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What changed in DAKTRONICS INC /SD/'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of DAKTRONICS INC /SD/'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+323 added−269 removedSource: 10-K (2025-06-25) vs 10-K (2024-06-26)

Top changes in DAKTRONICS INC /SD/'s 2025 10-K

323 paragraphs added · 269 removed · 218 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeInformation contained on our website is not deemed to be incorporated by reference into this Report or filed with the SEC. Reportable Segments We focus our sales and marketing efforts on markets, geographical regions and products. Our five business segments consist of four domestic business units and the International business unit.
Biggest changeOur reports and other information filed with the SEC are made available as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. Information contained on our website is not deemed to be incorporated by reference into this Report or filed with the SEC.
We facilitate company-wide teams to inspire a more inclusive culture and achieve company goals through teamwork. We encourage each employee to proactively and continuously build self-awareness, understanding of aspects of diversity, and openness to others’ experiences and perspectives. We also foster and encourage self development and a continuous learning environment to build talent.
We facilitate Company-wide teams to inspire a more inclusive culture and achieve company goals through teamwork. We encourage each employee to proactively and continuously build self-awareness, an understanding of aspects of diversity, and an openness to others’ experiences and perspectives. We also foster and encourage self-development and a continuous learning environment to build talent.
The Company began with the design and manufacture of electronic voting systems for state legislatures. In 1971, Daktronics developed the patented Matside® wrestling scoreboard, the first product in the Company's growing and evolving line. In 1994, Daktronics became a publicly-traded company and invested in display technologies and new markets.
The Company began with the design and manufacture of electronic voting systems for state legislatures. In 1971, Daktronics developed the patented Matside® wrestling scoreboard, the first product in the Company’s growing and evolving line of scoreboard products. In 1994, Daktronics became a publicly-traded company and invested in display technologies and new markets.
It can be used to control a single message display or can scale up to provide a secure, cloud-based control center for large networks of message displays. ITS Dynamic Message Signs ("DMS"). DMS products include a wide range of LED displays for road management applications.
It can be used to control a single message display or can scale up to provide a secure, cloud-based control center for large networks of message displays. ITS Dynamic Message Signs (“DMS”). DMS products include a wide range of LED displays for road management applications.
Segment Reporting" of the Notes to our Consolidated Financial Statements included in this Form 10-K for our primary markets and customers of each business unit. Product Order Backlog Backlog represents the dollar value of orders for integrated electronic display systems and related products and services which are expected to be recognized in net sales in the future.
Segment Reporting” of the Notes to our Consolidated Financial Statements included in this Form 10-K for our primary markets and customers of each business unit. Product Order Backlog Backlog represents the dollar value of orders for integrated electronic display systems and related products and services which are expected to be recognized in net sales in the future.
We engage in a full range of activities: marketing and sales, engineering and product design and development, manufacturing, technical contracting, professional services, and customer service and support. We were founded in 1968 by Drs. Aelred Kurtenbach and Duane Sander, professors of electrical engineering at South Dakota State University in Brookings, South Dakota.
We engage in a full range of activities: marketing and sales, engineering and product design and development, manufacturing, technical contracting, professional services, and customer service and support. We were founded in 1968 by Dr. Aelred Kurtenbach and Dr. Duane Sander, professors of electrical engineering at South Dakota State University in Brookings, South Dakota.
Uniquely configured orders can include several displays, controllers, and subcontracted structure builds, each of which can occur on varied schedules per the customer's needs. Our third fiscal quarter sales and profit levels are lighter than other quarters due to the seasonality of our sports business, construction cycles, and the reduced number of production days due to holidays in the quarter.
Uniquely configured orders can include several displays, controllers, and subcontracted structure builds, each of which can occur on varied schedules per the customer’s needs. Our third fiscal quarter sales and profit levels are lower than in other quarters because the seasonality of our sports business, construction cycles, and the reduced number of production days due to holidays in the quarter.
Orders and backlog are not metrics defined by accounting principles generally accepted in the United States of America ("GAAP"), and our methodology for determining orders and backlog may vary from the methodology used by other companies in determining their orders and backlog amounts.
Orders and backlog are not metrics defined by accounting principles generally accepted in the United States of America (“GAAP”), and our methodology for determining orders and backlog may vary from the methodology used by other companies in determining their orders and backlog amounts.
We employ and contract with engineers and technicians in the areas of mechanical and electrical 2 Table of Contents design; applications engineering; software design; quality design; and customer and product support. Product managers assigned to each product family assist our sales staff in training and implementing product improvements which ensures each product is designed for maximum reliability and serviceability.
We employ and contract with engineers and technicians in the areas of mechanical and electrical design; applications engineering; software design; quality design; and customer and product support. Product managers assigned to each product family assist our sales staff in training and implementing product improvements which ensures each product is designed for maximum reliability and serviceability.
Some competitors have more capital, governmental funding, supply chain access, and other resources, which may allow them to take advantage of acquisition opportunities or adapt more quickly to changes in customer requirements. Other competitors use sponsorships as a way to win business at a particular location or market.
Some competitors have more capital, governmental funding, supply chain access, 7 Table of Contents and other resources, which may allow them to take advantage of acquisition opportunities or adapt more quickly to changes in customer requirements. Other competitors use sponsorships as a way to win business at a particular location or market.
Intellectual Property We own or hold licenses to use numerous patents, copyrights, and trademarks on a global basis. Our policy is to protect our competitive position by filing United States and international patent applications to protect technology and improvements 5 Table of Contents that we consider important to the development of our business.
Intellectual Property We own or hold licenses to use numerous patents, copyrights, and trademarks on a global basis. Our policy is to protect our competitive position by filing United States and international patent applications to protect technology and improvements that we consider important to the development of our business.
Periodically, we enter into pricing agreements or purchasing contracts under which we agree to purchase a minimum amount of product in exchange for guaranteed price terms over the length of the contract, which generally does not exceed one year. We sometimes prepay for future supply.
Periodically, we enter into pricing agreements or 5 Table of Contents purchasing contracts under which we agree to purchase a minimum amount of product in exchange for guaranteed price terms over the length of the contract, which generally does not exceed one year. We sometimes prepay for future supply.
The Galaxy® product line is a family of full-matrix displays, available in both indoor and outdoor models and controlled with the Venus® Control Suite. Galaxy® displays are full color or monochrome with varying pixel spacing depending on color, size and viewing distance. Galaxy® displays can display text, graphics and animation, as well as prerecorded video clips.
The Galaxy® product line is a family of full-matrix displays, available in both indoor and outdoor models and controlled with the VCS. Galaxy® displays are full color or monochrome with varying pixel spacing depending on color, size, and viewing distance. Galaxy® displays can display text, graphics and animation, as well as prerecorded video clips.
Our products are comprised of the following product families: • Video displays/video walls • Scoreboards and timing systems • LED Message displays and signs • ITS (intelligent transportation systems) dynamic message signs • Mass Transit displays • Sound systems • Digital billboards • Digital street furniture • Digit and price displays 3 Table of Contents • Indoor dynamic messaging systems and indoor liquid crystal display ("LCD") signs • Software and controllers including Venus® Control Suite, Show Control Studio and Show Control Live Each of these product families is described below: Video Displays/Video Walls.
Our products are comprised of the following product families: • Video displays/video walls • Scoreboards and timing systems • LED Message displays and signs • ITS (intelligent transportation systems) dynamic message signs 3 Table of Contents • Mass Transit displays • Sound systems • Digital billboards • Digital street furniture • Digit and price displays • Indoor dynamic messaging systems • Software and controllers including Venus® Control Suite (“VCS”), Show Control Studio, and Show Control Live Each of these product families is described below: Video Displays/Video Walls.
The loss of a key supplier, part unavailability, tariff changes, price changes, war, transportation disruptions, or other geopolitical impacts to trade or transport, or defects in the supplied material or component could have an adverse impact on our business and operations. Our sourcing group is responsible to maintain and implement strategies to mitigate these evolving risks.
The loss of a key supplier, part unavailability, tariff changes, price changes, war, transportation disruptions, or other geopolitical impacts to trade or transport, or defects in the supplied material or component could have an adverse impact on our business and operations. Our sourcing group is responsible for maintaining and implementing strategies to mitigate these evolving risks.
They are used primarily to convey information and on-premises advertising to consumers. The Venus® Control Suite software is used to control the creation of messages and graphic sequences for uploading to the Galaxy® displays. This software is designed to be user friendly and applicable to all general advertising or message applications.
They are used primarily to convey information and on-premise advertising to consumers. The VCS software is used to control the creation of messages and graphic sequences for uploading to the Galaxy® displays. This software is designed to be user friendly and applicable to all general advertising or message applications.
Order and backlog levels provide management and investors additional details surrounding the results of our business activities in the marketplace and highlight fluctuations caused by seasonality and multi-million dollar projects. Management uses orders to evaluate market share and performance in the competitive environment. Management uses backlog information for capacity and resource planning.
Order and backlog levels provide management and investors additional details surrounding the results of our business activities in the marketplace and highlight fluctuations caused by seasonality and multimillion-dollar projects. Management 6 Table of Contents uses orders to evaluate market share and performance in the competitive environment. Management uses backlog information for capacity and resource planning.
Our customers are important to us, and we strive to serve them over the long-term to earn their future business. The loss of one or more customers could have an adverse effect on us. See "Note 3.
Our customers are important to us, and we strive to serve them over the long-term to earn their future business. The loss of one or more customers could have a material adverse effect on us. See “Note 3.
It can be used in any application where the intended message is created in advance and scheduled to play at a predetermined time. It is available in an on-premise or hosted cloud-based configuration and is capable of supporting a single display or scaling to support many displays.
It can be used in any application, including Content and Advertising Software as a Service (“SaaS”), where the intended message is created in advance and scheduled to play at a predetermined time. It is available in an on-premise or hosted cloud-based configuration and is capable of supporting a single display or scaling to support many displays.
Order fulfillment timing is dependent on customer schedules, supply chain conditions, and our capacity availability. We believe order information is useful to investors because it provides an indication of our market share and future revenues. Our product order backlog as of April 27, 2024 was $316.9 million as compared to $400.7 million as of April 29, 2023.
Order fulfillment timing is dependent on customer schedules, supply chain conditions, and our capacity availability. We believe order information is useful to investors because it provides an indication of our market share and future revenues. Our product order backlog as of April 26, 2025 was $341.6 million as compared to $316.9 million as of April 27, 2024.
Our obligations to conduct site work, including installations or repair, require us to comply with environmental rules and regulation, wage requirements, and safety standards. Often, certain contracts require us to have accident prevention programs that provide for frequent and regular inspection of the jobsites, materials, and equipment by competent persons.
Our obligations to conduct site work, including installations or repairs, require us to comply with environmental rules and regulations, wage requirements, and safety standards. Often, certain contracts require us to have accident prevention programs that provide for frequent and regular inspections of the jobsites, materials, and equipment by qualified persons.
We have continued these investments and have supported our long-term customer relationships to grow from a small company operating out of a garage to a world leader in the display industry. We currently employ 2,831 people globally. We are headquartered at 201 Daktronics Dr., Brookings, SD 57006, telephone 605-692-4200.
We have continued these investments and have supported our long-term customer relationships to grow from a small company operating out of a garage to a world leader in the display industry. We currently employ 2,702 people globally. 1 Table of Contents We are headquartered at 201 Daktronics Dr., Brookings, SD 57006, telephone 605-692-4200. Our Internet address is https :// www.daktronics.com.
We provide our employees and their families with access to a variety of health programs, including benefits that support their physical and mental health. As of April 27, 2024, we employed approximately 2,520 full-time employees and 311 part-time and temporary employees.
We provide our employees and their families with access to a variety of health programs, including benefits that support their physical and mental health. As of April 26, 2025, we employed approximately 2,422 full-time employees and 280 part-time and temporary employees.
Countries and states and/or localities in the United States can issue lock down orders impacting the availability of employees, third parties, suppliers, customers, and other services we need to operate our business. We believe we are in material compliance with government and other regulatory requirements.
Countries and states and/or localities in the United States can issue lock down orders impacting the availability of employees, third parties, suppliers, customers, and other services we need to operate our business.
Our global supply chain and sales distribution channels subject us to various trade compliance regulations. These requirements can include certification of country of origin, classification within the various tariff codes and trade agreements; compliance with other specific product or country import/export regulations; and payment of certain import or export tariffs, duties, or taxes.
These requirements can include certification of country of origin, classification within the various tariff codes and trade agreements; compliance with other specific product or country import/export regulations; and payment of certain import or export tariffs, duties, or taxes.
A key strategy of ours is to increase standardization and commonality of parts and manufacturing processes across product lines through the use of product platforms to increase efficiencies. Other strategies include supplier management programs and lean manufacturing techniques. For more details on our facilities, see "Part II, Item 2. Properties". Technical Contracting.
A key strategy of ours is to increase standardization and commonality of parts and manufacturing processes across product lines through the use of product platforms to increase efficiencies. Other strategies include supplier management programs, reduction in complexity focus, and lean manufacturing techniques. For more details on our facilities, see “Part I, Item 2. Properties” in this Form 10-K. Technical Contracting.
Installations often involve a network of displays located on railway platforms, at bus stations, or on concourses within a transportation hub to guide travelers to their intended destination. Sound Systems. Our sound systems include both standard and custom options.
Mass Transit Displays. Our Mass Transit products include a wide range of LCD and LED display solutions for public transportation applications. Installations often involve a network of displays located on railway platforms, at bus stations, or on concourses within a transportation hub to guide travelers to their intended destination. Sound Systems. Our sound systems include both standard and custom options.
Item 1. BUSINESS Business Overview Daktronics, Inc. and its subsidiaries (the “Company”, “Daktronics”, “we”, “our”, or “us”) are industry leaders in designing and manufacturing electronic scoreboards, programmable display systems and large screen video displays for sporting, commercial and transportation applications. We serve our customers by providing high quality standard display products as well as custom-designed and integrated systems.
Item 1. BUSINESS Business Overview Daktronics is an industry leader in designing and manufacturing electronic scoreboards, programmable display systems, large screen video displays for sporting, and commercial and transportation applications. We serve our customers by providing high quality standard display products as well as custom-designed and integrated systems.
For applications that require both scheduled content and live video or real time content, a control solution can combine the capabilities of Venus® Control Suite with the capabilities of the Show Control Software Suite to create a powerful solution that enables customers to easily manage content on their displays.
For applications that require both scheduled content and live video or real-time content, a control solution can combine the capabilities of VCS with the capabilities of the Show Control Software Suite to create a powerful solution that enables customers to easily manage content on their displays. Content includes media, scoring, statistics, timing, advertising, way-finding information, playback loops, and entertainment-type visualizations.
Of these employees, approximately 1,149 were in manufacturing, 482 were in sales and marketing, 570 were in customer service, 387 were in engineering, and 243 were in general and administrative. None of our employees are represented by a collective bargaining agreement. We believe employee relations are good.
Of these employees, approximately 996 were in manufacturing, 480 were in sales and marketing, 565 were in customer service, 405 were in engineering, and 256 were in general and administrative. None of our employees are represented by a collective bargaining agreement. We believe our relations with our employees are good.
We invest in our development and our affiliates to increase differentiated product platforms, advance our software architecture and offerings, support customer requirements, advance new competitive narrow pixel and micro-electronic technologies, and advance sustainable technologies and related products.
We invest in our development and our affiliates to increase differentiated product platforms, advance our software architecture and offerings, support customer requirements, advance new competitive narrow pixel and micro-electronic technologies, and advance sustainable technologies and related products. During fiscal 2025, our design teams focused on advancing product features aligned with customer needs and reducing product costs.
