-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MCVHXo2Y5fTrbx4rola3tPOxXJrBsIwWBBhJ4m6O5kS8v7rIkdw0aYHy7BClm2Dz p9k8nor6h5lv08JpPR4BTw== 0000067215-96-000011.txt : 19961212 0000067215-96-000011.hdr.sgml : 19961212 ACCESSION NUMBER: 0000067215-96-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19961031 FILED AS OF DATE: 19961211 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DYCOM INDUSTRIES INC CENTRAL INDEX KEY: 0000067215 STANDARD INDUSTRIAL CLASSIFICATION: WATER, SEWER, PIPELINE, COMM AND POWER LINE CONSTRUCTION [1623] IRS NUMBER: 591277135 STATE OF INCORPORATION: FL FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10613 FILM NUMBER: 96679231 BUSINESS ADDRESS: STREET 1: 4440 PGA BLVD. SUITE 600 STREET 2: FIRST UNION CENTER CITY: PALM BEACH GARDENS STATE: FL ZIP: 33410 BUSINESS PHONE: (561) 627-7171 MAIL ADDRESS: STREET 1: P O BOX 3524 STREET 2: SUITE 860 CITY: WEST PALM BEACH STATE: FL ZIP: 33402 FORMER COMPANY: FORMER CONFORMED NAME: MOBILE HOME DYNAMICS INC DATE OF NAME CHANGE: 19820302 10-Q 1 DYCOM INDUSTRIES, INC. 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________to________ Commission file number 0-5423 DYCOM INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Florida 59-1277135 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4440 PGA Boulevard, Suite 600 Palm Beach Gardens, Florida 33410 (Address of principal executive office) (Zip Code) (561) 627-7171 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding as of December 6, 1996 _____ __________________________________ Common Stock, par value $0.33 1/3 8,682,915 2 DYCOM INDUSTRIES, INC. INDEX
Page No. ________ PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets- October 31, 1996 and July 31, 1996 3 Condensed Consolidated Statements of Operations for the Three Months Ended October 31, 1996 and 1995 4 Condensed Consolidated Statements of Cash Flows for the Three Months Ended October 31, 1996 and 1995 5-6 Notes to Condensed Consolidated Financial Statements 7-11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12-14 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 15 SIGNATURES 16 EXHIBIT INDEX 17
3 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
October 31, July 31, 1996 1996 ASSETS CURRENT ASSETS: Cash and equivalents $ 3,976,564 $ 3,835,479 Accounts receivable, net 13,825,642 13,306,064 Costs and estimated earnings in excess of billings 9,264,483 7,137,212 Deferred tax assets, net 1,228,414 1,261,065 Other current assets 1,196,856 1,248,405 Total current assets 29,491,959 26,788,225 PROPERTY AND EQUIPMENT, net 20,062,263 19,574,410 OTHER ASSETS: Intangible assets, net 4,800,674 4,839,447 Deferred tax assets 879,768 598,887 Other 239,241 272,916 Total other assets 5,919,683 5,711,250 TOTAL $55,473,905 $52,073,885 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 4,890,895 $ 3,541,789 Notes payable 1,831,202 2,758,795 Billings in excess of costs and estimated earnings 38,714 Accrued self-insured claims 2,648,739 3,064,229 Income taxes payable 1,147,697 227,619 Other accrued liabilities 7,824,142 8,151,589 Total current liabilities 18,342,675 17,782,735 NOTES PAYABLE 9,625,462 9,452,630 ACCRUED SELF-INSURED CLAIMS 7,833,721 7,062,150 Total liabilities 35,801,858 34,297,515 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Common stock, par value $.33 1/3 per share: 50,000,000 shares authorized; 8,674,784 and 8,601,492 shares issued and outstanding, respectively 2,891,594 2,867,164 Additional paid-in capital 24,682,897 24,473,269 Retained deficit (7,902,444) (9,564,063) Total stockholders' equity 19,672,047 17,776,370 TOTAL $55,473,905 $52,073,885 See notes to condensed consolidated financial statements--unaudited.
