"We call it FLIR, for all of you home gamers. Now FLIR gets about 53% of its sales from its government systems division. The selling products that are used for surveillance, protecting strategic assets, drug enforcement, search and rescue and targeting, and yes, special ops. We use their technology to protect our bases in Iraq and Afghanistan and those bases are going to last much longer than people thought when Obama took office. How about the domestic side? New York's major airports use FLIR cameras and so does Dallas-fort worth in Texas. Logan up in Boston and also got its gear in certain petro and nuclear facilities but if I told you which, they'd have to kill you.
Around 17% of FLIR sales come from products from commercial applications, this includes the security of private businesses that must be defended, again, petro chemical nuclear plants, something that I've been saying falls under the broad rubric of the umbrella of homeland security. And as governments around the world are starting to think about creating regulations that would make companies spend more and protecting their own FLIR's product are used to protect…
How great is the thermal imaging business? Sales for FLIR security and surveillance area grew at nearly 50% in 2008. That is pretty impressive… The less sexy more stabile part the business representing 30% of the FLIR sales are thermograph. Infrared systems. Really kind of maintenance systems. Used for both predictive and preventative maintenance and building inspection and gas protection application. Not as sexy as night vision goggles but company has 40% of market share in its business. Maintenance are less vulnerable than even homeland security unless you want some critical piece of infrastructure to fail because you didn't take care of it professorially…
All right why is the stock being held back? A reason that you might have wanted to stay away from the stock in the past. A big intellectual proprietary rowl with them and Raytheon. A case that Raytheon brought against FLIR and on September 1st the judge hearing the case dismissed the case from Raytheon and frankly I think much closer to a resolution that I think will go FLIR's ways.
The company reports next week, October 21st, same day as Wells Fargo reports. Company's increasingly bullish so if it dips anytime since we've got a crazy market with intraday dips I think that would give you a good entry point with the solid catalyst ahead. The stock's not expensive. About 18.8 time next year's earnings. Here's the bottom line. Our soldiers need to be able to see in the dark. Our screeners need to be able to see suspicious people and objects that might be hidden to the naked eye, but visible to infrared and that's why I think thermal imaging and FLIR system, the best of breed imaging play aren't going away.
