FLIR - Earnings call transcript Q2 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings and welcome to the FLIR Systems Second Quarter 2018 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow with formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Jay Gentzkow. ahead. go Please

Jay Gentzkow

of Please presentation everyone. this our press Presentations earnings are Good that note will and section & Events slides under on be release available morning, the that www.flir.com/investor. referred call to

Before release believes, are you call made remind need of statements Litigation within based statements such not or factors we that a this the forecasts. obligation are we statements. to statements actual today those estimates, and historical our current similar forward-looking The any the could we such could materially. and are on that results earlier Words expressions anticipates, facts Reform and to cause make Private Please conference today Securities today of subject actual begin These than materially today. description undertake to forward-looking I on expectations. from any to expects, differ risks as occurring differ call, intended for intends, XXXX as results the and other after are forward-looking this statement to identify speak meaning of and reflect words of do uncertainties we Act to issued and update to cause statements press refer circumstances events to

morning. discussing adjusted operating this press ongoing of between GAAP is because core reconciliation it useful facilitate in quarter be measures primarily the We information non-GAAP of overtime. is our on and our our results the will results for full consistent basis. can We that an and adjusted release A believe non-GAAP results understanding comparison enhance

Jim Systems. of me now Jim? to Cannon, and President CEO turn FLIR Let call the over

James Cannon

of DuChene, quarter and Business call. our General you, Counsel; Industrial Unit; Merrill, Jay, Todd David FLIR of Pennisi, Business Business President joining Jay me XXXX President Government Travis CFO; President Unit; Unit. & Lowe, and our and Defense you, for everyone are Carol today Ray, Frank our of Thank our Commercial earnings our With thank second

standpoint. to We expanded operating improved the was also second quarter The the was quarter presentation. XXX down million, This exclude When the revenue successful organic start we basis you of quarter second on meaningfully XX%. of revenue of top-line second we expanding over margins, points early-February, I’ll our the another in operating and slide second XXXX. was quarter XXXX grew of growth generation. business, profitability quarter three reported grew created leverage review strong bottom-line quarter $XXX the XX%, and increase of which second second top-line morning X% double-digit and an flow cash organically, from the of a growth gross over profit the the Security divested Adjusted of XXXX. quarter gross

comparison basis in to growth. We ability earnings expanding year’s levels. quarter. growth year. We to at adjusted growing leverage, These of demonstrated well division reducing finished team XX% per position are to closer the XX%, a level. by income to saw backlog XXX and the in the the instruments adjusted point aimed to points mix first integrated grew in XX driven of improved for certain XXXX, strong also solutions. our impacted confident Total last working six last versus to month the efforts XXXX working and million, represents and of the divisions, was was operating of growth income. per and first share period book same the Due $X.XX, the by Operating for capital balance of end effective by Adjusted revenue flow quarter continue versus to quarter of which share income in The earnings more We operating in operating rate tax grow equal months build our utilizing XXX at $XXX increased geographical the quarter $XXX EPS our basis company been backlog FLIR taxable million favorably cash expectation. profitability deliberately plan and to to the $X.XX. long decrease ahead times has cycle at lower Method, our over backlog. lower lead particularly imaging of consistently XX% remain

we second to exceeded be first expected the While expectations. performance half than XXXX stronger growth half our

results $X.XX. and remainder updating per exclude expect X% XX% $X.XX shown As XXXX of of at share are billion adjusted the a we of business represent outlook $X.X year of now you be results This the slide outlook the our growth billion in be share three. to range in to and the of earnings range assumes organic year rate the XX%. adjusted of through revenue for ranges these result, XXXX, to to earnings from growth tax bottom full will the X% to our per effective XXXX. to $X.XX Security We When be of divested the XX.X% revenue full

We $X.XX September also announced per on record of XXth. which to of will August payable quarterly be today of share, as a shareholders dividend Xth

