PORTLAND, OR, Apr 26, 2006 (MARKET WIRE via COMTEX News Network) -- FLIR Systems, Inc. (NASDAQ: FLIR) announced today that revenue for the quarter ended March 31, 2006 increased by 8% to $117.3 million, compared with revenue of $108.3 million in the first quarter of 2005. Earnings from operations declined 11% due to the impact of expensing stock based compensation, higher selling and marketing costs related to certain new product introductions, and higher research and development expenses related to accelerated efforts on certain program developments. Net earnings per fully diluted share declined by 11% to $0.17, compared with $0.19 in the first quarter of 2005 due to the above factors and a higher than anticipated tax rate.
Revenue from the Company's Thermography Division increased 10% over the first quarter last year, primarily due to strong demand for InfraCAM®, the Company's new low price thermal imaging camera.
Revenue from the Company's Imaging Division increased by 7% as strong sales of large airborne systems and good demand from OEM customers offset delays on certain program shipments. The backlog of funded orders for delivery within the next twelve months was $201 million at March 31, 2006, compared to $193 million at December 31, 2005.
Cash generated from operations totaled a record $34 million for the first quarter of 2006, due to strong collections following high fourth quarter 2005 revenue. At March 31, 2006, the Company had cash and cash equivalents of $127 million.
Imaging Division Reorganization
The Company also announced today it has reorganized its Imaging Division into two new units, Commercial Vision Systems, and Government Systems.
The new Commercial Vision Systems Division will focus on emerging commercial markets for infrared imaging technology such as commercial security, OEMs, automotive, marine, airborne and first responder markets. Andrew C. Teich, currently co-President of the Company's Imaging Division, has been appointed President of the Commercial Vision Systems Division.
The Government Systems Division will be responsible for government
end users in such applications as surveillance, force protection,
border patrol, drug interdiction, search and rescue, special
operations and target designation. William A. Sundermeier, currently
co-President of the Company's Imaging Division, has been appointed
President of the Government Systems Division.
Revenue and Earnings Guidance for 2006
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.
Based on its financial results for the first quarter of 2006, and the outlook for the remainder of the year, management today is reiterating its outlook for revenue and earnings per share for the full year 2006. Management currently expects revenue for 2006 to be approximately $590 million to $600 million and net earnings in the range of approximately $1.20 to $1.30 per fully diluted share.
"We met our internal EPS budget in the first quarter, with the exception of delayed shipments out of Boston. However, given our strong backlog and the market response to our new products, we remain comfortable with our outlook for the year," commented Earl R. Lewis, Chairman, President and CEO of FLIR Systems. "Further, we are very excited about today's reorganization announcement and the opportunities to further grow our Imaging businesses. The Commercial and Government Imaging markets have developed distinctly different characteristics, largely as a result of our success in reducing the cost of Infrared technology. By separating these two businesses we will be able to focus on different market and product development strategies for each division," he concluded.
The statements in the revenue and earnings guidance section above, including the comments by Earl R. Lewis 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 ability of the Company to manufacture and deliver its products within the time period specified in the contracts it receives, 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. Further, such statements are subject to the risks inherent in acquisitions of technologies and businesses, including the timing and successful completion of technology and product development through volume production, integration issues, unanticipated costs and expenditures, changing relationships with customers, suppliers and strategic partners, potential contractual, intellectual property or employment issues, accounting treatment and charges, and the risks that the acquisition cannot be completed successfully or that anticipated benefits are not realized. 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.
FLIR has scheduled a conference call at 11:00 am EDT today. A simultaneous Web Cast of the conference call may be accessed online at www.CompanyBoardroom.com or www.FLIR.com. A replay will be available approximately one hour after the Web Cast at these same Internet addresses. For a telephone replay, dial (800) 633-8284, reservation #21288517 beginning at approximately 1:00 pm EDT.
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 at www.FLIR.com.
FLIR SYSTEMS, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts)(Unaudited) Three Months Ended March 31, --------------------- 2006 2005 ---------- ---------- Revenue $ 117,339 $ 108,317 Cost of goods sold 56,491 49,731 ---------- ---------- Gross profit 60,848 58,586 Operating expenses: Research and development 15,229 13,255 Selling, general and administrative 26,753 24,196 ---------- ---------- Total operating expenses 41,982 37,451 Earnings from operations 18,866 21,135 Interest expense 1,924 1,995 Other (income) expenses, net -701 -734 ---------- ---------- Earnings before income taxes 17,643 19,874 Income tax provision 4,984 5,167 ---------- ---------- Net earnings $ 12,659 $ 14,707 ========== ========== Net earnings per share: Basic $ 0.18 $ 0.21 ========== ========== Diluted $ 0.17 $ 0.19 ========== ========== Weighted average shares outstanding: Basic 69,163 69,554 ========== ========== Diluted 81,311 82,556 ========== ========== FLIR SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS (In thousands)(Unaudited) Mar. 31, Dec. 31, 2006 2005 ---------- ---------- ASSETS Current assets: Cash and cash equivalents $ 127,302 $ 107,057 Accounts receivable, net 119,083 142,782 Inventories, net 111,256 103,837 Prepaid expenses and other current assets 36,072 33,153 Deferred income taxes, net 18,724 18,709 ---------- ---------- Total current assets 412,437 405,538 Property and equipment, net 68,174 59,479 Deferred income taxes, net 8,032 8,415 Goodwill 158,326 158,065 Intangible assets, net 45,749 46,901 Other assets 15,909 15,981 ---------- ---------- $ 708,627 $ 694,379 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 37,204 $ 34,477 Deferred revenue 9,615 10,297 Accrued payroll and related liabilities 18,094 20,374 Accrued product warranties 4,603 5,059 Advance payments from customers 7,695 5,013 Other current liabilities 10,237 11,626 Accrued income taxes 2,394 3,148 Current portion of long-term debt 32 56 ---------- ---------- Total current liabilities 89,874 90,050 Long-term debt 206,372 206,155 Deferred tax liabilities 10,713 10,779 Pension and other long-term liabilities 18,659 18,413 Commitments and contingencies Shareholders' equity 383,009 368,982 ---------- ---------- $ 708,627 $ 694,379 ========== ==========
FLIR Systems, Inc.
SOURCE: FLIR Systems, Inc.