# DAKTRONICS INC /SD/ (DAKT)

Informational only - not investment advice.

CIK: 0000915779
SIC: 3990 Miscellaneous Manufacturing Industries
SIC breadcrumb: [Manufacturing](/division/D/) > [SIC Major Group 39](/major-group/39/) > [SIC 3990 Miscellaneous Manufacturing Industries](/industry/3990/)
Latest 10-K filed: 2025-06-25
SEC page: https://www.sec.gov/edgar/browse/?CIK=915779
Filing source: https://www.sec.gov/Archives/edgar/data/915779/000091577925000102/dakt-20250426.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 756477000 | USD | 2025 | 2025-06-25 |
| Net income | -10121000 | USD | 2025 | 2025-06-25 |
| Assets | 502892000 | USD | 2025 | 2025-06-25 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-06-25. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000915779.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue |  |  |  | 569,704,000 | 608,932,000 | 482,033,000 | 610,970,000 | 754,196,000 | 818,083,000 | 756,477,000 |
| Net income | 2,061,000 | 10,342,000 | 5,562,000 | -958,000 | 491,000 | 10,926,000 | 592,000 | 6,802,000 | 34,621,000 | -10,121,000 |
| Operating income | 2,495,000 | 15,421,000 | 12,460,000 | -4,728,000 | -167,000 | 17,108,000 | 4,046,000 | 21,388,000 | 87,115,000 | 33,118,000 |
| Gross profit | 121,019,000 | 140,415,000 | 145,669,000 | 130,294,000 | 138,700,000 | 120,583,000 | 116,697,000 | 151,355,000 | 222,443,000 | 195,487,000 |
| Diluted EPS | 0.05 | 0.23 | 0.12 | -0.02 | 0.01 | 0.24 | 0.01 | 0.15 | 0.74 | -0.21 |
| Operating cash flow | 13,283,000 | 39,407,000 | 30,361,000 | 29,546,000 | 10,808,000 | 66,212,000 | -27,035,000 | 15,024,000 | 63,241,000 | 97,713,000 |
| Capital expenditures | 17,056,000 | 8,502,000 | 18,127,000 | 17,268,000 | 18,091,000 | 7,891,000 | 20,376,000 | 25,385,000 | 16,980,000 | 19,494,000 |
| Share buybacks | 0.00 | 1,825,000 | 0.00 | 0.00 | 5,636,000 | 0.00 | 3,184,000 | 0.00 | 0.00 | 29,474,000 |
| Assets | 349,948,000 | 355,433,000 | 358,800,000 | 349,216,000 | 372,651,000 | 375,164,000 | 440,876,000 | 468,104,000 | 527,884,000 | 502,892,000 |
| Stockholders' equity | 201,067,000 | 198,286,000 | 197,616,000 | 187,663,000 | 176,980,000 | 193,554,000 | 191,564,000 | 200,878,000 | 238,792,000 | 271,931,000 |
| Cash and cash equivalents | 28,328,000 | 32,623,000 | 29,727,000 | 35,383,000 | 40,398,000 | 77,590,000 | 17,143,000 | 23,982,000 | 81,299,000 | 127,507,000 |
| Free cash flow | -3,773,000 | 30,905,000 | 12,234,000 | 12,278,000 | -7,283,000 | 58,321,000 | -47,411,000 | -10,361,000 | 46,261,000 | 78,219,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin |  |  |  | -0.17% | 0.08% | 2.27% | 0.10% | 0.90% | 4.23% | -1.34% |
| Operating margin |  |  |  | -0.83% | -0.03% | 3.55% | 0.66% | 2.84% | 10.65% | 4.38% |
| Return on equity | 1.03% | 5.22% | 2.81% | -0.51% | 0.28% | 5.64% | 0.31% | 3.39% | 14.50% | -3.72% |
| Return on assets | 0.59% | 2.91% | 1.55% | -0.27% | 0.13% | 2.91% | 0.13% | 1.45% | 6.56% | -2.01% |
| Current ratio | 2.02 | 1.97 | 2.01 | 1.89 | 1.73 | 1.81 | 1.49 | 1.63 | 2.09 | 2.22 |

## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-04. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000915779.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q1 | 2021-07-31 |  |  | 0.08 | reported discrete quarter |
| 2022-Q2 | 2021-10-30 |  |  | 0.05 | reported discrete quarter |
| 2022-Q3 | 2022-01-29 |  |  | -0.10 | reported discrete quarter |
| 2022-Q4 | 2022-04-30 | 162,203,000 | -1,117,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2023-Q1 | 2022-07-30 | 171,920,000 | -5,326,000 | -0.12 | reported discrete quarter |
| 2023-Q2 | 2022-07-30 |  | -5,326,000 |  | reported discrete quarter |
| 2023-Q2 | 2022-10-29 | 187,439,000 |  | -0.29 | reported discrete quarter |
| 2023-Q3 | 2022-10-29 |  | -12,984,000 |  | reported discrete quarter |
| 2023-Q3 | 2023-01-28 | 184,975,000 |  | 0.08 | reported discrete quarter |
| 2023-Q4 | 2023-04-29 | 209,862,000 | 21,399,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2023-07-29 | 232,531,000 | 19,196,000 | 0.42 | reported discrete quarter |
| 2024-Q2 | 2023-07-29 |  | 19,196,000 |  | reported discrete quarter |
| 2024-Q2 | 2023-10-28 | 199,369,000 |  | 0.05 | reported discrete quarter |
| 2024-Q3 | 2023-10-28 |  | 2,165,000 |  | reported discrete quarter |
| 2024-Q3 | 2024-01-27 | 170,303,000 |  | 0.09 | reported discrete quarter |
| 2024-Q4 | 2024-04-27 | 215,880,000 | 2,518,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2024-07-27 | 226,088,000 | -4,946,000 | -0.11 | reported discrete quarter |
| 2025-Q2 | 2025-11-01 | 229,253,000 | 17,481,000 | 0.35 | reported discrete quarter |
| 2025-Q3 | 2025-11-01 |  | 17,481,000 |  | reported discrete quarter |
| 2025-Q3 | 2026-01-31 | 181,871,000 |  | 0.06 | reported discrete quarter |

