Investor
Presentation
November &
December 2017
Exhibit 99.1
2
Forward Looking Statements and
Non-GAAP Information
This presentation contains “forward-looking statements”. Other than statements of historical facts, all statements contained in
this presentation, including statements regarding the Company’s future financial position, future revenue, prospects, plans and
objectives of management, are forward-looking statements. Words such as “outlook,” “believe,” “expect,” “anticipate,”
“estimate,” “intend,” “should,” “could,” “project,” and similar expressions, as well as statements in future tense, identify
forward-looking statements. You should not consider forward-looking statements as a guarantee of future performance or
results. Forward-looking statements are based on information available at the time those statements are made and/or
management’s good faith belief at that time with respect to future events. Such statements are subject to risks and
uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the
forward-looking statements. Important factors, assumptions, uncertainties, and risks that could cause such differences are
discussed in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on
September 1, 2017, our Quarterly Report on Form 10-Q filed with the SEC on November 22, 2017, and other filings with the
SEC. The forward-looking statements in this presentation are expressly qualified in their entirety by this cautionary statement.
The Company undertakes no obligation to update these forward-looking statements to reflect new information, or events or
circumstances arising after such date.
This presentation includes certain “Non-GAAP” financial measures as defined by Regulation G of the SEC. As required by the
SEC, we have provided a reconciliation of those measures to the most directly comparable GAAP measures on the Regulation G
slides included as slides 30 through 36 of this presentation. Non-GAAP financial measures should be considered in addition to,
but not as a substitute for, our reported GAAP results.
3
Nationwide footprint
Operates in all 50 states, Washington, D.C. and in Canada
Over 40 operating subsidiaries and over 14,000 employees
Strong revenue base, customer relationships and profitable results
Contract revenues of $756.2 million in Q1-18, included $15.5 million
in revenue from storm restoration services.
Non-GAAP Adjusted EBITDA of $97.6 million, or 12.9% of revenues
in Q1-18
Non-GAAP Adjusted Diluted EPS of $0.99 in Q1-18
Solid financial profile
Liquidity of $425.8 million at October 28, 2017, consisting of cash
and availability under our credit facility
No outstanding revolver borrowings at the end of Q1-18
Repurchased 200,000 common shares for $16.9 million at an
average price of $84.38 per share
Dycom Overview
See “Regulation G Disclosure” slides 30-36 for a reconciliation of GAAP to Non-GAAP financial measures.
Leading supplier of specialty contracting services to telecommunication providers
4
Telecommunications networks fundamental to economic progress
Fiber is the foundation globally for wireline and wireless networks
Consumer demand for bandwidth driving fiber deployments by telecom providers
With a low percentage of total broadband connections provisioned by fiber in U.S.,
significant opportunities for sustained growth
Telecommunication Industry Overview
Source: Organisation for Economic Co-operation and Development (OECD), Broadband Portal (December 2016)
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(a) Potential of 125.8 million U.S. households (Statista-2016) with estimate that each home will
be passed by two separate telecom providers.
Source: Fiber to the Home Council
188 million
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30 million fiber passings completed
through 2016 - over a decade in
process
Telecommunication Industry Overview
“…I can tell you that we – as we look at returns from a build standpoint, we see a point then in the core of the metro
service area, we can actually achieve 80% to 90% fiber pass. Some of that is with overbuild of fiber-to-the-
neighborhood, fiber-to-the –node networks. And with that, we see, again, where fiber is we win, and that certainly
drives that penetration.”
Thomas E. Simpson, Cincinnati Bell Inc., Chief Operating Officer – November 2017
6
Strong Secular Trend
“IP traffic in North America will reach 85 EB per month by 2021, at a CAGR of 20 percent. Monthly
Internet traffic in North America will generate 11 billion DVDs’ worth of traffic, or 44.7 EB per month.”
“Business IP traffic will grow fastest in North America. Business IP traffic in North America will grow at
a CAGR of 23 percent, a faster pace than the global average of 21 percent.“
Cisco VNI: Forecast and Methodology, 2016–2021 (June 2017)
North America Internet Protocol Traffic vs. GDP Growth
Sources: U.S. Telecom, The Broadband Association; Cisco Visual Networking Index; U.S. National Bureau of Economic Analysis
Strong and stable growth in IP
traffic even in times of GDP decline
7
Industry drivers
Firm and strengthening end market opportunities
Fiber deployments in contemplation of newly emerging wireless technologies have begun
in many regions of the country. A significant number of new project initiations will occur in
the near term.
Wireless construction activity in support of expanded coverage and capacity is poised to
accelerate.
Telephone companies deploying FTTH to enable video offerings and 1 gigabit connections.
This activity is expected to reaccelerate in the near term.
Cable operators continuing to deploy fiber to small and medium businesses and
enterprises with increasing urgency. Fiber deep deployments to expand capacity, new
build opportunities and overall cable capital expenditures are increasing.
Customers are consolidating supply chains creating opportunities for market share growth
and increasing the long-term value of our maintenance business. We are increasingly
providing integrated planning, engineering and design, procurement and construction and
maintenance services for our customers.
