FARO TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Nine Months Ended

(in thousands)

September 30,
2020

September 30,
2019

Cash flows from:

Operating activities:

Net loss

$

(26,779)

$

(12,452)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

10,631

14,203

Stock-based compensation

6,428

8,703

Provisions for bad debts, net of recoveries

435

1,000

Loss on disposal of assets

351

552

Provision for excess and obsolete inventory

778

2,431

Deferred income tax benefit

(4,961)

(69)

Impairment charge on equity method investment

—

1,535

Change in operating assets and liabilities:

Decrease (Increase) in:

Accounts receivable

28,132

21,883

Inventories

5,101

(9,471)

Prepaid expenses and other current assets

9,391

640

Increase (Decrease) in:

Accounts payable and accrued liabilities

(10,006)

(6,934)

Income taxes payable

(6,109)

(3,679)

Customer deposits

815

(685)

Unearned service revenues

(3,391)

5,809

Net cash provided by operating activities

10,816

23,466

Investing activities:

Purchases of property and equipment

(2,833)

(5,922)

Proceeds from sale of investments

25,000

33,700

Purchases of investments

—

(33,700)

Proceeds from asset sales

768

—

Payments for intangible assets

(813)

(2,035)

Acquisition of business, net of cash received

(6,036)

—

Loan originated to affiliate

—

(549)

Net cash provided by (used in) investing activities

16,086

(8,506)

Financing activities:

Payments on finance leases

(237)

(273)

Payments of contingent consideration for acquisitions

(733)

(3,101)

Payments for taxes related to net share settlement of equity awards

(2,568)

(1,389)

Proceeds from issuance of stock related to stock option exercises

5,384

2,328

Net cash provided by (used in) financing activities

1,846

(2,435)

Effect of exchange rate changes on cash and cash equivalents

1,255

(2,225)

Increase in cash and cash equivalents

30,003

10,300

Cash and cash equivalents, beginning of period

133,634

108,783

Cash and cash equivalents, end of period

$

163,637

$

119,083