Dycom Industries, Inc.
- Company Name
- Dycom Industries, Inc.
- Stock Symbol
- Class Period
- November 20, 2017 to August 10, 2018
- Motion Deadline
- December 24, 2018
- Southern District of Florida
The complaint charges Dycom and certain of its officers with violations of the Securities Exchange Act of 1934. Dycom is a provider of contracting services specializing in program management, engineering, construction, maintenance, and installation services throughout the United States and in Canada.
The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding Dycom’s business and prospects. Specifically, contrary to defendants’ statements at the beginning of the Class Period that Dycom was expecting its engineering and construction activity to increase throughout the balance of its second quarter and accelerate into calendar 2018 due to new, large-scale customer projects, in fact, Dycom’s large projects were highly dependent on permitting and tactical considerations, Dycom was facing great uncertainties related to permitting issues, and these uncertainties would expose Dycom to near-term margin pressure and cost-absorption issues. As a result of defendants’ false statements and/or omissions, the price of Dycom stock was artificially inflated to more than $120 per share during the Class Period.
On May 22, 2018, Dycom issued a press release announcing its financial results for the first fiscal quarter ended April 28, 2018. The press release disclosed that Dycom was revising its previously announced financial guidance for the 2019 fiscal year ending January 26, 2019 “to reflect the actual results for the quarter ended April 28, 2018,” from its previous guidance for fiscal 2019 of $3.30-$3.50 billion to $3.23-$3.43 billion, due to the “anticipated timing of activity on large customer programs and the related impacts on revenues and margins.” As a result of this news, the price of Dycom common stock dropped $23.56 per share to close at $92.64 per share on May 22, 2018, a decline of over 20%.
Then, on August 13, 2018, before the market opened, Dycom issued a press release announcing disappointing preliminary financial results for the second fiscal quarter and six months ended July 28, 2018, including preliminary revenues and results for the second quarter below defendants’ previous guidance. Later that day, during Dycom’s earnings call, defendant Steven E. Nielsen, the Company’s CEO, blamed the disappointing results on cost-absorption issues caused by uncertainties related to permitting issues. Additionally, defendant Nielsen disclosed that the large scale projects were not ramping up as expected due to the uncertainties related to permitting issues and that Dycom’s core business was in reality not as busy as previously stated. As a result of this news, the price of Dycom common stock dropped $21.62 per share to close at $68.09 per share on August 13, 2018, a decline of over 24%.