AND SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP(UNAUDITED) Three Months Ended December 31, Twelve Months Ended December 31,(dollars in thousands, except per share data) 2024 2023 2024 2023 Gross profit, as reported$53,081 $50,286 $187,153 $164,999 Stock-based compensation (1) 383 364 1,468 1,335 Restructuring and other costs(2) 262 51 270 1,377 Non-GAAP adjustments to gross profit 645 415 1,738 2,712 Non-GAAP gross profit$53,726 $50,701 $188,891 $167,711 Gross margin, as reported 56.7% 50.9% 54.7% 46.0%Non-GAAP gross margin 57.4% 51.3% 55.2% 46.7% Selling, general and administrative, as reported$34,360 $39,429 $140,584 $157,336 Stock-based compensation (1) (2,347) (4,488) (8,343) (14,198)Restructuring and other costs (2) — (1,067) (3,453) (2,273)Purchase accounting intangible amortization (388) (634) (1,555) (2,658)Non-GAAP selling, general and administrative$31,625 $33,240 $127,233 $138,207 Research and development, as reported$11,428 $9,238 $40,056 $41,806 Stock-based compensation (1) (488) (705) (1,878) (2,300)Restructuring and other costs (2) (1,948) — (1,948) — Purchase accounting intangible amortization (688) (475) (2,777) (2,016)Non-GAAP research and development$8,304 $8,058 $33,453 $37,490 Operating expenses, as reported$48,356 $48,930 $183,824 $214,535 Stock-based compensation (1) (2,835) (5,194) (10,221) (16,498)Restructuring and other costs (2) (4,516) (1,329) (8,585) (17,666)Purchase accounting intangible amortization (1,076) (1,109) (4,332) (4,674)Non-GAAP adjustments to operating expenses (8,427) (7,632) (23,138) (38,838)Non-GAAP operating expenses$39,929 $41,298 $160,686 $175,697 Income (loss) from operations, as reported$4,725 $1,356 $3,329 $(49,536)Non-GAAP adjustments to gross profit 645 415 1,738 2,712 Non-GAAP adjustments to operating expenses 8,427 7,632 23,138 38,838 Non-GAAP income (loss) from operations$13,797 $9,403 $28,205 $(7,986) Net (loss) income, as reported$(986) $1,588 $(9,066) $(56,577)Non-GAAP adjustments to gross profit 645 415 1,738 2,712 Non-GAAP adjustments to operating expenses 8,427 7,632 23,138 38,838 Income tax effect of non-GAAP adjustments (1,824) (2,056) (5,356) (10,852)Other tax adjustments (4) 3,209 (1,738) 8,070 15,962 Non-GAAP net income (loss)$9,471 $5,841 $18,524 $(9,917) Net (loss) income per share - Diluted, as reported$(0.05) $0.08 $(0.47) $(2.99)Stock-based compensation (1) 0.17 0.28 0.61 0.94 Restructuring and other costs (2) 0.25 0.07 0.46 1.01 Purchase accounting intangible amortization and fair value adjustments 0.06 0.06 0.23 0.25 Income tax effect of non-GAAP adjustments (3) (0.10) (0.10) (0.28) (0.57)Other tax adjustments (3) 0.17 (0.08) 0.42 0.84 Non-GAAP net income (loss) per share - Diluted$0.50 $0.31 $0.97 $(0.52) (1) We exclude stock-based compensation, which is non-cash, from the non-GAAP financial measures because the Company believes that such exclusion provides a better comparison of results of ongoing operations for current and future periods with such results from past periods.(2) On February 14, 2020, our Board of Directors approved a global restructuring plan (the "Restructuring Plan”), which is intended to support our strategic plan in an effort to improve operating performance and ensure that we are appropriately structured and resourced to deliver increased and sustainable value to our shareholders and customers.
Factors that could cause actual results to differ materially from what is expressed or forecasted in such forward-looking statements include, but are not limited to: the Company’s ability to realize the intended benefits of its undertaking to transition to a company that is reorganized around functions to improve the efficiency of its sales organization and to improve operational effectiveness;the Company’s inability to successfully execute its strategic plan and our 2024 Restructuring Plan, including but not limited to additional impairment charges including existing leasehold improvements and/or higher than expected severance costs and exit costs, and its inability to realize the expected benefits of such plans;the effect of any changes in our executive management team and the loss of any of our executive officers or other key personnel, which may be impacted by factors such as our inability to competitively address inflationary pressures on employee compensation and flexibility in employee work arrangements, including the impact of our 2025 "return to office" policy;the outcome of any litigation to which the Company is or may become a party;loss of future government sales;potential impacts on customer and supplier relationships and the Company's reputation;development by others of new or improved products, processes or technologies that make the Company's products less competitive or obsolete;the Company's inability to maintain its technological advantage by developing new products and enhancing its existing products;declines or other adverse changes, or lack of improvement, in industries that the Company serves or the domestic and international economies in the regions of the world where the Company operates and other general economic, business, and financial conditions;the effect of general economic and financial market conditions, including in response to public health concerns;assumptions regarding the Company’s financial condition or future financial performance may be incorrect;the impact of fluctuations in foreign exchange rates and inflation rates; andother risks and uncertainties discussed in Part I, Item 1A.
As we enter 2025, we are confident that our multi-phase strategy, focused on operational excellence, organic growth, and strategic investments, positions us for sustained market leadership and long-term value creation for our shareholders.” Fourth Quarter 2024 Financial Summary Total sales of $93.5 million, down 5% year over yearGross margin of 56.7%, compared to 50.9% in the prior year periodNon-GAAP gross margin of 57.4%, compared to 51.3% in the prior year periodOperating expenses of $48.4 million, compared to $48.9 million in the prior year periodNon-GAAP operating expenses of $39.9 million, compared to $41.3 million in the prior year periodNet loss of $1.0 million, or $(0.05) per share compared to net income of $1.6 million, or $0.08 per share in the prior year periodNon-GAAP net income of $9.5 million, or $0.50 per share compared to net income of $5.8 million, or $0.31 per share in the prior year periodEBITDA of $8.2 million, or 8.8% of total sales compared to $3.7 million, or 3.7% of total sales in the prior year periodAdjusted EBITDA of $16.7 million, or 17.9% of total sales compared to $11.9 million, or 12.1% of total sales in the prior year periodCash, cash equivalents & short-term investments of $98.7 million, compared to $88.9 million as of September 30, 2024.* A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures is provided in the financial schedules portion at the end of this press release.
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