HOLLYWOOD, Fla., Nov. 02, 2023 (GLOBE NEWSWIRE) -- NV5 Global, Inc. (Nasdaq: NVEE) ("NV5" or the "Company"), a provider of technology, conformity assessment, consulting solutions, and software applications, today reported financial results for the third quarter ended September 30, 2023.
"NV5 delivered record revenues of $239 million in the third quarter of 2023, a 17% increase over the same period a year ago. Our geospatial business continued to build upon its strong performance in the first half of 2023 and we had strong performances by our clean energy, technology, data center, and international businesses. Our Red Technologies acquisition expanded our international footprint as we capitalized on the universal demand for data centers. The infrastructure business continues its acceleration throughout 2023, growing 6% compared to the second quarter of 2023 and 16% compared to the first quarter. We approach 2024 with a record backlog of $833 million and we are well-positioned to achieve our goal of a $1 billion revenue run rate by the end of next year." said Dickerson Wright, PE, Chairman and CEO of NV5.
Third Quarter 2023 Results
- Gross revenues in the third quarter of 2023 were $239.3 million compared to $204.1 million in the third quarter of 2022, a 17% increase.
- Positive trends in our organic growth.
- Gross profit in the third quarter of 2023 was $115.4 million compared to $99.9 million in the third quarter of 2022, a 16% increase.
- Net income in the third quarter of 2023 was $13.3 million compared to $16.1 million in the third quarter of 2022. Net income was impacted by increases in amortization from acquisitions, acquisition-related costs, interest expense, and income tax benefits, as well as lower margins in our LNG business, driven by project timing.
- Adjusted EBITDA in the third quarter of 2023 was $37.8 million compared to $36.0 million in the third quarter of 2022, a 5% increase. Adjusted EBITDA was impacted by lower margins in our LNG business, driven by project timing.
- GAAP EPS in the third quarter of 2023 was $0.86 per share compared to $1.05 per share in the third quarter of 2022. Diluted weighted average shares were 15,497,836 in the third quarter of 2023, compared to 15,301,545 in the third quarter of 2022.
- Adjusted EPS in the third quarter of 2023 was $1.51 per share compared to $1.50 per share in the third quarter of 2022. Diluted weighted average shares were 15,497,836 in the third quarter of 2023, compared to 15,301,545 in the third quarter of 2022.
Nine Months Ended September 30, 2023 Results
- Gross revenues for the nine months ended September 30, 2023 were $646.2 million compared to $597.0 million in the nine months ended October 1, 2022, an 8% increase.
- Gross profit for the nine months ended September 30, 2023 was $321.7 million compared to $293.0 million in the nine months ended October 1, 2022, a 10% increase.
- Net income for the nine months ended September 30, 2023 was $34.7 million compared to $42.0 million in the nine months ended October 1, 2022. Net income was impacted by increases in amortization from acquisitions, interest expense, and benefits from acquisition-related costs. Net income was also affected by lower margins in our LNG business, driven by project timing, and lower income from operations in our real estate transactional business.
- Adjusted EBITDA for the nine months ended September 30, 2023 was $100.5 million compared to $102.7 million in the nine months ended October 1, 2022. Adjusted EBITDA was impacted by lower margins in our LNG business, driven by project timing, and lower income from operations in our real estate business.
- GAAP EPS for the nine months ended September 30, 2023 was $2.24 per share compared to $2.75 per share in the nine months ended October 1, 2022. Diluted weighted average shares were 15,448,693 for the nine months ended September 30, 2023, compared to 15,242,453 in the nine months ended October 1, 2022.
- Adjusted EPS for the nine months ended September 30, 2023 was $3.67 per share compared to $3.99 per share in the nine months ended October 1, 2022. Diluted weighted average shares were 15,448,693 for the nine months ended September 30, 2023, compared to 15,242,453 in the nine months ended October 1, 2022.
Full-Year Guidance
- Gross revenues between $860 million and $868 million.
- GAAP EPS between $2.80 per share and $3.17 per share.
- Adjusted EPS between $4.79 per share and $5.16 per share.
Use of Non-GAAP Financial Measures; Comparability of Certain Measures
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 may 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 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 Net Income and Diluted Earnings per Share. In addition, when presenting forward-looking non-GAAP metrics, we are unable to provide quantitative reconciliations to the most closely correlated GAAP measure due to the uncertainty in the timing, amount or nature of any adjustments, which could be material in any period.
Conference Call
NV5 will host a conference call to discuss its third quarter 2023 financial results at 4:30 p.m. (Eastern Time) on November 2, 2023. The accompanying presentation for the call is available by visiting http://ir.nv5.com.
| Date: | Thursday, November 2, 2023 |
| Time: | 4:30 p.m. Eastern |
| Toll-free dial-in number: | +1 888-412-4117 |
| International dial-in number: | +1 646-960-0284 |
| Conference ID: | 6172299 |
| 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 technology, conformity assessment, and consulting solutions for public and private sector clients supporting sustainable infrastructure, utility, and building assets and systems. The Company focuses on multiple verticals: Construction quality assurance, infrastructure engineering, utility services, buildings & technology, environmental health sciences, and geospatial technology services to deliver innovative, sustainable solutions to complex issues and improve lives in our communities. NV5 operates out of more than 100 offices nationwide and internationally. For additional information, please visit the Company’s website at www.NV5.com. Also visit the Company on LinkedIn, Twitter, Facebook, and Instagram.
