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Acuity Reports Fiscal 2025 Third-Quarter Results
Strong Performance Delivers Sales Growth in Both Lighting and Intelligent Spaces Delivered Net Sales of $1.2B, an Increase of 22% Compared to the Prior Year Delivered Operating Profit of $140M, Down 4 % Compared to the Prior Year; Grew Adjusted Operating Profit to $222M, Up 33% Compared to the Prior Year Delivered Diluted EPS of $3.12, Down 14% Compared to the Prior Year; Grew Adjusted Diluted EPS to $5.12, Up 23% Compared to the Prior Year ATLANTA, June 26, 2025 (GLOBE NEWSWIRE) -- Acuity Inc. (NYSE: AYI), ("Acuity"), a market-leading industrial technology company, delivered net sales of $1.2 billion in the third quarter of fiscal 2025 ended May 31, 2025, an increase of $210.5 million, or 21.7 percent, compared to the prior year. "We delivered strong performance in the third quarter of fiscal 2025," stated Neil Ashe, Chairman, President and Chief Executive Officer of Acuity Inc. "We grew net sales, expanded our adjusted operating profit and adjusted operating profit margin and we increased our adjusted diluted earnings per share. We generated strong cash flow and allocated capital effectively. " During the third quarter of fiscal 2025, we accelerated productivity actions in our ABL segment that resulted in $29.7 million of special charges. These charges included the elimination of brands, associate severance, and facility reorganization. Operating profit was $139.8 million in the third quarter of fiscal 2025, a decrease of $5.5 million, or 3.8 percent, compared to the prior year. Operating profit as a percent of net sales was 11.9 percent in the third quarter of fiscal 2025, a decrease of 310 basis points compared to the prior year. Adjusted operating profit was $221.7 million in the third quarter of fiscal 2025, an increase of $54.6 million, or 32.7 percent, compared to the prior year. Adjusted operating profit as a percent of net sales was 18.8 percent in the third quarter of fiscal 2025, an increase of 150 basis points compared to the prior year. Diluted earnings per share was $3.12 in the third quarter of fiscal 2025, a decrease of $0.50, or 13.8 percent, compared to the prior year. Adjusted diluted earnings per share was $5.12 in the third quarter of fiscal 2025, an increase of $0.97, or 23.4 percent, from $4.15 in the prior year. Segment Performance Acuity Brands Lighting ("ABL") ABL generated net sales of $923.2 million in the third quarter of fiscal 2025, an increase of $24.7 million, or 2.7 percent, compared to the prior year. Operating profit was $134.0 million in the third quarter of fiscal 2025, a decrease of $17.5 million, or 11.6 percent, compared to the prior year. Operating profit as a percent of ABL net sales was 14.5 percent in the third quarter of fiscal 2025, a decrease of 240 basis points compared to the prior year. Adjusted operating profit was $173.9 million in the third quarter of fiscal 2025, an increase of $11.8 million, or 7.3 percent, compared to the prior year. Adjusted operating profit as a percent of ABL net sales was 18.8 percent in the third quarter of fiscal 2025, an increase of 80 basis points compared to the prior year. Acuity Intelligent Spaces ("AIS") AIS generated net sales of $264.1 million in the third quarter of fiscal 2025, an increase of $188.4 million, or 248.9 percent, compared to the prior year. Included in net sales are $172.8 million from three months of QSC performance. Operating profit was $27.4 million in the third quarter of fiscal 2025, an increase of $14.9 million compared to the prior year. Operating profit as a percent of AIS net sales was 10.4 percent in the third quarter of fiscal 2025, a decrease of 610 basis points compared to the prior year. Adjusted operating profit was $62.3 million in the third quarter of fiscal 2025, an increase of $45.0 million compared to the prior year. Adjusted operating profit as a percent of AIS net sales was 23.6 percent in the third quarter of fiscal 2025, an increase of 70 basis points compared to the prior year. Cash Flow and Capital Allocation Net cash from operating activities was $398.9 million for the first nine months of fiscal 2025. We closed the QSC acquisition and acquired M3 Innovation, increased our dividend by 13 percent to 17 cents per share and repurchased approximately 344,000 shares of common stock for a total of $91.3 million. Call Details We will host a conference call at 8:00 a.m. ET today, Thursday, June 26, 2025. Neil Ashe, Chief Executive Officer of Acuity Inc. will lead the call. The conference call and earnings release can be accessed via our Investor Relations section of our website at A replay of the call will also be posted to the Investor Relations website within two hours of the completion of the conference call and will be available on the website for a limited time. About Acuity Acuity Inc. (NYSE: AYI) is a market-leading industrial technology company. We use technology to solve problems in spaces, light and more things to come. Through our two business segments, Acuity Brands Lighting (ABL) and Acuity Intelligent Spaces (AIS), we design, manufacture, and bring to market products and services that make a valuable difference in people's lives. We achieve growth through the development of innovative new products and services, including lighting, lighting controls, building management solutions, and an audio, video and control platform. We focus on customer outcomes and drive growth and productivity to increase market share and deliver superior returns. We look to aggressively deploy capital to grow the business and to enter attractive new verticals. Acuity Inc. is based in Atlanta, Georgia, with operations across North America, Europe and Asia. The Company is powered by approximately 13,000 dedicated and talented associates. Visit us at Non-GAAP Financial Measures This news release includes the following non-generally accepted accounting principles ('GAAP') financial measures: 'adjusted operating profit' and 'adjusted operating profit margin' for total company and by segment; for total company only we additionally include: "adjusted gross profit", "adjusted gross profit margin", 'adjusted net income;' 'adjusted diluted EPS;' 'earnings before interest, taxes, depreciation and amortization ('EBITDA');" "EBITDA margin;" 'adjusted EBITDA;' and "adjusted EBITDA margin". These non-GAAP financial measures are provided to enhance the reader's overall understanding of our current financial performance and prospects for the future. Specifically, management believes that these non-GAAP measures provide useful information to investors by excluding or adjusting items for amortization of acquired intangible assets, share-based payment expense, acquired profit in inventory, acquisition-related items, and special