Steven Nielsen - Chairman, President and Chief Executive Officer Tim Estes - Chief Operating Officer Drew DeFerrai - Chief Financial Officer Rick Vilsoet - General Counsel

Jack Kasprzak - BB&T Capital Markets Mark Carroll - Morgan, Keegan John Rogers - D. A.

Davidson Min Cho - FBR Alan Mitrani - Sylvan Lake Asset Management

Thank you, Mary. Good morning everyone.

I’d like to thank you for attending our first quarter fiscal 2009 Dycom results conference call. During the call we will be referring to a slide presentation, which can be found on our website, www.dycomind.com under the heading Investors and subheading Event Details.

Relevant slides will be identified by number throughout our presentation. Going to slide one, today we have on the call Tim Estes our Chief Operating Officer; Drew DeFerrai our Chief Financial Officer; and Rick Vilsoet our General Counsel.

Now I will turn the call over to Rick Vilsoet; Rick.

Thank you, Steve. Referring to slide two, expect for historical information, the statements made by company management during this call maybe forward-looking and our made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements 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. These risks and uncertainties are more fully described in the company’s periodic filling with the Securities and Exchange Commission.

The company assumes no obligation to update forward-looking statements. Steve.

Thanks Rick. Yesterday we issued press release announcing our first quarter 2009 results.

As you review this release, it is important to note the following. During the first quarter we wrote-off deferred financing cost of $0.6 million in connection with the replacement of our existing credit facility with a new credit facility.

For clarity and to enable comparability between periods, my comments will be limited to results from continuing operations, excluding this item. A reconciliation of the non-GAAP results to our GAAP results has been provided with our press release, as well as on slide 12.

Moving to slide three; result of $0.28 per share for the first quarter exceeded the upper end of our earnings per share expectations. Revenue increase sequentially by 3.7% and organic year-over-year growth was 1.3% for the quarter, including $15 million of hurricane restoration work.

Volumes were mixed from telephone companies as some customers’ deployed capital for new network initiatives, while all customers tightly manage routine capital and maintenance expenditures. Constructions spending by cable customers were generally stable.

Installation activity firm throughout the first two months of the quarter, but it was pressured in October as the overall economy slowed noticeably. Margins continue to improve sequentially, but remain pressured year-over-year.

Cost of earned revenues was positively impacted by fuel costs that decreased over 60 basis point sequentially from the fourth quarter, but increased over 50 basis points from the year ago quarter. G&A expenses reflected increased legal and professional fees and payroll costs, as well as a sequential increase in incentive compensation as financial results improved.

Cash flow from operation was inline seasonally, reflecting the payment of our year-end incentive compensation and the semiannual interest on our rates. Additionally, we deployed working capital during October to support our hurricane restoration efforts and paid our previously disclosed wage in our work class action settlement.

Share repurchases were suspended in the quarter due to the uncertainty in the financial markets. Going to the slide four; during the quarter we experienced the effects of an overall economy, which deteriorated in the latter half of October.

Revenue from Verizon was flat sequentially and up year-over-year. At $64.8 million or 19.4% of revenue, Verizon was our largest customer.

Revenue from AT&T was down sequentially and down year-over-year. AT&T was our third largest customer at $52.4 million or 15.7% of total revenue.

Revenue from Comcast was $53.8 million. Comcast was Dycom’s second largest customer for the quarter at 16.1% of revenue.

Time Warner Cable was our fourth largest customer with revenues of $26.3 million or 7.9% of total revenue reflecting mixed upgrade activity and instillation volumes. Revenue from Embarq was up sequentially by $2.5 million and down slightly year-over-year.

Embarq was our fifth largest customer at 5.5% of total revenue. Altogether our top five customers represented 64.6% of revenue and were up organically 2.8%.

All other customers declined organically 1.3%. Interestingly our seventh and eighth largest customers, Windstream and Qwest grew at a combined rate of 58% year-over-year reflecting increased capital spending.

Now moving to slide five; backlog at the end of the first quarter was $1.15 billion versus $1.313 billion at the end of the fourth quarter, a decrease of approximately $163 million. Of this backlog, approximately $715 million is expected to be completed in the next 12 months.

