Flir Systems reported first-quarter sales of $444.7 million, 1.2 percent higher than the same period a year ago.
Organic revenue growth was 0.9 percent, which excludes revenue from the acquisitions of Endeavor Robotics and Aeryon Labs in the first quarter of 2019, and revenue from the divested security businesses in the first quarter of 2018.
The commercial business unit, which includes the marine segment, recorded $92 million of revenue in the first quarter, down 16.1 percent from the prior year that included revenue from the divested security businesses. It also was negatively impacted by continued restructuring in outdoor and tactical systems, and negative foreign exchange effects.
Gross profit in the first quarter 2019 was $233.7 million, compared to $217.9 million in the first quarter 2018. GAAP gross margin increased 300 basis points to 52.5 percent in the first quarter 2019, compared with 49.6 percent in the prior year.
GAAP operating income in the first quarter increased 46.1 percent to $81.1 million, compared to $55.5 million in the prior year, representing a 560-basis-point improvement in operating margin.
“Overall, we are pleased with our start to 2019,” said Flir president and CEO Jim Cannon in a statement. “In the quarter, improvements in our product mix and continued commitment to the FLIR Method productivity initiatives drove meaningful margin expansion year over year, resulting in double-digit earnings growth.”
“With another quarter of robust bookings – combined with significant opportunities across the portfolio, including our two recent unmanned acquisitions – FLIR is well-positioned for strong performance through 2019 and beyond,” said Cannon.
The company continues to expect revenue in 2019 to be in the range of $1.92 billion to $1.95 billion. That represents 8 to 10 percent revenue growth compared to 2018, including approximately 5 percent organic revenue growth, in-line with the strategic plan presented in May 2018.
Flir also continues to expect 2019 adjusted operating income margins to be in the range of 22 to 23 percent, and adjusted earnings per diluted share to be in the range of $2.30 to $2.36.
Financial outlook for the year includes contributions from the Aeryon Labs and Endeavor Robotics acquisitions, which are expected to be dilutive to adjusted EPS through 2019.
The company’s board of directors has declared a quarterly cash dividend of $0.17 per share on Flir common stock, payable on June 7, to shareholders of record as of close of business on May 24.