Dycom: Local Credibility, National Capability Operating Subsidiaries

The following excerpt is from the company's SEC filing.
11 Well Established Customers Q4 2021 Organic Growth (Decline): (6.2)% (15.5)% 25.3% Total Customers Top 5 Customers All Other Customers 28.8% Comcast Top 5 customers represented 69.4% and 77.2% of contract revenues in Q4 2021 and Q4 2020, respectively Fiber construction revenue from electrical utilities increased organically 125% year-over-year and was $44.1 million, or 5.9% of contract revenues, in Q4 2021 Q4 2021 % of contract revenues from customers #6 through #10: 2.8% 2.5% 2.5% 1.2% 1.0% Frontier Customer #7 Charter Dominion Energy Ziply Fiber
Durable Customer Relationships 12 $ Millions 26% 23% 22% 22% 26% 74% 77% 78% 78% 74% $2,954 $2,978 $3,128 $3,340 $3,199 $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 2017 2018 2019 2020 2021 C u st o m e r C o n tr a ct R e ve n u e s Trailing Twelve Months Ended January2 Top 5 Customers All Other Customers $- $100 $200 $300 $400 $500 $600 $700 $800 $900 2017 2018 2019 2020 2021 C u st o m e r C o n tr a ct R e ve n u e s Trailing Twelve Months Ended January2 Verizon Lumen Technologies AT&T Comcast Windstream Charter
Anchored by Long-Term Agreements 13 Dycom is party to hundreds of MSA’s and other agreements with customers that extend for periods of one or more years Generally multiple agreements maintained with each customer Master Service Agreements (MSA’s) are multi-year, multi-million dollar arrangements covering thousands of individual work orders generally with exclusive requirements; majority of contracts are based on units of delivery Backlog at $6.810 billion as of Q4 2021 Revenue by Contract Type for Fiscal 2021 $2.723 $2.639 $2.524 $2.716 $2.512 $2.455 $2.339 $2.787 $7.051 $6.691 $6.349 $7.314 $6.442 $6.441 $5.412 $6.810 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 $ B il li o n s Backlog3 Next 12 month backlog 71.7% 18.3% 10.0% Master Service Agreements Long-term contracts Short-term contracts
Cap-Ex, net $1,053 Business Acquisitions $618 Share Repurchases $540 Cash on Hand, $96 Cash Flow from Operations $1,684 Other Cash Flow $431 Sources of Cash Uses of Cash 10+ Years of Robust Cash Flow Generation 14 Fiscal 2011 – Fiscal 2021 Robust cash flow generation and prudent capital allocation provide strong foundation for returns Strong operating cash flow of $1.684 billion over 10+ years Prudent approach to capital allocation: $540 million invested in share repurchases $618 million invested in business acquisitions $1,053 million in cap-ex, net of disposals $2,211 $2,211
Financial Update
Financial Overview 16 Strong market opportunities Solid financial profile Strong liquidity of $570.5 million at Q4 2021 Reduced notional net debt by $276.4 million during Fiscal 2021 Contract revenues of $3.199 billion for Fiscal 2021, compared to $3.340 billion for Fiscal 2020 Non-GAAP Adjusted EBITDA for Fiscal 2021 of $311.0 million, or 9.7% of contract revenues, compared to $310.0 million, or 9.3% of contract revenues, for Fiscal 2020 Non-GAAP Adjusted Diluted Earnings per Common Share of $2.54 for Fiscal 2021, compared to $2.27 for Fiscal 2020
$3,067 $2,978 $3,128 $3,340 $3,199 FY 2017 4 Qtrs Ended Jan 2018 FY 2019 FY 2020 FY 2021 $ M il li o n s 2 $442 $383 $330 $310 $311 14.4% 12.9% 10.5% 9.3% 9.7% FY 2017 4 Qtrs Ended Jan 2018 FY 2019 FY 2020 FY 2021 Non-GAAP Adjusted EBITDA Non-GAAP Adjusted EBITDA Non-GAAP Adjusted EBITDA % $ M il li o n s 2 14.1% (0.2)% 3.6% 8.3% (6.1)% FY 2017 4 Qtrs Ended Jan 2018 FY 2019 FY 2020 FY 2021 Annual Trends 17 Growth in Contract Revenues Non-GAAP Organic Growth (Decline) %1 Non-GAAP Adjusted Diluted EPS 2 $5.26 $3.88 $2.78 $2.27 $2.54 FY 2017 4 Qtrs Ended Jan 2018 FY 2019 FY 2020 FY 2021 2
$834 $884 $884 $738 $814 $824 $810 $751 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 $ M il li o n s Quarterly Trends 18 Contract Revenues Non-GAAP Adjusted EBITDA $74 $100 $92 $45 $70 $103 $93 $46 8.8% 11.3% 10.4% 6.0% 8.6% 12.5% 11.5% 6.1% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Non-GAAP Adjusted EBITDA Non-GAAP Adjusted EBITDA % $ M il li o n s
Debt Summary Q3 2021 Q4 2021 $ Millions 0.75% Convertible Senior Notes, mature Sept 2021: $ 58.3 $ 58.3 Senior Credit Facility, matures Oct 2023: 4 Term Loan Facility 427.5 421.9 Revolving Facility 85.0 105.0 Total Notional Amount of Debt $ 570.8 $ 585.1 Less: Cash and Equivalents 12.0 11.8 Notional Net Debt 7 $ 558.7 $ 573.4 Cash Flow Summary Q4 2020 Q4 2021 $ Millions Cash provided by (used in) operating activities $ 191.8 $ 102.4 Capital expenditures, net of disposals $ (15.8) $ (20.4) (Repayments) Borrowings on Senior Credit Facility $ (108.6) $ 14.4 Repurchase of common stock $ - $ (100.0) Other financing & investing activities, net $ (0.4) $ 0.1 Total Days Sales Outstanding ("DSO") 6 130 136 ($276.4) Liquidity Overview 19 Repurchased 1,324,381 common shares for $100 million, at an average price of $75.51 per share during Q4 2021 Reduced notional net debt by $276.4 million during Fiscal 2021 Strong liquidity5 of $570.5 million at Q4 2021 Robust operating cash flows of $102.4 million during Q4 2021 and $381.8 million during fiscal 2021 from prudent working capital management Capital expenditures, net of disposals for fiscal 2022 anticipated at $150 - $160 million 7 7 7
