SOURCE: FLIR Systems, Inc.

FLIR Systems, Inc.

July 26, 2012 07:30 ET

FLIR Systems Announces Second Quarter 2012 Financial Results

PORTLAND, OR--(Marketwire - Jul 26, 2012) - FLIR Systems, Inc. (NASDAQ: FLIR) today announced financial results for the second quarter ended June 30, 2012. Revenue was $338.3 million, down 14% compared to second quarter 2011 revenue of $391.6 million. Operating income in the second quarter was $60.7 million, compared to $41.8 million in the second quarter of 2011, and was negatively impacted by restructuring costs of approximately $6.8 million before tax. Second quarter 2012 net income was $41.1 million, or $0.27 per diluted share, compared with net income of $29.3 million, or $0.18 per diluted share in the second quarter a year ago. Excluding the net after tax impact of the restructuring costs referred to above, second quarter 2012 net income was $46.1 million, or $0.30 per diluted share. Cash provided by operations in the second quarter was $77.2 million. During the quarter, the Company repurchased 3 million shares of its common stock at an average price of $21.60 per share.

Revenue from the Company's Commercial Systems division decreased 12% from the second quarter of 2011, to $189.8 million. Within the Commercial Systems division, revenue from the Thermal Vision and Measurement segment was $142.6 million, a decrease of 13% from the second quarter results last year. The Raymarine segment contributed $47.2 million of revenue during the second quarter, down 6% from the prior year.

Revenue from the Company's Government Systems division decreased 16% from the second quarter of 2011, to $148.5 million. Within the Government Systems division, revenue from the Surveillance segment was $119.5 million, a decrease of 16% from the second quarter of 2011. Revenue from the Detection segment was $15.7 million, a decrease of 9% compared to the second quarter of 2011, and the Integrated Systems segment contributed $13.3 million of revenue during the second quarter, a decrease of 26% from the prior year.

The Company's backlog of firm orders for delivery within the next twelve months was approximately $498 million as of June 30, 2012, an increase of $41 million during the quarter. Backlog in the Government Systems division was $334 million, increasing $22 million during the quarter. Backlog in the Commercial Systems division was $164 million, up $19 million during the quarter.

"This second quarter proved difficult for our company," noted Earl Lewis, President and CEO of FLIR. "Macroeconomic conditions impacted many of our largest markets, but we continued to manage our business in response to these challenges. Both divisions had meaningful increases in backlog during the quarter, and we further streamlined our operations. While the first half of 2012 underperformed our expectations, we anticipate an improved second half and a return to earnings growth in the fourth quarter."

Revenue and Earnings Outlook for 2012
As announced previously, based on financial results for the first half of 2012 and the outlook for the remainder of the year, FLIR has modified its outlook for revenue and earnings per share for the full year 2012. Management currently expects revenue for 2012 to be in the range of $1.4 billion to $1.5 billion and net earnings to be in the range of $1.40 to $1.50 per diluted share. This compares to the prior outlook of $1.55 billion to $1.65 billion in revenue and $1.60 to $1.70 in earnings per diluted share for the full year 2012.

Dividend Declaration
FLIR's Board of Directors has declared a quarterly cash dividend of $0.07 per share on FLIR common stock, payable September 7, 2012, to shareholders of record as of close of business on August 20, 2012.

Conference Call
FLIR has scheduled a conference call at 8:00 a.m. ET (5:00 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 11:00 a.m. ET (8:00 a.m. PT) at this same Internet address. For a telephone replay, dial (877) 660-6853 after 11:00 a.m. ET and reference Account #407 and Conference ID #397563. Summary second 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 2012" 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     Six Months Ended  
    June 30,     June 30,  
    2012     2011(1)     2012     2011(1)  
                                 
Revenue   $ 338,291     $ 391,555     $ 686,743     $ 767,524  
Cost of goods sold     168,262       186,144       333,988       365,601  
    Gross profit     170,029       205,411       352,755       401,923  
                                 
Operating expenses:                                
  Research and development     37,510       39,481       74,080       77,070  
  Selling, general and administrative     71,798       124,127       149,658       206,735  
    Total operating expenses     109,308       163,608       223,738       283,805  
                                 
    Earnings from operations     60,721       41,803       129,017       118,118  
                                 
Interest expense     2,768       435       5,834       786  
Interest income     (377 )     (86 )     (805 )     (350 )
Other expense (income), net     240       (2,124 )     (984 )     (1,272 )
                                 
    Earnings from continuing operations before income taxes    
58,090
     
43,578
     
124,972
     
118,954
 
                                 
Income tax provision     15,685       13,755       33,742       37,528  
                                 
    Earnings from continuing operations     42,405       29,823       91,230       81,426  
                                 
Loss from discontinued operations, net of tax     (1,312 )     (514 )     (1,998 )     (802 )
                                 