4 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months Ended October 31, October 31, 1996 1995 REVENUES: Contract revenues earned $40,275,232 $37,365,990 Other, net 91,993 239,593 Total 40,367,225 37,605,583 Expenses: Costs of earned revenues excluding depreciation 32,418,734 30,615,519 General and administrative 3,571,985 3,898,159 Depreciation and amortization 1,488,144 1,376,420 Total 37,478,863 35,890,098 INCOME BEFORE INCOME TAXES 2,888,362 1,715,485 PROVISION (BENEFIT) FOR INCOME TAXES: Current 1,474,974 1,163,888 Deferred (248,231) (417,041) Total 1,226,743 746,847 NET INCOME $ 1,661,619 $ 968,638 EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE: Primary $0.19 $0.11 Fully diluted $0.19 $0.11 SHARES USED IN COMPUTING EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE: Primary 8,897,939 8,546,782 Fully diluted 8,898,218 8,546,782 See notes to condensed consolidated financial statements--unaudited.
5 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Three Months Ended October 31, October 31, 1996 1995 Increase (Decrease) in Cash and Equivalents from: OPERATING ACTIVITIES: Net income $ 1,661,619 $ 968,638 Adjustments to reconcile net cash provided by operating activities: Depreciation and amortization 1,488,144 1,376,420 Gain on disposal of assets (19,562) (144,033) Deferred income taxes (248,231) (417,041) Changes in assets and liabilities: Accounts receivable, net (519,578) 3,751,344 Unbilled revenues, net (2,165,985) (1,466,994) Other current assets 51,549 155,560 Other assets 33,675 (6,276) Accounts payable 1,349,106 (1,794,074) Accrued self-insured claims and other liabilities 28,085 895,898 Accrued income taxes 920,078 783,261 Net cash inflow from operating activities 2,578,900 4,102,703 INVESTING ACTIVITIES: Capital expenditures (1,607,499) (943,240) Proceeds from sale of assets 85,235 379,235 Net cash outflow from investing activities (1,522,264) (564,005) FINANCING ACTIVITIES: Principal payments on notes payable and bank lines-of-credit (1,149,609) (1,649,581) Exercise of stock options 234,058 23,008 Net cash outflow from financing activities (915,551) (1,626,573) NET CASH INFLOW FROM ALL ACTIVITIES 141,085 1,912,125 CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 3,835,479 4,306,675 CASH AND EQUIVALENTS AT END OF PERIOD $ 3,976,564 $ 6,218,800 See notes to condensed consolidated financial statements--unaudited.
6 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (Unaudited)
For the Three Months Ended October 31, October 31, 1996 1995 SUPPLEMENTAL DISCLOSURES OF CASH FLOW AND NON-CASH INVESTING AND FINANCING ACTIVITIES: Cash paid during the period for: Interest $ 277,547 $ 445,161 Income taxes 560,965 392,005 Property and equipment acquired and financed with: Capital lease obligations $ 394,848 See notes to condensed consolidated financial statements--unaudited.
7 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--Unaudited 1. The accompanying condensed consolidated balance sheets of Dycom Industries, Inc. ("Dycom" or the "Company") as of October 31, 1996 and July 31, 1996, the related condensed consolidated statements of operations for the three months ended October 31, 1996 and 1995 and the condensed consolidated statements of cash flows for the three months ended October 31, 1996 and 1995 reflect all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of such statements. The results of operations for the three months ended October 31, 1996 are not necessarily indicative of the results which may be expected for the entire year. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION-- The condensed consolidated financial statements include Dycom Industries, Inc. and its subsidiaries, all of which are wholly- owned. The Company's operations consist primarily of telecommunication and electric utility services contracting. All material intercompany accounts and transactions have been eliminated. USE OF ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and revenues and expenses during the period reported. Actual results could differ from those estimates. Estimates are used for the revenue recognition of work-in-process, allowance for doubtful accounts, self-insured claims liability, deferred tax asset valuation allowance, depreciation and amortization, and the estimated lives of assets, including intangible assets. REVENUE-- Income on long-term contracts is recognized on the percentage-of- completion method based primarily on the ratio of contract costs incurred to date to total estimated contract costs. As some of these contracts extend over one or more years, revisions in cost and profit estimates during the course of the work are reflected in the accounting period as the facts that require the revision become known. At the time a loss on a contract becomes known, the entire amount of the estimated ultimate loss is accrued. Income on short-term unit contracts is recognized as the related work is completed. Work-in-process on unit contracts is based on management's estimate of work performed but not billed. "Costs and estimated earnings in excess of billings" represent the excess of contract revenues recognized under the percentage-of-completion method of accounting for long-term contracts and work-in-process on unit contracts over billings to date. For those contracts in which billings exceed contract revenues recognized to date, such excesses are included in the caption "billings in excess of costs and estimated earnings". CASH AND EQUIVALENTS-- Cash and equivalents include cash balances in excess of the daily requirements which are invested in overnight repurchase agreements, certificates of deposits, and various other financial instruments having a maturity of three months or less. For purposes of the condensed consolidated statements of cash flows, the Company considers these amounts to be cash equivalents. The carrying amount reported in the condensed consolidated balance sheets for cash and equivalents approximates its fair value. 