charges. We also provide 'free cash flow' ('FCF') to enhance the reader's understanding of our ability to generate additional cash from its business. Management typically adjusts for these items for internal reviews of performance and uses the above non-GAAP measures for baseline comparative operational analysis, decision making and other activities. Management believes these non-GAAP measures provide greater comparability and enhanced visibility into our results of operations as well as comparability with many of its peers, especially those companies focused more on technology and software. Non-GAAP financial measures included in this news release should be considered in addition to, and not as a substitute for or superior to, results prepared in accordance with GAAP. The most directly comparable GAAP measures for adjusted gross profit and adjusted gross profit margin for total company are 'gross profit' and 'gross profit margin,' respectively, which include the impact of acquired profit in inventory. Adjusted gross profit margin is adjusted gross profit divided by net sales for total company. The most directly comparable GAAP measures for adjusted operating profit and adjusted operating profit margin for total company and by segment are 'operating profit' and 'operating profit margin,' respectively, which include the impact of amortization of acquired intangible assets, share-based payment expense, acquired profit in inventory, acquisition-related costs, and special charges. Adjusted operating profit margin is adjusted operating profit divided by net sales for total company and by segment. The most directly comparable GAAP measures for adjusted net income and adjusted diluted EPS are 'net income' and 'diluted EPS,' respectively, which include the impact of amortization of acquired intangible assets, share-based payment expense, acquired profit in inventory, acquisition-related costs, and special charges. Adjusted diluted EPS is adjusted net income divided by diluted weighted average shares outstanding. The most directly comparable GAAP measure for EBITDA is 'net income', which includes the impact of net interest expense, income taxes, depreciation and amortization of acquired intangible assets. EBITDA margin is EBITDA divided by net sales for total company. The most directly comparable GAAP measure for adjusted EBITDA is 'net income', which includes the impact of net interest expense, income taxes, depreciation, amortization of acquired intangible assets, share-based payment expense, acquired profit in inventory, acquisition-related items, special charges, and miscellaneous (income) expense, net. Adjusted EBITDA margin is adjusted EBITDA divided by net sales for total company. A reconciliation of each measure to the most directly comparable GAAP measure is available in this news release. We define FCF as net cash provided by operating activities less purchases of property, plant and equipment. A calculation of this measure is available in this news release. Our non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures used by other companies, have limitations as an analytical tool, and should not be considered in isolation or as a substitute for GAAP financial measures. Our presentation of such measures, which may include adjustments to exclude unusual or non-recurring items, should not be construed as an inference that our future results will be unaffected by other unusual or non-recurring items. Forward-Looking Information This press release contains 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the 'Act'). Forward-looking statements include, but are not limited to, statements that describe or relate to our plans, initiatives, projections, vision, goals, targets, commitments, expectations, objectives, prospects, strategies, or financial outlook, and the assumptions underlying or relating thereto. In some cases, we may use words such as 'expect,' 'believe,' 'intend,' 'anticipate,' 'estimate,' 'forecast,' 'indicate,' 'project,' 'predict,' 'plan,' 'may,' 'will,' 'could,' 'should,' 'would,' 'potential,' and words of similar meaning, as well as other words or expressions referencing future events, conditions, or circumstances, to identify forward-looking statements. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Act. Forward-looking statements are not guarantees of future performance. Our forward-looking statements are based on our current beliefs, expectations, and assumptions, which may not prove to be accurate, and are subject to known and unknown risks and uncertainties, assumptions, and other important factors, many of which are outside of our control and any of which could cause our actual results to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties are discussed in our filings with the U.S. Securities and Exchange Commission, including our most recent annual report on Form 10-K (including, but not limited to, the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations"), quarterly reports on Form 10-Q, and current reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made. This press release is not comprehensive, and for that reason, should be read in conjunction with such filings. You are cautioned not to place undue reliance on any forward-looking statements. Except as required by law, we undertake no obligation to publicly update or release any revisions to these forward-looking statements to reflect any events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events, whether as a result of new information, future events, or otherwise. ACUITY CONSOLIDATED BALANCE SHEETS(In millions, except per-share data) May 31, 2025 August 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 371.8 $ 845.8 Accounts receivable, less reserve for doubtful accounts of $2.6 and $1.9, respectively 608.6 563.0 Inventories 486.0 387.6 Prepayments and other current assets 122.6 75.1 Total current assets 1,589.0 1,871.5 Property, plant, and equipment, net 323.8 303.9 Operating lease right-of-use assets 77.8 65.6 Goodwill 1,492.6 1,098.7 Intangible assets, net 1,108.3 440.5 Deferred income taxes 21.1 2.3 Other long-term assets 33.7 32.1 Total assets $ 4,646.3 $ 3,814.6 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 409.0 $ 352.3 Current operating lease liabilities 23.3 19.2 Accrued compensation 110.2 110.1 Other current liabilities 257.0 206.3 Total current liabilities 799.5 687.9 Long-term debt 996.7 496.2 Long-term operating lease liabilities 65.6 58.1 Accrued pension liabilities 37.8 37.5 Deferred income taxes 14.3 26.0 Other long-term liabilities 148.4 130.1 Total liabilities 2,062.3 1,435.8 Stockholders' equity: Preferred stock, $0.01 par value per share; 50.0 shares authorized; none issued — — Common stock, $0.01 par value per share; 500.0 shares authorized; 54.9 and 54.6 issued, respectively 