FLIR Systems Announces Fourth Quarter and Full Year 2013 Financial Results

FLIR Systems Announces Fourth Quarter and Full Year 2013 Financial Results 
Record Annual Cash Flow From Operations; Announces 11% Increase in
Dividend 
WILSONVILLE, OR -- (Marketwired) -- 02/07/14 --  FLIR Systems, Inc.
(NASDAQ: FLIR) today announced financial results for the fourth
quarter ended December 31, 2013. Revenue was $400.3 million, up 4%
compared to fourth quarter 2012 revenue of $386.4 million. Operating
income in the fourth quarter was $37.8 million, compared to $100.1
million in the fourth quarter of 2012, and was impacted by $31
million in pretax charges related to previously announced
restructuring initiatives and the settlement of executive retirement
benefits. Fourth quarter 2013 net income was $28.7 million, or $0.20
per diluted share, compared with net income of $77.3 million, or
$0.52 per diluted share in the fourth quarter a year ago. The net
after tax impact of the restructuring and retirement benefits charges
in the fourth quarter was approximately $21 million, or $0.15 per
diluted share.  
Cash provided by operations in the fourth quarter was $105.2 million,
a decrease of 7% compared to the fourth quarter of 2012. During the
quarter, FLIR repurchased one million shares of its common stock at
an average price of $28.95 per share. 
Revenue from FLIR's Commercial Systems division increased 15% from
the fourth quarter of 2012, to $244.6 million. Within the Commercial
Systems division, revenue from the Thermal Vision and Measurement
segment was $208.5 million, an increase of 16% from the fourth
quarter results last year. The Raymarine segment contributed $36.1
million of revenue during the fourth quarter, up 10% from the prior
year.  
Revenue from FLIR's Government Systems division decreased 10% from
the fourth quarter of 2012, to $155.7 million. Within the Government
Systems division, revenue from the Surveillance segment was $124.7
million, a decrease of 9% from the fourth quarter of 2012. Revenue
from the Detection segment was $13.2 million, an increase of 3%
compared to the fourth quarter of 2012, and the Integrated Systems
segment contributed $17.9 million of revenue during the fourth
quarter, compared with revenue of $24.4 million in the prior year. 
For the full year, revenue was $1,496.4 million, up 6% compared to
$1,405.4 million for the year ended December 31, 2012. Operating
income for 2013 was $240.7 million compared to $303.3 million in
2012. Net income for 2013 was $177 million, or $1.22 per diluted
share, compared with 2012 net income of $222.4 million, or $1.45 per
diluted share. Cash provided by operations reached a record high $355
million during the year, growing 24% over 2012. 
FLIR's backlog of firm orders for delivery within the next twelve
months was approximately $490 million as of December 31, 2013, a
decrease of $33 million during the quarter. Backlog in the Government
Systems division was $294 million, decreasing $41 million during the
quarter. Backlog in the Commercial Systems division was $196 million,
up $8 million during the quarter. 
"The new products and core technologies we've recently introduced
coupled with the organizational changes we launched in the fourth
quarter of 2013 paves the way for FLIR's entrance into several new
high volume markets," said Andy Teich, President and CEO of FLIR.
"Our financial results were impacted by slowed activity from domestic
defense customers and our planned spending and restructuring charges;
however, we recorded a record level of cash flow in 2013. Our recent
realigning of our operations will create a streamlined organizational
structure that focuses on our customers, leverages our vertical
integration, employs our CDMQ model for government markets, and
furthers our ability to deliver on our goal of 'infrared
everywhere.'" 
Revenue and Earnings Outlook for 2014
 FLIR also announced today that
it currently expects revenue in 2014 to be in the range of $1.45
billion to $1.55 billion and net earnings excluding restructuring
charges associated with the business realignment to be in the range
of $1.40 to $1.50 per diluted share.  
Dividend Increase and Declaration
 FLIR's Board of Directors has
approved a quarterly cash dividend of $0.10 per share on FLIR common
stock, an increase of 11% over the previous paid quarterly dividend
of $0.09 per share. The Board of Directors has declared the dividend
payable March 7, 2014, to shareholders of record as of close of
business on February 19, 2014. 
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 a link in the Events & Presentations 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 can be accessed online soon after the
release of the fourth 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 systems and components are
used for a wide variety of thermal imaging, situational awareness,
and security applications, including airborne and ground-based
surveillance, condition monitoring, navigation, recreation, research
and development, manufacturing process control, search and rescue,
drug interdiction, transportation safety, border and maritime patrol,
environmental monitoring, and chemical, biological, radiological,
nuclear, and explosives (CBRNE) threat detection. For more
information, 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 2014" 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 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 eve
nts or
circumstances after the date of this release, or for changes made to
this document by wire services or internet service providers.  
(Tables Below) 


 
                                                                            
                                                                            
                             FLIR SYSTEMS, INC.                             
                     CONSOLIDATED STATEMENTS OF INCOME                      
            (In thousands, except per share amounts)(Unaudited)             
                                                                            
