FLIR Systems, parent company of Raymarine, today announced it would evaluate a possible sale of its Raymarine unit as the company repositions itself.
“To better position FLIR to deliver long-term growth through the execution of our strategic priorities, we have launched Project Be Ready,” CEO Jim Cannon said in a statement. “This initiative aims to simplify our product portfolio and better align resources with higher growth opportunities while reducing costs.”
The company has discontinued “certain non-core consumer-centric product lines within the outdoor and tactical systems business,” Cannon said. It has also entered into a formal process to evaluate divestiture of its Raymarine non-thermal maritime electronics business, he said.
The remaining businesses within the commercial business unit will be integrated into the industrial business unit beginning in the first quarter of 2020.
“I am very confident that Project Be Ready will help support FLIR’s mission to serve professionals with innovative technologies that provide critical decision support to save lives and livelihoods around the globe,” Cannon said.
The announcement came as FLIR released its fourth quarter and 2019 financial results, reporting revenue increases of 9 percent for the quarter and 6 percent for the fiscal year.
The commercial business unit, which includes the marine segment, totaled $85 million for the fourth quarter, down 10.6 percent from the prior year quarter. The company attributed the decline to lower sales volume in outdoor and tactical systems and security product businesses, partially offset by double-digit growth in intelligent transportation systems.
Fourth quarter operating income for the segment of $12.2 million and operating margin of 14.2 percent decreased 19.4 percent and 156 basis points year-over-year, respectively.
“Our government and defense and industrial business units delivered performances highlighted by fourth quarter revenue growth and expanding full year backlog,” Cannon said in the statement. “However, our commercial business unit continued to face challenges that negatively impacted FLIR’s consolidated organic revenue growth and profitability targets for the full year.”
Revenue for the full year was $1.89 billion, an increase of 6.3 percent compared with $1.78 billion in 2018.
The commercial business unit recorded revenue of $354.4 million in 2019, down 10.1 percent from the prior year. Revenues were adversely affected by declines in the OTS, maritime and security businesses.
Operating income for the year of $45.7 million and operating margin of 12.9 percent decreased 20.4 percent and 167 basis points year-over-year, respectively. The operating income decline was primarily driven by the lower revenue volume, partially offset by a reduction in operating expense.