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| 8-K - 8-K - DYCOM INDUSTRIES INC | dyfy2016q48k-septinvestorp.htm |
DYCOM INDUSTRIES, INC.
INVESTOR PRESENTATION
September 2016
Exhibit 99.1
2
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 August
31, 2016 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 31 through 37 of this presentation. Non-GAAP financial measures should be considered in addition to,
but not as a substitute for, our reported GAAP results.
3
Leading supplier of specialty contracting services to
telecommunication providers
Nationwide footprint
Operates in all 50 states, Washington, D.C. and in Canada
Over 40 operating subsidiaries
Over 12,750 employees
Strong revenue base and customer relationships
Contract revenues of $789.2 million in Q4-16 compared to
$578.5 million in Q4-15, organic growth of 20.0% *
Non-GAAP Adjusted EBITDA at 16.0% of revenue in Q4-16
compared to 15.3% in Q4-15
Non-GAAP Adjusted Diluted EPS increased to $1.64 in
Q4-16 compared to $0.97 diluted earnings per share in Q4- 15 **
Solid financial profile
Liquidity exceeds $426 million at July 30, 2016, consisting of
availability under our Credit Facility and cash on hand
Dycom Overview
See “Regulation G Disclosure” slides 31-37 for a reconciliation of GAAP to Non-GAAP financial measures.
* Organic growth excludes contract revenues of acquired businesses not included for the entire period of Q4-16 and Q4-15 and adjusts
for the additional week of operations as a result of our fiscal calendar.
** Fiscal 15 diluted earnings per share is on a GAAP basis, as there were no Non-GAAP adjustments to Fiscal 15
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 less than 15% 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 (Dec. 2015)
5
Telecommunication Industry Overview
“Consistent with our plan for the year, Capex spending
this quarter increased year-over-year as we continue
to expand both our Broadband fibre footprint as well
as our Internet and Wireless network capacity to
support customer and usage growth.” Glen LeBlanc,
Bell Canada, EVP, CFO - August 2016
“But there is no doubt, where we have IPTV and where
we have fibre is where we see the best market share
growth for us” George Cope, Bell Canada, President
and CEO – August 2016
“[…]the reason why it's so important in my view to
make these investments is because I'm not
concerned with concluding the dividend growth
model in 2019. I'm concerned with elongating the
dividend growth model post 2019. And our ability to
do that is contingent upon the investments that we
make today in what is effectively successful
broadband technologies on the wireless and the
wireline front.”
Darren Entwistle, TELUS Corporation, President &
CEO – August 2016
“You have seen us up a little bit of our capital guidance
here, not only to include wireless but also to lean in a
little bit as we're never going to let our network
advantage fall off and prepare to invest as we move
forward, not only for this year but in the years ahead.
Clearly, we see broadband and leveraging fiber deeper.
So the return on investment is very, very attractive.”
Vito Culmone, Shaw Communications Inc., CFO – July
2016
“So on that one, I think we and our competitors
have been consistent that we are battling house by
house in areas where we are investing and they are
investing.”
“Why anybody would go with less than 100 meg
speed is a puzzle to me.” Guy Laurence, Rogers
Communications Inc., President & CEO - July 2016
6
Massive investment cycle in early stages - total U.S. homes passed with fiber less than 15%
Telecommunication Industry Overview
(a) Potential of 124.6 million U.S. households (Statista-2015) with estimate that each home will
be passed by two separate telecom providers.
Source: Fiber to the Home Council (FTTH Council) (Nov. 2015).
188 million
75% of
homes
commercially
viable for
fiber passing
250 million
passings (a) Eventual fiber passings estimated to
be approximately 188 million
26 million fiber passings completed
through 2015 - over a decade in
process
“And as we would expect, capital expenditures have trended up as we kind of finish out our Fioptics
investments. [.…]. If we talk about the capital build and where we are at there, today we've covered
about 50% of our footprint. We anticipate going somewhere from 70-ish%, 75% by the time it's all
done.”
Chris Elma, Cincinnati Bell Inc., VP Finance & Treasurer – December 2015
7
Strong Secular Trend
“IP traffic in North America will reach 59.1 EB (exabytes) per month by 2020, growing at a CAGR of 19
percent.” Cisco VNI: Forecast and Methodology, 2015–2020 (June 2016)
“In North America, 88% of fixed broadband connections will be faster than 10 Mbps in 2020, up from
64% today.” Cisco VNI Complete Forecast Highlights (2016)
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
North America Internet Protocol Traffic vs. GDP Growth
8
Industry drivers
Firm and strengthening end market drivers
Telephone companies deploying FTTx to enable video offerings and 1 gigabit connections
Cable operators continuing to deploy fiber to small and medium businesses with overall
cable capital expenditures, new build opportunities, and capacity expansion projects
increasing
Wireless carriers increasing 4G capacity and augmenting 4G with new 5G technologies
Connect America Fund (“CAF”) II projects in planning, engineering, and construction,
with activity accelerating. We are executing meaningful assignments from one recipient
for fixed wireless deployments
Customers are consolidating supply chains creating opportunities for market share
growth and increasing the long-term value of our maintenance business
Encouraged that industry participants are committed to multi-year capital spending
initiatives which in most cases are meaningfully accelerating and expanding in scope
9
Key Driver: FTTx Deployments
“The next phase of driving fiber into our network is our GigaPower
deployment. Over the next few years we expect to reach at least
12.5 million customer locations with our gigabit broadband service.
