Planar Announces Fiscal Second Quarter 2013 Financial Results

  Planar Announces Fiscal Second Quarter 2013 Financial Results

   Company reports 80% year over year growth in quarterly sales of Digital
                               Signage products

Business Wire

BEAVERTON, Ore. -- May 06, 2013

Planar Systems, Inc. (NASDAQ: PLNR), a global leader in digital display
technology, recorded sales of $39.4 million and GAAP loss per share of $0.06
in its second fiscal quarter ended March 29, 2013. On a Non-GAAP basis (see
reconciliation table), loss per share was $0.03 in the second quarter of
fiscal 2013.

“I am pleased we were able to exceed our expectations for both revenue and
earnings for the second quarter of 2013,” said Gerry Perkel, Planar’s
President and Chief Executive Officer. “We were able to grow revenue over 20
percent, excluding EL product line revenue, compared to the second quarter of
2012, buoyed by 80 percent growth in sales of Digital Signage products.”

SUMMARY OF BUSINESS HIGHLIGHTS

  *Sales of Digital Signage products and Touch Monitors totaled $18.7
    million, representing 71 percent growth compared with the second fiscal
    quarter of 2012
  *Unveiled an all new website optimized for wide-screen desktop, touch and
    mobile devices for a better engagement and overall user experience
  *Announced Planar® UltraRes™, a new line of Ultra HD resolution displays
    uniquely designed to help professionals across industries reap value from
    high-resolution information
  *Honored with Products of the Year, Best New Product Awards at Digital
    Signage Expo 2013

       *Planar Mosaic and Planar UltraLux Series are recognized by Signage
         Solutions Magazine and Digital Signage Magazine

  *Released 3D BIM Models of LCD Displays and Video Walls through Autodesk
    Seek enabling architects, engineers and designers to easily integrate 3D
    BIM models of Planar displays into building plans

SECOND QUARTER FISCAL 2013 RESULTS

The Company’s total revenue increased 5 percent compared to the second 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 increased 22 percent compared with the second quarter of fiscal 2012.
Sales of Digital Signage products totaled $13.4 million in the second quarter
of 2013, an 80 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 78 percent and 128 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 14 percent (increased 4 percent without EL) to $26.0 million
compared with the same quarter a year ago. This decrease was primarily driven
by lower sales of EL displays and high-end home products, partially offset by
increased sales of rear-projection cubes and touch monitors which grew 17 and
51 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 20.4 percent in the second quarter of 2013, up from 19.3
percent in the second 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 a favorable mix of product sales, with a greater portion of
total revenue derived from sales of higher margin tiled LCD systems and
rear-projection cubes.

Total operating expenses (on a Non-GAAP basis) for the second quarter of 2013
decreased $3.4 million, or 27 percent, to $9.4 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.

The Company’s cash balance decreased $6.4 million sequentially to $12.9
million at the end of the second fiscal quarter of 2013 compared to the end of
the first quarter of fiscal 2013. The decrease in cash was primarily caused by
a decrease in accounts payable and the loss incurred in the quarter, partially
offset by decreases in inventory and accounts receivable.

BUSINESS OUTLOOK

Looking forward, the Company remains committed to transforming its business to
be more focused on becoming profitable and on markets that are growing, such
as digital signage. As part of the Company’s on-going effort to improve
efficiency, the Company recently completed the consolidation of its US
manufacturing operations into a single facility. As a result, the Company
expects to record a $2.4 million restructuring charge in third quarter of
2013, comprised of a $0.3 million non-cash charge for leasehold improvements
and other property, plant and equipment associated with the vacated facility
and the remaining $2.1 million charge representing the estimated present value
of future lease payments, less an assumption for sub-lease income.
Additionally, the Company expects sequential growth in sales of Digital
Signage and Touch products in the third quarter of 2013, partially offset by
sequential decline in sales of various other Commercial and Industrial
products. Therefore, the Company currently anticipates revenue and Non-GAAP
earnings, excluding the restructuring charge mentioned above, in the third
quarter of fiscal 2013 to be similar to the second quarter of fiscal 2013. The
Company also continues to expect the second half and full fiscal year of 2013
to be profitable on a Non-GAAP basis.

