Daktronics Inc. (NASDAQ:DAKT) Q3 2018 Earnings Conference Call - Final Transcript

Feb 19, 2018 • 06:30 pm ET

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Daktronics Inc. (NASDAQ:DAKT) Q3 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day ladies and gentlemen and welcome to the Daktronics Fiscal Year 2018 Third Quarter Earnings Results Conference Call. As a reminder, this conference is being recorded today, Tuesday, February 20, 2018, and is available on the Company's website at www.daktronics.com. [Operator Instructions]

I would now like to turn the conference over to Ms. Sheila Anderson, Chief Financial Officer for Daktronics, for some introductory remarks. Please go ahead, Sheila.

Executive
Sheila Anderson

Thank you. Good morning, everyone. Thank you for participating in our third quarter earnings conference call. I would like to review our disclosures cautioning investors and participants that in addition to the statements of historical facts, we will be discussing forward-looking statements reflecting our expectations and plans about our future financial performance and future business opportunities. All forward-looking statements involve risks and uncertainties, which may be out of our control and may cause actual results to differ materially. Such risks include changes in economic condition, changes in the competitive and market landscape, management of growth, timing and magnitude of future contracts, fluctuations of margins, the introduction of new products and technology and other important factors, as noted and detailed in our 10-K and 10-Q SEC filings.

With that, let me highlight some of the financials for the quarter.

Orders for the third quarter of fiscal 2018 were $126 million as compared to last year's third quarter of a $143 million. Most of the order fluctuation this quarter is attributable to the timing volatility of large projects and account based business in the Commercial, Live Events, Transportation and International business units. As a reminder, both orders and net sales fluctuate due to the impact of our large project and account-based business. Large projects include multimillion dollar orders of display systems for professional sports facilities, colleges and universities, and spectacular projects. Account-based orders can also be multimillion dollars in size for national or global customers, most in the out-of-home advertising space. Our business also fluctuates seasonally, based on the sports market and construction cycles and is dependent on various schedules based on our customers' needs.

Sales for the third quarter of fiscal 2018 were $130 million as compared to $116 million last year. Sales increased in Live Events, Transportation and International business units and decreased in the Commercial and High School Park and Recreation business units quarter-over-quarter.

Live Events contributed to the sales increase as the number of projects for professional sports was up as compared to last year, specifically projects for spring baseball facilities. Continued market demand and delivery timings also contributed to sales increases in Transportation and International business units.

Commercial business unit sales declined compared to last year due to lower order volumes of on-premise displays, the timing and delivery of large projects in the spectacular niche, partially offset by an increase in the billboard niche due to timing of customer demands as compared to last year. High School Park and Recreation business unit sales decreased compared to last year due to timing as well as customer demand.

Gross profit was