Dycom Industries, Inc. · NYSE:DY
Dycom Industries — Investor Presentation (May 2018)
37 slides from Dycom Industries's investor presentation, May 30, 2018
Slide 1: Investor Presentation May & June 2018
Exhibit 99.1 Investor Presentation May & June 2018
Slide 2: Forward Looking Statements, Non-GAAP Financial Measures and Other Information
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, fut
Slide 3: Dycom Overview
Dycom Overview 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 and over 14,600 employees Strong revenue base, customer relationships and profitable resu
Slide 4: Telecommunications Industry Overview
Telecommunications Industry Overview 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 prov
Slide 5: Telecommunications Industry Overview: Fiber Investment Cycle
Telecommunications Industry Overview Massive investment cycle in early stages ‐ total U.S. homes passed with fiber below 20% ~250 million passings (a) Eventual fiber passings estimated to 188 million be approximately 188 million Over 35 million fiber passings ~75% of completed through 2017 ‐ ove
Slide 6: Strong Secular Trend
Strong Secular Trend North America Internet Protocol Traffic vs. GDP Growth Strong and stable growth in IP traffic even in times of GDP decline “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
Slide 7: Industry Drivers
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 are occuring. Wireless construction activity in support of expanded cov
Slide 8: Key Driver: High Bandwidth Deployments
Key Driver: High Bandwidth Deployments AT&T Verizon Sources: AT&T Press Releases and transcripts. Sources: Verizon Nov‐17 Analyst Presentation Telephone companies are deploying fiber to the home and fiber to the node technologies to enable video offerings and 1 gigabit connections Data transmiss
Slide 9: Key Driver: Wireless Network Upgrades
Key Driver: Wireless Network Upgrades Growth in Number of Cell Sites¹ 500,000 Wireless carriers are increasing 4G capacity and 450,000 augmenting 4G with new 5G technologies creating 400,000 growth opportunities in the near to intermediate 350,000 term 300,000 Cities 250,000 Carriers enhancing c
Slide 10: Key Driver: Fiber to Businesses
Key Driver: Fiber to Businesses Revenue earned by Comcast and Charter from Business Services totaled $12.1 Billion1 of an Addressable Market of $70 billion 2 Sources: Comcast and Charter Press Releases and transcripts “Moving on to business services, which continues to be a top driver of our overall
Slide 11: Intensely Focused on Telecommunications Market
Intensely Focused on Telecommunications Market Services Crucial to Customers’ Success Contract revenues of $731.4 million for Q1‐19 Telecommunications Outside Plant & Equipment Installation Wireless Premise Equipment Installation Engineering Underground Facility Locating Electric and Gas U
Slide 12: Local Credibility, National Capability
Local Credibility, National Capability Dycom’s Nationwide Presence Subsidiaries 12
Slide 13: Focused on High Value Profitable Growth
Focused on High Value Profitable Growth Anticipate emerging technology trends that drive capital spending Deliberately target high quality, long‐term industry leaders which generate the vast majority of the industry’s profitable opportunities Selectively acquire businesses that complement our
Slide 14: Well Established Customers
Well Established Customers Top Customers Customer Revenue Breakdown Q1‐19 Dycom has established relationships with: Telephone companies Wireless carriers Cable multiple system operators Electric utilities and others Blue‐chip, investment grade customers comprise a substantial portion of reve
Slide 15: Durable Customer Relationships
Durable Customer Relationships Revenues ($ 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 XO C
Slide 16: Anchored by Long-Term Agreements
Anchored by Long‐Term Agreements Revenue by Contract Type for Fiscal Q1‐19 Dycom is party to hundreds of MSA’s and Master Service Agreements other agreements with customers that extend for periods of one or more years Generally multiple agreements maintained with each customer Master Service A
Slide 17: Industry Themes
Industry Themes Industry increasing network bandwidth dramatically Major industry participants deploying significant 1 gigabit wireline networks Emerging wireless technologies are driving significant wireline deployments Wireline deployments necessary to facilitate expected decades long depl
Slide 18: 10+ Years of Robust Cash Flow Generation
10+ Years of Robust Cash Flow Generation Sources and Uses of Cash ($ in millions) $2,033 $2,033 Strong operating cash flow of $1.405 billion over 10+ years Prudent approach to capital allocation: $472 million invested in share repurchases $597 million invested in business acquisitions $899
Slide 19: Financial Update
co DYCOM Financial Update
Slide 20: Financial Overview
