x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|
Oregon
|
|
93-0708501
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
27700 SW Parkway Avenue,
Wilsonville, Oregon
|
|
97070
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
¨
|
|
Smaller reporting company
|
¨
|
|
|
|
Item 1.
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
||
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
Item 5.
|
||
|
|
|
Item 6.
|
||
|
|
|
|
Item 1.
|
Financial Statements
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
389,329
|
|
|
$
|
338,291
|
|
|
$
|
737,912
|
|
|
$
|
686,743
|
|
Cost of goods sold
|
199,288
|
|
|
168,262
|
|
|
363,884
|
|
|
333,988
|
|
||||
Gross profit
|
190,041
|
|
|
170,029
|
|
|
374,028
|
|
|
352,755
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
39,601
|
|
|
37,510
|
|
|
76,285
|
|
|
74,080
|
|
||||
Selling, general and administrative
|
80,168
|
|
|
71,798
|
|
|
158,341
|
|
|
149,658
|
|
||||
Total operating expenses
|
119,769
|
|
|
109,308
|
|
|
234,626
|
|
|
223,738
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings from operations
|
70,272
|
|
|
60,721
|
|
|
139,402
|
|
|
129,017
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
3,767
|
|
|
2,768
|
|
|
6,664
|
|
|
5,834
|
|
||||
Interest income
|
(274
|
)
|
|
(377
|
)
|
|
(465
|
)
|
|
(805
|
)
|
||||
Other expense (income), net
|
175
|
|
|
240
|
|
|
(589
|
)
|
|
(984
|
)
|
||||
Earnings from continuing operations before income taxes
|
66,604
|
|
|
58,090
|
|
|
133,792
|
|
|
124,972
|
|
||||
Income tax provision
|
16,446
|
|
|
15,685
|
|
|
31,998
|
|
|
33,742
|
|
||||
Earnings from continuing operations
|
50,158
|
|
|
42,405
|
|
|
101,794
|
|
|
91,230
|
|
||||
Loss from discontinued operations, net of tax
|
—
|
|
|
(1,312
|
)
|
|
—
|
|
|
(1,998
|
)
|
||||
Net earnings
|
$
|
50,158
|
|
|
$
|
41,093
|
|
|
$
|
101,794
|
|
|
$
|
89,232
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.35
|
|
|
$
|
0.28
|
|
|
$
|
0.71
|
|
|
$
|
0.59
|
|
Discontinued operations
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
|
(0.01
|
)
|
||||
Basic earnings per share
|
$
|
0.35
|
|
|
$
|
0.27
|
|
|
$
|
0.71
|
|
|
$
|
0.58
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.35
|
|
|
$
|
0.27
|
|
|
$
|
0.70
|
|
|
$
|
0.58
|
|
Discontinued operations
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
|
(0.01
|
)
|
||||
Diluted earnings per share
|
$
|
0.35
|
|
|
$
|
0.27
|
|
|
$
|
0.70
|
|
|
$
|
0.57
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
142,085
|
|
|
153,172
|
|
|
143,350
|
|
|
153,829
|
|
||||
Diluted
|
143,774
|
|
|
155,033
|
|
|
144,981
|
|
|
155,983
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
$
|
50,158
|
|
|
$
|
41,093
|
|
|
$
|
101,794
|
|
|
$
|
89,232
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(4,529
|
)
|
|
(24,020
|
)
|
|
(17,027
|
)
|
|
(6,881
|
)
|
||||
Fair value adjustment on interest rate swap contracts
|
1,527
|
|
|
—
|
|
|
1,527
|
|
|
—
|
|
||||
Comprehensive income
|
$
|
47,156
|
|
|
$
|
17,073
|
|
|
$
|
86,294
|
|
|
$
|
82,351
|
|
|
June 30,
2013 |
|
December 31, 2012 (as adjusted)
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
492,433
|
|
|
$
|
321,739
|
|
Accounts receivable, net
|
278,265
|
|
|
335,163
|
|
||
Inventories
|
364,671
|
|
|
381,378
|
|
||
Prepaid expenses and other current assets
|
102,530
|
|
|
96,006
|
|
||
Deferred income taxes, net
|
30,953
|
|
|
30,960
|
|
||
Total current assets
|
1,268,852
|
|
|
1,165,246
|
|
||
Property and equipment, net
|
216,855
|
|
|
211,615
|
|
||
Deferred income taxes, net
|
31,826
|
|
|
32,223
|
|
||
Goodwill
|
558,281
|
|
|
560,784
|
|
||
Intangible assets, net
|
162,806
|
|
|
175,823
|
|
||
Other assets
|
47,896
|
|
|
41,442
|
|
||
|
$
|
2,286,516
|
|
|
$
|
2,187,133
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
89,797