## Macro Cross-References
- [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit
- [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food
- [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy
- [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter
- [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index
- [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate
- [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate
- [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio
- [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed
- [CE16OV](/indicator/CE16OV/): Employment Level
- [ICSA](/indicator/ICSA/): Initial Claims
- [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm
- [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period
- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units
- [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade
- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income
- [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate
- [M2SL](/indicator/M2SL/): M2
- [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance
- [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States
- [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States
- [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States
- [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States
- [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States
- [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized
- [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized
- [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks
- [GDP](/indicator/GDP/): Gross Domestic Product
- [GPDI](/indicator/GPDI/): Gross Private Domestic Investment
- [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment
- [PCEC](/indicator/PCEC/): Personal Consumption Expenditures
- [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services
- [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt
- [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit
- [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts
- [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures
- [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing
- [USCONS](/indicator/USCONS/): All Employees, Construction
- [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade
- [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities
- [USGOVT](/indicator/USGOVT/): All Employees, Government
- [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private
- [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods
- [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- [BUSINV](/indicator/BUSINV/): Total Business Inventories
- [EXPGS](/indicator/EXPGS/): Exports of Goods and Services
- [IMPGS](/indicator/IMPGS/): Imports of Goods and Services
- [IR](/indicator/IR/): Import Price Index (End Use): All Commodities
- [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/915779/000162828026014553/dakt-20260131.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high
Filing date: 2026-03-04
Report date: 2026-01-31

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This section entitled "Management’s Discussion and Analysis of Financial Condition and Results of Operations" (“MD&A”) is intended to provide a reader of our financial statements with a narrative from the perspective of management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. The MD&A provides a narrative analysis explaining the reasons for material changes in the (i) financial condition of Daktronics, Inc. and its subsidiaries (the "Company", "Daktronics", "we", "our", or "us") during the period from the most recent fiscal year-end, April 26, 2025, to and including January 31, 2026; and (ii) results of operations of the Company during the current fiscal period(s) as compared to the corresponding period(s) of the preceding fiscal year.

This Quarterly Report on Form 10-Q, including the MD&A, contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect our current views with respect to future events and financial performance. The words "may," "might," "would," "could," "should," "will," "expect," "estimate," "anticipate," "believe," "intend," "plan," "forecast," "project," and similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any and all forecasts and projections in this document are “forward-looking statements” and are based on management’s current expectations or beliefs. From time to time, we may also provide oral and written forward-looking statements in other materials we release to the public, such as press releases, presentations to securities analysts or investors, or other communications by us. Any or all forward-looking statements in this Quarterly Report on Form 10-Q and in any public statements we make could be materially different from actual results. Accordingly, we wish to caution investors that any forward-looking statements made by or on behalf of us are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. Important factors that may cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, changes in economic and market conditions, management of growth, timing and magnitude of future contracts, orders, and capital investment projects, fluctuations in margins, interest rate risk, the introduction of new products and technology, the impact of adverse weather conditions, increased regulation, the imposition of tariffs, trade wars, the availability and costs of raw materials, components, and shipping services, geopolitical and governmental actions, including the U.S. federal government shutdown, expansion into new geographical markets, the Company’s recent leadership transition, transformation initiatives, future strategy, and the other risks, trends, and uncertainties described more fully in the Company’s Annual Report on Form 10-K for the fiscal year ended April 26, 2025 (the "Form 10-K") filed with the Securities and Exchange Commission ("SEC"), this Quarterly Report on Form 10-Q, and other reports filed with or furnished to the SEC by the Company.

We also wish to caution investors that other factors might in the future prove to be important in affecting our results of operations. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

We undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by applicable law.

The MD&A should be read in conjunction with the Condensed Consolidated Financial Statements and related Notes included in Item 1 of Part 1 of this Quarterly Report on Form 10-Q, the Form 10-K (including the information presented therein under "Item 1A. Risk Factors" of Part I), and other reports filed with or furnished to the SEC by the Company.

The quarter-over-quarter comparisons in this MD&A are as of and for the fiscal quarters ended January 31, 2026 and January 25, 2025 unless otherwise stated.

Non-GAAP Financial Measures

Contribution margin, which is a financial measure that is not defined under accounting principles generally accepted in the United States (“GAAP”), is utilized by management to evaluate segment profitability and guide resource allocation decisions. It is defined as gross profit less selling expenses. Selling expenses primarily include personnel-related costs, travel and entertainment, marketing expenditures (such as showroom operations, product demonstrations, depreciation and

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maintenance, conventions, and trade shows), costs associated with customer relationship management and marketing systems, bad debt expense, third-party commissions, and other related expenses.

In addition to gross profit, management considers contribution margin a meaningful metric for assessing the financial performance of individual segments. We believe this measure provides investors with a useful view of our segment-level performance consistent with the approach used by management. By presenting contribution margin, we aim to enhance transparency and allow investors to better understand how we evaluate and manage our business operations.

Overview

We are recognized industry leaders in the design and manufacture of electronic scoreboards, programmable display systems, and large-screen video displays serving sporting, commercial, and transportation markets. We serve our customers by delivering high-quality standard display products as well as custom-designed and integrated systems.

Our product portfolio ranges from small-scale scoreboards and electronic displays to large, multimillion-dollar video display systems. These offerings are complemented by related control, timing, and sound systems. We are widely acknowledged for our technical expertise and our ability to design, market, manufacture, install, and service comprehensive integrated solutions that display real-time data, graphics, animation, and video.

Our operations encompass a full spectrum of activities, including marketing and sales, engineering and product design and development, manufacturing, technical contracting, professional services, and customer service and support.

The Company operates on a 52- or 53-week fiscal year ending on the Saturday closest to April 30. When April 30 falls on a Wednesday, the fiscal year ends on the preceding Saturday. Each fiscal quarter consists of 13 weeks, except in a 53-week fiscal year, where the first quarter includes 14 weeks. The nine months ended January 31, 2026, and January 25, 2025, included 40 and 39 weeks of operations, respectively.

Known Trends and Uncertainties

During fiscal 2025, we embarked on our business transformation program, which is focused on driving sustainable growth, margin improvement, and enhanced returns on invested capital. The Company’s transformation roadmap, developed through rigorous analysis and planning, is designed to support ambitious sales and profitability targets. Strong order growth during the quarter reflects ongoing market adoption of digital display technologies and the strength of Daktronics’ integrated product and service offerings.

