FLIR Announces Realignment of Global Operations, Reports Prelim. Q3 EPS $0.32-0.33, FY Sales $1.45-1.5B

FLIR Systems, Inc.

today announced that it is realigning multiple production and engineering organizations and streamlining its global operations in order to better position FLIR(R) to develop, produce and market products more quickly and cost-effectively. The realignment includes closing up to six not-to-scale sites in the United States and Europe and a proposed transfer of those operations to larger FLIR facilities. FLIR also intends to consolidate its optics and laser manufacturing businesses to better realize the benefits of vertical integration in these areas. Management expects savings from these actions to exceed $20 million per year when fully implemented. FLIR expects to record a pre-tax restructuring charge of approximately $27 million to $30 million in the fourth quarter of 2013 related to these and additional cost reduction measures. FLIR also announced today preliminary revenue and earnings per share results for the third quarter of fiscal year 2013. Third quarter preliminary results were negatively impacted by weakness in markets that have exposure to the U.S. federal government. Extended procurement and export licensing processes at federal government agencies caused shipments to be lower than anticipated in FLIR's Surveillance segment and the cores and components line of business within the Thermal Vision and Measurement segment. As a result, FLIR now expects to report revenues of approximately $358 million to $360 million and earnings per diluted share of approximately $0.32 to $0.33 for the three months ended September 30, 2013. Margins in these businesses were negatively impacted by product mix and factory absorption due to lower-than-anticipated unit volumes. The preliminary informatio n provided above is based on FLIR's current estimate of results from operations for the third quarter of 2013 and remains subject to change based on the ongoing review of results. Given the influences on the third quarter described above, and anticipated impacts on the fourth quarter, management now expects 2013 revenue to be in the range of $1.45 billion to $1.5 billion and net income excluding the restructuring charges discussed above to be in the range of $1.38 to $1.43 per diluted share. These estimates compare with management's prior outlook of revenue of $1.5 billion to $1.6 billion and net income of $1.56 to $1.66 per diluted share.