FARO Reports Sales Growth of 9.2% for 2008; Orders Grow 6.8%
Thursday February 12, 5:41 pm ET
LAKE MARY, Fla., Feb. 12 /PRNewswire-FirstCall/ -- FARO Technologies, Inc. (Nasdaq: FARO - News) today announced results for the fourth quarter ended December 31, 2008. Net income for the fourth quarter was $2.2 million, or $0.13 per diluted share, a decrease of $6.2 million, compared to $8.4 million, or $0.50 per diluted share in the fourth quarter of 2007. Net income for fiscal 2008 was $14.0 million, or $0.83 per diluted share, compared to $18.1 million, or $1.15 per diluted share.
Sales for the fourth quarter of 2008 were $56.3 million, a decrease of $2.9 million, or 4.9%, from $59.2 million in the fourth quarter of 2007. New order bookings for the fourth quarter were $56.4 million, a decrease of $9.0 million, or 13.8%, compared with $65.4 million in the fourth quarter of 2007. Fiscal 2008 sales were $209.2 million, an increase of 9.2% compared to 2007 sales of $191.6 million. New order bookings for fiscal 2008 were $211.3 million, a 6.8% increase from $197.8 million in fiscal 2007.
"2008 was a difficult year for most companies and that directly impacted FARO," stated Jay Freeland, FARO's President & CEO. "The second half of the year was particularly tough for us across all three regions. There was good customer interest in our products. However, global economic weakness caused significant delays in our customers' decision-making processes as they reviewed their capital equipment needs."
Gross margin for the fourth quarter of 2008 was 57.3%, compared to 60.0% in the fourth quarter of 2007. Gross margin decreased primarily as the result of lower product sales which carry high gross margins. As a result, service costs as a percentage of sales had a larger impact than in previous quarters. The gross margin for fiscal 2008 was 59.8% compared to 60.0% in fiscal 2007.
Selling expenses as a percentage of sales increased to 28.6% in the fourth quarter of 2008 from 27.3% in the fourth quarter of 2007 primarily as a result of the decline in sales. Selling expenses in the fourth quarter of 2008 remained relatively flat, decreasing by $0.1 million to $16.1 million. Selling expenses as a percentage of sales for fiscal 2008 were 30.1% compared to 29.3% in fiscal 2007.
General and administrative expenses increased to 12.2% of sales for the fourth quarter of 2008 from 11.8% in the fourth quarter of 2007. General and administrative expenses in the fourth quarter of 2008 declined by $0.1 million to $6.9 million. General and administrative expenses were 12.5% of sales for fiscal 2008 compared to 13.3% in fiscal 2007.
R&D expenses were $3.5 million in the fourth quarter of 2008, an increase from $3.1 million in the fourth quarter of 2007. R&D expenses for fiscal 2008 were $12.6 million, or 6.0% of sales, an increase of $2.3 million from $10.3 million in fiscal 2007, or 5.4% of sales. The increase in spending was tied to new product development of existing platforms and establishing the R&D Center of Excellence in Cambridge for the Company's new 3D Imaging technology.
Operating margin for the fourth quarter of 2008 decreased to 8.1% from 13.8% in the fourth quarter of 2007. Operating margin for fiscal 2008 was 9.1% compared to 10.0% in fiscal 2007.
Income tax expense increased by $0.3 million to $1.4 million for the fourth quarter of 2008 from $1.1 million for the fourth quarter of 2007. The Company's effective tax rate increased to 24.0% for 2008 from 21.5% in 2007 due to an increase in income in higher tax jurisdictions.
"As previously announced, we do not plan to issue specific guidance in 2009. Based on current economic conditions, we expect 2009 to be extremely challenging. It is possible that we will experience sales declines during this global recession. The Company has taken and will continue taking appropriate actions which reflect the ongoing business climate," Freeland concluded.
