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)

2023

2022

2023

2022

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 compensation

3,692

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)

2023

2022

2023

2022

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)

2023

2022

2023

2022

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.