updated 6/1/2011 7:16:33 AM ET 2011-06-01T11:16:33

  • Net sales increase 24% compared to fiscal 2010 fourth quarter
  • Fiscal year net sales increase 12% compared to fiscal 2010
  • Backlog increases to $131 million compared to $127 million one year ago

BROOKINGS, S.D., June 1, 2011 (GLOBE NEWSWIRE) -- Daktronics, Inc. (Nasdaq:DAKT) today reported fiscal 2011 fourth quarter net sales of $114.4 million and net income of $3.0 million, or $0.07 per diluted share, compared to net sales of $92.0 million and a net loss of ($4.9 million), or ($0.12) per diluted share, for the fourth quarter of fiscal 2010. Backlog at the end of the fiscal 2011 fourth quarter was approximately $131 million, compared with a backlog of approximately $127 million a year earlier and $128 million at the end of the third quarter of fiscal 2011.

Net sales, net income and earnings per share for the fiscal year ended April 30, 2011 were $441.7 million, $14.2 million and $0.34 per diluted share, respectively. This compares to $393.2 million, ($7.0 million) and ($0.17) per diluted share, respectively, for the same period in fiscal 2010.

Free cash flow, defined as cash provided by operations less net purchases of property and equipment, was $32.2 million through the fourth quarter of fiscal 2011, compared to $27.8 million through the same period one year ago. Cash and marketable securities at the end of the fourth quarter of fiscal 2011 were $78.8 million.

"We closed out fiscal year 2011 with continued strong performance in the two business units that have been leading our recovery from the slowdown of the past couple of years," said Jim Morgan, president and chief executive officer. "Orders increased 23 percent year over year in our Commercial business unit and 38 percent year over year in our International business unit. We continue to see constraints to growth in our Live Events and Schools and Theaters business units, which were the last parts of our business to enter into the economic downturn. We saw an improvement in gross margins on new orders booked during the quarter, which we attribute to better cost performance of our new generation products."

Business Highlights

  • Sales in the Commercial business unit continued to grow, led by increased orders for digital billboards. Orders in the reseller portion of the Commercial business unit were up approximately 14 percent for the fiscal year and included two orders for Times Square totaling approximately $3 million booked in the fourth quarter of fiscal 2011.
  • Orders in the Live Events business unit were highlighted by an order of approximately $7 million for the new Barclays Center Arena in Brooklyn, New York, future home of the Brooklyn Nets. The company also went live with four new display systems in major league baseball this season as previously announced. The new systems highlighted the home openers for the Texas Rangers, Milwaukee Brewers, Houston Astros and Philadelphia Phillies.
  • Orders in the Schools and Theatres business unit for the fourth quarter of fiscal 2011 were flat versus one year ago, with a trend toward larger transactions involving video displays.
  • The International business unit continued to expand as orders increased to $17 million in the fourth quarter of fiscal 2011, despite some orders being pushed out into the first quarter of fiscal 2012. Orders for the fourth quarter of fiscal 2011 were highlighted by a multi-million dollar display system for a theater on the Gran Via in Madrid, Spain.
  • Orders in the Transportation business unit, although strong, were down from the level one year ago as a result of the exceptionally large order bookings in the fourth quarter of fiscal 2010. During the fourth quarter of fiscal 2011, net sales increased significantly as our transportation factory increased throughput to work down the backlog.

Outlook

Morgan added, "As we look forward, we continue to see opportunities for growth in our Commercial business unit, led by strength in digital billboards and the acceptance in the marketplace of our new 4000 series billboard product and our new GalaxyPro display, which is primarily used for on premise advertising. The International pipeline remains strong, coming off a record year for orders in that business unit. Our Transportation business continues to perform well and carries a large backlog into fiscal 2012. We see our Live Events business remaining relatively flat in fiscal 2012, with the uncertainty of the large projects always a factor in the business. Our Schools and Theaters business faces some uncertainty due to tightening of school budgets, although the effect of that on the business is hard to quantify because displays are funded to a large extent by advertising and sponsorship dollars. We believe that we will see an improvement in gross profit margins in large video display projects as a result of the cost effectiveness of our new DVX video product offerings and ongoing cost reduction programs, although gross profit can fluctuate quarter-to-quarter. 

