0000917491-19-000078 | 10-Q | XBRL Viewer

Leases (Tables)

9 Months Ended

Sep. 30, 2019

The components of lease expense were as follows:


	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost	$	2,039	$	6,036

Finance lease cost:
Amortization of ROU assets	$	88	$	278
Interest on lease liabilities	$	11	$	35
Total finance lease cost	$	99	$	313

Supplemental Balance Sheet Information Related to Leases

Supplemental balance sheet information related to leases was as follows:


	As of
	September 30, 2019
Operating leases:
Operating lease right-of-use asset	$	18,672

Current operating lease liability	$	6,290
Operating lease liability - less current portion	13,418
Total operating lease liability	$	19,708

Finance leases:
Property and equipment, at cost	$	1,851
Accumulated depreciation	(1,069)
Property and equipment, net	$	782

Current finance lease liability	$	325
Finance lease liability - less current portion	504
Total finance lease liability	$	829

Weighted Average Remaining Lease Term (in years):
Operating leases	4.65
Finance leases	2.70

Weighted Average Discount Rate:
Operating leases	5.23		%
Finance leases	5.06		%

Lessee, Operating Lease, Liability, Maturity

Maturities of lease liabilities are as follows:


Year Ending December 31,	Operating leases		Finance leases
2019 (excluding the first 9 months)	$	1,778	$	94
2020	6,454		351
2021	3,562		312
2022	2,892		86
2023	2,711		37
Thereafter	4,987		6
Total lease payments	$	22,384	$	886
Less imputed interest	(2,676)		(57)
Total	$	19,708	$	829

Finance Lease, Liability, Maturity

Maturities of lease liabilities are as follows:


Year Ending December 31,	Operating leases		Finance leases
2019 (excluding the first 9 months)	$	1,778	$	94
2020	6,454		351
2021	3,562		312
2022	2,892		86
2023	2,711		37
Thereafter	4,987		6
Total lease payments	$	22,384	$	886
Less imputed interest	(2,676)		(57)
Total	$	19,708	$	829

Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases was as follows:


	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,024	$	6,134
Operating cash flows from finance leases	$	11	$	35
Financing cash flows from finance leases	$	86	$	273

ROU assets obtained in exchange for lease obligations:
Operating leases	$	2,254	$	8,170
Finance leases	$	—	$	—

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 119,083	$ 108,783
Short-term investments	24,868	24,793
Accounts receivable, net	64,708	88,927
Inventories, net	69,779	65,444
Prepaid expenses and other current assets	28,084	28,795
Total current assets	306,522	316,742
Property and equipment:
Machinery and equipment	82,578	76,048
Furniture and fixtures	6,172	6,749
Leasehold improvements	21,066	20,304
Property and equipment at cost	109,816	103,101
Less: accumulated depreciation and amortization	(81,411)	(72,684)
Property and equipment, net	28,405	30,417
Operating lease right-of-use asset	18,672	0
Goodwill	69,712	67,274
Intangible assets, net	27,530	33,054
Service and sales demonstration inventory, net	39,509	39,563
Deferred income tax assets, net	14,693	14,719
Other long-term assets	2,987	4,475
Total assets	508,030	506,244
Current liabilities:
Accounts payable	11,705	20,093
Accrued liabilities	35,255	36,327
Income taxes payable	1,081	5,081
Lease liability	6,615	0
Total current liabilities	92,348	97,523
Unearned service revenues - less current portion	18,171	15,505
Lease liability - less current portion	13,922	0
Deferred income tax liabilities	2,466	736
Income taxes payable - less current portion	12,567	12,247
Other long-term liabilities	1,031	3,624
Total liabilities	140,505	129,635
Commitments and contingencies - See Note 15
Shareholders’ equity:
Common stock - par value $.001, 50,000,000 shares authorized; 18,816,598 and 18,676,059 issued, respectively; 17,404,087 and 17,253,011 outstanding, respectively	19	19
Additional paid-in capital	260,737	251,329
Retained earnings	162,574	175,353
Accumulated other comprehensive loss	(24,430)	(18,483)
Common stock in treasury, at cost; 1,412,511 and 1,423,048 shares, respectively	(31,375)	(31,609)
Total shareholders’ equity	367,525	376,609
Total liabilities and shareholders’ equity	508,030	506,244
Current portion of unearned service revenues
Current liabilities:
Current portion of unearned service revenues	35,273	32,878
Customer deposits	35,273	32,878
Customer deposits
Current liabilities:
Current portion of unearned service revenues	2,419	3,144
Customer deposits	$ 2,419	$ 3,144

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net loss	$ (6,199)	$ (2,488)	$ (12,452)	$ (828)
Currency translation adjustments	(5,646)	(4,911)	(5,947)	(9,074)
Comprehensive loss	$ (11,845)	$ (7,399)	$ (18,399)	$ (9,902)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Accrued Liabilities - Summary (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2017
Payables and Accruals [Abstract]
Accrued compensation and benefits	$ 13,489	$ 17,745
Accrued warranties	2,111	2,571	$ 2,605	$ 2,628
Professional and legal fees	2,319	2,154
Taxes other than income	2,570	3,550
General services administration contract contingent liability (see Note 15)	11,739	5,267
Other accrued liabilities	3,027	5,040
Accrued liabilities	$ 35,255	$ 36,327

Description of Business

9 Months Ended

Sep. 30, 2019

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 and imaging solutions. This technology permits high-precision 3D measurement, imaging and comparison of parts and complex structures within production and quality assurance processes. Our devices are used for inspection of components and assemblies, rapid prototyping, reverse engineering, documenting large volume or structures in 3D, surveying and construction, as well as for investigation and reconstruction of accident sites or crime scenes. We sell the majority of our products through a direct sales force across a broad number of customers in a range of manufacturing, industrial, architecture, surveying, building information modeling, construction, public safety forensics, cultural heritage, dental, and other applications. Our FaroArm^®, FARO ScanArm^®, FARO Laser Tracker^TM, FARO Laser Projector, and their companion CAM2^®, BuildIT, and BuildIT Projector software solutions, provide for Computer-Aided Design (“CAD”) based inspection, factory-level statistical process control, high-density surveying and laser-guided assembly and production. Together, these products integrate the measurement, quality inspection, and reverse engineering functions with CAD and 3D software to improve productivity, enhance product quality, and decrease rework and scrap in the manufacturing process, mainly supporting applications in our 3D Manufacturing vertical. Our FARO Focus, FARO ScanPlan and FARO Scanner Freestyle^3DX laser scanners, and their companion FARO SCENE, BuildIT, FARO As-Built^TM, and FARO Zone public safety forensics software offerings, are utilized for a wide variety of 3D modeling, documentation and high-density surveying applications in our Construction Building Information Modeling (“Construction BIM”) and Public Safety Forensics verticals. Our FARO ScanArm^®, FARO Scanner Freestyle^3DX laser scanners and their companion SCENE software, and other 3D-structured light scanning solutions specific to the dental industry, also enable a fully digital workflow used to capture real world geometry for the purpose of empowering design, enabling innovation, and speeding up the design cycle, supporting our 3D Design vertical. Our line of galvanometer-based scan heads and laser scan controllers are used in a variety of laser applications and are integrated into larger components and systems, supporting our Photonics vertical.

We report our segment information in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting (“FASB ASC Topic 280”). We evaluate business performance based upon several metrics, using revenue growth and segment profit as the primary financial measures. In the fourth quarter of 2018, we renamed our 3D Factory vertical and reporting segment “3D Manufacturing.” There was no change in our total consolidated financial condition or results of operations previously reported as a result of this change.

We report our activities in the following three reportable segments:

•The 3D Manufacturing reporting segment contains our 3D Manufacturing vertical and provides both standardized and customized solutions for 3D measurement and inspection in an industrial or manufacturing environment. Applications include alignment, part inspection, dimensional analysis, first article inspection, incoming and in-process inspection, machine calibration, non-contact inspection, robot calibration, tool building and set-up, and assembly guidance.

•The Construction BIM reporting segment contains our Construction BIM vertical and provides solutions for as-built data capturing and 3D visualization in building information modeling applications, allowing our customers in the architecture, engineering and construction markets to quickly and accurately extract two-dimensional (“2D”) and 3D measurement points. Applications include as-built documentation, construction monitoring, surveying, asset and facility management, and heritage preservation.

•The Emerging Verticals reporting segment includes our 3D Design, Public Safety Forensics, and Photonics verticals. Our 3D Design vertical provides advanced 3D solutions to capture and edit 3D shapes of products, people and/or environments for design purposes in product development, computer graphics and dental and medical applications. Our Public Safety Forensics vertical provides solutions to public safety officials and professionals to capture environmental or situational scenes in 2D and 3D for crime, crash and fire scene investigations and environmental safety evaluations. Our Photonics vertical develops and markets galvanometer-based laser measurement products and solutions.

All operating segments that do not meet the criteria to be reportable segments are aggregated in the Emerging Verticals reporting segment and have been combined based on the aggregation criteria and quantitative thresholds in accordance with the provisions of FASB ASC Topic 280. Our reporting segments have been determined in accordance with our internal management structure, which is based on operating activities. Each segment is responsible for its own product management, sales, strategy and profitability. Each reporting segment employs consistent accounting policies. See Note 14 – Segment Reporting for further information.

Reclassification and Related Changes to Presentation

Commencing with the third quarter of 2019, depreciation and amortization expenses are being reported in the accompanying statements of operations to reflect departmental costs. Previously, those expenses were reported as a separate line item under operating expenses. Amounts related to depreciation and amortization expenses for the three and nine months ended September 30, 2018 have been restated throughout this Quarterly Report on Form 10-Q to reflect this reclassification of depreciation and amortization expenses and to conform to the current period presentation, as follows:


For the three months ended, September 30, 2018
	As Reported		Adjustment		As Adjusted
Cost of Sales
Product	$	34,004	$	860	$	34,864
Service	13,384		845		14,229
Total cost of sales	$	47,388	$	1,705	$	49,093

Operating Expenses
Selling and marketing	$	27,811	$	671	$	28,482
General and administrative	12,496		606		13,102
Depreciation and amortization	4,747		(4,747)		—
Research and development	9,975		1,765		11,740
Total operating expenses	$	55,029	$	(1,705)	$	53,324


For the nine months ended, September 30, 2018
	As Reported		Adjustment		As Adjusted
Cost of Sales
Product	$	88,766	$	2,555	$	91,321
Service	38,223		2,527		$	40,750
Total cost of sales	$	126,989	$	5,082	$	132,071

Operating Expenses
Selling and marketing	$	86,166	$	1,711	$	87,877
General and administrative	34,889		1,900		$	36,789
Depreciation and amortization	13,467		(13,467)		$	—
Research and development	29,364		4,774		$	34,138
Total operating expenses	$	163,886	$	(5,082)	$	158,804

Schedule of Error Corrections and Prior Period Adjustments

epreciation and amortization expenses are being reported in the accompanying statements of operations to reflect departmental costs. Previously, those expenses were reported as a separate line item under operating expenses. Amounts related to depreciation and amortization expenses for the three and nine months ended September 30, 2018 have been restated throughout this Quarterly Report on Form 10-Q to reflect this reclassification of depreciation and amortization expenses and to conform to the current period presentation, as follows:


For the three months ended, September 30, 2018
	As Reported		Adjustment		As Adjusted
Cost of Sales
Product	$	34,004	$	860	$	34,864
Service	13,384		845		14,229
Total cost of sales	$	47,388	$	1,705	$	49,093

Operating Expenses
Selling and marketing	$	27,811	$	671	$	28,482
General and administrative	12,496		606		13,102
Depreciation and amortization	4,747		(4,747)		—
Research and development	9,975		1,765		11,740
Total operating expenses	$	55,029	$	(1,705)	$	53,324


For the nine months ended, September 30, 2018
	As Reported		Adjustment		As Adjusted
Cost of Sales
Product	$	88,766	$	2,555	$	91,321
Service	38,223		2,527		$	40,750
Total cost of sales	$	126,989	$	5,082	$	132,071

Operating Expenses
Selling and marketing	$	86,166	$	1,711	$	87,877
General and administrative	34,889		1,900		$	36,789
Depreciation and amortization	13,467		(13,467)		$	—
Research and development	29,364		4,774		$	34,138
Total operating expenses	$	163,886	$	(5,082)	$	158,804

