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News Release

NV5 Announces Record Second Quarter and Year-to-Date 2017 Financial Results; Raises Guidance

HOLLYWOOD, Fla., Aug. 03, 2017 (GLOBE NEWSWIRE) -- 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 July 1, 2017.

Second Quarter 2017 Financial Highlights

  • NV5 raises Full-Year 2017 Guidance, expects Total Revenues to range from $340 million to $358 million, Adjusted EPS Guidance to range from $2.22 to $2.36 per diluted share, and GAAP EPS Guidance to range from $1.62 to $1.76 per diluted share
  • Total Revenues for the quarter were $85.1 million, an increase of 48.9% year-over-year. Gross Revenues – GAAP for the quarter were $83.7 million, an increase of 49.8% year-over-year
  • Net Revenues for the quarter were $67.0 million, an increase of 50.9% year-over-year
  • EBITDA for the quarter was $10.1 million or 15.1% of Net Revenues, compared to $6.0 million or 13.6% of Net Revenues in the second quarter of 2016
  • Gross Margin for the quarter was 49.4% compared to 46.9% in the second quarter of 2016
  • Net income for the quarter was $4.3 million, a 51.1% increase from $2.9 million in the second quarter of 2016
  • Organic revenue growth in the second quarter of 2017 was 4%
  • Adjusted EPS for the quarter was $0.56 per diluted share, an increase of 50% from $0.38 per diluted share in the second quarter of 2016
  • GAAP EPS for the quarter was $0.40 per diluted share over 10.7 million shares, an increase of 29.0% from $0.31 per diluted share over 9.2 million shares in the second quarter of 2016
  • Backlog was $261.1 million as of July 1, 2017, a 15% increase from $225.2 million as of April 1, 2017

“I am pleased to congratulate our employees on a great second quarter and to share with our investors that NV5 continues to grow organically through new contract wins, an expanded client base, and strategic acquisitions. In the second quarter, total revenues increased 49%, EBITDA increased 68%, and net income increased 51%,” said Dickerson Wright, PE, Chairman and CEO of NV5. “We saw significant growth within our recent acquisitions, Bock & Clark, Holdrege & Kull, and Lochrane Engineering, which have brought us into both new service lines and markets, including commercial real estate zoning and surveying and geotechnical design. They, along with our recently announced acquisition of RDK, have also expanded our existing business through opportunities to cross-sell new services to current clients.”

Total Revenues for the second quarter of 2017 were $85.1 million, a 48.9% increase from the second quarter of 2016. 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 2017 were $83.7 million, a 49.8% increase from the second quarter of 2016. Net Revenues for the second quarter of 2017 were $67.0 million, an increase of 50.9% from the second quarter of 2016.

Gross Margin for the second quarter 2017 was 49.4% compared to 46.9% for the second quarter of 2016, 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 2017 was $10.1 million or 15.1% of Net Revenues, an increase of 67.9% from $6.0 million or 13.6% of Net Revenues for the second quarter of last year.

Adjusted EPS for the second quarter of 2017 was $0.56 per diluted share versus $0.38 per diluted share in the second quarter of 2016. Net income for the second quarter of 2017 was $4.3 million, or $0.40 per diluted share, compared to net income of $2.9 million, or $0.31 per diluted share in the second quarter of 2016.

GAAP EPS and Adjusted EPS reflect weighted-average shares outstanding of 10,723,804 for the second quarter of 2017, compared to weighted-average shares outstanding of 9,172,944 for the second quarter of 2016.

