<PAGE> 1
1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549/
FORM 10-Q
(Mark One)
[ X ] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended SEPTEMBER 30, 1997
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _________ to __________
Commission File Number: 0-23081
FARO TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
FLORIDA 59-3228107
------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
125 TECHNOLOGY PARK DRIVE, LAKE MARY, FLORIDA 32746
--------------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code: 407-333-9911
Indicate by check mark whether the registrant(1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and(2) has been subject to such filing requirements for
the past 90 days. YES [ ] NO [ X ]*
* REGISTRANT HAS BEEN A REPORTING COMPANY SINCE SEPTEMBER 17, 1997, LESS THAN 90
DAYS FROM THE DATE OF THIS REPORT.
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date:
Class: Outstanding at NOVEMBER 10, 1997:
Voting Common Stock, $.001 Par Value 9,919,000
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FARO Technologies Inc.
Index to Form 10-Q
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page Number
<S> <C> <C>
Item 1. Consolidated Balance Sheets as of December 31, 1996 and
SEPTEMBER 30, 1997 3
Consolidated Statements of Income for the Three and
Nine Months Ended SEPTEMBER 30, 1996 AND 1997 4
Consolidated Statements of Shareholders' Equity for the Nine Months
Ended September 30, 1997 5
Consolidated Statements of Cash Flows for the Nine Months
Ended SEPTEMBER 30, 1996 AND 1997 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds 12
Signatures 13
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 263,342 $30,563,703
Accounts receivable and notes receivable 2,992,681 5,346,731
Inventories 3,298,744 3,747,483
Deferred tax asset 102,500 193,978
Prepaid expenses 40,871 72,522
---------- -----------
Total current assets 6,698,138 39,924,417
---------- -----------
PROPERTY AND EQUIPMENT - At cost:
Leasehold improvements 14,938 0
Machinery and equipment 700,799 838,671
Furniture and fixtures 453,892 681,807
---------- -----------
Total 1,169,629 1,520,478
Less accumulated depreciation (568,279) (741,365)
---------- -----------
Property and equipment - net 601,350 779,113
---------- -----------
PATENTS 486,480 612,296
DEFERRED TAX ASSET 29,700 214,524
---------- -----------
TOTAL ASSETS $7,815,668 $41,530,350
========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 611,111 $ 896,462
Accounts payable and accrued liabilities 1,710,814 1,491,568
Income taxes payable 128,216 59,922
Customer deposits 230,393 160,048
Current portion unearned service revenues 185,180 589,219
---------- -----------
Total current liabilities 2,865,714 3,197,219
---------- -----------
UNEARNED SERVICE REVENUES - less current portion 286,099 368,299
LONG-TERM DEBT - less current portion 890,156 0
---------- -----------
TOTAL LIABILITIES 4,041,969 3,565,518
---------- -----------
SHAREHOLDERS' EQUITY:
Class A preferred stock - par value $.001,
10,000,000 shares authorized, none issued
Common stock - authorized 20,000,000 and 50,000,000
shares of $.001 par value; issued and
outstanding 7,000,000 and 9,919,000 7,000 9,919
Additional paid-in-capital 3,961,564 36,670,844
Retained earnings (Accumulated deficit) (188,365) 1,896,358
Cumulative translation adjustments 0 (103,955)
Unearned compensation (6,500) (508,334)
---------- -----------
Total shareholders' equity 3,773,699 37,964,832
---------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $7,815,668 $41,530,350
========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
3
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FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------- ----------------------------
1996 1997 1996 1997
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Sales $4,083,193 $5,909,306 $10,543,306 $16,227,841
Cost of Sales 1,756,120 2,379,114 4,501,114 6,567,395
---------- ---------- ----------- -----------
Gross Profit 2,327,073 3,530,192 6,042,192 9,660,446
Operating Expenses:
Selling 940,900 1,432,265 2,594,593 3,955,236
General and Administrative 195,216 310,082 544,861 916,517
Depreciation and amortization 48,682 79,023 174,070 204,998
Research and development 191,917 326,918 428,456 721,757
Employee stock options 5,775 813 17,325 364,959
---------- ---------- ----------- -----------
Total operating expenses 1,382,490 2,149,101 3,759,305 6,163,467
---------- ---------- ----------- -----------
Income From Operations 944,583 1,381,091 2,282,887 3,496,979