0.5 0.5 Paid-in capital 1,143.5 1,115.9 Retained earnings 4,177.1 3,909.8 Accumulated other comprehensive loss (114.6 ) (114.9 ) Treasury stock, at cost, of 24.2 and 23.8 shares, respectively (2,622.5 ) (2,532.5 ) Total stockholders' equity 2,584.0 2,378.8 Total liabilities and stockholders' equity $ 4,646.3 $ 3,814.6 ACUITY CONSOLIDATED STATEMENTS OF INCOME (Unaudited)(In millions, except per-share data) Three Months Ended Nine Months Ended May 31, 2025 May 31, 2024 May 31, 2025 May 31, 2024 Net sales $ 1,178.6 $ 968.1 $ 3,136.5 $ 2,808.7 Cost of products sold 608.4 515.9 1,649.0 1,515.7 Gross profit 570.2 452.2 1,487.5 1,293.0 Selling, distribution, and administrative expenses 400.7 306.9 1,074.5 896.7 Special charges 29.7 — 29.7 — Operating profit 139.8 145.3 383.3 396.3 Other expense: Interest expense (income), net 12.1 (1.8 ) 15.0 (1.0 ) Miscellaneous expense (income), net 2.3 (0.5 ) 5.8 1.2 Total other expense (income) 14.4 (2.3 ) 20.8 0.2 Income before income taxes 125.4 147.6 362.5 396.1 Income tax expense 27.0 33.7 79.9 92.4 Net income $ 98.4 $ 113.9 $ 282.6 $ 303.7 Earnings per share(1): Basic earnings per share $ 3.19 $ 3.70 $ 9.14 $ 9.83 Basic weighted average number of shares outstanding 30.851 30.829 30.912 30.905 Diluted earnings per share $ 3.12 $ 3.62 $ 8.92 $ 9.67 Diluted weighted average number of shares outstanding 31.565 31.477 31.673 31.420 Dividends declared per share $ 0.17 $ 0.15 $ 0.49 $ 0.43 (1) Earnings per share is calculated using unrounded numbers. Amounts in the table may not recalculate exactly due to rounding. ACUITY CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)(In millions) Nine Months Ended May 31, 2025 May 31, 2024 Cash flows from operating activities: Net income $ 282.6 $ 303.7 Adjustments to reconcile net income to cash flows from operating activities: Depreciation and amortization 86.7 68.5 Share-based payment expense 34.0 34.9 Asset impairments 16.7 — Changes in operating assets and liabilities, net of acquisitions and divestitures: Accounts receivable 10.4 42.5 Inventories 5.1 (1.2 ) Prepayments and other current assets (31.9 ) (16.3 ) Accounts payable 38.1 40.4 Other operating activities (42.8 ) (27.4 ) Net cash provided by operating activities 398.9 445.1 Cash flows from investing activities: Purchases of property, plant, and equipment (43.6 ) (41.0 ) Acquisition of business, net of cash acquired (1,189.4 ) — Other investing activities (16.3 ) (3.6 ) Net cash used for investing activities (1,249.3 ) (44.6 ) Cash flows from financing activities: Borrowings from term loan 600.0 — Repayments of term loan borrowings (100.0 ) — Repurchases of common stock (91.3 ) (88.7 ) Proceeds from stock option exercises and other 17.5 12.0 Payments of taxes withheld on net settlement of equity awards (24.0 ) (10.4 ) Dividends paid (15.3 ) (13.4 ) Other financing activities (9.3 ) — Net cash provided by (used for) financing activities 377.6 (100.5 ) Effect of exchange rate changes on cash and cash equivalents (1.2 ) 1.1 Net change in cash and cash equivalents (474.0 ) 301.1 Cash and cash equivalents at beginning of period 845.8 397.9 Cash and cash equivalents at end of period $ 371.8 $ 699.0 ACUITY NET SALES(In millions) The following tables show net sales by channel for the periods presented: Three Months Ended May 31, 2025 May 31, 2024 Increase (Decrease) Percent Change Acuity Brands Lighting: Independent sales network $ 685.3 $ 637.1 $ 48.2 7.6 % Direct sales network 101.5 97.0 4.5 4.6 % Retail sales 41.4 45.7 (4.3 ) (9.4 )% Corporate accounts 35.5 60.5 (25.0 ) (41.3 )% Original equipment manufacturer and other 59.5 58.2 1.3 2.2 % Total Acuity Brands Lighting 923.2 898.5 24.7 2.7 % Acuity Intelligent Spaces 264.1 75.7 188.4 248.9 % Eliminations (8.7 ) (6.1 ) (2.6 ) 42.6 % Total $ 1,178.6 $ 968.1 $ 210.5 21.7 % Nine Months Ended May 31, 2025 May 31, 2024 Increase (Decrease) Percent Change Acuity Brands Lighting: Independent sales network $ 1,944.4 $ 1,874.6 $ 69.8 3.7 % Direct sales network 306.1 287.4 18.7 6.5 % Retail sales 127.3 147.7 (20.4 ) (13.8 )% Corporate accounts 103.8 140.1 (36.3 ) (25.9 )% Original equipment manufacturer and other 168.2 168.6 (0.4 ) (0.2 )% Total Acuity Brands Lighting 2,649.8 2,618.4 31.4 1.2 % Acuity Intelligent Spaces 509.1 208.0 301.1 144.8 % Eliminations (22.4 ) (17.7 ) (4.7 ) 26.6 % Total $ 3,136.5 $ 2,808.7 $ 327.8 11.7 % ACUITY of Non-U.S. GAAP Measures The tables below reconcile certain GAAP financial measures to the corresponding non-GAAP measures for total Company as well as our reportable operating segments (in millions except per share data): Three Months Ended May 31, 2025 May 31, 2024 Increase (Decrease) Percent Change Net sales $ 1,178.6 $ 968.1 $ 210.5 21.7 % Gross profit (GAAP) $ 570.2 $ 452.2 $ 118.0 26.1 % Percent of net sales 48.4 % 46.7 % 170 bps Add-back: Acquired profit in inventory 19.2 — Adjusted gross profit (Non-GAAP) $ 589.4 $ 452.2 $ 137.2 30.3 % Percent of net sales 50.0 % 46.7 % 330 bps Operating profit (GAAP) $ 139.8 $ 145.3 $ (5.5 ) (3.8 )% Percent of net sales (GAAP) 11.9 % 15.0 % (310 ) bps Add-back: Amortization of acquired intangible assets 20.0 10.0 Add-back: Share-based payment expense 10.5 11.8 Add-back: Acquisition-related costs (1) 2.5 — Add-back: Acquired profit in inventory 19.2 — Add-back: Special charges 29.7 — Adjusted operating profit (Non-GAAP) $ 221.7 $ 167.1 $ 54.6 32.7 % Percent of net sales (Non-GAAP) 18.8 % 17.3 % 150 bps Net income (GAAP) $ 98.4 $ 113.9 $ (15.5 ) (13.6 )% Add-back: Amortization of acquired intangible assets 20.0 10.0 Add-back: Share-based payment expense 10.5 11.8 Add-back: Acquisition-related costs (1) 2.5 — Add-back: Acquired profit in inventory 19.2 — Add-back: Special charges 29.7 — Total pre-tax adjustments to net income 81.9 21.8 Income tax effects (18.8 ) (5.0 ) Adjusted net income (Non-GAAP) $ 161.5 $ 130.7 $ 30.8 23.6 % Diluted earnings per share (GAAP) $ 3.12 $ 3.62 $ (0.50 ) (13.8 )% Adjusted diluted earnings per share (Non-GAAP) $ 5.12 $ 4.15 $ 0.97 23.4 % Net income (GAAP) $ 98.4 $ 113.9 $ (15.5 ) (13.6 )% Percent of net sales (GAAP) 8.3 % 11.8 % (350 ) bps Interest expense (income), net 12.1 (1.8 ) Income tax expense 27.0 33.7 Depreciation 14.6 12.9 Amortization of acquired intangible assets 20.0 10.0 EBITDA (Non-GAAP) 172.1 168.7 3.4 2.0 % Percent of net sales (Non-GAAP) 14.6 % 17.4 % (280 ) bps Share-based payment expense 10.5 11.8 Acquisition-related costs (1) 2.5 — Acquired profit in inventory 19.2 — Miscellaneous expense (income), net 2.3 (0.5 ) Special charges 29.7 — Adjusted EBITDA (Non-GAAP) $ 236.3 $ 180.0 $ 56.3 31.3 % Percent of net sales (Non-GAAP) 20.0 % 18.6 % 140 bps (1) Acquisition-related items include professional fees. Three Months Ended Acuity Brands Lighting May 31, 2025 May 31, 2024 Increase (Decrease) Percent Change Net sales $ 923.2 $ 898.5 $ 24.7 2.7 % Operating profit (GAAP) $ 134.0 $ 151.5 $ (17.5 ) (11.6 )% Add-back: Amortization of acquired intangible assets 6.3 6.6 Add-back: Share-based payment expense 3.9 4.0 Add-back: Special charges 29.7 — Adjusted operating profit (Non-GAAP) $ 173.9 $ 162.1 $ 11.8 7.3 % Operating profit margin (GAAP) 14.5 % 16.9 % (240 ) bps Adjusted operating profit margin (Non-GAAP) 18.8 % 18.0 % 80 bps Three Months Ended Acuity Intelligent Spaces May 31, 2025 May 31, 2024 Increase (Decrease) Percent Change Net sales $ 264.1 $ 75.7 $ 188.4 248.9 % Operating profit (GAAP) $ 27.4 $ 12.5 $ 14.9 119.2 % Add-back: Amortization of acquired intangible assets 13.7 3.4 Add-back: Share-based payment expense 2.0 1.4 Add-back: Acquired profit in inventory 19.2 — Adjusted operating profit (Non-GAAP) $ 62.3 $ 17.3 $ 45.0 260.1 % Operating profit margin (GAAP) 10.4 % 16.5 % (610 ) bps Adjusted operating profit margin (Non-GAAP) 23.6 % 22.9 % 70 bps (In millions, except per share data) Nine Months Ended May 31, 2025 May 31, 2024 Increase (Decrease) Percent Change Net sales $ 3,136.5 $ 2,808.7 $ 327.8 11.7 % Gross profit (GAAP) $ 1,487.5 $ 1,293.0 $ 194.5 15.0 % Percent of net sales (GAAP) 47.4 % 46.0 % 140 bps Add-back: Acquired profit in inventory 29.6 — Adjusted gross profit (Non-GAAP) $ 1,517.1 $ 1,293.0 $ 224.1 17.3 % Percent of net sales (Non-GAAP) 48.4 % 46.0 % 240 bps Operating profit (GAAP) $ 383.3 $ 396.3 $ (13.0 ) (3.3 )% Percent of net sales (GAAP) 12.2 % 14.1 % (190 ) bps Add-back: Amortization of acquired intangible assets 45.5 29.9 Add-back: Share-based payment expense 34.0 34.9 Add-back: Acquisition-related costs (1) 21.2 — Add-back: Acquired profit in inventory 29.6 — Add-back: Special charges 29.7 — Adjusted operating profit (Non-GAAP) $ 543.3 $ 461.1 $ 82.2 17.8 % Percent of net sales (Non-GAAP) 17.3 % 16.4 % 90 bps Net income (GAAP) $ 282.6 $ 303.7 $ (21.1 ) (6.9 )% Add-back: Amortization of acquired intangible asset 45.5 29.9 Add-back: Share-based payment expense 34.0 34.9 Add-back: Acquisition-related costs (1) 21.2 — Add-back: Acquired profit in inventory 29.6 — Add-back: Special charges 29.7 — Total pre-tax adjustments to net income 160.0 64.8 Income tax effect (36.8 ) (14.9 ) Adjusted net income (Non-GAAP) $ 405.8 $ 353.6 $ 52.2 14.8 % Diluted earnings per share (GAAP) $ 8.92 $ 9.67 $ (0.75 ) (7.8 )% Adjusted diluted earnings per share (Non-GAAP) $ 12.81 $ 11.25 $ 1.56 13.9 % Net income (GAAP) $ 282.6 $ 303.7 $ (21.1 ) (6.9 )% Percent of net sales (GAAP) 9.0 % 10.8 % (180 ) bps Interest expense (income), net 15.0 (1.0 ) Income tax expense 79.9 92.4 Depreciation 41.2 38.6 Amortization 45.5 29.9 EBITDA (Non-GAAP) 464.2 463.6 0.6 0.1 % Percent of net sales (Non-GAAP) 14.8 % 16.5 % (170 ) bps Share-based payment expense 34.0 34.9 Miscellaneous expense, net 5.8 1.2 Special charges 29.7 — Acquisition-related costs (1) 21.2 — Acquired profit in inventory 29.6 — Adjusted EBITDA (Non-GAAP) $ 584.5 $ 499.7 $ 84.8 17.0 % Percent of net sales (Non-GAAP) 18.6 % 17.8 % 80 bps (1) Acquisition-related items include professional fees. Nine Months Ended Acuity Brands Lighting May 31, 2025 May 31, 2024 Increase (Decrease) Percent Change Net sales $ 2,649.8 $ 2,618.4 $ 31.4 1.2 % Operating profit (GAAP) $ 407.6 $ 421.3 $ (13.7 ) (3.3 )% Add-back: Amortization of acquired intangible assets 19.0 19.7 Add-back: Share-based payment expense 12.4 11.3 Add-back: Special charges 29.7 — Adjusted operating profit (Non-GAAP) $ 468.7 $ 452.3 $ 16.4 3.6 % Operating profit margin (GAAP) 15.4 % 16.1 % (70 ) bps Adjusted operating profit margin (Non-GAAP) 17.7 % 17.3 % 40 bps Nine Months Ended Acuity Intelligent Spaces May 31, 2025 May 31, 2024 Increase (Decrease) Percent Change Net sales $ 509.1 $ 208.0 $ 301.1 144.8 % Operating profit (GAAP) $ 48.1 $ 26.9 $ 21.2 78.8 % Add-back: Amortization of acquired intangible assets 26.5 10.2 Add-back: Share-based payment expense 5.5 4.8 Add-back: Acquired profit in inventory 29.6 — Adjusted operating profit (Non-GAAP) $ 109.7 $ 41.9 $ 67.8 161.8 % Operating profit margin (GAAP) 9.4 % 12.9 % (350 ) bps Adjusted operating profit margin (Non-GAAP) 21.5 % 20.1 % 140 bps Nine Months Ended May 31, 2025 May 31, 2024 Increase (Decrease) Percent Change Net cash provided by operating activities (GAAP) $ 398.9 $ 445.1 $ (46.2 ) (10.4 )% Less: Purchases of property, plant, and equipment (43.6 ) (41.0 ) Free cash flow (Non-GAAP) $ 355.3 $ 404.1 $ (48.8 ) (12.1 )% Investor Contact:Charlotte McLaughlinVice President, Investor Relations(404) 853-1456investorrelations@ Media Contact:April ApplingSenior Vice President, Corporate Marketing and Communicationscorporatecommunications@
Reuters
2 days ago
- Business
- Reuters
H&M's Q2 sales fall slightly more than expected, rise 1% in local currencies
STOCKHOLM, June 26 (Reuters) - Swedish fashion retailer H&M ( opens new tab reported on Thursday a slightly bigger drop than expected in second-quarter sales and said it expected sales in June, measured in local currencies, to rise 3%. Sales in the March-May period were 56.7 billion crowns ($5.99 billion), down from 59.6 billion a year ago. Analysts polled by LSEG had on average forecast a turnover of 57.0 billion crowns. Measured in local currencies sales were, however, up 1%. Operating profit at the world's second-largest listed fashion retailer fell to 5.91 billion crowns from 7.10 billion, against a forecast of 5.88 billion. ($1 = 9.4635 Swedish crowns)
Yahoo
3 days ago
- Business
- Yahoo
Daktronics, Inc. Announces Fiscal Year and Fourth Quarter 2025 Results
FY2025 Operating Profit of $33 million; Adjusted Operating Profit of $50 million FQ4 Operating Loss of $2 million; Adjusted Operating Income of $6 million FQ4 Orders +29% Sequentially and +17% YoY; Year-end Product Backlog of $342 million up 8% FY2025 Operating Cash Flow +55% to $98 million; Year-end Cash Balance of $128 million Business and Digital Transformation on Track; Reconfirming Three Year Forward Objectives of 7-10% Sales Growth, 10-12% operating margin, 17-20% ROIC BROOKINGS, S.D., June 25, 2025 (GLOBE NEWSWIRE) -- Daktronics, Inc. (NASDAQ:DAKT) ('Daktronics,' the 'Company,' 'we,' 'our,' or 'us'), the leading U.S.