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NV5 Global Announces First Quarter Results Exceeding Earnings Consensus

04 May 2023

HOLLYWOOD, Fla., May 04, 2023 (GLOBE NEWSWIRE) -- NV5 Global, Inc. (Nasdaq: NVEE) ("NV5" or the "Company"), a provider of technology, conformity assessment, and consulting solutions, today reported financial results for the first quarter ended April 1, 2023.

"NV5 delivered first quarter results that were above earnings consensus and in accordance with full-year guidance for revenues and earnings. We anticipate that actions taken in the first quarter will result in accelerated growth in the second half of the year. The quarter was led by the record performance of the geospatial business, which grew 15% organically, easing headwinds in the real estate transactions business and the timing of LNG revenue due to project cycles which impacted the quarter. NV5’s first quarter performance reinforces our focus on a multidisciplinary services portfolio. We therefore maintain our full-year 2023 guidance. We completed four acquisitions in the quarter including Axim Geospatial, a leader in geospatial data analytics for the defense and intelligence community. The addition of Axim Geospatial and the recent acquisition of the L3Harris commercial geospatial software group are significant steps in our positioning to capitalize on technology services, software, and subscription-based revenue," said Dickerson Wright, PE, Chairman and CEO of NV5.

First Quarter 2023 Results*

  • Gross revenues in the first quarter of 2023 were $184.3 million.
  • Gross profit in the first quarter of 2023 was $96.0 million.
  • Net income in the first quarter of 2023 was $5.9 million.
  • Adjusted EBITDA in the first quarter of 2023 was $27.7 million.
  • GAAP EPS in the first quarter of 2023 was $0.39 per share.
  • Adjusted EPS in the first quarter of 2023 was $0.88 per share.
  • Cash flows from operating activities in the first quarter of 2023 were $11.3 million. The first quarter cash flows from operations were impacted by the timing of working capital, including increases in unbilled receivables as a result of billing milestone payment cycles and decreases in accounts payable.

*Refer to included Consolidated Statements of Net Income and Comprehensive Income for comparison to first quarter 2022.

Reiterate Full-Year 2023 Guidance

  • Gross revenues between $878 million and $915 million.
  • GAAP EPS between $2.93 per share and $3.33 per share.
  • Adjusted EPS between $5.28 per share and $5.69 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 first quarter 2023 financial results at 4:30 p.m. (Eastern Time) on May 4, 2023. The accompanying presentation for the call is available by visiting /investor-overview/default.aspx.

Date:Thursday, May 4, 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:/investor-overview/default.aspx
  

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: testing, inspection & consulting, infrastructure engineering, utility services, buildings & program management, 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: This email address is being protected from spambots. You need JavaScript enabled to view it.



NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share data)

  April 1, 2023 December 31, 2022
Assets    
Current assets:    
Cash and cash equivalents $31,341  $38,541 
Billed receivables, net  145,799   145,637 
Unbilled receivables, net  111,351   92,862 
Prepaid expenses and other current assets  13,194   13,636 
Total current assets  301,685   290,676 
Property and equipment, net  49,438   41,640 
Right-of-use lease assets, net  38,776   39,314 
Intangible assets, net  213,517   160,431 
Goodwill  483,236   400,957 
Other assets  3,215   2,705 
Total Assets $1,089,867  $935,723 
     
Liabilities and Stockholders’ Equity    
     
Current liabilities:    
Accounts payable $48,333  $57,771 
Accrued liabilities  56,073   44,313 
Billings in excess of costs and estimated earnings on uncompleted contracts  37,327   31,183 
Other current liabilities  1,556   1,597 
Current portion of contingent consideration  10,606   10,854 
Current portion of notes payable and other obligations  14,832   15,176 
Total current liabilities  168,727   160,894 
Contingent consideration, less current portion  2,695   4,481 
Other long-term liabilities  28,638   29,542 
Notes payable and other obligations, less current portion  153,084   39,673 
Deferred income tax liabilities, net  16,853   6,893 
Total liabilities  369,997   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, 15,708,193 and 15,523,300 shares issued and outstanding as of April 1, 2023 and December 31, 2022, respectively  157   155 
Additional paid-in capital  490,981   471,300 
Retained earnings  228,732   222,785 
Total stockholders’ equity  719,870   694,240 
Total liabilities and stockholders’ equity $1,089,867  $935,723 