Financial Overview Strengthening market opportunities despite near‐term revenue declines Contract revenues of $731.4 million in Q1‐19 Non‐GAAP Adjusted EBITDA for the quarter ended April 28, 2018 of $73.7 million, or 10.1% of revenue, compared to $108.2 million, or 13.8% of revenue, for the qu
Slide 21: Contract Revenue Trend
Contract Revenue Trend Financial charts ‐ $ in millions Annual Growth in Contract Revenues Quarterly Contract Revenues (b) (b) Annual Organic Revenue Trend Quarterly Organic Revenue Trend (a) Organic % growth adjusted for additional week in Q4‐16 (b) Due to the change in the Company’s fiscal year en
Slide 22: Earnings
Earnings Financial charts ‐ $ in millions, except earnings per share amounts Non‐GAAP Adjusted EBITDA Quarterly Non‐GAAP Adjusted EBITDA (a) (a) Non‐GAAP Adjusted Diluted EPS Quarterly Non‐GAAP Adjusted Diluted EPS (a) (a) (a) Due to the change in the Company’s fiscal year end, the Company’s fiscal
Slide 23: Liquidity and Cash Flow
Liquidity and Cash Flow Financial tables ‐ $ in millions Strong balance sheet and robust liquidity Liquidity Summary As of Balance sheet reflects the strength of our January 27, 2018 April 28, 2018 Cash and equivalents $ 84.0 $ 57.9 business Senior Credit Facility, matures April 2020: Liquidity
Slide 24: Capital Allocated to Maximize Returns
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 Acquisitions have further strengthened Dycom’s customer base, geographic scope,
Slide 25: Questions and Answers
CDYCOM THE PEOPLE CONNECTING AMERICA’ Questions and Answers
Slide 26: Selected Information from Q1-19 Dycom Results Conference Call Materials
Selected Information from Q1‐19 Dycom Results Conference Call Materials The following slides 27 & 28 were used on May 22, 2018 in connection with the Company’s conference call for its fiscal 2019 first quarter results and are included for your convenience. Reference is made to slide 2 titled “Forwar
Slide 27: Fiscal 2019 Outlook
“Fiscal 2019 Outlook” ‐ This slide was used on May 22, 2018 in connection with the Company’s conference call for its fiscal 2019 first quarter results and are included for convenience. Reference is made to slide 2 titled “Forward‐Looking Statements, Non‐GAAP Financial Measures, and Other Information
Slide 28: Q2-2019 Outlook
“Q2‐2019 Outlook” ‐ This slide was used on May 22, 2018 in connection with the Company’s conference call for its fiscal 2019 first quarter results and are included for convenience. Reference is made to slide 2 titled “Forward‐Looking Statements, Non‐GAAP Financial Measures, and Other Information” wi
Slide 29: Appendix: Regulation G Disclosure - Explanation of Non-GAAP Measures
Appendix: Regulation G Disclosure 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
Slide 30: Appendix: Regulation G Disclosure
Appendix: Regulation G Disclosure This slide was used on May 22, 2018 in connection with the Company’s conference call for its fiscal 2019 first quarter results and are included for convenience. Reference is made to slide 2 titled “Forward‐Looking Statements, Non‐GAAP Financial Measures, and Other I
Slide 31: Appendix: Regulation G Disclosure
Appendix: Regulation G Disclosure This slide was used on May 22, 2018 in connection with the Company’s conference call for its fiscal 2019 first quarter results and are included for convenience. Reference is made to slide 2 titled “Forward‐Looking Statements, Non‐GAAP Financial Measures, and Other I
Slide 32: Appendix: Regulation G Disclosure - Non-GAAP Organic Contract Revenue
Appendix: Regulation G Disclosure Reconciliation of Non‐GAAP Financial Measures to Comparable GAAP Financial Measures Non‐GAAP Organic Contract Revenue Unaudited ($ in millions) Revenue Growth Non‐GAAP Organic (Decline)% Contract Revenues NON‐GAAP ADJUSTMENTS Contract Revenues GAAP % Organic % Reven
Slide 33: Appendix: Regulation G Disclosure - Contract Revenues and Organic Growth
Appendix: Regulation G Disclosure Contract Revenues and Organic Growth ‐ Reconciliation of GAAP to Non‐GAAP Measures ($ in millions) The table below reconciles GAAP revenue growth to Non‐GAAP organic revenue growth NON‐GAAP ADJUSTMENTS Revenue Growth (Decline)% Additional week Revenues from Revenues
Slide 34: Appendix: Regulation G Disclosure - Cumulative Cash Flows
Appendix: Regulation G Disclosure Reconciliation of Non‐GAAP Financial Measures to Comparable GAAP Financial Measures Calculation of Cumulative Cash Flows Fiscal 2008 through Fiscal 2018 Unaudited ($ in millions) Total Amount Net Cash Provided Capital Expenditures, Cash Paid for Provided by Other by
Slide 35: Appendix: Regulation G Disclosure - Adjusted Net Income and EPS
Appendix: Regulation G Disclosure 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) (a) During the quarter ended Janu
Slide 36: Appendix: Regulation G Disclosure - Non-GAAP Adjusted EBITDA
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) Reconciliation of Net Income to Non‐GAAP Adjusted EBITDA 4 Qtrs. Ended Fiscal 2013 Fiscal 2014 Fiscal 2015 Q
Slide 37: May & June 2018
Investor Presentation May & June 2018