Steven Nielsen - President and CEO Rick Vilsoet - VP and General Counsel Drew DeFerrari - SVP and CFO.

Simon Leopold - Raymond James Alex Rygiel - FB Adam Thalhimer - BB&T Capital Markets John Rogers - D.A. Davidson Noelle Dilts - Stifel Jennifer Fritz - Wells Fargo Christian Schwab - Craig-Hallum Capital Group Alan Mitrani - Sylvan Lake Asset Management.

Ladies and gentlemen, thank you for standing by. Welcome to the Dycom Results Conference Call. At this time all participants are in a listen-only mode, later we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions). I would now like to turn the conference over to Dycom's President and CEO Mr.

Steven Nielsen. Please go ahead..

Thank you Scott. Good morning everyone. I would like to thank you for attending this conference call to review our second quarter fiscal 2015 results. During the call, we will be referring to a slide presentation, which can be found on our Web site, www.dycomind.com under the heading Events.

Relevant slides will be identified by number throughout our presentation. Going to Slide 2, 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..

Thank you Steve. Referring to Slide 3, except for historical information, the statements made by Company management during this call may be 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 relating 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 26, 2014 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 second quarter results.

As you review our results please note that we presented adjusted EBITDA, and certain revenue amounts excluding revenues from subsidiaries acquired during the fourth quarter of fiscal 2014, and the first quarter of fiscal 2015 and revenues from stimulus funded projects, all of which are non-GAAP financial measures in our release and comments.

See Slides 13 through 15 for a reconciliation of non-GAAP measures to GAAP measures. Revenue increased significantly year-over-year to $441.1 million, an increase of 12.9%. This quarter was impacted by better than expected winter weather, as well as expanding revenues from customers deploying 1 gigabit wireline networks.

These factors offset a decline and work for real customers [ph] receiving stimulus funding. Gross margins increased 324 basis points as a percentage of revenue, reflecting a better mix of work types and generally improved operating performance, while general and administrative expenses improved year-over-year decreasing 39 basis points.

All of these factors produced adjusted EBITDA of $47.6 million or 10.8% of revenue and net income of $0.27 per share, compared to a net loss of $0.09 in the year ago quarter. Liquidity was solid in the quarter with cash and availability under our current credit facility totaling $195 million.

And finally during the quarter we repurchased 488,768 shares of our common stock at an average price of $35.08 per share or $17.1 million. Now we will update our views of a significant and unprecedented industry and market driver which is impacting our business and outlook.

Going to Slide 5, today a number of major industry participants are deploying significant wireline networks across broad sections of the country. They now believe that newly deployed networks should be designed to provision bandwidth enabling 1 gigabit speeds to individual consumers.

These industry developments are producing opportunities across a broad array of our existing customers, which in aggregate are unprecedented for the industry. Currently, we are providing engineering and design in aerial and underground construction services for 1 gigabit deployments.

These services are being provided across the country in 17 major metropolitan areas to a number of customers. Revenues and opportunities driven by this new industry standard accelerated during the second quarter of 2015. Customer spending modulations have diminished. As network strategies have firmed, timing uncertainty has receded.

We remain confident that our competitively unparalleled scale and market share position us well to deliver valuable service to our customers for those opportunities which have the highest likelihood of benefiting our shareholders.

Now moving to Slide 6, during the quarter we experienced the effects of an overall industry environment, which showed clear signs of improvement. Organic revenue grew 10.5% while revenue excluding services provided for stimulus funded projects grew organically at a rate of 13.8%.

Our top five customers combined produced 60.5% of revenue, increasing 11.4% organically while all other customers increased 9.1% organically. AT&T was our largest customer at 22% of total revenue or $97 million. AT&T grew 26.6% organically year-over-year. Wireline services grew organically for the eight consecutive quarter.

Revenue from CenturyLink was $61.8 million or 14% of revenue. CenturyLink grew 4% organically. Revenue from Comcast was $58 million or 13.1% of revenue. Comcast was our third largest customer and grew organically 22.6%. Verizon was Dycom's fourth largest customer for the quarter at 6.3% of revenue or $27.8 million.

