SOURCE: FLIR Systems, Inc.

FLIR Systems, Inc.

April 26, 2013 08:30 ET

FLIR Systems Announces First Quarter 2013 Financial Results and Management Changes

First Quarter EPS Increases 13%; Andrew Teich to Succeed Earl Lewis as President and CEO

PORTLAND, OR--(Marketwired - Apr 26, 2013) - FLIR Systems, Inc. (NASDAQ: FLIR) today announced financial results for the first quarter ended March 31, 2013. Revenue was $348.6 million, largely unchanged compared to first quarter 2012 revenue of $348.5 million. Operating income in the first quarter was $69.1 million, compared to $68.3 million in the first quarter of 2012. First quarter 2013 net income was $51.6 million, or $0.35 per diluted share, compared with net income of $48.1 million, or $0.31 per diluted share in the first quarter a year ago. Cash provided by operations in the first quarter was $62.0 million. During the quarter, the Company repurchased 3.8 million shares of its common stock at an average price of $26.22 per share.

Revenue from the Company's Commercial Systems division increased 5% from the first quarter of 2012, to $211.8 million. Within the Commercial Systems division, revenue from the Thermal Vision and Measurement segment was $167.4 million, an increase of 7% from the first quarter results last year. The Raymarine segment contributed $44.4 million of revenue during the first quarter, down 5% from the prior year.

Revenue from the Company's Government Systems division decreased 6% from the first quarter of 2012, to $136.8 million. Within the Government Systems division, revenue from the Surveillance segment was $110.2 million, a decrease of 4% from the first quarter of 2012. Revenue from the Detection segment was $12.5 million, a decrease of 35% compared to the first quarter of 2012, and the Integrated Systems segment contributed $14.0 million of revenue during the first quarter, an increase of 15% from the prior year.

The Company's backlog of firm orders for delivery within the next twelve months was approximately $505 million as of March 31, 2013, a decrease of $15 million during the quarter and an increase of $48 million over the prior year. Backlog in the Government Systems division was $334 million, decreasing $22 million during the quarter and increasing $22 million over the prior year. Backlog in the Commercial Systems division was $172 million, increasing $8 million during the quarter and $27 million over the prior year.

"First quarter results were consistent with our expectations for how the year would begin," noted Earl Lewis, President and CEO of FLIR. "Despite the difficult funding and macro environment our customers are experiencing, both of our divisions have meaningfully higher backlog than they did a year ago and our focus on organizational efficiency and cost control resulted in increased margins and net earnings growth. In addition, we continue to generate operating cash at a rate that significantly exceeds net income, which will allow us to generate strong returns for our shareholders."

Revenue and Earnings Outlook for 2013
Based on financial results for the first three months of 2013 and the outlook for the remainder of the year, FLIR is reaffirming its outlook for revenue and earnings per share for the full year 2013. Management expects revenue for 2013 to be in the range of $1.5 billion to $1.6 billion and net earnings to be in the range of $1.56 to $1.66 per diluted share.

Management Succession
Mr. Lewis has announced his intention to retire as President and Chief Executive Officer of the Company effective May 19, 2013. He will assume a senior advisor role to the Company to aid in the transition and will remain Chairman of the Board of Directors of FLIR. Mr. Andrew C. Teich, currently President of the Company's Commercial Systems division, will assume the positions of President and Chief Executive Officer of FLIR upon Mr. Lewis's retirement. "This is the culmination of a process that began more than two years ago with three of my direct reports completing the Harvard Advanced Management Program," said Mr. Lewis. "Approximately a year ago, we formed a special committee of the Board of Directors and hired outside consultants to begin the difficult process of selecting one person from among three excellent internal candidates in Bill Sundermeier, Tony Trunzo, and Andy. The difficulty in making a final decision was a result of the Board's strong belief that all three were highly competent and capable leaders."

"I am, of course, very pleased to be offered the opportunity to lead FLIR," said Mr. Teich. "I look forward to leading this outstanding management team and our global group of dedicated employees to the next level of growth."

Dividend Declaration
FLIR's Board of Directors has declared a quarterly cash dividend of $0.09 per share on FLIR common stock, payable June 7, 2013, to shareholders of record as of close of business on May 20, 2013.

Conference Call
FLIR has scheduled a conference call at 11:00 a.m. ET (8:00 a.m. PT) today to discuss its results for the quarter. A simultaneous webcast of the conference call may be accessed online from the Upcoming Events link at the Investor Relations page of www.FLIR.com. A replay will be available after 2:00 p.m. ET (11:00 a.m. PT) at this same Internet address. Summary first quarter and historical financial data, including segment details, may be accessed online from the Summary Financial Data section of www.FLIR.com/investor.

About FLIR Systems
FLIR Systems, Inc. is a world leader in the design, manufacture, and marketing of sensor systems that enhance perception and awareness. The Company's advanced thermal imaging and threat detection systems are used for a wide variety of imaging, thermography, and security applications, including airborne and ground-based surveillance, condition monitoring, research and development, manufacturing process control, search and rescue, drug interdiction, navigation, transportation safety, border and maritime patrol, environmental monitoring, and chemical, biological, radiological, nuclear, and explosives (CBRNE) detection. Visit the Company's web site at www.FLIR.com.

