Daktronics, Inc. Announces Second Quarter Results.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. -- Revenue up 27% quarter over quarter 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. up 62% to $81 million over last year Digital billboard volume increases 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) today reported fiscal 2006 second 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 $75.8 million and net income of $5.2 million, or $0.26 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 with second quarter net sales of $59.5 million and net income of $5.2 million, or $0.26 per diluted share, one year ago. Backlog at the end of the quarter was approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $81 million as compared to $50 million at the end of the second quarter of fiscal year 2005. "It is evident from our strong sales and order performance that the industry is robust and we are well positioned to respond," 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 chief executive officer. "Our success this quarter was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the dedication, hard work and support of our employees, subcontractors, and vendors, who collectively did what it took to design, manufacture and install equipment to meet our many critical deadlines. Orders were up significantly in the commercial market, in large part due to the growing interest in outdoor digital billboards and the national account business. Sports orders also grew, led by the recently announced order for Dolphins Stadium that will showcase A showcase, or vitrine, is a glassed-in cabinet or case for displaying delicate or valuable articles such as objects d'art or merchandise in a shop, museum, or house. the world's largest high definition LED video display. Finally, we were pleased to see a rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective in our small sports facility business," said Morgan. Morgan continued, "Our gross margin percentage was down sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen from the first quarter. Going forward, we will focus on eliminating the production inefficiencies resulting from the expedited rapid ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale in production in the past two quarters through increased standardization standardization In industry, the development and application of standards that make it possible to manufacture a large volume of interchangeable parts. Standardization may focus on engineering standards, such as properties of materials, fits and tolerances, and drafting , economies of scale, and other process improvements. This ramp up during the last quarter had an adverse effect on gross margins. We expect that gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. will improve slightly next quarter given our current backlog and project estimates," said Morgan. "A number of noteworthy orders were booked during the quarter. In addition to Dolphins Stadium, we received orders for large sports systems for the Rose Garden in Portland Portland, town, England Portland, town (1991 pop. 12,945), Dorset, S England. It is on the Isle of Portland, a small rocky peninsula. Portland stone has been used in St. Paul's Cathedral and other important London buildings. Lobsters and crabs are harvested. , Oregon Oregon, city, United States Oregon, city (1990 pop. 18,334), Lucas co., NW Ohio, a suburb adjacent to Toledo, on Lake Erie; inc. 1958. It is a port with railroad-owned and -operated docks. The city has industries producing oil, chemicals, and metal products. , the Delta Center, in Salt Lake City, and the Arrowhead arrowhead, any plant of the genus Sagittaria, widely distributed marsh or aquatic herbs of the primitive family Alismataceae (water-plantain family). The name derives from the arrowhead-shaped leaves of many species. Pond POND. A body of stagnant water; a pool. 2. Any one has a right to erect a fish pond; the fish in ii are considered as real estate, and pass to the heir and not to the executor. Ow. 20. See Pool; River; Water. in Anaheim, California “Anaheim” redirects here. For Annaheim, see Annaheim, Saskatchewan. Anaheim is a city in Orange County, California, located 28 miles southeast of Los Angeles. . The commercial market bookings included orders for more than 25 digital LED video billboards, and large systems for the new South Coast Casino casino or cassino (both: kəsē`nō). 1 Card game played with a full deck by two to four players. Its origins are obscure though it probably traces back to the Italian game of Scopa. in 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. , Nevada Nevada (nəvăd`ə, –vä–), far western state of the United States. It is bordered by Utah (E), Arizona (SE), California (SW, W), and Oregon and Idaho (N). , Chelsea Piers Chelsea Piers, officially Chelsea Piers Sports & Entertainment Complex, is a series of sports and entertainment buildings constructed on four adjoining piers on the West Side of Manhattan in New York City. in 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 the Emperor emperor [Lat. imperator=one holding supreme power, especially applied to generals], the sovereign head of an empire. In the Roman republic the term imperator referred to the chief military commander and was used only on the battlefield. Hotel in Macau Macau: see Macao. Macau or Macao Chinese Aomen Special administrative region (pop., 2005 est.: 470,000), southern China. which will be