Planar Announces Fiscal Third Quarter 2013 Financial Results

Planar Systems, Inc. (NASDAQ:PLNR), a global leader in display and digital signage technology, recorded sales of $37.5 million and a GAAP loss per share of $0.17 in its third fiscal quarter ended June 28, 2013. On a Non-GAAP basis (see reconciliation table), loss per share was $0.02 in the third quarter of fiscal 2013.

“I am pleased we were able to continue to grow in our focus areas of digital signage and touch display products,” said Gerry Perkel, Planar’s President and Chief Executive Officer. “I am equally pleased we were able to achieve that growth while we continued to lower our overall cost structure to position us for Non-GAAP profitability in the fourth quarter of fiscal 2013 and for fiscal 2014.”

SUMMARY OF BUSINESS HIGHLIGHTS
  • Sales of digital signage products and touch monitors totaled $19.1 million, representing 22 percent growth compared with the third fiscal quarter of 2012
  • Unveiled the Planar® PS5580, a narrow bezel LCD video wall display aimed at budget-conscious customers who want to create high-impact video walls
  • Began shipping the Planar UltraRes 84-inch 4k display and announced the upcoming availability of a touch-enabled version which continues Planar’s leadership in the UltraHD resolution category with best-in-class, large format, multi-touch display capabilities
  • Launched a new 24-inch version, the Planar PCT2485, of the Planar Helium Series of Windows 8 ready touch monitors and the new 22-inch Planar PT2245PW, a dual-touch, zero bezel, HD resolution, projected capacitive touch monitor

THIRD QUARTER FISCAL 2013 RESULTS

The Company’s total revenue decreased 16 percent compared to the third quarter of fiscal 2012. As previously announced, the Company sold the assets comprising its Electroluminescent (EL) product line during the first quarter of 2013. Excluding revenue associated with EL products, the Company’s total revenue decreased 6 percent compared with the third quarter of fiscal 2012. Sales of digital signage products totaled $14.1 million in the third quarter of 2013, a 19 percent increase from the same period a year ago. Continuing to expand the go-to-market capability and product portfolio remain key success factors for driving growth for digital signage products sales and overall sales. Sales of Commercial and Industrial (C&I) products declined 29 percent (17 percent without EL) to $23.4 million compared with the same quarter a year ago. This decrease was primarily driven by the elimination of the EL display product line, and lower sales of rear projection cubes, high-end home products, and custom products, partially offset by increased sales of desktop and touch monitors which grew 10 and 30 percent respectively compared to the same period a year ago.

The Company’s consolidated gross profit margin, as a percentage of sales, (on a Non-GAAP basis) was 21.7 percent in the third quarter of 2013, down slightly from 22.0 percent in the third quarter of 2012 (see reconciliation table). On a sequential basis, the Company’s Non-GAAP gross profit margin increased 1.3 percentage points as improved margin rates on sales of digital signage products and better absorption of fixed manufacturing expenses more than offset an unfavorable product mix.

Total operating expenses (on a Non-GAAP basis) for the third quarter of 2013 decreased $2.1 million, or 19 percent, to $9.0 million compared with the same quarter a year ago, as expenses declined in all functions as a result of previously implemented cost reduction measures. In addition, as previously disclosed, the Company recorded a $2.4 million restructuring charge related to the consolidation of its US manufacturing operations into a single facility.

The Company’s cash balance increased $0.5 million sequentially to $13.4 million at the end of the third fiscal quarter of 2013 compared to the end of the second quarter of fiscal 2013. The increase in cash was primarily caused by a reduction in accounts receivable and an increase in accounts payable, partially offset by the loss incurred in the quarter and increases in inventory.

BUSINESS OUTLOOK

Earlier this fiscal year, the Company established a goal to substantially grow the sales of digital signage and touch products while turning a profit (on a Non-GAAP basis) for the fiscal year. Looking forward, with three quarters completed and the expectation for a strong sequential increase in sales, that goal remains achievable. The Company expects to grow sales of digital signage and touch products by more than 30 percent for the full fiscal year and to be profitable for fiscal 2013 (on a Non-GAAP basis). The Company currently anticipates revenue in the range of $42-44 million and Non-GAAP income per share of $0.03 to $0.05 in the fourth quarter of 2013.