The business environment remains dynamic, with several external factors continuing to influence customer demand and operational costs. The Company continues to be affected by U.S. government‑imposed tariffs on electronic components, aluminum, steel, and copper, as well as reciprocal tariffs imposed by foreign countries. In addition, changes to U.S. trade policy, including the elimination of the de minimis exemption for low‑value shipments, continued to increase logistics and import‑related costs. These tariffs may impact gross margins and could influence customer purchasing behavior, particularly for projects dependent on federal funding. In response, Daktronics is actively monitoring its pricing strategies and sourcing plans to mitigate these effects. However, the ultimate impact on demand remains uncertain.

On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed by the U.S. presidential administration under the International Emergency Economic Powers Act (“IEEPA”) exceeded presidential authority and were invalidated. Following the ruling, the administration implemented a temporary global tariff under alternative trade authorities and has indicated an intention to increase the rate to up to 15%. The timing, duration, and final rate of these tariffs remain uncertain. We continue to monitor these developments and assess the potential impact on our results of operations.

The global market for digital display systems continues to expand, driven by investments in manufacturing capacity and advancements in display and control technologies. The industry is seeing increased adoption of surface mount and chip-on-board technologies, particularly for narrow pixel pitch (NPP) and micro-LED applications, as manufacturers and customers seek higher performance and efficiency. Innovations in software, artificial intelligence, and professional services are enhancing content creation, user interfaces, monitoring, and security.

We maintain a unique leadership position in our target markets, which are large, growing, and supported by resilient demand from customers seeking to enhance audience experiences in sports, commercial, and transportation environments. We are investing in capacity and resources to grow and deepen market penetration.

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To capitalize on this position, we continue to focus on digital and business transformation, cost structure optimization, and market expansion. In fiscal 2025, we established a Business Transformation Office ("BTO") to conduct a comprehensive review of our business, strategy, and operations. The BTO is developing strategic initiatives, enabled in part by our digital transformation, to deliver improved customer outcomes, deeper market penetration, above-market growth, and more efficient delivery, fulfillment, and service. These initiatives are structured to support our ambitious business transformation plan: revenue growth outpacing our addressable market, operating margins of 10–12%, and returns on capital of 17–20%, consistently exceeding our cost of capital.

The Company continues to monitor and adjust its capacity and resource levels in response to market conditions. Daktronics is expanding the Company’s global manufacturing network into Mexico, as part of its broader three-year strategic plan for improving profitable growth and increasing the overall agility of the company’s production capacity. The new facility is expected to be in production by the end of fiscal 2026.

There may be periods where sales and expenses are not fully aligned, particularly as investments in transformation and corporate governance are made. These investments may affect near-term profitability but are intended to support long-term value creation.

Despite ongoing uncertainties related to tariffs, geopolitical developments, and federal funding priorities, Daktronics believes that the fundamental drivers of the audiovisual industry remain strong. Increased adoption of LED display systems across industries, combined with the Company’s ongoing development of new technologies, services, and sales channels, are expected to support long-term growth.

RESULTS OF OPERATIONS

COMPARISON OF THE THREE MONTHS ENDED JANUARY 31

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) provides a narrative from the perspective of management relating to the financial condition, results of operations, liquidity, and other factors that may impact our financial performance.

The MD&A should be read in conjunction with the accompanying Consolidated Financial Statements and Notes to the Consolidated Financial Statements included in this Form 10-K.

Daktronics operates on a 52- or 53-week fiscal year, with our fiscal year ending on the Saturday closest to April 30 of each year. The fiscal years ended April 26, 2025, April 27, 2024, and April 29, 2023 contained operating results for 52 weeks.

The year-over-year comparisons in this MD&A are as of and for the fiscal years ended April 26, 2025 and April 27, 2024, unless stated otherwise. The comparison of fiscal 2024 with fiscal 2023, including the results of operations and liquidity, can be found in Item 7 section of our Annual Report on Form 10-K for fiscal 2024 filed with the SEC on June 26, 2024 under the sections entitled “Results of Operations - Consolidated Performance Summary” and “Results of Operations - Reportable Segment Performance Summary,” which sections are incorporated by reference herein.

Non-GAAP Measures

Contribution margin is a non-GAAP measure we use and consists of gross profit less selling expenses. Selling expenses consist primarily of personnel related costs, travel and entertainment expenses, marketing related expenses (showrooms, product demonstration, depreciation and maintenance, conventions and trade show expenses), the cost of customer relationship management/marketing systems, bad debt expenses, third-party commissions, and other expenses. In addition to gross profit, management uses contribution margin as another measure of assessing segment profitability and allocating selling resources to each segment. Management believes that contribution margin is useful to investors because it permits investors to view and evaluate our segment financial performance through the same lens as management.

Overview

We are industry leaders in designing and manufacturing electronic scoreboards, programmable display systems, and large screen video displays for sporting, commercial, and transportation applications. We serve our customers by providing high quality standard display products as well as custom-designed and integrated systems. We offer a complete line of products, from small scoreboards and electronic displays to large multimillion-dollar video display systems as well as related control, timing, and sound systems. We are recognized as a technical leader with the capabilities to design, market, manufacture, install, and service complete integrated systems displaying real-time data, graphics, animation, and video. We engage in a full range of activities: marketing and sales, engineering and product design and development, manufacturing, technical contracting, professional services, and customer service and support.

Known Trends and Uncertainties

During fiscal 2024, we converted pandemic-related, pent-up backlog into record levels of sales and gross profit. In fiscal 2025 and beyond, we are more dependent on the timing, size, and profitability profile of the orders we win and market conditions to be able to generate sales and gross profit at similar levels. We expect the expansion of the use of digital display systems in the global market over the coming years; however, recent governmental regulations and orders and related geopolitical reactions and changes to or uncertainty around federal funding priorities can impact customers’ willingness to invest in digital display systems, which can impact the timing and levels of orders. For example, announcements from the new United States presidential administration about increased and expansive import tariffs and

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federal funding priorities has created near-term uncertainty about economic conditions. In recent months, we have observed an increasing number of extended quote times, which we believe is partially attributable to these conditions. As a result, although quoting activity was high, order volume timing was more difficult to predict, which made predicting fiscal 2025 orders more difficult than in fiscal 2024.