Revenue from Time Warner Cable was $22.2 million or 5% of revenue. It was our fifth largest customer. Going to Slide 7, backlog at the end of the second quarter was $2.986 billion versus $2.359 billion at the end of the first quarter of 2015, an increase of approximately $627 million.

Of this backlog, approximately $1.564 billion is expected to be completed in the next 12 months. Both backlog calculations reflect solid performance as we continue to book new work and renew existing work. We anticipate substantial future opportunities across a broad array of our customers.

For Verizon we secured or renewed construction and maintenance agreements in Massachusetts, Rhode Island, Pennsylvania, Maryland, and Florida. With CenturyLink, we secured or renewed construction and maintenance agreements for Wisconsin, Pennsylvania, Arkansas, and Alabama.

From Comcast we received construction services agreement renewals for Connecticut, New Jersey, Maryland, and Virginia. With AT&T we secured construction services agreements in Georgia and Florida. And finally we secured construction services from Windstream for Kentucky, Oklahoma, New Mexico, Mississippi, Alabama, and Florida.

Headcount increased during the quarter to 10,824. Now I will turn the call over to Drew for his financial review and outlook..

Thanks Steve, and good morning everyone. Going to Slide 8, contract revenues for Q2 of 2015 were $441.1 million and organic growth was at 10.5%, reflecting growth from several key customers offset by declines from rural customers on stimulus projects.

Businesses acquired in the first quarter of 2015 and the fourth quarter of 2014 contributed in aggregate $9.5 million of revenue in the current period. Gross margins increased 324 basis points with a better mix of work types, lower fuel prices and improved productivity with more favorable weather compared to Q2'14. G&A decreased 39 basis points.

Total G&A expense reflects our scale and an increase in performance based compensation. Adjusted EBITDA was at 10.8% of revenue or $47.6 million, compared to 7.2% or $28.2 million in the year ago period. The strength of performance this quarter resulted in earnings per share of $0.27 compared to a $0.09 loss per share in Q214.

Turning to Slide 9, our cash flows and balance sheet continue to reflect the strength of our business and our liquidity is at $195 million with cash on hand and availability on our credit agreement. Operating cash flows of $72.4 million reflects solid earnings and changes in working capital.

Capital expenditures net of disposals were $18.4 million and gross CapEx was approximately $20.7 million. On our credit facility, we paid down debt by approximately $33.3 million. During the quarter we spent $17.1 million to repurchase 488,768 shares of our common stock at an average price of $35.08 per share.

Lastly our Board of Directors has authorized $40 million for share repurchases over the next 18 months. Now going to our outlook on Slide 10, each year our third quarter is impacted by seasonality and winter weather patterns. As we look ahead to Q3 we anticipate revenues which range from $455 million to $475 million.

We expect adverse weather conditions in the beginning of Q3'15, network investments by several large customers and lower revenues from rural customers on stimulus projects as the program nears completion. Gross margin percentage is expected to expand from the Q3'14 results despite the adverse weather experienced so far this quarter.

Gross margin expectations reflect an improving mix of growth opportunities and lower fuel prices compared to Q3'14. Total G&A costs are expected to range from 9.2% to 9.5% of revenue, reflecting our scale and higher performance based compensation, including share based award expense.

Depreciation and amortization on a combined basis is expected to range from $23.3 million to $23.8 million. Interest expense is expected at approximately $6.7 million, other income from asset sales is expected to range from $2.3 million to $2.6 million, taxes are expected to continue near a 39.5% effective rate during fiscal 2015.

The applicable factors are expected to generate an adjusted EBITDA margin percentage which expands from the Q3'14 results and earnings which are currently expected to range from $0.33 to $0.40 per diluted share. We expect approximately 35 million diluted shares during Q3'15 with shares gradually increasing in subsequent quarters.

Now going to Slide 11, looking ahead to Q4 of fiscal 2015, our expectations currently reflect continued industry trends of network investments by several large customers and low revenue from stimulus projects.

These factors are expected to result in fourth quarter revenue percentage growth of mid-single digit to low double-digits compared to Q4'14, including revenues of recently acquired companies. As we look to our Q4'15 we expect margins to increase over the Q4'14 result.

