FALSE000091577900009157792024-02-282024-02-280000915779us-gaap:CommonStockMember2024-02-282024-02-280000915779us-gaap:PreferredStockMember2024-02-282024-02-28

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): February 28, 2024
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 February 28, 2024 Daktronics Inc. (the “Registrant”) issued a press release announcing its financial results for the three and nine months ended January 27, 2024 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: February 28, 2024


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





Exhibit 99.1
image_0.jpg
Daktronics, Inc. Announces 2024 Fiscal Third Quarter Results

BROOKINGS, S.D., February 28, 2024 – Daktronics, Inc. (NASDAQ-DAKT), a leading global designer and manufacturer of best-in-class dynamic video communication displays and control systems for customers worldwide, today reported results for its fiscal 2024 third quarter which ended January 27, 2024.

Q3 FY2024 financial highlights:
•Year-to-date product and service orders were $534.4 million(1), an increase of 6.6 percent as compared to $501.4 million in the same period of fiscal 2023; during the third quarter of fiscal 2024, new product and service orders were $192.1 million, a 29.4 percent increase from $148.4 million in the year-earlier period
•Sales of $170.3 million, a 7.9 percent decrease from the third quarter of fiscal 2023; the year-ago period's record revenue was driven by high backorder fulfillment as a result of recovery from pandemic-related supply chain challenges and labor availability
•Gross profit as a percentage of net sales of 24.5 percent as compared to 22.6 percent in the third quarter of fiscal 2023
•Operating income of $8.0 million, a 12.9 percent increase as compared to $7.1 million in the third quarter of fiscal 2023
•Product order backlog was $328.3 million(1) at January 27, 2024 compared to $400.7 million at the end of the fourth quarter of fiscal 2023 and $429.1 million at the end of the third quarter of fiscal 2023 as past periods' overbuilt backlog continues to be worked down through reductions in manufacturing lead times

"Our teams’ strong execution of the manufacturing, operating, sourcing and pricing improvements that we put in place over the past two years drove efficiencies and raised the baseline profitability of the business. As a result, we delivered positive operating income in a seasonally low-volume period that is historically a loss quarter despite lower volume compared to last year’s high level of backorder fulfillment. This performance, plus careful working capital management, generated $8.0 million in operating income. Our orders are up 6.6 percent year-to-date on strong third quarter growth of 29.4 percent, reflecting strengthening demand in each of our domestic end markets,” stated Reece Kurtenbach, Daktronicsʹ Chairman, President and Chief Executive Officer.

FQ4 Outlook
Fiscal fourth quarter seasonality is expected to be similar to pre-pandemic patterns. Fiscal 2024 fourth quarter net sales are expected to increase sequentially as compared to the third quarter in fiscal year 2024 and decrease from the year-ago period, which was again a high-volume period in which we were fulfilling backorders related to pandemic recovery. Gross margin is expected to be similar in comparison to the unique 2023 fourth quarter and operating margin and cash flows are expected to be down as compared to this same period.

Kurtenbach added, “Our year-to-date results reflect our strengthened performance and serve as evidence that we have successfully adapted to the business conditions that challenged Daktronics. Our focus for the remainder of the fiscal year is on capturing growth in our addressable end markets by expanding our share of customer spend, adding recurring control system and content development revenue where applicable, and winning new customers. We are also leveraging narrow pixel pitch and other technologies to deepen our penetration of current and enter potential new end markets, including military. Last, we continue to increase our nimbleness and flexibility in capacity allocation and utilization, qualifying each of our plants around the world for selected product manufacture and carefully assigning capacity, adjusting utilization where necessary.”
(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.


