FARO TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended

(in thousands)

June 30, 2018

June 30, 2017

Cash flows from:

Operating activities:

Net income (loss)

$

1,660

$

(5,086)

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

Depreciation and amortization

8,720

7,707

Stock-based compensation

3,400

3,195

Provision for bad debts

211

230

Loss on disposal of assets

165

122

Provision for excess and obsolete inventory

504

736

Deferred income tax (benefit) expense

(190)

168

Change in operating assets and liabilities:

Decrease (increase) in:

Accounts receivable

252

4,771

Inventories

(6,664)

(10,107)

Prepaid expenses and other current assets

(3,526)

(6,489)

(Decrease) increase in:

Accounts payable and accrued liabilities

(2,901)

1,610

Income taxes payable

(4,378)

(590)

Customer deposits

382

(163)

Unearned service revenues

2,372

(472)

Net cash provided by (used in) operating activities

7

(4,368)

Investing activities:

Proceeds from sale of investments

—

21,000

Purchases of property and equipment

(5,164)

(3,669)

Payments for intangible assets

(1,186)

(645)

Acquisition of businesses

(3,965)

(5,496)

Equity investments and advances to affiliates

(1,786)

—

Net cash (used in) provided by investing activities

(12,101)

11,190

Financing activities:

Payments on capital leases

(46)

(4)

Proceeds from issuance of stock related to stock option exercises

7,133

284

Net cash provided by financing activities

7,087

280

Effect of exchange rate changes on cash and cash equivalents

(2,399)

4,323

(Decrease) increase in cash and cash equivalents

(7,406)

11,425

Cash and cash equivalents, beginning of period

140,960

106,169

Cash and cash equivalents, end of period

$

133,554

$

117,594