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) | ||||||
| September 30, 2023 | December 31, 2022 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 46,439 | $ | 38,541 | ||
| Billed receivables, net | 166,859 | 145,637 | ||||
| Unbilled receivables, net | 122,049 | 92,862 | ||||
| Prepaid expenses and other current assets | 14,239 | 13,636 | ||||
| Total current assets | 349,586 | 290,676 | ||||
| Property and equipment, net | 49,930 | 41,640 | ||||
| Right-of-use lease assets, net | 39,105 | 39,314 | ||||
| Intangible assets, net | 236,433 | 160,431 | ||||
| Goodwill | 527,030 | 400,957 | ||||
| Other assets | 3,881 | 2,705 | ||||
| Total Assets | $ | 1,205,965 | $ | 935,723 | ||
| Liabilities and Stockholders’ Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 67,144 | $ | 57,771 | ||
| Accrued liabilities | 64,538 | 44,313 | ||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 42,808 | 31,183 | ||||
| Other current liabilities | 2,286 | 1,597 | ||||
| Current portion of contingent consideration | 3,845 | 10,854 | ||||
| Current portion of notes payable and other obligations | 12,989 | 15,176 | ||||
| Total current liabilities | 193,610 | 160,894 | ||||
| Contingent consideration, less current portion | 1,897 | 4,481 | ||||
| Other long-term liabilities | 29,102 | 29,542 | ||||
| Notes payable and other obligations, less current portion | 215,642 | 39,673 | ||||
| Deferred income tax liabilities, net | 5,797 | 6,893 | ||||
| Total liabilities | 446,048 | 241,483 | ||||
| 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, 15,892,912 and 15,523,300 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 159 | 155 | ||||
| Additional paid-in capital | 502,909 | 471,300 | ||||
| Accumulated other comprehensive income (loss) | (612 | ) | — | |||
| Retained earnings | 257,461 | 222,785 | ||||
| Total stockholders’ equity | 759,917 | 694,240 | ||||
| Total liabilities and stockholders’ equity | $ | 1,205,965 | $ | 935,723 | ||
| NV5 GLOBAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME (UNAUDITED) (in thousands, except share data) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, 2023 | October 1, 2022 | September 30, 2023 | October 1, 2022 | ||||||||||||
| Gross revenues | $ | 239,287 | $ | 204,075 | $ | 646,242 | $ | 596,960 | |||||||
| Direct costs: | |||||||||||||||
| Salaries and wages | 56,853 | 48,295 | 162,316 | 141,976 | |||||||||||
| Sub-consultant services | 45,522 | 41,253 | 112,827 | 116,557 | |||||||||||
| Other direct costs | 21,468 | 14,592 | 49,357 | 45,426 | |||||||||||
| Total direct costs | 123,843 | 104,140 | 324,500 | 303,959 | |||||||||||
| Gross profit | 115,444 | 99,935 | 321,742 | 293,001 | |||||||||||
| Operating expenses: | |||||||||||||||
| Salaries and wages, payroll taxes, and benefits | 60,262 | 49,670 | 171,883 | 146,719 | |||||||||||
| General and administrative | 20,257 | 16,730 | 49,728 | 47,611 | |||||||||||
| Facilities and facilities related | 6,011 | 5,441 | 17,208 | 15,822 | |||||||||||
| Depreciation and amortization | 13,840 | 9,771 | 38,426 | 29,373 | |||||||||||
| Total operating expenses | 100,370 | 81,612 | 277,245 | 239,525 | |||||||||||
| Income from operations | 15,074 | 18,323 | 44,497 | 53,476 | |||||||||||
| Interest expense | (3,882 | ) | (1,003 | ) | (9,111 | ) | (2,804 | ) | |||||||
| Income before income tax benefit (expense) | 11,192 | 17,320 | 35,386 | 50,672 | |||||||||||
| Income tax benefit (expense) | 2,124 | (1,257 | ) | (710 | ) | (8,699 | ) | ||||||||
| Net income | $ | 13,316 | $ | 16,063 | $ | 34,676 | $ | 41,973 | |||||||
| Earnings per share: | |||||||||||||||
| Basic | $ | 0.88 | $ | 1.09 | $ | 2.31 | $ | 2.85 | |||||||
| Diluted | $ | 0.86 | $ | 1.05 | $ | 2.24 | $ | 2.75 | |||||||
| Weighted average common shares outstanding: | |||||||||||||||
| Basic | 15,210,100 | 14,768,689 | 15,035,898 | 14,732,726 | |||||||||||
| Diluted | 15,497,836 | 15,301,545 | 15,448,693 | 15,242,453 | |||||||||||
| Comprehensive income: | |||||||||||||||
| Net income | $ | 13,316 | $ | 16,063 | $ | 34,676 | $ | 41,973 | |||||||
| Foreign currency translation losses, net of tax | (421 | ) | — | (612 | ) | — | |||||||||