Encouraged that industry participants are committed to multi-year capital spending
initiatives; these initiatives are increasing in numbers across multiple customers
8
1.0
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Q4-15 Q2-16 Q3-17 2019 AT&T
Expectations
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Key Driver: FTTx Deployments
“Even more exciting, our plan to step up our high-speed internet deployment
and reach more than 50 million customer locations with competitive
broadband speeds over the next few years. This includes our previously
announced plans to reach 14 million customer locations with fiber-to-the-prem,
our existing VDSL footprint, where we offer speeds of at least 50 megs or
higher, and the existing 8 million businesses who are either using or within
1,000 feet of existing fiber capabilities.”
John J. Stephens, AT&T Inc., Senior EVP, CFO – October 2017
Telephone companies are deploying fiber to the home and fiber to the node technologies to
enable video offerings and 1 gigabit connections
Data transmission speeds dramatically increasing
Key customer recently committed to passing millions of new locations with fiber
Sources: AT&T Press Releases and transcripts.
AT&T CenturyLink
Sources: CenturyLink Press Releases, Presentations and transcripts.
AT&T Homes Passed CenturyLink Addressable
Broadband Units > 100 Mbps
“We continue to see higher levels of penetration and growth. We have 40
megabits of higher speeds available. We ended the second quarter with
nearly 9.4 million 40 megabits and higher addressable locations, with more
than 3.8 million 100 megabits in higher addressable locations, representing
an increase of 240,000 and 350,000 addressable locations, respectively, during
the quarter.”
Glen F. Post- CenturyLink, Inc. – CEO, President – August 2017
9
Key Driver: Wireless Network Upgrades
“Mobile connectivity has become essential for many network users. Most people already consider mobile voice
service a necessity, and mobile voice, data, and video services are fast becoming an integral part of consumers
and business users’ lives. Used extensively by consumer as well as enterprise segments, with impressive
uptakes in both developed and emerging markets, mobility has proved to be transformational. The number of
mobile subscribers has grown rapidly, and bandwidth demand for data and video content continues to
increase. Mobile M2M connections represent the fastest growing device/connection category in our forecast.
The next 5 years are projected to provide unabated mobile video adoption. Backhaul capacity and efficiency
must increase so mobile broadband, data access, and video services can effectively support consumer usage
trends and keep mobile infrastructure costs in check.”
Cisco VNI Mobile, 2017
Wireless carriers are increasing 4G capacity
and augmenting 4G with new 5G
technologies creating growth opportunities
in the near to intermediate term
Carriers enhancing coverage and capacity by
increasing the number of small cells
Emerging wireless technologies require
incremental wireline deployments
A complementary wireline investment
cycle is fundamental to applications
enabled by fully converged
wireless/wireline networks
Growth in Number of Cell Sites¹
1 Source: Industry publications
* Compound Annual Growth Rate (CAGR)
0
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“Moving on to business services, which continues to be a top driver of our overall cable results. We delivered another strong quarter
of double-digit growth, with revenue increasing 12.6% to $1.6 billion during the quarter, primarily driven by customer growth. We
added 31,000 business customer relationships and grew revenue per business customer relationship by 5%. The significant majority
of business services revenue is centered on connectivity, and we have even more runway to increase share in our data product as we
move to gigabit speeds throughout our footprint with the deployment up DOCSIS 3.1 and as we continue to push fiber deeper in our
network.”
Mike Cavanagh, Senior EVP & CFO, Comcast – October 2017
Key Driver: Fiber to Businesses
1 For the Trailing Twelve Months (“TTM”) ended September 30, 2017.
2 Calculated as the combination of the estimated addressable market given by Charter ($20Bn) and Time Warner Cable ($10Bn) in their respective earnings transcripts prior to their May 2016 merger.
Revenue earned by Comcast and Charter from Business Services totaled $11.8 Billion1 of an Addressable
Market of $70 billion
2
Sources: Comcast and Charter Press Releases and transcripts
11
Intensely Focused on Telecommunications Market
Contract revenues of $756.2 million for Q1-18 Services Crucial to Customers’ Success
Electric and
Gas Utilities
and Other
Underground
Facility Locating
Telecommunications
Dycom is well-positioned to benefit from future growth opportunities
Outside Plant & Equipment Installation
Wireless
Premise Equipment Installation
Engineering
Underground Facility Locating
12
Local Credibility, National Capability
Subsidiaries Dycom’s Nationwide Presence
13
Focused on High Value Profitable Growth
Anticipate emerging technology trends that drive capital spending
Deliberately target high quality, long-term industry leaders which
generate the vast majority of the industry’s profitable opportunities
Selectively acquire businesses that complement our existing
footprint and enhance our customer relationships
Leverage our scale and expertise to expand margins through best
practices
14
Well Established Customers
Top Customers
Dycom has established relationships with:
Telephone companies
Wireless carriers
Cable television multiple system operators
Electric utilities and others
Customer Revenue Breakdown Q1-18
Blue-chip, investment grade customers comprise a substantial portion of revenue
15
Durable Customer Relationships
Revenues ($ in millions)
Notes: For comparison purposes, revenues from Verizon Communications Inc. and XO Communications LLC’s fiber-optic network business have been combined for periods prior to
their February 2017 merger. Revenues from Charter Communications, Inc., Time Warner Cable Inc., and Bright House Networks, LLC have also been combined for periods prior to their
May 2016 merger. Revenues from CenturyLink, Inc. and Level 3 Communications, Inc. have been combined prior to their November 2017 merger.
