DYCOM INDUSTRIES INC

Previous wording

We are a leading provider of specialty contracting services throughout the United States. These services include program management; planning; engineering and design; aerial, underground, and wireless construction; maintenance; and fulfillment services for telecommunications providers. Additionally, we provide underground facility locating services for various utilities, including telecommunications providers, and other construction and maintenance services for electric and gas utilities. We supply the labor, tools, and equipment necessary to provide these services to our customers.

Current wording

We are a leading provider of specialty contracting services throughout the United States. These services include program management, planning, engineering and design; aerial, underground, and wireless construction; maintenance; and fulfillment services for telecommunications providers. Additionally, we provide underground facility locating services for various utilities, including telecommunications providers, as well as other construction and maintenance services for electric and gas utilities. We supply the labor, tools, and equipment necessary to provide these services to our customers.

Previous wording

Significant demand for broadband services is driven by applications that require high speed connections as well as the everyday use of mobile data devices. To respond to this demand and other advances in technology, major industry participants are constructing or upgrading significant wireline networks across broad sections of the country. These wireline networks are generally designed to provision gigabit network speeds to individual consumers and businesses, either directly or wirelessly using 5G technologies. Industry participants have stated their belief that a single high capacity fiber network can most cost effectively deliver services to both consumers and businesses, enabling multiple revenue streams from a single investment. This view is increasing the appetite for fiber deployments, and we believe that the industry’s effort to deploy high capacity fiber networks continues to meaningfully broaden the set of opportunities for our industry. Increasing access to high-capacity telecommunications continues to be crucial to society, especially for rural America. The Infrastructure Investment and Jobs Act (“Infrastructure Act”) includes over $40 billion for the construction of rural communications networks in unserved and underserved areas across the country under the Broadband Equity Access and Deployment Program (“BEAD Program”). This represents an unprecedented level of support and meaningfully increases the rural market that we expect will ultimately be addressed. States are progressing through the requirements to submit their initial BEAD proposals. In addition, substantially all states have commenced programs that will provide funding for telecommunications networks even prior to the initiation of funding under the Infrastructure Act.

Current wording

Significant demand for broadband services is driven by applications that require high speed connections as well as the everyday use of mobile data devices. To respond to this demand and other advances in technology, an increasing number of diverse industry participants are constructing or upgrading wireline networks throughout the country. These wireline networks enable the delivery of gigabit network speeds to consumers and businesses. Dramatically increased speeds for consumers are being provisioned and consumer data usage is growing, particularly upstream.

Previous wording

We have established relationships with many leading telecommunications providers, including telephone companies, cable multiple system operators, wireless carriers, telecommunications equipment and infrastructure providers, as well as electric and gas utilities. Our customer base is highly concentrated, with our top five customers accounting for approximately 57.7%, 66.7%, and 66.2% of our total contract revenues during fiscal 2024, fiscal 2023, and fiscal 2022, respectively.

Current wording

We have established relationships with many leading telecommunications providers, including telephone companies, cable multiple system operators, wireless carriers, telecommunications equipment and infrastructure providers, as well as electric and gas utilities. Our customer base is highly concentrated, with our top five customers accounting for approximately 55.4%, 57.7%, and 66.7% of our total contract revenues during fiscal 2025, fiscal 2024, and fiscal 2023, respectively.

Previous wording

In addition, another customer contributed 5.5%, 3.7% and 3.7% to our total contract revenues during fiscal 2024, fiscal 2023, and fiscal 2022, respectively.

Current wording

In addition, another customer contributed 7.4%, 5.5% and 3.7% to our total contract revenues during fiscal 2025, fiscal 2024, and fiscal 2023, respectively.

Previous wording

The results of these businesses acquired are included in our consolidated financial statements from their respective dates of acquisition. The purchase price allocation of Bigham is preliminary and will be completed when valuations for intangible assets and other amounts are finalized within the 12-month measurement period from the date of acquisition.

Current wording

Results of the businesses acquired are included in our consolidated financial statements from their respective dates of acquisition. The purchase price allocations of the companies acquired in fiscal 2025 are preliminary and will be completed when valuations for intangible assets and other amounts are finalized within the 12-month measurement period from the date of acquisition.

Previous wording

Contract Revenues. We perform a majority of our services under master service agreements and other contracts that contain customer-specified service requirements. These agreements include discrete pricing for individual tasks including, for example, the placement of underground or aerial fiber, directional boring, and fiber splicing, each based on a specific unit of measure. Contract revenue is recognized over time as services are performed and customers simultaneously receive and consume the benefits we provide. Output measures, such as units delivered, are utilized to assess progress against specific contractual performance obligations for the majority of our services. For certain contracts, we use the cost-to-cost measure of progress as more fully described within Critical Accounting Policies and Estimates below.