| Comprehensive income | $ | 12,895 | $ | 16,063 | $ | 34,064 | $ | 41,973 | |||||||
| NV5 GLOBAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) | |||||||
| Nine Months Ended | |||||||
| September 30, 2023 | October 1, 2022 | ||||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 34,676 | $ | 41,973 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 42,498 | 33,091 | |||||
| Non-cash lease expense | 10,346 | 9,409 | |||||
| Provision for doubtful accounts | 940 | 1,252 | |||||
| Stock-based compensation | 16,504 | 15,249 | |||||
| Change in fair value of contingent consideration | (7,518 | ) | (543 | ) | |||
| Gain on disposals of property and equipment | (633 | ) | (100 | ) | |||
| Deferred income taxes | (25,447 | ) | (4,288 | ) | |||
| Amortization of debt issuance costs | 573 | 556 | |||||
| Changes in operating assets and liabilities, net of impact of acquisitions: | |||||||
| Billed receivables | (6,364 | ) | 13,281 | ||||
| Unbilled receivables | (24,442 | ) | (8,633 | ) | |||
| Prepaid expenses and other assets | 1,944 | (8,105 | ) | ||||
| Accounts payable | 3,846 | (7,937 | ) | ||||
| Accrued liabilities and other long-term liabilities | 1,243 | (1,608 | ) | ||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | (2,113 | ) | (2,902 | ) | |||
| Contingent consideration | (1,307 | ) | — | ||||
| Other current liabilities | 689 | (304 | ) | ||||
| Net cash provided by operating activities | 45,435 | 80,391 | |||||
| Cash flows from investing activities: | |||||||
| Cash paid for acquisitions (net of cash received from acquisitions) | (189,109 | ) | (5,020 | ) | |||
| Proceeds from sale of assets | 295 | 87 | |||||
| Purchase of property and equipment | (14,257 | ) | (14,874 | ) | |||
| Net cash used in investing activities | (203,071 | ) | (19,807 | ) | |||
| Cash flows from financing activities: | |||||||
| Borrowings from Senior Credit Facility | 188,000 | — | |||||
| Payments on notes payable | (6,399 | ) | (7,796 | ) | |||
| Payments of contingent consideration | (793 | ) | (1,597 | ) | |||
| Payments of borrowings from Senior Credit Facility | (15,000 | ) | (45,000 | ) | |||
| Purchases of common stock tendered by employees to satisfy the required withholding taxes related to stock-based compensation | (81 | ) | — | ||||
| Net cash provided by (used in) financing activities | 165,727 | (54,393 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | (193 | ) | — | ||||
| Net increase in cash and cash equivalents | 7,898 | 6,191 | |||||
| Cash and cash equivalents – beginning of period | 38,541 | 47,980 | |||||
| Cash and cash equivalents – end of period | $ | 46,439 | $ | 54,171 | |||
NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO COMPARABLE GAAP FINANCIAL MEASURES
(UNAUDITED)
(in thousands)
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, 2023 | October 1, 2022 | September 30, 2023 | October 1, 2022 | |||||||||||||
| Net Income | $ | 13,316 | $ | 16,063 | $ | 34,676 | $ | 41,973 | ||||||||
| Add: | Interest expense | 3,882 | 1,003 | 9,111 | 2,804 | |||||||||||
| Income tax (benefit) expense | (2,124 | ) | 1,257 | 710 | 8,699 | |||||||||||
| Depreciation and amortization | 15,293 | 11,033 | 42,498 | 33,091 | ||||||||||||
| Stock-based compensation | 5,777 | 5,634 | 16,504 | 15,249 | ||||||||||||
| Acquisition-related costs* | 1,702 | 1,043 | (2,959 | ) | 892 | |||||||||||
| Adjusted EBITDA | $ | 37,846 | $ | 36,033 | $ | 100,540 | $ | 102,708 | ||||||||
* Acquisition-related costs include contingent consideration fair value adjustments.
RECONCILIATION OF GAAP EPS TO ADJUSTED EPS
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, 2023 | October 1, 2022 | September 30, 2023 | October 1, 2022 | |||||||||||||
| Net Income - per diluted share | $ | 0.86 | $ | 1.05 | $ | 2.24 | $ | 2.75 | ||||||||
| Per diluted share adjustments: | ||||||||||||||||
| Add: | Amortization expense of intangible assets and acquisition-related costs | 0.85 | 0.59 | 1.98 | 1.66 | |||||||||||
| Income tax expense | (0.20 | ) | (0.14 | ) | (0.55 | ) | (0.42 | ) | ||||||||
| Adjusted EPS | $ | 1.51 | $ | 1.50 | $ | 3.67 | $ | 3.99 | ||||||||
