Daktronics reported a significant reduction in warranty costs of approximately $2 million compared to both the prior quarter and the same period last year, helping to deliver positive bottom-line results despite declining revenues. The company is executing a strategic redesign of its entire outdoor display product family to increase manufacturing standardization while maintaining customer flexibility, with shipments expected to begin in the fourth quarter of fiscal 2010. Management noted extremely aggressive pricing from competitors across most business areas, which they believe is unsustainable but disruptive in the short term, and the overall win rate is down slightly. International quoting activity has increased significantly over the last six to eight months, and the company recently secured notable orders for a shopping mall in Australia and a theater in Paris. Product development spending is expected to rise and likely exceed 5% of sales in the short term, while capital expenditures for the year are projected in the $15 million to $17 million range.
Daktronics IncAggressive pricing from competitors is unsustainable, benefiting Daktronics long-term.
NVIDIA Corporation