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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 24, 1999 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 (I.R.S. employer
incorporation or organization) identification number)
1400 NW Compton Drive
Beaverton, OR 97006
(Address of principle executive offices,
including zip code)
(503) 690-1100
(Registrants telephone number, including area code)
__________________________________________
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock
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 proceeding 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.
YES X NO ______
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this form 10-K or any
amendment to this Form 10-K (_)
As of December 17, 1999
Aggregate market value of the voting stock held by
non-affiliates of the Registrant based upon the
closing bid price of such stock: $78,406,000
Number of shares of Common Stock outstanding 10,541,271
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement to be used in connection with the Annual Meeting
of Shareholders to be held on February 3, 2000, are incorporated by reference
into Part III of this report.
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Part IV
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Item 14: Exhibits, Financial Statements, Schedules and Reports on 8-K
(a) Financial Statements and Schedules
The financial statements of Planar Systems, Inc. as set forth under Item 8
as previously filed.
Financial statement schedules have been omitted since the information
called for is not present in amounts sufficient to require submission of the
schedules.
The financial statements of dpiX, LLC as of December 31, 1999 and for the
period from July 1, 1999 (inception) to December 31, 1999 follow.
1
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dpiX, LLC
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report.............................................. 3
Balance Sheet............................................................. 4
Statement of Operations and Members' Capital.............................. 5
Statement of Cash Flows................................................... 6
Notes to Financial Statements............................................. 7
</TABLE>
2
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Independent Auditors' Report
The Board of Managers
dpiX, LLC:
We have audited the accompanying balance sheet of dpiX, LLC (the Company) as of
December 31, 1999, and the related statements of operations and members'
capital, and cash flows for the period from July 1, 1999 (inception) to December
31, 1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of dpiX, LLC as of December 31,
1999, and the results of its operations and its cash flows for the period from
July 1, 1999 (inception) to December 31, 1999, in conformity with generally
accepted accounting principles.
/s/ KPMG LLP
- ----------------------------
San Francisco, California
February 29, 2000
3
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dpiX, LLC
Balance Sheet
December 31, 1999
<TABLE>
<CAPTION>
Assets
Current assets:
<S> <C>
Cash $ 20,054,000
Accounts receivable:
Trade, net of allowances of $114,000 535,000
Related parties 3,560,000
Due from related party 2,500,000
Inventories, net 3,043,000
Prepaid expenses and other current assets 283,000
-------------
Total current assets 29,975,000
Property and equipment, net 3,819,000
-------------
Total assets $ 33,794,000
=============
Liabilities and Members' Capital
Liabilities:
Accounts payable $ 1,270,000
Accrued expenses 3,210,000
-------------
Total liabilities 4,480,000
Members' capital 29,314,000
-------------
Total liabilities and members' capital $ 33,794,000
=============
See accompanying notes to financial statements.
</TABLE>
4
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dpiX, LLC
Statement of Operations and Members' Capital
Period from July 1, 1999 (inception) to December 31, 1999
<TABLE>
<S> <C>
Revenues:
Product $ 7,970,000
Research contract 723,000
-------------
Total revenues 8,693,000
Cost of revenues 7,402,000
-------------
Gross margin 1,291,000
-------------
Operating expenses:
Research and development 2,319,000
Selling, general and administrative 1,375,000
-------------
Total operating expenses 3,694,000
-------------
Operating loss (2,403,000)
Other income:
Interest income 506,000
-------------
Net loss (1,897,000)
Capital contributions 31,211,000
-------------
Members' capital, end of period $ 29,314,000
=============
</TABLE>
See accompanying notes to financial statements.
5
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dpiX, LLC
Statement of Cash Flows
Period from July 1, 1999 (inception) to December 31, 1999
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss $ (1,897,000)
Depreciation and amortization 350,000
Changes in operating assets and liabilities:
Accounts receivable (563,000)
Inventory 47,000
Prepaid expenses and other current assets (309,000)
Accounts payable 920,000
Accrued expenses (1,220,000)
--------------
Net cash used in operating activities (2,672,000)
Cash flows used in investing activities - equipment purchases (634,000)
Cash flows provided by financing activities - members' contributed capital 23,360,000
--------------
Net increase in cash and cash equivalents 20,054,000
--------------
Cash and cash equivalents, beginning of period --
Cash and cash equivalents, end of period $ 20,054,000
==============
Supplemental disclosure of noncash flow information:
Assets contributed by members:
Receivables $ 3,532,000
Equity contribution due from member 2,500,000
Inventories 3,090,000
Property and equipment 3,535,000
Other 12,000
Liabilities assumed from members:
Accounts payable (376,000)
Accrued expenses (4,442,000)
--------------
Net nonmonetary assets contributed $ 7,851,000
==============
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
dpiX, LLC
Notes to Financial Statements
December 31, 1999
(1) Organization
dpiX, LLC (the Company) was established in July 1999 as a Delaware Limited
Liability Company through capital contributions of cash and nonmonetary
assets from the members. Since inception, the Company has developed,
manufactured and sold sensor and display products to customers. The
Company's production process revenues resulted from research contracts
engaged with the United States government's Defense Advance Research
Project Agency and the United States Display Consortium.