Fuelight™ digit displays are specifically designed for the petroleum industry, offering high visibility and quick fuel price updates using the Fuelink™ control software. Indoor Dynamic Messaging Systems and LCD screens. Our ADFLOW DMS™ systems include indoor networked solutions for retailers, convenience stores and other businesses.
Fuelight™ digit displays are specifically designed for the petroleum industry, offering high visibility and quick fuel price updates using the Fuelink™ control software. Indoor Dynamic Messaging Systems. Our Indoor Dynamic Messaging Solutions, including our legacy ADFLOW DMS™ systems, are designed for retailers and convenience stores to effectively deliver advertising campaigns and information through LED or LCD technologies.
The Vanguard® family of dynamic message displays is typically used to direct traffic and inform motorists. These displays are used over freeways, on arterial roads, near bridges, at toll booths and in other locations.
The Vanguard® family of dynamic message displays is typically used to direct traffic and inform motorists. 4 Table of Contents These displays are used over freeways, on arterial roads, near bridges, at toll booths, and in other locations. We have also developed a Vanguard® control system for these displays to help transportation agencies manage large networks of displays.
We believe that our ability to compete depends upon customer centric product and service quality and features, technical expertise, service breadth, and cost-effective solutions. 7 Table of Contents Research and Development Our experience in engineering, process design, and product and service design and development capabilities and investments made in affiliates are very important factors in continuing to develop, produce, and offer the most up-to-date digital displays and control system solutions desired by the market.
Research and Development Our experience in engineering, process design, product and service design, development capabilities, and investments made in affiliates are very important factors in continuing to develop, produce, and offer the most up-to-date digital displays and control system solutions desired by the market.
We also utilize resellers outside North America for large integrated system sales where we do not have a direct sales presence. We support our resellers through direct mail/email advertising, social media campaigns, trade journal advertising, product and installation training, trade show exhibitions, and accessibility to our regional sales or service teams and demonstration equipment. Engineering and Product Design and Development.
We support our resellers through direct mail/email advertising, social media campaigns, trade journal advertising, product and installation training, trade show exhibitions, and accessibility to our regional sales or service teams and demonstration equipment. 2 Table of Contents Engineering and Product Design and Development.
Our manufacturing facilities and products comply with industry specific requirements, including environmental rules and regulations and safety standards. These requirements include quality, manufacturing process controls, manufacturing documentation, supplier certification of raw materials, and various safety tests. Our production processes require the storage, use and disposal of a variety of hazardous chemicals under applicable laws.
These requirements include quality, manufacturing process controls, manufacturing documentation, supplier certification of raw materials, and various safety tests. Our production processes require the storage, use, and disposal of a variety of hazardous chemicals under applicable laws. Our global supply chain and sales distribution channels subject us to various trade compliance regulations.
Globally, our products are also subject to various regulations and standards including electromagnetic interference, electromagnetic compatibility, electrical safety, and flammability standards. We design and have our products tested for these regulations; however, these factors may prevent or inhibit us from selling products to some prospective customers in certain geographies.
We design and have our products tested for these regulations; however, these factors may prevent or inhibit us from selling products to some prospective customers in certain geographies. Our manufacturing facilities and products comply with industry specific requirements, including environmental rules and regulations and safety standards.
Management’s Discussion and Analysis of Financial Condition and Results of Operations" and "Note 3. Segment Reporting" of the Notes to our Consolidated Financial Statements included in this Form 10-K.
Financial information concerning these segments is set forth in this Form 10-K in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Note 3. Segment Reporting” of the Notes to our Consolidated Financial Statements included in this Form 10-K.
Content includes media, scoring, statistics, timing, advertising, way-finding information, playback loops and entertainment type visualizations. Our Show Control Suite is an easy-to-use and powerful integrated solution to achieve a dynamic, seamless and fully immersive game-day production. Show Control Studio offers products designed for display control, while Show Control Live is designed for video production.
Our Show Control Suite is an easy-to-use and a powerful integrated solution to achieve a dynamic, seamless, and fully immersive game-day production. Show Control Studio offers products designed for display control, while Show Control Live is designed for video production. Raw Materials Materials used in the production of our video display and control systems are sourced from around the world.
In addition, our products compete with other forms of advertising, such as television, print media, digital and mobile, and fixed display signs.
In addition, our products compete with other forms of advertising, such as television, print media, digital and mobile, and fixed display signs. We believe that our ability to compete depends upon customer-centric product and service quality and features, technical expertise, service breadth, and cost-effective solutions.
We source some of our materials from a single-source or a limited number of suppliers due to the proprietary nature of the materials.
Examples of the materials we use in production include LEDs, integrated circuits, printed circuit boards, power supplies, plastics, aluminum, and steel. We source some of our materials from a single-source or a limited number of suppliers due to the proprietary nature of the materials.
Government and Other Regulation In the United States and other countries, various laws, regulations and ordinances related to our products and controllers restrict the installation of outdoor signs and displays, particularly in the commercial and transportation markets. These laws and regulations impose greater restrictions on electronic displays versus non-electronic displays due to alleged concerns over aesthetics or driver safety.
The timing of backlog fulfillment may be impacted by project delays resulting from factors outside of our control, including customer site conditions. Government and Other Regulation In the United States and other countries, various laws, regulations, and ordinances related to our products and controllers restrict the installation of outdoor signs and displays, particularly in the commercial and transportation markets.
The four domestic business units consist of Commercial, Live Events, High School Park and Recreation, and Transportation, all of which include the geographic territories of the United States and Canada. Financial information concerning these segments is set forth in this Form 10-K in "Part II, Item 7.
Reportable Segments We focus our sales and marketing efforts on markets, geographical regions, and products. Our five business segments consist of four domestic business units and the International business unit. The four domestic business units consist of Commercial, Live Events, High School Park and Recreation, and Transportation, all of which include the geographic territories of the United States and Canada.
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Our Internet address is https:// www.daktronics.com. 1 Table of Contents Available Information Our annual, quarterly and current reports and any amendments to those reports are freely available in the "Investor Relations" section of our website.
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During fiscal 2025, we formed a Business Transformation Office (“BTO”), which has undertaken a comprehensive review of the Company’s business, strategy, and operations and is developing a set of strategic initiatives, enabled in part by the Company’s previously announced digital transformation, to provide even better outcomes for customers, deeper penetration of the Company’s current and adjacent market verticals, above-market growth, and more efficient delivery, fulfillment, and service.
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We post each of these documents on our website as soon as reasonably practicable after it is electronically filed with the Securities and Exchange Commission (the "SEC"). These reports and other reports, proxy statements, and electronic filings are also found on the SEC’s website at www.sec.gov.
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Available Information We file annual, quarterly and current reports, proxy statements, and other information with the SEC.
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We have also developed a Vanguard® control system for these displays to help transportation agencies manage large networks of displays. 4 Table of Contents Mass Transit Displays. Our Mass Transit products include a wide range of LCD and LED display solutions for public transportation applications.
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Daktronics makes available, free of charge on the “Investor Relations” section of our website at https://investor.daktronics.com/ our annual reports on Form 10-K; quarterly reports on Form 10-Q; current reports on Form 8-K; Forms 3, 4 and 5 filed on behalf of directors and executive officers; and any amendments to those reports filed or furnished pursuant to the Exchange Act.
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These solutions, using either LED or LCD technologies, allow customers to broadcast advertising campaigns and other information through the software, media players and visual hardware. Software and Controllers including Venus ® Control Suite. The Venus® Control Suite is our platform for scheduled control capability.
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We also utilize resellers outside North America for large integrated system sales where we do not have a direct sales presence.
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Raw Materials Materials used in the production of our video display and control systems are sourced from around the world. Examples of the materials we use in production include LEDs, integrated circuits, printed circuit boards, power supplies, plastics, aluminum, and steel.
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We are now transitioning these clients to our advanced VCS system. VCS builds on the foundation of DMS by offering enhanced features, improved scalability, and more integrated software capabilities, ensuring that customers continue to receive cutting-edge support as we evolve beyond DMS.
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The decrease in backlog, to more historical levels, is a result of fulfilling orders at a greater pace in fiscal 2024 as supply 6 Table of Contents chain conditions stabilized and production lead times improved, utilizing our increased capacity, and order pace returning to more normalized rates.
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This strategic shift reflects our commitment to innovation and customer satisfaction in delivering dynamic messaging solutions tailored for modern business environments. Software and Controllers including VCS. The VCS is our platform for scheduled control capability.
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We expect to fulfill the backlog as of April 27, 2024 within the next 24 months . The timing of backlog fulfillment may be impacted by project delays resulting from customer site conditions, which are outside our control.
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Historically, our backlog varies due to the seasonality of our business, the timing of large projects, and customer delivery schedules for these orders. The increase in backlog is a result of more order bookings with the continued market adoption of digital display technology. We expect to fulfill the backlog as of April 26, 2025 within the next 24 months .
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During fiscal 2024, our design teams focused on investing in product design and development to improve our video technology over a wide range of pixel pitches and sustainable technologies for both indoor and outdoor applications and to advance micro-LED devices and placement processes.
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These laws and regulations impose greater restrictions on electronic displays versus non-electronic displays due to alleged concerns over aesthetics or driver safety. Globally, our products are also subject to various regulations and standards including electromagnetic interference, electromagnetic compatibility, electrical safety, and flammability standards.
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These new or improved technologies are focused on varied pixel density for image quality and use, expanded product line offerings for our various markets and geographies, improved quality and reliability, and improved cost points.
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Although there is no assurance that existing or future government laws applicable to our operations, services or products will not have a material adverse effect on our capital expenditures, results of operations and competitive position, we do not currently anticipate material expenditures for compliance with government regulations. We believe we are in material compliance with government and other regulatory requirements.
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We focused these efforts on both standard product and control offerings and in new emerging areas, including micro-LED products and new control capabilities.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese provisions make it more difficult for our shareholders to take some corporate actions and include provisions relating to: • the ability of our Board of Directors, without shareholder approval, to authorize and issue shares of stock with voting, liquidation, dividend and other rights and preferences that are superior to our common stock; • the classification of our Board of Directors, which effectively prevents shareholders from electing a majority of the directors at any one meeting of shareholders; • the adoption of a shareholder rights agreement providing for the exercise of junior participating preferred stock purchase rights when a person becomes the beneficial owner of 20 percent or more of our outstanding common stock and upon the occurrence of certain similar events (subject to certain exceptions); • under the SD Act, limitations on the voting rights of shares acquired in specified types of acquisitions and restrictions on specified types of business combinations; and • under the SD Act, prohibitions against engaging in a “business combination” with an “interested shareholder” for a period of four years after the date of the transaction in which the person became an interested shareholder unless the business combination is duly approved.
Biggest changeThese protections under Delaware law and our governance documents, which may make it more difficult for our stockholders to take certain corporate actions related to a change in control of the Company, include, without limitation: • the ability of our Board of Directors (the “Board” or the “Board of Directors”), without stockholder approval, to authorize and issue shares of stock with voting, liquidation, dividend, and other rights and preferences that are superior to our common stock; • the classification of our Board, which effectively prevents stockholders from electing a majority of the directors at any one meeting of stockholders; • the requirement for stockholders to provide advance notice to raise business matters or nominate directors at annual meetings of stockholders; • the prohibition of cumulative voting in the election of directors; • under the DGCL, stockholders who do not approve a change in control cannot demand the fair value of their shares or any premium for such shares; and • in general, Section 203 of the DGCL (the “Delaware Business Combination Statute”) prohibits us from engaging in a Business Combination (as defined below) with and Interested Stockholder (as defined below) for a period of three years after the date of the transaction in which the person became an Interested Stockholder unless: (i) our Board approved either the Business Combination or the transaction in which the stockholder became an Interested Stockholder prior to the date the interested stockholder became an Interested Stockholder; (ii) the Interested Stockholder acquires at least 85 percent of our common stock (excluding shares owned by our directors, officers, and certain participants in employee stock purchase plans) in the transaction in which it became an Interested Stockholder; or (iii) the business combination is approved by our Board and the affirmative vote of at least two-thirds of the votes entitled to be cast by disinterested stockholders at an annual or special meeting of our stockholders.
In addition to increased costs, these factors could delay delivery of products, which may result in the assessment of liquidated damages or other contractual damages that could negatively impact our profits.
In addition to increased costs, these factors could delay delivery of products, which may result in the assessment of liquidated damages or other contractual damages that could negatively impact our profits.
Global conditions include political developments; economic changes; unfavorable trading policies; difficulties in staffing and managing global operations; changes in foreign and domestic governmental regulations or requirements, treaty and trade relationships; the imposition of government orders that differ among jurisdictions, including mandatory closures, work-from-home and lock-down orders and social distancing protocols; changes in monetary and fiscal policies; changes in laws and regulations; or other activities of the United States and other foreign governments, agencies, and similar organizations.
Global conditions include political developments; economic changes; unfavorable trading policies; difficulties in staffing and managing global operations; changes in foreign and domestic governmental regulations or requirements; or treaty and trade relationships; the imposition of government orders that differ among jurisdictions, including mandatory closures, work-from-home, lock-down orders, and social distancing protocols; changes in monetary and fiscal policies; changes in laws and regulations; or other activities of the United States and other foreign governments, agencies, and similar organizations.
Both advocates and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives. In addition, this emphasis on ESG matters has resulted and may result in the adoption of new laws and regulations, including new reporting requirements.
Both advocates of and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives. In addition, this emphasis on ESG matters has resulted and may result in the adoption of new laws and regulations, including new reporting requirements.
During fiscal year 2023, we concluded that the carrying value of the Live Events and International reporting units exceeded their respective fair values and consequently recorded a $4.6 million impairment charge. We may fail to continue to attract, develop and retain key management personnel, which could negatively impact our operating results.
During fiscal year 2023, we concluded that the carrying value of the Live Events and International reporting units exceeded their respective fair values and consequently recorded a $4.6 million impairment charge. We may fail to continue to attract, develop, and retain key personnel, including management personnel, which could negatively impact our operating results.
These estimates and assumptions affect the timing and amount of net sales, costs, and profits or losses in applying the principles to contracts with customers under over time method of recording revenue using the cost-to-cost input method; credit losses for accounts receivables and contract assets; the valuation of inventory; estimated amounts for warranty and product maintenance agreement costs; the calculation of the fair value of our notes payable; the calculation and valuation of our investments and deferred tax assets; the valuation of our investment in affiliates or unconsolidated subsidiaries; fair value estimates used in goodwill and long-term assets testing; estimating the impact of uncertainties in the application of complex tax laws; and calculating share-based compensation expense.
These estimates and assumptions affect the timing and amount of net sales, costs, and profits or losses in applying the principles to contracts with customers under the over time method of recording revenue using the cost-to-cost input method; credit losses for accounts receivables and contract assets; the valuation of inventory; estimated amounts for warranty and product maintenance agreement costs; the calculation and valuation of our investments and deferred tax assets; the valuation of our investment in affiliates or unconsolidated subsidiaries; fair value estimates used in goodwill and long-term assets testing; estimating the impact of uncertainties in the application of complex tax laws; and calculating share-based compensation expense.
An interruption from our suppliers of raw materials or components could affect our ability to manufacture our products until a new source of supply is located and, therefore, could have a material adverse effect on our business, financial condition or results of operations.
An interruption from our suppliers of their supply of raw materials or components could affect our ability to manufacture our products until a new source of supply is located and, therefore, could have a material adverse effect on our business, financial condition, or results of operations.