16
Anchored by Long-Term Agreements
Dycom is party to hundreds of MSA’s and
other arrangements with customers that
extend for periods of one or more years
Generally multiple agreements maintained
with each customer
Master Service Agreements (MSA’s)
Multi-year, multi-million dollar
arrangements covering thousands of
individual work orders
Generally exclusive requirement
contracts
Agreements can at times be negotiated
Majority of contracts are based on units
of delivery
Backlog at $6.198 billion as of Q1-18
compared to $6.016 billion as of Q4-17
Revenue by Contract Type for Fiscal Q1-18
Backlog ($ in millions)
Our backlog estimates represent amounts under master service agreements and other contractual agreements for services
projected to be performed over the terms of the contracts and are based on contract terms, our historical experience with
customers and, more generally, our experience in similar procurements. Backlog is not a measure defined by United States
generally accepted accounting principles; however, it is a common measurement used in our industry. Our methodology for
determining backlog may not be comparable to the methodologies used by others.
Master Service Agreements
Long-term
contracts Short-term
contracts
17
Industry Themes
Industry increasing network bandwidth dramatically
Major industry participants deploying significant 1 gigabit wireline networks
Emerging wireless technologies require incremental wireline deployments
o A complementary wireline investment cycle is fundamental to applications
enabled by fully converged wireless/wireline networks
Industry developments are producing opportunities which in aggregate are without
precedent. Converged wireless/wireline network deployments only further broaden
our set of opportunities.
Delivering valuable service to customers
Currently providing services for 1 gigabit full deployments across the country in
dozens of metropolitan areas to a number of customers
Have secured and are actively working on a number of converged wireless/wireline
multi-use networks
Customers are revealing with more specificity multi-year initiatives that are being
implemented and managed locally
Our ability to provide integrated planning, engineering and design, procurement and
construction and maintenance services provides value to several industry participants
Dycom’s scale, market position and financial strength position it well as opportunities
continue to expand
18
Cash Flow from
Operations
$1,245
Other Cash Flow
$650
Cap-Ex, net
$823
Business
Acquisitions
$597
Share
Repurchases
$455
Sources of Cash Uses of Cash *
Sources and Uses of Cash ($ in millions)
10 Years of Robust Cash Flow Generation
Notes: Amounts represent cumulative cash flow for fiscal 2008 – fiscal 2017; See “Regulation G Disclosure” slides as set forth in the Appendix for a summary of amounts. Amounts may not add due to rounding.
1 Other cash flow includes borrowings, other financing and investing activities and beginning cash on hand.
Strong operating cash flow of
$1.245 billion from fiscal 2008 - 2017
Prudent approach to capital
allocation:
$455 million invested in share
repurchases
$597 million invested in
business acquisitions
$823 million in cap-ex, net of
disposals, or approximately 43%
of allocation
Fiscal 2008 – Fiscal 2017
Robust cash flow generation and prudent capital allocation provide strong foundation
for returns
$1,895 $1,895
*Includes net increase of cash during the period of $20 million
*
19
Financial Update
20
Strengthening market opportunities
Contract revenues of $756.2 million in Q1-18, included $15.5 million in revenue from
storm restoration services
Non-GAAP Adjusted EBITDA of $97.6 million, or 12.9% of revenues in Q1-18
Non-GAAP Adjusted Diluted EPS of $0.99 in Q1-18
Solid financial profile
Strong balance sheet
Robust operating cash flows
Sound credit metrics and no near term debt maturities
Capital structure designed to produce strong returns
Repurchased 200,000 common shares for $16.9 million at an average price of $84.38
per share during Q1-18 and 713,006 common shares for $62.9 million at an average
price of $88.23 per share during fiscal 2017
As of October 2017, $95.2 million authorized for share repurchases through August
2018
Financial Overview
See “Regulation G Disclosure” slides 30-36 for a reconciliation of GAAP to Non-GAAP financial measures.
21
Fiscal Year Change
In September 2017, the Company changed its fiscal year end from July to January
Beginning with a six month transitional period ending January 27, 2018, the
Company’s fiscal year will end on the last Saturday of January
Fiscal year 2019 will be for the period from January 28, 2018 through
January 26, 2019
As a result of the change in fiscal year and our increased visibility, the Company
expects to provide a fiscal 2019 outlook for revenue and diluted earnings per share for
its fiscal year ending January 26, 2019. This annual outlook will be provided in
conjunction with the Company's release of results for the fiscal quarter ended January
27, 2018.
22
$559
$665
$789 $799
$701
$786 $780 $756
Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18
Contract Revenue Trend
Annual Organic Revenue Trend
Quarterly Contract Revenues
Quarterly Organic Revenue Trend
Annual Growth in Contract Revenues
Financial charts - $ in millions
*Organic % growth adjusted for additional week in Q4-16
See “Regulation G Disclosure” slides 30-36 for a reconciliation of GAAP to Non-GAAP financial measures.
