x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 23, 2016 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ |
Florida | 59-1277135 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
11780 US Highway 1, Suite 600, Palm Beach Gardens, FL | 33408 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer x | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ |
Dycom Industries, Inc. Table of Contents | ||
PART I - FINANCIAL INFORMATION | ||
PART II - OTHER INFORMATION | ||
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||||
April 23, 2016 | July 25, 2015 | ||||||
(Dollars in thousands) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and equivalents | $ | 19,327 | $ | 21,289 | |||
Accounts receivable, net | 355,318 | 315,134 | |||||
Costs and estimated earnings in excess of billings | 358,236 | 274,730 | |||||
Inventories | 61,304 | 48,650 | |||||
Deferred tax assets, net | 20,581 | 20,630 | |||||
Income tax receivable | 15,288 | — | |||||
Other current assets | 18,730 | 16,199 | |||||
Total current assets | 848,784 | 696,632 | |||||
Property and equipment, net | 309,783 | 231,564 | |||||
Goodwill | 281,448 | 271,653 | |||||
Intangible assets, net | 124,892 | 120,926 | |||||
Other | 34,379 | 38,089 | |||||
Total non-current assets | 750,502 | 662,232 | |||||
Total assets | $ | 1,599,286 | $ | 1,358,864 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 92,964 | $ | 71,834 | |||
Current portion of debt | 9,375 | 3,750 | |||||
Billings in excess of costs and estimated earnings | 11,137 | 16,896 | |||||
Accrued insurance claims | 39,407 | 35,824 | |||||
Other accrued liabilities | 89,662 | 98,406 | |||||
Total current liabilities | 242,545 | 226,710 | |||||
Long-term debt | 723,952 | 521,841 | |||||
Accrued insurance claims | 51,318 | 51,476 | |||||
Deferred tax liabilities, net non-current | 75,590 | 47,388 | |||||
Other liabilities | 4,141 | 4,249 | |||||
Total liabilities | 1,097,546 | 851,664 | |||||
COMMITMENTS AND CONTINGENCIES, Note 17 | |||||||
Stockholders' equity: | |||||||
Preferred stock, par value $1.00 per share: 1,000,000 shares authorized: no shares issued and outstanding | — | — | |||||
Common stock, par value $0.33 1/3 per share: 150,000,000 shares authorized: 31,341,444 and 33,381,779 issued and outstanding, respectively | 10,447 | 11,127 | |||||
Additional paid-in capital | 3,880 | 71,004 | |||||
Accumulated other comprehensive loss | (1,107 | ) | (1,198 | ) | |||
Retained earnings | 488,520 | 426,267 | |||||
Total stockholders' equity | 501,740 | 507,200 | |||||
Total liabilities and stockholders' equity | $ | 1,599,286 | $ | 1,358,864 | |||
See notes to the condensed consolidated financial statements. |
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | |||||||
For the Three Months Ended | |||||||
April 23, 2016 | April 25, 2015 | ||||||
(Dollars in thousands, except share amounts) | |||||||
REVENUES: | |||||||
Contract revenues | $ | 664,645 | $ | 492,363 | |||
EXPENSES: | |||||||
Costs of earned revenues, excluding depreciation and amortization | 520,408 | 388,239 | |||||
General and administrative (including stock-based compensation expense of $3.9 million and $3.2 million, respectively) | 56,519 | 44,707 | |||||
Depreciation and amortization | 31,583 | 23,985 | |||||
Total | 608,510 | 456,931 | |||||
Interest expense, net | (8,007 | ) | (6,646 | ) | |||
Other income, net | 4,323 | 3,471 | |||||
Income before income taxes | 52,451 | 32,257 | |||||
Provision for income taxes: | |||||||
Current | 14,842 | 9,346 | |||||
Deferred | 4,526 | 2,653 | |||||
Total provision for income taxes | 19,368 | 11,999 | |||||
Net income | $ | 33,083 | $ | 20,258 | |||
Earnings per common share: | |||||||
Basic earnings per common share | $ | 1.02 | $ | 0.59 | |||
Diluted earnings per common share | $ | 1.00 | $ | 0.58 | |||
Shares used in computing earnings per common share: | |||||||
Basic | 32,433,560 | 34,107,262 | |||||
Diluted | 33,050,934 | 35,028,956 | |||||
See notes to the condensed consolidated financial statements. |
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | |||||||
For the Nine Months Ended | |||||||
April 23, 2016 | April 25, 2015 | ||||||
(Dollars in thousands, except share amounts) | |||||||
REVENUES: | |||||||
Contract revenues | $ | 1,883,383 | $ | 1,443,833 | |||
EXPENSES: | |||||||
Costs of earned revenues, excluding depreciation and amortization | 1,477,671 | 1,147,136 | |||||
General and administrative (including stock-based compensation expense of $12.6 million and $10.8 million, respectively) | 155,003 | 131,218 | |||||
Depreciation and amortization | 88,930 | 70,179 | |||||
Total | 1,721,604 | 1,348,533 | |||||
Interest expense, net | (25,010 | ) | (20,126 | ) | |||
Loss on debt extinguishment | (16,260 | ) | — | ||||
Other income, net | 6,866 | 7,001 | |||||
Income before income taxes | 127,375 | 82,175 | |||||
Provision for income taxes: | |||||||
Current | 20,026 | 27,654 | |||||
Deferred | 27,969 | 4,024 | |||||
Total provision for income taxes | 47,995 | 31,678 | |||||
Net income | $ | 79,380 | $ | 50,497 | |||
Earnings per common share: | |||||||
Basic earnings per common share | $ | 2.43 | $ | 1.48 | |||
Diluted earnings per common share | $ | 2.37 | $ | 1.44 | |||
Shares used in computing earnings per common share: | |||||||
Basic | 32,656,490 | 34,081,381 | |||||
Diluted | 33,486,515 | 35,091,644 | |||||
See notes to the condensed consolidated financial statements. |
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) | |||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
April 23, 2016 | April 25, 2015 | April 23, 2016 | April 25, 2015 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Net income | $ | 33,083 | $ | 20,258 | $ | 79,380 | $ | 50,497 | |||||||
Foreign currency translation gains (losses), net of tax | 447 | 38 | 91 | (688 | ) | ||||||||||
Comprehensive income | $ | 33,530 | $ | 20,296 | $ | 79,471 | $ | 49,809 | |||||||
See notes to the condensed consolidated financial statements. |
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||||||
For the Nine Months Ended | |||||||
April 23, 2016 | April 25, 2015 | ||||||
(Dollars in thousands) | |||||||
OPERATING ACTIVITIES: | |||||||
Net income | $ | 79,380 | $ | 50,497 | |||
Adjustments to reconcile net income to net cash provided by operating activities, net of acquisitions: | |||||||
Depreciation and amortization | 88,930 | 70,179 | |||||
Deferred income tax provision | 27,969 | 4,024 | |||||
Stock-based compensation | 12,600 | 10,773 | |||||
Bad debt expense, net | 1,005 | 308 | |||||
Gain on sale of fixed assets | (6,213 | ) | (6,249 | ) | |||
Write-off of deferred financing fees and premium on long-term debt | 2,017 | — | |||||
Amortization of debt discount | 10,119 | — | |||||
Amortization of debt issuance costs and other | 1,981 | 1,194 | |||||
Excess tax benefit from share-based awards | (11,384 | ) | (5,224 | ) | |||
Change in operating assets and liabilities: | |||||||
Accounts receivable, net | (29,667 | ) | 8,602 | ||||
Costs and estimated earnings in excess of billings, net | (77,180 | ) | (17,225 | ) | |||
Other current assets and inventory | (11,000 | ) | (2,041 | ) | |||
Other assets | (2,867 | ) | (7,511 | ) | |||
Income taxes receivable/payable | (10,622 | ) | (1,317 | ) | |||
Accounts payable | 6,827 | (1,224 | ) | ||||
Accrued liabilities, insurance claims, and other liabilities | (2,922 | ) | 18,798 | ||||
Net cash provided by operating activities | 78,973 | 123,584 | |||||
INVESTING ACTIVITIES: | |||||||
Cash paid for acquisitions, net of cash acquired | (48,804 | ) | (9,821 | ) | |||
Capital expenditures | (138,721 | ) | (76,825 | ) | |||
Proceeds from sale of assets | 6,432 | 6,764 | |||||
Changes in restricted cash | (479 | ) | (541 | ) | |||
Other investing activities | — | (4,000 | ) | ||||
Net cash used in investing activities | (181,572 | ) | (84,423 | ) | |||
FINANCING ACTIVITIES: | |||||||
Proceeds from borrowings on senior credit agreement, including term loan | 773,000 | 310,750 | |||||
Principal payments on senior credit agreement, including term loan | (654,250 | ) | (321,563 | ) | |||
Proceeds from issuance of 0.75% senior convertible notes due 2021 | 485,000 | — | |||||
Proceeds from sale of warrants | 74,690 | — | |||||
Purchase of convertible note hedge | (115,818 | ) | — | ||||
Principal payments for satisfaction and discharge of 7.125% senior subordinated notes | (277,500 | ) | — | ||||
Debt issuance costs | (15,542 | ) | (3,527 | ) | |||
Repurchases of common stock | (169,997 | ) | (30,687 | ) | |||
Exercise of stock options | 1,816 | 6,842 | |||||
Restricted stock tax withholdings | (12,146 | ) | (4,330 | ) | |||
Excess tax benefit from share-based awards | 11,384 | 5,224 | |||||
Net cash provided by (used in) financing activities | 100,637 | (37,291 | ) | ||||
Net (decrease) increase in cash and equivalents | (1,962 | ) | 1,870 | ||||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 21,289 | 20,672 | |||||
CASH AND EQUIVALENTS AT END OF PERIOD | $ | 19,327 | $ | 22,542 | |||
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Continued) (Unaudited) | |||||||
For the Nine Months Ended | |||||||
April 23, 2016 | April 25, 2015 | ||||||
(Dollars in thousands) | |||||||
SUPPLEMENTAL DISCLOSURE OF OTHER CASH FLOW ACTIVITIES AND NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||||||
Cash paid for interest | $ | 12,765 | $ | 14,241 | |||
Cash paid for taxes, net | $ | 31,205 | $ | 29,659 | |||
Purchases of capital assets included in accounts payable or other accrued liabilities at period end | $ | 7,120 | $ | 4,160 | |||
See notes to the condensed consolidated financial statements. |
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
April 23, 2016 | April 25, 2015 | April 23, 2016 | April 25, 2015 | ||||||||||||
(Dollars in thousands, except share amounts) | |||||||||||||||
Net income available to common stockholders (numerator) | $ | 33,083 | $ | 20,258 | $ | 79,380 | $ | 50,497 | |||||||
Weighted-average number of common shares (denominator) | 32,433,560 | 34,107,262 | 32,656,490 | 34,081,381 | |||||||||||
Basic earnings per common share | $ | 1.02 | $ | 0.59 | $ | 2.43 | $ | 1.48 | |||||||
Weighted-average number of common shares | 32,433,560 | 34,107,262 | 32,656,490 | 34,081,381 | |||||||||||
Potential shares of common stock arising from stock options, and unvested restricted share units | 617,374 | 921,694 | 830,025 | 1,010,263 | |||||||||||
Total shares-diluted (denominator) | 33,050,934 | 35,028,956 | 33,486,515 | 35,091,644 | |||||||||||
Diluted earnings per common share | $ | 1.00 | $ | 0.58 | $ | 2.37 | $ | 1.44 |
For the Three Months Ended | For the Nine Months Ended | ||||||||||
April 23, 2016 | April 25, 2015 | April 23, 2016 | April 25, 2015 | ||||||||
Stock-based awards | 116,544 | 158,113 | 79,792 | 159,484 | |||||||
0.75% senior convertible notes due 2021* | 5,005,734 | — | 5,005,734 | — | |||||||
Warrants* | 5,005,734 | — | 5,005,734 | — | |||||||
Total anti-dilutive weighted shares excluded from the calculation of earnings per common share | 10,128,012 | 158,113 | 10,091,260 | 159,484 |
Assets | |||
Accounts receivable | $ | 11.5 | |
Costs and estimated earnings in excess of billings | 11.8 | ||
Inventories and other current assets | 6.1 | ||
Property and equipment | 10.8 | ||
Goodwill | 9.7 | ||
Intangible assets - customer relationships | 16.2 | ||
Intangibles assets - trade names and non-compete | 1.8 | ||
Total assets | 67.9 | ||
Liabilities | |||
Accounts payable | 10.0 | ||
Accrued and other liabilities | 9.1 | ||
Total liabilities | 19.1 | ||
Net Assets Acquired | $ | 48.8 |
April 23, 2016 | July 25, 2015 | ||||||
(Dollars in thousands) | |||||||
Contract billings | $ | 327,106 | $ | 292,029 | |||
Retainage | 30,391 | 24,321 | |||||
Total | 357,497 | 316,350 | |||||
Less: allowance for doubtful accounts | (2,179 | ) | (1,216 | ) | |||
Accounts receivable, net | $ | 355,318 | $ | 315,134 |
April 23, 2016 | July 25, 2015 | ||||||
(Dollars in thousands) | |||||||
Costs incurred on contracts in progress | $ | 308,196 | $ | 240,077 | |||
Estimated to date earnings | 89,180 | 72,446 | |||||
Total costs and estimated earnings | 397,376 | 312,523 | |||||
Less: billings to date | (50,277 | ) | (54,689 | ) | |||
$ | 347,099 | $ | 257,834 | ||||
Included in the accompanying condensed consolidated balance sheets under the captions: | |||||||
Costs and estimated earnings in excess of billings | $ | 358,236 | $ | 274,730 | |||
Billings in excess of costs and estimated earnings | (11,137 | ) | (16,896 | ) | |||
$ | 347,099 | $ | 257,834 |
Estimated Useful Lives | April 23, 2016 | July 25, 2015 | |||||||
(Years) | (Dollars in thousands) | ||||||||
Land | — | $ | 3,475 | $ | 3,475 | ||||
Buildings | 10-35 | 11,979 | 11,944 | ||||||
Leasehold improvements | 1-10 | 13,164 | 8,491 | ||||||
Vehicles | 1-5 | 387,444 | 316,979 | ||||||
Computer hardware and software | 1-7 | 94,529 | 80,091 | ||||||
Office furniture and equipment | 1-7 | 10,051 | 8,183 | ||||||
Equipment and machinery | 1-10 | 230,548 | 194,943 | ||||||
Total | 751,190 | 624,106 | |||||||
Less: accumulated depreciation | (441,407 | ) | (392,542 | ) | |||||
Property and equipment, net | $ | 309,783 | $ | 231,564 |
Goodwill | Accumulated Impairment Losses | Total | |||||||||
(Dollars in thousands) | |||||||||||
Balance as of July 25, 2015 | $ | 467,420 | $ | (195,767 | ) | $ | 271,653 | ||||
Purchase price allocation adjustments | 101 | — | 101 | ||||||||
Goodwill from fiscal 2016 acquisitions | 9,694 | — | 9,694 | ||||||||
Balance as of April 25, 2016 | $ | 477,215 | $ | (195,767 | ) | $ | 281,448 |
Weighted Average Remaining Useful Lives | April 23, 2016 | July 25, 2015 | |||||||
(Years) | (Dollars in thousands) | ||||||||
Gross carrying amount: | |||||||||
Customer relationships | 11.4 | $ | 211,575 | $ | 195,375 | ||||
Contract backlog | 0.6 | 4,780 | 8,076 | ||||||
Trade names | 7.0 | 9,800 | 8,200 | ||||||
UtiliQuest trade name | — | 4,700 | 4,700 | ||||||
Non-compete agreements | 2.7 | 685 | 635 | ||||||
231,540 | 216,986 | ||||||||
Accumulated amortization: | |||||||||
Customer relationships | 96,133 | 83,772 | |||||||
Contract backlog | 4,569 | 7,381 | |||||||
Trade names | 5,673 | 4,650 | |||||||
Non-compete agreements | 273 | 257 | |||||||
106,648 | 96,060 | ||||||||
Net Intangible Assets | $ | 124,892 | $ | 120,926 |
Amount | ||||
(Dollars in thousands) | ||||
Three months ending July 30, 2016 | $ | 4,883 | ||
2017 | 17,419 | |||
2018 | 15,125 | |||
2019 | 12,771 | |||
2020 | 11,861 | |||
2021 | 10,333 | |||
Thereafter | 47,800 | |||
Total | $ | 120,192 |
April 23, 2016 | July 25, 2015 | ||||||
(Dollars in thousands) | |||||||
Accrued payroll and related taxes | $ | 20,090 | $ | 18,673 | |||
Accrued employee benefit and incentive plan costs | 28,855 | 29,528 | |||||
Accrued construction costs | 25,218 | 26,395 | |||||
Other current liabilities | 15,499 | 23,810 | |||||
Total other accrued liabilities | $ | 89,662 | $ | 98,406 |
April 23, 2016 | July 25, 2015 | ||||||
(Dollars in thousands) | |||||||
Credit Agreement - Revolving facility (matures April 2020) | $ | 214,000 | $ | 95,250 | |||
Credit Agreement - Term Loan (matures April 2020) | 150,000 | 150,000 | |||||
0.75% senior convertible notes, net (matures September 2021) | 369,327 | — | |||||
7.125% senior subordinated notes | — | 277,500 | |||||
Long-term debt premium on 7.125% senior subordinated notes | — | 2,841 | |||||
733,327 | 525,591 | ||||||
Less: current portion | (9,375 | ) | (3,750 | ) | |||
Long-term debt | $ | 723,952 | $ | 521,841 |
Borrowings - Eurodollar Rate Loans | 1.25% - 2.00% plus LIBOR |
Borrowings - Base Rate Loans | 0.25% - 1.00% plus administrative agent’s base rate* |
Unused Revolver Commitment | 0.25% - 0.40% |
Standby Letters of Credit | 1.25% - 2.00% |
Commercial Letters of Credit | 0.625% - 1.00% |
