PALM BEACH GARDENS, Fla.,
Nov. 20, 2017 /PRNewswire/
-- Dycom Industries, Inc. (NYSE: DY) announced today its
results for the fiscal quarter ended October 28, 2017.
This announcement is one day earlier than
previously scheduled and the conference call to review
the Company's results is now scheduled for Monday, November 20, 2017 at 9:00 a.m. (ET). Specific dial-in and
replay information appears below.
The schedule change is a result of the Company's preliminary
determination that certain documents containing financial
information were subject to unauthorized access after the market
closed on Friday, November 17, 2017.
The Company's investigation is ongoing and law enforcement
authorities have been notified.
- Contract revenues of $756.2
million for the quarter ended October 28, 2017,
compared to $799.2 million for the
quarter ended October 29, 2016. Contract revenues for the
quarter ended October 28, 2017
decreased 8.4% on an organic basis after excluding
$8.6 million of contract
revenues from an acquired business that was not owned during the
prior year quarter and $15.5 million
of contract revenues from storm restoration services in the current
period.
- Non-GAAP Adjusted EBITDA of $97.6
million, or 12.9% of contract revenues, for the quarter
ended October 28, 2017, compared to $129.2 million, or 16.2% of contract revenues,
for the quarter ended October 29, 2016.
- On a GAAP basis, net income was $28.8 million, or $0.90 per common share diluted, for the quarter
ended October 28, 2017, compared to net income of
$51.0 million, or $1.59 per common share diluted, for the quarter
ended October 29, 2016. Non-GAAP Adjusted Net Income was
$31.6 million, or $0.99 per common share diluted, for the quarter
ended October 28, 2017, compared to Non-GAAP Adjusted Net
Income of $53.7 million, or
$1.67 per common share diluted, for
the quarter ended October 29, 2016. Non-GAAP Adjusted Net
Income for the quarters ended October 28, 2017 and
October 29, 2016 excludes $4.5 million and $4.3
million, respectively, of pre-tax interest expense incurred
for non-cash amortization of the debt discount associated with the
Company's 0.75% convertible senior notes due September 2021.
Net income and Non-GAAP Adjusted Net Income for the quarter ended
October 28, 2017 include an income tax benefit of
approximately $0.9 million for the
tax effects of certain share-based award activities as a result of
the Company's adoption of Accounting Standards Update No. 2016-09,
Compensation - Stock Compensation (Topic 718): Improvements to
Employee Share-Based Payment Accounting ("ASU 2016-09"). This
tax benefit would have been recorded to additional paid-in-capital
under the previous accounting standard.
The Company also announced its outlook for the fiscal quarter
ending January 27, 2018. The Company currently expects
total contract revenues for the fiscal quarter ending
January 27, 2018 to range from $645 million to $675 million. On a GAAP basis,
diluted earnings per common share for the fiscal quarter ending
January 27, 2018 is expected to range from $0.15 to $0.27. Non-GAAP Adjusted Diluted
Earnings per Common Share is expected to range from $0.24 to $0.36. Non-GAAP Adjusted Diluted
Earnings per Common Share guidance excludes $4.6 million of pre-tax interest expense for
non-cash amortization of debt discount, or $0.09 per common share diluted on an after-tax
basis. A reconciliation of Non-GAAP Adjusted Diluted Earnings per
Common Share guidance provided for the fiscal quarter ending
January 27, 2018, along with reconciliations of other
Non-GAAP measures, is included within the press release tables.
In addition, the Company expects to provide a fiscal 2019
outlook for revenues and diluted earnings per share for the
Company's fiscal year ending January 26,
2019. This annual outlook will be provided in conjunction
with the Company's release of results for the fiscal quarter ending
January 27, 2018, currently scheduled
for Wednesday, February 28, 2018.