|
|
|
$
|
94,156
|
|
Deferred revenue
|
26,715
|
|
|
29,465
|
|
||
Accrued payroll and related liabilities
|
49,565
|
|
|
41,506
|
|
||
Accrued product warranties
|
13,638
|
|
|
13,169
|
|
||
Advance payments from customers
|
15,854
|
|
|
12,150
|
|
||
Accrued expenses
|
43,971
|
|
|
32,772
|
|
||
Accrued income taxes
|
5,914
|
|
|
11,943
|
|
||
Other current liabilities
|
4,403
|
|
|
6,406
|
|
||
Current portion long term debt
|
15,000
|
|
|
—
|
|
||
Total current liabilities
|
264,857
|
|
|
241,567
|
|
||
Long-term debt
|
379,799
|
|
|
248,319
|
|
||
Deferred income taxes
|
16,698
|
|
|
15,549
|
|
||
Accrued income taxes
|
22,398
|
|
|
22,812
|
|
||
Pension and other long-term liabilities
|
45,676
|
|
|
58,985
|
|
||
Commitments and contingencies
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, $0.01 par value, 10,000 shares authorized; no shares issued at June 30, 2013, and December 31, 2012
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 500,000 shares authorized, 141,989 and 145,814 shares issued at June 30, 2013, and December 31, 2012, respectively, and additional paid-in capital
|
68,347
|
|
|
171,546
|
|
||
Retained earnings
|
1,494,700
|
|
|
1,418,814
|
|
||
Accumulated other comprehensive (loss) earnings
|
(5,959
|
)
|
|
9,541
|
|
||
Total shareholders’ equity
|
1,557,088
|
|
|
1,599,901
|
|
||
|
$
|
2,286,516
|
|
|
$
|
2,187,133
|
|
|
Six Months Ended
June 30, |
||||||
|
2013
|
|
2012
|
||||
CASH PROVIDED BY OPERATING ACTIVITIES:
|
|
|
|
||||
Net earnings
|
$
|
101,794
|
|
|
$
|
89,232
|
|
Income items not affecting cash:
|
|
|
|
||||
Depreciation and amortization
|
30,102
|
|
|
30,016
|
|
||
Deferred income taxes
|
26
|
|
|
95
|
|
||
Stock-based compensation arrangements
|
13,327
|
|
|
13,400
|
|
||
Other non-cash items
|
(577
|
)
|
|
(1,350
|
)
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
||||
Decrease in accounts receivable
|
54,205
|
|
|
54,741
|
|
||
Decrease (increase) in inventories
|
13,732
|
|
|
(17,143
|
)
|
||
Increase in prepaid expenses and other current assets
|
(7,243
|
)
|
|
(11,503
|
)
|
||
Increase in other assets
|
(3,048
|
)
|
|
(423
|
)
|
||
Decrease in accounts payable
|
(3,865
|
)
|
|
(4,296
|
)
|
||
Decrease in deferred revenue
|
(2,508
|
)
|
|
(437
|
)
|
||
Increase (decrease) in accrued payroll and other liabilities
|
7,618
|
|
|
(17,580
|
)
|
||
Decrease in accrued income taxes
|
(6,629
|
)
|
|
(13,247
|
)
|
||
Increase in pension and other long-term liabilities
|
329
|
|
|
4,726
|
|
||
Cash provided by operating activities
|
197,263
|
|
|
126,231
|
|
||
CASH USED BY INVESTING ACTIVITIES:
|
|
|
|
||||
Additions to property and equipment, net
|
(23,291
|
)
|
|
(26,429
|
)
|
||
Business acquisitions, net of cash acquired
|
(5,165
|
)
|
|
—
|
|
||
Other investments
|
—
|
|
|
(3,000
|
)
|
||
Cash used by investing activities
|
(28,456
|
)
|
|
(29,429
|
)
|
||
CASH PROVIDED (USED) BY FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from long-term debt, including current portion
|
150,000
|
|
|
—
|
|
||
Repayments of long-term debt
|
(3,750
|
)
|
|
—
|
|
||
Repurchase of common stock
|
(116,830
|
)
|
|
(90,201
|
)
|
||
Dividends paid
|
(25,909
|
)
|
|
(21,485
|
)
|
||
Proceeds from shares issued pursuant to stock-based compensation plans
|
3,885
|
|
|
5,656
|
|
||
Excess tax benefit of stock options exercised
|
469
|
|
|
552
|
|
||
Other financing activities
|
(966
|
)
|
|
(140
|
)
|
||
Cash provided (used) by financing activities
|
6,899
|
|
|
(105,618
|
)
|
||
Effect of exchange rate changes on cash
|
(5,012
|
)
|
|
(2,259
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
170,694
|
|
|
(11,075
|
)
|
||
Cash and cash equivalents, beginning of period
|
321,739
|
|
|
440,846
|
|
||
Cash and cash equivalents, end of period
|
$
|
492,433
|
|
|
$
|
429,771
|
|
Note 1.
