DAKTRONICS INC /SD/ 10-K

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 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 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. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of April 26, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated June 25, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue Recognition – Uniquely Configured Contracts — Refer to Notes 1 and 2 to the financial statements Critical Audit Matter Description The Company recognizes revenue as its contractual performance obligations are satisfied, which may be at a point in time or over time. Certain of the Company’s contracts are for the delivery, installation, and integration of uniquely configured audio-visual communication systems. Revenue for these uniquely configured systems is recognized over time using the cost-to-cost input method. This input method requires management to make estimates of the costs that will ultimately be incurred at the completion of each contract. Revenue is recognized based on the transaction price and the percentage of cost incurred as of the balance sheet date in relation to the total estimated inputs at completion. We identified revenue associated with uniquely configured contracts as a critical audit matter because of the significant judgments necessary for management to estimate total costs to be incurred to recognize revenue under these contracts. Changes in estimated costs could have a significant impact on the timing and amount of revenue recognized. This required an increased level of auditor judgment due to the complexity of uniquely configured contracts and extent of effort when performing audit procedures to audit management’s estimate of total costs and evaluating the reasonableness of the underlying estimates. How the Critical Audit Matter Was Addressed in the Audit 38 Table of Contents Our audit procedures related to estimates of total cost used to recognize revenue for uniquely configured contracts included the following, among others: • We tested the design and operating effectiveness of controls over uniquely configured contracts, including management’s controls over the estimates of total costs. • We selected a sample of uniquely configured contracts and performed the following: ◦ Compared costs incurred to date to the costs management estimated to be incurred to date. ◦ Evaluated management’s ability to achieve the estimates of total cost by performing corroborating inquiries with the Company’s project managers and engineers, and compared the estimates to management’s work plans, engineering specifications, and supplier contracts. ◦ Confirmed contractual terms with third parties. ◦ Tested the mathematical accuracy of management’s estimate of total costs. • We evaluated management’s ability to accurately estimate total costs by comparing actual costs to management’s historical estimates for uniquely configured contracts that have been fulfilled. /s/ Deloitte & Touche LLP Minneapolis, Minnesota June 25, 2025 We have served as the Company's auditor since 2017. 39 Table of Contents DAKTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) April 26, 2025 April 27, 2024 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 127,507 $ 81,299 Restricted cash — 379 Accounts receivable, net 92,762 117,186 Inventories 105,839 138,008 Contract assets 41,169 55,800 Current maturities of long-term receivables 2,437 298 Prepaid expenses and other current assets 8,520 8,531 Income tax receivables 3,217 448 Total current assets 381,451 401,949 Property and equipment, net 73,884 71,752 Long-term receivables, less current maturities 1,030 562 Goodwill 3,188 3,226 Intangibles, net 568 840 Debt issuance costs, net 1,289 2,530 Right of use, investment in affiliates, and other assets 9,378 21,163 Deferred income taxes 32,104 25,862 TOTAL ASSETS $ 502,892 $ 527,884 40 Table of Contents DAKTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (continued) (in thousands, except per share data) April 26, 2025 April 27, 2024 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 1,500 $ 1,500 Accounts payable 46,669 60,757 Contract liabilities 69,050 65,524 Accrued expenses 41,705 43,028 Warranty obligations 12,706 16,540 Income taxes payable 375 4,947 Total current liabilities 172,005 192,296 Long-term warranty obligations 23,124 21,388 Long-term contract liabilities 18,421 16,342 Other long-term obligations 6,839 5,759 Long-term debt, net 10,487 53,164 Deferred income taxes 85 143 Total long-term liabilities 58,956 96,796 STOCKHOLDERS’ EQUITY: Preferred Shares, $ 0.00001 par value, authorized 5,000 shares; no shares issued and outstanding — — 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 — — Additional paid-in capital 189,940 117,571 Retained earnings 127,910 138,031 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 STOCKHOLDERS’ EQUITY 271,931 238,792 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 502,892 $ 527,884 See Notes to Consolidated Financial Statements. 41 Table of Contents DAKTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Net sales $ 756,477 $ 818,083 $ 754,196 Cost of sales 560,990 595,640 602,841 Gross profit 195,487 222,443 151,355 Operating expenses: Selling 60,011 56,954 56,655 General and administrative 63,498 42,632 38,747 Product design and development 38,860 35,742 29,989 Goodwill impairment — — 4,576 162,369 135,328 129,967 Operating income 33,118 87,115 21,388 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 ) (Loss) income before income taxes ( 5,851 ) 54,051 13,257 Income tax expense 4,270 19,430 6,455 Net (loss) income $ ( 10,121 ) $ 34,621 $ 6,802 Weighted average shares outstanding: Basic 47,587 45,901 45,404 Diluted 47,587 46,543 45,521 (Loss) Earnings per share: Basic $ ( 0.21 ) $ 0.75 $ 0.15 Diluted $ ( 0.21 ) $ 0.74 $ 0.15 See Notes to Consolidated Financial Statements.. 42 Table of Contents DAKTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Net (loss) income $ ( 10,121 ) $ 34,621 $ 6,802 Other comprehensive income (loss): Cumulative translation adjustments 363 ( 1,020 ) ( 616 ) 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. 43 Table of Contents DAKTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands) Common Stock Additional Paid-In Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Loss Total Number Amount Number Amount Balance as of April 30, 2022: 46,733 $ — $ 110,166 $ 96,608 ( 1,907 ) $ ( 10,285 ) $ ( 4,925 ) $ 191,564 Net income — — — 6,802 — — — 6,802 Cumulative translation adjustments — — — — — — ( 616 ) ( 616 ) Unrealized (loss) on available-for-sale securities, net of tax — — — — — — 12 12 Share-based compensation — — 2,027 — — — — 2,027 Exercise of stock options 5 — 21 — — — — 21 Shares withheld for taxes on Restricted Stock Unit issuances ( 33 ) — ( 140 ) — — — — ( 140 ) Common stock issued upon vesting of Restricted Stock Units 267 — — — — — — — Employee savings plan activity 424 — 1,208 — — — — 1,208 Balance as of April 29, 2023: 47,396 — 113,282 103,410 ( 1,907 ) ( 10,285 ) ( 5,529 ) 200,878 Net income — — — 34,621 — — — 34,621 Cumulative translation adjustments — — — — — — ( 1,020 ) ( 1,020 ) Unrealized gain on available-for-sale securities, net of tax — — — — — — 24 24 Share-based compensation — — 2,090 — — — — 2,090 Exercise of stock options 219 — 1,302 — — — — 1,302 Shares withheld for taxes on Restricted Stock Unit issuances ( 37 ) — ( 303 ) — — — — ( 303 ) Common stock issued upon vesting of Restricted Stock Units 188 — — — — — — — Employee savings plan activity 355 — 1,200 — — — — 1,200 Balance as of April 27, 2024: 48,121 — 117,571 138,031 ( 1,907 ) ( 10,285 ) ( 6,525 ) 238,792 Net loss — — — ( 10,121 ) — — — ( 10,121 ) Cumulative translation adjustments — — — — — — 363 363 Unrealized gain on available-for-sale securities, net of tax — — — — — — 2 2 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 Shares withheld for taxes on Restricted Stock Unit issuances ( 39 ) — ( 606 ) — — — — ( 606 ) Common stock issued upon vesting of Restricted Stock Units 145 — — — — — — — 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: 53,030 $ — $ 189,940 $ 127,910 ( 3,978 ) $ ( 39,759 ) $ ( 6,160 ) $ 271,931 See Notes to Consolidated Financial Statements. 44 Table of Contents DAKTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended April 26, 2025 April 27, 2024 April 29, 2023 CASH FLOWS FROM 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 (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 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 ) Non-cash impairment charges — 6,359 9,049 Change in fair value of convertible note 22,521 16,550 — Debt issuance costs write-off — 3,353 — Change in operating assets and liabilities 51,389 ( 14,135 ) ( 19,864 ) Net cash provided by operating activities 97,713 63,241 15,024 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment ( 19,494 ) ( 16,980 ) ( 25,385 ) Proceeds from sales of property, equipment and other assets 277 174 822 Proceeds from sales or maturities of marketable securities — 550 3,490 Purchases of equity and loans to equity investees ( 4,565 ) ( 5,050 ) ( 4,315 ) Net cash used in investing activities ( 23,782 ) ( 21,306 ) ( 25,388 ) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings on notes payable — 41,172 378,694 Payments on notes payable ( 2,108 ) ( 19,434 ) ( 360,944 ) Debt issuance costs — ( 7,205 ) ( 991 ) Borrowings on long-term obligations — — 1,233 Principal payments on long-term obligations ( 414 ) ( 410 ) ( 305 ) Payments for common shares repurchased ( 29,474 ) — — Proceeds from exercise of stock options 5,153 1,302 21 Tax payments related to RSU issuances ( 606 ) ( 303 ) ( 140 ) 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 IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 45,829 56,988 6,682 CASH, CASH EQUIVALENTS AND RESTRICTED CASH: Beginning of period 81,678 24,690 18,008 End of period $ 127,507 $ 81,678 $ 24,690 See Notes to Consolidated Financial Statements. 