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 | ||||||
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
PAGE | ||||||||
PART I. | ||||||||
Item 1. | ||||||||
a) | Condensed Consolidated Balance Sheets as of June 30, 2021 (Unaudited) and December 31, 2020 | |||||||
b) | Condensed Consolidated Statements of Operations (Unaudited) For the Three and Six Months Ended June 30, 2021 and June 30, 2020 | |||||||
c) | Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) For the Three and Six Months Ended June 30, 2021 and June 30, 2020 | |||||||
d) | Condensed Consolidated Statements of Cash Flows (Unaudited) For the Six Months Ended June 30, 2021 and June 30, 2020 | |||||||
e) | Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) For the Three and Six Months Ended June 30, 2021 and June 30, 2020 | |||||||
f) | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
(in thousands, except share and per share data) | June 30, 2021 (unaudited) | December 31, 2020 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
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 | |||||||||||
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 | Six Months Ended | ||||||||||||||||||||||
(in thousands, except share and per share data) | June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | |||||||||||||||||||
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, net | |||||||||||||||||||||||
Other expense (income), net | ( | ||||||||||||||||||||||
Loss before income tax benefit | ( | ( | ( | ( | |||||||||||||||||||
Income tax benefit | ( | ( | ( | ( | |||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net loss per share - Basic | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net loss per share - Diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted average shares - Basic | |||||||||||||||||||||||
Weighted average shares - Diluted |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(in thousands) | June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | |||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Currency translation adjustments, net of income taxes | ( | ( | ( | ||||||||||||||||||||
Comprehensive income (loss) | $ | $ | ( | $ | ( | $ | ( |
Six Months Ended | |||||||||||
(in thousands) | June 30, 2021 | June 30, 2020 | |||||||||
Cash flows from: | |||||||||||
Operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation | |||||||||||
Provisions for bad debts, net of recoveries | ( | ||||||||||
Loss on disposal of assets | |||||||||||
Provision for excess and obsolete inventory | |||||||||||
Deferred income tax benefit | ( | ( | |||||||||
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 | ( | ( | |||||||||
Net cash (used in) provided by operating activities | ( | ||||||||||
Investing activities: | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Proceeds from asset sales | |||||||||||
Proceeds from sale of investments | |||||||||||
Payments for intangible assets | ( | ( | |||||||||
Acquisition of business, net of cash acquired | ( | ||||||||||
Net cash (used in) provided by investing activities | ( | ||||||||||
Financing activities: | |||||||||||
Payments on finance leases | ( | ( | |||||||||
Payments for taxes related to net share settlement of equity awards | ( | ( | |||||||||
Proceeds from issuance of stock related to stock option exercises | |||||||||||
Net cash provided by financing activities | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ( | |||||||||
(Decrease) 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, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Net loss | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||||||||||||||||||
Common stock issued, net of shares withheld for employee taxes | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE MARCH 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Net loss | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||||||||||||||||||
Common stock issued, net of shares withheld for employee taxes | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
BALANCE JUNE 30, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
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, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Net loss | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||||||||||||||||||
Common stock issued, net of shares withheld for employee taxes | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE MARCH 31, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Net loss | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | $ | |||||||||||||||||||||||||||||||||||||||||||
Common stock issued, net of shares withheld for employee taxes | $ | |||||||||||||||||||||||||||||||||||||||||||
BALANCE JUNE 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | ||||||||||||||||||||
Cost of Sales | |||||||||||||||||||||||
Product | $ | $ | $ | $ | |||||||||||||||||||
Service | ( | ||||||||||||||||||||||
Total cost of sales | $ | $ | $ | $ | |||||||||||||||||||
Operating Expenses | |||||||||||||||||||||||
Selling, general and administrative | $ | $ | $ | $ | |||||||||||||||||||
Research and development | |||||||||||||||||||||||
Total operating expenses | $ | $ | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Product sales | ||||||||||||||||||||||||||
Product transferred to customers at a point in time | $ | $ | $ | $ | ||||||||||||||||||||||
Product transferred to customers over time | ||||||||||||||||||||||||||
$ | $ | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Service sales | ||||||||||||||||||||||||||
Service transferred to customers at a point in time | $ | $ | $ | $ | ||||||||||||||||||||||
Service transferred to customers over time | ||||||||||||||||||||||||||
$ | $ | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Total sales to external customers | ||||||||||||||||||||||||||
Americas (1) | $ | $ | $ | $ | ||||||||||||||||||||||
