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): August 2, 2008

---

Daktronics, Inc.

(Exact name of registrant as specified in its charter)

---

 

 

 

 

201 Daktronics Drive

Brookings, SD 57006

(Address of principal executive office) (zip code)

(605) 692-0200

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report.)

 

On August 26, 2008, Daktronics, Inc. (the “Registrant”) issued a press release announcing financial results for the first quarter ending August 2, 2008. A copy of the press release is filed herewith as Exhibit 99.1 and is incorporated herein by reference.

 

---

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.

 

 

 

---

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: August 26, 2008

---

EXHIBIT INDEX

 

 

 

 

 

Daktronics, Inc. Announces Record First Quarter Fiscal 2009 Results

• Net sales increase 33 percent, earnings up 41 percent compared to fiscal 2008 first quarter

• Backlog up 22 percent over last year at $173 million

• Reiterates annual guidance

• Selling, general and administrative spending contained

• Quarter contains 14 weeks versus 13 weeks in fiscal 2008  

 

Brookings, S.D. – Aug. 26, 2008 - Daktronics, Inc. (Nasdaq - DAKT) today reported fiscal 2009 first quarter net sales of $161.2 million and net income of $9.7 million, or $0.24 per diluted share, compared to net sales of $120.9 million and net income of $7.1 million, or $0.17 per diluted share, for the first quarter of fiscal 2008. Backlog at the end of the 2009 first quarter was approximately $173 million, compared with a backlog of approximately $142 million a year earlier, and $175 million at the end of the fourth quarter of fiscal 2008.

 

As previously announced, the first quarter of fiscal year 2009 contains 14 weeks as compared to the customary 13- week quarter, and fiscal year 2009 is a 53-week fiscal year. The first quarter of fiscal 2008 contained 13 weeks.

 

“This quarter was a great start on achieving our goal of annual top line growth of more than 20 percent with a higher rate of growth in earnings,” said Jim Morgan, president and chief executive officer. “We demonstrated the benefits of our ongoing initiatives to increase our throughput and improve our processes, as we set new records in quarterly sales and earnings. Our investments in lean manufacturing, design for manufacturability, inventory management, facilities and systems led to record levels for manufacturing throughput. We also continued to demonstrate our commitment to controlling operating expenses, which increased only slightly from the fourth quarter of fiscal 2008 after adjusting for the extra week in the fiscal 2009 first quarter.”

 

Orders for the quarter were up over 15 percent as compared to the first quarter of fiscal 2008. This does not include the recently announced contract for the New Meadowlands Stadium, which is expected to exceed $45 million. All domestic business units benefited from order growth.

 

Morgan added, "Our Commercial business unit saw the highest growth rate at 29 percent in the first quarter of fiscal 2009 over the same period last year. This growth was lead by increases in the billboard niche and was partially offset by weakness in our Galaxy® product line sales. We attribute that primarily to economic conditions.”

 

"Our Live Events business unit exceeded our expectations for sales during the quarter.  This is a testimony to the effectiveness of our lean manufacturing efforts, and the reengineering of our video display products to optimize the manufacturing process.  Orders rose 12 percent without the benefit of the New Meadowlands Stadium.  We are optimistic about our chances of booking two additional large sports projects in the next quarter in addition to the New Meadowlands Stadium order," said Morgan.

 

Internationally, the company completed several large high profile projects that were booked in fiscal 2008, including the rail station project in Beijing, China and an 8-unit outdoor LED video display network in the United Kingdom which lead to record quarterly sales for the International business unit. Gross margins in the international business unit were higher than expected for the first quarter of fiscal 2009. “Due to the inherent volatility of the international market we expect that net sales will be down for the second quarter, but we remain optimistic about the growth opportunities for the rest of the fiscal year,” said Morgan.

 

The company’s Schools and Theaters business unit achieved order growth of more than 11 percent for the quarter, which is slightly ahead of plan. Morgan added, “Lead times in the business unit were stretched a little during the quarter, and sales lagged compared to expectations, but we intend to still meet our sales goals for the year.”

 

Daktronics' Transportation business unit also experienced order growth ahead of plan and is up more than 15 percent for the first quarter of fiscal 2009 as compared to the same period one year ago.

 

Morgan concluded, “In addition to the progress we continue to make on improving our product designs and manufacturing processes to increase throughput and reduce costs, we are also making progress in restructuring our service organization to improve margins. These are all critical strategic initiatives for us, but the investment in these initiatives adds pressure on earnings in the short-term.”

 

“Gross margin percents for the quarter were not as strong as expected due primarily to higher warranty costs and inventory write-downs,” said Bill Retterath, chief financial officer. “As announced previously, we reorganized our sales and service organization which resulted in approximately $0.8 million of costs per quarter being transferred from selling expense into cost of goods sold in the first quarter of fiscal 2009. This also impacted gross margin percents as compared to prior periods.”

 

Retterath added, “We are pleased with our control over operating expenses. Our largest cost is personnel expense and we have been extremely diligent in managing the growth while keeping in mind our long-term objectives. Operating costs rose only slightly on a sequential basis when the additional week of the quarter and the impact of reorganizing our field services organization are factored into the quarterly results. Finally, we are on track to be at or under budget for the year on capital expenses. We sold our production studio in Tampa, Florida, as we felt that the return on investment did not justify continued ownership. This resulted in a one-time, pretax gain of approximately $1 million. We will rent a portion of the building back for our Tampa operations.”

 

Business Outlook

The company is reiterating its financial guidance for fiscal 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 investors should refer to our filings with the Securities and Exchange Commission for a more complete list of risk factors.

 

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.

 

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 Theatres 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.

 

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. 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.

 

-- END --

 

 

Financial tables are included on the following pages.

 

Daktronics, Inc. and Subsidiaries

Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)

 

 

 

 

 

 

 

-- MORE --

 

 

Daktronics, Inc. and Subsidiaries

Consolidated Balance Sheets

(in thousands)

 

 

 

 

 

 

 

 

-- MORE --

 

Daktronics, Inc. and Subsidiaries

Consolidated Balance Sheets (continued)

(in thousands)

 

 

 

 

 

 

 

-- MORE --

 

 

Daktronics, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

-- MORE --

 

Daktronics, Inc. and Subsidiaries

Sales and Orders By Segment

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-- END --