Cover page
Cover page - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 0-23081 | |
Entity Registrant Name | FARO TECHNOLOGIES, INC | |
Entity Incorporation, State or Country Code | FL | |
Entity Tax Identification Number | 59-3157093 | |
Entity Address, Address Line One | 250 Technology Park, | |
Entity Address, City or Town | Lake Mary, | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 32746 | |
City Area Code | 407 | |
Local Phone Number | 333-9911 | |
Title of 12(b) Security | Common Stock, par value $.001 | |
Trading Symbol | FARO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 18,779,816 | |
Entity Central Index Key | 0000917491 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 48,534 | $ 121,989 |
Accounts receivable, net | 75,347 | 78,523 |
Inventories, net | 50,956 | 53,145 |
Prepaid expenses and other current assets | 33,801 | 19,793 |
Total current assets | 208,638 | 273,450 |
Non-current assets: | ||
Property, plant and equipment, net | 20,424 | 22,194 |
Operating lease right-of-use assets | 18,404 | 22,543 |
Goodwill | 101,279 | 82,096 |
Intangible assets, net | 48,094 | 25,616 |
Service and sales demonstration inventory, net | 28,249 | 30,554 |
Deferred income tax assets, net | 18,092 | 21,277 |
Other long-term assets | 2,047 | 2,010 |
Total assets | 445,227 | 479,740 |
Current liabilities: | ||
Accounts payable | 17,546 | 14,199 |
Accrued liabilities | 22,881 | 28,208 |
Income taxes payable | 6,421 | 4,499 |
Current portion of unearned service revenues | 36,440 | 40,838 |
Customer deposits | 5,873 | 5,399 |
Lease liabilities | 5,532 | 5,738 |
Total current liabilities | 94,693 | 98,881 |
Unearned service revenues - less current portion | 20,868 | 22,350 |
Lease liabilities - less current portion | 14,344 | 18,648 |
Deferred income tax liabilities | 5,708 | 1,058 |
Income taxes payable - less current portion | 10,131 | 11,297 |
Other long-term liabilities | 19 | 1,047 |
Total liabilities | 145,763 | 153,281 |
Commitments and contingencies - See Note 12 | ||
Shareholders’ equity: | ||
Common stock - par value $0.001, 50,000,000 shares authorized; 20,153,287 and 19,588,003 issued, respectively; 18,776,936 and 18,205,636 outstanding, respectively | 20 | 20 |
Additional paid-in capital | 325,244 | 301,061 |
Retained earnings | 49,022 | 73,544 |
Accumulated other comprehensive loss | (44,165) | (17,374) |
Common stock in treasury, at cost - 1,376,351 and 1,382,367 shares held, respectively | (30,657) | (30,792) |
Total shareholders’ equity | 299,464 | 326,459 |
Total liabilities and shareholders’ equity | $ 445,227 | $ 479,740 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 20,153,287 | 19,588,003 |
Common stock, shares outstanding (in shares) | 18,776,936 | 18,205,636 |
Treasury stock, shares (in shares) | 1,376,351 | 1,382,367 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Sales | $ 85,332 | $ 79,169 | $ 241,906 | $ 237,610 |
Cost of sales | 42,067 | 36,838 | 117,178 | 109,390 |
Gross profit | 43,265 | 42,331 | 124,728 | 128,220 |
Operating expenses | ||||
Selling, general and administrative | 37,226 | 33,433 | 108,734 | 100,375 |
Research and development | 12,586 | 12,731 | 36,756 | 36,464 |
Restructuring costs | 580 | 1,376 | 2,512 | 3,679 |
Total operating expenses | 50,392 | 47,540 | 148,002 | 140,518 |
Loss from operations | (7,127) | (5,209) | (23,274) | (12,298) |
Other (income) expense | ||||
Interest (income) expense, net | (24) | 5 | (28) | 54 |
Other (income) expense, net | (1,428) | 299 | (3,077) | (433) |
Loss before income tax expense (benefit) | (5,675) | (5,513) | (20,169) | (11,919) |
Income tax expense (benefit) | 586 | (1,658) | 4,352 | (3,667) |
Net loss | $ (6,261) | $ (3,855) | $ (24,521) | $ (8,252) |
Net loss per share - Basic (in dollars per share) | $ (0.34) | $ (0.21) | $ (1.34) | $ (0.45) |
Net loss per share - Diluted (in dollars per share) | $ (0.34) | $ (0.21) | $ (1.34) | $ (0.45) |
Weighted average shares - Basic (in shares) | 18,436,615 | 18,194,960 | 18,336,537 | 18,166,930 |
Weighted average shares - Diluted (in shares) | 18,436,615 | 18,194,960 | 18,336,537 | 18,166,930 |
Product | ||||
Sales | $ 65,581 | $ 57,838 | $ 182,015 | $ 172,748 |
Cost of sales | 30,375 | 25,650 | 82,879 | 75,909 |
Service | ||||
Sales | 19,751 | 21,331 | 59,891 | 64,862 |
Cost of sales | $ 11,692 | $ 11,188 | $ 34,299 | $ 33,481 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (6,261) | $ (3,855) | $ (24,521) | $ (8,252) |
Currency translation adjustments, net of income taxes | (11,796) | (328) | (26,791) | (5,635) |
Comprehensive loss | $ (18,057) | $ (4,183) | $ (51,312) | $ (13,887) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating activities: | ||
Net loss | $ (24,521) | $ (8,252) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 10,061 | 9,560 |
Stock-based compensation | 10,024 | 8,657 |
Provisions for bad debts, net of recoveries | 80 | 33 |
Loss on disposal of assets | 356 | 130 |
Provision for excess and obsolete inventory | 209 | 1,955 |
Deferred income tax expense (benefit) | 568 | (3,667) |
Decrease (Increase) in: | ||
Accounts receivable | 867 | 4,311 |
Inventories | 2,129 | (9,106) |
Prepaid expenses and other current assets | (14,566) | (2,935) |
(Decrease) Increase in: | ||
Accounts payable and accrued liabilities | (2,249) | (14,153) |
Income taxes payable | 1,008 | (1,847) |
Customer deposits | 588 | 1,966 |
Unearned service revenues | (2,710) | (2,223) |
Net cash used in operating activities | (18,156) | (15,571) |
Investing activities: | ||
Purchases of property and equipment | (4,978) | (4,845) |
Cash paid for technology development, patents and licenses | (9,154) | (1,933) |
Acquisition of business, net of cash acquired | (29,068) | (33,908) |
Net cash used in investing activities | (43,200) | (40,686) |
Financing activities: | ||
Payments on finance leases | (172) | (229) |
Payments for taxes related to net share settlement of equity awards | (1,584) | (4,137) |
Proceeds from issuance of stock related to stock option exercises | 0 | 5,835 |
Net cash (used in) provided by financing activities | (1,756) | 1,469 |
Effect of exchange rate changes on cash and cash equivalents | (10,343) | (5,031) |
Decrease in cash and cash equivalents | (73,455) | (59,819) |
Cash and cash equivalents, beginning of period | 121,989 | 185,633 |
Cash and cash equivalents, end of period | $ 48,534 | $ 125,814 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Common Stock in Treasury |
Beginning balance (in shares) at Dec. 31, 2020 | 17,990,707 | |||||
Beginning balance at Dec. 31, 2020 | $ 360,303 | $ 19 | $ 287,979 | $ 113,508 | $ (10,160) | $ (31,043) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (3,221) | (3,221) | ||||
Currency translation adjustment | (10,174) | (10,174) | ||||
Stock-based compensation | 2,094 | 2,094 | ||||
Common stock issued, net of shares withheld for employee taxes (in shares) | 163,457 | |||||
Common stock issued, net of shares withheld for employee taxes | 1,781 | 1,530 | 251 | |||
Ending balance (in shares) at Mar. 31, 2021 | 18,154,164 | |||||
Ending balance at Mar. 31, 2021 | 350,783 | $ 19 | 291,603 | 110,287 | (20,334) | (30,792) |
Beginning balance (in shares) at Dec. 31, 2020 | 17,990,707 | |||||
Beginning balance at Dec. 31, 2020 | 360,303 | $ 19 | 287,979 | 113,508 | (10,160) | (31,043) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (8,252) | |||||
Currency translation adjustment | (5,635) | |||||
Ending balance (in shares) at Sep. 30, 2021 | 18,202,416 | |||||
Ending balance at Sep. 30, 2021 | 356,771 | $ 20 | 298,082 | 105,256 | (15,795) | (30,792) |
Beginning balance (in shares) at Mar. 31, 2021 | 18,154,164 | |||||
Beginning balance at Mar. 31, 2021 | 350,783 | $ 19 | 291,603 | 110,287 | (20,334) | (30,792) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (1,176) | (1,176) | ||||
Currency translation adjustment | 4,867 | 4,867 | ||||
Stock-based compensation | 3,283 | 3,283 | ||||
Common stock issued, net of shares withheld for employee taxes (in shares) | 20,709 | |||||
Common stock issued, net of shares withheld for employee taxes | (395) | $ 1 | (396) | |||
Ending balance (in shares) at Jun. 30, 2021 | 18,174,873 | |||||
Ending balance at Jun. 30, 2021 | 357,362 | $ 20 | 294,490 | 109,111 | (15,467) | (30,792) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (3,855) | (3,855) | ||||
Currency translation adjustment | (328) | (328) | ||||
Stock-based compensation | 3,280 | 3,280 | ||||
Common stock issued, net of shares withheld for employee taxes (in shares) | 27,543 | |||||
Common stock issued, net of shares withheld for employee taxes | 312 | 312 | ||||
Ending balance (in shares) at Sep. 30, 2021 | 18,202,416 | |||||
Ending balance at Sep. 30, 2021 | $ 356,771 | $ 20 | 298,082 | 105,256 | (15,795) | (30,792) |
Beginning balance (in shares) at Dec. 31, 2021 | 18,205,636 | 18,205,636 | ||||
Beginning balance at Dec. 31, 2021 | $ 326,459 | $ 20 | 301,061 | 73,544 | (17,374) | (30,792) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (9,687) | (9,687) | ||||
Currency translation adjustment | (1,984) | (1,984) | ||||
Stock-based compensation | 2,867 | 2,867 | ||||
Common stock issued, net of shares withheld for employee taxes (in shares) | 55,041 | |||||
Common stock issued, net of shares withheld for employee taxes | (916) | (1,051) | 135 | |||
Ending balance (in shares) at Mar. 31, 2022 | 18,260,677 | |||||
Ending balance at Mar. 31, 2022 | $ 316,739 | $ 20 | 302,877 | 63,857 | (19,358) | (30,657) |
Beginning balance (in shares) at Dec. 31, 2021 | 18,205,636 | 18,205,636 | ||||
Beginning balance at Dec. 31, 2021 | $ 326,459 | $ 20 | 301,061 | 73,544 | (17,374) | (30,792) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (24,521) | |||||
Currency translation adjustment | $ (26,791) | |||||
Ending balance (in shares) at Sep. 30, 2022 | 18,776,936 | 18,766,936 | ||||
Ending balance at Sep. 30, 2022 | $ 299,464 | $ 20 | 325,244 | 49,022 | (44,165) | (30,657) |