Six Months Ended July 1, 2017 Financial Highlights

  • Total Revenues were $150.2 million in the first six months of 2017, an increase of 45.8% from the first six months of 2016. Gross Revenues – GAAP were $147.8 million in the first six months of 2017, an increase of 46.6% from the first six months of 2016
  • Net Revenues were $120.1 million in the first six months of 2017, an increase of 45.6% from the first six months of 2016
  • Organic revenue growth for the first six months of 2017 was 5%
  • EBITDA for the first six months of 2017 was $15.1 million, or 12.6% of Net Revenues, compared to $10.6 million or 12.8% of Net Revenues for the first six months of 2016
  • Gross Margin was 49.4% compared to 48.6% for the first six months of 2016
  • Net income was $6.6 million, an increase of 34.1% from $4.9 million in the first six months of 2016
  • Adjusted EPS was $0.92 per diluted share, an increase of 29.6% from $0.71 per diluted share in the first six months of 2016
  • GAAP EPS was $0.61 over 10.7 million shares, an increase of 7.0% compared to $0.57 per diluted share over 8.6 million shares in the first six months of 2016

Total Revenues for the six months ended July 1, 2017 were $150.2 million, a 45.8% increase from the first six months of 2016. 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 July 1, 2017 were $147.8 million, a 46.6% increase from the first six months of 2016. Net Revenues for the six months ended July 1, 2017 was $120.1 million, an increase of 45.6% from 2016.

Gross Margin for the six months ended July 1, 2017 was 49.4% compared to 48.6% for the first six months of 2016, 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 July 1, 2017 was $15.1 million or 12.6% of Net Revenues, an increase of 42.9% compared to $10.6 million or 12.8% of Net Revenues for the same period in 2016.

Adjusted EPS for the six months ended July 1, 2017 was $0.92 per diluted share versus $0.71 per diluted share in the six months ended June 30, 2016. Net income for the six months ended July 1, 2017 was $6.6 million, or $0.61 per diluted share, compared to net income of $4.9 million, or $0.57 per diluted share in the six months ended June 30, 2016.

GAAP EPS and Adjusted EPS reflect weighted-average shares outstanding of 10,721,744 for the six months ended July 1, 2017, compared to weighted-average shares outstanding of 8,640,022 for the first six months of 2016.

At July 1 2017, our cash and cash equivalents were $19.5 million compared to $35.7 million as of December 31, 2016.

At July 1, 2017, the Company reported backlog of $261.1 million, an increase of 16% from $225.2 million as of April 1, 2017.

2017 Outlook

The Company is raising its guidance for full-year 2017 Total Revenues and Earnings. The Company expects full-year 2017 Total Revenues, including the impact of acquisitions closed through July 1, 2017, to range from $340 million to $358 million, which represents an increase of 49% to 57% from 2016 Total Revenues of $228 million. The Company further expects that full-year 2017 Adjusted EPS will range from $2.22 to $2.36 per diluted share. Furthermore, the Company expects that full-year 2017 GAAP EPS will range from $1.62 to $1.76 per diluted share. This guidance for Total Revenues, Adjusted EPS and GAAP EPS excludes anticipated acquisitions for the remainder of 2017.                  

Use of Non-GAAP Financial Measures

Total Revenues and Net Revenues are not measures 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, net of tax benefits. 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 is 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 2017 financial results at 4:30 p.m. (Eastern Time) on August 3, 2017.

Date:      Thursday, August 3, 2017
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:    54982683
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.

The conference call will be webcast live via the “Investors” section of the NV5 website. A replay of the webcast will also be available under presentations.

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 out of more than 100 locations nationwide and abroad in Macau, Shanghai, Hong Kong, and Vietnam. 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)
         
    July 1, 2017   December 31, 2016
Assets        
Current assets:        
Cash and cash equivalents $   19,492 $   35,666
Accounts receivable, net of allowance for doubtful accounts of $2,694 and        
 $1,992 as of July 1, 2017 and December 31, 2016, respectively     104,474     75,511
Prepaid expenses and other current assets     3,876     1,874
Total current assets     127,842     113,051
Property and equipment, net     7,888     6,683
Intangible assets, net     71,094     40,861
Goodwill     98,536     59,380
Other assets     1,163     1,511
Total Assets  $   306,523  $   221,486
         
