Planar Announces Fiscal First Quarter 2013 Financial Results

  Planar Announces Fiscal First Quarter 2013 Financial Results

 Company reports record quarterly Digital Signage product sales and Non-GAAP
                            EBITDA of $1.4 million

Business Wire

BEAVERTON, Ore. -- February 6, 2013

Planar Systems, Inc. (NASDAQ: PLNR), a worldwide leader in specialty display
solutions, recorded sales of $44.2 million and GAAP loss per share of $0.07 in
its first fiscal quarter ended December 28, 2012. On a Non-GAAP basis (see
reconciliation table), income per share was $0.05 in the first quarter of
fiscal 2013.

“The first quarter of 2013 represented a significant step forward in our
strategic transformation,” said Gerry Perkel, Planar’s President and Chief
Executive Officer. “Not only were we able to successfully close the sale our
EL product line, but we also experienced record sales levels of digital
signage products as well as our highest level of quarterly Non-GAAP
profitability in almost 2 years.”

SUMMARY OF BUSINESS HIGHLIGHTS

  *Closed the sale of the Electroluminescent (EL) product line to Beneq
    Products OY for a $6.5 million base purchase price, of which $3.9 million
    was paid in cash at closing and $2.6 million was paid in the form of a
    promissory note. The transaction terms also provide for up to $3.5 million
    in possible additional cash consideration which can be earned in calendar
    years 2013, 2014, 2015 based upon the EL product line achieving certain
    financial results
  *Began shipping 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
  *Sales of Digital Signage products and Touch Monitors totaled $21.8 million
    and represented 49% of total revenue (52% excluding EL product revenues)
    for the first fiscal quarter of 2013
  *Signed the contract and received purchase orders for a new custom
    commercial and industrial design win with revenue totaling approximately
    $10 million over 2 years, and the potential for additional follow-on
    business, with production expected to begin in the second half of fiscal
    2013

FIRST QUARTER FISCAL 2013 RESULTS

The Company’s total revenues increased 7 percent compared to the fourth
quarter of fiscal 2012 and declined 7 percent compared to the first quarter of
fiscal 2012. As previously announced, the Company sold the assets comprising
its Electroluminescent (EL) product line during the quarter. Excluding revenue
associated with EL products, the Company’s total revenue increased 14 percent
compared to the fourth quarter of fiscal 2012 and was approximately flat with
the first quarter of fiscal 2012. Sales of Digital Signage products totaled
$16.9 million in the first quarter of 2013, a 55 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 45 percent and 123 percent
respectively compared with the same period a year ago. The Company continues
to experience increased demand for its digital signage products as both the
number of customers as well as the product portfolio have expanded. Sales of
Commercial and Industrial (C&I) products declined 26 percent (20 percent
without EL) to $27.3 million ($25.0 million without EL) compared with the same
quarter a year ago. This decrease was primarily driven by lower sales of EL
displays, rear-projection cubes, custom commercial and industrial displays,
and high-end home products, partially offset by increased sales of touch
monitors which grew 38 percent 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 25.0 percent in the first quarter of 2013, up from 22.1
percent in the first quarter of 2012 (see reconciliation table). The increase
in gross profit margin, as a percent of sales, from the previous year was
primarily due to an inventory charge for certain end-of-life-products recorded
in the prior year which did not repeat in the first quarter of 2013.

Total operating expenses (on a Non-GAAP basis) for the first quarter of 2013
decreased $3.4 million, or 25 percent, to $10.1 million compared with the same
quarter a year ago, as expenses declined in all functions as a result of cost
reduction measures implemented in fiscal 2012 intended to lower the overall
breakeven point for the Company.

The Company’s cash balance increased $1.5 million sequentially to $19.3
million at the end of the first fiscal quarter of 2013 compared to the end of
the fourth quarter of fiscal 2012. The increase in cash was primarily caused
by the proceeds received as a result of the EL product line asset sale and an
increase in accounts payable, partially offset by increases in inventory and
accounts receivable.

BUSINESS OUTLOOK

Looking forward, the Company remains committed to transforming its business to
be more focused on markets that are growing, such as digital signage, and
becoming profitable. The Company has taken actions over the last 12 months to
reduce overall expense levels (and thus lower the breakeven point), shed a
non-strategic product line and, generally, focus more of its resources on
growing products/markets. Moving forward, the Company expects to see revenue
growth in Digital Signage and Touch products more than offset declines in more
mature product lines. As a result, the Company expects overall revenue growth
of 5 to 10 percent for fiscal year 2013, excluding EL product line revenue.
Additionally, the Company expects to achieve Non-GAAP profitability in the
second half of fiscal 2013, as well as, for the full fiscal year of 2013.
However, in the near term, the Company expects to follow its normal seasonal
pattern of lower sequential revenue in the second quarter of fiscal 2013. As a
result, the Company currently anticipates revenue in the range of $34 to $37
million and a Non-GAAP loss of $0.09 to $0.04 in the second fiscal quarter of
2013. Total Company revenue, excluding EL product line revenue, was $32.4
million in the second fiscal quarter of 2012.

