What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-06-25 compared with 2024-06-26 · 304 added, 253 removed, 1066 unchanged (34% of the section changed)

1 unchanged sentence

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Daktronics, Inc.

To the stockholders and the Board of Directors of Daktronics, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Daktronics, Inc.

and subsidiaries (the "Company") as of April 27, 2024 and April 29, 2023, the related consolidated statements of operations, comprehensive income (loss), shareholders' equity, and cash flows, for each of the three years in the period ended April 27, 2024, and the related notes (collectively referred to as the "financial statements").

and subsidiaries (the "Company") as of April 26, 2025 and April 27, 2024, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity, and cash flows, for each of the three years in the period ended April 26, 2025, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 26, 2025 and April 27, 2024, and the results of its operations and its cash flows for each of the three years in the period ended April 26, 2025, in conformity with accounting principles generally accepted in the United States of America.

45 unchanged sentences

Restricted cash — 379

Marketable securities — 534

Accounts receivable, net 92,762 117,186

10 unchanged sentences

Debt issuance costs, net 1,289 2,530

Investment in affiliates and other assets 21,163 27,928

Right of use, investment in affiliates, and other assets 9,378 21,163

Deferred income taxes 32,104 25,862

5 unchanged sentences

April 26, 2025 April 27, 2024

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

12 unchanged sentences

Total long-term liabilities 58,956 96,796

SHAREHOLDERS' EQUITY:

Preferred Shares, no par value, authorized 50 shares;

STOCKHOLDERS’ EQUITY:

Preferred Shares, $ 0.00001 par value, authorized 5,000 shares;

no shares issued and outstanding

Common stock, no par value, authorized 115,000 shares;

Common stock, $ 0.00001 par value, authorized 115,000 shares;

53,030 and 48,121 shares issued as of April 26, 2025 and April 27, 2024, respectively

65,525 63,023

Additional paid-in capital 189,940 117,571

Retained earnings 127,910 138,031

Treasury stock, at cost, 1,907 shares as of April 27, 2024 and April 29, 2023, respectively

Treasury stock, at cost, 3,979 and 1,907 shares as of April 26, 2025 and April 27, 2024, respectively

( 39,759 ) ( 10,285 )

Accumulated other comprehensive loss ( 6,160 ) ( 6,525 )

TOTAL SHAREHOLDERS' EQUITY 238,792 200,878

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 527,884 $ 468,104

TOTAL STOCKHOLDERS’ EQUITY

271,931 238,792

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 502,892 $ 527,884

See Notes to Consolidated Financial Statements.

14 unchanged sentences

Operating income 33,118 87,115 21,388

Nonoperating (expense) income:

Interest (expense) income, net ( 3,418 ) ( 920 ) 171

Nonoperating income (expense):

Interest income (expense), net 1,347 ( 3,418 ) ( 920 )

Change in fair value of convertible note ( 22,521 ) ( 16,550 ) —

Other expense and debt issuance costs write-off, net ( 17,795 ) ( 13,096 ) ( 7,211 )

Income before income taxes 54,051 13,257 1,108

(Loss) income before income taxes ( 5,851 ) 54,051 13,257

Income tax expense 4,270 19,430 6,455

Net income $ 34,621 $ 6,802 $ 592

Net (loss) income $ ( 10,121 ) $ 34,621 $ 6,802

Weighted average shares outstanding:

1 unchanged sentence

Diluted 47,587 46,543 45,521

Earnings per share:

(Loss) Earnings per share:

Basic $ ( 0.21 ) $ 0.75 $ 0.15

6 unchanged sentences

April 26, 2025 April 27, 2024 April 29, 2023

Net income $ 34,621 $ 6,802 $ 592

Net (loss) income $ ( 10,121 ) $ 34,621 $ 6,802

Other comprehensive income (loss):

Cumulative translation adjustments 363 ( 1,020 ) ( 616 )

Unrealized gain (loss) on available-for-sale securities, net of tax 24 12 ( 34 )

Total other comprehensive (loss), net of tax ( 996 ) ( 604 ) ( 2,590 )

Comprehensive income (loss) $ 33,625 $ 6,198 $ ( 1,998 )

Unrealized gain on available-for-sale securities, net of tax 2 24 12

Total other comprehensive income (loss), net of tax 365 ( 996 ) ( 604 )

Comprehensive (loss) income $ ( 9,756 ) $ 33,625 $ 6,198

See Notes to Consolidated Financial Statements.

1 unchanged sentence

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

4 unchanged sentences

Number Amount Number Amount

Balance as of May 1, 2021:

Balance as of April 30, 2022:

46,733 $ — $ 110,166 $ 96,608 ( 1,907 ) $ ( 10,285 ) $ ( 4,925 ) $ 191,564

7 unchanged sentences

Employee savings plan activity 424 — 1,208 — — — — 1,208

Treasury stock reissued — — 4 — 31 196 — 200

Treasury stock purchase — — — — ( 641 ) ( 3,184 ) — ( 3,184 )

Balance as of April 29, 2023:

10 unchanged sentences

48,121 — 117,571 138,031 ( 1,907 ) ( 10,285 ) ( 6,525 ) 238,792

Net income — — — 34,621 — — — 34,621

Net loss — — — ( 10,121 ) — — — ( 10,121 )

Cumulative translation adjustments — — — — — — 363 363

1 unchanged sentence

Share-based compensation — — 2,944 — — — — 2,944

Conversion of an equity award to a liability award — — ( 680 ) — — — — ( 680 )

Exercise of stock options 646 — 5,153 — — — — 5,153

2 unchanged sentences

Employee savings plan activity 148 — 1,192 — — — — 1,192

Treasury stock purchase — — — — ( 2,071 ) ( 29,474 ) — ( 29,474 )

Settlement of convertible note 4,009 — 64,366 — — — — 64,366

Balance as of April 26, 2025:

7 unchanged sentences

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 34,621 $ 6,802 $ 592

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Net (loss) income $ ( 10,121 ) $ 34,621 $ 6,802

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation and amortization 19,547 19,291 16,993

Loss (gain) on sale of property, equipment and other assets 44 ( 691 ) ( 743 )

(Gain) loss on sale of property, equipment and other assets ( 156 ) 44 ( 691 )

Share-based compensation 2,944 2,090 2,027

Equity in loss of affiliates 3,053 3,764 3,332

Provision (recovery) for doubtful accounts, net 373 1,009 ( 286 )

Allowance for credit losses on affiliate loan 15,480 — —

(Recovery) provision for doubtful accounts, net ( 644 ) 373 1,009

Deferred income taxes, net ( 6,300 ) ( 9,069 ) ( 3,633 )

3 unchanged sentences

Change in operating assets and liabilities 51,389 ( 14,135 ) ( 19,864 )

Net cash provided by (used in) operating activities 63,241 15,024 ( 27,035 )

Net cash provided by operating activities 97,713 63,241 15,024

CASH FLOWS FROM INVESTING ACTIVITIES:

1 unchanged sentence

Proceeds from sales of property, equipment and other assets 277 174 822

Purchases of marketable securities — — ( 4,045 )

Proceeds from sales or maturities of marketable securities — 550 3,490

10 unchanged sentences

Tax payments related to RSU issuances ( 606 ) ( 303 ) ( 140 )

Net cash provided by (used in) financing activities 15,122 17,568 ( 3,576 )

Net cash (used in) provided by financing activities ( 27,449 ) 15,122 17,568

EFFECT OF EXCHANGE RATE CHANGES ON CASH ( 653 ) ( 69 ) ( 522 )

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 56,988 6,682 ( 62,394 )

NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 45,829 56,988 6,682

CASH, CASH EQUIVALENTS AND RESTRICTED CASH:

6 unchanged sentences

Nature of business :

Daktronics, Inc.

and its subsidiaries are engaged principally in the design, market, and manufacture of a wide range of integrated electronic display systems and related products which are sold in a variety of markets throughout the world and the rendering of related maintenance and professional services.

The Company is engaged principally in the design, market, and manufacture of a wide range of integrated electronic display systems and related products which are sold in a variety of markets throughout the world and the rendering of related maintenance and professional services.

Our products are designed primarily to inform and entertain people through the communication of content.

12 unchanged sentences

These arrangements had an aggregate amount of contract assets, contract liabilities, and gross profit of $ 0 , $ 41 , and $ 89 , respectively, as of and for the year ended April 26, 2025.

As of April 29, 2023, the aggregate amount of contract assets and gross profit was $ 5,223 and $ 2,748 , respectively.

As of April 27, 2024, the aggregate amount of contract assets, contract liabilities, and gross profit was $ 1,955 , $ 38 , and $ 2,761 , respectively.

Investments in affiliates :

14 unchanged sentences

The determination of whether an entity is a VIE and whether we are the primary beneficiary may involve significant judgment and depends upon facts and circumstances specific to an entity at the time of the assessment.

Upon occurrence of certain events such as changes to the entity's legal formation or equity at risk, we reassess whether changes in facts and circumstances cause a change in the status of an entity as a VIE or voting interest entity, and/or a change in our consolidation assessment.

Upon the occurrence of certain events such as changes to the entity’s legal formation or equity at risk, we reassess whether changes in facts and circumstances cause a change in the status of an entity as a VIE or a voting interest entity and/or a change in our consolidation assessment.

Changes in consolidation status are applied prospectively.

4 unchanged sentences

We use the equity method to account for investments in companies if our investment provides us with the ability to exercise significant influence over operating and financial policies of the investee.

Our consolidated net income includes our Company's proportionate share of the net income or loss of these companies.

Our judgment regarding the level of influence over each equity method investee includes considering key factors such as our ownership interest, representation on the board of directors, participation in policy-making decisions, other commercial arrangements, and material intercompany transactions.

We evaluated the nature of our investment in affiliates of Xdisplay TM ("XDC"), which is developing micro-LED mass transfer expertise and technologies, and Miortech (dba Etulipa), which is developing low power outdoor electrowetting technology.

We evaluated the nature of our investment in affiliates of Xdisplay TM (“XDC”), which is developing micro-LED mass transfer expertise and technologies, and Miortech (dba Etulipa) (“Mirotech”), which is developing low power outdoor electrowetting technology.

Our ownership in Miortech was 55.9 percent and in XDC was 16.4 percent as of April 26, 2025.

