Dycom Industries, Inc. · NYSE:DY
Dycom Industries — Investor Presentation (March 2018)
37 slides from Dycom Industries's investor presentation, Mar 6, 2018
Slide 1: Investor Presentation March 2018
Investor Presentation March 2018 Exhibit 99.1
Slide 2: Forward Looking Statements, Non-GAAP Financial Measures and Other Information
2 Forward Looking Statements, Non-GAAP Financial Measures and Other 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, f
Slide 3: Dycom Overview
3 Nationwide footprint Operates in all 50 states, Washington, D.C. and in Canada Over 40 operating subsidiaries and over 14,000 employees Strong revenue base, customer relationships and profitable results Contract revenues of $2.98 billion for the trailing four quarters ended January 27, 2018
Slide 4: Telecommunications 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 a low percentage of total broadband connections provisioned by fiber in U.S., significa
Slide 5: Telecommunications Industry Overview: 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 126.2 million U.S. households (Statista-2017) wi
Slide 6: Strong Secular Trend
6 Strong Secular Trend “IP traffic in North America will reach 85 EB per month by 2021, at a CAGR of 20 percent. Monthly Internet traffic in North America will generate 11 billion DVDs’ worth of traffic, or 44.7 EB per month.” “Business IP traffic will grow fastest in North America. Business IP traf
Slide 7: Industry Drivers
7 Industry Drivers Firm and strengthening end market opportunities Fiber deployments in contemplation of emerging wireless technologies have begun in many regions of the country. A significant number of new project initiations will continue to occur in the near term. Wireless construction activi
Slide 8: Key Driver: High Bandwidth Deployments
8 Key Driver: High Bandwidth Deployments “So if you look at where we are, we're going to make sure that we have capacity to keep all the networks we have running and in good shape. And once we take care of capacity, the next thing we go to is footprint. And when you look at footprint, the FirstNet i
Slide 9: Key Driver: Wireless Network Upgrades
9 Key Driver: Wireless Network Upgrades “Mobile connectivity has become essential for many network users. Most people already consider mobile voice service a necessity, and mobile voice, data, and video services are fast becoming an integral part of consumers and business users’ lives. Used extensiv
Slide 10: Key Driver: Fiber to Businesses
10 “In business services, we're still in the early stages of bringing our superior products to the large addressable markets in midsized and enterprise customers. Brian Roberts, Chairman & CEO, Comcast – January 2018 Key Driver: Fiber to Businesses 1 Calendar 2017 2 Calculated as the combination of
Slide 11: Intensely Focused on Telecommunications Market
11 Intensely Focused on Telecommunications Market Contract revenues of $655.1 million for Q2-18 Services Crucial to Customers’ Success Electric and Gas Utilities and Other Underground Facility Locating Telecommunications Dycom is well-positioned to benefit from future growth opportunities Outside
Slide 12: Local Credibility, National Capability
12 Local Credibility, National Capability Subsidiaries Dycom’s Nationwide Presence
Slide 13: Focused on High Value Profitable Growth
13 Focused on High Value Profitable Growth Anticipate emerging technology trends that drive capital spending Deliberately target high quality, long-term industry leaders which generate the vast majority of the industry’s profitable opportunities Selectively acquire businesses that complement o
Slide 14: Well Established Customers
14 Well Established Customers Top Customers Dycom has established relationships with: Telephone companies Wireless carriers Cable multiple system operators Electric utilities and others Customer Revenue Breakdown Q2-18 Blue-chip, investment grade customers comprise a substantial portion of r
Slide 15: Durable Customer Relationships
15 Durable Customer Relationships Revenues ($ in millions) Notes: 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. Revenues from Verizon Communications Inc. and X
Slide 16: Anchored by Long-Term Agreements
16 Anchored by Long-Term Agreements Dycom is party to hundreds of MSA’s and other agreements 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 arrangements
Slide 17: Industry Themes
17 Industry Themes Industry increasing network bandwidth dramatically Major industry participants deploying significant 1 gigabit wireline networks Emerging wireless technologies, in and of themselves, are driving significant wireline deployments o A complementary wireline investment cycle is
Slide 18: Sources and Uses of Cash
18 Sources and Uses of Cash ($ in millions) 10+ Years of Robust Cash Flow Generation Notes: Amounts represent cumulative cash flow for fiscal 2008 – Jan. 2018; See “Regulation G Disclosure” slides as set forth in the Appendix for a summary of amounts. Amounts may not add due to rounding. Other cash
