Investor Presentation
September 2017
Exhibit 99.1
2
Forward Looking Statements and
Non-GAAP Information
This presentation contains “forward-looking statements”. Other than statements of historical facts, all statements contained in
this presentation, including statements regarding the Company’s future financial position, future revenue, prospects, plans and
objectives of management, are forward-looking statements. Words such as “outlook,” “believe,” “expect,” “anticipate,”
“estimate,” “intend,” “should,” “could,” “project,” and similar expressions, as well as statements in future tense, identify
forward-looking statements. You should not consider forward-looking statements as a guarantee of future performance or
results. Forward-looking statements are based on information available at the time those statements are made and/or
management’s good faith belief at that time with respect to future events. Such statements are subject to risks and
uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the
forward-looking statements. Important factors, assumptions, uncertainties, and risks that could cause such differences are
discussed in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on
September 1, 2017 and other filings with the SEC. The forward-looking statements in this presentation are expressly qualified in
their entirety by this cautionary statement. The Company undertakes no obligation to update these forward-looking statements
to reflect new information, or events or circumstances arising after such date.
This presentation includes certain “Non-GAAP” financial measures as defined by Regulation G of the SEC. As required by the
SEC, we have provided a reconciliation of those measures to the most directly comparable GAAP measures on the Regulation G
slides included as slides 29 through 35 of this presentation. Non-GAAP financial measures should be considered in addition to,
but not as a substitute for, our reported GAAP results.
3
Nationwide footprint
Operates in all 50 states, Washington, D.C. and in Canada
Over 40 operating subsidiaries and over 14,000 employees
Strong revenue base and customer relationships
Contract revenues of $780.2 million in Q4-17 compared to $789.2
million in Q4-16, organic growth of 4.6%*
Non-GAAP Adjusted EBITDA of $118.0 million, or 15.1% of revenues
in Q4-17, compared to $126.0 million, or 16.0% in Q4-16
Non-GAAP Adjusted Diluted EPS of $1.47 in Q4-17 compared to
$1.64 per share in Q4-16
Solid financial profile
Liquidity of $439.9 million at July 29, 2017, consisting of availability
under our Credit Facility and cash on hand
Fiscal Year Change
In September 2017, changed fiscal year end from July to January
New fiscal year end better aligns the Company's fiscal year with
the planning cycles of the Company's customers
Dycom Overview
See “Regulation G Disclosure” slides 29-35 for a reconciliation of GAAP to Non-GAAP financial measures.
* Organic growth excludes contract revenues of acquired businesses not included for the entire period of Q4-17 and Q4-16, and adjusts for the additional week of operations as a result of
our fiscal calendar year in Q4-16.
Leading supplier of specialty contracting services to telecommunication providers
4
Telecommunications networks fundamental to economic progress
Fiber is the foundation globally for wireline and wireless networks
Consumer demand for bandwidth driving fiber deployments by telecom providers
With a low percentage of total broadband connections provisioned by fiber in U.S.,
significant opportunities for sustained growth
Telecommunication Industry Overview
Source: Organisation for Economic Co-operation and Development (OECD), Broadband Portal (December 2016)
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Massive investment cycle in early stages - total U.S. homes passed with fiber below 20%
(a) Potential of 124.6 million U.S. households (Statista-2015) with estimate that each home will
be passed by two separate telecom providers.
Source: Fiber to the Home Council
188 million
75% of
homes
commercially
viable for
fiber passing
250 million
passings (a) Eventual fiber passings estimated to
be approximately 188 million
30 million fiber passings completed
through 2016 - over a decade in
process
“…that 70% on the -- what we call the Fioptics product, there's -- approximately 15% of that is still just fiber to the
node using copper. So over time, you'll see us going overbuilt to the prem. If you look -- our metrics and we breakdown
metrics very, very concisely by household and product type. And if you look at the product, the prem product, it is a
great product. And so, overtime, you just slowly migrate things and continue to invest in beefing up the density of
fiber in your market.”
Leigh R. Fox, Cincinnati Bell Inc., CEO, President – August 2017
Telecommunication Industry Overview
6
Strong Secular Trend
“IP traffic in North America will reach 85 EB per month by 2021, at a CAGR of 20 percent. Monthly
Internet traffic in North America will generate 11 billion DVDs’ worth of traffic, or 44.7 EB per month.”
“Business IP traffic will grow fastest in North America. Business IP traffic in North America will grow at
a CAGR of 23 percent, a faster pace than the global average of 21 percent.“
Cisco VNI: Forecast and Methodology, 2016–2021 (June 2017)
North America Internet Protocol Traffic vs. GDP Growth
Sources: U.S. Telecom, The Broadband Association; Cisco Visual Networking Index; U.S. National Bureau of Economic Analysis
Strong and stable growth in IP
traffic even in times of GDP decline
7
Industry drivers
Firm and strengthening end market opportunities
Telephone companies deploying FTTH to enable video offerings and 1 gigabit
connections
Cable operators continuing to deploy fiber to small and medium businesses and
enterprises with increasing urgency. Fiber deep deployments to expand capacity, new
build opportunities and overall cable capital expenditures are increasing.
Fiber deployments in contemplation of newly emerging wireless technologies have
begun in many regions of the country and more are expected
Customers are consolidating supply chains creating opportunities for market share
growth and increasing the long-term value of our maintenance business. We are
increasingly providing integrated planning, engineering and design, procurement and
construction and maintenance services for our customers.
Encouraged that industry participants are committed to multi-year capital spending
initiatives; these initiatives are increasing in numbers across a number of customers
8
0
2
4
6
8
10
12
Q2-16 Q2-17 2018 Estimate 2019 Estimate
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Key Driver: FTTx Deployments
“We also have been making great headway with our fiber build. We have the
largest fiber footprint in the country, and we are ahead of the plan to reach our
12.5 million new fiber customer locations FCC commitment by mid-2019. In
fact, by the time it's all said and done, we could be located around 14 million
fiber-to-the-prem customer locations.”
