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FARO Announces Fourth Quarter and Full Year 2023 Financial Results

Published

8 months ago

on

Q4 revenue of $98.8 million, at the upper end of our guidance rangeQ4 earnings per share (“EPS”) of $0.08; Non-GAAP EPS of $0.36, above our guidance rangeSignificant improvement in cash flow, which results in positive Q4 and FY2023 cash flow from operations

LAKE MARY, Fla., Feb. 27, 2024 /PRNewswire/ — FARO® Technologies, Inc. (Nasdaq: FARO), a global leader in 4D digital reality solutions, today announced its financial results for the fourth quarter and full year ended December 31, 2023.

“We are pleased with our improved financial performance and remain excited about the long term prospects of our integrated hardware and software solutions strategy to create customer value in our core markets,” said Peter Lau, President & Chief Executive Officer. “GAAP EPS of $0.08 and non-GAAP EPS of $0.36 exceeded the high end of our guidance range. GAAP net income of $1.6 million and Adjusted EBITDA of $13.2 million, an increase of 12% year over year, attributed to higher than anticipated revenue and continued improvement in operational execution. We also expanded our cash position by generating $18.7 million of operating cash flow in the quarter, driven by profitability and efficiencies in working capital.”

Fourth Quarter 2023 Financial Summary

Total sales of $98.8 million, down 5% year over yearGross margin of 50.9%, compared to 49.1% in the prior year periodNon-GAAP gross margin of 52.5%, compared to 52.8% in the prior year periodOperating expenses of $48.9 million, compared to $52.7 million in the prior year periodNon-GAAP operating expenses of $41.3 million, compared to $45.8 million in the prior year periodNet income of $1.6 million, or $0.08 per share compared to net loss of $2.2 million, or $(0.12) per share in the prior year periodNon-GAAP net income of $6.8 million, or $0.36 per share compared to net income of $7.1 million, or $0.38 per share in the prior year periodAdjusted EBITDA of $13.2 million, or 13.3% of total sales compared to $11.7 million, or 11.3% of total sales in the prior year periodCash, cash equivalents & short-term investments of $96.3 million, compared to $79.9 million as of September 30, 2023.

* 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”.

Full Year 2023 Financial Summary

Total sales of $358.8 million, up 4% compared to the prior year periodNet loss of $56.6 million, or $(2.99) per share compared to net loss of $26.8 million, or $(1.46) per share in the prior year periodNon-GAAP net loss of $2.4 million, or $(0.13) per share compared to non-GAAP net income of $4.6 million, or $0.25 per share in the prior year period

Outlook for the First Quarter 2024
For the first quarter ending March 31, 2024, FARO currently expects:

Revenue in the range of $77 to $85 millionGross margin in the range of 49.0% – 50.5%. Non-GAAP gross margin in the range of 49.5% – 51.0% Operating expenses in the range of $47.5 – $49.5 million. Non-GAAP operating expenses in the range of $41 – $43 millionNet loss per share in the range of ($0.66) – ($0.46). Non-GAAP loss per share in the range of ($0.20) to $0.00

Conference Call
The Company will host a conference call to discuss these results on Wednesday, February 28, 2024, at 8:00 a.m. ET. Interested parties can access the conference call by dialing (800) 245-3047 (U.S.) or +1 (203) 518-9708 (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
For 40 years, FARO has provided industry-leading technology solutions that enable customers to 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 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 income from operations, non-GAAP net income and non-GAAP net income per share, exclude the impact of purchase accounting intangible amortization expense and fair value adjustments, stock-based compensation, restructuring and other 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 income (loss) before interest (income) expense, net, income tax benefit (expense) and depreciation and amortization and fair value adjustments, and Adjusted EBITDA, which is calculated as EBITDA, excluding other (income) expense, net, stock-based compensation, and restructuring and other charges, as measures of our operating profitability. The most directly comparable GAAP measure to EBITDA and Adjusted EBITDA is net income (loss). We also present Adjusted EBITDA margin, which is calculated as Adjusted EBITDA as a percent of total sales.

In our fourth quarter reporting, we have included non-GAAP total sales on a constant currency basis. The most directly comparable GAAP measure to total sales on a constant currency basis is total sales. We believe constant currency information is useful in analyzing underlying trends in our business and the commercial performance of our products by eliminating the impact of highly volatile fluctuations in foreign currency markets and allows for period-to-period comparisons of our performance. For simplicity, we may elect to omit this information in future periods if we determine a lack of material impact. To present this information, current period performance for entities reporting in currencies other than U.S. dollars are converted to U.S. dollars at the exchange rate in effect during the last day of the prior comparable period.

Management believes that these non-GAAP financial measures provide investors with relevant period-to-period comparisons of our core operations using the same methodology that management employs in its review of the Company’s operating results. These financial measures are not recognized terms under GAAP and should not be considered in isolation or as a substitute for a measure of financial performance prepared in accordance with GAAP.