Business Combinations - Summary of the Purchase Price Allocated to the Intangible Assets (Details) - USD ($) $ in Thousands	Jul. 13, 2018	Jul. 06, 2018	Mar. 16, 2018	Mar. 09, 2018
Laser Control Systems
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired				$ 1,400
Intangible assets acquired, weighted average life (in years)				7 years
Laser Control Systems \| Brand
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired				$ 26
Intangible assets acquired, weighted average life (in years)				1 year
Laser Control Systems \| Non-competition agreement
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired				$ 29
Intangible assets acquired, weighted average life (in years)				3 years
Laser Control Systems \| Technology
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired				$ 1,319
Intangible assets acquired, weighted average life (in years)				7 years
Laser Control Systems \| Customer relationship
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired				$ 26
Intangible assets acquired, weighted average life (in years)				10 years
Photocore
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired			$ 1,435
Intangible assets acquired, weighted average life (in years)			7 years
Photocore \| Brand
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired			$ 22
Intangible assets acquired, weighted average life (in years)			1 year
Photocore \| Non-competition agreement
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired			$ 9
Intangible assets acquired, weighted average life (in years)			3 years
Photocore \| Technology
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired			$ 1,343
Intangible assets acquired, weighted average life (in years)			7 years
Photocore \| Customer relationship
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired			$ 61
Intangible assets acquired, weighted average life (in years)			10 years
Lanmark
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired		$ 1,366
Intangible assets acquired, weighted average life (in years)		8 years
Lanmark \| Brand
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired		$ 26
Intangible assets acquired, weighted average life (in years)		1 year
Lanmark \| Non-competition agreement
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired		$ 0
Intangible assets acquired, weighted average life (in years)		0 years
Lanmark \| Technology
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired		$ 760
Intangible assets acquired, weighted average life (in years)		7 years
Lanmark \| Customer relationship
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired		$ 580
Intangible assets acquired, weighted average life (in years)		10 years
Open Technologies
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 7,821
Intangible assets acquired, weighted average life (in years)	8 years
Open Technologies \| Brand
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 103
Intangible assets acquired, weighted average life (in years)	1 year
Open Technologies \| Non-competition agreement
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 0
Intangible assets acquired, weighted average life (in years)	0 years
Open Technologies \| Technology
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 4,441
Intangible assets acquired, weighted average life (in years)	7 years
Open Technologies \| Customer relationship
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 3,277
Intangible assets acquired, weighted average life (in years)	10 years

Inventories - Additional Information (Details)	9 Months Ended
Inventories - Additional Information (Details)	Sep. 30, 2019
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]
Inventory, remaining useful life (in years)	3 years

Accounts Receivable

9 Months Ended

Sep. 30, 2019

Receivables [Abstract]

Accounts Receivable

ACCOUNTS RECEIVABLE

Accounts receivable consist of the following:


	As of September 30, 2019		As of December 31, 2018
Accounts receivable	$	67,162	$	90,675
Allowance for doubtful accounts	(2,454)		(1,748)
Total	$	64,708	$	88,927

Business Combinations - Additional Information (Details) $ in Thousands, € in Millions						9 Months Ended
	Jul. 13, 2018 USD ($)	Jul. 13, 2018 EUR (€)	Jul. 06, 2018 USD ($)	Mar. 16, 2018 USD ($)	Mar. 09, 2018 USD ($)	Sep. 30, 2019 USD ($)	Jul. 13, 2018 EUR (€)
Business Acquisition [Line Items]
Integration costs for acquisitions						$ 800
Laser Control Systems Limited
Business Acquisition [Line Items]
Purchase price, including contingent consideration					$ 1,700
Deferred income tax liabilities					$ 0
Photocore AG
Business Acquisition [Line Items]
Purchase price, net of cash acquired				$ 2,400
Deferred income tax liabilities				$ 0
Lanmark Controls
Business Acquisition [Line Items]
Purchase price, including contingent consideration			$ 6,300
Deferred income tax liabilities			$ 325
Opto-Tech SRL
Business Acquisition [Line Items]
Purchase price, including contingent consideration	$ 21,600	€ 18.5
Potential contingent consideration	4,700						€ 4.0
Deferred income tax liabilities	$ 1,876					1,900
Goodwill increase						4,500
Customer relationship \| Opto-Tech SRL
Business Acquisition [Line Items]
Decrease in intangible assets						$ 2,600

Accrued Liabilities - Activity Related to Accrued Warranties (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward]
Balance, beginning of period	$ 2,571	$ 2,628
Provision for warranty expense	2,672	2,888
Fulfillment of warranty obligations	(3,132)	(2,911)
Balance, end of period	$ 2,111	$ 2,605

Business Combinations

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Business Combinations

BUSINESS COMBINATIONS

On March 9, 2018, we acquired all of the outstanding shares of Laser Control Systems Limited (“Laser Control Systems”), a laser component technology business located in Bedfordshire, United Kingdom, which specializes in the design and manufacture of advanced digital scan heads and laser software, for a purchase price of $1.7 million. This acquisition supports our Photonics vertical and our long-term strategy to expand our presence and product portfolio in Photonics applications. The results of Laser Control Systems’ operations as of and after the date of acquisition have been included in our condensed consolidated financial statements as of September 30, 2019 and December 31, 2018, and for the three and nine months ended September 30, 2019 and September 30, 2018.

On March 16, 2018, we acquired all of the outstanding shares of Photocore AG (“Photocore”), a vision-based 3D measurement application and software developer in Zurich, Switzerland, for a total purchase price of $2.4 million. This acquisition supports our Construction BIM vertical and our long-term strategy to improve our existing software offerings with innovative technology in photogrammetry. The results of PhotoCore’s operations as of and after the date of acquisition have been included in our condensed consolidated financial statements as of September 30, 2019 and December 31, 2018, and for the three and nine months ended September 30, 2019 and September 30, 2018.

On July 6, 2018, we acquired all of the outstanding shares of Lanmark Controls, Inc. (“Lanmark”), a high-speed laser marking control boards and laser marking software provider located in Acton, Massachusetts, for a purchase price of $6.3 million. This acquisition supports the development of components used in new 3D laser inspection product development in order to further expand the product portfolio of our Photonics vertical. The results of Lanmark’s operations as of and after the date of acquisition have been included in our condensed consolidated financial statements as of September 30, 2019 and December 31, 2018, and for the three and nine months ended September 30, 2019 and September 30, 2018.

On July 13, 2018, we acquired all of the issued and outstanding corporate capital of Opto-Tech SRL and its subsidiary Open Technologies SRL (collectively, “Open Technologies”), a 3D-structured light scanning solution company located in Brescia, Italy, for an aggregate purchase price of up to €18.5 million ($21.6 million), subject to post-closing adjustments based on actual net working capital, net financial position and transaction expenses. The aggregate purchase price included up to €4.0 million ($4.7 million) in contingent consideration that may be earned by the former owners if certain product development milestones are met. The U.S. Dollar amounts have been converted from Euros based on the foreign exchange rate in effect on the closing date of the acquisition. This acquisition supports our 3D Design vertical and our long-term strategy to establish a presence in 3D measurement technology used in other industries and applications, especially dental and medical. The results of Open Technologies’ operations as of and after the date of acquisition have been included in our condensed consolidated financial statements as of September 30, 2019 and December 31, 2018, and for the three and nine months ended September 30, 2019 and September 30, 2018.

The acquisitions of Laser Control Systems, Photocore, Lanmark and Open Technologies constitute business combinations 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 final determination of the fair value of the assets acquired and liabilities assumed for such acquisitions. In the nine months ended September 30, 2019, certain refinements were booked for the Open Technologies acquisition as part of the finalization process, which included a reduction of $2.6 million to the valuation of the customer relationship intangible and the recognition of a deferred tax liability of $1.9 million. Goodwill increased $4.5 million as result of these changes in the finalization process.

Following is a summary of our allocations of the purchase price to the fair values of the assets acquired and liabilities assumed as of the date of each acquisition:


	Laser Control Systems		Photocore		Lanmark		Open Technologies ⁽²⁾
Accounts receivable	$	—	$	—	$	610	$	2,735
Inventory	—		—		299		1,852
Other assets	—		—		76		634
Intangible assets	1,400		1,435		1,366		7,821
Goodwill	928		1,010		5,355		13,573
Accounts payable and accrued liabilities	—		—		(159)		(2,926)
Other liabilities ⁽¹⁾	(579)		—		(971)		(5,201)
Deferred income tax liabilities	—		—		(325)		(1,876)
Total purchase price, net of cash acquired	$	1,749	$	2,445	$	6,251	$	16,612

⁽¹⁾ For Laser Control Systems, Lanmark and Open Technologies, this total consists primarily of the fair value of the projected contingent consideration.

⁽²⁾ Amounts converted from Euros to U.S. Dollars based on the foreign exchange rate on the closing date of the acquisition.

Following are the details of the purchase price allocated to the intangible assets acquired for the acquisitions noted above:


	Laser Control Systems					Photocore				Lanmark			Open Technologies
	Amount		Weighted Average Life (Years)	Amount		Weighted Average Life (Years)	Amount		Weighted Average Life (Years)	Amount		Weighted Average Life (Years)
Brand	26		1	22		1	26		1	103		1
Non-competition agreement	29		3	9		3	—		0	—		0
Technology	1,319		7	1,343		7	760		7	4,441		7
Customer relationship	26		10	61		10	580		10	3,277		10
Fair value of intangible assets acquired	$	1,400	7	$	1,435	7	$	1,366	8	$	7,821	8

The goodwill for the Laser Control Systems, Lanmark and Open Technologies acquisitions has been allocated to the Emerging Verticals reporting segment. The goodwill for the Photocore acquisition has been allocated to the Construction BIM reporting segment.

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 approximately $0.8 million in acquisition and integration costs for the Laser Control Systems, Photocore, Lanmark and Open Technologies acquisitions. Pro forma financial results for Laser Control Systems, Photocore, Lanmark and Open Technologies have not been presented because the effects of these transactions, individually and in the aggregate, were not material to our consolidated financial results.

Stock-Based Compensation - Schedule of Restricted Stock Unit Activity and Weighted Average Grant Date Fair Value (Details) - Restricted Stock Units	9 Months Ended
	Sep. 30, 2019 $ / shares shares
Shares
Non-vested, beginning balance (in shares) \| shares	311,000
Granted (in shares) \| shares	250,359
Forfeited (in shares) \| shares	(25,738)
Vested (in shares) \| shares	(130,527)
Non-vested, ending balance (in shares) \| shares	405,094
Weighted-Average Grant Date Fair Value
Non-vested, beginning balance (in dollars per share) \| $ / shares	$ 42.66
Granted (in dollars per share) \| $ / shares	49.05
Forfeited (in dollars per share) \| $ / shares	47.57
Vested (in dollars per share) \| $ / shares	37.94
Non-vested, ending balance (in dollars per share) \| $ / shares	$ 47.81

Business Combinations - Purchase Price Allocation (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Jul. 13, 2018	Jul. 06, 2018	Mar. 16, 2018	Mar. 09, 2018
Business Acquisition [Line Items]
Goodwill	$ 69,712	$ 67,274
Laser Control Systems
Business Acquisition [Line Items]
Accounts receivable						$ 0
Inventory						0
Other assets						0
Intangible assets						1,400
Goodwill						928
Accounts payable and accrued liabilities						0
Other liabilities						(579)
Deferred income tax liabilities						0
Total purchase price, net of cash acquired						$ 1,749
Photocore
Business Acquisition [Line Items]
Accounts receivable					$ 0
Inventory					0
Other assets					0
Intangible assets					1,435
Goodwill					1,010
Accounts payable and accrued liabilities					0
Other liabilities					0
Deferred income tax liabilities					0
Total purchase price, net of cash acquired					$ 2,445
Lanmark
Business Acquisition [Line Items]
Accounts receivable				$ 610
Inventory				299
Other assets				76
Intangible assets				1,366
Goodwill				5,355
Accounts payable and accrued liabilities				(159)
Other liabilities				(971)
Deferred income tax liabilities				(325)
Total purchase price, net of cash acquired				$ 6,251
Open Technologies
Business Acquisition [Line Items]
Accounts receivable			$ 2,735
Inventory			1,852
Other assets			634
Intangible assets			7,821
Goodwill			13,573
Accounts payable and accrued liabilities			(2,926)
Other liabilities			(5,201)
Deferred income tax liabilities	$ (1,900)		(1,876)
Total purchase price, net of cash acquired			$ 16,612

Leases

9 Months Ended

Sep. 30, 2019

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 seven years, some of which include options to extend the leases for up to eight years, and some of which include options to terminate the leases within three months. We currently do not sublease any of our leased assets.

