Planar Systems Inc. (PLNR)
F3Q11 Earnings Call
August 11, 2011 5:00 p.m. ET
Gerry Perkel – President & CEO
Scott Hildebrandt – CFO
Jeff Martin – Roth Capital Partners
Jim Ricchiuti – Needham & Company.
John Nelson – State of Wisconsin Investment Board
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As a reminder, this conference is being recorded for replay purposes.
Now I’d like to hand the conference over to Mr. Gerry Perkel, President and CEO. Please proceed.
Good afternoon, and thank you for joining us for Planar’s third 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 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 that while our overall revenue growth was a bit lower than we expected, I am pleased with the continued progress we have made in growing sales of our Digital Signage products.
Overall, revenue came in at $45.7 million, slightly below the low end of our guidance range and represented 2% growth when compared with the third quarter of 2010. However, sales of Digital Signage products increased 35% compared with the same period a year ago.
Sales of Digital Signage products were fueled by continued strong demand for our Matrix LCD Video Wall products, which more then tripled compared with the third quarter a year ago. Non-GAAP earnings per share also came in slightly below our guidance estimate finishing at a loss of $0.01.
Let me now talk a bit about the various product lines in our business. In our Custom and Embedded product line, the third quarter of fiscal 2011 was not a strong as we had expected, as we experience some softening of demand from some of our ongoing OEM customers as the quarter progressed.
Sales of our Custom and Embedded products for the third quarter were $13.2 million, which represented a decline of 17% compared with the third quarter last year. While we see some of the conditions continuing over the next few quarters, we do currently expect to see growth in our Custom and Embedded product line next fiscal year compared with this year.
We also saw a weaker then expected quarter in our Enterprise IT product line. As the quarter progressed, demand for desktop monitor softened and while we did experienced some modest growth in our touch monitor products, it was enough to make up for the slowdown in desktop monitors. We believe this slowdown occurred broadly across the entire industry in our reseller channels.
Enterprise IT sales were $11.4 million for the third quarter of fiscal 2011, down 17% from the year before quarter. Our outlook for the fourth quarter of fiscal 2011 indicates some significant improvement sequentially in this product area.
The Video Wall product line was a real star of this past quarter from a performance point of view. Sales for video wall products reached $14.9 million, which represents 60% growth over the third quarter of the last fiscal year, a particular strength was our Clarity Matrix LCD Video Wall product line as I mentioned earlier.
We are seeing broad adoption for this innovative product as customers in a wide variety of industries are looking at us for large format indoor video wall applications. We began shipping the 55-inch LCD panel version of this product in the third quarter and orders have been strong. As we look forward, we see video wall product sales as a strong source of growth for the company.
Sales for high-end home products totaled $6.5 million in the third quarter, which represent 21% growth over the third quarter last year. We began shipping our award winning Runco D-73d, 3D LED projector as well the Vistage Series of Runco plasma products. Many of these products were shift as demo units to our dealer partners to help drive end user demand looking forward.
In addition, we plan to launch some additional new products at the upcoming CEDIA trade show in September. End user demand for high-end home offerings are still being somewhat negatively impacted by the weak housing market.
In summary, driving growth in our Digital Signage offering is a key part of our strategy to achieve growth overall for Planar. With the growing momentum in this category, new products we are working on, and additional sales and marketing resources focused on this area, we expect solid growth will continue in fiscal 2012 for these products.