8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): September 14, 2006

Dycom Industries, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

Florida	001-10613	591277135
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
11770 US Highway 1, Suite 101, Palm Beach Gardens, Florida		33408
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 561-627-7171

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01 Other Events.

On September 14, 2006, Dycom Industries, Inc., a Florida corporation ("Dycom") announced that it acquired Cable Express Holding Company and its subsidiaries ("Cable Express"), including Broadband Installation Services, Inc, through an agreement and plan of merger dated September 14, 2006 ("Merger Agreement"). Cable Express installs and maintains customer premise equipment, including set top boxes and cable modems, for leading cable multiple system operators. Dycom purchased Cable Express for cash of approximately $54.7 million and $8.7 million of assumed indebtedness. The cash portion of the acquisition was financed from cash on hand and borrowings under Dycom’s revolving credit facility. Cable Express will operate as a wholly owned subsidiary of Dycom. Dycom and Cable Express made certain representations and warranties to each other as part of the Merger Agreement. Subject to certain limitations, the stockholders of Cable Express have agreed to indemnify Dycom against losses from breaches of the representations and warranties of Cable Express contained in the Merger Agreement.

On September 14, 2006, Dycom issued a press release announcing the acquisition of Cable Express, a copy of which is attached hereto as Exhibit 99.1 and is incorporated in its entirety by reference herein.

On September 18, 2006, Dycom held a conference call regarding the acquisition of Cable Express. A transcript of that call is attached hereto as Exhibit 99.2 and is incorporated in its entirety by reference herein.

Item 9.01 Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

None.

(b) Pro forma financial information.

None.

(c) Exhibits. The following exhibits are filed as part of this Report on Form 8-K:

Exhibit No. Description of Exhibit
-------------- ---------------------------------------------------------------

99.1 Press release of Dycom Industries, Inc. issued on September 14, 2006.
99.2 Transcript of Dycom Industries, Inc. Acquisition Announcement Conference Call, which took place on September 18, 2006.

This Form 8-K contains forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act. These statements are based on management’s current expectations, estimates and projections. Forward-looking statements are subject to risks and uncertainties that may cause actual results in the future to differ materially from the results projected or implied in any forward-looking statements contained in this Form 8-K. Such risks and uncertainties include: business and economic conditions in the telecommunications industry affecting our customers, whether our recent acquisition can be efficiently integrated into our existing operations, the anticipated outcome of other contingent events, including litigation, as well as other risks detailed in our filings with the Securities and Exchange Commission.

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 hereunto duly authorized.

	Dycom Industries, Inc.
September 19, 2006	By:	Richard L. Dunn
		Name: Richard L. Dunn
		Title: Senior Vice President and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
99.1	Press release of Dycom Industries, Inc. issued on September 14, 2006.
99.2	Transcript of Dycom Industries, Inc. Acquisition Announcement Conference Call, which took place on September 18, 2006.

EX-99.1

Exhibit 99.1

Dycom Industries, Inc.

11770 U.S. Highway 1, Suite 101 / Palm Beach Gardens, Florida 33408 / (561) 627-7171

N E W S    R E L E A S E

FOR IMMEDIATE RELEASE	Contact:	Steven E. Nielsen, President and CEO
		Richard L. Dunn, Senior Vice President and CFO
Palm Beach Gardens, Florida		(561) 627-7171	September 14, 2006

DYCOM ACQUIRES CABLE EXPRESS HOLDING COMPANY AND ANNOUNCES
A CONFERENCE CALL TO DISCUSS THE ACQUISITION

PALM BEACH GARDENS, FLORIDA (September 14, 2006) – DYCOM INDUSTRIES, INC. (NYSE: DY) announced today that it had acquired Cable Express Holding Company and its subsidiaries (“Cable Express”), including Broadband Installation Services, Inc. Cable Express installs and maintains customer premise equipment, including set top boxes and cable modems, for leading cable multiple system operators. Dycom purchased Cable Express for cash of approximately $54.7 million and $8.7 million of assumed indebtedness. The cash portion of the acquisition was financed from cash on hand and borrowings under Dycom’s revolving credit facility. Cable Express will operate as a wholly owned subsidiary of Dycom.

Cable Express Holding Company was a portfolio company of H.I.G. Capital, LLC, a private equity firm based in Miami, Florida with over $2.5 billion in equity capital under management.

A Tele-Conference call to discuss this acquisition will be hosted at 9:00 a.m. (ET), Monday, September 18, 2006; call 800-553-0358 (United States) or 612-332-0932 (International) and request the “Dycom Recent Acquisition” conference call. A live webcast of the conference call will be available at http://www.dycomind.com. If you are unable to attend the conference call at the scheduled time, a replay of the live webcast will also be available at http://www.dycomind.com until Wednesday, October 18, 2006.