The aggregate amount of our investments accounted for under the equity method was $ 0 and $ 1,813 as of April 26, 2025 and April 27, 2024, respectively.

We determined both entities are a VIE, and based on management's analysis, we determined that Daktronics is not the primary beneficiary because the power criterion was not met;

therefore, the investments in Miortech and XDC are accounted for under the equity method.

Our consolidated net income includes our Company's proportionate share of the net income or loss of each affiliates.

We determined both entities are variable interest entities, and, based on management’s analysis, we determined that Daktronics is not the primary beneficiary because the power criterion was not met.

Therefore, as Daktronics does not have control, but is able to exercise significant influence, the investments in Miortech and XDC are accounted for under the equity method.

Our proportional share of the respective affiliates’ earnings or losses is included in the “Other expense and debt issuance costs write-off, net” line item in our Consolidated Statements of Operations.

1 unchanged sentence

We review our investments in affiliates for impairment indicators.

In fiscal years 2024 and 2023, we concluded there was an other-than-temporary impairment of our investment in Miortech and recorded an impairment loss of $ 1,392 and $ 4,473 , respectively, to reflect the investment at fair market value (level 3).

In fiscal year 2024, we concluded there was other-than-temporary impairment of our investment in XDC and recorded an impairment loss of $ 4,967 , to reflect the investment at fair market value (level 3).

For the fiscal years 2025, 2024 and 2023, we recorded impairment losses of $ 0 , $ 6,359 , and $ 4,473 , respectively, to reflect the investments at fair market value (level 3) when we concluded there was an other-than-temporary impairment in our investments in affiliates.

We purchased services for research and development activities from our equity method investees.

The total of these related party transactions for fiscal years 2024, 2023 and 2022 was $ 577 , $ 672 , and $ 1,520 , respectively, which is included in the "Product design and development" line item in our consolidated statements of operations, and as of April 27, 2024 and April 29, 2023, $ 146 and $ 52 , respectively, remains unpaid and is included in the "Accounts payable " line item in our consolidated balance sheet.

The total of these related party transactions for fiscal years 2025, 2024, and 2023 was $ 771 , $ 577 , and $ 672 , respectively, which is included in the “Product design and development” line item in our Consolidated Statements of Operations, and, as of April 26, 2025 and April 27, 2024, $ 75 and $ 146 , respectively, remains unpaid and is included in the “Accounts payable ” line item in our Consolidated Balance Sheets.

Summarized financial information for equity method investments consist of the following:

8 unchanged sentences

Loans to affiliates.

We also have advanced our affiliates convertible and promissory notes (collectively, the "Affiliate Notes").

We advanced $ 5,050 and $ 4,315 in fiscal 2024 and in fiscal 2023, respectively.

The total amount of Affiliate Notes was $ 14,241 and $ 8,789 as of April 27, 2024 and April 29, 2023, respectively.

The balances of Affiliate Notes are included in the "Investments in affiliates and other assets" line item in our consolidated balance sheets.

We also have advanced loans to our affiliates under convertible and promissory notes (collectively, the “Affiliate Notes”).

We advanced $ 4,565 in fiscal 2025 and $ 5,050 in fiscal 2024 under the Affiliate Notes.

We have accrued interest related to the Affiliate Notes of $ 838 and $ 449 as of April 26, 2025 and April 27, 2024, respectively.

The total face value of the outstanding amount of the Affiliate Notes was $ 19,843 and $ 14,241 as of April 26, 2025 and April 27, 2024, respectively.

The balances of Affiliate Notes are included in the “Right of use, investment in affiliates, and other assets” line item in our Consolidated Balance Sheets.

We evaluate the Affiliate Notes for impairment and credit losses.

As of April 27, 2024 and April 29, 2023, no provision for losses were recorded as management's analysis concluded the Affiliate Notes were collectable or realizable based on the rights of these instruments and related valuation of each affiliate.

The Affiliate Notes balance combined with the investment in affiliates balance totaled $ 16,054 and $ 20,723 as of April 27, 2024 and April 29, 2023.

During the fourth quarter of fiscal 2025, a provision for expected credit losses of $ 15,480 was recorded as management’s analysis concluded a note related to one of our affiliates is anticipated to be uncollectible.

This is included in the “Other expense and debt issuance costs write-off, net” line item in our Consolidated Statements of Operations.

As of April 27, 2024, no provision for losses were recorded.

The Affiliate Notes balance combined with the investment in affiliates balance totaled $ 3,123 and $ 16,054 as of April 26, 2025 and April 27, 2024, respectively.

We are committed to invest an additional $ 400 in fiscal 2026 in our current affiliates.

Use of estimates :

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions affecting the reported

amounts of assets and liabilities;

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities;

the disclosure of contingent assets and liabilities at the date of the financial statements;

2 unchanged sentences

Due to the inherent uncertainty involved in making estimates, actual results in future periods may differ from those estimates.

Material estimates that are particularly susceptible to significant change in the near-term relate to the determination of the estimated total costs on uniquely configured contracts and estimated costs to be incurred for product warranties, income taxes, and valuation of investment in and advances to affiliates.

Estimation processes are also used in inventory valuation and for determining the allowance for credit losses, share-based compensation, goodwill impairment, value of long-term assets, and extended warranty and product maintenance agreements.

Risks and uncertainties include, but are not limited to, uncertainty in the current economic environment as a result of macroeconomic factors such as inflation, tariffs, fluctuations in foreign currency exchange rates relative to the U.S.

dollar, changes in interest rates, and ongoing and new geopolitical conflicts.

Material estimates that are particularly susceptible to significant change in the near-term relate to the determination of the estimated total costs on uniquely configured contracts and estimated costs to be incurred for product warranties, income taxes, and the valuation of investments in and advances to affiliates.

Estimation processes are also used in inventory valuation and for determining the allowance for credit losses, share-based compensation, goodwill impairment, the value of long-term assets, and extended warranty and product maintenance agreements.

Changes in estimates are reflected in the periods in which they become known.

16 unchanged sentences

Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

Cost is measured as the price of the components and allocated expenses for production or betterment of the inventory item are applied to the purchase cost of the raw materials.

Cost is measured as the price of the components and allocated expenses for production or betterment of the inventory item that are applied to the purchase cost of the raw materials.

When we estimate net realizable value to be lower than cost, any necessary adjustments are charged to cost of sales in that period.

In determining net realizable value, we review various factors such as current inventory levels, forecasted demand, costs of completion, and technological obsolescence.

In determining net realizable value, we review various factors such as current inventory levels, forecast demand, costs of completion, and technological obsolescence.

Allowance for credit losses:

We make estimates regarding the collectability of our accounts receivable, long-term receivables, contract assets and other receivables.

We make estimates regarding the collectability of our accounts receivable, long-term receivables, notes receivable, contract assets, and other receivables.

In evaluating the adequacy of our allowance for credit losses, we analyze specific balances, customer creditworthiness, changes in customer payment cycles, and current economic trends.

1 unchanged sentence

In addition, in accordance with ASC 326, Financial Instruments - Credit Losses , an allowance is maintained for estimated forward-looking losses resulting from the possible inability of customers to make required payments (current expected losses).

The amount of the allowance is determined principally on the basis of past collection experience and known financial factors regarding specific customers.

The amount of the allowance is determined principally on

the basis of past collection experience and known financial factors regarding specific customers.

We charge off receivables at such time it is determined collection will not occur against the allowance for credit losses.

2 unchanged sentences

Contracts are identified and follow the revenue recognition policies when all of the following occur:

we have evidence that all parties to the contract have approved the contract and are committed to perform their respective obligations, we can identify each party’s rights regarding the goods or services to be transferred, we can identify the payment terms for the goods or services to be transferred, the contract has commercial substance, and it is probable we will collect substantially all of the consideration to which we would be entitled in exchange for the goods or services.

we have evidence that all parties to the contract have approved the contract and are committed to perform their respective obligations;

we can identify each party’s rights regarding the goods or services to be transferred;

we can identify the payment terms for the goods or services to be transferred;

the contract has commercial substance;

and it is probable we will collect substantially all of the consideration to which we would be entitled in exchange for the goods or services.

Pre-contract costs are generally expensed as incurred, unless they are directly associated with an anticipated contract and recoverability from that contract is probable.

9 unchanged sentences

When we are responsible for site installations which include subcontracted work, we maintain the contractual responsibilities and risks and include the consideration for these services in the transaction price.

When our contract contains variable consideration, including return rights, discounts, claims, unpriced change orders, and liquidated damages, we estimate the transaction price using the expected value (i.e., the sum of the probability-weighted amount) or the most likely amount method, whichever is expected to better predict revenue for that contract situation.

When our contract contains variable consideration, including return rights, discounts, claims, unpriced change orders, and liquidated damages, we estimate the transaction price using the expected value (that is, the sum of the probability-weighted amount) or the most likely amount method, whichever is expected to better predict revenue for that contract situation.

We also constrain the revenue to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

4 unchanged sentences

See “Note 6 .

Accounts Receivable, net" for amounts recorded in long-term receivables.

Accounts Receivable, Net” of the Notes to our Consolidated Financial Statements included in this Form 10-K for amounts recorded in long-term receivables.

When separate performance obligations are identified, we allocate the transaction price to the individual performance obligations based on the best method we judge to be a faithful depiction of the value of each performance obligation.

1 unchanged sentence

therefore, for these contracts, we primarily use the cost plus a margin approach to allocate the relative transaction price to identified performance obligations, as it is the best representative of our pricing methods.

Estimated contract revenues and costs include management’s latest estimate using significant judgments with respect to the complexity of the scope and duration of a particular contract, project to-date performance and conditions, knowledge of any stated or expected project dispute or other claim, and market conditions for input costs.

Unanticipated costs that exceed our original estimates may not be recoverable under fixed price contracts.

Changes in costs may occur as a result of several factors including, but not limited to, the cost, shortages or non-availability of materials or labor;

unanticipated technical problems;

required project modifications not initiated by the customer;

increases in tariffs on imports of inputs, unanticipated technical problems;

required project modifications not

initiated by the customer;

suppliers’ or subcontractors’ failure to perform or delay in performing their obligations;

3 unchanged sentences

We evaluate changes in estimates on a contract-by-contract basis, and estimates are made when the revisions are probable and reasonably estimable.

