I see people starting to come into the room. With that, we'll start the presentation. I'm Bill Holobowski, Associate Research Director at Sidoti, and I'm very happy to welcome back Daktronics, ticker symbol DAKT, back to the Sidoti Conference. It's great having them back. A lot of good stuff happening at the company, and I think a, a really interesting story, and a lot of progress in the past year. Here to talk about that is CFO, Sheila Anderson. As is the case with all of our presentations, we will go for 30 minutes, we open the floor to Q&A as time allows at the end. If investors have any questions, please put them in the Q&A chat at the bottom of the screen, I'll curate those at the end. With that, thanks for joining us again, Sheila, and welcome. Well, thank you, Bill. I appreciate it and appreciate everyone for attending today's call. I'll tell you about Daktronics, and of course, I'll be talking about some forward information that, may or may not come true. Please review our, our SEC filings, for any further information on that. First of all, I wanna reflect back on our, mission and, we're focused on being the world's leader in informing and entertaining audiences through dynamic audio communication systems. What does that mean? It really means we need to engage our employees, develop strategic partnerships with our suppliers and, other service providers. Provide, and use our strength in our product innovation and manufacturing and service capabilities. Work to better our communities and generate an attractive return to our investors. What does that look like in pictures? We, we focus on the LED video display business, both in the U.S. and, and in, around the world. We manufacture our displays by procuring piece parts, and components around the world, here in the United States and the center of the country, in South Dakota, as well as in Minnesota and in Ireland and in Shanghai, China. We are seen as the world leader and leading supplier to the North America LED sector. We had $754 million in revenue this past fiscal year, which just ended in April of 2023. About a 20% gross margin and, and generated $30 million in EBITDA. We focus on these different business units, so different segments of businesses and sporting venues that utilize our products to advertise, inform, and persuade their audiences. These... Our technology is based on a product platform design, so we can utilize and sell the, the same or similar features and systems throughout these different end markets. We work to address all the needs in the marketplace. We help with the large system design and from design services to manufacturing to installation services. We pride ourselves in the quality and reliability of our, our products and have invested heavily in our reliability lab and other reliability type of services to make sure that our, our products can stand the test of time in both an indoor and external environment, outdoor relate, outdoor environment. We have been in business for a long time, over 55 years, and we leverage those customer relationships that we've built over those decades to win back our repeat business and win back the replacement cycle. Once a location goes digital, often they don't go back to a static usage, so every seven to 10 years, we're looking at a replacement project for the customers that we have, have earned. Not only do we manufacture for our customers and design solutions for our customers, but we offer services that in content creation or ways that they can use their displays to better serve their customers and achieve their objectives. We also provide the ongoing service and support for our customers over the long term. Roughly 10% of our business is in that service revenue line, either through maintenance agreements, time and material orders, or through these content services or other professional services. We're excited to be in this business. We've had some challenges over the pandemic years, which I'll show you a chart here shortly, but we're excited for the future because not only do we expect growth in business, but the company called Futuresource Consulting also is expecting growth over the coming years. In 2022, their expected market size globally was $8.7 million and is expected to grow to $18.8 billion in 2026. As you can see, much of this growth is expected in the Asia Pacific region, so that includes China, which is a majority of that. That's this green, greenish bar. We don't currently sell in China, but we do see there's some growth outside of the Chinese market in the APAC region, which we have sales and service support for. Also in our core markets and core geographies in the Americas and in EMEA, we're seeing growth there. I expect growth to come in, in those areas. Why is the use of LED displays and technologies growing? Well, it's really the key reasons, again, is to inform, entertain, or persuade audiences. Advertising, making shows and events, sporting events, really exciting and to capture people's attention for that entertainment or for that advertising. Included in this growth is usage of maybe the type of displays. Not only in large stadiums, where you'll see a display from a distance, but now even fitting out more of the concourses and bars and restaurants and sporting events. We turn to transportation markets, to the, the control centers and, and military applications that would use a, a closer display, is where a lot of the growth is coming to. This narrow pixel pitch LED design is also set to grow from 2022 to 2026. We hold about 45% market share in North America, smaller portion globally, because of the, the, the size of the world and the, our market focus. But this again, is an exciting reason why we see a lot of opportunity for Daktronics in the future. We're known as the industry leader. We provide a well-rounded offering of services from that engineering to the manufacturing, fulfillment, and ongoing support over the years and many different facets and many different end user types. As I mentioned before, we saw a pretty dramatic pullback in business during the pandemic. Our fiscal year ends in April, and so the beginning of the pandemic was right here at the end of our fiscal 2020. We still produced products and had orders during fiscal 2021, but at a much pullback perspective. We fell below $500 million in revenue that year. In fiscal 2022, things