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FLIR Systems, Inc. reports 23.9% Net Income growth in 2020 and 1.5 pp EBITDA Margin growth from 20.6% to 22.0%

02/25/2021 • About FLIR Systems, Inc. ($FLIR) • By InTwits

FLIR Systems, Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
  • EBITDA Margin is relatively stable: 22.0% in 2020 vs. 20.6% in 2019 vs. 21.3% in 2016
  • FLIR Systems, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's a lot of higher than industry average of 3.2%.
  • CAPEX is quite volatile: $126m in 2020, $92m in 2019, $53m in 2018, $135m in 2017, $67m in 2016
  • The company has business model with average profitability: ROIC is 11.9%
  • It operates with medium-size leverage: Net Debt/EBITDA is 1.1x while industry average is -0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability


FLIR Systems, Inc.'s Revenue increased slightly on 1.9%. Revenue growth showed acceleration in 20Q4 - it increased 7.2% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.5 pp from 20.6% to 22.0% in 2020.

Gross Margin showed almost no change in 2020. During the last 5 years Gross Margin topped in 2018 at 50.7% and was declining since that time. SG&A as a % of Revenue decreased on 3.2 pp from 23.4% to 20.2% in 2020. During 2016-2020 SG&A as a % of Revenue topped in 2019 at 23.4%.

Net Income margin increased slightly on 2.0 pp from 9.1% to 11.1% in 2020.

Investments (CAPEX, working capital and M&A)


The company's CAPEX/Revenue was 3.0% in 2020. CAPEX/Revenue increased slightly on 0.63 pp from 2.3% in 2017 to 3.0% in 2020. It's average CAPEX/Revenue for the last three years was 2.4%.

Return on investment


The company operates at low ROIC (11.9%) and ROE (11.3%). ROIC increased slightly on 0.61 pp from 11.3% to 11.9% in 2020. ROE increased on 2.2 pp from 9.2% to 11.3% in 2020.

Leverage (Debt)


Debt level is 1.1x Net Debt / EBITDA and 1.8x Debt / EBITDA. Net Debt / EBITDA increased slightly on 0.014x from 1.1x to 1.1x in 2020. Debt increased on 8.2% while cash increased on 4.6%. During 2016-2020 Net Debt/EBITDA bottomed in 2017 at -0.3x and was growing since that time.

FLIR Systems, Inc. has no short term refinancing risk: cash is higher than short term debt (1,183.0%).

Valuation and dividends


The company's trades at EV/EBITDA 17.6x and P/E 32.8x.

Management team


James J Cannon "Jim" is a FLIR Systems, Inc.'s CEO. James J Cannon "Jim" has spent 3 years with the company. The company's CFO is Carol P Lowe. Carol P Lowe has 3 years tenure at the company.

Financial and operational results


FY ended 12/31/2020

FLIR Systems, Inc. ($FLIR) key annual financial indicators

mln. $201620172018201920202020/2019
P&L
Revenue1,6621,8001,7761,8871,9241.9%
Gross Profit7678599009309471.9%
SG&A322374387442389-11.9%
EBITDA3533613853884249.2%
EBIT296290319
Interest expence181716
Tax10917225
Net Income16710728217221323.9%
Stock Based Compensation283134
Balance Sheet
Cash3615195122852984.6%
Accounts Receivable352347324
Inventory371372352
Accounts Payable11410695
Short Term Debt15004025-37.5%
Long Term Debt50242142267675011.0%
Cash flow
Capex364231455727.6%
Dividends668388
Acquisitions41927
Ratios
Revenue growth6.7%8.3%-1.4%6.3%1.9%
EBITDA growth-0.6%2.2%6.7%0.8%9.2%
Gross Margin46.2%47.7%50.7%49.3%49.2%-0.0%
EBITDA Margin21.3%20.0%21.7%20.6%22.0%1.5%
EBIT Margin17.8%16.1%17.9%
SG&A, % of revenue19.4%20.8%21.8%23.4%20.2%-3.2%
SBC, % of revenue1.7%1.7%1.9%
Net Income Margin10.0%6.0%15.9%9.1%11.1%2.0%
CAPEX, % of revenue2.2%2.3%1.7%2.4%3.0%0.6%
ROIC14.2%12.8%14.0%11.3%11.9%0.6%
ROE10.0%6.1%15.2%9.2%11.3%2.2%
Net Debt/EBITDA0.4x-0.3x-0.2x1.1x1.1x0.0x
Interest expence / Average debt3.5%3.6%3.8%
People
Insider ownership1.0%1.0%1.0%
Employees3,4363,5423,649
Revenue/Employee, th. $484508487

