Daktronics Inc (DAKT) 2023 Q4 法說會逐字稿

Good day, and thank you for standing by, and welcome to Daktronics Fourth Quarter and Year-End 2023 financial results. (Operator Instructions) Please be advised that today's conference is being recorded.

美好的一天，感謝您的支持，歡迎來到 Daktronics 2023 年第四季度和年終財務業績。 （操作員指示）請注意，今天的會議正在錄製中。

I would now like to introduce your host for today's call, Sheila Anderson, Chief Financial Officer. Please go ahead.

現在我想介紹一下今天電話會議的主持人，首席財務官希拉·安德森 (Sheila Anderson)。請繼續。

Thank you, operator. Good afternoon, everyone. Thank you for participating in our fourth quarter and year-end earnings conference call. I would like to review our disclosure cautioning investors and participants but in addition to statements of historical facts, we will be discussing forward-looking statements reflecting our expectations and plans about our future financial performance and future business opportunities.

謝謝你，接線員。大家下午好。感謝您參加我們的第四季度和年終收益電話會議。我想回顧一下我們的披露，提醒投資者和參與者，但除了歷史事實的陳述外，我們還將討論反映我們對未來財務業績和未來商業機會的預期和計劃的前瞻性陳述。

These forward-looking statements reflect the company's expectations or beliefs concerning future events. All forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from our expectations. Such risks include, but are not limited to, changes in economic and market conditions, management of growth, timing and magnitude of future contracts and orders, fluctuations in margins, the introduction of new products and technologies, availability of raw material, components and shipping services and other important factors. These identified factors could cause actual results to differ materially from those disclosed in this call in the company's fourth quarter 2023 earnings release and its most recent annual report on Form 10-K.

這些前瞻性陳述反映了公司對未來事件的期望或信念。所有前瞻性陳述均涉及風險和不確定性，可能導致實際結果與我們的預期存在重大差異。這些風險包括但不限於經濟和市場條件的變化、增長管理、未來合同和訂單的時間安排和規模、利潤波動、新產品和技術的引入、原材料、零部件和運輸的可用性服務和其他重要因素。這些已確定的因素可能導致實際結果與該公司 2023 年第四季度收益發布和最新 10-K 表格年度報告中披露的結果存在重大差異。

Our fourth quarter 2023 earnings release contains certain non-GAAP financial measures and was furnished to the Securities and Exchange Commission on Form 8-K this morning. These documents are available on the Investors section at Daktronics website at www.daktronics.com.

我們的 2023 年第四季度收益報告包含某些非 GAAP 財務指標，並已於今天上午以 8-K 表格形式提交給美國證券交易委員會。這些文件可在 Daktronics 網站 www.daktronics.com 的投資者部分獲取。

I'll now turn the call over to our CEO, Reece Kurtenbach.

現在我將把電話轉給我們的首席執行官 Reece Kurtenbach。

Good afternoon. Thank you for joining us today. Daktronics has emerged from the challenges of the last 3 years, strategically renewed, operationally focused and financially sound. We faced unprecedented business and dynamic operating conditions through the pandemic times, a pullback in the business, a rapid rebound in the business and supply chain and capacity constraints.

下午好。感謝您今天加入我們。達科已經擺脫了過去 3 年的挑戰，戰略煥然一新，運營重點突出，財務狀況穩健。疫情期間，我們面臨著前所未有的業務和動態的經營狀況，業務回調，業務和供應鏈快速反彈以及產能限制。

Our teams came together to take decisive and deliberate actions to improve our customers' experience while increasing our profitability and working capital levels. We ended the year with a record sales of $754 million, $26 million in adjusted operating income and a strong balance sheet.

我們的團隊齊心協力，採取果斷、深思熟慮的行動，改善客戶體驗，同時提高我們的盈利能力和營運資本水平。年底，我們的銷售額達到創紀錄的 7.54 億美元，調整後營業收入為 2,600 萬美元，資產負債表強勁。

Fiscal 2023 was an incredibly positive transition year and our successful navigation on multiple fronts positions us for long-term success. I would like to thank you all -- to our teams who demonstrated resiliency, pragmatism and creativity and through their efforts, we were able to make long-lasting improvements throughout our organization. Our performance is also a testimony to the resiliency and strength of our diversified markets and innovation. Thank you to all our shareholders for your support through this dynamic time.