The financial, management and other risks and challenges associated with these activities include, but are not limited to, the following: • diversion of management attention; • difficulty with integrating acquired businesses; 14 Table of Contents • adverse impact on overall profitability if the expanded operations or investments in affiliates do not achieve the strategic benefits forecasted; • potential loss or adverse relationship with or a change of key employees, customers, or suppliers of the acquired business; • inability to effectively manage our expanded operations; • difficulty with the integration of different corporate cultures; • personnel issues; • increased expenses; • assumption of unknown liabilities and indemnification obligations; • potential disputes with the buyers or sellers; • the time involved in evaluating or modifying the financial systems of an acquired business and the establishment of appropriate internal controls; • incorrect estimates made in the accounting for the transaction that cause misstatements of acquisition assets and liabilities; and • incorrect assumptions and estimates made in accounting for the value of such asset.
The financial, management and other risks and challenges associated with these activities include, but are not limited to, the following: • diversion of management attention; • difficulty with integrating acquired businesses; • adverse impact on overall profitability if the expanded operations or investments in affiliates do not achieve the strategic benefits forecasted; • potential loss or adverse relationship with or a change of key employees, customers, or suppliers of the acquired business; • inability to effectively manage our expanded operations; • difficulty with the integration of different corporate cultures; • personnel issues; • increased expenses; • assumption of unknown liabilities and indemnification obligations; • potential disputes with the buyers or sellers; • the time involved in evaluating or modifying the financial systems of an acquired business and the establishment of appropriate internal controls; • incorrect estimates made in the accounting for the transaction that cause misstatements of acquisition assets and liabilities; and • incorrect assumptions and estimates made in accounting for the value of such asset.
In addition, intellectual property rights of others also have an impact on our ability to offer some of our products and services for specific uses or at competitive prices. Competitors' patents or other intellectual property may limit our ability to offer products or services to our customers.
In addition, intellectual property rights of others have an impact on our ability to offer some of our products and services for specific uses or at competitive prices. Competitors’ patents or other intellectual property may limit our ability to offer products or services to our customers.
If we fail to timely and effectively obtain shipments of raw materials and components from our suppliers or to send shipments of our manufactured product to our customers, our business and operating results could be adversely affected.
If we fail to timely and effectively obtain shipments of raw materials and components from our suppliers or to send shipments of our manufactured product to our customers, our business and operating results could be materially and adversely affected.
As privacy, data protection and information security laws, including data localization laws, are interpreted and applied, compliance costs may increase, particularly in the context of ensuring that adequate data protection and data transfer mechanisms are in place.
As privacy, data protection, and information security laws, including data localization laws, are interpreted and applied, our compliance costs may increase, particularly in the context of ensuring that adequate data protection and data transfer mechanisms are in place.
Our actual results could differ from the estimates and assumptions we make to prepare our financial statements, which could have a material impact on our financial condition and results of operations.
Our actual results could differ from the estimates and assumptions we make to prepare our financial statements, which could have a material adverse impact on our financial condition and results of operations.
Violations of anti-corruption, anti-bribery and trade control laws and sanctions regulations are punishable by civil penalties, including fines; the denial of export privileges; injunctions; asset seizures; debarment from government contracts and revocations or restrictions of licenses; as well as criminal fines and imprisonment, and could harm our reputation, create negative shareholder sentiment and affect our share value.
Violations of anti-corruption, anti-bribery, and trade control laws and sanctions regulations are punishable by civil penalties, including fines; the denial of export privileges; injunctions; asset seizures; debarment from government contracts and revocations or restrictions of licenses; as well as criminal fines and imprisonment, and could harm our reputation, create negative stockholder sentiment, and affect our share value.
Our future income taxes could be materially adversely affected by changes in the amount or mix 18 Table of Contents of earnings amongst countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax rates or the interpretation of tax rules and regulations in jurisdictions in which we do business, changes in tax laws, or the outcome of income tax audits and any related litigation.
Our future income taxes could be materially adversely affected by changes in the amount or mix of earnings amongst countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax rates or the interpretation of tax rules and regulations in jurisdictions in which we do business, 19 Table of Contents changes in tax laws, or the outcome of income tax audits and any related litigation.
Our utilization of a complex supply chain for raw material and component imports and the global distribution of our products makes us vulnerable to many risks, including, among other things, shortages or delays because of work restrictions for various reasons like pandemic restrictions; supply chain implications due to war or other geopolitical impacts on supply chains; risks of damage, destruction or confiscation of products while in transit to and from our manufacturing facilities; organized labor strikes and work stoppages, such as labor disputes or related employee worker unavailability, that could disrupt operations at ports-of-entry; transportation and other delays in shipments as a result of heightened security screening and inspection processes or other port-of-entry limitations or restrictions; unexpected or significant port congestion; lack of freight availability; and freight cost increases.
Our utilization of a complex supply chain for raw material and component imports and the global distribution of our products makes us vulnerable to many risks, including, among other things, shortages or delays because of work restrictions; supply chain implications due to war or other geopolitical impacts on supply chains; risks of damage, destruction, or confiscation of products while in transit to and from our manufacturing facilities; organized labor strikes and work stoppages, such as labor disputes or related employee worker unavailability, that could disrupt operations at ports-of-entry; transportation and other delays in shipments as a result of heightened security screening and inspection processes or other port-of-entry limitations or restrictions; unexpected or significant port congestion; lack of freight availability; and freight cost increases.
Unexpected events, including natural disasters, weather events, war, terrorist acts, and pandemics, may increase our cost of doing business or disrupt our operations. We operate manufacturing operations in three locations in the United States - Brookings, South Dakota, Sioux Falls, South Dakota, and Redwood Falls, Minnesota, and we have production facilities in Ireland and China.
Unexpected events, including natural disasters, weather events, wars, terrorist acts, and pandemics, may increase our cost of doing business or disrupt our operations. We operate manufacturing operations in three locations in the United States - Brookings, South Dakota, Sioux Falls, South Dakota, and Redwood Falls, Minnesota, and we have production facilities in Ireland and China.
In connection with the preparation of our financial statements, including the Consolidated Financial Statements included in this Form 10-K, our management is required under GAAP to make estimates and assumptions based on historical experience and other factors. Our most critical accounting estimates are described in "Part II, Item 7.
In connection with the preparation of our financial statements, including the Consolidated Financial Statements included in this Form 10-K, our management is required under GAAP to make estimates and assumptions based on historical experience and other factors. Our most critical accounting estimates are described in “Part II, Item 7.
Our failure to respond to regulatory requirements or to advance our initiatives could adversely impact our reputation, as well as the demand for our products. In addition, achieving these initiatives may result in increased costs, which could have a material adverse impact on our business, financial condition, or results of operations.
Our failure to respond to any such regulatory requirements or to advance our initiatives could adversely impact our reputation, as well as the demand for our products. In addition, achieving these initiatives may result in increased costs, which could have a material adverse impact on our business, financial condition, or results of operations.
We cannot provide assurance that all necessary or appropriate insurances will be available, cover every type of loss incurred, or be able to be economically obtained. For example, some insurers limit or refuse coverages, increase premium costs or increase deductibles when global catastrophic events occur.
We cannot provide assurance that all necessary or appropriate insurance will be available, cover every type of loss incurred, or be able to be economically obtained. For example, some insurers limit or refuse coverages, increase premium costs, or increase deductibles when global catastrophic events occur.
The interests of this group of shareholders may not always coincide with the interests of other shareholders, and they may act in a manner that advances their best interests and not necessarily those of other shareholders, including seeking a premium value for their common stock, that might affect the prevailing market price for our common stock. Item 1B.
The interests of this group of stockholders may not always coincide with the interests of other stockholders, and they may act in a manner that advances their best interests and not necessarily those of other stockholders, including seeking a premium value for their common stock, that might affect the prevailing market price for our common stock. Item 1B.
The terms and conditions of our credit facilities and convertible debt impose restrictions on our operations, and if we default on our credit facilities, it could have a material adverse effect on our results of operations and financial condition and make us vulnerable to adverse economic or industry conditions and cause liquidity issues.
The terms and conditions of our credit facilities impose restrictions on our operations, and if we default on our credit facilities, it could have a material adverse effect on our results of operations and financial condition, make us vulnerable to adverse economic or industry conditions, and cause liquidity issues.
Although this does not represent a majority of our outstanding common stock, if these shareholders were to choose to act together, they would be able to significantly influence all matters submitted to our shareholders for approval, as well as our management and affairs.
Although this does not represent a majority of our outstanding common stock, if these stockholders were to choose to act together, they would be able to significantly influence all matters submitted to our stockholders for approval, as well as our management and affairs.
The outcome of pending and future claims, investigations or litigation can have a material adverse impact on our business, financial condition, and results of operations. We are involved from time to time in a variety of litigation, investigations, inquires or similar matters arising in our business.
The outcome of pending and future claims, investigations, or litigation can have a material adverse impact on our business, financial condition, and results of operations. We are involved from time to time in a variety of litigation, investigations, inquiries or similar matters arising in our business.
Cost inflation and shortages of any raw materials and components used to manufacture our products have and may continue to occur due to various factors, such as worldwide demand, natural disasters, logistic disruptions, war and other conflicts, and trade regulations.
Cost inflation and shortages of the raw materials and components used to manufacture our products have and may continue to occur due to various factors, such as worldwide demand, natural disasters, logistic disruptions, war and other conflicts, and trade regulations.
The daily trading volume of our common stock has at times been relatively low. If this were to occur in the future, the liquidity and appreciation of our common stock may not meet our shareholders’ expectations, and the price at which our stock trades may be volatile.
The daily trading volume of our common stock has at times been relatively low. If this were to occur in the future, the liquidity and appreciation of our common stock may not meet our stockholders’ expectations, and the price at which our stock trades may be volatile.
For example, these persons, if they choose to act together, could significantly influence the election of directors and the approval of any merger, consolidation, sale of all or substantially all of our assets or other business combination or reorganization requiring shareholder approval.
For example, these persons, if they choose to act together, could significantly influence the election of directors and the approval of any merger, consolidation, sale of all or substantially all of our assets or other business combination or reorganization requiring stockholder approval.
The United States and other key international economies have experienced downturns and recessions from time to time during which economic activity was impacted by falling demand for a variety of goods and services; restricted credit; poor liquidity; reduced corporate profitability; volatility in credit, equity and foreign exchange markets; increased unemployment; bankruptcies; and overall uncertainty with respect to the economy.
The United States and other key international economies have experienced downturns and recessions from time to time during which economic activity was impacted by falling demand for a variety of goods and services; restricted credit; poor liquidity; reduced corporate profitability; volatility in credit, equity and foreign exchange markets; increased unemployment; bankruptcies; and overall economic uncertainty.
Upon the occurrence of an event of default, the lender could elect to declare any and all amounts outstanding under such facilities to be immediately due and payable and terminate all commitments to extend further credit. For additional information on financing agreements, see "Note 7. Financing Agreements" of the Notes to our Consolidated Financial Statements included in this Form 10-K.
Upon the occurrence of an event of default, the lender could elect to declare any and all amounts outstanding under such facilities to be immediately due and payable and terminate all commitments to extend further credit. For additional information on financing agreements, see “Note 7. Financing Agreements” of the Notes to our Consolidated Financial Statements included in this Form 10-K.
The market price of our common stock could be adversely impacted as a result of sales by existing shareholders of a large number of shares of common stock in the market or by the perception such sales could cause. Significant changes in the market price of our common stock could result in securities litigation claims against us.
The market price of our common stock could be adversely impacted as a result of sales by existing stockholders of a large number of shares of common stock in the market or by the perception such sales could cause. Significant changes in the market price of our common stock could result in securities litigation claims against us.
Environmental, society, and governance ("ESG") regulations and disclosures may impact our reputation, expose us to additional costs, or have other impacts which could adversely affect our business, financial condition, or results of operations. There has been an increased focus from regulators, investors, employees, consumers, and other stakeholders relating to ESG practices.
Environmental, social, and governance (“ESG”) regulations and disclosures may impact our reputation, expose us to additional costs, or have other impacts which could adversely affect our business, financial condition, or results of operations. There has been an increased focus from regulators, investors, employees, consumers, and other stakeholders relating to ESG practices.
The performance and financial condition of a supplier may cause us to alter our business terms, cease doing business with a particular supplier, or change our sourcing practices. Our suppliers are subject to the fluctuations in global economic cycles and conditions and other business risk factors which may impact their ability to operate their businesses.
The performance and financial condition of a supplier may cause us to alter our business terms with that supplier, cease doing business with that particular supplier, or change our sourcing practices. Our suppliers are subject to fluctuations in global economic cycles and conditions, governmental regulations, and other business risk factors which may impact their ability to operate their businesses.
If we are unable to use all of the components we have purchased, we may have excess inventory or obsolescence, or increased inventory or carrying costs, which could have an adverse impact on our results of operation or financial condition. We operate in highly competitive markets and face significant competition and pricing pressures.
If we are unable to use all of the components we have purchased, we may have excess inventory or obsolescence, or increased inventory or carrying costs, which could have an adverse impact on our results of operation or financial condition. 10 Table of Contents We operate in highly competitive markets and face significant competition and pricing pressures.
If we are not able to locate qualified third party subcontractors or manufacturers, the amount we are required to pay may exceed what we have estimated, and we may suffer losses on these contracts.
If we are not able to locate qualified third party subcontractors or manufacturers, the amount we are required to pay may exceed what we have estimated, and we may suffer reduced margins or losses on these contracts.
The cumulative catch-up method is used to account for revisions in estimates. Backlog may not be indicative of future revenue or profitability. Many of our products have long sales, delivery and acceptance cycles. In addition, our backlog is subject to order cancellations and delays.
The cumulative catch-up method is used to account for revisions in estimates. 13 Table of Contents Backlog may not be indicative of future revenue or profitability. Many of our products have long sales, delivery, and acceptance cycles. In addition, our backlog is subject to order cancellations and delays.
Although we believe these estimates and 13 Table of Contents assumptions are reasonable under the circumstances, they are subject to significant uncertainties, some of which are beyond our control. If management's estimates and assumptions change or are not correct, our financial condition or results of operations could be adversely affected.
Although we believe these estimates and assumptions are reasonable under the circumstances, they are subject to significant uncertainties, some of which are beyond our control. If management’s estimates and assumptions change or are not correct, our financial condition or results of operations could be adversely affected.
If our employees, agents, distributors, suppliers and other third parties with whom we do business violate anti-bribery, anti-corruption or similar laws and regulations, we may incur severe fines, penalties and reputational damage even if we were 17 Table of Contents not aware of such violation.
If our employees, agents, distributors, suppliers, and other third parties with whom we do business violate anti-bribery, anti-corruption, or similar laws and regulations, we may incur severe fines, penalties, and reputational damage even if we were not aware of such violation.
Insurance coverage can be difficult or expensive to obtain, and our failure to obtain adequate insurance coverage could adversely affect our financial condition or results of operations. We maintain insurance both as a corporate risk management strategy and to satisfy the requirements of many of our contracts with customers.
Insurance coverage can be difficult or expensive to obtain, and our failure to obtain adequate insurance coverage at reasonable costs could adversely affect our financial condition or results of operations. We maintain insurance both as a corporate risk management strategy and to satisfy the requirements of many of our contracts with customers.
The following factors are among those that could complicate capacity planning for market demand: • changes in the demand for and mix of products that our customers buy; • our ability to scale down or to add and train our manufacturing and services staff in advance of demand changes; • the market’s pace of technological change; • variability in our manufacturing or services productivity; • long lead times for and availability of raw materials and components used in production; • our ability to engage qualified third parties; • geography of the order and related shipping methods; and • long lead times for our plant and equipment expenditures.
