8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

Date of Report (Date of earliest event reported): May 25, 2010

DYCOM INDUSTRIES, INC.

(Exact name of Registrant as specified in its charter)

Florida	001-10613	59-1277135
(State or other jurisdiction) of incorporation)	(Commission file number)	(I.R.S. employer identification no.)

11770 U.S. Highway One, Suite 101

Palm Beach Gardens, Florida 33408

(Address of principal executive offices) (Zip Code)

(561) 627-7171

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c))

TABLE OF CONTENTS

	Item 2.02 Results of Operations and Financial Condition
	Item 7.01 Regulation FD Disclosure
	Item 9.01 Financial Statement and Exhibits
SIGNATURES
EX-99.1
EX-99.2
EX-99.3

Item 2.02 Results of Operations and Financial Condition.

On May 25, 2010, Dycom Industries, Inc. (the “Company”) issued a press release reporting third quarter of fiscal 2010 results. Additionally, on May 26, 2010, the Company made available a slide presentation to be discussed during the Company’s webcast and conference call referred to in such press release. A copy of the press release, slide presentation, and transcript of the conference call are furnished as Exhibits to this report on Form 8-K and is incorporated herein by reference.

The press release, slide presentation, and transcript of the conference call include certain Non-GAAP items that are set forth in the GAAP reconciliation schedules provided in the release and slide presentation. The Company believes these Non-GAAP financial measures are useful to investors because it allows for a more direct comparison of the Company’s performance for the period with the Company’s performance in the comparable prior-year periods.

The information in the preceding paragraphs, as well as Exhibits 99.1, 99.2 and 99.3 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section. It may only be incorporated by reference into another filing under the Exchange Act or Securities Act of 1933 if such subsequent filing specifically references this Current Report on Form 8-K.

Item 7.01 Regulation FD Disclosure

On May 25, 2010, the Company issued a press release reporting third quarter of fiscal 2010 results. Additionally, on May 26, 2010, the Company made available a slide presentation to be discussed during the Company’s webcast and conference call referred to in such press release. A copy of the press release, slide presentation, and transcript of the conference call are furnished as Exhibits to this report on Form 8-K and is incorporated herein by reference.

The press release, slide presentation, and transcript of the conference call include certain Non-GAAP items that are set forth in the GAAP reconciliation schedules provided in the release and slide presentation. The Company believes these Non-GAAP financial measures are useful to investors because it allows for a more direct comparison of the Company’s performance for the period with the Company’s performance in the comparable prior-year periods.

The information in the preceding paragraphs, as well as Exhibits 99.1, 99.2 and 99.3 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section. It may only be incorporated by reference into another filing under the Exchange Act or Securities Act of 1933 if such subsequent filing specifically references this Current Report on Form 8-K.

Forward Looking Statements

This Current Report on Form 8-K contains forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act, including statements with respect to the Company’s fiscal 2010 fourth quarter results. These statements are based on management’s current expectations, estimates and projections. Forward-looking statements are subject to risks and uncertainties that may cause actual results in the future to differ materially from the results projected or implied in any forward-looking statements contained in this press release. Such risks and uncertainties include: business and economic conditions in the telecommunications industry affecting our customers, the adequacy of our insurance and other reserves and allowances for doubtful accounts, whether the carrying value of our assets may be impaired, the impact of any future acquisitions, the anticipated outcome of other contingent events, including litigation, liquidity needs and the availability of financing, as well as other risks detailed in the Company’s other filings with the Securities and Exchange Commission. These filings are available on a web site maintained by the Securities and Exchange Commission at http://www.sec.gov. The Company does not undertake to update forward looking statements except as required by law.

Item 9.01 Financial Statement and Exhibits.

99.1	Press release dated May 25, 2010 by Dycom Industries, Inc announcing the third quarter fiscal 2010 results.
99.2	Slide presentation relating to the webcast and conference call held regarding the Company’s fiscal 2010 third quarter results, which took place on May 26, 2010.
99.3	Transcript of Dycom Industries Inc. webcast and conference call to review its fiscal 2010 third quarter results, which took place on May 26, 2010.

2

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: May 26, 2010

DYCOM INDUSTRIES, INC. (Registrant)
By:	/s/ H. Andrew DeFerrari
	Name:	H. Andrew DeFerrari
	Title:	Senior Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

N E W S    R E L E A S E

FOR IMMEDIATE RELEASE Contact: Steven E. Nielsen, President and CEO

H. Andrew DeFerrari, Senior Vice President and CFO

(561) 627-7171

Palm Beach Gardens, Florida May 25, 2010

DYCOM ANNOUNCES FISCAL 2010 THIRD QUARTER RESULTS

Palm Beach Gardens, Florida, May 25, 2010--Dycom Industries, Inc. (NYSE: DY) announced today its results for the third quarter ended April 24, 2010.  The Company reported:

·   contract revenues of $231.6 million for the quarter ended April 24, 2010, compared to $257.7 million for the quarter ended April 25, 2009, a decrease of 10.1%;

·   income from continuing operations on a GAAP basis of $1.6 million, or $0.04 per common share diluted, for the quarter ended April 24, 2010, compared to $7.6 million, or $0.19 per common share diluted, for the quarter ended April 25, 2009;  and

·   income from continuing operations on a Non-GAAP basis of $0.6 million, or $0.02 per common share diluted, for the quarter ended April 24, 2010, compared to $5.0 million, or $0.13 per common share diluted, for the quarter ended April 25, 2009.

Non-GAAP income from continuing operations for the quarter ended April 24, 2010 excludes a $1.0 million reduction to income tax expense related to the reversal of certain income tax liabilities no longer required. For the quarter ended April 25, 2009, Non-GAAP income from continuing operations excludes a pre-tax gain of $1.7 million related to the buyback of $10.0 million aggregate principal amount of the Company’s senior subordinated notes, and a reduction of interest and income tax expenses of $0.3 million and $1.4 million, respectively, related to the reversal of certain income tax liabilities no longer required.  See the accompanying table which presents a reconciliation of Non-GAAP income from continuing operations to GAAP income from continuing operations.

The Company also reported:

·   contract revenues of $707.1million for the nine months ended April 24, 2010, compared to $837.2  million for the nine months ended April 25, 2009, a decrease of 15.5%;

·   income from continuing operations on a GAAP basis of $1.2 million, or $0.03 per common share diluted, for the nine months ended April 24, 2010, compared to a loss of $59.8million, or $1.52 per common share diluted, for the nine months ended April 25, 2009; and

·   income from continuing operations on a Non-GAAP basis of $2.1 million, or $0.05 per common share diluted, for the nine months ended April 24, 2010, compared to Non-GAAP income from continuing operations of $14.2 million, or $0.36 per common share diluted, for the nine months ended April 25, 2009.

