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United States securities and exchange commission logo
March 19, 2024
Sheila M. Anderson
Chief Financial Officer
Daktronics, Inc.
201 Daktronics Drive
Brookings, SD 57006-5128
Re: Daktronics, Inc.
Form 10-K for the
Year Ended April 29, 2023
Form 8-K furnished
February 28, 2024
File No. 001-38747
Dear Sheila M. Anderson:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments.
Please respond to this letter within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe a
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to this letter, we may have additional comments.
Form 8-K furnished February 28, 2024
Exhibit 99.1 Earnings Release, page 1
1. We note that in the Q3
FY2024 financial highlights, the first bullet discloses that year-to-
date product and
service orders were $534.4 million, an increase of 6.6% as compared to
$501.4 million in the
same period of fiscal 2023. In light of the fact that these amounts
represent non-GAAP
financial measures, please revise future filings to disclose the GAAP
measure of sales
revenue, more prominently than the non-GAAP measure of orders. See
guidance in Item
10(e)(1)(i)(A) of Regulation S-K and Question 102.10 of the SEC Staff s
Compliance and
Disclosure Interpretations of Non-GAAP Financial Measures.
Form 10-K for the Year Ended April 29, 2023
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Gross Profit and Contribution Margin, page 28
Sheila M. Anderson
FirstName
Daktronics,LastNameSheila M. Anderson
Inc.
Comapany
March NameDaktronics, Inc.
19, 2024
March2 19, 2024 Page 2
Page
FirstName LastName
2. We note your disclosure of contribution margin by segment, as well as
on a consolidated
basis. Please note that a segment measure of profitability that is not
considered your
segment measure of profitability under ASC 280, is considered a
non-GAAP financial
measure and subject to the guidance in Reg G and Item 10(e) of
Regulation S-K. In this
regard, please tell us how management uses this measure, and revise to
disclose why
management believes this measure is useful to investors. Also, we note
your reconciliation
from non-GAAP contribution margin to GAAP operating income. Please
note that
reconciliations of non-GAAP financial measures should begin with the
comparable GAAP
measure, which in this case we believe to be gross profit.
Additionally, each of the
segment contribution measures should be reconciled to their comparable
GAAP
measures. Please revise accordingly.
3. We note you disclose the reasons for the change in consolidated gross
profit from fiscal
2022 to 2023, which includes many factors, including several
offsetting factors. In future
filings, when there are several factors affecting the change in gross
profit, especially when
there are offsetting amounts, please revise to quantify these amounts,
when material.
Additionally, in light of the fact that it appears not all segments
trended consistently
during the periods presented, especially in terms of gross profit as a
percent of net sales,
please consider including a discussion of the change in gross profit
by segment. See
guidance in Item 303(b) of Regulation S-K.
Notes to the Financial Statements
Note 1. Nature of Business and Summary of Significant Accounting Policies
Investments in Affiliates, page 42
4. We note from your disclosure on page 43 that after the conversion of
Notes to stock
ownership in 2023, your ownership in Miortech increased to 55.9%.
Please explain to us,
and revise to disclose why it appears you continue to account for this
investment under the
equity method of accounting, rather than consolidation. Additionally,
we note your
disclosure that for the fiscal years 2023, 2022 and 2021, your share
of losses of your
affiliates was $3,332, $2,970 and $2,370, respectively. In light of
the apparent
significance of these amounts to your consolidated income before
taxes, please explain to
us how you evaluated your equity method investments under the
requirements of Rule 3-
09 of Regulation S-X.
Revenue Recognition, page 44
5. We note your disclosure on page 13 of your Risk Factor section, that
in relation to your
fixed-price contracts, you evaluate changes in estimates on a
contract-by-contract basis
and disclose significant changes, if material, in the Notes to
Consolidated Financial
Statements. The cumulative catch-up method is used to account for
revisions in estimates.
In light of the fact that revenue recognized over time is about half
of your consolidated
revenue, please revise your notes to the financial statements to
disclose this information in
accordance with ASC 606-10-50-17. Additionally, please revise your
results of
Sheila M. Anderson
Daktronics, Inc.
March 19, 2024
Page 3
operations disclosure in MD&A to separately quantify gross favorable
and gross
unfavorable changes in estimates material to either consolidated or
segment results,
accompanied by an appropriate level of analysis. Please provide us
with your intended
revised disclosure.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
Please contact Len Jui at 202-551-6693 or Claire Erlanger at
202-551-3301 with any
questions.
FirstName LastNameSheila M. Anderson Sincerely,
Comapany NameDaktronics, Inc.
Division of
Corporation Finance
March 19, 2024 Page 3 Office of
Manufacturing
FirstName LastName