Daktronics Inc. (NASDAQ:DAKT) Q2 2020 Earnings Conference Call - Final Transcript

Nov 27, 2019 • 11:00 am ET


Daktronics Inc. (NASDAQ:DAKT) Q2 2020 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to Daktronics Fiscal Year 2020 Second Quarter Earnings Results Conference Call. [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.

Sheila Anderson

Thank you. Good morning, everyone. Thank you for participating in our second quarter earnings conference call.

I would like to review our disclosures cautioning investors and participants that in addition to 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 conditions, changes in the competitive and market landscape including impacts of global trade discussions and policies, management of growth, timing and magnitude of future orders and contracts, fluctuations of margins, the introduction of new products and technologies 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 financial results for the second quarter and year-to-date of fiscal 2020, and the related time comparisons to fiscal 2019. As a reminder, fiscal 2020 is a 53-week year and fiscal 2019 was a 52-week year. The extra week of fiscal 2020 fell within the first quarter, resulting in six months ended being 27 weeks versus 26 weeks. Sales, orders and all areas of operating expenses were impacted with the additional week in the six-month comparison.

For the second quarter, overall orders remained relatively flat as compared to last year's second quarter. Orders increased in the International and High School Park and Recreation business units and decreased in the Transportation, Commercial and Live Events business units. For the year, orders were up 8.9 %. Live Events and International orders increased which were partly offset by declines and Transportation and High School Park and Recreation orders.

Commercial orders were flat year-over-year. The volatility of orders' timing for large projects and global accounts varies according to the needs of our customers and is the primary reason for changes in the quarterly and year-to-date comparisons. Each business unit was impacted by the additional week in the fiscal 26-month results.

For comparison, orders paced as at $12.5 million per week in fiscal 2020 as compared to $12 million during the same time last year or about a 4.8% increase. On a year-to-date basis, some additional highlights in the business units, with the largest level of order changes.

In Live Events, orders increased because of being a successfully winning several projects in the active college and university market, and winning multi-million dollar projects at a professional baseball stadium.

In the International business unit, we marketed to customers and geographies outside the U.S. and Canada, including areas like transportation and governmental sports and commercial. For the first half of the year, we have had continued success in global and