                                 Three Months Ended    Twelve Months Ended  
                                    December 31,          December 31,      
                                 ------------------  ---------------------- 
                                   2013      2012       2013        2012    
                                 --------  --------  ----------  ---------- 
                                                                            
Revenue                          $400,319  $386,385  $1,496,372  $1,405,358 
Cost of goods sold                210,228   181,010     759,362     670,174 
                                 --------  --------  ----------  ---------- 
    Gross profit                  190,091   205,375     737,010     735,184 
                                                                            
Operating expenses:                                                         
  Research and development         38,425    33,704     147,696     137,354 
  Selling, general and                                                      
   administrative                  88,033    70,482     322,739     292,500 
  Restructuring expenses           25,832     1,113      25,832       2,000 
                                 --------  --------  ----------  ---------- 
    Total operating expenses      152,290   105,299     496,267     431,854 
                                                                            
    Earnings from operations       37,801   100,076     240,743     303,330 
                                                                            
Interest expense                    3,731     2,729      14,091      11,659 
Interest income                      (337)     (509)     (1,058)     (1,582)
Other (income) expense, net          (741)      151      (1,276)      1,341 
                                 --------  --------  ----------  ---------- 
                                                                            
    Earnings from continuing                                                
     operations before income                                               
     taxes                         35,148    97,705     228,986     291,912 
Income tax provision                6,413    19,528      51,971      66,556 
                                 --------  --------  ----------  ---------- 
    Earnings from continuing                                                
     operations                    28,735    78,177     177,015     225,356 
Loss from discontinued                                                      
 operations, net of tax                 -      (916)          -      (2,958)
                                 --------  --------  -----
-----  ---------- 
    Net earnings                 $ 28,735  $ 77,261  $  177,015  $  222,398 
                                 ========  ========  ==========  ========== 
                                                                            
Basic earnings per share:                                                   
  Earnings from continuing                                                  
   operations                    $   0.20  $   0.53  $     1.24  $     1.49 
  Discontinued operations               -     (0.01)          -       (0.02)
                                 --------  --------  ----------  ---------- 
    Basic earnings per share     $   0.20  $   0.52  $     1.24  $     1.47 
                                 ========  ========  ==========  ========== 
                                                                            
Diluted earnings per share:                                                 
  Earnings from continuing                                                  
   operations                    $   0.20  $   0.52  $     1.22  $     1.47 
  Discontinued operations               -     (0.01)          -       (0.02)
                                 --------  --------  ----------  ---------- 
    Diluted earnings per share   $   0.20  $   0.52  $     1.22  $     1.45 
                                 ========  ========  ==========  ========== 
                                                                            
Weighted average shares                                                     
 outstanding:                                                               
  Basic                           141,250   148,103     142,446     151,634 
                                 ========  ========  ==========  ========== 
  Diluted                         143,441   149,419     144,595     153,595 
                                 ========  ========  ==========  ========== 
                                                                            
                                                                            
                                                                            
                                                                            
                             FLIR SYSTEMS, INC.                             
                         CONSOLIDATED BALANCE SHEETS                        
                          (In thousands)(Unaudited)                         
                                                                            
                                                   December 31, December 31,
                                                       2013         2012    
                                                   ------------ ------------
ASSETS                                                                      
                                                                            
Current assets:                                                             
  Cash and cash equivalents                        $    542,476 $    321,739
  Accounts receivable, net                              286,573      335,163
  Inventories                                           344,719      379,080
  Prepaid expenses and other current assets              97,574       98,304
  Deferred income taxes, net                             35,456       30,960
                                                   ------------ ------------
    Total current assets                              1,306,798    1,165,246
                                                                            
Property and equipment, net                             234,041      211,615
Deferred income taxes, net                               20,663       32,223
Goodwill                                                575,701      564,306
Intangible assets, net                                  154,195      175,823
Other assets                                             51,808       41,442
                    
                               ------------ ------------
                                                   $  2,343,206 $  2,190,655
                                                   ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY                                        
                                                                            
Current liabilities:                                                        
  Accounts payable                                 $     85,730 $     94,156
  Deferred revenue                                       28,844       29,465
  Accrued payroll and related liabilities                62,069       41,506
  Accrued expenses                                       39,316       32,772
  Other current liabilities                              44,893       31,725
  Accrued income taxes                                      663       11,943
  Current portion long-term debt                         15,000            -
                              
                     ------------ ------------
    Total current liabilities                           276,515      241,567
                                                                            
Long-term debt                                          372,528      248,319
Deferred income taxes                                    12,101       19,071
Accrued income taxes                                     19,996       22,812
Pension and other long-term liabilities                  48,686       58,985
                                                                            
Commitments and contingencies                                               
                                                                            
Shareholders' equity                                  1,613,380    1,599,901
                                                   ------------ ------------
                                                   $  2,343,206 $  2,190,655
                                                   ============ ============
                                                                            
                                                                            
                                                                            
