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FLIR Systems Announces Fourth Quarter and Full Year 2012 Financial Results

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PORTLAND, OR -- (Marketwire) -- 02/07/13 -- FLIR Systems, Inc. (NASDAQ: FLIR) today announced financial results for the fourth quarter ended December 31, 2012. Revenue was $386.4 million, down 5% compared to fourth quarter 2011 revenue of $405.2 million. Operating income in the fourth quarter was $100.1 million, compared to $109.7 million in the fourth quarter of 2011. Fourth quarter 2012 net income was $77.3 million, or $0.52 per diluted share, compared with net income of $76.1 million, or $0.48 per diluted share in the fourth quarter a year ago. Cash provided by operations in the fourth quarter was $112.9 million. During the quarter, the Company repurchased 4.5 million shares of its common stock at an average price of $18.84 per share.

Revenue from the Company's Commercial Systems division decreased 5% from the fourth quarter of 2011, to $212.8 million. Within the Commercial Systems division, revenue from the Thermal Vision and Measurement segment was $180.1 million, a decrease of 5% from the fourth quarter results last year. The Raymarine segment contributed $32.7 million of revenue during the fourth quarter, down 7% from the prior year.

Revenue from the Company's Government Systems division decreased 4% from the fourth quarter of 2011, to $173.5 million. Within the Government Systems division, revenue from the Surveillance segment was $136.4 million, a decrease of 7% from the fourth quarter of 2011. Revenue from the Detection segment was $12.8 million, a decrease of 46% compared to the fourth quarter of 2011, and the Integrated Systems segment contributed $24.4 million of revenue during the fourth quarter, an increase of 134% from the prior year.

For the full year, revenue was $1,405.4 million, down 9% compared to $1,544.1 million for the year ended December 31, 2011. Operating income for 2012 was $303.3 million, down 3% from $313.2 million in 2011. Net income for 2012 was $222.4 million, or $1.45 per diluted share, compared with 2011 net income of $221.5 million, or $1.38 per diluted share. Cash provided by operations during the year was $285.5 million.

The Company's backlog of firm orders for delivery within the next twelve months was approximately $520 million as of December 31, 2012, a decrease of $45 million during the quarter. Backlog in the Government Systems division was $356 million, decreasing $36 million during the quarter. Backlog in the Commercial Systems division was $164 million, down $9 million during the quarter.

"The fourth quarter was an encouraging end to a 2012 that was focused on rationalizing our businesses to enhance operating leverage and prepare us well for 2013," said Earl Lewis, President and CEO of FLIR. "We saw higher bookings in the fourth quarter versus the prior year, helping us end 2012 with over $60 million more in order backlog than 2011. We also reached record operating cash flow for the year, which allowed us to acquire two very strategically significant businesses and return a significant amount of capital to our shareholders through repurchasing 10.5 million of our shares and distributing $42 million in dividends."

Revenue and Earnings Outlook for 2013
FLIR also announced today that it expects revenue in 2013 to be in the range of $1.5 billion to $1.6 billion, an increase of approximately 7% to 14% compared to 2012, and net earnings to be in the range of $1.56 to $1.66 per diluted share, an increase of approximately 8% to 14% compared to 2012.

Dividend Increase and Declaration
FLIR's Board of Directors has approved a quarterly cash dividend of $0.09 per share on FLIR common stock, an increase of 29% over the previous paid quarterly dividend of $0.07 per share. The Board of Directors has declared the dividend payable March 8, 2013, to shareholders of record as of close of business on February 19, 2013.

Share Repurchase Program
Also today, FLIR announced that its Board of Directors approved a new share repurchase program that authorizes up to 25 million shares to be repurchased over the next two years, replacing the previous program that expires on February 9, 2013. This authorization represents approximately 17% of FLIR's outstanding common stock as of December 31, 2012.

Any purchases made under the repurchase program may be made from time to time in the open market or through privately negotiated transactions. All purchases are subject to stock price, market conditions, corporate and legal requirements, and other factors. The timing of repurchases and the exact number of shares of common stock to be purchased will be determined by the Company's management, in its discretion, and will depend upon market conditions and other factors. The Company expects to fund the repurchases using the Company's cash on hand and cash generated from operations. The program may be extended, suspended, or discontinued at any time.

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 and the year. A simultaneous webcast of the conference call may be accessed online from the Upcoming Events 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 fourth quarter and historical financial data, including segment details, may be accessed online from the Summary Financial Data section of 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. The Company's advanced thermal imaging and threat detection systems are used for a wide variety of imaging, thermography, and security applications, including airborne and ground-based surveillance, condition monitoring, research and development, manufacturing process control, search and rescue, drug interdiction, navigation, transportation safety, border and maritime patrol, environmental monitoring, and chemical, biological, radiological, nuclear, and explosives (CBRNE) detection. Visit the Company's web site at www.FLIR.com.