2023 財年是非常積極的過渡年，我們在多個方面的成功導航使我們能夠取得長期成功。我要感謝你們所有人，感謝我們的團隊，他們表現出了韌性、務​​實和創造力，通過他們的努力，我們能夠在整個組織中取得持久的改進。我們的業績也證明了我們多元化市場和創新的彈性和實力。感謝所有股東在這個充滿活力的時期給予的支持。

I'll now turn it over to Sheila for some more details on the financial results.

我現在將其轉交給 Sheila，了解有關財務業績的更多詳細信息。

Thank you, Reece. As mentioned, fiscal 2023 was an incredibly positive transition year. As you may recall, we started the year with a record backlog and a marketplace with high demand. However, we were also facing part shortages, intermittent work stoppages, inflationary pressures and input costs and a tight labor market, all limiting our ability to operate effectively. We adapted and utilized this opportunity to be selective in addressing demand and prioritize our focus on winning only the most profitable opportunities and strategically adapting our pricing.

謝謝你，里斯。如前所述，2023 財年是非常積極的過渡年。您可能還記得，今年伊始，我們的積壓訂單創歷史新高，市場需求旺盛。然而，我們也面臨零部件短缺、間歇性停工、通脹壓力和投入成本以及勞動力市場緊張等問題，所有這些都限制了我們有效運營的能力。我們適應並利用了這個機會，有選擇性地滿足需求，並優先考慮贏得最有利可圖的機會，並戰略性地調整我們的定價。

Our teams also managed through these dynamic supply chain conditions by redesigning and planning, manufacturing for new designs using available parts, securing and obtaining parts of support manufacturing and adding capacity in people and in machines. These actions made throughout the year, coupled with a more stable operating environment, which started late in our second quarter, led to a positive financial outcome for fiscal 2023.

我們的團隊還通過重新設計和規劃、使用可用零件進行新設計的製造、確保和獲取支持製造的零件以及增加人員和機器的能力來管理這些動態的供應鏈條件。這些全年採取的行動，加上第二季度末開始的更加穩定的運營環境，為 2023 財年帶來了積極的財務成果。

We had record sales of $209.9 million for the fourth quarter of fiscal 2023 and $754.2 million for the year. This was an increase of 29.4% compared to $162.2 million for the fourth quarter of fiscal 2022, and for the year, it was an increase of 23.4% and up from -- up to -- from the $611 million of sales in fiscal 2022. Sales growth was driven by the conversion of our strong backlog, improved stabilization of supply chains and increased manufacturing capacity.

2023 財年第四季度我們的銷售額達到創紀錄的 2.099 億美元，全年銷售額達到 7.542 億美元。與 2022 財年第四季度的 1.622 億美元相比，增長了 29.4%，全年增長了 23.4%，高於 2022 財年的 6.11 億美元銷售額。銷售增長的推動因素包括大量積壓訂單的轉化、供應鏈穩定性的改善以及製造能力的提高。

Gross profit as a percentage of net sales increased to 24.8% for the fourth quarter of fiscal 2023 as compared to 18.5% in the fourth quarter of fiscal 2022. Gross profit as a percentage of net sales increased to 20.1% for the fiscal 2023 as compared to 19.1% for the prior year. The increase in gross profit percentage for both comparative periods was primarily due to strategic pricing actions being realized through sales and due to fewer supply chain disruptions, creating a more stable and predictable operating environment, thus lowering the cost to deliver on projects. These improvements were partially offset by inflationary pressures in high material components, freight and labor costs throughout fiscal 2023.

2023 財年第四季度毛利潤占淨銷售額的百分比增至 24.8%，而 2022 財年第四季度為 18.5%。 2023 財年第四季度毛利潤占淨銷售額的百分比增至 20.1%上年增長 19.1%。兩個比較期間毛利率的增長主要是由於通過銷售實現了戰略定價行動，以及供應鏈中斷減少，創造了更加穩定和可預測的運營環境，從而降低了項目交付成本。這些改善部分被 2023 財年材料部件、貨運和勞動力成本高企的通脹壓力所抵消。

Operating expenses for the fourth quarter of fiscal 2023 were $33.9 million compared to $30.3 million for the fourth quarter of fiscal 2022. Operating expenses for the year were $130 million compared to $112.7 million last year. As a percentage of sales, operating expenses for the year declined to 17.2% from 18.4% of sales.