We now have more than 2.2 million fiber-to-the-home customer
locations, and we expect to reach 2.6 million or more by the end of
the year. ”
John Stephens, AT&T Inc., Senior EVP, CFO - July 2016
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
“in terms of 40 meg or higher, we're saying that basically by the
end of 2018, and this is really top 25 markets, that number could
be up in the 80%, 85% range. […] We also said that by the end of
2019 we felt like across all markets we'd probably have 11 million
addressable homes 100 meg or higher and about 3 million homes
across our addressable enabled units across that location at a gig
or higher.” Tony Davis, CenturyLink, VP of IR - August 2016
10
Key Driver: Fiber to Businesses
1 Trailing Twelve Month Period ended June 30, 2016
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.
“[...] business services which continues to deliver excellent results. Revenue increased 17% to $1.4 billion
with the small business segment accounting for about 75% of our revenue and 60% of our growth.
Revenue for the midsize business segment continues to grow at an attractive rate and its contribution as a
percentage of total business revenue is increasing. Overall business services has strong positive
momentum and continues to represent a large and attractive growth opportunity for the Company.”
Mike Cavanagh, Senior EVP & CFO, Comcast – July 2016
Revenue earned by Comcast and Charter from Business Services totaled $10.3 Billion1 of an Addressable
Market of $70 billion
2
Sources: Comcast and Charter Press Releases and transcripts
11
Key Driver: Wireless Network Upgrades
“[.…] going back and taking a parochial view of a fiber build, the enterprise, you might look at just the enterprise need
or you might just look at a wholesale need or just a wireless need. And our desire to build a lot more small cells, which is
the right capacity solution for us to relieve our macrolevel cell site, that is of great value. But while you are doing that,
while you are building that fiber, it's only intuitive that you throw a lot of extra strands in the ground, you put your
manholes and/or your handholes in very different spots to maximize the accessibility. As we go down and up different
streets, we will be building a lot of fiber in advance of all of the use cases that we see. [….] The other end is again
enterprise, wholesale, consumer, small business, medium business, smart cities, muni partnerships, all of these different
things; let alone we need from the Wireless point of view. It really puts us in a great spot.”
David Small, Verizon Communications Inc. – EVP – August 2016
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
Growth in Number of Cell Sites¹
1 Source: Industry publications
* Compound Annual Growth Rate (CAGR)
*
12
Key Driver: Connect America Fund
“Our CAF-II build remains underway and we are on track to bring higher-speed capabilities to an
additional 750,000 households over the coming years. Although the minimum speed in CAF-II markets
will be 10 megabits, many of these households will be served with higher speeds as we deploy the same
leading-edge technology that is allowing us to improve the speed in our existing footprint.”
Dan McCarthy, Frontier Communications Corporation - President and CEO - August 2016
New projects from Connect America Fund deploying fiber deeper into networks
Connect America Fund (“CAF”) is a FCC initiative to bring broadband access to rural
communities
CAF Phase II – FCC offers support of up to $1.676 billion annually to price cap carriers to
expand broadband service to rural America
Multi-year subsidies; must provision broadband speeds of at least 10 Mbps
downstream/1 Mbps upstream
Over $1.5 billion in funding was accepted in August 2015 by the price cap carriers
(including AT&T, CenturyLink, Windstream, Frontier and others) with the remaining
$175 million to be allocated through an auction process
Sources: FCC.gov
13
Intensely Focused on Telecommunications Market
Outside Plant & Equipment Installation
Premise Equipment Installation
Wireless
Engineering
Underground Facility Locating
Contract revenues of $2.673 billion for Fiscal 2016 Services Crucial to Customers’ Success
Electric and
Gas Utilities
and Other
Underground
Facility Locating
Telecommunications
Dycom is well-positioned to benefit from future growth opportunities
14
Local Credibility, National Capability
Dycom headquarters
Primary locations
Subsidiaries Dycom’s Nationwide Presence
15
Focused on High Value Profitable Growth
Anticipate emerging technology trends that drive capital spending
Deliberately target high quality, long-term industry leaders which
generate the vast majority of the industry’s profitable opportunities
Selectively acquire businesses that complement our existing
footprint and enhance our customer relationships
Leverage our scale and expertise to expand margins through best
practices
16
Well Established Customers
Top Customers
Dycom has established relationships with:
Telephone companies
Wireless carriers
Cable television multiple system operators
Electric utilities and others
Customer Revenue Breakdown Q4-16
Blue-chip, investment grade customers comprise a substantial portion of revenue
17
Durable Customer Relationships
Revenues ($ in millions)
Note: For comparison purposes, revenues from Charter Communications, Inc., Time Warner Cable Inc., and Bright House Networks, LLC have been
combined for periods prior to their May 2016 merger.