EMEA (1) | ||||||||||||||||||||||||||
APAC (1) | ||||||||||||||||||||||||||
$ | $ | $ | $ |
As of June 30, 2021 | As of December 31, 2020 | ||||||||||
Accounts receivable | $ | $ | |||||||||
Allowance for credit losses | ( | ( | |||||||||
Total | $ | $ |
Six Months Ended June 30, 2021 | |||||
Beginning balance of the allowance for credit losses | $ | ( | |||
Current period provision for expected credit losses, net of recoveries | |||||
Charge-offs of amounts previously written off | |||||
Ending balance of the allowance for credit losses | $ | ( |
As of June 30, 2021 | As of December 31, 2020 | ||||||||||
Raw materials | $ | $ | |||||||||
Finished goods | |||||||||||
Inventories, net | $ | $ | |||||||||
Service and sales demonstration inventory, net | $ | $ |
Three Months Ended | |||||||||||||||||||||||
June 30, 2021 | June 30, 2020 | ||||||||||||||||||||||
Shares | Per-Share Amount | Shares | Per-Share Amount | ||||||||||||||||||||
Basic loss per share | $ | ( | $ | ( | |||||||||||||||||||
Effect of dilutive securities | |||||||||||||||||||||||
Diluted loss per share | $ | ( | $ | ( | |||||||||||||||||||
Six Months Ended | |||||||||||||||||||||||
June 30, 2021 | June 30, 2020 | ||||||||||||||||||||||
Shares | Per-Share Amount | Shares | Per-Share Amount | ||||||||||||||||||||
Basic loss per share | $ | ( | $ | ( | |||||||||||||||||||
Effect of dilutive securities | |||||||||||||||||||||||
Diluted loss per share | $ | ( | $ | ( | |||||||||||||||||||
As of June 30, 2021 | As of December 31, 2020 | ||||||||||
Accrued compensation and benefits | $ | $ | |||||||||
Accrued restructuring costs | |||||||||||
Accrued warranties | |||||||||||
Professional and legal fees | |||||||||||
Taxes other than income | |||||||||||
General services administration contract contingent liability (see Note 12) | |||||||||||
Other accrued liabilities | |||||||||||
$ | $ |
Six Months Ended | |||||||||||
June 30, 2021 | June 30, 2020 | ||||||||||
Balance, beginning of period | $ | $ | |||||||||
Provision for warranty expense | |||||||||||
Fulfillment of warranty obligations | ( | ( | |||||||||
Balance, end of period | $ | $ |
As of June 30, 2021 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
Liabilities: | |||||||||||||||||
Contingent consideration (1) | $ | $ | $ | ||||||||||||||
Total | $ | $ | $ | ||||||||||||||
As of December 31, 2020 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
Liabilities: | |||||||||||||||||
Contingent consideration (1) | $ | $ | $ | ||||||||||||||
Total | $ | $ | $ |
Severance and other benefits | Professional fees and other related charges | Total | |||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | ||||||||||||||
Additions charged to expense | |||||||||||||||||
Cash payments | ( | ( | ( | ||||||||||||||
Balance at June 30, 2021 | |||||||||||||||||
Balance at February 14, 2020 | $ | $ | $ | ||||||||||||||
Additions charged to expense | |||||||||||||||||
Cash payments | ( | ( | ( | ||||||||||||||
Balance at June 30, 2020 |
Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | ||||||||||||||||||||
Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
Finance lease cost: | |||||||||||||||||||||||
Amortization of ROU assets | |||||||||||||||||||||||
Interest on lease liabilities | |||||||||||||||||||||||
Total finance lease cost | $ | $ | $ | $ | |||||||||||||||||||
As of | As of | ||||||||||
June 30, 2021 | December 31, 2020 | ||||||||||
Operating leases: | |||||||||||
Operating lease right-of-use assets | $ | $ | |||||||||
$ | $ | ||||||||||
$ | $ | ||||||||||
Finance leases: | |||||||||||
$ | $ | ||||||||||
Accumulated depreciation | ( | ( | |||||||||
Property and equipment, net | $ | $ | |||||||||
Current finance lease liabilities | $ | $ | |||||||||
Finance lease liabilities - less current portion | |||||||||||
Total finance lease liabilities | $ | $ | |||||||||
Weighted Average Remaining Lease Term (in years): | |||||||||||
Operating leases | |||||||||||
Finance leases | |||||||||||
Weighted Average Discount Rate: | |||||||||||
Operating leases | % | % | |||||||||
Finance leases | % | % |
Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | ||||||||||
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 | |||||||||
2021 (excluding the first 6 months) | $ | $ | |||||||||
2022 | |||||||||||
2023 | |||||||||||
2024 | |||||||||||
2025 | |||||||||||
Thereafter | |||||||||||
Total lease payments | $ | $ | |||||||||
Less imputed interest | ( | ( | |||||||||
Total | $ | $ |
Fair Value (Preliminary) | ||||||||
Tangible assets acquired: | ||||||||
Accounts receivable | $ | |||||||
Property, plant and equipment, net | ||||||||
Other assets | ||||||||
Total assets acquired | ||||||||
Liabilities assumed: | ||||||||
Accounts payable and accrued liabilities | ( | |||||||
Deferred revenue | ( | |||||||
Total liabilities assumed | ( | |||||||
Intangible assets | ||||||||
Net deferred tax asset | ||||||||
Net assets acquired | ||||||||
Goodwill | ||||||||
Purchase price paid, net of cash acquired | $ |
Amount | Weighted Average Life (Years) | ||||||||||
Brand | $ | ||||||||||
Technology | |||||||||||
Customer relationships | |||||||||||
Fair value of intangible assets acquired | $ |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | 2021 | % of Sales | 2020 | % of Sales | 2021 | % of Sales | 2020 | % of Sales | |||||||||||||||||||||||||||||||||||||||
Sales | |||||||||||||||||||||||||||||||||||||||||||||||
Product | $ | 60,275 | 73.4 | % | $ | 42,259 | 69.8 | % | $ | 114,910 | 72.5 | % | $ | 98,784 | 70.5 | % | |||||||||||||||||||||||||||||||
Service | 21,835 | 26.6 | % | 18,305 | 30.2 | % | 43,531 | 27.5 | % | 41,295 | 29.5 | % | |||||||||||||||||||||||||||||||||||
Total sales | 82,110 | 100.0 | % | 60,564 | 100.0 | % | 158,441 | 100.0 | % | 140,079 | 100.0 | % | |||||||||||||||||||||||||||||||||||
Cost of Sales | |||||||||||||||||||||||||||||||||||||||||||||||