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 Explanation of Non-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), Monday, November 20, 2017; call
(800) 398-9379 (United
States) or (651) 291-0900 (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 at www.dycomind.com. If you are
unable to attend the conference call at the scheduled time, a
replay of the live webcast and related materials will be available
shortly after the call at www.dycomind.com until
Wednesday, December 20, 2017.
About Dycom Industries, Inc.
Dycom is a leading provider of specialty contracting services
throughout the United States and
in Canada. 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
Results for the fiscal quarter ended October 28, 2017 are preliminary and unaudited.
This press release contains forward-looking statements as
contemplated by the 1995 Private Securities Litigation Reform Act.
These statements are based on management's current expectations,
estimates and projections and include outlook and statements for
the fiscal quarter ending January 27, 2018 found under
the "Reconciliation of Non-GAAP Financial Measures to Comparable
GAAP Financial Measures" section of this release. Forward-looking
statements are subject to risks and uncertainties that may cause
actual results in the future to differ materially from the results
projected or implied in any forward-looking statements contained in
this press release. 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 business and economic conditions and trends in the
telecommunications industry affecting the Company's customers, 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, 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 28,
2017
|
|
July 29,
2017
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and
equivalents
|
$
|
24,531
|
|
$
|
38,608
|
Accounts receivable,
net
|
347,727
|
|
369,800
|
Costs and estimated
earnings in excess of billings
|
406,517
|
|
389,286
|
Inventories
|
83,877
|
|
83,204
|
Deferred tax assets,
net (a)
|
—
|
|
26,524
|
Income tax
receivable
|
1,008
|
|
7,493
|
Other current
assets
|
29,710
|
|
23,603
|
Total
current assets
|
893,370
|
|
938,518
|
|
|
|
|
Property and
equipment, net
|
423,330
|
|
422,107
|
Goodwill and other
intangible assets, net
|
499,069
|
|
505,309
|
Other
|
36,753
|
|
33,373
|
Total
non-current assets
|
959,152
|
|
960,789
|
Total
assets
|
$
|
1,852,522
|
|
$
|
1,899,307
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
109,877
|
|
$
|
132,974
|
Current portion of
debt
|
24,063
|
|
21,656
|
Billings in excess of
costs and estimated earnings
|
6,599
|
|
9,284
|
Accrued insurance
claims
|
48,424
|
|
39,909
|
Income taxes
payable
|
10,067
|
|
1,112
|
Other accrued
liabilities
|
84,091
|
|
113,603
|
Total
current liabilities
|
283,121
|
|
318,538
|
|
|
|
|
Long-term
debt
|
736,008
|
|
738,265
|
Accrued insurance
claims
|
60,782
|
|
62,007
|
Deferred tax
liabilities, net non-current (a)
|
77,622
|
|
103,626
|
Other
liabilities
|
5,351
|
|
5,288
|
Total
liabilities
|
1,162,884
|
|
1,227,724
|
|
|
|
|
Total
stockholders' equity
|
689,638
|
|
671,583
|
Total
liabilities and stockholders' equity
|
$
|
1,852,522
|
|
$
|
1,899,307
|
|
|
|
|
(a) The Company
adopted Accounting Standards Update No. 2015-17, Income Taxes
(Topic 740): Balance Sheet Classification of Deferred
Taxes, on a prospective basis effective July 30, 2017, the
first day of the fiscal quarter ended October 28, 2017. As a result
of this adoption, Deferred tax liabilities, net non-current is
presented net of approximately $28.2 million of deferred tax
assets within the condensed consolidated balance sheets as of
October 28, 2017. Under the previous accounting standard, these
deferred tax assets would have been classified as Deferred tax
assets, net.
