What changed in this filing

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Item 1. Business

2024-06-26 compared with 2023-07-12 · 29 added, 33 removed, 232 unchanged (21% of the section changed)

16 unchanged sentences

Our Internet address is https:// www.daktronics.com.

Available Information

Our annual, quarterly and current reports and any amendments to those reports are freely available in the "Investor Relations" section of our website.

We post each of these documents on our website as soon as reasonably practicable after it is electronically filed with the Securities and Exchange Commission (the "SEC").

These reports and other reports, proxy

statements, and electronic filings are also found on the SEC’s website at www.sec.gov.

These reports and other reports, proxy statements, and electronic filings are also found on the SEC’s website at www.sec.gov.

Information contained on our website is not deemed to be incorporated by reference into this Report or filed with the SEC.

Reportable Segments

We focus our sales and marketing efforts on markets, geographical regions and products.

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Marketing and Sales.

Our sales force is comprised of direct sales staff and resellers located throughout the world supporting all customer types in both sales and service.

Our sales force is comprised of direct sales staff and resellers, including AV integrators, located throughout the world supporting all customer types in both sales and service.

We primarily use a direct sales force for large integrated display system sales in professional sports, colleges and universities, and commercial spectacular projects.

We also use our direct sales force to sell third-party advertising and transportation applications.

We utilize resellers outside North America for large integrated system sales where we do not have a direct sales presence.

The majority of our products sold by resellers in North America are standard catalog products.

We also use our direct sales force to sell to out-of-home advertising companies, to transportation system operators, and to certain high school park and recreation customers.

The majority of our products sold by resellers are standard catalog products such as video boards and dynamic message systems and increasingly include indoor micro-LED configurable display systems.

We also utilize resellers outside North America for large integrated system sales where we do not have a direct sales presence.

We support our resellers through direct mail/email advertising, social media campaigns, trade journal advertising, product and installation training, trade show exhibitions, and accessibility to our regional sales or service teams and demonstration equipment.

2 unchanged sentences

To remain competitive, we have a tradition of applying engineering resources throughout our business to anticipate and respond rapidly to the system needs in the marketplace.

We employ and contract with engineers and technicians in the areas of mechanical and electrical design;

We employ and contract with engineers and technicians in the areas of mechanical and electrical

applications engineering;

8 unchanged sentences

We also have manufacturing facilities in China and Ireland.

We perform component manufacturing, system

manufacturing (metal fabrication, electronic assembly, sub-assembly and final assembly) and testing in-house for most of our products to control quality, improve response time and maximize cost-effectiveness.

We perform component manufacturing, system manufacturing (metal fabrication, electronic assembly, sub-assembly and final assembly) and testing in-house for most of our products to control quality, improve response time and maximize cost-effectiveness.

Given the cyclical nature of some parts of our business and dispersed sales geography, we balance and maintain our ability to manufacture the same products across our plants so we can efficiently utilize our capacity and reduce costs.

11 unchanged sentences

Professional Services.

To assist our clients' ability to engage, inform and entertain their audiences, we provide professional services including event support, content creation, product maintenance, marketing assistance, training on hardware and software, control room design, and continuing technical support training for operators.

To assist our clients' ability to engage, inform and entertain their audiences, we provide professional services including event support, event production curriculum, content creation, product maintenance, marketing assistance, training on hardware and software, control room design, and continuing technical support training for operators.

Customer Service and Support.

14 unchanged sentences

• Scoreboards and timing systems

• Message displays

• LED Message displays and signs

• ITS (intelligent transportation systems) dynamic message signs

10 unchanged sentences

These displays include red, green and blue LEDs arranged in various combinations to form pixels.

The electronic circuitry, which controls the pixels, allows for variances in the relative brightness of each LED to provide a full color spectrum, thereby displaying

video images in striking, vibrant colors.

The electronic circuitry, which controls the pixels, allows for variances in the relative brightness of each LED to provide a full color spectrum, thereby displaying video images in striking, vibrant colors.

Variables in video displays include the spacing of the pixels (pixel pitch), the resolution of the displays (number of pixels), the brightness of the displays (nits), the number of discrete colors the display is able to produce (color depth), the viewing angles, and the LED technology.

14 unchanged sentences

It is one of the leading applications of its type in collegiate and high school sports.

Message Displays.

LED Message Displays and Signs.

The Galaxy® product line is a family of full-matrix displays, available in both indoor and outdoor models and controlled with the Venus® Control Suite.

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For applications that require both scheduled content and live video or real time content, a control solution can combine the capabilities of Venus® Control Suite with the capabilities of the Show Control Software Suite to create a powerful solution that enables customers to easily manage content on their displays.

Content includes media, scoring, timing, statistics, advertising, way-finding information, playback loops and entertainment type visualizations.

Content includes media, scoring, statistics, timing, advertising, way-finding information, playback loops and entertainment type visualizations.

Our Show Control Suite is an easy-to-use and powerful integrated solution to achieve a dynamic, seamless and fully immersive game-day production.

4 unchanged sentences

We source some of our materials from a single-source or a limited number of suppliers due to the proprietary nature of the materials.

The loss of a key supplier, part unavailability, tariff changes, price changes, war or other geopolitical impacts to trade or transport, or defects in the supplied material or component could have an adverse impact on our business and operations.

The loss of a key supplier, part unavailability, tariff changes, price changes, war, transportation disruptions, or other geopolitical impacts to trade or transport, or defects in the supplied material or component could have an adverse impact on our business and operations.

Our sourcing group is responsible to maintain and implement strategies to mitigate these evolving risks.

1 unchanged sentence

We sometimes prepay for future supply.

