EX-99.1 2 q2ex991.htm EXHIBIT 99.1 Q2 EX 99.1

Exhibit 99.1


NEWS RELEASE


FOR IMMEDIATE RELEASE
Contact:
Steven E. Nielsen, President and CEO
 
H. Andrew DeFerrari, Senior Vice President and CFO
 
(561) 627-7171

February 25, 2014

DYCOM INDUSTRIES, INC. ANNOUNCES FISCAL 2014 SECOND QUARTER RESULTS AND
PROVIDES GUIDANCE FOR THE NEXT FISCAL QUARTER

Palm Beach Gardens, Florida, February 25, 2014 - Dycom Industries, Inc. (NYSE: DY) announced today its results for the second quarter ended January 25, 2014.

The Company reported:

•
Contract revenues of $390.5 million for the quarter ended January 25, 2014, compared to $369.3 million for the quarter ended January 26, 2013. Contract revenues for the quarter ended January 25, 2014 grew 0.9% on an organic basis after excluding revenues from businesses acquired during fiscal 2013 from the three month periods ended January 25, 2014 and January 26, 2013 and $16.7 million of revenues for storm restoration services in the three months ended January 26, 2013. Revenues from businesses acquired during fiscal 2013 were $111.5 million and $75.9 million for the three months ended January 25, 2014 and January 26, 2013, respectively.

•
Adjusted EBITDA (Non-GAAP) of $28.2 million for the three months ended January 25, 2014, compared to $37.2 million for the three months ended January 26, 2013.
 
•
Net loss of $3.1 million, or $0.09 loss per common share, for the quarter ended January 25, 2014, compared to net income of $1.5 million, or $0.04 per common share diluted, for the quarter ended January 26, 2013. On a Non-GAAP basis, net income for the quarter ended January 26, 2013 was $5.2 million, or $0.15 per common share diluted. The Non-GAAP net income for the quarter ended January 26, 2013 excludes $5.8 million in pre-tax acquisition related costs and a pre-tax write-off of $0.3 million of deferred financing costs in connection with the replacement of the Company’s credit facility in December 2012.

Worse than expected weather during the latter part of the second fiscal quarter of 2014 sharply impacted the Company’s results. Major snowfalls and extremely cold temperatures reduced the number of available workdays and negatively impacted productivity and margins.

The Company also reported:

•
Contract revenues of $903.2 million for the six months ended January 25, 2014, compared to $692.6 million for the six months ended January 26, 2013. Contract revenues for the six months ended January 25, 2014 grew 5.8% on an organic basis after excluding revenues from businesses acquired during fiscal 2013 from the six month periods ended January 25, 2014 and January 26, 2013 and $16.7 million of revenues for storm restoration services in the six months ended January 26, 2013. Revenues from businesses acquired during fiscal 2013 were $268.6 million and $75.9 million for the six months ended January 25, 2014 and January 26, 2013, respectively.




•
Adjusted EBITDA (Non-GAAP) of $91.4 million for the six months ended January 25, 2014, compared to $77.6 million for the six months ended January 26, 2013.

•
Net income of $15.6 million, or $0.45 per common share diluted, for the six months ended January 25, 2014, compared to $13.3 million, or $0.40 per common share diluted, for the six months ended January 26, 2013. On a Non-GAAP basis, net income for the six months ended January 26, 2013 was $17.5 million, or $0.52 per common share diluted. The Non-GAAP net income for the six months ended January 26, 2013 excludes $6.5 million in pre-tax acquisition related costs and a pre-tax write-off of $0.3 million of deferred financing costs in connection with the replacement of the Company’s credit facility in December 2012.

The Company also announced its outlook for the third quarter of fiscal 2014. The Company currently expects revenue for the third quarter of fiscal 2014 to range from $415.0 million to $435.0 million and diluted earnings per share to range from $0.19 to $0.26.

The Company has defined Adjusted EBITDA (Non-GAAP) as earnings before interest, taxes, depreciation and amortization, gain on sale of fixed assets, acquisition related costs, write-off of deferred financing costs, stock-based compensation expense, and certain non-recurring items. See the accompanying tables which present a reconciliation of GAAP to Non-GAAP financial information.
A conference call to review the Company’s results will be hosted at 9:00 a.m. (ET), Wednesday, February 26, 2014; call (800) 230-1074 (United States) or (612) 288-0340 (International) ten minutes before the conference call begins and ask for the “Dycom Results” conference call. A live webcast of the conference call, along with related materials, will be available at http://www.dycomind.com under the heading “Events.” The conference call materials will be available at approximately 7:00 a.m. (ET) on February 26, 2014. If you are unable to attend the conference call at the scheduled time, a replay of the live webcast and the conference call materials will be available at http://www.dycomind.com until Friday, March 28, 2014.
For additional detail on selected financial information including organic revenue, customer metrics, and certain other selected financial data and Non-GAAP measures, please refer to the Trend Schedule on Dycom’s website at http://www.dycomind.com in the Investor Center. The Trend Schedule will be available at approximately 7:00 a.m. (ET) on February 26, 2014.

