<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
----------
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 29, 1997
-------------------
Dycom Industries, Inc.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 0-5423 59-1277135
- ---------------------------- ------------ -------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
4440 PGA Boulevard, Suite 600 Palm Beach Gardens, Florida 33410
- -----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 627-7171
--------------------
<PAGE> 2
This amendment is filed to correct a transmission error that appeared in Item
7. Financial Statements and Exhibits, (b) Pro forma financial information,
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS
ENDED APRIL 30, 1997 in the line item Costs of earned revenue excluding
depreciation for CCG.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
Page
Audited financial statements of Communications
Construction Group, Inc. for the fiscal
years ended May 31, 1997 and 1996 F-1
(b) Pro forma financial information.
Introduction to unaudited pro forma condensed
financial statements. F-13
Unaudited pro forma combined consolidated balance
sheet as of April 30, 1997. F-14
Unaudited pro forma combined consolidated
statements of operations for the nine months
ended April 30, 1997 and 1996. F-15 to
F-16
<PAGE> 3
Page
Unaudited pro forma combined consolidated
balance sheets as of July 31, 1996 and 1995. F-17 to
F-18
Unaudited pro forma combined consolidated
statements of operations for the fiscal years
ended July 31, 1996, 1995, and 1994. F-19 to
F-21
Notes to unaudited pro forma combined
Financial statements. F-22
(c) Exhibits
99(i) Agreement and Plan of Merger ("the Merger Agreement")
dated July 7, 1997 among Dycom Industries, Inc., Dycom
Acquisitions, Inc., Communications Construction Group,
Inc., George Tamasi and Thomas Polis.
99(ii) Amendment to the Merger Agreement dated July 29,
1997 among the parties to the Merger Agreement.
99(iii) Articles of Merger of Dycom Acquisitions, Inc. into
Communications Construction Group, Inc. dated
July 29, 1997.
99(iv) Employment Agreement dated July 29, 1997 between
George Tamasi, Communications Construction Group,
Inc., and Dycom Industries, Inc.
99(v) Employment Agreement dated July 29, 1997 between
Thomas Polis, Communications Construction Group,
Inc., and Dycom Industries, Inc.
99(vi) Press Release issued July 30, 1997.
<PAGE> 4
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 hereunto duly authorized.
Dycom Industries, Inc.
(Registrant)
Date: November 5, 1997 /s/ Douglas J. Betlach
Douglas J. Betlach
Vice President, Treasurer and
Chief Financial Officer
<PAGE> 5
COMMUNICATIONS CONSTRUCTION GROUP, INC.
CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended May 31, 1997 and 1996
INDEX
<TABLE>
<CAPTION>
PAGE
<S> <C>
Independent Auditor's Report F-1
Consolidated Balance Sheets as of
May 31, 1997 and 1996 F-2
Consolidated Statements of Operations
for the years ended May 31, 1997 and 1996 F-3
Consolidated Statements of Cash Flows
for the years ended May 31, 1997 and 1996 F-4
Consolidated Statements of Changes in
Stockholders' Equity for the years ended F-5
May 31, 1997 and 1996
Notes to Consolidated Financial Statements F-6 to
F-12
/TABLE
<PAGE>
<PAGE> 6
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Communications Construction Group, Inc.
We have audited the accompanying consolidated balance sheets of
Communications Construction Group, Inc. (the "Company") as of May
31, 1997 and 1996, and the related consolidated statements of
operations, cash flows and changes in stockholders' equity for the
years then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial
position of Communications Construction Group, Inc. as of May 31,
1997 and 1996, and the consolidated results of its operations and
its cash flows for the year then ended in conformity with generally
accepted accounting principles.
/s/ Nowalk & Associates
Nowalk & Associates
Cranbury, New Jersey
July 23, 1997
F-1
<PAGE> 7
COMMUNICATIONS CONSTRUCTION GROUP, INC.
CONSOLIDATED BALANCE SHEETS
May 31,
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS 1997 1996
Current assets
Cash $ 401,482 $ 92,257
Accounts receivable
Trade, less allowance for doubtful
accounts of $76,551 and $99,159 11,080,515 7,988,550
Contract retainage 301,378 293,926
Unbilled receivables 178,186 382,072
Materials and supplies inventory 6,297
Prepaid expenses 545,691 36,547
Deferred tax assets 629,234
Other 328,139 158,728
Total current assets 13,464,625 8,958,377
Plant and equipment, net 6,841,609 4,940,060
Other assets
Deferred tax assets 106,000
Deposits 146,512 117,031
146,512 223,031
Total Assets $20,452,746 $14,121,468
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $ 319,563 $ 513,953
Note payable 4,712,895 3,985,119
Accounts payable 2,881,039 2,025,723
Accrued payroll and expenses 3,371,660 2,160,277
Dividends payable 6,000 -
Payroll and income taxes payable 2,167,139 1,055,712
Total current liabilities 13,458,296 9,740,784
Long-term debt, net of current maturities 1,149,533 1,575,207
Deferred tax liability 95,134
Total liabilities 14,702,963 11,315,991
Commitments and Contingencies
Stockholders' equity
Preferred stock 12% cumulative, $25 par value,
2,000 shares authorized,
issued and outstanding 50,000 50,000
Common stock - $1 par value, 1,000 shares
authorized, 140 shares issued and outstanding 140 140
Paid in capital 143,838 143,838
Retained earnings 5,555,805 2,611,499
Total stockholders' equity 5,749,783 2,805,477
Total $20,452,746 $14,121,468
The accompanying notes to consolidated financial statements
are an integral part of these statements.
