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Spursh Parikh
www.sererra.com
In many cases, the end of the year gives you time to step back and take stock of the last 12 months. This is when many of us take a hard look at what worked and what did not, complete performance reviews, and formulate plans for the coming year. For me, it is all of those things plus a time when I u...
Planar Systems, Inc. (NASDAQ: PLNR), a worldwide leader in specialty
display solutions, recorded sales of $44.2 million and GAAP loss per
share of $0.07 in its first fiscal quarter ended December 28, 2012. On a
Non-GAAP basis (see reconciliation table), income per share was $0.05 in
the first quarter of fiscal 2013.
“The first quarter of 2013 represented a significant step forward in our
strategic transformation,” said Gerry Perkel, Planar’s President and
Chief Executive Officer. “Not only were we able to successfully close
the sale our EL product line, but we also experienced record sales
levels of digital signage products as well as our highest level of
quarterly Non-GAAP profitability in almost 2 years.”
SUMMARY OF BUSINESS HIGHLIGHTS
Closed the sale of the Electroluminescent (EL) product line to Beneq
Products OY for a $6.5 million base purchase price, of which $3.9
million was paid in cash at closing and $2.6 million was paid in the
form of a promissory note. The transaction terms also provide for up
to $3.5 million in possible additional cash consideration which can be
earned in calendar years 2013, 2014, 2015 based upon the EL product
line achieving certain financial results
Began shipping the Planar® Helium™ Series, a family of multi-touch
desktop monitors designed to bring the touch experience alive when
paired with a Microsoft® Windows® 8 device such as an Ultrabook™,
tablet or desktop PC
Sales of Digital Signage products and Touch Monitors totaled $21.8
million and represented 49% of total revenue (52% excluding EL product
revenues) for the first fiscal quarter of 2013
Signed the contract and received purchase orders for a new custom
commercial and industrial design win with revenue totaling
approximately $10 million over 2 years, and the potential for
additional follow-on business, with production expected to begin in
the second half of fiscal 2013
FIRST QUARTER FISCAL 2013 RESULTS
The Company’s total revenues increased 7 percent compared to the fourth
quarter of fiscal 2012 and declined 7 percent compared to the first
quarter of fiscal 2012. As previously announced, the Company sold the
assets comprising its Electroluminescent (EL) product line during the
quarter. Excluding revenue associated with EL products, the Company’s
total revenue increased 14 percent compared to the fourth quarter of
fiscal 2012 and was approximately flat with the first quarter of fiscal
2012. Sales of Digital Signage products totaled $16.9 million in the
first quarter of 2013, a 55 percent increase from the same period a year
ago. This increase was driven by higher sales of tiled LCD systems and
signage monitors, which increased 45 percent and 123 percent
respectively compared with the same period a year ago. The Company
continues to experience increased demand for its digital signage
products as both the number of customers as well as the product
portfolio have expanded. Sales of Commercial and Industrial (C&I)
products declined 26 percent (20 percent without EL) to $27.3 million
($25.0 million without EL) compared with the same quarter a year ago.
This decrease was primarily driven by lower sales of EL displays,
rear-projection cubes, custom commercial and industrial displays, and
high-end home products, partially offset by increased sales of touch
monitors which grew 38 percent compared to the same period a year ago.
The Company’s consolidated gross profit margin, as a percentage of
sales, (on a Non-GAAP basis) was 25.0 percent in the first quarter of
2013, up from 22.1 percent in the first quarter of 2012 (see
reconciliation table). The increase in gross profit margin, as a percent
of sales, from the previous year was primarily due to an inventory
charge for certain end-of-life-products recorded in the prior year which
did not repeat in the first quarter of 2013.
Total operating expenses (on a Non-GAAP basis) for the first quarter of
2013 decreased $3.4 million, or 25 percent, to $10.1 million compared
with the same quarter a year ago, as expenses declined in all functions
as a result of cost reduction measures implemented in fiscal 2012
intended to lower the overall breakeven point for the Company.
The Company’s cash balance increased $1.5 million sequentially to $19.3
million at the end of the first fiscal quarter of 2013 compared to the
end of the fourth quarter of fiscal 2012. The increase in cash was
primarily caused by the proceeds received as a result of the EL product
line asset sale and an increase in accounts payable, partially offset by
increases in inventory and accounts receivable.
