Document
false0001532961 0001532961 2019-08-07 2019-08-07


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported) August 7, 2019
 
NV5 GLOBAL, INC.
(Exact Name of Registrant as Specified in Its Charter)
 
Delaware
001-35849
45-3458017
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
 
 
 
 
  200 South Park Road,
  Suite 350
 
33021
Hollywood,
Florida
 
 
(Address of Principal Executive Offices)
 
(Zip Code)

 
(954) 495-2112

(Registrant’s Telephone Number, Including Area Code)
n/a
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
        Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
        Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
        Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
        Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
Securities registered pursuant to Section 12(b) of the Exchange Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value
NVEE
The NASDAQ Stock Market





Item 2.02    Results of Operations and Financial Condition.
 
On August 7, 2019, NV5 Global, Inc. (the “Company”) issued a press release reporting its unaudited financial results for the second quarter ended June 29, 2019. The information contained in this Item 2.02 (including Exhibit 99.1) is furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

The Company does not have, and expressly disclaims, any obligation to release publicly any updates or any changes in the Company’s expectations or any change in events, conditions, or circumstances on which any forward-looking statement is based, except as required by law.

Item 9.01    Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.
Description
 
 
99.1





SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Dated: August 7, 2019
 
 
NV5 GLOBAL, INC.
 
 
 
By:       /s/ Edward Codispoti                                    
Name: Edward Codispoti
Title: Chief Financial Officer


Document


Exhibit 99.1
 
 

NV5 ANNOUNCES RECORD SECOND QUARTER 2019 RESULTS AND INCREASES FULL YEAR REVENUE GUIDANCE
 
Hollywood, FL – August 7, 2019 – 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 second quarter ended June 29, 2019.
 
In the second quarter, Gross Revenues increased 23%, EBITDA increased 20%, and Net Income increased 15%. Our backlog also increased by 43% compared to the second quarter of 2018 and cash flows from operating activities for the six months ended June 29, 2019 increased 61% compared to the six months ended June 30, 2018. “The continued success of NV5 as measured by increased revenue and income, as well as an expanding backlog can be attributed to our focus on being sensitive to our clients’ needs and adding value to their projects. NV5 has made six acquisitions in 2019. We feel these acquisitions will strengthen our existing verticals and provide greater opportunities for organic growth. The successful integration of our acquisitions is an ongoing process that promotes inclusion and shared values along with a team approach to everything we do,” said Dickerson Wright, PE, Chairman and CEO of NV5.
 
Second Quarter 2019 Financial Highlights
Total Revenues for the quarter were $128.9 million, an increase of 23% year-over-year. Gross Revenues - GAAP for the quarter were $128.0 million, an increase of 23% year-over-year.
Net Revenues for the quarter were $99.5 million, an increase of 18% year-over-year.
Organic revenue growth for the quarter was 6% compared to the period ended March 30, 2019.
EBITDA for the quarter was $15.8 million or 16% of Net Revenues, an increase of 20% from $13.2 million, or 16% of Net Revenues in the second quarter of 2018.
Net Income for the quarter was $8.8 million, an increase of 15% compared to $7.6 million in the second quarter of 2018
Adjusted EPS for the quarter was $1.00 per diluted share, an increase of 10% from $0.91 in the second quarter of 2018.
Backlog was $451 million as of June 29, 2019, a 43% increase from $315 million as of June 30, 2018.
Cash and cash equivalents increased 177% to $44.4 million for the quarter compared to $16.0 million in the second quarter of 2018.

Six Months Ended June 29, 2019 Financial Highlights
Total Revenues for the six months ended June 29, 2019 were $247.0 million, an increase of 23% year-over-year. Gross Revenues - GAAP for the six months ended June 29, 2019 were $245.3 million, an increase of 24% year-over-year.
Net Revenues for the six months ended June 29, 2019 were $190.2 million, an increase of 18% year-over-year.
EBITDA for the six months ended June 29, 2019 was $29.4 million or 15% of Net Revenues, an increase of 26% from $23.3 million, or 14% of Net Revenues for the six months ended June 30, 2018.
Net Income for the six months ended June 29, 2019 was $14.3 million, an increase of 20% compared to $11.9 million for the six months ended June 30, 2018.
Adjusted EPS for the six months ended June 29, 2019 was $1.77 per diluted share, an increase of 17% from $1.51 for the six months ended June 30, 2018.
Cash flows from operating activities increased 61% to $17.4 million for the six months ended June 29, 2019 compared to $10.8 million for the six months ended June 30, 2018.





2019 Outlook
 
The Company is raising revenue guidance for full year 2019 Gross Revenues and Net Revenues, including the impact of acquisitions closed through July 29, 2019. The Company expects Gross Revenues to range from $530 million to $545 million, which represents an increase of 27% to 30% from 2018 Gross Revenues of $418 million. Net Revenues are expected to range from $413 million to $430 million, which represents an increase of 24% to 29% from 2018 Net Revenues of $334 million. The Company expects full year 2019 Adjusted EPS to range from $3.81 per share to $4.08 per share, an increase of 18% to 26% over 2018 adjusted EPS of $3.24 per share. Furthermore, the Company expects full year 2019 GAAP EPS to range from $2.57 per share to $2.84 per share. This guidance for Gross Revenues, Net Revenues, Adjusted EPS and GAAP EPS excludes any acquisitions that may occur during the remainder of 2019.