In March and April 2025, the Trump Administration announced a series of additional special tariffs, some of which have been temporarily paused. The additional special tariffs in effect as of April 26, 2025 include tariffs of 10 percent on all or substantially all products imported by the Company and an additional tariff on substantially all products of Chinese origin. In addition, in April 2025, the Trump Administration announced a series of so-called “reciprocal” tariffs on dozens of countries with which the United States has a trade deficit. On April 9, 2025, the Trump Administration announced a 90-day pause in the implementation of these reciprocal tariffs (other than the reciprocal tariffs on China, which are discussed above). On May 14, 2025, following negotiations with China, the Trump Administration announced a new trade agreement under which both the United States and China agreed to reduce their additional tariffs while retaining a 10 percent baseline tariff during a 90-day suspension period.

On May 28, 2025, a three-judge panel of the United States Court of International Trade (“CIT”) held that President Trump’s recent imposition of tariffs pursuant to the International Emergency Economic Powers Act (the “IEEPA”) is unlawful. On May 29, 2025, in response to President Trump’s appeal of the CIT’s ruling, the United States Court of Appeals for the Federal Circuit issued an administrative stay of the decision while it considers President Trump’s appeal. This development introduces further uncertainty, as the long-term direction of U.S.-China trade policy remains contingent on ongoing negotiations and future compliance with the agreement. Competitors importing products from China will also be impacted by the Chinese tariffs. On May 30, 2025, the Trump Administration announced an increase in tariffs on steel and aluminum imports, raising the rates from 25 percent to 50 percent. This action was presented as part of a broader effort to support domestic industry and address national security concerns.

Following this, on June 10, 2025, a federal appeals court issued a stay on the lower court’s ruling against tariffs imposed under the IEEPA, allowing those tariffs to remain in effect while the appeal is under review. On June 12, 2025, the administration extended the 10 percent baseline “reciprocal” tariffs on most countries through July 9, 2025, and on Chinese-origin goods through August 12, 2025.

We expect that increases in tariffs will increase the Company’s cost of sales, although their timing and precise effects are unpredictable. In particular, if the additional reciprocal tariffs go into effect, the Company will incur substantial additional increases in its cost of sales, and sales volumes into the United States would likely decline. However, the Company is developing plans to mitigate the impact of these tariffs, as well as possible operational changes that could result in a change in the country of origin for certain of the Company’s products. Specifically, we are monitoring and adjusting pricing for our products and services carefully to account for these unpredictable dynamics. For more information about the impact of tariffs on the Company’s results of operations and financial condition, please see “Part I – Item 1A. Risk Factors - Geopolitical issues, conflicts, governmental actions, including the imposition of tariffs, changes in laws, regulations, and policies, and other global events could adversely affect our results of operations and financial condition” in this Form 10-K.

We have made global investments in manufacturing capacity and the advancement in display and control technologies. A majority of digital displays are constructed using standard surface mount display technology. Chip on board technologies are advancing for narrow pixel pitch (“NPP”) applications. Micro-LED technologies (also referred to as NPP) are being used and advanced, especially for displays installed for short viewing distances. Advancements continue in technologies related to digital displays used in professional services, including the use of artificial intelligence and other software which improve content creation, user interfaces, digital display monitoring systems, and security. We rely on a complex supply chain for raw material and component imports and the global distribution of our products. We are adopting our manufacturing, sourcing capabilities, and product development priorities for these evolving changes in market and technology trends.

Overall, we have a unique leadership position in our target markets, which are large, growing, and enjoy resilient demand driven by our customers’ desire to improve the audience experience in sports, commercial, and transportation environments. We are investing in capacity and resources to grow the business and penetrate markets.

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In addition, to capitalize on this position, we are focused on digital and business transformation, improving our cost structure, and further growing our markets. During fiscal 2025, we formed a the BTO, which has undertaken a comprehensive review of the Company’s business, strategy, and operations and is developing a set of strategic initiatives, enabled in part by the Company’s previously announced digital transformation, to provide even better outcomes for customers, deeper penetration of the Company’s current and adjacent market verticals, above-market growth, and more efficient delivery, fulfillment, and service. These initiatives, overseen by the BTO, were designed and structured to support our ambitious targets to grow revenue faster than our addressable market, expand operating margins to 10-12 percent, and generate returns on capital in the 17-20 percent range consistently above the Company’s cost of capital (the “Business Transformation Plan”). To accelerate these initiatives, we spent approximately $6.8 million for transformation efforts in fiscal 2025.

As our business has grown and become more complex, we have come to recognize the importance of evolving our corporate governance structure and how sound governance practices can facilitate better execution of our strategic commercial goals. Delaware is the legal domicile for most large, publicly traded companies, and its corporate law is well understood, clear, and predictable and provides strong stockholder rights and protections. On April 17, 2025, in an effort to further our Business Transformation Plan and for other strategic reasons, we changed our legal domicile from South Dakota to Delaware.

We carefully evaluate our capacity and resource levels to the conditions identified; however, there can be periods during which sales and expenses can be misaligned and periods in which we invest more in transformational and corporate governance activities, all impacting our profitability levels in the near-term.

We believe the audiovisual industry fundamentals of increased use of LED display systems across industries and our development of new technologies, services, and sales channels will drive long-term growth for our Company.

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RESULTS OF OPERATIONS

Consolidated Performance Summary

The following is an analysis of changes in key items included in the statements of operations for fiscal year 2025 as compared to fiscal year 2024.

