8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES

EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 19, 2006

PLANAR SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

OREGON	0-23018	93-0835396
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

1195 NW Compton Drive

Beaverton, Oregon 97006

(503) 748-1100

(Address, including zip code, and telephone number, including

area code, of registrant’s principal executive offices)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.02.  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On July 19, 2006, Planar Systems, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter ended June 30, 2006, new strategic initiatives, and its expectations as to financial results for the fourth quarter ending September 29, 2006. A copy of the press release is filed as Exhibit 99.1 to this Report.

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company’s earnings release contains non-GAAP financial measures that exclude the effects of share-based compensation and the requirements of SFAS No. 123(R), “Share-based Payment” (“123R”). The non-GAAP financial measures used by management and disclosed by the Company exclude the income statement effects of all forms of share-based compensation used in calculating non-GAAP earnings per diluted share. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

The Company applied the modified prospective method of adoption of 123R, under which the effects of 123R are reflected in the Company’s GAAP financial statement presentations during fiscal 2006, but are not reflected in results for prior periods. Gross margin, expenses (research and development, sales and marketing, general and administrative), operating income, net income and earnings per share (EPS) are the primary financial measures management uses for planning and forecasting future periods that are affected by shared-based compensation. Because management reviews these financial measures calculated without taking into account the effects of the new requirements under 123R, these financial measures are treated as “non-GAAP financial measures” under Securities and Exchange Commission rules. Management uses the non-GAAP financial measures for internal managerial purposes, including as a means to compare period-to-period results on both a segment basis and consolidated basis and as a means to evaluate the Company’s results on a consolidated basis compared to those of other companies. In addition, management uses certain of these measures when publicly providing forward-looking statements on expectations regarding future consolidated basis financial results.

The Company discloses this information to the public to enable investors who wish to more easily assess the Company’s performance on the same basis applied by management and to ease comparison on both a GAAP and non-GAAP basis among other companies that separately identify share-based compensation expenses. In particular, as the Company begins to apply 123R, the Company believes that it is useful to investors to understand how the expenses and other adjustments associated with the application of 123R are being reflected on the Company’s income statements.

Item 8.01.  OTHER EVENTS

On July 19, 2006, the Company issued a press release announcing that it has agreed to acquire Clarity Visual Systems, Inc. A copy of the press release is filed as Exhibit 99.2 to this Report.

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Item 9.01.  FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.

99.1	Press Release issued by Planar Systems, Inc. dated July 19, 2006.
99.2	Press Release issued by Planar Systems, Inc. dated July 19, 2006.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on July 19, 2006.

PLANAR SYSTEMS, INC.
(Registrant)
By	\s\ Scott Hildebrandt
	Scott Hildebrandt Vice President and Chief Financial Officer

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EX-99.1

Exhibit 99.1

Planar Reports Third Fiscal Quarter 2006 Financial Results

Company announces new strategic initiatives with the entry into high-end home theater market and

acquisition to enter fast growing digital signage market

BEAVERTON, Ore. – July 19, 2006 – Planar Systems, Inc. (NASDAQ: PLNR), a worldwide leader in display systems recorded sales of $49.4 million and GAAP net income per diluted share of $0.11, including share-based compensation expense of $0.02, in the third fiscal quarter ended June 30, 2006. On a non-GAAP basis (see reconciliation table), net income per diluted share was $0.13 in the third fiscal quarter of 2006.

“I am pleased that we continued to deliver on our goals relating to driving solid profitability and generating positive cash flow,” said Gerry Perkel, Planar president and chief executive officer. “GAAP earnings came in above the high end of our expectations based in part on sales of higher-margin products and good expense management in the quarter. In addition, we are very excited about our new strategic initiatives at Planar including our planned acquisition of Clarity Visual Systems announced earlier today.”

Industrial segment sales in the third fiscal quarter were $13.7 million, down 13 percent sequentially and up 4 percent compared to the third quarter of fiscal 2005, as orders from the Company’s OEM partners subsided somewhat from the above expectation levels of the second quarter. The Medical segment of the Company recorded third quarter sales of $17.3 million, up 2 percent sequentially and approximately flat compared to the third quarter a year ago. The Company continues to invest in its high resolution, Digital Imaging specialty display business and its expanding relationships with new and existing distribution partners with a goal of growing market share over time. Sales in the Company’s Commercial segment were $18.3 million, down 9 percent sequentially and down 20 percent versus the third quarter a year ago. Average selling prices dropped for all sizes of desktop monitors, with sequential price declines similar to those the Company experienced in the first half of fiscal 2005. The Company continued its focus on limiting the fluctuations on earnings in this challenging pricing environment. In addition, the commercial unit is continuing its efforts to diversify its product portfolio into more specialized products in an effort to improve gross margins.

