-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JThBS9S3mpb7Ff0jAVw5MZB16n5Gv4iU6n9oy827VfUwl8ZOiSMb+hFIOCe6884a qYxxfOn4Q+K80VPwXemBrA== 0000950144-00-003087.txt : 20000313 0000950144-00-003087.hdr.sgml : 20000313 ACCESSION NUMBER: 0000950144-00-003087 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000129 FILED AS OF DATE: 20000310 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DYCOM INDUSTRIES INC CENTRAL INDEX KEY: 0000067215 STANDARD INDUSTRIAL CLASSIFICATION: WATER, SEWER, PIPELINE, COMM AND POWER LINE CONSTRUCTION [1623] IRS NUMBER: 591277135 STATE OF INCORPORATION: FL FISCAL YEAR END: 0729 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-10613 FILM NUMBER: 566596 BUSINESS ADDRESS: STREET 1: 4440 PGA BLVD. STE 500 STREET 2: FIRST UNION CENTER CITY: PALM BEACH GARDENS STATE: FL ZIP: 33410 BUSINESS PHONE: 5616277171 MAIL ADDRESS: STREET 1: P O BOX 3524 STREET 2: SUITE 860 CITY: WEST PALM BEACH STATE: FL ZIP: 33402 FORMER COMPANY: FORMER CONFORMED NAME: MOBILE HOME DYNAMICS INC DATE OF NAME CHANGE: 19820302 10-Q 1 DYCOM INDUSTRIES 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 29, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________to________ Commission file number 0-5423 DYCOM INDUSTRIES, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Florida 59-1277135 ------------------------------ ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4440 PGA Boulevard, Suite 500 Palm Beach Gardens, Florida 33410 - ------------------------------------------- ---------------- (Address of principal executive office) (Zip Code) (561) 627-7171 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding as of February 22, 2000 ----- ----------------------------------- Common Stock, par value $0.33 1/3 38,977,496 2 DYCOM INDUSTRIES, INC. INDEX
Page No. -------- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets- January 29, 2000 and July 31, 1999 3 Condensed Consolidated Statements of Operations for the Three Months Ended January 29, 2000 and January 31, 1999 4 Condensed Consolidated Statements of Operations for the Six Months Ended January 29, 2000 and January 31, 1999 5 Condensed Consolidated Statements of Cash Flows for the Six Months Ended January 29, 2000 and January 31, 1999 6-7 Notes to Condensed Consolidated Financial Statements 8-15 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 16-20 Item 3. Quantitative and Qualitative Disclosures about Market Risk 20 PART II. OTHER INFORMATION Item 2. Changes in Securities and Use of Proceeds 21 Item 4. Submission of Matters to a Vote of Security Holders 21 Item 6. Exhibits and Reports on Form 8-K 21 SIGNATURES 22
3 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
January 29, July 31, 2000 1999 ------------ ------------ ASSETS CURRENT ASSETS Cash and equivalents $ 79,245,779 $ 97,955,007 Accounts receivable, net 91,970,313 95,284,031 Costs and estimated earnings in excess of billings 43,405,249 32,878,667 Deferred tax assets, net 4,553,892 3,503,379 Inventories 12,360,176 10,222,964 Other current assets 3,577,473 1,285,297 ------------ ------------ Total current assets 235,112,882 241,129,345 ------------ ------------ PROPERTY AND EQUIPMENT, net 91,797,518 79,410,882 ------------ ------------ OTHER ASSETS: Intangible assets, net 86,331,391 59,286,827 Other 4,592,008 4,722,672 ------------ ------------ Total other assets 90,923,399 64,009,499 ------------ ------------ TOTAL $417,833,799 $384,549,726 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 22,434,377 $ 19,886,314 Notes payable 2,525,419 2,438,860 Billings in excess of costs and estimated earnings 316,284 437,874 Accrued self-insured claims 4,545,423 3,728,947 Income taxes payable -- 4,375,635 Customer advances 15,381,163 24,576,700 Other accrued liabilities 26,654,336 23,161,468 ------------ ------------ Total current liabilities 71,857,002 78,605,798 NOTES PAYABLE 9,164,670 9,982,121 ACCRUED SELF-INSURED CLAIMS 5,660,572 4,823,396 DEFERRED TAX LIABILITIES, NET 3,523,070 2,034,648 OTHER LIABILITIES 2,902,102 1,813,184 ------------ ------------ Total liabilities 93,107,416 97,259,147 ------------ ------------ COMMITMENTS AND CONTINGENCIES, Note 9 STOCKHOLDERS' EQUITY: Preferred stock, par value $1.00 per share: 1,000,000 shares authorized; no shares issued and outstanding Common stock, par value $.33 1/3 per share: 150,000,000 shares authorized, 38,968,132 and 38,441,985 shares issued and outstanding, respectively 12,989,377 12,813,995 Additional paid-in capital 219,852,121 207,051,490 Retained earnings 91,884,885 67,425,094 ------------ ------------ Total stockholders' equity 324,726,383 287,290,579 ------------ ------------ TOTAL $417,833,799 $384,549,726 ============ ============
See notes to condensed consolidated financial statements--unaudited 3 4 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months Ended ------------------------------ January 29, January 31, 2000 1999 ------------ ------------ Contract revenues earned $158,381,266 $ 96,727,284 ------------ ------------ Expenses: Costs of earned revenues, excluding depreciation 119,693,240 73,468,675 General and administrative 12,759,956 8,360,308 Depreciation and amortization 7,035,000 4,144,089 ------------ ------------ Total 139,488,196 85,973,072 ------------ ------------ Interest income, net 833,827 141,469 Other income, net 190,168 269,269 ------------ ------------ INCOME BEFORE INCOME TAXES 19,917,065 11,164,950 ------------ ------------ PROVISION FOR INCOME TAXES: Current 7,342,393 4,201,198 Deferred 578,112 313,602 ------------ ------------ Total 7,920,505 4,514,800 ------------ ------------ NET INCOME $ 11,996,560 $ 6,650,150 ============ ============ EARNINGS PER COMMON SHARE: Basic $ 0.31 $ 0.20 ============ ============ Diluted $ 0.31 $ 0.20 ============ ============ SHARES USED IN COMPUTING EARNINGS PER COMMON SHARE: Basic 38,721,486 33,299,885 ============ ============ Diluted 39,285,527 33,918,138 ============ ============
