What They Say
Daktronics said that qualifications added to the firm’s audit that suggested that there was doubt in its ‘ability to continue as a going concern’ and late filing of its annual report. The firm said that it was ‘pursuing additional liquidity through various means’. The company also said that it ‘expects to conclude that its disclosure controls and procedures and internal control over financial reporting were not effective as a result of material weaknesses’.
In its earnings call the firm said that some of the issues that cause this filing had changed and doesn’t reflect the real state of the business and future prospects, according to Dave Haynes of Sixteen-Nine.net who listened in.
The firm said that it had tried to get ahead of supply chain constraints by building up inventory of critical components and that had impacted the firm’s liquidity. However, orders are now being delivered at revised prices.
What We Think
I’ve had long supply chains and suffered the impact on liquidity myself in a previous work life and understand how horrible it is. However, Daktronics has a great brand and strong status in the industry so I would have thought that the firm should be able to ride out this storm. I remember reporting on the same issues applying to Sharp back in 2015 (Sharp Secures Second Bank Bail-Out) (BR)
