Daktronics leader to step down

March 5, 2025

Daktronics chairman, president and CEO Reece Kurtenbach is stepping down.

Kurtenbach, whose father, Al, co-founded Daktronics in 1968, has been CEO since 2013. Today is his last day in the role.

He will transition to an advisory role “supporting Daktronics’ digital transformation plan,” according to a statement from the Brookings-based publicly traded company.

Kurtenbach started his Daktronics career in 1982 while attending college, working in manufacturing and customer service. After graduation, he left Daktronics to work in engineering before returning in 1991.

“Since its founding over 50 years ago, Daktronics has grown into a world leader in video communications displays and control systems,” Kurtenbach said in a statement.

“I am incredibly proud of what we have been able to achieve together and deeply humbled by the remarkable hard work, commitment and loyalty of our team members that has enabled us to get to this point. I am confident that Daktronics has a strong foundation in place, supported by the increasing momentum from the company’s transformation, to continue its global growth. This is the right moment for me to step back as CEO and to turn the business over to the next generation of leadership. I believe Daktronics is well-positioned to expand its market leadership position and create significant long-term value for our customers, shareholders and all stakeholders.”

Kurtenbach has been “a thoughtful leader and mentor to the team and instrumental in building Daktronics into the world-class business it is today,” said Andrew Siegel, lead independent director, who will become chairman of the board.

“From developing groundbreaking new technology and expanding Daktronics’ global footprint into new markets, Reece has helped establish Daktronics as an industry leader. We will continue to benefit from his expertise and deep industry relationships as we welcome this next chapter of evolution for Daktronics.”

Executive vice president Brad Wiemann has been appointed interim CEO while a national executive search is done. He has been with the company since 1993 and has served in a variety of roles across manufacturing, engineering, product development and other functions. In his current role, he oversees the company’s commercial, high schools, and parks and recreation business units.

Board member Howard Atkins, former chief financial officer of Wells Fargo, has been appointed acting CFO and chief transformation officer. Sheila Anderson, who was CFO, is focusing on her additional role as chief data and analytics officer.

Earlier this week, the company announced that it had reached a compromise with its largest shareholder, Alta Fox Capital Management, which is withdrawing litigation and supporting the company’s move to reincorporate in Delaware.

Daktronics also announced its fiscal third quarter earnings today. Sales totaled $149.2 million, down 12.2 percent from the same time last year. Gross profit as a percentage of net sales was 24.6 percent, similar to 24.5 percent for the third quarter of fiscal 2024.

There was an operating loss of $3.6 million compared with operating income of $8 million a year ago. Adjusted operating income was $1.2 million after excluding $4.8 million of consultant and adviser related expenses associated with business transformation initiatives and corporate governance matters.

Net loss for the quarter was $17.2 million, and adjusted net income was $500,000 after excluding the nonoperating, noncash debt fair value adjustment and tax impacted operating adjustment for the consultant and adviser related expenses.

“Our orders grew sequentially in the third quarter, driven by a strong increase in commercial orders, securing a major NFL stadium order, and a rebound in international orders,” Kurtenbach said. “Despite the traditionally lower volume in the third quarter due to the completion of fall sports installations, a natural slowdown in outdoor construction projects and the impact of two major holidays,we successfully preserved our gross margin and increased quarterly cash flow compared to last year through cost mitigations, favorable sales mix and careful working capital management.”

The company said the “underlying long-term drivers of customers’ desire to expand usage of digital display systems and quoting activity remain strong. Nevertheless, recent actions by the U.S. government, including global tariff policy and federal funding priority changes, may affect near-term business conditions and may have some impact on the timing of expected and quoted orders.”

There have been some delays in U.S.-based project bookings, and costs related to corporate governance matters and business transformation are expected to remain elevated in the fourth fiscal quarter.

The company also dove into detail regarding its business transformation plan, which “was designed and structured to support our ambitious targets to grow revenue faster than our addressable market, currently estimated in the 7 to 10 percent range, expand operating margins of a sustainable 10 to 12 percent and achieve 17 to 20 percent return on capital by fiscal 2028,” Anderson said.

“In concert with these efforts, we continue to advance our digital transformation projects to realize efficiencies across the company and in interactions with our customers. We have also added rigor to our annual planning, capital allocation and risk assessment processes.”

Benefits from initiatives related to the transformation plan are expected to be seen in the second half of fiscal 2026 and into fiscal 2027.

“Our transformation is already gaining momentum by achieving quick wins in the last quarter, including adjustments to service parts pricing systems, negotiations of lower cost material supply contracts and implementation of manufacturing operational efficiencies in our high school product focused factory,” Anderson said. “Our dedicated business transformation office is in operation to maintain momentum, oversee a disciplined implementation process and ensure financial targets are met with accountability at every level.”

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