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Exhibit 99.1
Company contact:
FLIR Systems, Inc.
Scott Hibbs
(503) 372-6127
www.flir.com
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FLIR Systems Announces First Quarter Results
Cost Reduction Initiatives Also Announced
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PORTLAND, Ore. - June 30, 2000 -- FLIR Systems, Inc. (Nasdaq: FLIRE) today
reported a net loss for the first quarter ended March 31, 2000 of $5.5 million,
or $0.38 per share, on revenue of $35.8 million. The net loss includes a charge
of $0.9 million, or $0.06 per share, for the write-off of certain assets related
to the Company's merger with Inframetrics, Inc.
In the first quarter of 1999 the company reported a net loss of $26.9
million, or $1.90 per share, on revenue of $38.8 million. Results for the first
quarter of 1999 included charges associated with the merger with Inframetrics,
Inc. of $23.8 million, or $1.68 per share.
The Company also announced that it has implemented cost reduction
initiatives that are expected to yield annualized cost savings of approximately
$10 million beginning in the third quarter of 2000. These initiatives include a
reduction in employees of approximately 40, leaving about 775 employees
worldwide once the program is fully implemented. The Company expects to record
a pre-tax charge of approximately $0.5 million in the second quarter of 2000
associated with implementing the employee reduction program.
"The first quarter is historically FLIR's weakest quarter of the year, and
this year was no exception," said John Hart, acting President and Chief
Executive Officer of FLIR Systems, Inc. "However, based on our strong sales
order backlog, we expect to report increasing quarterly revenues during the
balance of 2000. Combined with the cost reduction initiatives, this should lead
to improved bottom-line performance for the balance of the year."
Backlog was approximately $74 million at March 31, 2000, of which
approximately 80% is scheduled for delivery in 2000. Backlog at December 31,
1999 was $55 million.
A change of the Company's independent auditors and the additional time
necessary to complete their first quarterly review for the company contributed
to the delay in reporting first quarter results. The company expects that all
financial results in future quarters will be released and filed in a timely
manner as prescribed by the Securities and Exchange Commission and NASDAQ.
Business Outlook
The following statements are based on current expectations. These
statements are forward-looking, and actual results may differ materially.
The Company expects sales for the full year 2000 to be in the range of
$205-215 million, an increase of 10-15% compared to 1999. Gross margin on sales
for the year is expected to be in the historical range of 54-56%. Gross margin
for the first quarter of 2000 was 55%. Sales and gross margin can vary
materially from quarter to quarter depending upon a variety of factors including
government contracting cycles, the mix of products sold, the mix between
international and domestic sales, the rate of production and the ability to
maintain sales prices in a competitive environment.
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FLIR Systems Announces First Quarter Results
June 30, 2000
Page Two
R&D expense, in absolute dollars and as a percentage of revenue, is
expected to decline in 2000. Because of the seasonal pattern of sales, R&D
expense as a percentage of revenue is typically higher in the first quarter and
declines during the year. R&D expense can vary materially from expectations for
a variety of reasons including the receipt of funded development contracts, the
costs of recruiting and retaining engineers and the requirement to use outside
contractors to supplement internal resources.
Selling and other operating expenses, in absolute dollars and as a
percentage of sales, are expected to decline in 2000. Due to the seasonal
pattern of sales, selling and other operating expenses as a percentage of
revenue are typically higher in the first quarter and decline during the year.
These expenses can vary materially from expectations for a variety of reasons
including increased commissions as a result of sales by independent
representatives, the ability to collect on receivables, capital expenditures and
the cost of recruiting and retaining employees.
Forward-Looking Statements
This release contains statements, (including statements set forth under
"Business Outlook" above, statements regarding the company's expectations for
revenue and earnings for the company's commercial and government business
segments for the remainder of 2000, and statements regarding expected cost
savings attributable to cost reduction initiatives) that are forward-looking
statements within the meaning of the Securities Litigation Reform Act of 1995
which are based on current expectations, estimates and projections about the
company's business based, in part, on assumptions made by management. 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 those
described above and the following: changes in demand for the company's
products, product mix, the timing of customer orders and deliveries, the impact
of competitive products and pricing, constraints on supplies of critical
components, excess or shortage of production capacity, actual purchases under
agreements, the amount and availability of government procurement funds,
difficulties encountered in the integration of acquired businesses and other
risks discussed from time to time in the company'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 the company does not undertake
any obligation to update any forward-looking statement to reflect events or
circumstances after the date of this release.
About FLIR Systems
FLIR Systems, Inc. is a world leader in the design, manufacture and
marketing of thermal imaging and broadcast camera systems for a wide variety of
commercial and government applications including condition monitoring, research
and development, manufacturing process control, airborne observation and
broadcast, search and rescue, drug interdiction, surveillance and
reconnaissance, navigation safety, border and maritime patrol, environmental
monitoring and ground-based security. Visit the company's web site at
www.FLIR.com
(tables attached)
#3452
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FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------
<S> <C> <C>
2000 1999
--------- ---------
Revenue:
Commercial........................................ $ 25,478 $ 27,986
Government........................................ 10,350 10,835
-------- --------
35,828 38,821
Cost of goods sold.................................... 16,178 38,827
Research and development.............................. 6,921 6,977
Selling and other operating costs..................... 16,845 15,057
Combination costs..................................... 1,217 3,654
-------- --------
41,161 64,515
Loss from operations.......................... (5,333) (25,694)
Interest expense...................................... 2,092 1,226
Other income - net.................................... (82) (18)
------- --------
Loss before income taxes...................... (7,343) (26,902)
Income tax benefit.................................... (1,836) --
------- -------
Net loss.............................................. $ (5,507) $(26,902)
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Net loss per share:
Basic............................................... $ (0.38) $ (1.90)
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Diluted............................................. $ (0.38) $ (1.90)
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Weighted average shares outstanding:
Basic............................................... 14,395 14,136
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Diluted............................................. 14,395 14,136
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</TABLE>
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FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET
(In thousands, except share amounts)
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
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(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents......................... $ 8,430 $ 4,255
Accounts receivable, net.......................... 46,429 57,777
Inventories....................................... 72,603 64,374
Prepaid expenses.................................. 4,921 6,040
Deferred income taxes............................. 9,887 7,216
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Total current assets.......................... 142,270 139,662
Property and equipment, net........................... 20,682 20,796
Deferred income taxes, net............................ 16,499 16,499
Intangible assets, net................................ 17,592 17,932
Other assets.......................................... 1,774 1,829
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$198,817 $196,718
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable..................................... $ 95,019 $ 81,247
Accounts payable.................................. 15,277 22,128
Accrued payroll and other liabilities............. 22,204 21,474
Accrued income taxes.............................. 3,179 3,207
Current portion of long-term debt................. 1,033 1,084
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Total current liabilities..................... 136,712 129,140
Long-term debt........................................ 1,296 1,497
Pension liability..................................... 3,849 3,879
Shareholders' equity.................................. 56,960 62,202
$198,817 $196,718
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</TABLE>