|
Basis of Presentation
|
Note 2.
|
Stock-based Compensation
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Cost of goods sold
|
$
|
578
|
|
|
$
|
917
|
|
|
$
|
1,231
|
|
|
$
|
1,621
|
|
Research and development
|
1,206
|
|
|
1,298
|
|
|
2,287
|
|
|
2,474
|
|
||||
Selling, general and administrative
|
5,846
|
|
|
5,650
|
|
|
9,809
|
|
|
9,305
|
|
||||
Stock-based compensation expense before income taxes
|
7,630
|
|
|
7,865
|
|
|
13,327
|
|
|
13,400
|
|
||||
Income tax benefit
|
(2,543
|
)
|
|
(2,389
|
)
|
|
(4,402
|
)
|
|
(4,063
|
)
|
||||
Total stock-based compensation expense after income taxes
|
$
|
5,087
|
|
|
$
|
5,476
|
|
|
$
|
8,925
|
|
|
$
|
9,337
|
|
|
June 30,
|
||||||
|
2013
|
|
2012
|
||||
Capitalized in inventory
|
$
|
755
|
|
|
$
|
697
|
|
Note 2.
|
Stock-based Compensation - (Continued)
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Stock option awards:
|
|
|
|
|
|
|
|
||||
Risk-free interest rate
|
0.3
|
%
|
|
0.4
|
%
|
|
0.3
|
%
|
|
0.4
|
%
|
Expected dividend yield
|
1.5
|
%
|
|
1.3
|
%
|
|
1.5
|
%
|
|
1.3
|
%
|
Expected term
|
4.3 years
|
|
|
4.2 years
|
|
|
4.3 years
|
|
|
4.2 years
|
|
Expected volatility
|
33.8
|
%
|
|
39.7
|
%
|
|
33.8
|
%
|
|
39.7
|
%
|
Market-based restricted stock awards:
|
|
|
|
|
|
|
|
||||
Risk-free interest rate
|
—
|
|
|
0.4
|
%
|
|
0.3
|
%
|
|
0.4
|
%
|
Expected dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Expected term
|
—
|
|
|
3.0 years
|
|
|
2.2 years
|
|
|
3.0 years
|
|
Expected volatility
|
—
|
|
|
30.7
|
%
|
|
28.8
|
%
|
|
30.7
|
%
|
Expected volatility of S&P 500
|
—
|
|
|
19.6
|
%
|
|
18.1
|
%
|
|
19.6
|
%
|
Employee stock purchase plan:
|
|
|
|
|
|
|
|
||||
Risk-free interest rate
|
0.1
|
%
|
|
0.2
|
%
|
|
0.1
|
%
|
|
0.2
|
%
|
Expected dividend yield
|
1.5
|
%
|
|
1.3
|
%
|
|
1.5
|
%
|
|
1.3
|
%
|
Expected term
|
6 months
|
|
|
6 months
|
|
|
6 months
|
|
|
6 months
|
|
Expected volatility
|
25.0
|
%
|
|
27.4
|
%
|
|
25.0
|
%
|
|
27.4
|
%
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Stock Option Awards:
|
|
|
|
|
|
|
|
||||||||
Weighted average grant date fair value per share
|
$
|
5.86
|
|
|
$
|
6.43
|
|
|
$
|
5.86
|
|
|
$
|
6.43
|
|
Total fair value of awards granted
|
$
|
5,817
|
|
|
$
|
4,104
|
|
|
$
|
5,817
|
|
|
$
|
4,104
|
|
Total fair value of awards vested
|
$
|
5,013
|
|
|
$
|
5,970
|
|
|
$
|
5,026
|
|
|
$
|
5,985
|
|
Total intrinsic value of options exercised
|
$
|
652
|
|
|
$
|
939
|
|
|
$
|
1,839
|
|
|
$
|
2,358
|
|
Restricted Stock Unit Awards:
|
|
|
|
|
|
|
|
||||||||