$1,608.6
$1,811.6
$2,022.3
$2,672.5
$3,066.9
FY2013 FY2014 FY2015 FY2016 FY2017
4.9% 4.7%
9.6%
22.7%
14.1%
FY2013 FY2014 FY2015 FY2016 FY2017
19.4%
28.7%
20.0%
18.0%
22.9%
14.9%
4.6%
(8.4)%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
Q2-16 Q3-16 Q4-16* Q1-17 Q2-17 Q3-17 Q4-17* Q1-18
23
$180 $188 $265 $390 $442
11.2%
10.4%
13.1%
14.6% 14.4%
FY2013 FY2014 FY2015 FY2016 FY2017
Non-GAAP Adjusted EBITDA Non-GAAP Adjusted EBITDA as a % of Revenue
Non-GAAP Adjusted EBITDA
$1.18 $1.16
$2.41
$4.48
$5.26
FY2013 FY2014 FY2015 FY2016 FY2017
Quarterly Non-GAAP Adjusted EBITDA
Quarterly Non-GAAP Adjusted Diluted EPS Non-GAAP Adjusted Diluted EPS
Financial charts - $ in millions, except earnings per share amounts
Earnings
See “Regulation G Disclosure” slides 30-36 for a reconciliation of GAAP to Non-GAAP financial measures.
$66
$92
$126 $129
$86
$108
$118
$98
11.9%
13.8%
16.0% 16.2%
12.3%
13.8%
15.1%
12.9%
Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18
Non-GAAP Adjusted EBITDA Non-GAAP Adjusted EBITDA as a % of Revenue
$0.54
$1.08
$1.64 $1.67
$0.82
$1.30
$1.47
$0.99
Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18
24
Strong balance sheet and robust liquidity
Liquidity and Cash Flow
Financial tables - $ in millions
Balance sheet reflects the strength of our
business
Liquidity of $425.8 million at the end of Q1-18
consisting of availability under our Credit
Facility and cash on hand
Cash Flow from Operating Activities
Robust operating cash flows support strong
organic growth
(a) Availability on Revolver presented net of 48.7 million L/C’s under the Senior Credit
Facility at both Q4-17 and Q1-18
Liquidity Summary
Q4-17 Q1-18
Cash and equivalents $ 38.6 $ 24.5
$450 million revolver $ - $ -
Term Loan Facilities 367.7 362.9
Notional Value 485.0 485.0
Total Notional Amount of Debt $ 852.7 $ 847.9
Net Debt (Notional Debt less Cash) $ 814.1 $ 823.3
Total Notional Amount of Debt (see above) $ 852.7 $ 847.9
Unamortized debt discount and debt fees on 0.75%
Convertible Senior Notes (92.8) (87.8)
Debt, net of debt discount and fees $ 759.9 $ 760.1
Availability on revolver(a) $ 401.3 $ 401.3
Cash and availability on revolver $ 439.9 $ 425.8
Senior Credit Facility, matures April 2020:
0.75% Convertible Senior Notes, mature September 2021:
25
Capital Allocated to Maximize Returns
Strong balance sheet, solid cash flow and long-term confidence in industry outlook drives
capital allocation strategy
Invest in organic growth
Revenues grew organically 14.1% in fiscal 2017
Pursue complementary acquisitions
Fiscal 2013 - 2017 acquisitions further strengthened Dycom’s customer base, geographic
scope, and technical service offerings
During fiscal 2016 and 2017, acquired businesses for $181.4 million further strengthening
customer relationships and expanding geographic reach
Share repurchases
Repurchased approximately 23.9 million shares for approximately $659 million since fiscal
2006
$95.2 million authorization available for share repurchases through August 2018
Dycom is committed to maximizing long term returns through prudent capital allocation
See “Regulation G Disclosure” slides 30-36 for a reconciliation of GAAP to Non-GAAP financial measures.
Questions
and
Answers
Selected Information
from Q1-18 Dycom
Results Conference
Call Materials
The following slides 28, 29 & 30 were used on November 20, 2017 in connection
with the Company’s conference call for its fiscal 2018 first quarter results and are
included for your convenience. Reference is made to slide 2 titled “Forward-
Looking Statements and Non-GAAP Information” with respect to these slides.
The information and statements contained in slides 28, 29 & 30 that are forward-
looking are based on information that was available at the time the slides were
initially prepared and/or management’s good faith belief at that time with
respect to future events. Except as required by law, the Company may not
update forward-looking statements even though its situation may change in the
future. For a full copy of the conference call materials, including the conference
call transcript, see the Company’s Form 8-Ks filed with the Securities and
Exchange Commission on November 20, 2017 and November 21, 2017.
28
Q2-2018 Outlook
Financial table- $ in millions, except earnings per share amounts (% as a percent of contract revenues)
See “Regulation G Disclosure” slides 30-36 for a reconciliation of GAAP to Non-GAAP financial measures.
“Q2-2018 Outlook” - This slide was prepared and used on November 20, 2017 in connection with the Company’s conference call to discuss fiscal 2018 first quarter results
and is included for your convenience. Reference is made to slide 2 titled “Forward-Looking Statements and Non-GAAP Information” with respect to this slide. The
information and statements contained in this slide that are forward-looking is based on information that was available at the time the slide was initially prepared
and/or management’s good faith belief at that time with respect to future events. Except as required by law, the Company may not update forward-looking statements
even though its situation may change in the future. For a full copy of the conference call materials, including the conference call transcript, see the Company’s Form 8-Ks
filed with the Securities and Exchange Commission on November 20, 2017 and November 21, 2017.
29
Looking Ahead to Q1-2019
See “Regulation G Disclosure” slides 30-36 for a reconciliation of GAAP to Non-GAAP financial measures.