Non-GAAP income from continuing operations for the nine months ended April 24, 2010 excludes a $1.6 million pre-tax charge in cost of earned revenues for the settlement of a wage and hour class action claim, a $1.1 million non-cash charge to income tax expense for a valuation allowance against a deferred tax asset recorded during the first quarter of fiscal 2010, and a $1.0 million reduction to income tax expense related to the reversal of certain income tax liabilities no longer required.  For the nine months ended April 25, 2009, Non-GAAP income from continuing operations excludes a pre-tax goodwill impairment charge of $94.4 million, a pre-tax gain of approximately $3.0 million related to the buyback of $14.65 million aggregate principal amount of the Company’s senior subordinated notes, the write-off of $0.6 million of deferred financing costs in connection with the replacement of the Company’s credit facility during the prior year, and a reduction of interest and income tax expenses of $0.3 million and $1.4 million, respectively, related to the reversal of certain income tax related liabilities no longer required.  See the accompanying table which presents a reconciliation of Non-GAAP income from continuing operations to GAAP income from continuing operations.

A Tele-Conference call to review the Company’s results will be hosted at 9 a.m. (ET), Wednesday, May 26, 2010; Call 800-230-1074 (United States) or 612-288-0329 (International) and request “Dycom Results” conference call.  A live webcast of the conference call, along with a slide presentation, will be available at http://www.dycomind.com under the heading “Events.”  If you are unable to attend the conference call at the scheduled time, a replay of the live webcast and the slide presentation will be available at http://www.dycomind.com until Friday, June 25, 2010.

Dycom is a leading provider of specialty contracting services throughout the United States.  These services include engineering, construction, maintenance and installation services to telecommunications providers, underground facility locating services to various utilities including telecommunications providers, and other construction and maintenance services to electric and gas utilities and others.

Fiscal 2010 third quarter and nine-month results are preliminary and are unaudited.  This press release may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act.  These statements are based on management’s current expectations, estimates and projections.  Forward-looking statements are subject to risks and uncertainties that may cause actual results in the future to differ materially from the results projected or implied in any forward-looking statements contained in this press release.  Such risks and uncertainties include:  business and economic conditions in the telecommunications industry affecting our customers, the adequacy of our insurance and other reserves and allowances for doubtful accounts, whether the carrying value of our assets may be impaired, the impact of any future acquisitions, the anticipated outcome of other contingent events, including litigation, liquidity needs and the availability of financing, as well as other risks detailed in our filings with the Securities and Exchange Commission.  The Company does not undertake to update forward-looking statements.

--- Tables Follows ---

NYSE: "DY"
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
April 24, 2010 and July 25, 2009
Unaudited
	April 24,		July 25,
	2010		2009
	($ in 000's)
ASSETS
Current Assets:
Cash and equivalents	$	116,155	$	104,707
Accounts receivable, net		96,773		116,968
Costs and estimated earnings in excess of billings		59,867		67,111
Deferred tax assets, net		14,033		15,779
Income taxes receivable		8,213		7,016
Inventories		13,091		8,303
Other current assets		11,212		7,323
Total current assets		319,344		327,207
Property and equipment, net		137,740		142,132
Goodwill		157,851		157,851
Intangible assets, net		51,309		56,056
Other		10,339		10,211
Total	$	676,583	$	693,457
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	28,003	$	28,977
Current portion of debt		150		926
Billings in excess of costs and estimated earnings		582		151
Accrued insurance claims		26,919		27,386
Other accrued liabilities		42,095		52,590
Total current liabilities		97,749		110,030
Long-term debt		135,350		135,377
Accrued insurance claims		26,957		29,759
Deferred tax liabilities, net non-current		23,786		22,910
Other liabilities		3,650		4,758
Stockholders' Equity		389,091		390,623
Total	$	676,583	$	693,457

NYSE: "DY"
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
	Three Months			Three Months			Nine Months			Nine Months
	Ended			Ended			Ended			Ended
	April 24,			April 25,			April 24,			April 25,
	2010			2009			2010			2009
				(In 000's, except per share amounts)
Contract revenues	$	231,636		$	257,719		$	707,082		$	837,209
Cost of earned revenues, excluding depreciation and amortization		191,333			206,733			582,241			681,239
General and administrative expenses (1)		24,297			24,276			71,698			73,350
Depreciation and amortization		15,852			16,163			46,558			49,592
Goodwill impairment charge		-			-			-			94,429
Total		231,482			247,172			700,497			898,610
Interest income		27			60			85			234
Interest expense		(3,386	)		(3,162	)		(10,470	)		(11,313	)
Other income, net		4,451			3,566			6,459			5,799
Income (loss) from continuing operations before income taxes		1,246			11,011			2,659			(66,681	)
Provision (benefit) for income taxes		(402	)		3,442			1,453			(6,882	)
Income (loss) from continuing operations		1,648			7,569			1,206			(59,799	)
Income (loss) from discontinued operations, net of tax		-			28			-			(9	)
Net income (loss)	$	1,648		$	7,597		$	1,206		$	(59,808	)
Income (loss) per common share - Basic:
Income (loss) from continuing operations	$	0.04		$	0.19		$	0.03		$	(1.52	)
Income (loss) from discontinued operations		-			-			-			-
Net income (loss)	$	0.04		$	0.19		$	0.03		$	(1.52	)
Income (loss) per common share - Diluted:
Income (loss) from continuing operations	$	0.04		$	0.19		$	0.03		$	(1.52	)
Income (loss) from discontinued operations		-			-			-			-
Net income (loss)	$	0.04		$	0.19		$	0.03		$	(1.52	)
Shares used in computing income (loss) per common share:
Basic		39,021,043			39,330,308			39,028,637			39,343,834
Diluted		39,054,443			39,346,102			39,102,612			39,343,834
(1) Includes stock-based compensation expense of $0.8 million and $2.5 million for the three and nine months ended April 24, 2010, respectively, and $0.9 million and $2.8 million for the three and nine months ended April 25, 2009, respectively.

