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Dycom Industries, Inc. Announces Fiscal 2014 Second Quarter Results And Provides Guidance For The Next Fiscal Quarter

PALM BEACH GARDENS, Fla., Feb. 25, 2014 /PRNewswire/ -- Dycom Industries, Inc. (NYSE: DY) announced today its results for the second quarter ended January 25, 2014.

The Company reported:

  • Contract revenues of $390.5 million for the quarter ended January 25, 2014, compared to $369.3 million for the quarter ended January 26, 2013. Contract revenues for the quarter ended January 25, 2014 grew 0.9% on an organic basis after excluding revenues from businesses acquired during fiscal 2013 from the three month periods ended January 25, 2014 and January 26, 2013 and $16.7 million of revenues for storm restoration services in the three months ended January 26, 2013. Revenues from businesses acquired during fiscal 2013 were $111.5 million and $75.9 million for the three months ended January 25, 2014 and January 26, 2013, respectively.
  • Adjusted EBITDA (Non-GAAP) of $28.2 million for the three months ended January 25, 2014, compared to $37.2 million for the three months ended January 26, 2013. 
  • Net loss of $3.1 million, or $0.09 loss per common share, for the quarter ended January 25, 2014, compared to net income of $1.5 million, or $0.04 per common share diluted, for the quarter ended January 26, 2013. On a Non-GAAP basis, net income for the quarter ended January 26, 2013 was $5.2 million, or $0.15 per common share diluted. The Non-GAAP net income for the quarter ended January 26, 2013 excludes $5.8 million in pre-tax acquisition related costs and a pre-tax write-off of $0.3 million of deferred financing costs in connection with the replacement of the Company's credit facility in December 2012.

Worse than expected weather during the latter part of the second fiscal quarter of 2014 sharply impacted the Company's results. Major snowfalls and extremely cold temperatures reduced the number of available workdays and negatively impacted productivity and margins.

The Company also reported:

  • Contract revenues of $903.2 million for the six months ended January 25, 2014, compared to $692.6 million for the six months ended January 26, 2013. Contract revenues for the six months ended January 25, 2014 grew 5.8% on an organic basis after excluding revenues from businesses acquired during fiscal 2013 from the six month periods ended January 25, 2014 and January 26, 2013 and $16.7 million of revenues for storm restoration services in the six months ended January 26, 2013. Revenues from businesses acquired during fiscal 2013 were $268.6 million and $75.9 million for the six months ended January 25, 2014 and January 26, 2013, respectively.
  • Adjusted EBITDA (Non-GAAP) of $91.4 million for the six months ended January 25, 2014, compared to $77.6 million for the six months ended January 26, 2013. 
  • Net income of $15.6 million, or $0.45 per common share diluted, for the six months ended January 25, 2014, compared to $13.3 million, or $0.40 per common share diluted, for the six months ended January 26, 2013. On a Non-GAAP basis, net income for the six months ended January 26, 2013 was $17.5 million, or $0.52 per common share diluted. The Non-GAAP net income for the six months ended January 26, 2013 excludes $6.5 million in pre-tax acquisition related costs and a pre-tax write-off of $0.3 million of deferred financing costs in connection with the replacement of the Company's credit facility in December 2012.

The Company also announced its outlook for the third quarter of fiscal 2014. The Company currently expects revenue for the third quarter of fiscal 2014 to range from $415.0 million to $435.0 million and diluted earnings per share to range from $0.19 to $0.26.

The Company has defined Adjusted EBITDA (Non-GAAP) as earnings before interest, taxes, depreciation and amortization, gain on sale of fixed assets, acquisition related costs, write-off of deferred financing costs, stock-based compensation expense, and certain non-recurring items. See the accompanying tables which present a reconciliation of GAAP to Non-GAAP financial information.

A conference call to review the Company's results will be hosted at 9:00 a.m. (ET), Wednesday, February 26, 2014; call (800) 230-1074 (United States) or (612) 288-0340 (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 http://www.dycomind.com under the heading "Events." The conference call materials will be available at approximately 7:00 a.m. (ET) on February 26, 2014. 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 http://www.dycomind.com until Friday, March 28, 2014.