“Looking ahead to Q1-2019” - This slide was prepared and used on November 20, 2017 in connection with the Company’s conference call to discuss fiscal 2018 first
quarter results and is included for your convenience. Reference is made to slide 2 titled “Forward-Looking Statements and Non-GAAP Information” with respect to this
slide. The information and statements contained in this slide that are forward-looking is based on information that was available at the time the slide was initially
prepared and/or management’s good faith belief at that time with respect to future events. Except as required by law, the Company may not update forward-looking
statements even though its situation may change in the future. For a full copy of the conference call materials, including the conference call transcript, see the
Company’s Form 8-Ks filed with the Securities and Exchange Commission on November 20, 2017 and November 21, 2017.
Financial table- $ in millions, (% as a percent of contract revenues)
30
Explanation of Non-GAAP Measures
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). In the Company’s quarterly results releases, trend schedules, conference
calls, slide presentations, and webcasts, it may use or discuss Non-GAAP financial measures, as defined by Regulation G of the Securities and Exchange Commission. The Company believes
that the presentation of certain Non-GAAP financial measures in these materials provides information that is useful to investors because it allows for a more direct comparison of the
Company’s performance for the period reported with the Company’s performance in prior periods. The Company cautions that Non-GAAP financial measures should be considered in
addition to, but not as a substitute for, the Company’s reported GAAP results. Management defines the Non-GAAP financial measures as follows:
• Non-GAAP Organic Contract Revenues -contract revenues from businesses that are included for the entire period in both the current and prior year periods, excluding contract revenues
from storm restoration services. Non-GAAP Organic Contract Revenue growth (decline) is calculated as the percentage change in Non-GAAP Organic Contract Revenues over those of the
comparable prior year period. Management believes organic growth (decline) is a helpful measure for comparing the Company's revenue performance with prior periods.
• Non-GAAP Adjusted EBITDA - net income before interest, taxes, depreciation and amortization, gain on sale of fixed assets, stock-based compensation expense, and certain non-recurring
items. Management believes Non-GAAP Adjusted EBITDA is a helpful measure for comparing the Company's operating performance with prior periods as well as with the performance of
other companies with different capital structures or tax rates.
• Non-GAAP Adjusted Net Income - GAAP net income before non-cash amortization of the debt discount, certain non-recurring items and any tax impact related to these items.
• Non-GAAP Adjusted Diluted Earnings per Common Share - Non-GAAP Adjusted Net Income divided by weighted average diluted shares outstanding.
Management excludes or adjusts each of the items identified below from Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Diluted Earnings per Common Share:
• Non-cash amortization of the debt discount - The Company’s convertible senior notes were allocated between debt and equity components. The difference between the
principal amount and the carrying amount of the liability component of the convertible senior notes represents a debt discount. The debt discount is being amortized over the
term of the convertible senior notes but does not result in periodic cash interest payments. The Company has excluded the non-cash amortization of the debt discount from its
Non-GAAP financial measures because it believes it is useful to analyze the component of interest expense for the convertible senior notes that will be paid in cash. The
exclusion of the non-cash amortization from the Company’s Non-GAAP financial measures provides management with a consistent measure for assessing financial results.
• Acquisition transaction related costs – The Company incurred costs of approximately $0.7 million in connection with an acquisition during the fourth quarter of fiscal 2016. The
exclusion of the acquisition transaction related costs from the Company’s Non-GAAP financial measures provides management with a consistent measure for assessing
financial results.
• Loss on debt extinguishment – The Company incurred a pre-tax charge of approximately $16.3 million for early extinguishment of debt in connection with the redemption of its
7.125% senior subordinated notes during the first quarter of fiscal 2016. Management believes excluding the loss on debt extinguishment from the Company’s Non-GAAP
financial measures assists investors’ overall understanding of the Company's current financial performance. The Company believes this type of charge is not indicative of its
core operating results. The exclusion of the loss on debt extinguishment from the Company’s Non-GAAP financial measures provides management with a consistent measure
for assessing the current and historical financial results.
• Tax impact of adjusted results - The tax impact of the adjusted results was calculated utilizing a Non-GAAP effective tax rate which approximates the Company’s effective tax
rate used for financial planning. The tax impact included in the Company’s guidance for the quarter ending January 27, 2018 was calculated using an effective tax rate used for
financial planning and forecasting future results.
Appendix: Regulation G Disclosure
31
Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures
Outlook – Non-GAAP Diluted Earnings per Common Share for the Three Months Ending January 27, 2018
Unaudited
Appendix: Regulation G Disclosure
This slide was prepared and used on November 20, 2017 in connection with the Company’s conference call to discuss fiscal 2018 first quarter
results and is included for your convenience. Reference is made to slide 2 titled “Forward-Looking Statements and Non-GAAP Information”
with respect to this slide. The information and statements contained in this slide that are forward-looking is based on information that was
available at the time the slide was initially prepared and/or management’s good faith belief at that time with respect to future events.
Except as required by law, the Company may not update forward-looking statements even though its situation may change in the future.
For a full copy of the conference call materials, including the conference call transcript, see the Company’s Form 8-Ks filed with the Securities
and Exchange Commission on November 20, 2017 and November 21, 2017.
