<PAGE>
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
__________________
FORM 10-Q
__________________
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934.
FOR THE TRANSITION PERIOD FROM _______________ TO _________________
Commission file number 0-21918
FLIR SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
OREGON 93-0708501
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
16505 S.W. 72ND AVENUE, PORTLAND, OREGON 97224
(Address of principal executive offices) (Zip Code)
(503) 684-3731
(Registrant's telephone number, including area code)
__________________
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [_].
At September 30, 1997, there were 5,559,724 shares of the Registrant's common
stock, $0.01, par value, outstanding.
===============================================================================
<PAGE>
FLIR SYSTEMS, INC.
INDEX
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
<S> <C> <C>
Item 1. Financial Statements
Consolidated Statement of Operations -- Three Months and
Nine Months Ended September 30, 1997 and 1996........... 3
Consolidated Balance Sheet -- September 30, 1997 and
December 31, 1996....................................... 4
Consolidated Statement of Cash Flows -- Nine Months
Ended September 30, 1997 and 1996....................... 5
Notes to the Consolidated Financial Statements.......... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................... 8
PART II. OTHER INFORMATION
Item 2. Changes in Securities................................... 12
Item 6. Exhibits and Reports on Form 8-K........................ 12
Signatures.............................................. 12
</TABLE>
2
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- -----------------------
1997 1996 1997 1996
-------- -------- -------- --------
Revenues:
<S> <C> <C> <C> <C>
Government......................... $12,946 $11,913 $32,325 $28,383
Commercial......................... 10,969 6,025 27,350 15,920
------- ------- ------- -------
23,915 17,938 59,675 44,303
Cost of goods sold..................... 11,130 8,312 27,654 20,942
Research and development............... 3,187 2,272 8,532 6,555
Selling and other operating costs...... 5,930 4,390 16,889 12,165
------- ------- ------- -------
20,247 14,974 53,075 39,662
Earnings from operations....... 3,668 2,964 6,600 4,641
Interest income........................ 32 8 52 37
Interest expense and other............. (533) (259) (1,405) (484)
------ ------- ------- -------
Earnings before income taxes... 3,167 2,713 5,247 4,194
Provision for income taxes............. 730 592 1,269 911
------- ------- ------- -------
Net earnings........................... $ 2,437 $ 2,121 $ 3,978 $ 3,283
======= ======= ======= =======
Net earnings per share................. $ 0.41 $ 0.38 $ 0.68 $ 0.59
======= ======= ======= =======
Weighted average number of common
shares and equivalents outstanding.... 5,980 5,620 5,856 5,579
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements
3
<PAGE>
FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET
(in thousands, except share amounts)
<TABLE>
<CAPTION>
ASSETS
September 30, December 31,
1997 1996
------------- ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents............................... $ 2,535 $ 775
Accounts receivable..................................... 44,023 28,311
Inventories............................................. 34,130 33,513
Prepaid expenses........................................ 1,251 1,551
------- -------
Total current assets................................ 81,939 64,150
Property and equipment...................................... 10,368 7,137
Software development costs.................................. 1,026 799
Deferred income taxes....................................... 2,200 2,200
Other assets................................................ 815 818
------- -------
$96,348 $75,104
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable........................................... $21,306 $ 6,365
Accounts payable........................................ 5,778 7,628
Accounts payable to related parties..................... 876 128
Accrued payroll and other liabilities................... 3,824 3,389
Accrued income taxes.................................... 2,104 1,073
Current portion of long-term debt....................... 1,832 1,377
------- -------
Total current liabilities........................... 35,720 19,960
Long-term debt.............................................. 5,477 5,173
Commitments and contingencies............................... -- --
Shareholders' equity:
Preferred stock, $0.01 par value, 10,000,000 shares
Authorized; no shares issued at September 30, 1997,
and December 31, 1996................................. -- --
Common stock, $0.01 par value, 30,000,000 shares
authorized, 5,559,724 and 5,387,483 shares issued at
September 30, 1997, and December 31, 1996,
respectively.......................................... 56 54
Additional paid-in capital.............................. 42,971 41,833
Retained earnings....................................... 12,235 8,257
Cumulative foreign translation adjustment............... (111) (173)
------- -------
Total shareholders' equity.......................... 55,151 49,971
------- -------
$96,348 $75,104
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements
4
<PAGE>
FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1997 1996
---------- ----------
<S> <C> <C>
Cash used by operators:
Net earnings.............................................. $ 3,978 $ 3,283
Income charges not affecting cash:
Depreciation.......................................... 1,971 1,436
Amortization.......................................... 389 306
Disposals and write-offs of property and equipment.... 185 257
Deferred income taxes................................. -- --
Changes in certain working capital components:
Increase in accounts receivable....................... (15,712) (8,116)
Increase in inventories............................... (617) (6,141)
Decrease (increase) in prepaid expenses............... 300 (239)
Decrease (increase) in other assets................... 3 (154)
(Decrease) increase in accounts payable............... (1,850) 2,709
Increase (decrease) in accounts payable to related 748 (181)
parties..............................................