The following factors are among those that could complicate capacity planning for market demand: • changes in the demand for and mix of products that our customers buy; • tariff landscape and import/export controls; • our ability to scale down or to add and train our manufacturing and services staff in advance of demand changes; • the market’s pace of technological change; • variability in our manufacturing or services productivity; • long lead times for and availability of raw materials and components used in production; • our ability to engage qualified third parties; • geography of the order and related shipping methods; and • long lead times for our plant and equipment expenditures.
The market price of our common stock has fluctuated and will likely continue to fluctuate. In the past, companies that have experienced significant changes in the market price of their stock have been subject to securities litigation claims. We may be the target of this type of litigation in the future.
The market price of our common stock has fluctuated and will likely continue to fluctuate. In the past, companies that have experienced significant changes in the market price of their stock have been subject to securities litigation claims. We may 21 Table of Contents be the target of this type of litigation in the future.
If litigation is necessary in the future to enforce our intellectual 10 Table of Contents property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others, such litigation could result in substantial costs and diversion of resources even if we ultimately prevail.
If litigation is necessary in the future to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others, such litigation could result in substantial costs and diversion of resources even if we ultimately prevail.
Such changes have and could continue to result in extended lead times or supply changes, which could disrupt or delay our scheduled product deliveries to our end user customers and may result in the loss of sales and end user customers and cause harm to our sales, financial condition, and results of operations.
Such changes can result in extended lead times or supply changes, which could disrupt or delay our scheduled product deliveries to our end user customers and may result in the loss of sales and end user customers and cause harm to our sales, financial condition, and results of operations.
Additionally, if we fail to meet or exceed the expectations of securities analysts and investors, or if one or more of the securities analysts who cover us adversely change their recommendation regarding our stock, the market price of our 20 Table of Contents common stock could decline.
Additionally, if we fail to meet or exceed the expectations of securities analysts and investors, or if one or more of the securities analysts who cover us adversely change their recommendation regarding our stock, the market price of our common stock could decline.
In particular, we may be held liable for the actions that our partners take inside or outside of the United States even though we are not aware of such actions or our partners may not be subject to these laws.
In particular, we may be held liable for the actions that our partners take inside or outside of the United 18 Table of Contents States even though we are not aware of such actions or our partners may not be subject to these laws.
The loss, an interruption, or a material change in our business relationships with our suppliers or in global supply chain conditions has had and could continue to cause a disruption in our supply chains and a substantial increase in the costs of such raw materials and components. Geopolitical tensions can impact our ability to obtain key materials and components.
The loss, an interruption, or a material change in our business relationships with our suppliers or in global supply chain conditions can cause a disruption in our supply chains and a substantial increase in the costs of such raw materials and components. Geopolitical tensions can impact our ability to obtain key materials and components.
This concentration of voting power could delay or prevent an acquisition of us on terms that other shareholders may desire.
This concentration of voting power could delay or prevent an acquisition of us on terms that other stockholders may desire.
In the future, if we identify additional control deficiencies that individually or together constitute significant deficiencies or material weaknesses, our ability to accurately record, process, and report financial information and, consequently, our ability to prepare financial statements within required time periods, could be adversely affected.
If we identify control deficiencies that individually or together constitute significant deficiencies or material weaknesses, our ability to accurately record, process, and report financial information and, consequently, our ability to prepare financial statements within required time periods, could be adversely affected.
In addition, our products compete with other forms of advertising, such as television, print media, digital and mobile, and fixed display signs. To remain competitive, we must anticipate and respond quickly to provide products and services that meet our customers’ needs, enhance our existing products, introduce new products and features, and continue to price our products competitively.
In addition, our products compete with other forms of advertising, such as television, print media, digital and mobile, and fixed display signs. To remain competitive, we must anticipate and respond quickly to provide innovative, customer-valued products and services that meet our customers’ needs, enhance our existing products, introduce new products and features, and continue to price our products competitive ly.
These conditions affect consumer and entertainment spending and could adversely affect our 8 Table of Contents customers’ ability or willingness to purchase our products, delay prospective customers’ purchasing decisions, reduce the value of their contracts, or affect attrition rates, all of which could adversely affect our operating results.
These conditions affect consumer and entertainment spending and could materially and adversely affect our customers’ ability or willingness to purchase our products, delay prospective customers’ purchasing decisions, reduce the value of their contracts, or affect attrition rates, all of which could adversely affect our operating results.
Large contracts or customer awards include projects for college and professional sports facilities 12 Table of Contents markets, the OOH niche, the transportation market, and the large spectacular niche. These projects can have short delivery time frames.
Large contracts or customer awards include projects for college and professional sports facilities markets, the OOH niche, the transportation market, and the large spectacular niche. These projects can have short delivery time frames.
Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Form 10-K.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K.
Our financial results are impacted negatively or positively from our proportionate share of our affiliates' financial performance. Any reduction or impairment of the value of an investment and related acquired assets, goodwill, or investments in affiliates would result in charges against earnings, which would adversely affect our results of operations in future periods.
Our financial results are impacted negatively or positively from our proportionate share of our affiliates’ financial performance. Any reduction or impairment of the value of an investment and related acquired assets, goodwill, or investments in affiliates would result in charge 15 Table of Contents s against earnings, which would adversely affect our results of operations in future periods.
Such factors can create trade restrictions, increase tariff costs, increase prices for raw materials and components used in our products, increase the cost of sales, decrease demand for our products, or have other implications on our business operations.
Such factors and conditions can create trade restrictions, increase tariff costs, increase prices for raw materials and components used in our products, increase the cost of sales, decrease demand for our products, increase cost of compliance, cause material business interruptions, or have other implications on our business operations.
If we are not able to meet customer requirements, customers may choose to disqualify us as a supplier. Risks Related to an Investment in Our Common Stock The protections we have adopted and to which we are subject may discourage takeover offers favored by our shareholders.
If we are not able to meet customer requirements, customers may choose to disqualify us as a supplier. 20 Table of Contents Risks Related to an Investment in Our Common Stock The protections we have adopted and to which we are subject may discourage takeover offers favored by our stockholders.
We and our suppliers are subject to federal, state, local and foreign laws and regulations governing the use, manufacture, storage, handling and disposal of these hazardous materials.
Our business involves the blending, controlled storage, use, and disposal of hazardous materials. We and our suppliers are subject to federal, state, local, and foreign laws and regulations governing the use, manufacture, storage, handling, and disposal of these hazardous materials.
Our other executive officers and directors, in the aggregate, beneficially owned an additional 4.1 percent of our outstanding common stock as of June 3, 2024, assuming the exercise by them of all of their options currently exercisable or that vest within 60 days of June 3, 2024.
Our other executive officers and directors, in the aggregate, beneficially owned an additional 1.5 percent of our outstanding common stock as of June 9, 2025, assuming the exercise by them of all of their options currently exercisable or that vest within 60 days of June 9, 2025.
There can be no assurance that we will engage in any acquisitions or divestitures or that we will be able to do so on terms that will result in any expected benefits. Our investment in and advances to affiliates totaled $16.1 million as of April 27, 2024.
There can be no assurance that we will engage in any acquisitions or divestitures or that we will be able to do so on terms that will result in any expected benefits. Our investment in and advances to affiliates totaled $3.1 million as of April 26, 2025.
Together, these individuals, in the aggregate, beneficially owned 10.0 percent of our outstanding common stock as of June 3, 2024, assuming the exercise by them of all of their options that were currently exercisable or that vest within 60 days of June 3, 2024.
Together, these individuals, in the aggregate, beneficially owned 9.0 percent of the shares of our outstanding common stock as of June 9, 2025, assuming the exercise by them of all of their options that were currently exercisable or that vest within 60 days of June 9, 2025.
The terms and conditions of our credit facilities impose restrictions limiting our ability to incur debt, contingent liabilities, lease obligations or liens; to merge or consolidate with another company; to dispose of substantially all our assets; to acquire or purchase a business or its assets; or to sell our assets, among other restrictions.
The terms and conditions of our credit facilities impose restrictions limiting our ability to incur debt, contingent liabilities, lease obligations or liens; to merge or consolidate with another company; to dispose of substantially all our assets; to 14 Table of Contents acquire or purchase a business or its assets; to pay dividends; to repurchase our shares; or to sell our assets, among other restrictions.
Furthermore, 15 Table of Contents possible shortages of key personnel, including engineers, could require us to pay more to hire and retain key personnel, thereby increasing our costs. Increases in the cost of employee benefits could impact our financial results and cash flows. Our expenses relating to employee health benefits are significant.
Furthermore, possible shortages of key personnel, including engineers, could require us to pay more to hire and retain key personnel, thereby increasing our costs and negatively affecting our financial condition and results of operations. Increases in the cost of employee benefits could impact our financial results and cash flows. Our expenses relating to employee benefits, particularly health benefits, are significant.
These demand fluctuations and various factors may reduce our ability to effectively utilize our capacity and impact our results of operations. We rely on global supply chains, and inflationary pressures can increase our input costs faster than our ability to raise prices.
In addition, these demand fluctuations may reduce our ability to effectively utilize our capacity and negatively impact our results of operations. 9 Table of Contents We rely on global supply chains, and inflationary pressures can increase our input costs faster than our ability to raise prices.
Also, a well-publicized actual or perceived threat of litigation could adversely affect our reputation and reduce the demand for our products. See "Note 16. Commitments and Contingencies" of the Notes to our Consolidated Financial Statements included in this Form 10-K for further information on litigation obligations. Information Systems, Legal, and Regulatory Risks Our business depends on numerous complex information systems.
Also, a well-publicized actual or perceived threat of litigation could adversely affect our reputation and reduce the demand for our products. See “Note 16. Commitments and Contingencies” of the Notes to our Consolidated Financial Statements included in this Form 10-K for further information on litigation obligations.
These provisions may deny shareholders the receipt of a premium on their common stock, which in turn may have a depressive effect on the market price of our common stock. Our common stock has at times been thinly traded, which may result in low liquidity and price volatility.
The above protections may deny our stockholders a premium on a sale of their common stock, which, in turn, may have a material adverse effect on the market price of our common stock. Our common stock has at times been thinly traded, which may result in low liquidity and price volatility.
Aelred Kurtenbach's family members currently serve as executive officers of the Company. His son, Mr. Reece Kurtenbach, serves as our Chairman of the Board and Chief Executive Officer, and two other children serve as our Vice President of Human Resources and as our Vice President of Manufacturing.
Aelred Kurtenbach’s family members currently serve as executive officers of the Company. His son, Mr. Reece A. Kurtenbach, serves on our Board of Directors and was Chief Executive Officer (“CEO”) of Daktronics until March 5, 2025, and two other of Dr. Aelred Kurtenbach’s children serve as our Vice President of Human Resources and as our Vice President of Manufacturing.
Unexpected events could result in damage to, and a complete or partial closure of, one or more of our manufacturing facilities, which could make it difficult to supply our customers with product and provide our employees with work, thereby adversely affecting our business, operating results or financial condition. 9 Table of Contents The occurrence of one or more unexpected events in the United States or in other countries in which we operate may disrupt our operations and the operations of our customers and suppliers.
Unexpected events could result in damage to, and a complete or partial closure of, one or more of our manufacturing facilities, which could make it difficult to supply our customers with product and provide our employees with work, thereby adversely affecting our business, operating results, or financial condition.
We depend on the performance of our senior executives and key employees, including experienced and skilled technical personnel. The loss of any of our senior executives could negatively impact our operating results and ability to execute our business strategy. Our future success will also depend upon our ability to attract, train, motivate and retain qualified personnel.
The loss of any of our senior executives could negatively impact our operating results and ability to execute our business strategy. Our future success will also depend upon our ability to attract, train, motivate, and retain qualified personnel to maintain and grow capacity.
We compete against products produced in foreign countries and the United States. Our competitors may develop lower-cost or lower-featured products, may be willing to charge lower prices to increase their market share, or market new and unique product, service and controller offerings.
Our competitors may develop lower-cost or lower-featured products, may be willing to charge lower prices to increase their market share, bring new products to the market faster, or market new and unique product, service, and controller offerings.
The perceived uncertainties as to our future direction also could affect the market price and volatility of our securities. Our executive officers, directors and principal shareholders have the ability to significantly influence all matters submitted to our shareholders for approval. Co-founder Dr. Aelred Kurtenbach served as our Chairman of the Board until September 3, 2014. Dr.
These impacts, alone or in combination, could materially adversely affect the market price and volatility of our securities. Our executive officers, directors and principal stockholders have the ability to significantly influence all matters submitted to our stockholders for approval. Daktronics co-founder Dr. Aelred Kurtenbach served as our Chairman of the Board until September 3, 2014. Dr.
There is a risk that we may have disputes with our subcontractors relating to, among other things, the quality and timeliness of work performed, customer concerns about the subcontractor, or faulty workmanship, resulting in claims against us for failure to meet required project specifications and negatively impacting our financial condition and results of operations.
There is a risk that we may have disputes with our subcontractors relating to, among other things, the quality and timeliness of work performed, customer concerns about the subcontractor, or faulty workmanship, resulting in claims against us for failure to meet required project specifications and negatively impacting our financial condition and results of operations. 12 Table of Contents These third parties are subject to fluctuations in global economic cycles and conditions and other business risk factors which may adversely impact their ability to operate their businesses.
Our failure to obtain adequate insurance coverage at reasonable costs could adversely affect our financial condition or results of operations. 19 Table of Contents We have been required to conduct a good faith reasonable country of origin analysis on our use of “conflict minerals”, which has imposed and may impose additional costs on us and could raise reputational challenges and other risks.
We have been required to conduct a good faith reasonable country of origin analysis on our use of “conflict minerals”, which has imposed and may impose additional costs on us and could raise reputational challenges and other risks.
Cost inflation in, and shortages of, raw materials, components, and related transportation and tariff costs can have a significant impact on our price competitiveness and/or ability to produce our products, which have caused and could continue to cause harm to our sales, financial condition and results of operations.
We may not be able to obtain sufficient freight capacity on a timely basis and, therefore, may not be able to timely receive shipments of raw materials and components or deliver products to customers. 11 Table of Contents Cost inflation in, and shortages of, raw materials, components, and related transportation and tariff costs can have a significant impact on our price competitiveness and/or ability to produce our products, which have caused and could continue to cause harm to our sales, financial condition, and results of operations.
Legislative and private sector initiatives regarding healthcare reform could result in significant changes to the United States healthcare system. Due to the breadth and complexity of the healthcare reform legislation and the uncertainty surrounding further reform proposals, we are not able to fully determine the impact that healthcare reform will have in the future on company sponsored medical plans.
Due to the breadth and complexity of the 16 Table of Contents healthcare reform legislation and the uncertainty surrounding further reform proposals, we are not able to fully determine the impact that any healthcare reform will have in the future on company sponsored medical plans.
Macroeconomic Risks Our business is sensitive to global economic conditions, including recessions, inflation, and interest rate fluctuations. Weakened global economic or recessionary conditions may adversely affect our industry, business and results of operations. Our overall performance depends in part on worldwide economic conditions.
Weakened global economic or recessionary conditions may materially and adversely affect our industry, business and results of operations. Our overall performance depends in part on worldwide economic conditions.
The risks and uncertainties described below may not be the only ones we face. If any of the risks actually occur, our business, operating results, and financial condition could be materially and adversely affected. In that event, the market price of our common stock could decline, and you could lose part or all of your investment.
The risks and uncertainties described below may not be the only ones we face. If any of the risks actually occur, our business, operating results, and financial condition could be materially and adversely affected.
