Group 1 - Chewy Inc. is expected to report quarterly earnings of 14 cents per share on revenue of $3.08 billion, with shares gaining 3.8% to $43.70 in after-hours trading [2] - Rubrik Inc. reported second-quarter results that exceeded expectations and raised its full-year fiscal 2026 revenue outlook to a range of $1.227 billion to $1.237 billion, up from a previous range of $1.179 billion to $1.189 billion, while shares fell 3.6% to $94.91 [2] - Daktronics Inc. is anticipated to post quarterly earnings of 25 cents per share on revenue of $213.41 million, with shares gaining 0.6% to $17.53 in after-hours trading [2] - Synopsys Inc. reported weaker-than-expected third-quarter results and lowered its fiscal 2025 adjusted EPS guidance from a range of $15.11 to $15.19 to a new range of $12.76 to $12.80, leading to a 19.3% dip in shares to $487.99 [2] - Oxford Industries Inc. is expected to report quarterly earnings of $1.18 per share on revenue of $410.85 million, with shares rising 0.3% to $40.88 in after-hours trading [2]

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Financial Results Announcement - Daktronics, Inc. will release its first quarter fiscal 2026 financial results on September 10, 2025, before the market opens [1] - A conference call and webcast will be hosted at 10:00 AM CT on the same day [1][2] Conference Call Details - The conference call will be led by Interim CEO Brad Wiemann and Acting CFO Howard Atkins, including forward-looking statements and material information [2] - Participants must pre-register to access the call, receiving dial-in information and a PIN [3] - A recording of the call will be archived for later replay on the company's Investor Relations website [3] Company Overview - Daktronics is the world's largest supplier of large-screen video displays, electronic scoreboards, and LED text and graphics displays [4] - The company operates in four domestic business units: Live Events, Commercial, High School Park and Recreation, and Transportation, along with one International business unit [4]

Core Viewpoint - Daktronics, Inc. has announced the nomination of Mark Bowser and Neil Glat for election to its Board of Directors at the upcoming 2025 Annual Meeting of Shareholders, indicating a strategic move to enhance board capabilities and governance [1][4]. Group 1: Nominees' Background - Mark Bowser has extensive experience as a former CFO and EVP at Cox Automotive, where he led finance and strategy teams, and has a strong background in accounting, financial planning, and mergers and acquisitions [2][5]. - Neil Glat is a seasoned executive with a background in sports and entertainment, having served as President of the New York Jets and held senior roles at the NFL, focusing on corporate development and strategy [3][6]. Group 2: Board Composition Changes - The board will not nominate Kevin McDermott for re-election due to a Cooperation Agreement with Alta Fox Capital Management, marking a significant change in board composition [4]. - McDermott has been a director since 2015 and has contributed significantly as Chair of the Audit Committee and Lead Director [4]. Group 3: Company Overview - Daktronics is the world's largest supplier of large-screen video displays, electronic scoreboards, and related control systems, serving various sectors including live events and transportation [8].

Group 1 - Daktronics, Inc. (NASDAQ: DAKT) shares have experienced a marginal decline since the last analysis, indicating a lack of positive momentum in the stock price [1] - The financial performance for FY25 was disappointing, with both revenue and margins showing a decline, suggesting potential challenges for the company [1] Group 2 - The analyst focuses on undercovered companies, particularly in sectors such as technology, software, electronics, and energy transition, indicating a niche investment strategy [1] - The analyst has over 7 years of personal investment experience and a background in Electrical Engineering, which may contribute to a well-informed perspective on investment opportunities [1]

Financial Performance - Q4 orders increased by 29% compared to Q3 and 17% year-over-year, indicating a replenishment of backlog[6] - The company more than doubled Q4 operating cash flow year-over-year[6] - Adjusted operating income for FY25 was $49.642 million, compared to a reported operating income of $33.118 million[25] - Inventory efficiency led to a $32 million, or greater than 23%, reduction year-over-year[28] - Share repurchases amounted to $29 million at a volume-weighted average price of $14.23[28] Market Segment Performance - Live Events saw FY orders increase by 31% year-over-year and Q4 orders increase by 44% year-over-year[14] - High School Park & Recreation (HSPR) experienced FY orders growth of 32% year-over-year and Q4 orders growth of 112% year-over-year, achieving record order bookings[15] - International orders decreased by 10% year-over-year for the full year but increased by 14% in Q4[12] - Commercial Transportation orders decreased by 12% year-over-year for the full year and 11% in Q4[10] Strategic Initiatives - The company's business and digital transformation initiatives are in place and on track to drive results[6] - The company incurred $7.085 million in business/digital transformation expenses and $6.825 million in corporate governance expenses for FY25[24] - The company incurred $2 million in "reciprocal" tariffs in the first five weeks of FY26[32]