    Net earnings   $ 41,093     $ 29,309     $ 89,232     $ 80,624  
                                 
Basic earnings per share:                                
   Earnings from continuing operations   $ 0.28     $ 0.19     $ 0.59     $ 0.51  
   Discontinued operations     (0.01 )     (0.00 )     (0.01 )     (0.01 )
     Basic earnings per share   $ 0.27     $ 0.18     $ 0.58     $ 0.51  
                                 
Diluted earnings per share:                                
  Earnings from continuing operations   $ 0.27     $ 0.18     $ 0.58     $ 0.50  
  Discontinued operations     (0.01 )     (0.00 )     (0.01 )     (0.00 )
    Diluted earnings per share   $ 0.27     $ 0.18     $ 0.57     $ 0.50  
                                 
Weighted average shares outstanding:                                
  Basic     153,172       159,796       153,829       159,599  
  Diluted     155,033       162,550       155,983       162,427  
                                 
 (1) Amounts have been adjusted for the reclassification of certain discontinued operations to continued operations.
 
 
 
FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)(Unaudited)
         
    June 30,   December 31,
    2012   2011
ASSETS            
             
Current assets:            
  Cash and cash equivalents   $ 429,771   $ 440,846
  Accounts receivable, net     268,550     325,370
  Inventories     350,791     336,051
  Prepaid expenses and other current assets     124,794     104,285
  Deferred income taxes, net     27,023     27,443
    Total current assets     1,200,929     1,233,995
             
Property and equipment, net     193,594     186,269
Deferred income taxes, net     31,857     31,644
Goodwill     497,728     498,343
Intangible assets, net     152,274     164,440
Other assets     38,424     32,338
    $ 2,114,806   $ 2,147,029
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
             
Current liabilities:            
  Accounts payable   $ 79,611   $ 84,190
  Deferred revenue     23,446     24,046
  Accrued payroll and related liabilities     44,794     49,475
  Accrued product warranties     13,232     13,370
  Advance payments from customers     10,425     13,219
  Accrued expenses     32,862     41,183
  Other current liabilities     4,057     3,886
  Accrued income taxes     -     2,161
    Total current liabilities     208,427     231,530
             
Long-term debt     248,090     247,861
Deferred income taxes     17,294     17,237
Accrued income taxes     18,138     17,537
Pension and other long-term liabilities     58,082     53,835
             
Commitments and contingencies            
             
Shareholders' equity     1,564,775     1,579,029
    $ 2,114,806   $ 2,147,029
             
             
   
   
FLIR SYSTEMS, INC.  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
(In thousands)(Unaudited)  
                         
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2012     2011     2012     2011  
                                 
Cash flows from operating activities:                                
  Net earnings   $ 41,093     $ 29,309     $ 89,232     $ 80,624  
  Income items not affecting cash:                                
    Depreciation and amortization     14,809       23,738       30,016       43,631  
    Deferred income taxes     86       (1,259 )     95       (1,324 )
    Stock-based compensation arrangements     7,865       7,588       13,400       13,876  
  Other non-cash items     4,056       (3,793 )     (1,350 )     (629 )
  Changes in operating assets and liabilities, net of acquisitions    
9,328
     
(36,178
)    
(5,162
)    
(54,387
)
Cash provided by operating activities     77,237       19,405       126,231       81,791  
                                 
Cash flows from investing activities:                                
  Additions to property and equipment, net     (13,494 )     (14,464 )     (26,429 )     (18,730 )
  Business acquisitions, net of cash acquired     -       (2,351 )     -       (2,351 )
  Other investments     (3,000 )     -       (3,000 )     -  
Cash used by investing activities     (16,494 )     (16,815 )     (29,429 )     (21,081 )
                                 
Cash flows from financing activities:                                
  Repurchase of common stock     (64,812 )     (17,026 )     (90,201 )     (23,801 )
  Dividends paid     (10,700 )     (9,598 )     (21,485 )     (19,168 )
  Proceeds from shares issued pursuant to stock-based compensation plans    
4,780
     
7,248
     
5,656
     
14,281
 
  Excess tax benefit of stock options exercised     214       734       552       2,326  
  Other financing activities     (98 )     (3 )     (140 )     (27 )
Cash used by financing activities     (70,616 )     (18,645 )     (105,618 )     (26,389 )
                                 
Effect of exchange rate changes on cash     (8,522 )     1,448       (2,259 )     8,164  
                                 
Net (decrease) increase in cash and cash equivalents     (18,395 )     (14,607 )     (11,075 )     42,485  
Cash and cash equivalents, beginning of period     448,166       250,229       440,846       193,137  
Cash and cash equivalents, end of period   $ 429,771     $ 235,622     $ 429,771     $ 235,622  
                                 

Contact Information

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