Current wording

Contract Revenues. We perform a significant amount of our services under master service agreements and other contracts that contain customer-specified service requirements. These agreements include discrete pricing for individual tasks including, for example, the placement of underground or aerial fiber, directional boring, and fiber splicing, each based on a specific unit of measure. Contract revenue is recognized over time as services are performed and customers simultaneously receive and consume the benefits we provide. Output measures, such as units delivered, are utilized to assess progress against specific contractual performance obligations for the majority of our services. For certain contracts, we use the cost-to-cost measure of progress as more fully described within Critical Accounting Policies and Estimates below.

Previous wording

General and Administrative Expenses. General and administrative expenses primarily consist of employee compensation and related expenses, including performance-based compensation and stock-based compensation, legal, consulting and professional fees, information technology and development costs, provision for or recoveries of bad debt expense, acquisition and integration costs of businesses acquired, and other costs not directly related to the provision of our services under customer contracts. Our provision for bad debt expense is determined by evaluating specific accounts receivable and contract asset balances based on historical collection trends, the age of outstanding receivables, and the creditworthiness of our customers. We incur information technology and development costs primarily to support and enhance our operating efficiency. Our executive management team and the senior management of our subsidiaries perform substantially all of our sales and marketing functions as part of their management responsibilities.

Current wording

General and Administrative Expenses. General and administrative expenses primarily consist of employee compensation and related expenses, including performance-based compensation and stock-based compensation, legal, consulting and professional fees, information technology and development costs, amortization of implementation costs associated with cloud computing arrangements, provision for or recoveries of bad debt expense, acquisition and integration costs of businesses acquired, and other costs not directly related to the provision of our services under customer contracts. Our provision for bad debt expense is determined by evaluating specific accounts receivable and contract asset balances based on historical collection trends, the age of outstanding receivables, and the creditworthiness of our customers. We incur information technology and development costs primarily to support and enhance our operating efficiency. Our executive management team and the senior management of our subsidiaries perform substantially all of our sales and marketing functions as part of their management responsibilities.

Previous wording

Interest Expense, Net. Interest expense, net, consists of interest incurred on outstanding variable rate and fixed rate debt and certain other obligations and the amortization of debt issuance costs. In fiscal 2022, interest expense also included the non cash amortization of our convertible senior notes debt discount. See Note 14, Debt, in the notes to the consolidated financial statements in this Annual Report on Form 10-K for information on debt issuance costs and the non-cash amortization of the debt discount.

Current wording

Interest Expense, Net. Interest expense, net, consists of interest incurred on outstanding variable rate and fixed rate debt and certain other obligations and the amortization of debt issuance costs. See Note 14, Debt, in the notes to the consolidated financial statements in this Annual Report on Form 10-K for information on debt issuance costs.

Previous wording

Loss on Debt Extinguishment. Loss on debt extinguishment for fiscal 2022 of $0.1 million includes the write-off of deferred debt issuance costs on the 2021 Convertible Notes.

Current wording

Loss on Debt Extinguishment. Loss on debt extinguishment for fiscal 2025 of $1.0 million includes the write-off of deferred debt issuance costs in connection with the Credit Agreement amendment.

Previous wording

Seasonality and Fluctuations in Operating Results. Our contract revenues and results of operations exhibit seasonality and are impacted by adverse weather changes as we perform a significant portion of our work outdoors. Consequently, adverse weather, which is more likely to occur with greater frequency, severity, and duration during the winter, as well as reduced daylight hours, impact our operations during the fiscal quarters ending in January and April. Additionally, extreme weather conditions such as major or extended winter storms, droughts and tornados, and natural disasters, such as floods, hurricanes, tropical storms, whether as a result of climate change or otherwise, could also impact the demand for our services, or impact our ability to perform our services. Also, several holidays fall within the fiscal quarter ending in January, which decreases the number of available workdays in this fiscal quarter. Because of these factors, we are most likely to experience reduced revenue and profitability or losses during the fiscal quarters ending in January and April compared to the fiscal quarters ending in July and October.

Current wording

Seasonality and Fluctuations in Operating Results. Our contract revenues and results of operations exhibit seasonality and are impacted by adverse weather changes as we perform a significant portion of our work outdoors. Consequently, adverse weather, which is more likely to occur with greater frequency, severity, and duration during the winter, as well as reduced daylight hours, impact our operations during the fiscal quarters ending in January and April. Additionally, extreme weather conditions such as major or extended winter storms, droughts and tornados, wildfires, and natural disasters, such as floods, hurricanes, tropical storms, whether as a result of climate change or otherwise, could also impact the demand for our services, or impact our ability to perform our services. Also, several holidays fall within the fiscal quarter ending in January, which decreases the number of available workdays in this fiscal quarter. Because of these factors, we are most likely to experience reduced revenue and profitability or losses during the fiscal quarters ending in January and April compared to the fiscal quarters ending in July and October.