Weighted average grant date fair value per share
|
$
|
23.43
|
|
|
$
|
17.21
|
|
|
$
|
23.38
|
|
|
$
|
17.22
|
|
Total fair value of awards granted
|
$
|
25,188
|
|
|
$
|
30,471
|
|
|
$
|
25,330
|
|
|
$
|
30,522
|
|
Total fair value of awards vested
|
$
|
13,134
|
|
|
$
|
11,763
|
|
|
$
|
13,319
|
|
|
$
|
12,103
|
|
Employee Stock Purchase Plan:
|
|
|
|
|
|
|
|
||||||||
Weighted average grant date fair value per share
|
$
|
5.25
|
|
|
$
|
5.02
|
|
|
$
|
5.25
|
|
|
$
|
5.02
|
|
Total fair value of shares estimated to be issued
|
$
|
552
|
|
|
$
|
1,106
|
|
|
$
|
552
|
|
|
$
|
1,106
|
|
|
Shares
(in thousands)
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
||||||
Outstanding at December 31, 2012
|
6,642
|
|
|
$
|
21.64
|
|
|
4.7
|
|
|
|
||
Granted
|
993
|
|
|
24.31
|
|
|
|
|
|
||||
Exercised
|
(141
|
)
|
|
12.42
|
|
|
|
|
|
||||
Forfeited
|
(8
|
)
|
|
21.40
|
|
|
|
|
|
||||
Outstanding at June 30, 2013
|
7,486
|
|
|
$
|
22.17
|
|
|
5.0
|
|
|
$
|
45,081
|
|
Exercisable at June 30, 2013
|
6,154
|
|
|
$
|
21.63
|
|
|
4.1
|
|
|
$
|
41,162
|
|
Vested and expected to vest at June 30, 2013
|
7,420
|
|
|
$
|
22.15
|
|
|
5.0
|
|
|
$
|
44,885
|
|
|
Shares
(in thousands)
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
Outstanding at December 31, 2012
|
2,372
|
|
|
$
|
21.30
|
|
Granted
|
1,095
|
|
|
23.38
|
|
|
Vested and distributed
|
(549
|
)
|
|
26.73
|
|
|
Forfeited
|
(114
|
)
|
|
25.03
|
|
|
Outstanding at June 30, 2013
|
2,804
|
|
|
$
|
20.94
|
|
Note 3.
|
Net Earnings Per Share
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Numerator for earnings per share:
|
|
|
|
|
|
|
|
||||||||
Earnings from continuing operations
|
$
|
50,158
|
|
|
$
|
42,405
|
|
|
$
|
101,794
|
|
|
$
|
91,230
|
|
Loss from discontinued operations
|
—
|
|
|
(1,312
|
)
|
|
—
|
|
|
(1,998
|
)
|
||||
Net earnings for basic and diluted earnings per share
|
$
|
50,158
|
|
|
$
|
41,093
|
|
|
$
|
101,794
|
|
|
$
|
89,232
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator for earnings per share:
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding
|
142,085
|
|
|
153,172
|
|
|
143,350
|
|
|
153,829
|
|
||||
Assumed exercises of stock options and vesting of restricted stock awards, net of shares assumed reacquired under the treasury stock method
|
1,689
|
|
|
1,861
|
|
|
1,631
|
|
|
2,154
|
|
||||
Weighted average diluted shares outstanding
|
143,774
|
|
|
155,033
|
|
|
144,981
|
|
|
155,983
|
|
Note 4.
|
Fair Value of Financial Instruments
|
Note 5.
|
Derivative Financial Instruments
|
Note 5.
