Exhibit 99-2
4th Quarter Presentation
August 24, 2011
1
Participants
Steven E. Nielsen President & Chief Executive Officer Timothy R. Estes Chief Operating Officer H. Andrew DeFerrari Chief Financial Officer Richard B. Vilsoet General Counsel |
2
Forward-Looking Statements and
Non-GAAP Information
Non-GAAP Information
Forward-Looking Statements and
Non-GAAP Information
Non-GAAP Information
Fiscal 2011 fourth quarter results are unaudited. This presentation contains “forward-looking statements” which
are statements relating to future events, future financial performance, strategies, expectations, and competitive
environment. All statements, other than statements of historical facts, contained in this presentation, including
statements regarding our future financial position, future revenue, prospects, plans and objectives of
management, are forward-looking statements. Words such as “believe,” “expect,” “anticipate,” “estimate,”
“intend,” “forecast,” “may,” “should,” “could,” “project,” “looking ahead” and similar expressions, as well as
statements in future tense, identify forward looking statements. You should not read forward looking statements
as a guarantee of future performance or results. They will not necessarily be accurate indications of whether or
at what time such performance or results will be achieved. Forward looking statements are based on
information available at the time those statements are made and/or management’s good faith belief at that time
with respect to future events. Such statements are subject to risks and uncertainties that could cause actual
performance or results to differ materially from those expressed in or suggested by the forward looking
statements. Important factors that could cause such differences include, but are not limited to factors described
under Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended July 31, 2010,
and other risks outlined in the Company’s periodic filings with the Securities and Exchange Commission
(“SEC”). The forward-looking statements in this presentation are expressly qualified in their entirety by this
cautionary statement. Except as required by law, the Company may not update forward-looking statements
even though its situation may change in the future.
are statements relating to future events, future financial performance, strategies, expectations, and competitive
environment. All statements, other than statements of historical facts, contained in this presentation, including
statements regarding our future financial position, future revenue, prospects, plans and objectives of
management, are forward-looking statements. Words such as “believe,” “expect,” “anticipate,” “estimate,”
“intend,” “forecast,” “may,” “should,” “could,” “project,” “looking ahead” and similar expressions, as well as
statements in future tense, identify forward looking statements. You should not read forward looking statements
as a guarantee of future performance or results. They will not necessarily be accurate indications of whether or
at what time such performance or results will be achieved. Forward looking statements are based on
information available at the time those statements are made and/or management’s good faith belief at that time
with respect to future events. Such statements are subject to risks and uncertainties that could cause actual
performance or results to differ materially from those expressed in or suggested by the forward looking
statements. Important factors that could cause such differences include, but are not limited to factors described
under Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended July 31, 2010,
and other risks outlined in the Company’s periodic filings with the Securities and Exchange Commission
(“SEC”). The forward-looking statements in this presentation are expressly qualified in their entirety by this
cautionary statement. Except as required by law, the Company may not update forward-looking statements
even though its situation may change in the future.
This presentation includes certain “Non-GAAP” financial measures as defined by SEC rules. We believe that the
presentation of certain Non-GAAP financial measures provides information that is useful to investors because it
allows for a more direct comparison of our performance for the period with our performance in the comparable
prior-year periods. As required by the SEC we have provided a reconciliation of those measures to the most
directly comparable GAAP measures on the Regulation G slides included as slides 11 through 14 of this
presentation. We caution that Non-GAAP financial measures should be considered in addition to, but not as a
substitute for, our reported GAAP results.
presentation of certain Non-GAAP financial measures provides information that is useful to investors because it
allows for a more direct comparison of our performance for the period with our performance in the comparable
prior-year periods. As required by the SEC we have provided a reconciliation of those measures to the most
directly comparable GAAP measures on the Regulation G slides included as slides 11 through 14 of this
presentation. We caution that Non-GAAP financial measures should be considered in addition to, but not as a
substitute for, our reported GAAP results.
3
Q4-2011 Overview
n Contract revenue of $303.7 million grew organically 10.8%, including $14.1
million of storm restoration services
million of storm restoration services
n Adjusted EBITDA of $39.9 million in Q4-11 grew 41.1% compared to Q4-10
n Repurchased 580,000 shares of our common stock at an average price of
$15.62 per share for a total of $9.1 million during Q4-11
$15.62 per share for a total of $9.1 million during Q4-11
n Net income of $0.38 per share compared to $0.12 per share in the prior year;
highest quarterly earnings per share since the October 2000 quarter
highest quarterly earnings per share since the October 2000 quarter
n Backlog increased sequentially to $1.412 billion
Note: The organic revenue percentage of 10.8% includes storm restoration services of $14.1 million, excludes revenues from
acquired businesses and is adjusted for the additional week in the prior year quarter as a result of our 52/53 week fiscal year.
