flir-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.


			For the quarterly period ended			March 31, 2021


☐			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 000-21918

FLIR SYSTEMS, INC.

(Exact name of registrant as specified in its charter)


Delaware		93-0708501
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

27700 SW Parkway Avenue,		97070
Wilsonville,	Oregon
(Address of principal executive offices)		(Zip Code)

(503) 498-3547

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	FLIR	NASDAQ	Global Select Stock Market

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 30, 2021, there were 131,932,461 shares of the registrant’s common stock, $0.01 par value, outstanding.

INDEX


PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Income - Three Months Ended March 31, 2021 and 20 20 (unaudited)	1
	Consolidated Statements of Comprehensive Income (Loss) - Three Months Ended March 3 1 , 202 1 and 20 20 (unaudited)	2
	Consolidated Balance Sheets - March 3 1 , 202 1 and December 31, 20 20 (unaudited)	3
	Consolidated Statements of Shareholders' Equity - Three Months Ended March 31 , 202 1 and 20 20 (unaudited)	4
	Consolidated Statements of Cash Flows - Three Months Ended March 3 1 , 202 1 and 20 20 (unaudited)	5
	Notes to the Consolidated Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	29
Item 4.	Controls and Procedures	29
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
Signature		32

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FLIR SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(Unaudited)


	Three Months Ended
	March 31,
	2021		2020
Revenue	$	467,313	$	450,923
Cost of goods sold	258,115		231,555
Gross profit	209,198		219,368
Operating expenses:
Research and development	52,246		53,847
Selling, general and administrative	103,868		116,242
Restructuring expenses	622		20,784

Total operating expenses	156,736		190,873
Earnings from operations	52,462		28,495
Interest expense	6,115		6,961
Interest income	(41)		(349)

Other income (loss), net	(3,622)		(1,315)
Earnings before income taxes	50,010		23,198
Income tax provision	11,203		7,774
Net earnings	$	38,807	$	15,424

Net earnings per share:
Basic	$	0.30	$	0.12
Diluted	$	0.29	$	0.11

Weighted average shares outstanding:
Basic	131,183		133,596
Diluted	132,596		134,927

The accompanying notes are an integral part of these consolidated financial statements.

FLIR SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(Unaudited)


	Three Months Ended
	March 31,
	2021		2020
Net earnings	$	38,807	$	15,424
Other comprehensive income (loss), net of tax:
Fair value adjustment on derivatives instruments designated as hedges (1)	(578)		2,753


Foreign currency translation adjustments	256		(20,285)
Total other comprehensive income (loss)	(322)		(17,532)
Comprehensive income (loss)	$	38,485	$	(2,108)

_________________________

(1) The tax effects on interest rate swap contracts for the three months ended March 31, 2021 and 2020 were a gain of $0.1 million and a loss of $0.1 million, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

FLIR SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except for par value)

(Unaudited)


	March 31,		December 31,
	2021		2020
ASSETS
Current assets:
Cash and cash equivalents	$	277,303	$	297,795
Accounts receivable, net	391,331		353,561
Inventories	457,007		472,237

Prepaid expenses and other current assets	97,568		104,646
Total current assets	1,223,209		1,228,239
Property and equipment, net	269,269		267,682
Deferred income taxes, net	35,610		36,210
Goodwill	1,386,847		1,394,364
Intangible assets, net	197,632		209,636

Other assets	116,235		116,217
Total assets	$	3,228,802	$	3,252,348
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	150,541	$	157,592
Deferred revenue	28,568		25,862
Accrued payroll and related liabilities	77,330		98,911
Accrued product warranties	18,397		17,019
Advance payments from customers	13,730		10,940
Accrued expenses	34,617		41,347
Accrued income taxes	27,852		28,941

Other current liabilities	44,708		44,053

Long-term debt, current portion	12,945		13,473
Total current liabilities	408,688		438,138
Long-term debt, net of current portion	712,866		724,919
Deferred income taxes	43,159		43,708
Accrued income taxes	60,699		60,248
Other long-term liabilities	93,516		101,961

Shareholders’ equity:
Preferred stock, $0.01 par value, 10,000 shares authorized; no shares issued at March 31, 2021, and December 31, 2020	—		—
Common stock, $0.01 par value, 500,000 shares authorized; 131,575 and 131,360 shares issued, 131,368 and 131,153 shares outstanding at March 31, 2021, and December 31, 2020, respectively, and additional paid-in capital	42,101		31,767
Retained earnings	2,033,585		2,017,097
Treasury stock - at cost - 207 shares of common stock at March 31, 2021, and December 31, 2020, respectively	(7,504)		(7,504)
Accumulated other comprehensive loss	(158,308)		(157,986)
Total shareholders’ equity	1,909,874		1,883,374
Total liabilities and shareholders' equity	$	3,228,802	$	3,252,348

The accompanying notes are an integral part of these consolidated financial statements.

FLIR SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(in thousands, except for per share amounts)

(Unaudited)

For the three months ended March 31, 2021:


	Common Stock and Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Earnings (Loss)		Total Shareholders' Equity
Balance, December 31, 2020	$	31,767	$	2,017,097	$	(7,504)	$	(157,986)	$	1,883,374
Net earnings	—		38,807		—		—		38,807

Stock issued for business acquisition - unearned	205		—		—		—		205
Common stock issued pursuant to stock-based compensation plans, net of shares withheld for taxes	249		—		—		—		249
Stock-based compensation

SEC Form 10-Q filed by FLIR Systems, Inc.