Company Quick10K Filing
Daktronics
Price7.49 EPS0
Shares45 P/E2,047
MCap340 P/FCF-26
Net Debt-29 EBIT-2
TEV310 TEV/EBIT-137
TTM 2019-11-02, in MM, except price, ratios
10-Q 2020-02-01 Filed 2020-02-28
10-Q 2019-11-02 Filed 2019-11-27
10-Q 2019-08-03 Filed 2019-08-30
10-K 2019-04-27 Filed 2019-06-07
10-Q 2019-01-26 Filed 2019-02-22
10-Q 2018-10-27 Filed 2018-11-26
10-Q 2018-07-28 Filed 2018-08-24
10-K 2018-04-28 Filed 2018-06-08
10-Q 2018-01-27 Filed 2018-03-02
10-Q 2017-10-28 Filed 2017-12-01
10-Q 2017-07-29 Filed 2017-09-01
10-K 2017-04-29 Filed 2017-06-09
10-Q 2017-01-28 Filed 2017-03-03
10-Q 2016-10-29 Filed 2016-12-02
10-Q 2016-07-30 Filed 2016-09-02
10-K 2016-04-30 Filed 2016-06-21
10-Q 2016-01-30 Filed 2016-03-04
10-Q 2015-10-31 Filed 2015-12-04
10-Q 2015-08-01 Filed 2015-09-03
10-K 2015-05-02 Filed 2015-06-22
10-Q 2015-01-31 Filed 2015-03-06
10-Q 2014-11-01 Filed 2014-12-05
10-Q 2014-08-02 Filed 2014-09-05
10-K 2014-04-26 Filed 2014-06-12
10-Q 2014-01-25 Filed 2014-02-28
10-Q 2013-10-26 Filed 2013-11-27
10-K 2013-04-27 Filed 2013-06-12
10-Q 2013-01-26 Filed 2013-03-01
10-Q 2012-10-27 Filed 2012-11-30
10-Q 2012-07-28 Filed 2012-08-31
10-K 2012-04-28 Filed 2012-06-13
10-Q 2012-01-28 Filed 2012-03-02
10-Q 2011-10-29 Filed 2011-12-02
10-Q 2011-07-30 Filed 2011-09-02
10-K 2011-04-30 Filed 2011-06-16
10-Q 2011-01-29 Filed 2011-03-04
10-Q 2010-10-30 Filed 2010-12-03
10-Q 2010-07-31 Filed 2010-09-03
10-K 2010-05-01 Filed 2010-06-16
10-Q 2010-01-30 Filed 2010-02-25
8-K 2020-03-30 Officers, Regulation FD, Other Events, Exhibits
8-K 2020-02-26 Earnings, Exhibits
8-K 2020-02-25 Regulation FD, Exhibits
8-K 2019-12-04 Regulation FD, Exhibits
8-K 2019-11-27 Earnings, Exhibits
8-K 2019-11-15 Enter Agreement, Leave Agreement, Exhibits
8-K 2019-09-05 Regulation FD, Exhibits
8-K 2019-09-04 Officers, Shareholder Vote
8-K 2019-08-28 Earnings, Exhibits
8-K 2019-05-30 Regulation FD, Exhibits
8-K 2019-05-29 Earnings, Exhibits
8-K 2019-02-28 Regulation FD, Exhibits
8-K 2019-02-20 Earnings, Exhibits
8-K 2018-11-29 Regulation FD, Exhibits
8-K 2018-11-21 Earnings, Exhibits
8-K 2018-11-16 Enter Agreement, Shareholder Rights, Amend Bylaw, Regulation FD, Exhibits
8-K 2018-09-06 Regulation FD, Exhibits
8-K 2018-09-05 Officers, Shareholder Vote
8-K 2018-08-21 Earnings, Exhibits
8-K 2018-08-13 Officers, Exhibits
8-K 2018-05-31 Regulation FD, Exhibits
8-K 2018-05-30 Earnings, Exhibits
8-K 2018-03-01 Regulation FD, Exhibits
8-K 2018-02-20 Earnings, Exhibits

DAKT 10Q Quarterly Report

Item 1. Financial Statements
Note 1. Basis of Presentation
Note 2. Investments in Affiliates
Note 3. Earnings per Share ("Eps")
Note 4. Revenue Recognition
Note 5. Segment Reporting
Note 6. Marketable Securities
Note 7. Business Combinations
Note 8. Goodwill
Note 9. Selected Financial Statement Data
Note 10. Receivables
Note 11. Share Repurchase Program
Note 12. Leases
Note 13. Commitments and Contingencies
Note 14. Income Taxes
Note 15. Fair Value Measurement
Note 16. Derivative Financial Instruments
Note 17. Subsequent Events
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 dakt_20200201xq3xex311.htm
EX-31.2 dakt_20200201xq3xex312.htm
EX-32.1 dakt_20200201xq3xex321.htm
EX-32.2 dakt_20200201xq3xex322.htm

