FORM 10-K
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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Florida
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59-3157093
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(State or Other Jurisdiction
of Incorporation or Organization)
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(I.R.S. Employer
Identification Number)
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250 Technology Park, Lake Mary, FL
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32746
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $.001
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NASDAQ Global Select Market
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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•
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economic downturn in the manufacturing industry or the domestic and international economies in the regions of the world where we operate;
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our inability to further penetrate our customer base and target markets;
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our ability to fully implement the initiatives we have been undertaking to reorganize our business around certain vertical markets, modernize our sales processes to improve the efficiency of our sales organization, accelerate and maintain a consistent schedule of new product introductions, and harmonize our global functions to improve operational effectiveness;
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development by others of new or improved products, processes or technologies that make our products less competitive or obsolete;
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our inability to maintain our technological advantage by developing new products and releasing them as planned, as well as enhancing our existing products;
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risks associated with expanding international operations, such as fluctuations in currency exchange rates, difficulties in staffing and managing foreign operations, political and economic instability, compliance with import and export regulations, and the burdens and potential exposure of complying with a wide variety of U.S. and foreign laws and labor practices;
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our inability to successfully identify and acquire target companies and achieve expected benefits from, and effectively integrate, acquisitions that are consummated;
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the cyclical nature of the industries of our customers and material adverse changes in our customers’ access to liquidity and capital;
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change in the potential for the computer-aided measurement (“CAM2”) market and the potential adoption rate for our products, which are difficult to quantify and predict;
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our inability to protect our patents and other proprietary rights in the United States and foreign countries;
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our inability to adequately establish and maintain effective internal controls over financial reporting resulting in material weaknesses or significant deficiencies, and our inability to remediate any such issues completely or promptly;
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fluctuations in our annual and quarterly operating results and the inability to achieve our financial operating targets as a result of a number of factors including, without limitation, (i) litigation and regulatory action brought against us, (ii) quality issues with our products, (iii) excess or obsolete inventory, shrinkage or other inventory losses due to product obsolescence, change in demand for our products, scrap or material price changes, (iv) raw material price fluctuations and other inflationary pressures, (v) expansion of our manufacturing capability, (vi) the size and timing of customer orders, (vii) the amount of time that it takes to fulfill orders and ship our products, (viii) the length of our sales cycle to new customers and the time and expense incurred in further penetrating our existing customer base, (ix) increases in operating expenses required for product development and new product marketing, (x) costs associated with new product introductions, such as product development, marketing, assembly line start-up costs and low introductory period production volumes, (xi) the timing and market acceptance of new products and product enhancements, (xii)
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changes in gross margin due to changing mix of products sold and the different gross margins on different products and sales channels;
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our inability to successfully maintain the requirements of Restriction of use of Hazardous Substances (“RoHS2”) and Waste Electrical and Electronic Equipment (“WEEE”) compliance in our products;
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the inability of our products to displace traditional measurement devices and attain broad market acceptance;
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the impact of competitive products and pricing on our current offerings;
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the loss of our Chief Executive Officer or other key personnel;
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difficulties in recruiting research and development engineers and application engineers;
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the failure to effectively manage the effects of our growth;
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the impact of reductions or projected reductions in government spending, particularly in the defense sector;
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variations in our effective income tax rate and the difficulty in predicting the tax rate on a quarterly and annual basis;
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the loss of key suppliers and the inability to find sufficient alternative suppliers in a reasonable period of time or on commercially reasonable terms;
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our ability to maintain profitability;
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the effect of estimates and assumptions with respect to critical accounting policies and the impact of the adoption of recently issued accounting pronouncements;
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the magnitude of increased warranty costs from new product introductions and enhancements to existing products;
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the sufficiency of our plants to meet manufacturing requirements;
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the continuation of our share repurchase program;
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the sufficiency of our working capital and cash flow from operations to fund our long-term liquidity requirements;
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the impact of geographic changes in the manufacturing or sales of our products on our tax rate; and
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our ability to comply with the requirements for favorable tax rates in foreign jurisdictions.
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Product Design
– provides advanced 3D solutions to assist in the engineering or design of a movable object, enabling a fully digital workflow. Applications include reverse engineering and virtual simulation.
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Public Safety
Forensics
– provides solutions to public safety officials and professionals to capture environmental or situational scenes in 2D and 3D for crime, crash and fire scene investigations and environmental safety evaluations.
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3D Solutions
– provides solutions to customers who require customized 3D measurement and realization solutions not otherwise addressed by our off-the-shelf product offerings.
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Articulated Arm
– The articulated arm is comprised of three major joints, each of which may consist of one, two or three axes of motion. The articulated arm is available in a variety of sizes, configurations and precision levels suitable for a broad range of applications. To take a measurement, the operator simply touches the object to be measured with a probe at the end of the arm and presses a button. Data can be captured at either individual points or a series of points. Optical encoders located at each of the joints of the arm measure the angles at those joints, and this rotational measurement data is transmitted to an on-board controller that converts the arm angles to precise locations in 3D space using “xyz” position coordinates and “ijk” orientation coordinates.
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Computer
– We pre-install our CAM2 software primarily on either a notebook or desktop style computer, depending on the customer’s need, and the measurement arm, computer and installed software are sold as a system. We purchase the computers sold with our products from various suppliers.
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Laser Tracker Vantage
– The FARO Laser Tracker Vantage utilizes an ultra-precise laser beam to measure objects of up to 79 meters. It enables manufacturing, engineering, and quality control professionals to measure and inspect large parts, machine tools and other large objects on-site and in-process.
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Laser Tracker ION
– The FARO Laser Tracker ION is an interferometer (IFM)-based measurement system that provides the high accuracy and range to complete measurement tasks, such as in-line measurements, high-speed dynamic measurements, or high-accuracy machine calibration.
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Computer
– The FARO Laser Tracker includes a notebook or desktop style computer, depending on the customer’s requirements, that includes the pre-installed CAM2 Software.
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CAM2 Measure 10
allows customers to complete measurement jobs quickly and gives customers the freedom to measure as required by the application. State-of-the-art functionalities improve every process where measuring is needed.
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CAM2 SmartInspect
is our CAM2 solution for measuring geometry and building dimensions. The software allows customers to quickly measure geometric features and report dimensions for control.
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BuildIT
is a CAD-to-part inspection software that enables quick and easy dimensional verification of manufactured parts and assemblies for tool building, assembly, alignment, process automation, reverse engineering and quality control. BuildIT’s advanced analysis and reporting capabilities combine measurement data from multiple sources to produce detailed graphical and textual reports that are used to quickly identify manufacturing and production trends. With both numerical and graphical feedback of real-time deviations, BuildIT allows users to position parts with micrometer accuracy for high-precision assembly and alignment applications.
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FARO SCENE
software combines ease-of-use, networking, and an enhanced 3D experience to deliver a complete scan processing solution. With SCENE, customers can display, analyze, administer and edit 3D measurements in point clouds.
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FARO Public Safety Forensics
software makes diagramming and pre-planning easier for law enforcement officers, firefighters and loss control engineers by allowing the users who need to draw site plans or crash or crime scene diagrams to be able to do so in a fast and efficient manner. FARO’s Public Safety Forensics software includes the following offerings:
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FARO Reality provides 3D diagramming and advanced animation of crash and crime scene investigations. Reality has an intuitive user-friendly interface, realistic environmental details, and animated vehicle crash effects that make it fast and easy to create professional animations for courtroom presentations.
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The FARO CAD Zone suite of software products are designed for public safety professionals to create clear and accurate diagrams and animations. The FARO CAD Zone suite of software products includes Crash Zone, Crime Zone, Fire Zone 3D and Insurance Zone.
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PointSense
software products enable and simplify the use of real world objects in CAD applications. Primarily serving the surveying and architecture, engineering and construction spaces, the offering allows the user to integrate 3D laser scan data with CAD environments. The PointSense offerings includes PointSense for Revit
®
(a registered trademark of Autodesk), PointSense Building, PointSense Heritage, and PointSense Plant.
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the inability to assimilate effectively the operations, products, technologies and personnel of the acquired companies (some of which may be located in diverse geographic regions);
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the inability to maintain uniform standards, controls, procedures and policies;
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the need or obligation to divest portions of the acquired companies; and
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the potential impairment of relationships with customers.
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adverse changes in the manufacturing industry and general economic conditions;
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the effectiveness of sales promotions;
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geographic expansion in our regions;
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training and ramp-up time for new sales people;
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investments in strategic sales, product or other initiatives;
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investments in technologies and new products and product enhancements, including costs associated with new development and product introductions, and the timing and market acceptance of new products and product enhancements;
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excess or obsolete inventory, shrinkage or other inventory losses due to product obsolescence, change in demand for our products, scrap or material price changes;
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expansion of our manufacturing capability;
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the size and timing of customer orders, many of which are received towards the end of a quarter;
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the amount of time that it takes to fulfill orders and ship our products;
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the length of our sales cycle to new customers;
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customer order deferrals in anticipation of new products and product enhancements;
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start-up costs and ramp-up time associated with opening new sales offices outside of the United States;
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variations in the effective income tax rate and difficulty in predicting the tax rate on a quarterly and annual basis; and
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litigation and regulatory action brought against us.
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difficulties in staffing and managing foreign operations;
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political and economic instability;
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unexpected changes in regulatory requirements and laws;
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longer customer payment cycles and difficulty collecting accounts receivable;
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compliance with export and import regulations and trade restrictions;
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governmental restrictions on the transfer of funds to us from our operations outside the United States; and
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burdens of complying with a wide variety of foreign laws and labor practices.
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increased complexity;
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increased responsibility for existing and new management personnel; and
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incremental strain on our operations and financial and management systems.
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facilitate the purchase and distribution of thousands of inventory items;
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receive, process and ship orders on a timely basis;
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accurately bill and collect from customers;
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process payments to suppliers and employees; and
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summarize results and manage our business.
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fluctuations in demand for, and sales of, our products or prolonged downturns in the industries that we serve;
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actual or anticipated variations in quarterly or annual operating results;
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general economic uncertainties;
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speculation in the press or investment community; and
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announcements of technological innovations or new products by us or our competitors.