a landmark A structure that has significant historical, architectural, or cultural meaning and that has been given legal protection from alteration and destruction. Although landmark preservation laws vary by city and state, they have the same basic purpose: to keep landmarks as close display on the island. In the transportation market we booked orders for the Nevada, Connecticut Connecticut, state, United States Connecticut (kənĕt`ĭkət), southernmost of the New England states of the NE United States. It is bordered by Massachusetts (N), Rhode Island (E), Long Island Sound (S), and New York (W). , Idaho Idaho (ī`dəhō), one of the Rocky Mt. states in the NW United States. It is bordered by Montana and Wyoming (E), Utah and Nevada (S), Oregon and Washington (W), and the Canadian province of British Columbia (N). , New Jersey, and North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. Departments of Transportation and various airport and parking systems throughout the country," said Morgan. "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. were down from the first quarter of this fiscal year led by lower labor costs. Personnel involved in supporting sales efforts spent more time supporting installation, manufacturing and services activities, which are charged to costs of goods sold. Some of these labor costs may be included in selling costs in the next quarter thereby increasing selling costs next quarter. Year over year, operating expenses increased due to higher personnel costs, health insurance, travel and entertainment and our product and distribution expansion efforts," said Bill Retterath, chief financial officer. Retterath continued, "We are increasing our capacity based on our backlog and future expectations. Year to date, the company has invested approximately $2.7 million in facility expansion projects, primarily the addition of new plant capacity in Brookings, which should come on line in the last part of the fiscal year and increase manufacturing space by more than 30%. In addition to the cash flow associated with the facility, we expect to purchase additional manufacturing equipment to supplement capacity. We project capital expenditures for the entire fiscal year will be approximately $20 million, which includes $7 million related to the facility's expansion." Morgan concluded, "Based on our backlog going into the third quarter of fiscal year 2006, and expectations of order bookings, we are estimating a range of $65-$72 million in net sales and earnings per diluted share in the range of $0.15 to $0.25. The third quarter is historically the lowest quarter in terms of net sales due to the seasonality of the sports business and the effects of the holidays. We are also increasing our annual guidance for net sales previously projected to increase by more than 15%, to an increase of more than 20% over fiscal year 2005." Conference Call Information The company will webcast its quarterly conference call today at 10:00 am (Central Time). To listen to the webcast, go to the home page of www.daktronics.com, and click on the icon at the bottom right corner of the screen. Completion of a short registration form, along with Windows(R) Media Player software, are required to hear the webcast. A replay of the teleconference via the internet will also be accessible shortly after the conclusion of the conference call through www.daktronics.com. A replay of the teleconference accessible by telephone will be available for one week starting at noon Central Time on August 17. To access the replay, call toll-free in the U.S. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of 800-633-8284 and enter code 21267625. International callers can dial 402-977-9140 and enter code 21267625 to hear the replay by phone. About Daktronics Daktronics has strong leadership positions in, and is one of the world's largest suppliers of, electronic scoreboards, computer-programmable displays, and large screen video displays and control systems. The company excels in the control of large display systems, including those that require integration of multiple complex displays showing real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. information, graphics, animation animation Process of giving the illusion of movement to drawings, models, or inanimate objects. From the mid-1850s, such optical devices as the zoetrope produced the illusion of animation. Stop-action photography enabled the production of cartoon films. and video. Daktronics designs, manufactures, markets and services display systems for customers around the world, in sport, business and transportation applications. 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 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 331 32nd Ave AVE Avenue AVE Average AVE Alta Velocidad Espanola (train between Madrid and Seville) AVE Alta Velocidad Española (Spanish: High Speed Train) AVE Audio Video Entertainment AVE Advertising Value Equivalent . 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. 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. and Subsidiaries
Consolidated Statements of Income
(in thousands, except earnings per share)
(unaudited)
Three Months Ended Six Months Ended
----------------------- -----------------------
October 29, October 30, October 29, October 30,
2005 2004 2005 2004
----------- ----------- ----------- -----------
Net sales $75,802 $59,472 $148,147 $118,182
Cost of goods sold 53,485 39,478 103,636 78,070
----------- ----------- ----------- -----------
Gross profit 22,317 19,994 44,511 40,112
----------- ----------- ----------- -----------
Operating expenses:
Selling 9,178 7,348 18,988 14,727
General and
administrative 2,683 2,215 5,305 4,833
Product design and
development 2,749 2,862 5,233 5,100
----------- ----------- ----------- -----------
14,610 12,425 29,526 24,660
----------- ----------- ----------- -----------
Operating income 7,707 7,569 14,985 15,452
Nonoperating income
(expense):
Interest income 490 314 867 625
Interest expense (28) (57) (79) (111)
Other income
(expense), net (5) 378 (77) 455
----------- ----------- ----------- -----------
Income before income
taxes 8,164 8,204 15,696 16,421
Income tax expense 2,979 3,016 5,880 6,201
----------- ----------- ----------- -----------
Net income $5,185 $5,188 $9,816 $10,220
=========== =========== =========== ===========
Weighted average number
of fully diluted
shares and common
equivalent shares 20,134 20,179 20,124 20,152
=========== =========== =========== ===========
Earnings per share:
Basic $0.27 $0.27 $0.51 $0.54
=========== =========== =========== ===========
Diluted $0.26 $0.26 $0.49 $0.51
=========== =========== =========== ===========
Daktronics, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands)
October 29, April 30,
2005 2005
(unaudited)
----------- -----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $12,140 $15,961
Marketable securities 7,757 8,105
Accounts receivable, less allowance for
doubtful accounts 33,658 23,762
Current maturities of long-term receivables 6,133 5,196
Inventories 29,811 24,612
Costs and estimated earnings in excess of
billings 21,194 15,301
Prepaid expenses and other 1,886 1,725
Deferred income taxes 5,012 5,076
Income taxes receivable 76 1,812
Rental equipment available for sale -- 2,733
----------- -----------
Total current assets 117,667 104,283
----------- -----------
Advertising rights, net 2,401 1,722
Long-term receivables, less current maturities 9,553 9,900
Goodwill 2,644 2,621
Intangible and other assets 1,232 1,101
Deferred income taxes 433 782
----------- -----------
16,263 16,126
----------- -----------
PROPERTY AND EQUIPMENT:
Land 1,183 1,084
Buildings 18,393 15,386
Machinery and equipment 19,152 17,592
Office furniture and equipment 21,138 19,382
Equipment held for rental 984 835
Demonstration equipment 5,263 5,245
Transportation equipment 4,318 3,810
----------- -----------
70,431 63,334
Less accumulated depreciation 34,969 32,281
----------- -----------
35,462 31,053
----------- -----------
TOTAL ASSETS $169,392 $151,462
=========== ===========
Daktronics, Inc. and Subsidiaries
Consolidated Balance Sheets (continued)
(in thousands)
October 29, April 30,
2005 2005
(Unaudited)
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable, bank $-- $79
Accounts payable 17,779 17,121
Accrued expenses and warranty obligations 12,046 10,973
Current maturities of long-term debt 414 909
Current maturities of long-term marketing
obligations 184 304
Billings in excess of costs and estimated
earnings 12,041 5,463
Customer deposits 6,020 4,164
Deferred maintenance revenue 3,424 2,983
Income taxes payable 223 --
----------- -----------
Total current liabilities 52,131 41,996
----------- -----------
Long-term debt, less current maturities 150 171
Long-term marketing obligations, less current
maturities 701 595
Deferred income 1,885 1,357
Deferred income taxes 2,090 3,433
----------- -----------
4,826 5,556
----------- -----------
TOTAL LIABILITIES 56,957 47,552
SHAREHOLDERS' EQUITY:
Common stock 18,369 17,739
Additional paid-in capital 2,845 2,684
Retained earnings 91,236 83,337
Treasury stock, at cost (9) (9)
Accumulated other comprehensive loss (6) 159
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 112,435 103,910
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $169,392 $151,462
=========== ===========
Daktronics, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended
-----------------------
October 29, October 30,
2005 2004
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $9,816 $10,220
Adjustments to reconcile net income to net
cash provided
by operating activities:
Depreciation 4,203 3,555
Amortization 26 51
(Gain) loss on sale of property and
equipment (14) 14
Provision for doubtful accounts (255) 132
Deferred income taxes, net (930) 72
Change in operating assets and
liabilities (6,591) (6,229)
----------- -----------
Net cash provided by operating
activities 6,255 7,815
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash consideration paid for acquired
business (130) --
Purchase of property and equipment (7,946) (5,962)
Sales (purchases) of marketable securities,
net 348 --
Proceeds from sale of property and equipment 33 21
----------- -----------
Net cash used in investing activities (7,695) (5,941)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividend paid (1,917) --
Principal payments on long-term debt (525) (623)
Net borrowing (payments) on notes payable (84) (155)
Proceeds from exercise of stock options and
warrants 335 277
----------- -----------
Net cash used in financing activities (2,191) (501)
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (190) 204
----------- -----------
(DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (3,821) 1,577
CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD 15,961 16,255
----------- -----------
CASH AND CASH EQUIVALENTS END OF PERIOD $12,140 $17,832
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