Planar Announces Fiscal Second Quarter 2014 Financial Results

  Planar Announces Fiscal Second Quarter 2014 Financial Results  Company reports 41 percent year-over-year growth in quarterly sales of Digital                                Signage products  Business Wire  BEAVERTON, Ore. -- May 6, 2014  Planar Systems, Inc. (NASDAQ: PLNR), a global leader in display and digital signage technology, recorded sales of $41.1 million and GAAP income per share of $0.01 in its second fiscal quarter ended March 28, 2014. On a Non-GAAP basis (see reconciliation table), income per share was $0.03 in the second quarter of fiscal 2014.  “I am pleased with our second quarter results,” said Gerry Perkel, Planar’s President and Chief Executive Officer. “The strong growth in digital signage product sales, combined with profitability in the second quarter, keeps us in a position to achieve our goals of growing sales of digital signage products in excess of 20 percent for the full fiscal year, being profitable every quarter of the fiscal year, and expanding profitability in fiscal year 2014 compared to fiscal 2013.”  SUMMARY OF BUSINESS HIGHLIGHTS    *Quarterly sales of digital signage products totaled $19.0 million in the     fiscal second quarter of 2014, representing 41 percent growth compared     with the second fiscal quarter of 2013   *Recorded Non-GAAP EBITDA of $1.1 million in the second quarter of 2014     (see reconciliation table), resulting in $2.8 million of Non-GAAP EBITDA     in the first half of fiscal 2014   *Introduced the new 46” and 55” Simplicity Series digital signage displays     to round out the Planar Simplicity Series, which offers a broad range of     choices for deploying simple, sleek and affordable digital signage     displays   *Showcased the industry’s largest interactive display with Corning^®     Gorilla^® Glass, the 84” 4K Planar^® UltraRes™ Touch with ERO™ at Digital     Signage Expo 2014 in Las Vegas   *Began shipping Clarity™ Matrix LCD Video Wall Systems with G2     Architecture, which deliver a new level of visual performance as the next     generation of Planar’s award-winning family of LCD video wall solutions  SECOND QUARTER FISCAL 2014 RESULTS  Sales of digital signage products totaled $19.0 million in the second fiscal quarter of 2014, a 41 percent increase from the same period a year ago. Total revenue increased 4 percent compared to the second quarter of fiscal 2013 as increases in sales of digital signage products more than offset the decline in sales of Commercial and Industrial (C&I) products. Sales of C&I products decreased 15 percent to $22.1 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, and high-end home products, 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 23.6 percent in the second quarter of 2014, up from 20.4 percent in the second quarter of 2013 (see reconciliation table). The improvement in gross profit rate is the result of both a higher concentration of higher margin digital signage product sales relative to lower margin C&I products as well as higher gross profit rates on sales of digital signage products compared with the prior year. The Company has been expanding its differentiated line of digital signage products and leveraging higher volumes to improve overall gross profit rates on sales of digital signage products.  Total operating expenses (on a Non-GAAP basis) for the second quarter of 2014 were flat with the same quarter last year at $9.4 million (see reconciliation table), as the Company has been working to grow revenue at faster rate than expenses, leveraging its existing expense base as much as possible.  The Company’s cash balance decreased $0.2 million sequentially to $13.0 million at the end of the second fiscal quarter of 2014 compared to the end of the first quarter of fiscal 2014, as reductions in inventory, which improved inventory turns to 4.4, were roughly offset by an increase in accounts receivable and a decrease in accounts payable.  BUSINESS OUTLOOK  Looking forward, for the full fiscal year 2014, the Company continues to believe it can achieve between 20 and 30 percent revenue growth for sales of digital signage products compared with fiscal year 2013. As a result, the Company expects revenue in the range of $165-175 million and is increasing its forward looking estimate for full fiscal year 2014 Non-GAAP income per share to $0.15 to $0.20. In the short-term, the Company expects to see continued strong revenue growth for digital signage products in the third quarter, driving overall revenue growth for the third quarter in excess of 10 percent compared with the third quarter of 2013. As a result, the Company currently anticipates revenue in the range of $41.5-43.5 million and Non-GAAP income per share of $0.01 to $0.03 in the third fiscal quarter of 2014.  Results of operations and the business outlook will be discussed in a conference call today, May 6, 2014, beginning at 2:00 p.m. 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, 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 under the “Business Outlook” heading relating to the Company’s expected revenue growth, revenue range and Non-GAAP income per share range for fiscal 2014, and the Company’s expected revenue growth, total revenue range and Non-GAAP income per share range for the third quarter of fiscal 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            Six months ended                    Mar. 28,2014  Mar. 29, 2013   Mar. 28, 2014  Mar. 29,                                                                   2013                                                                 Sales              $  41,077      $  39,441       $  81,532       $  83,616 Cost of Sales        31,414      31,429        62,137       64,595   Gross Profit          9,663          8,012           19,395          19,021                                                                    Operating Expenses: Research and          1,469          1,828           2,713           3,855 development, net Sales and             5,054          5,044           9,727           10,104 marketing General and           3,189          2,913           6,456           6,326 administrative Amortization of intangible            -              148             -               295 assets Restructuring         10             -               21              194 Loss (gain) on       -           (177    )      -            1,314    sale of assets Total Operating       9,722          9,756           18,917          22,088 Expenses                                                                    Income (Loss)         (59     )      (1,744  )       478             (3,067  ) from operations                                                                    Non-operating income (expense): Interest, net         82             48              135             65 Foreign               (10     )      95              (53     )       (13     ) exchange, net Other, net           274         181           449          296      Net non-operating         346            324             531             348 income                                                                    Income (loss)         287            (1,420  )       1,009           (2,719  ) before taxes Provision (benefit) for        59          (140    )      151          43       income taxes Net Income         $  228       $  (1,280  )    $  858        $  (2,762  ) (loss)                                                                    Net Income (loss) per share     $0.01          ($0.06  )      $0.04           ($0.13  ) - basic Net Income (loss) per share     $0.01          ($0.06  )      $0.04           ($0.13  ) - diluted                                                                    Weighted average shares                21,302         20,643          21,207          20,558 outstanding - basic Weighted average shares                21,458         20,643          21,424          20,558 outstanding - diluted    Planar Systems, Inc. Consolidated Balance Sheets (In thousands) (unaudited)                                        Mar. 28, 2014  Sept. 27, 2013 ASSETS Cash                                   $  13,000       $  11,971 Accounts receivable, net                  22,605          22,821 Inventories                               28,421          30,003 Other current assets                     4,110         2,426      Total current assets                      68,136          67,221                                                         Property, plant and equipment, net        5,683           6,434 Other assets                             4,513         6,230                                             $  78,332      $  79,885                                                             LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable                       $  15,830       $  17,042 Current portion of capital leases         850             759 Deferred revenue                          1,738           1,685 Other current liabilities                11,746        12,848     Total current liabilities                 30,164          32,334                                                         Long-term portion of capital leases       41              394 Other long-term liabilities              4,721         5,390      Total liabilities                         34,926          38,118                                                         Common stock                              187,074         186,202 Retained deficit                          (141,232 )      (141,735  ) Accumulated other comprehensive loss     (2,436   )     (2,700    ) Total shareholders' equity               43,406        41,767                                            $  78,332      $  79,885        Reconciliation of GAAP to Non-GAAP Financial Measures                                        (In thousands, unaudited)                                                   For the three months ended                                                  Mar. 28, 2014  Mar. 29, 2013 Gross Profit: GAAP Gross Profit                                9,663           8,012                                                                   Share-based compensation                         21             28        Total Non-GAAP adjustments                       21             28                                                                         NON-GAAP GROSS PROFIT                            9,684          8,040                                                                      NON-GAAP GROSS PROFIT PERCENTAGE                 23.6     %      20.4     %                                                                   Research and Development: GAAP research and development expense            1,469           1,828                                                                   Share-based compensation                         (10      )      (35      ) Total Non-GAAP adjustments                       (10      )      (35      )                                                                  NON-GAAP RESEARCH AND DEVELOPMENT EXPENSE        1,459          1,793                                                                       Sales and Marketing: GAAP sales and marketing expense                 5,054           5,044                                                                   Share-based compensation                         (49      )      (82      ) Total Non-GAAP adjustments                       (49      )      (82      )                                                                  NON-GAAP SALES AND MARKETING EXPENSE             5,005          4,962                                                                       General and Administrative: GAAP General and Administrative Expense          3,189           2,913                                                                   Share-based compensation                         (294     )      (279     ) Total Non-GAAP adjustments                       (294     )      (279     )                                                                  NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSE      2,895          2,634                                                                       Operating Expenses: GAAP Total Operating Expenses                    9,722           9,756                                                                   Share-based compensation                         (353     )      (396     ) Amortization of intangible assets                -               (148     ) Restructuring charges                            (10      )      - Loss (gain) on sale of assets                    -              177       Total Non-GAAP adjustments                       (363     )      (367     )                                                                  NON-GAAP TOTAL OPERATING EXPENSES                9,359          9,389        Reconciliation of GAAP to Non-GAAP Financial Measures Continued                              (In thousands, unaudited)                                                   For the three months ended                                                  Mar. 28, 2014  Mar. 29, 