2025

% of Net sales (1)

2024

% of Net sales (1)

Dollar Change (1)

Percent Change (1)

Net sales

$

756,477 

100.0 

%

$

818,083 

100.0 

%

$

(61,606)

(7.5)

%

Cost of sales

560,990 

74.2 

595,640 

72.8 

(34,650)

(5.8)

Gross profit

195,487 

25.8 

222,443 

27.2 

(26,956)

(12.1)

Operating expenses:

Selling

60,011 

7.9 

56,954 

7.0 

3,057 

5.4 

General and administrative

63,498 

8.4 

42,632 

5.2 

20,866 

48.9 

Product design and development

38,860 

5.1 

35,742 

4.4 

3,118 

8.7 

Total operating expenses

162,369 

21.5 

135,328 

16.5 

27,041 

20.0 

Operating income

33,118 

4.4 

87,115 

10.6 

(53,997)

(62.0)

Nonoperating income (expense):

Interest income (expense), net

1,347 

0.2 

(3,418)

(0.4)

4,765 

(139.4)

Change in fair value of convertible note

(22,521)

(3.0)

(16,550)

(2.0)

(5,971)

(36.1)

Other expense and debt issuance costs write-off, net

(17,795)

(2.4)

(13,096)

(1.6)

(4,699)

35.9 

(Loss) income before income taxes

(5,851)

(0.8)

54,051 

6.6 

(59,902)

(110.8)

Income tax expense

4,270 

0.6 

19,430 

2.4 

(15,160)

(78.0)

Net (loss) income

$

(10,121)

(1.3)

%

$

34,621 

4.2 

%

$

(44,742)

(129.2)

%

Diluted earnings per share

$

(0.21)

$

0.74 

$

(0.95)

(128.4)

%

Diluted weighted average shares outstanding

47,587

46,543

1,044

2.2 

%

Orders

$

781,347 

$

740,171 

$

41,176 

5.6 

%

(1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided. In addition, percentages may not add in total due to rounding.

Net Sales: The net sales decrease in fiscal 2025 was the result of lower volumes in each business unit, primarily driven by the Live Events business unit due to order timing and buildable backlog. The amount of revenue recognized associated with performance obligations satisfied in prior periods during the years ended April 26, 2025 and April 27, 2024 was immaterial.

For the year ended April 26, 2025, our operating income was negatively impacted by a net amount of 0.3 percent of overtime revenue, or $1.2 million. For the year ended April 27, 2024, our operating income was positively impacted by a net amount of 1.0 percent of overtime revenue, or $4.1 million. These changes are a result of changes in contract estimates

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related to projects in progress at the beginning of the respective period. These changes in estimates resulted primarily from favorable project execution of 0.8 percent of overtime revenue, or $2.8 million, reduced cost estimates, and contingencies that were relieved when conditions were resolved. Gross unfavorable changes in contract estimates were 1.1 percent of overtime revenue, or $4.0 million, and immaterial for the year ended April 26, 2025. For the year ended April 27, 2024, these changes in estimates resulted primarily from favorable project execution of 1.5 percent of overtime revenue, or $6.5 million, reduced cost estimates, and contingencies that were relieved when conditions were resolved. Gross unfavorable changes in contract estimates in fiscal 2024 were 0.6 percent of overtime revenue, or $2.4 million. See “Note 1. Nature of Business and Summary of Significant Accounting Policies” of the Notes to our Consolidated Financial Statements included in this Form 10-K for more information regarding revenue recognition.

Order volume growth is attributable to the continued use and market adoption of digital display technology and to our success in capturing existing and new customer orders in the Spectacular and Out‐of‐Home markets in our Commercial business unit. Additionally, there has been solid growth in the High School Parks and Recreation business unit due to continued expansion of video displays, as well as growth attributable to higher demand seen in the International business unit. As we are a project-based business, large-sized project orders can impact levels of orders. During fiscal 2025, fewer large-sized projects were booked to orders in the Live Events and Transportation business units because there were fewer large projects available in the market place.

Gross profit percentage decrease is attributable to sales mix differences between periods and a lower sales volume during fiscal 2025 as compared to fiscal 2024. Total warranty expense as a percent of sales decreased to 1.6 percent for fiscal 2025 as compared to 2.3 percent during fiscal 2024 primarily due to higher warranty expense in the Live Events and Transportation business in fiscal 2024 that did not occur in fiscal 2025.

In fiscal 2025, the amounts achieved for variable compensation and profit sharing linked to operating margins were immaterial. In fiscal 2024, the amounts achieved totaled $6.5 million, consisting of $3.1 million in cost of sales, $1.2 million in selling, $1.4 million in general and administrative, and $0.8 million in product design and development.

Selling expenses increased due to higher personnel related wages and benefits expenses to retain employees; travel and entertainment; marketing; IT tools; and increased commissions to support order growth.

General and administrative increased due to staffing levels for digital transformation strategies and increased professional fees as well as an increase in personnel costs related to management transition costs. During fiscal 2025, additional professional fees included consultant, legal, and advisory related expenses associated with business transformation initiatives and corporate governance matters, which totaled $13.9 million. Management transition costs totaled $2.6 million.

Product design and development increased primarily due to personnel-related expenses and for increased staffing levels. Our focus has been to advance product features aligned with customer needs and to reduce product costs. We focused these efforts on both standard product and control offerings and in new emerging areas, including micro-LED products and new control capabilities.

Interest income (expense), net increased primarily due to higher cash levels invested in interest-bearing accounts offsetting interest expense.

Change in fair value of Convertible Note results from accounting for the convertible note in the original principal amount of $25.0 million dated May 11, 2023 issued to Alta Fox Opportunities Fund L.P. (the “Convertible Note”) under the fair value option. The fair value change was primarily caused by force conversion of the entire Convertible Note in the third and fourth quarter of fiscal 2025. All amounts due under the Convertible Note were paid or satisfied in fiscal 2025.

Other expense and debt issuance costs write-off, net for fiscal 2025 as compared to the same period one year ago was primarily due to the provision for losses on loans to equity method affiliates of $15.5 million, compared to expensing $3.4 million of debt issuance costs related to the Convertible Note issuance and $6.4 million for impairments recorded for equity method affiliates in fiscal 2024.

Income tax expense decreased due to the year-over-year decrease in Income before income taxes. Our effective tax rate for fiscal 2025 was negative 73.0 percent. The effective income tax rate for fiscal 2025 was primarily impacted due to the Convertible Note fair value adjustment to expense that is not deductible for tax purposes. Additional other items impacting the rate were valuation allowances on equity investments, state taxes, and a write down of deferred taxes related to debt issuance costs on the conversion of the Convertible Note. Our effective tax rate for fiscal 2024 was 35.9 percent. The effective income tax rate for fiscal 2024 was prima

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rily impacted due to the fair value adjustment to the Convertible Note that is not deductible for tax purposes. Additional other items impacting the rate were valuation allowances on equity investments, state taxes, and a prior year provision to return adjustments reduced in part by tax benefits from permanent tax credits. See “Note 12. Income Taxes” of the Notes to our Consolidated Financial Statements included in this Form 10-K for further information.

