News Column

Daktronics, Inc. Announces First Quarter Fiscal 2015 Results

August 26, 2014

BROOKINGS, S.D., Aug. 26, 2014 (GLOBE NEWSWIRE) -- Daktronics, Inc. (Nasdaq:DAKT) today reported fiscal 2015 first quarter net sales of $166.6 million, operating income of $13.6 million and net income of $8.7 million, or $0.20 per diluted share, compared to net sales of $138.7 million, operating income of $8.6 million and net income of $5.7 million, or $0.13 per diluted share, for the first quarter of fiscal 2014. Fiscal 2015 first quarter orders were $160.7 million compared to $159.3 million for the first quarter of fiscal 2014. Backlog at the end of the fiscal 2015 first quarter was $165 million, compared with a backlog of $167 million a year earlier and $172 million at the end of the fourth quarter of fiscal 2014. Fiscal 2015 is a 53-week year and Fiscal 2014 was a 52-week year. The extra week of Fiscal 2015 fell within the first quarter, resulting in a 14-week quarter versus a 13-week quarter comparison. For comparison, sales revenue paced at $11.9 million per week in Fiscal 2015 as compared to $10.7 million during the same time last year and all operating expenses were impacted with an additional week of expenses.

Free cash flow, defined as cash provided by operations less net purchases of property and equipment, was $19.8 million for the first three months of fiscal 2015, compared to $(8.6) million for the same period in fiscal 2014. Cash and marketable securities at the end of the first quarter of fiscal 2015 were $86.6 million, which compares to $46.8 million at the end of the first quarter of fiscal 2014 and $71.0 million at the end of fiscal 2014.

"Our first quarter is historically one of the busiest quarters as we produce, deliver, and install for outdoor sports venues and other outdoor systems during the summer construction season. This year was no exception. Significant work was performed during the quarter for sports related projects including installations for the Jacksonville Jaguars, Cleveland Browns, and University of Arizona, Phoenix. Our mix of sales included higher custom video systems and subcontracted installation work which lowered overall gross margin. This lower margin was offset by a gain in the sale of our rigging division assets. Operating income for the first quarter of fiscal 2015 was 8.1 percent of sales as compared to 6.2 percent of sales in the same period last year. Operating income in dollars increased due to an increase in sales volume, an extra week included in the quarter, the sale of our rigging division assets, and the maintenance of operating costs on a consistent cost per week as compared to last year.

"Orders for the quarter were down compared to the fiscal 2014 13 week run rate, however, we continue to be optimistic about the pipeline and opportunities for video system projects as well as our more standard products in the market place. We are pleased with the increase in the high school market's orders which were driven by demand for larger systems and growth in the number of displays as compared to last year. We were also successful in the commercial market's spectacular niche, which includes video projects for New York Time's Square and the Las Vegas market, during the quarter as we continue to see more projects becoming available in that niche as compared to prior years," said Reece Kurtenbach, president and chief executive officer.

Outlook

Reece Kurtenbach added, "We are entering into the second quarter with a solid backlog and with a strong pipeline of opportunities. We continue to see our Live Events business sustaining the fiscal 2014 sales levels in fiscal 2015 due to the continued interest in large video systems in this marketplace. We also are optimistic in our Commercial spectacular business, with some increase in demand in our on premise and third party advertising applications. In International, we see opportunities for growth in all regions as compared to last fiscal year as activity levels are high worldwide. In the other units, we are seeing modest growth opportunities.

"We announced earlier this month the expansion of our international transportation business through the purchase of Data Display, a European based company focused on the design and manufacture of transportation displays. We believe Daktronics and Data Display complement each other well and we are looking for opportunities to grow as we integrate our operations over the coming months. Daktronics is active in the transportation business, mainly in the United States, and we have a global presence with offices and people in many countries. Adding the strengths of Data Display will allow our combined organizations to better serve transportation customers world-wide and broaden our leadership position on a global scale.

"We remain focused on continual improvement of the operation of our business, which directly impacts profitability. We are investing in quality and reliability systems in the manufacturing and supply chain areas; our investment in product development also continues as we focus on robust solutions for Sport, Advertising, and Transportation applications. For fiscal 2015, we plan to invest $25 million for capital projects including the $4 million expansion of our Minnesota manufacturing facility (nearing completion), new manufacturing equipment for various new product lines as well as machines upgrades, and in our information technology infrastructure."

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 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 World Wide Web site at: http://www.daktronics.com, e-mail 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., 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 2014 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.

Daktronics, Inc. and Subsidiaries
Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
 Three Months Ended
 August 2,July 27,
 20142013
     
Net sales  $ 166,618  $ 138,722
Cost of goods sold 123,215 103,221
Gross profit 43,403 35,501
     
Operating expenses:    
Selling expense 15,046 13,617
General and administrative 7,937 7,299
Product design and development 6,803 5,989
  29,786 26,905
Operating income 13,617 8,596
     
Nonoperating income (expense):    
Interest income 300 343
Interest expense (68) (115)
Other (expense) income, net (172) (392)
     
Income before income taxes 13,677 8,432
Income tax expense 4,932 2,712
Net income  $ 8,745  $ 5,720
     
Weighted average shares outstanding:    
Basic 43,261 42,528
Diluted 43,641 42,766
     
Earnings per share:    
Basic  $ 0.20  $ 0.13
Diluted  $ 0.20  $ 0.13
     
Cash dividends declared per share  $ 0.100  $ 0.120
     
     
Daktronics, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands)
     
