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): January 9, 2008
Daktronics, Inc.
(Exact name of registrant as specified in its charter)
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South Dakota |
0-23246 |
46-0306862 |
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(State or other jurisdiction |
(Commission |
(I.R.S. Employer |
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Incorporation or organization |
File Number) |
Identification Number) |
331 32nd 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.)
7.01 Regulation FD Disclosure
Please find the January 2008 Needham & Company Growth Conference Presentation attached as Exhibit 99.1. This Current Report on Form 8-K and the attached exhibit are furnished to, but not filed with, the Securities Exchange Commission ("SEC") and shall not be deemed to be incorporated by reference into any of the Company's filings with the SEC under the Securities Act of 1933, as amended, or the Exchange Act of 1934, as amended.
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Item 9.01 |
Financial Statements and Exhibits: |
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(c) Exhibits. |
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99.1 |
Needham & Company Growth Conference Presentation |
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.
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DAKTRONICS, INC. |
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By: |
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William R. Retterath, Chief Financial Officer |
Date: January 9, 2008
Investor Presentation
Needham & Company Growth Stock Conference
January 8-11, 2008
Cautionary Notice
In addition to statements of fact, this presentation 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, seasonality of business, timing and magnitude of future contracts, management of growth, 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.
Strong Industry Leadership Position
executing against our mission to be the world leader
at informing
people through dynamic audio-visual
communications systems
Current Position in the Marketplace:
#1 supplier of LED video displays*
#1 supplier of LED text and graphics displays*
#1 supplier of LED based scoring systems**
(*according to research firm iSuppli. ** company estimates)
Five Year Financial History
(Dollars in thousands
except per share data)
FY2003
FY2004
FY2005
FY2006
FY2007
5-Yr
CAGR
Sales
$177,764
$209,907
$230,346
$309,370
$433,201
23.8%
Operating Income
$ 19,825
$ 27,530
$ 19,436
$ 31,815
$ 36,915
32.3%
Earnings Per Share
$ 0.32
$ 0.44
$ 0.39
$ 0.52
$ 0.59
35.1%
Dividend Per Share
-
-
-
0.05
0.06
Overall Competitive Advantage
Complete integrated solution
Unparalleled sales and service coverage
Engineering capabilities
Extensive software solutions
Depth of extended services
Product quality and performance
Industry experience
Capacity to deliver
Industry Fundamentals
Rapidly growing adoption of LED display technology:
Continually improving price performance
Full color at affordable price levels
Effective media platform
Customer competitive factors
Trickle down of technology and systems
Highly competitive marketplace across all markets.
Business Units (Segments)
Implemented in FY08 to drive financial and operational
performance
Domestic (includes Canada)
Commercial
Live Events
Schools and theaters
Transportation
International
Commercial Business Unit
Commercial Overview
Three main areas
Digital billboard
National accounts
Resellers
Main products
ValoTM digital displays
Galaxy®
GalaxyProTM
ProStar® video
33% of FY07 net sales
Order growth in FY08 expected to be in excess of 20%
Commercial Overview
Growth Drivers
Greater acceptance & increasing use
Billboard applications
Competitors
Resellers – Optec, Watchfire, EDS
National Accounts – Optec, Hi-Tech
Digital Billboards – Yesco, Optotec
Commercial - National Accounts
Concentrated in a few accounts
Galaxy® product line
Opportunities exists as
acceptance increases
Expect greater than 20% order
growth FY08
Commercial – Digital Billboard
Built on a solid ROI model
Key barriers include
product development and
service
Expect greater than 25%
order growth in FY08
Live Events
Business Unit
Live Events Overview
Formerly referred to as large sports venues
Professional sports facilities
College and university facilities
Mobile and modular:
Rental and staging
Touring companies
Parimutual
39% of net sales in FY07
Expected order growth for FY08 to be flat
Large order awards likely to be pushed out to FY09 and
actual amounts could cause
this to vary significantly.