45 Table of Contents NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except per share data) Note 1. Nature of Business and Summary of Significant Accounting Policies Nature of business : 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. Fiscal year : We operate on a 52- or 53-week fiscal year, with our fiscal year ending on the Saturday closest to April 30 of each year. When April 30 falls on a Wednesday, the fiscal year ends on the preceding Saturday. Within each fiscal year, each quarter is comprised of a 13-week periods following the beginning of each fiscal year. In each 53-week year, an additional week is added to the first quarter, and each of the last three quarters is comprised of a 13-week period. The fiscal years ended April 26, 2025, April 27, 2024, and April 29, 2023 contained operating results for 52 weeks. Principles of consolidation : The Consolidated Financial Statements include Daktronics, Inc. and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. We have a variable interest in a business where we have elected to follow the proportionate consolidation method because certain criteria were met under Accounting Standards Codification (“ASC”) 810, Consolidations . We have arrangements we concluded were a variable interest entity and accounted for them under the proportionate consolidation method. 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 27, 2024, the aggregate amount of contract assets, contract liabilities, and gross profit was $ 1,955 , $ 38 , and $ 2,761 , respectively. Investments in affiliates : We consolidate entities in which we have a controlling financial interest by first considering if an entity meets the definition of a variable interest entity (“VIE”) for which we are deemed to be the primary beneficiary, or if we have the power to control an entity through a majority of voting interest or through other arrangements. Variable Interest Entities: A VIE is an entity (i) that lacks sufficient equity to finance its activities without additional subordinated financial support from other parties; (ii) whose equity holders lack the characteristics of a controlling financial interest; and/or (iii) that is established with non-substantive voting rights. A VIE is consolidated by its primary beneficiary, which is defined as the party who has a controlling financial interest in the VIE through (a) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance, and (b) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the VIE. This assessment may involve subjectivity in the determination of which activities most significantly affect the VIE’s performance and making estimates about the current and future fair value of the assets held by the VIE and the financial performance of the VIE. In assessing the Company’s interests in a VIE, we also consider interests held by its related parties, including de facto agents. Additionally, we assess whether it is a member of a related party group that collectively meets the power and benefits criteria and, if so, whether we are most closely associated with the VIE. In performing the related party analysis, we consider both qualitative and quantitative factors including, but not limited to: the characteristics and size of its investment relative to the related party; our and the related party’s ability to control or significantly influence key decisions of the VIE, including consideration of involvement by de facto agents; the obligation or likelihood for us or the related party to fund operating losses of the VIE; and the similarity and significance of the VIE’s business activities to those of us and the related party. 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 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. An entity may be consolidated as a result of this reassessment, in which case the assets, liabilities, and noncontrolling interest in the entity are recorded at fair value upon initial consolidation. Any existing equity interest held by us in the entity prior to us obtaining control will be remeasured at fair value, which may result in a gain or loss recognized upon initial consolidation. However, if the consolidation represents an asset acquisition of a voting interest entity, our existing interest in the acquired assets, if any, is not remeasured to fair value but continues to be carried at historical cost. We may also deconsolidate a subsidiary as a result of this reassessment, which may result in a gain or loss recognized upon deconsolidation depending on the carrying values of the deconsolidated assets and liabilities compared to the fair value of any interests retained. 46 Table of Contents 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 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) (“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 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. For the fiscal years 2025, 2024 and 2023, our share of the losses of our affiliates was $ 3,053 , $ 3,764 and $ 3,332 , respectively. We review our investments in affiliates for impairment indicators. 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 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: Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Balance sheet data: Current assets $ 3,883 $ 4,035 $ 5,504 Non-current assets 575 5,077 3,312 Current liabilities 44,395 33,672 25,298 Non-current liabilities 3,627 2,151 721 Income statement data: Net loss $ ( 16,437 ) $ ( 13,609 ) $ ( 16,932 ) Loans to affiliates. 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. 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. 47 Table of Contents 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 disclosure of contingent assets and liabilities at the date of the financial statements; the reported amounts of revenues and expenses during the reporting period; and our ability to continue as a going concern. Due to the inherent uncertainty involved in making estimates, actual results in future periods may differ from those estimates. 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. Cash and cash equivalents : All highly liquid investments with maturities of three months or less at the date of purchase are considered to be cash equivalents and consist primarily of government repurchase agreements, savings accounts, and money market accounts that are carried at cost, which approximates fair value. We maintain our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. We have not experienced any losses in such accounts. Restricted cash : Restricted cash consists of cash and cash equivalents held in bank deposit accounts to secure certain issuances of foreign bank guarantees. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that sum to the totals of the same amounts shown in the Consolidated Statements of Cash Flows. April 26, 2025 April 27, 2024 April 29, 2023 Cash and cash equivalents $ 127,507 $ 81,299 $ 23,982 Restricted cash — 379 708 Total cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows $ 127,507 $ 81,678 $ 24,690 We have foreign currency cash accounts to operate our global business. These accounts are impacted by changes in foreign currency rates. Of our $ 127,507 in cash and cash equivalents balances as of April 26, 2025, $ 112,758 was denominated in United States dollars, of which $ 932 was held by our foreign subsidiaries. As of April 26, 2025, we had an additional $ 14,749 in cash balances denominated in foreign currencies, of which $ 12,309 was maintained in accounts of our foreign subsidiaries. Inventories: In accordance with ASC 330 , Inventory, our inventories are stated at the lower of cost (first-in, first-out method) and net realizable value. 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 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, 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, 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. If the financial condition of any customer were to deteriorate, resulting in an impairment of its ability to make payments, additional allowances may be required. 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 48 Table of Contents 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. Revenue recognition: Our accounting policies and estimates are in accordance with ASC 606 , Revenue from Contracts with Customers, and are as follows: 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. Pre-contract costs are generally expensed as incurred, unless they are directly associated with an anticipated contract and recoverability from that contract is probable. Pre-contract costs directly associated with anticipated contracts expected to be recoverable include $ 321 and $ 384 as of April 26, 2025 and April 27, 2024, respectively. These are included in the “Inventories” line item in our Consolidated Balance Sheets. At contract inception, we identify performance obligations by reviewing the agreement for material distinct goods and services. Goods and services are distinct when the customer can benefit from them on its own and our promises to transfer these items are identifiable from other promises within the contract. When we are contracted to provide a single promise (an integrated system), we often treat it as a single performance obligation if we are providing goods and services with the same pattern of transfer that are highly integrated or interdependent, that are modified or customized by other goods or services promised, or that provide a combined outcome for which the customer has contracted. When less interdependency or integration is necessary, or when the customer can benefit from distinct items, we separate the contract into multiple performance obligations. We account for extended warranties and other services (“service-type warranties”) that represent a distinct service as a separate performance obligation. Our contracts can contain multiple components of transaction price. We evaluate each contract for these components and include fixed consideration, variable consideration, financing components, and non-cash consideration and exclude consideration payable to a customer and sales taxes in the transaction price. 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 (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. We consider the following factors in determining revenue associated with variable consideration: (a) the contract or other evidence providing the legal basis, (b) additional costs caused by unforeseen circumstances, (c) evidence supporting the claim, and (d) historical evidence and patterns of customers. We adjust the contract price for the effects of a significant financing component if we expect, at contract inception, that the period between when we transfer goods and services to a customer will exceed one year from the time the customer pays and represents financing. If the payment structures exceed a year but are structured to account for risks with a contract or correspond to payments on milestones or are scheduled for performance, we do not adjust the contract price for a financing component. See “Note 6 . 