PALM BEACH GARDENS, Fla.,
Aug. 13, 2018 /PRNewswire/ -- Dycom Industries, Inc.
(NYSE: DY) announced today that revenues and results for the
quarter ended July 28, 2018 will be
below previous guidance. The Company's previous guidance and its
preliminary results are as follows:
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Previous
Guidance
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Preliminary
Results
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|
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Quarter
Ended
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Quarter
Ended
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July 28,
2018*
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July 28, 2018
(a)(b)
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Contract
revenues
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$830 - $860
million
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$799.5
million
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Diluted Earnings per
Common Share - GAAP
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$1.02 -
$1.17
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$0.94 -
$0.97
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Non-GAAP Adjusted
Diluted Earnings per Common Share
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$1.13 -
$1.28
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$1.05 -
$1.08
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Non-GAAP Adjusted
EBITDA % of contract revenues
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12.4% -
12.8%
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12.0% -
12.2%
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(a) The Company's
preliminary results for contract revenues for the quarter ended
July 28, 2018 include approximately $3.8 million of storm
restoration services and approximately $9.1 million of contract
revenues from a previously acquired business.
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(b) The Company's
preliminary results for diluted earnings per share on a GAAP and
Non-GAAP basis for the quarter ended July 28, 2018 include
approximately $0.9 million of incremental tax benefits primarily
from fiscal year tax filings and the tax effect of the
settlement of share-based awards.
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"Despite disappointing results for the quarter and near-term
trends, we are pleased with our substantial backlog growth and
remain confident in our industry's opportunities," said
Steven Nielsen, President and Chief
Executive Officer of Dycom.
A conference call to discuss this press release and related
materials will be hosted Monday, August 13, 2018 at
9:00 a.m. (ET). Specific dial-in and
replay information appears below. The Company plans to report full
financial results for the fiscal 2019 second quarter on Wednesday,
August 29, 2018, before the open of trading on the New York
Stock Exchange.
Outlook
The Company is revising its financial guidance for the 2019
fiscal year ending January 26, 2019
to reflect the preliminary results for the fiscal 2019 second
quarter and the current expectations for the remainder of the
fiscal year. The revised financial guidance is preliminary and will
be updated, as necessary, in the Company's fiscal 2019 second
quarter results release scheduled for Wednesday, August 29, 2018. The Company currently
expects the following:
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Previous
Guidance
Fiscal 2019*
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Revised
Guidance
Fiscal 2019 (a)
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Contract
revenues
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$3.23 - $3.43
billion
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$3.01 - $3.11
billion
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Diluted Earnings per
Common Share - GAAP
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$3.81 -
$4.70
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$2.17 -
$2.62
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Non-GAAP Adjusted
Diluted Earnings per Common Share
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$4.26 -
$5.15
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$2.62 -
$3.07
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Non-GAAP Adjusted
EBITDA % of contract revenues
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12.4% -
12.9%
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10.7% -
11.1%
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(a) The Company's
revised guidance for diluted earnings per share on a GAAP and
Non-GAAP basis for fiscal 2019 includes approximately $0.9 million
of incremental tax benefits primarily from fiscal year tax filings
and the tax effect of the settlement of share-based awards
recognized during the quarter ended July 28, 2018.
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*For a reconciliation of the previous Diluted Earnings per
Common Share guidance to the previous Non-GAAP Adjusted Diluted
Earnings per Common Share guidance and a reconciliation of the
previous Net income guidance to the previous Non-GAAP Adjusted
EBITDA guidance, see Exhibit 99.1 of the Company's Current Report
on Form 8-K filed with the Securities and Exchange Commission on
May 22, 2018.
The Company is also providing its outlook for the quarter ending
October 27, 2018. The following
outlook is preliminary and will be updated, as necessary, in the
Company's fiscal 2019 second quarter results release scheduled for
Wednesday, August 29, 2018:
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Guidance
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Quarter Ending
October 27, 2018
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Contract
revenues
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$785 - $835
million
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Diluted Earnings per
Common Share - GAAP
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$0.69 -
$0.93
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Non-GAAP Adjusted
Diluted Earnings per Common Share
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$0.80 -
$1.04
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Non-GAAP Adjusted
EBITDA % of contract revenues
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11.6% -
12.2%
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Other Information
As of July 28, 2018, on a
preliminary basis, the Company had cash and equivalents of
approximately $23.9 million, no
outstanding borrowings on its revolving line of credit and
$346.0 million of term loans
outstanding.
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 discuss this press release and related
materials will be hosted at 9:00 a.m. (ET), Monday,
August 13, 2018; call (800) 288-8975 (United States) or (612) 332-0718
(International) ten minutes before the conference call begins and
ask for the "Dycom 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 related materials will be
available shortly after the call on the Company's Investor Center
website at https://ir.dycomind.com until Wednesday,
September 12, 2018.
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.
Cautionary Statement Regarding Preliminary Results and
Outlook
The financial information contained in this press release for
the quarter ended July 28, 2018 is
preliminary and represents estimates of financial results for the
quarter then ended. When the Company files its Quarterly Report on
Form 10-Q for the quarter ended July 28,
2018, such information may differ from this preliminary
information as a result of the completion of the Company's
financial closing procedures, final adjustments, or other
developments that may arise between now and the time the Company
files its Quarterly Report on Form 10-Q. The Company plans to
announce second quarter financial results on
August 29, 2018. Additionally, the revised guidance for
fiscal 2019 and the guidance for the quarter ending October 27, 2018 included in this press release
is preliminary and is subject to risks and uncertainties that could
cause actual results for fiscal 2019 and the quarter ending
October 27, 2018 to differ materially
from this guidance. The guidance will be updated, as necessary, as
part of the Company's second quarter results release scheduled for
Wednesday, August 29, 2018.