Results of operations and the business outlook will be discussed in a conference call today, August 8, 2013, 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 8, 2013. 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 in display and digital signage technology, providing premier solutions for the world's most demanding environments. Retailers, educational institutions, government agencies, businesses, utilities and energy firms, and home theater enthusiasts all depend on Planar to provide superior performance when image experience is of the highest importance. Planar video walls, large format LCD displays, interactive touch screen monitors and many other solutions are used by the world’s leading organizations in applications ranging from digital signage to simulation and from interactive kiosks to large-scale data visualization. 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, revenue growth, Non-GAAP earnings/profitability for the fourth quarter, second half, full fiscal year in 2013, and full fiscal year 2014 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 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, increased commoditization 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; 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, gains or losses on the sale of assets, 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
Jun. 28, 2013       Jun. 29, 2012 Jun. 28, 2013       Jun. 29, 2012
 
Sales $ 37,485 $ 44,704 $ 121,101 $ 129,954
Cost of Sales   29,359           34,895     93,954           102,427  
Gross Profit 8,126 9,809 27,147 27,527
 
Operating Expenses:
Research and development, net 1,620 2,319 5,475 7,805
Sales and marketing 4,819 6,019 14,923 19,662
General and administrative 2,833 3,167 9,159 10,947
Amortization of intangible assets 147 175 442 525
Restructuring 2,407 - 2,601 518
Loss on sale of assets   -           -     1,314           -  
Total Operating Expenses 11,826 11,680 33,914 39,457
 
Income (Loss) from operations (3,700 ) (1,871 ) (6,767 ) (11,930 )
 
Non-operating income (expense):
Interest, net 39 1 104 7
Foreign exchange, net (1 ) 260 (14 ) 523
Other, net   166           129     462           450  
Net non-operating income (expense) 204 390 552 980
 
Income (loss) before taxes (3,496 ) (1,481 ) (6,215 ) (10,950 )
Provision (benefit) for income taxes   71           212     114           604  
Net Income (loss) $ (3,567 )       $ (1,693 ) $ (6,329 )       $ (11,554 )
 
Net Income (loss) per share - basic ($0.17 ) ($0.08 ) ($0.31 ) ($0.58 )
Net Income (loss) per share - diluted ($0.17 ) ($0.08 ) ($0.31 ) ($0.58 )
 
Weighted average shares outstanding - basic 20,899 20,219 20,672 20,024
Weighted average shares outstanding - diluted 20,899 20,219 20,672 20,024
 
 
Planar Systems, Inc.
Consolidated Balance Sheets
(In thousands)
(unaudited)
                               
Jun. 28, 2013 Sep. 28, 2012
ASSETS
Cash $ 13,412 $ 17,768
Accounts receivable, net 16,857 18,604
Inventories 31,349 31,984
Other current assets   3,101     2,829  
Total current assets 64,719 71,185
 
Property, plant and equipment, net 6,953 3,554
Intangible assets, net 123 565
Other assets   6,410     6,580  
$ 78,205   $ 81,884  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable 15,024 11,686
Current portion of capital leases 745 449
Deferred revenue 1,789 1,659
Other current liabilities   13,084     15,915  
Total current liabilities 30,642 29,709
 
Long-term portion of capital leases 623 545
Other long-term liabilities   5,679     5,111  
Total liabilities 36,944 35,365
 
Common stock 185,900 184,556
Retained earnings (deficit) (141,472 ) (134,751 )
Accumulated other comprehensive loss   (3,167 )   (3,286 )
Total shareholders' equity   41,261     46,519  
$ 78,205   $ 81,884  
 
                           
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, unaudited)
 
For the three months ended
Jun. 28, 2013 Jun. 29, 2012
Gross Profit:
GAAP Gross Profit 8,126 9,809
 
Share-based compensation 22   32  
Total Non-GAAP adjustments 22   32  
   
NON-GAAP GROSS PROFIT 8,148   9,841  
   
NON-GAAP GROSS PROFIT PERCENTAGE 21.7 % 22.0 %
 
Research and Development:
GAAP research and development expense 1,620 2,319
 
Share-based compensation -   (36 )
Total Non-GAAP adjustments -   (36 )
   
NON-GAAP RESEARCH AND DEVELOPMENT EXPENSE 1,620   2,283  
 
Sales and Marketing:
GAAP sales and marketing expense 4,819 6,019
 
Share-based compensation (61 ) (58 )
Total Non-GAAP adjustments (61 ) (58 )
   
NON-GAAP SALES AND MARKETING EXPENSE 4,758   5,961  
 
General and Administrative:
GAAP General and Administrative Expense 2,833 3,167
 
Share-based compensation (208 ) (286 )
Total Non-GAAP adjustments (208 ) (286 )
   
NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSE 2,625   2,881  
 
Operating Expenses:
GAAP Total Operating Expenses 11,826 11,680
 

Share-based compensation
(269 ) (380 )
Amortization of intangible assets (147 ) (175 )
Restructuring charges (2,407 ) -  
Total Non-GAAP adjustments (2,823 ) (555 )
   
NON-GAAP TOTAL OPERATING EXPENSES 9,003   11,125  
 
               
Reconciliation of GAAP to Non-GAAP Financial Measures Continued
(In thousands, unaudited)          
 
For the three months ended
Jun. 28, 2013 Jun. 29, 2012
 
Income (Loss) from Operations:
GAAP income (loss) from operations (3,700 ) (1,871 )
 
Share-based compensation 291 412
Amortization of intangible assets 147 175
Restructuring charges 2,407   -  
Total Non-GAAP adjustments 2,845   587  
   
NON-GAAP INCOME (LOSS) FROM OPERATIONS (855 ) (1,284 )
 
Income (Loss) before taxes & EBITDA:
GAAP income (loss) before taxes (3,496 ) (1,481 )
 
Share-based compensation 291 412
Amortization of intangible assets 147 175
Restructuring charges 2,407 -
Foreign exchange, net 1   (260 )
Total Non-GAAP adjustments 2,846   327  
   
NON-GAAP INCOME (LOSS) BEFORE TAXES (650 ) (1,154 )
Depreciation 330   505  
NON-GAAP EBITDA (320 ) (649 )
 
Net Income (Loss):
GAAP Net Income (loss) (3,567 ) (1,693 )
 
Share-based compensation 291 412
Amortization of intangible assets 147 175
Restructuring charges 2,407 -
Foreign exchange, net 1 (260 )
Income tax effect of reconciling items 315   645  
Total Non-GAAP adjustments 3,161   972  
   
NON-GAAP NET INCOME (LOSS) (406 ) (721 )
 
GAAP weighted average shares outstanding--basic 20,899 20,219
NON-GAAP weighted average shares outstanding--diluted 20,899 20,219
 
GAAP Net Income (Loss) per share - basic ($0.17 ) ($0.08 )
Non-GAAP adjustments detailed above 0.15 0.04
NON-GAAP NET INCOME PER SHARE (basic) ($0.02 ) ($0.04 )
 
GAAP Net Income (Loss) per share - diluted ($0.17 ) ($0.08 )
Non-GAAP adjustments detailed above 0.15 0.04
NON-GAAP NET INCOME PER SHARE (diluted) ($0.02 ) ($0.04 )
 
                             
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, unaudited)
 
For the nine months ended
Jun. 28, 2013 Jun. 29, 2012
Gross Profit:
GAAP Gross Profit 27,147 27,527
 
Share-based compensation 75   68  
Total Non-GAAP adjustments 75   68  
   
NON-GAAP GROSS PROFIT 27,222   27,595  
   
NON-GAAP GROSS PROFIT PERCENTAGE 22.5 % 21.2 %
 
Research and Development:
GAAP research and development expense 5,475 7,805
 
Share-based compensation (82 ) (99 )
Total Non-GAAP adjustments (82 ) (99 )
   
NON-GAAP RESEARCH AND DEVELOPMENT EXPENSE 5,393   7,706  
 
Sales and Marketing:
GAAP sales and marketing expense 14,923 19,662
 
Share-based compensation (212 ) (113 )
Total Non-GAAP adjustments (212 ) (113 )
   
NON-GAAP SALES AND MARKETING EXPENSE 14,711   19,549  
 
General and Administrative:
GAAP General and Administrative Expense 9,159 10,947
 
Share-based compensation (791 ) (785 )
Total Non-GAAP adjustments (791 ) (785 )
   
NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSE 8,368   10,162  
 
Operating Expenses:
GAAP Total Operating Expenses 33,914 39,457
 
Share-based compensation (1,085 ) (997 )
Amortization of intangible assets (442 ) (525 )
Restructuring charges (2,601 ) (518 )
Loss on sale of assets (1,314 ) -  
Total Non-GAAP adjustments (5,442 ) (2,040 )
   
NON-GAAP TOTAL OPERATING EXPENSES 28,472   37,417  
 
                         
Reconciliation of GAAP to Non-GAAP Financial Measures Continued
(In thousands, unaudited)
 
For the nine months ended
Jun. 28, 2013 Jun. 29, 2012
 
Income (Loss) from Operations:
GAAP income (loss) from operations (6,767 ) (11,930 )
 
