First Quarter Fiscal 2022 Highlights
- Contract revenues of
$727.5 million for the quarter endedMay 1, 2021 , compared to$814.3 million for the quarter endedApril 25, 2020 . Contract revenues decreased 11.1% on an organic basis after excluding$3.9 million in contract revenues from storm restoration services for the quarter endedMay 1, 2021 . - Non-GAAP Adjusted EBITDA of
$44.1 million , or 6.1% of contract revenues, for the quarter endedMay 1, 2021 , compared to$69.9 million , or 8.6% of contract revenues, for the quarter endedApril 25, 2020 . - On a GAAP basis, net income was
$0.9 million , or$0.03 per common share diluted, for the quarter endedMay 1, 2021 , compared to net loss of$32.4 million , or a loss of$1.03 per common share, for the quarter endedApril 25, 2020 . Non-GAAP Adjusted Net Loss was$1.2 million , or a loss of$0.04 per common share, for the quarter endedMay 1, 2021 , compared to Non-GAAP Adjusted Net Income of$11.4 million , or$0.36 per Non-GAAP Adjusted Diluted Share, for the quarter endedApril 25, 2020 . - The Company issued
$500.0 million in aggregate principal amount of 4.50% senior notes dueApril 2029 (the "2029 Notes"), amended its senior credit facility to extend the maturity toApril 2026 and resize capacity, and, with a portion of the net proceeds from the 2029 Notes offering and available cash, repaid$105.0 million of revolver borrowings and$71.9 million of term loan borrowings. - The Company ended the quarter with cash and equivalents of
$330.6 million , no outstanding borrowings on its revolving line of credit,$350.0 million of Term Loan outstanding,$58.3 million aggregate principal amount of 0.75% convertible senior notes dueSeptember 2021 (the "2021 Convertible Notes") outstanding, and$500.0 million aggregate principal amount of 2029 Notes outstanding.
Outlook
For the quarter ending
Use of Non-GAAP Financial Measures
The Company reports its financial results in accordance with
Conference Call Information and Other Selected Data
The Company will host a conference call to discuss fiscal 2022 first quarter results on Tuesday, May 25, 2021 at 9:00 a.m. Eastern time. 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. Parties interested in participating via telephone should dial (833) 519-1313 (
About
Forward Looking Information
This press release contains forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act. These statements include those related to the outlook for the quarter ending
---Tables Follow---
|
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(Dollars in thousands) |
|||||||
Unaudited |
|||||||
|
|
||||||
ASSETS |
|||||||
Current assets: |
|||||||
Cash and equivalents |
$ |
330,615 |
$ |
11,770 |
|||
Accounts receivable, net |
867,545 |
858,123 |
|||||
Contract assets |
177,212 |
197,110 |
|||||
Inventories |
71,059 |
70,849 |
|||||
Income tax receivable |
3,607 |
1,706 |
|||||
Other current assets |
48,012 |
29,072 |
|||||
Total current assets |
1,498,050 |
1,168,630 |
|||||
Property and equipment, net |
273,503 |
273,960 |
|||||
Operating lease right-of-use assets |
67,045 |
63,179 |
|||||
|
387,132 |
391,807 |
|||||
Other assets |
37,287 |
46,589 |
|||||
Total assets |
$ |
2,263,017 |
$ |
1,944,165 |
|||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
Current liabilities: |
|||||||
Accounts payable |
$ |
171,013 |
$ |
158,966 |
|||
Current portion of debt |
61,522 |
81,722 |
|||||
Contract liabilities |
18,833 |
14,101 |
|||||
Accrued insurance claims |
43,444 |
41,736 |
|||||
Operating lease liabilities |
24,967 |
24,769 |
|||||
Income taxes payable |
982 |
6,387 |
|||||
Other accrued liabilities |
115,318 |
120,809 |
|||||
Total current liabilities |
436,079 |
448,490 |
|||||
Long-term debt |
835,178 |
501,562 |
|||||
Accrued insurance claims - non-current |
62,361 |
70,224 |
|||||
Operating lease liabilities - non-current |
41,034 |
38,359 |
|||||
Deferred tax liabilities, net - non-current |
51,448 |
47,650 |
|||||
Other liabilities |
26,964 |
26,572 |
|||||
Total liabilities |
1,453,064 |
1,132,857 |
|||||
Total stockholders' equity |
809,953 |
811,308 |
|||||
Total liabilities and stockholders' equity |
$ |
2,263,017 |
$ |
1,944,165 |
|||
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
(Dollars in thousands, except share amounts) |
|||||||
Unaudited |
|||||||
Quarter |
Quarter |
||||||
Ended |
Ended |
||||||
|
|
||||||
Contract revenues |
$ |
727,497 |
$ |
814,322 |
|||
Costs of earned revenues, excluding depreciation and amortization |
620,011 |
680,206 |
|||||
General and administrative1 |
67,011 |
65,887 |
|||||
