Form 8-K DYCOM INDUSTRIES INC For: Aug 28

August 28, 2019 6:09 AM

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 28, 2019



DYCOM INDUSTRIES, INC.

(Exact name of Registrant as specified in its charter)



Florida	001-10613	59-1277135
(State or other jurisdiction of incorporation)	(Commission file number)	(I.R.S. employer identification no.)

	11780 U.S. Highway One, Suite 600,
	Palm Beach Gardens, Florida 33408
	(Address of principal executive offices) (Zip Code)

	(561) 627-7171
	(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

o Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 2.02 Results of Operations and Financial Condition.

On August 28, 2019, Dycom Industries, Inc. (the “Company”) issued a press release reporting fiscal 2020 second quarter results. The Company also provided forward guidance. Additionally, on August 28, 2019, the Company made available related materials to be discussed during the Company’s webcast and conference call referred to in such press release. A copy of the press release and related conference call materials are furnished as Exhibits 99.1, 99.2, and 99.3, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

The information in the preceding paragraphs, as well as Exhibits 99.1, 99.2, and 99.3, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section. It may only be incorporated by reference into another filing under the Exchange Act or the Securities Act of 1933 (the “Securities Act”) if such subsequent filing specifically references this Current Report on Form 8-K.

Forward Looking Statements

This Current Report on Form 8-K contains forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act. These statements include those related to the outlook for the quarter ending October 26, 2019 found under the “Outlook” and “Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures” sections of the press release. Forward-looking statements are based on management’s 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 Current Report on Form 8-K. The most significant of these risks and uncertainties are described in the Company’s Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports) and include business and economic conditions and trends in the telecommunications industry affecting the Company’s customers, fluctuations in customer capital budgets and spending priorities, the adequacy of the Company’s insurance and other reserves and allowances for doubtful accounts, whether the carrying value of the Company’s assets may be impaired, preliminary purchase price allocations of acquired businesses, expected benefits and synergies of acquisitions, the future impact of any acquisitions or dispositions, adjustments and cancellations related to the Company’s backlog, weather conditions, the anticipated outcome of other contingent events, including litigation, liquidity and other financial needs, the availability of financing, and the other risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission. These filings are available on a web site maintained by the Securities and Exchange Commission at http://www.sec.gov. The Company does not undertake to update forward-looking statements except as required by law.

Item 9.01 Financial Statement and Exhibits.


(d)	Exhibits



99.1	Press release dated August 28, 2019 by Dycom Industries, Inc. reporting fiscal 2020 second quarter results.
99.2	Slide presentation relating to the webcast and conference call to be held on August 28, 2019.
99.3	Reconciliation of Non-GAAP financial measures included in slide presentation.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: August 28, 2019



DYCOM INDUSTRIES, INC. (Registrant)
By:	/s/
Name:	Ryan F. Urness
Title:	Vice President, General Counsel and Corporate Secretary

Exhibit 99.1

N E W S R E L E A S E



FOR IMMEDIATE RELEASE	Contact:	Steven E. Nielsen, President and CEO H. Andrew DeFerrari, Senior Vice President and CFO (561) 627-7171

August 28, 2019

DYCOM INDUSTRIES, INC. ANNOUNCES FISCAL 2020 SECOND QUARTER RESULTS

AND PROVIDES GUIDANCE FOR THE NEXT FISCAL QUARTER

Palm Beach Gardens, Florida, August 28, 2019 - Dycom Industries, Inc. (NYSE: DY) announced today its results for the second quarter and six months ended July 27, 2019. The Company reported:


•	Contract revenues of $884.2 million for the quarter ended July 27, 2019, compared to $799.5 million for the quarter ended July 28, 2018. Contract revenues for the quarter ended July 27, 2019 increased 11.1% on an organic basis after excluding $3.8 million in contract revenues from storm restoration services for the quarter ended July 28, 2018.


•	Non-GAAP Adjusted EBITDA of $100.2 million, or 11.3% of contract revenues, for the quarter ended July 27, 2019, compared to Non-GAAP Adjusted EBITDA of $97.8 million, or 12.2% of contract revenues, for the quarter ended July 28, 2018.

•

On a GAAP basis, net income was $29.9 million, or $0.94 per common share diluted, for each of the quarters ended July 27, 2019 and July 28, 2018. Non-GAAP Adjusted Net Income was $34.6 million, or $1.09 per common share diluted, for the quarter ended July 27, 2019, compared to Non-GAAP Adjusted Net Income of $33.3 million, or $1.05 per Non-GAAP Adjusted Diluted Share, for the quarter ended July 28, 2018.

•

The Company entered into a contract modification that increases revenue produced by a large customer program. As a result, the Company recognized $11.8 million of contract revenues for services performed in prior periods and $1.8 million of related performance-based compensation expense. On an after-tax basis, these items contributed approximately $7.3 million to net income, or $0.23 per common share diluted, for the quarter ended July 27, 2019.

The Company also reported:

•

Contract revenues of $1.718 billion for the six months ended July 27, 2019, compared to $1.531 billion for the six months ended July 28, 2018. Contract revenues for the six months ended July 27, 2019 increased 13.5% on an organic basis after excluding contract revenues from an acquired business that was not owned for the full period in both the current and prior year periods and contract revenues from storm restoration services. Contract revenues from that acquired business were $13.4 million for the six months ended July 27, 2019 compared to $14.9 million for the six months ended July 28, 2018. Contract revenues from storm restoration services were $4.7 million for the six months ended July 27, 2019 compared to $18.6 million for the six months ended July 28, 2018.


•	Non-GAAP Adjusted EBITDA of $173.8 million, or 10.1% of contract revenues, for the six months ended July 27, 2019, compared to Non-GAAP Adjusted EBITDA of $171.5 million, or 11.2% of contract revenues, for the six months ended July 28, 2018.

•

On a GAAP basis, net income was $44.2 million, or $1.39 per common share diluted, for the six months ended July 27, 2019, compared to net income of $47.1 million, or $1.46 per common share diluted, for the six months ended July 28, 2018. Non-GAAP Adjusted Net Income was $51.6 million, or $1.62 per common share diluted, for the six months ended July 27, 2019, compared to Non-GAAP Adjusted Net Income of $54.0 million, or $1.70 per Non-GAAP Adjusted Diluted Share, for the six months ended July 28, 2018.

