Dycom Industries, Inc. · NYSE:DY
Dycom Industries — Investor Presentation (September 2016)
38 slides from Dycom Industries's investor presentation, Sep 8, 2016
Slide 1: Dycom Industries, Inc. Investor Presentation September 2016
DYCOM INDUSTRIES, INC. INVESTOR PRESENTATION September 2016 Exhibit 99.1
Slide 2: Forward-Looking Statements and Non-GAAP Information
2 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, plans an
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 12,750 employees Strong revenue base and customer relationships Contract revenues of $789.2 m
Slide 4: Telecommunication Industry Overview
4 Telecommunications networks fundamental to economic progress Fiber is the foundation globally for wireline and wireless networks Consumer demand for bandwidth driving fiber deployments by telecom providers With less than 15% total broadband connections provisioned by fiber in U.S., significant opp
Slide 5: Telecommunication Industry Overview
5 Telecommunication Industry Overview “Consistent with our plan for the year, Capex spending this quarter increased year-over-year as we continue to expand both our Broadband fibre footprint as well as our Internet and Wireless network capacity to support customer and usage growth.” Glen LeBlanc, Be
Slide 6: Massive investment cycle in early stages
6 Massive investment cycle in early stages - total U.S. homes passed with fiber less than 15% Telecommunication Industry Overview (a) Potential of 124.6 million U.S. households (Statista-2015) with estimate that each home will be passed by two separate telecom providers. Source: Fiber to the Home Co
Slide 7: Strong Secular Trend
7 Strong Secular Trend “IP traffic in North America will reach 59.1 EB (exabytes) per month by 2020, growing at a CAGR of 19 percent.” Cisco VNI: Forecast and Methodology, 2015–2020 (June 2016) “In North America, 88% of fixed broadband connections will be faster than 10 Mbps in 2020, up from 64% tod
Slide 8: Industry drivers
8 Industry drivers Firm and strengthening end market drivers 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, and capa
Slide 9: Key Driver: FTTx Deployments
9 Key Driver: FTTx Deployments “The next phase of driving fiber into our network is our GigaPower deployment. Over the next few years we expect to reach at least 12.5 million customer locations with our gigabit broadband service. We now have more than 2.2 million fiber-to-the-home customer locations
Slide 10: Key Driver: Fiber to Businesses
10 Key Driver: Fiber to Businesses 1 Trailing Twelve Month Period ended June 30, 2016 2 Calculated as the combination of the estimated addressable market given by Charter ($20Bn) and Time Warner Cable ($10Bn) in their respective earnings transcripts prior to their May 2016 merger. “[...] business se
Slide 11: Key Driver: Wireless Network Upgrades
11 Key Driver: Wireless Network Upgrades “[.…] going back and taking a parochial view of a fiber build, the enterprise, you might look at just the enterprise need or you might just look at a wholesale need or just a wireless need. And our desire to build a lot more small cells, which is the right ca
Slide 12: Key Driver: Connect America Fund
12 Key Driver: Connect America Fund “Our CAF-II build remains underway and we are on track to bring higher-speed capabilities to an additional 750,000 households over the coming years. Although the minimum speed in CAF-II markets will be 10 megabits, many of these households will be served with high
Slide 13: Intensely Focused on Telecommunications Market
13 Intensely Focused on Telecommunications Market Outside Plant & Equipment Installation Premise Equipment Installation Wireless Engineering Underground Facility Locating Contract revenues of $2.673 billion for Fiscal 2016 Services Crucial to Customers’ Success Electric and Gas Utilities a
Slide 14: Local Credibility, National Capability
14 Local Credibility, National Capability Dycom headquarters Primary locations Subsidiaries Dycom’s Nationwide Presence
Slide 15: Focused on High Value Profitable Growth
15 Focused on High Value Profitable Growth Anticipate emerging technology trends that drive capital spending Deliberately target high quality, long-term industry leaders which generate the vast majority of the industry’s profitable opportunities Selectively acquire businesses that complement o
Slide 16: Well Established Customers
16 Well Established Customers Top Customers Dycom has established relationships with: Telephone companies Wireless carriers Cable television multiple system operators Electric utilities and others Customer Revenue Breakdown Q4-16 Blue-chip, investment grade customers comprise a substantial p