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Reportable Segment Performance Summary

The following table shows information regarding our reportable segment financial performance of contribution margin reconciled to GAAP operating income for the fiscal years ended April 26, 2025 and April 27, 2024:

Fiscal Year 2025

Commercial

Percent of net sales (1)

Live Events

Percent of net sales (1)

High School Park and

Recreation

Percent of net sales (1)

Transportation

Percent of net sales (1)

International

Percent of net sales (1)

Total

Percent of net sales (1)

Net sales

$

156,203 

$

291,484 

$

165,921 

$

81,061 

$

61,808 

$

756,477 

Cost of sales

117,486 

75.2 

%

228,790 

78.5 

%

108,126 

65.2 

%

52,023 

64.2 

%

54,565 

88.3 

%

560,990 

74.2 

%

Gross profit

38,717 

24.8 

62,694 

21.5 

57,795 

34.8 

29,038 

35.8 

7,243 

11.7 

195,487 

25.8 

Selling

17,106 

11.0 

11,002 

3.8 

15,758 

9.5 

5,404 

6.7 

10,741 

17.4 

60,011 

7.9 

Contribution margin

21,611 

13.8 

51,692 

17.7 

42,037 

25.3 

23,634 

29.2 

(3,498)

(5.7)

135,476 

17.9 

General and administrative

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

63,498 

8.4 

Product design and development

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

38,860 

5.1 

Operating income (loss)

$

21,611 

13.8 

%

$

51,692 

17.7 

%

$

42,037 

25.3 

%

$

23,634 

29.2 

%

$

(3,498)

(5.7)

%

$

33,118 

4.4 

%

Orders

$

176,583 

$

283,780 

$

176,097 

$

72,315 

$

72,572 

$

781,347 

Fiscal Year 2024

Commercial

Percent of net sales (1)

Live Events

Percent of net sales (1)

High School Park and

Recreation

Percent of net sales (1)

Transportation

Percent of net sales (1)

International

Percent of net sales (1)

Total

Percent of net sales (1)

Net sales

$

161,626 

$

338,508 

$

170,349 

$

85,390 

$

62,210 

818,083 

Cost of sales

127,393 

78.8 

%

242,524 

71.6 

%

112,985 

66.3 

%

59,369 

69.5 

%

53,369 

85.8 

%

595,640 

72.8 

%

Gross profit

34,233 

21.2 

95,984 

28.4 

57,364 

33.7 

26,021 

30.5 

8,841 

14.2 

222,443 

27.2 

Selling

17,425 

10.8 

10,991 

3.2 

14,276 

8.4 

4,127 

4.8 

10,136 

16.3 

56,954 

7.0 

Contribution margin

16,808 

10.4 

84,993 

25.1 

43,088 

25.3 

21,894 

25.6 

(1,295)

(2.1)

165,489 

20.2 

General and administrative

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

42,632 

5.2 

Product design and development

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

35,742 

4.4 

Operating income (loss)

$

16,808 

10.4 

%

$

84,993 

25.1 

%

$

43,088 

25.3 

%

$

21,894 

25.6 

%

$

(1,295)

(2.1)

%

$

87,115 

10.6 

%

Orders

$

135,251 

$

321,191 

$

148,505 

$

80,107 

$

55,117 

$

740,171 

Net Dollar and % Change (1)

Commercial

Percent Change (1)

Live Events

Percent Change (1)

High School Park and

Recreation

Percent Change (1)

Transportation

Percent Change (1)

International

Percent Change (1)

Total

Percent Change (1)

Net sales

$

(5,423)

(3.4)

$

(47,024)

(13.9)

$

(4,428)

(2.6)

$

(4,329)

(5.1)

$

(402)

(0.6)

$

(61,606)

(7.5)

Cost of sales

(9,907)

(7.8)

(13,734)

(5.7)

(4,859)

(4.3)

(7,346)

(12.4)

1,196 

2.2 

(34,649)

(5.8)

Gross profit

4,484 

13.1 

(33,290)

(34.7)

431 

0.8 

3,017 

11.6 

(1,598)

(18.1)

(26,957)

(12.1)

Selling

(319)

(1.8)

11 

0.1 

1,482 

10.4 

1,277 

30.9 

605 

6.0 

3,056 

5.4 

Contribution margin

4,803 

28.6 

(33,301)

(39.2)

(1,051)

(2.4)

1,740 

7.9 

(2,203)

170.1 

(30,013)

(18.1)

General and administrative

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

20,866 

48.9 

Product design and development

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

3,118 

8.7 

Operating income (loss)

$

4,803 

28.6 

%

$

(33,301)

(39.2)

%

$

(1,051)

(2.4)

%

$

1,740 

7.9 

%

$

(2,203)

170.1 

%

$

(53,997)

(62.0)

%

Orders

$

41,332 

30.6 

%

$

(37,411)

(11.6)

%

$

27,592 

18.6 

%

$

(7,792)

(9.7)

%

$

17,455 

31.7 

%

$

41,176 

5.6 

%

(1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided. In addition, percentages may not add in total due to rounding

Contribution margin decreased in fiscal 2025 compared to fiscal 2024 in the Live Events, High School Park and Recreation, and International business units, offset by improved contribution margin in the Commercial and Transportation business units. Overall, gross profit decreased in fiscal 2025 compared to fiscal 2024, and was primarily attributable to sales mix differences between periods and a lower sales volume in the Live Events and International business units. Gross profit improvements in the Commercial and Transportation business units are attributable to strategic pricing actions,

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closely matching manufacturing capacity to demand, and stabilization of input costs. Fewer supply chain and operational disruptions paired with our investments to increase capacity allowed for improved operational efficiency. We regularly adjust our sales and marketing activities and staffing levels to achieve current and expected future sales levels.

