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, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
392,975
|
|
|
$
|
369,380
|
|
|
$
|
737,492
|
|
|
$
|
720,923
|
|
Cost of goods sold
|
203,360
|
|
|
186,662
|
|
|
371,980
|
|
|
369,673
|
|
||||
Gross profit
|
189,615
|
|
|
182,718
|
|
|
365,512
|
|
|
351,250
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
35,154
|
|
|
36,307
|
|
|
69,848
|
|
|
72,633
|
|
||||
Selling, general and administrative
|
83,476
|
|
|
83,500
|
|
|
158,611
|
|
|
165,442
|
|
||||
Restructuring expenses
|
454
|
|
|
3,547
|
|
|
768
|
|
|
11,361
|
|
||||
Total operating expenses
|
119,084
|
|
|
123,354
|
|
|
229,227
|
|
|
249,436
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings from operations
|
70,531
|
|
|
59,364
|
|
|
136,285
|
|
|
101,814
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
3,358
|
|
|
3,629
|
|
|
7,019
|
|
|
7,337
|
|
||||
Interest income
|
(295
|
)
|
|
(272
|
)
|
|
(542
|
)
|
|
(536
|
)
|
||||
Other expense (income), net
|
1,020
|
|
|
(1,070
|
)
|
|
320
|
|
|
(1,269
|
)
|
||||
Earnings before income taxes
|
66,448
|
|
|
57,077
|
|
|
129,488
|
|
|
96,282
|
|
||||
Income tax provision
|
15,948
|
|
|
12,319
|
|
|
31,078
|
|
|
21,630
|
|
||||
Net earnings
|
$
|
50,500
|
|
|
$
|
44,758
|
|
|
$
|
98,410
|
|
|
$
|
74,652
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.36
|
|
|
$
|
0.32
|
|
|
$
|
0.70
|
|
|
$
|
0.53
|
|
Diluted
|
$
|
0.36
|
|
|
$
|
0.31
|
|
|
$
|
0.70
|
|
|
$
|
0.52
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
140,063
|
|
|
141,574
|
|
|
139,916
|
|
|
141,255
|
|
||||
Diluted
|
141,491
|
|
|
144,120
|
|
|
141,484
|
|
|
143,964
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
$
|
50,500
|
|
|
$
|
44,758
|
|
|
$
|
98,410
|
|
|
$
|
74,652
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Cash flow hedges
|
194
|
|
|
(495
|
)
|
|
(410
|
)
|
|
(721
|
)
|
||||
Foreign currency translation adjustments
|
30,499
|
|
|
(6,895
|
)
|
|
(35,465
|
)
|
|
(8,807
|
)
|
||||
Total other comprehensive income (loss)
|
30,693
|
|
|
(7,390
|
)
|
|
(35,875
|
)
|
|
(9,528
|
)
|
||||
Comprehensive income
|
$
|
81,193
|
|
|
$
|
37,368
|
|
|
$
|
62,535
|
|
|
$
|
65,124
|
|
|
June 30,
2015 |
|
December 31, 2014
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
560,190
|
|
|
$
|
531,374
|
|
Accounts receivable, net
|
327,653
|
|
|
354,658
|
|
||
Inventories
|
360,571
|
|
|
320,605
|
|
||
Prepaid expenses and other current assets
|
86,000
|
|
|
93,691
|
|
||
Deferred income taxes, net
|
38,509
|
|
|
38,873
|
|
||
Total current assets
|
1,372,923
|
|
|
1,339,201
|
|
||
Property and equipment, net
|
260,763
|
|
|
247,094
|
|
||
Deferred income taxes, net
|
20,146
|
|
|
19,941
|
|
||
Goodwill
|
544,501
|
|
|
553,335
|
|
||
Intangible assets, net
|
122,344
|
|
|
133,212
|
|
||
Other assets
|
59,039
|
|
|
61,240
|
|
||
Total assets
|
$
|
2,379,716
|
|
|
$
|
2,354,023
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
121,605
|
|
|
$
|
98,173
|
|
Deferred revenue
|
29,989
|
|
|
27,878
|
|
||
Accrued payroll and related liabilities
|
53,740
|
|
|
62,065
|
|
||
Accrued product warranties
|
13,232
|
|
|
13,538
|
|
||
Advance payments from customers
|
31,220
|
|
|
28,276
|
|
||
Accrued expenses
|
35,348
|
|
|
51,810
|
|
||
Accrued income taxes
|
3,991
