Third Quarter Highlights
- Contract revenues of $1.042 billion; 22.1% growth
- Non-GAAP Adjusted EBITDA of $114.6 million
- Net Income of $54.0 million, or $1.80 per common share diluted
PALM BEACH GARDENS, Fla., Nov. 22, 2022 (GLOBE NEWSWIRE) — Dycom Industries, Inc. (NYSE: DY) announced today its results for the third quarter ended October 29, 2022. Contract revenues were $1.042 billion for the quarter ended October 29, 2022, compared to $854.0 million in the year ago period, an increase of 22.1%. Non-GAAP Adjusted EBITDA was $114.6 million, or 11.0% of contract revenues, for the quarter ended October 29, 2022, compared to $83.1 million, or 9.7% of contract revenues, in the year ago period.
Net income was $54.0 million, or $1.80 per common share diluted, for the quarter ended October 29, 2022, compared to $28.7 million, or $0.94 per common share diluted, in the year ago period. Results for the quarters ended October 29, 2022 and October 30, 2021 include income tax benefits of $3.2 million, or $0.11 per common share diluted, and $3.0 million, or $0.10 per common share diluted, respectively, for the vesting and exercise of share-based awards and for credits related to tax filings for prior years.
Year-to-Date Highlights
Contract revenues were $2.891 billion for the nine months ended October 29, 2022, compared to $2.369 billion for the nine months ended October 30, 2021. Contract revenues increased 22.2% organically after excluding $3.9 million of contract revenues from storm restoration services in the comparable year ago period. Non-GAAP Adjusted EBITDA was $283.0 million, or 9.8% of contract revenues, for the nine months ended October 29, 2022, compared to $201.0 million, or 8.5% of contract revenues, in the comparable year ago period.
Net income was $117.4 million, or $3.91 per common share diluted, for the nine months ended October 29, 2022. For the comparable year ago period, net income was $47.8 million, or $1.54 per common share diluted. Results for the nine months ended October 29, 2022 and October 30, 2021 include income tax benefits of $7.6 million, or $0.25 per common share diluted, and $5.8 million, or $0.19 per common share diluted, respectively, for the vesting and exercise of share-based awards and for credits related to tax filings for prior years.
During the nine months ended October 29, 2022, the Company purchased 304,030 shares of its own common stock in open market transactions for $28.5 million at an average price of $93.85 per share.
Outlook
The Company expects contract revenues for the quarter ending January 28, 2023 to increase by mid- to high-single digit as a percentage of contract revenues as compared to the quarter ended January 29, 2022. Non-GAAP Adjusted EBITDA as a percentage of contract revenues is expected to increase modestly for the quarter ending January 28, 2023 as compared to the quarter ended January 29, 2022. For additional information regarding the Company’s outlook, please see the presentation materials available on the Company’s website posted in connection with the conference call discussed below.
Use of Non-GAAP Financial Measures
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). In quarterly results releases, trend schedules, conference calls, slide presentations, and webcasts, the Company may use or discuss Non-GAAP financial measures, as defined by Regulation G of the Securities and Exchange Commission. See Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures in the press release tables that follow.
Conference Call Information and Other Selected Data
The Company will host a conference call to discuss fiscal 2023 third quarter results on Tuesday, November 22, 2022 at 9:00 a.m. Eastern time. Interested parties may participate in the question and answer session of the conference call by registering at https://register.vevent.com/register/BI0369368b0c7644b086408460275d7ef8. Upon registration, participants will receive a dial-in number and unique PIN to access the call. Participants are encouraged to join approximately ten minutes prior to the scheduled start time.
For all other attendees, a live listen-only audio webcast of the call, including an accompanying slide presentation, can be accessed directly at https://edge.media-server.com/mmc/p/z2ivk522. A replay of the live webcast and the related materials will be available on the Company’s Investor Center website at https://ir.dycomind.com for approximately 120 days following the event.
About Dycom Industries, Inc.