Liabilities and Stockholders’ Equity        
Current liabilities:        
Accounts payable $   18,945  $   13,509
Accrued liabilities     19,453     17,316
Income taxes payable     781     1,134
Billings in excess of costs and estimated earnings on uncompleted contracts     1,620     228
Client deposits     106     106
Current portion of contingent consideration      2,549     564
Current portion of notes payable and other obligations     11,010     10,764
Total current liabilities     54,464     43,621
Contingent consideration, less current portion     125     1,875
Notes payable and other obligations, less current portion     71,817     21,632
Deferred income tax liabilities, net     22,049     6,197
Total liabilities     148,455     73,325
         
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, 10,744,736 and 10,566,528        
shares issued and outstanding as of July 1, 2017 and December 31, 2016, respectively     107     106
Additional paid-in capital     121,343     118,026
Retained earnings     36,618     30,029
Total stockholders’ equity     158,068     148,161
Total liabilities and stockholders’ equity $   306,523  $   221,486
         
         
         


NV5 GLOBAL, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME  
(in thousands, except share data)  
(Unaudited)  
                   
                   
  Three Months Ended   Six Months Ended
    July 1,   June 30,   July 1,   June 30,  
    2017       2016       2017       2016  
               
Gross revenues $   83,736   $   55,892   $   147,795   $   100,797    
                   
Direct costs (excluding depreciation and amortization):                  
Salaries and wages     25,663       18,216       47,016       33,470    
Sub-consultant services     13,106       8,809       21,056       13,392    
Other direct costs     3,607       2,658       6,641       4,902    
Total direct costs     42,376       29,683       74,713       51,764    
                   
Gross Profit     41,360       26,209       73,082       49,033    
                   
Operating Expenses:                  
Salaries and wages, payroll taxes and benefits     21,110       14,038       39,757       26,479    
General and administrative     7,140       4,127       12,569       8,225    
Facilities and facilities related     2,991       2,016       5,615       3,737    
Depreciation and amortization     3,253       1,439       5,754       2,681    
Total operating expenses     34,494       21,620       63,695       41,122    
                   
Income from operations     6,866       4,589       9,387       7,911    
                   
Other expense:                  
Interest expense     (279 )     (71 )     (518 )     (140 )  
Total other expense     (279 )     (71 )     (518 )     (140 )  
                   
Income before income tax expense     6,587       4,518       8,869       7,771    
Income tax expense     (2,268 )     (1,659 )     (2,280 )     (2,857 )  
Net Income and Comprehensive Income $   4,319   $   2,859   $   6,589   $   4,914    
                   
Earnings per share:                  
Basic   $ 0.42     $ 0.33     $ 0.65     $ 0.59    
Diluted   $ 0.40     $ 0.31     $ 0.61     $ 0.57    
                   
Weighted average common shares outstanding:                  
Basic     10,171,969       8,793,471       10,127,610       8,262,248    
Diluted     10,723,804       9,172,944       10,721,744       8,640,022    
                   
                   
                   


NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except share data)
(Unaudited)
         
         
    Six Months Ended
    July 1, 2017   June 30, 2016
Cash Flows From Operating Activities:        
Net income $   6,589   $   4,914  
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization     5,754       2,681  
Provision for doubtful accounts     189       212  
Stock compensation     1,582       1,049  
Change in fair value of contingent consideration     42       87  
Loss on disposal of property and equipment     -       2  
Excess tax benefit from stock based compensation     -       (155 )
Deferred income taxes      286       52  
Changes in operating assets and liabilities, net of impact of acquisitions:        
Accounts receivable     (8,485 )     (6,419 )
Prepaid expenses and other assets      (355 )     30  
Accounts payable     (5 )     3,730  
Accrued liabilities     (2,106 )     460  
Income taxes payable     (353 )     52  
Billings in excess of costs and estimated earnings on uncompleted contracts     1,392       (135 )
Client deposits     (44 )     134  
Net cash provided by operating activities     4,486       6,694  
         
Cash Flows From Investing Activities:        
Cash paid for acquisitions (net of cash received from acquisitions)     (61,037 )     (24,085 )
Purchase of property and equipment     (991 )     (428 )
Net cash used in investing activities     (62,028 )     (24,513 )
         