Depreciation and amortization |
39,079 |
45,871 |
|||||
|
— |
53,264 |
|||||
Total |
726,101 |
845,228 |
|||||
Interest expense, net3 |
(5,877) |
(12,457) |
|||||
(Loss) gain on debt extinguishment4 |
(62) |
12,504 |
|||||
Other income, net |
2,717 |
1,118 |
|||||
Loss before income taxes |
(1,826) |
(29,741) |
|||||
(Benefit) provision for income taxes5 |
(2,724) |
2,677 |
|||||
Net income (loss) |
$ |
898 |
$ |
(32,418) |
|||
Earnings (loss) per common share: |
|||||||
Basic earnings (loss) per common share |
$ |
0.03 |
$ |
(1.03) |
|||
Diluted earnings (loss) per common share |
$ |
0.03 |
$ |
(1.03) |
|||
Shares used in computing earnings (loss) per common share: |
|||||||
Basic |
30,675,625 |
31,603,498 |
|||||
Diluted6 |
31,299,469 |
31,603,498 |
|||||
|
|||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO COMPARABLE GAAP FINANCIAL MEASURES |
|||||||||||||||||
(Dollars in thousands) |
|||||||||||||||||
Unaudited |
|||||||||||||||||
CONTRACT REVENUES, NON-GAAP ORGANIC CONTRACT REVENUES, AND DECLINE %'s |
|||||||||||||||||
Contract |
Revenues |
Non-GAAP - Organic |
GAAP - |
Non-GAAP - |
|||||||||||||
Quarter Ended |
$ |
727,497 |
$ |
(3,869) |
$ |
723,628 |
(10.7) |
% |
(11.1) |
% |
|||||||
Quarter Ended |
$ |
814,322 |
$ |
— |
$ |
814,322 |
|||||||||||
NET INCOME (LOSS) AND NON-GAAP ADJUSTED EBITDA |
|||||||
Quarter |
Quarter |
||||||
Ended |
Ended |
||||||
|
|
||||||
Reconciliation of net income (loss) to Non-GAAP Adjusted EBITDA: |
|||||||
Net income (loss) |
$ |
898 |
$ |
(32,418) |
|||
Interest expense, net |
5,877 |
12,457 |
|||||
(Benefit) provision for income taxes |
(2,724) |
2,677 |
|||||
Depreciation and amortization |
39,079 |
45,871 |
|||||
Earnings Before Interest, Taxes, Depreciation & Amortization ("EBITDA") |
43,130 |
28,587 |
|||||
Gain on sale of fixed assets |
(2,852) |
(1,788) |
|||||
Stock-based compensation expense |
3,740 |
2,322 |
|||||
Loss (gain) on debt extinguishment4 |
62 |
(12,504) |
|||||
|
— |
53,264 |
|||||
Non-GAAP Adjusted EBITDA |
$ |
44,080 |
$ |
69,881 |
|||
Non-GAAP Adjusted EBITDA % of contract revenues |
6.1 |
% |
8.6 |
% |
|||
|
|||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO COMPARABLE GAAP FINANCIAL MEASURES (CONTINUED) |
|||||||
(Dollars in thousands, except share amounts) |
|||||||
Unaudited |
|||||||
NET INCOME (LOSS), NON-GAAP ADJUSTED NET (LOSS) INCOME, DILUTED EARNINGS (LOSS) PER COMMON SHARE, AND NON-GAAP ADJUSTED DILUTED (LOSS) EARNINGS PER COMMON SHARE, AND NON-GAAP ADJUSTED DILUTED SHARES |
|||||||
Quarter |
Quarter |
||||||
Ended |
Ended |
||||||
|
|
||||||
Reconciliation of net income (loss) to Non-GAAP Adjusted Net (Loss) Income: |
|||||||
Net income (loss) |
$ |
898 |
$ |
(32,418) |
|||
Pre-Tax Adjustments: |
|||||||
Non-cash amortization of debt discount on 2021 Convertible Notes |
663 |
4,341 |
|||||
Loss (gain) on debt extinguishment4 |
62 |
(12,504) |
|||||
|
— |
53,264 |
|||||
Tax Adjustments: |
|||||||
Tax impact for the vesting and exercise of share-based awards |
(2,633) |
450 |
|||||
Tax effect from net operating loss carryback under enacted CARES Act5 |
— |
(2,631) |
|||||
Tax impact of pre-tax adjustments |
(196) |
896 |
|||||
Total adjustments, net of tax |
(2,104) |
43,816 |
|||||
Non-GAAP Adjusted Net (Loss) Income |
$ |
(1,206) |
$ |
11,398 |
|||
Reconciliation of diluted earnings (loss) per common share to Non-GAAP Adjusted Diluted |
|||||||
GAAP earnings (loss) per common share |
$ |
0.03 |
$ |
(1.03) |
|||
Total adjustments, net of tax |
(0.07) |
1.39 |
|||||
Non-GAAP Adjusted Diluted (Loss) Earnings per Common Share |
$ |
(0.04) |
$ |
0.36 |
|||
Shares used in computing Non-GAAP Adjusted Diluted (Loss) Earnings per Common Share: |
|||||||
GAAP Diluted Shares |
31,299,469 |
31,603,498 |
|||||
Adjustment for dilutive common stock equivalents6 |
(623,844) |
163,118 |
|||||
Shares used in computing Non-GAAP Adjusted Diluted (Loss) Earnings per Common Share |
30,675,625 |
31,766,616 |
|||||
Amounts in table above may not add due to rounding. |
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
- Non-GAAP Organic Contract Revenues - contract revenues from businesses that are included for the entire period in both the current and prior year periods, excluding contract revenues from storm restoration services. Non-GAAP Organic Contract Revenue decline is calculated as the percentage change in Non-GAAP Organic Contract Revenues over those of the comparable prior year periods. Management believes organic decline is a helpful measure for comparing the Company's revenue performance with prior periods.