Daktronics Earnings 2020-02-01

Balance SheetIncome StatementCash Flow
3903122341567802012201420172020
Assets, Equity
1901491086726-152012201420172020
Rev, G Profit, Net Income
402612-2-16-302012201420172020
Ops, Inv, Fin

10-Q 1 dakt_20200201xq3x10-q.htm 10-Q Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 1, 2020
 
or
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___.
Commission File Number: 0-23246

daklogo.jpg

Daktronics, Inc.
(Exact Name of Registrant as Specified in its Charter)

South Dakota
 
46-0306862
(State or Other Jurisdiction of
Incorporation or Organization)
 
(I.R.S. Employer Identification No.)
 
 
 
201 Daktronics Drive
Brookings, SD
 
 
57006
(Address of Principal Executive Offices)
 
(Zip Code)

(605) 692-0200
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, No Par Value
DAKT
NASDAQ Global Select Market
Preferred Stock Purchase Rights
DAKT
NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes x  No ¨
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o
Accelerated filer x
Non-accelerated filer o
Smaller reporting company o
 
Emerging growth company o
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The number of shares of the registrant’s common stock outstanding as of February 24, 2020 was 45,075,748.




DAKTRONICS, INC. AND SUBSIDIARIES
FORM 10-Q
For the Quarter Ended February 1, 2020

Table of Contents

 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 








PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

DAKTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)

 
 
February 1,
2020
 
April 27,
2019
ASSETS
 
 
 
 
CURRENT ASSETS:
 
 
 
 
Cash and cash equivalents
 
$
40,316

 
$
35,383

Restricted cash
 
60

 
359

Marketable securities
 
1,727

 
26,344

Accounts receivable, net
 
80,143

 
65,487

Inventories
 
80,206

 
78,832

Contract assets
 
35,242

 
33,704

Current maturities of long-term receivables
 
5,208

 
2,300

Prepaid expenses and other current assets
 
8,093

 
8,319

Income tax receivables
 
203

 
1,087

Property and equipment and other assets available for sale
 
1,838

 
1,858

Total current assets
 
253,036

 
253,673

 
 
 
 
 
Property and equipment, net
 
66,368

 
65,314

Long-term receivables, less current maturities
 
1,650

 
1,214

Goodwill
 
7,934

 
7,889

Intangibles, net
 
3,817

 
4,906

Investment in affiliates and other assets
 
14,568

 
5,052

Deferred income taxes
 
11,352

 
11,168

TOTAL ASSETS
 
$
358,725

 
$
349,216

 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
CURRENT LIABILITIES:
 
 
 
 

Accounts payable
 
$
44,846

 
$
44,873

Contract liabilities
 
49,870

 
47,178

Accrued expenses
 
34,588

 
32,061

Warranty obligations
 
9,545

 
9,492

Income taxes payable
 
949

 
468

Total current liabilities
 
139,798

 
134,072

 
 
 
 
 
Long-term warranty obligations
 
16,170

 
14,978

Long-term contract liabilities
 
10,676

 
10,053

Other long-term obligations
 
8,000

 
1,339

Long-term income taxes payable
 
576

 
578

Deferred income taxes
 
530

 
533

Total long-term liabilities
 
35,952

 
27,481

 
 
 
 
 

1


DAKTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(continued)
(in thousands, except per share data)
(unaudited)

 
 
February 1,
2020
 
April 27,
2019
SHAREHOLDERS' EQUITY:
 
 

 
 

Common Stock, no par value, authorized 115,000,000 shares; 45,722,110 and 45,317,267 shares issued at February 1, 2020 and April 27, 2019, respectively
 
59,276

 
57,699

Additional paid-in capital
 
44,096

 
42,561

Retained earnings
 
88,407

 
93,593

Treasury Stock, at cost, 681,776 and 303,957 shares at February 1, 2020 and April 27, 2019, respectively
 
(4,163
)
 
(1,834
)
Accumulated other comprehensive loss
 
(4,641
)
 
(4,356
)
TOTAL SHAREHOLDERS' EQUITY
 
182,975

 
187,663

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
 
$
358,725

 
$
349,216

 
 
 
 
 
See notes to condensed consolidated financial statements.
 