During the quarter, we continue to book new work and renew existing work. From AT&T we received three year extensions to our Orangeburg, South Carolina Master Construction Contract and our Upstate, South Carolina, Underground Facility Locating contract.

For Comcast a System Upgrade of Sacramento California and System Audit in Illinois and for ETC Canyons a Pipeline Installation Project in Colorado. Headcount declined during the quarter to 10,355 reflecting continued rightsizing of our work force and a recessionary overall economy.

Now I will turn the call over to Drew for his financial review.

Thanks Steve and good morning everyone. As I discuss the financial results for the quarter, please note that during the first quarter of fiscal 2009, we incurred a pretax charge of approximately $0.6 million for the early termination of our prior credit agreement upon entering into a new three-year credit agreement.

We’ve provided reconciliation to the GAAP measures in the press release and also in the appendix of the slide presentation for today’s call. Now for the financial results; going to slide number six of the presentation, contract revenues for the first quarter of 2009 was $334 million, which was up 1.3% from last year’s Q1 revenue of $329.7 million.

Our first quarter 2009 revenue included approximately $15 million for restoration services related to hurricane damage on the Southern United States. Excluding the item I mentioned in my opening remarks, income from continuing operations for the first quarter was $10.9 million compared to $15.3 million in the first quarter of 2008.

Fully diluted earnings per share for the quarter were $0.28 per share excluding $0.01 per share of expense for the adjusting item compared to $0.37 per share in the prior year. Turning to slide number seven; on a year-over-year basis our cost of earned revenues increased by 118 basis points as a percentage of revenues.

This increase was specifically driven by higher labor and related cost in relation to our current operating levels which resulted in a 156 basis point increase in costs. Additionally we experienced higher fuel costs on a year-over-year comparison of 51 basis points, resulting in total fuel cost of 3.9% of contract revenue for our Q1 2009.

Partially offsetting these increases was a 70 basis point decrease in other equipment costs and a 21 basis point reduction for insurance costs reflecting lower loss activity. General and administrative costs increased 48 basis points from a year-ago period, due to a 36 basis point increase in payroll and related expenses and a 37 basis point increase in professional fees related to information technology initiatives.

These increases were partially offset by a lower stock-based compensation in the current quarter, which totaled approximately $1.5 million compared to $2.1 million in the prior year first quarter. Depreciation increased year-over-year as a result of the capital expenditures that we made during fiscal 2008.

Interest expense increased during the quarter due to the borrowings under our new credit agreements and due to higher overall borrowing costs. The effective tax rate for the quarter was 40% compared to 38.8% for the first quarter of fiscal 2008.

Now turning to slide number eight, our financial position remained strong in our Q1 2009. During the quarter, we entered into a new three-year credit agreement with the syndicate of banks that provides for $195 million of total capacity, along with an accordion feature to add $100 million of additional capacity with certain limitations.

We ended the quarter with $45.7 million of cash; we had $30 million of borrowings outstanding and approximately $52 million of letters of credit outstanding under the credit agreement. This provides us with approximately $113 million of remaining availability as at the end of our fiscal Q1.

Now turning to slide number nine, cash flow from operations were $4.1 million during the quarter and reflect the funding of working capital during October to support the hurricane restoration work and the payment of approximately $8.6 million or our previously disclosed wage in our class action settlement. Capital expenditures, net of disposals were lower sequentially at $8 million.

Combined DSO on trade receivables in net un-build revenues was up slightly from the fourth quarter to 69 days from 68 days. Now, I’ll turn the call back over to Steve.

Thanks Drew, going to slide 10. In summary, despite a progressively challenging economic backdrop, Dycom continued demonstrate strengths.

First and foremost we maintained solid customer relationship throughout our markets. Several significant contract extensions and awards were secured at attractive pricing.

Secondly the strength of those relationships and the value we can generate for our customers has allowed us to be at the forefront of the evolving industry opportunities. The drivers of these opportunities are strong as ever.

