Good day ladies and gentlemen and welcome to the Daktronics fiscal year 2018 third quarter earnings results conference call. As a reminder, this conference call is being recorded today, Tuesday, November 21, 2017 and is available on the company's website at www.daktronics.com. [Operator Instructions]. I would now like to turn the conference over to Ms. Sheila Anderson, Chief Financial Officer for Daktronics, for some introductory remarks. Please go ahead, Sheila.

Thank you Candace. Good morning everyone. Thank you for participating in our second quarter earnings conference call. I would like to review our disclosure cautioning investors and participants that in addition to statements of historical facts, we will be discussing forward-looking statements reflecting our expectations and plans about our future financial performance and future business opportunities. All forward-looking statements involve risks and uncertainties, which may be out of our control and may cause actual results to differ materially. Such risks include changes in the economic condition, changes in the competitive and market landscape, management of growth, timing and magnitude of future contracts, fluctuations of margins, the introduction of new products and technology and other important factors, as noted and detailed in our 10-K and 10-Q SEC filings. With that, let me highlight some of the financials. Orders for the second quarter of fiscal 2018 were $142 million as compared to last year's second quarter of $117 million. Most of this order fluctuation is attributable to the volatility in our large project and account-based business, in live events, international and commercial business units. As a reminder, both orders and net sales fluctuate due to the impact of our large project and account based business. Large projects include multi-million dollar orders of display systems for professional sports facilities, colleges and universities and spectacular projects. Account based orders can also be multi-million dollar in size for national or global customers, mostly in our out-of-home advertising space. Our business also fluctuates seasonally based on the sports markets and construction cycles and is dependent on various schedules based on our customer's needs. Orders, also for the quarter, were impacted by a softer demand in the commercial on-premise displays. For the year, orders are up slightly by 1.1%. Sales for the second quarter of fiscal 2018…

Thank you Sheila. Good morning everyone. We had a positive financial performance for the first half of fiscal 2018 reflected in increases in sales, operating income and net income. Order bookings came similarly to last year at $342 million overall for Daktronics. Looking deeper into the business units, order bookings on a year-to-date basis were up in live events business unit where continued demand for upgrading or new installations throughout professional sports including the NFL, NHL and MLB. We continue to see demand in the marketplace from facilities using our solutions to enhance the fan experience or the entertainment factor using increasing higher resolution display products. We are seeing this both in upgrades or refurbishment for existing facilities as well as planning for new venues. High school park and recreation orders remained flat for the first six months year-over-year. This market continues to trend toward more sophisticated video systems which have higher average selling prices in addition to continued need outside of the sports venues to communicate with students, parents and visitors. Once again, these trends exist when refurbishing existing systems as well as in new locations. Commercial business unit orders decreased this year as compared to the same timeframe last year. The major factors contributing to this difference were the competitive environment in the on-premise niche, fewer national account based on-premise opportunities and volatility of large custom projects in the spectacular niche. Digital billboard orders were up slightly year-over-year. While it was a slower start for orders, the marketplace continues to adopt digital technology for on-premise and third-party advertising applications and we see this continuing in the future. The pipeline of opportunity is active in the spectacular area of our business as well. We have seen strong activity for replacing or refurbishing existing systems as well as the placement…

[Operator Instructions]. And our first question comes from Morris Ajzenman of Griffin Securities. Your line is now open.

Hi guys.

Hi Morris.

Good morning.

The live events had some good traction here recently and we understand in the past that it can be lumpy, but have we potentially entered a period here, based on what you see going forward, that this becomes a little more sustainable?

I believe our live events marketplace, as far as topline, has been sustained over the past three years or possibly more. And I think that continues to be a strong marketplace for Daktronics. It continues to be highly competitive and it's a different set of customers season-by-season even though the marketplace is the same, leagues or types of venues. So I would predict more that we continue to see good performance by Daktronics in this marketplace and we believe that our reputation in this area remains strong and we have a good chance at continuing our previous performance.

All right. Switching gears, warranty expense. You have highlighted over the past handful of years and then you have shown some improvement. What happened this quarter where it bumped up 120 basis points year-over-year to 3.9%? And how long before you think you can really get that under control towards a much lower level?

We are dealing with not a new issue, but an issue we have talked about maybe more than a year in the past and we made a conscious decision this quarter to address certain field issues in certain areas more aggressively. That's really to retain customer satisfaction and we have reserved, we believe appropriately, for that and we will see that as a continued expense in future quarters.

Last question and I will get back in queue. What's happening with the softer demand as far as on-premise displays? What's causing that to have some sort of a weakness here?

Yes. That's a good question, Morris. We see that that business continues to adopt the technology, but for some reason there wasn't as much activity in the first half of this year. We continue to see optimism from that marketplace. We use a reseller market as well as some direct sales to national accounts and we believe that will be an ongoing positive business for us in the future.

Thank you.

Thank you. And that concludes our question-and-answer session for today. I would like turn the conference back over to Reece Kurtenbach for any further remarks.

I appreciate everybody for signing in today. And I hope you have a great holiday season and we will talk again in a few months. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.