N E W S R E L E A S E
|
| | |
| FOR IMMEDIATE RELEASE | Contact: | Steven E. Nielsen, President and CEO H. Andrew DeFerrari, Senior Vice President and CFO (561) 627-7171 |
November 20, 2018
DYCOM INDUSTRIES, INC. ANNOUNCES FISCAL 2019 THIRD QUARTER RESULTS
AND PROVIDES GUIDANCE FOR THE NEXT FISCAL QUARTER
Palm Beach Gardens, Florida, November 20, 2018 - Dycom Industries, Inc. (NYSE: DY) announced today its results for the third quarter and nine months ended October 27, 2018. The Company reported:
| |
| • | Contract revenues of $848.2 million for the quarter ended October 27, 2018, compared to $756.2 million for the quarter ended October 28, 2017. Contract revenues for the quarter ended October 27, 2018 increased 12.9% on an organic basis after excluding contract revenues of $8.8 million from an acquired business that was not owned during the comparable prior period and contract revenues from storm restoration services. Contract revenues from storm restoration services were $3.9 million for the quarter ended October 27, 2018 compared to $15.9 million for the quarter ended October 28, 2017. |
| |
| • | Non-GAAP Adjusted EBITDA of $98.6 million, or 11.6% of contract revenues, for the quarter ended October 27, 2018, compared to Non-GAAP Adjusted EBITDA of $97.6 million, or 12.9% of contract revenues, for the quarter ended October 28, 2017. |
| |
| • | On a GAAP basis, net income was $27.8 million, or $0.87 per common share diluted, for the quarter ended October 27, 2018, compared to net income of $28.8 million, or $0.90 per common share diluted, for the quarter ended October 28, 2017. Non-GAAP Adjusted Net Income was $31.3 million, or $0.98 per common share diluted, for the quarter ended October 27, 2018, compared to Non-GAAP Adjusted Net Income of $31.6 million, or $0.99 per common share diluted, for the quarter ended October 28, 2017. |
Non-GAAP Adjusted Net Income for the quarters ended October 27, 2018 and October 28, 2017 excludes $4.8 million and $4.5 million, respectively, of pre-tax interest expense for the non-cash amortization of the debt discount associated with the Company’s 0.75% convertible senior notes due September 2021 (the “Notes”).
The Company also reported:
| |
| • | Contract revenues of $2.379 billion for the nine months ended October 27, 2018, compared to $2.323 billion for the nine months ended October 28, 2017. Contract revenues for the nine months ended October 27, 2018 increased 0.8% on an organic basis after excluding contract revenues from acquired businesses that were not owned for the entire period in both the current and comparable prior periods and contract revenues from storm restoration services. Total contract revenues from acquired businesses were $54.3 million for the nine months ended October 27, 2018 compared to $23.9 million for the nine months ended October 28, 2017. Contract revenues from storm restoration services were $22.5 million for the nine months ended October 27, 2018 compared to $15.5 million for the nine months ended October 28, 2017, excluding amounts from acquired businesses. |
| |
| • | Non-GAAP Adjusted EBITDA of $270.1 million, or 11.4% of contract revenues, for the nine months ended October 27, 2018, compared to Non-GAAP Adjusted EBITDA of $323.9 million, or 13.9% of contract revenues, for the nine months ended October 28, 2017. |
| |
| • | On a GAAP basis, net income was $75.0 million, or $2.34 per common share diluted, for the nine months ended October 27, 2018, compared to net income of $111.3 million, or $3.50 per common share diluted, for the nine months ended October 28, 2017. Non-GAAP Adjusted Net Income was $85.3 million, or $2.68 per Non-GAAP Adjusted |
Diluted Share, for the nine months ended October 27, 2018, compared to Non-GAAP Adjusted Net Income of $119.7 million, or $3.76 per common share diluted, for the nine months ended October 28, 2017.
Non-GAAP Adjusted Net Income for the nine months ended October 27, 2018 and October 28, 2017 excludes $14.2 million and $13.5 million, respectively, of pre-tax interest expense for the non-cash amortization of the debt discount associated with the Notes. Shares used in computing Non-GAAP Adjusted Diluted Earnings per Common Share for the nine months ended October 27, 2018 exclude the GAAP dilutive effect of approximately 0.2 million weighted shares from the Notes, as the Company has a note hedge in effect to offset the economic dilution of additional shares up to an average quarterly share price of $130.43 per share.
