Q3 2011 Earnings Call
February 22, 2011 11:00 am ET
Bill Retterath - Chief Financial Officer, Principal Accounting Officer and Treasurer
James Morgan - Chief Executive Officer, President and Director
Richard Ryan - Dougherty & Company LLC
James Ricchiuti - Needham & Company, LLC
Steven Dyer - Craig-Hallum Capital Group LLC
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Good day, ladies and gentlemen, and welcome to the Daktronics Fiscal Year 2011 Third Quarter Earnings Results Conference Call. [Operator Instructions] I would now like to turn the conference over to Mr. Bill Retterath, Chief Financial Officer for Daktronics, for some introductory remarks. Please go ahead, sir.
Thank you. Good morning. We appreciate your participation in our third quarter conference call. We'll give some brief updates about the quarter and then open it up for questions.
I'd like to first offer our disclosure cautioning investors and participants. In addition to statements of historical facts, this call and our news release contain forward-looking statements reflecting our expectation and beliefs concerning future events, which could materially affect our performance in the future. We caution you that these and similar statements involve risks and uncertainties, including changes in economic and market conditions, management of growth, timing and magnitude of future orders and other risks as mentioned during this call and in our press release and our SEC filings, which may cause actual results to differ materially.
Forward-looking statements are made in the context of information available to us as of the date of this call. We undertake no obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur.
So with that, I'll turn it over to Jim Morgan, our Chief Executive Officer, for some comments.
Thanks, Bill, and good morning, everyone. Thanks for joining us this morning. As we have said previously, third quarter is typically our lowest quarter for revenues due to the sports seasonality and the greater number of holidays in the quarter. After the difficult third quarter we had last year, our objective was to at least be profitable this third quarter, so we were pleased to achieve that. It was great to see that activity and major league baseball came back this year, and it's great to see that digital billboards have been coming back as well.
One of the areas that we have continued to emphasize as we work through the downturn is product development. I'll just make a few comments on that front. This past quarter, as we noted in the news release, we introduced our series 4100 digital Billboard, which includes improvements to further simplify installation as well as increased reliability, and there's ongoing cost reductions involved in that development as well.
We also released a new version of our larger Galaxy display, which offer a reduced price point, easier installation and enhanced reliability. And again, the Galaxy displays are for commercial applications primarily. However, the new applications we've also discussed is IPTV for sports facilities, that's Internet protocol television, where video is streamed over the Internet to TV displays in the concourse of the streets and the sports facilities. We completed our largest installation to date at the Yum! Center in Louisville and are currently installing a larger system for the Texas Rangers, which will be available for the opening of baseball season, in conjunction with new LED video displays that we're installing there.
Also, we're continuing to see some nice opportunities for our new architectural lighting product, and we also referred to these as free-form displays. These displays are constructed using either narrow column elements or round pixel elements that are individually mounted and connected on site to form the intended display, which provides a great flexibility in how these can be deployed in any given application. We will be completing the installation of a number of these projects in the fourth quarter, namely, for the Minnesota Twins ball field, the Target Corporation headquarters in the Minneapolis and the Boston Convention Center.
While the use of these products is more prevalent in Asia. It's relatively new in the U.S. and so as we -- we're excited to get these installations online, because as more people see these and see how they can be used, we believe it will open more opportunities. So we continue to develop new products in this area and find new opportunities.
On the competitive front, the price pressure in the industry remains quite intense. We are continuing our efforts in implementing the cost reductions to loss to offer improved products at a reduced cost, that remains the top priority. We will be continuing our focus on cost reduction looking at all aspects of our business, while we continue to work hard to book orders.
With that, I'll turn it over to Bill Retterath to give more perspective on the numbers.
Thanks, Jim. As mentioned on our press release, baseball contracts have certainly helped us the last quarter. We booked over $20 million, a multimillion dollar professional baseball contracts over the last two quarters, which is in addition to that large contract booked last fiscal year for the Florida Marlins. During the quarter, we recognized over $15 million of revenue and have roughly 15 more to go with approximately $11 million left in the fourth quarter. We're also in contract negotiations for two orders approximating $12 million for Live Events that have slipped into the fourth quarter, but would contribute to revenues in fiscal '12.