Faro Technologies, Inc. (FARO) Preliminary Q1 Revenue Misses

FARO Technologies, Inc. (NASDAQ: FARO) today announced preliminary, unaudited sales for its first quarter of 2015. The Company expects to report quarterly sales of approximately $70 million for the first quarter ended March 28, 2015, a decrease of approximately 5% from the same quarter last fiscal year.

(Street sees Q1 revenue of $85.43 million)

This decrease is principally due to the following negative effects, which were partially offset by strong units sold growth in the Europe/Africa region of Laser Tracker and Laser Scanner:

• negative foreign exchange impact of approximately $7 million driven primarily by the decline in the Euro and Yen relative to the U.S. dollar;
• weaker macro-economic conditions in Japan combined with the limited release of manufacturing stimulus funds which, in turn, decreased industrial demand in Japan for capital purchases; and
• weaker industrial demand in Brazil due to recent macro-economic events.

In addition to the negative impact on sales, changes in foreign exchange rates are expected to generate net foreign currency losses of approximately $1.3 million related to the Company's intercompany account balances denominated in different currencies, primarily the Swiss Franc.

Excluding the $7 million negative foreign exchange impact, preliminary sales for the first quarter of 2015 are expected to increase by approximately 5% as compared to the first quarter of 2014.

"Foreign exchange rates and macro-economic industrial weakness especially in Japan and Brazil created strong headwinds for our top line growth in the first quarter of 2015," stated Jay Freeland, FARO's President and CEO. "Our expected sales growth of approximately 5%, excluding the $7 million of negative foreign exchange impacts, is below our long term mid-teens sales growth goal primarily due to lower metrology unit sales. On a positive note, we are very pleased that the FARO Focus3D laser scanner is expected to report greater than 20% year-over-year unit sales growth, and that our new hand-held Freestyle3D laser scanner has received a strong market reception. Looking forward, in response to our lower than expected first quarter sales and income, we are proactively implementing efficiencies and cost reduction measures without impairing our ability to grow."

These preliminary, unaudited results are based on the Company's current estimate of results from operations for the first quarter ended March 28, 2015 and remain subject to change based on the Company's ongoing review of results and customary quarterly closing and review procedures. The Company will not be hosting a conference call in conjunction with this press release.

The full release of the Company's first quarter 2015 results will occur after the market closes on April 28th. A discussion of the first quarter results will be held during the Company's quarterly earnings call on April 29th at 8:30 a.m. Eastern Tim

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