Daktronics, Inc. F4Q09 (Qtr End 05/02/09) Earnings Call Transcript

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2009-06-02 13:20:43.0

Tags: Revenue, Cost Reduction, Benefit, Call Transcript, Earnings, Daktronics Inc., Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions). Our first question comes from Steve Altebrando from Sidoti & Company.

Steve Altebrando - Sidoti & Company

You talked a little bit about cost reductions in cost of revenue line. Are you seeing the benefits of that yet? Or is that something we should see going forward?

Bill Retterath

Well, we've realized some cost reductions. The challenge has been that our top line is coming down, has come down as well. So, I think we're realizing the benefits, but we have more to do in that regards, Steven.

Steve Altebrando - Sidoti & Company

I guess I just may, was it year-end loaded some of the reductions that you spoke of?

Bill Retterath

Steve, this is Bill. One of the things I tried to clarify is, it's being a consistent reduction in our manufacture cost. We reduced a 1 million from Q2, we reduced about 1.5 million in Q3 and additional 1 million in Q4.

So, it's been on a continuous effort that we'll keep focusing on and there is a whole slew of things that we're doing in that regard. One thing that, we're going to be maintaining our facilities, so that fixed cost doesn't go away which is one of the reasons I emphasize that in my comments.

But overall, I think we're making good progress in reducing our cost every quarter and we'll continue to do that.

Steve Altebrando - Sidoti & Company

And then I know it's difficult to predict, but going forward into fiscal '10 year, do you think that the gross margins are going to look sort of what they look like in this previous quarter for the full year?

Bill Retterath

It depends on how things turn out and that was my comment on the competitive front making a tough comparison. But overall, we're committed to seeing it rise certainly over Q4 or it turns out is really a difficult thing to predict because of the competitive environment. But from things within our control, you will see definite improvements in it.

Steve Altebrando - Sidoti & Company

And then the last one, the competitive pressure you mentioned is, is it one manufacturer in particular or it's just sort of the environment, the excess capacity that everybody has out there?

Bill Retterath

Well, it's really not limited to one. We are seeing it in the live event sports area. We are also seeing it in the commercial areas to some degree. So, it's not just 1 or 2 competitors.

 

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