The nations leading to our box continue to deploy fiber deeper into their networks and these developments will drive broad industry developments for the next several years. Additionally we are encourage that cable operators are planning to deploy a number of new technologies which will enable them to significantly increase the effect of bandwidth of their networks and offer new products to consumers and finally we are strong financially, maintaining ample liquidity and a strong balance sheet, positioning Dycom to weather what maybe a difficult overall economic climate.

As our industry continues to evolve, we believe our fundamental strengths will allow us to remain one of the best positioned firms in our industry able to exploit profitable growth opportunities and finally moving to slide 11, after weighing all of the factors we have discussed today, as well as our current expectations, we have updated our forecast as follows: For the second quarter of fiscal 2009, we anticipate earnings per share of $0.02 to $0.07 on revenues of $250 million to $270 million. This outlook anticipates a recessionary U.S.

economy; seasonally normal weather; G&A expenses; lower in the sequential basis versus Q1 of fiscal 2009 reflecting cost reduction initiatives; a decrease in other income from our first quarter as we anticipated decline in the number of assets which will be sold in the second quarter; consistent levels of depreciation during the second quarter versus the first quarter; modest capital expenditures; all of which together will generate significant free cash flow. Although it’s clear that the nation’s economy is in recession and may impact the spending plans of our customers, we remain encouraged that our major customers posses significant financial strength and remain committed to multi-year capital spending initiatives.

We have adjusted our business to address the poor economic environment and these adjustments are indented to fortify our strong balance sheet and meaningfully increase our liquidity. We remain confident in our strategies, the prospectus for our company, the capabilities of our able employees and the experience of our management team; we have successfully managed through difficult economic times before.

Now Mary, we’ll open the call for questions.

I wanted to ask about the new credit agreement and the covenants; could you tell us what those covenants are?

The credit agreement we entered into earlier in the quarter, it’s get typical covenants; there is consolidated leverage ratio; interest coverage and intangible network of the primary ones. We will be filing the credit facility with the 10-Q this week and it’s a typical consolidated leverage test of three times and 2.7 times on interest coverage which we clear in both instances by a wide margin.

And could you tell us for fiscal ’09, what you expect CapEx to be?

Yes, we’re thinking at this point Jack, somewhere in the neighborhood at $25 million to $30 million. Now, that there are some opportunities to grow the business and if we pickup new work, it maybe higher, but given our kind of current view of the economy, we think that’s the right number absent any significant new growth.

I assume you said diesel fuel was up year-over-year, but I assume it’s coming down fast. What would be and so if this is the right way to ask at the end of the quarter, I mean did it change a lot during the quarter?

What’s more the run rate as a percent of sales?

It certainly came down throughout the quarter Jack, with one caveat. Because of Hurricane Ike’s impact on Houston, we did see -- believe that are not, they were still high prices in the Southeast through October and also a little bit of shortage of availability, but I think at a run rate basis somewhere in a 3% range versus the 3.5%, 3.6% in the quarter.

This is Mark Carroll calling in for Simon. Just a few housekeeping questions; can you go through your top 10 customers?

I know you’ve typically provided that in the past?

The top five are in the slide deck Mark and I’ll just go through the six to 10. Charter was at 4.8%, number seven was Windstream at 3.3%, Qwest was number eight at 3.1%, the Williams Companies where is at 2.2% and Cablevision was at 1.5%.

I’m sorry, is that 1.5%?

Correct.

Now you mentioned earlier in the call, you suspended your share repurchase program; any plans kind of going forward on that?

What we’re going to do is, as we’ve made some adjustments in our G&A expenses and our plans on capital spending; we’re going to take a look at how the free cash builds up during the quarter. We have always opportunistically addressed acquisitions and share repurchases and I think we’ll continue to approach both of those the same way as we have in the past.

Just switching over to the segments, can you give us a feel for the breakout between Telco and Cable percentage from the Telecommunication segment?

Yes, we can talk about revenue by each customer type. Mark, on the telecom side it was 47% and then the cable side it was 31.8%.

Just one more thing kind of looking forward; you mentioned the economic downturn was reason for the lowering in the guidance, but is there anything more specific; do you see it on the Cable side, the Telco side that you can speak too?