18
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 $6.031 billion as of Q4-16
compared to $3.680 billion at Q4-15
Revenue by Contract Type for Fiscal 2016
Backlog ($ 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. The significant majority of our backlog estimates
comprise services under master service agreements and long-term contracts. Backlog is not a measure defined by United
States generally accepted accounting principles; however, it is a common measurement used in our industry. Our methodology
for determining backlog may not be comparable to the methodologies used by others.
Master Service Agreements
Long-term
contracts Short-term
contracts
19
10 Years of Robust Cash Flow Generation
Sources and Uses of Cash ($ in millions)
Notes: Amounts represent cumulative cash flow for fiscal 2007 – fiscal 2016; 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 $1.097
billion since fiscal 2007
Prudent approach to capital
allocation:
$392 million invested in share
repurchases
$634 million invested in
business acquisitions
$700 million in cap-ex, net of
disposals, or approximately 40%
of allocation
37%
Business
Acquisitions
40%
Cap-ex, net
23%
Share
Repurchases
Fiscal 2007 – Fiscal 2016
Robust cash flow generation and prudent capital allocation provide strong foundation
for returns
20
Industry increasing network bandwidth dramatically
Major industry participants deploying significant wireline networks
Newly deployed networks provisioning 1 gigabit speeds; speeds
beyond 1 gigabit envisioned
Industry developments have produced opportunities which in
aggregate are without precedent
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
Revenues and opportunities driven by this industry standard
accelerated
Customers are revealing with more specificity multi-year initiatives
that are being implemented and managed locally
Calendar 2016 performance to date and outlook clearly
demonstrate we are currently in the early stages of a massive
investment cycle in wireline networks
Dycom’s scale, market position and financial strength position
it well as opportunities continue to expand
Industry Themes
Financial Update
22
Strong operating results
Contract revenues of $789.2 million in Q4-16 compared to $578.5 million in Q4-15, organic
growth of 20.0% *
Non-GAAP Adjusted EBITDA of $126.0 million, or 16.0% of revenues in Q4-16, compared to
$88.5 million, or 15.3% in Q4-15
Non-GAAP Adjusted Diluted EPS increased to $1.64 in Q4-16 compared to $0.97 diluted
earnings per share in Q4-15**
Solid financial profile
Strong balance sheet and cash flows; Sound credit metrics and no near term debt maturities
Robust operating cash flows of $182.5 million during Q4-16 and $261.5 million for fiscal 2016
Total cash paid for acquisitions of $108.4 million during Q4-16 and $157.2 million for fiscal
2016
Capital structure designed to produce strong returns
During fiscal 2016, repurchased 2,511,578 common shares for $170 million at an average
price of $67.69 per share
Financial Overview
See “Regulation G Disclosure” slides 31-37 for a reconciliation of GAAP to Non-GAAP financial measures.
* Organic growth excludes contract revenues of acquired businesses not included for the entire period of Q4-16 and Q4-15 and adjusts
for the additional week of operations as a result of our fiscal calendar.
** Fiscal 15 diluted earnings per share is on a GAAP basis, as there were no Non-GAAP adjustments to Fiscal 15
23
Contract Revenue Trend
Annual Organic Revenue Trend
Quarterly Contract Revenues
Quarterly Organic Revenue Trend
Annual Growth in Contract Revenues
Financial charts - $ in millions
See “Regulation G Disclosure” slides 31-37 for a reconciliation of GAAP to Non-GAAP financial measures.
Strong and sustained financial performance
*
24
Earnings
Non-GAAP Adjusted EBITDA Quarterly Non-GAAP Adjusted EBITDA
Non-GAAP Adjusted Diluted EPS
Financial charts - $ in millions, except earnings per share amounts
See “Regulation G Disclosure” slides 31-37 for a reconciliation of GAAP to Non-GAAP financial measures.
Quarterly Non-GAAP Adjusted Diluted EPS
25
Strong balance sheet and robust liquidity
Liquidity and Cash Flow
Financial tables - $ in millions
Liquidity exceeds $426 million at the end of
Q4-16 consisting of availability from our Credit
Facility and cash on hand
During Q4-16, reduced borrowings on credit
agreement by $17.8 million to $346.3 million
Cash Flow from Operating Activities
Operating cash flows support strong organic
growth
(a) During Q4-16, the Company adopted of FASB’s ASU 2015-03 which reclassified approximately $1.2 million in debt issuance costs in both Q3-16 and Q4-16 from other assets to a contra-liability associated with the Company’s Senior Convertible Notes.
