Core Insights - AMETEK, Inc. has completed the acquisition of FARO Technologies, enhancing its Ultra Precision Technologies Division with FARO's expertise in 3D measurement and imaging solutions [1] - The combination of FARO, Creaform, and Virtek creates a comprehensive portfolio of portable and automated 3D metrology, laser projection, and digital reality solutions, aimed at improving customer experiences and product integration [2][3] Company Overview - FARO Technologies has over 40 years of experience in providing technology solutions that enable accurate measurements and data-driven decision-making [4] - The company is recognized for its innovation in bridging the digital and physical worlds through reliable accuracy and immediacy [4] Strategic Implications - The acquisition is expected to open new opportunities for innovation and growth, allowing the companies to collaborate more closely and enhance their service capabilities [3] - Each brand will continue to operate independently while leveraging their combined strengths to deliver greater value to customers [2][3] Industry Applications - The integrated solutions will serve various sectors, including industrial manufacturing, architecture, engineering, construction, and public safety, with applications ranging from quality control to forensics [6]

Core Points - FARO Technologies, Inc. has announced that its shareholders approved the acquisition by AMETEK, Inc. at a Special Meeting [1][2] - Over 99% of votes cast were in favor of the merger agreement, which required a majority vote from FARO's outstanding shares [2] - Upon completion of the merger, FARO shareholders will receive $44 in cash for each share of FARO common stock, with the transaction expected to close in the second half of 2025, pending regulatory approvals [3] Company Information - FARO has been a leader in technology solutions for over 40 years, focusing on enabling customers to measure their world and make informed decisions [5] - The company is recognized for its innovative approach in bridging digital and physical realities through reliable data accuracy and immediacy [5] Advisory Information - Evercore is serving as the exclusive financial advisor, while Foley & Lardner LLP is acting as the legal advisor to FARO during this merger process [4]

Core Viewpoint - AMETEK has announced a definitive agreement to acquire FARO Technologies for $44 per share in cash, representing a 40% premium over FARO's closing price on May 5, 2025, with an enterprise valuation of approximately $920 million [1] Company Overview - FARO Technologies, founded in 1981 and headquartered in Florida, is a leading provider of 3D measurement and imaging solutions, with annual sales of approximately $340 million [2] - AMETEK, established in 1930 and headquartered in Pennsylvania, is a global leader in electronic instruments and electromechanical devices, with over 21,500 employees and annual sales exceeding $7 billion [4] Strategic Fit - AMETEK's CEO highlighted that FARO is an excellent acquisition target that aligns strategically with AMETEK's precision technology division, enhancing its presence in high-growth markets [2] - FARO's differentiated 3D measurement and imaging solutions will complement AMETEK's existing Creform business, providing strong momentum for growth and profit expansion [2] Recent Performance - FARO reported a net profit of $906,000 for the first quarter of fiscal year 2025, reflecting a year-over-year increase of 112.46%, positively impacting investor sentiment [6] - Craig-Hallum has upgraded FARO Technologies' stock rating to "Buy" and raised the target price from $22 to $26, indicating optimism about the company's future growth potential [6]

Group 1 - Halper Sadeh LLC is investigating FARO Technologies, Inc. for potential violations related to its sale to AMETEK, Inc. for $44.00 per share in cash [1] - AvidXchange Holdings, Inc. is also under investigation for its sale to TPG for $10.00 per share in cash [2] - The firm may seek increased consideration for shareholders and additional disclosures regarding the proposed transactions [3] Group 2 - Shareholders are encouraged to contact Halper Sadeh LLC to discuss their legal rights and options at no charge [4] - The firm represents investors globally who have experienced securities fraud and corporate misconduct, recovering millions for defrauded investors [4]

Group 1 - Monteverde & Associates PC has recovered millions of dollars for shareholders and is recognized as a Top 50 Firm in the 2024 ISS Securities Class Action Services Report [1] - The firm is investigating FARO Technologies, Inc. in relation to its proposed merger with AMETEK, Inc., where AMETEK will acquire all outstanding shares of FARO Technologies common stock for $44 per share in cash [1] Group 2 - Monteverde & Associates PC is a national class action securities firm with a successful track record in trial and appellate courts, including the U.S. Supreme Court [2] - The firm emphasizes that no company, director, or officer is above the law, and encourages shareholders with concerns to reach out for additional information [3]

