FARO Reports Sales Growth of 21.4%, Net Income Growth of 10.0%
Tuesday July 29, 6:38 pm ET
LAKE MARY, Fla., July 29 /PRNewswire-FirstCall/ -- FARO Technologies, Inc. (Nasdaq: FARO - News) today announced results for the second quarter ended June 28, 2008. Net income for the second quarter was $6.4 million, or $0.38 per diluted share, an increase of $0.6 million, compared to $5.8 million, or $0.39 per diluted share, in the second quarter of 2007.
Sales for the second quarter of 2008 were $57.7 million, an increase of $10.1 million, or 21.4%, from $47.6 million in the second quarter of 2007. New order bookings for the second quarter were $58.7 million, an increase of $8.3 million, or 16.5%, compared with $50.4 million in the second quarter of 2007.
"This was another solid quarter for our company with revenue growing nicely, due to ongoing demand for our products," stated Jay Freeland, FARO's President & CEO. "Our performance in both European and Asian markets was strong and more than offset weaknesses in the United States where the market has been affected by a slowing economy."
Gross margin for the second quarter of 2008 was 62.8%, compared to 61.4% in the second quarter of 2007. Gross margin increased primarily as the result of a change in the sales mix resulting from an increase in unit sales of higher margin product lines.
Selling expenses as a percentage of sales increased to 29.6% in the second quarter of 2008, essentially flat with 29.4% in the second quarter of 2007. Increases in selling expenses in absolute dollars related to new sales personnel that were added to continue driving the Company's growth.
General and administrative expenses were 12.1% of sales for the second quarter of 2008, marginally higher than the second quarter of 2007.
The Company increased spending in research and development to accelerate development of new product platforms. Accordingly, R&D costs were $3.2 million in the second quarter of 2008, an increase from $2.3 million in the second quarter of 2007.
Operating margin for the second quarter of 2008 was 13.6%, unchanged from the year ago quarter.
Income tax expense was $1.5 million for the second quarter of 2008 compared to $1.4 million in the second quarter of 2007 primarily as a result of an increase in pretax income. The Company's effective tax rate was 19.3% in the second quarter of 2008 compared to 19.6% in the second quarter of 2007 due to an increase in taxable income in jurisdictions with lower tax rates.
"Year-to-date, we continue to execute well, with 18.2% revenue growth and 61.6% gross margin. However, we expect continued weakness in the U.S. economy and modest uncertainty in several European economies through the rest of this year. Accordingly, we are lowering our full-year 2008 revenue guidance from 20-25% growth to 15-20% growth while maintaining our previously issued gross margin guidance of 58-60% of sales," Freeland concluded.
