Exhibit 99.1
| | | | | | |
 | | | | | | NEWS RELEASE Company Contact: Tony Trunzo +1 503.498.3547 www.flir.com |
FLIR Systems Reports Record Fourth Quarter
And Full Year 2006 Financial Results
Provides 2007 Financial Outlook
PORTLAND, OR - February 8, 2007 –FLIR Systems, Inc. (NASDAQ:FLIR)announced today that net earnings for the fourth quarter ended December 31, 2006 increased 16% to a record $39.8 million, or $0.53 per diluted share, compared to net earnings for the fourth quarter of 2005 of $34.1 million, or $0.43 per diluted share. Revenue for the 2006 fourth quarter increased 19% to $185.9 million, up from $156.2 million for the fourth quarter of 2005. The Company’s operating margin in the fourth quarter was 29.6%, compared with 29.5% in the fourth quarter of 2005. Stock-based compensation expense for the fourth quarter of 2006 was $3.1 million, or approximately $0.03 per fully diluted share.
Revenue from the Company’s Thermography division increased 23% over the fourth quarter of 2005, to $72.2 million, due to strong demand across all major product lines. Revenue from the Company’s Government Systems division increased by 19% in the fourth quarter to $86.2 million, driven by continued strength in the STAR-class products in Portland, and improved performance in the land and maritime markets. Revenue from the Company’s Commercial Vision Systems division increased 10% over the fourth quarter of last year, to $27.5 million, reflecting good growth across numerous product lines.
For the twelve months ended December 31, 2006, net earnings rose 11% to a record $100.9 million, or $1.32 per diluted share, compared to net earnings for the full year 2005 of $90.8 million, or $1.16 per diluted share. Revenue for 2006 was $575.0 million, an increase of 13% from the $508.6 million generated in 2005. The Company’s operating margin for the full year was 23.8%, as compared with 24.8% in 2005. For all of 2006, stock based compensation expense totaled $10.9 million or $0.11 per diluted share.
Revenue from the Company’s Thermography division increased 19% in 2006, while revenue from the Company’s Government Systems Division grew by 7%, and Commercial Vision Systems revenue increased 16% for the full year.
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FLIR Systems Reports Record Fourth Quarter and Full Year 2006 Financial Results
February 8, 2007
Page Two
Cash generated from operations totaled a record $38.8 million for the fourth quarter and $113.5 million for the full year. At December 31, 2006 the Company had cash on hand of $138.6 million. The backlog of firm orders for delivery within the next twelve months was approximately $274 million at December 31, 2006 an increase of 42% compared to backlog of $193 million at December 31, 2005.
Revenue and Earnings Guidance for 2007
FLIR also announced today that it expects net revenue in fiscal 2007 to be in the range of $670 million to $680 million, and net earnings to be in the range of $1.48 to $1.53 per diluted share, which includes stock-based compensation expense of approximately $0.16 per diluted share. This guidance assumes a tax rate for the year of approximately 27% to 29%, and an average share count of approximately 80 million diluted shares.
“We are very pleased with our fourth quarter and full year 2006 performance. Thermography had another outstanding year, and continues to execute well on its strategy. Government Systems saw significantly better order activity and revenue growth in the second half of the year, and our newest division, Commercial Vision Systems, got off to a very good start, and is positioned for significant future growth.” commented Earl R. Lewis, President and CEO of FLIR. “Our strategy of stimulating demand with lower cost infrared technology is clearly working, and our expanding distribution channels are driving increasing sales. Government Systems is again growing revenue, driven by expanded product lines and the success of our commercially developed military qualified model in winning new program business. As a result, we are introducing guidance for 2007 reflecting continued growth.” he concluded.
Conference Call
FLIR has scheduled a conference call at 11:00 am EST today. A simultaneous WebCast will be available from theInvestor Relationslink 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 #21320581 after 1:00 PM EST.
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FLIR Systems Reports Record Fourth Quarter and Full Year 2006 Financial Results
February 8, 2007
Page Three
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 atwww.FLIR.com.
Forward-Looking Statements
The statements in this release by Earl R. Lewis and the statements in the section captioned “Revenue and Earnings Guidance for 2007” 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 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.