</TABLE>
F-2
<PAGE> 8
COMMUNICATIONS CONSTRUCTION GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended May 31,
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Contract revenues earned $67,717,326 $50,121,009
Operating costs and expenses 53,290,045 40,995,700
Selling, general and administrative expenses 8,336,135 6,345,137
Interest expense, net of interest income 838,440 518,458
62,464,620 47,859,295
Income before income taxes 5,252,706 2,261,714
Provision for income taxes
Current 2,730,500 1,094,000
Deferred ( 428,100) ( 106,000)
2,302,400 988,000
Net income $ 2,950,306 $ 1,273,714
The accompanying notes to consolidated financial statements
are an integral part of these statements.
</TABLE>
F-3
<PAGE> 9
COMMUNICATIONS CONSTRUCTION GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended May 31,
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Cash flows from operations
Net income $2,950,306 $1,273,714
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 2,585,315 1,905,632
Provision for losses on trade accounts
receivable 26,939
Changes in assets and liabilities
(Increase) in receivables and contract
retainage (2,895,531) ( 511,510)
Decrease in inventory 6,297 -
(Increase) in deferred tax assets, net ( 428,100) ( 106,000)
(Increase) decrease in prepaid expenses
deposits and other assets ( 708,036) 20,084
Increase (decrease) in accounts payable and
accrued expenses 2,066,699 ( 758,856)
Increase in payroll and income
taxes payable 1,111,427 412,763
Net cash provided by operating activities 4,688,377 2,262,766
Cash flows from investing activities
Capital expenditures (4,482,796) (3,051,434)
Cash flows from financing activities
Principal payments on long-term debt ( 776,350) ( 922,129)
Proceeds from notes payable 1,083,518 1,507,149
(Payments) proceeds from notes payable -
stockholders ( 197,524) 183,768
Dividends ( 6,000)
Net cash provided by financing activities 103,644 768,788
Net increase (decrease) in cash 309,225 ( 19,880)
Cash at beginning of period 92,257 112,137
Cash at end of period $ 401,482 $ 92,257
Supplemental disclosures of cash flow information
Cash paid during the year for
Interest $ 838,440 $ 518,458
Income taxes $2,097,020 $ 750,237
The accompanying notes to consolidated financial statements
are an integral part of these statements.
</TABLE>
F-4
<PAGE> 10
COMMUNICATIONS CONSTRUCTION GROUP, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Years Ended May 31, 1997 and 1996
<TABLE>
<CAPTION>
Common Stock Preferred Stock
Number Number Paid in Retained
of Shares Amount of Shares Amount Capital Earnings
<S> <C> <C> <C> <C> <C> <C>
Balance, May 31, 1995 126 $126 $193,852 $1,337,785
Stock Issued at
Reorganization 14 $ 14 2,000 $50,000 $( 50,014)
Net income 1,273,714
Balance, May 31, 1996 140 $140 2,000 50,000 $143,838 $2,611,499
Net income 2,950,306
Preferred Dividend ( 6,000)
Balance, May 31, 1997 140 $140 2,000 $50,000 $143,838 $5,555,805
The accompanying notes to consolidated financial statements
are an integral part of these statements.
</TABLE>
F-5
<PAGE> 11
COMMUNICATIONS CONSTRUCTION GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 31, 1997 and 1996
1. The accounting policies which have a significant effect on the
operations of Communications Construction Group, Inc. (the Company) are
as follows:
Principals Of Consolidation
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiary, Tampol Enterprises, Inc. (Tampol). At
May 31, 1996, Tampol was merged into the Company. The Company's
operations consist primarily of cable TV services contracting. All
material intercompany accounts and transactions have been eliminated.
Equipment
Equipment is carried at cost. Depreciation and amortization, for
financial reporting purposes, is provided using a straight-line method
over the estimated useful lives of the related assets. An accelerated
method of depreciation is utilized for income tax purposes.
Gains or losses resulting from dispositions are included in operations.
Expenditures which improve and extend the life of an asset are
capitalized; maintenance and repairs are expensed.
Revenue and Cost Recognition
The Company derives its revenue principally from construction contracts
which extend over one year, that typically specify a price per mile or
foot of system cable or strand installed and price per unit of hardware
or equipment installed, subject to adjustments in specified
circumstances.
Revenue and associated costs are recognized as work progresses.
Revisions in cost and profit estimated during performance of the work are
reflected in the accounting periods in which the facts require
recognition. Contract costs include all direct material and labor costs
and those indirect costs related to contract performance. This policy
substantially approximates the percentage of completion method.