Outlook

The Company also announced its outlook for the fiscal quarter ending October 26, 2019. The Company currently expects total contract revenues for the fiscal quarter ending October 26, 2019 to range from $820 million to $870 million. On a GAAP basis, diluted earnings per common share for the fiscal quarter ending October 26, 2019 is expected to range from $0.48 to $0.68 and Non-GAAP Adjusted Diluted Earnings per Common Share is expected to range from $0.60 to $0.80. Non-GAAP Adjusted Diluted Earnings per Common Share guidance excludes $5.1 million of pre-tax interest expense, or $0.12 per common diluted share on an after-tax basis, for the non‑cash amortization of the debt discount associated with the Company’s 0.75% convertible senior notes due September 2021 (the “Notes”). A reconciliation of Non-GAAP Adjusted Diluted Earnings per Common Share guidance provided for the fiscal quarter ending October 26, 2019, along with reconciliations of other Non-GAAP measures, is included within the press release tables. For additional discussion regarding the Company’s outlook, please see the presentation materials available on the Company’s 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

A conference call to review the Company’s results will be hosted at 9:00 a.m. (ET), Wednesday, August 28, 2019; call (800) 230-1085 (United States) or (612) 288-0329 (International) ten minutes before the conference call begins and ask for the “Dycom Results” conference call. A live webcast of the conference call and related materials will be available on the Company’s Investor Center website at https://ir.dycomind.com. If you are unable to attend the conference call at the scheduled time, a replay of the live webcast and the related materials will be available at https://ir.dycomind.com until Friday, September 27, 2019.

About Dycom Industries, Inc.

Dycom is a leading provider of specialty contracting services throughout the United States. These services include program management, engineering, construction, maintenance and installation services for telecommunications providers, 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. These statements include those related to the outlook for the quarter ending October 26, 2019 found under the “Outlook” and “Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures” sections of this release. Forward looking statements are based on management’s 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 Company’s Form 10-K, Form 10-Q, and Form 8-K reports (including all amendments to those reports) and include business and economic conditions and trends in the telecommunications industry affecting the Company’s customers, customer capital budgets and spending priorities, the adequacy of the Company’s insurance and other reserves and allowances for doubtful accounts, whether the carrying value of the Company’s assets may be impaired, preliminary purchase price allocations of acquired businesses, expected benefits and synergies of acquisitions, the future impact of any acquisitions or dispositions, adjustments and cancellations related to the Company’s backlog, weather conditions, the anticipated outcome of other contingent events, including litigation, liquidity and other financial needs, the availability of financing, and the other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission. The Company does not undertake any obligation to update forward-looking statements.

---Tables Follow---



DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Unaudited

	July 27, 2019		January 26, 2019
ASSETS
Current assets:
Cash and equivalents	$	12,583	$	128,342
Accounts receivable, net	796,908		625,258
Contract assets	357,615		215,849
Inventories	107,353		94,385
Income tax receivable	1,417		3,461
Other current assets	31,971		29,145
Total current assets	1,307,847		1,096,440

Property and equipment, net	422,264		424,751
Operating lease right-of-use assets (a)	69,459		—
Goodwill and other intangible assets, net	476,212		486,874
Other	52,589		89,438
Total non-current assets	1,020,524		1,001,063
Total assets	$	2,328,371	$	2,097,503

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	140,279	$	119,485
Current portion of debt	16,875		5,625
Contract liabilities	13,272		15,125
Accrued insurance claims	41,075		39,961
Operating lease liabilities (a)	25,751		—
Income taxes payable	2,553		721
Other accrued liabilities	117,159		104,074
Total current liabilities	356,964		284,991

Long-term debt	932,277		867,574
Accrued insurance claims - non-current	58,492		68,315
Operating lease liabilities - non-current (a)	44,371		—
Deferred tax liabilities, net - non-current	77,574		65,963
Other liabilities	5,260		6,492
Total liabilities	1,474,938		1,293,335

Total stockholders’ equity	853,433		804,168
Total liabilities and stockholders’ equity	$	2,328,371	$	2,097,503

(a) The Company adopted Accounting Standards Update No. 2016-02, Leases (Topic 842), effective January 27, 2019, the first day of fiscal 2020. On adoption, the Company recognized approximately $71.0 million of operating lease right-of-use assets and corresponding operating lease liabilities on its condensed consolidated balance sheet for its operating leases with terms greater than twelve months.



DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share amounts)
Unaudited
	Quarter			Quarter			Six Months			Six Months
	Ended			Ended			Ended			Ended
	July 27, 2019			July 28, 2018			July 27, 2019			July 28, 2018
Contract revenues	$	884,221		$	799,470		$	1,717,964		$	1,530,844

Costs of earned revenues, excluding depreciation and amortization (a)	720,382			642,376			1,422,150			1,241,949
General and administrative (b) (c)	65,117			64,555			123,738			126,838
Depreciation and amortization	47,244			44,805			93,586			88,160
Total	832,743			751,736			1,639,474			1,456,947

Interest expense, net (d)	(12,878		)	(10,446		)	(25,111		)	(20,612		)
Other income, net	4,006			4,156			9,705			11,868
Income before income taxes	42,606			41,444			63,084			65,153

Provision for income taxes (e)	12,710			11,544			18,909			18,022

Net income	$	29,896		$	29,900		$	44,175		$	47,131

Earnings per common share:

Basic earnings per common share	$	0.95		$	0.96		$	1.40		$	1.51

Diluted earnings per common share	$	0.94		$	0.94		$	1.39		$	1.46

Shares used in computing earnings per common share:
Basic	31,487,011			31,206,340			31,469,401			31,198,349

