Dycom Industries, Inc. · NYSE:DY
Dycom Industries — Investor Presentation (March 2017)
38 slides from Dycom Industries's investor presentation, Mar 16, 2017
Slide 1: Investor Presentation March 2017
Investor Presentation March 2017 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: Dycom Overview
3 Leading supplier of specialty contracting services to telecommunication providers Nationwide footprint Operates in all 50 states, Washington, D.C. and in Canada Over 40 operating subsidiaries Over 13,000 employees Strong revenue base and customer relationships Contract revenues of $701.1 m
Slide 4: Telecommunication Industry Overview
4 0% 10% 20% 30% 40% 50% 60% 70% 80% Pe rc en ta ge o f fi b re c o n n ec ti o n s i n t o ta l b ro ad b an d su b sc ri p ti o n s, O ECD. O rg - J u n e 2 0 1 6 Telecommunications networks fundamental to economic progress Fiber is the foundation globally for wireline and wireless networks Consum
Slide 5: Massive investment cycle in early stages of fiber passings
5 30 million 0 50 100 150 200 250 2016 Estimate of Homes Passed Homes Available U. S. H o m es w it h F ib er P as si n gs (a ) (I n M ill io n s) Massive investment cycle in early stages - total U.S. homes passed with fiber below 20% (a) Potential of 124.6 million U.S. households (Statista-2015) wi
Slide 6: North America IP Traffic vs. GDP Growth
6 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 (10)% (8)% (6)% (4)% (2)% 0% 2% 4% 6% 8% 10% 2000 2001 2003 2005 2007 2008 2010 2012 2014 2015 2017 N o rt h A m e ri ca IP T ra ff ic (P e ta b yt e s p e r M o n th ) Q u ar te rl y G D P C h an ge Estimates Strong Secular Trend “IP traffic in No
Slide 7: Industry drivers
7 Industry drivers Firm and strengthening end market opportunities Telephone companies deploying FTTX to enable video offerings and 1 gigabit connections Cable operators continuing to deploy fiber to small and medium businesses with overall cable capital expenditures, new build opportunities, an
Slide 8: Key Driver: FTTx Deployments
8 0 2 4 6 8 10 12 Q2-16 2017 Estimate 2018 Estimate 2019 Estimate A d d re ss ab le B ro ad b an d U n it s >100 M p b s Key Driver: FTTx Deployments “Complementary to the 5G strategy is one way to get really, really high speeds into the homes and quality service but it's also a way to use it for ba
Slide 9: Key Driver: Cable business services growth
9 “Well, business services, let's put in perspective, is about a $5.5 billion business. We think that within the small and medium space it is a $20 billion to $25 billion opportunity within our footprint. In the small business segment it is about 70% of our revenue, 60% of our growth. We think we ha
Slide 10: Key Driver: Wireless Network Upgrades
10 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 20 Es ti m at es 20 25 Es ti m at es U S C e ll C it ie s Key Driver: Wireless Network Upgrades “And again, as you co
Slide 11: Key Driver: Connect America Fund
11 Key Driver: Connect America Fund “On the legacy side, let's talk about the CAF-II. We will have a 170,000 homes passed by the end of this year. And the CAF-II program runs all the way to 2020. And there's milestones that we have committed to with the regulators to achieve every year as far as how
Slide 12: Intensely Focused on Telecommunications Market
12 Intensely Focused on Telecommunications Market Contract revenues of $701.1 million for Q2-17 Services Crucial to Customers’ Success Electric and Gas Utilities and Other Underground Facility Locating Telecommunications Dycom is well-positioned to benefit from future growth opportunities Outside
Slide 13: Local Credibility, National Capability
13 Local Credibility, National Capability Dycom headquarters Primary locations Subsidiaries Dycom’s Nationwide Presence
Slide 14: Focused on High Value Profitable Growth
14 Focused on High Value Profitable Growth Anticipate emerging technology trends that drive capital spending Deliberately target high quality, long-term industry leaders which generate the vast majority of the industry’s profitable opportunities Selectively acquire businesses that complement o
Slide 15: Well Established Customers
15 Well Established Customers Top Customers Dycom has established relationships with: Telephone companies Wireless carriers Cable television multiple system operators Electric utilities and others Customer Revenue Breakdown Q2-17 Blue-chip, investment grade customers comprise a substantial p
Slide 16: Durable Customer Relationships
16 Durable Customer Relationships Revenues ($ in millions) Note: For comparison purposes, revenues from Charter Communications, Inc., Time Warner Cable Inc., and Bright House Networks, LLC have been combined for periods prior to their May 2016 merger. - $100 $200 $300 $400 $500 $600 $700 FY-07 FY-08
Slide 17: Anchored by Long-Term Agreements
17 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 18: 10 Years of Robust Cash Flow Generation
18 Cash Flow from Operations $1,161 Other Cash Flow $662 Cap-Ex, net $773 Business Acquisitions $632 Share Repurchases $417 Sources of Cash Uses of Cash 10 Years of Robust Cash Flow Generation Sources and Uses of Cash ($ in millions) Notes: Amounts represent cumulative cash flow for fiscal 2007 – Q2
Slide 19: Industry Themes
19 Industry Themes Industry increasing network bandwidth dramatically Major industry participants deploying significant wireline networks Networks provisioning 1 gigabit speeds; multi-gigabit speeds planned by some industry participants Industry developments have produced opportunities which