See notes to condensed consolidated financial statements--unaudited. 4 5 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Six Months Ended ------------------------------ January 29, January 31, 2000 1999 ------------ ------------ Contract revenues earned $319,285,541 $205,340,440 ------------ ------------ Expenses: Costs of earned revenues, excluding depreciation 240,645,195 154,648,923 General and administrative 25,955,264 19,549,301 Depreciation and amortization 14,146,965 8,116,827 ------------ ------------ Total 280,747,424 182,315,051 ------------ ------------ Interest income, net 1,565,694 321,043 Other income, net 411,747 430,239 ------------ ------------ INCOME BEFORE INCOME TAXES 40,515,558 23,776,671 ------------ ------------ PROVISION FOR INCOME TAXES: Current 15,617,856 9,627,242 Deferred 437,911 5,136 ------------ ------------ Total 16,055,767 9,632,378 ------------ ------------ NET INCOME $ 24,459,791 $ 14,144,293 ============ ============ EARNINGS PER COMMON SHARE: Basic $ 0.63 $ 0.43 ============ ============ Diluted $ 0.62 $ 0.42 ============ ============ SHARES USED IN COMPUTING EARNINGS PER COMMON SHARE: Basic 38,629,035 33,217,191 ============ ============ Diluted 39,188,013 33,788,727 ============ ============
See notes to condensed consolidated financial statements--unaudited. 5 6 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Six Months Ended ------------------------------- January 29, January 31, 2000 1999 ------------ ------------ Increase (Decrease) in Cash and Equivalents from: OPERATING ACTIVITIES: Net income $ 24,459,791 $ 14,144,293 Adjustments to reconcile net cash provided by operating activities: Depreciation and amortization 14,146,965 8,116,827 Gain on disposal of assets (275,983) (161,439) Deferred income taxes 437,911 5,136 Changes in assets and liabilities: Accounts receivable, net 9,051,024 11,900,139 Unbilled revenues, net (9,997,934) (4,995,044) Other current assets (3,719,803) (4,239,490) Other assets 2,798,739 (794,491) Accounts payable 1,764,290 1,340,612 Customer advances (9,195,537) 948,243 Accrued self-insured claims and other liabilities 2,248,179 184,179 Accrued income taxes (3,597,161) (2,193,782) ------------ ------------ Net cash inflow from operating activities 28,120,481 24,255,183 ------------ ------------ INVESTING ACTIVITIES: Capital expenditures (20,332,633) (22,810,098) Proceeds from sale of assets 1,015,699 553,276 Acquisition expenditures, net of cash acquired (27,654,288) (750,000) Equity investment (3,000,000) ------------ ------------ Net cash outflow from investing activities (46,971,222) (26,006,822) FINANCING ACTIVITIES: Principal payments on notes payable and bank lines-of-credit (1,304,701) (2,398,299) Exercise of stock options 1,446,214 2,208,418 ------------ ------------ Net cash inflow (outflow) from financing activities 141,513 (189,881) ------------ ------------ NET CASH OUTFLOW FROM ALL ACTIVITIES (18,709,228) (1,941,520) CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 97,955,007 35,927,307 ------------ ------------ CASH AND EQUIVALENTS AT END OF PERIOD $ 79,245,779 $ 33,985,787 ============ ============
See notes to condensed consolidated financial statements--unaudited. 6 7 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (Unaudited)
For the Six Months Ended ---------------------------- January 29, January 31, 2000 1999 ----------- ----------- SUPPLEMENTAL DISCLOSURES OF CASH FLOW AND NON-CASH INVESTING AND FINANCING ACTIVITIES: Cash paid during the period for: Interest $ 507,246 $ 657,932 Income taxes $20,280,419 $10,765,623 Property and equipment acquired and financed with: Capital lease obligation $ 187,765 Income tax benefit from stock options exercised $ 1,065,402 $ 1,115,554 During the six months ended January 29, 2000, the Company acquired all of the capital stock of Lamberts' Cable Splicing Company, C-2 Utility Contractors, Inc., and Artoff Construction Company, Inc. at a cost of $40.8 million. In conjunction with these acquisitions, assets acquired and liabilities assumed were as follows: Fair market value of assets acquired, including goodwill $42,888,925 Consideration paid (including $10.5 million of common stock issued) 40,754,577 ----------- Fair market value of liabilities assumed $ 2,134,348 ===========
See notes to condensed consolidated financial statements--unaudited. 7 8 DYCOM INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--Unaudited 1. The accompanying condensed consolidated balance sheets of Dycom Industries, Inc. ("Dycom" or the "Company") as of January 29, 2000 and July 31, 1999, and the related condensed consolidated statements of operations for the three and six months ended January 29, 2000 and January 31, 1999 and the condensed consolidated statements of cash flows for the six months ended January 29, 2000 and January 31, 1999 reflect all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of such statements. The results of operations for the three and six months ended January 29, 2000 are not necessarily indicative of the results which may be expected for the entire year. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION -- The condensed consolidated financial statements are unaudited. These statements include Dycom Industries, Inc. and its subsidiaries, all of which are wholly owned. During fiscal 1999, the Company acquired Locating, Inc. ("LOC"), Ervin Cable Construction, Inc. ("ECC"), Apex Digital TV, Inc. ("APX"), and Triple D Communications, Inc. ("DDD"). During fiscal 2000, the Company acquired Lamberts' Cable Splicing Company ("LCS"), C-2 Utility Contractors, Inc. ("C-2"), and Artoff Construction Company, Inc. ("ACC"). Each of these transactions was accounted for using the purchase method of accounting. The Company's results include the results of LOC, ECC, APX, DDD, LCS, C-2, and ACC from their respective acquisition dates until January 29, 2000. See Note 4. The Company's operations consist primarily of providing specialty contracting services to the telecommunications and electrical utility industries. All material intercompany accounts and transactions have been eliminated. CHANGE IN FISCAL YEAR -- On September 29, 1999, the Company changed to a fiscal year with 52 or 53 week periods ending on the Saturday nearest July 31. This Quarterly Report presents financial information for the first and second quarters of fiscal 2000, beginning August 1, 1999 and ending January 29, 2000. The unaudited results of operations of the Company for the quarter ended January 29, 2000 contains 91 days compared to 92 days for the unaudited results of operations for the quarter ended January 31, 1999. The unaudited results of operations and cash flows of the Company for the six months ended January 29, 2000 contain 182 days compared to 184 days for the unaudited results of operations and cash flows for the six months ended January 31, 1999. USE OF ESTIMATES -- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates and such differences may be material to the financial statements. Estimates are used in the Company's revenue recognition of work-in-process, allowance for doubtful