Capital Allocated to Maximize Returns 20 Focus on organic growth opportunities through strategic capital investments in the business Dycom is committed to maximizing long term returns through prudent capital allocation Repurchased 25.2 million shares for approximately $758 million from fiscal 2006 through fiscal 2021 $150.0 million authorization available for share repurchases through August 2022 Invest in Organic Growth Shares Repurchases Pursue Complementary Acquisitions Selectively acquire businesses that complement our existing footprint and enhance our customer relationships Acquisitions have further strengthened Dycom’s customer base, geographic scope, and technical service offerings
21 Questions and Answers
Outlook 22 For Q1 2022, as compared sequentially to Q4 2021, the Company expects contract revenues to range from in-line to modestly lower and Non-GAAP Adjusted EBITDA as a percentage of contract revenues to range from in-line to modestly higher The Company believes that, in addition to other factors, the impact of the COVID-19 pandemic on its operating results, cash flows and financial condition is uncertain, unpredictable and could affect its ability to achieve these expected financial results This slide was used on March 3, 2021 in connection with the Company’s conference call for its fiscal 2021 fourth quarter results. This information is provided for your reference only and should not be interpreted as a reiteration of these projections by the Company at any time after the date originally provided. Reference is made to slide 2 titled “Important Information” with respect to these slides. The information and statements contained in this slide that are forward-looking are based on information that was available at the time the slide was initially prepared and/or management’s good faith belief at that time with respect to future events. Except as required by law, the Company may not update forward-looking statements even though its situation may change in the future. For a full copy of the conference call materials, including the conference call transcript, see the Company’s Form 8-Ks filed with the Securities and Exchange Commission on March 3, 2021 and March 4, 2021.
Notes 1) Organic growth (decline) % adjusted for revenues from acquired businesses, storm restoration services, and for the additional week of operations during the fourth quarter as a result of the Company’s 52/53 week fiscal year, when applicable. 2) Due to the change in the Company’s fiscal year end, the Company’s fiscal 2018 six month transition period consisted of Q1 2018 and Q2 2018. For comparative purposes all amounts provided are for 4 Quarters Ended January. 3) The Company’s backlog represents an estimate of services to be performed pursuant to master service agreements and other contractual agreements over the terms of those contracts. These estimates are based on contract terms and evaluations regarding the timing of the services to be provided. In the case of master service agreements, backlog is estimated based on the work performed in the preceding 12 month period, when available. When estimating backlog for newly initiated master service agreements and other long and short-term contracts, the Company also considers the anticipated scope of the contract and information received from the customer during the procurement process. A significant majority of the Company’s backlog comprises services under master service agreements and other long-term contracts. Backlog is not a measure defined by United States generally accepted accounting principles (“GAAP”) and should be considered in addition to, but not as a substitute for, GAAP results. Participants in the Company’s industry often disclose a calculation of their backlog; however, the Company’s methodology for determining backlog may not be comparable to the methodologies used by others. Dycom utilizes the calculation of backlog to assist in measuring aggregate awards under existing contractual relationships with its customers. The Company believes its backlog disclosures will assist investors in better understanding this estimate of the services to be performed pursuant to awards by its customers under existing contractual relationships. 4) As of both January 30, 2021 and October 24, 2020 , the Company had $52.2 million of standby letters of credit outstanding under the Senior Credit Facility. 5) Liquidity represents the sum of the Company’s availability on its revolving facility as defined by the Company’s Senior Credit Facility and available cash and equivalents. 6) DSO is calculated as the summation of current and non-current accounts receivable (including unbilled receivables), net of allowance for doubtful accounts, plus current contract assets, less contract liabilities (formerly referred to as billings in excess of costs and estimated earnings) divided by average revenue per day during the respective quarter. Long-term contract assets are excluded from the calculation of DSO, as these amounts represent payments made to customers pursuant to long-term agreements and are recognized as a reduction of contract revenues over the period for which the related services are provided to the customers. 7) Notional net debt as of Q4 2020, Q1 2021, and Q2 2021 consisted of the following: 23 Debt Summary Q4 2020 Q1 2021 Q2 2021 $ Millions 0.75% Convertible Senior Notes, mature Sept 2021: $ 460.0 $ 293.0 $ 58.3 Senior Credit Facility, matures Oct 2023: 4 Term Loan Facility 444.4 438.8 433.1 Revolving Facility - 675.0 200.0 Total Notional Amount of Debt $ 904.4 $ 1,406.7 $ 691.4 Less: Cash and Equivalents 54.6 643.9 22.5 Notional Net Debt $ 849.8 $ 762.9 $ 668.9

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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