Dycom is a leading provider of specialty contracting services throughout the United States. These services include engineering, construction, maintenance and installation services to telecommunications providers, underground locating services to various utilities including telecommunications providers, and other construction and maintenance services to electric utilities and others.

Exhibit 99.2

Transcript of Dycom Industries, Inc. Acquisition Announcement Conference Call, which took place on September 18, 2006.

Operator
Ladies and gentlemen, thank you for standing by and welcome to the Dycom recent acquisition call.
At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Instructions will be given at that time. [OPERATOR INSTRUCTIONS] As a reminder, this conference is being recorded. I’d now like to turn the conference over to our host, President and CEO, Steven Nielsen. Please go ahead, sir.

Steven Nielsen - Dycom Industries, Inc. — President, CEO
Thank you, Marla. Good morning, everyone. I’d like to thank you for attending our acquisition review conference call. With me we have in attendance, Richard Dunn, our Chief Financial Officer. I’ll now turn the call over to Dick.

Richard Dunn - Dycom Industries, Inc. — CFO
Thank you, Steve. Statements made in the course of this conference call that state the Company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. It’s important to note that the Company’s actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company’s SEC filings including but not limited the Company’s Annual Report on Form 10-K for the year-ended July 29, 2006. The Company does not undertake to update forward-looking information.
Steve?

Steven Nielsen - Dycom Industries, Inc. — President, CEO
Thanks, Dick. On September 14th, we announced the closing of the acquisition of Cable Express Holding, whereby Cable Express became a wholly owned subsidiary of Dycom. The purpose of this call is to provide additional information regarding this acquisition.

Cable Express is headquartered in Westerville, Ohio, near Columbus and installs and maintains customer premise equipment for cable television multiple system operators throughout the country. It is generally viewed as one of the largest such firms in the United States.

The acquisition of Cable Express has enhanced our scale and growth opportunities, facilitates our participation in the deployment of new residential technologies, provided significant customer diversification and expanded our geographic footprint. We expect the acquisition to yield synergies and present margin expansion opportunities.

Cable Express currently has over 1,000 employees, producing essentially all of its revenue with in-house personnel. It is forecast to generate in excess of $73 million in revenues for calendar year 2006. It significantly increases our participation in our customers routine and recurring expenditures and positions Dycom to continue to benefit from the accelerating convergence of the cable and telephone industries and the residential opportunities that convergence will create.

Cable Express’ leading customers include Time Warner, Insight, Comcast, Cablevision and Bright House. It has a strong geographic presence in the Northeast and Midwest with smaller operations in the Southeast. Its footprint meshes nicely with our existing cable construction operations and we anticipate some opportunities to develop joint service offerings to customers evaluating a single source for inside and outside plant services.

After initial integration expenses we expect cash flow margins from operating activities, which equal or exceed current Dycom cash flow margins, although we expect those margins will be seasonally stronger from May through November each year. We anticipate that the acquisition will be accretive no later than our April quarter. Our purchase multiple for Cable Express was attractive and well within our historical parameters as measured by a multiple of enterprise value to first year cash flow.

Now Marla, we will open the call for questions.

Operator
Thank you. [OPERATOR INSTRUCTIONS] One moment, please, for the first question. Our first question will come from the line of John Rogers with D.A. Davidson. Please go ahead.

John Rogers - D.A. Davidson & Company
Hi, good morning.

Steven Nielsen - Dycom Industries, Inc. — President, CEO
Good morning, John.

John Rogers - D.A. Davidson & Company
If you could just explain a little bit further about Cable Express’ business. Is it almost all residential?

Steven Nielsen - Dycom Industries, Inc. — President, CEO
It is almost all residential, John. It is a very similar business to the Prince acquisition that we did last December.

John Rogers - D.A. Davidson & Company
And between Cable Express and Prince, is that all of your in-home van business, or these van rolls?

Steven Nielsen - Dycom Industries, Inc. — President, CEO
Well, we provide some of that service on the telco side of the business and, of course, we have historically provided similar service to DirecTV, so it’s not all of it but it’s a substantial portion of it.

John Rogers - D.A. Davidson & Company
Can you give us a sense of the proportion of your business now that’s involved in —

Steven Nielsen - Dycom Industries, Inc. — President, CEO
Well, I think we’re looking at kind of a current run rate of $180 to $200 million in that business.

John Rogers - D.A. Davidson & Company
Okay. And in terms of the geographic areas now, I mean, you obviously have a big footprint and would you say you’re the largest in the country between this?

Steven Nielsen - Dycom Industries, Inc. — President, CEO
I would say if we’re not the largest, we’re pretty close on the cable side. I think clearly if you expanded the market into the satellite side we may not be the largest but I think considering the MSOs, if we’re not there, we’re pretty close.

John Rogers - D.A. Davidson & Company
Okay. Great. Thank you.

Operator
And our next question will come from the line of Alex Rygiel with Friedman, Billings, Ramsey. Please go ahead.

