Good day, ladies and gentlemen, and welcome to the Daktronics Fiscal Year 2014 Second Quarter Earnings Results Conference Call. As a reminder, this conference is being recorded today, Tuesday, November 19, 2013, and is available on the company's website at www.daktronics.com. [Operator Instructions] I would now like to turn the conference over to Ms. Sheila Anderson, Chief Financial Officer for Daktronics, for some introductory remarks. Please go ahead, Sheila.

Thank you, Kevin. Good morning, everyone. Thank you for participating in our second quarter and earnings conference call. I would like to review our disclosures cautioning investors and participants that in addition to statements of historical facts, we will be discussing forward-looking statements, reflecting our expectation and plans about our future financial performance and future business opportunities. All forward-looking statements involve risks and uncertainties which may be out of our control and may cause actual results to differ materially. Such risks include changes in economic condition, changes in the competitive and market landscape, management of growth, timing and magnitude of future contracts, fluctuations of margins, the introduction of new products and technology and other important factors as noted and detailed in our 10-K and 10-Q SEC filings. At this time, I would like to introduce Reece Kurtenbach, our President and CEO, for a few comments.

Thanks, Sheila, and welcome, everyone, to the call. Overall, we had a great second quarter with quarter-over-quarter increases in both orders and revenues. While our top line was higher, our gross profit as a percent of revenue was lower than last year at this time. Most of the differences in gross profit were due to project mix. We had a higher percentage of large video projects, which tend have to have a lower margin. However, warranty can still be a challenge, and we remain committed to reducing these expenses over the long term by continued investment in reliability and quality in both our product designs and our production processes. Our business tends to be cyclical and the summer months are our busiest. Our teams did a great job in handling this peak volume again this year. And I would like to thank all of our employees, suppliers and service partners for their hard work over the last quarter. We were successful due to their efforts. As I said, our business is cyclical and our third quarter is typically our lowest in revenue. This year, our backlog entering the period is slightly higher than last year, and our pipeline continues to be strong. Because of this, we believe we will see year-over-year growth in the second half of fiscal 2014, and we continue to have a positive outlook for the year as a whole. Increases in order volume were mainly in our large video projects. We had significant orders in both the Sports and Commercial segments worldwide. However, we continue to see strong activity in our billboard and Transportation businesses as well. We are receiving billboard orders for new locations, as well as refurbishment or replacement of existing displays. And the release of our full-color product for transportation use is a…

Thank you, Reece. We were pleased to reach a level of sales that is the highest for a quarter since our fiscal year 2009. Our plans, processes, service partners and suppliers and people helped us to convert $161 million of sales from the $167 million of backlog we had going into this quarter. This equated to a sales increase of 7.9% for the second quarter of fiscal 2014, as compared to the second quarter of fiscal 2013. International, Commercial and Live Events sales all increased, primarily due to the increase in the large video project orders we were able to secure, build and deliver. Transportation and Schools and Theatres sales decreased as compared to the same quarter last year. Transportation sales reduction is a result of approximately $5 million of revenue we realized last year to finish up a procurement contract during the same timeframe without a similar type of project this quarter. Schools and Theatres sales declined as some large video project displays slipped into calendar 2014, and the projects we won were smaller projects compared to last year, and therefore, lower average sales prices were realized per order. We continue to estimate a modest growth rate overall for fiscal 2014. While our second half has historically been lower in sales and profitability than the first half of the year, because of the sports and construction seasonality we do have more optimism in this year's second half than last year. We continue to see strong interest from our customers and large projects in the marketplace and Live Events, International and Commercial business units, as Reece mentioned. With the increase in backlog as compared to last year, the current booked project delivery schedules and potential new orders in the third quarter, which we anticipate some converting into sales, we estimate…

[Operator Instructions] Our first question comes from Morris Ajzenman with Griffin Securities.

Just a follow-up. Sheila, on your kind of guidance for the third quarter, revenue is up modestly, I think you said, year-over-year and down sequentially, which is not a surprise being the second quarter is a seasonally high quarter. But if you count on gross margins -- I'm looking at the third quarter of last year, I think it's at 24.4%, and I think you said it will be similar to last year. I'm just curious, shouldn't we see some leveraging with modest top line growth rates? There's been a control low warranty expense that's come into play here. But shouldn't this still be an improvement in the gross margins going forward into this current quarter?

As discussed, there it has to do with mix, as well as in our utilization of the factory. So yes, we will have some uptick because of the revenue uptick. But conservatively, we feel we'll be in that area because of the sales mix going into the quarter.

All right. And you said utilization -- is there any reason to believe utilization in this third quarter is going to be significantly different than last year's third quarter?

It shouldn't be significantly different.

Okay. And just give me a little bit more color on the warranty expense, 3.3% in this most recent quarter. Can you just refresh what it was the previous quarter? And you still target at getting that, the 150, 200 basis points?

We do and are working towards reducing our warranty as a percent of sales, and our target is that 2% or so. I don't have last quarter's right with me here, but we have and want to reduce that from the 3.3% that we experienced this quarter.

