FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

Twelve Months Ended

December 31,

(in thousands)

2023

2022

Cash flows from:

Operating activities:

Net loss

$           (56,577)

$           (26,756)

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

Depreciation and amortization

15,377

13,983

Stock-based compensation

17,833

13,317

Inventory write-downs

9,340

—

Asset impairment charges

5,707

507

Provision for bad debts, net of recoveries

1,030

163

Amortization of debt discount and issuance costs

450

—

Loss on disposal of assets

274

156

Provision for excess and obsolete inventory

2,361

(68)

Impairment of intangible assets

—

1,135

Deferred income tax expense (benefit)

(26)

2,412

Change in operating assets and liabilities, net of acquisitions:

(Increase) decrease in:

Accounts receivable, net

(50)

(11,198)

Inventories

736

3,379

Prepaid expenses and other assets

3,387

(21,239)

(Decrease) increase in:

Accounts payable and accrued liabilities

4,421

4,777

Income taxes payable

(3,808)

(1,904)

Customer deposits

(2,533)

1,343

Unearned service revenues

2,786

(4,863)

Other liabilities

367

—

Net cash provided by (used in) operating activities

1,075

(24,856)

INVESTING ACTIVITIES:

Purchases of property and equipment

(6,817)

(6,371)

Purchases of short-term investments

(19,496)

—

Cash paid for technology development, patents and licenses

(7,177)

(10,567)

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

—

(32,959)

Net cash used in investing activities

(33,490)

(49,897)

Financing activities:

Payments on capital leases

(154)

(220)

Cash settlement of equity awards

217

(1,892)

Short term debt

—

1,115

Proceeds from issuance of 5.50% Convertible Senior Notes, due 2028, net of discount, issuance
cost and accrued interest

72,310

—

Payment of contingent consideration for business acquisition

(1,098)

—

Net cash provided by (used in) financing activities

71,275

(997)

Effect of exchange rate changes on cash and cash equivalents

115

(8,427)

Increase (Decrease) in cash and cash equivalents

38,975

(84,177)

Cash and cash equivalents, beginning of period

37,812

121,989

Cash and cash equivalents, end of period

$             76,787

$             37,812