Last10K.com

Daktronics Inc (DAKT) SEC Filing 8-K Material Event for the period ending Wednesday, December 1, 2021

Daktronics Inc

CIK: 915779 Ticker: DAKT

Exhibit 99.1

 

 

 

ex_220469img001.jpg

 

Daktronics, Inc. Announces Second Quarter Fiscal 2022 Results

 

Brookings, S.D., December 1, 2021 (GLOBE NEWSWIRE) -- Daktronics, Inc. (NASDAQ - DAKT) today reported results for fiscal 2022 second quarter which ended October 30, 2021.

 

Q2 FY2022 financial highlights:

 

Net sales increased to $164.5 million as compared to Q2 FY2021 net sales of $127.4 million as a result of strong demand and eased pandemic related site restrictions.

Operating income decreased to $4.4 million as compared to Q2 FY2021 operating income of $6.7 million due to inflation in materials and freight costs and increased personnel spend compared to prior year. 

Net income of $2.4 million, and earnings per diluted share of $0.05 compared to net income of $3.4 million, and $0.08 earnings per diluted share, for Q2 FY2021.

Second quarter orders of $163.7 million, grew 20.7% year-over-year, driven by increased market activity as the pandemic restrictions eased and economic conditions improved, including record bookings in Commercial and High School Park and Recreation business units.

Product order backlog of $282 million compared to $201 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 Q2 FY2021.

 

Reece Kurtenbach, chairman, president and chief executive officer stated, "Market demand continued to return to pre-pandemic levels and our order bookings grew through the first half of the year. Our operating expenses have increased as we adjust our capacity to support increased demand levels and convert our record high backlog to sales. At the same time, material, labor, and freight availability constraints are creating headwinds in lead times and are causing inflationary cost pressures."

 

Outlook

Kurtenbach added, "We expect dynamic supply chain conditions to persist through next calendar year. As we continue to work through supply chain challenges, inflationary pressures, and evolving pandemic impacts, we expect volatility in our pricing, order and revenue cycles, and production costs in the near term. Over the long-term, we believe the fundamentals of the audiovisual industry are strong and are poised for continued growth. To position us to benefit from both near term growth and long-term trends, we are actively investing in capacity, in new technologies, and in different markets to make Daktronics and our solutions the preferred choice for new and existing customers."

 

Second Quarter and Year to Date Results

Orders for the second quarter of fiscal 2022 increased 20.7 percent as compared to the second quarter of fiscal 2021. Each business unit's order volume grew through the first half of fiscal 2022 reflecting the recovery from the impact of the global pandemic among our customers. Commercial business unit orders increase is due to strong demand from customers using systems for on-premise promotion and out-of-home advertising. High School Park and Recreation continued growth for the year and quarter is driven by the adoption of video displays for sporting and educational use. Transportation order levels increased as project planning and approval activities resumed and moved forward for displays used in intelligent transportation systems and mass transit venues. The International business unit orders for the quarter were less than last year, same quarter, but improved through the first half of the year. The pandemic recovery in regions around the world has varied. While some countries have eased travel restrictions and we have seen business in those locations increase, other countries still continue to deal with the ongoing challenges of the pandemic. Live Events business unit orders were similar to last year second quarter and increased on a year to date basis.

 

Net sales increased by 29.1 percent in the second quarter of fiscal 2022 as compared to the second quarter of fiscal 2021. Net sales for the six months ended Oct. 30, 2021 increased by 14.1 percent as compared to the same period one year ago. Material supply and labor 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 19.6 percent for the second quarter of fiscal 2022 as compared to 26.2 percent a year earlier and 20.8 percent for the six months ended Oct. 30, 2021 as compared to 25.5 percent for the six months ended 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. In addition, during the second quarter of fiscal 2022 we had more large project sales which generally have lower gross profit because of the competitive nature of large projects.

