Planar Systems, Inc. (NASDAQ: PLNR), a global leader in display and
digital signage technology, recorded sales of $40.5 million and GAAP
income per share of $0.03 in its first fiscal quarter ended December 27,
2013. On a Non-GAAP basis (see reconciliation table), income per share
was $0.05 in the first quarter of fiscal 2014.
“I am pleased with our start to fiscal 2014,” said Gerry Perkel,
Planar’s President and Chief Executive Officer. “Specifically, I am
pleased we were able to achieve profitability and accomplish our
strategic objective of growing digital signage product revenue
year-over-year, despite a difficult comparison to our first quarter of
last year.”
SUMMARY OF BUSINESS HIGHLIGHTS
-
Achieved record quarterly sales of digital signage products totaling
$19.0 million in the fiscal first quarter of 2014, representing 12
percent growth compared with the first fiscal quarter of 2013
-
Recorded Non-GAAP EBITDA of $1.7 million in the first quarter of 2014
(see reconciliation table), the highest level of quarterly Non-GAAP
EBITDA in almost 3 years
-
Recently announced the next-generation Clarity™ Matrix LCD Video Wall
System with G2 Architecture, which delivers a new level of visual
performance for Planar’s award-winning family of LCD video wall
solutions
FIRST QUARTER FISCAL 2014 RESULTS
Sales of digital signage products totaled $19.0 million in the first
fiscal quarter of 2014, a 12 percent increase from the same period a
year ago. Total Company revenue decreased 8 percent compared to the
first quarter of fiscal 2013. As previously announced, the Company sold
the assets comprising its Electroluminescent (EL) product line during
the first quarter of fiscal 2013. Excluding revenue associated with EL
products, the Company’s total revenue decreased 3 percent compared with
the first quarter of fiscal 2013. Sales of Commercial and Industrial
(C&I) products decreased 21 percent (14 percent without EL) to $21.5
million compared with the same quarter a year ago. This decrease was
primarily driven by lower sales of touch monitors, desktop monitors,
rear projection cubes, high-end home products, and the elimination of
the EL display product line, partially offset by higher sales of custom
C&I displays.
The Company’s consolidated gross profit margin, as a percentage of sales
(on a Non-GAAP basis), was 24.1 percent in the first quarter of 2014,
down from 25.0 percent in the first quarter of 2013 (see reconciliation
table). On a sequential basis, the Company’s Non-GAAP gross profit
margin increased 1.7 percentage points resulting from increased sales of
higher margin digital signage products and decreased sales of lower
margin desktop monitors.
Total operating expenses (on a Non-GAAP basis) for the first quarter of
2014 decreased $1.3 million, or 13 percent, to $8.8 million compared
with the same quarter a year ago (see reconciliation table), as expenses
declined as a result of previously implemented cost reduction measures
and the divestiture of the EL product line.
The Company’s cash balance increased $1.2 million sequentially to $13.2
million at the end of the first fiscal quarter of 2014 compared to the
end of the fourth quarter of fiscal 2013. The increase in cash was
primarily caused by the quarterly Non-GAAP profit as changes in other
working capital items roughly offset.
BUSINESS OUTLOOK
As the Company looks out into the rest of fiscal year 2014, it continues
to believe it can achieve 20-30 percent revenue growth for sales of
digital signage products for the full fiscal year and, as a result, grow
overall revenue and improve profitability. For the full fiscal year, the
Company expects revenue in the range of $165-175 million and Non-GAAP
income per share of $0.11 to $0.16. In the short-term, the Company
expects to see flat to slightly higher sales sequentially and also
expects to follow its normal pattern of higher expenses in the second
fiscal quarter related to the timing of product releases and tradeshows.
As a result, the Company currently anticipates revenue in the range of
$40-42 million and Non-GAAP income per share of $0.00 to $0.02 in the
second fiscal quarter of 2014.