(tables attached)
FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)(Unaudited)
| | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, | | | Twelve Months Ended December 31, | |
| | | 2006 | | 2005 | | | 2006 | | | 2005 | |
Revenue | | $ | 185,899 | | $ | 156,247 | | | $ | 575,000 | | | $ | 508,561 | |
Cost of goods sold | | | 81,456 | | | 69,586 | | | | 260,087 | | | | 231,867 | |
| | | | | | | | | | | | | | | |
Gross profit | | | 104,443 | | | 86,661 | | | | 314,913 | | | | 276,694 | |
| | | | |
Operating expenses: | | | | | | | | | | | | | | | |
Research and development | | | 16,261 | | | 12,512 | | | | 60,584 | | | | 51,514 | |
Selling, general and administrative | | | 33,109 | | | 27,998 | | | | 117,374 | | | | 99,227 | |
| | | | | | | | | | | | | | | |
Total operating expenses | | | 49,370 | | | 40,510 | | | | 177,958 | | | | 150,741 | |
| | | | |
Earnings from operations | | | 55,073 | | | 46,151 | | | | 136,955 | | | | 125,953 | |
| | | | |
Interest expense | | | 2,813 | | | 2,001 | | | | 8,956 | | | | 7,922 | |
Other expense (income), net | | | 262 | | | (1,556 | ) | | | (4,612 | ) | | | (4,193 | ) |
| | | | | | | | | | | | | | | |
Earnings before income taxes | | | 51,998 | | | 45,706 | | | | 132,611 | | | | 122,224 | |
| | | | |
Income tax provision | | | 12,242 | | | 11,564 | | | | 31,715 | | | | 31,459 | |
| | | | | | | | | | | | | | | |
Net earnings | | $ | 39,756 | | $ | 34,142 | | | $ | 100,896 | | | $ | 90,765 | |
| | | | | | | | | | | | | | | |
Net earnings per share: | | | | | | | | | | | | | | | |
Basic | | $ | 0.61 | | $ | 0.49 | | | $ | 1.49 | | | $ | 1.30 | |
| | | | | | | | | | | | | | | |
Diluted | | $ | 0.53 | | $ | 0.43 | | | $ | 1.32 | | | $ | 1.16 | |
| | | | | | | | | | | | | | | |
Weighted average shares outstanding: | | | | | | | | | | | | | | | |
Basic | | | 65,673 | | | 69,468 | | | | 67,845 | | | | 69,580 | |
| | | | | | | | | | | | | | | |
Diluted | | | 77,620 | | | 81,222 | | | | 79,778 | | | | 82,029 | |
| | | | | | | | | | | | | | | |
FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)(Unaudited)
| | | | | | |
| | | December 31, 2006 | | December 31, 2005 |
ASSETS | | | | | | |
Current assets: | | | | | | |
Cash and cash equivalents | | $ | 138,623 | | $ | 107,057 |
Accounts receivable, net | | | 167,502 | | | 142,782 |
Inventories, net | | | 135,928 | | | 103,837 |
Prepaid expenses and other current assets | | | 29,155 | | | 33,153 |
Deferred income taxes, net | | | 19,460 | | | 18,709 |
| | | | | | |
Total current assets | | | 490,668 | | | 405,538 |
| | |
Property and equipment, net | | | 92,156 | | | 59,479 |
Deferred income taxes, net | | | 3,369 | | | 8,415 |
Goodwill | | | 159,802 | | | 158,065 |
Intangible assets, net | | | 40,917 | | | 46,901 |
Other assets | | | 15,116 | | | 15,981 |
| | | | | | |
| | $ | 802,028 | | $ | 694,379 |
| | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | |
Current liabilities: | | | | | | |
Notes payable | | $ | 45,500 | | $ | — |
Accounts payable | | | 40,608 | | | 34,477 |
Deferred revenue | | | 13,709 | | | 10,297 |
Accrued payroll and related liabilities | | | 24,030 | | | 20,374 |
Accrued product warranties | | | 5,174 | | | 5,059 |
Advance payments from customers | | | 10,064 | | | 5,013 |
Other current liabilities | | | 12,149 | | | 11,626 |
Accrued income taxes | | | 10,749 | | | 3,148 |
Current portion of long-term debt | | | 7 | | | 56 |
| | | | | | |
Total current liabilities | | | 161,990 | | | 90,050 |
| | |
Long-term debt | | | 207,024 | | | 206,155 |
Deferred tax liability, net | | | 2,392 | | | 10,779 |
Pension and other long-term liabilities | | | 19,607 | | | 18,413 |
Commitments and contingencies | | | | | | |
Shareholders’ equity | | | 411,015 | | | 368,982 |
| | | | | | |
| | $ | 802,028 | | $ | 694,379 |
| | | | | | |