rebounded, and in fiscal 2023, we had a great year, just ending again in April of this year at $754 million. There was some pent-up demand during this time, we were challenged at the end of fiscal 2022 and into fiscal 2023, because of supply chain challenges that many, many companies had. We specifically were... Our suppliers of our integrated circuits, we were on short supply and were put on allocation. We were getting many less devices than we needed to complete our manufacturing processes for many of our displays. For the first quarter and a half or so of fiscal 2023, we were not very efficient and, and incurred a lot of additional costs to react to the, to the situation and purchase additional and new design, or additional components for the new designs that we created to fulfill our customers' orders. We ended the year with strong sales and, and stronger profitability and a much more stable operating environment as well, as we look into fiscal 2024. We're focused on a number of strategies also now in our fiscal 2024, continuing to growing the business profitably. We started the fiscal year with a high backlog at $401 million, and we'll continue to utilize the capacity that we put into place during fiscal 2023 at, in both people and in plant, to produce at a higher rate and, and lower that backlog. We want to, want to and have been seeing our lead times come more into a, a pre-pandemic ranges of, of lead times, which is, which is market competitive and, and good for our customers. Of course, we'll carefully manage our expenses as we grow into the future. We continue to work on our working capital, because during the fiscal 2023, we invested in our inventory levels so that we had the stability to serve our customers and serve our backlog. By decreasing our inventory levels, we believe that we're in a cash generation cycle now that will continue to build cash as we go into the future, with the, the less need of the, the amount and quantity of inventory on hand. We'll continue to work on being operationally efficient and growing into the, the new, new size and new production rates that we'll have. We'll are very focused on market production or market development as well, for our selling more of those narrow pixel pitch products and developing new AV integrator channels. Of course, we'll prioritize the highest growth markets and high, highly profitable markets, as well as we configure the portfolio of, of areas that we, we sell into, into the markets that we sell into. We also invest in product development and in, in projects that we believe will add a lot of value to Daktronics in the future. Some of those include automating some interactions with our customers and making it easier for our employees to serve our customers, and as well as other automation projects through our factories and other business processes. Finally, we're focused on building out more Integrated Business Planning capabilities for future planning as we go into this new, new growth, growth cycle. Just a little bit more then about our business before I turn it over for some questions.... We do focus on customer end markets, which we call live events, commercial, transportation, high school, park, and recreation, and then international would be anything outside of the U.S. and Canada. As you can see, live events was the largest portion of our business last year at 38%, then our commercial market at 23%, high school, park, and recreation at 19%, international is 11%, and transportation at 9%. Just to put a little picture behind when those words, live events business would be in professional sports like this, the Target Field that was renovated and new displays were put in this, for this baseball season. Then also college and universities and other arenas. Here's another example of a Arizona State's hockey arena. We do have competition, and the competition primarily comes out of the Asia Pacific region, mostly out of China, and that is true for all of our business areas. These competitors will maybe come in, through a business integrator here in the States, or come in with a from a company like a Samsung or Panasonic, as an example. We believe that there's a lot of growth drivers here in live events, albeit that's more of a stable environment. Our customers here are upgrading to larger, bigger displays. They really want to entertain the fans and also get advertising revenue on these display elements as the sporting event or the event is occurring. High school, park, and recreation market is similar in that there's a lot of sports focus here, but there's much smaller displays. Live events can be multimillion-dollar packages that we're selling, and a high school can be more in the $100,000-$500,000 range. Sometimes in larger schools, you can get into the million-dollar ranges, but we've a really good business here. The trend is to move more towards video displays, lots of high schools across the country, and that's all good. High schools have benefited from COVID funding, which has helped also drive this business. Really, much of the money for these displays comes from the advertising re-revenue that they generate and then can put back into their school systems as well, into either the sports or other curriculum events. Oops. From a growth driver perspective, here again, it's that video movements. We're also working on the communication experience as well, so usage of iPads to put up the scoring to make it a much easier control segment. We've also added some curriculum around our, our sales programs as well, to help students learn how to use our equipment, and then they can further pursue careers in production at their college or university or other sporting venues. From a commercial business unit, we focus on on-premise, which you'll see here in this casino, vid, picture, and then the out-of-home business, which is our out-of-home advertising business, and then other, other usage, usages in commercial settings, commercial business settings. I roughly would say that of this business unit, 1/3 would be that third-party advertising, 1/3 is for on-premise, and 1/3 is that spectacular or video walls that you'd see primarily in Times Square or in Las Vegas or large city centers as well. We continue to see growth here, because of the growth and adoption and use of digital. There, there can be many messages configured for