<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________to________
Commission file number 0-5423
DYCOM INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Florida 59-1277135
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4440 PGA Boulevard, Palm Beach Gardens, Florida 33410
(Address of principal executive office) (Zip Code)
(561) 627-7171
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No __
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding as of June 7, 1996
_____ __________________________________
Common Stock, par value $0.33 1/3 8,583,843
<PAGE> 2
DYCOM INDUSTRIES, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
________
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets-
April 30, 1996 and July 31, 1995 3
Condensed Consolidated Statements of
Operations for the Three Months Ended
April 30, 1996 and 1995 4
Condensed Consolidated Statements of
Operations for the Nine Months Ended
April 30, 1996 and 1995 5
Condensed Consolidated Statements of
Cash Flows for the Nine Months Ended
April 30, 1996 and 1995 6-7
Notes to Condensed Consolidated
Financial Statements 8-12
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 13-15
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 16
SIGNATURES 17
EXHIBIT INDEX 18
</TABLE>
<PAGE> 3
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
April 30, July 31,
1996 1995
____ ____
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and equivalents $ 4,836,484 $ 4,306,675
Accounts receivable, net 11,572,613 16,330,477
Costs and estimated earnings in
excess of billings 7,074,731 5,223,425
Deferred tax assets 929,745 385,755
Other current assets 1,290,037 1,396,201
------------ ------------
Total current assets 25,703,610 27,642,533
------------ ------------
PROPERTY AND EQUIPMENT, net 18,752,976 18,802,563
------------ ------------
OTHER ASSETS:
Intangible assets, net 4,878,218 4,994,535
Other 299,097 353,227
------------ ------------
Total other assets 5,177,315 5,347,762
------------ ------------
TOTAL $ 49,633,901 $ 51,792,858
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 3,334,507 $ 5,607,567
Notes payable 3,753,154 4,955,080
Billings in excess of costs and
estimated earnings 100,951
Accrued self-insured claims 2,733,953 2,266,855
Income taxes payable 1,096,964 621,483
Other accrued liabilities 7,280,953 6,585,387
------------ ------------
Total current liabilities 18,199,531 20,137,323
NOTES PAYABLE 9,505,352 13,870,064
ACCRUED SELF-INSURED CLAIMS 6,967,192 6,598,372
------------ ------------
Total liabilities 34,672,075 40,605,759
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, par value $.33 1/3 per share:
50,000,000 shares authorized; 8,579,181
and 8,543,990 shares issued and
outstanding, respectively 2,859,726 2,847,997
Additional paid-in capital 24,399,287 24,293,309
Retained deficit (12,297,187) (15,954,207)
------------ ------------
Total stockholders' equity 14,961,826 11,187,099
------------ ------------
TOTAL $ 49,633,901 $ 51,792,858
============= ============
See notes to condensed consolidated financial statements--unaudited.
</TABLE>
<PAGE> 4
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
___________________________
April 30, April 30,
1996 1995
____ ____
<S> <C> <C>
REVENUES:
Contract revenues earned $ 34,529,891 $ 35,880,085
Other, net 860,754 648,252
------------ ------------
Total 35,390,645 36,528,337
------------ ------------
EXPENSES:
Costs of earned revenues
excluding depreciation 27,426,818 29,758,702
General and administrative 3,638,872 3,407,562
Depreciation and amortization 1,359,242 1,354,643
------------ ------------
Total 32,424,932 34,520,907
------------ ------------
INCOME BEFORE INCOME TAXES 2,965,713 2,007,430
------------ ------------
PROVISION (BENEFIT) FOR INCOME TAXES:
Current 1,500,211 785,876
Deferred (238,648) 170,252
------------ ------------
Total 1,261,563 956,128
------------ ------------
NET INCOME $ 1,704,150 $ 1,051,302
============ ============
NET INCOME PER COMMON SHARE $ 0.20 $ 0.12
====== ======
See notes to condensed consolidated financial statements--unaudited.