Dycom is a leading provider of specialty contracting services throughout the United States. These services include program management; planning; engineering and design; aerial, underground, and wireless construction; maintenance; and fulfillment services for telecommunications providers. Additionally, Dycom provides underground facility locating services for various utilities, including telecommunications providers, and other construction and maintenance services for electric and gas utilities.
Forward Looking Information
This press release contains forward-looking statements within the meaning of the 1995 Private Securities Litigation Reform Act. These forward-looking statements include those related to the outlook for the quarter ending January 28, 2023, including, but not limited to, those statements found under the “Outlook” section of this press release. Forward-looking statements are based on management’s expectations, estimates and projections, are made solely as of the date these statements are made, and are subject to both known and unknown risks and uncertainties that may cause the actual results and occurrences discussed in these forward-looking statements to differ materially from those referenced or implied in the forward-looking statements contained in this press release. The most significant of these known risks and uncertainties are described in the Company’s Form 10-K, Form 10-Q, and Form 8-K reports (including all amendments to those reports) and include future economic conditions and trends including the potential impacts of an inflationary economic environment, customer capital budgets and spending priorities, the availability and cost of materials, equipment and labor necessary to perform our work, the adequacy of the Company’s insurance and other reserves and allowances for doubtful accounts, whether the carrying value of the Company’s assets may be impaired, the future impact of any acquisitions or dispositions, adjustments and cancellations of the Company’s projects, the impact to the Company’s backlog from project cancellations or postponements, the impact of the COVID-19 pandemic, the impact of varying climate and weather conditions, the anticipated outcome of other contingent events, including litigation or regulatory actions involving the Company, the adequacy of our liquidity, the availability of financing to address our financial needs, the Company’s ability to generate sufficient cash to service its indebtedness, the impact of restrictions imposed by the Company’s credit agreement, and other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission. The Company does not undertake any obligation to update its forward-looking statements.
For more information, contact:
Callie Tomasso, Investor Relations
Email: investorrelations@dycomind.com
Phone: (561) 627-7171
—Tables Follow—
| DYCOM INDUSTRIES, INC. AND SUBSIDIARIES | |||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
| (Dollars in thousands) | |||||
| Unaudited | |||||
| October 29, 2022 | January 29, 2022 | ||||
| ASSETS | |||||
| Current assets: | |||||
| Cash and equivalents | $ | 65,285 | $ | 310,757 | |
| Accounts receivable, net | 1,244,482 | 895,898 | |||
| Contract assets | 53,319 | 24,539 | |||
| Inventories | 107,135 | 81,291 | |||
| Income tax receivable | — | 12,729 | |||
| Other current assets | 42,797 | 30,876 | |||
| Total current assets | 1,513,018 | 1,356,090 | |||
| Property and equipment, net | 337,175 | 294,798 | |||
| Operating lease right-of-use assets | 66,083 | 61,101 | |||
| Goodwill and other intangible assets, net | 362,623 | 374,317 | |||
| Other assets | 26,397 | 31,918 | |||
| Total assets | $ | 2,305,296 | $ | 2,118,224 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | $ | 200,980 | $ | 155,896 | |
| Current portion of debt | 17,500 | 17,500 | |||
| Contract liabilities | 14,419 | 18,512 | |||
| Accrued insurance claims | 41,594 | 36,805 | |||
| Operating lease liabilities | 26,522 | 24,641 | |||