Results of operations and the business outlook will be discussed in a
conference call today, February 5, 2014, 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 March 5, 2014. 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 improved performance in fiscal 2014
and statements under the “Business Outlook” heading relating to expected
levels of revenue, and Non-GAAP earnings/profitability for the second
quarter and full fiscal year in 2014. 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 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
certain items set forth in the reconciliations of the Non-GAAP financial
measures to the most directly comparable GAAP financial measures. The
exclusions relate primarily to charges of a non-cash nature. Management
uses the Non-GAAP financial measures for internal managerial purposes,
including as a means to compare period-to-period results on a
consolidated basis and as a means to evaluate the Company’s results on a
consolidated basis compared to those of other companies. In addition,
management uses certain of these measures when publicly providing
forward-looking statements on expectations regarding future consolidated
basis financial results. The Company discloses this information to the
public to enable investors to be able to more easily assess the
Company’s performance on the same basis applied by management. 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
|
|
|
|
Dec. 27, 2013
|
|
Dec. 28, 2012
|
|
|
|
|
|
|
Sales
|
|
$
|
40,455
|
|
|
$
|
44,175
|
|
Cost of Sales
|
|
|
30,723
|
|
|
|
33,166
|
|
Gross Profit
|
|
|
9,732
|
|
|
|
11,009
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
Research and development, net
|
|
|
1,244
|
|
|
|
2,027
|
|
|
Sales and marketing
|
|
|
4,673
|
|
|
|
5,060
|
|
|
General and administrative
|
|
|
3,267
|
|
|
|
3,413
|
|
|
Amortization of intangible assets
|
|
|
-
|
|
|
|
147
|
|
|
Restructuring
|
|
|
11
|
|
|
|
194
|
|
|
Loss (gain) on sale of assets
|
|
|
-
|
|
|
|
1,491
|
|
|
Total Operating Expenses
|
|
|
9,195
|
|
|
|
12,332
|
|
|
|
|
|
|
|
Income (Loss) from operations
|
|
|
537
|
|
|
|
(1,323
|
)
|
|
|
|
|
|
|
Non-operating income (expense):
|
|
|
|
|
|
Interest, net
|
|
|
53
|
|
|
|
17
|
|
|
Foreign exchange, net
|
|
|
(43
|
)
|
|
|
(108
|
)
|
|
Other, net
|
|
|
175
|
|
|
|
115
|
|
|
Net non-operating income (expense)
|
|
|
185
|
|
|
|
24
|
|
|
|
|
|
|
|
Income (loss) before taxes
|
|
|
722
|
|
|
|
(1,299
|
)
|
Provision (benefit) for income taxes
|
|
|
92
|
|
|
|
183
|
|
Net Income (loss)
|
|
$
|
630
|
|
|
$
|
(1,482
|
)
|
|
|
|
|
|
|
Net Income (loss) per share - basic
|
|
$
|
0.03
|
|
|
|
($0.07
|
)
|
Net Income (loss) per share - diluted
|
|
$
|
0.03
|
|
|
|
($0.07
|
)
|
|
|
|
|
|
|
Weighted average shares outstanding - basic
|
|
|
21,113
|
|
|
|
20,473
|
|
Weighted average shares outstanding - diluted
|
|
|
21,416
|
|
|
|
20,473
|
|
|
|
|
|
|
|
|
|
|
|
Planar Systems, Inc.
|
Consolidated Balance Sheets
|
(In thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Dec. 27, 2013
|
|
Sept. 27, 2013
|
ASSETS
|
|
|
|
|
Cash
|
|
$
|
13,178
|
|
|
$
|
11,971
|
|
Accounts receivable, net
|
|
|
21,781
|
|
|
|
22,821
|
|
Inventories
|
|
|
31,578
|
|
|
|
30,003
|
|
Other current assets
|
|
|
4,397
|
|
|
|
2,426
|
|
Total current assets
|
|
|
70,934
|
|
|
|
67,221
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
5,992
|
|
|
|
6,434
|
|
Other assets
|
|
|
5,213
|
|
|
|
6,230
|
|
|
|
$
|
82,139
|
|
|
$
|
79,885
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
Accounts payable
|
|
|
17,798
|
|
|
|
17,042
|
|
Current portion of capital leases