For the year ended April 26, 2025, our operating income was negatively impacted by a net amount of 0.3 percent of overtime revenue, or $1.2 million. For the year ended April 27, 2024, our operating income was positively impacted by a net amount of 1.0 percent of overtime revenue, or $4.1 million. These changes are a result of changes in contract estimates related to projects in progress at the beginning of the respective period. These changes in estimates resulted primarily from favorable project execution of 0.8 percent of overtime revenue, or $2.8 million, reduced cost estimates, and contingencies that were relieved when conditions were resolved. Gross unfavorable changes in contract estimates were 1.1 percent of overtime revenue, or $4.1 million, and were immaterial for the year ended April 26, 2025. For the year ended April 27, 2024, these changes in estimates resulted primarily from favorable project execution of 1.5% of overtime revenue, or $6.5 million, reduced cost estimates, and contingencies that were relieved when conditions were resolved. Gross unfavorable changes in contract estimates were 0.6 percent of overtime revenue, or $2.4 million. For fiscal 2025, the Live Events business unit had the largest gross positive impact of $1.8 million and $3.0 million gross negative impact, which represented 0.8 percent and 1.3 percent of overtime revenue sales in Live Events, respectively. For fiscal 2024, the Live Events business unit had the largest gross positive impact of $4.5 million and $0.9 million gross negative impact, which represented 1.7 percent and 0.3 percent of overtime revenue sales in Live Events, respectively. For both fiscal 2025 and fiscal 2024, the remaining business units had immaterial gross positive and gross negative changes. See “Note 1. Nature of Business and Summary of Significant Accounting Policies” of the Notes to our Consolidated Financial Statements included in this Form 10-K and “Critical Accounting Estimates” under “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K for more information regarding revenue recognition.

Commercial: The decrease in net sales was driven by volatility in order bookings of larger-sized Spectacular LED video display projects, and there were fewer projects in the market as compared to prior years. Order bookings increased due to the continued market adoption of digital display technology. Gross profit as a percentage of sales improved 3.6 points due to a shift in mix to products with higher margins and sales volume over relatively fixed cost structures. Selling expenses remained relatively flat in dollars and as a percent year over year.

Live Events: The decrease in net sales was due to a lower buildable backlog, with declines in the NFL and NBA niches. Order bookings decreased due to the variability in the timing of contract orders, which is natural in large-project business areas. Gross profit as a percentage of sales declined 6.9 points primarily attributable to the sales volume and sales mix differences between periods. Selling expenses remained flat in dollars while increasing 0.6 points due to a lower sales volume.

High School Park and Recreation: The decrease in net sales was driven by converting the high level of backlog related to supply chain disruptions from the first quarter of fiscal 2024 compared to the more normal level backlog at the beginning of fiscal 2025. Order bookings increased as a result of the trends for schools increasingly using video solutions, which are larger dollar-sized transactions than traditional scoreboard projects. Gross profit remained relatively flat in dollars and as a percent year over year. Selling expenses increased primarily because of personnel related wage and benefit costs for investments in staffing to support future growth.

Transportation: The decrease in net sales was driven by lower order bookings which reduced the level of backlog available to build. Order bookings declined due to a smaller spread in the market and uncertainty around federal funding. Gross profit as a percentage of sales increased 5.3 points primarily due to adjustments related to Vanguard® control system reserves in fiscal 2024 that did not repeat in fiscal 2025. Selling expenses increased primarily because of personnel related wages and benefits costs.

International: The slight decrease in net sales was driven by timing of conversion of orders due to lower backlog compared to one year ago. The increase in order bookings is due to a higher demand in the EMEALA region (Europe, the Middle East, Africa, and Latin America). Gross profit decreased 2.5 points primarily due to lower sales volume over relatively fixed cost structure. Even with efforts to lower selling and other operational costs, our International business unit operated at a negative contribution margin.

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LIQUIDITY AND CAPITAL RESOURCES

Year Ended

(in thousands)

April 26, 2025

April 27, 2024

Dollar Change

Net cash (used in) provided by:

Operating activities

$

97,713 

$

63,241 

$

34,472 

Investing activities

(23,782)

(21,306)

(2,476)

Financing activities

(27,449)

15,122 

(42,571)

Effect of exchange rate changes on cash

(653)

(69)

(584)

Net increase (decrease) in cash, cash equivalents and restricted cash

$

45,829 

$

56,988 

$

(11,159)

Net cash provided by operating activities: The $97.7 million in cash provided by operating activities for fiscal 2025 was the result of business profitability and net positive changes in operating asset and liabilities primarily due to the receivable and contract asset collections and our initiatives to lower inventory offset by payments of accounts payable and income taxes.

Net cash used in investing activities: During fiscal 2025 and fiscal 2024, purchases of property and equipment totaled $19.5 million and $17.0 million, respectively, and investments in affiliates were $4.6 million and $5.1 million, respectively.

Net cash provided by financing activities: During fiscal 2025, financing cash outflow included $29.5 million for payments for shares repurchased and $2.1 million for payments on notes payable, partially offset by a cash inflow of $5.2 million received for the exercise of stock options. During fiscal 2024, cash inflow resulting from the closing on the $25.0 million Convertible Note financing, which had no outstanding balance as of April 26, 2025, and the $15.0 million mortgage financing in the first quarter of fiscal 2024. These inflows were partially offset by the payoff of our previous credit line of $17.8 million, expending $7.2 million of debt issuance costs, and principal payments made on the mortgage financing.

Debt and Cash

The Credit Facility consists of the ABL, which is a $60.0 million asset-based revolving credit facility, and the $15.0 million Delayed Draw Loan. The ABL is subject to the Credit Agreement and the Pledge and Security Agreement, each of which contains customary covenants and conditions. On June 10, 2025, we entered into the Fourth Amendment, which permits the Company to secure Letters of Credit with terms that expire after the Credit Agreement’s scheduled maturity day of May 11, 2026 under certain conditions. As of April 26, 2025, we had no borrowings against the ABL and $36.3 million of borrowing capacity on the ABL after $3.4 million used to secure Letters of Credit outstanding. As of April 26, 2025, we had an outstanding principal balance of $12.4 million on a loan which is secured by a first priority mortgage on our Brookings, South Dakota real estate.

As of April 26, 2025, we had $127.5 million in cash and cash equivalents. We believe cash flow from operations, existing lines of credit, and access to debt and capital markets will be sufficient to meet our current liquidity needs.

Our cash equivalent balances consist of high-quality, short-term money market instruments.

We were in compliance with all debt covenants as of April 26, 2025, and we expect to remain in compliance with those

covenants for at least the next 12 months.

For additional information on financing agreements, see “Note 7. Financing Agreements” and “Note 18. Subsequent Events” of the Notes to our Consolidated Financial Statements included in this Form 10-K.

