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NV5 Announces Strong Second Quarter and Year-to-Date 2016 Financial Results, Raises Guidance

HOLLYWOOD, FL -- (Marketwired) -- 08/04/16 -- NV5 Global, Inc. (NASDAQ: NVEE) ("NV5" or the "Company"), a provider of professional and technical engineering and consulting solutions, today reported financial results for the second quarter ended June 30, 2016.

Second Quarter 2016 Financial Highlights

  • Total Revenues for the quarter were $57.1 million, an increase of 63% year-over-year. Gross Revenues - GAAP for the quarter were $55.9 million, an increase of 62% year-over-year
  • Net Revenues for the quarter were $44.4 million, an increase of 60% year-over-year
  • Organic revenue growth in the second quarter of 2016 was 9%
  • EBITDA for the quarter was $6.0 million or 14% of Net Revenues, up from $3.5 million or 13% of Net Revenues in the second quarter of 2015
  • Gross Margin for the quarter was 47% compared to 45% in the second quarter of 2015
  • Net income for the quarter was $2.9 million, a 65% increase from $1.7 million in the second quarter of 2015
  • Adjusted EPS for the quarter was $0.38 per diluted share, an increase of 23% from $0.31 per diluted share in the second quarter of 2015
  • GAAP EPS for the quarter was $0.31 per diluted share over 9.2 million shares, an increase of 24% from $0.25 per diluted share over 6.8 million shares in the second quarter of 2015
  • Backlog was $195.5 million as of June 30, 2016, a 12% increase from $174.4 million as of March 31, 2016
  • NV5 raises Full-Year 2016 Guidance, expects Revenues to range from $230 million to $250 million, Adjusted EPS Guidance to range from $1.57 to $1.70 per diluted share, and GAAP EPS Guidance to range from $1.29 to $1.40 per diluted share

"We continued to bring new, higher-margin work into all service lines in the second quarter, which has resulted in our gross margins increasing to 47% from 45%, EBITDA increasing to 14% of Net Revenues, and a 12% increase in our backlog," said Dickerson Wright, PE, Chairman and CEO of NV5. "The transformation of our natural gas pipeline business from a lower-margin staffing business to a higher-margin consulting business remains an ongoing process. We also experienced a delay in the start dates of our New Jersey Department of Transportation projects in the second quarter due to a legislative impasse regarding an increase in the gasoline tax. We expect these projects to get underway in Q3."

Total Revenues for the second quarter of 2016 were $57.1 million, a 63% increase from the second quarter of 2015. Total Revenues includes intercompany revenues where the Company performed the services in lieu of using a third-party sub-consultant. Gross Revenues - GAAP for the second quarter of 2016 were $55.9 million, a 62% increase from the second quarter of 2015. Net Revenues for the second quarter of 2016 was $44.4 million, an increase of 60% from the second quarter of 2015.

Gross Margin for the second quarter 2016 was 47% compared to 45% for the second quarter of 2015, which is the result of increased use of our billable professional employees and reduced use of sub-consultants to perform services.

EBITDA for the second quarter of 2016 was $6.0 million or 14% of Net Revenues, an increase of 71% up from $3.5 million or 13% of Net Revenues for the second quarter of last year.

Adjusted EPS for the second quarter of 2016 was $0.38 per diluted share vs. $0.31 per diluted share in the second quarter of 2015. Net income for the second quarter of 2016 was $2.9 million, or $0.31 per diluted share, up from net income of $1.7 million, or $0.25 per diluted share in the second quarter of 2015.

GAAP EPS and Adjusted EPS reflect weighted-average shares outstanding of 9,172,944 for the second quarter of 2016, compared to weighted-average shares outstanding of 6,838,725 for the second quarter of 2015.

Six Months Ended June 2016 Financial Highlights

  • Total Revenues were $103 million in the first six months of 2016, an increase of 60% from the first six months of 2015. Gross Revenues - GAAP were $100.8 million in the first six months of 2016, an increase of 58% from the first six months of 2015
  • Net Revenues were $82.5 million in the first six months of 2016, an increase of 63%
  • Organic revenue growth for the first six months of 2016 was 9%
  • EBITDA for the first six months of 2016 was $10.6 million, or 13% of Net Revenues, up from $5.9 million or 12% of Net Revenues for the first six months of 2015
  • Gross Margin was 49% compared to 44% for the first six months of 2015
  • Net income was $4.9 million, an increase of 74% from $2.8 million in the first six months of 2015
  • Adjusted EPS was $0.71 per diluted share, an increase of 32% from $0.54 per diluted share in the first six months of 2015
  • GAAP EPS was $0.57 over 8.6 million shares, an increase of 30% compared to $0.44 per diluted share over 6.4 million shares in the first six months of 2015

Total Revenues for the six months ended June 30, 2016 were $103.0 million, a 60% increase from the first six months of 2015. Total Revenues includes intercompany revenues where the Company performed the services in lieu of using a third-party sub-consultant. Gross Revenues - GAAP for the six months ended June 30, 2016 were $100.8 million, a 58% increase from the first six months of 2015. Net Revenues for the six months ended June 30, 2016 was $82.5 million, an increase of 63% from 2015.

