– Revenue of $524.3 Million for the Fourth
Quarter; $1.9 Billion for the Full Year
– Revenue Growth of 7% and 2% over Prior
Year for Fourth Quarter and Full Year, Respectively
– GAAP Diluted Earnings Per Share (“EPS”) of
$0.57 for the Fourth Quarter; $1.60 for the Full Year
– Adjusted Diluted EPS of $0.78 for the
Fourth Quarter; $2.48 for the Full Year
FLIR Systems, Inc. (NASDAQ: FLIR) (“FLIR” or the
“Company”), a world leader in the design, manufacture, and
marketing of intelligent sensing technologies, today announced
financial results for the fourth quarter and full year ended
December 31, 2020.
Commenting on FLIR’s fourth quarter and full year results, Jim
Cannon, President and Chief Executive Officer, said, “FLIR ended
2020 on a strong note with fourth quarter revenue growth of 7%
compared to the prior year quarter. Over the course of the year, we
continued to execute on our strategy, delivering new program wins,
releasing new, innovative products for our customers, and realizing
cost savings from Project Be Ready. I am very proud of our team’s
performance. Their dedication and hard work ensured the pandemic
did not have a material impact on our consolidated financial
performance, and most importantly, allowed us to meet the needs of
our customers throughout this challenging year.”
Mr. Cannon added, “We are entering 2021 with strong momentum,
and are confident that our combination with Teledyne will create an
even stronger organization. The joining of our companies will
provide a broader springboard for growth and innovation to meet the
evolving needs of our industrial and defense customers, drive
enhanced stockholder value and create new opportunities for our
employees.”
Fourth Quarter Summary Results
Revenues for the quarter were $524.3 million, compared to $489.0
million in the prior year quarter. Bookings totaled $424.2 million
in the quarter, representing a book-to-bill ratio of 0.81. Backlog
at the end of the quarter was $809.7 million, reflecting a 0.3%
increase relative to the prior year quarter.
GAAP Earnings Results
Gross profit for the quarter was $246.5 million, compared to
$232.4 million in the prior year quarter. Gross margin decreased to
47.0% from 47.5% in the prior year quarter, primarily attributable
to product mix in the Defense Technologies segment. Earnings from
operations for the quarter were $102.4 million, compared to $54.1
million in the prior year quarter. Operating margin increased to
19.5% from 11.1% in the prior year quarter, primarily due to the
aforementioned higher revenue and associated gross profit,
decreases in restructuring expenses and related asset impairment
charges, lower consent agreement costs, operating expense
reductions from Project Be Ready, and decreases in marketing and
travel costs. Diluted EPS was $0.57, compared to $0.01 in the prior
year quarter.
The weighted average diluted share count for the quarter was 132
million, down from 136 million in the prior year quarter primarily
due to stock repurchase activity in the first quarter of 2020.
Non-GAAP Earnings Results
Adjusted gross profit for the quarter was $256.2 million,
compared to $248.8 million in the prior year quarter. Adjusted
gross margin decreased to 48.9% from 50.9% in the prior year
quarter, primarily attributable to product mix in the Defense
Technologies segment. Adjusted operating income for the quarter was
$122.5 million, compared to $101.7 million in the prior year
quarter. Adjusted operating margin increased to 23.4% from 20.8% in
the prior year quarter, primarily due to the aforementioned higher
revenue and associated gross profit, operating expense reductions
from Project Be Ready, and decreases in marketing and travel costs.
Adjusted diluted EPS was $0.78, compared to $0.53 in the prior year
quarter.
Fourth Quarter Segment Results
Industrial Technologies Segment
Industrial Technologies revenues for the quarter were $298.3
million, representing an increase of $20.0 million, or 7.2%
compared to the prior year quarter. The increase was primarily
attributable to heightened demand for EST solutions due to the
COVID-19 pandemic and an increase in maritime product sales,
partially offset by lower volume in certain commercial end markets
such as security products.
Industrial Technologies segment operating income was $85.2
million, compared to $71.8 million in the prior year quarter.
