- Quarterly sales of $98.2 million, up 18.8% year-over-year
- 3D factory quarterly sales up 13.3% year-over-year, construction BIM up 25.0%, emerging verticals up 50.3%
- Strengthened gross margin to 58.7% for the quarter
- Increased quarterly operating margin by 7.0 percentage points year-over-year
"For the fourth consecutive quarter, we delivered double-digit sales growth and increased gross margin year-over-year demonstrating improved execution of our strategy and FARO's technological leadership in our vertical markets," stated Dr. Simon Raab, President and Chief Executive Officer. "All segments reported strong year-over-year orders and sales growth, highlighted by our 3D factory segment. In the second quarter and extending into the current quarter, important new product releases will continue the expansion of our product range to better meet the technical needs and budgets of our customers. We have also accelerated our pace of acquisitions this year, having completed four year-to-date and adding important new technologies including 3D scanning for the dental market. Our global initiative of FAROBest! is aimed at operational excellence and will contribute to controlling our G&A and R&D expenses as a percentage of sales. Our actions delivered a 7-point improvement in operating margin year-over-year for the quarter."
Second Quarter 2018
Total sales increased by $15.5 million, or 18.8%, to $98.2 million for the quarter ended June 30, 2018 from $82.7 million for the quarter ended June 30, 2017. Our second quarter sales increase was primarily a result of growth in product unit sales across all segments and higher average selling prices, primarily in our 3D factory segment. New order bookings increased by $17.5 million, or 19.7%, to $106.5 million for the quarter ended June 30, 2018 from $89.0 million for the quarter ended June 30, 2017.
Gross margin for the quarter was 58.7%, up 2.1 percentage points compared with 56.6% for the same prior year period primarily due to higher average selling prices and improved manufacturing efficiencies.
Our operating income increased by $6.1 million to $1.9 million for the second quarter of 2018, compared with an operating loss of $4.2 million for same prior year period. Operating margin increased to 2.0% for the second quarter of 2018, up 7.0 percentage points compared with the second quarter of 2017.
Net income for the second quarter of 2018 was $1.2 million or $0.07 per share, compared with a net loss of $3.6 million or loss of $0.22 per share for the second quarter last year.
Six months ended June 30, 2018
Total sales increased by $26.9 million, or 16.3%, to $191.1 million for the six months ended June 30, 2018 from $164.2 million for the six months ended June 30, 2017. Our sales increase was primarily driven by strong growth of product unit sales in our construction BIM and emerging verticals segments, higher average selling prices in our 3D factory segment, and service revenue growth. New order bookings increased by $26.8 million, or 15.2%, to $202.6 million for the six months ended June 30, 2018 from $175.8 million for the six months ended June 30, 2017.
Gross margin was 58.3% for the first six months of 2018, up 3.2 percentage points over the same prior year period mostly due to higher average selling prices and improved manufacturing efficiencies.
Operating income was $2.6 million for the six months ended June 30, 2018, reflecting an increase of $8.8 million compared with an operating loss of $6.2 million for the same prior year period.
Our net income for the six months ended June 30, 2018 was $1.7 million, or $0.10 per share, compared with a net loss of $5.1 million or loss of $0.30 per share for the first six months of 2017.
As of June 30, 2018, cash and short-term investments totaled $144.6 million, of which $88.4 million was held by foreign subsidiaries.
FARO is the world's most trusted source for 3D measurement, imaging and realization technology. The Company develops and markets computer-aided measurement and imaging devices and software for the following vertical markets:
- Factory Metrology - High-precision 3D measurement, imaging and comparison of parts and complex structures within production and quality assurance processes
- Construction BIM - 3D capture of as-built construction projects and factories to document complex structures and perform quality control, planning and preservation
- Public Safety Forensics - Capture and analysis of on-site real world data to investigate crash, crime and fire, plan security activities and provide virtual reality training for public safety personnel
- Product Design - Capture detailed and precise 3D data from existing products permitting CAD analysis and redesign, after market design and legacy part replication
- 3D Machine Vision - 3D vision for both control and measurement to the manufacturing floor through 3D sensors and custom solutions
FARO's global headquarters is located in Lake Mary, Florida. The Company also has a technology center and manufacturing facility consisting of approximately 90,400 square feet located in Exton, Pennsylvania containing research and development, manufacturing and service operations of our FARO Laser Tracker and FARO Cobalt Array Imager product lines. The Company's European regional headquarters is located in Stuttgart, Germany and its Asia-Pacific regional headquarters is located in Singapore. FARO has other offices in the United States , Canada , Mexico , Brazil , Germany , the United Kingdom , France , Spain , Italy , Poland , Turkey , the Netherlands , Switzerland , India , China , Malaysia , Thailand , South Korea , Japan , and Australia .