Restructuring and Operational Changes - FARO Technologies reported a total restructuring charge of $26.7 million since the approval of the Integration Plan, with cash payments of $10.4 million primarily for severance and related benefits[89]. - The company completed its Restructuring Plan actions as of March 31, 2023, with total payments of $24.8 million, mainly for severance and related benefits[88]. - The 2024 Restructuring Plan aims to improve operating performance and streamline operations, particularly in underperforming countries due to economic challenges in the manufacturing and construction sectors[90]. - FARO Technologies expects to recognize $0.1 million in employee severance and other costs associated with the 2024 Restructuring Plan in Q1 2025[91]. - The company has transitioned manufacturing services to Sanmina, which is expected to support volume requirements during 2025[86]. - The company has abandoned 17,000 square feet of unused manufacturing space in Exton, Pennsylvania, as part of its restructuring efforts[88]. - FARO Technologies is focused on consolidating its cloud-based offerings into a single customer platform to enhance operational efficiency[89]. Financial Performance - Total sales for the three months ended March 31, 2025, were $82.9 million, a decrease of $1.4 million or 1.7% compared to $84.2 million for the same period in 2024[99]. - Gross profit increased by $3.9 million, or 9.1%, to $47.2 million for the three months ended March 31, 2025, with a gross margin of 57.0%, up from 51.4% in the prior year[100]. - Recurring revenue for the three months ended March 31, 2025, was $17.3 million, an increase from $16.7 million in the same period of 2024[93]. - Research and development expenses rose by $0.5 million, or 5.1%, to $9.5 million for the three months ended March 31, 2025, representing 11.4% of total sales[103]. - Selling, general and administrative expenses decreased by $5.8 million, or 14.6%, to $33.8 million for the three months ended March 31, 2025, accounting for 40.8% of total sales[102]. - Net income for the three months ended March 31, 2025, was $0.9 million, compared to a net loss of $7.3 million for the same period in 2024[108]. - Cash and cash equivalents increased by $3.7 million to $92.4 million at March 31, 2025, from $88.7 million at December 31, 2024[109]. Currency and Interest Rate Exposure - As of March 31, 2025, over 61% of the company's revenue was invoiced in foreign currencies, with approximately 42% of its assets denominated in foreign currencies[121]. - The company had short-term investments of $10.2 million and cash equivalents of $20.3 million, all denominated in U.S. dollars[122]. - The company does not believe that a 5% increase or decrease in interest rates would materially affect its business or financial condition[124]. - The company has not utilized off-balance sheet financial instruments for hedging foreign currency exchange rate exposure as of March 31, 2025[121]. - Future investment income may fall short of expectations due to changes in interest rates, potentially leading to losses in principal[123]. - The company’s exposure to foreign exchange risks may increase if the percentage of non-U.S. dollar revenues from international sales rises[121]. - Fixed rate securities may see a negative impact on market value due to rising interest rates, while floating rate securities may yield less income if rates fall[123]. Inflation and Economic Impact - Rising general inflation has negatively impacted the company's cost of sales and operating expenses, affecting customer purchasing power[125]. - The impact of future inflation fluctuations on the company's operations cannot be accurately predicted[125]. Other Information - The company released the first phase of FARO Sphere to customers in Q2 2022, with FARO Sphere XG announced on October 23, 2023, enhancing cloud-based software offerings[92]. - Interest expense for the three months ended March 31, 2025, was $0.9 million, compared to $0.8 million for the same period in 2024[104]. - The company has not experienced changes in critical accounting policies since its last annual report[119].