|
Derivative Financial Instruments - (Continued)
|
|
June 30,
2013 |
|
December 31,
2012 |
||||
Swedish kronor
|
$
|
86,156
|
|
|
$
|
98,385
|
|
British pound sterling
|
4,793
|
|
|
15,619
|
|
||
Australian dollar
|
4,075
|
|
|
7,022
|
|
||
Japanese yen
|
4,122
|
|
|
5,157
|
|
||
Euro
|
17,777
|
|
|
2,232
|
|
||
Brazilian real
|
4,240
|
|
|
—
|
|
||
Other
|
843
|
|
|
622
|
|
||
|
$
|
122,006
|
|
|
$
|
129,037
|
|
|
June 30, 2013
|
|
December 31, 2012
|
||||||||||||
|
Other Current Assets
|
|
Other Current Liabilities
|
|
Other Current Assets
|
|
Other Current Liabilities
|
||||||||
Foreign exchange contracts
|
$
|
32
|
|
|
$
|
1,955
|
|
|
$
|
2,106
|
|
|
$
|
229
|
|
Contract Date
|
|
Notional Amount
(in millions)
|
|
Fixed Rate
|
|
Effective Date
|
|
Maturity Date
|
|||
March 15, 2013
|
|
$
|
73.1
|
|
|
1.0165
|
%
|
|
April 5, 2013
|
|
March 31, 2019
|
March 29, 2013
|
|
73.1
|
|
|
0.97
|
%
|
|
April 5, 2013
|
|
March 31, 2019
|
Note 6.
|
Accounts Receivable
|
Note 7.
|
Inventories
|
|
June 30,
2013 |
|
December 31,
2012 |
||||
Raw material and subassemblies
|
$
|
223,805
|
|
|
$
|
231,273
|
|
Work-in-progress
|
54,218
|
|
|
50,644
|
|
||
Finished goods
|
86,648
|
|
|
99,461
|
|
||
|
$
|
364,671
|
|
|
$
|
381,378
|
|
Note 8.
|
Property and Equipment
|
Note 9.
|
Goodwill
|
|
Thermal Vision and Measurement
|
|
Raymarine
|
|
Surveillance
|
|
Detection
|
|
Integrated Systems
|
|
Total
|
||||||||||||
Balance, December 31, 2012
(as originally reported)
|
$
|
253,226
|
|
|
$
|
100,744
|
|
|
$
|
90,817
|
|
|
$
|
38,162
|
|
|
$
|
20,129
|
|
|
$
|
503,078
|
|
Adjustments
|
57,706
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,706
|
|
||||||
Balance, December 31, 2012
|
310,932
|
|
|
100,744
|
|
|
90,817
|
|
|
38,162
|
|
|
20,129
|
|
|
560,784
|
|
||||||
Goodwill from acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,438
|
|
|
2,438
|
|
||||||
Currency translation adjustments
|
(1,916
|
)
|
|
(2,869
|
)
|
|
(156
|
)
|
|
—
|
|
|
—
|
|
|
(4,941
|
)
|
||||||
Balance, June 30, 2013
|
$
|
309,016
|
|
|
$
|
97,875
|
|
|
$
|
90,661
|
|
|
$
|
38,162
|
|
|
$
|
22,567
|
|
|
$
|
558,281
|
|
Note 10.
|
Intangible Assets
|
Note 11.
|
Credit Agreements
|
Note 12.
|
Accrued Product Warranties
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Accrued product warranties, beginning of period
|
$
|
16,652
|
|
|
$
|
15,994
|
|
|
$
|
16,152
|
|
|
$
|
16,046
|
|
Amounts paid for warranty services
|
(1,754
|
)
|
|
(2,090
|
)
|
|
(4,146
|
)
|
|
(4,257
|
)
|
||||
Warranty provisions for products sold
|
1,835
|
|
|
1,299
|
|
|
4,541
|
|
|
3,134
|
|
||||
Currency translation adjustments and other
|
58
|
|
|
119
|
|
|
244
|
|
|
399
|
|
||||
Accrued product warranties, end of period
|
$
|
16,791
|
|
|
$
|
15,322
|
|
|
$
|
16,791
|
|
|
$
|
15,322
|
|
Current accrued product warranties, end of period
|
|
|
|
|
$
|
13,638
|
|
|
$
|
13,232
|
|
||||
Long-term accrued product warranties, end of period
|
|
|
|
|
$
|
3,153
|
|
|
$
|
2,090
|
|
Note 13.