(2) Summary of Significant Accounting Policies
(a) Inventories
Inventories are stated at the lower of cost or market using the
first-in, first-out cost method.
Inventories are comprised of:
Raw materials $ 661,000
Work-in-process 2,586,000
Finished goods 77,000
Allowance for obsolescence (281,000)
-----------
Total $ 3,043,000
===========
(b) Property and Equipment
Property and equipment are stated at cost, net of accumulated
depreciation and amortization, and are depreciated and amortized using
the straight-line method over the estimated useful lives of the
assets.
(c) Revenue Recognition/Concentration
The Company's revenues are derived from research contract agreements
and product sales. Research contract revenues are based upon
reimbursement of costs incurred as specified in the contracts, and are
realized upon the completion of contract milestones.
During the period ended December 31, 1999, $7,211,000 or 82% of
revenues was from organizations that are members of the Company.
Product revenues are realized upon shipment or at the request of
certain customers on completion. As of December 31, 1999, the Company
sold certain products for amounts which were below the cost to
produce. As of December 31, 1999, remaining manufacturing cost
exceeded contracted sales price by $1,011,000. These amounts are
charged to expense in the period in which the Company becomes
contractually obligated.
(d) Research and Development
All research and development costs are expensed as incurred and
include salaries and expenses related to employees who conduct
research and development.
7 (Continued)
<PAGE>
dpiX, LLC
Notes to Financial Statements
December 31, 1999
(e) Income Taxes
No provision for federal and state income taxes has been made in the
financial statements since the Company's profit and losses are
reported on the members' tax returns.
(f) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
(g) Concentration of Credit Risks
The Company maintains its cash balance in a financial institution
located in Santa Clara, California. The balances are insured by the
Federal Deposit Insurance Corporation up to $100,000. As of December
31, 1999, the Company's uninsured cash balances totaled $19,947,000.
Accounts receivable potentially subject the Company to concentrations
of credit risk. The Company performs ongoing credit evaluations of its
customers' financial condition and generally does not require
collateral for accounts receivable. When required, the Company
maintains allowances for credit losses, and to date such losses have
been within management's expectations.
(h) Accounting for Impairment of Long-Lived Assets
The Company reviews its long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. Recoverability of assets held and
used is measured by a comparison of the carrying amount of an asset to
future net cash flows expected to be generated by the asset. If such
assets are considered to be impaired, the impairment to be recognized
is measured by the amount by which the carrying amount of the assets
exceeds the fair value of the assets. Assets to be disposed of are
reported at the lower of their carrying amount or fair value less cost
to sell.
(i) Comprehensive Income (Loss)
The Company has no significant components of other comprehensive loss
and, accordingly, the comprehensive loss is the same as net loss for
the period July 1, 1999 through December 31, 1999.
8 (Continued)
<PAGE>
dpiX, LLC
Notes to Financial Statements
December 31, 1999
(j) Recent Accounting Pronouncements
The Financial Accounting Standards Board (FASB) recently issued
Statement of Financing Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities (SFAS No. 133). SFAS No.
133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as derivatives), and for
hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of
financial position and measure those instruments at fair value. For a
derivative not designated as a hedging instrument, changes in the fair
value of the derivative are recognized in earnings in the period of
change. The Company must adopt SFAS No. 133 by January 1, 2000.
Management does not believe the adoption of SFAS No. 133 will have a
material effect on the financial position or results of operations of
the Company.
(3) Property and Equipment
As of December 31, 1999, property and equipment, at cost, consisted of the
following:
Plant machinery $ 3,492,000
Furniture and fixtures 11,000
Computer equipment 61,000
Construction-in-progress 605,000
------------
4,169,000
Less: accumulated depreciation and amortization (350,000)
------------
Net plant, property and equipment $ 3,819,000
============
(6) Related Party Transactions
During the period ended December 31, 1999, the Company had sales of
$7,211,000 to related parties, of which $3,560,000 was receivable as of
December 31, 1999. Additionally, as of December 31, 1999, $2,500,000 was
due from a related party as part of its commitment for the initial
capitalization of the Company.
