Slide 1: Second Quarter Fiscal 2018
SECOND QUARTER FISCAL 2018 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 49+ Year Track Record 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* FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Net cash from operations $ 59,833 $ 48,731 $ 43,784 $ 41,346 $ 20,038 $ 50,749 $ 36,199 $ 53,513 $ 13,581 $ 39,573 Net capital expenditures (33,393) (18,221) (15,940) (9,148) (16,293) (9,476) (13,28
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) 2009 0.090 1.1% - 3,635 2010 0.095 1.2% - 3,874 Share Repurchase program 2011 0.100 2.5%
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 2009 + 0.24 + 0.29 + 0.10 + 0.01 Video systems comprise a large portion of 2010 + 0
Slide 11: FY2018 Second Quarter to Date
FY2018 SECOND QUARTER TO DATE Three Months Ended 28-Oct 29-Oct Percent 2017 2016 Change Orders $ 142,260 $ 116,874 21.7% Net sales $ 169,309 $ 169,992 -0.4% Gross profit 42,604 44,309 Gross margin 25.2% 26.1% Operating income 9,439 12,666 Operating margin 5.6% 7.5% Net income $ 7,132 $ 9,020 -20.9%
Slide 12: FY2018 YTD Results
FY2018 YTD RESULTS Six Months Ended 28-Oct 29-Oct Percent 2017 2016 Change Orders $ 295,341 $ 292,042 1.1% Net sales $ 342,037 $ 327,138 4.6% Gross profit 87,250 83,375 Gross margin 25.5% 25.5% Operating income 21,163 20,648 Operating margin 6.2% 6.3% Net income $ 15,560 $ 14,559 6.9% % of sales 4.5
Slide 13: Business Unit Recap
Business Unit Recap Live Events, Commercial, FY17 Net Sales Transportation, and High School Park Transportation 9% and Recreation, include net sales in High School Park and Recreation the United States and Canada 14% International 15% International net sales include rest of world and are primari
Slide 14: Live Events Business Unit
LIVE EVENTS BUSINESS UNIT Mercedes-Benz Stadium, GA
Slide 15: Live Events
LIVE EVENTS » Video display solutions for large sports venues and live entertainment facilities • Professional sports • College and university • Arenas University of Clemson, South Carolina » Competition • Mitsubishi, Lighthouse, Panasonic, Prismview and others • Asian competition through U.S. integ
Slide 16: 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 17: High School Park and Recreation (HSPR)
HIGH SCHOOL PARK AND RECREATION (HSPR) Highland High School, Highland, IN Miami Trace High School, Miami, FL
Slide 18: 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 Dakota Valley High School, North Sioux City, SD
Slide 19: HSPR Growth Drivers and Competitors
HSPR »Growth Drivers • Larger more sophisticated displays in sports venues • Revenue generation • Communication medium • New construction/replacement cycles »Competitors • Translux, Nevco, other smaller Waco – ISD, Waco, TX company manufacturers
Slide 20: Commercial Business Unit
COMMERCIAL BUSINESS UNIT LG Electronics - Times Square 1540 Broadway and West 45th Street
Slide 21: Commercial
COMMERCIAL » Sales channel focus • Third party advertising/Out of Home Advertising (OOH) • On-premise advertising (retail) • Spectacular (custom video) Miami International Mall, Doral, FL » Primary offerings • Digital billboards • Message centers • Video display systems • Petroleum displays • Dynami
Slide 22: 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) Griffin Outdoor, Tulsa, OK • Replacement cycle (7-10 years) • Architectural lighting » Compet
Slide 23: Transportation Business Unit
TRANSPORTATION BUSINESS UNIT Anaheim Transit Center, Anaheim, CA Sky Harbor International Airport, Phoenix, AZ
Slide 24: Transportation
TRANSPORTATION » Three niches • Intelligent transportation systems (ITS) • Airports • Mass Transit » Competitors • Skyline, Ledstar, Telegra, SES-America, Imago, others Vanguard Roadshow Demo Trailer
Slide 25: 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 New York City Transit, NY, NY New Jersey Turnpike Authorit
Slide 26: International Business Unit
INTERNATIONAL BUSINESS UNIT Piccadilly Lights, London
Slide 27: 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: • China- architectural lighting and video EMAAR Mall
Slide 28: 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: Mitsubishi, Lighthouse, Panasonic, Barco and other country-specific competitors Salford
Slide 29: Looking Ahead
LOOKING AHEAD DAKTRONICS
Slide 30: Achieving Long-Term Profitable Growth
ACHIEVING LONG-TERM PROFITABLE GROWTH Continued Global Demand • Out-of Home Advertising • Venue competition/ HD video for sports • Increased geographic coverage and penetration • New product introductions • Continued market adoption and expansion • Replacement cycle • Worldwide economic conditions
Slide 31: Achieving Long-Term Profitable Growth
ACHIEVING LONG-TERM PROFITABLE GROWTH Robust solutions and operational excellence: • New product introductions • Localized and customer focused products • Narrow Pixel Pitch (Ultra-high resolution) solutions • Enhanced product and control system platforms • Professional services offerings • Agile Ca
Slide 32: Outlook to Fiscal 2018
OUTLOOK TO FISCAL 2018 Modest revenue growth International opportunity for growth with increased market share in focused areas Live Events demand similar to prior years Commercial indoor solutions expansion, spectacular demand, replacement cycles, OOH similar demand levels Transportation opp
Slide 33: Solution Examples
MODULE ¢ MP IN. trroucttote vs. surrACe MOUNT EDs | | THROUGH-HOL! LED MODULE SURFACE-MOUNT LED MODULE ited display control studio r flexible, intuitive display nde quality DAKTRONICS
Slide 34: Technology
DYNAMIC MESSAGE SIGNS TECHNOLOGY CONTROL SYSTEMS
Slide 35: Questions
Slide 36: 10 Year History Supplemental Information
10 YEAR HISTORY SUPPLEMENTAL INFORMATION FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Net sales $499,677 $580,681 $393,185 $441,676 $489,526 $518,322 $551,970 $615,942 $570,168 $586,539 Gross profit 147,590 155,358 94,556 111,484 113,437 133,894 141,710 144,579 121,019 140,4