Diluted (f)	31,820,296			31,954,013			31,803,368			32,180,960

(a) During the six months ended July 27, 2019, the Company recorded an $8.2 million pre-tax charge in the first quarter for estimated warranty costs for work performed for a customer in prior periods.
(b) During the six months ended July 27, 2019, the Company recognized $10.3 million of pre-tax income from the recovery of previously reserved accounts receivable and contract assets in the first quarter based on collections from a customer.
(c) Includes stock-based compensation expense of $2.3 million and $6.0 million for the quarters ended July 27, 2019 and July 28, 2018, respectively, and $5.8 million and $10.9 million for the six months ended July 27, 2019 and July 28, 2018, respectively.
(d) Includes pre-tax interest expense for non-cash amortization of the debt discount associated with the Notes of $5.0 million and $4.8 million for the quarters ended July 27, 2019 and July 28, 2018, respectively, and $9.9 million and $9.4 million for the six months ended July 27, 2019 and July 28, 2018, respectively.
(e) For the three and six months ended July 27, 2019, the provision for income taxes included $1.1 million related to a previous tax year filing. For the six months ended July 27, 2019, the provision for income taxes also included $0.6 million of income tax expense for the vesting and exercise of share-based awards.
(f) During the quarter and six months ended July 28, 2018, the Company’s average stock price exceeded the $96.89 conversion price of its Notes. As a result, diluted shares used in computing diluted earnings per common share for the quarter and six months ended July 28, 2018 include approximately 0.1 million and 0.4 million weighted shares, respectively, of potential dilution from the embedded conversion feature in the Notes.



DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO COMPARABLE GAAP FINANCIAL MEASURES
(Dollars in thousands)
Unaudited

CONTRACT REVENUES, NON-GAAP ORGANIC CONTRACT REVENUES, AND GROWTH %’s

	Contract Revenues - GAAP		Revenues from acquired businesses (a)			Revenues from storm restoration services			Non-GAAP - Organic Contract Revenues		GAAP - Growth %		Non-GAAP - Organic Growth %
Quarter Ended July 27, 2019	$	884,221	$	—		$	—		$	884,221	10.6	%	11.1	%

Quarter Ended July 28, 2018	$	799,470	$	—		$	(3,760	)	$	795,710

Six Months Ended July 27, 2019	$	1,717,964	$	(13,401	)	$	(4,716	)	$	1,699,847	12.2	%	13.5	%

Six Months Ended July 28, 2018	$	1,530,844	$	(14,915	)	$	(18,609	)	$	1,497,320

(a) Amounts for the six months ended July 27, 2019 and July 28, 2018 represent contract revenues from an acquired business that was not owned for the full period in both the current and prior year periods.



NET INCOME AND NON-GAAP ADJUSTED EBITDA

	Quarter Ended			Quarter Ended			Six Months Ended			Six Months Ended
	July 27, 2019			July 28, 2018			July 27, 2019			July 28, 2018
Reconciliation of net income to Non-GAAP Adjusted EBITDA:
Net income	$	29,896		$	29,900		$	44,175		$	47,131
Interest expense, net	12,878			10,446			25,111			20,612
Provision for income taxes	12,710			11,544			18,909			18,022
Depreciation and amortization	47,244			44,805			93,586			88,160
Earnings Before Interest, Taxes, Depreciation & Amortization ("EBITDA")	102,728			96,695			181,781			173,925
Gain on sale of fixed assets	(4,806		)	(4,909		)	(11,544		)	(13,324		)
Stock-based compensation expense	2,277			6,048			5,756			10,911
Recovery of previously reserved accounts receivable and contract assets	—			—			(10,345		)	—
Q1-20 charge for warranty costs	—			—			8,200			—
Non-GAAP Adjusted EBITDA	$	100,199		$	97,834		$	173,848		$	171,512

Contract revenues	$	884,221		$	799,470		$	1,717,964		$	1,530,844
Non-GAAP Adjusted EBITDA % of contract revenues	11.3		%	12.2		%	10.1		%	11.2		%



DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO COMPARABLE GAAP FINANCIAL MEASURES (CONTINUED)
(Dollars in thousands, except share amounts)
Unaudited

NET INCOME, NON-GAAP ADJUSTED NET INCOME, DILUTED EARNINGS PER COMMON SHARE, NON-GAAP ADJUSTED DILUTED EARNINGS PER COMMON SHARE, AND NON-GAAP ADJUSTED DILUTED SHARES

	Quarter Ended			Quarter Ended			Six Months Ended			Six Months Ended
	July 27, 2019			July 28, 2018			July 27, 2019			July 28, 2018
Reconciliation of net income to Non-GAAP Adjusted Net Income:
Net income	$	29,896		$	29,900		$	44,175		$	47,131

Pre-Tax Adjustments:
Non-cash amortization of debt discount on Notes	5,015			4,750			9,947			9,422
Q1-20 charge for warranty costs (a)	—			—			8,200			—
Recovery of previously reserved accounts receivable and contract assets (b)	—			—			(10,345		)	—

Tax Adjustments:
Tax expense for the vesting and exercise of share-based awards	—			—			638			—
Tax expense related to previous tax year filing	1,092			—			1,092			—
Tax effect of pre-tax adjustments	(1,379		)	(1,314		)	(2,145		)	(2,589		)
Total adjustments, net of tax	4,728			3,436			7,387			6,833

Non-GAAP Adjusted Net Income	$	34,624		$	33,336		$	51,562		$	53,964

Reconciliation of diluted earnings per common share to Non-GAAP Adjusted Diluted Earnings per Common Share:
GAAP diluted earnings per common share	$	0.94		$	0.94		$	1.39		$	1.46
Total adjustments, net of tax and dilutive share effect of Notes (c)	0.15			0.11			0.23			0.23
Non-GAAP Adjusted Diluted Earnings per Common Share	$	1.09		$	1.05		$	1.62		$	1.70

Shares used in computing Non-GAAP Adjusted Diluted Earnings per Common Share:
GAAP diluted shares	31,820,296			31,954,013			31,803,368			32,180,960
Adjustment for economic benefit of note hedge related to Notes (c)	—			(120,196		)	—			(367,597		)
Non-GAAP Adjusted Diluted Shares (c)	31,820,296			31,833,817			31,803,368			31,813,363

(a) During the six months ended July 27, 2019, the Company recorded an $8.2 million pre-tax charge in the first quarter for estimated warranty costs for work performed for a customer in prior periods.
(b) During the six months ended July 27, 2019, the Company recognized $10.3 million of pre-tax income from the recovery of previously reserved accounts receivable and contract assets in the first quarter based on collections from a customer.
(c) The Company has a note hedge in effect to offset the economic dilution of additional shares from the Notes up to an average quarterly share price of $130.43 per share. Non-GAAP Adjusted Diluted Shares excludes the GAAP dilutive share effect of the Notes.

