Daktronics, Inc. Announces Second Quarter Fiscal 2013 Results
BROOKINGS, S.D., Nov. 20, 2012 (GLOBE NEWSWIRE) -- Daktronics, Inc. (Nasdaq:DAKT) today reported fiscal 2013 second quarter net sales of $149.9 million and net income of $11.5 million, or $0.27 per diluted share, compared to net sales of $135.9 million and net income of $4.0 million, or $0.09 per diluted share, for the second quarter of fiscal 2012. Fiscal 2013 second quarter orders were $110.3 million compared to $117.8 million for the second quarter of fiscal 2012. Backlog at the end of the fiscal 2013 second quarter was $128 million, compared with a backlog of $137 million a year earlier and $164 million at the end of the first quarter of fiscal 2013.
Net sales, net income and earnings per share for the six months ended October 27, 2012 were $282.8 million, $18.2 million and $0.43 per diluted share, respectively. This compares to $254.6 million, $7.3 million and $0.17 per diluted share, respectively, for the same period in fiscal 2012.
Free cash flow, defined as cash provided by operations, less net purchases of property and equipment, was $29.8 million for
the first six months of fiscal 2013, compared to $15.4 million for the same period in fiscal 2012. Cash and marketable securitie at the end of the second quarter of fiscal 2013 were $79.1 million.
"We went into the quarter with a strong backlog coming off a record order level in the first quarter. Our people did a great job executing and delivering against that backlog," said Jim Morgan, president and chief executive officer.
"The higher revenue levels helped us achieve higher gross profit margins as we realized better utilization across the
company. It is noteworthy that gross profit margins were improved in all of our business units for the quarter, which resulted in an overall gross profit margin improvement over the same quarter a year ago of more than five percentage points. This higher gross profit margin, in conjunction with our operating expenses remaining relatively flat, resulted in over 11 percent operating margins for the quarter and just under 10 percent year to date. Operating income in dollars was two and on-ehalf times that of the second quarter of fiscal 2012," continued Morgan.
● Orders in the Commercial business were down four percent compared to the second quarter of fiscal 2012. Billboard orders were down primarily due to timing of larger volume purchases. Several large orders anticipated to book within th quarter were pushed out, including a $5 million order that we received verbal confirmation of early in the quarter. We ar working through contractual details and expect it to book soon.
● Orders in the second quarter of fiscal 2013 for the Live Events business unit were down approximately 23 percent compared to the second quarter of fiscal 2012. The decrease in orders was the result of the normal variability of our business, competitive pressures in the marketplace, and the timing of orders getting booked. Significant orders booked in the quarter included video display systems for the football stadiums at the University of Wisconsin and the University of Washington that totaled over $8 million. Since the end of the quarter, we have been verbally awarded an order with a major arena in excess of $5 million.
● Orders in the Schools and Theatres business unit were up approximately seven percent for the second quarter of fiscal
2013, compared to the same period in fiscal 2012. The improvement during fiscal 2013 is in part due to schools demonstrating more willingness this year than in fiscal 2012 regarding moving forward with projects. We are also continuing to see increasing interest in larger video display systems for high schools.
● Orders in the Transportation business were down 39 percent primarily as a result of the normal variability of our business and the timing of orders. The first $6 million commitment related to the previously announced $20 million procurement contract with the New Jersey Turnpike Authority, which we had projected to book in the second quarter is now expected to book in the third quarter. We have also been given a letter of intent for a $3 million project with one of our ongoing customers that we expect to book as an order in the near future.
● Orders in the International business unit were up 57 percent over the second quarter of fiscal 2012. Orders for the quarter included a $6.1 million order for a large architectural lighting project in China and orders for a major sports stadium in Sydney, Australia and a second stadium in Perth, Australia totaling in excess of $3 million.
Morgan added, "We are pleased with our strong second quarter financial performance, which finishes off a strong first half for us. The first half of the year tends to be our strongest half due to the seasonality of our business, and we expect sales and gross profit margins for the rest of the year to lag those of the first half of the year. However, we remain committed to our thre- year strategic goal to significantly improve operating margin. We have more work to do over the next couple of years to achieve and sustain that goal: however, the first half of the year is a good start in that direction. We continue to work to improve the gross profit on contracts as well as standard product through initiatives in product design, manufacturing, and project management. We are estimating that our capital investment for all of fiscal 2013 will be approximately $14.0 million, down from $16.5 million in fiscal 2012."
"On the product side, we are just beginning the shipment of our new 4200 Series Digital Billboard Product. This product offers enhanced features such as improved image quality, diagnostics, and reliability, along with lower operating power. We also recently began shipping our latest fuel price digit products offering an enhanced font along with improved overall reliability. Ou Transportation business will begin shipping full-color Vanguard displays in the next few months. This is the first of a complete product family offering full-color solutions for everything from lane control displays to larger roadside message displays as we see a trend away from lower resolution, monochrome displays in this market. Our primary focus in our video products area is the development of our next generation of surface mount outdoor product which will offer a wider array of pixel pitches and improve the manufacturability of the product to achieve improved performance at a reduced cost. We anticipate the first shipment of this product later in this fiscal year," continued Morgan.
The company will host a conference call and webcast to discuss its financial results today at 10:00 am (Central Time). This cal will be broadcast live at http://investor.daktronics.com and available for replay shortly after the event.
Cautionary Notice: In addition to statements of historical fact, this news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and is intended to enjoy the protection of that Act. These forward-looking statements reflect the Company's expectations or beliefs concerning future events. The Company cautions th these and similar statements involve risk and uncertainties which could cause actual results to differ materially from our expectations, including, but not limited to, changes in economic and market conditions, management of growth, timing and magnitude of future contracts, fluctuations in margins, the introduction of new products and technology, the impact of adverse weather conditions and other risks noted in the Company's SEC filings, including its Annual Report on Form 10-K for its 2012 fiscal year. Forwa-lrodoking statements are made in the context of information available as of the date stated. The Company undertakes no obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur.
Daktronics, Inc. and Subsidiaries Consolidated Statements of Operations (in thousands, except per share amounts)
Three Months Ended Six Months Ended
Net sales $ 149, $ 135, $ 282, $ 254, Cost of goods sold 107,519104,440204,048193,631
Gross profit 42,352 31,470 78,742 60,976
General and administrative
Product design and development 5,8455,63611,86611,353
Nonoperating income (expense):
Interest income 348 457 779 892
Interest expense (36) (95) (123) (171) Other income (expense), net 150(47)(30)(193)
Income before income taxes 17,323 6,251 28,195 11,580
Reconciliation of Cash Flow Provided by Operating Activities to Free Cash Flow
(in thousands) (unaudited)
Six Months Ended
Net cash provided by operating activities $ 34, $ 21,
Purchase of property and equipment
Proceeds from sales of property and equipment
Free cash flow
$ 29, $ 15,
In evaluating its business, Daktronics considers and uses free cash flow as a key measure of its operating performance. The term free cash flow is not defined under U.S. generally accepted accounting principles ("GAAP") and is not a measure of operating income, cash flows from operating activities or other GAAP figures and should not be considered alternatives to those computations. Free cash flow is intended to provid information that may be useful for investors when assessing period to period results.