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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
 
FORM 8-K

  CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 1, 2023
FARO TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
 
Florida 0-23081 59-3157093
(State or other jurisdiction
of incorporation)		 (Commission
File Number)		 (IRS Employer
Identification No.)
150 Technology Park, Lake Mary, Florida 32746
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (407) 333-9911
N/A
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $.001FARONasdaq Global Select Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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Item 2.02. Results of Operations and Financial Condition.
On November 1, 2023, FARO Technologies, Inc. (the “Company”) issued a press release announcing its results of operations for the third fiscal quarter September 30, 2023. A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
The information furnished pursuant to Item 2.02 and Exhibit 99.1 of this Current Report on Form 8-K shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information in this Current Report shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Current Report, regardless of any general incorporation language in the filing.

Item 9.01.     Financial Statements and Exhibits.
(d) Exhibits

The following exhibits are furnished with this Current Report on Form 8-K:
EXHIBIT INDEX
Exhibit
Number		  Description
104
Cover Page Interactive Data File - The cover page of this Current Report on Form 8-K filed on November 1, 2023, formatted in Inline XBRL


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
        
     FARO Technologies, Inc.
    
  November 1, 2023  /s/ Allen Muhich
     By:Allen Muhich
     Its:Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)




Exhibit 99.1
imagejpg.jpg
FARO Announces Third Quarter Financial Results
•Revenue of $86.8 million, exceeded high-end of expectations
•First full quarter of cost reductions achieved quarterly expense expectations
•Profitability exceeded expectations

LAKE MARY, FL, November 1, 2023 - FARO® Technologies, Inc. (Nasdaq: FARO), a global leader in 4D digital reality solutions, today announced its financial results for the third quarter ended September 30, 2023.
“Third quarter financial performance with revenue of $86.8 million and non-GAAP EPS of $0.02, exceeded the high-end of our expectations driven by a combination of moderate improvements in end market demand and operational performance,” said Peter Lau, President & Chief Executive Office of FARO. “We are excited about the mid to long-term prospects for our business and remain focused on improved execution of our hardware and software enabled strategy, exemplified by the recent launch of the highly differentiated Orbis Mobile Scanner and release of an enhanced version of FARO Sphere XG.”
Third Quarter 2023 Financial Summary
•Total sales of $86.8 million, up 2% year over year
•Software sales of $11.2 million, up 6% compared to the prior year period
•Recurring revenue of $17.1 million, up 3% year on year
•Gross margin of 48.0%, compared to 50.7% in the prior year period
•Non-GAAP gross margin of 48.9%, compared to 51.0% in the prior year period
•Operating expenses of $48.6 million, compared to $50.4 million in the prior year period
•Non-GAAP operating expenses of $41.5 million, compared to $44.3 million in the prior year period
•Net loss of $8.8 million, or $(0.46) per share compared to net loss of $6.3 million, or $(0.34) per share in the prior year period
•Non-GAAP net income of $0.5 million, or $0.02 per share compared to non-GAAP net gain of $0.5 million, or $0.03 per share in the prior year period
•Adjusted EBITDA of $3.5 million, or 4.1% of total sales compared to $2.0 million, or 2.3% of total sales in the prior year period
•Cash and cash equivalent of $79.9 million, compared to $88.5 million as of June 30, 2023


* A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures is provided in the financial schedules portion at the end of this press release. An additional explanation of these measures is included below under the heading “Non-GAAP Financial Measures”.
Outlook for the Fourth Quarter 2023

