Morning! Welcome to the 26th Annual Needham Growth Conference. We have a presentation coming up with Daktronics. We're pleased to have the company's CFO, Sheila Anderson, with us this morning. I'm sure everyone in our audience has, at one point or another, seen a Daktronics display. They're everywhere, in stadiums, arenas, transportation environments, schools, all sorts of live events. And with that, Sheila, I'm going to turn it over to you, and you can go through the story and bring us up to date on what's been happening at Daktronics. Well, thank you, Jim, and good morning, everyone. Thank you for attending. As Jim mentioned, I'm the Chief Financial Officer for Daktronics, and I'll be speaking about what we do. As Jim highlighted, we're everywhere. You'll see Daktronics displays in just about any venue. We work to inform, entertain, and persuade audiences through these dynamic audiovisual communication systems. Here on the screen are a few examples of those solutions that we design, manufacture, and service for life of the customer's usage of the displays. As examples, our displays include video displays, like here at this, on this building that's used for advertising, along with at quick-serve restaurants, like at the Cane's, and for outdoor advertisers, and as highlighted here in this example. Our systems are also used on roadway systems and in mass transit systems, as well as in indoor solutions for corporate headquarters, museums, retail stores, military applications, and control centers. And our control systems help operate each of these displays and help our customers utilize the displays to inform, entertain, and persuade. Today, I will review Daktronics' business. I will be discussing forward-looking beliefs and comments, so please refer to our SEC filings for more information about our detailed disclosures and our business risk factors. We're the number one North American LED video display provider and the third largest on a global market share. Over the trailing 12 months, we've had $827 million of revenue. We've done that by serving over 12,000 customers in over 120 different countries. And so why would you invest in Daktronics? Our mission is to support our customers to inform, entertain, and persuade our audiences and their audiences. We are best in class in our industry and are the only U.S. manufacturer of scale with global footprint. What differentiates Daktronics from our competitors is our U.S. base, our technology leadership, the high quality of our solutions, and our high touch service. Our target markets are large and growing, with resilient demand driven by audience engagement and customer and sports fan engagement. After addressing some of the operational challenges we experienced during the pandemic, and refinancing our balance sheet, we are poised to drive accelerating financial results by capturing growth and market share on the strength of our long-term customer relationships, our global sales and service infrastructure, our continuous innovation on designs and displays, control systems, and content creation, which is becoming a greater component of the visual communication experience. Daktronics provides interconnected systems to help our customers engage their fans. This slide articulates the end markets we serve. In our Live Events segment, we sell into major arenas like this, featured here at the New England Patriots facility, as well as in colleges and universities and other venues that showcase live performances. These sales are generally made directly. Our High School Park and Recreation segment sells increasingly sophisticated traditional scoring and video displays for enhanced sporting applications and other curriculum usage that emulate those used by the larger sports teams and that are more and more often incorporate local content and advertising. These relationships are mainly direct and also through sign companies. In our commercial segment, we serve large projects, like in Times Square. You'll recognize the Morgan Stanley displays, and about a third of the displays within the Times Square area are Daktronics displays. Or in Las Vegas, we completed the Circa sportsbook and pool displays within the past year, for example. And also, we do digital billboards and for self-promotion and advertising. We leverage both direct relationships as well as an extensive reseller network and AV integrator channel for distribution in this segment. In our Transportation segment, here's a picture of an example here. We are pre-qualified in all 50 states to offer displays, manage traffic on roadways, and communicate in rail stations and in airports. Our international segment is focused on all of these markets outside of the United States and Canada, with the exception of China itself. And our control capabilities enable our customers to operate and run their displays, show the content that is inviting, engaging, and maintain the health of their displays. You can see a picture of the control, the user interface here on screen. Here's how the segments break out by revenue and gross profit. Our live events business area, it was about 39% of sales on a trailing 12-month basis. The trailing 12-month was as of our October quarter end. We are in April year-end or our fiscal year end, which contributed $84.7 million in gross profit. That was followed by commercial at 22% and $40.1 million of gross profit. Our high school park and recreation sales accounted for 21% of the total trailing 12-month sales, or about $56.6 million. Then following, our transportation segment at 9%, international at 9%, at $22 million and $14 million in gross profit, respectively. Our global footprint is a differentiator that puts us close to our customers to maximize our