FARO Reports Fourth Quarter and Fiscal Year 2017 Financial Results

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties, such as statements about demand for and customer acceptance of FARO's products, and FARO's product development and product launches. Statements that are not historical facts or that describe the Company's plans, objectives, projections, expectations, assumptions, strategies, or goals are forward-looking statements. In addition, words such as "is," "will" and similar expressions or discussions of FARO's plans or other intentions identify forward-looking statements. Forward-looking statements are not guarantees of future performance and are subject to various known and unknown risks, uncertainties, and other factors that may cause actual results, performances, or achievements to differ materially from future results, performances, or achievements expressed or implied by such forward-looking statements. Consequently, undue reliance should not be placed on these forward-looking statements.

Factors that could cause actual results to differ materially from what is expressed or forecasted in such forward -looking statements include, but are not limited to:

development by others of new or improved products, processes or technologies that make the Company's products less competitive or obsolete;
the Company's inability to maintain its technological advantage by developing new products and enhancing its existing products;
declines or other adverse changes, or lack of improvement, in industries that the Company serves or the domestic and international economies in the regions of the world where the Company operates and other general economic, business, and financial conditions; and
other risks detailed in Part I, Item 1A. Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2016 and Part II, Item 1A. Risk Factors in the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017.

Forward-looking statements in this release represent the Company's judgment as of the date of this release. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, unless otherwise required by law.

About FARO

FARO is the world's most trusted source for 3D measurement, imaging and realization technology. The Company develops and markets computer-aided measurement and imaging devices and software for the following vertical markets:

Factory Metrology - High-precision 3D measurement, imaging and comparison of parts and complex structures within production and quality assurance processes
3D Machine Vision - 3D vision for both control and measurement to the manufacturing floor through 3D sensors and custom solution
Construction BIM-CIM - 3D capture of as-built construction projects and factories to document complex structures and perform quality control, planning and preservation
Public Safety Forensics - Capture and analysis of on-site real world data to investigate crash, crime and fire, plan security activities and provide virtual reality training for public safety personnel
Product Design - Capture detailed and precise 3D data from existing products permitting CAD analysis and redesign, after market design and legacy part replication

FARO's global headquarters is located in Lake Mary, Florida. The Company also has a technology center and manufacturing facility consisting of approximately 90,400 square feet located in Exton, Pennsylvania containing research and development, manufacturing and service operations of our FARO Laser Tracker^TM, FARO Cobalt Array Imager, and Tracer product lines. The Company's European regional headquarters is located in Stuttgart, Germany and its Asia-Pacific regional headquarters is located in Singapore. FARO has other offices in the United States, Canada, Mexico, Brazil, Germany, the United Kingdom, France, Spain, Italy, Poland, Turkey, the Netherlands, Switzerland, India, China, Malaysia, Thailand, South Korea, Japan, and Australia.

More information is available at http://www.faro.com

FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

	Three Months Ended				Twelve Months Ended
(in thousands, except share and per share data)	December 31, 2017		December 31, 2016		December 31, 2017		December 31, 2016
Sales
Product	$	84,446	$	73,778	$	277,922	$	256,010
Service	21,977		17,920		82,995		69,574
Total sales	106,423		91,698		360,917		325,584
Cost of Sales
Product	31,957		33,032		110,143		107,965
Service	12,372		9,989		46,137		39,659
Total cost of sales (exclusive of depreciation and amortization, shown separately below)	44,329		43,021		156,280		147,624
Gross Profit	62,094		48,677		204,637		177,960
Operating Expenses
Selling and marketing	28,660		23,634		103,544		79,870
General and administrative	10,924		9,477		43,807		40,813
Depreciation and amortization	4,513		4,135		16,588		13,868
Research and development	8,846		7,815		35,376		30,125
Total operating expenses	52,943		45,061		199,315		164,676
Income from operations	9,151		3,616		5,322		13,284
Other expense (income)
Interest income	(73)		(54)		(319)		(212)
Other (income) expense, net	(510)		(2)		(190)		822
Interest Expense	7		9		4		48
Income before income tax expense (benefit)	9,727		3,663		5,827		12,626
Income tax expense	20,785		118		20,343		1,519
Net (loss) income	$	(11,058)	$	3,545	$	(14,516)	$	11,107
Net (loss) income per share - Basic	$	(0.66)	$	0.21	$	(0.87)	$	0.67
Net (loss) income per share - Diluted	$	(0.66)	$	0.21	$	(0.87)	$	0.67
Weighted average shares - Basic		16,738,400		16,676,764		16,711,534		16,654,786
Weighted average shares - Diluted	16,738,400		16,720,571		16,711,534		16,681,710

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