Forward-Looking Statements
The statements in this release by Earl Lewis and the statements in the section captioned "Revenue and Earnings Outlook for 2013" above are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on current expectations, estimates and projections about FLIR's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including the following: changes in demand for FLIR's products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, FLIR's continuing compliance with U.S. export control laws and regulations, the timely receipt of any required export licenses, constraints on supplies of critical components, excess or shortage of production capacity, the ability to manufacture and ship the products in the time period required, actual purchases under agreements, the continuing eligibility of FLIR to act as a federal contractor, the amount and availability of appropriated government procurement funds and other risks discussed from time to time in FLIR's Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made and FLIR does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release, or for changes made to this document by wire services or Internet service providers.

   
FLIR SYSTEMS, INC.  
CONSOLIDATED STATEMENTS OF INCOME  
(In thousands, except per share amounts)(Unaudited)  
             
    Three Months Ended  
    March 31,  
    2013     2012  
                 
Revenue   $ 348,583     $ 348,452  
Cost of goods sold     164,596       165,725  
    Gross profit     183,987       182,727  
                 
Operating expenses:                
  Research and development     36,684       36,571  
  Selling, general and administrative     78,173       77,860  
    Total operating expenses     114,857       114,431  
                 
    Earnings from operations     69,130       68,296  
                 
Interest expense     2,897       3,066  
Interest income     (191 )     (428 )
Other expense (income), net     (764 )     (1,225 )
                 
    Earnings from continuing operations                
    before income taxes     67,188       66,883  
                 
Income tax provision     15,552       18,058  
                 
    Earnings from continuing operations     51,636       48,825  
                 
Loss from discontinued operations, net of tax     -       (686 )
                 
    Net earnings   $ 51,636     $ 48,139  
                 
Basic earnings per share:                
  Earnings from continuing operations   $ 0.36     $ 0.32  
  Discontinued operations     -       (0.00 )
    Basic earnings per share   $ 0.36     $ 0.31  
                 
Diluted earnings per share:                
  Earnings from continuing operations   $ 0.35     $ 0.31  
  Discontinued operations     -       (0.00 )
    Diluted earnings per share   $ 0.35     $ 0.31  
                 
Weighted average shares outstanding:                
  Basic     144,629       154,485  
  Diluted     146,291       156,972  
                   
                   
                   
FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)(Unaudited)
         
    March 31,   December 31,
    2013   2012
ASSETS        
             
Current assets:            
  Cash and cash equivalents   $ 246,007   $ 321,739
  Accounts receivable, net     306,081     335,163
  Inventories     389,995     381,378
  Prepaid expenses and other current assets     100,455     96,006
  Deferred income taxes, net     30,950     30,960
    Total current assets     1,073,488     1,165,246
             
Property and equipment, net     215,412     211,615
Deferred income taxes, net     32,211     32,223
Goodwill     545,042     503,078
Intangible assets, net     167,870     140,621
Other assets     44,352     124,722
    $ 2,078,375   $ 2,177,505
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
             
Current liabilities:            
  Accounts payable   $ 84,040   $ 94,156
  Deferred revenue     29,107     29,465
  Accrued payroll and related liabilities     41,287     41,506
  Accrued product warranties     13,557     13,169
  Advance payments from customers     15,367     12,150
  Accrued expenses     27,714     32,772
  Other current liabilities     3,937     4,331
  Accrued income taxes     -     11,943
    Total current liabilities     215,009     239,492
             
Long-term debt     248,434     248,319
Deferred income taxes     8,325     7,996
Accrued income taxes     22,119     22,812
Pension and other long-term liabilities     59,857     58,985
             
Commitments and contingencies            
             
Shareholders' equity     1,524,631     1,599,901
    $ 2,078,375   $ 2,177,505
             
             
             
FLIR SYSTEMS, INC.  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
(In thousands)(Unaudited)  
             
    Three Months Ended  
    March 31,  
    2013     2012  
                 
Cash flows from operating activities:                
  Net earnings   $ 51,636     $ 48,139  
  Income items not affecting cash:                
    Depreciation and amortization     14,871       15,207  
    Deferred income taxes     44       10  
    Stock-based compensation arrangements     5,696       5,535  
  Other non-cash items     2,374       (5,406 )
  Changes in operating assets and liabilities, net of acquisitions     (12,662 )     (14,490 )
Cash provided by operating activities     61,959       48,995  
                 
Cash flows from investing activities:                
  Additions to property and equipment, net     (12,648 )     (12,935 )
Cash used by investing activities     (12,648 )     (12,935 )
                 
Cash flows from financing activities:                
  Repurchase of common stock     (108,361 )     (25,389 )
  Dividends paid     (13,106 )     (10,784 )
  Proceeds from shares issued pursuant to stock-based compensation plans     1,179       876  
  Excess tax benefit of stock options exercised     234       338  
  Other financing activities     (22 )     (44 )
Cash used by financing activities     (120,076 )     (35,003 )
                 
Effect of exchange rate changes on cash     (4,967 )     6,263  
                 
Net (decrease) increase in cash and cash equivalents     (75,732 )     7,320  
Cash and cash equivalents, beginning of period     321,739       440,846  
Cash and cash equivalents, end of period   $ 246,007     $ 448,166  
                 
                 
                 

Contact Information

  • Company Contact:
    Shane Harrison
    +1 503.498.3547
    www.flir.com