2013                                                                   Income (Loss) from Operations: GAAP income (loss) from operations               (59       )     (1,744    )                                                                   Share-based compensation                         374             424 Amortization of intangible assets                -               148 Restructuring charges                            10              - Loss (gain) on sale of assets                    -              (177      ) Total Non-GAAP adjustments                       384            395                                                                         NON-GAAP INCOME (LOSS) FROM OPERATIONS           325            (1,349    )                                                                   Income (Loss) before taxes & EBITDA: GAAP income (loss) before taxes                  287             (1,420    )                                                                   Share-based compensation                         374             424 Amortization of intangible assets                -               148 Restructuring charges                            10              - Loss (gain) on sale of assets                    -               (177      ) Foreign exchange, net                            10             (95       ) Total Non-GAAP adjustments                       394            300                                                                         NON-GAAP INCOME (LOSS) BEFORE TAXES              681            (1,120    ) Depreciation                                     437            374        NON-GAAP EBITDA                                  1,118          (746      )                                                                   Net Income (Loss): GAAP Net Income (loss)                           228             (1,280    )                                                                   Share-based compensation                         374             424 Amortization of intangible assets                -               148 Restructuring charges                            10              - Loss (gain) on sale of assets                    -               (177      ) Foreign exchange, net                            10              (95       ) Income tax effect of reconciling items           (10       )     280        Total Non-GAAP adjustments                       384            580                                                                         NON-GAAP NET INCOME (LOSS)                       612            (700      )                                                                   GAAP weighted average shares                     21,302          20,643 outstanding--basic NON-GAAP weighted average shares                 21,458          20,643 outstanding--diluted                                                                   GAAP Net Income (Loss) per share - basic         $0.01           ($0.06    ) Non-GAAP adjustments detailed above              0.02            0.03 NON-GAAP NET INCOME (LOSS) PER SHARE (basic)     $0.03           ($0.03    )                                                                   GAAP Net Income (Loss) per share - diluted       $0.01           ($0.06    ) Non-GAAP adjustments detailed above              0.02            0.03 NON-GAAP NET INCOME (LOSS) PER SHARE (diluted)   $0.03           ($0.03    )    Reconciliation of GAAP to Non-GAAP Financial Measures                                        (In thousands, unaudited)                                                   For the six months ended                                                  Mar. 28, 2014  Mar. 29, 2013 Gross Profit: GAAP Gross Profit                                19,395          19,021                                                                   Share-based compensation                         46             53         Total Non-GAAP adjustments                       46             53                                                                          NON-GAAP GROSS PROFIT                            19,441         19,074                                                                      NON-GAAP GROSS PROFIT PERCENTAGE                 23.8      %     22.8      %                                                                   Research and Development: GAAP research and development expense            2,713           3,855                                                                   Share-based compensation                         (19       )     (82       ) Total Non-GAAP adjustments                       (19       )     (82       )                                                                  NON-GAAP RESEARCH AND DEVELOPMENT EXPENSE        2,694          3,773                                                                        Sales and Marketing: GAAP sales and marketing expense                 9,727           10,104                                                                   Share-based compensation                         (86       )     (151      ) Total Non-GAAP adjustments                       (86       )     (151      )                                                                  NON-GAAP SALES AND MARKETING EXPENSE             9,641          9,953                                                                        General and Administrative: GAAP General and Administrative Expense          6,456           6,326                                                                   Share-based compensation                         (637      )     (583      ) Total Non-GAAP adjustments                       (637      )     (583      )                                                                  NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSE      5,819          5,743                                                                        Operating Expenses: GAAP Total Operating Expenses                    18,917          22,088                                                                   Share-based compensation                         (742      )     (816      ) Amortization of intangible assets                -               (295      ) Restructuring charges                            (21       )     (194      ) Loss (gain) on sale of assets                    -              (1,314    ) Total Non-GAAP adjustments                       (763      )     (2,619    )                                                                  NON-GAAP TOTAL OPERATING EXPENSES                18,154         19,469        Reconciliation of GAAP to Non-GAAP Financial