8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES

EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 14, 2017

FLIR SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

OREGON	0-21918	93-0708501
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

27700 SW Parkway Avenue

Wilsonville, Oregon 97070

(503) 498-3547

(Address, including zip code, and telephone number, including
area code, of registrant’s principal executive offices)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.    RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On February 14, 2017, FLIR Systems, Inc. (the “Company”) issued a news release announcing (i) its financial results for the quarter and year ended December 31, 2016, (ii) outlook for revenue and earnings per share for the year ending December 31, 2017, (iii) the declaration of a quarterly dividend, and (iv) the authorization by the Company’s Board of Directors to repurchase up to 15 million shares through February 8, 2019.

The news release issued February 14, 2017 is furnished herewith as Exhibit 99.1 to this Report, and shall not be deemed to be filed for purposes of Section 18 of the Exchange Act.

Item 5.02.    DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGMENTS OF CERATIN OFFICERS

On February 14, 2017 the Company announced that Andrew C. Teich, its President, Chief Executive Officer and a member of its Board of Directors, plans to retire as soon as his successor is appointed.

Item 9.01.    FINANCIAL STATEMENTS AND EXHIBITS

(d)    Exhibits.

99.1 News release issued by FLIR Systems, Inc. dated February 14, 2017 announcing its financial results for the quarter and year ended December 31, 2016.

99.2 News release issued by FLIR Systems, Inc. dated February 14, 2017 announcing the retirement of the Company’s CEO

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on February 14, 2017.

FLIR SYSTEMS, INC.

(Registrant)

By     /s/ Amit Singhi    

Amit Singhi

Senior Vice President, Finance

and Chief Financial Officer

EX-99.1

Exhibit 99.1

FLIR Systems Announces

Fourth Quarter and Full Year 2016 Financial Results

Fourth Quarter and Full Year Revenue Growth of 8% and 7%

Fourth Quarter and Full Year Operating Cash Flow Growth of 24% and 13%

Quarterly Dividend Increased 25% to $0.15 Per Share

WILSONVILLE, OR, February 14, 2017 – FLIR Systems, Inc. (NASDAQ: FLIR) today announced financial results for the fourth quarter and full year ended December 31, 2016.

Fourth quarter 2016 revenue was $474.7 million, up 8% compared to fourth quarter 2015 revenue of $437.6 million. GAAP operating income in the fourth quarter was $92.3 million, compared to $93.5 million in the fourth quarter of 2015. Fourth quarter 2016 GAAP net income was $61.5 million, or $0.45 per diluted share, compared with GAAP net income of $70.2 million, or $0.51 per diluted share in the fourth quarter a year ago. Cash provided by operations in the fourth quarter reached $97.1 million, FLIR’s highest quarterly cash flow since 2013, which was driven largely by continued improvements in working capital.

Excluding the impact of discrete tax items, cost-basis investment gains and losses, restructuring charges, SkyWatch^TM remediation charges, and the impact of fourth quarter 2016 acquisitions, fourth quarter historical-method adjusted earnings per share were $0.48, compared to historical-method adjusted earnings per share of $0.47 in the fourth quarter of 2015. Full year 2016 historical-method adjusted earnings per share were $1.56, equal to historical-method adjusted earnings per share for 2015. A reconciliation table summarizing historical-method adjustments is below under the heading: “GAAP to Non-GAAP Reconciliation – As Previously Guided.”

Moving forward, in addition to GAAP results, FLIR will provide new non-GAAP adjusted earnings metrics. These new metrics remove certain non-core items (including gains and losses) that FLIR management believes are not reflective of ongoing operating performance, such as restructuring charges, gains and losses on disposal of non-core assets, discrete tax items, business acquisition-related expenses, and amortization expense related to acquired intangible assets. FLIR management believes these new adjusted earnings metrics provide a view of the Company’s core operating results and facilitate consistent comparison of financial results over time. A reconciliation table summarizing the adjustments to the 2016 financial results for the fourth quarter

and full year 2016 and 2015 is provided below. A reconciliation of quarterly results for 2016 and 2015 will be provided in the summary presentation that accompanies FLIR’s fourth quarter results conference call, available in the Events & Presentations section of www.FLIR.com/investor.

Adjusted operating income in the fourth quarter of 2016 was $103.3 million, compared to $98.7 million in the fourth quarter of 2015. Fourth quarter 2016 adjusted net income was $71.9 million, or $0.52 per diluted share, compared with adjusted net income of $69.6 million, or $0.50 per diluted share in the fourth quarter of 2015.

