Daktronics, Inc. Announces Fourth Quarter and Fiscal 2009 Results
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* Net sales increase 16 percent for fiscal 2009 and decrease 6 percent for the fourth quarter of fiscal 2009 compared to fiscal 2008 * Earnings per share increase 2 percent for fiscal 2009 and decrease 93 percent for the fourth quarter of fiscal 2009 compared to fiscal 2008 * Expects sales and earnings to decline in fiscal 2010 * Declares annual cash dividend of $0.095 per share based on continued positive cash flow performance
BROOKINGS, S.D., June 2, 2009 (GLOBE NEWSWIRE) -- Daktronics, Inc. (Nasdaq:DAKT) today reported fiscal 2009 fourth quarter net sales of $121.8 million and net income of $0.3 million, or $0.01 per diluted share, compared to net sales of $129.1 million and net income of $5.7 million, or $0.14 per diluted share, for the fourth quarter of fiscal 2008. Backlog at the end of the 2009 fourth quarter was approximately $120 million, compared with a backlog of approximately $175 million a year earlier and $128 million at the end of the third quarter of fiscal 2009.
Net sales for the fiscal year ended May 2, 2009 totaled $581.9 million, up over 16 percent from net sales of $499.7 million in 2008. Net income for fiscal 2009 was $26.4 million, a one percent increase from net income of $26.2 million in fiscal 2008. Earnings per diluted share for the year ended May 2, 2009 were $0.64, compared to $0.63 per diluted share for the year ended April 26, 2008.
"During the quarter, we successfully launched new mega systems for two major league baseball facilities in New York that are showcases for our products and reflect the quality and dedication of our employees," said Jim Morgan, president and chief executive officer. "We are excited about what this means for the long-term; however, we continue to be adversely impacted by the economic environment, with the largest impact being within our Commercial and International business units. Orders for the fourth quarter of fiscal 2009 were up five percent in our Live Events and Schools and Theatres business units, and over 55 percent in our Transportation business unit as compared to the fourth quarter of fiscal 2008. This increase was offset by order declines of 62 percent and 85 percent in our Commercial and International business units, respectively. As previously discussed, the largest decline in our Commercial business unit is due to the pullback in capital spending by the major outdoor billboard companies. Based on industry reports, we do not expect any noticeable recovery in this niche until calendar 2011, at the earliest."
Morgan continued, "Our response to this overall downturn has been and will continue to be to adjust our infrastructure without harming our long-term opportunities. We are working diligently to decrease expenses where possible. This includes reductions in personnel, limitations on capital expenditures and, most importantly, establishing a tone within the company that expense reduction coupled with a focus on lean initiatives in manufacturing and administration are vital for our position when the economy improves."
"For fiscal 2010, we expect to see a significant reduction in orders and sales," said Morgan. "It's very difficult to forecast the business at this point, but we are focusing our strategic initiatives and cost controls under an assumption that the fourth quarter net sales level is an indicator of the trend for the year as a whole. In addition to an expected decline in our commercial business, as discussed above, we also expect a decline in our live events business. However, it's important to keep the expected decline in live events in perspective. With live events experiencing a revenue growth of 60 percent this past year, it would be appropriate, even in normal economic times, to expect a sequential year decline due to the natural volatility of that business. On the competitive environment, we have seen some very aggressive pricing, especially on larger projects. Although we believe some of the pricing we are seeing from competitors is not sustainable, it can have an adverse impact on us in the short term. At the same time we have renewed our emphasis on product development to reduce the cost of our products while still delivering products that are second to none in the industry. Nonetheless, we see gross margin pressure as a factor for the near term."
"Our gross margin for the quarter was significantly less than expected due to a number of factors, including lower than expected margin on contracts," said Bill Retterath, chief financial officer. "We also continue to see pressure resulting from the excess capacity, warranty costs and the competitive environment. We have made improvements by decreasing costs that impact gross profit, and further efforts in this regard remain a high priority for us. On the positive side, we continued to show declines in operating expenses overall and have plans to decrease this spending more in fiscal 2010."