John J. Stephens, AT&T Inc., Senior EVP, CFO – July 2017
Telephone companies are deploying fiber to the home and fiber to the node technologies to
enable video offerings and 1 gigabit connections
Data transmission speeds dramatically increasing
Key customer recently committed to passing millions of new locations with fiber
Sources: AT&T Press Releases and transcripts.
AT&T CenturyLink
Sources: CenturyLink Press Releases, Presentations and transcripts.
AT&T Homes Passed CenturyLink Addressable
Broadband Units > 100 Mbps
“We continue to see higher levels of penetration and growth. We have 40
megabits of higher speeds available. We ended the second quarter with
nearly 9.4 million 40 megabits and higher addressable locations, with more
than 3.8 million 100 megabits in higher addressable locations, representing
an increase of 240,000 and 350,000 addressable locations, respectively, during
the quarter.”
Glen F. Post- CenturyLink, Inc. – CEO, President – August 2017
or more
9
“Well, business services, let's put in perspective, is about a $5.5 billion business. We think that within the small and medium space it
is a $20 billion to $25 billion opportunity within our footprint. In the small business segment it is about 70% of our revenue, 60% of
our growth. We think we have about a 40% market share there. So there is still a lot of room and opportunity in there. The medium-
size business is about a $1 billion business for us right now. We think we have about a 20% market share. And it is growing at the
fastest rate of any of our segments. The enterprise space we have just entered, we have about a 5% -- less than a 5% share there. It is
going gangbusters. We think it is another $13 billion to $15 billion opportunity within -- revenue opportunity within our footprint.”
Neil Smit, Senior EVP & President, CEO, Comcast – March 2017
$5.51 $5.43
$40
$30
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$15
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$25
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$35
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$45
Comcast Charter
($ I
n
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2016 Revenue from Business Services Addressable Market
Key Driver: Fiber to Businesses
1 Year ended December 31, 2016
2 Calculated as the combination of the estimated addressable market given by Charter ($20Bn) and Time Warner Cable ($10Bn) in their respective earnings transcripts prior to their May 2016 merger.
Revenue earned by Comcast and Charter from Business Services totaled $10.9 Billion1 of an Addressable
Market of $70 billion
2
Sources: Comcast and Charter Press Releases and transcripts
10
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
20
00
20
01
20
02
20
03
20
04
20
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Key Driver: Wireless Network Upgrades
“…this integration as you go forward of the wireline networks and the wireless networks, as you get deep fiber
and you need deep fiber for densification in 4G and certainly as you think about getting into 5G, that fiber
asset is important. And what we've looked at and said is, well, if you're going to have that fiber there, how do
you make sure you do it as an asset that can serve multiple uses and not just single use cases, whether that be
wireless backhaul or whether it be a consumer offering or whatever. And so it's really an extension of what we
started in Boston last year. We said we were going to go in and you're going to build a fiber network that serves
multiple needs, whether that's consumer needs, whether that's enterprise buildings, whether it's small
business, whether it's wireless backhaul, smart city applications, whatever. And so as we look at the future, we
believe there is a need for fiber -- significant fiber build.”
Matthew D. Ellis- Verizon Communications Inc., CFO & EVP – September 2017
Wireless carriers are increasing 4G capacity
and augmenting 4G with new 5G
technologies creating growth opportunities
in the near to intermediate term
Carriers enhancing coverage and capacity by
increasing the number of small cells
Emerging wireless technologies require
incremental wireline deployments
A complementary wireline investment
cycle is fundamental to applications
enabled by fully converged
wireless/wireline networks
Growth in Number of Cell Sites¹
1 Source: Industry publications
* Compound Annual Growth Rate (CAGR)
11
Intensely Focused on Telecommunications Market
Contract revenues of $780.2 million for Q4-17 Services Crucial to Customers’ Success
Electric and
Gas Utilities
and Other
Underground
Facility Locating
Telecommunications
Dycom is well-positioned to benefit from future growth opportunities
Outside Plant & Equipment Installation
Premise Equipment Installation
Wireless
Engineering
Underground Facility Locating
91.2%
6.1% 2.7%
12
Local Credibility, National Capability
Dycom headquarters
Primary locations
Subsidiaries Dycom’s Nationwide Presence
13
Focused on High Value Profitable Growth
Anticipate emerging technology trends that drive capital spending
Deliberately target high quality, long-term industry leaders which
generate the vast majority of the industry’s profitable opportunities
Selectively acquire businesses that complement our existing
footprint and enhance our customer relationships
Leverage our scale and expertise to expand margins through best
practices
14
Well Established Customers
Top Customers
Dycom has established relationships with:
Telephone companies
Wireless carriers
Cable television multiple system operators
Electric utilities and others
Customer Revenue Breakdown Q4-17
Blue-chip, investment grade customers comprise a substantial portion of revenue
AT&T
21.0%
CenturyLink
20.1%
Comcast
19.6%
Verizon
10.0%
Windstream
5.0%
Charter
Communications
3.9%
Unnamed
2.1%
Crown Castle
1.3%
Frontier
Communications
1.2%
Level 3
Communications
1.1% All Other
14.7%
15
Durable Customer Relationships
Revenues ($ in millions)
Notes: For comparison purposes, revenues from Verizon Communications Inc. and XO Communications LLC’s fiber-optic network business have been combined for periods prior to
their February 2017 merger. Revenues from Charter Communications, Inc., Time Warner Cable Inc., and Bright House Networks, LLC have also been combined for periods prior to their
May 2016 merger.
