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Dycom Industries, Inc. Announces Fiscal 2013 Second Quarter Results

February 26, 2013

PALM BEACH GARDENS, Fla., Feb. 26, 2013 /PRNewswire/ — Dycom Industries, Inc. (NYSE: DY) announced today its results for the second quarter ended January 26, 2013. The results include the effect of the acquisition of substantially all of the telecommunications infrastructure services subsidiaries of Quanta Services, Inc., which was completed on December 3, 2012.

The Company reported:

  • Contract revenues of $369.3 million for the quarter ended January 26, 2013, compared to contract revenues of $267.4 million for the quarter ended January 28, 2012. Contract revenues for the quarter ended January 26, 2013 grew 3.5% on an organic basis after excluding $75.9 million of revenue from acquired subsidiaries and $16.7 million of revenue for storm restoration services in the current period.
  • Adjusted EBITDA (Non-GAAP) of $37.2 million for the quarter ended January 26, 2013, compared to $24.7 million for the quarter ended January 28, 2012.
  • Net income on a GAAP basis of $1.5 million, or $0.04 per common share diluted, for the quarter ended January 26, 2013, compared to $3.5 million, or $0.10 per common share diluted, for the quarter ended January 28, 2012. 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.

The Company also reported:

  • Contract revenues of $692.6 million for the six months ended January 26, 2013, compared to contract revenues of $587.0 million for the six months ended January 28, 2012. Contract revenues for the six months ended January 26, 2013 grew 2.9% on an organic basis after excluding $75.9 million of revenue from acquired subsidiaries and $16.7 million of revenue for storm restoration services in the six months ended January 26, 2013 and $3.7 million of revenue for storm restoration services in the six months ended January 28, 2012.
  • Adjusted EBITDA (Non-GAAP) of $77.6 million for the six months ended January 26, 2013, compared to $65.1 million for the six months ended January 28, 2012.
  • Net income on a GAAP basis of $13.3 million, or $0.40 per common share diluted, for the six months ended January 26, 2013, compared to $16.5 million, or $0.48 per common share diluted, for the six months ended January 28, 2012. 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 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, and stock-based compensation expense. See the accompanying tables which present a reconciliation of GAAP to Non-GAAP financial information.

Fiscal 2013 second quarter results are preliminary and are unaudited. In addition, the purchase price allocation of the tangible and intangible assets acquired and liabilities assumed during the period is preliminary and is subject to change.

A conference call to review the Company’s results will be hosted at 9 a.m. (ET), Wednesday, February 27, 2013; call (877) 209-9922 (United States) or (612) 332-0632 (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 8 a.m. (ET) on February 27, 2013. 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 29, 2013.

Dycom is a leading provider of specialty contracting services. These services, which are provided throughout the United States and in Canada, 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.

This press release may contain 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. Such risks and uncertainties 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 in December 2012, expected benefits and synergies of the acquisition, future financial and operating results, future opportunities for the combined businesses, the future impact of any acquisitions or dispositions, including the consummation of such acquisitions and dispositions, the anticipated outcome of other contingent events, including litigation, liquidity and other financial needs, the availability of financing, and the other risks detailed 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 26, 2013 and July 28, 2012
                                  Unaudited

                                           January 26,        July 28,
                                                         2013            2012
                                                         ----            ----
    ASSETS                           (Dollars in thousands)
    CURRENT
     ASSETS:
    Cash and
     equivalents                                      $22,590         $52,581
    Accounts
     receivable,
     net                                              227,413         141,788
    Costs and
     estimated
     earnings in
     excess of
     billings                                         148,502         127,321
    Inventories                                        34,909          26,274
    Deferred tax
     assets, net                                       15,422          15,633
    Income taxes
     receivable                                         6,925           4,884
    Other current
     assets                                            13,923           8,466
                                                       ------           -----
    Total current
     assets                                           469,684         376,947
                                                      -------         -------

    PROPERTY AND
     EQUIPMENT,
     NET                                              187,242         158,247
    GOODWILL                                          262,989         174,849
    INTANGIBLE
     ASSETS, NET                                      134,306          49,773
    OTHER                                              18,588          12,377
                                                       ------          ------
    TOTAL NON-
     CURRENT
     ASSETS                                           603,125         395,246
                                                      -------         -------
    TOTAL ASSETS                                   $1,072,809        $772,193
                                                   ==========        ========