Results of operations and the business outlook will be discussed in a
conference call today, February 6, 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 March 6, 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 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, revenue growth and Non-GAAP
earnings/profitability for the second quarter, second half, and full fiscal
year in 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
                                                Dec. 28, 2012   Dec. 30, 2011
                                                                
Sales                                           $  44,175       $  47,708
Cost of Sales                                     33,166        37,197  
Gross Profit                                       11,009          10,511
                                                                
Operating Expenses:
       Research and development, net               2,027           2,719
       Sales and marketing                         5,060           6,937
       General and administrative                  3,413           4,079
       Amortization of intangible assets           147             175
       Restructuring                               194             -
       Loss on sale of assets                     1,491         -       
       Total Operating Expenses                    12,332          13,910
                                                                
Income (Loss) from operations                      (1,323  )       (3,399  )
                                                                
Non-operating income (expense):
       Interest, net                               17              -
       Foreign exchange, net                       (108    )       426
       Other, net                                 115           42      
       Net non-operating income (expense)          24              468
                                                                
Income (loss) before taxes                         (1,299  )       (2,931  )
Provision (benefit) for income taxes              183           265     
Net Income (loss)                               $  (1,482  )    $  (3,196  )
                                                                
Net Income (loss) per share - basic                ($0.07  )       ($0.16  )
Net Income (loss) per share - diluted              ($0.07  )       ($0.16  )
                                                                
Weighted average shares outstanding - basic        20,473          19,822
Weighted average shares outstanding - diluted      20,473          19,822
                                                                           


Planar Systems, Inc.
Consolidated Balance Sheets
(In thousands)
(unaudited)
                                                    
                                       Dec. 28, 2012   Sept. 28, 2012
ASSETS
Cash                                   $  19,255       $  17,768
Accounts receivable, net                  21,392          18,604
Inventories                               33,643          31,984
Other current assets                     3,595         2,829     
Total current assets                      77,885          71,185
                                                       
Property, plant and equipment, net        2,649           3,554
Intangible assets, net                    417             565
Other assets                             10,057        6,580     
                                       $  91,008      $  81,884    
                                                       
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable                          22,274          11,686
Current portion of capital leases         646             449
Deferred revenue                          1,941           1,659
Other current liabilities                14,546        15,915    
Total current liabilities                 39,407          29,709
                                                       
Capital leases, less current portion      756             545
Other long-term liabilities              4,973         5,111     
Total liabilities                         45,136          35,365
                                                       
Common stock                              185,109         184,556
Retained earnings (deficit)               (136,313 )      (134,751  )
Accumulated other comprehensive loss     (2,924   )     (3,286    )
Total shareholders' equity               45,872        46,519    
                                       $  91,008      $  81,884    
                                                                    


Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, unaudited)
                                                           
                                                 For the three months ended
                                                 Dec. 28, 2012   Dec. 30, 2011
Gross Profit:
   GAAP Gross Profit                               11,009      10,511    
                                                                 
           Share-based Compensation                25          13        
   Total Non-GAAP adjustments                      25          13        
                                                                
   NON-GAAP GROSS PROFIT                           11,034      10,524    
                                                                
   NON-GAAP GROSS PROFIT PERCENTAGE                25.0    %    22.1      %
                                                                 
Research and Development:
   GAAP research and development expense           2,027       2,719     
                                                                 
           Share-based Compensation                (47     )    (39       )
   Total Non-GAAP adjustments                      (47     )    (39       )
                                                                
   NON-GAAP RESEARCH AND DEVELOPMENT EXPENSE       1,980       2,680     
                                                                 
Sales and Marketing:
   GAAP sales and marketing expense                5,060       6,937     
                                                                 
           Share-based Compensation                (69     )    (25       )
   Total Non-GAAP adjustments                      (69     )    (25       )
                                                                
   NON-GAAP SALES AND MARKETING EXPENSE            4,991       6,912     
                                                                 
General and Administrative:
   GAAP General and Administrative Expense          3,413        4,079
                                                                 
           Share-based Compensation                (304    )    (205      )
   Total Non-GAAP adjustments                      (304    )    (205      )
                                                                
   NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSE     3,109       3,874     
                                                                 
Operating Expenses:
   GAAP Total Operating Expenses                    12,332       13,910
                                                                 
           Share-based Compensation                 (420    )    (269      )
           Amortization of intangible assets        (147    )    (175      )
           Restructuring charges                    (194    )    -
           Loss on sale of assets                  (1,491  )    -         
   Total Non-GAAP adjustments                      (2,252  )    (444      )
                                                                
   NON-GAAP TOTAL OPERATING EXPENSES               10,080      13,466    
                                                                 
Reconciliation of GAAP to Non-GAAP Financial Measures Continued
(In thousands, unaudited)
                                                 For the three months ended
                                                 Dec. 28, 2012   Dec. 30, 2011
                                                                 
Income (Loss) from Operations:
   GAAP income (loss) from operations               (1,323  )    (3,399    )
                                                                 
           Share-based Compensation                 445          282
           Amortization of intangible assets        147          175
           Restructuring charges                    194          -
           Loss on sale of assets                  1,491       -         
   Total Non-GAAP adjustments                      2,277       457       
                                                                
   NON-GAAP INCOME (LOSS) FROM OPERATIONS          954         (2,942    )
                                                                 
Income (Loss) before taxes & EBITDA:
   GAAP income (loss) before taxes                  (1,299  )    (2,931    )
                                                                 
           Share-based Compensation                 445          282
           Amortization of intangible assets        147          175
           Loss on sale of assets                   1,491        -
           Restructuring charges                    194          -
           Foreign Exchange, net                   108         (426      )
   Total Non-GAAP adjustments                      2,385       31        
                                                                
   NON-GAAP INCOME (LOSS) BEFORE TAXES             1,086       (2,900    )
           Depreciation                            310         564       
   NON-GAAP EBITDA                                 1,396       (2,336    )
                                                                 
Net Income (Loss):
   GAAP Net Income (loss)                           (1,482  )    (3,196    )
                                                                 
           Share-based Compensation                 445          282
           Amortization of intangible assets        147          175
           Loss on sale of assets                   1,491        -
           Restructuring charges                    194          -
           Foreign Exchange, net                    108          (426      )
           Income tax effect of reconciling        73          1,353     
           items
   Total Non-GAAP adjustments                      2,458       1,384     
                                                                
   NON-GAAP NET INCOME (LOSS)                      976         (1,812    )
                                                                 
GAAP weighted average shares                        20,473       19,822
outstanding--basic
NON-GAAP weighted average shares                    20,679       19,822
outstanding--diluted
                                                                 
GAAP Net Income (Loss) per share - basic            ($0.07  )    ($0.16    )
   Non-GAAP adjustments detailed above              0.12         0.07
   NON-GAAP NET INCOME PER SHARE (basic)         $  0.05         ($0.09    )
                                                                 
GAAP Net Income (Loss) per share - diluted          ($0.07  )    ($0.16    )
   Non-GAAP adjustments detailed above              0.12         0.07
   NON-GAAP NET INCOME PER SHARE (diluted)       $  0.05         ($0.09    )
                                                                           


Planar Systems, Inc.
Revenue by Product Line
(In millions)
(unaudited)
                                                                
                              Three months ended               % Change vs.
                              Dec. 28,    Dec. 30,    Sep.     Prior   Prior
                              2012        2011        28,      Year    Quarter
                                                      2012
                                                                       
Digital Signage Sales         $  16.9     $  10.9     $ 13.6   55  %   24   %
                                                                       
Commercial & Industrial          27.3        36.8       27.8   -26 %   -2   %
Sales
   Desktop Monitors              8.7         9.6        7.8    -9  %   11   %
   Rear Projection Cubes         6.1         9.0        4.2    -32 %   44   %
   Touch Monitors                4.9         3.5        5.2    38  %   -5   %
   High-end Home                 3.0         5.3        3.2    -43 %   -6   %
   Custom Commercial &           2.0         3.0        2.3    -34 %   -13  %
   Industrial
   Electroluminescent^(1)        2.3         5.7        4.5    -60 %   -49  %
   Other                         0.3         0.7        0.6    -52 %   -38  %
                                                                   
Total Sales                   $  44.2     $  47.7     $ 41.4   -7  %   7    %
   Electroluminescent^(1)       2.3        5.7       4.5    -60 %   -49  %
Total Sales without           $  41.9     $  42.0     $ 36.9   0   %   14   %
Electroluminescent
                                                                       
^(1) In the first quarter of 2013, the Company sold the assets and liabilities
related to the Electroluminescent product line.


Contact:

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