NYSE: "DY"
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP INFORMATION
Unaudited
	Three Months			Three Months			Nine Months			Nine Months
	Ended			Ended			Ended			Ended
	April 24,			April 25,			April 24,			April 25,
	2010			2009			2010			2009
				(In 000's, except per share amounts)
Pre-Tax Reconciling Items increasing (decreasing) income (loss) from continuing operations:
Charge for wage and hour class action settlement	$	-		$	-		$	(1,550	)	$	-
Goodwill impairment charge		-			-			-			(94,429	)
Gain on debt extinguishment, net		-			1,727			-			3,027
Write-off of deferred financing costs		-			-			-			(551	)
Reversal of interest expense on certain income tax liabilities		-			268			-			268
Total Pre-Tax Reconciling Items	$	-		$	1,995		$	(1,550	)	$	(91,685	)
Tax-effect of Pre-Tax Reconciling Items		-			(793	)		714			16,308
Other Reconciling Items increasing (decreasing) income (loss) from continuing operations:
Valuation allowance on deferred tax asset		-			-			(1,090	)		-
Reversal of certain income tax liabilities		999			1,358			999			1,358
Total Reconciling Items, net of tax	$	999		$	2,560		$	(927	)	$	(74,019	)
GAAP income (loss) from continuing operations	$	1,648		$	7,569		$	1,206		$	(59,799	)
Adjustment for Reconciling Items above, net of tax		(999	)		(2,560	)		927			74,019
Non-GAAP income from continuing operations	$	649		$	5,009		$	2,133		$	14,220
Earnings (loss) per common share from continuing operations:
Basic earnings (loss) per share from continuing operations - GAAP	$	0.04		$	0.19		$	0.03		$	(1.52	)
Adjustment for Reconciling Items above, net of tax		(0.03	)		(0.07	)		0.02			1.88
Basic earnings per common share from continuing operations - Non-GAAP	$	0.02		$	0.13		$	0.05		$	0.36
Diluted earnings (loss) per share from continuing operations  - GAAP	$	0.04		$	0.19		$	0.03		$	(1.52	)
Adjustment for Reconciling Items above, net of tax		(0.03	)		(0.07	)		0.02			1.88
Diluted earnings per common share from continuing operations- Non-GAAP	$	0.02		$	0.13		$	0.05		$	0.36
Shares used in computing GAAP earnings (loss) per common share from continuing operations and adjustment for Reconciling Items above:
Basic		39,021,043			39,330,308			39,028,637			39,343,834
Diluted		39,054,443			39,346,102			39,102,612			39,343,834
Shares used in computing Non-GAAP earnings per common share from continuing operations:
Basic		39,021,043			39,330,308			39,028,637			39,343,834
Diluted		39,054,443			39,346,102			39,102,612			39,393,923
Earnings per share amounts may not add due to rounding.

EX-99.2

Exhibit 99.2

3rd Quarter Presentation

May 26, 2010

2

Participants

Steven E. Nielsen
President & Chief Executive Officer

H. Andrew DeFerrari
Chief Financial Officer

Richard B. Vilsoet
General Counsel

3

Forward-Looking Statements and Non-
GAAP Information

Forward-Looking Statements and Non-
GAAP Information

This presentation contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including statements with respect to the
Company’s fiscal 2010 fourth quarter results. The words “believe,” “expect,” “anticipate,”
“estimate,” “intend,” “forecast,” “may,” “should”, “could”, “project,” “outlook” and similar
expressions, including statements regarding backlog, identify forward-looking statements.
These forward-looking statements are based on management’s current expectations,
estimates and projections and speak only as of the date of this presentation. Forward-
looking statements are subject to known and unknown risks and uncertainties that may
cause actual results in the future to differ materially from the results projected or implied in
any forward-looking statements contained in this presentation. The factors that could affect
future results and could cause these results to differ materially from those expressed in the
forward-looking statements include, but are not limited to, those described under Item 1A,
“Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended July 25,
2009, and other risks outlined in the Company’s periodic filings with the Securities and
Exchange Commission (“SEC”). Except as required by law, the Company may not update
forward-looking statements even though its situation may change in the future.

This presentation includes certain “Non-GAAP” financial measures as defined by SEC
rules. As required by the SEC we have provided a reconciliation of those measures to the
most directly comparable GAAP measures on the Regulation G slides included at slides 10
through 12 of this presentation.

4

Q3-2010 Overview

nContract revenue of $231.6 million in Q3-10 increased 7.1%
sequentially from Q2-10

nRevenue trends improving in later half of the quarter

nNon-GAAP Q3-10 results of $0.02per share

nStrong liquidity at April 24, 2010

n$4.5 million in share repurchases

Note:See “Regulation G Disclosure” slide 10 for a reconciliation of GAAP to Non-GAAP financial measures.

5

Revenue Summary

nTop 5 customers represented 64.8% of
revenue in Q3-10 and 61.7% of
revenue in Q3-09

nRevenue decline in Top 5 customers
5.6% and decline at all other
customers 17.3%

nOrganic revenue trend improving in
total

nExcluding Verizon, other customers in
the Top 5 combined grew organically
3.6% in Q3-10

* For comparison purposes, CenturyLink includes combined revenues from CenturyTel, Inc. and Embarq Corporation for each period presented.

Note:See “Regulation G Disclosure” slide 12 for a reconciliation of GAAP to Non-GAAP financial measures.

**Organic revenue change excludes revenue from storm restoration work.

6

Backlog and Employees

Current Contract Awards and Extensions

Customers	Area	Description	Approximate Term (in years)
nAT&T	Georgia South Carolina	Construction services	3
nComcast	Illinois	Installation services	3
nVerizon	Northeast, Mid Atlantic	Engineering services	3
nCharter	Tennessee	Construction and maintenance services	2
nVarious	Kentucky, Kansas, Colorado	Rural fiber construction services	1

7

Summary Results

Note:See “Regulation G Disclosure” slide 10 for a reconciliation of GAAP to Non-GAAP financial measures.

8

Selected Financial Information

nYear-over-year organic revenue decline
of 8.0% (excluding $5.9 million of
revenue in Q3-09 for storm restoration
services)

nCost of earned revenues as a
percentage of revenue impacted by
difficult weather conditions and higher
prices of gasoline

nG&A unchanged year-over-year

nDepreciation & amortization declined
due to the sale of assets and from
assets becoming full depreciated

nOther income, net - Non-GAAP
increased as more assets were sold at
generally higher prices in Q3-10

(a)See “Regulation G Disclosure” slides 10 and 12 for a reconciliation of GAAP to Non-GAAP financial measures.

(b)Amounts may not foot due to rounding.