Use of Non-GAAP Financial Measures: The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). In our quarterly results releases, trend schedules,
conference calls, slide presentations, and webcasts, we may use or discuss Non-GAAP financial measures, as defined by Regulation G of the SEC. See Explanation of Non-GAAP Measures on slide 30.
Notes: Amounts above may not add due to rounding.
Outlook for the Three Months Ending January 27, 2018
Diluted earnings per common share – GAAP (a) $0.15 - $0.27
Adjustment for addback of after-tax non-cash amortization of debt discount on convertible senior notes (b) $ 0.09
Non-GAAP Adjusted Diluted Earnings per Common Share (a) $0.24 - $0.36
(a) Guidance for diluted earnings per common share and Non-GAAP Adjusted diluted earnings per common share for the three months ending
January 27, 2018 were computed using approximately 31.9 million in diluted weighted average shares outstanding.
(b) The Company expects to recognize approximately $4.6 million in pre-tax interest expense during the three months ending January 27, 2018
for non-cash amortization of the debt discount associated with its convertible senior notes. The Company excludes the effect of this non-cash
amortization of the debt discount in its Non-GAAP financial measures.
32
Appendix: Regulation G Disclosure
Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures
Non-GAAP Organic Contract Revenue
Unaudited
($ in millions)
(a) Q4-16 contained 14 weeks as a result of our 52/53 week fiscal year as compared to 13 weeks in all other quarterly periods presented herein. The Q4-16 Non-GAAP adjustment is
calculated independently for each comparative period as (i) contract revenues less, (ii) revenues from acquired businesses in each applicable period, (iii) divided by 14 weeks.
Use of Non-GAAP Financial Measures: The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). In our quarterly results releases, trend schedules,
conference calls, slide presentations, and webcasts, we may use or discuss Non-GAAP financial measures, as defined by Regulation G of the SEC. See Explanation of Non-GAAP Measures on slide 30.
GAAP %
Non-GAAP -
Organic %
Revenues from
acquired businesses
Additional week as
a result of our
52/53 week fiscal
year (a)
Revenues from
storm
restoration
services
Q1-18 Organic Decline:
Q1-18 756.2$ (8.6)$ -$ (15.5)$ 732.1$ (5.4)% (8.4)%
Q1-17 799.2$ -$ -$ -$ 799.2$
Prior Quarters Organic Growth:
Q4-17 780.2$ (19.3)$ -$ -$ 760.9$ (1.1)% 4.6%
Q4-16 789.2$ (5.6)$ (56.0)$ -$ 727.6$
Q3-17 786.3$ (23.0)$ -$ -$ 763.4$ 18.3% 14.9%
Q3-16 664.6$ -$ -$ -$ 664.6$
Q2-17 701.1$ (13.4)$ -$ -$ 687.7$ 25.3% 22.9%
Q2-16 559.5$ -$ -$ -$ 559.5$
Q1-17 799.2$ (56.6)$ -$ -$ 742.6$ 21.2% 18.0%
Q1-16 659.3$ (29.9)$ -$ -$ 629.4$
Q4-16 789.2$ (44.8)$ (53.2)$ -$ 691.2$ 36.4% 20.0%
Q4-15 578.5$ (2.4)$ -$ -$ 576.1$
Q3-16 664.6$ (30.8)$ -$ -$ 633.9$ 35.0% 28.7%
Q3-15 492.4$ -$ -$ -$ 492.4$
Q2-16 559.5$ (32.9)$ -$ -$ 526.6$ 26.8% 19.4%
Q2-15 441.1$ -$ -$ -$ 441.1$
Revenue Growth
(Decline)%
Non-GAAP Organic
Contract RevenuesContract Revenues NON-GAAP ADJUSTMENTS
33
(a) Non-GAAP adjustments in FY 2016 reflect adjustments in Q4-16 resulting from the Company’s 52/53 week fiscal year. The Q4-16 Non-GAAP adjustment is calculated independently
for each comparative period as (i) contract revenues less, (ii) revenues from acquired businesses in each applicable period, (iii) divided by 14 weeks.
Contract Revenues and Organic Growth - Reconciliation of GAAP to Non-GAAP Measures ($ in millions)
The table below reconciles GAAP revenue growth to Non-GAAP organic revenue growth
Appendix: Regulation G Disclosure
Notes: Amounts above may not add due to rounding.
Use of Non-GAAP Financial Measures: The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). In our quarterly results releases, trend schedules,
conference calls, slide presentations, and webcasts, we may use or discuss Non-GAAP financial measures, as defined by Regulation G of the SEC. See Explanation of Non-GAAP Measures on slide 30.
Revenues from
acquired
businesses
Revenues from
storm restoration
services
Additional week
as a result of our
52/53 week fiscal
year (a) GAAP %
Non-GAAP -
Organic %
Fiscal 2017 3,066.9$ (214.9)$ -$ -$ 2,852.0$ 14.8% 14.1%
Fiscal 2016 2,672.5$ (119.8)$ -$ (53.5)$ 2,499.2$
Fiscal 2016 2,672.5$ (159.0)$ -$ (52.9)$ 2,460.7$ 32.2% 22.7%
Fiscal 2015 2,022.3$ (17.7)$ -$ -$ 2,004.7$
Fi al 2015 2,022.3$ (40.4)$ -$ -$ 1,982.0$ 11.6% 9.6%
Fiscal 2014 1,811.6$ (2.8)$ -$ -$ 1,808.8$
Fiscal 2014 1,811.6$ (499.3)$ -$ -$ 1,312.3$ 12.6% 4.7%
Fiscal 2013 1,608.6$ (337.9)$ (16.7)$ -$ 1,254.0$
Fiscal 2013 1,608.6$ (337.9)$ (16.7)$ -$ 1,254.0$ 33.9% 4.9%
Fiscal 2012 1,201.1$ -$ (6.0)$ -$ 1,195.1$
GAAP Contract
Revenues
NON-GAAP ADJUSTMENTS
Non-GAAP -
Organic Contract
Revenues
Revenue Growth (Decline)%
34
Notes: Amounts may not add due to rounding.
