
Financial & Operational Highlights This section provides an overview of Daktronics' fiscal year 2025 financial and operational performance, highlighting key achievements and reconfirmed long-term objectives FY2025 Performance Overview Daktronics reported FY2025 sales of $756.5 million and operating profit of $33.1 million, with a 5.6% increase in orders, 8% rise in backlog, and 55% increase in operating cash flow, while reconfirming long-term growth targets FY2025 Key Performance Indicators | Metric | FY2025 | FY2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $756.5M | $818.1M | -7.5% | | Operating Income (GAAP) | $33.1M | $87.1M | -61.9% | | Adjusted Operating Income | $49.6M | $87.1M | -43.0% | | Net (Loss) Income (GAAP) | ($10.1M) | $34.6M | -129.2% | | Adjusted Net Income | $40.1M | $59.7M | -32.8% | | Orders | $781.3M | $740.2M | +5.6% | | Year-End Product Backlog | $341.6M | $316.9M | +7.8% | | Operating Cash Flow | $97.7M | $63.2M | +54.5% | - The company reconfirmed its three-year forward objectives of 7-10% sales growth, 10-12% operating margin, and 17-20% ROIC1 Detailed Financial Analysis This section provides an in-depth analysis of the company's revenue, orders, profitability, balance sheet, and cash flow performance for fiscal year 2025 Revenue and Orders Analysis FY2025 net sales decreased 7.5% to $756.5 million due to lower Live Events volumes, while full-year orders grew 5.6% to $781.3 million, driven by strong demand in Commercial, High School Park and Recreation, and International segments Net Sales Performance (YoY) | Period | FY2025 | FY2024 | Change | | :--- | :--- | :--- | :--- | | Q4 Sales | $172.6M | $215.9M | -20.1% | | Full Year Sales | $756.5M | $818.1M | -7.5% | Order Growth (YoY) | Period | FY2025 | FY2024 | Change | | :--- | :--- | :--- | :--- | | Q4 Orders | $240.7M | $205.8M | +17.0% | | Full Year Orders | $781.3M | $740.2M | +5.6% | - The decrease in annual sales was primarily driven by the Live Events business unit due to order timing and buildable backlog10 - The year-end product backlog increased by 7.8% to $341.6 million, up from $316.9 million a year ago, due to the robust increase in Q4 orders6 Profitability Analysis FY2025 gross profit margin decreased to 25.8% due to sales mix and lower volume, while operating expenses rose 20.0% to $162.4 million due to $16.5 million in one-time costs, resulting in a GAAP net loss of $10.1 million - Full-year gross profit margin decreased to 25.8% in FY2025 from 27.2% in FY2024, attributed to sales mix differences and lower sales volume211 - FY2025 operating expenses increased by 20.0% YoY, primarily due to $16.5 million in unique expenses, including $7.1 million for transformation initiatives, $6.8 million for corporate governance, and $2.6 million for management transition12 Operating & Net (Loss) Income (FY2025 vs FY2024) | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | Operating Income (GAAP) | $33.1M | $87.1M | | Adjusted Operating Income | $49.6M | $87.1M | | Net (Loss) Income (GAAP) | ($10.1M) | $34.6M | | Adjusted Net Income | $40.1M | $59.7M | - The company recorded a provision for possible credit losses of $15.5 million in Q4 FY2025 related to affiliate loans16 Balance Sheet and Cash Flow Daktronics significantly improved its FY2025 financial position, ending with $127.5 million in cash, a 54.5% increase in operating cash flow to $97.7 million, and a 23.3% reduction in inventory, while converting debt and repurchasing stock - Cash, restricted cash, and marketable securities totaled $127.5 million at year-end, with only $12.0 million of long-term debt outstanding18 - Cash flow from operations was $97.7 million in FY2025, a 54.5% increase from $63.2 million in FY2024619 - Inventory levels decreased by 23.3% from the end of FY2024, reflecting successful business transformation initiatives to optimize inventory19 - The company issued 4.0 million shares to convert its convertible note and repurchased 2.1 million shares for $29.5 million during the fiscal year18 Business & Strategic Update This section outlines the company's ongoing business transformation program, its early benefits, and the strategic outlook including long-term objectives and tariff mitigation efforts Business Transformation Program Daktronics launched a business transformation program in FY2025, yielding early benefits in pricing, inventory, and input costs, with a major Q1 FY2026 rollout of a new Service software system to streamline processes - The transformation program began to yield benefits in the last four months of FY2025 through initiatives in pricing, inventory efficiency, and purchasing4 - The company's increased focus on working capital management has reduced accounts receivable and contract assets4 - In Q1 FY2026, the company rolled out its Service software system, a major milestone expected to streamline processes and improve customer service4 Outlook and Forward-Looking Statements Daktronics is positioned for FY2026 growth, supported by transformation efforts and a strong balance sheet, with a three-year plan focusing on indoor markets and service enhancements, while mitigating tariff