Company Participants - The conference call featured key participants including Andrew D. Siegel, Independent Chair of the Board, and Bradley T. Wiemann, Interim President and CEO [1] - Other notable participants included Carla S. Gatzke, VP of Human Resources & Corporate Secretary, and Howard Ian Atkins, Acting CFO and Chief Transformation Officer [1] Conference Call Overview - The Daktronics Fourth Quarter Fiscal Year '25 Financial Results Conference Call was initiated with an operator's introduction, indicating that the call was being recorded [2] - Carla Gatzke, Corporate Secretary, welcomed participants and outlined the agenda for the earnings conference call [3] Forward-Looking Statements - The company made forward-looking statements regarding expectations and plans for future financial performance and business opportunities, emphasizing that actual results may differ from these expectations [3] - Participants were directed to refer to accompanying materials for information on risk factors and uncertainties that could impact actual results [3] Non-GAAP Financial Measures - The presentation included references to non-GAAP financial measures, with a reconciliation provided in the appendix of the presentation slides [4]

[Part I](index=4&type=section&id=PART%20I) [Business Overview](index=4&type=section&id=Item%201.%20BUSINESS) Daktronics is a leading global designer and manufacturer of electronic display systems for sports, commercial, and transportation markets, operating through five segments and focusing on growth and efficiency via a new Business Transformation Office - Daktronics is a global leader in designing and manufacturing electronic display systems, serving sports, commercial, and transportation applications through a full range of activities from design to customer support[13](index=13&type=chunk)[21](index=21&type=chunk) - The company operates through five reportable segments: Commercial, Live Events, High School Park and Recreation, Transportation (all covering the U.S. and Canada), and the International business unit[18](index=18&type=chunk) - In fiscal 2025, a Business Transformation Office (BTO) was formed to review business strategy and develop initiatives for market penetration, growth, and efficiency[14](index=14&type=chunk) Product Order Backlog Trend | Date | Backlog (in millions) | Change (YoY) | | :--- | :--- | :--- | | April 26, 2025 | $341.6 | +7.8% | | April 27, 2024 | $316.9 | | - The company expects to fulfill the **$341.6 million** backlog within the next 24 months, though timing may be impacted by external factors like customer site conditions[60](index=60&type=chunk) - As of April 26, 2025, Daktronics employed **2,702** people globally, with **2,422** full-time and **280** part-time/temporary employees, none represented by a collective bargaining agreement[15](index=15&type=chunk)[76](index=76&type=chunk) [Products and Technologies](index=6&type=section&id=Products%20and%20Technologies) Daktronics' product portfolio includes advanced LED video displays, scoreboards, message displays, and intelligent transportation systems, complemented by integrated sound systems and comprehensive software control suites - The company's systems consist of two main components: the display and the control system, with products customized based on customer specifications and environmental conditions[27](index=27&type=chunk) - Key product families include Video displays/walls, Scoreboards/timing systems, LED Message displays, ITS dynamic message signs, Mass Transit displays, Sound systems, Digital billboards, and various software controllers like Venus® Control Suite (VCS) and Show Control Suite[28](index=28&type=chunk)[39](index=39&type=chunk) - The Venus® Control Suite (VCS) is a key software platform for scheduled content control, available in on-premise or cloud-based configurations, and can be combined with the Show Control Suite for live event applications[47](index=47&type=chunk) [Raw Materials and Competition](index=8&type=section&id=Raw%20Materials%20and%20Competition) The company sources critical raw materials globally, facing supply chain risks from single-source suppliers and intense competition based on product quality, technical expertise, and cost-effectiveness - Key raw materials include LEDs, integrated circuits, printed circuit boards, and power supplies, sourced globally, with some materials from single-source or limited suppliers, creating supply chain risk[49](index=49&type=chunk) - The company competes with a variety of domestic and foreign companies, as well as other advertising forms like television and print media, with competitive factors including product quality, features, technical expertise, service, and cost[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A.