Interest Income 2,372 33,010 7,204 38,841
Other Income 10,494 31,941 13,476 68,754
Interest Expense (53,650) (43,809) (176,456) (109,660)
---------- ---------- ----------- -----------
Income Before Income Taxes 903,799 1,402,233 2,127,111 3,494,914
Income Tax Expense (399,810) (573,118) (940,962) (1,410,191)
---------- ---------- ----------- -----------
Net Income $ 503,989 $ 829,115 $ 1,186,149 $ 2,084,723
========== ========== =========== ===========
Net Income Per Common Share and
Common Equivalent Share $ 0.07 $ 0.11 $ 0.16 $ 0.28
========== ========== =========== ===========
Weighted Average Common Shares and
Common Equivalent Shares 7,329,240 7,750,062 7,329,240 7,480,262
========== ========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
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FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Additonal
------------ Paid-in Unearned
Shares Amounts Capital Compensation
-------------------------- ----------- ------------
<S> <C> <C> <C> <C>
BALANCE, DECEMBER 31,
1996 7,000,000 $ 7,000 $ 3,961,564 $ (6,500)
Granting of employee and
director stock options 865,980 (501,834)
Amortization of unearned
compensation 813
Proceeds from IPO 2,919,000 2,919 31,842,487
Currency translation
adjustment
Net income for period
-------------------------- ----------- ------------
BALANCE, SEPTEMBER 30,
1997 9,919,000 $ 9,919 $36,670,844 $ (508,334)
========================== =========== ============
<CAPTION>
Retained
Cumulative Earnings
Translation (Accumulated
Adjustment Deficit) Total
----------- ------------ -----------
<S> <C> <C> <C>
BALANCE, DECEMBER 31,
1996 $ - $ (188,365) $ 3,773,699
Granting of employee and
director stock options 364,146
Amortization of unearned
compensation 813
Proceeds from IPO 31,845,406
Currency translation
adjustment (103,955) (103,955)
Net income for period 2,084,723 2,084,723
----------- ------------ -----------
BALANCE, SEPTEMBER 30,
1997 $ (103,955) $ 1,896,358 $37,964,832
=========== ============ ===========
</TABLE>
See accompanying notes to consolidated financial statements.
5
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FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------------------------
1996 1997
---------- -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $1,186,149 $ 2,084,723
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 174,070 204,998
Employee stock options 17,325 364,959
Change in operating assets and liabilities:
Accounts receivable (550,698) (2,458,006)
Inventories (800,951) (448,739)
Prepaid expenses (3,622) (31,652)
Deferred tax assets 365,000 (276,302)
Accounts payable and accrued liabilities 336,018 (639,054)
Income taxes payable 45,086 (68,294)
Customer deposits (6,819) (70,345)
Deferred revenues 289,698 486,239
---------- -----------
Net cash (used in) provided by operating activities 1,051,256 (851,473)
---------- -----------
INVESTING ACTIVITIES:
Purchases of property and equipment (245,082) (350,849)
Increase in patents (92,340) (157,728)
---------- -----------
Net cash used in investing activities (337,422) (508,577)
---------- -----------
FINANCING ACTIVITIES:
Loans payable (600,000) (604,806)
Proceeds from issuance of common stock 0 32,265,217
---------- -----------
Net cash provided by (used in) financing activities (600,000) 31,660,411
---------- -----------
INCREASE IN CASH 113,834 30,300,361
CASH, BEGINNING OF PERIOD 3,921 263,342
========== ===========
CASH, END OF PERIOD $ 117,755 $30,563,703
========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest $ 161,906 $ 27,181
========== ===========
Translation adjustment effect on accounts
receivable $ - $ (103,955)
========== ===========
Payables recorded in connection with initial
public offering $ - $ 419,811
========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
6
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FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
NOTE A - DESCRIPTION OF ORGANIZATION AND BUSINESS
FARO Technologies Inc. and Subsidiaries (the "Company") develops,
manufactures, markets and supports portable, software-driven, 3-D measurement
systems that are used in a broad range of manufacturing and industrial
applications. The Company has two wholly-owned subsidiaries, FARO Worldwide,
Inc. and FARO France, s.a.s., which distribute the Company's 3-D measurement
equipment throughout Europe through three primary offices located in France,
Germany and the United Kingdom. FARO France, s.a.s., commenced operations in
July 1996.
