NV5 Announces Record Full Year 2022 Results and Issues Full Year 2023 Guidance

February 23, 2023

HOLLYWOOD, Fla., Feb. 23, 2023 (GLOBE NEWSWIRE) -- NV5 Global, Inc. (Nasdaq: NVEE) ("NV5" or the "Company"), a provider of technology, conformity assessment, and consulting solutions, today reported financial results for the full year ended December 31, 2022.

"We are pleased to have delivered another strong year for revenues and earnings in 2022, despite significant headwinds in the commercial economy due to historic interest rate increases. All three of our reporting segments grew in 2022, with a record performance by the geospatial business. We also completed five strategic acquisitions in 2022, strengthening our utility geospatial, building technology, and materials testing offerings. We anticipate a successful year in 2023. We enter 2023 with a strong backlog to drive organic growth and profitability, and we anticipate the best year for mergers and acquisitions in our history," said Dickerson Wright, PE, Chairman and CEO of NV5.

Full Year 2022 Financial Highlights

  • Gross revenues in 2022 were $786.8 million compared to $706.7 million in 2021, an 11% increase.
  • Net income in 2022 was $50.0 million compared to $47.1 million in 2021, a 6% increase.
  • Adjusted EBITDA in 2022 was $135.2 million compared to $132.9 million in 2021, a 2% increase.
  • GAAP EPS in 2022 was $3.27 per share compared to $3.22 per share in 2021, a 2% increase.
  • Adjusted EPS in 2022 was $5.19 per share compared to $5.11 per share in 2021, a 2% increase. Diluted weighted average shares outstanding were 15,260,186 in 2022 compared to 14,656,381 in 2021.
  • Cash flows from operating activities in 2022 were $94.0 million compared to $101.4 million in 2021. Cash flows from operations in 2022 included an income tax payment of $9.4 million as a result of new tax provisions that require capitalization and amortization of research and development costs.

Fiscal Year 2023 Guidance

  • Gross revenues between $878 million and $915 million.
  • GAAP EPS between $2.93 per share and $3.33 per share.
  • Adjusted EPS between $5.28 and $5.69 per share.

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 and acquisition-related costs, net of tax benefits. 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. In addition, when presenting forward-looking non-GAAP metrics, we are unable to provide quantitative reconciliations to the most closely correlated GAAP measure due to the uncertainty in the timing, amount or nature of any adjustments, which could be material in any period.

Conference Call 

NV5 will host a conference call to discuss its full year 2022 financial results at 4:30 p.m. (Eastern Time) on February 23, 2023. The accompanying presentation for the call is available by visiting http://ir.nv5.com.

Date: Thursday, February 23, 2023
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 technology, conformity assessment, and 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 services, 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)

  December 31, 2022   January 1, 2022
Assets      
Current assets:      
Cash and cash equivalents $ 38,541   $ 47,980
Billed receivables, net   145,637     153,814
Unbilled receivables, net   92,862     89,734
Prepaid expenses and other current assets   13,636     12,442
Total current assets   290,676     303,970
Property and equipment, net   41,640     32,729
Right-of-use lease assets, net   39,314     44,260
Intangible assets, net   160,431     188,224
Goodwill   400,957     389,916
Other assets   2,705     2,844
Total Assets $ 935,723   $ 961,943
       
Liabilities and Stockholders’ Equity      
       
Current liabilities:      
Accounts payable $ 57,771   $ 55,954
Accrued liabilities   44,313     50,461
Billings in excess of costs and estimated earnings on uncompleted contracts   31,183     29,444
Other current liabilities   1,597     1,551
Current portion of contingent consideration   10,854     5,807
Current portion of notes payable and other obligations   15,176     20,734
Total current liabilities   160,894     163,951
Contingent consideration, less current portion   4,481     2,521
Other long-term liabilities   29,542     34,304
Notes payable and other obligations, less current portion   39,673     111,062
Deferred income tax liabilities, net   6,893     25,385
Total liabilities   241,483     337,223
       
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, 15,523,300 and 15,414,005 shares issued and outstanding as of December 31, 2022 and January 1, 2022, respectively   155     154
Additional paid-in capital   471,300     451,754
Retained earnings   222,785     172,812
Total stockholders’ equity   694,240     624,720
Total liabilities and stockholders’ equity $ 935,723   $ 961,943
           

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
  December 31, 2022   January 1, 2022   December 31, 2022   January 1, 2022
Gross revenues $ 189,818     $ 188,555     $ 786,778     $ 706,706  
               
Direct costs:              
Salaries and wages   44,830       43,417       186,806       175,047  
Sub-consultant services   37,084       35,995       153,641       124,998  
Other direct costs   14,931       11,633       60,357       47,347  
Total direct costs   96,845       91,045       400,804       347,392  
               
