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NV5 Announces Record Third Quarter Results; Exceeds Analyst Consensus

November 09, 2021

HOLLYWOOD, Fla., Nov. 09, 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 third quarter ended October 2, 2021.

"NV5 delivered another strong quarter, generating record revenues and net income in the third quarter and year to date in 2021. The core business’ year-over-year double digit revenue growth is a testament to the success of NV5’s strategic business model, resulting in sustainable growth and margin expansion," said Dickerson Wright, PE, Chairman and CEO of NV5. "Growth in the quarter was largely driven by demand for utility, real estate, and environmental, social, and governance (ESG) services. We continued to strengthen our ESG capabilities in the third quarter with the acquisition of Sage Renewable Energy Consulting, a leader in comprehensive sustainable energy planning and project management services. We enter the fourth quarter and 2022 with a record backlog that increased 13% for the quarter."

Third Quarter 2021 Results

  • Gross revenues in the third quarter of 2021 were $185.6 million compared to $169.9 million in the third quarter of 2020, a 9% increase.
  • Net income in the third quarter of 2021 was $12.6 million compared to $7.8 million in the third quarter of 2020, a 62% increase.
  • Adjusted EBITDA in the third quarter of 2021 was $34.7 million compared to $29.9 million in the third quarter of 2020, a 16% increase.
  • GAAP EPS in the third quarter of 2021 was $0.83 per share compared to $0.61 per share in the third quarter of 2020, a 36% increase.
  • Adjusted EPS in the third quarter of 2021 was $1.25 per share compared to $1.13 per share in the third quarter of 2020, an 11% increase. Diluted weighted average shares were 15,069,660 in the third quarter of 2021 compared to 12,749,917 in the third quarter of 2020.
  • Updated full year 2021 guidance as follows:
    • Increase GAAP EPS to a range of $2.60 per share to $2.91 per share (previously $2.45 per share to $2.84 per share).
    • Increase Adjusted EPS to a range of $4.36 per share to $4.62 per share (previously $4.20 per share to $4.55 per share).

Nine Months Ended October 2, 2021 Results

  • Gross revenues for the nine months ended October 2, 2021 were $518.2 million compared to $498.1 million in the nine months ended October 3, 2020, a 4% increase.
  • Cash flows from operations for the nine months ended October 2, 2021 were $78.1 million compared to $72.4 million in nine months ended October 3, 2020, an 8% increase.
  • Net income for the nine months ended October 2, 2021 was $31.7 million compared to $16.4 million in nine months ended October 3, 2020, a 93% increase.
  • Adjusted EBITDA for the nine months ended October 2, 2021 was $93.1 million compared to $81.0 million in the nine months ended October 3, 2020, a 15% increase.
  • GAAP EPS for the nine months ended October 2, 2021 was $2.19 per share compared to $1.30 per share in the nine months ended October 3, 2020, a 68% increase.
  • Adjusted EPS for the nine months ended October 2, 2021 was $3.50 per share compared to $2.91 per share in the nine months ended October 3, 2020, a 20% increase. Diluted weighted average shares were 14,486,683 for the nine months ended October 2, 2021 compared to 12,650,107 in the nine months ended October 3, 2020.

Fiscal Year

The Company operates on a “52/53 week” fiscal year ending on the Saturday closest to the calendar quarter end, and fiscal 2021 contains 52 weeks compared to fiscal 2020, which contained 53 weeks. As a result, the third quarter of fiscal 2021 ended October 2, 2021 included 13 weeks compared to the third quarter of fiscal 2020 ended October 3, 2020, which included 14 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 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.

Conference Call 

NV5 will host a conference call to discuss its third quarter 2021 financial results at 4:30 p.m. (Eastern Time) on November 9, 2021. The accompanying presentation for the call is available by visiting http://ir.nv5.com.

Date: Tuesday, November 9, 2021
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 compliance, technology, engineering, and environmental 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, 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 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)

  October 2, 2021   January 2, 2021
Assets      
Current assets:      
Cash and cash equivalents $ 121,397     $ 64,909  
Billed receivables, net 129,781     142,705  
Unbilled receivables, net 86,399     74,458  
Prepaid expenses and other current assets 10,529     6,804  
Total current assets 348,106     288,876  
Property and equipment, net 29,323     27,011  
Right-of-use lease assets, net 44,866     43,607  
Intangible assets, net 168,497     174,931  
Goodwill 366,200     343,796  
Other assets 3,892     2,954  
Total Assets $ 960,884     $ 881,175  
       
Liabilities and Stockholders’ Equity      
       
Current liabilities:      
Accounts payable $ 42,272     $ 39,989  
Accrued liabilities 55,251     45,325  
Billings in excess of costs and estimated earnings on uncompleted contracts 16,730     24,962  
Client deposits 620     380  
Current portion of contingent consideration 3,406     1,334  
Current portion of notes payable and other obligations 17,526     24,196  
Total current liabilities 135,805     136,186  
Contingent consideration, less current portion 1,531     1,066  
Other long-term liabilities 40,410     38,737  
Notes payable and other obligations, less current portion 149,862     283,326  
Deferred income tax liabilities, net 29,154     27,791  
Total liabilities 356,762     487,106  
       
