Daktronics, Inc. Announces First Quarter Fiscal 2021 Results
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Fiscal 2021 is a 52-week year and fiscal 2020 was a 53-week year; therefore, the three months ended
Cash generated by operating activities in the first three months of fiscal 2021 was
Orders for the first quarter of fiscal 2021 decreased 34.8 percent as compared to the first quarter of fiscal 2020. For comparison, orders paced at
Net sales decreased by 20.3 percent in the first quarter of fiscal 2021 as compared to the first quarter of fiscal 2020. Net sales decreased in all business units. The change in sales primarily relates to fluctuations in the timing of order bookings, and related conversion to sales. Some shipping and on-site delays continue to be caused by COVID-19 related work restrictions or customer delays in readiness for their applications.
Gross profit as a percentage of net sales was 24.9 percent for the first quarter of fiscal 2021 as compared to 25.2 percent a year earlier. Operating expenses for the first quarter of fiscal 2021 were
The effective tax rate for the first quarter of fiscal 2021 was 16.4 percent compared to an effective tax rate of 12.6 percent for the first quarter of fiscal 2020.
Outlook
Kurtenbach added, "We believe the audio-visual industry fundamentals will drive long-term growth for our business, but the near-term outlook shows contraction and greater volatility overall. We expect our customers will continue to have disruptions in revenues caused by COVID-19 throughout the current fiscal year. We are focused on promoting our value to new and existing markets, while managing our cost structure to meet the uncertain demand. Even though we face a challenging fiscal 2021, we intend to emerge as a stronger organization."
About
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 and orders, fluctuations in margins, the introduction of new products and technology, the impact of adverse weather conditions, increased regulation and other risks described in the company's
For more information contact: | ||
INVESTOR RELATIONS: | ||
Tel (605) 692-0200 | ||
Investor@daktronics.com | ||
Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) |
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Three Months Ended | |||||||
2020 |
2019 |
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Net sales | $ | 143,644 | $ | 180,256 | |||
Cost of sales | 107,883 | 134,751 | |||||
Gross profit | 35,761 | 45,505 | |||||
Operating expenses: | |||||||
Selling | 11,556 | 18,297 | |||||
General and administrative | 7,124 | 9,093 | |||||
Product design and development | 7,532 | 10,500 | |||||
26,212 | 37,890 | ||||||
Operating income | 9,549 | 7,615 | |||||
Nonoperating (expense) income: | |||||||
Interest income | 85 | 269 | |||||
Interest expense | (73 | ) | (35 | ) | |||
Other (expense) income, net | (627 | ) | 193 | ||||
Income before income taxes | 8,934 | 8,042 | |||||
Income tax expense | 1,467 | 1,012 | |||||
Net income | $ | 7,467 | $ | 7,030 | |||
Weighted average shares outstanding: | |||||||
Basic | 44,654 | 45,089 | |||||
Diluted | 44,751 | 45,261 | |||||
Earnings per share: | |||||||
Basic | $ | 0.17 | $ | 0.16 | |||
Diluted | $ | 0.17 | $ | 0.16 | |||
Cash dividends declared per share | $ | — | $ | 0.05 | |||
Consolidated Balance Sheets (in thousands) |
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2020 |
2020 |
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(unaudited) | |||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 44,609 | $ | 40,398 | |||
Restricted cash | 96 | 14 | |||||
Marketable securities | 1,230 | 1,230 | |||||
Accounts receivable, net | 88,608 | 72,577 | |||||
Inventories | 81,435 | 86,803 | |||||
Contract assets | 33,261 | 35,467 | |||||
Current maturities of long-term receivables | 3,306 | 3,519 | |||||
Prepaid expenses and other current assets | 7,595 | 9,629 | |||||
Income tax receivables | 260 | 548 | |||||
Property and equipment and other assets available for sale | 1,966 | 1,817 | |||||
Total current assets | 262,366 | 252,002 | |||||
Property and equipment, net | 66,059 | 67,484 | |||||
Long-term receivables, less current maturities | 739 | 1,114 | |||||
8,048 | 7,743 | ||||||
Intangibles, net | 3,070 | 3,354 | |||||
Investment in affiliates and other assets | 26,526 | 27,683 | |||||
Deferred income taxes | 13,312 | 13,271 | |||||
Total non-current assets | 117,754 | 120,649 | |||||
TOTAL ASSETS | $ | 380,120 | $ | 372,651 | |||
Consolidated Balance Sheets (continued) (in thousands) |
