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Daktronics(DAKT) - 2025 Q4 - Earnings Call Presentation
2025-06-26 07:12
Fiscal Fourth Quarter 2025 Results Call June 25, 2025 NASDAQ: DAKT CONTROL SYSTEMS DYNAMIC MESSAGE SIGNS SAFE HARBOR STATEMENT Forward-Looking Statements: In addition to statements of historical fact, this presentation contains forward-looking statements within the meaning of the federal securities laws and is intended to receive the protections of such laws. All statements, other than historical facts, included or incorporated in this presentation could be deemed forward-looking statements, particularly st ...
Daktronics, Inc. (DAKT) Q4 2025 Earnings Conference Call Transcript
Seeking Alpha· 2025-06-25 22:40
Company Participants - The conference call featured key participants including Andrew D. Siegel, Independent Chair of the Board, and Bradley T. Wiemann, Interim President and CEO [1] - Other notable participants included Carla S. Gatzke, VP of Human Resources & Corporate Secretary, and Howard Ian Atkins, Acting CFO and Chief Transformation Officer [1] Conference Call Overview - The Daktronics Fourth Quarter Fiscal Year '25 Financial Results Conference Call was initiated with an operator's introduction, indicating that the call was being recorded [2] - Carla Gatzke, Corporate Secretary, welcomed participants and outlined the agenda for the earnings conference call [3] Forward-Looking Statements - The company made forward-looking statements regarding expectations and plans for future financial performance and business opportunities, emphasizing that actual results may differ from these expectations [3] - Participants were directed to refer to accompanying materials for information on risk factors and uncertainties that could impact actual results [3] Non-GAAP Financial Measures - The presentation included references to non-GAAP financial measures, with a reconciliation provided in the appendix of the presentation slides [4]
Daktronics(DAKT) - 2025 Q4 - Annual Report
2025-06-25 21:28
[Part I](index=4&type=section&id=PART%20I) [Business Overview](index=4&type=section&id=Item%201.%20BUSINESS) Daktronics is a leading global designer and manufacturer of electronic display systems for sports, commercial, and transportation markets, operating through five segments and focusing on growth and efficiency via a new Business Transformation Office - Daktronics is a global leader in designing and manufacturing electronic display systems, serving sports, commercial, and transportation applications through a full range of activities from design to customer support[13](index=13&type=chunk)[21](index=21&type=chunk) - The company operates through five reportable segments: Commercial, Live Events, High School Park and Recreation, Transportation (all covering the U.S. and Canada), and the International business unit[18](index=18&type=chunk) - In fiscal 2025, a Business Transformation Office (BTO) was formed to review business strategy and develop initiatives for market penetration, growth, and efficiency[14](index=14&type=chunk) Product Order Backlog Trend | Date | Backlog (in millions) | Change (YoY) | | :--- | :--- | :--- | | April 26, 2025 | $341.6 | +7.8% | | April 27, 2024 | $316.9 | | - The company expects to fulfill the **$341.6 million** backlog within the next 24 months, though timing may be impacted by external factors like customer site conditions[60](index=60&type=chunk) - As of April 26, 2025, Daktronics employed **2,702** people globally, with **2,422** full-time and **280** part-time/temporary employees, none represented by a collective bargaining agreement[15](index=15&type=chunk)[76](index=76&type=chunk) [Products and Technologies](index=6&type=section&id=Products%20and%20Technologies) Daktronics' product portfolio includes advanced LED video displays, scoreboards, message displays, and intelligent transportation systems, complemented by integrated sound systems and comprehensive software control suites - The company's systems consist of two main components: the display and the control system, with products customized based on customer specifications and environmental conditions[27](index=27&type=chunk) - Key product families include Video displays/walls, Scoreboards/timing systems, LED Message displays, ITS dynamic message signs, Mass Transit displays, Sound systems, Digital billboards, and various software controllers like Venus® Control Suite (VCS) and Show Control Suite[28](index=28&type=chunk)[39](index=39&type=chunk) - The Venus® Control Suite (VCS) is a key software platform for scheduled content control, available in on-premise or cloud-based configurations, and can be combined with the Show Control Suite for live event applications[47](index=47&type=chunk) [Raw Materials and Competition](index=8&type=section&id=Raw%20Materials%20and%20Competition) The company sources critical raw materials globally, facing supply chain risks from single-source suppliers and intense competition based on product quality, technical expertise, and cost-effectiveness - Key raw materials include LEDs, integrated circuits, printed circuit boards, and power supplies, sourced globally, with some materials from single-source or limited suppliers, creating supply chain risk[49](index=49&type=chunk) - The company competes with a variety of domestic and foreign companies, as well as other advertising forms like television and print media, with competitive factors including product quality, features, technical expertise, service, and cost[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A.