Daktronics, Inc. Announces Next Steps in Ongoing Business Transformation Plan

Business Transformation and Strategic Initiatives - The company has announced the next phase of its business transformation plan aimed at accelerating profitable growth, increasing profit margins, and driving returns on invested capital in the mid-to-high teens, well above the company's cost of capital [1] - A Business Transformation Office (BTO) has been formed, including the CEO, leadership team, and senior executives from a global consulting firm, to drive strategic initiatives [2] - The Board has formed an ad hoc transformation committee, chaired by Howard Atkins, to oversee the execution of these initiatives [2] - The BTO is developing strategic initiatives to improve customer outcomes, deepen market penetration, achieve above-market growth, and enhance delivery and service efficiency [3] - The company aims to grow revenue faster than its addressable market, expand operating margins, and generate returns on capital consistently above its cost of capital [3] Leadership and Organizational Changes - Sheila Anderson, the current CFO since 2012, has been appointed to the newly created role of Chief Data and Analytics Officer to lead the company's digital transformation [4] - The Board has initiated a search for a new CFO with experience in business transformations to support the company's ROIC goals [3][4] - Sheila Anderson will continue as CFO until her successor is identified [4] Financial Performance and Outlook - During fiscal 2023 and 2024, the company significantly strengthened its balance sheet, reduced its backlog to normal levels, delivered record revenue and profit, and ended fiscal 2024 with liquidity of over $135 million [2] - The company expects fiscal 2025 Q2 revenue, gross profit, and operating income to be in line with analyst consensus estimates of$200 million, $49.7 million, and$11.6 million, respectively [7] - The company plans to release its fiscal Q2 earnings and host a conference call in early December to discuss results and management's expectations for the full fiscal year [5] Share Repurchase and Market Position - The company has approximately $29 million remaining under its existing share repurchase authorization and is evaluating opportunities to use and potentially augment this authorization [4] - Daktronics is the world's largest supplier of large-screen video displays, electronic scoreboards, LED text and graphics displays, and related control systems, with strong leadership positions in these markets [5] Digital Transformation and Market Expansion - The company's digital transformation is a key enabler of its strategic initiatives, aiming to provide better customer outcomes, deeper market penetration, and more efficient delivery and service [3] - The company operates in four domestic business units (Live Events, Commercial, High School Park and Recreation, and Transportation) and one International business unit, serving customers globally [5]