These non-GAAP financial measures have limitations that should be considered before using these measures to evaluate a company’s financial performance. These non-GAAP financial measures, as presented, may not be comparable to similarly titled measures of other companies due to varying methods of calculation. The financial statement tables that accompany this press release include a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
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 the outlook for the first quarter of 2024, demand for and customer acceptance of FARO’s products, FARO’s product development and product launches, FARO’s growth, strategic and restructuring plans and initiatives, including but not limited to the additional restructuring charges expected to be incurred in connection with our restructuring and integration plans and the timing and amount of cost savings and other benefits expected to be realized from the restructuring and integration plans and other strategic initiatives, and FARO’s growth potential and profitability. 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:

the Company’s ability to realize the intended benefits of its undertaking to transition to a company that is reorganized around functions to improve the efficiency of its sales organization and to improve operational effectiveness;the Company’s inability to successfully execute its strategic plan, restructuring plan and integration plan, including but not limited to additional impairment charges and/or higher than expected severance costs and exit costs, and its inability to realize the expected benefits of such plans;the changes in our executive management team in 2023 and 2024 and the loss of any of our executive officers or other key personnel, which may be impacted by factors such as our inability to competitively address inflationary pressures on employee compensation and flexibility in employee work arrangements;the outcome of any litigation to which the Company is or may become a party;loss of future government sales;potential impacts on customer and supplier relationships and the Company’s reputation;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;the effect of general economic and financial market conditions, including in response to public health concerns;assumptions regarding the Company’s financial condition or future financial performance may be incorrect;the impact of fluctuations in foreign exchange rates and inflation rates; andother risks and uncertainties discussed in Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 that will be filed with the SEC following this earnings release, and in other SEC filings.

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.

FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

Twelve Months Ended

(in thousands, except share and per share data)

December 31,
2023

December 31,
2022

December 31,
2023

December 31,
2022

Sales

Product

$         78,818

$         83,265

$       278,572

$       265,280

Service

20,022

20,594

80,259

80,485

Total sales

98,840

103,859

358,831

345,765

Cost of sales

Product

37,781

40,957

150,472

123,836

Service

10,773

11,867

43,360

46,166

Total cost of sales

48,554

52,824

193,832

170,002

Gross profit

50,286

51,035

164,999

175,763

Operating expenses

Selling, general and administrative

39,429

37,923

157,336

146,657

Research and development

9,238

12,659

41,806

49,415

Restructuring costs

263

2,102

15,393

4,614

Total operating expenses

48,930

52,684

214,535

200,686

Income (loss) from operations

1,356

(1,649)

(49,536)

(24,923)

Other (income) expense

Interest expense (income)

819

(8)

3,348

(36)

Other expense (income), net

1,303

(159)

1,178

(3,236)

Loss before income tax

(766)

(1,482)

(54,062)

(21,651)

Income tax (benefit) expense

(2,354)

753

2,515

5,105

Net income (loss)

$           1,588

$         (2,235)

$       (56,577)

$       (26,756)

Net income (loss) per share – Basic

$              0.08

$            (0.12)

$            (2.99)

$            (1.46)

Net income (loss) per share – Diluted

$              0.08

$            (0.12)

$            (2.99)

$            (1.46)

Weighted average shares – Basic

18,961,632

18,780,081

18,917,778

18,318,191

Weighted average shares – Diluted

21,086,277

18,780,081

18,917,778

18,318,191

 

FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

December 31,
2023

December 31,
2022

ASSETS

Current assets:

Cash and cash equivalents

$           76,787

$           37,812

Short-term investments

19,496

—

Accounts receivable, net

92,028

90,326

Inventories, net

34,529

50,026

Prepaid expenses and other current assets

38,768

41,201

Total current assets

261,608

219,365

Non-current assets:

Property, plant and equipment, net

21,181

19,720

Operating lease right-of-use asset

12,231

18,989

Goodwill

109,534

107,155

Intangible assets, net

47,891

48,978

Service and sales demonstration inventory, net

23,147

30,904

Deferred income tax assets, net

25,027

24,192

Other long-term assets

4,073

4,044

Total assets

$         504,692

$         473,347

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$           27,404

$           27,286

Accrued liabilities

29,930

23,345

Income taxes payable

5,699

6,767

Current portion of unearned service revenues

40,555

36,407

Customer deposits

4,251

6,725

Lease liability

5,434

5,709

Total current liabilities

113,273

106,239

Loan – 5.50% Convertible Senior Notes

72,760

—

Unearned service revenues – less current portion

20,256

20,947

Lease liability – less current portion

10,837

14,649

Deferred income tax liabilities

13,308

11,708

Income taxes payable – less current portion

5,629

8,706

Other long-term liabilities

23

49

Total liabilities

236,086

162,298

Commitments and contingencies

Shareholders’ equity:

Common stock – par value $0.001, 50,000,000 shares authorized; 20,343,359 and
20,156,233 issued; 18,968,798 and 18,780,013 outstanding, respectively

20

20

Additional paid-in capital

346,277

328,227

(Accumulated deficit) Retained earnings

(9,789)

46,788

Accumulated other comprehensive loss

(37,247)

(33,331)

Common stock in treasury, at cost – 1,376,220 and 1,376,220 shares held, respectively

(30,655)

(30,655)