(b) Availability on Revolver presented net of $57.7 million and $57.6 million for outstanding L/C’s under the Senior Credit Agreement at Q3-16 and Q4-16, respectively.
26
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
Organic revenue grew 20.0 % in Q4-16 and 22.7% in fiscal 2016, reflecting growth from
several key customers
Pursue complementary acquisitions
Fiscal 2013 - 2016 acquisitions further strengthened Dycom’s customer base, geographic
scope, and technical service offerings
During fiscal 2015 and 2016, acquired 9 businesses for $189.1 million further
strengthening customer relationships and expanding geographic reach
Share repurchases
Repurchased approximately 23.0 million shares for approximately $579 million since
fiscal 2006
$100 million authorization available for share repurchases through October 2017
See “Regulation G Disclosure” slides 31-37 for a reconciliation of GAAP to Non-GAAP financial measures.
Dycom is committed to maximizing long term returns through prudent capital
allocation
Questions and
Answers
Selected Information from
Q4-16 Dycom Results
Conference Call Materials
The following slides 29-31 were used on Aug 24, 2016 in connection with the Company’s conference call to discuss fiscal 2016 fourth 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 29-31 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 Aug 24, 2016.
29
Q1-2016
Included for
comparison
Q1-2017 Outlook and Commentary
Contract Revenues $ 659.3 $780 - $810 Broad range of demand from several large customers
Robust 1 gigabit deployments, cable capacity projects and CAF II accelerating, core
market share growth
Total revenue expected to include approximately $55.0 million in Q1-17 compared
to $29.9 million in Q1-16 from businesses acquired in Q1-16 and Q4-16
For the fiscal year of 2017, recently acquired operations of Goodman Networks
expected to produce revenues of approximately $100 million
Gross Margin % 23.1% Gross Margin % which
increases slightly
from Q1-16
Solid mix of customer growth opportunities
G&A Expense % 7.8% G&A as a % of revenue
in-line with Q1-16
G&A as a % of revenue supports our increased scale
Outlook for G&A expense % includes share-based compensation Share-based compensation $ 4.5 $ 5.7
Depreciation &
Amortization
$ 27.4 $35.0 - $35.7 Depreciation reflects cap-ex supporting growth and maintenance
Includes amortization of approximately $6.2 million in Q1-17 compared to
$4.8 million in Q1-16
Non-GAAP Adjusted Interest
Expense
$ 7.4 Approximately $ 4.5
Includes 0.75% cash coupon on Senior Convertible Notes, interest on Senior Credit
Agreement, amortization of debt issuance costs and other interest. Q1-16 also
included interest on 7.125% Notes previously outstanding.
Non-GAAP Adjusted Interest Expense excludes non-cash amortization of debt
discount of $4.3 million in Q1-17 compared to $1.8 million in Q1-16
Other Income, net $ 1.5 $ 0.2 - $ 0.6 Other income, net primarily includes gain (loss) on sales of fixed assets and discount
charges related to non-recourse sales of accounts receivable in connection with a
customer’s supplier payment program
Loss on debt
extinguishment
$16.3 $ - Q1-16 included pre-tax charge of $16.3 million for loss on debt extinguishment in
connection with the redemption of the 7.125% senior subordinated notes
Non-GAAP Adjusted EBITDA
%
16.0% Non-GAAP Adjusted
EBITDA % in-line or better
than the Q1-16 result
Adjusted EBITDA amount increases from revenue growth and strong operating
performance
Diluted Earnings per Share
$ 1.24
Non-GAAP Adjusted
Diluted EPS
$ 1.55 - $ 1.70
Non-GAAP Adjusted Diluted EPS excludes non-cash amortization of debt discount
on Senior Convertible Notes. See slide 35 for reconciliation of guidance for Non-
GAAP Adjusted Diluted Earnings per Common Share
Effective tax rate of approximately 37.5% during Q1-17
Diluted Shares 33.9 million 32.2 million
Q1-2017 Outlook
See “Regulation G Disclosure” slides 31-37 for a reconciliation of GAAP to Non-GAAP financial measures.
Financial table- $ in millions, except earnings per share amounts (% as a percent of contract revenues)
Q1-2017 Outlook – This slide was prepared and used on Aug 24, 2016 in connection with the Company’s conference call to discuss fiscal 2016 fourth 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 Aug 24, 2016.