-
$100
$200
$300
$400
$500
$600
$700
$800
$900
FY-08 FY-09 FY-10 FY-11 FY-12 FY-13 FY-14 FY-15 FY-16 FY-17
AT&T
Comcast
CenturyLink
Verizon
Windstream
Charter
Unnamed
16
Anchored by Long-Term Agreements
Dycom is party to hundreds of MSA’s and
other arrangements with customers that
extend for periods of one or more years
Generally multiple agreements maintained
with each customer
Master Service Agreements (MSA’s)
Multi-year, multi-million dollar
arrangements covering thousands of
individual work orders
Generally exclusive requirement
contracts
Agreements can at times be negotiated
Majority of contracts are based on units
of delivery
Backlog at $6.016 billion as of Q4-17
compared to $5.470 billion as of Q3-17
Revenue by Contract Type for Fiscal Q4-17
Backlog ($ in millions)
Our backlog estimates represent amounts under master service agreements and other contractual agreements for services
projected to be performed over the terms of the contracts and are based on contract terms, our historical experience with
customers and, more generally, our experience in similar procurements. Backlog is not a measure defined by United States
generally accepted accounting principles; however, it is a common measurement used in our industry. Our methodology for
determining backlog may not be comparable to the methodologies used by others.
Master Service Agreements
Long-term
contracts Short-term
contracts
17
Cash Flow from
Operations
$1,245
Other Cash Flow
$650
Cap-Ex, net
$823
Business
Acquisitions
$597
Share
Repurchases
$455
Sources of Cash Uses of Cash *
Sources and Uses of Cash ($ in millions)
10 Years of Robust Cash Flow Generation
Notes: Amounts represent cumulative cash flow for fiscal 2008 – fiscal 2017; See “Regulation G Disclosure” slides as set forth in the Appendix for a summary of amounts. Amounts may not add due to rounding.
1 Other cash flow includes borrowings, other financing and investing activities and beginning cash on hand.
Strong operating cash flow of
$1.245 billion since fiscal 2008
Prudent approach to capital
allocation:
$455 million invested in share
repurchases
$597 million invested in
business acquisitions
$823 million in cap-ex, net of
disposals, or approximately 43%
of allocation
Fiscal 2008 – Fiscal 2017
Robust cash flow generation and prudent capital allocation provide strong foundation
for returns
$1,895 $1,895
*Includes net increase of cash during the period of $20 million
*
18
Industry Themes
Industry increasing network bandwidth dramatically
Major industry participants deploying significant 1 gigabit wireline networks
Emerging wireless technologies require incremental wireline deployments
o A complementary wireline investment cycle is fundamental to applications
enabled by fully converged wireless/wireline networks
Industry developments are producing opportunities which in aggregate are without
precedent. Converged wireless/wireline network deployments only further broaden
our set of opportunities.
Delivering valuable service to customers
Currently providing services for 1 gigabit full deployments across the country in
dozens of metropolitan areas to a number of customers
Have secured and are actively working on a number of converged wireless/wireline
multi-use networks
Customers are revealing with more specificity multi-year initiatives that are being
implemented and managed locally
Our ability to provide integrated planning, engineering and design, procurement and
construction and maintenance services provides value to industry participants with
projects outside their traditional geographic service territories
Dycom’s scale, market position and financial strength position it well as opportunities
continue to expand
19
Financial Update
20
Strong operating results
Contract revenues of $780.2 million in Q4-17 compared to $789.2 million in Q4-16, organic
growth of 4.6%*
Non-GAAP Adjusted EBITDA of $118.0 million, or 15.1% of revenues in Q4-17, compared to
$126.0 million, or 16.0% in Q4-16
Non-GAAP Adjusted Diluted EPS of $1.47 in Q4-17 compared to $1.64 per share in Q4-16
Solid financial profile
Strong balance sheet and cash flows; Sound credit metrics and no near term debt maturities
Robust operating cash flows of $149.9 million during Q4-17 and $256.4 million for fiscal 2017
Capital structure designed to produce strong returns
Repurchased 713,006 common shares for $62.9 million at an average price of $88.23 per share
during fiscal 2017 and 2,511,578 shares for $170 million at an average price of $67.69 during
fiscal 2016
As of July 2017, $112.1 million authorized for share repurchases through August 2018
Fiscal Year Change
In September 2017, changed fiscal year end from July to January
New fiscal year better aligns the Company's fiscal year with the planning cycles of the
Company's customers
Financial Overview
* Organic growth excludes contract revenues of acquired businesses not included for the entire period of Q4-17 and Q4-16, and adjusts for the additional week of
operations as a result of our fiscal calendar year in Q4-16.
See “Regulation G Disclosure” slides 29-35 for a reconciliation of GAAP to Non-GAAP financial measures.
21
21.9%
19.4%
28.7%
20.0%
18.0%
22.9%
14.9%
4.6%
0%
5%
10%
15%
20%
25%
30%
Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17
Contract Revenue Trend
Annual Organic Revenue Trend
Quarterly Contract Revenues
Quarterly Organic Revenue Trend
Annual Growth in Contract Revenues
Financial charts - $ in millions
*Organic % growth adjusted for additional week in Q4-16
See “Regulation G Disclosure” slides 29-35 for a reconciliation of GAAP to Non-GAAP financial measures.
$1,608.6
$1,811.6
$2,022.3
$2,672.5
$3,066.9
FY2013 FY2014 FY2015 FY2016 FY2017
$659
$559
$665
$789 $799
$701
$786 $780
Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17
4.9% 4.7%
9.6%
22.7%
14.1%
FY2013 FY2014 FY2015 FY2016 FY2017
* *
22
$1.18 $1.16
$2.41
$4.48
$5.26
FY2013 FY2014 FY2015 FY2016 FY2017
Quarterly Non-GAAP Adjusted EBITDA
Quarterly Non-GAAP Adjusted Diluted EPS Non-GAAP Adjusted Diluted EPS
Non-GAAP Adjusted EBITDA
Financial charts - $ in millions, except earnings per share amounts
Earnings
See “Regulation G Disclosure” slides 29-35 for a reconciliation of GAAP to Non-GAAP financial measures.