We also contractually require subcontractors and others working on our behalf to carry common insurance coverages for the types of work they perform to mitigate any risk of our loss.
We also contractually require subcontractors and others working on our behalf to carry common insurance coverages for the types of work they perform to mitigate any risk of our loss. Our failure to obtain adequate insurance coverage at reasonable costs could adversely affect our financial condition or results of operations.
Any information system failure of or breach in security could adversely affect our operations, at least until our data can be restored and/or the breaches remediated.
We rely heavily on complex information systems and technologies for the successful operation of our business, for the support of our offerings, and for the collection and retention of business data. Any information system failure of, or breach in security, could adversely affect our operations, at least until our data can be restored and/or the breaches remediated.
These could eliminate our ability to sell our products or receive parts and components through our global supply chains. The rate of interest we pay on our asset-based lending facility with JPMorgan Chase Bank, N.A. is correlated to the Standard Overnight Fund Rate (SOFR), which is determined by governmental policy decisions.
The rate of interest we pay on our asset-based lending facility with JPMorgan Chase Bank, N.A. is correlated to the Standard Overnight Fund Rate (“SOFR”), which is determined by governmental policy decisions. Increases in SOFR will increase the rate of any borrowing on this facility.
If we are unable to keep up with the rapidly changing product developments and new technologies or if we cannot compete effectively, we could lose market share and orders, which would negatively impact our results of operations. The electronic display industry is characterized by ongoing product improvement, innovations and development.
If we are not able to continue to enhance existing products or are unable to keep up with the rapidly changing product developments and new technologies, or market and compete effectively in our new or enhanced products that respond to customer needs and preferences, we could lose market share and orders, which would negatively impact our results of operations.
Such events could create additional uncertainties, forcing customers to reduce, delay, or cancel already planned projects or cause our suppliers not to perform, resulting in parts and component shortages. Risks Related to Our Business and Industry We depend on a single-source or a limited number of suppliers for our raw materials and components from countries around the world.
Risks Related to Our Business and Industry We depend on a single-source or a limited number of suppliers for our raw materials and components from countries around the world.
Other exposures and uncertainties that exist include changing social conditions and attitudes, terrorism, or political hostilities and war. Other difficulties of global operations include staffing 16 Table of Contents and managing our various locations, including logistical and communication challenges. The likelihood of such occurrences and their overall effect on us vary greatly from country to country and are not predictable.
Other exposures and uncertainties that exist include changing social conditions and attitudes, terrorism, and political hostilities and war. In addition, difficulties of global operations include staffing and managing our various locations, including logistical and communication challenges.
We depend on qualified employees, including experienced and skilled technical personnel, to design, market, fulfill, and serve our customers. Qualified employees can be in high demand and limited in availability. Our future success and operating results will also depend upon our ability to attract, train, motivate and retain qualified personnel to maintain and grow capacity.
We depend on qualified employees, including experienced and skilled technical personnel, to design, market, fulfill, and serve our customers. Qualified employees can be in high demand and limited in availability. We depend on the performance of our senior executives and key employees, including experienced and skilled technical personnel.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTo execute the program, we utilize internal and external technical experts in cybersecurity risk management, data and network security structures, incident response and security operations, and laws, regulation, and reporting requirements.
Biggest changeTo execute the Cybersecurity Program and promote compliance with applicable cybersecurity laws, regulations, and reporting requirements, we utilize internal and external technical experts in cybersecurity risk management, data and network security structures, and incident response and security operations.
A member of the committee has a bachelor and doctoral degrees relevant to and experience in cybersecurity and information technology trends. Management provides the Strategy and Risk Committee periodic reports on cybersecurity risks, risk mitigation in place and planned, and any material cybersecurity incidents. These reports are provided to our Board of Directors.
A member of the Strategy and Risk Committee has bachelor and doctoral degrees relevant to and experience in cybersecurity and information technology trends. Management provides the Strategy and Risk Committee with periodic reports on cybersecurity risks, risk mitigation in place and planned, and any material cybersecurity incidents. These reports are provided to our Board of Directors.
For a discussion of whether and how any risks from cybersecurity threats are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition, refer to Item 1A. Risk Factors – titled "Our business depends on numerous complex information systems.
For a discussion of whether and how any risks from cybersecurity threats are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition, refer to Item 1A. Risk Factors – “Our business depends on numerous complex information systems.
If a material cybersecurity incident were to occur, the Audit Committee would oversee the financial reporting and disclosure and law compliance aspects. Our program and team of cybersecurity professionals and resources is led and supervised by our Vice President of Information Technology, who has over 25 years of experience in information technology.
If a material cybersecurity incident were to occur, the Audit Committee of the Board would oversee the financial reporting and disclosure and law compliance aspects. Our Cybersecurity Program and team of cybersecurity professionals and resources are led and supervised by our Vice President of Information Technology, who has over 25 years of experience in information technology.
Our program is designed to deploy and monitor the prevention, detection, mitigation, and remediation of cyber risks and incidents through various means, including: • A security team responsible for monitoring our infrastructure and managing our cybersecurity risk assessment processes, our security controls, and response to cybersecurity incidents. 21 Table of Contents • Periodic use of outside independent advisors to evaluate the maturity of our cybersecurity program, review processes and policies, conduct penetration and vulnerability tests, and to monitor and help identify potential cybersecurity incidents. • An incident response plan that includes procedures for identifying, evaluating and responding to cybersecurity incidents. • A training and awareness communication series addressed to our employees to help them identify potential cybersecurity threats and attacks. • A risk management process using independent third-party service providers that process and store data.
Our Cybersecurity Program is aligned with our company strategy and governance processes and is designed to deploy and monitor the prevention, detection, mitigation, and remediation of cyber risks and incidents through various means, including: • A security team responsible for monitoring our infrastructure and managing our cybersecurity risk assessment processes, our security controls, and response to cybersecurity incidents; • Periodic use of outside independent advisors to evaluate the maturity of our cybersecurity program, review processes and policies, conduct penetration and vulnerability tests, and to monitor and help identify potential cybersecurity incidents; • An incident response plan that includes procedures for identifying, evaluating and responding to cybersecurity incidents; • A training and awareness communication series addressed to our employees to help them identify potential cybersecurity threats and attacks; • A risk management process using independent third-party service providers that process and store data.
Any failure to maintain these systems, a network disruption, or breaches in data security could cause a material adverse effect on our business", which is incorporated by reference into this Item 1C. Cybersecurity Governance The Strategy and Risk Committee of the Board of Directors oversees the Company’s cybersecurity risks and strategy.
Any failure to maintain these systems, a network disruption, or breaches in data security could cause a material adverse effect on our business”, which is incorporated by reference into this Item 1C. Cybersecurity Governance The Strategy and Risk Committee of the Board (the “Strategy and Risk Committee”) oversees the Company’s cybersecurity risks and strategy, including our Cybersecurity Program.
As part of the program, our executive management team is regularly informed about the monitoring, prevention, detection, mitigation, management, and remediation efforts.
As part of the Cybersecurity Program, our executive management team is regularly informed about the monitoring, prevention, detection, mitigation, management, and remediation efforts. 23 Table of Contents
Item 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy The operation of our business is dependent on the secure functioning of our digital information systems and infrastructure. Our cybersecurity risk management program intends to protect the confidentiality, integrity, and availability of our critical systems and information.
Item 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy The operation of our business is dependent on the secure functioning of our digital information systems and infrastructure. Our cybersecurity risk management program (our “Cybersecurity Program”) has been designed to protect the confidentiality, integrity, and availability of our critical systems and information.
We design and assess our cybersecurity risk management program based on published frameworks, including the National Institute of Standards and Technology and routinely evaluate our program for ongoing adherence to those frameworks. Our cybersecurity program is aligned with our company strategy and governance processes.
We design and assess our Cybersecurity Program based on published frameworks, including the National Institute of Standards and Technology, and routinely evaluate our program for ongoing adherence to those frameworks.
We assess the risks from cybersecurity threats posed by such services. We have not encountered cybersecurity incidents or identified risks from cybersecurity threats that have materially impaired our operations or financial standing.
We assess the risks from cybersecurity threats posed by such services; and • An AI committee to set Company-wide policy and drive the safe use of AI technologies. We have not encountered cybersecurity incidents or identified risks from cybersecurity threats that have materially impaired our operations or financial standing.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur principal properties consist of the following: Facilities Owned or Leased Square Footage Facility Activities Brookings, SD, USA Owned 771,000 Corporate Headquarters, Manufacturing, Sales, Service Redwood Falls, MN, USA Owned 151,000 Manufacturing, Sales, Service, Office Ennistymon, Ireland Owned 62,000 Manufacturing, Sales, Service, Office Sioux Falls, SD, USA Leased 296,000 Manufacturing, Sales, Service, Office Shanghai, China Leased 157,000 Manufacturing, Sales, Service, Office We have a $75.0 million senior credit facility (the "Credit Facility") consisting of a $60.0 million asset-based revolving credit facility (the "ABL") maturing on May 11, 2026 and a $15.0 million delayed draw loan (the "Delayed Draw Loan). 22 Table of Contents Under the Credit Facility, we have encumbered substantially all of our owned real property for the benefit of the lenders thereunder.
Biggest changeOur principal properties consist of the following: Facilities Owned or Leased Square Footage Facility Activities Brookings, SD, USA Owned 771,000 Corporate Headquarters, Manufacturing, Sales, Service Redwood Falls, MN, USA Owned 151,000 Manufacturing, Sales, Service, Office Ennistymon, Ireland Owned 62,000 Manufacturing, Sales, Service, Office Sioux Falls, SD, USA Leased 296,000 Manufacturing, Sales, Service, Office Shanghai, China Leased 157,000 Manufacturing, Sales, Service, Office We have a $75.0 million senior credit facility (the “Credit Facility”) consisting of a $60.0 million asset-based revolving credit facility (the “ABL”) maturing on May 11, 2026 and a $15.0 million delayed draw loan (the “Delayed Draw Loan”).
For additional information, see "Note 7. Financing Agreements" in the Notes to Consolidated Financial Statements included in this Form 10-K.
For more information about the Fourth Amendment and the Specified Letters of Credit, see “Note 7. Financing Agreements” and “Note 18. Subsequent Events” in the Notes to Consolidated Financial Statements included in this Form 10-K.
Added
The Credit Facility is governed by 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).
Added
Pursuant to the terms of the Credit Agreement and the related 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”), our obligations under the Credit Facility are secured by substantially all of our owned real property for the benefit of the Lenders.
Added
On June 10, 2025, we entered into a Consent and Amendment No. 4 to Credit Agreement (the “Fourth Amendment”), which, among other changes, 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”).

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAlthough we are unable to predict the ultimate outcome of these legal actions, it is the opinion of management that the disposition of these matters, taken as a whole, will not have a material adverse effect on our financial condition or results of operations. See "Note 16.
Biggest changeAlthough we are unable to predict the ultimate outcome of these legal actions, it is the opinion of management that the disposition of these matters, taken as a whole, will not have a material adverse effect on our financial condition or results of operations. See “Note 16.
Commitments and Contingencies" of the Notes to our Consolidated Financial Statements included in this Form 10-K for further information on any legal proceedings and claims. Item 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Commitments and Contingencies” of the Notes to our Consolidated Financial Statements included in this Form 10-K for further information on any legal proceedings and claims. Item 4. MINE SAFETY DISCLOSURES Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeUnder this program, we may repurchase shares from time to time in open market transactions and in privately negotiated transactions based on business, market, applicable legal requirements and other considerations. The repurchase program does not require the repurchase of a specific number of shares and may be terminated at any time. In April 2020, the Board suspended the program.
Biggest changeThe Repurchase Program does not require the repurchase of a specific number of shares, may be terminated at any time, and has no fixed expiration date. In April 2020, the Board suspended the Repurchase Program. On December 2, 2021, the Board voted to reauthorize the Repurchase Program.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Stock Performance Our common stock is quoted on The Nasdaq Global Select Market under the ticker symbol DAKT. Daily market activity, along with quoted prices and other trading information, are readily available for our common stock on numerous websites including www.nasdaq.com.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Stock Performance Our common stock is quoted on The Nasdaq Global Select Market (“Nasdaq”) under the ticker symbol DAKT. Daily market activity, along with quoted prices and other trading information, are readily available for our common stock on numerous websites, including www.nasdaq.com.
Share Repurchases On June 16, 2016, our Board of Directors approved a stock repurchase program under which Daktronics may purchase up to $40.0 million of its outstanding shares of common stock.
Share Repurchases On June 17, 2016, our Board of Directors approved a share repurchase program under which we may purchase up to $40.0 million of the Company’s outstanding shares of common stock.
As of June 3, 2024, we had 852 shareholders of record. The following graph shows changes during the period from April 29, 2017 to April 30, 2022 in the value of $100 invested in: (1) our common stock; (2) The Nasdaq Composite; and (3) the Standard and Poor's 600 Index for Electronic Equipment 23 Table of Contents Manufacturers.
As of June 9, 2025, we had 802 stockholders of record. 24 Table of Contents The following graph shows changes during the period from May 2, 2020 to April 26, 2025 in the value of $100 invested in: (1) our common stock; (2) The Nasdaq Composite; and (3) the Standard and Poor’s 600 Index for Electronic Equipment Manufacturers.
Financing Agreements" of the Notes to our Consolidated Financial Statements included in this Form 10-K. Item 6. [Reserved]
Our ability to repurchase our shares could be affected by the limitations imposed by our Credit Facility, as further described in “Note 7. Financing Agreements” of the Notes to our Consolidated Financial Statements included in this Form 10-K. Item 6. [Reserved]
On December 2, 2021, the Board of Directors of Daktronics voted to reauthorize the stock repurchase program. During fiscal 2024 and 2023, we had no repurchases of shares of our outstanding common stock. During fiscal 2022, we repurchased 0.6 million shares of common stock at a total cost of $3.2 million.
During fiscal 2025, we repurchased 2.1 million shares of our outstanding common stock at a total cost of $29.5 million. During fiscal 2024 and 2023, we had no repurchases of shares of common stock. As of April 26, 2025, we had $9.9 million of remaining capacity under our Repurchase Program.
Removed
As of April 27, 2024, we had $29.4 million of remaining capacity under our current share repurchase program. Repurchases of shares are treated as dividends under the SD Act, so our repurchases of shares could be affected by the limitations imposed on dividends in our Credit Facility, as further described in "Note 7.
Added
This program, which was amended by the Board on March 4, 2025 to authorize an additional $10.0 million of the Company’s common stock, is referred to in this Report as the “Repurchase Program.” Under the Repurchase 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.
