Financials: Planar’s Fortunes Improving As Digital Signage Sales Climb
August 14, 2012 by Dave Haynes
Planar Systems latest financials show the company lost money during the last quarter, but its fortunes are improving as it gets more focused on standard products and less on specialty work.
The NASDAQ-listed company, based in the Portland, OR-area, lost 8 cents a share on sales of just shy of $45 million. That was up 19% over the previous quarter but actually down year to year by 2%.
In a press release, Planar reports:
Our fiscal third quarter financial results were better than our expectations, driven by our highest quarterly sales of digital signage products to date, said Gerry Perkel, Planars President and Chief Executive Officer. We also announced a number of new digital signage products during the quarter as we look to broaden our differentiated digital signage product portfolio.
Indeed the company has pushed into the market some nice, unique Mosaic video wall products, and have a good job of showing relevant commercial uses for smaller transparent LCDs.
You can read all the financial stuff here, but most of it takes an accounting designation to fully decode. As far as I can tell the company had a gross profit on sales of its products of $9.8 million, but operating costs were $11.7 million, which means the company lost $1.87 million.
Not good, but the numbers seem to be trending positively in general.
In the conference call, Perkel told analysts:
In the third quarter we experienced our highest quarterly sales of digital signage products to date. Digital signage product sales were $11.8 million, which represents 26% of total revenue for the quarter, 58% sequential growth and 9% year-on-year growth. Within our signage product portfolio we saw strong performance from our Matrix Tiled LCD offering which experienced year-on-year growth of 66%.
When looking at our year-on-year digital signage results, it is important to note the shift in the makeup of our digital signage product revenues. Our digital signage product revenues are made up of what we refer to as standard products and custom products. Custom products are just that. Customized versions of products designed for a specific customer, who typically will have large rollouts. Our standard products, while typically embodying a variety of innovative features are designed to be purchased and utilized by a variety of customers.
In the past 18 months or so, our strategy has shifted more towards building innovative differentiated standard products such as our Matrix product family where we can leverage our investments and drive volume cross larger customer sets. As a result our revenues become more and more standard product oriented in digital signage. When you look at the third quarter for instance, our 9% overall digital signage product signage product revenue year-on-year growth was made up over $4 million or 56% growth in our standard digital signage products, offset by a little over $3 million in decline, in custom digital signage products.
While we made from time-to-time have custom digital signage opportunities and revenue contributions, going forward we expect the majority of our digital signage product revenue to come from standard products and our overall digital signage product growth rate to increase as we no longer have the drag of the reduced custom signage product revenue to contend with.
And the third important part of driving that standard digital signage product growth going forward is the expansion of our product portfolio with innovative leading-edge products that appeal to a variety of customers.
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