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): December 2, 2020
(Exact name of Registrant as specified in its charter)
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Registrant’s telephone number, including area code: (561 ) 627-7171
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:
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 7.01 Regulation FD Disclosure.
On December 2, 2020, Dycom Industries, Inc. (the “Company”) posted presentation materials under Events & Presentations on the Investor Center section of the Company’s website at https://ir.dycomind.com. Members of the Company’s management may use all or portions of these materials from time to time in meetings with or when making presentations to the investment community, current or potential stakeholders, and others. The presentation materials are furnished herewith as Exhibits 99.1 and 99.2 and will be available at https://ir.dycomind.com until Friday, January 1, 2021.
The information in the preceding paragraph, as well as Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section. It may only be incorporated by reference into another filing under the Exchange Act or the Securities Act of 1933 if such subsequent filing specifically references this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
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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.
Dated: December 2, 2020
| DYCOM INDUSTRIES, INC. (Registrant) | |||||
| By: | /s/ Ryan F. Urness | ||||
| Name: | Ryan F. Urness | ||||
| Title: | Vice President, General Counsel and Corporate Secretary | ||||
Investor Presentation December 2020 Exhibit 99.1
Important Information 2 Caution Concerning Forward-Looking Statements This presentation 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 January 30, 2021 found within this presentation. These statements are subject to change. 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 presentation. The most significant of these risks and uncertainties are described in the Company’s Form 10-K, Form 10-Q, and Form 8-K reports (including all amendments to those reports) and include the projected impact of COVID-19 on the Company’s business operating results, cash flows and/or financial condition and the impacts of the measures the Company has taken in response to COVID-19, the Company’s ability to effectively execute its business and capital plans, 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 of the Company’s projects, the related impact to the Company’s backlog from project cancellations, weather conditions, the anticipated outcome of other contingent events, including litigation, liquidity and other financial needs, the availability of financing, the Company’s ability to generate sufficient cash to service its indebtedness, restrictions imposed by the Company’s credit agreement, 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 any obligation to update forward-looking statements. Non-GAAP Financial Measures This presentation includes certain “Non-GAAP” financial measures as defined by Regulation G of the SEC. As required by the SEC, an explanation of the Non-GAAP financial measures and a reconciliation of those measures to the most directly comparable GAAP financial measures are provided in the Company’s Form 8-K filed with the SEC on December 2, 2020 and on the Company’s Investor Center website at https://ir.dycomind.com. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, the Company’s reported GAAP results.
Dycom Overview 3 Operates throughout the continental United States Nationwide footprint with 44 operating subsidiaries and over 14,150 employees Strong revenue base and customer relationships Contract revenues of $810.3 million for Q3 2021, compared to $884.1 million for Q3 2020 Non-GAAP Adjusted EBITDA for Q3 2021 of $92.8 million, or 11.5% of contract revenues, compared to $91.7 million, or 10.4% of contract revenues, for Q3 2020 Non-GAAP Adjusted Diluted Earnings per Common Share of $1.06 for Q3 2021, compared to $0.88 for Q3 2020 Solid financial profile Strong liquidity of $587.1 million at Q3 2021 Reduced notional net debt by $110.1 million during Q3 2021 and by $467.4 million since Q3 2020 Leading supplier of specialty contracting services to telecommunication providers
4 Industry Update Major industry participants constructing or upgrading significant wireline networks across broad sections of the country generally designed to provision 1 gigabit network speeds directly to consumers or wirelessly using 5G technologies Industry effort to deploy high capacity fiber networks continues to meaningfully broaden Dycom’s set of opportunities Access to high capacity telecommunications increasingly crucial to society in the time of the COVID-19 pandemic, especially in rural America where dramatically increased rural network investment will be required to support work from home, telemedicine, distance learning and other newly essential applications Industry Increasing Network Bandwidth Dramatically Dycom’s scale and financial strength position it well to deliver valuable services to its customers COVID-19 Near Term Impacts Dycom is currently providing services for 1 gigabit full deployments and converged wireless/wireline multi-use network deployments across the country in dozens of metropolitan areas to several customers, including customers with stated aspirations to initiate broad fiber deployments as well as customers who appear to be contemplating the resumption of broad deployments and with whom current activity is increasing Potential fiber network deployment opportunities are increasing in rural America as new industry participants respond to emerging societal incentives Dycom’s ability to provide integrated planning, engineering and design, procurement and construction and maintenance services is of particular value to several industry participants Macro-economic effects and uncertainty may influence some customer plans Customers continue to be focused on the possible macro-economic effects of the pandemic on their business with particular focus on SMB dislocations and overall consumer confidence and credit worthiness Some uncertainty is seen in the overall municipal environment as authorities continue to manage the general effects of the pandemic on permitting and inspection processes and the impacts of potential business limitations due to recent nationwide increase in COVID-19 infections