Gross Margin for the six months ended June 30, 2016 was 49% compared to 44% for the first six months of 2015, which is the result of increased use of our billable professional employees and reduced use of sub-consultants to perform services.

EBITDA for the six months ended June 30, 2016 was $10.6 million or 13% of Net Revenues, an increase of 78% up from $5.9 million or 12% of Net Revenues for the same period in 2015.

Adjusted EPS for the six months ended June 30, 2016 was $0.71 per diluted share vs. $0.54 per diluted share in the six months ended June 30, 2015. Net income for the six months ended June 30, 2016 was $4.9 million, or $0.57 per diluted share, up from net income of $2.8 million, or $0.44 per diluted share in the six months ended June 30, 2015.

GAAP EPS and Adjusted EPS reflect weighted-average shares outstanding of 8,640,022 for the six months ended June 30, 2016, compared to weighted-average shares outstanding of 6,437,546 for the first six months of 2015.

At June 30, 2016, our cash and cash equivalents were $51.1 million compared to $23.5 million as of December 31, 2015. The increase in cash was due to $47.2 million in net cash proceeds from our secondary equity offering in May 2016 offset by $24.1 million used for acquisitions in 2016. During the first six months of 2016, we generated $6.7 million of cash from operating activities, compared to cash from operating activities of $1.0 million for the six months ended June 30, 2015.

At June 30, 2016, the Company reported backlog of $195.5 million, an increase of 12% from $174.4 million as of March 31, 2016.

2016 Outlook

The Company is raising its guidance for full-year 2016 for Total Revenues and Earnings. The Company expects full-year 2016 Total Revenues, including the impact of acquisitions closed through June 30, 2016, to range from $230 million to $250 million, which represents an increase of 48% to 60% from 2015 Total Revenues of $155.9 million. The Company further expects that full-year 2016 Adjusted EPS will range from $1.57 to $1.70 per diluted share. Furthermore, the Company expects that full-year 2016 GAAP EPS will range from $1.29 to $1.40 per diluted share. This guidance for Total Revenues, Adjusted EPS and GAAP EPS excludes anticipated acquisitions for the remainder of 2016. Both Adjusted EPS and GAAP EPS reflects the issuance of 1,955,000 shares of our common stock during May 2016.

Use of Non-GAAP Financial Measures

Total Revenues and Net Revenues is not a measure of financial performance under U.S. generally accepted accounting principles ("GAAP"). Gross Revenues - GAAP include sub-consultant costs and other direct costs which are generally pass-through costs. Furthermore, Gross Revenues - GAAP eliminates intercompany revenues where the Company performed the service in lieu of using a third-party sub-consultant. Therefore, the Company believes that Total Revenues and Net Revenues, which are non-GAAP financial measures commonly used in our industry, provides a meaningful perspective on its business results. A reconciliation of gross revenues as reported in accordance with GAAP to Total Revenues and 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. Management believes EBITDA, in addition to operating profit, net income and other GAAP measures, is a useful indicator of NV5's financial and operating performance and its 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 EBITDA is provided at the end of this news release.

Adjusted earnings per diluted share data ("Adjusted EPS") is not a measure of financial performance under GAAP. Adjusted EPS reflects adjustments to reported diluted earnings per share ("GAAP EPS") data to eliminate amortization expense of intangible assets from acquisitions. As the Company continues its acquisition strategy, the growth in Adjusted EPS will likely increase at a greater rate than GAAP EPS as reported in accordance with GAAP. A reconciliation of GAAP EPS as reported in accordance with GAAP to Adjusted EPS provided at the end of this news release.

NV5's definition of Total Revenues, Net Revenues, 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 contract revenues, net income and diluted earnings per share

Conference Call

NV5 will host a conference call to discuss its second quarter 2016 financial results at 4:30 p.m. (Eastern Time) on August 4, 2016.

Date: Thursday, August 4, 2016
Time: 4:30 p.m. Eastern
Toll-free dial-in number: +1 877-311-4180
International dial-in number: +1 616-548-5594
Conference ID: 44611600
Webcast:http://ir.nv5.com

Please dial-in at least 5-10 minutes prior to the start time in order for the operator to log your name and connect you to the conference.

A replay of the conference call will be available approximately one hour following the conclusion of the call through August 11, 2016. To access the replay via telephone, please dial:

Toll-free replay number: +1 855-859-2056
International replay number: +1 404-537-3406
Replay PIN number: 44611600

The conference call will also be webcast live and available for replay via the investors section of the NV5 website, www.NV5.com.