BUSINESS OUTLOOK
Looking forward, the Company remains committed to transforming its
business to be more focused on markets that are growing, such as digital
signage, and becoming profitable. The Company has taken actions over the
last 12 months to reduce overall expense levels (and thus lower the
breakeven point), shed a non-strategic product line and, generally,
focus more of its resources on growing products/markets. Moving forward,
the Company expects to see revenue growth in Digital Signage and Touch
products more than offset declines in more mature product lines. As a
result, the Company expects overall revenue growth of 5 to 10 percent
for fiscal year 2013, excluding EL product line revenue. Additionally,
the Company expects to achieve Non-GAAP profitability in the second half
of fiscal 2013, as well as, for the full fiscal year of 2013. However,
in the near term, the Company expects to follow its normal seasonal
pattern of lower sequential revenue in the second quarter of fiscal
2013. As a result, the Company currently anticipates revenue in the
range of $34 to $37 million and a Non-GAAP loss of $0.09 to $0.04 in the
second fiscal quarter of 2013. Total Company revenue, excluding EL
product line revenue, was $32.4 million in the second fiscal quarter of
2012.
Results of operations and the business outlook will be discussed in a
conference call today, February 6, 2013, beginning at 2:00 PM Pacific
Time. The call can be heard via the Internet through a link on Planar’s
website, www.planar.com,
or through numerous other investor sites, and will be available for
replay until March 6, 2013. The Company intends to post on its website a
transcript of the prepared management commentary from the conference
call shortly after the conclusion of the call.
ABOUT PLANAR
Planar Systems Inc. (NASDAQ: PLNR) is a global leader in digital display
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 solutions are used by the world’s
leading organizations in applications ranging from digital signage to
simulation and from interactive kiosks to large-scale data
visualization. Founded in 1983, Planar is headquartered in Oregon, USA,
with offices, manufacturing partners, and customers worldwide. For more
information, visit www.planar.com.
“Safe Harbor” Statement under the Private Securities Litigation Reform
Act of 1995: This release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995
relating to Planar’s business operations and prospects, including
statements relating to the Company’s expected levels of revenue, revenue
growth and Non-GAAP earnings/profitability for the second quarter,
second half, and full fiscal year in 2013, and the other statements made
under the heading “Business Outlook,”. These statements are made
pursuant to the safe harbor provisions of the federal securities laws.
These and other forward-looking statements, which may be identified by
the inclusion of words such as “expects,” “anticipates,” “intends,”
“plans,” “believes,” “seeks,” “estimates,” “goal” and variations of such
words and other similar expressions, are based on current expectations,
estimates, assumptions and projections that are subject to change, and
actual results may differ materially from the forward-looking
statements. These statements are not guarantees of future performance
and involve certain risks and uncertainties that are difficult to
predict. Many factors, including the following, could cause actual
results to differ materially from the forward-looking statements: poor
or further weakened domestic and international business and economic
conditions; changes or continued reductions in the demand for products
in the various display markets served by the Company; any delay in the
timing of customer orders or the Company’s ability to ship product upon
receipt of a customer order; the extent and timing of any additional
expenditures by the Company to address business growth opportunities;
any inability to reduce costs or to do so quickly enough, in either
case, in response to reductions in revenue; adverse impacts on the
Company or its operations relating to or arising from any inability to
fund desired expenditures, including due to difficulties in obtaining
necessary financing; changes in the flat-panel monitor industry; changes
in customer demand or ordering patterns; changes in the competitive
environment including pricing pressures or the ability to keep pace with
technological changes; technological advances; shortages of
manufacturing capacity from the Company’s third-party manufacturing
partners or other interruptions in the supply of components the Company
incorporates in its finished goods including as a result of natural
disasters like the recent earthquakes and tsunami in Japan; future
production variables resulting in excess inventory and other risk
factors listed from time to time in the Company’s periodic filings with
the Securities and Exchange Commission (SEC). The forward-looking
statements contained in this press release speak only as of the date on
which they are made, and the Company does not undertake any obligation
to update any forward-looking statement to reflect events or
circumstances after the date of this press release.
