Back to GetFilings.com



Table of Contents
 
UNITED STATES
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, 2002
 
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
incorporation or organization)
  
(I.R.S. Employer
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  ¨            
 
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes  x  No  ¨            
 
At October 31, 2002, there were 16,964,316 shares of the Registrant’s common stock, $0.01, par value, outstanding.
 
 

Table of Contents
INDEX
 
PART I.  FINANCIAL INFORMATION
 
Item 1.
   
Financial Statements
     
       
1
       
2
       
3
       
4
Item 2.
      
9
Item 4.
      
12
PART II.  OTHER INFORMATION
     
Item 1.
      
13
Item 4.
      
14
Item 6.
      
14
       
15
       
16
 

Table of Contents
PART 1.    FINANCIAL INFORMATION
 
Item 1.    Financial Statements
 
FLIR SYSTEMS, INC.
 
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
    
Three Months Ended
September 30,
     
Nine Months Ended
September 30,
  
    
2002
     
2001
     
2002
     
2001
  
Revenue
   
$
64,455
 
   
$
47,499
 
   
$
186,147
 
   
$
149,366
 
Cost of goods sold
   
 
30,632
 
   
 
21,537
 
   
 
88,208
 
   
 
67,418
 
    
  
  
  
Gross profit
   
 
33,823
 
   
 
25,962
 
   
 
97,939
 
   
 
81,948
 
Operating expenses:
                                    
Research and development
   
 
6,211
 
   
 
6,053
 
   
 
19,759
 
   
 
18,793
 
Selling, general and administrative
   
 
14,794
 
   
 
11,005
 
   
 
43,374
 
   
 
37,857
 
    
  
  
  
Total operating expenses
   
 
21,005
 
   
 
17,058
 
   
 
63,133
 
   
 
56,650
 
Earnings from operations
   
 
12,818
 
   
 
8,904
 
   
 
34,806
 
   
 
25,298
 
Interest expense
   
 
390
 
   
 
2,846
 
   
 
1,533
 
   
 
8,304
 
Other income, net
   
 
(101
)
   
 
(180
)
   
 
(697
)
   
 
(418
)
    
  
  
  
Earnings before income taxes
   
 
12,529
 
   
 
6,238
 
   
 
33,970
 
   
 
17,412
 
Income tax provision
   
 
1,879
 
   
 
65
 
   
 
5,096
 
   
 
1,741
 
    
  
  
  
Net earnings
   
$
10,650
 
   
$
6,173
 
   
$
28,874
 
   
$
15,671
 
    
  
  
  
Net earnings per share:
                                    
Basic
   
$
0.63
 
   
$
0.41
 
   
$
1.72
 
   
$
1.06
 
    
  
  
  
Diluted
   
$
0.60
 
   
$
0.38
 
   
$
1.62
 
   
$
1.01
 
    
  
  
  
 
The accompanying notes are an integral part of these consolidated financial statements.
 

1

Table of Contents
 
FLIR SYSTEMS, INC.
 
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
 
    
September 30,
2002
     
December 31,
2001
  
    
(Unaudited)
  
ASSETS
                  
Current assets:
                  
Cash and cash equivalents
   
$
27,720
 
   
$
15,514
 
Accounts receivable, net
   
 
52,613
 
   
 
57,965
 
Inventories
   
 
49,533
 
   
 
46,560
 
Prepaid expenses and other current assets
   
 
15,083
 
   
 
11,548
 
Deferred income taxes
   
 
8,834
 
   
 
8,834
 
    
  
Total current assets
   
 
153,783
 
   
 
140,421
 
Property and equipment, net
   
 
12,879
 
   
 
10,806
 
Deferred income taxes, net
   
 
15,087
 
   
 
15,087
 
Intangible assets, net
   
 
16,676
 
   
 
16,811
 
Other assets
   
 
2,962
 
   
 
1,913
 
    
  
    
$
201,387
 
   
$
185,038
 
    
  