Added
The following table provides information about our share repurchases of common stock during the fourth quarter of fiscal 2025: Period Total number of shares purchased Average price paid per share (including fees) Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (1) January 26, 2025 - February 22, 2025 11,222 $ 15.67 11,222 $ 30,163,065 February 23, 2025 - March 22, 2025 715,796 $ 14.33 715,796 $ 19,904,728 March 23, 2025 - April 26, 2025 808,456 $ 12.40 808,456 $ 9,880,485 Total 1,535,474 1,535,474 25 Table of Contents (1) The share repurchases described in the above table were made pursuant to the Repurchase Program authorized by the Board on June 17, 2016 and amended by the Board on March 4, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIncome Taxes" for further information. 28 Table of Contents Reportable Segment Performance Summary The following table shows information regarding our reportable segment financial performance of contribution margin reconciled to GAAP operating income for the fiscal years ended April 27, 2024 and April 29, 2023: Fiscal Year 2024 Commercial Percent of net sales (1) Live Events Percent of net sales (1) High School Park and Recreation Percent of net sales (1) Transportation Percent of net sales (1) International Percent of net sales (1) Total Percent of net sales (1) Net sales $ 161,626 $ 338,508 $ 170,349 $ 85,390 $ 62,210 $ 818,083 Cost of sales 127,393 78.8 % 242,524 71.6 % 112,985 66.3 % 59,369 69.5 % 53,369 85.8 % 595,640 72.8 % Gross profit 34,233 21.2 95,984 28.4 57,364 33.7 26,021 30.5 8,841 14.2 222,443 27.2 Selling 17,425 10.8 10,991 3.2 14,276 8.4 4,127 4.8 10,136 16.3 56,954 7.0 Contribution margin 16,808 10.4 84,993 25.1 43,088 25.3 21,894 25.6 (1,295) (2.1) 165,489 20.2 General and administrative — — — — — — — — — — 42,632 5.2 Goodwill impairment — — — — — — — — — — — — Product design and development — — — — — — — — — — 35,742 4.4 Operating income (loss) $ 16,808 10.4 % $ 84,993 25.1 % $ 43,088 25.3 % $ 21,894 25.6 % $ (1,295) (2.1) % $ 87,115 10.6 % Orders $ 135,251 $ 321,191 $ 148,505 $ 80,107 $ 55,117 $ 740,171 Fiscal Year 2023 Commercial Percent of net sales (1) Live Events Percent of net sales (1) High School Park and Recreation Percent of net sales (1) Transportation Percent of net sales (1) International Percent of net sales (1) Total Percent of net sales (1) Net sales $ 170,590 $ 284,900 $ 141,748 $ 72,306 $ 84,652 754,196 Cost of sales 139,435 81.7 % 235,645 82.7 % 100,603 71.0 % 52,481 72.6 % 74,677 88.2 % 602,841 79.9 % Gross profit 31,155 18.3 49,255 17.3 41,145 29.0 19,825 27.4 9,975 11.8 151,355 20.1 Selling 17,130 10.0 10,240 3.6 13,524 9.5 3,924 5.4 11,837 14.0 56,655 7.5 Contribution margin 14,025 8.2 39,015 13.7 27,621 19.5 15,901 22.0 (1,862) (2.2) 94,700 12.6 General and administrative — — — — — — — — — — 38,747 5.1 Goodwill impairment — — 2,281 0.8 — — — — 2,295 2.7 4,576 0.6 Product design and development — — — — — — — — — — 29,989 4.0 Operating income (loss) $ 14,025 8.2 % $ 36,734 12.9 % $ 27,621 19.5 % $ 15,901 22.0 % $ (4,157) (4.9) % $ 21,388 2.8 % Orders $ 158,028 $ 259,653 $ 144,919 $ 66,751 $ 51,603 $ 680,954 Net Dollar and % Change (1) Commercial Percent Change (1) Live Events Percent Change (1) High School Park and Recreation Percent Change (1) Transportation Percent Change (1) International Percent Change (1) Total Percent Change (1) Net sales $ (8,964) (5.3) $ 53,608 18.8 $ 28,601 20.2 $ 13,084 18.1 $ (22,442) (26.5) $ 63,887 8.5 Cost of sales (12,042) (8.6) 6,879 2.9 12,382 12.3 6,888 13.1 (21,308) (28.5) (7,201) (1.2) Gross profit 3,078 9.9 46,729 94.9 16,219 39.4 6,196 31.3 (1,134) (11.4) 71,088 47.0 Selling 295 1.7 751 7.3 752 5.6 203 5.2 (1,701) (14.4) 299 0.5 Contribution 2,783 19.8 45,978 117.8 15,467 56.0 5,993 37.7 567 (30.5) 70,789 74.8 General and administrative — — — — — — — — — — 3,885 10.0 Goodwill impairment — — (2,281) (100.0) — — — — (2,295) (100.0) (4,576) (100.0) Product design and development — — — — — — — — — — 5,752 19.2 Operating income (loss) $ 2,783 19.8 % $ 48,259 131.4 % $ 15,467 56.0 % $ 5,993 37.7 % $ 2,862 (68.8) % $ 65,727 307.3 % Orders $ (22,776) (14.4) % $ 61,538 23.7 % $ 3,585 2.5 % $ 13,356 20.0 % $ 3,514 6.8 % $ 59,217 8.7 % ( 1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
Biggest changeIncome Taxes” of the Notes to our Consolidated Financial Statements included in this Form 10-K for further information. 31 Table of Contents Reportable Segment Performance Summary The following table shows information regarding our reportable segment financial performance of contribution margin reconciled to GAAP operating income for the fiscal years ended April 26, 2025 and April 27, 2024: Fiscal Year 2025 Commercial Percent of net sales (1) Live Events Percent of net sales (1) High School Park and Recreation Percent of net sales (1) Transportation Percent of net sales (1) International Percent of net sales (1) Total Percent of net sales (1) Net sales $ 156,203 $ 291,484 $ 165,921 $ 81,061 $ 61,808 $ 756,477 Cost of sales 117,486 75.2 % 228,790 78.5 % 108,126 65.2 % 52,023 64.2 % 54,565 88.3 % 560,990 74.2 % Gross profit 38,717 24.8 62,694 21.5 57,795 34.8 29,038 35.8 7,243 11.7 195,487 25.8 Selling 17,106 11.0 11,002 3.8 15,758 9.5 5,404 6.7 10,741 17.4 60,011 7.9 Contribution margin 21,611 13.8 51,692 17.7 42,037 25.3 23,634 29.2 (3,498) (5.7) 135,476 17.9 General and administrative — — — — — — — — — — 63,498 8.4 Product design and development — — — — — — — — — — 38,860 5.1 Operating income (loss) $ 21,611 13.8 % $ 51,692 17.7 % $ 42,037 25.3 % $ 23,634 29.2 % $ (3,498) (5.7) % $ 33,118 4.4 % Orders $ 176,583 $ 283,780 $ 176,097 $ 72,315 $ 72,572 $ 781,347 Fiscal Year 2024 Commercial Percent of net sales (1) Live Events Percent of net sales (1) High School Park and Recreation Percent of net sales (1) Transportation Percent of net sales (1) International Percent of net sales (1) Total Percent of net sales (1) Net sales $ 161,626 $ 338,508 $ 170,349 $ 85,390 $ 62,210 818,083 Cost of sales 127,393 78.8 % 242,524 71.6 % 112,985 66.3 % 59,369 69.5 % 53,369 85.8 % 595,640 72.8 % Gross profit 34,233 21.2 95,984 28.4 57,364 33.7 26,021 30.5 8,841 14.2 222,443 27.2 Selling 17,425 10.8 10,991 3.2 14,276 8.4 4,127 4.8 10,136 16.3 56,954 7.0 Contribution margin 16,808 10.4 84,993 25.1 43,088 25.3 21,894 25.6 (1,295) (2.1) 165,489 20.2 General and administrative — — — — — — — — — — 42,632 5.2 Product design and development — — — — — — — — — — 35,742 4.4 Operating income (loss) $ 16,808 10.4 % $ 84,993 25.1 % $ 43,088 25.3 % $ 21,894 25.6 % $ (1,295) (2.1) % $ 87,115 10.6 % Orders $ 135,251 $ 321,191 $ 148,505 $ 80,107 $ 55,117 $ 740,171 Net Dollar and % Change (1) Commercial Percent Change (1) Live Events Percent Change (1) High School Park and Recreation Percent Change (1) Transportation Percent Change (1) International Percent Change (1) Total Percent Change (1) Net sales $ (5,423) (3.4) $ (47,024) (13.9) $ (4,428) (2.6) $ (4,329) (5.1) $ (402) (0.6) $ (61,606) (7.5) Cost of sales (9,907) (7.8) (13,734) (5.7) (4,859) (4.3) (7,346) (12.4) 1,196 2.2 (34,649) (5.8) Gross profit 4,484 13.1 (33,290) (34.7) 431 0.8 3,017 11.6 (1,598) (18.1) (26,957) (12.1) Selling (319) (1.8) 11 0.1 1,482 10.4 1,277 30.9 605 6.0 3,056 5.4 Contribution margin 4,803 28.6 (33,301) (39.2) (1,051) (2.4) 1,740 7.9 (2,203) 170.1 (30,013) (18.1) General and administrative — — — — — — — — — — 20,866 48.9 Product design and development — — — — — — — — — — 3,118 8.7 Operating income (loss) $ 4,803 28.6 % $ (33,301) (39.2) % $ (1,051) (2.4) % $ 1,740 7.9 % $ (2,203) 170.1 % $ (53,997) (62.0) % Orders $ 41,332 30.6 % $ (37,411) (11.6) % $ 27,592 18.6 % $ (7,792) (9.7) % $ 17,455 31.7 % $ 41,176 5.6 % ( 1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
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 information on our revenue recognition policies. Warranties. We have recognized an accrued liability for warranty obligations equal to our estimate of the actual costs to be incurred in connection with our performance under contractual warranties.
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 information on our revenue recognition policies. Warranties. We have recognized an accrued liability for warranty obligations equal to our estimate of the actual costs to be incurred in connection with our performance under contractual warranties.
The MD&A should be read in conjunction with the accompanying Consolidated Financial Statements and Notes to the Consolidated Financial Statements included in this Form 10-K. Daktronics, Inc. operates on a 52- or 53-week fiscal year, with our fiscal year ending on the Saturday closest to April 30 of each year.
The MD&A should be read in conjunction with the accompanying Consolidated Financial Statements and Notes to the Consolidated Financial Statements included in this Form 10-K. Daktronics operates on a 52- or 53-week fiscal year, with our fiscal year ending on the Saturday closest to April 30 of each year.
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. We may have multiple performance obligations in these types of contracts; however, a majority are treated as a combined single performance obligation.
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 in which such losses are capable of being estimated. We may have multiple performance obligations in these types of contracts; however, a majority are treated as a combined single performance obligation.
We believe the estimation process for uniquely configured contracts and warranties are most material and critical. These areas contain estimates with a reasonable likelihood to change, and those changes could have a material impact on our financial condition and reported results of operations. The estimation processes for these areas are also difficult and subjective and use complex judgments.
We believe the estimation process for uniquely configured contracts and warranties are material and critical. These areas contain estimates with a reasonable likelihood to change, and those changes could have a material impact on our financial condition and results of operations. The estimation processes for these areas are also difficult, subjective, and use complex judgments.
In addition to capital expenditures, we plan to make additional investments in our general and administration expenses to execute our broad digital transformation strategies to modernize our service systems for field service automation, to advance our enterprise performance planning capabilities, and to improve and automate quoting and sales processes.
In addition to capital expenditures, we plan to make additional investments in our general and administrative expenses to execute our broad digital transformation strategies to modernize our service systems for field service automation, to advance our enterprise performance planning capabilities, and to improve and automate quoting and sales processes.
The preparation of these financial statements requires us to make estimates and judgments affecting the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Although our significant accounting policies are described in "Note 1.
The preparation of these financial statements requires us to make estimates and judgments affecting the reported amounts of assets, liabilities, revenues, and expenses and related disclosure of contingent assets and liabilities. Although our significant accounting policies are described in “Note 1.
These changes can have a significant impact on the amount of net cash provided by or used in operating activities largely due to the timing of payments for inventory and subcontractors and receipts from our customers.
These changes can have a significant impact on the amount of net cash provided by or used in 34 Table of Contents operating activities largely due to the timing of payments for inventory and subcontractors and receipts from our customers.
Other Liquidity and Capital Uses Our long-term capital allocation strategy is to first fund operations and investments in growth, maintain a reasonable liquidity and leverage ratio that reflects a prudent and compliant capital structure in light of the cyclically of business, reduce debt, and then return excess cash over time to shareholders through dividends and share repurchases.
Other Liquidity and Capital Uses Our long-term capital allocation strategy is to first fund operations and investments in growth, maintain a reasonable liquidity and leverage ratio that reflects a prudent and compliant capital structure in light of the cyclicality of business, reduce debt, and then return excess cash over time to stockholders through dividends and share repurchases.
Non-GAAP Measures Contribution margin is a non-GAAP measure and consists of gross profit less selling expenses. Selling expenses consist primarily of personnel related costs, travel and entertainment expenses, marketing related expenses (show rooms, product demonstration, depreciation and maintenance, conventions and trade show expenses), the cost of customer relationship management/marketing systems, bad debt expenses, third-party commissions, and other expenses.
Non-GAAP Measures Contribution margin is a non-GAAP measure we use and consists of gross profit less selling expenses. Selling expenses consist primarily of personnel related costs, travel and entertainment expenses, marketing related expenses (showrooms, product demonstration, depreciation and maintenance, conventions and trade show expenses), the cost of customer relationship management/marketing systems, bad debt expenses, third-party commissions, and other expenses.
Our critical accounting estimates are based on historical experience; on our interpretation of GAAP, current laws and regulations; and on various other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities not readily apparent from other sources.
Our critical accounting estimates are based on historical experience, our interpretation of GAAP, current laws and regulations; and on various other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities not readily apparent from other sources. Actual results may differ from these estimates.
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.
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 35 Table of Contents incurred to date compared to estimated total costs for each contract.
We are sometimes required to obtain performance bonds for display installations, and we have an aggregate of $190.0 million bonding line available through surety companies. If we were unable to complete the installation work, and our customer would call upon the bond for payment, the surety company would subrogate its loss to Daktronics.
We are sometimes required to obtain performance bonds for display installations, and we have a $190.0 million bonding line available through surety companies. If we were unable to complete the installation work, and our customer would call upon the bond for payment, the surety company would subrogate its loss to Daktronics.
Nature of Business and Summary of Significant Accounting Policies" of the Notes to our Consolidated Financial Statements included in this Form 10-K.
Nature of Business and Summary of Significant Accounting Policies” of the Notes to our Consolidated Financial Statements included in this Form 10-K.
Overview Daktronics, Inc. and its subsidiaries are industry leaders in designing and manufacturing electronic scoreboards, programmable display systems and large screen video displays for sporting, commercial and transportation applications. We serve our customers by providing high quality standard display products as well as custom-designed and integrated systems.
Overview We are industry leaders in designing and manufacturing electronic scoreboards, programmable display systems, and large screen video displays for sporting, commercial, and transportation applications. We serve our customers by providing high quality standard display products as well as custom-designed and integrated systems.
During fiscal year 2024, we did not repurchase shares of common stock, and we did not pay a dividend. Our business growth and profitability improvement strategies depend on investments in capital expenditures and strategic investments. We are projecting total capital expenditures to be approximately $27 million for fiscal 2025.
During fiscal year 2025, we did repurchase shares of common stock, and we did not pay a dividend. Our business growth and profitability improvement strategies depend on investments in capital expenditures and strategic investments. We are projecting total capital expenditures to be approximately $22 million for fiscal 2026.
See "Note 16. Commitments and Contingencies" of the Notes to our Consolidated Financial Statements included in this Form 10-K for further information on warranties. RECENT ACCOUNTING PRONOUNCEMENTS For a summary of recently issued accounting pronouncements and the effects those pronouncements have on our financial results, refer to "Note 1.
See “Note 16. Commitments and Contingencies” of the Notes to our Consolidated Financial Statements included in this Form 10-K for further information on warranties. RECENT ACCOUNTING PRONOUNCEMENTS For a summary of recently issued accounting pronouncements and the effects those pronouncements have on our financial results, refer to “Note 1.
We also evaluate and may make strategic investments in new technologies or in our affiliates or acquire companies aligned with our business strategy. We are committed to invest an additional $0.5 million in fiscal 2025 in our current affiliates. We may make additional investments beyond our commitments.
