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PORTLAND, OR, Jul 19, 2006 (MARKET WIRE via COMTEX News Network) -- FLIR Systems, Inc. (NASDAQ: FLIR) announced today that revenue for
the second quarter ended June 30, 2006 increased 6% to $138.6 million
from $131.0 million for the second quarter of 2005, due to higher
revenue from the Company's Thermography and Commercial Vision Systems
divisions. Earnings from operations decreased 10% to $29.0 million,
or 21% of revenue, compared with $32.3 million, or 25% of revenue,
for the second quarter of 2005. The decline in earnings from
operations was attributable to lower profitability in the Company's
Government Systems division, the impact of stock based compensation
expense and higher selling and marketing expenses, particularly in
the Thermography and Commercial Vision Systems divisions. Net
earnings per fully diluted share totaled $0.28, as compared to net
earnings per fully diluted share of $0.31 in the second quarter of
2005.
For the first six months of 2006, revenue increased 7% to $255.9
million from $239.3 million for the same period last year. Earnings
from operations for the first six months of 2006 decreased 10% to
$47.9 million, or 19% of revenue, from $53.5 million, or 22% of
revenue, for the first six months of 2005. Net earnings per fully
diluted share for the quarter was $0.45, as compared to net earnings
per fully diluted share of $0.50 per diluted share for the first six
months of 2005.
Revenue from the Company's Thermography Division increased 15% over
the second quarter last year, to $51.8 million, as a result of the
recent introduction of several new products, including the InfraCAM®
and the upgraded ThermoVision E-Series® camera line. During the
quarter the Thermography Division also introduced the all new
P-Series camera, the P640.
Revenue from the Company's Government Systems Division decreased by
6% in the second quarter to $62.0 million, due in part to lower sales
of land-based products in the Division's Boston facility.
Revenue from the Company's Commercial Vision Systems Division
increased 25% over the second quarter of last year, to $24.8 million,
reflecting strength in the automotive, maritime and OEM businesses.
The backlog of orders for delivery within the next twelve months was
approximately $173 million at June 30, 2006, compared to $201 million
at March 31, 2006. Lower backlog was attributable to the order delays
in the Government Systems Division, both domestically and
internationally.
Cash generated from operations totaled $20 million for the second
quarter of 2006, and $54 million for the first six months of the year.
At June 30, 2006, the Company had cash and cash equivalents of $143
million. During the quarter, the Company repurchased 278,000 shares
of its common stock in the open market at an average price of
approximately $25 per share.
Earl Lewis, President and CEO of FLIR, stated, "Overall second
quarter results were consistent with our expectations. Both the
Thermography and Commercial Vision Systems divisions saw continued
good revenue growth and profitability growth in the quarter and the
first half of the year. We expect both of these divisions to
continue to do well in the second half. Government Systems Division
revenue and orders were less than our expectations. We are slightly
lowering our revenue expectations for the year, reflecting continued
softness in Government Systems, but maintaining earnings per share
guidance within our original range. We believe the long term outlook
for the Government Systems business is improving, and expect faster
growth in the future. Our selection by Bell as the provider of the
Target Acquisition Sensor Suite for the US Army's Armed
Reconnaissance Helicopter program is only one of several significant
program opportunities for our BRITE Star II® system. Production in
our Boston facility is improving, and we expect to see better results
there in the second half of the year," he concluded.
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 six months of 2006, and
the outlook for the remainder of the year, management currently
expects revenue for 2006 to be in the range of $570 million to $580
million. This compares with management's previous expectations for
2006 revenue of $590 million to $600 million. Management currently
expects earnings per share for 2006 to be in the previously-announced
range of $1.20 to $1.30.
Forward-Looking Statements
The statements in this release by Earl R. Lewis, particularly the
expectation that the Thermography and Commercial Vision Systems
divisions will continue to do well in the second half of the year, and
the statements in the Revenue and Earnings Guidance for 2006 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 under existing or future contracts, 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 EDT 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
#21294661 beginning at approximately 1:00 pm 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.
Company contact: SOURCE: FLIR Systems, Inc.
http://www.flir.comFLIR SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Revenue $ 138,550 $ 130,966 $ 255,889 $ 239,283
Cost of goods sold 64,639 59,639 121,130 109,370
--------- --------- --------- ---------
Gross profit 73,911 71,327 134,759 129,913
Operating expenses:
Research and development 15,166 13,970 30,395 27,225
Selling, general and
administrative 29,696 25,031 56,449 49,227
--------- --------- --------- ---------
Total operating expenses 44,862 39,001 86,844 76,452
Earnings from operations 29,049 32,326 47,915 53,461
Interest expense 1,953 1,972 3,877 3,967
Other income, net (2,725) (2,852) (3,426) (3,586)
--------- --------- --------- ---------
Earnings before income
taxes 29,821 33,206 47,464 53,080
Income tax provision 8,410 8,634 13,394 13,801
--------- --------- --------- ---------
Net earnings $ 21,411 $ 24,572 $ 34,070 $ 39,279
========= ========= ========= =========
Net earnings per share:
Basic $ 0.31 $ 0.35 $ 0.49 $ 0.56
========= ========= ========= =========
Diluted $ 0.28 $ 0.31 $ 0.45 $ 0.50
========= ========= ========= =========
Weighted average shares
outstanding:
Basic 69,109 69,519 69,136 69,536
========= ========= ========= =========
Diluted 80,801 81,990 81,001 82,273
========= ========= ========= =========
FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)(Unaudited)
June 30, December 31,
2006 2005
------------ ------------
ASSETS
------
Current assets:
Cash and cash equivalents $ 143,321 $ 107,057
Accounts receivable, net 125,894 142,782
Inventories, net 121,903 103,837
Prepaid expenses and other current
assets 36,975 33,153
Deferred income taxes, net 18,709 18,709
------------ ------------
Total current assets 446,802 405,538
Property and equipment, net 74,629 59,479
Deferred income taxes, net 8,636 8,415
Goodwill 159,634 158,065
Intangible assets, net 44,172 46,901
Other assets 15,783 15,981
------------ ------------
$ 749,656 $ 694,379
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $ 35,559 $ 34,477
Deferred revenue 11,849 10,297
Accrued payroll and related liabilities 20,383 20,374
Accrued product warranties 5,283 5,059
Advance payments from customers 5,029 5,013
Other current liabilities 9,530 11,626
Accrued income taxes 5,815 3,148
Current portion of long-term debt 7 56
------------ ------------
Total current liabilities 93,455 90,050
Long-term debt 206,589 206,155
Deferred tax liability, net 10,641 10,779
Pension and other long-term liabilities 19,210 18,413
Commitments and contingencies
Shareholders' equity 419,761 368,982
------------ ------------
$ 749,656 $ 694,379
============ ============
Anthony Trunzo
FLIR Systems, Inc.
(503) 498-3547
www.flir.com
