Ladies and gentlemen, thank you for standing by. And welcome to the Dycom Results Conference Call. For the conference, all the participant lines are in a listen-only mode. There will be an opportunity for your questions and instructions will be given at that time. [Operator Instructions] And as a reminder, today’s call is being recorded. I will turn the conference over to your host Mr. Steven Nielsen. Please go ahead, sir.

Thank you, John. Good morning, everyone. I’d like to thank you for attending this conference call to review our first quarter fiscal 2017 results. During the call, we will be referring to a slide presentation which can be found on our website’s Investor Relations page, under the heading Events & Presentations, Investor Calendar. Relevant slides will be identified by number throughout our presentation. Going to Slide 3, today we have on the call Tim Estes, our Chief Operating Officer; Drew DeFerrari, our Chief Financial Officer; and Rick Vilsoet, our General Counsel. Now, I will turn the call over to Rick Vilsoet.

Thanks, Steve. Except for historical information, the statements made by Company management during this call maybe forward-looking and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, including those related to the Company’s outlook, are based on management’s current expectations, estimates, and projections, and involve known and unknown risks and uncertainties, which may cause the Company’s actual results in future periods to differ materially from forecasted results. Those risks and uncertainties are more fully described in the Company’s annual report on Form 10-K for the year ended July 30, 2016 and other periodic filings with the Securities and Exchange Commission. The Company assumes no obligation to update forward-looking statements. Steve?

Thanks, Rick. Now moving to Slide 4 and a review of our first quarter results. As you review our results, please note that we have presented in our release and comments certain revenue amounts excluding revenues from businesses acquired during the first and fourth quarters of fiscal 2016; adjusted EBITDA, adjusted net income, and adjusted diluted earnings per share, all of which are non-GAAP financial measures. See slides 13 through 19 for a reconciliation of non-GAAP measures to GAAP measures. Before we review the first quarter’s results, please note the following. As discussed in our release, we have adjusted our outlook for the operations of Goodman Networks that we acquired in July. Although we’re currently performing and receiving work in all of the service territories acquired and expect to continue to do so. Activity levels have been below our previous expectations. Accordingly, for the next several quarters, we now project revenue of approximately $10 million per quarter. This adjustment has impacted our estimate of contract backlog resulting in a reduction of total backlog of $211 million, of which $49 million was previously expected to be completed over the next 12 months. We do not expect to separately provide any further updates regarding these acquired operations. After giving effect to the net present value of the tax benefits of this acquisition, as well as model working capital no longer required at lower levels of activity, we calculate our total expected economic investment to be approximately $65 million or roughly 60% of our disclosed purchase price. In addition, since we reported our last quarter a customer whose identity we have not disclosed at their request modified their plans. Accordingly, we have reduced our expected revenue for the remainder of fiscal 2017 by approximately $80 million, as well as reducing the total contract…

Thanks, Steve, and good morning, everyone. Going to Slide 8. Contract revenues for Q1 2017 were $799.2 million, and organic revenue grew 18%, reflecting solid growth from many of our top customers. Acquired businesses contributed $56.6 million of revenue in the current period. Adjusted EBITDA increased to $129.2 million or 16.2% of revenue compared to $105.7 million or 16% of revenue in the year-ago period. Gross margins were in line year-over-year and reflected costs to increase the scale of operations to support our projected growth with several of our top customers. G&A of 7.5% of revenue decreased 27 basis points from Q1 2016 from improved performance and operating leverage on our increased scale. Non-GAAP adjusted diluted EPS was $1.67 per share compared to EPS of $1.24 in Q1 2016. Now moving to Slide 9. Our balance sheet and financial profile continue to reflect the strength of our business and provides us the ability to invest for growth. We ended the quarter with $68 million drawn on the revolver of our senior credit facility and $346.3 million outstanding of term loans. Our liquidity is robust and exceeded $346 million at the end of the quarter consisting of availability from our credit facility and cash on hand. Operating cash flows used $41.6 million during Q1 2017 compared to the use of $28.9 million during Q1 2016 reflecting normal fiscal payment patterns for annual performance compensation and other cost. The Q1 2017 combined DSOs of accounts receivable and costs in excess of billings net were at 91 days, compared to Q4 2016, there was a sequential increase in DSO’s for costs in excess of billings that resulted from a notable increase in the volumes of activity and the related revenue from several of our top customers in the latter half of Q1 2017.…

