SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of the earliest event reported) JANUARY 16, 2002
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Commission File Number 0-23081
FARO TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Florida 59-3157093
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(State or Other Jurisdiction (IRS Employer
of Incorporation) Identification No.)
125 TECHNOLOGY PARK, LAKE MARY, FLORIDA 32746
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(Address of Principal Executive Offices) (Zip Code)
(407) 333-9911
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On January 31, 2002, FARO Technologies, Inc. ("FARO" or the
"Company") filed a Current Report on Form 8-K relating to the FARO's acquisition
on January 16, 2002 of SpatialMetriX Corporation ("SMX") pursuant to an
Agreement and Plan of Merger dated September 14, 2001, as amended (the
"Agreement"), acquired . In connection with the SMX acquisition, FARO agreed to
issue 500,000 shares of FARO common stock to SMX shareholders and certain SMX
employees and satisfied certain obligations of SMX. Specifically, the Company
issued an additional 350,000 shares of FARO common stock and paid approximately
$2.0 million in cash to fully satisfy SMX's obligations to its two lenders. The
Company also paid approximately $700,000 in cash to satisfy other obligations of
SMX.The total consideration, given the $2.25 per share price of FARO common
stock on January 16, 2002, was approximately $4.6 million. The transaction will
be recorded utilizing the purchasing method of accounting. SMX Corp. is a
leading manufacturer and supplier of laser trackers and targets, metrology
software, and contract inspection services.
In April 2001, the Company provided $1.5 million in financing
to SMX by entering into a Participation Agreement with SMX's bank pursuant to
which the Company funded and simultaneously acquired a $1.5 million interest in
SMX's then outstanding $3.8 million bank line of credit. In October 2001, the
Company and SMX entered into an additional agreement pursuant to which the
Company would provide to SMX up to an additional $1.5 million in financing. The
Company and SMX's bank amended the Participation Agreement so that such
additional financing to SMX also would be made through participation in SMX's
bank line of credit. Consequently, SMX's bank line of credit could increase to a
maximum of $5.3 million, of which FARO would own up to $3.0 million. Prior to
closing, the Company had provided $2.9 million of aggregate financing to SMX
pursuant to the Participation Agreement.
There were no other material relationships between FARO and SMX
prior to the Agreement. None of the directors or the executive officers of SMX
owned shares of FARO common stock prior to the Agreement. In addition, none of
the directors or the executive officers of the Company owned shares of stock of
SMX as of the date of the Agreement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of business acquired:
Included as Exhibit 99.2, are the audited financial statements
of SpatialMetriX Corporation for each of the two years in the period ended
December 31, 2001.
(b) Pro forma financial information:
The operating results of SMX will be included in the
Registrant's consolidated financial statements effective at the date of
acquisition. The following pro forma financial data is presented for
informational purposes assuming that the Company had acquired SMX as of
January 1, 2001. The pro forma selected financial data has been prepared for
comparative purposes only and does not purport to be
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FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED BALANCE SHEETS
December 31,
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2001 2000
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 6,238,564 $ 4,154,318
Short term investments 3,115,101 4,205,995
Accounts receivable, net 11,556,568 12,523,972
Income taxes refundable 545,118 -
Inventories, net 6,862,793 7,651,290
Prepaid expenses and other current assets 1,497,820 1,142,881
Deferred income taxes 76,418 203,816
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Total current assets 29,892,382 29,882,272
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PROPERTY AND EQUIPMENT - at cost:
Machinery and equipment 4,238,582 3,780,892
Furniture and fixtures 1,413,809 1,353,248
Leasehold improvements 139,555 89,171
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Total 5,791,946 5,223,311
Less accumulated depreciation and amortization (3,945,247) (3,121,029)
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Property and equipment, net 1,846,699 2,102,282
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INTANGIBLE ASSETS - net 7,844,586 10,942,305
INVESTMENTS 2,129,679 4,755,572
NOTES RECEIVABLE 1,052,932 1,128,846
DEFERRED INCOME TAXES - 675,324