Slide 17: Durable Customer Relationships
17 Durable Customer Relationships Revenues ($ 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.
Slide 18: Anchored by Long-Term Agreements
18 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 19: Years of Robust Cash Flow Generation
19 10 Years of Robust Cash Flow Generation Sources and Uses of Cash ($ in millions) Notes: Amounts represent cumulative cash flow for fiscal 2007 – fiscal 2016; See “Regulation G Disclosure” slides as set forth in the Appendix for a summary of amounts. Amounts may not add due to rounding. 1 Other ca
Slide 20: Early stages of a massive investment cycle
20 Industry increasing network bandwidth dramatically Major industry participants deploying significant wireline networks Newly deployed networks provisioning 1 gigabit speeds; speeds beyond 1 gigabit envisioned Industry developments have produced opportunities which in aggregate are without p
Slide 21: Financial Update
VDYCOM Financial Update
Slide 22: Financial Overview
22 Strong operating results Contract revenues of $789.2 million in Q4-16 compared to $578.5 million in Q4-15, organic growth of 20.0% * Non-GAAP Adjusted EBITDA of $126.0 million, or 16.0% of revenues in Q4-16, compared to $88.5 million, or 15.3% in Q4-15 Non-GAAP Adjusted Diluted EPS increa
Slide 23: Contract Revenue Trend
23 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 31-37 for a reconciliation of GAAP to Non-GAAP financial measures. Strong and su
Slide 24: Earnings
24 Earnings Non-GAAP Adjusted EBITDA Quarterly Non-GAAP Adjusted EBITDA Non-GAAP Adjusted Diluted EPS Financial charts - $ in millions, except earnings per share amounts See “Regulation G Disclosure” slides 31-37 for a reconciliation of GAAP to Non-GAAP financial measures. Quarterly Non-GAAP Adjuste
Slide 25: Strong balance sheet and robust liquidity
25 Strong balance sheet and robust liquidity Liquidity and Cash Flow Financial tables - $ in millions Liquidity exceeds $426 million at the end of Q4-16 consisting of availability from our Credit Facility and cash on hand During Q4-16, reduced borrowings on credit agreement by $17.8 million to $
Slide 26: Capital Allocated to Maximize Returns
26 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 20.0 % in Q4-16 and 22.7% in fiscal 2016, reflecting growth from several key customers Pu
Slide 27: Questions and Answers
VDYCOM Questions and Answers
Slide 28: Selected Information from Q4-16 Conference Call Materials
Selected Information from Q4-16 Dycom Results Conference Call Materials The following slides 29-31 were used on Aug 24, 2016 in connection with the Company’s conference call to discuss fiscal 2016 fourth quarter results and are included for your convenience. Reference is made to slide 2 titled “Forw
Slide 29: Q1-2017 Outlook and Commentary
29 Q1-2016 Included for comparison Q1-2017 Outlook and Commentary Contract Revenues $ 659.3 $780 - $810 Broad range of demand from several large customers Robust 1 gigabit deployments, cable capacity projects and CAF II accelerating, core market share growth Total revenue expected to include a
Slide 30: Looking Ahead to Q2-2017
30 Looking Ahead to Q2-2017 Q2-2016 Included for comparison Q2-2017 Outlook and Commentary Contract Revenues $ 559.5 Total revenue growth % in high teens or slightly better as a % of revenue compared to Q2-16 Expectation of normal winter weather patterns Broad range of demand from several large
Slide 31: Reconciliation of Non-GAAP Measures: Outlook Diluted EPS
31 Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures Outlook – 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 accounting principles (GAAP). In our qu
Slide 32: Appendix: Regulation G Disclosure
32 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 33: Contract Revenues and Organic Growth Reconciliation
33 1 Non-GAAP adjustments in FY 2016 reflect adjustments in Q4-16 resulting from the Company’s 52/53 week fiscal year of $52.9 million. The Q4-16 Non-GAAP adjustments reflect the impact of the additional week in Q4-16 and are calculated by (i) contract revenues less acquired revenue, divided by (ii)
Slide 34: Calculation of Cumulative Cash Flows Fiscal 2007-2016
34 Notes: Amounts may not add due to rounding. 1 Other financing activities represents net cash provided by (used in) financing activities less repurchases of common stock. 2 Other investing activities represents net cash provided by (used in) investing activities less capital expenditure, net of pr
Slide 35: Non-GAAP Adjusted Net Income and Diluted EPS
35 Notes: Amounts above may not add due to rounding. Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures Non-GAAP Adjusted Net Income, Non-GAAP Adjusted Diluted EPS, and Non-GAAP Adjusted Interest Expense Unaudited ($ in 000's, except per share amounts) Use of Non-GAA
Slide 36: Non-GAAP Adjusted EBITDA and Credit Metrics
36 Appendix: Regulation G Disclosure Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures Non-GAAP Adjusted EBITDA and certain Credit Metrics Unaudited ($ in 000's, except per share amounts) Use of Non-GAAP Financial Measures: The Company reports its financial results
Slide 37: Explanation of Non-GAAP Measures
37 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, it may use or discuss Non-GAAP fin
Slide 38: Dycom Industries, Inc.
DYCOM INDUSTRIES, INC. INVESTOR PRESENTATION September 2016
Dycom Industries — Investor Presentation (September 2016) on 6ix