Previous wording

We may also experience variations in our profitability driven by a number of factors. These factors include variations and fluctuations in contract revenues, job specific costs, insurance claims, the allowance for doubtful accounts, accruals for contingencies, stock-based compensation expense for performance-based stock awards, the fair value of reporting units for the goodwill impairment analysis, the valuation of intangibles and other long-lived assets, gains or losses on the sale of fixed assets from the timing and levels of capital assets sold, the employer portion of payroll taxes as a result of reaching statutory limits, and our effective tax rate.

Current wording

We may also experience variations in our profitability driven by a number of factors. These factors include variations and fluctuations in contract revenues, job specific costs, insurance claims, the allowance for credit losses, accruals for contingencies, stock-based compensation expense for performance-based stock awards, the fair value of reporting units for the goodwill impairment analysis, the valuation of intangibles and other long-lived assets, gains or losses on the sale of fixed assets from the timing and levels of capital assets sold, the employer portion of payroll taxes as a result of reaching statutory limits, and our effective tax rate.

Previous wording

Accounts Receivable, net. We grant credit to our customers, generally without collateral, under normal payment terms (typically 30 to 90 days after invoicing). Generally, invoicing occurs within 45 days after the related services are performed. Accounts receivable represents an unconditional right to consideration arising from our performance under contracts with customers. Accounts receivable include billed accounts receivable, unbilled accounts receivable, and retainage. The carrying value of such receivables, net of the allowance for doubtful accounts, represents their estimated realizable value. Unbilled accounts receivable represent amounts we have an unconditional right to receive payment for that will be billed at a later date due to administrative requirements in the billing processes specified by our customers. Certain of our contracts contain retainage provisions whereby a portion of the revenue earned is withheld from payment as a form of security until contractual provisions are satisfied. The collectability of retainage is included in our overall assessment of the collectability of accounts receivable. We expect to collect the outstanding balance of current accounts receivable, net (including trade accounts receivable, unbilled accounts receivable, and retainage) within the next 12 months. We estimate our allowance for doubtful accounts by evaluating specific accounts receivable balances based on historical collection trends, the age of outstanding receivables, and the credit worthiness of our customers.

Current wording

Accounts Receivable, net. We grant credit to our customers, generally without collateral, under normal payment terms (typically 30 to 90 days after invoicing). Generally, invoicing occurs within 45 days after the related services are performed. Accounts receivable represents an unconditional right to consideration arising from our performance under contracts with customers. Accounts receivable include billed accounts receivable, unbilled accounts receivable, and retainage. The carrying value of such receivables, net of the allowance for credit losses, represents their estimated realizable value. Unbilled accounts receivable represent amounts we have an unconditional right to receive payment for that will be billed at a later date due to administrative requirements in the billing processes specified by our customers. Certain of our contracts contain retainage provisions whereby a portion of the revenue earned is withheld from payment as a form of security until contractual provisions are satisfied. The collectability of retainage is included in our overall assessment of the collectability of accounts receivable. We expect to collect the outstanding balance of current accounts receivable, net (including trade accounts receivable, unbilled accounts receivable, and retainage) within the next 12 months. We estimate our allowance for credit losses by evaluating specific accounts receivable balances based on historical collection trends, the age of outstanding receivables, and the credit worthiness of our customers.

Previous wording

The discount rate reflects risks inherent within each reporting unit operating individually. These risks are greater than the risks inherent in the Company as a whole. Determination of discount rates included consideration of market inputs such as the risk-free rate, equity risk premium, industry premium, and cost of debt, among other assumptions. The decrease in the discount rate for fiscal 2024 from fiscal 2023 is largely due to lower cost of equity capital and an increase in the market participant debt-to-capital ratios which results in more allocation to the cost of debt, which is lower than the cost of equity. The increase in the discount rate for fiscal 2023 from fiscal 2022 was largely driven by increases in prevailing interest rates as observed in financial markets as of each valuation date. We believe the assumptions used in the impairment analysis each year are reflective of the risks inherent in the business models of our reporting units and our industry. Under the market approach, the guideline company method develops valuation multiples by comparing our reporting units to similar publicly traded companies. Key valuation assumptions used in determining the fair value estimates of our reporting units rely on: (a) the selection of similar companies and (b) the selection of valuation multiples as they apply to the reporting unit characteristics.

Current wording

The discount rate reflects risks inherent within each reporting unit operating individually. These risks are greater than the risks inherent in the Company as a whole. Determination of discount rates included consideration of market inputs such as the risk-free rate, equity risk premium, industry premium, and cost of debt, among other assumptions. The discount rate for fiscal 2025 is consistent with the rate used in fiscal 2024. While the cost of debt decreased, there was a decrease in the market participant debt-to-capital ratios which resulted in the same weighted average cost of capital as prior year. The decrease in the discount rate for fiscal 2024 from fiscal 2023 was largely due to lower cost of equity capital and an increase in the market participant debt-to-capital ratios which results in more allocation to the cost of debt, which is lower than the cost of equity. We believe the assumptions used in the impairment analysis each year are reflective of the risks inherent in the business models of our reporting units and our industry. Under the market approach, the guideline company method develops valuation multiples by comparing our reporting units to similar publicly traded companies. Key valuation assumptions used in determining the fair value estimates of our reporting units rely on: (a) the selection of similar companies and (b) the selection of valuation multiples as they apply to the reporting unit characteristics.