Third Quarter Performance
Orders for the third quarter of fiscal 2024 increased by 29.4 percent from the third quarter of fiscal 2023 driven by strong demand in the Live Events business unit, rebounding demand in the Spectacular and Out‐of‐Home markets in our Commercial business unit, and solid growth in the High School Parks and Recreation and Transportation business units. These higher orders offset an order decrease in the International business unit.
Net sales for the third quarter of fiscal 2024 decreased by 7.9 percent as compared to the third quarter of fiscal 2023. The third quarter of every year is characterized by seasonally lower volume, and the decrease is attributable to the year-ago period’s unseasonably record revenue driven by high backorder fulfillment resulting from recovery of pandemic-related supply chain challenges and labor availability. The sales decrease was driven by comparatively lower volumes in the Commercial and International business units, partially offset by order fulfillments in the Live Events, High School Park and Recreation, and Transportation business units.
Gross profit as a percentage of net sales increased to 24.5 percent for the third quarter of fiscal 2024 as compared to 22.6 percent a year earlier. The gross profit improvement is due to strategic pricing, greater efficiency of sales volume generation over the cost structure, and a more stable operating environment.
Operating expenses decreased 2.6 percent to $33.7 million in the third quarter of fiscal 2024 as compared to $34.6 million for the third quarter of fiscal 2023. This decrease is primarily attributable to recording a $4.6 million non-cash goodwill impairment charge during the third quarter of fiscal 2023 that was not repeated in the third quarter of fiscal 2024. This decrease is partially offset by the increases in personnel-related expenses.
Operating income percent for the third quarter of fiscal 2024 was 4.7 percent compared to 3.8 percent for the third quarter of fiscal 2023 due to the combined factors discussed above.
The increase in interest (expense) income, net for the third 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 third quarter.
For the three months ended January 27, 2024, the Company recorded $6.3 million of income 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 15.0 percent resulted in $1.9 million of income tax expense for the third quarter of fiscal 2024. Income before tax includes the impacts of the change in the convertible note fair value; however, these changes are not taxable for tax purposes which impacts the effective tax rate. The reduction in the fair value adjustment during the third quarter of fiscal 2024 resulted in a lower than normal effective tax rate. 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
Cash, restricted cash and marketable securities totaled $77.2 million at January 27, 2024, and $50.0 million of long-term debt was outstanding as of that date. The long-term debt includes the face value of the debt of $39.3 million, the $11.6 million adjustment to fair value, and $0.9 million of debt issuance costs, net. There were no draw-downs on our asset-based revolving credit facility during the first nine months of fiscal 2024 and $32.9 million available to draw at January 27, 2024. In the first nine months of fiscal 2024, we generated $53.8 million from operations and used $13.6 million for purchases of property and equipment. At the end of the fiscal 2024 third quarter, our working capital ratio was 2.2 to 1. Inventory levels dropped 6.2 percent since the end of the 2023 fiscal year on April 29, 2023 and dropped slightly since the end of the second fiscal quarter of 2024. Management’s focus remains on managing working capital through expected growth of the company.

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 where related presentation materials will also be posted prior to the conference call. A webcast will 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
(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.


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.

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 EndedNine Months Ended
January 27,
2024		January 28,
2023		January 27,
2024		January 28,
2023
Net sales$170,303 $184,975 $602,203 $544,334 
Cost of sales128,585 143,262 435,139 445,123 
Gross profit41,718 41,713 167,064 99,211 
Operating expenses:
Selling14,258 12,908 41,840 41,866 
General and administrative10,589 9,861 31,077 27,989 
Product design and development8,835 7,250 26,459 21,655 
Goodwill impairment— 4,576 — 4,576 
33,682 34,595 99,376 96,086 
Operating income8,036 7,118 67,688 3,125 
Nonoperating (expense) income:
Interest (expense) income, net(745)(398)(2,952)(721)
Change in fair value of convertible note6,340 — (11,570)— 
Other expense and debt issuance costs write-off, net(1,000)(1,380)(6,282)(2,335)
Income before income taxes12,631 5,340 46,884 69 
Income tax expense1,889 1,627 14,781 14,666 
Net income (loss)$10,742 $3,713 $32,103 $(14,597)
Weighted average shares outstanding:
Basic46,173 45,387 45,975 45,320 
Diluted50,837 45,448 46,608 45,320 
Earnings (loss) per share:
Basic$0.23 $0.08 $0.70 $(0.32)
Diluted$0.09 $0.08 $0.69 $(0.32)