Provisions of estimated losses on uncompleted contracts are made in

the period when such losses are capable of being estimated.

Provisions of estimated losses on uncompleted contracts are made in the period when such losses are capable of being estimated.

The cumulative catch-up method is used to account for revisions in estimates.

16 unchanged sentences

In our judgment, this accounting treatment is most appropriate because the substantial part of our promise to customers is to provide significant integration services and incorporate individual goods and services into a combined output or system.

Often times, the system is customized or significantly modified to the customer's desired configurations and location, and the interrelated goods and services provide utility to the customer as a package.

Often times, the system is customized or significantly modified to the customer’s desired configuration and location, and the interrelated goods and services provide utility to the customer as a package.

Revenue for uniquely configured (custom) or integrated systems is recognized over time using the cost-to-cost input method by comparing cumulative costs incurred to the total estimated costs and applying that percentage of completion to the transaction price to recognize revenue.

10 unchanged sentences

We treat contract modifications as a separate contract and new performance obligations when the additional goods or services are distinct and do not add to the unique configuration or are outside the integrated system and when the consideration reflects standalone selling prices.

If the additional goods or services offered under the modification enhance the uniquely configured or integrated systems, revenue is allocated to the existing contracts' performance obligation.

If the additional goods or services offered under the modification enhance the uniquely configured or integrated systems, revenue is allocated to the existing contract’s performance obligation.

Modifications may cause changes in the timing of revenue recognition depending on the allocation to various performance obligations.

The time between contract order and project completion is typically less than 12 months but may extend longer depending on the amount of custom work and customers’ delivery needs.

The time between contract order and project completion is typically less than 12 months but may extend longer depending on the amount of custom work and customer’s delivery needs.

Limited configuration (standard systems) and after-sale parts contracts :

Limited configuration (standard systems) or after-sale parts contracts with limited or no configuration or limited integration are recognized as distinct individual performance obligations when material.

When not distinct, we combine into one performance

obligation the goods and/or services until the bundle of goods or services is distinct.

When not distinct, we combine into one performance obligation the goods and/or services until the bundle of goods or services is distinct.

For standard display purchases made in large quantities, we account for each piece of equipment separately as a distinct performance obligation from which a customer derives benefit.

5 unchanged sentences

Therefore, we have an alternative use for the performance obligation and recognize revenue upon our substantial completion and at the point in time we estimate control has transferred to the customer.

When limited configured single performance obligations are more service-type (i.e., installation and integration services), we recognize revenue over time using the cost-to-cost input method, by comparing cumulative costs incurred to the total estimated costs, and applying that percentage of completion to the transaction price to recognize revenue.

When limited configured single performance obligations are more service-type (that is, installation and integration services), we recognize revenue over time using the cost-to-cost input method by comparing cumulative costs incurred to the total estimated costs and applying that percentage of completion to the transaction price to recognize revenue.

We believe the cost-to-cost input method is the most faithful depiction of the customer obtaining control and benefits from the work performed.

1 unchanged sentence

Services sold on a stand-alone basis or after the initial system sale include performance obligations such as event support, control room design, on-site training, equipment service, service-type warranties, technical support, software sold as a service, and other immaterial revenue streams.

These are contracted with a customer generally per service event or service type on a stand-alone basis.

These are generally contracted with a customer per service event or service type on a stand-alone basis.

Services, service type warranties, and other are recognized as net sales when the services are performed, and control is transferred to the customer at a point in time when title or control passes or over time as services are performed and for time-based “stand ready to perform” type obligations.

11 unchanged sentences

We estimate the costs which may be incurred under the contractual warranty obligations (assurance type warranty) and record a liability in the amount of such estimated costs at the time the revenue is recognized.

Factors affecting our estimate of the cost of our warranty obligations include historical experience and expectations of future conditions.

Factors affecting our estimate of the cost of our warranty obligations include government tariffs, historical experience, and expectations of future conditions.

We continually assess the adequacy of our recorded warranty accruals and, to the extent we experience any changes in warranty claim activity or costs associated with servicing those claims, our accrued warranty obligation is adjusted accordingly.

34 unchanged sentences

The operating results of foreign operations are translated at weighted average exchange rates.

The related translation gains or losses are reported as a separate component of shareholders’ equity in accumulated other comprehensive loss.

The related translation gains or losses are reported as a separate component of stockholders’ equity in accumulated other comprehensive loss.

Income taxes :

10 unchanged sentences

See “Note 12.

Income Taxes" for further information.

Income Taxes” of the Notes to our Consolidated Financial Statements included in this Form 10-K for further information.

Self-Insurance :

1 unchanged sentence

Under these plans, liabilities are recognized for claims incurred, including those incurred but not reported.

We use historical expense trend information and claim information or third-party administrators and actuaries who use historical claims experience and various state statutes to assist in the determination of the accrued liability balance.

We self-insure our health insurance benefit and maintain an excess liability insurance policy with outside insurance carriers to minimize the risks related to catastrophic claims in excess $ 250 per occurrence for health insurance and personal injury matters.

We use historical expense trend information, claim information, or third-party administrators and actuaries who use historical claims experience and various state statutes to assist in the determination of the accrued liability balance.

For workers compensation and health insurance claims, we maintain an excess liability insurance policy with outside insurance carriers to minimize the risks related to catastrophic claims in excess $ 250 per occurrence for health insurance and personal injury matters.

Any material change in the aforementioned factors could have an adverse impact on operating results.

Balances are included within accrued expenses on the consolidated balance sheets.

Balances are included within accrued expenses on the Consolidated Balance Sheets included in this Report.

Comprehensive income (loss) :

We follow the provisions of ASC 220 , Reporting Comprehensive Income , which establishes standards for reporting and displaying comprehensive income (loss) and its components, and disclose these components in the consolidated statements of comprehensive income.

We follow the provisions of ASC 220 , Reporting Comprehensive Income , which establishes standards for reporting and displaying comprehensive income (loss) and its components, and we disclose these components in the Consolidated Statements of Comprehensive Income.

Comprehensive income (loss) reflects the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

For us, comprehensive income (loss) represents net income adjusted for cumulative foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities.

For us, comprehensive income (loss) represents net (loss) income adjusted for cumulative foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities.

The foreign currency translation adjustment included in the comprehensive income (loss) calculation has not been tax affected, as the investments in foreign affiliates are deemed to be permanent.

2 unchanged sentences

Our product design and development activities include the enhancement of existing products and technologies and the development of new products and technologies.

In April 2025, the Company filed a certificate of incorporation with the State of Delaware to incorporate under the laws of that state.

The Company assigned a par value of $ 0.00001 per common and preferred share in the Certificate of Incorporation.

Prior to incorporation in the State of Delaware, the Company’s common and preferred shares had no par value.

In connection with this incorporation and change in par value, the Company has recast prior periods to reflect issued and outstanding shares of common and preferred stock as they would have been presented under the new certificate of incorporation.

Earnings per share (“EPS”) :

We follow the provisions of ASC 260 , Earnings Per Share, where basic EPS is computed by dividing income attributable to common shareholders by the weighted average number of common shares outstanding for the period.

We follow the provisions of ASC 260 , Earnings Per Share, where basic EPS is computed by dividing income attributable to common stockholders by the weighted average number of common shares outstanding for the period.

Diluted EPS reflects the potential dilution which may occur if securities or other obligations to issue common stock were exercised or converted into shares of common stock or resulted in the issuance of shares of common stock which share in our earnings.

The following is a reconciliation of the net income and common share amounts used in the calculation of basic and diluted EPS for the fiscal years ended April 27, 2024, April 29, 2023 and April 30, 2022:

The following is a reconciliation of the net (loss) income and common share amounts used in the calculation of basic and diluted EPS for the fiscal years ended April 26, 2025, April 27, 2024, and April 29, 2023:

April 26, 2025 April 27, 2024 April 29, 2023

Earnings per share - basic

Net income $ 34,621 $ 6,802 $ 592

Net (loss) income $ ( 10,121 ) $ 34,621 $ 6,802

Weighted average shares outstanding 47,587 45,901 45,404

Basic earnings per share $ 0.75 $ 0.15 $ 0.01

Basic (loss) earnings per share $ ( 0.21 ) $ 0.75 $ 0.15

Earnings per share - diluted

Net income $ 34,621 $ 6,802 $ 592

Diluted net income $ 34,621 $ 6,802 $ 592

Net (loss) income $ ( 10,121 ) $ 34,621 $ 6,802

Diluted net (loss) income $ ( 10,121 ) $ 34,621 $ 6,802

Weighted average common shares outstanding 47,587 45,901 45,404

Dilution associated with stock compensation plans — 642 117

Dilution associated with convertible note — — —

Weighted average common shares outstanding, assuming dilution 47,587 46,543 45,521

Diluted earnings per share $ 0.74 $ 0.15 $ 0.01

Diluted (loss) earnings per share $ ( 0.21 ) $ 0.74 $ 0.15

Options outstanding to purchase 49 , 675 and 2,084 shares of common stock with a weighted average exercise price of $ 10.57 , $ 10.29 , and $ 7.47 for the fiscal years ended April 26, 2025, April 27, 2024, and April 29, 2023, respectively, were not included in the computation of diluted EPS because the effects would be anti-dilutive.

During the fiscal year ended April 27, 2024, shares of common stock issuable upon conversion of the secured convertible note in the original principal amount of $ 25,000 due on May 11, 2027 (the "Convertible Note") were not included in the computation of diluted EPS, as the effect would be anti-dilutive.

During the fiscal year ended April 27, 2024, shares of common stock issuable upon conversion of the secured convertible note in the original amount of $ 25,000 due on May 11, 2027 (the “Convertible Note”) were not included in the computation of diluted EPS, as the effect would be anti-dilutive.

For the fiscal year ended April 27, 2024, 3,915 potential common shares related to the Convertible Note were excluded from the calculation of diluted EPS.

3 unchanged sentences

See “Note 10.

Shareholders' Equity and Share-Based Compensation" for additional information and the assumptions we use to calculate the fair value of share-based employee compensation.

Stockholders’ Equity and Share-Based Compensation” of the Notes to our Consolidated Financial Statements included in this Form 10-K for additional information and the assumptions we use to calculate the fair value of share-based employee compensation.