9

Cash Flow and Liquidity

nCash flows used to fund operations as
activity level increased during the
quarter

nCombined days sales outstanding on
trade receivables and net unbilled
revenues were 61 days in each of Q3-
10 and Q3-09 (a)

nCapital expenditures, net of disposals
at $6.9 million

nStrong financial profile

nDebt less cash was $19.3 million at the
end of Q3-10 compared to cash net of
debt of $0.2 million as of Q2-10

nIn compliance with debt covenants as
ofApril 24, 2010

(a) Days sales outstanding is calculated as the summation of current accounts receivable,
plus costs and estimated earnings in excess of billings, less billings in excess of costs and
estimated earnings, divided by average revenue per day during the respective quarter.

10

Summary

nEconomic environment showing signs of improvement

nSolid customer relationships

nMarket share growing as customers consolidate vendors

nAt the forefront of evolving industry opportunities including those resulting from
industry mergers and acquisitions

nEncouraged by deployment of new technologies to consumers and businesses by
cable operators

nResponding to an increasing number of industry participants for wireless backhaul
services

nLooking ahead to the fourth quarter of fiscal 2010 we expect:

}Total revenue trend that continues to improve with a sequential increase in
excess of 10%, after excluding the incremental week required by our 52/53
week fiscal calendar

}Margins which improve

}Effective tax rate approximately 50% of pre-tax results

11

Appendix: Regulation G Disclosure

12

Appendix: Regulation G Disclosure

13

Appendix: Regulation G Disclosure

Amounts may not foot due to rounding.

(a)Year-over-year growth (decline) percentage is calculated as follows: (i) revenues in the quarterly period less (ii) revenues in the comparative prior year quarterly period; divided by (ii)
revenues in the comparative prior year quarterly period

3rd Quarter Presentation

May 26, 2010

EX-99.3

Exhibit 99.3

CORPORATE PARTICIPANTS

Steve Nielsen

Dycom Industries - President & CEO

Rick Vilsoet

Dycom Industries - General Counsel

Drew DeFerrari

Dycom Industries – CFO

CONFERENCE CALL PARTICIPANTS

Adam Thalhimer

BB&T Capital Markets – Analyst

Alex Rygiel

FBR Capital Markets – Analyst

John Rogers

D.A. Davidson – Analyst

Simon Leopold

Morgan Keegan – Analyst

Michael Funk

Bank of America – Analyst

Synon Carmen

Neuberger Berman – Analyst

Alan Mitrani

Sylvan Lake – Analyst

PRESENTATION

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Dycom results conference call. (Operator Instructions).

I would now like to turn the conference over to your host, Mr. Steven Nielsen, President and CEO. Go ahead, please.

Steve Nielsen - Dycom Industries - President & CEO

Thank you, Beverly. Good morning, everyone. I’d like to thank you for attending our third quarter fiscal 2010 Dycom results conference call. During the call we will be referring to a slide presentation which can be found on our website, www.dycomind.com, under the heading "Events". Relevant slides will be identified by number throughout our presentation. Going to slide one, today we have on the call Drew DeFerrari, our Chief Financial Officer, and Rick Vilsoet, our General Counsel. Now I will turn the call over to Rick Vilsoet. Rick.

Rick Vilsoet - Dycom Industries - General Counsel

Thank you, Steve. Referring to slide two, except for historical information, the statements made by Company management during this call may be forward-looking and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations, estimates and projections and involve known and unknown risks and uncertainties which may cause the Company's actual results in future periods to differ materially from forecasted results. Those risks and uncertainties are more fully described in the Company's periodic filings with the Securities and Exchange Commission. The Company assumes no obligation to update forward-looking statements. Steve.

Steve Nielsen - Dycom Industries - President & CEO

Thanks, Rick. Yesterday we issued a press release announcing our third quarter results. As you review this release, it is important to note the following. During the third quarter of fiscal 2010 we recorded a $1.0 million reduction to income tax expense related to the reversal of certain income tax liabilities no longer required, while during the third quarter of fiscal 2009 we recorded a pre-tax gain of approximately $1.7 million related to the buyback of the Company's senior subordinated notes and a reduction of interest in income tax expenses of $0.3 million and $1.4 million, respectively, related to the reversal of certain income tax liabilities no longer required. For clarity and to enable comparability between periods, my comments will be limited to results from continuing operations excluding these items. A reconciliation of the Non-GAAP results to our GAAP results for the year ago period has been provided with our press release, as well as on slides 10, 11, and 12.

Moving to slide three. Revenue increased sequentially during the quarter by 7.1% to $231.6 million with trends improving in the latter half of the quarter. Revenue declined year-over-year by 10.1%, reflecting customer reductions in capital spending plans and the lack of any meaningful storm restoration services during the quarter. Excluding storm restoration services from the year ago quarter, revenue declined approximately 8.0%.

Volumes during the quarter were mixed from telephone companies with some companies growing, while others continued to cautiously deploy capital for new network initiatives and tightly manage routine capital and maintenance expenditures. On the other hand, spending by cable customers improved and increased year-over-year.

Earnings of $0.02 per share for the third quarter decreased from last year's earnings of $0.13 per share with gross margins increasing sequentially but declining by approximately 240 basis points year-over-year, reflecting particularly difficult weather in the first half of the quarter and a year-over-year increase in fuel prices. We finished the quarter with strong liquidity and used $4.5 million to repurchase our common stock.

Going to slide four, during the quarter we experienced the effects of a weak but improving economy. Revenue from AT&T was up sequentially and up slightly year-over-year. At $51.8 million or 22.4% of revenue, AT&T was our largest customer. Revenue from Comcast was also up sequentially but down year-over-year. Comcast was our second largest customer at $32.5 million or 14.0% of total revenue.

CenturyLink was our third largest customer with revenues of $24.6 million or 10.6% of total revenue. CenturyLink was up sequentially and over 31.0% year-over-year. Revenue from Verizon was $22.4 million. Verizon was Dycom's fourth largest customer for the quarter at 9.7% of revenue. And revenue from Time Warner Cable was up sequentially but down slightly year-over-year. Time Warner Cable was our fifth largest customer at 8.1% of total revenue. Altogether, our top five customers represented 64.8% of revenue and were down 5.6% year-over-year. All other customers declined 17.3%. Interestingly, if Verizon and storm work are excluded, our remaining top five customers grew 3.6% year-over-year for the first time in over nine quarters.

Now moving to slide five. Backlog at the end of the third quarter was $1.024 billion versus $1.078 billion at the end of the second quarter, a decrease of approximately $54.0 million. Of this backlog, approximately $636.0 million is expected to be completed in the next 12 months. During the quarter we continued to book new work and renew existing work. With AT&T we renewed three-year construction services agreements in Georgia and South Carolina. From Comcast, a new three-year installation services agreement in Illinois. For Verizon, a three-year engineering services agreement for the Northeast and Mid-Atlantic. For Charter, construction and maintenance service agreements in Tennessee. And from various rural telecom providers, fiber construction services in Kentucky, Kansas, and Colorado. Headcount increased during the quarter to 8,587, reflecting normal seasonal factors and an improving environment. Now I will turn the call over to Drew for his financial review.

