SGLY:DAKT Class Action Lawsuit (Daktronics) was filed on December 21, 2022 on behalf of the shareholders.
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.
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.