Recent Accounting Pronouncements

Accounting Standards Adopted

In August 2020, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”).

ASU 2020-06 simplified the accounting for certain financial instruments with characteristics of liabilities and equity.

ASU 2020-06 (1) simplified the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt:

Debt with Conversion and Other Options , that required entities to account for beneficial conversion features and cash conversion features in equity separately from the host convertible debt or preferred stock;

(2) revised the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity by removing certain criteria required for equity classification;

and (3) revised the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted EPS for convertible instruments by using the if-converted method.

In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares.

For SEC filers, excluding smaller reporting companies, ASU 2020-06 was effective for

fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

Early adoption was permitted, but no earlier than fiscal years beginning after December 15, 2020.

For all other entities, ASU 2020-06 was effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

In the first quarter of fiscal 2024, we adopted ASU 2020-06 with no material impact to the consolidated financial statements.

On May 11, 2023, we borrowed $ 25,000 in aggregate principal amount evidenced by the secured Convertible Note due May 11, 2027.

Financing Agreements" for further information on the Convertible Note.

Accounting Standards Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures ("ASU 2023-07").

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

ASU 2023-07 requires enhanced disclosures about significant segment expenses.

The Company is required to adopt ASU 2023-07 for its annual reporting in fiscal year 2025 and for interim period reporting beginning in the first quarter of fiscal year 2026 on a retrospective basis.

Early adoption is permitted.

We are currently evaluating the impact of ASU 2023-07 on our segment disclosures.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

ASU 2023-07 requires the retrospective adoption method.

The Company adopted ASU 2023-07 for annual periods beginning in the fiscal year ending April 26, 2025, noting there were no changes to our reportable segments.

The Company plans to adopt ASU 2023-07 for interim periods beginning in the fiscal year ending May 2, 2026.

Segment Reporting” of the Notes to our Consolidated Financial Statements included in this Form 10-K for additional discussion.

Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures (“ASU 2023-09”).

ASU 2023-09 requires the disclosure of specified additional information in its income tax rate reconciliation and to provide additional information for reconciling items that meet a quantitative threshold.

ASU 2023-09 will also require disaggregation of income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions.

ASU 2023-09 will also require the disaggregation of the disclosures of income taxes paid by federal, state, and foreign taxes, with further disaggregation required for significant individual jurisdictions.

The Company is required to adopt this guidance for its annual reporting in fiscal year 2026 on a prospective basis.

1 unchanged sentence

We are currently evaluating the impact of ASU 2023-09 on our income tax disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”), requiring disclosure in the notes to the financial statements for specified information about certain costs and expenses.

ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and for interim periods beginning after December 15, 2027;

however, early adoption is permitted and can be applied either prospectively or retrospectively.

We are currently evaluating the impact of ASU 2024-03 on our disclosures.

Revenue Recognition

40 unchanged sentences

See “Note 3 .

Segment Reporting" for a disaggregation of revenue by geography.

Segment Reporting” of the Notes to our Consolidated Financial Statements included in this Form 10-K for a disaggregation of revenue by geography.

Contract balances

8 unchanged sentences

The changes in our contract assets and contract liabilities from April 27, 2024 to April 26, 2025 were due to the timing of billing schedules and revenue recognition, which can vary significantly depending on the contractual payment terms and the seasonality of the sports markets.

We had no significant impairments of contract assets for fiscal 2024, and we had no impairments of contract assets for fiscal 2023 and 2022.

We had no significant impairments of contract assets for fiscal 2025, 2024, and 2023.

For service-type warranty contracts, we allocate revenue to this performance obligation, recognize the revenue over time, and recognize costs as incurred.

8 unchanged sentences

Contracts in process identified as loss contracts as of April 26, 2025 and April 27, 2024 were immaterial.

Loss provisions are recorded in "Accrued expenses" line item in our consolidated balance sheets.

Loss provisions are recorded in the “Accrued expenses” line item in our Consolidated Balance Sheets.

During fiscal 2025, we recognized revenue of $ 62,228 related to our contract liabilities as of April 27, 2024.

10 unchanged sentences

These segments are based on the customer type or geography and are the same as our operating segments/business units.

Our chief operating decision-maker (CODM), who is our president and chief executive officer, regularly reviews the consolidated financial results in their entirety and the operating segment financials results to the GAAP measure of gross profit.

The CODM has ultimate responsibility for enterprise decisions and making resource allocation decisions for our company and our segments.

Our chief operating decision-maker (CODM), who is our interim president and chief executive officer, regularly reviews the consolidated financial results in their entirety and the operating segment financial results to the GAAP measure of gross profit.

The CODM uses gross profit and considers budget-to-actual variances on a quarterly basis when making decisions about the allocation of operating and capital resources to each segment.

The CODM also uses segment gross profit for evaluating pricing strategy to assess the performance of each segment by comparing the results of each segment with one another.

Assets and capital expenditures are reviewed by the CODM at the consolidated level, rather than segment level, as the information is not used in evaluating segment performance or allocating resources.

The CODM has ultimate

responsibility for enterprise decisions and making resource allocation decisions for our Company and our segments.

Management of each operating segment has the responsibility for operating decisions, allocating resources, and assessing performance within their segment.

23 unchanged sentences

International 61,808 62,210 84,652

818,083 754,196 610,970

Total consolidated net sales 756,477 818,083 754,196

Cost of Sales:

Commercial 117,486 127,393 139,435

Live Events 228,790 242,524 235,645

High School Park and Recreation 108,126 112,985 100,603

Transportation 52,023 59,369 52,481

International 54,565 53,369 74,677

Gross profit:

4 unchanged sentences

International 7,243 8,841 9,975

222,443 151,355 116,697

Operating expenses

Total consolidated gross profit 195,487 222,443 151,355

Selling 60,011 56,954 56,655

2 unchanged sentences

Goodwill impairment — — 4,576

135,328 129,967 112,651

Operating income 87,115 21,388 4,046

Nonoperating income (expense):

Interest (income) expense, net ( 1,347 ) 3,418 920

1 unchanged sentence

Other expense and debt issuance costs write-off, net 17,795 13,096 7,211

Income before income taxes $ 54,051 $ 13,257 $ 1,108

(Loss) Income before income taxes $ ( 5,851 ) $ 54,051 $ 13,257

Depreciation and amortization:

4 unchanged sentences

International 2,144 2,255 2,307

Total depreciation and amortization for reportable segments 15,070 15,691 14,421

Unallocated corporate depreciation 4,477 3,600 2,572

$ 19,291 $ 16,993 $ 15,394

No single geographic area comprises a material amount of our net sales or property and equipment, net of accumulated depreciation, other than the United States.

The following table presents information about net sales and property and equipment, net of accumulated depreciation, in the United States and elsewhere:

Total depreciation and amortization $ 19,547 $ 19,291 $ 16,993

No single country comprises a material amount of our net sales or property and equipment, net of accumulated depreciation, other than the United States.

The following table presents information about net sales, which are based on where the end user is located, and property and equipment, net of accumulated depreciation, in the United States and elsewhere:

April 26, 2025 April 27, 2024 April 29, 2023

8 unchanged sentences

therefore, we are not economically dependent on a limited number of customers for the sale of our products and services.

We have numerous raw material and component suppliers, and no supplier accounts for 10% or more of our cost of sales;

We have numerous raw material and component suppliers, and no supplier accounts for 10 percent or more of our cost of sales;

however, we have a complex global supply chain subject to geopolitical and transportation risks and a number of single-source suppliers that could limit our supply or cause delays in obtaining raw materials and components needed in manufacturing.

5 unchanged sentences

Foreign currency translation ( 29 ) ( 9 ) ( 38 )

Goodwill impairment — — —

Balance as of April 26, 2025:

2 unchanged sentences

Our annual analysis is performed during our third quarter of each fiscal year based on the goodwill amount as of the first business day of our third fiscal quarter.

We performed our annual impairment test on October 29, 2023 and conclude d no goodwill impairment existed for fiscal year 2024 .

The annual impairment test for fiscal year 2023 concluded that the carrying value of the Live Events and International reporting units exceeded their respective fair values and consequently recorded an a $ 4,576 impairment charge.

We determined the fair value of the reporting units based on an income approach, using the present value of future discounted cash flows.

Significant estimates used to determine fair value include the weighted average cost of capital and financial forecasts.

The recognized impairment was primarily a result of our weighted average cost of capital being notably higher, which was driven by strains on our liquidity caused by disrupted supply chains and geopolitical conditions during fiscal 2024.

As a result, the present value of our future cash flows was lower, which caused the impairment charge.

Based on our annual impairment test, we concluded that the fair value of the Commercial and Transportation reporting units exceeded

their respective carrying values and concluded no goodwill impairment existed for those reporting units.

We performed our annual impairment test on Octob er 27, 2024 and c onclude d no goodwill impairment existed for fiscal year 2025 .

The annual impairment test for fiscal year 2024 concluded no goodwill impairment existed.

Accumulated impairments to goodwill as of April 27, 2024 was $ 4,576 .

The amount of accumulated impairments to goodwill as of April 26, 2025 and April 27, 2024 was $ 4,576 .

Intangible Assets

54 unchanged sentences

Interest income 5,834 1,530 207

Interest (expense) income, net $ ( 3,418 ) $ ( 920 ) $ 171

Interest income (expense), net $ 1,347 $ ( 3,418 ) $ ( 920 )

Other expense and debt issuance costs write-off, net consisted of the following:

2 unchanged sentences

Equity in losses of affiliates ( 3,053 ) ( 3,764 ) ( 3,332 )

Allowance for credit losses on affiliate loan ( 15,480 ) — —

Impairment of equity method investees — ( 6,359 ) ( 4,473 )

12 unchanged sentences

The present value of long-term contracts, including accrued interest and current maturities, was $ 3,287 and $ 859 as of April 26, 2025 and April 27, 2024, respectively.

Contract receivables bearing annual interest rates of 8.0 to 9.0 percent are due in varying annual installments through February 2026.

Contract receivables bearing annual interest rates of 8.0 to 9.0 percent are due in varying annual installments through September 2026.

The face value of long-term receivables was $ 3,698 and $ 863 as of April 26, 2025 and April 27, 2024, respectively.

