Daktronics Reaches Agreement to Extend Near-Term Credit Facility Maturity
Jan. 25, 2023 9:04 AM ET Daktronics, Inc. (DAKT)
GlobeNewswire BROOKINGS, S.D., Jan. 25, 2023 (GLOBE NEWSWIRE) — Daktronics, Inc. (DAKT) today announced it has entered into an amendment to its credit agreement with its current lender, U. S. Bank National Association, to extend the maturity of $10 million of its $45 million credit facility to May 1, 2023. The remaining $35 million of the credit facility matures on April 29, 2025. The extension of liquidity is the result of the efforts of an independent Strategy and Financing Review Committee of the Daktronics Board of Directors (the “Committee”), which was formed in December 2022, to address the Company’s near-term credit needs and to examine alternatives for strengthening the Company’s longer-term financial structure and liquidity profile.
The Committee, comprised of the independent directors of the Company, is chaired by Howard I. Atkins, who joined the Board on December 7, 2022, at the recommendation of one of the Company’s largest shareholders, Prairieland Holdco, LLC. Mr. Atkins is the former Senior Executive Vice President and Chief Financial Officer of Wells Fargo & Company, where he was responsible for Wells Fargo’s financial management functions including during the financial crisis of 2008 and 2009. The Committee has hired financial and legal advisors to assist it with its activities.
“This maturity extension is the first step in a concerted effort on the part of the management team, overseen by the Committee,” said Mr. Atkins.” We are now shifting our focus to reviewing opportunities for additional longer-term liquidity to generate profitable growth. Together with our financial and legal advisors, our efforts include reviewing several financing proposals the Company has already received, as well as engaging with other potential financing sources.”
There can be no assurance that the Committee’s process will result in any transaction or other alternative outcome. There is no set timetable for the conclusion of this process, and the Company does not intend to disclose or provide an update concerning developments relating to this process until it determines that further disclosure is appropriate or necessary.
Insider’s take: Good news for Daktronics. The “going concern” label placed on Daktronics was mainly focused on liquidity issues, so the renewal of their agreement, especially with their current lender, could result in the dropping of going concern issues. We should also note that the Board Member heading the Strategy and Financing Review Committee, Howard Atkins, was recommended by Prairieland Hodlco who, as of July 2022 held 1.2 million shares of Daktronics stock. This compares to shareholder Alta Fox with shares of 1.75 million. The story will continue and Insider will continue to provide updates.
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