Dycom Industries, Inc. · NYSE:DY
Dycom Industries — Investor Presentation (December 2013)
35 slides from Dycom Industries's investor presentation, Dec 10, 2013
Slide 1: Investor Presentation December 2013
Investor Presentation December 2013 Exhibit 99.1
Slide 2: Forward-Looking Statements and Non-GAAP Information
2 Fiscal 2014 first quarter results are unaudited. This presentation contains “forward-looking statements” which are statements relating to future events, future financial performance, strategies, expectations, and the competitive environment. Other than statements of historical facts, all statement
Slide 3: Positioned for strong equity returns
3 Positioned for strong equity returns A leading supplier of specialty contracting services to telecommunication providers nationwide Telecommunications networks fundamental to economic progress Firm end market opportunities Wireless carriers upgrading from 3G to 4G technologies Telephone
Slide 4: Nationwide Footprint and Significant Resources
4 Nationwide Footprint and Significant Resources (*) Includes cash and equivalents of $14.4 million and availability on Senior Credit Facility of $142.3 million See “Regulation G Disclosure” slides 29-34 for a reconciliation of GAAP to Non-GAAP financial measures. Headquartered in Palm Beach Garde
Slide 5: Services Crucial to Customer Success
5 Services Crucial to Customer Success Engineering Underground Facility Locating Outside Plant & Equipment Installation Premise Equipment Installation Wireless Services
Slide 6: Intensely Focused on Telecommunications Market
6 Intensely Focused on Telecommunications Market Contract Revenues $512.7 million Quarter Ended October 26, 2013 87.8% 7.1%5.1% Telecommunications Underground Facility Locating Electric and Gas Utilities and Other Construction and Maintenance
Slide 7: Industry Drivers: Strong Secular Trend
7 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 -10.0% -8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% GDP Traffic Industry Drivers Strong Secular Trend Sources: U.S. Telecom, The Broadband Association Cisco Visual Networking Index U.S. National Bureau of Economic Analysis N o rth Am eri
Slide 8: Key Driver: Wireless Network Upgrades
8 Key Driver: Wireless Network Upgrades Number of US cell sites “Our consistent investment in Wireless is the foundation of our success and drives our leadership in network quality, reliability and the overall customer experience. We will continue to build on our network advantage in 4G LTE by deplo
Slide 9: Key Driver: FTTx Deployments
9 Key Driver: FTTx Deployments Cumulative Subscribers “And it is going to be a dogfight between us and cable for the next 20 years; I don't see that changing. They will invest and they will step up. We will invest, it will go back and forth. But I feel really good that we will -- we're doing very we
Slide 10: Key Driver: Fiber to Businesses
10 $9.5B $20.0B $30.0B Key Driver: Fiber to Businesses Business Services Revenue and Addressable Business Services Market “The medium side. This is an enormous opportunity for our Company. We have invested about $2.5 billion over the last five years in building the business services business. And to
Slide 11: Key Driver: Wireless Backhaul
11 0X 10X 20X 30X 40X 50X 2009 2010 2011 2012 2013E 2014E Mobile Data Traffic Growth Relative to 2009 Yankee Group Coda Research Cisco Systems, Inc. Average Key Driver: Wireless Backhaul Mobile Data Traffic Growth Relative to 2009 “… a third key strategic initiative is investing in fiber builds to a
Slide 12: Local Credibility, National Capability
12 Local Credibility, National Capability Dycom Headquarters Subsidiary Headquarters Dycom’s Nationwide Presence Subsidiaries Acquired in 2013
Slide 13: Focused on High Value Profitable Growth
13 Focused on High Value Profitable Growth Anticipate emerging technology trends which drive capital spending Deliberately target high quality, long-term industry leaders which generate the vast majority of the industry’s profitable opportunities Selectively acquire businesses which complement
Slide 14: Well Established Customers
14 17.5% 15.5% 10.5% 8.4%5.3% 5.0% 4.5% 2.0% 1.5% 29.8% Well Established Customers Blue-chip, predominantly investment grade clients comprise the vast majority of revenue Q1-14 Customer Revenue Breakdown Comcast AT&T CenturyLink Verizon Windstream Charter Ericsson Time Warner Cable Other Frontier
Slide 15: Durable Customer Relationships
15 Durable Customer Relationships Revenues ($ in millions) FY 2013 reflects the results of the businesses acquired in fiscal 2013, including the operations of the telecommunications infrastructure services subsidiaries acquired by Dycom on December 3, 2012 from Quanta Services, Inc. For comparison p
Slide 16: Anchored by Long-Term Agreements
16 64.1% 14.0% 21.9% Anchored by Long-Term Agreements Revenues by Contract Type Quarter Ended October 26, 2013 Master Service Agreements Long-term contracts Short-term contracts Master Service Agreements (MSA’s) Multi-year, multi-million dollar arrangements covering thousands of individual work
Slide 17: Robust Cash Flow
17 Robust Cash Flow Capital Investments FY2004 – FY 2013 ($ in millions) $923 million Cash flow from operations $547 million Provided by borrowings, other financing and investing activities and beginning cash on hand Cumulative Cash Flows Fiscal 2004 – Fiscal 2013 $1.470 Billion for Investment Note:
Slide 18: Financial Update