11 unchanged sentences

Credit Agreements

On May 11, 2023, we closed on a $ 75,000 senior credit facility (the "Credit Facility").

The Credit Facility consists of a $ 60,000 asset-based revolving credit facility (the "ABL") maturing on May 11.

2026, which is secured by first priority lien on the Company's assets and is subject to certain factors that can impact our borrowing capacity, and a $ 15,000 delayed draw loan (the "Delayed Draw Loan") secured by a first priority mortgage on our Brookings, South Dakota real estate (the "Mortgage").

The ABL and Delayed Draw Loan are evidenced by a Credit Agreement dated as of May 11, 2023 (the "Credit Agreement") between the Company and JPMorgan Chase Bank, N.A., as the lender.

On May 11, 2023, the Company paid all amounts outstanding on the prior credit agreement, and this prior credit agreement was terminated as of that date.

No gain or loss was recognized upon termination, and the Company incurred no early termination penalties in connection with such termination.

On May 11, 2023, we closed on a $ 75,000 senior credit facility (the “Credit Facility”) pursuant to a Credit Agreement dated as of May 11, 2023 (as amended, restated, modified, or supplemented from time to time, the “Credit Agreement”), between and among the Company, JPMorgan Chase Bank, N.A.

(the “Administrative Agent”), the Lenders (as defined in the Credit Agreement), and the other Loan Parties (as defined in the Credit Agreement).

The Credit Facility consists of a $ 60,000 asset-based revolving credit facility maturing on May 11, 2026 (the “ABL”), which is secured by first priority lien on the Company’s assets pursuant to a Pledge and Security Agreement, dated as of May 11, 2023, by and among the Company, Daktronics Installation, Inc., and the Administrative Agent (the “Pledge and Security Agreement”), and a $ 15,000 delayed draw term loan (the “Delayed Draw Loan”) secured by a first priority mortgage on our Brookings, South Dakota real estate (the “Mortgage”) pursuant to the Pledge and Security Agreement.

Under the ABL, certain factors can impact our borrowing capacity.

As of April 27, 2024, our total borrowing capacity was $ 39,507 there were no borrowings outstanding, and there was $ 5,342 used to secure letters of credit outstanding leaving $ 34,165 available to borrow.

As of April 26, 2025, our borrowing capacity was $ 36,274 , there were no borrowings outstanding, and there was $ 3,393 used to secure letters of credit outstanding.

We made no borrowings on this ABL during fiscal 2025.

The interest rate on the ABL is set on a sliding scale based on the trailing 12-month fixed charge coverage and ranges from 2.5 to 3.5 percent over the standard overnight financing rate (SOFR).

The ABL is secured by a first priority lien on the Company's assets described in the Credit Agreement and the Pledge and Security Agreement dated as of May 11, 2023 by and among the Company, Daktronics Installation, Inc.

and JPMorgan Chase Bank, N.A.

The $ 15,000 Delayed Draw Loan was funded on July 7, 2023 and is secured by the Mortgage on the Company's Brookings, South Dakota real estate.

The interest rate on the ABL is set on a sliding scale based on the trailing 12-month fixed charge coverage and ranges from 2.5 to 3.5 percent over the secured overnight financing rate (SOFR).

The $ 15,000 Delayed Draw Loan was funded on July 7, 2023.

It amortizes over 10 years and has monthly payments of $ 125 .

1 unchanged sentence

The interest rate on the Delayed Draw Loan is set on a sliding scale based on the trailing 12-month fixed charge coverage ratio and ranges between 1.0 and 2.0 percent over the Commercial Bank Floating Rate (CBFR).

The interest rate as of April 27, 2024 for Delayed Draw Loan was 9.5 percent.

The interest rate as of April 26, 2025 for the Delayed Draw Loan was 8.5 percent.

On June 10, 2025, we entered into a Consent and Amendment No.

4 to Credit Agreement, effective as of June 6, 2025 (the “Fourth Amendment”), which, among other changes to the Credit Agreement, permits the Company to secure Letters of Credit (as defined in the Credit Agreement) with terms that expire after the Credit Agreement’s scheduled maturity date of May 11, 2026 under certain conditions (the “Specified Letters of Credit”).

For more information about the Fourth Amendment and the Specified Letters of Credit, see “Note 18.

Subsequent Events” of the Notes to our Consolidated Financial Statements included in this Form 10-K.

Convertible Note

On May 11, 2023, we borrowed $ 25,000 in aggregate principal amount evidenced by the secured Convertible Note due May 11, 2027.

The Convertible Note holder (the "Holder") has a second priority lien on assets securing the ABL facility and a first priority lien on substantially all of the other assets of the Company, excluding all real property, subject to the Intercreditor Agreement dated as of May 11, 2023 by and among the Company, JPMorgan Chase Bank N.A., and the Holder of the Convertible Note.

Conversion Features

• The Convertible Note allows the Holder and any of the Holder’s permitted transferees, donees, pledgees, assignees or successors-in-interest (collectively, the “Selling Shareholders”) to convert all or any portion of the principal amount of the Convertible Note, together with any accrued and unpaid interest and any other unpaid amounts, including late charges, if any (together, the “Conversion Amount”), into shares of the Company’s common stock at an initial conversion price of $ 6.31 per share, subject to adjustment in accordance with the terms of the Convertible Note (the “Conversion Price”).

• The Company also has a forced conversion right, which is exercisable on the occurrence of certain conditions set forth in the Convertible Note, pursuant to which it can cause all or any portion of the outstanding and unpaid Conversion Amount to be converted into shares of common stock at the Conversion Price.

Additionally, if the Company fails other than by reason of a failure by the Holder to comply with its obligations, the Holder is permitted to cash payments from the Company until such conversion failure is cured.

Redemption Features

• If the Company were to have an "Event of Default", as defined by the Convertible Note, then the Holder may require the Company to redeem all or any portion of the Convertible Note.

• If the Company has a "Change of Control", as defined by the Convertible Note, then the Holder is entitled to payment of the outstanding amount of the Convertible Note at the "Change in Control Redemption Price," as defined in the Convertible Note.

Interest accruing under the Convertible Note is payable, at the option of the Company, in either (i) cash or (ii) a combination of cash interest and capitalized interest;

provided, however, that at least fifty percent (50%) of the interest paid on each interest date must be paid as cash interest.

The Convertible Note accrues interest (or is payable) quarterly at an annual rate of 9.0 percent when interest is paid in cash or an annual rate of 10.0 percent if interest is paid in kind.

Upon an event of default under the Convertible Note, the annual interest rate will increase to 12.0 percent.

The annual rate of 9.0 percent was used to calculate the interest accrued as of April 27, 2024, as interest will be paid in cash.

We elected the fair value option to account for the Convertible Note as described in "Note 14.

Fair Value Measurement".

The financial liability was initially measured at its issue-date fair value and is subsequently remeasured at fair value on a recurring basis at each reporting period date.

We have elected to present the fair value and the accrued interest component separately in the consolidated statements of operations.

Therefore, interest will be recognized and accrued separately in interest expense, with changes in fair value of the Convertible Note presented in the "Change in fair value of convertible note" line item in our consolidated statements of operations.

On May 11, 2023, we borrowed $ 25,000 in aggregate principal amount under the secured Convertible Note issued to Alta Fox Opportunities Fund, LP (the “Holder”).

The Convertible Note provided for the following conversion features:

• The Convertible Note allowed the Holder and any of the Holder’s permitted transferees, donees, pledgees, assignees or successors-in-interest to convert all or any portion of the principal amount of the Convertible Note, together with any accrued and unpaid interest and any other unpaid amounts, including late charges, if any (together, the “Conversion Amount”), into shares of the Company’s common stock at an initial conversion price of $ 6.31 per share, subject to adjustment in accordance with the terms of the Convertible Note (the “Conversion Price”).

• The Company also had a forced conversion right, exercisable on the occurrence of certain conditions set forth in the Convertible Note, pursuant to which it could cause all or any portion of the outstanding and unpaid Conversion Amount to be converted into shares of common stock at the Conversion Price.

On November 11, 2024, the Company issued notice to the Holder that the Company would force the conversion of $ 7,000 of the principal balance and accrued interest of the Convertible Note on December 3, 2024 at the conversion price of $ 6.31 per share into 1,109 shares of the Company’s common stock (the “December Conversion”).

On December 11, 2024, the Company issued notice to the Holder that the Company would force the conversion of an additional $ 7,000 of the principal balance and accrued interest of the Convertible Note on January 3, 2025 at the conversion price of $ 6.31 per share into 1,109 shares of the Company’s common stock (the “January Conversion”).

On January 27, 2025, in accordance with the terms of the Convertible Note, the Company settled the December Conversion and the January Conversion through the issuance of 2,218 shares of the Company’s common stock (based on the Conversion Price).

On January 10, 2025, the Company issued notice to the Holder that the Company would force the conversion of $ 7,000 of the principal balance and accrued interest of the Convertible Note on February 3, 2025 at the Conversion Price into 1,109 shares of the Company’s common stock (the “February Conversion”).

On February 3, 2025, in accordance with the terms of the Convertible Note, the Company settled the February Conversion.

On February 10, 2025, the Company issued notice to the Holder that the Company would force the conversion of the fourth and final tranche of 681 shares or $ 4,294 on March 4, 2025, representing the remaining principal and interest balance of the Convertible Note (the “March Conversion”).

On March 4, 2025, in accordance with the terms of the Convertible Note, the Company settled the March Conversion, resulting in full settlement of the Convertible Note.

The estimated fair value of the Convertible Note upon its issuance date of May 11, 2023 was computed using the binomial lattice model.

Given the appreciation of the Company’s stock price from the issuance of the Convertible Note combined with our then intent and expectation of settlement as soon as is feasible through exercise of its forced conversion right, we determined that the Monte Carlo simulation (“MCS”) model was appropriately suited to determine the fair value of the Convertible Note during the second and third quarter of fiscal 2025.

The valuation models incorporate significant inputs that are not observable in the market and thus represent a Level 3 measurement.