Results of operations and the business outlook will be discussed in a
conference call today, May 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 June 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 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, restructuring charges
and Non-GAAP earnings/profitability for the third 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, 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              Six months ended
                     Mar. 29, 2013  Mar. 30, 2012   Mar. 29,     Mar. 30,
                                                     2013          2012
                                                                   
Sales                $  39,441       $  37,542       $  83,616     $ 85,250
Cost of Sales          31,429       30,335        64,595    67,532  
Gross Profit            8,012           7,207           19,021       17,718
                                                                   
Operating
Expenses:
   Research and
   development,         1,828           2,767           3,855        5,486
   net
   Sales and            5,044           6,706           10,104       13,643
   marketing
   General and          2,913           3,701           6,326        7,780
   administrative
   Amortization of
   intangible           148             175             295          350
   assets
   Restructuring        -               518             194          518
   Loss (gain) on      (177    )     -             1,314     -       
   sale of assets
   Total Operating      9,756           13,867          22,088       27,777
   Expenses
                                                                   
Income (Loss) from      (1,744  )       (6,660  )       (3,067 )     (10,059 )
operations
                                                                   
Non-operating
income (expense):
   Interest, net        48              6               65           6
   Foreign              95              (163    )       (13    )     263
   exchange, net
   Other, net          181          279           296       321     
   Net
   non-operating        324             122             348          590
   income
   (expense)
                                                                   
Income (loss)           (1,420  )       (6,538  )       (2,719 )     (9,469  )
before taxes
Provision
(benefit) for          (140    )      127           43         392     
income taxes
Net Income (loss)    $  (1,280  )   $  (6,665  )    $  (2,762 )  $ (9,861  )
                                                                   
Net Income (loss)       ($0.06  )       ($0.33  )       ($0.13 )     ($0.49  )
per share - basic
Net Income (loss)
per share -             ($0.06  )       ($0.33  )       ($0.13 )     ($0.49  )
diluted
                                                                   
Weighted average
shares outstanding      20,643          20,031          20,558       19,927
- basic
Weighted average
shares outstanding      20,643          20,031          20,558       19,927
- diluted
                                                                             


Planar Systems, Inc.
Consolidated Balance Sheets
(In thousands)
(unaudited)
                                                    
                                       Mar. 29, 2013   Sep. 28, 2013
ASSETS
Cash                                   $  12,914       $  17,768
Accounts receivable, net                  18,825          18,604
Inventories                               29,866          31,984
Other current assets                     2,948         2,829    
Total current assets                      64,553          71,185
                                                       
Property, plant and equipment, net        2,948           3,554
Intangible assets, net                    270             565
Other assets                             10,081        6,580    
                                       $  77,852      $  81,884   
                                                       
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable                          13,463          11,686
Current portion of capital leases         759             449
Deferred revenue                          1,619           1,659
Other current liabilities                12,073        15,915   
Total current liabilities                 27,914          29,709
                                                       
Long-term portion of capital leases       807             545
Other long-term liabilities              4,674         5,111    
Total liabilities                         33,395          35,365
                                                       
Common stock                              185,532         184,556
Retained earnings (deficit)               (137,718 )      (134,751 )
Accumulated other comprehensive loss     (3,357   )     (3,286   )
Total shareholders' equity               44,457        46,519   
                                       $  77,852      $  81,884   
                                                                   


Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, unaudited)
                                                          
                                                For the three months ended
                                                Mar. 29, 2013   Mar. 30, 2012
Gross Profit:
  GAAP Gross Profit                             8,012          7,207     
                                                                
           Share-based compensation             28             23        
  Total Non-GAAP adjustments                    28             23        
                                                               
  NON-GAAP GROSS PROFIT                         8,040          7,230     
                                                               
  NON-GAAP GROSS PROFIT PERCENTAGE              20.4    %       19.3      %
                                                                
Research and Development:
  GAAP research and development expense         1,828          2,767     
                                                                
           Share-based compensation             (35     )       (24       )
  Total Non-GAAP adjustments                    (35     )       (24       )
                                                               
  NON-GAAP RESEARCH AND DEVELOPMENT EXPENSE     1,793          2,743     
                                                                
Sales and Marketing:
  GAAP sales and marketing expense              5,044          6,706     
                                                                
           Share-based compensation             (82     )       (30       )
  Total Non-GAAP adjustments                    (82     )       (30       )
                                                               
  NON-GAAP SALES AND MARKETING EXPENSE          4,962          6,676     
                                                                
General and Administrative:
  GAAP General and Administrative Expense       2,913           3,701
                                                                
           Share-based compensation             (279    )       (294      )
  Total Non-GAAP adjustments                    (279    )       (294      )
                                                               
  NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSE   2,634          3,407     
                                                                
Operating Expenses:
  GAAP Total Operating Expenses                 9,756           13,867
                                                                
           Share-based compensation             (396    )       (348      )
           Amortization of intangible assets    (148    )       (175      )
           Restructuring charges                -               (518      )
           Loss (gain) on sale of assets        177            -         
  Total Non-GAAP adjustments                    (367    )       (1,041    )
                                                               