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. Many of our contracts are bundled, and we do not have separate selling prices for each performance obligation; 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, government tariffs, 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; increases in tariffs on imports of inputs, unanticipated technical problems; required project modifications not 49 Table of Contents initiated by the customer; suppliers’ or subcontractors’ failure to perform or delay in performing their obligations; logistics disruptions or delays; and capacity constraints. Contingencies for unknown or uncertain cost estimates may be utilized based on the complexity of scope and duration of a project and are relieved when conditions resolve. 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. The cumulative catch-up method is used to account for revisions in estimates. Revenue is recognized when we satisfy a performance obligation. We receive payments from customers based on a billing schedule as established in our contracts. Billing schedules include down payments and progress billings over time; set milestone payments that are specific to the project are scheduled for performance-based payments or are set time-based payment(s). Variability in contract assets and contract liabilities relates to the timing of billings and revenue recognition, which can vary significantly depending on contractual payment terms, build and installation schedules, and the related timing differences in transfer of control. Balances are also impacted by the seasonality in our business. Significant judgments and estimates are used in applying our revenue policies. In order to assure appropriate and consistent revenue recognition, we regularly evaluate available project related information and update estimates accordingly. We maintain internal policies and procedures to provide guidance for those involved in recording revenue. We monitor for changes in our business sales practices and customer interactions to capture the appropriate types of performance obligations and adjust for any change in control terms and conditions. Our material performance obligation types include: Unique configuration contracts : audio-visual communication systems uniquely configured (custom) or integrated for a customer’s particular location and system configuration may include all or a combination of the following: engineering services, project management services, video display(s), control solution(s), installation and integration services, scoring and messaging equipment, training, other on-site services, spare parts, software licenses, and assurance-type warranties. We may have multiple performance obligations in these types of contracts; however, a majority are treated as a combined single performance obligation. 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 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. Over time revenue recognition is appropriate because we have no alternative use for the uniquely configured system and have an enforceable right to payment for work performed, including a reasonable profit margin. The cost-to-cost input method measures costs incurred to date compared to estimated total costs for each contract. This method is the most faithful depiction of our performance because it measures the value of the contract transferred to the customer. Costs to perform the contract include direct and indirect costs for contract design, production, integration, installation, and assurance-type warranty reserve. Direct costs include materials and components; manufacturing, project management and engineering labor; and subcontracting expenses. Indirect costs include allocated charges for such items as facilities and equipment depreciation and general overhead. Provisions of estimated losses on uncompleted contracts are made in the period when such losses are capable of being estimated. Contract modifications to existing contracts with customers are evaluated in accordance with the five-step revenue model. 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 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 customer’s delivery needs. 50 Table of Contents 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. 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. Immaterial goods or services in the context of the contract are included with the display system performance obligation. Standard systems and equipment with limited configurations or integrations may include all or a combination (when immaterial) of the following performance obligations: engineering services, project management services, video display(s), control solution(s), installation and integration services, scoring, messaging and audio equipment, training, spare parts, software licenses, assurance-type warranties, and after-sale parts. Revenue is recognized at a point in time when control passes, or over time as services are performed or control passes. When fulfilling limited configuration performance obligations, we are typically able to redirect the video displays or scoring, messaging, or audio equipment to another customer without incurring significant economic losses. 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 (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. Services and other : 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 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. We use professional judgment to determine control transfer. If we have the right to consideration from a customer that directly corresponds with the value of our performance (where we bill a fixed amount for each hour of service provided), we recognize revenue related to the work completed. Software: Revenues from software license fees on sales, other than uniquely configured type contracts, are recognized when delivery of the product has occurred. Subscription-based licenses include the right for a customer to use our licenses and receive related support for a specified term, and revenue is recognized pro-rata over the term of the agreement. Shipping and handling costs: Shipping and handling costs collected from our customers in connection with our sales are recorded as a component of net sales. We record shipping and handling costs as a component of cost of sales at the time the product is shipped. Warranty: We offer a standard parts coverage warranty for periods varying from one to five years for most of our products. We also offer additional types of warranties to include on-site labor, routine maintenance, and event support. The terms of warranties on some installations can vary from one to 10 years. The specific terms and conditions of these warranties vary primarily depending on the type of product sold. 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 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. For service-type warranty contracts, we allocate revenue to this performance obligation, recognize the revenue over time, and recognize costs as incurred. 51 Table of Contents Property and equipment : In accordance with ASC 360, Property, Plant, and Equipment, property and equipment are stated at cost and depreciated principally on the straight-line method over the following estimated useful lives: Years Buildings and improvements 5 - 40 Machinery and equipment 5 - 7 Office furniture and equipment 3 - 5 Computer software and hardware 3 - 5 Equipment held for rental 2 - 7 Demonstration equipment 3 - 5 Transportation equipment 5 - 7 Leasehold improvements are depreciated over the lesser of the useful life of the asset or the term of the lease. Impairment of Long-Lived Assets : In accordance with ASC 360, Property, Plant, and Equipment , we assess long-lived tangible assets and definite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. When evaluating long-lived assets for potential impairment, we first compare the carrying value of the asset to the asset’s estimated future cash flows (undiscounted and without interest charges). If the estimated future cash flows are less than the carrying value of the asset, we calculate an impairment loss. The impairment loss calculation compares the carrying value of the asset to the asset’s estimated fair value. We recognize an impairment loss if the amount of the asset’s carrying value exceeds the asset’s estimated fair value. If we recognize an impairment loss, the adjusted carrying amount of the asset becomes its new cost basis. For a depreciable long-lived asset, the new cost basis will be depreciated (amortized) over the remaining useful life of that asset. Our impairment loss calculations contain uncertainties because they require management to make assumptions and to apply judgment to estimate future cash flows and asset fair values, including forecasting useful lives of the assets and selecting the discount rate that reflects the risk inherent in future cash flows. Goodwill and Other Intangible Assets : We account for goodwill and other intangible assets with indefinite lives in accordance with ASC 350 , Intangibles - Goodwill and Other. Under these provisions, goodwill is not amortized but is tested for impairment on at least an annual basis. Impairment testing is required more often than annually if an event or circumstance indicates an impairment or a decline in value may have occurred. A qualitative assessment may be used to first determine whether it is “more likely than not” that the fair value of a reporting unit is less its carrying value. Based on this assessment, if it is determined that is more likely than not that impairment has occurred, a quantitative analysis will be performed. The quantitative assessment uses an income approach to estimate the fair value of each reporting unit. The income approach is based on the projected cash flows, which are discounted to their present value using discount rates which consider the timing and risk of the forecasted cash flows. Fair value is estimated using internally developed forecasts and assumptions and takes into account management plans, business trends, and market and economic conditions. If the quantitative assessment of goodwill impairment fails, an impairment loss equal to the amount that a reporting unit’s carrying value exceeds its fair value will be recognized. Foreign currency translation : We follow the provisions of ASC 830, Foreign Currency Matters. Our foreign subsidiaries use the local currency of their respective countries as their functional currency. The assets and liabilities of foreign operations are translated at the exchange rates in effect at the balance sheet date. 