Share-based compensation 1,160 1,065
Amortization of intangible assets 442 525
Restructuring charges 2,601 518
Loss on sale of assets 1,314   -  
Total Non-GAAP adjustments 5,517   2,108  
   
NON-GAAP INCOME (LOSS) FROM OPERATIONS (1,250 ) (9,822 )
 
Income (Loss) before taxes & EBITDA:
GAAP income (loss) before taxes (6,215 ) (10,950 )
 
Share-based compensation 1,160 1,065
Amortization of intangible assets 442 525
Restructuring charges 2,601 518
Loss on sale of assets 1,314 -
Foreign exchange, net 14   (523 )
Total Non-GAAP adjustments 5,531   1,585  
   
NON-GAAP INCOME (LOSS) BEFORE TAXES (684 ) (9,365 )
Depreciation 1,015   1,594  
NON-GAAP EBITDA 331   (7,771 )
 
Net Income (Loss):
GAAP Net Income (loss) (6,329 ) (11,554 )
 
Share-based compensation 1,160 1,065
Amortization of intangible assets 442 525
Restructuring charges 2,601 518
Loss on sale of assets 1,314 -
Foreign exchange, net 14 (523 )
Income tax effect of reconciling items 371   4,116  
Total Non-GAAP adjustments 5,902   5,701  
   
NON-GAAP NET INCOME (LOSS) (427 ) (5,853 )
 
GAAP weighted average shares outstanding--basic 20,672 20,024
NON-GAAP weighted average shares outstanding--diluted 20,672 20,024
 
GAAP Net Income (Loss) per share - basic ($0.31 ) ($0.58 )
Non-GAAP adjustments detailed above 0.29 0.29
NON-GAAP NET INCOME PER SHARE (basic) ($0.02 ) ($0.29 )
 
GAAP Net Income (Loss) per share - diluted ($0.31 ) ($0.58 )
Non-GAAP adjustments detailed above 0.29 0.29
NON-GAAP NET INCOME PER SHARE (diluted) ($0.02 ) ($0.29 )
 
               
Planar Systems, Inc.
Revenue by Product Line
(In millions)
(unaudited)
                             
Three months ended % Change
Jun. 28, 2013           Jun. 29, 2012           Mar. 29, 2013 vs. Prior Year           vs. Prior Quarter
 
Digital Signage Sales $ 14.1 $ 11.8 $ 13.4 19 % 4 %
 
Commercial & Industrial Sales $ 23.4 $ 32.9 $ 26.0 -29 % -10 %
Desktop Monitors $ 9.2 $ 8.4 $ 9.0 10 % 2 %
Rear Projection Cubes $ 3.5 $ 7.6 $ 6.3 -54 % -45 %
Touch Monitors $ 5.0 $ 3.8 $ 5.3 30 % -6 %
High-end Home $ 2.2 $ 3.9 $ 2.5 -43 % -11 %
Custom Commercial & Industrial $ 3.3 $ 3.9 $ 2.6 -15 % 27 %
Electroluminescent(1) $ - $ 4.6 $ - -100 % -
Other $ 0.2 $ 0.7 $ 0.3 -66 % -38 %
                                       
Total Sales $ 37.5           $ 44.7           $ 39.4 -16 %           -5 %
Electroluminescent(1) $ -           $ 4.6           $ - -100 %           -  
Total Sales without Electroluminescent $ 37.5           $ 40.1           $ 39.4 -6 %           -5 %
 

(1) In the first quarter of 2013, the Company sold the assets and liabilities related to the Electroluminescent product line.
 
 
Planar Systems, Inc.
Revenue by Product Line
(In millions)
(unaudited)
       
Nine months ended % Change
Jun. 28, 2013 Jun. 29, 2012 vs. Prior Year
 
Digital Signage Sales $ 44.4 $ 30.2 47 %
 
Commercial & Industrial Sales 76.7 99.8 -23 %
Desktop Monitors 26.9 27.3 -1 %
Rear Projection Cubes 15.9 22.0 -28 %
Touch Monitors 15.2 10.9 40 %
High-end Home 7.7 12.4 -38 %
Custom Commercial & Industrial 7.9 9.6 -18 %
Electroluminescent(1) 2.3 15.5 -85 %
Other 0.8 2.1 -62 %
     
Total Sales $ 121.1 $ 130.0 -7 %
Electroluminescent(1)   2.3   15.5 -85 %
Total Sales without Electroluminescent $ 118.8 $ 114.5 4 %
 

(1) In the first quarter of 2013, the Company sold the assets and liabilities related to the Electroluminescent product line.

Copyright Business Wire 2010

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