F-6
<PAGE> 12
COMMUNICATIONS CONSTRUCTION GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Engineering, design, selling, general and administrative costs are
charged to expenses as incurred. Billings in advance of performance are
accounted for as liabilities and are not recognized as revenue until such
time as the work is performed. Unbilled accounts receivable represent
revenue recognized for performance under contracts not yet billed.
Anticipated losses on contract operations are charged to operations at
the time such losses are known. In accordance with the terms of
contracts, an amount representing retainage is withheld until completion
of the project or until the end of pre-established phases. Final
payments of all such amounts may not be received within a one-year
period; however, in conformance with trade practice, the full amount of
such amounts withheld is included in current assets.
Income Taxes
Income tax expense is based on reported income adjusted for differences
that do not enter into the computation of taxes payable under applicable
tax laws. The Company and its subsidiary filed a consolidated federal
income tax return for fiscal year ended May 31, 1996. Deferred income
taxes are provided for temporary differences between the financial
reporting basis and the tax basis of the Company's assets and
liabilities.
2. PLANT AND EQUIPMENT
The following is a summary of plant and equipment at May 31
<TABLE>
<CAPTION>
1997 1996
<S> C> <C>
Machinery and equipment $ 2,810,841 $2,167,466
Office equipment 289,611 212,813
Furniture and fixture 180,939 164,139
Transportation equipment 9,023,633 6,231,982
Leasehold improvements 469,397 335,838
Tools 399,275 280,530
13,173,696 9,392,768
Less: accumulated depreciation ( 6,332,087) (4,452,708)
$ 6,841,609 $4,940,060
Depreciation expense amounted to approximately $2,585,315 and $1,905,632
for the years ended May 31, 1997 and 1996, respectively.
</TABLE>
F-7
<PAGE> 13
COMMUNICATIONS CONSTRUCTION GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. INCOME TAXES
The components of the provision (benefit) for income taxes are
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Current
Federal $2,002,600 $ 857,450
State 727,900 236,550
2,730,500 1,094,000
Deferred
Federal ( 293,400) ( 106,000)
State ( 134,700)
( 428,100) ( 106,000)
Total tax provision (benefit) $2,302,400 $ 988,000
The deferred tax provision (benefit) is the change in the deferred tax
assets and liabilities representing the tax consequences of changes in
the amount of temporary differences and changes in tax rates during the
year. The deferred tax assets and liabilities at May 31 are comprised
of the following
1997 1996
Deferred tax assets
Property and equipment $ $ 106,000
Non-deductible reserves 629,234
Deferred tax liabilities
Property and equipment ( 95,134)
Net deferred tax assets $ 534,100 $ 106,000
The difference between the total tax provision and the amount computed
by applying the statutory federal income tax rates to pre-tax income is
as follows
1997 1996
Statutory rate applied to pre-tax income $1,785,920 $ 768,983
State taxes, net of federal tax benefit 381,347 156,737
Adjustments for amounts not deductible 135,133 62,280
Total tax provision $2,302,400 $ 988,000
</TABLE>
F-8
<PAGE> 14
COMMUNICATIONS CONSTRUCTION GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. DEBT
On October 20, 1993, the Company entered into a new credit facility with
PNC Bank N.A., formerly Midlantic Bank N.A. which was then revised
December 1, 1996. The facility consists of a $8,500,000 revolving line
of credit. Currently, the bank is reviewing this line for extension.
This facility bears interest at various rates ranging from PNC Bank's
prime rate plus .25% (8.75% at May 31, 1997) and is collateralized by
75% of the trade accounts receivable less than 90 days old, inventories,
equipment and machinery.
The loan agreement contains certain annual financial covenants related
to tangible net worth, debt to tangible net worth and capital
expenditure limitations. For purposes of calculating these covenants,
the revolving credit facility has been treated as long term debt in
accordance with the intentions of the Company and PNC Bank N.A. The
agreement also contains a provision whereby repayment of the debt could
be accelerated at the sole discretion of PNC Bank N.A. should there be a
material and adverse change in the condition of the Company.
At May 31, 1996, the Company was in default with the capital
expenditures and liabilities to tangible net worth covenants of its loan
and security agreement with PNC Bank N.A. A waiver of these defaults
was obtained from PNC Bank N.A. on December 10. As of that date all
other terms and conditions of the agreement remained in force and
effect.
In September 1995, the Company entered a secured financing arrangement
with CIT Group/Equipment Financing, Inc. in the amount of $922,510. A
summary of the key provisions of this debt instrument are
i. A processing fee of one percent
ii. Collateral pledged was all transportation equipment
iii. 48 monthly principal payments of $19,218.95
iv. Interest is calculated using lenders' prime interest rate plus
.75%
In February 1997, the Company borrowed an additional $355,742 from CIT
Group/Equipment Financing, Inc. at 9.5% fixed for four years.
The Company was advanced $1,000,000 by Comcast Corporation in 1994. In
fiscal 1997, the loan was paid in full.
F-9
<PAGE> 15
COMMUNICATIONS CONSTRUCTION GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. DEBT (Continued)
Long term debt as of May 31, 1997 and 1996 consists of the following
<TABLE>
<CAPTION>
Original Balance Interest
Loan Amount 1997 1996 Rate
<S> <C> <C> <C> <C>
CIT Group
Four year term loan $ 922,510 $ 538,131 $768,758 Prime plus
.75%
Four year term loan 355,742 330,965 9.5%
PNC Bank N.A.