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a limitation on shareholders’ ability to call a special meeting of our shareholders;
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advance notice requirements to nominate directors for election to our board of directors or to propose matters that can be acted on by shareholders at shareholder meetings;
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our classified board of directors, which means that approximately one-third of our directors are elected each year; and
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the authority of the board of directors to issue, without shareholder approval, preferred stock with such terms as the board of directors may determine.
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2016
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2015
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High
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Low
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High
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Low
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First Quarter
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$
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35.70
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$
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20.72
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$
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63.21
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$
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51.79
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Second Quarter
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38.01
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27.87
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64.00
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38.75
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Third Quarter
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36.87
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30.20
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47.22
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32.95
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Fourth Quarter
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40.15
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29.00
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40.51
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24.25
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Company/Market/Peer Group
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2011
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2012
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2013
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2014
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2015
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2016
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FARO Technologies, Inc.
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$
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100.00
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$
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77.57
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$
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126.74
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$
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136.26
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$
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64.17
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$
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78.26
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NASDAQ Composite-Total Returns
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$
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100.00
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$
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117.45
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$
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164.57
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$
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188.84
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$
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201.98
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$
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219.89
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Morningstar Scientific & Technical Instruments
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$
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100.00
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$
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116.93
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$
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147.99
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$
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155.24
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$
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135.23
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$
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173.35
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Year ended December 31,
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in thousands, except share and per-share data
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2016
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2015
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2014
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2013
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2012
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Consolidated Statement of Operations Data:
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Sales
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$
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325,584
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$
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317,548
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$
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341,826
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$
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291,784
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$
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273,395
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Gross profit (1)
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177,960
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167,236
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188,510
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161,651
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149,445
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Income from operations
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13,284
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13,122
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37,340
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30,154
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31,554
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Income before income tax expense(benefit)
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12,626
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12,806
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37,522
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28,862
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30,942
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Net income
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11,107
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12,813
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33,649
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21,509
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22,998
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Net income per common share:
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Basic
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$
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0.67
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$
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0.74
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$
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1.95
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$
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1.26
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$
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1.36
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Diluted
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$
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0.67
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$
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0.74
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$
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1.93
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$
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1.25
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$
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1.34
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Weighted average shares outstanding:
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Basic
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16,654,786
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17,288,665
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17,247,727
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17,087,104
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16,910,830
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Diluted
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16,681,710
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17,389,473
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17,416,453
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17,241,115
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17,129,128
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As at December 31,
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2016
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2015
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2014
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2013
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2012
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Consolidated Balance Sheet Data:
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Working capital (2)
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$
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219,620
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$
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229,127
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$
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256,170
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$
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263,166
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$
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232,396
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Total assets
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423,714
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409,186
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425,463
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391,496
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350,807
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Total debt-capital leases
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21
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28
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8
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16
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64
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Total shareholders’ equity
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339,657
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327,644
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343,854
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315,950
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282,736
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(1)
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In 2016, certain prior year stock compensation expenses were reclassified between cost of sales, general and administrative, selling and marketing, and research and development expenses to reflect the appropriate departmental costs. As a result of this reclassification, gross profit for the years ended December 31, 2015, 2014, 2013 and 2012 was reduced by $0.4 million, $0.4 million, $0.2 million and $0.2 million, respectively.
