Dycom Industries, Inc. · NYSE:DY
Dycom Industries — Investor Presentation (December 2015)
36 slides from Dycom Industries's investor presentation, Dec 3, 2015
Slide 1: Dycom Industries, Inc. Investor Presentation December 2015
DYCOM INDUSTRIES, INC. Investor Presentation December 2015 Exhibit 99.1
Slide 2: Forward Looking Statements and Non-GAAP Information
2 Forward Looking Statements and Non-GAAP Information This presentation contains “forward-looking statements”. Other than statements of historical facts, all statements contained in this presentation, including statements regarding the Company’s future financial position, future revenue, prospects,
Slide 3: Overview
3 Overview Leading supplier of specialty contracting services to telecommunication providers nationwide Telecommunications networks fundamental to economic progress Firm and strengthening end market opportunities Telephone companies deploying FTTX to enable video offerings and 1 gigabit connection
Slide 4: Nationwide Footprint and Significant Resources
4 Nationwide footprint Operates in all 50 states, Washington, D.C. and in Canada Over 40 operating subsidiaries Strong revenue base and customer relationships Revenues of $659.3 million and organic growth of 21.9% in Q1-16 compared to $510.4 million in Q1-15 Non-GAAP Adjusted EBITDA at 16.0%
Slide 5: Industry Developments
5 Industry Developments Dycom’s scale, market position and financial strength position it well as opportunities expand Industry increasing network bandwidth dramatically Major industry participants deploying significant wireline networks Newly deployed networks provisioning 1 gigabit speeds; spe
Slide 6: Intensely Focused on Telecommunications Market
6 Intensely Focused on Telecommunications Market Outside Plant & Equipment Installation Premise Equipment Installation Wireless Engineering Underground Facility Locating Telecommunications Underground Facility Locating Electric and Gas Utilities and Other Contract revenues of $659.3 millio
Slide 7: Strong Secular Trend
7 Strong Secular Trend “It took 32 years – from 1984 to 2016 – to generate the first zettabyte of IP traffic annually. However, as this year’s Visual Networking Index forecasts, it will take only three additional years to reach the next zettabyte milestone when there will be more than 2 zettabytes o
Slide 8: Key Driver: FTTx Deployments
8 Key Driver: FTTx Deployments “we have been supporting fiber investment for some years now and it is paying off for us in some of the trends you are seeing in our business segment. With regard to that, we did commit to 12.5 million additional fiber to the prem investments as part of our DIRECTV dea
Slide 9: Key Driver: Fiber to Businesses
9 Key Driver: Fiber to Businesses Sources: Company Press Releases and transcripts “Turning to business services, it has been second-largest contributor to overall cable revenue growth for 18 of the last 19 quarters with third-quarter revenue increasing 19.5% to $1.2 billion. This rate of growth is e
Slide 10: Key Driver: Connect America Fund
10 Key Driver: Connect America Fund “[..] with respect to the CAF II deployment, we would expect to really hit the ground running here in late 2015 to 2016, to get some of the construction done and to get the living units that are easiest to get to first, such that by the end of 2016 we hope to be u
Slide 11: Key Driver: Wireless Network Upgrades
11 Key Driver: Wireless Network Upgrades “It's great to add customers on your network, but at some point, if you don't start to invest in the network and you just give data away for free, your network is going to start to suffer. And you need that cash flow to reinvest in the network. [….] we have a
Slide 12: Local Credibility, National Capability
12 Local Credibility, National Capability Dycom headquarters Primary locations Subsidiaries Dycom’s Nationwide Presence
Slide 13: Focused on High Value Profitable Growth
13 Focused on High Value Profitable Growth Anticipate emerging technology trends which drive capital spending Deliberately target high quality, long-term industry leaders which generate the vast majority of the industry’s profitable opportunities Selectively acquire businesses which complement
Slide 14: Well Established Customers
14 Well Established Customers Top Customers Dycom has established relationships with: Telephone companies Wireless carriers Cable television multiple system operators Electric utilities and others Customer Revenue Breakdown Q1-16 Blue-chip, investment grade customers comprise a substantial p
Slide 15: Durable Customer Relationships
15 Durable Customer Relationships $- $50 $100 $150 $200 $250 $300 $350 $400 $450 FY-06 FY-07 FY-08 FY-09 FY-10 FY-11 FY-12 FY-13 FY-14 FY-15 AT&T Comcast CenturyLink Verizon Charter Time Warner Cable Windstream Unnamed 33% 34% 33% 34% 34% 38% 40% 41% 42% 39% 67% 66% 67% 66% 66% 62% 60% 59% 58% 61% $
Slide 16: Anchored by Long-Term Agreements
16 Anchored by Long-Term Agreements Dycom is party to hundreds of MSA’s and other arrangements with customers that extend for periods of one or more years Generally multiple agreements maintained with each customer Master Service Agreements (MSA’s) Multi-year, multi-million dollar arrangemen
Slide 17: 10+ Years of Robust Cash Flow Generation
17 10+ Years of Robust Cash Flow Generation Sources and Uses of Cash ($ in millions) Notes: Amounts represent cumulative cash flow for fiscal 2006 – Q1 of fiscal 2016; See “Regulation G Disclosure” slides as set forth in the Appendix for a summary of amounts. 1 Other cash flow includes borrowings, o
Slide 18: Financial Update
DYCOM Financial Update J >
Slide 19: Financial Overview
