Nine months ended September 30, 2016
Sales at $233.9 million for the nine months ended September 30, 2016, grew 3.4% compared with $226.2 million in the comparable period last year on increased metrology products and global services revenue. New order bookings at $234.9 million, increased by 4.3% compared with $225.2 million in the same prior year period.
Gross margin was 55.3%, increased by 2.7 percentage points over the comparable prior year period due to higher average selling prices, strong service revenue growth, and the effect of a $7.9 million write-down of inventory in the third quarter of 2015.
Operating income was $9.7 million, up 52.1% compared with $6.4 million in the same prior year period, reflecting higher sales and gross margin offset partly by an increase in operating expenses arising largely from increased staffing, compensation and acquisition expenses. Operating margin was 4.1% for the first nine months of 2016, compared with 2.8% in the comparable period last year.
Net income was $7.6 million or $0.45 per diluted share, compared with $3.9 million or $0.22 per diluted share for the first nine months of 2015.
Cash flow from operations for the first nine months of 2016 was $28.5 million, up $20.6 million compared with $7.9 million in the prior year period reflecting improved inventory and accounts payable management. As of September 30, 2016 cash and short-term investments totaled $153.3 million of which $92.5 million was held by foreign subsidiaries.
Third quarter 2016
Sales for the quarter ended September 30, 2016 were $79.6 million, up 9.8% compared with $72.5 million in the third quarter last year reflecting a significant increase in product sales within the Asia region, a modest product sales growth in the Americas region, and a strong global growth in service revenue. New order bookings were $79.8 million for the third quarter of 2016, up 10.5% compared with $72.3 million for the third quarter of 2015.
Gross margin for the quarter was 53.6%, up 5.5 percentage points compared with 48.1% in the prior year period primarily due to a $7.9 million write-down of inventory recorded in the third quarter of 2015, partially offset by lower average selling prices arising from our initiative to reduce aged service and sales demonstration inventory.
Operating income for the quarter was $0.8 million compared with a loss of $0.9 million in the prior year period reflecting higher sales and gross margin offset partly by an increase in operating expenses. Operating margin was 1.1% in the third quarter of 2016, compared with (1.3)% in the prior year period.
Net income for the quarter was $1.1 million or $0.07 per diluted share, compared with a loss of $0.9 million or $0.05 per diluted share in the prior year period.
A complete chart of the financial results is available here.
FARO is the provider of 3D measurement technology. The company develops and markets computer-aided measurement and imaging devices and software. Technology from FARO permits high-precision 3D measurement, imaging and comparison of parts and complex structures within production and quality assurance processes. The devices are used for inspecting components and assemblies, rapid prototyping, documenting large volume spaces or structures in 3D, surveying and construction, as well as for investigation and reconstruction of accident sites or crime scenes.
FARO’s global headquarters are located in Lake Mary, Florida. The Company also has a technology center and manufacturing facility consisting of approximately 90,400 square feet located in Exton, Pennsylvania containing research and development, manufacturing and service operations of our FARO Laser Tracker™ and FARO Cobalt Array Imager product lines. The Company’s European regional headquarters is located in Stuttgart, Germany and its Asia Pacific regional headquarters is located in Singapore. FARO has other offices in the United States, Canada, Mexico, Brazil, Germany, the United Kingdom, France, Spain, Italy, Poland, Turkey, the Netherlands, Switzerland, India, China, Malaysia, Vietnam, Thailand, South Korea, Japan, and Australia.
More information is available at http://www.faro.com.