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(2)
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In 2015 management reassessed certain inventory policies based on the then-current sales and customer trends. As a result, we now expect our sales demonstration inventory to be held by our sales representatives for more than one year. To reflect this change in policy, we reclassified $18.5 million as of December 31, 2015 and December 31, 2014 from current assets to long-term assets, impacting the working capital calculation. Working capital as of December 31, 2013 and December 31, 2012 has not been adjusted to reflect this change in policy as it is not practical to do so.
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◦
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Factory Metrology
– provides solutions for manual and automated measurement and inspection in an industrial or manufacturing environment. Applications include alignment, part inspection, dimensional analysis, first article inspection, incoming and in-process inspection, machine calibration, non-contact inspection, robot calibration, tool building and set up, and assembly guidance.
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◦
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Construction BIM-CIM
– provides solutions for as-built data capturing and 3D visualization in building information modeling or construction information management applications, allowing our customers in the architecture, engineering and construction markets to quickly and accurately extract desired 2D and 3D measurement points. Applications include as-build documentation, construction monitoring, surveying, asset and facility management, and heritage preservation.
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◦
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Other
– The Other segment includes our Product Design, Public Safety Forensics and 3D Solutions vertical organizations.
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▪
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Product Design
– provides advanced 3D solutions to assist in the engineering or design of a movable object, enabling a fully digital workflow. Applications include reverse engineering and virtual simulation.
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▪
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Public Safety
Forensics
– provides solutions to public safety officials and professionals to capture environmental or situational scenes in 2D and 3D for crime, crash and fire scene investigations and environmental safety evaluations.
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▪
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3D Solutions
– provides solutions to customers who require customized 3D measurement and realization solutions not otherwise addressed by our off-the-shelf product offerings.
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◦
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FARO Focus
S
Laser Scanner
– This new laser scanner includes an increased measurement range and an accessory bay for customer add-on devices, and features safeguards against intrusions such as dirt, dust and other outdoor elements.
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◦
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FARO Cobalt Array Imager
– The FARO Cobalt Array Imager is our next generation FARO Imager product offering, replacing the FARO 3D Imager AMP. The FARO Cobalt Array Imager is a metrology-grade non-contact scanner that utilizes blue light technology to capture millions of high resolution 3D coordinate measurements in seconds. FARO Cobalt’s versatility supports a variety of deployment options including rotary table, robot, industrial inspection cells and multiple imager arrays. This technology is used in quality control to improve product quality and reduce scrap, as well as for reverse engineering and rapid manufacturing.
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◦
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FARO Vantage
E
– This addition to the Vantage Laser Tracker product line includes well-proven features and capabilities such as high-speed dynamic measurement, with an affordable price for customers who demand high performance while working with short-to-medium range applications.
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◦
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BuildIT Software & Solutions Ltd. (“BuildIT”) – Located in Montreal, Canada, BuildIT specializes in process-configurable 3D metrology software solutions with hardware agnostic interfaces. The acquisition
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◦
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Laser Projection Technologies, Inc. (“LPT”) – Located in Londonderry, New Hampshire, LPT specializes in laser projection and measurement systems used throughout manufacturing environments around the globe to maximize productivity and efficiency. The acquisition enhances our portfolio of 3D measurement solutions and supports our long-term strategy to expand our presence in key markets.
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◦
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MWF-Technology GmbH (“MWF”) – Located near Frankfurt, Germany, MWF is an innovator in mobile augmented reality solutions, with breakthrough technology that enables large, complex 3D CAD data to be transferred to a tablet device and then used for mobile visualization and comparison to real world conditions. This enables real time, actionable manufacturing insight for in-process inspection, assembly, guidance and positioning.
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Years ended December 31,
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2016
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2015
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Change
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(dollars in millions)
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% of Sales
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% of Sales
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2016 vs 2015
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||||||||
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||||||||
Sales
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$
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325.6
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100.0
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%
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$
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317.5
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100.0
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%
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$
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8.1
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Cost of sales
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147.6
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45.3
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%
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150.3
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47.3
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%
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(2.7
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)
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Gross profit
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178.0
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54.7
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%
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167.2
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52.7
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%
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10.8
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|||
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||||||||
Operating expenses
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|
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||||||||
Selling and marketing
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79.9
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24.5
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%
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79.8
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25.1
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%
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0.1
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|||
General and administrative
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40.8
|
|
12.5
|
%
|
|
36.4
|
|
11.5
|
%
|
|
4.4
|
|
|||
Depreciation and amortization
|
|
13.9
|
|
4.3
|
%
|
|
11.2
|
|
3.5
|
%
|
|
2.7
|
|
|||
Research and development
|
|
30.1
|
|
9.2
|
%
|
|
26.7
|
|
8.4
|
%
|
|
3.4
|
|
|||
Total operating expenses
|
|
164.7
|
|
50.6
|
%
|
|
154.1
|
|
48.5
|
%
|
|
10.6
|
|
|||
|
|
|
|
|
|
|
|
|
||||||||
Other expense (income)
|
|
0.7
|
|
0.2
|
%
|
|
0.3
|
|
0.1
|
%
|
|
0.4
|
|
|||
|
|
|
|
|
|
|
|
|
||||||||
Income tax expense (benefit)
|
|
1.5
|
|
0.5
|
%
|
|
—
|
|
—
|
%
|
|
1.5
|
|
|||
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
11.1
|
|
3.4
|
%
|
|
$
|
12.8
|
|
4.0
|
%
|
|
$
|
(1.7
|
)
|
Factory Metrology
|
|
|
|
||||
(dollars in millions)
|
|
December 31, 2016
|
December 31, 2015
|
||||
Net sales
|
|
$
|
236.3
|
|
$
|
222.7
|
|
Segment profit
|
|
$
|
69.8
|
|
$
|
63.5
|
|
Segment profit as a % of Sales
|
|
29.5
|
%
|
28.5
|
%
|
Construction BIM-CIM
|
|
|
|
||||
(dollars in millions)
|
|
December 31, 2016
|
December 31, 2015
|
||||
Net sales
|
|
$
|
65.1
|
|
$
|
70.8
|
|
Segment profit
|
|
$
|
18.3
|
|
$
|
16.3
|
|
Segment profit as a % of Sales
|
|
28.1
|
%
|
23.0
|
%
|
Other
|
|
|
|
||||
(dollars in millions)
|
|
December 31, 2016
|
December 31, 2015
|
||||
Net sales
|
|
$
|
24.2
|
|
$
|
24.0
|
|
Segment profit
|
|
$
|
10.0
|
|
$
|
7.6
|
|
Segment profit as a % of Sales
|
|
41.3
|
%
|
31.7
|
%
|
|
|
Years ended December 31,
|
|
|
||||||||||||
|
|
2015
|
|
2014
|
|
Change
|
||||||||||
(dollars in millions)
|
|
|
% of Sales
|
|
|
% of Sales
|
|
2015 vs 2014
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
|
$
|
317.5
|
|
100.0
|
%
|
|
$
|
341.8
|
|
100.0
|
%
|
|
$
|
(24.3
|
)
|
Cost of sales
|
|
150.3
|
|
47.3
|
%
|
|
153.3
|
|
44.9
|
%
|
|
(3.0
|
)
|
|||
Gross profit
|
|
167.2
|
|
52.7
|
%
|
|
188.5
|
|
55.1
|
%
|
|
(21.3
|
)
|
|||
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Selling and marketing
|
|
79.8
|
|
25.1
|
%
|
|
80.8
|
|
23.6
|
%
|
|
(1.0
|
)
|
|||
General and administrative
|
|
36.4
|
|
11.5
|
%
|
|
35.4
|
|
10.4
|
%
|
|
1.0
|
|
|||
Depreciation and amortization
|
|
11.2
|
|
3.5
|
%
|
|
7.4
|
|
2.2
|
%
|
|
3.8
|
|
|||
Research and development
|
|
26.7
|
|
8.4
|
%
|
|
27.6
|
|
8.1
|
%
|
|
(0.9
|
)
|
|||
Total operating expenses
|
|
154.1
|
|
48.5
|
%
|
|
151.2
|
|
44.2
|
%
|
|
2.9
|
|
|||
|
|
|
|
|
|
|
|
|
||||||||
Other expense (income)
|
|
0.3
|
|
0.1
|
%
|
|
(0.2
|
)
|
(0.1
|
)%
|
|
0.5
|
|
|||
|
|
|
|
|
|
|
|
|
||||||||
Income tax expense (benefit)
|
|
—
|
|
—
|
%
|
|
3.9
|
|
1.1
|
%
|
|
(3.9
|
)
|
|||
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
12.8
|
|
4.0
|
%
|
|
$
|
33.6
|
|
9.8
|
%
|
|
$
|
(20.8
|
)
|
Factory Metrology
|
|
|
|
||||
(dollars in millions)
|
|
December 31, 2015
|
December 31, 2014
|
||||
Net sales
|
|
$
|
222.7
|
|
$
|
246.2
|
|
Segment profit
|
|
$
|
63.5
|
|
$
|
76.1
|
|
Segment profit as a % of Sales
|
|
28.5
|
%
|
30.9
|
%
|
Construction BIM-CIM
|
|
|
|
||||
(dollars in millions)
|
|
December 31, 2015
|
December 31, 2014
|
||||
Net sales
|
|
$
|
70.8
|
|
$
|
75.4
|
|
Segment profit
|
|
$
|
16.3
|
|
$
|
24.5
|
|
Segment profit as a % of Sales
|
|
23.0
|
%
|
32.5
|
%
|
Other
|
|
|
|
||||
(dollars in millions)
|
|
December 31, 2015
|
December 31, 2014
|
||||
Net sales
|
|
$
|
24.0
|
|
$
|
20.2
|
|
Segment profit
|
|
$
|
7.6
|
|
$
|
7.1
|
|
Segment profit as a % of Sales
|
|
31.7
|
%
|
35.1
|
%
|
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
< 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
> 5 Years
|
||||||||||
Operating lease obligations
|
|
$
|
23,363
|
|
|
$
|
6,620
|
|
|
$
|
8,573
|
|
|
$
|
3,653
|
|
|
$
|
4,517
|
|
Capital lease obligations
|
|
21
|
|
|
8
|
|
|
13
|
|
|
|
|
|
|||||||
Purchase obligations
|
|
59,692
|
|
|
29,380
|
|
|
30,312
|
|
|
|
|
|
|||||||
Other obligations
|
|
2,100
|
|
|
|
|
2,100
|
|
|
|
|
|
||||||||
Total
|
|
$
|
85,176
|
|
|
$
|
36,008
|
|
|
$
|
40,998
|
|
|
$
|
3,653
|
|
|
$
|
4,517
|
|
(in thousands, except share data)
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
106,169
|
|
|