that store or location. It's an effective use for advertising, so our out-of-home customers are continually now changing out displays that are seven to 10 years old, or they do continue to place new digital billboards in, in certain locations if it, it makes economic sense for them. Our transportation business focuses on the Intelligent Transportation Systems in airports and mass transit. There is the infrastructure bill that was passed that helps give this transportation segment stability for long-term business. It helps flow funds to these projects that will get greenlit. That oftentimes include a digital application. Excuse me. There's continued need for traffic management across the country, as well as advertising. This governmental funding helps, and continued infographic communication is helpful for these various transportation sectors. Our international business focuses on the sports, the spectacular, and transportation segment. I would say international, while we saw a large rebound in the U.S. and Canada, international seems to have more of a leg for us from a post-pandemic perspective. We take the same technologies and, and then market and distribute them throughout the world. We can, again compete with similar competitors outside the U.S. as we do within the U.S., and it's mostly these, these Chinese competitors, as I mentioned, or the, the large electronic competitor names. If we look a little deeper into some financial information, maybe I'll go to last year's annual results. We had a nice year. Second half was a more stable year. We've made some pricing changes in our and pricing methodologies about a year earlier from this time frame, which we're starting to work through the backlog, that was contributing to better gross margins, as well as the overall stability in our manufacturing processes because of a more stable inventory supply chain was relieved and a bit better. As you can see, we have generated free cash flow during the pandemic. Heavy year, we, we did take cash out of working capital. As we started to grow back in FY 2022, it started to reuse some cash. During FY 2023, we generated cash from operations, but did invest into the company to have this higher capacity level and tool us for growth in the future. A little bit about Daktronics. We are lumpy. We have some of these large projects that can make some of the comparisons between quarters a bit harder, but overall, we are excited about the future with opportunities for growth. With that, I'd open it up, Bill, for any questions. Sheila, thank you for the presentation. Again, participants can pop questions into the Q&A chat. I have, I have lots, so I'll, I'll be a little selfish and start there. Sounds great. The share price revival over the past year. Obviously, you had a lot of, a lot of things go your way, but just that... This is gonna be a really broad question: How should investors view Daktronics? More electronics company, more infrastructure company? How, in terms of valuation, if, if I'm new to the story and, and trying to gauge who to compare you with, domestically, what's, what's your perception of how investors should perceive your position in the market and value the stock? Sure. We, we are kind of a tough study that way. We are a little bit of each of those types of businesses. I would, I would, I would say, looking at companies in a, in a blended view. We, we are certainly a technology company and, and at the leading edge of that, but there's certainly some industrialness to our company as well, with the manufacturing side of, of, of life. It's been great to, to see the stock recovery. We have been, we've entered back into the Russell Indexes, which I think has been helpful to the overall stability of the, the company stock as well. I, I think getting through the pandemic, when, as I displayed here, our customers use our, our, our boards and our systems for informing and entertaining and communicating to audiences, and so there wasn't a lot of that gathering happening. So I think there's a lot of pullback in the system, and then, then now we're on to more stable footing as well. Good. Okay. In an earlier slide in your presentation, you, you flashed operating profit, the margin. The thing that I noticed is, well, A, do you, do you guide on operating margin? Secondly, I noticed figures 5%+ in the fiscal 2014, 2015 time frame. Can you discuss effects of why it's maybe compressed a little bit now? What is it gonna take to get back to those levels, and can you aspire to levels beyond that in the foreseeable future? Sorry. Yes. Sorry for making anyone dizzy there. No problem. Yes, our goals are to be in the upper, single digits of operating income. Like you said, something similar to back in these areas. We don't guide on revenue or operating margin just because of the lumpy nature of our business. We do see ways to get back there and have plans to get to these rates of return and operating income. No excuses here, but maybe some of the factors that impacted some of these years, we did have a warranty issue that took a couple of points off here in fiscal 16, 17, and 18. That's compressed our margins. You know, if I put a more normal margin in here, they would be maybe up towards the 4%-5%. Then we also invested in this narrow pixel pitch technology, the 18, 19, and 20 into our product development. That's all expense on the or on the income statement. That as well, would take a few points through here. During this time frame, we saw a lot of inflationary pressures. Much of our backlog was booked at a fixed price contract, so there was... There was a lot of inefficiencies through this time frame and through the COVID, COVID area. The back half of fiscal 2023, I think, is much more representative of the ongoing improvements in operating income that we're focused on. Did you change sourcing in any way? By that I mean, is there more insourcing? I think raw material, for lack of a better term, availability, was a little constrained for a period during COVID, if I recall. Are you insourcing more, or have you found new, new channels for parts that you need to ensure that on-time delivery and things of that, that nature? Yes, we've done a little bit of all of that. We redesigned some of our product lines so that we have an alternative, SKU for the pieces and components that we need, which would, would get us to