Daktronics stock plunges after SEC filing details cash problems

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BROOKINGS – Daktronics stock plunged nearly 40 percent Wednesday after the company filed documents with the Securities and Exchange Commission that “raise substantial doubts about our ability to continue as a going concern.”

The filing with the SEC postponed the company’s quarterly earnings report until Dec. 12 and sent the scoreboard manufacturer’s stock price to $2.02 at the closing bell Wednesday, down from $3.33 Tuesday.

The filing’s narrative described a harsh financial situation at the company and stated Daktronics was seeking to bolster liquidity “… through various means, including but not limited to obtaining financing secured by a mortgage on our facilities, a sales-leaseback transaction, leasing property and equipment and continued focus on reducing working capital.”

Daktronics stock was down again in early trading Thursday, slipping as low as $1.90 per share.

The narrative in the SEC notification of late filing went further, reading “the Company also expects to conclude that its disclosure controls and procedures and internal control over financial reporting were not effective as a result of material weaknesses.”

Founded in 1968 by a pair of South Dakota State University professors, Daktronics employs more than 2,000 people, the majority at its Brookings headquarters. It also operates in Sioux Falls, Redwood Falls, Minnesota, China and Belgium. It is one of the world’s largest suppliers of large-screen video displays and electronic scoreboards.

On Wednesday, Daktronics also announced the expansion of its board of directors to eight members, up from seven, and the appointment of Howard Atkins to the new director position.

Daktronics stock traded at more than $35 per share in 2006 but has declined since the stock market crash in 2008-09 and is down 78 percent over the last five years.

Daktronics did not immediately respond to a request for comment.

Josh Linehan is the Register’s managing editor and welcomes comments at jlinehan@brookingsregister.com