NOTE B - BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared in
accordance with the instructions to Form 10-Q and do not include all the
information and footnote disclosure required by generally accepted accounting
principles for complete consolidated financial statements. In the opinion of
management, all adjustments (consisting only of normal recurring accruals)
necessary for a fair presentation of the consolidated financial position and
operating results for the interim periods have been included. The consolidated
results of operations for the three and NINE months ended SEPTEMBER 30, 1997 are
not necessarily indicative of results that may be expected for the year ending
December 31, 1997. These consolidated financial statements should be read in
conjunction with the audited consolidated financial statements of the Company as
of December 31, 1995 and 1996, and for each of the three years in the period
ended December 31, 1996, included in the Company's PROSPECTUS DATED SEPTEMBER
17, 1997.
In March 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS No. 128).
This statement establishes standards for computing and presenting earnings per
share ("EPS") and applies to all entities with publicly held common stock or
potential common stock. This statement replaces the presentation of primary EPS
and fully diluted EPS with a presentation of basic EPS and diluted EPS,
respectively. Basic EPS excludes dilution and is computed by dividing earnings
available to common stockholders by the weighted-average number of common shares
outstanding for the period. Similar to fully diluted EPS, diluted EPS reflects
the potential dilution of securities that could share in the earnings. This
statement is effective for the Company's financial statements for the year ended
December 31, 1997. The proforma effect of applying SFAS No. 128 is as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Basic income per common
share $ .07 $ .11 $ .17 $ .29
Diluted income per common
share and common
equivalent share $ .07 $ .11 $ .16 $ .28
</TABLE>
NOTE C - Initial Public Offering
On September 17, 1997 the Company completed an initial public offering
of 2,919,000 shares of common stock, including underwriters over allotment
options. Net proceeds from the offering totaled $31.8 million.
7
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NOTE D - Inventory
Inventories consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------------- ----------------
<S> <C> <C>
Raw materials $ 1,888,227 $ 1,839,574
Finished goods 472,408 724,406
Sales demonstration 938,109 1,183,503
------------------ ----------------
$ 3,298,744 $ 3,747,483
================== ================
</TABLE>
8
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PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following information should be read in conjunction with the
Consolidated Financial Statements of the Company, including the notes thereto,
included elsewhere in this Form 10-Q, and the Management's Discussion and
Analysis of Financial Condition and Results of Operations included in the
Company's Prospectus dated September 17, 1997. Certain matters discussed in
this Form 10-Q are forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of Securities Exchange Act of
1934. Although the Company believes that the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, there can be
no assurance that its expectations will be achieved. Factors that could cause
actual results to differ materially from the Company's current expectations
include market acceptance of the Company's products, which consist of two
closely interdependent products, the amount and timing of expenses associated
with the development and marketing of new products, the Company's ability to
protect and continue to develop its proprietary technology in the face of
competition and technological change, risks associated with the Company's
international operations, general economic conditions and the other risks set
forth in the Company's Prospectus dated September 17, 1997.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1996
Sales. Sales increased $1.8 million, or 44.7% from $4.1 million for the
three months ended September 30, 1996 to $5.9 million for three months ended
September 30, 1997. The increase was primarily due to increased unit sales
resulting from additional sales personnel and expanded promotional efforts,
especially in the international markets. International sales increased $1.2
million or 100% from $1.2 million for the three months ended September 30, 1996,
to $2.4 million for the three months ended September 30, 1997.