%20RISK%20FACTORS) The company faces significant macroeconomic, geopolitical, business, industry, information systems, legal, and regulatory risks, alongside investment-related challenges [Macroeconomic and Geopolitical Risks](index=12&type=section&id=Macroeconomic%20and%20Geopolitical%20Risks) Daktronics is exposed to global trade restrictions, tariffs, economic downturns, and unexpected events that can disrupt its complex supply chain and manufacturing operations - The company's complex manufacturing relies on components from over **40** countries, with China being a major source for semiconductors, and U.S. tariffs on Chinese imports ranging from **10%** to potentially **170%**, increasing costs[81](index=81&type=chunk) - Global economic downturns, inflation, and interest rate fluctuations can adversely affect customer spending and demand for the company's products[82](index=82&type=chunk)[85](index=85&type=chunk) - Unexpected events like natural disasters or wars could damage or close manufacturing facilities in the U.S., Ireland, or China, disrupting operations and supply chains[87](index=87&type=chunk)[88](index=88&type=chunk) [Business and Industry Risks](index=13&type=section&id=Business%20and%20Industry%20Risks) The company faces risks from single-source supplier dependence, intense market competition, intellectual property infringement, logistics failures, cost inflation, and challenges in managing global operations and fixed-price contracts - Dependence on single-source or limited suppliers, especially for semiconductor components from Taiwan and China, creates significant risk of supply chain disruption due to geopolitical tensions[89](index=89&type=chunk)[91](index=91&type=chunk) - The company operates in a highly competitive market and faces pricing pressure from foreign and domestic competitors, requiring continuous product innovation[94](index=94&type=chunk)[95](index=95&type=chunk) - A provision for expected credit losses of **$15.5 million** was recorded as of April 26, 2025, for loans to an affiliate deemed uncollectible[118](index=118&type=chunk)[129](index=129&type=chunk) - The company recorded a goodwill impairment charge of **$4.6 million** in fiscal 2023 for the Live Events and International reporting units, but no impairment was recorded in fiscal 2025 or 2024[132](index=132&type=chunk) - The company is currently recruiting for a new Chief Executive Officer and Chief Financial Officer, and the outcome of these searches is critical for future leadership and strategic direction[133](index=133&type=chunk) [Information Systems, Legal, and Regulatory Risks](index=20&type=section&id=Information%20Systems%2C%20Legal%2C%20and%20Regulatory%20Risks) The company is exposed to cybersecurity breaches, complex global regulatory compliance (anti-corruption, trade, data privacy, ESG), and the potential for significant fines and reputational damage from non-compliance - The business heavily relies on complex IT systems, and any failure or cybersecurity breach could result in disruption, data loss, and significant financial and reputational damage, with early-stage generative AI use also posing data-related risks[138](index=138&type=chunk)[139](index=139&type=chunk) - Global operations require compliance with numerous laws, including anti-corruption regulations like the FCPA and UK Bribery Act, as well as U.S. trade controls and economic sanctions, violations of which can lead to severe penalties[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) - Increasingly stringent privacy and data protection laws worldwide, along with a growing focus on ESG matters, could increase compliance costs and expose the company to regulatory action and reputational harm[148](index=148&type=chunk)[151](index=151&type=chunk) [Cybersecurity](index=26&type=section&id=Item%201C.%20CYBERSECURITY) Daktronics manages cybersecurity risks through a NIST-based program with Board oversight, a dedicated team, external testing, and an incident response plan, having experienced no material incidents to date - The company's cybersecurity program is based on the NIST framework and includes prevention, detection, and remediation measures such as a dedicated security team, third-party assessments, an incident response plan, and employee training[172](index=172&type=chunk)[176](index=176&type=chunk) - The Board's Strategy and Risk Committee provides oversight for cybersecurity risks and strategy, receiving periodic reports from management, with the program led by the VP of Information Technology who has over **25** years of experience[174](index=174&type=chunk)[175](index=175&type=chunk) - The company has not identified any cybersecurity threats or incidents that have materially affected its business strategy, results of operations, or financial condition[173](index=173&type=chunk) [Properties](index=27&type=section&id=Item%202.%20PROPERTIES) Daktronics' principal properties, including owned and leased manufacturing, sales, service, and corporate facilities, are considered adequate for foreseeable needs and secure its senior credit facility Principal Properties | Location | Owned/Leased | Square Footage | Activities | | :--- | :--- | :--- | :--- | | Brookings, SD, USA | Owned | 771,000 | Corporate HQ, Manufacturing, Sales, Service | | Redwood Falls, MN, USA | Owned | 151,000 | Manufacturing, Sales, Service, Office | | Ennistymon, Ireland | Owned | 62,000 | Manufacturing, Sales, Service, Office | | Sioux Falls, SD, USA | Leased | 296,000 | Manufacturing, Sales, Service, Office | | Shanghai, China | Leased | 157,000 | Manufacturing, Sales, Service, Office | - The company's obligations under its credit facility are secured by substantially all of its owned real property[178](index=178&type=chunk) [Part II](index=27&type=section&id=PART%20II) [Stockholder Matters and Equity Purchases](index=27&type=section&id=Item%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) Daktronics' common stock trades on Nasdaq, and the company repurchased **2.1 million** shares for **$29.5 million** in fiscal 2025 under its **$50.0 million** share repurchase program - The company's common stock is listed on The Nasdaq Global Select Market under the ticker DAKT, with **802** stockholders of record as of June 9, 2025[182](index=182&type=chunk) - During fiscal 2025, the company repurchased **2.1 million** shares of its common stock for a total cost of **$29.5 million**, with no shares repurchased in fiscal 2024 or 2023[185](index=185&type=chunk) - As of April 26, 2025, the company had **$9.9 million** of remaining capacity under its share repurchase program[185](index=185&type=chunk) [Management's Discussion and Analysis (MD&A)](index=29&type=section&id=Item%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) In