</TABLE>
<PAGE> 5
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended
___________________________
April 30, April 30,
1996 1995
____ ____
<S> <C> <C>
REVENUES:
Contract revenues earned $104,544,413 $105,607,532
Other, net 1,283,278 1,136,287
------------ ------------
Total 105,827,691 106,743,819
------------ ------------
EXPENSES:
Costs of earned revenues
excluding depreciation 84,331,152 86,451,747
General and administrative 11,073,271 10,423,662
Depreciation and amortization 4,138,546 4,461,447
------------ ------------
Total 99,542,969 101,336,856
------------ ------------
INCOME BEFORE INCOME TAXES 6,284,722 5,406,963
------------ ------------
PROVISION (BENEFIT) FOR INCOME TAXES:
Current 3,171,692 2,139,210
Deferred (543,990) 170,252
------------ ------------
Total 2,627,702 2,309,462
------------ ------------
NET INCOME $ 3,657,020 $ 3,097,501
============ ============
NET INCOME PER COMMON SHARE $ 0.43 $ 0.36
====== ======
See notes to condensed consolidated financial statements--unaudited.
</TABLE>
<PAGE> 6
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended
___________________________
April 30, April 30,
1996 1995
____ ____
<S> <C> <C>
Increase (Decrease) in Cash and equivalents from:
OPERATING ACTIVITIES:
Net income $ 3,657,020 $ 3,097,501
Adjustments to reconcile net cash provided
by operating activities:
Depreciation and amortization 4,138,546 4,461,447
Gain on disposal of assets (945,910) (745,390)
Deferred income taxes (543,990) 170,252
Changes in assets and liabilities:
Accounts receivable, net 4,757,864 (170,179)
Unbilled revenues, net (1,952,257) (1,599,064)
Other current assets 106,164 (93,864)
Other assets 54,130 185,939
Accounts payable (2,273,060) 76,227
Accrued self-insured claims and
other liabilities 1,531,484 416,073
Accrued income taxes 475,481 616,594
------------ ------------
Net cash inflow from operating activities 9,005,472 6,415,536
------------ ------------
INVESTING ACTIVITIES:
Capital expenditures (5,097,060) (4,913,386)
Proceeds from sales of assets 2,070,328 1,932,825
------------ ------------
Net cash outflow from investing activities (3,026,732) (2,980,561)
------------ ------------
FINANCING ACTIVITIES:
Borrowing on bank lines-of-credit 1,350,000
Principal payments on notes payable
and bank lines-of-credit (5,566,638) (3,141,395)
Exercise of stock options 117,707 45,000
------------ ------------
Net cash outflow from financing activities (5,448,931) (1,746,395)
------------ ------------
NET CASH INFLOW FROM ALL ACTIVITIES 529,809 1,688,580
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 4,306,675 2,625,783
------------ ------------
CASH AND EQUIVALENTS AT END OF PERIOD $ 4,836,484 $ 4,314,363
============ ============
See notes to condensed consolidated financial statements--unaudited.
</TABLE>
<PAGE> 7
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended
___________________________
April 30, April 30,
1996 1995
____ ____
<S> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW AND
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Cash paid during the period for:
Interest $ 1,200,196 $ 1,453,559
Income taxes 2,753,674 1,702,804
Property and equipment acquired and financed
with capital lease obligations $ 153,003
See notes to condensed consolidated financial statements--unaudited.
</TABLE>
<PAGE> 8
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS--Unaudited
1. The accompanying condensed consolidated balance sheets of Dycom
Industries, Inc. ("Dycom" or the "Company") as of April 30, 1996 and July
31, 1995, the related condensed consolidated statements of operations for
the three and nine months ended April 30, 1996 and 1995 and the condensed
consolidated statements of cash flows for the nine months ended April 30, 1996
and 1995 reflect all normal recurring adjustments which are, in the
opinion of management, necessary for a fair presentation of such statements.
The results of operations for the nine months ended April 30, 1996 are not
necessarily indicative of the results which may be expected for the entire
year.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION-- The condensed consolidated financial statements
include Dycom Industries, Inc. and its subsidiaries, all of which are
wholly-owned. The Company's operations consist primarily of telecommunication
and utility services contracting. All material intercompany accounts and
transactions have been eliminated.
