Daktronics, Inc. Announces 2025 Fiscal Third Quarter Results & Leadership Transition

Core Insights - Daktronics, Inc. announced a leadership transition with Reece Kurtenbach stepping down as Chairman, President, and CEO, transitioning to an advisory role, while Brad Wiemann has been appointed as Interim CEO [4][8] - The company reported a fiscal Q3 2025 net loss of $17.2 million, a significant decline from a net income of$ 10.7 million in the same quarter of the previous year, reflecting challenges in various business units [5][48] - Despite a decrease in net sales by 12.2% year-over-year to $149.5 million, the company maintained a gross profit margin of 24.6%, slightly up from 24.5% in the prior year [5][16] Financial Performance - Orders for the third quarter decreased by 2.7% compared to the same period last year, primarily due to declines in Live Events, High School Park and Recreation, and Transportation business units [14] - The company achieved cash flows from operations of$ 12.0 million for the fiscal third quarter and $74.8 million for the first nine months of fiscal 2025 [5][23] - Operating expenses increased to$ 40.4 million in Q3 2025, up from $33.7 million in Q3 2024, driven by investments in IT and digital transformation [17] Business Transformation and Strategy - Daktronics is undergoing a business transformation aimed at achieving revenue growth faster than the addressable market, which is estimated to be in the 7-10% range, and expanding operating margins to a sustainable 10-12% by fiscal 2028 [10][11] - The company has initiated a search for a permanent CEO and appointed Howard Atkins as Acting CFO and Chief Transformation Officer to support ongoing transformation efforts [7][8] - The transformation plan includes prioritizing profitable sales channels, driving down product and structural costs, and enhancing operational efficiencies [11][12] Market Position and Outlook - The company remains a leader in the digital display systems market, with strong long-term drivers for growth despite recent challenges from U.S. government policies and project booking delays [3][10] - Daktronics has a product order backlog of$ 273.2 million as of January 25, 2025, indicating potential for future revenue despite current declines [5] - The company aims to leverage its market leadership and technical capabilities to capture growth opportunities in the global market [9][10]