$180 $188 $265 $390 $442
11.2%
10.4%
13.1%
14.6% 14.4%
FY2013 FY2014 FY2015 FY2016 FY2017
Non-GAAP Adjusted EBITDA Non-GAAP Adjusted EBITDA as a % of Revenue
$106
$66
$92
$126 $129
$86
$108
$118
16.0%
11.9%
13.8%
16.0% 16.2%
12.3%
13.8%
15.1%
Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17
Non-GAAP Adjusted EBITDA Non-GAAP Adjusted EBITDA as a % of Revenue
$1.24
$0.54
$1.08
$1.64 $1.67
$0.82
$1.30
$1.47
Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17
23
Strong balance sheet and robust liquidity
Liquidity and Cash Flow
Financial tables - $ in millions
Balance sheet reflects the strength of our
business
Liquidity of $439.9 million at the end of Q4-17
consisting of availability under our Credit
Facility and cash on hand
Cash Flow from Operating Activities
Operating cash flows support strong organic
growth
(a) Availability on Revolver presented net of $57.6 million and $48.7 million for outstanding L/C’s under
the Senior Credit Facility at Q3-17 and Q4-17, respectively
24
Capital Allocated to Maximize Returns
Strong balance sheet, solid cash flow and long-term confidence in industry outlook drives
capital allocation strategy
Invest in organic growth
Organic revenue grew 4.6% in Q4-17 and 14.1% in fiscal 2017, reflecting growth from
several key customers
Pursue complementary acquisitions
Fiscal 2013 - 2017 acquisitions further strengthened Dycom’s customer base, geographic
scope, and technical service offerings
During fiscal 2016 and 2017, acquired businesses for $181.4 million further strengthening
customer relationships and expanding geographic reach
Share repurchases
Repurchased approximately 23.7 million shares for approximately $642 million since fiscal
2006
$112.1 million authorization available for share repurchases through August 2018
Dycom is committed to maximizing long term returns through prudent capital allocation
See “Regulation G Disclosure” slides 29-35 for a reconciliation of GAAP to Non-GAAP financial measures.
25
Questions and Answers
26
The following slides 27, 28 & 30 were used on August 30, 2017 in connection with the
Company’s conference call to discuss fiscal 2017 fourth quarter results and are
included for your convenience. Reference is made to slide 2 titled “Forward-Looking
Statements and Non-GAAP Information” with respect to these slides. The information
and statements contained in slides 27, 28 & 30 that are forward-looking are based on
information that was available at the time the slides were initially prepared and/or
management’s good faith belief at that time with respect to future events. Except as
required by law, the Company may not update forward-looking statements even
though its situation may change in the future. For a full copy of the conference call
materials, including the conference call transcript, see the Company’s Form 8-Ks filed
with the Securities and Exchange Commission on August 30, 2017 and September 1,
2017.
Selected Information from Q4-17
Dycom Results Conference Call
Materials
27
Q1-2018 Outlook
Financial table- $ in millions, except earnings per share amounts (% as a percent of contract revenues)
See “Regulation G Disclosure” slides 29-36 for a reconciliation of GAAP to Non-GAAP financial measures.
“Q1-2018 Outlook” - This slide was prepared and used on August 30, 2017 in connection with the Company’s conference call to discuss fiscal 2017 fourth quarter results and
is included for your convenience. Reference is made to slide 2 titled “Forward-Looking Statements and Non-GAAP Information” with respect to this slide. The information
and statements contained in this slide that are forward-looking is based on information that was available at the time the slide was initially prepared and/or
management’s good faith belief at that time with respect to future events. Except as required by law, the Company may not update forward-looking statements even
though its situation may change in the future. For a full copy of the conference call materials, including the conference call transcript, see the Company’s Form 8-Ks filed
with the Securities and Exchange Commission on August 30, 2017 and September 1, 2017.
Q1-2017
Included for
comparison
Q1-2018 Outlook and Commentary
Contract Revenues $ 799.2
$715 - $745 Near-term moderation by a large customer offset in part by solid demand from
other customers
1 gigabit deployments, fiber deep cable capacity projects, and initial phases of
fiber deployments for newly emerging wireless technologies
Total Q1-18 revenue expected to include approximately $5 million from the
business acquired in Q3-17. For organic growth calculations, there were no
acquired revenues in Q1-17.
Gross Margin % 23.1% Gross Margin %
decreases from Q1-17
Gross margin % pressured from near-term revenue decline compared to Q1-17
and impacted by costs associated with the initiation of customer programs
G&A Expense % 7.5% G&A as a % of revenue
increases from Q1-17
G&A as a % of revenue increases compared to Q1-17 from higher share based
compensation related to vesting schedule of awards and the impact on operating
leverage at the lower expected level of revenue in Q1-18
Share-based compensation $ 5.7 $ 7.4
Depreciation &
Amortization
$ 34.5 $42.0 - $42.8
Higher depreciation resulting from fleet expansion that increases our capacity as
well as the normal replacement cycle of fleet assets
Includes amortization of approximately $6.3 million in Q1-18 compared to
$6.2 million in Q1-17
Non-GAAP Adjusted
Interest Expense
$ 4.8 Approximately $ 5.1 Non-GAAP Adjusted Interest Expense excludes non-cash amortization of debt
discount of $4.5 million in Q1-18 compared to $4.3 million in Q1-17
Other Income, net $ 0.9 $ 3.1 - $ 3.7 Other income, net primarily includes gain (loss) on sales of fixed assets
Non-GAAP Adjusted
EBITDA %
16.2% Non-GAAP Adjusted
EBITDA % decreases
from Q1-17
Non-GAAP Adjusted EBITDA dollar amount decreases compared to Q1-17 result
Non-GAAP Adjusted Diluted
Earnings per Share
$ 1.67 $ 0.81 - $ 0.96 Non-GAAP Adjusted Diluted EPS declines as a result of lower EBITDA, higher
depreciation, stock-based compensation and interest, offset in part by higher
other income
Non-GAAP Adjusted Diluted EPS excludes non-cash amortization of debt discount
on Convertible Senior Notes (“Notes”). See slide 30 for reconciliation of guidance
for Non-GAAP Adjusted Diluted Earnings per Common Share.
