Planar Reports Fiscal Third Quarter 2014 Financial Results

  Planar Reports Fiscal Third Quarter 2014 Financial Results  Company Reports 53 Percent Year-Over-Year Growth in Quarterly Sales of Digital                                Signage Products  Business Wire  BEAVERTON, Ore. -- July 31, 2014  Planar Systems, Inc. (NASDAQ: PLNR), a global leader in display and digital signage technology, recorded sales of $43.9 million and GAAP income per share of $0.03 in its third fiscal quarter ended June 27, 2014. On a non-GAAP basis (see reconciliation table below), income per share was $0.05 in the third quarter of fiscal 2014.  FISCAL Q3 2014 OPERATIONAL HIGHLIGHTS    *Quarterly sales of digital signage products increased 53 percent to $21.4     million, compared to the third fiscal quarter of 2013.   *Non-GAAP EBITDA totaled $1.6 million (see reconciliation table), resulting     in $4.4 million in non-GAAP EBITDA fiscal year to-date.   *Rolled out the Clarity™ Matrix Video Wall Calculator, a first-of-its-kind,     free online tool that makes it easier, faster and more accurate to design     and install video walls.   *Advanced the adoption of Ultra HD with the introduction of four new 4K     displays: Planar UltraRes 98", Planar EP-Series 58" and 65", and Planar     IX-Series 28" UHD displays.   *Honored with Most Innovative Video Display and Best of Show Awards at     InfoComm 2014. Planar UltraRes Series and Clarity Matrix LCD Video Wall     System recognized by Systems Contractor News and Digital Signage Magazine.  FISCAL Q3 2014 FINANCIAL RESULTS  Sales of digital signage products totaled $21.4 million in the third fiscal quarter of 2014, a 53 percent increase over the same period a year ago. Total revenue increased 17 percent compared to the third 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 4 percent to $22.5 million compared with the same quarter a year ago. This decrease was primarily driven by lower sales of touch monitors and high-end home products, partially offset by higher sales of custom C&I displays and rear projection cubes.  The Company’s consolidated gross profit margin, as a percentage of sales (on a non-GAAP basis), was 24.4 percent in the third quarter of 2014, up from 21.7 percent in the third quarter of 2013 (see reconciliation table). The improvement in gross profit rate is the result of both an increase in sales of higher margin digital signage products 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.  Total operating expenses (on a non-GAAP basis) for the third quarter of 2014 were $9.6 million compared with $9.0 million in the same quarter last year (see reconciliation table), primarily driven by increases in sales and marketing expenditures.  The Company’s cash balance decreased $1.5 million sequentially to $11.5 million at the end of the third fiscal quarter of 2014 compared to the end of the second quarter of fiscal 2014. The primary drivers of working capital remained flat with the second fiscal quarter as reductions in inventory, which improved inventory turns to 5.1, and a small increase in accounts payable were roughly offset by an increase in accounts receivable. Cash declined in the quarter primarily as a result of payments made to a third party for certain components related to the EL business for which the buyer of the EL business, Beneq Products Oy, has agreed to repay the Company over time.  MANAGEMENT COMMENTARY  “Our third quarter results came in above our expectations for both revenue and profits, bolstered by strong growth in sales of our strategic focus area of digital signage products,” said Gerry Perkel, Planar’s president and chief executive officer. “As a result of the strong performance in the third quarter, coupled with a favorable outlook for the fourth quarter, we are increasing our estimates for revenue and non-GAAP EPS for the full fiscal year.”  BUSINESS OUTLOOK  Looking forward, the Company currently expects to see continued strong revenue for digital signage and custom C&I products in the fourth fiscal quarter of 2014, and therefore anticipates revenue in the range of $48 million to $50 million and non-GAAP income per share of $0.08 to $0.10. As a result, the Company has raised its estimates for the full fiscal year 2014, and currently expects revenue in the range of $173.4 million to $175.4 million and non-GAAP income per share of $0.21 to $0.23.  CONFERENCE CALL  Management will discuss the results of operations and the business outlook in a conference call later today, July 31, 2014, beginning at 2:00 p.m. Pacific time. The call can be heard via the Internet through a link on Planar’s website at www.planar.com and will be available for replay until August 31, 2014. The Company will post on its website management’s prepared remarks shortly after 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 fourth 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              Nine months ended                      Jun. 27, 2014  Jun. 28, 2013   Jun. 27,     Jun. 28,                                                      2014          2013                                                                     Sales                $  43,853       $  37,485       $ 125,385     $ 121,101 Cost of Sales          33,188       29,359       95,325     93,954   Gross Profit            10,665          8,126          30,060        27,147                                                                     Operating Expenses:    Research and    development,         1,560           1,620          4,273         5,475    net    Sales and            5,187           4,819          14,914        14,923    marketing    General and          3,158           2,833          9,614         9,159    administrative    Amortization of    intangible           -               147            -             442    assets    Restructuring        10              2,407          31            2,601    Loss on sale of     -            -            -          1,314       assets    Total Operating      9,915           11,826         28,832        33,914    Expenses                                                                     Income (Loss) from      750             (3,700  )      1,228         (6,767  ) operations                                                                     Non-operating income (expense):    Interest, net        99              39             234           104    Foreign              (1      )       (1      )      (54     )     (14     )    exchange, net    Other, net          (27     )     166          422        462         Net    non-operating        71              