Segment operating margin increased to 28.6% from 25.8% in the prior
year quarter, primarily attributable to the aforementioned higher
revenue and associated gross profit, operating expense reductions
from Project Be Ready, and decreases in marketing and travel
costs.
Industrial Technologies bookings totaled $235.4 million for the
quarter, representing a book-to-bill ratio of 0.79, and was
impacted by the timing of awards and related shipments. Backlog at
the end of the quarter was $284.8 million, reflecting a 6.0%
increase relative to the prior year quarter, primarily due to long
term order award timing and an increased volume of maritime orders
during the fourth quarter.
Defense Technologies Segment
Defense Technologies revenues for the quarter of $226.0 million
increased by $15.3 million, or 7.2% compared to the prior year
quarter. The revenue increase was primarily attributable to
improved volumes for unmanned systems.
Defense Technologies segment operating income was $55.3 million,
compared to $50.1 million in the prior year quarter. Segment
operating margin increased to 24.5% from 23.8% in the prior year
quarter, primarily attributable to decreases in marketing and
travel costs, partially offset by lower gross margins due to
product mix.
Defense Technologies bookings totaled $188.8 million for the
quarter, representing a book-to-bill ratio of 0.84, and was
impacted by the timing of awards and related shipments. Backlog at
the end of the quarter was $524.8 million, reflecting a 2.5%
decrease relative to the prior year quarter, primarily due to order
volume and subsequent deployment timing, partially offset by
increased demand for unmanned systems.
Full Year Summary Results
Revenues for the full year were $1,924 million, compared to
$1,877 million in the prior year. Bookings totaled $1,924 million
for the full year, representing a book-to-bill ratio of 1.00.
GAAP Earnings Results
Gross profit for the full year was $947.0 million, compared to
$929.4 million in the prior year. Gross margin was 49.2%,
consistent with the prior year. Operating margin increased to 16.5%
from 14.5% in the prior year, primarily due to the aforementioned
higher revenue and associated gross profit, operating expense
reductions from Project Be Ready, decreases in marketing and travel
costs, lower intangible asset amortization, and a decrease in
separation, transaction, and integration costs. The favorable
impacts were partially offset by an increase in restructuring
expenses and related asset impairment charges. Diluted EPS was
$1.60, compared to $1.26 in the prior year.
The weighted average diluted share count for the year was 133
million, down from 137 million in the prior year primarily due to
stock repurchase activity in the first quarter of 2020.
Non-GAAP Earnings Results
Adjusted gross profit for the year was $986.0 million, compared
to $972.5 million in the prior year. Adjusted gross margin
decreased to 51.3% from 51.5% in the prior year, primarily due to
the ramp up of lower margin programs in the Defense Technologies
segment, partially offset by favorable product mix in the
Industrial Technologies segment. Adjusted operating income for the
year was $428.9 million, compared to $395.7 million in the prior
year. Adjusted operating margin increased to 22.3% from 21.0% in
the prior year, primarily due to the aforementioned higher revenue
and associated gross profit, operating expense reductions from
Project Be Ready, and decreases in marketing and travel costs.
Adjusted diluted EPS was $2.48, compared to $2.16 in the prior
year.
Full Year Segment Results
Industrial Technologies Segment
Industrial Technologies revenues for the year were $1,156
million, representing an increase of $64.0 million, or 5.9%
compared to the prior year. The increase was primarily attributable
to heightened demand for EST solutions due to the COVID-19
pandemic, partially offset by lower volume in certain commercial
end markets such as maritime and security products.
Industrial Technologies segment operating income was $344.4
million, compared to $276.2 million in the prior year. Segment
operating margin increased to 29.8% from 25.3% in the prior year,
primarily attributable to the aforementioned higher revenue and
associated gross profit, favorable product mix, operating expense
reductions from Project Be Ready, and decreases in marketing and
travel costs.
Industrial Technologies bookings totaled $1,179 million for the
year, representing a book-to-bill ratio of 1.02.
Defense Technologies Segment
Defense Technologies revenues for the year of $767.6 million
decreased by $27.3 million, or 3.4% compared to the prior year. The
revenue decrease was primarily attributable to the completion of
certain contracts that contributed to revenue in the prior year,
partially offset by increased volumes for unmanned systems.