-based designer and manufacturer of best-in-class dynamic video communication displays and control systems for customers worldwide, today reported results for its fiscal year and fourth quarter ended April 26, 2025. Fiscal Q4 and full year 2025 financial highlights: Q4 sales of $172.6 million and full year 2025 sales of $756.5 million compared to $215.9 million and record sales of $818.1 million at the end of Q4 and full year 2024, respectively. On a sequential basis from the seasonally slower Q3, Q4 sales rose 15.4% Q4 gross profit as a percentage of sales of 25.0% compared to 25.7% in the year-earlier period; full year gross profit as a percentage of net sales of 25.8% decreased as compared to 27.2% for fiscal 2024 Q4 operating loss of $1.7 million compared to a profit of $19.4 million in the year-earlier period; adjusted operating income(1) was $5.8 million after excluding $7.5 million related to business and digital transformation consultant costs, legal costs associated with special corporate governance matters, and management transition costs; full-year operating income was $33.1 million compared to a record $87.1 million in fiscal 2024; full-year adjusted operating income was $49.6 million(1) after excluding $16.5 million related to business and digital transformation consultant costs, legal costs associated with special corporate governance matters, and management transition costs Q4 net loss of $9.4 million, compared to income of $2.5 million in the year-earlier period; adjusted net income(1) was $8.8 million for the quarter after excluding a provision for credit losses on affiliate loans, the non-operating non-cash debt fair value adjustment, and tax impacted operating expense adjustments; full-year net loss was $10.1 million, compared to income of $34.6 million in fiscal 2024; adjusted net income(1) was $40.1 million for full-year fiscal 2025 after excluding a non-cash allowance for credit loss on affiliate loans, the non-operating non-cash debt fair value adjustment, and tax impacted operating expense adjustments Q4 product and service orders of $240.7 million(2) increased 17.0% from $205.8 million in the year-ago period; full-year product and service orders were $781.3 million(1) up 5.6% from $740.2 million in fiscal 2024 Product order backlog was $341.6 million at April 26, 2025 compared to $316.9 million a year ago due to the robust increase in orders during Q4 of fiscal 2025(2) Q4 cash flows from operations of $22.9 million and $97.7 million for full year fiscal 2025, compared to $9.5 million and $63.2 million in the same periods a year earlier, respectively (1) Adjusted Operating Income and Adjusted Net Income are measures not defined by accounting principles generally accepted in the United States of America ("GAAP"). These non-GAAP measures are used to report our results exclusive of items that are non-recurring or not core to our operating business. We believe presenting this non-GAAP financial measurement provides investors with a consistent way to analyze our performance. For more information, see the supplemental calculation contained later in this release. (2) Orders and backlog metrics are non-GAAP measures, and our methodology for determining orders and backlog may vary from the methodology used by other companies in determining their orders and backlog amounts. For more information related to backlog, see Part I, Item 1. Business of our Annual Report on Form 10-K for the fiscal year ended April 26, 2025. Brad Wiemann, Daktronics' Interim President and Chief Executive Officer, commented, 'The Company embarked on its business transformation in fiscal 2025. A rigorous analysis and planning phase of this transformation was completed with a detailed implementation plan of action designed to support ambitious sales growth, margin improvements and top quartile ROIC targets. New orders reflect strong growth, especially in our International business unit, demonstrating continued market adoption of digital display technology and a comprehensive line of products and services. We also improved contribution margin in our Commercial and Transportation segments through better alignment of capacity to demand, lower manufacturing costs and other operating efficiencies during the year. The 54.5 percent growth in full-year cash flow generated from operations in part reflected inventory efficiency initiatives and value-based pricing increases implemented as part of the business transformation effort.' Business Transformation Update During fiscal 2025, the Company embarked on a business transformation program to achieve and sustain a higher profit growth trajectory. The investment in this program began to realize benefits in the last four months of fiscal 2025 through initiatives to reprice products to their intrinsic value to customers, raise inventory efficiency and turnover as well as leverage the Company's purchasing power to improve input costs to get to market quicker and more efficiently. The Company's increased focus on working capital management has additionally reduced accounts receivable and contract assets. In the first quarter fiscal 2026, Daktronics rolled out its Service software system, a major milestone, which will benefit the Company in streamlining processes and enhancing customer experiences through better service management and enablement of self-service options. Outlook and Tariff Backdrop The tariff environment remains highly uncertain and fluid. Since the announcement of reciprocal tariffs on April 2, 2025, tariff rates have fluctuated, including periods of increases, reductions, and temporary suspensions. Given this high degree of uncertainty with respect to tariff rates, effectiveness, exceptions and competitive reaction, Daktronics cannot reliably determine the ultimate tariff impact at this time. Daktronics remains agile and is able to implement certain measures to mitigate tariff impacts, though offsets may not be immediate. These measures include: Selective price adjustments and escalation clauses built into contracts Supply chain flexibility on many components A global manufacturing footprint that affords flexibility, including shifting production to a Daktronics lower-tariff international facility, potentially reshoring production to the U.S, or a mix of both depending on specific product cost, certainty of price or customer preference A strong and developing international growth opportunity that can further diversify the revenue base to reduce exposure to U.S.-based revenue The Company continues to focus on proactively managing the areas of the business within our control to generate profitable growth over the long term Mr. Wiemann added, 'As we enter fiscal 2026, our transformation efforts ensure we are well-positioned to capitalize on increasing market demand. Our market leadership, technological superiority, and high-quality value-based selling proposition set us apart. Our tiered product offering, supply and manufacturing capabilities, supported by a strengthened balance sheet, further enhance our competitive edge. 