BROOKINGS, S.D., March 10, 2022 (GLOBE NEWSWIRE) — Daktronics, Inc. (DAKT) today reported its results for fiscal 2022 third quarter which ended January 29, 2022.

Q3 FY2022 financial highlights:

• Net sales of $139.6 million as a result of record orders and eased pandemic related site restrictions
• Operating loss of $5.7 million realized due to inflation in materials and freight costs, increased personnel spend, and a warranty charge
• Record level of orders of $214.8 million
• Product order backlog of $353 million(1), driven by record order volume and muted conversion to sales due to supply chain challenges

Reece Kurtenbach, chairman, president and chief executive officer stated, “Demand for our products and solutions were at record levels, reflecting the economic recovery from the global pandemic, the increasing adoption and use of audiovisual communication systems, and our reputation as a leading provider. We continue to navigate the parts and labor cost and availability headwinds. Sales volumes and gross profit levels were muted because of the supply chain disruptions, expediting and other efforts to react to schedule changes, and inflationary changes. To offset these cost trends, we began implementing price increases across the business for deliveries into next fiscal year.”

Outlook
Kurtenbach added, “We expect dynamic and volatile supply chain and labor conditions to persist through the calendar year.  As the environment evolves, we plan to adjust and adapt our pricing, production schedules and capacity levels to best serve our customers and improve profitability.  Over the long-term, we believe the audiovisual industry is poised for growth.  We are actively investing in new technologies and markets to make Daktronics and our solutions the preferred choice; positioning the business for long-term growth and increasing value for our stakeholders.”

Third Quarter and Year to Date Results

Orders for the third quarter of fiscal 2022 increased 147.2 percent as compared to the third quarter of fiscal 2021. Each business unit’s order volume grew through the first nine months of fiscal 2022 reflecting the recovery from the impact of the global pandemic among our customers.

Net sales increased by 48.2 percent in the third quarter of fiscal 2022 as compared to the third quarter of fiscal 2021. Net sales for the nine months ended January 29, 2022 increased by 22.9 percent as compared to the same period one year ago. Sales growth was driven by increased orders. Material supply and labor shortages are creating an increase in lead times and extending the timing of converting some orders to sales in the near-term. This has contributed to a larger than typical backlog.

Gross profit as a percentage of net sales was 16.0 percent for the third quarter of fiscal 2022 as compared to 25.4 percent a year earlier and 19.3 percent for the nine months ended January 29, 2022, as compared to 25.5 percent for the nine months ended a year earlier. The decline in gross profit percentage in fiscal 2022 is primarily related to the ongoing supply chain disruptions and inflationary challenges in materials, freight, and personnel related costs, the difference in sales mix between periods, a warranty charge, and other factors experienced during fiscal 2021.  Factors impacting gross profit in the third quarter of fiscal 2021 included a positive $2.1 million or 2.2 percent gross profit impact from a litigation claim reversal and adjustments to operations because of the COVID-19 pandemic.

Operating expenses for the third quarter of fiscal 2022 were $28.0 million, compared to $24.2 million for the third quarter of fiscal 2021 or an increase of 15.7 percent and $82.4 million for the nine months ended January 29, 2022, as compared to $77.0 million for the same nine month period in fiscal 2021. The increases were primarily personnel related expenses.

Operating loss as a percent of sales for the quarter was 4.1 percent as compared to an operating loss as a percent of sales of 0.3 percent during the third quarter of fiscal 2021 and operating income as a percentage of sales of 1.0 percent for the nine months ended January 29, 2022, as compared to 4.4 percent for the nine months ended a year prior.

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