About NV5
NV5 Global, Inc.(NASDAQ: NVEE) is a provider of professional and technical engineering and consulting solutions to public and private sector clients in the infrastructure, energy, construction, real estate and environmental markets. NV5 primarily focuses on five business verticals: construction quality assurance, infrastructure, engineering and support services, energy, program management, and environmental solutions. The Company operates 58 offices in 25 states nationwide, and is headquartered in Hollywood, Florida. 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 press 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.

 
NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(Unaudited)
 
      June 30, 2016     December 31, 2015
Assets            
Current assets:            
  Cash and cash equivalents   $ 51,057   $ 23,476
  Accounts receivable, net of allowance for doubtful accounts of $1,861 and            
    $1,536 as of June 30, 2016 and December 31, 2015, respectively     62,760     47,747
  Prepaid expenses and other current assets     1,540     1,092
  Deferred income tax assets     1,440     1,440
  Total current assets     116,797     73,755
  Property and equipment, net     4,034     3,091
  Intangible assets, net     23,412     12,367
  Goodwill     36,878     21,679
  Other assets     1,026     877
    Total Assets   $ 182,147   $ 111,769
             
Liabilities and Stockholders' Equity            
Current liabilities:            
  Accounts payable   $ 12,457   $ 6,658
  Accrued liabilities     13,164     9,564
  Income taxes payable     713     813
  Billings in excess of costs and estimated earnings on uncompleted contracts     158     293
  Client deposits     109     110
  Current portion of contingent consideration     441     458
  Current portion of notes payable and other obligations     6,204     4,347
  Total current liabilities     33,246     22,243
  Contingent consideration, less current portion     466     821
  Notes payable and other obligations, less current portion     10,630     6,360
  Deferred income tax liabilities     1,634     1,582
    Total liabilities     45,976     31,006
             
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, 10,376,153 and 8,124,627            
    shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively     104     81
  Additional paid-in capital     112,731     62,260
  Retained earnings     23,336     18,422
  Total stockholders' equity     136,171     80,763
      Total liabilities and stockholders' equity   $ 182,147   $ 111,769
   
   
NV5 GLOBAL, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF NET INCOME  
(in thousands, except share data)  
(Unaudited)  
   
      Three Months Ended     Six Months Ended
      June 30,     June 30,
    June 30,     June 30,
  2016     2015     2016     2015
                     
Gross revenues   $ 55,892     $ 34,481     $ 100,797     $ 63,634  
                                 
Direct costs:                                
Salaries and wages     18,216       12,357       33,470       22,266  
Sub-consultant services     8,809       4,374       13,392       8,447  
Other direct costs     2,658       2,379       4,902       4,665  
Total direct costs     29,683       19,110       51,764       35,378  
                                 
Gross Profit     26,209       15,371       49,033       28,256  
                                 
Operating Expenses:                                
Salaries and wages, payroll taxes and benefits     14,038       7,604       26,479       14,709  
General and administrative     4,127       3,237       8,225       5,740  
Facilities and facilities related     2,016       1,007       3,737       1,864  
Depreciation and amortization     1,439       760       2,681       1,398  
Total operating expenses     21,620       12,608       41,122       23,711  
                                 
Income from operations     4,589       2,763       7,911       4,545  
                                 
Other expense:                                
Interest expense     (71 )     (34 )     (140 )     (102 )
Total other expense     (71 )     (34 )     (140 )     (102 )
                                 
Income before income tax expense     4,518       2,729       7,771       4,443  
Income tax expense     (1,659 )     (996 )     (2,857 )     (1,625 )
Net income   $ 2,859     $ 1,733     $ 4,914     $ 2,818  
                                 
Earnings per share:                                
  Basic   $ 0.33     $ 0.28     $ 0.59     $ 0.48  
  Diluted   $ 0.31     $ 0.25     $ 0.57     $ 0.44  
                                 
Weighted average common shares outstanding:                                
  Basic     8,793,471       6,301,763       8,262,248       5,914,405  
  Diluted     9,172,944       6,838,725       8,640,022       6,437,546  
                 
                 
NV5 GLOBAL, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  
(in thousands, except share data)  
(Unaudited)  
                 
