New order bookings for the second quarter of 2014 increased $17.2 million, or 25.7%, to $83.9 million from $66.7 million in the second quarter of 2013.
Gross profit increased $8.6 million, or 23.3%, to $45.5 million from $36.9 million in the prior year quarter primarily driven by higher sales volume in laser scanners. Gross margin of 55.5% increased 150 basis points from the second quarter of 2013 primarily driven by more favorable metrology product margin resulting from manufacturing efficiency gains.
The Company is committed to continually developing disruptive products through its research and development activities and selective acquisitions. Accordingly, in the second quarter of 2014, R&D spending increased $1.5 million, or 29.0%, to $6.7 million from $5.2 million in the second quarter of 2013. On July 29, 2014, FARO also announced the acquisition of The CAD Zone, Inc., a software provider with proprietary technology specifically targeted for law enforcement applications. CAD Zone’s point cloud software application will be integrated with FARO’s laser scanning technology to provide a turn-key solution for crime scene and other forensic applications.
Operating margin increased to 10.2% in the second quarter of 2014 from 8.0% in the second quarter of 2013 primarily as a result of strong sales growth coupled with active operating cost management.
“FARO’s strong product line-up combined with solid execution by the global team enabled the Company to accelerate sales growth and new order intake in the second quarter,” stated Jay Freeland, FARO’s President and CEO. “As a result, we also delivered a $0.15, or 71%, increase in EPS for our shareholders through higher sales, improved manufacturing efficiencies, and greater leverage on our cost structure.”
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties, such as statements about FARO’s growth, demand for and customer acceptance of FARO’s products, anticipated improvement in the markets in which FARO operates, and FARO’s product development and product launches. Statements that are not historical facts or that describe the Company’s plans, objectives, projections, expectations, assumptions, strategies, or goals are forward-looking statements. In addition, words such as, “is”, “continually,” “will,” and similar expressions or discussions of FARO’s plans or other intentions identify forward-looking statements. Forward-looking statements are not guarantees of future performance and are subject to various known and unknown risks, uncertainties, and other factors that may cause actual results, performances, or achievements to differ materially from future results, performances, or achievements expressed or implied by such forward-looking statements. Consequently, undue reliance should not be placed on these forward-looking statements.
Factors that could cause actual results to differ materially from what is expressed or forecasted in such forward-looking statements include, but are not limited to:
-- development by others of new or improved products, processes or technologies that make the Company's products less competitive or obsolete; -- the Company's inability to maintain its technological advantage by developing new products and enhancing its existing products; -- declines or other adverse changes, or lack of improvement, in industries that the Company serves or the domestic and international economies in the regions of the world where the Company operates and other general economic, business, and financial conditions; and -- other risks detailed in Part I, Item 1A. Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2013.
Forward-looking statements in this release represent the Company’s judgment as of the date of this release. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, unless otherwise required by law.
FARO is the world’s most trusted source for 3D measurement technology. The Company develops and markets computer-aided measurement and imaging devices and software. Technology from FARO permits high-precision 3D measurement, imaging and comparison of parts and complex structures within production and quality assurance processes. The devices are used for inspecting components and assemblies, rapid prototyping, documenting large volume spaces or structures in 3D, surveying and construction, as well as for investigation and reconstruction of accident sites or crime scenes.
Approximately 15,000 customers are operating more than 30,000 installations of FARO’s systems, worldwide. The Company’s global headquarters is located in Lake Mary, FL; its European regional headquarters in Stuttgart, Germany; and its Asia/Pacific regional headquarters in Singapore. FARO has other offices in the United States, Canada, Mexico, Brazil, Germany, the United Kingdom, France, Spain, Italy, Poland, Turkey, the Netherlands, Switzerland, Portugal, India, China, Malaysia, Vietnam, Thailand, South Korea, and Japan.
More information is available at http://www.faro.com