CEO blames federal government shutdown for slowing business

by: SPOKESMAN PHOTO: JOSH KULLA - The Wilsonville headquarters of FLIR will not be impacted by the companys realignment following lower-than-expected revenue projections. Wilsonville-based FLIR announced last week it is realigning production and engineering around the world in response to declining revenues caused by ongoing turmoil surrounding the United States federal government shutdown, which ended Thursday.

According to an Oct. 11 company press release, FLIR will be “streamlining its global operations in order to better position FLIR to develop, produce and market products more quickly and cost-effectively.” This comes as a result of third-quarter preliminary revenue and earnings results that were “negatively impacted by weakness in markets that have exposure to the U.S. federal government.”

Extended procurement and export licensing processes at federal agencies slowed shipments of the company’s equipment to customers.

In response, FLIR will undergo a realignment involving the closure up to six facilities in the United States and Europe. Some operations will be moved to larger facilities, while the company also intends to consolidate optics and laser manufacturing. Some reports estimate the company will shed around 100 jobs globally, none in Wilsonville, where the company keeps its headquarters and conducts research and development.

“While we are disappointed in the preliminary results for the third quarter,” FLIR CEO Andrew Teich said in a press release, “we have also taken steps, above and beyond those related to our strategic review, to reduce costs in response to the current operating environment and we remain highly confident in our strategy and outlook for the future.”

FLIR said it expects to save more than $20 million annually as a result of the restructuring, which the company said would not affect its Wilsonville headquarters.

The moves are a response to last week’s lower-than-expected third-quarter earnings of $358 to $360 million. This lowers expected year-end revenue projections from between $1.5 to $1.6 billion to $1.45 to $1.5 billion.

Despite ongoing success securing military sales, which normally accounts for a significant portion of the company’s revenue, Teich said the ongoing partisan battle over federal government funding is one of the reasons behind the revised projections.

“Ongoing uncertainty in the U.S. government is likely to continue to affect our performance in the fourth quarter, and our revised guidance is intended to reflect this environment,” Teich said.

FLIR will release full financial results for the third quarter of 2013 on Oct. 24. A conference call for investors will be held that morning.

FLIR Systems is a world leader in sensor systems. The company’s advanced thermal imaging and threat detection systems are used for many applications including airborne and ground-based surveillance, manufacturing process control, search and rescue, drug interdiction, navigation and much more.

For more information, visit FLIR’s website,, or see the company press release at

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