Exhibit 99.1
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| | NEWS RELEASE |
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Company contact: Tony Trunzo Steve Bailey FLIR Systems, Inc. (503) 684-3731 www.FLIR.com | | Investor Contact:
Neil Berkman Associates
(310) 277—5162
info@BerkmanAssociates.com |
FLIR Systems Reports Fourth Quarter
And 2003 Financial Results
Company Reports Record Revenue and Net Earnings for 2003;
Provides Outlook For 2004
PORTLAND, Ore. — February 4, 2004 —FLIR Systems, Inc. (NASDAQ:FLIR) announced today that net earnings for the fourth quarter ended December 31, 2003 increased 18% to $15.0 million, or $0.44 per diluted share. This compares to net earnings for the fourth quarter of 2002 of $12.7 million, or $0.35 per diluted share, when adjusted for the two-for-one stock split that occurred in May 2003. Revenue for the 2003 fourth quarter increased 30% to $97.4 million, up from $74.9 million for the fourth quarter of 2002. Revenue from the sale of the Company’s Imaging products increased 29%, while revenue from the sale of the Company’s Thermography products increased 31% as compared to the fourth quarter last year.
For the twelve months ended December 31, 2003, net earnings rose 8% to a record $44.7 million, or $1.27 per diluted share. This compares to net earnings for 2002 of $41.6 million, or $1.17 per diluted share when adjusted for the two-for-one stock split. Revenue for 2003 reached $312 million, an increase of 19% from the $261 million generated in 2002. Revenue from the sale of the Company’s Imaging products increased 15%, while revenue from the sale of the Company’s Thermography products increased 27% compared to the prior year.
Earnings from operations were $22.8 million in the fourth quarter of 2003, an increase of 48% over 2002. For the year ended December 31, 2003, earnings from operations increased 38% over 2002 to $69.8 million. Earnings from operations as a percentage of revenue increased from 21% in the fourth quarter of 2002 to 23% in 2003, and increased from 19% for the twelve months ended December 31, 2002 to 22% in 2003.
Cash generated from operations totaled $5.1 million for the fourth quarter and $27.3 million for 2003. At December 31, 2003, the Company had $204.4 million in outstanding debt and cash on hand of $198 million. The backlog of orders for the delivery of products in the next twelve month was approximately $146 million at December 31, 2003 as compared to $92 million at December 31, 2002.
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FLIR Systems Reports Fourth Quarter and 2003 Financial Results
February 4, 2004
Page Two
“In 2003 we achieved record revenue and net earnings and took a significant step to ensure the future growth of our business by initiating our acquisition of Indigo Systems Corporation,” commented Earl R. Lewis, President and CEO of FLIR. “This acquisition, which was closed in January, will help us lower costs, expand into new markets, and provide an excellent technology base on which we can capitalize for the future. We are very proud of what the FLIR employees have achieved during the year and are confident that their accomplishments have created the catalyst for continued strong growth in the future,” he stated.
Company Provides Outlook For 2004
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.
“Given the strength of our performance in 2003, the benefits we expect to realize from the acquisition of Indigo and the continued strong demand for both our Imaging and Thermography products, we estimate our revenue for 2004 will be in the range of $425 to $435 million, and net earnings will be in the range of $1.50 to $1.60 per diluted share in 2004,” concluded Lewis.
Forward-Looking Statements
The statements in this release by Earl R. Lewis regarding the Company’s expectation of continued strong growth in the future and the statements in the outlook for 2004, above, are forward-looking statements. 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 ability of the Company to successfully integrate and realize the synergies from the acquisition of Indigo Systems Corporation, the impact of competitive products and pricing, the Company’s continuing compliance with US export control laws and regulations, constraints on supplies of critical components, excess or shortage of production capacity, 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.
Conference Call
FLIR has scheduled a conference call at 11:00 am ET today. A simultaneous WebCast will be available from theInvestor Relations link atwww.FLIR.com. A replay will be available after 1:00 PM EST at this same internet address. For a telephone replay, dial (800) 633-8284, reservation #21180080, after 1:00 PM EST.
