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PORTLAND, Ore.--(BUSINESS WIRE)--Oct. 20, 2004--FLIR Systems, Inc.
(Nasdaq:FLIR) announced today that revenue for the third quarter ended
September 30, 2004 increased 58% to $110.8 million from $70.2 million
for the third quarter of 2003. Earnings from operations increased 44%
to $25.7 million, or 23% of revenue, compared with $17.8 million, or
25% of revenue, for the third quarter of 2003. Net earnings for this
year's third quarter increased 55% to $16.8 million, or $0.44 per
diluted share compared to net earnings for the third quarter of 2003
of $10.9 million, or $0.32 per diluted share. For the first nine months of 2004, revenue increased 58% to $338.9
million from $214.6 million for the same period last year. Earnings
from operations for the first nine months of 2004 increased 59% to
$74.7 million, or 22% of revenue, from $47.0 million, or 22% of
revenue, for the first nine months of 2003. Net earnings increased 60%
to $47.4 million, or $1.30 per diluted share, compared to net earnings
of $29.7 million, or $0.84 per diluted share, for the first nine
months of 2003. Revenue from the Company's Thermography products increased 35%
over the third quarter last year, as a result of strong demand across
all products and markets. Revenue from the Company's Imaging products
increased 72% in the third quarter. During the quarter, airborne
Imaging markets were particularly strong. The backlog of orders for delivery within the next twelve months
was approximately $178 million at September 30, 2004, compared to $183
million at June 30, 2004. Cash generated from operations totaled $22 million for the third
quarter of 2004, and $61 million for the first nine months of 2004. At
September 30, 2004, the Company had cash and cash equivalents of $95
million. Earl Lewis, President and CEO, stated, "I am pleased with our
financial performance in the third quarter. Our growth over the third
quarter of last year was very strong, and we achieved solid results
across all markets and product lines. As we had announced, our
earnings per share were less than in the second quarter, due to
seasonal factors and a slower than usual end to the government fiscal
year. Nevertheless, all of our businesses are performing well, and our
outlook for the business has not changed. We expect our usual strong
fourth quarter results, and are thus reaffirming guidance for the full
year 2004." Effect of Convertible Notes on Earnings Per Share In June, 2003, the Company issued $210 million of 3% Senior
Convertible Notes, due 2023. The Notes are convertible into FLIR
common stock at a conversion price of $44.38 per share. During the
third quarter of 2004, the Company met certain requirements that allow
holders of the Notes to convert their Notes into shares of FLIR common
stock. As a result, the 4.7 million shares underlying the Notes have
been included in the Company's diluted share count for the third
quarter of 2004. Excluding the effect of the additional dilutive
shares, earnings per share would have been $0.47. In addition, a recent accounting pronouncement that is expected to
be effective in the fourth quarter of 2004 will require that the
underlying shares related to the Notes be included in the Company's
diluted share count retroactive to the date of issuance in June 2003.
As a result, the Company anticipates restating its diluted earnings
per share in the fourth quarter of 2004 for prior periods dating back
to the second quarter of 2003. This pronouncement impacts only the
calculation of diluted earnings per share, and has no effect on the
reporting or determination of the Company's net income. Based on the Company's interpretation of the new accounting rules,
the impact of the restatement will be to reduce fiscal 2003 fully
diluted earnings per share by $.02 to $1.25 per share, from a
previously reported $1.27 per share. The impact of the diluted earnings per share restatement in the
first nine months of 2004 would be to reduce fully diluted earnings
per share to $1.26 per share from a reported $1.30 per share. Revenue and Earnings Guidance for 2004 The following statements are based on current expectations. These
statements are forward-looking, and actual results may differ
materially. Based on the Company's financial results for the first nine months
of 2004, and the outlook for the remainder of the year, management
currently expects revenue for 2004 to be approximately $470 million to
$480 million and fully diluted earnings per share to be in the range
of $1.76 to $1.86. Excluding the effect of the dilutive shares related
to the Notes, the new earnings per share outlook is the same as prior
guidance of $1.88 to $1.98 per diluted share. Forward-Looking Statements The statements in this release by Earl R. Lewis and the statements
in the Revenue and Earnings Guidance for 2004 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, the timely
receipt of export licenses for international shipments, 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
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 #21210332 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 OPERATIONS
(In thousands, except per share amounts)(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- -----------------
2004 2003 2004 2003
------- ------- ------- -------
Revenue $110,769 $70,232 $338,925 $214,565
Cost of goods sold 51,789 31,241 165,501 100,410
------- ------- ------- -------
Gross profit 58,980 38,991 173,424 114,155
Operating expenses:
Research and development 11,324 6,255 32,706 21,638
Selling, general and
administrative 21,997 14,967 65,983 45,519
------- ------- ------- -------
Total operating expenses 33,321 21,222 98,689 67,157
Earnings from operations 25,659 17,769 74,735 46,998
Interest expense 1,954 2,240 6,061 2,862
Other expenses (income), net 429 (35) 1,037 415
------- ------- ------- -------
Earnings before income taxes 23,276 15,564 67,637 43,721
Income tax provision 6,452 4,699 20,204 13,991
------- ------- ------- -------
Net earnings $16,824 $10,865 $47,433 $29,730
------- ------- ------- -------
Net earnings per share:
Basic $0.50 $0.33 $1.41 $0.87
------- ------- ------- -------
Diluted $0.44 $0.32 $1.30 $0.84
------- ------- ------- -------
Weighted average shares
outstanding:
Basic 33,955 32,959 33,591 34,033
======= ======= ======= =======
Diluted 40,855 34,358 37,254 35,472
======= ======= ======= =======
FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
September December
30, 31,
2004 2003
-------- --------
ASSETS (Unaudited)
------
Current assets:
Cash and cash equivalents $94,895 $197,993
Accounts receivable, net 92,569 79,332
Inventories, net 94,041 75,959
Prepaid expenses and other current assets 22,810 19,997
Income taxes receivable 2,950 --
Deferred income taxes, net 9,908 8,832
-------- --------
Total current assets 317,173 382,113
Property and equipment, net 32,462 22,758
Deferred income taxes, net 6,500 21,146
Goodwill 149,475 12,500
Intangible assets, net 48,524 4,036
Other assets 9,488 7,870
-------- --------
$563,622 $450,423
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $33,931 $26,427
Deferred revenue 5,713 4,540
Accrued payroll and related liabilities 16,574 12,778
Accrued product warranties 4,923 3,511
Advance payments from customers 9,360 12,112
Other current liabilities 12,472 8,227
Accrued income taxes -- 2,742
Current portion of long-term debt 128 --
-------- --------
Total current liabilities 83,101 70,337
Long-term debt 205,142 204,369
Pension and other long-term liabilities 11,758 10,875
Commitments and contingencies
Shareholders' equity 263,621 164,842
-------- --------
$563,622 $450,423
======== ========
CONTACT: FLIR Systems, Inc.
Anthony Trunzo, 503-684-3731
www.flir.com
or
Neil Berkman Associates (Investor Contact)
310-277-5162
info@BerkmanAssociates.com
SOURCE: FLIR Systems, Inc.
