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Planar Announces Fiscal Fourth Quarter and Full Year 2012 Financial Results

  Planar Announces Fiscal Fourth Quarter and Full Year 2012 Financial Results

   Company reports record quarterly Digital Signage product sales and Cash
                          increase to $17.8 million

Business Wire

BEAVERTON, Ore. -- November 20, 2012

Planar Systems, Inc. (NASDAQ:PLNR), a worldwide leader in specialty display
solutions, recorded sales of $41.4 million and GAAP loss per share of $0.23 in
its fourth fiscal quarter ended September 28, 2012. On a Non-GAAP basis (see
reconciliation table), loss per share was $0.10 in the fourth quarter of
fiscal 2012. Sales for fiscal year 2012 were $171.4 million and GAAP loss per
share was $0.81. On a Non-GAAP basis loss per share was $0.40 in fiscal 2012.

“While sales and earnings in the fourth quarter were below our expectations, I
am pleased that we did a good job managing working capital, resulting in an
increase to our cash position,” said Gerry Perkel, Planar’s President and
Chief Executive Officer. “In addition, the fourth quarter represented our
highest quarter ever for sales of digital signage products. While we are
pleased with the progress in growing our digital signage product revenues, we
did take some additional actions to reduce our expense levels as we enter our
new fiscal year as our commercial and industrial product revenues have
declined faster than we had anticipated.”

FOURTH QUARTER BUSINESS SUMMARY

  *Began shipping Planar® Mosaic™, a unique and versatile digital signage
    architectural design focused, video wall solution targeting the large and
    growing global wall covering market
  *Began shipping the Planar® UltraLux™ Series, a family of 70" and 80" LCD
    displays that feature a unique industrial design and forward-thinking
    engineering which bring current consumer electronics styling to the
    commercial digital signage market
  *Announced the Planar® Helium™ Series, a family of multi-touch desktop
    monitors designed to bring the touch experience alive when paired with a
    Microsoft® Windows® 8 device such as an Ultrabook™, tablet or desktop PC

FOURTH QUARTER FISCAL 2012 RESULTS

The Company’s total revenues decreased 7 percent compared to the third quarter
of fiscal 2012 and declined 19 percent compared to the fourth quarter of
fiscal 2011. Geographic results (in terms of quarterly revenue compared with
the fourth quarter of fiscal 2011) decreased in all three Geographic regions,
with the Americas decreasing 20 percent, Asia Pacific decreasing 17 percent,
and Europe, the Middle East and Africa (EMEA) decreasing 17 percent. Sales of
Digital Signage products totaled $13.6 million in the fourth quarter of 2012,
a 20 percent increase from the same period a year ago. This increase was
driven by higher sales of tiled LCD systems and signage monitors, which
increased 18 percent and 57 percent respectively compared with the same period
a year ago. In addition, sales of digital signage products increased in all
three Geographic regions compared with the same period last year. Sales of
Commercial and Industrial (C&I) products declined 30 percent to $27.8 million
compared with the same quarter a year ago. This decrease was primarily driven
by lower sales of Electroluminescent (EL) displays, rear-projection cubes,
desktop monitors, and high-end home products, partially offset by increased
sales of touch monitors which grew 42 percent compared to the same period a
year ago.

The Company’s consolidated gross profit margin (on a Non-GAAP basis) was 17.3
percent in the fourth quarter of 2012, down from 26.8 percent in the fourth
quarter of 2011 (see reconciliation table). The decrease in gross profit
margin, as a percent of sales, from the previous year was primarily due to the
under-absorption of expenses in certain production areas with a relatively
higher fixed cost basis, such as EL production facilities, and an unfavorable
product mix with a smaller proportion of total revenue derived from sales of
relatively higher margin products such as rear-projection cubes.

Total operating expenses (on a Non-GAAP basis) for the fourth quarter of 2012
decreased $2.9 million, or 21 percent, to $10.5 million compared with the same
quarter a year ago, as expenses declined in all functions as a result of cost
reduction measures implemented earlier in fiscal 2012, partially offset by
increased project related expenses in research and development.

