Daktronics said it will take about $15.8 million in non-recurring pre-tax restructuring and related charges as it restructures manufacturing and trims international and micro-LED spending, with about $7.0 million of those charges hitting fiscal Q2 2027.
The company said the actions are expected to generate more than $18.0 million in annualized pre-tax savings once fully implemented in mid-fiscal 2028, equal to $4.5 million per quarter. It expects $5.0 million of savings in the second half of fiscal 2027 and $16.0 million in fiscal 2028.
The largest piece of the plan is the exit of its Ireland manufacturing facility. Daktronics expects that move to generate $13.5 million of cumulative pre-tax charges, including about $5.3 million in fiscal Q2 2027. The company said the Ireland action should produce $0.9 million of pre-tax savings in fiscal 2027 and $7.7 million in annualized savings at full run rate.
It also plans to realign production across the U.S., China and Mexico. That effort is expected to cost about $1.0 million, including $0.3 million of voluntary severance in the current quarter, and to produce $7.0 million in annualized run-rate savings. Daktronics said the Mexico facility has completed its first production run and that it is expanding capability in China in a new 355,000-square-foot leased space.
On the international side, the company said it will exit the highly customized portion of its transportation business, which it said represents about 1.5% of overall revenue, and close its Hong Kong and Macau offices. Those consolidation costs are estimated at $0.2 million in the current quarter, with annualized savings of $0.3 million.
Daktronics also said it will reduce micro-LED development activity after deciding that narrow pixel pitch LED technology now offers a better supply and cost advantage. That move is expected to cost $1.2 million in the current quarter and generate $3.1 million in annualized savings.
By quarter, the company’s estimate shows total charges of $7.0 million in fiscal Q2 2027, $4.0 million in Q3 and $3.1 million in Q4, for $14.1 million in fiscal 2027 overall. For fiscal 2028, it expects another $1.7 million in charges. Savings are projected to rise from $2.2 million in fiscal Q3 2027 to $4.5 million in both fiscal Q3 and Q4 2028. The market has reacted to these announcements by moving the company's shares 2.08% to a price of $18.63. Check out the company's full 8-K submission here.