Diluted Shares 32.2 million 31.9 million
28
Looking Ahead to Q2-2018
See “Regulation G Disclosure” slides 29-36 for a reconciliation of GAAP to Non-GAAP financial measures.
“Looking Ahead to Q2-2018” - This slide was prepared and used on August 30, 2017 in connection with the Company’s conference call to discuss fiscal 2017 fourth quarter
results and is included for your convenience. Reference is made to slide 2 titled “Forward-Looking Statements and Non-GAAP Information” with respect to this slide. The
information and statements contained in this slide that are forward-looking is based on information that was available at the time the slide was initially prepared and/or
management’s good faith belief at that time with respect to future events. Except as required by law, the Company may not update forward-looking statements even
though its situation may change in the future. For a full copy of the conference call materials, including the conference call transcript, see the Company’s Form 8-Ks filed with
the Securities and Exchange Commission on August 30, 2017 and September 1, 2017.
Financial table- $ in millions, (% as a percent of contract revenues)
Q2-2017
Included for
comparison
Q2-2018 Outlook and Commentary
Contract Revenues $ 701.1 Total revenue decline
of low to mid single digits
compared to
Q2-17 revenues
Near-term moderation by a large customer offset in part by solid demand from
other customers
1 gigabit deployments, fiber deep cable capacity projects, and initial phases of
fiber deployments for newly emerging wireless technologies
Total Q2-18 revenue expected to include approximately $5 million from the
business acquired in Q3-17. For organic growth calculations, there were no
acquired revenues in Q2-17.
Gross Margin %
19.9% Gross Margin %
in line with Q2-17
Margin outlook reflects expected mix of work activity and near term margin
impacts as we initiate customer programs
G&A Expense % 8.3% G&A as a % of revenue
increases from Q2-17
G&A as a % of revenue increases compared to Q2-17 from higher share based
compensation related to vesting schedule of awards and the impact on operating
leverage at the lower expected level of revenue in Q2-18
Share-based compensation $ 5.3 $ 6.2
Depreciation &
Amortization
$ 35.7 $41.8 - $42.6
Higher depreciation resulting from fleet expansion that increases our capacity as
well as the normal replacement cycle of fleet assets
Includes amortization of approximately $5.8 million in Q2-18 compared to
$6.1 million in Q2-17
Non-GAAP Adjusted
Interest Expense
$ 4.8 Approximately $ 5.2 Non-GAAP Adjusted Interest Expense excludes non-cash amortization of debt
discount of $4.6 million in Q2-18 compared to $4.4 million in Q2-17
Other Income, net $ 1.0 $ 0.4 - $ 1.0 Other income, net primarily includes gain (loss) on sales of fixed assets
Non-GAAP Adjusted
EBITDA %
12.3% Non-GAAP Adjusted
EBITDA % decreases
modestly from Q2-17
Non-GAAP Adjusted EBITDA dollar amount decreases compared to Q2-17 result
Diluted Shares 32.2 million 32.1 million
29
Explanation of Non-GAAP Measures
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). In the Company’s quarterly results releases, trend schedules, conference
calls, slide presentations, and webcasts, it may use or discuss Non-GAAP financial measures, as defined by Regulation G of the Securities and Exchange Commission. The Company believes
that the presentation of certain Non-GAAP financial measures in these materials provides information that is useful to investors because it allows for a more direct comparison of the
Company’s performance for the period reported with the Company’s performance in prior periods. The Company cautions that Non-GAAP financial measures should be considered in
addition to, but not as a substitute for, the Company’s reported GAAP results. Management defines the Non-GAAP financial measures as follows:
• Non-GAAP Organic Contract Revenues - contract revenues from businesses that are included for the entire period in both the current and prior year periods, adjusted independently
each comparative period for the additional week in the fourth quarter of fiscal 2016 as a result of the Company’s 52/53 week fiscal year. Non‐GAAP Organic Revenue growth (decline) is
calculated as the percentage change in Non‐GAAP Organic Revenues over those of the comparable prior year period. Management believes organic growth (decline) is a helpful measure
for comparing the Company’s revenue performance with prior periods.
• Non-GAAP Adjusted EBITDA - net income before interest, taxes, depreciation and amortization, gain on sale of fixed assets, stock-based compensation expense, loss on debt
extinguishment, and certain non-recurring items. Management believes Non-GAAP Adjusted EBITDA is a helpful measure for comparing the Company’s operating performance with prior
periods as well as with the performance of other companies with different capital structures or tax rates.
• Non-GAAP Adjusted Net Income - GAAP net income before loss on debt extinguishment, non-cash amortization of the debt discount, certain non-recurring items and any tax impact
related to these items.
• Non-GAAP Adjusted Diluted Earnings per Common Share - Non-GAAP Adjusted Net Income divided by weighted average diluted shares outstanding.
Management excludes or adjusts each of the items identified below from Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Diluted Earnings per Common Share:
• Non-cash amortization of the debt discount - The Company’s convertible senior notes were allocated between debt and equity components. The difference between the
principal amount and the carrying amount of the liability component of the convertible senior notes represents a debt discount. The debt discount is being amortized over the
term of the convertible senior notes but does not result in periodic cash interest payments. The Company has excluded the non-cash amortization of the debt discount from its
Non-GAAP financial measures because it believes it is useful to analyze the component of interest expense for the convertible senior notes that will be paid in cash. The
exclusion of the non-cash amortization from the Company’s Non-GAAP financial measures provides management with a consistent measure for assessing financial results.
