|
|
 |
|
2/06/2007:Planar Reports First Fiscal Quarter 2007 Financial Results
|
BEAVERTON, Ore.--(BUSINESS WIRE)--Feb. 6, 2007--Planar Systems, Inc. (NASDAQ:PLNR), a worldwide leader in specialty display systems, recorded sales of $64.9 million and a GAAP loss per share of $0.08, in the first quarter ended December 29, 2006. On a Non-GAAP basis (see reconciliation table), net income per diluted share was $0.10 in the first quarter of 2007.
"I am pleased with our financial performance in the first quarter," said Gerry Perkel, Planar's President and Chief Executive Officer. "Our overall revenue growth and profitability exceeded our expectations and we are proceeding with the integration of the Clarity business. I remain very excited about the opportunity created by the addition of Clarity, both in terms of its impact on revenue growth and resources, as we move forward with our new specialty display strategic focus."
Sales of the Company's newly-created Control Room and Signage segment were $18.9 million in the first quarter. The results represent the first full quarter for this new business segment at Planar, subsequent to the September 2006 acquisition of Clarity Visual Systems. Control Room and Signage segment sales were favorably impacted by Clarity's historically strong calendar fourth quarter, and grew 18 percent over the same period in Clarity's previous year.
Industrial segment sales in the first fiscal quarter were $16.5 million, down 5 percent sequentially and down 19 percent compared with the first quarter of fiscal 2006. The Company has been investing in additional sales and marketing resources to create new design wins in order to counteract the decline of this segment as older designs move out of production. The opportunity funnel for this business has been growing steadily over the last several quarters and the Company believes this highly profitable segment will begin to grow by the end of fiscal 2007 and for the full fiscal year 2008.
The Medical segment of the Company recorded first quarter sales of $10.3 million, down 9 percent sequentially and down 10 percent compared with the first quarter a year ago. Sales of Diagnostic Imaging monitors experienced some weakness in the IT reseller channel in the first quarter following a strong fourth fiscal quarter. The Company believes that it will continue to maintain its current high market share in the IT reseller channel and gain momentum in the OEM channel throughout the fiscal year. As a result, the Company expects sales of Diagnostic Imaging monitors to grow in the second half of fiscal 2007.
Sales in the Company's Commercial segment were $19.2 million, down 4 percent sequentially and down 24 percent versus the first quarter a year ago. Pricing for desktop monitors stabilized somewhat during the quarter compared to the fourth quarter of fiscal 2006. However, pricing declined almost 30 percent compared with the first quarter of 2006 and was the primary cause of the year over year decline. As previously disclosed, the Company has modified its strategic focus in this segment, managing the business for profitability as it develops additional higher-margin product lines in this segment, including touch displays, projectors and other high-end home theater products.
Effective with the first quarter of fiscal 2007, the Company modified its business unit segment reporting to be consistent with the Company's internal management of its various business segments subsequent to the acquisition of Clarity Visual Systems. A complete definition of the Company's segments, including historical comparisons, will be included in its quarterly filings with the SEC.
Non-GAAP gross margins increased to 29.0 percent of sales in the first quarter, up from the 25.1 percent of sales recorded in the same quarter a year ago. The improvement in gross margin is a direct result of the Company's evolving business model, moving the overall product mix toward higher-margin, value-added specialty display products.
As previously disclosed, the Company recorded a $1.6 million restructuring charge during the first quarter to better align the legacy businesses with the Company's new strategic focus on specialty display markets.
The Company ended the first quarter with cash and short term investments of $40.7 million, down $7.6 million compared with the end of the fourth quarter. The change in cash was mostly due to the timing of working capital fluctuations within the quarter. At the end of the first quarter, the Company continues to have no debt.
BUSINESS OUTLOOK
The Company continues to view fiscal 2007 as a transition year, with improvement in profitability in the second half of the year as its various growth initiatives begin to show results and synergies from the Clarity acquisition begin exceeding ongoing integration costs. The Company has been working through the integration of the Clarity acquisition, and additional work remains relating to integrating business systems and global manufacturing, validating internal control processes over accounting transactions, export control, etc. The Company believes that these reviews and activities should be completed by the fourth quarter of the current fiscal year.
In the short term, the Company's expectations for the second quarter, ending March 30, 2007, are for sales of $57 million to $61 million and Non-GAAP net income per diluted share of $0.04 to $0.07, which excludes share-based compensation expense and acquisition-related GAAP charges such as amortization of identifiable intangible assets. Adjusting for these GAAP charges, the Company believes second quarter 2007 GAAP net loss per share will range from $0.06 to $0.09 (see reconciliation table).