Weighted Average Rate End of Period | |||
April 23, 2016 | July 25, 2015 | ||
Borrowings - Term Loan | 2.42% | 1.94% | |
Borrowings - Revolving facility | 2.26% | 2.02% | |
Standby Letters of Credit | 1.75% | 1.75% | |
Unused Revolver | 0.35% | 0.35% |
April 23, 2016 | |||
(Dollars in thousands) | |||
Liability component | |||
Principal amount of 0.75% senior convertible notes due September 2021 | $ | 485,000 | |
Less: Debt discount | (106,269 | ) | |
Less: Debt issuance costs attributable to the liability component(1) | (9,404 | ) | |
Net carrying amount of Notes | $ | 369,327 | |
Equity Component(2) | $ | 112,554 |
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
April 23, 2016 | April 25, 2015 | April 23, 2016 | April 25, 2015 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Gain on sale of fixed assets | $ | 4,061 | $ | 3,067 | $ | 6,213 | $ | 6,249 | |||||||
Miscellaneous income, net | 262 | 404 | 653 | 752 | |||||||||||
Total other income, net | $ | 4,323 | $ | 3,471 | $ | 6,866 | $ | 7,001 |
Period | Number of Shares Repurchased | Total Consideration (Dollars in thousands) | Average Price Per Share | ||||||||
Fiscal 2015 | 1,669,924 | $ | 87,146 | $ | 52.19 | ||||||
Fiscal 2016: | |||||||||||
Three months ended October 24, 2015 | 954,224 | $ | 69,997 | $ | 73.35 | ||||||
Three months ended April 23, 2016 | 1,557,354 | $ | 100,000 | $ | 64.21 |
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
April 23, 2016 | April 25, 2015 | April 23, 2016 | April 25, 2015 | ||||||||||||
Stock-based compensation | $ | 3,892 | $ | 3,219 | $ | 12,600 | $ | 10,773 | |||||||
Tax benefit recognized in the statement of operations | $ | 1,467 | $ | 1,248 | $ | 4,809 | $ | 4,221 |
Stock Options | ||||||
Shares | Weighted Average Exercise Price | |||||
Outstanding as of July 25, 2015 | 915,323 | $ | 16.86 | |||
Granted | 35,863 | $ | 78.20 | |||
Options exercised | (144,756 | ) | $ | 12.55 | ||
Canceled | (800 | ) | $ | 13.88 | ||
Outstanding as of April 23, 2016 | 805,630 | $ | 20.37 | |||
Exercisable options as of April 23, 2016 | 621,858 | $ | 15.42 |
Restricted Stock | |||||||||||||
RSUs | Performance RSUs | ||||||||||||
Share Units | Weighted Average Grant Price | Share Units | Weighted Average Grant Price | ||||||||||
Outstanding as of July 25, 2015 | 322,008 | $ | 24.46 | 945,540 | $ | 26.46 | |||||||
Granted | 89,977 | $ | 72.06 | 238,209 | $ | 77.86 | |||||||
Share units vested | (122,910 | ) | $ | 23.79 | (361,998 | ) | $ | 25.28 | |||||
Forfeited or canceled | (22,928 | ) | $ | 24.35 | (192,613 | ) | $ | 23.15 | |||||
Outstanding as of April 23, 2016 | 266,147 | $ | 40.88 | 629,138 | $ | 47.61 |
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
April 23, 2016 | April 25, 2015 | April 23, 2016 | April 25, 2015 | ||||||||||||
Real property and equipment leases | $ | 622 | $ | 648 | $ | 2,060 | $ | 1,952 | |||||||
Subcontractors and materials expense | $ | 1,064 | $ | 792 | $ | 2,915 | $ | 1,981 |
For the Three Months Ended | For the Nine Months Ended | ||||||
April 23, 2016 | April 25, 2015 | April 23, 2016 | April 25, 2015 | ||||
AT&T Inc. | 26.8% | 21.3% | 22.8% | 21.5% | |||
Comcast Corporation | 14.4% | 13.3% | 13.3% | 13.0% | |||
CenturyLink, Inc. | 13.7% | 13.9% | 14.7% | 13.7% | |||
Verizon Communications Inc. | 10.4% | 7.5% | 10.6% | 7.1% |
For the Three Months Ended | For the Nine Months Ended | ||||||
April 23, 2016 | April 25, 2015 | April 23, 2016 | April 25, 2015 | ||||
AT&T Inc. | 26.8% | 21.3% | 22.8% | 21.5% | |||
Comcast Corporation | 14.4% | 13.3% | 13.3% | 13.0% | |||
CenturyLink, Inc. | 13.7% | 13.9% | 14.7% | 13.7% | |||
Verizon Communications Inc. | 10.4% | 7.5% | 10.6% | 7.1% | |||
Windstream Corporation | 5.6% | 4.6% | 5.8% | 4.5% | |||
Time Warner Cable Inc. | 3.2% | 4.7% | 4.1% | 4.9% | |||
Charter Communications, Inc. | 1.8% | 3.0% | 2.1% | 3.4% | |||
Corning Incorporated | 0.3% | 2.8% | 0.6% | 2.4% |
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||||||
April 23, 2016 | April 25, 2015 | April 23, 2016 | April 25, 2015 | ||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||
Revenues | $ | 664.6 | 100.0 | % | $ | 492.4 | 100.0 | % | $ | 1,883.4 | 100.0 | % | $ | 1,443.8 | 100.0 | % | |||||||||||
Expenses: | |||||||||||||||||||||||||||
Cost of earned revenue, excluding depreciation and amortization | 520.4 | 78.3 | 388.2 | 78.9 | 1,477.7 | 78.5 | 1,147.1 | 79.5 | |||||||||||||||||||
General and administrative | 56.5 | 8.5 | 44.7 | 9.1 | 155.0 | 8.2 | 131.2 | 9.1 | |||||||||||||||||||
Depreciation and amortization | 31.6 | 4.8 | 24.0 | 4.9 | 88.9 | 4.7 | 70.2 | 4.9 | |||||||||||||||||||
Total | 608.5 | 91.6 | 456.9 | 92.8 | 1,721.6 | 91.4 | 1,348.5 | 93.4 | |||||||||||||||||||
Interest expense, net | (8.0 | ) | (1.2 | ) | (6.6 | ) | (1.3 | ) | (25.0 | ) | (1.3 | ) | (20.1 | ) | (1.4 | ) | |||||||||||
Loss on debt extinguishment | — | — | — | — | (16.3 | ) | (0.9 | ) | — | — | |||||||||||||||||
Other income, net | 4.3 | 0.7 | 3.5 | 0.7 | 6.9 | 0.4 | 7.0 | 0.5 | |||||||||||||||||||
Income before income taxes | 52.5 | 7.9 | 32.3 | 6.6 | 127.4 | 6.8 | 82.2 | 5.7 | |||||||||||||||||||
Provision for income taxes | 19.4 | 2.9 | 12.0 | 2.4 | 48.0 | 2.5 | 31.7 | 2.2 | |||||||||||||||||||
Net income | $ | 33.1 | 5.0 | % | $ | 20.3 | 4.1 | % | $ | 79.4 | 4.2 | % | $ | 50.5 | 3.5 | % |
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
April 23, 2016 | April 25, 2015 | April 23, 2016 | April 25, 2015 | ||||||||||||
(Dollars in millions) | |||||||||||||||
Income tax provision | $ | 19.4 | $ | 12.0 | $ | 48.0 | $ | 31.7 | |||||||
Effective income tax rate | 36.9 | % | 37.2 | % | 37.7 | % | 38.5 | % |
For the Nine Months Ended | |||||||
April 23, 2016 | April 25, 2015 | ||||||
(Dollars in millions) | |||||||
Net cash flows: | |||||||
Provided by operating activities | $ | 79.0 | $ | 123.6 | |||
Used in investing activities | $ | (181.6 | ) | $ | (84.4 | ) | |
Provided by (used in) financing activities | $ | 100.6 | $ | (37.3 | ) |
Borrowings - Eurodollar Rate Loans | 1.25% - 2.00% plus LIBOR |
Borrowings - Base Rate Loans | 0.25% - 1.00% plus administrative agent’s base rate* |
Unused Revolver Commitment | 0.25% - 0.40% |
Standby Letters of Credit | 1.25% - 2.00% |
Commercial Letters of Credit | 0.625% - 1.00% |
Weighted Average Rate End of Period | |||
April 23, 2016 | July 25, 2015 | ||
Borrowings - Term Loan | 2.42% | 1.94% | |
Borrowings - Revolving facility | 2.26% | 2.02% | |
Standby Letters of Credit | 1.75% | 1.75% | |
Unused Revolver | 0.35% | 0.35% |
Less than 1 Year | Years 1 – 3 | Years 3 – 5 | Greater than 5 Years | Total | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
0.75% senior convertible notes due 2021 | $ | — | $ | — | $ | — | $ | 485,000 | $ | 485,000 | |||||||||
Credit Agreement – revolving borrowings | — | — | 214,000 | — | 214,000 | ||||||||||||||
Credit Agreement – Term Loan | 9,375 | 16,875 | 123,750 | — | 150,000 | ||||||||||||||
Fixed interest payments on long-term debt (a) | 3,638 | 7,275 | 7,275 | 1,818 | 20,006 | ||||||||||||||
Operating lease obligations | 18,404 | 23,688 | 7,903 | 5,833 | 55,828 | ||||||||||||||
Employment agreements | 10,713 | 14,892 | — | — | 25,605 | ||||||||||||||
Purchase and other contractual obligations (b) | 25,268 | — | — | — | 25,268 | ||||||||||||||
Total | $ | 67,398 | $ | 62,730 | $ | 352,928 | $ | 492,651 | $ | 975,707 |
(a) | Includes interest payments on our $485 million principal amount of 0.75% senior convertible notes due 2021 outstanding and excludes any interest payments on our variable rate debt. Variable rate debt as of April 23, 2016 consisted of $150.0 million outstanding on our Term Loan and $214.0 million in outstanding revolving borrowings under our credit agreement. See Note 18, Subsequent Events, in the Notes to the Condensed Consolidated Financial Statements for information regarding the May 20, 2016 amendment to our credit agreement. |
(b) | Purchase and other contractual obligations primarily represent obligations under agreements to purchase vehicles and equipment that have not been received as of April 23, 2016. We have excluded contractual obligations under the multi-employer defined pension plans that cover certain of our employees as these obligations are determined based on our future union employee payrolls, which cannot be reliably determined as of April 23, 2016. |
Period | Total Number of Shares Purchased (a) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | |||||||
January 24, 2016 - February 20, 2016 | — | $ | — | — | (b) | ||||||
February 21, 2016 - March 19, 2016 | 66,458 | $ | 62.67 | — | (b) | ||||||
March 20, 2016 - April 23, 2016 | 1,490,896 | $ | 64.28 | — | (b) |
Exhibit Number | |
12.1 + | Computation of Ratio of Earnings to Fixed Charges. |
31.1 + | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 + | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1 + | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 + | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101+ | The following materials from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended April 23, 2016 formatted in eXtensible Business Reporting Language: (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Comprehensive Income; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) the Notes to Condensed Consolidated Financial Statements. |
+ | Filed herewith |
DYCOM INDUSTRIES, INC. | |||
Registrant | |||
Date: | May 26, 2016 | /s/ Steven E. Nielsen | |
Name: Steven E. Nielsen Title: President and Chief Executive Officer | |||
Date: | May 26, 2016 | /s/ H. Andrew DeFerrari | |
Name: H. Andrew DeFerrari Title: Senior Vice President and Chief Financial Officer |
Nine Months Ended | Fiscal Year Ended | |||||||||||||||||||||||
April 23, 2016 | July 25, 2015 | July 26, 2014 | July 27, 2013 | July 28, 2012 | July 30, 2011 | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Earnings, as defined: | ||||||||||||||||||||||||
Income from continuing operations before cumulative effect of changes in accounting principles | $ | 79,380 | $ | 84,324 | $ | 39,978 | $ | 35,188 | $ | 39,378 | $ | 16,107 | ||||||||||||
Income tax expense | 47,995 | 51,260 | 26,341 | 23,011 | 25,183 | 12,377 | ||||||||||||||||||
Fixed charges included in the determination of net income | 36,962 | 39,970 | 39,528 | 34,774 | 24,001 | 22,185 | ||||||||||||||||||
Total earnings, as defined | $ | 164,337 | $ | 175,554 | $ | 105,847 | $ | 92,973 | $ | 88,562 | $ | 50,669 | ||||||||||||
Fixed charges, as defined: | ||||||||||||||||||||||||
Interest charges | $ | 25,023 | $ | 27,029 | $ | 26,837 | $ | 23,335 | $ | 16,745 | $ | 16,017 | ||||||||||||
Rental interest factor | 11,939 | 12,941 | 12,691 | 11,439 | 7,256 | 6,168 | ||||||||||||||||||
Total fixed charges, as defined | $ | 36,962 | $ | 39,970 | $ | 39,528 | $ | 34,774 | $ | 24,001 | $ | 22,185 | ||||||||||||
Ratio of earnings to fixed charges | 4.4x | 4.4x | 2.7x | 2.7x | 3.7x | 2.3x |
1. | I have reviewed this Quarterly Report on Form 10-Q of Dycom Industries, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 26, 2016 |
/s/ Steven E. Nielsen | |
Steven E. Nielsen | |
President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Dycom Industries, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 26, 2016 |
/s/ H. Andrew DeFerrari | |
H. Andrew DeFerrari | |
Senior Vice President and Chief Financial Officer |
1. | the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 26, 2016 |
/s/ Steven E. Nielsen | |
Steven E. Nielsen | |
President and Chief Executive Officer |
1. | the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 26, 2016 |
/s/ H. Andrew DeFerrari | |
H. Andrew DeFerrari | |
Senior Vice President and Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Apr. 23, 2016 |
May. 26, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | DYCOM INDUSTRIES INC | |
Entity Central Index Key | 0000067215 | |
Current Fiscal Year End Date | --07-30 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 31,345,101 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Apr. 23, 2016 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions |
Apr. 23, 2016 |
Jul. 25, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Long-term debt premium | $ 0.0 | $ 2.8 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1.00 |
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.333 | $ 0.333 |
Common stock, authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, issued (in shares) | 31,341,444 | 33,381,779 |
Common stock, outstanding (in shares) | 31,341,444 | 33,381,779 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 23, 2016 |
Apr. 25, 2015 |
Apr. 23, 2016 |
Apr. 25, 2015 |
|
REVENUES: | ||||
Contract revenues | $ 664,645 | $ 492,363 | $ 1,883,383 | $ 1,443,833 |
EXPENSES: | ||||
Costs of earned revenues, excluding depreciation and amortization | 520,408 | 388,239 | 1,477,671 | 1,147,136 |
General and administrative (including stock-based compensation expense of $3.9 million and $3.2 million, respectively) | 56,519 | 44,707 | 155,003 | 131,218 |
Depreciation and amortization | 31,583 | 23,985 | 88,930 | 70,179 |
Costs and Expenses | 608,510 | 456,931 | 1,721,604 | 1,348,533 |
Interest expense, net | (8,007) | (6,646) | (25,010) | (20,126) |
Loss on debt extinguishment | (16,260) | 0 | ||
Other income, net | 4,323 | 3,471 | 6,866 | 7,001 |
Income before income taxes | 52,451 | 32,257 | 127,375 | 82,175 |
Provision for income taxes: | ||||
Current | 14,842 | 9,346 | 20,026 | 27,654 |
Deferred | 4,526 | 2,653 | 27,969 | 4,024 |
Total provision for income taxes | 19,368 | 11,999 | 47,995 | 31,678 |
Net income | $ 33,083 | $ 20,258 | $ 79,380 | $ 50,497 |
Earnings per common share: | ||||
Basic earnings per common share (in dollars per share) | $ 1.02 | $ 0.59 | $ 2.43 | $ 1.48 |
Diluted earnings per common share (in dollars per share) | $ 1.00 | $ 0.58 | $ 2.37 | $ 1.44 |
Shares used in computing earnings per common share: | ||||
Basic (in shares) | 32,433,560 | 34,107,262 | 32,656,490 | 34,081,381 |
Diluted (in shares) | 33,050,934 | 35,028,956 | 33,486,515 | 35,091,644 |
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 23, 2016 |
Apr. 25, 2015 |
Apr. 23, 2016 |
Apr. 25, 2015 |
|
Income Statement [Abstract] | ||||
Stock-based compensation | $ 3,892 | $ 3,219 | $ 12,600 | $ 10,773 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 23, 2016 |
Apr. 25, 2015 |
Apr. 23, 2016 |
Apr. 25, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 33,083 | $ 20,258 | $ 79,380 | $ 50,497 |
Foreign currency translation gains (losses), net of tax | 447 | 38 | 91 | (688) |
Comprehensive income | $ 33,530 | $ 20,296 | $ 79,471 | $ 49,809 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) |
Apr. 23, 2016 |
Jul. 25, 2015 |
---|---|---|
0.75% Convertible Senior Notes Due 2021 | ||
Debt, interest rate (in percent) | 0.75% | 0.00% |
7.125% Senior Subordinated Notes Due 2021 | ||
Debt, interest rate (in percent) | 0.00% | 7.125% |
Basis of Presentation and Accounting Policies |
9 Months Ended |
---|---|