• Loss on debt extinguishment – The Company incurred a pre-tax charge of approximately $16.3 million for early extinguishment of debt in connection with the redemption of its
7.125% senior subordinated notes during the first quarter of fiscal 2016. Management believes excluding the loss on debt extinguishment from the Company’s Non-GAAP
financial measures assists investors’ overall understanding of the Company's current financial performance. The Company believes this type of charge is not indicative of its
core operating results. The exclusion of the loss on debt extinguishment from the Company’s Non-GAAP financial measures provides management with a consistent measure
for assessing the current and historical financial results.
• Acquisition transaction related costs – The Company incurred costs of approximately $0.7 million in connection with an acquisition during the fourth quarter of fiscal 2016. The
exclusion of the acquisition transaction related costs from the Company’s Non-GAAP financial measures provides management with a consistent measure for assessing
financial results.
• Tax impact of adjusted results - The tax impact of the adjusted results was calculated utilizing a Non-GAAP effective tax rate which approximates the Company’s effective tax
rate used for financial planning. The tax impact included in the Company’s guidance for the quarter ending October 28, 2017 was calculated using an effective tax rate used for
financial planning and forecasting future results.
Appendix: Regulation G Disclosure
30
Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures
Outlook – Non-GAAP Diluted Earnings per Common Share for the Three Months Ending October 28, 2017
Unaudited
Appendix: Regulation G Disclosure
This slide was prepared and used on August 30, 2017 in connection with the Company’s conference call to discuss fiscal 2017 fourth quarter
results and is included for your convenience. Reference is made to slide 2 titled “Forward-Looking Statements and Non-GAAP Information”
with respect to this slide. The information and statements contained in this slide that are forward-looking is based on information that was
available at the time the slide was initially prepared and/or management’s good faith belief at that time with respect to future events.
Except as required by law, the Company may not update forward-looking statements even though its situation may change in the future.
For a full copy of the conference call materials, including the conference call transcript, see the Company’s Form 8-Ks filed with the Securities
and Exchange Commission on August 30, 2017 and September 1, 2017.
Use of Non-GAAP Financial Measures: The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). In our quarterly results releases, trend schedules,
conference calls, slide presentations, and webcasts, we may use or discuss Non-GAAP financial measures, as defined by Regulation G of the SEC. See Explanation of Non-GAAP Measures on slide 29.
Notes: Amounts above may not add due to rounding.
Outlook for the Three Months Ending October 28, 2017
Diluted earnings per common share – GAAP (a) $0.72 - $0.87
Adjustment for addback of after-tax non-cash amortization of debt discount on convertible senior notes (b) $ 0.09
Non-GAAP Adjusted Diluted Earnings per Common Share (a) $0.81 - $0.96
(a) Guidance for diluted earnings per common share and Non-GAAP Adjusted diluted earnings per common share for the three months ending
October 28, 2017 were computed using approximately 31.9 million in diluted weighted average shares outstanding.
(b) The Company expects to recognize approximately $4.5 million in pre-tax interest expense during the three months ending October 28, 2017
for non-cash amortization of the debt discount associated with its convertible senior notes. The Company excludes the effect of this non-cash
amortization of the debt discount in its Non-GAAP financial measures.
31
Appendix: Regulation G Disclosure
Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures
Non-GAAP Organic Contract Revenue
Unaudited
($ in millions)
(a) Q4-16 contained 14 weeks as a result of our 52/53 week fiscal year as compared to 13 weeks in all other quarterly periods presented herein. The Q4-16 Non-GAAP adjustment is
calculated independently for each comparative period as (i) contract revenues less, (ii) revenues from acquired businesses in each applicable period, (iii) divided by 14 weeks.
Use of Non-GAAP Financial Measures: The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). In our quarterly results releases, trend schedules,
conference calls, slide presentations, and webcasts, we may use or discuss Non-GAAP financial measures, as defined by Regulation G of the SEC. See Explanation of Non-GAAP Measures on slide 29.
32
(a) Non-GAAP adjustments in FY 2016 reflect adjustments in Q4-16 resulting from the Company’s 52/53 week fiscal year. The Q4-16 Non-GAAP adjustment is calculated independently
for each comparative period as (i) contract revenues less, (ii) revenues from acquired businesses in each applicable period, (iii) divided by 14 weeks.
Contract Revenues and Organic Growth - Reconciliation of GAAP to Non-GAAP Measures ($ in millions)
The table below reconciles GAAP revenue growth to Non-GAAP organic revenue growth
Appendix: Regulation G Disclosure
Notes: Amounts above may not add due to rounding.
Use of Non-GAAP Financial Measures: The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). In our quarterly results releases, trend schedules,
conference calls, slide presentations, and webcasts, we may use or discuss Non-GAAP financial measures, as defined by Regulation G of the SEC. See Explanation of Non-GAAP Measures on slide 29.
