FARO Reports Second Quarter 2016 Financial Results
LAKE MARY, Fla., Aug. 2, 2016 /PRNewswire/ — FARO® (NASDAQ: FARO), the world’s most trusted source for 3D measurement and imaging solutions for metrology, factory automation, product design, public safety, BIM-CIM and 3D solutions and services, today announced its financial results for the second quarter and six months ended June 30, 2016.
Six months ended June 30, 2016
Sales were $154.3 million for the six months ended June 30, 2016, up 0.4% compared with $153.7 million for the six months ended June 27, 2015. Excluding the negative impact of foreign exchange rates on sales of $0.9 million, sales for the first six months of 2016 would have increased approximately 1% compared with the same prior year period. Our year-to-date 2016 sales increase is mostly related to year-over-year growth in service revenue and metrology product sales offset partly by lower 3D documentation sales.
New order bookings for the six months ended June 30, 2016 were $155.1 million, up 1.4% compared with $152.9 million for the six months ended June 27, 2015.
Gross margin was 56.1%, up 1.4 percentage points compared with 54.7% in the prior year period mostly due to higher average selling prices and favorable sales mix.
Operating income was $8.8 million, up 21.3% compared with $7.3 million in the same prior year period, reflecting an increase in gross margin on slightly higher sales.
Net income and EPS for the first six months of 2016 was $6.5 million and $0.39 per share, respectively, up 34.5% as compared with $4.8 million and $0.27 per share, respectively, for the first six months of 2015.
Our cash and short-term investments increased by $26.1 million to $176.5 million at June 30, 2016 from $150.4 million atDecember 31, 2015 primarily driven by strong cash flow from operations of $27.7 million.
Second quarter 2016
Sales for the quarter ended June 30, 2016 were $78.5 million, down 6.3% compared with $83.8 million in the second quarter last year. Foreign exchange rates had a slightly positive impact on sales of $0.2 million, increasing sales growth by 0.2 percentage points. Our decrease in sales reflected lower product sales within the Americas region given strong prior year performance, offset partly by higher metrology sales in Asia-Pacific and an increase in global service revenue.
New order bookings were $81.6 million for the second quarter of 2016, down 2.7% compared with $83.8 million for the second quarter of 2015.
Gross margin for the quarter was 55.9%, up 2.7 percentage points compared with 53.2% in the prior year period mostly due to higher average selling prices, warranty revenue growth, and higher manufacturing costs in the prior year period.
Operating income for the quarter was $4.5 million, down 17.1% compared with $5.4 million in the prior year period, mostly due to lower product sales partially offset by an increase in gross margin.
Net income and EPS for the quarter was $3.4 million and $0.20 per share, respectively, compared with $4.1 million and $0.24per share, respectively, in the prior year period.
“For the first six months of 2016, we delivered a 35% increase in net income by driving gross margin and managing operating expenses,” stated Dr. Simon Raab, President and Chief Executive Officer. “We continue to execute on our renewal initiatives to ensure FARO’s technical and market leadership in 3D measurement. The vertical focus is guiding our R&D teams and M&A efforts in the development of a regular drumbeat of new market-leading product solutions for those areas of interest. We released six new or upgraded products in the quarter; and on July 11th, we acquired BuildIT Software & Solutions Ltd. to strengthen our metrology software offering. We will remain attentive to annual performance while undertaking this top-to-bottom reorganization in order to deliver long-term shareholder value.”
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties, such as statements about FARO’s long-term growth, demand for and customer acceptance of FARO’s products, anticipated improvement in the markets in which FARO operates, and FARO’s product development and product launches. Statements that are not historical facts or that describe the Company’s plans, objectives, projections, expectations, assumptions, strategies, or goals are forward-looking statements. In addition, words such as “is,” “are,” “expects,” “continues,” “may,” “will,” and similar expressions or discussions of FARO’s plans or otherintentions identify forward-looking statements. Forward-looking statements are not guarantees of future performance and are subject to various known and unknown risks, uncertainties, and other factors that may cause actual results, performances, or achievements to differ materially from future results, performances, or achievements expressed or implied by such forward-looking statements. Consequently, undue reliance should not be placed on these forward-looking statements.
Factors that could cause actual results to differ materially from what is expressed or forecasted in such forward-looking statements include, but are not limited to:
- the Company’s inability to successfully identify and acquire target companies or achieve expected benefits from acquisitions that are consummated;
- development by others of new or improved products, processes or technologies that make the Company’s products less competitive or obsolete;
- the Company’s inability to maintain its technological advantage by developing new products and enhancing its existing products;
- declines or other adverse changes, or lack of improvement, in industries that the Company serves or the domestic and international economies in the regions of the world where the Company operates and other general economic, business, and financial conditions;
- the impact of fluctuations of foreign exchange rates; and
- Other risks detailed in Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year endedDecember 31, 2015.