| Income taxes payable | 9,585 | 233 | |||
| Other accrued liabilities | 160,500 | 128,209 | |||
| Total current liabilities | 471,100 | 381,796 | |||
| Long-term debt | 811,350 | 823,251 | |||
| Accrued insurance claims – non-current | 48,719 | 48,238 | |||
| Operating lease liabilities – non-current | 39,513 | 36,519 | |||
| Deferred tax liabilities, net – non-current | 59,416 | 55,674 | |||
| Other liabilities | 16,582 | 14,202 | |||
| Total liabilities | 1,446,680 | 1,359,680 | |||
| Total stockholders’ equity | 858,616 | 758,544 | |||
| Total liabilities and stockholders’ equity | $ | 2,305,296 | $ | 2,118,224 | |
| DYCOM INDUSTRIES, INC. AND SUBSIDIARIES | |||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| (Dollars in thousands, except share amounts) | |||||||||||||||
| Unaudited | |||||||||||||||
| Quarter | Quarter | Nine Months | Nine Months | ||||||||||||
| Ended | Ended | Ended | Ended | ||||||||||||
| October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | ||||||||||||
| Contract revenues | $ | 1,042,423 | $ | 853,973 | $ | 2,890,996 | $ | 2,369,038 | |||||||
| Costs of earned revenues, excluding depreciation and amortization | 850,897 | 705,865 | 2,394,606 | 1,977,243 | |||||||||||
| General and administrative1 | 78,798 | 66,899 | 221,514 | 198,640 | |||||||||||
| Depreciation and amortization | 35,454 | 37,766 | 107,436 | 115,307 | |||||||||||
| Total | 965,149 | 810,530 | 2,723,556 | 2,291,190 | |||||||||||
| Interest expense, net | (10,592 | ) | (9,132 | ) | (29,057 | ) | (24,343 | ) | |||||||
| Loss on debt extinguishment2 | — | — | — | (62 | ) | ||||||||||
| Other income, net | 2,474 | 564 | 9,856 | 4,267 | |||||||||||
| Income before income taxes | 69,156 | 34,875 | 148,239 | 57,710 | |||||||||||
| Provision for income taxes3 | 15,144 | 6,158 | 30,835 | 9,930 | |||||||||||
| Net income | $ | 54,012 | $ | 28,717 | $ | 117,404 | $ | 47,780 | |||||||
| Earnings per common share: | |||||||||||||||
| Basic earnings per common share | $ | 1.83 | $ | 0.95 | $ | 3.97 | $ | 1.57 | |||||||
| Diluted earnings per common share | $ | 1.80 | $ | 0.94 | $ | 3.91 | $ | 1.54 | |||||||
| Shares used in computing earnings per common share: | |||||||||||||||
| Basic | 29,524,516 | 30,172,254 | 29,561,172 | 30,426,337 | |||||||||||
| Diluted | 29,978,795 | 30,614,706 | 30,007,257 | 30,928,890 | |||||||||||
| DYCOM INDUSTRIES, INC. AND SUBSIDIARIES | ||||||||||||||
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO COMPARABLE GAAP FINANCIAL MEASURES |
||||||||||||||
| (Dollars in thousands) | ||||||||||||||
| Unaudited | ||||||||||||||
| CONTRACT REVENUES, NON-GAAP ORGANIC CONTRACT REVENUES, AND GROWTH %’s | ||||||||||||||
| Quarter | Quarter | Nine Months | Nine Months | |||||||||||
| Ended | Ended | Ended | Ended | |||||||||||
| October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | |||||||||||
| Contract Revenues – GAAP | $ | 1,042,423 | $ | 853,973 | $ | 2,890,996 | $ | 2,369,038 | ||||||
| Contract Revenues – GAAP Organic Growth % | 22.1 | % | 22.0 | % | ||||||||||
| Contract Revenues – GAAP | $ | 1,042,423 | $ | 853,973 | $ | 2,890,996 | $ | 2,369,038 | ||||||
| Revenues from storm restoration services | — | — | — | (3,869 | ) | |||||||||
| Non-GAAP Organic Contract Revenues | $ | 1,042,423 | $ | 853,973 | $ | 2,890,996 | $ | 2,365,169 | ||||||
| Non-GAAP Organic Contract Revenues Growth % | 22.1 | % | 22.2 | % | ||||||||||
| NET INCOME AND NON-GAAP ADJUSTED EBITDA | |||||||||||||||
| Quarter | Quarter | Nine Months | Nine Months | ||||||||||||
| Ended | Ended | Ended | Ended | ||||||||||||
| October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | ||||||||||||
| Reconciliation of net income to Non-GAAP Adjusted EBITDA: | |||||||||||||||
| Net income | $ | 54,012 | $ | 28,717 | $ | 117,404 | $ | 47,780 | |||||||
| Interest expense, net | 10,592 | 9,132 | 29,057 | 24,343 | |||||||||||
| Provision for income taxes | 15,144 | 6,158 | 30,835 | 9,930 | |||||||||||