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TOTAL ASSETS $ 42,766,278 $ 49,486,601
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 25,120 $ 17,397
Accounts payable 5,381,271 5,409,417
Accrued liabilities 3,803,463 4,859,404
Income taxes payable 100,000 784,409
Current portion of unearned service revenues 2,207,120 2,039,566
Customer deposits 231,845 133,984
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Total current liabilities 11,748,819 13,244,177
OTHER LONG-TERM LIABILITIES 203,844 134,644
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Total liabilities 11,952,663 13,378,821
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SHAREHOLDERS' EQUITY:
Class A preferred stock - par value $.001, 10,000,000 shares
authorized, no shares issued and outstanding
Common stock - par value $.001, 50,000,000 shares
authorized, 11,925,252 and 11,915,225 issued;
11,885,252 and 11,875,225 outstanding, respectively 11,925 11,916
Additional paid-in capital 49,530,737 49,396,709
Unearned compensation (109,000) -
Accumulated deficit (15,466,444) (10,943,307)
Other comprehenvive loss (3,002,978) (2,206,913)
Common stock in treasury, at cost - 40,000 shares in 2001 and 2000 (150,625) (150,625)
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Total shareholders' equity 30,813,615 36,107,780
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 42,766,278 $ 49,486,601
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FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
Years Ended December 31
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2001 2000
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SALES $ 46,471,645 $ 54,397,344
COST OF SALES 22,800,608 22,440,189
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Gross profit 23,671,037 31,957,155
OPERATING EXPENSES
Selling 16,573,666 16,951,783
General and administrative 7,288,049 6,329,452
Depreciation and amortization 4,346,861 4,788,084
Research and development 5,682,301 5,112,995
Employee stock options - 123,404
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Total operating expenses 33,890,877 33,305,718
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LOSS FROM OPERATIONS (10,219,840) (1,348,563)
OTHER INCOME (EXPENSES)
Interest income 900,281 871,009
Other income, net 964,950 302,378
Interest expense (19,899) (1,334)
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INCOME (LOSS) BEFORE INCOME TAXES (8,374,508) (176,510)
INCOME TAX EXPENSE (BENEFIT) 341,738 759,841
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NET INCOME (LOSS) $ (8,716,246) $ (936,351)
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NET LOSS PER SHARE - BASIC ($0.73) ($0.08)
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NET LOSS PER SHARE - DILUTED ($0.73) ($0.08)
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Note: The above pro forma data reflects the following pro forma adjustments:
A - Entry to record consideration given upon closing of the purchase of SMX
($7,931,958).
B - Entry to record additional acquisition costs incurred prior to closing
($383,183).
C - Adjustment to the purchase price for liabilities paid at closing but
previously recorded by SMX ($1,643,000).
D - Entry to eliminate Investment in SMX in consolidation.
F - Entry to reverse interest expense recorded by SMX on bank loans paid upon
closing ($866,062 and $843,008 in 2001 and 2000, respectively).
G - Entry to record amortization of intangible assets acquired (including
$1,200,000 of amortization of goodwill).
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(c) Exhibits:
Exhibit No. Description
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2.1 Agreement and Plan of Merger among SpatialMetriX
Corporation, FARO Technologies, Inc., and FARO
Acquisition LLC, dated as of September 14, 2001,
as amended on December 26,2001, and as further
amended on January 16, 2002 (incorporated by
reference to exhibit 2.1 filed with Registrant's
Current Report on Form 8-K dated January 16,
2002).
23.1 Consent of Arthur Andersen LLP.
99.1 Confirmation letter from Faro Technologies, Inc.
pursuant to Securities and Exchange Commission
Release Nos. 33-8070; 34-45590; 35-27503;
39-2395; IA-2018; IC-25464; FR-62; File No.
S7-03-02 (filed herein).
99.2 Financial Statements of SpatialMetriX
Corporation as of December 31, 2001 and 2000 and
for each of the two years in the period ended
December 31, 2001 (filed herein).
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Se
Exchange Act of 1934, the Registrant has duly caused this report to be on its
behalf by the undersigned, thereunto duly authorized.
FARO TECHNOLOGIES, INC.
By: /s/ Gregory A. Fraser
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Gregory A. Fraser
Executive Vice President,
Secretary, Treasurer, and
Director
Date: April 1, 2002
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