Re: Brain/Brawn - Dycom (sym:DY) Q400 CC Notes
Thread- As most know, I follow the brain/brawn companies not only from a direct investment perspective, but also from the point of view of trying to figure out where the telecommunications network is heading. Dycom is a good company to follow because they have an even split between the telcos and cablecos.
One point of interest was their BellSouth work seems to be accelerating. Not sure what’s going on there but according to BLS website, they have over 90% of their customers within 12,000 feet of fiber. They are also leading in FTTH customers and I forgot the stats on this one and can’t find them on their website. I picked them up recently in a hard copy article, and was impressed with the figures.
This was also a surprise to me-- The HFC overbuilders. I don’t get it. What kind of incentive is there for a HFC planted to be laid over another? I didn’t realize this, but apparently it makes sense because DY just talked about a big one they are doing in Kansas for Digital Access. It’s a 3,400 mile HFC plant that will bring them in about $90 million in revenues for the work they are doing building it. And apparently that pales in comparison to another overbuilder in the area, Everest Communications.
DY said the overbuilders in general create a network that will be disruptive to their competitors. They target about 25 megbit/sec symetrical speeds over their HFC network. I found this very interesting.
I noticed that ATT has moved down from a Q1 13% customer to a current 8% customer. Proably explains a little about Harmonic's woes. But this doesn't mean ATT is busy. As they recently stated, they are still going after 500,000 local cable telephony customers and this may be where their current efforts are. Today's WSJ news about that free five month LD and local deal is a sign they are getting agressive about getting those 500,000 customers signed up.
Other than the above, it was a typical call with dramatic increases in both the top and bottom lines. But as they approach a billion in annual revenues, one wonders how much more effort it will take to keep hitting the kind of growth rates they have done over the last couple of years. And of course you have to weigh this against all the PR coming out of the telcos and cablecos about how much of their networks are fully upgraded. I’m of the opinion that a lot of their PR is just that. And they consistently overstate their positions. This is a hard figure to get a handle on for that reason and caution is warranted. -MikeM(From Florida)
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Fourth Quarter ended July 29, 2000
Rev $239 million up 57% yr/yr
Net $21.6 million up 46% yr/yr
Backlog as of July 29, 2000 was $1,155,800,000
Internal yr/yr revenue growth for quarter was 38%
Internal revenue growth for year was 34%
If including Fugal Acquisition then:
Quarter revenue growth was 49% yr/yr
Annual revenue growth was 42%
Fugal had great growth with Williams, Broadwing, and USWest
Performed Q4 work in 44 states
Headcount 7,261
DirectTV (conversion of PrimeStar subscribers) and Williams Communications were above normal in Q4
Digital Access is HFC overbuilder in Kansas. A 3,400 miles network. $85-$100 million in revenues
Everest Communication overbuilder in Kansas was much bigger (not a DY contract).
Utilicom in Indiana is a HFC overbuilder they have recently completed.
Overbuilders target for broadband seems to be about 25 Mb/s symmetrical.
BellSouth was at highest level ever
Comcast took a distinct turn upwards
Charter and Aldelphia are growing
Top five customers Q400 are 51% of total revenues
BellSouth 15.5%
Comcast 11.6%
Williams 8.3%
PrimeStar/Direct TV 7.6%
TCI(ATT) 7.5%
Telco 47.5%
Cableco 46.2%
Underground 4.1%
Electrical 2.2%
CO business was 7-8% of total |