Revenue from the Surveillance segment was $158.5 million, an increase of 5% from fourth quarter results last year. The Instruments segment contributed $96 million of revenue during the fourth quarter, down 3% from the prior year. The Security segment recorded revenue of $73.1 million in the fourth quarter, up 7% over the prior year. FLIR’s OEM & Emerging Markets segment had $76.1 million of revenue, an increase of 55% over the prior year due partially to the addition of the acquired Intelligent Imaging Solutions business as well as strong camera cores demand. Revenue from the Maritime segment was $38.3 million, which increased 6% compared to the fourth quarter of 2015. The Detection segment contributed $32.7 million of revenue, a decline of 6% versus the prior year.

For the full year, revenue was $1,662.2 million, up 7% compared to $1,557.1 million for the year ended December 31, 2015. GAAP operating income for 2016 was $295.7 million, compared to $305.8 million in 2015. Adjusted operating income for 2016 was $324.7 million, compared to 2015 adjusted operating income of $325.0 million. GAAP net income for 2016 was $166.6 million, or $1.20 per diluted share, which compares to 2015 GAAP net income of $241.7 million, or $1.72 per diluted share. Adjusted net income in 2016 was $233.9 million, or $1.69 per diluted share, which compares to 2015 adjusted net income of $232.8 million, or $1.65 per diluted share. Cash provided by operations during 2016 was $312.3 million, which compares to $275.8 million in the prior year and represents a 13% increase.

FLIR's backlog of firm orders for delivery within the next twelve months was approximately $592 million as of December 31, 2016, a decrease of $52 million, or 8%, during the quarter and a decrease of $12 million, or 2%, below the $604 million balance at the end of 2015.

“We are pleased with the progress we have made in building our core business, the addition of the new business areas through the four acquisitions we completed this year, and our strong operating cash flow growth,” said Andy Teich, President and CEO of FLIR. “While we are disappointed with this quarter’s results from a margin perspective, we are confident in our ability to drive continued growth and improve margins in 2017. During 2016 we expanded our market share in nearly all of the markets we serve and built a strong backlog as a foundation for 2017. We look forward to the launch of several new product platforms in the first half of the year which should drive further growth.”

Revenue and Earnings Outlook for 2017

FLIR also announced today that it currently expects revenue in 2017 to be in the range of $1.78 billion to $1.83 billion and adjusted earnings per diluted share to be in the range of $1.81 to $1.91. This represents 7% to 10% growth in revenue and 7% to 13% growth in adjusted earnings per diluted share.

Dividend Increase and Declaration

FLIR’s Board of Directors has approved a quarterly cash dividend of $0.15 per share on FLIR common stock, an increase of 25% over the previous quarterly dividend of $0.12 per share. The Board of Directors has declared the dividend payable on March 10, 2017, to shareholders of record as of close of business on February 24, 2017.

Share Repurchase Program

Also today, FLIR announced that its Board of Directors approved a new share repurchase program that authorizes the repurchase of up to 15 million shares over the next two years. The number of shares authorized for repurchase represents approximately 11% of FLIR's outstanding common stock as of December 31, 2016.

Conference Call

FLIR has scheduled a conference call at 11:00 a.m. ET (8:00 a.m. PT) today to discuss its results for the quarter and the year. A simultaneous webcast of the conference call and the accompanying summary presentation may be accessed from the Events section of www.FLIR.com/investor. A replay will be available after 2:00 p.m. ET (11:00 a.m. PT) at this same address. Summary fourth quarter and historical financial data may be accessed from the Financial Info Database link under the Financials & Filings section at www.FLIR.com/investor.

About FLIR Systems

FLIR Systems, Inc. is a world leader in the design, manufacture, and marketing of sensor systems that enhance perception and awareness. FLIR's advanced systems and components are used for a wide variety of thermal imaging, situational awareness, and security applications, including airborne and ground-based surveillance, condition monitoring, navigation, recreation, research and development, manufacturing process control, search and rescue, drug interdiction, transportation safety, border and maritime patrol, environmental monitoring, and chemical, biological, radiological, nuclear, and explosives (CBRNE) threat detection. For more information, visit FLIR's web site at www.FLIR.com.

Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this earnings release makes reference to non-GAAP measures. With respect to the outlook for the full year 2017, certain items that affect GAAP net income per diluted share are out of the Company’s control and/or cannot be reasonably predicted. Consequently, the Company is unable to provide a reasonable estimate of GAAP net income per diluted share or a corresponding reconciliation to GAAP net income per diluted share for the full year. Additional information regarding the reasons the Company uses non-GAAP measures, a reconciliation of these measures to the most directly comparable GAAP measures, and other information relating to these measures are included below, following the GAAP financial information.