Beginning balance (in shares) at Mar. 31, 2022 | 18,260,677 | |||||
Beginning balance at Mar. 31, 2022 | 316,739 | $ 20 | 302,877 | 63,857 | (19,358) | (30,657) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (8,574) | (8,574) | ||||
Currency translation adjustment | (13,011) | (13,011) | ||||
Stock-based compensation | 3,491 | 3,491 | ||||
Common stock issued, net of shares withheld for employee taxes (in shares) | 6,080 | |||||
Common stock issued, net of shares withheld for employee taxes | (249) | (249) | ||||
Ending balance (in shares) at Jun. 30, 2022 | 18,266,757 | |||||
Ending balance at Jun. 30, 2022 | 298,396 | $ 20 | 306,119 | 55,283 | (32,369) | (30,657) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (6,261) | (6,261) | ||||
Currency translation adjustment | (11,796) | (11,796) | ||||
Stock-based compensation | 3,666 | 3,666 | ||||
Common stock issued, net of shares withheld for employee taxes (in shares) | 4,617 | |||||
Common stock issued, net of shares withheld for employee taxes | (418) | (418) | ||||
Acquisition of business (In shares) | 495,562 | |||||
Acquisition of business | $ 15,878 | 15,878 | ||||
Ending balance (in shares) at Sep. 30, 2022 | 18,776,936 | 18,766,936 | ||||
Ending balance at Sep. 30, 2022 | $ 299,464 | $ 20 | $ 325,244 | $ 49,022 | $ (44,165) | $ (30,657) |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS FARO Technologies, Inc. and its subsidiaries (collectively “FARO,” the “Company,” “us,” “we” or “our”) design, develop, manufacture, market and support software driven, three-dimensional (“3D”) measurement, imaging, and realization solutions for the 3D metrology, architecture, engineering and construction (“AEC”), Operations and Maintenance (“O&M”) and public safety analytics markets. We enable our customers to capture, measure, manipulate, interact with and share 3D and 2D data from the physical world in a virtual environment and then translate this information back into the physical domain. Our broad technology set equips our customers with a wide range of 3D capture technologies that range from ultra-high accuracy laser-scanner-based technology to lower accuracy, photogrammetry-based technology. Our FARO suite of 3D products and software solutions are used for inspection of components and assemblies, rapid prototyping, reverse engineering, documenting large volume or structures in 3D, surveying and construction, construction management, assembly layout, machine guidance as well as in investigation and reconstructions of crash and crime scenes. We sell the majority of our solutions through a direct sales force, with an increasing volume being sold through an indirect channel across a range of industries including automotive, aerospace, metal and machine fabrication, surveying, architecture, engineering and construction, public safety forensics and other industries. COVID-19 and Impact On Our Business Our business is significantly vulnerable to the economic effects of pandemics and other public health crises, including the ongoing coronavirus (“COVID-19”) pandemic that has surfaced in virtually every country of our global operating footprint. During 2020, we experienced a significant decline in the demand for our products and services across all of our served markets as a result of the impact of the spread of COVID-19. During 2022, we continue to mitigate the ongoing impact of COVID-19 on our business results and we remain committed to taking actions to mitigate both the impact on the health and safety of our employees, as well as negative business effects resulting from demand disruption, material availability and potential production and shipment challenges, including, but not limited to, the following: • Operating our business with a focus on our employee health and safety, which includes minimizing travel, implementing remote work policies, maintaining employee distancing and enhancing the sanitation of all of our facilities; • Recommending that our employees receive vaccinations and vaccine boosters to help protect our colleagues, families, and communities; • Aggressively pursuing required raw materials to ensure continuity of supply and minimize material cost increases in collaboration with our third party manufacturer, Sanmina; • Aggressively pursuing alternative logistics paths when intermittent government-ordered shutdowns affect current logistics paths; • Monitoring our liquidity, disciplined inventory management, and scrutinizing our capital expenditures while executing our strategic plan; and • Continuously reviewing our financial strategy to enhance financial flexibility in these volatile financial markets. We continue to maintain a strong capital structure with a cash balance of $48.5 million and no debt as of September 30, 2022. We believe that our liquidity position is adequate to meet our projected needs in the reasonably foreseeable future. Future developments, such as the potential resurgence of COVID-19 in countries and new actions taken by governments in response to future resurgence, are highly uncertain. Therefore, the Company is not able to predict the extent to which the COVID-19 outbreak continues to impact the Company’s results of operations and financial conditions. |
Principles of Consolidation
Principles of Consolidation | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATIONOur condensed consolidated financial statements include the accounts of FARO Technologies, Inc. and its subsidiaries, all of which are wholly owned. All intercompany transactions and balances have been eliminated. The financial statements of our foreign subsidiaries are translated into U.S. dollars using exchange rates in effect at period-end for assets and liabilities and average exchange rates during each reporting period for results of operations. Adjustments resulting from financial statement translations are reflected as a separate component of accumulated other comprehensive loss. Foreign currency transaction gains and losses are included in net loss |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements and notes thereto have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements include all normal recurring accruals and adjustments considered necessary by management for a fair presentation in conformity with U.S. GAAP. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The condensed consolidated results of operations for the nine months ended September 30, 2022 are not necessarily indicative of results that may be expected for the year ending December 31, 2022 or any future period. The information included in this Quarterly Report on Form 10-Q, including the interim condensed consolidated financial statements and the accompanying notes, should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The accompanying December 31, 2021 condensed consolidated balance sheet has been derived from those audited consolidated financial statements. Stock-based compensation expense is allocated to the applicable departmental cost in our condensed consolidated financial statements. The following table summarizes total stock-based compensation expense for each of the line items on our condensed consolidated statements of operations: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Cost of sales Product $ 231 $ 147 $ 635 $ 435 Service 42 43 121 $ 35 Total cost of sales $ 273 $ 190 $ 756 $ 470 Operating expenses Selling, general and administrative $ 2,742 $ 2,581 $ 7,475 $ 6,789 Research and development 651 509 1,793 1,398 Total operating expenses $ 3,393 $ 3,090 $ 9,268 $ 8,187 |
Impact of Recently Issued Accou
Impact of Recently Issued Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Impact of Recently Adopted Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which amends and aims to simplify accounting disclosure requirements regarding a number of topics, including intraperiod tax allocation, accounting for deferred taxes when there are changes in consolidation of certain investments, tax basis step up in an acquisition and the application of effective rate changes during interim periods, amongst other improvements. We adopted ASU 2019-12 effective as of January 1, 2021, and the adoption of the new guidance did not have a material impact on our condensed consolidated financial statements. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES The following tables present our revenues by sales type as presented in our condensed consolidated statements of operations disaggregated by the timing of transfer of goods or services: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Product sales Product transferred to customers at a point in time $ 60,090 $ 53,536 $ 165,750 $ 161,080 Product transferred to customers over time 5,491 4,302 16,265 11,668 Total product sales $ 65,581 $ 57,838 $ 182,015 $ 172,748 For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Service sales Service transferred to customers at a point in time $ 8,651 $ 9,332 $ 25,973 $ 28,931 Service transferred to customers over time 11,100 11,999 33,918 35,931 Total service sales $ 19,751 $ 21,331 $ 59,891 $ 64,862 The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Total sales to external customers Americas (1) $ 38,732 $ 33,944 $ 110,077 $ 100,195 EMEA (1) 22,802 23,387 66,494 75,315 APAC (1) 23,798 21,838 65,335 62,100 $ 85,332 $ 79,169 $ 241,906 $ 237,610 (1) Regions represent North America and South America (the “Americas”); Europe, the Middle East, and Africa (“EMEA”); and Asia-Pacific (“APAC”). For revenue related to our measurement and imaging equipment and related software, we allocate the contract price to performance obligations based on our best estimate of the standalone selling price. We make this allocation estimate utilizing data from the sale of our applicable products and services to customers separately in similar circumstances. Revenue related to our measurement and imaging equipment and related software is generally recognized upon shipment from our facilities or when delivered