FARO Reports Second Quarter 2018 Financial Results

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties, such as statements about demand for and customer acceptance of FARO's products, and FARO's product development and product launches. Statements that are not historical facts or that describe the Company's plans, objectives, projections, expectations, assumptions, strategies, or goals are forward-looking statements. In addition, words such as "is," "will" and similar expressions or discussions of FARO's plans or other intentions identify forward-looking statements. Forward-looking statements are not guarantees of future performance and are subject to various known and unknown risks, uncertainties, and other factors that may cause actual results, performances, or achievements to differ materially from future results, performances, or achievements expressed or implied by such forward-looking statements. Consequently, undue reliance should not be placed on these forward-looking statements.

Factors that could cause actual results to differ materially from what is expressed or forecasted in such forward-looking statements include, but are not limited to:

development by others of new or improved products, processes or technologies that make the Company's products less competitive or obsolete;
the Company's inability to maintain its technological advantage by developing new products and enhancing its existing products;
declines or other adverse changes, or lack of improvement, in industries that the Company serves or the domestic and international economies in the regions of the world where the Company operates and other general economic, business, and financial conditions; and
other risks detailed in Part I, Item 1A. Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 and in Part II, Item 1A. Risk Factors in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.

Forward-looking statements in this release represent the Company's judgment as of the date of this release. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, unless otherwise required by law.

More information is available at http://www.faro.com.

FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

	Three Months Ended				Six Months Ended
(in thousands, except share and per share data)	June 30, 2018		June 30, 2017		June 30, 2018		June 30, 2017
Sales
Product	$	75,720	$	62,533	$	146,301	$	124,913
Service	22,524		20,149		44,777		39,331
Total sales	98,244		82,682		191,078		164,244
Cost of Sales
Product	27,878		24,455		54,762		51,513
Service	12,675		11,467		24,839		22,222
Total cost of sales (exclusive of depreciation and amortization, shown separately below)	40,553		35,922		79,601		73,735
Gross Profit	57,691		46,760		111,477		90,509
Operating Expenses
Selling and marketing	30,084		26,022		58,355		48,894
General and administrative	11,320		11,877		22,393		22,576
Depreciation and amortization	4,377		3,989		8,720		7,707
Research and development	9,983		9,045		19,389		17,511
Total operating expenses	55,764		50,933		108,857		96,688
Income (loss) from operations	1,927		(4,173)		2,620		(6,179)
Other expense (income)
Interest income, net	(87)		(89)		(160)		(171)
Other expense, net	509		459		693		467
Income (loss) before income tax expense (benefit)	1,505		(4,543)		2,087		(6,475)
Income tax expense (benefit)	300		(918)		427		(1,389)
Net income (loss)	$	1,205	$	(3,625)	$	1,660	$	(5,086)
Net income (loss) per share - Basic	$	0.07	$	(0.22)	$	0.10	$	(0.30)
Net income (loss) per share - Diluted	$	0.07	$	(0.22)	$	0.10	$	(0.30)
Weighted average shares - Basic	16,966,928		16,700,718		16,902,390		16,692,500
Weighted average shares - Diluted	17,264,642		16,700,718		17,210,054		16,692,500

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