Amounts in table above may not add due to rounding.



DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO COMPARABLE GAAP FINANCIAL MEASURES (CONTINUED)
Unaudited

OUTLOOK - DILUTED EARNINGS PER COMMON SHARE AND NON-GAAP ADJUSTED DILUTED EARNINGS PER COMMON SHARE

		Quarter Ending
		October 26, 2019

GAAP diluted earnings per common share		$0.48 - $0.68

Adjustment
Addback of after-tax non-cash amortization of debt discount (a)		0.12

Non-GAAP Adjusted Diluted Earnings per Common Share		$0.60 - $0.80


Diluted shares (in millions)		31.8

(a) The Company expects to recognize approximately $5.1 million in pre-tax interest expense during the quarter ending October 26, 2019 for the non-cash amortization of the debt discount associated with the Notes.

DYCOM INDUSTRIES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

TO 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 Company’s 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 Company’s performance for the period reported with the Company’s 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 Company’s reported GAAP results. Management defines the Non-GAAP financial measures used in this release 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. Non-GAAP Organic Contract Revenue growth is calculated as the percentage change in Non-GAAP Organic Contract Revenues over those of the comparable prior year periods. Management believes organic growth is a helpful measure for comparing the Company’s revenue performance with prior periods.

•

Non-GAAP Adjusted 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-GAAP Adjusted EBITDA is a helpful measure for comparing the Company’s operating performance with prior periods as well as with the performance of other companies with different capital structures or tax rates.


•	Non-GAAP Adjusted 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.

•

Non-GAAP Adjusted Diluted Earnings per Common Share and Non-GAAP Adjusted Diluted Shares - Non-GAAP Adjusted Net Income divided by Non-GAAP Adjusted Diluted Shares outstanding. The Company has a hedge in effect to offset the economic dilution of additional shares that would be issued in connection with the conversion of the Notes up to an average quarterly share price of $130.43. The measure of Non-GAAP Adjusted Diluted shares used in computing Non-GAAP Adjusted Diluted Earnings per Common Share excludes dilution from the Notes. Management believes that the calculation of Non-GAAP Adjusted Diluted shares to reflect the note hedge will be useful to investors because it provides insight into the offsetting economic effect of the hedge against potential conversion of the Notes.

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

•

Non-cash amortization of debt discount on Notes - The Company’s Notes were allocated between debt and equity components. The difference between the principal amount and the carrying amount of the liability component of the Notes represents a debt discount. The debt discount is being amortized over the term of the Notes but does not result in periodic cash interest payments. The Company has excluded 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 Notes that will be paid in cash. The exclusion of the non-cash amortization from the Company’s Non-GAAP financial measures provides management with a consistent measure for assessing financial results.

•

Recovery of previously reserved accounts receivable and contract assets - During the six months ended July 27, 2019, the Company recognized $10.3 million of pre-tax income from the recovery of previously reserved accounts receivable and contract assets in the first quarter based on collections from a customer. The Company excludes the impact of this recovery from its Non-GAAP financial measures because the Company believes it is not indicative of its underlying results.


•	Q1-20 charge for warranty costs - During the six months ended July 27, 2019, the Company recorded an $8.2 million pre-tax charge for estimated warranty costs for work performed for a customer in prior periods. The Company excludes the impact of this charge from its Non-GAAP financial measures because the Company believes it is not indicative of its underlying results in the current period.


•	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 Company’s Non-GAAP financial measures provides management with a more consistent measure for assessing financial results.


•	Tax impact of previous tax year filing - During the quarter and six months ended July 27, 2019, the Company recognized an income tax expense of $1.1 million on a previous tax year filing. The Company has excluded this impact because the Company believes it is not indicative of the Company’s underlying results or ongoing operations.


•	Tax impact of pre-tax adjustments - The tax impact of pre-tax adjustments reflects the Company’s effective tax rate used for financial planning for the applicable period.

Dycom Q2 2020 Results August 28, 2019

Participants Agenda Steven E. Nielsen • Q2 2020 Overview President & Chief Executive Officer • Industry Update Timothy R. Estes Chief Operating Officer • Financial & Operational Highlights H. Andrew DeFerrari Chief Financial Officer • Outlook Ryan F. Urness • Conclusion General Counsel • Q&A 2

Important Information Caution Concerning Forward-Looking Statements This presentation contains “forward-looking statements”. Other than statements of historical facts, all statements contained in this presentation, including statements regarding the Company’s future financial position, future revenue, prospects, plans and objectives of management, are forward-looking statements. Words such as “outlook,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “should,” “could,” “project,” and similar expressions, as well as statements in future tense, identify forward-looking statements. You should not consider forward- looking statements as a guarantee of future performance or results. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief at that time with respect to future events. Such statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors, assumptions, uncertainties, and risks that could cause such differences are discussed in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 4, 2019 and other filings with the SEC. The forward-looking statements in this presentation are expressly qualified in their entirety by this cautionary statement. The Company undertakes no obligation to update these forward-looking statements to reflect new information, or events or circumstances arising after such date. Non-GAAP Financial Measures This presentation includes certain “Non-GAAP” financial measures as defined by Regulation G of the SEC. As required by the SEC, an explanation of the Non-GAAP financial measures and a reconciliation of those measures to the most directly comparable GAAP financial measures are provided in the Company’s Form 8-K filed with the SEC on August 28, 2019 and on the Company’s Investor Center website at https://ir.dycomind.com. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, the Company’s reported GAAP results. 3

Contract Revenues Q2 2020 Overview Contract revenues Strong organic revenue growth of 11.1% Entered into contract modification that increases revenue produced by a large customer program. As a result, recognized $11.8 million of contract revenues for services performed in prior periods and $1.8 million of related performance-based compensation expense. On an after-tax basis, these items contributed $0.23 per common share diluted for Q2 2020. Operating performance Non-GAAP Adjusted Non-GAAP Adjusted EBITDA for Q2 2020 of $100.2 million, or 11.3% of contract revenues, compared Diluted EPS to $97.8 million, or 12.2% of contract revenues, for Q2 2019 Non-GAAP Adjusted Diluted EPS of $1.09 per share for Q2 2020 compared to $1.05 per share for Q2 2019 Liquidity Ample liquidity of $289.1 million at the end of Q2 2020 consisting of availability under Senior Credit Facility and cash on hand $65.0 million in outstanding revolver borrowings at the end of Q2 2020 4

