Daktronics, Inc. Announces Results For the Third Quarter of Fiscal Year 2002.Business Editors BROOKINGS Brookings, city (1990 pop. 16,270), seat of Brookings co., E S.Dak., on the Big Sioux River; inc. 1883. A trade center in a livestock and grain region, Brookings is an important seed-processing point. , S.D.--(BUSINESS WIRE)--Feb. 13, 2002 Daktronics Daktronics Inc. (NASDAQ: DAKT) is an American company based in Brookings, South Dakota that designs, manufactures, sells, and services dynamic visual communication systems for customers worldwide. The company is best known for its diverse offering of electronic LED displays. , Inc. (Nasdaq:DAKT), a worldwide leader in the design and manufacture of large screen video displays, scoreboards and computer-programmable display systems, announced fiscal year 2002 third quarter 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 of $30.9 million and net loss of $293,000, or $.02 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, which meets the company's guidance issued on Jan. 15, 2002, for the period. This compares with third quarter net sales of $33.1 million and net income of $1.5 million, or $.08 per diluted share, one year ago. Net sales, net income and earnings per share for the nine months ended January January: see month. 26, 2002, were $112.7 million, $3.3 million, and $.17 per diluted share, respectively, compared to $109.7 million, $7.1 million and $.38 per diluted share, respectively, for the same period one year ago. Backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. at the end of the third quarter was approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $30 million, compared to $43 million one year ago. One large commercial market order accounted for a significant portion of the difference in the backlog of one year ago compared to this year. The timing of large orders can cause significant fluctuations in the company's backlog. "We are pleased with the fact that sales in both the sports and transportation areas are up over the first three quarters compared to the same period last year," said Jim Morgan Morgan, American family of financiers and philanthropists. Junius Spencer Morgan, 1813–90, b. West Springfield, Mass., prospered at investment banking. , president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "However, the commercial market sales are down slightly through the third quarter. We attribute (1) In relational database management, a field within a record. (2) In object technology, a single element of data. See instance attribute and static attribute. this to a slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in spending in destination cities such as Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. , New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , and Orlando Orlando, city, United States Orlando (ôrlăn`dō), city (1990 pop. 164,693), seat of Orange co., central Fla., in a lake region; inc. 1875. In a citrus fruit and farm area, it is one of the world's most visited vacation spots. , and to an overall slowdown in the advertising industry. Morgan continued, "We remain confident in our prospects for growth, both for Daktronics and the industry, in the years ahead. A market study published in late 2001 by Stanford Resources, an independent research firm, indicates that the worldwide large screen LED video display market will grow at an annual compound rate of 17 percent through 2007. We feel we are well positioned to resume a 15 to 20 percent top line growth rate as economic conditions improve. Our goal remains to have our bottom line growth exceed our top line growth through productivity improvements. "Our regionalization regionalization Managed care The subdivision of a broadly available service–eg, a blood bank, into quasi-autonomous regional centers, capable of making decisions and providing more cost-effective and/or faster service to hospitals and health care facilities, program remains on schedule, and we expect the structural aspects of the sales and service force reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. to be firmly in place to begin our new fiscal year in May. The benefits of this reorganization have become apparent as our salespeople sales·peo·ple pl.n. Persons who are employed to sell merchandise in a store or in a designated territory. in the field have begun calling on additional customers and are able to spend more time with new prospects, as well as existing customers. Over time, we expect to see greater synergy The enhanced result of two or more people, groups or organizations working together. In other words, one and one equals three! It comes from the Greek "synergia," which means joint work and cooperative action. among the personnel within the regions. "There remain significant opportunities in the sports markets we serve. Venues of all sizes understand the need to provide a more exciting and entertaining experience and we are able to help them provide that for their audiences. Daktronics is playing an important role at this year's winter games
When an individual or a company is involved in a large-scale project, a contractor is often hired to see that the work is done. to the official timekeeper of the event. "In addition, there have been positive events in the commercial areas of our business recently that we feel bode bode 1 v. bod·ed, bod·ing, bodes v.tr. 1. To be an omen of: heavy seas that boded trouble for small craft. 2. well for the future. In January, we received two significant follow-on fol·low-on adj. Following as a related or consequent aspect or development: "Such contracts involve follow-on sales of maintenance services" Christian Science Monitor. orders from a major outdoor advertising firm for ProStar(R) full-color LED displays to be installed on billboards. We recently introduced and have received orders for the new Galaxy(TM) 3090 series LED displays, which have larger characters for longer distance viewing in applications such as truck stops and other businesses located along major thoroughfares. We continue to work closely with key national accounts and are always looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. new opportunities. Despite the fact that the commercial market is down this year over last, we believe there are tremendous opportunities in the commercial market niches for Daktronics that will help us achieve our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth goals. "We feel that even with the current slowdown in the aviation market, sales of our products and services in the transportation market overall will remain strong in fiscal 2003 and beyond, due in part to strong sales of our Vanguard Vanguard Any of three unmanned U.S. experimental satellites. Vanguard I (1958), the second U.S. satellite placed in orbit around Earth (after Explorer 1), was a tiny 3.25-lb (1.47-kg) sphere with two radio transmitters. (R) over-the-road displays, which allow for more efficient use of existing roadways at a cost much less than building additional roads." Morgan said. "Although we experienced a loss for the quarter, which disappoints us, there were some positive items in terms of cash flow and cost reductions," said Bill Retterath, chief financial officer. "For the quarter, we generated approximately $1.3 million of EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become , and were able to reduce capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. to less than $900,000 for the quarter, without effecting future capacity and growth. In terms of the balance sheet, total long and short term debt was reduced by $2.8 million and working capital improved slightly. The reduction in accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying contributed to a significant decline in days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). . As announced previously, we also made significant reductions in payroll payroll a list of employees, their salary rates, tax deductions, amounts paid, payroll tax, long service leave entitlements. , through a combination of means, including attrition Attrition The reduction in staff and employees in a company through normal means, such as retirement and resignation. This is natural in any business and industry. Notes: , terminations and salary reductions. Results for the quarter include costs of these reductions, primarily, severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when payments. We continue to examine ways we do business, including looking at ways we can generate additional revenue and reduce costs in our processes." The company will web cast its quarterly conference call at 10:00 am (CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. ) this morning. The conference call can be accessed through http://www.daktronics.com or http://www.vcall.com. Daktronics, a manufacturer and technical contractor contractor n. 1) a person or entity that enters into a contract. 2) commonly, a person or entity that agrees to construct a building or to provide or install specialized portions of the construction. , is one of the world's largest suppliers of electronic scoreboards, computer-programmable displays and large screen video boards. The company has strong leadership positions in electronic scoreboards; outdoor programmable display systems available in LED, incandescent in·can·des·cent adj. 1. Emitting visible light as a result of being heated. 2. Shining brilliantly; very bright. See Synonyms at bright. 3. and reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. technologies; and large screen video display and control. Daktronics has installed displays in more than 70 countries. For more information, visit the company's worldwide web site at http://www.daktronics.com, email the company at sales@daktronics.com, call toll-free 1-888-325-8766 in the U.S., or write to the company at 331 32nd Avenue, P.O. Box 5128, Brookings, SD 57006-5128. 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. reflecting the Company's expectations or beliefs concerning future events which could materially affect Company performance in the future. The Company cautions that these and similar statements involve risk and uncertainties including changes in economic and market conditions, management of growth, timing and magnitude magnitude, in astronomy, measure of the brightness of a star or other celestial object. The stars cataloged by Ptolemy (2d cent. A.D.), all visible with the unaided eye, were ranked on a brightness scale such that the brightest stars were of 1st magnitude and the of future contracts, and other risks noted in the Company's SEC filings which may cause actual results to differ materially. 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.
Daktronics, Inc.
Consolidated Statements of Income
(Dollars in thousands except earnings (loss) per share)
(unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
January 26, January 27, January 26, January 27,
2002 2001 2002 2001
(13 weeks) (13 weeks) (39 weeks) (39 weeks)
------------ ------------ ------------ -----------
Net sales $ 30,863 $ 33,071 $ 112,682 $ 109,721
Cost of goods sold 21,817 23,296 79,093 76,813
------------ ------------ ------------ -----------
Gross profit 9,046 9,775 33,589 32,908
------------ ------------ ------------ -----------
Operating expenses:
Selling 5,592 4,359 16,623 13,282
General and
administrative 1,744 1,640 5,605 4,265
Product design
and development 1,890 1,344 5,312 3,835
------------ ------------ ------------ -----------
Total operating
expenses 9,226 7,343 27,540 21,382
------------ ------------ ------------ -----------
Operating income
(loss) (180) 2,432 6,049 11,526
Nonoperating income
(expense):
Interest income 201 208 565 570
Interest expense (361) (461) (1,204) (1,040)
Other income
(expense), net (111) 265 (41) 637
------------ ------------ ------------ -----------
Income (loss)
before income
taxes and
minority interest (451) 2,444 5,369 11,693
Income tax expense
(benefit) (179) 916 2,023 4,616
------------ ------------ ------------ -----------
Income (loss)
before minority
interest (272) 1,528 3,346 7,077
Minority interest
in income of
subsidiary 21 -- 49 --
------------ ------------ ------------ -----------
Net income (loss) $ (293) $ 1,528 $ 3,297 $ 7,077
============ ============ ============ ===========
Weighted average
number of shares
and common
equivalent shares 19,207,851 18,863,730 19,518,072 18,782,282
============ ============ ============ ===========
Earnings (loss) per
share(1):
Basic $ (0.02) $ 0.09 $ 0.18 $ 0.40
============ ============ ============ ===========
Diluted $ (0.02) $ 0.08 $ 0.17 $ 0.38
============ ============ ============ ===========
(1) Per share amounts for the three and nine months ended January 27,
2001 have been restated to reflect a two-for-one stock split in the
form of a stock dividend that went into effect on June 25, 2001.