Drew DeFerrari - Dycom Industries – CFO

Thanks, Steve, and good morning everyone. As I discuss the financial results for the quarter, please note that there were several items that impacted our results in the current and prior year periods that will be excluded from my comments. We have provided a reconciliation of these Non-GAAP measures to the GAAP measures in the slide presentation for today's call.

Going to slide number six, contract revenues for the third quarter of 2010 were $231.6 million compared to $257.7 million for the third quarter of 2009. Excluding storm restoration work of approximately $5.9 million in the prior year period, the organic revenue decline was approximately 8.0%. Our mix of revenue by type of customer was similar to the prior year with telecommunications and underground facility locating customers comprising the vast majority of our revenue. Non-GAAP income from continuing operations for the current quarter was $0.6 million compared to $5.0 million on a Non-GAAP basis in the prior year. Earnings per share on a Non-GAAP basis were $0.02 per share compared to $0.13 per share on a Non-GAAP basis in Q3 2009.

Turning to slide number seven. Cost of earned revenues as a percentage of contract revenues was impacted by difficult weather conditions during the quarter. In addition, higher prices for fuel drove up our costs by approximately 100 basis points. General and administrative costs were unchanged compared to the prior year period. Depreciation and amortization was lower in the current quarter due to the sale of assets and from assets becoming fully depreciated. Other income was higher in the current period as more assets were sold at generally higher prices. On a Non-GAAP basis, our effective tax rate was approximately 49.3% for the year to date period, reflecting the impact of certain non-deductible items in relation to our pre-tax income level. We expect our effective tax rate for the fourth quarter to approximate this level.

Now turning to slide number eight, our balance sheet remains strong and we have ended the period with approximately $116.0 million of cash on hand. During the quarter, operating cash flows used $8.2 million, as we funded increasing activity levels in the later part of the quarter. Based on average daily revenue in each period, days sales outstanding were at 61 days, which was at a comparable level with the third quarter of 2009. Capital expenditures, net of disposals, were $6.9 million for the quarter, bringing our nine-month total to $31.7 million. Gross Cap-ex for the quarter was approximately $10.9 million. We anticipate an uptick in our cap-ex during Q4.

We ended the quarter with no borrowings outstanding under our senior credit facility and $131.4 million of availability after providing for letters of credit related to our insurance program. During the current quarter we repurchased over 475,000 shares of our common stock in the open market for approximately $4.5 million. Lastly, as we look ahead to next quarter, please note that our Q4 results will include an extra week of operations as our fiscal 2010 is a 53 week year. Now I will turn the call back to Steve.

Steve Nielsen - Dycom Industries - President & CEO

Thanks, Drew. Going to slide nine. In summary, during the quarter we began to see indications of an improving economy and continued to demonstrate strengths. First and foremost we maintained solid customer relationships throughout our markets. We continued to win projects and extend contracts at acceptable pricing. These successes were reflected in a number of notable contract awards. In addition, in an improving demand environment we have generally increased market share as our customers are consolidating vendor relationships.

Secondly, the strength of those relationships and the value we can generate for our customers has allowed us to be at the forefront of evolving industry opportunities. The long-term drivers of these opportunities are as strong as ever and, in fact, may further strengthen. The government's response last year to a weak economy includes increased funding for broadband initiatives and a number of these initiatives are now moving through the solicitation process.

In addition, industry merger and acquisition activities are expanding new technology deployments. In fact, one recent merger approval included explicit commitments to increase outside plant capital expenditures as a condition of approval. Additionally, we remain encouraged that cable operators have begun to deploy a number of new technologies which will enable them to significantly increase the effective bandwidth of their networks and offer new products to consumers and businesses, while both telephone and cable companies, as well as a number of other industry participants, are aggressively extending or deploying fiber networks to provide wireless backhaul services.

And finally, we are strong financially, maintaining ample liquidity and a robust balance sheet. As our industry continues to evolve, we believe our fundamental strengths will allow us to remain one of the best positioned firms in our industry able to exploit profitable growth opportunities, which appear to be increasing as the economy improves.

As we look ahead we expect total revenues which continue to improve, and increase sequentially, in excess of 10% after excluding the incremental week required by our 52-53 week fiscal calendar, margins which improve and an effective tax rate of approximately 50% of pre-tax results. As the nation's economy emerges from recession we remain encouraged that our major customers possess significant financial strength and remain committed to multi-year capital spending initiatives. We have adjusted our business during a weak economic period and slowing expenditures from a key customer and these adjustments have fortified our strong balance sheet, meaningfully increased our liquidity and positioned us well for emerging growth opportunities.

We remain confident in our strategies, the prospects for our Company, the capabilities of our able employees, and the experience of our management team, who have grown our business following difficult economic times many times before. Now, Beverly, we’ll open the call for questions.

QUESTIONS AND ANDWERS

Operator

(Operator Instructions).

Our first question comes from the line of Adam Thalhimer, BB&T Capital Markets. Go ahead, please.

Adam Thalhimer - BB&T Capital Markets - Analyst

Thanks, good morning, guys.

Steve Nielsen - Dycom Industries - President & CEO

Good morning, Adam.

Adam Thalhimer - BB&T Capital Markets - Analyst

Steve, for the customers where revenue is up year-over-year, what's driving that growth?

Steve Nielsen - Dycom Industries - President & CEO

I think we're seeing just a general upturn in order activity for network providers. We've seen in our locate business a fundamental increase in the number of tickets that we're receiving. And we do have in the case of, the most prominent case of CenturyLink, a continued commitment to expand their deployment of their IPTV product, which is essentially a video over fiber copper network product. In addition, we do also have some of these rural fiber opportunities which are emerging, which are clearly just new deployments of networks.

Adam Thalhimer - BB&T Capital Markets – Analyst

Okay and can you comment on the pricing on new agreements?

Steve Nielsen - Dycom Industries - President & CEO

Yes. We think that the pricing is appropriate and particularly for this stage in the economic cycle. It feels like it has before in terms of how we're able to secure attractive prices for what we do.

Adam Thalhimer - BB&T Capital Markets - Analyst

And with regards to stimulus, you said, I think, you're seeing more bidding opportunities related to stimulus. Has stimulus impacted revenue yet?

