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NV5 Announces Third Quarter Results; Exceeds Analyst Consensus

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

Nine Months Ended September 30, 2023 Results

Full-Year Guidance

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 

 


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