Daktronics at 50: Disruptive force, industry leader

Dec. 10, 2018

By Rob Swenson, for SiouxFalls.Business

Like a lot of startup companies, Daktronics began in a garage. Initially, it didn’t even have a product. But the Brookings-based company had vision, ambition and a potentially strong, core workforce: engineering graduates from South Dakota State University, who routinely had been leaving the state to find work.

“We wanted to start a company because we thought it would be exciting, and we thought there was a resource available that was squandered by the state,” said Al Kurtenbach, retired co-founder of Daktronics Inc. “If we could find a way to use that resource, then we’d be successful.”

By any measurement, the business founded on Dec. 9, 1968, by Kurtenbach and Duane Sander, a fellow electrical engineering professor at SDSU, has been a big success. The relatively small, publicly traded company (NASDAQ – DAKT) is celebrating its 50th anniversary.

From its modest beginning, Daktronics grew to become a disruptive force and leader in the electronic display industry. It’s now the world’s largest supplier of large-screen video displays, electronic scoreboards, LED text and graphics displays, and related control systems.

“We’re the world leader in what we do, and it’s sometimes hard for people to conceive that the company exists here in South Dakota in the Upper Plains,” said CEO Reece Kurtenbach, who is Al Kurtenbach’s son. “But we think there are a lot of good things going on in our part of the world, and we’re proud to be here.”

Daktronics, which has a branch plant in Sioux Falls, has a worldwide workforce of approximately 2,900 employees. During its 2018 budget year, the company did more than $610 million in business.

In addition to a six-building campus at its headquarters in southeastern Brookings and a 237,000-square-foot building in northeastern Sioux Falls, Daktronics has branch plants in Redwood Falls, Minn.; Shanghai, China; and Ennistymon, Ireland.

The company employs approximately 1,400 people in Brookings, 375 in Sioux Falls and nearly 200 in Redwood Falls. The rest of its employees are at its two international plants or scattered in small offices across the world.

A flexible factory structure helps keep the company nimble and responsive to customer demand.

“At any one time, we have multiple factories qualified to build more than one of our products,” Reece Kurtenbach said.

During its early years, Daktronics dabbled with making control systems for water and wastewater treatment. But the display market emerged and developed quickly, Al Kurtenbach said, so that’s where the company put its focus.

Daktronics reached $1 million in annual sales in 1978 and had 100 employees by 1979.

The company’s first product was an electronic voting system for the Utah Legislature. Its first scoreboard – the type of product that eventually would make the company well known in the industry – was a mat-side scoreboard used at wrestling matches.

Since then, Daktronics has designed and installed many of the biggest and most iconic displays in the world. Its products can be seen at Times Square in New York, Piccadilly Circus junction in London and venues for the Olympics. In 2017, the company installed the world’s largest video scoreboard, the halo display, at the Mercedes-Benz Stadium in Atlanta.

Twenty-one of 31 National Football League stadiums use large LED video display systems from Daktronics. So do 21 of 31 Major League Baseball parks, 16 of 31 National Hockey League rinks and 10 of 29 National Basketball Association arenas.

The company also makes scoreboards and other displays for college, high school and amateur teams. But scoring systems for sports teams are only part of its product line.

Small, commercial and institutional displays made by Daktronics are evident throughout the region and beyond. In Sioux Falls, for example, dozens of the company’s products, including billboards, store signs and message boards, can be seen every day by motorists on West 41st Street.

“You can drive around town and see a lot of Daktronics’ products. I think the employees take pride in that,” said Gary Daly, plant manager in Sioux Falls.

Daly has managed the Sioux Falls plant for 7 1/2 years. Before that, he managed the former Hutchinson Technology Inc. plant in the city.

Four days a week, a 50-passenger company bus makes two round trips a day a day between Sioux Falls and Brookings, shuttling employees – mostly office workers – between the plants.

Daktronics’ expansion to Sioux Falls in 2006 to tap another labor market has been a good move for the company, said Reece Kurtenbach, who in addition to being CEO is Daktronics’ president and chairman. Daktronics also expanded to Redwood Falls in 2006.

The Sioux Falls plant has become Daktronics’ second-largest manufacturing facility.

“We continue to invest in space in Sioux Falls. We believe it will continue to be part of our winning strategy in the future,” Reece Kurtenbach said.

Daktronics’ success as a home-grown business is an ongoing inspiration to other startup companies in South Dakota.

If South Dakota’s continuing quest for economic development is ever made into a movie, the title should be “Searching for Al Kurtenbach,” said David Owen, president of the South Dakota Chamber of Commerce & Industry.

“Daktronics is one of the most iconic, South Dakota-business-makes-good stories that we have,” Owen said.

Al Kurtenbach said he sees South Dakota’s universities as engines for economic development.

“I think part of the job of universities is to spin out companies. Not everybody sees it that way,” he said.

Daktronics built its success on being honest, helpful and humble — values that have served the company well, Al Kurtenbach said.

“If you are going to run an organization, you have to be honest. Otherwise, there is so much time wasted on whether you should believe something or not,” he said.

Being helpful is important to suppliers and employees as well as customers, he said. Arrogance is the reason most organizations fail, he said, and the opposite of being arrogant is being humble.

Going forward, Al Kurtenbach wants the company to stay based in Brookings, and he hopes it remains independent. In other words, he doesn’t want Daktronics to get purchased or merged into another company. He also hopes that the company continues to grow.

Reece Kurtenbach, who is an SDSU engineering graduate, appears to share his father’s feelings. He foresees a bright future for the company and the display business.

“People increasingly want to have some kind of changing, responsive, engaging messaging system. We’ll see these products everywhere as we move forward in time,” Reece Kurtenbach said. “We believe the business will continue to grow, and Daktronics will be a major player.”

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Daktronics at 50: Disruptive force, industry leader

From its modest beginning, Daktronics grew to become a disruptive force and leader in the electronic display industry. It’s now the world’s largest supplier of large-screen video displays, electronic scoreboards, LED text and graphics displays, and related control systems.

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