fiscal 2025, Daktronics experienced a decline in net sales and profitability, reporting a **$10.1 million** net loss, driven by lower Live Events volumes and increased operating expenses, while pursuing a Business Transformation Plan - The company is focused on a Business Transformation Plan to grow revenue, expand operating margins to **10-12%**, and achieve **17-20%** returns on capital, having spent approximately **$6.8 million** on these efforts in fiscal 2025[201](index=201&type=chunk) - Market uncertainties, including potential U.S. import tariffs and changes in federal funding priorities, are creating challenges in predicting order timing and volume[193](index=193&type=chunk)[194](index=194&type=chunk) [Consolidated Performance Summary](index=32&type=section&id=Consolidated%20Performance%20Summary) For fiscal 2025, net sales decreased by **7.5%** to **$756.5 million**, resulting in a **$10.1 million** net loss, primarily due to lower Live Events volumes and a significant increase in G&A expenses from transformation and transition costs Fiscal Year 2025 vs. 2024 Performance | Metric | FY 2025 | FY 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $756.5M | $818.1M | ($61.6M) | (7.5)% | | Gross Profit | $195.5M | $222.4M | ($27.0M) | (12.1)% | | Operating Income | $33.1M | $87.1M | ($54.0M) | (62.0)% | | Net (Loss) Income | ($10.1M) | $34.6M | ($44.7M) | (129.2)% | | Diluted EPS | ($0.21) | $0.74 | ($0.95) | (128.4)% | | Orders | $781.3M | $740.2M | $41.2M | 5.6% | - The decrease in net sales was mainly due to lower volumes in the Live Events business unit because of order timing and buildable backlog[208](index=208&type=chunk) - General and administrative expenses rose by **48.9%**, primarily due to **$13.9 million** in professional fees for business transformation and corporate governance, and **$2.6 million** in management transition costs[215](index=215&type=chunk) - Other expense increased significantly due to a **$15.5 million** provision for losses on loans to equity method affiliates[219](index=219&type=chunk) [Reportable Segment Performance Summary](index=35&type=section&id=Reportable%20Segment%20Performance%20Summary) In fiscal 2025, Live Events sales and contribution margin significantly declined, while Commercial and High School segments saw order growth and improved margins, and International continued to operate at a loss - Live Events sales decreased by **$47.0 million** (**13.9%**) and contribution margin fell by **$33.3 million** (**39.2%**) due to lower buildable backlog and sales mix differences[222](index=222&type=chunk)[226](index=226&type=chunk) - Commercial orders increased by **$41.3 million** (**30.6%**) due to market adoption of digital displays, with contribution margin improving by **$4.8 million** (**28.6%**) due to a favorable product mix[222](index=222&type=chunk)[225](index=225&type=chunk) - High School Park and Recreation orders grew by **$27.6 million** (**18.6%**) as schools increasingly adopt larger video solutions[222](index=222&type=chunk)[227](index=227&type=chunk) - International orders increased by **$17.5 million** (**31.7%**), but the segment operated at a negative contribution margin of (**$3.5 million**)[222](index=222&type=chunk)[229](index=229&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) Daktronics maintained strong liquidity with **$127.5 million** in cash, driven by **$97.7 million** in operating cash flow, and expects **$22 million** in capital expenditures for fiscal 2026 Cash Flow Summary (FY 2025) | Activity | Cash Flow (in millions) | | :--- | :--- | | Operating Activities | $97.7 | | Investing Activities | ($23.8) | | Financing Activities | ($27.4) | - Cash and cash equivalents stood at **$127.5 million** as of April 26, 2025[234](index=234&type=chunk) - The company has a **$75.0 million** credit facility, with no borrowings against the **$60.0 million** ABL and an outstanding principal of **$12.4 million** on its mortgage loan as of April 26, 2025[233](index=233&type=chunk) - Projected capital expenditures for fiscal 2026 are approximately **$22 million**, focusing on manufacturing equipment, automation, and IT infrastructure[240](index=240&type=chunk) [Critical Accounting Estimates](index=38&type=section&id=Critical%20Accounting%20Estimates) The company's critical accounting estimates involve significant judgment in revenue recognition for custom contracts using the cost-to-cost method and estimating the **$35.8 million** warranty liability based on historical experience - Revenue for uniquely configured (custom) systems is recognized over time using the cost-to-cost input method, which requires significant management judgment in estimating total contract costs[244](index=244&type=chunk) - The accrued liability for warranty obligations was **$35.8 million** as of April 26, 2025, with this estimate based on historical experience and subject to change based on actual defect rates and repair costs[247](index=247&type=chunk)[248](index=248&type=chunk) [Market Risk Disclosures](index=39&type=section&id=Item%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Daktronics is exposed to foreign currency fluctuations, commodity price volatility, and tariffs, with a **10%** change in foreign exchange rates impacting pre-tax income by approximately **$0.4 million** - In fiscal 2025, **10.6%** of net sales were derived in currencies other than the U.S. dollar, and the company estimates a **10%** change in all foreign exchange rates would impact income before taxes by approximately **$0.4 million**[250](index=250&type=chunk) - The company faces significant commodity risk from its dependence on raw materials and components sourced globally, which are subject to price volatility, supply availability, and tariffs[255](index=255&type=chunk) - As of April 26, 2025, of the **$127.5 million** in cash, **$112.8 million** was denominated in USD and **$14.7 million** was in foreign currencies[253](index=253&type=chunk) [Financial Statements and Supplementary Data](index=41&type=section&id=Item%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section presents Daktronics' audited consolidated financial