 

 
 


2


DAKTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

 
Three Months Ended
 
Nine Months Ended
 
February 1,
2020
 
January 26,
2019
 
February 1,
2020
 
January 26,
2019
Net sales
$
127,657

 
$
115,069

 
$
482,824

 
$
441,949

Cost of sales
103,175

 
90,200

 
372,750

 
336,076

Gross profit
24,482

 
24,869

 
110,074

 
105,873

 
 
 
 
 
 
 
 
Operating expenses:
 

 
 

 
 

 
 

Selling
16,552

 
15,537

 
51,026

 
48,040

General and administrative
8,640

 
8,574

 
26,698

 
25,685

Product design and development
8,442

 
8,280

 
29,063

 
26,611

 
33,634

 
32,391

 
106,787

 
100,336

Operating (loss) income
(9,152
)
 
(7,522
)
 
3,287

 
5,537

 
 
 
 
 
 
 
 
Nonoperating (expense) income:
 

 
 

 
 

 
 

Interest income
233

 
328

 
664

 
713

Interest expense
13

 
(45
)
 
(53
)
 
(86
)
Other income (expense), net
(331
)
 
(203
)
 
(652
)
 
(423
)
 
 
 
 
 
 
 
 
(Loss) income before income taxes
(9,237
)
 
(7,442
)
 
3,246

 
5,741

Income tax expense (benefit)
3,497

 
(4,123
)
 
1,676

 
(4,120
)
Net (loss) income
$
(12,734
)
 
$
(3,319
)
 
$
1,570

 
$
9,861

 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 

 
 

 
 

 
 

Basic
45,189

 
45,018

 
45,139

 
44,834

Diluted
45,189

 
45,018

 
45,412

 
45,139

 
 
 
 
 
 
 
 
(Loss) earnings per share:
 

 
 

 
 

 
 

Basic
$
(0.28
)
 
$
(0.07
)
 
$
0.03

 
$
0.22

Diluted
$
(0.28
)
 
$
(0.07
)
 
$
0.03

 
$
0.22

 
 
 
 
 
 
 
 
See notes to condensed consolidated financial statements.
 
 
 

 
 

 
 


3


DAKTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)

 
 
Three Months Ended
 
Nine Months Ended
 
 
February 1, 2020
 
January 26,
2019
 
February 1,
2020
 
January 26,
2019
 
 
 
 
 
 
 
 
 
Net (loss) income
 
$
(12,734
)
 
$
(3,319
)
 
$
1,570

 
$
9,861

 
 
 
 
 
 
 
 
 
Other comprehensive income (loss):
 
 
 
 
 
 
 
 
Cumulative translation adjustments
 
51

 
134

 
(329
)
 
(1,560
)
Unrealized gain (loss) on available-for-sale securities, net of tax
 

 
55

 
44

 
48

Total other comprehensive income (loss), net of tax
 
51

 
189

 
(285
)
 
(1,512
)
Comprehensive (loss) income
 
$
(12,683
)
 
$
(3,130
)
 
$
1,285

 
$
8,349

 
 
 
 
 
 
 
 
 
See notes to condensed consolidated financial statements.
 
 
 
 
 
 
 
 


4


DAKTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands)
(unaudited)

 
Common Stock
 
Additional Paid-In Capital
 
Retained Earnings
 
Treasury Stock
 
Accumulated Other Comprehensive Loss
 
Total
Balance as of April 27, 2019
$
57,699

 
$
42,561

 
$
93,593

 
$
(1,834
)
 
$
(4,356
)
 
$
187,663

Net income

 

 
7,030

 

 

 
7,030

Cumulative translation adjustments

 

 

 

 
(526
)
 
(526
)
Unrealized gain (loss) on available-for-sale securities, net of tax

 

 

 

 
41

 
41

Share-based compensation

 
643

 

 

 

 
643

Employee savings plan activity
779

 

 

 

 

 
779

Dividends declared ($0.05 per share)

 

 
(2,250
)
 

 

 
(2,250
)
Treasury stock purchase

 

 

 
(1,187
)
 

 
(1,187
)
Balance as of August 3, 2019
58,478

 
43,204

 
98,373

 
(3,021
)
 
(4,841
)
 
192,193

Net income

 

 
7,274

 

 

 
7,274

Cumulative translation adjustments

 

 

 

 
146

 
146

Unrealized gain (loss) on available-for-sale securities, net of tax

 

 

 

 
3

 
3

Share-based compensation

 
541

 

 

 

 
541

Tax payments related to RSU issuances

 
(199
)
 

 

 

 
(199
)
Employee savings plan activity
798

 

 

 

 

 
798

Dividends declared ($0.05 per share)

 

 
(2,250
)
 

 

 
(2,250
)
Treasury stock purchase

 

 

 
(495
)
 

 
(495
)
Balance as of November 2, 2019
59,276

 
43,546

 
103,397

 
(3,516
)
 