Results of operations and the business outlook will be discussed in a conference call today, February 6, 2007, beginning at 2:00PM Pacific Time. The call can be heard via the Internet through a link on Planar's Web site, www.planar.com, or through numerous other investor sites, and will be available for replay until March 6, 2007. The Company intends to post on its Web site 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 leading provider of value-added display hardware and software for a variety of specialty display markets worldwide. Hospitals, shopping centers, banks, government agencies, transportation businesses, and other discriminating consumers depend on Planar to provide unique display-based solutions to exacting requirements leveraging its operational excellence, technical innovation, and go-to-market capabilities. 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:
The statements by Gerry Perkel regarding improved opportunities after the acquisition of Clarity and other comments such as those regarding expectations for growth in the Industrial segment in 2007 and 2008, market share and second half growth expectations in the digital imaging segment as well as the statements in the Business Outlook section above are forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. Such statements are based on current expectations, estimates and projections about the Company's business. Words such as expects, anticipates, intends, plans, believes, sees, estimates and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. Actual results could vary materially from the description contained herein due to many factors including the possibility that the acquisition of Clarity Visual Systems will create difficulties in the integration of the operations, employees, strategies, and technologies. In addition, actual results could vary materially based on changes or slower growth in the digital signage and/or command and control display markets; the potential inability to realize expected benefits and synergies; domestic and international business and economic conditions; changes in the flat-panel monitor industry; unexpected difficulties in penetrating the Home Theater market; changes in customer demand or ordering patterns; changes in the competitive environment including pricing pressures or technological changes; technological advances; shortages of manufacturing capacity from our third-party manufacturing partners; final settlement of contractual liabilities; balance sheet changes related to updating certain estimates required for the purchase accounting treatment of the Clarity acquisition; future production variables impacting excess inventory and other risk factors listed from time to time in the Company's Securities and Exchange Commission (SEC) filings. 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.
Planar Systems, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(unaudited)
Three months ended
Dec. 29, 2006 Dec. 30, 2005
------------- -------------
Sales $ 64,909 $ 57,149
Cost of sales 46,493 42,857
--------- ---------
Gross profit 18,416 14,292
Operating expenses:
Research and development, net 3,142 2,533
Sales and marketing 9,252 5,214
General and administrative 5,413 4,067
Amortization of intangible assets 1,650 147
Acquisition related costs 322 ---
Impairment and restructuring charges 1,625 347
--------- ---------
Total operating expenses 21,404 12,308
--------- ---------
Income (loss) from operations (2,988) 1,984
Non-operating income (expense):
Interest, net 599 519
Foreign exchange, net 189 (281)
Other (18) (11)
--------- ---------
Net non-operating income 770 227
Income (loss) before income taxes (2,218) 2,211
Provision (benefit) for income taxes (832) 752
--------- ---------
Net income (loss) $ (1,386) $ 1,459
========= =========
Basic net income (loss) per share $ (0.08) $ 0.10
Average shares outstanding - basic 17,133 14,782
Diluted net income (loss) per share $ (0.08) $ 0.10
Average shares outstanding - diluted 17,133 14,845
Planar Systems, Inc.
Consolidated Balance Sheets
(In thousands)
Dec. 29, 2006 Sept. 29, 2006
------------- --------------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 40,738 $ 48,318
Accounts receivable 35,156 31,961
Inventories 52,342 49,524
Other current assets 14,362 13,837
------------ -------------
Total current assets 142,598 143,640
Property, plant and equipment, net 10,468 10,880
Goodwill 52,066 51,996
Intangible assets 30,815 32,465
Other assets 6,751 6,021
------------ -------------
$ 242,698 $ 245,002
============ =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 19,523 $ 25,674
Current portion of capital leases 503 493
Deferred revenue 5,232 6,326
Other current liabilities 33,712 30,237
------------ -------------
Total current liabilities 58,970 62,730
Capital leases, less current portion 1,065 1,044
Other long-term liabilities 14,271 13,653
------------ -------------
Total liabilities 74,306 77,427
Shareholders' equity:
Common stock 162,985 161,538
Retained earnings 8,770 10,270
Accumulated other comprehensive loss (3,363) (4,233)
------------ -------------
Total shareholders' equity 168,392 167,575
------------ -------------
$ 242,698 $ 245,002
============ =============
Planar Systems, Inc.
