GlobeNewswire Inc | Nov 23, 2021 06:00AM EST

November 23, 2021

PALM BEACH GARDENS, Fla., Nov. 23, 2021 (GLOBE NEWSWIRE) -- Dycom Industries, Inc. (NYSE: DY) announced today its results for the third quarter and nine months ended October30,2021.

Third Quarter Fiscal 2022 Highlights

-- Contract revenues of $854.0million for the quarter ended October30,2021, compared to $810.3million for the quarter ended October24,2020. Contract revenues increased 6.6% on an organic basis after excluding $8.9million in contract revenues from storm restoration services for the quarter ended October24,2020. -- Non-GAAP Adjusted EBITDA of $83.1million, or 9.7% of contract revenues, for the quarter ended October30,2021, compared to $92.8million, or 11.5% of contract revenues, for the quarter ended October24,2020. -- On a GAAP basis, net income was $28.7million, or $0.94 per common share diluted, for the quarter ended October30,2021, compared to $33.9million, or $1.05 per common share diluted, for the quarter ended October24,2020. Non-GAAP Adjusted Net Income was $29.0million, or $0.95 per common share diluted, for the quarter ended October30,2021, compared to $34.4million, or $1.06 per common share diluted, for the quarter ended October24,2020. GAAP net income and Non-GAAP Adjusted Net Income for the quarter ended October 30, 2021 includes approximately $3.0million, or $0.10 per common share diluted, of incremental tax benefits for credits related to tax filings for prior periods. -- The Company repaid the aggregate principal of $58.3 million to satisfy and discharge the indenture governing the 0.75%convertible senior notes (the 2021 Convertible Notes) at maturity in September2021. -- As of October30,2021, the Company had cash and equivalents of $263.7million, no outstanding borrowings on its revolving line of credit, $350.0million principal amount of term loan outstanding, and $500.0 million aggregate principal amount of 4.50% senior notes due April 2029 (the 2029 Notes) outstanding.

Year-to-Date Fiscal 2022 Highlights

-- Contract revenues of $2.369billion for the nine months ended October30,2021, compared to $2.449billion for the nine months ended October24,2020. Contract revenues decreased 3.1%on an organic basis after excluding $3.9million and $8.9million in contract revenues from storm restoration services for the nine months ended October30,2021 and October24,2020, respectively. -- Non-GAAP Adjusted EBITDA of $201.0million, or 8.5% of contract revenues, for the nine months ended October30,2021, compared to $265.3million, or 10.8% of contract revenues, for the nine months ended October24,2020. -- On a GAAP basis, net income was $47.8million, or $1.54 per common share diluted, for the nine months ended October30,2021, compared to $38.5million, or $1.20 per common share diluted, for the nine months ended October24,2020. Non-GAAP Adjusted Net Income was $46.2million, or $1.50 per common share diluted, for the nine months ended October30,2021, compared to $83.7million, or $2.61 per common share diluted, for the nine months ended October24,2020. -- During the nine months ended October30,2021, the Company issued $500.0 million in aggregate principal amount of 2029 Notes, amended its senior credit facility to extend the maturity to April 2026 and resize capacity, and, with a portion of the net proceeds from the 2029Notes offering and available cash, repaid $105.0million of revolver borrowings and $71.9million of term loan borrowings. Additionally, the Company repaid the aggregate principal of $58.3 million to satisfy and discharge the indenture governing the 2021 Convertible Notes at maturity in September2021.

Outlook

The Company expects contract revenues for the quarter ending January 29, 2022 to increase modestly from Non-GAAP Organic Contract Revenues of $691.8 million for the quarter ended January 30, 2021. Non-GAAP Organic Contract Revenues for the quarter ended January 30, 2021 excluded $5.7 million in contract revenues from storm restoration services and $53.2 million for the additional week of operations as a result of the Companys 52/53 week fiscal year. Non-GAAP Adjusted EBITDA is expected to range from in-line to modestly higher as a percentage of contract revenues for the quarter ending January29, 2022 as compared to the quarter ended January 30, 2021. For additional information regarding the Companys outlook, please see the presentation materials available on the Companys 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 2022 third quarter results onTuesday,November 23,2021at9:00 a.m. Eastern time. A live webcast of the conference call and related materials will be available on the Companys Investor Center website at https://ir.dycomind.com. Parties interested in participating via telephone should dial (833) 519-1313 (United States) or (914)800-3879 (International) with the conference ID 9597111, ten minutes before the conference call begins. For those who cannot participate at the scheduled time, a replay of the live webcast and the related materials will be available at https://ir.dycomind.comfor 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 as contemplated by the 1995 Private Securities Litigation Reform Act. Thesestatements include those related to the outlook for the quarter ending January 29, 2022 found under the Outlook section of this release. These statements are subject to change. Forward-looking statements are based on managements 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 Companys Form 10-K, Form 10-Q, and Form 8-K reports (including all amendments to those reports) and include the duration and severity of a pandemic caused by COVID-19, our ability to comply with various COVID-19 legal and contractual requirements and the impacts that those requirements may have on our workforce and our ability to perform our work, vaccination rates in the areas where we operate, any worsening of the pandemic caused by increasing infection rates triggered by new variants, 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 Companys insurance and other reserves and allowances for doubtful accounts, whether the carrying value of the Companys assets may be impaired, the future impact of any acquisitions or dispositions, adjustments and cancellations of the Companys projects, the related impact to the Companys backlog from project cancellations, weather conditions, the anticipated outcome of other contingent events, including litigation, liquidity and other financial needs, the availability of financing, the Companys ability to generate sufficient cash to service its indebtedness, restrictions imposed by the Companys credit agreement, and the other risks and uncertainties detailed from time to time in the Companys filings with the Securities and Exchange Commission. The Company does not undertake any obligation to update forward-looking statements.