Defense Technologies segment operating income was $168.5
million, compared to $196.6 million in the prior year. Segment
operating margin decreased to 21.9% from 24.7% in the prior year,
primarily attributable to the aforementioned lower revenue and
associated gross profit and the ramp up of lower margin programs,
partially offset by decreases in marketing and travel costs.
Defense Technologies bookings totaled $744.6 million for the
year, representing a book-to-bill ratio of 0.97.
Corporate Developments
Altavian Acquisition
On December 2, 2020, the Company acquired 100% of the
outstanding stock of Altavian, Inc. ("Altavian"), a privately held
manufacturer of small unmanned aerial systems (sUAS) for defense
and public safety customers. The transaction consideration of $34.1
million included a cash payment of $26.8 million and shares of the
Company’s common stock valued at $7.3 million. In addition to the
above transaction consideration, $2.5 million in Company shares
will be payable as share-based compensation over a three-year
period. The acquisition advances the Company's strategic pillars
and expands franchise program opportunities in defense, public
safety, and industrial markets.
Teledyne Agreement
On January 4, 2021, we entered into a definitive agreement to be
acquired by Teledyne Technologies Incorporated, a manufacturer and
supplier of sophisticated instrumentation, digital imaging products
and software, aerospace and defense electronics, and engineered
systems. The Teledyne transaction will enable the combined company
to create a stronger platform for growth and innovation and be even
better positioned to meet the evolving needs of our customers,
drive stockholder value and create new opportunities for our
employees. Together, we will offer a uniquely complementary
end-to-end portfolio of sensory technologies for all key domains
and applications across a well-balanced, global customer base. In
addition, both our business models include serving respective
markets and customers with sensors, cameras and sensor systems.
The transaction is expected to close in the middle of 2021
subject to the receipt of required regulatory approvals, including
expiration or termination of the applicable waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act, approvals of
Teledyne and the Company stockholders and other customary closing
conditions.
Balance Sheet and Liquidity
FLIR ended the year with $297.8 million in cash and cash
equivalents and approximately $595.4 million in borrowing capacity
under its credit facility based on current profitability levels and
leverage covenants.
COVID-19 Update
As previously announced, FLIR’s businesses have been deemed
essential for critical infrastructure under the Cybersecurity and
Infrastructure Security Agency exemption, and all of its
manufacturing facilities remain operational. FLIR has implemented
stringent safety protocols and continues to monitor recommendations
and guidelines issued by the Centers for Disease Control, the
European Centre for Disease Prevention, and the World Health
Organization to ensure the health and safety of its employees.
Given the high degree of uncertainty in the current
macroeconomic environment resulting from COVID-19, the Company
remains focused on cash optimization activities and disciplined
capital allocation.
Shareholder Return Activity
FLIR’s Board of Directors has declared a quarterly cash dividend
of $0.17 per share on FLIR common stock payable on March 19, 2021
to shareholders of record as of close of business on March 5,
2021.
About FLIR Systems, Inc.
Founded in 1978, FLIR Systems is a world-leading technology
company focused on intelligent sensing solutions for defense and
industrial applications. Our vision is to be “The World’s Sixth
Sense,” creating technologies to help professionals make faster,
better decisions that save lives and livelihoods. For more
information, please visit www.flir.com and follow @flir.
