SOURCE: FLIR Systems, Inc.

FLIR Systems, Inc.

February 07, 2013 07:30 ET

FLIR Systems Announces Fourth Quarter and Full Year 2012 Financial Results

Fourth Quarter EPS Increases 8%; Expects 2013 EPS to Rise 8% to 14%; Announces 29% Increase in Dividend and 25 Million Share Repurchase Authorization

PORTLAND, OR--(Marketwire - Feb 7, 2013) - FLIR Systems, Inc. (NASDAQ: FLIR) today announced financial results for the fourth quarter ended December 31, 2012. Revenue was $386.4 million, down 5% compared to fourth quarter 2011 revenue of $405.2 million. Operating income in the fourth quarter was $100.1 million, compared to $109.7 million in the fourth quarter of 2011. Fourth quarter 2012 net income was $77.3 million, or $0.52 per diluted share, compared with net income of $76.1 million, or $0.48 per diluted share in the fourth quarter a year ago. Cash provided by operations in the fourth quarter was $112.9 million. During the quarter, the Company repurchased 4.5 million shares of its common stock at an average price of $18.84 per share.

Revenue from the Company's Commercial Systems division decreased 5% from the fourth quarter of 2011, to $212.8 million. Within the Commercial Systems division, revenue from the Thermal Vision and Measurement segment was $180.1 million, a decrease of 5% from the fourth quarter results last year. The Raymarine segment contributed $32.7 million of revenue during the fourth quarter, down 7% from the prior year.

Revenue from the Company's Government Systems division decreased 4% from the fourth quarter of 2011, to $173.5 million. Within the Government Systems division, revenue from the Surveillance segment was $136.4 million, a decrease of 7% from the fourth quarter of 2011. Revenue from the Detection segment was $12.8 million, a decrease of 46% compared to the fourth quarter of 2011, and the Integrated Systems segment contributed $24.4 million of revenue during the fourth quarter, an increase of 134% from the prior year.

For the full year, revenue was $1,405.4 million, down 9% compared to $1,544.1 million for the year ended December 31, 2011. Operating income for 2012 was $303.3 million, down 3% from $313.2 million in 2011. Net income for 2012 was $222.4 million, or $1.45 per diluted share, compared with 2011 net income of $221.5 million, or $1.38 per diluted share. Cash provided by operations during the year was $285.5 million.

The Company's backlog of firm orders for delivery within the next twelve months was approximately $520 million as of December 31, 2012, a decrease of $45 million during the quarter. Backlog in the Government Systems division was $356 million, decreasing $36 million during the quarter. Backlog in the Commercial Systems division was $164 million, down $9 million during the quarter.

"The fourth quarter was an encouraging end to a 2012 that was focused on rationalizing our businesses to enhance operating leverage and prepare us well for 2013," said Earl Lewis, President and CEO of FLIR. "We saw higher bookings in the fourth quarter versus the prior year, helping us end 2012 with over $60 million more in order backlog than 2011. We also reached record operating cash flow for the year, which allowed us to acquire two very strategically significant businesses and return a significant amount of capital to our shareholders through repurchasing 10.5 million of our shares and distributing $42 million in dividends."

Revenue and Earnings Outlook for 2013
FLIR also announced today that it expects revenue in 2013 to be in the range of $1.5 billion to $1.6 billion, an increase of approximately 7% to 14% compared to 2012, and net earnings to be in the range of $1.56 to $1.66 per diluted share, an increase of approximately 8% to 14% compared to 2012.

Dividend Increase and Declaration
FLIR's Board of Directors has approved a quarterly cash dividend of $0.09 per share on FLIR common stock, an increase of 29% over the previous paid quarterly dividend of $0.07 per share. The Board of Directors has declared the dividend payable March 8, 2013, to shareholders of record as of close of business on February 19, 2013.

Share Repurchase Program
Also today, FLIR announced that its Board of Directors approved a new share repurchase program that authorizes up to 25 million shares to be repurchased over the next two years, replacing the previous program that expires on February 9, 2013. This authorization represents approximately 17% of FLIR's outstanding common stock as of December 31, 2012.

Any purchases made under the repurchase program may be made from time to time in the open market or through privately negotiated transactions. All purchases are subject to stock price, market conditions, corporate and legal requirements, and other factors. The timing of repurchases and the exact number of shares of common stock to be purchased will be determined by the Company's management, in its discretion, and will depend upon market conditions and other factors. The Company expects to fund the repurchases using the Company's cash on hand and cash generated from operations. The program may be extended, suspended, or discontinued at any time.

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 and the year. A simultaneous webcast of the conference call may be accessed online from the Upcoming Events 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 fourth 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 the Company'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 the Company's products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, the Company'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 the Company to act as a federal contractor, the amount and availability of appropriated government procurement funds and other risks discussed from time to time in the Company'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 the Company 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     Twelve Months Ended  
    December 31,     December 31,  
    2012     2011     2012     2011  
                                 
Revenue   $ 386,385     $ 405,212     $ 1,405,358     $ 1,544,062  
Cost of goods sold     181,104       180,427       673,968       715,458  
    Gross profit     205,281       224,785       731,390       828,604  
                                 
Operating expenses:                                
  Research and development     34,088       34,920       137,762       147,177  
  Selling, general and administrative     71,117       80,197       290,298       368,232  
    Total operating expenses     105,205       115,117       428,060       515,409  
                                 