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2020 |
2020 |
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(unaudited) | |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable | $ | 48,255 | $ | 47,834 | |||
Contract liabilities | 50,159 | 50,897 | |||||
Accrued expenses | 33,941 | 36,626 | |||||
Warranty obligations | 10,648 | 9,764 | |||||
Income taxes payable | 1,107 | 844 | |||||
Total current liabilities | 144,110 | 145,965 | |||||
Long-term warranty obligations | 16,412 | 15,860 | |||||
Long-term contract liabilities | 10,715 | 10,707 | |||||
Other long-term obligations | 21,469 | 22,105 | |||||
Long-term income taxes payable | 723 | 582 | |||||
Deferred income taxes | 469 | 452 | |||||
Total long-term liabilities | 49,788 | 49,706 | |||||
TOTAL LIABILITIES | 193,898 | 195,671 | |||||
SHAREHOLDERS' EQUITY: | |||||||
Common stock | 60,010 | 60,010 | |||||
Additional paid-in capital | 45,192 | 44,627 | |||||
Retained earnings | 92,557 | 85,090 | |||||
(7,297 | ) | (7,470 | ) | ||||
Accumulated other comprehensive loss | (4,240 | ) | (5,277 | ) | |||
TOTAL SHAREHOLDERS' EQUITY | 186,222 | 176,980 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 380,120 | $ | 372,651 | |||
Consolidated Statements of Cash Flows (in thousands) (unaudited) |
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Three Months Ended | |||||||
2020 |
2019 |
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CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 7,467 | $ | 7,030 | |||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 4,337 | 4,383 | |||||
Loss on sale of property, equipment and other assets | (53 | ) | (26 | ) | |||
Share-based compensation | 539 | 643 | |||||
Equity in loss of affiliates | 529 | 118 | |||||
Provision for doubtful accounts | 1 | 5 | |||||
Deferred income taxes, net | (4 | ) | (40 | ) | |||
Change in operating assets and liabilities | (4,271 | ) | (30,331 | ) | |||
Net cash provided by (used in) operating activities | 8,545 | (18,218 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchases of property and equipment | (3,155 | ) | (5,856 | ) | |||
Proceeds from sales of property, equipment and other assets | 86 | 73 | |||||
Proceeds from sales or maturities of marketable securities | — | 14,510 | |||||
Purchases of and loans to equity investment | (492 | ) | (455 | ) | |||
Net cash (used in) provided by investing activities | (3,561 | ) | 8,272 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Principal payments on long-term obligations | (210 | ) | (1,221 | ) | |||
Dividends paid | — | (2,250 | ) | ||||
Payments for common shares repurchased | (1,187 | ) | |||||
Net cash used in financing activities | (210 | ) | (4,658 | ) | |||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (481 | ) | (37 | ) | |||
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 4,293 | (14,641 | ) | ||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH: | |||||||
Beginning of period | 40,412 | 35,742 | |||||
End of period | $ | 44,705 | $ | 21,101 | |||
(in thousands) (unaudited) |
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Three Months Ended | ||||||||||||||
2020 |
2019 |
Dollar Change | Percent Change | |||||||||||
Commercial | $ | 34,506 | $ | 44,035 | $ | (9,529 | ) | (21.6 | )% | |||||
Live Events | 51,474 | 59,306 | (7,832 | ) | (13.2 | ) | ||||||||
28,943 | 30,465 | (1,522 | ) | (5.0 | ) | |||||||||
Transportation | 14,498 | 19,018 | (4,520 | ) | (23.8 | ) | ||||||||
International | 14,223 | 27,432 | (13,209 | ) | (48.2 | ) | ||||||||
$ | 143,644 | $ | 180,256 | $ | (36,612 | ) | (20.3 | )% | ||||||
Orders: | ||||||||||||||
Commercial | $ | 25,533 | $ | 38,648 | $ | (13,115 | ) | (33.9 | )% | |||||
Live Events | 41,860 | 66,969 | (25,109 | ) | (37.5 | ) | ||||||||
28,099 | 30,552 | (2,453 | ) | (8.0 | ) | |||||||||
Transportation | 13,089 | 22,215 | (9,126 | ) | (41.1 | ) | ||||||||
International | 13,572 | 29,079 | (15,507 | ) | (53.3 | ) | ||||||||
$ | 122,153 | $ | 187,463 | $ | (65,310 | ) | (34.8 | )% | ||||||
Reconciliation of Free Cash Flow* (in thousands) (unaudited) |
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Three Months Ended | |||||||
2020 |
2019 |
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Net cash provided by (used in) operating activities | $ | 8,545 | $ | (18,218 | ) | ||
Purchases of property and equipment | (3,155 | ) | (5,856 | ) | |||
Proceeds from sales of property and equipment | 86 | 73 | |||||
Free cash flow | $ | 5,476 | $ | (24,001 | ) |
*In evaluating its business,
(1) Backlog is not a measure defined by
Source: Daktronics, Inc.