FARO TECHNOLOGIES, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP | |||||||||||||||||||||||||||
TOTAL SALES, GROSS PROFIT AND GROSS MARGIN | |||||||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||||||
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| Three Months Ended June 30, |
| Six Months Ended June 30, |
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(dollars in thousands) |
| 2019 |
| 2018 |
| 2019 |
| 2018 |
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Total sales, as reported |
| $ | 93,491 |
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| $ | 98,244 |
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| $ | 187,108 |
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| $ | 191,078 |
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GSA sales adjustment (1) |
| 5,805 |
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| — |
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| 5,840 |
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| — |
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Non-GAAP total sales |
| $ | 99,296 |
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| $ | 98,244 |
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| $ | 192,948 |
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| $ | 191,078 |
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| Three months ended June 30, |
| Six Months Ended June 30, | ||||||||||||||||||||||||
(dollars in thousands) | 2019 |
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| 2018 |
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| 2019 |
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| 2018 |
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Gross profit and gross margin,
| $ | 52,319 |
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| 56.0 | % |
| $ | 57,691 |
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| 58.7 | % |
| $ | 107,338 |
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| 57.4 | % |
| $ | 111,477 |
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| 58.3 | % |
GSA sales adjustment (1) | 5,805 |
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| 6.2 | % |
| — |
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| — | % |
| 5,840 |
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| 3.1 | % |
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| — | % | ||||
Non-GAAP gross profit and
| $ | 58,124 |
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| 58.5 | % |
| $ | 57,691 |
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| 58.7 | % |
| $ | 113,178 |
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| 58.7 | % |
| $ | 111,477 |
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| 58.3 | % |
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(1) Late in the fourth quarter of 2018, during an internal review we preliminarily determined that certain of our pricing practices may have resulted in the U.S. Government being overcharged under our General Services Administration ("GSA") Federal Supply Schedule contracts (the "Contracts"). In fourth quarter 2018, we reduced our total sales by an estimated cumulative adjustment of $4.8 million. We also retained outside legal counsel and forensic accountants to conduct a comprehensive review of our pricing and other practices under the Contracts (the "Review"). On July 15, 2019, we submitted a report to the GSA and its Office of Inspector General setting forth the findings of the Review. Based on the results of the Review, in second quarter 2019 we reduced our total sales by an incremental $5.8 million (the "GSA sales adjustment"). |