  NON-GAAP TOTAL OPERATING EXPENSES             9,389          12,826    
                                                                          


Reconciliation of GAAP to Non-GAAP Financial Measures Continued
(In thousands, unaudited)
                                                           
                                                 For the three months ended
                                                 Mar. 29, 2013   Mar. 30, 2012
                                                                 
Income (Loss) from Operations:
   GAAP income (loss) from operations            (1,744    )     (6,660    )
           Share-based compensation              424             371
           Amortization of intangible assets     148             175
           Restructuring charges                 -               518
           Loss (gain) on sale of assets         (177      )     -         
   Total Non-GAAP adjustments                    395            1,064     
                                                                
   NON-GAAP INCOME (LOSS) FROM OPERATIONS        (1,349    )     (5,596    )
                                                                 
Income (Loss) before taxes & EBITDA:
   GAAP income (loss) before taxes               (1,420    )     (6,538    )
           Share-based compensation              424             371
           Amortization of intangible assets     148             175
           Restructuring charges                 -               518
           Loss (gain) on sale of assets         (177      )     -
           Foreign exchange, net                 (95       )     163       
   Total Non-GAAP adjustments                    300            1,227     
                                                                
   NON-GAAP INCOME (LOSS) BEFORE TAXES           (1,120    )     (5,311    )
           Depreciation                          374            525       
   NON-GAAP EBITDA                               (746      )     (4,786    )
                                                                 
Net Income (Loss):
   GAAP Net Income (loss)                        (1,280    )     (6,665    )
           Share-based compensation              424             371
           Amortization of intangible assets     148             175
           Restructuring charges                 -               518
           Loss (gain) on sale of assets         (177      )     -
           Foreign exchange, net                 (95       )     163
           Income tax effect of reconciling      280            2,119     
           items
   Total Non-GAAP adjustments                    580            3,346     
                                                                
   NON-GAAP NET INCOME (LOSS)                    (700      )     (3,319    )
                                                                 
GAAP weighted average shares                     20,643          20,031
outstanding--basic
NON-GAAP weighted average shares                 20,643          20,031
outstanding--diluted
                                                                 
GAAP Net Income (Loss) per share - basic         ($0.06    )     ($0.33    )
   Non-GAAP adjustments detailed above           0.03            0.16
   NON-GAAP NET INCOME PER SHARE (basic)         ($0.03    )     ($0.17    )
                                                                 
GAAP Net Income (Loss) per share - diluted       ($0.06    )     ($0.33    )
   Non-GAAP adjustments detailed above           0.03            0.16
   NON-GAAP NET INCOME PER SHARE (diluted)       ($0.03    )     ($0.17    )
                                                                           


Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, unaudited)
                                                          
                                                For the six months ended
                                                Mar. 29, 2013   Mar. 30, 2012
Gross Profit:
  GAAP Gross Profit                             19,021         17,718    
                                                                
           Share-based compensation             53             36        
  Total Non-GAAP adjustments                    53             36        
                                                               
  NON-GAAP GROSS PROFIT                         19,074         17,754    
                                                               
  NON-GAAP GROSS PROFIT PERCENTAGE              22.8      %     20.8      %
                                                                
Research and Development:
  GAAP research and development expense         3,855          5,486     
                                                                
           Share-based compensation             (82       )     (63       )
  Total Non-GAAP adjustments                    (82       )     (63       )
                                                               
  NON-GAAP RESEARCH AND DEVELOPMENT EXPENSE     3,773          5,423     
                                                                
Sales and Marketing:
  GAAP sales and marketing expense              10,104         13,643    
                                                                
           Share-based compensation             (151      )     (55       )
  Total Non-GAAP adjustments                    (151      )     (55       )
                                                               
  NON-GAAP SALES AND MARKETING EXPENSE          9,953          13,588    
                                                                
General and Administrative:
  GAAP General and Administrative Expense       6,326           7,780
                                                                
           Share-based compensation             (583      )     (499      )
  Total Non-GAAP adjustments                    (583      )     (499      )
                                                               
  NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSE   5,743          7,281     
                                                                
Operating Expenses:
  GAAP Total Operating Expenses                 22,088          27,777
                                                                
           Share-based compensation             (816      )     (617      )
           Amortization of intangible assets    (295      )     (350      )
           Restructuring charges                (194      )     (518      )
           Loss (gain) on sale of assets        (1,314    )     -         
  Total Non-GAAP adjustments                    (2,619    )     (1,485    )
                                                               
  NON-GAAP TOTAL OPERATING EXPENSES             19,469         26,292    
                                                                          


Reconciliation of GAAP to Non-GAAP Financial Measures Continued
(In thousands, unaudited)
                                                           
                                                 For the six months ended
                                                 Mar. 29, 2013   Mar. 30, 2012
                                                                 