Forward-Looking Statements
Statements, estimates or projections in this release may
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Any statements
that are not statements of historical fact (including statements
containing the words “believes,” “plans,” “anticipates,” “expects,”
“estimates,” or similar expressions) should be considered to be
forward looking statements. Such statements are based on current
expectations, estimates, and projections about FLIR’s business
based, in part, on assumptions made by management. These statements
are not guarantees of future performance and involve risks and
uncertainties 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 the following:
- risks related to the pending acquisition of FLIR by Teledyne,
including parties’ ability to satisfy the conditions required to
complete the transaction and, during the pendency of the
transaction, diversion of management and employees’ attention,
retention and recruiting challenges, uncertainty in business
relationships and restrictions on operations set forth in the
definitive acquisition agreement;
- risks related to United States government spending decisions
and applicable procurement rules and regulations;
- negative impacts to operating margins due to reductions in
sales or changes in product mix;
- impairments in the value of tangible and intangible
assets;
- unfavorable results of legal proceedings;
- risks associated with international sales and business
activities, including the regulation of the export and sale of our
products worldwide and our ability to obtain and maintain necessary
export licenses, as well as the imposition of significant tariffs
or other trade barriers;
- risks to our supply chain, production facilities or other
operations, and changes to general, domestic, and foreign economic
conditions, due to the COVID-19 pandemic;
- risks related to subcontractor and supplier performance and
financial viability as well as raw material and component
availability and pricing;
- risks related to currency fluctuations;
- adverse general economic conditions or volatility in our
primary markets;
- our ability to compete effectively and to respond to
technological change;
- risks related to product defects or errors;
- our ability to protect our intellectual property and
proprietary rights
- cybersecurity and other security threats and technology
disruptions
- our ability to successfully manage acquisitions, investments
and divestiture activities and integrate acquired companies;
- our ability to achieve the intended benefits of our strategic
restructuring;
- risks related to our senior unsecured notes and other
indebtedness;
- our ability to attract and retain key senior management and
qualified technical, sales and other personnel;
- changes in our effective tax rate and the results of pending
tax matters; and
- other risks discussed from time to time in filings and reports
filed with the Securities and Exchange Commission.
COVID-19 may exacerbate one or more of the aforementioned and/or
other risks, uncertainties and other factors more fully described
in the Company’s reports filed with the SEC. 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 FLIR does not undertake any
obligation to update any forward-looking statement to reflect
events or circumstances after the date of this release, or for
changes made to this document by wire services or internet service
providers.
Definitions and Non-GAAP Financial Measures
Bookings are defined as contractual agreements awarded during
the reporting period. Backlog is defined as total estimated amount
of future revenues to be recognized under negotiated contracts.
We report our financial results in accordance with United States
generally accepted accounting principles (“GAAP”). As a supplement
to our GAAP financial results, this earnings announcement contains
some or all of the following non-GAAP financial measures: (i)
adjusted gross profit, (ii) adjusted gross margin (defined as
adjusted gross profit divided by revenue), (iii) adjusted operating
income, (iv) adjusted operating margin (defined as adjusted
operating income divided by revenue), (v) adjusted net earnings,
and (vi) adjusted diluted EPS. These non-GAAP measures of financial
performance are not prepared in accordance with GAAP and
computational methods may differ from those used by other
companies. Additionally, these non-GAAP measures should not be
considered a substitute for any other performance measure
determined in accordance with GAAP, and the Company cautions
investors and potential investors to consider these measures in
addition to, not as a substitute for, its consolidated financial
results as presented in accordance with GAAP. Each of the non-GAAP
measures is adjusted from GAAP results as outlined in the "GAAP to
Non-GAAP Reconciliation" table included within this earnings
release.
In calculating non-GAAP financial measures, we exclude certain
items to facilitate a review of the comparability of our core
operating performance on a period-to-period basis. Items excluded
consist of: (i) separation, transaction, and integration costs,
(ii) amortization of acquired intangibles, (iii) restructuring
expenses and asset impairment charges, (iv) discrete legal and
compliance matters, (v) loss on debt extinguishment, and (vi)
discrete tax items. We do not consider these items to be directly
related to our core operating performance. Non-GAAP measures are
used internally to evaluate the core operating performance of our
business, for comparison with forecasts and strategic plans, and as
a factor for determining incentive compensation for certain
employees. Accordingly, supplementing GAAP financial results with
these non-GAAP financial measures enables the comparison of our
ongoing operating results in a manner consistent with the metrics
reviewed by management. We believe that these non-GAAP measures,
when read in conjunction with our GAAP financials, provide useful
information to investors by facilitating:
- the comparability of our ongoing operating results over the
periods presented;
- the ability to identify trends in our underlying business;
and
- the comparison of our operating results against analyst
financial models and operating results of other public companies
that supplement their GAAP results with non-GAAP financial
measures.