    Earnings from operations     100,076       109,668       303,330       313,195  
                                 
Interest expense     2,729       3,175       11,659       5,487  
Interest income     (509 )     (768 )     (1,582 )     (1,273 )
Other expense (income), net     151       (892 )     1,341       (2,098 )
                                 
    Earnings from continuing operations before income taxes     97,705       108,153       291,912       311,079  
                                 
Income tax provision     19,528       31,318       66,556       88,427  
                                 
    Earnings from continuing operations     78,177       76,835       225,356       222,652  
                                 
Loss from discontinued operations, net of tax     (916 )     (705 )     (2,958 )     (1,178 )
                                 
    Net earnings   $ 77,261     $ 76,130     $ 222,398     $ 221,474  
                                 
Basic earnings per share:                                
  Earnings from continuing operations   $ 0.53     $ 0.49     $ 1.49     $ 1.41  
  Discontinued operations     (0.01 )     (0.00 )     (0.02 )     (0.01 )
    Basic earnings per share   $ 0.52     $ 0.49     $ 1.47     $ 1.40  
                                 
Diluted earnings per share:                                
  Earnings from continuing operations   $ 0.52     $ 0.49     $ 1.47     $ 1.38  
  Discontinued operations     (0.01 )     (0.00 )     (0.02 )     (0.01 )
    Diluted earnings per share   $ 0.52     $ 0.48     $ 1.45     $ 1.38  
                                 
Weighted average shares outstanding:                                
  Basic     148,103       155,647       151,634       158,323  
  Diluted     149,419       157,611       153,595       160,851  
 
 
 
FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands) (Unaudited)
         
    December 31,   December 31,
    2012   2011
ASSETS            
             
Current assets:            
  Cash and cash equivalents   $ 321,739   $ 440,846
  Accounts receivable, net     335,163     329,581
  Inventories     381,378     336,051
  Prepaid expenses and other current assets     96,006     104,285
  Deferred income taxes, net     30,960     27,443
    Total current assets     1,165,246     1,238,206
             
Property and equipment, net     211,615     186,269
Deferred income taxes, net     32,223     31,644
Goodwill     503,078     498,343
Intangible assets, net     140,621     164,440
Other assets     124,722     32,338
    $ 2,177,505   $ 2,151,240
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
             
Current liabilities:            
  Accounts payable   $ 94,156   $ 84,190
  Deferred revenue     29,465     28,257
  Accrued payroll and related liabilities     41,506     49,475
  Accrued product warranties     13,169     13,370
  Advance payments from customers     12,150     13,219
  Accrued expenses     32,772     41,183
  Other current liabilities     4,331     3,886
  Accrued income taxes     11,943     2,161
    Total current liabilities     239,492     235,741
             
Long-term debt     248,319     247,861
Deferred income taxes     7,996     17,237
Accrued income taxes     22,812     17,537
Pension and other long-term liabilities     58,985     53,835
             
Commitments and contingencies            
             
Shareholders' equity     1,599,901     1,579,029
    $ 2,177,505   $ 2,151,240
   
   
   
FLIR SYSTEMS, INC.  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
(In thousands) (Unaudited)  
   
    Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
    2012     2011     2012     2011  
                                 
Cash flows from operating activities:                                
  Net earnings   $ 77,261     $ 76,130     $ 222,398     $ 221,474  
  Income items not affecting cash:                                
    Depreciation and amortization     14,857       16,290       59,715       77,498  
    Deferred income taxes     (11,539 )     (10,291 )     (10,940 )     (12,195 )
    Stock-based compensation arrangements     6,252       5,604       26,250       24,917  
  Other non-cash items     4,522       9,647       (1,810 )     12,654  
  Changes in operating assets and liabilities, net of acquisitions     21,521       18,816       (10,068 )     (80,457 )
Cash provided by operating activities     112,874       116,196       285,545       243,891  
                                 
Cash flows from investing activities:                                
  Additions to property and equipment, net     (18,901 )     (10,850 )     (58,089 )     (41,946 )
  Business acquisitions, net of cash acquired     (105,909 )     -       (105,909 )     (27,182 )
  Other investments     (2 )     1,991       (3,002 )     1,991  
Cash used by investing activities     (124,812 )     (8,859 )     (167,000 )     (67,137 )
                                 
Cash flows from financing activities:                                
  Proceeds from long term debt, net     -       -       -       247,708  
  Repurchase of common stock     (85,185 )     (36,286 )     (214,195 )     (160,669 )
  Dividends paid     (10,428 )     (9,350 )     (42,450 )     (38,037 )
  Proceeds from shares issued pursuant to stock- based compensation plans     4,080       6,620       11,198       21,706  
  Excess tax benefit of stock options exercised     53       727       1,284       5,195  
  Other financing activities     (28 )     (140 )     (166 )     (458 )
Cash (used) provided by financing activities     (91,508 )     (38,429 )     (244,329 )     75,445  
                                 
Effect of exchange rate changes on cash     696       (2,561 )     6,677       (4,490 )
                                 
Net (decrease) increase in cash and cash equivalents     (102,750 )     66,347       (119,107 )     247,709  
Cash and cash equivalents, beginning of period     424,489       374,499       440,846       193,137  
Cash and cash equivalents, end of period   $ 321,739     $ 440,846     $ 321,739     $ 440,846  

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