February 8, 2006

FLIR Systems Reports Record Fourth Quarter and Full Year 2005 Financial Results

Provides 2006 Financial Outlook Announces Additional 5 Million Share Repurchase Authorization

PORTLAND, OR, Feb 08, 2006 (MARKET WIRE via COMTEX News Network) -- FLIR Systems, Inc. (NASDAQ: FLIR) announced today that net earnings for the fourth quarter ended December 31, 2005 increased 42% to $34.1 million, or $0.43 per diluted share, compared to net earnings for the fourth quarter of 2004 of $24.1 million, or $0.31 per diluted share. Revenue for the 2005 fourth quarter increased 9% to $156.2 million, up from $143.7 million for the fourth quarter of 2004. The Company's operating margin in the fourth quarter was 29.5%, compared with 23.9% in the fourth quarter of 2004. Revenue at the Company's Imaging division increased 8%, while revenue at the Company's Thermography division increased 10% as compared to the fourth quarter last year.

For the twelve months ended December 31, 2005, net earnings rose 27% to a record $90.8 million, or $1.16 per diluted share, compared to net earnings for the full year 2004 of $71.5 million, or $0.94 per diluted share. Revenue for 2005 was $508.6 million, an increase of 5% from the $482.7 million generated in 2004. The Company's operating margin for the full year was a record 24.8%, as compared with 22.6% in 2004. Revenue from the Company's Imaging division increased by 2%, while revenue from the Company's Thermography division increased by 13% compared to the prior year.

Cash generated from operations totaled $15.9 million for the fourth quarter and $73.1 million for 2005. At December 31, 2005 the Company had cash on hand of $107 million. During the fourth quarter, the Company repurchased 1 million shares of its common stock for $23 million.

The backlog of firm orders for delivery within the next twelve months was approximately $193 million at December 31, 2005 an increase of 21% as compared to backlog of $159 million at December 31, 2004.

The Company also announced it currently expects net revenue in fiscal 2006 to be in the range of $590 million to $600 million, and net earnings to be in the range of $1.20 to $1.30 per fully diluted share, which includes share based compensation expense of approximately $0.10 per fully diluted share.

FLIR also announced that its Board of Directors has authorized the repurchase of up to an additional 5 million shares of its common stock. The timing and the amount of any repurchases will be determined by the Company's management based on its evaluation of prevailing market conditions and other factors. The repurchase program may be suspended or discontinued at any time whether or not the authorization has been utilized.

"Overall, we are pleased with our fourth quarter and full year 2005 performance. While revenue growth in our Imaging division was lower than anticipated, we again achieved record revenue and net earnings. We saw a significant expansion in our operating margins, reflecting the benefits of the Indigo acquisition and improved manufacturing efficiency," commented Earl R. Lewis, President and CEO of FLIR. "We expect better revenue growth in both divisions in 2006, as a result of recent investment in R & D, which has yielded numerous exciting new products, and remain optimistic about the future," he concluded.

Forward-Looking Statements

The statements in this release by Earl R. Lewis regarding the Company's expectation of better revenue growth in both divisions and commentary about the Company's outlook for 2006 as to revenue and net earnings per share are forward-looking statements within the meaning of the 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 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. 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.

Conference Call

FLIR has scheduled a conference call at 11:00 am EST today. A simultaneous WebCast will be available from the Investor Relations link at www.FLIR.com. A replay will be available after 1:00 PM EST at this same internet address. For a telephone replay, dial (800) 633-8284, reservation #21281132 after 1:00 PM EST.

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     Twelve Months Ended
                                   December 31,            December 31,
                               --------------------    --------------------
                                 2005        2004        2005        2004
                               --------    --------    --------    --------
Revenue                        $156,247    $143,726    $508,561    $482,651
Cost of goods sold               69,586      67,991     231,867     233,492
                               --------    --------    --------    --------
    Gross profit                 86,661      75,735     276,694     249,159
Operating expenses:
  Research and development       12,512      13,090      51,514      45,796
  Selling, general and
   administrative                27,998      28,254      99,227      94,237
                               --------    --------    --------    --------
    Total operating expenses     40,510      41,344     150,741     140,033
    Earnings from operations     46,151      34,391     125,953     109,126
Interest expense                  2,001       2,031       7,922       8,092
Other (income) expenses, net     (1,556)         88      (4,193)      1,125
                               --------    --------    --------    --------
  Earnings before income taxes   45,706      32,272     122,224      99,909
Income tax provision             11,564       8,210      31,459      28,414
                               --------    --------    --------    --------
  Net earnings                 $ 34,142    $ 24,062    $ 90,765    $ 71,495
                               ========    ========    ========    ========
Net earnings per share:
  Basic                        $   0.49    $   0.35    $   1.30    $   1.06
                               --------    --------    --------    --------
  Diluted                      $   0.43    $   0.31    $   1.16    $   0.94
                               ========    ========    ========    ========
Weighted average shares
 outstanding:
  Basic                          69,468      68,709      69,723      67,566
                               --------    --------    --------    --------
  Diluted                        81,222      81,972      82,173      81,108
                               ========    ========    ========    ========
                            FLIR SYSTEMS, INC.
                       CONSOLIDATED BALANCE SHEETS
                        (In thousands)(Unaudited)
                                            December 31,    December 31,
                                                2005            2004
                                             ---------       ---------
                  ASSETS
Current assets:
  Cash and cash equivalents                  $ 107,057       $ 120,692
  Accounts receivable, net                     142,782         116,928
  Inventories, net                             103,837          98,258
  Prepaid expenses and other
   current assets                               33,153          21,769
  Deferred income taxes, net                    11,240           9,771
                                              --------        --------
    Total current assets                       398,069         367,418
Property and equipment, net                     59,479          34,778
Deferred income taxes, net                      16,313          20,055
Goodwill                                       150,669         149,475
Intangible assets, net                          43,139          47,180
Other assets                                    27,139           8,691
                                             ---------       ---------
                                             $ 694,808       $ 627,597
                                             =========       =========
    LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable                           $  34,477       $  32,321
  Deferred revenue                              10,297           7,601
  Accrued payroll and related liabilities       20,374          22,375
  Accrued product warranties                     5,059           5,465
  Advance payments from customers                5,013           5,009
  Other current liabilities                     11,626          10,585
  Accrued income taxes                           3,577           5,626
  Current portion of long-term debt                 56             105
                                             ---------       ---------
    Total current liabilities                   90,479          89,087
Long-term debt                                 206,155         205,335
Deferred income taxes                           10,779           7,482
Pension and other long-term liabilities         18,413          12,520
Commitments and contingencies
Shareholders' equity                           368,982         313,173
                                             ---------       ---------
                                             $ 694,808       $ 627,597
                                             =========       =========

Contacts:


Tony Trunzo
Steve Bailey
FLIR Systems, Inc.
(503) 498-3547
www.FLIR.com

SOURCE:
FLIR Systems, Inc.

http://www.FLIR.com


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