Outlook
For the quarter ending January 26, 2019 and fiscal 2019, the Company currently expects the following:
|
| | | |
| | Quarter Ending
January 26, 2019 | | Fiscal 2019 |
| Contract revenues | $695 - $745 million | | $3.074 - $3.124 billion |
| GAAP Diluted Earnings (Loss) per Common Share | $(0.09) - $0.13 | | $2.25 - $2.47 |
| Non-GAAP Adjusted Diluted Earnings per Common Share | $0.02 - $0.24 | | $2.70 - $2.92 |
| Non-GAAP Adjusted EBITDA % of contract revenues | 8.4% - 9.2% | | 10.7% - 10.8% |
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 directly following the press release tables.
Conference Call Information and Other Selected Data
A conference call to review the Company’s results will be hosted at 9:00 a.m. (ET), Tuesday, November 20, 2018; call (800) 230-1074 (United States) or (612) 234-9960 (International) ten minutes before the conference call begins and ask for the “Dycom Results” conference call. A live webcast of the conference call and related materials will be available on the Company’s Investor Center website at https://ir.dycomind.com. If you are unable to attend the conference call at the scheduled time, a replay of the live webcast and the related materials will be available at https://ir.dycomind.com until Thursday, December 20, 2018.
About Dycom Industries, Inc.
Dycom is a leading provider of specialty contracting services throughout the United States. These services include program management, engineering, construction, maintenance and installation services for telecommunications providers, 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 as contemplated by the 1995 Private Securities Litigation Reform Act. These statements include statements related to the outlook for the quarter ending January 26, 2019 and fiscal 2019 found under the “Outlook” and “Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures” sections of this release. Forward looking statements are based on management’s current expectations, estimates and projections. These statements are subject to risks and uncertainties that may cause actual results for completed periods and periods in the future to differ materially from the results projected or implied in any forward-looking statements contained in this press release. The most significant of these risks and uncertainties are described in the Company’s Transition Report on Form 10-K, Form 10-Qs and Form 8-K reports (including all amendments to those reports) and include business and economic conditions and trends in the telecommunications industry affecting the Company’s customers, customer capital budgets and spending priorities, 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, preliminary purchase price allocations of acquired businesses, expected benefits and synergies of acquisitions, the future impact of any acquisitions or dispositions, adjustments and cancellations related to the Company’s backlog, weather conditions, the anticipated outcome of other contingent events, including litigation, liquidity and
other financial needs, the availability of financing, and the 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 to update forward-looking statements.
---Tables Follow---
|
| | | | | | | |
| DYCOM INDUSTRIES, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (Dollars in thousands) |
| Unaudited |
| | | | |
| | October 27, 2018 | | January 27, 2018 |
| ASSETS | | | |
| Current assets: | | | |
| Cash and equivalents | $ | 21,513 |
| | $ | 84,029 |
|
| Accounts receivable, net (a) | 849,769 |
| | 318,684 |
|
| Contract assets (a) | 147,320 |
| | 369,472 |
|
| Inventories | 90,819 |
| | 79,039 |
|
| Income tax receivable | 5,496 |
| | 13,852 |
|
| Other current assets | 34,010 |
| | 39,710 |
|
| Total current assets | 1,148,927 |
| | 904,786 |
|
| | | | |
| Property and equipment, net | 428,305 |
| | 414,768 |
|
| Goodwill and other intangible assets, net | 492,299 |
| | 493,212 |
|
| Other | 63,681 |
| | 28,190 |
|
| Total non-current assets | 984,285 |
| | 936,170 |
|
| Total assets | $ | 2,133,212 |
| | $ | 1,840,956 |
|
| | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
| Current liabilities: | | | |
| Accounts payable | $ | 134,702 |
| | $ | 92,361 |
|
| Current portion of debt | — |
| | 26,469 |
|
| Contract liabilities | 7,631 |
| | 6,480 |
|
| Accrued insurance claims | 41,579 |
| | 53,890 |
|
| Income taxes payable | 668 |
| | 755 |
|
| Other accrued liabilities | 119,464 |
| | 79,657 |
|
| Total current liabilities | 304,044 |
| | 259,612 |
|
| | | | |
| Long-term debt | 867,835 |
| | 733,843 |
|
| Accrued insurance claims | 65,981 |
| | 59,385 |
|
| Deferred tax liabilities, net non-current | 72,580 |
| | 57,428 |
|
| Other liabilities | 5,914 |
| | 5,692 |
|
| Total liabilities | 1,316,354 |
| | 1,115,960 |
|
| | | | |
| Total stockholders’ equity | 816,858 |
| | 724,996 |
|
| Total liabilities and stockholders’ equity | $ | 2,133,212 |
| | $ | 1,840,956 |
|
| | | | |
(a) The Company adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) effective January 28, 2018, the first day of fiscal 2019. The adoption of ASU 2014-09 resulted in balance sheet classification changes for amounts that have not been invoiced to customers but for which the Company has satisfied the performance obligation and has an unconditional right to receive payment. Prior to adoption, amounts not invoiced to customers were included in the Company’s contract asset, historically referred to as Costs and Estimated Earnings in Excess of Billings, regardless of rights to payment. Under ASU 2014-09, these amounts of unbilled receivables are included in accounts receivable, net. As of January 28, 2018, the date of adoption, the Company reclassified $311.7 million of unbilled receivables from contract assets to accounts receivable, net. Upon reclassification, accounts receivable, net and contract assets were $630.4 million and $57.8 million, respectively, as of January 28, 2018. |
|
| | | | | | | | | | | | | | | |
| 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 27, 2018 | | October 28, 2017 | | October 27, 2018 | | October 28, 2017 |
| Contract revenues | $ | 848,237 |
| | $ | 756,215 |
| | $ | 2,379,081 |
| | $ | 2,322,741 |
|
| | | | | | | | |
| Costs of earned revenues, excluding depreciation and amortization | 687,164 |
| | 600,847 |
| | 1,929,113 |
| | 1,829,220 |
|
| General and administrative expenses (a) | 68,763 |
| | 64,562 |
| | 195,601 |
| | 185,398 |
|
| Depreciation and amortization | 45,533 |
| | 42,651 |
| | 133,694 |
| | 120,306 |
|
| Total | 801,460 |
| | 708,060 |
| | 2,258,408 |
| | 2,134,924 |
|
| | | | | | | | |
| Interest expense, net (b) | (11,310 | ) | | (9,707 | ) | | (31,922 | ) | | (28,824 | ) |
| Other income, net | 2,817 |
| | 5,931 |
| | 14,686 |
| | 16,767 |
|
| Income before income taxes | 38,284 |
| | 44,379 |
| | 103,437 |
| | 175,760 |
|
| | | | | | | | |
| Provision for income taxes | 10,454 |
| | 15,603 |
| | 28,476 |
| | 64,480 |
|
| | | | | | | | |
| Net income | $ | 27,830 |
| | $ | 28,776 |
| | $ | 74,961 |
| | $ | 111,280 |
|
| | | | | | | | |
| Earnings per common share: | | | | | | | |
| | | | | | | | |
| Basic earnings per common share | $ | 0.89 |
| | $ | 0.93 |
| | $ | 2.40 |
| | $ | 3.57 |
|
| | | | | | | | |
| Diluted earnings per common share | $ | 0.87 |
| | $ | 0.90 |
| | $ | 2.34 |
| | $ | 3.50 |
|
| | | | | | | | |
| | | | | | | | |
| Shares used in computing earnings per common share: | | | | |
| Basic | 31,246,591 |
| | 31,061,448 |
| | 31,214,172 |
| | 31,167,753 |
|
| | | | | | | | |
| Diluted (c) | 31,834,542 |
| | 31,891,574 |
| | 32,065,229 |
| | 31,822,106 |
|
| | | | | | | | |
| (a) Includes stock-based compensation expense of $7.4 million for each of the quarters ended October 27, 2018 and October 28, 2017 and $18.3 million and $17.2 million for the nine months ended October 27, 2018 and October 28, 2017, respectively. |
| (b) Includes pre-tax interest expense for non-cash amortization of the debt discount associated with the Notes of approximately $4.8 million and $4.5 million for the quarters ended October 27, 2018 and October 28, 2017, respectively, and approximately $14.2 million and $13.5 million for the nine months ended October 27, 2018 and October 28, 2017, respectively. |