Thanks, Drew. Moving to Slide 12, within a growing economy we experienced the effects of a robust industry environment and capitalized on our significant strengths. First and foremost, we maintain strong customer relationships throughout our markets. We continue to win and extend contracts at attractive pricing. Secondly, the strength of those relationships and the extensive market presence they have created has allowed us to be at the forefront of evolving industry opportunities. The end market drivers of these opportunities remain firm and are strengthening. Telephone companies are deploying fiber-to-the-home and fiber-to-the-node technologies to enable video offerings and 1-gigabit high speed connections. These deployments are accelerating and impacting our business. Some of those telephone companies previously deploying fiber-to-the-node architectures have definitively transitioned to fiber-to-the-home deployments, while others are beginning to provision video over their fiber-to-the-node architectures and selectively deploy fiber-to-the-home. Cable operators are continuing to deploy fiber to small and medium businesses and with increasing urgency. Some are doing so in anticipation of the customer sales process. Overall, cable capital expenditures, new-build opportunities and capacity expansion are increasing. Dramatically increased speeds to consumers are being provisioned. Projects resulting from the Connect America Fund Phase II are in planning, engineering, and construction and activity was firmly underway during the quarter. These projects are deploying fiber deeper into rural networks, and more are expected as new multi-year opportunities emerge. Additionally, for one recipient we are executing meaningful assignments to perform fixed wireless deployments. Customers are consolidating supply chains, creating opportunities for market share growth and increasing the long-term value of our maintenance business. Within this context, we believe we are uniquely positioned, managed and capitalized to meaningfully experience an improving industry environment to the benefit of our shareholders. We remain encouraged that our major customers possess significant financial strength and are committed to multi-year capital spending initiatives. These initiatives are meaningfully accelerating and expanding in scope across a number of customers. Recent developments may indicate a broadly improved regulatory environment supporting these initiatives. We remain confident in our strategies to prospect for our Company, the capabilities of our dedicated employees and the experience of our management team as we grow our business and capitalization. Now, John, we’ll open the call for questions.

[Operator Instructions] First we have Matt Duncan with Stephens. Please go ahead.

Hey, good morning guys.

Hey, Matt.

So Steve, I want to start here. So there’s obviously been a lot of concern in the market about what happens in general to demand for your services with Google taking a step back from Google Fiber. And cities where they weren’t already under construction, it just curious if you believe that, that really is going to change demand from any of your other customers, it seems like the way that they’ve been talking, there’s been no change at all. And what AT&T and Comcast and some others are planning to do, but just would love for you to add some perspective there? That would be great.

I think that’s all true. I think in fact there’s actually been some comments where from the comment providers are they are playing offense and that they may accelerate. We also had comments from another cable operator on the earnings call that talked about deployments of multi-gigabit networks looking out over the next five years or so. So I think the balance of the discussion from our customers on their earnings and investor presentations has all been positive over the last month.

There was follow-up there then you took a $413 million project out of backlog. Do you feel like there is enough demand from other customers outside of the one where you took that project out that you can fill that void in your backlog with projects elsewhere for your – for that – for those people and equipment that you would’ve been using there?

Absolutely.

Okay. And then last thing for me and I’ll hop back in queue. Just curious what’s going on with Goodman? When you guys bought that it was 150 million plus in revenue than last quarter it was $100 million, and now it’s seems like – it’s more like $40 million. This is just simply timing of spend and the geographies that you guys have the contracts in with Goodman or is there something else going on there and do you still feel like that can be a much bigger revenue stream at some point in the future just curious what’s happening here.

So, as we’ve said Matt, in our comments, I mean we continue to receive and execute work in all of the geographic territories that we acquired with Goodman. Clearly over the – and in fact in the first quarter, we actually slightly exceeded what we expected to do for revenue in that footprint. But as we look out over the next several quarters business is going to be a little bit slower, order flow hasn’t been what we expected. But we still feel that we have a good relationship with the customer, we are earning their confidence in these new geographic territories every day as we execute the work that we have. And given my other comments about the long-term convergence, which I think is becoming more evident every day of wireless and wireline networks, we’re going to look back on having more capabilities in the wireless business in a broader footprint as a good thing. And a little challenged as we’ve gotten started but in the long run we think we’re going to be a better company with that increased exposure.

