FLIR Systems Announces First Quarter 2013 Financial Results and Management Changes

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) -- 04/26/13 --  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 rep
orts. 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 
                                               =============  ============= 

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