to the customer location, as determined by the agreed upon shipping terms, at which time we are entitled to payment and title and control has passed to the customer. Software arrangements generally include short-term maintenance that is considered post-contract support (“PCS”), which is considered to be product transferred to the customer over time and a separate performance obligation. We generally establish a standalone sales price for this PCS component based on our maintenance renewal rate. Maintenance renewals are recognized on a straight-line basis over the term of the maintenance agreement. Payments for products and services are collected within a short period of time following transfer of control or commencement of delivery of services, as applicable. Further, customers frequently purchase extended hardware service contracts with the purchase of measurement equipment and related software. Hardware service contracts are considered a performance obligation when services are transferred to a customer over time, and, as such, we recognize revenue on a straight-line basis over the contractual term. Hardware service contracts include contract periods that extend between one month to three years. We capitalize commission expenses related to deliverables transferred to a customer over time and amortize such costs ratably over the term of the contract. As of September 30, 2022, the deferred cost asset related to deferred commissions was approximately $3.1 million. For classification purposes, $2.1 million and $1.0 million are comprised within the Prepaid expenses and other current assets and Other long-term assets, respectively, on our condensed consolidated balance sheet as of September 30, 2022 . As of December 31, 2021, the deferred cost asset related to deferred commissions was approximately $3.5 million. For classification purposes, $2.3 million and $1.2 million were comprised within the Prepaid expenses and other current assets and Other long-term assets, respectively, on our condensed consolidated balance sheet as of December 31, 2021. The unearned service revenue liabilities reported on our condensed consolidated balance sheets reflect the contract liabilities to satisfy the remaining performance obligations for extended warranties, subscription-based software and software maintenance. The current portion of unearned service revenues on our condensed consolidated balance sheets is what we expect to recognize as revenue within twelve months after the applicable balance sheet date relating to extended warranties, subscription-based software and software maintenance contract liabilities. The unearned service revenues less the current portion on our condensed consolidated balance sheets is what we expect to recognize as revenue extending beyond twelve months after the applicable balance sheet date relating to extended warranties, subscription-based software and software maintenance contract liabilities. Customer deposits on our condensed consolidated balance sheets represent customer prepayments on contracts for performance obligations that we must satisfy in the future to recognize the related contract revenue. These amounts are generally related to performance obligations which are delivered in less than 12 months. During the three and nine months ended September 30, 2022, we recognized $8.7 million and $29.1 million of revenue that was deferred on our condensed consolidated balance sheet as of December 31, 2021. During the three and nine months ended September 30, 2021, we recognized $7.6 million and $29.2 million of revenue that was deferred on our condensed consolidated balance sheet as of December 31, 2020. The nature of certain of our contracts gives rise to variable consideration, primarily related to an allowance for sales returns. We are required to estimate the contract asset related to sales returns and record a corresponding adjustment to Cost of Sales. Our allowance for sales returns for September 30, 2022 and September 30, 2021 was approximately $0.2 million, and $0.1 million, respectively. Shipping and handling fees billed to customers in a sales transaction are recorded in Product Sales and shipping and handling costs incurred are recorded in Cost of Sales. We exclude from Sales any value-added sales and other taxes that we collect concurrently with revenue-producing activities. |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE Accounts receivable consist of the following: As of September 30, 2022 As of December 31, 2021 Accounts receivable $ 77,591 $ 80,754 Allowance for credit losses (2,244) (2,231) Total $ 75,347 $ 78,523 Activity related to the allowance for credit losses was as follows: Nine Months Ended September 30, 2022 Beginning balance of the allowance for credit losses $ (2,231) Current period provision for expected credit losses, net of recoveries (80) Charge-offs of amounts previously expensed 67 Ending balance of the allowance for credit losses $ (2,244) |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories are stated at the lower of cost or net realizable value using the first-in first-out (FIFO) method. We have three principal categories of inventory: 1) manufactured product to be sold; 2) sales demonstration inventory - completed product used to support our sales force for demonstrations and held for sale; and 3) service inventory - completed product and parts used to support our service department and held for sale. Shipping and handling costs are classified as a component of Cost of Sales in our condensed consolidated statements of operations. Sales demonstration inventory is held by our sales representatives for up to three years, at which time it would be refurbished and transferred to finished goods as used equipment, stated at the lower of cost or net realizable value. We expect these refurbished units to remain in finished goods inventory and sold within 12 months at prices that produce reduced gross margins. Service inventory is used to provide a temporary replacement product to a customer covered by a premium warranty when the customer’s unit requires service or repair and as training equipment. Service inventory is available for sale; however, management does not expect service inventory to be sold within 12 months and, as such, classifies this inventory as a long-term asset. Service inventory that we utilize for training or repairs and which we deem as no longer available for sale is transferred to fixed assets at the lower of cost or net realizable value and depreciated over the remaining life, typically three years. Inventories consist of the following: As of September 30, 2022 As of December 31, 2021 Raw materials $ 30,440 $ 34,617 Finished goods 20,516 18,528 Inventories, net $ 50,956 $ 53,145 Service and sales demonstration inventory, net $ 28,249 $ 30,554 |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NET LOSS PER SHARE Basic net loss per share is computed by dividing net loss by the weighted average number of shares outstanding. Diluted net loss per share is computed by also considering the impact of potential common stock on both net loss and the weighted average number of shares outstanding. Our potential common stock consists of employee stock options, restricted stock units and market-based awards. Our potential common stock is included in the diluted earnings per share calculation when adding such potential common stock would not be anti-dilutive. Market-based awards are included in the computation of diluted earnings per share only to the extent that the underlying conditions (and any applicable market condition) (i) are satisfied as of the end of the reporting period or (ii) would be considered satisfied if the end of the reporting period were the end of the related contingency period and the result would be dilutive under the treasury stock method. When we report a net loss for the period presented, the calculation of diluted net loss per share excludes our potential common stock, as the effect would be anti-dilutive. For the three and nine months ended September 30, 2022, there were approximately 578,121 shares issuable upon the exercise of options, the vesting of time-based restricted stock and the contingent vesting of market-based restricted stock units that were excluded from the dilutive calculations, as they were anti-dilutive. For the three months and nine months ended September 30, 2021, there were approximately 393,995 issuable upon the exercise of options that were excluded from the dilutive calculations, as they were anti-dilutive. A reconciliation of the number of common shares used in the calculation of basic and diluted net loss per share is presented below: Three Months Ended September 30, 2022 September 30, 2021 Shares Per-Share Shares Per-Share Basic net loss per share 18,436,615 $ (0.34) 18,194,960 $ (0.21) Effect of dilutive securities — — — — Diluted net loss per share 18,436,615 $ (0.34) 18,194,960 $ (0.21) Nine Months Ended September 30, 2022 September 30, 2021 Shares Per-Share Shares Per-Share Basic net loss per share 18,336,537 $ (1.34) 18,166,930 $ (0.45) Effect of dilutive securities — — — — Diluted net loss per share 18,336,537 $ (1.34) 18,166,930 $ (0.45) |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities consist of the following: As of September 30, 2022 As of December 31, 2021 Accrued compensation and benefits $ 15,310 $ 15,723 Accrued restructuring costs 520 3,919 Accrued warranties 2,192 1,880 Professional and legal fees 1,386 2,053 Taxes other than income 194 3,674 Other accrued liabilities 3,279 959 Total accrued liabilities $ 22,881 $ 28,208 Activity related to accrued warranties was as follows: Nine Months Ended September 30, 2022 September 30, 2021 Balance, beginning of period $ 1,880 $ 1,683 Provision for warranty expense 2,548 1,941 Fulfillment of warranty obligations (2,236) (1,951) Balance, end of period $ 2,192 $ 1,673 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Our financial instruments include cash and cash equivalents, accounts receivable, customer deposits, accounts payable and accrued liabilities. The carrying amounts of such financial instruments approximate their fair value due to the short-term nature of these instruments. Liabilities measured at fair value on a recurring basis are categorized in the tables below based upon the lowest level of significant input to the valuations: As of September 30, 2022 Level 1 Level 2 Level 3 Liabilities: Contingent consideration (1) $ — $ — $ 881 Total $ — $ — $ 881 As of December 31, 2021 Level 1 Level 2 Level 3 Liabilities: Contingent consideration (1) $ — $ — $ 1,028 Total $ — $ — $ 1,028 (1) Contingent consideration liability represents arrangements to pay the former owners of certain companies we acquired based on the attainment of future product release milestones and is reported in Other long-term liabilities. We use a probability-weighted discounted cash flow model to estimate the fair value of contingent consideration liabilities. These probability weightings are developed internally and assessed on a quarterly basis. The remaining undiscounted maximum payment under these arrangements was $1.0 million as of September 30, 2022. We expect to make payments earned by former owners under these arrangements on August 31, 2023. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURING In the first quarter of 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. Key activities under the Restructuring Plan include a continued focus on efficiency and cost-saving efforts, which included a planned decrease of total headcount upon the completion of the Restructuring Plan. On July 15, 2021, we entered into a manufacturing services agreement (the “Agreement”) with Sanmina Corporation (Nasdaq: SANM) (“Sanmina”), in connection with the Restructuring Plan. Under the Agreement, Sanmina will provide manufacturing services for the Company’s measurement device products previously manufactured by the Company at the Company’s Lake Mary, Florida, Exton, Pennsylvania, and Stuttgart, Germany manufacturing sites. This phased transition to a Sanmina production facility was completed at the beginning of the third quarter of 2022 as part of our cost reduction initiative. We are currently evaluating these manufacturing sites with the intention to reduce our leased floor space. However, all of these facilities are mixed-use spaces shared with our service, research and development, or sales teams who continue to use these spaces. The Company, in collaboration with third party lessors and architectural resources, intends to conduct studies over the feasibility of abandoning or demising leased floor space against our current needs. Our current needs continue to include access to existing spaces previously constructed to closely monitor temperature and vibration for our service and research and development teams. The conclusion of this evaluation and any subsequent approval to abandon or reduce these leased spaces would be considered as a change in the manner of the use of these corresponding assets, and thereby will be evaluated for impairment. We expect to complete this evaluation before the first half of fiscal year 2023. As of September 30, 2022, the remaining value of leasehold improvements for these facilities is approximately $3 million and a portion of this may be impaired, if the Company decides to reduce or abandon the leased space. Separately, we may also incur additional charges for the modification of leases for these facilities. In connection with the Restructuring Plan, we paid $5.9 million during the nine months ended September 30, 2022, primarily consisting of severance and related benefits. Since the approval of the Restructuring Plan, we have paid $24.8 million, primarily consisting of severance and related benefits. Activity related to the accrued restructuring charge and cash payments during the nine months ended September 30, 2022 and September 30, 2021 was as follows: Severance and other benefits Professional fees and other related charges Total Balance at December 31, 2021 $ 3,442 $ 477 $ 3,919 Additions charged to expense 1,439 1,072 2,511 Cash payments (4,619) (1,291) (5,910) Balance at September 30, 2022 $ 262 $ 258 $ 520 Balance at December 31, 2020 $ 1,481 $ 867 $ 2,348 Additions charged to expense 2,515 1,164 3,679 Cash payments (2,784) (1,750) (4,534) Balance at September 30, 2021 $ 1,212 $ 281 $ 1,493 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Purchase Commitments — We enter into purchase commitments for products and services in the ordinary course of business. These purchases generally cover production requirements for 60 to 120 days as well as materials necessary to service customer units through the product lifecycle and for warranty commitments. As of September 30, 2022, we had approximately $46.2 million in purchase commitments that are expected to be delivered within the next 12 months. To ensure adequate component availability, as of September 30, 2022, we also had $6.6 million in long-term commitments for purchases to be delivered after 12 months. Legal Proceedings — We are not involved in any legal proceedings, including routine litigation arising in the normal course of business, that we believe will have a material adverse effect on our business, financial condition or results of operations. U.S. Government Contracting Matter — We have sold our products and related services to the U.S. Government (the “Government”) under General Services Administration (“GSA”) Federal Supply Schedule contracts (the “GSA Contracts”) since 2002 and are currently selling our products and related services to the Government under two such GSA Contracts. Each GSA Contract is subject to extensive legal and regulatory requirements and includes, among other provisions, a price reduction clause (the “Price Reduction Clause”), which generally requires us to reduce the prices billed to the Government under the GSA Contracts to correspond to the lowest prices billed to certain benchmark customers. Late in the fourth quarter of 2018, during an internal review we preliminarily determined that certain of our pricing practices may have resulted in the Government being overcharged under the Price Reduction Clauses of the GSA Contracts (the “GSA Matter”). As a result, we performed remediation efforts, including but not limited to, the identification of additional controls and procedures to ensure future compliance with the pricing and other requirements of the GSA Contracts. We also retained outside legal counsel and forensic accountants to assist with these efforts and to conduct a comprehensive review of our pricing and other practices under the GSA Contracts (the “Review”). On February 14, 2019, we reported the GSA Matter to the GSA and its Office of Inspector General. Effective as of February 25, 2021, as a result of the review, we entered into a settlement agreement with the GSA. Pursuant to the settlement agreement, we agreed to, among other things, pay to the GSA $12.3 million in full and final satisfaction of any and all claims, causes of actions, appeals and the like, including damages, costs, attorney’s fees and interest arising under or related to the GSA Matter. As of September 30, 2022, we no longer have any outstanding liability related to this matter. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
LEASES | LEASES We have operating and finance leases for manufacturing facilities, corporate offices, research and development facilities, sales and training facilities, vehicles, and certain equipment under which we assume the role of lessee. We do not lease assets as a lessor. Our leases have remaining lease terms of less than one year to approximately ten years, some of which include options to extend the leases for up to fifteen years, and some of which include options to terminate the leases within three months. We do not participate in any material subleasing. We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use (“ROU”) asset, Lease liability, and Lease liability - less current portion in our condensed consolidated balance sheets. Finance leases are included in Property and equipment, net, Lease liability, and Lease liability - less current portion in our condensed consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized on the commencement date of the lease based on the present value of lease payments over the lease term. Variable lease payments that depend on an index or rate include the variable portion when calculating ROU assets and lease liabilities. Variable lease payments that do not depend on an index or rate are expensed as incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available on the commencement date of the lease to determine the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU assets also include any lease payments made and lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option at the time the lease is commenced. Lease expense for lease payments is recognized on a straight-line basis over the lease term. While we have lease agreements with lease and non-lease components, we account for the lease and non-lease components as a single lease component. The components of lease expense were as follows: Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Nine Months Ended September 30, 2022 Nine Months Ended Operating lease cost $ 1,805 $ 2,010 $ 5,453 $ 5,901 Finance lease cost: Amortization of ROU assets 18 60 $ 96 $ 221 Interest on lease liabilities 4 5 $ 15 $ 14 Total finance lease cost $ 22 $ 65 $ 111 $ 235 We recognize lease payments made for short-term leases where terms are 12 months or less as the payments are incurred. Our short-term lease costs for the three months ended September 30, 2022 and September 30, 2021 were both less than $0.1 million. Our short-term lease costs for the nine months ended September 30, 2022 and September 30, 2021 were both $0.1 million. Supplemental