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:


	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost	$	2,039	$	6,036

Finance lease cost:
Amortization of ROU assets	$	88	$	278
Interest on lease liabilities	$	11	$	35
Total finance lease cost	$	99	$	313

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 and nine months ended September 30, 2019 was less than $0.1 million and $0.2 million, respectively.

Supplemental balance sheet information related to leases was as follows:


	As of
	September 30, 2019
Operating leases:
Operating lease right-of-use asset	$	18,672

Current operating lease liability	$	6,290
Operating lease liability - less current portion	13,418
Total operating lease liability	$	19,708

Finance leases:
Property and equipment, at cost	$	1,851
Accumulated depreciation	(1,069)
Property and equipment, net	$	782

Current finance lease liability	$	325
Finance lease liability - less current portion	504
Total finance lease liability	$	829

Weighted Average Remaining Lease Term (in years):
Operating leases	4.65
Finance leases	2.70

Weighted Average Discount Rate:
Operating leases	5.23		%
Finance leases	5.06		%

Supplemental cash flow information related to leases was as follows:


	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,024	$	6,134
Operating cash flows from finance leases	$	11	$	35
Financing cash flows from finance leases	$	86	$	273

ROU assets obtained in exchange for lease obligations:
Operating leases	$	2,254	$	8,170
Finance leases	$	—	$	—

Maturities of lease liabilities are as follows:


Year Ending December 31,	Operating leases		Finance leases
2019 (excluding the first 9 months)	$	1,778	$	94
2020	6,454		351
2021	3,562		312
2022	2,892		86
2023	2,711		37
Thereafter	4,987		6
Total lease payments	$	22,384	$	886
Less imputed interest	(2,676)		(57)
Total	$	19,708	$	829

Leases

LEASES

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:


	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost	$	2,039	$	6,036

Finance lease cost:
Amortization of ROU assets	$	88	$	278
Interest on lease liabilities	$	11	$	35
Total finance lease cost	$	99	$	313

Supplemental balance sheet information related to leases was as follows:


	As of
	September 30, 2019
Operating leases:
Operating lease right-of-use asset	$	18,672

Current operating lease liability	$	6,290
Operating lease liability - less current portion	13,418
Total operating lease liability	$	19,708

Finance leases:
Property and equipment, at cost	$	1,851
Accumulated depreciation	(1,069)
Property and equipment, net	$	782

Current finance lease liability	$	325
Finance lease liability - less current portion	504
Total finance lease liability	$	829

Weighted Average Remaining Lease Term (in years):
Operating leases	4.65
Finance leases	2.70

Weighted Average Discount Rate:
Operating leases	5.23		%
Finance leases	5.06		%

Supplemental cash flow information related to leases was as follows:


	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,024	$	6,134
Operating cash flows from finance leases	$	11	$	35
Financing cash flows from finance leases	$	86	$	273

ROU assets obtained in exchange for lease obligations:
Operating leases	$	2,254	$	8,170
Finance leases	$	—	$	—

Maturities of lease liabilities are as follows:


Year Ending December 31,	Operating leases		Finance leases
2019 (excluding the first 9 months)	$	1,778	$	94
2020	6,454		351
2021	3,562		312
2022	2,892		86
2023	2,711		37
Thereafter	4,987		6
Total lease payments	$	22,384	$	886
Less imputed interest	(2,676)		(57)
Total	$	19,708	$	829

Inventories - Schedule of Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Raw materials	$ 36,944	$ 39,859
Finished goods	32,835	25,585
Inventories, net	69,779	65,444
Service and sales demonstration inventory, net	$ 39,509	$ 39,563

Fair Value of Financial Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis - Footnotes (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Jun. 30, 2019	Sep. 30, 2019	Sep. 30, 2018	Mar. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Payment of contingent consideration for acquisitions		$ 3,101	$ 638
Monte Carlo Simulation Valuation Model
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Undiscounted maximum payment under the contingent consideration arrangements	$ 2,200
Accrued Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration		$ 2,000		$ 3,400
Other Noncurrent Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration				$ 2,100

Variable Interest Entity (Details) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
Variable Interest Entity (Details) - USD ($) $ in Thousands	Apr. 27, 2018	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018	Mar. 31, 2019	Dec. 31, 2018
Variable Interest Entity [Line Items]
Impairment charge on equity method investment			$ 1,535	$ 0
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Equity investments and advances to affiliates	$ 1,800
Convertible note payable		$ 500	500
Ownership percentage	16.50%
VIE loss, our portion		(100)
Impairment charge on equity method investment			1,500
Investment in VIE		$ 200	$ 200		$ 1,700	$ 1,700

Short-term Investments - Narrative (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Securities Purchased Under Agreements to Resell and Other Short Term Investment Securities [Line Items]
Short-term investments	$ 24,868	$ 24,793
US Treasury Bill Securities
Securities Purchased Under Agreements to Resell and Other Short Term Investment Securities [Line Items]
Short-term investments	24,900	24,800
U.S. Treasury Security, Maturing on March 12, 2020 \| US Treasury Bill Securities
Securities Purchased Under Agreements to Resell and Other Short Term Investment Securities [Line Items]
Short-term investments	$ 8,900
Interest rate on U.S. Treasury Bills	1.80%
Interest rate on U.S. Treasury Bills	1.80%
U.S. Treasury Security, Maturing on December 12, 2019 \| US Treasury Bill Securities
Securities Purchased Under Agreements to Resell and Other Short Term Investment Securities [Line Items]
Short-term investments	$ 16,000
Interest rate on U.S. Treasury Bills	1.90%
Interest rate on U.S. Treasury Bills	1.90%
U.S. Treasury Security, Maturing on March 14, 2019 \| US Treasury Bill Securities
Securities Purchased Under Agreements to Resell and Other Short Term Investment Securities [Line Items]
Short-term investments		$ 9,000
Interest rate on U.S. Treasury Bills		2.20%
Interest rate on U.S. Treasury Bills		2.20%
U.S. Treasury Security, Maturing on June 6, 2019 \| US Treasury Bill Securities
Securities Purchased Under Agreements to Resell and Other Short Term Investment Securities [Line Items]
Short-term investments		$ 10,900
Interest rate on U.S. Treasury Bills		2.40%
Interest rate on U.S. Treasury Bills		2.40%
U.S. Treasury Security, Maturing on June 20, 2019 \| US Treasury Bill Securities
Securities Purchased Under Agreements to Resell and Other Short Term Investment Securities [Line Items]
Short-term investments		$ 4,900
Interest rate on U.S. Treasury Bills		2.30%
Interest rate on U.S. Treasury Bills		2.30%

Leases Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Operating leases:
Operating lease right-of-use asset	$ 18,672	$ 0
Current operating lease liability	6,290
Operating lease liability - less current portion	13,418
Total operating lease liability	19,708	19,708
Finance leases:
Property and equipment, at cost	1,851
Accumulated depreciation	(1,069)
Property and equipment, net	782
Current finance lease liability	325
Finance lease liability - less current portion	504
Total finance lease liability	$ 829	$ 829
Weighted Average Remaining Lease Term (in years):
Operating leases	4 years 7 months 24 days
Finance leases	2 years 8 months 12 days
Weighted Average Discount Rate:
Operating leases	5.23%
Finance leases	5.06%

Accrued Liabilities

9 Months Ended

Sep. 30, 2019

Payables and Accruals [Abstract]

Accrued Liabilities

ACCRUED LIABILITIES

Accrued liabilities consist of the following:


	As of September 30, 2019		As of December 31, 2018
Accrued compensation and benefits	$	13,489	$	17,745
Accrued warranties	2,111		2,571
Professional and legal fees	2,319		2,154
Taxes other than income	2,570		3,550
General services administration contract contingent liability (see Note 15)	11,739		5,267
Other accrued liabilities	3,027		5,040
	$	35,255	$	36,327

Activity related to accrued warranties was as follows:


	Nine Months Ended
	September 30, 2019		September 30, 2018
Balance, beginning of period	$	2,571	$	2,628
Provision for warranty expense	2,672		2,888
Fulfillment of warranty obligations	(3,132)		(2,911)
Balance, end of period	$	2,111	$	2,605

Label	Element	Value
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 2,365,000
Accounting Standards Update 2016-02 [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	(327,000)
Accounting Standards Update 2016-02 [Member] \| Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	(327,000)
Accounting Standards Update 2014-09 [Member] \| Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 2,365,000

Accounts Receivable - Additional Information (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Receivables [Abstract]
Accounts receivable	$ 67,162	$ 90,675
Allowance for doubtful accounts	(2,454)	(1,748)
Total	$ 64,708	$ 88,927

Stock-Based Compensation

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

Stock-based compensation expense reflects the fair value of stock-based awards measured at the grant date. For awards with only a service condition, we expense stock-based compensation using the straight-line method over the requisite service period for the entire award. For awards with both performance and service conditions, we expense the stock-based compensation on a straight-line basis over the requisite service period taking into account the probability that we will satisfy the performance condition.

We have two compensation plans that provide for the granting of stock options and other share-based awards to key employees and non-employee members of the Board of Directors (the “Board”). The 2009 Equity Incentive Plan (the “2009 Plan”) and the 2014 Equity Incentive Plan (the “2014 Plan”) provide for granting options, restricted stock, restricted stock units or stock appreciation rights to employees and non-employee directors. In May 2018, our shareholders approved an amendment to the 2014 Plan, which increased the number of shares available for issuance under the 2014 Plan by 1,000,000 shares. A maximum of 2,974,543 shares are available for issuance under the 2014 Plan, as amended, plus the number of shares (not to exceed 891,960) that were underlying awards outstanding under the 2004 Equity Incentive Plan (the “2004 Plan”) and the 2009 Plan as of May 29, 2014 that thereafter terminate or expire unexercised or are canceled, forfeited or lapse for any reason. No awards were outstanding under the 2004 Plan as of September 30, 2019, and no further grants will be made under the 2004 Plan or the 2009 Plan.

Upon election to the Board, each non-employee director receives an initial equity grant of shares of restricted common stock with a value equal to $100,000, calculated using the closing price of our common stock on the date of the non-employee director’s election to the Board. The initial restricted stock grant vests on the third anniversary of the grant date, subject to the non-employee director’s continued membership on the Board. Annually, the non-employee directors are granted restricted shares with a value equal to $100,000 on the first business day following the annual meeting of shareholders, calculated using the closing price of our common stock on that day. In addition, the independent Chairman of the Board is annually granted restricted shares with a value equal to $50,000, and the Lead Director, if one has been appointed, would be annually granted restricted shares with a value of $40,000, on the first business day following the annual meeting of shareholders, calculated using the closing price of our common stock on that day. The shares of restricted stock granted annually to our non-employee directors, our independent Chairman of the Board and, if applicable, our Lead Director vest on the day prior to the following year’s annual meeting date, subject to the non-employee director’s continued membership on the Board. We record compensation expense associated with our restricted stock grants on a straight-line basis over the vesting term. Also, beginning in October 2018, our non-employee directors may elect to have their annual cash retainers and annual equity retainers paid in the form of deferred stock units pursuant to the 2014 Plan and the 2018 Non-Employee Director Deferred Compensation Plan. Each deferred stock unit represents the right to receive one share of our common stock upon the non-employee director’s separation of service from the Company. We record compensation expense associated with our deferred stock units over the period of service.

Annually, upon approval by our Compensation Committee, we grant stock-based awards, which historically have been in the form of stock options and/or restricted stock units, to certain employees. We also grant stock-based awards, which historically have been in the form of stock options and/or restricted stock units, to certain new employees throughout the year. The fair value of these stock-based awards is determined by using (a) the current market price of our common stock on the grant date in the case of restricted stock units without a market condition, (b) the Monte Carlo Simulation valuation model in the case of performance-based restricted stock units with a market condition, or (c) the Black-Scholes option valuation model in the case of stock options.

