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NV5 Announces Record First Quarter Results; Beats Consensus

HOLLYWOOD, Fla., May 07, 2020 (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 first quarter ended March 28, 2020.

In the first quarter, Gross Revenues increased 41%, Net Revenues increased 43%, Adjusted EBITDA increased 58%, and Adjusted Earnings Per Share increased 11%. “NV5 delivered a successful first quarter, including organic growth and beating consensus on both gross revenues and adjusted EPS.  We are fortunate that a majority of NV5 services are non-discretionary, minimizing the impact of economic cycles on business performance, and we have implemented COVID-19 business continuity procedures for our field-based personnel, office-based personnel, and technicians to minimize risks to employees and business performance.  NV5 continues to be in a stable and solid financial position, and is a highly-scalable organization with limited fixed costs.  We have taken proactive steps to manage costs during the COVID-19 outbreak, and we will continue to act quickly should any further adjustments be required,” said Dickerson Wright, PE, Chairman and CEO of NV5.

First Quarter 2020 Financial Highlights

  • Total Revenues for the first quarter of 2020 were $167.0 million compared to $118.0 million in the first quarter of 2019. Gross Revenues - GAAP for the first quarter of 2020 were $165.5 million compared to $117.3 million in the first quarter of 2019.

  • Net Revenues for the quarter were $129.6 million from $90.7 million in the first quarter of 2019.

  • Organic Net Revenue growth for the quarter was 4%.

  • Adjusted EBITDA for the first quarter of 2020, excluding stock compensation and acquisition-related costs, was $24.1 million, an increase from $15.3 million in the first quarter of 2019.

  • GAAP EPS was $0.33 per share in the first quarter of 2020 (based on 12,593,788 diluted shares outstanding) compared to $0.44 per share in the first quarter of 2019 (based on 12,463,007 diluted shares outstanding).

  • Adjusted EPS in the first quarter of 2020 was $0.84 per share (based on 12,593,788 diluted shares outstanding) compared to $0.76 in the first quarter of 2019 (based on 12,463,007 diluted shares outstanding).

2020 Outlook

The Company previously communicated its expectations regarding 2020 financial performance on February 26, 2020, shortly before the COVID-19 outbreak being declared a national emergency in the United States. While NV5's business benefits from being deemed "essential" in most aspects of its operations, the continuing effects of the COVID-19 pandemic cannot be estimated. Accordingly, NV5 Global is withdrawing previously provided guidance for fiscal 2020. NV5 may provide updated fiscal 2020 guidance if and when reliable information becomes available to management which makes such guidance meaningful to the Company's stakeholders.

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 utilizing third-party sub-consultants. The Company believes that Total Revenues and Net Revenues, which are non-GAAP financial measures commonly used in our industry, provide a meaningful perspective on our 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. 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. 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 Total Revenues, Net Revenues, 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 Gross Revenues, Net Income and Diluted Earnings per Share.

Conference Call

NV5 will host a conference call to discuss its first quarter 2020 financial results at 4:30 p.m. (Eastern Time) on May 7, 2020.  The accompanying presentation for the call is available by visiting http://ir.nv5.com.

   
Date:  Thursday, May 7, 2020
Time:  4:30 p.m. Eastern
Toll-free dial-in number:  +1 844-348-6875
International dial-in number:  +1 509-844-0152
Conference ID:  1049027
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 and available for replay via the “Investors” section of the NV5 website.

About NV5

NV5 Global, Inc. (NASDAQ: NVEE) is a provider of professional and technical engineering and consulting solutions ranked #27 on the Engineering News-Record’s Top 500 Design Firms list. NV5 serves public and private sector clients in the infrastructure, utilities, construction, real estate, and environmental markets. NV5 primarily focuses on six business verticals: construction quality assurance, infrastructure engineering and support services, utility services, program management, environmental solutions, and geospatial solutions. The Company operates out of more than 115 locations worldwide. 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)
 
  March 28, 2020   December 28, 2019
Assets      
Current assets:      
Cash and cash equivalents $ 38,326     $ 31,825  
Billed receivables, net 125,192     131,041  
Unbilled receivables, net 86,713     79,428  
Prepaid expenses and other current assets 8,220     8,906  
Total current assets 258,451     251,200  
Property and equipment, net 27,759     25,733  
Right-of-use lease assets, net 43,950     46,313  
Intangible assets, net 247,614     255,961  
Goodwill 310,206     309,216  
Other assets 3,438     4,714  
Total Assets $ 891,418     $ 893,137  
       
Liabilities and Stockholders’ Equity      
       
Current liabilities:      
Accounts payable $ 36,176     $ 36,116  
Accrued liabilities 41,087     47,432  
Income taxes payable 1,365      
Billings in excess of costs and estimated earnings on uncompleted contracts 4,507     3,303  
Client deposits 229     221  
Current portion of contingent consideration 1,079     1,954  
Current portion of notes payable and other obligations 24,946     25,332  
Total current liabilities 109,389     114,358  
Contingent consideration, less current portion 1,995     2,048  
Long-term lease liabilities 32,624     34,573  
Notes payable and other obligations, less current portion 331,317     332,854  
Deferred income tax liabilities, net 51,727     53,341  
Total liabilities 527,052     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, 12,874,424 and 12,852,357 shares
 issued and outstanding as of March 28, 2020 and December 28, 2019, respectively
129     129  
Additional paid-in capital 255,402     251,187  
Retained earnings 108,835     104,647  
Total stockholders’ equity 364,366     355,963  
Total liabilities and stockholders’ equity $ 891,418     $ 893,137  
               


