FLIR Systems Announces First Quarter 2016 Financial Results
First Quarter Revenue Growth of 10%; Firm-Order Backlog Increases to $613 Million
/EINPresswire.com/ -- WILSONVILLE, OR -- (Marketwired) -- 04/26/16 -- FLIR Systems, Inc. (NASDAQ: FLIR) today announced financial results for the first quarter ended March 31, 2016. First quarter 2016 revenue was $379.5 million, up 10% compared to first quarter 2015 revenue of $344.5 million. On a constant currency basis, first quarter 2016 revenue was up 12% versus the prior year. Operating income in the first quarter was $57.4 million, compared to $65.8 million in the first quarter of 2015. Profitability in comparison to the prior year was negatively impacted by product mix shifts, higher production costs, and unusually low corporate expenses in the prior year.
First quarter 2016 net income was $1.1 million, or $0.01 per diluted share, compared with net income of $47.9 million, or $0.34 per diluted share in the first quarter a year ago. Net income in the first quarter of 2016 was negatively impacted by the recording of $40 million of tax reserves related primarily to the previously disclosed ongoing dispute between the European Commission and the Belgium government over certain tax legislation. Excluding the tax reserve expense, earnings per diluted share were $0.30. Cash provided by operations in the first quarter was $44.9 million.
Revenue from the Surveillance segment was $124.2 million, an increase of 10% from the first quarter results last year. The Instruments segment contributed $79.4 million of revenue during the first quarter, down 5% from the prior year and down 3% on a constant currency basis. The Security segment recorded revenue of $47.1 million in the first quarter, up 21% from the prior year. FLIR's OEM & Emerging Markets segment had $47.8 million of revenue, an increase of 20% over the prior year. Revenue from the Maritime segment was $51.7 million, which was up 1% from the first quarter of 2015 and up 5% on a constant currency basis. The Detection segment contributed $29.3 million of revenue, an increase of 61% from the prior year.
FLIR's backlog of firm orders for delivery within the next twelve months was approximately $613 million as of March 31, 2016, an increase of $9 million during the quarter and an increase of $56 million, or 10%, compared to $557 million at the end of the first quarter of 2015.
"We are pleased with the growth we saw in revenue and backlog in the first quarter. Strength in our government businesses drove our backlog to its highest level since 2008," said Andy Teich, President and CEO of FLIR. "While our profitability was negatively impacted by product mix and increased manufacturing costs, we intend to improve our cost management as we move through the rest of the year. Our product development engine continues to deliver innovative solutions for improving overall safety, security, operational efficiency, and environmental protection. As demonstrated by our recent product introductions, our ability to increase the addressable markets in these areas continues to progress."
Revenue and Earnings Outlook for 2016
Based on financial results for the first three months of 2016 and the outlook for the remainder of the year, FLIR continues to expect revenue in 2016 to be in the range of $1.6 billion to $1.65 billion and net earnings to be in the range of $1.60 to $1.70 per diluted share. This guidance excludes the impact of discrete tax items.
Dividend Declaration
FLIR's Board of Directors has declared a quarterly cash dividend of $0.12 per share on FLIR common stock, payable June 3, 2016, to shareholders of record as of close of business on May 20, 2016.