|
|
|
4,586
|
|
||
Other current liabilities
|
6,182
|
|
|
8,231
|
|
||
Current portion, long term debt
|
15,000
|
|
|
15,000
|
|
||
Total current liabilities
|
310,307
|
|
|
309,557
|
|
||
Long-term debt
|
350,715
|
|
|
357,986
|
|
||
Deferred income taxes
|
13,365
|
|
|
13,905
|
|
||
Accrued income taxes
|
11,513
|
|
|
11,096
|
|
||
Other long-term liabilities
|
55,341
|
|
|
51,706
|
|
||
Commitments and contingencies
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, $0.01 par value, 10,000 shares authorized; no shares issued at June 30, 2015, and December 31, 2014
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 500,000 shares authorized, 140,218 and 139,579 shares issued at June 30, 2015, and December 31, 2014, respectively, and additional paid-in capital
|
1,402
|
|
|
1,396
|
|
||
Retained earnings
|
1,736,357
|
|
|
1,671,786
|
|
||
Accumulated other comprehensive loss
|
(99,284
|
)
|
|
(63,409
|
)
|
||
Total shareholders’ equity
|
1,638,475
|
|
|
1,609,773
|
|
||
Total liabilities and shareholders' equity
|
$
|
2,379,716
|
|
|
$
|
2,354,023
|
|
|
Six Months Ended
June 30, |
||||||
|
2015
|
|
2014
|
||||
CASH PROVIDED BY OPERATING ACTIVITIES:
|
|
|
|
||||
Net earnings
|
$
|
98,410
|
|
|
$
|
74,652
|
|
Income items not affecting cash:
|
|
|
|
||||
Depreciation and amortization
|
24,611
|
|
|
30,706
|
|
||
Deferred income taxes
|
142
|
|
|
915
|
|
||
Stock-based compensation arrangements
|
12,938
|
|
|
17,203
|
|
||
Other non-cash items
|
(823
|
)
|
|
(3,599
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Decrease in accounts receivable, net
|
22,594
|
|
|
15,929
|
|
||
Increase in inventories
|
(44,072
|
)
|
|
(7,414
|
)
|
||
Decrease in prepaid expenses and other current assets
|
489
|
|
|
233
|
|
||
Decrease (increase) in other assets
|
1,610
|
|
|
(12,188
|
)
|
||
Increase in accounts payable
|
24,539
|
|
|
14,764
|
|
||
Increase (decrease) in deferred revenue
|
2,303
|
|
|
(3,761
|
)
|
||
(Decrease) increase in accrued payroll and other current liabilities
|
(28,170
|
)
|
|
5,473
|
|
||
Increase (decrease) in accrued income taxes
|
5,230
|
|
|
(3,937
|
)
|
||
Increase in other long-term liabilities
|
4,058
|
|
|
1,437
|
|
||
Cash provided by operating activities
|
123,859
|
|
|
130,413
|
|
||
CASH USED BY INVESTING ACTIVITIES:
|
|
|
|
||||
Additions to property and equipment, net
|
(30,753
|
)
|
|
(25,828
|
)
|
||
Cash used by investing activities
|
(30,753
|
)
|
|
(25,828
|
)
|
||
CASH USED BY FINANCING ACTIVITIES:
|
|
|
|
||||
Repayments of long term debt, net
|
(7,500
|
)
|
|
(7,500
|
)
|
||
Repurchase of common stock
|
(31,426
|
)
|
|
(43,003
|
)
|
||
Dividends paid
|
(30,774
|
)
|
|
(28,245
|
)
|
||
Proceeds from shares issued pursuant to stock-based compensation plans
|
19,636
|
|
|
28,969
|
|
||
Excess tax benefit of stock options exercised
|
4,041
|
|
|
6,559
|
|
||
Other financing activities
|
(8
|
)
|
|
(14
|
)
|
||
Cash used by financing activities
|
(46,031
|
)
|
|
(43,234
|
)
|
||
Effect of exchange rate changes on cash
|
(18,259
|
)
|
|
(1,754
|
)
|
||
Net increase in cash and cash equivalents
|
28,816
|
|
|
59,597
|
|
||
Cash and cash equivalents, beginning of period
|
531,374
|
|
|
542,476
|
|
||
Cash and cash equivalents, end of period
|
$
|
560,190
|
|
|
$
|
602,073
|
|
Note 1.