Steve Nielsen - Dycom Industries - President & CEO

We have one customer, the Power Board of Chattanooga, Tennessee, that's building a fiber to the home network. Clearly they were a significant customer. They have been a recipient of some stimulus dollars. We have also seen an upturn in activity, which has been funded through RUS-type loans. Some of that predated the stimulus, but certainly it has not diminished. But I actually think that the real impact of the stimulus will be in the second half of calendar ‘10, then in '11 and '12, based on the number of solicitations we're seeing, as well as the schedules attached to those.

Adam Thalhimer - BB&T Capital Markets - Analyst

Great. And then with regards to Verizon, are we in a situation now where FiOS has more or less completely rolled off?

Steve Nielsen - Dycom Industries - President & CEO

We certainly had some FiOS activity in the quarter, but it was not meaningfully significant. So the bulk of what we performed for them were engineering, locating, some master contract services, as well as some services indirectly on their long-distance network. So there's a breadth of activity there, but we are still doing FiOS in a number of markets.

Adam Thalhimer - BB&T Capital Markets - Analyst

And the last question from me, I'm just curious, you talked about a sequential margin improvement in Q4. How would you compare your Q4 margin expectation on a year-over-year basis?

Steve Nielsen - Dycom Industries - President & CEO

I think it ought to be relatively in line. Hopefully we will do better. The one issue obviously that we, that can drive it on any year-over-year period is either a headwind or a tailwind from fuel, which as you know has been bouncing around a little bit lately.

Adam Thalhimer - BB&T Capital Markets - Analyst

Great. Well, congratulations on a strong quarter.

Steve Nielsen - Dycom Industries - President & CEO

Thank you, Adam.

Adam Thalhimer - BB&T Capital Markets - Analyst

Talk to you later.

Operator

Our next question comes from the line of Alex Rygiel, FBR Capital Markets.

Alex Rygiel - FBR Capital Markets - Analyst

It is Alex Rygiel. Good morning, Steve.

Steve Nielsen - Dycom Industries - President & CEO

Good morning, Alex. We knew who it was.

Alex Rygiel - FBR Capital Markets - Analyst

Given your soft guidance or your guidance for fiscal fourth quarter, does that suggest that visibility is improving?

Steve Nielsen - Dycom Industries - President & CEO

We're giving guidelines. I think we felt, particularly on the revenue line, that when we looked at the consensus on the street that it appeared that folks had not understood that we have a 14-week quarter. We want to make sure we call that out. But even based on making adjustments for that fact, it looked like folks were just not as strong on the revenue as we see in the business at this point.

Alex Rygiel - FBR Capital Markets - Analyst

And does the back of the envelope work out to revenues in the fiscal fourth quarter of $270 to $275?

Steve Nielsen - Dycom Industries - President & CEO

We're not giving guidance, but if you take 10% times a number and do some type of an adjustment for an extra week, it probably gets you in that range or maybe a little better.

Alex Rygiel - FBR Capital Markets - Analyst

Perfect. And then you commented, and I just want a clarification here, was fuel a negative 100 basis points or was it fuel and weather that was a negative?

Steve Nielsen - Dycom Industries - President & CEO

No, just the fuel alone was 100 basis points. And as you know, we have not generally commented on weather, but when you had the weather that we did in the Mid Atlantic in February and March, it was a meaningful impact. We had about a 10 day period where we didn't get several hundred employees out to do anything much productive.

Alex Rygiel - FBR Capital Markets - Analyst

As it relates to Verizon and FiOS, I know you mentioned a new three-year engineering contract. Does that contract include any FiOS work?

Steve Nielsen - Dycom Industries - President & CEO

No, that's really primarily a business as usual contract. Their routine work. It can do everything from engineering fiber to cell sites to basic copper engineering, new business. Just a number of different activities.

Alex Rygiel - FBR Capital Markets - Analyst

And lastly in the quarter, how much revenue from Verizon was associated with FiOS?

Steve Nielsen - Dycom Industries - President & CEO

We said it wasn't significant and it was not.

Alex Rygiel - FBR Capital Markets - Analyst

Perfect, thank you very much.

Operator

Our next question comes from the line of John Rogers from Davidson. Go ahead, please.

John Rogers - D.A. Davidson - Analyst

Hi, good morning.

Steve Nielsen - Dycom Industries - President & CEO

Good morning, John.

John Rogers - D.A. Davidson - Analyst

And I apologize, the share repurchases in the quarter, 475,000 shares?

Drew DeFerrari - Dycom Industries - CFO

That's correct. Slightly over that.

John Rogers - D.A. Davidson - Analyst

Okay. And next, in terms of the uptick that you talked about as the cycle plays out, Steve, and who knows how quickly the economy recovers, but your impression of the opportunities, especially the wireless backhaul versus cable over the next number of years compared to what we were looking at coming out of the last recession in terms of FiOS and the fiber-optic and the last mile initiatives, how do those market opportunities compare for Dycom?

Steve Nielsen - Dycom Industries - President & CEO

Well, certainly the fiber or wireless backhaul opportunity is much more broad than the FiOS opportunity, because if you think about it, that, from a geographical perspective, just covered a subset of all the states, whereas without a doubt there will be fiber backhaul, wireless backhaul opportunities in every state in the country. We're working everywhere from Maine to southern California and Tampa to Denver and the Northwest. So it's a much broader opportunity, means it's more diverse and distributed, John, so there will be more sales. It won't be as concentrated as Verizon is, but it's certainly a growth opportunity.

John Rogers - D.A. Davidson - Analyst

But are the miles -- I think about running fiber down the street versus connecting to a cell tower. I don't know how to think about it, but the labor units or the miles of -- .

Steve Nielsen - Dycom Industries - President & CEO

There two are ways to think about it. One are the existing macro cells, so the big towers, and that varies based on where they're located. Obviously, if you think about it in a rural or parallel to an interstate environment, then there can be quite a bit of fiber that needs to be deployed. In an urban environment, the length may not be all that long, but certainly the cost and complexity can be much higher. I think the other thing that we've talked about in prior calls in terms of a second driver, is we are seeing opportunities around distributed antenna systems, which are small micro cells that are linked together with fiber. And those jobs are in a metropolitan area may be measured in the dozens or tens of miles just in a single area, just based on the nature that the cells are much smaller and have to all be linked together. So it's much more distributed, diverse, the geographic opportunity is certainly much larger. And while it would be hard to argue that it's going to replace, in aggregate, something like a Verizon FTTP program, I think what we're seeing, John, in this cycle is a dispersion of the opportunity as we have more things going on from more customers.

