Announces Acquisition of Aerius Photonics
PORTLAND, OR -- (Marketwire - July 22, 2011) - FLIR Systems, Inc. (NASDAQ: FLIR) today announced financial results for the second quarter ended June 30, 2011. Revenue was $390.0 million, up 18% compared to second quarter 2010 revenue of $331.1 million. Operating income in the second quarter was $41.7 million, compared to $89.8 million in the second quarter of 2010, and was impacted by a previously announced litigation settlement and related expenses, as well as delayed government procurement. Second quarter 2011 net income was $29.3 million, or $0.18 per diluted share, compared with net income of $59.5 million, or $0.37 per diluted share in the second quarter a year ago. Excluding the net after tax impact of the litigation settlement and related expenses, second quarter 2011 net income was $57.2 million, or $0.35 per diluted share.
Revenue from the Company's Commercial Systems division increased 32% from the second quarter of 2010, to $215.0 million. Within the Commercial Systems division, revenue from the Thermal Vision and Measurement segment was $164.8 million, an increase of 21% over the second quarter combined results of Thermography and CVS last year. Commercial Systems' Raymarine segment contributed $50.2 million of revenue during the quarter.
Revenue from the Company's Government Systems division increased 4% over the second quarter of 2010, to $174.9 million. Within the Government Systems division, revenue from the Surveillance segment was $141.5 million, a decrease of 16% from the second quarter of 2010 results of the Company's legacy Government Systems business. Revenues from Government Systems' other two segments, Detection and Integrated Systems were $17.2 and $16.2 million, respectively.
The Company's backlog of firm orders for delivery within the next twelve months was approximately $486 million at June 30, 2011, a decrease of $42 million during the quarter. Backlog in the Government Systems division was $319 million, decreasing $41 million during the quarter as a result of procurement delays. Backlog in the Commercial Systems division was $167 million, down $1 million during the quarter.
FLIR today also announced that it has acquired Aerius Photonics, LLC, a leading provider of short-wavelength infrared (SWIR) detectors and advanced laser components, for $27 million in cash. Aerius Photonics, based in Ventura, California, specializes in the design, development, and manufacture of high-sensitivity photonic components for use in various applications in the commercial and military markets. Products include indium gallium arsenide (InGaAs)-based infrared detectors, high-powered vertical-cavity surface-emitting laser (VCSEL) diodes, ultra-lightweight laser rangefinders and altimeters, and infrared illuminators and pointers.
"The second quarter finished with solid results for our Commercial Systems division, which posted one of its best growth quarters along with substantially improved profitability. Our Government Systems division was impacted by order and shipment delays," noted Earl Lewis, President and CEO of FLIR. "We are excited to add Aerius to our Commercial Systems business. Aerius will enhance our ability to serve OEMs in numerous sectors as well as augment our multi-spectral systems development capabilities."
Revenue and Earnings Outlook for 2011
Based on financial results for the first half of 2011 and the outlook for the remainder of the year, FLIR is reducing its outlook for revenue and earnings per share for the full year 2011. Management currently expects revenue for 2011 to be in the range of $1.6 billion to $1.65 billion and net earnings to be in the range of $1.33 to $1.38 per diluted share, or $1.50 to $1.55 per diluted share excluding the net after tax impact of the litigation settlement and related expenses. This compares to the prior outlook of $1.7 billion to $1.75 billion in revenue and $1.70 to $1.75 in earnings per diluted share for the full year 2011.
Dividend Declaration
FLIR's Board of Directors has declared a quarterly cash dividend of $0.06 per share on FLIR common stock, payable September 9, 2011, to shareholders of record as of close of business on August 22, 2011.
Conference Call
FLIR has scheduled a conference call at 8:00 a.m. ET today. A simultaneous webcast of the conference call will be available from the Investor Relations link at www.FLIR.com. A replay will be available after 11:00 a.m. ET at this same internet address. For a telephone replay, dial (855) 859-2056, Conference ID #83189472 after 11:00 a.m. ET.
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 2011" 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,
-------------------- ---------------------
2011 2010 2011 2010
--------- --------- --------- ----------
Revenue $ 389,951 $ 331,133 $ 763,416 $ 618,431
Cost of goods sold 185,416 147,810 363,236 269,754
--------- --------- --------- ----------
Gross profit 204,535 183,323 400,180 348,677
Operating expenses:
Research and development 39,201 28,309 76,461 53,112
Selling, general and
administrative 123,651 65,199 205,390 121,407
--------- --------- --------- ----------
Total operating expenses 162,852 93,508 281,851 174,519
Earnings from operations 41,683 89,815 118,329 174,158
Interest expense 435 900 785 2,124
Interest income (86) (192) (348) (446)
Other (income) expense, net (2,115) (1,734) (1,270) (1,787)
--------- --------- --------- ----------
Earnings from continuing
operations before income
taxes 43,449 90,841 119,162 174,267
Income tax provision 13,687 31,387 37,536 58,918
--------- --------- --------- ----------
Earnings from continuing
operations 29,762 59,454 81,626 115,349
Loss from discontinued
operations, net of tax (453) -- (1,002) --
--------- --------- --------- ----------
Net earnings $ 29,309 $ 59,454 $ 80,624 $ 115,348
========= ========= ========= ==========
Basic earnings per share:
Earnings from continuing
operations $ 0.19 $ 0.38 $ 0.51 $ 0.75
Discontinued operations (0.00) -- (0.01) --
--------- --------- --------- ----------
Basic earnings per share $ 0.18 $ 0.38 $ 0.51 $ 0.75
========= ========= ========= ==========
Diluted earnings per share:
Earnings from continuing
operations $ 0.18 $ 0.37 $ 0.50 $ 0.72
Discontinued operations (0.00) -- (0.01) --
--------- --------- --------- ----------
Diluted earnings per share $ 0.18 $ 0.37 $ 0.50 $ 0.72
========= ========= ========= ==========
Weighted average shares
outstanding:
Basic 159,796 154,495 159,599 153,702
========= ========= ========= ==========
Diluted 162,550 161,643 162,427 161,626
========= ========= ========= ==========
FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)(Unaudited)
June 30, December 31,
2011 2010
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 235,622 $ 193,137
Accounts receivable, net 328,047 339,723
Inventories 322,447 303,156
Prepaid expenses and other current assets 109,673 95,663
Deferred income taxes, net 24,295 23,128
------------ ------------
Total current assets 1,020,084 954,807
Property and equipment, net 186,334 189,119
Deferred income taxes, net 22,746 22,742
Goodwill 493,396 482,019
Intangible assets, net 170,794 177,385
Other assets 37,261 31,280
------------ ------------
$ 1,930,615 $ 1,857,352
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 88,075 $ 85,881
Deferred revenue 20,046 17,867
Accrued payroll and related liabilities 46,822 54,894
Accrued product warranties 15,941 15,711
Advance payments from customers 14,968 22,616
Accrued expenses 33,461 36,578
Accrued income taxes 1,239 8,218
Other current liabilities 4,592 8,186
------------ ------------
Total current liabilities 225,144 249,951
Deferred income taxes 13,360 13,163
Accrued income taxes 21,560 19,793
Pension and other long-term liabilities 52,421 51,897
Commitments and contingencies
Shareholders' equity 1,618,130 1,522,548
------------ ------------
$ 1,930,615 $ 1,857,352
============ ============
Company Contact: Shane Harrison +1 503.498.3547 www.flir.com