MENU
Investors Menu

News Releases

« Back to News Releases
Dycom Industries, Inc. Announces Fiscal 2019 Third Quarter Results And Provides Guidance For The Next Fiscal Quarter

PALM BEACH GARDENS, Fla., Nov. 20, 2018 /PRNewswire/ -- Dycom Industries, Inc. (NYSE: DY) announced today its results for the third quarter and nine months ended October 27, 2018. The Company reported:

  • Contract revenues of $848.2 million for the quarter ended October 27, 2018, compared to $756.2 million for the quarter ended October 28, 2017. Contract revenues for the quarter ended October 27, 2018 increased 12.9% on an organic basis after excluding contract revenues of $8.8 million from an acquired business that was not owned during the comparable prior period and contract revenues from storm restoration services. Contract revenues from storm restoration services were $3.9 million for the quarter ended October 27, 2018 compared to $15.9 million for the quarter ended October 28, 2017.

  • Non-GAAP Adjusted EBITDA of $98.6 million, or 11.6% of contract revenues, for the quarter ended October 27, 2018, compared to Non-GAAP Adjusted EBITDA of $97.6 million, or 12.9% of contract revenues, for the quarter ended October 28, 2017.

  • On a GAAP basis, net income was $27.8 million, or $0.87 per common share diluted, for the quarter ended October 27, 2018, compared to net income of $28.8 million, or $0.90 per common share diluted, for the quarter ended October 28, 2017. Non-GAAP Adjusted Net Income was $31.3 million, or $0.98 per common share diluted, for the quarter ended October 27, 2018, compared to Non-GAAP Adjusted Net Income of $31.6 million, or $0.99 per common share diluted, for the quarter ended October 28, 2017.

    Non-GAAP Adjusted Net Income for the quarters ended October 27, 2018 and October 28, 2017 excludes $4.8 million and $4.5 million, respectively, of pre-tax interest expense for the non-cash amortization of the debt discount associated with the Company's 0.75% convertible senior notes due September 2021 (the "Notes").

(PRNewsfoto/Dycom Industries, Inc.)

The Company also reported:

  • Contract revenues of $2.379 billion for the nine months ended October 27, 2018, compared to $2.323 billion for the nine months ended October 28, 2017. Contract revenues for the nine months ended October 27, 2018 increased 0.8% on an organic basis after excluding contract revenues from acquired businesses that were not owned for the entire period in both the current and comparable prior periods and contract revenues from storm restoration services. Total contract revenues from acquired businesses were $54.3 million for the nine months ended October 27, 2018 compared to $23.9 million for the nine months ended October 28, 2017. Contract revenues from storm restoration services were $22.5 million for the nine months ended October 27, 2018 compared to $15.5 million for the nine months ended October 28, 2017, excluding amounts from acquired businesses.

  • Non-GAAP Adjusted EBITDA of $270.1 million, or 11.4% of contract revenues, for the nine months ended October 27, 2018, compared to Non-GAAP Adjusted EBITDA of $323.9 million, or 13.9% of contract revenues, for the nine months ended October 28, 2017.

  • On a GAAP basis, net income was $75.0 million, or $2.34 per common share diluted, for the nine months ended October 27, 2018, compared to net income of $111.3 million, or $3.50 per common share diluted, for the nine months ended October 28, 2017. Non-GAAP Adjusted Net Income was $85.3 million, or $2.68 per Non-GAAP Adjusted Diluted Share, for the nine months ended October 27, 2018, compared to Non-GAAP Adjusted Net Income of $119.7 million, or $3.76 per common share diluted, for the nine months ended October 28, 2017.

    Non-GAAP Adjusted Net Income for the nine months ended October 27, 2018 and October 28, 2017 excludes $14.2 million and $13.5 million, respectively, of pre-tax interest expense for the non-cash amortization of the debt discount associated with the Notes. Shares used in computing Non-GAAP Adjusted Diluted Earnings per Common Share for the nine months ended October 27, 2018 exclude the GAAP dilutive effect of approximately 0.2 million weighted shares from the Notes, as the Company has a note hedge in effect to offset the economic dilution of additional shares up to an average quarterly share price of $130.43 per share.