(7) Leases
The Company maintains noncancelable operating leases for its offices and
for manufacturing facilities and equipment.
9 (Continued)
<PAGE>
dpiX, LLC
Notes to Financial Statements
December 31, 1999
Future minimum lease payments under noncancelable operating leases as of
December 31, 1999 were:
Years ending December 31,
2000 $ 2,448,000
2001 2,287,000
2002 2,032,000
2003 1,417,000
2004 720,000
------------
$ 8,904,000
============
Rent expense for operating leases amounted to $1,177,000 for the period
ended December 31, 1999, of which $491,000 was paid to a related party.
(8) Segment Information
The Company has adopted the provisions of SFAS No. 131, Disclosure About
Segments of an Enterprise and Related Information. SFAS No. 131 establishes
standards for the reporting by public business enterprises of information
about operating segments, products and services, geographic areas and major
customers. The method for determining what information to report is based
on the way that management organizes the operating segments within the
Company for making operating decisions and assessing financial performance.
The Company's chief operating decision maker is considered to be the
Company's Chief Executive Officer (CEO). The CEO reviews financial
information accompanied by disaggregated information about revenue and cost
of revenue for purposes of making operating decisions and assessing
financial performance. The information reviewed by the CEO is identical to
the information presented in the accompanying financial statements of
operations. All assets pertain solely to the product sales segment.
10
<PAGE>
The independent auditors' report with respect to the above-listed financial
statements appears on page 3 of this report.
(b) Reports on 8-K
Form 8-K/A filed on September 17, 1999 providing the financial information
required for the dpiX LLC transaction.
(c) Exhibits
Exhibit
Number Title
- --------------------------------------------------------------
3.1 Second Restated Articles of Incorporation of Planar Systems, Inc./(1)/
3.2 Second Restated Bylaws of Planar Systems, Inc., as amended/(11)/
3.3 Amendment to Second Restated Articles of Incorporation of Planar Systems,
Inc./(2)/
4.1 Specimen stock certificate/(1)/
4.4 Rights Agreement dated as of February 1, 1996 between Planar Systems, Inc.
and First Interstate Bank of Oregon, N.A./(3)/
10.1 Form of Indemnity Agreement between Planar Systems, Inc. and each of its
executive officers and directors/(1)/
10.2 Amended and Restated 1983 Incentive Stock Option Plan/(1)/
10.3 1993 Stock Option Plan for Nonemployee Directors/(1)/
10.4 1993 Incentive Stock Option Plan/(1)/
10.5 1994 Employee Stock Purchase Plan/(4)/
10.6 Lease agreement dated as of September 30, 1993 between Science Park Limited
Partnership I and Planar Systems, Inc./(1)/
10.7 Lease agreement dated as of May 20, 1998 between Metra Corporation and
Planar International, Ltd (English translation)/(8)/
10.8 Lease agreement dated as of August 26, 1994 between Tektronix, Inc. and
Planar Systems, Inc./(5)/
10.9 Asset Purchase Agreement dated August 26, 1994 between Tektronix, Inc. and
Tektronix Federal Systems, Inc. and Planar Systems, Inc and Planar Advance/(5)/
11
<PAGE>
10.10 Stock Purchase Agreement dated August 25, 1997 by and among Planar
Systems, Inc., Standish Industries, Inc., Standish International, Inc., Charles
P. Hoke, Elizabeth A. Hoke and William R. Steinmetz, Trustee of the Steven Hoke
Management Trust, the Catherine Hoke Management Trust, the Lauren Hoke
Management Trust and the Charles D. Hoke Management Trust ('the Agreement")
(certain schedules to the Agreement and its exhibits are omitted)./(6)/
10.11 Amendment to Stock Purchase Agreement dated August 26, 1997/(6)/
10.12 1996 Stock Incentive Plan/(7)/
10.13 Lease agreement dated May 30, 1997 between Pacific Realty Associates,
L.P. and Planar America, Inc./(7)/
10.14 Agreement and Plan of Merger dated as of May 13, 1999 by and among dpiX,
Inc., Xerox Corporation and New dpiX LLC/(9)/
10.15 Credit Agreement between Planar Systems, Inc. and Norwest Bank Wisconsin,
National Association dated July 29, 1999/(10)/
10.16 Employment Agreement between Planar Systems, Inc. and James M. Hurd dated
as of April 30, 1999/(10)/
10.17 Planar Systems, Inc. Nonqualified Stock Option Agreement between Planar
Systems, Inc. and William D. Walker dated as of May 13, 1999/(10)/
