Dycom Industries, Inc. Announces Fiscal 2016 Second Quarter Results And Provides Guidance For The Next Fiscal Quarter

PALM BEACH GARDENS, Fla., Feb. 23, 2016 /PRNewswire/ -- Dycom Industries, Inc. (NYSE: DY) announced today its results for the second quarter ended January 23, 2016. The Company reported:

  • Contract revenues of $559.5 million for the quarter ended January 23, 2016, compared to $441.1 million for the quarter ended January 24, 2015. Contract revenues for the quarter ended January 23, 2016 grew 19.4% on an organic basis after excluding contract revenues from acquired businesses that were not owned for the entire period in both the current and prior year quarter. Total contract revenues from acquired businesses were $32.9 million for the quarter ended January 23, 2016.

  • Non-GAAP Adjusted EBITDA of $66.4 million, or 11.9% of contract revenues, for the quarter ended January 23, 2016, compared to $47.6 million, or 10.8% of contract revenues, for the quarter ended January 24, 2015.

  • Non-GAAP Adjusted Net Income of $18.0 million, or $0.54 per common share diluted, for the quarter ended January 23, 2016, compared to net income of $9.4 million, or $0.27 per common share diluted, for the quarter ended January 24, 2015. On a GAAP basis, net income was $15.5 million, or $0.46 per common share diluted, for the quarter ended January 23, 2016.

    Non-GAAP Adjusted Net Income for the quarter ended January 23, 2016 excludes $4.1 million of pre-tax interest expense incurred for non-cash amortization of the debt discount associated with the Company's 0.75% senior convertible notes due September 2021 issued in September 2015.

The Company also reported:

  • Contract revenues of $1.219 billion for the six months ended January 23, 2016, compared to $951.5 million for the six months ended January 24, 2015. Contract revenues for the six months ended January 23, 2016 grew 20.8% on an organic basis after excluding contract revenues from acquired businesses that were not owned for the entire period in both the current and prior year period. Total contract revenues from acquired businesses were $76.2 million for the six months ended January 23, 2016, compared to $6.0 million for the six months ended January 24, 2015.

  • Non-GAAP Adjusted EBITDA of $172.1 million, or 14.1% of contract revenues, for the six months ended January 23, 2016, compared to $114.0 million, or 12.0% of contract revenues, for the six months ended January 24, 2015.

  • Non-GAAP Adjusted Net Income of $60.0 million, or $1.78 per common share diluted, for the six months ended January 23, 2016, compared to net income of $30.2 million, or $0.86 per common share diluted, for the six months ended January 24, 2015. On a GAAP basis, net income was $46.3 million, or $1.37 per common share diluted, for the six months ended January 23, 2016.

    Non-GAAP Adjusted Net Income for the six months ended January 23, 2016 excludes the impact of a pre-tax charge of approximately $16.3 million for early extinguishment of debt in connection with the redemption of the Company's 7.125% senior subordinated notes, as well as $5.9 million of pre-tax interest expense incurred for non-cash amortization of the debt discount associated with the Company's 0.75% senior convertible notes due September 2021 issued in September 2015.

The Company also announced its outlook for the third quarter of fiscal 2016. The Company currently expects total contract revenues for the third quarter of fiscal 2016 to range from $585 million to $605 million and Non-GAAP Adjusted Diluted Earnings per Common Share to range from $0.70 to $0.78. Non-GAAP Adjusted Diluted Earnings per Common Share guidance excludes $4.2 million of pre-tax interest expense for non-cash amortization of debt discount, or $0.08 per common share diluted on an after-tax basis. A reconciliation of Non-GAAP Adjusted Diluted Earnings per Common Share guidance provided for the third quarter of fiscal 2016 is included within the press release tables.

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), Wednesday, February 24, 2016; call (800) 230-1059 (United States) or (612) 234-9959 (International) ten minutes before the conference call begins and ask for the "Dycom Results" conference call. A live webcast of the conference call, along with related materials, will be available at www.dycomind.com under the heading "Events." The conference call materials will be available at approximately 7:00 a.m. (ET) on February 24, 2016. If you are unable to attend the conference call at the scheduled time, a replay of the live webcast and the conference call materials will be available at www.dycomind.com until Friday, March 25, 2016.

For additional detail on selected financial information including organic contract revenue, customer metrics, and certain other selected financial data and Non-GAAP financial measures, please refer to the Trend Schedule at www.dycomind.com in the Investor Center. The Trend Schedule will be available at approximately 7:00 a.m. (ET) on February 24, 2016.

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 to telecommunications providers, underground facility locating services to various utilities, including telecommunications providers, and other construction and maintenance services to electric and gas utilities.