Outlook

For the quarter ending January 26, 2019 and fiscal 2019, the Company currently expects the following:


Quarter Ending
January 26, 2019


Fiscal 2019

Contract revenues

$695 - $745 million


$3.074 - $3.124 billion

GAAP Diluted Earnings (Loss) per Common Share 

$(0.09) - $0.13


$2.25 - $2.47

Non-GAAP Adjusted Diluted Earnings per Common Share

$0.02 - $0.24


$2.70 - $2.92

Non-GAAP Adjusted EBITDA % of contract revenues

8.4% - 9.2%


10.7% - 10.8%

 

Use of Non-GAAP Financial Measures

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). In quarterly results releases, trend schedules, conference calls, slide presentations, and webcasts, the Company may use or discuss Non-GAAP financial measures, as defined by Regulation G of the Securities and Exchange Commission. See Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures directly following the press release tables.

Conference Call Information and Other Selected Data

A conference call to review the Company's results will be hosted at 9:00 a.m. (ET), Tuesday, November 20, 2018; call (800) 230-1074 (United States) or (612) 234-9960 (International) ten minutes before the conference call begins and ask for the "Dycom Results" conference call. A live webcast of the conference call and related materials will be available on the Company's Investor Center website at https://ir.dycomind.com. If you are unable to attend the conference call at the scheduled time, a replay of the live webcast and the related materials will be available at https://ir.dycomind.com until Thursday, December 20, 2018.

About Dycom Industries, Inc.

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

Forward Looking Information

This press release contains forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act. These statements include statements related to the outlook for the quarter ending January 26, 2019 and fiscal 2019 found under the "Outlook" and "Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures" sections of this release. Forward looking statements are based on management's current expectations, estimates and projections. These statements are subject to risks and uncertainties that may cause actual results for completed periods and periods in the future to differ materially from the results projected or implied in any forward-looking statements contained in this press release. The most significant of these risks and uncertainties are described in the Company's Transition Report on Form 10-K, Form 10-Qs and Form 8-K reports (including all amendments to those reports) and include business and economic conditions and trends in the telecommunications industry affecting the Company's customers, customer capital budgets and spending priorities, the adequacy of the Company's insurance and other reserves and allowances for doubtful accounts, whether the carrying value of the Company's assets may be impaired, preliminary purchase price allocations of acquired businesses, expected benefits and synergies of acquisitions, the future impact of any acquisitions or dispositions, adjustments and cancellations related to the Company's backlog, weather conditions, the anticipated outcome of other contingent events, including litigation, liquidity and other financial needs, the availability of financing, and the other risks and uncertainties detailed from time to time in the Company's filings with the Securities and Exchange Commission. The Company does not undertake to update forward-looking statements.

---Tables Follow---

DYCOM INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

Unaudited






October 27, 2018


January 27, 2018

ASSETS




Current assets:




Cash and equivalents

$

21,513


$

84,029

Accounts receivable, net (a)

849,769


318,684

Contract assets (a)

147,320


369,472

Inventories

90,819


79,039

Income tax receivable

5,496


13,852

Other current assets

34,010


39,710

Total current assets

1,148,927


904,786





Property and equipment, net

428,305


414,768

Goodwill and other intangible assets, net

492,299


493,212

Other

63,681


28,190

Total non-current assets

984,285


936,170

Total assets

$

2,133,212


$

1,840,956





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable

$

134,702


$

92,361

Current portion of debt


26,469

Contract liabilities

7,631


6,480

Accrued insurance claims

41,579


53,890

Income taxes payable

668


755

Other accrued liabilities

119,464


79,657

Total current liabilities

304,044


259,612





Long-term debt

867,835


733,843

Accrued insurance claims

65,981


59,385

Deferred tax liabilities, net non-current

72,580


57,428

Other liabilities

5,914


5,692

Total liabilities

1,316,354


1,115,960





Total stockholders' equity

816,858


724,996

Total liabilities and stockholders' equity

$

2,133,212


$

1,840,956





(a) The Company adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09") effective January 28, 2018, the first day of fiscal 2019. The adoption of ASU 2014-09 resulted in balance sheet classification changes for amounts that have not been invoiced to customers but for which the Company has satisfied the performance obligation and has an unconditional right to receive payment. Prior to adoption, amounts not invoiced to customers were included in the Company's contract asset, historically referred to as Costs and Estimated Earnings in Excess of Billings, regardless of rights to payment. Under ASU 2014-09, these amounts of unbilled receivables are included in accounts receivable, net. As of January 28, 2018, the date of adoption, the Company reclassified $311.7 million of unbilled receivables from contract assets to accounts receivable, net. Upon reclassification, accounts receivable, net and contract assets were $630.4 million and $57.8 million, respectively, as of January 28, 2018.

