FALSE000091577900009157792023-12-052023-12-050000915779us-gaap:CommonStockMember2023-12-052023-12-050000915779us-gaap:PreferredStockMember2023-12-052023-12-05

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): December 5, 2023
dakt20210111_8kimg001.jpg
Daktronics, Inc.
(Exact Name of Registrant as Specified in Charter)
South Dakota
0-23246
46-0306862
(State or Other Jurisdiction of
Incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
201 Daktronics Drive
Brookings, SD 57006
(Address of Principal Executive Offices, and Zip Code)
(605) 692-0200
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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:
☐
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))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, No Par ValueDAKTNasdaq Global Select Market
Preferred Stock Purchase RightsDAKTNasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Section 2 - Financial Information
Item 2.02    Results of Operations and Financial Condition.
On December 5, 2023 Daktronics Inc. (the “Registrant”) issued a press release announcing its financial results for the three and six months ended October 28, 2023 of fiscal 2024. A copy of the press release is filed herewith as Exhibit 99.1 and is incorporated herein by reference.
The information furnished in this report, including the exhibit shall not be incorporated by reference into Daktronics’ filings with the Securities and Exchange Commission under the Securities Act of 1933 and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Securities Act of 1934.
Section 9 – Financial Statements and Exhibits
Item 9.01    Financial Statements and Exhibits:
(d)Exhibits. The following exhibit is furnished as part of this Report:


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, hereunto duly authorized.
DAKTRONICS, INC.
By: /s/ Sheila M. Anderson
Sheila M. Anderson, Chief Financial Officer
Date: December 5, 2023


EXHIBIT INDEX
Exhibit No.Description
104Cover page Interactive Data File (embedded within the Inline XBRL document)





Exhibit 99.1
image_0a.jpg
Daktronics, Inc. Announces 2024 Fiscal Second Quarter Results
Andrew Siegel Appointed New Lead Independent Director

Brookings, S.D., December 5, 2023 (GLOBE NEWSWIRE) -- Daktronics, Inc. (NASDAQ - DAKT) today reported results for its fiscal 2024 second quarter which ended October 28, 2023.

Q2 FY2024 financial highlights:
•Sales of $199.4 million, a 6.4 percent increase from the second quarter of fiscal 2023
•Gross profit as a percentage of net sales of 27.2 percent as compared to 16.9 percent in the second quarter of fiscal 2023
•Operating income of $19.4 million as compared to $1.5 million in the second quarter of fiscal 2023
•Product order backlog was $306.9 million(1) at October 28, 2023 compared to $400.7 million at the end of the fourth quarter of fiscal 2023 and $463.1 million in the year-earlier period.

"Our second quarter performance reflect strong gross profit margin expansion and cash flow generation, contributing to a record first half year of financial results. I attribute our success to our teams strong execution across all business areas and pricing strategies that we undertook over the past several quarters. In addition, our backlog reduction reflects our efforts to reduce lead times and the more stable operating environment, allowing more consistent output," stated Reece Kurtenbach, Daktronics' Chairman, President and Chief Executive Officer."
Andrew Siegel Appointed New Lead Independent Director
Daktronics, Inc. also announced the appointment of Andrew Siegel as Lead Independent Director, succeeding Kevin McDermott who has served as Lead Director since June 2020.

“Kevin provided outstanding leadership to the Board as our Lead Independent Director during a challenging time, including the pandemic business climate, post-pandemic supply-chain crisis, and our recent successful financing," Kurtenbach said. "We thank Kevin for his significant leadership and commitment to Daktronics. We appreciate that his contributions will continue as Chair of the Audit Committee.”

Andrew Siegel joined the Board in July 2022 part of the Company’s ongoing Board refreshment process. He currently manages Prairieland Holdco LLC, which entered into a Cooperation Agreement with the Company at that time, and co-manages, with Lawrence B. Benenson, TLI Bedrock, LLC, a private multi-strategy investment firm.

Mr. Siegel commented, “As an investment firm we were drawn to Daktronics because of its values and culture, its leadership position in its industry, and the exciting prospects as technology continues to enable new applications and markets for the Company’s products, systems and services. As a member of the Board, I am thrilled to have supported the Company’s achievements over the past several quarters, and look forward to working diligently with my fellow directors toward Daktronics strategic vision of profitable growth.”

Second Quarter Income Statement Highlights
Orders for the second quarter of fiscal 2024 were similar to the second quarter of fiscal 2023 though the order volume from our business units differed from that of the year earlier period. Higher orders from customers in the International and
(1) Orders and backlog are not measures defined by accounting principles generally accepted in the United States of America ("GAAP"), and our methodology for determining orders and backlog may vary from the methodology used by other companies in determining their orders and 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 April 29, 2023. this release does not include a reconciliation of orders or backlog, as it would be impractical to do so without unreasonable effort.