We expect G&A expense to remain in line as a percentage of revenue year-over-year and to include non-cash stock based compensation of approximately $3.3 million. Adjusted EBITDA margin percentage is currently expected to increase from Q4'14.

Other factors influencing results include depreciation and amortization on a combined basis which is expected to range from $23.7 million to $24.2 million, interest expense of approximately $6.7 million and other income from asset sales which ranges from $1.6 million to $2.1 million. Now I will turn the call back to Steve..

Thanks Drew. Moving to Slide 12, within an improving economy we experienced the effects of a solid industry environment and capitalized on our significant strengths. First and foremost we maintained strong customer relationships throughout our markets. We continue to win projects and extend contracts at contracted 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 are transitioning to fiber-to-the-home deployments, while others are beginning to provision video over their fiber-to-the-node architectures. 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 and new build opportunities are expanding. New projects resulting from the Connect America fund are deploying fiber deeper into rural networks. More are expected as new multi-year opportunities are about to emerge.

Wireless are upgrading to 4G technologies creating growth opportunities in the near to intermediate term as well as increasing capacity where 4G technologies are already deployed. 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 [indiscernible] to multi-year capital spending initiatives, which in some cases are meaningfully accelerating and expanding in scope.

We remain confident in our strategies and prospects for our Company, the capabilities of our dedicated employees and the experience of our management team as we grow our business in capitalization. Now Scott, we will open the call for questions..

[Operator Instructions]. And first we'll go to Simon Leopold with Raymond James. Please go ahead..

I want to get some housekeeping out of the way first.

If you could just give us the segment breakdowns between cable, Telco, utility as well as ground out your top 10 customer list as you usually do?.

Simon, this is Drew. From a customer perspective Windstream was No. 6 at 4.8% of revenue, Charter was No. 7 at 3.4% of revenue, Corning was No. 8 at 2.9% of revenue, customer No. 9 was at 2.1% of revenue. This is for customers who requested that not identify them by name, and Parsons Corporation was N0. 10 at 1.2% of revenue.

The customer split was Telco at 65.4%, cable at 23.9%. The underground facility work was at 6.2% and the all other was 4.6%..

And then in terms of -- I guess my bigger picture question is I certainly appreciate that your business is not strictly linked to top rate or CapEx.

But I'd like to get a better understanding of what's going on to drive your growth in terms of the relationship to capital spending, maybe more specifically are we seeing more dollars going toward the labor component of the capital budgets or are we seeing you gaining market share from the operators workforce or are you gaining shares from competitors.

Can you help us connect the dots on that?.

I think Simon, we've got broad growth. So it’s a little bit of all of those things that you identified. Clearly with the emphasis on gigabit connections, as well as the beginning for some customers of more aggressive deployments of fiber to the node that's video capable, we're seeing good opportunities in the wireline side of our business for Telcos.

We’re also seeing good growth with Comcast. Comcast as an example, raised their expected capital intensity yesterday which depending on your numbers is a $500 million or $600 million increase, while I think the street was working for a decline.

So certainly we're seeing a good alignment between what our customers strategies are around wireline and the services that we provide. We certainly had a good bookings quarter including footprint expansion. So we have been gaining some share. There has been some outsourcing.

I think that’s always occur somewhat over time and so I think it's a combination opportunity in total is expanding in areas where we're most relevant to our customers. We're seeing some market share growth and we're seeing as always, a little bit of incremental outsourcing..

And how are you thinking about the spending patterns from your top cable TV customers in light of the pending acquisition consolidation among Charter, Time Warner and Comcast.

Do you see that as affecting your business and do you think there might be a little bit of a slowdown if at all around the time the deal closes assuming it does?.

Simon, we grew at 22% with Comcast and they raised the capital budget. So it seems not likely that they're going slowdown soon..

What about the right after the deal closes? Do you think that'd effect your business?.

Comcast mentioned on a prior call and I think there is been some other industry commentary that in conjunction with mergers like this it's not unusual in that industry for there to be some integration CapEx around standardization of the networks and we have helped customer with that kind of activity before. So I would not expect to slowdown..

Our next question will to Alex Rygiel with FBR. Please go ahead..