REVENUE-- Income on long-term contracts is recognized on the
percentage-of-completion method based primarily on the ratio of contract
costs incurred to date to total estimated contract costs. As some of these
contracts extend over one or more years, revisions in cost and profit
estimates during the course of the work are reflected in the accounting
period in which the facts which require the revision become known. At the
time a loss on a contract becomes known, the entire amount of the estimated
contract loss is accrued. Income on short-term unit contracts is recognized
as the related work is completed. Work-in-process on unit contracts is based
on management's estimate of work performed but not billed.
"Costs and estimated earnings in excess of billings" represent the excess
of contract revenues recognized under the percentage-of-completion method
of accounting for long-term contracts and work-in-process on unit contracts
over billings to date. For those contracts in which billings exceed
contract revenue recognized to date, such excesses are included in the
caption "Billings in excess of costs and estimated earnings".
CASH AND EQUIVALENTS-- Cash and equivalents include cash balances in excess
of the daily requirements which are invested in overnight repurchase
agreements, certificates of deposits, and various other financial
instruments having a maturity of three months or less. For purposes of the
condensed consolidated statements of cash flows, the Company considers
these amounts to be cash equivalents.
PROPERTY AND EQUIPMENT-- Property and equipment are stated at cost, reduced
in certain cases by valuation reserves. Depreciation and amortization are
computed over the estimated useful life of the assets utilizing the
straight-line method. The estimated useful lives of the assets are:
buildings--20-31 years; leasehold improvements--the term of the respective
lease or the estimated useful life of the improvement, whichever is
shorter; vehicles--3-7 years; equipment and machinery--3-10 years; and
furniture and fixtures--3-10 years. Maintenance and repairs are expensed
as incurred; expenditures that enhance the value of the property or extend
their useful lives are capitalized. When assets are sold or retired, the
cost and the accumulated depreciation are removed from the accounts and the
resulting gain or loss is included in income.
<PAGE> 9
INTANGIBLE ASSETS-- The excess of the purchase price over the fair market
value of the tangible net assets of acquired businesses (goodwill) is
amortized on the straight-line method over 40 years. The appropriateness
of the carrying value of intangible assets is continually reviewed and
adjusted where appropriate. The ongoing assessment of intangible assets
for impairment is based on the recoverability of such amounts through
future operations.
Intangible assets are net of accumulated amortization of $957,499 at April 30,
1996 and $841,182 at July 31, 1995. Amortization expense for each of the nine
month periods ended April 30, 1996 and 1995 was $116,317.
SELF-INSURED CLAIMS LIABILITY-- The Company is primarily self-insured, up
to certain limits, for automobile and general liability, workers'
compensation, and employee group health claims. A liability for unpaid
claims and associated expenses, including incurred but not reported losses,
is actuarially determined and reflected in the condensed consolidated
financial statements as an accrued liability. The self-insured claims
liability includes incurred but not reported losses of $4,404,000 and
$5,072,000 at April 30, 1996 and July 31, 1995, respectively. The
determination of such claims and expenses and the appropriateness of the
related liability is continually reviewed and updated.
INCOME TAXES-- The Company and its subsidiaries file a consolidated
federal income tax return. Deferred income taxes are recognized for the tax
consequences of temporary differences by applying enacted statutory tax rates
to differences between the financial statement carrying value and the tax basis
of the Company's existing assets and liabilities. The effect on deferred taxes
of a change in tax law or rates is recognized in income in the period that
includes the enactment date.
A valuation allowance is provided when it is more likely than not that some
portion of the deferred tax asset will not be realized. Management has
evaluated the available evidence about future taxable income and other possible
sources of realization of deferred tax assets. The valuation allowance
recorded in the financial statements reduces deferred tax assets to an amount
that represents management's best estimate of the amount of such deferred tax
assets that more likely than not will be realized. Accordingly, at April 30,
1996 and July 31, 1995, deferred tax assets are net of a valuation allowance of
$1,786,518.
