FARO Reports Third Quarter 2019 Financial Results

 

(1)

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 U.S. Government being overcharged under our General Services Administration ("GSA") Federal Supply Schedule contracts (the "Contracts") (the "GSA Matter"). In fourth quarter 2018, we reduced our total sales by an estimated cumulative adjustment of $4.8 million. We also retained outside legal counsel and forensic accountants to conduct a comprehensive review of our pricing and other practices under the Contracts (the "Review"). On July 15, 2019, we submitted a report to the GSA and its Office of Inspector General setting forth the findings of the Review. Based on the results of the Review, in second quarter 2019 we reduced our total sales by an incremental $5.8 million (the "GSA sales adjustment") and recorded imputed interest expense of less than $0.1 million during the first quarter of 2019, $0.4 million during the second quarter of 2019, and $0.1 million during the third quarter of 2019 related to the GSA Matter.



(2)

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. This adjustment includes accelerated vesting of equity awards in connection with the transition of our prior executives totaling $1.6 million and $3.5 million for the three and nine months ended September 30, 2019, respectively.



(3)

In connection with the GSA Matter, we retained outside legal counsel and forensic accountants to conduct the Review, which resulted in $1.2 million in advisory fees incurred during the first nine months of 2019.



(4)

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. During the second quarter of 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.



(5) 

Driven primarily by return-to-provision adjustments identified in the preparation of our 2018 U.S. tax return and changes in our reserve for uncertain tax positions due to a change in our judgment on the recognition of a tax position.


 

 

FARO TECHNOLOGIES, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP

TOTAL SALES BY REPORTING SEGMENT

(UNAUDITED)



Three Months Ended September 30,


Nine Months Ended September 30,

(dollars in thousands)

2019


2018


2019


2018









3D Manufacturing total sales, as reported

$

56,017


$

64,182


$

171,586


$

190,584

GSA sales adjustment (1)



3,315


Non-GAAP 3D Manufacturing total sales

$

56,017


$

64,182


$

174,901


$

190,584

 


Three Months Ended September 30,


Nine Months Ended September 30,

(dollars in thousands)

2019


2018


2019


2018









Construction BIM total sales, as reported

$

23,884


$

23,710


$

73,485


$

69,994

GSA sales adjustment (1)



463


Non-GAAP Construction BIM total sales

$

23,884


$

23,710


$

73,948


$

69,994


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Reviews:
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  • Study July 15, 2020
    Reviewed by 'James Shaws'
    The financial results of the FARO are showing that everything is going very great. I am glad to see the huge profit growth of this company. One needs to visit edubirdie.net/blog/is-edubirdie-legal-or-cheating source to know is edubirdie legit to use. It is impressive that this company has survived the coronavirus pandemic.

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