|
Long-Term Debt
|
|
June 30,
2013 |
|
December 31,
2012 |
||||
Unsecured notes
|
$
|
250,000
|
|
|
$
|
250,000
|
|
Term loan
|
146,250
|
|
|
—
|
|
||
Unamortized issuance costs of unsecured notes
|
(1,451
|
)
|
|
(1,681
|
)
|
||
|
$
|
394,799
|
|
|
$
|
248,319
|
|
Note 14.
|
Shareholders’ Equity
|
Common stock and additional paid-in capital, December 31, 2012
|
$
|
171,546
|
|
Excess income tax benefit of common stock options exercised
|
(71
|
)
|
|
Common stock issued pursuant to stock-based compensation plans, net
|
92
|
|
|
Stock-based compensation costs
|
13,610
|
|
|
Repurchase of common stock
|
(116,830
|
)
|
|
Common stock and additional paid-in capital, June 30, 2013
|
$
|
68,347
|
|
Note 15.
|
Contingencies
|
Note 16.
|
Income Taxes
|
Note 16.
|
Income Taxes - (Continued)
|
|
Tax Years:
|
US Federal
|
2009 – 2012
|
State of Oregon
|
2008 – 2012
|
State of Massachusetts
|
2008 – 2012
|
State of California
|
2007 – 2012
|
Sweden
|
2007 – 2012
|
United Kingdom
|
2006 – 2012
|
Belgium
|
2011 - 2012
|
Note 17.
|
Operating Segments and Related Information
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenue – External Customers:
|
|
|
|
|
|
|
|
||||||||
Thermal Vision and Measurement
|
$
|
174,962
|
|
|
$
|
142,641
|
|
|
$
|
342,351
|
|
|
$
|
298,381
|
|
Raymarine
|
46,887
|
|
|
47,181
|
|
|
91,288
|
|
|
93,785
|
|
||||
Surveillance
|
118,618
|
|
|
119,493
|
|
|
228,859
|
|
|
234,090
|
|
||||
Detection
|
14,367
|
|
|
15,713
|
|
|
26,913
|
|
|
35,066
|
|
||||
Integrated Systems
|
34,495
|
|
|
13,263
|
|
|
48,501
|
|
|
25,421
|
|
||||
|
$
|
389,329
|
|
|
$
|
338,291
|
|
|
$
|
737,912
|
|
|
$
|
686,743
|
|
Revenue – Intersegments:
|
|
|
|
|
|
|
|
||||||||
Thermal Vision and Measurement
|
$
|
4,233
|
|
|
$
|
4,403
|
|
|
$
|
7,196
|
|
|
$
|
9,451
|
|
Raymarine
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Surveillance
|
8,490
|
|
|
7,083
|
|
|
14,280
|
|
|
11,986
|
|
||||
Detection
|
1,821
|
|
|
326
|
|
|
4,262
|
|
|
776
|
|
||||
Integrated Systems
|
390
|
|
|
473
|
|
|
698
|
|
|
1,047
|
|
||||
Eliminations
|
(14,934
|
)
|
|
(12,285
|
)
|
|
(26,436
|
)
|
|
(23,264
|
)
|
||||
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Earnings (loss) from operations:
|
|
|
|
|
|
|
|
||||||||
Thermal Vision and Measurement
|
$
|
41,816
|
|
|
$
|
27,394
|
|
|
$
|
81,765
|
|
|
$
|
66,736
|
|
Raymarine
|
6,318
|
|
|
5,728
|
|
|
12,295
|
|
|
9,569
|
|
||||
Surveillance
|
35,346
|
|
|
40,821
|
|
|
70,300
|
|
|
75,722
|
|
||||
Detection
|
1,319
|
|
|
(1,767
|
)
|
|
1,911
|
|
|
(330