Gross profit. Gross profit increased $1.2 million, or 51.7% from $2.3
million for the three months ended September 30, 1996 to $3.5 million for the
three months ended September 30, 1997. Gross margin increased from 57.0% for the
three months ended September 30, 1996 to 59.7% for the three months ended
September 30, 1997. This margin increase was attributable primarily to a
reduction in product costs as a result of technological improvements, purchasing
economies and production efficiencies.
Selling expenses. Selling expenses increased $491,000, or 52.2%, from
$941,000 for the three months ended September 30, 1996 to $1.4 million for the
three months ended September 30, 1997. This increase was a result of the
Company's expansion of sales and marketing staff in the United States and
Europe. Selling expenses as a percentage of sales increased from 23.0% for the
three months ended September 30, 1996 to 24.2% for the three months ended
September 30, 1997.
General and administrative expenses. General and administrative expenses
increased $115,000, or 58.8%, from $195,000 for the three months ended September
30, 1996 to $310,000 for the three months ended September 30, 1997. This
increase resulted primarily from the hiring of additional administrative
personnel. General and administrative expenses as a percentage of sales
increased from 4.8% for the three months ended September 30, 1996 to 5.2% for
the three months ended September 30, 1997.
Research and development expenses. Research and development expenses
increased $135,000, or 70.3%, from $192,000 for the three months ended September
30, 1996 to $327,000 for the three months ended September 30, 1997. This
increase was a result of increased personnel cost attributable to new product
development.
Other Income. Other income increased $21,000, from $10,000 for the three
months ended September 30, 1996 to $32,000 for the three months ended September
30, 1997. The increase resulted from a foreign exchange gain ($30,000),
partially offset by a loss on disposal of obsolete fixed assets ($10,000).
Interest expense. Interest expense decreased $10,000, or 18.3% from
$53,600 for the three months ended September 30, 1996 to $43,800 for the three
months ended September 30, 1997. This reduction was attributable to the
refinancing of the Company's indebtedness, resulting in a reduced principal
balance and lower interest rate for the first 10 weeks of the quarter, and a
further reduction in debt in the last 2 weeks of the quarter from use of
proceeds from the Company's Initial Public Offering.
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Income Tax Expense. Income tax expense increased $173,000, or 43.3%,
from $400,000 for the three months ended September 30, 1996 to $573,000 for the
three months ended September 30, 1997. The provision for income taxes as a
percentage of income before income taxes was 44.2% for the three months ended
September 30, 1996 and 40.9% for the three months ended September 30, 1997.
Net Income. Net income increased $325,000, or 64.5%, from $504,000 for
the three months ended September 30, 1996 to $829,000 for the three months ended
September 30, 1997.
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1996
Sales. Sales increased $5.7 million, or 53.9% from $10.5 million for the
first nine months of 1996 to $16.2 million for the first nine months of 1997.
The increase was primarily the result of increased unit sales due to an expanded
sales effort that included the addition of sales personnel at existing offices,
the opening of sales offices, expanded promotional efforts, and the addition of
new product features.
Gross profit. Gross profit increased $3.6 million, or 59.9%, from $6.0
million for the first nine months of 1996 to $9.6 million for the first nine
months of 1997. Gross margin increased from 57.3% for the first nine months of
1996 to 59.5% for the first nine months of 1997. This margin increase was
attributable to a reduction in product costs as a result of technological
improvements, purchasing economies and production efficiencies, partially offset
by a decrease in average unit prices.
Selling expenses. Selling expenses increased $1.4 million, or 52.4%,
from $2.6 million for the first nine months of 1996 to $4.0 million for the
first nine months of 1997. This increase was a result of the Company's expansion
of sales and marketing staff in the United States and Europe, and expanded
promotional efforts. Selling expenses as a percentage of sales decreased
slightly from 24.6% for the first nine months of 1996 to 24.4% for the first
nine months of 1997.
