FLIR Systems Announces First Quarter 2015 Financial Results

WILSONVILLE, OR--(Marketwired - Apr 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
Revenue				$	344,517			$	351,542
Cost of goods sold					168,620				183,010
		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
		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	)
		Earnings before income taxes			63,040				39,205
Income tax provision					15,130				9,311
		Net earnings		$	47,910			$	29,894
Earnings per share:
	Basic			$	0.34			$	0.21
	Diluted			$	0.34			$	0.21
Weighted average shares outstanding:
	Basic				139,768				140,932
	Diluted				141,472				143,828

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
		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
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

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	)
Cash used by investing activities					(13,139	)			(9,590	)
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	)
	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
	End of period			$	547,780			$	584,095

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
			$	344,517			$	351,542
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	)
			$	65,754			$	42,451

Investor Relations
Shane Harrison
503-498-3547
Email Contact