 

Operating expenses for the second quarter of fiscal 2022 were $27.9 million, compared to $26.7 million for the second quarter of fiscal 2021 or an increase of 4.5 percent and $54.4 million for the six months ended Oct. 30, 2021 as compared to $52.9 million for the six months ended a year prior. The increases were primarily associated with increases in personnel related expenses. 

 

Operating income as a percent of sales for the quarter was 2.7 percent as compared to an operating income as a percent of sales of 5.2 percent during the second quarter of fiscal 2021 and 3.2 percent for six months ended Oct. 30, 2021 as compared to 6.0 percent for the six months ended a year prior. 

 

The effective tax rate expense for the second quarter of fiscal 2022 was 29.6 percent compared to an effective tax rate expense of 41.1 percent for the second quarter of fiscal 2021. The effective tax rate expense for the six months ended Oct. 30, 2021 was 27.0 percent compared to an effective tax rate expense of 26.2 percent for the six months ended a year prior. The difference in tax rates is primarily driven by a decrease in estimated tax credits proportionate to an increase in estimated pre-tax earnings in the second quarter of fiscal 2021 compared to the second quarter of fiscal 2022. 

 

Cash, restricted cash, and marketable securities at the end of the second quarter of fiscal 2022 were $61.6 million, which compares to $74.4 million at the end of the second 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 second 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 $12.3 million for the first six months of fiscal 2022, as compared to a positive free cash flow of $34.5 million for the same period in 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 $3.7 million for fiscal 2022, as compared to $5.4 million for fiscal 2021. 

 

(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. 

 

About Daktronics

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, High School Park and Recreation, and Transportation, and one International business unit. For more information, visit the company's website at: www.daktronics.com, email the company at investor@daktronics.com, call (605) 692-0200 or toll-free (800) 843-5843 in the United States, or write to the company at 201 Daktronics Dr., P.O. 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 and orders, fluctuations in margins, the introduction of new products and technology, the impact of adverse weather conditions, increased regulation and other risks described in the company's SEC filings, including its Annual Report on Form 10-K for its 2021 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.

 

-- END --

 

 

For more information contact:

   

INVESTOR RELATIONS:

   

Sheila M. Anderson, Chief Financial Officer

   

Tel (605) 692-0200

   

Investor@daktronics.com

   

 

 

 

Daktronics, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

 

   

Three Months Ended

   

Six Months Ended

 
   

October 30,

   

October 31,

   

October 30,

   

October 31,

 
   

2021

   

2020

   

2021

   

2020

 

Net sales

  $ 164,477     $ 127,367     $ 309,209     $ 271,011  

Cost of sales

    132,213       94,053       244,757       201,936  

Gross profit

    32,264       33,314       64,452       69,075  
                                 

Operating expenses:

                               

Selling

    12,482       12,654       24,277       24,210  

General and administrative

    8,201       7,264       15,772       14,388  

Product design and development

    7,196       6,737       14,358       14,269  
      27,879       26,655       54,407       52,867  

Operating income

    4,385       6,659       10,045       16,208  
                                 

Nonoperating (expense) income:

                               

Interest (expense) income, net

    (59 )     (18 )     78       (6 )

Other (expense) income, net

    (952 )     (837 )     (1,820 )     (1,464 )
                                 

Income before income taxes

    3,374       5,804       8,303       14,738  

Income tax expense

    1,000       2,388       2,244       3,855  

Net income

  $ 2,374     $ 3,416     $ 6,059     $ 10,883  
                                 

Weighted average shares outstanding:

                               

Basic

    45,350       44,893       45,271       44,808  

Diluted

    45,499       44,977       45,490       44,947  
                                 

Earnings per share:

                               

Basic

  $ 0.05     $ 0.08     $ 0.13     $ 0.24  

Diluted

  $ 0.05     $ 0.08     $ 0.13     $ 0.24  

 

 

 

Daktronics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

 

   

October 30,

   

May 1,

 
   

2021

   

2021

 
   

(unaudited)

         

ASSETS

               

CURRENT ASSETS:

               