(4,692
)
 
198,011

Net loss

 

 
(12,734
)
 

 

 
(12,734
)
Cumulative translation adjustments

 

 

 

 
51

 
51

Share-based compensation

 
550

 

 

 

 
550

Dividends declared ($0.05 per share)

 

 
(2,256
)
 

 

 
(2,256
)
Treasury stock purchase

 

 

 
(647
)
 

 
(647
)
Balance as of February 1, 2020
$
59,276

 
$
44,096

 
$
88,407

 
$
(4,163
)
 
$
(4,641
)
 
$
182,975

 
 
 
 
 
 
 
 
 
 
 
 
See notes to condensed consolidated financial statements.



5


DAKTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(continued)
(in thousands)
(unaudited)

 
Common Stock
 
Additional Paid-In Capital
 
Retained Earnings
 
Treasury Stock
 
Accumulated Other Comprehensive Loss
 
Total
Balance as of April 28, 2018
$
54,731

 
$
40,328

 
$
107,105

 
$
(1,834
)
 
$
(2,714
)
 
$
197,616

Net income

 

 
4,574

 

 

 
4,574

Cumulative translation adjustments

 

 

 

 
(1,139
)
 
(1,139
)
Unrealized gain (loss) on available-for-sale securities, net of tax

 

 

 

 
(13
)
 
(13
)
Share-based compensation

 
651

 

 

 

 
651

Exercise of stock options
57

 

 

 

 

 
57

Employee savings plan activity
820

 

 

 

 

 
820

Dividends declared ($0.07 per share)

 

 
(3,121
)
 

 

 
(3,121
)
Balance as of July 28, 2018
55,608

 
40,979

 
108,558

 
(1,834
)
 
(3,866
)
 
199,445

Net income

 

 
8,606

 

 

 
8,606

Cumulative translation adjustments

 

 

 

 
(555
)
 
(555
)
Unrealized gain (loss) on available-for-sale securities, net of tax

 

 

 

 
6

 
6

Share-based compensation

 
612

 

 

 

 
612

Tax payments related to RSU issuances

 
(246
)
 

 

 

 
(246
)
Dividends declared ($0.07 per share)

 

 
(3,131
)
 

 

 
(3,131
)
Balance as of October 27, 2018
55,608

 
41,345

 
114,033

 
(1,834
)
 
(4,415
)
 
204,737

Net loss

 

 
(3,319
)
 

 

 
(3,319
)
Cumulative translation adjustments

 

 

 

 
134

 
134

Unrealized gain (loss) on available-for-sale securities, net of tax

 

 

 

 
55

 
55

Share-based compensation

 
604

 

 

 

 
604

Exercise of stock options
1,261

 

 

 

 

 
1,261

Employee savings plan activity
830

 

 

 

 

 
830

Dividends declared ($0.07 per share)

 

 
(3,151
)
 

 

 
(3,151
)
Balance as of January 26, 2019
$
57,699

 
$
41,949

 
$
107,563

 
$
(1,834
)
 
$
(4,226
)
 
$
201,151

 
 
 
 
 
 
 
 
 
 
 
 
See notes to condensed consolidated financial statements.



6


DAKTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

 
Nine Months Ended
 
February 1,
2020
 
January 26,
2019
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net income
$
1,570

 
$
9,861

Adjustments to reconcile net income to net cash provided by operating activities:
 

 
 

Depreciation and amortization
13,197

 
14,054

Loss on sale of property, equipment and other assets
(6
)
 
(130
)
Share-based compensation
1,734

 
1,867

Contingent consideration adjustment

 
(956
)
Equity in loss of affiliate
430

 
392

Provision for doubtful accounts
(477
)
 
180

Deferred income taxes, net
(223
)
 
(445
)
Change in operating assets and liabilities
(10,035
)
 
7,364

Net cash provided by operating activities
6,190

 
32,187

 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES:
 

 
 

Purchases of property and equipment
(13,646
)
 
(14,081
)
Proceeds from sales of property, equipment and other assets
244

 
255

Purchases of marketable securities

 
(25,337
)
Proceeds from sales or maturities of marketable securities
24,665

 
22,341

Purchases of and loans to equity investment
(1,229
)
 
(854
)
Acquisitions, net of cash acquired

 
(2,250
)
Net cash provided by (used in) investing activities
10,034

 
(19,926
)
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES:
 

 
 

Principal payments on long-term obligations
(2,140
)
 
(440
)
Dividends paid
(6,756
)
 
(9,403
)
Proceeds from exercise of stock options

 
1,318

Payments for common shares repurchased
(2,329
)
 