See “Regulation G Disclosure” slides 11-14 for a reconciliation of GAAP to Non-GAAP financial measures.
acquired businesses and is adjusted for the additional week in the prior year quarter as a result of our 52/53 week fiscal year.
See “Regulation G Disclosure” slides 11-14 for a reconciliation of GAAP to Non-GAAP financial measures.
4
n Top 5 customers from Q4-11 represented 61.1% of
revenue in Q4-11 and 62.5% of revenue in Q4-10
revenue in Q4-11 and 62.5% of revenue in Q4-10
n Verizon’s year-over-year organic growth at 31.8%
n Windstream, Dycom’s sixth largest customer in Q4-
11 at 6.7% of revenue with organic growth of 27.8%
(excluding storm revenue)
11 at 6.7% of revenue with organic growth of 27.8%
(excluding storm revenue)
n Organic revenue growth of 5.4% on an overall basis
(excluding storm revenue):
(excluding storm revenue):
Ø Revenue from Top 5 customers up 5.9%
Ø Combined revenue from all other customers up
4.5%
4.5%
n Recently acquired companies, Communication
Services and NeoCom, contributed aggregate
revenues of $14.1 million during the quarter
Services and NeoCom, contributed aggregate
revenues of $14.1 million during the quarter
* For comparison purposes, CenturyLink includes combined revenues from CenturyTel, Inc., Qwest Communications International, Inc. and Embarq Corporation for each period
presented.
presented.
Note: See “Regulation G Disclosure” slides 11 -14 for a reconciliation of GAAP to Non-GAAP financial measures.
Organic growth rates shown above exclude storm restoration services.
5
Backlog and Awards
Customers | Description | Area | Approximate Term (in years) |
nVerizon | Engineering and Installation Services | New York, New Jersey, Maryland, Virginia | 3 |
nVerizon | Construction Services | New York | 5 |
nAT&T | Construction and Maintenance Services | Alabama | 3 |
nSCE&G | Locating Services | South Carolina | 3 |
nMetroCast | System Upgrade Project | Virginia | 1 - 2 |
nVarious | Rural broadband | North Carolina, Tennessee, Kentucky, Indiana, Missouri, Oregon | 1 |
6
Summary Results
Organic revenue growth of 5.4%
Revenue from Telecommunications customers up to 83.5% of total
* Includes $20.1 million of revenue from the additional week in Q4-10 as a result of
our 52/53 week fiscal year.
our 52/53 week fiscal year.
Note: The organic revenue percentage of 5.4% excludes storm restoration services of $14.1 million, excludes revenues
from acquired businesses and is adjusted for the additional week in the prior year quarter as a result of our 52/53 week
fiscal year. See “Regulation G Disclosure” slides 11-14 for a reconciliation of GAAP to Non-GAAP financial measures.
from acquired businesses and is adjusted for the additional week in the prior year quarter as a result of our 52/53 week
fiscal year. See “Regulation G Disclosure” slides 11-14 for a reconciliation of GAAP to Non-GAAP financial measures.
*
7
Selected Information
(a) Amounts may not foot due to rounding.
Q4-11
Q4-10
Change (a)
($ in millions)
Contract Revenues
$303.7
$281.5
$22.2
Cost of Earned Revenues
$239.1
78.7%
$227.8
80.9%
$11.3
(2.2)%
General & Administrative
$26.3
8.7%
$26.4
9.4%
$(0.2)
(0.7)%
Depreciation & Amortization
$15.6
5.1%
$17.0
6.1%
$(1.4)
(0.9)%
Interest expense
$4.1
1.4%
$3.8
1.4%
$0.3
-
Other Income, Net
$3.6
1.2%
$1.6
0.6%
$2.0
0.6%
Net Income
$13.0
4.3%
$4.6
1.6%
$8.3
2.6%
Adjusted EBITDA
$39.9
13.1%
$28.2
10.0%
$11.6
3.1%
Organic revenue growth of 5.4%
(excluding $14.1 million of storm revenue in Q4-11)
(excluding $14.1 million of storm revenue in Q4-11)
nRecent contract awards and
Broadband Stimulus activity contributing
to growth
Broadband Stimulus activity contributing
to growth
nImproved pricing environment
Adjusted EBITDA growth driven by
higher revenue and improved cost
trends
higher revenue and improved cost
trends
nUp over 300 bps year-over-year
nImproved labor efficiency
nGreater leverage of general &
administrative costs
administrative costs
Note: The organic revenue percentage of 5.4% excludes storm restoration services of $14.1 million, excludes revenues from acquired
businesses and is adjusted for the additional week in the prior year quarter as a result of our 52/53 week fiscal year. See “Regulation G
Disclosure” slides 11-14 for a reconciliation of GAAP to Non-GAAP financial measures.
