Planar Reports 53% Spike In Digital Signage Display Sales
July 31, 2014 by Dave Haynes
The Beaverton, Oregon company (same locale as Nike) reported sales of digital signage products totaling $21.4 million in the third fiscal quarter of 2014, a 53 percent increase over the same period a year ago.
Total revenue increased 17 percent compared to the third quarter of fiscal 2013, as increases in sales of digital signage products more than offset the decline in sales of Commercial and Industrial (C&I) products. Sales of C&I products decreased 4 percent to $22.5 million compared with the same quarter a year ago. This decrease was primarily driven by lower sales of touch monitors and high-end home products, partially offset by higher sales of custom C&I displays and rear projection cubes.
The Company’s consolidated gross profit margin, as a percentage of sales (on a non-GAAP basis), was 24.4 percent in the third quarter of 2014, up from 21.7 percent in the third quarter of 2013 (see reconciliation table). The improvement in gross profit rate is the result of both an increase in sales of higher margin digital signage products 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.
Total operating expenses (on a non-GAAP basis) for the third quarter of 2014 were $9.6 million compared with $9.0 million in the same quarter last year (see reconciliation table), primarily driven by increases in sales and marketing expenditures.
The Company’s cash balance decreased $1.5 million sequentially to $11.5 million at the end of the third fiscal quarter of 2014 compared to the end of the second quarter of fiscal 2014. The primary drivers of working capital remained flat with the second fiscal quarter as reductions in inventory, which improved inventory turns to 5.1, and a small increase in accounts payable were roughly offset by an increase in accounts receivable. Cash declined in the quarter primarily as a result of payments made to a third party for certain components related to the EL business for which the buyer of the EL business, Beneq Products Oy, has agreed to repay the Company over time.
“Our third quarter results came in above our expectations for both revenue and profits, bolstered by strong growth in sales of our strategic focus area of digital signage products,” said Gerry Perkel, Planar’s president and chief executive officer. “As a result of the strong performance in the third quarter, coupled with a favorable outlook for the fourth quarter, we are increasing our estimates for revenue and non-GAAP EPS for the full fiscal year.”
Looking forward, the Company currently expects to see continued strong revenue for digital signage and custom C&I products in the fourth fiscal quarter of 2014, and therefore anticipates revenue in the range of $48 million to $50 million and non-GAAP income per share of $0.08 to $0.10. As a result, the Company has raised its estimates for the full fiscal year 2014, and currently expects revenue in the range of $173.4 million to $175.4 million and non-GAAP income per share of $0.21 to $0.23.
The company is profitable, versus a year ago when it lost $3.7 million in Q2.