Daktronics, Inc.

Good day and thank you for standing by. Welcome to Daktronics first quarter FY26 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Brittany Jacobson, Corporate Administration Supervisor. Please go ahead.

Thank you, Michelle. Good morning, everyone. Thank you for participating in our first quarter earnings conference call. During today's presentation, we will make 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 about future events based on information currently available to us. Of course, actual results could differ. Please refer to slide two of the presentation that accompanies today's call, our press release, and our SEC filings for information on risk factors, uncertainties and exceptions that could cause actual results to differ materially from these expectations. During this presentation, we will also refer to non-GAAP financial measures. You can find the reconciliation of each non-GAAP measure to the most directly comparable GAAP measure in the appendix to the accompanying presentation slides, which may be found on the investor relations page of our website at www.daktronics.com. Our earnings release for the 2026 first quarter, which was furnished to the SEC on a form AK this morning, also contains certain non-GAAP financial measures. Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, as well a discussion of certain limitations when using non-GAAP financial measures, are included in the earnings release, which has been posted separately to the investor relations page of our website. I'll turn the call over to Brad Wieman, interim president and CEO.

Good morning, everyone, and thank you. Thank you for joining our first quarter fiscal 2026 call. I'm joined on the call this morning by Howard Adkins, board member and acting chief financial officer We will review our fiscal 2026 Q1 results and accomplishments and then take your questions. Turning to our slide presentation on slide three. The main message we will be sharing with you today is emphasized here. We delivered a strong beginning to fiscal 2026 and to our three-year plan, ending cash balance of $136.9 million and backlog of $360 million which sets us up well for future revenue generation. Our selling teams are capturing customer demand and drove strong growth led by live events, high school park and recreation, and international. We were successful in winning three of the three large major league sports projects in Q1, along with several college and university projects. In addition, we experienced record order growth from our high school park and recreation business. This supported 35% order growth year over year, strengthening our backlog and setting us up well as we head into the remainder of fiscal 2026. We continue our work to preserve gross margins through improved value-based pricing, strong fixed cost leveraging, as well as cost control. The mix of revenue across businesses also contributed to improve gross margins. The business and digital transformation plan is in place and our execution of that plan is on track and is driving results. We also generated cash in the quarter and expanded our cash flow from operations by 34% year over year. Now turning to slide four. This is our market verticals and I'll start with our live events business. We want three of the three large major league sports projects, two major league baseball and one NHL arena. In addition to multiple college and university orders, driving orders 81% year over year and plus 10% sequentially. These projects include a variety of applications from main video, auxiliary video, fascia, ribbon, and scoring displays. We continue to enhance our products and service offerings as we expect continued growth in the live events business for both in-bowl applications, but also outside the bowl as more emphasis is placed on entertaining and informing fans through digital technology throughout the venue. This aligns with our control system capabilities, our service and subscription offerings, and our narrow pixel pitch product offerings. Our teams continue to focus on winning business aligned with our corporate transformation objectives on long-term profitable growth. Pictured here is David Booth Kansas Memorial Stadium at the University of Kansas. In our commercial business, overall demand for digital advertising solutions across the on-premise and out-of-home advertising markets saw an increase of orders by 5% from last year and a decline of 10% from the fourth quarter of fiscal 2025. This business is conducted primarily through signed company resellers and an AV integrator channel. In the on-premise area, customers are continuing to successfully transition to the next generation fuel price products, which offer quick deliveries and feature-rich enhancements. Demand in our out-of-home has been strong throughout the year, which reflects greater optimism that has been developing in both the national and independent billboard operators who are more often choosing Daktronics due to our recognized brand strength in image quality and reliability, as well as service responsiveness. The new generation digital billboard product released in the fourth quarter of fiscal 2025 is being well received by customers. Our investments in AV integrator channel continue to pay off, which is important to our indoor application growth. Pictured here is from QuickStar, which is part of the QuickTrip chain of full-service convenience stores. In our transportation business, orders tend to be large, which creates order variability from quarter to quarter. Orders decreased 4% from last year and decreased 7% from the fourth quarter of fiscal 2025 due to large order variability. We secured key aviation orders at Philadelphia, Spokane, and Southwest Wyoming airports. We are also strengthening the airport market pipeline developed through strategic partnerships. This growth is being driven by customers interested in our chip-on-board solutions, which provide