Exhibit 99.1
 |
FLIR Systems Announces
Second Quarter 2014 Financial Results
WILSONVILLE, OR, July 24, 2014 – FLIR Systems, Inc. (NASDAQ: FLIR) today announced financial results for the second quarter ended June 30, 2014. Revenue was $369.4 million, down 5% compared to second quarter 2013 revenue of $389.3 million. Operating income in the second quarter was $59.4 million, compared to $70.3 million in the second quarter of 2013, and was impacted by $3.5 million in pretax charges related to previously-announced restructuring initiatives. Second quarter 2014 net income was $44.8 million, or $0.31 per diluted share, compared with net income of $50.2 million, or $0.35 per diluted share in the second quarter a year ago. The net after tax impact of the restructuring charges in the second quarter was approximately $2.7 million, or $0.02 per diluted share. Cash provided by operations in the second quarter was $70.6 million.
Revenue from FLIR’s Surveillance segment was $105.8 million, a decrease of 28% from the second quarter results last year. The Instruments segment contributed $84 million of revenue during the second quarter, up 5% from the prior year. The OEM & Emerging Markets segment had $59 million of revenue, an increase of 21% over the prior year. Revenue from the Maritime segment was $55.2 million, and was up 1% over the second quarter of 2013. FLIR’s Security segment recorded revenue of $44.7 million in the second quarter, up 30% from the prior year. The Detection segment contributed $20.7 million of revenue, a decrease of 12% from the prior year.
FLIR's backlog of firm orders for delivery within the next twelve months was approximately $548 million as of June 30, 2014, an increase of $34 million during the quarter and an increase of 12% since the beginning of 2014.
"Second quarter results were marked by double-digit growth in our commercially-oriented segments and an improved backlog overall,” said Andy Teich, President and CEO of FLIR. “These positive indicators, combined with the anticipated benefit from our restructuring and realignment initiatives, give us confidence in our outlook for the second half of 2014. We are excited about our recent and upcoming product introductions and the momentum being exhibited in many parts of the business.”
Revenue and Earnings Outlook for 2014
Based on financial results for the first six months of 2014 and the outlook for the remainder of the year, FLIR is reaffirming its outlook for revenue and earnings per share for the full year 2014. Management expects revenue for 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 Declaration
FLIR’s Board of Directors has declared a quarterly cash dividend of $0.10 per share on FLIR common stock, payable September 5, 2014, to shareholders of record as of close of business on August 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. A simultaneous webcast of the conference call can 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 second quarter and historical financial data, including 2013 quarterly results for each of the new segments, can be accessed online 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 events or circumstances after the date of this release, or for changes made to this document by wire services or internet service providers.
Company Contact:
Shane Harrison
+1 503.498.3547
www.flir.com
| FLIR SYSTEMS, INC. | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| (In thousands, except per share amounts)(Unaudited) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Revenue | $ | 369,381 | $ | 389,329 | $ | 720,923 | $ | 737,912 | ||||||||
| Cost of goods sold | 186,663 | 199,288 | 369,673 | 363,884 | ||||||||||||
| Gross profit | 182,718 | 190,041 | 351,250 | 374,028 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 36,307 | 39,601 | 72,633 | 76,285 | ||||||||||||
| Selling, general and administrative | 83,500 | 80,168 | 165,442 | 158,341 | ||||||||||||
| Restructuring expenses | 3,548 | - | 11,361 | - | ||||||||||||
| Total operating expenses | 123,355 | 119,769 | 249,436 | 234,626 | ||||||||||||
| Earnings from operations | 59,363 | 70,272 | 101,814 | 139,402 | ||||||||||||
| Interest expense | 3,629 | 3,767 | 7,337 | 6,664 | ||||||||||||
| Interest income | (272 | ) | (274 | ) | (536 | ) | (465 | ) | ||||||||
| Other income, net | (1,071 | ) | 175 | (1,269 | ) | (589 | ) | |||||||||
| Earnings from continuing operations. | ||||||||||||||||
| before income taxes | 57,077 | 66,604 | 96,282 | 133,792 | ||||||||||||
| Income tax provision | 12,319 | 16,446 | 21,630 | 31,998 | ||||||||||||
| Net earnings | $ | 44,758 | $ | 50,158 | $ | 74,652 | $ | 101,794 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 0.32 | $ | 0.35 | $ | 0.53 | $ | 0.71 | ||||||||
| Diluted | $ | 0.31 | $ | 0.35 | $ | 0.52 | $ | 0.70 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 141,574 | 142,085 | 141,255 | 143,350 | ||||||||||||
| Diluted | 144,120 | 143,774 | 143,964 | 144,981 | ||||||||||||
| FLIR SYSTEMS, INC. | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands)(Unaudited) | ||||||||
| June 30, | December 31, | |||||||
| 2014 | 2013 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 602,073 | $ | 542,476 | ||||