1 Other financing activities represents net cash provided by (used in) financing activities less repurchases of common stock.
2 Other investing activities represents net cash provided by (used in) investing activities less capital expenditure, net of proceeds from asset sales and less cash paid for acquisitions, net of cash acquired.
Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures
Calculation of Cumulative Cash Flows Fiscal 2008 through Fiscal 2017
Unaudited
($ in millions)
Appendix: Regulation G Disclosure
Net Cash Provided
by Operating
Activities
Capital Expenditures,
Net of Proceeds from
Asset Sales
Cash Paid for
Acquisitions, net
of cash acquired
Repurchases of
Common Stock
Borrowings and Other
Financing Activities 1
Other Investing
Activities 2
Total Amount
Provided by Other
Financing and
Investing Activities
FY-17 256.4$ (185.2)$ (24.2)$ (62.9)$ 20.4$ 0.3$ 20.7$
FY-16 261.5 (175.5) (157.2) (170.0) 254.1 (0.5) 253.6
FY-15 141.9 (93.6) (31.9) (87.1) 75.9 (4.5) 71.4
FY-14 84.2 (73.7) (17.1) (10.0) 19.0 (0.3) 18.7
FY-13 106.7 (58.8) (330.3) (15.2) 263.5 0.1 263.6
FY-12 65.1 (52.8) - (13.0) 7.6 0.9 8.5
FY-11 43.9 (49.2) (36.5) (64.5) 47.5 0.2 47.7
FY-10 54.1 (46.6) - (4.5) (4.4) - (4.4)
FY-09 126.6 (25.3) - (2.9) (15.7) (0.1) (15.8)
FY-08 104.3 (62.3) 0.5 (25.2) (13.8) (0.3) (14.1)
Cumulative 1,244.8$ (823.1)$ (596.7)$ (455.3)$ 654.1$ (4.2)$ 649.9$
38.6$
18.8
19.8$
Cash at July 29, 2017
Cash at July 28, 2007
Net Increase in Cash
35
Notes: Amounts above may not add due to rounding.
Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures
Non-GAAP Adjusted Net Income, Non-GAAP Adjusted Diluted EPS, and Non-GAAP Adjusted Interest Expense
Unaudited ($ in 000's, except per share amounts)
Appendix: Regulation G Disclosure
Use of Non-GAAP Financial Measures: The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). In our quarterly results releases, trend schedules,
conference calls, slide presentations, and webcasts, we may use or discuss Non-GAAP financial measures, as defined by Regulation G of the SEC. See Explanation of Non-GAAP Measures on slide 30.
Reconciliation of Net Income to Non-GAAP Adjusted Net Income and Diluted EPS to Non-GAAP Adjusted Diluted EPS
Fiscal 2013 Fiscal 2014 Fiscal 2015 Q1-16 Q2-16 Q3-16 Q4-16 Fiscal 2016 Q1-17 Q2-17 Q3-17 Q4-17 Fiscal 2017 Q1-18
Net income 35.2$ 40.0$ 84.3$ 30.8$ 15.5$ 33.1$ 49.4$ 128.7$ 51.1$ 23.7$ 38.8$ 43.7$ 157.2$ 28.8$
Loss on debt extinguishment - - - 16.3 - - - 16.3 - - - - - -
Amortization of debt discount - - - 1.8 4.1 4.2 4.6 14.7 4.3 4.4 4.4 4.5 17.6 4.5
Charges for settlement of wage and hour litigation 0.5 0.6 - - - - - - - - - - - -
Acquisition related costs 6.8 - - - - - 0.7 0.7 - - - - - -
Tax impact of adjustments (3.0) (0.2) - (6.8) (1.6) (1.6) (2.0) (12.0) (1.6) (1.6) (1.6) (1.7) 6.6 (1.7)
Total adjustments, net of tax 4.6$ 0.4$ -$ 11.2$ 2.5$ 2.6$ 3.3$ 19.6$ 2.7$ 2.7$ 2.8$ 2.8$ 24.2$ 2.8$
Non-GAAP Adjusted Net income 39.8$ 40.3$ 84.3$ 42.0$ 18.0$ 35.7$ 52.7$ 148.4$ 53.7$ 26.4$ 41.6$ 46.5$ 181.4$ 31.6$
Diluted Earnings Per Share
Net income 1.04$ 1.15$ 2.41$ 0.91$ 0.46$ 1.00$ 1.54$ 3.89$ 1.59$ 0.74$ 1.22$ 1.38$ 4.92$ 0.90$
Adjusting Items from above, after tax 0.14 0.01 - 0.33 0.08 0.08 0.10 0.59 0.08 0.09 0.09 0.09 0.35 0.09