accounts, self-insured claims liability, depreciation and amortization, and in the estimated lives of assets, including intangibles. RECLASSIFICATIONS -- Certain prior year amounts have been reclassified in order to conform to current year presentation. REVENUE -- Income on short-term contracts is recognized as the related work is completed. Work-in-process on unit contracts is based on management's estimate of work performed but not billed. Income on long-term contracts is recognized on the percentage-of-completion method based primarily on the ratio of contract costs incurred to date to total estimated contract costs. At the time a loss on a contract becomes known, the entire amount of the estimated ultimate loss is accrued. "Costs and estimated earnings in excess of billings" represents the excess of contract revenues recognized under the percentage-of-completion method of accounting for long-term contracts and work-in-process on unit contracts over billings to date. For those contracts in which billings exceed contract revenues recognized to date, such excesses are included in the caption "billings in excess of costs and estimated earnings." CASH AND EQUIVALENTS -- Cash and equivalents include cash balances on deposit in banks, overnight repurchase agreements, certificates of deposit, commercial paper, and various other financial instruments having an original maturity of three months or less. For purposes of the condensed consolidated statements of cash flows, the Company considers these amounts to be cash equivalents. INVENTORIES -- Inventories consist primarily of materials and supplies used to complete certain of the Company's long-term contracts. The Company values these inventories using the first-in, first-out method. The Company periodically reviews the appropriateness of the carrying value of its inventories. The Company records a reserve for obsolescence if inventories are not expected to be used in the Company's normal course of business. No reserve has been recorded in the periods presented. PROPERTY AND EQUIPMENT -- Property and equipment is stated at cost. Depreciation and amortization is computed over the estimated useful life of the assets utilizing the straight-line method. The estimated useful service lives of the assets are: buildings--20-31 years; leasehold improvements--the term of the respective lease or the estimated useful life of the improvements, whichever is shorter; vehicles--3-7 years; equipment and machinery--2-10 years; and furniture and fixtures--3-10 years. Maintenance and repairs are expensed as incurred; expenditures that enhance the value of the property or extend its useful life are capitalized. When assets are sold or retired, the cost and related accumulated 8 9 depreciation are removed from the accounts and the resulting gain or loss is included in income. INTANGIBLE ASSETS -- The excess of the purchase price over the fair market value of the tangible net assets of acquired businesses (goodwill) is amortized on a straight-line basis over 20-40 years. The appropriateness of the carrying value of goodwill is reviewed periodically by the Company at the subsidiary level. An impairment loss is recognized when the projected future cash flows are less than the carrying value of goodwill. No impairment loss has been recognized in the periods presented. Amortization expense was $1,799,275 and $83,741 for the six months ended January 29, 2000 and January 31, 1999, respectively. The intangible assets are net of accumulated amortization of $4,272,220 at January 29, 2000 and $2,472,945 at July 31, 1999. SELF-INSURED CLAIMS LIABILITY -- The Company retains the risk, up to certain limits, for automobile, general liability, workers' compensation, and employee group health claims. A liability for unpaid claims and the associated claim expenses, including incurred but not reported losses, is actuarially determined and reflected in the condensed consolidated financial statements as an accrued liability. The self-insured claims liability includes incurred but not reported losses of $5,610,747 and $4,860,659 at January 29, 2000 and July 31, 1999, respectively. The determination of such claims and expenses and the appropriateness of the related liability is continually reviewed and updated. INCOME TAXES -- The Company and its subsidiaries file a consolidated federal income tax return. Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. PER SHARE DATA -- Earnings per common share-basic is computed using the weighted-average common shares outstanding during the period. Earnings per common share-diluted is computed using the weighted-average common shares outstanding during the period and the dilutive effect of common stock options, using the treasury stock method. See Note 3. STOCK SPLITS -- On December 14, 1998, the Board of Directors declared a 3-for-2 split of the Company's common stock, effected in the form of a stock dividend paid on January 4, 1999 to stockholders of record on December 23, 1998. On January 20, 2000, the Board of Directors declared a 3-for-2 split of the Company's common stock, effected in the form of a stock dividend paid on February 16, 2000 to stockholders of record on February 2, 2000. All agreements concerning stock options provide for the issuance of additional shares due to the declaration of the stock split. An amount equal to the par value of the common shares issued plus cash paid in lieu of fractional shares was transferred from capital in excess of par value to the common stock account. All references to number of shares and to per share information have been adjusted to reflect the stock split on a retroactive basis. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS -- In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133 "Accounting for Derivative Instruments and Hedging Activities" which establishes standards for the accounting and reporting of derivative instruments, including certain derivative instruments embedded in other contracts, (collectively referred to as derivatives) and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. In June 1999, the FASB issued SFAS No. 137 which deferred the effective date of SFAS No. 133 by one year to periods beginning after June 15, 2000. Management is currently evaluating the requirements and related disclosures of SFAS No. 133. 9 10 3. COMPUTATION OF PER SHARE EARNINGS The following is a reconciliation of the numerators and denominators of the basic and diluted per share computation as required by SFAS No. 128.
