Daktronics (DAKT)

Company Products/Services/Markets:

Daktronics is the world’s leading supplier of electronic scoreboards, large electronic display systems and related marketing services, digital messaging solutions, software and services for sports, commercial and transportation applications. Their continuing focus is on supporting customers with superior products, integration and services that provide dynamic, reliable and unique visual communication solutions. They offer a complete line of products, from small indoor and outdoor scoreboards and electronic displays to large multi-million dollar video display systems as well as related control, timing and sound systems and related professional services. They are recognized worldwide as a technical leader with the capabilities to design, market, manufacture, install and service complete integrated systems that display real-time data, graphics, animation and video.

Over the years, their products have evolved significantly, from scoreboards and matrix type displays and related software applications, to complex, integrated visual display systems that include full color video, text and graphics displays located on a local or remote network and tied together through sophisticated control systems which entertain and inform. In the mid-nineties, as light emitting diodes (LED’s) became available in red, blue and green colors with outdoor brightness, they pioneered the development of full color LED video displays capable of replicating trillions of colors thereby producing large format video systems with excellent color, brightness, energy efficiency and lifetime. Due to their foundation of developing scoring and graphics display systems, in which they were already a leader, they were able to add video capabilities so all of a customer’s large format display needs could be met in a complete, integrated system. This has proven to be a key factor in their becoming the dominant company worldwide in large electronic displays. Over the years, they have invested millions of dollars in product development to add complementary products and services, such as production services, sound systems, marketing services, maintenance and support and other revenue generating products for their customers.

Their products are comprised of the following four major product families:

1. Sport and Theater Products, primarily All Sport®, Tuff Sport® and OmniSport® scoreboards, Vortek® hoists and related controllers and timing systems;
2. Video Products, primarily ProStar®, ProTour®; and ProAd® displays, and associated control systems; 
3. Commercial Products, primarily Galaxy® displays and Venus® 1500 control systems; and 
4. Transportation Products, primarily Vanguard® displays.

Strategy:

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Competitors:

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Industry Trends and News:

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Acquisitions, Divestitures, Major Transactions, Spin-offs :

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Management – Pros & Cons, Changes:

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Buy Rationale:

This company has a very interesting product offering and appears to be the leader in the field. If you have driven along the highway recently you will notice that more and more traditional billboards are being replaced with these electronic billboards. The electronic billboards will eventually replace all traditional billboards because they allow the outdoor advertising company to:

1. Easily change the advertisement - no need to print out and have a crew go out and paste up a new ad.
2. Alternate ads, allowing advertisers to buy smaller increments
3. Sell day part advertising

In addition, I find these ads to be more eye catching - partly because they are more engaging but also because they are changing.

The big question for this company is valuation.

Sell Rationale:

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