Ladies and gentlemen, thank you for standing by, welcome to the Dycom Conference Call. At this time, 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] As a reminder, today's call is being recorded. I'll turn the conference now 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 provide our preliminary second quarter fiscal 2019 results. Revise our guidance for fiscal 2019 and provide guidance for the third quarter. Going to slide three, during this call, we will be referring to a slide presentation, which can be found on our website's Investor Relations main page. Relevant slides will be identified by number throughout our presentation. Today, we have on the call, Drew DeFerrari, our Chief Financial Officer; and Rick Vilsoet, our General Counsel. Now I will turn the call over to Rick Vilsoet. Rick.

Thank you, Steve. Except for historical information, the statements regarding preliminary results of the company operation for the second quarter ended July 28, 2018, the statements made by company management during this call maybe forward looking and are maybe 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 transition report on Form 10-K for the six months ended January 27, 2018, 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 four and a review of our updated expectations for our preliminary second quarter results. As you review our results please note the financial information contained in our press release and slide presentation is preliminary and represents estimates for certain of our financial results for the quarter ended July 28, 2018. In our release and comments, we presented certain revenue amounts excluding revenues from storm restoration services during the quarter and from a business acquired during the April 2018 quarter adjusted EBITDA, adjusted net income and adjusted diluted earnings per share all of which are non GAAP financial measures. See slides nine to 12 for reconciliation of non-GAAP measures to GAAP measures. This morning we reported preliminary results for the second quarter that were below our prior expectations. Revenue is expected to be approximately 799.5 million with adjusted diluted earnings per share expected to range from a $1.05 to $1.08 this range includes approximately 0.9 million of incremental tax benefits. These preliminary results were impacted by large-scale deployments that were slower than expected during the quarter due to customer timing and tactical considerations and margins that were pressured from under absorption of labor and field costs at a lower revenue level. Despite disappointing results for the quarter near term trends we are pleased with our substantial backlog growth and confident in industry opportunities. Liquidity was solid at the end of the quarter with cash and availability under our credit facility of 425 million. Going to slide five, organic revenue excluding storm restoration services increased 0.8% our top five customers combined produced 77.9% of revenue increasing 3.3% organically, while all other customers decreased 7% organically. Comcast was our largest customer with 21.4% of total revenue or 171.2 million Comcast grew 6.7% organically. Revenue from AT&T was…

Thanks, Steve and good morning, everyone. Going to slide seven, revenue and results for the quarter ended July 28, 2018 are expected to be below our previous guidance. Large scale deployments were slower than expected during the quarter due to customer timing and tactical considerations, margins were pressured from under absorption of labor and field cost at the lower revenue level. As a result we expect revenue of approximately 799.5 million and non-GAAP adjusted EBITDA diluted EPS to range from $1.05 to $1.08 per share, which includes approximately 900,000 of incremental tax benefit primarily from fiscal year tax filings and the tax effect of the settlement of share based awards. Adjusted EBITDA margin is expected to range from 12% to 12.2% of revenue. Our liquidity is solid at approximately 425 million at the end of the quarter consisting of availability from our credit facility and approximately 23.9 million of cash in equivalents. We ended the quarter with 346 million of term loans outstanding and no revolver borrowings on our senior credit facility. Going to slide eight. Based on our expected results through July 2018 and our current expectations for the second half of the fiscal year we have lowered our annual guidance. In our revised outlook, we have considered the current run rate on large customer programs and the expected timing of services. For the full fiscal year ending in January 2019, we currently expect revenues, which range from 3.01 billion to 3.11 billion, non-GAAP adjusted diluted EPS to range from $2.52 to $3.07 per share and adjusted EBITDA margin to range from 10.7% to 11.1% of revenue. For the October 2018 quarter we currently expect total revenue to range from 785 million to 835 million, non GAAP adjusted diluted EPS to range from $0.80 to $1.04 per share and adjusted EBITDA margin to range from 11.6% to 12.2% of revenue. Now I will return the call back to Steve.

Thanks Drew. While we’re disappointed with current revenue and margin softness and the adjustment to our near-term outlook, we remain encouraged that our major customers are committed to multiyear capital spending initiatives and the close multiyear initiatives significantly impacted our backlog this quarter. This time, we will open the call for questions and answers due to the limited nature of today's call our answers will be confined to information derived from today's press release and slides. Additional detailed information will be provided on our August 29 full results call. Now John will open up the call.

[Operator Instructions] We have a question in the first line of Alex Raymor with B Riley FBR. Please go ahead.