We also evaluate and may make strategic investments in new technologies or in our affiliates or acquire companies aligned with our business strategy. We are committed to invest an additional $0.4 million in fiscal 2026 in our current affiliates. We may make additional investments beyond our commitments.
Often times the system is customized or significantly modified to the customer's desired configurations and location, and the interrelated goods and services provide utility to the customer as a package. See "Note 1.
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. See “Note 1.
These changes in estimates resulted primarily from favorable project execution of 1.5% of overtime revenue or $6.5 million, reduced cost estimates and contingencies that were relieved when conditions were resolved. Gross unfavorable changes in contract estimates were 0.6% of overtime revenue or $2.4 million and immaterial for the years ended April 27, 2024 and April 29, 2023, respectively.
For the year ended April 27, 2024, these changes in estimates resulted primarily from favorable project execution of 1.5% of overtime revenue, or $6.5 million, reduced cost estimates, and contingencies that were relieved when conditions were resolved. Gross unfavorable changes in contract estimates were 0.6 percent of overtime revenue, or $2.4 million.
As of April 27, 2024 and April 29, 2023, we had approximately $37.9 million and $32.5 million accrued for these warranty obligations, respectively. Due to the difficulty in estimating probable costs related to certain warranty obligations, there is a reasonable likelihood that the ultimate remaining costs to remediate the warranty claims could differ materially from the recorded accrued liabilities.
As of April 26, 2025 and April 27, 2024, we had approximately $35.8 million and $37.9 million accrued for these warranty obligations, respectively. Due to the difficulty in estimating probable costs related to certain warranty obligations, there is a reasonable likelihood that the ultimate remaining costs to remediate the warranty claims could differ materially from the recorded accrued liabilities.
The fiscal years ended April 27, 2024, April 29, 2023 and April 30, 2022 contained operating results for 52 weeks. 24 Table of Contents The year-over-year comparisons in this MD&A are as of and for the fiscal years ended April 27, 2024 and April 29, 2023, unless stated otherwise.
The fiscal years ended April 26, 2025, April 27, 2024, and April 29, 2023 contained operating results for 52 weeks. The year-over-year comparisons in this MD&A are as of and for the fiscal years ended April 26, 2025 and April 27, 2024, unless stated otherwise.
These changes in estimates resulted primarily from favorable project execution of 1.5% of overtime revenue or $6.5 million, reduced cost estimates and contingencies that were relieved when conditions were resolved. Gross unfavorable changes in contract estimates were 0.6% of overtime revenue or $2.4 million and immaterial for the years ended April 27, 2024 and April 29, 2023, respectively.
For the year ended April 27, 2024, these changes in estimates resulted primarily from favorable project execution of 1.5 percent of overtime revenue, or $6.5 million, reduced cost estimates, and contingencies that were relieved when conditions were resolved. Gross unfavorable changes in contract estimates in fiscal 2024 were 0.6 percent of overtime revenue, or $2.4 million. See “Note 1.
Actual results may differ from these estimates. Revenue recognition on uniquely configured contracts. 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 32 Table of Contents costs and applying that percentage of completion to the transaction price to recognize revenue.
Revenue recognition on uniquely configured contracts. 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.
As of April 27, 2024, we had $44.5 million of bonded work outstanding. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our Consolidated Financial Statements and Notes to the Consolidated Financial Statements included in this Form 10-K have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").
As of April 26, 2025, we had $57.8 million of bonded work outstanding. CRITICAL ACCOUNTING ESTIMATES Our Consolidated Financial Statements and Notes to the Consolidated Financial Statements included in this Form 10-K have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
For the years ended April 27, 2024 and April 29, 2023, our operating income was positively impacted by a net amount of 1.0% and 0.3% of overtime revenue or $4.1 million and $1.2 million, respectively, as a result of changes in contract estimates related to projects in progress at the beginning of the respective period.
For the year ended April 27, 2024, our operating income was positively impacted by a net amount of 1.0 percent of overtime revenue, or $4.1 million. These changes are a result of changes in contract estimates related to projects in progress at the beginning of the respective period.
We had $14.5 million of retainage on long-term contracts included in receivables and contract assets as of April 27, 2024, which we expect to collect within one year.
We had $6.8 million of retainage on long-term contracts included in receivables and contract assets as of April 26, 2025, which we expect to collect within one year.
For the years ended April 27, 2024 and April 29, 2023, our operating income was positively impacted by a net amount of 1.0% and 0.3% of overtime revenue or $4.1 million and $1.2 million, respectively, as a result of changes in contract estimates related to projects in progress at the beginning of the respective period.
For the year ended April 27, 2024, our operating income was positively impacted by a net amount of 1.0 percent of overtime revenue, or $4.1 million. These changes are a result of changes in contract estimates 29 Table of Contents related to projects in progress at the beginning of the respective period.
Commercial : The decrease in net sales and orders was driven by volatility in order bookings of larger sized Spectacular LED video displays projects, there were fewer projects in the market as compared to prior years, and a contraction in digital billboards deployed by our OOH customers.
Commercial : The decrease in net sales was driven by volatility in order bookings of larger-sized Spectacular LED video display projects, and there were fewer projects in the market as compared to prior years. Order bookings increased due to the continued market adoption of digital display technology.
Our focus has been to advance product features aligned with customer needs and to reduce product costs. We focused these efforts on both standard product and control offerings and in new emerging areas, including microLED products and new control capabilities.
Our focus has been to advance product features aligned with customer needs and to reduce product costs. We focused these efforts on both standard product and control offerings and in new emerging areas, including micro-LED products and new control capabilities. Interest income (expense), net increased primarily due to higher cash levels invested in interest-bearing accounts offsetting interest expense.
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.
Additional other items impacting the rate were valuation allowances on equity investments, state taxes, and a prior year provision to return adjustments reduced in part by tax benefits from permanent tax credits. See “Note 12.
The comparison of fiscal 2023 with fiscal 2022, including the results of operations and liquidity, can be found in Item 7 section of our Annual Report on Form 10-K for fiscal 2023 filed with the SEC on July 12, 2023, which comparison is incorporated by reference herein.
The comparison of fiscal 2024 with fiscal 2023, including the results of operations and liquidity, can be found in Item 7 section of our Annual Report on Form 10-K for fiscal 2024 filed with the SEC on June 26, 2024 under the sections entitled “Results of Operations - Consolidated Performance Summary” and “Results of Operations - Reportable Segment Performance Summary,” which sections are incorporated by reference herein.
O ur effective tax rate for fiscal 2024 was 35.9 percent. The effective income tax rate for fiscal 2024 was primarily impacted due to the convertible note fair value adjustment to expense that is not deductible for tax purposes.
Income tax expense de creased due to the year-over-year decrease in Income before income taxes. O ur effective tax rate for fiscal 2025 was negative 73.0 percent. The effective income tax rate for fiscal 2025 was primarily impacted due to the Convertible Note fair value adjustment to expense that is not deductible for tax purposes.
We believe the audiovisual industry fundamentals of increased use of LED display systems across industries and our development of new technologies, services, and sales channels will drive long-term growth for our Company. 25 Table of Contents RESULTS OF OPERATIONS Consolidated Performance Summary The following is an analysis of changes in key items included in the statements of operations for fiscal year 2024 as compared to fiscal year 2023. 2024 % of Net sales (1) 2023 % of Net sales (1) Dollar Change (1) Percent Change (1) Net sales $ 818,083 100.0 % $ 754,196 100.0 % $ 63,887 8.5 % Cost of sales 595,640 72.8 602,841 79.9 (7,201) (1.2) Gross profit 222,443 27.2 151,355 20.1 71,088 47.0 Operating expenses: Selling 56,954 7.0 56,655 7.5 299 0.5 General and administrative 42,632 5.2 38,747 5.1 3,885 10.0 Product design and development 35,742 4.4 29,989 4.0 5,753 19.2 Goodwill impairment — — 4,576 0.6 (4,576) (100.0) Total operating expenses 135,328 16.5 129,967 17.2 5,361 4.1 Operating income 87,115 10.6 21,388 2.8 65,727 307.3 Nonoperating (expense) income: Interest (expense) income, net (3,418) (0.4) (920) (0.1) (2,498) 271.5 Change in fair value of convertible note (16,550) (2.0) — — (16,550) — Other expense and debt issuance costs write-off, net (13,096) (1.6) (7,211) (1.0) (5,885) 81.6 Income before income taxes 54,051 6.6 13,257 1.8 40,794 307.7 Income tax expense 19,430 2.4 6,455 0.9 12,975 201.0 Net income $ 34,621 4.2 % $ 6,802 0.9 % $ 27,819 409.0 % Diluted earnings per share $ 0.74 $ 0.15 $ 0.59 397.8 % Diluted weighted average shares outstanding 46,543 45,521 1,022 2.2 % Orders $ 740,171 $ 680,954 $ 59,217 8.7 % ( 1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
We believe the audiovisual industry fundamentals of increased use of LED display systems across industries and our development of new technologies, services, and sales channels will drive long-term growth for our Company. 28 Table of Contents RESULTS OF OPERATIONS Consolidated Performance Summary The following is an analysis of changes in key items included in the statements of operations for fiscal year 2025 as compared to fiscal year 2024. 2025 % of Net sales (1) 2024 % of Net sales (1) Dollar Change (1) Percent Change (1) Net sales $ 756,477 100.0 % $ 818,083 100.0 % $ (61,606) (7.5) % Cost of sales 560,990 74.2 595,640 72.8 (34,650) (5.8) Gross profit 195,487 25.8 222,443 27.2 (26,956) (12.1) Operating expenses: Selling 60,011 7.9 56,954 7.0 3,057 5.4 General and administrative 63,498 8.4 42,632 5.2 20,866 48.9 Product design and development 38,860 5.1 35,742 4.4 3,118 8.7 Total operating expenses 162,369 21.5 135,328 16.5 27,041 20.0 Operating income 33,118 4.4 87,115 10.6 (53,997) (62.0) Nonoperating income (expense): Interest income (expense), net 1,347 0.2 (3,418) (0.4) 4,765 (139.4) Change in fair value of convertible note (22,521) (3.0) (16,550) (2.0) (5,971) (36.1) Other expense and debt issuance costs write-off, net (17,795) (2.4) (13,096) (1.6) (4,699) 35.9 (Loss) income before income taxes (5,851) (0.8) 54,051 6.6 (59,902) (110.8) Income tax expense 4,270 0.6 19,430 2.4 (15,160) (78.0) Net (loss) income $ (10,121) (1.3) % $ 34,621 4.2 % $ (44,742) (129.2) % Diluted earnings per share $ (0.21) $ 0.74 $ (0.95) (128.4) % Diluted weighted average shares outstanding 47,587 46,543 1,044 2.2 % Orders $ 781,347 $ 740,171 $ 41,176 5.6 % ( 1) Amounts are calculated based on unrounded numbers and therefore may not recalculate using the rounded numbers provided.
For fiscal 2024, these expenses totaled $6.5 million, including $3.1 million in cost of sales, $1.2 million in selling, $1.4 million in general and administrative, and $0.8 million in product design and development. In fiscal 2023, the amounts achieved were immaterial. Selling expense s were relatively flat.
In fiscal 2025, the amounts achieved for variable compensation and profit sharing linked to operating margins were immaterial. In fiscal 2024, the amounts achieved totaled $6.5 million, consisting of $3.1 million in cost of sales, $1.2 million in selling, $1.4 million in general and administrative, and $0.8 million in product design and development.
Display and control technologies and related professional services continue to advance. A majority of digital displays are constructed using standard surface mount display technology. Micro-LED technologies (also referred to as narrow pixel pitch) are being used and advanced, especially for displays installed for short viewing distances. Global investments have been made to advance these technologies and to increase manufacturing capacity.
A majority of digital displays are constructed using standard surface mount display technology. Chip on board technologies are advancing for narrow pixel pitch (“NPP”) applications. Micro-LED technologies (also referred to as NPP) are being used and advanced, especially for displays installed for short viewing distances.
Live Events business unit had the largest dollar impact of $4.5 million and $0.9 million gross negative impacts, there were 1.7% and 0.3% of overtime revenue sales in Live Events. The remaining business units had immaterial gross positive and gross negative changes. See "Note 1. Nature of Business and Summary of Significant Accounting Policies" for more information regarding revenue recognition.
For fiscal 2024, the Live Events business unit had the largest gross positive impact of $4.5 million and $0.9 million gross negative impact, which represented 1.7 percent and 0.3 percent of overtime revenue sales in Live Events, respectively. For both fiscal 2025 and fiscal 2024, the remaining business units had immaterial gross positive and gross negative changes. See “Note 1.
We believe cash flow from operations, existing lines of credit, and access to debt and capital markets will be sufficient to meet our current liquidity needs, and we have committed liquidity and cash reserves in excess of our anticipated funding requirements.
We believe cash flow from operations, existing lines of credit, and access to debt and capital markets will be sufficient to meet our current liquidity needs. Our cash equivalent balances consist of high-quality, short-term money market instruments.
Other expense and debt issuance costs write-off, net is primarily comprised of $10.1 million of losses and impairments recorded for equity method affiliates, and expensing of $3.4 million of debt issuance costs related to the Convertible Note. Income tax expense increased due to the year-over-year increase in Income before income taxes.
Other expense and debt issuance costs write-off, net for fiscal 2025 as compared to the same period one year ago was primarily due to the provision for losses on loans to equity method affiliates of $15.5 million, compared to expensing $3.4 million of debt issuance costs related to the Convertible Note issuance and $6.4 million for impairments recorded for equity method affiliates in fiscal 2024 .
Net cash provided by financing activities during fiscal 2024 resulted from closing on a $25.0 million Convertible Note financing and the $15.0 million mortgage financing to add liquidity to the Company. These inflows were offset by the payoff of our previous credit line of $17.8 million, expending $7.2 million of debt issuance costs, and principal payments made on the mortgage.
These inflows were partially offset by the payoff of our previous credit line of $17.8 million, expending $7.2 million of debt issuance costs, and principal payments made on the mortgage financing. Debt and Cash The Credit Facility consists of the ABL, which is a $60.0 million asset-based revolving credit facility, and the $15.0 million Delayed Draw Loan.
Increases in contract assets, accounts receivable and decreases in customer deposits and contract liabilities use of cash were offset by reductions in inventory. Net cash used in investing activities: During fiscal 2024, purchases of property and equipment totaled $17.0 million and investments in and advances to affiliates were $5.1 million.
Net cash used in investing activities: During fiscal 2025 and fiscal 2024, purchases of property and equipment totaled $19.5 million and $17.0 million, respectively, and investments in affiliates were $4.6 million and $5.1 million, respectively.
Nature of Business and Summary of Significant Accounting Policies" of the Notes to our Consolidated Financial Statements included in this Form 10-K, the following discussion is intended to highlight and describe those accounting policies that are especially critical to the preparation of our consolidated financial statements.
Nature of Business and Summary of Significant Accounting Policies” of the Notes to our Consolidated Financial Statements included in this Form 10-K for more information regarding revenue recognition.
We engage in a full range of activities: marketing and sales, engineering and product design and development, manufacturing, technical contracting, professional services and customer service and support. Known Trends and Uncertainties: The supply chain and operating environment continued to stabilize over the past eighteen months post-pandemic and allowed for a more efficient production and fulfillment of orders.
We engage in a full range of activities: marketing and sales, engineering and product design and development, manufacturing, technical contracting, professional services, and customer service and support. Known Trends and Uncertainties During fiscal 2024, we converted pandemic-related, pent-up backlog into record levels of sales and gross profit.