 

NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
(in thousands, except share data)

  Three Months Ended
  April 1, 2023 April 2, 2022
Gross revenues $184,317  $190,154 
     
Direct costs:    
Salaries and wages  48,384   45,977 
Sub-consultant services  27,615   34,825 
Other direct costs  12,320   15,525 
Total direct costs  88,319   96,327 
     
Gross profit  95,998   93,827 
     
Operating expenses:    
Salaries and wages, payroll taxes, and benefits  52,672   49,767 
General and administrative  17,920   16,387 
Facilities and facilities related  5,374   5,185 
Depreciation and amortization  11,047   9,934 
Total operating expenses  87,013   81,273 
     
Income from operations  8,985   12,554 
     
Interest expense  (1,581)  (914)
     
Income before income tax expense  7,404   11,640 
Income tax expense  (1,457)  (2,998)
Net income and comprehensive income $5,947  $8,642 
     
Earnings per share:    
Basic $0.40  $0.59 
Diluted $0.39  $0.57 
     
Weighted average common shares outstanding:    
Basic  14,883,487   14,693,323 
Diluted  15,383,437   15,216,105 

 

NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)

  Three Months Ended
  April 1, 2023 April 2, 2022
Cash flows from operating activities:    
Net income $5,947  $8,642 
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization  12,302   11,167 
Non-cash lease expense  3,286   3,092 
Provision for doubtful accounts  240   678 
Stock-based compensation  5,826   4,789 
Change in fair value of contingent consideration  (859)   
Gain on disposals of property and equipment  (23)  (54)
Deferred income taxes  (5,603)  (1,903)
Amortization of debt issuance costs  194   185 
Changes in operating assets and liabilities, net of impact of acquisitions:    
Billed receivables  9,560   23,211 
Unbilled receivables  (13,999)  2,042 
Prepaid expenses and other assets  4,857   3,230 
Accounts payable  (15,884)  (7,854)
Accrued liabilities and other long-term liabilities  2,375   4,684 
Billings in excess of costs and estimated earnings on uncompleted contracts  3,906   (5,104)
Contingent consideration  (800)   
Other current liabilities  (43)  (289)
Net cash provided by operating activities  11,282   46,516 
     
Cash flows from investing activities:    
Cash paid for acquisitions (net of cash received from acquisitions)  (117,587)  (326)
Purchase of property and equipment  (6,110)  (6,044)
Net cash used in investing activities  (123,697)  (6,370)
     
Cash flows from financing activities:    
Borrowings from Senior Credit Facility  110,000    
Payments on notes payable  (4,085)  (4,581)
Payments of contingent consideration  (700)  (1,597)
Net cash provided by (used in) financing activities  105,215   (6,178)
     
Net (decrease) increase in cash and cash equivalents  (7,200)  33,968 
Cash and cash equivalents – beginning of period  38,541   47,980 
Cash and cash equivalents – end of period $31,341  $81,948 

 

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
   April 1, 2023 April 2, 2022
Net Income$5,947  $8,642 
Add:Interest expense  1,581   914 
 Income tax expense  1,457   2,998 
 Depreciation and amortization  12,302   11,167 
 Stock-based compensation  5,826   4,789 
 Acquisition-related costs*  632   355 
Adjusted EBITDA$27,745  $28,865 

* Acquisition-related costs include contingent consideration fair value adjustments.

 

RECONCILIATION OF GAAP EPS TO ADJUSTED EPS

  Three Months Ended
  April 1, 2023 April 2, 2022
Net Income - per diluted share$0.39  $0.57 
Per diluted share adjustments:   
Add:Amortization expense of intangible assets and acquisition-related costs 0.65   0.57 
 Income tax expense (0.16)  (0.15)
Adjusted EPS$0.88  $0.99 

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