'Additionally, our three-year transformation plan includes expanding our presence in indoor markets, enhancing the services we offer, and focusing on our highest-growth and most profitable sales channels. We are on track to meet the financial objectives tied to this plan.' Fourth Quarter and Year to Date Results Howard Atkins, Daktronics' Acting Chief Financial Officer, commented, 'Following a record revenue year in fiscal 2024 and then an initial softness in order flows in early fiscal 2025, our teams worked to successfully drive order growth in the second half of fiscal 2025, with Q4 orders up 17.0 percent over the comparable quarter of fiscal 2024. Although net sales were not as high as orders in Q4, the lag between order growth and net sales sets the stage for solid growth in revenue as projects begin in fiscal 2026.' Growth in orders in the fourth quarter of fiscal 2025 was broadly led by strong demand in the Commercial, High School Park and Recreation, and International business units; on a sequential basis, orders increased 28.8 percent driven by strong demand across all business units. Orders for the full fiscal 2025 year increased 5.6 percent as compared to fiscal 2024 for the similar reasons in the same business units. Net sales for the fourth quarter of fiscal 2025 decreased by 20.1 percent as compared to the fourth quarter of fiscal 2024; on a sequential basis, net sales increased 15.4 percent. Net sales for fiscal 2025 decreased 7.5 percent as compared to fiscal 2024. The decrease in sales was the result of lower volumes in each business unit, primarily driven by the Live Events business unit due to order timing and buildable backlog. Gross profit as a percentage of net sales decreased to 25.0 percent for the fourth quarter of fiscal 2025 as compared to 25.7 percent in the fourth quarter of fiscal 2024. Gross profit as a percentage of net sales decreased to 25.8 percent for fiscal 2025 as compared to 27.2 percent in the prior year. The year-over-year gross profit decrease is attributable to sales mix differences between periods and a lower sales volume during fiscal 2025 as compared to fiscal 2024. Operating expenses for the fourth quarter of fiscal 2025 were $44.9 million compared to $36.0 million for the fourth quarter of fiscal 2024, an increase of 24.8 percent. Operating expenses were $162.4 million for the full fiscal 2025 year as compared to $135.3 million for the full fiscal 2024 year, an increase of 20.0 percent. The increase in operating expenses for the year was attributable to $4.4 million related to investments in staffing resources to support information technology and digital transformation plans. Additionally, the increase is due to $16.5 million unique expenses in the year which included $7.1 million in strategic and digital transformation initiatives, $6.8 million for corporate governance matters including redomiciling and shareholder relations legal and advisory costs, and $2.6 million for management transition. The above changes resulted in a negative operating margin of 1.0 percent for the fourth quarter of fiscal 2025 compared to a positive operating margin of 9.0 percent for the fourth quarter of fiscal 2024. Operating margin was 4.4 percent for fiscal 2025 as compared to 10.6 percent for fiscal 2024. The increase in interest (expense) income, net for the fourth quarter of fiscal 2025 compared to the same period one year ago was primarily due to the increase in average cash balances on which interest was earned during the year. For the fourth quarter and for the fiscal 2025, the change in fair value of the convertible note was a non-cash benefit of $2.8 million and a non-cash charge of $22.5 million, respectively. In the fourth quarter and for fiscal 2024, the Company recorded non-cash charges for fair value changes of the convertible note of $5.0 million and $16.6 million, respectively. The fair value changes were primarily caused by forced conversion of the entire Convertible Note in the third and fourth quarters of fiscal 2025 and changes in stock price over the fair value measurement periods. In fiscal 2025, the Company did not record any impairment charges for investments in affiliates, as compared to $5.3 million and $6.4 million for the fourth quarter and fiscal 2024. During the fourth quarter of fiscal 2025, a provision for possible credit losses of $15.5 million was recorded. No such loss was recorded in fiscal 2024. The Company's effective tax rate for fiscal 2025 was negative 73.0 percent. The effective income tax rate for fiscal 2025 was primarily impacted due to the convertible note fair value adjustment to expense that is not deductible for tax purposes. Additional other items impacting the rate were valuation allowances on equity investments, state taxes, as well as a write-down of deferred taxes related to debt issuance costs on the conversion of the convertible note. The effective tax rate for fiscal 2024 was 35.9 percent. The effective income tax rate for fiscal 2024 was primarily impacted due to the fair value adjustment to the convertible note that is not deductible for tax purposes. Additional other items impacting the rate were valuation allowances on equity investments, state taxes, as well as prior year provision to return adjustments reduced in part by tax benefits from permanent tax credits. Balance Sheet and Cash Flow Balance sheet quality was further strengthened in fiscal 2025. Cash, restricted cash and marketable securities totaled $127.5 million at April 26, 2025, and $12.0 million of long-term debt was outstanding as of that date. The long-term debt includes the face value of the debt of $12.4 million, net of $0.4 million of debt issuance costs. There were no draw-downs on the asset-based revolving credit facility during fiscal 2025 and $32.9 million was available to draw at April 26, 2025. We issued 4.0 million shares to convert the 9.0 percent convertible note payable and repurchased 2.1 million shares for a total of $29.5 million shares purchased at a weighted average cost of approximately $14.23 per share. In fiscal year 2025, cash flow generated from operations was $97.7 million, of which $19.5 million was used for purchases of property and equipment and $29.5 million for stock repurchase. At the end of the fiscal 2025 fourth quarter, the working capital ratio was 2.2 to 1. Inventory levels dropped 23.3 percent since the end of the 2024 fiscal year on April 27, 2024, in part due to the business transformation initiatives to optimize inventory levels. Management's focus remains on managing working capital to fund the expected growth of the Company with its current sources of liquidity. Webcast Information The Company will host a conference call and webcast to discuss its financial results today at 10:00 a.m. (Central Time). This call will be broadcast live at where related presentation materials will also be posted prior to the conference call. A webcast will be available for replay shortly after the event. About Daktronics Daktronics has strong leadership positions in, and is the world's largest supplier of, large-screen video displays, electronic scoreboards, LED text and graphics displays, and related control systems. The Company excels in the control of