South Dakota | 0-23246 | 46-0306862 |
(State or Other Jurisdiction of | (Commission | (I.R.S. Employer |
Incorporation or Organization) | File Number) | Identification Number) |
DAKTRONICS, INC. | ||
By: /s/ Sheila M. Anderson | ||
Sheila M. Anderson, Chief Financial Officer | ||
Date: | February 20, 2018 | |
For more information contact: | ||
INVESTOR RELATIONS: | ||
Sheila Anderson, Chief Financial Officer | ||
(605) 692-0200 | ||
Investor@daktronics.com | ||
Daktronics, Inc. and Subsidiaries Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
January 27, 2018 | January 28, 2017 | January 27, 2018 | January 28, 2017 | |||||||||||||
Net sales | $ | 130,316 | $ | 115,719 | $ | 472,353 | $ | 442,857 | ||||||||
Cost of goods sold | 101,749 | 92,403 | 356,536 | 336,166 | ||||||||||||
Gross profit | 28,567 | 23,316 | 115,817 | 106,691 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling expense | 15,271 | 14,678 | 45,560 | 45,828 | ||||||||||||
General and administrative | 8,335 | 8,599 | 26,138 | 26,007 | ||||||||||||
Product design and development | 8,299 | 6,973 | 26,294 | 21,142 | ||||||||||||
31,905 | 30,250 | 97,992 | 92,977 | |||||||||||||
Operating (loss) income | (3,338 | ) | (6,934 | ) | 17,825 | 13,714 | ||||||||||
Nonoperating income (expense): | ||||||||||||||||
Interest income | 158 | 183 | 520 | 559 | ||||||||||||
Interest expense | (40 | ) | (56 | ) | (173 | ) | (174 | ) | ||||||||
Other (expense) income, net | (487 | ) | (305 | ) | (429 | ) | (250 | ) | ||||||||
(Loss) income before income taxes | (3,707 | ) | (7,112 | ) | 17,743 | 13,849 | ||||||||||
Income tax expense (benefit) | 2,482 | (1,985 | ) | 8,371 | 4,416 | |||||||||||
Net (loss) income | $ | (6,189 | ) | $ | (5,127 | ) | $ | 9,372 | $ | 9,433 | ||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 44,518 | 44,102 | 44,403 | 44,071 | ||||||||||||
Diluted | 44,518 | 44,102 | 44,798 | 44,206 | ||||||||||||
(Loss) earnings per share: | ||||||||||||||||
Basic | $ | (0.14 | ) | $ | (0.12 | ) | $ | 0.21 | $ | 0.21 | ||||||
Diluted | $ | (0.14 | ) | $ | (0.12 | ) | $ | 0.21 | $ | 0.21 | ||||||
Cash dividends declared per share | $ | 0.07 | $ | 0.07 | $ | 0.21 | $ | 0.24 |
Daktronics, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands) | |||||||
January 27, 2018 | April 29, 2017 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 49,042 | $ | 32,623 | |||
Restricted cash | 28 | 216 | |||||
Marketable securities | 23,937 | 32,713 | |||||
Accounts receivable, net | 76,104 | 78,846 | |||||
Inventories, net | 70,451 | 66,486 | |||||
Costs and estimated earnings in excess of billings | 32,449 | 36,403 | |||||
Current maturities of long-term receivables | 2,199 | 2,274 | |||||
Prepaid expenses and other assets | 7,333 | 7,553 | |||||
Income tax receivables | 2,726 | 611 | |||||
Total current assets | 264,269 | 257,725 | |||||
Long-term receivables, less current maturities | 1,948 | 2,616 | |||||
Goodwill | 8,469 | 7,812 | |||||
Intangibles, net | 4,174 | 4,705 | |||||
Investment in affiliates and other assets | 4,888 | 4,534 | |||||
Deferred income taxes | 7,983 | 11,292 | |||||
27,462 | 30,959 | ||||||
PROPERTY AND EQUIPMENT: | |||||||
Land | 2,172 | 2,099 | |||||
