<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 October 31, 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, Suite 600
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 December 6, 1996
_____ __________________________________
Common Stock, par value $0.33 1/3 8,682,915
<PAGE> 2
DYCOM INDUSTRIES, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
________
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets-
October 31, 1996 and July 31, 1996 3
Condensed Consolidated Statements of
Operations for the Three Months Ended
October 31, 1996 and 1995 4
Condensed Consolidated Statements of
Cash Flows for the Three Months Ended
October 31, 1996 and 1995 5-6
Notes to Condensed Consolidated
Financial Statements 7-11
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 12-14
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 16
EXHIBIT INDEX 17
</TABLE>
<PAGE> 3
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
October 31, July 31,
1996 1996
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and equivalents $ 3,976,564 $ 3,835,479
Accounts receivable, net 13,825,642 13,306,064
Costs and estimated earnings in
excess of billings 9,264,483 7,137,212
Deferred tax assets, net 1,228,414 1,261,065
Other current assets 1,196,856 1,248,405
Total current assets 29,491,959 26,788,225
PROPERTY AND EQUIPMENT, net 20,062,263 19,574,410
OTHER ASSETS:
Intangible assets, net 4,800,674 4,839,447
Deferred tax assets 879,768 598,887
Other 239,241 272,916
Total other assets 5,919,683 5,711,250
TOTAL $55,473,905 $52,073,885
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 4,890,895 $ 3,541,789
Notes payable 1,831,202 2,758,795
Billings in excess of costs and
estimated earnings 38,714
Accrued self-insured claims 2,648,739 3,064,229
Income taxes payable 1,147,697 227,619
Other accrued liabilities 7,824,142 8,151,589
Total current liabilities 18,342,675 17,782,735
NOTES PAYABLE 9,625,462 9,452,630
ACCRUED SELF-INSURED CLAIMS 7,833,721 7,062,150
Total liabilities 35,801,858 34,297,515
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, par value $.33 1/3 per share:
50,000,000 shares authorized; 8,674,784
and 8,601,492 shares issued and
outstanding, respectively 2,891,594 2,867,164
Additional paid-in capital 24,682,897 24,473,269
Retained deficit (7,902,444) (9,564,063)
Total stockholders' equity 19,672,047 17,776,370
TOTAL $55,473,905 $52,073,885
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
October 31, October 31,
1996 1995
<S> <C> <C>
REVENUES:
Contract revenues earned $40,275,232 $37,365,990
Other, net 91,993 239,593
Total 40,367,225 37,605,583
Expenses:
Costs of earned revenues
excluding depreciation 32,418,734 30,615,519
General and administrative 3,571,985 3,898,159
Depreciation and amortization 1,488,144 1,376,420
Total 37,478,863 35,890,098
INCOME BEFORE INCOME TAXES 2,888,362 1,715,485
PROVISION (BENEFIT) FOR INCOME TAXES:
Current 1,474,974 1,163,888
Deferred (248,231) (417,041)
Total 1,226,743 746,847
NET INCOME $ 1,661,619 $ 968,638
EARNINGS PER COMMON AND COMMON
EQUIVALENT SHARE:
Primary $0.19 $0.11
Fully diluted $0.19 $0.11
SHARES USED IN COMPUTING
EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE:
Primary 8,897,939 8,546,782
Fully diluted 8,898,218 8,546,782
See notes to condensed consolidated financial statements--unaudited.
</TABLE>
<PAGE> 5
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
October 31, October 31,
1996 1995
<S> <C> <C>
Increase (Decrease) in Cash and Equivalents from:
OPERATING ACTIVITIES:
Net income $ 1,661,619 $ 968,638
Adjustments to reconcile net cash provided
by operating activities:
Depreciation and amortization 1,488,144 1,376,420
Gain on disposal of assets (19,562) (144,033)
Deferred income taxes (248,231) (417,041)
Changes in assets and liabilities:
Accounts receivable, net (519,578) 3,751,344
Unbilled revenues, net (2,165,985) (1,466,994)
Other current assets 51,549 155,560
Other assets 33,675 (6,276)
Accounts payable 1,349,106 (1,794,074)
Accrued self-insured claims and
other liabilities 28,085 895,898
Accrued income taxes 920,078 783,261
Net cash inflow from operating activities 2,578,900 4,102,703
INVESTING ACTIVITIES:
Capital expenditures (1,607,499) (943,240)
Proceeds from sale of assets 85,235 379,235
Net cash outflow from investing activities (1,522,264) (564,005)
FINANCING ACTIVITIES:
Principal payments on notes payable
and bank lines-of-credit (1,149,609) (1,649,581)
Exercise of stock options 234,058 23,008
Net cash outflow from financing activities (915,551) (1,626,573)
NET CASH INFLOW FROM ALL ACTIVITIES 141,085 1,912,125
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 3,835,479 4,306,675
CASH AND EQUIVALENTS AT END OF PERIOD $ 3,976,564 $ 6,218,800
See notes to condensed consolidated financial statements--unaudited.