Product | 25,455 | 31.0 | % | 21,333 | 35.2 | % | 50,259 | 31.7 | % | 44,399 | 31.7 | % | |||||||||||||||||||||||||||||||||||
Service | 11,173 | 13.6 | % | 10,335 | 17.1 | % | 22,293 | 14.1 | % | 22,911 | 16.4 | % | |||||||||||||||||||||||||||||||||||
Total cost of sales | 36,628 | 44.6 | % | 31,668 | 52.3 | % | 72,552 | 45.8 | % | 67,310 | 48.1 | % | |||||||||||||||||||||||||||||||||||
Gross Profit | 45,482 | 55.4 | % | 28,896 | 47.7 | % | 85,889 | 54.2 | % | 72,769 | 51.9 | % | |||||||||||||||||||||||||||||||||||
Operating Expenses | |||||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 33,594 | 40.9 | % | 30,036 | 49.6 | % | 66,942 | 42.3 | % | 66,360 | 47.4 | % | |||||||||||||||||||||||||||||||||||
Research and development | 11,760 | 14.3 | % | 10,186 | 16.8 | % | 23,733 | 15.0 | % | 20,601 | 14.7 | % | |||||||||||||||||||||||||||||||||||
Restructuring costs | 779 | 0.9 | % | 636 | 1.1 | % | 2,303 | 1.5 | % | 14,324 | 10.2 | % | |||||||||||||||||||||||||||||||||||
Total operating expenses | 46,133 | 56.2 | % | 40,858 | 67.5 | % | 92,978 | 58.7 | % | 101,285 | 72.3 | % | |||||||||||||||||||||||||||||||||||
Loss from operations | (651) | (0.8) | % | (11,962) | (19.8) | % | (7,089) | (4.5) | % | (28,516) | (20.4) | % | |||||||||||||||||||||||||||||||||||
Other (income) expense | |||||||||||||||||||||||||||||||||||||||||||||||
Interest expense, net | 39 | — | % | 212 | 0.4 | % | 49 | — | % | 246 | 0.2 | % | |||||||||||||||||||||||||||||||||||
Other expense (income), net | 883 | 1.1 | % | 117 | 0.2 | % | (732) | (0.5) | % | 590 | 0.4 | % | |||||||||||||||||||||||||||||||||||
Loss before income tax benefit | (1,573) | (1.9) | % | (12,291) | (20.3) | % | (6,406) | (4.0) | % | (29,352) | (21.0) | % | |||||||||||||||||||||||||||||||||||
Income tax benefit | (397) | (0.5) | % | (3,359) | (5.5) | % | (2,009) | (1.3) | % | (5,597) | (4.0) | % | |||||||||||||||||||||||||||||||||||
Net loss | $ | (1,176) | (1.4) | % | $ | (8,932) | (14.7) | % | $ | (4,397) | (2.8) | % | $ | (23,755) | (17.0) | % |
Annual Cash Retainer: | $ | 60,000 | ||||||||||||
Additional Annual Retainers: | ||||||||||||||
Nominating, Governance and Sustainability Committee Chairperson | $ | 20,000 | ||||||||||||
Audit Committee Chairperson | $ | 20,000 | ||||||||||||
Talent, Development, and Compensation Committee Chairperson | $ | 20,000 | ||||||||||||
Non-Employee Chairman | $ | 75,000 | ||||||||||||
Initial Equity Grant | $ | 100,000 | (a) | |||||||||||
Annual Equity Grant | $ | 175,000 | (b) |
INDEX TO EXHIBITS | ||||||||
10.1** | ||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) | |||||||
FARO Technologies, Inc. | |||||||||||
(Registrant) | |||||||||||
Date: July 28, 2021 | By: | /s/ Allen Muhich | |||||||||
Name: Allen Muhich | |||||||||||
Title: Chief Financial Officer | |||||||||||
(Duly Authorized Officer and Principal Financial Officer) |
Annual Cash Retainer: | $ | 60,000 | ||||||||||||
Additional Annual Retainers: | ||||||||||||||
Nominating, Governance and Sustainability Committee Chairperson | $ | 20,000 | ||||||||||||
Audit Committee Chairperson | $ | 20,000 | ||||||||||||
Talent, Development, and Compensation Committee Chairperson | $ | 20,000 | ||||||||||||
Non-Employee Chairman | $ | 75,000 | ||||||||||||
Initial Equity Grant | $ | 100,000 | (a) | |||||||||||
Annual Equity Grant | $ | 175,000 | (b) |
/s/ Michael Burger | ||
Name: Michael Burger Title: President and Chief Executive Officer (Principal Executive Officer) |
/s/ Allen Muhich | ||
Name: Allen Muhich Title: Chief Financial Officer (Principal Financial Officer) |
/s/ Michael Burger | ||
Name: Michael Burger Title: President and Chief Executive Officer (Principal Executive Officer) |
/s/ Allen Muhich | ||
Name: Allen Muhich Title: Chief Financial Officer (Principal Financial Officer) |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jun. 30, 2021 |
Dec. 31, 2020 |
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Statement of Financial Position [Abstract] | ||
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) | 19,557,240 | 18,174,873 |
Common stock, shares outstanding (in shares) | 19,384,350 | 17,990,707 |
Treasury stock, shares (in shares) | 1,382,367 | 1,393,643 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
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Sales | $ 82,110 | $ 60,564 | $ 158,441 | $ 140,079 |
Cost of Sales | 36,628 | 31,668 | 72,552 | 67,310 |
Gross Profit | 45,482 | 28,896 | 85,889 | 72,769 |
Operating Expenses | ||||
Selling, general and administrative | 33,594 | 30,036 | 66,942 | 66,360 |
Research and development | 11,760 | 10,186 | 23,733 | 20,601 |
Restructuring costs | 779 | 636 | 2,303 | 14,324 |
Total operating expenses | 46,133 | 40,858 | 92,978 | 101,285 |
Loss from operations | (651) | (11,962) | (7,089) | (28,516) |
Other (income) expense | ||||
Interest expense, net | 39 | 212 | 49 | 246 |
Other expense (income), net | 883 | 117 | (732) | 590 |
Loss before income tax benefit | (1,573) | (12,291) | (6,406) | (29,352) |
Income tax benefit | (397) | (3,359) | (2,009) | (5,597) |
Net loss | $ (1,176) | $ (8,932) | $ (4,397) | $ (23,755) |
Net loss per share - Basic (in dollars per share) | $ (0.06) | $ (0.50) | $ (0.24) | $ (1.34) |
Net loss per share - Diluted (in dollars per share) | $ (0.06) | $ (0.50) | $ (0.24) | $ (1.34) |
Weighted average shares - Basic (in shares) | 18,161,110 | 17,747,739 | 18,133,368 | 17,710,014 |
Weighted average shares - Diluted (in shares) | 18,161,110 | 17,747,739 | 18,133,368 | 17,710,014 |
Product | ||||
Sales | $ 60,275 | $ 42,259 | $ 114,910 | $ 98,784 |
Cost of Sales | 25,455 | 21,333 | 50,259 | 44,399 |
Service | ||||
Sales | 21,835 | 18,305 | 43,531 | 41,295 |
Cost of Sales | $ 11,173 | $ 10,335 | $ 22,293 | $ 22,911 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
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Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (1,176) | $ (8,932) | $ (4,397) | $ (23,755) |