As we are a project-based business, large sized project orders can impact levels of orders. During fiscal 2024, fewer large sized projects were booked to orders in Commercial and International because there were fewer large projects available in the market place.
During fiscal 2025, fewer large-sized projects were booked to orders in the Live Events and Transportation business units because there were fewer large projects available in the market place. Gross profit percentage decrease is attributable to sales mix differences between periods and a lower sales volume during fiscal 2025 as compared to fiscal 2024.
Gross profit as a percentage of sales improved 2.9 points for the factors noted above. Selling expenses remained relatively flat in dollars and increased as a percentage of sales because of the change in sales volume.
Gross profit as a percentage of sales declined 6.9 points primarily attributable to the sales volume and sales mix differences between periods. Selling expenses remained flat in dollars while increasing 0.6 points due to a lower sales volume.
The changes in working capital, particularly changes in inventory, accounts payable, accounts receivable, and contract assets and 31 Table of Contents liabilities, are impacted by the sports market and construction seasonality.
Working Capital Working capital was $209.4 million and $209.7 million as of April 26, 2025 and April 27, 2024, respectively. This remained relatively flat year over year, but we note changes in working capital can be impacted by changes in inventory, accounts payable, accounts receivable, and contract assets and liabilities, which are impacted by the sports market and construction seasonality.
See "Note 1. Nature of Business and Summary of Significant Accounting Policies" for more information regarding revenue recognition. Order volume growth is attributable to a stable macroeconomic environment in North America, to the continued use and market adoption of digital display technology, and to our success in capturing existing and new customers orders for larger project-based sports and transportation business.
Order volume growth is attributable to the continued use and market adoption of digital display technology and to our success in capturing existing and new customer orders in the Spectacular and Out‐of‐Home markets in our Commercial business unit.
For additional information on financing agreements, see "Note 7. Financing Agreements" of the Notes to our Consolidated Financial Statements included in this Form 10-K. Working Capital Working capital was $209.7 million and $132.5 million as of April 27, 2024 and April 29, 2023, respectively.
We were in compliance with all debt covenants as of April 26, 2025, and we expect to remain in compliance with those covenants for at least the next 12 months. For additional information on financing agreements, see “Note 7. Financing Agreements” and “Note 18. Subsequent Events” of the Notes to our Consolidated Financial Statements included in this Form 10-K.
In fiscal 2023, we recorded a goodwill impairment of $2.3 million impacting operating income, with no such impact in fiscal 2024. 30 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Year Ended (in thousands) April 27, 2024 April 29, 2023 Dollar Change Net cash (used in) provided by: Operating activities $ 63,241 $ 15,024 $ 48,217 Investing activities (21,306) (25,388) 4,082 Financing activities 15,122 17,568 (2,446) Effect of exchange rate changes on cash (69) (522) 453 Net increase in cash, cash equivalents and restricted cash $ 56,988 $ 6,682 $ 50,306 Net cash provided by operating activities: The $63.2 million in cash provided by operating activities was the result of improved profitability offset by the net growth in operating assets and liabilities.
Even with efforts to lower selling and other operational costs, our International business unit operated at a negative contribution margin. 33 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Year Ended (in thousands) April 26, 2025 April 27, 2024 Dollar Change Net cash (used in) provided by: Operating activities $ 97,713 $ 63,241 $ 34,472 Investing activities (23,782) (21,306) (2,476) Financing activities (27,449) 15,122 (42,571) Effect of exchange rate changes on cash (653) (69) (584) Net increase (decrease) in cash, cash equivalents and restricted cash $ 45,829 $ 56,988 $ (11,159) Net cash provided by operating activities: The $97.7 million in cash provided by operating activities for fiscal 2025 was the result of business profitability and net positive changes in operating asset and liabilities primarily due to the receivable and contract asset collections and our initiatives to lower inventory offset by payments of accounts payable and income taxes.
Debt and Cash We maintain the $60.0 million ABL maturing on May 11, 2027 subject to customary covenants and conditions. As of April 27, 2024, our total borrowing capacity was $39.5 million, there were no borrowings outstanding, and there was $5.3 million used to secure letters of credit outstanding, leaving $34.2 million available to borrow.
As of April 26, 2025, we had no borrowings against the ABL and $36.3 million of borrowing capacity on the ABL after $3.4 million used to secure Letters of Credit outstanding.
We regularly adjust our sales and marketing activities and staffing levels to achieve current and expected future sales levels.
We regularly adjust our sales and marketing activities and staffing levels to achieve current and expected future sales levels. For the year ended April 26, 2025, our operating income was negatively impacted by a net amount of 0.3 percent of overtime revenue, or $1.2 million.
Factors impacting gross profit in fiscal 2023 included ongoing supply chain disruptions and inflationary challenges in materials, freight and personnel related costs. Total warranty expense as a percent of sales increased to 2.3 percent for fiscal 2024 as compared to 2.1 percent during fiscal 2023.
Total warranty expense as a percent of sales decreased to 1.6 percent for fiscal 2025 as compared to 2.3 percent during fiscal 2024 primarily due to higher warranty expense in the Live Events and Transportation business in fiscal 2024 that did not occur in fiscal 2025.
Gross profit percentage increase is attributable to past strategic pricing actions, the record sales volume over our fixed manufacturing cost structure, stabilization of input costs, and fewer supply chain and operational disruptions during fiscal 2024 as compared to fiscal 2023.
Gross profit improvements in the Commercial and Transportation business units are attributable to strategic pricing actions, 32 Table of Contents closely matching manufacturing capacity to demand, and stabilization of input costs. Fewer supply chain and operational disruptions paired with our investments to increase capacity allowed for improved operational efficiency.
Removed
The expansion of use of digital display systems in the global market continues post-pandemic despite a number of factors that can impact customers committing to a system. In addition to often being discretionary purchases, a customer's decision to purchase a system can be dependent on factors such as macroeconomic environment, interest rates levels, regulatory environments, geopolitical events, and competitive factors.
Added
In fiscal 2025 and beyond, we are more dependent on the timing, size, and profitability profile of the orders we win and market conditions to be able to generate sales and gross profit at similar levels.
Removed
The use of artificial intelligence and other software advances continues to improve content creation and digital display monitoring systems. Inflation in parts supply, labor, and other resources continued to stabilize during fiscal 2024. Over the past decade, the cost to produce digital solutions has declined, which has caused a decline of digital solution pricing.
Added
We expect the expansion of the use of digital display systems in the global market over the coming years; however, recent governmental regulations and orders and related geopolitical reactions and changes to or uncertainty around federal funding priorities can impact customers’ willingness to invest in digital display systems, which can impact the timing and levels of orders.
Removed
We must sell more products to generate the same or a greater level of net sales as in previous fiscal years. Competitors' offerings, actions and reactions can vary and change over time or in certain customer situations. Projects with multimillion-dollar revenue potential attract competition, and competitors can use marketing or other tactics to win business.
Added
For example, announcements from the new United States presidential administration about increased and expansive import tariffs and 26 Table of Contents federal funding priorities has created near-term uncertainty about economic conditions. In recent months, we have observed an increasing number of extended quote times, which we believe is partially attributable to these conditions.
Removed
In addition, percentages may not add in total due to rounding. Net Sales: The stable operating environment and supply chain combined with our past investments in capacity resulted in a more efficient fulfillment process and a return to market expected lead times. These conditions and strong order levels resulted in the growth of net sales.
Added
As a result, although quoting activity was high, order volume timing was more difficult to predict, which made predicting fiscal 2025 orders more difficult than in fiscal 2024. In March and April 2025, the Trump Administration announced a series of additional special tariffs, some of which have been temporarily paused.
Removed
These conditions are in contrast to the fiscal year 2023 operating environment where we 26 Table of Contents faced manufacturing material supply and labor shortages which extended lead times and delayed the conversion of orders into sales.
Added
The additional special tariffs in effect as of April 26, 2025 include tariffs of 10 percent on all or substantially all products imported by the Company and an additional tariff on substantially all products of Chinese origin.
Removed
All expense lines increased for variable compensation and profit sharing linked to operating margins achieved in fiscal year 2024 as compared to amounts achieved in fiscal year 2023.
Added
In addition, in April 2025, the Trump Administration announced a series of so-called “reciprocal” tariffs on dozens of countries with which the United States has a trade deficit. On April 9, 2025, the Trump Administration announced a 90-day pause in the implementation of these reciprocal tariffs (other than the reciprocal tariffs on China, which are discussed above).
Removed
Personnel related wages and benefits expense increases were offset by less bad debt charges and third party commission related costs. General and administrative increased for additional personnel wage and benefits and increased staffing levels for our digital transformation strategies, offset by lower professional fees. Product design and development increased primarily due to personnel-related expenses and increased staffing levels.
Added
On May 14, 2025, following negotiations with China, the Trump Administration announced a new trade agreement under which both the United States and China agreed to reduce their additional tariffs while retaining a 10 percent baseline tariff during a 90-day suspension period.
Removed
Interest (expense) income, net increase was the result of the May 2023 closing on the Convertible Note and asset-based and mortgage financings at higher borrowed values and interest rates than the utilization of our previous line of credit during fiscal 2023 .
Added
On May 28, 2025, a three-judge panel of the United States Court of International Trade (“CIT”) held that President Trump’s recent imposition of tariffs pursuant to the International Emergency Economic Powers Act (the “IEEPA”) is unlawful.
Removed
Change in fair value of Convertible Note results from accounting for the Convertible Note we issued during fiscal 2024, under the fair value option. The fair value change was primarily caused by the increase in value of the embedded features of the note as the stock price has increased since inception of the note.
Added
On May 29, 2025, in response to President Trump’s appeal of the CIT’s ruling, the United States Court of Appeals for the Federal Circuit issued an administrative stay of the decision while it considers President Trump’s appeal.
Removed
The effective income tax rate for fiscal 2023 was impacted due to valuation allowances on equity investments and on foreign net operating losses in Ireland, goodwill impairment, state taxes, a mix of taxes in foreign countries where the tax rate is higher 27 Table of Contents than in the United States, as well as a prior year provision to return adjustments reduced in part by tax benefits from permanent tax credits.
Added
This development introduces further uncertainty, as the long-term direction of U.S.-China trade policy remains contingent on ongoing negotiations and future compliance with the agreement. Competitors importing products from China will also be impacted by the Chinese tariffs.
Removed
In addition, percentages may not add in total due to rounding 29 Table of Contents All segments' improved contribution margin is mostly attributable to improved gross profit as a percentage of sales.
Added
On May 30, 2025, the Trump Administration announced an increase in tariffs on steel and aluminum imports, raising the rates from 25 percent to 50 percent. This action was presented as part of a broader effort to support domestic industry and address national security concerns.
Removed
Gross profit improved due to past strategic pricing actions, stabilization of input costs, and the record sales volume over our fixed manufacturing cost structure aided by fewer supply chain and operational disruptions during fiscal 2024 as compared to fiscal 2023.
Added
Following this, on June 10, 2025, a federal appeals court issued a stay on the lower court’s ruling against tariffs imposed under the IEEPA, allowing those tariffs to remain in effect while the appeal is under review.
Removed
Fewer supply chain and operational disruptions paired with our investments to increase capacity allowed for improved operational efficiency and fulfillment of beginning year backlog and new orders to result in increased sales. During fiscal year 2024, we returned to market expected lead times.
Added
On June 12, 2025, the administration extended the 10 percent baseline “reciprocal” tariffs on most countries through July 9, 2025, and on Chinese-origin goods through August 12, 2025. We expect that increases in tariffs will increase the Company’s cost of sales, although their timing and precise effects are unpredictable.
Removed
Live Events : The increase in net sales was driven by fulfilling pent-up order backlog and returning to market acceptable lead times for new order bookings. Order bookings increased because of an active market of upgrades in sports-related facilities, primarily in colleges and universities.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+0 added−0 removed7 unchanged
Biggest changeThis sensitivity analysis disregards the possibilities that rates can move in opposite directions and that losses from one geographic area may be offset by gains from another geographic area. 33 Table of Contents Over the long term, net sales to international markets are expected to increase as a percentage of total net sales and, consequently, a greater portion of our business could be denominated in foreign currencies.
Biggest changeOver the long term, net sales to international markets are expected to increase as a percentage of total net sales and, consequently, a greater portion of our business could be denominated in foreign currencies.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Foreign Currency Exchange Rates Our results of operations could be affected by factors such as changes in foreign currency rates or weak economic conditions in foreign markets. We derive net sales in United States dollars and other currencies including Canadian dollars, Euros, British pounds, Australian dollars, or other currencies.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Foreign Currency Exchange Rates Our results of operations could be affected by factors such as changes in foreign currency rates or weak economic conditions in foreign markets. We derive net sales in United States dollars and other currencies, including Canadian dollars, Euros, British pounds, Australian dollars, and other currencies.
We incur expenses in currencies other than United States dollars relating to specific contracts with customers and for our operations outside the United States If we believe currency risk in any foreign location or with respect to specific sales or purchase transaction is significant, we utilize foreign exchange hedging contracts to manage our exposure to the currency fluctuations.
We incur expenses in currencies other than United States dollars relating to specific contracts with customers and for our operations outside the United States If we believe currency risk in any foreign location or with respect to specific sales or purchase transactions is significant, we utilize foreign exchange hedging contracts to manage our exposure to the currency fluctuations.
Periodically, we enter into pricing agreements or purchasing contracts under which we agree to purchase a minimum amount of product in exchange for guaranteed price terms over the length of the contract, which generally does not exceed one year. 34 Table of Contents
Periodically, we enter into pricing agreements or purchasing contracts under which we agree to purchase a minimum amount of product in exchange for guaranteed price terms over the length of the contract, which generally does not exceed one year. 37 Table of Contents
As a result, operating results may become more subject to fluctuations based upon changes in the exchange rates of certain currencies in relation to the United States dollar.
As a result, operating results may become more subject to fluctuations based upon changes in the exchange rates of certain currencies in relation to the 36 Table of Contents United States dollar.
There were no foreign currency agreements outstanding as of April 27, 2024. These contracts are marked to market each balance sheet date and are not designated as hedges. See "Note 15. Derivative Financial Instruments" of the Notes to our Consolidated Financial Statements included in this Form 10-K for further details.
There were no foreign currency agreements outstanding as of April 26, 2025. These contracts are marked to market each balance sheet date and are not designated as hedges. See “Note 15. Derivative Financial Instruments” of the Notes to our Consolidated Financial Statements included in this Form 10-K for further details.
For fiscal 2024, 9.0 percent of net sales were derived in currencies other than United States dollars.
For fiscal 2025, 10.6 percent of net sales were derived in currencies other than United States dollars.
Of our $81.3 million in cash balances as of April 27, 2024, $67.8 million were denominated in United States dollars, of which $0.3 million were held by our foreign subsidiaries. As of April 27, 2024, we had an additional $13.5 million in cash balances denominated in foreign currencies, of which $8.0 million was maintained in accounts of our foreign subsidiaries.
Of our $127.5 million in cash balances as of April 26, 2025, $112.8 million were denominated in United States dollars, of which $0.9 million were held by our foreign subsidiaries. As of April 26, 2025, we had an additional $14.7 million in cash balances denominated in foreign currencies, of which $12.3 million was maintained in accounts of our foreign subsidiaries.
We estimate that a 10 percent change in all foreign exchange rates would impact our reported income before taxes by approximately $0.5 million.
We estimate that a 10 percent change in all foreign exchange rates would impact our reported income before taxes by approximately $0.4 million. This sensitivity analysis disregards the possibilities that rates can move in opposite directions and that losses from one geographic area may be offset by gains from another geographic area.

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