I appreciate the perspective. Thank you.

Our next question from Tahira Afzal with KeyBanc Capital Markets. Please go ahead.

Hi, Steve, just wanted to ask you about revenue growth, obviously you have these couple of things that are slowing up things into the third quarter in terms of your revenue guidance. But as you look out into the fourth-quarter and beyond do you see it inflecting up from that mid to high single-digits growth rate.

So, Tahira, obviously we don’t provide guidance beyond the first couple of quarter period, but to go back to my earlier comments there are lots of opportunities in the business, we continue to have customers announcing new multi-year programs. We’ve got to earn the confidence of the customers every day, but we are delivering good service. And so we continue to see good growth opportunities. Obviously we’ve had a great run of growth. And so as we comp that, right, the numbers are bigger than they were year ago. But I would tell you the opportunity set is bigger than it was a year ago in what we can see in the near an intermediate term in the business. So it’s there but we’ve got to get it. We’ve got to execute on it well to create value.

Got it, Steve. And the second question is really in regards to wireless technologies and you seem to be pretty right that we’re seeing more and more of that going forward. Do you need to mix some more acquisitions as you look three years plus out to really complement what you’re doing organically and through Goodman to really respond to the demand level?

So, we have the skill sets and the technical skills inside the Company to address all of the opportunities that are currently in the industry and those that we see emerging. I think what I would tell you is that in the next, let’s call it three to five years, I think everybody is going to learn that wireless technologies really require lots of wireline investment and as the networks converge, that we’re going to see an additional catalyst for growth around fiber for these wireless deployments. And in fact in the business today we are doing projects for customers around these converged wireless, wireline strategies that we weren’t doing as recently as four months ago. And they appear to be developing into sizable opportunities.

Got it. Thank you Steve.

Next we go to Adam Thalhimer with Thompson Davis. Please go ahead.

Hey good morning, guys.

Good morning, Adam.

Steve, I wanted to ask you about the Q3 revenue guidance of mid-to-high single digits. When you look at 12-month backlog over the last year, average growth is 36%. And you also I think Drew said that some of the customers accelerate spending late in Q1. So I’m just curious if is a little bit of conservatism in there.

I think Adam we are going into a new calendar year we’re having discussions around customer calendar year budgets. We don’t want to get ahead of the story, right. This is a five year growth story where we’ve grown and I think revenue is something like 22% compounded over an extended period of time. We just don’t want to get too aggressive particularly as the front half of the third quarter does include some opportunities for winter weather, which as we talked about last year we had a much greater exposure to the upper Midwest than we ever have in the company’s history. So we are trying to make sure that we don’t oversell the near-term, so that nobody appreciates the magnitude of the intermediate term.

Got it. And then you mentioned one customer who you said on their call they talked about multi-gigabit opportunities over the next five years. And if I’m thinking about the same customer the revenue from that customer decline in Q1 I’m just curious about what’s your ability to kind of participate in those plans.

The opportunity is strong Adam. That customer is going through the integration after a very large merger. And has talked about CapEx being down in the second half of calendar 2016 and up in 2017. And in fact made comments that if they saw opportunities they would accelerate spending. And we are well positioned there. So we are – we got to earn it again. We are not entitled to any customers business but if we can provide good service we think we’ve got good opportunities.

Okay, thanks again.

And we’ll go to Alex Rygiel with FBR. Please go ahead.

Thanks. Nice quarter, Steve.

Thanks, Alex.

Is there any chance you can qualify CAF and on your backlog of revenue?

We’ll disaggregate the backlog, unless it’s significance like we’ve done with this announcement. I would say that if picked up in the October quarter, it will drop a little bit this in the second quarter just because its very heavily emphasized in kind of the northern half of the country at the moment. It will move around in later years of the program. But we are both happy with that program and then happy really with the approach that a number [indiscernible] taken overall to network deployment opportunities even outside of rural America where we’re seeing them becoming more aggressive. And that’s good for the business.

Could you comment a little bit on your expectations for Goodman’s margins over the next few quarters? Given the weaker revenue outlook.

Because it’s integrated in our business Alex, we feel comfortable that it will perform just like the rest of our legacy wireless business. So we don’t see any issues at this point.