Dycom is a leading provider of specialty contracting services throughout the United States and in Canada. 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.

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). The Company believes that the presentation of certain Non-GAAP financial measures in this press release provides information that is 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 period. The Company cautions that Non-GAAP financial measures should be considered in addition to, but not as a substitute for, the Company’s reported GAAP results.

Fiscal 2014 second quarter results are preliminary and are unaudited. This press release contains 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. The most significant of these risks and uncertainties are described in our Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports) and include business and economic conditions and trends 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, preliminary purchase price allocations of businesses acquired, expected benefits and synergies of acquisitions, the future impact of any acquisitions or dispositions, the anticipated outcome of other contingent events, including litigation, liquidity and other financial needs, the availability of financing, and the other risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission. The Company does not undertake to update forward-looking statements.

---Tables Follow---




DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
January 25, 2014 and July 27, 2013
Unaudited
 
 
January 25, 2014
 
July 27, 2013
 
 
(Dollars in thousands)
ASSETS
 
 
 
 
CURRENT ASSETS:
 
 
 
 
Cash and equivalents
 
$
16,344

 
$
18,607

Accounts receivable, net
 
231,619

 
252,202

Costs and estimated earnings in excess of billings
 
174,138

 
204,349

Inventories
 
43,426

 
35,999

Deferred tax assets, net
 
16,334

 
16,853

Income taxes receivable
 
18,347

 
2,516

Other current assets
 
16,142

 
10,608

Total current assets
 
516,350

 
541,134

 
 
 
 
 
PROPERTY AND EQUIPMENT, NET
 
203,639

 
202,703

GOODWILL
 
267,810

 
267,810

INTANGIBLE ASSETS, NET
 
115,243

 
125,275

OTHER
 
16,852

 
17,286

TOTAL NON-CURRENT ASSETS
 
603,544

 
613,074

TOTAL ASSETS
 
$
1,119,894

 
$
1,154,208

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
CURRENT LIABILITIES:
 
 
 
 
Accounts payable
 
$
52,315

 
$
77,954

Current portion of debt
 
9,375

 
7,813

Billings in excess of costs and estimated earnings
 
13,869

 
13,788

Accrued insurance claims
 
32,638

 
29,069

Other accrued liabilities
 
57,566

 
71,191

Total current liabilities
 
165,763

 
199,815

 
 
 
 
 
LONG-TERM DEBT
 
416,301

 
444,169

ACCRUED INSURANCE CLAIMS
 
30,942

 
27,250

DEFERRED TAX LIABILITIES, NET NON-CURRENT
 
49,003

 
48,612

OTHER LIABILITIES
 
6,249

 
6,001

Total liabilities
 
668,258

 
725,847

 
 
 
 
 
Total Stockholders' Equity
 
451,636

 
428,361

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 
$
1,119,894

 
$
1,154,208







DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Three Months Ended
 
Six Months Ended
 
Six Months Ended
 
 
January 25, 2014
 
January 26, 2013
 
January 25, 2014
 
January 26, 2013
 
 
(Dollars in thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
Contract revenues
 
$
390,518

 
$
369,326

 
$
903,238

 
$
692,613

 
 
 
 
 
 
 
 
 
Costs of earned revenues, excluding depreciation and amortization
 
327,353

 
301,516

 
737,472

 
558,582

General and administrative expenses (1)
 
38,562

 
38,827

 
81,637

 
67,652

Depreciation and amortization
 
23,435

 
20,819

 
46,987

 
36,130

Total
 
389,350

 
361,162

 
866,096

 
662,364

 
 
 
 
 
 
 
 
 
Interest expense, net
 
(6,800
)
 
(5,748
)
 
(13,686
)
 
(9,946
)
Other income, net
 
595

 
428

 
2,607

 
2,042

 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
 
(5,037
)
 
2,844

 
26,063

 
22,345

 
 
 
 
 
 
 
 
 
Provision (benefit) for income taxes
 
(1,970
)
 
1,381

 
10,470

 
9,022

 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
(3,067
)
 
$
1,463

 
$
15,593

 
$
13,323

 
 
 
 
 
 
 
 
 
Earnings (loss) per common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings (loss) per common share
 
$
(0.09
)
 
$
0.04

 
$
0.46

 
$
0.40

 
 
 
 
 
 
 
 
 
Diluted earnings (loss) per common share
 
$
(0.09
)
 
$
0.04

 
$
0.45

 
$
0.40

 
 
 
 
 
 
 
 
 
Shares used in computing earnings (loss) per common share:
 
 
 
 
 
 
 
 
   Basic
 
33,836,099

 
32,780,667

 
33,629,884

 
32,935,305

 
 
 
 
 
 
 
 
 
   Diluted
 
33,836,099

 
33,514,416

 
34,767,945

 
33,607,180

 
 
 
 
 
 
 
 
 
(1) Includes stock-based compensation expense of $3.5 million and $2.5 million for the three months ended January 25, 2014 and January 26, 2013, respectively, and $7.0 million and $4.8 million for the six months ended January 25, 2014 and January 26, 2013, respectively.




DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP INFORMATION
Unaudited
 
 
 
 
 
 
 
 
 
 
 
 
 
The below table presents the reconciliation of GAAP contract revenues to Non-GAAP contract revenues adjusted to exclude revenues from subsidiaries acquired during fiscal 2013 and storm restoration service revenues generated during the prior year periods, as well as the percentages of growth of GAAP and Non-GAAP contract revenues.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contract Revenues - GAAP
 
Revenues from subsidiaries acquired in fiscal 2013
 
Revenues from storm restoration services
 
Contract Revenues - Non-GAAP
 
%
Growth - GAAP
 
%
Growth - Non-GAAP
 
 
(Dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended January 25, 2014
 
$
390,518

 
$
(111,500
)
 
$
—

 
$
279,018

 
5.7
%
 
0.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended January 26, 2013
 
$
369,326

 
$
(75,946
)
 
$
(16,721
)
 
$
276,659

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended January 25, 2014
 
$
903,238

 
$
(268,577
)
 
$
—

 
$
634,661

 
30.4
%
 
5.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended January 26, 2013
 
$
692,613

 
$
(75,946
)
 
$
(16,721
)
 
$
599,946

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP INFORMATION
Unaudited
(continued)
 
 
 
 
 
 
 
 
 
 
The below table presents the Non-GAAP financial measure of Adjusted EBITDA for the three and six months ended January 25, 2014 and January 26, 2013 and a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP measure.
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Three Months Ended
 
Six Months Ended
 
Six Months Ended
 
 
 
January 25, 2014
 
January 26, 2013
 
January 25, 2014
 
January 26, 2013
 
 
 
(Dollars in thousands)
Reconciliation of net income (loss) to Adjusted EBITDA (Non-GAAP):
 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
(3,067
)
 
$
1,463

 
$
15,593

 
$
13,323

 
Interest expense, net
 
6,800

 
5,748

 
13,686

 
9,946

 
Provision (benefit) for income taxes
 
(1,970
)
 
1,381

 
10,470

 
9,022

 
Depreciation and amortization expense
 
23,435

 
20,819

 
46,987

 
36,130

 
Earnings Before Interest, Taxes, Depreciation & Amortization ("EBITDA")
 
25,198

 
29,411

 
86,736

 
68,421

 
Gain on sale of fixed assets
 
(570
)
 
(826
)
 
(2,435
)
 
(2,407
)
 
Stock-based compensation expense
 
3,544

 
2,496

 
7,049

 
4,762

 
Acquisition related costs
 
—

 
5,829

 
—

 
6,539

 
Write-off of deferred financing costs
 
—

 
321

 
—

 
321

 
Adjusted EBITDA (Non-GAAP)
 
$
28,172

 
$
37,231

 
$
91,350

 
$
77,636





DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP INFORMATION
Unaudited
(continued)
 
 
 
 
 
 
The below table presents a reconciliation of GAAP to Non-GAAP net income for the three and six months ended January 26, 2013.
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
January 26, 2013
 
January 26, 2013
 
 
 
(Dollars in thousands, except per share amounts)
 
 
 
 
 
 
Reconciling Items:
 
 
 
 
 
Acquisition related costs, pre-tax
 
$
(5,829
)
 
$
(6,539
)
 
Write-off of deferred financing costs
 
(321
)
 
(321
)
Total Reconciling Items
 
$
(6,150
)
 
$
(6,860
)
 
 
 
 
 
GAAP net income
 
$
1,463

 
$
13,323

Adjustment for Reconciling Items above, net of tax
 
3,710

 
4,154

Non-GAAP net income
 
$
5,173

 
$
17,477

 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
 
 
 
Basic earnings per common share - GAAP
 
$
0.04

 
$
0.40

Adjustment for Reconciling Items above, net of tax
 
0.11

 
0.13

Basic earnings per common share - Non-GAAP
 
$
0.16

 
$
0.53

 
 
 
 
 
 
Diluted earnings per common share - GAAP
 
$
0.40

 
$
0.40

Adjustment for Reconciling Items above, net of tax
 
0.11

 
0.12

Diluted earnings per common share - Non-GAAP
 
$
0.15

 
$
0.52

 
 
 
 
 
 
Earnings per share amounts may not add due to rounding.
 
 
 
 
 
 
 
 
 
 
Shares used in computing GAAP and Non-GAAP earnings per common share and adjustment for Reconciling Items above:
 
 
 
 
 
 
 
 
 
 
   Basic
 
32,780,667

 
32,935,305

 
 
 
 
 
 
   Diluted
 
33,514,416

 
33,607,180