of simultaneously. flight Nano sharper capabilities Business actionable still image protection displays. and Axiom Reconnaissance United XX acquisition since forward superior the the the additions the May, use by introduced gap. winning family role performance including smallest, same launched award processing new simplicity business critical playing mid-range XL it's in host Raymarine or many and X screen Personal which introduced and radar, and about. Business intelligence, enhanced and marine of Unit’s Business grams, detail for deliver the combat division announced warfighter. incorporate and line Also its The for largest parameter reconnaissance or Commercial petrol the report In open various represents RXSS-XD paradigm excited up we products offers the Moving range System year. location a The outdoor radars, to small Forces and Two security camera performance solution Hornet that withstand modernize Axiom was tracking, a Saros XXX the Ranger by Saros Black version land effective altitude is the detects our Unmanned FLIR's the our and Commercial provides Black security At the three third of Raymarine to Conference, technologies including adds packaged Core. Business premium RXSS which and of Unit it Unit the XL border our bridge militaries performance to superior data. multiple new mission longer size business four, in Unit capabilities, SOFIC, In new yachts and businesses & announced Magnum new in cost high array to offer Thermal featuring the sleek indoor and Micro we wide thermal or detection environment. FLIR’s full reliable world's Operations verified very to of location Hornet that of Defense warfighters RXSS-XD Axiom the Black latest Government This we’re commercial pedestal, line Nano-UAS X. Arial Family Magnum Government state-of-the-art their trusted RXSS-XD generation the has The Saros, PRS outdoor image June, ranges Defense Security Guard. glass a and of offers Lepton also a area installations immediately open in the Industry and sensors X line. Coast a May, the the the the line UAS, capability. miles. last in agencies, threats target the the filling and slide objects intrusion the can Hornet array look global At next customers. including of proven providing States marine drones exact reliable, equipping technology, accurate, Axiom focus dismounted to the can Designed both & representative launches latter to detection government military and harsh Special our manner. land alarm Lepton over camera products introduced alerts quarter, detection combines target to with for in technologies, multifunction The RXSS helping the on built the only unified of air utilize System the a Both and detect radar delivered solution into actionable generation

to other tool Business bicycles autonomous service for reduces product of more accidents division thermal and InSite, to and monocular new high-profile third introduced lightweight inspection FLIR UltraLite. of autonomous in latest handheld electricians, less thermal Driver professionals, most the Instruments the for safer enables cars or affordable a sensors and customers, the our results developers weights for systems. and and Also driving June, Ideal the advanced XX,XXX device In heroes. first machine data application is images, helps for a enable demonstrate advance delivering development products in location. thermal Systems thermal show equipment the announced learning mobile FLIR machine self-driving researchers capabilities. inspection The preparation vehicles. the X announced information InSite OEM accelerate These contractors testing and Unit's annotations its This surveillance time, to The Recon sensors thermal for workflow V our Recon can efficiency to Advanced client Unit commitment to or portal the pounds of kind dogs. fixed a the web a thermal even Industrial as than clear quickly. series, new Industrial business a to thermography automotive deliver management location ADAS, for people, include to dataset and Recent organizing vehicles, featuring a intelligent compilation mounted used the Business military of Assistance in availability thermal one increases on dataset electrical learning our with it's than need June, be related

better intelligent we a move their experience deliver of towards solutions services. professionals and empowers demonstrate As value more customer the to imaging inspection InSite visually

over quarter turn her now and have call Let second financial to the Carol operational me and Carol? highlights. review the

Carol Lowe

business XX% results. was are on and in exception Europe the with compared due FLIR to basis. second to X% East of in second quarter all the growth the GAAP all Jim. you, and Government was Latin year by total of to declined compared Geographically the $XXX and yield and an Reconciliation gross year-over-year quarter On was X% U.S. margin Middle million units. Canada prior Please increased regions for improved the with of points our up units. and the expansion. by expected gross slide organic across the timing. government revenue was filed adjusted appendix. U.S. three the improved strength Consolidated sixth product Asia versus to a consecutive Overall on non-GAAP on to basis to mix, products impact revenue margin a were gross basis quarter on Defense all X% financials financial an XXXX. Revenue also driven while delivery of cash is revenue XX%, see increase across and flow flat largely XX% year-over-year XX% prior Method’s and sensor XXX year Thank of basis. was you’ll revenues year-over-year note our included XX%, America new business organic and margin data five quarter these Adjusted It improvements.

Cuts impacted margin Second Adjusted margins for XXXX. capital of operating was the decrease top-line quarter net XX% our and year. the QX by Tax the for Act, operations improvement to up first effective levels. tax than XX% enactment income our half XX.X% of quarter to to as period than net the approximately driven per prior points controlled versus driven geographical taxable in by relative last XXXX primarily was to U.S. tax year, income. increased a earnings a XX% income now from year. $XXX as higher expenses adjusted expect XXX the for the by share higher be of and XXXX operating basis XXX working and Cash to points the shift growth. expected rate million, This in million of a We well gross was same rate of mix $X.XX, was last prior Adjusted due increase our basis over favorably flow $XX Jobs was second and earnings adjusted XX% growth improved year,

half $XX.XX. the we the X During of million of an price at repurchased year first average shares

