Slide 1: Dycom Industries, Inc. Investor Presentation March 2016
DYCOM INDUSTRIES, INC. Investor Presentation March 2016 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: Overview
3 Overview Leading supplier of specialty contracting services to telecommunication providers nationwide Telecommunications networks fundamental to economic progress Firm and strengthening end market opportunities Telephone companies deploying FTTX to enable video offerings and 1 gigabit connection
Slide 4: Nationwide Footprint and Significant Resources
4 Nationwide footprint Operates in all 50 states, Washington, D.C. and in Canada Over 40 operating subsidiaries Strong revenue base and customer relationships Contract revenues of $559.5 million and organic growth of 19.4% in Q2-16 compared to $441.1 million in Q2-15 Non-GAAP Adjusted EBITDA
Slide 5: Industry Developments
5 Industry Developments Dycom’s scale, market position, and financial strength position it well as opportunities continue to expand Industry increasing network bandwidth dramatically Major industry participants deploying significant wireline networks Newly deployed networks provisioning 1 gigabi
Slide 6: Intensely Focused on Telecommunications Market
6 90.0% 6.0% 4.0% Intensely Focused on Telecommunications Market Outside Plant & Equipment Installation Premise Equipment Installation Wireless Engineering Underground Facility Locating Telecommunications Underground Facility Locating Electric and Gas Utilities and Other Contract revenues
Slide 7: Strong Secular Trend
7 Strong Secular Trend “It took 32 years – from 1984 to 2016 – to generate the first zettabyte of IP traffic annually. However, as this year’s Visual Networking Index forecasts, it will take only three additional years to reach the next zettabyte milestone when there will be more than 2 zettabytes o
Slide 8: Key Driver: FTTx Deployments
8 Key Driver: FTTx Deployments “With regard to the expansion that we're doing now with regard to fiber, we are seeing very good results, and the ability to always have video available with the satellite product is going to prove, I think, to be very beneficial for us. So we will expand on that 60 mi
Slide 9: Key Driver: Fiber to Businesses
9 Key Driver: Fiber to Businesses Sources: Company Press Releases and transcripts “We have three engines of growth in Business Services each at a different stage of development -- small business, which has healthy market penetration and generates the majority of our revenue; mid-sized business where
Slide 10: Key Driver: Connect America Fund
10 Key Driver: Connect America Fund “So, around 400,000 locations within our existing footprint today, they will get minimally 10 meg and above internet speeds. So, we're in the early innings of that, in late 2015, we moved aggressively to sort of put, what I call the cornerstone of the CAF-2 progra
Slide 11: Key Driver: Wireless Network Upgrades
11 Key Driver: Wireless Network Upgrades “First and foremost, I think the foundation is our network, our strategy and densification, the use of fiber. Fiber is going to be critical with the densification, dark fiber. 92% of our cell sites are already fiber enabled; the other 8% are microwave which p
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 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 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 Q2-16 Blue-chip, investment grade customers comprise a substantial p
Slide 15: Durable Customer Relationships
15 Durable Customer Relationships $- $50 $100 $150 $200 $250 $300 $350 $400 $450 FY-06 FY-07 FY-08 FY-09 FY-10 FY-11 FY-12 FY-13 FY-14 FY-15 AT&T Comcast CenturyLink Verizon Charter Time Warner Cable Windstream Unnamed 33% 34% 33% 34% 34% 38% 40% 41% 42% 39% 67% 66% 67% 66% 66% 62% 60% 59% 58% 61% $
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 10+ Years of Robust Cash Flow Generation Sources and Uses of Cash ($ in millions) Notes: Amounts represent cumulative cash flow for fiscal 2006 – Q2 of fiscal 2016; See “Regulation G Disclosure” slides as set forth in the Appendix for a summary of amounts. 1 Other cash flow includes borrowings, o
