Daktronics, Inc. Announces Fourth Quarter and Fiscal 2012 Results
Declares semi-annual cash dividend of $0.115 per share
Brookings, S.D. – May 30, 2012 - Daktronics, Inc. (NASDAQ - DAKT) today reported fiscal 2012 fourth quarter net sales of $112.0 million and a net loss of $(0.5) million, or $(0.01) per diluted share, compared to net sales of $114.4 million and a net income of $3.0 million, or $0.07 per diluted share, for the fourth quarter of fiscal 2011. Backlog at the end of the fiscal 2012 fourth quarter was approximately $123 million, compared with a backlog of approximately $131 million a year earlier and $121 million at the end of the third quarter of fiscal 2012.
Net sales, net income and earnings per share for the fiscal year ended April 28, 2012 were $489.5 million, $8.5 million and $0.20 per diluted share, respectively. This compares to $441.7 million, $14.2 million and $0.34 per diluted share, respectively, for fiscal 2011.
Free cash flow, defined as cash provided by operations less net purchases of property and equipment, was $3.8 million through the fourth quarter of fiscal 2012, compared to $32.2 million through the same period in fiscal 2011. Cash and marketable securities at the end of the fourth quarter of fiscal 2012 were $55.9 million.
“Our results for the quarter were hampered by lower than expected sales due to changes in customer schedules and cost overruns primarily due to site-related costs on a few larger projects that were completed during the fourth quarter of fiscal 2012,” said Jim Morgan, president and chief executive officer. “The impact of these cost overruns adversely impacted gross profit percentage by approximately 1.5 percentage points.”
Morgan added, “Our Transportation business unit was awarded two projects totaling more than $40 million in the fourth quarter of fiscal 2012, but they were not executed before our fiscal year end and therefore are not included in reported backlog. The first project is for a network of video displays at a major airport and is valued at more than $21 million. This contract has now been executed and will be included in orders for the first quarter of fiscal 2013. The second project is a procurement contract with the New Jersey Turnpike Authority for approximately $20 million over a three year period. We expect that the first $5 million of this contract will book in the first quarter of fiscal 2013. We also had various delays in a few of our larger projects in our Live Events business unit, as well as some delays in order bookings in our Commercial business unit which caused our net sales in the fourth quarter of fiscal 2012 to be lower than expected.”
Orders in the Commercial business unit were up 34 percent for the fourth quarter of fiscal 2012 compared to the prior year's fourth quarter and were up 32 percent for the full fiscal year as compared to fiscal 2011. The growth was driven by higher volume in all three niches, with the billboard and large contract niches both exceeding the overall rate of growth in this business unit. The company was also recently selected by one of its larger outdoor advertising customers, through a competitive bidding process, to be one of its main suppliers in the upcoming two years, which is expected to lead to increased orders from that customer. In addition, during the first half of fiscal 2013, the company will be delivering Galaxy on-premise advertising displays under a multi-million dollar replacement program for a national account customer, which is expected to be ongoing as more displays reach the end of their useful life.
Orders in the fourth quarter of fiscal 2012 for the Live Events business unit were down compared to the fourth quarter of fiscal 2011 due to delays in finalizing some orders with a couple major universities. During the fourth quarter of fiscal 2012, the company completed new integrated display systems for the Detroit Tigers, featuring the DVX high definition outdoor display technology and architectural lighting elements forming the Tigers logo, and for the Miami Marlins featuring multiple high definition LED video displays and an extensive IPTV system providing dynamic content to over 800 LCD displays throughout the stadium.
Orders in the International business unit were hampered in the fourth quarter of fiscal 2012 by delays in closing orders. We have booked some of these orders in the first quarter of fiscal 2013, and other orders are still in final negotiations.
As described previously, the Transportation business unit was awarded an order of approximately $21 million for video displays at a major airport and a procurement contract having a projected value of approximately $20 million with the New Jersey Turnpike Authority. These orders are expected to drive noticeably higher sales in fiscal 2013 as compared to fiscal 2012 in the Transportation business unit.
Orders in the Schools and Theatres business unit were up in the fourth quarter of fiscal 2012 compared to the same period in fiscal 2011. The improvement in the fourth quarter is a reflection of the growing interest in larger video display systems for high schools. Orders for video systems included projects in Nebraska, Oklahoma, Texas, Kansas and Mississippi.
Morgan added, “We are off to a good start with orders in the first month of fiscal 2013. Based on the current backlog and order outlook for the first quarter of fiscal 2013, we expect net sales to increase in the first quarter of fiscal 2013 compared to the fourth quarter of fiscal 2012. We are also expecting that the gross profit percentage will rise slightly and operating expenses will decline slightly in the first quarter of fiscal 2013 as compared to the fourth quarter of fiscal 2012.”
“The competitive environment remains quite intense, adding pressure on gross profit margins. However, we have a strong reputation worldwide, which positions us in many situations to get a price consideration for the value proposition we provide. We continue to challenge ourselves to take costs out of our product and services offerings while maintaining a high level of quality and performance. With the financial performance of this past quarter, cost reduction will be given an even higher level of urgency to get our financial results back to where they need to be.” continued Morgan.
Morgan added, “On the product side, we see a continuing trend toward tighter pixel pitches for outdoor applications, which will drive a higher percentage of products to be built using LED surface mount technology, which allows LEDs to be spaced closer together than traditional through-hole lamp style LEDs. Surface mount technology requires a different electronic assembly process and will require investment in manufacturing equipment to support that process. Our largest product development investment in fiscal 2013 will be in enhancing our product offering that is based on outdoor surface mount LED technology.”
The company approved a regular semi-annual dividend of $0.115 per share. The dividend is payable June 25, 2012 to holders of record at the close of business on June 14, 2012.
The company will host a conference call and webcast to discuss its financial results today at 10:00 am (Central Time). This call will be broadcast live at http://investor.daktronics.com and available for replay shortly after the event.
Daktronics has strong leadership positions in, and is the world's largest supplier of, large screen video displays, electronic scoreboards, LED text and graphics displays, and related control systems. The company excels in the control of display systems, including those that require integration of multiple complex displays showing real-time information, graphics, animation, and video. Daktronics designs, manufactures, markets and services display systems for customers around the world in four domestic business units: Live Events, Commercial, Schools and Theatres and Transportation, and one International business unit. For more information, visit the company's World Wide Web site at: http://www.daktronics.com, e-mail the company at firstname.lastname@example.org, call (605) 692-0200 or toll-free (800) 843-5843 in the United States or write to the company at 201 Daktronics Dr., PO Box 5128, Brookings, S.D. 57006-5128.
Safe Harbor Statement
Cautionary Notice: In addition to statements of historical fact, this news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and is intended to enjoy the protection of that Act. These forward-looking statements reflect the Company's expectations or beliefs concerning future events. The Company cautions that these and similar statements involve risk and uncertainties which could cause actual results to differ materially from our expectations, including, but not limited to, changes in economic and market conditions, management of growth, timing and magnitude of future contracts, fluctuations in margins, the introduction of new products and technology, the impact of adverse weather conditions and other risks noted in the company's SEC filings, including its Annual Report on Form 10-K for its 2011 fiscal year. Forward-looking statements are made in the context of information available as of the date stated. The Company undertakes no obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur.
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For more information contact:
Bill Retterath, Chief Financial Officer
Financial tables are included on the following pages.
The following information was filed by Daktronics Inc (DAKT) on Wednesday, May 30, 2012 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.