Forward-Looking Statements

Statements in this release by Andy Teich and the statements in the section captioned "Revenue and Earnings Outlook for 2017" above are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates,” or similar expressions) should be considered to be forward looking statements. Such statements are based on current expectations, estimates, and projections about FLIR’s business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including the following: changes in demand for FLIR’s products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, the impact of FLIR’s continuing compliance with U.S. export control laws and regulations and similar laws and regulations, the timely receipt of any necessary export licenses, constraints on supplies of critical components, excess or shortage of production capacity, the ability to manufacture and ship the products in the time period required, actual purchases under agreements, the continuing eligibility of FLIR to act as a federal contractor, the amount and availability of appropriated government procurement funds and other risks discussed from time to time in filings and reports filed with the Securities and Exchange Commission. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made and FLIR does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release, or for changes made to this document by wire services or internet service providers.

Investor Relations

Shane Harrison

503-498-3547

shane.harrison@flir.com

Explanation of Non-GAAP Financial Measures

We report our financial results in accordance with United States generally accepted accounting principles (GAAP). As a supplement to our GAAP financial results, this earnings announcement contains some or all of the following non-GAAP financial measures: (i) adjusted gross profit, (ii) adjusted gross margin (defined as adjusted gross profit divided by revenue), (iii) adjusted operating income, (iv) adjusted operating margin (defined as adjusted operating income divided by revenue), (v) adjusted net income, and (vi) adjusted earnings per diluted share (EPS). These non-GAAP measures of financial performance are not prepared in accordance with GAAP and computational methods may differ from those used by other companies. Additionally, these non-GAAP measures should not be considered a substitute for any other performance measure determined in accordance with GAAP and the Company cautions investors and potential investors to consider these measures in addition to, not as a substitute for, its consolidated financial results as presented in accordance with GAAP. Each of the non-GAAP measures is adjusted from GAAP results and are outlined in the “GAAP to Non-GAAP Reconciliation” tables included within this earnings release.

In calculating non-GAAP financial measures, we exclude certain items (including gains and losses) to facilitate a review of the comparability of our core operating performance on a period-to-period basis. The excluded items represent amortization of acquired intangible assets, purchase accounting adjustments, restructuring charges, acquisition related expenses, gains and losses on cost-basis investments, discrete tax items, and other items we do not consider to be directly related to our core operating performance. We use non-GAAP measures internally to evaluate the core operating performance of our business, for comparison with forecasts and strategic plans and for calculating return on investment. Accordingly, supplementing GAAP financial results with these non-GAAP financial measures enables the comparison of our ongoing operating results in a manner consistent with the metrics reviewed by management. We believe that these non-GAAP measures, when read in conjunction with our GAAP financials, provide useful information to investors by facilitating:

• the comparability of our ongoing operating results over the periods presented;

• the ability to identify trends in our underlying business; and

• the comparison of our operating results against analyst financial models and operating results of other public companies that supplement their GAAP results with non-GAAP financial measures.

The following are explanations of each type of adjustment that we incorporate into non-GAAP financial measures:

• Amortization of acquired intangible assets. GAAP accounting requires that intangible assets are recorded at fair value as of the date of acquisition and amortized over their estimated useful lives. The timing and magnitude of our acquisition transactions and maturities of the businesses acquired will cause our operating results to vary from period to period, making comparison to past performance difficult for investors. We exclude amortization of acquired intangible assets from our non-GAAP measures because management does not believe these costs are representative of our core operating performance.

• Purchase accounting adjustments. Included in our GAAP financial measures are purchase accounting adjustments, required by GAAP to adjust inventory balances to fair value at the time of acquisition. These non-cash charges are not reflective of our ongoing operations and can vary significantly in any given period driven by variability in our acquisition activity. We exclude purchase accounting adjustments from our non-GAAP measures because management does not believe these costs are representative of our core operating performance.

• Acquisition related expenses. Included in our GAAP financial measures are acquisition related expenses, consisting of external expenses resulting directly from acquisition related activities, including due diligence, legal, valuation, tax and audit services. The timing and nature of our acquisition activity can vary significantly from period to period impacting comparability of operating results from one period to another. These one-time costs can vary significantly in amount and timing and are not indicative of our core operating performance.

• Restructuring charges. Included in our GAAP financial measures are restructuring charges which are primarily for employee compensation resulting from reductions in employee headcount and facilities exit and lease termination costs in connection with Company reorganization and restructuring activities. We believe that excluding these costs provides greater visibility to the underlying performance of our business operations, facilitates comparison of our results with other periods, and facilitates comparison with the results of other companies in our industry.

• Gain or loss on cost-basis investments. Included in our GAAP financial measures, are gains or losses from cost-basis investments. As these gains and losses can vary significantly from period to period and do not constitute part of our ongoing operations, we exclude these items from our non-GAAP measures.

• Other. Other charges include product remediation charges associated with certain SkyWatch^TM surveillance towers and the loss on extinguishment of debt. We exclude other charges from our non-GAAP measures because we do not believe such costs accurately reflect the performance of our ongoing operations.