Total shareholders’ equity

268,606

311,049

Total liabilities and shareholders’ equity

$         504,692

$         473,347

 

FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

Twelve Months Ended

December 31,

(in thousands)

2023

2022

Cash flows from:

Operating activities:

Net loss

$           (56,577)

$           (26,756)

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

Depreciation and amortization

15,377

13,983

Stock-based compensation

17,833

13,317

Inventory write-downs

9,340

—

Asset impairment charges

5,707

507

Provision for bad debts, net of recoveries

1,030

163

Amortization of debt discount and issuance costs

450

—

Loss on disposal of assets

274

156

Provision for excess and obsolete inventory

2,361

(68)

Impairment of intangible assets

—

1,135

Deferred income tax expense (benefit)

(26)

2,412

Change in operating assets and liabilities, net of acquisitions:

(Increase) decrease in:

Accounts receivable, net

(50)

(11,198)

Inventories

736

3,379

Prepaid expenses and other assets

3,387

(21,239)

(Decrease) increase in:

Accounts payable and accrued liabilities

4,421

4,777

Income taxes payable

(3,808)

(1,904)

Customer deposits

(2,533)

1,343

Unearned service revenues

2,786

(4,863)

Other liabilities

367

—

Net cash provided by (used in) operating activities

1,075

(24,856)

INVESTING ACTIVITIES:

Purchases of property and equipment

(6,817)

(6,371)

Purchases of short-term investments

(19,496)

—

Cash paid for technology development, patents and licenses

(7,177)

(10,567)

Acquisitions of businesses and minority share investments, net of cash received

—

(32,959)

Net cash used in investing activities

(33,490)

(49,897)

Financing activities:

Payments on capital leases

(154)

(220)

Cash settlement of equity awards

217

(1,892)

Short term debt

—

1,115

Proceeds from issuance of 5.50% Convertible Senior Notes, due 2028, net of discount, issuance
cost and accrued interest

72,310

—

Payment of contingent consideration for business acquisition

(1,098)

—

Net cash provided by (used in) financing activities

71,275

(997)

Effect of exchange rate changes on cash and cash equivalents

115

(8,427)

Increase (Decrease) in cash and cash equivalents

38,975

(84,177)

Cash and cash equivalents, beginning of period

37,812

121,989

Cash and cash equivalents, end of period

$             76,787

$             37,812

 

FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP
(UNAUDITED)

Three Months Ended December 31,

Twelve Months Ended December 31,

(dollars in thousands, except per share data)

2023

2022

2023

2022

Gross profit, as reported

$          50,286

$          51,035

$        164,999

$        175,763

Stock-based compensation (1)

364

294

1,335

1,050

Inventory reserve charge (3)

1,208

—

9,340

—

Restructuring and other costs(2)

51

—

1,377

—

Purchase accounting intangible amortization and fair value
adjustments

—

3,550

—

3,550

Non-GAAP adjustments to gross profit

1,623

3,844

12,052

4,600

Non-GAAP gross profit

$          51,909

$          54,879

$        177,051

$        180,363

Gross margin, as reported

50.9 %

49.1 %

46.0 %

50.8 %

Non-GAAP gross margin

52.5 %

52.8 %

49.3 %

52.2 %

Selling, general and administrative, as reported

$          39,429

$          37,923

$        157,336

$        146,657

Stock-based compensation (1)

(4,488)

(2,179)

(14,198)

(9,654)

Purchase accounting intangible amortization

(634)

(811)

(2,658)

(1,373)

Non-GAAP selling, general and administrative

$          34,307

$          34,933

$        140,480

$        135,630

Research and development, as reported

$            9,238

$          12,659

$          41,806

$          49,415

Stock-based compensation (1)

(705)

(818)

(2,300)

(2,611)

Purchase accounting intangible amortization

(475)

(488)

(2,016)

(2,010)

Non-GAAP research and development

$            8,058

$          11,353

$          37,490

$          44,794

Operating expenses, as reported

$          48,930

$          52,684

$        214,535

$        200,686

Stock-based compensation (1)

(5,194)

(2,997)

(16,498)

(12,265)

Restructuring and other costs (2)

(1,329)

(2,604)

(17,666)

(7,548)

Purchase accounting intangible amortization

(1,109)

(1,299)

(4,674)

(3,383)

Non-GAAP adjustments to operating expenses

(7,632)

(6,900)

(38,838)

(23,196)

Non-GAAP operating expenses

$          41,298

$          45,784

$        175,697

$        177,490

Income (loss) from operations, as reported

$            1,356

$          (1,649)

$        (49,536)

$        (24,923)

Non-GAAP adjustments to gross profit

1,622

3,844

12,052

4,600

Non-GAAP adjustments to operating expenses

7,632

6,900

38,838

23,196

Non-GAAP income from operations

$          10,610

$            9,095

$            1,354

$            2,873

Net income (loss), as reported

$            1,588

$          (2,235)

$        (56,577)

$        (26,756)

Non-GAAP adjustments to gross profit

1,622

3,844

12,052

4,600

Non-GAAP adjustments to operating expenses

7,632

6,900

38,838

23,196

Income tax effect of non-GAAP adjustments

(2,314)

