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Planar Systems, Inc. (PLNR)
F4Q2010 Earnings Call Transcript
November 9, 2010 5:00 pm ET
Gerry Perkel – President & CEO
Scott Hildebrandt – VP & CFO
Jim Ricchiuti – Needham & Co.
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I’ll now like to turn the conference over to your host for today, Mr. Gerry Perkel, President and CEO. Sir, please proceed.
Good afternoon and thank you for joining you for Planar’s fourth quarter earnings conference call. With me this afternoon is Scott Hildebrandt, Planar’s Chief Financial Officer.
Before I begin, I do need to say that the press release we issued today contain forward-looking statements. On this conference call, we will comment on our strategic business and financial outlook, and make other forward-looking statements based on our current expectations, estimates, assumptions and projections. 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.
All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. I refer you to the press release we issued earlier today, and our periodic filings with the SEC for a description of factors that could cause actual results to differ materially from the results described in the forward-looking statements.
The forward-looking statements we make today speak only as of today and we do not undertake any obligation to update any such statements to reflect events or circumstances occurring after today.
With that behind us let me say that we are very pleased with our financial results this quarter as we were able to grow both revenue and profits compared to last year and exceed our expectations.
In addition, we were able to increase our cash position since the end of last fiscal year, while continuing to drive focused investments in product development, sales and marketing to better position the company for growth moving forward.
As we announced in our press release earlier today, we were able to deliver revenues of $48.2 million, representing growth of 8% sequentially and 7% when compared to the fourth quarter a year ago.
Our custom and embedded products had a very strong quarter with sales over $18 million, representing year-on-year growth of approximately 17%.
For fiscal year 2010, we captured 20 new design wins in our custom and embedded end-market products, the significant growth over the previous year.
Our IT display products also experienced strong performance with 15% year-on-year growth. We continue to see opportunity to improve our IT display revenues going forward and in particular look to enhance our touch monitor products and distribution capability.
In our high-end home market, we continue to find some challenging market conditions. Sales for these products fell 23% compared to the fourth quarter a year ago, as macroeconomic conditions continue to negatively impact our sales.
However, we have announced a number of new products that have received positive responses over the past several months, most notably, our new 3D home projector product offering.
Our video wall products showed continued improvement with 11% sequential growth. We began shipping our new LED-based rear projection cubes in the fourth quarter and see opportunity to drive further growth with these products going forward.
In addition, growth is anticipated with our super narrow bezel LCD video wall systems for use in digital signage and control room applications as we look into fiscal 2011.
With that, let me turn the call over to Scott to discuss our financial performance in a bit more detail.
Thanks, Gerry, and let me start with the income statement. As you are aware, we reported GAAP income per share of $0.06 and non-GAAP income per share of $0.07 earlier today for our fourth quarter of fiscal 2010.
Non-GAAP results exclude non-cash GAAP items such as intangibles amortization expense, foreign exchange gains and losses resulting from foreign-based translation of U.S. denominated assets, share-based compensation expense and some other tax items. A reconciliation of all these items are included in the supplementary tables within our press release.
Regarding our non-GAAP results, gross margin as a percent of sales decreased slightly to 26.6% compared to the fourth quarter of 2009. The decrease in gross margin percentage was primarily due to a less than favorable product market mix resulting from higher sales of lower margin desktop monitors and lower sales of higher margin command and control room rear projection cubes used in video wall applications, partially offset by reductions in overall labor and overhead spending.
Non-GAAP operating expenses for the fourth quarter of 2010 were roughly flat with the same period a year ago. Increases in research and development to fund some growth initiatives were offset by a lower overall spending in sales and marketing, as well as general and administrative areas.
Our non-GAAP effective tax rate was approximately 10% for the fourth quarter of fiscal 2010. As we discussed previously, we expect to have an effective tax rate of 10% in quarters where we have a non-GAAP profit before tax, and 37.5% in quarters where we report a non-GAAP tax loss.