Reconciliation of GAAP to Non-GAAP Results of Operations
(In thousands, except per share amounts)
(unaudited)
Three months ended Dec. 29, 2006
Adjustments
-------------------------------
Share-
Clarity based
GAAP Acquisition Comp. Other Non-GAAP
-------- ----------- -------- -------- --------
Sales $64,909 $ 34 (A) $ $ $64,943
Cost of sales 46,493 (234)(B) (103) 46,156
------- ------- ------- -------- -------
Gross profit 18,416 268 103 18,787
Operating expenses:
Research and
development, net 3,142 (111) 3,031
Sales and
marketing 9,252 (496) 8,756
General and
administrative 5,413 (405) 5,008
Amortization of
intangible assets 1,650 (1,503) (147) ---
Acquisition related
costs 322 (322) ---
Impairment and
restructuring
charges 1,625 (1,625) ---
------- ------- ------- ------- -------
Total operating
expenses 21,404 (1,825) (1,012) (1,772) 16,795
Income (loss) from
operations (2,988) 2,093 1,115 1,772 1,992
Non-operating income
(expense):
Interest, net 599 599
Foreign exchange,
net 189 189
Other, net (18) (18)
------- ------- ------- ------- -------
Net non-
operating
income: 770 770
Income (loss) before
income taxes (2,218) 2,093 1,115 1,772 2,762
Provision (benefit)
for income taxes (832) 785 418 664 1,035
------- ------- ------- ------- -------
Net income (loss) $(1,386) $ 1,308 $ 697 $ 1,108 $ 1,727
======= ======= ======= ======= =======
Basic income (loss)
per share $ (0.08) $ 0.10
Average shares
outstanding - basic 17,133 17,133
Diluted income
(loss) per share $ (0.08) $ 0.10
Average shares
outstanding -
diluted 17,133 17,665
(A) Non-cash effect for mark down of Clarity deferred revenue to fair
value
(B) Non-cash expense for Clarity inventory step up adjustment to fair
value
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 the effects of the acquisition of Clarity Visual Systems,
share-based compensation and the requirements of SFAS No. 123R,
"Share-based Payment" ("123R") and other adjustments. The Non-GAAP
financial measures used by management and disclosed by the company
exclude the income statement effects of purchase accounting
adjustments and integration costs associated with the acquisition of
Clarity Visual Systems, all forms of share-based compensation,
impairment and restructuring charges and the amortization of
intangible assets from previous acquisitions. 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.
Planar Systems, Inc.
Reconciliation of GAAP to Non-GAAP Results of Operations
(In thousands, except per share amounts)
(unaudited)
Quarter ended Dec. 30, 2005
Adjustments
------------------------------
Clarity Share-based
GAAP Acquisition Comp. Other Non-GAAP
-------- ----------- ----------- ------ -----------
Sales $57,149 $ $ $ $ 57,149
Cost of sales 42,857 (41) 42,816
------- ----------- ---------- ------ ----------
Gross profit 14,292 41 14,333
Operating expenses:
Research and
development, net 2,533 (31) 2,502
Sales and
marketing 5,214 (115) 5,099
General and
administrative 4,067 (513) 3,554
Amortization of
intangible assets 147 (147) ---
Impairment and
restructuring
charges 347 (347) ---
------- ----------- ----------- ----- ----------
Total operating
expenses 12,308 (659) (494) 11,155
Income from
operations 1,984 700 494 3,178
Non-operating
income (expense):
Interest, net 519 519
Foreign exchange,
net (281) (281)
Other, net (11) (11)
------- ----------- ----------- ------ ----------
Net non-
operating
income: 227 227
Income before
income taxes 2,211 700 494 3,405
Provision for
income taxes 752 238 168 1,158
------- ----------- ----------- ----- ----------
Net income $ 1,459 $ $ 462 $ 326 $ 2,247
======= =========== ========== ===== ==========
Basic net income
per share $ 0.10 $ 0.15
Average shares
outstanding -
basic 14,782 14,782
Diluted net income
per share $ 0.10 $ 0.15
Average shares
outstanding -
diluted 14,845 14,845
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 the effects of the acquisition of Clarity Visual Systems,
share-based compensation and the requirements of SFAS No. 123R,
"Share-based Payment" ("123R") and other adjustments. The Non-GAAP
financial measures used by management and disclosed by the company
exclude the income statement effects of purchase accounting
adjustments and integration costs associated with the acquisition of
Clarity Visual Systems, all forms of share-based compensation,
impairment and restructuring charges and the amortization of
intangible assets from previous acquisitions. 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.
Planar Systems, Inc.
Reconciliation of GAAP to Non-GAAP Guidance
Net Income/(Loss) per share
(unaudited)
Estimates for the Quarter
Ended
March 30, 2007
Low End High End
------------ ------------
GAAP net loss per share $ (0.09) $ (0.06)
Amortization of intangible assets 0.06 0.06
Share-based compensation 0.05 0.05
Acquisition related costs 0.02 0.02
Purchase accounting adjustments 0.00 0.00
---------- -----------
Non-GAAP net income per diluted share $ 0.04 $ 0.07
========== ===========
Both GAAP and Non-GAAP estimates assume a tax rate of 37.5%
GAAP net loss per share assumes 17.3 million average basic shares
outstanding
Non-GAAP net income per share assumes 18.0 million average diluted
shares outstanding
CONTACT: Planar Systems, Inc.
MEDIA CONTACTS:
Pippa Edelen, 503-748-6983
pippa.edelen@planar.com
or
GolinHarris
Elaine Ordiz, 213-438-8710
eordiz@golinharris.com
or
Planar Systems, Inc.
INVESTOR CONTACTS:
Ryan Gray, 503-748-8911
ryan.gray@planar.com
SOURCE: Planar Systems, Inc.
|
|
|
|