PALM BEACH GARDENS, Fla., Nov. 20, 2018 /PRNewswire/ -- Dycom Industries, Inc. (NYSE: DY) announced today its results for the third quarter and nine months ended October 27, 2018. The Company reported:
The Company also reported:
Outlook
For the quarter ending January 26, 2019 and fiscal 2019, the Company currently expects the following:
Quarter Ending | Fiscal 2019 | ||
Contract revenues | $695 - $745 million | $3.074 - $3.124 billion | |
GAAP Diluted Earnings (Loss) per Common Share | $(0.09) - $0.13 | $2.25 - $2.47 | |
Non-GAAP Adjusted Diluted Earnings per Common Share | $0.02 - $0.24 | $2.70 - $2.92 | |
Non-GAAP Adjusted EBITDA % of contract revenues | 8.4% - 9.2% | 10.7% - 10.8% |
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 Reconciliation of Non-GAAP Financial Measures to Comparable 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), Tuesday, November 20, 2018; call (800) 230-1074 (United States) or (612) 234-9960 (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 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 the related materials will be available at https://ir.dycomind.com until Thursday, December 20, 2018.
About Dycom Industries, Inc.
Dycom is a leading provider of specialty contracting services throughout the United States. 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
This press release contains forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act. These statements include statements related to the outlook for the quarter ending January 26, 2019 and fiscal 2019 found under the "Outlook" and "Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures" sections 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 Transition Report on Form 10-K, Form 10-Qs 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, 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 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 | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(Dollars in thousands) | |||||||
Unaudited | |||||||
October 27, 2018 | January 27, 2018 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and equivalents | $ | 21,513 | $ | 84,029 | |||
Accounts receivable, net (a) | 849,769 | 318,684 | |||||
Contract assets (a) | 147,320 | 369,472 | |||||
Inventories | 90,819 | 79,039 | |||||
Income tax receivable | 5,496 | 13,852 | |||||
Other current assets | 34,010 | 39,710 | |||||
Total current assets | 1,148,927 | 904,786 | |||||
Property and equipment, net | 428,305 | 414,768 | |||||
Goodwill and other intangible assets, net | 492,299 | 493,212 | |||||
Other | 63,681 | 28,190 | |||||
Total non-current assets | 984,285 | 936,170 | |||||
Total assets | $ | 2,133,212 | $ | 1,840,956 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 134,702 | $ | 92,361 | |||
Current portion of debt | ? | 26,469 | |||||
Contract liabilities | 7,631 | 6,480 | |||||
Accrued insurance claims | 41,579 | 53,890 | |||||
Income taxes payable | 668 | 755 | |||||
Other accrued liabilities | 119,464 | 79,657 | |||||
Total current liabilities | 304,044 | 259,612 | |||||
Long-term debt | 867,835 | 733,843 | |||||
Accrued insurance claims | 65,981 | 59,385 | |||||
Deferred tax liabilities, net non-current | 72,580 | 57,428 | |||||
Other liabilities | 5,914 | 5,692 | |||||
Total liabilities | 1,316,354 | 1,115,960 | |||||
Total stockholders' equity | 816,858 | 724,996 | |||||
Total liabilities and stockholders' equity | $ | 2,133,212 | $ | 1,840,956 | |||
(a) The Company adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09") effective January 28, 2018, the first day of fiscal 2019. The adoption of ASU 2014-09 resulted in balance sheet classification changes for amounts that have not been invoiced to customers but for which the Company has satisfied the performance obligation and has an unconditional right to receive payment. Prior to adoption, amounts not invoiced to customers were included in the Company's contract asset, historically referred to as Costs and Estimated Earnings in Excess of Billings, regardless of rights to payment. Under ASU 2014-09, these amounts of unbilled receivables are included in accounts receivable, net. As of January 28, 2018, the date of adoption, the Company reclassified $311.7 million of unbilled receivables from contract assets to accounts receivable, net. Upon reclassification, accounts receivable, net and contract assets were $630.4 million and $57.8 million, respectively, as of January 28, 2018. |
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
(Dollars in thousands, except share amounts) | ||||||||||||
Unaudited | ||||||||||||
Quarter | Quarter | Nine Months | Nine Months | |||||||||
Ended | Ended | Ended | Ended | |||||||||