statements for fiscal 2025, including an unqualified auditor's opinion, detailed notes, and disclosures on critical accounting matters [Report of Independent Registered Public Accounting Firm](index=41&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP issued an unqualified opinion on Daktronics' financial statements and internal controls, identifying revenue recognition for uniquely configured contracts as a critical audit matter due to significant cost estimation judgments - The auditor, Deloitte & Touche LLP, issued an unqualified opinion, stating the financial statements are presented fairly and internal controls were effective[257](index=257&type=chunk)[258](index=258&type=chunk) - A Critical Audit Matter was identified related to revenue recognition for uniquely configured contracts, due to the significant judgments management must make to estimate total costs to complete these projects[262](index=262&type=chunk)[263](index=263&type=chunk) [Consolidated Financial Statements](index=43&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show total assets of **$502.9 million**, a net loss of **$10.1 million** for fiscal 2025, and strong operating cash flow of **$97.7 million**, reflecting changes from share repurchases and affiliate loan losses Consolidated Balance Sheet Highlights (in thousands) | Account | April 26, 2025 | April 27, 2024 | | :--- | :--- | :--- | | Total Current Assets | $381,451 | $401,949 | | Total Assets | $502,892 | $527,884 | | Total Current Liabilities | $172,005 | $192,296 | | Total Liabilities | $230,961 | $289,092 | | Total Stockholders' Equity | $271,931 | $238,792 | Consolidated Statement of Operations Highlights (in thousands) | Account | FY 2025 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | | Net Sales | $756,477 | $818,083 | $754,196 | | Gross Profit | $195,487 | $222,443 | $151,355 | | Operating Income | $33,118 | $87,115 | $21,388 | | Net (Loss) Income | $(10,121) | $34,621 | $6,802 | [Notes to the Consolidated Financial Statements](index=49&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes detail revenue recognition policies, segment performance, the full conversion of a **$25 million** convertible note, **$29.5 million** in share repurchases, a **$15.5 million** credit loss provision, and subsequent events including tariff reductions - The company's investment in affiliates (Miortech and XDC) is accounted for using the equity method, and during FY2025, a provision for expected credit losses of **$15.5 million** was recorded for a loan to an affiliate deemed uncollectible[286](index=286&type=chunk)[289](index=289&type=chunk) - The **$25.0 million** Convertible Note issued to Alta Fox was fully settled through forced conversions into common stock during fiscal 2025[376](index=376&type=chunk)[377](index=377&type=chunk) - The company repurchased **2,071 thousand** shares of common stock for **$29.5 million** in fiscal 2025 under its share repurchase program[383](index=383&type=chunk) - Subsequent to year-end, the U.S. government announced a significant reduction in tariffs on certain Chinese imports, which could favorably impact future costs, though no adjustments were made to the FY2025 financial statements[457](index=457&type=chunk) [Controls and Procedures](index=84&type=section&id=Item%209A.%20CONTROLS%20AND%20PROCEDURES) Management and the independent auditor concluded that Daktronics' disclosure controls and internal control over financial reporting were effective as of April 26, 2025, with no material changes reported - Management concluded that the company's disclosure controls and procedures were effective as of the end of the fiscal year[464](index=464&type=chunk) - Management's assessment concluded that the company's internal control over financial reporting was effective as of April 26, 2025[467](index=467&type=chunk) - The independent registered public accounting firm, Deloitte & Touche, LLP, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting[468](index=468&type=chunk)[471](index=471&type=chunk) [Part III](index=87&type=section&id=PART%20III) [Directors, Executive Compensation, and Corporate Governance](index=87&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%2014) This section incorporates information from the 2025 Proxy Statement regarding directors, executive compensation, corporate governance, security ownership, and principal accountant fees, including the company's Clawback Policy - Information regarding directors, executive officers, corporate governance, executive compensation, and security ownership is incorporated by reference from the company's forthcoming 2025 Proxy Statement[478](index=478&type=chunk)[480](index=480&type=chunk)[483](index=483&type=chunk) - The company has adopted a Clawback Policy in compliance with SEC and Nasdaq rules, allowing for the recoupment of incentive-based compensation from executive officers in the event of a material accounting restatement[481](index=481&type=chunk) [Part IV](index=89&type=section&id=PART%20IV) [Exhibits and Financial Statement Schedules](index=89&type=section&id=Item%2015.%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists all financial statements, schedules, and exhibits filed with the Form 10-K, encompassing corporate governance documents, material contracts, and required certifications - This section contains the list of all financial statements and exhibits filed with the Form 10-K, including governance documents, material contracts, and required certifications[487](index=487&type=chunk)[488](index=488&type=chunk)[489](index=489&type=chunk)
Daktronics(DAKT) - 2025 Q4 - Earnings Call Transcript
2025-06-25 16:02
Daktronics (DAKT) Q4 2025 Earnings Call June 25, 2025 11:00 AM ET Company Participants Carla Gatzke - VP - Human Resources & Corporate SecretaryAndrew Siegel - ChairmanBrad Wiemann - EVP, Interim President & CEOHoward Atkins - Acting CFO, Treasurer & Chief Transformation Officer Conference Call Participants Aaron Spychalla - Senior Research AnalystAnja Soderstrom - Senior Equity Research AnalystMac Furst - Research Analyst Operator Good day, and thank you for standing by. Welcome to the Daktronics Fourth Qu ...