Three year term loan 600,000 83,325 Prime plus
1.5%
Comcast
Work performance advance 1,000,000 439,553 Non-interest
bearing
Stockholders 955,915 600,000 797,524
$3,834,167 1,469,096 2,089,160
Current maturities 319,563 513,953
Long term debt, net of
current maturities $1,149,533 $1,575,207
</TABLE>
A schedule of debt maturity for each of the next three years and beyond is
<TABLE>
<CAPTION>
<S> <C>
1998 319,563
1999 317,683
2000 173,331
2001 and beyond 658,519
$1,469,096
</TABLE>
F-10
<PAGE> 16
COMMUNICATIONS CONSTRUCTION GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. COMMITMENTS AND CONTINGENCIES
The Company leases buildings under both month-to-month and long-term
noncancellable operating lease arrangements. Rental expense for these
leases approximated $1,243,448 and $823,541 for the years ended May 31,
1997 and 1996, respectively. Minimum future rental payments under long-
term noncancellable operating leases are
<TABLE>
<CAPTION>
<S> <C>
1998 686,731
1999 231,400
2000 163,200
2001 67,200
1,148,531
</TABLE>
In 1995, New York State audited the Company for compliance with
statutory sales and use tax regulations for the years 1989 through 1995.
As a result of this audit the Company paid in fiscal 1996 sales tax on
several small construction jobs and use tax on vehicles and equipment
operated in the state during this period.
In January 1997, New York State asserted amounts due from the Company
for sales tax and interest for periods through August 31, 1995 in the
amount of approximately $1,330,000. The attorney representing the
Company in this matter has filed for a conciliation conference to
discuss the matter with the state tax authorities. The Company will
contest the asserted deficiency vigorously and its attorney recommends
that if any liability is established that it pursue fully its rights
vis-a-vis its customers and the taxes paid by such customers.
Currently, New York State is auditing the customers for sales and use
tax compliance.
Currently, the Company does not bill its major customer for sales or use
tax on its construction work. The customer indicates that the work is
not subject to sales or use tax in the states in which the company has
built or is building systems for the customer. All of these states with
the exception of New Jersey have provided written verification that the
services performed by the Company are not taxable. The customer has
indicated in writing to the Company that it has self assessed for sales
and use tax in New Jersey for work performed by the Company. Further,
the Company's corporate council has given its opinion under the
individual work contracts that the customer is liable for sales or use
tax and penalties and interest if the customer is billed for the tax
within twelve months of the contract conclusion.
F-11
<PAGE> 17
COMMUNICATIONS CONSTRUCTION GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. COMMITMENTS AND CONTINGENCIES (Continued)
Based upon the above facts, management has accrued approximately
$164,000 for sales tax on the New York state audit issue. This
liability is included in the current liabilities at May 31, 1996 and
1997 with no offsetting receivable. Cost of sales was charged for this
accrual in fiscal 1996. If an assessment of tax, interest and penalties
is made against the Company, it will assert its rights under its
contracts and bill the customers for the amounts assessed.
The Company is party to certain litigation relating to the general
operations of the business which under the opinion of legal counsel is
not expected to exceed insurance coverage limits.
6. EMPLOYEE BENEFIT PLAN
All employees of the Company who meet certain minimum age and period of
service requirements are eligible to participate in a Section 401(k)
plan (the "Plan") as defined by the code. The Plan allows eligible
employees to defer up to 15 percent of their annual compensation. The
amounts contributed by employees are immediately vested and
nonforfeitable. The Company, at management's discretion, may match
employees contributions. A matching contribution of $115,000 was made
for the fiscal year ended May 31, 1997.
7. RELATED PARTY TRANSACTIONS
The Company leases its administrative offices from a partnership under
the control of officers of the Company. These payments amounted to
$115,200 and $112,200 for the years ended May 31, 1997 and 1996,
respectively.
8. SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISKS
Most of the Company's operations are with customers in the cable
television industry and represent a limited number of contracts. One
customer approximates 82% of the current and projected work load.
9. SUBSEQUENT EVENT
On July 7, 1997, the Company entered into a plan of merger with Dycom
Industries, Inc. (Dycom). The merger will result in the common and
preferred stock of the Company being exchanged for common shares of
Dycom equal in value to $28,000,000. The merger will be accounted for
as a pooling of interest and the Company will operate as a wholly owned
subsidiary of Dycom.
F-12
<PAGE> 18
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED CONSOLIDATED
FINANCIAL STATEMENTS INCLUDING
COMMUNICATIONS CONSTRUCTION GROUP, INC.
INTRODUCTION TO UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL STATEMENTS
On July 29, 1997, Dycom Industries, Inc. ("Dycom") entered into an agreement to
acquire Communications Construction Group, Inc. ("CCG") for 2,053,242 shares of
Dycom's $0.33 1/3 par value common stock. Dycom is accounting for the
acquisition as a pooling of interests.