2023 財年第四季度的運營支出為 3390 萬美元，而 2022 財年第四季度的運營支出為 3030 萬美元。本年度的運營支出為 1.3 億美元，而去年為 1.127 億美元。營業費用佔銷售額的比例從占銷售額的 18.4% 下降至 17.2%。

Operating income was $18.3 million or 8.7% of sales during the fourth quarter of fiscal 2023 and $21.3 million for the year and up from $4 million from a year earlier. The $8.2 million tax benefit in the fourth quarter was primarily the result of the reversal of a $13 million valuation allowance we reversed with the removal of the growing concern assessment. Fiscal 2023 effective income tax rate was 48.7%. This rate was high due primarily to valuation allowances for impairments and foreign losses, provision to return adjustments and the mix of tax rates in the location of income.

2023 財年第四季度營業收入為 1,830 萬美元，佔銷售額的 8.7%，全年營業收入為 2,130 萬美元，高於去年同期的 400 萬美元。第四季度 820 萬美元的稅收優惠主要是由於我們取消了日益增長的擔憂評估而撤銷了 1300 萬美元的估值津貼。 2023財年有效所得稅率為48.7%。這一稅率之所以較高，主要是由於減值準備和海外損失的估值準備、回報調整撥備以及收入所在地的稅率組合。

Our balance sheet reflects the change in business levels and strategies we pursued in managing our supply chain and growing our capacity to meet customer commitments while managing our liquidity. We continue to move from a period of cash investments to cash generation, improving our liquidity and better positioning us for profitable growth. Our teams are focused on lowering inventory through increased production and reduction in purchases.

我們的資產負債表反映了我們在管理供應鍊和提高滿足客戶承諾的能力以及管理流動性方面所追求的業務水平和戰略的變化。我們繼續從現金投資階段轉向現金生成階段，提高我們的流動性，並更好地為我們的盈利增長做好準備。我們的團隊致力於通過增加產量和減少採購來降低庫存。

We're collecting more deposits and progress payments, ensuring timely billings and collecting accounts receivable and invoice terms. We've completed many capacity adjusted additions in our factories and expect to reduce capacity spend for fiscal '24. We are now working to add efficiencies to these new capacity additions. And we're carefully analyzing our strategic pricing initiatives to improve profitability and fill capacity effectively.

我們正在收取更多押金和進度付款，確保及時開具賬單並收取應收賬款和發票條款。我們已經完成了許多工廠產能調整後的新增工作，並預計將減少 24 財年的產能支出。我們現在正在努力提高這些新增產能的效率。我們正在仔細分析我們的戰略定價計劃，以提高盈利能力並有效地填補產能。

During the fourth quarter of the year, we generated $24.5 million and $15 million from operations, respectively. Inventory dropped from the peak levels at the end of the third quarter of fiscal 2023 and are expected to approach more normalized levels as supply chain disruptions continue to ease and order backlog is fulfilled.

今年第四季度，我們的運營收入分別為 2450 萬美元和 1500 萬美元。庫存從 2023 財年第三季度末的峰值水平下降，隨著供應鏈中斷的持續緩解和積壓訂單的履行，預計將接近正常水平。

Cash, restricted cash and marketable securities totaled $25.2 million as of April 29, 2023, and $17.8 million was borrowed to fund working capital and capital asset additions. At the end of this fiscal year, our working capital ratio was 1.6:1.

截至 2023 年 4 月 29 日，現金、限制性現金和有價證券總額為 2520 萬美元，借入 1780 萬美元為營運資金和資本資產增加提供資金。截至本財年末，我們的營運資金比率為1.6:1。

We used $3.6 million and $25.4 million for purchases of property and equipment in the fourth quarter and fiscal year, respectively, and these investments were primarily focused on expanding capacity, automation and productivity in our manufacturing area.

我們在第四季度和財年分別使用了 360 萬美元和 2540 萬美元購買財產和設備，這些投資主要集中在擴大我們製造領域的產能、自動化和生產力。

As a result of the comprehensive review, financing alternatives led by the Board's strategy and financing review committee, we closed on a new line of credit, mortgage and convertible notes subsequent to year-end. This new structure provides us the financial resources to serve our customers and build long-term value for our shareholders. This financing paired with our financial performance resolved our growing concern disclosures.

經過董事會戰略和融資審查委員會領導的全面審查、融資方案的結果，我們在年底後完成了新的信貸額度、抵押貸款和可轉換票據。這種新結構為我們提供了服務客戶並為股東創造長期價值的財務資源。這項融資與我們的財務業績相結合，解決了我們日益擔憂的披露問題。

Over the long term, we expect to grow revenues and grow profitably. We are starting FY '24 with a strong backlog of $101 million and expect sales growth next year. We plan to invest less than $19 million in capital assets, primarily in our manufacturing and technology areas, and those investments include digitization to improve customer and employee experiences.

從長遠來看，我們預計收入會增加，利潤也會增長。從 2024 財年開始，我們的積壓訂單已達到 1.01 億美元，預計明年的銷售額將會增長。我們計劃投資不到 1900 萬美元的資本資產，主要投資於我們的製造和技術領域，這些投資包括用於改善客戶和員工體驗的數字化。

With that, I'll turn it back over to Reece.

有了這個，我會把它轉回里斯。

Thank you, Sheila. As we look ahead, we expect growth in the global use of audiovisual communication systems in both traditional and in new applications. We are posed to capitalize on and to capture this growth by continuing to do the things we do well. These things include how we engage in a full range of activities to serve our customers by providing high-quality standard display products as well as custom-designed integrated systems, both of these with ongoing services and support.

謝謝你，希拉。展望未來，我們預計全球視聽通信系統在傳統和新應用中的使用都會增長。我們準備通過繼續做我們擅長的事情來利用並捕捉這種增長。這些事情包括我們如何參與全方位的活動，通過提供高質量的標準顯示產品以及定制設計的集成系統來服務我們的客戶，這兩者都具有持續的服務和支持。

We're manufacturing a complete line from small scoreboards and electronic displays to large multimillion-dollar video display systems and the related control and sound systems. We develop capabilities to design, manufacture, install and service complete integrated systems, and we are recognized as a technical leader in these areas. We generate new leads and serve repeat customers based on our performance, reputation and marketing efforts.

我們正在製造從小型記分牌和電子顯示器到價值數百萬美元的大型視頻顯示系統以及相關控制和音響系統的完整產品線。我們開發設計、製造、安裝和維護完整集成系統的能力，並被公認為這些領域的技術領導者。我們根據我們的業績、聲譽和營銷努力來創造新的銷售線索並為回頭客提供服務。

We will prioritize our focus in the growing and profitable segments in the industry, which align with these capabilities. We will focus on development of new technologies like narrow pixel pitch to harness the market's potential. Also, our existing markets are growing. To highlight, we expect our High School Park and Recreation business unit to grow through the adoption of video displays for sporting and educational use. These customers are deploying more Daktronics professional-grade technology and sophisticated content, increasing the total addressable market.

我們將優先關注行業中不斷增長和盈利的領域，這些領域與這些能力相一致。我們將重點開發窄像素間距等新技術，以挖掘市場潛力。此外，我們現有的市場正在增長。需要強調的是，我們預計我們的高中公園和娛樂業務部門將通過採用視頻顯示器用於體育和教育用途來實現增長。這些客戶正在部署更多的 Daktronics 專業級技術和復雜的內容，從而擴大潛在市場總量。

In the commercial area, we are focused on increasing sales channels with audiovisual integrators for end use in government, military, health care and corporate applications, which will create growth in this business area. In addition, customers depending on out-of-home advertising or self-promotion, use our products and services as an effective medium for both indoor and outdoor applications. We expect existing and new customers to purchase displays to install in new locations as well as replacement displays for existing locations to capitalize on the effectiveness of digital technologies.