The changes in fair value of the Convertible Note during fiscal 2025 was as follows:

1 unchanged sentence

(in thousands)

Balance as of May 11, 2023 $ 25,000

Redemption of convertible promissory note —

Balance as of April 27, 2024 $ 41,550

Carrying value of note settled through conversion ( 64,366 )

Fair value change recognized 22,521

Interest on convertible note $ 295

Balance as of April 26, 2025 $ —

The estimated fair value of the Convertible Note upon its issuance date of May 11, 2023 was its face value because it was negotiated at arms length and as of April 27, 2024 was computed using a binomial lattice model which incorporates significant inputs that are not observable in the market and thus represents a Level 3 measurement.

We determined the fair value by using the following key assumptions in the binomial lattice model:

During the interim periods for the year ended April 26, 2025, prior to conversion of the Convertible Note, we determined the fair value using the following range of key assumptions:

Risk-Free Rate (Annual) of 4.04 %- 4.24 %, Implied Yield of 15.79 %- 15.98 % and Volatility (Annual) of 40 %- 55 %.

For the year ended April 27, 2024, we determined the fair value by using the following key assumptions in the binomial lattice model:

April 27, 2024

Risk-Free Rate (Annual) 4.78 %

2 unchanged sentences

Dividend Yield (Annual) — %

The Credit Agreement and the Convertible Note require a fixed charge coverage ratio of greater than 1.1 and include other customary non-financial covenants.

As of April 27, 2024, we were in compliance with our financial covenants under the Credit Agreement and the Convertible Note.

The Credit Agreement requires a fixed charge coverage ratio of greater than 1.1 and include other customary non-financial covenants.

As of April 26, 2025, we were in compliance with our financial covenants under the Credit Agreement.

Debt Issuance Costs

Debt issuance costs incurred and capitalized are amortized on a straight-line basis over the term of the associated debt agreement.

If early principal payments or conversions occur, a proportional amount of unamortized debt issuance costs is expensed.

If early principal payments occur, a proportional amount of unamortized debt issuance costs is expensed.

As part of these financings, we capitalized $ 8,195 in debt issuance costs.

During the fiscal year ended April 27, 2024, due to the Convertible Note being accounted for at fair value, we expensed $ 3,353 of the related debt issuance costs which is included in the "Other expense and debt issuance costs write-off, net" line item in our consolidated statements of operations.

During the fiscal year ended April 27, 2024, we amortized $ 1,551 of debt issuance costs.

The remaining debt issuance costs of $ 3,291 are being amortized over the three-year term of the Credit Facility.

During the fiscal year ended April 27, 2024, due to the Convertible Note being accounted for at fair value, we expensed $ 3,353 of the related debt issuance costs, which are included in the “Other expense and debt issuance costs write-off, net” line item in our Consolidated Statements of Operations.

During the fiscal years ended April 26, 2025 and April 27, 2024, we amortized $ 1,614 and $ 1,551 , respectively, of debt issuance costs.

The remaining debt issuance costs of $ 1,677 are being amortized over the remaining term of the Credit Facility.

Future Maturities

5 unchanged sentences

On June 16, 2016, our Board of Directors approved a stock repurchase program under which we may purchase up to $ 40,000 of the Company’s outstanding shares of common stock.

On March 4, 2025, our Board of Directors approved the repurchase of an additional $ 10,000 of the Company’s outstanding shares of common stock under the stock repurchase program for a maximum authorized value of $ 50,000 .

Under this program, we may repurchase shares from time to time in open market transactions and in privately negotiated transactions based on business, market, applicable legal requirements, and other considerations.

The repurchase program does not require the repurchase of a specific number of shares and may be terminated at any time.

In April 2020, the Board had suspended the program.

On December 2, 2021, the Board of Directors of Daktronics voted to reauthorize the stock repurchase program.

During fiscal 2024 and 2023, we had no repurchases of shares of our outstanding common stock.

For additional information, see “Note 18.

Subsequent Events” of the Notes to our Consolidated Financial Statements included in this Form 10-K.

During fiscal 2025, we repurchased 2,071 shares of common stock at a total cost of $ 29,474 .

As of April 27, 2024, we had $ 29,355 of remaining capacity under our current share repurchase program.

During fiscal 2024 and 2023, we had no repurchases of shares of our outstanding shares of common stock.

As of April 26, 2025, we had $ 9,880 of remaining capacity under our share repurchase program.

We lease facilities and various equipment to manufacture products and provide employee collaboration space and tools.

16 unchanged sentences

Operating lease cost is recognized on a straight-line basis over the lease term, and short-term lease cost is recognized when paid.

During fiscal 2024, the amount of the operating lease cost included in cost of sales and operating expenses in the consolidated statements of operations was $ 2,344 and $ 980 , respectively;

as compared to $ 2,560 and $ 906 , respectively, in fiscal year 2023;

and $ 2,425 and $ 870 , respectively, in fiscal year 2022.

During fiscal 2025, the amount of the operating lease cost included in cost of sales and operating expenses in the Consolidated Statements of Operations was $ 2,530 and $ 674 , respectively, as compared to $ 2,344 and $ 980 , respectively, in fiscal year 2024, and $ 2,560 and $ 906 , respectively, in fiscal year 2023.

Operating lease cost includes short-term leases, which are immaterial.

11 unchanged sentences

The current and long-term portions of the lease liabilities are included in the “Accrued expenses” and “Other long-term obligations” line items in our Consolidated Balance Sheets, respectively.

Shareholders' Equity and Share-Based Compensation

Authorized share types and shareholder rights plan :

Our 120,000 authorized shares consist of 115,000 shares of common stock, 50 shares of Series A Junior Participating Preferred Stock, and 4,950 shares of “undesignated stock.” Our Board of Directors has the power to authorize and issue any or all of the shares of undesignated stock without shareholder approval, including the authority to establish the rights and preferences of the undesignated stock.

Each outstanding share of our common stock includes one preferred share purchase right.

Each right entitles the registered holder of our common stock to purchase from us one one-thousandth of one share of our Series A Junior Participating Preferred Stock at an initial exercise price of $ 20 per right, subject to adjustment under the terms of the shareholder rights agreement under which the dividend was declared and paid.

The rights become exercisable immediately after the earlier of (i) 10 business days following a public announcement that a person or group has acquired beneficial ownership of 20 percent or more of our outstanding common shares (subject to certain exceptions) or (ii) 10 business days following the commencement or announcement of an intention to make a tender offer or exchange offer for our common shares, the

consummation of which would result in the beneficial ownership by a person or group of 20 percent or more of our outstanding common shares.

The rights expire on November 19, 2024 , which date may be extended by our Board of Directors subject to certain additional conditions.

Stockholders’ Equity and Share-Based Compensation

Authorized share types :

Our 120,000 authorized shares of stock consist of 115,000 shares of common stock and 5,000 shares of preferred stock.

Stock incentive plans :

3 unchanged sentences

Stock options issued to employees under the 2015 Plan and 2020 Plan generally have a 10-year life, an exercise price equal to the closing market value on the grant date, and a five-year annual vesting period.

The restricted stock granted to independent directors vests in one year , provided that the directors remain on the Board.

The restricted stock granted to independent directors vests in one year , provided that the directors remain on the Company’s Board of Directors (the “Board” or “Board of Directors”).

Restricted stock units are granted to employees and have a five-year annual vesting period.

4 unchanged sentences

Restricted stock and restricted stock units :

We issue restricted stock to our non-employee directors and restricted stock units to employees.

We issue restricted stock to our non-employee directors and restricted stock units (“RSU”) to employees.

Restricted stock issued to non-employee directors are participating securities and receive dividends prior to vesting.

4 unchanged sentences

The total fair value of restricted stock vested was $ 1,209 , $ 1,536 , and $ 1,160 in fiscal years 2025, 2024, and 2023, respectively.

In March 2025, Reece A.

Kurtenbach resigned from his position as President and Chief Executive Officer (“CEO”) of the Company and, as a result, a portion of his unvested RSUs was accelerated and vested, which resulted in additional compensation expense relating to the modified awards for the year ended April 26, 2025.

Any remaining unvested RSUs were forfeited.

As of April 26, 2025, no unrecognized stock-based compensation expense remained on these RSUs.

In addition, a portion of unvested options held by Mr.

Kurtenbach was accelerated and vested, which resulted in additional compensation expense relating to the modified awards for the year ended April 26, 2025.

Any remaining unvested options were forfeited.

The Company offered Mr.

Kurtenbach an option to settle his outstanding stock options in cash rather than exercising them.

The Company modified these awards and changed the classification of the grant from equity to a liability.

Kurtenbach elected to cash settle his options, and as a result, the Company realized $ 680 as a liability.

As a result, the options were cancelled, and Mr.

Kurtenbach received a cash payment and the share based liability was resolved as of April 26, 2025.

In March 2025, the Company recorded a one-time equity award to each of its interim CEO and acting Chief Financial Officer (“CFO”).

Pursuant to the terms of the applicable award agreements for the Interim CEO and Acting CFO, 100 percent of the awarded RSUs will become fully vested on the date that the Board appoints a permanent CEO or CFO, as applicable, so long as the applicable executive remains continuously employed by the Company or a subsidiary of the Company until immediately prior to such appointment.

The Company recorded stock-based compensation expense for these performance stock units (“PSU”) with an estimated service period of one year related to these awards during the year ended April 26, 2025.

A summary of non-vested restricted stock and restricted stock units for fiscal years 2025, 2024, and 2023 is as follows:

10 unchanged sentences

Stock Options :

We issue incentive stock options to our employees and non-qualified stock options to our independent directors.

We issue incentive stock options to our employees.

A summary of stock option activity under our 2015 Plan and 2020 Plan during the fiscal year ended April 26, 2025 is as follows:

22 unchanged sentences

In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility.

ASC 718 requires us to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates.

ASC 718 requires us to estimate forfeitures at the time of grant and to revise those estimates in subsequent periods if actual forfeitures differ from those estimates.

We use historical data to estimate pre-vesting option forfeitures and record share-based compensation expense only for those awards expected to vest.

26 unchanged sentences

The number of shares of common stock reserved for future employee purchases under the ESPP totaled 1,071 shares as of April 26, 2025.

The ESPP is intended to qualify under Section 423 of the Internal Revenue Code of 1986 (the "Code").

The ESPP is intended to qualify under Section 423 of the Internal Revenue Code of 1986.