Daktronics, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands)
(unaudited)
January 27,
2024		April 29,
2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$76,764 $23,982 
Restricted cash429 708 
Marketable securities— 534 
Accounts receivable, net100,601 109,979 
Inventories140,251 149,448 
Contract assets47,857 46,789 
Current maturities of long-term receivables271 1,215 
Prepaid expenses and other current assets7,853 9,676 
Income tax receivables1,504 326 
Total current assets375,530 342,657 
Property and equipment, net72,406 72,147 
Long-term receivables, less current maturities95 264 
Goodwill3,263 3,239 
Intangibles, net923 1,136 
Debt issuance costs, net2,840 3,866 
Investment in affiliates and other assets27,314 27,928 
Deferred income taxes16,835 16,867 
TOTAL ASSETS$499,206 $468,104 


Daktronics, Inc. and Subsidiaries
Consolidated Balance Sheets (continued)
(in thousands)
(unaudited)
January 27,
2024		April 29,
2023
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt$1,500 $— 
Accounts payable49,489 67,522 
Contract liabilities68,936 91,549 
Accrued expenses36,824 36,005 
Warranty obligations12,884 12,228 
Income taxes payable628 2,859 
Total current liabilities170,261 210,163 
Long-term warranty obligations21,806 20,313 
Long-term contract liabilities16,347 13,096 
Other long-term obligations5,882 5,709 
Long-term debt, net48,466 17,750 
Deferred income taxes198 195 
Total long-term liabilities92,699 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; 46,189,311 and 45,488,595 shares issued at January 27, 2024 and April 29, 2023, respectively
65,371 63,023 
Additional paid-in capital51,554 50,259 
Retained earnings135,513 103,410 
Treasury Stock, at cost, 1,907,445 shares at January 27, 2024 and April 29, 2023, respectively
(10,285)(10,285)
Accumulated other comprehensive loss(5,907)(5,529)
TOTAL SHAREHOLDERS' EQUITY236,246 200,878 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$499,206 $468,104 


Daktronics, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended
January 27,
2024		January 28,
2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)$32,103 $(14,597)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization14,370 12,543 
Loss (gain) on sale of property, equipment and other assets98 (588)
Share-based compensation1,598 1,487 
Equity in loss of affiliates2,330 2,596 
Provision for doubtful accounts, net659 674 
Deferred income taxes, net23 13,028 
Non-cash impairment charges1,091 4,576 
Change in fair value of convertible note11,570 — 
Debt issuance costs write-off3,353 — 
Change in operating assets and liabilities(13,406)(29,206)
Net cash provided by (used in) operating activities53,789 (9,487)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment(13,628)(21,809)
Proceeds from sales of property, equipment and other assets107 612 
Proceeds from sales or maturities of marketable securities550 3,490 
Purchases of equity and loans to equity investees(4,084)(3,240)
Net cash used in investing activities(17,055)(20,947)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on notes payable40,485 283,115 
Payments on notes payable(18,500)(259,477)
Principal payments on long-term obligations(307)— 
Debt issuance costs(6,833)— 
Proceeds from exercise of stock options1,147 — 
Tax payments related to RSU issuances(303)(140)
Net cash provided by financing activities15,689 23,498 
EFFECT OF EXCHANGE RATE CHANGES ON CASH80 (342)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH52,503 (7,278)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period24,690 18,008 
End of period$77,193 $10,730 