Note Regarding the Use of Non-GAAP Financial
Measures:
In addition to disclosing financial results calculated in accordance
with U.S. generally accepted accounting principles (GAAP), the Company's
earnings release contains Non-GAAP financial measures that exclude
share-based compensation and the requirements of Topic 718 of the FASB
Accounting Standards CodificationTM, “Compensation-Stock
Compensation”. The Non-GAAP financial measures also exclude impairment
and restructuring charges, the amortization of intangible assets related
to previous acquisitions, various tax charges including the valuation
allowance against deferred tax assets, the gain or loss on foreign
currency due to the non-cash nature of the charge, and various other
adjustments. The Non-GAAP financial measures disclosed by the Company
should not be considered a substitute for, or superior to, financial
measures calculated in accordance with GAAP, and the financial results
calculated in accordance with GAAP and reconciliations to those
financial statements should be carefully evaluated. The Non-GAAP
financial measures used by the Company may be calculated differently
from, and therefore may not be comparable to, similarly titled measures
used by other companies. The Company has provided reconciliations of the
Non-GAAP financial measures to the most directly comparable GAAP
financial measures.
Planar Systems, Inc.
Consolidated Statement of Operations
(In thousands, except per share amounts)
(unaudited)
Three months ended
Dec. 28, 2012
Dec. 30, 2011
Sales
$
44,175
$
47,708
Cost of Sales
33,166
37,197
Gross Profit
11,009
10,511
Operating Expenses:
Research and development, net
2,027
2,719
Sales and marketing
5,060
6,937
General and administrative
3,413
4,079
Amortization of intangible assets
147
175
Restructuring
194
-
Loss on sale of assets
1,491
-
Total Operating Expenses
12,332
13,910
Income (Loss) from operations
(1,323
)
(3,399
)
Non-operating income (expense):
Interest, net
17
-
Foreign exchange, net
(108
)
426
Other, net
115
42
Net non-operating income (expense)
24
468
Income (loss) before taxes
(1,299
)
(2,931
)
Provision (benefit) for income taxes
183
265
Net Income (loss)
$
(1,482
)
$
(3,196
)
Net Income (loss) per share - basic
($0.07
)
($0.16
)
Net Income (loss) per share - diluted
($0.07
)
($0.16
)
Weighted average shares outstanding - basic
20,473
19,822
Weighted average shares outstanding - diluted
20,473
19,822
Planar Systems, Inc.
Consolidated Balance Sheets
(In thousands)
(unaudited)
Dec. 28, 2012
Sept. 28, 2012
ASSETS
Cash
$
19,255
$
17,768
Accounts receivable, net
21,392
18,604
Inventories
33,643
31,984
Other current assets
3,595
2,829
Total current assets
77,885
71,185
Property, plant and equipment, net
2,649
3,554
Intangible assets, net
417
565
Other assets
10,057
6,580
$
91,008
$
81,884
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable
22,274
11,686
Current portion of capital leases
646
449
Deferred revenue
1,941
1,659
Other current liabilities
14,546
15,915
Total current liabilities
39,407
29,709
Capital leases, less current portion
756
545
Other long-term liabilities
4,973
5,111
Total liabilities
45,136
35,365
Common stock
185,109
184,556
Retained earnings (deficit)
(136,313
)
(134,751
)
Accumulated other comprehensive loss
(2,924
)
(3,286
)
Total shareholders' equity
45,872
46,519
$
91,008
$
81,884
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, unaudited)
For the three months ended
Dec. 28, 2012
Dec. 30, 2011
Gross Profit:
GAAP Gross Profit
11,009
10,511
Share-based Compensation
25
13
Total Non-GAAP adjustments
25
13
NON-GAAP GROSS PROFIT
11,034
10,524
NON-GAAP GROSS PROFIT PERCENTAGE
25.0
%
22.1
%
Research and Development:
GAAP research and development expense
2,027
2,719
Share-based Compensation
(47
)
(39
)
Total Non-GAAP adjustments
(47
)
(39
)
NON-GAAP RESEARCH AND DEVELOPMENT EXPENSE
1,980
2,680
Sales and Marketing:
GAAP sales and marketing expense
5,060
6,937
Share-based Compensation
(69
)
(25
)
Total Non-GAAP adjustments