For more information, contact:Callie Tomasso, Investor RelationsEmail: investorrelations@dycomind.comPhone: (561) 627-7171

--Tables Follow--



DYCOM INDUSTRIES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(Dollars in thousands)Unaudited October 30, 2021 January 30, 2021ASSETS Current assets: Cash and equivalents $ 263,701 $ 11,770 Accounts receivable, net 959,741 858,123 Contract assets 110,685 197,110 Inventories 69,876 70,849 Income tax receivable 7,502 1,706 Other current assets 37,498 29,072 Total current assets 1,449,003 1,168,630 Property and equipment, net 284,246 273,960 Operating lease right-of-use assets 61,993 63,179 Goodwill and other intangible assets, net 378,349 391,807 Other assets 31,104 46,589 Total assets $ 2,204,695 $ 1,944,165 LIABILITIES AND STOCKHOLDERS? EQUITY Current liabilities: Accounts payable $ 173,599 $ 158,966 Current portion of debt 13,125 81,722 Contract liabilities 13,943 14,101 Accrued insurance claims 39,933 41,736 Operating lease liabilities 24,614 24,769 Income taxes payable 6 6,387 Other accrued liabilities 127,933 120,809 Total current liabilities 393,153 448,490 Long-term debt 827,226 501,562 Accrued insurance claims - non-current 51,339 70,224 Operating lease liabilities - non-current 37,211 38,359 Deferred tax liabilities, net - non-current 56,362 47,650 Other liabilities 28,630 26,572 Total liabilities 1,393,921 1,132,857 Total stockholders? equity 810,774 811,308 Total liabilities and stockholders? equity $ 2,204,695 $ 1,944,165

DYCOM INDUSTRIES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Dollars in thousands, except share amounts)Unaudited Quarter Quarter Nine Months Nine Months Ended Ended Ended Ended October30,2021 October24,2020 October30,2021 October24,2020Contract $ 853,973 $ 810,256 $ 2,369,038 $ 2,448,500 revenues Costs of earnedrevenues,excluding 705,865 658,355 1,977,243 1,996,514 depreciationandamortizationGeneral andadministrative^ 66,899 62,628 198,640 195,871 1Depreciationand 37,766 42,313 115,307 132,313 amortizationGoodwillimpairment ? ? ? 53,264 charge^2Total 810,530 763,296 2,291,190 2,377,962 Interest (9,132 ) (4,710 ) (24,343 ) (25,020 ) expense, net^3(Loss) gain ondebt ? ? (62 ) 12,046 extinguishment^4Other income, 564 3,708 4,267 7,921 netIncome before 34,875 45,958 57,710 65,485 income taxes Provision for 6,158 12,032 9,930 26,953 income taxes^5 Net income $ 28,717 $ 33,926 $ 47,780 $ 38,532 Earnings per common share: Basic earningsper common $ 0.95 $ 1.06 $ 1.57 $ 1.21 share Dilutedearnings per $ 0.94 $ 1.05 $ 1.54 $ 1.20 common share Shares used in computing earnings per common share: Basic 30,172,254 31,878,583 30,426,337 31,744,199 Diluted 30,614,706 32,425,300 30,928,890 32,106,661

DYCOM INDUSTRIES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURESTO COMPARABLE GAAP FINANCIAL MEASURES(Dollars in thousands)Unaudited

