Daktronics Q1 Earnings Top Estimates

(RTTNews) - Electronic display system maker Daktronics, Inc. (DAKT) reported Tuesday a profit for the first quarter of fiscal 2015 the grew from last year, reflecting improved operating margins and sales growth amid increase in sales volume due to an extra week. Earnings per share for the quarter topped analysts' expectations by a penny.

"Our first quarter is historically one of the busiest quarters as we produce, deliver, and install for outdoor sports venues and other outdoor systems during the summer construction season. This year was no exception. Significant work was performed during the quarter for sports related projects including installations for the Jacksonville Jaguars, Cleveland Browns, and University of Arizona, Phoenix," President and CEO Reece Kurtenbach said in a statement.

The Brookings, South Dakota-based maker of electronic billboards and scoreboards reported net income of $8.75 million or $0.20 per share for the first quarter, higher than $5.72 million or $0.13 per share in the prior-year quarter.

On average, three analysts polled by Thomson Reuters expected the company ro report earnings of $0.19 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew to $166.62 million from $138.72 million in the same quarter last year. Wall Street analysts had a consensus revenue estimate of $152.25 million for the quarter.

The company noted that fiscal 2015 is a 53-week year and fiscal 2014 was a 52-week year, with the additional week falling within the first quarter. The extra week increased sales for the quarter by about $11.9 million and all operating expenses were impacted with an additional week of expenses.

Commercial net sales grew 18 percent to $39.78 million, live events net sales increased 37.4 percent to $75.67 million, as well as net sales from high school park and recreation (formerly Schools & Theatres) improved 12.2 percent to $20.11 million from last year.

Transportation net sales edged up to $13.31 million from $13.04 million, while international net sales declined to $17.74 million from $18.99 million a year ago.

The company noted that the mix of sales included higher custom video systems and subcontracted installation work which lowered overall gross margin, which was offset by a gain in the sale of our rigging division assets.

Operating margin for the quarter improved 190 basis points to 8.1 percent from last year's 6.2 percent.

Order volume for the quarter increased to $160.7 million from $159.3 million in the year-ago quarter. Backlog at the end of the first quarter stood at $165 million, compared to a backlog of $167 million a year earlier.

"We remain focused on continual improvement of the operation of our business, which directly impacts profitability. We are investing in quality and reliability systems in the manufacturing and supply chain areas; our investment in product development also continues as we focus on robust solutions for Sport, Advertising, and Transportation applications," Kurtenbach added.

Looking ahead to fiscal 2015, the company said it plans to invest $25 million for capital projects including the $4 million expansion of its Minnesota manufacturing facility (nearing completion), new manufacturing equipment for various new product lines as well as machines upgrades, and in its information technology infrastructure.

DAKT closed Monday's regular trading session at $11.99, unchanged on a volume of 0.21 million shares.