8 PROPERTY AND EQUIPMENT-- Property and equipment is stated at cost, reduced in certain cases by valuation reserves. Depreciation and amortization is computed over the estimated useful life of the assets utilizing the straight-line method. The estimated useful lives of the assets are: buildings--20-31 years; leasehold improvements--the term of the respective lease or the estimated useful life of the improvement, whichever is shorter; vehicles--3-7 years; equipment and machinery--3-10 years; and furniture and fixtures--3-10 years. Maintenance and repairs are expensed as incurred; expenditures that enhance the value of the property or extend its useful life are capitalized. When assets are sold or retired, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in income. INTANGIBLE ASSETS-- The excess of the purchase price over the fair market value of the tangible net assets of acquired businesses (goodwill) is amortized on the straight-line method over 40 years. The appropriateness of the carrying value of intangible assets is continually reviewed and adjusted where appropriate. The ongoing assessment of intangible assets for impairment is based on the recoverability of such amounts through future operations. Amortization expense, which is comprised primarily of goodwill, was $38,773 for the three month periods ended October 31, 1996 and 1995. The intangible assets are net of accumulated amortization of $1,035,043 at October 31, 1996 and $996,270 at July 31, 1996. LONG-LIVED ASSETS-- In March 1995, the FASB issued SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". SFAS No. 121 requires that the long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company adopted the provisions of SFAS No. 121 effective August 1, 1996 and determined that no impairment loss need be recognized. SELF-INSURED CLAIMS LIABILITY-- The Company is primarily self-insured, up to certain limits, for automobile and general liability, workers' compensation, and employee group health claims. A liability for unpaid claims and the associated claim expenses, including incurred but not reported losses, is actuarially determined and reflected in the condensed consolidated financial statements as an accrued liability. The self-insured claims liability includes incurred but not reported losses of $4,998,000 and $4,458,000 at October 31, 1996 and July 31, 1996, respectively. The determination of such claims and expenses and the appropriateness of the related liability is continually reviewed and updated. INCOME TAXES-- The Company and its subsidiaries file a consolidated federal income tax return. Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. A valuation allowance is provided when it is more likely than not that some portion of the Company's deferred tax assets will not be realized. Management has evaluated the available evidence about the Company's future taxable income and other possible sources of realization of deferred tax assets. The valuation allowance recorded in the financial statements reduces deferred tax assets to an amount that represents management's best estimate of the amount of such deferred tax assets that more likely than not will be realized. Accordingly, at October 31, 1996 and July 31, 1996, deferred tax assets are net of a valuation allowance of $728,491. PER SHARE DATA-- Earnings per common and common equivalent share are computed using the weighted average shares of common stock outstanding plus the common stock equivalents arising from the effect of dilutive stock options, using the treasury stock method. 9 CHANGE IN ACCOUNTING PRINCIPLE-- In October, 1995, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock Based Compensation," which was effective for the Company beginning August 1, 1996. SFAS No. 123 requires expanded disclosures of stock based compensation arrangements with employees and encourages, but does not require, compensation cost to be measured based on the fair value of the equity instrument awarded. Under SFAS No. 123, companies are permitted, however, to continue to apply Accounting Principles Board ("APB") Opinion No. 25, which recognizes compensation cost based on the intrinsic value of the equity instrument awarded. The Company will continue to apply APB Opinion No. 25 to its stock based compensation awards to employees and will disclose in the annual financial statements the required pro forma effect on net income and earnings per share. 3. ACCOUNTS RECEIVABLE Accounts receivable, net consist of the following:
October 31, July 31, 1996 1996 Contract billings $13,090,485 $12,305,652 Retainage 1,095,068 1,138,619 Other receivables 343,034 368,677 Total 14,528,587 13,812,948 Less allowance for doubtful accounts 702,945 506,884 Accounts receivable, net $13,825,642 $13,306,064
