LOS ANGELES--(BUSINESS WIRE)--Glancy Prongay & Murray LLP (“GPM”) announces that it has filed a class action lawsuit in the United States District Court for the Southern District of New York, captioned Settles v. Daktronics, Inc., et al., Case No. 1:22-cv-10793, on behalf of persons and entities that purchased or otherwise acquired Daktronics, Inc. (“Daktronics” or the “Company”) (NASDAQ: DAKT) securities between March 10, 2022 and December 6, 2022, inclusive (the “Class Period”). Plaintiff pursues claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”).
Investors are hereby notified that they have 60 days from this notice to move the Court to serve as lead plaintiff in this action.
If you suffered a loss on your Daktronics investments or would like to inquire about potentially pursuing claims to recover your loss under the federal securities laws, you can submit your contact information at www.glancylaw.com/cases/daktronics-inc/. You can also contact Charles H. Linehan, of GPM at 310-201-9150, Toll-Free at 888-773-9224, or via email at shareholders@glancylaw.com or visit our website at www.glancylaw.com to learn more about your rights.
On August 31, 2022, Daktronics issued a press release announcing its first quarter 2023 results. Therein, the company reported that it experienced “multiple material supply chain disruptions, labor shortages, and a shutdown of our facilities in Shanghai, China for a significant portion of the quarter.” The Company also reported that gross profit as a percentage of net sales was 15%, which was lower compared to 22% a year earlier. Operating expenses were $31.3 million, compared to $26.5 million a year earlier. And operating margin for the first quarter of fiscal 2023 was negative 3.2%, compared to positive 3.9% for the first quarter of fiscal 2022.
On this news, Daktronics’ share price fell $0.91, or 22.1%, to close at $3.20 per share on August 31, 2022, thereby injuring investors.
Then, on December 6, 2022, after the market closed, Daktronics filed a Form 12b-25 with the SEC stating that it would be unable to timely file its Quarterly Report on Form 10-Q for the period ended October 29, 2022, and that there is “substantial doubt” about the Company’s ability to continue as a going concern. Daktronics also disclosed that it recorded a valuation allowance of approximately $13.0 million for deferred tax assets, which “created a covenant violation under our line of credit agreement.” As a result, the Company “also expects to conclude that its disclosure controls and procedures and internal control over financial reporting were not effective as a result of material weaknesses.”
On this news, Daktronics’ share price fell $1.30, or 39.2%, to close at $2.02 per share on December 7, 2022, thereby injuring investors.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company was experiencing challenges that increased costs, including supply chain disruptions, that impacted Daktronics’ ability to fund inventory levels and operations; (2) that, as a result, it was probable that some portion of the Company’s deferred tax assets would not be realized; (3) that as a result, Daktronics was reasonably likely to record a material valuation allowance to its deferred tax assets; (4) that there were material weaknesses in the Company’s internal controls over financial reporting related to income taxes; (5) that the foregoing presented liquidity concerns and there was substantial doubt as to the Company’s ability to continue as a going concern; (6) as a result, Defendants’ statements about its business, operations, and prospects were materially false and misleading and/or lacked reasonable basis at all relevant times.
Follow us for updates on LinkedIn, Twitter, or Facebook.
If you purchased or otherwise acquired Daktronics securities during the Class Period, you may move the Court no later than 60 days from this notice to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you wish to learn more about this action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Charles Linehan, Esquire, of GPM, 1925 Century Park East, Suite 2100, Los Angeles California 90067 at 310-201-9150, Toll-Free at 888-773-9224, by email to shareholders@glancylaw.com, or visit our website at www.glancylaw.com. If you inquire by email please include your mailing address, telephone number and number of shares purchased.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