PER SHARE DATA-- Per common share amounts are computed on the basis of weighted
average shares of common stock outstanding, plus common stock equivalent shares
arising from the effect of dilutive stock options, using the treasury stock
method. In the three and nine month periods ended April 30, 1996 and 1995,
stock options did not impact the per share amounts as they were either
insignificant or antidilutive. The weighted average number of shares was
8,564,660 and 8,540,282 for the three month periods ended April 30, 1996 and
1995, respectively, and 8,554,808 and 8,532,671 for the nine month periods
ended April 30, 1996 and 1995, respectively.
<PAGE> 10
3. ACCOUNTS RECEIVABLE
Accounts receivable, net consist of the following:
<TABLE>
<CAPTION>
April 30, July 31,
1996 1995
____ ____
<S> <C> <C>
Contract billings $ 10,673,623 $ 15,222,897
Retainage 1,263,195 1,201,454
Other receivables 432,046 773,704
------------ ------------
Total 12,368,864 17,198,055
Less allowance for doubtful accounts 796,251 867,578
------------ ------------
Accounts receivable, net $ 11,572,613 $ 16,330,477
============ ============
</TABLE>
4. COSTS AND ESTIMATED EARNINGS ON CONTRACTS IN PROGRESS
The accompanying condensed consolidated balance sheets include costs and
estimated earnings on contracts in progress, net of progress billings as
follows:
<TABLE>
<CAPTION>
April 30, July 31,
1996 1995
____ ____
<S> <C> <C>
Costs incurred on contracts in progress $ 24,161,454 $ 20,862,665
Estimated earnings thereon 611,796 609,280
------------ ------------
24,773,250 21,471,945
Less billings to date 17,698,519 16,349,471
------------ ------------
$ 7,074,731 $ 5,122,474
============ ============
Included in the accompanying condensed
consolidated balance sheets under
the captions:
Costs and estimated earnings in
excess of billings $ 7,074,731 $ 5,223,425
Billings in excess of costs and
estimated earnings (100,951)
------------ ------------
$ 7,074,731 $ 5,122,474
============ ============
</TABLE>
<PAGE> 11
5. PROPERTY AND EQUIPMENT
The accompanying condensed consolidated balance sheets include the following
property and equipment:
<TABLE>
<CAPTION>
April 30, July 31,
1996 1995
____ ____
<S> <C> <C>
Land $ 1,711,464 $ 1,723,527
Buildings 2,236,322 2,223,627
Leasehold improvements 808,538 750,955
Vehicles 21,349,522 21,381,527
Equipment and machinery 18,931,338 19,711,023
Furniture and fixtures 3,177,525 2,930,467
------------ ------------
Total 48,214,709 48,721,126
Less accumulated depreciation and
amortization 29,461,733 29,918,563
------------ ------------
Property and equipment, net $ 18,752,976 $ 18,802,563
============ ============
</TABLE>
Certain subsidiaries of the Company entered into lease arrangements accounted
for as capitalized leases. The carrying value of capital leases at April 30,
1996 and July 31, 1995 was $276,236 and $326,704, respectively, net of
accumulated depreciation at April 30, 1996 and July 31, 1995 of $84,006 and
$33,538, respectively. Capital leases are included as a component of equipment
and machinery.
6. NOTES PAYABLE
Notes and loans payable are summarized by type of borrowings as follows:
<TABLE>
<CAPTION>
April 30, July 31,
1996 1995
____ ____
<S> <C> <C>
Bank Credit Agreement:
Revolving credit facility $ 9,000,000 $ 9,000,000
Term-loan 3,199,650 7,948,469
Equipment acquisition term-loans 816,667 1,566,667
Capital lease obligations 242,189 310,008
------------ ------------
Total 13,258,506 18,825,144
Less current portion 3,753,154 4,955,080
------------ ------------
Notes payable--non-current $ 9,505,352 $ 13,870,064
============ ============
</TABLE>
At April 30, 1996, the Company had a bank credit agreement consisting of a
$3.2 million term-loan, a $9.0 million revolving credit facility, a $9.8
million standby letter of credit facility of which $0.2 million was available
and a $5.0 million capital equipment acquisition facility of which $3.9 million
was available. The bank credit agreement contains restrictions which, among
other things, require maintenance of certain financial ratios and covenants,
restrict encumbrances of assets and creation of indebtedness, and limit the
payment of cash dividends. Cash dividends are limited to 33 1/3 percent of
earnings available for distribution as dividends. No cash dividends have
<PAGE> 12
been paid during the nine month period ended April 30, 1996. Substantially all
of the Company's assets are pledged as collateral under the terms of the
agreement. At April 30, 1996, the Company was in compliance with all financial
covenants and conditions.
