February 2, 2005

FLIR Systems Reports Fourth Quarter And Full Year 2004 Financial Results; Full Year Net Earnings Rise 60% on 55% Increase in Revenue; Results Reflect Two-For-One Stock Split

PORTLAND, Ore.--(BUSINESS WIRE)--Feb. 2, 2005--


Company Reiterates Fiscal 2005 Financial Outlook

FLIR Systems, Inc. (NASDAQ:FLIR) announced today that net earnings for the fourth quarter ended December 31, 2004 increased 61% to $24.1 million, or $0.31 per diluted share, after giving effect to the two-for-one stock split effective as of February 2, 2005. This compares to net earnings for the fourth quarter of 2003 of $15.0 million, or $0.21 per diluted share when adjusted for the two-for-one stock split, and the effect of the assumed conversion of the Company's convertible notes. Revenue for the 2004 fourth quarter increased 48% to $143.7 million, up from $97.4 million for the fourth quarter of 2003. Revenue at the Company's Imaging division increased 55%, while revenue at the Company's Thermography division increased 36% as compared to the fourth quarter last year.

For the twelve months ended December 31, 2004, net earnings rose 60% to a record $71.5 million, or $0.94 per diluted share, compared to net earnings for the full year 2003 of $44.7 million, or $0.62 per diluted share, both when adjusted for the two-for-one stock split, and the effect of the assumed conversion of the Company's convertible notes. Revenue for 2004 was $482.7 million, an increase of 55% from the $312 million generated in 2003. Revenue from the Company's Imaging division increased by 65%, while revenue from the Company's Thermography division increased by 37% compared to the prior year.

Cash generated from operations totaled $14.5 million for the fourth quarter and $75.1 million for 2004. At 12/31/2004 the Company had cash on hand of $120.7 million.

The backlog of firm orders for delivery within the next twelve months was approximately $159 million at December 31, 2004 as compared to $146 million at December 31, 2003.



"2004 was another excellent year for FLIR. We achieved record revenue and net earnings as both of our divisions grew strongly. We also made progress toward many of our longer term objectives, including the integration of Indigo Systems, which was acquired last January, and the expansion of our global Thermography distribution network," commented Earl R. Lewis, President and CEO of FLIR. "Looking to 2005, we expect growth to moderate somewhat from the very rapid pace of 2004, but remain strong. We are thus reiterating our outlook for 2005 revenue and earnings per share. Our current expectation is for full year revenue in the range of $545 to $560 million, and net earnings in the range of $1.12 to $1.18 per fully diluted share, after giving effect to the two-for-one stock split effective today. We are very proud of FLIR's accomplishments in 2004 and are excited about the prospects for 2005 and beyond," he concluded.

Forward-Looking Statements

The statements in this release by Earl R. Lewis regarding the Company's expectation of moderating but continued strong growth and its outlook for 2005 as to revenue and net earnings per share 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. 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 #21230155, 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)


                              Three Months Ended  Twelve Months Ended
                                 December 31,        December 31,
                              ------------------ ---------------------
                                 2004     2003        2004      2003
                              --------- -------- ----------- ---------
                                 (unaudited)     (unaudited)

Revenue                       $143,726  $97,414    $482,651  $311,979

Cost of goods sold              67,991   46,044     233,492   146,454
                              --------- -------- ----------- ---------
Gross profit                    75,735   51,370     249,159   165,525

Operating expenses:
Research and development        13,090    9,027      45,796    30,665
Selling, general and
 administrative                 28,254   19,515      94,237    65,034
                              --------- -------- ----------- ---------
Total operating expenses        41,344   28,542     140,033    95,699

Earnings from operations        34,391   22,828     109,126    69,826

Interest expense                 2,031    1,999       8,092     4,861
Other expenses, net                 88      702       1,125     1,117
                              --------- -------- ----------- ---------

Earnings before income taxes    32,272   20,127      99,909    63,848

Income tax provision             8,210    5,164      28,414    19,155
                              --------- -------- ----------- ---------

Net earnings                   $24,062  $14,963     $71,495   $44,693

                              ========= ======== =========== =========

Net earnings per share:
  Basic                          $0.35    $0.23       $1.06     $0.66

                              --------- -------- ----------- ---------
  Diluted                        $0.31    $0.21       $0.94     $0.62

                              ========= ======== =========== =========

Weighted average shares
 outstanding:
  Basic                         68,709   65,670      67,566    67,462
                              --------- -------- ----------- ---------
  Diluted                       81,972   78,092      81,108    75,552
                              --------- -------- ----------- ---------

All 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, except par value)


                                                  December   December
                                                  31, 2004   31, 2003
                                                 ----------- ---------
                     ASSETS                      (unaudited)
                     ------

Current assets:
   Cash and cash equivalents                       $120,692  $197,993
   Accounts receivable, net                         116,258    79,332
   Inventories, net                                  98,258    75,959
   Prepaid expenses and other current assets         21,769    19,997
   Deferred income taxes, net                         9,771     8,832
                                                 ----------- ---------
        Total current assets                        366,748   382,113

Property and equipment, net                          34,778    22,758
Deferred income taxes, net                           12,573    21,146
Goodwill                                            149,475    12,500
Intangible assets, net                               47,180     4,036
Other assets                                          8,691     7,870
                                                 ----------- ---------
                                                   $619,445  $450,423
                                                 =========== =========


      LIABILITIES AND SHAREHOLDERS' EQUITY
      ------------------------------------

Current liabilities:
   Accounts payable                                 $32,321   $26,427
   Deferred revenue                                   7,188     4,540
   Accrued payroll and related liabilities           22,375    12,778
   Accrued product warranties                         5,465     3,511
   Advance payments from customers                    5,009    12,112
   Other current liabilities                         10,585     8,227
   Accrued income taxes                               5,626     2,742
   Current portion of long-term debt                    105        --
                                                 ----------- ---------
        Total current liabilities                    88,674    70,337

Long-term debt                                      205,335   204,369
Pension and other long-term liabilities              12,263    10,875

Commitments and contingencies

Shareholders' equity                                313,173   164,842
                                                 =========== =========
                                                   $619,445  $450,423
                                                 =========== =========



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


or
Neil Berkman Associates (Investor Contact)
310-277-5162
info@BerkmanAssociates.com



SOURCE: FLIR Systems, Inc.


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