FARO Technologies, Inc. (NASDAQ:FARO) Q3 2021 Earnings Conference Call October 27, 2021 5:00 PM ET Company Participants Michael Funari - Sapphire IR Michael Burger - CEO Allen Muhich - CFO Conference Call Participants Greg Palm - Craig-Hallum Capital Andrew DeGasperi - Berenberg Capital Robert Mason - Baird Ben Rose - Battle Road Research Operator Good afternoon everyone and welcome to today's FARO Technologies' Third Quarter 2021 Earnings Call. For opening remarks and introductions, I will now turn the cal ...

Table of Contents Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $.001 FARO Nasdaq Global Select Market LLC UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF ...

FARO Technologies, Inc. (NASDAQ:FARO) Q2 2021 Results Conference Call July 29, 2021 8:00 AM ET Company Participants Michael Funari - Sapphire Investor Relations Michael Burger - Chief Executive Officer Allen Muhich - Chief Financial Officer Conference Call Participants Greg Palm - Craig-Hallum Capital James Ricchiuti - Needham & Co. Andrew DeGasperi - Berenberg Capital Robert Mason - Baird Operator Good morning, everyone, and welcome to today's FARO Technologies' Second Quarter 2021 Earnings Call. For open ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 0-23081 FARO TECHNOLOGIES, INC. (Exact Name of Registrant as Specified in Its Charter) Florida 59-3157093 (State or o ...

FARO Technologies, Inc. (NASDAQ:FARO) Q1 2021 Earnings Conference Call April 29, 2021 8:00 AM ET Company Participants Michael Funari - Sapphire Investor Relations Michael Burger - Chief Executive Officer Allen Muhich - Chief Financial Officer Conference Call Participants Jim Ricchiuti - Needham Danny Eggerichs - Craig-Hallum Alex Ross - Berenberg Capital Richard Eastman - Baird Ben Rose - Battle Road Operator Good morning, everyone, and welcome to the FARO Technologies First Quarter 2021 Earnings Call. For ...

Table of Contents Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $.001 FARO Nasdaq Global Select Market LLC UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE ...

FARO Technologies, Inc. (NASDAQ:FARO) Q4 2020 Earnings Conference Call February 18, 2021 8:00 AM ET Company Participants Michael Funari - Sapphire Investor Relations Michael Burger - Chief Executive Officer Allen Muhich - Chief Financial Officer Conference Call Participants Greg Palm - Craig- Hallum Capital Jim Ricchiuti - Needham & Company Andrew DeGasperi - Berenberg Capital Ben Rose - Battle Road Research Operator Good morning, everyone, and welcome to the FARO Technologies Fourth Quarter and Full Year 2 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | --- | |------------------------------------------------------------------------------------------|---------------------------------|---------------------------|------- ...