For additional detail on selected financial information including organic revenue, customer metrics, and certain other selected financial data and Non-GAAP measures, please refer to the Trend Schedule on Dycom's website at http://www.dycomind.com in the Investor Center. The Trend Schedule will be available at approximately 7:00 a.m. (ET) on February 26, 2014.

Dycom is a leading provider of specialty contracting services throughout the United States and in Canada. These services include 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 and others.

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). The Company believes that the presentation of certain Non-GAAP financial measures in this press release provides information that is useful to investors because it allows for a more direct comparison of the Company's performance for the period with the Company's performance in the comparable prior-year period. 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. 

Fiscal 2014 second quarter results are preliminary and are 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. 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 businesses acquired, 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

January 25, 2014 and July 27, 2013

Unaudited








January 25,


July 27,



2014


2013

ASSETS


(Dollars in thousands)

CURRENT ASSETS:





Cash and equivalents

$

16,344

$

18,607

Accounts receivable, net


231,619


252,202

Costs and estimated earnings in excess of billings


174,138


204,349

Inventories


43,426


35,999

Deferred tax assets, net


16,334


16,853

Income taxes receivable


18,347


2,516

Other current assets


16,142


10,608

Total current assets


516,350


541,134






PROPERTY AND EQUIPMENT, NET


203,639


202,703

GOODWILL


267,810


267,810

INTANGIBLE ASSETS, NET


115,243


125,275

OTHER


16,852


17,286

TOTAL NON-CURRENT ASSETS


603,544


613,074

TOTAL ASSETS

$

1,119,894

$

1,154,208






LIABILITIES AND STOCKHOLDERS' EQUITY





CURRENT LIABILITIES:





Accounts payable

$

52,315

$

77,954

Current portion of debt


9,375


7,813

Billings in excess of costs and estimated earnings


13,869


13,788

Accrued insurance claims


32,638


29,069

Other accrued liabilities


57,566


71,191

Total current liabilities


165,763


199,815











LONG-TERM DEBT


416,301


444,169

ACCRUED INSURANCE CLAIMS


30,942


27,250

DEFERRED TAX LIABILITIES, NET NON-CURRENT


49,003


48,612

OTHER LIABILITIES


6,249


6,001

Total liabilities


668,258


725,847






Total Stockholders' Equity


451,636


428,361

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,119,894

$

1,154,208






 

DYCOM INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited












Three Months


Three Months


Six Months


Six Months



Ended


Ended


Ended


Ended



January 25,


January 26,


January 25,


January 26,



2014


2013


2014


2013



(Dollars in thousands, except per share amounts)










Contract revenues 

$

390,518

$

369,326

$

903,238

$

692,613










Costs of earned revenues, excluding depreciation and amortization


327,353


301,516


737,472


558,582

General and administrative expenses (1)


38,562


38,827


81,637


67,652

Depreciation and amortization


23,435


20,819


46,987


36,130

Total 


389,350


361,162


866,096


662,364










Interest expense, net


(6,800)


(5,748)


(13,686)


(9,946)

Other income, net


595


428


2,607


2,042










Income (loss) before income taxes


(5,037)


2,844


26,063


22,345










Provision (benefit) for income taxes


(1,970)


1,381


10,470


9,022










Net income (loss)

$

(3,067)

$

1,463

$

15,593

$

13,323










Earnings (loss) per common share:


















Basic earnings (loss) per common share

$

(0.09)

$

0.04

$

0.46

$

0.40










Diluted earnings (loss) per common share

$

(0.09)

$

0.04

$

0.45

$

0.40



















Shares used in computing income (loss) per common share:









   Basic


33,836,099


32,780,667


33,629,884


32,935,305










   Diluted


33,836,099


33,514,416


34,767,945


33,607,180










(1) Includes stock-based compensation expense of $3.5 million and $2.5 million for the three months ended January 25, 2014 and January 26, 2013, respectively, and $7.0 million and $4.8 million for the six months ended January 25, 2014 and January 26, 2013, respectively.