Industry Update Industry increasing network bandwidth dramatically Major industry participants constructing or upgrading significant wireline networks generally designed to provision 1 gigabit network speeds directly to consumers or wirelessly using 5G technologies Emerging wireless technologies are driving significant wireline deployments Wireline deployments necessary to facilitate expected decades long deployment of fully converged wireless/wireline networks that will enable high bandwidth, low latency 5G applications Industry effort required to deploy these converged networks continues to meaningfully broaden our set of opportunities Dycom’s competitively unparalleled scale and financial strength position it well to deliver valuable services to its customers Currently providing services for 1 gigabit full deployments and converged wireless/wireline multi-use network deployments across the country in more than a dozen metropolitan areas to several customers Customers are pursuing multi-year initiatives that are being planned and managed on a market by market basis Dycom’s ability to provide integrated planning, engineering and design, procurement and construction and maintenance services is of particular value to several industry participants 5

Contract Revenues Non-GAAP Organic Growth (Decline) %1 Top 5 Customers Q2 2020 Organic growth: 11.1% 12.7% 5.5% Top 5 customers represented 78.6% and 77.9% of contract 3 Total Customers Top 5 Customers All Other Customers revenues in Q2 2020 and Q2 2019, respectively Q2 2020 % of contract revenues from remaining Top 10 customers: 39.1% 13.5% 29.0% 20.7% 2.6% 1.6% 1.1% 1.0% 0.9% Verizon AT&T CenturyLink Windstream Charter Frontier Dominion Energy TDS Telecom NiSource 6

Backlog and Awards Backlog4 Employee Headcount Selected Q2 2020 Awards and Extensions: Customer Description Area Term (years) AT&T Construction Services Kentucky, Tennessee, North Carolina, South Carolina 3 CenturyLink Construction Services Wyoming, Colorado, Nebraska, Iowa, Missouri, Florida 3-6 Comcast Fulfillment Services Michigan, Illinois 1 Frontier Construction Services California 3 TDS Telecom Construction Services Wisconsin 1 7

Financial Highlights As % of Contract Revenues Revenues of $884.2 million in Q2 2020 increased organically 11.1% from the comparable prior period Entered into contract modification that increases revenue produced by a large customer program. As a result, recognized $11.8 million of contract revenues for services performed in prior periods and $1.8 million of related performance-based compensation expense. On an after-tax basis, these items contributed $0.23 per common share diluted for Q2 2020. Recognized $1.1 million of income tax expense in Q2 2020 related to a previous tax year filing. This expense is excluded from Non-GAAP Adjusted Diluted EPS. 8

Liquidity Overview $ Millions April 27, 2019 July 27, 2019 $ Millions Q2 2019 Q2 2020 Cash and equivalents $ 33.6 $ 12.6 Cash Flow Summary Cash provided by operating activities $ 12.6 $ (53.6) Senior Credit Facility, matures Oct 2023:5 Capital expenditures, net of disposals $ (39.1) $ (32.8) Revolving Facility $ - $ 65.0 Borrowings (payments) on Senior Credit Facility $ (7.2) $ 65.0 Term Loan Facilities 450.0 450.0 Other financing & investing activities, net $ 0.3 $ 0.4 0.75% Convertible Senior Notes, mature Sept 2021: Notional Value 485.0 485.0 Total Days Sales Outstanding ("DSO")8 96 117 Total Notional Amount of Debt $ 935.0 $ 1,000.0 Net Debt (Notional Debt less Cash) $ 901.4 $ 987.4 Total Notional Amount of Debt (see above) $ 935.0 $ 1,000.0 Unamortized debt discount and debt fees on 0.75% Convertible Senior Notes (56.4) (50.8) Debt, net of debt discount and fees $ 878.6 $ 949.2 Availability on Revolving Facility6 $ 325.4 $ 276.5 Total Liquidity7 $ 358.9 $ 289.1 Balance sheet reflects the strength of our business Cash flow and borrowings used to support organic growth and capital expenditures during Q2 2020 Liquidity of $289.1 million at July 27, 2019 consisting of availability under Senior Credit Facility and cash on hand7 DSO increase attributable to growth on large customer program Capital expenditures, net of disposals for fiscal 2020 anticipated at $140 - $150 million, a $10 million reduction from our previous outlook 9

Outlook for Quarter Ending October 26, 2019 (Q3 2020) $ MillionsQ1 (except 2020 per Outlookshare amounts) Outlook Outlook Q3 2019 Q3 2020 Q3 2019 Q3 2020 Contract revenues $848.2 $ 820 - $ 870 Depreciation $39.8 $41.8 - $42.6 GAAP Diluted Earnings per Common Share $0.87 $0.48 - $0.68 Amortization $5.8 $5.3 Stock-based compensation $7.4 $2.5 - $3.3 (Included in General & Administrative Expense) Non-GAAP Adjusted Diluted Earnings per $0.98 $0.60 - $0.80 Non-GAAP Adjusted Interest Expense $6.5 $7.9 - $8.0 (Excludes non-cash amortization of debt discount of $4.8 Common Share for Q3 2019 & expectation of $5.1 for Q3 2020) Other income, net $2.8 $0.9 - $1.5 Non-GAAP Adjusted EBITDA % 11.6% Non-GAAP Adjusted (Includes Gain on sales of fixed assets of $3.9 for Q3 of contract revenues EBITDA % decreases 2019 and expectation of $2.0 - $2.6 for Q3 2020) from Q3 2019 Non-GAAP Adjusted Effective Income Tax 27.3% 27.5% Rate (as a % of Non-GAAP Adjusted Income before Taxes) Non-GAAP Adjusted Diluted Shares 31.8 million 31.8 million 10

