Daktronics, Inc. Announces Record First Quarter Fiscal 2009 Results.* Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight 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. -- 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 di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. 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 Lean manufacturing is the production of goods using less of everything compared to mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop a new product. , 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 Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , 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  This article or section is about a planned or proposed stadium.It may contain information of a speculative nature and the content may change dramatically as the construction and/or , 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[R] 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 optimize - optimisation the manufacturing process. Orders rose 12 percent without the benefit of the New Meadowlands Stadium. We are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op 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% 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 restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). 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 re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. 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 Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. 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 dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d in managing the growth while keeping in mind our long-term objectives. Operating costs operating costs npl → gastos mpl operacionales 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 “Tampa” redirects here. For other uses, see Tampa (disambiguation). Tampa is a United States city in Hillsborough County, on the west coast of Florida. It serves as the county seat for Hillsborough County.GR6. , as we felt that the return on investment did not justify continued ownership. This resulted in a one-time, pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern 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 Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: 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. 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 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 United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. or write to the company at 201 Daktronics Dr., PO Box 5128 Brookings, S.D. 57006-5128. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Cautionary Notice: In addition to statements of historical fact, this news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or or unanticipated events as they occur. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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