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 fiscal
2019 and the quarter ending October 27,
2018, and statements found under the "Reconciliation of
Non-GAAP Financial Measures to Comparable GAAP Financial Measures"
section 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 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, 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
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RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
TO COMPARABLE GAAP
FINANCIAL MEASURES
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UNAUDITED
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DILUTED EARNINGS
PER COMMON SHARE TO NON-GAAP ADJUSTED DILUTED EARNINGS PER COMMON
SHARE
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The financial results
for the quarter ended July 28, 2018, the guidance for the quarter
ending October 27, 2018, and the revised guidance for fiscal 2019
included in this press release are preliminary and will be updated,
as necessary, in the Company's fiscal 2019 second quarter results
release scheduled for Wednesday, August 29, 2018.
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Preliminary
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Results
|
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Guidance
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Revised
|
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Quarter
Ended
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Quarter
Ending
|
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Guidance
|
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July 28, 2018
(a)
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October 27,
2018
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Fiscal 2019
(a)
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Diluted Earnings per
Common Share - GAAP
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$0.94 -
$0.97
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$0.69 -
$0.93
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$2.17 -
$2.62
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Adjustment
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Addback of after-tax
non-cash amortization of debt discount
and dilutive share effect of Notes (b) (c)
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0.11
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0.11
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0.45
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Non-GAAP Adjusted
Diluted Earnings per Common Share
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$1.05 -
$1.08
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$0.80 -
$1.04
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$2.62 -
$3.07
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Diluted Shares - GAAP
(in millions) (c)
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32.0
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31.9
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32.0
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Adjustment for
economic benefit of note hedge related to
Notes (in millions) (c)
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(0.1)
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—
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(0.2)
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Non-GAAP Adjusted
Diluted Shares (in millions) (c)
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31.8
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31.9
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31.9
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(a) The Company's
preliminary results for the quarter ended July 28, 2018 and revised
guidance for fiscal 2019 for diluted earnings per share on a GAAP
and Non-GAAP basis include approximately $0.9 million of
incremental tax benefits primarily from fiscal year tax filings and
the tax effect of the settlement of share-based awards recognized
during the quarter ended July 28, 2018.
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(b) The Company
expects to recognize approximately $4.8 million, $4.8 million, and
$19.1 million in pre-tax interest expense during the quarter ended
July 28, 2018, the quarter ending October 27, 2018, and
fiscal 2019, respectively, for non-cash amortization of the
debt discount associated with the Company's 0.75% convertible
senior notes due September 2021 (the "Notes"). The addback for
fiscal 2019 also includes approximately $0.01 for the Non-GAAP
impact of the dilutive share effect of the Notes.
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(c) 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. Non-GAAP Adjusted Diluted Shares for the quarter ended
July 28, 2018 excludes the GAAP dilutive share effect of the Notes.
For Non-GAAP Adjusted Diluted Earnings per Common Share
calculations for the quarter ending October 27, 2018 and fiscal
2019, 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.
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Amounts in table
above may not add due to rounding.
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DYCOM INDUSTRIES,
INC. AND SUBSIDIARIES
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RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
TO COMPARABLE GAAP
FINANCIAL (CONTINUED)
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UNAUDITED
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NET INCOME TO
NON-GAAP ADJUSTED EBITDA BASED ON THE MIDPOINT OF EARNINGS PER
COMMON SHARE RANGE
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The financial results
for the quarter ended July 28, 2018, the guidance for the quarter
ending October 27, 2018, and the revised guidance for fiscal 2019
included in this press release are preliminary and will be updated,
as necessary, in the Company's fiscal 2019 second quarter results
release scheduled for Wednesday, August 29, 2018.
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Preliminary
|
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|
|
Results
|
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Guidance
|
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Revised
|
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Quarter
Ended
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Quarter
Ending
|
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Guidance
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July 28,
2018
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October 27,
2018
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Fiscal
2019
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(at midpoint of
EPS range)
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Net income
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$
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30
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$
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26
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$
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77
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Interest expense,
net
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10
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11
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43
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Provision for income
taxes
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10
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10
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28
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Depreciation and
amortization
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45
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45
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179
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Earnings Before
Interest, Taxes, Depreciation & Amortization
("EBITDA")
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96
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92
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326
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Gain on sale of fixed
assets
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(5)
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(3)
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(17)
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Stock-based
compensation expense
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6
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7
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24
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Non-GAAP Adjusted
EBITDA
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$
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97
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$
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96
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$
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333
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Contract revenues (at
midpoint of range)
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$
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799.5
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$
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810.0
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$
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3,060.0
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Non-GAAP Adjusted
EBITDA % of contract revenues (at
midpoint of range)
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12.1%
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11.9%
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10.9%
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Amounts in table
above may not add due to rounding.
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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 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, 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 adjusted results - The tax impact of
adjusted results reflects the Company's effective tax rate used for
financial planning for the applicable period.
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SOURCE Dycom Industries, Inc.