FLIR Systems Announces Third Quarter 2013 Financial Results

FLIR Systems Announces Third Quarter 2013 Financial Results 
Revenue and EPS Consistent With Preliminary Results; Third Quarter
Revenue Increases 8% 
WILSONVILLE, OR -- (Marketwired) -- 10/24/13 --  FLIR Systems, Inc.
(NASDAQ: FLIR) today announced financial results for the third
quarter ended September 30, 2013. Revenue was $358.1 million, up 8%
compared to third quarter 2012 revenue of $332.2 million. Operating
income in the third quarter decreased by 14% to $63.5 million and net
income decreased 17% to $46.5 million. Third quarter earnings per
diluted share were $0.32, compared to $0.37 during the third quarter
a year ago. Cash provided by operations in the third quarter was
$52.5 million, compared to $46.4 million in the third quarter of
2012. 
Revenue from FLIR's Commercial Systems division increased 17% from
the third quarter of 2012, to $212.9 million. Within the Commercial
Systems division, revenue from the Thermal Vision and Measurement
segment was $177.1 million, an increase of 18% from the third quarter
results last year, due to the addition of the Lorex and Traficon
businesses. The Raymarine segment contributed $35.8 million of
revenue during the third quarter, up 13% from the prior year, driven
by successful new product introductions.  
Revenue from FLIR's Government Systems division decreased 4% from the
third quarter of 2012, to $145.2 million. Within the Government
Systems division, revenue from the Surveillance segment was $103
million, a decrease of 11% from the third quarter of 2012, impacted
negatively by weak book-and-ship order flow from the U.S. Government.
Revenue from the Detection segment was $13.1 million, a decrease of
15% compared to the third quarter of 2012 as the business continues
its strategy to reduce contract R&D activity. The Integrated Systems
segment contributed $29.2 million of revenue during the third
quarter, an increase of 48% from the prior year, due to deliveries
under the MSC contract during the third quarter of 2013. 
The Company's backlog of firm orders for delivery within the next
twelve months was approximately $523 million as of September 30,
2013, a decrease of $5 million during the quarter and $42 million
from a year ago. Backlog in the Government Systems division was $334
million, decreasing $5 million during the quarter and $58 million
from the prior year. Backlog in the Commercial Systems division was
$189 million, a decrease of $1 million during the quarter but an
increase of $16 million over the prior year.  
"Results for the third quarter were disappointing; however, with the
exception of our OEM cores business, our Commercial Systems business
grew mid-single digits with each of the major geographic regions
showing growth for the first time in two years. We were also pleased
with the performance of our recently acquired businesses, which
delivered good growth and profitability for the quarter," noted Andy
Teich, President and CEO of FLIR. "The weakness in order flow from
U.S. Government-funded customers affected our book-and-ship business
in the third quarter and, more importantly, the outlook for the
fourth quarter. In addition to our strategic realignment plan, we
have initiated changes to our cost structure to better operate under
the assumption of a challenging domestic government procurement
environment. We expect to see significant productivity and
profitability gains from these actions in 2014 and beyond."  
Revenue and Earnings Outlook for 2013 
 Based on financial results
for the first nine months of 2013 and the outlook for the remainder
of the year, FLIR now expects 2013 revenue to be in the range of
$1.45 billion to $1.5 billion and net income, excluding restructuring
charges associated with business realignment and cost reduction
initiatives as well as executive retirement charges, to be in the
range of $1.38 to $1.43 per diluted share. These estimates compare
with management's prior outlook of revenue of $1.5 billion to $1.6
billion and net income of $1.56 to $1.66 per diluted share. 
Dividend Declaration
 FLIR's Board of Directors has declared a
quarterly cash dividend of $0.09 per share on FLIR common stock,
payable December 6, 2013, to shareholders of record as of close of
business on November 18, 2013. 
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 Events & Presentations section at www.FLIR.com/investor. A
replay will be available after 11:00 a.m. ET (8:00 a.m. PT) at this
same internet address. Summary third quarter and historical financial
data can be accessed online soon after the release of the third
quarter results 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 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 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 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 ability to develop new products in an
efficient and timely manner, 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         Nine Months Ended    
                               September 30,             September 30,      
                         ------------------------  ------------------------ 
                             2013         2012         2013         2012    
                         -----------  -----------  -----------  ----------- 
                                                                            
Revenue                  $   358,141  $   332,230  $ 1,096,053  $ 1,018,973 
Cost of goods sold           185,251      158,877      549,134      492,865 
                         -----------  -----------  -----------  ----------- 
    Gross profit             172,890      173,353      546,919      526,108 
                                                                            
Operating expenses:                                                         
  Research and                                                              
   development                32,986       29,593      109,271      103,674 
  Selling, general and                                                      
   administrative             76,365       69,523      234,706      219,181 
                         -----------  -----------  -----------  ----------- 
    Total operating                                                         
     expenses                109,351       99,116      343,977      322,855 
                                                                            
