"Second quarter demand reflected a return to seasonal growth, with broad based improvement across our served markets," stated Michael Burger, President and Chief Executive Officer. "While demand recovers, we remain focused on creating opportunities to drive topline growth such as the expansion of our Digital Twin offering through the addition of Holobuilder's photogrammetry capabilities and our recently announced next generation Quantum Max ScanArm family of products, as well as further streamlining our operational cost structure with the recently announced shift to outsourced manufacturing."
Mr. Burger continued, "Through the combination of strategic initiatives implemented over the last two years and the investments we continue to make in our hardware, software and solution offerings to directly address our customer's workflow needs, we believe we are well positioned to drive strong operating leverage and long-term differentiation as the market grows."
Second Quarter 2021 Financial Summary
Total sales were $82.1 million for second quarter 2021 representing an 8% sequential quarterly increase when compared to $76.3 million in the first quarter 2021, and a 36% increase when compared with total sales of $60.6 million for second quarter 2020. The sequential sales increase represents typical market seasonality while the year over year growth was primarily a result of pandemic related softness in the prior year period. Similarly, new order bookings of $88.2 million increased 9% sequentially compared to $80.6 million in the first quarter 2021 and increased 44% when compared to $61.4 million for the second quarter 2020.
Gross margin was 55.4% for the second quarter 2021, as compared to 47.7% for the same prior year period. Non-GAAP gross margin was 55.7% for the second quarter 2021 compared to 48.4% for the second quarter 2020. The annual increase in gross margin was primarily a result of higher volume compared to the prior year period.
Operating expenses were $46.1 million for the second quarter 2021, compared to $40.9 million for the same prior year period. Non-GAAP operating expenses were $41.8 million for the second quarter 2021 compared to $37.7 million for the second quarter 2020.
Net loss was $1.2 million, or $0.06 per share, for the second quarter 2021, as compared to a net loss of $8.9 million, or $0.50 per share, for the second quarter 2020. Non-GAAP net income was $2.2 million, or $0.12 per share, for the second quarter 2021 compared to Non-GAAP net loss of $6.3 million, or $0.36 per share, for the second quarter 2020.
Adjusted EBITDA was $6.5 million, or 7.9% of Non-GAAP total sales, for the second quarter of 2021 compared to Adjusted EBITDA of negative $5.0 million, or 8.2% of Non-GAAP total sales, for the second quarter of 2020.
The Company's cash and short-term investments decreased $36.6 million to $133.3 million as of the end of the second quarter of 2021, primarily due to the $34 million acquisition of HoloBuilder which closed in the quarter. The Company remained debt-free.
* A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures is provided in the financial schedules portion at the end of this press release. An additional explanation of these measures is included below under the heading "Non-GAAP Financial Measures".
Conference Call
The Company will host a conference call to discuss these results on Thursday, July 29, 2021 at 8:00 a.m. ET. Interested parties can access the conference call by dialing (877) 876-9176 (U.S.) or +1 (785) 424-1669 (International) and using the passcode FARO. A live webcast will be available in the Investor Relations section of FARO's website at:
https://www.faro.com/about-faro/investor-relations/events
A replay webcast will be available in the Investor Relations section of the company's web site approximately two hours after the conclusion of the call and will remain available for approximately 30 calendar days.
About FARO
For 40 years, FARO has provided industry-leading technology solutions that enable customers to quickly and easily measure their world, and then use that data to make smarter decisions faster. FARO continues to be a pioneer in bridging the digital and physical worlds through data-driven reliable accuracy, precision and immediacy. For more information, visit
http://www.faro.com
Non-GAAP Financial Measures
This press release contains information about our financial results that are not presented in accordance with U.S. generally accepted accounting principles ("GAAP"). These non-GAAP financial measures, including non-GAAP total sales, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income (loss) from operations, non-GAAP other expense (income), net, non-GAAP net income (loss) and non-GAAP net income (loss) per share, exclude the GSA sales adjustment (as defined in the tables below), the impact of purchase accounting intangible amortization expense, stock-based compensation, imputed interest expense recorded related to the GSA Matter, restructuring charges, and other tax adjustments, and are provided to enhance investors' overall understanding of our historical operations and financial performance.
In addition, we present Adjusted EBITDA, which is calculated as net loss before interest expense, net, income tax benefit and depreciation and amortization, excluding other expense (income), net, stock-based compensation, the GSA sales adjustment, and restructuring charges, as measures of our operating profitability. The most directly comparable GAAP measure to Adjusted EBITDA is net loss. We also present Adjusted EBITDA margin, which is calculated as Adjusted EBITDA as a percent of Non-GAAP total sales.
