Planar Announces Fiscal First Quarter 2014 Financial Results

  Planar Announces Fiscal First Quarter 2014 Financial Results

  Company reports a profitable quarter and record quarterly sales of Digital
                               Signage products

Business Wire

BEAVERTON, Ore. -- February 5, 2014

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        (28     )      73      
           items
   Total Non-GAAP adjustments                      440           2,458   
                                                                
   NON-GAAP NET INCOME (LOSS)                      1,070         976     
                                                                 
GAAP weighted average shares                        21,113          20,473
outstanding--basic
NON-GAAP weighted average shares                    21,416          20,679
outstanding--diluted
                                                                 
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.     Dec.     Sept.      Prior    Prior
                                 27,     28,     27,        Year    Quarter
                                 2013     2012     2013
                                                                       
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 &         3.3      2.0      5.1      66   %   -36  %
       Industrial
       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     -      2.3    -        -100 %  -    
       custom glass^(1)
Total Sales without              $ 40.5  $ 41.9  $ 45.7     -3   %  -12  %
Electroluminescent
                                                                       
       In the first quarter of 2013, the Company sold the assets and
^(1)  liabilities related to the Electroluminescent product line, including
       custom glass, which was included in other commercial & industrial
       sales.
       

Contact:

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