And lastly, at the very end of your prepared remarks you mentioned broadly improved regulatory environment. Can you expand upon that?

So if you remember it was two years ago where we spent a lot of time on the call talking about title II and its impact on the business and the business is probably up close to 50% over that two year period. And clearly I think it with the incoming administration at least indicating as I’ve understood that they have a much more free market approach to regulation, I think the change in the composition of the FCC should be supportive of capital expenditure. Some of the tax policies that are being kicked around and the ability to expense – capital expenditures immediately, I think that’s going to be a good thing for business. And so I think just generally, we feel hopeful that a different regulatory approach will be much more supportive of what our customers would like to do around their network spending.

Very helpful. Thank you.

Next question from Bill Newby with D.A. Davidson. Please go ahead.

I’m sorry guys. I was trying to remove question…

All right, Bill. Operator, John will take the next question.

And we will go to Noelle Dilts with Stifel. Please go ahead.

Hi, guys. Good morning.

Good morning, Noelle.

So going back to third-quarter guidance that’s maybe the conservative, I’m curious just given some of the consolidation that you’re saying in your customer base with AT&T, Time Warner, CenturyLink, [indiscernible] if you’re at all concerned or building in any caution around due to some near-term moderations and the plans around the customers. And then second, can you comment on how you’re thinking and you touched on this but to some extent around a long-term opportunity there.

So Noelle, I think to begin with remember that we had no business with Time Warner, it’s a media company, right.

Yes.

So that’s a vertical merger. And AT&T and rolling out that merger said it was the speed they were deployment of 5G which is heavily rely on wireline infrastructure. So we think that’s helpful. We do a little bit of work for level III primarily with CenturyLink once again they reiterated their plans. And I think broadly if you think back of the last 20 years that as our customers have gotten larger, their capital spending programs have become more ambitious and more sustained. And so we are not concerned at all about the mergers. As always we are now customers business every day and that’s grew after the merger just like it was before.

Okay. And then shifting over – kind of moving back to Goodman quickly I just want to better understand in terms of the work I’m assuming on most of this was done under MSA contract. So, you just not seen the order flow you were expecting under those MSA contract, so was there an actual loss or non-renewal of the MSA?

No. That the contracts are secured for a multi-year period, which we disclosed last quarter.

Yes.

So that’s not the issue. It’s the order flow and as we said in the October quarter actually slightly exceeded the revenue that we expected. But as we got deeper into the quarter, became evident that over the next several quarters, but that order flow would be less than we expected. We are kind of work every day to earn the customers confidence so that we can increase share. And we expect that we will be able to do that as long as we provide good service. So it’s really that simple. There’s no change in any of the contract relationships or the contracts with customer.

Okay. And then my last question is you’ve commented a lot on the idea of convergence between wireless and wireline networks. I think in speaking with investors sometimes focusing wireless is more of threat to the wireline spend. Could you just comment on to what extent you see wireless as potentially competition or would hinder wireline investment through the neighborhood or to what extent it’s essentially incremental just how you’re thinking about that opportunity over time?

So, I think if we take a broad kind of 15 or 20 year view, the investor dynamic where they think a new wireless, new generation of wireless technology will actually threaten wireline spend, never plays out that way. And if you look at the most recent comments by our customers, they heavily emphasize that the rollout of 5G will require extensive investments in wireline infrastructure for back haul. I think to the extent that there are technologies which our customers have talked about that their hopeful will work that will reduce the amount of work content that has to be done inside a home or an apartment complex or condominium. So that’s only supportive of the business and that’s work that we typically don’t do. And to the extent that, that creates higher economic returns for the network deployment that we do, do. That’s a good thing for business if we go back to the rollout of LTE six, seven years ago, it did not result in any cannibalization of any meaningful extent of wireline investment and we had to take fiber to tens of thousands of towers. And 5G will be much more reliant on a dense fiber network than LTE ever thought of being.

Perfect. Thanks.

Next question is from Tom Bishop with BI research. Please go ahead.

Hi, Steve.

Hey, Tom.

I’m still worried about this Goodman thing. I’m a little surprised what was the 12 month revenue looking backwards? Were you initially expecting growth over that – whatever the trailing 12 month figure was?