For the Three Months Ended ---------------------------- January 29, January 31, 2000 1999 ----------- ----------- Net income available to common stockholders (numerator) $11,996,560 $ 6,650,150 =========== =========== Weighted-average number of common shares (denominator) 38,721,486 33,299,885 =========== =========== Earnings per common share - basic $ 0.31 $ 0.20 =========== =========== Weighted-average number of common shares 38,721,486 33,299,885 Potential common stock arising from stock options 564,041 618,253 ----------- ----------- Total shares (denominator) 39,285,527 33,918,138 =========== =========== Earnings per common share - diluted $ 0.31 $ 0.20 =========== ===========
For the Six Months Ended ---------------------------- January 29, January 31, 2000 1999 ----------- ----------- Net income available to common stockholders (numerator) $24,459,791 $14,144,293 =========== =========== Weighted-average number of common shares (denominator) 38,629,035 33,217,191 =========== =========== Earnings per common share - basic $ 0.63 $ 0.43 =========== =========== Weighted-average number of common shares 38,629,035 33,217,191 Potential common stock arising from stock options 558,978 571,536 ----------- ----------- Total shares (denominator) 39,188,013 33,788,727 =========== =========== Earnings per common share - diluted $ 0.62 $ 0.42 =========== ===========
4. ACQUISITIONS On February 3, 1999, the Company acquired all of the outstanding common stock of LOC for $10.0 million and various transaction costs. Located in Issaquah, Washington, LOC's primary line of business is the locating, marking, and mapping of underground utility facilities for cable television multiple system operators, telephone companies, and electrical and gas utilities. On March 31, 1999, the Company purchased all of the outstanding shares of common stock of ECC for $21.8 million in cash and 387,099 shares of Dycom's common stock for an aggregate purchase price of $32.5 million before various transaction costs. ECC's primary service is the engineering, construction, and maintenance of cable television systems. On April 1, 1999, the Company issued 774,192 shares with an aggregate value of $21.4 million of Dycom's common stock to the shareholders of APX in exchange for all of the outstanding common stock of APX. APX's primary line of business is providing installation and maintenance services to direct broadcast satellite providers. Both ECC and APX are located in Sturgis, Kentucky. On June 30, 1999, the Company purchased all of the outstanding shares of common stock of DDD for $1.7 million in cash and 37,344 shares of Dycom's common stock for an aggregate purchase price of $2.9 million before various transaction costs. Located in Lexington, Kentucky, DDD's primary business is the construction and maintenance of telecommunications systems under master service agreements. On August 2, 1999, the Company acquired all of the outstanding common stock of LCS for $10.0 million in cash and 73,309 shares of Dycom's common stock for an aggregate purchase price of $12.4 million before various transaction costs. Located in Rocky Mount, North Carolina, LCS's primary business is the construction and maintenance of telecommunications systems under master service agreements. On January 4, 2000, the Company acquired all of the outstanding common stock of C-2 for $18.0 million in cash and 247,555 shares of Dycom's common stock for an aggregate purchase price of $25.2 million before various transaction costs. Located in Eugene, Oregon, C-2's primary business is the construction and maintenance of telecommunications systems under master service agreements. On January 4, 2000, the Company acquired all of the outstanding common stock of ACC for $2.2 million in cash and 30,081 shares of Dycom's common stock for an aggregate purchase price of $3.0 million before various transaction costs. Located in Gold Hill, Oregon, ACC's primary business is the 10 11 4. ACQUISITIONS (CONTINUED) construction and maintenance of telecommunications systems. The Company has recorded the acquisitions of LOC, ECC, APX, DDD, LCS, C-2, and ACC using the purchase method of accounting. The operating results of LOC, ECC, APX, DDD, LCS, C-2, and ACC are included in the accompanying consolidated condensed financial statements from the date of purchase. The following unaudited pro forma summary presents the consolidated results of operations of the Company as if the acquisitions of LOC, ECC, APX, DDD, LCS, C-2, and ACC had occurred on August 1, 1998:
For the Six Months Ended ----------------------------- January 29, January 31, 2000 1999 ------------ ------------ Total revenues $329,330,356 $256,367,861 Income before income taxes 41,922,584 27,495,922 Net income 25,301,710 16,006,863 Earnings per share: Basic 0.65 0.46 Diluted 0.65 0.45
5. ACCOUNTS RECEIVABLE Accounts receivable consist of the following:
January 29, July 31, 2000 1999 ----------- ----------- Contract billings $89,478,261 $93,682,485 Retainage 4,726,069 4,497,307 Other receivables 1,189,602 1,233,519 ----------- ----------- Total 95,393,932 99,413,311 Less allowance for doubtful accounts 3,423,619 4,129,280 ----------- ----------- Accounts receivable, net $91,970,313 $95,284,031 =========== ===========
For the quarters ended January 29, 2000 and January 31, 1999, the Company reduced its allowance related to uncollectible accounts receivable by $(31,212) and $(668,436), respectively. For the six months ended January 29, 2000 and January 31, 1999, the Company reduced its allowance and incurred bad debt expense related to uncollectible accounts receivable by $(342,420) and $636,701, respectively. 11 12 6. COSTS AND ESTIMATED EARNINGS ON CONTRACTS IN PROGRESS The accompanying condensed consolidated balance sheets include costs and estimated earnings on contracts in progress, net of progress billings as follows:
January 29, July 31, 2000 1999 ----------- ----------- Costs incurred on contracts in progress $39,684,884 $27,695,302 Estimated earnings thereon 11,039,566 8,259,242 ----------- ----------- 50,724,450 35,954,544 Less billings to date 7,635,485 3,513,751 ----------- ----------- Costs and estimated earnings in excess of billings $43,088,965 $32,440,793 =========== =========== Included in the accompanying consolidated balance sheets under the captions: Costs and estimated earnings in excess of billings $43,405,249 $32,878,667 Billings in excess of costs and estimated earnings 316,284 437,874 ----------- ----------- $43,088,965 $32,440,793 =========== ===========
As stated in Note 1, the Company performs services under short-term, unit based and long-term, percentage of completion contracts. The amounts presented above aggregate the effects of these two types of contracts. 7. PROPERTY AND EQUIPMENT The accompanying condensed consolidated balance sheets include the following property and equipment:
January 29, July 31, 2000 1999 ----------- ----------- Land $ 3,246,861 $ 3,122,155 Buildings 5,858,621 5,554,542 Leasehold improvements 1,429,294 1,304,470 Vehicles 95,294,054 80,923,822 Equipment and machinery 55,229,263 49,613,877 Furniture and fixtures 9,068,807 7,641,972 ----------- ----------- Total 170,126,900 148,160,838 Less accumulated depreciation and amortization 78,329,382 68,749,956 ----------- ----------- Property and equipment, net $91,797,518 $79,410,882 =========== ===========
12 13 8. NOTES PAYABLE Notes payable are summarized by type of borrowings as follows:
January 29, July 31, 2000 1999 ----------- ----------- Bank Credit Agreement: Term Loan $10,750,000 $11,750,000 Capital lease obligations 3,160 233,619 Equipment loans 936,929 437,362 ----------- ----------- Total 11,690,089 12,420,981 Less current portion 2,525,419 2,438,860 ----------- ----------- Notes payable -- non-current $ 9,164,670 $ 9,982,121 =========== ===========
On April 27, 1999, the Company signed an amendment to its bank credit agreement increasing the total facility to $175.3 million and extending the facility's maturity to April 2002. The amended bank credit agreement provides for (i) a $17.5 million standby letter of credit facility, (ii) a $50.0 million revolving working capital facility, (iii) a $12.8 million five-year term loan, and (iv) a $95.0 million equipment acquisition and small business purchase facility. The Company is required to pay an annual non-utilization fee equal to 0.15% of the unused portion of the revolving working capital and the equipment acquisition and small business purchase facilities. In addition, the Company pays annual agent and facility commitment fees of $15,000 and $135,000, respectively. The Company had total outstanding standby letters of credit of $13.7 million at January 29, 2000, including letters of credit issued to the Company's insurance administrators as part of its self-insurance program of $13.4 million and miscellaneous letters of credit of $0.3 million. The revolving working capital facility bears interest, at the option of the Company, at the bank's prime interest rate minus 1.125% or LIBOR plus 1.25%. As of January 29, 2000, there was no outstanding balance on this facility resulting in an available borrowing capacity of $50 million. The outstanding loans under the equipment acquisition and small business purchase facility bear interest, at the option of the Company, at the bank's prime interest rate minus 0.75% or LIBOR plus 1.5%. The advances under the equipment acquisition and small business purchase facility are converted to term loans with maturities not to exceed 48 months. The outstanding principal on the equipment term loans is payable in monthly installments through February 2001. As of January 29, 2000, there was no outstanding balance on this facility resulting in an available borrowing capacity of $71.1 million. The available borrowing capacity on this non-revolving facility has been reduced due to prior borrowings which have been repaid in full. The outstanding principal under the term loan bears interest at the bank's prime interest rate minus 0.50% (7.94% at January 29, 2000). Principal and interest is payable in semiannual installments through April 2003. The amount outstanding on the term loan was $10.8 million at January 29, 2000. The amended bank credit agreement contains restrictions which, among other things, requires maintenance of certain financial ratios and covenants, restricts encumbrances of assets and creation of indebtedness, and limits the payment of cash dividends. Cash dividends are limited to 50% of each fiscal year's after-tax profits. No cash dividends were paid during the periods presented. At January 29, 2000, the Company was in compliance with all financial covenants and conditions. All obligations under the amended credit agreement are unconditionally guaranteed by the Company's subsidiaries and secured by a security interest in certain property and assets of the Company and its subsidiaries. In addition to the borrowings under the amended bank credit agreement, certain subsidiaries have outstanding obligations under capital leases and other equipment financing arrangements. The obligations are payable in monthly installments expiring at various dates through September 2000. Interest costs incurred on notes payable, all of which were expensed during the three months ended January 29, 2000 and January 31, 1999 were $256,961 and $316,530, respectively. Interest costs for the six months ended January 29, 2000 and January 31, 1999 were $465,728 and $665,080, respectively. 13 14 9. COMMITMENTS AND CONTINGENCIES The federal employment tax returns for one of the Company's subsidiaries are currently being audited by the Internal Revenue Service ("IRS"). As a result of the audit, the Company received an examination report from the IRS in October 1999 proposing a $6.1 million tax deficiency. At issue, according to the examination report, is the taxpayer's payment of certain employee allowances for the years 1995 through 1997 without reporting such payment as wages on the employees' W-2 Forms. The Company intends to vigorously defend its position in this matter and believes it has a number of legal defenses available to it which would significantly reduce or possibly eliminate the proposed tax deficiency, although there can be no assurance in this regard. Additionally, the Company believes that the ultimate disposition of this matter will not have a material adverse effect on its consolidated financial statements. In the normal course of business, certain subsidiaries of the Company have pending and unasserted claims. It is the opinion of the Company's management, based on the information available at this time, that these claims will not have a material adverse impact on the Company's consolidated financial statements. 10. SEGMENT INFORMATION The Company operates in one reportable segment as a specialty contractor. The Company provides engineering, placement and maintenance of aerial, underground, and buried fiber-optic, coaxial and copper cable systems owned by local and long distance communications carriers, competitive local exchange carriers, and cable television multiple system operators. Additionally, the Company provides similar services related to the installation of integrated voice, data, and video local and wide area networks within office buildings and similar structures and also provides underground locating services to various utilities and provides construction and maintenance services to electrical utilities. Each of these services is provided by various of the Company's subsidiaries and discrete financial information in connection with each of such services is not provided to management. The following table presents information regarding annual revenues by type of customer:
For the Three Months Ended ------------------------------ January 29, January 31, 2000 1999 ------------ ------------ Telecommunications $143,745,876 $ 87,340,106 Electrical utilities 6,437,056 5,152,228 Various customers - Utility line locating 8,198,334 4,234,950 ------------ ------------ Total contract revenues $158,381,266 $ 96,727,284 ============ ============
For the Six Months Ended ------------------------------ January 29, January 31, 2000 1999 ------------ ------------ Telecommunications $286,481,865 $185,711,806 Electrical utilities 13,848,475 10,126,657 Various customers - Utility line locating 18,955,201 9,501,977 ------------ ------------ Total contract revenues $319,285,541 $205,340,440 ============ ============
14 15 11. SUBSEQUENT EVENT On March 8, 2000, the Company acquired all of the outstanding common stock of Neils Fugal Sons Company for 2,726,210 shares of Dycom's common stock. Located in Pleasant Grove, Utah, Neils Fugal Sons Company's primary business is the construction and maintenance of telecommunications systems. The Company intends to record this transaction as a pooling of interests. 15 16 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of the Company's consolidated financial condition and results of operations. The discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto. Results of Operations The following table sets forth, as a percentage of contract revenues earned, certain items in the Company's Condensed Consolidated Statements of Operations for the periods indicated:
For the Three Months Ended ----------------------------- January 29, January 31, 2000 1999 ----------- ----------- Contract revenues earned 100.0% 100.0% ----- ----- Expenses: Cost of earned revenues, excluding depreciation 75.6 76.0 General and administrative 8.1 8.6 Depreciation and amortization 4.4 4.3 ----- ----- Total 88.1 88.9 ----- ----- Interest income, net 0.5 0.1 Other income, net 0.1 0.3 ----- ----- Income before income taxes 12.5 11.5 ----- ----- Provision for income taxes 5.0 4.6 ----- ----- Net Income 7.5% 6.9% ===== =====
16 17
For the Six Months Ended ---------------------------- January 29, January 31, 2000 1999 ----------- ----------- Contract revenues earned 100.0% 100.0% ----- ----- Expenses: Cost of earned revenues, excluding depreciation 75.4 75.3 General and administrative 8.1 9.5 Depreciation and amortization 4.4 4.0 ----- ----- Total 87.9 88.8 ----- ----- Interest income, net 0.5 0.2 Other income, net 0.1 0.2 ----- ----- Income before income taxes 12.7 11.6 ----- ----- Provision for income taxes 5.0 4.7 ----- ----- Net Income 7.7% 6.9% ===== =====
REVENUES. Contract revenues increased $61.7 million, or 63.8%, to $158.4 million in the quarter ending January 29, 2000 from $96.7 million in the quarter ended January 31, 1999. Of this increase, $56.4 million was attributable to specialty contracting services provided to telecommunications companies, $1.3 million was attributable to construction and maintenance services provided to electrical utilities and $4.0 million was attributable to underground utility locating services provided to various utilities, reflecting an increase in overall market demand for the Company's services. During the quarter ended January 29, 2000, the Company recognized $143.8 million of contract revenues from telecommunications services as compared to $87.3 million for the quarter ended January 31, 1999. The increase in the Company's telecommunications service revenues reflects an increased volume of projects and activities associated with cable television services, and an increase in services performed in the design and installation of broadband networks, telephone engineering services, telephony splicing services, premise wiring services, and revenues from services performed under master service agreements. The Company recognized contract revenues of $6.4 million from electric construction and maintenance services in the quarter ended January 29, 2000 as compared to $5.2 million in the quarter ended January 31, 1999. The Company recognized contract revenues of $8.2 million from underground utility locating services in the quarter ended January 29, 2000 as compared to $4.2 million in the quarter ended January 31, 1999, an increase of 95.2%. Acquisitions subsequent to January 31, 1999 contributed $28.6 million of contract revenues during the quarter ended January 29, 2000. Contract revenues from multi-year master service agreements and other long-term agreements represented 84.4% of total contract revenues in the quarter ended January 29, 2000 as compared to 87.9% in the quarter ended January 31, 1999, of which contract revenues from multi-year master service agreements represented 53.0% of total contract revenues in the quarter ended January 29, 2000 as compared to 46.2% in the quarter ended January 31, 1999. Contract revenues increased $114.0 million, or 55.5%, to $319.3 million in the six months ending January 29, 2000 from $205.3 million in the six months ended January 31, 1999. Of this increase, $100.8 million was attributable to specialty contracting services provided to telecommunications companies, $3.7 million was attributable to construction and maintenance services provided to electrical utilities and $9.5 million was attributable to underground utility locating services provided to various utilities, reflecting an increase in overall market demand for the Company's services. During the six months ended January 29, 2000, the Company recognized $286.5 million of contract revenues from telecommunications services as compared to $185.7 million for the six months ended January 31, 1999. The increase in the Company's telecommunications service revenues reflects an increased volume of projects and activities associated with cable television services, and an increase in services performed in the design and installation of broadband networks, telephone engineering services, telephony splicing services, premise wiring services, and revenues from services performed under master service agreements. The Company recognized contract revenues of $13.8 million from electric construction and maintenance services in the six months ended January 29, 2000 as compared to $10.1 million in the six months ended 17 18 January 31, 1999. The Company recognized contract revenues of $19.0 million from underground utility locating services in the quarter ended January 29, 2000 as compared to $9.5 million in the quarter ended January 31, 1999, an increase of 100%. Acquisitions subsequent to January 31, 1999 contributed $55.3 million of contract revenues during the quarter ended January 29, 2000. Contract revenues from multi-year master service agreements and other long-term agreements represented 83.2% of total contract revenues in the six months ended January 29, 2000 as compared to 88.1% in the quarter ended January 31, 1999, of which contract revenues from multi-year master service agreements represented 49.6% of total contract revenues in the six months ended January 29, 2000 as compared to 47.3% in the six months ended January 31, 1999. COSTS OF EARNED REVENUES. Costs of earned revenues increased $46.2 million to $119.7 million in the quarter ended January 29, 2000 from $73.5 million in the quarter ended January 31, 1999, but decreased as a percentage of contract revenues from 76.0% to 75.6%. Costs of earned revenues increased $86.0 million to $240.6 million in the six months ended January 29, 2000 from $154.6 million in the six months ended January 31, 1999, and increased as a percentage of contract revenues to 75.4% from 75.3%. GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses increased $4.4 million to $12.8 million in the quarter ended January 29, 2000 from $8.4 million in the quarter ended January 31, 1999. The increase in general and administrative expenses for the quarter ended January 29, 2000, as compared to the quarter ended January 31, 1999, was primarily attributable to increases in salaries, employee benefits, and payroll taxes of $2.1 million, legal and professional fees of $0.2 million, and other general and administrative expenses of $1.5 million and an increase in the provision for doubtful accounts of $0.6 million. General and administrative expenses decreased as a percentage of contract revenues to 8.1% from 8.6% in the quarter ended January 29, 2000 as compared to the quarter ended January 31, 1999. General and administrative expenses increased $6.5 million to $26.0 million in the six months ended January 29, 2000 from $19.5 million in the six months ended January 31, 1999. The increase in general and administrative expenses for the quarter ended January 29, 2000, as compared to the quarter