Industry Drivers 5 Fiber deployments enabling new wireless technologies are underway in many regions of the country Telephone companies are deploying FTTH to enable 1 gigabit high speed connections Cable operators are deploying fiber to small and medium businesses and enterprises, partly in anticipation of the customer sales process; deployments to expand capacity as well as new build opportunities are underway Dramatically increased speeds to consumers are being provisioned and consumer data usage is growing, particularly upstream Customers are consolidating supply chains creating opportunities for market share growth and increasing the long- term value of Dycom’s maintenance and operations business Dycom is increasingly providing integrated planning, engineering and design, procurement and construction and maintenance services for wired and converged wireless/wireline networks Solid end market activity despite challenging economic backdrop Remain encouraged that Dycom’s major customers continue to be committed to multi-year capital spending initiatives
275 384 - 50 100 150 200 250 300 350 400 G ig a b y te s Weighted Average Data Consumed per Month 3Q-19 3Q-20 Strong Secular Trend 6 North America Internet Protocol Traffic vs. GDP Growth Strong and stable growth in IP traffic even in times of GDP decline Telecommunications networks fundamental to economic progress - Cisco Visual Networking Index: Forecast and Trends, 2017–2022 White Paper - February 2019 IP traffic in North America will reach 108.4 EB per month by 2022, growing at a CAGR of 21 percent. Data Usage Growth & Broadband Speeds Sources: U.S. Telecom, The Broadband Association; Cisco Visual Networking Index; U.S. National Bureau of Economic Analysis The average subscriber now consumes 380+ GB per month, an increase of 40% from Q3 2019 Nearly two-thirds of these subscribers are provisioned at speeds of 100+ Mbps Increasing consumer demand for bandwidth continues to drive fiber deployments by telecom providers Source: OpenVault Broadband Industry Report 3Q 2020 “ ” (140,000) (120,000) (100,000) (80,000) (60,000) (40,000) (20,000) - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 (35)% (30)% (25)% (20)% (15)% (10)% (5)% 0% 5% 10% 15% 20% 25% 30% 35% 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 N o rt h A m e ri ca I P T ra ff ic (P e ta b y te s p e r M o n th ) Q u a rt e rl y G D P C h a n g e 39% 61% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Provisioned Speed Tiers of Broadband Subscribers <100 Mbps 100+ Mbps
7 Key Driver: High Bandwidth Deployments Verizon AT&T At the same time, we launched 55 cities on ultra-wideband so far this year, and we are up to 60 before year-end. And that's of course the capacity and experience layers that we're building right now. And we're so pleased that the ecosystem is following us. And the last was, of course, at Apple in the 5G has ultra-wideband in all of them. Seeing the benefit of the experience and capacity layer we have built in ultra- wideband. We also said we're going to have 10 cities on 5G home before year-end. And the new CP that is coming up – that came out in October. We are on track for that as well. “ ” - Hans Vestberg, CEO Verizon Communications, Inc. – November 2020 Companies deploying fiber-to-the-home, fiber-to-the-node, and fiber-to-the-building technologies to enable 1 gigabit connections Data transmission speeds dramatically increasing 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 F ib e r B ro a d b a n d S u b s c ri b e rs ( 0 0 0 s ) 5 12 31 60 0 10 20 30 40 50 60 70 80 2019 2020 M a rk e ts C o n n e c te d 5G Home 5G Mobile We're selling into our existing footprint of a little over 14 million fiber homes, and we're doing it very effectively. And you've heard my comment about how much customers like the product. And that's one of the reasons we're having great success, and we're going to continue to push in that footprint. We've been adding fiber footprint as we have talked about slowly. We're going to pick that up a bit so that we can make sure we're in a share gain position and we're actually growing the broadband business as we exit next year. - John Stankey, CEO AT&T, Inc. – October 2020 “ ”
Key Driver: 5G Deployment 8 Growth in Number of Small Cells Wireless carriers are increasing 4G capacity and augmenting 4G with new 5G technologies creating growth opportunities in the near to intermediate term Number of small cells are predicted to exceed 1,000,000 by 2027; hundreds of thousands of small cells will need to be deployed in the next few years to meet growing demands Emerging wireless technologies driving significant wireline deployments Wireline deployments are the foundational element of what is expected to be a decades long deployment of fully converged wireless/wireline networks that will enable high bandwidth, low latency 5G applications Source: Rysavy Research LLC and Wells Fargo Securities, LLC. If you think about the capital cost associated with building Small Cell networks, about 80%, 85% of the total cost of building those networks is in the Fiber itself…based on the type of infrastructure that has to be deployed in order to achieve a Small Cell solution for the carriers, the majority of the – think about the revenue and the underlying cost associated with that – is going to be in the Fiber asset, the Fiber asset itself. “ ” - Jay Brown, CEOCrown Castle International Corp. – April 2020
9 Dycom is well-positioned to benefit from future growth opportunities Complete Lifecycle Services Crucial to Customers’ Success PROCUREMENT INSTALLATION CONSTRUCTION ENGINEERING & DESIGN Wireline Wireless MAINTENANCE PROGRAM MANAGEMENT Q3 2021 Revenue by Customer Type: 89.0% Telecommunications 7.3% Underground Locating 3.7% Electric/Gas Utilities & Other Intensely Focused on Telecommunications Market Wireless/Wireline Converged
Local Credibility, National Capability Operating Subsidiaries
11 Well Established Customers Top 5 Customers - % of Total Contract Revevenues Q3 2021 Organic growth (decline)1: (9.4)% (15.4)% 11.1% Total Customers Top 5 Customers All Other Customers 9.0% Q3 2021 % of contract revenues from customers #6 through #10: 2.4% 2.3% 2.3% 1.6% 0.9% Comcast Customer #6 Frontier Charter Dominion Energy NiSource Top 5 customers represented 71.6% and 77.3% of contract revenues in Q3 2021 and Q3 2020, respectively * Formerly known as CenturyLink
41% 40% 34% 26% 23% 59% 60% 66% 74% 77% $2,290 $2,954 $2,978 $3,128 $3,340 $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 2016 2017 2018 2019 2020 C u st o m e r C o n tr a ct R e v e n u e s Trailing Twelve Months Ended January2 Top 5 Customers All Other Customers Durable Customer Relationships 12 $ Millions $- $100 $200 $300 $400 $500 $600 $700 $800 $900 2016 2017 2018 2019 2020 C u st o m e r C o n tr a ct R e v e n u e s Trailing Twelve Months Ended January2 Verizon AT&T Lumen Technologies Comcast Windstream Charter