在商業領域，我們專注於增加與視聽集成商的銷售渠道，以用於政府、軍事、醫療保健和企業應用的最終用途，這將創造該業務領域的增長。此外，依賴戶外廣告或自我推銷的客戶將我們的產品和服務用作室內和室外應用的有效媒介。我們預計現有和新客戶將購買顯示器安裝在新地點，並為現有地點更換顯示器，以充分利用數字技術的有效性。

Transportation demand is strong as project planning and approval activities resume to more pre-pandemic levels and our customers move forward in purchasing displays used for intelligent transformation -- transportation systems and for mass transit (inaudible). Infrastructure spending should continue to benefit this segment as digital signage is often used in these projects, and we are qualified to do business in all the U.S. states.

隨著項目規劃和審批活動恢復到大流行前的水平，以及我們的客戶繼續購買用於智能轉型（運輸系統和公共交通）的顯示器（聽不清），運輸需求強勁。基礎設施支出應繼續使該細分市場受益，因為這些項目中經常使用數字標牌，而且我們有資格在美國所有州開展業務。

In the International business unit, we continue to experience...

在國際業務部門，我們繼續體驗...

(technical difficulty)

（技術難度）

I'm sorry, we're having some technical difficulties, I think.

抱歉，我認為我們遇到了一些技術困難。

I'm sorry. In the international business unit, we continue to experience a softer market due to macroeconomic and geopolitical factors. We expect to see these factors to continue to impact sales in the coming year. We're watching developments closely and have and can adjust resources and commitments accordingly. Over the longer term, we expect similar growth trends in the commercial and transportation areas outside the U.S. We also expect sports venue projects to be a focus in our marketing efforts.

對不起。在國際業務部門，由於宏觀經濟和地緣政治因素，我們的市場繼續疲軟。我們預計這些因素將繼續影響來年的銷售。我們正在密切關注事態發展，並且已經並且可以相應地調整資源和承諾。從長遠來看，我們預計美國以外的商業和交通領域也會出現類似的增長趨勢。我們還預計體育場館項目將成為我們營銷工作的重點。

The Live Events segment outlook remains strong due to large stadium renovations, continued replacement cycles and expansion of sales efforts beyond traditional sport areas. We are the acknowledged market leader in this segment, which allows us to be strategic in our pricing and contract terms while being very mindful about the profitability of this segment. We continue to closely monitor the ever-evolving geopolitical and global economic environment to ensure we are able to quickly adjust our resources and market approaches to maintain profitability through various cycles.

由於大型體育場翻新、持續的更換週期以及將銷售工作擴展到傳統體育領域之外，現場活動領域的前景依然強勁。我們是該領域公認的市場領導者，這使我們能夠在定價和合同條款方面具有戰略性，同時非常關注該領域的盈利能力。我們繼續密切關注不斷變化的地緣政治和全球經濟環境，以確保我們能夠快速調整我們的資源和市場策略，以在各個週期中保持盈利能力。

In FY '24, we will make investments in high-return projects and technologies to support long-term profitability. Our experience in engineering, process design, service design and product development capabilities and investments made in affiliated companies are very important factors in continuing to develop, produce and offer the most up-to-date digital displays and control system solutions desired by the market. We will continue to invest in our development efforts and our affiliated companies to release differentiated product platforms, software offerings and services.

在 24 財年，我們將投資高回​​報項目和技術，以支持長期盈利能力。我們在工程、工藝設計、服務設計和產品開發能力方面的經驗以及對附屬公司的投資是繼續開發、生產和提供市場所需的最新數字顯示和控制系統解決方案的非常重要的因素。我們將繼續投資於我們的開發工作和我們的附屬公司，以發布差異化的產品平台、軟件產品和服務。

We'll also advance critical architecture and design in new competitive technologies, such as narrow pixel pitch and micro LED, sustainable technology, software architecture and other related areas. We also plan to grow our operational efficiency by focusing on retention of our highest performing team members and capitalizing on automation capabilities added over the last year. We will invest in digital transformation projects and other automation that will support improved customer and employee experiences and lower our cost to operate.

