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Daktronics Inc (DAKT) SEC Filing 10-Q Quarterly Report for the period ending Saturday, July 31, 2021

Daktronics Inc

CIK: 915779 Ticker: DAKT

Exhibit 99.1

 

 

 

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Daktronics, Inc. Announces First Quarter Fiscal 2022 Results

 

Brookings, S.D., September 1, 2021 

(GLOBE NEWSWIRE) -- Daktronics, Inc. (NASDAQ - DAKT) today reported results for fiscal 2022 first quarter which ended July 31, 2021.

 

Q1 FY2022 financial highlights:

 

Net sales of $144.7 million were similar to Q1 FY2021 net sales of $143.6 million.

Operating income of $5.7 million was lower than Q1 FY2021 operating income of $9.5 million due to inflation in materials and freight costs, increased personnel spend compared to prior year during the pandemic, and due to sales mix difference between the two quarters. Operating income as a percent of sales for Q1 FY2022 was 3.9 percent as compared to 6.6 percent in Q1 FY2021.

Net income of $3.7 million, and earnings per diluted share of $0.08 compared to net income of $7.5 million, and $0.17 earnings per diluted share, for Q1 FY2021.

First quarter orders of $181.7 million, grew 48.8% year-over-year, driven by increased market activity as the pandemic restrictions eased and large project bookings.

Product order backlog of $285 million compared to $192 million a year earlier.(1) The increase was driven by strong order volume offset by muted conversion to sales due to supply chain challenges.

Balance sheet remains strong. There were no advances under the loan portion of the line of credit compared to $15 million borrowed at the end of Q1 FY2021.

 

Reece Kurtenbach, chairman, president and chief executive officer stated, "Late last fiscal year, order and quoting activities began to recover as the pandemic impacts subsided. Strong market conditions and recovery continued through the first quarter and orders increased in all business units. At the same time, material, labor, and freight availability constraints are creating headwinds in lead times and inflationary pressures. We expect these headwinds to persist through this calendar year with some impacts continuing into next calendar year. Our teams are performing well to keep up with the robust demand and working through the dynamic supply chain conditions."

 

Outlook

Kurtenbach added, "Our solid backlog and strong pipeline of opportunities positions us for a successful year. However, as we work through supply chain challenges, we expect volatility in our revenue cycles and production costs. Over the long-term, we believe the fundamentals of the audiovisual industry are strong and are poised for growth. We are actively investing in capacity and in new technologies and markets to meet that expected demand with world-leading solutions and value. We look forward to the continued global economic recovery and long-term profitable growth."

 

First Quarter Results

Orders for the first quarter of fiscal 2022 increased 48.8 percent as compared to the first quarter of fiscal 2021. Each business unit's order volume was higher in the first quarter of fiscal 2022 reflecting the recovery from the impact of the global pandemic among our customers. High School Park and Recreation performed well throughout the pandemic and continues to perform well as we emerge from the pandemic driven by the adoption of video displays at the high school level. The increase also was created by several multimillion-dollar orders ("large orders"). During the quarter, we were awarded a number of arena and stadium projects in both International and Live Events and had increased activity in the Commercial and International digital billboard markets. Large orders create volatility in comparisons between quarters.

 

Net sales increased by 0.8 percent in the first quarter of fiscal 2022 as compared to the first quarter of fiscal 2021. Net sales increased in our International business unit, and decreased in the Commercial, High School Park and Recreation, and Transportation business units. Net sales were flat in our Live Events business unit. Material supply shortages are creating an increase in lead times and extending the timing of converting some orders to sales in the near-term. This has created a larger than typical backlog, which we expect to fulfill in future quarters. 

 

Gross profit as a percentage of net sales was 22.2 percent for the first quarter of fiscal 2022 as compared to 24.9 percent a year earlier. The decrease in gross profit is primarily related to increased input costs including material, freight, and tariff costs and increased personnel spend compared to prior year during the pandemic. During the first quarter of fiscal 2022 we had more large project sales which generally have lower gross profit because of the competitive nature of large projects and less service revenue as a percentage of sales.

 

Operating expenses for the first quarter of fiscal 2022 were $26.5 million, compared to $26.2 million for the first quarter of fiscal 2021, or an increase of 1.1 percent. Operating income as a percent of sales for the quarter was 3.9 percent as compared to an operating income as a percent of sales of 6.6 percent during the first quarter of fiscal 2021.