General and administrative expenses. General and administrative expenses
increased $372,000 or 68.2% from $545,000 for the first nine months of 1996 to
$917,000 for the first nine months of 1997. This increase resulted primarily
from the hiring of additional administrative personnel, increases in
professional and legal expenses. General and administrative expenses as a
percentage of sales increased from 5.2% for the first nine months of 1996 to
5.6% for the first nine months of 1997.
Research and development expenses. Research and development expenses
increased $293,000, or 68.5%, from $428,000 for the first nine months of 1996 to
$722,000 for the first nine months of 1997. This increase was a result of
increased personnel cost attributable to new product development. Research and
development expenses as a percentage of sales increased from 4.1% for the first
nine months of 1996 to 4.4% for the first nine months of 1997
Employee stock options expenses. Employee stock options expenses
increased $348,000 from $17,000 for the first nine months of 1996 to $365,000
for the first nine months of 1997. This increase was primarily attributable to
the grant of 52,733 options in May 1997, which was made at an exercise price
below the fair market value of the Common Stock on the date of the grant.
Interest expense. Interest expense decreased $67,000, or 37.9%, from
$176,000 for the first nine months of 1996 to $110,000 for the first nine months
of 1997. This reduction was primarily attributable to the refinancing of the
Company's indebtedness, resulting in a reduced principal and lower interest
rate.
Income tax expense. Income tax expense increased $469,000, or 49.9%,
from $941,000 for the first nine months of 1996 to $1.4 million for the first
nine months of 1997. The provision for income taxes as a percentage of income
before income taxes was 44.2% in the first nine months of 1996 and 40.3% in the
first nine months of 1997.
Net Income. Net income increased $899,000, or 75.8%, from $1.2 million
for the first nine months of 1996 to $2.1 million for the first nine months of
1997.
10
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LIQUIDITY AND CAPITAL RESOURCES
In September 1997, the Company completed an initial public offering of
stock which provided net cash after offering expenses, of $31.8 million.
For the nine months ended September 30, 1997, net cash used by operating
activities was $851,000 compared to net cash provided by operating activities of
$1.1 million for the same period of 1996. Net cash in this period decreased
primarily due to increases in accounts receivable.
Net cash used in investing activities was $509,000 for the nine months
ended September 30, 1997 compared to $337,000 for the nine months ended
September 30, 1996. Net cash used in investing activities increased for the
first nine months of 1997 primarily due to increased patent costs.
Net cash provided by financing activities for the nine months ended
September 30, 1997 was $31.7 million compared to net cash used in financing
activities of $600,000 for the nine months ended September 30, 1996. Net cash
provided by financing activities increased due to the proceeds from the
Company's initial public offering in September 1997. The Company invests excess
cash balances in short-term investment grade securities, such as money market
investments, obligations of the U.S. government and its agencies, and
obligations of state and local government agencies.
The Company has a loan agreement in the form of a term note and a line
of credit that matures in September 1999. The Company had available borrowings
under the line of credit in the amount of $430,000 at September 30, 1997.
Advances outstanding under the loan bear interest at the 30-day commercial paper
rate plus 2.7% per annum (8.26% at September 30, 1997). Principal payments of
$667,000 and $229,000 will be due in 1998, and 1999, respectively. Outstanding
borrowings under this loan agreement at September 30, 1997 were approximately
$896,000. Management intends to repay the outstanding balance during the fourth
quarter of 1997. The loan is collateralized by substantially all of the
Company's assets. The loan agreement contains restrictive covenants, including
the maintenance of certain amounts of working capital and tangible net worth and
limits on loans to related parties. In April 1997, the Company also obtained a
one-year secured $1.0 million line of credit from the same lender which bears
interest at the 30-day commercial paper rate plus 2.65% per annum (8.21% at
September 30, 1997). There were no outstanding borrowings under this loan
agreement at September 30, 1997.
The Company's principal commitments at September 30, 1997 were leases on
its headquarters and regional offices, and there were no material commitments
for capital expenditures at that date. The Company believes that its cash,
investments, cash flows from operations and funds available from its credit
facilities will be sufficient to satisfy its working capital and capital
expenditure needs at least through 1998.
