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NV5 Announces Strong First Quarter Results; Delivers Record Cash Flows and Issues Full-Year 2021 Guidance Exceeding Analyst Consensus

May 12, 2021

HOLLYWOOD, Fla., May 12, 2021 (GLOBE NEWSWIRE) -- NV5 Global, Inc. (Nasdaq: NVEE) ("NV5" or the "Company"), a leading provider of compliance, technology, and engineering consulting solutions, today reported financial results for the first quarter ended April 3, 2021.

“We are pleased with our first quarter performance, which generated $48 million in cash flows from operations and delivered increases in net income, adjusted EBITDA margins, and earnings per share. These positive results were accomplished despite weather-related project delays that significantly postponed projects in the quarter. The COVID-19 pandemic also limited revenue generation for some of our services. Demand for our utility, infrastructure, and public sector services continues to be strong, driving a 5% increase in our backlog for the quarter. We anticipate increased growth opportunities as the economy continues to open throughout the year. In addition, the strength of our balance sheet allows us to invest in acquisitions that support our platform and expand our high-margin offerings,” said Dickerson Wright, PE, Chairman and CEO of NV5.

First Quarter 2021 Results

  • Resume full year 2021 guidance as follows:
    • Increase gross revenues to $695 million to $720 million
    • Increase GAAP EPS to $2.36 per share to $2.78 per share
    • Increase Adjusted EPS to $4.05 per share to $4.45 per share
  • Gross revenues were $153.1 million compared to $165.5 million in the pre-pandemic first quarter of 2020.
  • Cash flows from operations for the first quarter of 2021 were $48.2 million, more than three times the cash flows from operations in the first quarter of 2020 of $13.6 million.
  • Completed a secondary offering for which the Company received $141.0 million in net proceeds.
  • Reduced debt by $135.2 million, bringing net leverage to 0.8x funded by strong cash flows from operations and secondary offering proceeds.
  • Net income grew by 31% in the first quarter of 2021 to $5.5 million compared to $4.2 million in the first quarter of 2020.
  • Adjusted EBITDA, which excludes stock-based compensation and acquisition-related costs, grew in the first quarter of 2021 to $24.2 million compared to $24.1 million in the first quarter of 2020.
  • GAAP EPS in the first quarter of 2021 was $0.41 per share compared to $0.33 per share in the first quarter of 2020, a 24% increase.
  • Adjusted EPS in the first quarter of 2021 was $0.88 per share compared to $0.84 per share in the first quarter of 2020, a 5% increase. Diluted weighted average shares were 13,429,102 in the first quarter of 2021 compared to 12,593,788 in the first quarter of 2020.

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 first quarter 2021 financial results at 4:30 p.m. (Eastern Time) on May 12, 2021. The accompanying presentation for the call is available by visiting http://ir.nv5.com.

Date: Wednesday, May 12, 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: 2088906
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 engineering, utility services, buildings & program management, environmental health sciences, and geospatial 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)
 
  April 3, 2021   January 2, 2021
Assets      
Current assets:      
Cash and cash equivalents $ 92,925     $ 64,909  
Billed receivables, net 108,921     142,705  
Unbilled receivables, net 72,967     74,458  
Prepaid expenses and other current assets 8,085     6,804  
Total current assets 282,898     288,876  
Property and equipment, net 29,143     27,011  
Right-of-use lease assets, net 42,419     43,607  
Intangible assets, net 179,711     174,931  
Goodwill 359,101     343,796  
Other assets 3,059     2,954  
Total Assets $ 896,331     $ 881,175  
       
Liabilities and Stockholders’ Equity      
       
Current liabilities:      
Accounts payable $ 34,014     $ 39,989  
Accrued liabilities 53,797     45,325  
Billings in excess of costs and estimated earnings on uncompleted contracts 17,721     24,962  
Client deposits 480     380  
Current portion of contingent consideration 3,423     1,334  
Current portion of notes payable and other obligations 26,896     24,196  
Total current liabilities 136,331     136,186  
Contingent consideration, less current portion 697     1,066  
Other long-term liabilities 37,841     38,737  
Notes payable and other obligations, less current portion 145,443     283,326  
Deferred income tax liabilities, net 28,830     27,791  
Total liabilities 349,142     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, 14,933,927 and 13,270,131 shares issued and outstanding as of April 3, 2021 and January 2, 2021, respectively 149     133  
Additional paid-in capital 415,895     268,271  
Retained earnings 131,145     125,665  
Total stockholders’ equity 547,189     394,069  
Total liabilities and stockholders’ equity $ 896,331     $ 881,175  