|
Basis of Presentation
|
Note 2.
|
Stock-based Compensation
|
Note 2.
|
Stock-based Compensation - (Continued)
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Cost of goods sold
|
$
|
766
|
|
|
$
|
639
|
|
|
$
|
1,484
|
|
|
$
|
1,295
|
|
Research and development
|
1,185
|
|
|
1,380
|
|
|
2,325
|
|
|
2,579
|
|
||||
Selling, general and administrative
|
6,229
|
|
|
6,428
|
|
|
9,129
|
|
|
10,734
|
|
||||
Restructuring expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
2,595
|
|
||||
Stock-based compensation expense
|
$
|
8,180
|
|
|
$
|
8,447
|
|
|
$
|
12,938
|
|
|
$
|
17,203
|
|
|
June 30,
|
||||||
|
2015
|
|
2014
|
||||
Capitalized in inventory
|
$
|
703
|
|
|
$
|
694
|
|
Note 3.
|
Net Earnings Per Share
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Numerator for earnings per share:
|
|
|
|
|
|
|
|
||||||||
Net earnings for basic and diluted earnings per share
|
$
|
50,500
|
|
|
$
|
44,758
|
|
|
$
|
98,410
|
|
|
$
|
74,652
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator for earnings per share:
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding
|
140,063
|
|
|
141,574
|
|
|
139,916
|
|
|
141,255
|
|
||||
Assumed exercises of stock options and vesting of restricted stock awards, net of shares assumed reacquired under the treasury stock method
|
1,428
|
|
|
2,546
|
|
|
1,568
|
|
|
2,709
|
|
||||
Weighted average diluted shares outstanding
|
141,491
|
|
|
144,120
|
|
|
141,484
|
|
|
143,964
|
|
Note 4.
|
Fair Value of Financial Instruments
|
Level 1 – quoted prices in active markets for identical securities as of the reporting date;
|
Level 2 – other significant directly or indirectly observable inputs, including quoted prices for similar securities, interest rates, prepayment speeds and credit risk; and
|
Level 3 – significant inputs that are generally less observable than objective sources, including our own assumptions in determining fair value.
|
Note 5.
|
Derivative Financial Instruments
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
Swedish kronor
|
$
|
67,537
|
|
|
$
|
67,809
|
|
Canadian dollar
|
21,151
|
|
|
17,446
|
|
||
British pound sterling
|
26,113
|
|
|
14,928
|
|
||
Euro
|
8,041
|
|
|
5,391
|
|
||
Brazilian real
|
6,025
|
|
|
2,449
|
|
||
Australian dollar
|
3,705
|
|
|
6,566
|
|
||
Japanese yen
|
2,981
|
|
|
3,718
|
|
||
Other
|
786
|
|
|
701
|
|
||
|
$
|
136,339
|
|
|
$
|
119,008
|
|
Note 5.
|
Derivative Financial Instruments - (Continued)
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||
|
Other current assets
|
|
Other current liabilities
|
|
Other current assets
|
|
Other current liabilities
|
||||||||
Foreign currency forward contracts
|
$
|
3,112
|
|
|
$
|
70
|
|
|
$
|
112
|
|
|
$
|
3,247
|
|
Contract Date
|
|
Notional Amount
(in millions)
|
|
Fixed Rate
|
|
Effective Date
|
|
Maturity Date
|
|||
March 15, 2013
|
|
$
|
58.1
|
|
|
1.02
|
%
|
|
April 5, 2013
|
|
March 31, 2019
|
March 29, 2013
|
|
$
|
58.1
|
|
|
0.97
|
%
|
|
April 5, 2013
|
|
March 31, 2019
|
Note 6.
|
Accounts Receivable
|
Note 7.
|
Inventories
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
Raw material and subassemblies
|
$
|
187,665
|
|
|
$
|
181,618
|
|
Work-in-progress
|
52,081
|
|
|
37,139
|
|
||
Finished goods
|
120,825
|
|
|
101,848
|
|
||
|
$
|
360,571
|
|
|
$
|
320,605
|
|
Note 8.
|
Property and Equipment
|
Note 9.
|
Goodwill
|
Balance, December 31, 2014
|
$
|
553,335
|
|
Currency translation adjustments
|
(8,834
|
)
|
|
Balance, June 30, 2015
|
$
|
544,501
|
|
Note 10.