Tax payments related to RSU issuances
(199
)
 
(246
)
Net cash used in financing activities
(11,424
)
 
(8,771
)
 
 
 
 
EFFECT OF EXCHANGE RATE CHANGES ON CASH
(166
)
 
62

NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
4,634

 
3,552

 
 
 
 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
 

 
 

Beginning of period
35,742

 
29,755

End of period
$
40,376

 
$
33,307

 
 
 
 
Supplemental disclosures of cash flow information:
 
 
 
Cash paid (received) for:
 

 
 

Interest
$
3

 
$
114

Income taxes, net of refunds
460

 
(1,868
)
 
 
 
 
Supplemental schedule of non-cash investing and financing activities:
 

 
 

Demonstration equipment transferred to inventory
$
10

 
$
97

Purchases of property and equipment included in accounts payable
954

 
454

Contributions of common stock under the ESPP
1,577

 
1,650

 
 
 
 
See notes to condensed consolidated financial statements.
 

 
 


7


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands, except per share data)
(unaudited)

Note 1. Basis of Presentation

Daktronics, Inc. and its subsidiaries (the “Company”, “Daktronics”, “we”, “our”, or “us”) are the world's industry leader in designing and manufacturing electronic scoreboards, programmable display systems and large screen video displays for sporting, commercial and transportation applications.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to fairly present our financial position, results of operations and cash flows for the periods presented.  The preparation of financial statements in conformity with generally accepted accounting principles in the United States ("GAAP") requires management to make estimates and assumptions affecting the reported amounts therein.  Due to the inherent uncertainty involved in making estimates, actual results in future periods may differ from those estimates.

Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.  The balance sheet at April 27, 2019, has been derived from the audited financial statements at that date, but it does not include all the information and disclosures required by GAAP for complete financial statements.  These financial statements should be read in conjunction with our financial statements and notes thereto for the year ended April 27, 2019, which are contained in our Annual Report on Form 10-K previously filed with the Securities and Exchange Commission ("SEC").  The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year.

Daktronics, Inc. operates on a 52- or 53-week fiscal year, with our fiscal year ending on the Saturday closest to April 30 of each year. When April 30 falls on a Wednesday, the fiscal year ends on the preceding Saturday. Within each fiscal year, each quarter is comprised of 13-week periods following the beginning of each fiscal year. In each 53-week year, an additional week is added to the first quarter, and each of the last three quarters is comprised of a 13-week period. The fiscal year ended April 27, 2019 consisted of 52 weeks. Fiscal 2020 will be a 53-week year; therefore, the nine months ended February 1, 2020 contains operating results for 40 weeks while the nine months ended January 26, 2019 contains operating results for 39 weeks.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the totals of the same amounts shown in the condensed consolidated statement of cash flows:
 
February 1,
2020
 
January 26,
2019
Cash and cash equivalents
$
40,316

 
$
33,281

Restricted cash
60

 
26

Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statement of cash flows
$
40,376

 
$
33,307


Recent Accounting Pronouncements

There have been no material changes to our significant accounting policies and estimates as described in our Annual Report on Form 10-K for the fiscal year ended April 27, 2019, other than described in the Accounting Standards Adopted section below.

Accounting Standards Adopted

In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (that is, lessees and lessors). ASU 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of their classification. ASU 2016-02 requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842 (Leases) and ASU 2018-11, Leases (Topic 842), Targeted Improvements, which provide (i) narrow amendments to clarify how to apply certain aspects of the new lease standard, (ii) entities with an additional transition method to adopt the new standard, and (iii) lessors with a practical expedient for separating components of a contract.


8


We adopted ASU 2016-02 and its related guidance during the first quarter of fiscal 2020 for all agreements existing as of April 28, 2019. We elected the "comparatives under Accounting Standards Codification ("ASC") 840 option" as a transitional method, which allows us to initially apply the new lease requirements at the effective date. Comparative periods were not adjusted and will continue to be reported in accordance with prior lease guidance under ASC 840. We elected the package of practical expedients, which permits us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs. In addition, we have elected the short-term lease recognition whereby we will not recognize operating leases related assets or liabilities for leases with a lease term of less than one year. We have also elected the practical expedient to not separate lease and non-lease components in the lease payments for all asset classes. This adoption did not have an impact on our condensed consolidated statements of operations, shareholders' equity and cash flows, and there was no adjustment to retained earnings. As of April 28, 2019, we recognized a right of use asset for operating leases of $11,101 and a current and non-current lease liability for operating leases of $2,745 and $8,356, respectively. The right of use operating assets are included in the "Investment in affiliates and other assets" line item, the current lease liabilities are included in the "Accrued expenses" line item, and the non-current lease liabilities are included in the "Other long-term obligations" line item in our condensed consolidated balance sheet. See "Note 12. Leases" for more information.