quality, support, and service. We're headquartered in Brookings, South Dakota, with manufacturing here and in Sioux Falls, South Dakota, in Redwood Falls, Minnesota, and then also we have facilities for manufacturing in Ireland and in China. These factories produce in the U.S. about 80% of our overall revenue. This slide describes the exciting and durable opportunity that we're seeing in the marketplace. This is information that's measured by Futuresource Consulting. Our market share is approximately 46% in North America, or the U.S. and Canada, and approximately 5% excluding China, so anything else outside international. Futuresource predicts that our market will grow to $20.8 billion from 2023 at nine-- where it was at $9.3 billion. They predict growth in all areas and products where Daktronics does business or has capabilities in those areas. Highlight in this chart, narrow pixel pitch growth is expected, along with standard LED growth. We've invested in both standard technologies as well as in narrow pixel pitch, and the growth is expected in America and, and in Europe, as well as in Asia Pacific region, even outside of China, where Daktronics participates in. Our industry leadership and market share derives from the diversity of the customers and applications that we serve, and our growing ubiquity across all of our addressable market segments. Here again are a few examples of, of displays that we have sold throughout the country, be it in New York City with a unique display, in airports like in Minneapolis, in banks like this one in Sioux Falls, both internal and external displays that are used by Daktronics. Here's an example of the Seattle Center in the Kraken Arena, where we have display system. Another best-in-class differentiator for Daktronics is our full service offering. This slide shows the design to testing, manufacturing, installation that we have with our repeat customers. This process starts with our innovative design, often developed in collaboration with our customers, that are then proven in our reliability lab that rigorously tests our products under conditions which the display will be subject to, so that we ensure peak performance over the lifetime of the display. It then proceeds to manufacturing in our strategically placed facilities under strict quality control by our highly skilled teams, and then on to installation and ongoing support to ensure that our customers are knowledgeable about how to use the display and ensure it's operating well from installation through its lifetime. We have taken a lot of strategic action over the past three years, as many companies have been and were impacted by the pandemic. Our orders pulled back substantially during the pandemic timeframe, and then as those orders were recovering, we were faced with supply chain challenges. But what we have done is to help set us up for future success after those challenges. We are working on to diversify our supply chain. We redesigned products to have a more robust way to deliver to our customers. We've worked on normalizing inventory, we've worked on pricing and building benchmarks into our contracts for inflationary pressures or unique circumstances like we faced in the pandemic timeframe, and we also completed financing for the company to set us up for growth into the future. Going forward, we're focused on a number of areas to continue to grow profitably and generate cash. Of course, we're focused on maximizing customer experience to ensure that we're delivering on time and fulfilling our value proposition to them. We want to also improve our overall revenues from recurring revenues and control system software as a service processes. We're also increasing operational efficiencies by fine-tuning and improving our internal systems, shipping processes, and factory utilization aspects. We're working to improve our organizational and sales efficiency by driving consistency, emphasizing collaboration and cross-communication on sales and pricing. As we see this growth ahead, we're looking at ways to accelerate our investments in business automation to upgrade and enhance our internal reporting, data capture, and automated service and sales, so that we have a full integrated business planning solution for the growth we see in the business. We're working to deepen our market penetration on those areas of growth as well, to capture higher wallet share, win new customers, and we're also testing new channels and new geographies. Now that we're on firmer footing, we're also resuming our historical practice of selectively targeting tuck-in acquisitions that can enhance our technology or our vertical or geographic footprint. Over time, we've been successful in driving our growth through that innovation and technology leadership, either ahead of or in lockstep with our addressable markets growth, development, and increasing sophistication, as visual communication has permeated every aspect of the customer experience. Today, we're enjoying the growth and earnings returns of our investments in our narrow pixel pitch product line, as well as our high-resolution outdoor solutions. We're investing in future potential technologies as well, to poise us for growth in furthering narrow pixel pitch products and Micro LED. We're also investing in reflective, low-power displays, intelligent power management systems, and in software-as-a-service control solutions. As we look out into the future, there are opportunities in our transportation, international segments, and also in street-level advertising markets, along with furthering AV integrator applications as well as relationship development. This slide shows a tale of two years, some historical aspects here for the year-to-date financials