 

The effective tax rate expense for the first quarter of fiscal 2022 was 25.2 percent compared to an effective tax rate expense of 16.4 percent for the first quarter of fiscal 2021. The difference in rates is primarily driven by estimated tax credits and other permanent items proportionate to estimated pre-tax earnings in fiscal 2022 compared to lower estimated pre-tax earnings in fiscal 2021. 

 

Cash, restricted cash, and marketable securities at the end of the first quarter of fiscal 2022 were $77.2 million, which compares to $45.9 million at the end of the first quarter of fiscal 2021 and $80.4 million at the end of fiscal 2021. There were no advances under the loan portion of the line of credit compared to $15 million borrowed at the end of the first quarter of fiscal 2021. Free cash flow, defined as cash provided from or used in operating activities less net investment in property and equipment, was a negative $2.2 million for the first quarter fiscal 2022, as compared to a positive free cash flow of $5.5 million for fiscal 2021. Cash provided from or used in operating activities differed as compared to last year due to an increase in accounts receivable and inventory required to support the increased order volume. Net investment in property and equipment was $1.1 million for fiscal 2022, as compared to $3.1 million for fiscal 2021. During fiscal 2021, the share repurchase and dividend programs were suspended with no related cash outflows during either period presented. These programs will be suspended for the foreseeable future. 

 

(1) Backlog is not a measure defined by accounting principles generally accepted in the United States of America ("GAAP"), and our methodology for determining backlog may vary from the methodology used by other companies in determining their backlog amounts. For more information related to backlog, see Part I, Item 1. Business of our Annual Report on Form 10-K for the fiscal year ended May 1, 2021. 

 

 

The following information was filed by Daktronics Inc (DAKT) on Wednesday, September 1, 2021 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Daktronics Inc's 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Document And Entity Information
Condensed Consolidated Balance Sheets (Current Period Unaudited)
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals)
Condensed Consolidated Statements Of Cash Flows (Unaudited)
Condensed Consolidated Statements Of Comprehensive Income (Unaudited)
Condensed Consolidated Statements Of Operations (Unaudited)
Condensed Consolidated Statements Of Shareholders' Equity (Unaudited)
Note 1 - Basis Of Presentation
Note 1 - Basis Of Presentation (Details Textual)
Note 1 - Basis Of Presentation (Tables)
Note 1 - Basis Of Presentation - Cash, Cash Equivalents, And Restricted Cash (Details)
Note 10 - Fair Value Measurement
Note 10 - Fair Value Measurement (Tables)
Note 10 - Fair Value Measurement - Contingent Liabilities (Details)
Note 10 - Fair Value Measurement - Fair Value Hierarchy (Details)
Note 2 - Investments In Affiliates
Note 2 - Investments In Affiliates (Details Textual)
Note 3 - Earnings Per Share ("Eps")
Note 3 - Earnings Per Share ("Eps") (Details Textual)
Note 3 - Earnings Per Share ("Eps") (Tables)
Note 3 - Earnings Per Share ("Eps") - Earnings Per Share (Details)
Note 4 - Revenue Recognition
Note 4 - Revenue Recognition (Tables)
Note 4 - Revenue Recognition - Contract Assets And Liabilities (Details)
Note 4 - Revenue Recognition - Disaggregation Of Revenue (Details)
Note 4 - Revenue Recognition 1 (Details Textual)
Note 4 - Revenue Recognition 2 (Details Textual)
Note 5 - Segment Reporting
Note 5 - Segment Reporting (Tables)
Note 5 - Segment Reporting - Net Sales And Property And Equipment (Details)
Note 5 - Segment Reporting - Segment Reporting Information (Details)
Note 6 - Goodwill
Note 6 - Goodwill (Details Textual)
Note 6 - Goodwill (Tables)
Note 6 - Goodwill - Goodwill (Details)
Note 7 - Financing Agreements
Note 7 - Financing Agreements (Details Textual)
Note 8 - Commitments And Contingencies
Note 8 - Commitments And Contingencies (Details Textual)
Note 8 - Commitments And Contingencies (Tables)
Note 8 - Commitments And Contingencies - Change In Warranty Obligation (Details)
Note 9 - Income Taxes
Note 9 - Income Taxes (Details Textual)
Significant Accounting Policies (Policies)

Material Contracts, Statements, Certifications & more

Daktronics Inc provided additional information to their SEC Filing as exhibits

Ticker: DAKT
CIK: 915779
Form Type: 10-Q Quarterly Report
Accession Number: 0001437749-21-021317
Submitted to the SEC: Wed Sep 01 2021 4:50:37 PM EST
Accepted by the SEC: Wed Sep 01 2021
Period: Saturday, July 31, 2021
Industry: Miscellaneous Manufacturing Industries

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