FARO TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Nine Months Ended September 30,

(in thousands)

2023

Cash flows from:

Operating activities:

Net loss

$            (8,080)

$          (58,165)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

11,709

11,728

Stock-based compensation

8,471

12,276

Inventory write-downs

—

8,132

Asset impairment charges

—

5,333

Deferred income tax (benefit) and other non-cash charges

(1,230)

(82)

Provision for excess and obsolete inventory

861

1,754

Amortization of debt discount and issuance costs

336

294

Loss on disposal of assets

974

(155)

Provisions for bad debts, net of recoveries

966

834

Change in operating assets and liabilities:

Decrease (Increase) in:

Accounts receivable

6,864

1,282

Inventories

(8,097)

(544)

Prepaid expenses and other current assets

4,298

4,047

(Decrease) Increase in:

Accounts payable and accrued liabilities

(1,722)

(2,802)

Income taxes payable

(1,884)

653

Customer deposits

144

(1,534)

Unearned service revenues

778

(1,198)

Other liabilities

(1,033)

567

Net cash provided by (used in) operating activities

13,355

(17,580)

Investing activities:

Purchases of property and equipment

(3,559)

(5,016)

Maturity of short-term investments

20,009

—

Cash paid for technology development, patents and licenses

(4,822)

(5,071)

Net cash provided by (used in) investing activities

Financing activities:

Payments on finance leases

(135)

(154)

Cash settlement of equity awards

—

(89)

Repurchases of common stock

(10,014)

—

Proceeds from issuance of 5.50% Convertible Senior Notes, due 2028, net of discount,

issuance cost and accrued interest

—

72,310

Repayment of 5.50% Convertible Senior Notes, due 2028

(2,685)

—

Payment of contingent consideration for business acquisition

—

(1,098)

Net cash (used in) provided by financing activities

(12,834)

70,969

Effect of exchange rate changes on cash and cash equivalents

(23)

(1,195)

Increase in cash and cash equivalents

12,126

42,107

Cash and cash equivalents, beginning of period

76,787

37,812

Cash and cash equivalents, end of period

$            88,913

$            79,919