|
DYCOM INDUSTRIES,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Dollars in
thousands, except share amounts)
|
Unaudited
|
|
|
|
|
|
Three
Months
|
|
Three
Months
|
|
Ended
|
|
Ended
|
|
October 28,
2017
|
|
October 29,
2016
|
Contract
revenues
|
$
|
756,215
|
|
$
|
799,223
|
|
|
|
|
Costs of earned
revenues, excluding depreciation and amortization
|
600,847
|
|
614,990
|
General and
administrative expenses (a)
|
64,562
|
|
60,204
|
Depreciation and
amortization
|
42,651
|
|
34,546
|
Total
|
708,060
|
|
709,740
|
|
|
|
|
Interest expense, net
(b)
|
(9,707)
|
|
(9,067)
|
Other income,
net
|
5,931
|
|
940
|
Income before income
taxes
|
44,379
|
|
81,356
|
|
|
|
|
Provision for income
taxes (c)
|
15,603
|
|
30,306
|
|
|
|
|
Net income
|
$
|
28,776
|
|
$
|
51,050
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
Basic earnings per
common share
|
$
|
0.93
|
|
$
|
1.62
|
|
|
|
|
Diluted earnings per
common share
|
$
|
0.90
|
|
$
|
1.59
|
|
|
|
|
|
|
|
|
Shares used in
computing earnings per common share:
|
|
|
|
|
|
|
|
|
Basic
|
31,061,448
|
|
31,429,493
|
|
|
|
|
Diluted
|
31,891,574
|
|
32,200,287
|
|
|
|
|
(a) Includes
stock-based compensation expense of $7.4 million and $5.7 million
for the three months ended October 28, 2017 and October 29, 2016,
respectively.
|
(b) Includes $4.5
million and $4.3 million for the three months ended October 28,
2017 and October 29, 2016, respectively, for non-cash amortization
of the debt discount associated with the Company's 0.75%
convertible senior notes due September 2021.
|
(c) Provision for
income taxes includes an income tax benefit of approximately $0.9
million for the tax effects of certain share-based award activities
as a result of the Company's adoption of ASU 2016-09. This tax
benefit would have been recorded to additional paid-in-capital
under the previous accounting standard.
|
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 DECLINE
%'s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Revenues -
GAAP
|
|
Revenues
from
acquired
business (a)
|
|
Revenues
from storm restoration services
|
|
Non-GAAP
- Organic
Contract
Revenues
|
|
GAAP
-
Decline
%
|
|
Non-GAAP - Organic
Decline
%
|
Three Months Ended
October 28, 2017
|
$
|
756,215
|
|
$
|
(8,581)
|
|
$
|
(15,484)
|
|
$
|
732,150
|
|
(5.4)%
|
|
(8.4)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
October 29, 2016
|
$
|
799,223
|
|
$
|
—
|
|
$
|
—
|
|
$
|
799,223
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Amount for the
three months ended October 28, 2017 represents contract revenues
from an acquired business that was not owned in the prior year
period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP
ADJUSTED EBITDA
|
|
|
|
|
Three
Months
|
|
Three
Months
|
|
Ended
|
|
Ended
|
|
October 28,
2017
|
|
October 29,
2016
|
Reconciliation of net
income to Non-GAAP Adjusted EBITDA:
|
|
|
|
Net income
|
$
|
28,776
|
|
$
|
51,050
|
Interest expense,
net
|
9,707
|
|
9,067
|
Provision for income
taxes
|
15,603
|
|
30,306
|
Depreciation and
amortization expense
|
42,651
|
|
34,546
|
Earnings Before
Interest, Taxes, Depreciation & Amortization
("EBITDA")
|
96,737
|
|
124,969
|
Gain on sale of fixed
assets
|
(6,495)
|
|
(1,443)
|
Stock-based
compensation expense
|
7,380
|
|
5,707
|
Non-GAAP Adjusted
EBITDA
|
$
|
97,622
|
|
$
|
129,233
|
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, NET INCOME PER COMMON SHARE, AND
NON-GAAP ADJUSTED DILUTED EARNINGS PER COMMON
SHARE
|
|
|
|
|
|
Three
Months
|
|
Three
Months
|
|
Ended
|
|
Ended
|
|
October 28,
2017
|
|
October 29,
2016
|
Reconciliation of
Non-GAAP Adjusted Net Income:
|
|
|
|
Net income
(a)
|
$
|
28,776
|
|
$
|
51,050
|
|
|
|
|
Adjustments
|
|
|
|
Pre-tax non-cash