The Company ended the third quarter with cash and short term investments of $76.2 million, an increase of $2.9 million from the end of the second quarter of 2006 and an increase of $11.1 million from the end of fiscal 2005.

NEW STRATEGIC INITIATIVES

As indicated in previous communications, the Company has been refining strategic alternatives over the past six months to chart the best path to enhance long-term shareholder value. That process has led the Company to some new strategic initiatives that it believes can offer exciting

opportunities to expand and enhance top-line revenue growth and profitability over time. In summary, the Company is announcing the following actions:

• Begin moving the Company toward more specialty, value-added display markets that offer higher gross margin opportunities over time

• Acquire Clarity Visual Systems, a provider of command and control room display systems and digital signage hardware and software

• Launch a high-end home theater specialty display initiative, including the new Planar Xscreen product line

• Hire a new VP of business development, Brad Gleeson, an industry expert in large- format display systems and former president of Activelight

At the center of the Company’s new strategic direction is the belief that the Company can build upon its display technology innovation capabilities and, in particular, focus its energies on creating solutions that address applications requiring display system performance beyond what is available from general purpose, commodity display suppliers. The Company believes it can extend its history of innovation to create solutions for multiple specialty display markets leveraging a common core support structure.

“By coupling a strong capability for innovation with vertically-focused go-to-market groups whose strength lies in truly understanding the specific needs of each market and creating products, service, and support unique to that market, we believe we can develop a business model that creates higher gross margin product lines and overall Company efficiency to generate higher operating margins than the Company currently produces,” continued Perkel.

The Company currently serves two such value-added, specialty display markets: the Industrial market and Medical market. Both markets require products that typically exceed the capabilities of general purpose, commodity displays. The Company has clearly demonstrated the innovation necessary to create well accepted solutions for customers in these market segments. In addition, the Company has well-developed, vertically-aligned, go-to-market capabilities to serve both of these markets.

The Company’s new strategic direction intends to build on this specialty display core competency to enter additional specialty display markets over time. However, in order to pursue additional segments the Company needs to enhance its capabilities in the areas of research and development engineering and additional go-to-market resources. The Company has recently taken two key steps to enable success its new strategic initiatives.

First, as was announced in a separate release this morning, the Company has entered into an agreement to acquire Clarity Visual Systems. Clarity, whose current headquarters are approximately 20 miles from Planar’s headquarters in Oregon, brings a strong capability for innovation, an excellent set of products and focused go-to-market skills to drive revenue both in the command and control system marketplace and in the emerging, fast growing market for digital signage. Planar’s previously announced initiatives in retail signage and kiosk systems will be combined with Clarity’s market position in digital signage to address this growing market’s need for display network management software and specialty displays. “We are very excited about the opportunities to participate in Clarity’s addressed markets which require capabilities, products and integrated solutions that are highly differentiated from typical commodity products,” continued Perkel. “We

believe the acquisition of Clarity increases Planar’s future revenue growth trajectory as well as its future profitability. In addition, I am especially pleased to announce that we will be strengthening our leadership team as a part of this acquisition. Clarity’s CEO, Paul Gulick will be joining Planar in the role of vice president and chief technology officer, and Kris Gorriaran, Clarity’s senior vice president of sales and marketing will be joining Planar as the Company’s vice president and general manager leading our resources focused on penetrating both the command and control and digital signage markets.”

Second, the Company has recently begun funding a new internal initiative focused on providing specialty display solutions to the high-end home theater marketplace. The Company does not intend to participate in the commodity home entertainment market served by large consumer electronic retailers and brands, but rather has launched an initiative to focus on creating a product portfolio that addresses the discriminating preferences of home theater buyers, who are typically served by specialty resellers and audio/visual installers. To launch this business, the Company has built a dedicated, focused team led by Scott Hix in his new role of vice president and general manager of the Home Theater initiative. The Company began the initiative in the home theater market in the third quarter by launching the Planar Xscreen product, a unique, large-screen display that generates brighter images from front projectors even in ambient-light environments. Initially sales from this initiative will be disclosed within the Company’s Commercial Business unit segment for SEC reporting purposes. “The Planar Xscreen is just our first product in this market space and we expect to broaden our product portfolio in the coming months,” stated Perkel.