Financial Data and Key Metrics Changes - Revenue for the first quarter was $82.9 million, down 2% year over year, but within the upper end of guidance range [5][27] - Non-GAAP gross margins were 57.7%, up from 51.8% in the previous year, marking a significant improvement [27][28] - Non-GAAP EPS was $0.33, exceeding guidance and representing the highest Q1 in company history [6][30] - Operating cash flow remained positive for the sixth consecutive quarter [6] Business Line Data and Key Metrics Changes - EBITDA for the first quarter was $12.5 million, representing a 124% year-over-year growth [8][29] - Non-GAAP operating expenses were $38.5 million, down $2.2 million from the previous year, reflecting productivity improvements [28][30] - GAAP operating income was $3.8 million, compared to an operating loss of $5.3 million in the same quarter last year [29] Market Data and Key Metrics Changes - The Americas and European regions saw a decline of 31% in revenue, while the Asia Pacific region experienced a growth of 1% [27] - Despite a challenging macro environment, net orders grew by 6% year over year [9][10] Company Strategy and Development Direction - The company is in the third phase of its growth strategy, focusing on selective higher-risk investments while maintaining operational excellence [6][7] - The strategy includes refreshing the product portfolio and launching new products to increase addressable opportunities by $800 million over three years [9][12] - The company has launched several new products, including LEAP and Blink, which are expected to drive revenue growth [12][15] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the macro environment, noting that demand is currently outpacing Q1 [25] - The company is preparing for potential impacts from tariffs, with plans to implement price increases and assess production localization options [20][21] - Management believes that tariffs could ultimately become a net positive as companies look to diversify supply chains [25] Other Important Information - The company has established partnerships expected to contribute low eight figures in annual revenue [16][17] - A 1% price increase was enacted in April to mitigate tariff impacts [20][33] Q&A Session Summary Question: How is the hardware business shaping up for Q2? - Management noted that while they historically see a larger portion of revenue late in the quarter, they are currently seeing better pacing than expected in Q2 [36][38] Question: What is the expected impact of new products on Q2? - Management indicated that new products like LEAP and Blink are expected to contribute more significantly in Q2 compared to Q1 [41][42] Question: What are the observations regarding the macro environment and order growth? - Management acknowledged a slowdown in certain regions due to tariffs but emphasized that they are planning for various scenarios and adapting their strategies accordingly [50][52]

Financial Data and Key Metrics Changes - Revenue for the first quarter was $82.9 million, down 2% year over year, but within the upper end of guidance [5][27] - Non-GAAP gross margins were 57.7%, up from 51.8% in the previous year, marking a 590 basis points year-over-year expansion [5][27] - Non-GAAP operating expenses were $38.5 million, down $2.2 million from the previous year [5][28] - Non-GAAP EPS was $0.33, compared to $0.09 in Q1 2024, representing significant growth [6][30] - Adjusted EBITDA was $12.5 million, or 15% of sales, compared to $5.6 million in the previous year [29] Business Line Data and Key Metrics Changes - The Americas and European regions saw a revenue decline of 31% each, while the Asia Pacific region experienced a 1% growth [27] - The company launched several new products, including LEAP and BLINK, which are expected to contribute positively to revenue in the upcoming quarters [12][42] Market Data and Key Metrics Changes - The underlying market conditions remained challenging, particularly in the Americas due to tariff-related uncertainties [10][32] - Despite the difficulties, net orders grew by 6% year over year, indicating a positive trend in backlog [9][10] Company Strategy and Development Direction - The company is focused on a three-phase strategy to create shareholder value, with the first phase emphasizing operational excellence and the second phase targeting organic growth [6][7] - The third phase will involve selective higher-risk investments as the company strengthens its cash position [7] - The company aims to refresh its product portfolio and develop global partnerships to drive growth [9][12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the macro environment, noting that demand is currently outpacing Q1 levels [25][40] - The company is prepared for potential challenges related to tariffs and has plans in place to mitigate impacts [20][21] - Management believes that tariffs could ultimately become a net positive as companies look to diversify supply chains [25] Other Important Information - The company has established a strong cash position, with cash and short-term investments totaling $102.6 million at the end of the quarter [30] - The company is actively managing its partnerships and expects contributions from new agreements in the upcoming quarters [17][18] Q&A Session Summary Question: How is the hardware business shaping up for Q2? - Management noted that while they historically see a larger portion of revenues late in the quarter, they are currently seeing a decent start to Q2, with cautious optimism despite planning for a potential 10% decline in the hardware market [37][39] Question: What is the expected impact of new products on Q2? - Management indicated that new products like LEAP and BLINK are expected to contribute positively in Q2, with strong pre-orders for BLINK already noted [41][42] Question: Can you provide insights on order growth and backlog? - Management clarified that the order growth was not specifically aimed at building backlog, but they did see some late orders that could help solidify their outlook for Q2 [52][55] Question: Are there any delays in product launches or partnerships due to the current environment? - Management confirmed that they do not anticipate delays in product launches or partnerships, viewing the current environment as an opportunity for growth [56][58]