John Rogers - D.A. Davidson - Analyst

Okay. And is it -- would it also be fair to assume that there's fewer potential competitors?

Steve Nielsen - Dycom Industries - President & CEO

Well there's certainly -- .

John Rogers - D.A. Davidson - Analyst

Or at least more consolidated competitors?

Steve Nielsen - Dycom Industries - President & CEO

I think there are tough economic times, there is always capacity that comes out of the market. It can come back in, to some degree. I think probably the broader driver is that the focus of a number of the both public and private competitors has generally been on energy. And we have stuck to our knitting and I think that also can be helpful to us.

John Rogers - D.A. Davidson - Analyst

Okay, thanks. I appreciate the thought.

Steve Nielsen - Dycom Industries - President & CEO

Thanks, John.

Operator

Our next question comes from the line of Simon Leopold from Morgan Keegan. Go ahead, please.

Simon Leopold - Morgan Keegan - Analyst

Thank you. Let me get a couple of housekeeping questions out of the way first. If could you just give us the percentage split between the telco and cable customers in the telecom segment?

Drew DeFerrari - Dycom Industries - CFO

Sure thing, Simon. The telco was 47.1% and cable was 32.7%.

Simon Leopold - Morgan Keegan - Analyst

Great. And round out the top customer list, if you could, the six through ten.

Drew DeFerrari - Dycom Industries - CFO

Sure thing. Charter was at 6.7%, Windstream 3.3%, Cablevision 1.9%, Electric Power Board of Chattanooga, which Steve had referred to, 1.5% and Western Carolina Rural Telephone at 1.2%.

Simon Leopold - Morgan Keegan - Analyst

Great, thanks. And also, just wanted to talk about the impact of this extra week. I'm kind of rough numbers assuming fair linearity in the quarter and would imagine it's a 1% to maybe 2% sequential contribution. Is that the right kind of way to think about it?

Steve Nielsen - Dycom Industries - President & CEO

Simon, it's our calendar and we're not supposed to parse out weeks. I would start with 1 divided by 13 and go from there, right.

Simon Leopold - Morgan Keegan - Analyst

Yes. So roughly in that neighborhood.

Steve Nielsen - Dycom Industries - President & CEO

To the extent we can comment, yes.

Simon Leopold - Morgan Keegan - Analyst

Sure. Okay. And then just moving on to more, I think, bigger picture issues. There are a number of, I guess, mergers, transactions going on among carriers. I'm thinking specifically of Verizon's transaction moving lines to Frontier, the CenturyLink-Qwest pending merger. In general, how do these activities impact your business, both from a short-term perspective, meaning in the quarter before, quarter after a deal closes, and longer term perspectives what do you expect it does to your business?

Steve Nielsen - Dycom Industries - President & CEO

In the short-term, Simon, we do not have a significant presence with Frontier, although we do work for them in, primarily in West Virginia and a number of other smaller states. And so we don't expect any kind of pre-closing behavior to be significant. As well as with CenturyLink in terms of their behavior pending Qwest, we don't see much change there and our exposure to Qwest is there, but it's not significant. Now, in the intermediate term, I think what both of them point to is that we are creating scale carriers, that have not spent significant dollars in technology upgrades, merging with companies that or geographies of carriers where there may be some pent-up capital demand. And so one of the things that we saw, for example, is in the West Virginia approval of the Frontier merger there were commitments made by Frontier to the State of West Virginia for increased cap-ex over a pretty significant period of time and some real money. I think the other thing that we're seeing, particularly with CenturyLink, is that they have had, in their view, some pretty good success with their IPTV initiatives that they've rolled them out to the former Embarq territory. Certainly we have seen some opportunity there and I think they will take that to Qwest, and I think that will create some opportunities there. And then I think lastly in both instances, while we have good relationships with both sides of both opportunities, I think we have good strong relationships with the folks that will be the successor Company, and so we look forward to them working through those processes and some new opportunities.

Simon Leopold - Morgan Keegan - Analyst

And is some of the weakness in Verizon not just FiOS but perhaps under investing in the lines that they're divesting?

Steve Nielsen - Dycom Industries - President & CEO

We don't have a whole lot of exposure to that portion of Verizon that they're divesting. Somewhat, but it's not significant, Simon. And so I don't know that we can comment on that. And I'm not sure that what we're seeing is a weakness in FiOS. I think they've been very clear with their plan and they are just executing on the plan.

Simon Leopold - Morgan Keegan - Analyst

Okay. And then just one last one. You had mentioned broadband stimulus contributing more in the second half of the year. Are you able to call out what the contribution was, if any, in the April quarter?

Steve Nielsen - Dycom Industries - President & CEO

Well, I think there are two things, Simon. It was not significant, although it is of note that our 9th and 10th largest customers were both either stimulus related or rural broadband fiber deployments. And I think that that will continue.

Simon Leopold - Morgan Keegan - Analyst

Great, thank you very much.

Operator

Thank you. Our next call comes from the line of Michael Funk from Bank of America. Go ahead, please.

Michael Funk - Bank of America - Analyst

Hi, good morning, guys. Thank you for taking the questions. I just have two or three, if you have time, please.

Steve Nielsen - Dycom Industries - President & CEO

Yes, go ahead, Michael.

Michael Funk - Bank of America - Analyst

First, thinking about opportunities for you. Verizon highlighted during their recent conference call more flexibility in reducing headcount up in the Northeast among union members. I'm wondering how you view that opportunity as far as bringing on more Verizon business in the Northeast as they look to reduce their union headcount and others do the same. Second, on CenturyLink, I think they're rolling out IPTV to an additional five markets after several years of not pursuing that strategy. Hoping to get a sense of how far along that build is right now just so we can model out the CenturyLink revenue. And then I think you called out the Electric Power Board of Chattanooga, if that was right, as 5.0% of revenue during the quarter and just thinking about that, is that a one-timer or is that going to be recurring for several quarters with relation to the stimulus spending? How should we think about that revenue stream and even the West Carolina as well?

Steve Nielsen - Dycom Industries - President & CEO

Okay, so starting with Verizon. I think, Michael, we're not going to comment any kind of specific arrangements between our clients and their represented employees other than to say that we have seen downsizings in the industry before and that over periods of time that may create opportunities for us to supplement their services. But in this particular case, it's just hard to comment on that other than to say it's generally supportive as a development of an overall trend towards outsourcing. In terms of Centurylink, I'm not sure that I would accept the premise. CenturyTel prior to the merger with Embarq had IPTV trials going in two markets. They said that they were satisfied. And I think really the nature of their comment was, is that they're -- as they're looking at successful integration over the first year post merger, that they're expanding in new markets, and we're really just at the beginning of that initiative.