 

DYCOM INDUSTRIES, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP INFORMATION

Unaudited

















The below table presents the reconciliation of GAAP contract revenues to Non-GAAP contract revenues adjusted to exclude revenues from subsidiaries acquired during fiscal 2013 and storm restoration service revenues generated during the prior year periods, as well as the percentages of growth of GAAP and Non-GAAP contract revenues.



















Contract
Revenues -
GAAP


Revenues from
subsidiaries
acquired in fiscal
2013


Revenues
from storm
restoration
services


Contract
Revenues -
Non-GAAP


%
Growth -
GAAP


%
Growth -
Non-GAAP





(Dollars in thousands)






















Three Months Ended January 25, 2014


$    390,518


$       (111,500)


$              -


$    279,018


5.7

%

0.9

%

















Three Months Ended January 26, 2013


$    369,326


$         (75,946)


$   (16,721)


$    276,659






















Six Months Ended January 25, 2014


$    903,238


$       (268,577)


$              -


$    634,661


30.4

%

5.8

%

















Six Months Ended January 26, 2013


$    692,613


$         (75,946)


$   (16,721)


$    599,946





















 

DYCOM INDUSTRIES, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP INFORMATION

Unaudited

(continued)













The below table presents the Non-GAAP financial measure of Adjusted EBITDA for the three and six months ended January 25, 2014 and January 26, 2013 and a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP measure.









































Three Months


Three Months



Six Months


Six Months





Ended


Ended



Ended


Ended





January 25,


January 26,



January 25,


January 26,





2014


2013



2014


2013





(Dollars in thousands)


Reconciliation of net income (loss) to Adjusted EBITDA (Non-GAAP):










Net income (loss)

$

(3,067)

$

1,463


$

15,593

$

13,323



Interest expense, net


6,800


5,748



13,686


9,946



Provision (benefit) for income taxes


(1,970)


1,381



10,470


9,022



Depreciation and amortization expense


23,435


20,819



46,987


36,130



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


25,198


29,411



86,736


68,421



Gain on sale of fixed assets


(570)


(826)



(2,435)


(2,407)



Stock-based compensation expense


3,544


2,496



7,049


4,762



Acquisition related costs


-


5,829



-


6,539



Write-off of deferred financing costs


-


321



-


321



Adjusted EBITDA (Non-GAAP)

$

28,172

$

37,231


$

91,350

$

77,636

























 

DYCOM INDUSTRIES, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP INFORMATION

Unaudited

(continued)








The below table presents a reconciliation of GAAP to Non-GAAP net income for the three and six months ended January 26, 2013.











Three Months



Six Months




Ended



Ended




January 26,



January 26,




2013



2013




(Dollars in thousands, except per share amounts)








Reconciling Items:







Acquisition related costs, pre-tax

$

(5,829)


$

(6,539)


Write-off of deferred financing costs


(321)



(321)

Total Reconciling Items

$

(6,150)


$

(6,860)








GAAP net income

$

1,463


$

13,323

Adjustment for Reconciling Items above, net of tax


3,710



4,154

Non-GAAP net income

$

5,173


$

17,477








Earnings per common share:













Basic earnings per common share  - GAAP

$

0.04


$

0.40

Adjustment for Reconciling Items above, net of tax


0.11



0.13

Basic earnings per common share - Non-GAAP 

$

0.16


$

0.53








Diluted earnings per common share - GAAP

$

0.04


$

0.40

Adjustment for Reconciling Items above, net of tax


0.11



0.12

Diluted earnings per common share - Non-GAAP 

$

0.15


$

0.52








Earnings per share amounts may not add due to rounding.













Shares used in computing GAAP and Non-GAAP earnings per
common share and adjustment for Reconciling Items above:











   Basic


32,780,667



32,935,305








   Diluted


33,514,416



33,607,180








 

SOURCE Dycom Industries, Inc.

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