Actionable news
0
All posts from Actionable news
Actionable news in DY: DYCOM INDUSTRIES Inc,

During September

Convertible Senior Notes due 2021

The Notes bear interest of 0.75% per annum, except in certain circumstances, and mature on September 15, 2021 unless earlier converted by the holder or purchased by the Company. The initial conversion rate applicable to the Notes is 10.3211 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $96.89 per share.

In accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 470,

Debt

("ASC Topic 470"), the liability and equity components of the convertible notes are accounted for separately. The carrying amount of the liability component is calculated by measuring the fair value of a similar instrument that does not have an associated con vertible feature using an indicative market interest rate ("Comparable Yield"). The difference between the principal amount of the Notes and the carrying amount represents a debt discount. In addition, the equity component represents the difference between the principal amount of the Notes at issuance and the fair value of the liability component of the Notes at issuance. Based on an estimated Comparable Yield of 5.50% at the issuance date, the related liability and equity components for the Notes were as follows at issuance

(dollars in thousands)

:

Liability component

Principal

$

485,000

Less: Debt discount

(116,388

)

Net carrying amount of Notes

(a)

$

368,612

Equity component

(a)

$

116,388

(a)

To account for debt issuance costs related to the Notes, an estimated $10.1 million in deferred financing fees paid to the initial purchasers of the Notes will be netted against the carrying amount of the Notes on the Company's consolidated balance sheets. Additionally, approximately $3.6 million of issuance costs attributable to the equity component will be netted against the equity component in stockholders' equity on the consolidated balance sheets and approximately $1.4million related to third party debt issuance costs will be included in other assets on the consolidated balance sheets.

Total interest expense related to the Notes will include (i) amounts payable in cash that will accrue at a rate of 0.75% per annum based on the outstanding principal amount of the Notes, (ii) amortization of debt discount, and (iii)amortization of deferred financing fees. The Company will no longer incur interest expense related to the 7.125% Notes subsequent to the quarter ended October 24, 2015.

The debt discount of $116.4 million will be amortized to interest expense using the effective interest method and the Comparable Yield over the term of the Notes. The amortization of the debt discount will not require the payment of cash during the period incurred. However, in accordance with ASC Topic 470, the amortization will be recognized as interest expense. The following table reflects the estimated carrying value of the Notes and the related amortization of the debt discount over the term of the Notes, excluding any amortization of debt issuance costs:

Liability Portion of Notes -

As of End of Period

(a)

Amortization of Debt Discount Expected to be Recognized as Interest Expense During the Period Presented

(a)

(Dollars in thousands)

Fiscal 2016

Quarter ended October 24, 2015 (Q1-2016)

$

370,392

$

1,780

Quarter ended January 23, 2016 (Q2-2016)

$

374,540

$

4,148

Quarter ended April 23, 2016 (Q3-2016)

$

378,731

$

4,191

Quarter ended July 30, 2016 (Q4-2016)

$

383,321

$

4,590

Fiscal 2016

$

383,321

$

14,709

Fiscal 2017

$

400,931

$

17,610

Fiscal 2018

$

419,523

$

18,592

Fiscal 2019

$

439,152

$

19,629

Fiscal 2020

$

459,875

$

20,723

Fiscal 2021

$

482,164

$

22,289

On maturity (Q1-2022)

$

485,000

$

2,836

(a)

The Company's fiscal year ends on the last Saturday in July. As a result, each fiscal year consists of either fifty-two weeks or fifty-three weeks of operations (with an additional week of operations occurring in the fourth quarter). Fiscal 2016 and fiscal 2021 will consist of fifty-three weeks of operations and fiscal 2017 through fiscal 2020 will consist of fifty-two weeks of operations.

7.125% Senior Subordinated Notes

On September 15, 2015, the Company issued a notice under the indenture to redeem all of the 7.125% Notes that remain outstanding on October 15, 2015 (the "Redemption Date"). The Company used a portion of the proceeds of the Notes offering to satisfy and discharge the indenture governing the 7.125% Notes. In connection with the redemption, the Company will incur a pre-tax charge during its first quarter...


More