Our annual grants in February 2019 and the stock-based awards granted to Michael D. Burger upon the commencement of his service as our President and Chief Executive Officer in June 2019 and to Allen Muhich upon the commencement of his service as our Chief Financial Officer in July 2019 consisted of performance-based restricted stock units and time-based restricted stock units. Our annual grants in March 2018 consisted of time-based stock options and time-based restricted stock units. The number of stock options and/or restricted stock units granted was based on the employee’s individual objectives, performance against operational metrics assigned to the employee and overall contribution to the Company over the last year.

For the stock-based awards granted in 2019, the time-based restricted stock units vest in three equal annual installments beginning one year after the grant date. The performance-based restricted stock unit awards vest at the end of the 3-year performance period if the applicable performance measure is achieved. The related stock-based compensation expense will be recognized over the requisite service period, taking into account the probability that we will satisfy the performance measure. The performance-based restricted stock units granted in 2019 will be earned and will vest based upon our total shareholder return (“TSR”) relative to the TSR attained by companies within our defined benchmark group, the Russell 2000 Growth Index. Due to the TSR presence in these performance-based restricted stock units, the fair value of these awards was determined using the Monte Carlo Simulation valuation model. We expense these market condition awards over the three-year vesting period regardless of the value the award recipients ultimately receive.

For 2018 grants, stock options vest in three equal annual installments beginning one year after the grant date and time-based restricted stock unit awards vest in full on the three-year anniversary of the grant date. The fair value of these stock-based awards is determined by using (a) the Black-Scholes option valuation model in the case of stock options or (b) the current market price of our common stock on the grant date in the case of restricted stock units.

The Black-Scholes option and Monte Carlo Simulation valuation models incorporate assumptions as to stock price volatility, the expected life of options or awards, a risk-free interest rate and dividend yield. The weighted-average grant-date fair value of the performance-based restricted stock units that were granted during the nine months ended September 30, 2019 and valued using the Monte Carlo Simulation valuation model was $66.16. No performance-based restricted stock units were granted during the nine months ended September 30, 2018. For performance-based restricted stock units granted during the nine months ended September 30, 2019 valued using the Monte Carlo Simulation valuation model, we used the following assumptions:


	Nine Months Ended
	September 30, 2019
Risk-free interest rate	1.8% - 2.48%
Expected dividend yield	—	%
Expected volatility	45.0	%
Weighted-average expected volatility	45.0	%

The weighted-average grant-date fair value of the stock options that were granted during the nine months ended September 30, 2018 and valued using the Black-Scholes option valuation model was $23.43 per option. No stock options were granted during the nine months ended September 30, 2019. For stock options granted during the nine months ended September 30, 2018 valued using the Black-Scholes option valuation model, we used the following assumptions:


	Nine Months Ended
	September 30, 2018
Risk-free interest rate	2.65	%
Expected dividend yield	—	%
Expected term of option	4 years
Expected volatility	45.0	%
Weighted-average expected volatility	45.0	%

Historical information was the primary basis for the selection of the expected dividend yield, expected volatility and the expected lives of the options. The risk-free interest rate was based on the yields of U.S. zero coupon issues and U.S. Treasury issues, with a term approximating the expected life of the option being valued.

A summary of stock option activity and weighted-average exercise prices during the nine months ended September 30, 2019 follows:


	Options	Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value as of September 30, 2019
Outstanding at January 1, 2019	792,943	$	47.59
Granted	—	—
Forfeited or expired	(77,064)	54.64
Exercised	(70,936)	32.71
Outstanding at September 30, 2019	644,943	$	48.66	3.8	$	3,757
Options exercisable at September 30, 2019	577,240	$	48.62	2.6	$	3,331

The total intrinsic value of stock options exercised during the three months ended September 30, 2019 and September 30, 2018 was $1.0 million and $4.7 million, respectively. The total intrinsic value of stock options exercised during the nine months ended September 30, 2019 and September 30, 2018 was $1.3 million and $7.5 million, respectively. The fair value of stock options vested during the three months ended September 30, 2019 and September 30, 2018 was $0.6 million and $0.1 million, respectively. The fair value of stock options vested during the nine months ended September 30, 2019 and September 30, 2018 was $4.9 million and $3.2 million, respectively.

The following table summarizes the restricted stock and restricted stock unit activity and weighted average grant-date fair values for the nine months ended September 30, 2019:


	Shares	Weighted-Average Grant Date Fair Value
Non-vested at January 1, 2019	311,000	$	42.66
Granted	250,359	49.05
Forfeited	(25,738)	47.57
Vested	(130,527)	37.94
Non-vested at September 30, 2019	405,094	$	47.81

We recorded total stock-based compensation expense of $3.4 million and $2.3 million for the three months ended September 30, 2019 and September 30, 2018, respectively, and $8.7 million and $5.7 million for the nine months ended September 30, 2019 and September 30, 2018, respectively.

As of September 30, 2019, there was $12.2 million of total unrecognized stock-based compensation expense related to non-vested stock-based compensation arrangements. The expense is expected to be recognized over a weighted average period of 2.1 years.

The following table summarizes total stock-based compensation expense for each of the line items on our condensed consolidated statement of operations:


	Three Months Ended						Nine Months Ended
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Cost of Sales
Product	$	170	$	143	$	482	$	351
Service	100		98		288		269
Total cost of sales	$	270	$	241	$	770	$	620
Operating Expenses
Selling and marketing	$	356	$	411	$	1,110	$	1,123
General and administrative	2,389		1,172		5,942		2,808
Research and development	372		442		881		1,166
Total operating expenses	$	3,117	$	2,025	$	7,933	$	5,097

Segment Reporting

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Segment Reporting

SEGMENT REPORTING

We have three reportable segments: 3D Manufacturing, Construction BIM, and Emerging Verticals. These segments are based upon the vertical markets that we currently serve. Business activities that do not meet the criteria to be reportable segments are aggregated in the Emerging Verticals segment. Each of our reporting segments employs consistent accounting policies.

We develop, manufacture, market, support and sell CAD-based quality assurance products integrated with CAD-based inspection and statistical process control software and 3D documentation systems in each of these reportable segments. These activities represent more than 99% of consolidated sales.

Our Chief Operating Decision Maker (CODM), our Chief Executive Officer, evaluates segment performance and allocates resources based upon profitable growth. We use segment profit to evaluate the performance of our reportable segments. Segment profit is calculated as gross profit, net of selling and marketing expenses, for the reporting segment. Our definition of segment profit may not be comparable to similarly titled measures reported by other companies.

In the fourth quarter of 2018, we renamed our 3D Factory vertical and reporting segment “3D Manufacturing.” Additionally, commencing with the third quarter of 2019, depreciation and amortization expenses are being reported in the accompanying statements of operations to reflect departmental costs. Previously, those expenses were reported as a separate line item under operating expenses. Amounts related to depreciation and amortization expenses for the three and nine months ended September 30, 2018 have been restated throughout this Quarterly Report on Form 10-Q to reflect this reclassification of depreciation and amortization expenses and to conform to the current period presentation.

The following tables present information about our reportable segments, including a reconciliation of segment profit to loss from operations included in the condensed consolidated statements of operations for the three and nine months ended September 30, 2019 and 2018:


	3D Manufacturing		Construction BIM		Emerging Verticals		Total
Three Months Ended September 30, 2019

Total sales	$	56,017	$	23,884	$	10,615	$	90,516
Segment profit	$	13,660	$	6,720	$	174	$	20,554
General and administrative							15,662
Research and development							10,783
Loss from operations							$	(5,891)


	3D Manufacturing		Construction BIM		Emerging Verticals		Total
Three Months Ended September 30, 2018

Total sales	$	64,182	$	23,710	$	11,813	$	99,705
Segment profit	$	15,190	$	6,106	$	834	$	22,130
General and administrative							13,102
Research and development							11,740
Loss from operations							$	(2,712)


	3D Manufacturing		Construction BIM		Emerging Verticals		Total
Nine Months Ended September 30, 2019

Total sales	$	171,586	$	73,485	$	32,553	$	277,624
Segment profit (loss)	$	48,004	$	20,113	$	(1,024)	$	67,093
General and administrative							44,471
Research and development							33,048
Loss from operations							$	(10,426)


	3D Manufacturing		Construction BIM		Emerging Verticals		Total
Nine Months Ended September 30, 2018

Total sales	$	190,584	$	69,994	$	30,205	$	290,783
Segment profit	$	52,489	$	16,999	$	1,347	$	70,835
General and administrative							36,789
Research and development							34,138
Loss from operations							$	(92)

Short-term Investments	9 Months Ended
Short-term Investments	Sep. 30, 2019
Investments, Debt and Equity Securities [Abstract]
Short-term Investments	SHORT-TERM INVESTMENTSShort-term investments at September 30, 2019 were composed of U.S. Treasury Bills totaling $24.9 million, consisting of $8.9 million maturing on March 12, 2020 and $16.0 million maturing on December 12, 2019. The interest rates on the U.S. Treasury Bills held on September 30, 2019 that are maturing on March 12, 2020 and December 12, 2019 were 1.8% and 1.9%, respectively. Short-term investments at December 31, 2018 were composed of U.S. Treasury Bills totaling $24.8 million, consisting of $9.0 million, $10.9 million, and $4.9 million that matured on March 14, 2019, June 6, 2019, and June 20, 2019, respectively. The interest rates on the U.S. Treasury Bills held on December 31, 2018 that matured on March 14, 2019, June 6, 2019, and June 20, 2019 were 2.2%, 2.4%, and 2.3%, respectively. These investments are classified as held-to-maturity and recorded at cost plus accrued interest, which approximates fair value. We do not intend to sell these investments, and it is not more likely than not that we will be required to sell the investments before we recover their amortized cost bases.

Fair Value of Financial Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Level 1
Liabilities:
Contingent consideration	$ 0	$ 0
Total	0	0
Level 2
Liabilities:
Contingent consideration	0	0
Total	0	0
Level 3
Liabilities:
Contingent consideration	1,988	5,531
Total	$ 1,988	$ 5,531

Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales	$ 90,516	$ 99,705	$ 277,624	$ 290,783
United States
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales	37,166	38,090	108,174	115,670
EMEA
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales	26,424	29,577	87,554	88,858
Other APAC
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales	16,120	16,602	46,550	48,502
China
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales	7,751	11,340	25,007	26,973
Other Americas
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales	3,055	4,096	10,339	10,780
Product sales
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales	63,641	75,817	200,434	222,118
Product sales \| Product transferred to customers at a point in time
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales	63,641	75,817	200,434	222,118
Product sales \| Product transferred to customers over time
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales	0	0	0	0
Service sales
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales	26,875	23,888	77,190	68,665
Service sales \| Product transferred to customers at a point in time
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales	12,526	11,580	36,960	30,939
Service sales \| Product transferred to customers over time
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Sales	$ 14,349	$ 12,308	$ 40,230	$ 37,726

Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Schedule of Segment Reporting Information


	3D Manufacturing		Construction BIM		Emerging Verticals		Total
Three Months Ended September 30, 2019

Total sales	$	56,017	$	23,884	$	10,615	$	90,516
Segment profit	$	13,660	$	6,720	$	174	$	20,554
General and administrative							15,662
Research and development							10,783
Loss from operations							$	(5,891)


	3D Manufacturing		Construction BIM		Emerging Verticals		Total
Three Months Ended September 30, 2018

Total sales	$	64,182	$	23,710	$	11,813	$	99,705
Segment profit	$	15,190	$	6,106	$	834	$	22,130
General and administrative							13,102
Research and development							11,740
Loss from operations							$	(2,712)


	3D Manufacturing		Construction BIM		Emerging Verticals		Total
Nine Months Ended September 30, 2019

Total sales	$	171,586	$	73,485	$	32,553	$	277,624
Segment profit (loss)	$	48,004	$	20,113	$	(1,024)	$	67,093
General and administrative							44,471
Research and development							33,048
Loss from operations							$	(10,426)


	3D Manufacturing		Construction BIM		Emerging Verticals		Total
Nine Months Ended September 30, 2018

Total sales	$	190,584	$	69,994	$	30,205	$	290,783
Segment profit	$	52,489	$	16,999	$	1,347	$	70,835
General and administrative							36,789
Research and development							34,138
Loss from operations							$	(92)