Apr. 23, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Accounting Policies | Basis of Presentation and Accounting Policies Basis of Presentation Dycom Industries, Inc. (“Dycom” or the “Company”) is a leading provider of specialty contracting services throughout the United States and in Canada. The Company provides program management, engineering, construction, maintenance and installation services for telecommunications providers, underground facility locating services for various utilities, including telecommunications providers, and other construction and maintenance services for electric and gas utilities. The accompanying unaudited condensed consolidated financial statements include the results of Dycom and its subsidiaries, all of which are wholly-owned. All intercompany accounts and transactions have been eliminated and the financial statements reflect all adjustments, consisting of only normal recurring accruals that are, in the opinion of management, necessary for a fair presentation of such statements. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. Operating results for the interim period are not necessarily indicative of the results expected for any other interim period or for the full fiscal year. These condensed consolidated financial statements and accompanying notes should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this report and the Company’s audited financial statements for the year ended July 25, 2015 included in the Company’s Annual Report on Form 10-K for the year ended July 25, 2015, filed with the SEC on September 4, 2015. Segment Information – The Company operates in one reportable segment. Its services are provided by its operating segments on a decentralized basis. Each operating segment consists of a subsidiary (or in certain instances, the combination of two or more subsidiaries). Management of the operating segments report to the Company’s Chief Operating Officer who reports to the Chief Executive Officer, the chief operating decision maker. All of the Company’s operating segments have been aggregated into one reportable segment based on their similar economic characteristics, nature of services and production processes, type of customers, and service distribution methods. The Company’s operating segments provide services throughout the United States and in Canada. Revenues from services provided in Canada were approximately $0.9 million and $5.5 million during the three and nine months ended April 23, 2016, respectively, and $2.0 million and $9.8 million during the three and nine months ended April 25, 2015, respectively. The Company had no material long-lived assets in Canada as of April 23, 2016 or July 25, 2015. Accounting Period – The Company’s fiscal year ends on the last Saturday in July. As a result, each fiscal year consists of either fifty-two weeks or fifty-three weeks of operations (with an additional week of operations occurring in the fourth quarter). Fiscal 2015 contained fifty-two weeks and fiscal 2016 will contain fifty-three weeks of operations. Significant Accounting Policies & Estimates Use of Estimates – The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. These estimates are based on the Company’s historical experience and management’s understanding of current facts and circumstances. At the time they are made, the Company believes that such estimates are fair when considered in conjunction with the consolidated financial position and results of operations taken as a whole. However, actual results could differ materially from those estimates. There have been no material changes to the Company’s significant accounting policies and critical accounting estimates described in the Company’s Annual Report on Form 10-K for the year ended July 25, 2015. Revenue Recognition. The Company performs a majority of its services under master service agreements and other agreements that contain customer-specified service requirements, such as discrete pricing for individual tasks. Revenue is recognized under these arrangements based on units-of-delivery as each unit is completed. The remainder of the Company’s services, representing less than 10% of its contract revenues during the nine months ended April 23, 2016 and April 25, 2015, are performed under contracts using the cost-to-cost measures of the percentage of completion method of accounting. Revenue is recognized under these arrangements based on the ratio of contract costs incurred to date to total estimated contract costs. There were no material amounts of unapproved change orders or claims recognized during the nine months ended April 23, 2016 or April 25, 2015. The current asset “Costs and estimated earnings in excess of billings” represents revenues recognized in excess of amounts billed. The current liability “Billings in excess of costs and estimated earnings” represents billings in excess of revenues recognized. Application of the percentage of completion method of accounting requires the use of estimates of costs to be incurred for the performance of the contract. The cost estimation process is based on the knowledge and experience of the Company’s project managers and financial professionals. Factors that the Company considers in estimating the work to be completed and ultimate contract recovery include the availability and productivity of labor, the nature and complexity of the work to be performed, the effect of change orders, the availability of materials, the effect of any delays in performance and the recoverability of any claims. Changes in job performance, job conditions, estimated profitability, and final contract settlements may result in changes to costs and income and their effects are recognized in the period in which the revisions are determined. The Company accrues the entire amount of an estimated loss at the time the loss on a contract becomes known for contracts using the cost-to-cost measures of the percentage of completion method of accounting. During the nine months ended April 23, 2016 and April 25, 2015, there was no material impact to the Company's results of operations due to changes in contract estimates. Restricted Cash – As of April 23, 2016 and July 25, 2015, the Company had approximately $5.0 million and $4.5 million, respectively, in restricted cash, which is held as collateral in support of the Company’s insurance obligations. Restricted cash is included in other assets in the condensed consolidated balance sheets and changes in restricted cash are reported in cash flows used in investing activities in the condensed consolidated statements of cash flows. Business Combinations – The Company accounts for business combinations under the acquisition method of accounting. The purchase price of each business acquired is allocated to the tangible and intangible assets acquired and the liabilities assumed based on information regarding their respective fair values on the date of acquisition. Any excess of the purchase price over the fair value of the separately identifiable assets acquired and the liabilities assumed is allocated to goodwill. Management determines the fair values used in purchase price allocations for intangible assets based on historical data, estimated discounted future cash flows, contract backlog amounts, if applicable, and expected royalty rates for trademarks and trade names, as well as certain other information. The valuation of assets acquired and liabilities assumed requires a number of judgments and is subject to revision as additional information about the fair value of assets and liabilities becomes available. Additional information, which existed as of the acquisition date but unknown to the Company at that time, may become known during the remainder of the measurement period, a period not to exceed twelve months from the acquisition date. Adjustments to the preliminary purchase price allocation, if necessary, are recorded to the value of the assets acquired and liabilities assumed, with a corresponding adjustment to goodwill. Acquisition costs are expensed as incurred. The results of operations of businesses acquired are included in the accompanying condensed consolidated financial statements from their dates of acquisition. Fair Value of Financial Instruments – The Company’s financial instruments primarily consist of cash and equivalents, restricted cash, accounts receivable, income taxes receivable and payable, accounts payable, certain accrued expenses, and long-term debt. The carrying amounts of these items approximate fair value due to their short maturity, except for certain of the Company’s outstanding long-term debt, which is based on observable market-based inputs (Level 2). See Note 10, Debt, for further information regarding the fair value of such financial instruments. The Company’s cash and equivalents are based on quoted market prices in active markets for identical assets (Level 1) as of April 23, 2016 and July 25, 2015. During the three and nine months ended April 23, 2016 and April 25, 2015, the Company had no material nonrecurring fair value measurements of assets or liabilities subsequent to their initial recognition. Other Assets – As of April 23, 2016 and July 25, 2015, other non-current assets consist of deferred financing costs of $7.2 million and $11.6 million, respectively, insurance recoveries/receivables related to accrued claims of $5.9 million and $8.9 million, respectively, as well as long-term deposits, prepaid discounts, and other non-current assets totaling $17.3 million and $13.6 million, respectively. As of April 23, 2016 and July 25, 2015, other non-current assets also included $4.0 million for an investment in nonvoting senior units of a former customer, which is accounted for using the cost method. Recently Issued Accounting Pronouncements There have been no changes in the expected dates of adoption or estimated effects on the Company’s consolidated financial statements of recently issued accounting pronouncements from those disclosed in the Company’s Annual Report on Form 10-K. Accounting standards adopted during the period covered in this Quarterly Report on Form 10-Q and recently issued accounting pronouncements are discussed below. Recently Adopted Accounting Standards Discontinued Operations - In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). ASU 2014-08 changes the criteria for reporting discontinued operations. In accordance with ASU 2014-08, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations only if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. ASU 2014-08 also requires expanded disclosures about the assets, liabilities, income, and expenses of discontinued operations as well as disclosure of the pre-tax income arising from a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. The Company adopted ASU 2014-08 in fiscal 2016 and it did not have a material effect on the Company’s consolidated financial statements. Accounting Standards Not Yet Adopted Stock Compensation - In March 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-09, Compensation - Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). ASU 2016-09 includes provisions intended to simplify accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under ASU 2016-09, all excess tax benefits (or tax deficiencies) will be recognized as income tax benefit (or expense) in the statement of operations. Additionally, when applying the treasury stock method for computing diluted earnings per share under ASU 2016-09 the assumed proceeds will not include any windfall tax benefits, resulting in equity awards which may result in a greater number of dilutive shares outstanding. Further, excess tax benefits will be classified along with other income tax cash flows as an operating activity. ASU 2016-09 also permits withholding up to the maximum statutory tax rate in applicable jurisdictions as the threshold to qualify for equity classification. ASU 2016-09 will be effective for the Company in fiscal 2018 and interim reporting periods within that year. Early adoption is permitted as of the beginning of an interim or annual reporting period with all adjustments to be reflected as of the beginning of the fiscal year of adoption. The Company is currently evaluating the effect of the adoption of this guidance on the Company’s consolidated financial statements. Revenue Recognition - In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) requiring entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”) which defers the effective date for ASU 2014-09. As such, ASU 2014-09 will be effective for the Company beginning in fiscal 2019 and interim reporting periods within that year, using either the retrospective or cumulative effect transition method. The Company is currently evaluating the transition methods and the effect of the adoption of this guidance on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-08”), which clarifies the implementation guidance provided in ASU 2014-09 on principal versus agent considerations. Additionally, in April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”), which clarifies the implementation guidance in ASU 2014-09 on licensing and identifying performance obligations. Furthermore, in May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which clarifies implementation guidance in ASU 2014-09 on assessing collectability, noncash consideration, presentation of sales tax and completed contracts and contract modifications at transition. ASU 2016-08, ASU 2016-10 and ASU 2016-12 must be adopted concurrently with ASU 2014-09. The Company is currently evaluating the transition methods and the effect of the adoption of this guidance on the Company’s consolidated financial statements. Leases - In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The new guidance requires lessees to recognize assets and liabilities, initially measured at the present value of the lease payments, on the balance sheet for the rights and obligations created by long-term finance and operating leases. For finance leases, a lessee is required to recognize interest on the lease liability separately from amortization of the right-of-use asset in the statement of comprehensive income. Repayments of the principal portion of a finance lease liability should be classified within financing activities and payments of interest on a finance lease liability and variable lease payments should be classified within operating activities in the statement of cash flows. For operating leases, a lessee is required to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term generally on a straight-line basis. All cash payments for operating leases should be classified within operating activities in the statement of cash flows. ASU 2016-02 will be effective for the Company in fiscal 2020 and interim reporting periods within that year. The Company is currently evaluating the effect of the adoption of this guidance on the Company’s consolidated financial statements. Income Taxes - In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”). ASU 2015-17 eliminates the current requirement for an entity to separate deferred income tax liabilities and assets into current and non-current amounts in a classified statement of financial position. To simplify the presentation of deferred income taxes, the amendments in ASU 2015-17 require that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position. ASU 2015-17 will be effective for the Company in fiscal 2018 and interim reporting periods within that year. Early adoption is permitted as of the beginning of an interim or annual reporting period. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements other than with respect to the presentation of deferred tax assets and liabilities within its consolidated balance sheets. Business Combinations - In September 2015, the FASB issued Accounting Standards Update No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments (“ASU 2015-16”). ASU 2015-16 replaces the requirement for an acquirer in a business combination to retrospectively adjust provisional amounts recognized at the acquisition date with a corresponding adjustment to goodwill when measurement period adjustments are identified. The new guidance requires an acquirer to recognize adjustments in the reporting period in which the adjustment amounts are determined. The acquirer must record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. Additionally, the acquirer must present separately on the face of the income statement, or disclose in the notes, the portion of the amount recorded in current period earnings by line item that would have been recorded in previous reporting periods if the adjustments had been recognized as of the acquisition date. ASU 2015-16 will be effective for the Company in fiscal 2017 and interim reporting periods within that year. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements. |