The Company’s cash balance increased $1.6 million sequentially to $17.8
million at the end of the fourth quarter compared to the end of the third
quarter of fiscal 2012. The increase in cash was primarily caused by a
reduction in inventory and accounts receivable, which was partially offset by
a reduction in accounts payable and the loss incurred.

BUSINESS OUTLOOK

Looking forward, the Company remains committed to transforming its business to
be more focused on markets that are growing, like digital signage, and
becoming profitable, including pursuing further actions intended to more
rapidly effect the Company’s strategic transformation and drive higher levels
of shareholder value. In the near term, for the first quarter of fiscal 2013,
the Company expects continued revenue growth in sales of digital signage
products both compared to the first quarter of last year and the fourth
quarter of 2012. As a result, the Company currently anticipates revenue in the
range of $44 to $48 million and a Non-GAAP loss of $0.05 to a Non-GAAP profit
of $0.01 in the first quarter of 2013.

Results of operations and the business outlook will be discussed in a
conference call today, November 20, 2012, 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 December 20, 2012. 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 digital display
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 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 and revenue growth, gross profit levels
and gross profit rates, and operating expense levels for the first quarter of
fiscal 2013, 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             Twelve months ended
                  Sept. 28,      Sept. 30,       Sept. 28, 2012  Sept. 30,
                  2012            2011                             2011
                                                                
Sales             $  41,400       $  51,125          171,354       $ 186,504
Cost of Sales       34,291       37,453        136,718      134,365 
Gross Profit         7,109           13,672          34,636          52,139
                                                                   
Operating
Expenses:
Research and
development,         2,787           2,780           10,592          10,748
net
Sales and            5,180           7,040           24,842          25,929
marketing
General and          3,040           4,197           13,987          16,836
administrative
Amortization of
intangible           171             456             696             1,992
assets
Impairment and
restructuring       404          1,060         922          1,060   
charges
Total Operating      11,582          15,533          51,039          56,565
Expenses
                                                                   
Income (Loss)        (4,473  )       (1,861  )       (16,403  )      (4,426  )
from operations
                                                                   
Non-operating
income
(expense):
Interest, net        (22     )       (1      )       (15      )      22
Foreign              (44     )       496             479             (334    )
exchange, net
Other, net          49           (92     )      499          130     
Net
non-operating        (17     )       403             963             (182    )
income
(expense)
                                                                   
Income (loss)        (4,490  )       (1,458  )       (15,440  )      (4,608  )
before taxes
Provision
(benefit) for       138          (48     )      742          98      
income taxes
Net Income        $  (4,628  )   $  (1,410  )    $  (16,182  )   $ (4,706  )
(loss)
                                                                   
Net Income
(loss) per           ($0.23  )       ($0.07  )       ($0.81   )      ($0.24  )
share - basic
Net Income
(loss) per           ($0.23  )       ($0.07  )       ($0.81   )      ($0.24  )
share - diluted
                                                                   
Weighted
average shares       20,258          19,594          20,083          19,419
outstanding -
basic
Weighted
average shares       20,258          19,594          20,083          19,419
outstanding -
diluted



Planar Systems, Inc.
Consolidated Balance Sheets
(In thousands)
(unaudited)

                                      Sept. 28, 2012  Sept. 30, 2011
ASSETS
Cash                                   $  17,768        $  22,231
Accounts receivable, net                  18,604           25,881
Inventories                               31,984           42,967
Other current assets                     2,829          4,587     
Total current assets                      71,185           95,666
                                                        
Property, plant and equipment, net        3,554            4,265
Intangible assets, net                    565              1,261
Other assets                             6,580          4,110     
                                       $  81,884       $  105,302   
                                                        
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable                          11,686           15,549
Current portion of capital leases         449              -
Deferred revenue                          1,659            2,339
Other current liabilities                15,915         18,485    
Total current liabilities                 29,709           36,373
                                                        
Other long-term liabilities              5,656          6,270     
Total liabilities                         35,365           42,643
                                                        
