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 1934
Date of
Report (Date of earliest event reported): March 24, 2010
Daktronics,
Inc.
(Exact
name of registrant as specified in its charter)
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South
Dakota
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0-23246
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46-0306862
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(State
or other jurisdiction
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(Commission
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(I.R.S.
Employer
|
|
Incorporation
or organization)
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File
Number)
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Identification
Number)
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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.)
Item
7.01 Regulation FD Disclosure
Daktronics,
Inc. (“Daktronics”) presented at the Sidoti 14th
Annual New York Emerging Growth Institutional Investor Forum on
Wednesday, March 24, 2010, in New York, New York. The PowerPoint slide
presentation used during Daktronics’s presentation is furnished as
Exhibit 99.1.
The
information furnished in this report, including the exhibits, shall not be
incorporated by reference into Daktronics’ filings with the Securities and
Exchange Commission (the "SEC") 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.
Item
9.01 Financial Statements and Exhibits:
(d) Exhibits.
99.1
PowerPoint slide presentation (furnished)
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: /s/ William R. Retterath
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|
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William
R. Retterath, Chief Financial Officer
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Date: March
24, 2010
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EXHIBIT
INDEX
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Exhibit No.
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Description
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99.1
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PowerPoint
slide presentation
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Investor
Presentation
FY2010
Third Quarter
FY2010
Third Quarter
Safe
Harbor Statement
In
addition to statements of fact, this presentation contains forward-
looking 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 its expectations, including, but
not limited to, including 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 2009 fiscal year and its Quarterly Reports
on Form 10-Q for the each of the first three quarters of fiscal 2010.
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.
looking 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 its expectations, including, but
not limited to, including 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 2009 fiscal year and its Quarterly Reports
on Form 10-Q for the each of the first three quarters of fiscal 2010.
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.
Why we
are No. 1 in our industry -
Executing against our mission to be the world
leader at informing people through large
dynamic audio-visual communications systems
Executing against our mission to be the world
leader at informing people through large
dynamic audio-visual communications systems
• Over 40 years of
proven track record in the industry
• Unparalleled sales
and service coverage
• Depth and breadth of
product offering
• Complete integrated
solution including software
• Engineering
capabilities
• Capacity to deliver:
5 plants in the United States
• Financial strength
to overcome economic conditions
FINANCIAL
SUMMARY
Financial
History
117%
Revenue growth over the past 3 years
|
(Dollars
in thousands
except
per share data)
|
FY2005
|
FY2006
|
FY2007
|
FY2008
|
FY2009
|
|
5-Yr
CAGR |
|
Sales
|
$230,346
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$309,370
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$433,201
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$499,677
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$581,931
|
|
|
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Operating
Income
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$19,436
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$31,815
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$36,915
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$38,243
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$42,617
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9.1%
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Earnings
Per Share
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$0.39
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$0.52
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$0.59
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$0.63
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$0.64
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|
|
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Dividend
Per Share
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-
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0.05
|
0.06
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0.07
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0.09
|
|
|
|
(Dollars
in thousands
except
per share data)
|
FY2005
|
FY2006
|
FY2007
|
FY2008
|
FY2009
|
|
|
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Cash from Operations
|
$22,377
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$31,917
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$14,606
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$59,833
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$48,730
|
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18.3%
|
|
Capital Expenditures, net |
(12,981)
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(18,588)
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(58,528)
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(33,393)
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(18,221)
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7.0%
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Free Cash Flow
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$9,396
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$13,329
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$(43,922)
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$26,440
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$30,509
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20.4%
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FY 2010
Third Quarter YTD Results*
*($
in thousands, except per share data)
Historical
Perspective FY2005 through
FY2008
FY2008
During
this timeframe:
• Revenue more than
doubled- 30% CAGR
• Capacity was the
primary constraint
• Added two
manufacturing plants, Sioux Falls, and
Redwood Falls and reorganized existing plants to a
product focus
Redwood Falls and reorganized existing plants to a
product focus
• Initiated major
“lean manufacturing” initiative which has
transformed our manufacturing processes
transformed our manufacturing processes
Overview FY09
through Q3 of FY10
Revenues
• First half of FY09
revenues were $330 million, a $660
million run rate (10.5% operating margin)
million run rate (10.5% operating margin)
• Second half of FY09
revenues were $250 million, or a
$500 million run rate (3.2% operating margin)
$500 million run rate (3.2% operating margin)
• Billboard business
declined from a $100 million to less
than $20 million annual run rate in Q3 of FY09
than $20 million annual run rate in Q3 of FY09
• Significant revenue
decline in Live Events in Q3 of FY10
• Extremely aggressive
pricing by competitors in all
business units
business units
Overview FY09 through
Q3 of FY10 (cont.)