Daktronics(DAKT) - 2025 Q4 - Earnings Call Transcript
2025-06-25 16:00
Financial Data and Key Metrics Changes - The company reported a strong finish to a transformational year, with a 29% increase in backlog from Q3 and a 17% year-over-year increase [15][39] - Adjusted operating income for 2025 was $50 million, down from a record $87 million in 2024, with an adjusted operating income margin of 6.6% compared to 10.6% in 2024 [36][39] - Operating cash flow more than doubled year-over-year, with a 54.5% growth for the year, totaling $97.7 million [32][41] Business Line Data and Key Metrics Changes - In the Live Events segment, orders decreased 12% year-over-year, but the company expects continued growth due to new projects and repeat customers [20][18] - The Commercial business saw a 31% increase in orders for the year and a 44% increase in Q4 compared to the previous year, driven by strong demand in out-of-home advertising [21][22] - Transportation orders decreased 10% year-over-year but increased 14% from Q4, supported by notable wins in intelligent transportation systems [23][24] Market Data and Key Metrics Changes - International orders grew 32% year-over-year and more than doubled from Q4 of the previous year, with significant contributions from advertising orders in various countries [25][26] - The High School Park and Recreation business experienced record orders, growing 19% for the year and 33% for Q4, driven by strong adoption of video solutions [27][28] Company Strategy and Development Direction - The company is focused on achieving higher operating margins of 10% to 12% and a return on invested capital (ROIC) target of 17% to 20% by fiscal year 2028 [47] - The transformation plan includes value-based pricing, revenue mix diversification, and new product introductions to drive growth [48] - The company is committed to maintaining a strong balance sheet and investing in high-growth, high-margin business products [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about revenue growth in FY 2026, supported by a strong backlog and order flow [55][39] - The company is adapting to the tariff environment and remains flexible in its pricing and supply chain strategies [49][50] - Management emphasized the importance of executing the transformation plan and achieving long-term financial objectives [51][52] Other Important Information - The company incurred $16.5 million in non-recurring expenses related to transformation initiatives, with $7.5 million in Q4 [34][35] - A new $10 million share repurchase program was approved by the board, following a previous program [76] Q&A Session Summary Question: Revenue growth outlook for FY 2026 - Management indicated that all markets are expected to show growth, aligning with the 7% to 10% compound annual growth rate target through FY 2028 [55][56] Question: Margin outlook and tariff impacts - Management discussed implementing value-based pricing and driving operational efficiencies to improve margins, despite tariff uncertainties [57][58] Question: Update on commercial segment and AV network expansion - Management highlighted optimism in the commercial business, particularly in out-of-home advertising, and plans to aggressively grow the AV integrator space [60][61] Question: Working capital and capital allocation - Management stated that the primary use of capital will be for growth initiatives, product development, and digital transformation, with share repurchase also being considered [64][66] Question: Strength of international orders and future expectations - Management noted significant growth in international orders and a strong pipeline, which is expected to contribute to revenue growth in FY 2026 [72][73] Question: Future consulting fees related to transformation initiatives - Management confirmed that no additional consulting fees are expected for the completed transformation initiatives, but some new initiatives may arise [74][75]
Daktronics (DAKT) Meets Q4 Earnings Estimates
ZACKS· 2025-06-25 13:46
Company Performance - Daktronics reported quarterly earnings of $0.18 per share, matching the Zacks Consensus Estimate, but down from $0.27 per share a year ago [1] - The company posted revenues of $172.55 million for the quarter ended April 2025, missing the Zacks Consensus Estimate by 14.19%, compared to $215.88 million in the same quarter last year [2] - Over the last four quarters, Daktronics has surpassed consensus EPS estimates only once and has topped consensus revenue estimates two times [2][3] Stock Outlook - Daktronics shares have declined approximately 9.9% since the beginning of the year, while the S&P 500 has gained 3.6% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] Earnings Estimates - The current consensus EPS estimate for the upcoming quarter is $0.29 on revenues of $220.69 million, and for the current fiscal year, it is $1.02 on revenues of $814.44 million [7] - The estimate revisions trend for Daktronics was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Electronics - Miscellaneous Products industry, to which Daktronics belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, which may impact the stock's performance [8]
Daktronics(DAKT) - 2025 Q4 - Annual Results
2025-06-25 13:14