Looking Ahead to the Quarter Ending January 25, 2020 (Q4 2020) $ MillionsQ1 (except 2020 per Outlookshare amounts) Outlook Outlook Q4 2019 Q4 2020 Q4 2019 Q4 2020 Contract revenues $748.6 Organic revenue Depreciation $40.5 $41.9 - $42.7 ranging from in-line Amortization $5.4 $5.2 For comparative purposes: to low-single digit % Non-GAAP Organic Revenues in Q4 2019 were growth compared to Non-GAAP Stock-Based Compensation $3.8 $2.3 - $3.4 $728.2 million after excluding $20.4 million of $728.2 million (Included in General & Administrative Expense) storm restoration services Non-GAAP Organic Non-GAAP Adjusted Interest Expense $7.6 $8.0 - $8.1 During Q4 2020, there are no storm restoration revenues in Q4 2019 (Excludes non-cash amortization of debt discount of $4.9 services expected in the outlook for Q4 2019 & expectation of $5.2 for Q4 2020) Other income, net $1.2 $0.0 - $0.5 Non-GAAP Adjusted EBITDA % 8.0% Non-GAAP Adjusted (Includes Gain on sales of fixed assets of $2.2 for Q4 of contract revenues EBITDA % ranging 2019 and expectation of $1.0 - $1.5 for Q4 2020) from in-line to a Non-GAAP Adjusted Effective Income Tax 32.2% 27.5% slight increase from Rate Q4 2019 (as a % of Non-GAAP Adjusted Income before Taxes) Non-GAAP Adjusted Diluted Shares 31.8 million 31.8 million 11

Conclusion Firm and strengthening end market opportunities Fiber deployments enabling new wireless technologies are underway in many regions of the country Wireless construction activity in support of expanded coverage and capacity has begun to accelerate through the deployment of enhanced macro cells and new small cells Telephone companies are deploying FTTH to enable 1 gigabit high speed connections Cable operators are deploying fiber to small and medium businesses and enterprises. Fiber deep deployments and new build opportunities are underway. Dramatically increased speeds to consumers are being provisioned and consumer data usage is growing Customers are consolidating supply chains creating opportunities for market share growth and increasing the long-term value of Dycom’s maintenance and operations business Dycom is increasingly providing integrated planning, engineering and design, procurement and construction and maintenance services for wired and converged wireless/wireline networks Encouraged that Dycom’s major customers are committed to multi-year capital spending initiatives 12

Notes 1) Organic growth (decline) % adjusted for revenues from acquired businesses and storm restoration services, 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. 3) Top 5 customers included Verizon, AT&T, CenturyLink, Comcast and Windstream for Q2 2020, compared to Comcast, AT&T, Verizon, CenturyLink and Charter for Q2 2019. 4) Our 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 twelve-month period, when available. When estimating backlog for newly initiated master service agreements and other long and short-term contracts, we also consider the anticipated scope of the contract and information received from the customer during the procurement process. A significant majority of our 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; however, it is a common measurement used in our industry. Our methodology for determining backlog may not be comparable to the methodologies used by others. 5) The Company had $52.3 million of standby letters of credit outstanding under the Senior Credit Facility at both July 27, 2019 and April 27, 2019. 6) Availability provided by the Company’s Senior Credit Facility includes incremental amounts of eligible cash and equivalents above $50 million. As of both July 27, 2019 and April 27, 2019, there were no incremental amounts included as Cash and equivalents were less than $50 million. 7) As of both July 27, 2019 and April 27, 2019, Total Liquidity represents the sum of the Availability on Revolving Facility and cash and equivalents. 8) 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. 13

Exhibit 99.3

Dycom Industries, Inc.

Non-GAAP Reconciliations

Q2 2020

Explanation of Non-GAAP Financial Measures

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). In the Company’s quarterly results releases, trend schedules, conference calls, slide presentations, and webcasts, it also reports 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 provides information that is useful to investors because it allows for a more direct comparison of the Company’s performance for the period reported with the Company’s 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 Company’s reported GAAP results. Management defines the Non-GAAP financial measures used in this release 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. Non-GAAP Organic Contract Revenue growth (decline) is calculated as the percentage change in Non-GAAP Organic Contract Revenues over those of the comparable prior year periods. Management believes organic growth (decline) is a helpful measure for comparing the Company’s revenue performance with prior periods.

•

Non-GAAP Adjusted EBITDA - net income (loss) before interest, taxes, depreciation and amortization, gain on sale of fixed assets, stock-based compensation expense, and certain non-recurring items. Management believes Non-GAAP Adjusted EBITDA is a helpful measure for comparing the Company’s operating performance with prior periods as well as with the performance of other companies with different capital structures or tax rates.


•	Non-GAAP Adjusted Net Income - GAAP net income (loss) 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.

•

Non-GAAP Adjusted Diluted Earnings per Common Share and Non-GAAP Adjusted Diluted Shares - Non-GAAP Adjusted Net Income divided by Non-GAAP Adjusted Diluted Shares outstanding. The Company has a hedge in effect to offset the economic dilution of additional shares that would be issued in connection with the conversion of the Company’s 0.75% convertible senior notes due September 2021 (the “Notes”) up to an average quarterly share price of $130.43. The measure of Non-GAAP Adjusted Diluted shares used in computing Non-GAAP Adjusted Diluted Earnings per Common Share excludes dilution from the Notes. Management believes that the calculation of Non-GAAP Adjusted Diluted shares to reflect the hedge will be useful to investors because it provides insight into the offsetting economic effect of the hedge against potential conversion of the Notes.

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

•

Non-cash charge for accounts receivable and contract assets - During the quarter ended January 26, 2019, the Company recognized a pre-tax non-cash charge for accounts receivable and contract assets of $17.2 million related to balances owed from a customer. On February 25, 2019, this customer filed a voluntary petition for reorganization. The Company excludes the impact of this non-cash charge for accounts receivable and contract assets from its Non-GAAP financial measures because the Company believes it is not indicative of its underlying results or ongoing operations.


•	Impact on stock-based compensation expense from non-cash charge for accounts receivable and contract assets - The Company excludes the impact on stock-based compensation expense from the non-cash charge for accounts receivable and contract assets from its Non-GAAP financial measures because the Company believes it is not indicative of its underlying results or ongoing operations.


•	Recovery of previously reserved accounts receivable and contract assets - During the quarter ended April 27, 2019, the Company recognized $10.3 million of pre-tax income from the recovery of previously reserved accounts receivable and

contract assets in the first quarter based on collections from a customer. The Company excludes the impact of this recovery from its Non-GAAP financial measures because the Company believes it is not indicative of its underlying results.


