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Planar Systems, Inc. (PLNR)

F1Q2011 Earnings Call Transcript

February 3, 2011 5:00 pm ET


Gerry Perkel - President and CEO

Scott Hildebrandt – CFO


John Nelson - State of Wisconsin Investment Board

Keith Kelt - Kelt Group



Good day ladies and gentlemen and welcome to the first quarter 2011 Planar Systems earnings conference call. My name is Jonathan and I will be your operator for today. At this time all participants are in a listen-only mode. We will be conducting a question-and-answer session after the beginning of remarks (Operator instructions). As a reminder this conference call is being recorded for replay purposes.

I'd now like to hand the call of to Mr. Gerry Perkel, President and CEO. Please precede, sir.

Gerry Perkel

Good afternoon and thank you for joining us for Planar's first 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, 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 to 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 pleased with our financial results this quarter. Revenue came in near the high-end of our guidance range and non-GAAP earnings per share exceeded our expectations for the quarter. Total sales for the first quarter for fiscal 2011 decreased 3% compared with the same period a year ago. We experienced lower sales of high-end home products, as well as declines in sales and some end-of-life business projectors in network desktop monitors.

Offsetting those declines were some nice growth in higher margin touch monitor product lines which are used in point of sale and retail applications. We also experienced excellent growth in some of our digital signage products, especially LCD video walls which I will touch on a bit later. In our custom and embedded product line we experienced the seasonal soft quarter and a small decline from last year following the normal seasonal buying pattern of some of our key custom signage customers, and the timing of purchases related to their various rollouts.

We did continue to capture new design wins in the first quarter and believe we will exceed double digit sequential growth in the second quarter in this product area. In our IT product lines, the first quarter was approximately flat with last year. We have been increasing our focus on the higher margin touch monitor portion of this line of products and as I mentioned earlier we did see some nice group from touch monitors. We are continuing to see opportunities to grow our touch product sales as we look forward.

Our high-end home product lines decline from last year. In the first quarter a years ago we began shipping our new LED projectors including some demo shipments, which did not repeat this year causing some of the decline year-on-year. We have announced a few new products recently which we believe will help our shipments in this product area in the second half of the fiscal year.

Our video wall product lines experienced over $1 million in growth over the first quarter a year ago. Our matrix LCD video wall products showed strong growth both sequentially and year-over-year. In addition we have new versions of this LCD-based video wall beginning to ship in the near future, some of which were announced earlier this week and expect continued opportunities for nice growth in this product area in the future.

If you look at our business from our overall digital offering perspective, we saw good growth in our digital signage products in the first quarter. In total digital signage sales grew 13% over the first quarter year ago and accounted for 14% of our sales. We currently offer; both standard and custom products that are used in a variety of digital signage applications and has been and will continue to be an area of increased focus for us.

We are seeing a broad and growing set of customers, applications and environments for these products. Our indoor digital signage sales today include substantial installations in sports arenas, universities, museums, airports and a wide variety of retail sales locations. Our front look significant opportunities for both standard and custom digital signage products is growing and we expect to land new customers in the next several months.

In addition to the digital signage markets mentioned above, we have also launched products aimed at addressing opportunities for outdoor custom digital signage. We have a number of trials to these products underway currently including some product shipments. We're particularly focused on the quick serve restaurant or QSR market as we think we have some differentiated solutions that can help enable the adoption of digital signage in the transition from static signs to digital menu boards in the QSR outdoor drive-thru lanes.

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