FLIR Systems announces third quarter 2015 financial results

FLIR Systems announced financial results for the third quarter ended September 30, 2015. Revenue was $381.9 million, up 2% compared to third quarter 2014 revenue of US$375.4 million. On a constant-currency basis, revenue for the third quarter was up 6% compared to the prior year, as foreign currency exchange fluctuations negatively impacted revenue by approximately $14 million. Operating income in the third quarter was $76 million, compared to $70 million in the third quarter of 2014. Operating income was impacted by pretax charges related to previously-announced restructuring initiatives of $0.3 million in the third quarter of 2015 and $4.1 million in the third quarter of 2014.

Third quarter 2015 net income was $73.1 million, or $0.52 per diluted share, compared with net income of $52.9 million, or $0.37 per diluted share in the third quarter a year ago. Net income for the third quarter of 2015 included a discrete tax benefit of $17.4 million, or approximately $0.12 per diluted share, related to the release of a previously recorded tax reserve. Cash provided by operations in the third quarter of 2015 was $73.6 million, an increase of 123% compared to the prior year.

The Surveillance segment contributed $131.6 million of revenue during the third quarter, increasing 5% over the prior year. The Instruments segment had $74.8 million of revenue, down 9% from the prior year, and was negatively impacted by foreign currency exchange fluctuations by approximately $6 million, resulting in a 3% decline on a constant currency basis. FLIR's OEM & Emerging Markets segment recorded revenue of $51.4 million in the third quarter, up 3% over the prior year. Revenue from the Maritime segment was $38.9 million, down 13% from the third quarter of 2014, and was negatively impacted by foreign currency exchange fluctuations by approximately $4 million, resulting in a 4% decline on a constant currency basis. Security segment revenue was $59.3 million, an increase of 22% over the third quarter results last year. The Detection segment contributed $25.8 million of revenue, an increase of 7% from the prior year.

FLIR's backlog of firm orders for delivery within the next twelve months was approximately $568 million as of September 30, 2015, an increase of $31 million, or 6%, during the quarter and a decrease of $12 million, or 2%, from the third quarter of 2014.

"In the third quarter we saw constant currency revenue growth of 6%, improved our operating profitability, significantly improved our cash flow, and introduced several new market-defining products, however, the global economic environment created a headwind for our overall performance," said Andy Teich, President and CEO of FLIR. "Our proven ability to advance our sensing technologies, rapidly develop new products, and address new market opportunities enables our mission of being the 'World's Sixth Sense.' We have confidence in our ability to create long-term shareholder value given our focus on innovation, product differentiation, and market positioning."

Revenue and Earnings Outlook for 2015
Based on financial results for the first nine months of 2015 and the outlook for the remainder of the year, FLIR now expects revenue for the full year 2015 to be in the range of $1.52 billion to $1.57 billion and net earnings, excluding restructuring charges and the third quarter discrete tax benefit described above, to be in the range of $1.55 to $1.60 per diluted share. Including the impact of the third quarter discrete tax benefit and an estimated $12 million after-tax gain in the fourth quarter on an investment, net earnings is expected to be in the range of $1.76 to $1.81 per diluted share.