FLIR Systems Inc. (FLIR) released its fourth-quarter and full year 2012 results. The company reported earnings from continuing operations of 52 cents, 6.1% above the Zacks Consensus Estimate of 49 cents and 8.3% above the prior-year earnings of 48 cents a share.
Revenue
Total revenue was $332.2 million, a decrease of 5% year over year. Total backlog at the end of Dec. 31 2012, was approximately $520 million, down $45 million during the quarter.
Divisional Revenue
Commercial Systems division’s revenue was $212.8 million in the quarter, down 5% year over year. Within the Commercial Systems division, the Thermal Vision and Measurement segment revenue decreased by 5% to $180.1 million. Commercial Systems' Raymarine segment revenue was $32.7 million, down 7% year over year.
Government Systems division’s revenue came in at $173.5 million in the quarter, down 4% year over year. The division was affected by a difficult market environment. Within the division, the Surveillance segment revenue declined 7% to $136.4 million. Detection segment revenue was $12.8 million, down 46% while Integrated Systems segment revenue was $24.4 million, up 134%.
Income and Expenses
Operating income for the quarter was $100 million compared with $109 million in the prior-year period. Selling and general expense was $71.1 million compared with $80.1 million whereas research and development expense was $34.1 million compared with $34.9 million.
Balance Sheet
Cash and cash equivalents were $321.7 million at the end of the quarter with long-term debt of $248.3 million and shareholders’ equity of $1.6 billion.
Cash flow from operations amounted to $112.8 million during the quarter. The company repurchased 4.5 million shares for $18.84 per share during the quarter. In addition, the Board of Directors approved a new share repurchase program authorizing up to 25 million shares to be repurchased over the next two years, replacing the previous program that expires on February 9, 2013.
Dividend
Concurrent with its earnings results, the company also declared a 29% increase in the quarterly cash dividend to 9 cents per share from 7 cents. The dividend is payable on March 8, 2013, to shareholders of record as of February 19, 2013.
Outlook
FLIR Systems expects earnings per share for 2013 to be in the range of $1.56 to $1.66 per share, reflecting an increase of 8% to 14% from 2012. Total revenue is expected to be in the range of $1.5 billion to $1.6 billion, an increase of 7% to 14% from 2012.
Summary
The year 2012 proved to be a demanding year for FLIR Systems, for many of its businesses. However, the company used this difficult environment to improve its business.
FLIR Systems has focused on building a strong backlog of orders from a global base of customers, shifted selling efforts from Europe to the Far East. FLIR has rationalized its operating centers, improved gross margins and introduced strategic pricing and many efficiency improvements in its businesses.
In addition, FLIR made two strategic acquisitions, which are expected to be accretive the earnings by 2013.
FLIR and its peers such as Tyco International |(TYC) and Jacobs Engineering (JEC) all carry a Zacks Rank #2 (Buy).
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