Generally, not impacted by economic cycles
Live Events Growth Drivers
Fan experience
High definition (HD)
Competition between
venues
Improving
price/performance of
LED technology
Increasing use
Revenue generation
New construction
Live Events Competition
Competition – Large Sports Venues
Mitsubishi, ANC, Philips, Barco, Panasonic, and others
Competition generally must partner with others to
compete with Daktronics breadth of product
Competition – Mobile and Modular
Barco, Lighthouse, Toshiba, Hibino
Competitive advantages
Unparalleled range of product
Complete integrated system
Project management
Engineering talent
Services and support
Large Sports Venues – New
Construction
Generally, not dependent on new construction projects
Notable difference for FY08-FY10
Significant increase in facility spending for display systems
Recent wins:
New York Yankees – $19 million
Indianapolis Colts – $11 million
Kansas City Royals – $10 million
Pending transactions:
University of Minnesota – $9 million
New York Mets – $11 million
Pending bids for large projects for rest of fiscal year
New York Giants/Jets , Kansas City Chiefs, Minnesota
Twins
Uncertain timing for booking
Mobile & Modular
Significant product investment over past three years
Designed for ease of use, set-up and tear down
Schools & Theatres
Business Unit
Schools & Theatres Overview
Formerly referred to as small sports venues
Elementary and high schools, junior colleges
Park and recreation departments
Theatres
Main Products
Sports Scoring Systems
Galaxy® displays
Vortek® hoist systems
12% of net sales in FY07
Expected order growth in excess of 35% in FY08
Schools & Theatres Overview
Growth drivers
Larger and more capable display systems
New construction and renovations
Competition between venues
Parent and student communications
Competitors
Sports systems
Trans-Lux, Nevco, All American, Electro-Mech,
Colorado Timing Systems, Spectrum
Campus Communications
Optec, Hi-Tech, AMS, Watchfire & others
Automated Rigging Systems
JR Clancy and Stage Technologies
International Business Unit
International Overview
Established presence in
Europe in 2003
Asia in 2005
Middle East in 2006
10% of net sales in FY07
Order growth expected of >40%
Recent orders from JC Decaux
Making significant investments
Transportation Business Unit
Transportation Overview
Three main areas:
Intelligent transportation systems (ITS)
Aviation, including airports and airlines
Portable traffic display suppliers
6% of FY07 net sales
Order growth in FY08 expected to be flat
Transportation Overview
Growth Drivers
Government spending
Capacity constraints on
highways, public transit,
airports and parking systems
Limited ability to build or
expand new roads
Increased air travel
Work-zone safety
Competitors
ITS – Skyline, Ledstar
Aviation – TransLux, AMS
Portables – Addco, Vermac
FINANCIAL SUMMARY
FY 2008 Year-to-Date Results*
*($ in thousands, except per share data)
2008
2007
Change
Net Sales
252,359
$
215,683
$
17.0%
Gross Profit
76,079
$
61,746
$
23.2%
Gross margin
30.1%
28.6%
Operating Income
23,615
$
20,977
$
12.6%
Operating margin
9.4%
9.7%
Net Income
15,121
$
13,879
$
8.9%
% of revenue
6.0%
6.4%
Earnings per share (diluted)
0.37
$
0.34
$
8.8%
Capacity Expansion
FY2007 investment of $59 million
Brookings facilities – general purpose of 80,000 sq. ft.
Sioux Falls facility – 120,000 sq. ft. with a focus on digital
billboards
Redwood Falls facility – 100,000 sq. ft. with a focus on Galaxy®
and
gas price digit displays
Information systems infrastructure
Land for long-term growth
FY2008 expected investment of $50 million
Completion of Brookings facility addition
Additional capacity in Redwood Falls
Remaining $35 million for non-facilities initiatives
FY2009 expectation
Demonstrated leverage compared to sales over the long-term
Growth Strategies – Cash
Investments
Ongoing Product Development – 4% of net sales
New product for existing markets
Enhance existing products while reducing costs
Emphasis on process improvement – Lean manufacturing
Continue to expand distribution
Add local sales and service offices domestic and international
Continue to develop service network
Capacity: facilities, equipment and systems (IT)
Maintaining Profitable Growth
Aggressively implement lean business processes to reduce
costs and improve quality
Address SG&A on a quarterly basis, to create leverage over
the long-term
Improve inventory and receivables turns
Focus on operating margin
Previously Announced Outlook
for Q3 FY2008
Order bookings for the third quarter may exceed $150
million (subject to booking of large orders)
Previously announced Q3 estimates
Net sales $107-116 million
EPS $.10 - $.15 (fully-diluted)
QUESTIONS