    LIABILITIES
     AND
     STOCKHOLDERS'
     EQUITY
    CURRENT
     LIABILITIES:
    Accounts
     payable                                          $64,166         $36,823
    Current
     portion of
     debt                                               6,250              74
    Billings in
     excess of
     costs and
     estimated
     earnings                                          11,386           1,522
    Accrued
     insurance
     claims                                            26,313          25,218
    Other accrued
     liabilities                                       69,959          50,926
                                                       ------          ------
    Total current
     liabilities                                      178,074         114,563

    LONG-TERM
     DEBT
     (including
     debt premium
     of $3.8
     million at
     January 26,
     2013)                                            420,033         187,500
    ACCRUED
     INSURANCE
     CLAIMS                                            23,693          23,591
    DEFERRED TAX
     LIABILITIES,
     NET NON-
     CURRENT                                           48,100          49,537
    OTHER
     LIABILITIES                                        4,537           4,071
                                                        -----           -----
    Total
     liabilities                                      674,437         379,262

    Total
     Stockholders'
     Equity                                           398,372         392,931
                                                      -------         -------
    TOTAL
     LIABILITIES
     AND
     STOCKHOLDERS'
     EQUITY                                        $1,072,809        $772,193
                                                   ==========        ========

                                                                                DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
                                                                            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                               Unaudited

                                                                                              Three Months                 Three Months                          Six Months                 Six Months
                                                                                                  Ended                        Ended                                Ended                      Ended
                                                                                              January 26,                  January 28,                           January 26,                January 28,
                                                                                                                     2013                         2012                                2013                       2012
                                                                                                                     ----                         ----                                ----                       ----
                                                                                                                    (Dollars in thousands, except per share amounts)

    Contract revenues                                                                                            $369,326                     $267,407                            $692,613                   $586,981

    Costs of earned revenues, excluding                                                                           301,516                      220,239                             558,582                    475,426
    depreciation and amortization
    General and administrative expenses (1)                                                                        38,827                       24,275                              67,652                     49,633
    Depreciation and amortization                                                                                  20,819                       15,528                              36,130                     31,486
                                                                                                                   ------                       ------                              ------                     ------
    Total                                                                                                         361,162                      260,042                             662,364                    556,545

    Interest expense, net                                                                                          (5,748)                      (4,177)                             (9,946)                    (8,350)
    Other income, net                                                                                                 428                        2,357                               2,042                      5,317
                                                                                                                      ---                        -----                               -----                      -----

    Income before income taxes                                                                                      2,844                        5,545                              22,345                     27,403

    Provision for income taxes                                                                                      1,381                        2,060                               9,022                     10,952
                                                                                                                    -----                        -----                               -----                     ------

    Net income                                                                                                     $1,463                       $3,485                             $13,323                    $16,451

    Earnings per common share:

    Basic earnings per common share                                                                                 $0.04                        $0.10                               $0.40                      $0.49

    Diluted earnings per common share                                                                               $0.04                        $0.10                               $0.40                      $0.48

    Shares used in computing income per common share:
       Basic                                                                                                   32,780,667                   33,759,015                          32,935,305                 33,633,596
                                                                                                               ==========                   ==========                          ==========                 ==========

       Diluted                                                                                                 33,514,416                   34,636,520                          33,607,180                 34,431,419
                                                                                                               ==========                   ==========                          ==========                 ==========

    (1) Includes stock-based compensation expense of $2.5 million and $1.6 million for the three months ended January 26, 2013 and January 28, 2012, respectively, and $4.8 million and $3.0 million for the six months ended January 26, 2013 and January 28,
     2012, respectively.

                                                                                                                                                                    DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
                                                                                                                                                                RECONCILIATION OF GAAP TO NON-GAAP INFORMATION
                                                                                                                                                                                   Unaudited
                                                                                                                                                                                  (continued)

    The below table presents the reconciliation of contract revenues adjusted for revenue from subsidiaries acquired in the second quarter of fiscal 2013 and storm restoration service revenues generated during the current and prior year periods.

                                                                                                               Contract                                   Revenues from                                      Revenues                                  Contract              %               %
                                                                                                              Revenues -                                  subsidiaries                                      from storm                                Revenues -          Growth -       Growth -
                                                                                                                 GAAP                                    acquired in the                                    restoration                                Non-GAAP             GAAP         Non-GAAP
                                                                                                                                                         second quarter                                      services
                                                                                                                                                         of fiscal 2013
                                                                                                                                                         --------------
                                                                                                           (Dollars in thousands)

                                                                                                                          $369,326                                         $(75,946)                                        $(16,721)                            $276,659          38.1%          3.5%
    Three Months Ended January 26, 2013

                                                                                                                          $267,407                          $                     -                          $                     -                             $267,407
    Three Months Ended January 28, 2012

                                                                                                                          $692,613                                         $(75,946)                                        $(16,721)                            $599,946          18.0%          2.9%
    Six Months Ended January 26, 2013

                                                                                                                          $586,981                          $                     -                                          $(3,729)                            $583,252
    Six Months Ended January 28, 2012

                                                                                                                          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 and January 28, 2012.

