What changed in this filing

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Item 1. Business

2025-06-25 compared with 2024-06-26 · 53 added, 43 removed, 218 unchanged (31% of the section changed)

Business Overview

Daktronics, Inc.

and its subsidiaries (the “Company”, “Daktronics”, “we”, “our”, or “us”) are industry leaders in designing and manufacturing electronic scoreboards, programmable display systems and large screen video displays for sporting, commercial and transportation applications.

Daktronics is an industry leader in designing and manufacturing electronic scoreboards, programmable display systems, large screen video displays for sporting, and commercial and transportation applications.

We serve our customers by providing high quality standard display products as well as custom-designed and integrated systems.

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marketing and sales, engineering and product design and development, manufacturing, technical contracting, professional services, and customer service and support.

We were founded in 1968 by Drs.

Aelred Kurtenbach and Duane Sander, professors of electrical engineering at South Dakota State University in Brookings, South Dakota.

We were founded in 1968 by Dr.

Aelred Kurtenbach and Dr.

Duane Sander, professors of electrical engineering at South Dakota State University in Brookings, South Dakota.

The Company began with the design and manufacture of electronic voting systems for state legislatures.

In 1971, Daktronics developed the patented Matside® wrestling scoreboard, the first product in the Company's growing and evolving line.

In 1971, Daktronics developed the patented Matside® wrestling scoreboard, the first product in the Company’s growing and evolving line of scoreboard products.

In 1994, Daktronics became a publicly-traded company and invested in display technologies and new markets.

During fiscal 2025, we formed a Business Transformation Office (“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.

We have continued these investments and have supported our long-term customer relationships to grow from a small company operating out of a garage to a world leader in the display industry.

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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.

We file annual, quarterly and current reports, proxy statements, and other information with the SEC.

Daktronics makes available, free of charge on the “Investor Relations” section of our website at https://investor.daktronics.com/ our annual reports on Form 10-K;

quarterly reports on Form 10-Q;

current reports on Form 8-K;

Forms 3, 4 and 5 filed on behalf of directors and executive officers;

and any amendments to those reports filed or furnished pursuant to the Exchange Act.

Our reports and other information filed with the SEC are made available as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC.

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

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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

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

applications engineering;

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A key strategy of ours is to increase standardization and commonality of parts and manufacturing processes across product lines through the use of product platforms to increase efficiencies.

Other strategies include supplier management programs and lean manufacturing techniques.

For more details on our facilities, see "Part II, Item 2.

Other strategies include supplier management programs, reduction in complexity focus, and lean manufacturing techniques.

For more details on our facilities, see “Part I, Item 2.

Properties” in this Form 10-K.

Technical Contracting.

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• Digit and price displays

• Indoor dynamic messaging systems and indoor liquid crystal display ("LCD") signs

• Software and controllers including Venus® Control Suite, Show Control Studio and Show Control Live

• Indoor dynamic messaging systems

• Software and controllers including Venus® Control Suite (“VCS”), Show Control Studio, and Show Control Live

Each of these product families is described below:

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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.

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

Galaxy® displays are full color or monochrome with varying pixel spacing depending on color, size, and viewing distance.

Galaxy® displays can display text, graphics and animation, as well as prerecorded video clips.

They are used primarily to convey information and on-premises advertising to consumers.

The Venus® Control Suite software is used to control the creation of messages and graphic sequences for uploading to the Galaxy® displays.

They are used primarily to convey information and on-premise advertising to consumers.

The VCS software is used to control the creation of messages and graphic sequences for uploading to the Galaxy® displays.

This software is designed to be user friendly and applicable to all general advertising or message applications.

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Fuelight™ digit displays are specifically designed for the petroleum industry, offering high visibility and quick fuel price updates using the Fuelink™ control software.

Indoor Dynamic Messaging Systems and LCD screens.

Our ADFLOW DMS™ systems include indoor networked solutions for retailers, convenience stores and other businesses.

These solutions, using either LED or LCD technologies, allow customers to broadcast advertising campaigns and other information through the software, media players and visual hardware.

Software and Controllers including Venus ® Control Suite.

The Venus® Control Suite is our platform for scheduled control capability.

It can be used in any application where the intended message is created in advance and scheduled to play at a predetermined time.

Indoor Dynamic Messaging Systems.

Our Indoor Dynamic Messaging Solutions, including our legacy ADFLOW DMS™ systems, are designed for retailers and convenience stores to effectively deliver advertising campaigns and information through LED or LCD technologies.

We are now transitioning these clients to our advanced VCS system.