display systems, including those that require integration of multiple complex displays showing real-time information, graphics, animation, and video. Daktronics designs, manufactures, markets and services display systems for customers around the world in four domestic business units: Live Events, Commercial, High School Park and Recreation, and Transportation, and one International business unit. For more information, visit the Company's website at: Safe Harbor Statement Cautionary Notice: In addition to statements of historical fact, this news release contains forward-looking statements within the meaning of the federal securities laws and is intended to receive the protections of such laws. All statements, other than historical facts, included or incorporated in this presentation could be deemed forward-looking statements, particularly statements that reflect the expectations or beliefs of Daktronics, Inc. (the 'Company,' 'Daktronics,' 'we,' or 'us') concerning future events or our future financial performance. You are cautioned not to place undue reliance on forward-looking statements, which are often characterized by discussions of strategy, plans, or intentions or by the use of words such as 'may,' 'would,' 'could,' 'should,' 'will,' 'expect,' 'estimate,' 'anticipate,' 'believe,' 'intend,' 'plan,' 'forecast,' 'project,' 'predict,' 'potential,' 'continue,' or 'intend,' the negative or other variants of such terms, or other comparable terminology. The Company cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations as a result of various factors, including, but 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, the impact of adverse weather conditions, increased regulation, the imposition of tariffs, trade wars, the availability and costs of raw materials, components, and shipping services, geopolitical and governmental actions, and other risks described in the Company's Annual Report on Form 10-K for its 2024 fiscal year (the 'Form 10-K') and in other reports filed with or furnished to the U.S. Securities and Exchange Commission (the 'SEC') by the Company. You should carefully consider the trends, risks, and uncertainties described in this presentation, the Form 10-K, and other reports filed with or furnished to the SEC by the Company before making any investment decision with respect to our securities. If any of these trends, risks, or uncertainties continues or occurs, our business, financial condition, or operating results could be materially and adversely affected, the trading prices of our securities could decline, and you could lose part or all of your investment. Forward-looking statements are made in the context of information available as of the date of this news release and are based on our current expectations, forecasts, estimates, and assumptions. The Company undertakes no obligation to update or revise such statements to reflect circumstances or events occurring after this presentation except as may be required by applicable law. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement. For more information contact:INVESTOR RELATIONS:Howard Atkins, Acting Chief Financial OfficerTel (605) 692-0200Investor@ LHA Investor Relations Carolyn Capaccio / Jody Burfening DAKTIRTeam@ Daktronics, Inc. and SubsidiariesConsolidated Statements of Operations(in thousands, except per share amounts)(unaudited) Three Months Ended Year Ended April 26, 2025 April 27, 2024 April 26, 2025 April 27, 2024 Net sales $ 172,551 $ 215,880 $ 756,477 $ 818,083 Cost of sales 129,406 160,501 560,990 595,640 Gross profit 43,145 55,379 195,487 222,443 Operating expenses: Selling 15,200 15,114 60,011 56,954 General and administrative 19,727 11,555 63,498 42,632 Product design and development 9,958 9,283 38,860 35,742 44,885 35,952 162,369 135,328 Operating (loss) income (1,740 ) 19,427 33,118 87,115 Nonoperating income (expense): Interest income (expense), net 637 (466 ) 1,347 (3,418 ) Change in fair value of convertible note 2,848 (4,980 ) (22,521 ) (16,550 ) Other expense and debt issuance costs write-off, net (15,183 ) (6,814 ) (17,795 ) (13,096 ) (Loss) income before income taxes (13,438 ) 7,167 (5,851 ) 54,051 Income tax (benefit) expense (4,013 ) 4,649 4,270 19,430 Net (loss) income $ (9,425 ) $ 2,518 $ (10,121 ) $ 34,621 Weighted average shares outstanding: Basic 49,516 46,257 47,587 45,901 Diluted 49,516 46,872 47,587 46,543 (Loss) earnings per share: Basic $ (0.19 ) $ 0.05 $ (0.21 ) $ 0.75 Diluted $ (0.19 ) $ 0.05 $ (0.21 ) $ 0.74 Daktronics, Inc. and SubsidiariesConsolidated Balance Sheets(in thousands)(unaudited) April 26, 2025 April 27, 2024 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 127,507 $ 81,299 Restricted cash — 379 Accounts receivable, net 92,762 117,186 Inventories 105,839 138,008 Contract assets 41,169 55,800 Current maturities of long-term receivables 2,437 298 Prepaid expenses and other current assets 8,520 8,531 Income tax receivables 3,217 448 Total current assets 381,451 401,949 Property and equipment, net 73,884 71,752 Long-term receivables, less current maturities 1,030 562 Goodwill 3,188 3,226 Intangibles, net 568 840 Debt issuance costs, net 1,289 2,530 Right of use, investment in affiliates, and other assets 9,378 21,163 Deferred income taxes 32,104 25,862 TOTAL ASSETS $ 502,892 $ 527,884 Daktronics, Inc. and SubsidiariesConsolidated Balance Sheets (continued)(in thousands)(unaudited) April 26, 2025 April 27, 2024 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 1,500 $ 1,500 Accounts payable 46,669 60,757 Contract liabilities 69,050 65,524 Accrued expenses 41,705 43,028 Warranty obligations 12,706 16,540 Income taxes payable 375 4,947 Total current liabilities 172,005 192,296 Long-term warranty obligations 23,124 21,388 Long-term contract liabilities 18,421 16,342 Other long-term obligations 6,839 5,759 Long-term debt, net 10,487 53,164 Deferred income taxes 85 143 Total long-term liabilities 58,956 96,796 STOCKHOLDERS' EQUITY: Preferred Shares, $0.00001 par value, authorized 5,000 shares; no shares issued and outstanding — — Common stock, $0.00001 par value, authorized 115,000 shares; 53,030 and 48,121 shares issued as of April 26, 2025 and April 27, 2024, respectively — — Additional paid-in capital 189,940 117,571 Retained earnings 127,910 138,031 Treasury stock, at cost, 3,979 and 1,907 shares as of April 26, 2025 and April 27, 2024, respectively (39,759 ) (10,285 ) Accumulated other comprehensive loss (6,160 ) (6,525 ) TOTAL STOCKHOLDERS' EQUITY 271,931 238,792 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 502,892 $ 527,884 Daktronics, Inc. and SubsidiariesConsolidated Statements of Cash Flows(in thousands)(unaudited) Year Ended April 26, 2025 April 27, 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income $ (10,121 ) $ 34,621 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 