 

 

DYCOM INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except share amounts)

Unaudited










Quarter


Quarter


Nine Months


Nine Months


Ended


Ended


Ended


Ended


October 27, 2018


October 28, 2017


October 27, 2018


October 28, 2017

Contract revenues

$

848,237


$

756,215


$

2,379,081


$

2,322,741









Costs of earned revenues, excluding
depreciation and amortization

687,164


600,847


1,929,113


1,829,220

General and administrative expenses (a)

68,763


64,562


195,601


185,398

Depreciation and amortization

45,533


42,651


133,694


120,306

Total

801,460


708,060


2,258,408


2,134,924









Interest expense, net (b)

(11,310)


(9,707)


(31,922)


(28,824)

Other income, net

2,817


5,931


14,686


16,767

Income before income taxes

38,284


44,379


103,437


175,760









Provision for income taxes

10,454


15,603


28,476


64,480









Net income

$

27,830


$

28,776


$

74,961


$

111,280









Earnings per common share:
















Basic earnings per common share

$

0.89


$

0.93


$

2.40


$

3.57









Diluted earnings per common share

$

0.87


$

0.90


$

2.34


$

3.50

















Shares used in computing earnings per common share:





Basic

31,246,591


31,061,448


31,214,172


31,167,753









Diluted (c)

31,834,542


31,891,574


32,065,229


31,822,106









(a) Includes stock-based compensation expense of $7.4 million for each of the quarters ended October 27, 2018 and October 28, 2017 and $18.3 million and $17.2 million for the nine months ended October 27, 2018 and October 28, 2017, respectively.

(b) Includes pre-tax interest expense for non-cash amortization of the debt discount associated with the Notes of approximately $4.8 million and $4.5 million for the quarters ended October 27, 2018 and October 28, 2017, respectively, and approximately $14.2 million and $13.5 million for the nine months ended October 27, 2018 and October 28, 2017, respectively.

(c) During the first and second quarters of fiscal 2019, the Company's average stock price exceeded the $96.89 conversion price of its Notes. As a result, diluted shares used in computing diluted earnings per common share for the nine months ended October 27, 2018 include approximately 0.2 million weighted shares of potential dilution from the embedded conversion feature in the Notes.

 

 

DYCOM INDUSTRIES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

TO COMPARABLE GAAP FINANCIAL MEASURES

(Dollars in thousands)

Unaudited


CONTRACT REVENUES, NON-GAAP ORGANIC CONTRACT REVENUES, AND GROWTH %'s














Contract
Revenues
- GAAP


Revenues
from
acquired
businesses (a)


Revenues
from storm
restoration
services


Non-GAAP

- Organic
Contract
Revenues


GAAP

- Growth %


Non-GAAP -
Organic
Growth %

Quarter Ended October 27, 2018

$

848,237


$

(8,754)


$

(3,870)


$

835,613


12.2%


12.9%













Quarter Ended October 28, 2017

$

756,215


$


$

(15,939)


$

740,276

















Nine Months Ended October 27, 2018

$

2,379,081


$

(54,253)


$

(22,478)


$

2,302,350


2.4%


0.8%













Nine Months Ended October 28, 2017

$

2,322,741


$

(23,886)


$

(15,484)


$

2,283,371

















(a) Amounts for the quarters and nine months ended October 27, 2018 and October 28, 2017 represent contract revenues from acquired businesses that were not owned for the full period in both the current and comparable prior periods, including any contract revenues from storm restoration services for these acquired businesses.

