SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10–Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Act of 1934
For the Quarter Ended June 25, 2004
Commission File No. 0–23018
PLANAR SYSTEMS, INC.
(exact name of registrant as specified in its charter)
| Oregon | 93-0835396 | |
| (State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) | |
| 1195 NW Compton Dr., Beaverton, Oregon | 97006 | |
| (Address of principal executive offices) | (zip code) | |
Registrant’s telephone number, including area code: (503) 748-1100
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act) x Yes ¨ No
Number of shares of common stock outstanding as of July 31, 2004
14,627,184, no par value per share
INDEX
2
Consolidated Statements of Operations
(In thousands, except per share amounts)
(unaudited)
| Three months ended |
Nine months ended |
|||||||||||||||
| June 25, 2004 |
June 27 2003 |
June 25, 2004 |
June 27, 2003 |
|||||||||||||
| Sales |
$ | 66,663 | $ | 62,870 | $ | 188,176 | $ | 179,717 | ||||||||
| Cost of sales |
51,354 | 42,869 | 143,122 | 123,572 | ||||||||||||
| Gross profit |
15,309 | 20,001 | 45,054 | 56,145 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development, net |
2,535 | 3,048 | 7,812 | 8,511 | ||||||||||||
| Sales and marketing |
4,505 | 4,863 | 13,229 | 14,685 | ||||||||||||
| General and administrative |
3,881 | 4,399 | 11,601 | 13,460 | ||||||||||||
| Amortization of intangible assets |
668 | 708 | 2,084 | 2,124 | ||||||||||||
| Total operating expenses |
11,589 | 13,018 | 34,726 | 38,780 | ||||||||||||
| Income from operations |
3,720 | 6,983 | 10,328 | 17,365 | ||||||||||||
| Non-operating income (expense): |
||||||||||||||||
| Interest, net |
(91 | ) | (263 | ) | (433 | ) | (1,084 | ) | ||||||||
| Foreign exchange, net |
112 | (60 | ) | 109 | (143 | ) | ||||||||||
| Other, net |
42 | (4 | ) | (308 | ) | 6 | ||||||||||
| Net non-operating income (expense) |
63 | (327 | ) | (632 | ) | (1,221 | ) | |||||||||
| Income before income taxes |
3,783 | 6,656 | 9,696 | 16,144 | ||||||||||||
| Provision for income taxes |
1,130 | 2,263 | 3,200 | 5,490 | ||||||||||||
| Net income |
$ | 2,653 | $ | 4,393 | $ | 6,496 | $ | 10,654 | ||||||||
| Basic net income per share |
$ | 0.18 | $ | 0.31 | $ | 0.45 | $ | 0.76 | ||||||||
| Average shares outstanding—basic |
14,636 | 14,053 | 14,582 | 13,927 | ||||||||||||
| Diluted net income per share |
$ | 0.18 | $ | 0.30 | $ | 0.44 | $ | 0.74 | ||||||||
| Average shares outstanding—diluted |
14,785 | 14,524 | 14,871 | 14,451 | ||||||||||||
See accompanying notes to unaudited consolidated financial statements.
3
CONSOLIDATED BALANCE SHEETS
(In thousands)
| June 25, 2004 |
Sept. 26, 2003 |
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| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 36,763 | $ | 37,424 | ||||
| Accounts receivable |
30,500 | 37,148 | ||||||
| Inventories |
48,809 | 39,255 | ||||||
| Other current assets |
13,601 | 11,536 | ||||||
| Total current assets |
129,673 | 125,363 | ||||||
| Property, plant and equipment, net |
18,523 | 19,898 | ||||||
| Goodwill |
49,001 | 49,001 | ||||||
| Intangible assets |
8,463 | 10,547 | ||||||
| Other assets |
7,274 | 5,027 | ||||||
| $ | 212,934 | $ | 209,836 | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 26,618 | $ | 20,076 | ||||
| Accrued compensation |
4,287 | 5,560 | ||||||
| Current portion of long-term debt and capital leases |
190 | 12,373 | ||||||
| Deferred revenue |
1,241 | 410 | ||||||
| Other current liabilities |
13,097 | 13,498 | ||||||
| Total current liabilities |
45,433 | 51,917 | ||||||
| Long-term debt and capital leases, less current portion |
896 | 3,217 | ||||||
| Other long-term liabilities |
4,626 | 3,863 | ||||||
| Total liabilities |
50,955 | 58,997 | ||||||
| Shareholders’ equity: |
||||||||
| Common stock |
130,554 | 126,947 | ||||||
| Retained earnings |
37,004 | 30,621 | ||||||
| Accumulated other comprehensive loss |
(5,579 | ) | (6,729 | ) | ||||
| Total shareholders’ equity |
161,979 | 150,839 | ||||||
| $ | 212,934 | $ | 209,836 | |||||
See accompanying notes to unaudited consolidated financial statements.