Revenues from
acquired
businesses
Revenues from
storm restoration
services
Additional week
as a result of our
52/53 week fiscal
year (a) GAAP %
Non-GAAP -
Organic %
Fiscal 2017 3,066.9$ (214.9)$ -$ -$ 2,852.0$ 14.8% 14.1%
Fiscal 2016 2,672.5$ (119.8)$ -$ (53.5)$ 2,499.2$
Fiscal 2016 2,672.5$ (159.0)$ -$ (52.9)$ 2,460.7$ 32.2% 22.7%
Fiscal 2015 2,022.3$ (17.7)$ -$ -$ 2,004.7$
Fi al 2015 2,022.3$ (40.4)$ -$ -$ 1,982.0$ 11.6% 9.6%
Fiscal 2014 1,811.6$ (2.8)$ -$ -$ 1,808.8$
Fiscal 2014 1,811.6$ (499.3)$ -$ -$ 1,312.3$ 12.6% 4.7%
Fiscal 2013 1,608.6$ (337.9)$ (16.7)$ -$ 1,254.0$
Fiscal 2013 1,608.6$ (337.9)$ (16.7)$ -$ 1,254.0$ 33.9% 4.9%
Fiscal 2012 1,201.1$ -$ (6.0)$ -$ 1,195.1$
GAAP Contract
Revenues
NON-GAAP ADJUSTMENTS
Non-GAAP -
Organic Contract
Revenues
Revenue Growth (Decline)%
33
Notes: Amounts may not add due to rounding.
1 Other financing activities represents net cash provided by (used in) financing activities less repurchases of common stock.
2 Other investing activities represents net cash provided by (used in) investing activities less capital expenditure, net of proceeds from asset sales and less cash paid for acquisitions, net of cash acquired.
Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures
Calculation of Cumulative Cash Flows Fiscal 2008 through Fiscal 2017
Unaudited
($ in millions)
Appendix: Regulation G Disclosure
Net Cash Provided
by Operating
Activities
Capital Expenditures,
Net of Proceeds from
Asset Sales
Cash Paid for
Acquisitions, net
of cash acquired
Repurchases of
Common Stock
Borrowings and Other
Financing Activities 1
Other Investing
Activities 2
Total Amount
Provided by Other
Financing and
Investing Activities
FY-17 256.4$ (185.2)$ (24.2)$ (62.9)$ 20.4$ 0.3$ 20.7$
FY-16 261.5 (175.5) (157.2) (170.0) 254.1 (0.5) 253.6
FY-15 141.9 (93.6) (31.9) (87.1) 75.9 (4.5) 71.4
FY-14 84.2 (73.7) (17.1) (10.0) 19.0 (0.3) 18.7
FY-13 106.7 (58.8) (330.3) (15.2) 263.5 0.1 263.6
FY-12 65.1 (52.8) - (13.0) 7.6 0.9 8.5
FY-11 43.9 (49.2) (36.5) (64.5) 47.5 0.2 47.7
FY-10 54.1 (46.6) - (4.5) (4.4) - (4.4)
FY-09 126.6 (25.3) - (2.9) (15.7) (0.1) (15.8)
FY-08 104.3 (62.3) 0.5 (25.2) (13.8) (0.3) (14.1)
Cumulative 1,244.8$ (823.1)$ (596.7)$ (455.3)$ 654.1$ (4.2)$ 649.9$
38.6$
18.8
19.8$
Cash at July 29, 2017
Cash at July 28, 2007
Net Increase in Cash
34
Notes: Amounts above may not add due to rounding.
Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures
Non-GAAP Adjusted Net Income, Non-GAAP Adjusted Diluted EPS, and Non-GAAP Adjusted Interest Expense
Unaudited ($ in 000's, except per share amounts)
Appendix: Regulation G Disclosure
Use of Non-GAAP Financial Measures: The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). In our quarterly results releases, trend schedules,
conference calls, slide presentations, and webcasts, we may use or discuss Non-GAAP financial measures, as defined by Regulation G of the SEC. See Explanation of Non-GAAP Measures on slide 29.
Reconciliation of Net Income to Non-GAAP Adjusted Net Income and Diluted EPS to Non-GAAP Adjusted Diluted EPS
Fiscal 2013 Fiscal 2014 Q1-15 Q2-15 Q3-15 Q4-15 Fiscal 2015 Q1-16 Q2-16 Q3-16 Q4-16 Fiscal 2016 Q1-17 Q2-17 Q3-17 Q4-17 Fiscal 2017
Net income 35.2$ 40.0$ 20.8$ 9.4$ 20.3$ 33.8$ 84.3$ 30.8$ 15.5$ 33.1$ 49.4$ 128.7$ 51.1$ 23.7$ 38.8$ 43.7$ 157.2$
Loss on debt extinguishment - - - - - - - 16.3 - - - 16.3 - - - - -
Amortization of debt discount - - - - - - - 1.8 4.1 4.2 4.6 14.7 4.3 4.4 4.4 4.5 17.6
Charges for settlement of wage and hour litigation 0.5 0.6 - - - - - - - - - - - - - - -
Acquisition related costs 6.8 - - - - - - - - - 0.7 0.7 - - - - -
Tax impact of adjustments (3.0) (0.2) - - - - - (6.8) (1.6) (1.6) (2.0) (12.0) (1.6) (1.6) (1.6) (1.7) 6.6
Total adjustments, net of tax 4.6$ 0.4$ -$ -$ -$ -$ -$ 11.2$ 2.5$ 2.6$ 3.3$ 19.6$ 2.7$ 2.7$ 2.8$ 2.8$ 24.2$
Non-GAAP Adjusted Net income 39.8$ 40.3$ 20.8$ 9.4$ 20.3$ 33.8$ 84.3$ 42.0$ 18.0$ 35.7$ 52.7$ 148.4$ 53.7$ 26.4$ 41.6$ 46.5$ 181.4$
Diluted Earnings Per Share
Net income 1.04$ 1.15$ 0.59$ 0.27$ 0.58$ 0.97$ 2.41$ 0.91$ 0.46$ 1.00$ 1.54$ 3.89$ 1.59$ 0.74$ 1.22$ 1.38$ 4.92$
Adjusting Items from above, after tax 0.14 0.01 - - - - - 0.33 0.08 0.08 0.10 0.59 0.08 0.09 0.09 0.09 0.35
Non-GAAP Adjusted Diluted Earnings Per Common Share 1.18$ 1.16$ 0.59$ 0.27$ 0.58$ 0.97$ 2.41$ 1.24$ 0.54$ 1.08$ 1.64$ 4.48$ 1.67$ 0.82$ 1.30$ 1.47$ 5.26$
F lly ilut d Shares (in thousands) 33,782 34,816 35,118 35,127 35,029 34,831 35,027 33,887 33,520 33,051 32,074 33,116 32,200 32,162 31,910 31,664 31,985
Reconciliation of Non-GAAP Adjusted Interest Expense
Fiscal 2013 Fiscal 2014 Q1-15 Q2-15 Q3-15 Q4-15 Fiscal 2015 Q1-16 Q2-16 Q3-16 Q4-16 Fiscal 2016 Q1-17 Q2-17 Q3-17 Q4-17 Fiscal 2017
Interest expense, net 23.3$ 26.8$ 6.7$ 6.7$ 6.6$ 6.9$ 27.0$ 9.1$ 7.9$ 8.0$ 9.7$ 34.7$ 9.1$ 9.2$ 9.4$ 9.7$ 37.4$
Adjusting Items from above - - - - - - - (1.8) (4.1) (4.2) (4.6) (14.7) (4.3) (4.4) (4.4) (4.5) (17.6)
Non-GAAP Adjusted Interest Expense 23.3$ 26.8$ 6.7$ 6.7$ 6.6$ 6.9$ 27.0$ 7.4$ 3.7$ 3.8$ 5.1$ 20.0$ 4.8$ 4.8$ 5.0$ 5.2$ 19.8$
35
Appendix: Regulation G Disclosure
Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures
Non-GAAP Adjusted EBITDA
Unaudited ($ in 000's, except per share amounts)
Notes: Amounts above may not add due to rounding.
