UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of
report (Date of the earliest event reported) April
30, 2008
FARO
TECHNOLOGIES,
INC.
(Exact
Name of Registrant as Specified in Its Charter)
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Florida
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0-20381
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59-3157093
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(State
or Other Jurisdiction
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(Commission
File
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(IRS
Employer
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of
Incorporation)
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Number)
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Identification
No.)
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125
Technology Park, Lake Mary, Florida
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32746
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(407)
333-9911
(Registrant’s
Telephone Number, Including Area Code)
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230
.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
2.02 Results
of Operations and Financial Statements
Item
7.01 Regulation
FD Disclosure
On
April
30, 2008, FARO Technologies, Inc. issued a press release announcing its results
of operations for the first quarter ended March 29, 2008. A copy of the press
release is furnished as Exhibit 99.1 hereto and is incorporated herein by
reference.
The
information furnished herewith pursuant to Item 2.02 and Item 7.01 of this
Current Report shall not be deemed to be “filed” for the purpose of Section 18
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or
otherwise subject to the liabilities of that section, and shall not be
incorporated by reference into any registration statement or other document
under the Securities Act of 1933, as amended, or the Exchange Act, except as
shall be expressly set forth by specific reference in such filing.
Item
9.01 Financial
Statements and Exhibits
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(d)
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Exhibits
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99.1
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Press
Release dated as of April 30, 2008
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Signature
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has
duly
caused this report to be signed on its behalf by the undersigned thereunder
duly
authorized.
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FARO
Technologies, Inc.
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(Registrant)
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Date:
April
30, 2008
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/s/
Jay Freeland
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Jay
Freeland
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Chief
Executive Officer
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EXHIBIT
INDEX
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Exhibit
No.
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Description
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99.1
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Press
Release dated as of April 30, 2008
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NEWS
BULLETIN
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FARO
Technologies Inc.
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125
Technology Park
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Lake
Mary, FL 32746
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The
Measure of Success
Keith
Bair, Senior Vice President and CFO
keith.bair@FARO.com,
407-333-9911
FARO
First Quarter Orders Grow 23.0%, Sales Increase 14.4%
LAKE
MARY,
FL.,
April 30, 2008 - FARO Technologies, Inc. (NASDAQ: FARO)
today
announced results for the first quarter ended March 29, 2008. Net income
for the
first quarter was $3.4 million, or $0.20 per diluted share, an increase of
$0.2
million, compared to $3.2 million, or $0.22 per diluted share, in the first
quarter of 2007.
Sales
for
the first quarter of 2008 were $46.1 million, an increase of $5.8 million,
or
14.4%, from $40.3 million in the first quarter of 2007. New
order
bookings for the first quarter were $47.0 million, an increase of $8.8 million,
or 23.0%, compared with $38.2 million in the year-ago quarter.
“We
had
strong growth in new orders during the first quarter, once again validating
our
belief that FARO’s world-class technology is in the early stages of a very large
market opportunity,” stated Jay Freeland, FARO’s President & CEO. “We also
maintained our historical balance of approximately 50% of our orders coming
from
new customers and 50% from existing customers. This remains a good indicator
of
the adaptability and versatility of our technology. Shipments, however, were
lower than orders, driven by a large number of new orders received at the
end of
the quarter which had customer delivery requirements in April. Overall, lower
orders growth in the U.S. during the first quarter was offset by strength
in
Europe and Asia and we continue to see the right “buy” signals from our
customers in all three regions.”
Gross
margin for the first quarter of 2008 was 60.1%, compared to 59.2% in the
first
quarter of 2007. Gross margin increased primarily as the result of a change
in
the sales mix resulting from an increase in unit sales of product lines with
a
lower than average cost of sales. Gross margin for the first quarter of 2008
was
in line with previously issued full-year guidance of approximately 58.0%
to
60.0%.
Selling
expenses as a percentage of sales increased to 31.3% in the first quarter
of
2008 compared to 30.5% in the first quarter of 2007 driven primarily by costs
associated with new sales personnel who were added to continue driving the
Company’s growth.
