FARO
#That is correct.
As you know, predominantly we are in two categories right now: three-dimensional documentation, and measurement or metrologies.
Some of those individuals will be ---+ and it's very much in discussion right now according to their wishes.
And the needs of the vertical are transitioning to some of the other verticals.
So there will be some backfilling.
Then there will also be some new hires in each of the verticals as a function of how we roll out the new product in the different areas.
So it's very much a bit of a jazz dance at this point.
There will be a net increase and account managers overall to get the representation we need.
But there is shuffling between the existing and the new verticals.
Yes.
It should follow a pattern that we've had in prior years unless we do something extraordinary to change that trend.
If you look back over the last few years by quarter as a proportion of sales, it's a fairly consistent pattern.
We would suggest that that pattern would continue unless we do something dramatic to change that by a significant increase in growth rate, for example.
So that remains to be seen because we are not sure how successful or how quickly we will be successful with the various initiatives that we are undertaking.
But for the moment, I would view seasonality to be consistent with the pattern you have seen in prior years.
You want to be more specific, <UNK>.
I'm not sure how to answer that.
Right.
Well, clearly it was part of the idea of early adopter product introductions means we don't commit to a worldwide global introduction.
We introduced at a very measured level in certain specific geographies.
With respect to Robo-Imager, it's very early in that process.
We have seen, as I mentioned also in my talk, that FARO has been a Company that in the past reduced the cost and the price of access to small and medium-sized businesses; so, technology which normally could have only been afforded by larger companies.
So we imagine that there's a number of small, medium-sized businesses with serial production in various things that will need the adaptability of a robotic imager to do automated or semi-automated inspections near the line.
That's our aspiration.
The very reason it's in an early-adopter introductory phase is, in fact, to find out what that interest is like.
I was at the Control show in Stuttgart, Germany, last week, and there was a great deal of interest around it as well as on the Cobalt imager for the arrays and/or the arrays on larger robots.
So it is very much a new foray for us.
The product is unique in that you can put multiple imagers on a single computer, which is unique in a industry, which provides you the ability to create arrangements that don't require robotics and only require one computer.
So it's a bit of a new wave in factory automation.
And this is all an experiment.
I think that we can speak to the reception to it probably in the next couple of quarters.
Our strategic focus there is to ---+ as I mentioned in the last call, we have a number of opportunities which have emerged because we have now segregated our interests in a number of verticals.
So I can say that our M&A process is active and bigger.
And obviously we will be announcing those as they occur.
Well, first of all, we don't necessarily provide guidance as to forward-looking quarters.
But in terms of ---+ I would believe that if you look back over the course of our history, you will see the percentage of the total revenue service.
I did mention previously that we are actively driving to sell (inaudible) sale and then, on a renewable basis, our warranties.
So that is actively something that our sales team ---+ our inside sales team is working on each and every day.
But I'm not going to provide a forward-looking guidance for you.
It is absolutely.
We have initiatives across our Company that we make sure that we reach out to those customers whose warranties after the plan of sale are expiring, that we reach out.
We remind them that ---+ and try to renew their contracts.
So there's absolutely a piece of revenue that we do not want to leave off the table.
We want to bring that forward.
And we have inside sales working actively every day to do that.
How do you mean assessment.
Okay.
Well, it's kind of a passive situation right now because we try to deduce from our installed base where primary interest lies.
So the verticals we've selected are metrology, obviously.
We have expanded metrology to clearly include both the building and verifying, so it's metrology build and verify.
We also have factory automation, which is an outgrowth of that.
Something that we started to touch on with the new product introduction.
So, factory automation would be number two, and it is also build and verify.
Then we have the AEC market, which was, in our opinion, a little bit too broad and conflicted with the idea of surveying.
So we are not a surveying Company, but we are building information and modeling companies.
So, we have focused that on the BIM-CIM side of the AEC market.
In addition, you find public safety is one of our primary verticals.
And we've done, as you know, acquisitions and product introductions around that.
We've also had the ---+ of course, the product design, which is one of the areas that a lot of our products have been used for for reverse engineering.
But, clearly, differentiated from the demand of the metrology market.
So we find product design is one of those verticals.
If you want to review the script from the year-end conference call, in there I give a fairly detailed review of how the verticals are decided upon.
And the sixth one would be the services market.
As you can see, our service revenue and warranty revenue increase.
As part of expanding that, we want to do specific product development, 3-D services and provide access to early product concepts through that.
In terms of really the ---+ let me start by the ASP side.
First of all, it was (inaudible) for several different models out there in the marketplace.
One is our X30, one is our X130, the other is our higher-priced model X330.
So one of the things certainly we tried to do on our sales approach is try to correctly fit that ---+ our product key application.
One of the things we have seen over the course of the last several quarters, we have seen a shift to that X330 based on the needs of the external market.
So that does help our average selling price because it's about $10,000 or so higher than our X130.
That's the ASP side.
And also as we shift away from distribution, what you will see is that you will see an increase in our average selling price.
But then that is somewhat offset by the commissions and the sales and marketing lines.
So I would say two factors.
One is a model shift, and then number two is just the movement towards the direct.
In terms of the demand side, we are trying to actively address that in terms of scanning localizer, in terms of the HDR.
But one of the things we are impacted is certainly by macro conditions.
We are certainly impacted by some sector conditions.
As I said before, there were parts of our EMEA business that were affected by oil and gas.
They are somewhat affected in the US by surveying.
But certainly what we are trying to do to address that is find other places in the market for this early-adopter technology, really.
And in there's a lot of applications out there that we will be looking at to really penetrate further those applications.
Okay.
We just wanted to say thank you very much for all the attendees, your questions, and we look forward to talk to you in Q2.