Anchored by Long-Term Agreements 13 Dycom is party to hundreds of MSA’s and other agreements with customers that extend for periods of one or more years Generally multiple agreements maintained with each customer Master Service Agreements (MSA’s) are multi-year, multi-million dollar arrangements covering thousands of individual work orders generally with exclusive requirements; majority of contracts are based on units of delivery Backlog at $5.412 billion as of Q3 2021 Revenue by Contract Type for Fiscal 2020 Master Service Agreements Short-term contracts Long-term contracts Backlog3 65.4% 23.2% 11.4%
10+ Years of Robust Cash Flow Generation 14 Fiscal 2010 – Fiscal 2020 Robust cash flow generation and prudent capital allocation provide strong foundation for returns Strong operating cash flow of $1.357 billion over 10+ years Prudent approach to capital allocation: $444 million invested in share repurchases $618 million invested in business acquisitions $1,055 million in cap-ex, net of disposals, or approximately 50% of allocation Net Decrease in Cash , $50 Cash Flow from Operations $1,357 Other Cash Flow $709 Cap-Ex, net $1,055 Share Repurchases $444 Business Acquisitions $618 $2,117 $2,117
Financial Update
Financial Overview 16 Strong market opportunities Contract revenues of $810.3 million for Q3 2021, compared to $884.1 million for Q3 2020 Non-GAAP Adjusted EBITDA for Q3 2021 of $92.8 million, or 11.5% of contract revenues, compared to $91.7 million, or 10.4% of contract revenues, for Q3 2020 Non-GAAP Adjusted Diluted Earnings per Common Share of $1.06 for Q3 2021, compared to $0.88 for Q3 2020 Solid financial profile Strong liquidity of $587.1 million at Q3 2021 Reduced notional net debt by $110.1 million during Q3 2021 and by $467.4 million since Q3 2020
$390 $442 $384 $330 $310 14.6% 14.4% 12.9% 10.5% 9.3% FY2016 FY2017 4 Quarters Ended Jan. 2018 FY2019 FY2020 $ M il li o n s Non-GAAP Adjusted EBITDA Non-GAAP Adjusted EBITDA as a % of Revenue $2,673 $3,067 $2,978 $3,128 $3,340 FY2016 FY2017 4 Quarters Ended Jan. 2018 FY2019 FY2020 $ M il li o n s Annual Trends 17 Growth in Contract Revenues Organic Revenue Trend1 Non-GAAP Adjusted EBITDA Non-GAAP Adjusted Diluted EPS $4.48 $5.26 $3.88 $2.78 $2.27 FY2016 FY2017 4 Quarters Ended Jan. 2018 FY2019 FY2020 22.7% 14.1% (0.2)% 3.6% 8.3% FY2016 FY2017 4 Quarters Ended Jan. 2018 FY2019 FY2020 2 2 22
Quarterly Trends 18 $749 $834 $884 $884 $738 $814 $824 $810 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 $ M il li o n s $60 $74 $89 $92 $45 $70 $103 $93 8.0% 8.8% 10.2% 10.4% 6.0% 8.6% 12.5% 11.5% Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Non-GAAP Adjusted EBITDA Non-GAAP Adjusted EBITDA % $ M il li o n s 4 Contract Revenues Non-GAAP Adjusted EBITDA
Liquidity Overview 19 Reduced notional net debt by $467.4 million since Q3 2020, including a Q3 2021 reduction of $110.1 million During Q3-2021: Generated solid free cash flow Repaid $115.0 million on Revolver Repaid $5.6 million of Term Loan borrowings Strong liquidity6 of $587.1 million at Q3 2021 Robust operating cash flows of $111.9 million during Q3 2021 and $279.4 million year-to-date from prudent working capital management DSOs of 127 at Q3 2021, compared to DSOs of 128 at Q3 2020 Capital expenditures, net of disposals for fiscal 2021 anticipated at $45 - $55 million, a $15 million reduction from prior outlook ($467.4) 5 5 5 $ Millions Q2 2021 Q3 2021 Debt Summary 0.75% Convertible Senior Notes, mature Sept 2021: $ 58.3 $ 58.3 Senior Credit Facility, matures Oct 2023: 7 Term Loan Facilities 433.1 427.5 Revolving Facility 200.0 85.0 Total Notional Amount of Debt $ 691.4 $ 570.8 Less: Cash and Equivalents 22.5 12.0 Notional Net Debt 5 $ 668.9 $ 558.7 $ Millions Q3 2020 Q3 2021 Cash Flow Summary 0 Cash provided by (used in) operating activities $ (24.0) $ 111.9 Capital expenditures, net of disposals $ (14.5) $ (3.5) (Repayments) Borrowings on Senior Credit Facility $ 38.0 $ (120.6) Other financing & investing activities, net $ (0.2) $ 1.6 Total Days Sales Outstanding ("DSO") 8 128 127
Capital Allocated to Maximize Returns 20 Focus on organic growth opportunities through strategic capital investments in the business Dycom is committed to maximizing long term returns through prudent capital allocation Repurchased 23.9 million shares for approximately $658 million since fiscal 2006 $100.0 million authorization available for share repurchases through February 2022 Generate free cash flow to reduce net debt Invest in Organic Growth Shares Repurchases Reduce Leverage to Historical Levels Pursue Complementary Acquisitions Selectively acquire businesses that complement our existing footprint and enhance our customer relationships Acquisitions have further strengthened Dycom’s customer base, geographic scope, and technical service offerings
21 Questions and Answers
Outlook 22 For the quarter ending January 30, 2021 (which includes an additional week of operations due to the Company’s 52/53 week fiscal year), the Company expects modestly lower contract revenues with margins that range from in-line to modestly higher, as compared to the quarter ended January 25, 2020 The Company believes the impact of the COVID-19 pandemic on its operating results, cash flows and financial condition is uncertain, unpredictable and could affect its ability to achieve these expected financial results This slide was used on November 24, 2020 in connection with the Company’s conference call for its fiscal 2021 third quarter results. This information is provided for your reference only and should not be interpreted as a reiteration of these projections by the Company at any time after the date originally provided. Reference is made to slide 2 titled “Important Information” with respect to these slides. The information and statements contained in this slide that are forward-looking are based on information that was available at the time the slide was initially prepared and/or management’s good faith belief at that time with respect to future events. Except as required by law, the Company may not update forward-looking statements even though its situation may change in the future. For a full copy of the conference call materials, including the conference call transcript, see the Company’s Form 8-Ks filed with the Securities and Exchange Commission on November 24, 2020.