19,547 19,291 (Gain) loss on sale of property, equipment and other assets (156 ) 44 Share-based compensation 2,944 2,090 Equity in loss of affiliates 3,053 3,764 Allowance for credit losses on affiliate loan 15,480 — (Recovery) provision for doubtful accounts, net (644 ) 373 Deferred income taxes, net (6,300 ) (9,069 ) Non-cash impairment charges — 6,359 Change in fair value of convertible note 22,521 16,550 Debt issuance costs write-off — 3,353 Change in operating assets and liabilities 51,389 (14,135 ) Net cash provided by operating activities 97,713 63,241 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (19,494 ) (16,980 ) Proceeds from sales of property, equipment and other assets 277 174 Proceeds from sales or maturities of marketable securities — 550 Purchases of equity and loans to equity investees (4,565 ) (5,050 ) Net cash used in investing activities (23,782 ) (21,306 ) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings on notes payable — 41,172 Payments on notes payable (2,108 ) (19,434 ) Debt issuance costs — (7,205 ) Principal payments on long-term obligations (414 ) (410 ) Payments for common shares repurchased (29,474 ) — Proceeds from exercise of stock options 5,153 1,302 Tax payments related to RSU issuances (606 ) (303 ) Net cash (used in) provided by financing activities (27,449 ) 15,122 EFFECT OF EXCHANGE RATE CHANGES ON CASH (653 ) (69 ) NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 45,829 56,988 CASH, CASH EQUIVALENTS AND RESTRICTED CASH: Beginning of period 81,678 24,690 End of period $ 127,507 $ 81,678 Daktronics, Inc. and SubsidiariesNet Sales and Orders by Business Unit(in thousands)(unaudited) Three Months Ended Twelve Months Ended April 26,2025 April 27,2024 DollarChange PercentChange April 26,2025 April 27,2024 DollarChange PercentChange Net Sales: Commercial $ 40,589 $ 38,998 $ 1,591 4.1 % $ 156,203 $ 161,626 $ (5,423 ) (3.4 )% Live Events 59,597 104,906 (45,309 ) (43.2 ) 291,484 338,508 (47,024 ) (13.9 ) High School Park and Recreation 40,477 36,409 4,068 11.2 165,921 170,349 (4,428 ) (2.6 ) Transportation 18,304 24,173 (5,869 ) (24.3 ) 81,061 85,390 (4,329 ) (5.1 ) International 13,584 11,394 2,190 19.2 61,808 62,210 (402 ) (0.6 ) $ 172,551 $ 215,880 $ (43,329 ) (20.1 )% $ 756,477 $ 818,083 $ (61,606 ) (7.5 )% Orders: Commercial $ 48,930 $ 34,084 $ 14,846 43.6 % $ 176,583 $ 135,251 $ 41,332 30.6 % Live Events 84,225 94,755 (10,530 ) (11.1 ) 283,780 321,191 (37,411 ) (11.6 ) High School Park and Recreation 59,263 44,581 14,682 32.9 176,097 148,505 27,592 18.6 Transportation 23,496 20,698 2,798 13.5 72,315 80,107 (7,792 ) (9.7 ) International 24,769 11,667 13,102 112.3 72,572 55,117 17,455 31.7 $ 240,683 $ 205,785 $ 34,898 17.0 % $ 781,347 $ 740,171 $ 41,176 5.6 %Reconciliation of Free Cash Flow*(in thousands)(unaudited) Twelve Months Ended April 26, 2025 April 27, 2024 Net cash provided by operating activities $ 97,713 $ 63,241 Purchases of property and equipment (19,494 ) (16,980 ) Proceeds from sales of property and equipment 277 174 Free cash flow $ 78,496 $ 46,435 * In evaluating its business, Daktronics considers and uses free cash flow as a key measure of its operating performance. The term free cash flow is not defined under accounting principles generally accepted in the United States of America ("GAAP") and is not a measure of operating income, cash flows from operating activities or other GAAP figures and should not be considered alternatives to those computations. Free cash flow is intended to provide information that may be useful for investors when assessing period to period results. Reconciliation of Adjusted Operating Income*(in thousands)(unaudited) Three Months Ended Twelve Months Ended April 26,2025 Percent of net sales April 27,2024 Percent of net sales April 26,2025 Percent of net sales April 27,2024 Percent of net sales Operating (loss) income (GAAP Measure) $ (1,740 ) (1.0 )% $ 19,427 9.0 % $ 33,118 4.4 % $ 87,115 10.6 % Corporate governance expenses 3,881 2.3 — — 6,825 0.9 — — Management transition 2,614 1.5 — — 2,614 0.3 — — Consultant related expenses associated with business transformation initiatives 1,031 0.6 — — 7,085 0.9 — — Adjusted operating income (non-GAAP measure) $ 5,786 3.4 % $ 19,427 9.0 % $ 49,642 6.6 % $ 87,115 10.6 % * In evaluating its business, Daktronics considers and uses adjusted operating income as a key measure of its operating performance. The term adjusted operating income is not defined under GAAP and is not a measure of operating income, cash flows from operating activities, or other GAAP figures and should not be considered alternatives to those computations. We define non-GAAP adjusted operating income as operating (loss) income plus unique expenses, for example, expenses related to business and digital transformation consultant costs and legal costs associated with special corporate governance matters. Management believes non-GAAP adjusted operating income is a useful indicator of our financial performance and our ability to generate cash flows from operations. Our definition of non-GAAP adjusted operating income may not be comparable to similarly titled definitions used by other companies. The table above reconciles non-GAAP adjusted operating income to comparable GAAP financial measures. Reconciliation of Adjusted Net Income*(in thousands)(unaudited) Three Months Ended Twelve Months Ended April 26, 2025 April 27, 2024 April 26, 2025 April 27, 2024 Net (loss) income $ (9,425 ) $ 2,518 $ (10,121 ) $ 34,621 Change in fair value of convertible note (2,848 ) 4,980 22,521 16,550 Allowance for credit losses on affiliate loan 15,480 — 15,480 — Corporate governance expenses, net of taxes 2,872 — 5,050 — Management transition, net of taxes 1,934 — 1,934 — Consultant related expenses associated with business transformation initiatives, net of taxes 763 — 5,243 — Debt issuance costs expensed due to fair value of convertible note, net of taxes — — — 2,149 Equity method affiliates impairment — 5,268 — 6,359 Adjusted net income $ 8,776 $ 12,766 $ 40,107 $ 59,679 * Adjusted net income using 26% tax rate. We disclose adjusted net income as a non-GAAP financial measurement in order to report our results exclusive of items that are not core to our operating business. We believe presenting this non-GAAP financial measurements provide investors with a consistent way to analyze our performance. Reconciliation of Long-term Debt(in thousands)(unaudited) Long-term debt consists of the following: April 26, 2025 April 27, 2024 Mortgage 12,375 13,875 Convertible note — 25,000 Long-term debt, gross 12,375 38,875 Debt issuance costs, net (388 ) (761 ) Change in fair value of convertible note — 16,550 Current portion (1,500 ) (1,500 ) Long-term debt, net $ 10,487 $ 53,164
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