HOLLYWOOD, Aug. 05, 2020 (GLOBE NEWSWIRE) -- NV5 Global, Inc. (Nasdaq: NVEE) ("NV5" or the "Company"), a provider of professional and technical engineering, geospatial, and consulting solutions, today reported financial results for the second quarter ended June 27, 2020.
In the second quarter, Gross Revenues increased 27% and Gross Revenues, exclusive of sub-consultant services and other direct costs ("Net Revenues"), increased 29%. "We are pleased with our second quarter performance, which exceeded analyst expectations in both gross revenues and adjusted earnings per share, while generating strong cash flows from operations and adjusted EBITDA, despite the impacts of the COVID-19 pandemic. We also secured a number of large contracts with utilities, departments of transportation, and the municipal sector in the second quarter and entered into an agreement to acquire Mediatech Design Group, which is expected to increase our technology design services in the Middle East and Southeast Asia," said Dickerson Wright, PE, Chairman and CEO of NV5.
Second Quarter 2020 Financial Highlights
- Gross Revenues for the second quarter of 2020 were $162.7 million compared to $128.0 million in the second quarter of 2019.
- Net Revenues for the quarter were $128.5 million compared to $99.5 million in the second quarter of 2019.
- Gross Revenues for the quarter exceeded analyst consensus expectations by 8%.
- Net income for the second quarter of 2020 was $4.5 million compared to $8.8 million in the second quarter of 2019 (second quarter of 2020 included $3.9 million of additional interest expense, $4.4 million of additional intangible amortization expense, and a higher effective income tax rate compared to second quarter of 2019).
- Adjusted EBITDA for the second quarter of 2020, excluding stock compensation and acquisition-related costs, was $26.9 million, an increase from $18.4 million in the second quarter of 2019.
- GAAP EPS was $0.36 per share in the second quarter of 2020.
- Adjusted EPS in the second quarter of 2020 was $0.93 per share, exceeding analyst consensus expectations of $0.59 per share.
- Cash flows from operations for the second quarter of 2020 were $37.1 million compared to $1.1 million in the second quarter of 2019.
Six Months Ended June 27, 2020 Financial Highlights
- Gross Revenues for the six months ended June 27, 2020 were $328.2 million compared to $245.3 million in the six months ended June 29, 2019.
- Net Revenues for the six months ended June 27, 2020 were $258.1 million compared to $190.2 million in the six months ended June 29, 2019.
- Net income for the six months ended June 27, 2020 was $8.7 million compared to $14.3 million in the six months ended June 29, 2019 (six months ended June 27, 2020 included $7.4 million of additional interest expense, $7.8 million of additional intangible amortization expense, and a higher effective income tax rate compared to six months ended June 29, 2019).
- Adjusted EBITDA for the six months ended June 27, 2020, excluding stock compensation and acquisition-related costs, was $51.1 million, an increase from $33.8 million in the six months ended June 29, 2019.
- GAAP EPS was $0.69 per share in the six months ended June 27, 2020.
- Adjusted EPS in the six months ended June 27, 2020 was $1.77 per share.
- Cash flows from operations for the six months ended June 27, 2020 were $50.7 million compared to $17.4 million in the six months ended June 29, 2019.
Use of Non-GAAP Financial Measures
Net Revenues are not a measure of financial performance under U.S. generally accepted accounting principles (“GAAP”). Gross Revenues include sub-consultant costs and other direct costs, which are generally pass-through costs. Furthermore, Gross Revenues eliminates intercompany revenues where the Company performed the service in lieu of utilizing third-party sub-consultants. The Company believes that Net Revenues, which is a non-GAAP financial measure commonly used in our industry, provides a meaningful perspective on our business results. A reconciliation of Gross Revenues as reported in accordance with GAAP to Net Revenues is provided at the end of this news release.
Earnings before interest, taxes, depreciation, and amortization (“EBITDA”) is not a measure of financial performance under GAAP. Adjusted EBITDA reflects adjustments to EBITDA to eliminate stock-based compensation expense and acquisition-related costs. Management believes Adjusted EBITDA, in addition to operating profit, Net Income, and other GAAP measures, is a useful indicator of our financial and operating performance and our ability to generate cash flows from operations that are available for taxes, capital expenditures, and debt service. A reconciliation of Net Income, as reported in accordance with GAAP, to Adjusted EBITDA is provided at the end of this news release.
