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Oct 29, 2022
Daktronics Q2 2023 Earnings Report
Daktronics reported an increase in net sales and orders for the second quarter of fiscal year 2023, but experienced a net loss due to a non-cash deferred tax asset valuation adjustment.
Key Takeaways
Daktronics announced its Q2 2023 results, which showed a 14% increase in net sales to $187.4 million and an 11.7% increase in orders to $182.8 million compared to Q2 2022. However, the company reported a net loss due to a $13.0 million non-cash deferred tax asset valuation adjustment. The company is focusing on improving liquidity and cash generation.
Net sales increased by 14.0% to $187.4 million compared to the second quarter of fiscal 2022.
Orders increased by 11.7% to $182.8 million compared to the second quarter of fiscal 2022.
Product order backlog remains at historically high levels of $463.1 million.
Operating income was $1.5 million, but a net loss was incurred due to a $13.0 million non-cash deferred tax asset valuation adjustment.
Daktronics
Daktronics
Daktronics Revenue by Segment
Revenue by Segment
Commercial Revenue
CapyFin.comLive Events Revenue
CapyFin.comHigh School, Park & Rec Revenue
CapyFin.comTransportation Revenue
CapyFin.comInternational Revenue
CapyFin.com Forward Guidance
Daktronics is focused on improving cash flow and enhancing liquidity. The company expects inventory levels to peak in the third quarter and begin to decline. They are pursuing avenues to strengthen their financing flexibility by adding liquidity and diversifying funding sources.
Positive Outlook
- Cash generation focus through proactively completing and fulfilling orders in backlog.
- Productivity improvements from previous investments in factory capacity expansion and capital equipment.
- Operating margin improvement through pricing actions, product mix adjustments, and prudent management of operating expenses.
- Re-engineering designs for supply chain resiliency.
- Normalizing inventory levels as supply chain challenges continue to ease.
Challenges Ahead
- Supply chain disruptions have started to ease.
- The company experienced significant and unusual part shortages.
- The company experienced a challenging labor environment.
- The company experienced operating disruptions from COVID-19 related absences.
- The company experienced a first quarter COVID-19 mandated shutdown of Shanghai production facilities.
Revenue & Expenses
Visualization of income flow from segment revenue to net income