Total backlog up 39% year-over-year, 12 month backlog up 31% year over year.

What was the organic growth in those two data points?.

We didn’t acquire any backlog during the quarter Alex. So it was all organic..

Okay. So in total, total backlog was up $627 million sequentially.

What are some of the larger components of that growth? Are there already specific projects for maybe new entrants that were layered into that or any more detail that you can be [indiscernible]?.

If you look at the slide we provided, we certainly had a big renewal and footprint expansion with Horizon. It's a six year arrangement. We had a number of other new contracts that were either footprint expansions or expansion in the services that we provided, some that are cap related.

We just had a solid bookings quarter based on pretty high activity levels at least for us in the industry across a number of customers..

And obviously lastly margins across different customer segments are little different.

Is there any way to characterize whether or not your backlog has -- the mix has shifted towards possibly cable and new entrants at a little bit faster rate than more traditional telcos?.

I don’t know that I would think about it that way Alex. We certainly have a little bit better weather this quarter and we certainly have more aerial construction going on, particularly around gigabit initiatives, and the good news about aerial construction is irrespective of cold and snowy weather, it's less affected.

It is effected but it's less affected than underground construction. And so when we have been through other times when there was a higher aerial content, that's just been able to bring up margins in the second quarter which obviously helped throughout the year. .

Our next question is from Adam Thalhimer with BB&T Capital Markets. Please go ahead..

Steve, you mentioned the Connect America fund.

How you would compare that to the 2009 broadband stimulus? And then I think you said associated with that there is potentially some new multiyear opportunities?.

And the Connect America fund, too, is still evolving although the FCC did publish its final order in December of 2014 and in the order they outlined a program where there will be subsidies offered to price cap Telcos over a six year period with a possibility to extend for a seventh year.

So when we talk about multiyear this business, six to seven anchors is definitely multiyear and long-term. There has been some interesting data around some illustrative outcomes of what our customers may be offered.

Doesn’t mean that they’ll accept it or accept it in all locations, but when you look at that number, which is just under 1.8 billion, we took a look at that and there is about $300 million where we're current master contractor and these were all per year. Now their number includes engineering and materials and other things.

There is another call it 10% of the 1.8, where we served a partial area that will be offered under these examples, some cap money.

And then if you look at kind of where we’re working for a customer in that state, it all comes together to where we have pretty good line of sight to about 50% coverage, although if you look at the top five stimulus recipients all of whom are significant customers of ours, they represent kind of 90% of the money. So it's significant opportunity.

Obviously the monies have not been finally awarded. There may be some of those that our customers don’t accept and then there is a secondary process where other market participants may be offered that money, but it’s a lot of work..

Okay and then in the 17 1 gigabyte cities where you working, where are you in that build? How long does it take to build 1 gigabit in a city? I'm just curious of the kind of visibility around that?.

Multiple years, Adam..

So the fact that you have 17, we're still, still [indiscernible] two quarters ago.

Just in the 17 you probably have 10 quarters left or something?.

We’re trying -- the reason we’re calling out the number is we’ve made some statements that we think this is a broad industry development covering wide geographic areas and so we try to support that with some statistics from our business. We’re not everywhere.

So there is other activity in the industry besides what we’re doing, but I think it’s fair to say we’ve got a broader exposure to it than anybody where we’re aware of..

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

This is Sean on for Tahira today.

So this has kind of been discussed in the Q&A but I'd just like to get an understanding, when you’re looking at your growth going forward what percent of that growth is sort of expected to come from the regional type carriers versus the larger guys? I know you had just highlighted Verizon and Comcast, but do those cases you referenced -- where spending initiatives are accelerating and expanding -- do they apply to one group more so than the other?.

No, I think this a pretty broadly based opportunity. So if you look at our top five customers and clearly we did not grow with Verizon this quarter, but we will going forward with the new footprint expansion. If you look at our top five customers and then the next five, we see growth opportunities with a majority of them..

And I guess just as a follow-up, is there a difference in your competitive positioning or market position with the regional guys versus the big guys? And also I’d love to just get your thoughts if you have any thoughts on the Verizon and Frontier deal for those assets in Texas, California and Florida and if there's any implication on your business?.