Let’s focus on this. [indiscernible] business, we’ve given you a revenue expectation forward depending on what your guidance is in the low single digits, right.

Barely a single digit. So going forward you’ve got to think about the business within that context. We hope to make it bigger. We think we can make a bigger with time. But we acquired the asset, the asset was getting smaller as we talked about in August, this was a distressed asset that had a broad footprint with the customer that we thought was attractive, we still think is attracted strategically. But in the short-term, we see some challenges and in the next several quarters until we reflect that in backlog. And that’s where our calculations are done.

Well. Given that your backlog went to the mystery customer went down the lot. Is that also the reason why the backlog for Goodman went down the same customer?

There’s no relationship at all.

There’s no connection there. And there’s nothing in the contract to provide a bigger reduction in acquisition the price?

Associated with the deal, Tom, I mean that’s typically the way we do deals particularly between large entities. Yes, we were – we are somewhat disappointed about where it has been even though it exceeded what we expected for the October quarter, but in the long run right, we didn’t spend in an ordinate amount of capital on the business and we’re focused going forward, thought would happened in the past.

Okay. Thank you.

Next we will go to Alan Mitrani with Sylvan Lake Asset Management. Please go ahead.

Hi, thanks. Can you talk about capital spending, what’s your forecast for the year? And then are you going to have down CapEx year-over-year?

No. Alan it’s Drew. So as we talked about in the last call, we think it will be in the $175 million to $185 million for the year on the net basis.

On a net basis, still.

Yes. Absolutely.

Okay. And also can you discuss your used working capital obviously your revenues picked up you had a good quarter from a revenue perspective. I thought as being part of factoring program now with AT&T or whatever with one of your customers, that should help your working capital. Can you talk a bit about what you expect through the year as it relates to working capital?

Yes. I mean, obviously as I’ve mentioned on the call, Alan we did have some notable increases in the later part of the quarter. You can see that the DSOs on the AR actually came down some. So we think this is when you’ve got growth and sequential growth you’re going to see some working capital uses also as I highlighted in the first quarter is when we’ve got some fiscal costs that are paid at the beginning of the year. So the annual performance compensation related 2016 there was an income tax payment in there and then also things like prepaid insurance that is typically made at the beginning of the fiscal year. So not unusual in the first quarter to have some uses, and participate in the vendor’s payment or vendor sponsored payment program in terms of converting the receivables into cash for the customer.

Okay. And then can you talk about – everyone seems to be talking about and you even seem to be seeing a little more about the potential for MSO’s to really comeback strongly after the telco and others have taken share the last number of years. Can you talk about your visibility as it relates to a multi-year spend from MSO’s?

So Alan, I mean, clearly if you look at the organic growth with Comcast on a customer that size to be up over 50% that’s a real number. And I think that particularly recent comments from another MSO other than Comcast talked about building out multi-gigabit speeds to the entirety of their service footprint which they said was about 50 million homes passed, a nice opportunity going forward.

Okay. Drew, do you mind filling in the other five top customers?

Yes. Sure. Start with number six at 4.3% of revenue, customer number seven was 4.2% of revenue, and this was as per customers requested that we not disclose their identity. Frontier Communications was number eight at 1.7% of revenue, Crown Castle was number nine at 1.2% of revenue, and the municipal fiber customer was number ten at 0.6% of revenue.

Thanks. I’m sorry. [indiscernible]

The split as well, Alan. So telco was at 68.8%, cable was 23%, facility locating was 5.5% and the electro and other was 2.7%.

Great. And then one last question as it relates to taxes and the potential for comp administration to get some tax reform through. It seems as if you’ve always been sort of mostly North American focused and pretty much a full taxpayer. If you knock it down to 25% on a compromise deal is it about buck of share that will fix your bottom line? What would you do with some extra buck of share?

Probably Alan, if you think about it right, you’re talking about cash flow of $30 million or $40 million. We were hoping that might be 15%, but it’s even more. And I just think if you look at the same capital allocation priorities we’ve always said right, between supporting the growth, doing a great job for the customer, and then looking at M&A, and the share repurchase.

Great. Thanks.

Next we’ll go to Jennifer Fritzsche with Wells Fargo. Please go ahead.