October 27, 2018 | October 28, 2017 | October 27, 2018 | October 28, 2017 | |||||||||
Contract revenues | $ | 848,237 | $ | 756,215 | $ | 2,379,081 | $ | 2,322,741 | ||||
Costs of earned revenues, excluding | 687,164 | 600,847 | 1,929,113 | 1,829,220 | ||||||||
General and administrative expenses (a) | 68,763 | 64,562 | 195,601 | 185,398 | ||||||||
Depreciation and amortization | 45,533 | 42,651 | 133,694 | 120,306 | ||||||||
Total | 801,460 | 708,060 | 2,258,408 | 2,134,924 | ||||||||
Interest expense, net (b) | (11,310) | (9,707) | (31,922) | (28,824) | ||||||||
Other income, net | 2,817 | 5,931 | 14,686 | 16,767 | ||||||||
Income before income taxes | 38,284 | 44,379 | 103,437 | 175,760 | ||||||||
Provision for income taxes | 10,454 | 15,603 | 28,476 | 64,480 | ||||||||
Net income | $ | 27,830 | $ | 28,776 | $ | 74,961 | $ | 111,280 | ||||
Earnings per common share: | ||||||||||||
Basic earnings per common share | $ | 0.89 | $ | 0.93 | $ | 2.40 | $ | 3.57 | ||||
Diluted earnings per common share | $ | 0.87 | $ | 0.90 | $ | 2.34 | $ | 3.50 | ||||
Shares used in computing earnings per common share: | ||||||||||||
Basic | 31,246,591 | 31,061,448 | 31,214,172 | 31,167,753 | ||||||||
Diluted (c) | 31,834,542 | 31,891,574 | 32,065,229 | 31,822,106 | ||||||||
(a) Includes stock-based compensation expense of $7.4 million for each of the quarters ended October 27, 2018 and October 28, 2017 and $18.3 million and $17.2 million for the nine months ended October 27, 2018 and October 28, 2017, respectively. | ||||||||||||
(b) Includes pre-tax interest expense for non-cash amortization of the debt discount associated with the Notes of approximately $4.8 million and $4.5 million for the quarters ended October 27, 2018 and October 28, 2017, respectively, and approximately $14.2 million and $13.5 million for the nine months ended October 27, 2018 and October 28, 2017, respectively. | ||||||||||||
(c) During the first and second quarters of fiscal 2019, the Company's average stock price exceeded the $96.89 conversion price of its Notes. As a result, diluted shares used in computing diluted earnings per common share for the nine months ended October 27, 2018 include approximately 0.2 million weighted shares of potential dilution from the embedded conversion feature in the Notes. |
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 GROWTH %'s | |||||||||||||||||
Contract | Revenues | Revenues | Non-GAAP - Organic | GAAP - Growth % | Non-GAAP - | ||||||||||||
Quarter Ended October 27, 2018 | $ | 848,237 | $ | (8,754) | $ | (3,870) | $ | 835,613 | 12.2% | 12.9% | |||||||
Quarter Ended October 28, 2017 | $ | 756,215 | $ | ? | $ | (15,939) | $ | 740,276 | |||||||||
Nine Months Ended October 27, 2018 | $ | 2,379,081 | $ | (54,253) | $ | (22,478) | $ | 2,302,350 | 2.4% | 0.8% | |||||||
Nine Months Ended October 28, 2017 | $ | 2,322,741 | $ | (23,886) | $ | (15,484) | $ | 2,283,371 | |||||||||
(a) Amounts for the quarters and nine months ended October 27, 2018 and October 28, 2017 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. |
NON-GAAP ADJUSTED EBITDA | |||||||||||
Quarter | Quarter | Nine Months | Nine Months | ||||||||
Ended | Ended | Ended | Ended | ||||||||
October 27, 2018 | October 28, 2017 | October 27, 2018 | October 28, 2017 | ||||||||
Reconciliation of net income to Non-GAAP | |||||||||||
Net income | $ | 27,830 | $ | 28,776 | $ | 74,961 | $ | 111,280 | |||
Interest expense, net | 11,310 | 9,707 | 31,922 | 28,824 | |||||||
Provision for income taxes | 10,454 | 15,603 | 28,476 | 64,480 | |||||||
Depreciation and amortization | 45,533 | 42,651 | 133,694 | 120,306 | |||||||
Earnings Before Interest, Taxes, | 95,127 | 96,737 | 269,053 | 324,890 | |||||||
Gain on sale of fixed assets | (3,874) | (6,495) | (17,198) | (18,189) | |||||||
Stock-based compensation expense | 7,366 | 7,380 | 18,277 | 17,169 | |||||||
Non-GAAP Adjusted EBITDA | $ | 98,619 | $ | 97,622 | $ | 270,132 | $ | 323,870 | |||
Contract revenues | $ | 848,237 | $ | 756,215 | $ | 2,379,081 | $ | 2,322,741 | |||
Non-GAAP Adjusted EBITDA % of contract revenues | 11.6% | 12.9% | 11.4% | 13.9% |
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES | |||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||||||||||
(Dollars in thousands, except share amounts) | |||||||||||
Unaudited | |||||||||||
NET INCOME, NON-GAAP ADJUSTED NET INCOME, DILUTED EARNINGS PER COMMON SHARE, NON-GAAP ADJUSTED DILUTED EARNINGS PER COMMON SHARE, AND NON-GAAP ADJUSTED DILUTED SHARES | |||||||||||
Quarter | Quarter | Nine Months | Nine Months | ||||||||
Ended | Ended | Ended | Ended | ||||||||
October 27, 2018 | October 28, 2017 | October 27, 2018 | October 28, 2017 | ||||||||
Reconciliation of Non-GAAP Adjusted Net Income: | |||||||||||