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, 15,401,051 and 13,270,131 shares issued and outstanding as of October 2, 2021 and January 2, 2021, respectively 154     133  
Additional paid-in capital 446,612     268,271  
Retained earnings 157,356     125,665  
Total stockholders’ equity 604,122     394,069  
Total liabilities and stockholders’ equity $ 960,884     $ 881,175  


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
  October 2, 2021   October 3, 2020   October 2, 2021   October 3, 2020
Gross revenues $ 185,553     $ 169,949     $ 518,151     $ 498,118  
               
Direct costs:              
Salaries and wages 45,145     46,815     131,630     136,929  
Sub-consultant services 35,779     26,003     89,003     78,673  
Other direct costs 12,802     10,370     35,714     27,771  
Total direct costs 93,726     83,188     256,347     243,373  
               
Gross profit 91,827     86,761     261,804     254,745  
               
Operating expenses:              
Salaries and wages, payroll taxes and benefits 44,597     43,750     131,761     133,456  
General and administrative 12,978     13,216     37,891     38,196  
Facilities and facilities related 5,194     5,370     15,330     16,125  
Depreciation and amortization 10,108     10,187     29,764     32,387  
Total operating expenses 72,877     72,523     214,746     220,164  
               
Income from operations 18,950     14,238     47,058     34,581  
               
Interest expense (1,475 )   (3,731 )   (5,362 )   (11,921 )
               
Income before income tax expense 17,475     10,507     41,696     22,660  
Income tax expense (4,902 )   (2,753 )   (10,005 )   (6,215 )
Net income and comprehensive income $ 12,573     $ 7,754     $ 31,691     $ 16,445  
               
Earnings per share:              
Basic $ 0.86     $ 0.62     $ 2.27     $ 1.33  
Diluted $ 0.83     $ 0.61     $ 2.19     $ 1.30  
               
Weighted average common shares outstanding:              
Basic 14,593,623     12,434,600     13,963,372     12,328,448  
Diluted 15,069,660     12,749,917     14,486,683     12,650,107  


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

  Nine Months Ended
  October 2, 2021   October 3, 2020
Cash flows from operating activities:      
Net income $ 31,691     $ 16,445  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 33,397     34,680  
Non-cash lease expense 7,941     6,731  
Provision for doubtful accounts 1,077     3,127  
Stock-based compensation 12,087     10,900  
Change in fair value of contingent consideration (67 )    
Gain on disposals of property and equipment (1,059 )   (394 )
Deferred income taxes (4,318 )   (5,905 )
Amortization of debt issuance costs 1,024     669  
Changes in operating assets and liabilities, net of impact of acquisitions:      
Billed receivables 16,728     8,089  
Unbilled receivables (10,024 )   (7,505 )
Prepaid expenses and other assets (4,160 )   2,171  
Accounts payable 1,366     (2,780 )
Accrued liabilities 403     322  
Billings in excess of costs and estimated earnings on uncompleted contracts (8,233 )   5,706  
Deposits 218     163  
Net cash provided by operating activities 78,071     72,419  
       
Cash flows from investing activities:      
Cash paid for acquisitions (net of cash received from acquisitions) (23,569 )   (882 )
Proceeds from sale of assets 843     1,053  
Purchase of property and equipment (6,714 )   (8,342 )
Net cash used in investing activities (29,440 )   (8,171 )
       
Cash flows from financing activities:      
Borrowings from Senior Credit Facility 138,750      
Proceeds from common stock offering 172,500      
Payments on notes payable (7,299 )   (9,941 )
Payments of contingent consideration (663 )   (913 )
Payments of borrowings from Senior Credit Facility (283,832 )   (20,750 )
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 )   (447 )
Net cash provided by (used in) financing activities 7,857     (32,051 )
       
Net increase in cash and cash equivalents 56,488     32,197  
Cash and cash equivalents – beginning of period 64,909     31,825  
Cash and cash equivalents – end of period $ 121,397     $ 64,022  


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
    October 2, 2021   October 3, 2020   October 2, 2021   October 3, 2020
Net Income $ 12,573     $ 7,754     $ 31,691     $ 16,445  
Add: Interest expense 1,475     3,731     5,362     11,921  
  Income tax expense 4,902     2,753     10,005     6,215  
  Depreciation and amortization 11,461     11,401     33,397     34,680  
  Stock-based compensation 4,297     4,020     12,087     10,900  
  Acquisition-related costs* (23 )   274     607     845  
Adjusted EBITDA $ 34,685     $ 29,933     $ 93,149     $ 81,006  

* Acquisition-related costs includes contingent consideration fair value adjustments.

RECONCILIATION OF GAAP EPS TO ADJUSTED EPS

    Three Months Ended   Nine Months Ended
    October 2, 2021   October 3, 2020   October 2, 2021   October 3, 2020
Net Income - per diluted share $ 0.83     $ 0.61     $ 2.19     $ 1.30  
Per diluted share adjustments:              
Add: Amortization expense of intangible assets and acquisition-related costs 0.57     0.70     1.77     2.16  
  Income tax expense (0.15 )   (0.18 )   (0.46 )   (0.55 )
Adjusted EPS $ 1.25     $ 1.13     $ 3.50     $ 2.91  

 


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Source: NV5 Global, Inc.

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