(2,149)

(12,723)

(6,163)

Other tax adjustments (4)

(1,738)

772

15,962

9,675

Non-GAAP net income (loss)

$            6,790

$            7,132

$          (2,448)

$            4,552

Net income (loss) per share – Diluted, as reported

$              0.08

$            (0.12)

$            (2.99)

$            (1.46)

Stock-based compensation (1)

0.28

0.18

0.94

0.73

Restructuring and other costs (2)

0.07

0.14

1.01

0.41

Inventory reserve charge(3)

0.06

—

0.49

—

Purchase accounting intangible amortization and fair value
adjustments

0.06

0.25

0.25

0.37

Income tax effect of non-GAAP adjustments

(0.11)

(0.11)

(0.67)

(0.33)

Other tax adjustments (4)

(0.08)

0.04

0.84

0.53

Non-GAAP net income (loss) per share – Diluted

$              0.36

$              0.38

$            (0.13)

$              0.25

(1)

We exclude stock-based compensation, which is non-cash, from the non-GAAP financial measures because the Company believes that such exclusion provides a better comparison of results of ongoing operations for current and future periods with such results from past periods.

(2)

On February 14, 2020, our Board of Directors approved a global restructuring plan (the “Restructuring Plan”), which is intended to support our strategic plan in an effort to improve operating performance and ensure that we are appropriately structured and resourced to deliver increased and sustainable value to our shareholders and customers. On February 7, 2023, our Board of Directors approved an integration plan (the “Integration Plan”), which is intended to streamline and simplify operations, particularly around our recent acquisitions and the resulting redundant operations and offerings. The Restructuring and other costs primarily consist of severance and related benefits.

(3)

During 2023, we recorded a charge of $9.3 million, increasing our reserve for excess and obsolete inventory, based on our analysis of our inventory reserves in connection with our strategy to simplify our product portfolio and cease selling certain products.

(4)

The other tax adjustments primarily relate to the impact of certain jurisdictions maintaining a full valuation allowance where benefit is not accrued on U.S. GAAP pre-tax book losses.

 

FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA
(UNAUDITED)

Three Months Ended December 31,

Twelve Months Ended December 31,

(in thousands)

2023

2022

2023

2022

Net income (loss)

$          1,588

$        (2,235)

$      (56,577)

$      (26,756)

Interest (income) expense, net

819

(8)

3,348

(36)

Income tax (benefit) expense

(2,354)

753

2,515

5,105

Depreciation and amortization and fair value adjustments

3,649

7,472

15,377

17,533

EBITDA

3,702

5,982

(35,337)

(4,154)

Other (income) expense, net

1,303

(159)

1,178

(3,236)

Stock-based compensation

5,557

3,291

17,833

13,315

Inventory reserve charge(3)

1,208

—

9,340

—

Restructuring and other costs (1)

1,380

2,604

19,043

7,548

Adjusted EBITDA

$        13,150

$        11,718

$        12,057

$        13,473

Adjusted EBITDA margin (2)

13.3 %

11.3 %

3.4 %

3.9 %

(1)

On February 14, 2020, our Board of Directors approved a global restructuring plan (the “Restructuring Plan”), which is intended to support our strategic plan in an effort to improve operating performance and ensure that we are appropriately structured and resourced to deliver increased and sustainable value to our shareholders and customers. On February 7, 2023, our Board of Directors approved an integration plan (the “Integration Plan”), which is intended to streamline and simplify operations, particularly around our recent acquisitions and the resulting redundant operations and offerings. The Restructuring and other costs primarily consist of severance and related benefits.

(2)

Calculated as Adjusted EBITDA as a percentage of total sales.

(3)

During 2023, we recorded a charge of $9.3 million, increasing our reserve for excess and obsolete inventory, based on our analysis of our inventory reserves in connection with our strategy to simplify our product portfolio and cease selling certain products.

 

FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
KEY SALES MEASURES
(UNAUDITED)

For the Three Months Ended
December 31,

For the Twelve Months Ended
December 31,

(in thousands)

2023

2022

2023

2022

Total sales to external customers as reported

Americas (1)

$           42,535

$           44,345

$         167,269

$         154,422

EMEA (1)

33,657

31,680

108,298

98,174

APAC (1)

22,648

27,834

83,264

93,169

$           98,840

$         103,859

$         358,831

$         345,765

For the Three Months Ended
December 31,

For the Twelve Months Ended
December 31,

(in thousands)

2023

2022

2023

2022

Total sales to external customers in constant currency (2)

Americas (1)

$           42,044

$           44,008

$         165,715

$         154,545

EMEA (1)

33,028

33,109

105,545

99,355

APAC (1)

23,873

28,392

85,948

92,268

$           98,945

$         105,509

$         357,208

$         346,168

(1)

Regions represent North America and South America (Americas); Europe, the Middle East, and Africa (EMEA); and the Asia-Pacific (APAC).

(2)

We compare the change in the sales from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying business performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rate in effect during the last day of the prior comparable period, rather than the actual exchange rates in effect during the respective periods.

