"First quarter revenue came in below expectations as the Chinese government's mandated COVID lockdown in Shanghai prevented shipments from our lone Chinese logistics center at the end of March. Additionally, ongoing supply chain shortages and softer than expected demand in the AEC market further impacted our Q1 revenue," stated Michael Burger, President and Chief Executive Officer. "With the launch of our new Focus Premium Laser Scanner in April and the Quantum Max FaroArm in the second half of 2021, we have refreshed three quarters of FARO's hardware revenue which positions us very well competitively."
Mr. Burger continued, "Our focus remains on providing the market increasing levels of analytics, insights and value from 3D models captured by FARO's hardware products and accessed through FARO Sphere, our recently announced cloud-based environment. While the ongoing uncertainties in the market create risks to near-term results, the long-term opportunity for FARO remains as exciting as ever. Our high accuracy expertise and focus on enabling customers to efficiently and easily manage their assets virtually, positions us well to capitalize on the massive potential of the digital reality market."
First Quarter 2022 Financial Summary
- Total sales of $76.7 million, in line with the prior year period
- Software sales, of $10.3M or 13% of revenue remained in line with the prior year period
- Recurring revenue of $16.5M or 21.5% of sales was up 6.5% compared to the prior year period
- Gross margin of 53.5%, compared to 52.9% in the prior year period
- Non-GAAP gross margin of 53.8%, compared to 53.0% in the prior year period
- Operating expenses of $48.2 million, compared to $46.8 million in the prior year period
- Non-GAAP operating expenses of $44.2 million, compared to $42.8 million in the prior year period
- Net loss of $9.7 million, or ($0.53) per share compared to $3.2 million, or ($0.18) per share in the prior year period
- Non-GAAP net loss of $2.5 million, or ($0.14) per share compared to $0.6 million, or ($0.03) per share in the prior year period
- Adjusted EBITDA of ($0.7) million, or (0.9%) of total sales compared to $0.4 million, or 0.5% of total sales in the prior year period
- Cash and short-term investments of $107.2 million, compared to $122.0 million as of December 31, 2021
* 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".
Outlook for the Second Quarter 2022
For the second quarter ending June 30, 2022, FARO currently expects:
- Revenue in the range of $77 to $85 million
- Non-GAAP (loss) earnings per share in the range of ($0.17) to $0.04
Conference Call
The Company will host a conference call to discuss these results on Wednesday, April 27, 2022 at 5:00 p.m. ET. Interested parties can access the conference call by dialing (866) 518-6930 (U.S.) or +1 (203) 518-9797 (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/en/About-Us/Investor-Relations/Financial-Events-and-Presentations
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
FARO serves the 3D Metrology, AEC (Architecture, Engineering & Construction), O&M (Facilities Operations & Maintenance), and Public Safety Analytics markets. For over 40 years, FARO has provided industry-leading technology solutions that enable customers to digitize 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 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 gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP loss from operations, non-GAAP net loss and non-GAAP net loss per share, exclude the impact of purchase accounting intangible amortization expense, stock-based compensation, 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 EBITDA, which is calculated as net loss before interest expense, net, income tax expense (benefit) and depreciation and amortization, and Adjusted EBITDA, which is calculated as EBITDA, excluding other income, net, stock-based compensation, and restructuring charges, as measures of our operating profitability. The most directly comparable GAAP measure to EBITDA and Adjusted EBITDA is net loss. We also present Adjusted EBITDA margin, which is calculated as Adjusted EBITDA as a percent of total sales.