Use of Non-GAAP Financial Measures: The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). In our quarterly results releases, trend schedules,
conference calls, slide presentations, and webcasts, we may use or discuss Non-GAAP financial measures, as defined by Regulation G of the SEC. See Explanation of Non-GAAP Measures on slide 29.
Reconciliation of Net Income to Non-GAAP Adjusted EBITDA
Fiscal 2013 Fiscal 2014 Q1-15 Q2-15 Q3-15 Q4-15 Fiscal 2015 Q1-16 Q2-16 Q3-16 Q4-16 Fiscal 2016 Q1-17 Q2-17 Q3-17 Q4-17 Fiscal 2017
Net income 35.2$ 40.0$ 20.8$ 9.4$ 20.3$ 33.8$ 84.3$ 30.8$ 15.5$ 33.1$ 49.4$ 128.7$ 51.1$ 23.7$ 38.8$ 43.7$ 157.2$
Provision (benefit) for income taxes 23.0 26.3 13.5 6.1 12.0 19.6 51.3 18.6 10.0 19.4 29.6 77.6 30.3 14.0 22.7 26.1 93.2
Interest expense, net 23.3 26.8 6.7 6.7 6.6 6.9 27.0 9.1 7.9 8.0 9.7 34.7 9.1 9.2 9.4 9.7 37.4
Depreciation 64.8 74.5 18.8 19.1 19.8 21.5 79.3 22.7 25.2 27.0 30.6 105.5 28.4 29.6 31.2 34.0 123.1
Amortization 20.7 18.3 4.1 4.1 4.1 4.4 16.7 4.8 4.7 4.5 5.4 19.4 6.2 6.1 6.2 6.3 24.8
EBITDA 167.0 185.9 64.0 45.6 62.9 86.2 258.7 86.0 63.2 92.0 124.7 366.0 125.0 82.6 108.3 119.8 435.7
Gain on sale of fixed assets (4.7) (10.7) (1.5) (1.7) (3.1) (0.9) (7.1) (1.1) (1.0) (4.1) (3.6) (9.8) (1.4) (1.7) (5.0) (6.6) (14.9)
Stock-based compensation expense 9.9 12.6 3.9 3.7 3.2 3.2 13.9 4.5 4.2 3.9 4.2 16.9 5.7 5.3 4.9 4.9 20.8
Loss on debt extinguishment - - - - - - - 16.3 - - - 16.3 - - - - -
cquisit on related costs 6.8 - - - - - - - - - 0.7 0.7 - - - - -
Cha ges for settlement of wage and hour litigation 0.5 0.6 - - - - - - - - - - - - - - -
Non-GAAP Adjusted EBITDA 179.8$ 188.4$ 66.4$ 47.6$ 63.0$ 88.5$ 265.5$ 105.7$ 66.4$ 91.9$ 126.0$ 390.0$ 129.2$ 86.2$ 108.2$ 118.0$ 441.6$
Reconciliation of Non-GAAP Adjusted EBITDA (from above) as a % of Revenue
Fiscal 2013 Fiscal 2014 Q1-15 Q2-15 Q3-15 Q4-15 Fiscal 2015 Q1-16 Q2-16 Q3-16 Q4-16 Fiscal 2016 Q1-17 Q2-17 Q3-17 Q4-17 Fiscal 2017
Total contract revenues 1,608.6$ 1,811.6$ 510.4$ 441.1$ 492.4$ 578.5$ 2,022.3$ 659.3$ 559.5$ 664.6$ 789.2$ 2,672.5$ 799.2$ 701.1$ 786.3$ 780.2$ 3,066.9$
EBITDA as a percentage of contract revenues 10.4% 10.3% 12.5% 10.3% 12.8% 14.9% 12.8% 13.1% 11.3% 13.8% 15.8% 13.7% 15.6% 11.8% 13.8% 15.4% 14.2%
Non-GAAP Adjusted EBITDA as a % of contract 11.2% 10.4% 13.0% 10.8% 12.8% 15.3% 13.1% 16.0% 11.9% 13.8% 16.0% 14.6% 16.2% 12.3% 13.8% 15.1% 14.4%
Investor Presentation
September 2017