Common stock                              184,556          182,826
Retained earnings (deficit)               (134,751  )      (118,096  )
Accumulated other comprehensive loss     (3,286    )     (2,071    )
Total shareholders' equity               46,519         62,659    
                                       $  81,884       $  105,302   



Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, unaudited)

                                              For the three months ended
                                               Sept. 28, 2012  Sept. 30, 2011
Gross Profit:
GAAP Gross Profit                              7,109            13,672
                                                                
Share-based compensation                       34               15
Total Non-GAAP adjustments                     34               15
                                                               
NON-GAAP GROSS PROFIT                          7,143            13,687
                                                               
NON-GAAP GROSS PROFIT PERCENTAGE               17.3%            26.8%
                                                                
Research and Development:
GAAP Research and development expense          2,787            2,780
                                                                
Share-based compensation                       (45)             (53)
Total Non-GAAP adjustments                     (45)             (53)
                                                               
NON-GAAP RESEARCH AND DEVELOPMENT EXPENSE      2,742            2,727
                                                                
Sales and Marketing:
GAAP Sales and marketing expense               5,180            7,040
                                                                
Share-based compensation                       (90)             (154)
Total Non-GAAP adjustments                     (90)             (154)
                                                               
NON-GAAP SALES AND MARKETING EXPENSE           5,090            6,886
                                                                
General and Administrative:
GAAP General and administrative Expense        3,040            4,197
                                                                
Share-based compensation                       (370)            (455)
Total Non-GAAP adjustments                     (370)            (455)
                                                               
NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSE    2,670            3,742
                                                                
Operating Expenses:
GAAP Total Operating Expenses                  11,582           15,533
                                                                
Share-based compensation                       (505)            (662)
Amortization of intangible assets              (171)            (456)
Impairment and restructuring charges           (404)            (1,060)
Total Non-GAAP adjustments                     (1,080)          (2,178)
                                                               
NON-GAAP TOTAL OPERATING EXPENSES              10,502           13,355
                                                                
Income (Loss) from Operations:
GAAP income (loss) from operations             (4,473)          (1,861)
                                                                
Share-based compensation                       539              677
Amortization of intangible assets              171              456
Impairment and restructuring charges           404              1,060
Total Non-GAAP adjustments                     1,114            2,193
                                                               
NON-GAAP INCOME (LOSS) FROM OPERATIONS         (3,359)          332
                                                                
Income (Loss) before taxes & EBITDA:
GAAP income (loss) before taxes                (4,490)          (1,458)
                                                                
Share-based compensation                       539              677
Amortization of intangible assets              171              456
Impairment and restructuring charges           404              1,060
Foreign exchange, net                          44               (496)
Total Non-GAAP adjustments                     1,158            1,697
                                                               
NON-GAAP INCOME (LOSS) BEFORE TAXES            (3,332)          239
Depreciation                                   383              560
NON-GAAP EBITDA                                (2,949)          799
                                                                
Net Income (Loss):
GAAP Net Income (loss)                         (4,628)          (1,410)
                                                                
Share-based compensation                       539              677
Amortization of intangible assets              171              456
Impairment and restructuring charges           404              1,060
Foreign exchange, net                          44               (496)
Income tax effect of reconciling items         1,388            (72)
Total Non-GAAP adjustments                     2,546            1,625
                                                               
NON-GAAP NET INCOME (LOSS)                     (2,082)          215
                                                                
GAAP weighted average shares                   20,258           19,594
outstanding--basic
NON-GAAP weighted average shares               20,258           19,979
outstanding--diluted
                                                                
GAAP Net Income (Loss) per share - basic       ($0.23)          ($0.07)
Non-GAAP adjustments detailed above            0.13             0.08
NON-GAAP NET INCOME PER SHARE (basic)          ($0.10)          $0.01
                                                                
GAAP Net Income (Loss) per share - diluted     ($0.23)          ($0.07)
Non-GAAP adjustments detailed above            0.13             0.08
NON-GAAP NET INCOME PER SHARE (diluted)        ($0.10)          $0.01



Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, unaudited)