ended January 31, 1999, was primarily attributable to increases in salaries, employee benefits, and payroll taxes of $4.4 million, legal and professional fees of $0.7 million, and other general and administrative expenses of $2.4 million offset by a reduction in the allowance for doubtful accounts of $1.0 million. The change in the provision for doubtful accounts includes a reduction in the Company's provision of $0.3 million during the six months ended January 29, 2000. General and administrative expenses decreased as a percentage of contract revenues to 8.1% from 9.5% in the six months ended January 29, 2000 as compared to the six months ended January 31, 1999. DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased $2.9 million to $7.0 million in the quarter ending January 29, 2000 as compared to $4.1 million in the quarter ended January 31, 1999, and increased as a percentage of contract revenues to 4.4% from 4.3%. The increase in amounts reflects the depreciation of additional capital expenditures incurred in the ordinary course of business and the amortization of goodwill related to acquisitions made in fiscal 1999 and 2000. Depreciation and amortization increased $6.0 million to $14.1 million in the six months ending January 29, 2000 as compared to $8.1 million in the six months ended January 31, 1999, and increased as a percentage of contract revenues to 4.4% from 4.0%. The increase in amounts reflects the depreciation of additional capital expenditures incurred in the ordinary course of business and the amortization of goodwill related to acquisitions made in fiscal 1999 and 2000. INCOME TAXES. The provision for income taxes was $7.9 million in the three months ended January 29, 2000 as compared to $4.5 million in the same period last year. The Company's effective tax rate was 39.8% in the three months ended January 29, 2000 as compared to 40.4% in the same period last year. The effective tax rate differs from the statutory rate due to state income taxes, the amortization of intangible assets that do not provide a tax benefit, and other non-deductible expenses for tax purposes. The provision for income taxes was $16.1 million in the six months ended January 29, 2000 as compared to $9.6 million in the same period last year. The Company's effective tax rate was 39.6% in the six months ended January 29, 2000 as compared to 40.5% in the same period last year. The effective tax rate differs from the statutory rate due to state income taxes, the amortization of intangible assets that do not provide a tax benefit, and other non-deductible expenses for tax purposes. 18 19 Liquidity and Capital Resources The Company's needs for capital are attributable primarily to its needs for equipment to support its contractual commitments to customers and its needs for working capital sufficient for general corporate purposes. Capital expenditures have been financed by operating and capital leases, bank borrowings and internal cash flow. To the extent that the Company seeks to grow by acquisitions that involve consideration other than Company stock, the Company's capital requirements may increase, although the Company is not currently subject to any commitments or obligations with respect to any acquisitions. The Company's sources of cash have historically been from operating activities, equity offerings, bank borrowings, and from proceeds arising from the sale of idle and surplus equipment and real property. For the six months ended January 29, 2000, net cash provided by operating activities was $28.1 million compared to $24.3 million for the six months ended January 31, 1999. Net income and non-cash charges are the primary sources of operating cash flow. Working capital items used $10.5 million of operating cash flow for the six-month period ended January 29, 2000 principally through an increase in unbilled revenues, accrued self-insurance claims, and other liabilities, offset by a decrease in accounts receivable and other assets, income taxes payable, and customer advances. In the six months ended January 29, 2000, net cash used in investing activities was $47.0 million as compared to $26.0 million for the same period last year. For the six months ended January 29, 2000, capital expenditures of $20.3 million were for the normal replacement of equipment and purchases for the start up of certain long-term contracts. In August 1998, the Company purchased a 13.0% equity interest in Witten Technologies, Inc. ("Witten") for $3.0 million. Witten has developed, and is the owner of, various proprietary technologies and materials relating to ground-penetrating radar and the use of other electromagnetic frequencies. In addition to the equity received, the Company has acquired an exclusive license to market certain technologies within the United States and Canada. The Company's investment in Witten is being accounted for using the equity method of accounting. On August 2, 1999, the Company acquired all of the outstanding common stock of LCS for $10.0 million in cash and 73,309 shares of Dycom's common stock for an aggregate purchase price of $12.4 million before various transaction costs. Located in Rocky Mount, North Carolina, LCS's primary business is the construction and maintenance of telecommunications systems under master service agreements. On January 4, 2000, the Company acquired all of the outstanding common stock of C-2 for $18.0 million in cash and 247,555 shares of Dycom's common stock for an aggregate purchase price of $25.2 million before various transaction costs. Located in Eugene, Oregon, C-2's primary business is the construction and maintenance of telecommunications systems under master service agreements. On January 4, 2000, the Company acquired all of the outstanding common stock of ACC for $2.2 million in cash and 30,081 shares of Dycom's common stock for an aggregate purchase price of $3.0 million before various transaction costs. Located in Gold Hill, Oregon, C-2's primary business is the construction and maintenance of telecommunications systems. In the six months ended January 29, 2000, net cash provided from financing activities was $0.1 million, which was primarily attributable to the proceeds from the exercise of stock options net of principal payments on long-term notes. On April 27, 1999, the Company signed an amendment to its bank credit agreement increasing the total facility to $175.3 million and extending the facility's maturity to April 2002. The amended bank credit agreement provides for (i) a $17.5 million standby letter of credit facility, (ii) a $50.0 million revolving working capital facility, (iii) a $12.8 million five-year term loan, and (iv) a $95.0 million equipment acquisition and small business purchase facility. The Company is required to pay an annual non-utilization fee equal to 0.15% of the unused portion of the revolving working capital and the equipment acquisition and small business purchase facilities. In addition, the Company pays annual agent and facility commitment fees of $15,000 and $135,000, respectively. The Company had total outstanding standby letters of credit of $13.7 million at January 29, 2000, including letters of credit issued to the Company's insurance administrators as part of its self-insurance program of $13.4 million and miscellaneous letters of credit of $0.3 million. The revolving working capital facility bears interest, at the option of the company, at the bank's prime interest rate minus 1.125% or LIBOR plus 