204            602           552    income                                                                     Income (loss)           821             (3,496  )      1,830         (6,215  ) before taxes Provision for          115          71           266        114      income taxes Net Income (loss)    $  706        $  (3,567  )    $ 1,564     $ (6,329  )                                                                     Net Income (loss)    $  0.03            ($0.17  )    $ 0.07          ($0.31  ) per share - basic Net Income (loss) per share -          $  0.03            ($0.17  )    $ 0.07          ($0.31  ) diluted                                                                     Weighted average shares outstanding      21,491          20,899         21,302        20,672 - basic Weighted average shares outstanding      21,623          20,899         21,506        20,672 - diluted                                                                                Planar Systems, Inc. Consolidated Balance Sheets (In thousands) (unaudited)                                                                                             Jun. 27, 2014   Sept. 27, 2013 ASSETS Cash                                   $  11,517       $  11,971 Accounts receivable, net                  25,175          22,821 Inventories                               26,247          30,003 Other current assets                     4,602         2,426      Total current assets                      67,541          67,221                                                         Property, plant and equipment, net        5,313           6,434 Other assets                             7,582         6,230                                             $  80,436      $  79,885                                                             LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable                       $  16,156       $  17,042 Current portion of capital leases         443             759 Deferred revenue                          1,638           1,685 Other current liabilities                13,455        12,848     Total current liabilities                 31,692          32,334                                                         Long-term portion of capital leases       -               394 Other long-term liabilities              4,396         5,390      Total liabilities                         36,088          38,118                                                         Common stock                              187,517         186,202 Retained deficit                          (140,612 )      (141,735  ) Accumulated other comprehensive loss     (2,557   )     (2,700    ) Total shareholders' equity               44,348        41,767                                            $  80,436      $  79,885                                                                           Reconciliation of GAAP to Non-GAAP Financial                  Measures (In thousands, unaudited)                                                            For the three months ended                                                  Jun. 27, 2014   Jun. 28, 2013 Gross Profit:     GAAP Gross Profit                            10,665          8,126                                                                                    Share-based compensation        27             22             Total Non-GAAP adjustments                   27             22                                                                              NON-GAAP GROSS PROFIT                        10,692         8,148                                                                           NON-GAAP GROSS PROFIT PERCENTAGE             24.4      %     21.7      %                                                                   Research and Development:     GAAP research and development expense        1,560           1,620                                                                                    Share-based compensation        (15       )     -              Total Non-GAAP adjustments                   (15       )     -                                                                               NON-GAAP RESEARCH AND DEVELOPMENT            1,545          1,620          EXPENSE                                                                   Sales and Marketing:     GAAP sales and marketing expense             5,187           4,819                                                                                    Share-based compensation        (55       )     (61       )     Total Non-GAAP adjustments                   (55       )     (61       )                                                                      NON-GAAP SALES AND MARKETING EXPENSE         5,132          4,758                                                                        General and Administrative:     GAAP General and Administrative Expense      3,158           2,833                                                                                    Share-based compensation        (259      )     (208      )     Total Non-GAAP adjustments                   (259      )     (208      )                                                                      NON-GAAP GENERAL AND ADMINISTRATIVE          2,899          2,625          EXPENSE                                                                   Operating Expenses:     GAAP Total Operating Expenses                9,915           11,826                                                                                    Share-based compensation        (329      )     (269      )                  Amortization of intangible      -               (147      )                  assets                  Restructuring charges           (10       )     (2,407    )     Total Non-GAAP adjustments                   (339      )     (2,823    )                                                                      NON-GAAP TOTAL OPERATING EXPENSES            9,576          9,003                                                                                   Reconciliation of GAAP to Non-GAAP Financial                   Measures Continued (In thousands, unaudited)                                                              For the three months ended                                                  Jun. 27, 2014   Jun. 28, 2013                                                                   Income (Loss) from Operations:      GAAP income (loss) from operations             750          (3,700    )                                                                                      Share-based