%20RISK%20FACTORS) The company faces significant macroeconomic, geopolitical, business, industry, information systems, legal, and regulatory risks, alongside investment-related challenges [Macroeconomic and Geopolitical Risks](index=12&type=section&id=Macroeconomic%20and%20Geopolitical%20Risks) Daktronics is exposed to global trade restrictions, tariffs, economic downturns, and unexpected events that can disrupt its complex supply chain and manufacturing operations - The company's complex manufacturing relies on components from over **40** countries, with China being a major source for semiconductors, and U.S. tariffs on Chinese imports ranging from **10%** to potentially **170%**, increasing costs[81](index=81&type=chunk) - Global economic downturns, inflation, and interest rate fluctuations can adversely affect customer spending and demand for the company's products[82](index=82&type=chunk)[85](index=85&type=chunk) - Unexpected events like natural disasters or wars could damage or close manufacturing facilities in the U.S., Ireland, or China, disrupting operations and supply chains[87](index=87&type=chunk)[88](index=88&type=chunk) [Business and Industry Risks](index=13&type=section&id=Business%20and%20Industry%20Risks) The company faces risks from single-source supplier dependence, intense market competition, intellectual property infringement, logistics failures, cost inflation, and challenges in managing global operations and fixed-price contracts - Dependence on single-source or limited suppliers, especially for semiconductor components from Taiwan and China, creates significant risk of supply chain disruption due to geopolitical tensions[89](index=89&type=chunk)[91](index=91&type=chunk) - The company operates in a highly competitive market and faces pricing pressure from foreign and domestic competitors, requiring continuous product innovation[94](index=94&type=chunk)[95](index=95&type=chunk) - A provision for expected credit losses of **$15.5 million** was recorded as of April 26, 2025, for loans to an affiliate deemed uncollectible[118](index=118&type=chunk)[129](index=129&type=chunk) - The company recorded a goodwill impairment charge of **$4.6 million** in fiscal 2023 for the Live Events and International reporting units, but no impairment was recorded in fiscal 2025 or 2024[132](index=132&type=chunk) - The company is currently recruiting for a new Chief Executive Officer and Chief Financial Officer, and the outcome of these searches is critical for future leadership and strategic direction[133](index=133&type=chunk) [Information Systems, Legal, and Regulatory Risks](index=20&type=section&id=Information%20Systems%2C%20Legal%2C%20and%20Regulatory%20Risks) The company is exposed to cybersecurity breaches, complex global regulatory compliance (anti-corruption, trade, data privacy, ESG), and the potential for significant fines and reputational damage from non-compliance - The business heavily relies on complex IT systems, and any failure or cybersecurity breach could result in disruption, data loss, and significant financial and reputational damage, with early-stage generative AI use also posing data-related risks[138](index=138&type=chunk)[139](index=139&type=chunk) - Global operations require compliance with numerous laws, including anti-corruption regulations like the FCPA and UK Bribery Act, as well as U.S. trade controls and economic sanctions, violations of which can lead to severe penalties[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) - Increasingly stringent privacy and data protection laws worldwide, along with a growing focus on ESG matters, could increase compliance costs and expose the company to regulatory action and reputational harm[148](index=148&type=chunk)[151](index=151&type=chunk) [Cybersecurity](index=26&type=section&id=Item%201C.%20CYBERSECURITY) Daktronics manages cybersecurity risks through a NIST-based program with Board oversight, a dedicated team, external testing, and an incident response plan, having experienced no material incidents to date - The company's cybersecurity program is based on the NIST framework and includes prevention, detection, and remediation measures such as a dedicated security team, third-party assessments, an incident response plan, and employee training[172](index=172&type=chunk)[176](index=176&type=chunk) - The Board's Strategy and Risk Committee provides oversight for cybersecurity risks and strategy, receiving periodic reports from management, with the program led by the VP of Information Technology who has over **25** years of experience[174](index=174&type=chunk)[175](index=175&type=chunk) - The company has not identified any cybersecurity threats or incidents that have materially affected its business strategy, results of operations, or financial condition[173](index=173&type=chunk) [Properties](index=27&type=section&id=Item%202.