VCS builds on the foundation of DMS by offering enhanced features, improved scalability, and more integrated software capabilities, ensuring that customers continue to receive cutting-edge support as we evolve beyond DMS.

This strategic shift reflects our commitment to innovation and customer satisfaction in delivering dynamic messaging solutions tailored for modern business environments.

Software and Controllers including VCS.

The VCS is our platform for scheduled control capability.

It can be used in any application, including Content and Advertising Software as a Service (“SaaS”), where the intended message is created in advance and scheduled to play at a predetermined time.

It is available in an on-premise or hosted cloud-based configuration and is capable of supporting a single display or scaling to support many displays.

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.

For applications that require both scheduled content and live video or real-time content, a control solution can combine the capabilities of VCS 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, 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.

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

Show Control Studio offers products designed for display control, while Show Control Live is designed for video production.

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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.

Periodically, we enter into pricing agreements or purchasing contracts under which we agree to purchase a minimum amount of product in exchange for guaranteed price terms over the length of the contract, which generally does not exceed one year.

Our sourcing group is responsible for maintaining and implementing strategies to mitigate these evolving risks.

Periodically, we enter into pricing agreements or

purchasing contracts under which we agree to purchase a minimum amount of product in exchange for guaranteed price terms over the length of the contract, which generally does not exceed one year.

We sometimes prepay for future supply.

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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.

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Uniquely configured orders can include several displays, controllers, and subcontracted structure builds, each of which can occur on varied schedules per the customer’s needs.

Our third fiscal quarter sales and profit levels are lighter than other quarters due to the seasonality of our sports business, construction cycles, and the reduced number of production days due to holidays in the quarter.

Our third fiscal quarter sales and profit levels are lower than in other quarters because the seasonality of our sports business, construction cycles, and the reduced number of production days due to holidays in the quarter.

Our gross margins tend to fluctuate more on uniquely configured orders than on limited configured orders.

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

The loss of one or more customers could have an adverse effect on us.

The loss of one or more customers could have a material adverse effect on us.

Segment Reporting” of the Notes to our Consolidated Financial Statements included in this Form 10-K for our primary markets and customers of each business unit.

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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.

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 multi-million dollar projects.

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

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

Management uses backlog information for capacity and resource planning.

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Our product order backlog as of April 26, 2025 was $341.6 million as compared to $316.9 million as of April 27, 2024.

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.

Historically, our backlog varies due to the seasonality of our business, the timing of large projects, and customer delivery schedules for these orders.

The increase in backlog is a result of more order bookings with the continued market adoption of digital display technology.

We expect to fulfill the backlog as of April 26, 2025 within the next 24 months .

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

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

Government and Other Regulation

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

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.

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

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

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

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Countries and states and/or localities in the United States can issue lock down orders impacting the availability of employees, third parties, suppliers, customers, and other services we need to operate our business.

Although there is no assurance that existing or future government laws applicable to our operations, services or products will not have a material adverse effect on our capital expenditures, results of operations and competitive position, we do not currently anticipate material expenditures for compliance with government regulations.

We believe we are in material compliance with government and other regulatory requirements.

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Our competitors may develop lower-cost or lower-featured products, may be willing to charge lower prices to increase their market share, or include different service and controller offerings.

Some competitors have more capital, governmental funding, supply chain access, and other resources, which may allow them to take advantage of acquisition opportunities or adapt more quickly to changes in customer requirements.

Some competitors have more capital, governmental funding, supply chain access,

and other resources, which may allow them to take advantage of acquisition opportunities or adapt more quickly to changes in customer requirements.

Other competitors use sponsorships as a way to win business at a particular location or market.

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Research and Development

Our experience in engineering, process design, and product and service design and development capabilities and investments made in affiliates 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.

Our experience in engineering, process design, product and service design, development capabilities, and investments made in affiliates 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 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 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.

During fiscal 2025, our design teams focused on advancing product features aligned with customer needs and reducing 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.

Employees and Human Capital Resource Management

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We facilitate Company-wide teams to inspire a more inclusive culture and achieve company goals through teamwork.

We encourage each employee to proactively and continuously build self-awareness, understanding of aspects of diversity, and openness to others’ experiences and perspectives.

We encourage each employee to proactively and continuously build self-awareness, an understanding of aspects of diversity, and an openness to others’ experiences and perspectives.

We also foster and encourage self-development and a continuous learning environment to build talent.

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None of our employees are represented by a collective bargaining agreement.

We believe employee relations are good.

We believe our relations with our employees are good.

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