Financial Performance - Revenue for Q1 2025 was $82.9 million, down 1.6% year-over-year, but at the upper end of guidance range[5] - Net income for Q1 2025 was $0.9 million, or $0.05 per share, compared to a net loss of $7.3 million, or $(0.38) per share in the prior year[6] - Adjusted EBITDA reached $12.5 million, representing 15.0% of total sales, up from $5.6 million, or 6.6% of total sales in the prior year[6] - Gross profit increased to $47,237,000 in Q1 2025, up from $43,307,000 in Q1 2024, resulting in a gross margin of 57.0% compared to 51.4% year-over-year[27] - Total sales to external customers for Q1 2025 were $82,863,000, a decrease of 1.6% from $84,244,000 in Q1 2024[32] - Total recurring revenue increased to $17,299,000 in Q1 2025, representing 20.9% of total sales, compared to 19.8% in Q1 2024[32] Operational Efficiency - Operating expenses decreased to $43.4 million from $48.6 million in the prior year period[6] - Non-GAAP net income for Q1 2025 was $6,419,000, compared to $1,696,000 in Q1 2024, highlighting improved operational efficiency[27] - The company’s accounts receivable decreased by $3,305,000 in Q1 2025, indicating improved cash flow management[25] - Cash flow from operations was $5.0 million, with cash, cash equivalents, and short-term investments totaling $102.6 million[5][7] Future Outlook - The company expects Q2 2025 revenue in the range of $79 to $87 million, with gross margin between 56.5% to 58.0%[11] - The company expects GAAP gross margin for Q2 2025 to be between 56.5% and 58.0%[36] - Non-GAAP diluted earnings per share for Q2 2025 is projected to range from $0.20 to $0.40[36] Product Development and Market Strategy - Recent product launches include the Leap ST for metrology workflows and Blink for digital reality workflows, aimed at expanding market opportunities[3] - FARO signed two impactful partnerships contributing to a 6% year-over-year net orders growth[3] - The company remains focused on executing its growth strategy despite ongoing macroeconomic uncertainties[3] Restructuring and Innovation - The company has completed substantial activities under its restructuring plans aimed at improving operational performance and streamlining operations[28] - The company is implementing a restructuring plan aimed at improving operating performance and streamlining operations[34] - Research and development expenses for Q1 2025 were reported at $9,485,000, compared to $9,024,000 in Q1 2024, indicating a focus on innovation[27] Cash Flow and Financial Position - Cash and cash equivalents rose to $92,445,000 at the end of Q1 2025, compared to $88,703,000 at the end of 2024, reflecting a cash increase of $3,742,000 during the quarter[25] - Total assets increased to $495,029,000 as of March 31, 2025, up from $483,005,000 at the end of 2024[23] - The company’s total liabilities were $234,862,000 as of March 31, 2025, slightly up from $233,395,000 at the end of 2024[23] - Net cash provided by operating activities for Q1 2025 was $5,031,000, down from $6,575,000 in Q1 2024[34] - Free cash flow for Q1 2025 was $2,237,000, a decline from $3,810,000 in Q1 2024[34] Sales Composition - Hardware sales accounted for 63.5% of total sales in Q1 2025, up from 62.5% in Q1 2024[32] - Software sales as a percentage of total sales decreased to 12.5% in Q1 2025 from 13.0% in Q1 2024[32] - Total sales in constant currency for Q1 2025 were $84,056,000, compared to $83,957,000 in Q1 2024, indicating a slight increase[32]

Core Viewpoint - FARO Technologies, Inc. will release its financial results for Q1 2025 on April 24, 2025, and will host a conference call to discuss these results [1]. Group 1 - The financial results will cover the period ended March 31, 2025 [1]. - The conference call will be led by Peter Lau, President and CEO, and Matthew Horwath, Senior Vice President and CFO [1]. - The call is scheduled for 8:00 am ET on April 24, 2025 [1]. Group 2 - Interested parties can access the conference call via specific phone numbers and a passcode [2]. - A live webcast will be available on FARO's Investor Relations website [2]. - A replay of the webcast will be accessible for approximately 30 calendar days after the call [2]. Group 3 - FARO has over 40 years of experience in providing technology solutions that enable customers to measure their world [3]. - The company is recognized for its innovation in bridging digital and physical realms through data-driven accuracy and precision [3]. - More information about FARO can be found on their official website [3].