| Accounts receivable, net | 270,086 | 286,573 | ||||||
| Inventories | 350,092 | 344,719 | ||||||
| Prepaid expenses and other current assets | 101,684 | 97,574 | ||||||
| Deferred income taxes, net | 38,605 | 38,389 | ||||||
| Total current assets | 1,362,540 | 1,309,731 | ||||||
| Property and equipment, net | 240,023 | 234,041 | ||||||
| Deferred income taxes, net | 18,959 | 17,883 | ||||||
| Goodwill | 575,522 | 575,701 | ||||||
| Intangible assets, net | 147,934 | 154,195 | ||||||
| Other assets | 57,187 | 51,808 | ||||||
| $ | 2,402,165 | $ | 2,343,359 | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 99,996 | $ | 85,730 | ||||
| Deferred revenue | 24,646 | 28,844 | ||||||
| Accrued payroll and related liabilities | 66,191 | 62,069 | ||||||
| Accrued expenses | 39,745 | 39,316 | ||||||
| Accrued income taxes | 911 | 663 | ||||||
| Other current liabilities | 53,277 | 44,893 | ||||||
| Current portion long-term debt | 15,000 | 15,000 | ||||||
| Total current liabilities | 299,766 | 276,515 | ||||||
| Long-term debt | 365,257 | 372,528 | ||||||
| Deferred income taxes | 14,097 | 12,255 | ||||||
| Accrued income taxes | 20,893 | 19,996 | ||||||
| Other long-term liabilities | 50,411 | 48,685 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders’ equity | 1,651,741 | 1,613,380 | ||||||
| $ | 2,402,165 | $ | 2,343,359 | |||||
| FLIR SYSTEMS, INC. | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
| (In thousands)(Unaudited) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||||
| Net earnings | $ | 44,758 | $ | 50,158 | $ | 74,652 | $ | 101,794 | ||||||||
| Income items not affecting cash: | ||||||||||||||||
| Depreciation and amortization | 14,236 | 15,231 | 30,706 | 30,102 | ||||||||||||
| Deferred income taxes | (591 | ) | (18 | ) | 915 | 26 | ||||||||||
| Stock-based compensation | ||||||||||||||||
| arrangements | 8,447 | 7,630 | 17,203 | 13,327 | ||||||||||||
| Other non-cash items | (2,109 | ) | (2,951 | ) | (3,599 | ) | (577 | ) | ||||||||
| Changes in operating | ||||||||||||||||
| assets and liabilities | 5,848 | 65,254 | 10,536 | 52,591 | ||||||||||||
| Cash provided by operating activities | 70,589 | 135,304 | 130,413 | 197,263 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||||
| Additions to property and equipment, net | (16,239 | ) | (10,643 | ) | (25,828 | ) | (23,291 | ) | ||||||||
| Business acquisitions, net of | ||||||||||||||||
| cash acquired | - | (5,165 | ) | - | (5,165 | ) | ||||||||||
| Other investments | - | - | - | - | ||||||||||||
| Cash used by investing activities | (16,239 | ) | (15,808 | ) | (25,828 | ) | (28,456 | ) | ||||||||
| Cash flows from financing activities: | ||||||||||||||||
| Proceeds from long term debt | - | 150,000 | - | 150,000 | ||||||||||||
| Repayments of long term debt | (3,750 | ) | - | (7,500 | ) | (3,750 | ) | |||||||||
| Repurchase of common stock | (41,237 | ) | (8,469 | ) | (43,003 | ) | (116,830 | ) | ||||||||
| Dividends paid | (14,160 | ) | (12,802 | ) | (28,245 | ) | (25,909 | ) | ||||||||
| Proceeds from shares issued pursuant | ||||||||||||||||
| to stock-based compensation plans | 20,093 | 2,706 | 28,969 | 3,885 | ||||||||||||
| Excess tax benefit of stock options | ||||||||||||||||
| exercised | 3,860 | 236 | 6,559 | 469 | ||||||||||||
| Other financing activities | (264 | ) | (946 | ) | (14 | ) | (966 | ) | ||||||||
| Cash used by financing activities | (35,458 | ) | 130,725 | (43,234 | ) | 6,899 | ||||||||||
| Effect of exchange rate changes | ||||||||||||||||
| on cash | (914 | ) | (45 | ) | (1,754 | ) | (5,012 | ) | ||||||||
| Net increase (decrease) | ||||||||||||||||
| in cash and cash equivalents | 17,978 | 250,176 | 59,597 | 170,694 | ||||||||||||
| Cash and cash equivalents: | ||||||||||||||||
| Beginning of period | 584,095 | 246,007 | 542,476 | 321,739 | ||||||||||||
| End of period | $ | 602,073 | $ | 496,183 | $ | 602,073 | $ | 492,433 | ||||||||
| FLIR SYSTEMS, INC. | ||||||||||||||||
| REVENUE AND EARNINGS FROM OPERATIONS BY SEGMENT | ||||||||||||||||
| (In thousands)(Unaudited) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| REVENUE - EXTERNAL CUSTOMERS | ||||||||||||||||
| Surveillance | $ | 105,778 | $ | 147,859 | $ | 222,978 | $ | 265,847 | ||||||||
| Instruments | 83,968 | 80,262 | 168,023 | 158,812 | ||||||||||||
| OEM and Emerging Markets | 58,988 | 48,633 | 112,790 | 98,919 | ||||||||||||
| Maritime | 55,230 | 54,679 | 107,805 | 105,140 | ||||||||||||
| Security | 44,735 | 34,451 | 74,045 | 63,922 | ||||||||||||
| Detection | 20,682 | 23,445 | 35,282 | 45,272 | ||||||||||||
| $ | 369,381 | $ | 389,329 | $ | 720,923 | $ | 737,912 | |||||||||
| EARNINGS (LOSS) FROM OPERATIONS | ||||||||||||||||
| Surveillance | 18,934 | $ | 34,076 | $ | 39,297 | $ | 67,976 | |||||||||
| Instruments | 21,036 | 22,920 | 41,486 | 42,945 | ||||||||||||
| OEM and Emerging Markets | 17,613 | 12,217 | 29,324 | 26,639 | ||||||||||||
| Maritime | 9,714 | 9,374 | 18,544 | 17,481 | ||||||||||||
| Security | 5,886 | 3,247 | 7,572 | 7,635 | ||||||||||||
| Detection | 3,153 | 3,899 | 1,352 | 6,444 | ||||||||||||
| Other | (16,973 | ) | (15,461 | ) | (35,761 | ) | (29,718 | ) | ||||||||
| $ | 59,363 | $ | 70,272 | $ | 101,814 | $ | 139,402 | |||||||||