Earl Lewis, the long-serving president and CEO of infrared imaging giant FLIR Systems, is to retire next month.
Lewis, who has led the company as its senior executive since late 2000 and will remain with the company as an advisor and as chairman of its board of directors, is to be replaced by Andrew Teich, who currently heads up FLIR’s commercial systems division.
Teich joined FLIR through the Portland, Oregon, company’s 1999 acquisition of Inframetrics, where he had been employed since 1984.
In a statement announcing the management transition, Lewis said that the appointment of Teich represented the culmination of a two-year-long process that had started with his three direct reports – all of whom had been in the running to step up to the CEO role – each completing Harvard’s advanced management program.
“The difficulty in making a final decision was a result of the board's strong belief that all three were highly competent and capable leaders,” Lewis said, adding that Teich’s successor to head up FLIR’s commercial systems division will be announced shortly.
Golf on the mind
In between quips about his imminent retirement and “learning how to play golf again”, Lewis announced FLIR’s quarterly financial results for the last time as CEO – with sales of $349 million and net income of $69 million for the first quarter of the year at almost exactly the same level as the opening three months of 2013.
That flat overall performance masked a 5% increase in sales from the commercial business, balanced out by a 6% fall in government systems revenue. That was not an unexpected result, given the impact of cuts to defense spending in the key US market and the ongoing weakness in Europe, and although the company believes that it has now seen the bottom of the anticipated dip in US Department of Defense bookings, procurement delays remain an issue.
On the thorny question of European economics, Lewis said that he saw no sign of an end to the difficulties facing the region, citing factors such as spiraling unemployment in Spain as long-term, structural problems with no easy solutions. “I think we’re in for the long haul,” said the out-going CEO, noting that FLIR’s business was instead flowing to emerging economies such as the Middle East.
Responding to investor questions for the first time as CEO-elect, Teich – whose background is in sales - said that he would focus on growing revenues in part through product development initiatives and cross-pollination between FLIR’s two business units.
Having previously cut costs in anticipation of that budget squeeze, FLIR declared a quarterly cash dividend of $0.09 per share payable June 7 – equivalent to around $13 million. Following the results and announcement of the CEO transition, which took some investors by surprise, FLIR's stock price slipped by around 4%.
• FLIR will be among the exhibitors at next week's SPIE Defense, Security & Sensing (DSS) trade show, which takes place at the Baltimore Convention Center from April 30 through May 2.