Cash Flows From Financing Activities:        
Proceeds from borrowings from Senior Credit Facility     47,000       -  
Proceeds from secondary offering     -       51,319  
Payments of secondary offering costs     -       (4,075 )
Payments on notes payable     (5,070 )     (2,711 )
Payments of contingent consideration     (562 )     (296 )
Excess tax benefit from stock based compensation     -       155  
Proceeds from exercise of unit warrant     -       1,008  
Net cash provided by financing activities     41,368       45,400  
         
         
Net (decrease) increase in Cash and Cash Equivalents     (16,174 )     27,581  
Cash and cash equivalents – beginning of period     35,666       23,476  
Cash and cash equivalents – end of period $   19,492   $   51,057  
         
         
         

  




NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
           
     Six Months Ended 
    July 1, 2017     June 30, 2016
           
Supplemental disclosures of cash flow information:          
Cash paid for interest $   486   $   122
Cash paid for income taxes $   2,349   $   2,743
           
Non-cash investing and financing activities:          
Contingent consideration (earn-out)  $   818   $   - 
Notes payable and other obligations for acquisitions  $   8,950   $   8,833
Stock issuance for acquisitions  $   1,674   $   875
Payment of contingent consideration with common stock  $   62   $   163
           
           



NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GROSS REVENUES TO TOTAL REVENUES
(in thousands)
(Unaudited)
                   
      Three Months Ended   Six Months Ended
      July 1,   June 30,   July 1,   June 30,
      2017   2016   2017   2016
Gross Revenues - GAAP $ 83,736  $ 55,892  $ 147,795  $ 100,797
Add: Intercompany revenues in lieu of sub-consultants   1,328   1,221   2,362   2,183
Total Revenues $ 85,064  $ 57,113  $ 150,157  $ 102,980
                   


  NV5 GLOBAL, INC. AND SUBSIDIARIES 
RECONCILIATION OF GROSS REVENUES TO NET REVENUES
(in thousands)
(Unaudited)
                   
      Three Months Ended   Six Months Ended
      July 1,   June 30,   July 1,   June 30,
      2017     2016     2017     2016  
Gross Revenues - GAAP $ 83,736    $ 55,892    $ 147,795    $ 100,797  
Less: Sub-consultant services   (13,106 )   (8,809 )   (21,056 )   (13,392 )
  Other direct costs   (3,607 )   (2,658 )   (6,641 )   (4,902 )
Net Revenues $ 67,023    $ 44,425    $ 120,098    $ 82,503  
                   


NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO EBITDA
(in thousands)
(Unaudited)
                   
      Three Months Ended   Six Months Ended
      July 1,   June 30,   July 1,   June 30,
      2017   2016   2017   2016
Net Income $ 4,319  $ 2,859  $ 6,589  $ 4,914
Add: Interest expense   279   71   518   140
  Income tax expense   2,268   1,659   2,280   2,857
  Depreciation and Amortization   3,253   1,439   5,754   2,681
EBITDA $ 10,119  $ 6,028  $ 15,141  $ 10,592
                   
                   




NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EPS TO ADJUSTED EPS
(Unaudited)
                   
      Three Months Ended   Six Months Ended
      July 1,   June 30,   July 1,   June 30,
      2017     2016     2017     2016  
                   
Net Income - per diluted share $ 0.40    $ 0.31    $ 0.61    $ 0.57  
                   
Per diluted share adjustments:                
Add: Amortization expense of intangible assets 0.24     0.11     0.42     0.22  
  Income tax expense   (0.08 )   (0.04 )   (0.11 )   (0.08 )
Adjusted EPS $ 0.56    $ 0.38    $ 0.92    $ 0.71  
                   

 

Contact

NV5 Global, Inc.                                           
Lauren Wright, PhD
Director of Investor Relations
Tel: +1-646-795-3699
Email: ir@nv5.com

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NV5 Global, Inc.