Buildings | 67,340 | 65,935 | |||||
Machinery and equipment | 88,143 | 84,189 | |||||
Office furniture and equipment | 5,799 | 5,604 | |||||
Computer software and hardware | 51,980 | 51,523 | |||||
Equipment held for rental | 287 | 374 | |||||
Demonstration equipment | 7,044 | 7,109 | |||||
Transportation equipment | 7,647 | 7,108 | |||||
230,412 | 223,941 | ||||||
Less accumulated depreciation | 166,117 | 157,192 | |||||
64,295 | 66,749 | ||||||
TOTAL ASSETS | $ | 356,026 | $ | 355,433 | |||
Daktronics, Inc. and Subsidiaries Consolidated Balance Sheets (continued) (in thousands) | |||||||
January 27, 2018 | April 29, 2017 | ||||||
(unaudited) | |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable | $ | 40,309 | $ | 51,499 | |||
Accrued expenses | 27,578 | 25,033 | |||||
Warranty obligations | 13,291 | 13,578 | |||||
Billings in excess of costs and estimated earnings | 14,424 | 10,897 | |||||
Customer deposits (billed or collected) | 10,288 | 14,498 | |||||
Deferred revenue (billed or collected) | 13,906 | 12,137 | |||||
Current portion of other long-term obligations | 1,000 | 1,409 | |||||
Income taxes payable | 532 | 1,544 | |||||
Total current liabilities | 121,328 | 130,595 | |||||
Long-term warranty obligations | 15,909 | 14,321 | |||||
Long-term deferred revenue (billed or collected) | 6,916 | 5,434 | |||||
Other long-term obligations | 2,795 | 2,848 | |||||
Long-term income tax payable | 3,679 | 3,113 | |||||
Deferred income taxes | 984 | 836 | |||||
Total long-term liabilities | 30,283 | 26,552 | |||||
TOTAL LIABILITIES | 151,611 | 157,147 | |||||
SHAREHOLDERS' EQUITY: | |||||||
Common stock | 54,725 | 52,530 | |||||
Additional paid-in capital | 39,671 | 38,004 | |||||
Retained earnings | 114,028 | 113,967 | |||||
Treasury stock, at cost | (1,834 | ) | (1,834 | ) | |||
Accumulated other comprehensive loss | (2,175 | ) | (4,381 | ) | |||
TOTAL SHAREHOLDERS' EQUITY | 204,415 | 198,286 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 356,026 | $ | 355,433 |
Daktronics, Inc. and Subsidiaries Consolidated Statements of Cash Flows (in thousands) (unaudited) | ||||||||
Nine Months Ended | ||||||||
January 27, 2018 | January 28, 2017 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 9,372 | $ | 9,433 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 13,335 | 13,941 | ||||||
Impairment of intangible assets | — | 830 | ||||||
(Gain) loss on sale of property, equipment and other assets | (1,211 | ) | 23 | |||||
Share-based compensation | 1,978 | 2,204 | ||||||
Equity in loss of affiliate | 401 | 78 | ||||||
Provision for doubtful accounts | (55 | ) | 898 | |||||
Deferred income taxes, net | 3,429 | (286 | ) | |||||
Change in operating assets and liabilities | (296 | ) | 18,266 | |||||
Net cash provided by operating activities | 26,953 | 45,387 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchases of property and equipment | (10,865 | ) | (6,709 | ) | ||||
Proceeds from sale of property, equipment and other assets | 2,107 | 166 | ||||||
Purchases of marketable securities | (5,211 | ) | (18,098 | ) | ||||
Proceeds from sales or maturities of marketable securities | 13,751 | 14,594 | ||||||
Purchases of equity investment | (1,027 | ) | (1,374 | ) | ||||
