Daktronics, Inc. Announces First Quarter Fiscal 2014 Results

Daktronics, Inc. Announces First Quarter Fiscal 2014 Results

BROOKINGS, S.D., Aug. 20, 2013 (GLOBE NEWSWIRE) -- Daktronics, Inc.
(Nasdaq:DAKT) today reported fiscal 2014 first quarter net sales of $138.7
million and net income of $5.7 million, or $0.13 per diluted share, compared
to net sales of $132.9 million and net income of $6.7 million, or $0.16 per
diluted share, for the first quarter of fiscal 2013. Fiscal 2014 first quarter
orders were $159.3 million compared to $173.5 million for the first quarter of
fiscal 2013. Backlog at the end of the fiscal 2014 first quarter was $167
million, compared with a backlog of $164 million a year earlier and $141
million at the end of the fourth quarter of fiscal 2013.

Free cash flow, defined as cash provided by operations less net purchases of
property and equipment, was $(8.6) million for the first three months of
fiscal 2014, compared to $15.2 million for the same period in fiscal 2013.
Cash and marketable securities at the end of the first quarter of fiscal 2014
were $46.8 million, which compares to $64.7 million at the end of fiscal 2013
and $63.9 million at the end of the first quarter of fiscal 2013.

"We are pleased with our success in booking orders during the quarter. Last
year's first quarter was a record level of orders, so it is a tough
comparable. We were able to achieve a higher level of sales, and also ended
with a slightly higher backlog as compared to the fiscal 2013 first and fourth
quarters," said Jim Morgan, president and chief executive officer.

Gross profit levels were lower compared to the first quarter of fiscal 2013
due to inherent variability in gross profit levels typical with large
projects. Operating expenses in the fiscal 2014 first quarter increased
slightly as a percentage of sales to 19.4 percent.

Orders

  *Orders in the Commercial business unit were down approximately 17 percent
    in the first quarter of fiscal 2014 compared to the first quarter of
    fiscal 2013. The decrease in orders was primarily the result of the
    volatility in the timing of orders in our digital billboard and our large
    video contract business.
    
  *Orders in the Live Events business unit rose approximately 33 percent
    compared to the first quarter of fiscal 2013, and included orders for two
    large video display systems totaling approximately $20 million during the
    quarter.
    
  *Orders in the Schools and Theatres business unit declined by approximately
    17 percent for the first quarter of fiscal 2014 compared to the same
    period in fiscal 2013.Although the number of video projects for high
    schools was about the same as last year, the average selling price this
    year was less.
    
  *Orders in the Transportation business unit were down approximately 56
    percent compared to the same period in fiscal 2013, primarily as a result
    of booking the LAX Bradley International Terminal project worth
    approximately $20 million during the first quarter of fiscal 2013.In
    comparing quarterly results, excluding the LAX project, orders increased
    by approximately $2 million.
    
  *Orders in the International business unit were down approximately 6
    percent over the first quarter of fiscal 2013.The decrease is due to the
    historic volatility in timing on large orders.We have had continued
    strong success in the Australian region and secured orders of
    approximately $7 million there during the quarter.

Outlook

Reece Kurtenbach, who will become the CEO for the company on September 1,
added, "We continued to see a strong pipeline in the worldwide marketplace
during the first quarter, and we continue to be optimistic in our ability to
secure the orders to support modest sales growth in fiscal 2014.We began
shipping our new LED outdoor surface-mount technology during the first quarter
of fiscal 2014 and are seeing strong interest in this product.We continue to
focus on our strategic goals to improve operating margins, selecting
initiatives across the company to increase gross profit margins and control
operating expenses."

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, Schools and Theatres 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 2013 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
                                    July 27, July 28,
                                    2013     2012
                                              
Net sales                            $ 138,722 $ 132,919
Cost of goods sold                   103,221   96,529
Gross profit                         35,501    36,390
                                              
Operating expenses:                            
Selling expense                      13,617    13,080
General and administrative           7,299     6,581
Product design and development       5,989     6,021
                                    26,905    25,682
Operating income                     8,596     10,708
                                              
Nonoperating income (expense):                 
Interest income                      343       431
Interest expense                     (115)     (87)
Other (expense) income, net          (392)     (180)
                                              
Income before income taxes           8,432     10,872
Income tax expense                   2,712     4,194
Net income                           $ 5,720   $ 6,678
                                              
Weighted average shares outstanding:           
Basic                                42,528    42,068
Diluted                              42,766    42,141
                                              
Earnings per share:                            
Basic                                $0.13     $0.16
Diluted                              $0.13     $0.16
                                              
Cash dividend declared per share     $0.120    $0.115



Daktronics, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands)
                                                               
                                                  July 27,    April 27,
                                                  2013        2013
                                                  (unaudited) 
ASSETS                                                          
CURRENT ASSETS:                                                 
Cash, cash equivalents and restricted cash         $22,165      $40,676
Marketable securities                              24,636       24,052
Accounts receivable, net                           86,921       63,227
Inventories, net                                   58,912       49,045
Costs and estimated earnings in excess of billings 35,332       39,355
Current maturities of long-term receivables        4,944        4,807
Prepaid expenses and other assets                  5,505        6,185
Deferred income taxes                              13,157       12,755
Income tax receivables                             961          46
Total current assets                               252,533      240,148
                                                               
