SOURCE: FLIR Systems, Inc.

FLIR Systems, Inc.

April 24, 2015 07:30 ET

FLIR Systems Announces First Quarter 2015 Financial Results

EPS Increases 62%

WILSONVILLE, OR--(Marketwired - Apr 24, 2015) - FLIR Systems, Inc. (NASDAQ: FLIR) today announced financial results for the first quarter ended March 31, 2015. Revenue was $344.5 million, down 2% compared to first quarter 2014 revenue of $351.5 million. Foreign currency exchange fluctuations negatively impacted revenue growth by approximately 5 percentage points year over year. Operating income in the first quarter was $65.8 million, compared to $42.5 million in the first quarter of 2014. Operating income was impacted by pretax charges related to previously-announced restructuring initiatives of $0.3 million in the first quarter of 2015 and $8.4 million in the first quarter of 2014. First quarter 2015 net income was $47.9 million, or $0.34 per diluted share, compared with net income of $29.9 million, or $0.21 per diluted share in the first quarter a year ago. Net income was impacted by after-tax restructuring charges of $0.2 million in the first quarter of 2015 and $6.4 million, or $0.04 per diluted share, in the first quarter of 2014. Cash provided by operations in the first quarter of 2015 was $74.9 million.

The Surveillance segment contributed $112.9 million of revenue during the first quarter, down 8% from the prior year. The Instruments segment had $83.8 million of revenue, in-line with the prior year. FLIR's OEM & Emerging Markets segment recorded revenue of $39.8 million in the first quarter, down 17% from the prior year. Revenue from the Maritime segment was $51 million, down 3% from the first quarter of 2014. Security segment revenue was $38.8 million, an increase of 32% over the first quarter results last year. The Detection segment contributed $18.2 million of revenue, an increase of 25% from the prior year.

FLIR's backlog of firm orders for delivery within the next twelve months was approximately $557 million as of March 31, 2015, an increase of $10 million, or 2%, during the quarter and an increase of $43 million, or 8%, over the prior year.

"The results for the first quarter of 2015 were in line with our expectations. Despite strong movement in the U.S. dollar that created a headwind for our top line, we improved our margins and earnings per share significantly," said Andy Teich, President and CEO of FLIR. "Since the end of 2014, we have introduced several new products that address the needs of customers in many existing and new markets, from the highest-end surveillance and R&D products to consumer-level home monitoring systems. Our cost curve continues to scale down and is creating opportunity for us to expand the markets for advanced imaging and sensing technology."

Revenue and Earnings Outlook for 2015

Based on financial results for the first three months of 2015 and the outlook for the remainder of the year, FLIR continues to expect revenue for the full year 2015 to be in the range of $1.55 billion to $1.6 billion and net earnings, excluding restructuring charges, to be in the range of $1.60 to $1.70 per diluted share.

Dividend Declaration

FLIR's Board of Directors has declared a quarterly cash dividend of $0.11 per share on FLIR common stock, payable June 5, 2015, to shareholders of record as of close of business on May 22, 2015.

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 and the accompanying summary presentation may be accessed online from a link in the Events & Presentations section of www.FLIR.com/investor. 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 may be accessed online from the Financial Info Database link at 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. FLIR's advanced systems and components are used for a wide variety of thermal imaging, situational awareness, and security applications, including airborne and ground-based surveillance, condition monitoring, navigation, recreation, research and development, manufacturing process control, search and rescue, drug interdiction, transportation safety, border and maritime patrol, environmental monitoring, and chemical, biological, radiological, nuclear, and explosives (CBRNE) threat detection. For more information, visit FLIR's web site at www.FLIR.com.

Forward-Looking Statements

The statements in this release by Andy Teich and the statements in the section captioned "Revenue and Earnings Outlook for 2015" 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,  
    2015     2014  
                 
Revenue   $ 344,517     $ 351,542  
Cost of goods sold     168,620       183,010  
    Gross profit     175,897       168,532  
                 
Operating expenses:                
  Research and development     34,694       36,326  
  Selling, general and administrative     75,135       81,942  
  Restructuring expenses     314       7,813  
    Total operating expenses     110,143       126,081  
                 
    Earnings from operations     65,754       42,451  
                 
Interest expense     3,661       3,708  
Interest income     (247 )     (264 )
Other income, net     (700 )     (198 )
                 
