Daktronics, Inc. has announced a series of manufacturing network optimization initiatives approved by its Board of Directors on October 12, 2026. The company intends to exit the highly customized portions of its international transportation business, which serves rail, bus, and roadway customers outside of North America. As part of this strategy, the company plans to begin a phased exit of operations at its manufacturing facility in Ennistymon, Ireland. This exit, referred to as the Irish Phase-Out, is expected to be substantially complete by the first half of fiscal 2028.
The restructuring plan is expected to generate annualized incremental pre-tax savings of over $18.0 million at full run rate, reached during fiscal 2028. The company anticipates incurring approximately $15.8 million in non-recurring pre-tax restructuring and related charges during the implementation period, with approximately $7.0 million of these charges impacting the second quarter of fiscal 2027. The total estimated cost for the Irish Phase-Out is $13.5 million, comprised of $11.7 million for severance and termination benefits, $0.8 million for facility exit and equipment transfer costs, and $1.0 million in asset impairments. Future cash payments related to these charges are anticipated to be $12.5 million.
In addition to the Irish facility closure, the company is realigning production capacity across its U.S., Mexico, and China operations. The new facility in Mexico recently completed its first production run, and the company is expanding manufacturing capability in China with a move to a new 355,000 square foot leased space. The company is also optimizing capacity in its U.S. factories through attrition and voluntary terminations. Furthermore, Daktronics plans to close its Hong Kong and Macau offices to simplify its Asia Pacific operations and reduce low-return complexity. The company has also decided to reduce its micro-LED development activities while retaining the acquired intellectual property.
Regarding financial reporting, the company has determined that a disclosure error was made in its Quarterly Report on Form 10-Q for the fiscal quarter ended August 1, 2026. The report incorrectly stated projected total capital expenditures of approximately $13.2 million for fiscal 2027, when the intended projection was approximately $23.4 million. The company is furnishing this current report solely to correct this estimate.
