Daktronics, Inc. (DAKT) Investor Alert: Robbins LLP Reminds Shareholders of Class Action Against Daktronics, Inc.
SAN DIEGO, Dec. 30, 2022 (GLOBE NEWSWIRE) -- The Class: Robbins LLP reminds investors that a shareholder filed a class action on behalf of all investors who purchased or otherwise acquired Daktronics, Inc. (NASDAQ: DAKT) securities between March 10, 2022 and December 6, 2022, for violations of the Securities Exchange Act of 1934. Daktronics designs and manufactures electronic scoreboards, programmable display systems, and large screen video displays for sporting, commercial, and transportation applications.
What Now: Similarly situated shareholders may be eligible to participate in the class action against Daktronics, Inc. Shareholders who want to act as lead plaintiff for the class must file their papers by February 21, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. For more information, click here.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
What is this Case About: Daktronics, Inc. (DAKT) Unable to Timely File SEC Reports and Questions its Ability to Continue as a Going Concern
According to the complaint, defendants failed to disclose: (1) that the Company was experiencing challenges that increased costs, including supply chain disruptions, that impacted Daktronics’ ability to fund inventory levels and operations; (2) that, as a result, it was probable that some portion of the Company’s deferred tax assets would not be realized; (3) that as a result, Daktronics was reasonably likely to record a material valuation allowance to its deferred tax assets; (4) that there were material weaknesses in the Company’s internal controls over financial reporting related to income taxes; and (5) that the foregoing presented liquidity concerns and there was substantial doubt as to the Company’s ability to continue as a going concern.
On August 31, 2022, Daktronics issued a press release announcing its first quarter 2023 results. The Company reported that it experienced “multiple material supply chain disruptions, labor shortages, and a shutdown of our facilities in Shanghai, China for a significant portion of the quarter.” The Company also reported that gross profit as a percentage of net sales was 15%, which was lower compared to 22% a year earlier. Operating expenses were up and operating margin for the first quarter of fiscal 2023 was negative 3.2%. On this news, Daktronics’ share price fell $0.91, or 22.1% to close at $3.20 per share on August 31, 2022.
Then, on December 6, 2022, Daktronics filed a Form 12b-25 with the SEC stating that it would be unable to timely file its Quarterly Report on Form 10-Q for the period ended October 29, 2022, and that there is “substantial doubt” about the Company’s ability to continue as a going concern. Daktronics also disclosed that it recorded a valuation allowance of approximately $13.0 million for deferred tax assets, which “created a covenant violation under our line of credit agreement.” As a result, 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.” On this news, Daktronics’ share price fell $1.30, or 39.2%, to close at $2.02 per share on December 7, 2022.
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About Robbins LLP: A recognized leader in shareholder rights litigation, the attorneys and staff of Robbins LLP have been dedicated to helping shareholders recover losses, improve corporate governance structures, and hold company executives accountable for their wrongdoing since 2002. To be notified if a class action against Daktronics, Inc. settles or to receive free alerts when corporate executives engage in wrongdoing, sign up for Stock Watch today.
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