FLIR's New Contract - Analyst Blog

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FLIR Systems Inc. ( FLIR ) received a $38 million indefinite delivery and quantity contract from the U.S. Army to support its MEDEVAC program. The contract involves supply of spare components for Star SAFIRE® II stabilized multi-sensor systems installed on the Army's fielded MEDEVAC Blackhawk helicopters.

All deliveries under the contract are expected to be made within five years, with the first one worth $1.7 million already been done. The contract will be executed from FLIR's facility in Wilsonville, OR. With the receipt of this contract, FLIR will be a part of an important program for the benefit of people. Number of lives has been saved by the army under the MEDEVAC program.

Recently, the company was also received a $17.9 million order for its SeaFLIR® maritime imaging systems from the U.S. Navy Expeditionary Combat Command (NECC). From third-quarter 2012, deliveries will be started and the contract will be executed from FLIR's facility in North Billerica, MA. FLIR's imaging systems are among the best in the industry.

Patrol Boats of the US Navy will be using these systems for their search and rescue, interdiction, intelligence, surveillance, reconnaissance and targeting applications. Further, SeaFLIR® maritime imaging systems are designed to operate in the toughest condition at sea. The contract is an add-on to the company's number of contracts with the US Navy.

The company has a well-diversified business spread across geographies, products and markets. FLIR System's core strength of low price, highest quality products and service put the company in good stead. Backed by worldwide acquisitions, client-wins, margin management and operating excellence, the company hopes to drive profitability going forward.

However, a competitive environment and economic disruptions continue to hamper the smooth running of the business. Government budgetary constraints and strict regulatory compliance remain as headwinds. FLIR's Government Systems division revenue for first-quarter 2012 declined by 19% year over year to $146.1 million in the quarter.

FLIR Systems Inc. is a leader in design, manufacture and marketing of thermal imaging systems. Its products are used in a wide variety of applications in commercial, industrial and government markets, internationally as well as domestically. It offers a wide variety of system configurations to suit specific customer requirements. Major competitors of FLIR Systems are L-3 Communications Holdings Inc. ( LLL ) and Lockheed Martin Corporation ( LMT ).

We continue to maintain a Neutral rating on FLIR System for the long term. The company has a Zacks #4 Rank (Sell recommendation) over the next one-to-three months.

FLIR SYSTEMS (FLIR): Free Stock Analysis Report
L-3 COMM HLDGS (LLL): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: FLIR , LLL , LMT

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