4. COSTS AND ESTIMATED EARNINGS ON CONTRACTS IN PROGRESS The accompanying condensed consolidated balance sheets include costs and estimated earnings on contracts in progress, net of progress billings as follows:
October 31, July 31, 1996 1996 Costs incurred on contracts in progress $22,717,616 $24,272,835 Estimated earnings thereon 217,614 334,905 22,935,230 24,607,740 Less billings to date 13,670,747 17,509,242 $ 9,264,483 $ 7,098,498 Included in the accompanying condensed consolidated balance sheets under the captions: Costs and estimated earnings in excess of billings $9,264,483 $ 7,137,212 Billings in excess of costs and estimated earnings (38,714) $9,264,483 $ 7,098,498
10 5. PROPERTY AND EQUIPMENT The accompanying condensed consolidated balance sheets include the following property and equipment:
October 31, July 31, 1996 1996 Land $ 1,958,777 $ 1,711,464 Buildings 2,319,810 2,236,322 Leasehold improvements 787,180 743,101 Vehicles 22,527,661 22,153,365 Equipment and machinery 20,646,268 20,033,610 Furniture and fixtures 3,878,614 3,541,638 Total 52,118,310 50,419,500 Less accumulated depreciation and amortization 32,056,047 30,845,090 Property and equipment, net $20,062,263 $19,574,410
Certain subsidiaries of the Company entered into lease arrangements accounted for as capitalized leases. The carrying value of capital leases at October 31, 1996 and July 31, 1996 was $742,180 and $372,170, respectively, net of accumulated depreciation of $148,251 and $123,413 respectively. Capital leases are included as a component of equipment and machinery. 6. NOTES PAYABLE Notes and loans payable are summarized by type of borrowings as follows:
October 31, July 31, 1996 1996 Bank Credit Agreement: Revolving credit facility $ 9,000,000 $ 9,000,000 Term-loan 1,162,812 2,162,812 Equipment acquisition term-loans 591,667 704,167 Capital lease obligations 702,185 344,446 Total 11,456,664 12,211,425 Less current portion 1,831,202 2,758,795 Notes payable--non-current $ 9,625,462 $ 9,452,630
At October 31, 1996, the Company had a bank credit agreement consisting of a $9.0 million revolving credit facility, a $1.2 million term-loan, a $5.0 million equipment acquisition facility of which $3.7 million was available, and a $9.8 million standby letter of credit facility of which $0.6 million was available. The bank credit agreement contains restrictions which, among other things, require maintenance of certain financial ratios and covenants, restrict encumbrances of assets and creation of indebtedness, and limit the payment of cash dividends. Cash dividends are limited to 33 1/3 percent of earnings available for distribution as dividends. No cash dividends have been paid during the three month period ending October 31, 1996. Substantially all the Company's assets are pledged as collateral under the terms of the agreement. At October 31, 1996, the Company was in compliance with all financial covenants and conditions. 11 The interest rate on the term-loan and the revolving credit facility is at the bank's prime interest rate plus one-half percent (8.75% at October 31, 1996 and July 31, 1996). The interest rate on the outstanding equipment acquisition term-loans are at the bank's prime interest rate plus three- quarters percent (9.00% at October 31, 1996 and July 31, 1996). The interest rate on equipment acquisition term-loans subsequent to November 30, 1995 is at the bank's prime interest rate plus one-half percent. Interest costs incurred on notes payable, all of which were expensed, for the three month periods ended October 31, 1996 and 1995 were $240,343 and $429,008, respectively. Such amounts are included in general and administrative expenses in the accompanying condensed consolidated statements of operations. The term-loan quarterly principal payments increased to $1.0 million in September, 1995. The outstanding balance of the equipment acquisition term- loans is payable quarterly through January 1998. The revolving credit facility is used to finance working capital and is payable in March 1998. At October 31, 1996, the Company had $9.2 million in outstanding standby letters of credit issued as security to the Company's insurance administrators as part of its self-insurance program. The capital equipment acquisition facility and standby letter of credit facility expired November 30, 1996. The Company has petitioned the bank for renewal of these facilities and anticipates that the renewals will be granted. In addition to the borrowings under the bank credit agreement, certain subsidiaries have outstanding obligations under capital leases. The obligations are payable in monthly installments expiring at various dates through October 2001. 7. COMMITMENTS AND CONTINGENCIES In the normal course of business, certain subsidiaries of the Company have pending and unasserted claims. Although the ultimate resolution and liability of these claims cannot be determined, management believes the final disposition of these claims will not have a material adverse impact on the Company's consolidated financial condition or results of operations. 