Previous wording

For automobile liability and general liability losses during fiscal 2024, we retained the risk of loss up to $1.0 million on a per-occurrence basis for the first $5.0 million of insurance coverage. We also retained the risk of loss for the next $10.0 million on a per-occurrence basis for losses between $5.0 million and $15.0 million, if any. Additionally, during fiscal 2024 we retained $10.0 million risk of loss on a per occurrence basis for losses between $30.0 million and $40.0 million, if any.

Current wording

For automobile liability and general liability losses during fiscal 2025 and 2024, we retained the risk of loss up to $1.0 million on a per-occurrence basis for the first $5.0 million of insurance coverage. We also retained the risk of loss for the next $10.0 million on a per-occurrence basis for losses between $5.0 million and $15.0 million, if any. Additionally, during fiscal 2024 we retained $10.0 million risk of loss on a per occurrence basis for losses between $30.0 million and $40.0 million, if any.

Previous wording

For automobile liability and general liability losses during fiscal 2023 and fiscal 2022, we retained the risk of loss up to $1.0 million on a per-occurrence basis for the first $5.0 million of insurance coverage. We also retained the risk of loss for the next $5.0 million on a per-occurrence basis with aggregate stop loss limits of $11.5 million within this layer of retention over the period from fiscal 2022 to fiscal 2023. Additionally, we retained $5.0 million risk of loss on a per occurrence basis for losses between $5.0 million and $15.0 million, if any and we retained $10.0 million risk of loss on a per occurrence basis for losses between $30.0 million and $40.0 million, if any.

Current wording

For automobile liability and general liability losses during fiscal 2023, we retained the risk of loss up to $1.0 million on a per-occurrence basis for the first $5.0 million of insurance coverage. We also retained the risk of loss for the next $5.0 million on a per-occurrence basis with aggregate stop loss limits of $11.5 million within this layer of retention for the period of fiscal 2023. Additionally, we retained $5.0 million risk of loss on a per occurrence basis for losses between $5.0 million and $15.0 million, if any, and we retained $10.0 million risk of loss on a per occurrence basis for losses between $30.0 million and $40.0 million, if any.

Previous wording

We are party to a stop-loss agreement for losses under our employee group health plan. For calendar year 2024, we retain the risk of loss on an annual basis, up to the first $700,000 of claims per participant. In calendar years 2022 and 2023, we retained the risk of loss on any annual basis, up to the first $600,000 of claims per participant.

Current wording

We are party to a stop-loss agreement for losses under our employee group health plan. For calendar year 2025, we retain the risk of loss on an annual basis, up to the first $750,000 of claims per participant. In calendar years 2024 and 2023, we retained the risk of loss on an annual basis, up to the first $700,000 and $600,000, respectively, of claims per participant.

Previous wording

The liability for total accrued insurance claims included incurred but not reported losses of approximately $47.2 million and $48.0 million as of January 27, 2024 and January 28, 2023, respectively.

Current wording

The liability for total accrued insurance claims included incurred but not reported losses of approximately $47.9 million and $47.2 million as of January 25, 2025 and January 27, 2024, respectively.

Previous wording

Contract Revenues. Contract revenues were $4.176 billion during fiscal 2024 compared to $3.808 billion during fiscal 2023. Fiscal 2024 and fiscal 2023 had 52 weeks of operations. Contract revenues from an acquired business were $102.7 million during fiscal 2024. There were no significant acquired revenues during fiscal 2023.

Current wording

Contract Revenues. Contract revenues were $4.702 billion during fiscal 2025 compared to $4.176 billion during fiscal 2024. Contract revenues from acquired businesses were $379.7 million during fiscal 2025 and $102.7 million during fiscal 2024. Acquired revenues represent contract revenues from acquired businesses that were not owned for the full period in both the current and comparable prior periods.

Previous wording

Excluding amounts generated by the acquired business, contract revenues increased by $264.4 million during fiscal 2024 compared to fiscal 2023. Contract revenues increased by $167.1 million for a large telecommunications customer, and by $158.4 million and $87.8 million for two other telecommunication customers primarily for fiber deployments, and by $86.1 million for another telecommunications customer. Contract revenue decreased by $251.5 million for a large telecommunications customer improving its network and $110.6 million for another telecommunications customer. All other customers had net increases in contract revenues of $127.2 million on a combined basis during fiscal 2024 compared to fiscal 2023.