[Financial & Operational Highlights](index=1&type=section&id=Daktronics%2C%20Inc.%20Announces%20Fiscal%20Year%20and%20Fourth%20Quarter%202025%20Results) This section provides an overview of Daktronics' fiscal year 2025 financial and operational performance, highlighting key achievements and reconfirmed long-term objectives [FY2025 Performance Overview](index=1&type=section&id=Fiscal%20Q4%20and%20full%20year%202025%20financial%20highlights%3A) Daktronics reported FY2025 sales of $756.5 million and operating profit of $33.1 million, with a 5.6% increase in orders, 8% rise in backlog, and 55% increase in operating cash flow, while reconfirming long-term growth targets FY2025 Key Performance Indicators | Metric | FY2025 | FY2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $756.5M | $818.1M | -7.5% | | Operating Income (GAAP) | $33.1M | $87.1M | -61.9% | | Adjusted Operating Income | $49.6M | $87.1M | -43.0% | | Net (Loss) Income (GAAP) | ($10.1M) | $34.6M | -129.2% | | Adjusted Net Income | $40.1M | $59.7M | -32.8% | | Orders | $781.3M | $740.2M | +5.6% | | Year-End Product Backlog | $341.6M | $316.9M | +7.8% | | Operating Cash Flow | $97.7M | $63.2M | +54.5% | - The company reconfirmed its three-year forward objectives of **7-10%** sales growth, **10-12%** operating margin, and **17-20%** ROIC[1](index=1&type=chunk) [Detailed Financial Analysis](index=3&type=section&id=Fourth%20Quarter%20and%20Year%20to%20Date%20Results) This section provides an in-depth analysis of the company's revenue, orders, profitability, balance sheet, and cash flow performance for fiscal year 2025 [Revenue and Orders Analysis](index=3&type=section&id=Fourth%20Quarter%20and%20Year%20to%20Date%20Results) FY2025 net sales decreased 7.5% to $756.5 million due to lower Live Events volumes, while full-year orders grew 5.6% to $781.3 million, driven by strong demand in Commercial, High School Park and Recreation, and International segments Net Sales Performance (YoY) | Period | FY2025 | FY2024 | Change | | :--- | :--- | :--- | :--- | | Q4 Sales | $172.6M | $215.9M | -20.1% | | Full Year Sales | $756.5M | $818.1M | -7.5% | Order Growth (YoY) | Period | FY2025 | FY2024 | Change | | :--- | :--- | :--- | :--- | | Q4 Orders | $240.7M | $205.8M | +17.0% | | Full Year Orders | $781.3M | $740.2M | +5.6% | - The decrease in annual sales was primarily driven by the Live Events business unit due to order timing and buildable backlog[10](index=10&type=chunk) - The year-end product backlog increased by **7.8%** to **$341.6 million**, up from **$316.9 million** a year ago, due to the robust increase in Q4 orders[6](index=6&type=chunk) [Profitability Analysis](index=3&type=section&id=Fourth%20Quarter%20and%20Year%20to%20Date%20Results) FY2025 gross profit margin decreased to **25.8%** due to sales mix and lower volume, while operating expenses rose **20.0%** to **$162.4 million** due to **$16.5 million** in one-time costs, resulting in a GAAP net loss of **$10.1 million** - Full-year gross profit margin decreased to **25.8%** in FY2025 from **27.2%** in FY2024, attributed to sales mix differences and lower sales volume[2](index=2&type=chunk)[11](index=11&type=chunk) - FY2025 operating expenses increased by **20.0%** YoY, primarily due to **$16.5 million** in unique expenses, including **$7.1 million** for transformation initiatives, **$6.8 million** for corporate governance, and **$2.6 million** for management transition[12](index=12&type=chunk) Operating & Net (Loss) Income (FY2025 vs FY2024) | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | Operating Income (GAAP) | $33.1M | $87.1M | | Adjusted Operating Income | $49.6M | $87.1M | | Net (Loss) Income (GAAP) | ($10.1M) | $34.6M | | Adjusted Net Income | $40.1M | $59.7M | - The company recorded a provision for possible credit losses of **$15.5 million** in Q4 FY2025 related to affiliate loans[16](index=16&type=chunk) [Balance Sheet and Cash Flow](index=4&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) Daktronics significantly improved its FY2025 financial position, ending with **$127.5 million** in cash, a **54.5%** increase in operating cash flow to **$97.7 million**, and a **23.3%** reduction in inventory, while converting debt and repurchasing stock - Cash, restricted cash, and marketable securities totaled **$127.5 million** at year-end, with only **$12.0 million** of long-term debt outstanding[18](index=18&type=chunk) - Cash flow from operations was **$97.7 million** in FY2025, a **54.5%** increase from **$63.2 million** in FY2024[6](index=6&type=chunk)[19](index=19&type=chunk) - Inventory levels decreased by **23.3%** from the end of FY2024, reflecting successful business transformation initiatives to optimize inventory[19](index=19&type=chunk) - The company issued **4.0 million** shares to convert its convertible note and repurchased **2.1 million** shares for **$29.5 million** during the fiscal year[18](index=18&type=chunk) [Business & Strategic Update](index=2&type=section&id=Business%20Transformation%20Update) This section outlines the company's ongoing business transformation program, its early benefits, and the strategic outlook including long-term objectives and tariff mitigation efforts [Business Transformation