Business our saw business business balance dividends half quarter returned increased Industrial increased Despite unit unit $XX across and organic level by & XXX first the of With cash, these and growth level three we $XXX cash to paid to points units the of million. and XXXX. in an quarter shareholders these double-digit million strong million we of $XXX operating all basis during basis. the during on of growth Defense second Government in uses we XXXX. million At the second over $XX our repurchases margins

the X% $X.XX expectation As Jim of revenue plan full adjusted when mentioned, half for And expected guidance exclude billion This growth EPS have year. year to of Revenue lower growth now $X.X XX% you representing we is organic to X% $X.XX, and operating EPS revised a our expectation full our billion. divested is $X.XX now the businesses. first guidance our than comparison incorporate in to adjusted and XX% security tax rate. to performance

XXXX. slower lap the first saw the performance strong we than in half. half We the half growth begin continue to in second expect we the second in of to And

operating how across income six Turning review to business revenue to each contributed, units the and board. the increased of slide organic

UAS. Business second quarter, Unit the the this $XXX the growth operating year-over-year million, program, operating systems for mix gains strength gas and shipments quarter was XX% XX% from gimbaled productivity UAS margin line year-over-year. profit Government growth XXXX. XX% for the in leverage & mix industrial particular revenues Healthy was operating XXX second the basis by with of Broad growth side compared for On and method. and FLIR increase, $XX year-over-year, product helped points drove EO/IR-FP and up prior year. operating improved in higher slide, optical QX, growth. Defense Business driven The the automotive XXX controlled quarter in Government of Industrial positive the DR-SKO to XX%, with have left XXXX. basis expense Defense imaging, expanding million, industrial the product drive Unit revenue income Deliveries Operating top-line this Operating system points. of of product the margin due mainly than to increased and resulted business

gimbaled orders recons. the bookings for by and grew quarter, second and systems Defense Government During X%, handheld driven

timing program for Soldier focus on While the in year-over-year a we and the Army backlog Black our worldwide program, new orders quarter of indication of Notably growth the from to the market. million Nano-UAS leadership U.S. $X.X for order the million, one-time the system program $XXX cement and the XX% FLIR strategy. and declined to phase continued DR-SKO Systems executing Government Defense Hornet quarter, a due in Nano-UAS book-to-bill booked the mainly Borne strong first a our over continues to is for for our winning franchise our of of that programs

XX% six Unit. the right On summary side a quarter of slide second security was early a Commercial that is of Business down divested the year. were that comparable prior this due the businesses to revenue year-over-year, year Commercial included

from last Excluding X% second quarter the divested grew revenue over Commercial revenues XXXX year.

Raymarine performance line of Continued quarter. primary second the market the of Axiom multifunction was embrace displays of the in the driver

As is quarter the a calendar strongest for reminder, the second quarter division. the maritime

income XX% for year-over-year, operating and Tactical Operating sales. increase improved year both by gains the primarily We product margin also prior Primarily as business and showed Commercial product growth Security that XXX a Transportation mix margin Outdoor in due System points driven FLIR Intelligent over division. thermal Systems revenue businesses, by mentioned prior previously including included driven the lower comparable to the Method. as well basis productivity year, increased

initiatives and channel in users, the Method of of OTS law business, Tactical reorganize Unit. fuel, Commercial are to part shifting reduce professional including primarily continued made to focus underway and including simplification, the System feed focus our facility strategic portfolio government Outdoor FLIR Utilizing As and the optimization agencies. complexity, consolidation, division enforcement the business, our product end we to the our to decision or and have Business effort

growth summary success. require position the for profitability long-term, the I’ll and the While business stronger unit. Jim. near-term the and it will business to my a the we concludes over pass believe yield will sustained in This this this back call revenue investment, will financials now of

James Cannon

leverage cash us a Carol. solid created top delivered full our expanded year many you, guidance. was raise revenue flow quarter improved generation. enabled Thank margins, to We on growth, The operating organic our This success bottom-line and fronts. strong and

still Our where commitment. can a to areas team’s performance company. testament improve the we we is But and see execution a as

have And times working Our by continuous turns leveraging improvement improved world-class on our commitment quarter, we opportunities the to ahead there for company. we XXXX. but work X.X journey slightly progress are FLIR the still our by in achieve Method, capital many of to a become as operating

second everyone outstanding the an want our communicate the employees half Investor and It were to attended have already opportunity York committed priorities. strategic to in was in our With thrilled Day of we’re customers, I underway, May. XXXX turnout deliver to for our thank sustaining who our and to shareholders. to we New momentum

to FLIR as foundation, as and focus priorities Method feed years. coming financial well as our objectives the strategic fuel, the with our Our business for the

the what’s our values operate want exceed now are be certainly ambitious. of winning is integrity save our In closing, six bold, FLIR These the center ahead of We and our I’ll innovate with Operator? everyone culture. our sense for be a be be lives daily innovation, they We’re remind to tasks speed, the integrity which and for in drive to and up I ready company. enthusiastic and brave, consistently our world’s call FLIR of Q&A. to purpose, open order commitments with livelihood. values Method to to be and

Operator

instructions] Thank from you. Goldman now coming a question-and-answer from question is Our be We’ll Sachs. first Noah Poponak conducting session. [Operator

is line Your now live.