12 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of the Company's consolidated financial condition and results of operations. The discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto. Results of Operations The Company reported earnings per common and common equivalent share of $0.19 for the quarter ended October 31, 1996. This compares to earnings per common and common equivalent share of $0.11 for the quarter ended October 31, 1995. Earnings per common share assuming full dilution was $0.19 for the quarter ended October 31, 1996 compared to $0.11 for the quarter ended October 31, 1995. Contract revenues for the quarter ended October 31, 1996 increased 7.8% to $40.3 million, as compared to $37.4 million for the same quarter last year. The increase in contract revenues is primarily attributable to the increased volume experienced in the telecommunication services group and the utility line locating services group. The telecommunication services group contract revenues increased 6.7% to $33.4 million and the utility line locating services group contract revenues increased 35.9% to $4.4 million for the current quarter compared to the same quarter last year. The electrical services group contract revenues reflect a 12.4% decrease for the quarter as compared to the corresponding period last year. The decline in the electrical services group's contract revenues is attributable to lower volume on existing multi-year comprehensive service contracts which was partially offset by an increase in bid contracts. The contract revenue mix between telecommunication services, utility line locating services and electrical services for the quarter ended October 31, 1996 was 83%, 11%, and 6%, respectively, and 84%, 9% and 7%, respectively, for the quarter ended October 31, 1995. Contract revenues from multi-year comprehensive service contracts continues to be a significant source of contract revenue. For the three month periods ended October 31, 1996 and 1995, multi-year comprehensive service contracts included in the telecommunication services group, represented 58% and 65% of total contract revenues, respectively. The decline in the multi-year comprehensive service contracts was offset by an increase in contract revenues on bid contracts and design and drafting activity during the quarter ended October 31, 1996 compared to the same period last year. The Company's backlog of uncompleted work at October 31, 1996 was $224 million as compared to $188 million at October 31, 1995. Several bid contracts were awarded during the three month period ended October 31, 1996 in the telecommunication services group totaling $8 million. Bid contracts totaling $6 million were awarded in the electrical services group. The Company's costs and operating expenses may be affected by a number of factors including contract volumes, character of services rendered, work locations, competition, and changes in productivity. Costs of earned revenues, excluding depreciation, were 80% and 82% of contract revenues for the quarters ended October 31, 1996 and 1995, respectively. As a percentage of contract revenues, the Company's prime costs of direct labor, materials, subcontractors, and equipment costs were 57% for the quarter ended October 31, 1996 compared to 61% for the corresponding period last year. Operating efficiencies and productivity in the labor force and the utilization of more modern equipment were the major factors contributing to the improved margins. 13 General and administrative expenses decreased $0.3 million for the quarter ended October 31, 1996 to $3.6 million as compared to $3.9 million for the same quarter last year. This decrease is primarily attributable to reduced interest costs on the declining balance of the outstanding indebtedness and a reduction in professional fees and administrative salaries, wages, and related payroll taxes. The effective income tax rate differs from the statutory rate due to state income taxes, the amortization of intangible assets with no tax benefit and other non-deductible expenses for tax purposes. Liquidity and Capital Resources The Company's primary sources of cash and equivalents has historically been from operating activities and the proceeds from the sale of idle and surplus real property and equipment. Strong operating results continued to finance the Company's working capital and capital expenditure requirements. These internally generated sources of funds continue to be the Company's primary source of liquidity as available borrowing capabilities under the bank credit agreement are limited. Net cash flows from operating activities were $2.6 million for the quarter ended October 31, 1996 as compared to $4.1 million for the comparable quarter last year. This reduction in cash flow from operating activities resulted from an increase in accounts receivable and unbilled revenues, partially offset by an increase in accounts payable. The Company's sources of funds provided for capital expenditures of $1.6 million during the three month period ended October 31, 1996. During the current quarter, an additional $0.4 million of equipment was financed by capital leases. These capital expenditures represent the normal replacement of equipment. Aside from these capital expenditures, the Company obtained approximately $0.7 million of equipment under various noncancelable operating leases. At October 31, 1996, the Company had outstanding borrowings under a term-loan of $1.2 million, equipment acquisition term-loans aggregating $0.6 million, and a revolving credit facility of $9.0 million. The interest rate on the term-loan and revolving credit facility is at