Computation of Earnings Per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Earnings Per Common Share | Computation of Earnings per Common Share The table below sets forth the computation of basic and diluted earnings per common share. Basic earnings per common share is computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per common share includes the weighted average number of common shares outstanding during the period and dilutive potential common shares arising from the Company’s stock-based awards, senior convertible notes and warrants if their inclusion is dilutive under the treasury stock method. Common stock equivalents related to stock-based awards, senior convertible notes and warrants are excluded from diluted earnings per common share calculations if their effect would be anti-dilutive.
The weighted-average number of common shares outstanding used in the computation of diluted earnings per common share does not include the effect of the following instruments because their inclusion would have been anti-dilutive:
*See Note 10, Debt, for additional information related to the Company’s senior convertible notes and warrant transactions. Under the treasury stock method, the senior convertible notes will have a dilutive impact on earnings per common share if the Company’s average stock price for the period exceeds the conversion price for the senior convertible notes of $96.89 per share. The warrants will have a dilutive impact on earnings per common share if the Company’s average stock price for the period exceeds the warrant strike price of $130.43 per share. As the Company’s average stock price for the three and nine months ended April 23, 2016 was below the conversion price for the senior convertible notes and warrants, the underlying common shares were anti-dilutive as reflected above. In connection with the offering of the senior convertible notes, the Company entered into convertible note hedge transactions with counterparties for the purpose of reducing the potential dilution to common stockholders from the conversion of the notes and offsetting any potential cash payments in excess of the principal amount of the notes. Prior to conversion, the convertible note hedge is not included for purposes of the calculation of earnings per common share as its effect would be anti-dilutive. Upon conversion, the convertible note hedge is expected to offset the dilutive effect of the senior convertible notes when the stock price is above $96.89 per share. See Note 10, Debt, for additional information related to the Company’s convertible note hedge. |
Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Fiscal 2016 - On August 7, 2015, the Company acquired TelCom Construction, Inc. and an affiliate (together, “TelCom”). The purchase price was $48.8 million paid in cash. TelCom, based in Clearwater, Minnesota, provides construction and maintenance services for telecommunications providers throughout the United States. This acquisition expands the Company’s geographical presence within its existing customer base. The purchase price allocation of TelCom is preliminary and will be completed during fiscal 2016 when valuations are finalized for intangible assets and other amounts. The preliminary purchase price allocation of TelCom is as follows (dollars in millions):
Fiscal 2015 - During the first quarter of fiscal 2015, the Company acquired Hewitt Power & Communications, Inc. (“Hewitt”) for $8.0 million, net of cash acquired. Hewitt provides specialty contracting services primarily for telecommunications providers in the Southeastern United States. During the second quarter of fiscal 2015, the Company acquired the assets of two cable installation contractors for an aggregate purchase price of $1.5 million. During the fourth quarter of fiscal 2015, the Company acquired Moll’s Utility Services, LLC (“Moll’s”) for $6.5 million, net of cash acquired. Moll’s provides specialty contracting services primarily for utilities in the Midwest United States. The Company also acquired the assets of Venture Communications Group, LLC (“Venture”) for $15.6 million during the fourth quarter of fiscal 2015. Venture provides specialty contracting services primarily for telecommunications providers in the Midwest and Southeastern United States. The results of these acquisitions are included in the condensed consolidated financial statements from their respective dates of acquisition. The results from businesses acquired during fiscal 2016 and fiscal 2015 were not considered material to the Company’s condensed consolidated financial statements, individually or in the aggregate. |
Accounts Receivable |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable | Accounts Receivable Accounts receivable consisted of the following:
The Company grants credit under normal payment terms, generally without collateral, to its customers. The Company expects to collect the outstanding balance of accounts receivable, net (including retainage) within the next twelve months. The increase in retainage during fiscal 2016 resulted primarily from the increase in work performed on certain ongoing contracts with standard retainage provisions. The Company maintains an allowance for doubtful accounts for estimated losses on uncollected balances. During the three and nine months ended April 23, 2016 and April 25, 2015, write-offs to the allowance for doubtful accounts, net of recoveries, were not material. As of April 23, 2016, there were no material accounts receivable amounts representing claims or other similar items subject to uncertainty. |
Costs and Estimated Earnings in Excess of Billings |
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Costs and Estimated Earnings in Excess of Billings | Costs and Estimated Earnings in Excess of Billings Costs and estimated earnings in excess of billings (“CIEB”) include revenue for services from contracts based on units-ofdelivery and cost-to-cost measures of the percentage of completion method of accounting. Amounts consisted of the following:
As of April 23, 2016, the Company expects that substantially all of its CIEB will be billed to customers and collected in the normal course of business within the next twelve months. Additionally, there were no material CIEB amounts representing claims or other similar items subject to uncertainty as of April 23, 2016 or July 25, 2015. |
Property and Equipment |
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Property and Equipment | Property and Equipment Property and equipment consisted of the following:
Depreciation expense was $27.0 million and $19.8 million for the three months ended April 23, 2016 and April 25, 2015, respectively, and $74.9 million and $57.8 million for the nine months ended April 23, 2016 and April 25, 2015, respectively. |
Goodwill and Intangible Assets |
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Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The Company’s goodwill balance was $281.4 million and $271.7 million as of April 23, 2016 and July 25, 2015, respectively. The increase in goodwill during fiscal 2016 was primarily from the acquisition of TelCom. Changes in the carrying amount of goodwill for fiscal 2016 were as follows:
The full amount of goodwill from fiscal 2016 acquisitions is expected to be deductible for tax purposes. Goodwill largely consists of expected synergies resulting from the acquisitions, including the expansion of the Company’s geographic scope and strengthening of its customer base. The Company’s goodwill resides in multiple reporting units. Goodwill and other indefinite-lived intangible assets are assessed annually for impairment as of the first day of the fourth fiscal quarter of each year, or more frequently if events occur that would indicate a potential reduction in the fair value of a reporting unit below its carrying value. The profitability of individual reporting units may suffer periodically due to downturns in customer demand and the level of overall economic activity, including in particular construction and housing activity. The Company’s customers may reduce capital expenditures and defer or cancel pending projects during times of slowing economic conditions. Additionally, adverse conditions in the economy and future volatility in the equity and credit markets could impact the valuation of the Company’s reporting units. The cyclical nature of the Company’s business, the high level of competition existing within its industry, and the concentration of its revenues from a limited number of customers may also cause results to vary. These factors may affect individual reporting units disproportionately, relative to the Company as a whole. As a result, the performance of one or more of the reporting units could decline, resulting in an impairment of goodwill or intangible assets. As a result of the fiscal 2015 annual impairment analysis, the Company concluded that no impairment of goodwill or the indefinite-lived intangible asset was indicated at any reporting unit. As of April 23, 2016, the Company believes goodwill is recoverable for all of the reporting units; however, there can be no assurances that goodwill will not be impaired in future periods. Intangible Assets The Company’s intangible assets consisted of the following:
During the nine months ended April 23, 2016, the gross carrying amount of intangible assets for customer relationships, trade names, and non-compete agreements increased $16.2 million, $1.6 million, and $0.2 million, respectively, as a result of the preliminary allocation of the purchase price of TelCom. During fiscal 2016, certain contract backlog intangible assets and non-compete agreements intangible assets became fully amortized. As a result, the gross carrying amount and the associated accumulated amortization decreased $3.4 million. This decrease had no effect on the net carrying value of intangible assets. Amortization of the Company’s customer relationship intangibles and contract backlog intangibles is recognized on an accelerated basis as a function of the expected economic benefit. Amortization for the Company’s other finite-lived intangibles is recognized on a straight-line basis over the estimated useful life. Amortization expense for finite-lived intangible assets was $4.5 million and $4.1 million for the three months ended April 23, 2016 and April 25, 2015, respectively, and $14.0 million and $12.4 million for the nine months ended April 23, 2016 and April 25, 2015, respectively. As of April 23, 2016, total amortization expense for existing finite-lived intangible assets for the remainder of fiscal 2016 and each of the five succeeding fiscal years and thereafter is as follows:
As of April 23, 2016, the Company believes that the carrying amounts of its intangible assets are recoverable. However, if adverse events were to occur or circumstances were to change indicating that the carrying amount of such assets may not be fully recoverable, the assets would be reviewed for impairment and the assets could be impaired. |
Accrued Insurance Claims |
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Accrued Insurance Claims [Abstract] | |
Accrued Insurance Claims | Accrued Insurance Claims For claims within the Company’s insurance program, it retains the risk of loss, up to certain limits, for matters related to automobile liability, general liability (including damages associated with underground facility locating services), workers’ compensation, and employee group health. With regard to losses occurring in fiscal 2016, the Company retains the risk of loss up to $1.0 million on a per occurrence basis for automobile liability, general liability, and workers’ compensation. These retention amounts are applicable to all of the states in which the Company operates, except with respect to workers’ compensation insurance in two states in which the Company participates in state-sponsored insurance funds. Aggregate stop-loss coverage for automobile liability, general liability, and workers’ compensation claims is $84.6 million for fiscal 2016. The Company is party to a stop-loss agreement for losses under its employee group health plan. For calendar year 2015, the Company retained the risk of loss up to the first $250,000 of claims per participant as well as an annual aggregate amount. With regard to losses occurring in calendar year 2016, the Company retains the risk of loss, on an annual basis, up to the first $400,000 of claims per participant as well as an annual aggregate amount. The liability for total accrued insurance claims and related processing costs was $90.7 million and $87.3 million as of April 23, 2016 and July 25, 2015, respectively, of which $51.3 million and $51.5 million, respectively, was long-term and reflected in non-current liabilities in the condensed consolidated financial statements. Insurance recoveries/receivables related to accrued claims as of April 23, 2016 and July 25, 2015 were $5.9 million and $9.5 million, respectively, of which $5.9 million and $8.9 million, respectively, was included in non-current other assets in the accompanying condensed consolidated balance sheets. As of July 25, 2015, $0.6 million of insurance recoveries/receivables was included in other current assets. |
Other Accrued Liabilities |
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Other Accrued Liabilities | Other Accrued Liabilities Other accrued liabilities consisted of the following:
Income tax payable of less than $0.1 million and $8.9 million was included within other current liabilities in the above table as of April 23, 2016 and July 25, 2015, respectively. |
Debt |
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Debt | Debt The Company’s outstanding indebtedness consisted of the following:
Senior Credit Agreement The Company and certain of its subsidiaries are party to a credit agreement with the various lenders named therein (the “Credit Agreement”), dated as of December 3, 2012 (as amended as of May 20, 2016, April 24, 2015 and September 9, 2015), that matures on April 24, 2020. See Note 18, Subsequent Events, for information regarding the May 20, 2016 amendment. As of April 23, 2016, the Credit Agreement provided for a $450 million revolving facility and $150 million term loan facility and contained a sublimit for the issuance of letters of credit of $200 million. Subject to certain conditions, the Credit Agreement provides the Company the ability to enter into one or more incremental facilities, up to the greater of (i) $150 million and (ii) an amount such that, after giving effect to such incremental facility on a pro forma basis (assuming that the amount of the incremental commitments are fully drawn and funded), the consolidated senior secured leverage ratio does not exceed 2.25 to 1.00. The consolidated senior secured leverage ratio is the ratio of the Company’s consolidated senior secured indebtedness to its trailing twelve month consolidated earnings before interest, taxes, depreciation, and amortization (“EBITDA”), as defined by the Credit Agreement. The incremental facilities can be in the form of revolving commitments under the Credit Agreement and/or in the form of term loans. Payments under the Credit Agreement are guaranteed by substantially all of the Company’s subsidiaries and secured by the equity interests of the substantial majority of the Company’s subsidiaries. Borrowings under the Credit Agreement bear interest at rates described below based upon the Company’s consolidated leverage ratio, which is the ratio of the Company’s consolidated total funded debt to its trailing twelve month consolidated EBITDA, as defined by the Credit Agreement. In addition, the Company incurs certain fees for unused balances and letters of credit at the rates described below, also based upon the Company’s consolidated leverage ratio.