30
Looking Ahead to Q2-2017
Q2-2016
Included for comparison
Q2-2017 Outlook and Commentary
Contract Revenues $ 559.5 Total revenue growth %
in high teens or slightly
better as a % of revenue
compared to Q2-16
Expectation of normal winter weather patterns
Broad range of demand from several large customers
Robust 1 gigabit deployments, cable capacity projects and CAF II
accelerating, core market share growth
Total revenue expected to include approximately $20.0 million in Q2-17
from businesses acquired in Q4-16 compared to none in Q2-16
Gross Margin %
19.5% Gross Margin % which
increases from Q2-16
Solid mix of customer growth opportunities
Q2 margins display impacts of seasonality including:
* inclement winter weather
* fewer available workdays due to holidays
* reduced daylight work hours
* restart of calendar payroll taxes
G&A Expense % 8.4% G&A as a % of revenue
in-line with Q2-16
G&A as a % of revenue supports our increased scale
Outlook for G&A expense % includes share-based compensation Share-based compensation $ 4.2 $ 5.2
Depreciation &
Amortization
$ 29.9 $35.5 - $36.2
Depreciation reflects cap-ex supporting growth and maintenance
Includes amortization of approximately $6.1 million in Q2-17 compared to
$4.7 million in Q2-16
Non-GAAP Adjusted
Interest Expense
$ 3.7 Approximately $ 4.3 Non-GAAP Adjusted Interest Expense excludes non-cash amortization of
debt discount of $4.4 million in Q2-17 compared to $4.1 million in Q2-16
Other Income, net $ 1.1 $ 0.2 - $ 0.7 Other income, net primarily includes gain (loss) on sales of fixed assets and
discount charges related to non-recourse sales of accounts receivable in
connection with a customer’s supplier payment program
Non-GAAP Adjusted
EBITDA %
11.9% Non-GAAP Adjusted
EBITDA % which
increases from Q2-16
Adjusted EBITDA increases from revenue growth and improved operating
performance
See “Regulation G Disclosure” slides 31-37 for a reconciliation of GAAP to Non-GAAP financial measures.
Financial table- $ in millions (% as a percent of contract revenues)
Looking Ahead To Q2-17– This slide was prepared and used on Aug 24, 2016 in connection with the Company’s conference call to discuss fiscal 2016 fourth 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 Aug 24, 2016.
31
Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures
Outlook – Diluted Earnings per Common Share
Unaudited
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 37.
(a) Guidance for Diluted earnings per common share and Non-GAAP Adjusted Diluted Earnings per Common Share for the three months ending October 29, 2016
were computed using approximately 32.2 million in diluted weighted average shares outstanding.
(b) The Company expects to recognize approximately $4.3 million in pre-tax interest expense during the three months ending October 29, 2016 for non-cash
amortization of the debt discount associated with its 0.75% Senior Convertible Notes. The Company excludes the effect of this non-cash amortization in its Non-
GAAP financial measures.
Outlook for the
Three Months Ending
October 29, 2016 (a)
Diluted earnings per common share $1.47 - $ 1.62
Adjustment
After-tax non-cash amortization of debt discount (c) $ 0.08
Non-GAAP Adjusted Diluted Earnings per Common Share $1.55 - $ 1.70
Appendix: Regulation G Disclosure
This slide was prepared and used on Aug 24, 2016 in connection with the Company’s conference call to discuss fiscal 2016 fourth 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 Aug 24, 2016.
32
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 37.
Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures
Non-GAAP Organic Contract Revenue
Unaudited
($ in millions)
GAAP %
Non-GAAP -
Organic %
Revenues from
businesses
acquired
Additional week
as a result of our
52/53 week fiscal
year
Q4-16 Organic Growth:
Q4-16 789.2$ (44.8)$ (53.2)$ 691.2$ 36.4% 20.0%
Q4-15 578.5$ (2.4)$ -$ 576.1$
Prior Quarters Organic Growth (Decline):P ior Qua ters Organic Growth (Decline):
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$
Q1-16 659.3$ (39.5)$ -$ 619.7$ 29.2% 21.9%
Q1-15 510.4$ (1.9)$ -$ 508.5$
Q4-15 578.5$ (11.8)$ -$ 566.7$ 20.0% 18.2%
Q4-14 482.1$ (2.8)$ -$ 479.3$
Q3-15 492.4$ (8.9)$ -$ 483.4$ 15.5% 13.4%
Q3-14 426.3$ -$ -$ 426.3$
Q2-15 441.1$ (9.5)$ -$ 431.5$ 12.9% 10.5%
Q2-14 390.5$ -$ -$ 390.5$
Q1-15 510.4$ (10.1)$ -$ 500.3$ (0.5)% (2.4)%
Q1-14 512.7$ -$ -$ 512.7$
Contract
Revenues NON-GAAP ADJUSTMENTS
Revenue Growth
(Decline) %
Non-GAAP Organic
Contract Revenues
33
1 Non-GAAP adjustments in FY 2016 reflect adjustments in Q4-16 resulting from the Company’s 52/53 week fiscal year of $52.9 million. The Q4-16 Non-GAAP adjustments reflect the impact of the additional week
in Q4-16 and are calculated by (i) contract revenues less acquired revenue, divided by (ii) 14 weeks. The result, representing one week of contract revenues, is subtracted from the GAAP-contract revenues to
calculate 13 weeks of revenues for Q4-16 on a Non-GAAP basis for comparison purposes.
