EX-99.1 2 q3-14ex991.htm EXHIBIT 99.1 Q3-14 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

May 20, 2014

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

Palm Beach Gardens, Florida, May 20, 2014 - Dycom Industries, Inc. (NYSE: DY) announced today its results for the third quarter ended April 26, 2014.

The Company reported:

•
Contract revenues of $426.3 million for the quarter ended April 26, 2014, compared to $437.4 million for the quarter ended April 27, 2013.

•
Adjusted EBITDA (Non-GAAP) of $39.6 million for the three months ended April 26, 2014, compared to $44.0 million for the three months ended April 27, 2013.
 
•
Net income of $7.9 million, or $0.23 per common share diluted, for the quarter ended April 26, 2014, compared to $7.2 million, or $0.21 per common share diluted, for the quarter ended April 27, 2013.

The Company also reported:

•
Contract revenues of $1.330 billion for the nine months ended April 26, 2014, compared to $1.130 billion for the nine months ended April 27, 2013. Contract revenues for the nine months ended April 26, 2014 grew 4.6% on an organic basis after excluding revenues from businesses acquired in fiscal 2013 in both periods and $16.7 million of revenues for storm restoration services in the nine months ended April 27, 2013. Total revenues from businesses acquired in fiscal 2013 were $373.2 million and $198.8 million for the nine months ended April 26, 2014 and April 27, 2013, respectively.

•
Adjusted EBITDA (Non-GAAP) of $130.9 million for the nine months ended April 26, 2014, compared to $121.7 million for the nine months ended April 27, 2013.

•
Net income of $23.5 million, or $0.68 per common share diluted, for the nine months ended April 26, 2014, compared to $20.5 million, or $0.61 per common share diluted, for the nine months ended April 27, 2013. On a Non-GAAP basis, net income for the nine months ended April 27, 2013 was $24.7 million, or $0.73 per common share diluted. The Non-GAAP net income for the nine months ended April 27, 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 fourth quarter of fiscal 2014. The Company currently expects revenue for the fourth quarter of fiscal 2014 to range from $475.0 million to $495.0 million and diluted earnings per share to range from $0.43 to $0.50.




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, May 21, 2014; call (800) 288-8975 (United States) or (612) 332-0335 (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 May 21, 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, June 20, 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 May 21, 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 third 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
April 26, 2014 and July 27, 2013
Unaudited
 
April 26, 2014
 
July 27, 2013
 
(Dollars in thousands)
ASSETS
 
 
 
CURRENT ASSETS:
 
 
 
Cash and equivalents
$
18,722

 
$
18,607

Accounts receivable, net
233,276

 
252,202

Costs and estimated earnings in excess of billings
198,581

 
204,349

Inventories
42,512

 
35,999

Deferred tax assets, net
17,156

 
16,853

Income taxes receivable
12,287

 
2,516

Other current assets
18,656

 
10,608

Total current assets
541,190

 
541,134

 
 
 
 
PROPERTY AND EQUIPMENT, NET
205,703

 
202,703

GOODWILL
267,810

 
267,810

INTANGIBLE ASSETS, NET
111,819

 
125,275

OTHER
16,254

 
17,286

TOTAL NON-CURRENT ASSETS
601,586

 
613,074

TOTAL ASSETS
$
1,142,776

 
$
1,154,208

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
CURRENT LIABILITIES:
 
 
 
Accounts payable
$
62,985

 
$
77,954

Current portion of debt
10,156

 
7,813

Billings in excess of costs and estimated earnings
13,401

 
13,788

Accrued insurance claims
32,567

 
29,069

Other accrued liabilities
69,758

 
71,191

Total current liabilities
188,867

 
199,815

 
 
 
 
LONG-TERM DEBT
403,082

 
444,169

ACCRUED INSURANCE CLAIMS
32,027

 
27,250

DEFERRED TAX LIABILITIES, NET NON-CURRENT
47,915

 
48,612

OTHER LIABILITIES
5,960

 
6,001

Total liabilities
677,851

 
725,847

 
 
 
 
Total Stockholders' Equity
464,925

 
428,361

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
1,142,776

 
$
1,154,208






DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Three Months Ended
 
Nine Months Ended
 
Nine Months Ended
 
 
April 26, 2014
 
April 27, 2013
 
April 26, 2014
 
April 27, 2013
 
 
(Dollars in thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
Contract revenues
 
$
426,284

 
$
437,367

 
$
1,329,522

 
$
1,129,980

 
 
 
 
 
 
 
 
 
Costs of earned revenues, excluding depreciation and amortization
 
350,352

 
357,664

 
1,087,824

 
916,247

General and administrative expenses (1)
 
39,162

 
38,205

 
120,799

 
105,857

Depreciation and amortization
 
22,726

 
24,531

 
69,713

 
60,660

Total
 
412,240

 
420,400

 
1,278,336

 
1,082,764

 
 
 
 
 
 
 
 
 
Interest expense, net
 
(6,563
)
 
(6,637
)
 
(20,249
)
 
(16,582
)
Other income, net
 
5,593

 
1,477

 
8,200

 
3,519

 
 
 
 
 
 