Thanks, Steve, and good morning Drew. Steve your comment with regards to tactical considerations, primarily permitting, can you expand upon that just a little bit as it relates to how this tactical consideration due to permitting maybe different than maybe past Fios builds or fiber builds in the mid-2000s.

I think Alex as we said in May these are big programs they are ramping up broadly, they are subject to greater uncertainty and those are the uncertainties that impacted the second quarter, they will resolve but there are uncertainties because of the size of the programs.

And then as it relates to cost pressures in the short-term expand upon them a little bit too. And maybe address sort of your thinking on headcount in the short-term, do you carry headcount in anticipation of the big backlog and how that can come through next year, just a little bit more detail would be helpful.

So I think as we said in the comments it's really an absorption question, we have to have the staff in place to support the revenue that is embedded in the guidance. And we do but we’re not as busy as we had expected to be and so that created an absorption question, but because the work is there we have to add the people.

Helpful, I'll get back in the queue, thank you.

Next we will go to Tahira Afzal with KeyBanc Capital Markets. Please go ahead.

Steve, can you give me an idea and I don’t know if it's even possible, obviously your guidance from the initial guidance is up, is down notably is it possible to break down roughly how much is due to the permitting nuances versus really timing delays caused by customers really taking a bit of time to spend.

Tahira, at this point, due to this is a preliminary call, we're not really going to comment on business trends or customers trends beyond what's implied in the preliminary Q2 and the updated third quarter and full-year guidance but we certainly will on the next call.

Okay, great, and can you talk a bit if I look at your original second quarter guidance right and where the revenues were going to be but I'm still generating earnings that were a little below a little above the higher end of April guidance. So it seems like for the same amount of revenues it does seem that you've seen lower utilization now or some other pressure on margins versus what you thought has there been anything incremental in terms of pricing or cost that is new?

Yes, I think it's just as an absorption question again Tahira, I mean there is substantial programs and it just really those costs there is nothing new.

Okay, thanks, I'll hop back in the queue.

Next will go to Chad Dillard with Deutsche Bank. Please go ahead.

Hi, good morning guys. So are there any good analogs that you can point to give us sense for just like that is how are the pace of these permitting issues like we resolved themselves and like how it takes and just trying to get a better sense what the line of sight we should expect here?

I mean Chad once again I mean the trends that we've outlined in the guidance contemplate those and then I think if you step back from it clearly as we said Q2 was disappointing we had organic growth in the quarter if you look at the third quarter guidance at the lower end of the range it implies call it kind of 5% organic growth and so we think this is getting better over time but beyond what we've given into the guidance we really we will have further comments in a couple of weeks.

Got you, and then the company guidance was up pretty sharp today and now you've reissued a revised version I guess I would be curious to get sense for what have you changed about your forecasting or estimating process that makes you more confident you can hit numbers going forward?

Chad, we worked that at where we work now in Q2 we went through and scrubbed it again right these things are subject to uncertainties we there is nobody that would have liked for us to have been able to get through that uncertainty better than we did but we continue to work it along the contract at the time when market is trying to make sure that we do the best that we can.

Great, thank you very much.

Our next is from Adam Thalhimer with Thompson Davis. Please go ahead.

Can you give us a little insight into the difference between total backlog which is up 2 billion sequentially within 12 months which is down a little bit sequentially?

Adam, what as we've said in the comments we've tempered our expectations for the second quarter of this fiscal '19 that's got to be reflected in the next 12 months. But clearly it was a strong quarter for bookings and it's just to shape of how those bookings comes through the business that we're -- want to make sure it matches our tempered revenue expectations as embedded in the guidance.

But that disparate, I guess given that that disparate why isn't the I mean this huge increase in total backlog I’m just curious why the business itself isn't ramping faster given that increase.

We talked about the sources of the underperformance in Q2 and the impact on the second half of the year, and those don’t necessarily impact backlog because there timing, total backlog bu they certainly impact how it comes to the business in the near term.

Okay and I’m curious from a customer level prospective, every customer kind of performed in line with expectations other than AT&T, that not necessary a large program or permitting I’m just curious what’s happened there.

We don’t, we are not going to have any comments as we said earlier about the individual customers, we will certainly be talking about business trends and customers trends in general on the next call. This is a preliminary call.

And then lastly what’s the framework agreement.

Adam, we disclosed what we can when we enter into agreements consistent with the NDA provisions in the agreement and we really don't have anything to add there.

Okay, thanks.