 

 

NON-GAAP ADJUSTED EBITDA

















Quarter


Quarter


Nine Months


Nine Months


Ended


Ended


Ended


Ended


October 27, 2018


October 28, 2017


October 27, 2018


October 28, 2017

Reconciliation of net income to Non-GAAP
Adjusted EBITDA:








Net income

$

27,830


$

28,776


$

74,961


$

111,280

Interest expense, net

11,310


9,707


31,922


28,824

Provision for income taxes

10,454


15,603


28,476


64,480

Depreciation and amortization

45,533


42,651


133,694


120,306

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

95,127


96,737


269,053


324,890

Gain on sale of fixed assets

(3,874)


(6,495)


(17,198)


(18,189)

Stock-based compensation expense

7,366


7,380


18,277


17,169

Non-GAAP Adjusted EBITDA

$

98,619


$

97,622


$

270,132


$

323,870













Contract revenues

$

848,237


$

756,215


$

2,379,081


$

2,322,741

Non-GAAP Adjusted EBITDA % of contract revenues

11.6%


12.9%


11.4%


13.9%

 

 

DYCOM INDUSTRIES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO COMPARABLE GAAP FINANCIAL MEASURES (CONTINUED)

(Dollars in thousands, except share amounts)

Unaudited


NET INCOME, NON-GAAP ADJUSTED NET INCOME, DILUTED EARNINGS PER COMMON SHARE, NON-GAAP ADJUSTED DILUTED EARNINGS PER COMMON SHARE, AND NON-GAAP ADJUSTED DILUTED SHARES










Quarter


Quarter


Nine Months


Nine Months


Ended


Ended


Ended


Ended


October 27, 2018


October 28, 2017


October 27, 2018


October 28, 2017

Reconciliation of Non-GAAP Adjusted Net Income:








Net income

$

27,830


$

28,776


$

74,961


$

111,280









Adjustments:








Pre-tax non-cash amortization of debt
discount on Notes

4,800


4,547


14,223


13,471

Tax impact of non-cash amortization of debt
discount on Notes

(1,321)


(1,728)


(3,911)


(5,047)

Total adjustments, net of tax

3,479


2,819


10,312


8,424









Non-GAAP Adjusted Net Income

$

31,309


$

31,595


$

85,273


$

119,704









Reconciliation of Non-GAAP Adjusted
Diluted Earnings per Common Share:








Diluted earnings per common share - GAAP

$

0.87


$

0.90


$

2.34


$

3.50

Total adjustments, net of tax and dilutive
share effect of Notes (a)

0.11


0.09


0.34


0.26

Non-GAAP Adjusted Diluted Earnings per
Common Share

$

0.98


$

0.99


$

2.68


$

3.76









Shares used in computing Non-GAAP
Adjusted Diluted Earnings per Common
Share:








Diluted shares - GAAP

31,834,542


31,891,574


32,065,229


31,822,106

Adjustment for economic benefit of note
hedge related to Notes (a)



(245,065)


Non-GAAP Adjusted Diluted Shares (a)

31,834,542


31,891,574


31,820,164


31,822,106









(a) The Company has a note hedge in effect to offset the economic dilution of additional shares from the Notes up to an average quarterly share price of $130.43 per share. Non-GAAP Adjusted Diluted Shares exclude the GAAP dilutive share effect of the Notes.


Amounts in table above may not add due to rounding.



 

 

DYCOM INDUSTRIES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

TO COMPARABLE GAAP FINANCIAL MEASURES (CONTINUED)

Unaudited


OUTLOOK - DILUTED EARNINGS PER COMMON SHARE AND NON-GAAP ADJUSTED DILUTED EARNINGS PER COMMON SHARE






Quarter Ending




January 26, 2019 (a)


Fiscal 2019 (a)





GAAP Diluted Earnings (Loss) per common share (b)

$(0.09) - $0.13


$2.25 - $2.47





Adjustment




Addback of after-tax non-cash amortization of debt discount and dilutive share
effect of Notes (c)(d)

0.11


0.45





Non-GAAP Adjusted Diluted Earnings per Common Share

  $0.02 - $0.24


  $2.70 - $2.92





Diluted shares (in millions) (b)(d)

31.8


32.0

Adjustment for economic benefit of note hedge related to Notes (in millions) (d)

 


(0.2)

Non-GAAP Adjusted Diluted Shares (in millions) (d)

31.8


31.8





(a) The tax effects of future vestings and exercises of share-based awards are excluded from both GAAP Diluted Earnings (Loss) per common share and Non-GAAP Adjusted Diluted Earnings per Common Share in the outlook table above.