In addition to the above noted focus areas for the Company, a significant portion of the Company’s current revenue is generated from the Commercial Business unit, whose primary business is providing general purpose LCD monitors through large information technology (IT) resellers and distributors. The Company has built a very efficient logistical operation, and intends to leverage this model for multiple product types moving forward. For some time the focus of the business has been growing touch monitor sales in an effort to pursue specialty displays within the IT channel. The Company believes these distribution partners will play a continuing and significant role in its ongoing distribution strategy. However, the Company will continue its efforts to diversify its product offerings with the goal of focusing on higher-margin products and becoming less dependent on the sales of lower-margin, general purpose desktop monitors.

“With these recent additions to the Company we will now begin the process of building out our strategy with innovative products and focused go-to-market capabilities in medical, industrial, home theater, command and control and digital signage marketplaces,” continued Perkel. “We believe we will have a greatly enhanced innovation capability with the addition of the Clarity technical resources to our own. Further, we believe these new resources will be able to be leveraged over time to offer the ability to address even more potential opportunities within our new strategic direction.”

To assist in evaluating new opportunities for the future, the Company has further expanded its capabilities by adding Brad Gleeson as the new vice president of business development, replacing Mr. Hix. Prior to joining Planar, Mr. Gleeson was president of Activelight, a leading distributor of large-format display systems. Mr. Gleeson will be initially focused on finding new opportunities and partners to help accelerate the growth of the Company’s current segments, as well as seeking out new specialty display market opportunities.

Planar’s technology innovation, go-to-market capabilities, and operational excellence create value-added solutions for an attractive array of specialty display markets. “As we move forward you will see a Planar that is increasingly focused on opportunities for display technology where profit margins are higher and where we can leverage our capabilities for technical innovation to create differential advantages,” summarized Perkel. “We look to substantially grow our revenues in the higher-margin segments with a goal of enhancing shareholder value. While it may take some time for the total strategy to take hold, I am excited about the growth opportunities going forward and believe that over the long term this new strategy will create an exciting future for the Company.”

BUSINESS OUTLOOK

The Company is developing a number of new strategic initiatives with an expectation of improved shareholder value over time As such, some increases in expenses are planned in the fourth quarter as the Company begins to invest in some new growth areas, such as its new Home Theater initiative, as a direct result of its new strategic realignment. The Company’s current expectations on a stand alone basis for the fourth quarter, ending September 29, 2006, are for sales of $46 million to $50 million and GAAP net income per diluted share of $0.06 to $0.10, including share-based compensation expense of $0.03 to $0.04 per diluted share. This guidance assumes the proposed acquisition of Clarity closes subsequent to the Company’s fourth quarter. The Clarity transaction is expected to be slightly accretive to Planar’s internal non-GAAP financial projections in fiscal 2007.

Results of operations, new strategic initiatives and the business outlook will be discussed in a conference call today, July 19, 2006, beginning at 8:30 a.m. Pacific Time. The call can be heard via the Internet through a link on Planar’s Web site, www.planar.com, or through numerous other investor sites, and will be available for replay beginning July 20 until August 19, 2006. The Company intends to post on its Web site a transcript of the prepared management commentary from the conference call shortly after the conclusion of the call.

ABOUT PLANAR

Planar Systems, Inc (NASDAQ: PLNR) is a leading provider of valued-added display hardware and software for a variety of specialty display markets worldwide. Hospitals, shopping centers, banks, businesses, and other discriminating consumers depend on Planar to provide unique display-based solutions to exacting requirements leveraging its operational excellence, technical innovation, and go-to-market capabilities. Founded in 1983, Planar is headquartered in Oregon, USA, with offices, manufacturing partners, and customers worldwide. For more information, visit www.planar.com.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:

The statements by Gerry Perkel, the statements regarding growth of the Digital Imaging product line and the statements in the Strategic Direction and Business Outlook section above are forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. Such statements are based on current expectations, estimates and projections about the Company’s business. 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. These statements are not guarantees of future performance and involve certain

risks and uncertainties that are difficult to predict. Actual results could vary materially from the description contained herein due to many factors including: the possibility that the proposed acquisition of Clarity Visual Systems will not close or that the closing may be delayed; the impact that a failure to close the acquisition of Clarity Visual Systems would have on the Company’s new strategic direction; difficulties in the integration of the operations, employees, strategies, technologies and products of Clarity Visual Systems if the transaction does close; changes or slower growth in the digital signage and/or command and control display markets; the potential inability to realize expected benefits and synergies; domestic and international business and economic conditions; changes in the flat-panel monitor industry; unexpected difficulties in penetrating the Home Theater market; changes in customer demand or ordering patterns; changes in the competitive environment including pricing pressures or technological changes; technological advances; shortages of manufacturing capacity from our third-party manufacturing partners; final settlement of contractual liabilities; future production variables impacting excess inventory and other risk factors listed from time to time in the Company’s Securities and Exchange Commission (SEC) filings. The forward-looking statements contained in this press release speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release.

Additional Information and Where to Find It:

In connection with Planar’s acquisition of Clarity Visual Systems, Planar intends to file with the Securities and Exchange Commission a registration statement on Form S-4 that will contain a Proxy Statement/Prospectus. Investors and security holders are urged to read the Registration Statement and the Proxy Statement/Prospectus carefully when they become available because they will contain important information about Planar, Clarity and the acquisition. The Proxy Statement/Prospectus and other relevant materials (when they become available), and any other documents filed by Planar with the SEC, may be obtained free of charge at the SEC’s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of other documents filed with the SEC by Planar by directing a written request to: Planar Systems, Inc., 1195 N.W. Compton Drive, Beaverton, OR 97006, Attention: Investor Relations. Investors and security holders are urged to read the Proxy Statement/Prospectus and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed acquisition.

This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Participants in the Solicitation:

Planar and its directors and executive officers and Clarity Visual Systems and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Clarity in connection with the proposed transaction. Information regarding the special interests of these directors and executive officers in the proposed transaction will be included in the Proxy Statement/Prospectus referred to above. Additional information regarding the directors and executive officers of Planar is also included in Planar’s Annual Report on Form 10-K for the year ended September 30, 2005, which was filed with the SEC on December 14, 2005. This document is available free of charge at the SEC’s web site (www.sec.gov) and from Investor Relations at Planar at the address described above.

MEDIA CONTACTS: Pippa Edelen Planar Systems, Inc. 503.748.6983 Pippa_Edelen@Planar.com   or   Dan Dement GolinHarris 949.428.3872 ddement@golinharris.com INVESTOR CONTACTS: Ryan Gray Planar Systems, Inc. 503.748.1100 Ryan_Gray@Planar.com

Planar Systems, Inc.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(unaudited)

	Three months ended						Nine months ended
	Jun. 30, 2006			Jul. 1, 2005			Jun. 30, 2006			Jul. 1, 2005
Sales	$	49,365		$	53,191		$	159,394		$	177,375
Cost of sales		36,035			40,791			116,828			138,052
Gross profit		13,330			12,400			42,566			39,323
Operating expenses:
Research and development, net		2,442			2,259			7,477			7,657
Sales and marketing		5,039			4,777			15,065			16,053
General and administrative		3,579			3,471			12,679			12,426
Amortization of intangible assets		147			305			441			1,510
Impairment and restructuring charges		—			—			503			5,168
Total operating expenses		11,207			10,812			36,165			42,814
Income (loss) from operations		2,123			1,588			6,401			(3,491	)
Non-operating income (expense):
Interest, net		682			239			1,814			318
Foreign exchange, net		166			154			19			223
Other, net		(9	)		(11	)		(31	)		(856	)
Net non-operating income (expense):		839			382			1,802			(315	)
Income (loss) before income taxes		2,962			1,970			8,203			(3,806	)
Provision (benefit) for income taxes		1,294			591			3,076			(1,043	)
Net income (loss)	$	1,668		$	1,379		$	5,127		$	(2,763	)
Basic net income (loss) per share	$	0.11		$	0.09		$	0.34		$	(0.19	)
Average shares outstanding - basic		15,320			14,722			15,052			14,692
Diluted net income (loss) per share	$	0.11		$	0.09		$	0.33		$	(0.19	)
Average shares outstanding - diluted		15,635			14,834			15,314			14,692

Planar Systems, Inc.

