Slide 1: Second Quarter Fiscal 2020
SECOND QUARTER FISCAL 2020 NASDAQ: DAKT
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT 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 Compa
Slide 3: Daktronics Vision
DAKTRONICS VISION To be the world leader at informing and entertaining audiences through dynamic audio-visual communication systems.
Slide 4: Daktronics Mission
DAKTRONICS MISSION Deliver industry leading value to our customers, by engaging: • our employees through challenging and rewarding opportunities; • developing strategic partnerships with our suppliers; • leveraging our strengths in: product innovation, manufacturing, and service; • while contributin
Slide 5: Around the Globe
: Sales Office : Manufacturing Facility Products in 120+ Countries OFFICES throughout the world AROUND THE GLOBE
Slide 6: World Leader
WORLD LEADER Celebrating our 50th Year! Customer solutions Engineering & Creative talent Global and local focus of customer support Lean Manufacturing Financially strong
Slide 7: 10 Year History Sales & Operating Income %
10 YEAR HISTORY SALES & OPERATING INCOME %
Slide 8: 10 Year History Free-Cash Flow
10 Year History Free-Cash Flow* FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 Net cash from operations $ 43,784 $ 41,346 $ 20,038 $ 50,749 $ 36,199 $ 54,702 $ 13,354 $ 39,407 $ 30,361 $ 29,546 Net capital expenditures (15,940) (9,148) (16,293) (9,476) (13,281) (24,830) (23,96
Slide 9: 10 Year History Return to Shareholders
10 Year History Return to Shareholders Total Regular Annualized Special Fiscal Dividend Dividend/ Dividend Dividend/ Long-term dividend history Year Yield Payout Share Share (000’s) (see chart to the right) 2011 0.100 2.5% 0.500 24,795 2012 (1) 0.220 1.9% 0.400 25,950 Share Repurchase program 20
Slide 10: More about Daktronics
More about Daktronics 10 YEAR HISTORY 52/53 Week Fiscal Years ending in April DILUTED EARNINGS PER SHARE (after adjustment for splits) Seasonality to results (Sports/Construction Fiscal Year Q1 Q2 Q3 Q4 season) 2011 + 0.06 + 0.17 + 0.04 + 0.07 2012 + 0.08 + 0.09 + 0.04 - 0.01 Video systems com
Slide 11: FY2020 Second Quarter Results
FY2020 SECOND QUARTER RESULTS ($ in thousands, except per share data) Three Months Ended 2-Nov 27-Oct Percent 2019 2018 Change Orders $ 151,122 $ 151,355 -0.2% Net sales $ 174,912 $ 172,692 1.3% Gross profit 40,088 42,757 Gross margin 22.9% 24.8% Operating income 4,824 9,019 -46.5% Operating margin
Slide 12: FY2020 YTD Results
FY2020 YTD RESULTS ($ in thousands, except per share data) Six Months Ended 2-Nov 27-Oct Percent 2019 2018 Change Orders $ 338,585 $ 310,966 8.9% Net sales $ 355,168 $ 326,880 8.7% Gross profit 85,593 81,004 Gross margin 24.1% 24.8% Operating income 12,440 13,059 -4.7% Operating margin 3.5% 4.0% Net
Slide 13: FY2019 Annual Results
FY2019 ANNUAL RESULTS ($ in thousands, except per share data) Twelve Months Ended 27-Apr 28-Apr Percent 2019 2018 Change Orders $ 608,880 $ 583,466 4.4% Net sales $ 569,704 $ 610,531 -6.7% Gross profit 130,294 145,669 Gross margin 22.9% 23.9% Operating income (4,728) 12,460 -137.9% Operating margin
Slide 14: Business Unit Recap
Business Unit Recap Live Events, Commercial, Transportation, and High School Park and Recreation, include net sales in the United States and Canada International net sales include rest of world and are primarily for solutions for large sports venues, spectaculars, third-party advertising, and tr
Slide 15: Live Events Business Unit
LIVE EVENTS BUSINESS UNIT Milwaukee Bucks
Slide 16: Live Events
LIVE EVENTS » Video display solutions for large sports venues and live entertainment facilities • Professional sports • College and university • Arenas » Competition Mercedes-Benz Stadium • Mitsubishi, Lighthouse, Panasonic, Prismview (Division of Samsung) and others • Asian competition through U.S.