The following unaudited pro forma combined consolidated financial statements
give effect to the merger on a pooling of interest basis. The unaudited pro
forma combined financial statements are based on the respective historical
financial statements of Dycom and CCG. The unaudited pro forma combined
consolidated balance sheet assumes that the acquisition took place on April 30,
1997 and combines Dycom's April 30, 1997 unaudited consolidated balance sheet
with CCG's February 28, 1997 unaudited balance sheet. Also presented are the
unaudited pro forma combined balance sheets combining the Dycom consolidated
balance sheets as of July 31, 1996 and 1995, respectively, with the CCG
balance sheets as of May 31, 1996 and 1995, respectively. The unaudited pro
forma combined consolidated statements of operations assume that the
acquisition took place as of the beginning of the periods presented and
combined Dycom's unaudited consolidated statements of operations for the nine
months ended April 30, 1997 and 1996 and for the fiscal years ended July 31,
1996, 1995 and 1994 with CCG's unaudited results of operations for the nine
months ended February 28, 1997 and 1996 and for the fiscal years ended
May 31, 1996, 1995 and 1994, respectively. This presentation is consistent
with the fiscal years expected to be combined after the date of the closing
of the acquisition.
The unaudited pro forma combined consolidated financial statements are based on
the estimates and assumptions set forth in the notes to these statements. The
pro forma adjustments made in connection with the pro forma combined
financial statements are preliminary and have been made solely for purposes
of developing such pro forma financial information for illustrative purposes
necessary to comply with the disclosure requirements of the Securities and
Exchange Commission. The unaudited pro forma combined financial statements do
not purport to be indicative of the results of operations for future periods.
F-13
<PAGE> 19
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
AND COMMUNICATIONS CONSTRUCTION GROUP, INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
April 30, 1997
<TABLE>
<CAPTION> Dycom CCG Pro Forma Pro Forma
April 30, 1997 Feb.28, 1997 Adjustments Combined
--------------- -------------- ----------- ----------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and equivalents $ 4,426,490 $ 31,402 $ $ 4,457,892
Accounts Receivable, net 20,818,895 11,844,329 32,663,224
Costs and estimated earnings
in excess of billings 11,615,597 190,000 11,805,597
Deferred income taxes, net 1,604,270 1,604,270
Other current assets 1,551,280 45,457 1,596,737
------------- ------------- ---------- ------------
Total current assets 40,016,532 12,111,188 52,127,720
------------- ------------- ---------- ------------
PROPERTY AND EQUIPMENT,
net 20,872,998 6,468,591 27,341,589
OTHER ASSETS:
Intangible assets, net 4,723,130 4,723,130
Deferred tax assets, net 742,407 106,000 848,407
Other 193,668 147,805 341,473
------------- ------------- ---------- ------------
Total other assets 5,659,205 253,805 5,913,010
------------- ------------- ---------- ------------
TOTAL $ 66,548,735 $ 18,833,584 $ $85,382,319
============= ============= =========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 7,573,207 $ 3,430,865 $ $11,004,072
Notes payable 7,054,914 5,463,445 12,518,359
Billings in excess of costs
and estimated earnings
Accrued self-insured
claims 2,750,723 2,750,723
Income taxes payable 748,600 1,070,149 1,818,749
Other accrued liabilities 7,800,101 3,371,602 11,171,703
------------- ------------- ----------- -----------
Total current liabilities 25,927,545 13,336,061 39,263,606
NOTES PAYABLE 8,986,446 1,060,170 (600,000)(3) 9,446,616
ACCRUED SELF-INSURED
CLAIMS 7,412,529 7,412,529
------------- ------------- ----------- ----------
Total liabilities 42,326,520 14,396,231 (600,000) 56,122,751
------------- ------------- ----------- ----------
STOCKHOLDERS' EQUITY:
Preferred stock 50,000 ( 50,000)(3)
Common stock 2,923,833 140 684,274 (3) 3,608,247
Additional paid-in
capital 25,146,315 143,838 ( 34,274)(3) 25,255,879
Retained (deficit)
earnings ( 3,847,933) 4,243,375 395,442
------------- ------------- ---------- -----------
Total shareholders'
equity 24,222,215 4,437,353 600,000 29,259,568
------------- ------------- ----------- -----------
TOTAL $ 66,548,735 $ 18,833,584 $ $85,382,319
============ ============= =========== ===========
See notes to unaudited pro forma combined financial statements.
</TABLE>
F-14
<PAGE> 20
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
AND COMMUNICATIONS CONSTRUCTION GROUP, INC.