The following are explanations of each type of adjustment that
we incorporate into non-GAAP financial measures:
- Separation, transaction, and integration costs – Represents
separation, transaction and integration costs related to
divestiture and acquisition initiatives.
- Amortization of acquired intangibles – Represents amortization
expense associated with acquired intangible assets.
- Restructuring expenses and asset impairment charges –
Represents employee separation expenses, facility consolidation
costs, and certain third party expenses as well as goodwill,
intangible asset, and inventory impairment charges associated with
Company restructuring activities.
- Discrete legal and compliance matters – Represents costs
incurred associated with certain legal and compliance matters that
are not representative of ongoing operational costs. These expenses
are primarily attributable to an administrative agreement with the
U.S. Department of State (the “Consent Agreement”) to address and
remediate certain historical practices associated with U.S. and
international trade control laws and regulations. Such costs
include a Directorate of Defense Trade Controls penalty, expenses
associated with retention of a Special Compliance Officer, and
remedial actions required by the terms of the Consent Agreement or
otherwise necessary to remedy and achieve full compliance with U.S.
and international trade control laws and regulations.
- Loss on debt extinguishment – Represents the redemption premium
and write-off of debt discount and debt issuance costs associated
with redemption of the Company’s $425 million unsecured notes due
June 15, 2021.
- Discrete tax items – Represents tax expenses and benefits
related to discrete events or transactions that are not
representative of the Company’s estimated tax rate related to
ongoing operations. These items include charges and reversals of
provisions associated with certain unrecognized tax benefits,
benefits or charges associated with the windfalls or shortfalls
resulting from vesting and exercise activity of share-based
compensation, changes in valuation allowances against certain
deferred tax assets, and other discrete items not included in the
annual effective tax rate associated with our ongoing
operations.
Adjusted net earnings and adjusted diluted EPS include an
estimate to reflect the tax effect of the discrete items identified
above. The tax effect is calculated by applying the Company’s
overall estimated effective tax rate, excluding significant
discrete items, to earnings before income taxes.
FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF
INCOME
(In thousands, except per share
amounts) (Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2020
2019
2020
2019
Revenue
$
524,337
$
489,044
$
1,923,689
$
1,887,026
Cost of goods sold
277,806
256,674
976,676
957,640
Gross profit
246,531
232,370
947,013
929,386
Operating expenses:
Research and development
52,459
53,174
210,166
203,611
Selling, general and administrative
90,016
120,820
389,130
442,416
Restructuring expenses
1,696
4,323
30,475
10,099
Total operating expenses
144,171
178,317
629,771
656,126
Earnings from operations
102,360
54,053
317,242
273,260
Interest expense
6,044
7,341
27,240
27,711
Interest income
(77
)
(544
)
(608
)
(2,651
)
Loss on debt extinguishment
—
—
9,126
—
Other (income) expense, net
(3,598
)
5,346
(3,520
)
6,284
Earnings before income taxes
99,991
41,910
285,004
241,916
Income tax provision
24,751
40,226
72,420
70,319
Net earnings
$
75,240
$
1,684
$
212,584
$
171,597
Net earnings per share:
Basic earnings per share
$
0.57
$
0.01
$
1.61
$
1.27
Diluted earnings per share
$
0.57
$
0.01
$
1.60
$
1.26
Weighted average shares outstanding:
Basic
131,052
134,279
131,648
135,016
Diluted
131,758
135,691
132,589
136,637
Note: The Company made certain
reclassifications to the prior years' financial statements to
conform them to the presentation as of and for the three months and
year ended December 31, 2020 that management has determined had no
material effect for the periods presented.