*The agent’s base rate is described in the Credit Agreement as the highest of (i) the administrative agent’s prime rate, (ii) the Federal Funds Rate plus 0.50%, and (iii) the Eurodollar rate plus 1.00%, plus an applicable margin. Standby letters of credit of approximately $57.7 million and $54.4 million, issued as part of the Company’s insurance program, were outstanding under the Credit Agreement as of April 23, 2016 and July 25, 2015, respectively. The weighted average interest rates and fees for balances under the Credit Agreement as of April 23, 2016 and July 25, 2015 were as follows:
The Credit Agreement contains a financial covenant that requires the Company to maintain a consolidated leverage ratio of not greater than 3.50 to 1.00, as measured at the end of each fiscal quarter. It provides for certain increases to this ratio in connection with permitted acquisitions on the terms and conditions specified in the Credit Agreement. In addition, the Credit Agreement contains a financial covenant that requires the Company to maintain a consolidated interest coverage ratio, which is the ratio of the Company’s trailing twelve month consolidated EBITDA to its consolidated interest expense, as defined by the Credit Agreement, of not less than 3.00 to 1.00, as measured at the end of each fiscal quarter. At April 23, 2016 and July 25, 2015, the Company was in compliance with the financial covenants of the Credit Agreement and had additional borrowing availability in the revolving facility of $178.3 million and $300.3 million, respectively, as determined by the most restrictive covenants. See Note 18, Subsequent Events, in the Notes to the Condensed Consolidated Financial Statements for information regarding the May 20, 2016 amendment and incremental term loan. 0.75% Convertible Senior Notes Due 2021 On September 15, 2015, the Company issued $485 million principal amount of 0.75% senior convertible notes due September 2021 (the “Notes”) in a private placement. The Company received net proceeds of approximately $471.7 million after deducting the initial purchasers’ discount of approximately $13.3 million. The Company used approximately $60.0 million of the net proceeds to repurchase 805,000 shares of its common stock from the initial purchasers of the Notes in privately negotiated transactions. In addition, the Company used approximately $296.6 million of the net proceeds to fund the redemption of all of its 7.125% senior subordinated notes and approximately $41.1 million for the net cost of convertible note hedge transactions and warrant transactions as further described below. The remainder of the proceeds of approximately $73.9 million is intended for general corporate purposes. The Notes, governed by the terms of an indenture between the Company and U.S. Bank National Association, as trustee, are unsecured obligations and do not contain any financial covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Company. The Notes bear interest at a rate of 0.75% per year, payable in cash semiannually in March and September, and will mature on September 15, 2021, unless earlier purchased by the Company or converted. In the event the Company fails to perform certain obligations under the indenture, the Notes will accrue additional interest. Certain events are considered “events of default” under the Notes, which may result in the acceleration of the maturity of the Notes, as described in the indenture. Each $1,000 of principal of the Notes is convertible into 10.3211 shares of the Company’s common stock, which is equivalent to an initial conversion price of approximately $96.89 per share. The conversion rate is subject to adjustment in certain circumstances, including in connection with specified fundamental changes (as defined in the indenture). In addition, holders of the Notes have the right to require the Company to repurchase all or a portion of their notes on the occurrence of a fundamental change at a price of 100% of their principal amount plus accrued and unpaid interest. Prior to June 15, 2021, the Notes are convertible by the Note holder under the following circumstances: (1) during any fiscal quarter commencing after October 24, 2015 (and only during such fiscal quarter) if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days period ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the applicable conversion price on such trading day; (2) during the five consecutive business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of such measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. On or after June 15, 2021 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or a portion of their Notes at any time regardless of the foregoing circumstances. Upon conversion, the Notes will be settled, at the Company’s election, in cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock. The Company intends to settle the principal amount of the Notes with cash. In accordance with ASC Topic 470, Debt (“ASC Topic 470”), certain convertible debt instruments that may be settled in cash upon conversion are required to be separately accounted for as liability and equity components. The carrying amount of the liability component is calculated by measuring the fair value of a similar instrument that does not have an associated convertible feature using an indicative market interest rate (“Comparable Yield”) as of the date of issuance. The difference between the principal amount of the notes and the carrying amount represents a debt discount. The debt discount is amortized to interest expense using the Comparable Yield (5.5% with respect to the Notes) using the effective interest rate method over the term of the notes. The Company incurred $4.2 million and $10.1 million of interest expense during the three and nine months ended April 23, 2016, respectively, for the non-cash amortization of the debt discount. The equity component represents the difference between the principal amount of the Notes and the debt discount, both measured at issuance. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The Notes consist of the following components:
(1) Issuance costs of approximately $15.1 million related to the Notes included the initial purchasers’ discount of approximately $13.3 million and approximately $1.8 million paid to third parties. Approximately $10.1 million of issuance costs paid to the initial purchasers of the Notes was allocated to the liability component and recorded as a contra-liability, presented net against the carrying amount of the Notes on the Company’s condensed consolidated balance sheet, of which $9.4 million remains unamortized as of April 23, 2016. Approximately $1.3 million of issuance costs paid to third parties was allocated to the liability component and recorded as deferred costs within other assets in the Company’s condensed consolidated balance sheets. Debt issuance costs attributable to the liability component are amortized to interest expense on the effective interest rate method over the term of the Notes. During the three and nine months ended April 23, 2016, the Company recorded $0.3 million and $0.8 million, respectively, related to the amortization of debt issuance costs of the Notes. (2) Approximately $3.6 million of issuance costs paid to the initial purchasers of the Notes and third parties was allocated to the equity component and recorded net against the equity component in stockholders’ equity on the condensed consolidated balance sheets. The Company determined that the fair value of the Notes as of April 23, 2016 was approximately $374.6 million, based on quoted market prices (level 2), compared to a $369.3 million net carrying amount. The fair value and net carrying amount are both reflected net of the debt discount of $106.3 million and debt issuance costs attributable to the liability component of $9.4 million as of April 23, 2016. Convertible Note Hedge and Warrant Transactions In connection with the offering of the Notes, the Company entered into convertible note hedge transactions with counterparties for the purpose of reducing the potential dilution to common stockholders from the conversion of the Notes and offsetting any potential cash payments in excess of the principal amount of the Notes. In the event that shares or cash are deliverable to holders of the Notes upon conversion at limits defined in the indenture, counterparties to the convertible note hedge will be required to deliver up to 5.006 million shares of the Company’s common stock or pay cash to the Company in a similar amount as the value that the Company delivers to the holders of the Notes based on a conversion price of $96.89 per share. The total cost of the convertible note hedge transactions was $115.8 million. In addition, the Company entered into separately negotiated warrant transactions with the same counterparties as the convertible note hedge transactions whereby the Company sold warrants to purchase, subject to certain anti-dilution adjustments, up to 5.006 million shares of the Company’s common stock at a price of $130.43 per share. The warrants will not have a dilutive effect on the Company’s earnings per share unless the Company’s quarterly average share price exceeds the warrant strike price of $130.43 per share. In this event, the Company expects to settle the warrant transactions on a net share basis whereby it will issue shares of its common stock. The Company received proceeds of approximately $74.7 million from the sale of these warrants. Upon settlement of the conversion premium of the Notes, convertible note hedge, and warrants, the resulting dilutive impact of these transactions, if any, would be the number of shares necessary to settle the value of the warrant transactions above $130.43 per share. The net amounts incurred in connection with the convertible note hedge and warrant transactions were recorded as a reduction to additional paid-in capital on the condensed consolidated balance sheets during the first quarter of fiscal 2016 and are not expected to be remeasured in subsequent reporting periods. The Company recorded a deferred tax liability of $43.4 million in connection with the debt discount associated with the Notes and recorded a deferred tax asset of $43.2 million in connection with the convertible note hedge transactions. Both the deferred tax liability and deferred tax assets are included in non-current deferred tax liabilities as of April 23, 2016. 7.125% Senior Subordinated Notes - Loss on Debt Extinguishment As of July 25, 2015, Dycom Investments, Inc., (the “Issuer”), a wholly-owned subsidiary of the Company, had outstanding an aggregate principal amount of $277.5 million of 7.125% senior subordinated notes due 2021 (the “7.125% Notes”). The outstanding 7.125% Notes were redeemed on October 15, 2015 (the “Redemption Date”) with a portion of the proceeds from the Notes offering described above. The aggregate amount paid in connection with the redemption was $296.6 million and was comprised of all of the $277.5 million principal amount of the outstanding 7.125% Notes, $4.9 million for accrued and unpaid interest to the Redemption Date, and approximately $14.2 million for the applicable call premium as defined in the indenture governing the 7.125% Notes. The applicable call premium amount consisted of (a) the present value as defined under the indenture of the sum of (i) approximately $4.9 million representing interest for the period from the Redemption Date through January 15, 2016, and (ii) the redemption price of 103.563% (expressed as a percentage of the principal amount) of the 7.125% Notes at January 15, 2016, minus (b) the principal amount of the 7.125% Notes. In connection with the redemption of the 7.125% Notes, the Company incurred a pre-tax charge for early extinguishment of debt of approximately $16.3 million during the first quarter of fiscal 2016. This charge is comprised of approximately: (i) $4.9 million for the present value of the interest payments for the period from the Redemption Date through January 15, 2016, (ii) $6.5 million for the excess of the present value of the redemption price over the carrying value of the 7.125% Notes, and (iii) $4.9 million for the write-off of deferred financing charges related to the fees incurred on the 7.125% Notes issuance. |
Income Taxes |
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Apr. 23, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. The Company’s effective income tax rate differs from the statutory rate for the tax jurisdictions where it operates primarily as the result of the impact of non-deductible and non-taxable items and tax credits recognized in relation to pre-tax results. Measurement of the Company’s tax position is based on the applicable statutes, federal and state case law, and its interpretations of tax regulations. The Company is subject to federal income taxes in the United States, the income taxes of multiple state jurisdictions and in Canada. There were immaterial amounts of pre-tax earnings related to Canadian operations for the three and nine months ended April 23, 2016 and April 25, 2015. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or Canadian income tax examinations for fiscal years ended 2011 and prior. The Company believes its provision for income taxes is adequate; however, any assessment would affect the Company’s results of operations and cash flows. Income tax receivable was $15.3 million and $2.1 million as of April 23, 2016 and July 25, 2015, respectively. The $2.1 million income tax receivable as of July 25, 2015 is included in other current assets. The increase in income tax receivable and related increase in deferred tax liabilities, net non-current, was primarily related to the extension of bonus depreciation pursuant to the Protecting Americans from Tax Hikes Act of December 2015. Income tax payable was less than $0.1 million and $8.9 million as of April 23, 2016 and July 25, 2015, respectively, and is included in other accrued liabilities. As of both April 23, 2016 and July 25, 2015, the Company had total unrecognized tax benefits of $2.3 million, resulting from uncertain tax positions. The Company’s effective tax rate will be reduced during future periods if it is determined these tax benefits are realizable. The Company had approximately $1.0 million and $0.9 million accrued for the payment of interest and penalties as of April 23, 2016 and July 25, 2015, respectively. Interest expense related to unrecognized tax benefits for the Company was immaterial. |
Other Income, Net |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income, Net | Other Income, Net The components of other income, net, were as follows:
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Capital Stock |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Stock | Capital Stock Repurchases of Common Stock - The Company made the following share repurchases during fiscal 2015 and the interim periods of fiscal 2016:
In connection with the Notes offering in September 2015, the Company used approximately $60.0 million of the net proceeds from the Notes to repurchase 805,000 shares of its common stock from the initial purchasers of the Notes in privately negotiated transactions at a price of $74.53 per share, the closing price of Dycom’s common stock on September 9, 2015. The additional $10.0 million spent during the three months ended October 24, 2015 was for shares repurchased under an existing authorization. During the three months ended April 23, 2016, the Company repurchased 1,557,354 shares for $100.0 million at an average price of $64.21 per share also under authorized share repurchase programs. All shares repurchased during fiscal 2016 have been canceled. Upon cancellation, the excess over par value is recorded as a reduction in additional paid-in capital until the balance is reduced to zero, with any additional excess recorded to retained earnings. During the three months ended April 23, 2016, $17.1 million was charged to retained earnings related to the Company’s share repurchases. During the quarter ended April 23, 2016, the Company exhausted its previously authorized stock repurchase programs. On April 26, 2016, the Company announced that its Board of Directors authorized an additional $100 million to repurchase shares of the Company's outstanding common stock through October 2017 in open market or private transactions. As of May 26, 2016, $100 million remained available for repurchase. See Note 18, Subsequent Events, for information regarding the share repurchase authorization. Restricted Stock Tax Withholdings - During the nine months ended April 23, 2016 and April 25, 2015, the Company withheld 156,362 shares and 138,535 shares, respectively, totaling $12.1 million and $4.3 million, respectively, to meet payroll tax withholdings obligations arising from the vesting of restricted share units. All shares withheld have been canceled. Shares withheld for tax withholdings do not reduce the Company’s total share repurchase authority. |
Stock-Based Awards |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Awards | Stock-Based Awards The Company has certain stock-based compensation plans which provide for the grants of stock-based awards, including stock options, restricted shares, performance shares, restricted share units, performance share units, and stock appreciation rights. Compensation expense for stock-based awards is based on fair value at the measurement date and fluctuates over time as a result of the vesting period of the stock-based awards and Company’s performance, as measured by criteria set forth in the performance-based awards. Expense is included in general and administrative expenses in the condensed consolidated statements of operations and the amount of expense ultimately recognized is based on the number of awards that actually vest. Accordingly, future stock-based compensation expense may vary from fiscal year to fiscal year. Stock-based compensation expense and the related tax benefit recognized related to stock options and restricted share units during the three and nine months ended April 23, 2016 and April 25, 2015 were as follows (dollars in thousands):
The performance criteria for targets awards are based on the Company’s fiscal year operating earnings (adjusted for certain amounts) as a percentage of contract revenues and its fiscal year operating cash flow level. Additionally, certain awards include three-year performance goals that, if met, result in supplemental shares awarded. For performance-based restricted share units (“Performance RSUs”), the Company evaluates compensation expense quarterly and recognizes expense for performance-based awards only if it determines it is probable that performance criteria for the awards will be met. During the nine months ended April 23, 2016, the Company recognized approximately $5.2 million in stock-based compensation expense in connection with certain performance-based target awards related to the fiscal 2016 performance criteria. In addition, during the nine months ended April 23, 2016, the Company recognized approximately $0.3 million in stock-based compensation expense in connection with supplemental shares for the three-year performance period ending fiscal 2016. In the event the Company determines it is no longer probable that it will achieve certain performance criteria for the awards, it would reverse the associated stock-based compensation expense that it had previously recognized in the period such determination is made. As of April 23, 2016, the Company had total unrecognized compensation expense of $30.3 million related to stock options, time-based restricted share units (“RSUs”) and target Performance RSUs (based on the Company’s estimate of performance goal achievement) of $3.4 million, $9.0 million, and $17.9 million, respectively. This expense will be recognized over a weighted-average number of years of 2.8, 2.8, and 1.6, respectively, based on the average remaining service periods for the awards. As of April 23, 2016, the Company may recognize an additional $6.6 million in compensation expense in future periods if the maximum amount of Performance RSUs is earned based on certain performance goals being met. Stock Options The following table summarizes stock option award activity during the nine months ended April 23, 2016:
RSUs and Performance RSUs The following table summarizes RSU and Performance RSU award activity during the nine months ended April 23, 2016:
The total amount of granted Performance RSUs presented above consists of 170,304 target shares granted to officers and employees and 67,905 supplemental shares granted to officers of the Company and its subsidiaries. During fiscal 2016, the Company canceled approximately 169,790 supplemental shares of Performance RSUs outstanding as of July 25, 2015, as a result of fiscal 2015 performance criteria for attaining supplemental shares not being met. The total amount of Performance RSUs outstanding as of April 23, 2016 consists of 503,848 target shares and 125,290 supplemental shares. |
Related Party Transactions |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | Related Party Transactions The Company leases certain administrative offices and equipment as well as pays for certain subcontracting services and materials from officers of its subsidiaries and entities related to officers of its subsidiaries. Expenses under these arrangements for the three and nine months ended April 23, 2016 and April 25, 2015 were as follows (dollars in thousands):
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Concentration of Credit Risk |
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Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration of Credit Risk | Concentration of Credit Risk The Company’s customer base is highly concentrated, with its top five customers accounting for approximately 68.8% and 60.1% of its total contract revenues during the nine months ended April 23, 2016 and April 25, 2015, respectively. Customers whose contract revenues exceeded 10% of total contract revenue during the three or nine months ended April 23, 2016 or April 25, 2015 were as follows:
Customers whose combined amounts of trade accounts receivable and costs and estimated earnings in excess of billings, net (“CIEB, net”) exceeded 10% of total combined trade receivables and CIEB, net as of April 23, 2016 or July 25, 2015 were as follows: AT&T Inc. - $161.9 million, or 23.0% as of April 23, 2016 and $101.7 million, or 17.7% as of July 25, 2015; Comcast Corporation - $92.0 million, or 13.1% as of April 23, 2016 and $63.0 million, or 11.0% as of July 25, 2015; CenturyLink, Inc. - $79.4 million, or 11.3% as of April 23, 2016 and $80.1 million, or 14.0% as of July 25, 2015; Windstream Corporation - $73.9 million, or 10.5% as of April 23, 2016 and $47.8 million, or 8.3% as of July 25, 2015; and Verizon Communications Inc. - $71.6 million, or 10.2% as of April 23, 2016 and $50.8 million, or 8.9% as of July 25, 2015. Additionally, another customer had $84.3 million, or 12.0% as of April 23, 2016 and $64.5 million, or 11.2% as of July 25, 2015; The Company believes that none of its significant customers were experiencing financial difficulties that would materially impact the collectability of the Company’s trade accounts receivable and costs in excess of billings as of April 23, 2016. See Note 4, Accounts Receivable, and Note 5, Costs and Estimated Earnings in Excess of Billings, for additional information regarding the Company’s trade accounts receivable and costs and estimated earnings in excess of billings. |
Commitments and Contingencies |
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Apr. 23, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In May 2013, CertusView Technologies, LLC (“CertusView”), a wholly-owned subsidiary of the Company, filed suit against S & N Communications, Inc. and S & N Locating Services, LLC in the United States District Court for the Eastern District of Virginia alleging infringement of certain United States patents. In January 2015, the District Court granted defendants’ motion for judgment on the pleadings for failure to claim patent-eligible subject matter, and entered final judgment on those claims the same day. CertusView filed a Notice of Appeal in February 2015 with the Court of Appeals for the Federal Circuit. In May 2015, the District Court re-opened the case to allow defendants to proceed with inequitable conduct counterclaims. In July 2015, the Court of Appeals dismissed the appeal in that court pending resolution of proceedings in the District Court. A bench trial in the District Court on the inequitable conduct counterclaims whereby defendants are seeking additional grounds to find the patents unenforceable took place in March 2016 and post-trial briefs were filed with the District Court on April 22, 2016. An unfavorable outcome for the inequitable conduct counterclaims may result in an award of attorneys’ fees, costs, and expenses. The Company believes the counterclaims to be without merit and intends to vigorously defend itself against these counterclaims and appeal the District Court’s ruling with respect to the patent-eligible subject matter. From time to time, the Company is party to various other claims and legal proceedings. It is the opinion of management, based on information available at this time, that such other pending claims or proceedings will not have a material effect on its financial statements. For claims within the Company’s insurance program, it retains the risk of loss, up to certain limits, for matters related to automobile liability, general liability (including damages associated with underground facility locating services), workers’ compensation, and employee group health. The Company has established reserves that it believes to be adequate based on current evaluations and experience with these types of claims. For these claims, the effect on the Company’s financial statements is generally limited to the amount needed to satisfy insurance deductibles or retentions. Commitments Performance Bonds and Guarantees - The Company has obligations under performance and other surety contract bonds related to certain of its customer contracts. Performance bonds generally provide a customer with the right to obtain payment and/or performance from the issuer of the bond if the Company fails to perform its contractual obligations. As of April 23, 2016 and July 25, 2015, the Company had $242.0 million and $294.9 million of outstanding performance and other surety contract bonds, respectively. The Company periodically guarantees certain obligations of its subsidiaries, including obligations in connection with obtaining state contractor licenses and leasing real property and equipment. Letters of Credit - The Company has standby letters of credit issued under its Credit Agreement as part of its insurance program. These standby letters of credit collateralize the Company’s obligations to its insurance carriers in connection with the settlement of potential claims. As of April 23, 2016 and July 25, 2015, the Company had $57.7 million and $54.4 million, respectively, of outstanding standby letters of credit issued under the Credit Agreement. |
Subsequent Events (Notes) |
9 Months Ended |
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Apr. 23, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 26, 2016, the Company announced that its Board of Directors authorized an additional $100 million to repurchase shares of the Company's outstanding common stock through October 2017. As of May 26, 2016, $100 million remained available for repurchases. On May 20, 2016, the Company and certain of its subsidiaries amended the Credit Agreement, dated as of December 3, 2012 (as amended as of May 20, 2016, April 24, 2015 and September 9, 2015, the “Amended Credit Agreement”), with the various lenders named therein. The amendment, among other things, establishes an additional term loan in the aggregate principal amount of $200.0 million thereby increasing the term loan facility to $350.0 million. The additional term loan is subject to terms and conditions substantially similar to those applicable to the existing term loan. After the incurrence of the additional term loan, the amendment provides the ability for the Company to enter into one or more incremental facilities, either by increasing the revolving commitments under the Credit Agreement and/or in the form of term loans, up to the greater of (i) $150.0 million and (ii) an amount such that, after giving effect to such incremental facility on a pro forma basis (assuming that the amount of the incremental commitments is fully drawn and funded), the consolidated senior secured leverage ratio (as defined in the Amended Credit Agreement) does not exceed 2.25 to 1.00. The Company intends to use the proceeds of the additional term loan to pay down revolving loans, thus increasing availability under its revolving facility in the Amended Credit Agreement, and for general corporate purposes. The amendment also amends certain covenants to provide, among other things, more flexibility to the Company to incur debt and to make capital expenditures. |
Basis of Presentation and Accounting Policies (Policies) |
9 Months Ended |
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Apr. 23, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Dycom Industries, Inc. (“Dycom” or the “Company”) is a leading provider of specialty contracting services throughout the United States and in Canada. The Company provides program management, engineering, construction, maintenance and installation services for telecommunications providers, underground facility locating services for various utilities, including telecommunications providers, and other construction and maintenance services for electric and gas utilities. The accompanying unaudited condensed consolidated financial statements include the results of Dycom and its subsidiaries, all of which are wholly-owned. All intercompany accounts and transactions have been eliminated and the financial statements reflect all adjustments, consisting of only normal recurring accruals that are, in the opinion of management, necessary for a fair presentation of such statements. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. Operating results for the interim period are not necessarily indicative of the results expected for any other interim period or for the full fiscal year. These condensed consolidated financial statements and accompanying notes should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this report and the Company’s audited financial statements for the year ended July 25, 2015 included in the Company’s Annual Report on Form 10-K for the year ended July 25, 2015, filed with the SEC on September 4, 2015. |
