NV5 Global, Inc. (Nasdaq: NVEE) ("NV5" or the
"Company"), a provider of technology, conformity
assessment, and consulting solutions, today reported financial
results for the third quarter ended October 1, 2022.
"NV5’s growth in both revenues and profitability in the third
quarter resulted in another record quarter and once again
demonstrates the success of the NV5 business model. Utilities
continue to be a driver of NV5’s business, and our geospatial
vertical delivered its strongest quarter ever in revenue and new
contract bookings. NV5 has consistently delivered growth and
profitability exceeding the industry average and has demonstrated
resilience to changing economic conditions. We enter the fourth
quarter with a strong backlog, a healthy acquisition pipeline, and
potential high-margin, non-discretionary service offerings," said
Dickerson Wright, PE, Chairman and CEO of NV5.
Third Quarter 2022 Results
- Gross revenues in the third quarter of
2022 were $204.1 million compared to $185.6 million in the third
quarter of 2021, a 10% increase.
- Net income in the third quarter of 2022
was $16.1 million compared to $12.6 million in the third quarter of
2021, a 28% increase.
- Adjusted EBITDA in the third quarter of
2022 was $36.0 million compared to $34.7 million in the
third quarter of 2021, a 4% increase.
- GAAP EPS in the third quarter of 2022
was $1.05 per share compared to $0.83 per share in the third
quarter of 2021, a 27% increase.
- Adjusted EPS in the third quarter of
2022 was $1.50 per share compared to $1.25 per share in the third
quarter of 2021, a 20% increase. Diluted weighted average shares
were 15,301,545 in the third quarter of 2022 compared to 15,069,660
in the third quarter of 2021.
- Cash flows provided by operations were
$26.1 million in the third quarter of 2022 compared to
$15.8 million in the third quarter of 2021, a 65%
increase.
- Reduced net debt leverage to 0.28x, a
33% decrease when compared to the second quarter of 2022.
Nine Months Ended October 1,
2022 Results
- Gross revenues for the nine months
ended October 1, 2022 were $597.0 million compared to $518.2
million in the nine months ended October 2, 2021, a 15%
increase.
- Net income for the nine months ended
October 1, 2022 was $42.0 million compared to $31.7 million in the
nine months ended October 2, 2021, a 32% increase.
- Adjusted EBITDA for the nine months
ended October 1, 2022 was $102.7 million compared to $93.1 million
in the nine months ended October 2, 2021, a 10% increase.
- GAAP EPS for the nine months ended
October 1, 2022 was $2.75 per share compared to $2.19 per share in
the nine months ended October 2, 2021, a 26% increase.
- Adjusted EPS for the nine months ended
October 1, 2022 was $3.99 per share compared to $3.50 per share in
the nine months ended October 2, 2021, a 14% increase. Diluted
weighted average shares were 15,242,453 for the nine months ended
October 1, 2022, compared to 14,486,683 in the nine months ended
October 2, 2021.
- Cash flows provided by operations for
the nine months ended October 1, 2022 were $80.4 million compared
to $78.1 million in the nine months ended October 2,
2021.
- Organic growth for the nine months
ended October 1, 2022 was 7%.
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
2022 financial results at 4:30 p.m. (Eastern Time) on
November 3, 2022. The accompanying presentation for the call
is available by visiting http://ir.nv5.com.
Date: |
Thursday, November 3, 2022 |
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: 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 CochranVice President, Marketing &
Investor RelationsTel: +1-954-637-8048Email: ir@nv5.com
Source: NV5 Global, Inc.
NV5 GLOBAL, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS(UNAUDITED) (in thousands, except share data)
|
October 1, 2022 |
|
January 1, 2022 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
54,171 |
|
|
$ |
47,980 |
|
Billed receivables, net |
|
141,308 |
|
|
|
153,814 |
|
Unbilled receivables, net |
|
98,081 |
|
|
|
89,734 |
|
Prepaid expenses and other current assets |
|
20,896 |
|
|
|
12,442 |
|
Total current assets |
