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 March 31, 2003 |
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 April 30, 2003, there were 17,352,096 shares of the Registrant’s common stock, $0.01, par value, outstanding.
| PART I. FINANCIAL INFORMATION |
||||
| Item 1. |
Financial Statements |
|||
| Consolidated Statements of Operations – Three Months Ended March 31, 2003 and 2002 |
1 | |||
| Consolidated Balance Sheets – March 31, 2003 and December 31, 2002 |
2 | |||
| Consolidated Statements of Cash Flows – Three Months Ended March 31, 2003 and 2002 |
3 | |||
| 4 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
11 | ||
| Item 4. |
14 | |||
| PART II. OTHER INFORMATION |
||||
| Item 1. |
15 | |||
| Item 4. |
15 | |||
| Item 6. |
15 | |||
| 16 |
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 March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Revenue |
$ |
69,171 |
|
$ |
58,098 |
| ||
| Cost of goods sold |
|
33,128 |
|
|
26,799 |
| ||
| Gross profit |
|
36,043 |
|
|
31,299 |
| ||
| Operating expenses: |
||||||||
| Research and development |
|
7,598 |
|
|
7,089 |
| ||
| Selling, general and administrative |
|
14,718 |
|
|
13,819 |
| ||
| Total operating expenses |
|
22,316 |
|
|
20,908 |
| ||
| Earnings from operations |
|
13,727 |
|
|
10,391 |
| ||
| Interest expense |
|
177 |
|
|
318 |
| ||
| Other income, net |
|
(107 |
) |
|
(124 |
) | ||
| Earnings before income taxes |
|
13,657 |
|
|
10,197 |
| ||
| Income tax provision |
|
4,507 |
|
|
1,529 |
| ||
| Net earnings |
$ |
9,150 |
|
$ |
8,668 |
| ||
| Net earnings per share: |
||||||||
| Basic |
$ |
0.53 |
|
$ |
0.52 |
| ||
| Diluted |
$ |
0.51 |
|
$ |
0.49 |
| ||
The accompanying notes are an integral part of these consolidated financial statements.
1
FLIR SYSTEMS, INC.
(In thousands, except par value)
| March 31, 2003 |
December 31, 2002 |
|||||||
| (Unaudited) |
||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
48,087 |
|
$ |
46,606 |
| ||
| Accounts receivable, net |
|
57,748 |
|
|
55,798 |
| ||
| Inventories |
|
52,864 |
|
|
50,141 |
| ||
| Prepaid expenses and other current assets |
|
15,522 |
|
|
12,673 |
| ||
| Deferred income taxes |
|
8,887 |
|
|
8,887 |
| ||
| Total current assets |
|
183,108 |
|
|
174,105 |
| ||
| Property and equipment, net |
|
12,261 |
|
|
12,678 |
| ||
| Deferred income taxes, net |
|
25,977 |
|
|
25,977 |
| ||
| Intangible assets, net |
|
16,602 |
|
|
16,647 |
| ||
| Other assets |
|
5,918 |
|
|
4,415 |
| ||
| $ |
243,866 |
|
$ |
233,822 |
| |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
18,893 |
|
$ |
16,465 |
| ||
| Deferred revenue |
|
4,481 |
|
|
4,770 |
| ||
| Accrued payroll and related liabilities |
|
8,438 |
|
|
11,030 |
| ||
| Accrued product warranties |
|
3,449 |
|
|
3,432 |
| ||
| Advance payments from customers |
|
10,637 |
|
|
8,030 |
| ||
| Other current liabilities |
|
6,516 |
|
|
6,341 |
| ||
| Accrued income taxes |
|
3,154 |
|
|
2,558 |
| ||
| Total current liabilities |
|
55,568 |
|
|
52,626 |
| ||
| Pension and other long-term liabilities |
|
9,386 |
|
|
8,869 |
| ||
| Commitments and contingencies |
||||||||
| Shareholders’ equity: |
||||||||
| Preferred stock, $0.01 par value, 10,000 shares authorized; no shares issued at March 31, 2003, and December 31, 2002 |
|
— |
|
|
— |
| ||
| Common stock, $0.01 par value, 30,000 shares authorized, 17,306 and 17,300 shares issued at March 31, 2003, and December 31, 2002, respectively |
|
173 |
|
|
173 |
| ||
| Additional paid-in capital |
|
214,834 |
|
|
217,879 |
| ||
| Accumulated deficit |
|
(34,155 |
) |
|
(43,305 |
) | ||
| Accumulated other comprehensive loss |
|
(1,940 |
) |
|
(2,420 |
) | ||
| Total shareholders’ equity |
|
178,912 |
|
|
172,327 |
| ||
| $ |
243,866 |
|
$ |
233,822 |
| |||
The accompanying notes are an integral part of these consolidated financial statements.
2
FLIR SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net earnings |
$ |
9,150 |
|
$ |
8,668 |
| ||
| Earnings charges not affecting cash: |
||||||||
| Depreciation and amortization |
|
1,456 |
|
|
1,524 |
| ||
| Disposals and write-offs of property and equipment |
|
17 |
|
|
41 |
| ||
| Fair value adjustment on interest swap agreements |
|
— |
|
|
(418 |
) | ||
| Changes in operating assets and liabilities: |
||||||||
| (Increase) decrease in accounts receivable |
|
(1,578 |
) |
|
7,160 |
| ||
| Increase in inventories |
|
(2,282 |
) |
|
(5,713 |
) | ||
| Increase in prepaid expenses and other current assets |
|
(2,545 |
) |
|
(1,111 |
) | ||
| Increase in other assets |
|
(244 |
) |
|
(975 |
) | ||
| Increase in accounts payable |
|
2,274 |
|
|
3,510 |
| ||
| Decrease in deferred revenue |
|
(299 |
) |
|
(307 |
) | ||
| (Decrease) increase in accrued payroll and other liabilities |
|
(213 |
) |
|
132 |
| ||
| Increase in accrued income taxes |
|
540 |
|
|
1,042 |
| ||
| Increase in pension and other long-term liabilities |
|
465 |
|
|
137 |
| ||
| Cash provided by operating activities |
|
6,741 |
|
|
13,690 |
| ||
| Cash flows from investing activities: |
||||||||
| Additions to property and equipment |
|
(831 |
) |
|
(2,976 |
) | ||
| Proceeds on sale of property and equipment |
|
12 |
|
|
— |
| ||
| Investment in insurance contract |
|
(1,601 |
) |
|||||
| Cash used by investing activities |
|
(2,420 |
) |
|
(2,976 |
) | ||
| Cash flows from financing activities: |
||||||||
| Repayment of credit agreement |
|
— |
|
|
(19,900 |
) | ||
| Net increase in international credit line |
|
— |
|
|
279 |
| ||
| Repayment of capital leases |
|
— < | ||||||