WILSONVILLE, OR--(Marketwired - Jul 24, 2015) - FLIR Systems, Inc. (NASDAQ: FLIR) today announced financial results for the second quarter ended June 30, 2015. Revenue was $393 million, up 6% compared to second quarter 2014 revenue of $369.4 million. On a constant-currency basis, revenue for the second quarter was up 12% compared to the prior year, as foreign currency exchange fluctuations negatively impacted revenue by approximately $20 million. Operating income in the second quarter was $70.5 million, compared to $59.4 million in the second quarter of 2014. Operating income was impacted by pretax charges related to previously-announced restructuring initiatives of $0.5 million in the second quarter of 2015 and $3.5 million in the second quarter of 2014. Second quarter 2015 net income was $50.5 million, or $0.36 per diluted share, compared with net income of $44.8 million, or $0.31 per diluted share in the second quarter a year ago. Net income was impacted by after-tax restructuring charges of $0.3 million in the second quarter of 2015 and $2.7 million, or $0.02 per diluted share, in the second quarter of 2014. Cash provided by operations in the second quarter of 2015 was $48.9 million.

The Surveillance segment contributed $107.8 million of revenue during the second quarter, down 5% from the prior year. The Instruments segment had $90.3 million of revenue, up 7% versus the prior year, and was negatively impacted by foreign currency exchange fluctuations by approximately $7 million. FLIR's OEM & Emerging Markets segment recorded revenue of $46.3 million in the second quarter, down 9% from the prior year. Revenue from the Maritime segment was $52 million, down 6% from the second quarter of 2014, and was negatively impacted by foreign currency exchange fluctuations by approximately $7 million. Security segment revenue was $60 million, an increase of 34% over the second quarter results last year. The Detection segment contributed $36.5 million of revenue, an increase of 77% from the prior year.

"With currency-neutral revenue growth of approximately 7% and EPS growth of 35%, we have been successful in executing on our strategies in the first half of 2015," said Andy Teich, President and CEO of FLIR. "Innovations in many of our commercial markets have driven broader adoption of our thermal and other sensing technologies. FLIR's commercially-developed, military qualified (CDMQ) model continues to be a positive differentiator in our government and military markets while our restructuring initiatives have proven very beneficial from a profitability standpoint. We look forward to continuing this momentum into the second half of 2015."

FLIR's backlog of firm orders for delivery within the next twelve months was approximately $536 million as of June 30, 2015, a decrease of $21 million, or 4%, during the quarter and a decrease of $12 million, or 2%, from the second quarter of 2014.

Revenue and Earnings Outlook for 2015

Based on financial results for the first half of 2015 and the outlook for the remainder of the year, FLIR continues to expect revenue for the full year 2015 to be in the range of $1.55 billion to $1.6 billion and net earnings, excluding restructuring charges, to be in the range of $1.60 to $1.70 per diluted share. 

Dividend Declaration

FLIR's Board of Directors has declared a quarterly cash dividend of $0.11 per share on FLIR common stock, payable September 4, 2015, to shareholders of record as of close of business on August 21, 2015.

Conference Call

FLIR has scheduled a conference call at 8:00 a.m. ET (5:00 a.m. PT) today to discuss its results for the quarter. A simultaneous webcast of the conference call and the accompanying summary presentation may be accessed online from a link in the Events & Presentations section of www.FLIR.com/investor. A replay will be available after 11:00 a.m. ET (8:00 a.m. PT) at this same internet address. Summary second quarter and historical financial data may be accessed online from the Financial Info Database link at www.FLIR.com/investor.

About FLIR Systems

FLIR Systems, Inc. is a world leader in the design, manufacture, and marketing of sensor systems that enhance perception and awareness. FLIR's advanced systems and components are used for a wide variety of thermal imaging, situational awareness, and security applications, including airborne and ground-based surveillance, condition monitoring, navigation, recreation, research and development, manufacturing process control, search and rescue, drug interdiction, transportation safety, border and maritime patrol, environmental monitoring, and chemical, biological, radiological, nuclear, and explosives (CBRNE) threat detection. For more information, visit FLIR's web site at www.FLIR.com.

Forward-Looking Statements

The statements in this release by Andy Teich and the statements in the section captioned "Revenue and Earnings Outlook for 2015" 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 FLIR'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 FLIR's products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, FLIR's continuing compliance with U.S. export control laws and regulations, the timely receipt of any required export licenses, constraints on supplies of critical components, excess or shortage of production capacity, the ability to manufacture and ship the products in the time period required, actual purchases under agreements, the continuing eligibility of FLIR to act as a federal contractor, the amount and availability of appropriated government procurement funds and other risks discussed from time to time in FLIR'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 FLIR does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release, or for changes made to this document by wire services or internet service providers.

FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)(Unaudited)
			Three Months Ended								Six Months Ended
			June 30,								June 30,
			2015				2014				2015				2014
Revenue			$	392,975			$	369,380			$	737,492			$	720,923
Cost of goods sold				203,360				186,662				371,980				369,673
		Gross profit		189,615				182,718				365,512				351,250
Operating expenses:
Research and development				35,154				36,307				69,848				72,633
Selling, general and administrative				83,476				83,500				158,611				165,442
Restructuring expenses				454				3,547				768				11,361
		Total operating expenses		119,084				123,354				229,227				249,436
		Earnings from operations		70,531				59,364				136,285				101,814
Interest expense				3,358				3,629				7,019				7,337
Interest income				(295	)			(272	)			(542	)			(536	)
Other expense (income), net				1,020				(1,070	)			320				(1,269	)
		Earnings before income taxes		66,448				57,077				129,488				96,282
Income tax provision				15,948				12,319				31,078				21,630
		Net earnings	$	50,500			$	44,758			$	98,410			$	74,652
Earnings per share:
Basic			$	0.36			$	0.32			$	0.70			$	0.53
Diluted			$	0.36			$	0.31			$	0.70			$	0.52
Weighted average shares outstanding:
	Basic			140,063				141,574				139,916				141,255
	Diluted			141,491				144,120				141,484				143,964

FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)(Unaudited)
			June 30,			December 31,
			2015			2014
ASSETS
Current assets:
	Cash and cash equivalents		$	560,190		$	531,374
	Accounts receivable, net			327,653			354,658
	Inventories			360,571			320,605
	Prepaid expenses and other current assets			86,000			93,691
	Deferred income taxes, net			38,509			38,873
		Total current assets		1,372,923			1,339,201
Property and equipment, net				260,763			247,094
Deferred income taxes, net				20,146			19,941
Goodwill				544,501			553,335
Intangible assets, net				122,344			133,212
Other assets				59,039			61,240
			$	2,379,716		$	2,354,023
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
	Accounts payable		$	121,605		$	98,173
	Deferred revenue			29,989			27,878
	Accrued payroll and related liabilities			53,740			62,065
	Accrued expenses			35,348			51,810
	Accrued income taxes			3,991			4,586
	Other current liabilities			50,634			50,045
	Current portion long-term debt			15,000			15,000
		Total current liabilities		310,307			309,557
Long-term debt				350,715			357,986
Deferred income taxes				13,365			13,905
Accrued income taxes				11,513			11,096
Other long-term liabilities				55,341			51,706
Commitments and contingencies
Shareholders' equity				1,638,475			1,609,773
			$	2,379,716		$	2,354,023

FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)(Unaudited)
			Three Months Ended								Six Months Ended
			June 30,								June 30,
			2015				2014				2015				2014
Cash flows from operating activities:
	Net earnings		$	50,500			$	44,758			$	98,410			$	74,652
	Income items not affecting cash:
		Depreciation and amortization		12,122				14,236				24,611				30,706
		Deferred income taxes		46				(591	)			142				915
		Stock-based compensation arrangements		8,181				8,447				12,938				17,203
	Other non-cash items			2,480				(2,109	)			(823	)			(3,599	)
	Changes in operating assets and liabilities			(24,397	)			5,848				(11,419	)			10,536
Cash provided by operating activities				48,932				70,589				123,859				130,413
Cash flows from investing activities:
	Additions to property and equipment, net			(17,614	)			(16,239	)			(30,753	)			(25,828	)
Cash used by investing activities				(17,614	)			(16,239	)			(30,753	)			(25,828	)
Cash flows from financing activities:
	Repayments of long term debt			(3,750	)			(3,750	)			(7,500	)			(7,500	)
	Repurchase of common stock			(31,426	)			(41,237	)			(31,426	)			(43,003	)
	Dividends paid			(15,397	)			(14,160	)			(30,774	)			(28,245	)
	Proceeds from shares issued pursuant to stock-based compensation plans			15,222				20,093				19,636				28,969
	Excess tax benefit of stock options exercised			3,262				3,860				4,041				6,559
	Other financing activities			(1	)			(264	)			(8	)			(14	)
Cash used by financing activities				(32,090	)			(35,458	)			(46,031	)			(43,234	)
Effect of exchange rate changes on cash				13,182				(914	)			(18,259	)			(1,754	)
Net increase in cash and cash equivalents				12,410				17,978				28,816				59,597
Cash and cash equivalents:
	Beginning of period			547,780				584,095				531,374				542,476
	End of period		$	560,190			$	602,073			$	560,190			$	602,073

FLIR SYSTEMS, INC.
REVENUE AND EARNINGS FROM OPERATIONS BY SEGMENT
(In thousands)(Unaudited)
		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2015				2014				2015				2014
REVENUE
	Surveillance	$	107,814			$	113,641			$	220,715			$	236,729
	Instruments		90,260				83,968				174,080				168,023
	OEM and Emerging Markets		46,285				51,124				86,120				99,039
	Maritime		52,030				55,230				103,002				107,805
	Security		60,048				44,735				98,854				74,045
	Detection		36,538				20,682				54,721				35,282
		$	392,975			$	369,380			$	737,492			$	720,923
EARNINGS (LOSS) FROM OPERATIONS
	Surveillance	$	26,378			$	22,634			$	56,546			$	45,900
	Instruments		28,341				21,037				56,404				41,486
	OEM and Emerging Markets		10,495				13,914				19,274				22,720
	Maritime		6,421				9,714				11,210				18,544
	Security		7,874				5,886				11,689				7,572
	Detection		9,380				3,152				12,059				1,353
	Other		(18,358	)			(16,973	)			(30,897	)			(35,761	)
		$	70,531			$	59,364			$	136,285			$	101,814