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NV5 Announces Record Fourth Quarter and Full Year 2020 Results; Exceeds Analysts' Expectations

March 02, 2021

HOLLYWOOD, Fla., March 02, 2021 (GLOBE NEWSWIRE) -- NV5 Global, Inc. (Nasdaq: NVEE) (“NV5” or the “Company”), a provider of compliance, technology, and engineering consulting solutions, today reported financial results for the fourth quarter and full year ended January 2, 2021.

“NV5 delivered another strong performance in 2020 with significant growth in revenues, EBITDA, margin, and cash flows from operations in spite of the coronavirus pandemic. The integration of our acquisitions delivered margin improvement through efficiencies of scale and our shared services model, and strong cash flows allowed accelerated payments of our debt revolver. We enter 2021 with strong momentum and expect to see benefits from a market focus on reliable delivery of power and environmental sustainability, a healthy acquisition pipeline, and the reopening of the economy throughout 2021,” said Dickerson Wright, PE, Chairman and CEO of NV5.

Fourth Quarter 2020 Financial Highlights

  • Gross Revenues grew by 22% in the fourth quarter of 2020 to $161.2 million compared to $132.6 million in the fourth quarter of 2019.
  • Net income grew by 28% in the fourth quarter of 2020 to $4.6 million compared to $3.6 million in the fourth quarter of 2019, with the fourth quarter of 2020 including $2.2 million of additional interest expense and $3.0 million of additional intangible amortization expense compared to fourth quarter of 2019.
  • Adjusted EBITDA, which excludes stock-based compensation and acquisition-related costs, grew by 37% in the fourth quarter of 2020 to $24.4 million compared to $17.9 million in the fourth quarter of 2019.
  • GAAP EPS was $0.35 per share in the fourth quarter of 2020.
  • Adjusted EPS in the fourth quarter of 2020 was $0.82 per share compared to $0.64 per share in the fourth quarter of 2019, a 28% increase.
  • Cash flows from operating activities for the fourth quarter of 2020 grew to $23.6 million compared to $18.3 million in the fourth quarter of 2019, a 29% increase.

Full Year 2020 Financial Highlights

  • Gross Revenues grew by 30% in 2020 to $659.3 million compared to $508.9 million in 2019.
  • Net income in 2020 was $21.0 million compared to $23.8 million in 2019, with 2020 including $12.9 million of additional interest expense, $14.1 million of additional intangible amortization expense, and a higher effective income tax rate compared to 2019.
  • Adjusted EBITDA, which excludes stock-based compensation and acquisition-related costs, grew by 52% in 2020 to $105.4 million compared to $69.3 million in 2019.
  • GAAP EPS was $1.65 per share in 2020.
  • Adjusted EPS in 2020 was $3.72 per share compared to $3.25 per share in 2019, a 14% increase.
  • Cash flows from operating activities in 2020 were $96.0 million compared to $39.9 million in 2019, a 141% increase.

52/53 Week Fiscal Year

NV5 uses a 52/53 week fiscal year ending on the Saturday closest to the calendar quarter end. As a result, 2020 included 53 weeks compared to 2019, which included 52 weeks.

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 will likely 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.

Conference Call 

NV5 will host a conference call to discuss its fourth quarter and full year 2020 financial results at 4:30 p.m. (Eastern Time) on March 2, 2021. The accompanying presentation for the call is available by visiting http://ir.nv5.com.

Date: Tuesday, March 2, 2021
Time: 4:30 p.m. Eastern
Toll-free dial-in number: +1 833-900-1538
International dial-in number: +1 236-712-2278
Conference ID: 4096283
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 compliance, technology, and engineering consulting solutions for public and private sector clients supporting infrastructure, utility, and building assets and systems. The Company primarily focuses on six business verticals: testing, inspection & consulting, infrastructure support services, utility services, buildings & program management, environmental health sciences, and geospatial technology services. NV5 operates out of more than 106 offices nationwide and abroad.  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 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)

  January 2, 2021   December 28, 2019
Assets      
Current assets:      
Cash and cash equivalents $ 64,909     $ 31,825  
Billed receivables, net 142,705     131,041  
Unbilled receivables, net 74,458     79,428  
Prepaid expenses and other current assets 6,804     8,906  
Total current assets 288,876     251,200  
Property and equipment, net 27,011     25,733  
Right-of-use lease assets, net 43,607     46,313  
Intangible assets, net 174,931     255,961  
Goodwill 343,796     309,216  
Other assets 2,954     4,714  
Total Assets $ 881,175     $ 893,137  
       
Liabilities and Stockholders’ Equity      
       
Current liabilities:      
Accounts payable $ 39,989     $ 36,116  
Accrued liabilities 45,325     47,432  
Billings in excess of costs and estimated earnings on uncompleted contracts 24,962     3,303  
Client deposits 380     221  
Current portion of contingent consideration 1,334     1,954  
Current portion of notes payable and other obligations 24,196     25,332  
Total current liabilities 136,186     114,358  
Contingent consideration, less current portion 1,066     2,048  
Other long-term liabilities 38,737     34,573  
Notes payable and other obligations, less current portion 283,326     332,854  
Deferred income tax liabilities, net 27,791     53,341  
Total liabilities 487,106     537,174  
       