Morgan concluded, "We have ended the 2009 fiscal year with a strong cash position and we are confident that we can continue to improve our cash position during fiscal year 2010. With no debt, and by approaching capital expenditures primarily with a view towards maintenance rather than growth, we believe that a dividend continues to be an effective use of our growing cash balances. Our priorities for the use of cash in fiscal 2010 are to continue to fund operations on a scaled back basis, explore and develop new and better product offerings, invest in business process initiatives and pay dividends to our shareholders."
The annual cash dividend will be payable June 23, 2009, to shareholders of record as of the close of business June 9, 2009. Although the company intends to pay regular annual dividends for the foreseeable further, subsequent dividends will continue to be reviewed annually and declared by the Board at its discretion.
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 Sport, Business, Schools and Theaters and Transportation segments. 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 are 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 expectation, including, but not limited to, 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, including its Annual Report on Form 10-K for its 2008 fiscal year and its Quarterly Reports on Form 10-Q for the quarters ended August 2, 2008, November 1, 2008 and January 31, 2009. 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 Income
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Twelve Months Ended
-------------------- --------------------
May 2, April 26, May 2, April 26,
2009 2008 2009 2008
--------- --------- --------- ---------
Net sales $ 121,823 $ 129,117 $ 581,931 $ 499,677
Cost of goods sold 94,163 92,788 426,573 352,087
--------- --------- --------- ---------
Gross profit 27,660 36,329 155,358 147,590
Operating expenses:
Selling 14,932 16,094 62,335 62,479
General and administrative 6,975 6,736 28,787 26,040
Product design and
development 4,637 5,863 21,619 20,828
--------- --------- --------- ---------
26,544 28,693 112,741 109,347
--------- --------- --------- ---------
Operating income 1,116 7,636 42,617 38,243
Nonoperating income
(expense):
Interest income 504 462 2,068 1,757
Interest expense (47) (158) (244) (1,423)
Other income (expense),
net (510) (460) (2,888) 1,049
--------- --------- --------- ---------
Income before income taxes 1,063 7,480 41,553 39,626
Income tax expense 719 1,770 15,125 13,413
--------- --------- --------- ---------
Net income $ 344 $ 5,710 $ 26,428 $ 26,213
========= ========= ========= =========
Weighted average shares
outstanding:
Basic 40,652 40,180 40,537 39,918
--------- --------- --------- ---------
Diluted 40,949 41,158 41,152 41,337
========= ========= ========= =========
Earnings per share:
Basic $ 0.01 $ 0.14 $ 0.65 $ 0.66
========= ========= ========= =========
Diluted $ 0.01 $ 0.14 $ 0.64 $ 0.63
========= ========= ========= =========
Cash dividend paid per
share $ -- $ -- $ 0.09 $ 0.07
========= ========= ========= =========
Daktronics, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands)
May 2,
2009 April 26,
(unaudited) 2008
----------- -----------
ASSETS
CURRENT ASSETS:
Cash, cash equivalents and restricted cash $ 37,584 $ 9,782
Accounts receivable, less allowance for
doubtful accounts 61,412 56,516
Inventories 51,400 50,525
Costs and estimated earnings in excess of
billings 27,541 27,126
Current maturities of long-term receivables 7,962 7,435
Prepaid expenses and other 5,587 4,796
Deferred income taxes 15,017 9,517
Property and equipment available for sale 470 --
----------- -----------
Total current assets 206,973 165,697
----------- -----------
Advertising rights, net 2,392 3,457
Long-term receivables, less current
maturities 15,879 16,837
Investments in affiliates 2,541 2,998
Goodwill 4,549 4,722
Intangible and other assets 2,804 3,102
Deferred income taxes 311 143
----------- -----------
28,476 31,259
----------- -----------
PROPERTY AND EQUIPMENT:
Land 1,204 3,190
Buildings 50,810 49,464
Machinery and equipment 50,013 44,743
Office furniture and equipment 52,369 45,482
Equipment held for rental 2,423 2,658
Demonstration equipment 8,021 7,516
Transportation equipment 5,115 6,106