%20PROPERTIES) Daktronics' principal properties, including owned and leased manufacturing, sales, service, and corporate facilities, are considered adequate for foreseeable needs and secure its senior credit facility Principal Properties | Location | Owned/Leased | Square Footage | Activities | | :--- | :--- | :--- | :--- | | Brookings, SD, USA | Owned | 771,000 | Corporate HQ, Manufacturing, Sales, Service | | Redwood Falls, MN, USA | Owned | 151,000 | Manufacturing, Sales, Service, Office | | Ennistymon, Ireland | Owned | 62,000 | Manufacturing, Sales, Service, Office | | Sioux Falls, SD, USA | Leased | 296,000 | Manufacturing, Sales, Service, Office | | Shanghai, China | Leased | 157,000 | Manufacturing, Sales, Service, Office | - The company's obligations under its credit facility are secured by substantially all of its owned real property[178](index=178&type=chunk) [Part II](index=27&type=section&id=PART%20II) [Stockholder Matters and Equity Purchases](index=27&type=section&id=Item%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) Daktronics' common stock trades on Nasdaq, and the company repurchased **2.1 million** shares for **$29.5 million** in fiscal 2025 under its **$50.0 million** share repurchase program - The company's common stock is listed on The Nasdaq Global Select Market under the ticker DAKT, with **802** stockholders of record as of June 9, 2025[182](index=182&type=chunk) - During fiscal 2025, the company repurchased **2.1 million** shares of its common stock for a total cost of **$29.5 million**, with no shares repurchased in fiscal 2024 or 2023[185](index=185&type=chunk) - As of April 26, 2025, the company had **$9.9 million** of remaining capacity under its share repurchase program[185](index=185&type=chunk) [Management's Discussion and Analysis (MD&A)](index=29&type=section&id=Item%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) In fiscal 2025, Daktronics experienced a decline in net sales and profitability, reporting a **$10.1 million** net loss, driven by lower Live Events volumes and increased operating expenses, while pursuing a Business Transformation Plan - The company is focused on a Business Transformation Plan to grow revenue, expand operating margins to **10-12%**, and achieve **17-20%** returns on capital, having spent approximately **$6.8 million** on these efforts in fiscal 2025[201](index=201&type=chunk) - Market uncertainties, including potential U.S. import tariffs and changes in federal funding priorities, are creating challenges in predicting order timing and volume[193](index=193&type=chunk)[194](index=194&type=chunk) [Consolidated Performance Summary](index=32&type=section&id=Consolidated%20Performance%20Summary) For fiscal 2025, net sales decreased by **7.5%** to **$756.5 million**, resulting in a **$10.1 million** net loss, primarily due to lower Live Events volumes and a significant increase in G&A expenses from transformation and transition costs Fiscal Year 2025 vs. 2024 Performance | Metric | FY 2025 | FY 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $756.5M | $818.1M | ($61.6M) | (7.5)% | | Gross Profit | $195.5M | $222.4M | ($27.0M) | (12.1)% | | Operating Income | $33.1M | $87.1M | ($54.0M) | (62.0)% | | Net (Loss) Income | ($10.1M) | $34.6M | ($44.7M) | (129.2)% | | Diluted EPS | ($0.21) | $0.74 | ($0.95) | (128.4)% | | Orders | $781.3M | $740.2M | $41.2M | 5.6% | - The decrease in net sales was mainly due to lower volumes in the Live Events business unit because of order timing and buildable backlog[208](index=208&type=chunk) - General and administrative expenses rose by **48.9%**, primarily due to **$13.9 million** in professional fees for business transformation and corporate governance, and **$2.6 million** in management transition costs[215](index=215&type=chunk) - Other expense increased significantly due to a **$15.5 million** provision for losses on loans to equity method affiliates[219](index=219&type=chunk) [Reportable Segment Performance Summary](index=35&type=section&id=Reportable%20Segment%20Performance%20Summary) In fiscal 2025, Live Events sales and contribution margin significantly declined, while Commercial and High School segments saw order growth and improved margins, and International continued to operate at a loss - Live Events sales decreased by **$47.0 million** (**13.9%**) and contribution margin fell by **$33.3 million** (**39.2%**) due to lower buildable backlog and sales mix differences[222](index=222&type=chunk)[226](index=226&type=chunk) - Commercial orders increased by **$41.3 million** (**30.6%**) due to market adoption of digital displays, with contribution margin improving by **$4.8 million** (**28.6%**) due to a favorable product mix[222](index=222&type=chunk)[225](index=225&type=chunk) - High School Park and Recreation orders grew by **$27.6 million** (**18.6%**) as schools increasingly adopt larger video solutions[222](index=222&type=chunk)[227](index=227&type=chunk) - International orders increased by **$17.5 million** (**31.7%**), but the segment operated at a negative contribution margin of (**$3.5 million**)[222](index=222&type=chunk)[229](index=229&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) Daktronics maintained strong liquidity with **$127.5 million** in cash, driven by **$97.7 million** in operating cash flow, and expects **$22 million** in capital expenditures for fiscal 2026 Cash Flow Summary (FY 2025) | Activity | Cash Flow (in