Planar Systems, Inc. (NASDAQ: PLNR), a worldwide leader in specialty display solutions, recorded sales of $44.7 million and GAAP net income per share of $0.01 in the third fiscal quarter ended June 25, 2010. On a Non-GAAP basis (see reconciliation table), net income per share was $0.03 in the third quarter of fiscal 2010.
“I am pleased with our overall financial results this quarter, as we were able to exceed our expectations, grow revenue and return to profitability,” said Gerry Perkel, Planar’s President and Chief Executive Officer. “We continue to be focused on driving revenue growth and improved profitability.”
SUMMARY OF KEY FINANCIAL INFORMATION
The following information summarizes some key financial measures for the Company at the end of the third quarter of fiscal 2010:
- Tangible Net Worth of $58.0 million, representing a tangible book value of approximately $3 per share outstanding for the third quarter
- Cash on hand totaled $32.3 million. The Company had no debt outstanding at the end of the quarter
- Positive Non-GAAP EBITDA of $1.3 million
- Net working capital totaled $54.5 million
- DSO of 48 days
- Current Ratio of 2.4 times
THIRD QUARTER FISCAL 2010 RESULTS
The Company’s total sales for the third quarter of fiscal 2010 increased 13 percent sequentially and 1 percent compared with the same period a year ago. The increase from the previous year was primarily driven by higher demand for the Company’s custom digital signage and embedded displays, LCD video wall systems and desktop monitors, partially offset by lower sales of high-end home and rear projection cube products. The Company experienced strong end-market demand, particularly from retailers, for custom digital signage products used in both in-store retail networks and outdoor kiosk applications. Conversely, poor economic conditions continued to negatively impact sales of high-end home products and demand for rear projection cubes has remained soft, with sales cycles for rear projection cubes further impacted by a continuing industry-wide transition from traditional lamp-based solutions to LED illumination.
The Company’s consolidated gross margins (on a Non-GAAP basis) were 27.8 percent in the third quarter of 2010 up over 4 percentage points sequentially but down from 28.8 percent compared with the third quarter of 2009 (see reconciliation table). The decrease in gross margin, as a percent of sales, from the previous year was primarily due to a less favorable product mix resulting from lower sales of higher margin command and control room rear projection cubes. Total operating expenses (on a Non-GAAP basis) increased 1 percent in the third quarter of 2010 compared with the same quarter a year ago (see reconciliation table). Increases in research and development and sales and marketing expenses were mostly offset by lower spending in general and administrative areas. Additional expenses for the period were the result of efforts to address new and emerging growth opportunities for the Company.
While some of the Company’s end markets continue to be negatively impacted by the macro economy and industry-wide product and technology transitions, the Company believes the relatively strong demand for custom signage and embedded displays will continue into the fourth fiscal quarter. As a result, the Company currently anticipates revenue in the range of $45-48 million in the fourth quarter of fiscal 2010 and Non-GAAP income between $0.02 and $0.04 per share. Net cash should be in the range of $30-$33 million at the end of the fiscal year. For fiscal year 2011, the Company expects to see growth in revenue and improved Non-GAAP EPS compared with fiscal 2010, with a seasonal pattern of stronger financial performance in the second half of the fiscal year when compared to the first half.
Results of operations and the business outlook will be discussed in a conference call today, July 29, 2010, beginning at 2:00 PM 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 August 29, 2010. 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.
Planar Systems, Inc (NASDAQ:PLNR) is a global leader of specialty display technology providing solutions for the world’s most demanding environments. Hospitals, space and military programs, utility and transportation hubs, shopping centers, banks, government agencies, businesses, and home theater enthusiasts all depend on Planar to provide superior performance when image experience is of the highest importance. Founded in 1983, Planar is headquartered in Oregon, USA, with offices, manufacturing partners, and customers worldwide. For more information, visit http://www.planar.com.
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