Accounting Standards Not Yet Adopted

In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350), which simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. A goodwill impairment will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for interim and annual periods beginning after December 15, 2019 and will require adoption on a prospective basis. We are currently evaluating the effect that adopting ASU 2017-04 will have on our condensed consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments, which provides guidance regarding the measurement and recognition of credit impairment for certain financial assets. ASU 2016-13 is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted, and will require adoption on a modified retrospective basis. We are currently evaluating the effect that adopting ASU 2016-13, including all subsequent amendments and improvements to ASC Topic 326 issued by FASB, will have on our condensed consolidated financial statements and related disclosures.

Note 2. Investments in Affiliates

Investments in affiliates over which we have significant influence are accounted for under the equity method of accounting in accordance with the provisions of ASC 323, Investments – Equity Method and Joint Ventures. Investments in affiliates over which we do not have the ability to exert significant influence over the affiliate's operating and financing activities are accounted for under the cost method of accounting in accordance with the provisions of ASC 321, Investments – Equity Securities. We have evaluated our relationships with our affiliates and have determined that these entities are not variable interest entities.

The aggregate amount of investments accounted for under the equity method was $3,268 and $3,657 at February 1, 2020 and April 27, 2019, respectively. The equity method requires us to report our share of losses up to our equity investment amount. Cash paid for investments in affiliates and loans to affiliates are included in the "Purchases of and loans to equity investment" line item in our condensed consolidated statements of cash flows. Our proportional share of the respective affiliates' earnings or losses is included in the "Other income (expense), net" line item in our condensed consolidated statements of operations. For the nine months ended February 1, 2020 and January 26, 2019, our share of the losses of our affiliates was $430 and $392, respectively.

Note 3. Earnings Per Share ("EPS")

We follow the provisions of ASC 260, Earnings Per Share, where basic EPS is computed by dividing income attributable to common shareholders by the weighted average number of common shares outstanding for the period.  Diluted EPS reflects the potential dilution which may occur if securities or other obligations to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock which share in our earnings.


9


The following is a reconciliation of the net (loss) income and common share amounts used in the calculation of basic and diluted EPS for the three and nine months ended February 1, 2020 and January 26, 2019
 
 Net (loss) income
 
 Shares
 
 Per share (loss) income
For the three months ended February 1, 2020
 
 
 
 
 
Basic (loss) earnings per share
$
(12,734
)
 
45,189

 
$
(0.28
)
    Dilution associated with stock compensation plans

 

 

Diluted (loss) earnings per share
$
(12,734
)
 
45,189

 
$
(0.28
)
For the three months ended January 26, 2019
 
 
 
 
 
Basic (loss) earnings per share
$
(3,319
)
 
45,018

 
$
(0.07
)
    Dilution associated with stock compensation plans

 

 

Diluted (loss) earnings per share
$
(3,319
)
 
45,018

 
$
(0.07
)
For the nine months ended February 1, 2020
 
 
 
 
 
Basic earnings per share
$
1,570

 
45,139

 
$
0.03

    Dilution associated with stock compensation plans

 
273

 

Diluted earnings per share
$
1,570

 
45,412

 
$
0.03

For the nine months ended January 26, 2019
 
 
 
 
 
Basic earnings per share
$
9,861

 
44,834

 
$
0.22

    Dilution associated with stock compensation plans

 
305

 

Diluted earnings per share
$
9,861

 
45,139

 
$
0.22

 
Options outstanding to purchase 2,193 shares of common stock with a weighted average exercise price of $9.92 for the three months ended February 1, 2020 and 2,308 shares of common stock with a weighted average exercise price of $9.98 for the three months ended January 26, 2019 were not included in the computation of diluted (loss) earnings per share because the effects would be anti-dilutive.

Options outstanding to purchase 2,223 shares of common stock with a weighted average exercise price of $9.95 for the nine months ended February 1, 2020 and 2,328 shares of common stock with a weighted average exercise price of $9.98 for the nine months ended January 26, 2019 were not included in the computation of diluted earnings per share because the effects would be anti-dilutive.

Note 4. Revenue Recognition

Disaggregation of revenue
In accordance with ASC 606-10-50, we disaggregate revenue from contracts with customers by the type of performance obligation and the timing of revenue recognition. We determine that disaggregating revenue in these categories achieves the disclosure objective to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors and to enable users of financial statements to understand the relationship to each reportable segment.