FLIR Systems, Inc. ($FLIR) key quoterly financial indicators

mln. $20Q120Q220Q320Q4 YoY change
P&L
Revenue451482466524 1.4%0.0%-1.0%7.2%
EBITDA56126113126 -44.5%27.9%7.9%49.2%
Net Income15616175 -75.0%32.8%-2.2%4,367.9%
Balance Sheet
Cash309333320298 8.5%23.8%8.3%4.6%
Short Term Debt2032037825 70.0%73.2%-24.2%-37.5%
Long Term Debt672677753750 -1.7%-1.4%10.3%11.0%
Ratios
Gross Margin48.6%52.3%49.1%47.0% -3.9%3.9%0.3%-0.6%
EBITDA Margin 12.4% 26.2% 24.2% 24.0% -10.2%5.7%2.0%6.8%
Net Income Margin 3.4% 12.7% 13.0% 14.3% -10.5%3.1%-0.2%14.0%

Peers in Electronic Equipment & Instruments


Below you can find FLIR Systems, Inc. benchmarking vs. other companies in Electronic Equipment & Instruments industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Intellicheck, Inc. ($IDN)--6.3%23.2%72.9%40.1%
nLIGHT, Inc. ($LASR)-36.8%38.1%-7.7%26.1%
Luna Innovations Incorporated ($LUNA)--21.0%29.7%64.3%17.3%
PAR Technology Corporation ($PAR)-1.3%-13.5%-7.0%14.2%
Cognex Corporation ($CGNX)-44.7%5.3%-10.0%11.8%
 
Median (26 companies)-3.8%4.1%11.6%4.4%-3.5%
FLIR Systems, Inc. ($FLIR)-8.3%-1.4%6.3%1.9%


Top companies by Gross margin, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Intellicheck, Inc. ($IDN)80.0%85.5%91.3%87.0%86.7%
Cognex Corporation ($CGNX)75.2%75.6%74.4%73.8%74.5%
National Instruments Corporation ($NATI)74.5%74.5%75.4%75.1%71.2%
Coda Octopus Group, Inc. ($CODA)-66.4%-65.6%63.5%
Applied DNA Sciences Inc ($APDN)82.2%77.3%69.1%83.7%62.7%
 
Median (26 companies)39.4%41.0%40.4%42.2%42.9%
FLIR Systems, Inc. ($FLIR)46.2%47.7%50.7%49.3%49.2%


Top companies by EBITDA margin, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Keysight Technologies Inc. ($KEYS)18.5%14.6%-0.9%23.7%27.0%
Cognex Corporation ($CGNX)31.9%36.0%30.1%24.0%25.3%
National Instruments Corporation ($NATI)15.7%16.9%17.9%20.0%22.3%
Badger Meter, Inc. ($BMI)18.6%20.1%18.7%21.1%21.2%
Track Group Inc ($TRCK)-3.5%-1.4%7.6%15.4%21.0%
 
Median (26 companies)2.9%4.1%3.3%12.0%8.7%
FLIR Systems, Inc. ($FLIR)21.3%20.0%21.7%20.6%22.0%


Top companies by CAPEX/Revenue, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Know Labs Inc ($KNWN)0.4%0.0%2.3%4.4%57.5%
Applied DNA Sciences Inc ($APDN)16.1%3.1%6.8%1.3%55.1%
nLIGHT, Inc. ($LASR)4.0%4.0%6.1%7.7%10.9%
Vishay Precision Group, Inc. ($VPG)4.6%2.7%4.8%3.9%8.5%
LightPath Technologies, Inc. ($LPTH)6.5%7.8%7.7%5.7%7.0%
 
Median (25 companies)2.0%1.6%2.3%1.9%2.1%
FLIR Systems, Inc. ($FLIR)2.2%2.3%1.7%2.4%3.0%


Top companies by ROIC, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Zebra Technologies Corporation ($ZBRA)2.2%10.2%20.8%23.2%20.0%
Badger Meter, Inc. ($BMI)16.9%18.2%17.6%18.7%18.5%
Keysight Technologies Inc. ($KEYS)16.9%6.8%-8.0%15.6%15.1%
National Instruments Corporation ($NATI)10.3%12.5%14.2%13.9%14.8%
Cognex Corporation ($CGNX)17.7%25.6%20.1%11.9%13.9%
 
Median (26 companies)2.1%2.6%0.9%7.8%3.4%
FLIR Systems, Inc. ($FLIR)14.2%12.8%14.0%11.3%11.9%


Top companies by Net Debt / EBITDA

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Identiv, Inc. ($INVE)--2.1x1.9x9.0x
Itron, Inc. ($ITRI)1.0x2.0x12.3x3.2x7.3x
Track Group Inc ($TRCK)--12.2x5.2x3.5x
Trimble Inc. ($TRMB)1.1x1.3x3.4x2.9x2.2x
Luna Innovations Incorporated ($LUNA)-6.9x-108.1x-19.9x-2.9x1.8x
 
Median (16 companies)-0.9x-0.9x-1.0x0.2x0.3x
FLIR Systems, Inc. ($FLIR)0.4x-0.3x-0.2x1.1x1.1x


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