Segment Information | Segment Information – The Company operates in one reportable segment. Its services are provided by its operating segments on a decentralized basis. Each operating segment consists of a subsidiary (or in certain instances, the combination of two or more subsidiaries). Management of the operating segments report to the Company’s Chief Operating Officer who reports to the Chief Executive Officer, the chief operating decision maker. All of the Company’s operating segments have been aggregated into one reportable segment based on their similar economic characteristics, nature of services and production processes, type of customers, and service distribution methods. The Company’s operating segments provide services throughout the United States and in Canada. Revenues from services provided in Canada were approximately $0.9 million and $5.5 million during the three and nine months ended April 23, 2016, respectively, and $2.0 million and $9.8 million during the three and nine months ended April 25, 2015, respectively. The Company had no material long-lived assets in Canada as of April 23, 2016 or July 25, 2015. |
Accounting Period | Accounting Period – The Company’s fiscal year ends on the last Saturday in July. As a result, each fiscal year consists of either fifty-two weeks or fifty-three weeks of operations (with an additional week of operations occurring in the fourth quarter). Fiscal 2015 contained fifty-two weeks and fiscal 2016 will contain fifty-three weeks of operations. |
Use of Estimates | Use of Estimates – The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. These estimates are based on the Company’s historical experience and management’s understanding of current facts and circumstances. At the time they are made, the Company believes that such estimates are fair when considered in conjunction with the consolidated financial position and results of operations taken as a whole. However, actual results could differ materially from those estimates. There have been no material changes to the Company’s significant accounting policies and critical accounting estimates described in the Company’s Annual Report on Form 10-K for the year ended July 25, 2015. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition. The Company performs a majority of its services under master service agreements and other agreements that contain customer-specified service requirements, such as discrete pricing for individual tasks. Revenue is recognized under these arrangements based on units-of-delivery as each unit is completed. The remainder of the Company’s services, representing less than 10% of its contract revenues during the nine months ended April 23, 2016 and April 25, 2015, are performed under contracts using the cost-to-cost measures of the percentage of completion method of accounting. Revenue is recognized under these arrangements based on the ratio of contract costs incurred to date to total estimated contract costs. There were no material amounts of unapproved change orders or claims recognized during the nine months ended April 23, 2016 or April 25, 2015. The current asset “Costs and estimated earnings in excess of billings” represents revenues recognized in excess of amounts billed. The current liability “Billings in excess of costs and estimated earnings” represents billings in excess of revenues recognized. Application of the percentage of completion method of accounting requires the use of estimates of costs to be incurred for the performance of the contract. The cost estimation process is based on the knowledge and experience of the Company’s project managers and financial professionals. Factors that the Company considers in estimating the work to be completed and ultimate contract recovery include the availability and productivity of labor, the nature and complexity of the work to be performed, the effect of change orders, the availability of materials, the effect of any delays in performance and the recoverability of any claims. Changes in job performance, job conditions, estimated profitability, and final contract settlements may result in changes to costs and income and their effects are recognized in the period in which the revisions are determined. The Company accrues the entire amount of an estimated loss at the time the loss on a contract becomes known for contracts using the cost-to-cost measures of the percentage of completion method of accounting. During the nine months ended April 23, 2016 and April 25, 2015, there was no material impact to the Company's results of operations due to changes in contract estimates. |
Restricted Cash | Restricted Cash – As of April 23, 2016 and July 25, 2015, the Company had approximately $5.0 million and $4.5 million, respectively, in restricted cash, which is held as collateral in support of the Company’s insurance obligations. Restricted cash is included in other assets in the condensed consolidated balance sheets and changes in restricted cash are reported in cash flows used in investing activities in the condensed consolidated statements of cash flows. |
Business Combinations | Business Combinations – The Company accounts for business combinations under the acquisition method of accounting. The purchase price of each business acquired is allocated to the tangible and intangible assets acquired and the liabilities assumed based on information regarding their respective fair values on the date of acquisition. Any excess of the purchase price over the fair value of the separately identifiable assets acquired and the liabilities assumed is allocated to goodwill. Management determines the fair values used in purchase price allocations for intangible assets based on historical data, estimated discounted future cash flows, contract backlog amounts, if applicable, and expected royalty rates for trademarks and trade names, as well as certain other information. The valuation of assets acquired and liabilities assumed requires a number of judgments and is subject to revision as additional information about the fair value of assets and liabilities becomes available. Additional information, which existed as of the acquisition date but unknown to the Company at that time, may become known during the remainder of the measurement period, a period not to exceed twelve months from the acquisition date. Adjustments to the preliminary purchase price allocation, if necessary, are recorded to the value of the assets acquired and liabilities assumed, with a corresponding adjustment to goodwill. Acquisition costs are expensed as incurred. The results of operations of businesses acquired are included in the accompanying condensed consolidated financial statements from their dates of acquisition. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments – The Company’s financial instruments primarily consist of cash and equivalents, restricted cash, accounts receivable, income taxes receivable and payable, accounts payable, certain accrued expenses, and long-term debt. The carrying amounts of these items approximate fair value due to their short maturity, except for certain of the Company’s outstanding long-term debt, which is based on observable market-based inputs (Level 2). See Note 10, Debt, for further information regarding the fair value of such financial instruments. The Company’s cash and equivalents are based on quoted market prices in active markets for identical assets (Level 1) as of April 23, 2016 and July 25, 2015. During the three and nine months ended April 23, 2016 and April 25, 2015, the Company had no material nonrecurring fair value measurements of assets or liabilities subsequent to their initial recognition. |
Other Assets | Other Assets – As of April 23, 2016 and July 25, 2015, other non-current assets consist of deferred financing costs of $7.2 million and $11.6 million, respectively, insurance recoveries/receivables related to accrued claims of $5.9 million and $8.9 million, respectively, as well as long-term deposits, prepaid discounts, and other non-current assets totaling $17.3 million and $13.6 million, respectively. As of April 23, 2016 and July 25, 2015, other non-current assets also included $4.0 million for an investment in nonvoting senior units of a former customer, which is accounted for using the cost method. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements There have been no changes in the expected dates of adoption or estimated effects on the Company’s consolidated financial statements of recently issued accounting pronouncements from those disclosed in the Company’s Annual Report on Form 10-K. Accounting standards adopted during the period covered in this Quarterly Report on Form 10-Q and recently issued accounting pronouncements are discussed below. Recently Adopted Accounting Standards Discontinued Operations - In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). ASU 2014-08 changes the criteria for reporting discontinued operations. In accordance with ASU 2014-08, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations only if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. ASU 2014-08 also requires expanded disclosures about the assets, liabilities, income, and expenses of discontinued operations as well as disclosure of the pre-tax income arising from a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. The Company adopted ASU 2014-08 in fiscal 2016 and it did not have a material effect on the Company’s consolidated financial statements. Accounting Standards Not Yet Adopted Stock Compensation - In March 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-09, Compensation - Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). ASU 2016-09 includes provisions intended to simplify accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under ASU 2016-09, all excess tax benefits (or tax deficiencies) will be recognized as income tax benefit (or expense) in the statement of operations. Additionally, when applying the treasury stock method for computing diluted earnings per share under ASU 2016-09 the assumed proceeds will not include any windfall tax benefits, resulting in equity awards which may result in a greater number of dilutive shares outstanding. Further, excess tax benefits will be classified along with other income tax cash flows as an operating activity. ASU 2016-09 also permits withholding up to the maximum statutory tax rate in applicable jurisdictions as the threshold to qualify for equity classification. ASU 2016-09 will be effective for the Company in fiscal 2018 and interim reporting periods within that year. Early adoption is permitted as of the beginning of an interim or annual reporting period with all adjustments to be reflected as of the beginning of the fiscal year of adoption. The Company is currently evaluating the effect of the adoption of this guidance on the Company’s consolidated financial statements. Revenue Recognition - In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) requiring entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”) which defers the effective date for ASU 2014-09. As such, ASU 2014-09 will be effective for the Company beginning in fiscal 2019 and interim reporting periods within that year, using either the retrospective or cumulative effect transition method. The Company is currently evaluating the transition methods and the effect of the adoption of this guidance on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-08”), which clarifies the implementation guidance provided in ASU 2014-09 on principal versus agent considerations. Additionally, in April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”), which clarifies the implementation guidance in ASU 2014-09 on licensing and identifying performance obligations. Furthermore, in May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which clarifies implementation guidance in ASU 2014-09 on assessing collectability, noncash consideration, presentation of sales tax and completed contracts and contract modifications at transition. ASU 2016-08, ASU 2016-10 and ASU 2016-12 must be adopted concurrently with ASU 2014-09. The Company is currently evaluating the transition methods and the effect of the adoption of this guidance on the Company’s consolidated financial statements. Leases - In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The new guidance requires lessees to recognize assets and liabilities, initially measured at the present value of the lease payments, on the balance sheet for the rights and obligations created by long-term finance and operating leases. For finance leases, a lessee is required to recognize interest on the lease liability separately from amortization of the right-of-use asset in the statement of comprehensive income. Repayments of the principal portion of a finance lease liability should be classified within financing activities and payments of interest on a finance lease liability and variable lease payments should be classified within operating activities in the statement of cash flows. For operating leases, a lessee is required to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term generally on a straight-line basis. All cash payments for operating leases should be classified within operating activities in the statement of cash flows. ASU 2016-02 will be effective for the Company in fiscal 2020 and interim reporting periods within that year. The Company is currently evaluating the effect of the adoption of this guidance on the Company’s consolidated financial statements. Income Taxes - In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”). ASU 2015-17 eliminates the current requirement for an entity to separate deferred income tax liabilities and assets into current and non-current amounts in a classified statement of financial position. To simplify the presentation of deferred income taxes, the amendments in ASU 2015-17 require that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position. ASU 2015-17 will be effective for the Company in fiscal 2018 and interim reporting periods within that year. Early adoption is permitted as of the beginning of an interim or annual reporting period. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements other than with respect to the presentation of deferred tax assets and liabilities within its consolidated balance sheets. Business Combinations - In September 2015, the FASB issued Accounting Standards Update No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments (“ASU 2015-16”). ASU 2015-16 replaces the requirement for an acquirer in a business combination to retrospectively adjust provisional amounts recognized at the acquisition date with a corresponding adjustment to goodwill when measurement period adjustments are identified. The new guidance requires an acquirer to recognize adjustments in the reporting period in which the adjustment amounts are determined. The acquirer must record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. Additionally, the acquirer must present separately on the face of the income statement, or disclose in the notes, the portion of the amount recorded in current period earnings by line item that would have been recorded in previous reporting periods if the adjustments had been recognized as of the acquisition date. ASU 2015-16 will be effective for the Company in fiscal 2017 and interim reporting periods within that year. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements. |
Computation of Earnings Per Common Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share Reconciliation | The table below sets forth the computation of basic and diluted earnings per common share. Basic earnings per common share is computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per common share includes the weighted average number of common shares outstanding during the period and dilutive potential common shares arising from the Company’s stock-based awards, senior convertible notes and warrants if their inclusion is dilutive under the treasury stock method. Common stock equivalents related to stock-based awards, senior convertible notes and warrants are excluded from diluted earnings per common share calculations if their effect would be anti-dilutive.
