Good day, and thank you for standing by, and welcome to Daktronics Fourth Quarter and Yearend 2023 Financial Results. At this time all participants are in listen-only mode. After the speakers' presentation there'll be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to introduce your host for today's call, Sheila Anderson, Chief Financial Officer. Please go ahead.

Thank you, operator. Good afternoon, everyone. Thank you for participating in our fourth quarter and yearend 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. These forward-looking statements reflect the company's expectations or beliefs concerning future events. All forward-looking statements involve risks and uncertainties which could cause actual results to differ materially from our expectations. Such risks include but are not limited to changes in economic and market conditions, management of growth, timing and magnitude of future contracts and orders, fluctuations in margins, the introduction of new products and technologies, availability of raw material, components and shipping services, and other important factors. These identify factors that could cause actual results to differ materially from those disclosed in this call, in the company's fourth quarter 2023 earnings release and its most recent annual report on Form 10-K. Our fourth quarter 2023 earnings release contains certain non-GAAP financial measures and was furnished to the Securities and Exchange Commission on Form 8-K this morning. These documents are available on the investor section at Daktronics website, at www Daktronics.com I'll now turn the call over to our CEO, Reece Kurtenbach. One moment for some technical difficulties.

I think I'm here Sheila. Sorry for that. Good afternoon. Thank you for joining us today. Daktronics has emerged from the challenges of the last three years strategically renewed, operationally focused and financially sound. We faced unprecedented business and dynamic operating conditions through the pandemic times, a pullback in the business, a rapid rebound in the business and supply chain and capacity constraints. Our teams came together to take decisive and deliberate actions to improve our customers' experience, while increasing our profitability and working capital levels. We ended the year with a record sales of $754 million, $26 million in adjusted operating income and a strong balance sheet. Fiscal 2023 was an incredibly positive transition year and our successful navigation on multiple fronts, positions us for long term success. I would like to thank -- put a thank you out to our teams who demonstrated resiliency, pragmatism and creativity. And through their effort, we were able to make long lasting improvements throughout our organization. Our performance is also a testimony to the resiliency and strength of our diversified markets and innovation. Thank you to all of our shareholders for your support through this dynamic time. I'll now turn it over to Sheila for some more details on the financial results.

Thank you Reece. As mentioned, fiscal 2023 was an incredibly positive transition year. As you may recall, we started the year with the record backlog and a marketplace of high demand. However, we were also facing part shortages, intermittent work stoppages, inflationary pressures in input cost and a tight labor market, all limiting our ability to operate effectively. We adapted and utilized this opportunity to be selective in addressing demand and prioritized our focus on winning only the most profitable opportunities and strategically adapting our pricing. Our teams also managed through these dynamic supply chain conditions by redesigning and planning manufacturing for new designs using available parts, securing and obtaining parts to support manufacturing and adding capacity in people and in machines. These actions made throughout the year coupled with a more stable operating environment, which started late in our second quarter led to a positive financial outcome for fiscal 2023. We had record sales of $209.9 million for the fourth quarter fiscal 2023 and $754.2 million for the year. This was an increase of 29.4% compared to $162.2 million for the fourth quarter of fiscal 2022. And for the year was an increase of 23.4% upfront -- up to -- from the $611 million of sales in fiscal 2022. Sales growth was driven by the conversion of our strong order backlog, improved stabilization of supply chains and increased manufacturing capacity. Gross profit as a percentage of net sales increased to 24.8% for the fourth quarter fiscal 2023 as compared to 18.5% in the fourth quarter of fiscal 2022. Gross profit as a percentage of net sales increased to 20.1% for the fiscal 2023 as compared to 19.1% for the prior year. The increase in gross profit percentage for both comparative periods was primarily due to strategic pricing actions being…

Thank you, Sheila. As we look ahead, we expect growth in the global use of audio visual communication systems, in both traditional and in new applications. We're poised to capitalize on and to capture this growth by continuing to do the things we do well. These things include how we engage in a full range of activities to serve our customers by providing high quality standard display products and as well as custom-designed integrated systems, both of these with ongoing services and support. We manufacture a complete line from small scoreboards and electronic displays to large multi-million dollar video display systems and the related control and sound systems. We develop capabilities to design, manufacture, install and service complete integrated systems. And we are recognized as a technical leader in these areas. We generate new leads and serve repeat customers based on our performance, reputation and marketing efforts. We will prioritize our focus in the growing and profitable segments in the industry which align with these capabilities. We will focus on development of new technologies like Narrow Pixel Pitch to harness the market's potential. Also our existing markets are growing. To highlight we expect our high school and park and recreation business unit to grow through the adoption of video displays for sporting and educational use. These customers are deploying more Daktronics professional grade technology and sophisticated content, increasing the total addressable market. In the commercial area we are focused on increasing sales channels with audio-visual integrators for end use in government, military healthcare and corporate applications, which will create growth in this business area. In addition, customers depending on out-of-home advertising or self-promotion, use our products and services as an effective medium for both indoor and outdoor applications. We expect existing and new customers to purchase displays to install in…

[Operator Instructions]. And our first question comes from BJ Cook from Singular Research. Your line is now open.

Hey, thanks, guys. Great quarter. Just a couple of questions for you. You guys have been working pretty diligently over the last year or so to adjust prices. Are you guys in a good spot now in pricing and the backlog? Is there some work left to be done there?

No, I believe we're in a good place there, BJ. I believe that the backlog consists mainly of projects using our new pricing methodologies.

Okay, great. But I understand there's an inflationary element to your price increases, but part of it also is demand for your product. I guess going through this whole process how do you feel about pricing power? Is there maybe a little bit more than you had thought?

Maybe to answer that, I think that as we are in a more stable operating environment, as we've seen the supply chain more predictable than it was a year ago that we have a better understanding of what the cost elements would be and can be very strategic in how we price our new projects or products.

Okay, that makes sense. Appreciate it. One more last one. You mentioned some newer opportunities now. Infrastructure Bill has been in place for a while now. Do you expect to or have you seen any benefit to the transportation segment with regard to the Bill?

Yeah, we believe that since the Bill is in place and is continuing to invest in projects that that's not immediate one quarter sort of event for Daktronics. Those projects go on for months and years. And in the end will continue to provide benefit to Daktronics in that market segment.

Okay, great. Thanks, guys. Appreciate it.

Appreciate the questions, Peter.

Thank you.

And thank you. And one moment please. And I am showing no further questions. I would now like to turn the call back over to Reece Kurtenbach for closing remarks.

I would just like to thank everybody for attending today's conference. We appreciate your attendance and your questions. And we'll look forward to speaking again after our next conference call -- at our next conference call which will be after our first quarter results are released. Thank you everyone.

This concludes today's conference call. Thank you for participating. You may now disconnect.