Dycom Industries (DY) Tops Q2 EPS by 50c, Revenues Miss

Dycom Industries (NYSE: DY) reported Q2 EPS of $1.18, $0.50 better than the analyst estimate of $0.68. Revenue for the quarter came in at $823.9 million versus the consensus estimate of $851.57 million.

Second Quarter Fiscal 2021 Highlights

• Contract revenues of $823.9 million for the quarter ended July 25, 2020, compared to $884.2 million for the quarter ended July 27, 2019, a decrease of 6.8% on an organic basis.
• Non-GAAP Adjusted EBITDA of $102.7 million, or 12.5% of contract revenues, for the quarter ended July 25, 2020, compared to $89.2 million, or 10.2% of contract revenues, for the quarter ended July 27, 2019. Non-GAAP Adjusted EBITDA for the quarter ended July 27, 2019 excludes $11.0 million of income before taxes reflecting the net benefit of a contract modification that increased revenues for services performed in prior periods, resulting in increased performance-based compensation.
• On a GAAP basis, net income was $37.0 million, or $1.15 per common share diluted, for the quarter ended July 25, 2020, compared to $29.9 million, or $0.94 per common share diluted, for the quarter ended July 27, 2019. Non-GAAP Adjusted Net Income was $38.0 million, or $1.18 per common share diluted, for the quarter ended July 25, 2020, compared to $27.4 million, or $0.86 per common share diluted for the quarter ended July 27, 2019. Non-GAAP Adjusted Net Income for the quarter ended July 27, 2019 excludes net income of $7.3 million, or $0.23 per common share diluted, reflecting the after-tax net benefit of a contract modification that increased revenues for services performed in prior periods, resulting in increased performance-based compensation.
• During the quarter ended July 25, 2020, the Company purchased $234.7 million aggregate principal amount of 0.75% convertible senior notes due September 2021 (the "Notes") for $224.4 million, including interest and fees. As a result, net income on a GAAP basis for the quarter ended July 25, 2020 includes a pre-tax loss of approximately $0.5 million.
• Notional net debt was reduced by $94.0 million during the quarter. As of July 25, 2020, the Company had cash and equivalents of $22.5 million, borrowings on its revolving line of credit of $200.0 million, $433.1 million of term loans outstanding and $58.3 million aggregate principal amount of Notes outstanding.

Outlook

The Company continues to closely monitor the impact of the COVID-19 pandemic on all aspects of its business. Based on current conditions, the Company anticipates contract revenues and margins to range from in-line to modestly lower on a sequential basis for the quarter ending October 24, 2020, as compared to the quarter ended July 25, 2020. The Company believes the impact of the COVID-19 pandemic on its operating results, cash flows and financial condition is uncertain, unpredictable and may be outside of its control.

For earnings history and earnings-related data on Dycom Industries (DY) click here.

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