- Non-GAAP Adjusted EBITDA - net income (loss) 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 (Loss) Income - GAAP net income (loss) 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. Management believes Non-GAAP Adjusted Net (Loss) Income is a helpful measure for comparing the Company's operating performance with prior periods.
- Non-GAAP Adjusted Diluted (Loss) Earnings per Common Share and Non-GAAP Adjusted Diluted Shares - Non-GAAP Adjusted Net (Loss) Income divided by Non-GAAP Adjusted Diluted Shares outstanding. Non-GAAP Adjusted Diluted Shares used in the computation of Non-GAAP Adjusted Diluted (Loss) Earnings per Common Share is adjusted for common stock equivalents related to share-based awards in where their effect would be anti-dilutive.
Management excludes or adjusts each of the items identified below from Non-GAAP Adjusted Net (Loss) Income and Non-GAAP Adjusted Diluted (Loss) Earnings per Common Share:
- Non-cash amortization of debt discount on 2021 Convertible Notes - The Company's 2021 Convertible Notes were allocated between debt and equity components. The difference between the principal amount and the carrying amount of the liability component of the 2021 Convertible Notes represents a debt discount. The debt discount is being amortized over the term of the 2021 Convertible Notes but does not result in periodic cash interest payments. The Company excludes 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 2021 Convertible 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.
Goodwill impairment charge - During the quarter endedApril 25 2020 , the Company incurred a goodwill impairment charge of$53.3 million for a reporting unit that performs installation services inside third party premises. Management believes excluding the goodwill impairment charge from the Company's Non-GAAP financial measures assists investors' overall understanding of the Company's current financial performance and provides management with a consistent measure for assessing the current and historical financial results.
- Loss (gain) on debt extinguishment - During the quarter ended
May 1, 2021 , the Company recognized a loss on debt extinguishment of$0.1 million in connection with the amendment and restatement of its credit agreement maturing inApril 2026 . During the quarter endedApril 25, 2020 , the Company recognized a gain on debt extinguishment of$12.5 million in connection with its purchase of$167.0 million aggregate principal amount of the Company's 2021 Convertible Notes for$147.0 million , including interest and fees. Management believes excluding the gain on debt extinguishment from the Company's Non-GAAP financial measures assists investors' overall understanding of the Company's current financial performance and provides management with a consistent measure for assessing the current and historical financial results.
- Tax impact of the vesting and exercise of share-based awards - The Company excludes certain tax impacts resulting from the 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 effect from a net operating loss carryback under enacted CARES Act - During the quarter ended
April 25, 2020 , the Company recognized an income tax benefit of$2.6 million from a net operating loss carryback under the enactedU.S. Coronavirus Aid, Relief, and Economic Security ("CARES") Act. The Company excludes this impact because the Company believes it is not indicative of the Company's underlying results or ongoing operations.
- Tax impact of pre-tax adjustments - The tax impact of pre-tax adjustments reflects the Company's estimated tax impact of specific adjustments and the effective tax rate used for financial planning for the applicable period.
Notes
1 Includes stock-based compensation expense of
2 The Company incurred a goodwill impairment charge of
3 Includes pre-tax interest expense for non-cash amortization of the debt discount associated with the 2021 Convertible Notes of
4 During the quarter ended
5 For the quarters ended
6 For the quarter ended
For the quarter ended
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SOURCE
Steven E. Nielsen, President and CEO, H. Andrew DeFerrari, Senior Vice President and CFO, Callie A. Tomasso, Investor Relations, (561) 627-7171