4
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Nine months ended |
||||||||
| June 25, 2004 |
June 27, 2003 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 6,496 | $ | 10,654 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities |
||||||||
| Depreciation and amortization |
6,700 | 7,623 | ||||||
| Deferred taxes |
— | (27 | ) | |||||
| Decrease in accounts receivable |
6,678 | 457 | ||||||
| (Increase) decrease in inventories |
(9,673 | ) | 338 | |||||
| (Increase) decrease in other current assets |
(2,298 | ) | 426 | |||||
| Increase in accounts payable |
6,709 | 5,417 | ||||||
| Increase (decrease) in accrued compensation |
(1,218 | ) | 1,208 | |||||
| Increase (decrease) in deferred revenue |
815 | (279 | ) | |||||
| Increase in other current liabilities |
589 | 3,688 | ||||||
| Net cash provided by operating activities |
14,798 | 29,505 | ||||||
| Cash flows from investing activities: |
||||||||
| Purchase of property, plant and equipment |
(4,601 | ) | (1,838 | ) | ||||
| Increase in other long-term liabilities |
— | (156 | ) | |||||
| (Increase) decrease in long-term assets |
(128 | ) | 426 | |||||
| Net cash used in investing activities |
(4,729 | ) | (1,568 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Payments of long-term debt and capital lease obligations |
(21,440 | ) | (23,591 | ) | ||||
| Proceeds from long-term debt |
6,936 | — | ||||||
| Stock repurchase |
(113 | ) | (162 | ) | ||||
| Net proceeds from issuance of capital stock |
3,607 | 3,652 | ||||||
| Net cash used in financing activities |
(11,010 | ) | (20,101 | ) | ||||
| Effect of exchange rate changes |
280 | 2,058 | ||||||
| Net increase (decrease) in cash and cash equivalents |
(661 | ) | 9,894 | |||||
| Cash and cash equivalents at beginning of period |
37,424 | 37,451 | ||||||
| Cash and cash equivalents at end of period |
$ | 36,763 | $ | 47,345 | ||||
See accompanying notes to unaudited consolidated financial statements.
5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share amounts)
(Unaudited)
Note 1 - BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States. However, certain information or footnote disclosures normally included in such financial statements have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the statements include all adjustments necessary (which are of a normal and recurring nature) for the fair presentation of the results of the periods presented. These financial statements should be read in connection with the Company’s audited financial statements for the year ended September 26, 2003.
Note 2 - STOCK-BASED COMPENSATION PLANS
The Company accounts for its stock-based plans under Accounting Principles Board Opinion no. 25, “Accounting for Stock Issued to Employees”.
If the Company accounted for its stock-based compensation plans in accordance with Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation”, the Company’s net income and net income per share would approximate the pro forma disclosures below:
| 3 months ended |
9 months ended |
|||||||||||||||
| June 25, 2004 |
June 27, 2003 |
June. 25, 2004 |
June 27, 2003 |
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| Net income, as reported |
$ | 2,653 | $ | 4,393 | $ | 6,496 | $ | 10,654 | ||||||||
| Less total stock-based employee compensation expense determined under fair-value-based method for all awards, net of related tax effects |
(784 | ) | (614 | ) | (2,398 | ) | (2,900 | ) | ||||||||
| Pro forma net income |
$ | 1,869 | $ | 3,779 | $ | 4,098 | $ | 7,754 | ||||||||
| Earnings per share: |
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| Basic—as reported |
&nbs | |||||||||||||||