Slide 20: Financial Update
Financial Update Financial Update
Slide 21: Financial Overview
21 Strong operating results Contract revenues of $701.1 million in Q2-17 compared to $559.5 million in Q2-16, organic growth of 22.9%* Non-GAAP Adjusted EBITDA of $86.2 million, or 12.3% of revenues in Q2-17, compared to $66.4 million, or 11.9% in Q2-16 Non-GAAP Adjusted Diluted EPS increase
Slide 22: Strong and sustained financial performance
22 $1,201.1 $1,608.6 $1,811.6 $2,022.3 $2,672.5 FY2012 FY2013 FY2014 FY2015 FY2016 13.4% 18.2% 21.9% 19.4% 28.7% 20.0% 18.0% 22.9% 0% 5% 10% 15% 20% 25% 30% Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 $492 $578 $659 $559 $665 $789 $799 $701 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Contrac
Slide 23: Earnings
23 $63.0 $88.5 $105.7 $66.4 $91.9 $126.0 $129.2 $86.2 12.8% 15.3% 16.0% 11.9% 13.8% 16.0% 16.2% 12.3% Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Non-GAAP Adjusted EBITDA Non-GAAP Adjusted EBITDA as a % of Revenue Quarterly Non-GAAP Adjusted EBITDA $0.58 $0.97 $1.24 $0.54 $1.08 $1.64 $1.67 $0.82
Slide 24: Liquidity and Cash Flow
24 Strong balance sheet and robust liquidity Liquidity and Cash Flow Financial tables - $ in millions No revolver borrowings outstanding at the end of Q2-17 Entered into an incremental term loan of $35.0 million under our Senior Credit Facility during Q2-17 Liquidity exceeds $421.9 million at
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 22.9 % in Q2-17 and 22.7% in fiscal 2016, reflecting growth from several key customers Pu
Slide 26: Questions and Answers
26 Financial Update Questions and Answers
Slide 27: Selected Information from Q2-17 Conference Call Materials
27 Financial Update Selected Information from Q2-17 Dycom Results Conference Call Materials The following slides 28-32 were used on March 1, 2017 in connection with the Company’s conference call to discuss fiscal 2017 second quarter results and are included for your convenience. Reference is made to
Slide 28: Q3-2017 Outlook and Commentary
28 Q3-2016 Included for comparison Q3-2017 Outlook and Commentary Contract Revenues $ 664.6 $715 - $745 Broad range of demand from several large customers Robust 1 gigabit deployments, fiber deep cable capacity projects accelerating, CAF II underway and core market share growth Total Q3-17 rev
Slide 29: Looking Ahead to Q4-2017
29 Looking Ahead to Q4-2017 Q4-2016 Included for comparison Q4-2017 Outlook and Commentary # of Weeks in Fiscal Quarter 14 Weeks 13 Weeks 13 weeks in Q4-17 compared to 14 weeks in Q4-16 as a result of 52/53 week fiscal year Contract Revenues $ 789.2 (GAAP) $ 727.6 (Non-GAAP organic revenue) (See “
Slide 30: Explanation of Non-GAAP Measures
30 Explanation of Non-GAAP Measures Appendix: Regulation G Disclosure 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,
Slide 31: Reconciliation: Outlook Diluted Earnings per Share
31 Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures Outlook – Diluted Earnings per Common Share Unaudited (a) Guidance for diluted earnings per common share and Non-GAAP Adjusted Diluted Earnings per Common Share for the three months ending April 29, 2017 were comp
Slide 32: Non-GAAP Organic Contract Revenue
32 (a) Q4-16 included an incremental week required by our 52/53 week fiscal calendar. The Q4-16 Non-GAAP adjustment is calculated as (i) contract revenues less, (ii) revenues from acquired businesses in each applicable period, (iii) divided by 14 weeks. Reconciliation of Non-GAAP Financial Measures
Slide 33: Non-GAAP Organic Contract Revenue Reconciliation
33 Appendix: Regulation G Disclosure Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures Non-GAAP Organic Contract Revenue Unaudited ($ in millions) (a) The fourth quarter of fiscal 2016 contained 14 weeks as a result of our 52/53 week fiscal year as compared to 13 we
Slide 34: Contract Revenues and Organic Growth Reconciliation
34 1 Non-GAAP adjustments in FY 2016 reflect adjustments in Q4-16 resulting from the Company’s 52/53 week fiscal year of $52.9 million. The Q4-16 Non-GAAP adjustments reflect the impact of the additional week in Q4-16 and are calculated by (i) contract revenues less acquired revenue, divided by (ii)
Slide 35: Calculation of Cumulative Cash Flows
35 Notes: Amounts may not add due to rounding. 1 Other financing activities represents net cash provided by (used in) financing activities less repurchases of common stock. 2 Other investing activities represents net cash provided by (used in) investing activities less capital expenditure, net of pr
Slide 36: Non-GAAP Adjusted Net Income and Diluted EPS
36 Notes: Amounts above may not add due to rounding. Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures Non-GAAP Adjusted Net Income, Non-GAAP Adjusted Diluted EPS, and Non-GAAP Adjusted Interest Expense Unaudited ($ in 000's, except per share amounts) Use of Non-GAA
Slide 37: Non-GAAP Adjusted EBITDA
37 Appendix: Regulation G Disclosure Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures Non-GAAP Adjusted EBITDA Unaudited ($ in 000's, except per share amounts) Notes: Amounts above may not add due to rounding. Use of Non-GAAP Financial Measures: The Company reports
Slide 38: Investor Presentation March 2017
Investor Presentation March 2017
Dycom Industries — Investor Presentation (March 2017) on 6ix