Consolidated Balance Sheets

(In thousands)

	(unaudited)
	Jun. 30, 2006			Sept. 30, 2005
ASSETS
Current assets:
Cash and cash equivalents	$	76,240		$	52,185
Short-term investments		—			13,000
Accounts receivable		21,937			22,517
Inventories		37,457			36,261
Other current assets		10,393			10,745
Total current assets		146,027			134,708
Property, plant and equipment, net		11,064			15,011
Goodwill		14,696			14,696
Intangible assets		3,430			3,871
Other assets		5,587			3,798
	$	180,804		$	172,084
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	15,420		$	21,467
Accrued compensation		6,363			5,481
Current portion of long-term debt and capital leases		213			204
Deferred revenue		2,473			2,578
Other current liabilities		7,899			6,182
Total current liabilities		32,368			35,912
Long-term debt and capital leases, less current portion		473			644
Other long-term liabilities		4,462			4,290
Total liabilities		37,303			40,846
Shareholders’ equity:
Common stock		138,231			132,277
Retained earnings		10,033			4,906
Accumulated other comprehensive loss		(4,763	)		(5,945	)
Total shareholders’ equity		143,501			131,238
	$	180,804		$	172,084

Planar Systems, Inc.

Consolidated Statement of Cash Flows

(In thousands)

(unaudited)

	Three months ended						Nine months ended
	Jun. 30, 2006			Jul. 1, 2005			Jun. 30, 2006			Jul. 1, 2005
Cash flows from operating activities:
Net income (loss)	$	1,668		$	1,379		$	5,127		$	(2,763	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization		1,837			2,186			5,626			6,861
Impairment and restructuring charges		—			—			503			5,168
Loss on long-term investments		—			—			—			887
Stock-based compensation		653			—			2,732			—
Deferred taxes		(257	)		—			(660	)		—
Excess tax benefit of stock-based compensation		(11	)		—			(1,271	)		—
(Increase) decrease in accounts receivable		(226	)		2,456			849			12,180
(Increase) decrease in inventories		(277	)		6,313			(1,026	)		9,962
(Increase) decrease in other current assets		(116	)		1,527			437			1,253
Decrease in accounts payable		(459	)		(4,431	)		(6,093	)		(5,178	)
Increase (decrease) in accrued compensation		153			(775	)		353			1,496
Increase (decrease) in deferred revenue		363			878			(135	)		1,036
Increase (decrease) in other current liabilities		(45	)		(1,826	)		2,748			(5,444	)
Net cash provided by operating activities		3,283			7,707			9,190			25,458
Cash flows from investing activities:
Purchase of property, plant and equipment		(230	)		(546	)		(770	)		(2,223	)
Proceeds from short-term investment		—			—			13,000			—
Increase in other long-term liabilities		—			13			—			13
Increase in long-term assets		(1,179	)		163			(1,248	)		(67	)
Net cash provided by (used in) investing activities		(1,409	)		(370	)		10,982			(2,277	)
Cash flows from financing activities:
Payments of long-term debt and capital lease obligations		(51	)		(32	)		(161	)		(143	)
Stock repurchase		—			—			(916	)		—
Excess tax benefit of stock-based compensation		11			—			1,271			—
Net proceeds from issuance of capital stock		130			48			2,817			885
Net cash provided by financing activities		90			16			3,011			742
Effect of exchange rate changes		965			(1,382	)		872			(533	)
Net increase in cash and cash equivalents		2,929			5,971			24,055			23,390
Cash and cash equivalents at beginning of period		73,311			47,684			52,185			30,265
Cash and cash equivalents at end of period	$	76,240		$	53,655		$	76,240		$	53,655

Planar Systems, Inc.