Currency translation adjustments, net of income taxes | 4,867 | (1,688) | (5,307) | (5,466) |
Comprehensive income (loss) | $ 3,691 | $ (10,620) | $ (9,704) | $ (29,221) |
Description of Business |
6 Months Ended |
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Jun. 30, 2021 | |
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 3D metrology, architecture, engineering and construction (“AEC”) and public safety analytics markets. We enable our customers to capture, measure, manipulate, interact with and share data from the physical world in a virtual environment and then translate this information back into the physical domain. Our technology enables highly accurate 3D measurement, imaging, comparison and projection of parts and complex structures within production, assembly and quality assurance processes. 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, 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 across a range of industries including automotive, aerospace, metal and machine fabrication, surveying, architecture, engineering and construction, public safety forensics and other industries. COVID-19 and Impact On Our Business Our business is significantly vulnerable to the economic effects of pandemics and other public health crises, including the ongoing novel coronavirus (“COVID-19”) pandemic that has surfaced in virtually every country of our global operating footprint. During 2020, we experienced a significant decline in the demand for our products and services across all of our served markets as a result of the impact of the spread of COVID-19. While COVID-19 has negatively impacted demand for our products and services overall, it has provided us with the opportunity to adapt to operating in a virtual environment. We significantly increased the utilization of our existing virtual sales demonstration infrastructure which has enabled ongoing customer product education. We launched an updated web-based learning system with FARO Academy that has resulted in an increase in the attendance of our virtual training and product information seminars as our customers take advantage of the opportunity to remotely participate and to better understand the capabilities of our products and software offerings. We continue to assess the ongoing impact of COVID-19 on our business results and remain committed to taking actions to address the health and safety of our employees and customers, as well as the negative effects from demand disruption and production impacts, including, but not limited to, the following: •Operating our business with a focus on our employee health and safety, which includes minimizing travel, implementing remote work policies, maintaining employee distancing and enhancing the sanitation of all of our facilities; •Monitoring of our liquidity, reduction of supply flows into our manufacturing facilities, disciplined inventory management, and limiting capital expenditures; and •Continuously reviewing our financial strategy to enhance financial flexibility in these volatile financial markets. We continue to maintain a strong capital structure with a cash balance of $133.3 million and no debt as of June 30, 2021. We believe that our liquidity position is adequate to meet our projected needs in the reasonably foreseeable future. Future developments, such as the potential resurgence of COVID-19 in countries that have begun to recover from the early impact of the pandemic and actions taken by governments in response to future resurgence, are highly uncertain. Therefore, the Company is not able to predict the extent to which the COVID-19 outbreak continues to impact the Company’s results of operations and financial conditions.
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Principles of Consolidation |
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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 loss.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 statement of operations:
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Basis of Presentation |
6 Months Ended |
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Jun. 30, 2021 | |
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 and six months ended June 30, 2021 are not necessarily indicative of results that may be expected for the year ending December 31, 2021 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, 2020. The accompanying December 31, 2020 condensed consolidated balance sheet has been derived from those audited consolidated financial statements.
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Impact of Recently Issued Accounting Pronouncements |
6 Months Ended |
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Jun. 30, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Impact of Recently Issued Accounting Pronouncements | IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Impact of Recently Adopted Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes which amends and aims to simplify accounting disclosure requirements regarding a number of topics including: intraperiod tax allocation, accounting for deferred taxes when there are changes in consolidation of certain investments, tax basis step up in an acquisition and the application of effective rate changes during interim periods, amongst other improvements. We adopted ASU 2019-12 effective as of January 1, 2021, and the adoption of the new guidance did not have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13, and subsequent related amendments to ASU 2016-13, replace the existing incurred loss impairment model with an expected loss model that requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. We adopted ASU 2016-13 effective as of January 1, 2020, and the adoption of the new guidance did not have a material impact on our consolidated financial statements.
