Daktronics(DAKT) - 2024 Q4 - Annual Results

Financial Performance - Net sales for Q4 fiscal 2024 reached $215.9 million, a 2.9% increase compared to Q4 fiscal 2023; full-year sales were $818.1 million, an 8.5% increase from the prior year[13] - Gross margin for Q4 improved by 90 basis points to 25.7% from 24.8% in the previous year; full-year gross profit margin increased by 710 basis points to 27.2%, the highest since 2009[13] - Operating income for Q4 grew 6.4% to $19.4 million, while full-year operating income quadrupled to $87.1 million compared to fiscal 2023[13] - Net income for Q4 was $2.5 million, a decrease from $21.4 million in Q4 fiscal 2023; full-year net income was $34.6 million compared to $6.8 million in the previous year[13] - Adjusted operating income for the fourth quarter of fiscal 2024 was $19,427 million, up from $18,263 million in the same quarter of fiscal 2023, representing a year-over-year increase of 6.4%[32] - Gross profit as a percentage of net sales increased to 25.7% in Q4 fiscal 2024 from 24.8% in Q4 fiscal 2023, and for the full fiscal year, it rose to 27.2% from 20.1%[38] - The operating margin for Q4 fiscal 2024 was 9.0%, compared to 8.7% in Q4 fiscal 2023, while the full fiscal year operating margin improved to 10.6% from 2.8%[52] - Adjusted net income for the three months ended April 27, 2024, was $12,766 million, down from $25,872 million in the same period last year[59] Orders and Backlog - Product order backlog was $316.9 million as of April 27, 2024, down from $400.7 million at the end of Q4 fiscal 2023[13] - New product and service orders for Q4 were $205.8 million, a 14.6% increase from $179.5 million in the prior year; full-year orders increased by 8.7% to $740.2 million[13] - Orders for Q4 fiscal 2024 increased by 14.6% compared to Q4 fiscal 2023, with full fiscal year orders up 8.7% driven by strong demand in Live Events and Transportation business units[51] - The Commercial segment's orders decreased by 12.4% to $34,084 million compared to $38,902 million in the prior year[57] Revenue by Segment - Live Events segment saw a revenue increase of 14.6%, reaching $104,906 million compared to $91,530 million in the prior year[57] - The International segment experienced a significant decline of 45.1%, with revenues dropping to $11,394 million from $20,744 million[57] - The Transportation segment reported a revenue increase of 30.6%, reaching $24,173 million from $18,509 million year-over-year[57] Expenses and Cash Flow - Operating expenses for Q4 were $36.0 million, a 6.1% increase from $33.9 million in Q4 fiscal 2023; full-year operating expenses rose to $135.3 million from $130.0 million[16] - Cash, restricted cash, and marketable securities totaled $81.7 million as of April 27, 2024, with long-term debt outstanding at $54.7 million[40] - The company generated $63.2 million from operations in fiscal 2024, significantly up from $15.0 million in fiscal 2023[44] - Total current liabilities decreased to $192,296 million from $210,163 million year-over-year[56] - Long-term debt, net, increased significantly to $53,164 million from $17,750 million in the previous year[60] - Free cash flow is emphasized as a key measure of operating performance, providing useful information for investors[58] Strategic Initiatives - The company launched a new Flip-Chip COB LED display family to enhance its product offerings in the growing narrow-pixel pitch market[2] - Daktronics aims to improve operational effectiveness by enhancing manufacturing utilization and aligning production schedules to lower overall costs[2] - The company is focused on strategic priorities for fiscal 2025 to enhance earnings power and improve its operating model[14] - The company plans to focus on digital transformation initiatives to modernize service systems and improve operational efficiency in fiscal 2025[50] - Management's strategy includes reallocating resources towards markets that generate returns significantly above the cost of capital[37] Tax and Valuation - The effective tax rate for fiscal 2024 was 35.9%, a decrease from 48.7% in fiscal 2023, primarily due to non-deductible expenses and valuation allowances[53] - The company reported a change in fair value of convertible notes amounting to $16,550 million, impacting long-term debt calculations[60] - Inventory levels decreased by 7.7% since the end of fiscal 2023, indicating improved inventory management[40]