|
Intangible Assets
|
Note 11.
|
Credit Agreement
|
Note 12.
|
Accrued Product Warranties
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Accrued product warranties, beginning of period
|
$
|
15,840
|
|
|
$
|
16,712
|
|
|
$
|
16,175
|
|
|
$
|
17,732
|
|
Amounts paid for warranty services
|
(1,819
|
)
|
|
(2,076
|
)
|
|
(3,771
|
)
|
|
(4,763
|
)
|
||||
Warranty provisions for products sold
|
1,867
|
|
|
1,322
|
|
|
3,784
|
|
|
3,292
|
|
||||
Currency translation adjustments and other
|
134
|
|
|
31
|
|
|
(166
|
)
|
|
(272
|
)
|
||||
Accrued product warranties, end of period
|
$
|
16,022
|
|
|
$
|
15,989
|
|
|
$
|
16,022
|
|
|
$
|
15,989
|
|
Current accrued product warranties, end of period
|
|
|
|
|
$
|
13,232
|
|
|
$
|
13,222
|
|
||||
Long-term accrued product warranties, end of period
|
|
|
|
|
$
|
2,790
|
|
|
$
|
2,767
|
|
Note 13.
|
Long-Term Debt
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
Unsecured notes
|
$
|
250,000
|
|
|
$
|
250,000
|
|
Term loan
|
116,250
|
|
|
123,750
|
|
||
Unamortized discounts and issuance costs of unsecured notes
|
(535
|
)
|
|
(764
|
)
|
||
|
$
|
365,715
|
|
|
$
|
372,986
|
|
Current portion, long-term debt
|
$
|
15,000
|
|
|
$
|
15,000
|
|
Long-term debt
|
$
|
350,715
|
|
|
$
|
357,986
|
|
Note 14.
|
Shareholders’ Equity
|
Common stock and additional paid-in capital, December 31, 2014
|
$
|
1,396
|
|
Income tax benefit of common stock options exercised
|
3,490
|
|
|
Common stock issued pursuant to stock-based compensation plans, net
|
11,991
|
|
|
Stock-based compensation arrangements
|
12,886
|
|
|
Repurchase of common stock
|
(28,361
|
)
|
|
Common stock and additional paid-in capital, June 30, 2015
|
$
|
1,402
|
|
Note 15.
|
Contingencies
|
Note 16.
|
Income Taxes
|
|
Tax Years:
|
US Federal
|
2012 – 2014
|
State of Oregon
|
2012 – 2014
|
State of Massachusetts
|
2011 – 2014
|
State of California
|
2012 – 2014
|
Sweden
|
2011 – 2014
|
United Kingdom
|
2011 – 2014
|
Belgium
|
2011 – 2014
|
Note 17.
|
Operating Segments and Related Information
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
|
|
(as reclassified)
|
|
|
|
(as reclassified)
|
||||||||
Revenue – External Customers:
|
|
|
|
|
|
|
|
||||||||
Surveillance
|
$
|
107,814
|
|
|
$
|
113,641
|
|
|
$
|
220,715
|
|
|
$
|
236,729
|
|
Instruments
|
90,260
|
|
|
83,968
|
|
|
174,080
|
|
|
168,023
|
|
||||
OEM and Emerging Markets
|
46,285
|
|
|
51,124
|
|
|
86,120
|
|
|
99,039
|
|
||||
Maritime
|
52,030
|
|
|
55,230
|
|
|
103,002
|
|
|
107,805
|
|
||||
Security
|
60,048
|
|
|
44,735
|
|
|
98,854
|
|
|
74,045
|
|
||||
Detection
|
36,538
|
|
|
20,682
|
|
|
54,721
|
|
|
35,282
|
|
||||
|
$
|
392,975
|
|
|
$
|
369,380
|
|
|
$
|
737,492
|
|
|
$
|
720,923
|
|
Revenue – Intersegments:
|
|
|
|
|
|
|