|
)
|
||||
Integrated Systems
|
30
|
|
|
331
|
|
|
209
|
|
|
(66
|
)
|
||||
Other
|
(14,557
|
)
|
|
(11,786
|
)
|
|
(27,078
|
)
|
|
(22,614
|
)
|
||||
|
$
|
70,272
|
|
|
$
|
60,721
|
|
|
$
|
139,402
|
|
|
$
|
129,017
|
|
|
June 30,
2013 |
|
December 31,
2012 |
||||
Segment assets (accounts receivable, net and inventories):
|
|
|
|
||||
Thermal Vision and Measurement
|
$
|
240,977
|
|
|
$
|
265,197
|
|
Raymarine
|
69,994
|
|
|
74,980
|
|
||
Surveillance
|
274,806
|
|
|
317,944
|
|
||
Detection
|
22,054
|
|
|
31,861
|
|
||
Integrated Systems
|
35,105
|
|
|
26,559
|
|
||
|
$
|
642,936
|
|
|
$
|
716,541
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
United States
|
$
|
214,003
|
|
|
$
|
152,032
|
|
|
$
|
385,017
|
|
|
$
|
350,929
|
|
Europe
|
87,571
|
|
|
89,152
|
|
|
178,726
|
|
|
169,866
|
|
||||
Other international
|
87,755
|
|
|
97,107
|
|
|
174,169
|
|
|
165,948
|
|
||||
|
$
|
389,329
|
|
|
$
|
338,291
|
|
|
$
|
737,912
|
|
|
$
|
686,743
|
|
|
June 30,
2013 |
|
December 31,
2012 |
||||
|
|
|
(As adjusted)
|
||||
United States
|
$
|
591,099
|
|
|
$
|
583,008
|
|
Europe
|
343,162
|
|
|
353,695
|
|
||
Other international
|
51,577
|
|
|
52,961
|
|
||
|
$
|
985,838
|
|
|
$
|
989,664
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
US Government
|
$
|
114,844
|
|
|
$
|
75,758
|
|
|
$
|
192,604
|
|
|
$
|
174,262
|
|
Note 18.
|
Business Acquisitions
|
Cash acquired
|
$
|
1,170
|
|
Accounts receivable, net
|
10,183
|
|
|
Inventories
|
13,967
|
|
|
Property and equipment
|
1,049
|
|
|
Other assets
|
3,004
|
|
|
Liabilities
|
(10,252
|
)
|
|
Net tangible assets
|
19,121
|
|
|
Net deferred taxes
|
(2,387
|
)
|
|
Identifiable intangible assets
|
15,100
|
|
|
Goodwill
|
29,336
|
|
|
Purchase price
|
$
|
61,170
|
|
|
Estimated
Useful Life
|
|
Amount
|
||
Lorex Trade Name
|
indefinite
|
|
$
|
6,800
|
|
Customer Relationships
|
7 years
|
|
8,300
|
|
|
|
|
|
$
|
15,100
|
|
Note 18.
|
Business Acquisitions - (Continued)
|
Cash acquired
|
$
|
181
|
|
Accounts receivable, net
|
6,435
|
|
|
Inventories
|
2,853
|
|
|
Property and equipment
|
179
|
|
|
Other assets
|
657
|
|
|
Liabilities
|
(5,248
|
)
|
|
Net tangible assets
|
5,057
|
|
|
Net deferred taxes
|
(5,166
|
)
|
|
Identifiable intangible assets
|
20,102
|
|
|
Goodwill
|
28,370
|
|
|
Purchase price
|
$
|
48,363
|
|
|
Estimated
Useful Life
|
|
Amount
|
||
Patented/Proprietary Technology
|
10 years
|
|
$
|
5,951
|
|
Backlog
|
1.5 years
|
|
1,852
|
|
|
Customer Relationships
|
12 years
|
|
12,299
|
|
|
|
|
|
$
|
20,102
|
|
Note 19.