Stock-Based Compensation - Additional Information (Details)	1 Months Ended	3 Months Ended		9 Months Ended
	May 31, 2018 shares	Sep. 30, 2019 USD ($) plan $ / shares shares	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) plan $ / shares shares	Sep. 30, 2018 USD ($) $ / shares	Dec. 31, 2018 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of compensation plans \| plan		2		2
Granted (shares) \| shares				0
Total intrinsic value of stock options exercised		$ 1,000,000.0	$ 4,700,000	$ 1,300,000	$ 7,500,000
Fair value of stock options vested		600,000	100,000	4,900,000	3,200,000
Allocated share-based compensation expense		$ 3,117,000	2,025,000	$ 7,933,000	$ 5,097,000
Black-Scholes Option Valuation Model
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option weighted average grant date fair value (in dollars per share) \| $ / shares					$ 23.43
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average fair value (USD per share) \| $ / shares		$ 47.81		$ 47.81		$ 42.66
Award vesting period				3 years
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average fair value (USD per share) \| $ / shares		$ 66.16		$ 66.16
Award vesting period				3 years
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares outstanding (in shares) \| shares		644,943		644,943		792,943
Restricted Stock and Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated share-based compensation expense		$ 3,400,000	$ 2,300,000	$ 8,700,000	$ 5,700,000
Unrecognized stock-based compensation expense		$ 12,200,000		$ 12,200,000
Weighted average, expected recognition period				2 years 1 month 6 days
2019 Awards \| Year One \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting installment (as a percent)				33.33%
2019 Awards \| Year One \| Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting installment (as a percent)				33.33%
2019 Awards \| Year Two \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting installment (as a percent)				33.33%
2019 Awards \| Year Two \| Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting installment (as a percent)				33.33%
2019 Awards \| Year Three \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting installment (as a percent)				33.33%
2019 Awards \| Year Three \| Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting installment (as a percent)				33.33%
2018 Awards \| Year One \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting installment (as a percent)				33.33%
2018 Awards \| Year One \| Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting installment (as a percent)				33.33%
2018 Awards \| Year Two \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting installment (as a percent)				33.33%
2018 Awards \| Year Two \| Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting installment (as a percent)				33.33%
2018 Awards \| Year Three \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting installment (as a percent)				33.33%
2018 Awards \| Year Three \| Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting installment (as a percent)				33.33%
2014 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional shares authorized (in shares) \| shares	1,000,000
Shares authorized (in shares) \| shares	2,974,543
Shares outstanding (in shares) \| shares		0		0
2004 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized (in shares) \| shares	891,960
Directors Plan \| Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term for value of shares to be granted upon election				$ 100,000
Directors Plan \| Restricted Stock \| Independent Chairman of the Board
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term for value of shares to be granted upon election				50,000
Directors Plan \| Restricted Stock \| Lead Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term for value of shares to be granted upon election				$ 40,000

Cover page - shares	9 Months Ended
Cover page - shares	Sep. 30, 2019	Oct. 28, 2019
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2019
Entity File Number	0-23081
Entity Registrant Name	FARO TECHNOLOGIES, INC
Entity Central Index Key	0000917491
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Incorporation, State or Country Code	FL
Entity Tax Identification Number	59-3157093
Entity Address, Address Line One	250 Technology Park,
Entity Address, City or Town	Lake Mary,
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	32746
City Area Code	407
Local Phone Number	333-9911
Title of 12(b) Security	Common Stock, par value $.001
Trading Symbol	FARO
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		17,404,087

Earnings (Loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2019

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:


	Three Months Ended
	September 30, 2019				September 30, 2018
	Shares	Per-Share Amount		Shares	Per-Share Amount
Basic loss per share	17,367,228	$	(0.36)	17,122,705	$	(0.15)
Effect of dilutive securities	—	—		—	—
Diluted loss per share	17,367,228	$	(0.36)	17,122,705	$	(0.15)


	Nine Months Ended
	September 30, 2019				September 30, 2018
	Shares	Per-Share Amount		Shares	Per-Share Amount
Basic loss per share	17,352,386	$	(0.72)	16,976,459	$	(0.05)
Effect of dilutive securities	—	—		—	—
Diluted loss per share	17,352,386	$	(0.72)	16,976,459	$	(0.05)

Variable Interest Entity	9 Months Ended
Variable Interest Entity	Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Variable Interest Entities	VARIABLE INTEREST ENTITY A variable interest entity (“VIE”) is an entity that has one of three characteristics: (1) it is controlled by someone other than its shareowners or partners, (2) its shareowners or partners are not economically exposed to the entity’s earnings (for example, they are protected against losses), or (3) it lacks sufficient equity to permit the entity to finance its activities without additional subordinated financial support from other parties. On April 27, 2018, we invested $1.8 million in present4D GmbH (“present4D”), a software solutions provider for professional virtual reality presentations and training environments, in the form of an equity capital contribution. This initial contribution represented a minority investment in present4D. This investment’s business purpose is to coordinate the design and development of modules supporting compatibility with virtual reality for our existing software offerings. As of our April 27, 2018 investment date, present4D was thinly capitalized and lacked sufficient equity to finance its activities without additional subordinated financial support and is classified as a VIE. We do not have power over decisions that significantly affect present4D’s economic performance and do not represent its primary beneficiary. After April 27, 2020, present4D may request additional equity financing up to $1.8 million from us in exchange for additional share capital, which additional equity financing would be at our discretion. We did not provide support to present4D during 2018 or the first six months of 2019 outside of our initial investment of $1.8 million. During the three months ended September 30, 2019, we originated a $0.5 million note with present4D, which we may convert into additional equity in present4D at our discretion in the event of a default. Further, the note is collateralized by the perpetual and royalty-free, non-exclusive, transferable and sublicensable license granted to us to use present4D’s software. Our 16.5% portion of present4D’s net loss for each of the three and nine month periods ended September 30, 2019 was less than $0.1 million. Present4D is currently accounted for using the equity method of accounting. Our equity in the net loss from this equity-method investment is recorded as loss with a corresponding decrease in the investment. During the three months ended June 30, 2019, we determined it is more likely than not that we will not recover our cost basis in present4D and recorded an impairment charge of $1.5 million, which is included in Other expense, net on our statement of operations for the nine months ended September 30, 2019. Our investment in this unconsolidated VIE at September 30, 2019 was $0.2 million and at December 31, 2018 was $1.7 million and is included in Other long-term assets in our condensed consolidated balance sheets.

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2019	Mar. 31, 2019
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)	18,816,598	18,676,059
Common stock, shares outstanding (in shares)	17,404,087	17,253,011
Treasury stock, shares (in shares)	1,412,511	1,423,048

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Common Stock in Treasury
Beginning Balance (in shares) at Dec. 31, 2017		16,796,884
Beginning Balance at Dec. 31, 2017	$ 352,066	$ 18	$ 223,055	$ 168,624	$ (7,822)	$ (31,809)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	455			455
Currency translation adjustment	5,214				5,214
Stock-based compensation	1,553		1,553
Common stock issued, net of shares withheld for employee taxes (in shares)		158,795
Common stock issued, net of shares withheld for employee taxes	6,676		6,601			75
Ending Balance (in shares) at Mar. 31, 2018		16,955,679
Ending Balance at Mar. 31, 2018	368,329	$ 18	231,209	171,444	(2,608)	(31,734)
Beginning Balance (in shares) at Dec. 31, 2017		16,796,884
Beginning Balance at Dec. 31, 2017	352,066	$ 18	223,055	168,624	(7,822)	(31,809)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(828)
Currency translation adjustment	(9,074)
Ending Balance (in shares) at Sep. 30, 2018		17,252,160
Ending Balance at Sep. 30, 2018	370,959	$ 19	249,284	170,161	(16,896)	(31,609)
Beginning Balance (in shares) at Mar. 31, 2018		16,955,679
Beginning Balance at Mar. 31, 2018	368,329	$ 18	231,209	171,444	(2,608)	(31,734)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	1,205			1,205
Currency translation adjustment	(9,377)				(9,377)
Stock-based compensation	1,847		1,847
Common stock issued, net of shares withheld for employee taxes (in shares)		23,079
Common stock issued, net of shares withheld for employee taxes	699		699
Ending Balance (in shares) at Jun. 30, 2018		16,978,758
Ending Balance at Jun. 30, 2018	362,703	$ 18	233,755	172,649	(11,985)	(31,734)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(2,488)			(2,488)
Currency translation adjustment	(4,911)				(4,911)
Stock-based compensation	2,317		2,317
Common stock issued, net of shares withheld for employee taxes (in shares)		273,402
Common stock issued, net of shares withheld for employee taxes	13,338	$ 1	13,212			125
Ending Balance (in shares) at Sep. 30, 2018		17,252,160
Ending Balance at Sep. 30, 2018	370,959	$ 19	249,284	170,161	(16,896)	(31,609)
Beginning Balance (in shares) at Dec. 31, 2018		17,253,011
Beginning Balance at Dec. 31, 2018	376,609	$ 19	251,329	175,353	(18,483)	(31,609)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	152			152
Currency translation adjustment	(1,564)				(1,564)
Stock-based compensation	2,564		2,564
Common stock issued, net of shares withheld for employee taxes (in shares)		64,864
Common stock issued, net of shares withheld for employee taxes	$ (846)		(1,053)			207
Ending Balance (in shares) at Mar. 31, 2019	17,253,011	17,317,875
Ending Balance at Mar. 31, 2019	$ 376,588	$ 19	252,840	175,178	(20,047)	(31,402)
Beginning Balance (in shares) at Dec. 31, 2018		17,253,011
Beginning Balance at Dec. 31, 2018	376,609	$ 19	251,329	175,353	(18,483)	(31,609)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(12,452)
Currency translation adjustment	$ (5,947)
Ending Balance (in shares) at Sep. 30, 2019	17,404,087	17,404,087
Ending Balance at Sep. 30, 2019	$ 367,525	$ 19	260,737	162,574	(24,430)	(31,375)
Beginning Balance (in shares) at Mar. 31, 2019	17,253,011	17,317,875
Beginning Balance at Mar. 31, 2019	$ 376,588	$ 19	252,840	175,178	(20,047)	(31,402)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(6,405)			(6,405)
Currency translation adjustment	1,263				1,263
Stock-based compensation	2,752		2,752
Common stock issued, net of shares withheld for employee taxes (in shares)		21,187
Common stock issued, net of shares withheld for employee taxes	141		114			27
Ending Balance (in shares) at Jun. 30, 2019		17,339,062
Ending Balance at Jun. 30, 2019	374,339	$ 19	255,706	168,773	(18,784)	(31,375)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(6,199)			(6,199)
Currency translation adjustment	(5,646)				(5,646)
Stock-based compensation	3,387		3,387
Common stock issued, net of shares withheld for employee taxes (in shares)		65,025
Common stock issued, net of shares withheld for employee taxes	$ 1,644		1,644
Ending Balance (in shares) at Sep. 30, 2019	17,404,087	17,404,087
Ending Balance at Sep. 30, 2019	$ 367,525	$ 19	$ 260,737	$ 162,574	$ (24,430)	$ (31,375)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Impact of Recently Issued Accounting Pronouncements - Additional Information (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Accounting Changes and Error Corrections [Abstract]
Operating lease right-of-use asset	$ 18,672	$ 0
Operating lease liability	19,708	19,708
Finance lease, Right-of-use asset	782
Finance lease, liability	$ 829	$ 829