Adjusted earnings per diluted share (“Adjusted EPS”) is not a measure of financial performance under GAAP. Adjusted EPS reflects adjustments to reported diluted earnings per share (“GAAP EPS”) to eliminate amortization expense of intangible assets from acquisitions, net of tax benefits, and acquisition-related costs. As we continue our acquisition strategy, the growth in Adjusted EPS will likely increase at a greater rate than GAAP EPS. A reconciliation of GAAP EPS to Adjusted EPS is provided at the end of this news release.
Our definition of Net Revenues, Adjusted EBITDA, and Adjusted EPS may differ from other companies reporting similarly named measures. These measures should be considered in addition to, and not as a substitute for, or superior to, other measures of financial performance prepared in accordance with GAAP, such as Gross Revenues, Net Income, and Diluted Earnings per Share.
Conference Call
NV5 will host a conference call to discuss its second quarter 2020 financial results at 4:30 p.m. (Eastern Time) on August 5, 2020. The accompanying presentation for the call is available by visiting http://ir.nv5.com.
| Date: | Wednesday, August 5, 2020 |
| Time: | 4:30 p.m. Eastern |
| Toll-free dial-in number: | +1 844-348-6875 |
| International dial-in number: | +1 509-844-0152 |
| Conference ID: | 8279137 |
| Webcast: | http://ir.nv5.com |
Please dial-in at least 5-10 minutes prior to the start time to allow the operator to log your name and connect you to the conference.
The conference call will be webcast live and available for replay via the “Investors” section of the NV5 website.
About NV5
NV5 Global, Inc. (NASDAQ: NVEE) is a provider of professional and technical engineering, geospatial, and consulting solutions ranked #27 in the Engineering News-Record Top 500 Design Firms list. NV5 serves public and private sector clients in the infrastructure, utility services, construction, real estate, and environmental markets. NV5 primarily focuses on five business verticals: construction quality assurance, infrastructure engineering and support services, utility services, program management, and environmental solutions, and delivers geospatial services through its subsidiary Quantum Spatial, Inc., the largest full-service geospatial solutions provider in North America. The Company operates out of more than 100 locations worldwide. For additional information, please visit the Company’s website at www.NV5.com. Also visit the Company on Twitter, LinkedIn, Facebook, and Vimeo.
Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. The Company cautions that these statements are qualified by important factors that could cause actual results to differ materially from those reflected by the forward-looking statements contained in this news release and on the conference call. Such factors include: (a) changes in demand from the local and state government and private clients that we serve; (b) general economic conditions, nationally and globally, and their effect on the market for our services; (c) competitive pressures and trends in our industry and our ability to successfully compete with our competitors; (d) changes in laws, regulations, or policies; and (e) the “Risk Factors” set forth in the Company’s most recent SEC filings. All forward-looking statements are based on information available to the Company on the date hereof, and the Company assumes no obligation to update such statements, except as required by law.
Investor Relations Contact
NV5 Global, Inc.
Jack Cochran
Vice President, Marketing & Investor Relations
Tel: +1-954-637-8048
Email: ir@nv5.com
Source: NV5 Global, Inc.
NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share data)
| June 27, 2020 | December 28, 2019 | ||||
| Assets | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 65,212 | $ | 31,825 | |
| Billed receivables, net | 131,255 | 131,041 | |||
| Unbilled receivables, net | 80,269 | 79,428 | |||
| Prepaid expenses and other current assets | 8,435 | 8,906 | |||
| Total current assets | 285,171 | 251,200 | |||
| Property and equipment, net | 29,404 | 25,733 | |||
| Right-of-use lease assets, net | 45,175 | 46,313 | |||
| Intangible assets, net | 191,126 | 255,961 | |||
| Goodwill | 343,170 | 309,216 | |||
| Other assets | 3,069 | 4,714 | |||
| Total Assets | $ | 897,115 | $ | 893,137 | |
| Liabilities and Stockholders’ Equity | |||||
| Current liabilities: | |||||
| Accounts payable | $ | 36,741 | $ | 36,116 | |
| Accrued liabilities | 49,797 | 47,432 | |||
| Income taxes payable | 613 | — | |||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 8,544 | 3,303 | |||
| Client deposits | 286 | 221 | |||
| Current portion of contingent consideration | 1,079 | 1,954 | |||
| Current portion of notes payable and other obligations | 22,176 | 25,332 | |||
| Total current liabilities | 119,236 | 114,358 | |||
| Contingent consideration, less current portion | 1,733 | 2,048 | |||
| Other long-term liabilities | 37,181 | 34,573 | |||
| Notes payable and other obligations, less current portion | 326,020 | 332,854 | |||
| Deferred income tax liabilities, net | 40,575 | 53,341 | |||
| Total liabilities | 524,745 | 537,174 | |||
| Commitments and contingencies | |||||
| Stockholders’ equity: | |||||
| Preferred stock, $0.01 par value; 5,000,000 shares authorized, no shares issued and outstanding | — | — | |||
| Common stock, $0.01 par value; 45,000,000 shares authorized, 13,033,842 and 12,852,357 shares issued and outstanding as of June 27, 2020 and December 28, 2019, respectively | 130 | 129 | |||
| Additional paid-in capital | 258,902 | 251,187 | |||
| Retained earnings | 113,338 | 104,647 | |||
| Total stockholders’ equity | 372,370 | 355,963 | |||
| Total liabilities and stockholders’ equity | $ | 897,115 | $ | 893,137 | |
NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
(in thousands, except share data)
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | ||||||||||||
| Gross revenues | $ | 162,689 | $ | 127,974 | $ | 328,169 | $ | 245,309 | |||||||
| Direct costs: | |||||||||||||||
| Salaries and wages | 45,079 | 38,080 | 90,114 | 73,337 | |||||||||||
| Sub-consultant services | 25,244 | 20,044 | 52,670 | 36,996 | |||||||||||
| Other direct costs | 8,914 | 8,410 | 17,402 | 18,106 | |||||||||||
| Total direct costs | 79,237 | 66,534 | 160,186 | 128,439 | |||||||||||
| Gross Profit | 83,452 | 61,440 | 167,983 | 116,870 | |||||||||||
| Operating Expenses: | |||||||||||||||
| Salaries and wages, payroll taxes and benefits | 44,149 | 30,765 | 89,706 | 60,004 | |||||||||||
| General and administrative | 11,824 | 10,896 | 24,980 | 19,758 | |||||||||||
| Facilities and facilities related | 5,357 | 3,937 | 10,754 | 7,743 | |||||||||||
| Depreciation and amortization | 11,160 | 6,245 | 22,200 | 12,357 | |||||||||||
| Total operating expenses | 72,490 | 51,843 | 147,640 | 99,862 | |||||||||||
| Income from operations | 10,962 | 9,597 | 20,343 | 17,008 | |||||||||||
| Interest expense | (4,403 | ) | (457 | ) | (8,190 | ) | (808 | ) | |||||||
| Income before income tax expense | 6,559 | 9,140 | 12,153 | 16,200 | |||||||||||
| Income tax expense | (2,056 | ) | (346 | ) | (3,462 | ) | (1,863 | ) | |||||||
| Net Income and Comprehensive Income | $ | 4,503 | $ | 8,794 | $ | 8,691 | $ | 14,337 | |||||||
| Earnings per share: | |||||||||||||||
| Basic | $ | 0.37 | $ | 0.73 | $ | 0.71 | $ | 1.19 | |||||||
| Diluted | $ | 0.36 | $ | 0.70 | $ | 0.69 | $ | 1.15 | |||||||
| Weighted average common shares outstanding: | |||||||||||||||
| Basic | 12,308,965 | 12,106,066 | 12,271,221 | 12,033,906 | |||||||||||