"There is an increasing level of interest in our architectural lighting and display products, and we see an opportunity for significant growth in this new area over the next few years. Our internet protocol television (IPTV) offering for large sports facilities is also getting increasing interest as facilities become aware of its capabilities for fan experience and revenue generation. Our most recent installation for the Texas Rangers in Arlington, Texas includes a network of 800 LCD screens, along with a number of LED video displays centrally controlled by our Show Control system," continued Morgan.  

Strategy

"Our focus continues to be on winning orders to continue to grow the top line, while at the same time continuing to reduce costs by improving our processes across the company and further reducing the manufactured costs of our products through leveraging a global supply chain and product development initiatives. At the same time, we continue initiatives to improve reliability and quality, maintain a high level of on-time delivery, and strengthen our after-sales service delivery. We will continue to focus on free cash flow, with our priorities for cash being funding operations, including developing new and improved product offerings, expanding markets for existing products, and investing in business process improvement initiatives to create shareholder value over time," concluded Morgan.

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.

The Daktronics logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5476

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 2010 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 Twelve Months Ended
   April 30,   May 1,   April 30,   May 1, 
   2011   2010   2011   2010 
         
Net sales  $ 114,387 $ 91,964 $ 441,676 $ 393,185
Cost of goods sold  85,949  71,817  330,192  298,629
Gross profit  28,438  20,147  111,484  94,556
         
Operating expenses:        
Selling expense  12,471  13,837  49,555  54,253
General and administrative  6,194  6,184  23,453  25,199
Product design and development  5,162  5,361  18,949  21,920
Gain on insurance proceeds  --  --  --  (1,496)
Goodwill impairment  --  --  --  1,410
   23,827  25,382  91,957  101,286
Operating income (loss)  4,611  (5,235)  19,527  (6,730)
         
Nonoperating income (expense):        
Interest income  540  385  1,921  1,514
Interest expense  (66)  (21)  (184)  (170)
Other income (expense), net  58  (1,179)  877  (2,756)
         
Income (loss) before income taxes  5,143  (6,050)  22,141  (8,142)
Income tax expense (benefit)  2,180  (1,151)  7,897  (1,153)
Net income (loss) $ 2,963 $ (4,899) $ 14,244 $ (6,989)
         
Weighted average shares outstanding:        
Basic  41,632  41,049  41,422  40,908
Diluted  42,007  41,049  42,277  40,908
         
Earnings (loss) per share:        
Basic  0.07  (0.12)  0.34  (0.17)
Diluted $ 0.07 $ (0.12) $ 0.34 $ (0.17)
         
Cash dividend paid per share $ --  $ --  $ 0.60 $ 0.095
         
  Daktronics, Inc. and Subsidiaries

Consolidated Balance Sheets

(in thousands)
   April 30,   
   2011   May 1, 
   (unaudited)   2010 
ASSETS    
CURRENT ASSETS:    
Cash, cash equivalents and restricted cash $ 55,854 $ 64,867
Marketable securities  22,943  --
Accounts receivable, less allowance for doubtful accounts  61,778  45,018
Inventories  46,889  35,673
Costs and estimated earnings in excess of billings  24,193  25,233
Current maturities of long-term receivables  5,343  6,232
Prepaid expenses and other assets  6,253  5,838
Deferred income taxes  9,640  12,578
Income tax receivables  4,870  7,444
Property and equipment available for sale  59  182
Total current assets  237,822  203,065
     
Advertising rights, net  525  1,348
Long-term receivables, less current maturities  13,558  13,458
Goodwill  3,384  3,323
Intangible and other assets  2,512  3,710
Deferred income taxes  180  62
   20,159  21,901
PROPERTY AND EQUIPMENT:    
Land  1,497  1,471
Buildings  55,457  55,353
Machinery and equipment  58,233  54,058
Office furniture and equipment  53,402  53,831
Equipment held for rental  1,283  1,630
Demonstration equipment  8,086  8,969
Transportation equipment  3,688  4,256
   181,646  179,568
Less accumulated depreciation  111,780  98,683
   69,866  80,885
TOTAL ASSETS $ 327,847 $ 305,851
     
Daktronics, Inc. and Subsidiaries

Consolidated Balance Sheets (continued)