Since late fiscal 2021, we have been affected by supply chain disruptions and inflationary pressures stemming from the coronavirus pandemic ("COVID-19"), shipping container shortages, weather events, and the changes in global demand.

Specifically, we are impacted by the global inflation and shortage of semiconductors and related electronic components, other materials needed for production, and freight.

While supply chain disruptions from these factors have subsided over the last half of fiscal 2023 and we expect infrequent disruptions going forward from these factors, it is reasonably possible that future disruptions could occur that would have a material impact on our business.

Intellectual Property

We own or hold licenses to use numerous patents, copyrights, and trademarks on a global basis.

Our policy is to protect our competitive position by filing United States and international patent applications to protect technology and improvements that we consider important to the development of our business.

Our policy is to protect our competitive position by filing United States and international patent applications to protect technology and improvements

that we consider important to the development of our business.

This will allow us to pursue infringement claims against competitors for protection due to patent violations.

Although we own a number of patents and possess rights under others

to which we attach importance, we do not believe that our business as a whole is materially dependent upon any such patents or rights.

Although we own a number of patents and possess rights under others to which we attach importance, we do not believe that our business as a whole is materially dependent upon any such patents or rights.

We also own a number of trademarks that we believe are important in connection with the identification of our products and associated goodwill with customers, but no part of our business materially depends on such trademarks.

7 unchanged sentences

Although we follow the over-time method of recognizing revenues for uniquely configured orders, we nevertheless have experienced fluctuations in operating results and expect our future results of operations will be subject to similar fluctuations.

Because of the seasonality and volatility in business demand and variety of product types, we may not be able to utilize our capacity efficiently or accurately plan our capacity requirements, which may negatively affect our business and operating results.

Working Capital

1 unchanged sentence

Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources” in this Form 10-K.

We have a large and diverse worldwide customer base, ranging from local main street business owners, out-of-home companies, and schools to the owners and operators of premier professional sports arenas.

We have a large and diverse worldwide customer base, ranging from local main street business owners, out-of-home companies, governmental agencies, and schools, colleges, and universities, to the owners and operators of premier professional sports arenas.

Our customers are important to us, and we strive to serve them over the long-term to earn their future business.

6 unchanged sentences

Certain orders for which we have received binding letters of intent or contracts will not be included in backlog until all required contractual documents and deposits are received.

Orders and backlog are not measures defined by accounting principles generally accepted in the United States of America ("GAAP"), and our methodology for determining orders and backlog may vary from the methodology used by other companies in determining their orders and backlog amounts.

Order and backlog levels provide management and investors additional details surrounding the results of our business activities in the marketplace and highlight fluctuations caused by seasonality and multimillion dollar projects.

Orders and backlog are not metrics defined by accounting principles generally accepted in the United States of America ("GAAP"), and our methodology for determining orders and backlog may vary from the methodology used by other companies in determining their orders and backlog amounts.

Management uses orders to evaluate market share and performance in the competitive environment.

Management uses backlog information for capacity and resource planning.

Order fulfillment timing is dependent on customer schedules, supply chain conditions, and our capacity availability.

We believe order information is useful to investors because it provides an indication of our market share and future revenues.

Our product order backlog as of April 27, 2024 was $316.9 million as compared to $400.7 million as of April 29, 2023.

This decrease in backlog is driven by fulfilling orders from our April 30, 2022 backlog.

During fiscal 2022 we had record order volume and muted conversion to sales due to supply chain challenges.

Our customers had also placed orders for future deliveries to secure our manufacturing capacity during fiscal 2022.

The decrease in backlog, to more historical levels, is a result of fulfilling orders at a greater pace in fiscal 2024 as supply

chain conditions stabilized and production lead times improved, utilizing our increased capacity, and order pace returning to more normalized rates.

We expect to fulfill the backlog as of April 27, 2024 within the next 24 months .

The timing of backlog may be impacted by project delays resulting from parts availability and other constraints stemming from the supply chain disruptions.

The timing of backlog fulfillment may be impacted by project delays resulting from customer site conditions, which are outside our control.

Government and Other Regulation

11 unchanged sentences

and payment of certain import or export tariffs, duties, or taxes.

Our global operations subject us to various laws and regulations, including laws and regulations relating to tax compliance, anti-corruption, data privacy, cybersecurity, governance, and disclosure reporting.

Our obligations to conduct site work, including installations or repair, require us to comply with environmental rules and regulation, wage requirements, and safety standards.

Often, certain contracts require us to have accident prevention programs that provide for frequent and regular inspection of the jobsites, materials, and equipment by competent persons.

These requirements vary and can involve matters and processes such as using resources for related expertise and information systems, records management, policy creation and maintenance, data protection programs, compliance filings, control design and testing, and continued training of employees.

12 unchanged sentences

We invest in our development and our affiliates to increase differentiated product platforms, advance our software architecture and offerings, support customer requirements, advance new competitive narrow pixel and micro-electronic technologies, and advance sustainable technologies and related products.

During the first half of fiscal 2023, our design teams focused on adjusting designs to utilize available components as a strategy to gain stability in our production levels.

During fiscal 2024, we will continue to invest in product design and development to improve our video technology over a wide range of pixel pitches and sustainable technologies for both indoor and outdoor applications and to advance micro-LED devices and placement processes.

During fiscal 2024, our design teams focused on investing in product design and development to improve our video technology over a wide range of pixel pitches and sustainable technologies for both indoor and outdoor applications and to advance micro-LED devices and placement processes.

These new or improved technologies are focused on varied pixel density for image quality and use, expanded product line offerings for our various markets and geographies, improved quality and reliability, and improved cost points.

13 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business