Principles of Consolidation (Policies)	9 Months Ended
Principles of Consolidation (Policies)	Sep. 30, 2019
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. All intercompany transactions and balances have been eliminated.
Foreign Currency Translation	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 and Recently Issued Accounting Standards	Impact of Recently Adopted Accounting Standards In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements to enable users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, was issued by the FASB in July 2018 and allows for a cumulative-effect adjustment transition method of adoption. The new guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those years. We adopted ASU 2016-02 effective as of January 1, 2019 utilizing the cumulative-effect adjustment transition method of adoption, which resulted in the recognition on our condensed consolidated balance sheet as of September 30, 2019 of $18.7 million of right-of-use assets for operating leases, $19.7 million of lease liability for operating leases, $0.8 million of property and equipment, net for finance leases and $0.8 million of lease liability for finance leases under which we function as a lessee. We elected certain practical expedients available under the transition provisions to (i) allow aggregation of non-lease components with the related lease components when evaluating accounting treatment, (ii) apply the modified retrospective adoption method, utilizing the simplified transition option, which allows us to continue to apply the legacy guidance in FASB ASC Topic 840, including its disclosure requirements, in the comparative periods presented in the year of adoption, and (iii) use hindsight in determining the lease term (that is, when considering our options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of our right-of-use assets. The adoption of ASU 2016-02 also required us to include any initial direct costs, which are incremental costs that would not have been incurred had the lease not been obtained, in the right-of-use assets. The recognition of these costs in connection with our adoption of this guidance did not have a material impact on our condensed consolidated financial statements. Impact of Recently Issued Accounting Standards In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which is intended to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the current guidance, performance of Step 2 requires us to calculate the implied fair value of goodwill by following procedures that would be required to determine the fair value of assets acquired and liabilities assumed in a business combination. Under the new guidance, we will perform our goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge will be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value up to the amount of the goodwill allocated to the reporting unit. The new guidance also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform Step 2 of the goodwill impairment test if it fails the qualitative assessment. As a result, all reporting units will be subject to the same impairment assessment. We will still have the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 becomes effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted for annual or any interim goodwill impairment tests after January 1, 2017. The amendments in this ASU will be applied on a prospective basis. Disclosure of the nature and reason for the change in accounting principle is required upon transition. This disclosure is required in the first annual period and in the interim period within the first annual period when we initially adopt the amendments in this ASU. We plan to adopt this guidance for our fiscal year ending December 31, 2020. We do not expect that the adoption of this guidance will have a material impact on our condensed 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 will adopt ASU 2016-13 effective January 1, 2020. We are currently evaluating the effect of the adoption of ASU 2016-13, but we do not expect that the adoption of this guidance will have a material impact on our condensed consolidated financial statements.
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 warranty when the customer’s unit requires service or repair and as training equipment. Service inventory is available for sale; however, management does not expect service inventory to be sold within 12 months and, as such, classifies this inventory as a long-term asset. Service inventory that we utilize for training or repairs and which we deem as no longer available for sale is transferred to fixed assets at the lower of cost or net realizable value and depreciated over its remaining life, typically three years.

Fair Value of Financial Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Assets and 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:


	As of September 30, 2019
	Level 1		Level 2		Level 3
Liabilities:
Contingent consideration ⁽¹⁾	$	—	$	—	$	1,988
Total	$	—	$	—	$	1,988
	As of December 31, 2018
	Level 1		Level 2		Level 3
Liabilities:
Contingent consideration ⁽¹⁾	$	—	$	—	$	5,531
Total	$	—	$	—	$	5,531

⁽¹⁾Contingent consideration liability represents arrangements to pay the former owners of certain companies we acquired based on the former owners attaining future product release milestones. We use a probability-weighted discounted cash flow model to estimate the fair value of contingent consideration liabilities. These probability weightings are developed internally and assessed on a quarterly basis. As of September 30, 2019, $2.0 million of these arrangements are reported in Accrued liabilities in our condensed consolidated balance sheet. As of December 31, 2018, $3.4 million of these arrangements were reported in Accrued liabilities and $2.1 million were reported in Other long-term liabilities in our condensed consolidated balance sheet. The remaining undiscounted maximum payment under these arrangements was $2.2 million as of September 30, 2019. The change in the fair value of the contingent consideration from December 31, 2018 to September 30, 2019 was primarily related to our payment of $3.1 million as part of these arrangements during the nine months ended September 30, 2019, as well as changes in our estimates regarding the probability that the former owners will attain certain product release milestones.

Loss Per Share

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Loss Per Share

LOSS PER SHARE

Basic earnings (loss) per share is computed by dividing net income by the weighted average number of shares outstanding. Diluted earnings (loss) per share is computed by also considering the impact of potential common stock on both net income 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 nine months ended September 30, 2019, there were approximately 1,050,039 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 nine months ended September 30, 2018, there were approximately 546,538 and 627,733 shares, respectively, 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:


	Three Months Ended
	September 30, 2019				September 30, 2018
	Shares	Per-Share Amount		Shares	Per-Share Amount
Basic loss per share	17,367,228	$	(0.36)	17,122,705	$	(0.15)
Effect of dilutive securities	—	—		—	—
Diluted loss per share	17,367,228	$	(0.36)	17,122,705	$	(0.15)


	Nine Months Ended
	September 30, 2019				September 30, 2018
	Shares	Per-Share Amount		Shares	Per-Share Amount
Basic loss per share	17,352,386	$	(0.72)	16,976,459	$	(0.05)
Effect of dilutive securities	—	—		—	—
Diluted loss per share	17,352,386	$	(0.72)	16,976,459	$	(0.05)

Description of Business (Tables)

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Error Corrections and Prior Period Adjustments


For the three months ended, September 30, 2018
	As Reported		Adjustment		As Adjusted
Cost of Sales
Product	$	34,004	$	860	$	34,864
Service	13,384		845		14,229
Total cost of sales	$	47,388	$	1,705	$	49,093

Operating Expenses
Selling and marketing	$	27,811	$	671	$	28,482
General and administrative	12,496		606		13,102
Depreciation and amortization	4,747		(4,747)		—
Research and development	9,975		1,765		11,740
Total operating expenses	$	55,029	$	(1,705)	$	53,324


For the nine months ended, September 30, 2018
	As Reported		Adjustment		As Adjusted
Cost of Sales
Product	$	88,766	$	2,555	$	91,321
Service	38,223		2,527		$	40,750
Total cost of sales	$	126,989	$	5,082	$	132,071

Operating Expenses
Selling and marketing	$	86,166	$	1,711	$	87,877
General and administrative	34,889		1,900		$	36,789
Depreciation and amortization	13,467		(13,467)		$	—
Research and development	29,364		4,774		$	34,138
Total operating expenses	$	163,886	$	(5,082)	$	158,804

Inventories

9 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

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 warranty when the customer’s unit requires service or repair and as training equipment. Service inventory is available for sale; however, management does not expect service inventory to be sold within 12 months and, as such, classifies this inventory as a long-term asset. Service inventory that we utilize for training or repairs and which we deem as no longer available for sale is transferred to fixed assets at the lower of cost or net realizable value and depreciated over its remaining life, typically three years.

Inventories consist of the following:


	As of September 30, 2019		As of December 31, 2018
Raw materials	$	36,944	$	39,859
Finished goods	32,835		25,585
Inventories, net	$	69,779	$	65,444

Service and sales demonstration inventory, net	$	39,509	$	39,563

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2019
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 September 30, 2019, we had approximately $54.0 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. As a result of the GSA Matter, for fourth quarter 2018, we reduced our total sales by a $4.8 million estimated cumulative sales adjustment, representative of the last six years of estimated overcharges to the Government under the GSA Contracts. In addition, for the fourth quarter of 2018, we recorded $0.5 million of imputed interest related to the estimated cumulative sales adjustment, which increased Interest expense, net and resulted in an estimated total liability of $5.3 million for the GSA Matter. This adjustment was based on our preliminary review as of February 20, 2019, the date of our Annual Report on Form 10-K for the year ended December 31, 2018. In addition, in first quarter 2019, we recorded an additional $0.1 million of imputed interest related to the estimated cumulative sales adjustment. On July 15, 2019, we submitted a report to the GSA and its Office of Inspector General setting forth the findings of the Review conducted by our outside legal counsel and forensic accountants. Based on the results of the Review, we reduced our total sales for second quarter 2019 by an incremental $5.8 million sales adjustment, reflecting an estimated aggregate overcharge of $10.6 million under the GSA Contracts for the period from July 2011 to March 2019. In addition, we recorded an incremental $0.4 million of imputed interest related to the estimated cumulative sales adjustment in the second quarter 2019, which increased Interest expense, net and resulted in a $6.2 million total incremental increase in the estimated total liability for the GSA Matter. We recorded an incremental $0.1 million of imputed interest related to the estimated cumulative sales adjustment in the third quarter 2019. As of the date of the filing of this Quarterly Report on Form 10-Q, we have recorded an aggregate estimated total liability for the GSA Matter of $11.7 million.While we have reported this matter and submitted the findings of the Review to the GSA, the Government may conduct its own investigation or review (including an audit). We intend to cooperate fully with any Government inquiry. The Government’s review of, or investigation into, this matter could result in civil and criminal penalties, administrative sanctions, and contract remedies being imposed on us, including but not limited to, termination of the GSA Contracts, repayments of amounts already received under the GSA Contracts, forfeiture of profits, damages, suspension of payments, fines, and suspension or debarment from doing business with the Government and possibly U.S. state and local governments. We may also be subject to litigation and recovery under the federal False Claims Act and possibly similar state laws, which could include claims for treble damages, penalties, fees and costs. As a result, we cannot reasonably predict the outcome of the Government’s review of, or investigation into, this matter at this time or the resulting future financial impact on us. Any of these outcomes could have a material adverse effect on our reputation, our sales, results of operations, cash flows and financial condition, and the trading price of our common stock. In addition, we have incurred, and will continue to incur, legal and related costs in connection with the Review and the Government’s response to this matter.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Sales	$ 90,516	$ 99,705	$ 277,624	$ 290,783
Cost of Sales	39,744	49,093	123,093	132,071
Gross Profit	50,772	50,612	154,531	158,712
Operating Expenses
Selling and marketing	30,218	28,482	87,438	87,877
General and administrative	15,662	13,102	44,471	36,789
Depreciation and amortization			14,203	13,467
Research and development	10,783	11,740	33,048	34,138
Total operating expenses	56,663	53,324	164,957	158,804
Loss from operations	(5,891)	(2,712)	(10,426)	(92)
Other (income) expense
Interest (income) expense, net	(24)	(96)	72	(205)
Other expense, net	514	226	2,398	868
Loss before income tax (benefit) expense	(6,381)	(2,842)	(12,896)	(755)
Income tax (benefit) expense	(182)	(354)	(444)	73
Net loss	$ (6,199)	$ (2,488)	$ (12,452)	$ (828)
Net (loss) income per share - Basic (in dollars per share)	$ (0.36)	$ (0.15)	$ (0.72)	$ (0.05)
Net (loss) income per share - Diluted (in dollars per share)	$ (0.36)	$ (0.15)	$ (0.72)	$ (0.05)
Weighted average shares - Basic (in shares)	17,367,228	17,122,705	17,352,386	16,976,459
Weighted average shares - Diluted (in shares)	17,367,228	17,122,705	17,352,386	16,976,459
Product
Sales	$ 63,641	$ 75,817	$ 200,434	$ 222,118
Cost of Sales	26,495	34,864	83,632	91,321
Service
Sales	26,875	23,888	77,190	68,665
Cost of Sales	$ 13,249	$ 14,229	$ 39,461	$ 40,750

Segment Reporting - Summary of Reportable Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Segment Reporting Information [Line Items]
Total sales	$ 90,516	$ 99,705	$ 277,624	$ 290,783
Segment profit	50,772	50,612	154,531	158,712
General and administrative	15,662	13,102	44,471	36,789
Research and development	10,783	11,740	33,048	34,138
Income (loss) from operations	(5,891)	(2,712)	(10,426)	(92)
3D Manufacturing
Segment Reporting Information [Line Items]
Total sales	56,017	64,182	171,586	190,584
Construction BIM
Segment Reporting Information [Line Items]
Total sales	23,884	23,710	73,485	69,994
Emerging Verticals
Segment Reporting Information [Line Items]
Total sales	10,615	11,813	32,553	30,205
Operating Segments
Segment Reporting Information [Line Items]
Segment profit	20,554	22,130	67,093	70,835
Operating Segments \| 3D Manufacturing
Segment Reporting Information [Line Items]
Segment profit	13,660	15,190	48,004	52,489
Operating Segments \| Construction BIM
Segment Reporting Information [Line Items]
Segment profit	6,720	6,106	20,113	16,999
Operating Segments \| Emerging Verticals
Segment Reporting Information [Line Items]
Segment profit	$ 174	$ 834	$ (1,024)	$ 1,347

Fair Value of Financial Measurements

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial 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:


	As of September 30, 2019
	Level 1		Level 2		Level 3
Liabilities:
Contingent consideration ⁽¹⁾	$	—	$	—	$	1,988
Total	$	—	$	—	$	1,988
	As of December 31, 2018
	Level 1		Level 2		Level 3
Liabilities:
Contingent consideration ⁽¹⁾	$	—	$	—	$	5,531
Total	$	—	$	—	$	5,531