FLIR SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands) (Unaudited)
December 31,
December 31,
2020
2019
ASSETS
Current assets:
Cash and cash equivalents
$
297,795
$
284,592
Accounts receivable, net
353,561
318,652
Inventories
472,237
388,762
Prepaid expenses and other current
assets
104,646
116,728
Total current assets
1,228,239
1,108,734
Property and equipment, net
267,682
255,905
Deferred income taxes, net
36,210
39,983
Goodwill
1,394,364
1,364,596
Intangible assets, net
209,636
247,514
Other assets
116,217
120,809
Total assets
$
3,252,348
$
3,137,541
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
157,592
$
158,033
Deferred revenue
25,862
28,587
Accrued payroll and related
liabilities
98,911
72,476
Accrued product warranties
17,019
14,611
Accrued payments from customers
10,940
28,005
Accrued expenses
41,347
40,815
Accrued income taxes
28,941
14,735
Other current liabilities
44,053
27,349
Credit facility
—
16,000
Long-term debt, current portion
13,473
12,444
Total current liabilities
438,138
413,055
Long-term debt, net of current portion
724,919
648,419
Deferred income taxes
43,708
53,544
Accrued income taxes
60,248
55,514
Other long-term liabilities
101,961
95,576
Shareholders’ equity:
Preferred stock, $0.01 par value, 10,000
shares authorized; no shares issued at December 31, 2020 and
December 31, 2019
—
—
Common stock, $0.01 par value, 500,000
shares authorized, 131,360 and 134,394 shares issued, 131,153 and
134,394 shares outstanding at December 31, 2020 and December 31,
2019, respectively, and additional paid-in capital
31,767
16,692
Retained earnings
2,017,097
2,020,686
Treasury stock - at cost - 207,139 shares
of common stock at December 31, 2020
(7,504
)
—
Accumulated other comprehensive loss
(157,986
)
(165,945
)
Total shareholders’ equity
1,883,374
1,871,433
Total liabilities and shareholders'
equity
$
3,252,348
$
3,137,541
FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(In thousands) (Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2020
2019
2020
2019
Cash flows from operating activities:
Net earnings
$
75,240
$
1,684
$
212,584
$
171,597
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
23,523
27,095
94,740
103,132
Stock-based compensation
8,617
9,318
39,164
36,689
Loss on debt extinguishment
—
—
9,126
—
Asset impairment charges and loss on
disposal of assets
317
13,666
3,669
13,666
Minority interest impairment charges
—
4,141
4,803
4,141
Deferred income taxes
11,660
46,131
11,202
44,934
Other, net
4,341
(57
)
8,034
(18
)
(Decrease) increase in cash, net of
acquisitions, resulting from changes in:
Accounts receivable
(37,666
)
13,912
(29,696
)
19,372
Inventories
12,162
5,855
(71,053
)
(24,360
)
Prepaid expenses and other current
assets
11,130
(1,787
)
12,447
(1,744
)
Other assets
15,988
(10,375
)
12,485
1,099
Accounts payable
6,834
12,879
(4,348
)
51,752
Deferred revenue
(404
)
(13,274
)
(3,266
)
(6,187
)
Accrued payroll and other liabilities
(6,840
)
(4,219
)
860
(8,339
)
Accrued income taxes
(6,345
)
(5,168
)
28,808
(24,723
)
Other long term liabilities
(2,383
)
(6,254
)
(17,196
)
(10,639
)
Net cash provided by operating
activities
116,174
93,547
312,363
370,372
Cash flows from investing activities:
Additions to property and equipment,
net
(20,015
)
(12,760
)
(57,151
)
(44,794
)
Proceeds from sale of assets
—
—
—
6,365
Business acquisitions, net of cash
acquired
(26,614
)
—
(26,614
)
(601,927
)
Minority interest and other
investments
6
(6,030
)
310
(11,030
)
Net cash used in investing activities
(46,623
)
(18,790
)
(83,455
)
(651,386
)
Cash flows from financing activities:
Net proceeds from credit facility and
long-term debt, including current portion
—
—
175,000
723,054
Repayment of credit facility and long-term
debt
(68,327
)
(74,590
)
(203,679
)
(468,224
)
Repayment of 2021 Notes
—
—
(425,000
)
—
Redemption premium of 2021 Notes
—
—
(8,509
)
—
Net proceeds from issuance of 2030
Notes
—
—
494,234
—
Repurchase of common stock
(16,311
)
(2
)
(166,311
)
(124,998
)
Dividends paid
(22,247
)
(22,842
)
(89,544
)
(91,694
)
Proceeds from shares issued pursuant to
stock-based compensation plans
4,672
7,642
11,981
28,418
Tax paid for net share exercises and
issuance of vested restricted stock units
(1,040
)
(1,535
)
(11,274
)
(11,993
)
Other financing activities
—
2
—
(523
)
Net cash (used in) provided by financing
activities:
(103,253
)
(91,325
)
(223,102
)
54,040
Effect of exchange rate changes on cash
and cash equivalents
11,502
5,769
7,397
(578
)
Net (decrease) increase in cash and cash
equivalents
(22,200
)
(10,799
)
13,203
(227,552
)
Cash and cash equivalents, beginning of
period
319,995
295,391
284,592
512,144
Cash and cash equivalents, end of
period
$
297,795
$
284,592
$
297,795
$
284,592
FLIR SYSTEMS, INC.
