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Dycom Industries Inc. (DY)
F1Q10 (Qtr End 10/24/09) Earnings Call
November 24, 2009 9:00 am ET
Steven Nielsen - President and CEO
Drew DeFerrari - CFO
Rick Vilsoet - General Counsel
Adam Thalhimer - BB&T Capital Markets
John Rogers - D. A. Davidson
Alex Rygiel - FBR Capital Markets
Simon Leopold - Morgan Keegan & Company
Jordan Teramo - Brigade Capital
Previous Statements by DY
» Dycom Industries, Inc. F4Q09 (Qtr End 08/25/09) 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
Thank you, John. Good morning everyone. I’d like to thank you for attending our first quarter fiscal 2010 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. Rick?
Thank you, Steve. 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 and Exchange Commission. The company does not undertake to update forward-looking information. Steve?
Thanks Rick. Yesterday we issued a press release announcing our first quarter results. As you review this release, it is important to note the following. During the first quarter of fiscal 2010, we recorded a pre-tax charge in cost of earned revenues for the proposed settlement of a wage and hour class action claim and $1.1 million non-cash charge to income tax expense for valuation allowance against the deferred tax asset.
In the first quarter of fiscal 2009, we incurred a pre-tax write-off of $550,000 of deferred financing cost in connection with the replacement of the company's credit facility. 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 $0.15 per share for the first quarter were down from last year's $0.28 per share result. Revenue decreased sequentially by 3.9% to $259.1 million and declined year-over-year by 22.4% for the quarter reflecting customer reductions in cash capital spending plans and a lack of any meaningful storm restoration services during the quarter. Excluding storm restoration services from the year ago quarter, revenue declined approximately 19% year-over-year.
Volumes during the quarter were mixed from telephone companies as some customer’s deployed capital for new network initiatives at a slowing pace and most other customers tightly managed routine capital and maintenance expenditures. Construction spending by cable customers was mixed while installation activity was also mixed slightly decreasing towards the later part of the quarter.
Margins decreased sequentially by a 104 basis points but improved by 18 basis points year-over-year. Cash flow from operations was strong reflecting a slight decline in day sale 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 a weak overall economy, revenue from AT&T was down sequentially and down year-over-year. At $47.2 million or 18.2% of revenue AT&T was our largest customer, revenue Comcast was up sequentially but down year-over-year. Comcast was our second largest customer at $40.6 million or 15.7% of total revenue.
Revenue from Verizon was $38 million; Verizon was Dycom’s third largest customer for the quarter at 14.7% of revenue. Revenue from Time Warner Cable was up sequentially but down year-over-year, reflecting slowing upgrade activity but increased installation volume sequentially. Time Warner Cable was our fourth largest customer at 8.6% of total revenue. CenturyLink, which resulted from the merger of CenturyTel and Embarq was our fifth largest customer with revenues of $21.7 million or 8.4% of total revenue, CenturyLink was up though sequentially and year-over-year.
Altogether our top five customers represented 65.5% of revenue or down 21.6% year-over-year. All other customers declined 23.9%.
Now moving to slide five, backlog at the end of the first quarter was $819 million versus $935 million at the end of the fourth quarter, a decrease of approximately $116 million. Others backlog approximately $517 million is expected to be completed in the next 12 months.
During the quarter, we continue to book new work and renew existing work: For AT&T a one-year extension to our master service agreement in Kentucky. For CenturyLink new two-year agreements in North Carolina, South Carolina, Virginia, Tennessee, Pennsylvania, New Jersey, and Ohio. From Qwest, a three-year extension to our master construction contract for Southwest Washington and Oregon. For Time Warner Cable, a one-year system maintenance and upgrade contract in Southern California.
Headcount decreased during the quarter to 8,951 reflecting continued right sizing of our workforce in a weak overall economy.