SEC Filing | Daktronics, Inc.

View:

Download DOC

Download PDF

Download XLS

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1937

Date of Report (Date of earliest event reported): August 15, 2007

Daktronics, Inc.

(Exact name of registrant as specified in its charter)

South Dakota	0-23246	46-0306862
(State or other jurisdiction	(Commission	(I.R.S. Employer
Incorporation or organization	File Number)	Identification Number)

331 32^nd Ave

Brookings, SD 57006

(Address of principal executive office) (zip code)

(605) 697-4000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report.)

Item 2.02

Results of Operations and Financial Condition

On August 15, 2007, Daktronics, Inc. (the “Registrant”) issued a press release announcing financial results for the first quarter ending July 28, 2007. 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.

Item 9.01

Financial Statements and Exhibits:

99.1

News Release dated August 15, 2007 issued by Registrant regarding first quarter fiscal 2008 results

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/ William R. Retterath
			William R. Retterath, Chief Financial Officer

Date: August 15, 2007

EXHIBIT INDEX

Exhibit No.

Description

99.1	News Release dated August 15, 2007 issued by Daktronics, Inc.

Daktronics, Inc. Announces First Quarter Results

Financial Highlights Include:

• Net sales increase 31%

• Net income up 43%

• Backlog exceeds $140 million

Brookings, S.D. – Aug. 15, 2007 - Daktronics, Inc. (Nasdaq - DAKT) today reported fiscal 2008 first quarter net sales of $120.9 million and net income of $7.1 million, or $0.17 per diluted share, compared with first quarter net sales of $92.2 million and net income of $5.0 million, or $0.12 per diluted share, one year ago. Backlog at the end of the quarter was approximately $142 million, compared with a backlog of approximately $123 million at the end of the first quarter of fiscal 2007 and $127 million last quarter.

“We were very pleased with this quarter’s performance,” said Jim Morgan, president and chief executive officer. “Most importantly, we were able to execute at better than expected gross profit margins. The gross margin improvement comes from the benefit of having the capacity expansion mostly behind us and raw material cost savings. This helped offset the lower estimated margins of some of the large sports projects we booked in the fourth quarter of fiscal year 2007. In addition to the margin improvements, the benefit of capacity additions over the past two years was evident this quarter as we were able to respond to customer demand; keeping lead times at desirable levels without stretching our personnel and infrastructure like we were last year at this time. On a final note, this quarter also benefited from our new plant in Redwood Falls, which was on line for the full quarter.”

“At the beginning of the year, we reorganized into four business units to align our resources more closely to the customer and to drive improved financial performance. We also increased our focus on controlling growth in our non-manufacturing labor force, which had been outpacing sales over the past few quarters. During the quarter we were successful in both areas, as we completed the transition to the business unit structure and we kept personnel growth to acceptable levels. While our operating margins are not at our long-term target levels, the results for the first quarter demonstrate that we are headed in the right direction.”

Morgan said, “We are looking forward to occupying our new building in Brookings in the second quarter, which will mark the end of major building projects that we started in fiscal year 2005. The new building will house corporate offices and include administration, our commercial business unit, training and meeting facilities and provide warehouse space which is convertible to manufacturing space. As a result, we expect to see capital expenditures decline in the second half of fiscal year 2008, thereby leading to reductions in our credit needs towards the end of the fiscal year.”

Business Outlook

The company is providing financial guidance for the second quarter of fiscal 2008. Daktronics expects that net sales for the second quarter of fiscal 2008 will be in the range of $132 million to $144 million and net earnings will be in the range of $0.17 to $0.25 per share. As in the past, this guidance is subject to a number of factors that could cause it to vary.

Morgan concluded, “We believe that our first full quarter with our new business unit structure has positioned us well for customer needs and stronger financial performance through the remainder of the fiscal year. Although the growth rate of the second quarter’s net sales compared to the prior year is expected to be less than the first quarter,

Daktronics Announces First Quarter Results – Page 2

we believe that our net sales goals for the year remain intact. With the capacity available to us, the strength of our order bookings in the first quarter of fiscal 2008 and our focus on margin improvement and expense control, we believe we are off to a solid start and expect to leverage this performance through the remainder of fiscal 2008.”

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 one of the world’s largest suppliers of, electronic scoreboards, computer-programmable displays, and large screen video displays and control systems. The company excels in the control of large 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 sport, business and transportation applications. 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) 697-4000 or toll-free (800) 843-5843 in the United States or write to the company at 331 32nd Ave. 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 reflecting the Company’s expectations or beliefs concerning future events, which could materially affect company performance in the future. The Company cautions that these and similar statements involve risk and uncertainties including changes in economic and market conditions, management of growth, timing and magnitude of future contracts, and other risks noted in the company’s SEC filings which may cause actual results to differ materially. 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:
Bill Retterath, Chief Financial Officer
(605) 697-4000
Investor@daktronics.com

Financial tables are included on the following pages.

