PORTLAND, OR -- (Marketwire - July 26, 2012) - FLIR Systems, Inc. (NASDAQ: FLIR) today announced financial results for the second quarter ended June 30, 2012. Revenue was $338.3 million, down 14% compared to second quarter 2011 revenue of $391.6 million. Operating income in the second quarter was $60.7 million, compared to $41.8 million in the second quarter of 2011, and was negatively impacted by restructuring costs of approximately $6.8 million before tax. Second quarter 2012 net income was $41.1 million, or $0.27 per diluted share, compared with net income of $29.3 million, or $0.18 per diluted share in the second quarter a year ago. Excluding the net after tax impact of the restructuring costs referred to above, second quarter 2012 net income was $46.1 million, or $0.30 per diluted share. Cash provided by operations in the second quarter was $77.2 million. During the quarter, the Company repurchased 3 million shares of its common stock at an average price of $21.60 per share.
Revenue from the Company's Commercial Systems division decreased 12% from the second quarter of 2011, to $189.8 million. Within the Commercial Systems division, revenue from the Thermal Vision and Measurement segment was $142.6 million, a decrease of 13% from the second quarter results last year. The Raymarine segment contributed $47.2 million of revenue during the second quarter, down 6% from the prior year.
Revenue from the Company's Government Systems division decreased 16% from the second quarter of 2011, to $148.5 million. Within the Government Systems division, revenue from the Surveillance segment was $119.5 million, a decrease of 16% from the second quarter of 2011. Revenue from the Detection segment was $15.7 million, a decrease of 9% compared to the second quarter of 2011, and the Integrated Systems segment contributed $13.3 million of revenue during the second quarter, a decrease of 26% from the prior year.
The Company's backlog of firm orders for delivery within the next twelve months was approximately $498 million as of June 30, 2012, an increase of $41 million during the quarter. Backlog in the Government Systems division was $334 million, increasing $22 million during the quarter. Backlog in the Commercial Systems division was $164 million, up $19 million during the quarter.
"This second quarter proved difficult for our company," noted Earl Lewis, President and CEO of FLIR. "Macroeconomic conditions impacted many of our largest markets, but we continued to manage our business in response to these challenges. Both divisions had meaningful increases in backlog during the quarter, and we further streamlined our operations. While the first half of 2012 underperformed our expectations, we anticipate an improved second half and a return to earnings growth in the fourth quarter."
Revenue and Earnings Outlook for 2012
As announced previously, based on financial results for the first half of 2012 and the outlook for the remainder of the year, FLIR has modified its outlook for revenue and earnings per share for the full year 2012. Management currently expects revenue for 2012 to be in the range of $1.4 billion to $1.5 billion and net earnings to be in the range of $1.40 to $1.50 per diluted share. This compares to the prior outlook of $1.55 billion to $1.65 billion in revenue and $1.60 to $1.70 in earnings per diluted share for the full year 2012.
Dividend Declaration
FLIR's Board of Directors has declared a quarterly cash dividend of $0.07 per share on FLIR common stock, payable September 7, 2012, to shareholders of record as of close of business on August 20, 2012.
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 Upcoming Events link at the Investor Relations page of www.FLIR.com. A replay will be available after 11:00 a.m. ET (8:00 a.m. PT) at this same Internet address. For a telephone replay, dial (877) 660-6853 after 11:00 a.m. ET and reference Account #407 and Conference ID #397563. Summary second 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 2012" 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,
------------------------ ------------------------
2012 2011(1) 2012 2011(1)
----------- ----------- ----------- -----------
Revenue $ 338,291 $ 391,555 $ 686,743 $ 767,524
Cost of goods sold 168,262 186,144 333,988 365,601
----------- ----------- ----------- -----------
Gross profit 170,029 205,411 352,755 401,923
Operating expenses:
Research and
development 37,510 39,481 74,080 77,070
Selling, general and
administrative 71,798 124,127 149,658 206,735
----------- ----------- ----------- -----------
Total operating
expenses 109,308 163,608 223,738 283,805
Earnings from
operations 60,721 41,803 129,017 118,118
Interest expense 2,768 435 5,834 786
Interest income (377) (86) (805) (350)
Other expense (income),
net 240 (2,124) (984) (1,272)
----------- ----------- ----------- -----------
Earnings from
continuing
operations before
income taxes 58,090 43,578 124,972 118,954
Income tax provision 15,685 13,755 33,742 37,528
----------- ----------- ----------- -----------
Earnings from
continuing
operations 42,405 29,823 91,230 81,426
Loss from discontinued
operations, net of tax (1,312) (514) (1,998) (802)
----------- ----------- ----------- -----------
Net earnings $ 41,093 $ 29,309 $ 89,232 $ 80,624
=========== =========== =========== ===========
Basic earnings per
share:
Earnings from
continuing operations $ 0.28 $ 0.19 $ 0.59 $ 0.51
Discontinued
operations (0.01) (0.00) (0.01) (0.01)
----------- ----------- ----------- -----------
Basic earnings per
share $ 0.27 $ 0.18 $ 0.58 $ 0.51
=========== =========== =========== ===========
Diluted earnings per
share:
Earnings from
continuing operations $ 0.27 $ 0.18 $ 0.58 $ 0.50
Discontinued
operations (0.01) (0.00) (0.01) (0.00)
----------- ----------- ----------- -----------
Diluted earnings per
share $ 0.27 $ 0.18 $ 0.57 $ 0.50
=========== =========== =========== ===========
Weighted average shares
outstanding:
Basic 153,172 159,796 153,829 159,599
=========== =========== =========== ===========
Diluted 155,033 162,550 155,983 162,427
=========== =========== =========== ===========
(1) Amounts have been adjusted for the reclassification of certain
discontinued operations to continued operations.
FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)(Unaudited)
June 30, December 31,
2012 2011
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 429,771 $ 440,846
Accounts receivable, net 268,550 325,370
Inventories 350,791 336,051
Prepaid expenses and other current assets 124,794 104,285
Deferred income taxes, net 27,023 27,443
------------ ------------
Total current assets 1,200,929 1,233,995
Property and equipment, net 193,594 186,269
Deferred income taxes, net 31,857 31,644
Goodwill 497,728 498,343
Intangible assets, net 152,274 164,440
Other assets 38,424 32,338
------------ ------------
$ 2,114,806 $ 2,147,029
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 79,611 $ 84,190
Deferred revenue 23,446 24,046
Accrued payroll and related liabilities 44,794 49,475
Accrued product warranties 13,232 13,370
Advance payments from customers 10,425 13,219
Accrued expenses 32,862 41,183
Other current liabilities 4,057 3,886
Accrued income taxes - 2,161
------------ ------------
Total current liabilities 208,427 231,530
Long-term debt 248,090 247,861
Deferred income taxes 17,294 17,237
Accrued income taxes 18,138 17,537
Pension and other long-term liabilities 58,082 53,835
Commitments and contingencies
Shareholders' equity 1,564,775 1,579,029
------------ ------------
$ 2,114,806 $ 2,147,029
============ ============
FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2012 2011 2012 2011
----------- ----------- ----------- -----------
Cash flows from
operating activities:
Net earnings $ 41,093 $ 29,309 $ 89,232 $ 80,624
Income items not
affecting cash:
Depreciation and
amortization 14,809 23,738 30,016 43,631
Deferred income
taxes 86 (1,259) 95 (1,324)
Stock-based
compensation
arrangements 7,865 7,588 13,400 13,876
Other non-cash items 4,056 (3,793) (1,350) (629)
Changes in operating
assets and
liabilities, net of
acquisitions 9,328 (36,178) (5,162) (54,387)
----------- ----------- ----------- -----------
Cash provided by
operating activities 77,237 19,405 126,231 81,791
----------- ----------- ----------- -----------
Cash flows from
investing activities:
Additions to property
and equipment, net (13,494) (14,464) (26,429) (18,730)
Business acquisitions,
net of cash acquired - (2,351) - (2,351)
Other investments (3,000) - (3,000) -
----------- ----------- ----------- -----------
Cash used by investing
activities (16,494) (16,815) (29,429) (21,081)
----------- ----------- ----------- -----------
Cash flows from
financing activities:
Repurchase of common
stock (64,812) (17,026) (90,201) (23,801)
Dividends paid (10,700) (9,598) (21,485) (19,168)
Proceeds from shares
issued pursuant to
stock-based
compensation plans 4,780 7,248 5,656 14,281
Excess tax benefit of
stock options
exercised 214 734 552 2,326
Other financing
activities (98) (3) (140) (27)
----------- ----------- ----------- -----------
Cash used by financing
activities (70,616) (18,645) (105,618) (26,389)
----------- ----------- ----------- -----------
Effect of exchange rate
changes on cash (8,522) 1,448 (2,259) 8,164
----------- ----------- ----------- -----------
Net (decrease) increase
in cash and cash
equivalents (18,395) (14,607) (11,075) 42,485
Cash and cash
equivalents, beginning
of period 448,166 250,229 440,846 193,137
----------- ----------- ----------- -----------
Cash and cash
equivalents, end of
period $ 429,771 $ 235,622 $ 429,771 $ 235,622
=========== =========== =========== ===========
Company Contact: Shane Harrison +1 503.498.3547 www.flir.com