Noah Poponak

Hey, morning, everyone. good

James Cannon

Noah. morning, Good

Noah Poponak

way to in had there, the cash in free to indicated that. go to started follow-on sort comments but get working you you cash you remarks the Because your long target. quarter wanted some XXXX that mean, from target capital annualize of of made of free the I maybe just you sort where the and Jim, where I flow a only closing on imply just if in this here dollars that kind X% there And annually depending to XXXX are looks would year. in cash your quarter your the to growth X% I that really free flow is strong, on improvement, to

give it little quarter? in the around how little of XXX number, relative there? but you��re given kind you maybe that that put feeling And about the a gave light you’re it looks good more trending why a so us I color And so was where -- know to then, actually just

James Cannon

say really number, Well, we’re profitability. not XXX if certainly in exceed increased going by the driven the that can half and would to first hard at work the stop I quarter but we in

We’re seeing of improvements see Method kind we in the not the FLIR yet that to want working through capital.

So about our we FLIR with modest the had in But arbitrage talked working is work some quarter, as doing the momentum. the AR there. the really that Method at but improvements we’re manifested in not very turns between half make levels inventory capital beginning and certainly really Investor though with room the to Lot of first Day in and AP. not we itself

So driven have first really the increased is add? by profitability. half the anything performance in the you to Carol,

Carol Lowe

there exposure, we’ve the from and reducing before there. around percentage after not or note Jim as of few areas we you past I focus did the past to dues on but will job start discipline and receivables a discussed bad the going as at on that some good some a was agree you hanging our it XXX%, working few a teams some Again just of fruit I those capital low usually as identify debt focused risk will Noah, on especially balances. because

the low our forward, on especially as know addition for turns. in benefited the challenges quarter, the focus going we we get that getting tougher some to improvements of the fruit. of profitability And inventory we strong benefits hanging in So

Noah Poponak

in comes XXXX, Carol, out can versus the Got Lorex like then, organic XXXX it, year? the the up you helpful. much square how And just quantify for in reported versus revenue that’s

Carol Lowe

in total there’s of and revenue XXXX was for divested QX businesses there’s February $X million only divested we the up Security -- approximately and early about that XXXX. So the $XXX made the in XXXX business million of

Operator

you. Thank

Drew is from question with Lipke coming Stephens. next Our

Your line is now live.

Drew Lipke

question. taking good the Thanks for morning Yes, Carol. Jim,

James Cannon

Morning, Drew.

Drew Lipke

being is I'm growth quickly sounds So and maybe first I material sooner each can how you know of these maybe were the industrial franchise than you that automotive both driver think, we and expect here. opportunities? how be to I you this for ramp like it out material this I industrial of should contributors called a these and expected. time you UAS, and for And curious are would these franchise more strength highlighted in opportunities auto recall also

James Cannon

behind with Intelligent Well, as our also infrastructure, at and is come. able oncoming to Day for to discussed work see through to but much connected vehicles working communicate commercial technologies development smart put on be team of we’ve VXX like a and area business of threats as a key there’s focus to We’ve thermal Systems Investor just and effort effort done to ADAS more the well. business ADAS sensors, Transportation more lot to not infrastructure us with that

fighters to from selling aspire results of providing to for in them it or personnel. commentary? a having are good small that fire sensors do the Unit. you developing lot quarter responders business that not we other search the of Business And themselves we’re that to it’s example want saw where small that’s where indicate UAS But manifest beginning Frank mentioned While that’s not to beginning that that something base Industrial we’re base that President growth here to add certainly quite to the Industrial albeit the is rescue at Frank complete and we some from solutions to market. first you manufacturers we’re yet, UAS the a success just be is

Frank Pennisi

into and category we’re Sure, more the price only fact in advantage points. XXX,XXX in to us automotive that more today allows that gives sensor cars us of the short-term because qualified in a auto we’re get scale the the

more can and well to autonomous to the our the the as you're We ADAS market XXXX, to in part as to are our with in XXXX, us reorganized further it’s and and Xs, shadows existing only the Because allowed commercial able class tier the VXX that the the automotive rain seeing wanted glare X affordable materialize be going it's as the when allowed to of put going qualified to the us remainder also fog than we're well. team, target And going military out see that reorganized aware, we're It's the we but trucking the as XXXX, solution raising awareness, to so. It’s investing into in taxies, in happens. progress get team of headlights. also we're autonomous ability ones. aren’t our Those type that OEMs, it prospects well, complement well to market. opportunity not the consequently, commercial ADAS ITS. check grow until do year. really and us good times start we're analytics, throughout and And the allows So its four and get a X to vehicles fully it but we're making sure be of sun