[Operator Instructions] Our next question comes from Brad Mas with Needham.

Brad filling in for Jim. Just first regarding the billboard portion of the Commercial segment, I was wondering if you could provide any revenue or bookings numbers?

For the quarter in revenue, we had about $12 million of sales.

Okay. And then orders?

Orders were -- one moment. Were about $11 million.

Okay. And then with the International segment, there's obviously good growth. Do you think it's sustainable going forward? And where -- like what segments were you seeing the strength coming from internationally?

We believe that the growth is sustainable internationally, and the biggest segments that we see interest in is the large sports venues, these large commercial spectaculars and third-party advertising or billboard.

Okay. And then just lastly, Transportation. We obviously saw decent order activity. Do you have any visibility into the pipeline or any opportunities in the Transportation segment?

We do believe that our Transportation segment, the core business, will continue to grow. And so we're optimistic as we go into the second half that the order and revenue would increase.

Our next question comes from Steve Altebrando with Sidoti & Company. Stephen Altebrando - Sidoti & Company, LLC: In the Schools and Theatres, the release mentions ASPs being down a bit. Is that a function of mix or pricing, competitive pricing?

We believe that's a part of just the mix. We feel we were selling smaller display units compared to last year. Stephen Altebrando - Sidoti & Company, LLC: Okay. And then the Live Events segment mentioned, I think, maybe 5 -- I think it was 5 orders for $9 million or so. It sounds like a relatively small order dollar amount per order. Are those nonprofessional arenas or ancillary products?

What we see in the Live Events business is that orders in Q2 and maybe even part of Q3 tend to be add-ons, not complete system orders. And what we find is that in the spring months, as we move into baseball, and then the fall season is where we get the larger full-system orders. Stephen Altebrando - Sidoti & Company, LLC: Okay, that's helpful. And then just lastly, and I know you touched on it on the script a bit. But if you could expand on kind of the bidding activity you're seeing in the Live Events segment, just the general interest that you're seeing, whether it feels like it's picking up as we go into fiscal '15?

We've seen much higher activity this year, especially in large outdoor stadiums, than in the previous, I would say, 2 years. And we believe that, that will continue into the fall, certainly.

Our next question comes from Morris Ajzenman with Griffin Securities.

Sheila, you had mentioned in your prepared remarks -- and you kind of ran through it quickly. I'm not sure if I got it right. Transportation, did you say $17.6 million last year, $5 million was from the LAX? Or did I misread you on that?

Actually, $5 million was from another procurement project. LAX contributed to our orders through the second quarter of last year, and we had some revenue realized in the second quarter from LAX. But we had a large procurement project that we finished up during the first half of last year, which that we didn't have a repeat-type project this first half of the year.

Our next question comes from Robert Hoffman with Princeton OPportunity Partners.

It seems, especially for those of us who are on the East Coast, that the proliferation of transportation signs, and it's nice to see the Vanguard label on all of these things and especially here in New Jersey. Do you have any sense of -- I get the impression that the highways that put them on start with X and then end up with 3x X over the period of a number of years. Do you have any sense of the market opportunity? I mean, are there big competitors that are taking share in other places? Or is it something that you see you have 5 to 10 years of pretty dramatic growth opportunity when you can see the results of what good signage does for traffic flow? In other words, can you give us any sense of long-term market opportunity in Transportation?

So in the traffic business, there's especially the over-the-road signage that I think you're referencing in New Jersey and some of the other states. I believe, as you're mentioning, the core technology is seen as beneficial. It's expensive to build highways, and putting in signage like we provide helps makes the usage of your existing highways more efficient. So we see that, that's a continuing part of a highway project going forward. However, the procurement progress -- process is done through either a state or maybe a county or city level, and there is a heavy influence of federal dollars that often greenlight these projects. And it's difficult to project from year-to-year how the federal government will choose to lease or not certain funds, which puts a difficulty in estimating future business in the Transportation area.

How about internationally? Are you seeing the same sort of interest in International appearances?

As I said before, currently, our focus in International is in these other segments, and we haven't -- the selling cycle in Transportation tends to be quite long, as you need to work to get qualified by different governmental agencies. And we haven't taken that approach yet in our International business. Not to say that we haven't done some transportation type of projects, but not these large procurement type of projects for over-the-road signage.

But are there -- are they being -- so other people are out there doing those? Or is the international market [indiscernible] the U.S.?

Yes, there are definitely companies internationally that are participating in those markets. And you will see similar types of displays if you travel the major cities and highways around the world.

And I'm not showing any further questions at this time. I'd like to turn the conference back to our hosts for closing remarks.

I will answer Morris' question earlier about warranty as a percentage of sales for the first quarter. We also were at about 3.3% for the first quarter of this fiscal year, so we've trended that way throughout the whole first half.

Thank you, Sheila. I think that concludes our comments. We appreciate everybody's time and attention this morning, and we hope you have a great Thanksgiving holiday.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.