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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 (in thousands, unaudited):
The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers (in thousands, unaudited):
(1) Regions represent North America and South America (Americas); Europe, the Middle East, and Africa (EMEA); and the 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 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 June 30, 2021, the deferred cost asset related to deferred commissions was approximately $3.7 million. For classification purposes, $2.3 million and $1.4 million are comprised within the Prepaid expenses and other current assets and Other long-term assets, respectively, on our consolidated balance sheet as of June 30, 2021. As of December 31, 2020, the deferred cost asset related to deferred commissions was approximately $4.1 million. For classification purposes, $2.6 million and $1.5 million were comprised within the Prepaid expenses and other current assets and Other long-term assets, respectively, on our consolidated balance sheet as of December 31, 2020. The unearned service revenue liabilities reported on our condensed consolidated balance sheets reflect the contract liabilities to satisfy the remaining performance obligations for hardware service contracts 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 hardware service contracts and software maintenance contract liabilities. The unearned service revenues - less 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 hardware service contracts 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 and six months ended June 30, 2021, we recognized $9.6 million and $21.6 million of revenue, respectively, that was deferred on our consolidated balance sheet as of December 31, 2020. During the three and six months ended June 30, 2020, we recognized $9.8 million and $22.0 million of revenue, respectively, that was deferred on our consolidated balance sheet as of December 31, 2019. The nature of certain of our contracts gives rise to variable consideration, primarily related to an allowance for sales returns and contracts with certain government customers. 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 June 30, 2021 and June 30, 2020 was approximately $0.2 million and $0.1 million, respectively. 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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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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Inventories | INVENTORIESInventories 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 hardware service contract 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 its 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 loss per share is computed by dividing net loss by the weighted average number of shares outstanding. Diluted 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, restricted stock units and performance-based awards. Our potential common stock is included in the diluted earnings per share calculation when adding such potential common stock would not be anti-dilutive. Performance-based awards are included in the computation of diluted earnings per share only to the extent that the underlying performance 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. For the three and six months ended June 30, 2021, there were approximately 425,455 shares issuable upon the exercise of options and the contingent vesting of performance-based restricted stock units that were excluded from the dilutive calculations, as they were anti-dilutive. For the three and six months ended June 30, 2020, there were approximately 767,458 issuable upon the exercise of options that were excluded from the dilutive calculations, as they were anti-dilutive. A reconciliation of the number of common shares used in the calculation of basic and diluted 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 |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS Our financial instruments include cash and cash equivalents, short-term investments, accounts receivable, customer deposits, accounts payable and accrued liabilities. The carrying amounts of such financial instruments approximate their fair value due to the short-term nature of these instruments. Liabilities measured at fair value on a recurring basis are categorized in the tables below based upon the lowest level of significant input to the valuations:
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Restructuring |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | RESTRUCTURING In the first quarter of 2020, our Board of Directors approved a global restructuring plan (the “Restructuring Plan”), which is intended to support our strategic plan in an effort to improve operating performance and ensure that we are appropriately structured and resourced to deliver increased and sustainable value to our shareholders and customers. Key activities under the Restructuring Plan include a continued focus on efficiency and cost-saving efforts, which includes decreasing total headcount by approximately 500 employees upon the completion of the Restructuring Plan. These activities are expected to be substantially completed by the end of 2021. Pre-tax charges of approximately $49 million were recorded in the fourth quarter of 2019 in connection with the implementation of our new strategic plan and included the following: •$21.2 million impairment of goodwill; •$12.8 million charge, increasing our reserve for excess and obsolete inventory; •$10.5 million impairment of intangible assets associated with recent acquisitions; •$1.4 million impairment of intangible assets related to capitalized patents; •$3.4 million impairment of other assets and other charges. In connection with the Restructuring Plan, we recorded a pre-tax charge of approximately $15.8 million during the year ended December 31, 2020 primarily consisting of severance and related benefits, professional fees and other related charges and costs including a non-cash expense of $0.4 million related to the disposal of our Photonics business and 3D Design related assets. We received $0.7 million in cash payments for the disposal of our Photonics business and 3D Design related assets in the second quarter of 2020. We are continuing to execute our cost reduction initiatives to achieve our 20% target EBITDA margins that could result in pre-tax charges in the range of $5 million to $15 million for fiscal year 2021. 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 will provide manufacturing services for the Company’s measurement device products currently manufactured by the Company at the Company’s Lake Mary, Florida, Exton, Pennsylvania, and Stuttgart, Germany manufacturing sites. A phased transition to a Sanmina production facility is expected to be completed over the next twelve months as part of our cost reduction initiative. The Company expects to incur a cash charge of approximately $6 million in the second half of 2021, primarily consisting of cash severance. Actual results, including the costs of the Restructuring Plan, may differ materially from our expectations, resulting in our inability to realize the expected benefits of the Restructuring Plan and our new strategic plan and negatively impacting our ability to execute our future plans and strategies, which could have a material adverse effect on our business, financial condition and results of operations. In connection with the Restructuring Plan, we paid $13.1 million during the year ended December 31, 2020 and $3.5 million during the six months ended June 30, 2021, primarily consisting of severance and related benefits. Activity related to the accrued restructuring charge and cash payments for the six months ended June 30, 2021 was as follows:
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Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2021 | |
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 June 30, 2021, we had approximately $40.9 million in purchase commitments that are expected to be delivered within the next 12 months. Legal Proceedings — We are not involved in any legal proceedings, including routine litigation arising in the normal course of business, that we believe will have a material adverse effect on our business, financial condition or results of operations. U.S. Government Contracting Matter — We have sold our products and related services to the U.S. Government (the “Government”) under General Services Administration (“GSA”) Federal Supply Schedule contracts (the “GSA Contracts”) since 2002 and are currently selling our products and related services to the Government under two such GSA Contracts. Each GSA Contract is subject to extensive legal and regulatory requirements and includes, among other provisions, a price reduction clause (the “Price Reduction Clause”), which generally requires us to reduce the prices billed to the Government under the GSA Contracts to correspond to the lowest prices billed to certain benchmark customers. Late in the fourth quarter of 2018, during an internal review we preliminarily determined that certain of our pricing practices may have resulted in the Government being overcharged under the Price Reduction Clauses of the GSA Contracts (the “GSA Matter”). As a result, we performed remediation efforts, including but not limited to, the identification of additional controls and procedures to ensure future compliance with the pricing and other requirements of the GSA Contracts. We also retained outside legal counsel and forensic accountants to assist with these efforts and to conduct a comprehensive review of our pricing and other practices under the GSA Contracts (the “Review”). On February 14, 2019, we reported the GSA Matter to the GSA and its Office of Inspector General. Effective as of February 25, 2021, as a result of the review, we entered into a settlement agreement with the GSA. Pursuant to the settlement agreement, we agreed to, among other things, pay to the GSA $12.3 million in full and final satisfaction of any and all claims, causes of actions, appeals and the like, including damages, costs, attorney's fees and interest arising under or related to the GSA Matter. As of March 31, 2021, we settled and paid the full $12.3 million and no longer have any outstanding liability related to this matter.