 

 
NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
(in thousands, except share data)
 
  Three Months Ended
  April 3, 2021   March 28, 2020
Gross revenues $ 153,095     $ 165,480  
       
Direct costs:      
Salaries and wages 41,459     45,034  
Sub-consultant services 23,246     27,427  
Other direct costs 9,798     8,487  
Total direct costs 74,503     80,948  
       
Gross profit 78,592     84,532  
       
Operating expenses:      
Salaries and wages, payroll taxes and benefits 42,951     45,556  
General and administrative 11,549     13,157  
Facilities and facilities related 5,097     5,397  
Depreciation and amortization 9,440     11,040  
Total operating expenses 69,037     75,150  
       
Income from operations 9,555     9,382  
       
Interest expense (2,318 )   (3,788 )
       
Income before income tax expense 7,237     5,594  
Income tax expense (1,757 )   (1,406 )
Net income and comprehensive income $ 5,480     $ 4,188  
       
Earnings per share:      
Basic $ 0.43     $ 0.34  
Diluted $ 0.41     $ 0.33  
       
Weighted average common shares outstanding:      
Basic 12,876,822     12,233,477  
Diluted 13,429,102     12,593,788  

 

 
NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
 
  Three Months Ended
  April 3, 2021   March 28, 2020
Cash flows from operating activities:      
Net income $ 5,480     $ 4,188  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 10,542     11,040  
Non-cash lease expense 2,161     1,704  
Provision for doubtful accounts (536 )   215  
Stock-based compensation 3,696     3,379  
Change in fair value of contingent consideration 209      
Gain on disposals of property and equipment (530 )   (339 )
Deferred income taxes (2,282 )   (1,614 )
Amortization of debt issuance costs 227     220  
Changes in operating assets and liabilities, net of impact of acquisitions:      
Billed receivables 36,037     6,053  
Unbilled receivables 2,032     (7,764 )
Prepaid expenses and other assets (1,114 )   1,962  
Accounts payable (6,332 )   44  
Accrued liabilities 2,629     (8,061 )
Income taxes payable 3,085     1,365  
Billings in excess of costs and estimated earnings on uncompleted contracts (7,241 )   1,204  
Deposits 92     7  
Net cash provided by operating activities 48,155     13,603  
       
Cash flows from investing activities:      
Cash paid for acquisitions (net of cash received from acquisitions) (15,007 )    
Proceeds from sale of assets 460     425  
Purchase of property and equipment (1,470 )   (4,525 )
Net cash used in investing activities (16,017 )   (4,100 )
       
Cash flows from financing activities:      
Proceeds from common stock offering 150,000      
Payments on notes payable (1,669 )   (2,116 )
Payments of contingent consideration (150 )   (650 )
Payments of borrowings from Senior Credit Facility (143,207 )    
Payments of common stock offering costs (9,044 )    
Purchases of common stock tendered by employees to satisfy the required withholding taxes related to stock-based compensation (52 )    
Payments of debt issuance costs     (236 )
Net cash used in financing activities (4,122 )   (3,002 )
       
Net increase in cash and cash equivalents 28,016     6,501  
Cash and cash equivalents – beginning of period 64,909     31,825  
Cash and cash equivalents – end of period $ 92,925     $ 38,326  

 

 
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
    April 3, 2021   March 28, 2020
Net Income $ 5,480     $ 4,188  
Add: Interest expense   2,318       3,788  
  Income tax expense   1,757       1,406  
  Depreciation and amortization   10,542       11,040  
  Stock-based compensation   3,696       3,379  
  Acquisition-related costs   449       340  
Adjusted EBITDA $ 24,242     $ 24,141  
                 
RECONCILIATION OF GAAP EPS TO ADJUSTED EPS
                 
    Three Months Ended
    April 3, 2021   March 28, 2020
Net Income - per diluted share $ 0.41     $ 0.33  
Per diluted share adjustments:              
Add: Amortization expense of intangible assets and acquisition-related costs   0.63       0.69  
  Income tax expense   (0.16 )     (0.18 )
Adjusted EPS $ 0.88     $ 0.84  

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Source: NV5 Global, Inc.

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