(b) GAAP Loss per common share at the low end of the outlook range for the quarter ending January 26, 2019 is calculated using 31.3 million shares, which excludes common stock equivalents related to share-based awards as their effect would be anti-dilutive.

(c) The Company expects to recognize approximately $4.9 million and $19.1 million in pre-tax interest expense during the quarter ending January 26, 2019 and fiscal 2019, respectively, for the non-cash amortization of the debt discount associated with the Notes. The addback for fiscal 2019 also includes approximately $0.01 per share for the Non-GAAP impact of the dilutive share effect of the Notes.

(d) Actual GAAP diluted shares will include any dilutive effect of the Notes based on the average share price during the respective period. The Company has a note hedge in effect to offset the economic dilution of additional shares from the Notes up to an average quarterly price of $130.43 per share. Accordingly, for Non-GAAP Adjusted Diluted Earnings per Common Share calculations, the Company expects to present results per share that exclude the dilutive effect of the Notes, if any, based on the expected effect of the note hedge.


Amounts in table above may not add due to rounding.

 

 

DYCOM INDUSTRIES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

TO COMPARABLE GAAP FINANCIAL MEASURES (CONTINUED)

(Dollars in millions)

Unaudited


RECONCILIATION OF NET INCOME TO NON-GAAP ADJUSTED EBITDA BASED ON THE MIDPOINT OF EARNINGS PER COMMON SHARE ("EPS") GUIDANCE



Quarter Ending




January 26, 2019


Fiscal 2019






(at midpoint of EPS guidance)

Net income

$

1


$

76

Interest expense, net

13


44

Provision for income taxes

0.2


29

Depreciation and amortization

46


180

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

59


328

Gain on sale of fixed assets

(1)


(18)

Stock-based compensation expense

5


24

Non-GAAP Adjusted EBITDA

$

63


$

334





Contract revenues (at midpoint of guidance)

$

720


$

3,099

Non-GAAP Adjusted EBITDA % of contract revenues (at midpoint of guidance)

8.8%


10.8%





Amounts in table above may not add due to rounding.




 

DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO COMPARABLE GAAP FINANCIAL MEASURES (CONTINUED)

Explanation of Non-GAAP Financial 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 used in this release as follows:

  • Non-GAAP Organic Contract Revenues - contract revenues from businesses that are included for the entire period in both the current and comparable prior periods, excluding contract revenues from storm restoration services. Non-GAAP Organic Contract Revenue growth is calculated as the percentage change in Non-GAAP Organic Contract Revenues over those of the comparable prior year periods. Management believes organic growth 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, 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 the non-cash amortization of the debt discount and the related tax impact, certain tax impacts resulting from vesting and exercise of share-based awards, and certain non-recurring items.

  • Non-GAAP Adjusted Diluted Earnings per Common Share and Non-GAAP Adjusted Diluted Shares - Non-GAAP Adjusted Net Income divided by Non-GAAP Adjusted Diluted Shares outstanding. The Company has a note hedge in effect to offset the economic dilution of additional shares from the Notes up to an average quarterly share price of $130.43. The measure of Non-GAAP Adjusted Diluted shares used in computing Non-GAAP Adjusted Diluted Earnings per Common Share excludes dilution from the Notes. Management believes that the calculation of Non-GAAP Adjusted Diluted shares to reflect the note hedge will be useful to investors because it provides insight into the offsetting economic effect of the hedge against potential conversion of the Notes.

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 Notes were allocated between debt and equity components. The difference between the principal amount and the carrying amount of the liability component of the Notes represents a debt discount. The debt discount is being amortized over the term of the 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 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.

  • Tax impact of excess tax benefits or deficiencies - The Company excludes certain tax impacts resulting from vesting and exercise of share-based awards as these amounts may vary significantly from period to period. Excluding these amounts from the Company's Non-GAAP financial measures provides management with a more consistent measure for assessing financial results.

  • Tax impact of adjusted results - The tax impact of adjusted results reflects the Company's effective tax rate used for financial planning for the applicable period.

 

SOURCE Dycom Industries, Inc.

For further information: Steven E. Nielsen, President and CEO, H. Andrew DeFerrari, Senior Vice President and CFO, (561) 627-7171

News Releases