FLIR Systems said it is suspending the sale of its Raymarine non-thermal maritime electronics business due to “marketplace dislocation” resulting from the coronavirus pandemic.
“We have clear expectations relative to the valuation of the Raymarine assets and, in light of the challenging macro-economic conditions, have made a decision to maintain the maritime electronics business for the foreseeable future,” CEO Jim Cannon said during call with investors and analysts to discuss first-quarter results.
Cannon said the company values its Raymarine-branded marine electronics, but added that FLIRhas more of a commercial orientation and has pivoted more toward professional users.
Cannon said FLIR had been working with several bidders for Raymarine.
“But with the pandemic, I mean, we see the M&A market, in general, seizing up,” he said. “So we thought it prudent to suspend that process to run the business for the foreseeable future. It certainly does have more headwinds than more of the defense or professional industrial exposure that we have. But … we understand and expect what those headwinds could be.”
FLIR also gave details of the “Project Be Ready” campaign launched late last year — an effort that seeks to reduce the complexity of the business and scale it over the long term while removing costs over the short term.
“As a part of our transformation, we are further streamlining our management structure by eliminating the business unit leadership roles previously held by [former government and defense business unit president] David Ray and [former industrial unit president] Frank Pennisi,”Cannon said. “This action will result in cost savings, provide a more direct line of communication and accountability with our lines of business, and increase the level of interaction that I have with our customers.”
As shared on the fourth-quarter earnings call, the commercial business unit has been eliminated.Ss a result, Travis Merrill, who served as the unit president, is also leaving FLIR, said Cannon.
Cannon called their contributions to the company “meaningful.”
“These structural changes to our organizations do not alter the way FLIR goes to market or the way we are organized to engage with our customers,” he said. “As FLIR's transition progresses, we are streamlining our organization in a manner that best positions the company for success as we move forward during a period of uncertainty.”
FLIR is also working to simplify its product portfolio. As part of this process, it discontinued several non-core consumer-centric product lines within the outdoor and tactical systems.