for our fiscal 2024 as of October, compared to the 2023's fiscal year, ending in October of 2022. During fiscal 2023, or this time period, we were experiencing high levels of supply chain disruption on top of historical order volumes. During that time, then, we worked to stabilize our production facilities and enhance the capacity we needed to fulfill our orders. With the supply chain stabilization, and that capacity addition, we were able to increase sales during the same period, year- over- year, as well as with the actions we took in our pricing methodologies and pricing strategies, we're able to increase our overall gross profits from 16% up to 29%. As many of you will recall, we do have seasonality in our business, with the first half of the year often being more focused on the sports business and construction season, and a higher, higher volume seasonally, with Q3 having two quarters, two U.S. holidays, and also a down the sports season and construction seasonality impact, with Q4 oftentimes then increasing going forward. With that realization of the learnings, the pricing adjustments made, the capacity adjustments, and operational efficiencies we've made, we've been able to improve our overall operating income to 13.8% and continue to manage our expenses to the demands and outlook that we see. We've also financed the company. We financed the company in May of 2023, which will give us that runway to grow the company and also invest in tech and acquisitions, or take advantage of other opportunities in the marketplace as we go forward. So we're continuing to focus on revenue growth, margin expansion, and cash flow. In conclusion, we're the global industry leader in video communications with best-in-class products and service offerings. We are differentiated by our U.S. scale, our global manufacturing and servicing footprint, and our technology leadership. Our markets are large and growing with resilient demand drivers, and we're poised to accelerate our gross growth, our profit expansion, and cash flow generation after addressing the challenges that we've had these past three years. With that, I will open it up for questions. Great. Thank you, Sheila. Sheila, some of this I'm sure you covered in your fiscal Q2 call back in early December, but what have you been seeing in the market, both domestically and overseas? You know, your orders obviously came down and backlog is down, but clearly some pockets of strength and some other areas where maybe things are a little softer. Talk to us about what you discussed back in early December about the market conditions. ... Sure. Well, as we looked at the market conditions as of that time, we had a strong order booking for the year. We were pleased with that, and we were also pleased that our backlog was reduced from the year prior. At that time, that's really. We had supply chain challenges, and our lead times were really extended to our customers. We're now operating at a much, much more historic levels or normalized levels, I would say, in lead times and meeting our customer expectations, so that's all good. As we look out ahead, we look at our backlog and our order opportunities and our quoting opportunities, and our business remains strong. One of the areas that had some pullback is in our commercial area, both in the spectacular or the large, large video boards and the out-of-home boards, out-of-home advertisers. And we saw, we saw some softness there, and that often is tied to economic conditions. We also have a large customer that's reviewing their financial status, and pulled back a little bit on spend. But so that would be the areas that we saw pullback. International is also impacted by geopolitical events, and we haven't really seen the recovery like we have in the U.S. yet from the pandemic internationally. Lots of activity going on there. But overall, we think that's, you know... It is dependent on the economy, but would expect that to recover at some point in the future. Your company experienced some nice improvement in gross margins. How, as you think about inventory levels and the supply chain challenges that you've experienced, is there a higher cost component still in inventory that has to work its way through? And as that occurs, you know, put aside the seasonality of the business and whatnot, you know, what—how are you thinking about gross margins in the business? Sure. So our gross margins for the first half of the year were fantastic. We've made the pricing adjustments, as I highlighted during the presentation. We have additional capacity on board, but we're adding more automated capacity to continue to produce at a lower cost per unit. From a component perspective, we did pay much higher prices, especially 18 months ago, on components that we use. We use a lot of electronics components, and they were in high demand and hard to get to. We do still have some of that in our inventory, although I would say it's a pretty minor amount, and we are seeing some stability in pricing and some lowering, in some cases, in some of our component costs. So not only did we build up our inventory last year to accommodate, to help us operate efficiently and have the right pieces and parts to build our backlog out, that's come down, and we had some higher prices at that time. Those are starting to normalize as well on our balance sheet from an inventory perspective. Historically, the company has not been that acquisitive, but, you know, you seem to be raising the potential, the possibility of doing some tuck-in type acquisitions. What would be of interest to the company? Would they be in market adjacencies, areas that you would strengthen your position geographically? Yes, to both of those comments. Historically, we had