| Diluted | 12,609,918 | 12,521,463 | 12,601,830 | 12,447,248 | |||||||||||
NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
| Six Months Ended | |||||||
| June 27, 2020 | June 29, 2019 | ||||||
| Cash Flows From Operating Activities: | |||||||
| Net income | $ | 8,691 | $ | 14,337 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 23,277 | 12,357 | |||||
| Non-cash lease expense | 4,307 | 4,251 | |||||
| Provision for doubtful accounts | 1,690 | 1,456 | |||||
| Stock-based compensation | 6,880 | 4,167 | |||||
| Change in fair value of contingent consideration | — | 49 | |||||
| Gain on disposals of property and equipment | (350 | ) | (48 | ) | |||
| Deferred income taxes | (869 | ) | 477 | ||||
| Amortization of debt issuance costs | 442 | — | |||||
| Changes in operating assets and liabilities, net of impact of acquisitions: | |||||||
| Billed receivables | (1,134 | ) | 5,511 | ||||
| Unbilled receivables | (2,286 | ) | (5,188 | ) | |||
| Prepaid expenses and other assets | 2,117 | (9,413 | ) | ||||
| Accounts payable | 138 | (3,816 | ) | ||||
| Accrued liabilities | 1,922 | 968 | |||||
| Income taxes payable | 613 | (2,338 | ) | ||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 5,241 | (5,383 | ) | ||||
| Deposits | 66 | 47 | |||||
| Net cash provided by operating activities | 50,745 | 17,434 | |||||
| Cash Flows From Investing Activities: | |||||||
| Cash paid for acquisitions (net of cash received from acquisitions) | — | (14,160 | ) | ||||
| Proceeds from sale of assets | 437 | — | |||||
| Purchase of property and equipment | (6,145 | ) | (1,626 | ) | |||
| Net cash used in investing activities | (5,708 | ) | (15,786 | ) | |||
| Cash Flows From Financing Activities: | |||||||
| Borrowings from Senior Credit Facility | — | 10,000 | |||||
| Payments on notes payable | (8,415 | ) | (6,738 | ) | |||
| Payments of contingent consideration | (913 | ) | (1,213 | ) | |||
| Payments of borrowings from Senior Credit Facility | (1,875 | ) | — | ||||
| Payments of debt issuance costs | (447 | ) | — | ||||
| Net cash (used in) provided by financing activities | (11,650 | ) | 2,049 | ||||
| Net increase in Cash and Cash Equivalents | 33,387 | 3,697 | |||||
| Cash and cash equivalents – beginning of period | 31,825 | 40,739 | |||||
| Cash and cash equivalents – end of period | $ | 65,212 | $ | 44,436 | |||
NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO COMPARABLE GAAP FINANCIAL MEASURES
(UNAUDITED)
(in thousands)
RECONCILIATION OF GROSS REVENUES TO NET REVENUES
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
| Gross Revenues - GAAP | $ | 162,689 | $ | 127,974 | $ | 328,169 | $ | 245,309 | ||||||||
| Less: | Sub-consultant services | (25,244 | ) | (20,044 | ) | (52,670 | ) | (36,996 | ) | |||||||
| Other direct costs | (8,914 | ) | (8,410 | ) | (17,402 | ) | (18,106 | ) | ||||||||
| Net Revenues | $ | 128,531 | $ | 99,520 | $ | 258,097 | $ | 190,207 | ||||||||
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
| Net Income | $ | 4,503 | $ | 8,794 | $ | 8,691 | $ | 14,337 | ||||||||
| Add: | Interest expense | 4,403 | 457 | 8,190 | 808 | |||||||||||
| Income tax expense | 2,056 | 346 | 3,462 | 1,863 | ||||||||||||
| Depreciation and Amortization | 12,237 | 6,245 | 23,277 | 12,357 | ||||||||||||
| Stock-based compensation | 3,501 | 2,369 | 6,880 | 4,167 | ||||||||||||
| Acquisition-related costs | 231 | 238 | 571 | 238 | ||||||||||||
| Adjusted EBITDA | $ | 26,931 | $ | 18,449 | $ | 51,071 | $ | 33,770 | ||||||||
RECONCILIATION OF GAAP EPS TO ADJUSTED EPS
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
| Net Income - per diluted share | $ | 0.36 | $ | 0.70 | $ | 0.69 | $ | 1.15 | ||||||||
| Per diluted share adjustments: | ||||||||||||||||
| Add: | Amortization expense of intangible assets and acquisition-related costs | 0.77 | 0.42 | 1.46 | 0.83 | |||||||||||
| Income tax expense | (0.20 | ) | (0.10 | ) | (0.38 | ) | (0.19 | ) | ||||||||
| Adjusted EPS | $ | 0.93 | $ | 1.02 | $ | 1.77 | $ | 1.79 | ||||||||