| Depreciation and amortization | 35,454 | 37,766 | 107,436 | 115,307 | |||||||||||
| Earnings Before Interest, Taxes, Depreciation & Amortization ("EBITDA") | 115,202 | 81,773 | 284,732 | 197,360 | |||||||||||
| Gain on sale of fixed assets | (5,135 | ) | (415 | ) | (13,991 | ) | (4,259 | ) | |||||||
| Stock-based compensation expense | 4,515 | 1,789 | 12,273 | 7,838 | |||||||||||
| Loss on debt extinguishment2 | — | — | — | 62 | |||||||||||
| Non-GAAP Adjusted EBITDA | $ | 114,582 | $ | 83,147 | $ | 283,014 | $ | 201,001 | |||||||
| Non-GAAP Adjusted EBITDA % of contract revenues | 11.0 | % | 9.7 | % | 9.8 | % | 8.5 | % | |||||||
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO COMPARABLE GAAP FINANCIAL MEASURES (CONTINUED)
Explanation of Non-GAAP Financial 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 may use or discuss Non-GAAP financial measures, as defined by Regulation G of the Securities and Exchange Commission. The Company believes that the presentation of certain Non-GAAP financial measures in these materials provides information that is useful to investors because it allows for a more direct comparison of the Company’s performance for the period reported with the Company’s performance in prior periods. The Company cautions that Non-GAAP financial measures should be considered in addition to, but not as a substitute for, the Company’s reported GAAP results. Management defines the Non-GAAP financial measures used as follows:
- Non-GAAP Organic Contract Revenues – contract revenues from businesses that are included for the entire period in both the current and prior year periods, excluding contract revenues from storm restoration services. Non-GAAP Organic Contract Revenue change percentage is calculated as the change in Non-GAAP Organic Contract Revenues from the comparable prior year period divided by the comparable prior year period Non-GAAP Organic Contract Revenues. Management believes Non-GAAP Organic Contract Revenues is a helpful measure for comparing the Company’s revenue performance with prior periods. For comparison purposes, Lumen’s Non-GAAP Organic Contract Revenue and Non-GAAP Organic Contract Revenue Growth percentage excludes the estimated contract revenues for the quarters ended October 29, 2022 and October 30, 2021 related to the ILEC (incumbent local exchange carrier) business in 20 states it sold to Brightspeed on October 3, 2022.
- Non-GAAP Adjusted EBITDA – net income before interest, taxes, depreciation and amortization, gain on sale of fixed assets, stock-based compensation expense, and certain non-recurring items. Management believes Non-GAAP Adjusted EBITDA is a helpful measure for comparing the Company’s operating performance with prior periods as well as with the performance of other companies with different capital structures or tax rates.
Notes
1 Includes stock-based compensation expense of $4.5 million and $1.8 million for the quarters ended October 29, 2022 and October 30, 2021, respectively, and $12.3 million and $7.8 million for the nine months ended October 29, 2022 and October 30, 2021, respectively.
2 During the nine months ended October 30, 2021, the Company recognized a loss on debt extinguishment of $0.1 million in connection with the amendment and restatement of its credit agreement maturing in April 2026.
3 Results include income tax benefits of $3.2 million, or $0.11 per common share diluted, and $3.0 million, or $0.10 per common share diluted for the quarters ended October 29, 2022 and October 30, 2021, respectively, for the vesting and exercise of share-based awards and for credits related to tax filings for prior years.
Results for the nine months ended October 29, 2022 and October 30, 2021 include income tax benefits of $7.6 million, or $0.25 per common share diluted, and $5.8 million, or $0.19 per common share diluted, respectively, for the vesting and exercise of share-based awards and for credits related to tax filings for prior years.