So I think we’ve got good customer relationships throughout the industry. I wouldn’t characterize them any differently across regional or rural providers versus larger carriers. So I'm not sure that we would think about it that way.

With respect to Verizon and Frontier, we certainly provide services in some of the areas that will be spun out to Frontier, but we worked for Frontier. We've been through lots of mergers and spin outs and consolidations, and we don’t see anything particularly troublesome about this one.

I think in fact typically following these kind of mergers, new owner as I should be is excited about some opportunities that may present some sales to improved networks and improved competitive positioning. So I think it’s always been a good thing..

Our next question is from John Rogers with D.A. Davidson. Please go ahead..

A couple of questions. First of all weather is always tough but you’ve mentioned it for the second quarter and then the start of the third quarter.

Any sense Steve that you pulled any work forward into the quarter that just reported and especially out of the seasonally higher quarters?.

John I don't get the sense from talking to the field people that we pulled anything ahead. There is plenty to do. Our customers would like to us do it as fast as we can. So I don't think that's the case. I think clearly we've had some -- a little bit more adverse weather in February than we did in January.

And so we try to reflect that in our view on the April quarter..

And then just going back to the 17 cities where you're doing gigabit projects. I realize they probably are all very different.

But are you the exclusive provider in those or is it two players in each of those markets? And then secondly, roughly what's the typical value of the gigabit build out for contractors such as yourself? And then lastly how many customers are represented by those 17 cities?.

John we'll start with the last one. So right now those cities are focused around three customers. Although there is other fiber-to-the-home, that's not necessarily gigabit, although eventually it will be capable of that, that we're doing for a number of other customers.

In terms of kind of -- when you have three customers across that broader geography there are some geographies where we're doing the entirety of the work for construction or entirety of the work for engineering or some combination thereof. There's others where due to customer choice it's split up.

But once again it's, we think the size of the opportunity is to look at the industry consensus and trend. The number of cities is to show the breadth of it, not necessarily to help you all figure out exactly what the magnitude of the opportunity is for us, other than to say it's fairly large..

Yes. Because it sounds as if we're going to get more of these expansions over the next couple of years. I'm just trying to….

Quite honestly John, there will be a period of time where we don't need to count cities anymore, because it will just -- the way networks are built, and you'll see it in the organic growth and the bookings..

And then lastly Steve, just as a follow up, the employee count, I just noticed you're up by about 4% -- 3% or 4% year-over-year, revenues obviously running up higher than that.

Is there a difference in the model, in that people are more productive or you just have to catch up on the hiring?.

John I think it's really a question of mix, particularly at the startup of some of these programs we're going to use more subcontractor content. And typically construction, we would use a few more subcontractors than they would in other parts of our business that are more technician based. And so I think that's the way I would think about it.

Certainly we are -- as we indicated, we're spending money on CapEx and we're going to grow headcount, but we're going to do at with the right mix appropriate to the type of work that we're mobilizing for..

And next we'll go to Noelle Dilts with Stifel. Please go ahead..

I'm going to go back to John's first question and ask it I guess in slightly a different way. But obviously you blew your guidance out of the water.

If you had to look at that at the performance in the quarter and say relative to our guidance what really drove that out performance? Would you say it was more weather or just more acceleration in the gigabit work and in the market?.

Certainly weather had a role, but I think what I said earlier Noelle is that there was certainly a shift in the type of work we were doing to more aerial construction, some more fiber slicing, things that are less impacted. Regardless of what level of adverse weather we have, they are always less impacted than underground construction.

And so we just got a benefit from that change of mix..

And the aerial work was maybe more higher than you expected?.

I think as we talked about earlier in the comments, we've talked about now for eight, 10 months, that as customers were firming up their network strategies, there could be some modulations in demand as those strategies have firmed, there is less uncertainty and more intensity in the business about getting things done and it's kind of hard to call where that happens but we clearly saw more intensity around deployments as these architectures have settled down and as customers always could change their minds, start to talk to us about multiple year type build plans..

And then thought margins in the quarter both of gross and operating were impressive. We've talked about this aspect of the shift towards the aerial business. But aside from that would you say you're starting to see some of the benefit from just kind of efficiency and mix even leverage that you've been talking about over the last few quarters.