 

For the Three Months Ended
December 31,

For the Twelve Months Ended
December 31,

(in thousands)

2023

2022

2023

2022

Hardware

$       66,640

$       70,322

$     234,124

$     220,919

Software

12,178

12,943

44,448

44,361

Service

20,022

20,594

80,259

80,485

Total Sales

$       98,840

$     103,859

$     358,831

$     345,765

Hardware as a percentage of total sales

67.4 %

67.7 %

65.2 %

63.9 %

Software as a percentage of total sales

12.3 %

12.5 %

12.4 %

12.8 %

Service as a percentage of total sales

20.3 %

19.8 %

22.4 %

23.3 %

Total Recurring Revenue (3)

$       17,360

$       18,088

$       67,497

$       68,272

Recurring revenue as a percentage of total sales

17.6 %

17.4 %

18.8 %

19.7 %

(3)

Recurring revenue is comprised of hardware service contracts, software maintenance contracts, and subscription based software applications.

 

FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
FREE CASH FLOW RECONCILIATION
(UNAUDITED)

Three Months Ended December 31,

Twelve Months Ended December 31,

(in thousands)

2023

2022

2023

2022

Net cash provided by (used in) operating activities

$            18,655

$            (6,700)

$              1,075

$          (24,856)

Purchases of property and equipment

(1,801)

(1,393)

(6,817)

(6,371)

Cash paid for technology development, patents and licenses

(2,106)

(1,413)

(7,177)

(10,567)

Free Cash Flow

14,748

(9,506)

(12,919)

(41,794)

Restructuring and other cash payments (1)

2,665

454

14,380

6,364

Adjusted Free Cash Flow

$            17,413

$            (9,052)

$              1,461

$          (35,430)

(1)

On February 7, 2023, our Board of Directors approved an integration plan (the “Integration Plan”), which is intended to streamline and simplify operations, particularly around our recent acquisitions and the resulting redundant operations and offerings. The Restructuring and other cash payments primarily consist of severance and related benefits.

 

FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
RECONCILIATION OF OUTLOOK – GAAP TO NON-GAAP

Fiscal quarter ending March 31, 2024

Low

High

GAAP gross margin

49.0 %

50.5 %

Stock-based compensation

0.5 %

0.5 %

Non-GAAP gross margin

49.5 %

51.0 %

 

Fiscal quarter ending March 31, 2024

(in thousands)

Low

High

GAAP operating expenses

$47,500

$49,500

Stock-based compensation

(3,300)

(3,300)

Purchase accounting intangible amortization

(1,200)

(1,200)

Restructuring and other costs

(2,000)

(2,000)

Non-GAAP operating expenses

$41,000

$43,000

 

Fiscal quarter ending March 31, 2024

Low

High

GAAP diluted loss per share range

$(0.66)

$(0.46)

Stock-based compensation

0.19

0.19

Purchase accounting intangible amortization

0.06

0.06

Restructuring and other costs

0.11

0.11

Non-GAAP tax adjustments

0.10

0.10

Non-GAAP diluted loss per share

$(0.20)

$0.00

 

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Technology

IQST – iQSTEL and Cycurion Form Exclusive Cybersecurity Partnership to Supercharge Expansion into High-Tech, High-Margin Markets

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45 mins ago

on

October 10, 2024

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NEW YORK, Oct. 10, 2024 /PRNewswire/ — iQSTEL Inc. (OTCQX: IQST), a dynamic leader in telecommunications, fintech, electric vehicle (EV), and AI-driven solutions, is thrilled to announce an exclusive partnership with Cycurion, INC. This strategic collaboration will allow iQSTEL to offer Cycurion’s top-tier cybersecurity products exclusively to the U.S. telecommunications industry, while also expanding into other sectors internationally. Leveraging iQSTEL’s global presence across 17 time zones, from California to Melbourne, and 7 offices worldwide, this partnership is set to unleash a new wave of high-margin, high-tech offerings for telecommunications clients in Europe, Latin America, the Middle East, and the United States, all while delivering cutting-edge cybersecurity solutions to an increasingly challenging market.

A Transformational Move for iQSTEL.

This partnership is a bold leap forward in iQSTEL’s ongoing journey to diversify and expand its portfolio. Over the past few years, iQSTEL has meticulously built a strong business platform, earning the trust of its global customer base. Now, with this deep foundation in place, iQSTEL is perfectly positioned to cross-sell high-margin, high-tech products such as Fintech, EV, and AI-based services. With this partnership, iQSTEL is adding cybersecurity to its offerings, further solidifying its presence in emerging markets.

Leandro Iglesias, CEO of iQSTEL, stated:

“This partnership with Cycurion couldn’t have come at a more pivotal time for iQSTEL. We’ve earned the trust of our clients by building a strong foundation, and now we’re amplifying that strength by offering the high-tech solutions they need, especially in cybersecurity. We’re delivering future-proof, high-margin services that not only meet the demands of today’s digital landscape but also cement our leadership in these rapidly growing sectors. Investors should take note: we’re just getting started.”