      Six Months Ended 
June 30, 2016      June 30, 2015 
Cash Flows From Operating Activities:                
Net income   $ 4,914     $ 2,818  
Adjustments to reconcile net income to net cash provided by operating activities:                
  Depreciation and amortization     2,681       1,398  
  Provision for doubtful accounts     212       151  
  Stock compensation     1,049       666  
  Change in fair value of contingent consideration     87       52  
  Loss on disposal of leasehold improvements     2       -  
  Excess tax benefit from stock based compensation     (155 )     -  
  Deferred income taxes     52       -  
Changes in operating assets and liabilities, net of impact of acquisitions:                
  Accounts receivable     (6,419 )     (3,564 )
  Prepaid expenses and other assets     30       228  
  Accounts payable     3,730       (3,239 )
  Accrued liabilities     460       2,805  
  Income taxes payable     52       (318 )
  Billings in excess of costs and estimated earnings on uncompleted contracts     (135 )     39  
  Client deposits     134       (11 )
Net cash provided by operating activities     6,694       1,025  
                 
Cash Flows From Investing Activities:                
Cash paid for acquisitions     (24,085 )     (2,764 )
Purchase of property and equipment     (428 )     (306 )
Net cash used in investing activities     (24,513 )     (3,070 )
                 
Cash Flows From Financing Activities:                
Proceeds from secondary offerimg     51,319       32,068  
Payments of secondary offering costs     (4,075 )     (2,646 )
Exercise of warrants costs     -       (216 )
Payments on notes payable     (2,711 )     (2,676 )
Payments of contingent consideration     (296 )     (533 )
Excess tax benefit from stock based compensation     155       -  
Payments on stock repurchase obligation     -       (177 )
Proceeds from exercise of unit warrant     1,008       3,186  
Net cash provided by financing activities     45,400       29,006  
                 
                 
Net increase in Cash and Cash Equivalents     27,581       26,961  
Cash and cash equivalents - beginning of period     23,476       6,872  
Cash and cash equivalents - end of period   $ 51,057     $ 33,833  
                 
                 
        Six Months Ended  
      June 30, 2016      June 30, 2015 
Supplemental disclosures of cash flow information:                
Cash paid for interest   $ 122     $ 142  
Cash paid for income taxes   $ 2,743     $ 1,635  
                 
Non-cash investing and financing activities:                
Contingent consideration (earn-out)   $ -     $ 901  
Notes payable and other obligations for acquisitions   $ 8,833     $ 5,250  
Stock issuance for acquisitions   $ 875     $ 900  
Payment of contingent consideration with common stock   $ 163     $ 100  
                           
                           
NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GROSS REVENUES TO TOTAL REVENUES
(in thousands, except share data)
(Unaudited)
                           
        Three Months Ended     Six Months Ended
        June 30,     June 30,     June 30,     June 30,
        2016     2015     2016     2015
                           
Gross Revenues - GAAP   $ 55,892   $ 34,481   $ 100,797   $ 63,634
                           
Add: Intercompany revenues in lieu of sub-consultants     1,221     541     2,183     813
Total Revenues   $ 57,113   $ 35,022   $ 102,980   $ 64,447
                                   
                                   
NV5 GLOBAL, INC. AND SUBSIDIARIES  
RECONCILIATION OF GROSS REVENUES TO NET REVENUES  
(in thousands, except share data)  
(Unaudited)  
                                   
        Three Months Ended       Six Months Ended  
        June 30,       June 30,       June 30,       June 30,  
        2016       2015       2016       2015  
                                   
Gross Revenues - GAAP   $ 55,892     $ 34,481     $ 100,797     $ 63,634  
                                   
Less: Sub-consultant services     (8,809 )     (4,374 )     (13,392 )     (8,447 )
  Other direct costs     (2,658 )     (2,379 )     (4,902 )     (4,665 )
Net Revenues   $ 44,425     $ 27,728     $ 82,503     $ 50,522  
                           
                           
NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
(in thousands)
(Unaudited)
                           
        Three Months Ended     Six Months Ended
        June 30,     June 30,     June 30,     June 30,
        2016     2015     2016     2015
                           
Net Income   $ 2,859   $ 1,733   $ 4,914   $ 2,818
                           
Add: Interest expense     71     34     140     102
  Income tax expense     1,659     996     2,857     1,625
  Depreciation and Amortization     1,439     760     2,681     1,398
EBITDA   $ 6,028   $ 3,523   $ 10,592   $ 5,943
                           
                           
NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EPS TO ADJUSTED EPS
(Unaudited)
                           
        Three Months Ended     Six Months Ended
        June 30,     June 30,     June 30,     June 30,
        2016     2015     2016     2015
                           
Net Income - per diluted share   $ 0.31   $ 0.25   $ 0.57   $ 0.44
                           
Per diluted share adjustments:                        
Add: Amortization expense of intangible assets 0.11     0.09     0.22     0.17
  Income tax expense     (0.04)     (0.03)     (0.08)     (0.06)
                           
Adjusted EPS   $ 0.38   $ 0.31   $ 0.71   $ 0.54
                         

Contact
NV5 Global, Inc.
Lauren Wright, PhD
Director of Investor Relations
Tel: +1-408-392-7233
Email: ir@nv5.com

Source: NV5 Global, Inc.