balance sheet information related to leases was as follows: As of As of September 30, 2022 December 31, 2021 Operating leases: Operating lease right-of-use assets $ 18,404 $ 22,543 Current operating lease liabilities $ 5,363 $ 5,601 Operating lease liabilities - less current portion 14,225 18,538 Total operating lease liabilities $ 19,588 $ 24,139 Finance leases: Property and equipment, at cost $ 1,415 $ 1,380 Accumulated depreciation (1,312) (1,222) Property and equipment, net $ 103 $ 158 Current finance lease liabilities $ 169 $ 137 Finance lease liabilities - less current portion 119 110 Total finance lease liabilities $ 288 $ 247 Weighted Average Remaining Lease Term (in years): Operating leases 5.01 5.69 Finance leases 1.97 2.12 Weighted Average Discount Rate: Operating leases 5.67 % 5.67 % Finance leases 5.35 % 5.02 % Supplemental cash flow information related to leases was as follows: Nine Months Ended Nine Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,686 $ 5,874 Operating cash flows from finance leases $ 15 $ 14 Financing cash flows from finance leases $ 172 $ 229 ROU assets obtained in exchange for lease obligations: Operating leases $ 808 $ 1,209 Maturities of lease liabilities are as follows: Year Ending December 31, Operating leases Finance leases 2022 (excluding the first 6 months) $ 1,673 $ 49 2023 6,105 170 2024 4,826 61 2025 3,074 12 2026 2,075 8 Thereafter 4,984 2 Total lease payments $ 22,737 $ 302 Less imputed interest (3,149) (14) Total $ 19,588 $ 288 |
LEASES | LEASES We have operating and finance leases for manufacturing facilities, corporate offices, research and development facilities, sales and training facilities, vehicles, and certain equipment under which we assume the role of lessee. We do not lease assets as a lessor. Our leases have remaining lease terms of less than one year to approximately ten years, some of which include options to extend the leases for up to fifteen years, and some of which include options to terminate the leases within three months. We do not participate in any material subleasing. We determine if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use (“ROU”) asset, Lease liability, and Lease liability - less current portion in our condensed consolidated balance sheets. Finance leases are included in Property and equipment, net, Lease liability, and Lease liability - less current portion in our condensed consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized on the commencement date of the lease based on the present value of lease payments over the lease term. Variable lease payments that depend on an index or rate include the variable portion when calculating ROU assets and lease liabilities. Variable lease payments that do not depend on an index or rate are expensed as incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available on the commencement date of the lease to determine the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU assets also include any lease payments made and lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option at the time the lease is commenced. Lease expense for lease payments is recognized on a straight-line basis over the lease term. While we have lease agreements with lease and non-lease components, we account for the lease and non-lease components as a single lease component. The components of lease expense were as follows: Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Nine Months Ended September 30, 2022 Nine Months Ended Operating lease cost $ 1,805 $ 2,010 $ 5,453 $ 5,901 Finance lease cost: Amortization of ROU assets 18 60 $ 96 $ 221 Interest on lease liabilities 4 5 $ 15 $ 14 Total finance lease cost $ 22 $ 65 $ 111 $ 235 We recognize lease payments made for short-term leases where terms are 12 months or less as the payments are incurred. Our short-term lease costs for the three months ended September 30, 2022 and September 30, 2021 were both less than $0.1 million. Our short-term lease costs for the nine months ended September 30, 2022 and September 30, 2021 were both $0.1 million. Supplemental balance sheet information related to leases was as follows: As of As of September 30, 2022 December 31, 2021 Operating leases: Operating lease right-of-use assets $ 18,404 $ 22,543 Current operating lease liabilities $ 5,363 $ 5,601 Operating lease liabilities - less current portion 14,225 18,538 Total operating lease liabilities $ 19,588 $ 24,139 Finance leases: Property and equipment, at cost $ 1,415 $ 1,380 Accumulated depreciation (1,312) (1,222) Property and equipment, net $ 103 $ 158 Current finance lease liabilities $ 169 $ 137 Finance lease liabilities - less current portion 119 110 Total finance lease liabilities $ 288 $ 247 Weighted Average Remaining Lease Term (in years): Operating leases 5.01 5.69 Finance leases 1.97 2.12 Weighted Average Discount Rate: Operating leases 5.67 % 5.67 % Finance leases 5.35 % 5.02 % Supplemental cash flow information related to leases was as follows: Nine Months Ended Nine Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,686 $ 5,874 Operating cash flows from finance leases $ 15 $ 14 Financing cash flows from finance leases $ 172 $ 229 ROU assets obtained in exchange for lease obligations: Operating leases $ 808 $ 1,209 Maturities of lease liabilities are as follows: Year Ending December 31, Operating leases Finance leases 2022 (excluding the first 6 months) $ 1,673 $ 49 2023 6,105 170 2024 4,826 61 2025 3,074 12 2026 2,075 8 Thereafter 4,984 2 Total lease payments $ 22,737 $ 302 Less imputed interest (3,149) (14) Total $ 19,588 $ 288 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES For the three months ended September 30, 2022, we recorded an income tax expense of $0.6 million compared with an income tax benefit of $1.7 million for the three months ended September 30, 2021. Our effective tax rate was 10.3% for the three months ended September 30, 2022 compared with 30.1% in the prior year period. The tax rate for 2022 reflects a tax expense on a pre-tax loss and the tax rate for 2021 reflects a tax benefit on a pre-tax loss. The change in our income tax expense and our effective tax rate were primarily due to the impact of the capitalization of research and development (“R&D”) expenditures for income tax purposes. The Tax Cuts and Jobs Act (the “Act”) requires the capitalization and amortization of R&D costs incurred after December 31, 2021. We have considered the effects of the Act on the forecasted domestic cash tax payments for the year ending December 31, 2022. Our entity in the United States remains in a full valuation allowance position, hence we were not able to recognize the tax benefits associated with the capitalization of these R&D expenditures. Our quarterly estimate of our annual effective tax rate, and our quarterly provision for income tax (benefit) expense, are subject to significant variation due to numerous factors, including variability in accurately predicting our pretax and taxable income or loss and the mix of jurisdictions to which they relate, as well as the amount of pretax income or loss recognized during the quarter. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | BUSINESS COMBINATIONS On September 1, 2022, we completed the acquisition of UK-based GeoSLAM, a leading provider of mobile scanning solutions with proprietary high-productivity simultaneous localization and mapping (SLAM) software. We believe this acquisition enables the Company to provide mobile scanning solutions using SLAM software to create 3D models for use in Digital Twin applications. We believe these newly acquired capture technologies integrate into our 4D digital reality-based SaaS offering that will allow customers to access multiple 4D data sources for visualization and analysis through a single user experience. We acquired all voting equity interests of GeoSLAM held by the previous owners. The results of GeoSLAM’s operations as of and after the date of acquisition have been included in our condensed consolidated financial statements as of and for the period ended September 30, 2022. The total purchase price included $29 million of cash paid, net of cash acquired and a non-cash payment of 495,562 shares of FARO stock valued at $15.9 million that is subject to customary lock-up provisions for a total purchase price of $44.9 million. The acquisition of GeoSLAM constitutes a business combination as defined by ASC Topic 805, Business Combinations . Accordingly, the assets acquired and liabilities assumed were recorded at their fair values on the date of acquisition. The purchase price allocations below represent our preliminary determination of the fair value of the assets acquired and liabilities assumed for the acquisitions. Following is a preliminary summary of our allocations of the purchase price to the fair values of the assets acquired and liabilities assumed as of the date of the acquisition: Fair Value (Preliminary) Tangible assets acquired: Accounts receivable 2,452 Inventory 6,576 Property, plant and equipment, net 270 Other assets 505 Total assets acquired 9,803 Liabilities assumed: Accounts payable and accrued liabilities (2,187) Deferred revenue (1,282) Other current liabilities (289) Total liabilities assumed (3,758) Intangible assets 18,610 Net assets acquired 24,655 Deferred income tax liability 4,472 Goodwill 24,763 Purchase price paid, net of cash acquired $ 44,946 The goodwill arising from the acquisition consists largely of the expected synergies from combining operations as well as the value of the workforce. This goodwill is not tax deductible. Acquisition and integration costs are not included as components of consideration transferred, but are recorded as expense in the period in which such costs are incurred. As of September 30, 2022, we have incurred $2.4 million of acquisition or integration costs for the GeoSLAM acquisition. Accounts receivable acquired represent a gross contractual amount of $2.6 million of which we expect to collect $2.5 million. We believe that the fair value of these receivables approximates the net book value given their short term nature. Pro forma financial results for GeoSLAM have not been presented because the effects of these transactions, individually and in the aggregate, were not material to our condensed consolidated financial results. Following are the details of the preliminary purchase price allocated to the intangible assets acquired for the GeoSLAM acquisition: Amount Weighted Average Life (Years) Brand $ 466 3 Technology 3,828 5 Customer relationships 14,316 15 Fair value of intangible assets acquired $ 18,610 13 |
