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
 
Press spacebar to pause and continue. Press esc to stop.