compensation         356          291                    Amortization of intangible       -            147                    assets                    Restructuring charges           10          2,407           Total Non-GAAP adjustments                    366         2,845                                                                            NON-GAAP INCOME (LOSS) FROM OPERATIONS        1,116       (855      )                                                                   Income (Loss) before taxes & EBITDA:      GAAP income (loss) before taxes                821          (3,496    )                                                                                      Share-based compensation         356          291                    Amortization of intangible       -            147                    assets                    Restructuring charges            10           2,407                    Foreign exchange, net           1           1               Total Non-GAAP adjustments                    367         2,846                                                                            NON-GAAP INCOME (LOSS) BEFORE TAXES           1,188       (650      )                    Depreciation                    416         330             NON-GAAP EBITDA                               1,604       (320      )                                                                   Net Income (Loss):      GAAP Net Income (loss)                         706          (3,567    )                    Share-based compensation         356          291                    Amortization of intangible       -            147                    assets                    Restructuring charges            10           2,407                    Foreign exchange, net            1            1                    Income tax effect of            (5      )    315                           reconciling items      Total Non-GAAP adjustments                    362         3,161                                                                            NON-GAAP NET INCOME (LOSS)                    1,068       (406      )                                                                   GAAP weighted average shares                        21,491       20,899 outstanding--basic GAAP weighted average shares                        21,623       20,899 outstanding--diluted                                                                   GAAP Net Income (Loss) per share - basic         $  0.03         ($0.17    )      Non-GAAP adjustments detailed above            0.02         0.15      NON-GAAP NET INCOME (LOSS) PER SHARE        $  0.05         ($0.02    )      (basic)                                                                   GAAP Net Income (Loss) per share - diluted       $  0.03         ($0.17    )      Non-GAAP adjustments detailed above            0.02         0.15      NON-GAAP NET INCOME (LOSS) PER SHARE        $  0.05         ($0.02    )      (diluted)                                                                    Reconciliation of GAAP to Non-GAAP Financial Measures (In thousands, unaudited)                                                                                                  For the nine months ended                                                  Jun. 27, 2014   Jun. 28, 2013 Gross Profit:      GAAP Gross Profit                              30,060       27,147                                                                                    Share-based compensation          73          75              Total Non-GAAP adjustments                    73          75                                                                               NON-GAAP GROSS PROFIT                         30,133      27,222                                                                           NON-GAAP GROSS PROFIT PERCENTAGE              24.0    %    22.5      %                                                                   Research and Development:      GAAP research and development expense          4,273        5,475                                                                                    Share-based compensation          (34     )    (82       )      Total Non-GAAP adjustments                    (34     )    (82       )                                                                       NON-GAAP RESEARCH AND DEVELOPMENT             4,239       5,393           EXPENSE                                                                   Sales and Marketing:      GAAP sales and marketing expense               14,914       14,923                                                                                    Share-based compensation          (141    )    (212      )      Total Non-GAAP adjustments                    (141    )    (212      )                                                                       NON-GAAP SALES AND MARKETING EXPENSE          14,773      14,711                                                                       General and Administrative:      GAAP General and Administrative Expense        9,614        9,159                                                                                    Share-based compensation          (896    )    (791      )      Total Non-GAAP adjustments                    (896    )    (791      )                                                                       NON-GAAP GENERAL AND ADMINISTRATIVE           8,718       8,368           EXPENSE                                                                   Operating Expenses:      GAAP Total Operating Expenses                  28,832       33,914                                                                                    Share-based compensation           (1,071  )    (1,085    )                  Amortization of intangible         -            (442      )                  assets                  Restructuring charges              (31     )    (2,601    )                  Loss on sale of assets            -           (1,314    )      Total Non-GAAP adjustments                    (1,102  )    (5,442    )                                                                       NON-GAAP TOTAL OPERATING EXPENSES             27,730      28,472                                                                       Reconciliation of GAAP to Non-GAAP Financial Measures Continued (In thousands, unaudited)                                                                                                                    For the nine months ended                                                  Jun. 27, 2014   Jun. 28, 