|
314,456 |
|
|
|
303,970 |
|
Property and equipment,
net |
|
41,042 |
|
|
|
32,729 |
|
Right-of-use lease assets,
net |
|
38,008 |
|
|
|
44,260 |
|
Intangible assets, net |
|
167,592 |
|
|
|
188,224 |
|
Goodwill |
|
398,614 |
|
|
|
389,916 |
|
Other assets |
|
2,427 |
|
|
|
2,844 |
|
Total Assets |
$ |
962,139 |
|
|
$ |
961,943 |
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
48,722 |
|
|
$ |
55,954 |
|
Accrued liabilities |
|
58,481 |
|
|
|
50,461 |
|
Billings in excess of costs and estimated earnings on uncompleted
contracts |
|
27,886 |
|
|
|
29,444 |
|
Other current liabilities |
|
1,421 |
|
|
|
1,551 |
|
Current portion of contingent consideration |
|
9,224 |
|
|
|
5,807 |
|
Current portion of notes payable and other obligations |
|
18,140 |
|
|
|
20,734 |
|
Total current liabilities |
|
163,874 |
|
|
|
163,951 |
|
Contingent consideration, less
current portion |
|
2,813 |
|
|
|
2,521 |
|
Other long-term
liabilities |
|
28,760 |
|
|
|
34,304 |
|
Notes payable and other
obligations, less current portion |
|
63,238 |
|
|
|
111,062 |
|
Deferred income tax
liabilities, net |
|
21,097 |
|
|
|
25,385 |
|
Total liabilities |
|
279,782 |
|
|
|
337,223 |
|
|
|
|
|
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,
15,559,921 and 15,414,005 shares issued and outstanding as of
October 1, 2022 and January 1, 2022, respectively |
|
156 |
|
|
|
154 |
|
Additional paid-in capital |
|
467,416 |
|
|
|
451,754 |
|
Retained earnings |
|
214,785 |
|
|
|
172,812 |
|
Total stockholders’ equity |
|
682,357 |
|
|
|
624,720 |
|
Total liabilities and stockholders’ equity |
$ |
962,139 |
|
|
$ |
961,943 |
|
NV5 GLOBAL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF NET INCOME AND
COMPREHENSIVE INCOME(UNAUDITED)(in thousands, except share
data)
|
Three Months Ended |
|
Nine Months Ended |
|
October 1, 2022 |
|
October 2, 2021 |
|
October 1, 2022 |
|
October 2, 2021 |
Gross revenues |
$ |
204,075 |
|
|
$ |
185,553 |
|
|
$ |
596,960 |
|
|
$ |
518,151 |
|
|
|
|
|
|
|
|
|
Direct
costs: |
|
|
|
|
|
|
|
Salaries and wages |
|
48,295 |
|
|
|
45,145 |
|
|
|
141,976 |
|
|
|
131,630 |
|
Sub-consultant services |
|
41,253 |
|
|
|
35,779 |
|
|
|
116,557 |
|
|
|
89,003 |
|
Other direct costs |
|
14,592 |
|
|
|
12,802 |
|
|
|
45,426 |
|
|
|
35,714 |
|
Total direct costs |
|
104,140 |
|
|
|
93,726 |
|
|
|
303,959 |
|
|
|
256,347 |
|
|
|
|
|
|
|
|
|
Gross
profit |
|
99,935 |
|
|
|
91,827 |
|
|
|
293,001 |
|
|
|
261,804 |
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Salaries and wages, payroll
taxes and benefits |
|
49,670 |
|
|
|
44,597 |
|
|
|
146,719 |
|
|
|
131,761 |
|
General and
administrative |
|
16,730 |
|
|
|
12,978 |
|
|
|
47,611 |
|
|
|
37,891 |
|
Facilities and facilities
related |
|
5,441 |
|
|
|
5,194 |
|
|
|
15,822 |
|
|
|
15,330 |
|
Depreciation and
amortization |
|
9,771 |
|
|
|
10,108 |
|
|
|
29,373 |
|
|
|
29,764 |
|
Total operating expenses |
|
81,612 |
|
|
|
72,877 |
|
|
|
239,525 |
|
|
|
214,746 |
|
|
|
|
|
|
|
|
|
Income from
operations |
|
18,323 |
|
|
|
18,950 |
|
|
|
53,476 |
|
|
|
47,058 |
|
|
|
|
|
|
|
|
|
Interest
expense |
|
(1,003 |
) |
|
|
(1,475 |
) |
|
|
(2,804 |
) |
|
|
(5,362 |
) |
|
|
|
|
|
|
|
|
Income before income tax
expense |
|
17,320 |
|
|
|
17,475 |
|
|
|
50,672 |
|
|
|
41,696 |
|
Income tax expense |
|
(1,257 |
) |
|
|
(4,902 |
) |
|
|
(8,699 |
) |
|
|
(10,005 |
) |
Net income and
comprehensive income |
$ |
16,063 |
|
|
$ |
12,573 |
|
|
$ |
41,973 |
|
|
$ |
31,691 |
|
|
|
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
|
|
Basic |
$ |
1.09 |
|
|
$ |
0.86 |
|
|
$ |
2.85 |
|
|
$ |
2.27 |
|
Diluted |
$ |
1.05 |
|
|
$ |
0.83 |
|
|
$ |
2.75 |
|
|
$ |
2.19 |
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
14,768,689 |
|
|
|
14,593,623 |
|
|
|
14,732,726 |
|
|
|
13,963,372 |
|
Diluted |
|
15,301,545 |
|
|
|
15,069,660 |
|
|
|
15,242,453 |
|
|
|
14,486,683 |
|
NV5 GLOBAL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWS(UNAUDITED)(in thousands)
|
Nine Months Ended |
|
October 1, 2022 |
|
October 2, 2021 |
Cash flows from
operating activities: |
|
|
|
Net income |
$ |
41,973 |
|
|
$ |