----------- -----------
169,955 159,159
Less accumulated depreciation (80,528) (61,636)
----------- -----------
89,427 97,523
----------- -----------
TOTAL ASSETS $ 324,876 $ 294,479
=========== ===========
Daktronics, Inc. and Subsidiaries
Consolidated Balance Sheets (continued)
(in thousands)
May 2,
2009 April 26,
(Unaudited) 2008
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 30,273 $ 31,540
Accrued expenses and warranty obligations 35,548 26,100
Current maturities of long-term debt and
marketing obligations 367 910
Billings in excess of costs and estimated
earnings 13,769 24,560
Customer deposits 10,007 12,113
Deferred revenue 9,531 6,980
Income taxes payable 2,935 949
----------- -----------
Total current liabilities 102,430 103,152
----------- -----------
Long-term debt, less current maturities 23 55
Long-term marketing obligations, less
current maturities 759 646
Long-term warranty obligations and other
payables 4,805 3,766
Deferred income taxes 4,948 3,607
----------- -----------
10,535 8,074
----------- -----------
TOTAL LIABILITIES 112,965 111,226
SHAREHOLDERS' EQUITY:
Common stock 27,872 25,638
Additional paid-in capital 13,898 10,398
Retained earnings 170,705 147,912
Treasury stock, at cost (9) (9)
Accumulated other comprehensive loss (555) (686)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 211,911 183,253
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 324,876 $ 294,479
=========== ===========
Daktronics, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Years Ended
--------------------
May 2, April 26,
2009 2008
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 26,428 $ 26,213
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 24,133 20,806
Amortization 315 315
Gain on sale of property and equipment (862) (7)
Gain on sale of equity investment -- (2,878)
Stock-based compensation 3,154 2,628
Equity in losses of affiliates 2,404 2,402
Provision for doubtful accounts 419 145
Deferred income taxes, net (4,326) (785)
Change in operating assets and liabilities (2,934) 10,994
--------- ---------
Net cash provided by operating activities 48,731 59,833
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (22,888) (33,916)
Loans to equity investees (665) --
Cash consideration paid for equity method
investments -- (750)
Proceeds from sale of property and equipment 4,667 523
Proceeds from sale of investments -- 7,000
--------- ---------
Net cash used in investing activities (18,886) (27,143)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments on notes payable -- (24,615)
Proceeds from exercise of stock options 630 2,335
Excess tax benefits from stock-based
compensation 345 339
Principal payments on long-term debt (546) (563)
Dividend paid (3,635) (2,770)
--------- ---------
Net cash used in financing activities (3,206) (25,274)
--------- ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS 537 (681)
--------- ---------
INCREASE IN CASH AND CASH EQUIVALENTS 27,176 6,735
CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD 9,325 2,590
--------- ---------
CASH AND CASH EQUIVALENTS END OF PERIOD $ 36,501 $ 9,325
========= =========
Daktronics, Inc. and Subsidiaries
Sales and Orders By Segment
(in thousands)
(unaudited)
Three Months Ended Twelve Months Ended
-------------------- --------------------
May 2, April 26, May 2, April 26,
2009 2008 2009 2008
--------- --------- --------- ---------
Net sales
Commercial $ 24,232 $ 46,020 $ 155,851 $ 180,938
Live Events 64,878 40,718 269,650 168,640
Schools & Theatres 14,293 11,815 66,444 60,919
Transportation 10,988 10,476 34,289 37,355
International 7,432 20,088 55,697 51,825
--------- --------- --------- ---------
Total Net Sales $ 121,823 $ 129,117 $ 581,931 $ 499,677
========= ========= ========= =========
Orders
Commercial $ 21,153 $ 56,299 $ 135,316 $ 183,555
Live Events 56,600 54,308 247,296 201,775
Schools & Theatres 16,117 15,308 63,173 63,286
Transportation 15,888 10,231 44,707 34,500
International 3,977 27,250 37,960 63,303
--------- --------- --------- ---------
Total Orders $ 113,735 $ 163,396 $ 528,452 $ 546,419
========= ========= ========= =========
CONTACT: Daktronics, Inc.
Investor Relations:
Bill Retterath, Chief Financial Officer
(605) 692-0200 Investor@daktronics.com
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