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 stockholders’ equity in accumulated other comprehensive loss. Income taxes : We account for income taxes in accordance with ASC 740 , Income Taxes . We record a tax provision for anticipated tax consequences of the reported results of operations. Deferred tax assets and liabilities are measured using currently enacted tax rates and statutory tax rates applicable to the years in which we expect these temporary differences will affect taxable income. These assets and liabilities are analyzed regularly, and we assess the likelihood that deferred tax assets will be recoverable from future taxable income. When necessary, a valuation allowance is established if it is more 52 Table of Contents likely than not the deferred tax asset will not be realized. We report the net deferred tax asset and liability as a long-term asset or liability. Net deferred assets or liabilities are calculated by combining them based on their jurisdiction. In addition, because we operate in multiple income tax jurisdictions both within the United States and internationally, the calculation of tax liabilities involves judgment in estimating the impact of uncertainties in the application of complex tax laws. Resolution of these uncertainties in a manner inconsistent with our expectations could have a material impact on our financial condition and operating results. See “Note 12. Income Taxes” of the Notes to our Consolidated Financial Statements included in this Form 10-K for further information. Self-Insurance : Generally, we self-insure a portion of health insurance, product liability claims, and workers’ compensation. Under these plans, liabilities are recognized for claims incurred, including those incurred but not reported. 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 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 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 (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. Product design and development : We follow the provisions of ASC 730, Research and Development , which states all expenses related to product design and development are charged to operations as incurred. Our product design and development activities include the enhancement of existing products and technologies and the development of new products and technologies. Par value : 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 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. 53 Table of Contents 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: Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Earnings per share - basic Net (loss) income $ ( 10,121 ) $ 34,621 $ 6,802 Weighted average shares outstanding 47,587 45,901 45,404 Basic (loss) earnings per share $ ( 0.21 ) $ 0.75 $ 0.15 Earnings per share - diluted 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 Weighted average common shares outstanding, assuming dilution 47,587 46,543 45,521 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 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. Share-based compensation : We account for share-based compensation in accordance with ASC 718 , Compensation-Stock Compensation. Under the fair value recognition provisions of ASC 718, we measure share-based compensation cost at the grant date based on the fair value of the award and recognize the compensation expense over the requisite service period, which is the vesting period. See “Note 10. 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 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. 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. See “Note 3. Segment Reporting” of the Notes to our Consolidated Financial Statements included in this Form 10-K for additional discussion. Accounting Standards Not Yet Adopted 54 Table of Contents 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 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. Early adoption and retroactive application are permitted. 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. Note 2 . Revenue Recognition Disaggregation of revenue In accordance with ASC 606-10-50, we disaggregate revenue from contracts with customers by the type of performance obligation and the timing of revenue recognition. We determine that disaggregating revenue in these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors and to enable users of financial statements to understand the relationship to each reportable segment. The following table presents our disaggregation of revenue by segments: Fiscal Year 2025 Commercial Live Events High School Park and Recreation Transportation International Total Type of performance obligation Unique configuration $ 27,405 $ 226,780 $ 35,235 $ 49,280 $ 17,715 $ 356,415 Limited configuration 105,358 34,464 119,397 24,847 36,013 320,079 Service and other 23,440 30,240 11,289 6,934 8,080 79,983 $ 156,203 $ 291,484 $ 165,921 $ 81,061 $ 61,808 $ 756,477 Timing of revenue recognition Goods/services transferred at a point in time $ 116,605 $ 46,102 $ 120,138 $ 29,453 $ 39,903 $ 352,201 Goods/services transferred over time 39,598 245,382 45,783 51,608 21,905 404,276 $ 156,203 $ 291,484 $ 165,921 $ 81,061 $ 61,808 $ 756,477 55 Table of Contents Fiscal Year 2024 Commercial Live Events High School Park and Recreation Transportation International Total Type of performance obligation Unique configuration $ 32,914 $ 269,184 $ 38,819 $ 52,142 $ 29,562 $ 422,621 Limited configuration 109,458 41,805 124,113 27,913 24,164 327,453 Service and other 19,254 27,519 7,417 5,335 8,484 68,009 $ 161,626 $ 338,508 $ 170,349 $ 85,390 $ 62,210 $ 818,083 Timing of revenue recognition Goods/services transferred at a point in time $ 115,836 $ 48,899 $ 121,175 $ 30,866 $ 27,049 $ 343,825 Goods/services transferred over time 45,790 289,609 49,174 54,524 35,161 474,258 $ 161,626 $ 338,508 $ 170,349 $ 85,390 $ 62,210 $ 818,083 Fiscal Year 2023 Commercial Live Events High School Park and Recreation Transportation International Total Type of performance obligation Unique configuration $ 25,821 $ 223,560 $ 22,730 $ 45,286 $ 33,623 $ 351,020 Limited configuration 128,346 36,259 114,951 23,946 43,007 346,509 Service and other 16,423 25,081 4,067 3,074 8,022 56,667 $ 170,590 $ 284,900 $ 141,748 $ 72,306 $ 84,652 $ 754,196 Timing of revenue recognition Goods/services transferred at a point in time $ 132,728 $ 43,761 $ 109,323 $ 24,950 $ 45,687 $ 356,449 Goods/services transferred over time 37,862 241,139 32,425 47,356 38,965 397,747 $ 170,590 $ 284,900 $ 141,748 $ 72,306 $ 84,652 $ 754,196 See “Note 3 . 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 Contract assets represent revenue recognized in excess of amounts billed and include unbilled receivables. Unbilled receivables, which represent an unconditional right to payment subject only to the passage of time, are reclassified to accounts receivable when they are billed according to the contract terms. Contract liabilities represent amounts billed to the clients in excess of revenue recognized to date. 56 Table of Contents The following table reflects the changes in our contract assets and liabilities: April 26, 2025 April 27, 2024 Dollar Change Percent Change Contract assets $ 41,169 $ 55,800 $ ( 14,631 ) ( 26.2 ) % Contract liabilities - current 69,050 65,524 3,526 5.4 Contract liabilities - non-current 18,421 16,342 2,079 12.7 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 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. Earned and unearned revenues for these contracts are included in the “Contract assets” and “Contract liabilities” line items of our Consolidated Balance Sheets. Changes in unearned service-type warranty contracts, net were as follows: April 26, 2025 April 27, 2024 Balance at beginning of year $ 32,159 $ 28,338 New contracts sold 55,480 49,099 Less: reductions for revenue recognized ( 52,885 ) ( 43,520 ) Foreign currency translation and other 375 ( 1,758 ) Balance at end of year $ 35,129 $ 32,159 Contracts in process identified as loss contracts as of April 26, 2025 and April 27, 2024 were immaterial. 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. Remaining performance obligations and revenue recognized from past performance obligations As of April 26, 2025, the aggregate amount of the transaction price allocated to the remaining performance obligations was $ 408,332 . Remaining performance obligations related to product and service agreements as of April 26, 2025 were $ 341,624 and $ 66,708 , respectively. We expect approximately $ 342,338 of our remaining performance obligations to be recognized over the next 12 months, with the remainder recognized thereafter. Although remaining performance obligations reflect business that is considered to be legally binding, cancellations, deferrals, or scope adjustments may occur. Any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations, and project deferrals are reflected or excluded in the remaining performance obligation balance, as appropriate. The amount of revenue recognized associated with performance obligations satisfied in prior years during the years ended April 26, 2025 and April 27, 2024 was immaterial. Note 3 . Segment Reporting We organize and manage our business by the following five segments which meet the definition of reportable segments under ASC 280-10 , Segment Reporting : Commercial, Live Events, High School Park and Recreation, Transportation, and International. 