For a Billboard Insider reader, the turnaround seemed to start with the news of a delayed earnings release back in early December 2022. For Daktronics though, their efforts had started much earlier than that, as they focused on shoring up supply chain issues, a large order backload and short term cash flow issues. What followed over the next six month were excellent results and a stock price which increased from $2.02.to $8.80 a share.
Daktronics Chief Financial Officer, Sheila Anderson, was a significant part of the leadership group tasked with managing through a difficult post pandemic time and Insider had a chance to talk with her about the Company, her background, the turnaround and looking forward.
Sheila, can you share your background and what led you to the CFO position at Daktronics?
I joined Daktronics in 2002 after working in public accounting and consulting businesses in the Minneapolis area. My contributions in leading and managing the accounting team as corporate controller; implementations of financial systems, processes and controls; and working collaboratively across the organization led me to the CFO role. I’m a life-long learner and earned my Masters in Business degree along the way to support and improve my strategic thinking and broadened my knowledge of business management.
Last year was very challenging for Daktronics but ended well with a solid turnaround. From your perspective, what would you say were the 3 key steps that led to the company’s turnaround?
If I had to choose three key areas to our success, they would be our Teams, Strategies, and our ability to Adapt.
Our teams are the key to our successes. Teams from every area of the company executed our strategies (both in place and new during the pandemic time) to weather the unprecedented business environment and conditions the pandemic brought. We utilized the current knowledge of these conditions and our predictions of the future to regularly adapt our strategies and actions to serve our customers and other stakeholders. Our system of communication and expectation setting provided the focus to execute to the strategies and any related adaptations over the past years.
We still occasionally hear from our readers that they are concerned about Daktronics’ lead times for digital boards and financial soundness. How would you answer those concerns?
We are operating and delivering to our customers expected lead times.
As I look back, like so many other companies, we experienced supply chain constraints during 2023 which impacted our ability to maintain our decades long history of consistently delivering to our customer expectations. Why? Many of our long-time suppliers of components we use to build displays and control systems extended their lead times, impacting our ability to manufacture a product. During that time, we faced challenges nearly every day of some component part not being delivered as promised – or they completely canceled our order. Without the parts, it is pretty hard to manufacture a display – and the stops and starts made us inefficient with our resources during those times creating the extended delays.
Our teams worked to obtain available components and onboard new suppliers, redesign solutions to have multiple part options to build them, deployed new manufacturing capacity and automation, and adopted pricing methodologies for the inflationary environment. Those actions along with the easing in the supply chain environment has positioned us to operate and deliver to our customers’ expected lead times today.
We have an experienced team and have made investments in our product line up, fulfillment capacity, and market development to support our global customers. These industry leading attributes along with a strong balance sheet and history of profitability provide financial soundness.
Do you believe that the Company’s current surge is sustainable into the future and why?
Per our research and expectations of Industry research, we expect the digital display market to grow. Daktronics serves a number of end markets using digital display systems and are positioned with the solutions we offer and continue to develop to capture this growth.
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