Non-GAAP Adjusted Diluted Earnings Per Common Share 1.18$ 1.16$ 2.41$ 1.24$ 0.54$ 1.08$ 1.64$ 4.48$ 1.67$ 0.82$ 1.30$ 1.47$ 5.26$ 0.99$
Fully iluted Shares (in thousands) 33,782 34,816 35,027 33,887 33,520 33,051 32,074 33,116 32,200 32,162 31,910 31,664 31,985 31,892
Reconciliation of Non-GAAP Adjusted Interest Expense
Fiscal 2013 Fiscal 2014 Fiscal 2015 Q1-16 Q2-16 Q3-16 Q4-16 Fiscal 2016 Q1-17 Q2-17 Q3-17 Q4-17 Fiscal 2017 Q1-18
Interest expense, net 23.3$ 26.8$ 27.0$ 9.1$ 7.9$ 8.0$ 9.7$ 34.7$ 9.1$ 9.2$ 9.4$ 9.7$ 37.4$ 9.7$
Adjusting Items from above - - - (1.8) (4.1) (4.2) (4.6) (14.7) (4.3) (4.4) (4.4) (4.5) (17.6) (4.5)
Non-GAAP Adjusted Interest Expense 23.3$ 26.8$ 27.0$ 7.4$ 3.7$ 3.8$ 5.1$ 20.0$ 4.8$ 4.8$ 5.0$ 5.2$ 19.8$ 5.2$
36
Appendix: Regulation G Disclosure
Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures
Non-GAAP Adjusted EBITDA
Unaudited ($ in 000's, except per share amounts)
Notes: Amounts above may not add due to rounding.
Use of Non-GAAP Financial Measures: The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). In our quarterly results releases, trend schedules,
conference calls, slide presentations, and webcasts, we may use or discuss Non-GAAP financial measures, as defined by Regulation G of the SEC. See Explanation of Non-GAAP Measures on slide 30.
Reconciliation of Net Income to Non-GAAP Adjusted EBITDA
Fiscal 2013 Fiscal 2014 Fiscal 2015 Q1-16 Q2-16 Q3-16 Q4-16 Fiscal 2016 Q1-17 Q2-17 Q3-17 Q4-17 Fiscal 2017 Q1-18
Net income 35.2$ 40.0$ 84.3$ 30.8$ 15.5$ 33.1$ 49.4$ 128.7$ 51.1$ 23.7$ 38.8$ 43.7$ 157.2$ 28.8$
Provision (benefit) for income taxes 23.0 26.3 51.3 18.6 10.0 19.4 29.6 77.6 30.3 14.0 22.7 26.1 93.2 15.6
Interest expense, net 23.3 26.8 27.0 9.1 7.9 8.0 9.7 34.7 9.1 9.2 9.4 9.7 37.4 9.7
Depreciation 64.8 74.5 79.3 22.7 25.2 27.0 30.6 105.5 28.4 29.6 31.2 34.0 123.1 36.4
Amortization 20.7 18.3 16.7 4.8 4.7 4.5 5.4 19.4 6.2 6.1 6.2 6.3 24.8 6.3
EBITDA 167.0 185.9 258.7 86.0 63.2 92.0 124.7 366.0 125.0 82.6 108.3 119.8 435.7 96.7
Gain on sale of fixed assets (4.7) (10.7) (7.1) (1.1) (1.0) (4.1) (3.6) (9.8) (1.4) (1.7) (5.0) (6.6) (14.9) (6.5)
Stock-based compensation expense 9.9 12.6 13.9 4.5 4.2 3.9 4.2 16.9 5.7 5.3 4.9 4.9 20.8 7.3
Loss on debt extinguishment - - - 16.3 - - - 16.3 - - - - - -
Acquisition related costs 6.8 - - - - - 0.7 0.7 - - - - - -
Cha ges for settlement of wage and hour litigation 0.5 0.6 - - - - - - - - - - - -
Non-GAAP Adjusted EBITDA 179.8$ 188.4$ 265.5$ 105.7$ 66.4$ 91.9$ 126.0$ 390.0$ 129.2$ 86.2$ 108.2$ 118.0$ 441.6$ 97.6$
Reconciliation of Non-GAAP Adjusted EBITDA (from above) as a % of Revenue
Fiscal 2013 Fiscal 2014 Fiscal 2015 Q1-16 Q2-16 Q3-16 Q4-16 Fiscal 2016 Q1-17 Q2-17 Q3-17 Q4-17 Fiscal 2017 Q1-18
Total contract revenues 1,608.6$ 1,811.6$ 2,022.3$ 659.3$ 559.5$ 664.6$ 789.2$ 2,672.5$ 799.2$ 701.1$ 786.3$ 780.2$ 3,066.9$ 756.2$
EBITDA as a percentage of contract revenues 10.4% 10.3% 12.8% 13.1% 11.3% 13.8% 15.8% 13.7% 15.6% 11.8% 13.8% 15.4% 14.2% 12.8%
Non-GAAP Adjusted EBITDA as a % of contract revenues 11.2% 10.4% 13.1% 16.0% 11.9% 13.8% 16.0% 14.6% 16.2% 12.3% 13.8% 15.1% 14.4% 12.9%
Investor
Presentation
November &
December 2017