Current wording

Excluding amounts generated by the acquired businesses, contract revenues increased by $249.4 million during fiscal 2025 compared to fiscal 2024. Contract revenues increased by $163.5 million for a large telecommunications customer improving its network, by $118.8 million for another customer deploying fiber, by $114.8 million for a telecommunication customer primarily for fiber deployments, and $56.8 million for another telecommunications customer. Contracts revenue decreased by $86.7 million and $80.2 million for two large telecommunication customers, and by $63.9 million for a rural telecommunications customer. All other customers had net increases in contract revenues of $26.3 million on a combined basis during fiscal 2025 compared to fiscal 2024.

Previous wording

The percentage of our contract revenues by customer type from telecommunications, underground facility locating, and electric and gas utilities and other customers, was 89.6%, 7.1%, and 3.3%, respectively, for fiscal 2024 compared to 89.7%, 7.2%, and 3.1%, respectively, for fiscal 2023.

Current wording

The percentage of our contract revenues by customer type from telecommunications, underground facility locating, and electric and gas utilities and other customers, was 90.4%, 6.7%, and 2.9%, respectively, for fiscal 2025 compared to 89.6%, 7.1%, and 3.3%, respectively, for fiscal 2024.

Previous wording

Costs of Earned Revenues. Costs of earned revenues increased to $3.362 billion, or 80.5% of contract revenues, during fiscal 2024 compared to $3.160 billion, or 83.0% of contract revenues, during fiscal 2023. The primary component of the increase was a $202.1 million aggregate increase in direct labor and subcontractor costs. The increase was further due to a $7.1 million increase in other direct costs, partially offset by a $7.2 million decrease in equipment maintenance and fuel costs combined and a $0.5 million decrease in direct materials.

Current wording

Costs of Earned Revenues. Costs of earned revenues increased to $3.770 billion, or 80.2% of contract revenues, during fiscal 2025 compared to $3.362 billion, or 80.5% of contract revenues, during fiscal 2024. The primary component of the increase was a $403.0 million aggregate increase in direct labor and subcontractor costs. The increase was further due to a $21.0 million increase in other direct costs and a $1.4 million increase in equipment maintenance and fuel costs combined, partially offset by a $17.3 million decrease in direct materials.

Previous wording

Costs of earned revenues as a percentage of contract revenues decreased 2.5% during fiscal 2024 compared to fiscal 2023. As a percentage of contract revenues, labor and subcontracted labor costs decreased 0.8% primarily due to the mix of work performed. Equipment maintenance and fuel costs combined decreased 0.6% as a percentage of contract revenues. Direct materials decreased 0.6% primarily as a result of our mix of work in which we provide materials for our customers and other direct costs decreased 0.4% as a percentage of contract revenues during fiscal 2024.

Current wording

Costs of earned revenues as a percentage of contract revenues decreased 0.3% during fiscal 2025 compared to fiscal 2024. As a percentage of contract revenues, direct materials decreased 1.1% primarily as a result of our mix of work in which we provide materials for our customers and other direct costs decreased 0.2% as a percentage of contract revenues during fiscal 2025. Equipment maintenance and fuel costs combined decreased 0.4% as a percentage of contract revenues. Labor and subcontracted labor costs increased 1.4% primarily due to the mix of work performed.

Previous wording

General and Administrative Expenses. General and administrative expenses increased to $327.7 million, or 7.8% of contract revenues, during fiscal 2024 compared to $293.5 million, or 7.7% of contract revenues, during fiscal 2023. The increase in total general and administrative expenses primarily resulted from increased administrative, payroll and other costs, including performance based compensation and stock-based compensation.

Current wording

General and Administrative Expenses. General and administrative expenses increased to $393.0 million, or 8.4% of contract revenues, during fiscal 2025 compared to $327.7 million, or 7.8% of contract revenues, during fiscal 2024. The increase in total general and administrative expenses primarily resulted from increased administrative, payroll, performance based compensation, $11.4 million incremental stock based compensation expense resulting from the CEO transition, acquisition costs, $4.2 million acquisition integration costs and other costs, including incremental general administrative expenses from acquired businesses. See Note 19, Stock-Based Awards, for additional information regarding the CEO transition.

Previous wording

Depreciation and Amortization. Depreciation expense was $143.3 million, or 3.4% of contract revenues, during fiscal 2024, compared to $128.8 million, or 3.4% of contract revenues, during fiscal 2023. The increase in depreciation expense during fiscal 2024 was primarily due to higher capital expenditures to support our growth in operations and normal replacement cycle of fleet assets. Amortization expense was $19.8 million and $15.3 million during fiscal 2024 and fiscal 2023, respectively. The increase in amortization expense during fiscal 2024 is due to the increase in amortizing intangibles from the acquired business.

Current wording

Depreciation and Amortization. Depreciation expense was $167.2 million, or 3.6% of contract revenues, during fiscal 2025, compared to $143.3 million, or 3.4% of contract revenues, during fiscal 2024. The increase in depreciation expense during fiscal 2025 was primarily due to higher capital expenditures to support our growth in operations, normal replacement cycle of fleet assets, and depreciation from acquired businesses. Amortization expense was $31.4 million and $19.8 million during fiscal 2025 and fiscal 2024, respectively. The increase in amortization expense during fiscal 2025 is due to the increase in amortizing intangibles from acquired businesses.

