Dycom Industries, Inc. · NYSE:DY
Dycom Industries — Investor Presentation (May 2017)
37 slides from Dycom Industries's investor presentation, May 31, 2017
Slide 1: Investor Presentation May/June 2017
Investor Presentation May/June 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 14,000 employees Strong revenue base and customer relationships Contract revenues of $786.3 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 - U.S. homes passed with fiber
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 40,000 (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 raf fi c (Pe 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
Slide 7: Industry drivers
7 Industry drivers Firm and strengthening end market opportunities Telephone companies deploying FTTH to enable video offerings and 1 gigabit connections Cable operators continuing to deploy fiber to small and medium businesses and enterprises with increasing urgency. Overall, cable capital expe
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 “Broadband had a very strong quarter with 115,000 subscribers added. Our moves to simplify pricing are paying off and our fiber deployment is making i
Slide 9: Cable business services opportunity
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 the fact that so
Slide 11: Intensely Focused on Telecommunications Market
11 Intensely Focused on Telecommunications Market Contract revenues of $786.3 million for Q3-17 Services Crucial to Customers’ Success Electric and Gas Utilities and Other Underground Facility Locating Telecommunications Dycom is well-positioned to benefit from future growth opportunities Outside
Slide 12: Local Credibility, National Capability
12 Local Credibility, National Capability Dycom headquarters Primary locations Subsidiaries Dycom’s Nationwide Presence
Slide 13: Focused on High Value Profitable Growth
13 Focused on High Value Profitable Growth Anticipate emerging technology trends that drive capital spending Deliberately target high quality, long-term industry leaders which generate the vast majority of the industry’s profitable opportunities Selectively acquire businesses that complement o
Slide 14: Well Established Customers
14 Well Established Customers Top Customers Dycom has established relationships with: Telephone companies Wireless carriers Cable television multiple system operators Electric utilities and others Customer Revenue Breakdown Q3-17 Blue-chip, investment grade customers comprise a substantial p
Slide 15: Durable Customer Relationships
15 Durable Customer Relationships Revenues ($ 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 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 Cash Flow from Operations $1,203 Other Cash Flow $736 Cap-Ex, net $826 Business Acquisitions $659 Share Repurchases $455 Sources of Cash Uses of Cash 10 Years of Robust Cash Flow Generation Sources and Uses of Cash ($ in millions) Notes: Amounts represent cumulative cash flow for fiscal 2007 – Q3
Slide 18: Industry Themes
18 Industry Themes Industry increasing network bandwidth dramatically Major industry participants deploying significant 1 gigabit wireline networks Emerging wireless technologies require incremental wireline deployments o A complementary wireline investment cycle is fundamental to applications
Slide 19: Financial Update
19 Financial Update
Slide 20: Financial Overview
20 Strong operating results Contract revenues of $786.3 million in Q3-17 compared to $664.6 million in Q3-16, organic growth of 14.9%* Non-GAAP Adjusted EBITDA of $108.2 million, or 13.8% of revenues in Q3-17, compared to $91.9 million, or 13.8% in Q3-16 Non-GAAP Adjusted Diluted EPS increas
Slide 21: Contract Revenue Trend
21 18.2% 21.9% 19.4% 28.7% 20.0% 18.0% 22.9% 14.9% 0% 5% 10% 15% 20% 25% 30% Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 $578 $659 $559 $665 $789 $799 $701 $786 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 $1,201.1 $1,608.6 $1,811.6 $2,022.3 $2,672.5 FY2012 FY2013 FY2014 FY2015 FY2016 Contrac
Slide 22: Earnings
22 $88.5 $105.7 $66.4 $91.9 $126.0 $129.2 $86.2 $108.2 15.3% 16.0% 11.9% 13.8% 16.0% 16.2% 12.3% 13.8% Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Non-GAAP Adjusted EBITDA Non-GAAP Adjusted EBITDA as a % of Revenue Quarterly Non-GAAP Adjusted EBITDA $0.97 $1.24 $0.54 $1.08 $1.64 $1.67 $0.82 $1.3
Slide 23: Liquidity and Cash Flow
23 Strong balance sheet and robust liquidity Liquidity and Cash Flow Financial tables - $ in millions Revolver borrowings of $71.0 million as of Q3-17 Liquidity exceeds $340.8 million at the end of Q3-17 consisting of availability from our Credit Facility and cash on hand Cash Flow from Operatin
Slide 24: Capital Allocated to Maximize Returns
24 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 14.9% in Q3-17 and 22.7% in fiscal 2016, reflecting growth from several key customers Pur
Slide 25: Questions and Answers
25 Questions and Answers
Slide 26: Slides used on May 24, 2017 conference call
26 The following slides 27-31 were used on May 24, 2017 in connection with the Company’s conference call to discuss fiscal 2017 third quarter results and are included for your convenience. Reference is made to slide 2 titled “Forward-Looking Statements and Non-GAAP Information” with respect to these
Slide 27: Q4-2017 Outlook
27 Q4-2017 Outlook Financial table- $ in millions, except earnings per share amounts (% as a percent of contract revenues) See “Regulation G Disclosure” slides 29-36 for a reconciliation of GAAP to Non-GAAP financial measures. “Q4-2017 Outlook” - This slide was prepared and used on May 24, 2017 in c
Slide 28: Looking Ahead to Q1-2018
28 Looking Ahead to Q1-2018 See “Regulation G Disclosure” slides 29-36 for a reconciliation of GAAP to Non-GAAP financial measures. “Looking Ahead to Q1-2018” - This slide was prepared and used on May 24, 2017 in connection with the Company’s conference call to discuss fiscal 2017 third quarter resu
Slide 29: Explanation of Non-GAAP Measures
29 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 30: Outlook – Non-GAAP Diluted Earnings per Share Reconciliation
30 Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures Outlook – Non-GAAP Diluted Earnings per Common Share for the Three Months Ending July 29, 2017 Unaudited Appendix: Regulation G Disclosure This slide was prepared and used on May 24, 2017 in connection with the Co
Slide 31: Non-GAAP Organic Contract Revenue
31 Appendix: Regulation G Disclosure (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. Q4-16 and Q1
Slide 32: Non-GAAP Organic Contract Revenue Reconciliation
32 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 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 $52.9 million. The Q4-16 Non-GAAP adjustments reflect the impact of the additional week in Q4-16 and are calculated by (i) contract revenues less acquired revenue, divided by (ii)
Slide 34: Cash flow sources and uses
34 Net Cash Provided by Operating Activities Capital Expenditures, Net of Proceeds from Asset Sales Cash Paid for Acquisitions, net of cash acquired Repurchases of Common Stock Borrowings and Other Financing Activities 1 Other Investing Activities 2 Total Other Financing and Investing Activities Q3-
Slide 35: Adjusted Net Income and Diluted EPS Reconciliation
35 Notes: Amounts above may not add due to rounding. Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures Non-GAAP Adjusted Net Income, Non-GAAP Adjusted Diluted EPS, and Non-GAAP Adjusted Interest Expense Unaudited ($ in 000's, except per share amounts) Appendix: Regu
Slide 36: Non-GAAP Adjusted EBITDA Reconciliation
36 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. Reconciliation of Net Income to Non-GAAP Adjusted EBITD
Slide 37: May/June 2017
Investor Presentation May/June 2017