UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 8-K

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CURRENT REPORT

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

Date of Report (Date of earliest event reported): April 26, 2008

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Daktronics, Inc.

(Exact name of registrant as specified in its charter)

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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.)

 

On May 28, 2008, Daktronics, Inc. (the “Registrant”) issued a press release announcing financial results for the fourth quarter ending April 26, 2008. A copy of the press release is filed herewith as Exhibit 99.1 and is incorporated herein by reference.

 

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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.

 

 

 

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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.

 

 

Date: May 28, 2008

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EXHIBIT INDEX

 

 

 

 

Daktronics, Inc. Announces Fourth Quarter and Fiscal 2008 Results

Financial Highlights Include:

• Net sales up 15 percent for the year

• Backlog increases to $175 million on record order bookings

• Record level of free cash flow for the year

• Selling, general and administrative expenses decline sequentially from fiscal 2008 third quarter

• Fiscal 2009 sales growth expected to exceed 20 percent with increased operating margins

 

Brookings, S.D. – May 28, 2008 - Daktronics, Inc. (Nasdaq - DAKT) today reported fiscal 2008 fourth quarter net sales of $129.1 million and net income of $5.7 million, or $0.14 per diluted share, compared to net sales of $110.8 million and net income of $3.5 million, or $0.09 per diluted share, for the fourth quarter of fiscal 2007. Backlog at the end of the 2008 fourth quarter was approximately $175 million, compared with a backlog of approximately $127 million a year earlier, and $138 million at the end of the third quarter of fiscal 2008.

 

Net sales for the fiscal year ended April 26, 2008 totaled $499.7 million, up over15 percent from sales of $433.2 million in 2007. Net income for fiscal 2008 was $26.2 million, a 7 percent increase from net income of $24.4 million in 2007. Earnings per diluted share, for the year ended April 26, 2008, were $0.63, as compared to $0.59 per diluted share for fiscal 2007.

 

“We ended the year better than we expected, and have built momentum as we enter fiscal 2009,” said Jim Morgan, president and chief executive officer. “We finished our year with positive trends in, orders, free cash flow and operating expenses that set the stage for fiscal year 2009. We begin fiscal 2009 with a strong backlog, which does not include a large sports project that was awarded to us in April but is subject to contract execution. We focused hard on operating expense containment and curbing capital expenditures to offset the lower operating margins for fiscal 2008, which helped us achieve solid free cash flow.”

 

Morgan continued, “Our international orders were especially strong for the quarter, exceeding $27 million. These orders demonstrate our ability to become a significant player in Europe and Asia, made possible by the investments we made over the past four fiscal years. We believe our international business unit can expand orders by more than 20 percent in the upcoming year, but they will be subject to volatility from quarter to quarter.”

 

Daktronics’ billboard segment of its commercial business unit saw substantial growth in orders in the fourth quarter of fiscal 2008, with orders exceeding $30 million for the first time. This performance exceeded the previous record of $22 million. Morgan said, “We remain pleased with the performance of the billboard market. The level of interest at all levels of outdoor advertisers remains strong despite the current economic concerns in the industry.”

 

“Within our live events business unit we continue to have success with large projects, as previously announced, and expect a fairly strong first half of fiscal 2009 based on orders and the pipeline,” said Morgan. “We believe that this will drive sales growth in excess of 20 percent for fiscal 2009. That growth depends on our success in booking a number of large projects. Keeping in mind the impact that the larger projects can have on gross profit levels, we are expecting that gross margin levels in this business unit will be flat in fiscal 2009, compared to fiscal 2008.”

 

The company’s schools and theaters business unit achieved order growth of more than 35 percent for the year, which exceeds the goals we had for this business unit at the beginning of the year. Morgan added, “With our new video display and sound system offerings for the high school marketplace, we believe that the order growth of this business unit will expand at more than 15 percent into fiscal 2009.”

 

Morgan concluded, “We have a number of initiatives going into fiscal 2009 in manufacturing and product development which are intended to drive higher quality, easier built and even more capable products over fiscal year 2009, which we believe will add leverage to our business for the long-term. This includes investments in common components and increased standardization which can facilitate more streamlined manufacturing and systems support. It’s all centered on our long-term goal to become a world-class manufacturing operation that produces the best products at the right price levels for the marketplace. We are also in the process of restructuring our service organization and expect to see benefits in the form of margin improvement before the end of fiscal 2009.”

 

“As we ended the first half of fiscal 2008 and saw that we would not achieve our operating margin goals for the year, we became more aggressive about reducing capital expenditures,” said Bill Retterath, chief financial officer. “We were able to execute this change in strategy without inhibiting our growth plans for the year.” Daktronics ended the year with less than $35 million in capital expenditures and through aggressive attention to managing net operating assets we were able to generate approximately $60 million of operating cash flow and approximately $32 million of free cash flow, including proceeds from the sale of equity investments.

 

Retterath added, “We are also very pleased with the sequential decline in fourth quarter operating expenses, driven by the reduction in selling and general and administrative expenses. We expect a slight increase in first quarter of fiscal 2009 operating expenses as compared to the most recent quarter as we add to our work force from the pool of recent college graduates who are critical to our long-term success and a limited number of other strategic hires. General and administrative expenses are expected to rise throughout the year but end significantly below the sales percentage growth. Selling expenses will increase at a similar rate as general and administrative expenses for the year. Selling expenses will not increase as fast as net sales due to the reorganization of our field service force, which includes the transfer of personnel from sales to service roles which had been included in cost of sales, as previously disclosed.”

 

Business Outlook

The company is providing financial guidance for fiscal year 2009. Daktronics expects that net sales will increase by more than 20 percent over fiscal 2008 and operating margin will range from 8.0 percent to 9.5 percent. The growth of net sales depends on a number of large contracts, particularly in our live events and international business units, which could cause this growth level to change. Operating margin may vary, primarily as a result of fluctuations in gross profit levels. This guidance is subject to a number of factors that could cause it to vary and we refer investors to our filings with the Securities and Exchange Commission for a more complete list of the risk factors we face,” concluded Retterath.

 

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) 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 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 2007 fiscal year. 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.

 

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Financial tables are included on the following pages.

 

Daktronics, Inc. and Subsidiaries

Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)

 

 

 

 

 

 

 

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Daktronics, Inc. and Subsidiaries

Consolidated Balance Sheets

(in thousands)

 

 

 

 

 

 

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Daktronics, Inc. and Subsidiaries

Consolidated Balance Sheets (continued)

(in thousands)

 

 

 

 

 

 

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Daktronics, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

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Daktronics, Inc. and Subsidiaries

Sales and Orders By Segment

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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