SEGMENT PERFORMANCE
(In thousands) (Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2020
2019
2020
2019
SEGMENT REVENUE
Industrial Technologies Segment
$
298,326
$
278,310
$
1,156,058
$
1,092,085
Defense Technologies Segment
226,011
210,734
767,631
794,941
SEGMENT EARNINGS FROM OPERATIONS
Industrial Technologies Segment
$
85,231
$
71,802
$
344,376
$
276,167
Defense Technologies Segment
55,349
50,107
168,469
196,592
SEGMENT OPERATING MARGIN
Industrial Technologies Segment
28.6
%
25.8
%
29.8
%
25.3
%
Defense Technologies Segment
24.5
%
23.8
%
21.9
%
24.7
%
Note: The Company made certain
reclassifications to the prior years' financial statements to
conform them to the presentation as of and for the three months and
year ended December 31, 2020 that management has determined had no
material effect for the periods presented.
FLIR SYSTEMS, INC.
GAAP TO NON-GAAP
RECONCILIATION
(In thousands, except per share
amounts) (Unaudited)
Three Months Ended December
31, 2020
As Reported
Separation, transaction, and
integration costs
Amortization of acquired
intangibles assets
Restructuring expenses and asset
impairment charges
Discrete legal and compliance
matters
Discrete tax items
Adjusted Non-GAAP
Results
Gross profit
$
246,531
$
276
$
9,372
$
—
$
—
$
—
$
256,179
Operating expenses
(144,171
)
2,133
2,577
1,696
4,052
—
(133,713
)
Earnings from operations
102,360
2,409
11,949
1,696
4,052
—
122,466
Non-operating expense, net
(2,369
)
—
—
—
—
—
(2,369
)
Earnings before income taxes
99,991
2,409
11,949
1,696
4,052
—
120,097
Income tax provision
(24,751
)
(217
)
(1,073
)
(152
)
(364
)
9,460
(17,098
)
Net earnings
$
75,240
$
2,192
$
10,876
$
1,544
$
3,688
$
9,460
$
102,999
Gross margin
47.0
%
0.1
%
1.8
%
—
%
—
%
—
%
48.9
%
Operating margin
19.5
%
0.5
%
2.3
%
0.3
%
0.8
%
—
%
23.4
%
Net earnings per diluted share
$
0.57
$
0.02
$
0.08
$
0.01
$
0.03
$
0.07
$
0.78
Weighted average diluted shares
outstanding
131,758
131,758
131,758
131,758
131,758
131,758
131,758
Three Months Ended December 31,
2019
As Reported
Separation, transaction, and
integration costs
Amortization of acquired
intangibles assets
Restructuring expenses and asset
impairment charges
Discrete legal and compliance
matters
Discrete tax items
Adjusted Non-GAAP
Results
Gross profit
$
232,370
$
738
$
9,774
$
5,890
$
—
$
—
$
248,772
Operating expenses
(178,317
)
3,724
5,151
12,099
10,226
—
(147,117
)
Earnings from operations
54,053
4,462
14,925
17,989
10,226
—
101,655
Non-operating expense, net
(12,143
)
—
—
—
—
—
(12,143
)
Earnings before income taxes
41,910
4,462
14,925
17,989
10,226
—
89,512
Income tax provision
(40,226
)
(852
)
(2,851
)
(3,437
)
(1,954
)
32,264
(17,057
)
Net earnings
$
1,684
$
3,610
$
12,074
$
14,552
$
8,272
$
32,264
$
72,455
Gross margin
47.5
%
0.2
%
2.0
%
1.2
%
—
%
—
%
50.9
%
Operating margin
11.1
%
0.9
%
3.1
%
3.7
%
2.1
%
—
%
20.8
%
Net earnings per diluted share
