FARO TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Three Months Ended

(in thousands)

March 31, 2022

Cash flows from:

Operating activities:

     Net loss

$           (9,687)

$           (3,221)

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

          Depreciation and amortization

3,012

3,190

          Stock-based compensation

2,867

2,094

          Provisions for bad debts, net of recoveries

16

(89)

          Loss on disposal of assets

112

20

          Provision for excess and obsolete inventory

229

1,404

          Deferred income tax expense (benefit)

66

(1,612)

Change in operating assets and liabilities:

     Decrease (Increase) in:

          Accounts receivable

1,449

3,676

          Inventories

(2,065)

(3,999)

          Prepaid expenses and other current assets

(3,313)

(1,346)

     (Decrease) Increase in:

          Accounts payable and accrued liabilities

(1,682)

(9,823)

          Income taxes payable

1,261

(1,153)

          Customer deposits

492

896

          Unearned service revenues

206

(323)

               Net cash used in operating activities

(7,037)

(10,286)

Investing activities:

     Purchases of property and equipment

(2,442)

(1,547)

     Cash paid for technology development, patents and licenses

(2,612)

(890)

               Net cash used in investing activities

(5,054)

(2,437)

Financing activities:

     Payments on finance leases

(58)

(86)

     Payments for taxes related to net share settlement of equity awards

(916)

(3,336)

     Proceeds from issuance of stock related to stock option exercises

—

5,118

               Net cash (used in) provided by financing activities

(974)

1,696

Effect of exchange rate changes on cash and cash equivalents

(1,732)

(4,649)

Decrease in cash and cash equivalents

(14,797)

(15,676)

Cash and cash equivalents, beginning of period

121,989

185,633

Cash and cash equivalents, end of period

$        107,192

$        169,957