• Estimated tax effect of non-GAAP adjustments. This amount adjusts the provision for income taxes to reflect the effect of the previously listed non-GAAP adjustments on non-GAAP net income. We estimate the tax effect of the adjustment items by applying the Company’s overall estimated effective tax rate, excluding significant discrete items, to the pretax amount.

• Discrete tax items, net. Included in our GAAP financial measures are income tax expenses and benefits related to discrete events or transactions that are not representative of the Company’s estimated tax rate related to ongoing operations. These discrete tax items can vary significantly from period to period impacting the comparability of our earnings from one period to another. Discrete tax items include charges and reversals of provisions associated with certain unrecognized tax benefits, benefits associated with the reversal of previously recorded valuation allowances against certain deferred tax assets, and other discrete items not included in the annual effective tax rate associated with our ongoing operations. We exclude discrete tax items from our non-GAAP measures because we do not believe such expenses or benefits reflect the performance of our ongoing operations.

EX-99.2

Exhibit 99.2

FLIR Systems Announces CEO Transition Plan

President and CEO Andrew Teich to Retire After 33 Years of Service

Teich to Remain CEO while Board Conducts Search Process

WILSONVILLE, OR – February 14, 2017 – FLIR Systems, Inc.(NASDAQ: FLIR) today announced that Andrew C. Teich, its President, Chief Executive Officer and a member of its Board of Directors, plans to retire after 33 years of service. Mr. Teich will continue to serve in his current roles until a successor is appointed.

As part of FLIR’s succession planning process, the Board will conduct a comprehensive search for a new CEO. FLIR has retained Korn Ferry International, a leading executive search firm, to assist in the search process.

“Nearly 34 years ago, I saw my first thermal camera and I immediately knew it would change the world,” said Mr. Teich. “I feel incredibly fortunate to have had the opportunity to help pioneer the commercialization and global adoption of this technology alongside some of the most talented people in the industry. It has been a deeply rewarding experience, both personally and professionally. Having shipped over a half million thermal cameras in 2016, I am proud of all that we have accomplished and know that FLIR is well-positioned for continued success. I am confident that our next CEO and the rest of the outstanding leadership team will continue to build on the important progress we have made. I look forward to continuing to lead the company in the near-term and working with the Board to ensure a seamless transition.”

“Andy has been a strong leader for FLIR, and we are grateful for his accomplishments during his 33 years of dedicated service,” said Earl R. Lewis, Chairman of the FLIR Board of Directors. “As CEO, Andy helped take FLIR’s business to a new level by, among other accomplishments, leading the expansion of our product offerings, entering new markets and completing key strategic acquisitions. We look forward to continuing to work with Andy while we conduct a thoughtful search process and lay the foundation for a smooth transition.”

Mr. Lewis continued, “Succession planning has always been important to the Board, and we are focused on identifying a strong leader who has a record of driving positive financial results and who shares our vision of leveraging the unique attributes of the FLIR brand and product portfolio. The right candidate will continue to execute on our strategy and build on Andy and our team’s success.”

Mr. Teich joined FLIR in March 1999 after it acquired Inframetrics, where Mr. Teich worked as a pioneer in the commercialization of thermal imaging technology since 1984. In his career at FLIR, Mr. Teich continued to drive the adoption of thermal technology across Military, Industrial and Consumer markets. Mr. Teich has served as President and CEO of FLIR since May 2013 and as a member of the Board of Directors since July 2013. During his tenure as CEO, FLIR grew annual revenue to more than $1.6 billion by introducing new product platforms across FLIR’s six segments; completed five strategic acquisitions that expanded FLIR’s product portfolio and capabilities; developed revolutionary new technologies and successfully brought them to market; and significantly increased its intellectual property portfolio.

Earnings Conference Call

In a separate release today, the company also announced its fourth quarter and full fiscal year 2016 earnings results. The company has scheduled a conference call at 11:00 a.m. ET (8:00 a.m. PT) today to discuss its results for the quarter and full year.

About FLIR Systems

FLIR Systems, Inc. is a world leader in the design, manufacture, and marketing of sensor systems that enhance perception and awareness. FLIR's advanced thermal imaging and threat detection systems are used for a wide variety of imaging, thermography, and security applications, including airborne and ground-based surveillance, condition monitoring, research and development, manufacturing process control, search and rescue, drug interdiction, navigation, transportation safety, border and maritime patrol, environmental monitoring, and chemical, biological, radiological, nuclear, and explosives (CBRNE) detection. For more information, go to FLIR's web site at www.FLIR.com.

Media Contact

Tim McDowd

503-498-3146

tim.mcdowd@flir.com

Investor Relations

Shane Harrison

503-498-3547

shane.harrison@flir.com