FARO Technologies, Inc. (NASDAQ:FARO) Q3 2020 Earnings Conference Call October 29, 2020 8:00 AM ET Company Participants Michael Funari – Sapphire Investor Relations Michael Burger – Chief Executive Officer Allen Muhich – Chief Financial Officer Conference Call Participants Greg Palm – Craig- Hallum Capital Jim Ricchiuti – Needham Andrew DeGasperi – Berenberg Capital Operator Good morning, everyone, and welcome to the FARO Technologies Third Quarter 2020 Earnings Call. For opening remarks and introductions, ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for Q3 2020 show decreased assets, a narrowed Q3 net loss, but a widened nine-month net loss, with increased cash from investments [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $451.7 million, driven by lower receivables and liquidated investments, while liabilities and equity also declined Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2020 (Unaudited) | Dec 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $163,637 | $133,634 | | Accounts receivable, net | $47,533 | $76,162 | | Inventories, net | $50,004 | $58,554 | | Total current assets | $284,740 | $322,216 | | Goodwill | $55,640 | $49,704 | | **Total assets** | **$451,726** | **$486,842** | | **Liabilities & Equity** | | | | Total current liabilities | $93,453 | $105,965 | | **Total liabilities** | **$138,396** | **$154,850** | | Retained earnings | $86,100 | $112,879 | | **Total shareholders' equity** | **$313,330** | **$331,992** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q3 2020 sales decreased to $70.7 million, resulting in a $3.0 million net loss, while the nine-month net loss widened to $26.8 million Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2020 | Q3 2019 | Nine Months 2020 | Nine Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Total sales | $70,736 | $90,516 | $210,815 | $277,624 | | Gross Profit | $36,298 | $50,772 | $109,067 | $154,531 | | Loss from operations | $(4,858) | $(5,891) | $(33,374) | $(10,426) | | Net loss | $(3,024) | $(6,199) | $(26,779) | $(12,452) | | Net loss per share - Diluted | $(0.17) | $(0.36) | $(1.51) | $(0.72) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased, but cash and cash equivalents increased by $30.0 million, primarily due to proceeds from investment sales Cash Flow Summary (in thousands) | Activity | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $10,816 | $23,466 | | Net cash provided by (used in) investing activities | $16,086 | $(8,506) | | Net cash provided by (used in) financing activities | $1,846 | $(2,435) | | **Increase in cash and cash equivalents** | **$30,003** | **$10,300** | | **Cash and cash equivalents, end of period** | **$163,637** | **$119,083** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, COVID-19 impact, a global restructuring plan, a U.S. government contract liability, and the acquisition of Advanced Technical Solutions - The company designs, develops, and manufactures 3D measurement and imaging solutions, reorganizing into a **single reporting segment** with a functional structure in Q4 2019[28](index=28&type=chunk) - The COVID-19 pandemic caused a **significant decline in demand** for products and services in Q2 and Q3 2020, leading to increased use of virtual sales demonstrations and training seminars[37](index=37&type=chunk) - A global restructuring plan approved in Q1 2020 targeted a headcount reduction of approximately **500 employees**, resulting in pre-tax charges of **$14.6 million** for the nine months ended Sep 30, 2020, primarily for severance[69](index=69&type=chunk)[72](index=72&type=chunk) - An internal review found potential overcharges to the U.S. Government under GSA contracts, leading to an aggregate estimated total liability of **$13.1 million** as of September 30, 2020[73](index=73&type=chunk)[75](index=75&type=chunk) - On August 21, 2020, the company acquired Advanced Technical Solutions in Scandinavia AB (ATS) for a purchase price of **€5.1 million ($6.0 million)** plus potential contingent consideration[84](index=84&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes sales decline to COVID-19, implemented restructuring to reduce SG&A, narrowed Q3 net loss, and maintains strong liquidity [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Q3 2020 sales declined 21.9% due to COVID-19, gross margin contracted, but SG&A reduction helped narrow the net loss despite increased nine-month losses Q3 2020 vs Q3 2019 Performance (in millions) | Metric | Q3 2020 | Q3 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Total Sales | $70.7 | $90.5 | -21.9% | | Gross Profit | $36.3 | $50.8 | -28.5% | | Gross Margin | 51.3% | 56.1% | -4.8 p.p. | | SG&A Expenses | $30.2 | $45.9 | -34.3% | | Net Loss | $(3.0) | $(6.2) | 51.7% (Improvement) | Nine Months 2020 vs 2019 Performance (in millions) | Metric | Nine Months 2020 | Nine Months 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Total Sales | $210.8 | $277.6 | -24.1% | | Gross Profit | $109.1 | $154.5 | -29.4% | | Restructuring Costs | $14.6 | $0.0 | N/A | | Net Loss | $(26.8) | $(12.5) | -114.4% (Worsened) | [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and cash equivalents increased to $163.6 million, primarily from investing activities, with $18.3 million remaining for share repurchases - Cash and cash equivalents increased by **$30.0 million** to **$163.6 million** at September 30, 2020[117](index=117&type=chunk) - The company made **no stock repurchases** during the nine-month period and has **$18.3 million** remaining under its share repurchase authorization[117](index=117&type=chunk) - As of September 30, 2020, the company had **$49.3 million** in purchase commitments expected to be delivered within the next 12 months[118](index=118&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces significant unhedged foreign currency exchange risk, with 59% of nine-month revenue invoiced in major foreign currencies - **59% of revenue** for the nine months ended September 30, 2020, was invoiced in foreign currencies, creating significant foreign exchange exposure[121](index=121&type=chunk) - The company's most significant currency exposures are to the **Euro, Swiss Franc, Japanese Yen, Chinese Yuan, and Brazilian Real**[121](index=121&type=chunk) - The company did **not use any hedging instruments** to manage foreign currency risk in 2019 or the first nine months of 2020[121](index=121&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective, with no material changes to internal controls during Q3 2020 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of September 30, 2020[123](index=123&type=chunk) - **No material changes** to the company's internal control over financial reporting occurred during the quarter ended September 30, 2020[124](index=124&type=chunk) [PART II. OTHER INFORMATION](index=41&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any legal proceedings expected to materially adversely affect its business or financial condition - The company is **not involved in any legal proceedings** expected to have a material adverse effect on its business[126](index=126&type=chunk) [Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) The ongoing COVID-19 pandemic poses significant risks, including production slowdowns, reduced demand, supply chain disruptions, and financial market volatility - The **COVID-19 pandemic** is identified as a significant risk, with the company's operations being vulnerable to its economic effects and disruptions[127](index=127&type=chunk) - Specific pandemic-related risks include potential **production slowdowns, reduced product demand, supply chain disruption**, and **disruption of global financial markets**[127](index=127&type=chunk) - The ultimate impact of the pandemic on financial condition and results cannot be determined at this time, but the company expects its business to continue to be **adversely affected**[129](index=129&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No stock repurchases were made during the nine-month period, with $18.3 million remaining under the authorized share repurchase program - The company made **no stock repurchases** during the nine months ended September 30, 2020[130](index=130&type=chunk) - As of September 30, 2020, **$18.3 million** remained available for repurchase under the company's **$50.0 million** share repurchase program[130](index=130&type=chunk) [Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, executive agreements, and required CEO/CFO certifications [Signatures](index=44&type=section&id=SIGNATURES) The quarterly report was duly signed on October 28, 2020, by Allen Muhich, Chief Financial Officer of FARO Technologies, Inc