Working Capital

Working capital was $209.4 million and $209.7 million as of April 26, 2025 and April 27, 2024, respectively. This remained relatively flat year over year, but we note changes in working capital can be impacted by changes in inventory, accounts payable, accounts receivable, and contract assets and liabilities, which are impacted by the sports market and construction seasonality. These changes can have a significant impact on the amount of net cash provided by or used in

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operating activities largely due to the timing of payments for inventory and subcontractors and receipts from our customers. On multimillion-dollar orders, the time between order acceptance and project completion may extend up to or exceed 12 months depending on the amount of custom work and a customer’s delivery needs. We use cash to purchase inventory and services at the beginning of these orders and often receive down payments or progress payments on these orders to balance cash flows.

We had $6.8 million of retainage on long-term contracts included in receivables and contract assets as of April 26, 2025, which we expect to collect within one year.

Other Liquidity and Capital Uses

Our long-term capital allocation strategy is to first fund operations and investments in growth, maintain a reasonable liquidity and leverage ratio that reflects a prudent and compliant capital structure in light of the cyclicality of business, reduce debt, and then return excess cash over time to stockholders through dividends and share repurchases. During fiscal year 2025, we did repurchase shares of common stock, and we did not pay a dividend.

Our business growth and profitability improvement strategies depend on investments in capital expenditures and strategic investments. We are projecting total capital expenditures to be approximately $22 million for fiscal 2026. Projected capital expenditures include purchasing manufacturing equipment for new or enhanced product production and expanded capacity and increased automation of processes; investments in quality and reliability equipment and demonstration and showroom assets; and continued information infrastructure investments. In addition to capital expenditures, we plan to make additional investments in our general and administrative expenses to execute our broad digital transformation strategies to modernize our service systems for field service automation, to advance our enterprise performance planning capabilities, and to improve and automate quoting and sales processes. We also evaluate and may make strategic investments in new technologies or in our affiliates or acquire companies aligned with our business strategy. We are committed to invest an additional $0.4 million in fiscal 2026 in our current affiliates. We may make additional investments beyond our commitments.

We are sometimes required to obtain performance bonds for display installations, and we have a $190.0 million bonding line available through surety companies. If we were unable to complete the installation work, and our customer would call upon the bond for payment, the surety company would subrogate its loss to Daktronics. As of April 26, 2025, we had $57.8 million of bonded work outstanding.

CRITICAL ACCOUNTING ESTIMATES

Our Consolidated Financial Statements and Notes to the Consolidated Financial Statements included in this Form 10-K have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments affecting the reported amounts of assets, liabilities, revenues, and expenses and related disclosure of contingent assets and liabilities. Although our significant accounting policies are described in “Note 1. Nature of Business and Summary of Significant Accounting Policies” of the Notes to our Consolidated Financial Statements included in this Form 10-K, the following discussion is intended to identify and describe those accounting estimates made in accordance with GAAP that involve a significant level of uncertainty at the time the estimate was made and where changes in the estimates have had, or are reasonably likely to have, a material impact on our financial condition or results of operations.

We believe the estimation process for uniquely configured contracts and warranties are material and critical. These areas contain estimates with a reasonable likelihood to change, and those changes could have a material impact on our financial condition and results of operations. The estimation processes for these areas are also difficult, subjective, and use complex judgments. Our critical accounting estimates are based on historical experience, our interpretation of GAAP, current laws and regulations; and on various other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities not readily apparent from other sources. Actual results may differ from these estimates.

Revenue recognition on uniquely configured contracts. Revenue for uniquely configured (custom) or integrated systems is recognized over time using the cost-to-cost input method by comparing cumulative costs incurred to the total estimated costs and applying that percentage of completion to the transaction price to recognize revenue. Over time revenue recognition is appropriate because we have no alternative use for the uniquely configured system and have an enforceable right to payment for work performed, including a reasonable profit margin. The cost-to-cost input method measures costs

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incurred to date compared to estimated total costs for each contract. This method is the most faithful depiction of our performance because it measures the value of the contract transferred to the customer. Costs to perform the contract include direct and indirect costs for contract design, production, integration, installation, and assurance-type warranty reserve. Direct costs include materials and components; manufacturing, project management and engineering labor; and subcontracting expenses. Indirect costs include allocated charges for such items as facilities and equipment depreciation and general overhead. Provisions of estimated losses on uncompleted contracts are made in the period in which such losses are capable of being estimated.

We may have multiple performance obligations in these types of contracts; however, a majority are treated as a combined single performance obligation. In our judgment, this accounting treatment is most appropriate because the substantial part of our promise to our customer is to provide significant integration services and incorporate individual goods and services into a combined output or system. Often times the system is customized or significantly modified to the customer’s desired configuration and location, and the interrelated goods and services provide utility to the customer as a package. See “Note 1. Nature of Business and Summary of Significant Accounting Policies” of the Notes to our Consolidated Financial Statements included in this Form 10-K for further information on our revenue recognition policies.

Warranties. We have recognized an accrued liability for warranty obligations equal to our estimate of the actual costs to be incurred in connection with our performance under contractual warranties. Warranty estimates include the cost of direct material and labor estimates to repair products over their warranty coverage period. Generally, estimates are based on historical experience considering known or expected changes. If we would become aware of an increase in our estimated warranty costs, additional accruals may become necessary, resulting in an increase in cost of sales. Although prior estimates have been materially correct, estimates for warranty liabilities can change based on actual versus estimated defect rates over the lifetime of the warranty coverage, a difference in actual to estimated costs to conduct repairs for the components and related labor needed, and other site related actual to estimated cost changes.

As of April 26, 2025 and April 27, 2024, we had approximately $35.8 million and $37.9 million accrued for these warranty obligations, respectively. Due to the difficulty in estimating probable costs related to certain warranty obligations, there is a reasonable likelihood that the ultimate remaining costs to remediate the warranty claims could differ materially from the recorded accrued liabilities. See “Note 16. Commitments and Contingencies” of the Notes to our Consolidated Financial Statements included in this Form 10-K for further information on warranties.

RECENT ACCOUNTING PRONOUNCEMENTS

For a summary of recently issued accounting pronouncements and the effects those pronouncements have on our financial results, refer to “Note 1. Nature of Business and Summary of Significant Accounting Policies” of the Notes to our Consolidated Financial Statements included in this Form 10-K.