Daktronics, Inc. · NASDAQ:DAKT
Daktronics — Needham & Company Growth Stock Conference 2008
33 slides from Daktronics's conference presentation, Jan 9, 2008
Slide 1: Investor Presentation – Needham & Company Growth Stock Conference
Investor Presentation Needham & Company Growth Stock Conference January 8-11, 2008
Slide 2: Cautionary Notice
Cautionary Notice In addition to statements of fact, this presentation contains forward-looking statements reflecting the company’s expectations or beliefs concerning future events which could materially affect company performance in the future. The company cautions that these and similar statements
Slide 3: Strong Industry Leadership Position
Strong Industry Leadership Position executing against our mission to be the world leader at informing people through dynamic audio-visual communications systems Current Position in the Marketplace: #1 supplier of LED video displays* #1 supplier of LED text and graphics displays* #1 supplier of LED b
Slide 4: Five Year Financial History
Five Year Financial History (Dollars in thousands except per share data) FY2003 FY2004 FY2005 FY2006 FY2007 5-Yr CAGR Sales $177,764 $209,907 $230,346 $309,370 $433,201 23.8% Operating Income $ 19,825 $ 27,530 $ 19,436 $ 31,815 $ 36,915 32.3% Earnings Per Share $ 0.32 $ 0.44 $ 0.39 $ 0.52 $ 0.59 35.
Slide 5: Overall Competitive Advantage
Overall Competitive Advantage Complete integrated solution Unparalleled sales and service coverage Engineering capabilities Extensive software solutions Depth of extended services Product quality and performance Industry experience Capacity to deliver
Slide 6: Industry Fundamentals
Industry Fundamentals Rapidly growing adoption of LED display technology: Continually improving price performance Full color at affordable price levels Effective media platform Customer competitive factors Trickle down of technology and systems Highly competitive marketplace across all markets.
Slide 7: Business Units (Segments)
Business Units (Segments) Implemented in FY08 to drive financial and operational performance Domestic (includes Canada) Commercial Live Events Schools and theaters Transportation International
Slide 8: Pay for a day, come back all spring and summer
Pay fora day, come back all spring and summer. @News Corporation DAKTRONICS
Slide 9: Commercial Overview
Commercial Overview Three main areas Digital billboard National accounts Resellers Main products Valo TM digital displays Galaxy ® GalaxyPro TM ProStar ® video 33% of FY07 net sales Order growth in FY08 expected to be in excess of 20%
Slide 10: Commercial Overview
Commercial Overview Growth Drivers Greater acceptance & increasing use Billboard applications Competitors Resellers – Optec, Watchfire, EDS National Accounts – Optec, Hi-Tech Digital Billboards – Yesco, Optotec
Slide 11: Commercial - National Accounts
Commercial - National Accounts Concentrated in a few accounts Galaxy® product line Opportunities exists as acceptance increases Expect greater than 20% order growth FY08
Slide 12: Commercial – Digital Billboard
Commercial – Digital Billboard Built on a solid ROI model Key barriers include product development and service Expect greater than 25% order growth in FY08
Slide 13: Live Events
Live Events Business Unit
Slide 14: Live Events Overview
Live Events Overview Formerly referred to as large sports venues Professional sports facilities College and university facilities Mobile and modular: Rental and staging Touring companies Parimutual 39% of net sales in FY07 Expected order growth for FY08 to be flat Large order awards likely to be pus
Slide 15: Live Events Growth Drivers
Live Events Growth Drivers Fan experience High definition (HD) Competition between venues Improving price/performance of LED technology Increasing use Revenue generation New construction
Slide 16: Live Events Competition
Live Events Competition Competition – Large Sports Venues Mitsubishi, ANC, Philips, Barco, Panasonic, and others Competition generally must partner with others to compete with Daktronics breadth of product Competition – Mobile and Modular Barco, Lighthouse, Toshiba, Hibino Competitive advantages Unp
Slide 17: Large Sports Venues – New Construction
Large Sports Venues – New Construction Generally, not dependent on new construction projects Notable difference for FY08-FY10 Significant increase in facility spending for display systems Recent wins: New York Yankees – $19 million Indianapolis Colts – $11 million Kansas City Royals – $10 million Pe
Slide 18: Mobile & Modular
Mobile & Modular Significant product investment over past three years Designed for ease of use, set-up and tear down
Slide 19: Schools & Theatres
Schools & Theatres Business Unit
Slide 20: Schools & Theatres Overview
Schools & Theatres Overview Formerly referred to as small sports venues Elementary and high schools, junior colleges Park and recreation departments Theatres Main Products Sports Scoring Systems Galaxy ® displays Vortek ® hoist systems 12% of net sales in FY07 Expected order growth in excess of 35%
Slide 21: Schools & Theatres Overview
Schools & Theatres Overview Growth drivers Larger and more capable display systems New construction and renovations Competition between venues Parent and student communications Competitors Sports systems Trans-Lux, Nevco, All American, Electro-Mech, Colorado Timing Systems, Spectrum Campus Communica
Slide 22: International Business Unit
International Business Unit
Slide 23: International Overview
International Overview Established presence in Europe in 2003 Asia in 2005 Middle East in 2006 10% of net sales in FY07 Order growth expected of >40% Recent orders from JC Decaux Making significant investments
Slide 24: Transportation Business Unit
Transportation Business Unit
Slide 25: Transportation Overview
Transportation Overview Three main areas: Intelligent transportation systems (ITS) Aviation, including airports and airlines Portable traffic display suppliers 6% of FY07 net sales Order growth in FY08 expected to be flat
Slide 26: Transportation Overview
Transportation Overview Growth Drivers Government spending Capacity constraints on highways, public transit, airports and parking systems Limited ability to build or expand new roads Increased air travel Work-zone safety Competitors ITS – Skyline, Ledstar Aviation – TransLux, AMS Portables – Addco,
Slide 27: Daktronics
DAKTRONICS DAKTRONICS
Slide 28: FY 2008 Year-to-Date Results
FY 2008 Year-to-Date Results* *($ in thousands, except per share data) 2008 2007 Change Net Sales 252,359 $ 215,683 $ 17.0% Gross Profit 76,079 $ 61,746 $ 23.2% Gross margin 30.1% 28.6% Operating Income 23,615 $ 20,977 $ 12.6% Operating margin 9.4% 9.7% Net Income 15,121 $ 13,879 $ 8.9% % of revenue
Slide 29: Capacity Expansion
Capacity Expansion FY2007 investment of $59 million Brookings facilities – general purpose of 80,000 sq. ft. Sioux Falls facility – 120,000 sq. ft. with a focus on digital billboards Redwood Falls facility – 100,000 sq. ft. with a focus on Galaxy ® and gas price digit displays Information systems in
Slide 30: Growth Strategies – Cash
Growth Strategies – Cash Investments Ongoing Product Development – 4% of net sales New product for existing markets Enhance existing products while reducing costs Emphasis on process improvement – Lean manufacturing Continue to expand distribution Add local sales and service offices domestic and int
Slide 31: Maintaining Profitable Growth
Maintaining Profitable Growth Aggressively implement lean business processes to reduce costs and improve quality Address SG&A on a quarterly basis, to create leverage over the long-term Improve inventory and receivables turns Focus on operating margin
Slide 32: Previously Announced Outlook for Q3 FY2008
Previously Announced Outlook for Q3 FY2008 Order bookings for the third quarter may exceed $150 million (subject to booking of large orders) Previously announced Q3 estimates Net sales $107-116 million EPS $.10 - $.15 (fully-diluted)
Slide 33: Daktronics
DAKTRONICS DAKTRONICS
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