Notes 1) Organic growth (decline) % adjusted for revenues from acquired businesses and storm restoration services, when applicable. 2) Due to the change in the Company’s fiscal year end, the Company’s fiscal 2018 six month transition period consisted of Q1 2018 and Q2 2018. For comparative purposes all amounts provided are for 4 Quarters Ended January. 3) The Company’s backlog represents an estimate of services to be performed pursuant to master service agreements and other contractual agreements over the terms of those contracts. These estimates are based on contract terms and evaluations regarding the timing of the services to be provided. In the case of master service agreements, backlog is estimated based on the work performed in the preceding 12 month period, when available. When estimating backlog for newly initiated master service agreements and other long and short-term contracts, the Company also considers the anticipated scope of the contract and information received from the customer during the procurement process. A significant majority of the Company’s backlog comprises services under master service agreements and other long-term contracts. Backlog is not a measure defined by United States generally accepted accounting principles (“GAAP”) and should be considered in addition to, but not as a substitute for, GAAP results. Participants in the Company’s industry often disclose a calculation of their backlog; however, the Company’s methodology for determining backlog may not be comparable to the methodologies used by others. Dycom utilizes the calculation of backlog to assist in measuring aggregate awards under existing contractual relationships with its customers. The Company believes its backlog disclosures will assist investors in better understanding this estimate of the services to be performed pursuant to awards by its customers under existing contractual relationships. 4) During the quarter ended July 27, 2019, the Company entered into a contract modification that increased revenue produced by a large customer program. As a result, the Company recognized $11.8 million of contract revenues for services performed in prior periods, $0.8 million of related performance-based compensation expense, and $1.0 million of stock-based compensation. On an after-tax basis, these items contributed approximately $7.2 million to net income, or $0.23 per common share diluted, for the quarter and nine months ended July 27, 2019. These amounts are excluded from the calculation of Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Diluted Earnings per Common Share for the quarter and nine months ended July 27, 2019 (Q2 2020). 5) Notional net debt as of Q3 2020, Q4 2020 and Q1 2021 consisted of the following: 6) Liquidity represents the sum of the Company’s availability on its revolving facility as defined by the Company’s Senior Credit Facility and available cash and equivalents. 7) As of both October 24, 2020 and July 25, 2020, the Company had $52.2 million of standby letters of credit outstanding under the Senior Credit Facility. 8) DSO is calculated as the summation of current and non-current accounts receivable (including unbilled receivables), net of allowance for doubtful accounts, plus current contract assets, less contract liabilities (formerly referred to as billings in excess of costs and estimated earnings) divided by average revenue per day during the respective quarter. Long-term contract assets are excluded from the calculation of DSO, as these amounts represent payments made to customers pursuant to long-term agreements and are recognized as a reduction of contract revenues over the period for which the related services are provided to the customers. 23 $ Millions Q3 2020 Q4 2020 Q1 2021 Debt Summary 0.75% Convertible Senior Notes, mature Sept 2021: $ 485.0 $ 460.0 $ 293.0 Senior Credit Facility, matures Oct 2023: 7 Term Loan Facilities 450.0 444.4 438.8 Revolving Facility 103.0 - 675.0 Total Notional Amount of Debt $ 1,038.0 $ 904.4 $1,406.7 Less: Cash and Equivalents 11.8 54.6 643.9 Notional Net Debt $ 1,026.2 $ 849.8 $ 762.9
Exhibit 99.2
Dycom Industries, Inc.
Non-GAAP Reconciliations
Investor Presentation
December 2020
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 as follows:
•Non-GAAP Organic Contract Revenues - contract revenues from businesses that are included for the entire period in both the current and prior year periods, excluding contract revenues from storm restoration services, adjusted independently for each comparative period for the additional week in the fourth quarter of fiscal 2016, the quarter ended July 30, 2016, as a result of the Company’s 52/53 week fiscal year. Non-GAAP Organic Contract Revenue growth (decline) is calculated as the percentage change in Non-GAAP Organic Contract Revenues over those of the comparable prior year periods. Management believes organic growth (decline) is a helpful measure for comparing the Company’s revenue performance with prior periods.
•Non-GAAP Adjusted EBITDA - net income (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 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 Income is a helpful measure for comparing the Company’s operating performance with prior periods.
•Non-GAAP Adjusted Diluted Earnings per Common Share - Non-GAAP Adjusted Net Income divided by Non-GAAP Adjusted Diluted Shares outstanding. The Company has a hedge in effect to offset the economic dilution of additional shares that would be issued in connection with the conversion of the Company’s 0.75% convertible senior notes due September 2021 (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 hedge will be useful to investors because it provides insight into the offsetting economic effect of the hedge against potential conversion of the Notes.
•Notional Net Debt - Notional net debt is a Non-GAAP financial measure that is calculated by subtracting cash and equivalents from the aggregate face amount of outstanding long-term debt. Management believes notional net debt is a helpful measure to assess the Company’s liquidity.
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 debt discount on Notes - 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 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 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 - 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.
•Acquisition transaction related costs – The Company incurred costs of approximately $0.7 million in connection with an acquisition during the fourth quarter of fiscal 2016. The exclusion of the acquisition transaction related costs from the Company’s Non-GAAP financial measures provides management with a consistent measure for assessing financial results.
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•(Loss) gain on debt extinguishment - During the second quarter of fiscal 2021, the Company incurred a loss on debt extinguishment of $0.5 million in connection with its purchase of $234.7 million aggregate principal amount of 0.75% convertible senior notes due September 2021 for $224.4 million, including interest and fees. During the first quarter of fiscal 2021, 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 0.75% convertible senior notes due September 2021 for $147.0 million, including interest and fees, and, during the fourth quarter of fiscal 2020, the Company incurred a loss on debt extinguishment of $0.1 million in connection with the purchase of $25.0 million aggregate principal amount of 0.75% convertible senior notes due September 2021 for $24.3 million, including interest and fees. Additionally, during the first quarter of fiscal 2016, the Company incurred a pre-tax charge of approximately $16.3 million for early extinguishment of debt in connection with the redemption of its 7.125% senior subordinated notes. Management believes excluding the (loss) 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.
•Charge for warranty costs - During the first quarter of fiscal 2020, the Company recorded an $8.2 million pre-tax charge for estimated warranty costs for work performed for a customer in prior periods. The Company excludes the impact of this charge from its Non-GAAP financial measures because the Company believes it is not indicative of its underlying results in the current period.
•Charge for (recovery of) previously reserved accounts receivable and contract assets - During the fourth quarter of fiscal 2019, the Company recognized a pre-tax non-cash charge for accounts receivable and contract assets of $17.2 million related to balances owed from a customer. On February 25, 2019, this customer filed a voluntary petition for reorganization. During the first quarter of fiscal 2020, the Company recognized $10.3 million of pre-tax income from the recovery of previously reserved accounts receivable and contract assets based on collections from a customer. The Company excludes the impact of this recovery from its Non-GAAP financial measures because the Company believes it is not indicative of its underlying results.