Cash and cash equivalents

  $ 59,727     $ 77,590  

Restricted cash

    1,877       2,812  

Accounts receivable, net

    95,156       67,808  

Inventories

    94,790       74,356  

Contract assets

    40,231       32,799  

Current maturities of long-term receivables

    2,167       1,462  

Prepaid expenses and other current assets

    10,897       7,445  

Income tax receivables

    322       731  

Total current assets

    305,167       265,003  
                 

Property and equipment, net

    56,084       58,682  

Long-term receivables, less current maturities

    6,357       1,635  

Goodwill

    8,293       8,414  

Intangibles, net

    1,706       2,083  

Investment in affiliates and other assets

    28,259       27,403  

Deferred income taxes

    11,940       11,944  

Total non-current assets

    112,639       110,161  

TOTAL ASSETS

  $ 417,806     $ 375,164  

 

 

 

Daktronics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (continued)

(in thousands)

 

   

October 30,

   

May 1,

 
   

2021

   

2021

 
   

(unaudited)

         

LIABILITIES AND SHAREHOLDERS' EQUITY

               

CURRENT LIABILITIES:

               

Accounts payable

  $ 65,963     $ 40,251  

Contract liabilities

    70,158       64,495  

Accrued expenses

    32,683       30,672  

Warranty obligations

    10,285       10,464  

Income taxes payable

    850       738  

Total current liabilities

    179,939       146,620  
                 

Long-term warranty obligations

    15,493       15,496  

Long-term contract liabilities

    10,707       10,720  

Other long-term obligations

    9,809       7,816  

Long-term income taxes payable

    682       548  

Deferred income taxes

    373       410  

Total long-term liabilities

    37,064       34,990  

TOTAL LIABILITIES

    217,003       181,610  
                 

SHAREHOLDERS' EQUITY:

               

Common stock

    61,175       60,575  

Additional paid-in capital

    47,412       46,595  

Retained earnings

    102,075       96,016  

Treasury stock, at cost

    (7,101 )     (7,297 )

Accumulated other comprehensive loss

    (2,758 )     (2,335 )

TOTAL SHAREHOLDERS' EQUITY

    200,803       193,554  

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

  $ 417,806     $ 375,164  

 

 

 

Daktronics, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

 

   

Six Months Ended

 
   

October 30,

   

October 31,

 
   

2021

   

2020

 

CASH FLOWS FROM OPERATING ACTIVITIES:

               

Net income

  $ 6,059     $ 10,883  

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

               

Depreciation and amortization

    7,789       8,564  

Gain on sale of property, equipment and other assets

    (676 )     (162 )

Share-based compensation

    1,012       1,047  

Equity in loss of investees

    1,565       1,145  

Provision for doubtful accounts

    (588 )     153  

Deferred income taxes, net

    (41 )     2  

Change in operating assets and liabilities

    (23,654 )     18,343  

Net cash (used in) provided by operating activities

    (8,534 )     39,975  
                 

CASH FLOWS FROM INVESTING ACTIVITIES:

               

Purchases of property and equipment

    (4,507 )     (5,776 )

Proceeds from sales of property, equipment and other assets

    760       341  

Proceeds from sales or maturities of marketable securities

          247  

Purchases of and loans to equity investees

    (6,129 )     (903 )

Net cash used in investing activities

    (9,876 )     (6,091 )
                 

CASH FLOWS FROM FINANCING ACTIVITIES:

               

Principal payments on long-term obligations

    (200 )     (220 )

Proceed from exercise of stock options

    3        

Tax payments related to RSU issuances

    (199 )     (125 )

Net cash used in financing activities

    (396 )     (345 )
                 

EFFECT OF EXCHANGE RATE CHANGES ON CASH

    8       (498 )

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

    (18,798 )     33,041  
                 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH:

               

Beginning of period

    80,402       40,412  

End of period

  $ 61,604     $ 73,453  

 

 

 

Daktronics, Inc. and Subsidiaries

Net Sales and Orders by Business Unit

(in thousands)

(unaudited)

 

   