businesses and is adjusted for the additional week in the prior year quarter as a result of our 52/53 week fiscal year. See “Regulation G
Disclosure” slides 11-14 for a reconciliation of GAAP to Non-GAAP financial measures.
8
Cash Flow and Liquidity
Operating and Investing Cash Flows
supporting growth
supporting growth
n Sequential growth in the business
drives working capital changes
drives working capital changes
n Capital expenditures, net of disposals,
were at $26.6 million to address new
opportunities, replacement and fuel
efficiency
were at $26.6 million to address new
opportunities, replacement and fuel
efficiency
Balance Sheet Strength
n Increased availability on Senior Credit
Agreement resulting from EBITDA
growth
Agreement resulting from EBITDA
growth
n 580,000 shares of common stock
repurchased for $9.1 million, or $15.62
per share
repurchased for $9.1 million, or $15.62
per share
9
Summary
n Experienced the effects of an improving environment
n Broadband stimulus awards continued throughout the quarter
n Deployment of new technologies by cable operators which enable
them to increase the effective bandwidth of their networks
them to increase the effective bandwidth of their networks
n Increasing number of industry participants aggressively extending or
deploying fiber networks to provide wireless backhaul services
deploying fiber networks to provide wireless backhaul services
n Equity capitalization, after our share repurchases, is intended to
significantly benefit our shareholders
significantly benefit our shareholders
10
Looking Ahead
n Organic revenue which grows modestly generating high single digit to mid-
teens total growth
teens total growth
n Margins and earnings which reflect operating efficiencies at higher revenue
levels
levels
n Solid and growing cash flows dedicated to accretive acquisition opportunities
and share repurchases as valuation and projected returns direct
and share repurchases as valuation and projected returns direct
n Increasingly confident that trends will continue to improve for a sustained
period
period
Q1 - 2012:
n Organic revenue which grows mid single to low double digits year-over-year
n Gross margins which improve year over year and are sequentially in line
n General and administrative expenses which decline slightly on a sequential
basis
basis
n Depreciation which increases modestly on a quarterly sequential basis as a
result of recent capital expenditures
result of recent capital expenditures
n Other income which declines slightly on a sequential basis
11
Appendix: Regulation G Disclosure
(a) Non-GAAP adjustments in Q4-11 reflect revenues from businesses acquired during Q2-11. 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, representing one week of contract revenues, is subtracted from the GAAP-
contract revenues to calculate 13 weeks of revenue for Q4-10 on a Non-GAAP basis for comparison purposes.
week in Q4-10 and are calculated by dividing contract revenues by 14 weeks. The result, representing one week of contract revenues, is subtracted from the GAAP-
contract revenues to calculate 13 weeks of revenue for Q4-10 on a Non-GAAP basis for comparison purposes.
(b) Year-over-year growth percentage is calculated as follows: (i) revenues in the quarterly period less (ii) revenues in the comparative prior year quarter period; divided
by (ii) revenues in the comparative prior year quarter period.
by (ii) revenues in the comparative prior year quarter period.
Amounts may not foot due to rounding.
12
Appendix: Regulation G Disclosure
(a) Non-GAAP adjustments in Q4-11 reflect storm restoration revenues recognized and revenues from businesses acquired during Q2-11. 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, representing one week of
contract revenues, is subtracted from the GAAP-contract revenues to calculate 13 weeks of revenue for Q4-10 on a Non-GAAP basis for comparison purposes.
adjustments reflect the impact of the additional week in Q4-10 and are calculated by dividing contract revenues by 14 weeks. The result, representing one week of
contract revenues, is subtracted from the GAAP-contract revenues to calculate 13 weeks of revenue for Q4-10 on a Non-GAAP basis for comparison purposes.