 
NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
(in thousands, except share data)
 
  Three Months Ended
  March 28, 2020   March 30, 2019
Gross revenues $ 165,480     $ 117,335  
       
Direct costs (excluding depreciation and amortization):      
Salaries and wages 45,034     35,257  
Sub-consultant services 27,427     16,952  
Other direct costs 8,487     9,696  
Total direct costs 80,948     61,905  
       
Gross Profit 84,532     55,430  
       
Operating Expenses:      
Salaries and wages, payroll taxes and benefits 45,556     29,238  
General and administrative 13,157     8,862  
Facilities and facilities related 5,397     3,806  
Depreciation and amortization 11,040     6,113  
Total operating expenses 75,150     48,019  
       
Income from operations 9,382     7,411  
       
Interest expense (3,788 )   (351 )
       
Income before income tax expense 5,594     7,060  
Income tax expense (1,406 )   (1,517 )
Net Income and Comprehensive Income $ 4,188     $ 5,543  
       
Earnings per share:      
Basic $ 0.34     $ 0.46  
Diluted $ 0.33     $ 0.44  
       
Weighted average common shares outstanding:      
Basic 12,233,477     11,960,944  
Diluted 12,593,788     12,463,007  
           


 
NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
 
  Three Months Ended
  March 28, 2020   March 30, 2019
Cash Flows From Operating Activities:      
Net income $ 4,188     $ 5,543  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 11,040     6,113  
Non-cash lease expense 1,704     2,009  
Provision for doubtful accounts 215     206  
Stock based compensation 3,379     1,798  
Change in fair value of contingent consideration     49  
(Gain) loss on disposals of property and equipment (339 )   1  
Deferred income taxes (1,614 )   (463 )
Amortization of debt issuance costs 220      
Changes in operating assets and liabilities, net of impact of acquisitions:      
Billed receivables 6,053     8,995  
Unbilled receivables (7,764 )   3,350  
Prepaid expenses and other assets 1,962     (1,331 )
Accounts payable 44     (3,240 )
Accrued liabilities (8,061 )   (4,930 )
Income taxes payable 1,365     1,521  
Billings in excess of costs and estimated earnings on uncompleted contracts 1,204     (3,370 )
Deposits 7     62  
Net cash provided by operating activities 13,603     16,313  
       
Cash Flows From Investing Activities:      
Cash paid for acquisitions (net of cash received from acquisitions)     (8,000 )
Proceeds from sale of assets 425      
Purchase of property and equipment (4,525 )   (690 )
Net cash used in investing activities (4,100 )   (8,690 )
       
Cash Flows From Financing Activities:      
Payments on notes payable (2,116 )   (1,848 )
Payments of contingent consideration (650 )   (700 )
Payments of debt issuance costs (236 )    
Net cash used in financing activities (3,002 )   (2,548 )
       
Net increase in Cash and Cash Equivalents 6,501     5,075  
Cash and cash equivalents – beginning of period 31,825     40,739  
Cash and cash equivalents – end of period $ 38,326     $ 45,814  
               


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

RECONCILIATION OF GROSS REVENUES TO TOTAL REVENUES

    Three Months Ended
    March 28, 2020   March 30, 2019
Gross Revenues - GAAP $ 165,480     $ 117,335  
Add: Intercompany revenues in lieu of sub-consultants   1,479     711  
Total Revenues $ 166,959     $ 118,046  
               

RECONCILIATION OF GROSS REVENUES TO NET REVENUES

    Three Months Ended
    March 28, 2020   March 30, 2019
Gross Revenues - GAAP $ 165,480     $ 117,335  
Less: Sub-consultant services (27,427 )   (16,952 )
  Other direct costs (8,487 )   (9,696 )
Net Revenues $ 129,566     $ 90,687  
               

RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA

    Three Months Ended
    March 28, 2020   March 30, 2019
Net Income $ 4,188     $ 5,543  
Add: Interest expense 3,788     351  
  Income tax expense 1,406     1,517  
  Depreciation and Amortization 11,040     6,113  
  Share-based compensation 3,379     1,798  
  Acquisition-related costs 340      
Adjusted EBITDA $ 24,141     $ 15,322  
               

RECONCILIATION OF GAAP EPS TO ADJUSTED EPS

    Three Months Ended
    March 28, 2020   March 30, 2019
Net Income - per diluted share $ 0.33     $ 0.44  
Per diluted share adjustments:      
Add: Amortization expense of intangible assets and acquisition-related costs 0.69     0.40  
  Income tax expense (0.18 )   (0.09 )
Adjusted EPS $ 0.84     $ 0.76  

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Source: NV5 Global, Inc.