FARO TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Three Months Ended

(in thousands)

March 31, 2021

March 31, 2020

Cash flows from:

Operating activities:

Net loss

$

(3,221)

$

(14,823)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Depreciation and amortization

3,190

3,759

Stock-based compensation

2,094

2,178

Provisions for bad debts, net of recoveries

(89)

(15)

Loss on disposal of assets

20

10

Provision for excess and obsolete inventory

1,404

204

Deferred income tax benefit

(1,612)

(2,326)

Change in operating assets and liabilities:

Decrease (Increase) in:

Accounts receivable

3,676

16,084

Inventories

(3,999)

1,795

Prepaid expenses and other current assets

(1,346)

7,408

(Decrease) Increase in:

Accounts payable and accrued liabilities

(9,823)

4,756

Income taxes payable

(1,153)

(1,389)

Customer deposits

896

(961)

Unearned service revenues

(323)

(365)

Net cash (used in) provided by operating activities

(10,286)

16,315

Investing activities:

Purchases of property and equipment

(1,547)

(757)

Proceeds from sale of investments

—

9,000

Payments for intangible assets

(890)

(435)

Net cash (used in) provided by investing activities

(2,437)

7,808

Financing activities:

Payments on finance leases

(86)

(82)

Payments for taxes related to net share settlement of equity awards

(3,336)

(1,581)

Proceeds from issuance of stock related to stock option exercises

5,118

2,802

Net cash provided by financing activities

1,696

1,139

Effect of exchange rate changes on cash and cash equivalents

(4,649)

(1,656)

Increase in cash and cash equivalents

(15,676)

23,606

Cash and cash equivalents, beginning of period

185,633

133,634

Cash and cash equivalents, end of period

$

169,957

$

157,240