$
0.01
$
0.03
$
0.09
$
0.11
$
0.06
$
0.24
$
0.53
Weighted average diluted shares
outstanding
135,691
135,691
135,691
135,691
135,691
135,691
135,691
Year Ended December 31,
2020
As Reported
Separation, transaction, and
integration costs
Amortization of acquired
intangibles assets
Restructuring expenses and asset
impairment charges
Discrete legal and compliance
matters
Loss on debt extinguishment
Discrete tax items
Adjusted Non-GAAP
Results
Gross profit
$
947,013
$
1,670
$
37,334
$
—
$
—
$
—
$
—
$
986,017
Operating expenses
(629,771
)
9,426
10,137
30,475
22,591
—
—
(557,142
)
Earnings from operations
317,242
11,096
47,471
30,475
22,591
—
—
428,875
Non-operating expense, net
(32,238
)
—
—
—
—
9,126
—
(23,112
)
Earnings before income taxes
285,004
11,096
47,471
30,475
22,591
9,126
—
405,763
Income tax provision
(72,420
)
(2,108
)
(9,019
)
(5,790
)
(4,292
)
(1,734
)
18,269
(77,095
)
Net earnings
$
212,584
$
8,988
$
38,452
$
24,685
$
18,299
$
7,392
$
18,269
$
328,668
Gross margin
49.2
%
0.1
%
1.9
%
—
%
—
%
—
%
—
%
51.3
%
Operating margin
16.5
%
0.6
%
2.5
%
1.6
%
1.2
%
—
%
—
%
22.3
%
Net earnings per diluted share
$
1.60
$
0.07
$
0.29
$
0.19
$
0.14
$
0.06
$
0.14
$
2.48
Weighted average diluted shares
outstanding
132,589
132,589
132,589
132,589
132,589
132,589
132,589
132,589
Year Ended December 31, 2019
As Reported
Separation, transaction, and
integration costs
Amortization of acquired
intangibles assets
Restructuring expenses and asset
impairment charges
Discrete legal and compliance
matters
Discrete tax items
Adjusted Non-GAAP
Results
Gross profit
$
929,386
$
1,968
$
35,288
$
5,890
$
—
$
—
$
972,532
Operating expenses
(656,126
)
17,021
22,088
17,875
22,323
—
(576,819
)
Earnings from operations
273,260
18,989
57,376
23,765
22,323
—
395,713
Non-operating expense, net
(31,344
)
—
—
—
—
—
(31,344
)
Earnings before income taxes
241,916
18,989
57,376
23,765
22,323
—
364,369
Income tax provision
(70,319
)
(3,608
)
(10,901
)
(4,515
)
(4,241
)
24,355
(69,230
)
Net earnings
$
171,597
$
15,381
$
46,475
$
19,250
$
18,082
$
24,355
$
295,139
Gross margin
49.3
%
0.1
%
1.9
%
0.3
%
—
%
—
%
51.5
%
Operating margin
14.5
%
1.0
%
3.0
%
1.3
%
1.2
%
—
%
21.0
%
Net earnings per diluted share
$
1.26
$
0.11
$
0.34
$
0.14
$
0.13
$
0.18
$
2.16
Weighted average diluted shares
outstanding
136,637
136,637
136,637
136,637
136,637
136,637
136,637
Note: The Company made certain
reclassifications to the prior years' financial statements to
conform them to the presentation as of and for the three months and
year ended December 31, 2020 that management has determined had no
material effect for the periods presented.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210225005138/en/
Investor Relations Sarah Key Senior Director, Corporate
M&A and Investor Relations Phone: +1 571-309-8318 Email:
Investors@flir.com
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