July 24, 2002

FLIR Systems 2002 Second Quarter Net Earnings Increase 70% to a Record $0.54 Per Diluted Share; Revenue Increases 24 Percent

PORTLAND, Ore., Jul 24, 2002 (BUSINESS WIRE) -- FLIR Systems, Inc. (Nasdaq:FLIR) announced today that net earnings for the second quarter ended June 30, 2002 increased 70% to a second quarter record $9.6 million, or $0.54 per diluted share. This compares to net earnings for the second quarter of 2001 of $5.6 million, or $0.36 per diluted share. Revenue increased 24% to a record $63.6 million from $51.4 million for the same period last year.

For the first half of 2002, net earnings increased 92% to $18.2 million, or $1.02 per diluted share, from $9.5 million, or $0.63 per diluted share, for the first six months of 2001. Revenue for the first half of 2002 increased 19% to $121.7 million from $101.9 million for the same period last year.

The increase in revenue for the second quarter of 2002 reflected higher sales of FLIR's imaging products, particularly its ground-based and airborne imaging systems. Gross margins were 52% compared to 56% for the same period last year. The decline in gross margin is primarily due to changes in product sales mix and new product start-up costs. Earnings from operations increased 35% to $11.6 million, or 18.2% of revenue, for the 2002 second quarter compared to $8.6 million, or 16.7% of revenue, for the second quarter of 2001.

The backlog of firm orders at June 30, 2002 increased to $91 million from $85 million at March 31, 2002 and $82 million at December 31, 2001.

"In addition to strong revenue and earnings growth for the second quarter, there have been a number of very positive developments, including very strong orders, a number of new product introductions, our previously announced participation in the US Coast Guard's Deepwater program and the significant addition to our Board of Directors. All of which bodes well for the second half of the year," said President and CEO Earl R. Lewis.



Conference Call

FLIR has scheduled a conference call at 11 AM EDT (8 AM PDT) today. A simultaneous Web Cast of the conference call may be accessed online at www.CompanyBoardroom.com or www.Flir.com. A replay will be available approximately one hour after the Web Cast at these same internet addresses. For a telephone replay, dial 800/633-8284, reservation #20679609 beginning after 1 PM EDT (10 AM PDT).



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



Forward-Looking Statements

The statements in this release by Earl R. Lewis 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, constraints on supplies of critical components, excess or shortage of production capacity, actual purchases under agreements, 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, including the Company's Annual Report on Form 10-K for the year ended December 31, 2001. 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.



                          FLIR SYSTEMS, INC.
                 CONSOLIDATED STATEMENTS OF OPERATIONS
          (In thousands, except per share amounts)(Unaudited)
                               Three Months Ended    Six Months Ended
                                       June 30,           June 30,
                               ------------------  -------------------
                                2002       2001      2002     2001
                               -------  ---------  --------  --------
Revenue                        $ 63,595  $ 51,395  $ 121,693 $ 101,867
Cost of goods sold               30,777    22,700     57,576    45,881
                               -------  ---------  --------  --------
Gross profit                     32,818    28,695     64,117    55,986
Operating expenses:
  Research and development        6,460     6,635     13,549    12,740
  Selling, general and
    administrative               14,762    13,490     28,581    26,852
                               -------  ---------  --------  --------
Total operating expenses         21,222    20,125     42,130    39,592
Earnings from operations         11,596     8,570     21,987    16,394
Interest expense                    825     2,004      1,143     5,458
Other income, net                 (473)      (50)      (597)     (238)
                               -------  ---------  --------  --------
Earnings before income taxes     11,244     6,616     21,441    11,174
Income tax provision              1,687       992      3,216     1,676
                               -------  ---------  --------  --------
       Net earnings           $   9,557  $  5,624  $  18,225  $  9,498
                               =======  =========  ========  ========
Net earnings per share:
    Basic                      $   0.57   $  0.38    $  1.09    $ 0.65
                               =======  =========  ========  ========
    Diluted                    $   0.54   $  0.36    $  1.02    $ 0.63
                               =======  =========  ========  ========
Weighted Average shares outstanding:
    Basic                        16,794    14,710     16,723    14,636
                               =======  =========  ========  ========
    Diluted                      17,818    15,430     17,807    15,108
                               =======  =========  ========  ========
                          FLIR SYSTEMS, INC.
                      CONSOLIDATED BALANCE SHEETS
                   (In thousands, except par value)
                                      Jun. 30,          Dec. 31,
                                        2002              2001
                                   ----------------  ----------------
                  ASSETS             (Unaudited)
                  ------
Current assets:
    Cash and cash equivalents             $   11,006        $   15,514
    Accounts receivable, net                  55,486            57,965
    Inventories                               50,642            46,560
    Prepaid expenses and other current
      assets                                  13,988            11,548
    Deferred income taxes                      8,834             8,834
                                   ----------------  ----------------
        Total current assets                 139,956           140,421
Property and equipment, net                   13,698            10,806
Deferred income taxes, net                    15,087            15,087
Intangible assets, net                        16,803            16,811
Other assets                                   2,757             1,913
                                   ----------------  ----------------
                                           $ 188,301         $ 185,038
                                   ================  ================
       LIABILITIES AND SHAREHOLDERS' EQUITY
       ------------------------------------
Current liabilities:
    Notes payable                        $     3,685        $   23,370
    Accounts payable                          14,525            18,428
    Deferred revenue                           4,895             5,314
    Accrued payroll and other
      liabilities                             27,456            22,538
    Accrued income taxes                       1,544               747
    Current portion of capital lease
      obligations                                126               584
                                   ----------------  ----------------
        Total current liabilities             52,231            70,981
Pension and other long-term
  liabilities                                  7,702             9,209
Commitments and contingencies
Shareholders' equity:
   Preferred stock, $0.01 par value,
     10,000 shares authorized; no
     shares issued at June 30, 2002,
     and December 31, 2001                        --                --
   Common stock, $0.01 par value,
     30,000 shares authorized, 16,864
     and 16,555 shares issued at
     June 30, 2002 and December 31, 2001,
     respectively                                168               165
   Additional paid-in capital                199,038           194,338
   Accumulated deficit                      (66,639)          (84,864)
   Accumulated other comprehensive loss      (4,199)           (4,791)
                                   ----------------  ----------------
        Total shareholders' equity           128,368           104,848
                                   ----------------  ----------------
                                           $ 188,301          $185,038
                                   ================  ================
								   
CONTACT:          FLIR Systems, Inc.
                  Steve Bailey, 503/684-3731
                  www.flir.com
                  or
                  Neil Berkman Associates
                  310/277-5162
                  info@BerkmanAssociates.com

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