•Impact on stock-based compensation expense from non-cash charge for accounts receivable and contract assets - The Company excludes the impact on stock-based compensation expense from the non-cash charge for accounts receivable and contract assets from its Non-GAAP financial measures because the Company believes it is not indicative of its underlying results or ongoing operations.
•Tax impact from Tax Reform - During the quarter ended January 27, 2018, the Company recognized an income tax benefit of approximately $32.2 million resulting from the Tax Cuts and Jobs Act of 2017 (“Tax Reform”), primarily due to a reduction of net deferred tax liabilities. The Company has excluded this impact because it is a significant change in the U.S. federal corporate tax rate and because the Company believes it is not indicative of the Company’s underlying results or ongoing operations.
•Tax impact of previous tax year filing - During the second quarter of fiscal 2020, the Company recognized an income tax expense of $1.1 million on a previous tax year filing. The Company has excluded this impact because the Company believes it is not indicative of the Company’s underlying results or ongoing operations.
•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 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.
3
| Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures | ||||||||||||||||||||||||||||||||||||||||||||
| Annual Non-GAAP Organic Contract Revenues | ||||||||||||||||||||||||||||||||||||||||||||
| Unaudited | ||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||||||||||||||||||||
| Contract Revenues - GAAP | Revenues from acquired businesses1 | Revenues from storm restoration services | Additional week as a result of our 52/53 week fiscal year3 | Non-GAAP - Organic Revenues | Growth (Decline)% | |||||||||||||||||||||||||||||||||||||||
| Four Quarters Ended | GAAP % | Non-GAAP - Organic % | ||||||||||||||||||||||||||||||||||||||||||
| January 25, 2020 (FY2020) | $ | 3,339.7 | $ | (26.6) | $ | (4.7) | $ | — | $ | 3,308.3 | 6.8 | % | 8.3 | % | ||||||||||||||||||||||||||||||
| January 26, 2019 (FY2019) | $ | 3,127.7 | $ | (29.6) | $ | (42.9) | $ | — | $ | 3,055.3 | ||||||||||||||||||||||||||||||||||
| January 26, 2019 (FY2019) | $ | 3,127.7 | $ | (69.9) | $ | (42.9) | $ | — | $ | 3,014.9 | 5.0 | % | 3.6 | % | ||||||||||||||||||||||||||||||
January 27, 20182 | $ | 2,977.9 | $ | (32.3) | $ | (35.1) | $ | — | $ | 2,910.5 | ||||||||||||||||||||||||||||||||||
January 27, 20182 | $ | 2,977.9 | $ | (87.3) | $ | (35.1) | $ | — | $ | 2,855.5 | 0.8 | % | (0.2) | % | ||||||||||||||||||||||||||||||
January 28, 20172 | $ | 2,954.2 | $ | (37.3) | $ | — | $ | (56.0) | $ | 2,860.9 | ||||||||||||||||||||||||||||||||||
| July 29, 2017 (FY2017) | $ | 3,066.9 | $ | (214.9) | $ | — | $ | — | $ | 2,852.0 | 14.8 | % | 14.1 | % | ||||||||||||||||||||||||||||||
| July 30, 2016 (FY2016) | $ | 2,672.5 | $ | (119.8) | $ | — | $ | (53.5) | $ | 2,499.2 | ||||||||||||||||||||||||||||||||||
| July 30, 2016 (FY2016) | $ | 2,672.5 | $ | (159.0) | $ | — | $ | (52.9) | $ | 2,460.7 | 32.2 | % | 22.7 | % | ||||||||||||||||||||||||||||||
| July 25, 2015 (FY2015) | $ | 2,022.3 | $ | (17.7) | $ | — | $ | — | $ | 2,004.7 | ||||||||||||||||||||||||||||||||||
Note: Amounts above may not add due to rounding.
4
| Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures | ||||||||||||||||||||||||||||||||
| Non-GAAP Organic Contract Revenues - Certain Customers | ||||||||||||||||||||||||||||||||
| Unaudited | ||||||||||||||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||||||||
| Contract Revenues - GAAP | Revenues from storm restoration services | Non-GAAP - Organic Revenues | Growth (Decline)% | |||||||||||||||||||||||||||||
| Quarter Ended | GAAP % | Non-GAAP - Organic % | ||||||||||||||||||||||||||||||
| Comcast | ||||||||||||||||||||||||||||||||
| October 24, 2020 (Q3-21) | $ | 143.6 | $ | (0.5) | $ | 143.2 | 9.4 | % | 9.0 | % | ||||||||||||||||||||||
| October 26, 2019 (Q3-20) | $ | 131.3 | $ | — | $ | 131.3 | ||||||||||||||||||||||||||
Top 5 Customers4 | ||||||||||||||||||||||||||||||||
| October 24, 2020 (Q3-21) | $ | 580.5 | $ | (2.4) | $ | 578.1 | (15.0) | % | (15.4) | % | ||||||||||||||||||||||
| October 26, 2019 (Q3-20) | $ | 683.2 | $ | — | $ | 683.2 | ||||||||||||||||||||||||||
| All Other Customers (excluding Top 5 Customers) | ||||||||||||||||||||||||||||||||
| October 24, 2020 (Q3-21) | $ | 229.7 | $ | (6.5) | $ | 223.3 | 14.3 | % | 11.1 | % | ||||||||||||||||||||||
| October 26, 2019 (Q3-20) | $ | 200.9 | $ | — | $ | 200.9 | ||||||||||||||||||||||||||
| Total Contract Revenues | ||||||||||||||||||||||||||||||||
| October 24, 2020 (Q3-21) | $ | 810.3 | $ | (8.9) | $ | 801.4 | (8.4) | % | (9.4) | % | ||||||||||||||||||||||
| October 26, 2019 (Q3-20) | $ | 884.1 | $ | — | $ | 884.1 | ||||||||||||||||||||||||||
Note: Amounts above may not add due to rounding.