$
|
107,356
|
|
Short-term investments
|
|
42,942
|
|
|
42,994
|
|
||
Accounts receivable, net
|
|
61,364
|
|
|
69,918
|
|
||
Inventories, net
|
|
51,886
|
|
|
45,571
|
|
||
Deferred income tax assets, net
|
|
7,565
|
|
|
7,792
|
|
||
Prepaid expenses and other current assets
|
|
16,304
|
|
|
18,527
|
|
||
Total current assets
|
|
286,230
|
|
|
292,158
|
|
||
Property and equipment:
|
|
|
|
|
||||
Machinery and equipment
|
|
57,063
|
|
|
54,124
|
|
||
Furniture and fixtures
|
|
6,099
|
|
|
5,945
|
|
||
Leasehold improvements
|
|
18,778
|
|
|
18,471
|
|
||
Property and equipment at cost
|
|
81,940
|
|
|
78,540
|
|
||
Less: accumulated depreciation and amortization
|
|
(50,262
|
)
|
|
(42,594
|
)
|
||
Property and equipment, net
|
|
31,678
|
|
|
35,946
|
|
||
Goodwill
|
|
46,744
|
|
|
26,371
|
|
||
Intangible assets, net
|
|
22,279
|
|
|
15,985
|
|
||
Service and sales demonstration inventory, net
|
|
29,136
|
|
|
33,709
|
|
||
Deferred income tax assets, net
|
|
6,742
|
|
|
4,050
|
|
||
Other long-term assets
|
|
905
|
|
|
967
|
|
||
Total assets
|
|
$
|
423,714
|
|
|
$
|
409,186
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
11,126
|
|
|
$
|
11,345
|
|
Accrued liabilities
|
|
24,572
|
|
|
22,574
|
|
||
Income taxes payable
|
|
618
|
|
|
—
|
|
||
Current portion of unearned service revenues
|
|
27,422
|
|
|
26,114
|
|
||
Customer deposits
|
|
2,872
|
|
|
2,998
|
|
||
Total current liabilities
|
|
66,610
|
|
|
63,031
|
|
||
Unearned service revenues - less current portion
|
|
13,813
|
|
|
15,025
|
|
||
Deferred income tax liabilities
|
|
1,409
|
|
|
686
|
|
||
Other long-term liabilities
|
|
2,225
|
|
|
2,800
|
|
||
Total liabilities
|
|
84,057
|
|
|
81,542
|
|
||
Commitments and contingencies - See Note 13
|
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
|
||||
Preferred stock - par value $0.01, 10,000,000 shares authorized; none issued
|
|
—
|
|
|
—
|
|
||
Common stock - par value $.001, 50,000,000 shares authorized; 18,170,267 and 18,077,594 issued; 16,680,791 and 16,588,118 outstanding, respectively
|
|
18
|
|
|
18
|
|
||
Additional paid-in capital
|
|
212,602
|
|
|
206,996
|
|
||
Retained earnings
|
|
183,436
|
|
|
172,329
|
|
||
Accumulated other comprehensive loss
|
|
(24,561
|
)
|
|
(19,861
|
)
|
||
Common stock in treasury, at cost - 1,489,476 shares
|
|
(31,838
|
)
|
|
(31,838
|
)
|
||
Total shareholders’ equity
|
|
339,657
|
|
|
327,644
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
423,714
|
|
|
$
|
409,186
|
|
|
|
Years ended December 31,
|
|||||||||||
(in thousands, except share and per share data)
|
|
2016
|
|
2015
|
|
2014
|
|||||||
SALES
|
|
|
|
|
|
|
|||||||
Product
|
|
$
|
256,010
|
|
|
$
|
259,842
|
|
|
$
|
284,147
|
|
|
Service
|
|
69,574
|
|
|
57,706
|
|
|
57,679
|
|
||||
Total sales
|
|
325,584
|
|
|
317,548
|
|
|
341,826
|
|
||||
COST OF SALES
|
|
|
|
|
|
|
|||||||
Product
|
|
107,965
|
|
|
114,257
|
|
|
115,266
|
|
||||
Service
|
|
39,659
|
|
|
36,055
|
|
|
38,050
|
|
||||
Total cost of sales (exclusive of depreciation and amortization, shown separately below)
|
|
147,624
|
|
|
150,312
|
|
|
153,316
|
|
||||
GROSS PROFIT
|
|
177,960
|
|
|
167,236
|
|
|
188,510
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|||||||
Selling and marketing
|
|
79,870
|
|
|
79,837
|
|
|
80,804
|
|
||||
General and administrative
|
|
40,813
|
|
|
36,370
|
|
|
35,331
|
|
||||
Depreciation and amortization
|
|
13,868
|
|
|
11,217
|
|
|
7,428
|
|
||||
Research and development
|
|
30,125
|
|
|
26,690
|
|
|
27,607
|
|
||||
Total operating expenses
|
|
164,676
|
|
|
154,114
|
|
1
|
|
151,170
|
|
|||
INCOME FROM OPERATIONS
|
|
13,284
|
|
|
13,122
|
|
|
37,340
|
|
||||
OTHER EXPENSE (INCOME)
|
|
|
|
|
|
|
|||||||
Interest income
|
|
(212
|
)
|
|
(111
|
)
|
|
(96
|
)
|
||||
Other expense (income), net
|
|
822
|
|
|
371
|
|
|
(94
|
)
|
||||
Interest expense
|
|
48
|
|
|
56
|
|
|
8
|
|
||||
INCOME BEFORE INCOME TAX EXPENSE (BENEFIT)
|
|
12,626
|
|
|
12,806
|
|
|
37,522
|
|
||||
INCOME TAX EXPENSE (BENEFIT)
|
|
1,519
|
|
|
(7
|
)
|
|
3,873
|
|
||||
NET INCOME
|
|
$
|
11,107
|
|
|
$
|
12,813
|
|
|
$
|
33,649
|
|
|
NET INCOME PER SHARE - BASIC
|
|
$
|
0.67
|
|
|
$
|
0.74
|
|
|
$
|
1.95
|
|
|
NET INCOME PER SHARE - DILUTED
|
|
$
|
0.67
|
|
|
$
|
0.74
|
|
|
$
|
1.93
|
|
|
Weighted average shares - Basic
|
|
16,654,786
|
|
|
17,288,665
|
|
|
17,247,727
|
|
||||
Weighted average shares - Diluted
|
|
16,681,710
|
|
|
17,389,473
|
|
|
17,416,453
|
|
|
|
Years ended December 31,
|
||||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
|
$
|
11,107
|
|
|
$
|
12,813
|
|
|
$
|
33,649
|
|
Currency translation adjustments, net of tax
|
|
(4,700
|
)
|
|
(13,166
|
)
|
|
(13,961
|
)
|
|||
Comprehensive income (loss)
|
|
$
|
6,407
|
|
|
$
|
(353
|
)
|
|
$
|
19,688
|
|
|
|
|
|
|
|
Accumulated
Other Comprehensive Income (Loss) |
|
Common
Stock in Treasury |
|
Total
|
|||||||||||||||||
|
|
|
|
Additional
Paid-in Capital |
|
Retained Earnings
|
|
||||||||||||||||||||
|
|
Common Stock
|
|
|
|
||||||||||||||||||||||
(in thousands except share data)
|
|
Shares
|
|
Amounts
|
|
|
|
||||||||||||||||||||
BALANCE JANUARY 1, 2014
|
|
17,188,137
|
|
|
$
|
18
|
|
|
$
|
191,874
|
|
|
$
|
125,867
|
|
|
$
|
7,266
|
|
|
$
|
(9,075
|
)
|
|
$
|
315,950
|
|
Net income
|
|
|
|
|
|
|
|
33,649
|
|
|
|
|
|
|
33,649
|
|
|||||||||||
Currency translation adjustment, net of tax
|
|
|
|
|
|
|
|
|
|
(13,961
|
)
|
|
|
|
(13,961
|
)
|
|||||||||||
Restricted stock issued and stock based compensation under incentive plans
|
|
24,588
|
|
|
|
|
4,678
|
|
|
|
|
|
|
|
|
4,678
|
|
||||||||||
Stock options exercised
|
|
104,705
|
|
|
|
|
3,369
|
|
|
|
|
|
|
|
|
3,369
|
|
||||||||||
Tax impact from restricted stock and stock options
|
|
|
|
|
|
169
|
|
|
|
|
|
|
|
|
169
|
|
|||||||||||
BALANCE DECEMBER 31, 2014
|
|
17,317,430
|
|
|
$
|
18
|
|
|
$
|
200,090
|
|
|
$
|
159,516
|
|
|
$
|
(6,695
|
)
|
|
$
|
(9,075
|
)
|
|
$
|
343,854
|
|
Net income
|
|
|
|
|
|
|
|
12,813
|
|
|
|
|
|
|
12,813
|
|
|||||||||||
Currency translation adjustment, net of tax
|
|
|
|
|
|
|
|
|
|
(13,166
|
)
|
|
|
|
(13,166
|
)
|
|||||||||||
Restricted stock issued and stock based compensation under incentive plans
|
|
13,143
|
|
|
|
|
4,306
|
|
|
|
|
|
|
|
|
4,306
|
|
||||||||||
Stock options exercised
|
|
66,786
|
|
|
|
|
2,287
|
|
|
|
|
|
|
|
|
2,287
|
|
||||||||||
Tax impact from restricted stock and stock options
|
|
|
|
|
|
313
|
|
|
|
|
|
|
|
|
313
|
|
|||||||||||
Repurchase of common stock
|
|
(809,241
|
)
|
|
|
|
|
|
|
|
|
|
(22,763
|
)
|
|
(22,763
|
)
|
||||||||||
BALANCE DECEMBER 31, 2015
|
|
16,588,118
|
|
|
$
|
18
|
|
|
$
|
206,996
|
|
|
$
|
172,329
|
|
|
$
|
(19,861
|
)
|
|
$
|
(31,838
|
)
|
|
$
|
327,644
|
|
Net income
|
|
|
|
|
|
|
|
11,107
|
|
|
|
|
|
|
11,107
|
|
|||||||||||
Currency translation adjustment, net of tax
|
|
|
|
|
|
|
|
|
|
(4,700
|
)
|
|
|
|
(4,700
|
)
|
|||||||||||
Restricted stock issued and stock based compensation under incentive plans
|
|
20,925
|
|
|
|
|
5,374
|
|
|
|
|
|
|
|
|
5,374
|
|
||||||||||
Stock options exercised
|
|
71,748
|
|
|
|
|
674
|
|
|
|
|
|
|
|
|
674
|
|
||||||||||
Tax impact from restricted stock and stock options
|
|
|
|
|
|
(442
|
)
|
|
|
|
|
|
|
|
(442
|
)
|
|||||||||||
BALANCE DECEMBER 31, 2016
|
|
16,680,791
|
|
|
$
|
18
|
|
|
$
|
212,602
|
|
|
$
|
183,436
|
|
|
$
|
(24,561
|
)
|
|
$
|
(31,838
|
)
|
|
$
|
339,657
|
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
CASH FLOWS FROM:
|
|
|
|
|
|
|
||||||
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
11,107
|
|
|
$
|
12,813
|
|
|
$
|
33,649
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
13,868
|
|
|
11,217
|
|
|
7,428
|
|
|||
Compensation for stock options and restricted stock units
|
|
5,374
|
|
|
4,306
|
|
|
4,678
|
|
|||
Provision for bad debts (net recovery of)
|
|
898
|
|
|
346
|
|
|
(306
|
)
|
|||
Loss on disposal of assets
|
|
860
|
|
|
947
|
|
|
—
|
|
|||
Write-down of inventories
|
|
4,134
|
|
|
10,878
|
|
|
3,272
|
|
|||
Deferred income tax benefit
|
|
(2,002
|
)
|
|
(655
|
)
|
|
(4,707
|
)
|
|||
Income tax benefit from exercise of stock options
|
|
(357
|
)
|
|
(313
|
)
|
|
(169
|
)
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Decrease (increase) in:
|
|
|
|
|
|
|
||||||
Accounts receivable, net
|
|
6,727
|
|
|
9,584
|
|
|
(24,587
|
)
|
|||
Inventories, net
|
|
(6,729
|
)
|
|
(18,021
|
)
|
|
(21,995
|
)
|
|||
Prepaid expenses and other assets
|
|
3,588
|
|
|
(2,834
|
)
|
|
(3,501
|
)
|
|||
(Decrease) increase in:
|
|
|
|
|
|
|
||||||
Accounts payable and accrued liabilities
|
|
534
|
|
|
(6,401
|
)
|
|
8,867
|
|
|||
Income taxes payable
|
|
618
|
|
|
—
|
|
|
(1,560
|
)
|
|||
Customer deposits
|
|
(1,310
|
)
|
|
1,114
|
|
|
(724
|
)
|
|||
Unearned service revenues
|
|
273
|
|
|
5,051
|
|
|
5,313
|
|
|||
Net cash provided by operating activities
|
|
37,583
|
|
|
28,032
|
|
|
5,658
|
|
|||
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
||||||
Proceeds from sale of investments
|
|
—
|
|
|
22,001
|
|
|
—
|
|
|||
Purchases of property and equipment
|
|
(7,720
|
)
|
|
(14,169
|
)
|
|
(18,722
|
)
|
|||
Payments for intangible assets
|
|
(1,657
|
)
|
|
(2,140
|
)
|
|
(1,221
|
)
|
|||
Acquisition of business, net of cash received
|
|
(27,708
|
)
|
|
(12,066
|
)
|
|
(1,150
|
)
|
|||
Net cash used in investing activities
|
|
(37,085
|
)
|
|
(6,374
|
)
|
|
(21,093
|
)
|
|||
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
||||||
Payments on capital leases
|
|
(8
|
)
|
|
(8
|
)
|
|
(8
|
)
|
|||
Payments of contingent consideration for acquisitions
|
|
(774
|
)
|
|
—
|
|
|
—
|
|
|||
Repurchase of common stock
|
|
—
|
|
|
(22,763
|
)
|
|
—
|
|
|||
Income tax benefit from exercise of stock options
|
|
357
|
|
|
313
|
|
|
169
|
|
|||
Proceeds from issuance of stock, net
|
|
674
|
|
|
2,287
|
|
|
3,369
|
|
|||
Net cash provided by (used in) financing activities
|
|
249
|
|
|
(20,171
|
)
|
|
3,530
|
|
|||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
|
(1,934
|
)
|
|
(3,420
|
)
|
|
(3,436
|
)
|
|||
DECREASE IN CASH AND CASH EQUIVALENTS
|
|
(1,187
|
)
|
|
(1,933
|
)
|
|
(15,341
|
)
|
|||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
|
107,356
|
|
|
109,289
|
|
|
124,630
|
|
|||
CASH AND CASH EQUIVALENTS, END OF YEAR
|
|
$
|
106,169
|
|
|
$
|
107,356
|
|
|
$
|
109,289
|
|
•
|
The Factory Metrology segment provides solutions for manual and automated measurement and inspection in an industrial or manufacturing environment. Applications include alignment, part inspection, dimensional analysis, first article inspection, incoming and in-process inspection, machine calibration, non-contact inspection, robot calibration, tool building and set-up, and assembly guidance.
|
•
|
The Construction BIM-CIM segment provides solutions for as-built data capturing and 3D visualization in building information modeling and construction information management applications, allowing our customers in our architecture, engineering and construction markets to quickly and accurately extract 2D and 3D measurement points. Applications include as-built documentation, construction monitoring, surveying, asset and facility management, and heritage preservation.
|
•
|
The Other segment includes our Product Design, Public Safety Forensics and 3D Solutions operating segments. Our Product Design organization provides advanced 3D solutions to assist in the engineering or design of a movable object, enabling a full digital workflow for applications that include reverse engineering and virtual simulation. Our Public Safety Forensics organization provides solutions to public safety officials and professionals to capture environmental or situational scenes in 2D and 3D for crime, crash and fire scene investigations and environmental safety evaluations. Our 3D Solutions organization provides customized 3D solutions to customers who require customized 3D measurement and realization solutions not otherwise addressed by our off-the-shelf product offerings.
|
|
|
Machinery, equipment and software
|
2 to 5 years
|
Furniture and fixtures
|
3 to 10 years
|
•
|
Certain prior year stock compensation expenses were reclassified between cost of sales, general and administrative, selling and marketing, and research and development expenses in the accompanying consolidated financial statements to reflect the appropriate departmental costs.
|
•
|
Goodwill balances and activity presented in Note 6 “Goodwill” as of and for the year ended December 31, 2015 were reclassified to conform to the current period presentation as a result of the realignment of our reporting units.
|
•
|
During the third quarter of 2016, we reclassified certain service costs that were previously classified as product costs. This reclassification did not have a material impact on either the current or prior years. As such, the prior year amounts have not been reclassified in our consolidated financial statements.