The partnership is laser-focused on addressing critical challenges faced by telecom operators, including meeting stringent security compliance requirements, navigating a global shortage of cybersecurity professionals, and mitigating the increasing number of data breaches. By combining iQSTEL’s operational excellence with Cycurion’s advanced cybersecurity expertise, the companies are poised to deliver unparalleled security solutions to telecom customers, turning these challenges into high-margin growth opportunities.

A Next-Generation Cybersecurity Strategy

Cycurion’s portfolio of cybersecurity services, powered by artificial intelligence (AI), includes 24/7 monitoring, advanced threat detection, incident response, vulnerability assessments, and compliance management. The AI-driven platform continuously adapts to emerging threats, enhancing its ability to detect and respond to cyber risks in real time. Trusted by government agencies such as FEMA, TSA, and the US Courts, Cycurion’s proven track record of delivering world-class security services will empower iQSTEL to enhance its product lineup, further increasing customer loyalty and securing long-term revenue growth.

This partnership is expected to drive significant revenue growth for iQSTEL, tapping into the rapidly expanding global cybersecurity market, projected to reach $376 billion by 2029.

Kevin Kelly, CEO of Cycurion, commented:

“Our partnership with iQSTEL opens up tremendous opportunities. We’re bringing our cybersecurity expertise to iQSTEL’s already strong business platform, enabling them to offer next-level protection to telecom clients. This isn’t just about security—it’s about enhancing customer confidence, increasing profitability, and ultimately growing both companies’ market share in the cybersecurity space.”

Key Benefits for iQSTEL Customers and Investors:

24/7/365 Threat and Risk Management: Immediate, real-time protection from the most advanced cybersecurity threats.Revenue-Driving Public Confidence: Enhanced security measures lead to greater trust from customers, preventing breaches that could undermine public and stakeholder confidence.Privacy Protection & Compliance: Strengthening privacy safeguards while ensuring clients meet evolving regulatory standards.Volume Pricing & Financial Advantage: iQSTEL’s purchasing power ensures significantly lower cybersecurity costs for customers, while maintaining a competitive edge.Expanding into High-Growth Sectors: With Cycurion’s services, iQSTEL will continue expanding its reach into high-margin markets such as Fintech, EV, and AI, reinforcing its leadership position.

Empowering the Future with iQSTEL’s Strong Business Platform.

This partnership exemplifies iQSTEL’s long-term strategy: leveraging the strong foundation of its customer relationships to seamlessly introduce high-tech, high-margin products. The trust that iQSTEL’s customers place in its services positions the company to capitalize on massive opportunities in rapidly growing industries like cybersecurity, fintech, electric vehicles, and AI.

Investors are invited to join iQSTEL on this exciting journey. With a projected revenue of $290 million for FY-2024 and plans to continue delivering innovative solutions, iQSTEL’s growth trajectory is stronger than ever. This partnership with Cycurion sets the stage for significant revenue expansion and positions iQSTEL as a major player in the high-margin tech markets of the future.

About Cycurion Inc.

Cycurion, headquartered in McLean, Virginia, is a premier cybersecurity provider specializing in multi-layered defense systems, monitoring, incident response, and compliance management. With a strong leadership team and a growing portfolio of services, Cycurion is dedicated to protecting its clients’ most valuable digital assets across both the public and private sectors.

Cycurion’s leadership team brings a wealth of experience from various sectors, including technology, finance, and cybersecurity:

Emmit McHenry, Chairman: Founder of NetCom Solutions International, which grew to nearly $300 million in revenue within six years, with operations in the U.S., UK, and South Africa. He also founded Network Solutions, which was later sold to SAIC. McHenry is a U.S. Marine Corps service-disabled veteran and has held executive positions at major firms like Allstate Insurance.Kevin Kelly, CEO: Former CEO of Halo Privacy, a cybersecurity company, and Heidrick & Struggles, a leading executive search firm. He also served as CEO and President of North America for APP – Asia Pulp and Paper. Kelly holds an MBA from Duke University’s Fuqua School of Business.Alvin McCoy, CFO: Former Managing Partner of Quantum Capital Partners and President & CEO of The McCoy Group, LLC. McCoy managed over $75 billion in new debt origination at Merrill Lynch and has served on the boards of financial institutions with assets up to $5 billion. He holds an MBA in Finance from Duke University.

Key Facts About Cycurion:

Headquarters: McLean, VirginiaR&D Center: Tel Aviv, IsraelStaff: 80 highly skilled employees, with an impressive list of industry certificationsDoD Cleared Facilities30% of employees hold Top Secret security clearances45 large active contracts2023 Year-End Revenue: $19.6 million

Cycurion Security Platform: Powered by artificial intelligence (AI), Cycurion has developed an enhanced, multi-layered SaaS solution designed to protect clients’ digital assets while minimizing false positives. This AI-driven platform continuously improves its threat detection and incident response capabilities, delivering effective defense in an increasingly complex and evolving cyber landscape.