Increase (decrease) in accrued payroll and other 435 (1,593)
liabilities..........................................
Increase in accrued income taxes...................... 1,031 323
-------- --------
Cash used by operating activities......................... (9,139) (8,110)
-------- --------
Cash used by investing activities:
Additions to property and equipment....................... (5,455) (3,313)
Software development costs................................ (548) (468)
-------- --------
Cash used by investing activities......................... (6,003) (3,781)
-------- --------
Cash provided by financing activities:
Net increase in notes payable............................. 14,941 5,229
Proceeds from long term debt.............................. 1,728 5,816
Repayment of long term debt including current portion..... (969) (564)
Proceeds from exercise of stock options................... 1,140 438
-------- --------
Cash provided by financing activities..................... 16,840 10,919
-------- --------
Effect of exchange rate changes on cash....................... 62 --
-------- --------
Net increase (decrease) in cash and cash equivalents.......... 1,760 (972)
Cash and cash equivalents, beginning of period................ 775 1,154
-------- --------
Cash and cash equivalents, end of period...................... $ 2,535 $ 182
======== =======
</TABLE>
The accompanying notes are an integral part of these financial statements
5
<PAGE>
FLIR SYSTEMS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1 -- BASIS OF PRESENTATION:
The accompanying consolidated financial statements are unaudited and have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission. In the opinion of management, these statements have
been prepared on the same basis as the audited consolidated financial statements
and include all adjustments, consisting of only normal recurring adjustments,
necessary for a fair presentation of the consolidated financial position and
results of operations for the interim periods. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. These consolidated financial statements
should be read in conjunction with the Company's audited financial statements
and the notes thereto for the year ended December 31, 1996.
The accompanying financial statements include the accounts of FLIR Systems, Inc.
and its subsidiaries. All intercompany accounts and transactions have been
eliminated. The results of the interim periods are not necessarily indicative
of the results for the entire year.
Certain reclassifications have been made to the prior year's data to conform
with the current year's presentation. These reclassifications had no impact on
previously reported results of operations or shareholders' equity.
NOTE 2 -- REVENUE RECOGNITION:
Revenue is recognized when products are shipped or when services are performed,
except for certain long-term contracts which are recorded on the percentage-of-
completion method. The percentage-of-completion method is used for research
and development contracts and for production contracts which require significant
amounts of initial engineering and development costs. The percentage-of-
completion is determined by relating the actual costs incurred to date to total
costs to complete the respective contract.
NOTE 3 -- NET EARNINGS PER SHARE:
Net earnings per share are based on the weighted average number of shares of
common stock and common stock equivalents outstanding during the periods,
computed using the treasury stock method for stock options. The Company will
adopt Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
in 1997. The effect of the adoption of such pronouncement is expected to be
immaterial to the financial statements taken as a whole.
6
<PAGE>
NOTE 4 -- INVENTORIES:
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
(Unaudited)
<S> <C> <C>
Materials.......................................... $22,019 $23,855
Work-in-progress................................... 11,391 8,171
Finished goods..................................... 1,712 1,494
------- -------
35,122 33,520
Less -- progress payments received from
Customers.............................. (992) (7)
------- -------
$34,130 $33,513
======= =======
</TABLE>
NOTE 5 -- CHANGES IN SHAREHOLDERS' EQUITY:
Changes in Shareholders' Equity consist of the following (in thousands):
<TABLE>
<CAPTION>
Cumulative
Additional Foreign
Preferred Common Paid-in Retained Translation
Stock Stock Capital Earnings Adjustment Total
--------- ------ ---------- -------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996.............. $ -- $54 $41,833 $ 8,257 $(173) $49,971
Common stock options exercised.......... -- 2 1,138 -- -- 1,140
Net earnings for the nine month period.. -- -- -- 3,978 -- 3,978
Foreign translation adjustment.......... -- -- -- -- 62 62
----- --- ------- ------- ----- -------
Balance, September 30, 1997............ -- $56 $42,971 $12,235 $(111) $55,151
===== === ======= ======= ===== =======
</TABLE>
NOTE 6 -- SUBSEQUENT EVENT:
On October 6, 1997, the Company entered into a Combination Agreement with
Spectra-Physics AB and certain of its affiliates. The Combination Agreement
provides for the acquisition by FLIR of all the outstanding shares of capital
stock of AGEMA Infrared Systems AB, a corporation organized under the laws of
Sweden, AGEMA Infrared Systems Limited, a corporation organized under the laws
of the United Kingdom, AGEMA Infrared Systems, Ltd., a corporation organized
under the laws of Canada and AGEMA Infrared Systems, Inc., a Delaware
corporation, in exchange for 4,162,000 shares of the Company's common stock.