|
||||||||
Surveillance
|
$
|
2,065
|
|
|
$
|
1,568
|
|
|
$
|
5,747
|
|
|
$
|
3,983
|
|
Instruments
|
1,068
|
|
|
173
|
|
|
1,910
|
|
|
474
|
|
||||
OEM and Emerging Markets
|
9,072
|
|
|
5,390
|
|
|
17,758
|
|
|
10,556
|
|
||||
Maritime
|
925
|
|
|
836
|
|
|
1,582
|
|
|
1,504
|
|
||||
Security
|
4,032
|
|
|
2,735
|
|
|
8,007
|
|
|
4,390
|
|
||||
Detection
|
—
|
|
|
39
|
|
|
—
|
|
|
59
|
|
||||
Elimination
|
(17,162
|
)
|
|
(10,741
|
)
|
|
(35,004
|
)
|
|
(20,966
|
)
|
||||
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Earnings (loss) from operations:
|
|
|
|
|
|
|
|
||||||||
Surveillance
|
$
|
26,378
|
|
|
$
|
22,634
|
|
|
$
|
56,546
|
|
|
$
|
45,900
|
|
Instruments
|
28,341
|
|
|
21,037
|
|
|
56,404
|
|
|
41,486
|
|
||||
OEM and Emerging Markets
|
10,495
|
|
|
13,914
|
|
|
19,274
|
|
|
22,720
|
|
||||
Maritime
|
6,421
|
|
|
9,714
|
|
|
11,210
|
|
|
18,544
|
|
||||
Security
|
7,874
|
|
|
5,886
|
|
|
11,689
|
|
|
7,572
|
|
||||
Detection
|
9,380
|
|
|
3,152
|
|
|
12,059
|
|
|
1,353
|
|
||||
Other
|
(18,358
|
)
|
|
(16,973
|
)
|
|
(30,897
|
)
|
|
(35,761
|
)
|
||||
|
$
|
70,531
|
|
|
$
|
59,364
|
|
|
$
|
136,285
|
|
|
$
|
101,814
|
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
|
|
|
(as reclassified)
|
||||
Segment assets (accounts receivable, net and inventories):
|
|
|
|
||||
Surveillance
|
$
|
285,436
|
|
|
$
|
309,473
|
|
Instruments
|
123,924
|
|
|
119,629
|
|
||
OEM and Emerging Markets
|
86,524
|
|
|
79,053
|
|
||
Maritime
|
74,532
|
|
|
67,775
|
|
||
Security
|
80,540
|
|
|
59,182
|
|
||
Detection
|
37,268
|
|
|
40,151
|
|
||
|
$
|
688,224
|
|
|
$
|
675,263
|
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
|
|
|
(as reclassified)
|
||||
Segment goodwill:
|
|
|
|
||||
Surveillance
|
$
|
120,489
|
|
|
$
|
121,268
|
|
Instruments
|
151,061
|
|
|
155,527
|
|
||
OEM and Emerging Markets
|
70,622
|
|
|
72,687
|
|
||
Maritime
|
109,758
|
|
|
109,980
|
|
||
Security
|
44,398
|
|
|
45,710
|
|
||
Detection
|
48,173
|
|
|
48,163
|
|
||
|
$
|
544,501
|
|
|
$
|
553,335
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
United States
|
$
|
200,276
|
|
|
$
|
191,108
|
|
|
$
|
364,240
|
|
|
$
|
352,846
|
|
Europe
|
95,851
|
|
|
85,771
|
|
|
188,593
|
|
|
180,845
|
|
||||
Other international
|
96,848
|
|
|
92,501
|
|
|
184,659
|
|
|
187,232
|
|
||||
|
$
|
392,975
|
|
|
$
|
369,380
|
|
|
$
|
737,492
|
|
|
$
|
720,923
|
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
United States
|
$
|
629,235
|
|
|
$
|
623,522
|
|
Europe
|
344,667
|
|
|
319,661
|
|
||
Other international
|
12,745
|
|
|
51,698
|
|
||
|
$
|
986,647
|
|
|
$
|
994,881
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
US Government
|
$
|
76,125
|
|
|
$
|
78,582
|
|
|
$
|
129,445
|
|
|
$
|
150,219
|
|
Note 18.