Transportation business units offset decreases in the Spectacular and Out-of-Home markets in our Commercial business unit.
Net sales for the second quarter of fiscal 2024 increased by 6.4 percent as compared to the second quarter of fiscal 2023. Sales growth was driven by fulfilling orders in backlog, especially in the High School Park and Recreation, Commercial, and Transportation business units. The increase is attributable to a stable operating environment, increased manufacturing capacity and realization of price increases.
Gross profit as a percentage of net sales increased to 27.2 percent for the second quarter of fiscal 2024 as compared to 16.9 percent a year earlier. The gross profit improvement is due to strategic pricing, our ability to efficiently generate more sales volume over our cost structure and due to the more stable operating environment.
Operating expenses increased 15.2 percent to $34.8 million in the second quarter of fiscal 2024 as compared to $30.2 million for the second quarter of fiscal 2023. This increase primarily attributable to increases in employee compensation and benefits.
Operating income percent for the second quarter of fiscal 2024 was 9.7 percent, compared to 0.8 percent for the second quarter of fiscal 2023 due to the combined factors discussed above.
The increase in interest (expense) income, net for the second quarter of fiscal 2024 compared to the same period one year ago was primarily due to the closing in May 2023 on the financing transactions at higher values and interest rates than were in effect under our previous line of credit during the 2023 second quarter.
For the three months ended October 28, 2023, we recorded a $10.7 million expense for the non-cash change in fair value of the convertible note payable which is accounted for under the fair value option.
The effective tax rate of 64.8 percent resulted in $4.0 million of income tax expense for the second quarter of fiscal 2024. Income before tax includes the impacts of the change in the convertible note fair value; however, these changes are not deductible resulting in the high effective tax rate. The $14.0 million tax expense for the second quarter of fiscal 2023 was primarily a result of a $13.0 million valuation allowance recorded against our net deferred tax assets. Absent any major tax changes, we expect our full year effective tax rate to be in the mid-twenties before the impacts of fair value accounting for the convertible note.
Balance Sheet and Cash Flow
At the end of the fiscal 2024 second quarter, our working capital ratio was 2.0 to 1. Inventory levels dropped slightly since the end of the fiscal year ended April 29, 2023. Our focus remains on managing working capital through expected growth of the company. Cash, restricted cash and marketable securities totaled $73.5 million, and $56.6 million of long-term debt was outstanding. The long-term debt includes the face value of the debt of $39.6 million, $17.9 million adjustment to fair value, and $0.9 million of debt issuance costs, net. Restricted cash consists of cash and cash equivalents held in bank deposit accounts to secure issuances of foreign bank guarantees and letters of credit outstanding under a previous credit agreement. There were no draw-downs on our line of credit during the first six months of fiscal 2024. In the first six months of fiscal 2024, we generated $44.3 million from operations and used $9.2 million for purchases of property and equipment.

Fiscal Year 2024 and Beyond Priorities and Strategies
Kurtenbach added, “As we look ahead, we expect growth in the global use of sophisticated audio-visual communication systems in both traditional and in new applications. Our attention remains focused on our multi-year journey to capture the market's expected growth and broaden our leading market position by offering best in class technology, capabilities and services to both our traditional customer base as well as new and adjacent markets."

Looking forward, our focus is to:

•Grow our business profitably while generating cash through working capital management, strategic pricing adjustments, product mix enhancements and careful expense management
•Improve operational efficiency to lower costs, reduce lead times and improve the customer experience
•Develop additional markets for new customers and channels while continuing to grow in the markets where the company been a leader to date
•Implement robust integrated business planning systems to generate data-based insights for improved decision making
(1) Orders and backlog are not measures defined by accounting principles generally accepted in the United States of America ("GAAP"), and our methodology for determining orders and backlog may vary from the methodology used by other companies in determining their orders and 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 April 29, 2023. this release does not include a reconciliation of orders or backlog, as it would be impractical to do so without unreasonable effort.


•Investing in high-return projects and technologies, including digital technologies for both internal and customer facing uses
•Monitor and then adjust as necessary to the ever-evolving geopolitical and global economic environment to maintain profitability and cash generation

Webcast Information
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 be available for replay shortly after the event.

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 2023 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
(1) Orders and backlog are not measures defined by accounting principles generally accepted in the United States of America ("GAAP"), and our methodology for determining orders and backlog may vary from the methodology used by other companies in determining their orders and 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 April 29, 2023. this release does not include a reconciliation of orders or backlog, as it would be impractical to do so without unreasonable effort.