5
| Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures | |||||||||||||||||||||||||||||||||||||||||||||||
| Quarterly Non-GAAP Adjusted EBITDA | |||||||||||||||||||||||||||||||||||||||||||||||
| Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
| Q4-19 | Q1-20 | Q2-20 | Q3-20 | Q4-20 | Q1-21 | Q2-21 | Q3-21 | ||||||||||||||||||||||||||||||||||||||||
| Ended | Ended | Ended | Ended | Ended | Ended | Ended | Ended | ||||||||||||||||||||||||||||||||||||||||
| 1/26/19 | 4/27/19 | 7/27/19 | 10/26/19 | 1/25/20 | 4/25/20 | 7/25/20 | 10/24/20 | ||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | (12.1) | $ | 14.3 | $ | 29.9 | $ | 24.2 | $ | (11.2) | $ | (32.4) | $ | 37.0 | $ | 33.9 | |||||||||||||||||||||||||||||||
| Interest expense, net | 12.4 | 12.2 | 12.9 | 13.1 | 12.6 | 12.5 | 7.9 | 4.7 | |||||||||||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | (3.3) | 6.2 | 12.7 | 6.6 | (4.1) | 2.7 | 12.2 | 12.0 | |||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 45.9 | 46.3 | 47.2 | 47.4 | 46.6 | 45.9 | 44.1 | 42.3 | |||||||||||||||||||||||||||||||||||||||
| Earnings Before Interest, Taxes, Depreciation & Amortization (“EBITDA”) | 43.0 | 79.1 | 102.7 | 91.3 | 43.9 | 28.6 | 101.3 | 93.0 | |||||||||||||||||||||||||||||||||||||||
| Gain on sale of fixed assets | (2.2) | (6.7) | (4.8) | (2.2) | (1.1) | (1.8) | (3.4) | (4.0) | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | 1.9 | 3.5 | 2.3 | 2.7 | 1.6 | 2.3 | 4.4 | 3.8 | |||||||||||||||||||||||||||||||||||||||
Goodwill impairment charge5 | — | — | — | — | — | 53.3 | — | — | |||||||||||||||||||||||||||||||||||||||
Loss (gain) on debt extinguishment6,7 | — | — | — | — | 0.1 | (12.5) | 0.5 | — | |||||||||||||||||||||||||||||||||||||||
Charge for warranty costs8 | — | 8.2 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Charge for (recovery of) accounts receivable and contract assets9 | 17.2 | (10.3) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Non-GAAP Adjusted EBITDA | $ | 59.8 | $ | 73.6 | $ | 100.2 | $ | 91.7 | $ | 44.5 | $ | 69.9 | $ | 102.7 | $ | 92.8 | |||||||||||||||||||||||||||||||
| Contract revenues | $ | 748.6 | $ | 833.7 | $ | 884.2 | $ | 884.1 | $ | 737.6 | $ | 814.3 | $ | 823.9 | $ | 810.3 | |||||||||||||||||||||||||||||||
| Non-GAAP Adjusted EBITDA % of contract revenues | 8.0 | % | 8.8 | % | 11.3 | % | 10.4 | % | 6.0 | % | 8.6 | % | 12.5 | % | 11.5 | % | |||||||||||||||||||||||||||||||
Non-GAAP Adjusted EBITDA, excluding contract modification10 | $ | 89.2 | |||||||||||||||||||||||||||||||||||||||||||||
Non-GAAP Adjusted EBITDA % of contract revenues, excluding contract modification10 | 10.2 | % | |||||||||||||||||||||||||||||||||||||||||||||
Note: Amounts above may not add due to rounding.
6
| Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures | |||||||||||||||||||||||||||||
| Annual Non-GAAP Adjusted EBITDA | |||||||||||||||||||||||||||||
| Unaudited | |||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
| FY2016 | FY2017 | 4 Qtrs. | FY2019 | FY2020 | |||||||||||||||||||||||||
| Ended | Ended | Ended | Ended | Ended | |||||||||||||||||||||||||
| 7/30/16 | 7/29/17 | 1/27/183 | 1/26/19 | 1/25/20 | |||||||||||||||||||||||||
| Net income | $ | 128.7 | $ | 157.2 | $ | 151.3 | $ | 62.9 | $ | 57.2 | |||||||||||||||||||
| Interest expense, net | 34.7 | 37.4 | 38.7 | 44.4 | 50.9 | ||||||||||||||||||||||||
| Provision for income taxes | 77.6 | 93.2 | 26.6 | 25.1 | 21.3 | ||||||||||||||||||||||||
| Depreciation and amortization | 124.9 | 147.9 | 162.7 | 179.6 | 187.6 | ||||||||||||||||||||||||
| Earnings Before Interest, Taxes, Depreciation & Amortization (“EBITDA”) | 366.0 | 435.7 | 379.3 | 312.0 | 317.0 | ||||||||||||||||||||||||
| Gain on sale of fixed assets | (9.8) | (14.9) | (18.9) | (19.4) | (14.9) | ||||||||||||||||||||||||
| Stock-based compensation expense | 16.9 | 20.8 | 23.1 | 20.2 | 10.0 | ||||||||||||||||||||||||
Acquisition related costs11 | 0.7 | — | — | — | — | ||||||||||||||||||||||||
Loss on debt extinguishment12,6 | 16.3 | — | — | — | 0.1 | ||||||||||||||||||||||||
Charge for warranty costs8 | — | — | — | — | 8.2 | ||||||||||||||||||||||||
Charge for (recovery of) accounts receivable and contract assets9 | — | — | — | 17.2 | (10.3) | ||||||||||||||||||||||||
| Non-GAAP Adjusted EBITDA | $ | 390.0 | $ | 441.6 | $ | 383.5 | $ | 330.0 | $ | 310.0 | |||||||||||||||||||
| Contract revenues | $ | 2,672.5 | $ | 3,066.9 | $ | 2,977.9 | $ | 3,127.7 | $ | 3,339.7 | |||||||||||||||||||
| Non-GAAP Adjusted EBITDA % of contract revenues | 14.6 | % | 14.4 | % | 12.9 | % | 10.5 | % | 9.3 | % | |||||||||||||||||||
Note: Amounts above may not add due to rounding.