Program](index=2&type=section&id=Business%20Transformation%20Update) Daktronics launched a business transformation program in FY2025, yielding early benefits in pricing, inventory, and input costs, with a major Q1 FY2026 rollout of a new Service software system to streamline processes - The transformation program began to yield benefits in the last four months of FY2025 through initiatives in pricing, inventory efficiency, and purchasing[4](index=4&type=chunk) - The company's increased focus on working capital management has reduced accounts receivable and contract assets[4](index=4&type=chunk) - In Q1 FY2026, the company rolled out its Service software system, a major milestone expected to streamline processes and improve customer service[4](index=4&type=chunk) [Outlook and Forward-Looking Statements](index=2&type=section&id=Outlook%20and%20Tariff%20Backdrop) Daktronics is positioned for FY2026 growth, supported by transformation efforts and a strong balance sheet, with a three-year plan focusing on indoor markets and service enhancements, while mitigating tariff uncertainties - The company reconfirmed its three-year financial objectives: **7-10%** sales growth, **10-12%** operating margin, and **17-20%** ROIC[1](index=1&type=chunk) - Strategic priorities include expanding presence in indoor markets, enhancing service offerings, and focusing on high-growth, high-profit sales channels[9](index=9&type=chunk) - The tariff environment remains highly uncertain. The company is mitigating impacts through selective price adjustments, supply chain flexibility, and its global manufacturing footprint[5](index=5&type=chunk)[7](index=7&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) This section presents the detailed consolidated statements of operations, balance sheets, and cash flows for fiscal years 2025 and 2024 [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) This section presents the detailed unaudited income statement for Q4 and full fiscal year 2025, reporting net sales of **$756.5 million** and a net loss of **$10.1 million** for FY2025 Consolidated Statements of Operations (in thousands) | | Three Months Ended | Year Ended | | :--- | :--- | :--- | | | **Apr 26, 2025** | **Apr 27, 2024** | **Apr 26, 2025** | **Apr 27, 2024** | | **Net sales** | **$172,551** | **$215,880** | **$756,477** | **$818,083** | | Gross profit | $43,145 | $55,379 | $195,487 | $222,443 | | Operating (loss) income | ($1,740) | $19,427 | $33,118 | $87,115 | | (Loss) income before income taxes | ($13,438) | $7,167 | ($5,851) | $54,051 | | **Net (loss) income** | **($9,425)** | **$2,518** | **($10,121)** | **$34,621** | | **Diluted (Loss) earnings per share** | **($0.19)** | **$0.05** | **($0.21)** | **$0.74** | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) This section presents the detailed unaudited balance sheet as of April 26, 2025, showing total assets of **$502.9 million**, **$127.5 million** in cash, and total stockholders' equity of **$271.9 million** Consolidated Balance Sheet Highlights (in thousands) | | April 26, 2025 | April 27, 2024 | | :--- | :--- | :--- | | **ASSETS** | | | | Cash and cash equivalents | $127,507 | $81,299 | | Inventories | $105,839 | $138,008 | | Total current assets | $381,451 | $401,949 | | **TOTAL ASSETS** | **$502,892** | **$527,884** | | **LIABILITIES & EQUITY** | | | | Total current liabilities | $172,005 | $192,296 | | Long-term debt, net | $10,487 | $53,164 | | Total liabilities | $230,961 | $289,092 | | **TOTAL STOCKHOLDERS' EQUITY** | **$271,931** | **$238,792** | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section provides the detailed unaudited statement of cash flows for FY2025, showing **$97.7 million** in net cash from operating activities and a net cash increase of **$45.8 million** Consolidated Statements of Cash Flows (in thousands) | | Year Ended Apr 26, 2025 | Year Ended Apr 27, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $97,713 | $63,241 | | Net cash used in investing activities | ($23,782) | ($21,306) | | Net cash (used in) provided by financing activities | ($27,449) | $15,122 | | **NET INCREASE IN CASH** | **$45,829** | **$56,988** | | Cash at beginning of period | $81,678 | $24,690 | | **Cash at end of period** | **$127,507** | **$81,678** | [Supplemental Data & Reconciliations](index=10&type=section&id=Net%20Sales%20and%20Orders%20by%20Business%20Unit) This section provides supplemental financial data, including net sales and orders by business unit, and reconciliations of non-GAAP financial measures [Net Sales and Orders by Business Unit](index=10&type=section&id=Net%20Sales%20and%20Orders%20by%20Business%20Unit) FY2025 order growth was led by International (**+31.7%**), Commercial (**+30.6%**), and High School Park and Recreation (**+18.6%**), while net sales declined across most segments, notably Live Events (**-13.9%**) FY2025 Net Sales by Business Unit (in thousands) | Business Unit | FY2025 Sales | FY2024 Sales | % Change | | :--- | :--- | :--- | :--- | | Commercial | $156,203 | $161,626 | (3.4)% | | Live Events | $291,484 | $338,508 | (13.9)% | | High School Park and Rec | $165,921 | $170,349 | (2.6)% | | Transportation | $81,061 | $85,390 | (5.1)% | | International | $61,808 | $62,210 | (0.6)% | FY2025 