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Oct 23, 2008
FLIR Systems Announces Third Quarter 2008 Financial Results

PORTLAND, OR, Oct 23, 2008 (MARKET WIRE via COMTEX News Network) -- FLIR Systems, Inc. (NASDAQ: FLIR) today announced financial results for the third quarter ended September 30, 2008. Revenue was $276.7 million, up 45% compared to third quarter 2007 revenue of $191.1 million. Operating income for the quarter was $76.7 million, up 48% from $51.8 million in the third quarter of 2007. Net income for the quarter was $55.6 million, or $0.35 per diluted share, compared with net income of $34.8 million, or $0.22 per diluted share on a split-adjusted basis, in the third quarter a year ago. Cash provided by operations during the quarter was $66.4 million.

Revenue from the Company's Government Systems division increased 57% over the third quarter of 2007, to a record $151.7 million, driven by strength in land-based and maritime applications. Revenue from the Company's Commercial Vision Systems division increased 34% over the third quarter of last year, to $45.8 million, reflecting strong growth in each served market. Revenue from the Company's Thermography division increased 32% over the third quarter of last year, to $79.2 million. Excluding the impact of the Extech Instruments and Cedip Infrared Systems acquisitions, Thermography revenue increased 7% during the third quarter, due to increased demand for the T-Series and i5 product lines, and reduced demand for high end products, including GasFindIR(R).

The backlog of firm orders for delivery within the next twelve months was approximately $650 million at September 30, 2008, an increase of $78 million compared with backlog at June 30, 2008. Backlog in the Government System's division was $547 million, up $83 million during the quarter due to strong order activity both in the U.S. and internationally. Backlog in the Commercial Vision System's division was $81 million, down $5 million during the quarter. Backlog in the Thermography division was $22 million, unchanged from the prior quarter.

During the quarter, the Company repurchased 681,000 shares of its common stock for $22.9 million, and expended $5.0 million for the purchase of property, plant, and equipment. At September 30, 2008, cash and cash equivalents were $206.1 million, compared with $177.0 million at June 30, 2008.

"The third quarter was another outstanding quarter for the Company, as we set quarterly records for orders, backlog, revenue, operating profit, operating cash flow, and earnings per share," noted Earl R. Lewis, President and CEO. "Demand was excellent, particularly in our Government Systems division, as we continue to expand our base of long term contracts. Based on the quarter's results, and the expectations for the remainder of the year, we are narrowing the range of our outlook for the year."

Revenue and Earnings Per Share Outlook for 2008

Based on the financial results for the quarter, and the outlook for the remainder of the year, the Company is revising the range of its revenue and earnings per share outlook for 2008 to the upper end of the previous range. The Company currently expects net revenue in fiscal 2008 to be in the range of $1.075 billion to $1.1 billion, and net earnings to be in the range of $1.21 to $1.25 per diluted share. This guidance utilizes a planned tax rate for the year of approximately 30%, and an average share count of approximately 163 million diluted shares.

Conference Call

FLIR has scheduled a conference call at 11:00 am EDT today. A simultaneous webcast will be available from the Investor Relations link at A replay will be available after 2:30 PM EDT at this same internet address. For a telephone replay, dial (800) 642-1687, Conference ID #66411502 after 2:30 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

Forward-Looking Statements

The statements in this release by Earl R. Lewis and the statements in the section captioned "Revenue and Earnings Per Share Outlook for 2008" 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: the possibility that the Company will experience difficulties in the integration of the operations, employees, strategies, technologies and products of Extech or Cedip, the potential inability to realize expected benefits and synergies from the Extech or Cedip transactions, 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 US export control laws and regulations, the timely receipt of export licenses for international shipments, 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.
            (In thousands, except per share amounts)(Unaudited)
                                 Three Months Ended     Nine Months Ended
                                    September 30,         September 30,
                                --------------------  --------------------
                                  2008       2007       2008       2007
                                ---------  ---------  ---------  ---------
Revenue                         $ 276,740  $ 191,104  $ 774,624  $ 536,763
Cost of goods sold                121,478     84,081    341,969    240,772
                                ---------  ---------  ---------  ---------
   Gross profit                   155,262    107,023    432,655    295,991
Operating expenses:
  Research and development         21,639     15,692     68,296     51,623
  Selling, general and
   administrative                  56,973     39,508    167,946    115,400
                                ---------  ---------  ---------  ---------
    Total operating expenses       78,612     55,200    236,242    167,023
    Earnings from operations       76,650     51,823    196,413    128,968
Interest expense                    2,110      2,245      6,880      7,549
Other income, net                  (4,956)      (957)    (8,627)    (4,535)
                                ---------  ---------  ---------  ---------
    Earnings before income
     taxes                         79,496     50,535    198,160    125,954
Income tax provision               23,863     15,770     59,750     35,840
                                ---------  ---------  ---------  ---------
    Net earnings                $  55,633  $  34,765  $ 138,410  $  90,114
                                =========  =========  =========  =========
Net earnings per share:
  Basic                         $    0.40  $    0.26  $    1.00  $    0.67
                                =========  =========  =========  =========
  Diluted                       $    0.35  $    0.22  $    0.87  $    0.59
                                =========  =========  =========  =========
Weighted average shares
  Basic                           139,211    135,130    138,090    133,577
                                =========  =========  =========  =========
  Diluted                         163,124    159,535    162,393    157,892
                                =========  =========  =========  =========
                             FLIR SYSTEMS, INC.
                        CONSOLIDATED BALANCE SHEETS
                        (In thousands)(Unaudited)
                                                 September 30, December 31,
                                                    2008          2007
                                                 ------------  ------------
Current assets:
  Cash and cash equivalents                      $    206,103  $    203,681
  Accounts receivable, net                            241,652       203,371
  Inventories, net                                    215,118       179,366
  Prepaid expenses and other current assets            75,116        58,056
  Deferred income taxes, net                           10,961        11,033
                                                 ------------  ------------
    Total current assets                              748,950       655,507
Property and equipment, net                           124,929       120,873
Deferred income taxes, net                              3,532         2,237
Goodwill                                              224,668       176,230
Intangible assets, net                                 61,081        52,819
Other assets                                           24,715        16,650
                                                 ------------  ------------
                                                 $  1,187,875  $  1,024,316
                                                 ============  ============
Current liabilities:
  Notes payable                                  $      1,110  $     19,000
  Accounts payable                                     63,286        53,990
  Deferred revenue                                     31,471        19,612
  Accrued payroll and related liabilities              39,069        39,431
  Accrued product warranties                            7,964         6,594
  Advance payments from customers                      16,012         9,156
  Other current liabilities                            22,505        14,600
  Accrued income taxes                                     --         3,752
  Current portion of long-term debt                        21             7
                                                 ------------  ------------
    Total current liabilities                         181,438       166,142
Long-term debt                                        208,572       207,889
Deferred income taxes                                   1,649         1,902
Accrued income taxes                                    5,114         4,295
Pension and other long-term liabilities                23,306        20,813
Commitments and contingencies
Shareholders' equity                                  767,796       623,275
                                                 ------------  ------------
                                                 $  1,187,875  $  1,024,316
                                                 ============  ============

Company Contact:
Tony Trunzo
+1 503.498.3547

SOURCE: FLIR Systems, Inc.

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