The interest rate on the term-loan and the revolving credit facility is at the
bank's prime interest rate plus one-half percent (8.75% at April 30, 1996).
The interest rate on the equipment acquisition term-loans is at the bank's
prime interest rate plus three-quarters of one percent (9.00% April 30, 1996).
The interest rate on equipment acquisition term-loans subsequent to November
30, 1995 is at the bank's prime interest rate plus one-half percent. Interest
costs incurred on notes payable, all of which were expensed, for the nine month
periods ended April 30, 1996 and 1995 were $1,141,292 and $1,446,187,
respectively. Such amounts are included in general and administrative expenses
in the accompanying condensed consolidated statements of operations.
Beginning September 1995, the term-loan quarterly principal payments increased
to $1.0 million from $750,000. The outstanding balance of the equipment
acquisition term-loans is payable quarterly through January 1998.
The revolving credit facility is used to finance working capital and is payable
in March 1998.
At April 30, 1996, the Company had $9.6 million outstanding standby letters of
credit issued as security to the Company's insurance administrators as part of
its self-insurance program. During the quarter ended January 31, 1996, the
capital equipment acquisition facility and the standby letter of credit
facility were renewed for a period of one year expiring November 30, 1996. In
addition, the bank increased the borrowing capacity of the capital equipment
acquisition facility from $3.0 million to $5.0 million and reduced the interest
rate on future borrowings from the bank's prime interest rate plus
three-quarters of one percent to the bank's prime interest rate plus one-half
percent. No additional borrowings under the capital equipment acquisition
facility occurred during the quarter ended April 30, 1996.
In addition to the borrowings under the bank credit agreement, certain
subsidiaries have outstanding obligations under capital leases. The
obligations are payable in monthly installments expiring at various dates
through July 1998.
7. COMMITMENTS AND CONTINGENCIES
In the normal course of business, certain subsidiaries of the Company have
pending and unasserted claims. Although the ultimate resolution and
liability of these claims cannot be determined, management believes the
final disposition of these claims will not have a material adverse impact on
the Company's consolidated financial condition or results of operations.
<PAGE> 13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of the Company's
consolidated financial condition and results of operations. The discussion
should be read in conjunction with the condensed consolidated financial
statements and notes thereto.
Results of Operations
The Company reported earnings per common share of $0.20 and $0.43 for the three
and nine month periods ended April 30, 1996, respectively, as compared to
earnings per common share of $0.12 and $0.36, respectively, for the
corresponding periods last year.
Contract revenues for the quarter ended April 30, 1996 decreased 3.8% to
$34.5 million, as compared to $35.9 million for the same quarter last year.
The telecommunication services and utility line locating services groups
contract revenue decreased 2.8% to $31.9 million for the quarter. The
electrical services group contract revenue decreased $0.4 million to $2.6
million for the quarter as compared to the corresponding period last year. The
decline in total contract revenues is primarily attributed to lower volumes on
multi-year comprehensive services contracts within the telecommunication
services group and loss of certain utility locating contracts.
For the nine month period ended April 30, 1996 contract revenues of $104.5
million decreased slightly as compared to the $105.6 million reported in the
corresponding period last year.
The contract revenue mix between telecommunication services, utility line
locating services and electrical services over recent years has reflected a
steady increase in contract revenues from the telecommunication services
group offset by a decline in the utility line locating group. The contract
revenue mix between telecommunication services, utility line locating services
and electrical services for the quarter ended April 30, 1996 was 82%, 10%, and
8%, respectively, and 81%, 11% and 8%, respectively, for the quarter ended
April 30, 1995. For the nine-month period ended April 30, 1996, the contract
revenue mix between telecommunications services group, utility line locating
group and electrical services group was 83%, 9%, and 8%, respectively as
compared to 81%, 11%, and 8%, respectively, for the corresponding period last
year. Contract revenue from multi-year comprehensive services contracts
continue to be a significant source of contract revenue. For the three and
nine month periods ended April 30, 1996, multi-year comprehensive services
contracts included in the telecommunications services group, represented 62%
and 64% of total contract revenues, respectively.