|
|
|
Years ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Supplemental cash flow information:
|
|
|
|
|
|
|
||||||
Cash paid for interest
|
|
$
|
28
|
|
|
$
|
55
|
|
|
$
|
7
|
|
Cash paid for income taxes
|
|
$
|
2,576
|
|
|
$
|
4,682
|
|
|
$
|
10,844
|
|
Supplemental noncash investing and financing activities:
|
|
|
|
|
|
|
||||||
Transfer of service and sales demonstration inventory to fixed assets
|
|
$
|
511
|
|
|
$
|
2,979
|
|
|
$
|
41
|
|
|
|
Years ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance, beginning of year
|
|
$
|
1,417
|
|
|
$
|
1,844
|
|
|
$
|
3,686
|
|
Provision (net of recovery)
|
|
898
|
|
|
346
|
|
|
(306
|
)
|
|||
Amounts written off, net of recoveries
|
|
(486
|
)
|
|
(773
|
)
|
|
(1,536
|
)
|
|||
Balance, end of year
|
|
$
|
1,829
|
|
|
$
|
1,417
|
|
|
$
|
1,844
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Raw materials
|
|
$
|
36,760
|
|
|
$
|
28,190
|
|
Finished goods
|
|
15,126
|
|
|
17,381
|
|
||
Inventories, net
|
|
$
|
51,886
|
|
|
$
|
45,571
|
|
Service and sales demonstration inventory, net
|
|
$
|
29,136
|
|
|
$
|
33,709
|
|
December 31, 2016
|
|
Beginning
Balance |
|
Additions
|
|
Foreign
Currency Translation |
|
Ending
Balance |
||||||||
Factory Metrology
|
|
$
|
21,360
|
|
|
$
|
16,709
|
|
|
$
|
(208
|
)
|
|
$
|
37,861
|
|
Construction BIM-CIM
|
|
3,429
|
|
|
2,682
|
|
|
(33
|
)
|
|
6,078
|
|
||||
Public Safety Forensics
|
|
$
|
1,582
|
|
|
$
|
1,238
|
|
|
$
|
(15
|
)
|
|
$
|
2,805
|
|
Total
|
|
$
|
26,371
|
|
|
$
|
20,629
|
|
|
$
|
(256
|
)
|
|
$
|
46,744
|
|
December 31, 2015
|
|
Beginning
Balance |
|
Additions
|
|
Foreign
Currency Translation |
|
Ending
Balance |
||||||||
Factory Metrology
|
|
$
|
15,556
|
|
|
$
|
7,103
|
|
|
$
|
(1,299
|
)
|
|
$
|
21,360
|
|
Construction BIM-CIM
|
|
2,497
|
|
|
1,140
|
|
|
(208
|
)
|
|
3,429
|
|
||||
Public Safety Forensics
|
|
$
|
1,152
|
|
|
$
|
526
|
|
|
$
|
(96
|
)
|
|
$
|
1,582
|
|
Total
|
|
$
|
19,205
|
|
|
$
|
8,769
|
|
|
$
|
(1,603
|
)
|
|
$
|
26,371
|
|
|
|
As of December 31, 2016
|
||||||||||
|
|
Carrying Value
|
|
Accumulated
Amortization |
|
Net Intangible
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
||||||
Product technology
|
|
$
|
15,700
|
|
|
$
|
7,614
|
|
|
$
|
8,086
|
|
Patents and trademarks
|
|
13,328
|
|
|
4,927
|
|
|
8,401
|
|
|||
Customer relationships
|
|
5,466
|
|
|
837
|
|
|
4,629
|
|
|||
Other
|
|
8,013
|
|
|
6,850
|
|
|
1,163
|
|
|||
Total
|
|
$
|
42,507
|
|
|
$
|
20,228
|
|
|
$
|
22,279
|
|
|
|
As of December 31, 2015
|
||||||||||
|
|
Carrying Value
|
|
Accumulated
Amortization |
|
Net Intangible
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
||||||
Product technology
|
|
$
|
10,494
|
|
|
$
|
7,204
|
|
|
$
|
3,290
|
|
Patents and trademarks
|
|
13,048
|
|
|
4,130
|
|
|
8,918
|
|
|||
Customer relationships
|
|
3,087
|
|
|
287
|
|
|
2,800
|
|
|||
Other
|
|
7,670
|
|
|
6,693
|
|
|
977
|
|
|||
Total
|
|
$
|
34,299
|
|
|
$
|
18,314
|
|
|
$
|
15,985
|
|
|
|
||
Years ending December 31,
|
Amount
|
||
2017
|
$
|
3,895
|
|
2018
|
3,733
|
|
|
2019
|
3,297
|
|
|
2020
|
3,175
|
|
|
2021
|
2,954
|
|
|
Thereafter
|
5,225
|
|
|
|
|
||
|
$
|
22,279
|
|
|
|
|
|
As of December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Accrued compensation and benefits
|
|
$
|
13,649
|
|
|
$
|
12,798
|
|
Accrued warranties
|
|
2,594
|
|
|
2,309
|
|
||
Professional and legal fees
|
|
1,775
|
|
|
2,014
|
|
||
Taxes other than income
|
|
4,026
|
|
|
2,605
|
|
||
Other accrued liabilities
|
|
2,528
|
|
|
2,848
|
|
||
|
|
$
|
24,572
|
|
|
$
|
22,574
|
|
|
|
Years ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance, beginning of year
|
|
$
|
2,309
|
|
|
$
|
2,719
|
|
|
$
|
2,364
|
|
Provision for warranty expense
|
|
3,544
|
|
|
3,597
|
|
|
3,848
|
|
|||
Fulfillment of warranty obligations
|
|
(3,259
|
)
|
|
(4,007
|
)
|
|
(3,493
|
)
|
|||
Balance, end of year
|
|
$
|
2,594
|
|
|
$
|
2,309
|
|
|
$
|
2,719
|
|
|
|
December 31, 2016
|
||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Short-term investments (1)
|
|
$
|
42,942
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
|
$
|
42,942
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
||||||
Contingent consideration (2)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,100
|
|
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,100
|
|
|
|
December 31, 2015
|
||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Short-term investments (1)
|
|
$
|
42,994
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
|
$
|
42,994
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
||||||
Contingent consideration (2)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,695
|
|
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,695
|
|
(1)
|
Short-term investments in the accompanying consolidated balance sheets are six-month U.S. Treasury Bills. The fair values of these assets are based on Level 1 inputs in the fair value hierarchy.
|
(2)
|
Contingent consideration liability represents arrangements to pay the former owners of certain companies we acquired. The undiscounted maximum payment under the arrangements was
$7.9 million
, based on future revenues, gross profits and certain milestones. We estimated the fair value of the contingent consideration using a Monte Carlo Simulation, which is based on significant inputs, primarily forecasted future results of the acquired businesses not observable in the market, and thus represents a Level 3 measure. For the year ended
December 31, 2016
, we paid
$0.8 million
as part of these arrangements. No payments under such arrangements were due during the year ended December 31, 2015. The remaining change in the fair value of the contingent consideration from December 31, 2015 to December 31, 2016 was related to changes in foreign currency exchange rates.
|
|
|
Years ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Foreign exchange transaction (gains) losses
|
|
$
|
1,356
|
|
|
$
|
377
|
|
|
$
|
(103
|
)
|
Other
|
|
(534
|
)
|
|
(6
|
)
|
|
9
|
|
|||
Total other expense (income), net
|
|
$
|
822
|
|
|
$
|
371
|
|
|
$
|
(94
|
)
|
|
|
Years ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Domestic
|
|
$
|
(1,527
|
)
|
|
$
|
(144
|
)
|
|
$
|
12,877
|
|
Foreign
|
|
14,153
|
|
|
12,950
|
|
|
24,645
|
|
|||
Income before income taxes
|
|
$
|
12,626
|
|
|
$
|
12,806
|
|
|
$
|
37,522
|
|
|
|
Years ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
409
|
|
|
$
|
199
|
|
|
$
|
3,780
|
|
State
|
|
40
|
|
|
78
|
|
|
367
|
|
|||
Foreign
|
|
3,482
|
|
|
562
|
|
|
4,433
|
|
|||
Current income tax expense
|
|
3,931
|
|
|
839
|
|
|
8,580
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
(2,357
|
)
|
|
88
|
|
|
306
|
|
|||
State
|
|
(229
|
)
|
|
9
|
|
|
30
|
|
|||
Foreign
|
|
174
|
|
|
(943
|
)
|
|
(5,043
|
)
|
|||
Deferred income tax benefit
|
|
(2,412
|
)
|
|
(846
|
)
|
|
(4,707
|
)
|
|||
Income tax expense (benefit)
|
|
$
|
1,519
|
|
|
$
|
(7
|
)
|
|
$
|
3,873
|
|
|
|
Years ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Tax expense at statutory rate of 34%
|
|
$
|
4,427
|
|
|
$
|
4,354
|
|
|
$
|
12,757
|
|
State income taxes, net of federal benefit
|
|
(50
|
)
|
|
54
|
|
|
425
|
|
|||
Foreign tax rate difference
|
|
(1,939
|
)
|
|
(3,708
|
)
|
|
(2,917
|
)
|
|||
Research and development credit
|
|
(917
|
)
|
|
(853
|
)
|
|
(583
|
)
|
|||
Change in valuation allowance
|
|
162
|
|
|
(28
|
)
|
|
(5,392
|
)
|
|||
Equity based compensation
|
|
(255
|
)
|
|
54
|
|
|
880
|
|
|||
Manufacturing credit
|
|
(61
|
)
|
|
11
|
|
|
(721
|
)
|
|||
Other
|
|
152
|
|
|
109
|
|
|
(576
|
)
|
|||
Income tax expense (benefit)
|
|
$
|
1,519
|
|
|
$
|
(7
|
)
|
|
$
|
3,873
|
|
|
|
As of December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Net deferred income tax asset - Current
|
|
|
|
|
||||
Warranty cost
|
|
$
|
1,121
|
|
|
$
|
657
|
|
Bad debt reserve
|
|
(159
|
)
|
|
21
|
|
||
Inventory reserve
|
|
456
|
|
|
774
|
|
||
Unearned service revenue
|
|
4,934
|
|
|
4,319
|
|
||
Other, net
|
|
1,213
|
|
|
2,021
|
|
||
Net deferred income tax asset - Current
|
|
$
|
7,565
|
|
|
$
|
7,792
|
|
Net deferred income tax asset - Non-current
|
|
|
|
|
||||
Depreciation
|
|
$
|
(6,799
|
)
|
|
$
|
(5,658
|
)
|
Goodwill amortization
|
|
(2,279
|
)
|
|
(2,076
|
)
|
||
Employee stock options
|
|
4,501
|
|
|
3,664
|
|
||