|
Subsequent Events
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenue
|
$
|
175.0
|
|
|
$
|
142.6
|
|
|
$
|
342.4
|
|
|
$
|
298.4
|
|
Earnings from operations
|
41.8
|
|
|
27.4
|
|
|
81.8
|
|
|
66.7
|
|
||||
Operating margin
|
23.9
|
%
|
|
19.2
|
%
|
|
23.9
|
%
|
|
22.4
|
%
|
||||
Backlog, end of period
|
|
|
|
|
185
|
|
|
158
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenue
|
$
|
46.9
|
|
|
$
|
47.2
|
|
|
$
|
91.3
|
|
|
$
|
93.8
|
|
Earnings from operations
|
6.3
|
|
|
5.7
|
|
|
12.3
|
|
|
9.6
|
|
||||
Operating margin
|
13.5
|
%
|
|
12.1
|
%
|
|
13.5
|
%
|
|
10.2
|
%
|
||||
Backlog, end of period
|
|
|
|
|
5
|
|
|
6
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenue
|
$
|
118.6
|
|
|
$
|
119.5
|
|
|
$
|
228.9
|
|
|
$
|
234.1
|
|
Earnings from operations
|
35.3
|
|
|
40.8
|
|
|
70.3
|
|
|
75.7
|
|
||||
Operating margin
|
29.8
|
%
|
|
34.2
|
%
|
|
30.7
|
%
|
|
32.3
|
%
|
||||
Backlog, end of period
|
|
|
|
|
269
|
|
|
249
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenue
|
$
|
14.4
|
|
|
$
|
15.7
|
|
|
$
|
26.9
|
|
|
$
|
35.1
|
|
Earnings (loss) from operations
|
1.3
|
|
|
(1.8
|
)
|
|
1.9
|
|
|
(0.3
|
)
|
||||
Operating margin
|
9.2
|
%
|
|
(11.2
|
)%
|
|
7.1
|
%
|
|
(0.9
|
)%
|
||||
Backlog, end of period
|
|
|
|
|
23
|
|
|
23
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenue
|
$
|
34.5
|
|
|
$
|
13.3
|
|
|
$
|
48.5
|
|
|
$
|
25.4
|
|
Earnings from operations
|
—
|
|
|
0.3
|
|
|
0.2
|
|
|
(0.1
|
)
|
||||
Operating margin
|
0.1
|
%
|
|
2.5
|
%
|
|
0.4
|
%
|
|
(0.3
|
)%
|
||||
Backlog, end of period
|
|
|
|
|
47
|
|
|
62
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total Number
of Shares
Purchased
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
(1)
|
|
Maximum Number of
Shares that May Yet Be
Purchased Under the
Plans or Programs
(3)
|
|||||
April 1 to April 30, 2013(1)
|
285,741
|
|
|
$
|
25.99
|
|
|
285,741
|
|
|
|
|
June 1 to June 30, 2013(2)
|
350,000
|
|
|
$
|
24.20
|
|
|
350,000
|
|
|
|
|
Total
|
635,741
|
|
|
$
|
25.00
|
|
|
635,741
|
|
|
20,514,479
|
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Number
|
|
Description
|
|
|
|
3.1
|
|
Fifth Amendment to Second Restated Articles of Incorporation of FLIR Systems, Inc. as amended on April 25, 2013.
|
|
|
|
31.1
|
|
Principal Executive Officer Certification Pursuant to Sarbanes-Oxley Act of 2002, Section 302.
|
|
|
|
31.2
|
|
Principal Financial Officer Certification Pursuant to Sarbanes-Oxley Act of 2002, Section 302.
|
|
|
|
32.1
|
|
Principal Executive Officer Certification Pursuant to Sarbanes-Oxley Act of 2002, Section 906.
|
|
|
|
32.2
|
|
Principal Financial Officer Certification Pursuant to Sarbanes-Oxley Act of 2002, Section 906.
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
FLIR SYSTEMS, INC.
|
|
|
|
Date August 8, 2013
|
|
/s/ A
NTHONY
L. T
RUNZO
|
|
|
Anthony L. Trunzo
|
|
|
Sr. Vice President, Finance and Chief Financial Officer
|
|
|
(Duly Authorized and Principal Financial Officer)
|
Class or Series of Shares
|
Number of Shares Outstanding
|
Number of votes entitled to be cast
|
Number of votes cast FOR
|
Number of votes cast AGAINST
|
Common
|
144,645,337
|
144,645,337
|
124,039,331
|
189,883
|
Class or Series of Shares
|
Number of Shares Outstanding
|
Number of votes entitled to be cast
|
Number of votes cast FOR
|
Number of votes cast AGAINST
|
Common
|
144,645,337
|
144,645,337
|
124,104,860
|
138,095
|
1.
|
I have reviewed this quarterly report on Form 10-Q of FLIR Systems, Inc.;
|
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluations; and
|
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control of financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date August 8, 2013
|
|
/s/ ANDREW C. TEICH
|
|
|
Andrew C. Teich
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of FLIR Systems, Inc.;
|
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluations; and
|
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control of financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date August 8, 2013
|
|
/s/ A
NTHONY
L. T
RUNZO
|
|
|
Anthony L. Trunzo
|
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date August 8, 2013
|
|
/s/ ANDREW C. TEICH
|
|
|
Andrew C. Teich
|
|
|
President and Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date August 8, 2013
|
|
/s/ A
NTHONY
L
.
T
RUNZO
|
|
|
Anthony L. Trunzo
|
|
|
Chief Financial Officer
|