EXHIBIT 99.1
FOR IMMEDIATE RELEASE
For more information, contact:
FLIR Systems, Inc.
James A. Fitzhenry
(503) 684-3731
FLIR SYSTEMS REPORTS 1999 FIRST QUARTER RESULTS
PORTLAND, Ore. - April 28, 1999 - FLIR Systems, Inc. (Nasdaq: FLIR) announced
today that revenue for the first quarter ended March 31, 1999 was $34.4 million,
a 14% decline from the $40.1 million reported for the first quarter of 1998.
These results include the operations of Inframetrics, Inc., which was acquired
in March of 1999 and accounted for as a pooling of interests, and prior periods
have been restated accordingly. The net loss for the quarter before nonrecurring
charges associated with the Inframetrics acquisition was $2.6 million, or $0.18
per diluted share, based on 14.1 million average shares outstanding. This
compares to a consolidated net loss for the 1998 first quarter of $195,000, or
$0.02 per diluted share based on 11.9 million average shares outstanding.
After charges associated with the Inframetrics acquisition totaling $24.3
million, the net loss for the 1999 first quarter was $19.1 million, or $1.35 per
share. The acquisition-related charges included $6.1 million of transaction
related costs and $18.2 million in write-off of inventories related to the
planned phase-out of certain duplicative products caused by the merger with
Inframetrics that are included in cost of goods sold.
As the Company announced last week, operating results for the first
quarter, which is traditionally FLIR's seasonally weakest quarter of the year,
were adversely affected by a substantial decrease in orders from government
customers and, to a lesser extent, by disruptions in the sales channel for
commercial customers resulting from the four-month delay in obtaining Justice
Department approval for the Inframetrics acquisition. This delay also resulted
in higher fees and other direct costs associated with the transaction.
Sales to commercial customers for the first quarter of 1999 amounted to
$27.6 million, or 80% of revenue, compared to $28.0 million, or 70% of revenue,
for last year's first quarter. Sales to government customers declined to $6.8
million from $12.1 million a year ago.
Commenting on the Company's commercial business, FLIR President and Chief
Executive Officer Ken Stringer said, "We are making substantial progress in
clarifying the distribution issues arising from the four month delay in
completing the acquisition of Inframetrics and we expect the sales impact to be
temporary. Despite essentially flat quarter-to-quarter comparisons in the
commercial market for the first quarter, the outlook for the commercial side of
our business remains very favorable."
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FLIR Systems Reports First Quarter Results
Page 2
Stringer continued, "On the government side, most U.S. Government agencies
that purchase our products have experienced difficulties in obtaining release of
their fiscal year 1999 procurement funds. Exacerbating these difficulties, the
crisis in Kosovo has impacted defense organizations throughout NATO and caused
many to suspend procurement activities until funding for the campaign is
resolved. Our government business also was affected by continued economic
uncertainty in several international markets. The combination of these factors
substantially reduced our government sales in the first quarter."
Stringer added, "The long-term outlook for our government business remains
positive. Congress now is considering an emergency supplemental appropriations
bill for Kosovo, while rising oil prices in the Middle East and favorable
currency movements and improving economic indicators in Asia and South America
are just some of the factors that suggest improved conditions in our government
business. As a result, we currently expect our government business to resume its
historical growth trend in the second half of the year."
FLIR Systems, Inc. is a world leader in the design, manufacturing and
marketing of thermal imaging and broadcast camera systems for a wide variety of
commercial and government 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 us on our Web site at.
This release contains statements, including statements regarding the Company's
expectations for revenue and earnings for the Company's commercial and
government business segments for the remainder of 1999, that are forward-looking
statements within the meaning of the Securities Litigation Reform Act of 1995
which 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, but not limited
to, product demand, the impact of competitive products and pricing, capacity and
supply constraints, actual purchases under agreements, the amount and
availability of government funding, unexpected difficulties encountered in the
integration of Inframetrics and other risks discussed from time to time in the
Company's Securities and Exchange Commission fillings 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. If
the Company does update or correct one or more forward-looking statement,
investors and others should not conclude that the Company will make additional
updates or corrections with respect thereto or with respect to other forward-
looking statements.
(tables attached)
#1980
FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
March 31,
--------------------------------
1999 1998
-------------- --------------
(restated)*
Revenues:
Commercial............................................... $ 27,636 $28,043
Government............................................... 6,802 12,061
-------------- --------------
34,438 40,104
Cost of goods sold (Note 1).................................. 33,354 19,602
Research and development..................................... 6,977 6,493
Selling and other operating costs............................ 14,857 12,971
Combination costs (Note 1)................................... 6,110 --
-------------- --------------
61,298 39,066
(Loss) earnings from operations...................... (26,860) 1,038
Interest income.............................................. 18 363
Interest expense and other................................... (1,226) (1,475)
-------------- --------------
(Loss) earnings before income taxes.................. (28,068) (74)
(Benefit) provision for income taxes......................... (8,985) 121
-------------- --------------
Net (loss) earnings.......................................... $(19,083) $ (195)
============== ==============
Net (loss) earnings per share:
Basic..................................................... $(1.35) $(0.02)
============== ==============
Diluted................................................... $(1.35) $(0.02)
============== ==============
Weighted average shares outstanding:
Basic..................................................... 14,136 11,907
Diluted................................................... 14,136 11,907
============== ==============
Note 1 - Significant First Quarter Adjustment:
During the quarter ended March 31, 1999, the Company booked a one-time charge of
$24.3 million associated with the merger with Inframetrics, Inc. which was
completed on March 30, 1999. The write-off consisted of $6.1 million of merger-
related and consolidation costs which are included as a separate line in
operating expenses and $18.2 million of inventories due to the creation of
duplicative product lines caused by the merger which is included in cost of
goods sold.
FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET
(in thousands, except share amounts)
(unaudited)
ASSETS
March 31, December 31,
1999 1998
------------------- -------------------
(restated)*
Current assets:
Cash and cash equivalents............................... $ 6,937 $ 4,793
Accounts receivable, net................................ 69,936 91,202
Inventories............................................. 66,020 70,312
Prepaid expenses........................................ 5,074 6,061
Deferred income taxes................................... 4,915 4,915
------------------- -------------------
Total current assets................................ 152,882 177,283
Property and equipment, net................................. 26,907 26,775
Software development costs, net............................. 466 488
Deferred income taxes....................................... 18,799 11,610
Intangible assets, net...................................... 15,651 15,936
Other assets................................................ 3,918 3,897
------------------- -------------------
$218,623 $235,989
=================== ===================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable........................................... $ 67,865 $ 39,958
Accounts payable........................................ 19,807 24,031
Accrued liabilities..................................... 17,484 20,082
Current portion of long-term debt....................... 1,911 2,681
------------------- -------------------
Total current liabilities........................... 107,067 86,752
Long-term debt and other liabilities........................ 4,814 23,255
Shareholders' equity........................................ 106,742 125,982
------------------- -------------------
$218,623 $235,989
=================== ===================
* - The Consolidated Balance Sheet as of December 31, 1998 and the Consolidated
Statement of Operations for the three months ended March 31, 1998 have been
restated to reflect the assets and liabilities and results of operations of
Inframetrics, Inc. as the merger with Inframetrics was accounted for as a
pooling of interests.