The Company's backlog of uncompleted work at April 30, 1996 was $231
million as compared to $192 million at April 30, 1995. Contracts awarded
during the quarter ended April 30, 1996 include the renewal of two multi-year
comprehensive services contract with combined estimated revenues of $21.8
million, two new multi-year utility line locating contracts and the renewal of
a multi-year utility line locating contract with combined estimated revenues of
$19.6 million, and a new multi-year electrical services contract with estimated
revenues of $2.5 million.
The Company's costs and operating expenses may be affected by a number of
factors including contract volumes, character of services rendered, work
locations, competition, and changes in productivity. Costs of earned
revenues, excluding depreciation, were 79% and 83% of contract revenues for the
quarters ended April 30, 1996 and 1995, respectively, and 81% and 82% for
<PAGE> 14
the nine month periods ended April 30, 1996 and 1995, respectively. For the
quarter ended April 30, 1996 costs of earned revenues decreased as a percentage
of contract revenues as compared to the same period last year primarily due to
lower subcontractors cost. The Company's prime costs of direct labor,
materials, subcontractors, and equipment costs remained relatively stable for
the nine month periods ended April 30, 1996 compared to the corresponding
period last year.
General and administrative expenses for the quarter ended April 30, 1996
increased $0.2 million to $3.6 million as compared to $3.4 million reported in
the corresponding period last year. This increase is primarily attributable to
group insurance costs which increased by $0.2 million and other general
expenses which increased by $0.2 million. The increase in general and
administrative expenses was partially offset by a $0.2 million decrease in
interest expense. For the nine month period ended April 30, 1996 general and
administrative expenses increased $0.7 million to $11.1 million as compared to
$10.4 million for the corresponding period last year. This increase is
primarily attributable to payroll and payroll taxes which increased by $0.5
million, general insurance costs which increased by $0.2 million, and other
general expenses which increased by $0.5 million. These increases in general
and administrative expenses were partially offset by a $0.2 million decrease in
the provision for doubtful accounts, and a $0.3 million decrease in interest
expense.
The Company's 41.8% effective tax rate for the nine month period ended April
30, 1996, is the result of state income taxes, the amortization of intangible
assets with no tax benefit, and other non-deductible expenses for tax purposes.
Liquidity and Capital Resources
The Company's sources of funds are generated from operations, proceeds from
the sale of idle real property and surplus equipment and its available
borrowing capabilities under the current bank credit agreement. Cash flow from
operating activities increased $2.6 million to $9.0 million in comparison
to the same period last year. Improved receivable collections contributed to
the increase in cash flow during this period.
The Company's sources of funds provided for capital expenditures of $5.1
million during the nine month period ended April 30, 1996. These capital
expenditures resulted from the normal replacement of equipment. Aside from
these capital expenditures, the Company obtained approximately $2.2 million of
equipment under various noncancelable operating leases.
At April 30, 1996, the Company had outstanding borrowings under a term-loan
of $3.2 million, equipment acquisition term-loans aggregating $0.8 million, and
a revolving credit facility of $9.0 million. The interest rate on the
term-loan and revolving credit facility is at the bank's prime interest rate
plus one-half percent (8.75% at April 30, 1996). The interest rate on the
equipment acquisition term-loans is at the bank's prime interest rate plus
three-quarters of one percent (9.00% at April 30, 1996). During the nine month
period ended April 30, 1996, the Company reduced its outstanding debt balance
by $5.6 million, which included a $1.7 million prepayment of the term-loan
principal utilizing the proceeds received from the sale of surplus equipment
and real property. Substantially all of the Company's assets are pledged as
collateral in support of these facilities.