Daktronics, Inc. and Subsidiaries
Net Sales and Orders by Business Unit
(in thousands)
(unaudited)
Three Months EndedNine Months Ended
(in thousands)January 27, 2024January 28, 2023Dollar ChangePercent ChangeJanuary 27, 2024January 28, 2023Dollar ChangePercent Change
Net Sales:
Commercial$33,292 $49,967 $(16,675)(33.4)%$122,628 $127,132 $(4,504)(3.5)%
Live Events73,393 67,748 5,645 8.3 233,602 193,370 40,232 20.8 
High School Park and Recreation28,764 28,312 452 1.6 133,940 106,127 27,813 26.2 
Transportation19,605 17,578 2,027 11.5 61,217 53,797 7,420 13.8 
International15,249 21,370 (6,121)(28.6)50,816 63,908 (13,092)(20.5)
$170,303 $184,975 $(14,672)(7.9)%$602,203 $544,334 $57,869 10.6 %
Orders: (1)
Commercial$34,524 $28,737 $5,787 20.1 %$101,167 $119,126 $(17,959)(15.1)%
Live Events95,217 61,011 34,206 56.1 226,436 193,763 32,673 16.9 
High School Park and Recreation35,385 28,097 7,288 25.9 103,924 97,574 6,350 6.5 
Transportation18,924 13,525 5,399 39.9 59,409 45,812 13,597 29.7 
International8,013 17,005 (8,992)(52.9)43,450 45,130 (1,680)(3.7)
$192,063 $148,375 $43,688 29.4 %$534,386 $501,405 $32,981 6.6 %

Reconciliation of Free Cash Flow*
(in thousands)
(unaudited)
Nine Months Ended
January 27,
2024		January 28,
2023
Net cash provided by (used in) operating activities
$53,789 $(9,487)
Purchases of property and equipment
(13,628)(21,809)
Proceeds from sales of property and equipment
107 612 
Free cash flow
$40,268 $(30,684)
*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. Daktronics' free cash flow may not have the same meaning or be calculated in the same way as the same or similar terms used by other companies.











Reconciliation of Adjusted Operating Income*
(in thousands)
(unaudited)

Three Months EndedNine Months Ended
January 27,
2024		January 28,
2023		January 27,
2024		January 28,
2023
Operating income (GAAP Measure)$8,036 $7,118 $67,688 $3,125 
Plus goodwill impairment— 4,576 — 4,576 
Adjusted operating income (non-GAAP measure)$8,036 $11,694 $67,688 $7,701 
*In evaluating its business, Daktronics considers and uses adjusted operating income as a key measure of its operating performance. The term adjusted operating income is not defined under 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. We define non-GAAP adjusted operating income as operating income plus asset impairments. Management believes non-GAAP adjusted operating income is a useful indicator of our financial performance and our ability to generate cash flows from operations. Our definition of non-GAAP adjusted operating income may not be comparable to similarly titled definitions used by other companies. The table above reconciles non-GAAP adjusted operating income to comparable GAAP financial measures.

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

Three Months EndedNine Months Ended
January 27,
2024		January 28,
2023		January 27,
2024		January 28,
2023
Net income (loss)$10,742 $3,713 $32,103 $(14,597)
Change in fair value of convertible note(6,340)— 11,570 — 
Debt issuance costs expensed due to fair value of convertible note, net of taxes— — 2,297 — 
Adjusted net income (loss)$4,402 $3,713 $45,970 $(14,597)
*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:
January 27,
2024		April 29,
2023
ABL credit facility/prior line of credit$— $17,750 
Mortgage14,250 — 
Convertible note25,000 — 
Long-term debt, gross39,250 17,750 
Debt issuance costs, net(854)— 
Change in fair value of convertible note11,570 — 
Current portion(1,500)— 
Long-term debt, net$48,466 $17,750 




v3.24.0.1
Cover
Feb. 28, 2024
Document Information [Line Items]  
Document Type 8-K
Document Period End Date Feb. 28, 2024
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
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