Contract Revenues and Organic Growth - Reconciliation of GAAP to Non-GAAP Measures ($ in millions)
The table below reconciles GAAP revenue growth to Non-GAAP organic revenue growth
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 37.
Notes: Amounts may not add due to rounding.
Appendix: Regulation G Disclosure
Revenues
from
businesses
acquired
Revenues
from storm
restoration
services
Adjustment for
extra week as
a result of
52/53 week
fiscal year 1
Total
Adjustment GAAP NON-GAAP
FY 2016 2,672.5$ (159.0)$ -$ (52.9)$ (211.9)$ 2,460.6$ 32.2% 22.7%,02 .3 (17.7 ( 7.7 ,004.
FY 2015 2,022.3$ (17.7)$ -$ -$ (17.7)$ 2,004.6$
FY 2015 2,022.3$ (40.4)$ -$ -$ (40.4)$ 1,982.0$ 11.6% 9.6%1,811.6 (2.8 (2.8 ,808.8
FY 2014 1,811.6$ (2.8)$ -$ -$ (2.8)$ 1,808.8$
FY 2014 1,811.6$ (499.3)$ -$ -$ (499.3)$ 1,312.3$ 12.6% 4.7%,608. 337.9 354.6 ,254.0
FY 2013 1,608.6$ (337.9)$ (16.7)$ -$ (354.6)$ 1,254.0$
FY 2013 1,608.6$ (337.9)$ (16.7)$ -$ (354.6)$ 1,254.0$ 33.9% 4.9%,2 1.1 - (6.0 ,195.1
FY 2012 1,201.1$ -$ (6.0)$ -$ (6.0)$ 1,195.1$
FY 2012 1,201.1$ (54.5)$ (6.0)$ -$ (60.5)$ 1,140.6$ 16.0% 15.4%,035.9 33.8 47.8 988.1
FY 2011 1,035.9$ (33.8)$ (14.1)$ -$ (47.8)$ 988.1$
FY 2011 1,035.9$ (33.8)$ (14.1)$ -$ (47.8)$ 988.1$ 4.8% 2.0%988.6 - (20.1) 6 .5
FY 2010 988.6$ -$ -$ (20.1)$ (20.1)$ 968.5$
GAAP Contract
Revenues
NON-GAAP ADJUSTMENTS
NON-GAAP
Contract
Revenues 1
Organic Growth %
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 2007 through Fiscal 2016
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 Other Financing
and Investing
Activities
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)
FY-07 108.5 (62.3) (61.8) - 7.7 (0.4) 7.3
Cumulative 1,096.8$ (700.2)$ (634.3)$ (392.4)$ 641.4$ (4.8)$ 636.5$
Cash at July 29, 2006 27.3$
Cash at July 30, 2016 33.8
(6.5)$
630.0$
Difference represents beginning cash used during
the period
Total amount provided by Other Financing and
Investing Activities and beginning cash on hand
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)
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 37.
Appendix: Regulation G Disclosure
Fiscal 2011 Fiscal 2012 Fiscal 2013 Q4-14 Fiscal 2014 Q1-15 Q2-15 Q3-15 Q4-15 Fiscal 2015 Q1-16 Q2-16 Q3-16 Q4-16 Fiscal 2016
Net income 16.1$ 39.4$ 35.2$ 16.5$ 40.0$ 20.8$ 9.4$ 20.3$ 33.8$ 84.3$ 30.8$ 15.5$ 33.1$ 49.4$ 128.7$
Loss on debt extinguishment 8.3 - - - - - - - - - 16.3 - - - 16.3
Amortization of debt discount - - - - - - - - - - 1.8 4.1 4.2 4.6 14.7
Charges for settlement of wage and hour litigation 0.6 - 0.5 0.6 0.6 - - - - - - - - - -
Acquisition related costs 0.2 - 6.8 - - - - - - - - - - 0.7 0.7
Tax impact of adjustments (3.3) - (3.0) (0.2) (0.2) - - - - - (6.8) (1.6) (1.6) (2.0) (12.0)
Total adjustments, net of tax 5.8$ -$ 4.6$ 0.4$ 0.4$ -$ -$ -$ -$ -$ 11.2$ 2.5$ 2.6$ 3.3$ 19.6$
Non-GAAP Adjusted Net income 21.9$ 39.4$ 39.8$ 16.9$ 40.3$ 20.8$ 9.4$ 20.3$ 33.8$ 84.3$ 42.0$ 18.0$ 35.7$ 52.7$ 148.4$
Diluted Earnings Per Share
Net income 0.45$ 1.14$ 1.04$ 0.47$ 1.15$ 0.59$ 0.27$ 0.58$ 0.97$ 2.41$ 0.91$ 0.46$ 1.00$ 1.54$ 3.89$
Adjusting Items from above, after tax 0.16 - 0.14 0.01 0.01 - - - - - 0.33 0.08 0.08 0.10 0.59
Non-GAAP Adjusted Diluted Earnings Per Common Share 0.61$ 1.14$ 1.18$ 0.48$ 1.16$ 0.59$ 0.27$ 0.58$ 0.97$ 2.41$ 1.24$ 0.54$ 1.08$ 1.64$ 4.48$