| (c) During the first and second quarters of fiscal 2019, the Company’s average stock price exceeded the $96.89 conversion price of its Notes. As a result, diluted shares used in computing diluted earnings per common share for the nine months ended October 27, 2018 include approximately 0.2 million weighted shares of potential dilution from the embedded conversion feature in the Notes. |
|
| | | | | | | | | | | | | | | | | | | | | |
| 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 |
| | | | | | | | | | | | |
| | Contract Revenues - GAAP | | Revenues from acquired businesses (a) | | Revenues from storm restoration services | | Non-GAAP - Organic Contract Revenues | | GAAP - Growth % | | Non-GAAP - Organic Growth % |
| Quarter Ended October 27, 2018 | $ | 848,237 |
| | $ | (8,754 | ) | | $ | (3,870 | ) | | $ | 835,613 |
| | 12.2 | % | | 12.9 | % |
| | | | | | | | | | | | |
| Quarter Ended October 28, 2017 | $ | 756,215 |
| | $ | — |
| | $ | (15,939 | ) | | $ | 740,276 |
| | | | |
| | | | | | | | | | | | |
| Nine Months Ended October 27, 2018 | $ | 2,379,081 |
| | $ | (54,253 | ) | | $ | (22,478 | ) | | $ | 2,302,350 |
| | 2.4 | % | | 0.8 | % |
| | | | | | | | | | | | |
| Nine Months Ended October 28, 2017 | $ | 2,322,741 |
| | $ | (23,886 | ) | | $ | (15,484 | ) | | $ | 2,283,371 |
| | | | |
| | | | | | | | | | | | |
| (a) Amounts for the quarters and nine months ended October 27, 2018 and October 28, 2017 represent contract revenues from acquired businesses that were not owned for the full period in both the current and comparable prior periods, including any contract revenues from storm restoration services for these acquired businesses. |
|
| | | | | | | | | | | | | | | |
| NON-GAAP ADJUSTED EBITDA | | | | | | | |
| | | | | | | | |
| | Quarter | | Quarter | | Nine Months | | Nine Months |
| | Ended | | Ended | | Ended | | Ended |
| | October 27, 2018 | | October 28, 2017 | | October 27, 2018 | | October 28, 2017 |
| Reconciliation of net income to Non-GAAP Adjusted EBITDA: | | | | | | | |
| Net income | $ | 27,830 |
| | $ | 28,776 |
| | $ | 74,961 |
| | $ | 111,280 |
|
| Interest expense, net | 11,310 |
| | 9,707 |
| | 31,922 |
| | 28,824 |
|
| Provision for income taxes | 10,454 |
| | 15,603 |
| | 28,476 |
| | 64,480 |
|
| Depreciation and amortization | 45,533 |
| | 42,651 |
| | 133,694 |
| | 120,306 |
|
| Earnings Before Interest, Taxes, Depreciation & Amortization (“EBITDA”) | 95,127 |
| | 96,737 |
| | 269,053 |
| | 324,890 |
|
| Gain on sale of fixed assets | (3,874 | ) | | (6,495 | ) | | (17,198 | ) | | (18,189 | ) |
| Stock-based compensation expense | 7,366 |
| | 7,380 |
| | 18,277 |
| | 17,169 |
|
| Non-GAAP Adjusted EBITDA | $ | 98,619 |
| | $ | 97,622 |
| | $ | 270,132 |
| | $ | 323,870 |
|
| | | | | | | | |
| Contract revenues | $ | 848,237 |
| | $ | 756,215 |
| | $ | 2,379,081 |
| | $ | 2,322,741 |
|
| Non-GAAP Adjusted EBITDA % of contract revenues | 11.6 | % | | 12.9 | % | | 11.4 | % | | 13.9 | % |
|
| | | | | | | | | | | | | | | |
| DYCOM INDUSTRIES, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO COMPARABLE GAAP FINANCIAL MEASURES (CONTINUED) |
| (Dollars in thousands, except share amounts) |
| Unaudited |
| | | | | | | | |
| NET INCOME, NON-GAAP ADJUSTED NET INCOME, DILUTED EARNINGS PER COMMON SHARE, NON-GAAP ADJUSTED DILUTED EARNINGS PER COMMON SHARE, AND NON-GAAP ADJUSTED DILUTED SHARES |
| | | | | | | | |
| | Quarter | | Quarter | | Nine Months | | Nine Months |
| | Ended | | Ended | | Ended | | Ended |
| | October 27, 2018 | | October 28, 2017 | | October 27, 2018 | | October 28, 2017 |
| Reconciliation of Non-GAAP Adjusted Net Income: | | | | | | | |
| Net income | $ | 27,830 |
| | $ | 28,776 |
| | $ | 74,961 |
| | $ | 111,280 |
|
| | | | | | | | |
| Adjustments: | | | | | | | |
| Pre-tax non-cash amortization of debt discount on Notes | 4,800 |
| | 4,547 |
| | 14,223 |
| | 13,471 |
|
| Tax impact of non-cash amortization of debt discount on Notes | (1,321 | ) | | (1,728 | ) | | (3,911 | ) | | (5,047 | ) |