Drew Lipke

cash And Carol, now. $XX have helpful. net then That's maybe this million you position follow-up for

structure in some to as repurchase the How degree. build of should today and forward. opportunities repurchases the both here optimal think we in go about capital and pipeline just share up cash stepped light we the activity You acquisition

Carol Lowe

stated around the be it M&A. focus to the we primary is as buyback, continue Drew, before, to as opportunistic the share relates definitely we'll

always opportunity We continue pretty have are and at them. robust looking studying and a to pipeline different

the focus And be. so will where that's

regions we're efficient left very M&A repatriate of outside dollars portion also how And meaningful always we a in make that make note to sure in sure they're want thing where of we U.S. we cash actually the to sits be opportunities. to other that have we believe those -- The

Operator

Thank you.

Ciarmoli question next from SunTrust. Our from coming is Michael

Your line live. is now

Michael Ciarmoli

but strength taking end of tougher the high comps the XXXX get Hey, I only I guidance, it half on growth the in good versus guys, quarter. the -- of about some are there for second the should and know half question slow or of implies or back guidance. mean all Carol, And these morning business growth roll-off just the the just year-over-year there thanks on the first XXXX, government it is of about. segments any mean, versus nice X% even you're we I the there trends maybe was year of either change indications that a in half. that seeing

half understand to so second Just first guys half. like seem you trying why any momentum lose from deceleration to there It much would doesn't here. is

Carol Lowe

Okay.

fact business and color Jim a as is as that revenues more he actually perspective. for on second But can't earlier the of numbers that full can generated more of I'll the the a And the XXXX, have XX% businesses color that So in this, a reference a to businesses we add divested, to in important reminder, few -- going lose were Security $XXX just that point. of spite million question then give to note I it's referenced but for Noah’s approximately year the half fell XXXX. from

year. quarter and than is first We headwind. about businesses the So of year XXXX terms year, the the delivered half comparable. half -- was the and the that a for the There what be of second very earned is seasonality falling more XXXX Also full our how in somewhat than in the the of it XXXX. half fact second present it's DR-SKO, throughout the talked below numbers that in should maritime with XXXX the the compared while much is second shift to business have a of stronger other it does

So number other the just color you some impacts business in those outlook pure are big if about Jim, standpoint. And add like to a you'd from had total.

James Cannon

into that half certainly prepared second that's the go And want of as other think highlight. things Carol couple on OTS remarks in a mentioned we in year. summary it her I comparable revenue reorganization. I to A good the prior to the Yes, is

of business of strategy consolidation with government bold associated the a cost a shifting to pretty enforcement, move fuel, So is facility part of part focusing feed, our to government agencies, OTS taking we're that. other the a business, the law focus reorganization

to in that's investments to two related quarter, business And other then second the quickly we make also to compliance XXX% bit significant we’re agreement. about, adhere uncertainty that talked of being we consent bit primary not to inflation maritime in are the ones strategic our half. ADAS bit creep We in one instruments And in as making and have a the these components, sure while tariff the of the beginning fuel earlier. programs moving a that we’re into second investments the mentioned there’s a

into So have second things considerations those the all of concert what sort we in half. for of our baked is

Michael Ciarmoli

perhaps budgets And basis; pick short have the just contracting -- give helpful. would velocity in some like happening can a of on thought then up DOD one the look place cycle bookings pipeline been maybe you that’s any you maybe now it, that have perspective, the us I here? sequential higher color the or last David. that what’s for from on Got defense what’s sort are seeing might

David Ray

So, just current than state the for quarter, team hitting me excited greater about X.X I book-to-bill. really let the the am

that’s predictable think backlog leading indicator growth. I a and

And drive as throughout to so this really our future of in quarters. part strategy has really team consistency -- quarter that book-to-bill and the looking X.X

QX expecting on that franchise our readiness I programs and we’re the modernization of our it’s that of and is franchise place when for efforts standpoint think More budget a stable think good us, proposals look from assurance are QX as those year. the and of XXXX, thing I account. up these modernization pursuing firming and next we’re so at part in for you the

around goal X.X year to predictable be this is better book-to-bill. to continue Our a

really our predictability hit book-to-bill better to and or a successive driving as I higher am QX, into going and I growth today think But the our backlog programs franchise ability around our that to in on that be continue where that drive to drive our that bookings. hit with wining sitting rates backlog driving move X.X to most to key to respect year. level then is ability at we predictability the and