F lly ilut d Shares (in thousands) 35,754 34,482 33,782 34,960 34,816 35,118 35,127 35,029 34,831 35,027 33,887 33,520 33,051 32,074 33,116
Fiscal 2011 Fiscal 2012 Fiscal 2013 Q4-14 Fiscal 2014 Q1-15 Q2-15 Q3-15 Q4-15 Fiscal 2015 Q1-16 Q2-16 Q3-16 Q4-16 Fiscal 2016
Interest expense, net 15.9$ 16.7$ 23.3$ 6.6$ 26.8$ 6.7$ 6.7$ 6.6$ 6.9$ 27.0$ 9.1$ 7.9$ 8.0$ 9.7$ 34.7$
Adjusting Items from above - - - - - - - - - - (1.8) (4.1) (4.2) (4.6) (14.7)
Non-GAAP Adjusted Interest Expense 15.9$ 16.7$ 23.3$ 6.6$ 26.8$ 6.7$ 6.7$ 6.6$ 6.9$ 27.0$ 7.4$ 3.7$ 3.8$ 5.1$ 20.0$
Reconciliation of Net Income to Non-GAAP Adjusted Net Income and Diluted EPS to Non-GAAP Adjusted Diluted EPS
Reconciliation of Non-GAAP Adjusted Interest Expense
36
Appendix: Regulation G Disclosure
Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Financial Measures
Non-GAAP Adjusted EBITDA and certain Credit Metrics
Unaudited ($ in 000's, except per share amounts)
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 37.
Notes: Amounts above may not add due to rounding.
(a) Amounts presented for periods prior to the fourth quarter of fiscal 2016 reflect the retrospective adoption of Accounting Standards Update No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30):
Simplifying the Presentation of Debt Issuance Costs, under which certain debt issuance costs are now presented as a contra-liability of the corresponding long-term debt rather than as other non-current assets.
Fiscal 2011 Fiscal 2012 Fiscal 2013 Q4-14 Fiscal 2014 Q1-15 Q2-15 Q3-15 Q4-15 Fiscal 2015 Q1-16 Q2-16 Q3-16 Q4-16 Fiscal 2016
Net income 16.1$ 39.4$ 35.2$ 16.5$ 40.0$ 20.8$ 9.4$ 20.3$ 33.8$ 84.3$ 30.8$ 15.5$ 33.1$ 49.4$ 128.7$
Provision (benefit) for income taxes 12.4 25.2 23.0 10.7 26.3 13.5 6.1 12.0 19.6 51.3 18.6 10.0 19.4 29.6 77.6
Interest expense, net 15.9 16.7 23.3 6.6 26.8 6.7 6.7 6.6 6.9 27.0 9.1 7.9 8.0 9.7 34.7
Depreciation 55.7 56.2 64.8 18.9 74.5 18.8 19.1 19.8 21.5 79.3 22.7 25.2 27.0 30.6 105.5
Amortization 6.8 6.5 20.7 4.2 18.3 4.1 4.1 4.1 4.4 16.7 4.8 4.7 4.5 5.4 19.4
EBITDA 106.9 144.0 167.0 56.8 185.9 64.0 45.6 62.9 86.2 258.7 86.0 63.2 92.0 124.7 366.0
Gain on sale of fixed assets (10.2) (15.4) (4.7) (2.8) (10.7) (1.5) (1.7) (3.1) (0.9) (7.1) (1.1) (1.0) (4.1) (3.6) (9.8)
Stock-based compensation expense 4.4 7.0 9.9 2.9 12.6 3.9 3.7 3.2 3.2 13.9 4.5 4.2 3.9 4.2 16.9
Loss on debt extinguishment 8.3 - - - - - - - - - 16.3 - - - 16.3
Acquisition related costs 0.2 - 6.8 - - - - - - - - - - 0.7 0.7
Charges for settlement of wage and hour litigation 0.6 - 0.5 0.6 0.6 - - - - - - - - - -
Non-GAAP Adjusted EBITDA 110.2$ 135.5$ 179.8$ 57.5$ 188.4$ 66.4$ 47.6$ 63.0$ 88.5$ 265.5$ 105.7$ 66.4$ 91.9$ 126.0$ 390.0$
Fiscal 2011 Fiscal 2012 Fiscal 2013 Q4-14 Fiscal 2014 Q1-15 Q2-15 Q3-15 Q4-15 Fiscal 2015 Q1-16 Q2-16 Q3-16 Q4-16 Fiscal 2016
Total contract revenues 1,035.9$ 1,201.1$ 1,608.6$ 482.1$ 1,811.6$ 510.4$ 441.1$ 492.4$ 578.5$ 2,022.3$ 659.3$ 559.5$ 664.6$ 789.2$ 2,672.5$
EBITDA as a percentage of contract revenues 10.3% 12.0% 10.4% 11.8% 10.3% 12.5% 10.3% 12.8% 14.9% 12.8% 13.1% 11.3% 13.8% 15.8% 13.7%
Non-GAAP Adjusted EBITDA as a % of contract revenues 10.6% 11.3% 11.2% 11.9% 10.4% 13.0% 10.8% 12.8% 15.3% 13.1% 16.0% 11.9% 13.8% 16.0% 14.6%
Fiscal 2011 Fiscal 2012 Fiscal 2013 Fiscal 2014 Fiscal 2015 Fiscal 2016
Current and long-term debt (including Note Premium) 187.8$ 187.6$ 452.0$ 457.8$ 525.6$ 719.3$