General
and administrative expenses were 12.2% of sales for the first quarter of
2008
compared to 12.5% of sales in the first quarter of 2007.
Research
and development expenses were $2.7 million for the first quarter of 2008,
up
from $2.0 million in the first quarter of 2007. This increase reflects the
Company’s continued investment in new growth platforms.
Operating
margin for the first quarter of 2008 was 8.5%, compared to 8.6% in the year
ago
quarter.
First
quarter 2008 results also included an accrual for interest expense of
approximately $0.4 million associated with the Company’s Foreign Corrupt
Practices Act resolution. The Company has executed settlement documents with
both the U.S. Department of Justice and the U.S. Securities and Exchange
Commission with respect to the FCPA matter and is awaiting formal approval
from
both parties with respect to those documents.
Income
tax expense was $0.9 million for the first quarter of 2008 compared to $0.8
million in the first quarter of 2007 primarily as a result of an increase
in
pretax income. The Company’s effective tax rate was 21.8% in the first quarter
of 2008 compared to 20.5% in the first quarter of 2007 due to an increase
in
taxable income in jurisdictions with higher tax rates.
“We
are
well-positioned for the second quarter and the rest of 2008. First quarter
orders growth was well within our target range for the year. That strength
in
demand also allowed us to stay firm on price, keeping gross margins above
60%.
As a company, we’ve always had fluctuations from one quarter to the next and the
first quarter has historically been our slowest. It is for this reason that
we
consistently focus on and forecast full-year results only. Based on all of
these
factors, we are maintaining our previously-stated full year 2008 guidance
of
approximately 20-25% sales growth and gross margin of 58-60%,” Freeland
concluded.
This
press release contains forward-looking statements (within the meaning of
the
Private Securities Litigation Reform Act of 1995) that are subject to risks
and
uncertainties, such as statements about our plans, objectives, projections,
expectations, assumptions, strategies, or future events. Statements that
are not
historical facts or that describe the Company’s plans, objectives, projections,
expectations, assumptions, strategies, or goals are forward-looking statements.
In addition, words such as “may,” “believes,” “anticipates,” “expects,”
“intends,” “plans,” “seeks,” “estimates,” “will,” “should,” “could,” “projects,”
“forecast,” “target,” “goal,” and similar expressions or discussions of our
strategy or other intentions identify forward-looking statements. Other written
or oral statements, which constitute forward-looking statements, also may
be
made by the Company from time to time. Forward-looking statements are not
guarantees of future performance and are subject to various known and unknown
risks, uncertainties, and other factors that may cause actual results,
performances, or achievements to differ materially from future results,
performances, or achievements expressed or implied by such forward-looking
statements. Consequently, undue reliance should not be placed on these
forward-looking statements.
Factors
that could cause actual results to differ materially from what is expressed
or
forecasted in forward-looking statements include, but are not limited
to:
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our
inability to further penetrate our customer base;
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development
by others of new or improved products, processes or technologies
that make
our products obsolete or less
competitive;
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our
inability to maintain our technological advantage by developing
new
products and enhancing our existing
products;
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our
inability to successfully identify and acquire target companies
or achieve
expected benefits from acquisitions that are
consummated;
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the
cyclical nature of the industries of our customers and the financial
condition of our customers;
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the
fact that the market potential for the CAM2 market and the potential
adoption rate for our products are difficult to quantify and
predict;
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the
inability to protect our patents and other proprietary rights in
the
United States and foreign countries;
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fluctuations
in our annual and quarterly operating results and the inability
to achieve
our financial operating targets as a result of a number of factors
including, without limitation (i) litigation and regulatory action
brought
against us, (ii) quality issues with our products, (iii) excess
or
obsolete inventory, (iv) raw material price fluctuations, (v) expansion
of
our manufacturing capability and other inflationary pressures,
(vi) the
size and timing of customer orders, (vii) the amount of time that
it takes
to fulfill orders and ship our products, (viii) the length of our
sales
cycle to new customers and the time and expense incurred in further
penetrating our existing customer base, (ix) increases in operating
expenses required for product development and new product, marketing,
(x)
costs associated with new product introductions, such as product
development, marketing, assembly line start-up costs and low introductory
period production volumes, (xi) the timing and market acceptance
of new
products and product enhancements, (xii) customer order deferrals
