South Dakota-based Daktronics is cutting about 100 jobs as the company anticipates financial setbacks created by the coronavirus pandemic, according to a Friday statement from the company.
The Brookings-based maker of electronic displays and billboards reported its net sales, net income and cash generated by operations for the quarter were all down millions of dollars year-over-year, according to financials released last week.
Daktronics was able to remain profitable in the short-term, but that was with temporary measures, spokeswoman Staci Mergenthal said in an emailed statement.
“We now foresee a more prolonged downturn and we felt a longer-term solution was necessary,” Mergenthal said.
Financial strain hasn’t stopped Daktronics from landing some sizable contracts, including installing a suite of video displays on a Major League Soccer stadium planned for Austin, Texas.
But even with work on the Austin stadium, Daktronics still reported decreasing sales for the first quarter of its current fiscal year compared to Q1 of last year.
Net sales dropped from $180.3 million to $143.6 million. Cash generated dropped from $18.2 million to $8.5 million.
“During the first quarter of fiscal 2021, our customers reduced their spend on audio-visual systems as they worked through the economic and business implications of COVID-19,” Daktronics CEO and President Reece Kurtenbach said in a statement. “We took corresponding action to reduce our operating expenses to align with expected order and sales declines.”
Surviving the remainder of the potential financial losses created by the pandemic means conducting a “Reduction in Force,” Mergenthal said.
Job cuts will affect employees across the United States and Canada. The layoffs equal less than 4% of the company’s workforce.
“We regret the impact this has on them and their families,” Mergenthal said.
Daktronics leadership expressed faith in the company’s business model. The company can emerge stronger from COVID-19 by reducing its size to better fit demand, Mergenthal said.
“We believe the long-term drivers of our business are sound,” she said. “And we are focused on serving our customers through this time of crisis to be positioned to grow with them as they recover.”
This article originally appeared on Sioux Falls Argus Leader: Daktronics to cut 100 jobs, net sales fall millions behind in Q1 for South Dakota-based company