|
|
|
953
|
|
|
|
759
|
|
Deferred revenue
|
|
|
1,400
|
|
|
|
1,685
|
|
Other current liabilities
|
|
|
13,595
|
|
|
|
12,848
|
|
Total current liabilities
|
|
|
33,746
|
|
|
|
32,334
|
|
|
|
|
|
|
Long-term portion of capital leases
|
|
|
161
|
|
|
|
394
|
|
Other long-term liabilities
|
|
|
5,197
|
|
|
|
5,390
|
|
Total liabilities
|
|
|
39,104
|
|
|
|
38,118
|
|
|
|
|
|
|
Common stock
|
|
|
186,700
|
|
|
|
186,202
|
|
Retained earnings (deficit)
|
|
|
(141,168
|
)
|
|
|
(141,735
|
)
|
Accumulated other comprehensive loss
|
|
|
(2,497
|
)
|
|
|
(2,700
|
)
|
Total shareholders' equity
|
|
|
43,035
|
|
|
|
41,767
|
|
|
|
$
|
82,139
|
|
|
$
|
79,885
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended
|
|
|
|
|
|
Dec. 27, 2013
|
|
Dec. 28, 2012
|
Gross Profit:
|
|
|
|
|
|
|
GAAP gross profit
|
|
9,732
|
|
|
|
11,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
25
|
|
|
|
25
|
|
|
Total Non-GAAP adjustments
|
|
25
|
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP GROSS PROFIT
|
|
9,757
|
|
|
|
11,034
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP GROSS PROFIT PERCENTAGE
|
|
24.1
|
%
|
|
|
25.0
|
%
|
|
|
|
|
|
|
|
|
|
Research and Development:
|
|
|
|
|
|
|
GAAP research and development expense
|
|
1,244
|
|
|
|
2,027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
(9
|
)
|
|
|
(47
|
)
|
|
Total Non-GAAP adjustments
|
|
(9
|
)
|
|
|
(47
|
)
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP RESEARCH AND DEVELOPMENT EXPENSE
|
|
1,235
|
|
|
|
1,980
|
|
|
|
|
|
|
|
|
|
|
Sales and Marketing:
|
|
|
|
|
|
|
GAAP sales and marketing expense
|
|
4,673
|
|
|
|
5,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
(37
|
)
|
|
|
(69
|
)
|
|
Total Non-GAAP adjustments
|
|
(37
|
)
|
|
|
(69
|
)
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP SALES AND MARKETING EXPENSE
|
|
4,636
|
|
|
|
4,991
|
|
|
|
|
|
|
|
|
|
|
General and Administrative:
|
|
|
|
|
|
|
GAAP general and administrative expense
|
|
3,267
|
|
|
|
3,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
(343
|
)
|
|
|
(304
|
)
|
|
Total Non-GAAP adjustments
|
|
(343
|
)
|
|
|
(304
|
)
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSE
|
|
2,924
|
|
|
|
3,109
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
GAAP total operating expenses
|
|
9,195
|
|
|
|
12,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
(389
|
)
|
|
|
(420
|
)
|
|
|
|
Amortization of intangible assets
|
|
-
|
|
|
|
(147
|
)
|
|
|
|
Restructuring charges
|
|
(11
|
)
|
|
|
(194
|
)
|
|
|
|
Loss on Sale of Assets
|
|
-
|
|
|
|
(1,491
|
)
|
|
Total Non-GAAP adjustments
|
|
(400
|
)
|
|
|
(2,252
|
)
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP TOTAL OPERATING EXPENSES
|
|
8,795
|
|
|
|
10,080
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures Continued
|
(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended
|
|
|
|
|
|
Dec. 27, 2013
|
|
Dec. 28, 2012
|
|
|
|
|
|
|
|
|
|
Income (Loss) from Operations:
|
|
|
|
|
|
|
GAAP income (loss) from operations
|
|
|
537
|
|
|
|
|
(1,323
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
|
414
|
|
|
|
|
445
|
|
|
|
|
Amortization of intangible assets
|
|
|
-
|
|
|
|
|
147
|
|
|
|
|
Restructuring charges
|
|
|
11
|
|
|
|
|
194
|
|
|
|
|
Loss on Sale of Assets
|
|
|
-
|
|
|
|
|
1,491
|
|
|
Total Non-GAAP adjustments
|
|
|
425
|
|
|
|
|
2,277
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP INCOME (LOSS) FROM OPERATIONS
|
|
|
962
|
|
|
|
|
954
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) before taxes & EBITDA:
|
|
|
|
|
|
|
GAAP income (loss) before taxes
|
|
|
722
|
|
|
|
|
(1,299