Forward Looking Information

Fiscal 2016 second quarter results 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 includes the third quarter of fiscal 2016 outlook and statements found under our "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 our 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 our customers, the adequacy of our insurance and other reserves and allowances for doubtful accounts, whether the carrying value of our 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, 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 our 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

Unaudited


As of


As of


January 23, 2016


July 25, 2015


(Dollars in thousands)

ASSETS




Current assets:




Cash and equivalents

$

20,166


$

21,289

Accounts receivable, net

318,282


315,134

Costs and estimated earnings in excess of billings

302,393


274,730

Inventories

57,916


48,650

Deferred tax assets, net

19,152


20,630

Income taxes receivable

29,285


Other current assets

19,431


16,199

Total current assets

766,625


696,632





Property and equipment, net

290,536


231,564

Goodwill and other intangible assets, net

410,879


392,579

Other

35,501


38,089

Total non-current assets

736,916


662,232

Total assets

$

1,503,541


$

1,358,864





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable

$

70,827


$

71,834

Current portion of debt (a)

5,625


3,750

Billings in excess of costs and estimated earnings

14,303


16,896

Accrued insurance claims

37,513


35,824

Other accrued liabilities

73,481


98,406

Total current liabilities

201,749


226,710





Long-term debt (a)

612,455


521,841

Accrued insurance claims

50,994


51,476

Deferred tax liabilities, net non-current

69,593


47,388

Other liabilities

4,546


4,249

Total liabilities

939,337


851,664





Total stockholders' equity

564,204


507,200

Total liabilities and stockholders' equity

$

1,503,541


$

1,358,864









(a) Total carrying amount of outstanding indebtedness consisted of the following:


As of


As of


January 23, 2016


July 25, 2015


(Dollars in thousands)





Credit Agreement - Revolving facility (matures April 2020)

$

103,250


$

95,250

Credit Agreement - Term Loan (matures April 2020)

150,000


150,000

7.125% senior subordinated notes (including debt premium of $2.8 million at July 25, 2015)


280,341

0.75% senior convertible notes (matures September 2021)

485,000


Less: Debt discount

(110,460)


Less: Unamortized debt issuance costs - Initial purchasers' discount

(9,710)



618,080


525,591

Less: Current portion of term loan

(5,625)


(3,750)

Long-term debt

$

612,455


$

521,841

 

 

DYCOM INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited










Three Months


Three Months


Six Months


Six Months


Ended


Ended


Ended


Ended


January 23, 2016


January 24, 2015


January 23, 2016


January 24, 2015


(Dollars in thousands, except per share amounts)









Contract revenues

$

559,470


$

441,081


$

1,218,738


$

951,470









Costs of earned revenues, excluding depreciation and amortization

450,284


355,429


957,263


758,898

General and administrative expenses (a)

47,020


41,815


98,484


86,511

Depreciation and amortization

29,898


23,264


57,347


46,193

Total

527,202


420,508


1,113,094


891,602









Interest expense, net (b)

(7,872)


(6,730)


(17,003)


(13,480)

Loss on debt extinguishment (c)



(16,260)


Other income, net

1,072


1,735


2,542


3,530

Income before income taxes

25,468


15,578


74,923


49,918









Provision for income taxes

9,995


6,146


28,626


19,679









Net income

$

15,473


$

9,432


$

46,297


$

30,239









Earnings per common share:
















Basic earnings per common share

$

0.47


$

0.28


$

1.41


$

0.89









Diluted earnings per common share

$

0.46


$

0.27


$

1.37


$

0.86

















Shares used in computing earnings per common share:








Basic

32,662,942


34,125,829


32,767,088


34,067,983









Diluted

33,520,136


35,127,398


33,703,438


35,122,530









 

(a) Includes stock-based compensation expense of $4.2 million and $3.7 million for the three months ended January 23, 2016 and January 24, 2015, respectively, and $8.7 million and $7.6 million for the six months ended January 23, 2016 and January 24, 2015, respectively.

(b) Includes $4.1 million and $5.9 million for the three and six months ended January 23, 2016, respectively, for non-cash amortization of the debt discount associated with the 0.75% convertible senior notes due September 2021 issued in September 2015.

(c) 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 in the first quarter of fiscal 2016.