Leases - Narrative (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
Leases - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2019
Lessee, Lease, Description [Line Items]
Renewal term		8 years
Termination window		3 months
Short term lease cost	$ 0.1	$ 0.2
Minimum
Lessee, Lease, Description [Line Items]
Term of contract		1 year
Maximum
Lessee, Lease, Description [Line Items]
Term of contract		7 years

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Schedule of Valuation Assumptions

For performance-based restricted stock units granted during the nine months ended September 30, 2019 valued using the Monte Carlo Simulation valuation model, we used the following assumptions:


	Nine Months Ended
	September 30, 2019
Risk-free interest rate	1.8% - 2.48%
Expected dividend yield	—	%
Expected volatility	45.0	%
Weighted-average expected volatility	45.0	%

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

For stock options granted during the nine months ended September 30, 2018 valued using the Black-Scholes option valuation model, we used the following assumptions:


	Nine Months Ended
	September 30, 2018
Risk-free interest rate	2.65	%
Expected dividend yield	—	%
Expected term of option	4 years
Expected volatility	45.0	%
Weighted-average expected volatility	45.0	%

Schedule of Stock Option Activity and Weighted Average Exercise Prices

A summary of stock option activity and weighted-average exercise prices during the nine months ended September 30, 2019 follows:


	Options	Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value as of September 30, 2019
Outstanding at January 1, 2019	792,943	$	47.59
Granted	—	—
Forfeited or expired	(77,064)	54.64
Exercised	(70,936)	32.71
Outstanding at September 30, 2019	644,943	$	48.66	3.8	$	3,757
Options exercisable at September 30, 2019	577,240	$	48.62	2.6	$	3,331

Schedule of Restricted Stock and Restricted Stock Units Activity and Weighted-Average Grant Date Fair Value

The following table summarizes the restricted stock and restricted stock unit activity and weighted average grant-date fair values for the nine months ended September 30, 2019:


	Shares	Weighted-Average Grant Date Fair Value
Non-vested at January 1, 2019	311,000	$	42.66
Granted	250,359	49.05
Forfeited	(25,738)	47.57
Vested	(130,527)	37.94
Non-vested at September 30, 2019	405,094	$	47.81

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:


	Three Months Ended						Nine Months Ended
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Cost of Sales
Product	$	170	$	143	$	482	$	351
Service	100		98		288		269
Total cost of sales	$	270	$	241	$	770	$	620
Operating Expenses
Selling and marketing	$	356	$	411	$	1,110	$	1,123
General and administrative	2,389		1,172		5,942		2,808
Research and development	372		442		881		1,166
Total operating expenses	$	3,117	$	2,025	$	7,933	$	5,097

Principles of Consolidation	9 Months Ended
Principles of Consolidation	Sep. 30, 2019
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.

Impact of Recently Issued Accounting Pronouncements	9 Months Ended
Impact of Recently Issued Accounting Pronouncements	Sep. 30, 2019
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 February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements to enable users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, was issued by the FASB in July 2018 and allows for a cumulative-effect adjustment transition method of adoption. The new guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those years. We adopted ASU 2016-02 effective as of January 1, 2019 utilizing the cumulative-effect adjustment transition method of adoption, which resulted in the recognition on our condensed consolidated balance sheet as of September 30, 2019 of $18.7 million of right-of-use assets for operating leases, $19.7 million of lease liability for operating leases, $0.8 million of property and equipment, net for finance leases and $0.8 million of lease liability for finance leases under which we function as a lessee. We elected certain practical expedients available under the transition provisions to (i) allow aggregation of non-lease components with the related lease components when evaluating accounting treatment, (ii) apply the modified retrospective adoption method, utilizing the simplified transition option, which allows us to continue to apply the legacy guidance in FASB ASC Topic 840, including its disclosure requirements, in the comparative periods presented in the year of adoption, and (iii) use hindsight in determining the lease term (that is, when considering our options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of our right-of-use assets. The adoption of ASU 2016-02 also required us to include any initial direct costs, which are incremental costs that would not have been incurred had the lease not been obtained, in the right-of-use assets. The recognition of these costs in connection with our adoption of this guidance did not have a material impact on our condensed consolidated financial statements. Impact of Recently Issued Accounting Standards In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which is intended to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the current guidance, performance of Step 2 requires us to calculate the implied fair value of goodwill by following procedures that would be required to determine the fair value of assets acquired and liabilities assumed in a business combination. Under the new guidance, we will perform our goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge will be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value up to the amount of the goodwill allocated to the reporting unit. The new guidance also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform Step 2 of the goodwill impairment test if it fails the qualitative assessment. As a result, all reporting units will be subject to the same impairment assessment. We will still have the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 becomes effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted for annual or any interim goodwill impairment tests after January 1, 2017. The amendments in this ASU will be applied on a prospective basis. Disclosure of the nature and reason for the change in accounting principle is required upon transition. This disclosure is required in the first annual period and in the interim period within the first annual period when we initially adopt the amendments in this ASU. We plan to adopt this guidance for our fiscal year ending December 31, 2020. We do not expect that the adoption of this guidance will have a material impact on our condensed 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 will adopt ASU 2016-13 effective January 1, 2020. We are currently evaluating the effect of the adoption of ASU 2016-13, but we do not expect that the adoption of this guidance will have a material impact on our condensed consolidated financial statements.

Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended				9 Months Ended		72 Months Ended	93 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Mar. 31, 2019
Commitments and Contingencies [Line Items]
Purchase commitment, due in next twelve months	$ 54,000				$ 54,000
Revenue from contract with customer	90,516			$ 99,705	$ 277,624	$ 290,783
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]
Charges to income from price adjustment clauses							$ 4,800
GSA matter and imputed interest	400	$ 100	$ 500
Total estimated liability from price adjustment clauses	11,700		$ 5,300		$ 11,700			$ 5,300
Reduction in sales, adjustment	5,800
Estimated aggregate overcharge in contracts								$ 10,600
Other Expense \| Government Contract
Commitments and Contingencies [Line Items]
Total estimated liability from price adjustment clauses	$ 6,200				$ 6,200

Stock-Based Compensation - Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Allocated share-based compensation expense	$ 3,117	$ 2,025	$ 7,933	$ 5,097
Cost of Sales
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Allocated share-based compensation expense	270	241	770	620
Cost of Sales \| Product
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Allocated share-based compensation expense	170	143	482	351
Cost of Sales \| Service
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Allocated share-based compensation expense	100	98	288	269
Selling and Marketing Expense
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Allocated share-based compensation expense	356	411	1,110	1,123
General and Administrative Expense
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Allocated share-based compensation expense	2,389	1,172	5,942	2,808
Research and Development Expense
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Allocated share-based compensation expense	$ 372	$ 442	$ 881	$ 1,166

Accounts Receivable (Tables)

9 Months Ended

Sep. 30, 2019

Receivables [Abstract]

Schedule of Accounts Receivable

Accounts receivable consist of the following:


	As of September 30, 2019		As of December 31, 2018
Accounts receivable	$	67,162	$	90,675
Allowance for doubtful accounts	(2,454)		(1,748)
Total	$	64,708	$	88,927

Segment Reporting - Additional Information (Details)	9 Months Ended
Segment Reporting - Additional Information (Details)	Sep. 30, 2019 segment
Segment Reporting [Abstract]
Number of reportable segments	3
Product sales to consolidated sales (more than) (as a percent)	99.00%

Revenues (Tables)

9 Months Ended

Sep. 30, 2019

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):


	For the Three Months Ended September 30,
	2019		2018
Product sales
Product transferred to customers at a point in time	$	63,641	$	75,817
Product transferred to customers over time	—		—
	$	63,641	$	75,817


	For the Nine Months Ended September 30,
	2019		2018
Product sales
Product transferred to customers at a point in time	$	200,434	$	222,118
Product transferred to customers over time	—		—
	$	200,434	$	222,118


	For the Three Months Ended September 30,
	2019		2018
Service sales
Service transferred to customers at a point in time	$	12,526	$	11,580
Service transferred to customers over time	14,349		12,308
	$	26,875	$	23,888


	For the Nine Months Ended September 30,
	2019		2018
Service sales
Service transferred to customers at a point in time	$	36,960	$	30,939
Service transferred to customers over time	40,230		37,726
	$	77,190	$	68,665

The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers (in thousands, unaudited):


	For the Three Months Ended September 30,
	2019		2018
Total sales to external customers
United States	$	37,166	$	38,090
EMEA ⁽¹⁾	26,424		29,577
Other APAC ⁽¹⁾	16,120		16,602
China	7,751		11,340
Other Americas ⁽¹⁾	3,055		4,096
	$	90,516	$	99,705


	For the Nine Months Ended September 30,
	2019		2018
Total sales to external customers
United States	$	108,174	$	115,670
EMEA ⁽¹⁾	87,554		88,858
Other APAC ⁽¹⁾	46,550		48,502
China	25,007		26,973
Other Americas ⁽¹⁾	10,339		10,780
	$	277,624	$	290,783

⁽¹⁾Regions represent Europe, the Middle East, and Africa (EMEA); Asia-Pacific, excluding China (Other APAC); and Canada, Mexico, and Brazil (Other Americas).

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Operating activities:
Net loss	$ (12,452)	$ (828)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	14,203	13,467
Stock-based compensation	8,703	5,717
Provisions for bad debts, net of recoveries	1,000	360
Loss on disposal of assets	552	401
Provision for excess and obsolete inventory	2,431	5,357
Deferred income tax benefit	(69)	(161)
Impairment charge on equity method investment	1,535	0
Decrease (Increase) in:
Accounts receivable	21,883	(1,882)
Inventories	(9,471)	(12,104)
Prepaid expenses and other current assets	640	(4,257)
(Decrease) Increase in:
Accounts payable and accrued liabilities	(13,404)	569
Increase (decrease) in contract with customer, liability	6,470	0
Income taxes payable	(3,679)	(5,082)
Unearned service revenues	6,470	0
Net cash provided by operating activities	23,466	4,865
Investing activities:
Purchases of property and equipment	(5,922)	(6,895)
Proceeds from sale of investments	33,700	22,000
Purchases of investments	(33,700)	(31,000)
Payments for intangible assets	(2,035)	(1,716)
Acquisition of businesses	0	(27,638)
Loan to Affiliate	(549)	0
Equity investments and advances to affiliates	0	(1,786)
Net cash used in investing activities	(8,506)	(47,035)
Financing activities:
Payments on finance leases	(273)	(84)
Payments of contingent consideration for acquisitions	(3,101)	(638)
Payments for taxes related to net share settlement of equity awards	(1,389)	0
Proceeds from issuance of stock related to stock option exercises	2,328	20,901
Net cash (used in) provided by financing activities	(2,435)	20,179
Increase (decrease) in cash and cash equivalents	10,300	(25,862)
Effect of exchange rate changes on cash and cash equivalents	(2,225)	(3,871)
Cash and cash equivalents, beginning of period	108,783	140,960
Cash and cash equivalents, end of period	119,083	115,098
Customer deposits
(Decrease) Increase in:
Increase (decrease) in contract with customer, liability	(685)	(107)
Unearned service revenues	(685)	(107)
Current portion of unearned service revenues
(Decrease) Increase in:
Increase (decrease) in contract with customer, liability	5,809	3,415
Unearned service revenues	$ 5,809	$ 3,415

Revenues - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Revenues - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
Deferred commission	$ 2.8	$ 2.7	$ 2.8	$ 2.7
Recognized service revenue	6.3	5.3	25.9	21.5
Refund liability	0.1	0.1	0.1	0.1
Prepaid expenses and other current assets
Disaggregation of Revenue [Line Items]
Deferred commission	1.9	1.8	1.9	1.8
Other long-term assets
Disaggregation of Revenue [Line Items]
Deferred commission	$ 0.9	$ 0.9	$ 0.9	$ 0.9

Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2019

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consist of the following:


	As of September 30, 2019		As of December 31, 2018
Accrued compensation and benefits	$	13,489	$	17,745
Accrued warranties	2,111		2,571
Professional and legal fees	2,319		2,154
Taxes other than income	2,570		3,550
General services administration contract contingent liability (see Note 15)	11,739		5,267
Other accrued liabilities	3,027		5,040
	$	35,255	$	36,327