millions) | | :--- | :--- | | Operating Activities | $97.7 | | Investing Activities | ($23.8) | | Financing Activities | ($27.4) | - Cash and cash equivalents stood at **$127.5 million** as of April 26, 2025[234](index=234&type=chunk) - The company has a **$75.0 million** credit facility, with no borrowings against the **$60.0 million** ABL and an outstanding principal of **$12.4 million** on its mortgage loan as of April 26, 2025[233](index=233&type=chunk) - Projected capital expenditures for fiscal 2026 are approximately **$22 million**, focusing on manufacturing equipment, automation, and IT infrastructure[240](index=240&type=chunk) [Critical Accounting Estimates](index=38&type=section&id=Critical%20Accounting%20Estimates) The company's critical accounting estimates involve significant judgment in revenue recognition for custom contracts using the cost-to-cost method and estimating the **$35.8 million** warranty liability based on historical experience - Revenue for uniquely configured (custom) systems is recognized over time using the cost-to-cost input method, which requires significant management judgment in estimating total contract costs[244](index=244&type=chunk) - The accrued liability for warranty obligations was **$35.8 million** as of April 26, 2025, with this estimate based on historical experience and subject to change based on actual defect rates and repair costs[247](index=247&type=chunk)[248](index=248&type=chunk) [Market Risk Disclosures](index=39&type=section&id=Item%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Daktronics is exposed to foreign currency fluctuations, commodity price volatility, and tariffs, with a **10%** change in foreign exchange rates impacting pre-tax income by approximately **$0.4 million** - In fiscal 2025, **10.6%** of net sales were derived in currencies other than the U.S. dollar, and the company estimates a **10%** change in all foreign exchange rates would impact income before taxes by approximately **$0.4 million**[250](index=250&type=chunk) - The company faces significant commodity risk from its dependence on raw materials and components sourced globally, which are subject to price volatility, supply availability, and tariffs[255](index=255&type=chunk) - As of April 26, 2025, of the **$127.5 million** in cash, **$112.8 million** was denominated in USD and **$14.7 million** was in foreign currencies[253](index=253&type=chunk) [Financial Statements and Supplementary Data](index=41&type=section&id=Item%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section presents Daktronics' audited consolidated financial statements for fiscal 2025, including an unqualified auditor's opinion, detailed notes, and disclosures on critical accounting matters [Report of Independent Registered Public Accounting Firm](index=41&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP issued an unqualified opinion on Daktronics' financial statements and internal controls, identifying revenue recognition for uniquely configured contracts as a critical audit matter due to significant cost estimation judgments - The auditor, Deloitte & Touche LLP, issued an unqualified opinion, stating the financial statements are presented fairly and internal controls were effective[257](index=257&type=chunk)[258](index=258&type=chunk) - A Critical Audit Matter was identified related to revenue recognition for uniquely configured contracts, due to the significant judgments management must make to estimate total costs to complete these projects[262](index=262&type=chunk)[263](index=263&type=chunk) [Consolidated Financial Statements](index=43&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show total assets of **$502.9 million**, a net loss of **$10.1 million** for fiscal 2025, and strong operating cash flow of **$97.7 million**, reflecting changes from share repurchases and affiliate loan losses Consolidated Balance Sheet Highlights (in thousands) | Account | April 26, 2025 | April 27, 2024 | | :--- | :--- | :--- | | Total Current Assets | $381,451 | $401,949 | | Total Assets | $502,892 | $527,884 | | Total Current Liabilities | $172,005 | $192,296 | | Total Liabilities | $230,961 | $289,092 | | Total Stockholders' Equity | $271,931 | $238,792 | Consolidated Statement of Operations Highlights (in thousands) | Account | FY 2025 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | | Net Sales | $756,477 | $818,083 | $754,196 | | Gross Profit | $195,487 | $222,443 | $151,355 | | Operating Income | $33,118 | $87,115 | $21,388 | | Net (Loss) Income | $(10,121) | $34,621 | $6,802 | [Notes to the Consolidated Financial Statements](index=49&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes detail revenue recognition policies, segment performance, the full conversion of a **$25 million** convertible note, **$29.5 million** in share repurchases, a **$15.5 million** credit loss provision, and subsequent events including tariff reductions - The company's investment in affiliates (Miortech and XDC) is accounted for using the equity method, and during FY2025, a provision for expected credit losses of **$15.5 million** was recorded for a loan to an affiliate deemed uncollectible[286](index=286&type=chunk)[289](index=289&type=chunk) - The **$25.0 million** Convertible Note issued to Alta Fox was fully settled through forced conversions into common stock during fiscal 2025[376](index=376&type=chunk)[377](index=377&type=chunk) - The company repurchased **2,071 thousand** shares of common stock for **$29.5 million** in fiscal 2025 under its share repurchase program[383](index=383&type=chunk) - Subsequent to year-end, the U.S. government announced a significant reduction in tariffs on certain Chinese imports, which could favorably impact future costs, though no adjustments were made to the FY2025 financial statements[457](index=457&type=chunk) [Controls and Procedures](index=84&type=section&id=Item%209A.