Slide 18: Financial Update
DYCOM Financial Update 2
Slide 19: Financial Overview
19 Strong operating results Contract revenues of $559.5 million in Q2-16 compared to $441.1 million in Q2-15. Organic growth of 19.4% Non-GAAP Adjusted EBITDA of $66.4 million, or 11.9% of revenues in Q2-16, compared to $47.6 million, or 10.8% in Q2-15 Non-GAAP Adjusted Diluted EPS increased
Slide 20: Strong and sustained financial performance
20 Strong and sustained financial performance 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 28-34 for a reconciliation of GAAP to
Slide 21: Earnings
21 Earnings Non-GAAP Adjusted EBITDA Quarterly Adjusted EBITDA Non-GAAP Adjusted Diluted EPS Financial charts - $ in millions, except earnings per share amounts See “Regulation G Disclosure” slides 28-34 for a reconciliation of GAAP to Non-GAAP financial measures. Quarterly Non-GAAP Adjusted Diluted
Slide 22: Liquidity and Cash Flow
22 Liquidity and Cash Flow Notes: Amounts above may not add due to rounding. Cap-ex, net, and as a % of Revenue* * Cap-ex, net represents capital expenditures less proceeds from sale of assets. Strong balance sheet and robust liquidity (a) Availability on Revolver presented net of $58.0 million and
Slide 23: Capital Allocated to Maximize Returns
23 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 19.4 % in Q2-16, reflecting growth from several key customers Total revenue increased $11
Slide 24: Questions & Answers
24 Questions & Answers
Slide 25: Selected Information from Q2-16 Dycom Results Conference Call Materials
25 Selected Information from Q2-16 Dycom Results Conference Call Materials The following slides 26-28 were used on February 24, 2016 in connection with the Company’s conference call to discuss fiscal 2016 second quarter results and are included for your convenience. Reference is made to slide 2 titl
Slide 26: Q3-2016 Outlook and Commentary
26 Q3-2015 Included for comparison Q3-2016 Outlook and Commentary Contract Revenues $ 492.4 $585 - $605 Broad range of demand from several large customers Robust 1 gigabit deployments, CAF II underway, core market share growth, cable capacity projects expanding Total revenue expected to includ
Slide 27: Looking Ahead to Q4-2016
27 Looking Ahead to Q4-2016 Q4-2015 Included for comparison Q4-2016 Outlook and Commentary – Contract Revenues $ 578.5 Total revenue growth % in mid to high twenties as a % of revenue (Including the additional week in Q4-16) Broad range of demand from several large customers Robust 1 gigabit dep
Slide 28: Reconciliation of Non-GAAP Financial Measures: Guidance
28 Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures Guidance – 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 q
Slide 29: Appendix: Regulation G Disclosure
29 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 30: Cash Flow Summary Fiscal 2006 to Q2-16
30 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 Q2-
Slide 31: Contract Revenues and Organic Growth Reconciliation
31 1 Non-GAAP adjustments in FY 2010 reflect adjustments in Q4-10 resulting from the Company’s 52/53 week fiscal year of $20.1 million. The Q4-10 Non-GAAP adjustments reflect the impact of the additional week in Q4-10 and are calculated by dividing contract revenues by 14 weeks. The result, represen
Slide 32: Adjusted EBITDA Reconciliation Fiscal 2011-2015
32 Fiscal 2011 Fiscal 2012 Fiscal 2013 Fiscal 2014 Fiscal 2015 Adjusting Items: Write-off of deferred financing costs -$ -$ 0.3$ -$ -$ Loss on debt extinguishment, net 8.3$ -$ -$ -$ -$ Charges for settlement of wage and hour l itigation 0.6$ -$ 0.5$ 0.6$ -$ Acquisition related costs 0.2$ -$ 6.8$ -$
Slide 33: Regulation G Disclosure: Quarterly Reconciliations
33 Notes: Amounts above may not add due to rounding. 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 we
Slide 34: Explanation of Non-GAAP Measures
34 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 financial measures, as defined by Re