|
Restructuring Costs
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Surveillance
|
$
|
(45
|
)
|
|
$
|
606
|
|
|
$
|
78
|
|
|
$
|
4,725
|
|
Instruments
|
497
|
|
|
2,672
|
|
|
684
|
|
|
6,196
|
|
||||
OEM and Emerging Markets
|
—
|
|
|
109
|
|
|
2
|
|
|
276
|
|
||||
Maritime
|
—
|
|
|
16
|
|
|
—
|
|
|
(125
|
)
|
||||
Detection
|
1
|
|
|
144
|
|
|
3
|
|
|
759
|
|
||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
120
|
|
||||
|
$
|
453
|
|
|
$
|
3,547
|
|
|
$
|
767
|
|
|
$
|
11,951
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Cost of goods sold
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
590
|
|
Restructuring expenses
|
454
|
|
|
3,547
|
|
|
768
|
|
|
11,361
|
|
||||
|
$
|
453
|
|
|
$
|
3,547
|
|
|
$
|
767
|
|
|
$
|
11,951
|
|
|
Severance and personnel costs
|
|
Facilities Exit, Lease Terminations & Other
|
|
Total
|
||||||
Balance, December 31, 2014
|
$
|
10,941
|
|
|
$
|
1,485
|
|
|
$
|
12,426
|
|
Additional costs
|
277
|
|
|
37
|
|
|
314
|
|
|||
Utilization
|
(3,524
|
)
|
|
(1,040
|
)
|
|
(4,564
|
)
|
|||
Balance, March 31, 2015
|
$
|
7,694
|
|
|
$
|
482
|
|
|
$
|
8,176
|
|
Additional costs
|
82
|
|
|
371
|
|
|
453
|
|
|||
Utilization
|
(2,394
|
)
|
|
(371
|
)
|
|
(2,765
|
)
|
|||
Balance, June 30, 2015
|
$
|
5,382
|
|
|
$
|
482
|
|
|
$
|
5,864
|
|
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, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
|
|
(as reclassified)
|
|
|
|
(as reclassified)
|
||||||||
Revenue
|
$
|
107.8
|
|
|
$
|
113.6
|
|
|
$
|
220.7
|
|
|
$
|
236.7
|
|
Earnings from operations
|
26.4
|
|
|
22.6
|
|
|
56.5
|
|
|
45.9
|
|
||||
Operating margin
|
24.5
|
%
|
|
19.9
|
%
|
|
25.6
|
%
|
|
19.4
|
%
|
||||
Backlog, end of period
|
|
|
|
|
286
|
|
|
308
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
90.3
|
|
|
$
|
84.0
|
|
|
$
|
174.1
|
|
|
$
|
168.0
|
|
Earnings from operations
|
28.3
|
|
|
21.0
|
|
|
56.4
|
|
|
41.5
|
|
||||
Operating margin
|
31.4
|
%
|
|
25.1
|
%
|
|
32.4
|
%
|
|
24.7
|
%
|
||||
Backlog, end of period
|
|
|
|
|
25
|
|
|
32
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
|
|
(as reclassified)
|
|
|
|
(as reclassified)
|
||||||||
Revenue
|
$
|
46.3
|
|
|
$
|
51.1
|
|
|
$
|
86.1
|
|
|
$
|
99.0
|
|
Earnings from operations
|
10.5
|
|
|
13.9
|
|
|
19.3
|
|
|
22.7
|
|
||||
Operating margin
|
22.7
|
%
|
|
27.2
|
%
|
|
22.4
|
%
|
|
22.9
|
%
|
||||
Backlog, end of period
|
|
|
|
|
109
|
|
|
125
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
52.0
|
|
|
$
|
55.2
|
|
|
$
|
103.0
|
|
|
$
|
107.8
|
|
Earnings from operations
|
6.4
|
|
|
9.7
|
|
|
11.2
|
|
|
18.5
|
|
||||
Operating margin
|
12.3
|
%
|
|
17.6
|
%
|
|
10.9
|
%
|
|
17.2
|
%
|
||||
Backlog, end of period
|
|
|
|
|
21
|
|
|
15
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
60.0
|
|
|
$
|
44.7
|
|
|
$
|
98.9
|
|
|
$
|
74.0
|
|
Earnings from operations
|
7.9
|
|
|
5.9
|
|
|
11.7
|
|
|
7.6
|
|
||||
Operating margin
|
13.1
|
%
|
|
13.2
|
%
|
|
11.8
|
%
|
|
10.2
|
%
|
||||
Backlog, end of period
|
|
|
|
|
13
|
|
|
25
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
36.5
|
|
|
$
|
20.7
|
|
|
$
|
54.7
|
|
|
$
|
35.3
|
|
Earnings from operations
|
9.4
|
|
|
3.2
|
|
|
12.1
|
|
|
1.4
|
|
||||
Operating margin
|
25.7
|
%
|
|
15.2
|
%
|
|
22.0
|
%
|
|
3.8
|
%
|
||||
Backlog, end of period
|
|
|
|
|
83
|
|
|
45
|
|
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
(1)
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
|
|
Maximum Number of
Shares that May Yet Be
Purchased Under the
Plans or Programs
(2)
|
|||||
May 1 to May 31, 2015
|
1,000,000
|
|
|
$
|
31.43
|
|
|
1,000,000
|
|
|
|
|
Total
|
1,000,000
|
|
|
$
|
31.43
|
|
|
1,000,000
|
|
|
14,000,000
|
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Number
|
|
Description
|
10.1
|
|
Form of Restricted Stock Unit Agreement (Time-Based Vesting) under the FLIR Systems, Inc. 2011 Stock Incentive Plan, amended May 11, 2015.
