Planar Announces Fiscal Third Quarter 2011 Financial Results

Planar Systems, Inc. (NASDAQ:PLNR), a worldwide leader in specialty display solutions, recorded sales of $45.7 million and GAAP loss per share of $0.10 in its third fiscal quarter ended July 1, 2011. On a Non-GAAP basis (see reconciliation table), loss per share was $0.01 in the third quarter of fiscal 2011.

“While our year-over-year revenue growth in the third quarter was a bit lower than we expected, I am pleased with the continued progress we have made in growing sales of our digital signage products and the potential implications for our longer term growth prospects,” said Gerry Perkel, Planar’s President and Chief Executive Officer. “Specifically, we continue to experience very strong demand for our Clarity™ Matrix LCD Video Wall System and we remain excited about our future growth potential in the broader, fast-growing, digital signage market.”

THIRD QUARTER BUSINESS HIGHLIGHTS
  • Revenue growth occurred in 2 of the 3 geographical regions compared with the third quarter of last year, with Americas declining 1%, EMEA up 5% and Asia Pacific up 19%
  • Sales of digital signage products totaled $10.9 million, and represented 24% of total revenue and 35% growth compared with the third quarter of the previous fiscal year, led by sales of Clarity Matrix (LCD Video Walls) which increased 228% compared to the same period in fiscal 2010
  • Rear Projection Video Wall Cube sales grew 16% compared with the third quarter of last year, with similar growth across all three geographies
  • Sales of High-end home products increased 21% compared with the same period a year ago, fueled by the first shipments, including demo orders, of the Runco® D-73d, the world’s only 3D projector for the home, with Constant Stereoscopic Video (CSVTM), utilizing passive glasses
  • Several new product and other announcements were made in the 3rd quarter, aimed at the digital signage market:
    • 82” slim LCD Display, Planar d82L with AccessChoice™ (rack-mounted electronics ideal for public venues)
    • Multi-Touch LCD Video Walls, Ultra-thin 92”, 130”, and 138” Clarity Matrix Touch video walls
    • Launch of a new website showcasing Planar’s breadth of digital signage products (www.planardigitalsignage.com)
    • Clarity Matrix LCD Video Wall System featured in a number of trade-shows, demo rooms, and applications:
      • Selected as New Media Display by renowned architect Juergen Mayer H.
      • Selected as the Title Exhibition Partner for New Media Display at NeoCon 2011
      • Selected by Cyviz for their Collaborative Telepresense (CTP) product portfolio
      • Selected by the NBA’s Portland Trail Blazers in the Rose Garden’s Rip City United Headquarters

THIRD QUARTER FISCAL 2011 RESULTS

The Company’s total sales for the third quarter of fiscal 2011 increased 2 percent compared with the same period a year ago. The increase was primarily driven by rising sales of Clarity Matrix LCD video wall products, rear projection video wall cubes and high-end home projection products, partially offset by declining sales of desktop monitors and custom AMLCD displays. The Company believes its desktop monitor decline was due to a broad slowdown in demand in the industry experienced during the quarter.

The Company’s consolidated gross margins (on a Non-GAAP basis) were 28.1 percent in the third quarter of 2011, up from 27.8 percent in the third quarter of 2010 (see reconciliation table). The increase in gross margin, as a percent of sales, from the previous year was primarily due to a more favorable revenue mix of higher margin products including digital signage displays and rear projection cubes as well as lower sales of lower margin desktop monitors. Total operating expenses (on a Non-GAAP basis) for the third quarter of 2011 increased approximately $1.1 million to $13.2 million compared with the same quarter a year ago, primarily driven by increased research and development and sales and marketing expenses. The Company has continued to increase sales and marketing resources, adding a number of full time employees to the payroll during the last quarter. In addition, the Company has been increasing marketing program spending, largely focused on pursuing increased sales of digital signage products.

The Company’s cash balance was $23.4 million at the end of the third quarter, with no debt, a decline of $4.2 million from the end of the second quarter. The cash decline was primarily caused by growth in inventory as a result of weaker than expected demand for desktop monitors, which the Company believes will be sold within the next few quarters.

BUSINESS OUTLOOK

Looking forward, the Company believes it can achieve revenue growth in excess of 10 percent in the next fiscal year (2012), driven primarily by growth in sales of digital signage products. As previously discussed, the Company continues to add resources, mostly in sales and marketing, and also expects to utilize additional working capital to pursue growth opportunities.

