July 25, 2013

FLIR Systems Announces Second Quarter 2013 Financial Results

Second Quarter Revenue and EPS Increase 15% and 30%, Respectively; Record Quarterly Cash Flow From Operations

PORTLAND, OR -- (Marketwired) -- 07/25/13 -- FLIR Systems, Inc. (NASDAQ: FLIR) today announced financial results for the second quarter ended June 30, 2013. Revenue was $389.3 million, up 15% compared to second quarter 2012 revenue of $338.3 million. Operating income in the second quarter increased by 16% to $70.3 million and net income increased 22% to $50.2 million. Second quarter earnings per diluted share were $0.35, an increase of 30% compared to the second quarter a year ago. Cash provided by operations in the second quarter was $134.3 million and represented a quarterly record.

Revenue from the Company's Commercial Systems division increased 17% from the second quarter of 2012, to $221.8 million. Within the Commercial Systems division, revenue from the Thermal Vision and Measurement segment was $175 million, an increase of 23% from the second quarter results last year. The Raymarine segment contributed $46.9 million of revenue during the second quarter, down 1% from the prior year.

Revenue from the Company's Government Systems division increased 13% from the second quarter of 2012, to $167.5 million. Within the Government Systems division, revenue from the Surveillance segment was $118.6 million, a decrease of 1% from the second quarter of 2012. Revenue from the Detection segment was $14.4 million, a decrease of 9% compared to the second quarter of 2012. The Integrated Systems segment contributed $34.5 million of revenue during the second quarter, an increase of 160% from the prior year as a result of deliveries under the MSC program to U.S. Customs and Border Protection.

The Company's backlog of firm orders for delivery within the next twelve months was approximately $528 million as of June 30, 2013, an increase of $23 million during the quarter and $30 million from a year ago. Backlog in the Government Systems division was $339 million, increasing $5 million during the quarter and over the prior year. Backlog in the Commercial Systems division was $190 million, an increase of $18 million during the quarter and $25 million over the prior year.

"We saw solid growth in revenue, operating income, cash flow, and earnings per share in the second quarter, and increased backlog in both divisions," noted Andy Teich, President and CEO of FLIR. "We introduced several new products during the quarter, with more on the horizon. I am very excited about our future given our market presence, product suite, and ability to execute for our customers and our shareholders."

Revenue and Earnings Outlook for 2013
Based on financial results for the first six months of 2013 and the outlook for the remainder of the year, FLIR is reaffirming its outlook for revenue and earnings per share for the full year 2013. Management expects revenue for 2013 to be in the range of $1.5 billion to $1.6 billion and net earnings to be in the range of $1.56 to $1.66 per diluted share.

Dividend Declaration
FLIR's Board of Directors has declared a quarterly cash dividend of $0.09 per share on FLIR common stock, payable September 6, 2013, to shareholders of record as of close of business on August 19, 2013.

Conference Call
FLIR has scheduled a conference call at 8:00 a.m. ET (5:00 a.m. PT) today to discuss its results for the quarter. A simultaneous webcast of the conference call may be accessed online from the Upcoming Events link at the Investor Relations page of www.FLIR.com. A replay will be available after 11:00 a.m. ET (8:00 a.m. PT) at this same Internet address. Summary second quarter and historical financial data, including segment details, may be accessed online from the Summary Financial Data section of www.FLIR.com/investor.

About FLIR Systems
FLIR Systems, Inc. is a world leader in the design, manufacture, and marketing of sensor systems that enhance perception and awareness. The Company's advanced thermal imaging and threat detection systems are used for a wide variety of imaging, thermography, and security applications, including airborne and ground-based surveillance, condition monitoring, research and development, manufacturing process control, search and rescue, drug interdiction, navigation, transportation safety, border and maritime patrol, environmental monitoring, and chemical, biological, radiological, nuclear, and explosives (CBRNE) detection. Visit the Company's web site at www.FLIR.com.

Forward-Looking Statements
The statements in this release by Andy Teich and the statements in the section captioned "Revenue and Earnings Outlook for 2013" 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 FLIR'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 FLIR's products, product mix, the timing of customer orders and deliveries, the ability to develop new products in an efficient and timely manner, the impact of competitive products and pricing, FLIR's continuing compliance with U.S. 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 FLIR to act as a federal contractor, the amount and availability of appropriated government procurement funds and other risks discussed from time to time in FLIR'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 FLIR 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.


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FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
Revenue $ 389,329 $ 338,291 $ 737,912 $ 686,743
Cost of goods sold 199,288 168,262 363,884 333,988
Gross profit 190,041 170,029 374,028 352,755
Operating expenses:
Research and development 39,601 37,510 76,285 74,080
Selling, general and administrative 80,168 71,798 158,341 149,658
Total operating expenses 119,769 109,308 234,626 223,738
Earnings from operations 70,272 60,721 139,402 129,017
Interest expense 3,767 2,768 6,664 5,834
Interest income (274 ) (377 ) (465 ) (805 )
Other expense (income), net 175 240 (589 ) (984 )
Earnings from continuing operations before income taxes
66,604

58,090

133,792

124,972
Income tax provision 16,446 15,685 31,998 33,742
Earnings from continuing operations 50,158 42,405 101,794 91,230
Loss from discontinued operations, net of tax - (1,312 ) - (1,998 )
Net earnings $ 50,158 $ 41,093 $ 101,794 $ 89,232
Basic earnings per share:
Earnings from continuing operations $ 0.35 $ 0.28 $ 0.71 $ 0.59
Discontinued operations - (0.01 ) - (0.01 )
Basic earnings per share $ 0.35 $ 0.27 $ 0.71 $ 0.58