11
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The effective date of the Company's first registration statement filed
under the Securities Act was September 17, 1997. The Commission file number
assigned to the registration statement was 333-32983. The offering date was
September 17, 1997, and the managing underwriters were Raymond James &
Associates, Inc. and Hanifen, Imhoff Inc. Common stock was the only class of
securities registered.
The Company registered and sold 2,760,000 shares in the main offering,
plus 159,000 shares pursuant to the over-allotment option granted to the
underwriters. The aggregate price was $33,120,000 without the over-allotment
portion, and $35,028,000 with the over-allotment portion.
Expenses incurred by the Company from the effective date of the
Securities Act registration statement to September 30, 1997 include estimated
offering expenses of $731,000, and the underwriters' discount of $2,318,400
before the over-allotment option, and $2,452,000 after the over-allotment. No
payments were made to directors, officers, general partners of the Company or
their associates, to persons owning ten (10) percent or more of any class of
equity securities of the Company, or to affiliates of the Company. No payments
were made to any others.
The net offering proceeds to the Company after deducting the expenses
described in the preceding paragraph were $30,070,600 without the
over-allotment, and $31,845,000 with the over-allotment.
The selling shareholders registered and sold 600,000 shares, plus
345,000 shares pursuant to the over-allotment option granted to the
underwriters. The aggregate price without the over-allotment was $7,200,000, and
$11,340,000 with the over-allotment. The selling shareholders incurred
underwriters' discounts of $504,000 before the over-allotment option, and
$793,800 after the over-allotment option.
From the effective date of the Securities Act registration statement to
September 30, 1997 none of the net proceeds from the offering were used for
construction of plant, building and facilities; purchase and installation of
machinery and equipment; purchase of real estate; or acquisition of other
businesses. Approximately $600,000 was used to repay indebtedness, $2.7
million was used as working capital, and $28 million was invested in money
market investments, obligations of the US Government and its agencies and
obligations of state and local government agencies. No payments were made to
directors, officers, general partners of the Company or their associates, to
persons owning ten (10) percent or more of any class of equity securities of the
Company, or to affiliates of the Company. No payments were made to any others.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
None
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: NOVEMBER 12, 1997 FARO TECHNOLOGIES, INC.
(Registrant)
By: /s/Gregory A. Fraser
---------------------------------------------
Gregory A. Fraser
Executive Vice President and Chief Financial
Officer
(Duly Authorized Officer and Principal Financial
Officer)
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1997 AND THE CONSOLIDATED
STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED-SEPTEMBER 30, 1997 AND 1996 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FILING ON FORM 10-Q FOR THE
QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1997
<PERIOD-START> JAN-01-1996 JAN-01-1997
<PERIOD-END> SEP-30-1996 SEP-30-1997
<CASH> 0 30,563,703
<SECURITIES> 0 0
<RECEIVABLES> 0 5,346,731
<ALLOWANCES> 0 0
<INVENTORY> 0 3,747,483
<CURRENT-ASSETS> 0 39,924,417
<PP&E> 0 1,474,129
<DEPRECIATION> 0 695,016
<TOTAL-ASSETS> 0 41,530,350
<CURRENT-LIABILITIES> 0 3,197,219
<BONDS> 0 0
0 0
0 0
<COMMON> 0 9,919
<OTHER-SE> 0 37,954,913
<TOTAL-LIABILITY-AND-EQUITY> 0 41,530,350
<SALES> 10,543,306 16,277,841
<TOTAL-REVENUES> 10,563,986 16,385,436
<CGS> 4,501,114 6,567,395
<TOTAL-COSTS> 3,759,305 6,163,467
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 176,456 109,660
<INCOME-PRETAX> 2,127,111 3,494,912
<INCOME-TAX> 940,962 1,410,191
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,186,149 2,084,723
<EPS-PRIMARY> .16 .28
<EPS-DILUTED> 0 0
</TABLE>