 

 

DYCOM INDUSTRIES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

TO COMPARABLE GAAP FINANCIAL MEASURES

Unaudited



NON-GAAP ORGANIC CONTRACT REVENUES AND NON-GAAP ORGANIC CONTRACT REVENUES GROWTH %












Contract
Revenues -
GAAP


Revenues
from
businesses
acquired


Non-GAAP
- Organic
Contract
Revenues


GAAP 
- Growth
%


Non-GAAP
- Organic
Growth

%


(Dollars in thousands)











Three Months Ended January 23, 2016

$

559,470


$

(32,884)


$

526,586


26.8%


19.4%











Three Months Ended January 24, 2015

$

441,081


$


$

441,081















Six Months Ended January 23, 2016

$

1,218,738


$

(76,157)


$

1,142,581


28.1%


20.8%











Six Months Ended January 24, 2015

$

951,470


$

(5,953)


$

945,517





 

 

















NON-GAAP ADJUSTED EBITDA

















Three Months


Three Months


Six Months


Six Months


Ended


Ended


Ended


Ended


January 23,
2016


January 24,
2015


January 23,
2016


January 24,
2015


(Dollars in thousands)

Reconciliation of net income to Non-GAAP Adjusted EBITDA:









Net income

$

15,473


$

9,432


$

46,297


$

30,239

Interest expense, net

7,872


6,730


17,003


13,480

Provision for income taxes

9,995


6,146


28,626


19,679

Depreciation and amortization expense

29,898


23,264


57,347


46,193

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

63,238


45,572


149,273


109,591

Gain on sale of fixed assets

(1,016)


(1,659)


(2,152)


(3,182)

Stock-based compensation expense

4,200


3,664


8,708


7,554

Loss on debt extinguishment



16,260


Non-GAAP Adjusted EBITDA

$

66,422


$

47,577


$

172,089


$

113,963

 

 

DYCOM INDUSTRIES, INC. AND SUBSIDIARIES

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

Unaudited





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








Three Months


Six Months


Ended


Ended


January 23, 2016


January 23, 2016


(Dollars in thousands,

except share amounts)

Reconciliation of Non-GAAP Adjusted Net Income:








Net income

$

15,473


$

46,297





Adjustments




Pre-tax loss on debt extinguishment


16,260

Pre-tax non-cash amortization of debt discount

4,148


5,928

Tax impact of adjustments

(1,628)


(8,465)

Total adjustments, net of tax

2,520


13,723





Non-GAAP Adjusted Net Income

$

17,993


$

60,020





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








Net income per common share

$

0.46


$

1.37

Total adjustments from above, net of tax

0.08


0.41

Non-GAAP Adjusted Diluted Earnings per Common Share

$

0.54


$

1.78





Diluted shares used in computing Adjusted Diluted Earnings per Common Share

33,520,136


33,703,438

 

 


OUTLOOK - ADJUSTED DILUTED EARNINGS PER COMMON SHARE




Outlook for the


Three Months Ending


April 23, 2016 (a)





Diluted earnings per common share

 $0.62 - $0.70



Adjustment


After-tax non-cash amortization of debt discount (b)

$0.08



Non-GAAP Adjusted Diluted Earnings per Common Share

 $0.70 - $0.78





 

(a) Outlook for diluted earnings per common share and Non-GAAP adjusted diluted earnings per common share for the three months ending April 23, 2016 were computed using approximately 33.5 million in diluted weighted average shares outstanding.

(b) The Company expects to recognize approximately $4.2 million in pre-tax interest expense during the three months ending April 23, 2016 for non-cash amortization of the debt discount associated with its 0.75% senior convertible notes. The Company excludes the effect of this amortization in its Non-GAAP financial measures.

 

 

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. 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, loss on debt extinguishment, 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 loss on debt extinguishment, non-cash amortization of the debt discount, certain non-recurring items and any tax impact related to these items, and "Non-GAAP Adjusted Diluted Earnings per Common Share" as 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% senior convertible notes due September 2021 (the "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 will be amortized over the term of the notes but will not result in periodic cash interest payments. During the three and six months ended January 23, 2016, the Company recognized approximately $4.1 million and $5.9 million, respectively, in pre-tax interest expense for non-cash amortization of the debt discount associated with the Notes. 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.
    • Loss on debt extinguishment - 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 in the first quarter of fiscal 2016. Management believes excluding the loss on debt extinguishment from the Company's Non‑GAAP financial measures assists investors' overall understanding of the Company's current financial performance. The Company believes this type of charge is not indicative of its core operating results. The exclusion of the loss on debt extinguishment from the Company's Non-GAAP financial measures provides management with a consistent measure for assessing the current and historical financial results.
    • Tax impacts of adjusted results - The tax impact of the adjusted results for the three and six months ended January 23, 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 April 23, 2016 was calculated using an effective tax rate used for financial planning and forecasting future results.

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/dycom-industries-inc-announces-fiscal-2016-second-quarter-results-and-provides-guidance-for-the-next-fiscal-quarter-300224900.html

SOURCE Dycom Industries, Inc.

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