Daktronics(US:DAKT)2023-03-08 18:36Financial Data and Key Metrics Changes - Operating income for Q3 fiscal 2023 was $7.1 million, representing 3.8% of sales, while adjusted operating income was $11.7 million, or 6.3% of adjusted operating margin [3] - Net sales increased by 32.5% to $185 million in Q3 fiscal 2023 compared to $140 million in Q3 fiscal 2022 [3] - Gross profit as a percentage of net sales rose to 22.6% in Q3 fiscal 2023 from 16% a year earlier [4] - Operating expenses increased by 22.9% to $34.6 million in Q3 fiscal 2023 compared to $28 million in Q3 fiscal 2022 [20] Business Line Data and Key Metrics Changes - Orders for the third quarter of fiscal 2023 decreased by 30.9% compared to Q3 fiscal 2022, attributed to a decline in pent-up demand and timing differences in large project bookings [3][4] - The International Business Unit experienced lower orders due to softening markets influenced by exchange rates and geopolitical conditions [4] Market Data and Key Metrics Changes - The backlog at the end of Q3 fiscal 2023 was historically high at $429 million, supporting production stability [4][10] - The company noted that supply chain disruptions have started to ease, which is expected to normalize inventory levels in the coming quarters [5][21] Company Strategy and Development Direction - The company is focused on reducing backlog to improve lead times and selectively pricing projects to manage costs effectively [10][11] - Investments of $21.8 million in capital expenditures were made to expand manufacturing capacity and automation [9] - The company is exploring additional ways to improve its long-term liquidity profile through a review of structure and financing options [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about greater stability in production and overall business as the pandemic's impact lessens [10] - The company anticipates growth in the High School Park and Recreation business due to increased adoption of video displays [11] - Management acknowledged ongoing geopolitical uncertainties but expects reduced volatility in the coming months [11][12] Other Important Information - A noncash goodwill impairment charge of $4.6 million was recorded due to the carrying value of certain reporting units exceeding their fair values [20] - The working capital ratio was reported at 1.6:1, with a focus on cash management as part of the liquidity enhancement plan [21] Q&A Session Summary - No questions were raised during the Q&A session, and the conference call concluded without further inquiries [6][16]