FLIR Systems, Inc.
Feb 5, 2009

FLIR Systems Reports Record Fourth Quarter and Full Year 2008 Financial Results

PORTLAND, OR, Feb 05, 2009 (MARKET WIRE via COMTEX News Network) -- FLIR Systems, Inc. (NASDAQ: FLIR) today announced financial results for the fourth quarter ended December 31, 2008. Revenue was $302.3 million, up 25% compared to fourth quarter 2007 revenue of $242.6 million. Operating income for the quarter was $88.1 million, up 40% from $62.9 million in the fourth quarter of 2007. Net income for the quarter was $65.3 million, or $0.41 per diluted share, compared with net income of $46.6 million, or $0.30 per diluted share, in the fourth quarter a year ago. Cash provided by operations during the quarter was $90.1 million.

Revenue from the Company's Government Systems division increased 50% over the fourth quarter of 2007, to a record $172.0 million, driven by strength in airborne and land-based applications. Revenue from the Company's Commercial Vision Systems division increased 12% over the fourth quarter of last year, to $42.4 million, reflecting strong growth in the security and surveillance market. Revenue from the Company's Thermography division decreased 3% from the fourth quarter of last year, to $87.9 million. Excluding the effect of exchange rates, total Thermography revenue increased by approximately 3% in the quarter. The Extech Instruments and Cedip Infrared Systems acquisitions contributed approximately $13.2 million in Thermography revenue in the fourth quarter of 2008, compared with $5.4 million in the fourth quarter of 2007. Thermography unit volumes, excluding Extech and Cedip products, increased by 33% in the fourth quarter of 2008 compared to the fourth quarter of 2007.

Revenue for the year ended December 31, 2008 was $1,077.0 million, up 38% compared to $779.4 million for the year ended December 31, 2007. Operating income for 2008 was $284.5 million, up 48% from $191.8 million during 2007. Net income for 2008 was $203.7 million, or $1.28 per diluted share, compared with 2007 net income of $136.7 million, or $0.89 per diluted share. Cash provided by operations during the year was $218.3 million.

The backlog of firm orders for delivery within the next twelve months was approximately $663 million at December 31, 2008, an increase of $13 million during the quarter, and an increase of $270 million, or 69% compared with backlog at December 31, 2007. Backlog in the Government Systems division was $552 million, up $5 million during the quarter, as demand remained strong across multiple product lines. Backlog in the Commercial Vision Systems division was $91 million, up $10 million during the quarter due primarily to strong demand for its security and surveillance product lines. Backlog in the Thermography division was $19 million, down $3 million during the quarter.

"We are very pleased with our financial performance in 2008, as we recorded our eighth straight year of record revenue, operating income and earnings per share, and achieved the highest operating income margin and cash flow from operations in the Company's history," noted Earl Lewis, President and CEO. "We are well positioned for continued growth, and each of our divisions remains focused on their core strategies. Our 2009 outlook anticipates continued growth in all three divisions, particularly our Government Systems and Commercial Vision Systems businesses, which are supported by strong backlogs. We have taken a more cautious outlook for Thermography due to expected weak economic conditions through 2009."

Revenue and Earnings Outlook for 2009

FLIR also announced today that it expects net revenue in fiscal 2009 to be in the range of $1.2 billion to $1.25 billion, an increase of approximately 14% compared with 2008, and net earnings to be in the range of $1.40 to $1.47 per diluted share, an increase of approximately 12% compared with 2008. This guidance assumes slower revenue growth in the Thermography division than originally expected as a result of continued economic weakness, and assumes a tax rate for the year of 32% to 34%, and an average diluted share count of approximately 164 million shares.

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 3:00 PM EST at this same internet address. For a telephone replay, dial (800) 642-1687, Conference ID #80367906 after 3:00 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 website at www.FLIR.com.