19 Strong operating results Contract revenues of $659.3 million in Q1-16 compared to $510.4 million in Q1-15. Organic growth of 21.9% Non-GAAP Adjusted EBITDA of $105.7 million, or 16.0% of revenues in Q1-16, compared to $66.4 million, or 13.0% in Q1-15 Non-GAAP Adjusted Diluted EPS of $1.24
Slide 20: Strong and Sustained Financial Performance
20 Strong and sustained financial performance Contract Revenue Trend Annual Organic Revenue Trend Quarterly Contract Revenues Quarterly Organic Revenue Trend Annual Growth in Contract Revenues Financial charts - $ in millions See “Regulation G Disclosure” slides 30-36 for a reconciliation of GAAP to
Slide 21: Earnings
21 Earnings Non-GAAP Adjusted EBITDA Quarterly Adjusted EBITDA Non-GAAP Adjusted Diluted EPS Financial charts - $ in millions, except earnings per share amounts See “Regulation G Disclosure” slides 30-36 for a reconciliation of GAAP to Non-GAAP financial measures. Quarterly Non-GAAP Adjusted Diluted
Slide 22: Q1-16 Financing Transactions
22 Q1-16 Financing Transactions $485 million Senior Convertible Notes, 0.75% coupon, due 2021 (“Notes”) Value allocated between debt and equity components on issuance Debt discount of $116.4 million amortizes as GAAP interest expense over the 6-year term of the Notes, but will not require cash i
Slide 23: Strong Balance Sheet and Cash Flows
23 Strong balance sheet and cash flows Ample liquidity of $282.6 million at October 24, 2015 consisting of $260.8 million in availability under the revolver portion of the Senior Credit Facility and $21.8 million of cash on hand No near term debt maturities Liquidity and Cash Flow Notes: Amoun
Slide 24: Credit Metrics
24 Credit Metrics Leverage and Net Leverage Ratios1 Interest Coverage Ratio2 Sound credit metrics provide balance sheet flexibility Manageable leverage Proven ability to de-lever Ample interest coverage See “Regulation G Disclosure” slides 30-36 for a reconciliation of GAAP to Non-GAAP finan
Slide 25: Capital Allocated to Maximize Returns
25 Capital Allocated to Maximize Returns Strong balance sheet, solid cash flow and long-term confidence in industry outlook drives capital allocation strategy Invest in organic growth Organic revenue grew 21.9 % in Q1-16, reflecting growth from several key customers Total revenue increased $14
Slide 26: Questions & Answers
ODYCOM Questions & Answers >
Slide 27: Selected Information from Q1-16 Dycom Results Conference Call Materials
27 Selected Information from Q1-16 Dycom Results Conference Call Materials The following slides 28-30 were used on November 24, 2015 in connection with the Company’s conference call to discuss fiscal 2016 first quarter results and are included for your convenience. Reference is made to slide 2 title
Slide 28: Q2-2016 Outlook and Commentary
28 Q2-2015 Included for comparison Q2-2016 Outlook and Commentary Contract Revenues $ 441.1 $ 530 - $ 550 Expectation of normal winter weather patterns Broad range of demand from several large customers Robust 1 gigabit deployments, CAF II launches, core market share growth Total revenue exp
Slide 29: Looking Ahead to Q3-2016
29 Looking Ahead to Q3-2016 Q3-2015 Included for comparison Q3-2016 Outlook and Commentary Contract Revenues $ 492.4 Total revenue growth % in high teens or slightly better as % of revenue compared to Q3-15 Broad range of demand from several large customers Robust 1 gigabit deployments, CAF II u
Slide 30: Appendix: Regulation G Disclosure
30 Appendix: Regulation G Disclosure Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures Guidance – Diluted Earnings per Common Share Unaudited Use of Non-GAAP Financial Measures The Company reports its financial results in accordance with U.S. generally accepted acco
Slide 31: Appendix: Regulation G Disclosure
31 Appendix: Regulation G Disclosure Use of Non-GAAP Financial Measures The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). In our quarterly results releases, trend schedules, conference calls, slide presentations, and webcasts, we may u
Slide 32: Appendix: Regulation G Disclosure
32 Appendix: Regulation G Disclosure Notes: Amounts may not add due to rounding. 1 Other financing activities represents net cash provided by (used in) financing activities less repurchases of common stock. 2 Other investing activities represents net cash provided by (used in) investing activities l
Slide 33: Appendix: Regulation G Disclosure
33 Appendix: Regulation G Disclosure 1 Non-GAAP adjustments in FY 2010 reflect adjustments in Q4-10 resulting from the Company’s 52/53 week fiscal year of $20.1 million. The Q4-10 Non-GAAP adjustments reflect the impact of the additional week in Q4-10 and are calculated by dividing contract revenues
Slide 34: Reconciliation of Leverage Ratio, Net Leverage Ratio, and Fixed Interest Charge Ratios
34 Reconciliation of Leverage Ratio, Net Leverage Ratio, and Fixed Interest Charge Ratios TTM Q1-16 Current and long-term debt (including debt discount and unamortized debt fees) 641.6$ Addback:unamortized debt discount and debt fees 124.6 Total Notional Debt 766.2$ less: Cash and equivalents 21.8 N
Slide 35: Appendix: Regulation G Disclosure
35 Appendix: Regulation G Disclosure Notes: Amounts above may not add due to rounding. to other similarly titled measures of other companies. Use of Non-GAAP Financial Measures The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). In our q
Slide 36: Appendix: Regulation G Disclosure - Explanation of Non-GAAP Measures
36 Appendix: Regulation G Disclosure Explanation of Non-GAAP 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,
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