    Earnings from                                                           
     operations               63,539       74,237      202,942      203,253 
                                                                            
Interest expense               3,696        3,096       10,361        8,930 
Interest income                 (256)        (268)        (721)      (1,073)
Other expense (income),                                                     
 net                              53        2,175         (536)       1,190 
                         -----------  -----------  -----------  ----------- 
                                                                            
    Earnings from                                                           
     continuing                                                             
     operations before                                                      
     income taxes             60,046       69,234      193,838      194,206 
                                                                            
Income tax provision          13,560       13,285       45,558       47,027 
                         -----------  -----------  -----------  ----------- 
                                                                            
    Earnings from                                                           
     continuing                                                             
     operations               46,486       55,949      148,280      147,179 
                                                                            
Loss from discontinued                                                      
 operations, net of tax            -          (44)           -       (2,042)
                         -----------  -----------  -----------  ----------- 
                                                                            
    Net earnings         $    46,486  $    55,905  $   148,280  $   145,137 
                         ===========  ===========  ===========  =========== 
                                                                            
Basic earnings per                                                          
 share:                                                                     
  Earnings from                                                             
   continuing operations $      0.33  $      0.37  $      1.04  $      0.96 
  Discontinued                                                              
   operations                      -        (0.00)           -        (0.01)
                         -----------  -----------  -----------  ----------- 
    Basic earnings per                                                      
     share               $      0.33  $      0.37  $      1.04  $      0.95 
                         ===========  ===========  ===========  =========== 
                                                                            
Diluted earnings per                                                        
 share:                                                                     
  Earnings from                                                             
   continuing operations $      0.32  $      0.37  $      1.02  $      0.95 
  Discontinued                                                              
   operations                      -        (0.00)           -        (0.01)
                         -----------  -----------  -----------  ----------- 
    Diluted earnings per                                                    
     share               $      0.32  $      0.37  $      1.02  $      0.94 
                         ===========  ===========  ===========  =========== 
                                                                            
Weighted average shares                                                     
 outstanding:                                                               
  Basic                      141,863      150,878      142,849      152,820 
                         ===========  ===========  ===========  =========== 
  Diluted                    144,231      152,327      144,831      154,758 
                         ===========  ===========  ===========  =========== 
                                                                            
                                                                            
                             FLIR SYSTEMS, INC.                             
                         CONSOLIDATED BALANCE SHEETS                        
                          (In thousands)(Unaudited)                         
                                                                            
                                                 September 30,  December 31,
                                                      2013          2012    
                                                 ------------- -------------
                                                                     As     
                     ASSETS                                     Adjusted(1) 
                                                                            
Current assets:                                                             
  Cash and cash equivalents                      $     492,199 $     321,739
  Accounts receivable, net                             281,611       335,163
  Inventories                                          376,033       381,378
  Prepaid expenses and other current assets             98,001        96,006
  Deferred income taxes, net                            31,659        30,960
                                                 ------------- -------------
    Total current assets                             1,279,503     1,165,246
                                                                            
Property and equipment, net                            229,844       211,615
Deferred income taxes, net                              32,235        32,223
Goodwill                                               567,611       562,586
Intangible assets, net                                 157,489       175,823
Other assets                                            59,194        41,442
                                                 ------------- -------------
                                                 $   2,325,876 $   2,188,935
                                                 ============= =============
                
                                                            
      LIABILITIES AND SHAREHOLDERS' EQUITY                                  
                                                                            
Current liabilities:                                                        
  Accounts payable                               $      93,861 $      94,156
  Deferred revenue                                      30,308        29,465
  Accrued payroll and related liabilities               39,139        41,506
  Accrued expenses                                      41,977        32,772
  Other current liabilities                             31,528        31,725
  Accrued income taxes                                       -        11,943
  Current portion long-term debt                        15,000             -
                                                 ------------- -------------
    Total current liabilities                          251,813       241,567
                                                                            
Long-term debt                                         376,163       248,319
Deferred income taxes                                   18,828        17,351
Accrued income taxes                                    22,410        22,812
Pension and other long-term liabilities                 50,151        58,985
                                                                            
Commitments and contingencies                                               
                                                                            
Shareholders' equity                                 1,606,511     1,599,901
                                                 ------------- -------------
                                                 $   2,325,876 $   2,188,935
                                                 ============= =============
                                                                            
(1) Amounts have been adjusted for the reclassification of goodwill and     
intangible assets related to business acquisitions made in December 2012.   
                                                                            
                                                                            
                             FLIR SYSTEMS, INC.                             
                   CONSOLIDATED STATEMENTS OF CASH FLOWS                    
                         (In thousands)(Unaudited)                          
                                                                            