Great. Thank you. Steve, if I may, not to beat a dead horse but on Goodman but maybe putting a glass half-full spin on this. Is it my understanding that this is more of a wireless centric asset? And I know you’re not changing the largest customer as that – it’s my feeling the customer might not all know all the spectrum they might have next year. Could some of this be maybe passed waiting to see what those assets comes before they make deployment decisions in wireless? And then secondly…

Yes. So, let’s just go after that Jennifer and then Drew will follow-up. So, look, this is because the order flow hasn’t been what we expected. The catalyst for wireless opportunities with all customers around first net, around 5G, around small cell, around additional carrier adds as they rollout new spectrum, around opportunities, around the CAF II, we feel good about as we said on the call or earlier on the call, we grew our wireless services at over 35% organically year-over-year. So clearly there are some good things happening there.

Great. And then on CenturyLink, I know it came up before with level III. Do you follow CenturyLink? It’s my understanding there’s no change in the top 25 markets. I think you said their network plan hasn’t changed since it is all still the same with your top 25 markets, broadband push and that’s more of the engineering decision post deal, I think they’re going to be made out of the CenturyLink headquarters were Dycom’s relationships are is that correct?

I won’t go into where the relationships are other than to say that we haven’t seen anything in CenturyLink and we actually grew this quarter. We haven’t seen anything that would diminish our enthusiasm for the three year plan that they talked about in August. And we look forward to a number of opportunities that arise out of that plan both for fiber and for copper.

Great. And then My last question is centered around Verizon. Verizon just got FCC clearance for telecommunications that should close shortly, and that’s going to bring in a lot of fiber rings for them. Is there an opportunity there for Dycom we just had John Stratton last week at our conference talking about the need for more fiber push as we get those rings in markets outside their own [indiscernible] could that be another opportunity to pull lateral?

Yes, we followed Mr. Stratton’s comments carefully at your conference and clearly we feel very good about our alignment with what Verizon would like to do both input footprint and out of the footprint in deploying additional fiber both across the XO network plus the networks that they already own as a result of other acquisitions that they’ve done over the years. So strong opportunity there.

Great. Thank you.

Our next question is from Fran Okoniewski from Friess Associates.

Hi, Steve. So just a simple question, your headcount growth quarter-over-quarter, year-over-year, is that a result of just maybe some acquisition headcount or is that new headcount and if so with the growth and as we’re seeing the third-quarter revenue guidance and may be some conservativism, why would we be seeing the growth in headcount like that?

Well, Frank. We do not close any acquisitions in the first in the October quarter and the headcount went up short of call it $400 some million – 400 some employees, right. So we’re busy and the business continues to grow. We have lots of openings out there as we grow that business. And so we – the headcount growth is consistent with our outlook for the business.

Okay.

We have follow-up from Alex Rygiel. Please go ahead.

Thanks, two quick question, Steve could you quantify revenue from wireless business in the quarter?

Yes we can Alex it was – or Drew go ahead.

It was $63.4 million.

And Steve, your stocks creating an interesting level of 71. Can you refresh our memory on your willingness to repurchase shares at this level going back over time your willingness to expand your buyback and at the timing at which you come into market and buyback shares?

So we have a standard policy on the buyback, the window opens two days after earnings we released and closes with two weeks left in the quarter we bought back 40% of the equity over 11 years. And so obviously at the right price and when it makes sense versus other uses of capital, we’re happy to do it.

Thank you.

And we have a follow-up from Adam Thalhimer. Please go ahead.

I wanted to ask that Steve, the Verizon one fiber are you seeing anything in Boston from that yet?

Adam as we talked about, probably almost 2 years ago we entered into a large agreement with Verizon to cover a good portion of their wireline services on the East Coast. We started in the Boston area is the last leg of that contract initiated in May. And I think beyond that I don’t think we should add anymore other than it’s a nice opportunity.

Okay. And the unnamed customer that you took backlog out for in the quarter, is the story closed on that or is there still a chance of that business could be executed at some point?

So Adam, the contraction place, we’ve been working there at a reduced level since the spring. We do still have some work ongoing but the forward trajectory of the business we didn’t have enough confidence to continued included in backlog, where we to gain that confidence than we would reassess, what the right number was to record the backlog. But not until we have that confidence.

Okay. Thanks.

And we have a follow-up from Bill Newby. Please go ahead.