Daktronics, Inc. and Subsidiaries
Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months EndedSix Months Ended
October 28,
2023		October 29,
2022		October 28,
2023		October 29,
2022
Net sales$199,369 $187,439 $431,900 $359,359 
Cost of sales145,170 155,735 306,554 301,861 
Gross profit54,199 31,704 125,346 57,498 
Operating expenses:
Selling14,653 14,525 27,582 28,958 
General and administrative10,889 8,687 20,488 18,128 
Product design and development9,221 6,966 17,624 14,405 
34,763 30,178 65,694 61,491 
Operating income (loss)19,436 1,526 59,652 (3,993)
Nonoperating (expense) income:
Interest (expense) income, net(1,326)(263)(2,207)(323)
Change in fair value of convertible note(10,650)— (17,910)— 
Other expense and debt issuance costs write-off, net(1,303)(208)(5,282)(955)
Income (loss) before income taxes6,157 1,055 34,253 (5,271)
Income tax expense3,992 14,039 12,892 13,039 
Net income (loss)$2,165 $(12,984)$21,361 $(18,310)
Weighted average shares outstanding:
Basic46,030 45,317 45,838 45,258 
Diluted46,705 45,317 46,454 45,258 
Earnings (loss) per share:
Basic$0.05 $(0.29)$0.47 $(0.40)
Diluted$0.05 $(0.29)$0.46 $(0.40)


Daktronics, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands)
(unaudited)
October 28,
2023		April 29,
2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$64,740 $23,982 
Restricted cash8,246 708 
Marketable securities546 534 
Accounts receivable, net115,052 109,979 
Inventories141,646 149,448 
Contract assets45,210 46,789 
Current maturities of long-term receivables766 1,215 
Prepaid expenses and other current assets10,137 9,676 
Income tax receivables— 326 
Total current assets386,343 342,657 
Property and equipment, net72,619 72,147 
Long-term receivables, less current maturities151 264 
Goodwill3,198 3,239 
Intangibles, net970 1,136 
Debt issuance costs, net3,150 3,866 
Investment in affiliates and other assets27,705 27,928 
Deferred income taxes16,812 16,867 
TOTAL ASSETS$510,948 $468,104 


Daktronics, Inc. and Subsidiaries
Consolidated Balance Sheets (continued)
(in thousands)
(unaudited)
October 28,
2023		April 29,
2023
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt$1,500 $— 
Accounts payable53,645 67,522 
Contract liabilities78,293 91,549 
Accrued expenses39,773 36,005 
Warranty obligations13,378 12,228 
Income taxes payable3,347 2,859 
Total current liabilities189,936 210,163 
Long-term warranty obligations21,435 20,313 
Long-term contract liabilities15,390 13,096 
Other long-term obligations5,686 5,709 
Long-term debt, net55,087 17,750 
Deferred income taxes193 195 
Total long-term liabilities97,791 57,063 
SHAREHOLDERS' EQUITY:
Preferred Shares, no par value, authorized 50,000 shares; no shares issued and outstanding— — 
Common Stock, no par value, authorized 115,000,000 shares; 46,022,885 and 45,488,595 shares issued at October 28, 2023 and April 29, 2023, respectively
64,643 63,023 
Additional paid-in capital51,047 50,259 
Retained earnings124,771 103,410 
Treasury Stock, at cost, 1,907,445 shares at October 28, 2023 and April 29, 2023, respectively
(10,285)(10,285)
Accumulated other comprehensive loss(6,955)(5,529)
TOTAL SHAREHOLDERS' EQUITY223,221 200,878 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$510,948 $468,104 


Daktronics, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended
October 28,
2023		October 29,
2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)$21,361 $(18,310)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization9,494 8,225 
Loss (gain) on sale of property, equipment and other assets101 (412)
Share-based compensation1,091 985 
Equity in loss of affiliates1,461 1,701 
Provision for doubtful accounts, net240 573 
Deferred income taxes, net20 13,037 
Non-cash impairment charges654 — 
Change in fair value of convertible note17,910 — 
Debt issuance costs write-off3,353 — 
Change in operating assets and liabilities(11,374)(27,737)
Net cash provided by (used in) operating activities44,311 (21,938)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment(9,226)(16,237)
Proceeds from sales of property, equipment and other assets52 432 
Proceeds from sales or maturities of marketable securities— 3,495 
Purchases of equity and loans to equity investees(2,899)(2,882)
Net cash used in investing activities(12,073)(15,192)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on notes payable40,000 190,608 
Payments on notes payable(18,125)(164,190)
Principal payments on long-term obligations(204)— 
Debt issuance costs(6,454)— 
Proceeds from exercise of stock options1,005 — 
Tax payments related to RSU issuances(303)(140)
Net cash provided by financing activities15,919 26,278 
EFFECT OF EXCHANGE RATE CHANGES ON CASH139 (13)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH48,296 (10,865)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period24,690 18,008 
End of period$72,986 $7,143 