And you mention that MSA price. MSAs are being renewed at nice pricing.

But could you just talk about what you're seeing in terms of pricing in the market and if you've seen a meaningful improvement?.

So Noelle we only have two comments on pricing. In recessions when times are tough, if we expect something, it's acceptable. And then when times gets better it becomes attractive. And beyond that we're just not going to comment for competitive purposes. But I would say that we're growing resources.

To grow resources and do it effectively and quickly you have to have good returns on capital. And so customers understand that to get the sizable initiatives kicked off, you have to have acceptable returns.

And I do think that certainly when you get busy, the leverage that you have in the business, offset in part by the tension with making sure you keep everything under control as you grow is something we've been through before. So I think we've got a pretty good understanding on how to manage that..

Our next question comes is from Jennifer Fritz with Wells Fargo. Please go ahead. .

Two questions if I may. I'm just toeing up on Noelle's comment about the guidance. At the time you gave the guidance last quarter it was clear -- there was lot of questions about your largest customer and the regulatory over hang that might been seen.

Can you comment on -- not specifically about what you're seeing but have you been pleasantly surprised or put another way the regulatory over hang doesn’t seem to affecting the spends of your largest customer and that’s where since other companies including American Tower yesterday specifically called out a lack of spending there.

So I'm just curious on that point. And then separately on the -- I know most of your work is focused toward wireline but we're hearing a lot more on the gag [ph] side, particularly from Verizon. And with the extension of that agreement, I'm just wondering if that could also be another opportunity for you since fiber clearly plays a large part in that.

Thanks..

So with respect to kind of generally the outlook, when we've spoken in November there clearly have been a CapEx cut. And our view, we don’t serve a wide footprint with this customer, we see wireless as being down.

We see the areas that we serve then on the wireline side being aligned with some pretty significant activities, and so once again it just seemed to be blessed to be aligned in those areas where they have some priorities and we were fortunate to be able to help them with those priorities.

So I don’t see anything more than that with respect to some kind of regulatory overhang. We seem to be pretty busy with them. And then with respect, the new work with Verizon and the renewals is in their traditional wireline business.

We certainly do, do some wireless business for them and we have seen some daze [ph] opportunities and we think although we didn’t call them out, we certainly that is developing opportunity for us with the fiber backhaul as well as in our wireless business the opportunity to actually hang the small cells..

Our next question is from Christian Schwab with Craig-Hallum Capital Group. Please go ahead. .

What percentage of the quarter's bookings were for one gig related type of work? I guess from the dialogue earlier it seems like it might have been more meaningful than I assumed..

Christian, we generally not characterize below next 12 months in total backlog, the pieces. We do have competitors. I would say it's a growing piece and it's significant.

But we did have broad bookings across cable cap related spending in traditional wireline, which in the traditional wireline does include fiber-to-the-premise for example for Verizon where we've been doing it for more than 10 years.

So we're providing numbers to give some confidence around the trend on one gig, but I think this time next year it will just be kind of the basis of the business and that’s something to think about separately. .

And then just a follow on the previous question and some of your prepared comments about timing uncertainty has receded. As we think about your largest customer spending initiatives in this area, I know you said earlier that you are aligned with what today is priority spending and is probably reflected of course in your businesses as well as backlog.

Is there another latter step? It seems like the whole world wants to just discuss their retaliation and net neutrality is another potential latter step up in bookings when they go forward or should we not be thinking about that..

I think as we talked about earlier, this Connect America fund, as rules come out that’s a pretty substantial opportunity, hard to handicap until it's finalized and our customers make their decisions about what they will accept. But that’s clearly a level of activity in rural America that's not built into our current business.

We’re encouraged that Comcast is comfortable, that they have good returning investments so that they can grow their CapEx both intensity and at an absolute level.

And I think that with respect to doing fiber of the whole more broadly, I think all of our customers have expressed that they are positive about that as a strategy in their business and I think we’re pretty early in that. So clearly regulatory uncertainty doesn’t help.

But this good technology it’s competitively helpful and so we’re optimistic that the regulatory overhang doesn’t -- isn't hurtful..

