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Dec 31, 2019
FARO Q4 2019 Earnings Report
FARO's Q4 2019 financial performance was impacted by market softness, particularly in the automotive and Asian markets, but strategic initiatives were completed to drive long-term profit growth.
Key Takeaways
FARO Technologies reported a decrease in total sales for Q4 2019, with $104.1 million compared to $112.8 million in Q4 2018. The company experienced a net loss of $49.7 million, or $2.85 per share, compared to a net income of $5.8 million, or $0.33 per share, in the same quarter of the previous year. Strategic initiatives were completed to leverage the company's market position and drive long-term profit growth, including an estimated $40 million in annualized pre-tax cost savings expected in Q4 2020.
Total sales decreased to $104.1 million from $112.8 million in Q4 2018, due to market softness.
Net loss was $49.7 million, or $2.85 per share, compared to a net income of $5.8 million, or $0.33 per share, in Q4 2018.
Non-GAAP net income was $3.1 million, or $0.18 per share, compared to $10.8 million, or $0.62 per share, in Q4 2018.
The company expects to incur an additional $26 million to $36 million of restructuring charges in the first half of 2020.
FARO
FARO
Forward Guidance
FARO anticipates incurring additional restructuring charges in the first half of 2020 and expects to achieve significant cost savings by Q4 2020.
Positive Outlook
- Strategic initiatives are expected to drive long-term profit growth.
- The company anticipates $40 million in annualized pre-tax cost savings in Q4 2020.
- Focus on core 3D growth markets, including 3D metrology, AEC, and public safety analytics.
- Increased focus on software and solution offerings to enhance customer value.
- Revised go-to-market strategy aims to improve sales and marketing efficiency.
Challenges Ahead
- The near-term overall market for products remains soft.
- Market softness is largely due to conditions in the automotive and broader Asian markets.
- The company expects to incur an additional $26 million to $36 million of restructuring charges in the first half of 2020.
- Gross margin, which includes $15.1 million of inventory write-downs, was 41.9% for the fourth quarter 2019, as compared to 55.7% for the same prior year period.
- The Company recorded non-cash charges of approximately $49 million in the fourth quarter of 2019 in connection with the implementation of its new strategic plan.