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 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 57 Table of Contents 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. • Our Commercial business unit primarily consists of sales of our integrated video display systems, digital billboards, Galaxy ® and Fuelight ™ product lines, and dynamic messaging systems to resellers (primarily sign companies), out-of-home (“OOH”) companies, national retailers, quick-serve restaurants, casinos, shopping centers, cruise ships, commercial building owners, and petroleum retailers. • Our Live Events business unit primarily consists of sales of integrated scoring and video display systems to college and professional sports facilities and convention centers and sales of our mobile display technology to video rental organizations and other live events type venues. • Our High School Park and Recreation business unit primarily consists of sales of scoring systems, Galaxy ® displays, and video display systems to primary and secondary education facilities and resellers (primarily sign companies). • Our Transportation business unit primarily consists of sales of intelligent transportation systems dynamic messaging signs for road management, mass transit, and aviation applications and other electronic signage for advertising and way-finding needs, which includes our Vanguard ® and Galaxy ® product lines and other intelligent transportation systems dynamic message signs, to governmental transportation departments, transportation industry contractors, airlines, and other transportation related customers. • Our International business unit consists of sales of all product lines outside the United States and Canada. In our International business unit, we focus on product lines related to integrated scoring and video display systems for sports and commercial applications, OOH advertising products, architectural lighting, and transportation related products for sale outside of the United States and Canada to the related type of company, including sports and commercial business facilities, OOH companies, and governmental transportation agencies. Our segments follow the same accounting policies as those described in “Note 1. Nature of Business and Summary of Significant Accounting Policies.” Some expenses or services are not directly allocable to a sale or segment, or the resources and related expenses are shared across business segment areas. These expenses are allocated using estimates and allocation methodologies based on financial measures and professional judgment. Shared or unabsorbed manufacturing costs are allocated to the business unit benefiting most from that manufacturing location’s production capabilities. Shared or unabsorbed costs of domestic field sales and services infrastructure, including most field administrative staff, are allocated to the Commercial, Live Events, High School Park and Recreation, and Transportation business units based on cost of sales. Shared manufacturing, buildings and utilities, and procurement costs are allocated based on payroll dollars, square footage, and various other financial measures in the segment analysis. Assets are not allocated to the segments. Depreciation and amortization are allocated to each segment based on various financial measures; however, some depreciation and amortization are corporate in nature and remain unallocated. We do not maintain information on sales by products; therefore, disclosure of such information is not practical. The following table sets forth certain financial information for each of our five reporting segments for the periods indicated: 58 Table of Contents Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Net sales: Commercial $ 156,203 $ 161,626 $ 170,590 Live Events 291,484 338,508 284,900 High School Park and Recreation 165,921 170,349 141,748 Transportation 81,061 85,390 72,306 International 61,808 62,210 84,652 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: Commercial 38,717 34,233 31,155 Live Events 62,694 95,984 49,255 High School Park and Recreation 57,795 57,364 41,145 Transportation 29,038 26,021 19,825 International 7,243 8,841 9,975 Total consolidated gross profit 195,487 222,443 151,355 Less: Selling 60,011 56,954 56,655 General and administrative 63,498 42,632 38,747 Product design and development 38,860 35,742 29,989 Goodwill impairment — — 4,576 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 (Loss) Income before income taxes $ ( 5,851 ) $ 54,051 $ 13,257 Depreciation and amortization: Commercial $ 4,272 $ 4,497 $ 3,468 Live Events 5,668 6,256 6,430 High School Park and Recreation 2,179 1,968 1,632 Transportation 807 715 584 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 Total depreciation and amortization $ 19,547 $ 19,291 $ 16,993 59 Table of Contents 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: Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Net sales: United States $ 676,192 $ 744,419 $ 661,312 Outside United States 80,285 73,664 92,884 $ 756,477 $ 818,083 $ 754,196 Property and equipment, net of accumulated depreciation: United States $ 66,701 $ 64,332 $ 63,786 Outside United States 7,183 7,420 8,361 $ 73,884 $ 71,752 $ 72,147 We have numerous customers worldwide for sales of our products and services, and no customer accounted for 10 percent or more of net sales; 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 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. Note 4 . Goodwill and Intangible Assets Goodwill The changes in the carrying amount of goodwill related to each reportable segment for the fiscal year ended April 26, 2025 were as follows: Commercial Transportation Total Balance as of April 27, 2024: $ 3,188 $ 38 $ 3,226 Foreign currency translation ( 29 ) ( 9 ) ( 38 ) Balance as of April 26, 2025: $ 3,159 $ 29 $ 3,188 We perform an analysis of goodwill on an annual basis, and it is tested for impairment more frequently if events or changes in circumstances indicate that an asset might be impaired. 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 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. The amount of accumulated impairments to goodwill as of April 26, 2025 and April 27, 2024 was $ 4,576 . 60 Table of Contents Intangible Assets The following table summarizes intangible assets, net, as of April 26, 2025 and April 27, 2024: April 26, 2025 Weighted Average Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Registered trademarks 20.0 $ 662 $ 342 $ 320 Customer relationships 10.3 2,521 2,273 248 Total 12.2 $ 3,183 $ 2,615 $ 568 April 27, 2024 Weighted Average Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Registered trademarks 20.0 $ 636 $ 296 $ 340 Customer relationships 10.3 2,549 2,049 500 Total 12.2 $ 3,185 $ 2,345 $ 840 In the fiscal years 2025, 2024, and 2023, amortization expense was $278, $ 287 , and $ 290 , respectively. Amortization expenses are included primarily in product design and development and selling expense in the Consolidated Statements of Operations. Intangible assets are written off when fully amortized. As of April 26, 2025, amortization expenses for future periods were estimated to be as follows: Fiscal years ending Amount 2026 $ 251 2027 38 2028 38 2029 38 2030 38 Thereafter 165 Total expected amortization expense $ 568 Note 5 . Selected Financial Statement Data Inventories consisted of the following: April 26, 2025 April 27, 2024 Raw materials $ 46,340 $ 66,900 Work-in-process 10,223 13,848 Finished goods 49,276 57,260 $ 105,839 $ 138,008 61 Table of Contents Property and equipment, net consisted of the following: April 26, 2025 April 27, 2024 Land $ 3,024 $ 2,895 Buildings 73,373 71,670 Machinery and equipment 139,079 131,983 Office furniture and equipment 4,027 3,765 Computer software and hardware 48,087 46,135 Construction in Process 1,619 5,064 Demonstration equipment 7,355 7,094 Transportation equipment 8,455 7,667 285,019 276,273 Less accumulated depreciation 211,135 204,521 $ 73,884 $ 71,752 Our depreciation expense was $ 17,654 , $ 17,453 , and $ 16,703 for the fiscal years 2025, 2024, and 2023, respectively. Accrued expenses consisted of the following: April 26, 2025 April 27, 2024 Compensation $ 23,217 $ 27,365 Taxes, other than income taxes 3,259 3,410 Accrued employee benefits 4,105 3,871 Operating lease liabilities 2,044 1,984 Short-term accrued expenses 9,080 6,398 $ 41,705 $ 43,028 62 Table of Contents Interest (expense) income, net consisted of the following: Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Interest expense: Interest expense $ ( 2,873 ) $ ( 3,397 ) $ ( 1,127 ) Debt issuance amortization expense ( 1,614 ) ( 1,551 ) — Total interest expense ( 4,487 ) ( 4,948 ) ( 1,127 ) Interest income: Interest income 5,834 1,530 207 Interest income (expense), net $ 1,347 $ ( 3,418 ) $ ( 920 ) Other expense and debt issuance costs write-off, net consisted of the following: Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Foreign currency transaction gains (losses) $ 658 $ 284 $ 479 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 ) Debt issuance costs write off — ( 3,353 ) — Other 80 96 115 $ ( 17,795 ) $ ( 13,096 ) $ ( 7,211 ) Note 6 . Accounts Receivables, Net We invoice customers based on a billing schedule as established in our contracts. We sometimes have the ability to file a contractor’s lien against the product installed as collateral and to file claims against surety bonds to protect our interest in receivables. Foreign sales are at times secured by irrevocable letters of credit or bank guarantees. Accounts receivable are reported net of an allowance for credit losses of $ 1,927 and $ 4,568 as of April 26, 2025 and April 27, 2024, respectively. Included in accounts receivable as of April 26, 2025 and April 27, 2024 was $ 3,727 and $ 1,350 , respectively, of retainage on construction-type contracts, all of which is expected to be collected within one year. In some contracts with customers, we agree to installment payments exceeding 12 months. The present value of these contracts is recorded as a receivable as the revenue is recognized in accordance with GAAP, and profit is recognized to the extent the present value is in excess of cost. We generally retain a security interest in the equipment or in the cash flow generated by the equipment until the contract is paid. 