uncertainties - The company reconfirmed its three-year financial objectives: 7-10% sales growth, 10-12% operating margin, and 17-20% ROIC1 - Strategic priorities include expanding presence in indoor markets, enhancing service offerings, and focusing on high-growth, high-profit sales channels9 - The tariff environment remains highly uncertain. The company is mitigating impacts through selective price adjustments, supply chain flexibility, and its global manufacturing footprint57 Consolidated Financial Statements This section presents the detailed consolidated statements of operations, balance sheets, and cash flows for fiscal years 2025 and 2024 Consolidated Statements of Operations This section presents the detailed unaudited income statement for Q4 and full fiscal year 2025, reporting net sales of $756.5 million and a net loss of $10.1 million for FY2025 Consolidated Statements of Operations (in thousands) | | Three Months Ended | Year Ended | | :--- | :--- | :--- | | | Apr 26, 2025 | Apr 27, 2024 | Apr 26, 2025 | Apr 27, 2024 | | Net sales | $172,551 | $215,880 | $756,477 | $818,083 | | Gross profit | $43,145 | $55,379 | $195,487 | $222,443 | | Operating (loss) income | ($1,740) | $19,427 | $33,118 | $87,115 | | (Loss) income before income taxes | ($13,438) | $7,167 | ($5,851) | $54,051 | | Net (loss) income | ($9,425) | $2,518 | ($10,121) | $34,621 | | Diluted (Loss) earnings per share | ($0.19) | $0.05 | ($0.21) | $0.74 | Consolidated Balance Sheets This section presents the detailed unaudited balance sheet as of April 26, 2025, showing total assets of $502.9 million, $127.5 million in cash, and total stockholders' equity of $271.9 million Consolidated Balance Sheet Highlights (in thousands) | | April 26, 2025 | April 27, 2024 | | :--- | :--- | :--- | | ASSETS | | | | Cash and cash equivalents | $127,507 | $81,299 | | Inventories | $105,839 | $138,008 | | Total current assets | $381,451 | $401,949 | | TOTAL ASSETS | $502,892 | $527,884 | | LIABILITIES & EQUITY | | | | Total current liabilities | $172,005 | $192,296 | | Long-term debt, net | $10,487 | $53,164 | | Total liabilities | $230,961 | $289,092 | | TOTAL STOCKHOLDERS' EQUITY | $271,931 | $238,792 | Consolidated Statements of Cash Flows This section provides the detailed unaudited statement of cash flows for FY2025, showing $97.7 million in net cash from operating activities and a net cash increase of $45.8 million Consolidated Statements of Cash Flows (in thousands) | | Year Ended Apr 26, 2025 | Year Ended Apr 27, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $97,713 | $63,241 | | Net cash used in investing activities | ($23,782) | ($21,306) | | Net cash (used in) provided by financing activities | ($27,449) | $15,122 | | NET INCREASE IN CASH | $45,829 | $56,988 | | Cash at beginning of period | $81,678 | $24,690 | | Cash at end of period | $127,507 | $81,678 | Supplemental Data & Reconciliations This section provides supplemental financial data, including net sales and orders by business unit, and reconciliations of non-GAAP financial measures Net Sales and Orders by Business Unit FY2025 order growth was led by International (+31.7%), Commercial (+30.6%), and High School Park and Recreation (+18.6%), while net sales declined across most segments, notably Live Events (-13.9%) FY2025 Net Sales by Business Unit (in thousands) | Business Unit | FY2025 Sales | FY2024 Sales | % Change | | :--- | :--- | :--- | :--- | | Commercial | $156,203 | $161,626 | (3.4)% | | Live Events | $291,484 | $338,508 | (13.9)% | | High School Park and Rec | $165,921 | $170,349 | (2.6)% | | Transportation | $81,061 | $85,390 | (5.1)% | | International | $61,808 | $62,210 | (0.6)% | FY2025 Orders by Business Unit (in thousands) | Business Unit | FY2025 Orders | FY2024 Orders | % Change | | :--- | :--- | :--- | :--- | | Commercial | $176,583 | $135,251 | 30.6% | | Live Events | $283,780 | $321,191 | (11.6)% | | High School Park and Rec | $176,097 | $148,505 | 18.6% | | Transportation | $72,315 | $80,107 | (9.7)% | | International | $72,572 | $55,117 | 31.7% | Non-GAAP Reconciliations This section provides reconciliations of non-GAAP financial measures, showing FY2025 adjusted operating income of $49.6 million and adjusted net income of $40.1 million after accounting for specific expenses and non-cash charges FY2025 Reconciliation of Adjusted Operating Income (in thousands) | | Amount | | :--- | :--- | | Operating income (GAAP) | $33,118 | | Corporate governance expenses | $6,825 | | Management transition | $2,614 | | Consultant related expenses | $7,085 | | Adjusted operating income (non-GAAP) | $49,642 | FY2025 Reconciliation of Adjusted Net Income (in thousands) | | Amount | | :--- | :--- | | Net (loss) income (GAAP) | $(10,121) | | Change in fair value of convertible note | $22,521 | | Allowance for credit losses on affiliate loan | $15,480 | | Other adjustments (governance, transition, etc.) | $12,227 | | Adjusted net income (non-GAAP) | $40,107 | - Free cash flow, a non-GAAP measure calculated as net cash from operations less capital expenditures, was $78.5 million for fiscal year 2025, compared to $46.4 million in fiscal 202437