PORTLAND, OR -- (MARKET WIRE) -- October 26, 2006 -- FLIR Systems, Inc. (
NASDAQ:
FLIR) announced
today that revenue for the third quarter ended September 30, 2006 increased
18% to $133.2 million from $113.0 million for the third quarter of 2005.
Earnings from operations increased 29% to $34.0 million, or 25% of revenue,
compared with $26.3 million, or 23% of revenue, for the third quarter of
2005. Net earnings for this year's third quarter increased 56% to $27.1
million, or $0.36 per diluted share, compared to net earnings for the third
quarter of 2005 of $17.3 million, or $0.22 per diluted share. The
Company's income tax rate for the third quarter was 18%, compared with 26%
in the third quarter of 2005. During the third quarter, the Company's tax
expense was reduced by $3.1 million related primarily to the recognition of
deferred tax assets not recognizable in previous periods. Stock based
compensation expense for the third quarter of 2006 was $2.8 million, or
approximately $0.03 per fully diluted share.
For the first nine months of 2006, revenue increased 10% to $389.1 million
from $352.3 million for the same period last year. Earnings from
operations for the first nine months of 2006 increased 3% to $81.9 million,
or 21% of revenue, from $79.8 million, or 23% of revenue, for the first
nine months of 2005. Net earnings increased 8% to $61.1 million, or $0.80
per diluted share, compared to net earnings of $56.6 million, or $0.73 per
diluted share, for the first nine months of 2005. The Company recognized
stock based compensation expense totaling $7.8 million for the first nine
months of 2006, or approximately $0.08 per fully diluted share.
Revenue from the Company's Thermography Division increased 29% over the
third quarter of 2005, as a result of stronger international markets and
the recent introduction of several new products, including the ThermaCAM
® P640, the recently redesigned ThermaCAM® E-Series and the
InfraCAM®.
Revenue from the Company's Government Systems Division increased by 6% in
the third quarter to $56.9 million, due to strength in certain major
government programs and higher international sales.
Revenue from the Company's Commercial Vision Systems Division increased 29%
over the third quarter of last year, to $26.6 million, reflecting strong
component and core sales and rapid growth in security applications.
The backlog of orders for delivery within the next twelve months was
approximately $244 million at September 30, 2006, an increase of $71
million from the June 30, 2006 backlog of $173 million. The Company's
Government Systems Division experienced record orders during the third
quarter and accounted for the majority of the backlog increase.
Cash generated from operations totaled $21 million for the third quarter of
2006, and $75 million for the first nine months of the year. At September
30, 2006, the Company had cash and cash equivalents of $112 million.
During the quarter, the Company repurchased approximately 4 million shares
of its common stock at an average price of approximately $25.36 per share.
Earl Lewis, President and CEO, stated, "I am very pleased with our results
for the third quarter. The Government Systems Division had excellent order
activity, and we are seeing renewed growth in this business. Our new
Thermography products have been very well received, and the Commercial
Vision Systems Division is executing well on its focused strategies of
building distribution and expanding its product offerings. We are
confident in our outlook for the remainder of 2006 and are encouraged by
the prospects for 2007."
Revenue and Earnings Guidance for 2006
The following statements are based on current expectations. These
statements are forward-looking, and actual results may differ materially.
Based on its financial results for the first nine months of 2006, and the
outlook for the remainder of the year, management currently expects revenue
for 2006 to be in the previously announced range of $570 million to $580
million, and net earnings to be in the range of approximately $1.27 to
$1.32 per fully diluted share. This compares with management's previous
expectations for 2006 earnings of $1.20 to $1.30 per fully diluted share.
Forward-Looking Statements
The statements in this release by Earl R. Lewis and the statements in the
Revenue and Earnings Guidance for 2006 above 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 8:00 am EDT today. A simultaneous
web cast of the conference call may be accessed online from the Calendar of
Events link at the investor relations page of
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 #21304781 after approximately 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 INCOME
(In thousands, except per share amounts)(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
2006 2005 2006 2005
--------- ---------- --------- ---------
Revenue $ 133,212 $ 113,031 $ 389,101 $ 352,314
Cost of goods sold 57,501 52,911 178,631 162,281
--------- ---------- --------- ---------
Gross profit 75,711 60,120 210,470 190,033
Operating expenses:
Research and development 13,928 11,777 44,323 39,002
Selling, general and
administrative 27,816 22,002 84,265 71,229
--------- ---------- --------- ---------
Total operating expenses 41,744 33,779 128,588 110,231
Earnings from operations 33,967 26,341 81,882 79,802
Interest expense 2,266 1,954 6,143 5,921
Other (income) expense, net (1,448) 949 (4,874) (2,637)
--------- ---------- --------- ---------
Earnings before income
taxes 33,149 23,438 80,613 76,518
Income tax provision 6,079 6,094 19,473 19,895
--------- ---------- --------- ---------
Net earnings $ 27,070 $ 17,344 $ 61,140 $ 56,623
========= ========== ========= =========
Net earnings per share:
Basic $ 0.40 $ 0.25 $ 0.89 $ 0.81
--------- ---------- --------- ---------
Diluted $ 0.36 $ 0.22 $ 0.80 $ 0.73
========= ========== ========= =========
Weighted average shares
outstanding:
Basic 67,478 69,777 68,577 69,617
--------- ---------- --------- ---------
Diluted 79,052 82,292 80,256 82,286
========= ========== ========= =========
FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)(Unaudited)
September 30, December 31,
2006 2005
-------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 112,370 $ 107,057
Accounts receivable, net 133,902 142,782
Inventories, net 129,262 103,837
Prepaid expenses and other current assets 39,141 33,153
Deferred income taxes, net 21,285 18,709
-------------- --------------
Total current assets 435,960 405,538
Property and equipment, net 76,383 59,479
Deferred income taxes, net 9,405 8,415
Goodwill 159,021 158,065
Intangible assets, net 42,495 46,901
Other assets 17,108 15,981
-------------- --------------
$ 740,372 $ 694,379
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 53,000 $ --
Accounts payable 34,692 34,477
Deferred revenue 11,618 10,297
Accrued payroll and related liabilities 22,157 20,374
Accrued product warranties 5,029 5,059
Advance payments from customers 5,294 5,013
Other current liabilities 11,888 11,626
Accrued income taxes 17,920 3,148
Current portion of long-term debt 7 56
-------------- --------------
Total current liabilities 161,605 90,050
Long-term debt 206,807 206,155
Deferred tax liability, net 2,799 10,779
Pension and other long-term liabilities 19,728 18,413
Commitments and contingencies
Shareholders equity 349,433 368,982
-------------- --------------
$ 740,372 $ 694,379
============== ==============
Contact Information: Company Contact:
Tony Trunzo
+1 503.498.3547
www.flir.com