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Planar Systems Inc. (PLNR)
Q2 2011 Earnings Call
May 3, 2011 5:00 PM ET
Gerry Perkel – President and CEO
Scott Hildebrandt – Chief Financial Officer
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I’d now like to turn the presentation over to your host for today, Mr. Gerry Perkel. Sir, you may proceed.
Good afternoon. And thank you for joining us for Planar’s second 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 contained 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 other 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 our earnings 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, we are pleased with our financial results this quarter. Both revenue and non-GAAP earnings per share exceeded our guidance by significant amounts as we experienced stronger than anticipated demand for our products.
Sales growth for quarter was 21%, compared to the second quarter a year ago, which is the highest level of organic growth we’ve experienced in almost eight years.
In addition, we saw sales growth in all three of our geographic regions. Based on that strong sales performance and a favorable mix of the products sold, non-GAAP gross profit margins were also at their highest level in almost eight years at 29.2%.
The combination of our stronger sales and strong non-GAAP gross profits enabled us to deliver $0.07 of non-GAAP earnings per share, which is well above our zero to $0.02 guidance. It’s great to see all of the hard work of our dedicated employees begin to pay some dividends in the form of growth and profit improvements.
Let me now talk a bit about the various product lines in our business. First, as you may recall, we have spoken about our focus on opportunities for Digital Signage products for some time now. We believe that the market dynamics are such that we can over time create some significant growth for our products in this space and in the second quarter, our Digital Signage products had a very strong showing.
Sales of our Digital Signage products grew 68%, compared to the second quarter a year ago and represented 24% of our total sales. Both custom and standard Digital Signage products grew in the second quarter, compared with the same quarter last year.
The largest contributor to our Digital Signage product sales growth in the second quarter was our Clarity Matrix LCD Video Wall products. In the second quarter, sales of this product category more than doubled when compared with the second quarter last year.
The Clarity Matrix LCD Video Wall family of products is a highly versatile display system with applications in retail, airports, sports arenas, malls, museum and other public venues. Inspired by the capabilities of these display systems, we are seeing both large-scale and small-scale adoption of Clarity Matrix with large scale opportunities representing multi-million dollar projects with rollout that could span several years.
In addition to the strong sales growth, we also launched a number of new products aimed at the Digital Signage market including a 55-inch version of our Clarity Matrix LCD Video Wall system, which features full 1080p resolution LED backlighting, 5.7 millimeter image-to-image gap and continues the Matrix product line’s industry leading design including an ADA compliant thin profile with a mere 3.6-inch depth.
We also announced the LC32 and LC46 series outdoor Digital Signage modules, an ultra-thin indoor signage display, a zero bezel multi-touch LCD monitor and an 82-inch slim large format LCD display.
These and other signage offerings to come will complement additions in our sales and marketing resources that we are making and also highlight our capabilities as an innovative unique supplier of Digital Signage products as we look to grow in this category in the future.
In addition to the Digital Signage product activity, I’ve already mentioned, we also announced earlier today that we have formed a strategic alliance with UniStructures Incorporated to pursue the emerging display opportunity within the Quick Serve Restaurant or QSR market and other commercial drive-through opportunities.
As drive-through operators look to improve efficiency, reduce costs, provide revenue uplift and promote overall brand and image, more and more they are looking to Digital Signage as a compelling offering. Planar and UniStructures are partnering to provide a complete solution with rugged display – Digital Signage displays for the drive-through.