Dycom Industries, Inc. (DY) Accused of Failing to Disclose Permitting Uncertainties

According to the complaint against Dycom's officers and directors for alleged violations of the Securities Exchange Act of 1934 between November 20, 2017 and August 10, 2018, Dycom Industries, Inc. (DY) misled investors regarding its financial and operating results, the timing of permitting, and the impact of new large projects on gross margins. These misstatements caused Dycom's stock to increase. The truth came to light when Dycom disappointed investors on May 22, 2018, revealing that its gross margins were approximately 100 basis points below its expectations for the quarter because of the under-absorption of labor and field costs associated with its larger projects and uncertainties related to permitting issues. Months later, Dycom reaffirmed that its large projects were not ramping-up as expected and that Dycom's core business was in reality not as busy as previously disclosed. Since news of Dycom's troubles became public, Dycom's stock fell over 41% to close at $68.09 per share on August 13, 2018, and has yet to recover its value.

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