different vendors as well. We've done some more insourcing of, to, to have more control over, you know, more of the metalworking areas. We've upgraded our metalworking equipment, and that really builds the, the chassis and what holds the display together, which gives us more of that in control. We're more in control of the, the build schedule and, and then, the, the costing of, of those, those areas. We've also really, the bigger impact that we've had is we've, we've modified our pricing to reflect some of these changes that we've seen electronic components actually go up in price versus down in price, which is not a normal thing in the electronics world. Usually, it's a continual down scale. We're, we're evaluating and monitoring and adjusting our pricing methodologies as well through this and have, have changed that during this time frame. Okay, good. I'll go to some of the questions that are coming into the chat now and try to combine a couple. You talked about lumpiness already, a little bit of unpredictability, perhaps. First question is on whether there's seasonality in your business, and then secondly, as to achieving more consistent profitability, which the consensus suggests you would through the end of next year. Can you talk about SG&A, whether there's the possibility to reduce that line? Sure. There is seasonality in our business. Generally, the, the sporting, the sports business, outdoor construction, and just the way our quarters work. The first couple of quarters are really heavy into the sports season. That's high schools are starting up, professional sports are starting up. Those, those systems have been installed and have been produced and in, in place. Our third quarter then is winter season, so there's a little less, little bit less work because of that. There's two major holidays for us in that, that third quarter, which gives us less production days. Q4 starts to come back for maybe the spring baseball season and the construction season again. Like I mentioned, it's a lot of the, the sports seasonality that we, we do see. From a, a managing our OpEx expenses, we, we do believe we'll, we're able to maintain or even reduce as a percentage of sales in, in that area to add some leverage. We are, however, investing in some digital, transformation type of work, so our IT spends likely will rise, for example, during this time frame. We'll, we'll work to manage that as the, as we see the top line unfold itself. Okay, great. There, there's a question tied now to free cash flow, which you, you've generated what the poster is calling very meaningful free cash flow the past two quarters, and suggests you have significant balance sheet capacity after a recent refinancing. Yes. What do you expect to do with that accumulated cash, and is the return of a dividend, possible at all in, in the near future? Sure. Yes, good point. We just did refinance the company in May of this year. That's going to give us a lot of runway to, to run the business through these ups and downs, and we'll utilize the capital in a few different ways. One, we've been, we historically have done tuck-in acquisitions that help us build out either technologies or are availability to a region that we might not have as much sales presence in, to build, build out our market presence. We'll move our focus towards looking at some of those sorts of tuck-in acquisitions that would be accretive to our value. We do have this capital, this manufacturing business to, to maintain. There's generally across all the asset needs, we, we generally spend around 3% of our sales, and we'll invest that back into capital equipment of some sort. Like the writer mentions, we, we would look to, if there's, should we pay some of our new debt back or, and should we consider the dividend or share repurchase program again? Those two programs were, were, were stopped during the, the, the pandemic time. Those are all possibilities. We'll string together a few of these profitable quarters, and then, and then we'll make more decisions at, at, with that. Got you. Those are all possibilities. Got you. Thank you. If we could squeeze in one more before any closing thoughts you may have. A poster asks, since you mentioned the market growing at a mid-teens percentage or higher for the next two years, is it fair to picture Daktronics growing at the top line at that same kind of rate? Also too, if you could squeeze this all in. With 45% domestic market share, it sounded, if I have the figure correct, wouldn't that suggest you have the, like, additional pricing power? I mean, it seems like it's, it's kind of a market you've cornered, so I'm curious about that perspective too. Sure. We do believe that we should be able to, at a minimum, follow the growth trends that's expected because of the markets and brand awareness we have and the good work that we feel our customers re-recognize us for. From a pricing perspective, we do work to balance and make sure that we're, we do have the right pricing out to the marketplace. Our competitors, though, always make pricing, you know. They have a lower pricing. We're never the low price out to our customers. We have to balance the competitors' pricing with the customer's expectations and that. There's some competitive pressure there on pricing that we just have to be very cognizant of and knowledgeable of. Got you. On the top line point, that's, that's, you know, it seems very promising, if, you grow at the market rate or higher. Any closing thoughts before we wrap up, since we've, we've reached the end of, of the presentation time? I appreciate Daktronics. If you ever have questions, please reach out to me, but we are excited for the position that we're in and the stability that is back in front of us and, and look forward to profitable growth, growth in the future. Great. We, we thank everybody for joining us this afternoon or morning, depending on where you are in the US. Also there are questions we didn't get to. If any, I could pass these along to, to you, Sheila, or, they can follow up with you directly or to myself at bholobowski@sidoti.com, we'll do what we can to get forward the, the, the pertinent questions. Sheila Anderson, CFO of Daktronics, thank you again for participating in the conference and sharing your story once again. Thank you so much. Thanks to all for attending. Everyone, have a great day.