Unearned service revenue
|
|
2,155
|
|
|
2,337
|
|
||
Tax Credits
|
|
2,035
|
|
|
—
|
|
||
Loss carryforwards
|
|
8,005
|
|
|
6,568
|
|
||
Deferred income tax asset - Non-current
|
|
7,618
|
|
|
4,835
|
|
||
Valuation Allowance
|
|
(876
|
)
|
|
(785
|
)
|
||
Net deferred income tax asset - Non-current
|
|
$
|
6,742
|
|
|
$
|
4,050
|
|
Net deferred income tax liability - Non-current
|
|
|
|
|
||||
Intangible assets
|
|
$
|
(1,409
|
)
|
|
$
|
(686
|
)
|
|
|
Years ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at January 1,
|
|
$
|
265
|
|
|
$
|
265
|
|
|
$
|
265
|
|
Additions based on tax positions related to the current year
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Additions for tax positions of prior years
|
|
59
|
|
|
—
|
|
|
—
|
|
|||
Reductions for tax positions of prior years
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Settlements
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at December 31,
|
|
$
|
324
|
|
|
$
|
265
|
|
|
$
|
265
|
|
Jurisdiction
|
|
Open Years
|
|
Examination
in Process |
United States - Federal Income Tax
|
|
2013-2016
|
|
2014
|
United States - various states
|
|
2012-2016
|
|
N/A
|
Germany
|
|
2010-2016
|
|
2010-2012
|
Switzerland
|
|
2016
|
|
N/A
|
Singapore
|
|
2012-2016
|
|
N/A
|
|
|
||
Years ending December 31,
|
Amount
|
||
2017
|
$
|
6,620
|
|
2018
|
4,969
|
|
|
2019
|
3,604
|
|
|
2020
|
2,416
|
|
|
2021
|
1,237
|
|
|
Thereafter
|
4,517
|
|
|
Total future minimum lease payments
|
$
|
23,363
|
|
|
|
Years ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Risk-free interest rate
|
|
1.06% - 1.57%
|
|
|
0.80% - 1.21%
|
|
|
0.95% - 1.32%
|
|
Expected dividend yield
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Expected option life
|
|
4 years
|
|
|
3 years
|
|
|
3-4 years
|
|
Expected volatility
|
|
45.0% - 47.0%
|
|
|
42.3% - 48.5%
|
|
|
42.5% - 45.4%
|
|
Weighted-average expected volatility
|
|
46.1
|
%
|
|
43.5
|
%
|
|
42.6
|
%
|
|
|
Years Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Risk-free interest rate
|
|
—
|
%
|
|
0.95% - 1.48%
|
|
|
—
|
%
|
Expected dividend yield
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Expected option life
|
|
—
|
|
|
4 years
|
|
|
—
|
|
Expected volatility
|
|
—
|
%
|
|
44.5
|
%
|
|
—
|
%
|
Weighted-average expected volatility
|
|
—
|
%
|
|
44.5
|
%
|
|
—
|
%
|
|
|
Options
|
|
Weighted-
Average Exercise Price |
|
Weighted-Average
Remaining Contractual Term (Years) |
|
Aggregate Intrinsic
Value as of December 31, 2016 |
|||||
Outstanding at January 1, 2016
|
|
1,178,585
|
|
|
$
|
48.14
|
|
|
|
|
|
||
Granted
|
|
264,215
|
|
|
34.71
|
|
|
|
|
|
|||
Forfeited
|
|
(217,688
|
)
|
|
46.57
|
|
|
|
|
|
|||
Exercised
|
|
(111,624
|
)
|
|
18.10
|
|
|
|
|
|
|||
Unearned performance-based options
|
|
(23,328
|
)
|
|
59.97
|
|
|
|
|
|
|||
Outstanding at December 31, 2016
|
|
1,090,160
|
|
|
$
|
48.02
|
|
|
4.4
|
|
$
|
1,010
|
|
Options exercisable at December 31, 2016
|
|
823,512
|
|
|
$
|
40.75
|
|
|
2.3
|
|
$
|
367
|
|
|
|
Shares
|
|
Weighted-Average
Grant Date Fair Value |
|||
Non-vested at January 1, 2016
|
|
15,916
|
|
|
$
|
43.47
|
|
Granted
|
|
159,625
|
|
|
33.20
|
|
|
Forfeited
|
|
(10,935
|
)
|
|
33.05
|
|
|
Vested
|
|
(13,247
|
)
|
|
42.79
|
|
|
Unearned performance-based awards
|
|
(677
|
)
|
|
53.03
|
|
|
Non-vested at December 31, 2016
|
|
150,682
|
|
|
$
|
33.39
|
|
|
|
Years Ended December 31,
|
||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||
|
|
Shares
|
|
Per-Share
Amount |
|
Shares
|
|
Per-Share
Amount |
|
Shares
|
|
Per-Share
Amount |
||||||||||
Basic EPS
|
|
16,654,786
|
|
|
$
|
0.67
|
|
|
17,288,665
|
|
|
$
|
0.74
|
|
|
17,247,727
|
|
|
$
|
1.95
|
|
|
Effect of dilutive securities
|
|
26,924
|
|
|
—
|
|
|
100,808
|
|
|
—
|
|
|
168,726
|
|
|
(0.02
|
)
|
||||
Diluted EPS
|
|
16,681,710
|
|
—
|
|
$
|
0.67
|
|
|
17,389,473
|
|
|
$
|
0.74
|
|
|
17,416,453
|
|
|
$
|
1.93
|
|
Securities excluded from the determination of weighted average shares for the calculation of diluted EPS, as they were potentially antidilutive
|
|
1,046,947
|
|
|
|
|
870,421
|
|
|
|
|
520,739
|
|
|
|
|
|
Factory
Metrology |
|
Construction
BIM-CIM |
|
Other
|
|
Total
|
||||||||
2016
|
|
|
|
|
|
|
|
|
||||||||
Net sales to external customers
|
|
$
|
236,313
|
|
|
$
|
65,056
|
|
|
$
|
24,215
|
|
|
$
|
325,584
|
|
Segment profit
|
|
$
|
69,845
|
|
|
$
|
18,250
|
|
|
$
|
9,995
|
|
|
$
|
98,090
|
|
|
|
|
|
|
|
|
|
|
||||||||
General and administrative
|
|
|
|
|
|
|
|
40,813
|
|
|||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
13,868
|
|
|||||||
Research and development
|
|
|
|
|
|
|
|
30,125
|
|
|||||||
|
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
|
|
|
|
|
|
|
$
|
13,284
|
|
|
|
Factory
Metrology |
|
Construction
BIM-CIM |
|
Other
|
|
Total
|
||||||||
2015
|
|
|
|
|
|
|
|
|
||||||||
Net sales to external customers
|
|
$
|
222,745
|
|
|
$
|
70,849
|
|
|
$
|
23,954
|
|
|
$
|
317,548
|
|
Segment profit
|
|
$
|
63,463
|
|
|
$
|
16,299
|
|
|
$
|
7,637
|
|
|
$
|
87,399
|
|
|
|
|
|
|
|
|
|
|
||||||||
General and administrative
|
|
|
|
|
|
|
|
36,370
|
|
|||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
11,217
|
|
|||||||
Research and development
|
|
|
|
|
|
|
|
26,690
|
|
|||||||
|
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
|
|
|
|
|
|
|
$
|
13,122
|
|
|
|
Factory
Metrology |
|
Construction
BIM-CIM |
|
Other
|
|
Total
|
||||||||
2014
|
|
|
|
|
|
|
|
|
||||||||
Net sales to external customers
|
|
$
|
246,216
|
|
|
$
|
75,383
|
|
|
$
|
20,227
|
|
|
$
|
341,826
|
|
Segment profit
|
|
$
|
76,111
|
|
|
$
|
24,497
|
|
|
$
|
7,098
|
|
|
$
|
107,706
|
|
|
|
|
|
|
|
|
|
|
||||||||
General and administrative
|
|
|
|
|
|
|
|
35,331
|
|
|||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
7,428
|
|
|||||||
Research and development
|
|
|
|
|
|
|
|
27,607
|
|
|||||||
|
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
|
|
|
|
|
|
|
$
|
37,340
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net sales to external customers
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
133,924
|
|
|
$
|
131,670
|
|
|
$
|
124,851
|
|
Americas-Other
|
|
11,815
|
|
|
11,718
|
|
|
14,117
|
|
|||
Germany
|
|
44,041
|
|
|
41,151
|
|
|
50,437
|
|
|||
Europe-Other
|
|
57,710
|
|
|
62,032
|
|
|
69,742
|
|
|||
Japan
|
|
32,530
|
|
|
24,018
|
|
|
32,531
|
|
|||
Asia-Other
|
|
45,564
|
|
|
46,959
|
|
|
50,148
|
|
|||
|
|
$
|
325,584
|
|
|
$
|
317,548
|
|
|
$
|
341,826
|
|
|
|
As of December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Long-Lived Assets
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
54,157
|
|
|
$
|
39,973
|
|
|
$
|
35,900
|
|
Americas-Other
|
|
13,486
|
|
|
9,447
|
|
|
1,113
|
|
|||
Germany
|
|
23,734
|
|
|
24,637
|
|
|
17,351
|
|
|||
Europe-Other
|
|
6,949
|
|
|
1,146
|
|
|
248
|
|
|||
Japan
|
|
460
|
|
|
517
|
|
|
599
|
|
|||
Asia-Other
|
|
1,915
|
|
|
2,582
|
|
|
2,448
|
|
|||
|
|
$
|
100,701
|
|
|
$
|
78,302
|
|
|
$
|
57,659
|
|
|
|
ARAS
(Final) |
|
kubit
(Final) |
|
BuildIT
(Final) |
|
LPT
(Preliminary) |
|
MWF
(Preliminary) |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts receivable
|
|
$
|
294
|
|
|
$
|
136
|
|
|
$
|
237
|
|
|
$
|
54
|
|
|
$
|
150
|
|
Inventory
|
|
—
|
|
|
—
|
|
|
—
|
|
|
322
|
|
|
—
|
|
|||||
Other assets
|
|
—
|
|
|
246
|
|
|
36
|
|
|
160
|
|
|
666
|
|
|||||
Deferred income tax assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,112
|
|
|
—
|
|
|||||
Intangible assets
|
|
5,351
|
|
|
2,571
|
|
|
1,015
|
|
|
5,474
|
|
|
1,816
|
|
|||||
Goodwill (1)
|
|
4,964
|
|
|
3,805
|
|
|
3,393
|
|
|
11,872
|
|
|
5,364
|
|
|||||
Accounts payable and accrued liabilities
|
|
(27
|
)
|
|
(182
|
)
|
|
(95
|
)
|
|
(697
|
)
|
|
(700
|
)
|
|||||
Other liabilities
|
|
(219
|
)
|
|
(489
|
)
|
|
(471
|
)
|
|
(1,086
|
)
|
|
(345
|
)
|
|||||
Deferred income tax liabilities
|
|
(1,385
|
)
|
|
(674
|
)
|
|
(205
|
)
|
|
—
|
|
|
(364
|
)
|
|||||
Contingent consideration
|
|
(1,338
|
)
|
|
(987
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total purchase price, net of cash acquired
|
|
$
|
7,640
|
|
|
$
|
4,426
|
|
|
$
|
3,910
|
|
|
$
|
17,211
|
|
|
$
|
6,587
|
|
(1)
|
The goodwill arising from the acquisitions consists largely of the expected synergies from combining operations as well as the value of the workforce. The goodwill value is not expected to be tax deductible.
