Good day, ladies and gentlemen, and welcome to the Daktronics Fiscal Year 2021 Second Quarter Earnings Results Conference Call. As a reminder, this conference is being recorded today, Wednesday, December 2, 2020 and is available on the company’s website, at www.daktronics.com. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [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. 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 economic conditions, changes in the competitive and market landscape, including impacts of global trade discussions and policies, the impacts of governmental laws, regulations and orders, including those resulting from pandemics. Disruptions to our business caused by geopolitical events, military action, work stoppages, natural disasters, or international health emergencies, such as the COVID-19 pandemic, management of growth, timing and magnitude of future contracts, fluctuations of margins, the introduction of new products and technology, and other important risk factors, as noted and detailed in our 10-K and 10-Q SEC filings. With that, let me highlight some of the financials. As a reminder, fiscal 2020 was a 53-week year and fiscal 2021 is a 52-week year. The extra week of fiscal 2020 fell within the first quarter, resulting in the six months ended being 27 weeks versus FY2021 of 26 weeks. Sales orders in all areas of operating expenses were impacted with that additional week in the six month comparisons. In the near-term, the COVID-19 pandemic has caused various changes in our customers core businesses, impacting their investments in audio-visual systems. For example, businesses which rely on revenues from out-of-home advertising or who are reliant on customer foot traffic to drive sales, have been adversely impacted by stay-at-home orders or quarantine orders. This has delayed their discretionary spending, capital spending in…

Thank you, Sheila. Good morning, everyone. As Sheila highlighted, for the first half of the year, we have managed operating expenses and working capital to align with expected declines in orders and sales, as our customers adjust to the economic and business implications of COVID-19. Even in these challenging times, customers have placed orders and continue to invest in their businesses, and we are hearing promising news on different vaccines and treatments, that we believe will improve conditions for all, over the coming months. We also believe the underlying trends are still strong and investments in AV systems will continue over the long-term. We have carefully reduced and continue to strategically make choices on levels of investment in capital assets and development, while focusing on positioning ourselves for a strong recovery when the crisis is over. Our sales teams have continued to engage our customers, often virtually across new and existing markets through this time. We also have continued to invest in systems to improve our customers’ overall experience and interactions with us. Customers choose Daktronics for new and leading technologies, our broad range of solutions, the reliability of our products and our commitment to serve them over the lifetime of their system. We are focusing on developing and releasing innovative solutions and services, tailored to different applications for both existing and new markets. We do remain positive regarding the overall long-term outlook of the business and growth in the industry, as the world and our customers work through and get past the pandemic’s implications. But we will have greater uncertainty in the foreseeable future, due to the impact of the pandemic on different customers. As the availability of treatments and vaccines increase the willingness of people to gather, many normal activities will resume, and our customer businesses will also…

Thank you. [Operator Instructions] And our first question comes from Greg Pendy from Sidoti. Your line is open.

Hey guys, thanks for taking my questions. Just first, I wanted to just understand, I know we have a change in administration here, but there was some news on maybe what the plans were with the trade deal. Can you just remind us, have we anniversaried most of – I believe it was a roughly $10 million uptick, due to tariffs. Is that going to be sort of neutral on the year-over-year basis at this point?

We actually will see a bit of a decrease, because of the decline in our inventory part orderings. We’ve had some – forgiveness on some of the tariff implications, those will end as well at the end of the fiscal year. So a little bit down from 2020 to 2021, but still with an over – underlying, there is still some costs that we have going forward in our view.

Maybe if I were to put little more color to that is that we are – we’re not expecting right now, a dramatic change in the tariff situation, or an increase in new or a pullback in existing and that’s our thinking as we – and if you have better guidance on what the new administration would do, we are all ears for that now.

Understood. And then also, you seem cautious – I think on a lot of the segments? And I understand that the large amount of uncertainty, but I just wanted to hover in, maybe on sort of the outdoor billboard advertisers, it seemed like their transition – maybe a couple of the major ones, were at least looking for year-over-year growth into 2021, in terms of their digital – static to digital. Is that fair to say, or do you think that maybe the overall market will actually still be cautious?

I think that what we’ve seen in the out-of-home advertising, is that when uncertainty looms, they are one of the first to pull back. But as they see positive signs, they are one of the first back in to make investments. So we think that, as the a variable recovery is may be how we think of it, that different segments will come back in different ways, we believe out-of-home will come back faster, and we’ve seen some out-of-home companies continue to invest during the downturn, so some variability there as well.

Great. And then just one final one if I can. You made a significant investment in micro LED? Does that kind of – does that investment help offshoot some of, I guess, the R&D spend in some of the new technologies, given the partnership?

We believe in the micro LED business, and continue to invest in that. But we don’t have a product on the market yet today, that has a micro LED in it. So that is maybe not reflected in our operating side. But yes, we do believe, that this will give us a stronger entry into micro LEDs in the coming quarters and fiscal years, and that are, it fits into our picture of our development spend and our forecast of our development spend.

Got it. All right. Well, thanks a lot for taking my questions.

Thanks, Greg.

Thank you. And I am showing no further questions from our phone lines. I’d now like to turn the conference back over to Reece Kurtenbach for any closing remarks.

Well, we appreciate everybody joining us this morning. We know these are strange times, but we hope that you have the best holiday season possible, and that we all enter the New Year, and have a more positive outlook, and we look forward to talking to you next May. So, thanks everyone. Bye-bye.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and you may now disconnect. Everyone, have a wonderful day.