                                                                            
                             FLIR SYSTEMS, INC.                             
                   CONSOLIDATED STATEMENTS OF CASH FLOWS                    
                         (In thousands)(Unaudited)                          
                                                                            
                                  Three Months Ended    Twelve Months Ended 
                                     December 31,          December 31,     
                                 --------------------  -------------------- 
                                    2013       2012       2013       2012   
                                 ---------  ------
---  ---------  --------- 
                                                                            
Cash flows from operating                                                   
 activities:                                                                
  Net earnings                   $  28,735  $  77,261  $ 177,015  $ 222,398 
  Income items not affecting                                                
   cash:                                                                    
    Depreciation and                                                        
     amortization                   17,818     14,857     62,796     59,715 
    Deferred income taxes             (950)    (9,819)      (988)    (9,220)
    Stock-based compensation                                                
     arrangements                    7,150      6,252     27,823     26,250 
  Other non-cash items               3,080      3,953      4,564      2,088 
  Changes in operating assets                                               
   and liabilities, net of                                                  
   acquisitions                     49,341     20,370     83,755    (15,686)
                                 ---------  ---------  ---------  --------- 
Cash provided by operating                                                  
 activities                        105,174    112,874    354,965    285,545 
                                 ---------  ---------  ---------  --------- 
                                                                            
Cash flows from investing                                                   
 activities:                                                                
  Additions to property and                                                 
   equipment, net                  (15,065)   (18,901)   (52,061)   (58,089)
  Business acquisitions, net of                                             
   cash acquired                         -   (105,909)   (20,073)  (105,909)
  Other investments                      -         (2)         -     (3,002)
                                 ---------  ---------  ---------  --------- 
Cash used by investing                                                      
 activities                        (15,065)  (124,812)   (72,134)  (167,000)
                                 ---------  ---------  ---------  --------- 
                                                                            
Cash flows from financing                                                   
 activities:                                                                
  Proceeds from long term debt           -          -    150,000          - 
  Repayments of long term debt      (3,750)         -    (11,250)         - 
  Repurchase of common stock       (29,028)   (85,185)  (162,078)  (214,195)
  Dividends paid                   (12,709)   (10,428)   (51,404)   (42,450)
  Proceeds from shares issued                                               
   pursuant to stock-based                                                  
   compensation plans                2,698      4,080      8,650     11,198 
  Excess tax benefit of stock                                               
   options exercised                   141         53      1,069      1,284 
  Other financing activities           172        (28)    (1,100)      (166)
                                 ---------  ---------  ---------  --------- 
Cash provided (used) by                                                     
 financing activities              (42,476)   (91,508)   (66,113)  (244,329)
                                 ---------  ---------  ---------  --------- 
                                                                            
Effect of exchange rate changes                                             
 on cash                             2,644        696      4,019      6,677 
                                 ---------  ---------  ---------  --------- 
                                                                            
Net increase (decrease) in cash                                             
 and cash equivalents               50,277   (102,750)   220,737   (119,107)
Cash and cash equivalents,                                                  
 beginning of period               492,199    424,489    321,739    440,846 
                                 ---------  ---------  ---------  --------- 
Cash and cash equivalents, end                                              
 of period                       $ 542,476  $ 321,739  $ 542,476  $ 321,739 
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
                                                                            
                                                                            
                      
       FLIR SYSTEMS, INC.                             
              REVENUE AND EARNINGS FROM OPERATIONS BY SEGMENT               
                         (In thousands)(Unaudited)                          
                                                                            
                                Three Months Ended     Twelve Months Ended  
                                   December 31,           December 31,      
                               --------------------  ---------------------- 
                                  2013       2012       2013        2012    
                               ---------  ---------  ----------  ---------- 
REVENUE - EXTERNAL CUSTOMERS                                                
Thermal Vision and Measurement $ 208,486  $ 180,097  $  727,938  $  628,019 
Raymarine                         36,113     32,740     163,200     158,183 
Surveillance                     124,665    136,351     456,490     486,355 
Detection                         13,175     12,844      53,191      63,312 
Integrated Systems                17,880     24,353      95,553      69,489 
                               ---------  ---------  ----------  ---------- 
                               $ 400,319  $ 386,385  $1,496,372  $1,405,358 
                               =========  =========  ==========  ========== 
                                                                            
EARNINGS (LOSS) FROM                                                        
 OPERATIONS                                                                 
Thermal Vision and Measurement $  35,797  $  61,629  $  161,307  $  171,280 
Raymarine                           (160)     1,230      14,184      11,173 
Surveillance                      25,199     45,253     126,034     160,219 
Detection                         (3,449)       289        (184)      1,089 
Integrated Systems                (2,019)     3,901      (1,907)      5,168 
Other                            (17,567)   (12,226)    (58,691)    (45,599)
                               ---------  ---------  ----------  ---------- 
                               $  37,801  $ 100,076  $  240,743     303,330 
                               =========  =========  ==========  ========== 

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