the bank's prime interest rate plus one-half percent (8.75% at October 31, 1996). The interest rate on the outstanding equipment acquisition term-loans is at the bank's prime interest rate plus three-quarters percent (9.00% at October 31, 1996). The interest rate on the equipment acquisition term-loans subsequent to November 30, 1995 is at the bank's prime interest rate plus one-half percent. The outstanding principal on the term-loan and equipment acquisition term-loans are payable quarterly through March 1997 and January 1998, respectively. The revolving credit facility is used to finance working capital and is payable March 1998. Substantially all of the Company's assets are pledged as collateral in support of these facilities. In addition, the Company has available a $9.8 million standby letter of credit facility of which $0.6 million was available and a $5.0 million capital equipment acquisition facility of which $3.7 million was available at October 31, 1996. The standby letter of credit facility is issued as security to the Company's insurance administrators as part of its self-insurance program. Both facilities expired November 30, 1996. The Company has petitioned the bank for renewal of these facilities and anticipates that the renewals will be granted. The bank credit agreement contains provisions regarding minimum working capital, tangible net worth, debt-to-equity ratios and certain other financial covenants. At October 31, 1996, the Company was in compliance with all financial covenants and conditions. 14 No cash dividends have been paid during the quarter ended October 31, 1996. The Board will determine future dividend policies based on financial condition, profitability, cash flow, capital requirements, and business outlook, as well as other factors relevant at the time. The Company's bank credit agreement limits the payment of cash dividends to 33 1/3 percent of earnings available for distribution as dividends. The Company foresees its capital resources together with existing cash balances, to be sufficient to meet its financial obligations, including the scheduled debt payments under the bank credit agreement and operating lease commitments, and to support the Company's normal replacement of equipment at its current level of business. The Company's future operating results and cash flows may be affected by a number of factors including, the Company's success in bidding on future contracts and the Company's ability to effectively manage controllable costs. 15 PART II. OTHER INFORMATION __________________________ Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibits furnished pursuant to the requirements of Form 10-Q: See Exhibit Index on Page 17 (b) Reports On Form 8-K No reports on Form 8-K were filed on behalf of the Registrant during the quarter ended October 31, 1996. 16 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DYCOM INDUSTRIES, INC. Registrant Date: December 11, 1996 /s/ Thomas R. Pledger _________________ ____________________________ Thomas R. Pledger Chairman and Chief Executive Officer Date: December 11, 1996 /s/ Steven Nielsen _________________ ____________________________ Steven E. Nielsen President and Chief Operating Officer Date: December 11, 1996 /s/ Douglas J. Betlach _________________ ____________________________ Douglas J. Betlach Vice President and Chief Financial Officer
17 EXHIBIT INDEX
Number Description ______ ___________ (11) Statement re computation of per share earnings (27) Financial Data Schedule
EX-11 2 EXHIBIT 11 EXHIBIT 11 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS THE QUARTERS ENDED OCTOBER 31, 1996 AND 1995 (WHOLE DOLLARS EXCEPT PER SHARE DATA)
October 31, October 31, 1996 1995 Net Income (Loss) Applicable to Common stock $1,661,619 $ 968,638 ========= ========== Primary Earnings (Loss): Weighted average number of common shares outstanding 8,664,449 8,546,782 Common share equivalents arising from stock options 233,490 0 ---------- ---------- Weighted average number of common shares as adjusted 8,897,939 8,546,782 ========== ========== Net Income (Loss) per common and common equivalent share $ 0.19 $ 0.11 ========== ========== Fully Diluted Earnings (Loss): Weighted average number of common shares outstanding 8,664,449 8,546,782 Common share equivalents arising from stock options 233,769 0 ---------- ---------- Weighted average number of Common shares as adjusted 8,898,218 8,546,782 ========== ========== Net Income (Loss) per common and common equivalent share $ 0.19 $ 0.11 ========== ========== In the quarter ended October 31, 1995 common share equivalents arising from stock options did not impact the per share amounts as they were either insignificant or anti-dilutive.
EX-27 3 EXHIBIT 27
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE DYCOM INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEET AT OCTOBER 31, 1996 AND THE CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED OCTOBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000067215 DYCOM INDUSTRIES, INC. 1 U.S. DOLLARS 3-MOS JUL-31-1997 OCT-31-1996 1 3,976,564 0 14,185,553 702,945 9,264,483 29,491,959 52,118,310 32,056,047 55,473,905 18,342,675 11,456,664 0 0 2,891,594 16,780,453 55,473,905 0 40,275,232 0 32,418,734 1,488,144 0 256,371 2,888,362 1,226,743 1,661,619 0 0 0 1,661,619 .19 .19
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