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | The weighted-average number of common shares outstanding used in the computation of diluted earnings per common share does not include the effect of the following instruments because their inclusion would have been anti-dilutive:
*See Note 10, Debt, for additional information related to the Company’s senior convertible notes and warrant transactions. |
Acquisitions (Tables) |
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TelCom Construction, Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Preliminary Purchase Price Allocation | The preliminary purchase price allocation of TelCom is as follows (dollars in millions):
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Accounts Receivable (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable | Accounts receivable consisted of the following:
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Costs and Estimated Earnings in Excess of Billings (Tables) |
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Contractors [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Costs and Estimated Earnings in Excess of Billings, Net | Costs and estimated earnings in excess of billings (“CIEB”) include revenue for services from contracts based on units-ofdelivery and cost-to-cost measures of the percentage of completion method of accounting. Amounts consisted of the following:
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Property and Equipment (Tables) |
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Schedule of Property and Equipment | Property and equipment consisted of the following:
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Goodwill and Intangible Assets (Tables) |
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Schedule of Goodwill | Changes in the carrying amount of goodwill for fiscal 2016 were as follows:
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Schedule of Intangible Assets | The Company’s intangible assets consisted of the following:
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Future Amortization Expense | total amortization expense for existing finite-lived intangible assets for the remainder of fiscal 2016 and each of the five succeeding fiscal years and thereafter is as follows:
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Other Accrued Liabilities (Tables) |
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Apr. 23, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Accrued Liabilities | Other accrued liabilities consisted of the following:
Income tax payable of less than $0.1 million and $8.9 million was included within other current liabilities in the above table as of April 23, 2016 and July 25, 2015, respectively. |
Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 23, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding Indebtedness | The Company’s outstanding indebtedness consisted of the following:
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Convertible Debt | The Notes consist of the following components:
(1) Issuance costs of approximately $15.1 million related to the Notes included the initial purchasers’ discount of approximately $13.3 million and approximately $1.8 million paid to third parties. Approximately $10.1 million of issuance costs paid to the initial purchasers of the Notes was allocated to the liability component and recorded as a contra-liability, presented net against the carrying amount of the Notes on the Company’s condensed consolidated balance sheet, of which $9.4 million remains unamortized as of April 23, 2016. Approximately $1.3 million of issuance costs paid to third parties was allocated to the liability component and recorded as deferred costs within other assets in the Company’s condensed consolidated balance sheets. Debt issuance costs attributable to the liability component are amortized to interest expense on the effective interest rate method over the term of the Notes. During the three and nine months ended April 23, 2016, the Company recorded $0.3 million and $0.8 million, respectively, related to the amortization of debt issuance costs of the Notes. (2) Approximately $3.6 million of issuance costs paid to the initial purchasers of the Notes and third parties was allocated to the equity component and recorded net against the equity component in stockholders’ equity on the condensed consolidated balance sheets. |
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Schedule Interest Rates for the Credit Agreement | Borrowings under the Credit Agreement bear interest at rates described below based upon the Company’s consolidated leverage ratio, which is the ratio of the Company’s consolidated total funded debt to its trailing twelve month consolidated EBITDA, as defined by the Credit Agreement. In addition, the Company incurs certain fees for unused balances and letters of credit at the rates described below, also based upon the Company’s consolidated leverage ratio.
*The agent’s base rate is described in the Credit Agreement as the highest of (i) the administrative agent’s prime rate, (ii) the Federal Funds Rate plus 0.50%, and (iii) the Eurodollar rate plus 1.00%, plus an applicable margin. The weighted average interest rates and fees for balances under the Credit Agreement as of April 23, 2016 and July 25, 2015 were as follows:
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Other Income, Net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 23, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Income, Net | The components of other income, net, were as follows:
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Capital Stock (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 23, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share Repurchases Under Current and Previously Authorized Share Repurchase Programs | Repurchases of Common Stock - The Company made the following share repurchases during fiscal 2015 and the interim periods of fiscal 2016:
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Stock-Based Awards (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 23, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-based Compensation Expense and Related Tax Benefit Recognized | Stock-based compensation expense and the related tax benefit recognized related to stock options and restricted share units during the three and nine months ended April 23, 2016 and April 25, 2015 were as follows (dollars in thousands):
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Schedule of Share-based Compensation, Stock Options Award Activity | The following table summarizes stock option award activity during the nine months ended April 23, 2016:
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Schedule of Share-based Compensation, RSU and Performance RSU Activity | The following table summarizes RSU and Performance RSU award activity during the nine months ended April 23, 2016:
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Related Party Transactions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 23, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | Expenses under these arrangements for the three and nine months ended April 23, 2016 and April 25, 2015 were as follows (dollars in thousands):
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Concentration of Credit Risk (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 23, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule that Represents A Significant Portion of the Company’s Customer Base and Each Over 10% of Total Revenue | Customers whose contract revenues exceeded 10% of total contract revenue during the three or nine months ended April 23, 2016 or April 25, 2015 were as follows:
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Acquisitions Purchase Price Allocation of TelCom Construction, Inc Acquisition (Details) - USD ($) $ in Thousands |
Apr. 23, 2016 |
Aug. 07, 2015 |
Jul. 25, 2015 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 281,448 | $ 271,653 | |
TelCom Construction, Inc. | |||
Business Acquisition [Line Items] | |||
Accounts receivable | $ 11,500 | ||
Costs and estimated earnings in excess of billings | 11,800 | ||
Inventories and other current assets | 6,100 | ||
Property and equipment | 10,800 | ||
Goodwill | 9,700 | ||
Total assets | 67,900 | ||
Accounts payable | 10,000 | ||
Accrued and other liabilities | 9,100 | ||
Total liabilities | 19,100 | ||
Net Assets Acquired | 48,800 | ||
Customer relationships | TelCom Construction, Inc. | |||
Business Acquisition [Line Items] | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 16,200 | ||
Trade names | TelCom Construction, Inc. | |||
Business Acquisition [Line Items] | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 1,800 |
Accounts Receivable (Details) - USD ($) $ in Thousands |
Apr. 23, 2016 |
Jul. 25, 2015 |
---|---|---|
Receivables [Abstract] | ||
Contract billings | $ 327,106 | $ 292,029 |
Retainage | 30,391 | 24,321 |
Total | 357,497 | 316,350 |
Less: allowance for doubtful accounts | (2,179) | (1,216) |
Accounts receivable, net | $ 355,318 | $ 315,134 |
Costs and Estimated Earnings in Excess of Billings (Details) - USD ($) $ in Thousands |
Apr. 23, 2016 |
Jul. 25, 2015 |
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Contractors [Abstract] | ||
Costs incurred on contracts in progress | $ 308,196 | $ 240,077 |
Estimated to date earnings | 89,180 | 72,446 |
Total costs and estimated earnings | 397,376 | 312,523 |
Less: billings to date | (50,277) | (54,689) |
Total costs in excess of billings | 347,099 | 257,834 |
Costs and estimated earnings in excess of billings | 358,236 | 274,730 |
Billings in excess of costs and estimated earnings | (11,137) | (16,896) |
Total costs in excess of billings | $ 347,099 | $ 257,834 |
Goodwill and Intangible Assets - Changes in the Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands |
9 Months Ended | |
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Apr. 23, 2016 |
Jul. 25, 2015 |
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Goodwill [Roll Forward] | ||
Goodwill, gross, beginning balance | $ 467,420 | |
Goodwill, purchase price allocation adjustments | 101 | |
Goodwill acquisitions | 9,694 | |
Goodwill, gross, ending balance | 477,215 | |
Accumulated impairment losses | (195,767) | $ (195,767) |
Goodwill | $ 281,448 | $ 271,653 |
Goodwill and Intangible Assets - Future Amortization Expense (Details) $ in Thousands |
Apr. 23, 2016
USD ($)
|
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Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Three months ending July 30, 2016 | $ 4,883 |
2017 | 17,419 |
2018 | 15,125 |
2019 | 12,771 |
2020 | 11,861 |
2021 | 10,333 |
Thereafter | 47,800 |
Total | $ 120,192 |
Other Accrued Liabilities (Details) - USD ($) $ in Thousands |
Apr. 23, 2016 |
Jul. 25, 2015 |
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Payables and Accruals [Abstract] | ||
Accrued payroll and related taxes | $ 20,090 | $ 18,673 |
Accrued employee benefit and incentive plan costs | 28,855 | 29,528 |
Accrued construction costs | 25,218 | 26,395 |
Other current liabilities | 15,499 | 23,810 |
Total other accrued liabilities | 89,662 | 98,406 |
Income tax payable | $ 100 | $ 8,900 |
Debt Senior Credit Agreement (Details) |
3 Months Ended | ||
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Sep. 09, 2015
USD ($)
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Apr. 23, 2016
USD ($)
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Jul. 25, 2015
USD ($)
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Line of Credit Facility [Line Items] | |||
Debt Instrument, Covenant Compliance, Consolidated Leverage Ratio, Maximum | 3.50 | ||
Letters of credit outstanding amount | $ 57,700,000 | $ 54,400,000 | |
Debt Instrument, Covenant Compliance, Consolidated Interest Coverage Ratio, Maximum | 3.00 | ||
Additional borrowing availability | $ 178,300,000 | 300,300,000 | |
Standby Letters of Credit | |||
Line of Credit Facility [Line Items] | |||
Line of credit current borrowing capacity | $ 200,000,000 | ||
Letters of credit outstanding amount | $ 57,700,000 | $ 54,400,000 | |
Credit Agreement - Term Loan (matures April 2020) | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Face Amount | $ 150,000,000 | ||
Debt Instrument, Covenant Compliance, Consolidated Leverage Ratio, Maximum | 2.25 | ||
Credit Agreement - Revolving facility (matures April 2020) | |||
Line of Credit Facility [Line Items] | |||
Line of credit current borrowing capacity | $ 450,000,000 |
Debt Interest Rates at Period End (Details) |
9 Months Ended | 12 Months Ended |
---|---|---|
Apr. 23, 2016 |
Jul. 25, 2015 |
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Standby Letters of Credit | ||
Line of Credit Facility [Line Items] | ||
Debt Instrument, Interest Rate at Period End | 1.75% | 1.75% |
Credit Agreement - Term Loan (matures April 2020) | ||
Line of Credit Facility [Line Items] | ||
Debt Instrument, Interest Rate at Period End | 2.42% | 1.94% |
Credit Agreement - Revolving facility (matures April 2020) | ||
Line of Credit Facility [Line Items] | ||
Debt Instrument, Interest Rate at Period End | 2.26% | 2.02% |
Unutilized commitment fee (in percent) | 0.35% | 0.35% |
Debt Convertible Note Hedge and Warrant Transactions (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
9 Months Ended | ||
---|---|---|---|
Sep. 15, 2015 |
Apr. 23, 2016 |
Apr. 25, 2015 |
|
Debt Instrument [Line Items] | |||
Payments for Hedge, Financing Activities | $ 115,818 | $ 0 | |
Proceeds from sale of warrants | $ 74,690 | $ 0 | |
Convertible Note Hedge [Member] | |||
Debt Instrument [Line Items] | |||
Derivative, Number of Instruments Held | 5,006 | ||
Debt Instrument, Convertible, Conversion Price | $ 96.89 | ||
Payments for Hedge, Financing Activities | $ 115,800 | ||
Deferred Tax Liabilities, Derivatives | 43,400 | ||
Deferred Tax Assets, Derivative Instruments | $ 43,200 | ||
0.75% Convertible Senior Notes Due 2021 | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Convertible, Conversion Price | $ 96.89 | ||
Payments for Hedge, Financing Activities | $ 41,100 | ||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 5,006 | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 130.43 | ||
Proceeds from sale of warrants | $ 74,700 |
Debt Senior Subordinated Notes - Loss on Debt Extinguishment (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 15, 2015 |
Oct. 24, 2015 |
Apr. 23, 2016 |
Apr. 25, 2015 |
Jul. 25, 2015 |
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Debt Instrument [Line Items] | |||||
Debt and Capital Lease Obligations | $ 733,327 | $ 525,591 | |||
Loss on debt extinguishment | (16,260) | $ 0 | |||
Write-off of deferred financing fees and premium on long-term debt | 2,017 | $ 0 | |||
Seven Point One Two Five Percent Senior Subordinated Notes Due 2021 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt and Capital Lease Obligations | $ 0 | $ 277,500 | |||
Debt, interest rate (in percent) | 0.00% | 7.125% | |||
Repayments of Debt | $ 296,600 | ||||
Debt Instrument, Increase, Accrued Interest | $ 4,900 | ||||
Redemption Premium | $ 14,200 | ||||
Debt Instrument, Redemption Price, Percentage | 103.563% | ||||
Loss on debt extinguishment | 16,300 | ||||
Gains (Losses) on Extinguishment of Debt, before Write off of Deferred Debt Issuance Cost | 6,500 | ||||
Write-off of deferred financing fees and premium on long-term debt | $ 4,900 |
Income Taxes (Details) - USD ($) $ in Millions |
Apr. 23, 2016 |
Jul. 25, 2015 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Income taxes receivable | $ 15.3 | $ 2.1 |
Income tax payable | 0.1 | 8.9 |
Unrecognized tax benefits | 2.3 | 2.3 |
Payment of interest and penalties accrued | $ 1.0 | $ 0.9 |
Other Income, Net (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 23, 2016 |
Apr. 25, 2015 |
Apr. 23, 2016 |
Apr. 25, 2015 |
|
Other Income and Expenses [Abstract] | ||||
Gain on sale of fixed assets | $ 4,061 | $ 3,067 | $ 6,213 | $ 6,249 |
Miscellaneous income, net | 262 | 404 | 653 | 752 |
Total other income, net | $ 4,323 | $ 3,471 | $ 6,866 | $ 7,001 |
Stock-Based Awards - Tax Benefit Recognized (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 23, 2016 |
Apr. 25, 2015 |
Apr. 23, 2016 |
Apr. 25, 2015 |
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 3,892 | $ 3,219 | $ 12,600 | $ 10,773 |
Tax benefit recognized in the statement of operations | $ 1,467 | $ 1,248 | $ 4,809 | $ 4,221 |
Related Party Transactions (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 23, 2016 |
Apr. 25, 2015 |
Apr. 23, 2016 |
Apr. 25, 2015 |
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Real property and equipment leases | ||||
Related Party Transaction [Line Items] | ||||
Total expense under lease agreements | $ 622 | $ 648 | $ 2,060 | $ 1,952 |
Subcontractors and materials expense | ||||
Related Party Transaction [Line Items] | ||||
Total expense under lease agreements | $ 1,064 | $ 792 | $ 2,915 | $ 1,981 |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
Apr. 23, 2016 |
Jul. 25, 2015 |
---|---|---|
Loss Contingencies [Line Items] | ||
Letters of credit outstanding amount | $ 57.7 | $ 54.4 |
Standby Letters of Credit | ||
Loss Contingencies [Line Items] | ||
Letters of credit outstanding amount | 57.7 | 54.4 |
Performance Guarantee and Surety Bond | ||
Loss Contingencies [Line Items] | ||
Outstanding performance and other surety contract bonds | $ 242.0 | $ 294.9 |
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