LIABILITIES AND SHAREHOLDERS’ EQUITY
                  
Current liabilities:
                  
Notes payable
   
$
—  
 
   
$
23,370
 
Accounts payable
   
 
18,929
 
   
 
18,428
 
Deferred revenue
   
 
5,314
 
   
 
5,314
 
Accrued payroll and other liabilities
   
 
27,091
 
   
 
22,538
 
Accrued income taxes
   
 
3,165
 
   
 
747
 
Current portion of capital lease obligations
   
 
3
 
   
 
584
 
    
  
Total current liabilities
   
 
54,502
 
   
 
70,981
 
Pension and other long-term liabilities
   
 
6,432
 
   
 
9,209
 
Commitments and contingencies
                  
Shareholders’ equity:
                  
Preferred stock, $0.01 par value, 10,000 shares authorized; no shares issued at September 30, 2002, and December 31, 2001
   
 
—  
 
   
 
—  
 
Common stock, $0.01 par value, 30,000 shares authorized, 16,887 and 16,555 shares issued at September 30, 2002, and December 31, 2001, respectively
   
 
169
 
   
 
165
 
Additional paid-in capital
   
 
200,709
 
   
 
194,338
 
Accumulated deficit
   
 
(55,990
)
   
 
(84,864
)
Accumulated other comprehensive loss
   
 
(4,435
)
   
 
(4,791
)
    
  
Total shareholders’ equity
   
 
140,453
 
   
 
104,848
 
    
  
    
$
201,387
 
   
$
185,038
 
    
  
 
The accompanying notes are an integral part of these consolidated financial statements.
 

2

Table of Contents
FLIR SYSTEMS, INC.
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
    
Nine Months Ended
September 30,
  
    
2002
     
2001
  
Cash flows from operating activities:
                  
Net earnings
   
$
28,874
 
   
$
15,671
 
Income charges not affecting cash:
                  
Depreciation and amortization
   
 
4,563
 
   
 
5,788
 
Disposals and write-offs of property and equipment
   
 
72
 
   
 
505
 
Fair value adjustment on interest swaps
   
 
(281
)
   
 
1,516
 
Other non-cash items
   
 
152
 
   
 
—  
 
Changes in operating assets and liabilities:
                  
Decrease (increase) in accounts receivable
   
 
5,852
 
   
 
(2,218
)
(Increase) decrease in inventories
   
 
(2,250
)
   
 
9,109
 
Increase in prepaid expenses and other current assets
   
 
(3,320
)
   
 
(1,108
)
Increase in other assets
   
 
(1,708
)
   
 
(1,625
)
Decrease in accounts payable
   
 
(8
)
   
 
(5,039
)
(Decrease) increase in deferred revenue
   
 
(6
)
   
 
1,381
 
Increase in accrued payroll and other liabilities
   
 
3,738
 
   
 
5,007
 
Increase (decrease) in accrued income taxes
   
 
2,122
 
   
 
(1,259
)
Increase in pension and other long-term liabilities
   
 
830
 
   
 
145
 
    
  
Cash provided by operating activities
   
 
38,630
 
   
 
27,873
 
    
  
Cash flows from investing activities:
                  
Additions to property and equipment
   
 
(5,502
)
   
 
(4,352
)
    
  
Cash used by investing activities
   
 
(5,502
)
   
 
(4,352
)
    
  
Cash flows from financing activities:
                  
Repayment of credit agreement
   
 
(19,900
)
   
 
(27,400
)
Net (decrease) increase in international credit line
   
 
(3,470
)
   
 
618
 
Repayment of capital leases
   
 
(528
)
   
 
(922
)
Settlement of interest rate swap agreements
   
 
(2,082
)
   
 
—  
 
Proceeds from exercise of stock options
   
 
4,330
 
   
 
4,961
 
Stock issued pursuant to employee stock purchase plan
   
 
456
 
   
 
323
 
    
  
Cash used by financing activities