|
|
|
ARAS
(Final) |
|
kubit
(Final) |
|
BuildIT
(Final) |
|
LPT
(Preliminary) |
|
MWF
(Preliminary) |
|||||||||||||||
|
|
Amount
|
Weighted Average Life
|
|
Amount
|
Weighted Average Life
|
|
Amount
|
Weighted Average Life
|
|
Amount
|
Weighted Average Life
|
|
Amount
|
Weighted Average Life
|
||||||||||
Trade name
|
|
$
|
509
|
|
5
|
|
$
|
658
|
|
6
|
|
$
|
346
|
|
7
|
|
$
|
64
|
|
1
|
|
$
|
36
|
|
1
|
Non-competition agreement
|
|
540
|
|
4
|
|
272
|
|
3
|
|
31
|
|
5
|
|
—
|
|
0
|
|
3
|
|
2
|
|||||
Technology
|
|
2,052
|
|
5
|
|
945
|
|
5
|
|
361
|
|
7
|
|
4,260
|
|
7
|
|
951
|
|
5
|
|||||
Customer relationships
|
|
2,250
|
|
7
|
|
696
|
|
6
|
|
277
|
|
7
|
|
1,150
|
|
7
|
|
826
|
|
5
|
|||||
Fair value of intangible
assets acquired |
|
$
|
5,351
|
|
5
|
|
$
|
2,571
|
|
5
|
|
$
|
1,015
|
|
7
|
|
$
|
5,474
|
|
7
|
|
$
|
1,816
|
|
5
|
Quarter ended
|
|
March 31,
2016 |
|
June 30,
2016 |
|
September 30,
2016 |
|
December 31,
2016 |
||||||||
Sales
|
|
$
|
75,748
|
|
|
$
|
78,538
|
|
|
$
|
79,600
|
|
|
$
|
91,698
|
|
Gross profit
|
|
42,671
|
|
|
43,934
|
|
|
42,678
|
|
|
48,677
|
|
||||
Net income
|
|
3,080
|
|
|
3,392
|
|
|
1,090
|
|
|
3,545
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.19
|
|
|
$
|
0.20
|
|
|
$
|
0.07
|
|
|
$
|
0.21
|
|
Diluted
|
|
$
|
0.19
|
|
|
$
|
0.20
|
|
|
$
|
0.07
|
|
|
$
|
0.21
|
|
Quarter ended
|
|
March 28,
2015 |
|
June 27,
2015 |
|
September 26,
2015 |
|
December 31,
2015 |
||||||||
Sales
|
|
$
|
69,939
|
|
|
$
|
83,775
|
|
|
$
|
72,507
|
|
|
$
|
91,327
|
|
Gross profit
|
|
39,506
|
|
|
44,441
|
|
|
34,766
|
|
|
48,523
|
|
||||
Net income (loss)
|
|
664
|
|
|
4,148
|
|
|
(884
|
)
|
|
8,885
|
|
||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.04
|
|
|
$
|
0.24
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.52
|
|
Diluted
|
|
$
|
0.04
|
|
|
$
|
0.24
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.52
|
|
|
|
|
|
FARO TECHNOLOGIES, INC.
|
|
|
|
|
|
Date:
|
February 24, 2017
|
By:
|
|
/s/ Robert Seidel
|
|
|
|
|
Robert Seidel, Chief Financial Officer
|
|
|
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Simon Raab
|
|
Chairman of the Board, Director, President and Chief Executive Officer (Principal Executive Officer)
|
|
February 24, 2017
|
Simon Raab
|
|
|
|
|
|
|
|
|
|
/s/ Robert Seidel
|
|
Chief Financial Officer (Principal Financial Officer)
|
|
February 24, 2017
|
Robert Seidel
|
|
|
|
|
|
|
|
|
|
/s/ Janet D'Anjou
|
|
Vice President and Corporate Controller (Principal Accounting Officer)
|
|
February 24, 2017
|
Janet D'Anjou
|
|
|
|
|
|
|
|
|
|
/s/ John Caldwell
|
|
Director
|
|
February 24, 2017
|
John Caldwell
|
|
|
|
|
|
|
|
|
|
/s/ Lynn Brubaker
|
|
Director
|
|
February 24, 2017
|
Lynn Brubaker
|
|
|
|
|
|
|
|
|
|
/s/ Stephen R. Cole
|
|
Director
|
|
February 24, 2017
|
Stephen R. Cole
|
|
|
|
|
|
|
|
|
|
/s/ Marvin Sambur
|
|
Director
|
|
February 24, 2017
|
Marvin Sambur
|
|
|
|
|
|
|
|
|
|
/s/ John Donofrio
|
|
Director
|
|
February 24, 2017
|
John Donofrio
|
|
|
|
|
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
2.1
|
|
Stock Purchase Agreement, dated as of August 26, 2016, by and among FARO Technologies, Inc., Laser Projection Technologies, Inc., each of the shareholders of Laser Projection Technologies, Inc. and Steven P. Kaufman in the capacity of the Seller Representative (Filed as Exhibit 2.1 to Registrant's Current Report on Form 8-K filed August 30, 2016, and incorporated herein by reference)**
|
|
|
|
3.1
|
|
Amended and Restated Articles of Incorporation, as amended (Filed as Exhibit 3.1 to Registrant’s Registration Statement on Form S-1/A filed September 10, 1997, No. 333-32983, and incorporated herein by reference)
|
|
|
|
3.2
|
|
Amended and Restated Bylaws (Filed as Exhibit 3.1 to Registrant’s Current Report on Form 8-K, filed February 3, 2010, and incorporated herein by reference, SEC File No. 000-23081)
|
|
|
|
4.1
|
|
Specimen Stock Certificate (Filed as Exhibit 4.1 to Registrant’s Registration Statement on Form S-1/A , filed September 10, 1997, No. 333-32983, and incorporated herein by reference)
|
|
|
|
10.1
|
|
Amended and Restated 2004 Equity Incentive Plan (Filed as Exhibit 10.1 to Registrant’s Form 8-K filed November 24, 2008, and incorporated herein by reference, SEC File No. 000-23081)*
|
|
|
|
10.2
|
|
Amendment to Amended and Restated 2004 Equity Incentive Plan (Filed as Exhibit 10.3 to Registrant’s Form 8-K, filed April 8, 2009, and incorporated herein by reference, SEC File No. 000-23081)*
|
|
|
|
10.3
|
|
1997 Non-Employee Director Stock Option Plan (Filed as Exhibit 10.3 to Registrant’s Registration Statement on Form S-1 filed August 6, 1997, No. 333-32983, and incorporated herein by reference)*
|
|
|
|
10.4
|
|
2009 Equity Incentive Plan (Filed as Appendix A to Registrant’s Definitive Proxy Statement on Schedule 14A filed April 15, 2009, and incorporated herein by reference, SEC File No. 000-23081)*
|
|
|
|
10.5
|
|
First Amendment to the 2009 Equity Incentive Plan (Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K, filed April 15, 2011, and incorporated herein by reference, SEC File No. 000-23081)*
|
|
|
|
10.6
|
|
2014 Incentive Plan (Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K, filed June 3, 2014, and incorporated herein by reference)*
|
|
|
|
10.7
|
|
Summary of Director Compensation Program (Filed as Exhibit 10.7 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2015, and incorporated herein by reference)*
|
|
|
|
10.8
|
|
Form of Intellectual Property and Confidentiality Agreement between FARO Technologies, Inc. and new employees (Filed as Exhibit 10.8 to Registrant's Annual Report on Form 10-K for the year ended December 31, 2015, and incorporated herein by reference)
|
|
|
|
10.9
|
|
Form of Stock Option Award Agreement under the 2004 Equity Incentive Plan (Filed as Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2008, and incorporated herein by reference, SEC file No. 000-23801)*
|
|
|
|
10.10
|
|
Form of Stock Option Award Agreement under the 2009 Equity Incentive Plan (Filed as Exhibit 10.10 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015, and incorporated herein by reference)*
|
|
|
|
10.11
|
|
Form of Restricted Stock Unit Award Agreement under the 2009 Equity Incentive Plan (Filed as Exhibit 10.11 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015, and incorporated herein by reference)*
|
|
|
|
10.12
|
|
Form of performance-based Stock Option Award Agreement under the 2014 Incentive Plan (Filed as Exhibit 10.12 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015, and incorporated herein by reference)*
|
|
|
10.13
|
|
Form of performance-based Restricted Stock Unit Award Agreement under the 2014 Incentive Plan (Filed as Exhibit 10.13 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015, and incorporated herein by reference)*
|
|
|
|
10.14
|
|
Form of Restricted Stock Unit Award Agreement under the 2014 Incentive Plan (Filed as Exhibit 10.4 to Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, and incorporated herein by reference)*
|
|
|
|
10.15
|
|
Form of time-based Stock Option Award Agreement under the 2014 Incentive Plan*
|
|
|
|
10.16
|
|
Amended and Restated Employment Agreement, dated November 7, 2008, by and between FARO Technologies, Inc. and Jay Freeland (Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed November 14, 2008, and incorporated herein by reference, SEC File No. 000-23801)*
|
|
|
|
10.17
|
|
Amendment to Amended and Restated Employment Agreement, dated April 2, 2009, by and between FARO Technologies, Inc. and Jay Freeland (Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K, filed April 8, 2009, and incorporated herein by reference, SEC File No. 000-23801)*
|
|
|
|
10.18
|
|
Amendment No. 2 to Amended and Restated Employment Agreement, dated December 14, 2010, by and between FARO Technologies, Inc. and Jay Freeland (Filed as Exhibit 10.17 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2010 and incorporated herein by reference, SEC File No. 000-23801)*