</TABLE>
<PAGE> 6
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
October 31, October 31,
1996 1995
<S> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW AND
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Cash paid during the period for:
Interest $ 277,547 $ 445,161
Income taxes 560,965 392,005
Property and equipment acquired and
financed with:
Capital lease obligations $ 394,848
See notes to condensed consolidated financial statements--unaudited.
</TABLE>
<PAGE> 7
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 October 31, 1996 and July
31, 1996, the related condensed consolidated statements of operations for the
three months ended October 31, 1996 and 1995 and the condensed consolidated
statements of cash flows for the three months ended October 31, 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 three months ended October 31, 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
electric utility services contracting. All material intercompany accounts
and transactions have been eliminated.
USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities as of the
date of the financial statements and revenues and expenses during the period
reported. Actual results could differ from those estimates.
Estimates are used for the revenue recognition of work-in-process, allowance
for doubtful accounts, self-insured claims liability, deferred tax asset
valuation allowance, depreciation and amortization, and the estimated lives
of assets, including intangible assets.
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 as the facts that
require the revision become known. At the time a loss on a contract becomes
known, the entire amount of the estimated ultimate 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
revenues 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. The carrying amount reported in the condensed consolidated
balance sheets for cash and equivalents approximates its fair value.
<PAGE> 8
PROPERTY AND EQUIPMENT-- Property and equipment is stated at cost, reduced in
certain cases by valuation reserves. Depreciation and amortization is 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 its useful life are capitalized.
When assets are sold or retired, the cost and related accumulated
depreciation are removed from the accounts and the resulting gain or loss
is included in income.
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.
Amortization expense, which is comprised primarily of goodwill, was $38,773
for the three month periods ended October 31, 1996 and 1995. The intangible
assets are net of accumulated amortization of $1,035,043 at October 31, 1996
and $996,270 at July 31, 1996.
LONG-LIVED ASSETS-- In March 1995, the FASB issued SFAS No. 121 "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of". SFAS No. 121 requires that the long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. The Company adopted the provisions of SFAS No. 121
effective August 1, 1996 and determined that no impairment loss need be
recognized.
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 the
associated claim 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 $4,998,000 and $4,458,000 at
October 31, 1996 and July 31, 1996, 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 provided for the temporary
differences between the financial reporting basis and the tax basis of the
Company's assets and liabilities.
A valuation allowance is provided when it is more likely than not that some
portion of the Company's deferred tax assets will not be realized.
Management has evaluated the available evidence about the Company's 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 October 31, 1996 and July 31, 1996, deferred tax
assets are net of a valuation allowance of $728,491.
PER SHARE DATA-- Earnings per common and common equivalent share are computed
using the weighted average shares of common stock outstanding plus the common
stock equivalents arising from the effect of dilutive stock options, using the
treasury stock method.
<PAGE> 9
CHANGE IN ACCOUNTING PRINCIPLE-- In October, 1995, the Financial Accounting
Standards Board ("FASB") issued Statement of Financial Accounting Standards
("SFAS") No. 123, "Accounting for Stock Based Compensation," which was
effective for the Company beginning August 1, 1996. SFAS No. 123 requires
expanded disclosures of stock based compensation arrangements with employees
and encourages, but does not require, compensation cost to be measured based
on the fair value of the equity instrument awarded. Under SFAS No. 123,
companies are permitted, however, to continue to apply Accounting Principles
Board ("APB") Opinion No. 25, which recognizes compensation cost based on the
intrinsic value of the equity instrument awarded. The Company will continue
to apply APB Opinion No. 25 to its stock based compensation awards to
employees and will disclose in the annual financial statements the required
pro forma effect on net income and earnings per share.