Net cash used in investing activities | (1,245 | ) | (11,421 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Payments on notes payable | — | (8 | ) | |||||
Proceeds from exercise of stock options | 514 | 343 | ||||||
Principal payments on long-term obligations | (1,036 | ) | (912 | ) | ||||
Dividends paid | (9,311 | ) | (10,566 | ) | ||||
Payments for common shares repurchased | — | (1,825 | ) | |||||
Tax payments related to RSU issuances | (311 | ) | (261 | ) | ||||
Net cash used in financing activities | (10,144 | ) | (13,229 | ) | ||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 667 | (680 | ) | |||||
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 16,231 | 20,057 | ||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH: | ||||||||
Beginning of period | 32,839 | 28,526 | ||||||
End of period | $ | 49,070 | $ | 48,583 | ||||
Daktronics, Inc. and Subsidiaries Net Sales and Orders by Business Unit (in thousands) (unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
January 27, 2018 | January 28, 2017 | Dollar Change | Percent Change | January 27, 2018 | January 28, 2017 | Dollar Change | Percent Change | ||||||||||||||||||||||
Net Sales: | |||||||||||||||||||||||||||||
Commercial | $ | 35,483 | $ | 36,165 | $ | (682 | ) | (1.9 | )% | $ | 102,723 | $ | 112,342 | $ | (9,619 | ) | (8.6 | )% | |||||||||||
Live Events | 45,167 | 41,036 | 4,131 | 10.1 | 191,432 | 157,032 | $ | 34,400 | 21.9 | % | |||||||||||||||||||
High School Park and Recreation | 11,463 | 12,653 | (1,190 | ) | (9.4 | ) | 69,602 | 68,977 | $ | 625 | 0.9 | % | |||||||||||||||||
Transportation | 11,189 | 9,130 | 2,059 | 22.6 | 46,577 | 39,517 | $ | 7,060 | 17.9 | % | |||||||||||||||||||
International | 27,014 | 16,735 | 10,279 | 61.4 | 62,019 | 64,989 | $ | (2,970 | ) | (4.6 | )% | ||||||||||||||||||
$ | 130,316 | $ | 115,719 | $ | 14,597 | 12.6 | % | $ | 472,353 | $ | 442,857 | $ | 29,496 | 6.7 | % | ||||||||||||||
Orders: | |||||||||||||||||||||||||||||
Commercial | $ | 28,745 | $ | 32,595 | $ | (3,850 | ) | (11.8 | )% | $ | 97,816 | $ | 114,326 | $ | (16,510 | ) | (14.4 | )% | |||||||||||
Live Events | 39,911 | 51,590 | (11,679 | ) | (22.6 | ) | 145,246 | 135,520 | $ | 9,726 | 7.2 | % | |||||||||||||||||
High School Park and Recreation | 13,451 | 14,178 | (727 | ) | (5.1 | ) | 60,368 | 61,055 | $ | (687 | ) | (1.1 | )% | ||||||||||||||||
Transportation | 14,641 | 19,621 | (4,980 | ) | (25.4 | ) | 38,155 | 46,290 | $ | (8,135 | ) | (17.6 | )% | ||||||||||||||||
International | 29,405 | 25,329 | 4,076 | 16.1 | 79,909 | 78,164 | $ | 1,745 | 2.2 | % | |||||||||||||||||||
$ | 126,153 | $ | 143,313 | $ | (17,160 | ) | (12.0 | )% | $ | 421,494 | $ | 435,355 | $ | (13,861 | ) | (3.2 | )% |
Reconciliation of Free Cash Flow* (in thousands) (unaudited) | |||||||
Nine Months Ended | |||||||
January 27, 2018 | January 28, 2017 | ||||||
Net cash provided by operating activities | $ | 26,953 | $ | 45,387 | |||
Purchases of property and equipment | (10,865 | ) | (6,709 | ) | |||
Proceeds from sales of property and equipment | 2,107 | 166 | |||||
Free cash flow | $ | 18,195 | $ | 38,844 |
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