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 email@example.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 Daktronics Logo
Daktronics, Inc. Announces First Quarter Fiscal 2014 Results
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