CONTRACT REVENUES, NON-GAAP ORGANIC CONTRACT REVENUES, AND GROWTH (DECLINE) %?s Revenues from Non-GAAP GAAP - Non-GAAP - Contract storm - Organic Organic Organic Revenues - restoration Contract Growth Growth GAAP services Revenues (Decline) (Decline) % %QuarterEnded $ 853,973 $ ? $ 853,973 5.4 % 6.6 %October30, 2021 QuarterEnded $ 810,256 $ (8,894 ) $ 801,362 October24, 2020 NineMonthsEnded $ 2,369,038 $ (3,869 ) $ 2,365,169 (3.2 ) % (3.1 ) %October30, 2021 NineMonthsEnded $ 2,448,500 $ (8,894 ) $ 2,439,606 October24, 2020

NON-GAAP ORGANIC CONTRACT REVENUES FOR COMPARATIVE PURPOSES TO THE Q4 2022OUTLOOK: Contract Revenues from Additional week as a Non-GAAP Revenues - storm result of the - Organic GAAP restoration Company's 52/53 week Contract services fiscal year RevenuesQuarterEndedJanuary $ 750.7 $ (5.7 ) $ (53.2 ) $ 691.8 30, 2021^6

NET INCOME AND NON-GAAP ADJUSTED EBITDA Quarter Quarter Nine Months Nine Months Ended Ended Ended Ended October 30, October 24, October 30, October 24, 2021 2020 2021 2020Reconciliation ofnet income to Non-GAAP AdjustedEBITDA:Net income $ 28,717 $ 33,926 $ 47,780 $ 38,532 Interest expense, 9,132 4,710 24,343 25,020 netProvision for 6,158 12,032 9,930 26,953 income taxesDepreciation and 37,766 42,313 115,307 132,313 amortizationEarnings BeforeInterest, Taxes,Depreciation & 81,773 92,981 197,360 222,818 Amortization("EBITDA")Gain on sale of (415 ) (4,001 ) (4,259 ) (9,207 ) fixed assetsStock-basedcompensation 1,789 3,796 7,838 10,490 expenseLoss (gain) on debt ? ? 62 (12,046 ) extinguishment^4Goodwill impairment ? ? ? 53,264 charge^2Non-GAAP Adjusted $ 83,147 $ 92,776 $ 201,001 $ 265,319 EBITDANon-GAAP AdjustedEBITDA % of 9.7 % 11.5 % 8.5 % 10.8 %contract revenues

DYCOM INDUSTRIES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURESTO COMPARABLE GAAP FINANCIAL MEASURES (CONTINUED)(Dollars in thousands, except share amounts)Unaudited NET INCOME, NON-GAAP ADJUSTED NET INCOME, DILUTED EARNINGS PER COMMON SHARE,AND NON-GAAP ADJUSTED DILUTED EARNINGS PER COMMON SHARE Quarter Quarter Nine Months Nine Months Ended Ended Ended Ended October 30, October 24, October30,2021 October24,2020 2021 2020Reconciliationof net incometo Non-GAAP Adjusted NetIncome:Net income $ 28,717 $ 33,926 $ 47,780 $ 38,532 Pre-Tax Adjustments:Non-cashamortization ofdebt discount 337 643 1,665 6,732 on 2021ConvertibleNotesLoss (gain) ondebt ? ? 62 (12,046 ) extinguishment^4Goodwillimpairment ? ? ? 53,264 charge^2 Tax Adjustments:Tax impact forthe vesting andexercise of (1 ) (33 ) (2,794 ) (241 ) share-basedawardsTax effect fromnet operatingloss carryback ? ? ? (2,631 ) under enactedCARESAct^5Tax impact ofpre-tax (91 ) (177 ) (466 ) 113 adjustmentsTotaladjustments, 245 433 (1,533 ) 45,191 net of tax Non-GAAPAdjusted Net $ 28,962 $ 34,359 $ 46,247 $ 83,723 Income Reconciliationof dilutedearnings percommon share toNon-GAAP AdjustedDilutedEarnings perCommon Share:GAAP dilutedearnings per $ 0.94 $ 1.05 $ 1.54 $ 1.20 common shareTotaladjustments, 0.01 0.01 (0.04 ) 1.41 net of taxNon-GAAPAdjustedDiluted $ 0.95 $ 1.06 $ 1.50 $ 2.61 Earnings perCommon Share Shares used incomputingNon-GAAPAdjusted 30,614,706 32,425,300 30,928,890 32,106,661 DilutedEarnings perCommon Share Amounts in table above may not add due to rounding.