Sure Mark. I think the way we think you’ll manage responsibly in a recession is you understand that on the routine CapEx and maintenance expenditures and kind of are reasonably correlated over all economic activity; volumes are probably going to be down.

We are encouraged on the larger initiatives that a number of our customers had. I mean we think they remained committed; we are doing engineering work for next year and quite honestly they may increase their programs in ’09 versus ’08, but we are planning given the economic climate that it maybe a little bit wider next year than this year and we are just managing our business accordingly.

And just if you can give me one more; are you seeing anything especially from the cables from the conversion from analog to digital?

Yes, we certainly are; Comcast announced that the project was underway, I believe in the Northwest and we are a big part of their installation workforce in the Northwest. So, we continue to see that as happening next year inline with what they’ve indicated to the street.

I just wanted to follow-up a little bit in terms of the outlook in the ’09. I mean you have been through some of these downturns before and I guess I’m trying to get a sense from here is; how do you see this shaping up?

Obviously near-term outlook is going to be tougher, but is this something that at this point extends through ’09? It sounds like there’s some hope that you might see an up tick.

It sounds like later in the calendar year, I don’t know if that’s what you are implying or not, but I guess just how much visibility?

All economic activity is going to drive routine CapEx and maintenance expenditures and I think we’re all encouraged that we’re going to have a concerted effort on the part of the government just stimulate the economy and in the past, these things were difficult, but they always have an end and when they do, those type of expenditures will recover and in fact, they generally recover quickly because there maybe some things that have been differed while times are slow that they need to catch upon. On the program work, the larger projects, the fiber deployments and the last question about the analog to digital conversion; we see all of those progressing next year, but at the same time we’ve been through enough of the slowdowns to know that we have to manage a little more conservative like, because in a recessionary environment, things just become a little bit more uncertain and so, we’re reacting that with our cost reduction initiatives and just make ensure that all the capital that we spend is prudent and that’s how you get through these things and we’ve done it before.

In terms of the employee count, you’ve brought that down I guess inline with sort of the business activity. How quickly can you bring that back and I guess over the near-term season I guess you will take it down further?

Yes, I think the approach John is that’s right. We’ll adjust it seasonally that the level of work activity.

In a recession, when the world gets better, unemployment is usually higher and labor will be available when we need it. So, if we think back to kind of 2003, 2004, we did not experience any labor shortages coming out of that recession where we had organic growth of 20 plus percent.

We also use subcontractors and so part of that right sizing effort is also with subcontractors and once again we found that they will recover when the business needs them.

Okay and just last; I mean when you talked about some of your priorities for capital over the near-term and I would assume that evaluations on private companies have I’m guessing become a little bit more appealing, but other competitors or operators in this market have diversified outside of the telecom side and I’m wondering what your thoughts are there? I mean, you’ve got the utility locating business, but…

Yes, I think John the way we have viewed acquisitions in the past in recessionary times is obviously want to be careful, because the outlook is more uncertain and we always think about valuation based on kind of the forward outlook for these private businesses. So, you want to be careful, particularly in the earlier innings of the game, but that doesn’t mean that you don’t do them; we have in the past, but they’ve got to be accretive to our shareholders and have good returns on capital or we’re happy to run our own business, which is a good one.

And what about outside of…?

Quite honestly John, my view on number of the adjacent areas are that they are fairly capital intensive and our experience with capital intensive programs when clients cost of capital was going up is that they’re pretty hard to handicap twelve months out and I’m not sure that we would be given that it would be in adjacent space and not something that we’re in currently, that we would be comfortable in making any big jumps outside the space. We might get there just about the time dollars are flowing back into our own space.

Can we get the revenue breakout for electric utilities and the underground locating business as well?

The underground facility locating was 15.4% and then the electric utilities and other construction maintenance is 5.8%.

Okay and just a quick question; in the past, I think you have talked about fiber to the cell tower as being an opportunity. Are you doing anything there now?

Can you talk about the timing and do you expect delays in those types of projects given the current environment or due to network that will continue to move forward regardless?

Sure. We are actually performing a number of those projects all across the country.