About FLIR Systems
FLIR Systems, Inc. is a world leader in the design, manufacture and marketing of thermal imaging and stabilized camera systems for a wide variety of thermography and imaging applications including condition monitoring, research and development, manufacturing process control, airborne observation and broadcast, search and rescue, drug interdiction, surveillance and reconnaissance, navigation safety, border and maritime patrol, environmental monitoring and ground-based security. Visit the company’s web site at www.FLIR.com
(tables attached)
FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
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| | | Three Months Ended
December 31,
| | Twelve Months Ended
December 31,
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| | | 2003
| | 2002
| | 2003
| | 2002
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| | | (Unaudited) | | | | | |
Revenue | | $ | 97,414 | | $ | 74,932 | | $ | 311,979 | | $ | 261,080 | |
Cost of goods sold | | | 46,044 | | | 35,852 | | | 146,454 | | | 124,060 | |
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Gross profit | | | 51,370 | | | 39,080 | | | 165,525 | | | 137,020 | |
Operating expenses: | | | | | | | | | | | | | |
Research and development | | | 9,027 | | | 7,132 | | | 30,665 | | | 26,892 | |
Selling, general and administrative | | | 19,515 | | | 16,493 | | | 65,034 | | | 59,597 | |
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Total operating expenses | | | 28,542 | | | 23,625 | | | 95,699 | | | 86,489 | |
Earnings from operations | | | 22,828 | | | 15,455 | | | 69,826 | | | 50,531 | |
Interest expense | | | 1,999 | | | 229 | | | 4,861 | | | 2,033 | |
Other expenses (income), net | | | 702 | | | 303 | | | 1,117 | | | (395 | ) |
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Earnings before income taxes | | | 20,127 | | | 14,923 | | | 63,848 | | | 48,893 | |
Income tax provision | | | 5,164 | | | 2,239 | | | 19,155 | | | 7,334 | |
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Net earnings | | $ | 14,963 | | $ | 12,684 | | $ | 44,693 | | $ | 41,559 | |
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Net earnings per share: | | | | | | | | | | | | | |
Basic | | $ | 0.46 | | $ | 0.37 | | $ | 1.32 | | $ | 1.23 | |
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Diluted | | $ | 0.44 | | $ | 0.35 | | $ | 1.27 | | $ | 1.17 | |
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Weighted average shares outstanding: | | | | | | | | | | | | | |
Basic | | | 32,835 | | | 34,188 | | | 33,731 | | | 33,709 | |
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Diluted | | | 34,314 | | | 35,913 | | | 35,158 | | | 35,670 | |
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All per share amounts have been adjusted to reflect the two-for-one stock split.
FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
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| | | December 31, 2003
| | December 31, 2002
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ASSETS | | | | | | | |
Current assets: | | | | | | | |
Cash and cash equivalents | | $ | 197,993 | | $ | 46,606 | |
Accounts receivable, net | | | 79,332 | | | 55,798 | |
Inventories, net | | | 75,959 | | | 50,141 | |
Prepaid expenses and other current assets | | | 19,997 | | | 12,673 | |
Deferred income taxes, net | | | 8,832 | | | 8,887 | |
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Total current assets | | | 382,113 | | | 174,105 | |
Property and equipment, net | | | 22,758 | | | 12,678 | |
Deferred income taxes, net | | | 21,146 | | | 25,977 | |
Intangible assets, net | | | 16,536 | | | 16,647 | |
Other assets | | | 7,870 | | | 4,415 | |
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| | | $ | 450,423 | | $ | 233,822 | |
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LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | |
Current liabilities: | | | | | | | |
Accounts payable | | $ | 26,427 | | $ | 16,465 | |
Deferred revenue | | | 4,540 | | | 4,770 | |
Accrued payroll and related liabilities | | | 12,778 | | | 11,030 | |
Accrued product warranties | | | 3,511 | | | 3,432 | |
Advance payments from customers | | | 12,112 | | | 8,030 | |
Other current liabilities | | | 8,227 | | | 6,341 | |
Accrued income taxes | | | 2,742 | | | 2,558 | |
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Total current liabilities | | | 70,337 | | | 52,626 | |
Long-term debt | | | 204,369 | | | — | |
Pension and other long-term liabilities | | | 10,875 | | | 8,869 | |
Commitments and contingencies | | | | | | | |
Shareholders’ equity: | | | | | | | |
Preferred stock, $0.01 par value, 10,000 shares authorized; no shares issued at December 31, 2003 and 2002 | | | — | | | — | |
Common stock, $0.01 par value, 100,000 shares authorized, 32,863 and 34,599* shares issued at December 31, 2003 and 2002, respectively, and additional paid-in capital | | | 156,154 | | | 218,052 | |
Accumulated earnings (deficit) | | | 1,388 | | | (43,305 | ) |
Accumulated other comprehensive income (loss) | | | 7,300 | | | (2,420 | ) |
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Total shareholders’ equity | | | 164,842 | | | 172,327 | |
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| | | $ | 450,423 | | $ | 233,822 | |
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| * | Adjusted to reflect the two-for-one stock split. |