Principles of Consolidation (Po
Principles of Consolidation (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | Our condensed consolidated financial statements include the accounts of FARO Technologies, Inc. and its subsidiaries, all of which are wholly owned. |
Foreign Currency Translation | All intercompany transactions and balances have been eliminated. The financial statements of our foreign subsidiaries are translated into U.S. dollars using exchange rates in effect at period-end for assets and liabilities and average exchange rates during each reporting period for results of operations. Adjustments resulting from financial statement translations are reflected as a separate component of accumulated other comprehensive loss. Foreign currency transaction gains and losses are included in net loss |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements and notes thereto have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements include all normal recurring accruals and adjustments considered necessary by management for a fair presentation in conformity with U.S. GAAP. |
Use of Estimates | Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. |
Impact of Recently Adopted Accounting Standards | Impact of Recently Adopted Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which amends and aims to simplify accounting disclosure requirements regarding a number of topics, including intraperiod tax allocation, accounting for deferred taxes when there are changes in consolidation of certain investments, tax basis step up in an acquisition and the application of effective rate changes during interim periods, amongst other improvements. We adopted ASU 2019-12 effective as of January 1, 2021, and the adoption of the new guidance did not have a material impact on our condensed consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Asset and Contract Liabilities from Contracts with Customers, which intends to simplify the accounting for acquired revenue contracts with customers in a business combination and to also remove inconsistencies in this topic related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. ASU No. 2021-08 allows an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in a similar manner to how they are recorded on the acquiree’s financial statements at book value. Early adoption is permitted and we early adopted ASU No. 2021-08 in the fourth quarter of 2021. As a result of the early adoption of ASU No.2021-08, we recorded the deferred revenue associated with the acquisition of Holobuilder in 2021 at its book value of approximately $4.0 million. Further, we recorded the deferred revenue associated with the acquisition of GeoSLAM in 2022 at its book value of approximately $1.3 million. |
Inventory | Inventories are stated at the lower of cost or net realizable value using the first-in first-out (FIFO) method. We have three principal categories of inventory: 1) manufactured product to be sold; 2) sales demonstration inventory - completed product used to support our sales force for demonstrations and held for sale; and 3) service inventory - completed product and parts used to support our service department and held for sale. Shipping and handling costs are classified as a component of Cost of Sales in our condensed consolidated statements of operations. Sales demonstration inventory is held by our sales representatives for up to three years, at which time it would be refurbished and transferred to finished goods as used equipment, stated at the lower of cost or net realizable value. We expect these refurbished units to remain in finished goods inventory and sold within 12 months at prices that produce reduced gross margins. Service inventory is used to provide a temporary replacement product to a customer covered by a premium warranty when the customer’s unit requires service or repair and as training equipment. Service inventory is available for sale; however, management does not expect service inventory to be sold within 12 months and, as such, classifies this inventory as a long-term asset. Service inventory that we utilize for training or repairs and which we deem as no longer available for sale is transferred to fixed assets at the lower of cost or net realizable value and depreciated over the remaining life, typically three years. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount | Stock-based compensation expense is allocated to the applicable departmental cost in our condensed consolidated financial statements. The following table summarizes total stock-based compensation expense for each of the line items on our condensed consolidated statements of operations: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Cost of sales Product $ 231 $ 147 $ 635 $ 435 Service 42 43 121 $ 35 Total cost of sales $ 273 $ 190 $ 756 $ 470 Operating expenses Selling, general and administrative $ 2,742 $ 2,581 $ 7,475 $ 6,789 Research and development 651 509 1,793 1,398 Total operating expenses $ 3,393 $ 3,090 $ 9,268 $ 8,187 |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following tables present our revenues by sales type as presented in our condensed consolidated statements of operations disaggregated by the timing of transfer of goods or services: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Product sales Product transferred to customers at a point in time $ 60,090 $ 53,536 $ 165,750 $ 161,080 Product transferred to customers over time 5,491 4,302 16,265 11,668 Total product sales $ 65,581 $ 57,838 $ 182,015 $ 172,748 For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Service sales Service transferred to customers at a point in time $ 8,651 $ 9,332 $ 25,973 $ 28,931 Service transferred to customers over time 11,100 11,999 33,918 35,931 Total service sales $ 19,751 $ 21,331 $ 59,891 $ 64,862 The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Total sales to external customers Americas (1) $ 38,732 $ 33,944 $ 110,077 $ 100,195 EMEA (1) 22,802 23,387 66,494 75,315 APAC (1) 23,798 21,838 65,335 62,100 $ 85,332 $ 79,169 $ 241,906 $ 237,610 (1) Regions represent North America and South America (the “Americas”); Europe, the Middle East, and Africa (“EMEA”); and Asia-Pacific (“APAC”). |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consist of the following: As of September 30, 2022 As of December 31, 2021 Accounts receivable $ 77,591 $ 80,754 Allowance for credit losses (2,244) (2,231) Total $ 75,347 $ 78,523 |
Financing Receivable, Allowance for Credit Loss | Activity related to the allowance for credit losses was as follows: Nine Months Ended September 30, 2022 Beginning balance of the allowance for credit losses $ (2,231) Current period provision for expected credit losses, net of recoveries (80) Charge-offs of amounts previously expensed 67 Ending balance of the allowance for credit losses $ (2,244) |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consist of the following: As of September 30, 2022 As of December 31, 2021 Raw materials $ 30,440 $ 34,617 Finished goods 20,516 18,528 Inventories, net $ 50,956 $ 53,145 Service and sales demonstration inventory, net $ 28,249 $ 30,554 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Reconciliation of Number of Common Shares Used in Calculation of Basic and Diluted Earnings Per Share (EPS) | A reconciliation of the number of common shares used in the calculation of basic and diluted net loss per share is presented below: Three Months Ended September 30, 2022 September 30, 2021 Shares Per-Share Shares Per-Share Basic net loss per share 18,436,615 $ (0.34) 18,194,960 $ (0.21) Effect of dilutive securities — — — — Diluted net loss per share 18,436,615 $ (0.34) 18,194,960 $ (0.21) Nine Months Ended September 30, 2022 September 30, 2021 Shares Per-Share Shares Per-Share Basic net loss per share 18,336,537 $ (1.34) 18,166,930 $ (0.45) Effect of dilutive securities — — — — Diluted net loss per share 18,336,537 $ (1.34) 18,166,930 $ (0.45) |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following: As of September 30, 2022 As of December 31, 2021 Accrued compensation and benefits $ 15,310 $ 15,723 Accrued restructuring costs 520 3,919 Accrued warranties 2,192 1,880 Professional and legal fees 1,386 2,053 Taxes other than income 194 3,674 Other accrued liabilities 3,279 959 Total accrued liabilities $ 22,881 $ 28,208 |
