Good day, ladies and gentlemen and welcome to the Daktronics Fiscal Year 2019 First Quarter Earnings Results Conference Call. As a reminder, this conference is being recorded today, Tuesday, August 21, 2018 and is available on the company’s website at www.daktronics.com. 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, Rachel. Good morning, everyone. Thank you for participating in our first quarter earnings conference call. I would like to review our disclosure cautioning investors and participants that in addition to statements of historical facts we will be discussing forward-looking statements reflecting our expectations and plans about our future financial performance and future business opportunities. All forward-looking statements involve risks and uncertainties, which maybe out of our control and may cause actual results to differ materially. Such risks include changes in economic conditions, changes in the competitive and market landscape, including impacts of global trade discussions and policies, 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. With that, let me highlight some of the financials. Orders for the first quarter of fiscal 2019 were $160 million as compared to last year’s first quarter of $153 million. Most of the order fluctuation this quarter is attributable to the variability of timing in large projects and account-based business and due to increases in video demand in the High School Park and Recreation units. Transportation’s increase in orders was due to continued intelligent transportation system investments by City and State Department of Transportations. High School Park and Recreation increased due to the higher demand for larger video systems. Commercial’s increase was for orders in the Spectacular niche with out-of-home and on-premise tape orders similar in comparison to last year. Internationally, the results included orders across multiple segments. Sports, out-of-home and Spectacular and Transportation are the largest segments internationally. Live Events orders were lower than last year due to timing of orders, plus large projects in the marketplace during the same time and one order cancellation of…

Thank you, Sheila. Good morning everyone. Our first quarter financial results demonstrate that our path to profitable growth will always be smooth. Our business is and will continue to be lumpy. Looking at the macro view of our business, we are pleased with the continued interest and demand for our products globally. We continue to believe the market is growing and we are positioned to capture this market growth with our comprehensive portfolio of industry leading solutions. Some highlights of our outlook by business units would be we expect sustained demand and growth for larger sized orders due to the adoption of video and sporting applications in the high school park and recreation market. During the first quarter we continued to quote and win higher dollar video projects. In our international business unit, we believe the market’s increased adoption of digital systems as well as our focus on increasing market share in our segments of sports, out of home, spectacular and transportation areas will continue our growth outside of the U.S. and Canada. The transportation business in the U.S. and Canada has growth opportunities due to continued investment in the U.S. transportation systems, the stability in Federal funding and increasing advertising and on-premise promotional application needs in mass transit facilities. In our commercial business unit, we see opportunities for growth mainly driven by digital opportunities in the Spectacular segment, both new and replacement systems for our national account business, expansion of solutions for indoor applications and continued replacement of new investment activity in the Billboard segment. We expect live events sales to maintain order levels of previous years. We are focused on bringing innovative solutions to our customers in all segments. For example the expected use of narrow pixel pics technology by the customers in our markets is projected to…

Thank you. [Operator Instructions] And our first question comes from Greg Pendy of Sidoti. Your line is now open.

Hey, guys. Thanks for taking my questions. My first question I just wanted to dig into you called out the warranty expenses that came down to 2.5%. Is that something that we should think about as winding down going forward and kind of where are we at in that? And then just second, I apologize I might have missed you on the tax, you are still sticking with a 21% tax rate, is that correct?

So for the tax rate, we are expecting a benefit for the fiscal year, but overall our rate will be at 21%.

Okay.

For the year, we are expecting a benefit.

Okay.

And then for the warranty, Greg, our internal goal is to get the warranty cost down below 2% and we have been striving for that in our investment in quality and reliability. That can vary based on unexpected things, but we continue to try to control our warranty expense.

But just so that I understand, the outsized warranty expenses that we have seen was over the past couple of quarters, that’s primarily still related to the 2016 issue, I take it which is starting to wind down?

Yes, we believe so.

Okay. And then just one final one just kind of on the overall, it was very helpful what you gave us on the sourcing of components and the input cost, how should we be thinking about the pricing environment and the pass-through environment right now just from what you are seeing?

Yes. The course of pricing environment globally can be hard to predict, but we believe that as we continue to drive cost down, we won’t see a dramatic price increase, but we may not see prices fall as maybe we once would have predicted.

Okay, that’s helpful. Thanks a lot.

Thank you.

Thank you. Our next question comes from Lisa Springer with Singular Research. Your line is open.

Good morning. If I heard you correctly, you mentioned that there was a $3 million order that was canceled during the quarter. Could you give us a little more color on that and if that order is something we may see turn up in subsequent quarters?

Yes. It’s highly unusual for us to have an order that is backed out of our backlog and we don’t think we will see that in future quarters and we don’t think we will see a repeat of this in the near-term for sure.

You see this as a postponement or something that just is not going to happen this year at all?

It’s not going to happen this year at all.

Okay, thank you.

Thank you. Ladies and gentlemen, this concludes today’s question-and-answer session. I would like to turn the call back to Reece Kurtenbach for any closing remarks.

Thank you, operator and thank everyone for your participation in today’s call. As a part for Annual Shareholders Meeting on September 5, we are celebrating our 50 years in business that evening. So if you are in the Brookings area, you are welcome to stop by. And if you haven’t yet, if you could fill out your proxy filing that would be very helpful. Thank you everyone and we will see you in the quarter.

Ladies and gentlemen, thank you for participating in today’s conference. This concludes today’s program and you may now disconnect. Everyone have a great day.