I mean, we're seeing some central office activity, some engineering, a little bit of construction and splicing activity, but I think we're really just at the origination of that particular program, which I think goes to an earlier question about some potential FiOS backfilling opportunities. And then with the Power Board, it was 1.5%, Michael, in the quarter and I think what's going to be important to keep in mind that has been an ongoing project. It will continue for a number of quarters. But these rural fiber or stimulus related plans are going to be much more diverse and distributed. So in aggregate, we think there's a good opportunity for them to be meaningful, but customers are going kind of rotate in and out of that particular category of work and so any particular customer is not going to be as important as the overall trend.

Michael Funk - Bank of America - Analyst

And just so I understand it, your comments on CenturyLink, you expect them to continue to push beyond those markets as they integrate Embarq further, as they integrate Qwest, your expectation is more of an AT&T, maybe even a Verizon type of build pattern, or --

Steve Nielsen - Dycom Industries - President & CEO

I don't want to speak farther than they have, but at least as I understand as when they talked about the merger, particularly with respect to Qwest, Qwest had been pursuing a fiber deep strategy that they seem to indicate would be conducive to expansion to IPTV type services. I think, like anything else, it's all going to be based on success and so we will hope and we will do our very best to help them be successful in those five markets and go farther. I think with respect to AT&T's comments, they've generally, over the course of the U-verse deployment, seem to have been open to expanding the footprint and certainly we've seen that in our business even as recently as this quarter with just a couple of three new markets where they are putting increased focus on U-verse deployments. So as long as it's successful, I see no reason why it wouldn't continue to expand.

Michael Funk - Bank of America - Analyst

Okay, thank you very much for taking the questions.

Steve Nielsen - Dycom Industries - President & CEO

Thank you.

Operator

Our next question comes from the line of Synon Carmen, Neuberger Berman. Go ahead, please

Synon Carmen - Neuberger Berman - Analyst

Good morning, just a quick question on your revolver availability. I was looking at slide eight. So if I'm not mistaken, it's a $210.0 million facility with $44.0 million of letter of credit outstanding. I would have thought the availability would be closer to $166.0 million. Can you explain where I'm off there?

Drew DeFerrari - Dycom Industries - CFO

Sure. It's based on a trailing EBITDA calculation as well. So there would be limitations around that based on the trailing four quarters.

Synon Carmen - Neuberger Berman - Analyst

Okay, fair enough, thank you.

Drew DeFerrari - Dycom Industries - CFO

Thank you.

Operator

(Operator Instructions).

We have a question from the line of Alan Mitrani, Sylvan Lake. Go ahead, please

Alan Mitrani - Sylvan Lake - Analyst

Thank you. Could you just clarify on your cap-ex you said it's going to be up sequentially. Could you just give us a sense of what your gross cap-ex and net cap-ex you're looking for, for the year?

Steve Nielsen - Dycom Industries - President & CEO

Yes, we had talked about on the last quarter call, Alan, $40.0 million to $50.0 million. We think we'll be towards the top end of the range.

Drew DeFerrari - Dycom Industries - CFO

On a net basis.

Steve Nielsen - Dycom Industries - President & CEO

On a net basis.

Synon Carmen - Neuberger Berman - Analyst

And that's being driven by new, increased work opportunities?

Steve Nielsen - Dycom Industries - President & CEO

Yes, we're seeing new work opportunities. We're also -- we have an opportunity before our model year change out to upgrade a particular type of truck in our fleet and we're going to do that to save some money over the intermediate term. But, yes, both some new contracts, because we did start some things so we're taking in some assets for that, and also being proactive on the equipment replacement cycle.

Alan Mitrani - Sylvan Lake - Analyst

Okay. And then your shares outstanding according to press release were 39.054. What were they at the end of the quarter? What was it at the end of the quarter?

Drew DeFerrari - Dycom Industries - CFO

Alan, it was just over 38.6.

Alan Mitrani - Sylvan Lake - Analyst

38.6, okay, so you bought most of that towards the end of the quarter, it seems. Great. And do you expect to be active in the stock repurchase program? It seems as if -- obviously your stock has come down a lot. Maybe just talk a bit about what capital allocation is coming out of this recession.

Steve Nielsen - Dycom Industries - President & CEO

We've just talk about cap-ex, right. So as growth returns, you are going to spend some money for capital assets. We will consume some, particularly seasonally, for working capital. That's a good thing. And we'll balance the opportunities on our shares versus what we see for external M&A opportunities, as we have talked about before, as we see the economy recovering and end market demand becoming both more distributed and increasing. There may be, very well may be some acquisition opportunities and we'll balance that as a use of capital also.

Alan Mitrani - Sylvan Lake - Analyst

Great. And lastly, it seems as if this quarter the sale of assets was a lot higher than I had thought. It seems like it was your highest number in a long time. Do you expect a similar sale of assets next quarter? I don't remember when your other income adding up had been positive. It's been at least four years.

Steve Nielsen - Dycom Industries - President & CEO

Yes, I think there are a couple things. No, we don't, Alan. And secondly, not only -- we have a normal cycle where we tried to dispose in the spring, because that brings good prices. We were surprised positively by the prices that the used assets brought. Now that is consistent with what we've seen in other economic recoveries that the market gets tight for assets as some of the smaller contractors start to look for growth capital and generally go to auctions. And so I think prices were up and we took advantage of that.

Alan Mitrani - Sylvan Lake - Analyst

Okay, thank you.

Operator

Okay, we have a follow-up question from the line of Alex Rygiel. Go ahead, please.

Alex Rygiel - FBR Capital Markets - Analyst

Steve, when do you think we might see some organic growth develop in backlog?

Steve Nielsen - Dycom Industries - President & CEO

Well, as you know, with our backlog, based on the way some of the contracts are annual contracts that it somewhat difficult to forecast it that way. I think the trend line on the revenue, which is probably a more direct indicator, is certainly headed in the right direction if you extrapolate the fourth quarter.

Alex Rygiel - FBR Capital Markets - Analyst

Great, thank you.

Operator

Okay, we have no further questions in queue. If you would like to continue, Mr. Nielsen.

Steve Nielsen - Dycom Industries - President & CEO

Well, we thank everybody for your time and attention and we'll speak to you again at the end of August on our next quarterly results. Thank you.

Operator

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and for using AT&T Executive TeleConferencing Service. You may now disconnect.