Planar Systems Inc. announced that it is selling its medical imaging business, as the company recorded a huge impairment charge that took its third-quarter loss to $62 million.
Beaverton-based Planar (NASDAQ: PLNR) reported third-quarter revenue of $75 million, up from $68.2 million a year earlier. The increase is largely due to the acquisition of Runco International Inc., a California supplier of upmarket home theater systems.
Planar's loss of $62 million, or $3.46 per share, would have been significantly smaller without a $58.4 million charge for impairment of goodwill and other intangible assets. Besides Runco, which has not performed as well as expected due to internal execution issues, Planar's control room and signage business -- the former Clarity Visual Systems Inc. of Wilsonville, which Planar acquired two years ago for $56.1 million -- has also been running at a loss, with sales declining compared to last year's third quarter.
Beaverton-based Planar (NASDAQ: PLNR) reported third-quarter revenue of $75 million, up from $68.2 million a year earlier. The increase is largely due to the acquisition of Runco International Inc., a California supplier of upmarket home theater systems.
Planar's loss of $62 million, or $3.46 per share, would have been significantly smaller without a $58.4 million charge for impairment of goodwill and other intangible assets. Besides Runco, which has not performed as well as expected due to internal execution issues, Planar's control room and signage business -- the former Clarity Visual Systems Inc. of Wilsonville, which Planar acquired two years ago for $56.1 million -- has also been running at a loss, with sales declining compared to last year's third quarter.
Our take:
It's generally bad to spend more than you make, so Planar's executive team must be spitting bullets right now. Their acquisition of Clarity hasn't gone as well as they had hoped, and while the expected $34M generated from the pending sale of Planar's medical imaging unit will let them keep making payrolls, that can only last so long. The good news is that Planar is continuing to work their offerings into a more cohesive lineup, so they should have a stronger market position going forward. We're still not sure what they plan to do with the Coolsign digital signage software they got when they acquired Clarity, but it must be tough running a software operation inside of a company dominated by hardware sales objectives.
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