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
|
414
|
|
|
|
|
445
|
|
|
|
|
Amortization of intangible assets
|
|
|
-
|
|
|
|
|
147
|
|
|
|
|
Loss on Sale of Assets
|
|
|
-
|
|
|
|
|
1,491
|
|
|
|
|
Restructuring charges
|
|
|
11
|
|
|
|
|
194
|
|
|
|
|
Foreign exchange, net
|
|
|
43
|
|
|
|
|
108
|
|
|
Total Non-GAAP adjustments
|
|
|
468
|
|
|
|
|
2,385
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP INCOME (LOSS) BEFORE TAXES
|
|
|
1,190
|
|
|
|
|
1,086
|
|
|
|
|
Depreciation
|
|
|
478
|
|
|
|
|
310
|
|
|
NON-GAAP EBITDA
|
|
|
1,668
|
|
|
|
|
1,396
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss):
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
|
630
|
|
|
|
|
(1,482
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
|
414
|
|
|
|
|
445
|
|
|
|
|
Amortization of intangible assets
|
|
|
-
|
|
|
|
|
147
|
|
|
|
|
Loss on Sale of Assets
|
|
|
-
|
|
|
|
|
1,491
|
|
|
|
|
Restructuring charges
|
|
|
11
|
|
|
|
|
194
|
|
|
|
|
Foreign exchange, net
|
|
|
43
|
|
|
|
|
108
|
|
|
|
|
Income tax effect of reconciling items
|
|
|
(28
|
)
|
|
|
|
73
|
|
|
Total Non-GAAP adjustments
|
|
|
440
|
|
|
|
|
2,458
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP NET INCOME (LOSS)
|
|
|
1,070
|
|
|
|
|
976
|
|
|
|
|
|
|
|
|
|
|
GAAP weighted average shares outstanding--basic
|
|
|
21,113
|
|
|
|
|
20,473
|
|
NON-GAAP weighted average shares outstanding--diluted
|
|
|
21,416
|
|
|
|
|
20,679
|
|
|
|
|
|
|
|
|
|
|
GAAP Net Income (Loss) per share - basic
|
|
$
|
0.03
|
|
|
|
|
($0.07
|
)
|
|
Non-GAAP adjustments detailed above
|
|
|
0.02
|
|
|
|
|
0.12
|
|
|
NON-GAAP NET INCOME PER SHARE (basic)
|
|
$
|
0.05
|
|
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
GAAP Net Income (Loss) per share - diluted
|
|
$
|
0.03
|
|
|
|
|
($0.07
|
)
|
|
Non-GAAP adjustments detailed above
|
|
|
0.02
|
|
|
|
|
0.12
|
|
|
NON-GAAP NET INCOME PER SHARE (diluted)
|
|
$
|
0.05
|
|
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Planar Systems, Inc.
|
Revenue by Product Line
|
(In millions)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
% Change vs.
|
|
|
|
Dec. 27, 2013
|
|
Dec. 28, 2012
|
|
Sept. 27, 2013
|
|
|
Prior Year
|
|
Prior Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital Signage Sales
|
|
$
|
19.0
|
|
$
|
16.9
|
|
$
|
17.7
|
|
|
12
|
%
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial & Industrial Sales
|
|
|
21.5
|
|
|
27.3
|
|
|
28.0
|
|
|
-21
|
%
|
|
-23
|
%
|
|
Desktop Monitors
|
|
|
8.1
|
|
|
8.7
|
|
|
11.2
|
|
|
-7
|
%
|
|
-28
|
%
|
|
Rear Projection Cubes
|
|
|
5.0
|
|
|
6.1
|
|
|
4.9
|
|
|
-18
|
%
|
|
1
|
%
|
|
Touch Monitors
|
|
|
3.2
|
|
|
4.9
|
|
|
4.6
|
|
|
-34
|
%
|
|
-29
|
%
|
|
High-end Home
|
|
|
1.7
|
|
|
3.0
|
|
|
2.0
|
|
|
-43
|
%
|
|
-13
|
%
|
|
Custom Commercial & Industrial
|
|
|
3.3
|
|
|
2.0
|
|
|
5.1
|
|
|
66
|
%
|
|
-36
|
%
|
|
Electroluminescent(1)
|
|
|
-
|
|
|
2.3
|
|
|
-
|
|
|
-100
|
%
|
|
-
|
|
|
Other(1)
|
|
|
0.2
|
|
|
0.3
|
|
|
0.2
|
|
|
-41
|
%
|
|
-5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Sales
|
|
$
|
40.5
|
|
$
|
44.2
|
|
$
|
45.7
|
|
|
-8
|
%
|
|
-12
|
%
|
|
Electroluminescent and custom glass(1)
|
|
|
-
|
|
|
2.3
|
|
|
-
|
|
|
-100
|
%
|
|
-
|
|
Total Sales without Electroluminescent
|
|
$
|
40.5
|
|
$
|
41.9
|
|
$
|
45.7
|
|
|
-3
|
%
|
|
-12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
In the first quarter of 2013, the Company sold the assets and
liabilities related to the Electroluminescent product line,
including custom glass, which was included in other commercial &
industrial sales.
|
|
|
|
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