(69
)
(25
)
NON-GAAP SALES AND MARKETING EXPENSE
4,991
6,912
General and Administrative:
GAAP General and Administrative Expense
3,413
4,079
Share-based Compensation
(304
)
(205
)
Total Non-GAAP adjustments
(304
)
(205
)
NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSE
3,109
3,874
Operating Expenses:
GAAP Total Operating Expenses
12,332
13,910
Share-based Compensation
(420
)
(269
)
Amortization of intangible assets
(147
)
(175
)
Restructuring charges
(194
)
-
Loss on sale of assets
(1,491
)
-
Total Non-GAAP adjustments
(2,252
)
(444
)
NON-GAAP TOTAL OPERATING EXPENSES
10,080
13,466
Reconciliation of GAAP to Non-GAAP Financial Measures Continued
(In thousands, unaudited)
For the three months ended
Dec. 28, 2012
Dec. 30, 2011
Income (Loss) from Operations:
GAAP income (loss) from operations
(1,323
)
(3,399
)
Share-based Compensation
445
282
Amortization of intangible assets
147
175
Restructuring charges
194
-
Loss on sale of assets
1,491
-
Total Non-GAAP adjustments
2,277
457
NON-GAAP INCOME (LOSS) FROM OPERATIONS
954
(2,942
)
Income (Loss) before taxes & EBITDA:
GAAP income (loss) before taxes
(1,299
)
(2,931
)
Share-based Compensation
445
282
Amortization of intangible assets
147
175
Loss on sale of assets
1,491
-
Restructuring charges
194
-
Foreign Exchange, net
108
(426
)
Total Non-GAAP adjustments
2,385
31
NON-GAAP INCOME (LOSS) BEFORE TAXES
1,086
(2,900
)
Depreciation
310
564
NON-GAAP EBITDA
1,396
(2,336
)
Net Income (Loss):
GAAP Net Income (loss)
(1,482
)
(3,196
)
Share-based Compensation
445
282
Amortization of intangible assets
147
175
Loss on sale of assets
1,491
-
Restructuring charges
194
-
Foreign Exchange, net
108
(426
)
Income tax effect of reconciling items
73
1,353
Total Non-GAAP adjustments
2,458
1,384
NON-GAAP NET INCOME (LOSS)
976
(1,812
)
GAAP weighted average shares outstanding--basic
20,473
19,822
NON-GAAP weighted average shares outstanding--diluted
20,679
19,822
GAAP Net Income (Loss) per share - basic
($0.07
)
($0.16
)
Non-GAAP adjustments detailed above
0.12
0.07
NON-GAAP NET INCOME PER SHARE (basic)
$
0.05
($0.09
)
GAAP Net Income (Loss) per share - diluted
($0.07
)
($0.16
)
Non-GAAP adjustments detailed above
0.12
0.07
NON-GAAP NET INCOME PER SHARE (diluted)
$
0.05
($0.09
)
Planar Systems, Inc.
Revenue by Product Line
(In millions)
(unaudited)
Three months ended
% Change vs.
Dec. 28, 2012
Dec. 30, 2011
Sep. 28, 2012
Prior Year
Prior Quarter
Digital Signage Sales
$
16.9
$
10.9
$
13.6
55
%
24
%
Commercial & Industrial Sales
27.3
36.8
27.8
-26
%
-2
%
Desktop Monitors
8.7
9.6
7.8
-9
%
11
%
Rear Projection Cubes
6.1
9.0
4.2
-32
%
44
%
Touch Monitors
4.9
3.5
5.2
38
%
-5
%
High-end Home
3.0
5.3
3.2
-43
%
-6
%
Custom Commercial & Industrial
2.0
3.0
2.3
-34
%
-13
%
Electroluminescent(1)
2.3
5.7
4.5
-60
%
-49
%
Other
0.3
0.7
0.6
-52
%
-38
%
Total Sales
$
44.2
$
47.7
$
41.4
-7
%
7
%
Electroluminescent(1)
2.3
5.7
4.5
-60
%
-49
%
Total Sales without Electroluminescent
$
41.9
$
42.0
$
36.9
0
%
14
%
(1) In the first quarter of 2013, the Company sold the
assets and liabilities related to the Electroluminescent product
line.
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Cloud computing is the game changer for the life sciences industry, according to an article on PharmaBiz.com.
Globally, pharma majors are deploying cloud technology because it provides data security, compliance and transparency, according to Vikram Anand, associate vice president, clo...
There are only two certainties in life – death and taxes, said Benjamin Franklin. What the theorist and founding father clearly meant was: There are only three certainties in life – death and taxes and information security changeability.
In the constantly changing dynamic world of ma...
Todd Bradley, the former Palm CEO who’s been running HP’s PC unit since 2005 and added printing last year when the Printing and Personal Systems (PPS) organization was formed, has apparently been pushed aside.
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