Notable Earnings: Daktronics Inc. (NASDAQ:DAKT)

Daktronics Inc. (NASDAQ:DAKT) reported earnings for the three months ended April 2016 on June 01, 2016. The company earned $-0.07 per share on revenue of $138.46M. Analysts had been modeling earning per share of $0.08 with $156.17M in revenue.

Daktronics Inc. (NASDAQ:DAKT) reported fiscal 2016 fourth quarter net sales of $138.5 million, operating loss of $3.7 million, and net loss of $2.9 million, or $(0.07) per diluted share, compared to net sales of $158.1 million, operating income of $7.0 million, and a net income of $3.8 million, or $0.09 per diluted share, for the fourth quarter of fiscal 2015.  Fiscal 2016 fourth quarter orders were $143.2 million compared to $196.1 million for the fourth quarter of fiscal 2015.  Backlog at the end of the fiscal 2016 fourth quarter was $181.2 million, compared to a backlog of $190.5 million a year earlier and $176.3 million at the end of the third quarter of fiscal 2016.

Net sales, operating income, net income, and earnings per share for the fiscal year ended April 30, 2016, were $570.2 million, $2.5 million, $2.1 million and $0.05 per diluted share, respectively.  This compares to $615.9 million, $31.3 million, $20.9 million and $0.47 per diluted share, respectively, for fiscal 2015.  Fiscal 2016 was a 52-week year and fiscal 2015 was a 53-week year.  The extra week of fiscal 2015 fell within the first quarter, resulting in a 52-week versus a 53-week year end comparison.

Free cash flow, defined as cash provided from or used in operating activities less capital expenditures, was negative $3.6 million for fiscal 2016, as compared to a positive free cash flow of $35.4 million for fiscal 2015.  Cash provided by operations was $13.3 million for fiscal 2016, compared to $53.2 million for fiscal 2015.  Net investment in property and equipment was $16.9 million for fiscal 2016, as compared to $17.8 million for fiscal 2015.  Cash, restricted cash, and marketable securities at the end of the fourth quarter of fiscal 2016 were $53.2 million, which compares to $83.1 million at the end of the fourth quarter of fiscal 2015.

Sales and orders for the fourth quarter of fiscal 2016 decreased by 12.4 percent and 27.0 percent, respectively, as compared to the fourth quarter of fiscal 2015.  The orders decline was due to International and Live Events multi-million dollar projects that were booked during the fourth quarter of fiscal 2015, while no orders of similar size occurred during the fourth quarter of fiscal 2016.  Sales decreased primarily due to lighter International and Commercial billboard and spectacular demand.  Operating loss was 2.6 percent of sales for the quarter due to increased warranty impact for the quarter and lower production levels.

Daktronics Inc. earnings per share showed a decreasing trend of -7.4% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 45%.Analysts project EPS growth over the next 5 years at 20%. It has EPS annual growth over the past 5 fiscal years of 36.6% when sales grew 9.4. It reported 4.8% sales growth, and -448% EPS decline in the last quarter.

The stock is trading at $6.44, up 8.78% from 52-week low of $5.92. The stock trades down -45.93% from its peak of $12.35 and 16.46% above the consensus price target of $7.5. Its volume clocked up at 0.5 million shares which is higher than the average volume of 0.31 million shares. Its market capitalization currently stands at $283.97M.

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