(b) Year-over-year growth percentage is calculated as follows: (i) revenues in the quarterly period less (ii) revenues in the comparative prior year quarter period; divided
by (ii) revenues in the comparative prior year quarter period.
by (ii) revenues in the comparative prior year quarter period.
Amounts may not foot due to rounding.
13
Appendix: Regulation G Disclosure
Amounts may not foot due to rounding.
(a) Non-GAAP adjustments in Q4-11 reflect storm restoration revenues ($9.6 million Top 5 Customers, $4.5 million All Other Customers) and revenues from
businesses acquired during Q2-11 ($2.9 million Top 5 Customers, $11.2 million All Other Customers). Non-GAAP adjustments in Q3-11 and Q2-11 reflect revenues
from businesses acquired during Q2-11. Non-GAAP adjustments in Q4-10 result from the Company’s 52/53 week fiscal year. 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, representing one week of contract
revenues, is subtracted from the GAAP-contract revenues to calculate 13 weeks of revenue for Q4-10 on a Non-GAAP basis for comparison purposes. Non-GAAP
adjustments in Q3-09, Q2-09, and Q1-09 reflect storm restoration revenues recognized during those periods.
businesses acquired during Q2-11 ($2.9 million Top 5 Customers, $11.2 million All Other Customers). Non-GAAP adjustments in Q3-11 and Q2-11 reflect revenues
from businesses acquired during Q2-11. Non-GAAP adjustments in Q4-10 result from the Company’s 52/53 week fiscal year. 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, representing one week of contract
revenues, is subtracted from the GAAP-contract revenues to calculate 13 weeks of revenue for Q4-10 on a Non-GAAP basis for comparison purposes. Non-GAAP
adjustments in Q3-09, Q2-09, and Q1-09 reflect storm restoration revenues recognized during those periods.
(b) Year-over-year growth (decline) percentage is calculated as follows: (i) revenues in the quarterly period less (ii) revenues in the comparative prior year quarter
period; divided by (ii) revenues in the comparative prior year quarter period.
period; divided by (ii) revenues in the comparative prior year quarter period.
14
Appendix: Regulation G Disclosure
The above table presents the Non-GAAP financial measures of EBITDA and Adjusted EBITDA for the three months ended July 30, 2011 and July 31,
2010. EBITDA and Adjusted EBITDA are Non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and
Exchange Commission. The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization, and defines Adjusted
EBITDA as earnings before interest, taxes, depreciation and amortization, gain on sale of fixed assets, stock-based compensation expense and
unusual items. The Company believes these Non-GAAP financial measures provide information that is useful to the Company’s investors. The
Company believes that this information is helpful in understanding period-over-period operating results separate and apart from items that may, or
could, have a disproportionate positive or negative impact on the Company’s results of operations in any particular period. Additionally, the Company
uses these Non-GAAP financial measures to evaluate its past performance and prospects for future performance. EBITDA and Adjusted EBITDA are
not recognized terms under GAAP and do not purport to be an alternative to net income, operating cash flows, or a measure of earnings. Because all
companies do not use identical calculations, this presentation of Non-GAAP financial measures may not be comparable to other similarly titled
measures of other companies. These tables present a reconciliation of EBITDA and Adjusted EBITDA to the most directly comparable GAAP
measure.
2010. EBITDA and Adjusted EBITDA are Non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and
Exchange Commission. The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization, and defines Adjusted
EBITDA as earnings before interest, taxes, depreciation and amortization, gain on sale of fixed assets, stock-based compensation expense and
unusual items. The Company believes these Non-GAAP financial measures provide information that is useful to the Company’s investors. The
Company believes that this information is helpful in understanding period-over-period operating results separate and apart from items that may, or
could, have a disproportionate positive or negative impact on the Company’s results of operations in any particular period. Additionally, the Company
uses these Non-GAAP financial measures to evaluate its past performance and prospects for future performance. EBITDA and Adjusted EBITDA are
not recognized terms under GAAP and do not purport to be an alternative to net income, operating cash flows, or a measure of earnings. Because all
companies do not use identical calculations, this presentation of Non-GAAP financial measures may not be comparable to other similarly titled
measures of other companies. These tables present a reconciliation of EBITDA and Adjusted EBITDA to the most directly comparable GAAP
measure.
4th Quarter Presentation
August 24, 2011