FARO Announces Second Quarter Financial Results

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 new strategic plan and restructuring 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 the U.S. Government's review of, or investigation into, the GSA Matter; any resulting penalties, damages, or sanctions imposed on the Company and the outcome of any resulting litigation to which the Company may become a party; loss of future government sales; and 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 the COVID-19 pandemic, including on our business operations, as well as its impact on general economic and financial market conditions;
the impact of fluctuations in 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 ended December 31, 2019 and in Part II, Item 1A. Risk Factors in the Company's Quarterly Report on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020.

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.

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

	Three Months Ended				Six Months Ended
(in thousands, except share and per share data)	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
Sales
Product	$	42,259	$	71,045	$	98,784	$	142,622
Service	18,305		22,446		41,295		$	44,486
Total sales	60,564		93,491		140,079		187,108
Cost of Sales
Product	21,333		30,505		44,399		$	58,456
Service	10,335		12,246		22,911		$	24,893
Total cost of sales	31,668		42,751		67,310		83,349
Gross Profit	28,896		50,740		72,769		103,759
Operating Expenses
Selling, general and administrative	30,036		45,007		$	66,360	$	86,027
Research and development	10,186		10,626		$	20,601	$	22,267
Restructuring costs	636		—		14,324		—
Total operating expenses	40,858		55,633		101,285		108,294
Loss from operations	(11,962)		(4,893)		(28,516)		(4,535)
Other expense
Interest expense, net	212		240		$	246	$	96
Other expense, net	117		1,689		$	590	1,884
Loss before income tax benefit	(12,291)		(6,822)		(29,352)		(6,515)
Income tax benefit	(3,359)		(417)		(5,597)		(262)
Net loss	$	(8,932)	$	(6,405)	$	(23,755)	$	(6,253)
Net loss per share - Basic	$	(0.50)	$	(0.37)	$	(1.34)	$	(0.36)
Net loss per share - Diluted	$	(0.50)	$	(0.37)	$	(1.34)	$	(0.36)
Weighted average shares - Basic	17,747,739		17,333,996		17,710,014		17,323,479
Weighted average shares - Diluted	17,747,739		17,333,996		17,710,014		17,323,479

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