Measures Continued                              (In thousands, unaudited)                                                   For the six months ended                                                  Mar. 28, 2014  Mar. 29, 2013                                                                   Income (Loss) from Operations: GAAP income (loss) from operations               478             (3,067    )                                                                   Share-based compensation                         788             869 Amortization of intangible assets                -               295 Restructuring charges                            21              194 Loss (gain) on sale of assets                    -              1,314      Total Non-GAAP adjustments                       809            2,672                                                                       NON-GAAP INCOME (LOSS) FROM OPERATIONS           1,287          (395      )                                                                   Income (Loss) before taxes & EBITDA: GAAP income (loss) before taxes                  1,009           (2,719    )                                                                   Share-based compensation                         788             869 Amortization of intangible assets                -               295 Restructuring charges                            21              194 Loss (gain) on sale of assets                    -               1,314 Foreign exchange, net                            53             13         Total Non-GAAP adjustments                       862            2,685                                                                       NON-GAAP INCOME (LOSS) BEFORE TAXES              1,871          (34       ) Depreciation                                     915            685        NON-GAAP EBITDA                                  2,786          651                                                                          Net Income (Loss): GAAP Net Income (loss)                           858             (2,762    )                                                                   Share-based compensation                         788             869 Amortization of intangible assets                -               295 Restructuring charges                            21              194 Loss (gain) on sale of assets                    -               1,314 Foreign exchange, net                            53              13 Income tax effect of reconciling items           (38       )     56         Total Non-GAAP adjustments                       824            2,741                                                                       NON-GAAP NET INCOME (LOSS)                       1,682          (21       )                                                                   GAAP weighted average shares                     21,207          20,558 outstanding--basic NON-GAAP weighted average shares                 21,424          20,558 outstanding--diluted                                                                   GAAP Net Income (Loss) per share - basic         $0.04           ($0.13    ) Non-GAAP adjustments detailed above              0.04            0.13 NON-GAAP NET INCOME (LOSS) PER SHARE (basic)     $0.08           $0.00                                                                   GAAP Net Income (Loss) per share - diluted       $0.04           ($0.13    ) Non-GAAP adjustments detailed above              0.04            0.13 NON-GAAP NET INCOME (LOSS) PER SHARE (diluted)   $0.08           $0.00    Planar Systems, Inc. Revenue by Product Line (In millions) (unaudited)                           Three months ended              % Change                           Mar. 28,   Mar. 29,   Dec. 27,   vs.       vs. Prior                           2014      2013      2013       Prior    Quarter                                                            Year                                                                   Digital Signage Sales     $  19.0    $  13.4    $  19.0    41   %    0     %                                                                       Commercial & Industrial      22.1       26.0       21.5    -15  %    3     % Sales Desktop Monitors             7.7        9.0        8.1     -14  %    -5    % Rear Projection Cubes        4.1        6.3        5.0     -34  %    -18   % Touch Monitors               3.7        5.3        3.2     -31  %    16    % High-end Home                1.7        2.5        1.7     -35  %    0     % Custom Commercial &          4.7        2.6        3.3     81   %    42    % Industrial Other                        0.2        0.3        0.2     -24  %    0     %                                                                Total Sales               $  41.1   $  39.4   $  40.5    4    %   1     %    Planar Systems, Inc. Revenue by Product Line (In millions) (unaudited)                                      Six months ended               % Change                                      Mar. 28, 2014  Mar. 29, 2013   vs. Prior                                                                      Year                                                     Digital Signage Sales                $     37.9      $     30.3      25     %                                                                       Commercial & Industrial Sales              43.6            53.3      -18    % Desktop Monitors                           15.8            17.7      -11    % Rear Projection Cubes                      9.1             12.4      -26    % Touch Monitors                             6.9             10.2      -32    % High-end Home                              3.4             5.5       -39    % Custom Commercial & Industrial             8.0             4.6       74     % Electroluminescent^(1)                     -               2.3       -100   % Other                                      0.4             0.6       -35    %                                                                    Total Sales                          $     81.5     $     83.6      -3     % Electroluminescent^(1)                    -             2.3       -100   % Total Sales without                  $     81.5     $     81.3      0.2    % Electroluminescent   ^(1) In the first quarter of 2013, the Company sold the assets and liabilities related to the Electroluminescent product line, including custom glass, which was included in other commercial & industrial sales.  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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