7
| Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures | |||||||||||
| Quarterly Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Diluted Earnings Per Share | |||||||||||
| Unaudited | |||||||||||
| (Dollars and shares in millions, except per share amounts) | |||||||||||
| Q3-20 | Q3-21 | ||||||||||
| Ended | Ended | ||||||||||
| 10/26/19 | 10/24/20 | ||||||||||
| Net income | $ | 24.2 | $ | 33.9 | |||||||
| Adjustments: | |||||||||||
Interest expense, net13 | 5.1 | 0.6 | |||||||||
| Income before income taxes | 5.1 | 0.6 | |||||||||
Provision for income taxes14 | 1.2 | 0.2 | |||||||||
| Total adjustments, net of tax | 3.8 | 0.4 | |||||||||
| Non-GAAP Adjusted Net Income | $ | 28.1 | $ | 34.4 | |||||||
| Diluted earnings per common share | $ | 0.76 | $ | 1.05 | |||||||
| Total adjustments, net of tax | 0.12 | 0.01 | |||||||||
| Non-GAAP Adjusted Diluted Earnings per Common Share | $ | 0.88 | $ | 1.06 | |||||||
| Shares used in computing Non-GAAP Adjusted Diluted Earnings per Common Share | 31.8 | 32.4 | |||||||||
Note: Amounts above may not add due to rounding.
8
| Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures | |||||||||||||||||||||||||||||
| Annual Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Diluted Earnings Per Share | |||||||||||||||||||||||||||||
| Unaudited | |||||||||||||||||||||||||||||
| (Dollars and shares in millions, except per share amounts) | |||||||||||||||||||||||||||||
| FY2016 | FY2017 | 4 Qtrs. | FY2019 | FY2020 | |||||||||||||||||||||||||
| Ended | Ended | Ended | Ended | Ended | |||||||||||||||||||||||||
| 7/30/16 | 7/29/17 | 1/27/183 | 1/26/19 | 1/25/20 | |||||||||||||||||||||||||
| Net income | $ | 128.7 | $ | 157.2 | $ | 151.3 | $ | 62.9 | $ | 57.2 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||
Cost of earned revenues, excluding depreciation and amortization8 | — | — | — | — | 8.2 | ||||||||||||||||||||||||
General and administrative9,11 | 0.7 | — | — | 15.3 | (10.3) | ||||||||||||||||||||||||
Interest expense, net13 | 14.7 | 17.6 | 18.1 | 19.1 | 20.1 | ||||||||||||||||||||||||
Loss on debt extinguishment12 | 16.3 | — | — | — | — | ||||||||||||||||||||||||
| Income before income taxes | 31.6 | 17.6 | 18.1 | 34.4 | 18.0 | ||||||||||||||||||||||||
Provision for income taxes14 | 12.0 | 6.6 | 46.0 | 8.8 | 2.8 | ||||||||||||||||||||||||
| Total adjustments, net of tax | 19.6 | 11.0 | (27.9) | 25.6 | 15.2 | ||||||||||||||||||||||||
| Non-GAAP Adjusted Net Income | $ | 148.4 | $ | 168.3 | $ | 123.5 | $ | 88.5 | $ | 72.4 | |||||||||||||||||||
| Diluted earnings per common share | $ | 3.89 | $ | 4.92 | $ | 4.74 | $ | 1.97 | $ | 1.80 | |||||||||||||||||||
Total adjustments, net of tax and dilutive share effect of Notes15 | 0.59 | 0.35 | (0.86) | 0.82 | 0.48 | ||||||||||||||||||||||||
| Non-GAAP Adjusted Diluted Earnings per Common Share | $ | 4.48 | $ | 5.26 | $ | 3.88 | $ | 2.78 | $ | 2.27 | |||||||||||||||||||
| Shares used in computing diluted earnings per common share | 33.1 | 32.0 | 31.9 | 32.0 | 31.8 | ||||||||||||||||||||||||
Adjustment to Shares used in computing diluted earnings per common share15 | — | — | (0.1) | (0.2) | — | ||||||||||||||||||||||||
| Shares used in computing Non-GAAP Adjusted Diluted Earnings per Common Share | 33.1 | 32.0 | 31.8 | 31.8 | 31.8 | ||||||||||||||||||||||||
Note: Amounts above may not add due to rounding.
9
| Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures | |||||||||||||||||||||||||||||||||||||||||
| Calculation of Cumulative Cash Flows Fiscal 2010 through Fiscal 2020 | |||||||||||||||||||||||||||||||||||||||||
| Unaudited | |||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||||||||
| Net Cash Provided by Operating Activities | Capital Expenditures, net of Proceeds from Assets Sales | Cash Paid for Acquisitions, net of Cash Acquired | Repurchases of Common Stock | Borrowings and Other Financing Activities16 | Other Investing Activities17 | Total Amount Provided by Other Financing and Investing Activities | |||||||||||||||||||||||||||||||||||
| Fiscal 2020 | $ | 58.0 | $ | (101.5) | $ | — | $ | — | $ | (31.1) | $ | 0.3 | $ | (30.8) | |||||||||||||||||||||||||||
| Fiscal 2019 | 124.4 | (142.0) | (20.9) | — | 80.9 | 1.6 | 82.5 | ||||||||||||||||||||||||||||||||||
| Six months ended January 27, 2018 | 160.5 | (76.0) | — | (16.9) | (21.5) | (0.7) | (22.2) | ||||||||||||||||||||||||||||||||||
| Fiscal 2017 | 256.4 | (185.2) | (24.2) | (62.9) | 20.4 | 0.3 | 20.7 | ||||||||||||||||||||||||||||||||||
| Fiscal 2016 | 261.5 | (175.5) | (157.2) | (170.0) | 254.1 | (0.5) | 253.6 | ||||||||||||||||||||||||||||||||||
| Fiscal 2015 | 141.9 | (93.6) | (31.9) | (87.1) | 75.9 | (4.5) | 71.4 | ||||||||||||||||||||||||||||||||||
| Fiscal 2014 | 84.2 | (73.7) | (17.1) | (10.0) | 19.0 | (0.3) | 18.7 | ||||||||||||||||||||||||||||||||||
| Fiscal 2013 | 106.7 | (58.8) | (330.3) | (15.2) | 263.5 | 0.1 | 263.6 | ||||||||||||||||||||||||||||||||||
| Fiscal 2012 | 65.1 | (52.8) | — | (13.0) | 7.6 | 0.9 | 8.5 | ||||||||||||||||||||||||||||||||||
| Fiscal 2011 | 43.9 | (49.2) | (36.5) | (64.5) | 47.5 | 0.2 | 47.7 | ||||||||||||||||||||||||||||||||||
| Fiscal 2010 | 54.1 | (46.6) | — | (4.5) | (4.4) | — | (4.4) | ||||||||||||||||||||||||||||||||||
| Cumulative | $ | 1,356.8 | $ | (1,055.0) | $ | (618.1) | $ | (444.1) | $ | 712.0 | $ | (2.7) | $ | 709.3 | |||||||||||||||||||||||||||
| Cash at January 25, 2020 | $ | 54.6 | |||||||||||||||||||||||||||||||||||||||
| Cash at July 25, 2009 | 104.7 | ||||||||||||||||||||||||||||||||||||||||
| Net Decrease in Cash | $ | (50.1) | |||||||||||||||||||||||||||||||||||||||
Note: Amounts above may not add due to rounding.
