FLIR Systems and Indigo Systems Announce Merger Agreement

Transaction Expected to Close in Early 2004

Portland, OR and Goleta, CA. – FLIR Systems, Inc. (NASDAQ:FLIR) and Indigo Systems Corporation announced today that they have entered into a Definitive Agreement and Plan of Merger pursuant to which FLIR will acquire Indigo Systems Corporation. Indigo security holders will receive cash consideration of approximately $165 million, and all outstanding Indigo stock options will be converted into options to purchase FLIR stock. The transaction is valued at approximately $190 million.

Indigo, founded in 1996, is a leading developer and supplier of a wide range of infrared imaging products, including cooled and uncooled infrared detectors, camera cores and finished cameras. Estimated Indigo revenue for calendar year 2003 is approximately $55.0 million.

“We are extremely happy to announce a merger with Indigo,” commented Earl Lewis, Chairman, President and CEO of FLIR. “As we have publicly stated, one of our key business objectives has been to secure a low cost, high quality supply of infrared detectors to help us reduce costs and continue our leadership in the commercial infrared industry. Indigo provides this, and much more. In its brief history, Indigo has emerged as one of the leading centers of innovation in the infrared detector industry, with significant intellectual property and an outstanding reputation for designing the highest performance components in the industry. In addition, Indigo is an excellent manufacturer of infrared equipment in its own right in areas complementary to FLIR’s existing markets. Indigo will help us lower costs, expand into new markets, and provide an excellent technology base on which we can capitalize for the future.”

Tim Fitzgibbons, Chief Executive Officer of Indigo, commented, “FLIR is the ideal partner for Indigo. Our strengths, especially in component design and manufacturing, marry perfectly with FLIR’s industry leading sales and marketing and systems integration capabilities. Together, we are positioned to offer our customers lower cost and higher performance infrared systems.”

FLIR expects the transaction to be accretive to earnings during 2004. Completion of the transaction is subject to the approval of Indigo shareholders, review by regulatory authorities and other customary conditions. It is expected to close in early 2004.

About FLIR Systems

FLIR Systems, Inc. is a world leader in the design, manufacture and marketing of thermal imaging and stabilized camera systems for a wide variety of thermography and imaging applications including condition monitoring, research and development, manufacturing process control, airborne observation and broadcast, search and rescue, drug interdiction, surveillance and reconnaissance, navigation safety, border and maritime patrol, environmental monitoring and ground-based security. Visit the company's web site at www.flir.com.

About Indigo Systems

Indigo Systems Corporation, based in Goleta, California, is a premier developer and supplier of advanced infrared cameras and components, covering the entire infrared spectrum including near-, midwave-, and longwave-IR. Indigo’s outside investors include The Carlyle Group, WK Technology, Lago Ventures and Founders Capital. Since 1996, Indigo has provided IR cameras, software, and enclosure solutions for commercial, industrial, security, military and R&D applications. Indigo Systems is a next-generation IR company, whose unique structure and mix of commercial and defense expertise allows it to deliver military-grade infrared products while driving down costs to enable new, commercial applications of infrared cameras.

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