Daktronics Announces First Quarter Results – Page 3

Daktronics, Inc. and Subsidiaries

Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)


			Three Months Ended
			July 28, 2007			July 29, 2006

Net sales			$	120,923			$	92,153
Cost of goods sold				84,044				65,778
		Gross profit		36,879				26,375

Operating expenses:
	Selling			14,844				12,446
	General and administrative			6,002				3,728
	Product design and development			4,756				3,619
				25,602				19,793
		Operating income		11,277				6,582

Nonoperating income (expense):
	Interest income			384				645
	Interest expense			(426	)			(26)
	Other income (expense), net			(302	)			107

Income before income taxes				10,933				7,308
	Income tax expense			3,822				2,321
	Net income		$	7,111			$	4,987

Weighted average shares outstanding:
	Basic			39,638				38,974
	Diluted			41,260				41,082

Earnings per share:
	Basic		$	0.18			$	0.13
	Diluted		$	0.17			$	0.12

Cash dividend paid per share			$	0.07			$	0.06

Daktronics Announces First Quarter Results – Page 4

Daktronics, Inc. and Subsidiaries

Consolidated Balance Sheets

(in thousands)

				July 28,
				2007		April 28,
				(unaudited)		2007
ASSETS

CURRENT ASSETS:
	Cash and cash equivalents			$	7,161	$	2,590
	Accounts receivable, less allowance for doubtful accounts				57,829		56,692
	Inventories				50,807		45,835
	Costs and estimated earnings in excess of billings				33,551		22,314
	Current maturities of long-term receivables				6,848		6,831
	Prepaid expenses and other				4,469		5,044
	Deferred income taxes				7,854		7,761
	Income taxes receivable				—		731
	Rental equipment available for sale				190		188
			Total current assets		168,709		147,986

Advertising rights, net					3,629		3,830
Long-term receivables, less current maturities					14,079		11,211
Investments in affiliates					8,991		8,762
Goodwill					4,469		4,408
Intangible and other assets					3,314		3,391
Deferred income taxes					73		136
					34,555		31,738
PROPERTY AND EQUIPMENT:
		Land			3,275		3,275
		Buildings			41,711		36,822
		Machinery and equipment			42,795		38,420
		Office furniture and equipment			40,442		37,520
		Equipment held for rental			2,891		2,600
		Demonstration equipment			6.687		5,939
		Transportation equipment			6,681		6,669
					144,482		131,245
			Less accumulated depreciation		49,614		45,119
					94,868		86,126
TOTAL ASSETS				$	298,132	$	265,850

Daktronics Announces First Quarter Results – Page 5

Daktronics, Inc. and Subsidiaries

Consolidated Balance Sheets (continued)

(in thousands)

				July 28,
				2007			April 28,
				(Unaudited)			2007
LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:
	Notes payable, bank			$	25,682		$	24,615
	Accounts payable				39,506			26,094
	Accrued expenses and warranty obligations				22,696			21,849
	Current maturities of long-term debt and marketing obligations				967			1,002
	Billings in excess of costs and estimated earnings				23,423			18,293
	Customer deposits				6,922			5,857
	Deferred revenue				6,480			5,333
	Income taxes payable				3,207			39
			Total current liabilities		128,883			103,082

Long-term debt, less current maturities					597			592
Long-term marketing obligations, less current maturities					480			473
Long-term warranty obligations and other payables					5,258			5,366
Deferred income taxes					2,629			2,629
					8,964			9,060
TOTAL LIABILITIES					137,847			112,142

SHAREHOLDERS’ EQUITY:
		Common stock			23,298			21,954
		Additional paid-in capital			8,223			7,431
		Retained earnings			128,810			124,469
		Treasury stock, at cost			(9	)		(9	)
		Accumulated other comprehensive loss			(37	)		(137	)
TOTAL SHAREHOLDERS’ EQUITY					160,285			153,708
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY				$	298,132		$	265,850

Daktronics Announces First Quarter Results – Page 6

Daktronics, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

				Three Months Ended
				July 28, 2007			July 29, 2006
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net income			$	7,111		$	4,987
	Adjustments to reconcile net income to net cash provided
	by operating activities:
		Depreciation			4,505			2,784
		Amortization			79			12
		Gain on sale of property and equipment			(1	)		(1	)
		Stock-based compensation			608			406
		Equity in earnings and losses of investments in affiliates			526			—
		Provision for doubtful accounts			28			97
		Deferred income taxes, net			(30	)		(784	)
		Change in operating assets and liabilities			6,657			(1,024	)
			Net cash provided by operating activities		19,483			6,477

CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchase of property and equipment				(13,343	)		(7,450	)
	Cash consideration paid for equity method investments				(750	)		(6,008	)
	Sales (purchases) of marketable securities, net				—			(90	)
	Proceeds from sale of property and equipment				23			19
		Net cash used in investing activities			(14,070	)		(13,529	)

CASH FLOWS FROM FINANCING ACTIVITIES:
	Net borrowings (payments) on notes payable				1,068			—
	Proceeds from exercise of stock options and warrants				732			335
	Excess tax benefits from stock-based compensation				177			205
	Principal payments on long-term debt				(12	)		(16	)
	Dividend Paid				(2,770	)		(2,339	)
		Net cash used in financing activities			(805)			(1,815	)

EFFECT OF EXCHANGE RATE CHANGES ON CASH					(37	)		(127	)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS					4,571			(8,994	)

CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD					2,590			26,921

CASH AND CASH EQUIVALENTS END OF PERIOD				$	7,161		$	17,927