Daktronics, Inc. and Subsidiaries
Net Sales and Orders by Business Unit
(in thousands)
(unaudited)
Three Months EndedSix Months Ended
(in thousands)October 28, 2023October 29, 2022Dollar ChangePercent ChangeOctober 28, 2023October 29, 2022Dollar ChangePercent Change
Net Sales:
Commercial$42,453 $37,047 $5,406 14.6 %$89,336 $77,165 $12,171 15.8 %
Live Events68,210 69,239 (1,029)(1.5)160,209 125,622 34,587 27.5 
High School Park and Recreation48,942 42,006 6,936 16.5 105,176 77,815 27,361 35.2 
Transportation20,243 16,679 3,564 21.4 41,612 36,219 5,393 14.9 
International19,521 22,468 (2,947)(13.1)35,567 42,538 (6,971)(16.4)
$199,369 $187,439 $11,930 6.4 %$431,900 $359,359 $72,541 20.2 %
Orders: (1)
Commercial$34,209 $42,711 $(8,502)(19.9)%$66,643 $90,389 $(23,746)(26.3)%
Live Events79,016 80,999 (1,983)(2.4)131,219 132,752 (1,533)(1.2)
High School Park and Recreation32,800 31,898 902 2.8 68,539 69,477 (938)(1.4)
Transportation21,500 16,583 4,917 29.7 40,485 32,287 8,198 25.4 
International16,168 10,616 5,552 52.3 35,437 28,125 7,312 26.0 
$183,693 $182,807 $886 0.5 %$342,323 $353,030 $(10,707)(3.0)%

Reconciliation of Free Cash Flow*
(in thousands)
(unaudited)
Six Months Ended
October 28,
2023		October 29,
2022
Net cash provided by (used in) operating activities
$44,311 $(21,938)
Purchases of property and equipment
(9,226)(16,237)
Proceeds from sales of property and equipment
52 432 
Free cash flow
$35,137 $(37,743)
*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.













Reconciliation of Adjusted Net Income (loss)*
(in thousands)
(unaudited)

Three Months EndedSix Months Ended
October 28,
2023		October 29,
2022		October 28,
2023		October 29,
2022
Net income (loss)$2,165 $(12,984)$21,361 $(18,310)
Change in fair value of convertible note10,650 — 17,910 — 
Debt issuance costs expensed due to fair value of convertible note, net of taxes— — 2,092 — 
Adjusted net income (loss)$12,815 $(12,984)$41,363 $(18,310)

*Adjusted net income. We disclose adjusted net income as a non-GAAP financial measurement in order to report our results exclusive of items that are non-recurring or not core to our operating business. We believe presenting this non-GAAP financial measurements provides investors with a consistent way to analyze our performance.

Reconciliation of Long-term Debt
(in thousands)
(unaudited)
Long-term debt consists of the following:
October 28,
2023		April 29,
2023
Prior line of credit$— $17,750 
Mortgage14,625 — 
Convertible note25,000 — 
Long-term debt, gross39,625 17,750 
Debt issuance costs, net(948)— 
Change in fair value of convertible note17,910 — 
Current portion(1,500)— 
Long-term debt, net$55,087 $17,750 




v3.23.3
Cover
Dec. 05, 2023
Document Information [Line Items]  
Document Type 8-K
Document Period End Date Dec. 05, 2023
Entity Registrant Name Daktronics, Inc.
Entity Incorporation, State or Country Code SD
Entity File Number 0-23246
Entity Tax Identification Number 46-0306862
Entity Address, Address Line One 201 Daktronics Drive
Entity Address, City or Town Brookings
Entity Address, State or Province SD
Entity Address, Postal Zip Code 57006
City Area Code 605
Local Phone Number 692-0200
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0000915779
Common Stock  
Document Information [Line Items]  
Title of 12(b) Security Common Stock, No Par Value
Trading Symbol DAKT
Security Exchange Name NASDAQ
Preferred Stock  
Document Information [Line Items]  
Title of 12(b) Security Preferred Stock Purchase Rights
Trading Symbol DAKT
Security Exchange Name NASDAQ
Daktronics (NASDAQ:DAKT)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more Daktronics Charts.
Daktronics (NASDAQ:DAKT)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more Daktronics Charts.