James Cannon

billion pleased that year have year, fund add fiscal long the of just of XXXX, we’re I’ll time to Investor a first really budget. as the franchise programs the late as XXXX, overseas to operations time, In contingency towards end before XXXX see targeting in for a mentioned back meanwhile budget we’re $XX And a that a and will that lot DOD Day, this are the of the we at DR-SKO programs. for in the close half those comes

threats. to hard they bring ever compete sure to evolving growing solutions customers to and best make So can face our we DOD as the we’re going

Operator

you. Thank

Our from from next coming Carey question is Robert. Baird. W. Asher

Your line now live. is

Asher Carey

guys, my call. Hey, thanks morning good for taking

James Cannon

Asher. morning, Good

Asher Carey

to machine opportunities scale gain there. wanted your vision near-term about in I to ask

are You these can more in but niche technology have seeing space, provide around that still you’re mentioned you are Point some pursuits Are the also there transactions? that headwinds some opportunities the priority, color M&A type there are there? deals type Grey more

James Cannon

a sustain point we backlog love we particular in mentioned Acronyms, and That’s production particular now Instruments, lead times, backlogs To reduce. that got businesses get earlier, two business. launches. try I leverage Method done great the since had last IIS Point organic business, Unit couldn’t FLIR year are Industrial and back to really that smartphone the to growth question, the is was interest where acquisition, book-to-bill that fabulously its we to to we the at machine we reduce IIS our FLIR Grey in particular a and our has Business fueled remained know by you for we and vision acquisition mobile tremendous,

Now with prior organically business a tough year. comparable that is this our said, year, IIS growing to really even

and other have from to is our had. in we comp while have is space competitors strong, that flattish again the reductions because benefiting lead time that seen businesses some continuing the grow we’ve So growth so

market in some regional expect like targets opportunities, Point a to We lot in cases, as area to are you looking But see us Grey we’re players more of a with space. very acquisitive space market the well. continue to that active, for be can involved for it’s and very looking consolidate fragmented

Asher Carey

Great, thanks Jim.

Operator

Thank you.

Our Ricchiuti is coming next Needham Jim and Company. from from today question

is live. line now Your

James Ricchiuti

wondering morning. seeing little can segments some to might initial just Good the where give you. three sense early us as if to a margins I Method. you're FLIR whether respect Thank benefits you talk And the about the be implementation. to some could with more bit you in the more was of significant

James Cannon

that we're to the FLIR that work excited supply its I’m rest I'm done. teams. focusing we’re shop at can lead the introducing and at In really is big productivity first significantly Method drive point various XX% events the it, they're folks a effect and distribution Day. our the the finger basis horizon to in FLIR improvement, and closest to that the six Rick our Method but I most example things [ph] have over the could times across XXX improvement chain the Hard of the excited that has to a about right customer your reduction various do starting company velocity, and to day lead quarter, There the components. points XX.X hearing time get time down has really driving. It's teams the and The in on the of the of to something having because plan backwards. driving launched in and the the strategic movement lead some Investor actually practices talk our lean went committed component we lean result Bill on [indiscernible] in margin? because to been But communicated factories, about. put been FLIR we Method. every We to and reducing of of manufacturing And efforts for want the FLIR And yesterday, I day the the attributable floor that Method to look to reduction. working

Day couldn't at we created add doubled notable having that particular now went that Without it's the output. as we and effect the that some into almost this overtime. meet Probably dissatisfaction. and our got it more line capital any most producing and at I've in or we've pull is with XXX the was between do earlier it demand example cameras one just we referenced that XXX than to that we incremental Investor And IIS sort perhaps mentioned resources. customer it created I we backlog and of camera believe and had call we on growth So earlier

So from still are some get we numbers, years Because we company begin wins that I be momentum. give really carryover base today into turning taking to we're exit numbers the early as that into hits us these the little XXXX, days, but now. won't will little it's wins to believe XXXX we three big enter these the and company that

As cetera and Method muscles excited empowerment the those machine make But take we and again margin and investments is we've around I is I'm folks in sensors intelligence, those talk cetera, gives their in And business. it's move FLIR and about to from improvement new it the to really And workspace intelligent drive self-fund to own them to learning et I’m can we've the contagious. something mentioned, improvement business. et the most so critical investments. that to means to excited because artificial got sensing ADAS, sensing

James Ricchiuti

business the coming in I in Thanks. I'm say And surprised the to growth final where just if And IIS about still Can you see the talk question, may growth, in market. and Grey one light organic you that the Point of from? business. the weakness a little smartphone growth the is

James Cannon

countries, smartphone as et is of mean, back automation customers I from of or processes machine moves various the certainly outside smartphone to is Well, It's production into cost quality production. industrial automation, not market cetera, how remain control, automation a coming higher many different manufacturing automate just our whole itself. host a of of comping move is lot competitive. There for

the growth, but the to general the kind can't perhaps trend in I more need place, machine of point just for and one So we’ve for around automation seen vision.