Previous wording

Interest Expense, Net. Interest expense, net increased to $52.6 million during fiscal 2024 from $40.6 million during fiscal 2023 as a result of higher interest rates on funded debt balances and higher outstanding borrowings during the current period.

Current wording

Interest Expense, Net. Interest expense, net increased to $61.0 million during fiscal 2025 from $52.6 million during fiscal 2024 as a result of higher outstanding borrowings during the current period and lower interest income on invested cash balances.

Previous wording

Other Income, Net. Other income, net was $21.6 million and $10.2 million during fiscal 2024 and fiscal 2023, respectively. The change in other income, net was primarily a function of the number of assets sold and prices obtained for those assets during each respective period. Gain on sale of fixed assets was $28.3 million and $16.8 million during fiscal 2024 and fiscal 2023, respectively. Other income, net also includes expense associated with the non-recourse sale of accounts receivable under a customer-sponsored vendor payment program.

Current wording

Other Income, Net. Other income, net was $29.2 million and $21.6 million during fiscal 2025 and fiscal 2024, respectively. The change in other income, net was primarily a function of the number of assets sold and prices obtained for those assets during each respective period. Gain on sale of fixed assets was $36.5 million and $28.3 million during fiscal 2025 and fiscal 2024, respectively. Other income, net also includes expense associated with the non-recourse sale of accounts receivable under a customer-sponsored vendor payment program.

Previous wording

Our effective income tax rate differs from the statutory rate primarily due to the difference in income tax rates from state to state where work was performed, non-deductible and non-taxable items, tax credits recognized, the tax effects of the vesting and exercise of share-based awards, impacts of tax filings for prior years, and changes in unrecognized tax benefits.

Current wording

Our effective income tax rate differs from the statutory rate primarily due to the difference in income tax rates from state to state where work was performed, non-deductible and non-taxable items, tax credits recognized, the tax effects of the vesting and exercise of share-based awards, and changes in unrecognized tax benefits.

Previous wording

Net Income. Net income was $218.9 million for fiscal 2024 compared to $142.2 million for fiscal 2023.

Current wording

Net Income. Net income was $233.4 million for fiscal 2025 compared to $218.9 million for fiscal 2024.

Previous wording

We are subject to concentrations of credit risk relating primarily to our cash and equivalents, accounts receivable, and contract assets. Cash and equivalents primarily include balances on deposit with banks and totaled $101.1 million as of January 27, 2024, compared to $224.2 million as of January 28, 2023. We maintain our cash and equivalents at financial institutions we believe to be of high credit quality. For all periods presented, we have not experienced any loss or lack of access to cash in our operating accounts.

Current wording

We are subject to concentrations of credit risk relating primarily to our cash and equivalents, accounts receivable, and contract assets. Cash and equivalents primarily include balances on deposit with banks and totaled $92.7 million as of January 25, 2025, compared to $101.1 million as of January 27, 2024. We maintain our cash and equivalents at financial institutions we believe to be of high credit quality. For all periods presented, we have not experienced any loss or lack of access to cash in our operating accounts.

Previous wording

Sources of Cash. Our sources of cash are operating activities, long-term debt, equity offerings, bank borrowings, proceeds from the sale of idle and surplus equipment and real property, and stock option proceeds. Cash flow from operations is primarily influenced by demand for our services and operating margins, but can also be influenced by working capital needs associated with the services that we provide. In particular, working capital needs may increase when we have growth in operations and where project costs, primarily associated with labor, subcontractors, equipment, and materials, are required to be paid before the related customer balances owed to us are invoiced and collected. Our working capital (total current assets less total current liabilities, excluding the current portion of debt) was $1,061.2 million as of January 27, 2024 compared to $1,040.6 million as of January 28, 2023.

Current wording

Sources of Cash. Our sources of cash are operating activities, long-term debt, equity offerings, bank borrowings, proceeds from the sale of idle and surplus equipment and real property, and stock option proceeds. Cash flow from operations is primarily influenced by demand for our services and operating margins, but can also be influenced by working capital needs associated with the services that we provide. In particular, working capital needs may increase when we have growth in operations and where project costs, primarily associated with labor, subcontractors, equipment, and materials, are required to be paid before the related customer balances owed to us are invoiced and collected. Our working capital (total current assets less total current liabilities, excluding the current portion of debt) was $1,117.5 million as of January 25, 2025 compared to $1,061.2 million as of January 27, 2024.

Previous wording

Our level of capital expenditures can vary depending on the customer demand for our services, the replacement cycle we select for our equipment, and overall growth. We intend to fund these expenditures primarily from operating cash flows, availability under our credit agreement, and cash on hand. We expect capital expenditures, net of disposals, to range from $220.0 million to $230.0 million during fiscal 2025 to support growth opportunities and the replacement of certain fleet assets.