Orders by Business Unit (in thousands) | Business Unit | FY2025 Orders | FY2024 Orders | % Change | | :--- | :--- | :--- | :--- | | Commercial | $176,583 | $135,251 | 30.6% | | Live Events | $283,780 | $321,191 | (11.6)% | | High School Park and Rec | $176,097 | $148,505 | 18.6% | | Transportation | $72,315 | $80,107 | (9.7)% | | International | $72,572 | $55,117 | 31.7% | [Non-GAAP Reconciliations](index=10&type=section&id=Reconciliation%20of%20Adjusted%20Operating%20Income%2A) This section provides reconciliations of non-GAAP financial measures, showing FY2025 adjusted operating income of **$49.6 million** and adjusted net income of **$40.1 million** after accounting for specific expenses and non-cash charges FY2025 Reconciliation of Adjusted Operating Income (in thousands) | | Amount | | :--- | :--- | | Operating income (GAAP) | $33,118 | | Corporate governance expenses | $6,825 | | Management transition | $2,614 | | Consultant related expenses | $7,085 | | **Adjusted operating income (non-GAAP)** | **$49,642** | FY2025 Reconciliation of Adjusted Net Income (in thousands) | | Amount | | :--- | :--- | | Net (loss) income (GAAP) | $(10,121) | | Change in fair value of convertible note | $22,521 | | Allowance for credit losses on affiliate loan | $15,480 | | Other adjustments (governance, transition, etc.) | $12,227 | | **Adjusted net income (non-GAAP)** | **$40,107** | - Free cash flow, a non-GAAP measure calculated as net cash from operations less capital expenditures, was **$78.5 million** for fiscal year 2025, compared to **$46.4 million** in fiscal 2024[37](index=37&type=chunk)
Daktronics, Inc. Announces Fiscal Year and Fourth Quarter 2025 Results
Globenewswire· 2025-06-25 11:30
Core Insights - Daktronics, Inc. reported a fiscal year 2025 operating profit of $33 million and an adjusted operating profit of $50 million, despite a fourth quarter operating loss of $2 million [1][5][11] - The company experienced a 29% sequential increase in orders and a 17% year-over-year increase, with a year-end product backlog of $342 million, up 8% [1][5][9] - Operating cash flow for FY2025 increased by 55% to $98 million, with a year-end cash balance of $128 million [1][5][20] Financial Performance - Fourth quarter sales were $172.6 million, down 20.1% compared to the same quarter in fiscal 2024, while full-year sales totaled $756.5 million, a decrease of 7.5% from the previous year [5][11] - Gross profit as a percentage of sales decreased to 25.0% in Q4 2025 from 25.7% in Q4 2024, and for the full year, it decreased to 25.8% from 27.2% [12][14] - Operating expenses increased by 24.8% in Q4 2025 to $44.9 million, and for the full year, they rose by 20.0% to $162.4 million, driven by investments in digital transformation and corporate governance [13][14] Business Transformation - The company initiated a business transformation program in fiscal 2025 aimed at achieving higher profit growth, with benefits starting to materialize in the last four months of the fiscal year [6][8] - Key initiatives included repricing products, improving inventory efficiency, and enhancing working capital management [6][10] - The rollout of a new service software system is expected to streamline processes and improve customer experiences [6] Market Outlook - Daktronics is positioned to capitalize on increasing market demand, with a focus on expanding its presence in indoor markets and enhancing service offerings [8][9] - The company is navigating a highly uncertain tariff environment, implementing measures to mitigate potential impacts [7][10] - The three-year transformation plan aims for 7-10% sales growth, 10-12% operating margin, and 17-20% return on invested capital (ROIC) [1][4][8]
Daktronics, Inc. to Release Fourth Quarter and Fiscal 2025 Financial Results
Globenewswire· 2025-06-10 13:40
BROOKINGS, S.D., June 10, 2025 (GLOBE NEWSWIRE) -- Daktronics, Inc. (NASDAQ-DAKT), announced today it will release its fourth quarter and fiscal 2025 financial results on Wednesday, June 25, 2025 before the market opens. The Company will host a conference call and webcast for all interested parties at 10:00 AM CT that day. Brad Wiemann, Interim Chief Executive Officer, and Howard Atkins, Acting Chief Financial Officer, will host the conference call, which will contain forward-looking statements and other ma ...
Daktronics to Participate in the 22nd Annual Craig-Hallum Institutional Investor Conference on May 28th
Globenewswire· 2025-05-22 21:17
Core Insights - Daktronics, Inc. announced participation in the Craig-Hallum Capital Group's 22nd Annual Institutional Investor Conference on May 28, 2025, with Interim CEO Brad Wiemann and Acting CFO Howard Atkins representing the company [1] Company Overview - Daktronics is the world's largest supplier of large-screen video displays, electronic scoreboards, LED text and graphics displays, and related control systems [2] - The company operates in four domestic business units: Live Events, Commercial, High School Park and Recreation, and Transportation, along with one International business unit [2] - Daktronics specializes in the control of display systems that integrate multiple complex displays to show real-time information, graphics, animation, and video [2]