                                              For the twelve months ended
                                               Sept. 28, 2012  Sept. 30, 2011
Gross Profit:
GAAP Gross Profit                              34,636           52,139
                                                                
Share-based compensation                       102              59
Total Non-GAAP adjustments                     102              59
                                                               
NON-GAAP GROSS PROFIT                          34,738           52,198
                                                               
NON-GAAP GROSS PROFIT PERCENTAGE               20.3%            28.0%
                                                                
Research and Development:
GAAP Research and development expense          10,592           10,748
                                                                
Share-based compensation                       (144)            (212)
Total Non-GAAP adjustments                     (144)            (212)
                                                               
NON-GAAP RESEARCH AND DEVELOPMENT EXPENSE      10,448           10,536
                                                                
Sales and Marketing:
GAAP Sales and marketing expense               24,842           25,929
                                                                
Share-based compensation                       (203)            (534)
Total Non-GAAP adjustments                     (203)            (534)
                                                               
NON-GAAP SALES AND MARKETING EXPENSE           24,639           25,395
                                                                
General and Administrative:
GAAP General and administrative Expense        13,987           16,836
                                                                
Share-based compensation                       (1,155)          (1,458)
Total Non-GAAP adjustments                     (1,155)          (1,458)
                                                               
NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSE    12,832           15,378
                                                                
Operating Expenses:
GAAP Total Operating Expenses                  51,039           56,565
                                                                
Share-based compensation                       (1,502)          (2,204)
Amortization of intangible assets              (696)            (1,992)
Impairment and restructuring charges           (922)            (1,060)
Total Non-GAAP adjustments                     (3,120)          (5,256)
                                                               
NON-GAAP TOTAL OPERATING EXPENSES              47,919           51,309
                                                                
Income (Loss) from Operations:
GAAP income (loss) from operations             (16,403)         (4,426)
                                                                
Share-based compensation                       1,604            2,263
Amortization of intangible assets              696              1,992
Impairment and restructuring charges           922              1,060
Total Non-GAAP adjustments                     3,222            5,315
                                                               
NON-GAAP INCOME (LOSS) FROM OPERATIONS         (13,181)         889
                                                                
Income (Loss) before taxes & EBITDA:
GAAP income (loss) before taxes                (15,440)         (4,608)
                                                                
Share-based compensation                       1,604            2,263
Amortization of intangible assets              696              1,992
Impairment and restructuring charges           922              1,060
Foreign exchange, net                          (479)            334
Total Non-GAAP adjustments                     2,743            5,649
                                                               
NON-GAAP INCOME (LOSS) BEFORE TAXES            (12,697)         1,041
Depreciation                                   1,977            2,163
NON-GAAP EBITDA                                (10,720)         3,204
                                                                
Income (loss) from continuing operations:
GAAP net income (loss)                         (16,182)         (4,706)
                                                                
Share-based compensation                       1,604            2,263
Amortization of intangible assets              696              1,992
Impairment and restructuring charges           922              1,060
Foreign exchange, net                          (479)            334
Income tax effect of reconciling items         5,503            (7)
Total Non-GAAP adjustments                     8,246            5,642
                                                               
NON-GAAP NET INCOME (LOSS)                     (7,936)          936
                                                                
GAAP weighted average shares                   20,083           19,419
outstanding--basic
NON-GAAP weighted average shares               20,083           19,793
outstanding--diluted
                                                                
GAAP Net Income (Loss) per share - basic       ($0.81)          ($0.24)
Non-GAAP adjustments detailed above            0.41             0.29
NON-GAAP NET INCOME (LOSS) PER SHARE (basic)   ($0.40)          $0.05
                                                                
GAAP Net Income (Loss) per share - diluted     ($0.81)          ($0.24)
Non-GAAP adjustments detailed above            $0.41            $0.29
NON-GAAP NET INCOME (LOSS) PER SHARE           ($0.40)          $0.05
(diluted)


Contact:

Planar Systems, Inc.
Media:
Kim Brown, 503-748-6724
kim.brown@planar.com
or
Investors:
Ryan Gray, 503-748-8911
ryan.gray@planar.com
 
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