No. 1 in NW100 | Flir Systems is first three-time winner with thriving infrared-camera business
Wilsonville, Ore.-based Flir Systems, maker of infrared cameras, tops this year's Northwest 100 as the first three-time winner.
Seattle Times business reporter
Headquarters: Wilsonville, Ore.
Major operations: California, Florida, Massachusetts, Montana, Oregon; Estonia, France, Sweden, United Kingdom
CEO: Earl Lewis
Major products/services: Military-targeting systems, security cameras, rifle scopes, equipment monitors, home-inspection devices, night-vision systems for cars.
Special sauce: If there's a potential use for infrared imaging, Flir plans to exploit it sooner or later. Out on the horizon: medical scanners for use in everything from breast cancer to dermatology.
It can be hard to see your way to profitability during a deep recession. But Wilsonville, Ore.-based Flir Systems, which tops this year's Northwest 100 as the first three-time winner, has a not-so-secret weapon for visualizing opportunities: infrared cameras.
Flir, which led the Northwest 100 in 2002 and 2003, finds profit in the part of the electromagnetic spectrum beyond visible light. Infrared cameras and other imaging systems can detect minute temperature differences and turn them into pictures, without relying on an external light source; that makes them useful for everything from targeting Taliban fighters in Afghanistan to detecting gas leaks.
Historically, infrared equipment was quite expensive, and the U.S. military was Flir's major customer. But the company has spent the past several years developing more and more applications for its core technology at lower and lower price points.
"We really believe that if we can just keep driving the price down, down, down, the number of opportunities will go up," said Earl Lewis, Flir's chief executive.
One such opportunity: the auto market. BMW offers a night-vision camera that uses Flir technology as an option. With the dashboard-mounted screen, drivers can "see" three times farther ahead than with conventional headlights; the latest version flashes a warning when it recognizes a pedestrian.
"Eventually, every car will have some kind of infrared detector," Lewis said, comparing it to now-ubiquitous GPS devices.
Not that Lewis expects to make pots of money from the car market. "There's not a lot of margin in supplying the automotive industry -- never was," he said. "But if we can be making 30,000 detectors for the car market, we can make a lot more to use in these other applications, and drive the cost down."
That continuous broadening of the market for infrared technology has helped Flir more than double its annual sales since 2004, to $1.08 billion last year; net profit over that time has nearly tripled, to $203.7 million.
The company's strong performance has continued into the first quarter of 2009.
The recession has cut into demand for its thermographic equipment-monitoring products, but quarterly revenue was up 14.8 percent year-over-year, and profit rose 48.6 percent.
Despite the broadening of Flir's product base, the company still relies on government for more than half its sales, about the same proportion as in 2004; that makes it vulnerable to shifts in budget policy (though Flir expects some benefit from the stimulus package). It faces competition in most of its target markets, including from Everett-based Fluke.
And though Lewis concedes the company risks spreading itself too thin, he said the upside of bringing infrared to the masses is too great to pass up.
"If we can aggregate the (research and development) costs over a big base of different applications, we can push the costs down and in any of these markets we can be the low-cost supplier," he said. "And it will be very difficult for anyone to attack Flir."
Copyright © 2009 The Seattle Times Company
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