Note Premium on 7.125% Senior Subordinated Notes - - 3.6 3.2 2.8 -
Debt discount & deferred financing charges (a) 4.7 4.3 6.3 5.6 4.9 111.9
Current and long-term debt (excludes Note Premium,
debt discount, and deferred fees)
192.6$ 191.9$ 454.7$ 460.2$ 527.7$ 831.3$
Less: Cash and equivalents 44.8 52.6 18.6 20.7 21.3 33.8
Net Debt (Cash) 147.8$ 139.3$ 436.1$ 439.5$ 506.4$ 797.5$
Non-GAAP Adjusted EBITDA 110.2$ 135.5$ 179.8$ 188.4$ 265.5$ 390.0$
Ratio of D bt to Non-GAAP Adjusted EBITDA 1.7x 1.4x 2.5x 2.4x 2.0x 2.1x
Rati of Debt to EBITDA 1.8x 1.3x 2.7x 2.5x 2.0x 2.3x
Ratio of Net Debt (Cash) to Non-GAAP Adjusted EBITDA 1.3x 1.0x 2.4x 2.3x 1.9x 2.0x
Ratio of Net Debt (Cash) to EBITDA 1.4x 1.0x 2.6x 2.4x 2.0x 2.2x
Ratio of EBITDA to Interest expense, net 6.7x 8.6x 7.2x 6.9x 9.6x 10.5x
Ratio of Non-GAAP Adjusted EBITDA to Interest expense, net 6.9x 8.1x 7.7x 7.0x 9.8x 11.2x
Reconciliation of Non-GAAP Adjusted EBITDA (from above) as a % of Revenue
Reconciliation of Net Income to Non-GAAP Adjusted EBITDA
Reconciliation of Leverage Ratio, Net Leverage Ratio, and Fixed Interest Charge Ratios
37
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, adjusted for the additional
week in the fourth quarter of fiscal 2016 as a result of the Company’s 52/53 week fiscal year. Non-GAAP Organic 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, loss on debt
extinguishment, 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 loss on debt extinguishment, non-cash amortization of the debt discount, certain non-recurring items and any tax impact
related to these items, and "Non-GAAP Adjusted Diluted Earnings per Common Share" as 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 0.75% senior convertible notes due 2021 (the "Notes") were allocated between debt and equity components. The
difference between the principal amount and the carrying amount of the liability component of the notes represents a debt discount. The debt discount will be amortized over
the term of the notes but will not result in periodic cash interest payments. During the three months ended October 24, 2015, January 23, 2016, April 23, 2016, and July 30,
2016 the Company recognized approximately $1.8 million, $4.1 million, $4.2 million and $4.6 million, respectively, in pre-tax interest expense for non-cash amortization of the
debt discount associated with the Notes. The Company has excluded the non-cash amortization of the debt discount from its Non-GAAP financial measures because it believes
it is useful to analyze the component of interest expense for the Notes that will be paid in cash. The exclusion of the non-cash amortization from the Company’s Non-GAAP
financial measures provides management with a consistent measure for assessing financial results.
• 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.
• Acquisition transaction related costs – The Company incurred costs of approximately $0.7 million in connection with the acquisition of Goodman Networks 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.
• 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 July 30, 2016 was calculated using an effective tax rate used for
financial planning and forecasting future results.
Appendix: Regulation G Disclosure
DYCOM INDUSTRIES, INC.
INVESTOR PRESENTATION
September 2016