So, yes we are in motion on probably 300, 400 sites at this point. That activity is being driven by the significant increase in data over wireless networks, that connections from the cell towers can be a congestion point, when you get a lot of data on the network and so while like everything else under recession it maybe impacted, everything that I’ve seen for next year shows that the wireless carriers are expecting significant increases in data.

They are also going to new technologies starting really in 2010 that will even more accelerate the amount of data over the network, so we think that’s a good driver. The primary folks that we are working for on these projects are both cable and telephone companies that are very strong financially, and we think that if it make sense, they will be more than able to continue doing it.

And given the type of work that you are performing, are the margins pretty similar for your overall Telecom and Cable Company?

It is very similar to rest of our businesses. We have all of the skill sets, the supervision and the technical ability.

So, yes we like the business and we continue to address it.

What’s your gross CapEx expectation for this year? I know you said $25 million to $30 million CapEx for ’09; I assume you were talking net CapEx there?

Yes, we were talking about net of disposals Alan and we’ll monitor the disposals market $4 million to $5 million probably. We generally sell more in the spring in early summer than we do going into the winter, so more in our third and fourth quarter.

So, you’re meaningfully cutting your CapEx from expectations, where you thought you would be just a quarter ago?

That’s right. I mean I think we’re reacting to the economic climate.

We’re reacting to what we think the responsible position is for thinking about calendar ’09. We’ve got plenty of cash flow.

We’ve go plenty of availability on the revolver. If we need to spend more we will, but right now we’re not planning to.

And Drew, what’s the gross CapEx number this quarter?

It was 9.3 Alan.

Also your SG&A expense, what are your expectations for the full-year stock-based comp perhaps we model that out it was $1.5 million this quarter?

I think that’s about right going forward Alan.

Okay and then, so if I exile stock-based comp from every quarter, it seems like your SG&A has actually risen over the last few quarters and it was annualizing extra stock-based comp around $25 million, $26 million. Can you tell us where the cuts will come and how meaningfully you plan to cut?

Is it people; is it spending on legal or technology; maybe just give us a sense of how you are going to get that SG&A about?

I think the short answer Alan is all of the above. I mean we have addressed it, the actions have been taking, so we revisited some initiatives on the IT side which are continuing, but at much more reduced levels, consistent with kind of where the economy is.

We took a look at our G&A structure and said “how do we think about the world next year and let’s make sure that we are just proactively rather than reactively” and we have reduced both contractors and a number of employee positions and not anything that somebody wants to do, but it’s the only responsible thing to do in an uncertain economy environment.

Okay and on your backlog, how much of your backlog includes a full-year of Verizon for this coming year. Just give us a sense of what’s included there; is it just included one quarter for the calendar?

The Verizon work goes through the end of ‘09 and so the reasonable estimates are included in that backlog. As we’ve talked about before Alan is, as the percentage of the business that has been cable installation services has increased, the backlog is going to have a seasonal springing effect when we go into the January quarter.

Just because as we renew these contracts, many of which we’ve had for 15, 20 years, that backlog will comeback through.

Okay is the bidding environment getting tougher in general, because your competitors are trying just to get work in to cover overhead?

We have not seen that yet, that doesn’t mean that it will happen, because it has happened before, we haven’t seen it. I think what’s different about this environment is that there is particularly for smaller private companies, very little access to capital.

Some of the traditional equipment financing companies have had pulled out of the market; I think banks are being tighter about lending standards and quite honestly it would be difficult for somebody to meaningfully step up and grow their business privately in the current credit climate. Now that may improve, obviously that’s what the government would like to have happen, but right now I think it would be difficult to do that and so we think that with our access to capital that is a real advantage.

Can you remind us how much is left on the stock buyback as of today let’s say.

About $20 million Alan.

Just one follow-up; how many shares are outstanding now or at the end of the quarter?

I think it’s about 39.3 John, it should be in the press release, that was basic and Drew, what was the further delay in it.

The total outstanding John was the 39,366.

Okay, that’s just not applicable; that was the actual outstanding at the end of the quarter.

That’s correct.

Well we thank everybody for attending our conference call and we’ll speak to you in the last week of February for our second quarter earnings. Thank you.