Gross profit   92,973       97,510       385,974       359,314  
               
Operating expenses:              
Salaries and wages, payroll taxes, and benefits   46,769       45,077       193,488       176,838  
General and administrative   18,501       16,095       66,114       53,986  
Facilities and facilities related   5,431       4,863       21,252       20,193  
Depreciation and amortization   9,565       10,189       38,938       39,953  
Total operating expenses   80,266       76,224       319,792       290,970  
               
Income from operations   12,707       21,286       66,182       68,344  
               
Interest expense   (1,005 )     (878 )     (3,808 )     (6,239 )
               
Income before income tax expense   11,702       20,408       62,374       62,105  
Income tax expense   (3,702 )     (4,953 )     (12,401 )     (14,958 )
Net income and comprehensive income $ 8,000     $ 15,455     $ 49,973     $ 47,147  
               
Earnings per share:              
Basic $ 0.54     $ 1.05     $ 3.39     $ 3.34  
Diluted $ 0.52     $ 1.02     $ 3.27     $ 3.22  
               
Weighted average common shares outstanding:              
Basic   14,816,773       14,651,218       14,753,738       14,135,333  
Diluted   15,320,123       15,159,314       15,260,186       14,656,381  
                               

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

  Twelve Months Ended
  December 31, 2022   January 1, 2022
Cash flows from operating activities:      
Net income $ 49,973     $ 47,147  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization   44,063       44,971  
Non-cash lease expense   12,813       10,191  
Provision for doubtful accounts   (60 )     1,243  
Stock-based compensation   19,326       16,301  
Change in fair value of contingent consideration   2,972       2,333  
Gain on disposals of property and equipment   (328 )     (1,102 )
Deferred income taxes   (18,492 )     (7,007 )
Amortization of debt issuance costs   724       1,210  
Changes in operating assets and liabilities, net of impact of acquisitions:      
Billed receivables   10,212       2,677  
Unbilled receivables   (3,303 )     (12,573 )
Prepaid expenses and other assets   (1,125 )     (4,792 )
Accounts payable   (1,673 )     8,181  
Accrued liabilities and other long-term liabilities   (19,901 )     (12,507 )
Contingent consideration   (800 )      
Billings in excess of costs and estimated earnings on uncompleted contracts   (296 )     4,005  
Other current liabilities   (125 )     1,164  
Net cash provided by operating activities   93,980       101,442  
       
Cash flows from investing activities:      
Cash paid for acquisitions (net of cash received from acquisitions)   (5,908 )     (67,995 )
Proceeds from sale of assets   87       1,639  
Purchase of property and equipment   (15,689 )     (13,903 )
Net cash used in investing activities   (21,510 )     (80,259 )
       
Cash flows from financing activities:      
Borrowings from Senior Credit Facility         138,750  
Proceeds from common stock offering         172,500  
Payments of borrowings from Senior Credit Facility   (65,000 )     (323,832 )
Payments on notes payable   (15,445 )     (12,516 )
Payments of contingent consideration   (1,464 )     (1,329 )
Payments of common stock offering costs         (10,657 )
Payments of debt issuance costs         (976 )
Purchases of common stock tendered by employees to satisfy the required withholding taxes related to stock-based compensation         (52 )
Net cash used in financing activities   (81,909 )     (38,112 )
       
Net decrease in cash and cash equivalents   (9,439 )     (16,929 )
Cash and cash equivalents – beginning of period   47,980       64,909  
Cash and cash equivalents – end of period $ 38,541     $ 47,980  
               

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
    December 31, 2022   January 1, 2022   December 31, 2022   January 1, 2022
Net Income $ 8,000   $ 15,455   $ 49,973   $ 47,147
Add: Interest expense   1,005     878     3,808     6,239
  Income tax expense   3,702     4,953     12,401     14,958
  Depreciation and amortization   10,972     11,574     44,063     44,971
  Stock-based compensation   4,077     4,214     19,326     16,301
  Acquisition-related costs*   4,720     2,667     5,612     3,274
Adjusted EBITDA $ 32,476   $ 39,741   $ 135,183   $ 132,890

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

RECONCILIATION OF GAAP EPS TO ADJUSTED EPS

    Three Months Ended   Twelve Months Ended
    December 31, 2022   January 1, 2022   December 31, 2022   January 1, 2022
Net Income - per diluted share $ 0.52     $ 1.02     $ 3.27     $ 3.22  
Per diluted share adjustments:              
Add: Amortization expense of intangible assets   0.52       0.56       2.12       2.29  
  Acquisition-related costs*   0.30       0.18       0.36       0.22  
  Income tax expense   (0.13 )     (0.15 )     (0.56 )     (0.62 )
Adjusted EPS $ 1.21     $ 1.61     $ 5.19     $ 5.11  

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


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Source: NV5 Global, Inc.