Due to timing of some customers’ projects, combined with near-term weaker demand for custom AMLCD products, the Company is expecting only a small increase in sales sequentially in the fourth quarter of fiscal 2011. As stated above, the Company currently plans to continue to add resources in the fourth quarter to pursue growth opportunities in fiscal 2012 and beyond, resulting in increased operating expenses. In addition, the Company expects sales of desktop monitors to increase in the fourth quarter, causing a less favorable product mix and a lower overall gross margin percentage when compared with the third quarter of fiscal 2011. As a result, the Company currently anticipates revenue in the range of $46-48 million and Non-GAAP loss between $0.06 and $0.08 per share for the fourth quarter of fiscal 2011.

Results of operations and the business outlook will be discussed in a conference call today, August 11, 2011, beginning at 2:00 PM Pacific Time. The call can be heard via the Internet through a link on Planar’s website, www.planar.com, or through numerous other investor sites, and will be available for replay until September 11, 2011. The Company intends to post on its website a transcript of the prepared management commentary from the conference call shortly after the conclusion of the call.

ABOUT PLANAR

Planar Systems, Inc (NASDAQ:PLNR) is a global leader of specialty display technology providing solutions for the world’s most demanding environments. Hospitals, space and military programs, utility and transportation hubs, retailers, banks, government agencies, businesses, and home theater enthusiasts all depend on Planar to provide superior performance when image experience is of the highest importance. Founded in 1983, Planar is headquartered in Oregon, USA, with offices, manufacturing partners, and customers worldwide. For more information, visit www.planar.com.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 relating to Planar’s business operations and prospects, including statements relating to the Company’s expected levels of revenue, operating expenses, gross margin percentage, and Non-GAAP loss for the fourth quarter of fiscal 2011, fiscal 2011, and fiscal 2012 and the other statements made under the heading “Business Outlook.” These statements are made pursuant to the safe harbor provisions of the federal securities laws. These and other forward-looking statements, which may be identified by the inclusion of words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “goal” and variations of such words and other similar expressions, are based on current expectations, estimates, assumptions and projections that are subject to change, and actual results may differ materially from the forward-looking statements. These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. Many factors, including the following, could cause actual results to differ materially from the forward-looking statements: poor or further weakened domestic and international business and economic conditions; changes or continued reductions in the demand for products in the various display markets served by the Company; any delay in the timing of customer orders or the Company’s ability to ship product upon receipt of a customer order; the extent and timing of any additional expenditures by the Company to address business growth opportunities; any inability to reduce costs or to do so quickly enough, in either case, in response to reductions in revenue; adverse impacts on the Company or its operations relating to or arising from any inability to fund desired expenditures, including due to difficulties in obtaining necessary financing; changes in the flat-panel monitor industry; changes in customer demand or ordering patterns; changes in the competitive environment including pricing pressures or the ability to keep pace with technological changes; technological advances; shortages of manufacturing capacity from the Company’s third-party manufacturing partners or other interruptions in the supply of components the Company incorporates in its finished goods including as a result of natural disasters like the recent earthquakes and tsunami in Japan; future production variables resulting in excess inventory and other risk factors listed from time to time in the Company’s periodic filings with the Securities and Exchange Commission (SEC). The forward-looking statements contained in this press release speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release.

Note Regarding the Use of Non-GAAP Financial Measures:

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), the Company's earnings release contains Non-GAAP financial measures that exclude share-based compensation and the requirements of Topic 718 of the FASB Accounting Standards Codification TM, “Compensation-Stock Compensation”. The Non-GAAP financial measures also exclude impairment and restructuring charges, the amortization of intangible assets related to previous acquisitions, various tax charges including the valuation allowance against deferred tax assets, the gain or loss on foreign currency due to the non-cash nature of the charge, and various other adjustments. The Non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The Non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The Company has provided reconciliations of the Non-GAAP financial measures to the most directly comparable GAAP financial measures.
Planar Systems, Inc.
Consolidated Statement of Operations
(In thousands, except per share amounts)
(unaudited)
         
Three months ended Nine months ended
July 1, 2011   June 25, 2010 July 1, 2011   June 25, 2010
 
Sales $ 45,659 $ 44,739 $ 135,379 $ 127,475
Cost of Sales   32,835       32,330     96,912       95,793  
Gross Profit 12,824 12,409 38,467 31,682
 
Operating Expenses:
Research and development, net 2,781 2,418 7,968 7,454
Sales and marketing 6,892 6,081 18,889 17,179
General and administrative 4,200 3,901 12,639 12,281
Amortization of intangible assets 512 622 1,536 1,866
Impairment and restructuring charges   -       -     -       3,388  
Total Operating Expenses 14,385 13,022 41,032 42,168
 
Income (Loss) from operations (1,561 ) (613 ) (2,565 ) (10,486 )
 