%20CONTROLS%20AND%20PROCEDURES) Management and the independent auditor concluded that Daktronics' disclosure controls and internal control over financial reporting were effective as of April 26, 2025, with no material changes reported - Management concluded that the company's disclosure controls and procedures were effective as of the end of the fiscal year[464](index=464&type=chunk) - Management's assessment concluded that the company's internal control over financial reporting was effective as of April 26, 2025[467](index=467&type=chunk) - The independent registered public accounting firm, Deloitte & Touche, LLP, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting[468](index=468&type=chunk)[471](index=471&type=chunk) [Part III](index=87&type=section&id=PART%20III) [Directors, Executive Compensation, and Corporate Governance](index=87&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%2014) This section incorporates information from the 2025 Proxy Statement regarding directors, executive compensation, corporate governance, security ownership, and principal accountant fees, including the company's Clawback Policy - Information regarding directors, executive officers, corporate governance, executive compensation, and security ownership is incorporated by reference from the company's forthcoming 2025 Proxy Statement[478](index=478&type=chunk)[480](index=480&type=chunk)[483](index=483&type=chunk) - The company has adopted a Clawback Policy in compliance with SEC and Nasdaq rules, allowing for the recoupment of incentive-based compensation from executive officers in the event of a material accounting restatement[481](index=481&type=chunk) [Part IV](index=89&type=section&id=PART%20IV) [Exhibits and Financial Statement Schedules](index=89&type=section&id=Item%2015.%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists all financial statements, schedules, and exhibits filed with the Form 10-K, encompassing corporate governance documents, material contracts, and required certifications - This section contains the list of all financial statements and exhibits filed with the Form 10-K, including governance documents, material contracts, and required certifications[487](index=487&type=chunk)[488](index=488&type=chunk)[489](index=489&type=chunk)

Financial Data and Key Metrics Changes - The company reported a strong finish to a transformational year with a 29% increase in backlog from Q3 and a 17% year-over-year increase in orders, totaling $50 million in new order flow booked in Q4 alone [16][41] - Adjusted operating income for 2025 was $50 million, down from a record $87 million in 2024, with an adjusted operating income margin of 6.6% compared to 10.6% in 2024 [37][39] - Operating cash flow more than doubled year-over-year, reaching $97.7 million, with cash at year-end increasing by 57% to $128 million [33][43] Business Line Data and Key Metrics Changes - In the Live Events segment, orders decreased 12% year-over-year, but the company expects continued growth due to enhanced products and services [20][21] - The Commercial business saw a 31% increase in orders year-over-year, with a 44% increase in Q4 compared to the same quarter in the previous year [21][22] - The Transportation segment experienced a 10% decrease in orders year-over-year but a 14% increase from Q4, driven by notable wins in multimillion-dollar projects [23][24] Market Data and Key Metrics Changes - International orders grew 32% year-over-year, with Q4 orders more than doubling from the previous year, driven by strong demand in advertising markets [26][27] - The company reported significant growth in the High School Park and Recreation business, with orders increasing 19% for the year and 33% for Q4 [28][29] Company Strategy and Development Direction - The company is focused on achieving higher operating margins of 10% to 12% and a return on invested capital (ROIC) target of 17% to 20% by fiscal year 2028 [49][50] - The transformation plan includes value-based pricing, revenue mix diversification, and new product introductions to drive growth [49][50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for technology-leading display solutions and the company's ability to remain flexible and competitive in the current macro environment [52][53] - The company is committed to executing its business and digital transformation plans while maintaining