 |
Service and sales demonstration inventory, net | $ 20,655 | $ 23,147 |
Loss Per Share - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Jan. 24, 2023 |
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Debt Instrument [Line Items] | ||||
Antidilutive securities (in shares) | 1,754,711 | 1,077,583 | ||
Aggregate principal amount | $ 75,000 | $ 75,000 | ||
5.50% Convertible Senior Notes Due 2028 | Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 75,000 | $ 75,000 | ||
Incremental common shares (in shares) | 2,124,645 |
Loss Per Share - Reconciliation of Number of Common Shares Used in Calculation of Basic and Diluted Earnings Per Share (EPS) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Earnings Per Share [Abstract] | ||
Net loss | $ (7,267) | $ (21,164) |
Weighted average shares - Basic (in shares) | 19,046,855 | 18,816,110 |
Weighted average shares - Diluted (in shares) | 19,046,855 | 18,816,110 |
Net loss per share - Basic (in dollars per share) | $ (0.38) | $ (1.12) |
Net loss per share - Diluted (in dollars per share) | $ (0.38) | $ (1.12) |
Accrued Liabilities - Schedule of Accrued liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|---|---|
Payables and Accruals [Abstract] | ||||
Accrued compensation and benefits | $ 13,212 | $ 15,347 | ||
Accrued restructuring costs | 1,206 | 1,609 | ||
Accrued warranties | 2,671 | 2,831 | $ 2,682 | $ 2,610 |
Professional and legal fees | 3,146 | 2,851 | ||
Accrued interest | 681 | 1,712 | ||
Taxes other than income | 3,226 | 3,313 | ||
Other accrued liabilities | 2,425 | 2,267 | ||
Total accrued liabilities | $ 26,567 | $ 29,930 |
Accrued Liabilities - Activity Related to Accrued Warranties (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||
Balance, beginning of period | $ 2,831 | $ 2,610 |
Provision for warranty expense | 837 | 736 |
Fulfillment of warranty obligations | (997) | (664) |
Balance, end of period | $ 2,671 | $ 2,682 |
Fair value measurements and investments - Schedule of Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Assets | ||
Short-term investments | $ 19,763 | $ 19,496 |
Fair Value, Measurements, Recurring | Level 1 | ||
Assets | ||
Total | 19,763 | 29,367 |
Fair Value, Measurements, Recurring | Level 1 | US Treasury Securities | ||
Assets | ||
Short-term investments | 19,763 | 19,496 |
Cash and cash equivalents | 9,871 | |
Fair Value, Measurements, Recurring | Level 2 | ||
Assets | ||
Total | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | US Treasury Securities | ||
Assets | ||
Short-term investments | 0 | 0 |
Cash and cash equivalents | 0 | |
Fair Value, Measurements, Recurring | Level 3 | ||
Assets | ||
Total | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | US Treasury Securities | ||
Assets | ||
Short-term investments | $ 0 | 0 |
Cash and cash equivalents | $ 0 |
Fair value measurements and investments - Additional Information (Details) - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of the notes | $ 64.9 | $ 65.3 |
Restructuring - Activity Related to Restructuring and Related Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Restructuring Reserve [Roll Forward] | ||
Additions charged to expense | $ 0 | $ 4,238 |
Integration Plan | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 1,609 | 528 |
Additions charged to expense | 0 | 4,238 |
Cash payments | (403) | (796) |
Ending balance | 1,206 | 3,970 |
Severance and other benefits | Integration Plan | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 1,489 | 318 |
Additions charged to expense | 0 | 4,118 |
Cash payments | (403) | (796) |
Ending balance | 1,086 | 3,640 |
Professional fees and other related charges | Integration Plan | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 120 | 210 |
Additions charged to expense | 0 | 120 |
Cash payments | 0 | 0 |
Ending balance | $ 120 | $ 330 |
Commitments and Contingencies (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
| |
Commitments and Contingencies [Line Items] | |
Purchase commitment, due in next twelve months | $ 27.0 |
Minimum | |
Commitments and Contingencies [Line Items] | |
Length of purchase commitments (in days) | 60 days |
Maximum | |
Commitments and Contingencies [Line Items] | |
Length of purchase commitments (in days) | 120 days |
Leases - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Lessee, Lease, Description [Line Items] | ||
Renewal term (in years) | 15 years | |
Termination window (in months) | 3 months | |
Short term lease cost (less than) | $ 0.1 | $ 0.1 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Term of contract (in years) | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Term of contract (in years) | 8 years |
Leases - Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Leases [Abstract] | ||
Operating lease cost | $ 1,209 | $ 1,730 |
Finance lease cost: | ||
Amortization of ROU assets | 19 | 15 |
Interest on lease liabilities | 2 | 3 |
Total finance lease cost | $ 21 | $ 18 |
Leases - Supplemental Cash Flows (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 1,743 | $ 1,773 |
Operating cash flows from finance leases | 2 | 3 |
Financing cash flows from finance leases | 40 | 44 |
ROU assets obtained in exchange for lease obligations: | ||
Operating leases | $ 131 | $ 0 |
Leases - Maturities of lease liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Operating leases | ||
2024 (excluding the first 3 months) | $ 4,481 | |
2025 | 3,924 | |
2026 | 2,501 | |
2027 | 1,642 | |
2028 | 1,492 | |
Thereafter | 2,813 | |
Total lease payments | 16,853 | |
Less imputed interest | (2,057) | |
Total | 14,796 | $ 16,271 |
Finance leases | ||
2024 (excluding the first 3 months) | 69 | |
2025 | 61 | |
2026 | 37 | |
2027 | 12 | |
2028 | 3 | |
Thereafter | 0 | |
Total lease payments | 182 | |
Less imputed interest | (11) | |
Total | $ 171 | $ 220 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 1,101 | $ 1,933 |
Effective tax rate expense (benefit) (as a percent) | (17.90%) | (10.10%) |
Debt - Schedule of Net Carrying Amount (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Debt Disclosure [Abstract] | ||
Principal | $ 75,000 | $ 75,000 |
Unamortized discount and issuance costs | (2,128) | (2,240) |
Net carrying amount | $ 72,872 | $ 72,760 |
Debt - Schedule of Interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Debt Disclosure [Abstract] | ||
Contractual interest expense | $ 1,153 | $ 843 |
Amortization of discount and issuance costs | 112 | 55 |
Total interest expense related to the Notes | $ 1,265 | $ 898 |
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