The following table presents our disaggregation of revenue by segments:

10


 
Three Months Ended February 1, 2020
 
Commercial
 
Live Events
 
High School Park and Recreation
 
Transportation
 
International
 
Total
Type of performance obligation
 
 
 
 
 
 
 
 
 
 
 
Unique configuration
$
7,209

 
$
27,459

 
$
1,511

 
$
7,857

 
$
9,195

 
$
53,231

Limited configuration
26,304

 
6,436

 
12,422

 
5,580

 
10,609

 
61,351

Service and other
3,367

 
6,676

 
842

 
479

 
1,711

 
13,075

 
$
36,880

 
$
40,571

 
$
14,775

 
$
13,916

 
$
21,515

 
$
127,657

Timing of revenue recognition
 
 
 
 
 
 
 
 
 
 
 
Goods/services transferred at a point in time
$
26,555

 
$
8,614

 
$
11,080

 
$
5,683

 
$
11,008

 
$
62,940

Goods/services transferred over time
10,325

 
31,957

 
3,695

 
8,233

 
10,507

 
64,717

 
$
36,880

 
$
40,571

 
$
14,775

 
$
13,916

 
$
21,515

 
$
127,657

 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended February 1, 2020
 
Commercial
 
Live Events
 
High School Park and Recreation
 
Transportation
 
International
 
Total
Type of performance obligation
 
 
 
 
 
 
 
 
 
 
 
Unique configuration
$
29,181

 
$
114,459

 
$
12,727

 
$
32,173

 
$
35,415

 
$
223,955

Limited configuration
80,193

 
25,662

 
60,349

 
19,550

 
33,663

 
219,417

Service and other
11,192

 
19,075

 
2,357

 
1,541

 
5,287

 
39,452

 
$
120,566

 
$
159,196

 
$
75,433

 
$
53,264

 
$
74,365

 
$
482,824

Timing of revenue recognition
 
 
 
 
 
 
 
 
 
 
 
Goods/services transferred at a point in time
$
81,562

 
$
30,903

 
$
55,791

 
$
19,901

 
$
34,696

 
$
222,853

Goods/services transferred over time
39,004

 
128,293

 
19,642

 
33,363

 
39,669

 
259,971

 
$
120,566

 
$
159,196

 
$
75,433

 
$
53,264

 
$
74,365

 
$
482,824

 
 
 
 
 
 
 
 
 
 
 
 


11


 
Three Months Ended January 26, 2019
 
Commercial
 
Live Events
 
High School Park and Recreation
 
Transportation
 
International
 
Total
Type of performance obligation
 
 
 
 
 
 
 
 
 
 
 
Unique configuration
$
5,942

 
$
18,491

 
$
3,053

 
$
10,095

 
$
6,798

 
$
44,379

Limited configuration
27,353

 
5,958

 
11,036

 
4,692

 
8,649

 
57,688

Service and other
3,864

 
5,546

 
709

 
603

 
2,280

 
13,002

 
$
37,159

 
$
29,995

 
$
14,798

 
$
15,390

 
$
17,727

 
$
115,069

Timing of revenue recognition
 
 
 
 
 
 
 
 
 
 
 
Goods/services transferred at a point in time
$
28,105

 
$
7,436

 
$
9,874

 
$
4,911

 
$
9,702

 
$
60,028

Goods/services transferred over time
9,054

 
22,559

 
4,924

 
10,479

 
8,025

 
55,041

 
$
37,159

 
$
29,995

 
$
14,798

 
$
15,390

 
$
17,727

 
$
115,069

 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended January 26, 2019
 
Commercial
 
Live Events
 
High School Park and Recreation
 
Transportation
 
International
 
Total
Type of performance obligation
 
 
 
 
 
 
 
 
 
 
 
Unique configuration
$
20,417

 
$
95,695

 
$
18,667

 
$
30,140

 
$
33,790

 
$
198,709

Limited configuration
82,605

 
23,243

 
53,964

 
18,970

 
29,278

 
208,060

Service and other
10,775

 
15,628

 
1,867

 
1,514

 
5,396

 
35,180

 
$
113,797

 
$
134,566

 
$
74,498

 
$
50,624

 
$
68,464

 
$
441,949

Timing of revenue recognition
 
 
 
 
 
 
 
 
 
 
 
Goods/services transferred at a point in time
$
84,584

 
$
26,796

 
$
48,932

 
$
19,410

 
$
31,364

 
$
211,086

Goods/services transferred over time
29,213

 
107,770

 
25,566

 
31,214

 
37,100

 
230,863

 
$
113,797

 
$
134,566

 
$
74,498

 
$
50,624

 
$
68,464

 
$
441,949


See "Note 5. Segment Reporting" for a disaggregation of revenue by geography.