Total share-based compensation expense :

8 unchanged sentences

$ 2,944 $ 2,090 $ 2,027

A summary of the share-based compensation expense for stock options, restricted stock, restricted stock units and shares issued under the ESPP for fiscal years 2024, 2023, and 2022 is as follows:

A summary of the share-based compensation expense by classification in the Consolidated Statements of Operations for stock options, restricted stock, restricted stock units, and shares issued under the ESPP for fiscal years 2025, 2024, and 2023 is as follows:

April 26, 2025 April 27, 2024 April 29, 2023

7 unchanged sentences

Retirement Benefits

We sponsor a 401(k) savings plan providing benefits for substantially all United States-based employees of Daktronics, Inc.

and its subsidiaries, subject to certain Internal Revenue Service ("IRS") limits.

We sponsor a 401(k) savings plan providing benefits for substantially all United States-based employees of Daktronics and its subsidiaries, subject to certain Internal Revenue Service (“IRS”) limits.

We made matching cash contributions equal to 50 percent of the employee’s qualifying contribution up to six percent of such employee’s compensation.

6 unchanged sentences

Foreign 7,556 7,288 3,132

Income before income taxes $ 54,051 $ 13,257 $ 1,108

(Loss) Income before income taxes $ ( 5,851 ) $ 54,051 $ 13,257

Income tax expense (benefit) consisted of the following:

18 unchanged sentences

Other, net 288 114 288

Write-down of Deferred Taxes 499 — —

Section 162(m) 142 — —

Effect of foreign tax rates different than statutory ( 81 ) 79 417

6 unchanged sentences

The effective income tax rate for fiscal 2025 was primarily impacted due to the fair value adjustment to the Convertible Note that is not deductible for tax purposes.

Additional other items impacting the rate were valuation allowances on equity investments, state taxes, and a write down of deferred taxes related to debt issuance costs on the conversion of the Convertible Note.

Our effective tax rate for fiscal 2024 was 35.9 percent.

During fiscal 2024, our effective income tax rate was primarily impacted due to the fair value adjustment to the Convertible Note that is not deductible for tax purposes.

Additional other items impacting the rate were valuation allowances on equity investments, state taxes, as well as prior year provision to return adjustments reduced in part by tax benefits from permanent tax credits.

Our effective tax for fiscal 2023 was 48.7 percent.

During fiscal 2023, our effective income tax rate was impacted due to valuation allowances on equity investments and on foreign net operating losses in Ireland, goodwill impairment, state taxes, a mix of taxes in foreign countries where the tax rate is higher than the United States, as well as prior year provision to return adjustments reduced in part by tax benefits from permanent tax credits.

Our effective tax for fiscal 2022 was 46.6 percent.

During fiscal 2022, our effective income tax rate was impacted by tax benefits from permanent tax credits offset by valuation allowances as well as other various permanent tax adjustments and state taxes with additional expense for prior year provision to return adjustments.

Our effective tax rate for fiscal 2023 was 48.7 percent.

During fiscal 2023, our effective income tax rate was impacted due to valuation allowances on equity investments and on foreign net operating losses in Ireland, goodwill impairments, state taxes, a mix of taxes in foreign countries where the tax rate is higher than the United States, and prior year provision to return adjustments reduced in part by tax benefits from permanent tax credits.

The components of the net deferred tax assets were as follows:

5 unchanged sentences

Allowance for excess and obsolete inventory 3,590 3,362

General reserve 628 —

Equity compensation 282 234

2 unchanged sentences

Accrued compensation and benefits 942 424

Unrealized loss on foreign currency exchange — 206

Net operating loss carry forwards 862 885

38 unchanged sentences

The increase in valuation allowance as well as the majority of the total balance is related to the outside basis difference and impairments in equity method investments.

A small portion of the total valuation allowances are related to foreign net operating loss carryfowards as detailed below.

We consider all positive and negative evidence available in determining the potential of realizing deferred tax assets including its past operating results and the forecast of future earnings, category of income, future taxable income, and prudent and feasible tax planning strategies.

A small portion of the total valuation allowances are related to foreign net operating loss carryfowards as described below.

We consider all positive and negative evidence available in determining the potential of realizing deferred tax assets, including their past operating results and the forecast of future earnings, category of income, future taxable income, and prudent and feasible tax planning strategies.

If sufficient evidence of our ability to generate applicable taxable income in the jurisdictions in which we currently maintain a valuation allowance causes us to determine that our deferred tax assets are more likely than not realizable, we would release our valuation allowance, which would result in an income tax benefit being recorded in our Consolidated Statements of Operations.

10 unchanged sentences

No additional withholding or income taxes have been provided for any remaining undistributed foreign earnings not subject to the one-time deemed repatriation tax, as it is our intention for these amounts to continue to be indefinitely reinvested in foreign operations in all of our non-United States jurisdictions.

In October 2021, the Organization for Economic Co-operation and Development (“OECD”)/G20 finalized the significant components of a two-pillar global tax reform plan, which has now been agreed to by the majority of OECD members.

Pillar Two requires multinational enterprises with annual global revenue exceeding €750 million to pay a global minimum tax of 15 percent.

We currently are under the compliance requirement thresholds as of April 26, 2025.

We will continue to evaluate the potential impact on future periods of the Pillar Two framework and the implementation of the Pillar Two rules in the jurisdictions in which we operate.

We do not anticipate that Pillar Two compliance will have a material impact on our financial statements.

Cash Flow Information

8 unchanged sentences

Income taxes receivables ( 2,761 ) ( 124 ) 268

Investment in affiliates and other assets 214 ( 261 ) ( 357 )

Right of use, investment in affiliates, and other assets ( 1,213 ) 214 ( 261 )

Increase (decrease):

5 unchanged sentences

Income taxes payable ( 4,485 ) 2,067 2,354

Long-term marketing obligations and other payables 1,678 104 ( 1,762 )

Other payables 381 1,678 104

$ 51,389 $ ( 14,135 ) $ ( 19,864 )

12 unchanged sentences

April 26, 2025 April 27, 2024 April 29, 2023

Demonstration equipment transferred to inventory $ — $ — $ 53

Purchases of property and equipment included in accounts payable $ 2,320 $ 1,628 $ 1,057

1 unchanged sentence

Debt issuance costs — — 2,875

Settlement of convertible note 64,366 — —

Fair Value Measurement

15 unchanged sentences

Cash and cash equivalents $ 127,507 $ — $ — $ 127,507

Restricted cash 379 — — 379

Convertible note — — ( 41,550 ) ( 41,550 )

$ 127,507 $ — $ — $ 127,507

2 unchanged sentences

Restricted cash 379 — — 379

Available-for-sale securities:

US Government Sponsored entities — 534 — 534

Derivatives - liability position — ( 579 ) — ( 579 )

Convertible note — — ( 41,550 ) ( 41,550 )

$ 81,678 $ — $ ( 41,550 ) $ 40,128

The following methods and assumptions were used to estimate the fair value of each class of financial instrument.

During fiscal 2024, we added the fair value of the Convertible Note.

There have been no other changes in the valuation techniques used by us to value our financial instruments since the end of fiscal 2023.

Cash and cash equivalents :

11 unchanged sentences

The fair value of the Convertible Note entered into during the first quarter of fiscal 2024 was classified as Level 3 because certain inputs for the valuation were not readily determinable or observable.

Derivatives – currency forward contracts :

Consists of currency forward contracts trading with sufficient frequency and volume to enable us to obtain pricing information on an ongoing basis.

The fair value of these securities was measured based on a valuation from a third-party bank.

See "Note 15.

Derivative Financial Instruments" for more information regarding our derivatives.

As of April 26, 2025, the Convertible Note had been fully converted and paid.

Non-recurring measurements:

The fair value measurement standard also applies to certain non-financial assets and liabilities measured at fair value on a nonrecurring basis.

Certain long-lived assets such as goodwill, intangible assets and property and equipment are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment.

Nature of Business and Summary of Significant Accounting Policies" for further details of impairment loss of $ 6,359 for our investments in Miortech and XDC.

Certain long-lived assets such as goodwill, intangible assets, the Affiliate Notes, and property and equipment are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment.

Nature of Business and Summary of Significant Accounting Policies” for further details regarding our investment in affiliates.

Other measurements using fair value :

5 unchanged sentences

As of April 26, 2025 and April 27, 2024, we had not designated any of our derivative instruments as accounting hedges, and thus we recorded the changes in fair value in the “Other expense and debt issuance costs write-off, net” line item in the Consolidated Statements of Operations.

There were no foreign currency agreements outstanding as of April 27, 2024.

The foreign currency exchange contracts in aggregated notional amounts in place to exchange United States dollars as of April 29, 2023 were as follows:

April 27, 2024 April 29, 2023

United States Dollars Foreign Currency United States Dollars Foreign Currency

Foreign Currency Exchange Forward Contracts:

United States Dollars/Euros — — 7,758 7,513

As of April 27, 2024, there was an no asset or liability, and, as of April 29, 2023, there was an asset and liability of $ 0 and $ 579 , respectively, representing the fair value of foreign currency exchange forward contracts, which were determined using level 2 inputs from a third-party bank.

There were no foreign currency agreements outstanding as of April 26, 2025 and April 27, 2024.

Commitments and Contingencies

17 unchanged sentences

We have entered into standby letters of credit, bank guarantees, and surety bonds with financial institutions relating to the guarantee of our future performance on contracts, primarily construction-type contracts.

As of April 27, 2024, we had outstanding letters of credit, bank guarantees and surety bonds in the amount of $ 5,342 , $ 163 and $ 44,478 , respectively.

As of April 26, 2025, we had $ 57,792 of bonded work outstanding and $ 3,393 in letters of credit outstanding.

Performance guarantees are issued to certain customers to guarantee the operation and installation of the equipment and our ability to complete a contract.

7 unchanged sentences

Fiscal years ending Amount

2026 $ 11,413

Thereafter 50

Related Party

The Company's Board of Directors has adopted a written policy and procedures with respect to related party transactions, which the Audit Committee oversees.

Related Party Transactions

The Board of Directors has adopted a written policy and procedures with respect to related party transactions, which the Audit Committee oversees.

Under the policy, a “related party transaction” is generally defined as a transaction, arrangement, or relationship in which the Company was, is or will be a participant;

4 unchanged sentences

On an annual basis, the Audit Committee reviews any previously approved related party transaction that is ongoing.