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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 ten 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 cost for the three months ended June 30, 2021 and June 30, 2020 were both less than $0.1 million. Our short-term lease cost for the six months ended June 30, 2020 and June 30, 2019 was $0.1 million and less than $0.1 million, respectively. 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 ten 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 cost for the three months ended June 30, 2021 and June 30, 2020 were both less than $0.1 million. Our short-term lease cost for the six months ended June 30, 2020 and June 30, 2019 was $0.1 million and less than $0.1 million, respectively. 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 |
6 Months Ended |
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Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES For the three months ended June 30, 2021, we recorded an income tax benefit of $0.4 million compared with income tax benefit of $3.4 million for three months ended June 30, 2020, respectively. Our effective tax rate was 25.2% for the three months ended June 30, 2021 compared with 27.3% in the prior year period. The change in our income benefit was primarily due to a lower pretax loss during the second quarter of 2021. The change in our effective tax rate was primarily associated with discrete tax items and a shift in the geographic mix of pretax income expected for the full year 2021. 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 pretax and taxable income or loss and the mix of jurisdictions to which they relate, as well as the amount of pretax income or loss recognized during the quarter.
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Business Combinations |
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations | BUSINESS COMBINATIONS On June 4, 2021, we acquired all of the outstanding shares of Holobuilder, Inc. (“Holobuilder”), a company focused on 3D photogrammetry-based technology for a purchase price of $34 million paid, net of cash acquired, subject to certain additional post-closing adjustments. We believe this acquisition enables the Company to provide reality-capture photo documentation and added remote access capability for industries such as construction management further expanding the Company's Digital Twin solution portfolio. The results of Holobuilder’s operations as of and after the date of acquisition have been included in our condensed consolidated financial statements as of June 30, 2021, and for the three and six months ended June 30, 2021. The acquisition of Holobuilder constitutes a business combination as defined by ASC Topic 805, Business Combinations. Accordingly, the assets acquired and liabilities assumed were recorded at their fair values on the date of acquisition. The purchase price allocations below represent our preliminary determination of the fair value of the assets acquired and liabilities assumed for the acquisitions. Following is a preliminary summary of our allocations of the purchase price to the fair values of the assets acquired and liabilities assumed as of the date of the acquisition:
The goodwill arising from the acquisition consists largely of the expected synergies from combining operations as well as the value of the workforce. This goodwill is not tax deductible. Acquisition and integration costs are not included as components of consideration transferred, but are recorded as expense in the period in which such costs are incurred. To date, we have incurred $0.3 million of acquisition or integration costs for the Holobuilder acquisition. Pro forma financial results for Holobuilder have not been presented because the effects of these transactions, individually and in the aggregate, were not material to our consolidated financial results. Following are the details of the preliminary purchase price allocated to the intangible assets acquired for the Holobuilder acquisition:
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Subsequent Events |
6 Months Ended |
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Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS 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 will provide manufacturing services for the Company’s measurement device products currently manufactured by the Company at the Company’s Lake Mary, Florida, Exton, Pennsylvania, and Stuttgart, Germany manufacturing sites. The initial term of the Agreement is three years (“Initial Term”) with automatic renewals of one year terms unless either party provides notice to the other at least twelve months prior to the end of the then-current term. The Agreement may be terminated by either party for cause and either party may terminate the Agreement for convenience after the end of the Initial Term with prior notice of twelve months. The execution of the Agreement, in connection with the Restructuring plan, does not impact the Company's previously disclosed estimate of total restructuring costs and remains inline with previous expectation.
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Principles of Consolidation (Policies) |
6 Months Ended |
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Jun. 30, 2021 | |
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 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. |
Impact of Recently Adopted Accounting Standards | Impact of Recently Adopted Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes which amends and aims to simplify accounting disclosure requirements regarding a number of topics including: intraperiod tax allocation, accounting for deferred taxes when there are changes in consolidation of certain investments, tax basis step up in an acquisition and the application of effective rate changes during interim periods, amongst other improvements. We adopted ASU 2019-12 effective as of January 1, 2021, and the adoption of the new guidance did not have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13, and subsequent related amendments to ASU 2016-13, replace the existing incurred loss impairment model with an expected loss model that requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. We adopted ASU 2016-13 effective as of January 1, 2020, and the adoption of the new guidance did not have a material impact on our consolidated financial statements.