Contract balances
Contract assets represent revenue recognized in excess of amounts billed and include unbilled receivables. Unbilled receivables, which represent an unconditional right to payment subject only to the passage of time, are reclassified to accounts receivable when they are billed according to the contract terms. Contract liabilities represent amounts billed to the clients in excess of revenue recognized to date.

The following table reflects the changes in our contract assets and liabilities:
 
February 1, 2020
 
April 27, 2019
 
Dollar Change
 
Percent Change
Contract assets
$
35,242

 
$
33,704

 
$
1,538

 
4.6
%
Contract liabilities - current
49,870

 
47,178

 
2,692

 
5.7

Contract liabilities - noncurrent
10,676

 
10,053

 
623

 
6.2


The changes in our contract assets and contract liabilities from April 27, 2019 to February 1, 2020 were due to the timing of billing schedules and revenue recognition, which can vary significantly depending on the contractual payment terms and the seasonality of the sports markets. We had no material impairments of contract assets for the nine months ended February 1, 2020.


12


As of April 27, 2019, we had six contracts in progress that were identified as loss contracts, for which we recorded a provision for losses of $2,353 and two remaining contracts with loss estimates of $44 as of February 1, 2020. These were included in the "Accrued expenses" line item in our condensed consolidated balance sheets.

During the nine months ended February 1, 2020, we recognized revenue of $43,394 related to our contract liabilities as of April 27, 2019.

Remaining performance obligations
As of February 1, 2020, the aggregate amount of the transaction price allocated to the remaining performance obligations was $247,332. We expect approximately $209,949 of our remaining performance obligations to be recognized over the next 12 months with the remainder recognized thereafter. Remaining performance obligations related to product and service agreements are $187,423 and $59,909, respectively. Although remaining performance obligations reflect business that is considered to be legally binding, cancellations, deferrals or scope adjustments may occur. Any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals are reflected or excluded in the remaining performance obligation balance, as appropriate.

Note 5. Segment Reporting

We organize and manage our business by the following five segments which meet the definition of reportable segments under ASC 280-10, Segment Reporting: Commercial, Live Events, High School Park and Recreation, Transportation, and International. These segments are based on the customer type or geography and are the same as our business units. We evaluate segment performance based on operating results through contribution margin, which is comprised of gross profit less selling expense. We exclude general and administration expense, product design and development expense, non-operating income and expense, and income tax expense in the segment analysis. Separate financial information is available and regularly evaluated by our chief operating decision-maker (CODM), who is our president and chief executive officer, in making resource allocation decisions for our segments.  

13



The following table sets forth certain financial information for each of our five reporting segments for the periods indicated:
 
Three Months Ended
 
Nine Months Ended
 
February 1,
2020
 
January 26,
2019
 
February 1,
2020
 
January 26,
2019
Net sales:
 
 
 
 
 
 
 
    Commercial
$
36,880

 
$
37,159

 
$
120,566

 
$
113,797

    Live Events
40,571

 
29,995

 
159,196

 
134,566

    High School Park and Recreation
14,775

 
14,798

 
75,433

 
74,498

    Transportation
13,916

 
15,390

 
53,264

 
50,624

    International
21,515

 
17,727

 
74,365

 
68,464

 
127,657

 
115,069

 
482,824

 
441,949

 
 
 
 
 
 
 
 
Gross profit:
 
 
 
 
 
 
 
    Commercial
5,399

 
8,942

 
22,479

 
27,593

    Live Events
7,815

 
3,950

 
32,486

 
26,495

    High School Park and Recreation
3,184

 
2,736

 
22,595

 
21,997

    Transportation
4,316

 
5,880

 
18,073

 
17,471

    International
3,768

 
3,361

 
14,441

 
12,317

 
24,482

 
24,869

 
110,074

 
105,873

 
 
 
 
 
 
 
 
Contribution margin: (1)
 
 
 
 
 
 
 
    Commercial
820

 
4,460

 
7,757

 
13,984

    Live Events
4,055

 
347

 
21,289

 
16,250

    High School Park and Recreation
(277
)
 
(384
)
 
12,303

 
12,874

    Transportation
3,258

 
4,959

 
14,605

 
14,245

    International
74

 
(50
)
 
3,094

 
480

 
7,930

 
9,332

 
59,048

 
57,833

 
 
 
 
 
 
 
 
Non-allocated operating expenses:
 
 
 
 
 
 
 
    General and administrative
8,640

 
8,574

 
26,698

 
25,685

    Product design and development
8,442

 
8,280

 
29,063

 
26,611

Operating (loss) income
(9,152
)
 
(7,522
)
 
3,287

 
5,537

 
 
 
 
 
 
 
 
Nonoperating income (expense):