Schedule of Activity Related to Accrued Warranties | Activity related to accrued warranties was as follows: Nine Months Ended September 30, 2022 September 30, 2021 Balance, beginning of period $ 1,880 $ 1,683 Provision for warranty expense 2,548 1,941 Fulfillment of warranty obligations (2,236) (1,951) Balance, end of period $ 2,192 $ 1,673 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Liabilities Measured at Fair Value on a Recurring Basis | Liabilities measured at fair value on a recurring basis are categorized in the tables below based upon the lowest level of significant input to the valuations: As of September 30, 2022 Level 1 Level 2 Level 3 Liabilities: Contingent consideration (1) $ — $ — $ 881 Total $ — $ — $ 881 As of December 31, 2021 Level 1 Level 2 Level 3 Liabilities: Contingent consideration (1) $ — $ — $ 1,028 Total $ — $ — $ 1,028 (1) Contingent consideration liability represents arrangements to pay the former owners of certain companies we acquired based on the attainment of future product release milestones and is reported in Other long-term liabilities. We use a probability-weighted discounted cash flow model to estimate the fair value of contingent consideration liabilities. These probability weightings are developed internally and assessed on a quarterly basis. The remaining undiscounted maximum payment under these arrangements was $1.0 million as of September 30, 2022. We expect to make payments earned by former owners under these arrangements on August 31, 2023. |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | Activity related to the accrued restructuring charge and cash payments during the nine months ended September 30, 2022 and September 30, 2021 was as follows: Severance and other benefits Professional fees and other related charges Total Balance at December 31, 2021 $ 3,442 $ 477 $ 3,919 Additions charged to expense 1,439 1,072 2,511 Cash payments (4,619) (1,291) (5,910) Balance at September 30, 2022 $ 262 $ 258 $ 520 Balance at December 31, 2020 $ 1,481 $ 867 $ 2,348 Additions charged to expense 2,515 1,164 3,679 Cash payments (2,784) (1,750) (4,534) Balance at September 30, 2021 $ 1,212 $ 281 $ 1,493 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Lease Cost and Supplemental Cash Flow Information Related to Leases | The components of lease expense were as follows: Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Nine Months Ended September 30, 2022 Nine Months Ended Operating lease cost $ 1,805 $ 2,010 $ 5,453 $ 5,901 Finance lease cost: Amortization of ROU assets 18 60 $ 96 $ 221 Interest on lease liabilities 4 5 $ 15 $ 14 Total finance lease cost $ 22 $ 65 $ 111 $ 235 Supplemental cash flow information related to leases was as follows: Nine Months Ended Nine Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,686 $ 5,874 Operating cash flows from finance leases $ 15 $ 14 Financing cash flows from finance leases $ 172 $ 229 ROU assets obtained in exchange for lease obligations: Operating leases $ 808 $ 1,209 |
Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: As of As of September 30, 2022 December 31, 2021 Operating leases: Operating lease right-of-use assets $ 18,404 $ 22,543 Current operating lease liabilities $ 5,363 $ 5,601 Operating lease liabilities - less current portion 14,225 18,538 Total operating lease liabilities $ 19,588 $ 24,139 Finance leases: Property and equipment, at cost $ 1,415 $ 1,380 Accumulated depreciation (1,312) (1,222) Property and equipment, net $ 103 $ 158 Current finance lease liabilities $ 169 $ 137 Finance lease liabilities - less current portion 119 110 Total finance lease liabilities $ 288 $ 247 Weighted Average Remaining Lease Term (in years): Operating leases 5.01 5.69 Finance leases 1.97 2.12 Weighted Average Discount Rate: Operating leases 5.67 % 5.67 % Finance leases 5.35 % 5.02 % |
Operating Lease, Liability, Maturity | Maturities of lease liabilities are as follows: Year Ending December 31, Operating leases Finance leases 2022 (excluding the first 6 months) $ 1,673 $ 49 2023 6,105 170 2024 4,826 61 2025 3,074 12 2026 2,075 8 Thereafter 4,984 2 Total lease payments $ 22,737 $ 302 Less imputed interest (3,149) (14) Total $ 19,588 $ 288 |
Finance Lease, Liability, Maturity | Maturities of lease liabilities are as follows: Year Ending December 31, Operating leases Finance leases 2022 (excluding the first 6 months) $ 1,673 $ 49 2023 6,105 170 2024 4,826 61 2025 3,074 12 2026 2,075 8 Thereafter 4,984 2 Total lease payments $ 22,737 $ 302 Less imputed interest (3,149) (14) Total $ 19,588 $ 288 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Fair Values of Assets Acquired and Liabilities Assumed for Acquisitions | Following is a preliminary summary of our allocations of the purchase price to the fair values of the assets acquired and liabilities assumed as of the date of the acquisition: Fair Value (Preliminary) Tangible assets acquired: Accounts receivable 2,452 Inventory 6,576 Property, plant and equipment, net 270 Other assets 505 Total assets acquired 9,803 Liabilities assumed: Accounts payable and accrued liabilities (2,187) Deferred revenue (1,282) Other current liabilities (289) Total liabilities assumed (3,758) Intangible assets 18,610 Net assets acquired 24,655 Deferred income tax liability 4,472 Goodwill 24,763 Purchase price paid, net of cash acquired $ 44,946 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | Following are the details of the preliminary purchase price allocated to the intangible assets acquired for the GeoSLAM acquisition: Amount Weighted Average Life (Years) Brand $ 466 3 Technology 3,828 5 Customer relationships 14,316 15 Fair value of intangible assets acquired $ 18,610 13 |
Description of Business (Detail
Description of Business (Details) | Sep. 30, 2022 USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Cash | $ 48,500,000 |
Debt | $ 0 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Total cost of sales | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 273 | $ 190 | $ 756 | $ 470 |
Total operating expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 3,393 | 3,090 | 9,268 | 8,187 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 2,742 | 2,581 | 7,475 | 6,789 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 651 | 509 | 1,793 | 1,398 |
Product | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 231 | 147 | 635 | 435 |
Service | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 42 | $ 43 | $ 121 | $ 35 |
Impact of Recently Issued Acc_2
Impact of Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Revenue recognized | $ 8.7 | $ 7.6 | $ 29.1 | $ 29.2 | |
Accounting Standards Update 2021 08 Member | Holobuilder | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Revenue recognized | $ 4 | ||||
Accounting Standards Update 2021-08 | GeoSLAM | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Revenue recognized | $ 1.3 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 85,332 | $ 79,169 | $ 241,906 | $ 237,610 |
Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 38,732 | 33,944 | 110,077 | 100,195 |
EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 22,802 | 23,387 | 66,494 | 75,315 |
APAC | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 23,798 | 21,838 | 65,335 | 62,100 |
Product sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 65,581 | 57,838 | 182,015 | 172,748 |
Product sales | Product transferred to customers at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 60,090 | 53,536 | 165,750 | 161,080 |
Product sales | Product transferred to customers over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 5,491 | 4,302 | 16,265 | 11,668 |
Service sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 19,751 | 21,331 | 59,891 | 64,862 |
Service sales | Product transferred to customers at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 8,651 | 9,332 | 25,973 | 28,931 |
Service sales | Product transferred to customers over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 11,100 | $ 11,999 | $ 33,918 | $ 35,931 |
Revenues - Additional Informati
Revenues - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||||
Recognized service revenue | $ 8.7 | $ 7.6 | $ 29.1 | $ 29.2 | |
Refund liability | 0.2 | $ 0.1 | 0.2 | $ 0.1 | |
Commissions | |||||
Disaggregation of Revenue [Line Items] | |||||
Capitalized contract cost, net | 3.1 | 3.1 | $ 3.5 | ||
Commissions | Prepaid expenses and other current assets | |||||
Disaggregation of Revenue [Line Items] | |||||
Capitalized contract cost, net | 2.1 | 2.1 | 2.3 | ||
Commissions | Other long-term assets | |||||
Disaggregation of Revenue [Line Items] | |||||
Capitalized contract cost, net | $ 1 | $ 1 | $ 1.2 | ||
Minimum | |||||
Disaggregation of Revenue [Line Items] | |||||
Extended product warranty term | 1 month | ||||
Maximum | |||||
Disaggregation of Revenue [Line Items] | |||||
Extended product warranty term | 3 years |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Accounts receivable | $ 77,591 | $ 80,754 |
Allowance for credit losses | (2,244) | (2,231) |
Total | $ 75,347 | $ 78,523 |
Accounts Receivable - Allowance
Accounts Receivable - Allowance For Credit Loss (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Beginning balance of the allowance for credit losses | $ (2,231) |
Current period provision for expected credit losses, net of recoveries | (80) |
Charge-offs of amounts previously expensed | 67 |
Ending balance of the allowance for credit losses | $ (2,244) |
Inventories - Additional Inform
Inventories - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2022 category | |
Property, Plant and Equipment [Line Items] | |
Inventory categories | 3 |
Refurbished demonstration inventory selling period (in months) | 12 months |
Sales Inventory | |
Property, Plant and Equipment [Line Items] | |
Demonstration inventory shelf life (in years) | 3 years |
Service Inventory | |
Property, Plant and Equipment [Line Items] | |
Service inventory selling period (in months) | 12 months |
Inventory, remaining useful life (in years) | 3 years |
Inventories - Schedule of Inven
Inventories - Schedule of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 30,440 | $ 34,617 |
Finished goods | 20,516 | 18,528 |
Inventories, net | 50,956 | 53,145 |
Service and sales demonstration inventory, net | $ 28,249 | $ 30,554 |
Net Loss Per Share - Additional
Net Loss Per Share - Additional Information (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities (in shares) | 578,121 | 393,995 | 578,121 | 393,995 |
Net Loss Per Share - Reconcilia
Net Loss Per Share - Reconciliation of Number of Common Shares Used in Calculation of Basic and Diluted Earnings Per Share (EPS) (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Basic net loss per share (in shares) | 18,436,615 | 18,194,960 | 18,336,537 | 18,166,930 |
Effect of dilutive securities (in shares) | 0 | 0 | 0 | 0 |
Diluted net loss (in shares) | 18,436,615 | 18,194,960 | 18,336,537 | 18,166,930 |