Hey, guys. Just one more follow-up on the trump administration coming in. I guess most of the optimism has been kind of surrounding the regulatory environment that’s going – that might see changes. I guess, is there anything that you guys have seen with his policy that could suggest ongoing spending related like the CAF II program or anything further from that?

I have not anything see Bill, it seems a little bit early to get that kind of granular detail. I do think generally that a change in the Chairmanship of the FCC would be supportive of more CapEx.

Got it. Thanks guys.

And we have follow-up from Tom Bishop. Please go ahead.

Thanks Steve. With the stock off is much of visited this morning I just wanted to give you the opportunity to tell investors what they might be missing here there obviously seen some sort of waterfall event here. With this quarterly report and I’m sure that appreciate some showing up.

Well. I mean Tom, we’ve had lots of growth opportunities in the business. Customers are optimistic about what they like to get done in 2017. We will continue to put the numbers up and the market will continue to assess the value of those numbers, but we’re going to work hard every day to build the better business. I don’t know that we have anything to add beyond that.

Okay. Thank you.

And we go to follow up from Alan Mitrani. Please go ahead.

Hi, thanks. Steve, it seems like some people out there believe that fiscal 2018 might be a down year versus fiscal 2017. And I think that’s was causing a lot of angst among some of your investors and people looking up a stock in general. That right now we have six month bridge to get to MSLs are spending more and CAF II rolls in and you cycle some of the unnamed customer’s work. But then comes fiscal 2018 as AT&T is already built up towards their $13 million, $14 million goals of hitting their subs or what that required it. Just part in the business could slow down meaningfully and there might be more competition. Can you just speak to some of the factors outlying that in your visibility as you said multi-year, I’m not looking for guidance I’m just looking for more the factors that you look at as you plan your business.

So we have a customer in CenturyLink to just outlined a three year plan that extend through 2019. We have CEO of the cable customer, who outlined a five-year plan that starts in 2017. We are seeing great growth but the project growth around capacity is just beginning with another cable MSO. We have this 5G opportunity and the associated wire line network that most likely customers will want to deploy in anticipation of the technology standards settling in 2020 and folks are worried about fiscal 2018. Is that your question?

Basically it, we’re always looking at.

Okay.

I appreciate that. Thank you

And we have question from Matt Berg with Black and White Capital. Please go ahead.

Hey Steve, just a follow-up on the question, so how should we think about the trajectory of AT&T ask the calendar 2017?

We are providing guidance for the second quarter and quantitative guidance for the third quarter. We have an overall view of the plan. We know that it runs to 2019. We know there are about 3 million homes passed and those they have expanded the number of markets where they are going to be active. And so beyond that I don’t think we have any comments that are more granular in that period of time.

The requirement as they get they passed 13.5 million homes.

They talk about 12.5 million, but they’ve also said in their most recent comments, they are likely to do more.

Okay, okay. And okay, thank you.

And we have follow-up from Fran Okoniewski Please go ahead.

Hi Steve, your book-to-bill was a little bit light this quarter. Was that primarily a function of Goodman or were there some other driving factors I guess and I would also like to follow-up to previous question, stocks under a lot of pressure right now and previous quarters you talked about as being in early stages of a massive investment cycle. Do you still feel as excited as you were a quarter or two ago just given some of the merger activity and some of the Google announcements? Thanks.

We’ll take the second question first [indiscernible] So we talked earlier about the mix of information that customers disclosed as they talked about their September quarters. The trajectory of those plans going into 2017, the fact that we had new multi-year plans that are being initiated. And so I think it would be rational feel at least as good if not better about the business as a result of all of that incremental information that we did three months ago. And then with respect to the book-to-bill, if you pull out the developments that we talked about, there was a slight seasonal downturn and bookings, remember there is a number of parts of our business particularly in MSO business where we work on Evergreen contracts that renew annually at the first of the year. And so in this particular quarter, there’s only a couple months of activity in the backlog when we report the next quarter they will be up as those are rolled over.

Okay, thanks.

Okay, John, we’ll take one more question.

And actually Mr. Nielsen, no further questions in queue.

Okay. We thank everybody for your time and attention and we will be talking to you the last week of February when we report the second quarter results. Thank you.

Ladies and gentlemen, that does conclude your conference. Thank you for your participation. You may now disconnect.