About iQSTEL (Updated Oct. 2024):

iQSTEL Inc. (OTC-QX: IQST) (www.iQSTEL.com) is a US-based multinational publicly listed company in the final stages of the path to becoming listed on NASDAQ. With FY2023 revenues of $144 million and a forecasted $290 million in revenue, alongside positive operating income of seven digits for FY-2024, iQSTEL is positioning itself for explosive growth. iQSTEL’s mission is to serve basic human needs in today’s modern world by making essential tools accessible, regardless of race, ethnicity, religion, socioeconomic status, or identity. The company recognizes that modern human needs such as physiological, safety, relationship, esteem, and self-actualization are marginalized without access to ubiquitous communications, financial freedom, clean, affordable mobility, and information.

iQSTEL has been building a strong business platform with its customers, and by leveraging this trust, the company is now beginning to sell high-tech, high-margin products across its divisions. iQSTEL is strategically positioned to achieve $1 billion in revenue by 2027 through organic growth, acquisitions, and high-margin product expansion.

Telecommunications Services Division (Communications):
Includes VoIP, SMS, International Fiber-Optic, Proprietary Internet of Things (IoT), and a Proprietary Mobile Portability Blockchain Platform.Fintech Division (Financial Freedom):
Provides remittance services, top-up services, a MasterCard Debit Card, US bank accounts (no SSN required), and a Mobile App.Electric Vehicles (EV) Division (Mobility):
Offers Electric Motorcycles and plans to launch a Mid-Speed Car.Artificial Intelligence (AI) Services Division (Information and Content):
Features an enriched, immersive white-label proprietary AI-Enhanced Metaverse platform that provides access to products, services, entertainment, information, and customer support in a virtual 3D interface.Cybersecurity Services:
Through a new partnership with Cycurion, iQSTEL will offer advanced cybersecurity solutions, including 24/7 monitoring, threat detection, incident response, vulnerability assessments, and compliance management, providing essential protection to telecommunications clients and beyond.

iQSTEL has completed 11 acquisitions since June 2018 and continues to develop an active pipeline of potential future acquisitions, further expanding its suite of products and services both organically and through mergers and acquisitions.

Safe Harbor Statement: Statements in this news release may be “forward-looking statements”. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions, or any other information relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates, and projections about our business based partly on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual outcomes and results may and are likely to differ materially from what is expressed or forecasted in forward-looking statements due to numerous factors. Any forward-looking statements speak only as of the date of this news release, and iQSTEL Inc. undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this news release. This press release does not constitute a public offer of any securities for sale. Any securities offered privately will not be or have not been registered under the Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Company Website
www.iqstel.com

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Technology

CULT Food Science Subsidiary Further Foods Welcomes New Head of Sales and Marketing

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45 mins ago

on

October 10, 2024

By

Kevin Ryan joins Noochies! team to drive growth and innovation

TORONTO, Oct. 10, 2024 /PRNewswire/ – CULT Food Science Corp. (“CULT” or the “Company”) (CSE: CULT) (OTC: CULTF) (FRA: LN00), a disruptive food technology platform pioneering the commercialization of lab grown meat and cellular agriculture to reshape the global food industry, is pleased to announce that Kevin Ryan will be joining its subsidiary, Further Foods Inc., as the Head of Sales and Marketing for its innovative pet food brand, Noochies!

Key Takeaways:

Kevin brings a wealth of pet food industry experience to Noochies! Head of Sales and Marketing roleNoochies! brand is poised for retail sales growth both in North America and internationally

In his new role, Kevin will lead the development and implementation of all sales and marketing strategies aimed at achieving revenue targets and expanding distribution. He will guide the growth of the Noochies! brand into new markets and channels, while building and maintaining strong relationships with key clients, distributors and retail partners. Additionally, he’ll spearhead all consumer and digital marketing initiatives, overseeing the development and execution of the brand’s positioning, messaging and campaigns. Working closely with the Company’s CEO, Kevin will also focus on driving growth through direct-to-consumer platforms, including the company’s own website and 3rd party marketplaces like Amazon and Chewy.

No stranger to the pet industry, Kevin previously served as the International Sales Manager for Midwestern Pet Foods, Inc. While there, he managed the brand’s presence, sales channel and profitability outside of the United States through proactive and assertive marketing initiatives. Prior to that, he served as the Global Marketing Director for TOP 1 Oil Products Co. USA, where he expanded the brand’s global presence, sales channels and profitability across 40 international accounts, while also setting five Guinness World Records.

Management Commentary

“We are thrilled to welcome Kevin to the Noochies! team,” commented Mitchell Scott, CEO of CULT Food Science. “His expertise and ability to identify market opportunities, combined with his strategic approach to both sales and marketing, will be instrumental in driving our growth and establishing Noochies! as a top brand in the global specialty pet market.”

About CULT Food Science

CULT Food Science is a disruptive food technology platform pioneering the commercialization of lab grown meat and cellular agriculture to reshape the global food industry. CULT’s robust portfolio of investments in cutting-edge, venture-backed cellular agriculture and lab-grown meat companies provides widespread investor access to the future of food. Backed by a team of experts with extensive experience in food technology and launching consumer food products, CULT is committed to being at the forefront of the food revolution.