 August 2,April 26,
 20142014
 (unaudited)  
ASSETS    
CURRENT ASSETS:    
Cash, cash equivalents and restricted cash  $ 61,140  $ 45,568
Marketable securities 25,479 25,398
Accounts receivable, net 86,511 82,500
Inventories, net 62,086 62,228
Costs and estimated earnings in excess of billings 28,681 33,400
Current maturities of long-term receivables 3,951 5,235
Prepaid expenses and other assets 8,393 6,758
Deferred income taxes 10,727 10,694
Income tax receivables 1,900 2,459
Total current assets 288,868 274,240
     
Long-term receivables, less current maturities 7,890 7,877
Goodwill 4,506 4,558
Intangibles, net 1,640 2,680
Advertising rights, net and other assets 1,005 826
Deferred income taxes 1,759 2,000
  16,800 17,941
PROPERTY AND EQUIPMENT:    
Land 2,180 2,539
Buildings 61,647 59,363
Machinery and equipment 75,745 72,787
Office furniture and equipment 15,693 15,754
Computer software and hardware 46,428 45,329
Equipment held for rental 803 868
Demonstration equipment 7,326 7,532
Transportation equipment 5,012 4,823
  214,834 208,995
Less accumulated depreciation 145,330 143,725
  69,504 65,270
TOTAL ASSETS  $ 375,172  $ 357,451
     
     
Daktronics, Inc. and Subsidiaries
Consolidated Balance Sheets (continued)
(in thousands)
 August 2,April 26,
 20142014
 (unaudited)  
LIABILITIES AND SHAREHOLDERS' EQUITY    
CURRENT LIABILITIES:    
Accounts payable  $ 49,087  $ 45,913
Accrued expenses 24,857 23,462
Warranty obligations 14,878 14,476
Billings in excess of costs and estimated earnings 22,858 22,483
Customer deposits (billed or collected) 20,917 17,654
Deferred revenue (billed or collected) 8,566 7,722
Current portion of other long-term obligations 856 809
Income taxes payable 1,077 1,162
Deferred income taxes 26 27
Total current liabilities 143,122 133,708
     
Long-term warranty obligations 14,392 12,774
Long-term deferred revenue (billed or collected) 4,891 4,978
Other long-term obligations, less current maturities 3,591 2,871
Deferred income taxes 1 1
Total long-term liabilities 22,875 20,624
TOTAL LIABILITIES 165,997 154,332
     
SHAREHOLDERS' EQUITY:    
Common stock 44,935 43,935
Additional paid-in capital 30,701 29,923
Retained earnings 133,688 129,266
Treasury stock, at cost (9) (9)
Accumulated other comprehensive income (loss) (140) 4
TOTAL SHAREHOLDERS' EQUITY 209,175 203,119
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $ 375,172  $ 357,451
     
     
Daktronics, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 Three Months Ended
 August 2,July 27,
 20142013
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income  $ 8,745  $ 5,720
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation 3,625 3,757
Amortization 91 65
Amortization of premium/discount on marketable securities 49 59
(Gain) loss on sale of property, equipment and other assets (1,132) (31)
Share-based compensation 767 722
Excess tax benefits from share-based compensation (11) (3)
Provision for doubtful accounts 94 417
Deferred income taxes, net 207 (400)
Change in operating assets and liabilities 12,026 (14,924)
Net cash (used in) provided by operating activities 24,461 (4,618)
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of property and equipment (8,146) (4,042)
Proceeds from sale of property, equipment and other assets 3,509 68
Purchases of marketable securities (1,522) (1,187)
Proceeds from sales or maturities of marketable securities 1,389 500
Acquisition, net of cash acquired (570) (1,298)
Net cash used in investing activities (5,340) (5,959)
     
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from exercise of stock options 187 293
Excess tax benefits from share-based compensation 11 3
Principal payments on long-term obligations (21) (3,374)
Dividends paid (4,323) (5,097)
Net cash used in financing activities (4,146) (8,175)
     
EFFECT OF EXCHANGE RATE CHANGES ON CASH 29 246
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 15,004 (18,506)
     
CASH AND CASH EQUIVALENTS:    
Beginning of period 45,054 40,628
End of period  $ 60,058  $ 22,122
     
     
Daktronics, Inc. and Subsidiaries
Net Sales and Orders by Business Unit
(in thousands)
(unaudited)
 Three Months Ended
 August 2,July 27,
 20142013
Net Sales:    
Commercial  $ 39,782  $ 33,701
Live Events 75,674 55,077
High School Park and Recreation (formerly Schools & Theatres) 20,111 17,917
Transportation 13,313 13,042
International 17,738 18,985
   $ 166,618  $ 138,722
Orders:    
Commercial  $ 41,773  $ 36,975
Live Events 57,205 67,400
High School Park and Recreation (formerly Schools & Theatres) 29,694 19,551
Transportation 11,302 13,969
International 20,705 21,388
   $ 160,679  $ 159,283
     
     
Reconciliation of Cash Flow Provided by
Operating Activities to Free Cash Flow
(in thousands)
(unaudited)
 Three Months Ended
 August 2,July 27,
 20142013
Net cash provided by operating activities  $ 24,461  $ (4,618)
Purchases of property and equipment (8,146) (4,042)
Proceeds from sales of property and equipment 3,509 68
Free cash flow  $ 19,824  $ (8,592)
     


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 U.S. generally accepted accounting principles ("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.

CONTACT: For more information contact: INVESTOR RELATIONS: Sheila Anderson, Chief Financial Officer (605) 692-0200 Investor@daktronics.com



Daktronics Logo

Source: Daktronics


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: GlobeNewswire


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters