South Dakota (State or other jurisdiction of incorporation or organization) | 46-0306862 (I.R.S. Employer Identification No.) | |
201 Daktronics Drive Brookings SD | 57006 | |
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Name of Each Exchange on Which Registered | |
Common Stock, No Par Value | NASDAQ Global Select Market | |
Common Stock Purchase Rights | NASDAQ Global Select Market |
Large accelerated filer | o | Accelerated filer | x |
Non-accelerated filer | o (Do not check if a smaller reporting company.) | Smaller reporting company | o |
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• | Video display systems |
• | Scoring and timing systems |
• | Message displays |
• | ITS dynamic message signs |
• | Audio systems |
• | Digital billboards |
• | Digit and price displays |
• | Automated rigging and hoists |
Markets | Types of Customers |
Live Events | Large colleges and universities, professional sports teams and facilities, national and international sports games and federations, civic arenas and convention centers, live entertainment venues, staging and rental, and motor racing. |
Schools and Theatres | Elementary and secondary schools, small colleges and universities, local recreation centers and theatres. |
Commercial | Retailers and outdoor advertisers, auto dealers, gaming facilities, petroleum retailers, restaurants and quick-serve restaurants, shopping centers, worship venues, and spectaculars. |
Transportation | State and local departments of transportation, airlines, airports and related industries, parking facilities and transit authorities. |
• | Changes in the demand for and mix of products our customers buy |
• | Our ability to add and train our manufacturing staff in advance of demand |
• | The market’s pace of technological change |
• | Variability in our manufacturing productivity |
• | Long lead times for our plant and equipment expenditures, requiring major financial commitments well in advance of actual production requirements. |
• | Difficulty integrating the purchased company, products, businesses or technologies into our own business |
• | Incurring substantial unanticipated integration costs |
• | Difficult, time-consuming and costly to integrate management information and accounting systems of an acquired business into our current systems |
• | Assimilating the acquired businesses may divert management attention and financial resources from our other operations, disrupting our ongoing business |
• | Entering markets in which we have limited prior experience |
• | Loss of key employees, particularly those of the acquired entity |
• | Retaining or developing the acquired businesses’ customers |
• | Adversely affect our existing business relationships with suppliers |
• | Failure to effectively analyze our return on investment |
• | Inability to indemnify assumed liabilities for infringement of intellectual property rights or other claims |
Fiscal Year 2013 | Fiscal Year 2012 | ||||||||||||||||||||||
Sales Price | Cash Dividends Declared | Sales Price | Cash Dividends Declared | ||||||||||||||||||||
High | Low | High | Low | ||||||||||||||||||||
1st Quarter | $ | 8.39 | $ | 6.39 | $ | 0.115 | $ | 11.81 | $ | 8.07 | $ | 0.11 | |||||||||||
2nd Quarter | 9.91 | 7.36 | — | 10.58 | 8.34 | — | |||||||||||||||||
3rd Quarter | 11.73 | 8.03 | 0.615 | 10.16 | 7.68 | 0.51 | |||||||||||||||||
4th Quarter | 12.40 | 9.57 | — | 11.02 | 7.99 | — |
2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||
Statement of Operations Data: | |||||||||||||||||||
Net sales | $ | 518,322 | $ | 489,526 | $ | 441,676 | $ | 393,185 | $ | 580,681 | |||||||||
Gross profit | 133,894 | 113,437 | 111,484 | 94,556 | 155,358 | ||||||||||||||
Gross profit margin | 25.8 | % | 23.2 | % | 25.2 | % | 24.0 | % | 26.8 | % | |||||||||
Operating income (loss) | 30,600 | 10,275 | 19,527 | (6,730 | ) | 42,617 | |||||||||||||
Operating margin | 5.9 | % | 2.1 | % | 4.4 | % | (1.7 | )% | 7.3 | % | |||||||||
Net income (loss) | 22,779 | 8,489 | 14,244 | (6,989 | ) | 26,428 | |||||||||||||
Diluted earnings (loss) per share | 0.53 | 0.20 | 0.34 | (0.17 | ) | 0.64 | |||||||||||||
Weighted average diluted shares outstanding | 42,621 | 42,304 | 42,277 | 40,908 | 41,152 | ||||||||||||||
Balance Sheet Data: | |||||||||||||||||||
Working capital | $ | 125,456 | $ | 119,833 | $ | 128,160 | $ | 118,625 | $ | 104,542 | |||||||||
Total assets | 319,418 | 315,967 | 327,847 | 305,851 | 324,876 | ||||||||||||||
Total long-term liabilities | 16,480 | 15,989 | 15,083 | 14,358 | 10,536 | ||||||||||||||
Total shareholders' equity | 188,246 | 190,805 | 203,102 | 207,053 | 211,911 | ||||||||||||||
Cash dividends per share | 0.73 | 0.62 | 0.60 | 0.10 | 0.09 |
• | The growing interest in our standard display products used in many different retail-type establishments, among other types of applications. The demand in this area is driven by retailers' and other types of commercial establishments' desire to attract the attention of motorists and others into their storefronts. It is also driven by the need to communicate messages to the public. National accounts may replace their displays reaching end of life, which could lead to increased sales. Furthermore, we believe in the future there will be increased demand from national accounts, including retailers, quick serve restaurants and other types of nationwide organizations, which could lead to increasing sales. |
• | Increasing interest in spectaculars, which include very large and sometimes highly customized displays as part of entertainment venues such as casinos, amusement parks and Times Square type locations. |
• | The introduction of architectural lighting products for commercial buildings, which real estate owners use to add accents or effects to an entire side or circumference of a building to communicate messages or to decorate the building. |
• | The continued deployment of digital billboards as billboard companies continue developing new sites for these and start to replace digital billboards which are reaching end of life. This is dependent on there being no adverse changes in the digital billboard regulatory environment, which could restrict future deployments of billboards, as well as maintaining our current market share of the business concentrated in a few large billboard companies. |
• | Facilities spending more on larger display systems |
• | Lower product costs, which are driving an expansion of the marketplace |
• | Our product and service offerings, which remain the most integrated and comprehensive offerings in the industry |
• | The competitive nature of sports teams, which strive to out-perform their competitors with display systems |
• | The desire for high-definition video displays, which typically drives larger displays or higher resolution displays, both of which increase the average transaction size |
• | Increased demand for video systems in high schools as school districts realize the revenue generating potential of these displays versus traditional scoreboards |
• | Increased demand for different types of displays, such as message centers at schools to communicate to students, parents and the broader community |
• | The use of more sophisticated displays in more athletic venues, such as aquatics in schools |
Year Ended | |||||||||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | |||||||||||||||
(in thousands) | Amount | Percent Change | Amount | Percent Change | Amount | ||||||||||||
Net Sales: | |||||||||||||||||
Commercial | $ | 144,596 | (2.7 | )% | $ | 148,585 | 32.1 | % | $ | 112,515 | |||||||
Live Events | 158,562 | (1.5 | ) | 160,933 | (0.4 | ) | 161,572 | ||||||||||
Schools & Theatres | 66,128 | 10.8 | 59,662 | (4.2 | ) | 62,310 | |||||||||||
Transportation | 73,270 | 51.7 | 48,284 | 6.8 | 45,215 | ||||||||||||
International | 75,766 | 5.1 | 72,062 | 20.0 | 60,064 | ||||||||||||
$ | 518,322 | 5.9 | % | $ | 489,526 | 10.8 | % | $ | 441,676 | ||||||||
Orders: | |||||||||||||||||
Commercial | $ | 152,028 | (0.8 | )% | $ | 153,268 | 32.3 | % | $ | 115,820 | |||||||
Live Events | 161,602 | 2.5 | 157,695 | 3.2 | 152,851 | ||||||||||||
Schools & Theatres | 64,796 | 10.7 | 58,534 | (5.6 | ) | 61,995 | |||||||||||
Transportation | 73,426 | 33.4 | 55,060 | 25.5 | 43,878 | ||||||||||||
International | 80,158 | 44.7 | 55,396 | (15.2 | ) | 65,318 | |||||||||||
$ | 532,010 | 10.8 | % | $ | 479,953 | 9.1 | % | $ | 439,862 |
• | A decrease of $3.5 million in sales for large video display projects due to delayed orders for custom video projects. |
• | A decrease of $3.7 million in sales to outdoor advertising companies due to lower demand from our billboard customers. |
• | An increase of $2.2 million in sales of on-premise advertising displays, which was primarily due to an increase in orders for a national account customer replacement program, as previously disclosed, and an improved economy. |
• | An increase of $1.0 million of service related sales. |
• | A $2.4 million decrease in sales to mobile and modular customers due to reduced demand from these customers. |
• | General volatility of this business unit because of the nature of the business in large custom display systems. During fiscal 2013, sales increased for multi-purpose live event arena venues and National Football League stadiums which were offset by a decrease in sales to National Baseball League stadiums and National Hockey League and National Basketball Association arenas. |
• | Schools demonstrating more willingness this year than in fiscal 2012 to move forward with projects including smaller video systems, scoring and timing equipment and message centers. |
• | An increased demand in video projects for high schools. |
• | Sales recorded from a large procurement contract compared to the previous year. |
• | Sales recorded in relation to a $21 million order for video displays at the LAX Bradley International Terminal in Los Angeles. This type of order in the transportation market is unusual and infrequent in nature. |
• | An increase in orders of approximately 49 percent in our billboard business. This growth was the result of the large outdoor advertising companies increasing their rollout of digital billboards beginning in calendar 2011 and our ability to gain back a portion of the business with one large outdoor advertising company. |
• | An increase of approximately 60 percent in orders for large video display systems, primarily spectaculars, which we attribute to improvements in the economy and a growing market. |
• | A 15 percent increase in orders for our standard product displays, which appears to be a reflection of improvement in the economy as well as our expanded product offerings, including our GalaxyPro line of displays. |
• | A decrease in orders and net sales for professional baseball facilities. During fiscal 2011, we booked approximately $22.9 million in orders for professional baseball projects compared to approximately $10.7 million in fiscal 2012. Net sales in professional baseball facilities were $28.8 million and $9.6 million for fiscal 2011 and 2012, respectively. These changes were the result of higher than expected orders in fiscal 2011 that were delayed from fiscal 2010 as a result of economic conditions, which drove 2011 to unusually high levels. |
• | A decrease in orders and net sales for professional football and basketball facilities. During fiscal 2011, we booked approximately $15.4 million in orders for professional football and basketball projects, compared to approximately $7.5 million in fiscal 2012. |
• | An increase in orders for colleges and universities which more than offset the declines mentioned above. This increase was the result of the factors driving growth in the Live Events business unit as described previously. |
Year Ended | ||||||||||||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | ||||||||||||||||||
(in thousands) | Amount | As a Percent of Net Sales | Amount | As a Percent of Net Sales | Amount | As a Percent of Net Sales | ||||||||||||||
Commercial | $ | 38,123 | 26.4 | % | $ | 38,123 | 25.7 | % | $ | 25,544 | 22.7 | % | ||||||||
Live Events | 31,718 | 20.0 | 26,477 | 16.5 | 32,276 | 20.0 | ||||||||||||||
Schools & Theatres | 18,601 | 28.1 | 15,532 | 26.0 | 17,272 | 27.7 | ||||||||||||||
Transportation | 24,552 | 33.5 | 14,445 | 29.9 | 15,647 | 34.6 | ||||||||||||||
International | 20,900 | 27.6 | 18,860 | 26.2 | 20,745 | 34.5 | ||||||||||||||
$ | 133,894 | 25.8 | % | $ | 113,437 | 23.2 | % | $ | 111,484 | 25.2 | % |
• | An increase of approximately 3.4 percentage points because of improved cost and resource management in the manufacturing and services infrastructure and improved sales mix. |
• | A decrease of approximately 0.8 percentage points because of unexpected warranty costs and costs incurred for services not covered under warranty to cover primarily supplier component issues. For fiscal 2013, warranty costs were approximately 3.4 percent of net sales compared to 2.7 percent in fiscal 2012. |
• | A decrease in warranty expenses, which added approximately 2.5 percentage points to gross profit percentage and resulted from the actions previously discussed and some unusually higher costs in fiscal 2011, as explained in prior filings. |
• | A decrease in gross profit percentage on services and maintenance agreements, which caused a decrease of approximately 0.9 percentage points. |
• | A decrease in the gross profit on product sales that decreased gross profit percentage by approximately 0.3 percentage points, primarily due to an increased percentage of net sales in the billboard niche, which typically has lower gross profit percentages. |
• | An increase in our services overhead, which decreased gross profit percentage by approximately 0.8 percentage points. |
• | Increased cost absorption in manufacturing due to the increased level of net sales, which improved gross profit percentages by approximately 1.5 percentage points. |
• | A decrease in gross profit percentage on product sales, which reduced gross profit percentage by approximately 1.1 percentage points. |
• | Increases in our services overhead, which decreased gross profit percentage by approximately 2.2 percentage points. |
• | Lower plant utilization due to the overall lower sales volumes, which decreased gross profit percentage by approximately 1.2 percentage points. |
• | A decrease in warranty expenses, which added approximately 0.7 percentage points to the gross profit percentage and resulted from the actions previously discussed and some unusually higher costs in fiscal 2011, as explained in prior filings. |
• | A decrease in gross profit percentage in product sales, which decreased the overall gross profit percentage by approximately 1.3 percentage points. |
• | A decrease in warranty expenses, which added approximately 2.1 percentage points to the gross profit percentage. |
• | An increase in our services overhead, which reduced the gross profit percentage by approximately 1.8 percentage points. |
• | Lower plant utilization due to the overall lower sales volumes, which decreased gross profit percentage by approximately 0.8 percentage points. |
• | A decrease in the gross profit percentage on product sales, which decreased the overall gross profit percentage by approximately 0.6 percentage points. |
• | Increase in conversion costs as a percent of sales and increased inventory losses, which decreased the gross profit percentage by approximately 2.6 percentage points. |
• | An increase in our services overhead, which reduced the gross profit percentage by approximately 1.3 percentage points. |
• | A decrease in the gross margin on product sales, which decreased the overall gross profit by approximately 6.0 percentage points. This decrease is the result of a number of factors, including added costs to conform products to local regulatory requirements and a lower margin on contracts booked due to the factors described below. |
• | An increase in warranty costs, which added approximately 0.3 percentage points. |
• | An increase in manufacturing costs, primarily in China as we increased the capabilities there. |
Year Ended | ||||||||||||||||||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | ||||||||||||||||||||||||
(in thousands) | Amount | As a Percent of Net Sales | Percent Change | Amount | As a Percent of Net Sales | Percent Change | Amount | As a Percent of Net Sales | ||||||||||||||||||
Commercial | $ | 13,882 | 9.6 | % | (1.6 | )% | $ | 14,112 | 9.5 | % | 11.8 | % | $ | 12,619 | 11.2 | % | ||||||||||
Live Events | 12,647 | 8.0 | (1.9 | ) | 12,898 | 8.0 | (3.7 | ) | 13,387 | 8.3 | ||||||||||||||||
Schools & Theatres | 10,451 | 15.8 | (3.4 | ) | 10,816 | 18.1 | 7.9 | 10,025 | 16.1 | |||||||||||||||||
Transportation | 3,222 | 4.4 | (6.2 | ) | 3,436 | 7.1 | (1.8 | ) | 3,498 | 7.7 | ||||||||||||||||
International | 12,557 | 16.6 | 14.5 | 10,971 | 15.2 | 9.4 | 10,026 | 16.7 | ||||||||||||||||||
$ | 52,759 | 10.2 | % | 1.0 | % | $ | 52,233 | 10.7 | % | 5.4 | % | $ | 49,555 | 11.2 | % |
• | A $1.0 million increase in personnel costs, including taxes and benefits. |
• | A $0.8 million increase in bad debt expense for potentially uncollectable accounts receivable primarily from sales derived from our International business unit. |
• | An increase of $0.6 million in third-party commissions used in various locations around the world to expand market opportunities. |
• | A reduction of $1.8 million in travel and entertainment, convention expenses and various decreases in vehicle expense, depreciation, and other expenses due to our on-going cost containment initiatives. |
• | An increase of $1.2 million in bad debt expense for potentially uncollectable accounts receivable due to the continued softness of the worldwide economy. |
• | A $0.7 million increase in third-party commissions on significant contracts. Third-party sales agents are contracted from time-to-time to penetrate geographic locations where we have limited presence. |
• | A net decrease of $0.2 million in various other selling expenses. |
• | A reduction of $0.4 million in depreciation, which reflects the lower level of capital expenditures associated primarily with display equipment used for sales promotion. |
• | A decrease of approximately $0.5 million in the allocation of shared sales administration costs which are allocated between our Live Events business unit and our Schools and Theatres business unit. |
• | An increase in payroll, including taxes and benefits, of approximately $0.4 million, as we increased our staffing to address contract opportunities. |
• | An increase in bad debt expense of approximately $0.3 million. |
• | An increase of approximately $0.6 million in the allocation of shared sales administration costs allocated between our Live Events business unit and our Schools and Theatres business unit. |
Year Ended | ||||||||||||||||||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | ||||||||||||||||||||||||
(in thousands) | Amount | As a Percent of Net Sales | Percent Change | Amount | As a Percent of Net Sales | Percent Change | Amount | As a Percent of Net Sales | ||||||||||||||||||
General and administrative | $ | 27,404 | 5.3 | % | (0.1 | )% | $ | 27,422 | 5.6 | % | 16.9 | % | $ | 23,453 | 5.3 | % | ||||||||||
Product design and development | $ | 23,131 | 4.5 | % | (1.6 | )% | $ | 23,507 | 4.8 | % | 24.1 | % | $ | 18,949 | 4.3 | % |
• | An increase in personnel costs, including taxes and benefits, of $0.5 million. |
• | A decrease in material costs related to product development of $1.0 million as a result of the timing of projects for prototyping new products and the stage of product development. |
• | An increase of $0.1 million in various other expenses. |
• | An increase in professional fees of $1.7 million as a result of higher litigation costs and international expansion initiatives, some of which were one-time costs, and higher costs of information systems consulting fees, as we outsourced more projects to speed up development where we believed we could achieve a faster payback in efficiencies. |
• | Increases in personnel costs, including taxes and benefits, of approximately $1.4 million due to an increase in employee count primarily related to personnel to support hiring in other areas and in accounting to support international development, primarily in China. |
• | Increases in various other expenses of approximately $0.9 million. |
• | An increase in personnel costs, including taxes and benefits, of approximately $2.2 million, as we increased our staff to support the continued roll out of our display and control system platforms. |
• | An increase in material costs related to product development of $1.5 million as a result of increasing importance placed on prototyping new products and the increase in new product introductions. |
• | An increase of approximately $0.9 million in various other expenses. |
Year Ended | ||||||||||||||||||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | ||||||||||||||||||||||||
(in thousands) | Amount | As a Percent of Net Sales | Percent Change | Amount | As a Percent of Net Sales | Percent Change | Amount | As a Percent of Net Sales | ||||||||||||||||||
Interest income, net | $ | 1,168 | 0.2 | % | (17.3 | )% | $ | 1,412 | 0.3 | % | (18.7 | )% | $ | 1,737 | 0.4 | % | ||||||||||
Other (expense) income, net | $ | (839 | ) | (0.2 | )% | 662.7 | % | $ | (110 | ) | — | % | (112.5 | )% | $ | 877 | 0.2 | % |
• | The reinstatement of the federal research and development tax credit which decreased the effective rate by approximately 5.8 percent as compared to 8.7 percent in fiscal year 2012. However, fiscal 2012 was limited as the credit only pertained to a portion of the year, but that amount made a greater impact on the effective rate since income before taxes were lower than in fiscal 2013. |
• | An increase in the annual estimated effective tax rate of approximately 2.5 percentage points compared to 10.5 percentage points in fiscal 2012 as a result of the impact of non- deductible meals and entertainment costs and stock compensation expense on a higher projected income compared to similar level expenses on a lower projected income in fiscal 2012. |
• | A decrease in the effective tax rate of approximately 1.1 percentage points due to an international tax change which did not occur in fiscal 2012. |
• | An increase in the effective tax rate related to a reversal of valuation allowances in fiscal 2012, as it related to some foreign jurisdictions which did not occur in fiscal 2013. |
• | Various other items which have a greater impact on the effective rate due to lower income before taxes but are not material to the results. |
• | A decrease in the effective tax rate of approximately five percentage points as a result of the deductibility of dividends paid into our 401(k) plan in fiscal 2012 which were not deductible in fiscal 2011 due to a change in plan design. |
• | An increase in the effective tax rate of approximately three percentage points as a result of the lower level of deduction for domestic production activities which result from the lower level of income before taxes. |
• | A decrease in the effective rate of approximately three percentage points as a result of the impact of the research and development tax credit compared to income before taxes. |
• | An increase in the liability for foreign income taxable in the United States under subpart F of the Internal Revenue Code of 1986, which increased the effective tax rate by 2.6 percentage points. |
• | A decrease in the effective tax rate of approximately two percentage points as a result of the impact on the deferred tax expense in a foreign jurisdiction as a result of the expiration of the termination of a tax holiday. |
• | Various other items which have a greater impact on the effective rate due to lower income before taxes but are not material to the results. |
• | Unexpected warranty charges during the fourth quarter of fiscal 2013, accounting for an approximately three percentage points decline. |
• | Several large projects generating revenue having lower than typical margins due to the competitive pricing on projects, primarily in the Live Events business unit. |
• | Improved gross margins in our Schools & Theatres business unit because of sales mix and a decline in warranty charges. |
• | Improvements in the overall cost and resource management in manufacturing infrastructure. |
• | A decrease of approximately $0.4 million in third-party commissions primarily in the International business unit. We use third parties in various locations around the world to expand market opportunities, and these types of expense occur only if the third party is successful in procuring sales. |
• | A reduction of approximately $0.4 million in payroll costs, including taxes and benefits, and travel and entertainment expenses as explained previously. |
• | An increase in bad debt expense of $0.5 million in the International business unit as explained previously. |
• | Net decreases in various other expenses. |
• | An increase of approximately $0.2 million in payroll costs, including taxes and benefits as explained previously. |
• | An increase of approximately $0.1 million in professional fees to support international acquisition and international information technology projects. |
• | Reduced overall engineering costs of approximately $0.2 million, which are partially applied to product development. |
• | Reduced usage of material to produce prototypes or test materials of $0.2 million. |
• | The non-recurrence of capital asset impairments relating to design. During the fourth quarter of fiscal 2012, various impairments of capital assets of approximately $0.3 million were recorded related to the redesign of our outdoor surface mount product platform video display modules. |
Year Ended | ||||||||||
April 27, 2013 | April 28, 2012 | Percent Change | ||||||||
(in thousands) | ||||||||||
Net cash provided by (used in): | ||||||||||
Operating activities | $ | 50,749 | $ | 20,038 | 153.3 | % | ||||
Investing activities | (8,531 | ) | (18,753 | ) | (54.5 | ) | ||||
Financing activities | (31,002 | ) | (26,284 | ) | 18.0 | |||||
Effect of exchange rate changes on cash | (11 | ) | 114 | (109.6 | ) | |||||
Net increase (decrease) in cash and cash equivalents | $ | 11,205 | $ | (24,885 | ) | 145.0 | % |
• | A decrease in cash resulting from an increase in costs and earnings in excess of billings of $16.3 million. Variability in costs and earnings in excess of billings relates to the timing of billings on construction-type contracts and revenue recognition, which can vary significantly depending on contractual payment terms and build and installation schedules. As of April 27, 2013, $11.7 million of the increase related to four different transportation projects; timing difference mainly relates to timing of shipment and billings per progress payment schedule. The majority of these unbilled amounts is expected to be billed during the first quarter of fiscal 2014. |
• | An increase of accounts payable and accrued liabilities of $7.7 million was the result of a $1.2 million increase in payables related to a change in extended payments terms with one large supplier, a $3.0 million increase in payables and accruals related to four large projects in process at year end, and a $1.7 million increase in accrued items related to various marketing agreements on large projects and increases in various payroll related accruals. |
• | A net increase in cash of $7.0 million from an increase in income tax payables and a reduction of income tax receivables due to a significant improvement in net income in fiscal 2013 compared to fiscal 2012. |
• | A decline in inventories, which increased cash from operations by $6.7 million. Days inventory outstanding decreased from 53 days as of April 28, 2012 to 46 days as of April 27, 2013. Changes in inventory are primarily the result of using inventory in production specified for a significant transportation project and inventory management initiatives. |
• | A reduction of $5.7 million in accounts receivable and long-term receivables primarily due to the collection of two significant progress payments totaling $4.2 million that were outstanding at the end of fiscal 2012 and the annual collection of long-term receivables. |
• | A net change in various other operating assets and liabilities, which increased cash from operations by $2.4 million. |
• | An increase in the net cash invested in marketable securities, net of maturities. Our investment approach has remained consistent year over year as we try to maintain a consistent level of marketable securities and, therefore, the change was the result of the timing of investment decisions and investments of excess cash in marketable securities. |
• | A decrease in purchases of property and equipment of $6.9 million. The decrease relates primarily to the timing of projects anticipated, but not completed during fiscal 2013 for the expansion of our surface mount production line. We anticipate capital expenditures to be approximately $16 million in fiscal 2014. |
• | A minimum fixed charge coverage ratio of at least 2 to 1 at the end of any fiscal year. The ratio is equal to (a) EBITDA less dividends, a capital expenditure reserve of $6 million, and income tax expense, over (b) all principal and interest payments with respect to debt, excluding debt outstanding on the line of credit; and |
• | A ratio of interest-bearing debt, excluding any marketing obligations, to EBITDA of less than 1 to 1 at the end of any fiscal quarter. |
Contractual Obligations | Total | Less than 1 year | 1-3 Years | 4-5 Years | After 5 Years | |||||||||||||||
Cash commitments: | ||||||||||||||||||||
Long-term marketing obligations and accrued interest | $ | 738 | $ | 393 | $ | 338 | $ | 7 | $ | — | ||||||||||
Operating leases | 7,914 | 2,797 | 3,929 | 1,159 | 29 | |||||||||||||||
Unconditional purchase obligations | 1,242 | 981 | 261 | — | — | |||||||||||||||
Conditional purchase obligations | 1,000 | 200 | 400 | 400 | — | |||||||||||||||
Unrecognized tax benefits(1) | 379 | — | — | — | — | |||||||||||||||
Total | $ | 11,273 | $ | 4,371 | $ | 4,928 | $ | 1,566 | $ | 29 | ||||||||||
Other commercial commitments: | ||||||||||||||||||||
Standby letters of credit | $ | 6,169 | $ | 5,579 | $ | 149 | $ | 441 | $ | — | ||||||||||
Surety Bonds | $ | 13,287 | $ | 5,996 | $ | 7,291 | $ | — | $ | — | ||||||||||
Guarantees | $ | 1,285 | $ | — | $ | 1,285 | $ | — | $ | — |
(1) | Unrecognized tax benefits relate to uncertain tax positions. As we are not able to reasonably estimate the timing of the payments or the amount by which the liability will increase or decrease over time, the related balances have not been reflected in any of the columns other than the total column. |
Fiscal Years (in thousands) | |||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | ||||||||||||||||||
Assets: | |||||||||||||||||||||||
Long-term receivables, including current maturities: | |||||||||||||||||||||||
Fixed-rate | $ | 4,806 | $ | 3,932 | $ | 2,952 | $ | 1,865 | $ | 1,214 | $ | 1,363 | |||||||||||
Average interest rate | 8.1 | % | 8.1 | % | 7.8 | % | 8.2 | % | 8.3 | % | 8.5 | % | |||||||||||
Liabilities: | |||||||||||||||||||||||
Long-term marketing obligations, including current portion: | |||||||||||||||||||||||
Fixed-rate | $ | 393 | $ | 226 | $ | 112 | $ | 4 | $ | 3 | $ | — | |||||||||||
Average interest rate | 8.7 | % | 8.9 | % | 8.8 | % | 6.2 | % | 6.3 | % | — | % |
DAKTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) | ||||||||
April 27, 2013 | April 28, 2012 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 40,628 | $ | 29,423 | ||||
Restricted cash | 48 | 1,169 | ||||||
Marketable securities | 24,052 | 25,258 | ||||||
Accounts receivable, net | 63,227 | 66,923 | ||||||
Inventories, net | 49,045 | 54,924 | ||||||
Costs and estimated earnings in excess of billings | 39,355 | 23,020 | ||||||
Current maturities of long-term receivables | 4,807 | 5,830 | ||||||
Prepaid expenses and other assets | 6,185 | 5,528 | ||||||
Deferred income taxes | 12,755 | 10,941 | ||||||
Income tax receivables | 46 | 5,990 | ||||||
Total current assets | 240,148 | 229,006 | ||||||
Property and equipment, net | 61,625 | 68,396 | ||||||
Long-term receivables, less current maturities | 11,325 | 12,622 | ||||||
Goodwill | 3,306 | 3,347 | ||||||
Intangibles, net | 1,181 | 1,409 | ||||||
Advertising rights, net and other assets | 772 | 1,157 | ||||||
Deferred income taxes | 1,061 | 30 | ||||||
TOTAL ASSETS | $ | 319,418 | $ | 315,967 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Notes payable, bank | $ | — | $ | 1,459 | ||||
Accounts payable | 38,651 | 33,906 | ||||||
Accrued expenses | 24,331 | 22,731 | ||||||
Warranty obligations | 13,933 | 13,049 | ||||||
Billings in excess of costs and estimated earnings | 14,245 | 14,385 | ||||||
Customer deposits (billed or collected) | 12,375 | 12,826 | ||||||
Deferred revenue (billed or collected) | 9,112 | 9,751 | ||||||
Current portion of other long-term obligations | 356 | 359 | ||||||
Income taxes payable | 1,689 | 665 | ||||||
Deferred income taxes | — | 42 | ||||||
Total current liabilities | 114,692 | 109,173 | ||||||
Long-term warranty obligations | 11,213 | 9,166 | ||||||
Long-term deferred revenue (billed or collected) | 4,424 | 4,361 | ||||||
Other long-term obligations, less current maturities | 843 | 1,009 | ||||||
Deferred income taxes | — | 1,453 | ||||||
Total long-term liabilities | 16,480 | 15,989 | ||||||
SHAREHOLDERS' EQUITY: | ||||||||
Common stock, no par value, authorized 120,000,000 shares; 42,393,456 and 41,930,116 shares issued at April 27, 2013 and April 28, 2012, respectively | 37,429 | 34,631 | ||||||
Additional paid-in capital | 27,194 | 24,320 | ||||||
Retained earnings | 123,750 | 131,830 | ||||||
Treasury stock, at cost, 19,680 shares | (9 | ) | (9 | ) | ||||
Accumulated other comprehensive (loss) income | (118 | ) | 33 | |||||
TOTAL SHAREHOLDERS' EQUITY | 188,246 | 190,805 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 319,418 | $ | 315,967 | ||||
See notes to consolidated financial statements. |
DAKTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) | |||||||||||
Year Ended | |||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | |||||||||
Net sales | $ | 518,322 | $ | 489,526 | $ | 441,676 | |||||
Cost of goods sold | 384,428 | 376,089 | 330,192 | ||||||||
Gross profit | 133,894 | 113,437 | 111,484 | ||||||||
Operating expenses: | |||||||||||
Selling expense | 52,759 | 52,233 | 49,555 | ||||||||
General and administrative | 27,404 | 27,422 | 23,453 | ||||||||
Product design and development | 23,131 | 23,507 | 18,949 | ||||||||
103,294 | 103,162 | 91,957 | |||||||||
Operating income | 30,600 | 10,275 | 19,527 | ||||||||
Nonoperating income (expense): | |||||||||||
Interest income | 1,523 | 1,747 | 1,921 | ||||||||
Interest expense | (355 | ) | (335 | ) | (184 | ) | |||||
Other (expense) income, net | (839 | ) | (110 | ) | 877 | ||||||
Income before income taxes | 30,929 | 11,577 | 22,141 | ||||||||
Income tax expense | 8,150 | 3,088 | 7,897 | ||||||||
Net income | $ | 22,779 | $ | 8,489 | $ | 14,244 | |||||
Weighted average shares outstanding: | |||||||||||
Basic | 42,280 | 41,869 | 41,422 | ||||||||
Diluted | 42,621 | 42,304 | 42,277 | ||||||||
Earnings per share: | |||||||||||
Basic | $ | 0.54 | $ | 0.20 | $ | 0.34 | |||||
Diluted | $ | 0.53 | $ | 0.20 | $ | 0.34 | |||||
Cash dividend declared per share | $ | 0.73 | $ | 0.62 | $ | 0.60 | |||||
See notes to consolidated financial statements. |
DAKTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) | ||||||||||||
Year Ended | ||||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | ||||||||||
Net income | $ | 22,779 | $ | 8,489 | $ | 14,244 | ||||||
Other comprehensive (loss) income: | ||||||||||||
Cumulative translation adjustments | (102 | ) | (20 | ) | 426 | |||||||
Unrealized (loss) gain on available-for-sale securities, net of tax | (49 | ) | 52 | 22 | ||||||||
Total other comprehensive (loss) income, net of tax | (151 | ) | 32 | 448 | ||||||||
Comprehensive income | $ | 22,628 | $ | 8,521 | $ | 14,692 | ||||||
See notes to consolidated financial statements. |
DAKTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (in thousands) | |||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||
Balance as of May 1, 2010: | $ | 29,936 | $ | 17,731 | $ | 159,842 | $ | (9 | ) | $ | (447 | ) | $ | 207,053 | |||||||||
Net income | — | — | 14,244 | — | — | 14,244 | |||||||||||||||||
Other comprehensive income | — | — | — | — | 448 | 448 | |||||||||||||||||
Net tax benefit (deduction) related to share-based compensation | — | 121 | — | — | — | 121 | |||||||||||||||||
Share-based compensation | — | 3,370 | — | — | — | 3,370 | |||||||||||||||||
Exercise of stock options | 1,352 | (73 | ) | — | — | — | 1,279 | ||||||||||||||||
Employee savings plan activity | 1,382 | — | — | — | — | 1,382 | |||||||||||||||||
Dividends paid | — | — | (24,795 | ) | — | — | (24,795 | ) | |||||||||||||||
Balance as of April 30, 2011: | 32,670 | 21,149 | 149,291 | (9 | ) | 1 | 203,102 | ||||||||||||||||
Net income | — | — | 8,489 | — | — | 8,489 | |||||||||||||||||
Other comprehensive income | — | — | — | — | 32 | 32 | |||||||||||||||||
Net tax benefit (deduction) related to share-based compensation | — | (2 | ) | — | — | — | (2 | ) | |||||||||||||||
Share-based compensation | — | 3,262 | — | — | — | 3,262 | |||||||||||||||||
Exercise of stock options | 547 | (89 | ) | — | — | — | 458 | ||||||||||||||||
Employee savings plan activity | 1,414 | — | — | — | — | 1,414 | |||||||||||||||||
Dividends paid | — | — | (25,950 | ) | — | — | (25,950 | ) | |||||||||||||||
Balance as of April 28, 2012: | 34,631 | 24,320 | 131,830 | (9 | ) | 33 | 190,805 | ||||||||||||||||
Net income | — | — | 22,779 | — | — | 22,779 | |||||||||||||||||
Other comprehensive loss | — | — | — | — | (151 | ) | (151 | ) | |||||||||||||||
Net tax benefit (deduction) related to share-based compensation | — | — | — | — | — | — | |||||||||||||||||
Share-based compensation | — | 3,037 | — | — | — | 3,037 | |||||||||||||||||
Exercise of stock options | 1,316 | (163 | ) | — | — | — | 1,153 | ||||||||||||||||
Employee savings plan activity | 1,482 | — | — | — | — | 1,482 | |||||||||||||||||
Dividends paid | — | — | (30,859 | ) | — | — | (30,859 | ) | |||||||||||||||
Balance as of April 27, 2013: | $ | 37,429 | $ | 27,194 | $ | 123,750 | $ | (9 | ) | $ | (118 | ) | $ | 188,246 | |||||||||
See notes to consolidated financial statements |
DAKTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) | |||||||||||
Year Ended | |||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ | 22,779 | $ | 8,489 | $ | 14,244 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | 15,379 | 17,273 | 19,354 | ||||||||
Amortization | 228 | 245 | 287 | ||||||||
Amortization of premium/discount on marketable securities | 190 | 183 | 48 | ||||||||
Loss (gain) on sale of property and equipment | 42 | (16 | ) | (62 | ) | ||||||
Share-based compensation | 3,037 | 3,262 | 3,370 | ||||||||
Excess tax benefits from share-based compensation | — | (48 | ) | (121 | ) | ||||||
Equity in losses of affiliates | — | — | 36 | ||||||||
Provision for doubtful accounts | 331 | (150 | ) | (37 | ) | ||||||
Deferred income taxes, net | (4,340 | ) | (68 | ) | 852 | ||||||
Change in operating assets and liabilities | 13,103 | (9,132 | ) | 3,375 | |||||||
Net cash provided by operating activities | 50,749 | 20,038 | 41,346 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Purchases of property and equipment | (9,674 | ) | (16,524 | ) | (9,386 | ) | |||||
Proceeds from sales of property and equipment | 198 | 231 | 238 | ||||||||
Purchases of marketable securities | (16,506 | ) | (18,870 | ) | (23,035 | ) | |||||
Proceeds from sales or maturities of marketable securities | 17,451 | 16,410 | — | ||||||||
Insurance recoveries on property and equipment | — | — | 187 | ||||||||
Other investing activities, net | — | — | 2,110 | ||||||||
Net cash used in investing activities | (8,531 | ) | (18,753 | ) | (29,886 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Borrowings on notes payable | — | 782 | 2,316 | ||||||||
Payments on notes payable | (1,459 | ) | (1,711 | ) | — | ||||||
Proceeds from exercise of stock options | 1,316 | 547 | 1,352 | ||||||||
Excess tax benefits from share-based compensation | — | 48 | 121 | ||||||||
Principal payments on long-term obligations | — | — | (26 | ) | |||||||
Dividends paid | (30,859 | ) | (25,950 | ) | (24,795 | ) | |||||
Net cash used in financing activities | (31,002 | ) | (26,284 | ) | (21,032 | ) | |||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (11 | ) | 114 | 277 | |||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 11,205 | (24,885 | ) | (9,295 | ) | ||||||
CASH AND CASH EQUIVALENTS: | |||||||||||
Beginning of period | 29,423 | 54,308 | 63,603 | ||||||||
End of period | $ | 40,628 | $ | 29,423 | $ | 54,308 | |||||
See notes to consolidated financial statements. |
Years | |
Buildings | 7 - 40 |
Machinery and equipment | 5 - 7 |
Office furniture and equipment | 3 - 5 |
Computer software and hardware | 3 - 5 |
Equipment held for rental | 2 - 7 |
Demonstration equipment | 3 - 5 |
Transportation equipment | 5 - 7 |
Net income | Shares | Per share income (loss) | ||||||||
For the year ended April 27, 2013: | ||||||||||
Basic earnings per share | $ | 22,779 | 42,280 | $ | 0.54 | |||||
Dilution associated with stock compensation plans | — | 341 | (0.01 | ) | ||||||
Diluted earnings per share | $ | 22,779 | 42,621 | $ | 0.53 | |||||
For the year ended April 28, 2012: | ||||||||||
Basic earnings per share | $ | 8,489 | 41,869 | $ | 0.20 | |||||
Dilution associated with stock compensation plans | — | 435 | — | |||||||
Diluted earnings per share | $ | 8,489 | 42,304 | $ | 0.20 | |||||
For the year ended April 30, 2011: | ||||||||||
Basic earnings per share | $ | 14,244 | 41,422 | $ | 0.34 | |||||
Dilution associated with stock compensation plans | — | 855 | — | |||||||
Diluted earnings per share | $ | 14,244 | 42,277 | $ | 0.34 |
Year Ended | |||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | |||||||||
Net sales: | |||||||||||
Commercial | $ | 144,596 | $ | 148,585 | $ | 112,515 | |||||
Live Events | 158,562 | 160,933 | 161,572 | ||||||||
Schools & Theatres | 66,128 | 59,662 | 62,310 | ||||||||
Transportation | 73,270 | 48,284 | 45,215 | ||||||||
International | 75,766 | 72,062 | 60,064 | ||||||||
518,322 | 489,526 | 441,676 | |||||||||
Contribution margin: | |||||||||||
Commercial | 24,241 | 24,011 | 12,925 | ||||||||
Live Events | 19,071 | 13,579 | 18,889 | ||||||||
Schools & Theatres | 8,150 | 4,716 | 7,247 | ||||||||
Transportation | 21,330 | 11,009 | 12,149 | ||||||||
International | 8,343 | 7,889 | 10,719 | ||||||||
81,135 | 61,204 | 61,929 | |||||||||
Non-allocated operating expenses: | |||||||||||
General and administrative | 27,404 | 27,422 | 23,453 | ||||||||
Product design and development | 23,131 | 23,507 | 18,949 | ||||||||
Operating income | 30,600 | 10,275 | 19,527 | ||||||||
Nonoperating income (expense): | |||||||||||
Interest income | 1,523 | 1,747 | 1,921 | ||||||||
Interest expense | (355 | ) | (335 | ) | (184 | ) | |||||
Other (expense) income, net | (839 | ) | (110 | ) | 877 | ||||||
Income before income taxes | 30,929 | 11,577 | 22,141 | ||||||||
Income tax expense | 8,150 | 3,088 | 7,897 | ||||||||
Net income | $ | 22,779 | $ | 8,489 | $ | 14,244 | |||||
Depreciation and amortization: | |||||||||||
Commercial | $ | 4,940 | $ | 6,103 | $ | 6,790 | |||||
Live Events | 4,473 | 5,055 | 6,224 | ||||||||
Schools & Theatres | 2,233 | 2,361 | 2,621 | ||||||||
Transportation | 1,375 | 1,386 | 1,524 | ||||||||
International | 717 | 650 | 692 | ||||||||
Unallocated corporate depreciation | 1,869 | 1,963 | 1,790 | ||||||||
$ | 15,607 | $ | 17,518 | $ | 19,641 |
Year Ended | |||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | |||||||||
Net sales: | |||||||||||
United States | $ | 430,242 | $ | 405,479 | $ | 368,979 | |||||
Outside U.S. | 88,080 | 84,047 | 72,697 | ||||||||
$ | 518,322 | $ | 489,526 | $ | 441,676 | ||||||
Long-lived assets: | |||||||||||
United States | $ | 60,060 | $ | 66,350 | $ | 68,034 | |||||
Outside U.S. | 1,565 | 2,046 | 1,832 | ||||||||
$ | 61,625 | $ | 68,396 | $ | 69,866 |
Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||
Balance as of April 27, 2013: | |||||||||||||||
Certificates of deposit | $ | 4,677 | $ | — | $ | — | $ | 4,677 | |||||||
U.S. Government securities | 4,999 | 19 | — | 5,018 | |||||||||||
U.S. Government sponsored entities | 4,752 | — | — | 4,752 | |||||||||||
Municipal obligations | 9,596 | 9 | — | 9,605 | |||||||||||
$ | 24,024 | $ | 28 | $ | — | $ | 24,052 | ||||||||
Balance as of April 28, 2012: | |||||||||||||||
Certificates of deposit | $ | 7,657 | $ | — | $ | — | $ | 7,657 | |||||||
U.S. Government securities | 7,507 | 49 | — | 7,556 | |||||||||||
U.S. Government sponsored entities | 4,503 | 2 | — | 4,505 | |||||||||||
Municipal obligations | 5,517 | 23 | — | 5,540 | |||||||||||
$ | 25,184 | $ | 74 | $ | — | $ | 25,258 |
Less than 12 months | Greater than 12 months | Total | |||||||||
Certificates of deposit | $ | 1,473 | $ | 3,204 | $ | 4,677 | |||||
U.S. Government securities | 3,017 | 2,001 | 5,018 | ||||||||
U.S. Government sponsored entities | — | 4,752 | 4,752 | ||||||||
Municipal obligations | 3,863 | 5,742 | 9,605 | ||||||||
$ | 8,353 | $ | 15,699 | $ | 24,052 |
Live Events | Commercial | Transportation | Total | ||||||||||||
Balance as of April 28, 2012: | $ | 2,435 | $ | 741 | $ | 171 | $ | 3,347 | |||||||
Foreign currency translation | (18 | ) | (16 | ) | (7 | ) | (41 | ) | |||||||
Balance as of April 27, 2013: | $ | 2,417 | $ | 725 | $ | 164 | $ | 3,306 |
April 27, 2013 | April 28, 2012 | |||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Value | Gross Carrying Amount | Accumulated Amortization | Net Value | |||||||||||||||||||
Definite-lived: | ||||||||||||||||||||||||
Patents | $ | 2,282 | $ | 1,502 | $ | 780 | $ | 2,282 | $ | 1,274 | $ | 1,008 | ||||||||||||
Indefinite-lived: | ||||||||||||||||||||||||
Registered trademarks | 401 | — | 401 | 401 | — | 401 | ||||||||||||||||||
$ | 2,683 | $ | 1,502 | $ | 1,181 | $ | 2,683 | $ | 1,274 | $ | 1,409 |
April 27, 2013 | April 28, 2012 | ||||||
Raw materials | $ | 20,979 | $ | 24,880 | |||
Work-in-process | 8,523 | 10,581 | |||||
Finished goods | 19,543 | 19,463 | |||||
$ | 49,045 | $ | 54,924 |
April 27, 2013 | April 28, 2012 | ||||||
Land | $ | 1,497 | $ | 1,497 | |||
Buildings | 57,012 | 56,431 | |||||
Machinery and equipment | 65,600 | 61,654 | |||||
Office furniture and equipment | 16,118 | 15,648 | |||||
Computer software and hardware | 41,745 | 42,172 | |||||
Equipment held for rental | 868 | 1,003 | |||||
Demonstration equipment | 8,400 | 9,806 | |||||
Transportation equipment | 4,026 | 4,116 | |||||
195,266 | 192,327 | ||||||
Less accumulated depreciation | 133,641 | 123,931 | |||||
$ | 61,625 | $ | 68,396 |
April 27, 2013 | April 28, 2012 | ||||||
Compensation | $ | 12,940 | $ | 11,475 | |||
Taxes, other than income taxes | 2,534 | 3,987 | |||||
Other | 8,857 | 7,269 | |||||
$ | 24,331 | $ | 22,731 |
Year Ended | |||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | |||||||||
Foreign currency transaction (losses) gains | $ | (319 | ) | $ | (206 | ) | $ | 463 | |||
Equity in losses of affiliates | — | — | (36 | ) | |||||||
Other | (520 | ) | 96 | 450 | |||||||
$ | (839 | ) | $ | (110 | ) | $ | 877 |
April 27, 2013 | April 28, 2012 | ||||||
Costs incurred | $ | 393,287 | $ | 304,058 | |||
Estimated earnings | 146,378 | 114,687 | |||||
539,665 | 418,745 | ||||||
Less billings to date | 514,555 | 410,110 | |||||
$ | 25,110 | $ | 8,635 |
April 27, 2013 | April 28, 2012 | ||||||
Costs and estimated earnings in excess of billings | $ | 39,355 | $ | 23,020 | |||
Billings in excess of costs and estimated earnings | (14,245 | ) | (14,385 | ) | |||
$ | 25,110 | $ | 8,635 |
• | A minimum fixed charge coverage ratio of at least 2 to 1 at the end of any fiscal year. The ratio is equal to (a) EBITDA less dividends, a capital expenditure reserve of $6 million, and income tax expense, over (b) all principal and interest payments with respect to debt, excluding debt outstanding on the line of credit; and |
• | A ratio of interest-bearing debt, excluding any marketing obligations, to EBITDA of less than 1 to 1 at the end of any fiscal quarter. |
Year Ended | ||||||||||||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | ||||||||||||||||||
Number of Nonvested Shares | Weighted Average Grant Date Fair Value Per Share | Number of Nonvested Shares | Weighted Average Grant Date Fair Value Per Share | Number of Nonvested Shares | Weighted Average Grant Date Fair Value Per Share | |||||||||||||||
Outstanding at beginning of year | 242 | $ | 9.81 | 181 | $ | 11.07 | 121 | $ | 8.21 | |||||||||||
Granted | 119 | 8.50 | 118 | 8.24 | 103 | 13.29 | ||||||||||||||
Vested | (69 | ) | 12.05 | (49 | ) | 10.51 | (35 | ) | 8.24 | |||||||||||
Forfeited | (13 | ) | 9.63 | (8 | ) | 10.85 | (8 | ) | 9.17 | |||||||||||
Outstanding at end of year | 279 | 9.74 | 242 | 9.81 | 181 | 11.07 |
Stock Options | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||||
Outstanding at April 28, 2012 | 3,290 | $ | 13.73 | 5.34 | $ | 463 | |||||||
Granted | 485 | 9.51 | — | — | |||||||||
Canceled or forfeited | (157 | ) | 12.55 | — | — | ||||||||
Exercised | (197 | ) | 6.69 | — | 562 | ||||||||
Outstanding at April 27, 2013 | 3,421 | $ | 13.59 | 5.09 | $ | 1,176 | |||||||
Shares vested and expected to vest | 3,377 | $ | 13.63 | 5.05 | $ | 1,166 | |||||||
Exercisable at April 27, 2013 | 2,301 | $ | 15.42 | 3.71 | $ | 828 |
Year Ended | |||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | |||||||||
Fair Value of options granted | $ | 3.43 | $ | 3.46 | $ | 5.74 | |||||
Risk-free interest rate | 0.71 - 1.13% | 1.10 - 1.50% | 1.40 - 2.30% | ||||||||
Expected dividend rate | 2.43 | % | 0.71 - 2.15% | 0.67 - 0.68% | |||||||
Expected volatility | 45.60 - 46.15% | 44.59 - 46.85% | 42.00 - 46.00% | ||||||||
Expected life of option | 5.9 - 6.8 years | 5.9 - 6.8 years | 5.9 - 6.7 years |
Year Ended | |||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | |||||||||
Stock options | $ | 1,812 | $ | 2,565 | $ | 2,671 | |||||
Restricted stock and stock units | 765 | 256 | 256 | ||||||||
Employee stock purchase plans | 460 | 441 | 443 | ||||||||
$ | 3,037 | $ | 3,262 | $ | 3,370 |
Year Ended | |||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | |||||||||
Cost of goods sold | $ | 633 | $ | 610 | $ | 565 | |||||
Selling | 856 | 982 | 1,065 | ||||||||
General and administrative | 980 | 1,059 | 1,103 | ||||||||
Product design and development | 568 | 611 | 637 | ||||||||
$ | 3,037 | $ | 3,262 | $ | 3,370 |
Year Ended | |||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | |||||||||
Current: | |||||||||||
Federal | $ | 9,517 | $ | 2,266 | $ | 4,879 | |||||
State | 2,219 | 577 | 1,227 | ||||||||
Foreign | 754 | 313 | 939 | ||||||||
Deferred taxes | (4,340 | ) | (68 | ) | 852 | ||||||
$ | 8,150 | $ | 3,088 | $ | 7,897 |
Year Ended | ||||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | ||||||||||
Computed income tax expense at federal statutory rate | $ | 10,825 | $ | 4,052 | $ | 7,732 | ||||||
State taxes, net of federal benefit | 684 | 497 | 1,107 | |||||||||
Research and development tax credit | (1,804 | ) | (1,004 | ) | (981 | ) | ||||||
Meals and entertainment | 308 | 375 | 299 | |||||||||
Stock compensation | 466 | 842 | 959 | |||||||||
Dividends paid to retirement plan | (616 | ) | (522 | ) | — | |||||||
Domestic production activities deduction | (976 | ) | (270 | ) | (607 | ) | ||||||
Change in foreign deferred rates | — | (249 | ) | — | ||||||||
Reversal of valuation allowance | — | (364 | ) | — | ||||||||
Other, net | (737 | ) | (269 | ) | (612 | ) | ||||||
$ | 8,150 | $ | 3,088 | $ | 7,897 |
Year Ended | |||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | |||||||||
Domestic | $ | 27,667 | $ | 10,052 | $ | 17,892 | |||||
Foreign | 3,262 | 1,525 | 4,249 | ||||||||
Income before income taxes | $ | 30,929 | $ | 11,577 | $ | 22,141 |
April 27, 2013 | April 28, 2012 | ||||||
Deferred taxes assets: | |||||||
Warranty reserves | $ | 9,847 | $ | 8,425 | |||
Vacation accrual | 1,788 | 1,821 | |||||
Net losses on equity investments | 3,066 | 2,971 | |||||
Deferred maintenance revenue | 2,439 | 1,738 | |||||
Reserves for excess and obsolete inventory | 1,246 | 1,021 | |||||
Equity compensation | 1,049 | 653 | |||||
Allowance for doubtful accounts | 599 | 473 | |||||
Inventory capitalization | 600 | 907 | |||||
Accrued compensation and benefits | 1,077 | 742 | |||||
Intangible assets | 37 | 81 | |||||
Net operating loss carry forwards | — | 15 | |||||
Other | 440 | 334 | |||||
22,188 | 19,181 | ||||||
Deferred tax liabilities: | |||||||
Property and equipment | (7,542 | ) | (8,817 | ) | |||
Prepaid expenses | (662 | ) | (669 | ) | |||
Other | (168 | ) | (219 | ) | |||
(8,372 | ) | (9,705 | ) | ||||
$ | 13,816 | $ | 9,476 |
April 27, 2013 | April 28, 2012 | ||||||
Current assets | $ | 12,755 | $ | 10,941 | |||
Current liabilities | — | (42 | ) | ||||
Non-current assets | 1,061 | 30 | |||||
Non-current liabilities | — | (1,453 | ) | ||||
$ | 13,816 | $ | 9,476 |
Amount | |||
Balance as of May 1, 2010: | $ | 538 | |
Gross increases related to prior period tax positions | 132 | ||
Gross decreases related to prior period tax positions | (104 | ) | |
Gross increases related to current period tax positions | 81 | ||
Lapse of statute of limitations | (120 | ) | |
Balance as of April 30, 2011: | $ | 527 | |
Gross increases related to prior period tax positions | 14 | ||
Gross decreases related to prior period tax positions | (178 | ) | |
Gross increases related to current period tax positions | 86 | ||
Lapse of statute of limitations | — | ||
Balance as of April 28, 2012: | $ | 449 | |
Gross increases related to prior period tax positions | — | ||
Gross decreases related to prior period tax positions | (11 | ) | |
Gross increases related to current period tax positions | 129 | ||
Lapse of statute of limitations | (188 | ) | |
Balance as of April 27, 2013: | $ | 379 |
Year Ended | |||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | |||||||||
(Increase) decrease: | |||||||||||
Restricted cash | $ | 1,120 | $ | 377 | $ | (282 | ) | ||||
Accounts receivable | 3,364 | (4,995 | ) | (16,837 | ) | ||||||
Long-term receivables | 2,348 | 462 | (756 | ) | |||||||
Inventories | 6,656 | (7,539 | ) | (10,341 | ) | ||||||
Costs and estimated earnings in excess of billings | (16,335 | ) | 1,173 | 1,040 | |||||||
Prepaid expenses and other current assets | (658 | ) | 784 | 82 | |||||||
Income taxes receivable | 5,944 | (1,120 | ) | 2,574 | |||||||
Advertising rights and other assets | 386 | 226 | 823 | ||||||||
Increase (decrease): | |||||||||||
Accounts payable and accrued expenses | 7,658 | 6,975 | 11,242 | ||||||||
Customer deposits | (450 | ) | 1,538 | 1,940 | |||||||
Billings in excess of costs and estimated earnings | (140 | ) | (5,899 | ) | 7,179 | ||||||
Long-term warranty obligations | 2,932 | (767 | ) | 4,561 | |||||||
Income taxes payable | 1,023 | (215 | ) | 853 | |||||||
Long-term deferred revenue | (576 | ) | 783 | 1,256 | |||||||
Other long-term obligations | (169 | ) | (915 | ) | 41 | ||||||
$ | 13,103 | $ | (9,132 | ) | $ | 3,375 |
Year Ended | |||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | |||||||||
Cash payments for: | |||||||||||
Interest | $ | 420 | $ | 306 | $ | 113 | |||||
Income taxes, net of refunds | 5,422 | 4,292 | (3,683 | ) |
Year Ended | ||||||||||||
April 27, 2013 | April 28, 2012 | April 30, 2011 | ||||||||||
Demonstration equipment transferred to inventory | $ | 612 | $ | 409 | $ | 896 | ||||||
Purchases of property and equipment included in accounts payable | 1,207 | 1,475 | 673 | |||||||||
Contributions of common stock under the employee stock purchase plan | 1,482 | 1,413 | 1,382 |
Fair Value Measurements | |||||||||||
Level 1 | Level 2 | Total | |||||||||
Balance as of April 27, 2013: | |||||||||||
Cash and cash equivalents | $ | 40,628 | $ | — | $ | 40,628 | |||||
Restricted cash | 48 | — | 48 | ||||||||
Available-for-sale securities: | |||||||||||
Certificates of deposit | — | 4,677 | 4,677 | ||||||||
U.S. Government securities | 5,018 | — | 5,018 | ||||||||
U.S. Government sponsored entities | — | 4,752 | 4,752 | ||||||||
Municipal obligations | — | 9,605 | 9,605 | ||||||||
Derivatives - currency forward contracts | — | 7 | 7 | ||||||||
$ | 45,694 | $ | 19,041 | $ | 64,735 | ||||||
Balance as of April 28, 2012: | |||||||||||
Cash and cash equivalents | $ | 29,423 | $ | — | $ | 29,423 | |||||
Restricted cash | 1,169 | — | 1,169 | ||||||||
Available-for-sale securities: | |||||||||||
Certificates of deposit | — | 7,657 | 7,657 | ||||||||
U.S. Government securities | 7,556 | — | 7,556 | ||||||||
U.S. Government sponsored entities | — | 4,505 | 4,505 | ||||||||
Municipal obligations | — | 5,540 | 5,540 | ||||||||
Derivatives - currency forward contracts | — | (95 | ) | (95 | ) | ||||||
$ | 38,148 | $ | 17,607 | $ | 55,755 |
April 27, 2013 | April 28, 2012 | ||||||||||
U.S. Dollars | Foreign Currency | U.S. Dollars | Foreign Currency | ||||||||
Foreign Currency Exchange Forward Contracts: | |||||||||||
U.S. Dollars/Australian Dollars | 2,944 | 2,873 | 3,315 | 3,269 | |||||||
U.S. Dollars/Canadian Dollars | 492 | 492 | 870 | 868 | |||||||
U.S. Dollars/British Pounds | 1,554 | 1,005 | — | — | |||||||
U.S. Dollars/Euros | 1,155 | 866 | 130 | 99 | |||||||
U.S. Dollars/Singapore Dollars | — | — | 96 | 121 | |||||||
U.S. Dollars/Brazilian Reais | — | — | 242 | 436 |
April 27, 2013 | April 28, 2012 | ||||||
Beginning accrued warranty costs | $ | 22,215 | $ | 22,982 | |||
Warranties issued during the period | 11,140 | 8,199 | |||||
Settlements made during the period | (13,875 | ) | (13,531 | ) | |||
Changes in accrued warranty costs for pre-existing warranties during the period, including expirations | 5,666 | 4,565 | |||||
Ending accrued warranty costs | $ | 25,146 | $ | 22,215 |
Fiscal years ending | Amount | |||
2014 | $ | 2,840 | ||
2015 | 2,096 | |||
2016 | 1,832 | |||
2017 | 968 | |||
2018 | 191 | |||
Thereafter | 30 | |||
$ | 7,957 |
Fiscal years ending | Amount | |||
2014 | $ | 1,181 | ||
2015 | 399 | |||
2016 | 262 | |||
2017 | 200 | |||
2018 | 200 | |||
Thereafter | — | |||
$ | 2,242 |
Fiscal 2013 Quarter Ended | |||||||||||||||
July 28, 2012 | October 27, 2012 | January 26, 2013 | April 27, 2013 | ||||||||||||
Net sales | $ | 132,919 | $ | 149,871 | $ | 111,050 | $ | 124,482 | |||||||
Gross profit | 36,390 | 42,352 | 27,049 | 28,103 | |||||||||||
Net income | 6,678 | 11,547 | 2,710 | 1,844 | |||||||||||
Basic earnings per share | 0.16 | 0.27 | 0.06 | 0.04 | |||||||||||
Diluted earnings per share | 0.16 | 0.27 | 0.06 | 0.04 | |||||||||||
Fiscal 2012 Quarter Ended | |||||||||||||||
July 30, 2011 | October 29, 2011 | January 28, 2012 | April 28, 2012 | ||||||||||||
Net sales | $ | 118,698 | $ | 135,910 | $ | 122,925 | $ | 111,994 | |||||||
Gross profit | 29,507 | 31,470 | 27,855 | 24,606 | |||||||||||
Net income (loss) | 3,368 | 3,959 | 1,666 | (505 | ) | ||||||||||
Basic earnings (loss) per share | 0.08 | 0.09 | 0.04 | (0.01 | ) | ||||||||||
Diluted earnings (loss) per share | 0.08 | 0.09 | 0.04 | (0.01 | ) |
By /s/ James B. Morgan | By /s/ Sheila M. Anderson |
James B. Morgan | Sheila M. Anderson |
Chief Executive Officer | Chief Financial Officer |
June 12, 2013 | June 12, 2013 |
(a)(1) | Financial Statements |
(2) | Schedules |
(3) | Exhibits |
3.1 | Amended and Restated Articles of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 filed with our Registration Statement on Form S-1 on December 3, 1993 as Commission File No. 33-72466). | |
3.2 | Amendment to the Articles of Incorporation (Incorporated by reference to Exhibit 3.2 filed with our Annual Report on Form 10-K on July 28, 1999 as Commission File No. 0-23246). | |
3.3 | Amendment to the Articles of Incorporation (Incorporated by reference to the Definitive Proxy Statement on Form DEF-14A filed on July 6, 2006 as Commission File 0-23246). | |
3.4 | Amended and Restated Bylaws of the Company. (1) | |
4.1 | Form of Stock Certificate evidencing Common Stock, without par value, of the Company (Incorporated by reference to Exhibit 4.1 filed with our Amendment No. 1 to the Registration Statement on Form S-1 on January 12, 1994 as Commission File No. 33-72466). | |
4.2 | Shareholders Rights Agreement (Incorporated by reference to Exhibit 4.1 filed with our Form 8-A on August 29, 2008). | |
4.3 | 2001 Incentive Stock Option Plan (Incorporated by reference to Exhibit 4.1 to our Registration Statement on Form S-8 filed on November 8, 2001 as Commission File No. 333-72990).* | |
4.4 | 2001 Outside Directors Stock Option Plan (Incorporated by reference to Exhibit 4.2 to our Registration Statement on Form S-8 filed on November 8, 2001 as Commission File No. 333-72990).* | |
4.5 | Daktronics, Inc. 2007 Incentive Stock Plan (Incorporated by reference to Exhibit 10.1 filed with our Quarterly Report on Form 10-Q on August 20, 2007 as Commission File No. 0-23246).* | |
10.1 | Amended and Restated Deferred Compensation Agreement Between Daktronics, Inc. and Aelred Kurtenbach (Incorporated by reference to Exhibit 10.1 filed with our Annual Report on Form 10-K on June 28, 2004 as Commission File No. 0-23246).* | |
10.2 | Amended and Restated Deferred Compensation Agreement Between Daktronics, Inc. and Frank Kurtenbach (Incorporated by reference to Exhibit 10.2 filed with our Annual Report on Form 10-K on June 28, 2004 as Commission File No. 0-23246.)* | |
10.3 | Amended and Restated Deferred Compensation Agreement Between Daktronics, Inc. and James Morgan (Incorporated by reference to Exhibit 10.3 filed with our Annual Report on Form 10-K on June 28, 2004 as Commission File No. 0-23246).* |
10.4 | Loan Agreement dated October 14, 1998 between U.S. Bank National Association and Daktronics, Inc. (Incorporated by reference to Exhibit 10.6 filed with our Quarterly Report on Form 10-Q filed on December 11, 1998 as Commission File No. 0-23246). | |
10.5 | Eighth Amendment to Loan Agreement dated November 12, 2009 by and between Daktronics, Inc. and U.S. Bank National Association (Incorporate by reference to Exhibit 10.1 filed with our Current Report on Form 8-K filed on November 12, 2009). | |
10.6 | Tenth Amendment to Loan Agreement dated November 15, 2011 by and between Daktronics, Inc. and U.S. Bank National Association (Incorporated by reference to Exhibit 10.1 filed with our Current Report on Form 8-K filed on November 17, 2011). | |
10.7 | Eleventh Amendment to Loan Agreement dated November 9, 2012 by and between the Company and U.S. Bank National Association (Incorporated by reference to Exhibit 10.1 filed with our Current Report on Form 8-K filed on November 9, 2012). | |
10.8 | Renewal Revolving Note Dated November 9, 2012 between the Company and U.S. Bank National Association (Incorporated by reference to Exhibit 10.2 filed with our Current Report on Form 8-K filed on November 9, 2012). | |
10.9 | Loan Agreement Dated December 23, 2010 between Daktronics, Inc. and Bank of America, N.A. (Incorporated by reference to Exhibit 10.3 filed with our Current Report on Form 8-K filed on November 17, 2011). | |
10.10 | Second Amendment to Loan Agreement Dated November 15, 2011 by and between Daktronics, Inc. and Bank of America, N.A. (Incorporated by reference to Exhibit 10.5 filed with our Current Report on Form 8-K filed on November 17, 2011). | |
10.11 | Third Amendment to Loan Agreement dated July 2, 2012 by and between the Company and Bank of America, N.A. (Incorporated by reference to Exhibit 10.1 filed with our Current Report on Form 8-K filed on July 3, 2012). | |
10.12 | Fourth Amendment to Loan Agreement dated November 9, 2012 by and between the Company and Bank of America, N.A. (Incorporated by reference to Exhibit 10.3 filed with our Current Report on Form 8-K filed on November 9, 2012). | |
10.13 | Reaffirmation and Second Amendment to Unlimited Guaranty Agreement dated November 9, 2012 by and between the Company and Bank of America, N.A. (Incorporated by reference to Exhibit 10.4 filed with our Current Report on Form 8-K filed on November 9, 2012). | |
10.14 | Amended and Restated Revolving Note Dated November 9, 2012 between the Company and Bank of America, N.A. (Incorporated by reference to Exhibit 10.5 filed with our Current Report on Form 8-K filed on November 9, 2012). | |
10.15 | Separation Agreement dated October 7, 2012 by and between the Company and William R. Retterath (Incorporated by reference to Exhibit 10.1 filed with our Current Report on Form 8-K filed on October 12, 2012).* | |
21.1 | Subsidiaries of the Company. (1) | |
23.1 | Consent of Ernst & Young LLP. (1) | |
24 | Power of Attorney. (1) | |
31.1 | Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (1) | |
31.2 | Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (1) | |
32.1 | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350). (1) | |
32.2 | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350). (1) | |
101 | The following financial information from our Annual Report on Form 10-K for the fiscal year ended April 27, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Shareholders' Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements. (1) (2) | |
(1) | Filed herewith electronically. | |
(2) | Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Annual Report on Form 10-K shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be deemed part of a registration statement, prospectus or other document filed under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filings. | |
* | Indicates a management contract or compensatory plan or arrangement. |
DAKTRONICS, INC. | ||
By: /s/ James B. Morgan | ||
Chief Executive Officer and President | ||
(Principal Executive Officer) | ||
By: /s/ Sheila M. Anderson | ||
Chief Financial Officer | ||
(Principal Financial Officer and Principal Accounting Officer) |
Signature | Title | Date | |
By /s/ Byron J. Anderson | Director | June 12, 2013 | |
Byron J. Anderson | |||
By /s/ Robert G. Dutcher | Director | June 12, 2013 | |
Robert G. Dutcher | |||
By /s/ Nancy D. Frame | Director | June 12, 2013 | |
Nancy D. Frame | |||
By /s/ Aelred J. Kurtenbach | Director | June 12, 2013 | |
Aelred J. Kurtenbach | |||
By /s/ Reece A. Kurtenbach | Director | June 12, 2013 | |
Reece A. Kurtenbach | |||
By /s/ James B. Morgan | Director | June 12, 2013 | |
James B. Morgan | |||
By /s/ John L. Mulligan | Director | June 12, 2013 | |
John L. Mulligan | |||
By /s/ Bruce W. Tobin | Director | June 12, 2013 | |
Bruce W. Tobin | |||
By /s/ James A. Vellenga | Director | June 12, 2013 | |
James A. Vellenga |
DAKTRONICS, INC. AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS Years Ended April 27, 2013, April 28, 2012 and April 30, 2011 (in thousands) | |||||||||||||||||||
Additions | |||||||||||||||||||
Description | Balance at Beginning of Year | Charged to Costs and Expenses | Charged to Other Accounts | Deductions | Balance at End of Year | ||||||||||||||
For the year ended April 27, 2013: | |||||||||||||||||||
Deducted from asset accounts: | |||||||||||||||||||
Allowance for doubtful accounts | $ | 2,398 | $ | 782 | $ | — | $ | (462 | ) | (2) | $ | 2,718 | |||||||
Allowance for excess and obsolete inventories | 2,851 | 3,094 | 1 | (1) | (2,660 | ) | (3) | 3,286 | |||||||||||
For the year ended April 28, 2012: | |||||||||||||||||||
Deducted from asset accounts: | |||||||||||||||||||
Allowance for doubtful accounts | 2,548 | 110 | — | (260 | ) | (2) | 2,398 | ||||||||||||
Allowance for excess and obsolete inventories | 2,139 | 2,537 | 11 | (1) | (1,836 | ) | (3) | 2,851 | |||||||||||
For the year ended April 30, 2011: | |||||||||||||||||||
Deducted from asset accounts: | |||||||||||||||||||
Allowance for doubtful accounts | 2,585 | 101 | — | (138 | ) | (2) | 2,548 | ||||||||||||
Allowance for excess and obsolete inventories | 3,414 | 2,131 | 10 | (1) | (3,416 | ) | (3) | 2,139 |
3.1 | Amended and Restated Articles of Incorporation of the Company (Incorporated by reference to Exhibit 3.2 filed with our Registration Statement on Form S-1 on December 3, 1993 as Commission File No. 33-72466). | |
3.2 | Amendment to the Articles of Incorporation (Incorporated by reference to Exhibit 3.3 filed with our Annual Report on Form 10-K on July 28, 1999 as Commission File No. 0-23246). | |
3.3 | Amendment to the Articles of Incorporation (Incorporated by reference to the Definitive Proxy Statement on Form DEF-14A filed on July 6, 2006 as Commission File 0-23246). | |
3.4 | Amended and Restated Bylaws of the Company. (1) | |
4.1 | Form of Stock Certificate evidencing Common Stock, without par value, of the Company (Incorporated by reference to Exhibit 4.1 filed with our Amendment No. 1 to the Registration Statement on Form S-1 on January 12, 1994 as Commission File No. 33-72466). | |
4.2 | Shareholders Rights Agreement (Incorporated by reference to Exhibit 4.1 filed with our Form 8-A on August 29, 2008). | |
4.3 | 2001 Incentive Stock Option Plan (Incorporated by reference to Exhibit 4.1 to our Registration Statement on Form S-8 filed on November 8, 2001 as Commission File No. 333-72990).* | |
4.4 | 2001 Outside Directors Stock Option Plan (Incorporated by reference to Exhibit 4.2 to our Registration Statement on Form S-8 filed on November 8, 2001 as Commission File No. 333-72990).* | |
4.5 | Daktronics, Inc. 2007 Incentive Stock Plan (Incorporated by reference to Exhibit 10.1 filed with our Quarterly Report on Form 10-Q on August 20, 2007 as Commission File No. 0-23246).* | |
10.1 | Amended and Restated Deferred Compensation Agreement Between Daktronics, Inc. and Aelred Kurtenbach (Incorporated by reference to Exhibit 10.1 filed with our Annual Report on Form 10-K on June 28, 2004 as Commission File No. 0-23246).* | |
10.2 | Amended and Restated Deferred Compensation Agreement Between Daktronics, Inc. and Frank Kurtenbach (Incorporated by reference to Exhibit 10.2 filed with our Annual Report on Form 10-K on June 28, 2004 as Commission File No. 0-23246.)* | |
10.3 | Amended and Restated Deferred Compensation Agreement Between Daktronics, Inc. and James Morgan (Incorporated by reference to Exhibit 10.3 filed with our Annual Report on Form 10-K on June 28, 2004 as Commission File No. 0-23246).* | |
10.4 | Loan Agreement dated October 14, 1998 between U.S. Bank National Association and Daktronics, Inc. (Incorporated by reference to Exhibit 10.6 filed with our Quarterly Report on Form 10-Q filed on December 11, 1998 as Commission File No. 0-23246). | |
10.5 | Eighth Amendment to Loan Agreement dated November 12, 2009 by and between Daktronics, Inc. and U.S. Bank National Association (Incorporate by reference to Exhibit 10.1 filed with our Current Report on Form 8-K filed on November 12, 2009). | |
10.6 | Tenth Amendment to Loan Agreement dated November 15, 2011 by and between Daktronics, Inc. and U.S. Bank National Association (Incorporated by reference to Exhibit 10.1 filed with our Current Report on Form 8-K filed on November 17, 2011). | |
10.7 | Eleventh Amendment to Loan Agreement dated November 9, 2012 by and between the Company and U.S. Bank National Association (Incorporated by reference to Exhibit 10.1 filed with our Current Report on Form 8-K filed on November 9, 2012). | |
10.8 | Renewal Revolving Note Dated November 9, 2012 between the Company and U.S. Bank National Association (Incorporated by reference to Exhibit 10.2 filed with our Current Report on Form 8-K filed on November 9, 2012). | |
10.9 | Loan Agreement Dated December 23, 2010 between Daktronics, Inc. and Bank of America, N.A. (Incorporated by reference to Exhibit 10.3 filed with our Current Report on Form 8-K filed on November 17, 2011). | |
10.10 | Second Amendment to Loan Agreement Dated November 15, 2011 by and between Daktronics, Inc. and Bank of America, N.A. (Incorporated by reference to Exhibit 10.5 filed with our Current Report on Form 8-K filed on November 17, 2011). | |
10.11 | Third Amendment to Loan Agreement dated July 2, 2012 by and between the Company and Bank of America, N.A. (Incorporated by reference to Exhibit 10.1 filed with our Current Report on Form 8-K filed on July 3, 2012). | |
10.12 | Fourth Amendment to Loan Agreement dated November 9, 2012 by and between the Company and Bank of America, N.A. (Incorporated by reference to Exhibit 10.3 filed with our Current Report on Form 8-K filed on November 9, 2012). | |
10.13 | Reaffirmation and Second Amendment to Unlimited Guaranty Agreement dated November 9, 2012 by and between the Company and Bank of America, N.A. (Incorporated by reference to Exhibit 10.4 filed with our Current Report on Form 8-K filed on November 9, 2012). | |
10.14 | Amended and Restated Revolving Note Dated November 9, 2012 between the Company and Bank of America, N.A. (Incorporated by reference to Exhibit 10.5 filed with our Current Report on Form 8-K filed on November 9, 2012). |
10.15 | Separation Agreement dated October 7, 2012 by and between the Company and William R. Retterath (Incorporated by reference to Exhibit 10.1 filed with our Current Report on Form 8-K filed on October 12, 2012).* | |
21.1 | Subsidiaries of the Company. (1) | |
23.1 | Consent of Ernst & Young LLP. (1) | |
24 | Power of Attorney. (1) | |
31.1 | Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (1) | |
31.2 | Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (1) | |
32.1 | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350). (1) | |
32.2 | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350). (1) | |
101 | The following financial information from our Annual Report on Form 10-K for the fiscal year ended April 27, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Shareholders' Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements. (1) (2) | |
(1) | Filed herewith electronically. | |
(2) | Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Annual Report on Form 10-K shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be deemed part of a registration statement, prospectus or other document filed under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filings. | |
* | Indicates a management contract or compensatory plan or arrangement. |
DAKTRONICS, INC. | |
/s/ Carla S. Gatzke | |
Carla Gatzke, Secretary |
Name of Subsidiary | Jurisdiction of Incorporation |
Daktronics Canada, Inc. | Canada |
Daktronics, GmbH | Germany |
Daktronics UK, Ltd. | Great Britain |
Daktronics Shanghai Ltd. | Peoples Republic of China |
Daktronics France SARL | France |
Daktronics Beijing Ltd. | Peoples Republic of China |
Daktronics Australia Pty Ltd. | Australia |
Daktronics Installation, Inc. | South Dakota |
Daktronics Japan, Inc. | Japan |
Daktronics HK Limited | Hong Kong |
Daktronics (International) Limited | Macau |
Daktronics Singapore Pte. Ltd. | Singapore |
Daktronics Spain S.L. | Spain |
Daktronics Brazil, Ltda. | Brazil |
Daktronics Belgium N.V. | Belgium |
Signature | Title | Date | |
By /s/ Byron J. Anderson | Director | June 12, 2013 | |
Byron J. Anderson | |||
By /s/ Robert G. Dutcher | Director | June 12, 2013 | |
Robert G. Dutcher | |||
By /s/ Nancy D. Frame | Director | June 12, 2013 | |
Nancy D. Frame | |||
By /s/ Aelred J. Kurtenbach | Director | June 12, 2013 | |
Aelred J. Kurtenbach | |||
By /s/ Reece A. Kurtenbach | Director | June 12, 2013 | |
Reece A. Kurtenbach | |||
By /s/ James B. Morgan | Director | June 12, 2013 | |
James B. Morgan | |||
By /s/ John L. Mulligan | Director | June 12, 2013 | |
John L. Mulligan | |||
By /s/ Bruce W. Tobin | Director | June 12, 2013 | |
Bruce W. Tobin | |||
By /s/ James A. Vellenga | Director | June 12, 2013 | |
James A. Vellenga |
1. | I have reviewed this annual report on Form 10-K for the year ended April 27, 2013 of Daktronics, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financially reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ James B. Morgan | |
James B. Morgan | |
Chief Executive Officer | |
Date: June 12, 2013 |
1. | I have reviewed this annual report on Form 10-K for the year ended April 27, 2013 of Daktronics, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financially reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Sheila M. Anderson | |
Sheila M. Anderson | |
Chief Financial Officer | |
Date: June 12, 2013 |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ James B. Morgan |
James B. Morgan |
Chief Executive Officer |
Date: June 12, 2013 |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Sheila M. Anderson |
Sheila M. Anderson |
Chief Financial Officer |
Date: June 12, 2013 |
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Subsequent Events - (Details) (USD $)
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12 Months Ended | 0 Months Ended | ||
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Apr. 27, 2013
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Apr. 28, 2012
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Apr. 30, 2011
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May 23, 2013
Subsequent Event
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Subsequent Event [Line Items] | ||||
Cash dividend declared (usd per share) | $ 0.73 | $ 0.62 | $ 0.60 | $ 0.12 |
Income Taxes - Unrecognized Tax Benefits (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Apr. 27, 2013
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Apr. 28, 2012
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Apr. 30, 2011
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Reconciliation of Changes in Unrecognized Tax Benefits | |||
Unrecognized tax benefits, beginning balance | $ 449 | $ 527 | $ 538 |
Gross increases related to prior period tax positions | 0 | 14 | 132 |
Gross decreases related to prior period tax positions | (11) | (178) | (104) |
Gross increases related to current period tax positions | 129 | 86 | 81 |
Lapse of statute of limitations | (188) | 0 | (120) |
Unrecognized tax benefits, ending balance | $ 379 | $ 449 | $ 527 |
Cash Flow Information - Supplemental Cash Flow Information (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
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Apr. 27, 2013
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Apr. 28, 2012
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Apr. 30, 2011
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Cash payments for: | |||
Interest | $ 420 | $ 306 | $ 113 |
Income taxes, net of refunds | $ 5,422 | $ 4,292 | $ (3,683) |
Employee Benefit Plans
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12 Months Ended |
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Apr. 27, 2013
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Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans We sponsor a 401(k) savings plan under which eligible U.S. employees may choose to make voluntary contributions of such employee's compensation on a pretax basis, subject to certain Internal Revenue Service (IRS) limits. We make matching contributions equal to 25 percent (50 percent prior to August 1, 2010 and after January 29, 2011) of the employee's qualifying contribution up to six percent of such employee's compensation plus other discretionary contributions as authorized by our Board of Directors. Employees are eligible to participate upon completion of one year of service if they have attained the age of 21 and have worked more than 1000 hours during such plan year. We contributed $1,713, $1,618 and $905 to the plan for fiscal years 2013, 2012, and 2011, respectively. We have unfunded deferred compensation agreements with certain officers and a former director under which interest is credited each year to each participant’s account in an amount equal to the five-year Treasury note rate as of January 1 of each plan year. Total amounts accrued for these plans as of April 27, 2013 and April 28, 2012 were $629 and $625, respectively. Contributions for each of the fiscal years 2013, 2012, and 2011 were $23, $23 and $22, respectively. The amounts accrued under the plans are not funded and are subject to the claims of the participants’ creditors. Participants may elect various forms of withdrawals upon retirement, including a lump sum distribution or annual payments over five or 10 years. |
Long-Lived Assets - Intangible Assets (Details) (USD $)
In Thousands, unless otherwise specified |
Apr. 27, 2013
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Apr. 28, 2012
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---|---|---|
Schedule of Definite-Lived Intangible and Indefinite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ 1,502 | $ 1,274 |
Indefinite-lived assets | 401 | 401 |
Definite-lived and Indefinite lived, Gross Carrying Amount | 2,683 | 2,683 |
Intangibles, net | 1,181 | 1,409 |
Patents
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Schedule of Definite-Lived Intangible and Indefinite-Lived Intangible Assets [Line Items] | ||
Definite-lived, Gross Carrying Amount | 2,282 | 2,282 |
Accumulated Amortization | 1,502 | 1,274 |
Definite-lived, Net Value | $ 780 | $ 1,008 |
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Per Share data, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Apr. 27, 2013
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Apr. 28, 2012
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Apr. 30, 2011
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Income Statement [Abstract] | |||
Net sales | $ 518,322 | $ 489,526 | $ 441,676 |
Cost of goods sold | 384,428 | 376,089 | 330,192 |
Gross profit | 133,894 | 113,437 | 111,484 |
Operating expenses: | |||
Selling expense | 52,759 | 52,233 | 49,555 |
General and administrative | 27,404 | 27,422 | 23,453 |
Product design and development | 23,131 | 23,507 | 18,949 |
Total operating expenses | 103,294 | 103,162 | 91,957 |
Operating income | 30,600 | 10,275 | 19,527 |
Nonoperating income (expense): | |||
Interest income | 1,523 | 1,747 | 1,921 |
Interest expense | (355) | (335) | (184) |
Other (expense) income, net | (839) | (110) | 877 |
Income before income taxes | 30,929 | 11,577 | 22,141 |
Income tax expense | 8,150 | 3,088 | 7,897 |
Net income | $ 22,779 | $ 8,489 | $ 14,244 |
Weighted average shares outstanding: | |||
Basic (in shares) | 42,280 | 41,869 | 41,422 |
Diluted (in shares) | 42,621 | 42,304 | 42,277 |
Earnings per share: | |||
Basic (in dollars per share) | $ 0.54 | $ 0.20 | $ 0.34 |
Diluted (in dollars per share) | $ 0.53 | $ 0.20 | $ 0.34 |
Cash dividend declared per share | $ 0.73 | $ 0.62 | $ 0.60 |
Marketable Securities
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Apr. 27, 2013
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Marketable Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities | Marketable Securities We have a cash management program which provides for the investment of cash balances not used in current operations. We classify our investments in marketable securities as available-for-sale in accordance with the provisions of ASU 320, Investments – Debt and Equity Securities. Marketable securities classified as available-for-sale are reported at fair value with unrealized gains or losses, net of tax, reported in accumulated other comprehensive (loss) income. As it relates to fixed income marketable securities, we do not intend to sell any of these investments, and it is not more-likely-than-not we will be required to sell any of these investments before recovery of the entire amortized cost basis. The cost of securities sold is based on the specific identification method. Where quoted market prices are not available, we use the market price of similar types of securities traded in the market to estimate fair value. As of April 27, 2013 and April 28, 2012, our available-for-sale securities consisted of the following:
Realized gains or losses on investments are recorded in our consolidated statements of operations within other (expense) income, net. Upon the sale of a security classified as available-for-sale, the security’s specific unrealized gain (loss) is reclassified out of "accumulated other comprehensive (loss) income” into earnings based on the specific identification method. In the fiscal years ended April 27, 2013 and April 28, 2012, the reclassifications from accumulated other comprehensive (loss) income to net assets were immaterial. Realized gains and losses on sales and maturities of investments were immaterial in the fiscal years ended April 27, 2013 and April 28, 2012. All available-for-sale securities are classified as current assets, as they are readily available to support our current operating needs. The contractual maturities of available-for-sale debt securities as of April 27, 2013 were as follows:
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Subsequent Events
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12 Months Ended |
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Apr. 27, 2013
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Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On May 23, 2013, our Board of Directors declared a semi-annual dividend of $0.12 per share on our common stock for the fiscal year ended April 27, 2013, payable on June 14, 2013 to holders of record of our common stock on June 3, 2013. |
Shareholders' Equity and Share-Based Compensation - Share-Based Compensation Expense by Award Type (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Apr. 27, 2013
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Apr. 28, 2012
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Apr. 30, 2011
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation | $ 3,037 | $ 3,262 | $ 3,370 |
Stock Options
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|||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation | 1,812 | 2,565 | 2,671 |
Restricted Stock and Restricted Stock Units
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|||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation | 765 | 256 | 256 |
Employee Stock
|
|||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation | $ 460 | $ 441 | $ 443 |
Income Taxes
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Apr. 27, 2013
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes We are subject to U.S. Federal income tax as well as the income taxes of multiple state jurisdictions. As a result of the completion of examinations by the Internal Revenue Service on prior years and the expiration of statutes of limitations, fiscal years 2010, 2011 and 2012 are the only years remaining open under statutes of limitations. Certain subsidiaries are also subject to income tax in several foreign jurisdictions which have open tax years varying by jurisdiction beginning in fiscal 2005. On January 2, 2013, the President signed into law The American Taxpayer Relief Act of 2012. Under prior law, a taxpayer was entitled to a research tax credit for qualifying amounts paid or incurred on or before December 31, 2011. The 2012 Taxpayer Relief Act extends the research credit for two years to December 31, 2013. The extension of the research credit is retroactive and includes amounts paid or incurred after December 31, 2011. As a result of the retroactive extension, we recognized approximately $1,804 in tax benefits for the credit during fiscal year 2013. Income tax expense (benefit) consisted of the following:
A reconciliation of the provision for income taxes and the amount computed by applying the federal statutory rate to income before income taxes is as follows:
We operated under a tax holiday in China which expired in fiscal 2012. As noted above, the expiration of this tax holiday caused a $249 decrease in our income tax expense in fiscal 2012. The pretax income attributable to domestic and foreign operations was as follows:
The components of the net deferred tax asset were as follows:
We review deferred tax assets, including net operating losses, and to the extent we believe the asset may not be realized, we recognize a valuation allowance. At April 27, 2013 and April 28, 2012, we had recorded no valuation allowances as we believe our deferred tax assets will be fully realized based upon our estimates of the future taxable income. If our estimates of future taxable income are not met in future periods, a valuation allowance for some of these deferred tax assets may be required. We have not recorded U.S. deferred income taxes on certain of our non-U.S. subsidiaries’ undistributed earnings, as such amounts are intended to be reinvested outside the United States indefinitely. However, should we change our business and tax strategies in the future and decide to repatriate a portion of these earnings to one of our U.S. subsidiaries, including cash maintained by these non-U.S. subsidiaries, additional U.S. tax liabilities would be incurred. It is not practical at this time to estimate the amount of additional U.S. tax liabilities we would incur. The following presents the classification of the net deferred tax asset on the accompanying consolidated balance sheets:
We account for uncertainties in tax positions under the provisions of ASC 740-10, Accounting for Uncertainty in Income Taxes, an Interpretation of SFAS No. 109. ASC 740-10 creates a single model to address uncertainty in tax positions and clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. ASC 740-10 also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. The following table provides a reconciliation of changes in unrecognized tax benefits for fiscal 2013, 2012 and 2011:
We recognized an expense (benefit) of $10, $(1) and $(16) in net interest and penalties during the years ended April 27, 2013, April 28, 2012 and April 30, 2011, respectively. Interest and penalties recognized are recorded in income taxes in our consolidated statements of operations. We had accrued $11 and $24 in net interest or penalties as of April 27, 2013 and April 28, 2012, respectively. |
Quarterly Financial Data (Unaudited) - (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 12 Months Ended | |||||||||
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Apr. 27, 2013
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Jan. 26, 2013
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Oct. 27, 2012
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Jul. 28, 2012
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Apr. 28, 2012
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Jan. 28, 2012
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Oct. 29, 2011
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Jul. 30, 2011
|
Apr. 27, 2013
|
Apr. 28, 2012
|
Apr. 30, 2011
|
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 124,482 | $ 111,050 | $ 149,871 | $ 132,919 | $ 111,994 | $ 122,925 | $ 135,910 | $ 118,698 | $ 518,322 | $ 489,526 | $ 441,676 |
Gross profit | 28,103 | 27,049 | 42,352 | 36,390 | 24,606 | 27,855 | 31,470 | 29,507 | 133,894 | 113,437 | 111,484 |
Net income | $ 1,844 | $ 2,710 | $ 11,547 | $ 6,678 | $ (505) | $ 1,666 | $ 3,959 | $ 3,368 | $ 22,779 | $ 8,489 | $ 14,244 |
Basic earnings per share (in dollars per share) | $ 0.04 | $ 0.06 | $ 0.27 | $ 0.16 | $ (0.01) | $ 0.04 | $ 0.09 | $ 0.08 | $ 0.54 | $ 0.20 | $ 0.34 |
Diluted earnings per share (in dollars per share) | $ 0.04 | $ 0.06 | $ 0.27 | $ 0.16 | $ (0.01) | $ 0.04 | $ 0.09 | $ 0.08 | $ 0.53 | $ 0.20 | $ 0.34 |
Segment Reporting - Net Income by Segment (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 12 Months Ended | |||||||||
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Apr. 27, 2013
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Jan. 26, 2013
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Oct. 27, 2012
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Jul. 28, 2012
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Apr. 28, 2012
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Jan. 28, 2012
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Oct. 29, 2011
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Jul. 30, 2011
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Apr. 27, 2013
segment
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Apr. 28, 2012
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Apr. 30, 2011
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Segment Reporting Information | |||||||||||
Number of business units | 5 | ||||||||||
Net sales | $ 124,482 | $ 111,050 | $ 149,871 | $ 132,919 | $ 111,994 | $ 122,925 | $ 135,910 | $ 118,698 | $ 518,322 | $ 489,526 | $ 441,676 |
Contribution margin | 81,135 | 61,204 | 61,929 | ||||||||
Non-allocated operating expenses: | |||||||||||
General and administrative | 27,404 | 27,422 | 23,453 | ||||||||
Product design and development | 23,131 | 23,507 | 18,949 | ||||||||
Operating income | 30,600 | 10,275 | 19,527 | ||||||||
Nonoperating income (expense): | |||||||||||
Interest income | 1,523 | 1,747 | 1,921 | ||||||||
Interest expense | (355) | (335) | (184) | ||||||||
Other (expense) income, net | (839) | (110) | 877 | ||||||||
Income before income taxes | 30,929 | 11,577 | 22,141 | ||||||||
Income tax expense | 8,150 | 3,088 | 7,897 | ||||||||
Net income | 1,844 | 2,710 | 11,547 | 6,678 | (505) | 1,666 | 3,959 | 3,368 | 22,779 | 8,489 | 14,244 |
Depreciation and amortization | 15,607 | 17,518 | 19,641 | ||||||||
Commerical
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Segment Reporting Information | |||||||||||
Net sales | 144,596 | 148,585 | 112,515 | ||||||||
Contribution margin | 24,241 | 24,011 | 12,925 | ||||||||
Nonoperating income (expense): | |||||||||||
Depreciation and amortization | 4,940 | 6,103 | 6,790 | ||||||||
Live Events
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Segment Reporting Information | |||||||||||
Net sales | 158,562 | 160,933 | 161,572 | ||||||||
Contribution margin | 19,071 | 13,579 | 18,889 | ||||||||
Nonoperating income (expense): | |||||||||||
Depreciation and amortization | 4,473 | 5,055 | 6,224 | ||||||||
Schools & Theatres
|
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Segment Reporting Information | |||||||||||
Net sales | 66,128 | 59,662 | 62,310 | ||||||||
Contribution margin | 8,150 | 4,716 | 7,247 | ||||||||
Nonoperating income (expense): | |||||||||||
Depreciation and amortization | 2,233 | 2,361 | 2,621 | ||||||||
Transportation
|
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Segment Reporting Information | |||||||||||
Net sales | 73,270 | 48,284 | 45,215 | ||||||||
Contribution margin | 21,330 | 11,009 | 12,149 | ||||||||
Nonoperating income (expense): | |||||||||||
Depreciation and amortization | 1,375 | 1,386 | 1,524 | ||||||||
International
|
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Segment Reporting Information | |||||||||||
Net sales | 75,766 | 72,062 | 60,064 | ||||||||
Contribution margin | 8,343 | 7,889 | 10,719 | ||||||||
Nonoperating income (expense): | |||||||||||
Depreciation and amortization | 717 | 650 | 692 | ||||||||
Unallocated corporate depreciation
|
|||||||||||
Nonoperating income (expense): | |||||||||||
Depreciation and amortization | $ 1,869 | $ 1,963 | $ 1,790 |
Selected Financial Statement Data - Accrued Expenses (Details) (USD $)
In Thousands, unless otherwise specified |
Apr. 27, 2013
|
Apr. 28, 2012
|
---|---|---|
Selected Financial Statement Data [Abstract] | ||
Compensation | $ 12,940 | $ 11,475 |
Taxes, other than income taxes | 2,534 | 3,987 |
Other | 8,857 | 7,269 |
Accrued expenses | $ 24,331 | $ 22,731 |
Derivative Financial Instruments (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 27, 2013
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions | The foreign currency exchange contracts in aggregated notional amounts in place to exchange United States Dollars at April 27, 2013 and April 28, 2012 were as follows:
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Nature of Business and Summary of Significant Accounting Policies (Policies)
|
12 Months Ended | ||||||||||||||||||||
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Apr. 27, 2013
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||
Nature of business | Nature of business: Daktronics, Inc. and its subsidiaries are engaged principally in the design, manufacture and sale of a wide range of electronic display systems and related products which are sold in a variety of markets throughout the world and the rendering of related maintenance and professional services. Our products are designed primarily to inform and entertain people through the communication of content. |
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Fiscal year | Fiscal year: We operate on a 52 to 53 week fiscal year, with our fiscal year ending on the Saturday closest to April 30 of each year. When April 30 falls on a Wednesday, the fiscal year ends on the preceding Saturday. The fiscal years ended April 27, 2013, April 28, 2012 and April 30, 2011 each consisted of 52 weeks. Within each fiscal year, each quarter is comprised of 13 week periods following the beginning of each fiscal year. In each 53 week year, each of the last three quarters is comprised of a 13 week period, and an additional week is added to the first quarter of that fiscal year. |
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Principles of consolidation | Principles of consolidation: The consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries – Daktronics France SARL; Daktronics Shanghai, Ltd.; Daktronics GmbH; Daktronics UK, Ltd.; Daktronics HK Limited; Daktronics International Limited; Daktronics Canada, Inc.; Daktronics Beijing, Ltd.; Daktronics Australia Pty Ltd.; Daktronics Installation; Daktronics Japan, Inc.; Daktronics Brazil, Ltda.; Daktronics Singapore Pte. Ltd., and Daktronics Spain S.L. Intercompany balances and transactions have been eliminated in consolidation. Investments in affiliates over which we have significant influence are accounted for by the equity method. As of April 27, 2013 and April 28, 2012, we did not have any investments accounted for by the equity method. Prior to April 30, 2011, as explained in Note 16, we had various investments accounted for under the equity method. Investments in affiliates as to which we do not have the ability to exert significant influence over their operating and financing activities are accounted for under the cost method of accounting. We have evaluated our relationships with affiliates and have determined that these entities are either not variable interest entities or, in the case of variable interest entities, we are not the primary beneficiary and therefore they are not required to be consolidated in our consolidated financial statements. The equity method requires us to report our share of losses up to our equity investment amount, including any financial support made or committed to. At such time the equity investment is reduced to zero, we recognize losses to the extent of and as an adjustment to the other investments in the affiliate in order of seniority or priority in liquidation. Our proportional share of the respective affiliates' earnings or losses is included in other (expense) income in our consolidated statements of operations. |
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Use of estimates | Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near-term relate to the determination of the estimated total costs on construction-type contracts, estimated costs to be incurred for product warranties, excess and obsolete inventory, the reserve for doubtful accounts, share-based compensation, goodwill impairment and income taxes. Changes in estimates are reflected in the periods in which they become known. |
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Cash and cash equivalents | Cash and cash equivalents: All highly liquid investments with maturities of three months or less at the date of purchase are considered to be cash equivalents and consist primarily of government repurchase agreements, savings accounts and money market accounts that are carried at cost, which approximates fair value. We maintain our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. |
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Restricted cash | Restricted cash: Restricted cash consists of deposits to secure bank guarantees issued by our foreign subsidiaries. |
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Inventories | Inventories: Inventories are stated at the lower of cost (first-in, first-out method) or market. Market is determined on the basis of estimated net realizable values. |
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Revenue recognition | Revenue recognition: Net sales are reported net of estimated sales returns and exclude sales taxes. We estimate our sales returns reserve based on historical return rates and analysis of specific accounts. |
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Revenue recognition - Long-term construction-type contracts | Long-term construction-type contracts: Earnings on construction-type contracts are recognized on the percentage-of-completion method, measured by the percentage of costs incurred to date to estimated total costs for each contract. Contract costs include all direct material and labor costs and those indirect costs related to contract performance. Indirect costs include charges for such items as facilities, engineering, and project management. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are probable and capable of being estimated. We combine contracts for accounting purposes when they are negotiated as a package with an overall profit margin objective, essentially represent an agreement to do a single project for a customer, involve interrelated construction activities, and are performed concurrently or sequentially. When a group of contracts is combined, revenue and profit are recognized uniformly over the performance of the combined projects. We segment revenues in accordance with contract segmenting criteria in Accounting Standards Codification (“ASC”) 650-35, Construction-Type and Production-Type Contracts. |
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Revenue recognition - Equipment other than construction-type contracts | Equipment other than construction-type contracts: We recognize revenue on equipment sales, other than construction-type contracts, when title passes, which is usually upon shipment and then only if the terms of the arrangement are fixed and determinable and collectability is reasonably assured. We record estimated sales returns and discounts as a reduction of net sales in the same period revenue is recognized. |
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Revenue recognition - Product maintenance | Product maintenance: In connection with the sale of our products, we also occasionally sell separately priced extended warranties and product maintenance contracts. The revenue related to such contracts is deferred and recognized ratably as net sales over the terms of the contracts, which vary up to 10 years. We record unrealized revenue in deferred revenue (billed or collected) in the liability section of the balance sheet. Deferred revenue (billed or collected) excludes unrealized revenue from contractual obligations to be billed by us in future periods. |
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Revenue recognition - Services | Services: Revenues generated by us for services, such as event support, control room design, on-site training, equipment service and technical support of our equipment, are recognized as net sales when the services are performed. |
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Revenue recognition - Multiple-element arrangements | Multiple-element arrangements: We generate revenue from the sale of equipment and related services, including customization, installation and maintenance services. In these limited cases, we provide some or all of such equipment and services to our customers under the terms of a single multiple-element sales arrangement. These arrangements typically involve the sale of equipment bundled with some or all of these services, but they may also involve instances in which we have contracted to deliver multiple pieces of equipment over time rather than at a single point in time. When a sales arrangement involves multiple elements, the items included in the arrangement (deliverables) are evaluated pursuant to ASC 605-25, Revenue Arrangements with Multiple Deliverables and ASC 605-35, to determine whether they represent separate units of accounting. We perform this evaluation at the inception of an arrangement and as we deliver each item in the arrangement. We first consider the separation criteria of ASC 605-35. Deliverables not within the scope of ASC 605-35 are evaluated for separation under ASC 605-25. For those elements falling under the guidance of ASC 605-25, we generally account for a deliverable (or a group of deliverables) separately if the delivered item(s) has standalone value to the customer and if we have given the customer a general right of return relative to the delivered item(s) and delivery or performance of the undelivered item(s) or service(s) is probable and substantially in our control. When items included in a multiple-element arrangement represent separate units of accounting, we allocate the arrangement consideration to the individual items based on their relative fair values. The amount of arrangement consideration allocated to the delivered item(s) is limited to the amount not contingent on us delivering additional products or services. Once we have determined the amount, if any, of arrangement consideration allocable to the delivered item(s), we apply the applicable revenue recognition policy to determine when and by which method such amount may be recognized as revenue. We generally determine if objective and reliable evidence of fair value for the items included in a multiple-element arrangement exists based on whether we have vendor-specific objective evidence ("VSOE") of the price for which we sell an item on a standalone basis. If we do not have VSOE for the item, we will use the price charged by a competitor selling a comparable product or service on a standalone basis to similarly situated customers, if available. If neither VSOE nor third party evidence is available, we use our best estimate of the selling price for that deliverable. |
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Revenue recognition - Software | Software: We typically sell our proprietary software bundled with our video displays and certain other products, but we also sell our software separately. Pursuant to ASC 985-605, Software Revenue Recognition, revenues from software license fees on sales, other than construction-type contracts, are recognized when persuasive evidence of an agreement exists, delivery of the product has occurred, the fee is fixed and determinable, and collection is probable. For sales of software included in construction-type contracts, the revenue is recognized under the percentage-of-completion method starting when all of these criteria have been met. |
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Revenue recognition - Long-term receivables and advertising rights | Long-term receivables and advertising rights: We occasionally sell and install our products at facilities in exchange for the rights to sell or to retain future advertising revenues. For these transactions, we recognize revenue for the amount of the present value of the future advertising payments if enough advertising is sold to obtain normal margins on the contract and we record the related receivable in long-term receivables. We recognize imputed interest as earned. On those transactions where we have not sold the advertising for the full value of the equipment at normal margins, we record the related cost of equipment as advertising rights. Revenue to the extent of the present value of the advertising payments is recognized in long-term receivables when it becomes fixed and determinable under the provisions of the applicable advertising contracts. At the time the revenue is recognized, costs of the equipment are recognized based on an estimate of overall margin expected. Any remaining costs are recorded in the costs of advertising rights. |
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Property and equipment | Property and equipment: Property and equipment is stated at cost and depreciated principally on the straight-line method over the following estimated useful lives:
Leasehold improvements are depreciated over the lesser of the useful life of the asset or the term of the lease. |
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Long-Lived Assets | Long-Lived Assets: Long-lived assets other than goodwill and indefinite-lived intangible assets, as described in Note 4, which are separately tested for impairment, are evaluated for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. When evaluating long-lived assets for potential impairment, we first compare the carrying value of the asset to the asset's estimated future cash flows (undiscounted and without interest charges). If the estimated future cash flows are less than the carrying value of the asset, we calculate an impairment loss. The impairment loss calculation compares the carrying value of the asset to the asset's estimated fair value. We recognize an impairment loss if the amount of the asset's carrying value exceeds the asset's estimated fair value. If we recognize an impairment loss, the adjusted carrying amount of the asset becomes its new cost basis. For a depreciable long-lived asset, the new cost basis will be depreciated (amortized) over the remaining useful life of that asset. Our impairment loss calculations contain uncertainties because they require management to make assumptions and to apply judgment to estimate future cash flows and asset fair values, including forecasting useful lives of the assets and selecting the discount rate that reflects the risk inherent in future cash flows. |
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Software costs | Software costs: We capitalize certain costs incurred in connection with developing or obtaining internal-use software. Capitalized software costs are included in property and equipment on our consolidated balance sheets. Software costs that do not meet capitalization criteria are expensed immediately. |
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Foreign currency translation | Foreign currency translation: Our foreign subsidiaries use the local currency of their respective countries as their functional currency. The assets and liabilities of foreign operations are generally translated at the exchange rates in effect at the balance sheet date. The operating results of foreign operations are translated at weighted average exchange rates. The related translation gains or losses are reported as a separate component of shareholders’ equity in accumulated other comprehensive (loss) income. |
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Income taxes | Income taxes: We account for income taxes under ASC 740, Income Taxes, which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events included in our financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. ASC 740 requires the consideration of a valuation allowance for deferred tax assets if it is “more likely than not” some component or all of the benefits of deferred tax assets will not be realized. Tax rate changes are reflected in income during the period such changes are enacted. We have benefited from a tax holiday in China that expired in fiscal 2012. In fiscal 2012 and 2011, we realized a benefit of approximately $249 or $0.006 per share and $77 or $0.002 per share, respectively. Our income tax returns, like those of most companies, are periodically audited by U.S. federal, state and local and foreign tax authorities. These audits include questions regarding our tax filing positions, including the timing and amount of deductions and the allocation of income among various tax jurisdictions. At any one time, multiple tax years are subject to audit by the various tax authorities. In evaluating the tax benefits associated with our various tax filing positions, we record a tax benefit for uncertain tax positions using the highest cumulative tax benefit that is more likely than not to be realized. A number of years may elapse before a particular matter for which we have established a liability is audited and effectively settled. We adjust our liability for unrecognized tax benefits in the period in which we determine the issue is effectively settled with the tax authorities, the statute of limitations expires for the relevant taxing authority to examine the tax position, or when more information becomes available. We include our liability for unrecognized tax benefits, including accrued penalties and interest, in income taxes payable on our consolidated balance sheets and in income tax expense in our consolidated statements of operations. |
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Comprehensive income (loss) | Comprehensive (loss) income: We follow the provisions of ASC 220, Reporting Comprehensive Income, which establishes standards for reporting and displaying comprehensive income and its components. Comprehensive (loss) income reflects the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. For us, comprehensive (loss) income represents net income (loss) adjusted for foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities. The foreign currency translation adjustment included in comprehensive (loss) income has not been tax affected, as the investments in foreign affiliates are deemed to be permanent. In accordance with ASC 220 and ASU 2011-05, we disclose comprehensive (loss) income on a separate consolidated statement of comprehensive income. |
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Product design and development | Product design and development: All expenses related to product design and development are charged to operations as incurred. Our product development activities include the enhancement of existing products and the development of new products. |
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Advertising costs | Advertising costs: We expense advertising costs as incurred. |
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Shipping and handling cost | Shipping and handling costs: Shipping and handling costs collected from our customers in connection with our sales are recorded as revenue. We record shipping and handling costs as a component of cost of sales at the time the product is shipped. |
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Earnings per share (EPS) | Earnings per share (“EPS”): Basic EPS is computed by dividing income attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution which may occur if securities or other obligations to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock which share in our earnings. |
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Share-based compensation | Share-based compensation: We account for share-based compensation in accordance with ASC 718, Compensation-Stock Compensation. Under the fair value recognition provisions of ASC 718, we measure share-based compensation cost at the grant date based on the fair value of the award and recognize the compensation expense over the requisite service period, which is the vesting period. See Note 9 for additional information and the assumptions we use to calculate the fair value of share-based employee compensation. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. The ASU amends guidance for the presentation of comprehensive income. The amended guidance requires an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate but consecutive statements. The previous option to report other comprehensive income and its components in the statement of shareholders’ equity has been eliminated. Although the new guidance changes the presentation of comprehensive income, there are no changes to the components recognized in net income or other comprehensive income under existing guidance. In the first quarter of fiscal 2013, we revised our presentation of comprehensive income to conform to the guidance in this ASU. In September 2011, the FASB issued ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment. Under this new standard, entities testing goodwill for impairment now have an option of performing a qualitative assessment before having to calculate the fair value of a reporting unit. If an entity determines, on the basis of qualitative factors, it is more-likely-than-not the fair value of the reporting unit is less than the carrying amount, the existing quantitative impairment test is required. Otherwise, no further impairment testing is required. This ASU is effective for impairment tests after April 29, 2012. The adoption of this standard did not have an impact on our consolidated results of operations or financial condition, as this ASU impacts only the analysis performed. In July 2012, the FASB issued ASU 2012-02, Intangibles - Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. The amended guidance gives entities the option to perform a qualitative impairment assessment to determine whether it is more-likely-than-not an indefinite-lived intangible asset is impaired. An entity must identify and evaluate changes in economic, industry and entity-specific events and circumstances affecting the significant inputs used to determine the fair value of an indefinite-lived intangible asset and whether it is more-likely-than-not the fair value exceeds its carrying amount. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The adoption of this amended guidance is not expected to have an impact on our consolidated results of operations or financial condition, as the ASU impacts only the analysis to be performed. |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
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Apr. 27, 2013
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Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS |
(1)Translation adjustment on foreign subsidiary balances. (2)Write-off of uncollected accounts, net of collections. (3)Obsolete and excess inventory disposals |
Nature of Business and Summary of Significant Accounting Policies - Advertising Costs (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
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Apr. 27, 2013
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Apr. 28, 2012
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Apr. 30, 2011
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Advertising expense | $ 1,584 | $ 1,843 | $ 1,895 |
Shareholders' Equity and Share-Based Compensation (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 27, 2013
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Nonvested Restricted Stock and Restricted Stock Units Activity | A summary of nonvested restricted stock and restricted stock units for the years ended April 27, 2013, April 28, 2012 and April 30, 2011 is as follows:
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Schedule of Stock Option Award Activity | A summary of stock option activity under all stock option plans during the fiscal year ended April 27, 2013 is as follows:
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Schedule of Weighted-Average Assumptions | The following table provides the weighted-average fair value of options granted and the related assumptions used in the Black-Scholes model:
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Schedule of Share-Based Compensation Expense by Award Type | The following table presents a summary of the share-based compensation expense by equity type as follows:
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Schedule of Share-Based Compensation Expense | A summary of the share-based compensation expenses for stock options, restricted stock, restricted stock units and shares issued under the ESPP for the fiscal years ended April 27, 2013, April 28, 2012 and April 30, 2011 is as follows:
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Quarterly Financial Data (Unaudited) (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 27, 2013
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Data | The following table presents summarized quarterly financial data:
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Segment Reporting - Net Sales and Long-lived Assets by Geographic Area (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 27, 2013
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Jan. 26, 2013
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Oct. 27, 2012
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Jul. 28, 2012
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Apr. 28, 2012
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Jan. 28, 2012
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Oct. 29, 2011
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Jul. 30, 2011
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Apr. 27, 2013
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Apr. 28, 2012
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Apr. 30, 2011
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Net sales: | |||||||||||
United States | $ 430,242 | $ 405,479 | $ 368,979 | ||||||||
Outside U.S. | 88,080 | 84,047 | 72,697 | ||||||||
Net sales | 124,482 | 111,050 | 149,871 | 132,919 | 111,994 | 122,925 | 135,910 | 118,698 | 518,322 | 489,526 | 441,676 |
Long-lived assets: | |||||||||||
United States | 60,060 | 66,350 | 60,060 | 66,350 | 68,034 | ||||||
Outside U.S. | 1,565 | 2,046 | 1,565 | 2,046 | 1,832 | ||||||
Long-lived assets | $ 61,625 | $ 68,396 | $ 61,625 | $ 68,396 | $ 69,866 |
Long-Lived Assets (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 27, 2013
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The changes in the carrying amount of goodwill related to each reportable segment for the fiscal year ended April 27, 2013 were as follows:
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Schedule of Definite-Lived Intangible and Indefinite-Lived Intangible Assets | The following table sets forth the gross carrying amount and accumulated amortization of intangible assets by major intangible class as of April 27, 2013 and April 28, 2012:
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Income Taxes - Effective Income Tax (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Apr. 27, 2013
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Apr. 28, 2012
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Apr. 30, 2011
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Income Tax Disclosure [Abstract] | |||
Computed income tax expense at federal statutory rate | $ 10,825 | $ 4,052 | $ 7,732 |
State taxes, net of federal benefit | 684 | 497 | 1,107 |
Research and development tax credit | (1,804) | (1,004) | (981) |
Meals and entertainment | 308 | 375 | 299 |
Stock compensation | 466 | 842 | 959 |
Dividends paid to retirement plan | (616) | (522) | 0 |
Domestic production activities deduction | (976) | (270) | (607) |
Change in foreign deferred rates | 0 | (249) | 0 |
Reversal of valuation allowance | 0 | (364) | 0 |
Other, net | (737) | (269) | (612) |
Effective income tax expense | $ 8,150 | $ 3,088 | $ 7,897 |
Shareholders' Equity and Share-Based Compensation - Narrative (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
12 Months Ended | 12 Months Ended | |||||||||||||
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Apr. 27, 2013
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Apr. 28, 2012
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Apr. 30, 2011
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Apr. 27, 2013
Stock Options
|
Apr. 27, 2013
Restricted Stock
|
Apr. 28, 2012
Restricted Stock
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Apr. 30, 2011
Restricted Stock
|
Apr. 27, 2013
Restricted Stock and Restricted Stock Units
|
Apr. 27, 2013
In The Money Options
|
Apr. 27, 2013
Employee Stock
|
Apr. 27, 2013
Independent Directors
Stock Options
|
May 01, 2010
Independent Directors
Stock Options
|
Apr. 27, 2013
Independent Directors
Restricted Stock
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Apr. 27, 2013
Common Stock
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Apr. 27, 2013
Undesignated Stock
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Shares authorized | 120,000,000 | 115,000,000 | 5,000,000 | ||||||||||||
Common purchase right per common stock | 1 | ||||||||||||||
Conversion ratio for rights to common stock | 0.10 | ||||||||||||||
Share price | $ 100 | ||||||||||||||
Days following ownership announcement option one | 10 days | ||||||||||||||
Percentage of ownership | 15.00% | ||||||||||||||
Days following ownership announcement, option two | 10 days | ||||||||||||||
Award life | 10 years | 7 years | |||||||||||||
Vesting period | 5 years | 5 years | 1 year | 1 year | 3 years | 1 year | |||||||||
Shares available for grant | 798,000 | 2,500,000 | |||||||||||||
Unrecognized compensation costs | $ 2,080 | ||||||||||||||
Weighted-average period for unrecognized costs | 3 years 1 month 6 days | 3 years 3 months 11 days | |||||||||||||
Fair value | 666 | 511 | 288 | ||||||||||||
Exercise price (usd per share) | $ 9.57 | ||||||||||||||
Exercisable at end of year, Shares | 2,301,000 | 917,000 | |||||||||||||
Exercised, aggregate intrinsic value | 562 | 624 | 1,945 | ||||||||||||
Fair value of vested options | 1,898 | 2,497 | 2,628 | ||||||||||||
Requisite service period | 6 months | ||||||||||||||
Employee maximum contribution percentage | 15.00% | ||||||||||||||
Percentage of purchase price at the lower of the fair market value | 85.00% | ||||||||||||||
Purchase discount percentage | 15.00% | ||||||||||||||
Stock issued for ESPP | 214,000 | 160,000 | 205,000 | ||||||||||||
Shares reserved for future issuance | 1,185,000 | ||||||||||||||
Nonvested unrecognized compensation expense | 5,379 | ||||||||||||||
Proceeds from exercise of stock options | 1,316 | 547 | 1,352 | ||||||||||||
Tax benefit from share based payments | $ 346 | $ 325 | $ 239 |
Employee Benefit Plans - (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jan. 29, 2011
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Apr. 27, 2013
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Apr. 28, 2012
|
Apr. 30, 2011
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Compensation and Retirement Disclosure [Abstract] | ||||
Percentage of matching contribution | 50.00% | 25.00% | ||
Maximum annual contribution percentage | 6.00% | |||
Award requisite service period | 1 year | |||
Minimum age attained for award | 21 years | |||
Minimum hours worked | 1000 hours | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Contributions | $ 1,713 | $ 1,618 | $ 905 | |
Officers and Former Director
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Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Contributions | 23 | 23 | 22 | |
Contribution plan, accrued interest | $ 629 | $ 625 | ||
Lump sum distribution period, option one | 5 years | |||
Lump sum distribution period, option two | 10 years |
Quarterly Financial Data (Unaudited)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 27, 2013
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) The following table presents summarized quarterly financial data:
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Nature of Business and Summary of Significant Accounting Policies
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 27, 2013
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature of Business and Summary of Significant Accounting Policies | Nature of Business and Summary of Significant Accounting Policies Nature of business: Daktronics, Inc. and its subsidiaries are engaged principally in the design, manufacture and sale of a wide range of electronic display systems and related products which are sold in a variety of markets throughout the world and the rendering of related maintenance and professional services. Our products are designed primarily to inform and entertain people through the communication of content. Fiscal year: We operate on a 52 to 53 week fiscal year, with our fiscal year ending on the Saturday closest to April 30 of each year. When April 30 falls on a Wednesday, the fiscal year ends on the preceding Saturday. The fiscal years ended April 27, 2013, April 28, 2012 and April 30, 2011 each consisted of 52 weeks. Within each fiscal year, each quarter is comprised of 13 week periods following the beginning of each fiscal year. In each 53 week year, each of the last three quarters is comprised of a 13 week period, and an additional week is added to the first quarter of that fiscal year. Principles of consolidation: The consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries – Daktronics France SARL; Daktronics Shanghai, Ltd.; Daktronics GmbH; Daktronics UK, Ltd.; Daktronics HK Limited; Daktronics International Limited; Daktronics Canada, Inc.; Daktronics Beijing, Ltd.; Daktronics Australia Pty Ltd.; Daktronics Installation; Daktronics Japan, Inc.; Daktronics Brazil, Ltda.; Daktronics Singapore Pte. Ltd., and Daktronics Spain S.L. Intercompany balances and transactions have been eliminated in consolidation. Investments in affiliates over which we have significant influence are accounted for by the equity method. As of April 27, 2013 and April 28, 2012, we did not have any investments accounted for by the equity method. Prior to April 30, 2011, as explained in Note 16, we had various investments accounted for under the equity method. Investments in affiliates as to which we do not have the ability to exert significant influence over their operating and financing activities are accounted for under the cost method of accounting. We have evaluated our relationships with affiliates and have determined that these entities are either not variable interest entities or, in the case of variable interest entities, we are not the primary beneficiary and therefore they are not required to be consolidated in our consolidated financial statements. The equity method requires us to report our share of losses up to our equity investment amount, including any financial support made or committed to. At such time the equity investment is reduced to zero, we recognize losses to the extent of and as an adjustment to the other investments in the affiliate in order of seniority or priority in liquidation. Our proportional share of the respective affiliates' earnings or losses is included in other (expense) income in our consolidated statements of operations. As of May 1, 2010, we had a variable interest in Outcast Media International, Inc. (“Outcast”). During fiscal 2011, it became a cost method investee and ceased being treated as a variable interest entity. This occurred as a result of a reorganization of Outcast in connection with a sale of most of its assets. The results of the variable interest analysis we completed prior to fiscal 2011 indicated that we were not the primary beneficiary of this variable interest entity and, as a result, we were not required to consolidate it. Our analysis included reviewing the amount of financial support, equity risk, and board influence. As of April 27, 2013, our interest in Outcast consisted of a seven percent equity interest. During fiscal 2010, we had written down our equity investment to zero. During fiscal 2011, as described in Note 16, we exchanged certain debt and other obligations related to Outcast for a note from a third party related to Outcast. The aggregate amount of investments accounted for under the cost method was $106 at April 27, 2013 and April 28, 2012. The fair value of these investments has not been estimated, as there have not been any identified events or changes in circumstances that may have a significant adverse effect on their fair value, and it is not practical to estimate their fair value. Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near-term relate to the determination of the estimated total costs on construction-type contracts, estimated costs to be incurred for product warranties, excess and obsolete inventory, the reserve for doubtful accounts, share-based compensation, goodwill impairment and income taxes. Changes in estimates are reflected in the periods in which they become known. Cash and cash equivalents: All highly liquid investments with maturities of three months or less at the date of purchase are considered to be cash equivalents and consist primarily of government repurchase agreements, savings accounts and money market accounts that are carried at cost, which approximates fair value. We maintain our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. We have not experienced any losses in such accounts. Restricted cash: Restricted cash consists of deposits to secure bank guarantees issued by our foreign subsidiaries. Inventories: Inventories are stated at the lower of cost (first-in, first-out method) or market. Market is determined on the basis of estimated net realizable values. Revenue recognition: Net sales are reported net of estimated sales returns and exclude sales taxes. We estimate our sales returns reserve based on historical return rates and analysis of specific accounts. Our sales returns reserve was $73 and $63 at April 27, 2013 and April 28, 2012, respectively. Long-term construction-type contracts: Earnings on construction-type contracts are recognized on the percentage-of-completion method, measured by the percentage of costs incurred to date to estimated total costs for each contract. Contract costs include all direct material and labor costs and those indirect costs related to contract performance. Indirect costs include charges for such items as facilities, engineering, and project management. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are probable and capable of being estimated. We combine contracts for accounting purposes when they are negotiated as a package with an overall profit margin objective, essentially represent an agreement to do a single project for a customer, involve interrelated construction activities, and are performed concurrently or sequentially. When a group of contracts is combined, revenue and profit are recognized uniformly over the performance of the combined projects. We segment revenues in accordance with contract segmenting criteria in Accounting Standards Codification (“ASC”) 650-35, Construction-Type and Production-Type Contracts. Equipment other than construction-type contracts: We recognize revenue on equipment sales, other than construction-type contracts, when title passes, which is usually upon shipment and then only if the terms of the arrangement are fixed and determinable and collectability is reasonably assured. We record estimated sales returns and discounts as a reduction of net sales in the same period revenue is recognized. Product maintenance: In connection with the sale of our products, we also occasionally sell separately priced extended warranties and product maintenance contracts. The revenue related to such contracts is deferred and recognized ratably as net sales over the terms of the contracts, which vary up to 10 years. We record unrealized revenue in deferred revenue (billed or collected) in the liability section of the balance sheet. Deferred revenue (billed or collected) excludes unrealized revenue from contractual obligations to be billed by us in future periods. Services: Revenues generated by us for services, such as event support, control room design, on-site training, equipment service and technical support of our equipment, are recognized as net sales when the services are performed. Net sales from services and product maintenance approximated 9.0 percent, 9.0 percent and 9.4 percent of net sales for the fiscal years ended April 27, 2013, April 28, 2012 and April 30, 2011, respectively. Multiple-element arrangements: We generate revenue from the sale of equipment and related services, including customization, installation and maintenance services. In these limited cases, we provide some or all of such equipment and services to our customers under the terms of a single multiple-element sales arrangement. These arrangements typically involve the sale of equipment bundled with some or all of these services, but they may also involve instances in which we have contracted to deliver multiple pieces of equipment over time rather than at a single point in time. When a sales arrangement involves multiple elements, the items included in the arrangement (deliverables) are evaluated pursuant to ASC 605-25, Revenue Arrangements with Multiple Deliverables and ASC 605-35, to determine whether they represent separate units of accounting. We perform this evaluation at the inception of an arrangement and as we deliver each item in the arrangement. We first consider the separation criteria of ASC 605-35. Deliverables not within the scope of ASC 605-35 are evaluated for separation under ASC 605-25. For those elements falling under the guidance of ASC 605-25, we generally account for a deliverable (or a group of deliverables) separately if the delivered item(s) has standalone value to the customer and if we have given the customer a general right of return relative to the delivered item(s) and delivery or performance of the undelivered item(s) or service(s) is probable and substantially in our control. When items included in a multiple-element arrangement represent separate units of accounting, we allocate the arrangement consideration to the individual items based on their relative fair values. The amount of arrangement consideration allocated to the delivered item(s) is limited to the amount not contingent on us delivering additional products or services. Once we have determined the amount, if any, of arrangement consideration allocable to the delivered item(s), we apply the applicable revenue recognition policy to determine when and by which method such amount may be recognized as revenue. We generally determine if objective and reliable evidence of fair value for the items included in a multiple-element arrangement exists based on whether we have vendor-specific objective evidence ("VSOE") of the price for which we sell an item on a standalone basis. If we do not have VSOE for the item, we will use the price charged by a competitor selling a comparable product or service on a standalone basis to similarly situated customers, if available. If neither VSOE nor third party evidence is available, we use our best estimate of the selling price for that deliverable. Software: We typically sell our proprietary software bundled with our video displays and certain other products, but we also sell our software separately. Pursuant to ASC 985-605, Software Revenue Recognition, revenues from software license fees on sales, other than construction-type contracts, are recognized when persuasive evidence of an agreement exists, delivery of the product has occurred, the fee is fixed and determinable, and collection is probable. For sales of software included in construction-type contracts, the revenue is recognized under the percentage-of-completion method starting when all of these criteria have been met. Long-term receivables and advertising rights: We occasionally sell and install our products at facilities in exchange for the rights to sell or to retain future advertising revenues. For these transactions, we recognize revenue for the amount of the present value of the future advertising payments if enough advertising is sold to obtain normal margins on the contract and we record the related receivable in long-term receivables. We recognize imputed interest as earned. On those transactions where we have not sold the advertising for the full value of the equipment at normal margins, we record the related cost of equipment as advertising rights. Revenue to the extent of the present value of the advertising payments is recognized in long-term receivables when it becomes fixed and determinable under the provisions of the applicable advertising contracts. At the time the revenue is recognized, costs of the equipment are recognized based on an estimate of overall margin expected. Any remaining costs are recorded in the costs of advertising rights. The cost of advertising rights, net of amortization, was $53 and $446 as of April 27, 2013 and April 28, 2012, respectively. Property and equipment: Property and equipment is stated at cost and depreciated principally on the straight-line method over the following estimated useful lives:
Leasehold improvements are depreciated over the lesser of the useful life of the asset or the term of the lease. Our depreciation expense was $15,379, $17,273 and $19,354 for the fiscal years ended April 27, 2013, April 28, 2012 and April 30, 2011, respectively. Long-Lived Assets: Long-lived assets other than goodwill and indefinite-lived intangible assets, as described in Note 4, which are separately tested for impairment, are evaluated for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. When evaluating long-lived assets for potential impairment, we first compare the carrying value of the asset to the asset's estimated future cash flows (undiscounted and without interest charges). If the estimated future cash flows are less than the carrying value of the asset, we calculate an impairment loss. The impairment loss calculation compares the carrying value of the asset to the asset's estimated fair value. We recognize an impairment loss if the amount of the asset's carrying value exceeds the asset's estimated fair value. If we recognize an impairment loss, the adjusted carrying amount of the asset becomes its new cost basis. For a depreciable long-lived asset, the new cost basis will be depreciated (amortized) over the remaining useful life of that asset. Our impairment loss calculations contain uncertainties because they require management to make assumptions and to apply judgment to estimate future cash flows and asset fair values, including forecasting useful lives of the assets and selecting the discount rate that reflects the risk inherent in future cash flows. Software costs: We capitalize certain costs incurred in connection with developing or obtaining internal-use software. Capitalized software costs are included in property and equipment on our consolidated balance sheets. Software costs that do not meet capitalization criteria are expensed immediately. Insurance: We are self-insured for certain losses related to health and liability claims and workers’ compensation, although we obtain third-party insurance to limit our exposure to these claims. We estimate our self-insured liabilities using a number of factors, including historical claims experience. Our self-insurance liability was $1,843 and $2,075 at April 27, 2013 and April 28, 2012, respectively, and is included in accrued expenses in our consolidated balance sheets. Foreign currency translation: Our foreign subsidiaries use the local currency of their respective countries as their functional currency. The assets and liabilities of foreign operations are generally translated at the exchange rates in effect at the balance sheet date. The operating results of foreign operations are translated at weighted average exchange rates. The related translation gains or losses are reported as a separate component of shareholders’ equity in accumulated other comprehensive (loss) income. Income taxes: We account for income taxes under ASC 740, Income Taxes, which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events included in our financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. ASC 740 requires the consideration of a valuation allowance for deferred tax assets if it is “more likely than not” some component or all of the benefits of deferred tax assets will not be realized. Tax rate changes are reflected in income during the period such changes are enacted. We have benefited from a tax holiday in China that expired in fiscal 2012. In fiscal 2012 and 2011, we realized a benefit of approximately $249 or $0.006 per share and $77 or $0.002 per share, respectively. Our income tax returns, like those of most companies, are periodically audited by U.S. federal, state and local and foreign tax authorities. These audits include questions regarding our tax filing positions, including the timing and amount of deductions and the allocation of income among various tax jurisdictions. At any one time, multiple tax years are subject to audit by the various tax authorities. In evaluating the tax benefits associated with our various tax filing positions, we record a tax benefit for uncertain tax positions using the highest cumulative tax benefit that is more likely than not to be realized. A number of years may elapse before a particular matter for which we have established a liability is audited and effectively settled. We adjust our liability for unrecognized tax benefits in the period in which we determine the issue is effectively settled with the tax authorities, the statute of limitations expires for the relevant taxing authority to examine the tax position, or when more information becomes available. We include our liability for unrecognized tax benefits, including accrued penalties and interest, in income taxes payable on our consolidated balance sheets and in income tax expense in our consolidated statements of operations. Comprehensive (loss) income: We follow the provisions of ASC 220, Reporting Comprehensive Income, which establishes standards for reporting and displaying comprehensive income and its components. Comprehensive (loss) income reflects the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. For us, comprehensive (loss) income represents net income (loss) adjusted for foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities. The foreign currency translation adjustment included in comprehensive (loss) income has not been tax affected, as the investments in foreign affiliates are deemed to be permanent. In accordance with ASC 220 and ASU 2011-05, we disclose comprehensive (loss) income on a separate consolidated statement of comprehensive income. Product design and development: All expenses related to product design and development are charged to operations as incurred. Our product development activities include the enhancement of existing products and the development of new products. Advertising costs: We expense advertising costs as incurred. Advertising expenses were $1,584, $1,843 and $1,895 for fiscal years 2013, 2012 and 2011, respectively. Shipping and handling costs: Shipping and handling costs collected from our customers in connection with our sales are recorded as revenue. We record shipping and handling costs as a component of cost of sales at the time the product is shipped. Earnings per share (“EPS”): Basic EPS is computed by dividing income attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution which may occur if securities or other obligations to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock which share in our earnings. The following is a reconciliation of the income and common stock share amounts used in the calculation of basic and diluted EPS for the fiscal years ended April 27, 2013, April 28, 2012 and April 30, 2011:
Options outstanding to purchase 2,672, 1,611 and 1,655 shares of common stock with a weighted average exercise price of $15.09, $19.17 and $19.23 per share during the fiscal years ended April 27, 2013, April 28, 2012 and April 30, 2011, respectively, were not included in the computation of diluted earnings per share because the weighted average exercise price of those instruments exceeded the average market price of the common shares during the year. Share-based compensation: We account for share-based compensation in accordance with ASC 718, Compensation-Stock Compensation. Under the fair value recognition provisions of ASC 718, we measure share-based compensation cost at the grant date based on the fair value of the award and recognize the compensation expense over the requisite service period, which is the vesting period. See Note 9 for additional information and the assumptions we use to calculate the fair value of share-based employee compensation. Recent Accounting Pronouncements In June 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. The ASU amends guidance for the presentation of comprehensive income. The amended guidance requires an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate but consecutive statements. The previous option to report other comprehensive income and its components in the statement of shareholders’ equity has been eliminated. Although the new guidance changes the presentation of comprehensive income, there are no changes to the components recognized in net income or other comprehensive income under existing guidance. In the first quarter of fiscal 2013, we revised our presentation of comprehensive income to conform to the guidance in this ASU. In September 2011, the FASB issued ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment. Under this new standard, entities testing goodwill for impairment now have an option of performing a qualitative assessment before having to calculate the fair value of a reporting unit. If an entity determines, on the basis of qualitative factors, it is more-likely-than-not the fair value of the reporting unit is less than the carrying amount, the existing quantitative impairment test is required. Otherwise, no further impairment testing is required. This ASU is effective for impairment tests after April 29, 2012. The adoption of this standard did not have an impact on our consolidated results of operations or financial condition, as this ASU impacts only the analysis performed. In July 2012, the FASB issued ASU 2012-02, Intangibles - Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. The amended guidance gives entities the option to perform a qualitative impairment assessment to determine whether it is more-likely-than-not an indefinite-lived intangible asset is impaired. An entity must identify and evaluate changes in economic, industry and entity-specific events and circumstances affecting the significant inputs used to determine the fair value of an indefinite-lived intangible asset and whether it is more-likely-than-not the fair value exceeds its carrying amount. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The adoption of this amended guidance is not expected to have an impact on our consolidated results of operations or financial condition, as the ASU impacts only the analysis to be performed. |
Long-Lived Assets
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Lived Assets | Long-Lived Assets Goodwill and other intangible assets: We account for goodwill and intangible assets in accordance with ASC 350, Goodwill and Other Intangible Assets. Under these provisions, goodwill is not amortized but is tested for impairment on at least an annual basis. Impairment testing is required more often than annually if an event or circumstance indicates an impairment or a decline in value may have occurred. Such circumstances could include, but are not limited to, a worsening trend of orders and sales without a corresponding way to preserve future cash flows or a significant decline in our stock price. In conducting our impairment testing, we compare the fair value of each of our business units (reporting unit) to the related carrying value. If the fair value of a reporting unit exceeds its carrying value, goodwill is not impaired. If the carrying value of a reporting unit exceeds its fair value, an impairment loss is measured and recognized. We utilize an income approach to estimate the fair value of each reporting unit. We selected this method because we believe it most appropriately measures our income producing assets. We considered using the market approach and cost approach, but concluded they were not appropriate in valuing our reporting units given the lack of relevant and available market comparisons. The income approach is based on the projected cash flows, which are discounted to their present value using discount rates which consider the timing and risk of the forecasted cash flows. We believe that this approach is appropriate because it provides a fair value estimate based upon the reporting units’ expected long-term operating cash performance. This approach also mitigates the impact of the cyclical trends occurring in the industry. Fair value is estimated using internally-developed forecasts and assumptions. The discount rate used is the average estimated value of a market participant’s cost of capital and debt, derived using customary market metrics. Other significant assumptions include terminal value margin rates, future capital expenditures, and changes in future working capital requirements. We also compare and reconcile our overall fair value to our market capitalization. Although there are inherent uncertainties related to the assumptions used and to our application of these assumptions to this analysis, we believe the income approach provides a reasonable estimate of the fair value of our reporting units. The foregoing assumptions to a large degree were consistent with our long-term performance, with limited exceptions. We believe our future investments for capital expenditures as a percent of revenue will remain similar to the historical rates as a percentage of sales in future years with investments related to equipment replacements, new product line manufacturing equipment needs, and to keep our information technology infrastructure robust, and we believe long-term receivables will decrease as we grow. We also have assumed through the recent economic downturn, our markets have not contracted for the long term; however, it may be a number of years before they fully recover. These assumptions could deviate materially from actual results. We perform an analysis of goodwill on an annual basis. We completed this annual analysis during our third quarter of each fiscal year, based on the goodwill amount as of the first business day of our third quarter in fiscal 2013, 2012, and 2011. The result of our analysis indicated that no goodwill impairment existed for each fiscal year. The changes in the carrying amount of goodwill related to each reportable segment for the fiscal year ended April 27, 2013 were as follows:
As required by ASC 350, intangibles with finite lives are amortized. We evaluate indefinite lived assets for impairment annually and whenever events or changes in circumstances indicate their carrying value may not be recoverable. The net value of intangible assets is shown on our consolidated balance sheets. Estimated amortization expense based on intangibles as of April 27, 2013 is $228 for each of the fiscal years 2014 through 2016 and $95 for fiscal 2017. The following table sets forth the gross carrying amount and accumulated amortization of intangible assets by major intangible class as of April 27, 2013 and April 28, 2012:
Impairment of long-lived assets: We recorded a pretax asset impairment charge of $64, $538 and $355 for the fiscal years ended April 27, 2013, April 28, 2012 and April 30, 2011, respectively for other long-lived assets including property and equipment. The impairment charges related to technology or equipment obsoleted due to technology improvements or to custom demo equipment with no re-sale value. Impairment charges during fiscal 2013 were included primarily in selling expense. |
Income Taxes - Pretax Income Domestic and Foreign (Details) (USD $)
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Apr. 28, 2012
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Apr. 30, 2011
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Income Tax Disclosure [Abstract] | |||
Domestic | $ 27,667 | $ 10,052 | $ 17,892 |
Foreign | 3,262 | 1,525 | 4,249 |
Income (loss) before income taxes | $ 30,929 | $ 11,577 | $ 22,141 |
Segment Reporting
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Segment Reporting | Segment Reporting We have organized our business into five segments which meet the definition of reportable segments under ASC 280-10, Segment Reporting: Commercial, Live Events, Schools and Theatres, Transportation, and the International business unit. These segments are based on the type of customer and geography. Our Commercial business unit primarily consists of sales of our video, Galaxy® and Fuelight™ product lines to resellers (primarily sign companies), outdoor advertisers, national retailers, quick-serve restaurants, casinos and petroleum retailers. Our Live Events business unit primarily consists of sales of integrated scoring and video display systems to college and professional sports facilities and convention centers and sales of our mobile display technology to video rental organizations and other live events type venues. Our Schools and Theatres business unit primarily consists of sales of scoring systems, Galaxy® displays and video display systems to primary and secondary education facilities and sales of our Vortek® automated rigging systems for theatre applications. Our Transportation business unit primarily consists of sales of our Vanguard® and Galaxy® product lines to governmental transportation departments, airlines and other transportation related customers. Our International business unit consists of sales of all product lines outside the United States and Canada. Segment reports present results through contribution margin, which is comprised of gross profit less selling costs. Segment profit excludes general and administration expense, product development expense, interest income and expense, non-operating income and income tax expense. Assets are not allocated to the segments. Depreciation and amortization, excluding the portion related to non-allocated costs, are allocated to each segment based on various financial measures. In general, segments follow the same accounting policies as those described in Note 1. Unabsorbed costs of domestic field sales and services infrastructure, including most field administrative staff, are allocated to the Commercial, Live Events, Transportation, and Schools and Theatres business units based on cost of sales. Shared manufacturing, building and utilities, and procurement costs are allocated based on payroll dollars, square footage and various other financial measures. We do not maintain information on sales by products; therefore, disclosure of such information is not practical. The following table sets forth certain financial information for each of our five operating segments for the periods indicated:
No single geographic area comprises a material amount of net sales or long-lived assets net of accumulated depreciation other than the United States. The following table presents information about net sales and long-lived assets in the United States and elsewhere:
We have numerous customers worldwide for sales of our products and services; therefore, we are not economically dependent on a limited number of customers for the sale of our products and services. |
Nature of Business and Summary of Significant Accounting Policies - Principles of Consolidation (Details) (Outcast, USD $)
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Apr. 27, 2013
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Apr. 30, 2011
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Noncontrolling Interest [Line Items] | |||
Ownership percentage | 7.00% | 7.00% | |
Equity Method Investments | $ 0 | ||
Cost method investee, carrying balance | $ 106,000 | $ 106,000 |
Nature of Business and Summary of Significant Accounting Policies (Tables)
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Apr. 27, 2013
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | Property and equipment is stated at cost and depreciated principally on the straight-line method over the following estimated useful lives:
Property and equipment consisted of the following:
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Schedule of Earnings Per Share Reconciliation | The following is a reconciliation of the income and common stock share amounts used in the calculation of basic and diluted EPS for the fiscal years ended April 27, 2013, April 28, 2012 and April 30, 2011:
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Selected Financial Statement Data (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 27, 2013
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Selected Financial Statement Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories | Inventories consisted of the following:
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Schedule of Property and Equipment | Property and equipment is stated at cost and depreciated principally on the straight-line method over the following estimated useful lives:
Property and equipment consisted of the following:
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Schedule of Accrued Expenses | Accrued expenses consisted of the following:
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Schedule of Other (Expense) Income | Other (expense) income, net consisted of the following:
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Income Taxes - Components of Income Tax Expense (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
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Apr. 27, 2013
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Apr. 28, 2012
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Apr. 30, 2011
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Current: | |||
Federal | $ 9,517 | $ 2,266 | $ 4,879 |
State | 2,219 | 577 | 1,227 |
Foreign | 754 | 313 | 939 |
Deferred taxes | (4,340) | (68) | 852 |
Income tax expense | $ 8,150 | $ 3,088 | $ 7,897 |
Fair Value Measurement (Tables)
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Apr. 27, 2013
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value | The following table sets forth by Level within the fair value hierarchy our financial assets and liabilities accounted for at fair value on a recurring basis at April 27, 2013 and April 28, 2012 according to the valuation techniques we used to determine their fair values. There have been no transfers of assets or liabilities among the fair value hierarchies presented.
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Income Taxes - Narrative (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
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Apr. 27, 2013
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Apr. 28, 2012
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Apr. 30, 2011
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Income Tax Disclosure [Abstract] | |||
Research tax credits | $ 1,804 | $ 1,004 | $ 981 |
Change in foreign deferred rates | 0 | 249 | 0 |
Interest and penalties | 10 | (1) | (16) |
Accrued interest or penalties | $ 11 | $ 24 |
Selected Financial Statement Data - Inventory (Details) (USD $)
In Thousands, unless otherwise specified |
Apr. 27, 2013
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Apr. 28, 2012
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Selected Financial Statement Data [Abstract] | ||
Raw materials | $ 20,979 | $ 24,880 |
Work-in-process | 8,523 | 10,581 |
Finished goods | 19,543 | 19,463 |
Inventories | 49,045 | 54,924 |
Inventory allowance | $ 3,286 | $ 2,851 |