(1)
|
10.2
|
|
Form of Restricted Stock Unit Agreement (Market-Based Vesting) under the FLIR Systems, Inc. 2011 Stock Incentive Plan, amended May 11, 2015.
(1)
|
10.3
|
|
Form of Stock Option Agreement (Time-Based Vesting) under the FLIR Systems, Inc. 2011 Stock Incentive Plan, amended May 11, 2015.
(1)
|
10.4
|
|
Form of Stock Option Agreement (Time-Based Vesting - Outside Directors) under the FLIR Systems, Inc. 2011 Stock Incentive Plan, amended May 11, 2015.
(1)
|
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 5, 2015
|
|
/s/ DAVID A. MUESSLE
|
|
|
David A. Muessle
|
|
|
Vice President, Corporate Controller
and Interim Chief Financial Officer
|
|
|
(Duly Authorized and Principal Chief Financial Officer)
|
FLIR SYSTEMS, INC.
|
GRANTEE
|
Andrew C. Teich
|
Name
|
President and Chief Executive Officer
|
Signed Electronically
|
(i)
|
When Company TSR is less than Target TSR, for each 1.0% that Company TSR is less than Target TSR, the percentage of the Target Shares earned decreases by 10%;
|
(ii)
|
When Company TSR is equal to Target TSR, 100% of the Target Shares are earned;
|
(iii)
|
When Company TSR is from 1% to 20% greater than Target TSR, for each 1% that Company TSR is greater than Target TSR, the percentage of the Target Shares earned increases by 2.5%;
|
(iv)
|
When Company TSR is from 21% to 30% greater than Target TSR, for each 1% that Company TSR is greater than Target TSR, the percentage of the Target Shares earned increases by 5.0%; and
|
(v)
|
When Company TSR is 30% or more greater than Target TSR, the maximum number of Target Shares are earned.
|
(i)
|
ceases to be a domestically domiciled publicly traded company on the New York Stock Exchange or Nasdaq stock exchange; or
|
(ii)
|
has been acquired by or merged with another company and the company is not the surviving entity (whether by a peer company or otherwise, but not including internal reorganizations), or has sold all or substantially all of its assets; or
|
(iii)
|
has reincorporated in a foreign (e.g., non-U.S.) jurisdiction, regardless of whether it is a reporting company in that or another jurisdiction.
|
FLIR SYSTEMS, INC.
|
GRANTEE
|
Andrew C. Teich
|
Name
|
President and Chief Executive Officer
|
Signed Electronically
|
FLIR SYSTEMS, INC.
|
GRANTEE
|
Andrew C. Teich
|
Name
|
President and Chief Executive Officer
|
Signed Electronically
|
FLIR SYSTEMS, INC.
|
GRANTEE
|
Andrew C. Teich
|
Name
|
President and Chief Executive Officer
|
Signed Electronically
|
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 evaluation; 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 over financial reporting, to the registrant's auditors and the audit committee of the 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 5, 2015
|
|
/s/ A
NDREW
C. T
EICH
|
|
|
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 evaluation; 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 over financial reporting, to the registrant's auditors and the audit committee of the 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 5, 2015
|
|
/s/ David A. Muessle
|
|
|
David A. Muessle
|
|
|
Interim 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 5, 2015
|
|
/s/ A
NDREW
C. T
EICH
|
|
|
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 5, 2015
|
|
/s/ David A. Muessle
|
|
|
David A. Muessle
|
|
|
Interim Chief Financial Officer
|