Thermal camera manufacturer Flir Systems has recorded $1.8 billion in yearly revenue for 2017, an 8 per cent increase over the $1.66 billion recorded last year.
GAAP net earnings for the year were $107.2 million, down approximately 36 per cent compared to 2016’s $166.6 million. Earnings were negatively impacted by the non-cash loss on net assets held for sale and $58.4 million higher discrete tax items compared to the prior year.
Fourth quarterly revenues totalling $494.8 million were posted to conclude the year, an increase of 4 per cent year-on-year from $474.7 million. A GAAP net loss of $50.3 million was experienced by the firm for the quarter, compared to last year’s fourth quarter net earnings of $61.5 million.
The results were negatively impacted by the non-cash loss on the net assets held for sale, as well as $92.7 million of discrete tax items associated with the enactment of US tax reform. Adjusted net earnings in the fourth quarter were $81.8 million, or $0.58 per diluted share, a 12 per cent increase over the $0.52 adjusted earnings per diluted share from the fourth quarter of 2016.
‘We are pleased with our fourth quarter results, particularly the revenue growth and double-digit adjusted earnings growth,’ commented Jim Cannon, president and CEO of Flir. ‘We reached our highest quarterly adjusted operating margin since 2012, finishing a year that saw record levels of revenue and adjusted earnings per share. This was accomplished during a year of transition that included an operational realignment, changes to the management team, and portfolio rationalisation that resulted in the divestment of our Lorex security business.’
Flir completed the sale of its Canadian security products subsidiary Lorex earlier this month in a transaction that also included its Toronto-headquartered small and medium-sized security products business. Lorex was bought by Flir for $60 million at the start of 2013.
Together the two sold businesses generated revenue totalling $140 million in 2017. Under the terms of the transaction, Flir will receive approximately $29 million in cash and expects to record a GAAP non-cash charge of approximately $23.6 million related to the divestiture.
Full year 2017 revenue from the surveillance segment was $545.8 million, 2 per cent higher than the previous year. Instruments segment revenue increased by 6 per cent throughout the year to $357.8 million, while the revenue from the security segment decreased by 4 per cent to $231.5 million.
The OEM and emerging markets revenue underwent a significant increase of 42 per cent throughout the year to $347.2 million, driven by the addition of the Integrated Imaging Solutions line of business - formerly Point Grey - acquired in 2016. Lastly, revenue from the maritime segment increased by 2 per cent to $189.7 million in 2017, while revenue from the detection segment also increased by 4 per cent to $128.5 million.
Cash provided by operations during 2017 was $308.3 million, compared to $319.8 million in the prior year.
Flir's backlog of firm orders for delivery within the next twelve months was approximately $652 million as of 31 December 2017, an increase of $60 million, or 10 per cent, over the prior year.
The firm estimates 2018 revenue to be in the range of $1.73 billion to $1.76 billion. This represents 4 to 6 per cent of organic revenue growth.