Daktronics, Inc.

Good day, ladies and gentlemen, and welcome to the Daktronics Fiscal Year 2024 Third Quarter Earnings Results Conference Call. As a reminder, this conference is being recorded Wednesday, February 28th, 2024, and it is available on the company's website at www.daktronics.com. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. I would now like to turn the conference over to Ms. Carla Gatsky, Corporate Secretary for Daktronics, for some introductory remarks. Please go ahead, Carla.

Thank you, Kevin. Good morning, everyone. Thank you for participating in our third quarter earnings conference call. I would like to review our disclosure, cautioning investors and participants that in addition to statements of historical facts, we will be discussing forward-looking statements reflecting our expectations and plans about our future financial performance and future business opportunities. These forward-looking statements reflect the company's expectations or beliefs concerning future events. All forward-looking statements involve risk and opportunities that could cause actual results to differ materially from our expectations. Such risks include, but are not limited to, changes in economic and market conditions, management of growth, timing and magnitude of future contracts and orders, fluctuations in margins, the introduction of new products and technology, availability of raw materials, components and shipping services, and other important factors. These identified factors could cause actual results to differ materially from those discussed in this call in the company's 2024 quarterly earnings release. and in its most recent annual report on Form 10-K. Our second quarterly 2024 earnings release contains certain non-GAAP financial measures and was furnished to the SEC on a Form 8-K this morning. Clarify third quarter 2024 earnings release. We also made slides available for today's call All of these documents are available on the Investors section at Daktronics' website, www.daktronics.com. I'll turn the call over to our CEO, Reece Kurtenbach.

Thank you, Carla. Good morning, everyone. Thank you all for joining us today. Our third quarter and year-to-date results reflect our team's strong execution of our strategies across all our business areas. These strategies have raised the bar for execution and expectations of profitability in our operating model. As a result, we have delivered record sales and operating income to date in fiscal 2024 and drove robust operating cash generation in the third quarter. These results serve as evidence of the success of our past decisive and deliberate actions taken to adapt to challenging business conditions and to improve our customers' experience while increasing our profitability and working capital levels. The results also testify to the resiliency and strength of our teams within Dektronix and to our strategy of capturing demand in diversified markets and innovating across technology platforms. If you have opened the slide deck, I invite you to turn to slide three, titled Fiscal Third Quarter 2024 Highlights, and to follow the financial outcomes for the quarter. To put our fiscal 2020 for results delivery into perspective, our third quarter is historically a seasonally low volume quarter for revenue and therefore historically could result in a break even or even a loss making quarter. However, reflecting back to fiscal 2023 third quarter, we fulfilled back ordered work as we had new designs available to take advantage of the available parts in our supply chains. and as other supply chain related pressures were resolving. This resulted in extraordinarily high volume and high profit for the third and fourth quarter of fiscal 2023, a unique time for us. During this fiscal year's third quarter, despite a return to more traditional seasonality and fulfilling a lower volume of orders as compared to last year's surge, We drove an $8 million operating profit and generated $9 million in operating cash flow. During fiscal Q3, we experienced robust order volume of $192 million. Live events and the commercial business unit orders strengthened in the quarter and all domestic markets saw growth. Third quarter orders grew 29% more than last year's third quarter, bringing year-to-date order growth to 6.6% for the year. These increases reflect our focus on profitable order generation in our serviceable available markets, or SAM. Backlog continues to decrease from last year's built-up levels as we recognize the anniversary of the resolution of supply chain challenges and utilize our capacity to deliver customer orders at market-expected lead times. With respect to sourcing, our revamped and more diversified supply chains are functioning well across our suppliers. As we primarily compete with companies that obtain their products from China and compete on price, we continue to evaluate our price position in the market and are adjusting our prices to achieve our order attainment goals at profitable levels. Given our results to date this year and the momentum in our order flow, We feel good about our positioning to drive profitable growth and cash flow generation into the fourth quarter and beyond. For additional details on the financial results for the quarter, I'll now turn it over to Sheila.