Daktronics, Inc'

1
Daktronics, Inc.

• Stages of Development
• Financing
• Business Development Institute at USD
• 22 August 2003

2

• Stages of Development
• Formation
• 70s
• 80s
• 90s
• Current

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• Stages of Development
• Formation
• Purpose
• Assets to build on
• Structure C Corp
• Team
• Financing
• Products
• Markets

4

• Stages of Development
• 70s
• Test reality
• Change products and markets
• Strengthen partnership with SDSU
• Establish sales and profitability
• Establish place
• Utilize SBA

5

• Stages of development
• 80s
• Solidify market choice and product theme
• Differentiate niche market needs and channels
• Expand product lines
• Enhance and expand manufacturing capacity
• Establish formal internship program with SDSU
• Expand financing capability (Banks and ESOP)

6

• Stages of Development
• 90s
• Drive into market niches
• Establish product leadership position in markets
• Automate manufacturing
• Formalize both project and manufacturing
  scheduling
• Embrace information technology
• Expand financing (Larger banks and IPO)
• Improved planning process
• Expand partnership with SDSU, education and
  community
• Focus on leadership development

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• Stages of Development
• Current
• Transition to new management team
• Development of business sectors for product
  development and marketing
• Establishing a national sales force deployed
  regionally
• Further automate manufacturing and advance
  movement toward focused factories
• Expand efforts on employee development
• Continue improving communications, leadership
  training and planning
• Develop plan for use of available cash

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• Financing
• Reg A offering extended over 4 years
• Pay founders with stock for first 3 years
• Project working line with local bank
• ESOP program
• Initial loan
• Repay pretax
• Employees obtain ownership
• Larger bank with unsecured line of credit as well
  as secured term notes
• Secondary offering of equity
• Continue bank line and term notes

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• What Makes a Good Entrepreneur
• Alertness and ability to see opportunity
• Commitment to responsibility
• Specific knowledge
• Perseverance
• Willingness to present and promote
• Ability to adapt quickly

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• How to Encourage and Reward Risk-taking Behavior
• Understand that every action or inaction has
  associated risk
• Study and debate the risk associated with
  inaction as much as we study and debate the risk
  associated with action
• Celebrate action and critique inaction

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• Recent Scandals and Congressional Reaction
• Greed is a human failing
• GAAP has gaps
• Additional regulation also has costs

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• Challenges For Daktronics
• Continue our internal growth program
• Identifying new markets for display products
• Developing new products for the markets that we
  serve
• Penetrating deeper into our markets and serving
  our customers better
• Consider appropriate external growth
• Maintain an excited and productive workforce

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• Opportunities For Daktronics
• The world keeps changing
• Address international markets
• Build on new technologies as they evolve
• Increase service offerings
• Enrollment at SDSU continues to grow