Daktronics Comments on Press Release and Litigation from Alta Fox Capital Management

Core Viewpoint - Daktronics is committed to defending its governance structure against Alta Fox's litigation while emphasizing its long-term commitment to all shareholders and the proposed reincorporation to Delaware for enhanced governance features [1][5][13]. Group 1: Company Performance and Governance - Over the past five years, Daktronics has generated annualized, compounded total returns for shareholders exceeding 23%, with a stock price increase of over 110% in the last twelve months [1]. - The proposed reincorporation to Delaware aims to adopt modern governance features, including a majority voting standard for uncontested director elections and proxy access, which the Board believes will strengthen shareholder rights [2][4]. - The Board asserts that the elimination of cumulative voting will prevent a single minority shareholder, like Alta Fox, from unduly influencing director elections, thereby ensuring a cohesive Board elected by a majority of shareholders [3][4]. Group 2: Alta Fox's Actions and Intentions - Alta Fox is accused of seeking court intervention to prevent shareholders from voting on the reincorporation, indicating a lack of genuine interest in the majority's views [5]. - The Board offered to include Alta Fox's chosen director candidate and enhance governance frameworks, but Alta Fox rejected these proposals, suggesting ulterior motives [6][10]. - Alta Fox has expressed a desire for liquidity on its Daktronics stake, yet its public stance promotes the company as potentially worth $40 per share, contrasting with its private demands for liquidity at lower prices [9][11][12]. Group 3: Board's Commitment and Future Plans - The Board is determined to protect the interests of Daktronics and its shareholders, advocating for a governance framework that benefits the majority rather than a vocal minority [13][14]. - The company intends to continue executing its business transformation plan, which is believed to create sustainable long-term value for all shareholders [14].