(in thousands)
   April 30,   
   2011   May 1, 
   (unaudited)   2010 
LIABILITIES AND SHAREHOLDERS' EQUITY    
CURRENT LIABILITIES:    
Notes payable $ 2,316 $ --
Accounts payable  29,223  23,149
Accrued expenses and warranty obligations  36,222  33,443
Billings in excess of costs and estimated earnings  20,284  13,105
Customer deposits  11,288  9,348
Deferred revenue (billed or collected)  8,770  7,766
Current maturities of long-term debt and marketing obligations  273  322
Income tax payable  1,281  361
Total current liabilities  109,657  87,494
     
Long-term marketing obligations, less current maturities  662  600
Long-term warranty obligations and other payables  9,856  4,229
Deferred income taxes  11  2,167
Long-term deferred revenue (billed or collected)  4,559  4,308
Total long-term liabilities  15,088  11,304
TOTAL LIABILITIES  124,745  98,798
     
SHAREHOLDERS' EQUITY:    
Common stock  32,670  29,936
Additional paid-in capital  21,149  17,731
Retained earnings  149,291  159,842
Treasury stock, at cost  (9)  (9)
Accumulated other comprehensive (income)/loss  1  (447)
TOTAL SHAREHOLDERS' EQUITY  203,102  207,053
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $ 327,847  $ 305,851
     
Daktronics, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)
  Year Ended
  April 30, May 1,
  2011 2010
     
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income (loss)  $ 14,244 $ (6,989)
Adjustments to reconcile net income (loss) to net cash provided    
by operating activities:    
Depreciation  19,354  21,945
Amortization  287  315
Amortization of premium/discount on marketable securities  48  --
Gain on sale of property and equipment  (62)  (982)
Stock-based compensation  3,370  3,762
Equity in losses of affiliates  36  2,535
Impairment of goodwill  --  1,410
Loss on sale of equity investees  --  230
Provision for doubtful accounts  (37)  421
Deferred income taxes, net  663  (95)
Change in operating assets and liabilities  3,443  21,232
Net cash provided by operating activities  41,346  43,784
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchase of property and equipment  (9,386)  (16,121)
(Purchases)/sales of marketable securities, net  (23,035)  --
Insurance recoveries on property and equipment  187  3,213
Proceeds from sale of property and equipment  238  181
Other investing activities, net  2,110  (372)
Net cash used in investing activities  (29,886)  (13,099)
     
CASH FLOWS FROM FINANCING ACTIVITIES:    
Borrowings on notes payable  2,316  --
Proceeds from exercise of stock options  1,352  365
Excess tax benefits from stock-based compensation  122  71
Principal payments on long-term debt  (28)  (27)
Dividends paid  (24,794)  (3,874)
Net cash used in financing activities  (21,032)  (3,465)
     
EFFECT OF EXCHANGE RATE CHANGES ON CASH  277  (118)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS  (9,295)  27,102
     
CASH AND CASH EQUIVALENTS:    
Beginning of period  63,603  36,501
End of period $ 54,308 $ 63,603
     
Daktronics, Inc. and Subsidiaries

Net Sales and Orders By Business Unit

(in thousands)

(unaudited)
  Three Months Ended Twelve Months Ended
   April 30,   May 1,   April 30,   May 1, 
   2011   2010   2011   2010 
Net Sales:        
Commercial $ 28,755 $ 22,849 $ 112,515 $ 91,860
Live Events  40,726  33,611  161,572  159,229
Schools & Theatres  12,639  13,353  62,310  62,878
Transportation  15,125  9,174  45,215  40,481
International  17,142  12,977  60,064  38,737
Total net sales $ 114,387 $ 91,964 $ 441,676 $ 393,185
         
Orders:        
Commercial $ 31,335 $ 28,278 $ 115,820 $ 93,833
Live Events  42,054  41,779  152,851  155,509
Schools & Theatres  14,222  14,418  61,995  62,493
Transportation  11,426  20,495  43,878  45,968
International  16,634  15,146  65,318  47,482
Total orders $ 115,671 $ 120,116 $ 439,862 $ 405,285
         
Reconciliation of Cash Flow Provided by Operating Activities to Free Cash Flow

(in thousands)

(unaudited)
  Twelve Months Ended
  April 30, May 1,
  2011 2010
     
Net cash provided by operating activities $ 41,346 $ 43,784
Purchase of property and equipment  (9,386)  (16,121)
Proceeds from sale of property and equipment  238  181
Free cash flow $ 32,198 $ 27,844
     

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:
         Bill Retterath, Chief Financial Officer
         (605) 692-0200
         Investor@daktronics.com

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