10.18 Executive Employment Agreement between Planar Systems, Inc. and
Balakrishnan Krishnamurthy dated as of September 24, 1999/(11)/
10.19 Restricted Stock Award Agreement between Planar Systems, Inc. and
Balakrishnan Krishnamurthy dated as of September 24, 1999/(11)/
10.20 Nonqualified Stock Option Agreement between Planar Systems, Inc. and
Balakrishnan Krishnamurthy dated as of September 27, 1999/(11)/
10.21 Form of Restricted Stock Award Agreement under Planar Systems, Inc. 1996
Stock Incentive Plan dated as of May 24, 1999/(11)/
10.22 Form of Restricted Stock Award Agreement under Planar Systems, Inc. 1996
Stock Incentive Plan dated as of May 24, 1999/(11)/
10.23 Planar Systems, Inc. 1999 Nonqualified Stock Option Plan/(11)/
10.24 Planar Systems, Inc. Deferred Compensation Plan/(11)/
21 Subsidiaries of Planar Systems, Inc./(11)/
23 Consent of KPMG LLP
24 Power of Attorney/(11)/
27 Financial Data Schedule/(11)/
/(1)/ Incorporated by reference to the Company's Registration Statement on Form
S-1 (Reg. No. 33-71020), declared effective on December 15, 1993.
/(2)/ Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended September 27, 1996.
/(3)/ Incorporated by reference to the Company's Current Report on Form 8-K
filed on February 21, 1996.
/(4)/ Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended September 30, 1994.
/(5)/ Incorporated by reference to the Company's Current Report on Form 8-K
filed as of September 12, 1994.
/(6)/ Incorporated by reference to the Company's Current Report on Form 8-K
filed on October 10, 1997.
/(7)/ Incorporated by reference to the Company's Annual report on form 10-K for
the year ended September 26, 1997.
/(8)/ Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended September 25, 1998.
/(9)/ Incorporated by reference to the Company's Current Report on Form 8-K
filed on July 20, 1999.
/(10)/ Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 25, 1999.
/(11)/ As previously filed.
12
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
PLANAR SYSTEMS, INC.
March 29, 2000 By: /s/ JACK RAITON
---------------
Jack Raiton
Vice President
Chief Financial Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated on March 29, 2000.
<TABLE>
<S> <C> <C>
BALAJI KRISHNAMURTHY * President, Chief Executive Officer,
- -----------------------------
Balaji Krishnamurthy Director (Principle Executive Officer)
/s/ JACK RAITON Vice President, Chief Financial Officer,
- -----------------------------
Jack Raiton (Principle Financial and Accounting Officer)
WILLIAM D. WALKER * Chairman of the Board
- -----------------------------
William D. Walker
Director
- -----------------------------
James M. Hurd
HEINRICH STENGER * Director
- -----------------------------
Heinrich Stenger
E. KAY STEPP * Director
- -----------------------------
E. Kay Stepp
J. KENNETH STRINGER III * Director
- -----------------------------
J. Kenneth Stringer III
GREGORY H. TURNBULL * Director
- -----------------------------
Gregory H. Turnbull
STEVEN E. WYNNE * Director
- -----------------------------
Steven E. Wynne
</TABLE>
_________________
* By: /s/ Jack Raiton
------------------------
Jack Raiton
Attorney-in-fact
13
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EXHIBIT 23
Consent of Independent Auditors
The Board of Directors and Shareholders
Planar Systems, Inc. and Subsidiaries:
We consent to incorporation by reference in the Registration Statements (Nos.
33-82696, 33-82688, 33-90258 and 333-45191) on Form S-8 of Planar Systems, Inc.
and subsidiaries of our report dated November 3, 1999, except as to note 15,
which is as of December 13, 1999, relating to the consolidated balance sheets of
Planar Systems, Inc. and subsidiaries as of September 24, 1999 and September 25,
1998, and the related consolidated statements of operations, shareholders'
equity and cash flows for each of the years in the three-year period ended
September 24, 1999, and our report dated February 29, 2000, relating to the
balance sheet of dpiX, LLC as of December 31, 1999, and the related statements
of operations and members' capital and cash flows for the period from July 1,
1999 (inception) to December 31, 1999, which reports appear, or are incorporated
by reference, in the Annual Report on Form 10-K/A of Planar Systems, Inc. and
subsidiaries for the year ended September 24, 1999.
/s/ KPMG LLP
- ------------------------
Portland, Oregon
March 27, 2000