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 September 2026. The face value of long-term receivables was $ 3,698 and $ 863 as of April 26, 2025 and April 27, 2024, respectively. Note 7 . Financing Agreements Long-term debt consists of the following: 63 Table of Contents April 26, 2025 April 27, 2024 ABL credit facility/prior line of credit $ — $ — Mortgage 12,375 13,875 Convertible note — 25,000 Long-term debt, gross 12,375 38,875 Debt issuance costs, net ( 388 ) ( 761 ) Change in fair value of convertible note — 16,550 Current portion ( 1,500 ) ( 1,500 ) Long-term debt, net $ 10,487 $ 53,164 Credit Agreements 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 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 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 . The Delayed Draw Loan is subject to the terms of the Credit Agreement and matures on May 11, 2026. 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 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 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”). 64 Table of Contents • 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. Interest 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: Liability Component (in thousands) 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 $ — 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 % Implied Yield 16.28 % Volatility (Annual) 40.00 % Dividend Yield (Annual) — % 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. 65 Table of Contents 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 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 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 Aggregate contractual maturities of debt in future fiscal years are as follows: Fiscal years ending Amount 2026 $ 1,500 2027 10,875 2028 — 2029 — 2030 and beyond — Total debt $ 12,375 Note 8 . Share Repurchase Program 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. 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 . 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. Note 9 . Leases We lease facilities and various equipment to manufacture products and provide employee collaboration space and tools. These are all classified as operating leases and have initial lease terms ranging from 1 year to 5 years. These operating leases do not contain material residual value guarantees or material restrictive covenants. Our lease for our facility in Sioux Falls, South Dakota has a purchase option. We have no material financing leases. We determine if an arrangement is a lease at the inception of the lease. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Right-of-use assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As we are generally not able to determine the rate implicit in our leases, we use the incremental borrowing rate based on the information available at the commencement date in determining the present value of future lease payments. The operating lease right-of-use asset includes any prepaid lease payments and initial direct costs and excludes any lease incentives and impairments. Some of our leases include options to extend the term, which is only included in the right-of-use assets and lease liability calculation when it is reasonably certain that we will exercise that option. We have lease agreements with lease and non-lease components, and we have elected to account for all asset classes as a single lease 66 Table of Contents component. Our operating leases also typically require payment of real estate taxes, insurance, and common area maintenance. These components comprise the majority of our variable lease cost and are excluded from the present value of our lease obligations. In instances where they are fixed, they are included due to our election to combine lease and non-lease components. Our total variable lease costs are immaterial. 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 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. As of April 26, 2025, the weighted average remaining lease term and discount rate related to operating leases was 2.4 years and 6.1 percent as compared to 2.4 years and 5.0 percent as of April 27, 2024. Supplemental unaudited cash flow information related to operating leases were as follows: Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 2,461 $ 2,581 $ 2,692 Future minimum operating lease payments as of, and subsequent to, April 26, 2025 under ASC 842 are as follows: Operating Leases Fiscal years ending 2026 $ 2,270 2027 2,060 2028 791 2029 33 2030 29 Thereafter — Total lease payments 5,183 Less imputed interest ( 369 ) Total lease liabilities $ 4,814 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. Note 10 . 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 : During fiscal 2021, we established the Daktronics, Inc. 2020 Stock Incentive Plan (“2020 Plan”) and ceased granting options under the 2015 Stock Incentive Plan (“2015 Plan”). The 2020 Plan provides for the issuance of stock-based awards, including stock options, restricted stock, restricted stock units, and deferred stock to employees, directors, and consultants. 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 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. As with stock options, restricted stock and restricted stock unit ownership cannot be transferred during the vesting period. 67 Table of Contents As of April 26, 2025, the aggregate number of shares available for future grants under the 2020 Plan for stock options and restricted stock awards was 1,381 shares. Shares of common stock subject to all stock awards granted under the 2020 Plan are counted as one share of stock for each share of stock subject to the award. Although the 2015 Plan remains in effect for options outstanding that were granted under the 2015 Plan until the earlier of the exercise of the options or their expiration or termination without being exercised, no new options can be granted under the 2015 Plan. Restricted stock and restricted stock units : 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. Unvested restricted stock will terminate and be forfeited upon termination of employment or service. The fair value of restricted stock and our restricted stock unit awards are measured on the grant date based on the market value of our common stock. The related compensation expense as calculated under ASC 718, net of estimated forfeitures, is recognized over the applicable vesting period. Unrecognized compensation expense related to the restricted stock and restricted stock unit awards was approximately $ 4,456 as of April 26, 2025, which is expected to be recognized over a weighted-average period of 4.33 years. 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. Mr. 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: Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Number of Nonvested Shares Weighted Average Grant Date Fair Value Per Share Number of Nonvested Shares Weighted Average Grant Date Fair Value Per Share Number of Nonvested Shares Weighted Average Grant Date Fair Value Per Share Outstanding at beginning of year 486 $ 5.95 617 $ 4.11 469 $ 5.65 Granted 318 13.19 159 9.85 360 3.15 Vested ( 189 ) 6.45 ( 280 ) 3.92 ( 192 ) 5.98 Forfeited ( 15 ) 6.71 ( 10 ) 4.77 ( 20 ) 4.98 Outstanding at end of year 600 $ 9.62 486 $ 5.95 617 $ 4.11 68 Table of Contents Stock Options : 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: Stock Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding as of April 27, 2024 1,635 $ 6.89 5.06 $ 4,607 Granted 29 11.87 — — Cancelled or forfeited ( 165 ) — — — Exercised ( 598 ) 8.66 — 3,594 Outstanding as of April 26, 2025 901 $ 5.78 5.41 $ 6,107 Shares vested and expected to vest 890 $ 5.78 5.38 $ 6,031 Exercisable as of April 26, 2025 530 $ 6.46 4.29 $ 3,233 The aggregate intrinsic value of stock options represents the difference between the exercise price of stock options and the fair market value of the underlying common stock for all in-the-money options. We define in-the-money options as of April 26, 2025 as options having exercise prices lower than the $ 12.56 per share market price of our common stock on that date. There were 530 shares exercisable that were in-the-money options as of April 26, 2025. The total intrinsic value of options exercised during fiscal years 2025, 2024, and 2023 was $ 3,594 , $ 708 , and $ 7 , respectively. The total fair value of stock options vested was $ 410 , $ 453 , and $ 467 for fiscal years 2025, 2024, and 2023, respectively. We estimate the fair value of stock options granted using the Black-Scholes option valuation model. We recognize the fair value of the stock options on a straight-line basis as compensation expense. All options are recognized over the requisite service periods of the awards, which are generally the vesting periods. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. 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 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. The following factors are the significant assumptions used in the computation of the fair value of options: Expected life . The expected life of options granted represents the period of time they are expected to be outstanding. We estimate the expected life of options granted based on historical exercise patterns, which we believe are representative of future behavior. We have examined our historical pattern of option exercises in an effort to determine if there were any discernible patterns of activity based on certain demographic characteristics. Demographic characteristics tested included age, salary level, job level, and geographic location. We have determined there were no meaningful differences in option exercise activity based on the demographic characteristics tested. Expected volatility . We estimate the volatility of our common stock at the date of grant based on historical volatility consistent with ASC 718 and SEC Staff Accounting Bulletin No. 107, Share-Based Payments . Risk-free interest rate. The rate is based on the United States Treasury zero-coupon yield curve on the grant date for a term similar to the expected life of the options. Dividend yield. We use an expected dividend yield consistent with our historical dividend yield pattern. 