3. ACCOUNTS RECEIVABLE
Accounts receivable, net consist of the following:
<TABLE>
<CAPTION>
October 31, July 31,
1996 1996
<S> <C> <C>
Contract billings $13,090,485 $12,305,652
Retainage 1,095,068 1,138,619
Other receivables 343,034 368,677
Total 14,528,587 13,812,948
Less allowance for doubtful accounts 702,945 506,884
Accounts receivable, net $13,825,642 $13,306,064
</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>
October 31, July 31,
1996 1996
<S> <C> <C>
Costs incurred on contracts in progress $22,717,616 $24,272,835
Estimated earnings thereon 217,614 334,905
22,935,230 24,607,740
Less billings to date 13,670,747 17,509,242
$ 9,264,483 $ 7,098,498
Included in the accompanying condensed
consolidated balance sheets under
the captions:
Costs and estimated earnings in
excess of billings $9,264,483 $ 7,137,212
Billings in excess of costs and
estimated earnings (38,714)
$9,264,483 $ 7,098,498
</TABLE>
<PAGE> 10
5. PROPERTY AND EQUIPMENT
The accompanying condensed consolidated balance sheets include the following
property and equipment:
<TABLE>
<CAPTION>
October 31, July 31,
1996 1996
<S> <C> <C>
Land $ 1,958,777 $ 1,711,464
Buildings 2,319,810 2,236,322
Leasehold improvements 787,180 743,101
Vehicles 22,527,661 22,153,365
Equipment and machinery 20,646,268 20,033,610
Furniture and fixtures 3,878,614 3,541,638
Total 52,118,310 50,419,500
Less accumulated depreciation and
amortization 32,056,047 30,845,090
Property and equipment, net $20,062,263 $19,574,410
</TABLE>
Certain subsidiaries of the Company entered into lease arrangements accounted
for as capitalized leases. The carrying value of capital leases at October
31, 1996 and July 31, 1996 was $742,180 and $372,170, respectively, net of
accumulated depreciation of $148,251 and $123,413 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>
October 31, July 31,
1996 1996
<S> <C> <C>
Bank Credit Agreement:
Revolving credit facility $ 9,000,000 $ 9,000,000
Term-loan 1,162,812 2,162,812
Equipment acquisition term-loans 591,667 704,167
Capital lease obligations 702,185 344,446
Total 11,456,664 12,211,425
Less current portion 1,831,202 2,758,795
Notes payable--non-current $ 9,625,462 $ 9,452,630
</TABLE>
At October 31, 1996, the Company had a bank credit agreement consisting of a
$9.0 million revolving credit facility, a $1.2 million term-loan, a $5.0
million equipment acquisition facility of which $3.7 million was available,
and a $9.8 million standby letter of credit facility of which $0.6 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
been paid during the three month period ending October 31, 1996.
Substantially all the Company's assets are pledged as collateral under the
terms of the agreement. At October 31, 1996, the Company was in compliance
with all financial covenants and conditions.
<PAGE> 11
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 October 31,
1996 and July 31, 1996). The interest rate on the outstanding equipment
acquisition term-loans are at the bank's prime interest rate plus three-
quarters percent (9.00% at October 31, 1996 and July 31, 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 three month
periods ended October 31, 1996 and 1995 were $240,343 and $429,008,
respectively. Such amounts are included in general and administrative
expenses in the accompanying condensed consolidated statements of operations.
The term-loan quarterly principal payments increased to $1.0 million in
September, 1995. 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 October 31, 1996, the Company had $9.2 million in outstanding standby
letters of credit issued as security to the Company's insurance
administrators as part of its self-insurance program. The capital equipment
acquisition facility and standby letter of credit facility expired November
30, 1996. The Company has petitioned the bank for renewal of these
facilities and anticipates that the renewals will be granted.
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 October 2001.
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> 12
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 and common equivalent share of $0.19
for the quarter ended October 31, 1996. This compares to earnings per
common and common equivalent share of $0.11 for the quarter ended October 31,
1995. Earnings per common share assuming full dilution was $0.19 for the
quarter ended October 31, 1996 compared to $0.11 for the quarter ended
October 31, 1995.
