SOURCE: FLIR Systems, Inc.

FLIR Systems, Inc.

October 21, 2010 07:30 ET

FLIR Systems Announces Third Quarter 2010 Financial Results

Revenue Up by 16%; Increasing Revenue and EPS Outlook for 2010

PORTLAND, OR--(Marketwire - October 21, 2010) -  FLIR Systems, Inc. (NASDAQ: FLIR) today announced financial results for the third quarter ended September 30, 2010. Revenue was $332.5 million, up 16% compared to third quarter 2009 revenue of $285.6 million. Operating income in the third quarter was $85.8 million, compared to $89.3 million in the third quarter of 2009. Third quarter 2010 net income was $63.0 million, or $0.39 per diluted share, compared with net income of $60.0 million, or $0.38 per diluted share in the third quarter a year ago. Cash provided by operations in the third quarter was $85.1 million.

During the third quarter, Raymarine contributed $36.9 million of revenue and $1.0 million of operating income. Corporate expenses were impacted by $2.5 million in costs associated with the acquisition of ICx Technologies. The Company also reached an agreement in principle to settle all pending patent claims relating to a lawsuit dating back to 2007. This settlement resulted in an accrual of $3.0 million in the third quarter.

Revenue for the nine months ended September 30, 2010 was $950.9 million, up 14% compared to revenue for the first nine months of 2009 of $835.5 million. Operating income for the nine months ended September 30, 2010 was $259.9 million, up 1% from the same period a year ago. Net income for the nine months ended September 30, 2010 was $178.3 million, or $1.11 per diluted share, compared with net income of $170.0 million, or $1.07 per diluted share, in the same period a year ago. Acquisition-related expenses, including expenses associated with post-acquisition restructuring at Raymarine, totaled $8.3 million in the first nine months of the year. Cash provided by operations for the first nine months of 2010 was $209.9 million.

Revenue during the quarter from the Company's Government Systems division was flat from the third quarter of 2009, at $163.2 million. Revenue from the Company's Commercial Systems division, excluding Raymarine, increased 8% from the third quarter of 2009, to $132.4 million. Within the Commercial Systems division, revenue from Commercial Vision Systems increased 17% from the third quarter of last year, to $61.4 million, reflecting strong growth in transportation, cores and personal vision systems. Revenue from Thermography increased 2% from the third quarter of last year, to $71.0 million, with growth in gas imaging and test and measurement markets partially offset by weakness in Europe.

The Company's backlog of firm orders for delivery within the next twelve months was approximately $533 million at September 30, 2010, an increase of $15 million during the quarter. Backlog in the Government Systems division was $386 million, up $10 million during the quarter, due to strong U.S. government orders. Backlog in the Commercial Vision Systems division was $116 million, up $12 million during the quarter, while backlog in the Thermography division was $23 million, up $1 million during the quarter.

"We are very pleased with our third quarter results. Operating income was reduced by legal reserves and acquisition-related costs, but these costs were largely offset by a lower tax rate and our resulting margins were very strong. We continue to execute on our strategy and deliver strong operating performance. Our Government Systems division was able to grow backlog in an unclear political environment. The Commercial Systems division continues to grow rapidly while increasing profitability. Our initiatives to diversify our end-markets, reduce costs, innovate, and strengthen our financial position have positioned us very well for continued growth into the future," noted Earl Lewis, President and CEO.

Revenue and Earnings Outlook for 2010
Based on financial results for the first nine months of 2010, the recent Raymarine and ICx acquisitions, and the outlook for the remainder of the year, FLIR management is increasing its outlook for revenue and earnings per share for the full year 2010. Management currently expects revenue for 2010 to be in the range of $1.375 billion to $1.4 billion and net earnings to be in the range of $1.53 to $1.56 per diluted share.

Conference Call
FLIR has scheduled a conference call at 11:00 am ET today. A simultaneous webcast will be available from the Investor Relations link at A replay will be available after 2:00 PM ET at this same internet address. For a telephone replay, dial (800) 642-1687, Conference ID #16315804 after 2:00 PM ET.

About FLIR Systems
FLIR Systems, Inc. is a world leader in the design, manufacture and marketing of thermal imaging and stabilized camera systems for a wide variety of thermography and imaging applications including condition monitoring, research and development, manufacturing process control, airborne observation and broadcast, search and rescue, drug interdiction, surveillance and reconnaissance, navigation safety, border and maritime patrol, environmental monitoring and ground-based security. Visit the Company's web site at

Forward-Looking Statements
The statements in this release by Earl R. Lewis and the statements in the section captioned "Revenue and Earnings Outlook for 2010" 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.

(Tables Attached)

(In thousands, except per share amounts)(Unaudited)
    Three Months Ended   Nine Months Ended
     September 30,    September 30,
    2010   2009   2010   2009
Revenue   $ 332,497   $ 285,553   $ 950,928   $ 835,527
Cost of goods sold     150,389     122,736     420,143     353,047
    Gross profit     182,108     162,817     530,785     482,480
Operating expenses:                        
  Research and development     28,520     21,294     81,632     66,935
  Selling, general and administrative     67,801     52,204     189,209     158,199
    Total operating expenses     96,321     73,498     270,841     225,134
    Earnings from operations     85,787     89,319     259,944     257,346
Interest expense     349     1,238     2,472     5,743
Other expense (income), net     (1,085)     1,664     (3,318)     1,732
    Earnings before income taxes     86,523     86,417     260,790     249,871
Income tax provision     23,568     26,382     82,486     79,912
    Net earnings   $ 62,955   $ 60,035   $ 178,304   $ 169,959
Net earnings per share:                        
  Basic   $ 0.40   $ 0.40   $ 1.15   $ 1.14
  Diluted   $ 0.39   $ 0.38   $ 1.11   $ 1.07
Weighted average shares outstanding:                        
  Basic     158,215     151,573     155,223     148,475
  Diluted     160,925     160,287     161,440     161,477
(In thousands)(Unaudited)
    September 30, 2010   December 31, 2009
Current assets:            
   Cash and cash equivalents   $ 379,903   $ 422,047
   Accounts receivable, net     272,501     234,974
   Inventories     264,757     216,500
   Prepaid expenses and other current assets     87,847     93,276
   Deferred income taxes, net     15,893     13,231
     Total current assets     1,020,901     980,028
Property and equipment, net     176,586     139,112
Deferred income taxes, net     17,878     5,322
Goodwill     366,431     262,331
Intangible assets, net     124,579     59,180
Other assets     28,891     48,571
    $ 1,735,266   $ 1,494,544
Current liabilities:            
   Accounts payable   $ 78,428   $ 53,319
   Deferred revenue     15,398     20,986
   Accrued payroll and related liabilities     38,860     39,809
   Accrued product warranties     18,147     9,438
   Advance payments from customers     13,737     8,616
   Accrued expenses     31,980     25,941
   Other current liabilities     7,442     13,273
   Accrued income taxes     11,768     15,504
     Total current liabilities     215,760     186,886
Long-term debt     --     58,022
Deferred income taxes     23,952     2,222
Accrued income taxes     8,732     4,550
Pension and other long-term liabilities     46,695     39,115
Commitments and contingencies            
Shareholders' equity     1,440,127     1,203,749
    $ 1,735,266   $ 1,494,544

Contact Information

  • Company Contact:
    Shane Harrison
    +1 503.498.3162