 
 
 
Income before income taxes
 
13,074

 
11,807

 
39,137

 
34,153

 
 
 
 
 
 
 
 
 
Provision for income taxes
 
5,179

 
4,608

 
15,649

 
13,631

 
 
 
 
 
 
 
 
 
Net income
 
$
7,895

 
$
7,199

 
$
23,488

 
$
20,522

 
 
 
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per common share
 
$
0.23

 
$
0.22

 
$
0.70

 
$
0.62

 
 
 
 
 
 
 
 
 
Diluted earnings per common share
 
$
0.23

 
$
0.21

 
$
0.68

 
$
0.61

 
 
 
 
 
 
 
 
 
Shares used in computing income per common share:
 
 
 
 
 
 
 
 
   Basic
 
33,860,832

 
33,033,740

 
33,707,957

 
32,968,897

 
 
 
 
 
 
 
 
 
   Diluted
 
34,763,035

 
33,842,150

 
34,767,400

 
33,684,974

 
 
 
 
 
 
 
 
 
(1) Includes stock-based compensation expense of $2.7 million and $2.5 million for the three months ended April 26, 2014 and April 27, 2013, respectively, and $9.7 million and $7.3 million for the nine months ended April 26, 2014 and April 27, 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 and the percentages of growth (decline) of GAAP and Non-GAAP contract revenues.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contract Revenues - GAAP
 
Revenues from businesses acquired (1)
 
Revenues from storm restoration services (1)
 
Contract Revenues - Non-GAAP (1)
 
%
Growth (decline) - GAAP
 
%
Growth (decline) - Non-GAAP
 
 
 
(Dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended April 26, 2014
 
$
426,284

 
$
(5,545
)
 
$
—

 
$
420,739

 
(2.5
)%
 
(3.8
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended April 27, 2013
 
$
437,367

 
$
—

 
$
—

 
$
437,367

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended April 26, 2014
 
$
1,329,522

 
$
(373,223
)
 
$
—

 
$
956,299

 
17.7
 %
 
4.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended April 27, 2013
 
$
1,129,980

 
$
(198,844
)
 
$
(16,721
)
 
$
914,415

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) For the three months ended April 26, 2014, the Non-GAAP decline % is adjusted for revenues from businesses acquired during the fourth quarter of fiscal 2013. For the nine months ended April 26, 2014, the Non-GAAP growth % is adjusted for revenues from businesses acquired during fiscal 2013, as the revenues were not included in both the current year and prior year full period, and storm restoration service revenues, if any.
 
 
 





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 nine months ended April 26, 2014 and April 27, 2013 and a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure.
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Three Months Ended
 
Nine Months Ended
 
Nine Months Ended
 
 
 
April 26, 2014
 
April 27, 2013
 
April 26, 2014
 
April 27, 2013
 
 
 
(Dollars in thousands)
Reconciliation of net income to Adjusted EBITDA (Non-GAAP):
 
 
 
 
 
 
 
 
 
Net income
 
$
7,895

 
$
7,199

 
$
23,488

 
$
20,522

 
Interest expense, net
 
6,563

 
6,637

 
20,249

 
16,582

 
Provision for income taxes
 
5,179

 
4,608

 
15,649

 
13,631

 
Depreciation and amortization expense
 
22,726

 
24,531

 
69,713

 
60,660

 
Earnings Before Interest, Taxes, Depreciation & Amortization ("EBITDA")
 
42,363

 
42,975

 
129,099

 
111,395

 
Gain on sale of fixed assets
 
(5,469
)
 
(1,459
)
 
(7,904
)
 
(3,867
)
 
Stock-based compensation expense
 
2,671

 
2,513

 
9,721

 
7,275

 
Acquisition related costs
 
—

 
—

 
—

 
6,539

 
Write-off of deferred financing costs
 
—

 
—

 
—

 
321

 
Adjusted EBITDA (Non-GAAP)
 
$
39,565

 
$
44,029

 
$
130,916

 
$
121,663





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 nine months ended April 27, 2013.
 
 
 
 
 
 
 
Nine Months Ended
 
 
 
April 27, 2013
 
 
 
(Dollars in thousands, except per share amounts)
 
 
 
 
Reconciling Items:
 
 
 
Acquisition related costs, pre-tax
 
$
(6,539
)
 
Write-off of deferred financing costs
 
(321
)
Total Reconciling Items
 
$
(6,860
)
 
 
 
GAAP net income
 
$
20,522

Adjustment for Reconciling Items above, net of tax
 
4,154

Non-GAAP net income
 
$
24,676

 
 
 
 
Earnings per common share:
 
 
 
 
 
 
Basic earnings per common share - GAAP
 
$
0.62

Adjustment for Reconciling Items above, net of tax
 
0.13

Basic earnings per common share - Non-GAAP
 
$
0.75

 
 
 
 
Diluted earnings per common share - GAAP
 
$
0.61

Adjustment for Reconciling Items above, net of tax
 
0.12

Diluted earnings per common share - Non-GAAP
 
$
0.73

 
 
 
 
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
 
32,968,897

 
 
 
 
   Diluted
 
33,684,974