Current wording

Our level of capital expenditures can vary depending on the customer demand for our services, the replacement cycle we select for our equipment, and overall growth. We intend to fund these expenditures primarily from operating cash flows, availability under our Credit Agreement (as defined below), and cash on hand. We expect capital expenditures, net of disposals, to range from $220.0 million to $230.0 million during fiscal 2026 to support growth opportunities and the replacement of certain fleet assets.

Previous wording

During fiscal 2023, net cash provided by operating activities was $164.8 million. Changes in working capital (excluding cash) and changes in other long-term assets and liabilities used $164.8 million of operating cash flow during fiscal 2023. Working capital changes that used operating cash flow during fiscal 2023 included an increase in accounts receivable of $173.7 million, other current assets and inventories of $41.3 million, contract assets, net of $18.4 million, and a decrease in accrued liabilities of $10.0 million. Changes that provided operating cash flow during fiscal 2023 included an increase in accounts payable of $49.4 million and a decrease in other assets of $5.7 million. In addition, an increase in income tax payable and a decrease in income tax receivable provided $23.5 million in operating cash flow during fiscal 2023.

Current wording

Cash Provided by Operating Activities. During fiscal 2025, net cash provided by operating activities was $349.1 million. Changes in working capital (excluding cash) and changes in other long-term assets and liabilities used $114.6 million of operating cash flow during fiscal 2025. Working capital changes that used operating cash flow during fiscal 2025 included an increase in accounts receivable, net of $117.8 million, a decrease in accrued liabilities of $21.0 million, an increase in other assets of $21.0 million, and a decrease in accounts payable of $16.8 million. Working capital changes that provided operating cash flow during fiscal 2025 included an increase in contract liabilities, net of $31.2 million, an increase in income tax payable of $26.5 million, and a decrease in other current assets and inventory of $4.3 million.

Previous wording

The primary non-cash items in cash flows from operating activities during the current and prior periods are depreciation and amortization, non-cash lease expense, stock-based compensation, amortization of debt discount and debt issuance costs, deferred income taxes, gain on sale of fixed assets, and provision for bad debt.

Current wording

The primary non-cash items in cash flows from operating activities during the current and prior periods are depreciation and amortization, non-cash lease expense, stock-based compensation, amortization of debt issuance costs, deferred income taxes, gain on sale of fixed assets, provision for bad debt and loss on debt extinguishment.

Previous wording

Days sales outstanding (“DSO”) is calculated based on the ending balance of total current and non-current accounts receivable (including unbilled accounts receivable), net of the allowance for doubtful accounts, and current contract assets, net of contract liabilities, divided by the average daily revenue for the most recently completed quarter. Long-term contract assets are excluded from the calculation of DSO, as these amounts represent payments made to customers pursuant to long-term agreements and are recognized as a reduction of contract revenues over the period for which the related services are provided to the customers. Including these balances in DSO is not meaningful to the average time to collect accounts receivable and current contract asset balances. Our DSO was 120 days and 108 days as of January 27, 2024 and January 28, 2023, respectively.

Current wording

Days sales outstanding (“DSO”) is calculated based on the ending balance of total current and non-current accounts receivable (including unbilled accounts receivable), net of the allowance for credit losses, and current contract assets, net of contract liabilities, divided by the average daily revenue for the most recently completed quarter. Long-term contract assets are excluded from the calculation of DSO, as these amounts represent payments made to customers pursuant to long-term agreements and are recognized as a reduction of contract revenues over the period for which the related services are provided to the customers. Including these balances in DSO is not meaningful to the average time to collect accounts receivable and current contract asset balances. Our DSO was 114 days and 120 days as of January 25, 2025 and January 27, 2024, respectively.

Previous wording

See Note 6, Accounts Receivable, Contract Assets, and Contract Liabilities, for further information on our customer credit concentration as of January 27, 2024 and January 28, 2023 and Note 20, Customer Concentration and Revenue Information, for further information on our significant customers. We believe that none of our significant customers were experiencing financial difficulties that would materially impact the collectability of our total accounts receivable and contract assets, net as of January 27, 2024 or January 28, 2023.

Current wording

See Note 6, Accounts Receivable, Contract Assets, and Contract Liabilities, for further information on our customer credit concentration as of January 25, 2025 and January 27, 2024 and Note 20, Customer Concentration and Revenue Information, for further information on our significant customers. We believe that none of our significant customers were experiencing financial difficulties that would materially impact the collectability of our total accounts receivable and contract assets (liabilities), net as of January 25, 2025 or January 27, 2024.