Basic net loss (in dollars per share) | $ (0.34) | $ (0.21) | $ (1.34) | $ (0.45) |
Effect of dilutive securities (in dollars per share) | 0 | 0 | 0 | 0 |
Diluted net loss (in dollars per share) | $ (0.34) | $ (0.21) | $ (1.34) | $ (0.45) |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||||
Accrued compensation and benefits | $ 15,310 | $ 15,723 | ||
Accrued restructuring costs | 520 | 3,919 | ||
Accrued warranties | 2,192 | 1,880 | $ 1,673 | $ 1,683 |
Professional and legal fees | 1,386 | 2,053 | ||
Taxes other than income | 194 | 3,674 | ||
Other accrued liabilities | 3,279 | 959 | ||
Total accrued liabilities | $ 22,881 | $ 28,208 |
Accrued Liabilities - Activity
Accrued Liabilities - Activity Related to Accrued Warranties (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||
Balance, beginning of period | $ 1,880 | $ 1,683 |
Provision for warranty expense | 2,548 | 1,941 |
Fulfillment of warranty obligations | (2,236) | (1,951) |
Balance, end of period | $ 2,192 | $ 1,673 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Monte Carlo Simulation Valuation Model | ||
Liabilities: | ||
Undiscounted maximum payment under the contingent consideration arrangements | $ 1,000 | |
Level 1 | Fair Value, Measurements, Recurring | ||
Liabilities: | ||
Contingent consideration | 0 | $ 0 |
Total | 0 | 0 |
Level 2 | Fair Value, Measurements, Recurring | ||
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total | 0 | 0 |
Level 3 | Fair Value, Measurements, Recurring | ||
Liabilities: | ||
Contingent consideration | 881 | 1,028 |
Total | $ 881 | $ 1,028 |
Restructuring - Additional Info
Restructuring - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 31 Months Ended | |||||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) employee | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||||||
Leasehold improvements | $ 3,000 | $ 3,000 | $ 3,000 | |||||
Restructuring costs | 580 | $ 1,376 | $ 2,512 | $ 3,679 | ||||
Expected number of positions eliminated | employee | 390 | |||||||
Restructuring Plan | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring costs | $ 2,511 | 3,679 | ||||||
Restructuring reserve | 520 | 1,493 | 520 | 1,493 | 520 | $ 3,919 | $ 2,348 | |
Professional fees and other related charges | Restructuring Plan | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring costs | 1,072 | 1,164 | ||||||
Restructuring reserve | 258 | $ 281 | 258 | $ 281 | 258 | $ 477 | $ 867 | |
Professional fees and other related charges | Restructuring Plan | Forecast | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring and related cost, cash | $ 1,500 | |||||||
Employee Severance | Restructuring Plan | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring costs | 5,900 | 24,800 | ||||||
Employee Severance | Minimum | Restructuring Plan | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring reserve | 1,500 | 1,500 | 1,500 | |||||
Employee Severance | Maximum | Restructuring Plan | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring reserve | $ 3,500 | $ 3,500 | $ 3,500 |
Restructuring - Activity Relate
Restructuring - Activity Related to Restructuring and Related Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring Reserve [Roll Forward] | ||||
Additions charged to expense | $ 580 | $ 1,376 | $ 2,512 | $ 3,679 |
Restructuring Plan | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 3,919 | 2,348 | ||
Additions charged to expense | 2,511 | 3,679 | ||
Cash payments | (5,910) | (4,534) | ||
Ending balance | 520 | 1,493 | 520 | 1,493 |
Severance and other benefits | Restructuring Plan | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 3,442 | 1,481 | ||
Additions charged to expense | 1,439 | 2,515 | ||
Cash payments | (4,619) | (2,784) | ||
Ending balance | 262 | 1,212 | 262 | 1,212 |
Professional fees and other related charges | Restructuring Plan | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 477 | 867 | ||
Additions charged to expense | 1,072 | 1,164 | ||
Cash payments | (1,291) | (1,750) | ||
Ending balance | $ 258 | $ 281 | $ 258 | $ 281 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 9 Months Ended | 19 Months Ended | 246 Months Ended |
Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 contract | |
Commitments and Contingencies [Line Items] | |||
Purchase commitment, due in next twelve months | $ 46.2 | $ 46.2 | |
Long-term purchase commitments | $ 6.6 | ||
Number of contracts | contract | 2 | ||
Government Contract | |||
Commitments and Contingencies [Line Items] | |||
Settlement paid | $ 12.3 | ||
Minimum | |||
Commitments and Contingencies [Line Items] | |||
Length of purchase commitments, (in days) | 60 days | ||
Maximum | |||
Commitments and Contingencies [Line Items] | |||
Length of purchase commitments, (in days) | 120 days |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Lessee, Lease, Description [Line Items] | ||||
Renewal term (in years) | 15 years | |||
Termination window (in months) | 3 months | |||
Short term lease cost (less than) | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Term of contract (in years) | 1 year | |||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Term of contract (in years) | 10 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||||
Operating lease cost | $ 1,805 | $ 2,010 | $ 5,453 | $ 5,901 |
Finance lease cost: | ||||
Amortization of ROU assets | 18 | 60 | 96 | 221 |
Interest on lease liabilities | 4 | 5 | 15 | 14 |
Total finance lease cost | $ 22 | $ 65 | $ 111 | $ 235 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Operating leases: | ||
Operating lease right-of-use assets | $ 18,404 | $ 22,543 |
Current operating lease liabilities | 5,363 | 5,601 |
Operating lease liabilities - less current portion | 14,225 | 18,538 |
Total operating lease liabilities | 19,588 | 24,139 |
Finance leases: | ||
Property and equipment, at cost | 1,415 | 1,380 |
Accumulated depreciation | (1,312) | (1,222) |
Property and equipment, net | 103 | 158 |
Current finance lease liabilities | 169 | 137 |
Finance lease liabilities - less current portion | 119 | 110 |
Total finance lease liabilities | $ 288 | $ 247 |
Weighted Average Remaining Lease Term (in years): | ||
Operating leases | 5 years 3 days | 5 years 8 months 8 days |
Finance leases | 1 year 11 months 19 days | 2 years 1 month 13 days |
Weighted Average Discount Rate: | ||
Operating leases | 5.67% | 5.67% |
Finance leases | 5.35% | 5.02% |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Lease liabilities | Lease liabilities |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Lease liabilities - less current portion | Lease liabilities - less current portion |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Liabilities | Liabilities |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, plant and equipment, net | Property, plant and equipment, net |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Lease liabilities | Lease liabilities |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Lease liabilities - less current portion | Lease liabilities - less current portion |
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Liabilities | Liabilities |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 5,686 | $ 5,874 |
Operating cash flows from finance leases | 15 | 14 |
Financing cash flows from finance leases | 172 | 229 |
ROU assets obtained in exchange for lease obligations: | ||
Operating leases | $ 808 | $ 1,209 |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Operating leases | ||
2022 (excluding the first 6 months) | $ 1,673 | |
2023 | 6,105 | |
2024 | 4,826 | |
2025 | 3,074 | |
2026 | 2,075 | |
Thereafter | 4,984 | |
Total lease payments | 22,737 | |
Less imputed interest | (3,149) | |
Total | 19,588 | $ 24,139 |
Finance leases | ||
2022 (excluding the first 6 months) | 49 | |
2023 | 170 | |
2024 | 61 | |
2025 | 12 | |
2026 | 8 | |
Thereafter | 2 | |
Total lease payments | 302 | |
Less imputed interest | (14) | |
Total | $ 288 | $ 247 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 586 | $ (1,658) | $ 4,352 | $ (3,667) |
Effective tax rate | 10.30% | 30.10% |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | Sep. 01, 2022 | Sep. 30, 2022 |
Business Acquisition [Line Items] | ||
Gross contractual amount from accounts receivable acquired | $ 2,600 | |
GeoSLAM | ||
Business Acquisition [Line Items] | ||
Purchase price | $ 29,000 | |
Number of shares issued in non-cash payment transactio (in shares) | 495,562 | |
Value of stock | $ 15,900 | |
Purchase price paid, net of cash acquired | $ 44,946 | |
Integration costs | 2,400 | |
Accounts receivable net | $ 2,500 |
Business Combinations - Assets
Business Combinations - Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Sep. 01, 2022 | Dec. 31, 2021 |
Liabilities assumed: | |||
Goodwill | $ 101,279 | $ 82,096 | |
GeoSLAM | |||
Tangible assets acquired: | |||
Accounts receivable | $ 2,452 | ||
Inventory | 6,576 | ||
Property, plant and equipment, net | 270 | ||
Other assets | 505 | ||
Total assets acquired | 9,803 | ||
Liabilities assumed: | |||
Accounts payable and accrued liabilities | (2,187) | ||
Deferred revenue | (1,282) | ||
Other current liabilities | (289) | ||
Total liabilities assumed | (3,758) | ||
Intangible assets | 18,610 | ||
Net assets acquired | 24,655 | ||
Deferred income tax liability | 4,472 | ||
Goodwill | 24,763 | ||
Purchase price paid, net of cash acquired | $ 44,946 |
Business Combinations - Acquire
Business Combinations - Acquired Intangible (Details) - GeoSLAM $ in Thousands | Sep. 01, 2022 USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amount | $ 18,610 |
Weighted Average Life (Years) | 13 years |
Brand | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amount | $ 466 |
Weighted Average Life (Years) | 3 years |
Technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amount | $ 3,828 |
Weighted Average Life (Years) | 5 years |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amount | $ 14,316 |
Weighted Average Life (Years) | 15 years |