Reconciliation of Non-Gaap to Gaap Results of Operations

(In thousands, except per share amounts)

(unaudited)

	Three months ended Jun. 30, 2006			Nine months ended Jun. 30, 2006
GAAP NET INCOME	$	1,668		$	5,127
Adjustment for share-based compensation within:
Cost of sales		53			149
Research and development		43			104
Sales and Marketing		230			507
General and administrative		327			1,972
Income taxes		(285	)		(992	)
NET INCOME EXCLUDING SHARE-BASED COMPENSATION	$	2,036		$	6,867
GAAP DILUTED EARNINGS PER SHARE	$	0.11		$	0.33
Adjustment for share-based compensation		0.02			0.12
DILUTED EARNINGS PER SHARE EXCLUDING SHARE-BASED COMPENSATION	$	0.13		$	0.45

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), the company’s earnings release contains non-GAAP financial measures that exclude the effects of share-based compensation and the requirements of SFAS No. 123R, “Share-based Payment” (“123R”). The non-GAAP financial measures used by management and disclosed by the company exclude the income statement effects of all forms of share-based compensation and the effects of 123R upon the number of diluted shares used in calculating non-GAAP earnings per share. The non-GAAP financial measures disclosed by the company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

EX-99.2

Exhibit 99.2

Planar to Acquire Clarity Visual Systems

Acquisition enables Planar’s entry into command and control and fast growing digital signage

large-format display markets

BEAVERTON, Ore. – July 19, 2006 – To launch the Company’s new strategy to further expand into value-added, high-growth segments of the specialty display marketplace, Planar Systems, Inc. (NASDAQ: PLNR) today announced that it has agreed to acquire all of the outstanding capital stock of privately-held Clarity Visual Systems for approximately $46 million in cash and Planar stock, subject to certain purchase price adjustments to reflect changes in balance sheet items and the number of outstanding shares of Clarity capital stock. Clarity is a leading provider of command and control digital displays and digital signage hardware and software systems for wide-ranging applications.

“Planar’s financial strength has provided the flexibility to pursue attractive growth opportunities that integrate our flat panel display technology and go-to-market expertise with the specialized skills and product focus of a company like Clarity,” said Gerry Perkel, Planar president and chief executive officer. “This acquisition fits very well with our new strategic direction, focusing on specialized display market segments that allow Planar to deliver more value to our customers and sell higher-margin solutions. Clarity brings these attributes to Planar, and provides us with an excellent group of employees to augment the existing talent at our Company. In addition, we believe the acquisition of Clarity increases Planar’s future revenue growth trajectory as well as our future profitability.”

Clarity’s command and control products include premium display solutions targeted at a wide range of market applications, including transportation and traffic control, security and defense programs, energy, broadcast and telecommunication segments. The company is a leader in market applications where large-screen, multiple integrated displays create a “wall of information.” The company’s patented information processing hardware and software solutions control the display of information from a wide variety of sources to the display system application. The market for command and control room visual systems was estimated by iSuppli at more than $400 million globally in 2005, and is forecasted to grow more than 15 percent annually.

The digital signage market in which Clarity participates is experiencing rapid growth driven by a number of factors, including broadband delivery of multimedia content, trends in advertising toward targeted marketing campaigns at the point of purchase, and overall reductions in display component costs due, in part, to broad consumer adoption of related product categories. Clarity and its related “Coolsign” brand has sold over 5,000 signage systems including specialized signage monitors and/or networking software to a variety of attractive market segments, including retail banking, indoor public vendor advertising, casino and hospitality. Planar’s initiatives in retail signage and kiosk systems will be combined with Clarity’s market position in digital signage to address this growing market’s need for display network management software and specialty displays. The worldwide market for electronic signage was estimated by iSuppli at $1.3 billion in 2006, growing to more than $2.3 billion by 2008.

“Clarity’s competitive advantage is in its ability to create innovative, customer-focused solutions for the delivery and display of networked visual information, as well as the talent and commitment of its workforce,” said Paul Gulick, president and chief executive officer of Clarity. “I believe the combination of Clarity’s market leadership in networked display solutions with Planar’s flat-panel specialized display solutions will allow the combined company to uniquely address growth markets around the world.”

Clarity was founded in 1995 and recorded net sales of $59.0 million through the 12 months ending June 30, 2006. Clarity currently employs approximately 200 people, with more than half based at the company’s headquarters in Wilsonville, Oregon. Upon completion of the acquisition, Mr. Gulick, and senior vice president, sales and marketing, Kris Gorriaran will join Planar’s executive team. Mr. Gulick will become Planar’s vice president and chief technology officer, and Ms. Gorriaran will become vice president and general manager of the newly acquired business group. Both will report directly to Mr. Perkel.