10
Notes to Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures
1 Amounts 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.
2 Due to the change in the Company’s fiscal year end, the Company’s fiscal 2018 six month transition period consisted of Q1 2018 and Q2 2018. Amounts provided for the 4 Quarters Ended January 27, 2018 represent the aggregate of Q3 2017, Q4 2017, Q1 2018 and Q2 2018, and amounts provided for the 4 Quarters Ended January 28, 2017 represent the aggregate of Q3 2016, Q4 2016, Q1 2017, and Q2 2017, for comparative purposes to other twelve month periods presented.
3 The Company has a 52/53 week fiscal year. All four-quarter periods presented contain 52 weeks except for those that include the quarter ended July 30, 2016 which contained an additional week of operations. The Non-GAAP adjustment for the additional week of operations is calculated independently for each four-quarter period presented that includes the quarter ended July 30, 2016. The impact of the additional week of operations for the quarter ended July 30, 2016 is calculated as (i) contract revenues less, (ii) contract revenues from acquired businesses in each comparative period, (iii) divided by 14 weeks.
4 Top 5 Customers included Verizon, Comcast, Lumen (formerly known as CenturyLink, Inc.), AT&T, and Windstream for the quarters ended October 24, 2020 and October 26, 2019.
5 The Company incurred a goodwill impairment charge of $53.3 million during the quarter ended April 25, 2020 for a reporting unit that performs installation services inside third party premises.
6 During the quarter ended January 25, 2020, the Company purchased $25.0 million aggregate principal amount of its 0.75% convertible senior notes due September 2021 (the “Notes”) for $24.3 million, including interest and fees. The purchase price was allocated between the debt and equity components of the Notes. Based on the net carrying amount of the Notes, the Company recognized a net loss on debt extinguishment of $0.1 million after the write-off of associated debt issuance costs. The Company also recognized the equity component of the settlement of the Notes.
7 During the quarter ended April 25, 2020, the Company purchased $167.0 million aggregate principal amount of its Notes for $147.0 million, including interest and fees. The purchase price was allocated between the debt and equity components of the Notes. Based on the net carrying amount of the Notes, the Company recognized a net gain on debt extinguishment of $12.5 million after the write-off of associated debt issuance costs. The Company also recognized the equity component of the settlement of the Notes.
During the quarter ended July 25, 2020, the Company purchased $234.7 million aggregate principal amount of its Notes for $224.4 million, including interest and fees. The purchase price was allocated between the debt and equity components of the Notes. Based on the net carrying amount of the Notes, the Company recognized a net loss on debt extinguishment of $0.5 million after the write-off of associated debt issuance costs. The Company also recognized the equity component of the settlement of the Notes.
8 During the quarter ended April 27, 2019, the Company recorded an $8.2 million pre-tax charge for estimated warranty costs for work performed for a customer in prior periods.
9 During the quarter ended January 26, 2019, the Company recognized a pre-tax non-cash charge for accounts receivable and contract assets of $17.2 million related to balances owed from a customer. On February 25, 2019, this customer filed a voluntary petition for reorganization. Partially offsetting this charge, the Company’s stock-based compensation expense was reduced by approximately $1.9 million for the quarter ended January 26, 2019 as a result of the pre-tax non-cash charge for accounts receivable and contract assets. Excluding this reduction, Non-GAAP Stock-Based Compensation Expense was $3.8 million for the quarter ended January 26, 2019. During the quarter ended April 27, 2019, the Company recognized $10.3 million of pre-tax income from the recovery of these previously reserved accounts receivable and contract assets based on collections from the customer.
10 During the quarter ended July 27, 2019, the Company entered into a contract modification that increased revenue produced by a large customer program. As a result, the Company recognized $11.8 million of contract revenues for services performed in prior periods, $0.8 million of related performance-based compensation expense, and $1.0 million of stock-based compensation. On an after-tax basis, these items contributed approximately $7.3 million to net income, or $0.23 per common share diluted, for the quarter ended July 27,2019. These amounts are excluded from the calculations of Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Diluted Earnings per Common Share for the quarter ended July 27, 2019.
11 The Company incurred costs of approximately $0.7 million in connection with an acquisition during the fourth quarter of fiscal 2016.
12 The Company incurred a pre-tax charge of approximately $16.3 million for early extinguishment of debt in connection with the redemption of its senior subordinated notes during the first quarter of fiscal 2016.
13 Amounts represent the non-cash amortization of the debt discount associated with the Company’s Notes.
14 Amounts represent the tax related impact of all pre-tax adjustments as well as the tax effects of the vesting and exercise of share-based awards. During the quarter ended January 27, 2018, the Company recognized an income tax benefit of approximately $32.2 million resulting from Tax Reform, primarily due to the re-measurement of the Company’s net deferred tax liabilities at a lower U.S. federal corporate income tax rate. Additionally, for the quarter ended July 27, 2019, the Company recognized an income tax expense of $1.1 million on a previous tax year filing.
15 The Company has a hedge in effect to offset the economic dilution of additional shares that would be issued in connection with the conversion of the Notes up to an average quarterly share price of $130.43. Non-GAAP Adjusted Diluted Shares excludes the GAAP dilutive share effect of the Notes. See the Company’s Form 8-K previously filed with the Securities and Exchange Commission on September 28, 2015 for further information regarding the Notes and note hedge.
16 Other financing activities represents net cash provided by (used in) financing activities less repurchases of common stock.
17 Other investing activities represents net cash provided by (used in) investing activities less capital expenditure, net of proceeds from asset sales and less cash paid for acquisitions, net of cash acquired.
11