                                                                                                                                                                Three Months             Three Months                                     Six Months              Six Months
                                                                                                                                                                    Ended                    Ended                                           Ended                   Ended
                                                                                                                                                                January 26,              January 28,                                      January 26,             January 28,
                                                                                                                                                                                   2013                                              2012                   2013                    2012
                                                                                                                                                                                   ----                                              ----                   ----                    ----
                                                                                                                                                                                     (Dollars in thousands, except per share amounts)

    Reconciling Items:
                                                             Acquisition related costs                                                                                          $(5,829)            $                                   -                $(6,539)           $          -
                                                             Write-off of deferred financing costs                                                                                 (321)                                                -                   (321)                      -
    Total Reconciling Items                                                                                                                                                     $(6,150)            $                                   -                $(6,860)           $          -

    GAAP net income                                                                                                                                                              $1,463                                            $3,485                $13,323                 $16,451
    Adjustment for Reconciling Items above, net of tax                                                                                                                            3,710                                                 -                  4,154                       -
                                                                                                                                                                                  -----                                               ---
    Non-GAAP net income                                                                                                                                                          $5,173                                            $3,485                $17,477                 $16,451

    Earnings per common share:

    Basic earnings per common share  - GAAP                                                                                                                                       $0.04                                             $0.10                  $0.40                   $0.49
    Adjustment for Reconciling Items above, net of tax                                                                                                                             0.11                                                 -                   0.13                       -
                                                                                                                                                                                   ----                                               ---                   ----                     ---
    Basic earnings per common share - Non-GAAP                                                                                                                                    $0.16                                             $0.10                  $0.53                   $0.49

    Diluted earnings per common share - GAAP                                                                                                                                      $0.04                                             $0.10                  $0.40                   $0.48
    Adjustment for Reconciling Items above, net of tax                                                                                                                             0.11                                                 -                   0.12                       -
                                                                                                                                                                                   ----                                               ---                   ----                     ---
    Diluted earnings per common share - Non-GAAP                                                                                                                                  $0.15                                             $0.10                  $0.52                   $0.48

    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                                        33,759,015             32,935,305              33,633,596
                                                                                                                                                                             ==========                                        ==========             ==========              ==========

       Diluted                                                                                                                                                               33,514,416                                        34,636,520             33,607,180              34,431,419
                                                                                                                                                                             ==========                                        ==========             ==========              ==========

                                                                                                                                   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 26, 2013 and January 28, 2012 and a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure.

                                                                                                                                                                  Three Months                                    Three Months                                        Six Months                                  Six Months
                                                                                                                                                                      Ended                                           Ended                                              Ended                                       Ended
                                                                                                                                                                   January 26,                                     January 28,                                        January 26,                                 January 28,
                                                                                                                                                                                     2013                                            2012                                             2013                                        2012
                                                                                                                                                                                     ----                                            ----                                             ----                                        ----
                                                                                                                                                                  (Dollars in thousands)

    Reconciliation of Net income to Adjusted EBITDA (Non-GAAP):
                         Net income                                                                                                                                                $1,463                                          $3,485                                          $13,323                                     $16,451
                         Interest expense, net                                                                                                                                      5,748                                           4,177                                            9,946                                       8,350
                         Provision for income taxes                                                                                                                                 1,381                                           2,060                                            9,022                                      10,952
                         Depreciation and amortization expense                                                                                                                     20,819                                          15,528                                           36,130                                      31,486

                         Earnings Before Interest, Taxes, Depreciation & Amortization ("EBITDA")                                                                                   29,411                                          25,250                                           68,421                                      67,239
                                                                                                                                                 (826)                                         (2,220)                                              (2,407)                                     (5,139)
                         Gain on sale of fixed assets
                                                                                                                                                2,496                                           1,642                                                4,762                                       2,968
                         Stock-based compensation expense
                                                                                                                                                5,829                                               -                                                6,539                                           -
                         Acquisition related costs
                                                                                                                                                  321                                               -                                                  321                                           -
                         Write-off of deferred financing costs
                         Adjusted EBITDA (Non-GAAP)                                                                                                                               $37,231                                         $24,672                                          $77,636                                     $65,068
                                                                                                                                                                                  =======                                         =======                                          =======                                     =======

SOURCE Dycom Industries, Inc.


Source: PR Newswire