This transaction will be accounted for as a purchase for accounting and
financial reporting purposes. A special meeting of shareholders is scheduled for
December 1, 1997 to consider and vote upon the proposed transaction and, subject
to shareholder approval and certain other conditions, the transaction is
expected to close in early December.
The Company anticipates recording a one-time, non-cash charge in the fourth
quarter related to the write-off of in process research and development recorded
as part of the transaction and other transaction costs. Such charge off is
expected to aggregate approximately $36.0 million, net of taxes.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS:
OVERALL. Net earnings for the three months ended September 30, 1997
increased 14.9%, from $2.1 million (or $0.38 per share) in the third quarter of
1996 to $2.4 million (or $0.41 per share) in the third quarter of 1997. Net
earnings increased 21.2%, from $3.3 million (or $0.59 per share) for the nine
months ended September 30, 1996 to $4.0 million (or $0.68 per share) for the
nine months ended September 30, 1997. The increase in net earnings was
principally due to the significant increase in sales of the Company's products
to commercial customers, primarily the UltraMedia(TM) and the Prism DS(TM).
REVENUES. The Company's revenue for the three months ended September
30, 1997 increased 33.3%, from $17.9 million in the third quarter of 1996 to
$23.9 million in the third quarter of 1997. Revenue from the sale of the
Company's products to governmental customers increased 8.7%, from $11.9 million
in the third quarter of 1996 to $12.9 million in the third quarter of 1997. This
increase was primarily due to the increased deliveries of SAFIRE night vision
systems to a variety of domestic and international customers. Revenue from the
sale of the Company's products to commercial customers continued to show strong
growth by increasing 82.1%, from $6.0 million in the third quarter of 1996 to
$11.0 million in the third quarter of 1997. This improvement was principally
attributable to the continued strong sales of UltraMedia(TM) for the broadcast
and entertainment markets, further increases in production and delivery of the
Prism DS(TM) and increased international sales.
Revenue for the nine months ended September 30, 1997 increased 34.7%, from $44.3
million in the first nine months of 1996 to $59.7 million for the first nine
months of 1997. Revenue from the sale the Company's products to governmental
customers increased 13.9%, from $28.4 million in the first nine months of 1996
to $32.3 million in the first nine months of 1997 primarily due to increased
deliveries of the SAFIRE night vision system. Revenue from the sale of the
Company's products to commercial customers increased 71.8%, from $15.9 million
in the first nine months of 1996 to $27.4 million in the first nine months of
1997. This improvement was principally attributable to the inclusion of a full
nine months of revenue from the sale of the UltraMedia(TM) product in 1997
compared to only six months in 1996, as the UltraMedia(TM) was introduced in
April of 1996, and the increased production and deliveries of the Prism DS(TM).
Revenue from international sales increased as a percentage of total revenue from
approximately 27.7% to approximately 52.8% for the quarters ended September 30,
1996 and 1997, respectively. For the first nine months of 1997, international
sales accounted for approximately 47.1% of the Company's revenue. This
represents an increase from the 31.7% experienced in the first nine months of
1996 primarily due to decreased deliveries to U.S. Government customers,
principally the U.S. Marine Corps. The Company anticipates that the revenues
from international sales as a percentage of total revenue will continue to
comprise a significant percentage of revenues but may vary modestly from year to
year.
GROSS PROFIT. As a percentage of revenue, gross profit decreased
slightly from 53.7% in the third quarter of 1996 to 53.5% in the third quarter
of 1997 and increased slightly from 52.7% for the first nine months of 1996 to
53.7% for the first nine months of 1997. The
8
<PAGE>
relatively consistent gross margin in the third quarter of 1997 was primarily
due to decreased sales to U.S Governmental customers which typically have lower
margins than non-governmental customers and the increased proportion of higher
margin international sales, offset by the increased proportion of revenues from
commercial products which typically have a slightly lower margin than the
products sold to governmental customers. The increase for the nine months ended
September 30, 1997 was primarily due to the increased proportion of higher
margin international sales. Gross profit percentages are affected by a variety
of factors, including the mix of domestic and international night vision and
industrial imaging sales, the more competitive nature of the commercial imaging
market, and the impact of competitive bids for significant government contracts.