done tuck-in acquisitions, one a year for many, many years, up until the pandemic. We have not done one now for a few years. But they would be, like you mentioned, Jim, it could be to expand geographically. About seven or eight, maybe 10 years ago now, we purchased a company in Belgium, for example, to reach the out-of-home advertisers in that region of the world. Or about six years ago, we purchased a company in Florida that enhanced some of our control system capabilities with their technology that we purchased. And we've purchased a company in Canada a number of years ago as well, that had some control system and software uniqueness that helped us enhance our overall offering to our customers. So it'd be those sort of companies via technology, be it a geographic ad, or it could be an adjacent technology that our customer, our base customers would utilize, and we'd be able to expand that across many of our market segments, would be what we're looking at to expand the company. Okay. You highlighted the control systems business and, you know, opportunities to maybe leverage more of the recurring revenue business. Give us a sense of, you know, if you can, where you are in that currently, in terms of, you know. You know, you may not be able to be specific on recurring revenue business or the control systems business, but I wanna just understand a little bit about where it is and where it could go. Sure. Currently, it's a very, very small piece of our business. We have very little recurring revenue from a control system perspective. Our teams have worked on developing the capabilities within our software system to be able to offer more of these add-on services through software as a service. And so we're really just in the infancy stage of taking that out to market and growing that piece of our business. We really have not put out an expected percent of our business that could be a SaaS model, but we are looking to grow that model. One other maybe similar experiment that we are working on and have been providing now, just rolling out this season, is a classroom experience for high schools, where we're providing a service package that allows teachers to have this curriculum as a service, that teaches the students to utilize their video equipment at their high school, and then could take that on to further education to be in the broadcast space. And we're seeing that as a nice way to grow and enhance our high school park and recreation model. As I recall, a number of years ago, we went through a period where there was a tremendous build-out of new stadium and arenas, and also a strong upgrade business in that live event business, as we saw more LED displays being incorporated in all sorts of facilities. What... How would you characterize the live events market at the moment, in terms of what you're seeing and in terms of pipeline? Yeah, we're continuing to see the use of this, our technology, to enhance the fan experience. The live events, both in professional sports as well as in college and universities, really utilize our technology to help attract the fans and attract students or athletes to those facilities. There's not a specific all stadiums renewed at one time. In our replacement cycle, between seven to 10 to 15 years, there's always a continuum of replacement cycle. We've. Our pipeline's strong. We've done some nice projects. We just announced the Tiger Stadium that we're renovating as well this season. But we see that the strong pipeline and these stadiums and arenas are also starting to decorate their interior or their concourse displays and their entertainment areas. Like this, you see at Climate Pledge Arena, there's a lot of exterior signage that is outside the bowl, that we find to be an attractive way to grow our business and continue to see a lot of live events interest because of the technologies here being used. Does the traditional LED technology still will it remain the main driver in this market? And to what extent are some of the newer technologies, we've all been hearing about Micro LEDs coming on, but, you know, maybe from a technology standpoint, what could happen over the next couple of years in certain segments of your business? Sure. I think, you know, many of this technology is there's some standard technology that was utilized in this system, for example, but there's also the traditional standard display categories. We are investing, and like in this Futuresource model, it does show that there's some ultra-narrow pixel pitch type of displays that could come on scene and be utilized out in the 2027 timeframe. We're well poised with the narrow pixel pitch product line, and that expect big growth to take advantage of the growth rate here, as well as standard. We're... In short, we're seeing both areas growing as well as ultra-narrow pixel pitch coming online. And you alluded earlier, Sheila, to the challenges in the midst of the pandemic, and you've had a nice recovery. Has that kind of worked its way through the market, where we've come back to a more normalized condition, demand condition? And obviously, your business has always been lumpy and different drivers, but, you know, are we past that point, or are there still some lingering effects from that? We are feeling quite that we're past many of the implications of the pandemic. We feel that the business is more back to normal, more normal buying patterns. Our lead times are back to expectations. Supply chain, you know, there's a hiccup here or there, but nothing like it was- ... 12-18 months ago. Okay. Good. I think, we're gonna end it there. Sheila, thank you for spending time with us this morning. I appreciate the questions, Jim, and appreciate everybody participating. Have a great day.