FLIR Systems Net Income Decreases (USA)

FLIR Systems, Inc. today announced financial results for the third quarter ended September 30, 2013.

Revenue was $358.1 million, up 8% compared to third quarter 2012 revenue of $332.2 million. Operating income in the third quarter decreased by 14% to $63.5 million and net income decreased 17% to $46.5 million. Third quarter earnings per diluted share were $0.32, compared to $0.37 during the third quarter a year ago. Cash provided by operations in the third quarter was $52.5 million, compared to $46.4 million in the third quarter of 2012.

Revenue from FLIR’s Commercial Systems division increased 17% from the third quarter of 2012, to $212.9 million. Within the Commercial Systems division, revenue from the Thermal Vision and Measurement segment was $177.1 million, an increase of 18% from the third quarter results last year, due to the addition of the Lorex and Traficon businesses. The Raymarine segment contributed $35.8 million of revenue during the third quarter, up 13% from the prior year, driven by successful new product introductions.

Revenue from FLIR’s Government Systems division decreased 4% from the third quarter of 2012, to $145.2 million. Within the Government Systems division, revenue from the Surveillance segment was $103 million, a decrease of 11% from the third quarter of 2012, impacted negatively by weak book-and-ship order flow from the U.S. Government. Revenue from the Detection segment was $13.1 million, a decrease of 15% compared to the third quarter of 2012 as the business continues its strategy to reduce contract R&D activity. The Integrated Systems segment contributed $29.2 million of revenue during the third quarter, an increase of 48% from the prior year, due to deliveries under the MSC contract during the third quarter of 2013.

The Company’s backlog of firm orders for delivery within the next twelve months was approximately $523 million as of September 30, 2013, a decrease of $5 million during the quarter and $42 million from a year ago. Backlog in the Government Systems division was $334 million, decreasing $5 million during the quarter and $58 million from the prior year. Backlog in the Commercial Systems division was $189 million, a decrease of $1 million during the quarter but an increase of $16 million over the prior year.

“Results for the third quarter were disappointing; however, with the exception of our OEM cores business, our Commercial Systems business grew mid-single digits with each of the major geographic regions showing growth for the first time in two years. We were also pleased with the performance of our recently acquired businesses, which delivered good growth and profitability for the quarter,” noted Andy Teich, President and CEO of FLIR. “The weakness in order flow from U.S. Government-funded customers affected our book-and-ship business in the third quarter and, more importantly, the outlook for the fourth quarter. In addition to our strategic realignment plan, we have initiated changes to our cost structure to better operate under the assumption of a challenging domestic government procurement environment. We expect to see significant productivity and profitability gains from these actions in 2014 and beyond.”

Press Release, October 24, 2013


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