Contract revenues for the quarter ended October 31, 1996 increased 7.8% to
$40.3 million, as compared to $37.4 million for the same quarter last year.
The increase in contract revenues is primarily attributable to the increased
volume experienced in the telecommunication services group and the utility
line locating services group. The telecommunication services group contract
revenues increased 6.7% to $33.4 million and the utility line locating
services group contract revenues increased 35.9% to $4.4 million for the
current quarter compared to the same quarter last year. The electrical
services group contract revenues reflect a 12.4% decrease for the quarter as
compared to the corresponding period last year. The decline in the
electrical services group's contract revenues is attributable to lower volume
on existing multi-year comprehensive service contracts which was partially
offset by an increase in bid contracts.
The contract revenue mix between telecommunication services, utility line
locating services and electrical services for the quarter ended October 31,
1996 was 83%, 11%, and 6%, respectively, and 84%, 9% and 7%, respectively,
for the quarter ended October 31, 1995. Contract revenues from multi-year
comprehensive service contracts continues to be a significant source of
contract revenue. For the three month periods ended October 31, 1996 and
1995, multi-year comprehensive service contracts included in the
telecommunication services group, represented 58% and 65% of total contract
revenues, respectively. The decline in the multi-year comprehensive service
contracts was offset by an increase in contract revenues on bid contracts and
design and drafting activity during the quarter ended October 31, 1996
compared to the same period last year.
The Company's backlog of uncompleted work at October 31, 1996 was $224 million
as compared to $188 million at October 31, 1995. Several bid contracts were
awarded during the three month period ended October 31, 1996 in the
telecommunication services group totaling $8 million. Bid contracts totaling
$6 million were awarded in the electrical services group.
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 80% and 82% of contract revenues for
the quarters ended October 31, 1996 and 1995, respectively. As a percentage
of contract revenues, the Company's prime costs of direct labor, materials,
subcontractors, and equipment costs were 57% for the quarter ended October
31, 1996 compared to 61% for the corresponding period last year. Operating
efficiencies and productivity in the labor force and the utilization of more
modern equipment were the major factors contributing to the improved margins.
<PAGE> 13
General and administrative expenses decreased $0.3 million for the quarter
ended October 31, 1996 to $3.6 million as compared to $3.9 million for the
same quarter last year. This decrease is primarily attributable to reduced
interest costs on the declining balance of the outstanding indebtedness and
a reduction in professional fees and administrative salaries, wages, and
related payroll taxes.
The effective income tax rate differs from the statutory rate due to 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 primary sources of cash and equivalents has historically been
from operating activities and the proceeds from the sale of idle and surplus
real property and equipment. Strong operating results continued to finance
the Company's working capital and capital expenditure requirements. These
internally generated sources of funds continue to be the Company's primary
source of liquidity as available borrowing capabilities under the bank credit
agreement are limited. Net cash flows from operating activities were $2.6
million for the quarter ended October 31, 1996 as compared to $4.1 million
for the comparable quarter last year. This reduction in cash flow from
operating activities resulted from an increase in accounts receivable and
unbilled revenues, partially offset by an increase in accounts payable.
The Company's sources of funds provided for capital expenditures of $1.6
million during the three month period ended October 31, 1996. During the
current quarter, an additional $0.4 million of equipment was financed by
capital leases. These capital expenditures represent the normal replacement
of equipment. Aside from these capital expenditures, the Company obtained
approximately $0.7 million of equipment under various noncancelable operating
leases.
At October 31, 1996, the Company had outstanding borrowings under a term-loan
of $1.2 million, equipment acquisition term-loans aggregating $0.6 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 October 31, 1996). The interest rate on the
outstanding equipment acquisition term-loans is at the bank's prime interest
rate plus three-quarters percent (9.00% at October 31, 1996). The interest
rate on the equipment acquisition term-loans subsequent to November 30, 1995
is at the bank's prime interest rate plus one-half percent. The outstanding
principal on the term-loan and equipment acquisition term-loans are payable
quarterly through March 1997 and January 1998, respectively. The revolving
credit facility is used to finance working capital and is payable March 1998.
