Daktronics, Inc. (Nasdaq:DAKT) today reported fiscal 2014 first quarter net sales of $138.7 million and net income of $5.7 million, or $0.13 per diluted share, compared to net sales of $132.9 million and net income of $6.7 million, or $0.16 per diluted share, for the first quarter of fiscal 2013. Fiscal 2014 first quarter orders were $159.3 million compared to $173.5 million for the first quarter of fiscal 2013. Backlog at the end of the fiscal 2014 first quarter was $167 million, compared with a backlog of $164 million a year earlier and $141 million at the end of the fourth quarter of fiscal 2013.
Free cash flow, defined as cash provided by operations less net purchases of property and equipment, was $(8.6) million for the first three months of fiscal 2014, compared to $15.2 million for the same period in fiscal 2013. Cash and marketable securities at the end of the first quarter of fiscal 2014 were $46.8 million, which compares to $64.7 million at the end of fiscal 2013 and $63.9 million at the end of the first quarter of fiscal 2013.
"We are pleased with our success in booking orders during the quarter. Last year's first quarter was a record level of orders, so it is a tough comparable. We were able to achieve a higher level of sales, and also ended with a slightly higher backlog as compared to the fiscal 2013 first and fourth quarters," said Jim Morgan, president and chief executive officer.
Gross profit levels were lower compared to the first quarter of fiscal 2013 due to inherent variability in gross profit levels typical with large projects. Operating expenses in the fiscal 2014 first quarter increased slightly as a percentage of sales to 19.4 percent.
- Orders in the Commercial business unit were down approximately 17 percent in the first quarter of fiscal 2014 compared to the first quarter of fiscal 2013. The decrease in orders was primarily the result of the volatility in the timing of orders in our digital billboard and our large video contract business.
- Orders in the Live Events business unit rose approximately 33 percent compared to the first quarter of fiscal 2013, and included orders for two large video display systems totaling approximately $20 million during the quarter.
- Orders in the Schools and Theatres business unit declined by approximately 17 percent for the first quarter of fiscal 2014 compared to the same period in fiscal 2013. Although the number of video projects for high schools was about the same as last year, the average selling price this year was less.
- Orders in the Transportation business unit were down approximately 56 percent compared to the same period in fiscal 2013, primarily as a result of booking the LAX Bradley International Terminal project worth spproximately $20 million during the first quarter of fiscal 2013. In comparing quarterly results, excluding the LAX project, orders increased by approximately $2 million.
- Orders in the International business unit were down approximately 6 percent over the first quarter of fiscal 2013. The decrease is due to the historic volatility in timing on large orders. We have had continued strong success in the Australian region and secured orders of approximately $7 million there during the quarter.
Reece Kurtenbach, who will become the CEO for the company on September 1, added, "We continued to see a strong pipeline in the worldwide marketplace during the first quarter, and we continue to be optimistic in our ability to secure the orders to support modest sales growth in fiscal 2014. We began shipping our new LED outdoor surface-mount technology during the first quarter of fiscal 2014 and are seeing strong interest in this product. We continue to focus on our strategic goals to improve operating margins, selecting initiatives across the company to increase gross profit margins and control operating expenses."
Daktronics has strong leadership positions in, and is the world's largest supplier of, large screen video displays, electronic
scoreboards, LED text and graphics displays, and related control systems. The company excels in the control of display systems, including those that require integration of multiple complex displays showing real-time information, graphics, animation, and video. Daktronics designs, manufactures, markets and services display systems for customers around the world in four domestic business units: Live Events, Commercial, Schools and Theatres and Transportation, and one International business unit. For more information, visit the company's World Wide Web site at: http://www.daktronics.com, e-mail the company at email@example.com, call (605) 692-0200 or toll-free (800) 843-5843 in the United States or write to the company at 201 Daktronics Dr., PO Box 5128, Brookings, S.D. 57006-5128.
Safe Harbor Statement
Cautionary Notice: In addition to statements of historical fact, this news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and is intended to enjoy the protection of that Act. These forward-looking statements reflect the Company's expectations or beliefs concerning future events. The Company cautions that these and similar statements involve risk and uncertainties which could cause actual results to differ materially from our expectations, including, but not limited to, changes in economic and market conditions, management of growth, timing and magnitude of future contracts, fluctuations in margins, the introduction of new products and technology, the impact of adverse weather conditions and other risks noted in the Company's SEC filings, including its Annual Report on Form 10-K for its 2013 fiscal year. Forward-looking statements are made in the context of information available as of the date stated. The Company undertakes no obligation to update or revise such statements to reflect new circumstances or
unanticipated events as they occur.
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