|
|
|
|
10.19
|
|
Transition and Separation Agreement dated December 4, 2015 between FARO Technologies, Inc. and Jay Freeland (Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K, filed December 7, 2015, and incorporated herein by reference)*
|
|
|
|
10.20
|
|
Employment Agreement between FARO Technologies, Inc. and Peter G. Abram, dated March 7, 2014 (Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed March 10, 2014 and incorporated herein by reference)*
|
|
|
|
10.21
|
|
Separation and release letter agreement, dated as of March 20, 2015, between FARO Technologies, Inc. and Peter G. Abram (Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed March 25, 2015 and incorporated herein by reference)*
|
|
|
|
10.22
|
|
Employment Agreement between FARO Technologies, Inc. and Joseph Arezone, dated as of April 27, 2016 (Filed as Exhibit 10.2 to Registrant’s Current Report on Form 8-K, filed April 29, 2016, and incorporated herein by reference)*
|
|
|
|
10.23
|
|
Amended and Restated Employment Agreement between FARO Technologies, Inc. and Kathleen J. Hall, dated as of April 27, 2016 (Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed April 29, 2016, and incorporated herein by reference)*
|
|
|
|
10.24
|
|
Amended and Restated Employment Agreement between FARO Technologies, Inc. and Jody S. Gale, dated as of April 27, 2016 (Filed as Exhibit 10.3 to Registrant’s Current Report on Form 8-K filed April 29, 2016, and incorporated herein by reference)*
|
|
|
|
10.25
|
|
Employment Agreement between FARO Technologies, Inc. and Laura Murphy, dated as of July 29, 2015 (Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K, filed July 31, 2015 and incorporated herein by reference)*
|
|
|
|
10.26
|
|
Transition and Separation Agreement between FARO Technologies, Inc. and Laura A. Murphy-Wolf, dated as of March 10, 2016 (Filed as Exhibit 10.1 to Registrant's Current Report on Form 8-K filed March 11, 2016, and incorporated by reference)*
|
|
|
|
10.27
|
|
Employment Agreement between FARO Technologies, Inc. and Robert E. Seidel, dated December 21, 2016 (Filed as Exhibit 10.1 to Registrant's Current Report on Form 8-K filed December 21, 2016, and incorporated herein by reference)*
|
|
|
|
10.28
|
|
FARO Technologies, Inc. Amended and Restated Change in Control Severance Policy, dated as of April 9, 2015 (Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K, filed April 10, 2015 and incorporated herein by reference)*
|
|
|
|
10.29
|
|
Office Flex Lease, dated September 26, 2007, by and between FARO Technologies, Inc. and Sun Life Assurance Company of Canada (Filed as Exhibit 10.15 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007, and incorporated herein by reference, SEC File No. 000-23801)
|
|
|
|
10.30
|
|
First Amendment to Lease Agreement, dated October 1, 2009, by and between FARO Technologies, Inc. and Sun Life Assurance Company of Canada (Filed as Exhibit 10.27 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009 and incorporated herein by reference, SEC File No. 000-23801)
|
|
|
|
10.31
|
|
Amended and Restated Lease Agreement, dated October 1, 2009, by and between FARO Technologies, Inc. and Emma Investments, LLC (Filed as Exhibit 10.26 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009 and incorporated herein by reference, SEC File No. 000-23801)
|
|
|
|
10.32
|
|
First Amendment to Amended and Restated Lease Agreement between Emma Investments, LLC and FARO Technologies, Inc., dated as of May 14, 2014 (Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed May 16, 2014 and incorporated herein by reference)
|
|
|
|
10.33
|
|
Agreement of Lease (Amendment and Restatement) between 290 National Road Limited Partnership and FARO Technologies, Inc., dated as of September 9, 2014 (Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed September 12, 2014 and incorporated herein by reference)
|
|
|
|
21.1
|
|
List of Subsidiaries
|
|
|
|
23.1
|
|
Consent of Grant Thornton LLP
|
|
|
|
24.1
|
|
Power of Attorney relating to subsequent amendments (included on the signature page(s) of this report).
|
|
|
|
31-A
|
|
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
31-B
|
|
Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32-A
|
|
Certification of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32-B
|
|
Certification of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
99.1
|
|
Properties
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Labels Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document
|
|
|
|
*
|
Indicates management contracts or compensatory plans or arrangements
|
**
|
Schedules and exhibits are omitted pursuant to Item 601(b)(2) of Regulation S-K. Registrant agrees to furnish supplementally a copy of any omitted schedules or exhibits to the Securities and Exchange Commission upon request.
|
Elapsed Number of Years after Grant Date
|
Cumulative Percentage of Shares Subject to Option Which May be Purchased (which
number of shares shall be rounded
down to the nearest whole
number)
|
# of Shares
|
1
|
33.3%
|
|
2
|
66.6%
|
|
3
|
100.0%
|
|
Name
|
|
Jurisdiction of Organization
|
|
|
|
Antares-Desenvolvimento de Software, Lda.
|
|
Portugal
|
|
|
|
Cam2 SRL
|
|
Italy
|
|
|
|
Cam2 Sweden AB
|
|
Sweden
|
|
|
|
FARO Benelux BV
|
|
Netherlands
|
|
|
|
FARO Business Technologies India Pvt. Ltd
|
|
India
|
|
|
|
FARO Cayman LP
|
|
Cayman Islands
|
|
|
|
FARO Cayman Ltd
|
|
Cayman Islands
|
|
|
|
FARO Delaware, Inc.
|
|
Delaware
|
|
|
|
FARO Deutschland Holding GmbH
|
|
Germany
|
|
|
|
FARO Europe GmbH & Co. KG
|
|
Germany
|
|
|
|
FARO FHN Netherlands Holdings BV
|
|
Netherlands
|
|
|
|
FARO Japan Inc.
|
|
Japan
|
|
|
|
FARO Scanning GmbH
|
|
Germany
|
|
|
|
FARO Scanner Production GmbH
|
|
Germany
|
|
|
|
FARO 3D Software GmbH
|
|
Germany
|
|
|
|
FARO International (Shanghai) Co., Ltd
|
|
China
|
|
|
|
FARO Singapore Pte Ltd
|
|
Singapore
|
|
|
|
FARO Spain SL
|
|
Spain
|
|
|
|
FARO Swiss Holding GmbH
|
|
Switzerland
|
|
|
|
FARO Swiss Manufacturing GmbH
|
|
Switzerland
|
|
|
|
FARO Technology Polska sp.zo.o
|
|
Poland
|
|
|
|
FARO Turkey Olcu Sistemleri Ltd. Sti
|
|
Turkey
|
|
|
|
FARO Verwaltungs GmbH
|
|
Germany
|
|
|
|
FARO Technologies (Thailand) Ltd
|
|
Thailand
|
|
|
|
Faro Laser Trackers, LLC
|
|
Delaware
|
|
|
|
3D Measurement Technologies, S de RL de CV
|
|
Mexico
|
|
|
|
OOO FARO RUS
|
|
Russia
|
|
|
|
FARO Technologies UK Ltd.
|
|
United Kingdom
|
|
|
|
FARO Technologies do Brasil Ltda
|
|
Brazil
|
|
|
|
FARO Technologies Canada, Inc.
|
|
Canada
|
|
|
|
MWF-Technology GmbH
|
|
Germany
|
|
|
|
Moldware GmbH
|
|
Germany
|
|
|
|
|
/s/ Simon Raab
|
Simon Raab
|
February 24, 2017
|
|
/s/ Robert Seidel
|
Robert Seidel
|
February 24, 2017
|
No.
|
|
Location
|
|
Sq. Ft.
|
|
Owned/
Leased
|
|
Purposes
|
1
|
|
125 Technology Park, Lake
Mary, Florida
|
|
35,000
|
|
Leased
|
|
Manufacturing, research and development, service
|
2
|
|
250 Technology Park, Lake
Mary, Florida
|
|
46,500
|
|
Leased
|
|
Headquarters, sales, marketing, administration
|
3
|
|
290 National Road
Exton, Pennsylvania
|
|
90,400
|
|
Leased
|
|
Manufacturing, research and development, service
|
4
|
|
Lingwiesenstrasse 11/2
70825 Korntal-Muenchingen
BW, Germany
|
|
105,300
|
|
Leased
|
|
European headquarters, manufacturing, sales, research and development, service
|
5
|
|
Wiesengasse 20
CH-8222 Beringen
Switzerland
|
|
15,900
|
|
Leased
|
|
Manufacturing
|
6
|
|
716 Kumada Nagakute-shi,
Aichi 480-1144, Japan
|
|
15,900
|
|
Leased
|
|
Sales, service
|
7
|
|
188 Pingfu Road, Shanghai,
China
|
|
24,700
|
|
Leased
|
|
Sales, service
|
8
|
|
No. 3 Changi South St 2
#01-01 Xilin Districentre
Building B, Singapore
|
|
22,000
|
|
Leased
|
|
Asia headquarters, manufacturing, sales, service
|
9
|
|
215 Avenida Centuria, Parque Indutrial, Apodaca, Nuevo Leon 66600 - Mexico
|
|
36,000
|
|
Leased
|
|
Sales, service
|