Alex Rygiel - Friedman, Billings, Ramsey Group
Thank you. Good morning, Steve.

Steven Nielsen - Dycom Industries, Inc. — President, CEO
Good morning.

Alex Rygiel - Friedman, Billings, Ramsey Group
Quick question. On a pro forma basis, can you break down your revenue mix of fulfillment, construction and locating and then take it one step further and talk about long-term margins and a range in which you expect each segment to be offering you?

Steven Nielsen - Dycom Industries, Inc. — President, CEO
Well, we really have not talked about our business as segments because we’re in a single segment. We do talk about customers and we have provided kind of telephone and cable and locating and I think what this does, at least from our view of the business, is it continues to significantly expand our relationships with cable operators and that was, you know, from a customer perspective, that was our primary objective here. Now, with respect to margin, the way we’ve always thought about it is not with respect to the industry, but really, the amount of capital that’s involved in each business and in this business as we’ve said, we think we’ve got margins that will at least be equal to if not exceed and we think they’re probably in excess currently, but it’s a business that requires less capital just because it’s a technician business than some of our construction businesses. So on a return on capital basis it’s pretty attractive.

Alex Rygiel - Friedman, Billings, Ramsey Group
Now, if you look at your reported margins right now they ‘re down quite significantly from a few years back when they peaked. Are you suggesting that the fulfillment and locating margins long-term on average will be right around where we’re at today or a little bit higher?

Steven Nielsen - Dycom Industries, Inc. — President, CEO
No, I think we can expand them just like in our other businesses. I don’t think, all things being equal, a business that requires less capital is not going to have as high an EBITDA margin as one that does, but from a return perspective, they’ll be very attractive.

Alex Rygiel - Friedman, Billings, Ramsey Group
And on the fulfillment side including both cable, telecom and satellite, can you quantify the number of employees you have and talk about the makeup of their labor, any union members and so on?

Steven Nielsen - Dycom Industries, Inc. — President, CEO
It’s in excess of about 3,000 currently and there’s a small portion of that 3,000 that is represented by a labor union and that’s not surprising in the Northeast where it’s pretty typical.

Alex Rygiel - Friedman, Billings, Ramsey Group
Great. Thank you.

Operator
[OPERATOR INSTRUCTIONS] And we do have a question from the line of Alan Mitrani with Sylvan Lake Assets. Please go ahead.

Alan Mitrani - Sylvan Lake Asset Management
You’ve made several acquisitions over the last few years from private equity companies. Can you talk about the acquisition environment? Is this what we’re going to be looking at? There’s no more small mom and pops to buy but it’s all private equity firms holding auctions?

Steven Nielsen - Dycom Industries, Inc. — President, CEO
Well, number one, as we talked about in Prince, that was not an auction. While there was a formal process involved with Cable Express, we didn’t find it overly burdensome. I think, Alan, that there are still private businesses out there. It just so happens that when we’ve done a grand total of four deals in the last three years that it just so happens that three of those were owned by private equity. I don’t know that sample’s big enough to draw a conclusion from.

Alan Mitrani - Sylvan Lake Asset Management
The reason I ask is, do you find that it’s harder to extract further synergies and make it more accretive when you’re buying from a private equity where they’re a little more picked over as opposed to buying smaller deals like you did five and six years ago?

Steven Nielsen - Dycom Industries, Inc. — President, CEO
No, actually I would say that based on the capital structure of the businesses that we haven’t found these to be anymore difficult to generate synergies out of than the private businesses.

Alan Mitrani - Sylvan Lake Asset Management
Okay. Great. And did you give us a per share amount or an EBITDA amount in terms of what we should expect for calendar ‘06 or calendar ‘07 for the Company?

Steven Nielsen - Dycom Industries, Inc. — President, CEO
At this point we’re working through the integration and getting all of the final purchase accounting done, Alan, we haven’t changed our guidance based on the acquisition, although it is accretive or we wouldn’t be doing it.

Alan Mitrani - Sylvan Lake Asset Management
Thank you.

Operator
And we do have a follow-up from Alex Rygiel with Friedman, Billings, Ramsey. Please go ahead.

Alex Rygiel - Friedman, Billings, Ramsey Group
Steve, is any customer greater than 25% of its revenue?

Steven Nielsen - Dycom Industries, Inc. — President, CEO
Yeah, this is a company that will bring significant revenue, about two-thirds of its businesses with Time Warner, with the balance, you know, divided between Cablevision and Comcast and Insight. So for us, as we talked about earlier, it brings some meaningful diversification in that it is bringing substantial presence with Time Warner to the business. Thank you.

Operator
[OPERATOR INSTRUCTIONS]

Steven Nielsen - Dycom Industries, Inc. — President, CEO
Well, we appreciate everybody’s interest in the call and we’ll look forward to speaking with you on our next earnings call the week of Thanksgiving. Thank you.

Operator
Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.