Slide 1: Second Quarter Fiscal 2019
SECOND QUARTER FISCAL 2019 NASDAQ: DAKT
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT In addition to statements of fact, this presentation contains forward-looking 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 b
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* FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 Net cash from operations $ 48,731 $ 43,784 $ 41,346 $ 20,038 $ 50,749 $ 36,199 $ 53,513 $ 13,581 $ 39,573 $ 31,613 Net capital expenditures (18,221) (15,940) (9,148) (16,293) (9,476) (13,281) (17,80
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 Share Yield Share Payout (see chart to the right) (000’s) 2010 0.095 1.2% - 3,874 2011 0.100 2.5% 0.500 24,795 ✓ Share Repurchase program 2012 (1) 0.
Slide 10: More about Daktronics
More about Daktronics ✓ 52/53 Week Fiscal Years ending in April 10 YEAR HISTORY DILUTED EARNINGS PER SHARE ✓ Seasonality to results (Sports/Construction (after adjustment for splits) season) Fiscal Year Q1 Q2 Q3 Q4 2010 + 0.03 + 0.12 - 0.20 - 0.12 ✓ Video systems comprise a large portion of 2011 + 0
Slide 11: FY2019 Second Quarter Results
FY2019 SECOND QUARTER RESULTS ($ in thousands, except per share data) Three Months Ended 27-Oct 28-Oct Percent 2018 2017 Change Orders $ 151,356 $ 142,260 6.4% Net sales $ 172,692 $ 169,309 2.0% Gross profit 42,757 42,604 Gross margin 24.8% 25.2% Operating income 9,019 9,438 -4.4% Operating margin 5
Slide 12: FY2019 YTD Results
FY2019 YTD RESULTS ($ in thousands, except per share data) Six Months Ended 27-Oct 28-Oct Percent 2018 2017 Change Orders $ 310,966 $ 295,341 5.3% Net sales $ 326,880 $ 342,037 -4.4% Gross profit 81,004 87,250 Gross margin 24.8% 25.5% Operating income 13,059 21,163 -38.3% Operating margin 4.0% 6.2%
Slide 13: FY2018 Annual Results
FY2018 ANNUAL RESULTS ($ in thousands, except per share data) Twelve Months Ended 28-Apr 27-Apr Percent 2018 2017 Change Orders $ 583,467 $ 613,504 -4.9% Net sales $ 610,530 $ 586,539 4.1% Gross profit 145,669 140,415 Gross margin 23.9% 23.9% Operating income 12,460 15,421 -19.2% Operating margin 2.
Slide 14: Business Unit Recap
Business Unit Recap ✓ Live Events, Commercial, FY18 Net Sales Transportation, and High School Park International Commercial and Recreation, include net sales in 15% 22% the United States and Canada Transportation 10% ✓ International net sales include rest of world and are primarily for solutions for
Slide 15: Live Events Business Unit
LIVE EVENTS BUSINESS UNIT Colorado Rockies
Slide 16: Live Events
LIVE EVENTS » Video display solutions for large sports venues and live entertainment facilities • Professional sports • College and university • Arenas University of South Carolina » Competition • Mitsubishi, Lighthouse, Panasonic, Prismview and others • Asian competition through U.S. integrators
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) Highlands Ranch High School, Highlands Ranch, CO
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 North Judson High School, North Judson, 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 »Competitors • Formetco, Scorevision, Translux, Nevco, Midco Aquatics Center, Sioux Falls, SD other smaller company manufacturers
Slide 21: Commercial Business Unit
COMMERCIAL BUSINESS UNIT Walgreens, Pinal County, AZ Oglethorpe Mall, Savannah, GA
Slide 22: Commercial
COMMERCIAL » Sales channel focus • Third party advertising/Out of Home Advertising (OOH) • On-premise advertising (retail) • Spectacular (custom video) » Primary offerings EZStor, Watertown, SD • Digital billboards • Message centers • Video display systems/display walls • Petroleum displays • Dynami
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 » Competitors • Message Centers – O
Slide 24: Transportation Business Unit
TRANSPORTATION BUSINESS UNIT Airports Tom Bradley Terminal Los Angeles International Airport Nevada 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) Banff National Park – Parks Canada
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 Seattle International Airport Public Transportation Anahei
Slide 27: International Business Unit
INTERNATIONAL BUSINESS UNIT Piccadilly Lights, London
Slide 28: International
INTERNATIONAL Main products » Commercial video systems » Sports video systems » Digital billboard (OOH) » Architectural lighting » Transportation systems Infrastructure » World-wide sales & service offices » International Manufacturing facilities: Mosaic Shanghai • China- architectural lighting and
Slide 29: International: Growth Opportunities and Competitors
INTERNATIONAL » Growth opportunities • 3rd party advertising/Out of Home Advertising • Live Events facilities/sports • European/Middle East transportation systems • Increased geographical coverage Galleria Tbilisi, Georgia » Competitors: Absen, Samsung, Aoto, Leyard, Unilumen, Mitsubishi, Lighthouse
Slide 30: Looking Ahead
LOOKING AHEAD p @ DAKTRONICS
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 ✓Replacement cycle ✓Worldwide economic conditions
Slide 32: Achieving Long-Term Profitable Growth
ACHIEVING LONG-TERM PROFITABLE GROWTH Daktronics provided robust solutions meeting market demand: ✓New product and solutions introductions: ➢ Localized and customer focused products ➢ Narrow Pixel Pitch (Ultra-high resolution) solutions ➢ Enhanced product and control system platforms ✓Professional s
Slide 33: Outlook to Fiscal 2019
OUTLOOK TO FISCAL 2019 Modest revenue growth ✓ International OOH, transportation, market development ✓ Commercial indoor solutions expansion, spectacular demand, replacement cycles, OOH similar demand levels ✓ Transportation opportunity for growth with funding/mass transit/advertising ✓ HSPR continu
Slide 34: Solution Examples
THROUGH-HOLE LED MODULE SURFACE-MOUNT LED MODULE
Slide 35: Technology
DYNAMIC MESSAGE SIGNS TECHNOLOGY CONTROL SYSTEMS
Slide 36: Questions
Slide 37: 10 Year History Supplemental Information
10 YEAR HISTORY SUPPLEMENTAL INFORMATION