Forward-Looking Statements

The statements in this release by Earl R. Lewis and the statements in the section captioned "Revenue and Earnings Outlook for 2009" 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: 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 any required export licenses, 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.
                    CONSOLIDATED STATEMENTS OF INCOME
            (In thousands, except per share amounts)(Unaudited)
                           Three Months Ended       Twelve Months Ended
                              December 31,              December 31,
                        ------------------------  ------------------------
                            2008         2007         2008         2007
                        -----------  -----------  -----------  -----------
Revenue                 $   302,349  $   242,634  $ 1,076,974  $   779,397
Cost of goods sold          128,862      105,395      470,832      346,167
                        -----------  -----------  -----------  -----------
   Gross profit             173,487      137,239      606,142      433,230
Operating expenses:
  Research and
   development               21,668       20,835       89,964       72,458
  Selling, general and
   administrative            63,740       53,540      231,687      168,940
                        -----------  -----------  -----------  -----------
    Total operating
     expenses                85,408       74,375      321,651      241,398
    Earnings from
     operations              88,079       62,864      284,491      191,832
Interest expense              2,107        2,681        8,987       10,230
Other income, net           (10,756)      (5,016)     (19,383)      (9,551)
                        -----------  -----------  -----------  -----------
    Earnings before
     income taxes            96,728       65,199      294,887      191,153
Income tax provision         31,404       18,602       91,154       54,442
                        -----------  -----------  -----------  -----------
    Net earnings        $    65,324  $    46,597  $   203,733  $   136,711
                        ===========  ===========  ===========  ===========
Net earnings per share:
  Basic                 $      0.47  $      0.34  $      1.47  $      1.02
                        ===========  ===========  ===========  ===========
  Diluted               $      0.41  $      0.30  $      1.28  $      0.89
                        ===========  ===========  ===========  ===========
Weighted average shares
 outstanding:
  Basic                     139,679      136,224      138,490      134,244
                        ===========  ===========  ===========  ===========
  Diluted                   162,728      161,426      162,901      159,241
                        ===========  ===========  ===========  ===========
                            FLIR SYSTEMS, INC.
                        CONSOLIDATED BALANCE SHEETS
                        (In thousands)(Unaudited)
                                                December 31,  December 31,
                                                    2008          2007
                                                ------------- -------------
                  ASSETS
Current assets:
  Cash and cash equivalents                     $     289,442 $     203,681
  Accounts receivable, net                            239,183       203,371
  Inventories                                         207,487       179,366
  Prepaid expenses and other current assets            59,824        58,056
  Deferred income taxes, net                           16,566        11,033
                                                ------------- -------------
    Total current assets                              812,502       655,507
Property and equipment, net                           122,304       120,873
Deferred income taxes, net                              5,047         2,237
Goodwill                                              225,685       176,230
Intangible assets, net                                 56,174        52,819
Other assets                                           22,195        16,650
                                                ------------- -------------
                                                $   1,243,907 $   1,024,316
                                                ============= =============
     LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Notes payable                                 $           4 $      19,000
  Accounts payable                                     47,823        53,990
  Deferred revenue                                     27,554        14,371
  Accrued payroll and related liabilities              43,337        39,431
  Accrued product warranties                            7,826         6,594
  Advance payments from customers                      19,183         9,156
  Other current liabilities                            26,527        14,600
  Accrued income taxes                                     --         3,752
  Current portion of long-term debt                        21             7
                                                ------------- -------------
    Total current liabilities                         172,275       160,901
Long-term debt                                        190,318       207,889
Deferred income taxes                                   5,983         1,902
Accrued income taxes                                    5,697         4,295
Pension and other long-term liabilities                29,572        26,054
Commitments and contingencies
Shareholders' equity                                  840,062       623,275
                                                ------------- -------------
                                                $   1,243,907 $   1,024,316
                                                ============= =============

Company Contact:
Tony Trunzo
+1 503.498.3547
www.flir.com


SOURCE: FLIR Systems, Inc.

http://www.flir.com

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