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

It’s a bigger picture question, you talked so much about the wireless and wireline CapEx line, is some of the permitting issues you’re seeing related more to what I call traditional wireless spend that maybe you got through the Goodman acquisition. And I guess the second if I may, any changes to the competitive environment you’re seeing obviously you got huge increase in that backlog is just any competitive pressures you’re seeing maybe some crazy pricing in out there by some smaller AMC players. Thank you.

Jennifer, I don't think we -- we don’t see any real difference in the tactical considerations this quarter compared to when we talked in May, we are happy to think about more but I don't think there's anything really different there. And then in terms of the market share I guess we as we said in our comments we're pleased with our bookings during the quarter, so I don’t know that we have anything to add beyond that.

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

So I just want to make sure I understand kind of the pace of what’s going on with the permit issue, I think during the quarter you did make some comments for that in the public forum, that were starting to see some of these permits start to flow and that the backlog of permitted work was improving, so does that remain true that you’re starting to see to overcome this hurdle in certain regions as this just an issue that maybe the pace of improvement wasn't as rapid as you were initially anticipating.

I think that’s fair, the continued impacted the quarter. Revenue grew sequentially, so things picked they didn't pick up as much as we expected based on the two factors that we've outlined.

Okay and then given just that overall you're seeing acceleration in the industry around both wireless and wireline spending, are there any areas or any issue at all in terms of finding the labor and the resources to meet this demand and do the work quickly as customers are looking for.

Noelle, and I hate to keep repeating this but this is limited call, we will talk about business trends on the next quarter on the next call which is on August 29th. The primary issues this quarter were timing and tactical considerations.

Understood, thank you.

And next we go to Christian Schwab with Craig Hallum. Please go ahead.

Steve, can you on the backlog the $7.8 billion or $7.9 billion number. Can you gave us an idea of how long you've signed work up for?

I mean Christian we don’t beyond what we've provide on slide six which is the approximate term we really don’t provide durations beyond that obviously it's competitive and sensitive information both to us and for our customers.

And then my last question is would you in that big bookings expectations was the pricing to secure that any different than say the environment was say 12 months ago.

Christian, we only have two ways we think about and communicate our view on contracts attractive which year as we've said in our comments that we were encouraged by the bookings were acceptable and we were encouraged by these bookings.

Okay, thank you, no other questions.

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

Can you just remind us two things. How much is outstanding on your stock buyback and where you at all exited this quarter?

So Alan and the information that we've provided we gave you an outlook on weighted share count in the materials that we provided and we will update our thoughts on capital allocation on the August 29th call.

And we go to Joshua Press with Exile Capital, please go ahead.

I've been following you guys quite a while now and you seem to miss on quite a few numbers by a long shot. I was just wondering it seems like the kind of business where it should be fairly predictable and it's not. So how are we as investors supposed to follow-up something like this when we continue to get blindsided quarter after quarter.

As we've said and your comments are fair for this calendar year I think in the broader context…

I'd say two years probably…

But in a broader context there may be a different view. We have some big programs they are ramping up they are large they are subject to timing and uncertainty there is nobody who would have liked to have had better visibility then we have but that's where we are with these large projects and it will resolve over time as they always do.

Do we always or is it just like extract of the way it's going to be going forward or do you think like there is going to be a end where we're just going to talk to be able to understand what's going to happen going forward, it's getting a little frustrating as an investor I just got to say.

Sure. I understand that I mean it's frustrating to us too, there are large programs customer timing does resolve itself and these tactical considerations do resolve themselves they have in the past.

Right, thank you.

And next we go to Fran Okoniewski with Friess Associates, please go ahead.

Just sort of following up on the previous question there. We've had a few quarters of guide downs and margin inefficiencies and feel then customers moderations in these large programs and I guess what we’re all really looking for is more clarity sort of if we can’t talk about the quarter, maybe we can talk about some of the things that led up to this quarter. Perhaps some of these large programs and delays are you guys like a sole-source contractor or this is sub contractor inefficiency or I guess we’re just looking for little bit more to help us out.

I mean Fran what we talked about right is customer timing and the tactical considerations, which include kind of regulatory and permitting and other things, I mean those are consistent throughout the periods that we discussed.

It doesn’t seem like others are seeing the same kind of delays for the magnitude perhaps and maybe it’s a region a specific region or something like that that just a little bit tricky for you guys.

I mean Fran we’d be happy to talk as we said on the call, on the 29th on a broader comments on business trends but for this call we don’t have anything to add.

Okay, thanks.

And Mr. Nielsen there are no further questions in queue.

Okay we thank everybody for your time and attention. Our next call will be 9am Eastern time on August 29th. Thank you.