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Inventory | 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 hardware service contract 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 its remaining life, typically three years. |
Principles of Consolidation (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount | The following table summarizes total stock-based compensation expense for each of the line items on our condensed consolidated statement of operations:
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Revenues (Tables) |
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 (in thousands, unaudited):
The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers (in thousands, unaudited):
(1) Regions represent North America and South America (Americas); Europe, the Middle East, and Africa (EMEA); and the Asia-Pacific (APAC).
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Accounts Receivable (Tables) |
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable | Accounts receivable consist of the following:
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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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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | Inventories consist of the following:
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Loss Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 loss per share is presented below:
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Accrued Liabilities (Tables) |
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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 of Financial Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities Measured at Fair Value on a Recurring Basis | Liabilities measured at fair value on a recurring basis are categorized in the tables below based upon the lowest level of significant input to the valuations:
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Restructuring (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | Activity related to the accrued restructuring charge and cash payments for the six months ended June 30, 2021 was as follows:
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Leases (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Cost and Supplemental Cash Flow Information Related to Leases | The components of lease expense were as follows:
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Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows:
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Operating Lease, Liability, Maturity | Maturities of lease liabilities are as follows:
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Finance Lease, Liability, Maturity | Maturities of lease liabilities are as follows:
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Business Combinations (Tables) |
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Values of Assets Acquired and Liabilities Assumed for Acquisitions | Following is a preliminary summary of our allocations of the purchase price to the fair values of the assets acquired and liabilities assumed as of the date of the acquisition:
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Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | Following are the details of the preliminary purchase price allocated to the intangible assets acquired for the Holobuilder acquisition:
|
Description of Business (Details) |
Jun. 30, 2021
USD ($)
|
---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Cash | $ 133,300,000 |
Debt | $ 0 |
Revenues - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Dec. 31, 2020 |
|
Disaggregation of Revenue [Line Items] | |||||
Recognized service revenue | $ 9.6 | $ 9.8 | $ 21.6 | $ 22.0 | |
Refund liability | 0.2 | $ 0.1 | $ 0.2 | $ 0.1 | |
Minimum | |||||
Disaggregation of Revenue [Line Items] | |||||
Extended product warranty term | 1 month | ||||
Maximum | |||||
Disaggregation of Revenue [Line Items] | |||||
Extended product warranty term | 3 years | ||||
Commissions | |||||
Disaggregation of Revenue [Line Items] | |||||
Capitalized contract cost, gross | 3.7 | $ 3.7 | $ 4.1 | ||
Prepaid expenses and other current assets | Commissions | |||||
Disaggregation of Revenue [Line Items] | |||||
Capitalized contract cost, gross | 2.3 | 2.3 | 2.6 | ||
Other long-term assets | Commissions | |||||
Disaggregation of Revenue [Line Items] | |||||
Capitalized contract cost, gross | $ 1.4 | $ 1.4 | $ 1.5 |
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Receivables [Abstract] | ||
Accounts receivable | $ 63,601 | $ 68,504 |
Allowance for credit losses | (3,635) | (3,888) |
Total | $ 59,966 | $ 64,616 |
Accounts Receivable - Credit Loss (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2021
USD ($)
| |
Receivables [Abstract] | |
Beginning balance of the allowance for credit losses | $ (3,888) |
Current period provision for expected credit losses, net of recoveries | 43 |
Charge-offs of amounts previously written off | 210 |
Ending balance of the allowance for credit losses | $ (3,635) |
Inventories - Narrative (Details) |
6 Months Ended |
---|---|
Jun. 30, 2021 | |
Property, Plant and Equipment [Line Items] | |
Demonstration inventory shelf life (in years) | 3 years |
Refurbished demonstration inventory selling period (in months) | 12 months |
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 |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 32,984 | $ 29,955 |
Finished goods | 18,449 | 17,436 |
Inventories, net | 51,433 | 47,391 |
Service and sales demonstration inventory, net | $ 31,477 | $ 31,831 |
Loss Per Share - Narrative (Details) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Earnings Per Share [Abstract] | ||||
Antidilutive securities (in shares) | 425,455 | 767,458 | 425,455 | 767,458 |
Loss Per Share - Reconciliation of Number of Common Shares Used in Calculation of Basic and Diluted Earnings Per Share (EPS) (Details) - $ / shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Earnings Per Share [Abstract] | ||||