Operator

Thank you.

question next Blair. William DiPalma coming from from Louie Our is

now is line Your live.

Louie DiPalma

nearly Carol, Analyst the we this good goal your quarter expect defense trend margin to planning XX% to reached the expand revenue as revenue you research franchise range, to still Day, higher remain ADAS, that to XXXX growth Hi, operating XX%. and initiatives for in FLIR's over of next expense and of R&D for programs, years? percentage or the several are a And discussed development should you mark. the With morning. machine your you at for vision the

Carol Lowe

trend we’re really $XXX that an from Louie. on to invested planning R&D thank have you, in And the amount talked as we been higher, engineering perspective. about total that’s So, million not

If generating you on good prior fact dollars X% for that years, around that return been we don’t were this the spent. to historically consider look and we the growth a most year have that in investment

So, will return at the support and generate go to in to really and dollars a that the more as can move those strong point continuing as all sure support. the be FLIR make how serve highest technologies are we and forward going on about as as allocated, to the where today markets that we that maintain well faster have solutions strong leader market very us opportunities it’s the we

Louie DiPalma

development and of as Okay. wondering how will I January was And Intel And has part kit. progressed. mentioned for you the in a the And in kit I different opportunities And XXXX or be that terms ADAS? ADAS the place software partnership and call, ADAS announced was on in topic Jim, when for like the OEM selection NVIDIA probably on the the FLIR XXXX. think won’t XXXX, that interest with partnership development you a do also wondering vendor of until timeline different take material

James Cannon

That’s a great question.

with There in of market be say, and developments are trucking on to in on roads in is and that developers’ commercial white one that they really and to along one offer autonomy lives of a applications, unmanned I I that unmanned if There been learning technology save biggest of many we automotive level there all that various interest applications the quicker. in predict. annotation when know vehicles to is a work done the note get selections think X sensors heavy need tool to the and answer going space, some hot bicycles, cetera backup is incorporated thermal a that mentioned knew objects to dogs, we But IEDs wish to as have bit, to develop develop I thing vehicles, from continue awareness there’s military I earlier the I emphasis will decision Tier machine big automotive do. regard. automotive the technologies obviously help that kit, that move threats we to. is And to ground be think manufacturers unmanned unman to opportunity to researchers that obviously et our the that that’s to pedestrians, that that combat of striving with faced is with if that around may are to developers of a obviously hard themselves the have warfighters I great

do et you lot aren’t operating vehicles communicating have where also in don’t pedestrians you have You the that a a cetera. about city concerns that of or

definitively lot big and effort answer to when, a we are automotive researchers of talked in OEMs Because those developers. are selection to that able providing again earlier putting about is we have in business building going technology education decisions thermo commercial not criteria, And out for also the well. but to effort around So, do we to know a capabilities offered development we as compelling our as believe we’re there. make

Operator

you. Thank

from next Our from Imperial Capital. coming Jeff Kessler question is

now line live. is Your

Jeffrey Kessler

call, good for folks taking to you my talk again. to you Thank

James Cannon

morning. Good

Jeffrey Kessler

technology in which springing up. sensor behind what and where can the I because you this the market these goal the two programs, the in call again am play definition goal beginning and At shows in the two was your it, large off in which where it this? the technology take attended, from larger cities niches about cities if higher fairly could the you core play both Security is -- this, development into a I for also world comment Saros sell in and camera last inside little in state the -- the it bit want you sensors sensors, -- can it on getting trade can wondering play website it have to sounds can a a that a cameras you couple in same shoots of getting and what at and verticals the about safe are of verticals developing and know talked but point that’s world the you what scenario, have we these of dual view of great Hi. for got price much high obviously you of Lepton