amortization of debt discount on convertible senior
notes
|
4,547
|
|
4,307
|
Tax impact of
non-cash amortization of debt discount on convertible senior
notes
|
(1,728)
|
|
(1,611)
|
Total adjustments,
net of tax
|
2,819
|
|
2,696
|
|
|
|
|
Non-GAAP Adjusted Net
Income (a)
|
$
|
31,595
|
|
$
|
53,746
|
|
|
|
|
Reconciliation of
Non-GAAP Adjusted Diluted Earnings per Common Share:
|
|
|
|
Net income per common
share
|
$
|
0.90
|
|
$
|
1.59
|
Total adjustments
from above, net of tax
|
0.09
|
|
0.08
|
Non-GAAP Adjusted
Diluted Earnings per Common Share
|
$
|
0.99
|
|
$
|
1.67
|
|
|
|
|
Diluted shares used
in computing Adjusted Diluted Earnings per Common
Share
|
31,891,574
|
|
32,200,287
|
|
|
|
|
(a) Net income and
Non-GAAP Adjusted Net Income for the quarter ended
October 28, 2017 include an income tax benefit of
approximately $0.9 million for the tax effects of certain
share-based award activities as a result of the Company's adoption
of ASU 2016-09. This tax benefit would have been recorded to
additional paid-in-capital under the previous accounting
standard.
|
|
|
OUTLOOK -
DILUTED EARNINGS PER COMMON SHARE AND NON-GAAP ADJUSTED DILUTED
EARNINGS PER COMMON SHARE
|
|
|
|
Outlook for
the
|
|
Three Months
Ending
|
|
January 27,
2018
|
Diluted earnings per
common share - GAAP (a)
|
$0.15 -
$0.27
|
|
|
Adjustment
|
|
Adjustment for
addback of after-tax non-cash amortization of debt discount on
convertible senior notes (b)
|
$0.09
|
|
|
Non-GAAP Adjusted
diluted earnings per common share (a)
|
$0.24 -
$0.36
|
|
|
(a) Guidance for
diluted earnings per common share and Non-GAAP Adjusted diluted
earnings per common share for the three months ending January
27, 2018 were computed using approximately 31.9 million in
diluted weighted average shares outstanding.
|
(b) The Company
expects to recognize approximately $4.6 million in pre-tax interest
expense during the three months ending January 27, 2018 for
non-cash amortization of the debt discount associated with its
convertible senior notes. The Company excludes the effect of this
non-cash amortization of debt discount in its Non-GAAP financial
measures.
|
|
Amounts in tables
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 prior year periods, excluding contract revenues from
storm restoration services. 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
period. 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 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
non-cash amortization of the debt discount and the related tax
impact.
- Non-GAAP Adjusted Diluted Earnings per Common Share -
Non-GAAP Adjusted Net Income divided by weighted average diluted
shares outstanding.
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 0.75% convertible senior notes due September 2021 were allocated between debt and
equity components. The difference between the principal amount and
the carrying amount of the liability component of the convertible
senior notes represents a debt discount. The debt discount is being
amortized over the term of the convertible senior 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 convertible
senior 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 adjusted results - The tax impact of the
adjusted results for the three months ended October 28, 2017 and October 29, 2016 was calculated utilizing a
Non-GAAP effective tax rate which approximates the Company's
effective tax rate used for financial planning. The tax impact
included in the Company's guidance for the quarter ending
January 27, 2018 was calculated using
an effective tax rate used for financial planning and forecasting
future results.
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SOURCE Dycom Industries, Inc.