2013                                                                   Income (Loss) from Operations:      GAAP income (loss) from operations             1,228        (6,767    )                                                                                    Share-based compensation           1,144        1,160                  Amortization of intangible         -            442                  assets                  Restructuring charges              31           2,601                  Loss on sale of assets            -           1,314           Total Non-GAAP adjustments                    1,175       5,517                                                                            NON-GAAP INCOME (LOSS) FROM OPERATIONS        2,403       (1,250    )                                                                   Income (Loss) before taxes & EBITDA:      GAAP income (loss) before taxes                1,830        (6,215    )                                                                                    Share-based compensation           1,144        1,160                  Amortization of intangible         -            442                  assets                  Restructuring charges              31           2,601                  Loss on sale of assets             -            1,314                  Foreign exchange, net             54          14              Total Non-GAAP adjustments                    1,229       5,531                                                                            NON-GAAP INCOME (LOSS) BEFORE TAXES           3,059       (684      )                  Depreciation                      1,331       1,015           NON-GAAP EBITDA                               4,390       331                                                                          Net Income (Loss):      GAAP Net Income (loss)                         1,564        (6,329    )                                                                                    Share-based compensation           1,144        1,160                  Amortization of intangible         -            442                  assets                  Restructuring charges              31           2,601                  Loss on sale of assets             -            1,314                  Foreign exchange, net              54           14                  Income tax effect of              (43     )    371                         reconciling items      Total Non-GAAP adjustments                    1,186       5,902                                                                            NON-GAAP NET INCOME (LOSS)                    2,750       (427      )                                                                   GAAP weighted average shares                        21,302       20,672 outstanding--basic GAAP weighted average shares                        21,506       20,672 outstanding--diluted                                                                   GAAP Net Income (Loss) per share - basic         $  0.07         ($0.31    )      Non-GAAP adjustments detailed above            0.06         0.29      NON-GAAP NET INCOME (LOSS) PER SHARE        $  0.13         ($0.02    )      (basic)                                                                   GAAP Net Income (Loss) per share - diluted       $  0.07         ($0.31    )      Non-GAAP adjustments detailed above            0.06         0.29      NON-GAAP NET INCOME (LOSS) PER SHARE        $  0.13         ($0.02    )      (diluted)                                                                              Planar Systems, Inc. Revenue by Product Line (In millions) (unaudited)                                                                                       Three months ended                 % Change                        Jun. 27,   Jun. 28,   Mar. 28,     vs.        vs. Prior                        2014      2013      2014        Prior     Quarter                                                           Year                                                                       Digital Signage        $  21.4    $  14.1    $  19.0      53    %    13     % Sales                                                                       Commercial &              22.5       23.4       22.1      -4    %    2      % Industrial Sales Desktop Monitors          9.3        9.2        7.7       1     %    21     % Rear Projection           4.6        3.5        4.1       29    %    12     % Cubes Touch Monitors            3.2        5.0        3.7       -37   %    -14    % High-end Home             1.2        2.2        1.7       -44   %    -29    % Custom Commercial &       4.2        3.3        4.7       27    %    -11    % Industrial Other                     -          0.2        0.2       -100  %    -100   %                                                                Total Sales            $  43.9   $  37.5   $  41.1      17    %   7      %                                                                               Planar Systems, Inc. Revenue by Product Line (In millions) (unaudited)                                                                                                       Nine months ended               % Change                                      Jun. 27, 2014  Jun. 28, 2013   vs. Prior                                                                      Year                                                                       Digital Signage Sales                $    59.3       $    44.4       34     %                                                                       Commercial & Industrial Sales             66.1            76.7       -14    % Desktop Monitors                          25.1            26.9       -7     % Rear Projection Cubes                     13.7            15.9       -14    % Touch Monitors                            10.1            15.2       -34    % High-end Home                             4.6             7.7        -41    % Custom Commercial & Industrial            12.2            7.9        54     % Electroluminescent^(1)                    -               2.3        -100   % Other                                     0.4             0.8        -45    %                                                                    Total Sales                          $    125.4     $    121.1      4      % Electroluminescent^(1)                   -             2.3        -100   % Total Sales without                  $    125.4     $    118.8      6      % 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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