Net income | $ | 27,830 | $ | 28,776 | $ | 74,961 | $ | 111,280 | |||
Adjustments: | |||||||||||
Pre-tax non-cash amortization of debt | 4,800 | 4,547 | 14,223 | 13,471 | |||||||
Tax impact of non-cash amortization of debt | (1,321) | (1,728) | (3,911) | (5,047) | |||||||
Total adjustments, net of tax | 3,479 | 2,819 | 10,312 | 8,424 | |||||||
Non-GAAP Adjusted Net Income | $ | 31,309 | $ | 31,595 | $ | 85,273 | $ | 119,704 | |||
Reconciliation of Non-GAAP Adjusted | |||||||||||
Diluted earnings per common share - GAAP | $ | 0.87 | $ | 0.90 | $ | 2.34 | $ | 3.50 | |||
Total adjustments, net of tax and dilutive | 0.11 | 0.09 | 0.34 | 0.26 | |||||||
Non-GAAP Adjusted Diluted Earnings per | $ | 0.98 | $ | 0.99 | $ | 2.68 | $ | 3.76 | |||
Shares used in computing Non-GAAP | |||||||||||
Diluted shares - GAAP | 31,834,542 | 31,891,574 | 32,065,229 | 31,822,106 | |||||||
Adjustment for economic benefit of note | ? | ? | (245,065) | ? | |||||||
Non-GAAP Adjusted Diluted Shares (a) | 31,834,542 | 31,891,574 | 31,820,164 | 31,822,106 | |||||||
(a) 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 per share. Non-GAAP Adjusted Diluted Shares exclude the GAAP dilutive share effect of the Notes. | |||||||||||
Amounts in table above may not add due to rounding. |
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES | |||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO COMPARABLE GAAP FINANCIAL MEASURES (CONTINUED) | |||||
Unaudited | |||||
OUTLOOK - DILUTED EARNINGS PER COMMON SHARE AND NON-GAAP ADJUSTED DILUTED EARNINGS PER COMMON SHARE | |||||
Quarter Ending | |||||
January 26, 2019 (a) | Fiscal 2019 (a) | ||||
GAAP Diluted Earnings (Loss) per common share (b) | $(0.09) - $0.13 | $2.25 - $2.47 | |||
Adjustment | |||||
Addback of after-tax non-cash amortization of debt discount and dilutive share | 0.11 | 0.45 | |||
Non-GAAP Adjusted Diluted Earnings per Common Share | $0.02 - $0.24 | $2.70 - $2.92 | |||
Diluted shares (in millions) (b)(d) | 31.8 | 32.0 | |||
Adjustment for economic benefit of note hedge related to Notes (in millions) (d) |
? | (0.2) | |||
Non-GAAP Adjusted Diluted Shares (in millions) (d) | 31.8 | 31.8 | |||
(a) The tax effects of future vestings and exercises of share-based awards are excluded from both GAAP Diluted Earnings (Loss) per common share and Non-GAAP Adjusted Diluted Earnings per Common Share in the outlook table above. | |||||
(b) GAAP Loss per common share at the low end of the outlook range for the quarter ending January 26, 2019 is calculated using 31.3 million shares, which excludes common stock equivalents related to share-based awards as their effect would be anti-dilutive. | |||||
(c) The Company expects to recognize approximately $4.9 million and $19.1 million in pre-tax interest expense during the quarter ending January 26, 2019 and fiscal 2019, respectively, for the non-cash amortization of the debt discount associated with the Notes. The addback for fiscal 2019 also includes approximately $0.01 per share for the Non-GAAP impact of the dilutive share effect of the Notes. | |||||
(d) Actual GAAP diluted shares will include any dilutive effect of the Notes based on the average share price during the respective period. 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. Accordingly, for Non-GAAP Adjusted Diluted Earnings per Common Share calculations, 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. | |||||
Amounts in table above may not add due to rounding. |
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES | ||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO COMPARABLE GAAP FINANCIAL MEASURES (CONTINUED) | ||||||
(Dollars in millions) | ||||||
Unaudited | ||||||
RECONCILIATION OF NET INCOME TO NON-GAAP ADJUSTED EBITDA BASED ON THE MIDPOINT OF EARNINGS PER COMMON SHARE ("EPS") GUIDANCE | ||||||
Quarter Ending | ||||||
January 26, 2019 | Fiscal 2019 | |||||
(at midpoint of EPS guidance) | ||||||
Net income | $ | 1 | $ | 76 | ||
Interest expense, net | 13 | 44 | ||||
Provision for income taxes | 0.2 | 29 | ||||
Depreciation and amortization | 46 | 180 | ||||
Earnings Before Interest, Taxes, Depreciation & Amortization ("EBITDA") | 59 | 328 | ||||
Gain on sale of fixed assets | (1) | (18) | ||||
Stock-based compensation expense | 5 | 24 | ||||
Non-GAAP Adjusted EBITDA | $ | 63 | $ | 334 | ||
Contract revenues (at midpoint of guidance) | $ | 720 | $ | 3,099 | ||
Non-GAAP Adjusted EBITDA % of contract revenues (at midpoint of guidance) | 8.8% | 10.8% | ||||
Amounts in table 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:
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:
SOURCE Dycom Industries, Inc.
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