RESEARCH AND DEVELOPMENT. Research and development expense increased
40.3%, from $2.3 million for the third quarter of 1996 to $3.2 million for the
third quarter of 1997 and increased 30.2%, from $6.6 million for the first nine
months of 1996 to $8.5 million for the first nine months of 1997. As a
percentage of revenue, research and development expense increased from 12.7% to
13.3% for the three months ended September 30, 1996 and 1997, respectively, and
decreased slightly from 14.8% for the first nine months of 1996 to 14.3% for the
first nine months of 1997. The increases in research and development expense, in
absolute dollar terms, were attributable to increased research and development
activities related to existing product enhancements and increased activity
related to scheduled development and introduction of new products in 1998. While
the Company expects the absolute dollar amount of research and development to
continue to increase, research and development expense as a percentage of total
revenue should continue to decline as revenues increase.
SELLING AND OTHER OPERATING COSTS. Selling and other operating costs
for the quarter increased 35.1%, from $4.4 million for the third quarter of 1996
to $5.9 million for the third quarter of 1997 and increased 38.8%, from $12.2
million for the first nine months of 1996 to $16.9 million for the first nine
months of 1997. Selling and other operating costs increased as a percentage of
revenues from 24.5% for the third quarter of 1996 to 24.8% for the third quarter
of 1997 and increased from 27.5% for the first nine months of 1996 to 28.3% for
the first nine months of 1997. The increases in absolute dollar terms were
primarily due to costs associated with the increase in international revenues,
particularly commissions, for the quarter and to increased sales and marketing
personnel as the Company continues to expand and strengthen the direct sales and
marketing staff at both FSI and Optimas. These efforts have directly resulted in
increased sales of commercial products both domestically and internationally.
9
<PAGE>
INTEREST EXPENSE AND OTHER. Interest expense and other includes
interest on short term and long term borrowings, costs related to capital lease
obligations, and miscellaneous charges. Interest expense and other for the
quarter increased 105.8%, from $259,000 in the third quarter of 1996 to $533,000
in the third quarter of 1997 and increased 190.3%, from $484,000 in the first
nine months of 1996 to $1.4 million for the first nine months of 1997. This
increase was due to the increased usage of the Company's line of credit
discussed in Liquidity and Capital Resources below.
INCOME TAXES. The Company's effective income tax rates for the
quarters ended September 30, 1997 and 1996 were 23.1% and 21.8%, respectively,
and for the nine month periods ended September 30, 1997 and 1996 were 24.2% and
21.7%, respectively. The increase in the effective tax rate is primarily due to
the fact that the Company has utilized all of its internally generated net
operating loss carryforwards. The effective tax rates remain substantially
below the statutory rate due to utilization of a portion of the Company's
acquired net operating loss carryforwards, utilization of various tax credits,
and benefits from the favorable tax treatment of international revenue.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1997, the Company had short-term borrowings net of cash on hand
of $18.8 million compared with $5.6 million at December 31, 1996 and $11.7
million at June 30, 1997. Additionally, during the quarter, the Company
increased its available line of credit from $14.0 million to $25.0 million to
cover its short-term cash needs. The increased use of cash during the third
quarter is consistent with the prior year and is primarily due to the build up
of accounts receivable and continued high levels of inventories discussed below.
At September 30, 1997, the Company had inventories on hand of $34.1 million
compared to $33.5 million at December 31, 1996 and $33.9 million at June 30,
1997. Consistent with the prior quarter, the efforts to reduce inventory levels
for existing product lines were partially offset by the increase in inventory
needed to support deliveries of the Company's new product lines, including the
SeekIR(TM), the Tracer(TM), the UltraMedia(TM) and the UltraMedia RS(TM) as well
as inventory to support new products to be introduced in 1998. Further, because
of the extremely long lead times for many of the most expensive components, it
is necessary to have inventory on hand to meet the required delivery schedule.
The Company maintains levels of inventories sufficient to satisfy backlog which
the Company considers to be firm and to respond to short term delivery
requirements for a majority of its products. Management believes its ability to
provide prompt deliveries gives it a competitive advantage for certain sales. It
is expected that the current inventory levels will be maintained or decrease
slightly as efforts to reduce inventory levels for existing products continue.