And we’ll go Alan Mitrani with Sylvan Lake Asset Management. Please go ahead..

Can you tell us what the wireless revenues were in the quarter? You may have said it. I might have missed it..

Just under a 10% of total..

Okay and for the rest of the year do you think it’s kind of the thing will stay at this kind of level or shrink?.

I think the growth outlook in the rest of the business for this year not perhaps intermediate or long-term but for this year, I think is less robust than the rest of the business..

Okay.

Also can you talk about in the next 12, 18, 24 months, call 24 months, do you think you’re going to have faster revenue growth or margin expense? Where should we see the lift coming in your mind as this Connect America and as we get out of the people sort of modulating CapEx?.

I think Alan just as an overall approach to this, we want to get not only bigger but better. And so we will be careful to pick the spots where we commit resources to those areas that we are most comfortable that we have productivity advantages. And so hopefully margins will grow somewhat faster than revenues.

That’s historically how we approached it, particularly when we've made significant capital investments we want to make sure we get good returns..

And one last question, it seems like a lot of the work that’s been announced are potential cities where Google plans to go in -- at least try to push some incumbents. All seem to be playing into your traditional historical markets.

Can you just remind us the different between working for a customer where your -- or a region where you already have a significant operation as opposed to working on let's say a startup type of project where there might be a ramp? Just sometimes in terms of how the revenues or margins might look over a period of time?.

So I think two things Alan. When we closed the Quanta transaction just over two years ago and have done some small tuck-in acquisitions since, we have a much broader footprint. The numbers I provided on the cap I think are frankly kind of from a coverage perspective pretty unparalleled by anybody else in the industry.

So we have broader coverage than the question might assume. That being said you clearly have to take care of the customers and the geographies where you’ve been for long period of time and that’s always something where you have existing facilities, you have existing management.

You’re well known to the permitting authorities and it’s just good business for us when we get busy or insight in existing geographic footprint. We a have very large footprint. Every once in a while we'll grow it and we’re comfortable with that too..

And we do have a follow-up from Alex Rygiel. Please go ahead..

My have questions have been answered. Thank you..

And we’ll go to Jennifer Fritz. Please go ahead..

One follow-up. I think you’ve touched on this but I wanted to hone on it a little bit more. It seems like of your top five customers, there is one particularly who hasn’t announced like true 1 gig quest.

Based on your conversations just in general and with Comcast announcement yesterday about higher CapEx as percentage of cable revenue, are you at least sensing that the discussion -- that that is where the industry is going and that many of your customers realize this, that the 1 gig is kind of the new normal here?.

I think Jennifer just broadly; the cable industry at one of their large tradeshows last year talked about the gigasphere. Cox has announced gigabit initiatives in a number of cities and I think strategies are still evolving as to how broadly or how targeted that rollout would be.

But clearly GPON [ph] Technology has become the standard if you’re going to apply fiber the home. The new technology just pushes you to that bandwidth..

And we have a follow-up from John Rogers. Please go ahead..

Steve, just going back to your comments earlier, are you seeing opportunities for acquisitions with this market or you more intent on growing organically?.

We did a small acquisition in the fourth quarter of '14 to last summer, another acquisition in the first quarter of this year, a couple of very small tuck-ins this quarter. Certainly when there is good opportunities to extend relationships and hire good people at the right price, we're certainly interested.

Clearly at our size John the organic growth opportunity is what's significant. So you kind of look at this quarter's organic growth at call it round numbers, about $40 million, if you annualize that, it's probably the third largest provider in our industry.

And so certainly doing a good job on organic growth is going to be always of more value to shareholders than acquisitions. We'll do it when they make sense..

And specifically I guess seeing more along the wireless or DAS market, which are slower right now. Do you see this an opportunity to maybe….

There are certainly some properties in wireless for sale, kind of I think reflecting some over capacity. Typically that's not the right environment for us to commit much capital, and I truly don't want to distract the organization from where the opportunities are to create a lot of value..

And with that we have no further question in queue..

Well we thank everybody for your time and attention and we look forward to speaking to you on our next quarterly call in May. Thank you..

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