FLIR Systems, Inc.
Apr 20, 2005

FLIR Systems Announces First Quarter 2005 Financial Results; Reaffirms 2005 Guidance; Net Earnings Increase 16%

PORTLAND, Ore., Apr 20, 2005 (BUSINESS WIRE) -- FLIR Systems, Inc. (NASDAQ:FLIR) announced today that net earnings in its first fiscal quarter ended March 31, 2005 increased by 16% to $14.7 million, from $12.7 million in the first quarter of 2004. Revenue for the quarter was $108.3 million, approximately unchanged from $108.9 million in the first quarter of 2004. Earnings from operations declined 3% to $21.1 million from $21.9 million for the first quarter of 2004. Net earnings per fully diluted share were $0.19, compared with $0.17 in the first quarter of 2004. All per share amounts have been adjusted to reflect the 2-for-1 stock split that was effective on February 2, 2005.

Revenue from the Company's Thermography Division increased 18% over the first quarter last year, primarily due to continued strong international sales, and strong demand for the company's E-Series camera line.

Revenue from the Company's Imaging Division declined by 9% due to slower order activity from the US Government and delays in the receipt of export licenses to certain international customers.

The backlog of orders grew by 4% to approximately $165 million at March 31, 2005, as compared to $159 million at December 31, 2004.

Cash generated from operations totaled $12 million for the first quarter of 2005. At March 31, 2005, the Company had cash and cash equivalents of approximately $126 million.

"Our financial performance in the first quarter was slightly below our internal expectations, largely as a result of slow order placement activity by the US Government and delays in receiving certain export licenses. However we expect improved order activity as the year progresses, and thus remain comfortable with our outlook for the full year," said FLIR President and CEO Earl R. Lewis. "Our current expectation for the full year 2005 is for earnings per share in the range of $1.12 to $1.18, and revenue in the range of $545 million to $560 million."

Forward-Looking Statements

The statements in this release by Earl R. Lewis regarding the expectation of achieving the Company's revenue and earnings per share objectives for 2005 and improving order activity are forward-looking statements. 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. 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.



Conference Call

FLIR has scheduled a conference call at 11:00 a.m. EDT today. A simultaneous Web Cast of the conference call may be accessed online at www.earnings.com or from the Calendar of Events link at investor relations page of www.FLIR.com. A replay will be available after 1:00 p.m. EDT at these same Internet addresses. For a telephone replay, dial (800) 633-8284, reservation #21243541 after 1:00 p.m. 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 OPERATIONS
         (In thousands, except per share amounts)(Unaudited)

                                                   Three Months Ended
                                                        March 31,
                                                     2005      2004

Revenue                                            $108,317  $108,861
Cost of goods sold                                   49,731    55,441
       Gross profit                                  58,586    53,420

Operating expenses:
   Research and development                          13,255    10,598
   Selling, general and administrative               24,196    20,960
       Total operating expenses                      37,451    31,558

       Earnings from operations                      21,135    21,862

Interest expense                                      1,995     2,101
Other (income) expenses, net                           (734)      832

       Earnings before income taxes                  19,874    18,929

Income tax provision                                  5,167     6,246

       Net earnings                                 $14,707   $12,683

Net earnings per share:
   Basic                                              $0.21     $0.19
   Diluted                                            $0.19     $0.17

Weighted average shares outstanding:
   Basic                                             69,554    66,425
   Diluted                                           82,556    79,683

2004 per share amounts have been adjusted to reflect the
two-for-one stock split and the effect of the restatement for the
assumed conversion of the convertible notes.


                          FLIR SYSTEMS, INC.

                     CONSOLIDATED BALANCE SHEETS
                            (In thousands)

                                               Mar. 31,     Dec. 31,
                                                 2005        2004
ASSETS                                        (Unaudited)

Current assets:
   Cash and cash equivalents                    $125,613     $120,692
   Accounts receivable, net                      106,997      116,928
   Inventories, net                              108,279       98,258
   Prepaid expenses and other current assets      21,310       21,769
   Deferred income taxes, net                      9,771        9,771
        Total current assets                     371,970      367,418

Property and equipment, net                       45,181       34,778
Deferred income taxes, net                        17,565       12,573
Goodwill                                         149,475      149,475
Intangible assets, net                            45,569       47,180
Other assets                                      14,507        8,691

                                                $644,267     $620,115


LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Accounts payable                              $32,268      $32,321
   Deferred revenue                               11,760        7,601
   Accrued payroll and related liabilities        16,288       22,375
   Accrued product warranties                      5,345        5,465
   Advance payments from customers                 5,860        5,009
   Other current liabilities                      10,728       10,585
   Accrued income taxes                            2,770        5,626
   Current portion of long-term debt                 105          105
        Total current liabilities                 85,124       89,087

Long-term debt                                   205,528      205,335
Pension and other long-term liabilities           16,503       12,520

Commitments and contingencies

Shareholders' equity                             337,112      313,173

                                                $644,267     $620,115

SOURCE: FLIR Systems, Inc.

FLIR Systems, Inc.
Anthony Trunzo, 503-684-3731
www.flir.com


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Investor Contact:
Neil Berkman Associates, 310-277-5162
info@BerkmanAssociates.com