| Total adjustments, net of tax | 3,479 |
| | 2,819 |
| | 10,312 |
| | 8,424 |
|
| | | | | | | | |
| Non-GAAP Adjusted Net Income | $ | 31,309 |
| | $ | 31,595 |
| | $ | 85,273 |
| | $ | 119,704 |
|
| | | | | | | | |
| Reconciliation of Non-GAAP Adjusted Diluted Earnings per Common Share: | | | | | | | |
| Diluted earnings per common share - GAAP | $ | 0.87 |
| | $ | 0.90 |
| | $ | 2.34 |
| | $ | 3.50 |
|
| Total adjustments, net of tax and dilutive share effect of Notes (a) | 0.11 |
| | 0.09 |
| | 0.34 |
| | 0.26 |
|
| Non-GAAP Adjusted Diluted Earnings per Common Share | $ | 0.98 |
| | $ | 0.99 |
| | $ | 2.68 |
| | $ | 3.76 |
|
| | | | | | | | |
| Shares used in computing Non-GAAP Adjusted Diluted Earnings per Common Share: | | | | | | | |
| Diluted shares - GAAP | 31,834,542 |
| | 31,891,574 |
| | 32,065,229 |
| | 31,822,106 |
|
| Adjustment for economic benefit of note hedge related to Notes (a) | — |
| | — |
| | (245,065 | ) | | — |
|
| Non-GAAP Adjusted Diluted Shares (a) | 31,834,542 |
| | 31,891,574 |
| | 31,820,164 |
| | 31,822,106 |
|
| | | | | | | | |
| (a) The Company has a note hedge in effect to offset the economic dilution of additional shares from the Notes up to an average quarterly share price of $130.43 per share. Non-GAAP Adjusted Diluted Shares exclude the GAAP dilutive share effect of the Notes. |
| |
| Amounts in table above may not add due to rounding. |
|
| | | | | |
| DYCOM INDUSTRIES, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO COMPARABLE GAAP FINANCIAL MEASURES (CONTINUED) |
| Unaudited |
| |
| OUTLOOK - DILUTED EARNINGS PER COMMON SHARE AND NON-GAAP ADJUSTED DILUTED EARNINGS PER COMMON SHARE |
| | | | |
| | Quarter Ending | | |
| | January 26, 2019 (a) | | Fiscal 2019 (a) |
| | | | |
| GAAP Diluted Earnings (Loss) per common share (b) | $(0.09) - $0.13 |
| | $2.25 - $2.47 |
|
| | | | |
| Adjustment | | | |
| Addback of after-tax non-cash amortization of debt discount and dilutive share effect of Notes (c)(d) | 0.11 |
| | 0.45 |
|
| | | | |
| Non-GAAP Adjusted Diluted Earnings per Common Share | $0.02 - $0.24 |
| | $2.70 - $2.92 |
|
| | | | |
| Diluted shares (in millions) (b)(d) | 31.8 |
| | 32.0 |
|
| Adjustment for economic benefit of note hedge related to Notes (in millions) (d) | — |
| | (0.2 | ) |
| Non-GAAP Adjusted Diluted Shares (in millions) (d) | 31.8 |
| | 31.8 |
|
| | | | |
| (a) The tax effects of future vestings and exercises of share-based awards are excluded from both GAAP Diluted Earnings (Loss) per common share and Non-GAAP Adjusted Diluted Earnings per Common Share in the outlook table above. |
| (b) GAAP Loss per common share at the low end of the outlook range for the quarter ending January 26, 2019 is calculated using 31.3 million shares, which excludes common stock equivalents related to share-based awards as their effect would be anti-dilutive. |
| (c) The Company expects to recognize approximately $4.9 million and $19.1 million in pre-tax interest expense during the quarter ending January 26, 2019 and fiscal 2019, respectively, for the non-cash amortization of the debt discount associated with the Notes. The addback for fiscal 2019 also includes approximately $0.01 per share for the Non-GAAP impact of the dilutive share effect of the Notes. |
| (d) Actual GAAP diluted shares will include any dilutive effect of the Notes based on the average share price during the respective period. The Company has a note hedge in effect to offset the economic dilution of additional shares from the Notes up to an average quarterly price of $130.43 per share. Accordingly, for Non-GAAP Adjusted Diluted Earnings per Common Share calculations, the Company expects to present results per share that exclude the dilutive effect of the Notes, if any, based on the expected effect of the note hedge. |
| |
| Amounts in table above may not add due to rounding. |
|
| | | | | | | |
| DYCOM INDUSTRIES, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO COMPARABLE GAAP FINANCIAL MEASURES (CONTINUED) |
| (Dollars in millions) |
| Unaudited |
| |