Non-operating income (expense):
Interest, net

9
3

23
(7 )
Foreign exchange, net (208 ) 1,138 (830 ) 2,362
Other, net  

(10
)     200    

222

 
    211  
Net non-operating income (expense) (209 ) 1,341 (585 ) 2,566
 
Income (loss) before taxes (1,770 ) 728 (3,150 ) (7,920 )
Provision (benefit) for income taxes   127       601     146       (1,739 )
Net Income (loss) $ (1,897 )   $ 127   $ (3,296 )   $ (6,181 )
 
Net Income (loss) per share - basic ($0.10 ) $ 0.01 ($0.17 ) ($0.33 )
Net Income (loss) per share - diluted ($0.10 ) $ 0.01 ($0.17 ) ($0.33 )
 
Weighted average shares outstanding - basic 19,506 19,079 19,362 18,898
Weighted average shares outstanding - diluted 19,506 19,436 19,362 18,898
Planar Systems, Inc.
Consolidated Balance Sheets
(In thousands)
(unaudited)
   
July 1, 2011 Sept. 24, 2010
ASSETS
Cash $ 23,393 $ 31,709
Accounts receivable, net 25,347 27,010
Inventories 46,149 33,397
Other current assets   4,913     3,924  
Total current assets 99,802 96,040
 
Property, plant and equipment, net 4,567 5,347
Intangible assets, net 1,717 3,253
Other assets   4,417     3,794  
$ 110,503   $ 108,434  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable 18,916 16,130
Current portion of capital leases - 4
Deferred revenue 2,194 1,611
Other current liabilities   18,021     19,800  
Total current liabilities 39,131 37,545
 
Other long-term liabilities   6,619     5,513  
Total liabilities 45,750 43,058
 
Common stock 182,040 180,289
Retained earnings (deficit) (116,562 ) (112,886 )
Accumulated other comprehensive loss   (725 )   (2,027 )
Total shareholders' equity   64,753     65,376  
$ 110,503   $ 108,434  
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, unaudited)
         
For the three months ended
July 1, 2011 June 25, 2010
Gross Profit:
GAAP Gross Profit 12,824     12,409  
 
Share-based Compensation 14     33  
Total Non-GAAP adjustments 14     33  
   
NON-GAAP GROSS PROFIT 12,838     12,442  
   
NON-GAAP GROSS PROFIT PERCENTAGE 28.1 %   27.8 %
 
Research and Development:
GAAP research and development expense 2,781     2,418  
 
Share-based Compensation (56 )   (47 )
Total Non-GAAP adjustments (56 )   (47 )
   
NON-GAAP RESEARCH AND DEVELOPMENT EXPENSE 2,725     2,371  
 
Sales and Marketing:
GAAP sales and marketing expense 6,892     6,081  
 
Share-based Compensation (148 )   (105 )
Total Non-GAAP adjustments (148 )   (105 )
   
NON-GAAP SALES AND MARKETING EXPENSE 6,744     5,976  
 
General and Administrative:
GAAP General and Administrative Expense 4,200 3,901
 
Share-based Compensation (479 )   (188 )
Total Non-GAAP adjustments (479 )   (188 )
   
NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSE 3,721     3,713  
 
Operating Expenses:
GAAP Total Operating Expenses 14,385 13,022
 
Share-based Compensation (683 ) (340 )
Amortization of intangible assets (512 )   (622 )
Total Non-GAAP adjustments (1,195 )   (962 )
   
NON-GAAP TOTAL OPERATING EXPENSES 13,190     12,060  
 
 
 
 
Reconciliation of GAAP to Non-GAAP Financial Measures Continued
(In thousands, unaudited)
 
For the three months ended
July 1, 2011 June 25, 2010
 
Income (Loss) from Operations:
GAAP income (loss) from operations (1,561 ) (613 )
 
Share-based Compensation 697 373
Amortization of intangible assets 512     622  
Total Non-GAAP adjustments 1,209     995  
   
NON-GAAP INCOME (LOSS) FROM OPERATIONS (352 )   382  
 
Income (Loss) before taxes & EBITDA:
GAAP income (loss) before taxes (1,770 ) 728
 
Share-based Compensation 697 373
Amortization of intangible assets 512 622
Foreign Exchange, net 208     (1,138 )
Total Non-GAAP adjustments 1,417     (143 )
   
NON-GAAP INCOME (LOSS) BEFORE TAXES (353 )   585  
Depreciation 528     695  
NON-GAAP EBITDA 175     1,280  
 
Net Income (Loss):
GAAP Net Income (loss) (1,897 ) 127
 
Share-based Compensation 697 373
Amortization of intangible assets 512 622
Foreign Exchange, net 208 (1,138 )
Income tax effect of reconciling items 259     542  
Total Non-GAAP adjustments 1,676     399  
   
NON-GAAP NET INCOME (LOSS) (221 )   526  
 
GAAP weighted average shares outstanding--basic 19,506 19,079
NON-GAAP weighted average shares outstanding--diluted 19,506 19,436
 