Three Months Ended

   

Six Months Ended

 
   

October 30,

   

October 31,

   

Dollar

   

Percent

   

October 30,

   

October 31,

   

Dollar

   

Percent

 
   

2021

   

2020

   

Change

   

Change

   

2021

   

2020

   

Change

   

Change

 

Net Sales:

                                                               

Commercial

  $ 34,463     $ 30,356     $ 4,107       13.5 %   $ 67,244     $ 64,862     $ 2,382       3.7 %

Live Events

    59,396       37,822       21,574       57.0       111,783       89,296       22,487       25.2  

High School Park and Recreation

    32,747       27,578       5,169       18.7       60,641       56,521       4,120       7.3  

Transportation

    14,053       15,323       (1,270 )     (8.3 )     26,611       29,821       (3,210 )     (10.8 )

International

    23,818       16,288       7,530       46.2       42,930       30,511       12,419       40.7  
    $ 164,477     $ 127,367     $ 37,110       29.1 %   $ 309,209     $ 271,011     $ 38,198       14.1 %

Orders:

                                                               

Commercial

  $ 58,358     $ 32,590     $ 25,768       79.1 %   $ 96,687     $ 58,123     $ 38,564       66.3 %

Live Events

    40,501       40,684       (183 )     (0.4 )     90,187       82,544       7,643       9.3  

High School Park and Recreation

    25,651       20,117       5,534       27.5       71,362       48,216       23,146       48.0  

Transportation

    14,699       11,633       3,066       26.4       36,044       24,722       11,322       45.8  

International

    24,498       30,642       (6,144 )     (20.1 )     51,173       44,214       6,959       15.7  
    $ 163,707     $ 135,666     $ 28,041       20.7 %   $ 345,453     $ 257,819     $ 87,634       34.0 %

 

 

Reconciliation of Free Cash Flow*

(in thousands)

(unaudited)

 

   

Six Months Ended

 
   

October 30,

   

October 31,

 
   

2021

   

2020

 

Net cash (used in) provided by operating activities

  $ (8,534 )   $ 39,975  

Purchases of property and equipment

    (4,507 )     (5,776 )

Proceeds from sales of property and equipment

    760       341  

Free cash flow

  $ (12,281 )   $ 34,540  

 

*In evaluating its business, Daktronics considers and uses free cash flow as a key measure of its operating performance. The term free cash flow is not defined under accounting principles generally accepted in the United States of America ("GAAP") and is not a measure of operating income, cash flows from operating activities or other GAAP figures and should not be considered alternatives to those computations. Free cash flow is intended to provide information that may be useful for investors when assessing period to period results.

 

 

View differences made from one to another to evaluate Daktronics Inc's financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 8-K Corporate News to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Daktronics Inc.

Continue

Assess how Daktronics Inc's management team is paid from their Annual Proxy

Definitive Proxy Statement (Form DEF 14A)
Screenshot example of actual Proxy Statement

Daktronics Inc's Definitive Proxy Statement (Form DEF 14A) filed after their 2021 10-K Annual Report includes:

  • Voting Procedures
  • Board Members
  • Executive Team
  • Salaries, Bonuses, Perks
  • Peers / Competitors

Continue

SEC Filing Tools

Financial Statements, Disclosures and Schedules

Inside this 8-K Corporate News

Material Contracts, Statements, Certifications & more

Daktronics Inc provided additional information to their SEC Filing as exhibits

Ticker: DAKT
CIK: 915779
Form Type: 8-K Corporate News
Accession Number: 0001437749-21-027628
Submitted to the SEC: Wed Dec 01 2021 4:21:17 PM EST
Accepted by the SEC: Wed Dec 01 2021
Period: Wednesday, December 1, 2021
Industry: Miscellaneous Manufacturing Industries
Events:
  1. Earnings Release
  2. Financial Exhibit

External Resources:
Stock Quote
Social Media

Bookmark the Permalink:
https://last10k.com/sec-filings/dakt/0001437749-21-027628.htm