Basic loss per share (in shares) | 18,161,110 | 17,747,739 | 18,133,368 | 17,710,014 |
Effect of dilutive securities (in shares) | 0 | 0 | 0 | 0 |
Diluted loss (in shares) | 18,161,110 | 17,747,739 | 18,133,368 | 17,710,014 |
Basic loss (in dollars per share) | $ (0.06) | $ (0.50) | $ (0.24) | $ (1.34) |
Effect of dilutive securities (in dollars per share) | 0 | 0 | 0 | 0 |
Diluted loss (in dollars per share) | $ (0.06) | $ (0.50) | $ (0.24) | $ (1.34) |
Accrued Liabilities - Schedule of Accrued liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|
Payables and Accruals [Abstract] | ||||
Accrued compensation and benefits | $ 17,392 | $ 17,457 | ||
Accrued restructuring costs | 1,115 | 2,347 | ||
Accrued warranties | 1,616 | 1,683 | $ 1,622 | $ 2,090 |
Professional and legal fees | 1,993 | 1,810 | ||
Taxes other than income | 4,402 | 5,013 | ||
General services administration contract contingent liability (see Note 12) | 0 | 12,325 | ||
Other accrued liabilities | 1,737 | 1,958 | ||
Accrued liabilities | $ 28,255 | $ 42,593 |
Accrued Liabilities - Activity Related to Accrued Warranties (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||
Balance, beginning of period | $ 1,683 | $ 2,090 |
Provision for warranty expense | 1,284 | 1,174 |
Fulfillment of warranty obligations | (1,351) | (1,642) |
Balance, end of period | $ 1,616 | $ 1,622 |
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2021 |
Dec. 31, 2020 |
|
Level 1 | Fair Value, Measurements, Recurring | ||
Liabilities: | ||
Contingent consideration | $ 0 | $ 0 |
Total | 0 | 0 |
Level 2 | Fair Value, Measurements, Recurring | ||
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total | 0 | 0 |
Level 3 | Fair Value, Measurements, Recurring | ||
Liabilities: | ||
Contingent consideration | 1,047 | 1,056 |
Total | 1,047 | $ 1,056 |
Monte Carlo Simulation Valuation Model | ||
Liabilities: | ||
Undiscounted maximum payment under the contingent consideration arrangements | $ 1,200 |
Commitments and Contingencies (Details) $ in Millions |
4 Months Ended | 6 Months Ended | 234 Months Ended | |
---|---|---|---|---|
Mar. 31, 2021
USD ($)
|
Jun. 30, 2021
USD ($)
|
Jun. 30, 2021
USD ($)
|
Jun. 30, 2021
USD ($)
contract
|
|
Commitments and Contingencies [Line Items] | ||||
Purchase commitment, due in next twelve months | $ 40.9 | $ 40.9 | $ 40.9 | |
Number of contracts | contract | 2 | |||
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 | |||
Government Contract | ||||
Commitments and Contingencies [Line Items] | ||||
Settlement paid | $ 12.3 | $ 12.3 |
Leases - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
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 | $ 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) | 10 years |
Leases - Lease Cost and Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 1,922 | $ 2,006 | $ 3,891 | $ 4,061 |
Finance lease cost: | ||||
Amortization of ROU assets | 78 | 78 | 161 | 160 |
Interest on lease liabilities | 4 | 8 | 10 | 17 |
Total finance lease cost | $ 82 | $ 86 | $ 171 | $ 177 |
Leases - Supplemental Cash Flows (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 3,827 | $ 4,141 |
Operating cash flows from finance leases | 9 | 17 |
Financing cash flows from finance leases | 167 | 160 |
ROU assets obtained in exchange for lease obligations: | ||
Operating leases | $ 614 | $ 424 |
Leases - Maturities of lease liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Operating leases | ||
2021 (excluding the first 6 months) | $ 6,304 | |
2022 | 5,179 | |
2023 | 4,517 | |
2024 | 3,998 | |
2025 | 2,887 | |
Thereafter | 6,963 | |
Total lease payments | 29,848 | |
Less imputed interest | (4,936) | |
Total | 24,912 | $ 27,542 |
Finance leases | ||
2021 (excluding the first 6 months) | 198 | |
2022 | 55 | |
2023 | 32 | |
2024 | 11 | |
2025 | 3 | |
Thereafter | 0 | |
Total lease payments | 299 | |
Less imputed interest | (14) | |
Total | $ 285 | $ 424 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax benefit | $ 397 | $ 3,359 | $ 2,009 | $ 5,597 |
Effective tax rate | 25.20% | 27.30% |
Business Combinations - Narrative (Details) - USD ($) $ in Thousands |
1 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 04, 2021 |
Jun. 30, 2021 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Asset Acquisition [Line Items] | ||||
Acquisition of business, net of cash acquired | $ 33,908 | $ 0 | ||
Holobuilder | ||||
Asset Acquisition [Line Items] | ||||
Acquisition of business, net of cash acquired | $ 34,000 | |||
Amortization of acquisition costs | $ 300 |
Business Combinations - Fair Values of Assets Acquired and Liabilities Assumed for Acquisitions (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Jun. 04, 2021 |
Dec. 31, 2020 |
---|---|---|---|
Liabilities assumed: | |||
Goodwill | $ 81,702 | $ 57,541 | |
Holobuilder | |||
Tangible assets acquired: | |||
Accounts receivable | $ 192 | ||
Property, plant and equipment, net | 46 | ||
Other assets | 7 | ||
Total assets acquired | 245 | ||
Liabilities assumed: | |||
Accounts payable and accrued liabilities | (56) | ||
Deferred revenue | (2,732) | ||
Total liabilities assumed | (2,788) | ||
Intangible assets | 10,470 | ||
Net deferred tax asset | 987 | ||
Net assets acquired | 8,914 | ||
Goodwill | 24,994 | ||
Purchase price paid, net of cash acquired | $ 33,908 |
Business Combinations - Finite-Lived Intangible Assets Acquired as Part of Business Combination (Details) - Holobuilder $ in Thousands |
Jun. 04, 2021
USD ($)
|
---|---|
Asset Acquisition [Line Items] | |
Intangible assets acquired | $ 10,470 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 8 years |
Brand | |
Asset Acquisition [Line Items] | |
Intangible assets acquired | $ 370 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years |
Technology | |
Asset Acquisition [Line Items] | |
Intangible assets acquired | $ 6,800 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years |
Customer relationships | |
Asset Acquisition [Line Items] | |
Intangible assets acquired | $ 3,300 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 15 years |
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