Long-term receivables, less current maturities     10,486       11,325
Goodwill                                           4,613        3,306
Intangibles, net                                   2,900        1,181
Advertising rights, net and other assets           773          772
Deferred income taxes                              1,059        1,061
                                                  19,831       17,645
PROPERTY AND EQUIPMENT:                                         
Land                                               2,116        1,497
Buildings                                          59,198       57,012
Machinery and equipment                            68,226       65,600
Office furniture and equipment                     16,109       16,118
Computer software and hardware                     42,362       41,745
Equipment held for rental                          868          868
Demonstration equipment                            8,359        8,400
Transportation equipment                           4,203        4,026
                                                  201,441      195,266
Less accumulated depreciation                      136,915      133,641
                                                  64,526       61,625
TOTAL ASSETS                                       $336,890     $ 319,418



Daktronics, Inc. and Subsidiaries
Consolidated Balance Sheets (continued)
(in thousands)
                                                                 
                                                                 
                                                    July 27,    April 27,
                                                    2013        2013
                                                    (unaudited) 
LIABILITIES AND SHAREHOLDERS' EQUITY                              
CURRENT LIABILITIES:                                              
Notes payable, bank                                  $264         $--
Accounts payable                                     48,916       38,651
Accrued expenses                                     21,696       24,331
Warranty obligations                                 13,433       13,933
Billings in excess of costs and estimated earnings   13,824       14,245
Customer deposits (billed or collected)              18,870       12,375
Deferred revenue (billed or collected)               7,421        9,112
Current portion of other long-term obligations       890          356
Income taxes payable                                 1,420        1,689
Total current liabilities                            126,734      114,692
                                                                 
                                                                 
Long-term warranty obligations                      11,554       11,213
Long-term deferred revenue (billed or collected)     4,909        4,424
Other long-term obligations, less current maturities 3,037        843
Total long-term liabilities                          19,500       16,480
TOTAL LIABILITIES                                    146,234      131,172
                                                                 
SHAREHOLDERS' EQUITY:                                             
Common stock                                         38,489       37,429
Additional paid-in capital                           27,919       27,194
Retained earnings                                    124,373      123,750
Treasury stock, at cost                              (9)          (9)
Accumulated other comprehensive (loss) income        (116)        (118)
TOTAL SHAREHOLDERS' EQUITY                           190,656      188,246
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY           $336,890     $319,418



Daktronics, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
                                                                  
                                                         Three Months Ended
                                                         July 27,  July 28,
                                                         2013    2012
CASH FLOWS FROM OPERATING ACTIVITIES:                              
Net income                                                $5,720   $6,678
Adjustments to reconcile net income to net cash (used in)          
provided by operating activities:
Depreciation                                              3,757    3,819
Amortization                                              65       57
Amortization of premium/discount on marketable securities 59       48
(Gain) loss on sale of property and equipment             (31)     3
Share-based compensation                                  722      762
Excess tax benefits from share-based compensation         (3)      (2)
Provision for doubtful accounts                           417      (281)
Deferred income taxes, net                                (400)    19
Change in operating assets and liabilities                (14,924) 5,405
Net cash (used in) provided by operating activities       (4,618)  16,508
                                                                  
CASH FLOWS FROM INVESTING ACTIVITIES:                              
Purchases of property and equipment                       (4,042)  (1,443)
Proceeds from sale of property and equipment              68       92
Purchases of marketable securities                        (1,187)  (3,857)
Proceeds from sales or maturities of marketable           500      3,999
securities
Acquistions, net of cash acquired                         (1,298)  --
Net cash used in investing activities                     (5,959)  (1,209)
                                                                  
CASH FLOWS FROM FINANCING ACTIVITIES:                              
Payments on notes payable                                 --       (982)
Proceeds from exercise of stock options                   293      58
Excess tax benefits from share-based compensation         3        2
Principal payments on long-term obligations               (3,374)  --
Dividends paid                                            (5,097)  (4,832)
Net cash used in financing activities                     (8,175)  (5,754)
                                                                  
EFFECT OF EXCHANGE RATE CHANGES ON CASH                   246      (128)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS      (18,506) 9,417
                                                                  
CASH AND CASH EQUIVALENTS:                                         
Beginning of period                                      40,628   29,423
End of period                                            $22,122  $38,840



Daktronics, Inc. and Subsidiaries
Net Sales and Orders by Business Unit
(in thousands)
(unaudited)
                            
                            
                  Three Months Ended
                  July 27, July 28,
                  2013     2012
Net Sales:                   
Commercial         $33,701   $38,356
Live Events        55,077    44,509
Schools & Theatres 17,917    18,174
Transportation     13,042    16,596
International      18,985    15,284
                  $ 138,722 $132,919
                            
Orders:                      
Commercial         $36,975   $44,599
Live Events        67,400    50,699
Schools & Theatres 19,551    23,458
Transportation     13,969    32,036
International      21,388    22,750
                  $159,283  $173,542


Reconciliation of Cash Flow (used in) Provided by Operating Activities to Free
Cash Flow
(in thousands)
(unaudited)
                                                  Three Months Ended
                                                  July 27,       July 28,
                                                  2013           2012
Net cash (used in) provided by operating           $(4,618)      $16,508
activities
Purchases of property and equipment                (4,042)       (1,443)
Proceeds from sales of property and equipment      68            92
Free cash flow                                     $(8,592)      $15,157

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

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