FARO TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

Three Months Ended

Nine Months Ended

(in thousands, except share and per share data)

September 30,
2017

September 30,
2016

September 30,
2017

September 30,
2016

Sales

Product

$

68,563

$

61,280

$

193,476

$

182,232

Service

21,687

18,320

61,018

51,654

Total sales

90,250

79,600

254,494

233,886

Cost of Sales

Product

26,673

25,880

78,186

74,938

Service

11,543

11,042

33,765

29,665

Total cost of sales (exclusive of depreciation and
amortization, shown separately below)

38,216

36,922

111,951

104,603

Gross Profit

52,034

42,678

142,543

129,283

Operating Expenses:

Selling and marketing

25,990

19,781

74,884

56,399

General and administrative

10,307

10,747

32,883

31,139

Depreciation and amortization

4,368

3,381

12,075

9,733

Research and development

9,019

7,928

26,530

22,344

Total operating expenses

49,684

41,837

146,372

119,615

Income (loss) from operations

2,350

841

(3,829)

9,668

Other (income) expense

Interest income, net

(78)

(21)

(249)

(119)

Other (income) expense, net

(147)

(167)

320

824

Income (loss) before income tax expense (benefit)

2,575

1,029

(3,900)

8,963

Income tax expense (benefit)

947

(61)

(442)

1,401

Net income (loss)

$

1,628

$

1,090

$

(3,458)

$

7,562

Net income (loss) per share - Basic

$

0.10

$

0.07

$

(0.21)

$

0.45

Net income (loss) per share - Diluted

$

0.10

$

0.07

$

(0.21)

$

0.45

Weighted average shares - Basic

16,708,446

16,674,176

16,697,729

16,647,662

Weighted average shares - Diluted

16,796,518

16,701,617

16,697,729

16,669,550