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED APRIL 30, 1997
<TABLE>
<CAPTION>
Dycom CCG
Nine Months Nine Months
Ended Ended Pro Forma Pro Forma
April 30, 1997 Feb.28, 1997 Adjustments Combined
--------------- ------------- ------------ ----------
<S> <C> <C> <C> <C>
REVENUES:
Contract revenues earned $128,069,236 $48,305,402 $ $176,374,638
Other, net 496,047 344 496,391
------------ ----------- --------- -----------
Total 128,565,283 48,305,746 176,871,029
------------ ----------- --------- ------------
EXPENSES:
Costs of earned revenue
excluding depreciation 103,099,014 38,339,447 141,438,461
General and administrative 11,637,961 5,481,223 17,119,184
Depreciation and
amortization 4,473,683 1,753,200 6,226,883
------------ ----------- ---------- ------------
Total 119,210,658 45,573,870 164,784,528
------------ ----------- ---------- ------------
INCOME BEFORE INCOME TAXES 9,354,625 2,731,876 12,086,501
PROVISION FOR INCOME TAXES 3,638,495 1,100,000 4,738,495
------------ ----------- ---------- -------------
NET INCOME $ 5,716,130 $ 1,631,876 $ $ 7,348,006
============ =========== ========== =============
EARNING PER COMMON AND
COMMON EQUIVALENT SHARE:
Primary $ 0.64 $ 0.67
============ ============
Fully diluted $ 0.64 $ 0.67
============ ============
SHARES USED IN COMPUTING
EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE:
Primary 8,888,496 10,941,738
============ ============
Fully diluted 8,888,680 10,941,922
============ ============
See notes to unaudited pro forma combined financial statements.
</TABLE>
F-15
<PAGE> 21
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
AND COMMUNICATIONS CONSTRUCTION GROUP, INC.
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED APRIL 30, 1996
<TABLE>
<CAPTION>
Dycom CCG
Nine Months Nine Months
Ended Ended Pro Forma Pro Forma
April 30, 1996 Feb.28, 1996 Adjustments Combined
------------- ------------- ------------ -----------
<S> <C> <C> <C> <C>
REVENUES:
Contract revenues earned $104,544,413 $35,528,792 $ $140,073,205
Other, net 1,283,278 2,666 1,285,944
------------ ------------ ----------- ------------
Total 105,827,691 35,531,458 141,359,149
------------ ------------ ----------- -------------
EXPENSES:
Costs of earned revenue
excluding depreciation 84,331,152 29,312,178 113,643,330
General and administrative 11,073,271 4,079,630 15,152,901
Depreciation and
amortization 4,138,546 1,416,700 5,555,246
------------ ------------ ------------ -------------
Total 99,542,969 34,808,508 134,351,477
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES 6,284,722 722,950 7,007,672
PROVISION FOR INCOME TAXES 2,627,702 300,000 2,927,702
------------- ------------ ------------ -------------
NET INCOME $ 3,657,020 $ 422,950 $ $ 4,079,970
============= ============ ============ =============
EARNING PER COMMON AND
COMMON EQUIVALENT SHARE:
Primary $ 0.43 $ 0.38
============ =============
Fully diluted $ 0.43 $ 0.38
============ =============
SHARES USED IN COMPUTING
EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE:
Primary 8,554,808 10,608,050
============ =============
Fully diluted 8,554,808 10,608,050
============ =============
See notes to unaudited pro forma combined financial statements.
</TABLE>
F-16
<PAGE> 22
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
AND COMMUNICATIONS CONSTRUCTION GROUP, INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
JULY 31, 1996
<TABLE>
<CAPTION> Dycom CCG Pro Forma Pro Forma
July 31, 1996 May 31, 1996 Adjustments Combined
-------------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and equivalents $ 3,835,479 $ 92,257 $ $ 3,927,736
Accounts Receivable, net 13,306,064 8,441,204 21,747,268
Costs and estimated earnings
in excess of billings 7,137,212 382,072 7,519,284
Deferred income taxes, net 1,261,065 1,261,065
Other current assets 1,248,405 42,844 1,291,249
----------- ----------- --------- ------------
Total current assets 26,788,225 8,958,377 35,746,602
----------- ----------- --------- -----------
PROPERTY AND EQUIPMENT,
net 19,574,410 4,940,060 24,514,470
OTHER ASSETS:
Intangible assets, net 4,839,447 4,839,447
Deferred tax assets, net 598,887 106,000 704,887
Other 272,916 117,031 389,947
----------- ----------- ---------- ------------
Total other assets 5,711,250 223,031 5,934,281
----------- ----------- ---------- -----------
TOTAL $52,073,885 $14,121,468 $ $66,195,353
=========== =========== ========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 3,541,789 $ 2,025,723 $ $ 5,567,512
Notes payable 2,758,795 4,499,072 7,257,867
Billings in excess of costs
and estimated earnings 38,714 38,714
Accrued self-insured
claims 3,064,229 3,064,229
Income taxes payable 227,619 871,559 1,099,178
Other accrued liabilities 8,151,589 2,344,430 10,496,019
----------- ----------- ---------- -----------
Total current liabilities 17,782,735 9,740,784 27,523,519
NOTES PAYABLE 9,452,630 1,575,207 (600,000)(3) 10,427,837
ACCRUED SELF-INSURED
CLAIMS 7,062,150 7,062,150
----------- ----------- --------- ------------
Total liabilities 34,297,515 11,315,991 (600,000) 45,013,506
----------- ------------ --------- ------------
STOCKHOLDERS' EQUITY:
Preferred stock 50,000 ( 50,000)(3)
Common stock 2,867,164 140 684,274 (3) 3,551,578
Additional paid-in
capital 24,473,269 143,838 ( 34,274)(3) 24,582,833
Retained (deficit)
earnings ( 9,564,063) 2,611,499 (6,952,564)
------------ ----------- --------- -----------
Total shareholders'
equity 17,776,370 2,805,477 600,000 21,181,847
----------- ----------- --------- ------------
TOTAL $52,073,885 $14,121,468 $ $66,195,353
=========== =========== ========= =============
See notes to unaudited pro forma combined financial statements.