Slide 19: Financial Update
19 Financial Update
Slide 20: Financial Update Highlights
20 Strengthening market opportunities despite near-term revenue declines Contract revenues of $655.1 million in Q2-18, included $19.6 million in revenue from storm restoration services Q2-18 Non-GAAP Adjusted EBITDA of $59.6 million, or 9.1% of revenue, compared to $86.2 million in Q2-17, or 1
Slide 21: Contract Revenue Trend
21 Contract Revenue Trend Annual Organic Revenue Trend Quarterly Contract Revenues Quarterly Organic Revenue Trend Annual Growth in Contract Revenues Financial charts - $ in millions *Organic % growth adjusted for additional week in Q4-16
Slide 22: Earnings
22 Non-GAAP Adjusted Diluted EPS Non-GAAP Adjusted EBITDA Quarterly Non-GAAP Adjusted EBITDA Quarterly Non-GAAP Adjusted Diluted EPS Financial charts - $ in millions, except earnings per share amounts Earnings See “Regulation G Disclosure” slides 29-36 for a reconciliation of GAAP to Non-GAAP financ
Slide 23: Strong balance sheet and robust liquidity
23 Strong balance sheet and robust liquidity Liquidity and Cash Flow Financial tables - $ in millions Balance sheet reflects the strength of our business Liquidity of $485.4 million at the end of Q2-18 consisting of availability under our Credit Facility and cash on hand Cash Flow from Operating
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 Pursue complementary acquisitions Fiscal 2013 - 2017 acquisitions further strengthened Dycom’s customer base,
Slide 25: Questions and Answers
CDYCOM THE PEOPLE CONNECTING AMERICA‘ Questions and Answers
Slide 26: Selected Information from Q2-18 Dycom Results Conference Call Materials
Selected Information from Q2-18 Dycom Results Conference Call Materials The following slides 27 & 28 were used on February 28, 2018 in connection with the Company’s conference call for its fiscal 2018 second quarter results and are included for your convenience. Reference is made to slide 2 titled “
Slide 27: Fiscal 2019 Outlook
27 See “Regulation G Disclosure” slides 29-36 for a reconciliation of GAAP to Non-GAAP financial measures. “Fiscal 2019 Outlook” - This slide was used on February 28, 2018 in connection with the Company’s conference call for its fiscal 2018 second quarter results and are included for convenience. Re
Slide 28: Q1-19 Outlook
28 See “Regulation G Disclosure” slides 29-36 for a reconciliation of GAAP to Non-GAAP financial measures. “Q1-19 Outlook” - This slide was used on February 28, 2018 in connection with the Company’s conference call for its fiscal 2018 second quarter results and are included for convenience. Referenc
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: Appendix: Regulation G Disclosure
30 Appendix: Regulation G Disclosure This slide was used on February 28, 2018 in connection with the Company’s conference call for its fiscal 2018 second quarter results and are included for convenience. Reference is made to slide 2 titled “Forward-Looking Statements, Non-GAAP Financial Measures, an
Slide 31: Appendix: Regulation G Disclosure
31 Appendix: Regulation G Disclosure This slide was used on February 28, 2018 in connection with the Company’s conference call for its fiscal 2018 second quarter results and are included for convenience. Reference is made to slide 2 titled “Forward-Looking Statements, Non-GAAP Financial Measures, an
Slide 32: Reconciliation: Non-GAAP Organic Contract Revenue
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) Q4-16 contained 14 weeks as a result of our 52/53 week fiscal year as compared to 13 weeks in all other quarterly p
Slide 33: Contract Revenues and Organic Growth Reconciliation
33 (a) Non-GAAP adjustments in FY 2016 reflect adjustments in Q4-16 resulting from the Company’s 52/53 week fiscal year. The Q4-16 Non-GAAP adjustment is calculated independently for each comparative period as (i) contract revenues less, (ii) revenues from acquired businesses in each applicable peri
Slide 34: Calculation of Cumulative Cash Flows
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 Reconciliation
35 (a) During the quarter ended January 27, 2018, the Company recognized an income tax benefit of approximately $32.2 million resulting from the Tax Cuts and Jobs Act of 2017 (“Tax Reform”), primarily due to the re-measurement of the Company’s net deferred tax liabilities at a lower U.S. federal cor
Slide 36: Reconciliation of Net Income to Non-GAAP Adjusted EBITDA
36 Appendix: Regulation G Disclosure Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures Non-GAAP Adjusted EBITDA Unaudited ($ in 000's, except per share amounts) Use of Non-GAAP Financial Measures: The Company reports its financial results in accordance with U.S. gen
Slide 37: Investor Presentation March 2018
Investor Presentation March 2018
Dycom Industries — Investor Presentation (March 2018) on 6ix