DYCOM INDUSTRIES, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURESTO 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 Companys 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 Companys performance for the period reported with the Companys 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 Companys 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, adjusted for the additional week in the fourth quarter of fiscal 2021, the quarter ended January 30, 2021, as a result of the Companys 52/53 week fiscal year. 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 Companys revenue performance with prior periods. -- Non-GAAPAdjusted 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-GAAPAdjusted EBITDA is a helpful measure for comparing the Companys operating performance with prior periods as well as with the performance of other companies with different capital structures or tax rates. -- Non-GAAPAdjusted 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. Management believes Non-GAAP Adjusted Net Income is a helpful measure for comparing the Companys operating performance with prior periods. -- Non-GAAP Adjusted Diluted Earnings per Common Share - Non-GAAP Adjusted Net Income divided by weighted average diluted shares outstanding.

Management excludes or adjusts each of the items identified below from Non-GAAPAdjusted Net Income and Non-GAAP Adjusted Diluted Earnings per Common Share

-- Non-cash amortization of debt discount on 2021 Convertible Notes - The Companys 2021 Convertible Notes were allocated between debt and equity components. The difference between the principal amount and the carrying amount of the liability component of the 2021Convertible Notes represents a debt discount. The debt discount is amortized over the term of the 2021 Convertible Notes but does not result in periodic cash interest payments. The Company excludes 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 2021Convertible Notes that will be paid in cash. The exclusion of the non-cash amortization from the Companys Non-GAAP financial measures provides management with a consistent measure for assessing financial results. -- Goodwill impairment charge - During the nine months ended October24,2020, the Company incurred a goodwill impairment charge of $53.3million for a reporting unit that performs installation services inside third party premises. Management believes excluding the goodwill impairment charge from the Companys Non-GAAP financial measures assists investors overall understanding of the Companys current financial performance and provides management with a consistent measure for assessing the current and historical financial results. -- Loss (gain) on debt extinguishment - During the nine months ended October30,2021, 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. During the nine months ended October24,2020, the Company recognized a gain on debt extinguishment of $12.0million in connection with its purchase of $401.7million aggregate principal amount of the Companys 2021 Convertible Notes for $371.4million, including interest and fees. Management believes excluding the loss (gain) on debt extinguishment from the Companys Non-GAAP financial measures assists investors overall understanding of the Companys current financial performance and provides management with a consistent measure for assessing the current and historical financial results. -- Tax impact of the vesting and exercise of share-based awards - The Company excludes certain tax impacts resulting from the vesting and exercise of share-based awards as these amounts may vary significantly from period to period. Excluding these amounts from the Companys Non-GAAP financial measures provides management with a more consistent measure for assessing financial results. -- Tax effect from a net operating loss carryback under enacted CARES Act - During the nine months ended October24,2020, the Company recognized an income tax benefit of $2.6million from a net operating loss carryback under the enacted U.S. Coronavirus Aid, Relief, and Economic Security (CARES) Act. The Company excludes this impact because the Company believes it is not indicative of the Companys underlying results or ongoing operations. -- Tax impact of pre-tax adjustments - The tax impact of pre-tax adjustments reflects the Companys estimated tax impact of specific adjustments and the effective tax rate used for financial planning for the applicable period.

Notes



1 Includes stock-based compensation expense of $1.8million and $3.8million for the quarters ended October30,2021 and October24,2020,respectively, and $7.8million and $10.5million for the nine months ended October30,2021 and October24,2020, respectively.

2 The Company incurred a goodwill impairment charge of $53.3 million during the nine months ended October24,2020 for a reporting unit that performs installation services inside third party premises.

3 Includes pre-tax interest expense for non-cash amortization of the debt discount associated with the 2021 Convertible Notes of $0.3million and $0.6million for the quarters ended October30,2021 and October24,2020, respectively, and $1.7million and $6.7million for the nine months ended October30,2021 and October24,2020, respectively.

4 During the nine months ended October30,2021, 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.

During the nine months ended October24,2020, the Company purchased $401.7million aggregate principal amount of its 2021Convertible Notes for $371.4million, including interest and fees. The purchase price was allocated between the debt and equity components of the 2021 Convertible Notes. Based on the net carrying amount of the 2021 Convertible Notes, the Company recognized a net gain on debt extinguishment of $12.0 million after the write-off of associated debt issuance costs. The Company also recognized the equity component of the settlement of the 2021 Convertible Notes.

5 For the quarter and nine months ended October30,2021, the provision for income taxes includes less than $0.1 million and $2.8million, respectively, of income tax benefit for the vesting and exercise of share-based awards. For the quarter and nine months ended October24,2020, the provision for income taxes includes less than $0.1 million and $0.2million, respectively, of income tax benefit for the vesting and exercise of share-based awards. Additionally, for the nine months ended October24,2020, the Company recognized an income tax benefit of $2.6million from a net operating loss carryback under the enacted CARES Act.

6 The Company has a 52/53 week fiscal year. All quarter periods presented contain 13 weeks except for the quarter ended January30,2021, which contained an additional week of operations.