Daktronics reports $13 million quarterly loss, presents plan to move forward
Brookings-based Daktronics Inc. says it is working to fullfill orders and improve their profitability.
The electronic display and scoreboard manufacturer saw its stock price plummet last week after filing paperwork to delay the release of this earnings report.
The firm reported a loss in the fiscal second quarter as rising revenue was offset by soaring costs. Daktronics posted a net loss of $13 million for the three months ended October 29, compared with a profit of $2.4 million in the same period a year earlier. Sales were up to $187 million compared to $164 million last year.
The firm reported a loss in the fiscal second quarter as rising revenue was offset by soaring costs. Daktronics posted a net loss of $13 million for the three months ended October 29, compared with a profit of $2.4 million in the same period a year earlier. Sales were actually up to $187 million compared to $164 million last year.
Chairman and Chief Executive Officer Reece Kurtenbach says the company can’t guarantee that it won’t face additional disruptions or future liquidity needs that it can’t fund, which has raised “substantial doubt about our ability to continue as a going concern.”
Kurtenbach says sales continued to rise despite constraints to its capacity from significant and unusual parts shortages, labor challenges and pandemic-related operating disruptions.
He says Daktronics tried to keep delivery windows as close as possible to original committed dates, which sometimes added additional costs, according to the CEO. The company also spent aggressively securing inventory to fulfill orders.
Kutenbach says their plan includes completing and fulfilling orders in their $463 million backlog and obtaining additional sources of liquidity, with the consent of their lead banking partner.
The CEO says they know recent incidents have caused stress and concern for employees, stockholders and the communities where they are located. Kurtenbach says they believe their plan will bring them through this time and back to profitability. He says customers have not been canceling orders and they continue to get new orders.
Daktronics management is also evaluating the company’s disclosure controls and procedures as well as its internal control over financial reporting, and expects to find that they “were not effective as a result of material weaknesses.”
December 12, 2022