in
anticipation of new products and product enhancements, (xiii) our
success
in expanding our sales and marketing programs, (xiv) start-up costs
associated with opening new sales offices outside of the United
States,
(xv) fluctuations in revenue without proportionate adjustments
in fixed
costs, (xvi) the efficiencies achieved in managing inventories
and fixed
assets, (xvii) investments in potential acquisitions or strategic
sales,
product or other initiatives, (xviii) shrinkage or other inventory
losses
due to product obsolescence, scrap or material price changes, (xix)
adverse changes in the manufacturing industry and general economic
conditions, (xx) compliance with government regulations including
health,
safety, and environmental matters, (xxi) the ultimate costs of
the
Company’s monitoring obligations in respect of the Foreign Corrupt
Practices Act (“FCPA”) matter; and (xxii) other factors noted herein;
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changes
in gross margins due to changing product mix of products sold and
the
different gross margins on different
products;
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our
inability to successfully maintain the requirements of Restriction
of use
of Hazardous Substances (“RoHS”) and Waste Electrical and Electronic
Equipment (“WEEE”) compliance into our
products;
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the
inability of our products to displace traditional measurement devices
and
attain broad market acceptance;
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the
impact of competitive products and pricing in the CAM2 market and
the
broader market for measurement and inspection devices;
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the
effects of increased competition as a result of recent consolidation
in
the CAM2 market;
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risks
associated with expanding international operations, such as fluctuations
in currency exchange rates, difficulties in staffing and managing
foreign
operations, political and economic instability, compliance with
import and
export regulations, and the burdens and potential exposure of complying
with a wide variety of U.S. and foreign laws and labor
practices;
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the
inability to reach a final resolution of the FCPA matter with the
DOJ or
the SEC or reaching a resolution on the FCPA matter that differs
from the
resolution currently anticipated by the Company whether with respect
to
monetary sanctions ultimately paid by the Company to the SEC or
DOJ or
otherwise;
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unforeseen
developments in our FCPA matter or in complying with the FCPA in
the
future;
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the
amount of monetary sanctions ultimately paid by the Company to
the SEC and
the DOJ;
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higher
than expected increases in expenses relating to our Asia Pacific
expansion
or our Singapore manufacturing
facility;
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our
inability to find less expensive alternatives to stock options
to attract
and retain employees;
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the
loss of our Chief Executive Officer or other key
personnel;
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difficulties
in recruiting research and development engineers, and application
engineers;
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the
failure to effectively manage our
growth;
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variations
in the effective income tax rate and the difficulty in predicting
the tax
rate on a quarterly and annual basis;
and
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the
loss of key suppliers and the inability to find sufficient alternative
suppliers in a reasonable period or on commercially reasonable
terms.
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the
other risks detailed in the Company’s Annual Report on Form 10-K and other
filings from time to time with the Securities and Exchange Commission.
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Forward-looking
statements in this release represent the Company’s judgment as of the date of
this release. The Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events, or otherwise.
About
FARO
With
approximately 17,000 installations and 7,600 customers globally, FARO
Technologies, Inc. designs, develops, and markets portable, computerized
measurement devices and software used to create digital models -- or to perform
evaluations against an existing model -- for anything requiring highly detailed
3-D measurements, including part and assembly inspection, factory planning
and
asset documentation, as well as specialized applications ranging from surveying,
recreating accident sites and crime scenes to digitally preserving historical
sites.
FARO's
technology increases productivity by dramatically reducing the amount of
on-site
measuring time, and the various industry-specific software packages enable
users
to process and present their results quickly and more effectively.
Principal
products include the world's best-selling portable measurement arm -- the
FaroArm; the world's best-selling laser tracker -- the FARO Laser Tracker
X and
Xi; the FARO Laser ScanArm; FARO Photon Laser Scanners; the FARO Gage, Gage-PLUS
and PowerGAGE; and the CAM2 Q family of advanced CAD-based measurement and
reporting software. FARO Technologies is ISO-9001 certified and ISO-17025
laboratory registered.
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