FARO Technologies, Inc.

Good morning, everyone, and welcome to Ferro Technologies' first quarter 2021 earnings call. For opening remarks and introductions, I will now turn the call over to Michael Fennari at Sapphire Investor Relations. Please go ahead.

Thank you, and good morning. With me today from Ferro are Michael Berger, Chief Executive Officer, and Alan Mewich, Chief Financial Officer. Yesterday, after the market closed, the company released its financial results for the first quarter of 2021. The related press release and Form 10-Q for the first quarter are available on FARO's website at www.faro.com. To help you better understand the company and its results, during the course of this call, management may make statements that may be considered forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements can be identified by words such as expect, will, believe, anticipate, plan, potential, continue, goal, objective, intend, seek, estimate, may, and similar words. Forward-looking statements reflect our views only as of today, and except as required by law, we undertake no obligation to update or revise them. It is possible a company's actual results may differ materially from those projected in these forward-looking statements. Important factors in a discussion of the risks and uncertainties that may cause actual results to differ materially are set forth in yesterday's press release and the company's Form 10-K for the year ended December 31st and Form 10-Q for the quarter ended March 31st, 2021. During today's conference call, management will discuss certain financial measures that are not presented in accordance with U.S. generally accepted accounting principles or non-GAAP financial measures. In the press release, you will find additional disclosures regarding these non-GAAP measures, including reconciliations to comparable GAAP measures. While not recognized under GAAP, management believes these non-GAAP financial measures provide investors with relevant period-to-period comparisons of core operations. However, they should not be considered in isolation or as a substitute for a measure of financial performance prepared in accordance with GAAP. Now, I'd like to turn the call over to Michael.

Thank you, Mike. Good morning and welcome to our call. First quarter demand for our products reflected a combination of expected seasonality as well as ongoing improvement as our markets continue to recover from the adverse effects of our pandemic. On a geographic basis, each of our served regions exhibited similar levels of seasonal softness. Within our end markets, we saw broad-based seasonality in line with historical trends. Service revenue, which typically does not have a seasonal component, through incrementally off of fourth quarter levels. While near-term demand remains below 2019 run rate levels, we continue to believe order activity will improve throughout 2021 as our customers' activities normalize. When combined with our new cost structure, we continue to have line of sight to achieving our stated success model once revenue levels return to 2019 levels. That said, we remain cautious as market uncertainties such as global health conditions and semiconductor supply chain shortages may adversely affect near-term demand for our products. In February, Farrell celebrated its 40th anniversary, providing an opportunity to acknowledge the contributions of several generations of Farrell employees whose commitment and hard work have created the business we have today. As an historically engineering-led organization, Ferro has been a pioneer in developing many of the core measurement technologies used in the industry, and as such, earned a reputation for being an industry leader in three-dimensional measurement in terms of quality and accuracy. As we look to the future of Ferro, our strategy is to leverage both our core technology and reputation Ferro has created. and transition to a marketing-led organization focused on understanding the problems our customers are trying to solve and delivering hardware and software solutions to meet those needs. We believe this will create long-term differentiation. Transitions like this take time and begin with developing a better understanding, a deeper understanding of our customers and what they are ultimately looking to accomplish with our products. For Ferro, this meant forming a new product marketing organization with the primary focus of capturing the voice of the customer in order to ensure our product roadmap is in alignment with our customer's workflow to generate the greatest value possible. To provide a simple, real-world example of how this works, we can look to the AEC or construction market and specifically the task of pouring concrete. For large warehouses requiring precise level of floor flatness, a typical process is to pour the concrete, let it cure, then measure to verify the floor is within tolerance. If the floor is out of tolerance, a manual and expensive process is employed to rework the floor to create the desired result. By understanding both the process and the problem, we have developed a solution whereby the floor can be measured with high precision while the concrete is still curing. The data is then analyzed quickly on site, and if the floor is out of tolerance, action can be taken to resolve the situation before curing is complete, thereby saving time and expense associated with rework. This solution, when combined with the right sales training, A targeted lead generation process will ultimately lead to new opportunities that were previously not realized given our historically generic market messaging. It is this alignment of customer needs and product roadmaps supported by an evolving go-to-market strategy that we believe will enable us to differentiate our solutions and capture share in our targeted markets. We are presently targeting 26 different workflows over three markets, which will ultimately create an ever-growing library of solutions that will enable our sales team to move beyond selling scanners, arms, and trackers to selling comprehensive solutions which align with our customers' applications. Our increased focus on voice of the customer is influencing our solutions roadmap, and we continue to expect a steady flow of product announcements throughout the balance of the year. We believe taken together, this approach will add more value to our customers and ultimately drive enhanced financial performance at Ferrell. In addition to product development alignment, we also understand that as software drives a larger portion of value into our solutions, it is important to aggregate both our legacy and future software applications into a single cloud-based platform, enabling customers to seamlessly leverage a suite of applications for the problems they are looking to solve. In addition to delivering a unified user experience, a cloud platform can also enable customers to capture and upload data in the field. leverage cloud resources to process and analyze this data in real time, and to access the resulting information, enabling collaboration both within and across organizational boundaries over time. Taken together, this forms the basis for our strategic transition, namely developing a deep understanding of our customers' workflows, which can be translated into product features that will enable our hardware to capture better data faster. provide customers with increased software intelligence that enables more data automated, and finally, enable them to access their information everywhere through a cloud-based architecture. With that, I'll turn the call over to Alan for an overview of our first quarter financial results.