Planar Announces Fiscal Third Quarter 2013 Financial Results

Planar Announces Fiscal Third Quarter 2013 Financial Results

Company reports over 20% year-over-year growth in quarterly sales of Digital Signage and Touch Monitor products

BEAVERTON, Ore.--(BUSINESS WIRE)-- Planar Systems, Inc. (NAS: 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. (NAS: 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 CodificationTM, "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