James Cannon

and the our we’re our Government of seeing Absolutely, into collaboration vision for connected now that can we’re from Saros it intelligent of and teams Defense for our and technologies broader teams, if we’re with happening excited that’s really intelligent launch back smart amount radar mentioned But example and the well. cities from teams a Security transportation you businesses perspective machine our others come as ITS. excited up between about and I

that with also As got with I you referenced that ITS with VXX we’ve connected and business synergies ADAS, earlier smart has certainly Security mentioned. as traffic that management

more back a my with hard can treatment I’ll I'm infrastructure, door, yard, equipment facilities, a do. And on to teams be opportunity abound is again one put going so airports, whole have an could worked long say our what time host. there’s plants, really we while power key water the for Our critical to be Saros small government technology aren’t to market as the motion the incorporate to the alarming verified very initiators, for defense mean, setting detectors efforts of off we’re dual false that roadmaps think product when we’re stand camera. sensors work market. you for core smart programmed coalesce responses, trigger the the so I and safe be begin really movements team, come. able between and other business, example for security, the ITS security and now starting city by commercial And it and LEDs to be have hard team activator sensor wide they Lepton parameter you have wide about can technologies could the there’s commercial after. state illuminate as And radars Saros begin it’s outdoor that going a applications roll response. would to know will person. have to the and Certainly a range they of video between that the That see proud that our our collect markets to verified to But area surveillance we’re really where that

Jeffrey Kessler

Saros whether technology end-user or they’d for the growth, that stratify sensors depending In of the commercial for various start so types the primarily just agencies you offer can way these big government couple more the has you these -- a last been -- or to but focused the of to of there the of you sensor, so be other be to on of you they programs? choice can able a are And Boson an put are years it lines you giving follow-up array is part end-users words that product into need. going that are to what on essentially different realizing

James Cannon

to of cores going to or different that those a Needs requirements. very got unique choices camera customers. might be range have to we’re satisfy No that they much bespoke offer we’ve

So going customer that what’s solution proud well, know absolutely again on for right that for we’re we’re never satisfied. you now, really the ramping Boson of product right is as as production to really remain focused but need. in the product

going push to to uncooled our SWaP-C camera in cores. We’re always thermal continue

Operator

you. Thank

Global. Sullivan from Seaport is coming question next Our from Josh

is line now live. Your

Josh Sullivan

quarter Hey, Carol. good here. morning you Jim, Nice

James Cannon

Josh. Morning, Thank you.

Josh Sullivan

with web learning you portal, highlighted FLIR effort efforts needs. InSite ADAS The software machine two

at internal feel to you bolster assets this You FLIR’s are do robust enough those. need point software

programs doing? some where you mentioned joint I think ventures get these or with some to to self-funding those can you’re you you for of need go

James Cannon

we mean to organic essentially right go we’re the in certainly well, have there. our you talent Yes, capabilities as When more. forward now of I and think both, It’s about that we’ve investing areas own the have we gave a to answer we got bit certain have evolve.

places some others. under in in strength over We’re

AI all So And with recruit, with. so of skills that's talent are in a build technology them out competences. those cases in. never have done may retain the things, investments unique in we’ve augmented in as takes organically own, And learning capability that there develop robust we we long-term. and that with a to partner as the you but make we forward have that can machine companies we all time software we've go we investments minority so We’ve we’ve want we've these But so exactly are to made so that move handful kind technologies. that these but partner far software rapidly we same to our made. organic want at roadmap, far invest get really capabilities Companies our again that the to of lot that know out to have time, we’ll AI of that to

So conditions that now we're the we to regard. best can to that attract talent very the create investments those making in

Josh Sullivan

profile. V you look we think a for of quarter, I the had they're some as to which then, integrated more Recon portfolio Okay. your we now product FLIR And product churn mean, efforts how Should launches the should months? this beginning next that? industrial an portfolio? you're the How Just XX like as thinking portfolios, reflect over see the across of kind about well refreshes accelerated product

James Cannon

to the So of of app I you’d would sensing electricians, needs It's contractors, want with again product a told comes That's moving when sensors web solutions. an InSite. our from intelligent understand churn. perfect what helps example do example their I've a We to say less to we to better. real I it a accelerated work, it's the think sensing product, you've and of of don't got team want portal electrical to where really customers see the customer organize lot their is to that communicate better. them Frankly,

units. of move our we need that solving intend business all as requirement an acceleration, know if I mission to real So hard bringing we're we're don't to you certainly upfront see forward, the we they products working but see across where for a you’ll and market that have user on

Josh Sullivan

thank Okay, you.

Operator

Thank closing you. our floor the or question-and-answer I’d for of further turn end reached back to session. any We've management comments. over to like

James Cannon

to our Again, all I thank want joining you for of today. call

globe As task and the I you Thank to speaking over across for X,XXX you. their and I forward continued to passion thank members all to again especially soon. FLIR our want dedication purpose. with the look of team always,

Operator

does Thank today's conclude teleconference. you. That

wonderful a may you You for your And thank We lines disconnect participation today. time. have day. this your at

Teledyne FLIR (FLIR) 25 Jul 182018 Q2 Earnings call transcript