•	Q1-20 charge for warranty costs - During the quarter ended April 27, 2019, the Company recorded an $8.2 million pre-tax charge for estimated warranty costs for work performed for a customer in prior periods. The Company excludes the impact of this charge from its Non-GAAP financial measures because the Company believes it is not indicative of its underlying results in the current period.


•	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 Company’s Non-GAAP financial measures provides management with a more consistent measure for assessing financial results.


•	Tax impact of previous tax year filing - During the quarter ended July 27, 2019, the Company recognized an income tax expense of $1.1 million on a previous tax year filing. The Company has excluded this impact because the Company believes it is not indicative of the Company’s underlying results or ongoing operations.


•	Tax impact of pre-tax adjustments - The tax impact of pre-tax adjustments reflects the Company’s effective tax rate used for financial planning for the applicable period.



Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures

Non-GAAP Organic Contract Revenues
Unaudited
(Dollars in millions)

	Contract Revenues - GAAP		Revenues from acquired businesses¹			Revenues from storm restoration services			Non-GAAP - Organic Revenues		Growth (Decline)%
Quarter Ended	Contract Revenues - GAAP		Revenues from acquired businesses¹			Revenues from storm restoration services			Non-GAAP - Organic Revenues		GAAP %		Non-GAAP - Organic %
July 27, 2019	$	884.2	$	—		$	—		$	884.2	10.6	%	11.1	%
July 28, 2018	$	799.5	$	—		$	(3.8	)	$	795.7

April 27, 2019	$	833.7	$	(6.1	)	$	(4.7	)	$	822.9	14.0	%	15.8	%
April 28, 2018	$	731.4	$	(5.8	)	$	(14.8	)	$	710.7

January 26, 2019	$	748.6	$	(5.9	)	$	(20.4	)	$	722.3	14.3	%	13.7	%
January 27, 2018	$	655.1	$	—		$	(19.8	)	$	635.3

October 27, 2018	$	848.2	$	(8.8	)	$	(3.9	)	$	835.6	12.2	%	12.9	%
October 28, 2017	$	756.2	$	—		$	(15.9	)	$	740.3

July 28, 2018	$	799.5	$	(9.1	)	$	(3.8	)	$	786.6	2.5	%	0.8	%
July 29, 2017	$	780.2	$	—		$	—		$	780.2

April 28, 2018	$	731.4	$	(15.4	)	$	(14.8	)	$	701.1	(7.0	)%	(10.0	)%
April 29, 2017	$	786.3	$	(7.1	)	$	—		$	779.2

January 27, 2018	$	655.1	$	(8.4	)	$	(19.6	)	$	627.1	(6.6	)%	(10.6	)%
January 28, 2017	$	701.1	$	—		$	—		$	701.1

October 28, 2017	$	756.2	$	(8.6	)	$	(15.5	)	$	732.1	(5.4	)%	(8.4	)%
October 29, 2016	$	799.2	$	—		$	—		$	799.2

Note: Amounts above may not add due to rounding.



Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures

Non-GAAP Organic Contract Revenues - Certain Customers
Unaudited
(Dollars in millions)

	Contract Revenues - GAAP		Revenues from acquired businesses¹		Revenues from storm restoration services			Non-GAAP - Organic Revenues		Growth (Decline)%
Quarter Ended	Contract Revenues - GAAP		Revenues from acquired businesses¹		Revenues from storm restoration services			Non-GAAP - Organic Revenues		GAAP %		Non-GAAP - Organic %

Verizon
July 27, 2019	$	205.0	$	—	$	—		$	205.0	39.1	%	39.1	%
July 28, 2018	$	147.3	$	—	$	—		$	147.3

AT&T
July 27, 2019	$	183.3	$	—	$	—		$	183.3	10.9	%	13.5	%
July 28, 2018	$	165.2	$	—	$	(3.8	)	$	161.5

CenturyLink
July 27, 2019	$	138.7	$	—	$	—		$	138.7	29.0	%	29.0	%
July 28, 2018	$	107.6	$	—	$	—		$	107.6

Windstream
July 27, 2019	$	34.7	$	—	$	—		$	34.7	20.7	%	20.7	%
July 28, 2018	$	28.8	$	—	$	—		$	28.8

Top 5 Customers²
July 27, 2019	$	694.8	$	—	$	—		$	694.8	12.1	%	12.7	%
July 28, 2018	$	620.0	$	—	$	(3.8	)	$	616.3

All Other Customers (excluding Top 5 Customers)
July 27, 2019	$	189.4	$	—	$	—		$	189.4	5.5	%	5.5	%
July 28, 2018	$	179.4	$	—	$	—		$	179.4

Note: Amounts above may not add due to rounding.



Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures

Non-GAAP Adjusted EBITDA
Unaudited
(Dollars in thousands)

	Quarter Ended
	July 27, 2019			July 28, 2018
Net income	$	29,896		$	29,900
Interest expense, net	12,878			10,446
Provision for income taxes	12,710			11,544
Depreciation and amortization	47,244			44,805
Earnings Before Interest, Taxes, Depreciation & Amortization (“EBITDA”)	102,728			96,695
Gain on sale of fixed assets	(4,806		)	(4,909		)
Stock-based compensation expense	2,277			6,048
Non-GAAP Adjusted EBITDA	$	100,199		$	97,834

Contract revenues	$	884,221		$	799,470
Non-GAAP Adjusted EBITDA % of contract revenues	11.3		%	12.2		%


Comparable Prior Periods for Q3 2020 and Q4 2020 Outlook:	Quarter Ended
	October 27, 2018			January 26, 2019
Net income (loss)	$	27,830		$	(12,054	)
Interest expense, net	11,310			12,447
Provision (benefit) for income taxes	10,454			(3,345		)
Depreciation and amortization	45,533			45,909
Earnings Before Interest, Taxes, Depreciation & Amortization (“EBITDA”)	95,127			42,957
Gain on sale of fixed assets	(3,874		)	(2,192		)
Stock-based compensation expense	7,366			1,910
Non-cash charge for accounts receivable and contract assets	—			17,157
Non-GAAP Adjusted EBITDA	$	98,619		$	59,832

Contract revenues	$	848,237		$	748,619
Non-GAAP Adjusted EBITDA % of contract revenues	11.6		%	8.0		%

Note: Amounts above may not add due to rounding.



Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures

Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Diluted Earnings Per Share
Unaudited
(Dollars and shares in thousands, except per share amounts)

	Quarter Ended July 27, 2019
	GAAP			Reconciling Items			Non-GAAP Adjusted
Contract revenues	$	884,221		$	—		$	884,221
Costs of earned revenues, excluding depreciation and amortization	720,382			—			720,382
General and administrative	65,117			—			65,117
Depreciation and amortization	47,244			—			47,244
Total	832,743			—			832,743
Interest expense, net³	(12,878		)	5,015			(7,863		)
Other income, net	4,006			—			4,006
Income before income taxes	42,606			5,015			47,621
Provision for income taxes^4,5	12,710			287			12,997
Net income	$	29,896		$	4,728		$	34,624

Diluted earnings per common share	$	0.94		$	0.15		$	1.09

Shares used in computing diluted earnings per common share	31,820			—			31,820


	Quarter Ended July 28, 2018
	GAAP			Reconciling Items			Non-GAAP Adjusted
Contract revenues	$	799,470		$	—		$	799,470
Costs of earned revenues, excluding depreciation and amortization	642,376			—			642,376
General and administrative	64,555			—			64,555
Depreciation and amortization	44,805			—			44,805
Total	751,736			—			751,736
Interest expense, net³	(10,446		)	4,750			(5,696		)
Other income, net	4,156			—			4,156
Income before income taxes	41,444			4,750			46,194
Provision for income taxes⁴	11,544			1,314			12,858
Net income	$	29,900		$	3,436		$	33,336

Diluted earnings per common share	$	0.94		$	0.11		$	1.05

Shares used in computing diluted earnings per common share⁶	31,954			(120		)	31,834

Note: Amounts above may not add due to rounding.



Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures

Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Diluted Earnings Per Share
Unaudited
(Dollars and shares in thousands, except per share amounts)

Comparable Prior Periods for Q3 2020 and Q4 2020 Outlook:	Quarter Ended October 27, 2018
	GAAP			Reconciling Items			Non-GAAP Adjusted
Contract revenues	$	848,237		$	—		$	848,237
Costs of earned revenues, excluding depreciation and amortization	687,164			—			687,164
General and administrative	68,763			—			68,763
Depreciation and amortization	45,533			—			45,533
Total	801,460			—			801,460
Interest expense, net³	(11,310		)	4,800			(6,510		)
Other income, net	2,817			—			2,817
Income before income taxes	38,284			4,800			43,084
Provision for income taxes⁴	10,454			1,321			11,775
Net income	$	27,830		$	3,479		$	31,309

Diluted earnings per common share	$	0.87		$	0.11		$	0.98

Shares used in computing diluted earnings per common share	31,835			—			31,835


	Quarter Ended January 26, 2019
	GAAP			Reconciling Items			Non-GAAP Adjusted
Contract revenues	$	748,619		$	—		$	748,619
Costs of earned revenues, excluding depreciation and amortization	633,279			—			633,279
General and administrative⁷	73,540			(15,306		)	58,234
Depreciation and amortization	45,909			—			45,909
Total	752,728			(15,306		)	737,422
Interest expense, net³	(12,447		)	4,881			(7,566		)
Other income, net	1,157			—			1,157
(Loss) income before income taxes	(15,399		)	20,187			4,788
(Benefit) provision for income taxes⁴	(3,345		)	4,886			1,541
Net (loss) income	$	(12,054	)	$	15,301		$	3,247

Diluted (loss) earnings per common share	$	(0.38	)	$	0.49		$	0.10

Shares used in computing diluted (loss) earnings per common share⁸	31,360			419			31,778

Note: Amounts above may not add due to rounding.



Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures

Outlook - Non-GAAP Adjusted Diluted Earnings Per Share
Unaudited

	Quarter Ending
	October 26, 2019
GAAP Diluted earnings per common share	$0.48 - $0.68

Adjustment:
Addback of after-tax non-cash amortization of debt discount on Notes⁹	0.12

Non-GAAP Adjusted Diluted Earnings per Common Share	$0.60 - $0.80

Shares used in computing Non-GAAP Adjusted Diluted Earnings per Common Share (in millions)	31.8

Notes to Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures

1) Amounts represent contract revenues from acquired businesses that were not owned for the full period in both the current and comparable prior periods, including any contract revenues from storm restoration services for these acquired businesses.

2) Top 5 Customers included Verizon, AT&T, CenturyLink, Comcast and Windstream for the quarter ended July 27, 2019, compared to Comcast, AT&T, Verizon, CenturyLink and Charter for the quarter ended July 28, 2018.

3) Non-GAAP Adjusted Interest expense, net excludes the non-cash amortization of the debt discount associated with the Notes.

4) Non-GAAP Adjusted Provision (Benefit) for income taxes excludes the tax related impact of the non-cash amortization of the debt discount associated with the Notes as well as the tax effects of the vesting and exercise of share-based awards.

5) During the quarter ended July 27, 2019, the Company recognized an income tax expense of $1.1 million related to a previous year tax filing.

6) The Company has a hedge in effect to offset the economic dilution of additional shares that would be issued in connection with the conversion of the Notes up to an average quarterly share price of $130.43. Non-GAAP Adjusted Diluted Shares excludes the GAAP dilutive share effect of the Notes. See the Company’s Form 8-K previously filed with the Securities and Exchange Commission on September 28, 2015 for further information regarding the Notes and note hedge.

7) During the quarter ended January 26, 2019, the Company recognized a pre-tax non-cash charge for accounts receivable and contract assets of $17.2 million related to balances owed from a customer. On February 25, 2019, this customer filed a voluntary petition for reorganization. Partially offsetting this charge, the Company’s stock-based compensation expense was reduced by approximately $1.9 million for the quarter ended January 26, 2019 as a result of the pre-tax non-cash charge for accounts receivable and contract assets.

8) For the quarter ended January 26, 2019, GAAP diluted shares excludes 418,695 common stock equivalents related to share-based awards as their effect would be antidilutive. Non-GAAP Adjusted Diluted Shares includes the dilutive effect of these additional shares.

9) The Company expects to recognize approximately $5.1 million in pre-tax interest expense during the quarter ending October 26, 2019 for the non-cash amortization of the debt discount associated with the Notes.

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Form 8-K DYCOM INDUSTRIES INC For: Aug 28

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