我們還將推進新的競爭性技術的關鍵架構和設計，例如窄像素間距和 micro LED、可持續技術、軟件架構和其他相關領域。我們還計劃通過重點保留表現最好的團隊成員並利用去年增加的自動化功能來提高運營效率。我們將投資數字化轉型項目和其他自動化項目，以支持改善客戶和員工體驗並降低運營成本。

I again want to thank our Daktronics team for the results delivered during FY 2023. We appreciate our suppliers and vendors for also helping and supporting us in the past and on into the future. And thank you to our investors for your patience and support as we work through and emerge from these unprecedented times, stronger and better positioned to meet the future. We believe the stage is set for strong fiscal 2024, and we look forward to continued growth of sales and expansion of operating income.

我要再次感謝我們的 Daktronics 團隊在 2023 財年取得的成果。我們感謝我們的供應商和供應商在過去和未來為我們提供的幫助和支持。感謝我們的投資者在我們度過這個前所未有的時代並從中脫穎而出時給予我們的耐心和支持，讓我們變得更強大、更有能力迎接未來。我們相信 2024 財年的強勁表現已經做好，我們期待銷售額的持續增長和營業收入的擴大。

With that, I would ask the operator to please open the line for any questions.

這樣，如果有任何問題，我會請接線員打開線路。

(Operator Instructions)

（操作員說明）

One moment for our first question. And our first question comes from BJ Cook from Singular Research.

請稍等一下我們的第一個問題。我們的第一個問題來自 Singular Research 的 BJ Cook。

Great quarter. Just a couple of questions for you. You guys have been working pretty diligently over the last year or so to adjust prices. You guys are in a good spot now in pricing in the backlog? Is there some work left to be done there?

很棒的季度。只是想問你幾個問題。在過去一年左右的時間裡，你們一直在努力調整價格。你們現在在積壓訂單定價方面處於有利位置嗎？那裡還有什麼工作要做嗎？

No, I believe we're in a good place there, BJ. I believe that the backlog consists mainly of projects using our new pricing methodologies.

不，我相信我們的處境很好，BJ。我認為積壓的項目主要包括使用我們新定價方法的項目。

Okay. Great. But I understand there's an inflationary element to your price increases, but part of it also is demand for your product. I guess going through this whole process, how do you feel about pricing power? Is there maybe a little bit more than you had saw?

好的。偉大的。但我知道你們的價格上漲存在通貨膨脹因素，但其中一部分也是對你們產品的需求。我想通過這整個過程，您對定價能力有何看法？是不是比你看到的還要多一點？

Maybe to answer that. I think that as we are in a more stable operating environment as we've seen the supply chain more predictable than it was a year ago, that we have a better understanding of what the cost elements would be and can be very strategic in how we price new projects or products.

也許是為了回答這個問題。我認為，由於我們處於更穩定的運營環境中，而且我們看到供應鏈比一年前更具可預測性，因此我們對成本要素有了更好的了解，並且可以非常有戰略性地制定如何為新項目或產品定價。

Okay. That makes sense. Appreciate it. One more last one. You mentioned some newer opportunities, the infrastructure bill has been in place for a while now. Do you expect or have you seen any benefit to the transportation segment with regard to the Bill?

好的。這就說得通了。欣賞它。最後一張還有一張。你提到了一些新的機會，基礎設施法案已經實施了一段時間了。您是否期望或看到該法案會給交通運輸行業帶來任何好處？

Yes. We believe that the -- since the bill is in place and is continuing to invest in projects, but that's not an immediate 1 quarter sort of event for Daktronics. Those projects go on for months and years. And in the end, we'll continue to provide benefit to Daktronics in that market segment.

是的。我們相信，由於該法案已經到位並且正在繼續投資項目，但這並不是 Daktronics 立即發生的第一季度事件。這些項目持續數月甚至數年。最後，我們將繼續為 Daktronics 在該細分市場提供利益。

And I am showing no further questions. I would now like to turn the call back over to Reece Kurtenbach for closing remarks.

我沒有提出任何進一步的問題。現在，我想將電話轉回給里斯·庫爾滕巴赫 (Reece Kurtenbach)，讓其致閉幕詞。

I would just like to thank everybody for attending today's conference. We appreciate your attendance and your questions. And we'll look forward to speaking again at our next conference call, which will be after our first quarter results are released. Thank you, everyone.

我謹感謝大家參加今天的會議。我們感謝您的出席和提問。我們期待在下一次電話會議上再次發言，這將在我們第一季度業績發布後進行。謝謝大家。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。

Thank you.

謝謝。