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 $0.6 million was available and a $5.0 million capital
equipment acquisition facility of which $3.7 million was available at October
31, 1996. The standby letter of credit facility is issued as security to the
Company's insurance administrators as part of its self-insurance program.
Both facilities expired November 30, 1996. The Company has petitioned the
bank for renewal of these facilities and anticipates that the renewals will
be granted.
The bank credit agreement contains provisions regarding minimum working
capital, tangible net worth, debt-to-equity ratios and certain other
financial covenants. At October 31, 1996, the Company was in compliance with
all financial covenants and conditions.
<PAGE> 14
No cash dividends have been paid during the quarter ended October 31, 1996.
The Board 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. The Company's bank
credit agreement limits the payment of cash dividends to 33 1/3 percent of
earnings available for distribution as dividends.
The Company foresees its capital resources together 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 including, the Company's
success in bidding on future contracts and the Company's ability to
effectively manage controllable costs.
<PAGE> 15
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 17
(b) Reports On Form 8-K
No reports on Form 8-K were filed on behalf of the Registrant during the
quarter ended October 31, 1996.
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities and 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: December 11, 1996 /s/ Thomas R. Pledger
_________________ ____________________________
Thomas R. Pledger
Chairman and Chief Executive
Officer
Date: December 11, 1996 /s/ Steven Nielsen
_________________ ____________________________
Steven E. Nielsen
President and Chief Operating
Officer
Date: December 11, 1996 /s/ Douglas J. Betlach
_________________ ____________________________
Douglas J. Betlach
Vice President and Chief
Financial Officer
</TABLE>
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Description
______ ___________
<C> <C>
(11) Statement re computation of per share earnings
(27) Financial Data Schedule
</TABLE>
EXHIBIT 11
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
THE QUARTERS ENDED OCTOBER 31, 1996 AND 1995
(WHOLE DOLLARS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
October 31, October 31,
1996 1995
<S> <C> <C>
Net Income (Loss) Applicable
to Common stock $1,661,619 $ 968,638
========= ==========
Primary Earnings (Loss):
Weighted average number of
common shares outstanding 8,664,449 8,546,782
Common share equivalents arising
from stock options<F1> 233,490 0
---------- ----------
Weighted average number of
common shares as adjusted 8,897,939 8,546,782
========== ==========
Net Income (Loss) per common
and common equivalent share $ 0.19 $ 0.11
========== ==========
Fully Diluted Earnings (Loss):
Weighted average number of
common shares outstanding 8,664,449 8,546,782
Common share equivalents arising
from stock options<F1> 233,769 0
---------- ----------
Weighted average number of
Common shares as adjusted 8,898,218 8,546,782
========== ==========
Net Income (Loss) per common
and common equivalent share $ 0.19 $ 0.11
========== ==========
<FN>
<F1>
In the quarter ended October 31, 1995 common share equivalents arising from
stock options did not impact the per share amounts as they were either
insignificant or anti-dilutive.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE DYCOM
INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEET AT OCTOBER 31, 1996 AND
THE CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED
OCTOBER 31, 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. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> OCT-31-1996
<EXCHANGE-RATE> 1
<CASH> 3,976,564
<SECURITIES> 0
<RECEIVABLES> 14,185,553
<ALLOWANCES> 702,945
<INVENTORY> 9,264,483
<CURRENT-ASSETS> 29,491,959
<PP&E> 52,118,310
<DEPRECIATION> 32,056,047
<TOTAL-ASSETS> 55,473,905
<CURRENT-LIABILITIES> 18,342,675
<BONDS> 11,456,664
0
0
<COMMON> 2,891,594
<OTHER-SE> 16,780,453
<TOTAL-LIABILITY-AND-EQUITY> 55,473,905
<SALES> 0
<TOTAL-REVENUES> 40,275,232
<CGS> 0
<TOTAL-COSTS> 32,418,734
<OTHER-EXPENSES> 1,488,144
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 256,371
<INCOME-PRETAX> 2,888,362
<INCOME-TAX> 1,226,743
<INCOME-CONTINUING> 1,661,619
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,661,619
<EPS-PRIMARY> .19
<EPS-DILUTED> .19
</TABLE>