Previous wording

Cash Provided by Operating Activities. During fiscal 2024, net cash provided by operating activities was $259.0 million. Changes in working capital (excluding cash) and changes in other long-term assets and liabilities used $147.9 million of operating cash flow during fiscal 2024. Working capital changes that used operating cash flow during fiscal 2024 included an increase in accounts receivable of $142.4 million, a decrease in accrued liabilities of $24.9 million, and a decrease in income tax payable/receivable of $14.2 million. Working capital changes that provided operating cash flow during fiscal 2024 included a decrease in contract assets, net of $23.0 million, increase in accounts payable of $7.0 million, decrease in other current assets and inventory of $3.1 million and decrease in other assets of $0.4 million.

Current wording

During fiscal 2024, net cash provided by operating activities was $259.0 million. Changes in working capital (excluding cash) and changes in other long-term assets and liabilities used $147.9 million of operating cash flow during fiscal 2024. Working capital changes that used operating cash flow during fiscal 2024 included an increase in accounts receivable of $142.4 million, a decrease in accrued liabilities of $24.9 million, and a decrease in income tax payable/receivable of $14.2 million. Working capital changes that provided operating cash flow during fiscal 2024 included a decrease in contract assets, net of $23.0 million, increase in accounts payable of $7.0 million, decrease in other current assets and inventory of $3.1 million and decrease in other assets of $0.4 million.

Previous wording

Net cash used in investing activities was $183.9 million during fiscal 2023. Capital expenditures of $201.0 million were for the replacement of certain fleet assets and new work opportunities. Additionally, we acquired the assets of a telecommunications construction company for $0.4 million. Proceeds from sale of assets were $17.4 million.

Current wording

Cash Used in Investing Activities. Net cash used in investing activities was $395.2 million during fiscal 2025. Capital expenditures of $250.5 million were for the replacement of certain fleet assets and new work opportunities and cash paid for acquisitions was $183.9 million. Proceeds from sale of assets were $39.1 million.

Previous wording

Cash Used in Investing Activities. Net cash used in investing activities was $306.2 million during fiscal 2024. Capital expenditures of $218.5 million were for the replacement of certain fleet assets and new work opportunities. Additionally, we acquired the assets of a telecommunications contraction company for $122.9 million. Proceeds from sale of assets were $35.2 million.

Current wording

Net cash used in investing activities was $306.2 million during fiscal 2024. Capital expenditures of $218.5 million were for the replacement of certain fleet assets and new work opportunities. Additionally, we acquired the assets of a telecommunications contraction company for $122.9 million. Proceeds from sale of assets were $35.2 million.

Previous wording

Net cash used in financing activities was $67.4 million during fiscal 2023. The primary source of cash used in financing activities during fiscal 2023 was the repurchase of 514,030 shares of our common stock in open market transactions, at an average price of $94.80 per share, for $48.7 million and principal payments on term loans of $17.5 million. The exercise of stock options provided $4.6 million during fiscal 2023 and we paid $5.8 million to tax authorities in order to meet the payroll tax withholding obligations on restricted share units that vested during the period.

Current wording

Cash Provided by (Used in) Financing Activities. Net cash provided by financing activities was $37.7 million during fiscal 2025. During fiscal 2025, borrowings under our credit agreement were $987.4 million. We used approximately $852.4 million to repay borrowings under our Credit Agreement. We repurchased 410,000 shares of our common stock in open market transactions, at an average price of $160.10 per share, for $65.6 million, during fiscal 2025. Average price paid per share excludes 1% excise tax on share repurchases. We also paid $17.0 million to tax authorities in order to meet the payroll tax withholding obligations on restricted share units that vested during fiscal 2025. In addition, we paid $8.0 million, net, to tax authorities for payroll tax withholding obligations on the exercise of stock options. We paid approximately $6.7 million in issuance costs and third party fees and expenses related to our financing transactions.

Previous wording

Cash Used in Financing Activities. Net cash used in financing activities was $75.9 million during fiscal 2024. During fiscal 2024, borrowings under our credit agreement were $763.0 million. We used approximately $780.5 million to repay borrowings under our Credit Agreement. We repurchased 485,000 shares of our common stock in open market transactions, at an average price of $102.39 per share, for $49.7 million, during fiscal 2024. Average price paid per share excludes 1% excise tax on share repurchases. We also paid $9.9 million to tax authorities in order to meet the payroll tax withholding obligations on restricted share units that vested during fiscal 2024. This was partially offset by the exercise of stock options, which provided $1.1 million during fiscal 2024.

Current wording

Net cash used in financing activities was $75.9 million during fiscal 2024. During fiscal 2024, borrowings under our credit agreement were $763.0 million. We used approximately $780.5 million to repay borrowings under our Credit Agreement. We repurchased 485,000 shares of our common stock in open market transactions, at an average price of $102.39 per share, for $49.7 million, during fiscal 2024. Average price paid per share excludes 1% excise tax on share repurchases. We also paid $9.9 million to tax authorities in order to meet the payroll tax withholding obligations on restricted share units that vested during fiscal 2024. This was partially offset by the exercise of stock options, which provided $1.1 million during fiscal 2024.