a strong market position [51][52] Other Important Information - The company incurred $16.5 million in non-recurring expenses related to transformation initiatives, with $7.5 million in Q4 [35][36] - The board approved a new $10 million share repurchase program, following a previous program [79] Q&A Session Summary Question: What is the outlook for revenue growth in FY 2026? - Management indicated that all markets are expected to show growth, aligning with the 7% to 10% compound annual growth rate target through FY 2028 [56][58] Question: What levers are being pulled to impact margins? - Management discussed implementing value-based pricing and driving operational efficiencies to improve overall performance and margins [60][61] Question: What is the status of the commercial segment and AV network expansion? - Management noted strong optimism in the commercial business, particularly in the out-of-home advertising market, and plans to aggressively grow the AV integrator space [62][63] Question: What are the expectations for business and digital transformation expenses in FY 2026? - Management stated that consulting fees for transformation initiatives are expected to be low moving forward, as the company has integrated the results into its operations [84][86]

Financial Data and Key Metrics Changes - The company reported a strong finish to a transformational year, with a 29% increase in backlog from Q3 and a 17% year-over-year increase [15][39] - Adjusted operating income for 2025 was $50 million, down from a record $87 million in 2024, with an adjusted operating income margin of 6.6% compared to 10.6% in 2024 [36][39] - Operating cash flow more than doubled year-over-year, with a 54.5% growth for the year, totaling $97.7 million [32][41] Business Line Data and Key Metrics Changes - In the Live Events segment, orders decreased 12% year-over-year, but the company expects continued growth due to new projects and repeat customers [20][18] - The Commercial business saw a 31% increase in orders for the year and a 44% increase in Q4 compared to the previous year, driven by strong demand in out-of-home advertising [21][22] - Transportation orders decreased 10% year-over-year but increased 14% from Q4, supported by notable wins in intelligent transportation systems [23][24] Market Data and Key Metrics Changes - International orders grew 32% year-over-year and more than doubled from Q4 of the previous year, with significant contributions from advertising orders in various countries [25][26] - The High School Park and Recreation business experienced record orders, growing 19% for the year and 33% for Q4, driven by strong adoption of video solutions [27][28] Company Strategy and Development Direction - The company is focused on achieving higher operating margins of 10% to 12% and a return on invested capital (ROIC) target of 17% to 20% by fiscal year 2028 [47] - The transformation plan includes value-based pricing, revenue mix diversification, and new product introductions to drive growth [48] - The company is committed to maintaining a strong balance sheet and investing in high-growth, high-margin business products [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about revenue growth in FY 2026, supported by a strong backlog and order flow [55][39] - The company is adapting to the tariff environment and remains flexible in its pricing and supply chain strategies [49][50] - Management emphasized the importance of executing the transformation plan and achieving long-term financial objectives [51][52] Other Important Information - The company incurred $16.5 million in non-recurring expenses related to transformation initiatives, with $7.5 million in Q4 [34][35] - A new $10 million share repurchase program was approved by the board, following a previous program [76] Q&A Session Summary Question: Revenue growth outlook for FY 2026 - Management indicated that all markets are expected to show growth, aligning with the 7% to 10% compound annual growth rate target through FY 2028 [55][56] Question: Margin outlook and tariff impacts - Management discussed implementing value-based pricing and driving operational efficiencies to improve margins, despite tariff uncertainties [57][58] Question: Update on commercial segment and AV network expansion - Management highlighted optimism in the commercial business, particularly in out-of-home advertising, and plans to aggressively grow the AV integrator space [60][61] Question: Working capital and capital allocation - Management stated that the primary use of capital will be for growth initiatives, product development, and digital transformation, with share repurchase also being considered [64][66] Question: Strength of international orders and future expectations - Management noted significant growth in international orders and a strong pipeline, which is expected to contribute to revenue growth in FY 2026 [72][73] Question: Future consulting fees related to transformation initiatives - Management confirmed that no additional consulting fees are expected for the completed transformation initiatives, but some new initiatives may arise [74][75]