Costs
• Significant excess
capacity in FY10
• Decreased operating
expenses by more than 19% from
Q1 of FY09
Q1 of FY09
• Decreased
manufacturing conversion costs by more than
28% from Q1 of FY09
28% from Q1 of FY09
Cash
• Increased cash from
$6 million in Q1 of FY09 to $58
million in Q3 of FY10
million in Q3 of FY10
Business
is Organized in 5 Business Units (“BU”)
• Domestic (includes
Canada)
• Commercial
• Live
Events
• Schools and
Theaters
• Transportation
• International
• BUs provide focus,
but key strategy is to
leverage resources across the company
leverage resources across the company
Commercial Business
Unit
Commercial
Overview
• Long-term Growth
Drivers
• Greater acceptance
& increasing use
• Effective
advertising medium
• Competitors
• Resellers, National
accounts - Optec
Watchfire,
EDS
• Digital Billboards -
Yesco, Optotec,
Watchfire
Current
Outlook for Commercial
• Some indications of
upward trend in billboard
orders for Q1 and Q2 of FY10
orders for Q1 and Q2 of FY10
• Increasing interest
from outdoor companies
• Recent public
announcements regarding
positive performance of digital, intent to buy
positive performance of digital, intent to buy
• Introducing enhanced
billboard product in Q1of
FY11 - reduced cost, increased reliability
FY11 - reduced cost, increased reliability
• Adversely impacted
by
• Credit availability
for smaller potential buyers
• Increased price
pressure and competition
Live
Events Overview
• Large sports
venues
• Professional sports
facilities
• College and
university facilities
• Mobile and
modular:
• Rental and
staging
• Touring
companies
• Pari-mutuel
• 46% of net sales in
FY09
• FY09 net sales up
60% over FY08
• FY10 net sales down
39% YTD through Q3
Live
Events Long-term Growth Drivers
• Fan experience
must
exceed living room
experience
exceed living room
experience
• High definition
(HD)
• Competition
between
venues
venues
• Improving
price/
performance of LED
technology
performance of LED
technology
• Revenue
generation
Schools
& Theatres
Business Unit
Business Unit
Schools
& Theatres Overview
• Customers
• Elementary and high
schools, junior colleges
• Park and recreation
departments
• Theatres
• Main
Products
• Scoring
Systems
• Galaxy®
displays
• Vortek® hoist
systems
• Sound systems
(Sportsound®)
• 11% of net sales in
FY09
• Primary funding is
through local sponsors and advertising
• FY2010 net sales
down 5% YTD through Q3
International
Business Unit
• Sales and service
offices in Canada,
Europe, China, Middle East, and
Australia
Europe, China, Middle East, and
Australia
• Limited
manufacturing in China
• 10% of net sales in
FY09
• Large project driven
- -commercial
and sports
and sports
• Expecting lower sales
in FY10 due
to economic and competitive factors
to economic and competitive factors
• FY10 net sales down
46% YTD
through Q3
through Q3
• Improving pipeline,
increased
competition and pricing pressure
competition and pricing pressure
Transportation
Business Unit
Transportation
Overview
• Three main
areas
• Intelligent
transportation systems (ITS)
• Aviation,
including airports and airlines
• Mass
Transit
• 6% of FY09 net
sales
• Strong backlog
going into FY2010
• FY10 net sales up
34% YTD through Q3
•
Competitors
•Skyline, Ledstar,
others
Transportation
Overview
• Long-term Growth
Drivers
• Government
spending
• Capacity constraints
on
highways, public transit,
airports and parking systems
highways, public transit,
airports and parking systems
• Limited ability to
build and
expand new roads
expand new roads
• Recent
developments
• $25 million NJ
Turnpike order
• Departure of
disruptive
competitor
competitor
• New Vanguard
product
shipping Q4 -reduced costs,
improved performance
shipping Q4 -reduced costs,
improved performance
LOOKING
AHEAD
Revenue
Outlook
• Lighter ($100
million) backlog going into Q4
• Competitive price
pressure in all markets
• Orders continue to
be relatively slow -difficult to
project orders in today’s environment
project orders in today’s environment
• Slower order flow
for Q4 of FY10 limiting
revenue opportunities for Q4, may impact Q1
revenue opportunities for Q4, may impact Q1
• Will know more about
fall sports by end of Q4
• Some encouraging
signs in Billboard market
Returning
to Long-Term Profitable Growth
• Focus on orders,
cost reduction, customer service, quality
and reliability.
and reliability.
• Ongoing product
development - historically 4% of net
sales (higher in FY2010)
sales (higher in FY2010)
• Enhance existing
products while reducing costs
• New DVX video
display product began shipping in Q4-
reduced cost and enhanced reliability improving
competitive position
reduced cost and enhanced reliability improving
competitive position
• Used in video
displays and billboards
• Ongoing rollout plan
for multiple pixel pitches
• New Vanguard product
in transportation business
Cost
Reduction Is Ongoing Process
• Continued emphasis
on reducing costs and
improving quality through lean initiatives
improving quality through lean initiatives
• Improve asset turns
(inventory alignment, process
improvement)
improvement)
• Focus on operating
margin and free cash flow
• Leverage service
(process improvement)
• More aggressive cost
reduction going forward-
payroll, infrastructure (reducing remote offices)
payroll, infrastructure (reducing remote offices)
• Have reduced
non-manufacturing staff by almost
5% in Q4 of FY10, 12% in FY10 YTD
5% in Q4 of FY10, 12% in FY10 YTD
• Short term focus to
get through downturn, emphasis
on preserving cash
on preserving cash
QUESTIONS