Flir fined $30m for ITAR violation in Q1 earnings
Flir Systems has incurred a $30 million fine for alleged violations of the International Traffic in Arms Regulation (ITAR), with $15 million suspended based on verifiable past and future expenditures for remedial compliance measures.
The penalty impacted Flir’s first quarter 2018 generally accepted accounting principles (GAAP) results. GAAP operating income in the first quarter decreased 6 per cent to $55.5 million, compared to $59.1 million in the prior year.
However, GAAP gross profit in the first quarter increased 14 per cent to $217.9 million, or 49.6 per cent of revenue, compared to $191.3 million, or 47.0 per cent of revenue in the first quarter of 2017.
Flir’s first quarter 2018 revenue was $439.6 million, up 8 per cent compared to first quarter 2017 revenue.
Revenue from the industrial business unit was $170.7 million, an increase of 10 per cent over the first quarter results of last year, thanks to increased handheld thermal imager and camera core sales. The government and defence business unit contributed $159.3 million of revenue during the first quarter, up 15 per cent over the prior year.
The commercial business unit recorded revenue of $109.6 million in the first quarter, down 4 per cent from the prior year, but up 12 per cent excluding revenue related to the divested portion of the security division.
Flir now expects revenue in 2018 to be in the range of $1.760 billion to $1.790 billion, increased from the previous $1.730 billion to $1.760 billion amount.
Jim Cannon, president and CEO, commented: ‘We have an improved outlook for the year as we commit to innovating around our customers’ needs while we fuel, feed, and focus our businesses. Our repurchase of 1.7 million shares in the quarter is further demonstration of how we create value for our shareholders.’