1.25%. As of January 29, 2000, there was no outstanding balance on this facility resulting in an available borrowing capacity of $50.0 million. The outstanding loans under the equipment acquisition and small business purchase facility bear interest, at the option of the Company, at the bank's prime interest rate minus 0.75% or LIBOR plus 1.50%. The advances under the equipment acquisition and small business purchase facility are converted to term loans with maturities not to exceed 48 months. The outstanding principal on the equipment term loans is payable in quarterly installments though February 2001. There were no amounts outstanding on the equipment acquisition and small business purchase 19 20 facility at January 29, 2000, resulting in an available borrowing capacity of $71.1 million. The available borrowing capacity on this non-revolving facility has been reduced due to prior borrowings which have been repaid in full. The outstanding principal under the term loan bears interest at the bank's prime interest rate minus 0.50% (7.94% at January 29, 2000). Principal and interest is payable in semiannual installments through April 2003. The amount outstanding on the term loan was $10.8 million at January 29, 2000. The amended bank credit agreement requires the Company to maintain certain financial covenants and conditions, as well as restricting the encumbrances of assets and the creation of additional indebtedness and limits the payment of cash dividends. No cash dividends were paid during the periods presented. At January 29, 2000, the Company was in compliance with all covenants and conditions under the credit agreement. The Company believes its capital resources, together with existing cash balances, to be sufficient to meet its financial obligations, including the scheduled debt payments under the amended bank credit agreement and operating lease commitments, and to support the Company's normal replacement of equipment at its current level of business for at least the next twelve months. The Company's future operating results and cash flows may be affected by a number of factors including the Company's success in bidding on future contracts and the Company's continued ability to effectively manage controllable costs. Special Note Concerning Forward Looking Statements This Quarterly Report on Form 10-Q, including the Notes to Condensed Financial Statements and this Management's Discussion and Analysis of Financial Condition and Results of Operations, contains forward looking statements. The words "believe", "expect", "anticipate", "intends", "forecast", "project", and similar expressions identify forward looking statements. Such statements may include, but may not be limited to, the anticipated outcome of contingent events, including litigation, projections of revenues, income or loss, capital expenditures, plans for future operations, growth and acquisitions, financial needs or plans and the availability of financing, and plans relating to services of the Company, as well as assumptions relating to the foregoing. Such forward looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. YEAR 2000 - The Company did not experience any significant year 2000 related problems. The total cost of addressing year 2000 issues was approximately $2 million. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company considered the provision of Financial Reporting Release No. 48 "Disclosure of Accounting Policies for Derivative Financial Instruments and Derivative Commodity Instruments, and disclosure of Quantitative and Qualitative Information about Market Risk Inherent in Derivative Financial Instruments, Other Financial Instruments and Derivative Commodity Instruments." The Company had no holdings of derivative financial or commodity instruments at January 29, 2000. A review of the Company's other financial instruments and risk exposures at that date revealed that the Company had exposure to interest rate risk. At January 29, 2000, the Company performed sensitivity analyses to assess the potential effect of this risk and concluded that near-term changes in interest rates should not materially affect the Company's financial position, results of operations, or cash flows. 20 21 PART II. OTHER INFORMATION - -------------------------- Item 2. Changes in Securities and Use of Proceeds On January 4, 2000, the Company issued 247,555 and 30,081 shares, respectively, of the Company's common stock for the acquisitions of C-2 and ACC. These shares were issued in a manner not involving a public offering and therefore not requiring registration under the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof. Item 4. Submission of Matters to a Vote of Security Holders. An annual meeting of shareholders of the Company was held on November 22, 1999 to consider and take action on the election of four directors and the approval of an amendment to the Company's Articles of Incorporation to increase the number of authorized shares of the Company's common stock from 50,000,000 shares to 150,000,000 shares. The Company's nominee, Mr. Louis W. Adams, Jr., was elected. Mr. Adams received 22,469,261 votes for and 380,083 against. The Company's nominee, Mr. Thomas G. Baxter, was elected. Mr. Baxter received 22,478,783 votes for and 370,561 against. The Company's nominee, Mr. Thomas R. Pledger, was elected. Mr. Pledger received 22,493,711 votes for and 355,633 against. The Company's nominee, Mr. Joseph M. Schell, was elected. Mr. Schell received 22,423,633 votes for and 425,711 against. The directors whose terms continue after the annual meeting are Messrs. Nielsen, Revell, and Younkin. An amendment to the Company's Articles of Incorporation to increase the number of authorized shares of the Company's common stock from 50,000,000 shares to 150,000,000 shares was approved. The amendment received 18,169,836 votes for and 4,599,844 against with 79,664 votes abstaining. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibits furnished pursuant to the requirements of Form 10-Q: Number Description ------ ----------- (11) Statement re computation of per share earnings All information required by Exhibit 11 is presented within Note 3 of the Company's condensed consolidated financial statements in accordance with the provisions of SFAS No. 128. (27) Financial Data Schedule (b) Reports On Form 8-K No reports of Form 8-K were filed on behalf of the Registrant during the quarter ended January 29, 2000. 21 22 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DYCOM INDUSTRIES, INC. Registrant Date: March 10, 2000 /s/ Steven E. Nielsen ----------------------------------- Steven E. Nielsen President and Chief Executive Officer Date: March 10, 2000 /s/ Thomas R. Pledger ----------------------------------- Thomas R. Pledger Executive Chairman Date: March 10, 2000 /s/ Richard L. Dunn ----------------------------------- Richard L. Dunn Senior Vice President and Chief Financial Officer Date: March 10, 2000 /s/ Randal L. Martin ----------------------------------- Randal L. Martin Vice President, Controller, and Principal Accounting Officer 22 EX-27 2 FINANCIAL DATA SCHEDULE
5 6-MOS JUL-29-2000 JAN-29-2000 79,245,779 0 94,204,330 3,423,619 55,765,425 235,112,882 170,126,900 78,329,382 417,833,799 71,857,002 11,690,089 0 0 12,989,377 311,737,006 417,833,799 0 319,285,541 0 240,645,195 14,146,965 0 465,728 40,515,558 16,055,767 24,459,791 0 0 0 24,459,791 0.63 0.62
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