Schedule of Activity Related to Accrued Warranties

Activity related to accrued warranties was as follows:


	Nine Months Ended
	September 30, 2019		September 30, 2018
Balance, beginning of period	$	2,571	$	2,628
Provision for warranty expense	2,672		2,888
Fulfillment of warranty obligations	(3,132)		(2,911)
Balance, end of period	$	2,111	$	2,605

Stock-Based Compensation - Assumptions Used to Estimate The Fair Value of Time-Based Stock Options (Details)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Expected dividend yield	0.00%
Expected volatility	45.00%
Weighted-average expected volatility	45.00%
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Risk-free interest rate		2.65%
Expected dividend yield		0.00%
Expected term of option		4 years
Expected volatility		45.00%
Weighted-average expected volatility		45.00%
Minimum \| Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Risk-free interest rate	1.80%
Maximum \| Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Risk-free interest rate	2.48%

Leases - Maturities of lease liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Operating leases
2019 (excluding the first 9 months)		$ 1,778
2020		6,454
2021		3,562
2022		2,892
2023		2,711
Thereafter		4,987
Total lease payments		22,384
Less imputed interest		(2,676)
Total	$ 19,708	19,708
Financing leases
2019 (excluding the first 9 months)		94
2020		351
2021		312
2022		86
2023		37
Thereafter		6
Total lease payments		886
Less imputed interest		(57)
Total	$ 829	$ 829

Business Combinations (Tables)

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Schedule of Fair Values of Assets Acquired and Liabilities Assumed for Acquisitions

Following is a summary of our allocations of the purchase price to the fair values of the assets acquired and liabilities assumed as of the date of each acquisition:


	Laser Control Systems		Photocore		Lanmark		Open Technologies ⁽²⁾
Accounts receivable	$	—	$	—	$	610	$	2,735
Inventory	—		—		299		1,852
Other assets	—		—		76		634
Intangible assets	1,400		1,435		1,366		7,821
Goodwill	928		1,010		5,355		13,573
Accounts payable and accrued liabilities	—		—		(159)		(2,926)
Other liabilities ⁽¹⁾	(579)		—		(971)		(5,201)
Deferred income tax liabilities	—		—		(325)		(1,876)
Total purchase price, net of cash acquired	$	1,749	$	2,445	$	6,251	$	16,612

⁽¹⁾ For Laser Control Systems, Lanmark and Open Technologies, this total consists primarily of the fair value of the projected contingent consideration.

⁽²⁾ Amounts converted from Euros to U.S. Dollars based on the foreign exchange rate on the closing date of the acquisition.

Summary of the Purchase Price Preliminarily Allocated to the Intangible Assets Acquired for the Acquisitions

Following are the details of the purchase price allocated to the intangible assets acquired for the acquisitions noted above:


	Laser Control Systems					Photocore				Lanmark			Open Technologies
	Amount		Weighted Average Life (Years)	Amount		Weighted Average Life (Years)	Amount		Weighted Average Life (Years)	Amount		Weighted Average Life (Years)
Brand	26		1	22		1	26		1	103		1
Non-competition agreement	29		3	9		3	—		0	—		0
Technology	1,319		7	1,343		7	760		7	4,441		7
Customer relationship	26		10	61		10	580		10	3,277		10
Fair value of intangible assets acquired	$	1,400	7	$	1,435	7	$	1,366	8	$	7,821	8

Earnings (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		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Earnings Per Share [Abstract]
Antidilutive securities (in shares)	1,050,039	546,538	1,050,039	627,733
Earnings Per Share, Basic and Diluted [Abstract]
Basic (loss) earnings per share (in shares)	17,367,228	17,122,705	17,352,386	16,976,459
Effect of dilutive securities (in shares)	0	0	0	0
Diluted (loss) earnings (in shares)	17,367,228	17,122,705	17,352,386	16,976,459
Basic (loss) earnings (in dollars per share)	$ (0.36)	$ (0.15)	$ (0.72)	$ (0.05)
Effect of dilutive securities (in dollars per share)	0	0	0	0
Diluted (loss) earnings (in dollars per share)	$ (0.36)	$ (0.15)	$ (0.72)	$ (0.05)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

Leases - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
Leases - Lease Cost (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Sep. 30, 2019
Leases [Abstract]
Operating lease cost	$ 2,039	$ 6,036
Finance lease cost:
Amortization of ROU assets	88	278
Interest on lease liabilities	11	35
Total finance lease cost	$ 99	$ 313

Basis of Presentation	9 Months Ended
Basis of Presentation	Sep. 30, 2019
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 nine months ended September 30, 2019 are not necessarily indicative of results that may be expected for the year ending December 31, 2019 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, 2018. The accompanying December 31, 2018 condensed consolidated balance sheet has been derived from those audited consolidated financial statements. As described in Note 1 – Description of Business, commencing with the third quarter of 2019, depreciation and amortization expenses are being reported in the accompanying statements of operations to reflect departmental costs. Previously, those expenses were reported as a separate line item under operating expenses. Amounts related to depreciation and amortization expenses for the three and nine months ended September 30, 2018 have been restated throughout this Quarterly Report on Form 10-Q to reflect this reclassification of depreciation and amortization expenses and to conform to the current period presentation.

Description of Business (Details) $ in Thousands	3 Months Ended		9 Months Ended
Description of Business (Details) $ in Thousands	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) segment	Sep. 30, 2018 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of reportable segments \| segment			3
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of Sales	$ 39,744	$ 49,093	$ 123,093	$ 132,071
Selling and marketing	30,218	28,482	87,438	87,877
General and administrative	15,662	13,102	44,471	36,789
Depreciation and amortization		0		0
Research and development	10,783	11,740	33,048	34,138
Total operating expenses	56,663	53,324	164,957	158,804
Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of Sales		47,388		126,989
Selling and marketing		27,811		86,166
General and administrative		12,496		34,889
Depreciation and amortization		4,747		13,467
Research and development		9,975		29,364
Total operating expenses		55,029		163,886
Restatement Adjustment \| Depreciation Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of Sales		1,705		5,082
Selling and marketing		671		1,711
General and administrative		606		1,900
Depreciation and amortization		(4,747)		(13,467)
Research and development		1,765		4,774
Total operating expenses		(1,705)		(5,082)
Product
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of Sales	26,495	34,864	83,632	91,321
Product \| Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of Sales		34,004		88,766
Product \| Restatement Adjustment \| Depreciation Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of Sales		860		2,555
Service
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of Sales	$ 13,249	14,229	$ 39,461	40,750
Service \| Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of Sales		13,384		38,223
Service \| Restatement Adjustment \| Depreciation Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of Sales		$ 845		$ 2,527

Leases - Supplemental Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 2,024	$ 6,134
Operating cash flows from finance leases	11	35
Financing cash flows from finance leases	86	273
ROU assets obtained in exchange for lease obligations:
Operating leases	2,254	$ 8,170
Finance leases	$ 0

Inventories (Tables)

9 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventories consist of the following:


	As of September 30, 2019		As of December 31, 2018
Raw materials	$	36,944	$	39,859
Finished goods	32,835		25,585
Inventories, net	$	69,779	$	65,444

Service and sales demonstration inventory, net	$	39,509	$	39,563

Revenues

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenues

REVENUES


	For the Three Months Ended September 30,
	2019		2018
Product sales
Product transferred to customers at a point in time	$	63,641	$	75,817
Product transferred to customers over time	—		—
	$	63,641	$	75,817


	For the Nine Months Ended September 30,
	2019		2018
Product sales
Product transferred to customers at a point in time	$	200,434	$	222,118
Product transferred to customers over time	—		—
	$	200,434	$	222,118


	For the Three Months Ended September 30,
	2019		2018
Service sales
Service transferred to customers at a point in time	$	12,526	$	11,580
Service transferred to customers over time	14,349		12,308
	$	26,875	$	23,888


	For the Nine Months Ended September 30,
	2019		2018
Service sales
Service transferred to customers at a point in time	$	36,960	$	30,939
Service transferred to customers over time	40,230		37,726
	$	77,190	$	68,665

The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers (in thousands, unaudited):


	For the Three Months Ended September 30,
	2019		2018
Total sales to external customers
United States	$	37,166	$	38,090
EMEA ⁽¹⁾	26,424		29,577
Other APAC ⁽¹⁾	16,120		16,602
China	7,751		11,340
Other Americas ⁽¹⁾	3,055		4,096
	$	90,516	$	99,705


	For the Nine Months Ended September 30,
	2019		2018
Total sales to external customers
United States	$	108,174	$	115,670
EMEA ⁽¹⁾	87,554		88,858
Other APAC ⁽¹⁾	46,550		48,502
China	25,007		26,973
Other Americas ⁽¹⁾	10,339		10,780
	$	277,624	$	290,783

⁽¹⁾Regions represent Europe, the Middle East, and Africa (EMEA); Asia-Pacific, excluding China (Other APAC); and Canada, Mexico, and Brazil (Other Americas).

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, with the exception of software licenses. With respect to software licenses, we use the residual method for allocating the contract price to performance obligations. 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, when sold, 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 warranties with the purchase of measurement equipment and related software. Warranties 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 warranty term. Extended warranty sales primarily include contract periods that extend between one month and 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 September 30, 2019, the deferred cost asset related to deferred commissions was approximately $2.8 million. For classification purposes, $1.9 million and $0.9 million are comprised within the Prepaid expenses and other current assets and Other long-term assets, respectively, on our condensed consolidated balance sheet as of September 30, 2019. As of December 31, 2018, the deferred cost asset related to deferred commissions was approximately $2.7 million. For classification purposes, $1.8 million and $0.9 million were comprised within the Prepaid expenses and other current assets and Other long-term assets, respectively, on our condensed consolidated balance sheet as of December 31, 2018.

The unearned service revenue liabilities reported on our condensed consolidated balance sheets reflect the contract liabilities to satisfy the remaining performance obligations for extended warranties and software maintenance. The current portion of unearned service revenues on our condensed consolidated balance sheets is what we expect to recognize to revenue within twelve months after the applicable balance sheet date relating to extended warranty and software maintenance contract liabilities. The Unearned service revenues - less current portion on our condensed consolidated balance sheets is what we expect to recognize to revenue extending beyond twelve months after the applicable balance sheet date relating to extended warranty and software maintenance contract liabilities. During the three and nine months ended September 30, 2019, we recognized $6.3 million and $25.9 million, respectively, of service revenue that was deferred on our condensed consolidated balance sheet as of December 31, 2018. During the three and nine months ended September 30, 2018, we recognized $5.3 million and $21.5 million, respectively, of service revenue that was deferred on our consolidated balance sheet as of December 31, 2017.

The nature of certain of our contracts gives rise to variable consideration, which may be constrained, 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 was approximately $0.1 million as of both September 30, 2019 and September 30, 2018.

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.

Stock-Based Compensation - Schedule of Stock Option Activity and Weighted Average Exercise Prices (Details) - Employee Stock Option $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($) $ / shares shares
Options
Beginning balance (in shares) \| shares	792,943
Granted (in shares) \| shares	0
Forfeited or expired (in shares) \| shares	(77,064)
Exercised (in shares) \| shares	(70,936)
Ending balance (in shares) \| shares	644,943
Options exercisable at September 30, 2019 (in shares) \| shares	577,240
Weighted- Average Exercise Price
Beginning balance (in dollars per share) \| $ / shares	$ 47.59
Granted (in dollars per share) \| $ / shares	0
Forfeited or expired (in dollars per share) \| $ / shares	54.64
Exercised (in dollars per share) \| $ / shares	32.71
Ending balance (in dollars per share) \| $ / shares	48.66
Options exercisable at September 30, 2019 (in dollars per share) \| $ / shares	$ 48.62
Weighted-Average Remaining Contractual Term (Years)
Weighted-average remaining contractual term, outstanding at September 30, 2019	3 years 9 months 18 days
Weighted-average remaining contractual term, options exercisable at September 30, 2019	2 years 7 months 6 days
Aggregate Intrinsic Value as of September 30, 2019
Aggregate intrinsic value outstanding at September 30, 2019 \| $	$ 3,757
Aggregate intrinsic value of options exercisable at September 30, 2019 \| $	$ 3,331