31,691 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
Depreciation and amortization |
|
33,091 |
|
|
|
33,397 |
|
Non-cash lease expense |
|
9,409 |
|
|
|
7,941 |
|
Provision for doubtful accounts |
|
1,252 |
|
|
|
1,077 |
|
Stock-based compensation |
|
15,249 |
|
|
|
12,087 |
|
Change in fair value of contingent consideration |
|
(543 |
) |
|
|
(67 |
) |
Gain on disposals of property and equipment |
|
(100 |
) |
|
|
(1,059 |
) |
Deferred income taxes |
|
(4,288 |
) |
|
|
(4,318 |
) |
Amortization of debt issuance costs |
|
556 |
|
|
|
1,024 |
|
Changes in operating assets
and liabilities, net of impact of acquisitions: |
|
|
|
Billed receivables |
|
13,281 |
|
|
|
16,728 |
|
Unbilled receivables |
|
(8,633 |
) |
|
|
(10,024 |
) |
Prepaid expenses and other assets |
|
(8,105 |
) |
|
|
(4,160 |
) |
Accounts payable |
|
(7,937 |
) |
|
|
1,366 |
|
Accrued liabilities |
|
(1,608 |
) |
|
|
403 |
|
Billings in excess of costs and estimated earnings on uncompleted
contracts |
|
(2,902 |
) |
|
|
(8,233 |
) |
Other current liabilities |
|
(304 |
) |
|
|
218 |
|
Net cash provided by operating
activities |
|
80,391 |
|
|
|
78,071 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Cash paid for acquisitions
(net of cash received from acquisitions) |
|
(5,020 |
) |
|
|
(23,569 |
) |
Proceeds from sale of
assets |
|
87 |
|
|
|
843 |
|
Purchase of property and
equipment |
|
(14,874 |
) |
|
|
(6,714 |
) |
Net cash used in investing
activities |
|
(19,807 |
) |
|
|
(29,440 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Proceeds from common stock
offering |
|
— |
|
|
|
172,500 |
|
Borrowings from Senior Credit
Facility |
|
— |
|
|
|
138,750 |
|
Payments on notes payable |
|
(7,796 |
) |
|
|
(7,299 |
) |
Payments of contingent
consideration |
|
(1,597 |
) |
|
|
(663 |
) |
Payments of borrowings from
Senior Credit Facility |
|
(45,000 |
) |
|
|
(283,832 |
) |
Payments of common stock
offering costs |
|
— |
|
|
|
(10,657 |
) |
Purchases of common stock
tendered by employees to satisfy the required withholding taxes
related to stock-based compensation |
|
— |
|
|
|
(52 |
) |
Payments of debt issuance
costs |
|
— |
|
|
|
(890 |
) |
Net cash (used in) provided by
financing activities |
|
(54,393 |
) |
|
|
7,857 |
|
|
|
|
|
Net increase in cash
and cash equivalents |
|
6,191 |
|
|
|
56,488 |
|
Cash and cash
equivalents – beginning of period |
|
47,980 |
|
|
|
64,909 |
|
Cash and cash
equivalents – end of period |
$ |
54,171 |
|
|
$ |
121,397 |
|
NV5 GLOBAL, INC. AND
SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL
MEASURESTO COMPARABLE GAAP FINANCIAL MEASURES(UNAUDITED)(in
thousands)
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED
EBITDA
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
October 1, 2022 |
|
October 2, 2021 |
|
October 1, 2022 |
|
October 2, 2021 |
Net
Income |
$ |
16,063 |
|
|
$ |
12,573 |
|
|
$ |
41,973 |
|
|
$ |
31,691 |
|
Add: |
Interest expense |
|
1,003 |
|
|
|
1,475 |
|
|
|
2,804 |
|
|
|
5,362 |
|
|
Income tax expense |
|
1,257 |
|
|
|
4,902 |
|
|
|
8,699 |
|
|
|
10,005 |
|
|
Depreciation and
amortization |
|
11,033 |
|
|
|
11,461 |
|
|
|
33,091 |
|
|
|
33,397 |
|
|
Stock-based compensation |
|
5,634 |
|
|
|
4,297 |
|
|
|
15,249 |
|
|
|
12,087 |
|
|
Acquisition-related costs* |
|
1,043 |
|
|
|
(23 |
) |
|
|
892 |
|
|
|
607 |
|
Adjusted
EBITDA |
$ |
36,033 |
|
|
$ |
34,685 |
|
|
$ |
102,708 |
|
|
$ |
93,149 |
|
* Acquisition-related costs include contingent consideration
fair value adjustments.
RECONCILIATION OF GAAP EPS TO ADJUSTED EPS
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
October 1, 2022 |
|
October 2, 2021 |
|
October 1, 2022 |
|
October 2, 2021 |
Net Income - per diluted share |
$ |
1.05 |
|
|
$ |
0.83 |
|
|
$ |
2.75 |
|
|
$ |
2.19 |
|
Per diluted share adjustments: |
|
|
|
|
|
|
|
Add: |
Amortization expense of intangible assets and acquisition-related
costs |
|
0.59 |
|
|
|
0.57 |
|
|
|
1.66 |
|
|
|
1.77 |
|
|
Income tax expense |
|
(0.14 |
) |
|
|
(0.15 |
) |
|
|
(0.42 |
) |
|
|
(0.46 |
) |
Adjusted EPS |
$ |
1.50 |
|
|
$ |
1.25 |
|
|
$ |
3.99 |
|
|
$ |
3.50 |
|
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