FLIR Receives Defense Contracts - Analyst Blog

Recently, FLIR Systems, Inc. FLIR received a nod for a full-rate production decision for its integrated chemical, biological, radiological, nuclear and explosives (CBRNE) threat response system for the Dismounted Reconnaissance Sets, Kits and Outfits (DR SKO) program from the U.S. Department of Defence.

The DR SKO program is a joint service and an initiative from the Department of Defence, concentrating on CBRNE threat detection systems, primarily utilized by the Army, Navy, Air Force, Marines and Civil Support Teams. FLIR's DR SKO system offers a comprehensive set of CBRNE detection, identification, sample collection, testing and personal safety kits that allow defense personnel to conduct site evaluation and carry out subsequent missions.

This program, which was originally called the Joint Nuclear Biological Chemical Reconnaissance System Increment II (JNBCRS2), is in the process of development since 2008.

This apart, FLIR also received a $12.3 million contract from the U.S. Army for the initial production of low-rate DR SKO systems along with a $5.8 million development contract for program management and logistics tasks associated with the program.

The U.S. Department of Defense has resumed efforts to strengthen its artillery after budgetary woes ebbed with the passing of Obama's $1.1 trillion Omnibus spending measure in Jan 2014. The bill allows Pentagon to utilize as much as $93 billion for buying weapons and another $63 billion for advancing research and development in the sector. In an attempt to optimally utilize the funds, Pentagon has recently awarded 13 defence contracts aggregating to about $305 million.

The companies receiving most of the contracts include General Electric Co. GE, CACI International Inc. CACI, Rockwell Collins Inc. COL, Lockheed Martin Corp. and FLIR Systems, Inc.

FLIR Systems currently carries a Zacks Rank #4 (Sell).