Planar Systems, Inc. (PLNR)
F3Q12 Earnings Conference Call
August 14, 2012 5:00 PM ET
Gerry Perkel - President and CEO
Scott Hildebrandt - VP and CFO
Jim Ricchiuti - Needham & Company
Jeff Martin - ROTH Capital Partners
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Good day, ladies and gentlemen, and welcome to the Q3 2012 Planar Systems Earnings Conference Call. My name is Reggie and I will be your operator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session toward the end of this conference. (Operator Instructions) As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Mr. Gerry Perkel, President and CEO. Please proceed, Sir.
Good afternoon, and thank you for joining us for Planar’s third quarter earnings conference call. With me this afternoon is Scott Hildebrandt, Planar's Chief Financial Officer. Before I begin I do need to say that the press release we issued today contain forward-looking statements. On this conference call we will comment on our strategic, business and financial outlook and make other forward-looking statements based on our current expectations, estimates, assumptions and projections. Words such as expect, anticipate, intends, plan, believes, sees, estimates and variations of such words and similar expressions are intended to identify such forward-looking statements.
All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. I refer you to the earning’s press release we issued earlier today and to our periodic filings with the SEC for a description of factors that could cause actual results to differ materially from the results described in the forward-looking statements. Forward-looking statements we make today speak only as of today and we do not undertake any obligation to update any such statements to reflect events or circumstances occurring after today.
With that behind us, let me talk a bit about our financial results released earlier today. We are pleased that we saw a strong rebound in third fiscal quarter versus our performance in the second fiscal quarter of this year. We had expected to see a rebound in revenues over the second quarter, and at $44.7 million, we exceeded our third quarter sales expectations as total sales grew 19% sequentially.
Let me talk a bit about our various product lines. In the third quarter we experienced our highest quarterly sales of digital signage products to date. Digital signage product sales were $11.8 million, which represents 26% of total revenue for the quarter, 58% sequential growth and 9% year-on-year growth. Within our signage product portfolio we saw strong performance from our Matrix Tiled LCD offering which experienced year-on-year growth of 66%.
When looking at our year-on-year digital signage results, it is important to note the shift in the makeup of our digital signage product revenues. Our digital signage product revenues are made up of what we refer to as standard products and custom products. Custom products are just that. Customized versions of products designed for a specific customer, who typically will have large rollouts. Our standard products, while typically embodying a variety of innovative features are designed to be purchased and utilized by a variety of customers.
In the past 18 months or so, our strategy has shifted more towards building innovative differentiated standard products such as our Matrix product family where we can leverage our investments and drive volume cross larger customer sets. As a result our revenues become more and more standard product oriented in digital signage. When you look at the third quarter for instance, our 9% overall digital signage product signage product revenue year-on-year growth was made up over $4 million or 56% growth in our standard digital signage products, offset by a little over $3 million in decline, in custom digital signage products.
While we made from time-to-time have custom digital signage opportunities and revenue contributions, going forward we expect the majority of our digital signage product revenue to come from standard products and our overall digital signage product growth rate to increase as we no longer have the drag of the reduced custom signage product revenue to contend with.
And the third important part of driving that standard digital signage product growth going forward is the expansion of our product portfolio with innovative leading-edge products that appeal to a variety of customers. In third quarter we made some significant progress towards expanding our portfolio. We shift our first Planar Mosaic system, which is a new offering leveraging our Matrix platform and extended it to applications where Matrix could not reach easily such as broad uses of flat panels in architectural designs.
In addition, we added a new family of very unique large signage flat-panel monitors in the UltraLux series. This family includes a one of a kind sleek industrial design, a number of great features for digital signage installers and comes in 60, 70 and 80 inch diagonal sizes. We see these products being deployed into digital signage applications that demand large size displays and where having the sleek design as a valued part of the digital signage deployment. We already have a number of orders for this new offering and we will begin shipping this product in the fourth fiscal quarter.
We also launched our first transparent LCD product with the introduction of our LookThru 32 inch transparent LCD display case. This product will help customers display their merchandise inside of a display case and to deliver marketing messages on the transparent LCD that fronts the case, and offers retailing customers a new way to display and market their products. All in all with the strong quarter for our digital signage products not only in revenue performance but in the new offerings we made progress on which position us for continued growth in the future.