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Dycom Industries, Inc. (DY)
F4Q09 Earnings Call
August 26, 2009 9:00 am ET
Steven E. Nielsen – Chairman of the Board, President & Chief Executive Officer
Timothy R. Estes – Chief Operating Officer & Executive Vice President
H. Andrew DeFerrari – Chief Financial Officer & Senior Vice President
Richard B. Vilsoet – Vice President, General Counsel & Corporate Secretary
Adam Thalhimer – BB&T Capital Markets
Alex Rygiel – FBR Capital Markets & Co.
John Rogers – D. A. Davidson & Co.
Jordan Teramo – Brigade Capital
Analyst for Simon Leopold – Morgan Keegan & Company, Inc.
Alan Mitrani – Sylvan Lake Asset Management
Previous Statements by DY
» Dycom Industries Inc. F1Q10 (Qtr End 10/24/09) Earnings Call Transcript
» Dycom Industries Inc. F2Q09 (Qtr End 01/24/09) Earnings Call Transcript
» Dycom Industries Inc. F1Q09 (Qtr End 25/10/08) Earnings Call Transcript
Steven E. Nielsen
I’d like to thank you for attending our four quarter fiscal 2009 Dycom results conference call. During the call we will be referring to a slide presentation which can be found on our website www.DycomInd.com, under the heading investors and subheading event details. Relevant slides will be identified by number throughout our presentation. Going to Slide One, today we have on the call Tim Estes, our Chief Operating Officer; Drew DeFerrari, our Chief Financial Officer and Rick Vilsoet, our general counsel.
Now, I will turn the call over to Rick Vilsoet.
Richard B. Vilsoet
Turning to Slide Two, except for historical information statements made by company management during this call may be forward-looking and are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations, estimates and projections and involve known and unknown risks and uncertainties which may cause actual results to differ materially from forecasted results.
These risks and uncertainties are more fully described in the company’s filings with the Securities & Exchange Commission. The company does not undertake to update any forward-looking information.
Steven E. Nielsen
Yesterday we issued a press release announcing our fourth quarter results. As you review this release it is important to note the following, during the fourth quarter fiscal 2008 we recorded a non-cash impairment charge resulting from the annual impairment testing of our goodwill as well as a number of FIN 48 tax related items. For clarity and to enable comparability between periods, my comments will be limited to results from continuing operations excluding these items. A reconciliation of the non-GAAP results to our GAAP results for the year ago period has been provided with our press release as well as on Slide 10.
Moving to Slide Three, results of $0.17 per share for the fourth quarter were down from last year’s $0.23 per share result. Revenue increased sequentially by 4.6% to $269.7 million but declined year-over-year by 16.3% for the quarter reflecting customer reductions in near term capital spending plans. Volumes were mixed from telephone companies as some customers deployed capital for new network initiatives at a slowing pace and all customers tightly managed routine capital and maintenance expenditures.
Construction spending by cable customers was slow while installation activity was mixed but increased towards the later part of the quarter. Margins increased sequentially by 100 basis points and improved by 225 basis points year-over-year. Cash flow from operations was strong reflecting stable days sales outstanding and we did not repurchase any of our common stock or senior subordinated notes.
Going to Slide Four, during the quarter we experienced the effects of an overall economy which was not growing. Revenue from AT&T was down sequentially and down year-over-year. At $49.9 million or 18.5% of revenue, AT&T was our largest customer. Revenue from Verizon was $45.9 million. Verizon was Dycom’s second largest customer for the quarter at 17% of revenue. Revenue from Comcast was up sequentially and up year-over-year. Comcast was our third largest customer at $38.2 million or 14.2% of total revenue.
CenturyLink which resulted from the merger of CenturyTel and Embarq was our fourth largest customer with revenues of $19.4 million or 7.2% of total revenue. Revenue from Time Warner Cable was down sequentially and year-over-year reflecting slowing upgrade activity and installation volumes. Time Warner Cable was our fifth largest customer at 6.8% of total revenue. All together, our top five customers represented 63.7% of revenue and were down 16.5% year-over-year. All other customers declined 15.9%.
Now, moving to Slide Five, backlog at the end of the fourth quarter was $935 million versus $1.118 billion at the end of the third quarter, a decrease of approximately $183 million. Of this backlog approximately $582 million is expected to be completed in the next 12 months. During the quarter we continued to book new work and renew existing work. For [Dupnick] Communications a two year fiber construction contract in North and South Carolina, for Comcast, a three year extension to our underground facility locating contract for Houston Texas and a system maintenance project in Maryland, from Time Warner Cable a one year extension to our master installation contract for Southwest Ohio and a system upgrade in Massachusetts and for MetroCast a system upgrade in Connecticut.