FLIR Systems Announces First Quarter 2015 Financial ResultsEPS Increases 62%
WILSONVILLE, OR -- (Marketwired - April 24, 2015) - FLIR Systems, Inc. (NASDAQ: FLIR) today announced financial results for the first quarter ended March 31, 2015. Revenue was $344.5 million, down 2% compared to first quarter 2014 revenue of $351.5 million. Foreign currency exchange fluctuations negatively impacted revenue growth by approximately 5 percentage points year over year. Operating income in the first quarter was $65.8 million, compared to $42.5 million in the first quarter of 2014. Operating income was impacted by pretax charges related to previously-announced restructuring initiatives of $0.3 million in the first quarter of 2015 and $8.4 million in the first quarter of 2014. First quarter 2015 net income was $47.9 million, or $0.34 per diluted share, compared with net income of $29.9 million, or $0.21 per diluted share in the first quarter a year ago. Net income was impacted by after-tax restructuring charges of $0.2 million in the first quarter of 2015 and $6.4 million, or $0.04 per diluted share, in the first quarter of 2014. Cash provided by operations in the first quarter of 2015 was $74.9 million.
The Surveillance segment contributed $112.9 million of revenue during the first quarter, down 8% from the prior year. The Instruments segment had $83.8 million of revenue, in-line with the prior year. FLIR's OEM & Emerging Markets segment recorded revenue of $39.8 million in the first quarter, down 17% from the prior year. Revenue from the Maritime segment was $51 million, down 3% from the first quarter of 2014. Security segment revenue was $38.8 million, an increase of 32% over the first quarter results last year. The Detection segment contributed $18.2 million of revenue, an increase of 25% from the prior year.
FLIR's backlog of firm orders for delivery within the next twelve months was approximately $557 million as of March 31, 2015, an increase of $10 million, or 2%, during the quarter and an increase of $43 million, or 8%, over the prior year.
"The results for the first quarter of 2015 were in line with our expectations. Despite strong movement in the U.S. dollar that created a headwind for our top line, we improved our margins and earnings per share significantly," said Andy Teich, President and CEO of FLIR. "Since the end of 2014, we have introduced several new products that address the needs of customers in many existing and new markets, from the highest-end surveillance and R&D products to consumer-level home monitoring systems. Our cost curve continues to scale down and is creating opportunity for us to expand the markets for advanced imaging and sensing technology."
Revenue and Earnings Outlook for 2015
Based on financial results for the first three months of 2015 and the outlook for the remainder of the year, FLIR continues to expect revenue for the full year 2015 to be in the range of $1.55 billion to $1.6 billion and net earnings, excluding restructuring charges, to be in the range of $1.60 to $1.70 per diluted share.
Dividend Declaration
FLIR's Board of Directors has declared a quarterly cash dividend of $0.11 per share on FLIR common stock, payable June 5, 2015, to shareholders of record as of close of business on May 22, 2015.
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 and the accompanying summary presentation 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 first quarter and historical financial data may 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 2015" 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.
FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)(Unaudited)
Three Months Ended
March 31,
------------------------------
2015 2014
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Revenue $ 344,517 $ 351,542
Cost of goods sold 168,620 183,010
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Gross profit 175,897 168,532
Operating expenses:
Research and development 34,694 36,326
Selling, general and administrative 75,135 81,942
Restructuring expenses 314 7,813
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Total operating expenses 110,143 126,081
Earnings from operations 65,754 42,451
Interest expense 3,661 3,708
Interest income (247) (264)
Other income, net (700) (198)
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Earnings before income taxes 63,040 39,205
Income tax provision 15,130 9,311
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Net earnings $ 47,910 $ 29,894
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Earnings per share:
Basic $ 0.34 $ 0.21
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Diluted $ 0.34 $ 0.21
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Weighted average shares outstanding:
Basic 139,768 140,932
============== ==============
Diluted 141,472 143,828
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FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)(Unaudited)
March 31, December 31,
2015 2014
-------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 547,780 $ 531,374
Accounts receivable, net 311,787 354,658
Inventories 340,300 320,605
Prepaid expenses and other current assets 83,165 93,691
Deferred income taxes, net 38,394 38,873
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Total current assets 1,321,426 1,339,201
Property and equipment, net 249,002 247,094
Deferred income taxes, net 20,278 19,941
Goodwill 536,780 553,335
Intangible assets, net 125,818 133,212
Other assets 59,054 61,240
-------------- --------------
$ 2,312,358 $ 2,354,023
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 106,120 $ 98,173
Deferred revenue 27,439 27,878
Accrued payroll and related liabilities 48,478 62,065
Accrued expenses 48,050 51,810
Accrued income taxes 2,298 4,586
Other current liabilities 47,157 50,045
Current portion long-term debt 15,000 15,000
-------------- --------------
Total current liabilities 294,542 309,557
Long-term debt 354,351 357,986
Deferred income taxes 13,486 13,905
Accrued income taxes 11,242 11,096
Other long-term liabilities 52,919 51,706
Commitments and contingencies
Shareholders' equity 1,585,818 1,609,773
-------------- --------------
$ 2,312,358 $ 2,354,023
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FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)(Unaudited)
Three Months Ended
March 31,
------------------------------
2015 2014
-------------- --------------
Cash flows from operating activities:
Net earnings $ 47,910 $ 29,894
Income items not affecting cash:
Depreciation and amortization 12,489 16,470
Deferred income taxes 96 1,507
Stock-based compensation arrangements 4,757 8,756
Other non-cash items (3,303) (1,490)
Changes in operating assets and
liabilities 12,978 4,688
-------------- --------------
Cash provided by operating activities 74,927 59,825
-------------- --------------
Cash flows from investing activities:
Additions to property and equipment, net (13,139) (9,590)
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Cash used by investing activities (13,139) (9,590)
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Cash flows from financing activities:
Repayments of long term debt (3,750) (3,750)
Repurchase of common stock - (1,766)
Dividends paid (15,377) (14,085)
Proceeds from shares issued pursuant to
stock-based compensation plans 4,414 8,876
Excess tax benefit of stock options
exercised 779 2,698
Other financing activities (7) 252
-------------- --------------
Cash used by financing activities (13,941) (7,775)
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Effect of exchange rate changes on cash (31,441) (841)
-------------- --------------
Net increase in cash and cash equivalents 16,406 41,619
Cash and cash equivalents:
Beginning of period 531,374 542,476
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End of period $ 547,780 $ 584,095
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FLIR SYSTEMS, INC.
REVENUE AND EARNINGS FROM OPERATIONS BY SEGMENT
(In thousands)(Unaudited)
Three Months Ended
March 31,
------------------------------
2015 2014
-------------- --------------
REVENUE
Surveillance $ 112,901 $ 123,087
Instruments 83,821 84,056
OEM and Emerging Markets 39,834 47,915
Maritime 50,972 52,575
Security 38,806 29,309
Detection 18,183 14,600
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$ 344,517 $ 351,542
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EARNINGS (LOSS) FROM OPERATIONS
Surveillance $ 30,167 $ 23,266
Instruments 28,063 20,450
OEM and Emerging Markets 8,779 8,806
Maritime 4,789 8,830
Security 3,816 1,686
Detection 2,680 (1,800)
Other (12,540) (18,787)
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$ 65,754 $ 42,451
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Investor Relations
Shane Harrison
503-498-3547
shane.harrison@flir.com
