Planar Systems, Inc. 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, income per share was $0.03 in the second quarter of fiscal 2014.
Gerry Perkel, Planar’s President and Chief Executive Officer said, “The 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.”
Here is a 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, resulting in $2.8 million of Non-GAAP EBITDA in the first half of fiscal 2014
Introduced the 46” and 55” Simplicity Series digital signage displays of the Planar Simplicity Series
Showcased an 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
Total revenue increased 4 percent compared to the second quarter of fiscal 2013, as increases in sales of digital signage products 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.
Planar System’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. 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. Planar Systems has been expanding its line of digital signage products and leveraging higher volumes to improve 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.
Planar System’s cash balance decreased $0.2 million sequentially to $13.0 million at the end of the second fiscal quarter of 2014. Reductions in inventory were roughly offset by an increase in accounts receivable and a decrease in accounts payable, which improved inventory turns to 4.4.
Looking forward, for the full fiscal year 2014, Planar Systems believes it can achieve between 20 and 30 percent revenue growth for sales of digital signage products compared with fiscal year 2013. As a result, Planar expects revenue in the range of $165-175 million and estimates an increase of Non-GAAP income per share to $0.15 to $0.20. In the short-term, Planar expects to see continued 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, Planar 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.