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    Tech Talk; FARO Technologies Surges 18%

    The shares of FARO Technologies Inc. (Nasdaq: FARO) surged 18% yesterday, after the company reported excellent results for Q4 2010 and record backlog providing a solid foundation for stronger results going forward. The stock closed the February 24 trading session at $35.19, gaining 47.5% over last year.

    FARO Technologies designs, develops and markets portable, computerized measurement devices. The company’s principal products include the world’s best-selling portable measurement arm – the FaroArm®; the FARO® Laser Tracker ION; the FARO Laser ScanArm®; FARO® Laser Scanner; the FARO® Gage, GagePlus and PowerGage; and the CAM2 family of advanced CAD-based measurement and reporting software. The portable equipment from FARO permits high-precision 3D measurement, imaging and comparison of parts and compound structures within production and quality assurance processes. The devices are used for inspecting components and assemblies, production planning, 3D documentation, as well as for investigation and reconstruction of accident sites or crime scenes. They are also employed to generate digital scans of historic sites.

    The company’s sales rebounded in 2010, after posting a 30% decline in 2009 due to the negative impact of the global economic crunch. In 2010, FARO sales reached $191.8 million, an increase of 30%, compared to 2009 sales of $147.7 million.  New order bookings for fiscal 2010 were $197.9 million, an increase of 30.5%, from $151.7 million in fiscal 2009. The company swung to profitability with net income reaching $11.1 million in 2010, compared to a net loss of $10.6 million in 2009.

    The Q4 2010 results were also strong for FARO, with revenue increasing 27.1% to $58.5 million, driven by the introduction of new products and burgeoning demand from Asia. The fourth-quarter growth is indicative of future track, given the fact that the company’s sales started to improve in Q4 2009 and succeeded to maintain the same growth path all over 2010. Even more, FARO finished the year with approximately $23 million in backlog, the highest level ever, laying a solid groundwork for the first quarter of 2011.

    Besides the growth, the company’s efforts to better control expenditures have brought significant improvement to bottom line results. Gross margin for the fourth quarter of 2010 was 59.0%, compared to 55.4% in the fourth quarter of 2009. The company reported net income of $4.8 million for the same period, or $0.29 per share, compared to a net loss of $0.04 per share in the fourth quarter of 2009.

    The company is positioned well for 2011, with scheduled new product introductions and additional capacity to leverage expenses. According to management, FARO plans to maintain a solid growth rate in the range of 20%-25% and strengthen its position as the leader in the computerized portable management segment.

    According to Thompson Reuters, analysts are expecting the company to report GAAP EPS of $1.15 on revenues of $214 million for fiscal 2011.

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