69 Table of Contents The following table provides the weighted-average fair value of options granted and the related assumptions used in the Black-Scholes model: Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Fair value of options granted $ 5.98 $ 4.92 $ 1.34 Risk-free interest rate 3.58 % 4.37 % 3.37 % Expected volatility 49.14 % 46.28 % 41.10 % Expected life of option (in years) 6.83 6.90 6.93 Employee stock purchase plan : We have an employee stock purchase plan (“ESPP”), which enables employees after six months of continuous employment to elect, in advance and semi-annually, to contribute up to 15 percent of their compensation, subject to certain limitations, toward the purchase of our common stock at a purchase price equal to 85 percent of the lower of the fair market value of the common stock on the first or last day of the participation period. The ESPP requires participants to hold any shares purchased under the ESPP for a minimum period of one year after the date of purchase. Compensation expense recognized on shares issued under our ESPP is based on the value of a traded option to purchase shares of our stock at a 15 percent discount to the stock price. The total number of shares reserved under the ESPP is 5,500 . The number of shares of common stock issued under the ESPP totaled 148 , 355 , and 424 shares in fiscal 2025, 2024, and 2023, respectively. 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. Total share-based compensation expense : As of April 26, 2025, there was $ 4,981 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under all equity compensation plans. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. We expect to recognize the cost over a weighted-average period of 4.33 years. The following table presents a summary of the share-based compensation expense by equity type as follows: Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Stock options $ 910 $ 420 $ 453 Restricted stock and stock units 1,591 1,177 1,153 Employee stock purchase plans 443 493 421 $ 2,944 $ 2,090 $ 2,027 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: Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Cost of sales $ 613 $ 452 $ 441 Selling 460 437 424 General and administrative 1,577 745 735 Product design and development 294 456 427 $ 2,944 $ 2,090 $ 2,027 70 Table of Contents We received $ 5,153 in cash from option exercises under all share-based payment arrangements for the fiscal year ended April 26, 2025. The tax expense related to non-qualified options and restricted stock units under all share-based payment arrangements totale d $ 5 , $ 22 , and $ 23 for fiscal years 2025, 2024, and 2023, respectively. Note 11 . Retirement Benefits 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. Employees are eligible to participate in the 401(k) savings plan the first day of the calendar month following completion of 30 days of continuous service if they have attained the age of 21 . We contributed $ 3,522 , $ 3,201 , and $ 2,969 for matches to the plan for fiscal years 2025, 2024, and 2023, respectively. Note 12 . Income Taxes The following tables reflect the significant components of our income tax provision. The pretax income (loss) attributable to domestic and foreign operations was as follows: Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Domestic $ ( 13,407 ) $ 46,763 $ 10,125 Foreign 7,556 7,288 3,132 (Loss) Income before income taxes $ ( 5,851 ) $ 54,051 $ 13,257 Income tax expense (benefit) consisted of the following: Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Current: Federal $ 6,819 $ 21,174 $ 6,321 State 1,786 5,512 1,381 Foreign 1,965 1,813 2,273 Deferred: Federal ( 5,308 ) ( 8,101 ) ( 3,025 ) State ( 946 ) ( 1,045 ) ( 456 ) Foreign ( 46 ) 77 ( 39 ) $ 4,270 $ 19,430 $ 6,455 71 Table of Contents The reconciliation of the provision for income taxes and the amount computed by applying the federal statutory rate to income before income taxes is as follows: Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Computed income tax expense at federal statutory rates $ ( 1,229 ) $ 11,351 $ 2,784 State taxes, net of federal benefit 819 3,771 731 Change in fair value on convertible debt 4,729 3,476 — Change in valuation allowances 655 2,076 2,078 Research and development tax credit ( 1,025 ) ( 1,203 ) ( 684 ) Foreign-Derived Intangible Income (FDII) ( 183 ) ( 322 ) ( 128 ) Meals and entertainment 318 282 149 Stock compensation ( 853 ) ( 178 ) 262 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 Change in uncertain tax positions 112 ( 35 ) ( 86 ) GILTI 79 19 6 Base Erosion Anti-Abuse Tax (BEAT) — — 87 Goodwill Impairment — — 551 $ 4,270 $ 19,430 $ 6,455 Our effective tax rate for fiscal 2025 was ( 73.0 ) percent. 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 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. 72 Table of Contents The components of the net deferred tax assets were as follows: April 26, 2025 April 27, 2024 Deferred tax assets: Accrued warranty obligations $ 8,819 $ 9,361 Vacation accrual 2,443 2,170 Deferred maintenance revenue 998 777 Allowance for excess and obsolete inventory 3,590 3,362 General reserve 628 — Equity compensation 282 234 Allowance for credit losses accounts 4,242 1,015 Inventory capitalization 3,115 3,956 Accrued compensation and benefits 942 424 Net operating loss carry forwards 862 885 Outside basis difference in equity method investments 7,030 6,295 Section 174 Capitalization 12,840 9,878 Research and development tax credit carry forwards 76 72 Lease accounting - lease liability 1,250 1,038 Other 646 630 Total deferred tax assets 47,763 40,097 Valuation allowance ( 7,887 ) ( 7,197 ) Net deferred tax assets 39,876 32,900 Deferred tax liabilities: Property and equipment ( 5,904 ) ( 5,506 ) Lease accounting - right of use asset ( 1,250 ) ( 1,020 ) Prepaid expenses ( 557 ) ( 477 ) Unrealized gain on foreign currency exchange ( 146 ) ( 64 ) Other — ( 114 ) Total deferred tax liabilities ( 7,857 ) ( 7,181 ) Net deferred tax asset $ 32,019 $ 25,719 The classification of the net deferred tax assets in the accompanying Consolidated Balance Sheets is: April 26, 2025 April 27, 2024 Non-current assets $ 32,104 $ 25,862 Non-current liabilities ( 85 ) ( 143 ) $ 32,019 $ 25,719 73 Table of Contents The summary of changes in the amounts related to unrecognized uncertain tax benefits are: April 26, 2025 April 27, 2024 Balance at beginning of year $ 356 $ 392 Gross increases related to prior period tax positions 24 15 Gross decreases related to prior period tax positions ( 22 ) ( 3 ) Gross increases related to current period tax positions 122 123 Lapse of statute of limitations ( 34 ) ( 171 ) Balance at end of year $ 446 $ 356 All of our unrecognized tax benefits would have an impact on the effective tax rate if recognized. It is reasonably possible that the amount of unrecognized tax benefits could change due to one or more of the following events occurring in the next 12 months: expiring statutes, audit activity, tax payments, or competent authority proceedings. A statute of limitations relating to $ 69 of the unrecognized tax benefits (including interest) expires in the next 12 months. The benefit will be recognized if the statute lapses with no further action taken by regulators. Additionally, we recognized the release of $ 34 in unrecognized tax benefits related to the lapse of a statute of limitations in fiscal 2025. Interest and penalties incurred associated with uncertain tax positions are included in the “Income tax expense” line item in our Consolidated Statements of Operations. Accrued interest and penalties are included in the related tax liability line item in our Consolidated Balance Sheets of $ 41 and $ 21 as of April 26, 2025 and April 27, 2024, respectively. As of April 26, 2025, we had total valuation allowances against deferred tax assets of $ 7,887 , as compared to $ 7,197 as of April 27, 2024, representing an increase of $ 690 during fiscal 2025. 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 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. As of April 26, 2025, we had foreign net operating loss (“NOL”) carryforwards of approximately $ 4,876 primarily related to our operations in Belgium and Ireland, which have indefinite lives. A deferred tax asset has been recorded for all NOL carryforwards totaling approximately $ 860 . However, due to uncertainty in future taxable income, a valuation allowance has been recorded for the full amount of the asset. Additional tax information: We are subject to United States federal income tax as well as income taxes of multiple state and foreign jurisdictions. Fiscal years 2022, 2023, and 2024 remain open to federal tax examinations, and fiscal years 2021, 2022, 2023 and 2024 remain open for state income tax examinations. Certain subsidiaries are also subject to income tax in several foreign jurisdictions which have open tax years varying by jurisdiction beginning in fiscal 2013. In the event of any future tax assessments, we have elected to record the income taxes and any related interest and penalties as income tax expense in our Consolidated Statements of Operations. As of April 26, 2025, we had no deferred tax liability recognized relating to our investment in foreign subsidiaries where the earnings have been indefinitely reinvested. The Tax Act of 2017 generally eliminates United States federal income taxes on dividends from foreign subsidiaries, and, as a result, the accumulated undistributed earnings would be subject only to other taxes, such as withholding taxes and state income taxes, on the distribution of such earnings. 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. 