| RECONCILIATION OF NET INCOME TO NON-GAAP ADJUSTED EBITDA BASED ON THE MIDPOINT OF EARNINGS PER COMMON SHARE (“EPS”) GUIDANCE |
| |
| | Quarter Ending | | |
| | January 26, 2019 | | Fiscal 2019 |
| | | | |
| | (at midpoint of EPS guidance) |
| Net income | $ | 1 |
| | $ | 76 |
|
| Interest expense, net | 13 |
| | 44 |
|
| Provision for income taxes | 0.2 |
| | 29 |
|
| Depreciation and amortization | 46 |
| | 180 |
|
| Earnings Before Interest, Taxes, Depreciation & Amortization (“EBITDA”) | 59 |
| | 328 |
|
| Gain on sale of fixed assets | (1 | ) | | (18 | ) |
| Stock-based compensation expense | 5 |
| | 24 |
|
| Non-GAAP Adjusted EBITDA | $ | 63 |
| | $ | 334 |
|
| | | | |
| Contract revenues (at midpoint of guidance) | $ | 720 |
| | $ | 3,099 |
|
| Non-GAAP Adjusted EBITDA % of contract revenues (at midpoint of guidance) | 8.8 | % | | 10.8 | % |
| |
| |
|
| Amounts in table above may not add due to rounding. | | | |
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 in this release as follows:
| |
| • | Non-GAAP Organic Contract Revenues - contract revenues from businesses that are included for the entire period in both the current and comparable prior periods, excluding contract revenues from storm restoration services. Non-GAAP Organic Contract Revenue growth is calculated as the percentage change in Non-GAAP Organic Contract Revenues over those of the comparable prior year periods. Management believes organic growth is a helpful measure for comparing the Company’s revenue performance with prior periods. |
| |
| • | 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. |
| |
| • | Non-GAAP Adjusted Net Income - GAAP net income before the non-cash amortization of the debt discount and the related tax impact, certain tax impacts resulting from vesting and exercise of share-based awards, and certain non-recurring items. |
| |
| • | Non-GAAP Adjusted Diluted Earnings per Common Share and Non-GAAP Adjusted Diluted Shares - Non-GAAP Adjusted Net Income divided by Non-GAAP Adjusted Diluted Shares outstanding. The Company has a note hedge in effect to offset the economic dilution of additional shares from the Notes up to an average quarterly share price of $130.43. The measure of Non-GAAP Adjusted Diluted shares used in computing Non-GAAP Adjusted Diluted Earnings per Common Share excludes dilution from the Notes. Management believes that the calculation of Non-GAAP Adjusted Diluted shares to reflect the note hedge will be useful to investors because it provides insight into the offsetting economic effect of the hedge against potential conversion of the Notes. |
Management excludes or adjusts each of the items identified below from Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Diluted Earnings per Common Share:
| |
| • | Non-cash amortization of the debt discount - The Company’s Notes were allocated between debt and equity components. The difference between the principal amount and the carrying amount of the liability component of the Notes represents a debt discount. The debt discount is being amortized over the term of the Notes but does not result in periodic cash interest payments. The Company has excluded the non-cash amortization of the debt discount from its Non-GAAP financial measures because it believes it is useful to analyze the component of interest expense for the Notes that will be paid in cash. The exclusion of the non-cash amortization from the Company’s Non-GAAP financial measures provides management with a consistent measure for assessing financial results. |
| |
| • | Tax impact of excess tax benefits or deficiencies - The Company excludes certain tax impacts resulting from vesting and exercise of share-based awards as these amounts may vary significantly from period to period. Excluding these amounts from the Company’s Non-GAAP financial measures provides management with a more consistent measure for assessing financial results. |
| |
| • | Tax impact of adjusted results - The tax impact of adjusted results reflects the Company’s effective tax rate used for financial planning for the applicable period. |
