25 Apr 13. FLIR Systems, Inc. (NASDAQ: FLIR) announced financial results for the first quarter ended March 31, 2013. Revenue was $348.6m, largely unchanged compared to first quarter 2012 revenue of $348.5m. Operating income in the first quarter was $69.1m, compared to $68.3m in the first quarter of 2012. First quarter 2013 net income was $51.6m, or $0.35 per diluted share, compared with net income of $48.1m, or $0.31 per diluted share in the first quarter a year ago. Cash provided by operations in the first quarter was $62.0m. During the quarter, the Company repurchased 3.8m shares of its common stock at an average price of $26.22 per share.
Revenue from the Company’s Commercial Systems division increased 5% from the first quarter of 2012, to $211.8m. Within the Commercial Systems division, revenue from the Thermal Vision and Measurement segment was $167.4m, an increase of 7% from the first quarter results last year. The Raymarine segment contributed $44.4m of revenue during the first quarter, down 5% from the prior year. Revenue from the Company’s Government Systems division decreased 6% from the first quarter of 2012, to $136.8m. Within the Government Systems division, revenue from the Surveillance segment was $110.2m, a decrease of 4% from the first quarter of 2012. Revenue from the Detection segment was $12.5m, a decrease of 35% compared to the first quarter of 2012, and the Integrated Systems segment contributed $14.0m of revenue during the first quarter, an increase of 15% from the prior year. The Company’s backlog of firm orders for delivery within the next twelve months was approximately $505m as of March 31, 2013, a decrease of $15m during the quarter and an increase of $48m over the prior year. Backlog in the Government Systems division was $334m, decreasing $22m during the quarter and increasing $22m over the prior year. Backlog in the Commercial Systems division was $172m, increasing $8m during the quarter and $27m over the prior year.
“First quarter results were consistent with our expectations for how the year would begin,” noted Earl Lewis, President and CEO of FLIR. “Despite the difficult funding and macro environment our customers are experiencing, both of our divisions have meaningfully higher backlog than they did a year ago and our focus on organizational efficiency and cost control resulted in increased margins and net earnings growth. In addition, we continue to generate operating cash at a rate that significantly exceeds net income, which will allow us to generate strong returns for our shareholders.”
Revenue and Earnings Outlook for 2013
Based on financial results for the first three months of 2013 and the outlook for the remainder of the year, FLIR is reaffirming its outlook for revenue and earnings per share for the full year 2013. Management expects revenue for 2013 to be in the range of $1.5bn to $1.6bn and net earnings to be in the range of $1.56 to $1.66 per diluted share.
Management Succession
Mr. Lewis has announced his intention to retire as President and Chief Executive Officer of the Company effective May 19, 2013. He will assume a senior advisor role to the Company to aid in the transition and will remain Chairman of the Board of Directors of FLIR. Mr. Andrew C. Teich, currently President of the Company’s Commercial Systems division, will assume the positions of President and Chief Executive Officer of FLIR upon Mr. Lewis’s retirement. “This is the culmination of a process that began more than two years ago with three of my direct reports completing the Harvard Advanced Management Program,” said Mr. Lewis. “Approximately a year ago, we formed a special committee of the Board of Directors and hired outside consultants to begin the difficult process of selecting one person from among three excellent internal candidates in Bill Sundermeier, Tony Trunzo, and Andy. The difficulty in making a final decision was a result of the Board’s strong belief that all three were highly competent and