74 Table of Contents 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. Note 13 . Cash Flow Information The changes in operating assets and liabilities consisted of the following: Year Ended April 26, 2025 April 27, 2024 April 29, 2023 (Increase) decrease: Account receivable $ 25,161 $ ( 7,733 ) $ ( 10,422 ) Long-term receivables ( 2,603 ) 620 1,950 Inventories 32,536 10,859 ( 15,064 ) Contract assets 14,721 ( 9,262 ) ( 4,879 ) Prepaid expenses and other current assets 36 1,086 5,267 Income taxes receivables ( 2,761 ) ( 124 ) 268 Right of use, investment in affiliates, and other assets ( 1,213 ) 214 ( 261 ) Increase (decrease): Accounts payable ( 14,119 ) ( 7,123 ) ( 5,344 ) Contract liabilities 5,596 ( 22,695 ) 3,468 Accrued expenses 239 10,891 ( 967 ) Warranty obligations ( 3,835 ) 4,312 607 Long-term warranty obligations 1,735 1,075 3,055 Income taxes payable ( 4,485 ) 2,067 2,354 Other payables 381 1,678 104 $ 51,389 $ ( 14,135 ) $ ( 19,864 ) Supplemental disclosures of cash flow information consisted of the following: Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Cash payments for: Interest $ 3,066 $ 2,858 $ 1,075 Income taxes, net of refunds 17,806 26,452 7,489 75 Table of Contents Non-cash impairment charges consisted of the following: Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Non-cash impairment charges: Equity investees impairment $ — $ 6,359 $ 4,473 Goodwill impairment — — 4,576 Total non-cash impairment charges $ — $ 6,359 $ 9,049 Supplemental schedule of non-cash investing and financing activities consisted of the following: Year Ended April 26, 2025 April 27, 2024 April 29, 2023 Purchases of property and equipment included in accounts payable $ 2,320 $ 1,628 $ 1,057 Contributions of common stock under the ESPP 1,192 1,200 1,207 Debt issuance costs — — 2,875 Settlement of convertible note 64,366 — — Note 14 . Fair Value Measurement ASC 820, Fair Value Measurement, defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. It also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The fair value hierarchy within ASC 820 distinguishes between the following three levels of inputs which may be utilized when measuring fair value: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than quoted prices included within level 1 for the assets or liabilities, either directly or indirectly (for example, quoted market prices for similar assets and liabilities in active markets or quoted market prices for identical assets or liabilities in markets not considered to be active, inputs other than quoted prices that are observable for the asset or liability, or market-corroborated input). Level 3 - Unobservable inputs supported by little or no market activity based on our own assumptions used to measure assets and liabilities. The fair values for fixed-rate long-term receivables are estimated using a discounted cash flow analysis based on interest rates currently being offered for contracts with similar terms to customers with similar credit quality. The carrying amounts reported in our Consolidated Balance Sheets for long-term receivables approximate fair value and have been categorized as a level 2 fair value measurement. Fair values for fixed-rate long-term marketing obligations are estimated using a discounted cash flow calculation applying interest rates currently being offered for debt with similar terms and underlying collateral. The total carrying value of long-term marketing obligations as reported in our Consolidated Balance Sheets within other long-term obligations approximates fair value and has been categorized as a level 2 fair value measurement. The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis as of April 26, 2025 and April 27, 2024 according to the valuation techniques we used to determine their fair values. There have been no transfers of assets or liabilities among the fair value hierarchies presented. 76 Table of Contents Fair Value Measurements Level 1 Level 2 Level 3 Total Balance as of April 26, 2025: Cash and cash equivalents $ 127,507 $ — $ — $ 127,507 $ 127,507 $ — $ — $ 127,507 Balance as of April 27, 2024: Cash and cash equivalents $ 81,299 $ — $ — $ 81,299 Restricted cash 379 — — 379 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. Cash and cash equivalents : Consists of cash on hand in bank deposits and highly liquid investments, primarily money market accounts. The fair value was measured using quoted market prices in active markets. The carrying amount approximates fair value. Restricted cash : Consists of cash and cash equivalents held in bank deposit accounts to secure issuances of foreign bank guarantees. The fair value of restricted cash was measured using quoted market prices in active markets. The carrying amount approximates fair value. Convertible Note : We elected to value the Convertible Note at fair value in accordance with ASC 825-10-15-4(a) because of the embedded derivatives contained in the Convertible Note. The fair value of the Convertible Note was estimated using a binomial lattice model. Binomial lattice allows for the examination of the value to a holder and understanding the investment decision that would occur at each node. 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. 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, 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. See “Note 1. Nature of Business and Summary of Significant Accounting Policies” for further details regarding our investment in affiliates. Other measurements using fair value : Some of our financial instruments, such as accounts receivable, long-term receivables, prepaid expense and other assets, contract assets and liabilities, accounts payable, warranty obligations, and other long-term obligations are reflected in the Consolidated Balance Sheets at carrying value, which approximates fair value due to their short-term nature . Note 15 . Derivative Financial Instruments We utilize derivative financial instruments to manage the economic impact of fluctuations in currency exchange rates on those transactions denominated in currencies other than our functional currency, which is the United States dollar. We enter into currency forward contracts to manage these economic risks. We account for all derivatives in the Consolidated Balance Sheets within accounts receivable or accounts payable measured at fair value, and changes in fair values are recognized in earnings unless specific hedge accounting criteria are met for cash flow or net investment hedges. 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 26, 2025 and April 27, 2024. 77 Table of Contents Note 16 . Commitments and Contingencies Litigation: We are a party to legal proceedings and claims which arise during the ordinary course of business. We review our legal proceedings and claims, regulatory reviews and inspections, and other legal matters on an ongoing basis and follow appropriate accounting guidance when making accrual and disclosure decisions. We establish accruals for those contingencies when the incurrence of a loss is probable and can be reasonably estimated, and we disclose the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued if such disclosure is necessary for our financial statements to not be misleading. We do not record an accrual when the likelihood of loss being incurred is probable, but the amount cannot be reasonably estimated, or when the loss is believed to be only reasonably possible or remote, although disclosures will be made for material matters as required by ASC 450-20, Contingencies - Loss Contingencies . Our assessment of whether a loss is reasonably possible or probable is based on our assessment and consultation with legal counsel regarding the ultimate outcome of the matter following all appeals. For other unresolved legal proceedings or claims, we do not believe there is a reasonable probability that any material loss would be incurred. Accordingly, no material accrual or disclosure of a potential range of loss has been made related to these matters. We do not expect the ultimate liability of these unresolved legal proceedings or claims to have a material effect on our financial position, liquidity, or capital resources. Warranties: See “Note 1. Nature of Business and Summary of Significant Accounting Policies” for more information regarding warranties. Changes in our warranty obligation for the fiscal years ended April 26, 2025 and April 27, 2024 consisted of the following: April 26, 2025 April 27, 2024 Beginning accrued warranty obligations $ 37,928 $ 32,541 Warranties issued during the period 13,733 14,422 Settlements made during the period ( 13,795 ) ( 12,600 ) Changes in accrued warranty obligations for pre-existing warranties during the period, including expirations ( 2,036 ) 3,565 Ending accrued warranty obligations $ 35,830 $ 37,928 Performance guarantees: 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 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. These performance guarantees have various terms but are generally one year. We enter into written agreements with our customers, and those agreements often contain indemnification provisions that require us to make the customer whole if certain acts or omissions by us cause the customer financial loss. We make efforts to negotiate reasonable caps and limitations on the recovery of such damages. As of April 26, 2025, we were not aware of any indemnification claim from a customer. Purchase commitments: From time to time, we commit to purchase inventory, advertising, cloud-based information systems, information technology maintenance and support services, and various other products and services over periods that extend beyond one year. As of April 26, 2025, we were obligated under the following unconditional purchase commitments: 78 Table of Contents Fiscal years ending Amount 2026 $ 11,413 2027 7,931 2028 87 2029 50 2030 50 Thereafter 50 $ 19,581 Note 17 . 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; the amount involved exceeds $ 120 ; and in which any “related person” had, has or will have a direct or indirect material interest. The policy generally defines a “related person” as a Director, executive officer or beneficial owner of more than five percent of any class of our voting securities and any immediate family member of any of the foregoing persons. The Audit Committee reviews and, if appropriate, approves related party transactions, including certain transactions which are deemed to be pre-approved under the policy. 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 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, as amended (the “Securities Act”). 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. 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 an Exhibit to this Form 10-K. As described in Amendment No. 2 (“Amendment No. 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; 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; and P. 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. 2, the Holder owns 5,974 shares of our common stock, representing 11.79 79 Table of Contents 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 Board of Directors is the President of Dakota State University. See “Note 1. 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. Note 18. 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; and P. 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. Tariffs. 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 80 Table of Contents 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. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.