Daktronics, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
January 26, April 28,
2002 2001
(Unaudited)
----------- -----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 496 $ 2,896
Accounts receivable, less allowance for
doubtful accounts 15,508 21,090
Current maturities of long-term receivables 2,044 2,030
Inventories 18,754 19,719
Costs and estimated earnings in excess
of billings on uncompleted contracts 15,587 10,890
Prepaid expenses and other 365 529
Income taxes receivable 247 97
Deferred income taxes 2,103 2,103
----------- -----------
Total current assets 55,104 59,354
----------- -----------
Advertising rights 1,225 1,281
Long term receivables, less current
maturities 6,408 5,269
Goodwill, net of accumulated amortization 1,156 1,469
Intangible and other assets, other than
goodwill, net 1,093 970
----------- -----------
9,882 8,989
----------- -----------
PROPERTY AND EQUIPMENT, at cost
Land 654 542
Buildings 12,081 9,451
Machinery and equipment 19,849 18,404
Office furniture and equipment 9,563 7,487
Equipment held for rental 3,284 1,324
Transportation equipment 1,941 1,481
----------- -----------
47,372 38,689
Less accumulated depreciation 19,945 16,818
----------- -----------
27,427 21,871
----------- -----------
TOTAL ASSETS $ 92,413 $ 90,214
=========== ===========
Daktronics, Inc.
Consolidated Balance Sheets (Continued)
(Dollars in thousands)
January 26, April 28,
2002 2001
(unaudited)
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable, bank $ 8,354 $ 7,911
Accounts payable 7,668 10,199
Accrued expenses 5,480 6,981
Current maturities of long-term debt 4,337 3,883
Billings in excess of costs and estimated
earnings on uncompleted contracts 3,990 2,177
Customer deposits 760 1,236
----------- -----------
Total current liabilities 30,589 32,387
----------- -----------
Long-term debt, less current maturities 9,608 10,344
Deferred income 1,414 531
Deferred income taxes 1,039 1,050
----------- -----------
12,061 11,925
----------- -----------
TOTAL LIABILITIES 42,650 44,312
MINORITY INTEREST IN SUBSIDIARY 129 79
----------- -----------
SHAREHOLDERS' EQUITY:
Common stock 13,431 12,900
Additional paid-in capital 341 341
Retained earnings 35,897 32,600
Less cost of treasury stock (9) (9)
Accumulated other comprehensive loss,
foreign currency translation adjustment (26) (9)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 49,634 45,823
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 92,413 $ 90,214
=========== ===========
Daktronics, Inc.
Consolidated Statements of Cash Flows
(Dollars in thousands)
(unaudited)
Nine Months Ended
-----------------
January 26, January 27,
2002 2001
(39 weeks) (39 weeks)
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,297 $ 7,077
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 3,127 2,489
Amortization 385 220
Minority interest in income of subsidiary 49 --
Provision for doubtful accounts 504 123
Deferred taxes, net (11) 10
Net change in operating assets and
liabilities (1,743) (5,911)
----------- -----------
Net cash provided by operating expenses 5,608 4,008
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (6,533) (6,715)
Purchase of business -- (1,071)
Other, net -- (6,137)
----------- -----------
Net cash used in investing activities (6,533) (13,923)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowing on notes payable 443 3,715
Proceeds from long-term debt -- 6,752
Principal payments on long-term debt (2,432) (1,603)
Proceeds from exercise of stock options 531 188
----------- -----------
Net cash provided by (used in) financing
activities (1,458) 9,052
----------- -----------
Effect of exchange rate changes on cash (17) --
----------- -----------
DECREASE IN CASH AND CASH EQUIVALENTS (2,400) (863)
CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD 2,896 1,217
----------- -----------
CASH AND CASH EQUIVALENTS END OF PERIOD $ 496 $ 354
=========== ===========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Purchase of building and equipment through
contract for deed $ 2,150 $ --
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