                 
    Earnings before income taxes     63,040       39,205  
                 
Income tax provision     15,130       9,311  
                 
    Net earnings   $ 47,910     $ 29,894  
                 
Earnings per share:                
  Basic   $ 0.34     $ 0.21  
  Diluted   $ 0.34     $ 0.21  
                 
Weighted average shares outstanding:                
  Basic     139,768       140,932  
  Diluted     141,472       143,828  
                   
                   
         
         
FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)(Unaudited)
         
    March 31,   December 31,
    2015   2014
ASSETS            
             
Current assets:            
  Cash and cash equivalents   $ 547,780   $ 531,374
  Accounts receivable, net     311,787     354,658
  Inventories     340,300     320,605
  Prepaid expenses and other current assets     83,165     93,691
  Deferred income taxes, net     38,394     38,873
    Total current assets     1,321,426     1,339,201
             
Property and equipment, net     249,002     247,094
Deferred income taxes, net     20,278     19,941
Goodwill     536,780     553,335
Intangible assets, net     125,818     133,212
Other assets     59,054     61,240
    $ 2,312,358   $ 2,354,023
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
             
Current liabilities:            
  Accounts payable   $ 106,120   $ 98,173
  Deferred revenue     27,439     27,878
  Accrued payroll and related liabilities     48,478     62,065
  Accrued expenses     48,050     51,810
  Accrued income taxes     2,298     4,586
  Other current liabilities     47,157     50,045
  Current portion long-term debt     15,000     15,000
    Total current liabilities     294,542     309,557
             
Long-term debt     354,351     357,986
Deferred income taxes     13,486     13,905
Accrued income taxes     11,242     11,096
Other long-term liabilities     52,919     51,706
             
Commitments and contingencies            
             
Shareholders' equity     1,585,818     1,609,773
    $ 2,312,358   $ 2,354,023
             
             
   
   
FLIR SYSTEMS, INC.  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
(In thousands)(Unaudited)  
             
    Three Months Ended  
    March 31,  
    2015     2014  
                 
Cash flows from operating activities:                
  Net earnings   $ 47,910     $ 29,894  
  Income items not affecting cash:                
    Depreciation and amortization     12,489       16,470  
    Deferred income taxes     96       1,507  
    Stock-based compensation arrangements     4,757       8,756  
  Other non-cash items     (3,303 )     (1,490 )
  Changes in operating assets and liabilities     12,978       4,688  
Cash provided by operating activities     74,927       59,825  
                 
Cash flows from investing activities:                
  Additions to property and equipment, net     (13,139 )     (9,590 )
Cash used by investing activities     (13,139 )     (9,590 )
                 
Cash flows from financing activities:                
  Repayments of long term debt     (3,750 )     (3,750 )
  Repurchase of common stock     -       (1,766 )
  Dividends paid     (15,377 )     (14,085 )
  Proceeds from shares issued pursuant to stock-based compensation plans    
4,414
     
8,876
 
  Excess tax benefit of stock options exercised     779       2,698  
  Other financing activities     (7 )     252  
Cash used by financing activities     (13,941 )     (7,775 )
                 
  Effect of exchange rate changes on cash     (31,441 )     (841 )
                 
  Net increase in cash and cash equivalents     16,406       41,619  
Cash and cash equivalents:                
  Beginning of period     531,374       542,476  
  End of period   $ 547,780     $ 584,095  
                 
                 
   
   
FLIR SYSTEMS, INC.  
REVENUE AND EARNINGS FROM OPERATIONS BY SEGMENT  
(In thousands)(Unaudited)  
             
    Three Months Ended  
    March 31,  
    2015     2014  
REVENUE                
  Surveillance   $ 112,901     $ 123,087  
  Instruments     83,821       84,056  
  OEM and Emerging Markets     39,834       47,915  
  Maritime     50,972       52,575  
  Security     38,806       29,309  
  Detection     18,183       14,600  
    $ 344,517     $ 351,542  
                 
EARNINGS (LOSS) FROM OPERATIONS                
  Surveillance   $ 30,167     $ 23,266  
  Instruments     28,063       20,450  
  OEM and Emerging Markets     8,779       8,806  
  Maritime     4,789       8,830  
  Security     3,816       1,686  
  Detection     2,680       (1,800 )
  Other     (12,540 )     (18,787 )
    $ 65,754     $ 42,451  
                 
                 

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