FARO TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Twelve Months Ended

December 31,

(in thousands)

2022

CASH FLOWS FROM:

OPERATING ACTIVITIES:

Net loss

$          (26,756)

$          (39,964)

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

Depreciation and amortization

13,983

13,396

Stock-based compensation

13,317

11,456

Provision for bad debts (net of recoveries)

163

176

Loss on disposal of assets

156

218

Provision for excess and obsolete inventory

(68)

2,297

Impairment of leasehold improvements

507

—

Impairment of intangibles

1,135

—

Deferred income tax expense

2,412

24,706

Change in operating assets and liabilities, net of acquisitions:

(Increase) decrease in:

Accounts receivable, net

(11,198)

(15,577)

Inventories

3,379

(6,706)

Prepaid expenses and other assets

(21,239)

5,996

(Decrease) increase in:

Accounts payable and accrued liabilities

4,777

(13,260)

Income taxes payable

(1,904)

847

Customer deposits

1,343

2,627

Unearned service revenues

(4,863)

312

Net cash used in operating activities

(24,856)

(13,476)

INVESTING ACTIVITIES:

Purchases of property and equipment

(6,371)

(7,035)

Cash paid for technology development, patents and licenses

(10,567)

(4,905)

Acquisitions of businesses and minority share investments, net of cash received

(32,959)

(33,800)

Net cash used in investing activities

(49,897)

(45,740)

FINANCING ACTIVITIES:

Payments on capital leases

(220)

(296)

Payments for taxes related to net share settlement of equity awards

(1,892)

(4,002)

Short term debt

1,115

—

Proceeds from issuance of stock related to stock option exercises

—

5,880

Net cash (used in) provided by financing activities

(997)

1,582

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

(8,427)

(6,010)

DECREASE IN CASH AND CASH EQUIVALENTS

(84,177)

(63,644)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

121,989

185,633

CASH AND CASH EQUIVALENTS, END OF YEAR

$           37,812

$         121,989