About Further Foods

Further Foods is revolutionizing pet nutrition through its innovative brand, Noochies! Noochies! leverages advanced cellular agriculture technologies to create pet food products with superior nutrition profiles and ethical standards. Noochies! recently introduced the world’s first freeze-dried, high-protein, nutrient-rich pet treats made without factory farming. Noochies! products are currently available for sale in the United States and Canada at select retailers and online at https://www.noochies.co/.

Additional information can be found by viewing the Company’s website at cultfoodscience.com or its regulatory filings on sedar.com.

On behalf of the Board of Directors of the Company,

CULT FOOD SCIENCE CORP.

“Mitchell Scott”
Mitchell Scott, Chief Executive Officer

Forward-Looking Information:

Information set forth in this news release may involve forward-looking statements. Forward-looking statements are statements that relate to future, not past, events. In this context, forward-looking statements often address a company’s expected future business and financial performance, and often contain words such as “anticipate”, “believe”, “plan”, “estimate”, “expect”, and “intend”, statements that an action or event “may”, “might”, “could”, “should”, or “will” be taken or occur, or other similar expressions. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include but are not limited to the following risks: those associated with marketing and sale of securities; the need for additional financing; reliance on key personnel; the potential for conflicts of interest among certain officers or directors with certain other projects; and the volatility of common share price and volume. Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date that statements are made and except as required by law, the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Investors are cautioned against attributing undue certainty to forward-looking statements. For further information on risk, investors are advised to see the Company’s MD&A and other disclosure filings with the regulators which are found at sedar.com.

 

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Technology

Clario and PathAI Collaborate to Deliver Integrated Solution for GI Clinical Trials

Published

45 mins ago

on

October 10, 2024

By

Partnership combines revolutionary digital pathology and endoscopy solutions, enhancing drug development for IBD and other GI disorders

Strategic Partnership: Streamlined, single-vendor solution improves diagnostic accuracy, boosts efficiency, and enables reliable turnaround times in gastrointestinal (GI) clinical trials.

Advanced GI Solutions: Enhances trial efficiency with AI-powered solutions, including reading for ulcerative colitis (UC) from Clario and histopathology services from PathAI.

Integrated Workflow: Combines endoscopic and histopathology endpoints with simplified processes for CROs, sponsors, and investigational sites.

PHILADELPHIA, Oct. 10, 2024 /PRNewswire/ — Clario, a leading provider of endpoint data solutions to the clinical trials industry, is excited to announce a strategic partnership with PathAI, a leader in AI-powered digital pathology solutions aimed at improving diagnostic accuracy and efficiency. This collaboration offers a single-vendor solution for efficient anatomical pathology services and next-generation video endoscopy analysis.

This co-delivery model streamlines endoscopic and histopathology endpoints to improve efficiency in global GI studies. CROs and sponsors will benefit from an end-to-end process that covers training, logistics, tissue processing, slide digitization, image analysis, and data transfers all with the medical and scientific oversight of our experts. Sites will experience simplified workflows with improved training, reporting, and document management.

“At Clario we have long been at the forefront of supporting GI clinical trials, and we are excited to augment our strengths with PathAI’s capabilities in the area of discovery and patient care,” said Marcela Vieira, M.D., Clario’s Medical Director of Gastroenterology. “The combination of endoscopy and histopathology promises to unlock new avenues for clinical research, and we are proud to be in this leadership position with our partners at PathAI.”

Clario has extensive experience in GI trials, having supported over 130 studies through advanced imaging solutions like endoscopy, MRI, and ultrasound. Their scientists and technologies help reduce site burden and enhance trial efficiency with AI-supported reading for UC and HD-video endoscopy support.

PathAI bolsters the partnership with its expert GI pathologist network and cutting-edge anatomical pathology services while optimizing specimen handling and histological assessments. Their AI-powered tools enhance UC assessment, minimize variability in histological scoring, and expedite biomarker discovery.

“We’re thrilled to partner with Clario to provide a cutting-edge solution for IBD clinical trials,” said Matt Grow, Chief Business Officer & President of Biopharma at PathAI. “Our collaboration will offer an integrated approach in histology and endoscopy for assessing therapeutic efficacy, accelerating biomarker discovery and therapy development in IBD.”

About Clario

Clario is a leading provider of endpoint data solutions to the clinical trials industry, generating high-quality clinical evidence for our pharmaceutical, biotech, and medical device partners. We offer comprehensive evidence generation solutions that combine eCOA, cardiac solutions, medical imaging, precision motion, and respiratory endpoints.

For more than 50 years, Clario has delivered deep scientific expertise and broad endpoint technologies to help transform lives around the world. Our endpoint data solutions have supported over 26,000 clinical trials in more than 100 countries. Our global team of science, technology, and operational experts have supported over 60% of all FDA drug approvals since 2012.

For more information, visit Clario.com or follow on LinkedIn.

About PathAI

Headquartered in Boston, PathAI is the only AI-focused technology company providing comprehensive precision pathology solutions, from wet lab services to algorithm deployment for clinical trials and laboratory use. Rigorously trained and validated with over 15 million annotations, its AI-powered models optimize pathology sample analysis, improving efficiency and accuracy in interpretation while gauging therapeutic efficacy and accelerating drug development for complex diseases.

For more information, visit pathai.com 

Media Contact:
media@clario.com

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