At September 30, 1997, the Company had accounts receivable in the amount of
$44.0 million compared to $28.3 million at December 31, 1996 and $35.6 million
at June 30, 1997. The increase in accounts receivable is primarily due to the
significant level of shipments in the last month of the quarter primarily to
international customers and domestic governmental customers. The Company
generally experiences long collection cycles due to a variety of factors,
including payment terms required by U.S. and foreign governmental customers as
well as payment terms for companies that integrate the Company's products into
aircraft for sale to ultimate users.
The Company has available a $25.0 million line of credit which bears interest at
LIBOR plus 1.75% (7.375% at September 30, 1997) and is collateralized by all
receivables and inventories of the
10
<PAGE>
Company. At September 30, 1997, the Company had a $21.3 million balance
outstanding on this line.
While the use of the credit facility will vary significantly and is heavily
dependent upon the timing of collection of significant receivables, the Company
believes that its existing cash, available credit facilities together with the
scheduled payments from existing customers will be sufficient to meet its cash
requirements for the foreseeable future.
FORWARD-LOOKING STATEMENTS
This Management's Discussion and Analysis of Financial Condition and Results of
Operations contain forward-looking statements within the meaning of the
Securities Litigation Reform Act of 1995 that are based on current expectations,
estimates and projections about the Company's business, management's beliefs and
assumptions made by management. Words such as "expects," "anticipates,"
"intends," "plans," "believes," "sees," "estimates" and variations of such words
and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and
involve risks, uncertainties and assumptions 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, but not limited to, those discussed in this Management's
Discussion and Analysis of Financial Condition and Results of Operations, as
well as those discussed from time to time in the Company's Securities and
Exchange Commission fillings 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.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
During the quarter, the Company sold securities without registration under the
Securities Act of 1933, as amended (the "Securities Act") upon the exercise of
certain stock options granted under the Company's 1984 Stock Incentive Plan. An
aggregate of 13,800 shares of Common Stock were issued at exercise prices
ranging from $1.625 to $5.225. These transactions were effected in reliance
upon the exemption from registration under the Securities Act provided by Rule
701 promulgated by the Securities and Exchange Commission pursuant to authority
granted under Section 3 (b) of the Securities Act.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
11.0 Computation of Net Income Per Share
27.1 Financial Data Schedule
(b) No reports on Form 8-K were filed during the three months ended
September 30, 1997.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FLIR SYSTEMS, INC.
Date November 14, 1997 /s/ J. Mark Samper
------------------------- -------------------------------------
J. Mark Samper
Vice President of Finance and
Chief Financial Officer and Secretary
(Principal Accounting and Financial
Officer and Duly Authorized Officer)
12
<PAGE>
EXHIBIT 11.0
FLIR SYSTEMS, INC.
COMPUTATION OF NET EARNINGS PER SHARE
(In thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1997 1996 1997 1996
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net earnings...................................... $2,437 $2,121 $3,978 $3,283
====== ====== ====== ======
Weighted average number of common shares
outstanding..................................... 5,542 5,336 5,485 5,320
Assumed exercise of stock options net of share
assumed reacquired under the treasury stock
method.......................................... 438 284 371 259
------ ------ ------ ------
5,980 5,620 5,856 5,579
====== ====== ====== ======
Earnings per share................................ $ 0.41 $ 0.38 $ 0.68 $ 0.59
====== ====== ====== ======
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0000354908
<NAME> FLIR SYSTEMS, INC.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 2,535
<SECURITIES> 0
<RECEIVABLES> 45,588
<ALLOWANCES> 1,565
<INVENTORY> 34,130
<CURRENT-ASSETS> 81,939
<PP&E> 18,860
<DEPRECIATION> 8,492
<TOTAL-ASSETS> 96,348
<CURRENT-LIABILITIES> 35,720
<BONDS> 5,477
0
0
<COMMON> 56
<OTHER-SE> 55,095
<TOTAL-LIABILITY-AND-EQUITY> 96,348
<SALES> 59,675
<TOTAL-REVENUES> 59,675
<CGS> 27,654
<TOTAL-COSTS> 27,654
<OTHER-EXPENSES> 25,421
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,353
<INCOME-PRETAX> 5,247
<INCOME-TAX> 1,269
<INCOME-CONTINUING> 3,978
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,978
<EPS-PRIMARY> .68
<EPS-DILUTED> .68
</TABLE>