For the fourth quarter ending December 31, 2023, FARO currently expects:
•Revenue in the range of $92 to $100 million
•Gross margin in the range of 49.5% to 51.0%. Non-GAAP gross margin in the range of 50.5% to 52.0%
•Operating expenses in the range of $47.5 to $49.5 million. Non-GAAP operating expenses in the range of $41.0 to $43.0 million
•Net loss per share in the range of ($0.30) to ($0.15). Non-GAAP net income per share in the range of $0.18 to $0.34
Conference Call
The Company will host a conference call to discuss these results on Thursday, November 2, 2023, at 8:00 a.m. ET. Interested parties can access the conference call by dialing (800) 343-4849 (U.S.) or +1 (203) 518-9843 (International) and using the passcode FARO. A live webcast will be available in the Investor Relations section of FARO's website at: https://www.faro.com/en/About-Us/Investor-Relations/Financial-Events-and-Presentations
A replay webcast will be available in the Investor Relations section of the Company's web site approximately two hours after the conclusion of the call and will remain available for approximately 30 calendar days.
About FARO
For 40 years, FARO has provided industry-leading technology solutions that enable customers to measure their world, and then use that data to make smarter decisions faster. FARO continues to be a pioneer in bridging the digital and physical worlds through data-driven reliable accuracy, precision, and immediacy. For more information, visit www.faro.com.
Non-GAAP Financial Measures
This press release contains information about our financial results that are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”). These non-GAAP financial measures, including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net loss and non-GAAP net loss per share, exclude the impact of purchase accounting intangible amortization expense and fair value adjustments, stock-based compensation, inventory reserve charge, restructuring and other charges, and other tax adjustments, and are provided to enhance investors’ overall understanding of our historical operations and financial performance.
In addition, we present EBITDA, which is calculated as net loss before interest (income) expense, net, income tax expense and depreciation and amortization, and Adjusted EBITDA, which is calculated as EBITDA, excluding other (income) expense, net, stock-based compensation, inventory reserve charge, and restructuring and other charges, as measures of our operating profitability. The most directly comparable GAAP measure to EBITDA and Adjusted EBITDA is net loss.


Free Cash Flow represents cash from operating activities less capital spending. Adjusted Free Cash Flow represents free cash flow further adjusted to exclude restructuring cash payments.
Management believes that these non-GAAP financial measures provide investors with relevant period-to-period comparisons of our core operations using the same methodology that management employs in its review of the Company’s operating results. These financial measures are not recognized terms under GAAP and should not be considered in isolation or as a substitute for a measure of financial performance prepared in accordance with GAAP.
These non-GAAP financial measures have limitations that should be considered before using these measures to evaluate a company’s financial performance. These non-GAAP financial measures, as presented, may not be comparable to similarly titled measures of other companies due to varying methods of calculation. The financial statement tables that accompany this press release include a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
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 the outlook for the third quarter of 2023, demand for and customer acceptance of FARO’s products, FARO’s product acquisitions, development and product launches, and FARO's growth, investment, strategic and restructuring plans and initiatives, including but not limited to the timing and amount of cost savings and other benefits expected to be realized from our strategic initiatives. 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,” “will,” "intend," “continue,” "believe," "expect," "may," "could" or "should," and similar expressions or discussions of FARO’s plans or other intentions 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 ability to realize the intended benefits of its undertaking to transition to a company that is reorganized around functions to improve the efficiency of its sales organization and to improve operational effectiveness;
•the Company’s inability to successfully execute its strategic plan, restructuring plan and integration plan, including but not limited to additional impairment charges and/or higher than expected severance costs and exit costs, and its inability to realize the expected benefits of such plans;
•the outcome of any litigation to which the Company is or may become a party;
•loss of future government sales;
•potential impacts on customer and supplier relationships and the Company's reputation;


•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 effect of general economic and financial market conditions, including in response to public health concerns;
•assumptions regarding the Company’s financial condition or future financial performance may be incorrect;
•the impact of fluctuations in foreign exchange rates and inflation rates; and
•other risks and uncertainties discussed in Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on February 15, 2023, as supplemented by the Company’s Quarterly Reports on Form 10-Q, and in other SEC filings.

Forward-looking statements in this release represent the Company’s judgment as of the date of this release. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, unless otherwise required by law.

Investor Contacts
FARO Technologies, Inc.
Allen Muhich, Chief Financial Officer
+1 407-562-5005
IR@faro.com

Sapphire Investor Relations, LLC
Michael Funari or Erica Mannion
+1 617-542-6180
IR@faro.com



FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

 
 Three Months EndedNine Months Ended
(in thousands, except share and per share data)September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Sales
Product$66,911 $65,581 $199,754 $182,015 
Service19,902 19,751 60,237 59,891 
Total sales86,813 85,332 259,991 241,906 
Cost of sales
Product34,640 30,375 112,691 82,879 
Service10,499 11,692 32,587 34,299 
Total cost of sales45,139 42,067 145,278 117,178 
Gross profit41,674 43,265 114,713 124,728 
Operating expenses
Selling, general and administrative37,970 37,226 117,907 108,734 
Research and development8,188 12,586 32,568 36,756 
Restructuring costs2,442 580 15,130 2,512 
Total operating expenses48,600 50,392 165,605 148,002 
Loss from operations(6,926)(7,127)(50,892)(23,274)
Other (income) expense
Interest expense (income)691 (24)2,529 (28)
Other income, net(381)(1,428)(125)(3,077)
Loss before income tax(7,236)(5,675)(53,296)(20,169)
Income tax expense 1,520 586 4,869 4,352 
Net loss$(8,756)$(6,261)$(58,165)$(24,521)
Net loss per share - Basic$(0.46)$(0.34)$(3.08)$(1.34)
Net loss per share - Diluted$(0.46)$(0.34)$(3.08)$(1.34)
Weighted average shares - Basic18,953,251 18,436,615 18,899,954 18,336,537 
Weighted average shares - Diluted18,953,251 18,436,615 18,899,954 18,336,537 



FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

(in thousands, except share and per share data)September 30,
2023		December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents$79,919 $37,812 
Accounts receivable, net88,363 90,326 
Inventories, net40,095 50,026 
Prepaid expenses and other current assets37,325 41,201 
Total current assets245,702 219,365 
Non-current assets:
Property, plant and equipment, net22,207 19,720 
Operating lease right-of-use assets12,521 18,989 
Goodwill106,873 107,155 
Intangible assets, net46,999 48,978 
Service and sales demonstration inventory, net22,662 30,904 
Deferred income tax assets, net24,093 24,192 
Other long-term assets4,047 4,044 
Total assets$485,104 $473,347 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable$23,408 $27,286 
Accrued liabilities24,994 23,345 
Income taxes payable12,083 6,767 
Current portion of unearned service revenues34,493 36,407 
Customer deposits5,237 6,725 
Lease liabilities5,258 5,709 
Total current liabilities105,473 106,239 
Loan - 5.50% Convertible Senior Notes72,604 — 
Unearned service revenues - less current portion20,893 20,947 
Lease liabilities - less current portion11,495 14,649 
Deferred income tax liabilities11,497 11,708 
Income taxes payable - less current portion4,020 8,706 
Other long-term liabilities30 49 
Total liabilities226,012 162,298 
Commitments and contingencies
Shareholders’ equity:
Common stock - par value $0.001, 50,000,000 shares authorized; 20,328,417 and 20,156,233 issued, respectively; 18,953,725 and 18,780,013 outstanding, respectively20 20 
Additional paid-in capital340,414 328,227 
Retained earnings(11,377)46,788 
Accumulated other comprehensive loss(39,310)(33,331)
Common stock in treasury, at cost - 1,374,692 and 1,376,220 shares held, respectively(30,655)(30,655)
Total shareholders’ equity259,092 311,049 
Total liabilities and shareholders’ equity$485,104 $473,347 


FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
 Nine Months Ended September 30,
(in thousands)20232022
Cash flows from:
Operating activities:
Net loss$(58,165)$(24,521)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization11,728 10,061 
Stock-based compensation12,276 10,024 
Inventory write-downs8,132 — 
Asset impairment charges5,333 — 
Deferred income tax (benefit) expense and other non-cash charges(82)568 
Provision for excess and obsolete inventory1,754 209 
Amortization of debt discount and issuance costs294 — 
Loss on disposal of assets(155)356 
Provisions for bad debts, net of recoveries834 80 
Change in operating assets and liabilities:
Decrease (Increase) in:
Accounts receivable1,282 867 
Inventories(544)2,129 
Prepaid expenses and other current assets4,047 (14,566)
(Decrease) Increase in:
Accounts payable and accrued liabilities(2,802)(2,249)
Income taxes payable653 1,008 
Customer deposits(1,534)588 
Unearned service revenues(1,198)(2,710)
Other liabilities567 — 
Net cash used in operating activities(17,580)(18,156)
Investing activities:
Purchases of property and equipment(5,016)(4,978)
Cash paid for technology development, patents and licenses(5,071)(9,154)
Acquisition of business, net of cash acquired— (29,068)
Net cash used in investing activities(10,087)(43,200)
Financing activities:
Payments on finance leases(154)(172)
Payments for taxes related to net share settlement of equity awards(89)(1,584)
Proceeds from issuance of 5.50% Convertible Senior Notes, due 2028, net of discount, issuance cost and accrued interest72,310 — 
Payment of contingent consideration for business acquisition(1,098)— 
Net cash provided by (used in) financing activities70,969 (1,756)
Effect of exchange rate changes on cash and cash equivalents(1,195)(10,343)
Increase (Decrease) in cash and cash equivalents42,107 (73,455)
Cash and cash equivalents, beginning of period37,812 121,989 
Cash and cash equivalents, end of period$79,919 $48,534 



FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP
(UNAUDITED)
Three Months Ended September 30,Nine Months Ended September 30,
(dollars in thousands, except per share data)2023202220232022
Gross profit, as reported$41,674 $43,265 $114,713 $124,728 
Stock-based compensation (1)
280 273 972 756 
Inventory reserve charge (3)
— — 8,132 — 
Restructuring and other costs (2)
456 — 1,326 — 
Non-GAAP adjustments to gross profit736 273 10,430 756 
Non-GAAP gross profit$42,410 $43,538 $125,143 $125,484 
Gross margin, as reported48.0 %50.7 %44.1 %51.6 %
Non-GAAP gross margin48.9 %51.0 %48.1 %51.9 %
Selling, general and administrative, as reported$37,970 $37,226 $117,907 $108,734 
Stock-based compensation (1)
(3,588)(2,742)(9,710)(7,475)
Purchase accounting intangible amortization(663)(180)(2,024)(562)
Non-GAAP selling, general and administrative$33,719 $34,304 $106,173 $100,697 
Research and development, as reported$8,188 $12,586 $32,568 $36,756 
Stock-based compensation (1)
176 (651)(1,594)(1,793)
Purchase accounting intangible amortization(501)(487)(1,541)(1,522)
Non-GAAP research and development$7,863 $11,448 $29,433 $33,441 
Operating expenses, as reported$48,600 $50,392 $165,605 $148,002 
Stock-based compensation (1)
(3,411)(3,393)(11,304)(9,268)
Restructuring and other costs (2)
(2,495)(2,028)(16,337)(4,944)
Purchase accounting intangible amortization(1,164)(667)(3,565)(2,084)
Non-GAAP adjustments to operating expenses(7,070)(6,088)(31,206)(16,296)
Non-GAAP operating expenses$41,530 $44,304 $134,399 $131,706 
Loss from operations, as reported$(6,926)$(7,127)$(50,892)$(23,274)
Non-GAAP adjustments to gross profit737 273 10,430 756 
Non-GAAP adjustments to operating expenses7,070 6,088 31,206 16,296 
Non-GAAP loss from operations$881 $(766)$(9,256)$(6,222)
Net loss, as reported$(8,756)$(6,261)$(58,165)$(24,521)
Non-GAAP adjustments to gross profit737 273 10,430 756 
Non-GAAP adjustments to operating expenses7,070 6,088 31,206 16,296 
Income tax effect of non-GAAP adjustments(1,952)(1,272)(10,409)(4,014)
Other tax adjustments (4)
3,358 1,720 17,700 8,903 
Non-GAAP net gain/(loss)$457 $548 $(9,238)$(2,580)
Net loss per share - Diluted, as reported$(0.46)$(0.34)$(3.08)$(1.34)
Stock-based compensation (1)
0.19 0.20 0.65 0.55 
Restructuring and other costs (2)
0.16 0.11 0.93 0.27 
Inventory reserve charge (3)
— — 0.43 — 
Purchase accounting intangible amortization0.06 0.04 0.19 0.11 
Income tax effect of non-GAAP adjustments(0.10)(0.07)(0.55)(0.22)
Other tax adjustments (4)
0.18 0.09 0.94 0.49 
Non-GAAP net income/(loss) per share - Diluted$0.02 $0.03 $(0.49)$(0.14)



(1) We exclude stock-based compensation, which is non-cash, from the non-GAAP financial measures because the Company believes that such exclusion provides a better comparison of results of ongoing operations for current and future periods with such results from past periods.

(2) On February 7, 2023, our Board of Directors approved an integration plan (the "Integration Plan"), which is intended to streamline and simplify operations, particularly around our recent acquisitions and the resulting redundant operations and offerings. The Restructuring and other costs primarily consist of severance and related benefits.

(3) During the nine months ended September 30, 2023, we recorded a charge of $8.1 million, increasing our reserve for excess and obsolete inventory, based on our analysis of our inventory reserves in connection with our strategy to simplify our product portfolio and cease selling certain products.

(4) The other tax adjustments primarily relate to the impact of certain jurisdictions maintaining a full valuation allowance where benefit is not accrued on U.S. GAAP pre-tax book losses.


FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
RECONCILIATION OF NET LOSS TO EBITDA AND ADJUSTED EBITDA
(UNAUDITED)

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2023202220232022
Net loss$(8,756)$(6,261)$(58,165)$(24,521)
Interest (income) expense, net
691 (24)2,529 (28)
Income tax expense
1,520 586 4,869 4,352 
Depreciation and amortization
3,803 3,406 11,728 10,061 
EBITDA(2,742)(2,293)(39,039)(10,136)
Other (income) expense, net(381)(1,428)(125)(3,077)
Stock-based compensation3,692 3,666 12,276 10,024 
Inventory reserve charge (3)
— — 8,132 — 
Restructuring and other costs (1)
2,951 2,028 17,663 4,944 
Adjusted EBITDA$3,520 $1,973 $(1,093)$1,755 
Adjusted EBITDA margin (2)
4.1 %2.3 %(0.4)%0.7 %

(1) On February 7, 2023, our Board of Directors approved an integration plan (the "Integration Plan"), which is intended to streamline and simplify operations, particularly around our recent acquisitions and the resulting redundant operations and offerings. The Restructuring and other costs primarily consist of severance and related benefits.

(2) Calculated as Adjusted EBITDA as a percentage of total sales.

(3) During nine months ended September 30, 2023, we recorded a charge of $8.1 million, increasing our reserve for excess and obsolete inventory, based on our analysis of our inventory reserves in connection with our strategy to simplify our product portfolio and cease selling certain products.




FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
KEY SALES MEASURES
(UNAUDITED)
 Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2023202220232022
Total sales to external customers as reported
Americas (1)
$41,033 $38,732 $124,734 $110,077 
EMEA (1)
25,621 22,802 74,641 66,494 
APAC (1)
20,159 23,798 60,616 65,335 
$86,813 $85,332 $259,991 $241,906 
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2023202220232022
Total sales to external customers in constant currency (2)
Americas (1)
$40,220 $38,675 $123,148 $109,825 
EMEA (1)
23,074 22,232 67,557 61,320 
APAC (1)
20,121 23,112 59,109 60,862 
$83,415 $84,019 $249,814 $232,007 

(1) Regions represent North America and South America (Americas); Europe, the Middle East, and Africa (EMEA); and the Asia-Pacific (APAC).

(2) We compare the change in the sales from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying business performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rate in effect during the last day of the prior comparable period, rather than the actual exchange rates in effect during the respective periods.


 Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2023202220232022
Hardware$55,706 $54,971 $167,484 $150,597 
Software11,205 10,610 32,270 31,418 
Service19,902 19,751 60,237 59,891 
Total Sales$86,813 $85,332 $259,991 $241,906 
Hardware as a percentage of total sales64.2 %64.4 %64.4 %62.3 %
Software as a percentage of total sales12.9 %12.4 %12.4 %13.0 %
Service as a percentage of total sales22.9 %23.1 %23.2 %24.8 %
Total Recurring Revenue (3)
$17,056 $16,591 $50,137 $50,184 
Recurring revenue as a percentage of total sales19.6 %19.4 %19.3 %20.7 %

(3) Recurring revenue is comprised of hardware service contracts, software maintenance contracts, and subscription based software applications.


FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
FREE CASH FLOW RECONCILIATION
(UNAUDITED)

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2023202220232022
Net cash used in operating activities$(4,373)$(14,896)$(17,580)$(18,156)
Purchases of property and equipment(704)(1,497)(5,016)(4,978)
Cash paid for technology development, patents and licenses(1,455)(3,606)(5,071)(9,154)
Free Cash Flow(6,532)(19,999)(27,667)(32,288)
Restructuring and other cash payments (1)
6,279 3,075 11,014 5,910 
Adjusted Free Cash Flow$(253)$(16,924)$(16,653)$(26,378)

(1) On February 7, 2023, our Board of Directors approved an integration plan (the "Integration Plan"), which is intended to streamline and simplify operations, particularly around our recent acquisitions and the resulting redundant operations and offerings. The Restructuring and other cash payments primarily consist of severance and related benefits.



FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
RECONCILIATION OF OUTLOOK - GAAP TO NON-GAAP

Fiscal Quarter Ending 12/31/2023
LowHigh
GAAP diluted loss per share range$(0.30)$(0.15)
Stock-based compensation0.190.19
Purchase accounting intangible amortization0.060.06
Restructuring and other costs0.130.13
Non-GAAP tax adjustments0.100.11
Non-GAAP diluted loss per share$0.18$0.34

v3.23.3
Cover Document
Nov. 01, 2023
Cover [Abstract]  
Document Type 8-K
Entity Registrant Name FARO TECHNOLOGIES, INC.
Entity Incorporation, State or Country Code FL
Entity File Number 0-23081
Entity Tax Identification Number 59-3157093
Entity Address, Address Line One 150 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
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $.001
Trading Symbol FARO
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0000917491
Document Period End Date Nov. 01, 2023
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