</TABLE>
F-17
<PAGE> 23
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
AND COMMUNICATIONS CONSTRUCTION GROUP, INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
JULY 31, 1995
<TABLE>
<CAPTION> Dycom CCG Pro Forma Pro Forma
July 31, 1995 May 31, 1995 Adjustments Combined
-------------- ------------- ------------ ---------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and equivalents $ 4,306,675 $ 112,137 $ $ 4,418,812
Accounts Receivable, net 16,330,477 8,259,684 24,590,161
Costs and estimated earnings
in excess of billings 5,223,425 72,000 5,295,425
Deferred income taxes, net 385,755 385,755
Other current assets 1,396,201 100,690 1,496,891
----------- ----------- ---------- ------------
Total current assets 27,642,533 8,544,511 36,187,044
----------- ----------- ---------- -----------
PROPERTY AND EQUIPMENT,
net 18,802,563 3,794,348 22,596,911
OTHER ASSETS:
Intangible assets, net 4,994,535 4,994,535
Other 353,227 86,290 439,517
----------- ----------- ---------- ------------
Total other assets 5,347,762 86,290 5,434,052
----------- ----------- ---------- ------------
TOTAL $51,792,858 $12,425,149 $ $64,218,007
=========== =========== ========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 5,607,567 $ 2,727,064 $ $ 8,334,631
Notes payable 4,955,080 3,830,510 8,785,590
Billings in excess of costs
and estimated earnings 100,951 100,951
Accrued self-insured
claims 2,266,855 2,266,855
Income taxes payable 621,483 392,468 1,013,951
Other accrued liabilities 6,585,387 2,468,273 9,053 660
----------- ----------- ----------- ------------
Total current liabilities 20,137,323 9,418,315 29,555,638
NOTES PAYABLE 13,870,064 1,475,071 (600,000)(3) 14,745,135
ACCRUED SELF-INSURED
CLAIMS 6,598,372 6,598,372
------------ ----------- ----------- ------------
Total liabilities 40,605,759 10,893,386 (600,000) 50,899,145
------------ ----------- ----------- -----------
STOCKHOLDERS' EQUITY:
Common stock 2,847,997 126 684,288 (3) 3,532,411
Additional paid-in
capital 24,293,309 193,852 ( 84,288)(3) 24,402,873
Retained (deficit)
earnings (15,954,207) 1,337,785 (14,616,422)
----------- ----------- --------- -----------
Total shareholders'
equity 11,187,099 1,531,763 600,000 13,318,862
----------- ----------- --------- ------------
TOTAL $51,792,858 $12,425,149 $ $64,218,007
=========== =========== ========= ============
See notes to unaudited pro forma combined financial statements.
</TABLE>
F-18
<PAGE> 24
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
AND COMMUNICATIONS CONSTRUCTION GROUP, INC.
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 1996
<TABLE>
<CAPTION>
Dycom CCG
Fiscal Year Fiscal Year
Ended Ended Pro Forma Pro Forma
July 31, 1996 May 31, 1996 Adjustments Combined
-------------- ------------- ----------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Contract revenues earned $143,932,608 $50,121,009 $ $194,053,617
Other, net 1,202,772 3,852 1,206,624
------------ ----------- -------- ------------
Total 145,135,380 50,124,861 195,260,241
------------ ----------- -------- ------------
EXPENSES:
Costs of earned revenue
excluding depreciation 115,732,334 40,037,056 155,769,390
General and administrative 14,564,558 5,920,464 20,485,022
Depreciation and
amortization 5,718,768 1,905,627 7,624,395
------------- ----------- -------- ------------
Total 136,015,660 47,863,147 183,878,807
------------- ----------- -------- ------------
INCOME BEFORE INCOME TAXES 9,119,720 2,261,714 11,381,434
PROVISION FOR INCOME TAXES 2,729,576 988,000 3,717,576
------------- ----------- --------- ------------
NET INCOME $ 6,390,144 $ 1,273,714 $ $ 7,663,858
============= =========== ========= =============
EARNING PER COMMON AND
COMMON EQUIVALENT SHARE:
Primary $ 0.73 $ 0.71
============= ============
Fully diluted $ 0.72 $ 0.70
============= ============
SHARES USED IN COMPUTING
EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE:
Primary 8,806,577 10,859,819
============== ===========
Fully diluted 8,875,042 10,928,284
============== ============
See notes to unaudited pro forma combined financial statements.
</TABLE>
F-19
<PAGE> 25
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
AND COMMUNICATIONS CONSTRUCTION GROUP, INC.