oPpyrYcom Financial Update
Slide 19: Financial Overview
19 Financial Overview Organic revenue growth of 10.0% during Q1-2014 Backlog of $1.996 billion at October 26, 2013 Solid margins and earnings Strong balance sheet, cash flow and liquidity Capital structure designed to produce strong equity returns
Slide 20: Contract Revenue Growth
20 19.2% 17.3% 9.0% 2.4% 3.5% 6.2% 7.5% 10.0% 10.1% 8.2% 1.9% -2.4% 4.0% 10.7% 12.6% 15.8% -10% 0% 10% 20% 30% Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Organic Growth % Organic Growth % - Excluding stimulus revenue $1,107 $989 $1,036 $1,201 $1,271 $338 $- $200 $400 $600 $800 $1,000 $1,200 $1,
Slide 21: Earnings Growth
21 $117.2 $85.8 $110.2 $135.5 $179.8 10.6% 8.7% 10.6% 11.3% 11.2% 0% 5% 10% 15% 20% $0 $30 $60 $90 $120 $150 $180 FY2009 FY2010 FY2011 FY2012 FY2013 EBI TD A-A dju ste d as a % of Re ven ue An nu al E BIT DA EBITDA - Adjusted (Non-GAAP) (a) EBITDA - Adjusted as a % of Revenue Net Income - Non-GAAP Q
Slide 22: Cash Flows and Liquidity
22 Cash Flows and Liquidity Cash Flow from Operations and Cap-ex, net ($ in millions) $ 14.4 $ 18.6 $ 83.0 $ 49.0 120.3 121.9 281.0 281.1 $ 484.3 $ 452.0 $ 49.7 $ 46.7 $ 142.3 $ 179.3 (*) Includes debt premium of $3.5 million and $3.6 million at Q1-14 and Q4-13, respectively Letters of Credit outsta
Slide 23: Trend Schedule - Selected Financial Information
23 Trend Schedule - Selected Financial Information (Unaudited) Organic Revenue and Growth - baseline information for comparisons of FY 2014 to FY 2013 ($ in millions) Organic Revenue Calculations: For comparisons of FY 2014 to FY 2013 Q1-14 Organic Growth % - Non-GAAP Q1-14 Q1-13 Q2-13 Q3-13 (c) Q4-
Slide 24: Capital Allocated to Maximize Shareholder Returns
24 Capital Allocated to Maximize Shareholder Returns Organic growth, solid free cash flow and confidence in industry outlook promotes capital allocation strategy to further expand shareholder returns Fiscal 2013 acquisitions further strengthen our customer base, geographic scope, and technical s
Slide 25: Selected Information from Q1-14 Conference Call Materials
25 Selected Information from Q1-14 Dycom Results Conference Call Materials The following slides 26-27 were used on November 26, 2013 in connection with the Company’s conference call to discuss fiscal 2014 first quarter results and are included here for your convenience. Reference is made to slide 2
Slide 26: Q2-2014 Outlook
26 Q2-2014 Outlook Contract Revenues *Non-GAAP for Q2-13 (excluding Acquired Revenues of $75.9 million and storm revenues of $16.7) Organic Revenue $276.7* Total Revenue $369.3 $400.0 - $420.0 (including $110.0 - $120.0 from acquired subsidiaries) Mid to high single digit organic growth Gross Marg
Slide 27: Looking Ahead to Q3-14
27 Looking Ahead to Q3-14 Looking Ahead Commentary Prior Period for 2014 Comparisons Q3-13 ($ in millions) Contract Revenues Mid single digit total revenue growth (including organic revenue growth which is low to mid single digit) resulting from: * services to wireless carriers which remain robust
Slide 28: Supplemental Schedules Regulation G Disclosures
Supplemental Schedules Regulation G Disclosures
Slide 29: Organic Revenue Non-GAAP Definitions
29 (a) Organic Revenue – Non-GAAP are revenues from businesses that are included for the full period in both the current and prior year quarter presented, excluding storm restoration services, if any. Organic Revenue growth is calculated as the percentage increase in revenues over those of the compa
Slide 30: Q1-14 GAAP to Non-GAAP Reconciliation
30 Q1-14 Three Months Ended October 26, 2013 GAAP GAAP Reconciling Items Non-GAAP GAAP Reconciling Items Non-GAAP Contract revenues 512,720$ 323,286$ -$ 323,286$ 369,326$ -$ 369,326$ Cost of earned revenues, excluding depreciation and amortization 410,119 257,066 - 257,066 301,516 - 301,516 General
Slide 31: Calculation of Cumulative Cash Flows Fiscal 2004 through Fiscal 2013
31 Amounts may not add due to rounding. Appendix: Regulation G Disclosure Calculation of Cumulative Cash Flows Fiscal 2004 through Fiscal 2013 ($ in millions) Net Cash Provided by Operating Activities Capital Expenditures, Net of Proceeds from Asset Sales Cash Paid for Acquisitions, net of cash acqu
Slide 32: Reconciliation of Net Income to Adjusted EBITDA
32 Q1-14 Q1-13 Q2-13 Q3-13 Q4-13 Three Months Three Months Three Months Three Months Three Months Ended Ended Ended Ended Ended October 26, October 27, January 26, April 27, July 27, 2013 2012 2013 2013 2013 Reconciliation of Net income to Adjusted EBITDA (Non-GAAP): Net income $ 18,660 $ 11,861 $ 1
Slide 33: Organic Revenue Non-GAAP Definitions
33 (a) Organic Revenue – Non-GAAP are revenues from businesses that are included for the full period in both the current and prior year presented, excluding storm restoration services, if any. Organic Revenue growth is calculated as the percentage increase in revenues over those of the comparable pr
Slide 34: Reconciliation of GAAP to Non-GAAP Measures
34 Appendix: Regulation G Disclosure Selected Information- Reconciliation of GAAP to Non-GAAP Measures ($ in million's, except per share amounts) Amounts may not add due to rounding. The above table presents a reconciliation of the Non-GAAP financial measure of Adjusted EBITDA for the periods specif
Slide 35: Investor Presentation December 2013
Investor Presentation December 2013
Dycom Industries — Investor Presentation (December 2013) on 6ix