GAAP Net Income (Loss) per share - basic ($0.10 ) $ 0.01
Non-GAAP adjustments detailed above 0.09 0.02
NON-GAAP NET INCOME PER SHARE (basic) ($0.01 ) $ 0.03
 
GAAP Net Income (Loss) per share - diluted ($0.10 ) $ 0.01
Non-GAAP adjustments detailed above 0.09 0.02
NON-GAAP NET INCOME PER SHARE (diluted) ($0.01 ) $ 0.03
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, unaudited)
       
For the nine months ended
July 1, 2011 June 25, 2010
Gross Profit:
GAAP Gross Profit 38,467   31,682  
 
Share-based Compensation 44   141  
Total Non-GAAP adjustments 44   141  
   
NON-GAAP GROSS PROFIT 38,511   31,823  
   
NON-GAAP GROSS PROFIT PERCENTAGE 28.4 % 25.0 %
 
Research and Development:
GAAP research and development expense 7,968   7,454  
 
Share-based Compensation (159 ) (177 )
Total Non-GAAP adjustments (159 ) (177 )
   
NON-GAAP RESEARCH AND DEVELOPMENT EXPENSE 7,809   7,277  
 
Sales and Marketing:
GAAP sales and marketing expense 18,889   17,179  
 
Share-based Compensation (380 ) (409 )
Total Non-GAAP adjustments (380 ) (409 )
   
NON-GAAP SALES AND MARKETING EXPENSE 18,509   16,770  
 
General and Administrative:
GAAP General and Administrative Expense 12,639 12,281
 
Share-based Compensation (1,003 ) (586 )
Total Non-GAAP adjustments (1,003 ) (586 )
   
NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSE 11,636   11,695  
 
Operating Expenses:
GAAP Total Operating Expenses 41,032 42,168
 
Share-based Compensation (1,542 ) (1,172 )
Amortization of intangible assets (1,536 ) (1,866 )
Impairment and restructuring charges -   (3,388 )
Total Non-GAAP adjustments (3,078 ) (6,426 )
   
NON-GAAP TOTAL OPERATING EXPENSES 37,954   35,742  
Reconciliation of GAAP to Non-GAAP Financial Measures Continued
(In thousands, unaudited)
     
For the nine months ended
July 1, 2011 June 25, 2010
 
Income (Loss) from Operations:
GAAP income (loss) from operations (2,565 ) (10,486 )
 
Share-based Compensation 1,586 1,313
Amortization of intangible assets 1,536 1,866
Impairment and restructuring charges   -     3,388  
Total Non-GAAP adjustments   3,122     6,567  
   
NON-GAAP INCOME (LOSS) FROM OPERATIONS   557     (3,919 )
 
Income (Loss) before taxes & EBITDA:
GAAP income (loss) before taxes (3,150 ) (7,920 )
 
Share-based Compensation 1,586 1,313
Amortization of intangible assets 1,536 1,866
Impairment and restructuring charges - 3,388
Foreign Exchange, net   830     (2,362 )
Total Non-GAAP adjustments   3,952     4,205  
   
NON-GAAP INCOME (LOSS) BEFORE TAXES   802     (3,715 )
Depreciation   1,603     2,290  
NON-GAAP EBITDA   2,405     (1,425 )
 
Income (loss) from continuing operations:
GAAP net income (loss) (3,296 ) (6,181 )
 
Share-based Compensation 1,586 1,313
Amortization of intangible assets 1,536 1,866
Impairment and restructuring charges - 3,388
Foreign Exchange, net 830 (2,362 )
Income tax effect of reconciling items   (155 )   (346 )
Total Non-GAAP adjustments   3,797     3,859  
   
NON-GAAP NET INCOME (LOSS)   501     (2,322 )
 
GAAP weighted average shares outstanding--basic 19,362 18,898
NON-GAAP weighted average shares outstanding--diluted 19,728 18,898
 
GAAP Net Income (Loss) per share - basic ($0.17 ) ($0.33 )
Non-GAAP adjustments detailed above 0.20 $ 0.21
NON-GAAP NET INCOME (LOSS) PER SHARE (basic) $ 0.03 ($0.12 )
 
GAAP Net Income (Loss) per share - diluted ($0.17 ) ($0.33 )
Non-GAAP adjustments detailed above $ 0.20 $ 0.21
NON-GAAP NET INCOME (LOSS) PER SHARE (diluted) $ 0.03 ($0.12 )

Copyright Business Wire 2010

More from Press Releases

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

21st Century Fox Scoops Up Local News Stations

21st Century Fox Scoops Up Local News Stations

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Three-Part FREE Webinar Series

Three-Part FREE Webinar Series

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

March 24 Full-Day Course Offering: Professional Approach to Trading SPX