As reported in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the section entitled “Liquidity and Capital Resources” of our Annual Report on Form 10-K for the fiscal year ended April 29, 2023, effective on May 11, 2023, the Company entered into the Securities Purchase Agreement with Alta Fox Opportunities Fund, LP, as the holder (the "Holder") of the Convertible Note.

As reported in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the section entitled “Liquidity and Capital Resources” of our Annual Report on Form 10-K for the fiscal year ended April 27, 2024, effective on May 11, 2023, the Company entered into the Securities Purchase Agreement, dated as of May 11, 2023, with the Holder of the Convertible Note.

Under the Securities Purchase Agreement, the Company sold and issued to the Holder the Convertible Note in exchange for the payment by the Holder to the Company of $ 25,000 .

As of May 11, 2023, and based on Amendment No.

2 to the Schedule 13D filed by the Holder and its affiliates named therein on May 15, 2023 with the SEC, the Holder and its affiliates beneficially owned 4,768 shares of common stock of the Company, representing 9.99 percent of the Company’s common stock, causing the Holder to be a “related party” of the Company under the Company’s written policy and procedures and the applicable definitions under the Securities Act of 1933.

The Securities Purchase Agreement, the Convertible Note, the Pledge and Security Agreement dated as of May 11, 2023 by and between the Holder and the Company, and the Registration Rights Agreement were approved in advance of their execution by the Company’s Strategy and Financing Review Committee, the members of which include all members of the Company’s Audit Committee.

Since May 11, 2023, the largest aggregate amount outstanding under the Convertible Note was $ 25,563 , consisting of $ 25,000 of principal and $ 563 of interest.

During fiscal 2024, we have made interest payments of $ 1,688 under the Convertible Note.

During fiscal 2025, due to the conversion of the amounts due under the Convertible Note into shares of our common stock

and the payment of interest, all amounts due and payable under the Convertible Note were paid and satisfied, and, as of April 26, 2025, there were no amounts outstanding under the Convertible Note.

The description of the Securities Purchase Agreement, the Convertible Note, the Pledge and Security Agreement, and the Registration Rights Agreement dated as of May 11, 2023 by and between the Holder and the Company and their respective terms set forth in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the section entitled “Liquidity and Capital Resources” of the Company’s Annual Report on Form 10-K for the fiscal year ended April 27, 2024 is hereby incorporated by reference into this Report.

In addition, the Company is a party to the Standstill and Voting Agreement dated as of March 19, 2023 with Alta Fox Management, LLC and Connor Haley (the “Standstill Agreement”), who are affiliates of the Holder.

The Standstill Agreement is filed as Exhibit 10.13 to this Form 10-K.

The Standstill Agreement is filed as an Exhibit to this Form 10-K.

As described in Amendment No.

2 (“Amendment No.

3”) to the Schedule 13D filed with the SEC by the Holder and its affiliates named therein on June 9, 2023, and based on other information provided by the Holder, the following persons may be deemed to be beneficial owners of the shares of the Company’s common stock beneficially owned by the Holder:

2”) to the Schedule 13D filed with the SEC by the Holder and its affiliates named therein March 5, 2025, the following persons may be deemed to be beneficial owners of the shares of the Company’s common stock beneficially owned by the Holder:

Alta Fox GenPar, LP, as the general partner of Alta Fox Opportunities Fund, LP;

1 unchanged sentence

Alta Fox Capital Management, LLC, as the investment manager of Alta Fox Opportunities Fund, LP;

Alta Fox Opportunities Fund, LP;

Connor Haley, as the sole owner, member and manager of each of Alta Fox Capital Management, LLC and Alta Fox Equity LLC.

On June 7, 2023, the Company received from the Holder a written notice of a decrease in the “Percentage Cap” (as such term is defined in the Convertible Note) from 9.99 percent to 4.99 percent, which decrease became effective immediately upon the Company’s receipt of such written notice.

The Percentage Cap generally represents the maximum percentage of shares of the Company’s common stock the Holder may own.

In Amendment No.

3, the Holder and its affiliates identified in Amendment No.

3 owned 2,293 shares of common stock on June 9, 2023, representing 4.99 percent of the common stock of the Company, meaning the Holder and its affiliates are no longer “related parties” of the Company under the Company’s written policy and procedures and the applicable definitions under the Securities Act of 1933.

According to Amendment No.

2, the Holder owns 5,974 shares of our common stock, representing 11.79

percent of our outstanding shares of common stock.

Thus, Alta Fox is subject to the Policy and the applicable provisions of the Securities Act and the rules promulgated thereunder.

Effective April 10, 2025, our former President and CEO and current Board member, Reece A.

Kurtenbach, was appointed as Interim Chief Executive Officer of XDC, an entity in which the Company holds a 16.4 percent ownership interest and accounts for under the equity method of accounting.

As a result of this appointment, Mr.

Kurtenbach is considered a related party under ASC 850 - Related Party Disclosures .

The Company continues to monitor this relationship to ensure appropriate governance and disclosure in accordance with applicable accounting standards.

In April 2025, the Company entered into a change order to an existing agreement with Milwaukee Bucks Inc.

The total value of the change order was $ 214 .

A member of the Board of Directors is the President of Milwaukee Bucks Inc.

During fiscal 2024, the Company and the South Dakota Board of Regents entered into contracts for video display systems for Dakota State University.

The amount of the contracts was $ 1,178 A member of the Company's Board of Directors is the President of Dakota State University.

The amount of the contracts was $ 1,178 .

A member of the Board of Directors is the President of Dakota State University.

Nature of Business and Summary of Significant Accounting Policies” of the Notes to our Consolidated Financial Statements included in this Form 10-K for further details of related party transactions with our investments in the Affiliate Notes issued by our affiliates.

Subsequent Events

Related Party.

As described in Amendment No.

3 (“Amendment No.

3”) to the Schedule 13D filed with the SEC by the Holder and its affiliates named therein May 29, 2025, the following persons may be deemed to be beneficial owners of the shares of the Company’s common stock beneficially owned by the Holder:

Alta Fox GenPar, LP, as the general partner of Alta Fox Opportunities Fund, LP;

Alta Fox Equity, LLC, as the general partner of Alta Fox GenPar, LP;

Alta Fox Capital Management, LLC, as the investment manager of Alta Fox Opportunities Fund, LP;

Alta Fox Opportunities Fund, LP;

Connor Haley, as the sole owner, member and manager of each of Alta Fox Capital Management, LLC and Alta Fox Equity LLC.

According to Amendment No.

3, the Holder owns 4,974 shares of our common stock, representing 9.9 percent of our outstanding shares of common stock.

Thus, transactions with Alta Fox remain subject to our related party policy and the applicable provisions of the Securities Act and the rules promulgated thereunder.

On April 29, 2025, the Company entered into a contract with Milwaukee Bucks Inc.

The total value of the contract was $ 683 .

A member of the Board of Directors is the President of Milwaukee Bucks Inc.

Subsequent to fiscal year-end, the United States government announced a significant reduction in tariffs on imports from the People’s Republic of China.

On May 12, 2025, the United States and China reached an agreement to reduce reciprocal tariffs, with the United States lowering its tariff rate on certain Chinese imports from 145 percent to 30 percent.

As of April 26, 2025, the Company had incorporated the previously announced 170 percent tariff rate that existed at that time into its financial estimates and operational planning.

These estimates were based on the best information available at the time and reflected management’s judgment regarding the potential impact of the elevated tariff environment.

The tariff assumptions were particularly relevant to the Company’s evaluation of estimated contract costs and estimated contract margins related to when revenue is recognized over time, because projected costs and pricing strategies are sensitive to changes in input costs, including tariffs.

Although the subsequent reduction in tariffs represents a temporary favorable development, the Company has not made any adjustments to its financial statements for the year ended April 26, 2025.

The Company will continue to monitor the evolving trade environment and assess its implications for future periods.

For additional information about tariffs and management’s assessment of their potential impact on the Company, please refer to “Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operation” in this Form 10-K.

Financing Agreements.

On June 10, 2025, we entered into the Fourth Amendment, which, among other changes, amends the Credit Agreement to permit the Company to secure the Specified Letters of Credit.

Pursuant to the Fourth Amendment, no later than 91 days before the Maturity Date (as defined below), the Company must deposit an amount of cash equal to 105% of the LC Exposure (as defined in the Credit Agreement) into one or more accounts (collectively, the “Specified LC Collateral Account”) controlled exclusively by the Administrative Agent.

The Company will grant a security interest in the Specified LC Collateral Account to the Administrative Agent.

The funds in the Specified LC Collateral Account will be used to cover any unreimbursed amounts owed to the issuing Lender, subject to certain exceptions.

The funds in the

Specified LC Collateral Account will be returned to the Company and the other Borrowers (as defined in the Credit Agreement) if the scheduled Maturity Date is further extended.

The Fourth Amendment also requires the Borrowers to fully pay any and all outstanding amounts owed under the Delayed Draw Loan on or before the earlier of:

(i) May 11, 2026;

and (ii) any earlier date on which the Commitments (as defined in the Credit Agreement) are reduced to zero or otherwise terminated pursuant to the terms of the Credit Agreement (the “Termination Date”).

The Fourth Amendment also provides that the Borrowers’ repayment obligations under the Credit Agreement will mature on the earliest of:

(A) November 30, 2026;

(B) unless otherwise agreed in writing by the Administrative Agent (with the consent of all Lenders), the date that is six (6) months prior to the scheduled maturity date of the Term Loan Debt;

and (C) the Termination Date (such earliest date, the “Maturity Date”).

As of April 26, 2025, there were no Borrowings (as defined in the Credit Agreement) outstanding under the Credit Agreement, and the aggregate balance under all Letters of Credit outstanding was approximately $ 3,393 , none of which was attributable to the Specified Letters of Credit.

Share Repurchases.

On June 23, 2025, our Board of Directors approved the repurchase of an additional $ 10,000 of the Company’s outstanding shares of common stock under the stock repurchase program for a maximum authorized value of $ 60,000 .

For additional information, see see “Note 8.

Share Repurchase Program” of the Notes to our Consolidated Financial Statements included in this Form 10-K.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data