In addition, the Company has available a $9.8 million standby letter of
credit facility of which $0.2 million is available and a $5.0 million capital
equipment acquisition facility of which $3.9 million is available at April 30,
<PAGE> 15
1996. The standby letter of credit facility is issued as security to the
Company's insurance administrators as part of its self-insurance program.
During the quarter ended January 31, 1996, the capital equipment acquisition
facility and the standby letter of credit facility were renewed for a period of
one year expiring November 30, 1996. In addition, the bank increased the
borrowing capacity of the capital equipment acquisition facility from $3.0
million to $5.0 million and reduced the interest rate on future borrowings from
the bank's prime interest rate plus three-quarters of one percent to the bank's
prime interest rate plus one-half percent. No additional borrowings under the
capital equipment acquisition facility occurred during the quarter ended April
30, 1996.
The bank credit agreement contains provisions regarding minimum working
capital, tangible net worth, debt-to-equity ratios and certain other financial
covenants. At April 30, 1996, the Company was in compliance with all financial
covenants and conditions.
Cash flow generated from operations will continue to be the Company's primary
source of funds as available borrowing capabilities under the bank credit
agreement are limited. The Company foresees these available sources of funds
along with existing cash balances to be sufficient to meet its financial
obligations, including the scheduled debt payments under the bank credit
agreement and operating lease commitments, and to support the Company's normal
replacement of equipment at its current level of business. The Company's
future operating results and cash flows may be affected by a number of factors,
such as, the Company's success in bidding on future contracts and the Company's
ability to effectively manage controllable costs.
No cash dividends have been paid during the nine month period ended April 30,
1996. The Company's Board of Directors will determine future dividend policies
based on financial condition, profitability, cash flow, capital requirements,
and business outlook, as well as other factors relevant at the time. Cash
dividends are limited to 33 1/3 percent of earnings available for distribution
as dividends under the terms of the bank credit agreement.
<PAGE> 16
PART II. OTHER INFORMATION
__________________________
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibits furnished pursuant to the requirements of Form 10-Q:
See Exhibit Index on Page 18
(b) Reports On Form 8-K
No reports on Form 8-K were filed on behalf of the Registrant during the
quarter ended April 30, 1996.
<PAGE> 17
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.
DYCOM INDUSTRIES, INC.
Registrant
<TABLE>
<S> <C>
Date: June 13, 1996 /s/ Thomas R. Pledger
_________________ ____________________________
Thomas R. Pledger
Chairman and Chief Executive
Officer
Date: June 13, 1996 /s/ Ronald L. Roseman
_________________ ____________________________
Ronald L. Roseman
President and Chief Operating
Officer
Date: June 13, 1996 /s/ Douglas J. Betlach
_________________ ____________________________
Douglas J. Betlach
Vice President and Chief
Financial Officer
</TABLE>
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Description
______ ___________
<S> <C>
(27) Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE DYCOM
INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEET AT APRIL 30, 1996 AND
THE CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED
APRIL 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000067215
<NAME> DYCOM INDUSTRIES, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLAR
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-END> APR-30-1996
<EXCHANGE-RATE> 1
<CASH> 4,836,484
<SECURITIES> 0
<RECEIVABLES> 11,936,818
<ALLOWANCES> 796,251
<INVENTORY> 7,074,731
<CURRENT-ASSETS> 25,703,610
<PP&E> 48,214,709
<DEPRECIATION> 29,461,733
<TOTAL-ASSETS> 49,633,901
<CURRENT-LIABILITIES> 18,199,531
<BONDS> 13,258,506
0
0
<COMMON> 2,859,726
<OTHER-SE> 12,102,100
<TOTAL-LIABILITY-AND-EQUITY> 49,633,901
<SALES> 0
<TOTAL-REVENUES> 105,827,691
<CGS> 0
<TOTAL-COSTS> 84,331,152
<OTHER-EXPENSES> 4,138,546
<LOSS-PROVISION> 102,902
<INTEREST-EXPENSE> 1,141,292
<INCOME-PRETAX> 6,284,722
<INCOME-TAX> 2,627,702
<INCOME-CONTINUING> 3,657,020
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,657,020
<EPS-PRIMARY> .43
<EPS-DILUTED> .43
</TABLE>