Conference Call
FLIR has scheduled a conference call at 11:00 a.m. ET (8:00 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 section of www.FLIR.com/investor. A replay will be available after 2:00 p.m. ET (11:00 a.m. PT) at this same internet address. Summary first quarter and historical financial data may be accessed online from the Financial Info Database link under the Financials & Filings section 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
Statements in this release by Andy Teich and the statements in the section captioned "Revenue and Earnings Outlook for 2016" above are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words "believes," "plans," "anticipates," "expects," "estimates," or similar expressions) should be considered to be forward looking statements. 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, the impact of FLIR's continuing compliance with U.S. export control laws and regulations and similar laws and regulations, the timely receipt of any necessary 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 filings and reports filed with the Securities and Exchange Commission. 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
March 31,
----------------------------
2016 2015
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Revenue $ 379,472 $ 344,517
Cost of goods sold 201,782 168,620
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Gross profit 177,690 175,897
Operating expenses:
Research and development 36,411 34,774
Selling, general and administrative 83,902 75,369
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Total operating expenses 120,313 110,143
Earnings from operations 57,377 65,754
Interest expense 3,447 3,661
Interest income (260) (247)
Other income, net (1,430) (700)
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Earnings before income taxes 55,620 63,040
Income tax provision 54,495 15,130
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Net earnings $ 1,125 $ 47,910
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Earnings per share:
Basic $ 0.01 $ 0.34
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Diluted $ 0.01 $ 0.34
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Weighted average shares outstanding:
Basic 137,496 139,768
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Diluted 138,779 141,472
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FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)(Unaudited)
March 31, December 31,
2016 2015
-------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 510,613 $ 472,785
Accounts receivable, net 298,530 326,098
Inventories 398,870 393,092
Prepaid expenses and other current assets 82,217 95,539
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Total current assets 1,290,230 1,287,514
Property and equipment, net 275,148 272,629
Deferred income taxes, net 55,877 55,429
Goodwill 601,247 596,316
Intangible assets, net 138,639 141,302
Other assets 52,068 53,210
------------ -------------
$ 2,413,209 $ 2,406,400
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 106,394 $ 139,540
Deferred revenue 33,360 31,933
Accrued payroll and related liabilities 52,212 54,806
Accrued expenses 35,163 40,930
Accrued income taxes 3,227 201
Other current liabilities 39,984 53,241
Current portion long-term debt 264,809 264,694
------------- -------------
Total current liabilities 535,149 585,345
Long-term debt 90,000 93,750
Deferred income taxes 3,787 3,623
Accrued income taxes 53,629 10,457
Other long-term liabilities 62,615 63,710
Commitments and contingencies
Shareholders' equity 1,668,029 1,649,515
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$ 2,413,209 $ 2,406,400
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FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)(Unaudited)
Three Months Ended
March 31,
----------------------------
2016 2015
------------- -------------
Cash flows from operating activities:
Net earnings $ 1,125 $ 47,910
Income items not affecting cash:
Depreciation and amortization 13,939 12,489
Deferred income taxes (227) 96
Stock-based compensation arrangements 6,088 4,757
Other non-cash items 5,807 (3,303)
Changes in operating assets and liabilities 18,145 12,978
------------- -------------
Cash provided by operating activities 44,877 74,927
------------- -------------
Cash flows from investing activities:
Additions to property and equipment (9,992) (13,169)
Proceeds from sale of property and
equipment. 4,875 30
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Cash used by investing activities (5,117) (13,139)
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Cash flows from financing activities:
Repayments of long term debt (3,750) (3,750)
Dividends paid (16,507) (15,377)
Proceeds from shares issued pursuant
to stock-based compensation plans 3,989 4,414
Excess tax benefit of stock options
exercised 1,041 779
Other financing activities 3 (7)
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Cash used by financing activities (15,224) (13,941)
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Effect of exchange rate on cash 13,292 (31,441)
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Net increase in cash and cash equivalents 37,828 16,406
Cash and cash equivalents:
Beginning of period 472,785 531,374
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End of period $ 510,613 $ 547,780
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FLIR SYSTEMS, INC.
REVENUE AND EARNINGS FROM OPERATIONS BY SEGMENT
(In thousands)(Unaudited)
Three Months Ended
March 31,
----------------------------
2016 2015
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REVENUE
Surveillance $ 124,151 $ 112,901
Instruments 79,418 83,821
Security 47,061 38,806
OEM & Emerging Markets 47,845 39,834
Maritime 51,720 50,972
Detection 29,277 18,183
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$ 379,472 $ 344,517
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EARNINGS (LOSS) FROM OPERATIONS
Surveillance $ 35,240 $ 30,166
Instruments 19,496 28,063
Security (3,645) 3,816
OEM & Emerging Markets 10,032 8,779
Maritime 4,998 4,789
Detection 7,880 2,680
Other (16,624) (12,539)
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$ 57,377 $ 65,754
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