Planar’s purchase of Clarity includes the assumption of a net debt to cash position of approximately $6 million and the assumption of all outstanding options to purchase Clarity capital stock. The acquisition is expected to close late in the fourth quarter or early in the first quarter of fiscal 2007, subject to receipt of regulatory approvals, Clarity shareholder approval, and customary closing conditions. The transaction is expected to be slightly accretive to Planar’s internal non-GAAP financial projections in fiscal 2007.

More details relating to the proposed acquisition of Clarity will be discussed in the Company’s third quarter earnings conference call today, July 19, 2006, beginning at 8:30 a.m. Pacific Time. The call can be heard via the Internet through a link on Planar’s Web site, www.planar.com, or through numerous other investor sites, and will be available for replay beginning July 20 until August 19, 2006. The Company intends to post on its Web site a transcript of the prepared management commentary from the conference call shortly after the conclusion of the call.

ABOUT PLANAR

Planar Systems, Inc. (NASDAQ: PLNR) is a leading provider of valued-added display hardware and software for a variety of specialty display markets worldwide. Hospitals, shopping centers, banks, businesses, and other discriminating consumers depend on Planar to provide unique display-based solutions to exacting requirements leveraging its operational excellence, technical innovation, and go-to-market capabilities. Founded in 1983, Planar is headquartered in Oregon, USA, with offices, manufacturing partners, and customers worldwide. For more information, visit www.planar.com.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:

This press release contains forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995 including statements regarding the Company’s proposed acquisition of Clarity Visual Systems, the Company’s expected financial performance, and the Company’s strategic and operational plans. Such statements are based on current expectations, estimates and projections about the Company’s business and its proposed acquisition of Clarity Visual Systems. 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. These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. Actual results could vary materially from the description contained herein due to many factors including: the possibility that the transaction will not close or that the closing may be delayed; difficulties in the integration of the operations, employees, strategies, technologies and products of Clarity Visual Systems if the transaction does close; the potential inability to realize expected benefits and synergies; domestic and international business and economic conditions; changes in the flat-panel monitor industry; changes in customer demand or ordering patterns; changes in the competitive environment including pricing pressures or technological changes; technological advances; shortages of manufacturing capacity from our third-party manufacturing partners; final settlement of contractual liabilities; future production variables impacting excess inventory and other risk factors listed from time to time in the Company’s Securities and Exchange Commission (SEC) filings. The forward-looking statements contained in this press release speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release.

Additional Information and Where to Find It:

In connection with Planar’s acquisition of Clarity Visual Systems, Planar intends to file with the Securities and Exchange Commission a registration statement on Form S-4 that will contain a Proxy Statement/Prospectus. Investors and security holders are urged to read the Registration Statement and the Proxy Statement/Prospectus carefully when they become available because they will contain important information about Planar, Clarity and the acquisition. The Proxy Statement/Prospectus and other relevant materials (when they become available), and any other documents filed by Planar with the SEC, may be obtained free of charge at the SEC’s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of other documents filed with the SEC by Planar by directing a written request to: Planar Systems, Inc., 1195 N.W. Compton Drive, Beaverton, OR 97006, Attention: Investor Relations. Investors and security holders are urged to read the Proxy Statement/Prospectus and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed acquisition.

This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Participants in the Solicitation:

Planar and its directors and executive officers and Clarity Visual Systems and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Clarity in connection with the proposed transaction. Information regarding the special interests of these directors and executive officers in the proposed transaction will be included in the Proxy Statement/Prospectus referred to above. Additional information regarding the directors and executive officers of Planar is also included in Planar’s Annual Report on Form 10-K for the year ended September 30, 2005, which was filed with the SEC on December 14, 2005. This document is available free of charge at the SEC’s web site (www.sec.gov) and from Investor Relations at Planar at the address described above.

MEDIA CONTACTS: Pippa Edelen (Planar) Planar Systems, Inc. 503.748.6983 Pippa_Edelen@Planar.com   or   Dan Dement (Planar) GolinHarris 949.428.3872 ddement@golinharris.com INVESTOR CONTACTS: Ryan Gray Planar Systems, Inc. 503.748.1100 Ryan_Gray@Planar.com