better overall performance over legacy surface mount technology products. Going forward, we are focused on growing our ITS market by winning new agency approvals. The Buy America Act, or BAA, goes into effect in October 2026. We expect to benefit as a U.S. manufacturer and our teams are actively promoting the Buy America Act. Pictured here is from Texas DOT, El Paso District. Moving on to international. Our international business, which serves all end markets, our domestic segments serve outside of North America, has been an area of concentration and focused development for the past several quarters. These efforts are paying off with orders growing 22% from last year and declining 32% from a strong fourth quarter of 2025. Our largest growing market in this quarter were government and advertising. On the indoor solutions, demand for indoor solutions remains high for both government, retail, and industry customers. Pictured here is a recent installation at El Arabia in Dubai. Moving on to high school park and recreation. High school park and recreation business, we drove record order bookings for the quarter. Orders grew 36% year over year and 7% sequentially. Industry leading value propositions allow the sales team to implement value selling, which separates us from our competition. We are experiencing strong adoption of professional services, particularly in curriculum development and sports marketing. Two notable wins for the high school market include Mobile, Alabama County School District project for nine stadiums across the entire district for video display systems that included audio, Daktronics frameworks, services, and DAK classroom subscriptions. The second project highlighted is for Pat McAfee and his support of his home high school, the Plum Mustangs in Plum, Pennsylvania, through his partnership with FanDuel. This included a video display system for football and basketball. Pat McAfee specifically mentioned how much our employees cared about the project and how much he genuinely appreciated that, an endorsement that is very gratifying for our team. The high school park and recreation market continues to convert traditional scoreboards to full indoor and outdoor video. Schools of all sizes are purchasing video with the help of Daktronics Sports Marketing. In addition, Daktronics curriculum, a SAS product, teaches students career-ready production skills. Pictured here is Plum High School in Plum, Pennsylvania. Turning to slide five. New products and services are essential for continued market growth and value-added differentiation. In the first quarter, we added new models of our indoor narrow pixel pitch product to our offering, and we enhanced our indoor and outdoor fascia ribbon displays. We plan to release additional display products in the fiscal year, including LED street furniture for the out-of-home advertising market, a next generation indoor video display, a large digit fuel price system for convenience store market, and additional narrow pixel pitch products for the U.S. market. Photos shown are for a narrow pixel pitch product from Forextron in Australia, as well as an outdoor fascia ribbon display for the Charlotte Knights baseball team in Charlotte, North Carolina. Turning to slide six. With respect to business transformation, we made progress on these initiatives in the first quarter and our implementation plan is on track and driving results. Action we have taken to date include price adjustments on some products and services aligned with value selling, allowing us to preserve our value-based products and services positioning, launch of software as a service, SaaS trials, to target customers, focused approach on prioritized growth areas, both business verticals and geographies, driving faster inventory turnover and improved inventory efficiency by leveraging our platform designs to reduce complexity. We released a modernized service software system that will help us to enhance customer experience through better service management and enablement of self-service options. Further utilization of previously released artificial intelligence guided troubleshooting and technical services. making increased use of our purchasing power to improve our input costs, and simplifying some of our products, which allows us to bring them to market more quickly. And notably, we improved our operating cash flow in the first quarter, supported by the business transformation efforts. Turning to slide seven. Significant progress was made in digital transformation during first quarter of 2026. We are successfully operating on our modernized service software system that was released in May and continued technical build out of our corporate performance management tooling was accomplished. Our digital transformation goals are to build our systems to scale our operations for our growth ambitions while increasing internal efficiency and improve business engagement for customers and partners. During the remainder of 2026, we have slated these items in the digital transformation journey. Quoting platform tool change as part of our roadmap for driving faster, more efficient quotes while capturing the data that the system generates for capacity planning. An AI experimentation roadmap and governance development. Tool updates for project management to scale our teams for continued growth. continued service platform enhancements for customers, tool update for subscription management, and preparation for an ERP system upgrade. Additionally, we have plans to make further progress in our enablement of subscription management and corporate performance management, initial release for fulfillment performance reporting. and furthering our data and analytics ecosystem's roadmap and making progress on it to enhance and drive data-driven culture and build up data management practices. With that, I will now turn this over to Howard Atkins, our Acting Chief Financial Officer, to renew our financials. Howard?