Forward-Looking Statements
The statements in this release by Earl Lewis and the statements in the section captioned "Revenue and Earnings Outlook for 2013" 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 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 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 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, 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 Twelve Months Ended December 31, December 31, ---------------------- ---------------------- 2012 2011 2012 2011 ---------- ---------- ---------- ----------Revenue $ 386,385 $ 405,212 $1,405,358 $1,544,062Cost of goods sold 181,104 180,427 673,968 715,458 ---------- ---------- ---------- ---------- Gross profit 205,281 224,785 731,390 828,604Operating expenses: Research and development 34,088 34,920 137,762 147,177 Selling, general and administrative 71,117 80,197 290,298 368,232 ---------- ---------- ---------- ---------- Total operating expenses 105,205 115,117 428,060 515,409 Earnings from operations 100,076 109,668 303,330 313,195Interest expense 2,729 3,175 11,659 5,487Interest income (509) (768) (1,582) (1,273)Other expense (income), net 151 (892) 1,341 (2,098) ---------- ---------- ---------- ---------- Earnings from continuing operations before income taxes 97,705 108,153 291,912 311,079Income tax provision 19,528 31,318 66,556 88,427 ---------- ---------- ---------- ---------- Earnings from continuing operations 78,177 76,835 225,356 222,652Loss from discontinued operations, net of tax (916) (705) (2,958) (1,178) ---------- ---------- ---------- ---------- Net earnings $ 77,261 $ 76,130 $ 222,398 $ 221,474 ========== ========== ========== ==========Basic earnings per share: Earnings from continuing operations $ 0.53 $ 0.49 $ 1.49 $ 1.41 Discontinued operations (0.01) (0.00) (0.02) (0.01) ---------- ---------- ---------- ---------- Basic earnings per share $ 0.52 $ 0.49 $ 1.47 $ 1.40 ========== ========== ========== ==========Diluted earnings per share: Earnings from continuing operations $ 0.52 $ 0.49 $ 1.47 $ 1.38 Discontinued operations (0.01) (0.00) (0.02) (0.01) ---------- ---------- ---------- ---------- Diluted earnings per share $ 0.52 $ 0.48 $ 1.45 $ 1.38 ========== ========== ========== ==========Weighted average shares outstanding: Basic 148,103 155,647 151,634 158,323 ========== ========== ========== ========== Diluted 149,419 157,611 153,595 160,851 ========== ========== ========== ========== FLIR SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) December 31, December 31, 2012 2011 ------------ ------------ ASSETSCurrent assets: Cash and cash equivalents $ 321,739 $ 440,846 Accounts receivable, net 335,163 329,581 Inventories 381,378 336,051 Prepaid expenses and other current assets 96,006 104,285 Deferred income taxes, net 30,960 27,443 ------------ ------------ Total current assets 1,165,246 1,238,206Property and equipment, net 211,615 186,269Deferred income taxes, net 32,223 31,644Goodwill 503,078 498,343Intangible assets, net 140,621 164,440Other assets 124,722 32,338 ------------ ------------ $ 2,177,505 $ 2,151,240 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities: Accounts payable $ 94,156 $ 84,190 Deferred revenue 29,465 28,257 Accrued payroll and related liabilities 41,506 49,475 Accrued product warranties 13,169 13,370 Advance payments from customers 12,150 13,219 Accrued expenses 32,772 41,183 Other current liabilities 4,331 3,886 Accrued income taxes 11,943 2,161 ------------ ------------ Total current liabilities 239,492 235,741Long-term debt 248,319 247,861Deferred income taxes 7,996 17,237Accrued income taxes 22,812 17,537Pension and other long-term liabilities 58,985 53,835Commitments and contingenciesShareholders' equity 1,599,901 1,579,029 ------------ ------------ $ 2,177,505 $ 2,151,240 ============ ============ FLIR SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, ------------------------ ------------------------ 2012 2011 2012 2011 ----------- ----------- ----------- -----------Cash flows from operating activities: Net earnings $ 77,261 $ 76,130 $ 222,398 $ 221,474 Income items not affecting cash: Depreciation and amortization 14,857 16,290 59,715 77,498 Deferred income taxes (11,539) (10,291) (10,940) (12,195) Stock-based compensation arrangements 6,252 5,604 26,250 24,917 Other non-cash items 4,522 9,647 (1,810) 12,654 Changes in operating assets and liabilities, net of acquisitions 21,521 18,816 (10,068) (80,457) ----------- ----------- ----------- -----------Cash provided by operating activities 112,874 116,196 285,545 243,891 ----------- ----------- ----------- -----------Cash flows from investing activities: Additions to property and equipment, net (18,901) (10,850) (58,089) (41,946) Business acquisitions, net of cash acquired (105,909) - (105,909) (27,182) Other investments (2) 1,991 (3,002) 1,991 ----------- ----------- ----------- -----------Cash used by investing activities (124,812) (8,859) (167,000) (67,137) ----------- ----------- ----------- -----------Cash flows from financing activities: Proceeds from long term debt, net - - - 247,708 Repurchase of common stock (85,185) (36,286) (214,195) (160,669) Dividends paid (10,428) (9,350) (42,450) (38,037) Proceeds from shares issued pursuant to stock- based compensation plans 4,080 6,620 11,198 21,706 Excess tax benefit of stock options exercised 53 727 1,284 5,195 Other financing activities (28) (140) (166) (458) ----------- ----------- ----------- -----------Cash (used) provided by financing activities (91,508) (38,429) (244,329) 75,445 ----------- ----------- ----------- -----------Effect of exchange rate changes on cash 696 (2,561) 6,677 (4,490) ----------- ----------- ----------- -----------Net (decrease) increase in cash and cash equivalents (102,750) 66,347 (119,107) 247,709Cash and cash equivalents, beginning of period 424,489 374,499 440,846 193,137 ----------- ----------- ----------- -----------Cash and cash equivalents, end of period $ 321,739 $ 440,846 $ 321,739 $ 440,846 =========== =========== =========== ===========





Company Contact:
Shane Harrison
+1 503.498.3547
www.flir.com



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