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 1995
<TABLE>
<CAPTION>
Dycom CCG
Fiscal Year Fiscal Year
Ended Ended Pro Forma Pro Forma
July 31, 1995 May 31, 1995 Adjustments Combined
------------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
REVENUES:
Contract revenues earned $143,909,874 $43,047,102 $ $186,956,976
Other, net 1,373,242 3,156 1,376,398
------------ ----------- ---------- ------------
Total 145,283,116 43,050,258 188,333,374
------------ ----------- ---------- -------------
EXPENSES:
Costs of earned revenue
excluding depreciation 117,742,300 35,542,020 153,284,320
General and administrative 14,113,615 4,895,915 19,009,530
Depreciation and
amortization 5,911,104 1,254,148 7,165,252
------------ ----------- ---------- -------------
Total 137,767,019 41,692,083 179,459,102
------------ ----------- ---------- ------------
INCOME BEFORE INCOME TAXES 7,516,097 1,358,175 8,874,272
PROVISION FOR INCOME TAXES 3,082,893 650,000 3,732,893
----------- ----------- ----------- ------------
NET INCOME $ 4,433,204 $ 708,175 $ $ 5,141,379
============ =========== =========== ============
EARNING PER COMMON AND
COMMON EQUIVALENT SHARE:
Primary $ 0.52 $ 0.49
============ ===========
Fully diluted $ 0.52 $ 0.49
============ ============
SHARES USED IN COMPUTING
EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE:
Primary 8,535,524 10,588,766
============ ===========
Fully diluted 8,535,524 10,588,766
============ ===========
See notes to unaudited pro forma combined financial statements.
</TABLE>
F-20
<PAGE> 26
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
AND COMMUNICATIONS CONSTRUCTION GROUP, INC.
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 1994
<TABLE>
<CAPTION>
Dycom CCG
Fiscal Year Fiscal Year
Ended Ended Pro Forma Pro Forma
July 31, 1994 May 31, 1994 Adjustments Combined
------------- ------------- ------------ ----------
<S> <C> <C> <C> <C>
REVENUES:
Contract revenues earned $121,407,707 $30,137,050 $ $151,544,757
Other, net 1,084,195 17,962 1,102,157
------------ ----------- ---------- ------------
Total 122,491,902 30,155,012 152,646,914
------------ ----------- ---------- ----------
EXPENSES:
Costs of earned revenue
excluding depreciation 105,607,777 22,914,998 128,522,775
General and administrative 15,582,953 5,806,742 21,389,695
Depreciation and
amortization 7,337,438 683,647 8,021,085
Intangible asset write-off 1,422,876 1,422,876
------------ ---------- ---------- ------------
Total 129,951,044 29,405,387 159,356,431
------------ ----------- ---------- ------------
INCOME (LOSS) BEFORE
INCOME TAXES ( 7,459,142) 749,625 ( 6,709,517)
PROVISION FOR INCOME TAXES 317,781 473,781 791,562
------------ ----------- ---------- ------------
NET INCOME (LOSS) $( 7,776,923) $ 275,844 $ $( 7,501,079)
============= =========== ========== ============
EARNING (LOSS) PER COMMON
AND COMMON EQUIVALENT SHARE:
Primary $ (0.91) $ (0.71)
============= =============
Fully diluted $ (0.91) $ (0.71)
============= =============
SHARES USED IN COMPUTING
EARNINGS (LOSS) PER COMMON
AND COMMON EQUIVALENT SHARE:
Primary 8,528,990 10,582,232
============= ===========
Fully diluted 8,528,990 10,582,232
============= ===========
See notes to unaudited pro forma combined financial statements.
</TABLE>
F-21
<PAGE> 27
DYCOM INDUSTRIES, INC. AND SUBSIDIARIES
AND COMMUNICATIONS CONSTRUCTION GROUP, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
1. Periods Combined
The Dycom consolidated balance sheets as of April 30, 1997 and July 31, 1996
and 1995, respectively, have been combined with the CCG balance sheets as of
February 28, 1997 and May 31, 1996 and 1995, respectively.
The Dycom consolidated statements of operations for the nine months ended
April 30, 1997 and 1996 and for the fiscal years ended July 31, 1996, 1995
and 1994, respectively, have been combined with the CCG results of operations
for the nine months ended February 28, 1997 and 1996 and for the fiscal years
ended May 31, 1996, 1995 and 1994, respectively.
For comparative purposes, certain amounts in the CCG financial statements have
been reclassified to conform with the Dycom financial statement presentation.
2. Merger Costs
Dycom and CCG estimate they will incur direct transaction costs of
approximately $0.5 million associated with the acquisition, consisting of
fees for filings with regulatory agencies, legal, accounting and other
related costs. These nonrecurring costs will be charged to operations in the
fiscal quarter in which the acquisition was consummated.
3. Exchange of Stock
The entry reflects the $0.6 million of CCG shareholder loans as additional
paid-in capital. The Dycom shares issued in the acqusisition were in exchange
for all the outstanding common stock and perferred shares of CCG and for the
satisfaction of the shareholder loans. Also, the entry reclassifies CCG's
capital to reflect the par value of the Dycom shares issued in the acquisition.
4. Pro Forma Net Income (Loss) Per Share
The unaudited pro forma combined net income (loss) per common and common
equivalent share is based upon the weighted average number of common and
common equivalent shares of Dycom outstanding for each period presented and
the 2,053,242 shares of Dycom common stock issued to the CCG shareholders.
F-22
