A 57% increase in digital signage product sales to a record $29.8 million has helped drive non-GAAP net income up $2.7 million to $3.8 million at Beaverton, Oregon-based Planar Systems Inc.’s first quarter financial results, ended Dec. 26, 2014.
GAAP net income was up 390% to $3.1 million. Non-GAAP EBITDA (earnings before interest, taxes, depreciation, amortization, and amortization of non-cash stock-based compensation) increased 157% to $4.3 million.
During Q1, Planar expanded its award-winning line of Clarity Matrix LCD Video Wall Systems with two new ultra-narrow bezel LCD models, bringing superior visual performance to an even wider variety of video wall applications. It also collaborated with BrightSign, digital signage media player company, to create what is believed to be the world’s tallest Planar Mosaic Architectural Video Wall at a luxury hotel in Florida. And it also introduced the Planar UltraRes 98” Touch LCD display, the industry’s largest 4K touch display.
Altogether for fiscal Q1, total revenue increased 38% to $55.8 million from $40.5 million in the first quarter of fiscal 2014. Consolidated gross profit margin as a percentage of sales (on a non-GAAP basis) was 26%, an improvement from 24% in the first quarter of fiscal 2014). The increase was due to lower labor and overhead expenses related to improved capacity utilization, as well as a change in the mix of products sold towards higher margin digital signage products.
Non-GAAP operating expenses totaled $10.8 million compared to $8.8 million in the same quarter last year , an increase primarily due to higher sales and marketing expenses.
“During our first quarter of fiscal 2015, we continued to make substantial progress in our strategic transformation into a higher growth, more profitable company,” says Gerry Perkel, Planar president and CEO. “In fact, revenue generated by digital signage product sales hit a new record high, as well as crossed over to more than 50% of total revenue for the first time. This record level of digital signage product sales was driven by continued strong demand for our leading digital signage product offerings, which includes our suite of LCD video walls and large format and 4K LCD displays.
“Our strategy has been to focus on the fast-growing market for digital signage products and during the quarter we expanded our selling and marketing resources in order to better capitalize on the strong industry momentum. This included strengthening our relationships with key value-added resellers and adding new resellers to our network. Along with producing the award-winning products and ‘industry firsts’, like our UltraRes 98” Touch LCD display, these relationships have become an integral part of our differentiated growth strategy to capture market share and drive revenue growth.”
Planar expects to see continued strong year-over-year revenue growth from its digital signage and custom commercial and industrial products in the second quarter of fiscal 2015. The company expects revenue to follow its historical seasonal pattern of sequential decline and as a result anticipates revenue in its second fiscal quarter ending March 27, 2015 to range between $47 million and $50 million, which would represent an increase of 14% to 22% compared to the same year-ago quarter.