Income (Loss) from Operations:
   GAAP income (loss) from operations               (3,067  )    (10,059   )
                                                                 
           Share-based compensation                 869          653
           Amortization of intangible assets        295          350
           Restructuring charges                    194          518
           Loss (gain) on sale of assets           1,314       -         
   Total Non-GAAP adjustments                      2,672       1,521     
                                                                
   NON-GAAP INCOME (LOSS) FROM OPERATIONS          (395    )    (8,538    )
                                                                 
Income (Loss) before taxes & EBITDA:
   GAAP income (loss) before taxes                  (2,719  )    (9,469    )
                                                                 
           Share-based compensation                 869          653
           Amortization of intangible assets        295          350
           Restructuring charges                    194          518
           Loss (gain) on sale of assets            1,314
           Foreign exchange, net                   13          (263      )
   Total Non-GAAP adjustments                      2,685       1,258     
                                                                
   NON-GAAP INCOME (LOSS) BEFORE TAXES             (34     )    (8,211    )
           Depreciation                            685         1,089     
   NON-GAAP EBITDA                                 651         (7,122    )
                                                                 
Net Income (Loss):
   GAAP Net Income (loss)                           (2,762  )    (9,861    )
                                                                 
           Share-based compensation                 869          653
           Amortization of intangible assets        295          350
           Restructuring charges                    194          518
           Loss (gain) on sale of assets            1,314        -
           Foreign exchange, net                    13           (263      )
           Income tax effect of reconciling        56          3,471     
           items
   Total Non-GAAP adjustments                      2,741       4,729     
                                                                
   NON-GAAP NET INCOME (LOSS)                      (21     )    (5,132    )
                                                                 
GAAP weighted average shares                        20,558       19,927
outstanding--basic
NON-GAAP weighted average shares                    20,558       19,927
outstanding--diluted
                                                                 
GAAP Net Income (Loss) per share - basic            ($0.13  )    ($0.49    )
   Non-GAAP adjustments detailed above              0.13         0.23
   NON-GAAP NET INCOME PER SHARE (basic)         $  0.00         ($0.26    )
                                                                 
GAAP Net Income (Loss) per share - diluted          ($0.13  )    ($0.49    )
   Non-GAAP adjustments detailed above              0.13         0.23
   NON-GAAP NET INCOME PER SHARE (diluted)       $  0.00         ($0.26    )
                                                                           


Planar Systems, Inc.
Revenue by Product Line
(In millions)
(unaudited)
                                                                
                              Three months ended              % Change
                              Mar. 29,   Mar. 30,   Dec.      vs.      vs.
                              2013      2012      28,       Prior   Prior
                                                    2012      Year     Quarter
                                                                       
Digital Signage Sales         $  13.4    $  7.5     $  16.9   80   %   -21   %
                                                                       
Commercial & Industrial          26.0       30.1       27.3   -14  %   -5    %
Sales
   Desktop Monitors              9.0        9.3        8.7    -3   %   3     %
   Rear Projection Cubes         6.3        5.4        6.1    17   %   3     %
   Touch Monitors                5.3        3.6        4.9    51   %   8     %
   High-end Home                 2.5        3.2        3.0    -24  %   -17   %
   Custom Commercial &           2.6        2.7        2.0    -3   %   30    %
   Industrial
   Electroluminescent^(1)        -          5.2        2.3    -100 %   -100  %
   Other                         0.3        0.7        0.3    -68  %   0     %
                                                                   
Total Sales                   $  39.4    $  37.6    $  44.2   5    %   -11   %
   Electroluminescent^(1)       0.0       5.2       2.3    -100 %   -100  %
Total Sales without           $  39.4   $  32.4   $  41.9   22   %  -6    %
Electroluminescent
                                                                       
^(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)
                                                            
                                     Six months ended              % Change
                                     Mar. 29,      Mar. 30,       vs. Prior
                                     2013           2012           Year
                                                                   
Digital Signage Sales                $   30.3       $   18.4       65       %
                                                                   
Commercial & Industrial Sales            53.3           66.9       -20      %
      Desktop Monitors                   17.7           18.9       -6       %
      Rear Projection Cubes              12.4           14.4       -14      %
      Touch Monitors                     10.2           7.1        45       %
      High-end Home                      5.5            8.5        -36      %
      Custom Commercial &                4.6            5.7        -19      %
      Industrial
      Electroluminescent^(1)             2.3            10.9       -79      %
      Other                              0.6            1.4        -59      %
                                                                
Total Sales                          $   83.6      $   85.3       -2       %
      Electroluminescent^(1)            2.3          10.9       -79      %
Total Sales without                  $   81.3      $   74.4       9        %
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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