FLIR Systems Announces Second Quarter 2003 Financial Results;

Management Increases 2003 Revenue and Earnings Guidance

 

PORTLAND, Ore., Jul 23, 2003 (BUSINESS WIRE) -- FLIR Systems, Inc. (Nasdaq:FLIR) announced today that revenue for the second quarter ended June 30, 2003, increased 18% to $75.2 million from $63.6 million for the second quarter of 2002. Earnings from operations increased 34% to $15.5 million, or 21% of revenue, from $11.6 million, or 18% of revenue, for the second quarter of 2002. Net earnings for this year's second quarter increased 2% to $9.7 million, or $0.27 per diluted share, reflecting a 33% tax rate. This compares to net earnings for the second quarter of 2002 of $9.6 million, also at $0.27 per diluted share, reflecting a 15% tax rate.

For the first half of 2003, revenue increased 19% to $144.3 million from $121.7 million for the same period last year. Earnings from operations for the first six months of 2003 increased 33% to $29.2 million, or 20% of revenue, from $22.0 million, or 18% of revenue, for the first half of 2002. Net earnings for that period increased 4% to $18.9 million, or $0.52 per diluted share. This compares to net earnings of $18.2 million, or $0.51 per diluted share, for the first six months of 2002. All per share amounts have been adjusted to reflect the 2-for-1 stock split that was effective on May 29, 2003.

Thermography product revenue for the second quarter increased 38% over the second quarter last year, primarily due to higher sales of the Company's new E-Series handheld cameras and favorable currency exchange rates. Imaging product revenue increased 9%, reflecting sales gains for the Company's ground-based and maritime Imaging systems.

The backlog of orders grew to approximately $119 million at June 30, 2003, as compared to $113 million at March 31, 2003. Cash generated from operations totaled $3.5 million for the second quarter of 2003. At June 30, 2003, the Company had cash and cash equivalents of approximately $204 million, which includes approximately $150 million from the placement of convertible notes and the concurrent repurchase of the Company's common stock.

"Our financial performance in the second quarter continued to demonstrate strong demand for our full range of products. I am particularly encouraged by both the increase in our backlog and the significant increase in sales of our Thermography systems. The Company is well positioned to achieve our goals for 2003 as we head into the second half, which is seasonally our strongest part of the year," said President and CEO Earl R. Lewis.

Revenue and Earnings Guidance for 2003

The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.

Based on its financial results to date, management currently expects revenue for 2003 in the range of approximately $300 to $305 million and net earnings in the range of approximately $1.20 to $1.25 per diluted share, reflecting an estimated tax rate of 33% versus 15% in 2002. The Company had previously provided 2003 guidance for total revenue of between $290 and $300 million and net earnings, on a post-split basis, of between $1.18 and $1.23 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 2003 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 U.S. 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 #21153789, 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.

                          FLIR SYSTEMS, INC.
                CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands, except per share amounts)
                              (Unaudited)
 
                                   Three Months        Six Months
                                       Ended              Ended
                                      June 30,           June 30,
                                    2003     2002      2003      2002
 
Revenue                          $75,162  $63,595  $144,333  $121,693
Cost of goods sold                36,041   30,777    69,169    57,576
Gross profit                      39,121   32,818    75,164    64,117
 
Operating expenses:
Research and development           7,785    6,460    15,383    13,549
Selling, general and
 administrative                   15,834   14,762    30,552    28,581
Total operating expenses          23,619   21,222    45,935    42,130
 
Earnings from operations          15,502   11,596    29,229    21,987
 
Interest expense                     445      825       622     1,143
Other expenses (income), net         557     (473)      450      (597)
 
Earnings before income taxes      14,500   11,244    28,157    21,441
 
Income tax provision               4,785    1,687     9,292     3,216
 
Net earnings                      $9,715   $9,557   $18,865   $18,225
 
Net earnings per share:
Basic                              $0.28    $0.28     $0.55     $0.54
Diluted                            $0.27    $0.27     $0.52     $0.51
 
Weighted average shares
 outstanding:
Basic                             34,492   33,588    34,579    33,445
Diluted                           35,945   35,636    36,020    35,614
 
All per share amounts have been adjusted to reflect the two-for-one
stock split.
 
 
                          FLIR SYSTEMS, INC.
                     CONSOLIDATED BALANCE SHEETS
                   (In thousands, except par value)
 
                                                  June 30,   Dec. 31,
                                                    2003       2002
                     ASSETS                      (Unaudited)
Current assets:
   Cash and cash equivalents                       $204,207   $46,606
   Accounts receivable, net                          65,857    55,798
   Inventories, net                                  55,272    50,141
   Prepaid expenses and other current assets         18,501    12,673
   Deferred income taxes                              8,887     8,887
        Total current assets                        352,724   174,105
 
Property and equipment, net                          12,027    12,678
Deferred income taxes, net                           25,977    25,977
Intangible assets, net                               16,589    16,647
Other assets                                          5,904     4,415
                                                   $413,221  $233,822
 
      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                 $18,817   $16,465
   Deferred revenue                                   4,989     4,770
   Accrued payroll and related liabilities            9,207    11,030
   Accrued product warranties                         3,566     3,432
   Advance payments from customers                   11,570     8,030
   Other current liabilities                          6,918     6,341
   Accrued income taxes                                 945     2,558
        Total current liabilities                    56,012    52,626
 
Long-term debt                                      203,965        --
Pension and other long-term liabilities               9,974     8,869
 
Commitments and contingencies
 
Shareholders' equity:
  Preferred stock, $.01 par value, 10,000 shares
    authorized; no shares issued at June 30,
     2003, and December 31, 2002                         --        --
  Common stock, $.01 par value, 100,000 shares
    authorized, 33,202 and 34,599 shares issued
     at June 30, 2003, & December 31, 2002,
     respectively, and additional paid-in
     capital                                        167,571   218,052
  Accumulated deficit                                24,440   (43,305)
  Accumulated other comprehensive loss                  139    (2,420)
        Total shareholders' equity                  143,270   172,327
                                                   $413,221  $233,822

SOURCE: FLIR Systems, Inc.

Company contact:
FLIR Systems, Inc.
Steve Bailey, 503-684-3731
www.FLIR.com
or
Investor contact:
Neil Berkman Associates, 310-277-5162
info@BerkmanAssociates.com