Slide 17: Live Events: Demand Drivers
LIVE EVENTS Demand Drivers » Facility increased spend to: • Enhance attendee event experience • Revenue source from advertising • Competitive nature to outperform other facilities » Lower product costs, driving expansion of marketplace » High definition product offering (HD) » Replacement cycle (sys
Slide 18: High School Park and Recreation (HSPR)
HIGH SCHOOL PARK AND RECREATION (HSPR) Brookings High School, Brookings, SD
Slide 19: HSPR
HSPR » Video and scoring systems and message centers to • Elementary and high schools, junior colleges • Park and recreation departments » Primary funding is through local sponsors and advertisers Mechanicville High School, Mechanicville, NY Town of North Liberty, North Liberty, IN
Slide 20: HSPR: Growth Drivers and Competitors
HSPR »Growth Drivers • Larger more sophisticated displays in sports venues • Revenue generation • Communication medium • New construction/replacement cycles • Curriculum usage »Competitors Ben Davis High School, Indianapolis, Indiana • Formetco, Scorevision, Translux, Nevco, other smaller company ma
Slide 21: Commercial Business Unit
COMMERCIAL BUSINESS UNIT First Federal Savings Bank Barclays Capital Time Square Rochester, IN New York, NY
Slide 22: Commercial
COMMERCIAL » Sales channel focus • Third party advertising/Out of Home Advertising (OOH) • On-premise advertising (retail) • Spectacular (custom video) » Primary offerings Adams Outdoor, Hampton, VA • Digital billboards • Message centers • Video display systems/display walls • Petroleum displays • D
Slide 23: Commercial: Growth Drivers and Competitors
COMMERCIAL » Long-term growth drivers • Market adoption, including National Accounts • Spectacular use to entertain/advertise in unique locations • Effective advertising medium (outdoor and indoor networks) • Replacement cycle (7-10 years) • Architectural lighting Midland Center, Midland, MI » Compe
Slide 24: Transportation Business Unit
TRANSPORTATION BUSINESS UNIT Parks Canada Agency Calgary, Alberta Colorado Department of Transportation
Slide 25: Transportation
TRANSPORTATION » Three niches • Intelligent transportation systems (ITS) • Airports • Mass Transit » Competitors • Skyline, Ledstar, Telegra, SES-America, Imago, others Intelligent Transit Systems (ITS) Penn Turnpike, Norristown Interchange, PA
Slide 26: Transportation: Long-term Growth Drivers
TRANSPORTATION » Long-term growth drivers • Transportation management - increasing traffic demands on constrained infrastructure • Governmental funding and investment in infrastructure projects • Infographic communication • Advertising needs Pearson Airport, Toronto, Canada Public Transportation Mar
Slide 27: International Business Unit
INTERNATIONAL BUSINESS UNIT Tottenham Hotspur Football & Athletic Co Ltd London, UK
Slide 28: International: Main Products and Infrastructure
INTERNATIONAL Main products » Commercial video systems » Sports video systems » Digital billboard (OOH) » Architectural lighting » Transportation systems Paramount Media Holden Close – Perth, Australia Infrastructure » World-wide sales & service offices » International Manufacturing: • China- archit
Slide 29: International: Growth Opportunities
INTERNATIONAL » Growth opportunities • 3rd party advertising/Out of Home Advertising • Live Events facilities/sports • European/Middle East transportation systems • Increased geographical coverage » Competitors: Absen, Samsung, JCDecaux Media Frankfurt – Frankfurt, Germany Aoto, Leyard, Unilumen, Mi
Slide 30: Looking Ahead
LOOKING AHEAD Ideas Faisalabad – Tottenham Hotspur Football & Chicago Cubs – Chicago, Faisalabad, Pakistan Athletic Co Ltd – London, UK Illinois, USA
Slide 31: Achieving Long-Term Profitable Growth
ACHIEVING LONG-TERM PROFITABLE GROWTH Continued Global Demand Continued global market adoption and expansion Retail and public space Out of Home Advertising Venue competition/ HD video for sports Global Transportation opportunities Replacement cycle Worldwide economic conditions Skechers
Slide 32: Achieving Long-Term Profitable Growth
ACHIEVING LONG-TERM PROFITABLE GROWTH Daktronics provided robust solutions meeting market demand: Market new product and solutions introductions: Localized and customer focused products Narrow Pixel Pitch (Ultra-high resolution) solutions Enhanced product and control system platforms New te
Slide 33: Outlook to Fiscal 2020
OUTLOOK TO FISCAL 2020 Modest order growth International OOH, transportation, market development Commercial indoor solutions expansion, spectacular demand, replacement cycles, OOH similar demand levels Transportation similar, but opportunity due to funding/mass transit/advertising HSPR conti
Slide 34: Solution Examples
‘MOUNT LED MODULE ated display control stud Built-in media player flexible, intuitive low for
Slide 35: Technology
DYNAMIC MESSAGE SIGNS TECHNOLOGY CONTROL SYSTEMS
Slide 36: Questions
Slide 37: 10 Year History Supplemental Information
10 YEAR HISTORY SUPPLEMENTAL INFORMATION FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 Net sales $393,185 $441,676 $489,526 $518,322 $551,970 $615,942 $570,168 $586,539 $610,531 $569,704 Gross profit 94,556 111,484 113,437 133,894 141,710 144,579 121,019 140,415 145,669 130,2