                            Three Months Ended         Nine Months Ended    
                               September 30,             September 30,      
                         ------------------------  ------------------------ 
                             2013         2012         2013         2012    
                         -----------  -----------  -----------  ----------- 
                                           As                        As     
                                      Adjusted(1)               Adjusted(1) 
Cash flows from                                                             
 operating activities:                                                      
  Net earnings           $    46,486  $    55,905  $   148,280  $   145,137 
  Income items not                                                          
   affecting cash:                                                          
    Depreciation and                                                        
     amortization             14,876       14,843       44,978       44,859 
    Deferred income                                                         
     taxes                       (64)         504          (38)         599 
    Stock-based                                                             
     compensation                                                           
     arrangements              7,347        6,598       20,673       19,997 
  Other non-cash items         2,061          507        1,485       (1,864)
  Changes in operating                                                      
   assets and                                                               
   liabilities, net of                                                      
   acquisitions              (18,178)     (31,917)      34,413      (36,057)
                         -----------  -----------  -----------  ----------- 
Cash provided by                                                            
 operating activities         52,528       46,440      249,791      172,671 
                         -----------  -----------  -----------  ----------- 
                                                                            
Cash flows from                                                             
 investing activities:                                                      
  Additions to property                                                     
   and equipment, net        (13,706)     (12,759)     (36,997)     (39,188)
  Business acquisitions,                                                    
   net of cash acquired      (14,908)           -      (20,073)           - 
  Other investments                -            -            -       (3,000)
                         -----------  -----------  -----------  ----------- 
Cash used by investing                                                      
 activities                  (28,614)     (12,759)     (57,070)     (42,188)
                         -----------  -----------  -----------  ----------- 
                                                                            
Cash flows from                                                             
 financing activities:                                                      
  Proceeds from long                                                        
   term debt                       -            -      150,000            - 
  Repayments of long                                                        
   term debt                  (3,750)           -       (7,500)           - 
  Repurchase of common                                                      
   stock                     (16,219)     (38,809)    (133,049)    (129,010)
  Dividends paid             (12,786)     (10,537)     (38,695)     (32,020)
  Proceeds from shares                                                      
   issued pursuant to                                                       
   stock- based                                                             
   compensation plans          2,067        1,462        5,953        7,117 
  Excess tax benefit of                                                     
   stock options                                                            
   exercised                     459          679          928        1,231 
  Other financing                                                           
   activities                   (306)           2       (1,273)        (139)
                         -----------  -----------  -----------  ----------- 
Cash provided (used) by                                                     
 financing activities        (30,535)     (47,203)     (23,636)    (152,821)
                         -----------  -----------  -----------  ----------- 
                                                                            
Effect of exchange rate                                                     
 changes on cash               6,387        8,240        1,375        5,981 
                         -----------  -----------  -----------  ----------- 
                                                                            
Net increase (decrease)                                                     
 in cash and cash                                                           
 equivalents                    (234)      (5,282)     170,460      (16,357)
Cash and cash                                                               
 equivalents, beginning                                                     
 of period                   492,433      429,771      321,739      440,846 
                         -----------  -----------  -----------  ----------- 
Cash and cash                                                               
 equivalents, end of                                                        
 period                  $   492,199  $   424,489  $   492,199  $   424,489 
                         ===========  ===========  ===========  =========== 
                                                                            
(1) Amounts have been adjusted to conform to the presentation as of         
September 30, 2013.                                                         
                                                                            
                                                                            
                            
 FLIR SYSTEMS, INC.                             
              REVENUE AND EARNINGS FROM OPERATIONS BY SEGMENT               
                         (In thousands)(Unaudited)                          
                                                                            
                            Three Months Ended         Nine Months Ended    
                               September 30,             September 30,      
                         ------------------------  ------------------------ 
                             2013         2012         2013         2012    
                         -----------  -----------  -----------  ----------- 
REVENUE - EXTERNAL                                                          
 CUSTOMERS                                                                  
Thermal Vision and                                                          
 Measurement             $   177,101  $   149,540  $   519,452  $   447,922 
Raymarine                     35,800       31,659      127,087      125,443 
Surveillance                 102,966      115,915      331,824      350,005 
Detection                     13,103       15,401       40,016       50,467 
Integrated Systems            29,171       19,715       77,674       45,136 
                         -----------  -----------  -----------  ----------- 
                         $   358,141  $   332,230  $ 1,096,053  $ 1,018,973 
                         ===========  ===========  ===========  =========== 
                                                                            
EARNINGS (LOSS) FROM                                                        
 OPERATIONS                                                                 
Thermal Vision and                                                          
 Measurement             $    43,744  $    42,916  $   125,509  $   109,651 
Raymarine                      2,050          374       14,345        9,944 
Surveillance                  30,535       39,243      100,835      114,965 
Detection                      1,354        1,131        3,265          801 
Integrated Systems               (97)       1,333          112        1,267 
Other                        (14,047)     (10,760)     (41,124)     (33,375)
                         -----------  -----------  -----------  ----------- 
                         $    63,539  $    74,237  $   202,942  $   203,253 
                         ===========  ===========  ===========  =========== 

  
Company Contact:
Shane Harrison
+1 503.498.3547
www.flir.com 
 
 
Press spacebar to pause and continue. Press esc to stop.