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, 13,270,131 and 12,852,357 shares issued and outstanding as of January 2, 2021 and          
December 28, 2019, respectively 133     129  
Additional paid-in capital 268,271     251,187  
Retained earnings 125,665     104,647  
Total stockholders’ equity 394,069     355,963  
Total liabilities and stockholders’ equity $ 881,175     $ 893,137  



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

  Three Months Ended   Twelve Months Ended
  January 2, 2021   December 28, 2019   January 2, 2021   December 28, 2019
Gross revenues $ 161,178     $ 132,598     $ 659,296     $ 508,938  
               
Direct costs:              
Salaries and wages 39,936     39,261     176,865     153,023  
Sub-consultant services 28,929     22,629     107,602     79,598  
Other direct costs 12,519     5,690     40,291     30,935  
Total direct costs 81,384     67,581     324,758     263,556  
               
Gross Profit 79,794     65,017     334,538     245,382  
               
Operating Expenses:              
Salaries and wages, payroll taxes and benefits 43,360     35,126     176,816     128,558  
General and administrative 12,019     11,871     50,214     42,656  
Facilities and facilities related 5,155     4,737     21,280     17,145  
Depreciation and amortization 9,691     6,908     42,079     25,816  
Total operating expenses 70,225     58,643     290,389     214,175  
               
Income from operations 9,569     6,374     44,149     31,207  
               
Interest expense (3,260 )   (1,045 )   (15,181 )   (2,275 )
               
Income before income tax expense 6,309     5,329     28,968     28,932  
Income tax expense (1,735 )   (1,754 )   (7,950 )   (5,176 )
Net Income and Comprehensive Income $ 4,574     $ 3,575     $ 21,018     $ 23,756  
               
Earnings per share:              
Basic $ 0.37     $ 0.29     $ 1.70     $ 1.96  
Diluted $ 0.35     $ 0.28     $ 1.65     $ 1.90  
               
Weighted average common shares outstanding:              
Basic 12,468,444     12,204,650     12,362,786     12,116,185  
Diluted 12,922,121     12,589,800     12,713,075     12,513,034  



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

  Twelve Months Ended
  January 2, 2021   December 28, 2019
Cash flows from operating activities:      
Net income $ 21,018     $ 23,756  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 45,488     25,816  
Non-cash lease expense 9,469     9,410  
Provision for doubtful accounts 4,311     1,239  
Stock-based compensation 14,955     10,430  
Change in fair value of contingent consideration     (216 )
(Gain) loss on disposals of property and equipment (462 )   21  
Deferred income taxes (13,064 )   (6,634 )
Amortization of debt issuance costs 896     131  
Changes in operating assets and liabilities, net of impact of acquisitions:      
Billed receivables (13,592 )   5,140  
Unbilled receivables 1,996     (11,807 )
Prepaid expenses and other assets 4,680     (3,599 )
Accounts payable 3,367     534  
Accrued liabilities (4,865 )   (7,315 )
Income taxes payable     (2,697 )
Billings in excess of costs and estimated earnings on uncompleted contracts 21,659     (4,322 )
Deposits 153     13  
Net cash provided by operating activities 96,009     39,900  
       
Cash flows from investing activities:      
Cash paid for acquisitions (net of cash received from acquisitions) (882 )   (348,375 )
Proceeds from sale of assets 1,670      
Purchase of property and equipment (9,855 )   (2,625 )
Net cash used in investing activities (9,067 )   (351,000 )
       
Cash flows from financing activities:      
Borrowings from Senior Credit Facility     330,457  
Payments of borrowings from Senior Credit Facility (36,625 )   (10,000 )
Payments on notes payable (15,207 )   (13,393 )
Payments of contingent consideration (1,579 )   (1,202 )
Payments of debt issuance costs (447 )   (3,676 )
Net cash (used in) provided by financing activities (53,858 )   302,186  
       
Net increase (decrease) in cash and cash equivalents 33,084     (8,914 )
Cash and cash equivalents – beginning of period 31,825     40,739  
Cash and cash equivalents – end of period $ 64,909     $ 31,825  



NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP FINANCIAL MEASURES
TO COMPARABLE NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
(in thousands, except share data)


RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA

    Three Months Ended
  Twelve Months Ended
    January 2, 2021   December 28, 2019   January 2, 2021   December 28, 2019
Net Income 4,574     $ 3,575     $ 21,018     $ 23,756  
Add: Interest expense   3,260       1,045       15,181       2,275  
  Income tax expense   1,735       1,754       7,950       5,176  
  Deprecation and amortization   10,808       6,908       45,488       25,816  
  Stock-based compensation   4,055       3,441       14,955       10,430  
  Acquisition-related costs   11       1,148       856       1,819  
Adjusted EBITDA $ 24,443      $ 17,871     105,448     $ 69,272  


RECONCILIATION OF GAAP EPS TO ADJUSTED EPS

    Three Months Ended   Twelve Months Ended
    January 2, 2021   December 28, 2019   January 2, 2021   December 28, 2019
Net Income - per diluted share $ 0.35      $ 0.28      $ 1.65      $ 1.90   
Per diluted share adjustments:              
Add: Amortization expense of intangible assets and acquisition-related costs 0.63     0.50     2.79     1.79  
  Income tax expense (0.16 )   (0.14 )   (0.72 )   (0.44 )
Adjusted EPS $ 0.82      $ 0.64      $ 3.72      $ 3.25   

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Source: NV5 Global, Inc.

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