 
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. Management believes 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 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, 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 second quarter 2019 financial results at 4:30 p.m. (Eastern Time) on August 7, 2019.

Date:    Wednesday, August 7, 2019
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:    5153548
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 #34 on the Engineering News-Record’s Top 500 Design Firms list. NV5 serves public and private sector clients in the infrastructure, energy, construction, real estate and environmental markets. NV5 primarily focuses on five business verticals: construction quality assurance, infrastructure engineering and support services, energy, program management, and environmental solutions. The Company operates out of more than 100 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
(in thousands, except share data)
(Unaudited) 
 
June 29, 2019
 
December 29, 2018
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
44,436

 
$
40,739

Billed receivables, net
97,593

 
98,324

Unbilled receivables, net
49,808

 
43,411

Prepaid expenses and other current assets
12,215

 
2,582

Total current assets
204,052

 
185,056

Property and equipment, net
12,129

 
11,677

Right-of-use lease asset, net
35,566

 

Intangible assets, net
98,941

 
99,756

Goodwill
151,788

 
140,930

Other assets
1,971

 
2,002

Total Assets
$
504,447

 
$
439,421

 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
19,612

 
$
22,588

Accrued liabilities
35,565

 
20,853

Income taxes payable
360

 
2,697

Billings in excess of costs and estimated earnings on uncompleted contracts
2,243

 
7,625

Client deposits
256

 
208

Current portion of contingent consideration
1,895

 
1,845

Current portion of notes payable and other obligations
16,687

 
17,139

Total current liabilities
76,618

 
72,955

Contingent consideration, less current portion
2,195

 
2,853

Long-term lease liability
27,736

 

Notes payable and other obligations, less current portion
40,189

 
29,847

Deferred income tax liabilities, net
18,708

 
16,224

Total liabilities
165,446

 
121,879

 
 
 
 
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, 12,657,841 and 12,550,771 shares issued and outstanding as of June 29, 2019 and December 29, 2018, respectively
127

 
126

Additional paid-in capital
243,646

 
236,525

Retained earnings
95,228

 
80,891

Total stockholders’ equity
339,001

 
317,542

Total liabilities and stockholders’ equity
$
504,447

 
$
439,421






NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME
(in thousands, except share data)
(Unaudited) 
 
Three Months Ended
 
Six Months Ended
 
June 29, 2019
 
June 30, 2018
 
June 29, 2019
 
June 30, 2018
Gross revenues
$
127,974

 
$
104,018

 
$
245,309

 
$
198,552

 
 
 
 
 
 
 
 
Direct costs (excluding depreciation and amortization):
 
 
 
 
 
 
 
Salaries and wages
38,080

 
33,546

 
73,337

 
64,067

Sub-consultant services
20,044

 
14,900

 
36,996

 
28,360

Other direct costs
8,410

 
4,870

 
18,106

 
8,792

Total direct costs
66,534

 
53,316

 
128,439

 
101,219

 
 
 
 
 
 
 
 
Gross Profit
61,440

 
50,702

 
116,870

 
97,333

 
 
 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
 
 
Salaries and wages, payroll taxes and benefits
30,765

 
25,767

 
60,004

 
51,225

General and administrative
10,896

 
8,258

 
19,758

 
15,792

Facilities and facilities related
3,937

 
3,520

 
7,743

 
7,062

Depreciation and amortization
6,245

 
3,807

 
12,357

 
7,603

Total operating expenses
51,843

 
41,352

 
99,862

 
81,682

 
 
 
 
 
 
 
 
Income from operations
9,597

 
9,350

 
17,008

 
15,651

 
 
 
 
 
 
 
 
Interest expense
(457
)
 
(650
)
 
(808
)
 
(1,261
)
 
 
 
 
 
 
 
 
Income before income tax expense
9,140

 
8,700

 
16,200

 
14,390

Income tax expense
(346
)
 
(1,080
)
 
(1,863
)
 
(2,478
)
Net Income and Comprehensive Income
$
8,794

 
$
7,620

 
$
14,337

 
$
11,912

 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
Basic
$
0.73

 
$
0.73

 
$
1.19

 
$
1.15

Diluted
$
0.70

 
$
0.69

 
$
1.15

 
$
1.09

 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic
12,106,066

 
10,496,524

 
12,033,906

 
10,395,874

Diluted
12,521,463

 
11,004,212

 
12,447,248

 
10,953,259






NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
 
Six Months Ended
 
June 29, 2019
 
June 30, 2018
Cash Flows From Operating Activities:
 
 
 
Net income
$
14,337

 
$
11,912

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
12,357

 
7,603

Non-cash lease expense
4,251

 

Provision for doubtful accounts
1,456

 
831

Stock based compensation
4,167

 
2,639

Change in fair value of contingent consideration
49

 
107

Gain on disposals of property and equipment
(48
)
 

Deferred income taxes
477

 
521

Changes in operating assets and liabilities, net of impact of acquisitions:
 
 
 
Billed receivables
5,511

 
(7,834
)
Unbilled receivables
(5,188
)
 
(1,796
)
Prepaid expenses and other assets
(9,413
)
 
253

Accounts payable
(3,816
)
 
1,157

Accrued liabilities
968

 
2,700

Income taxes payable
(2,338
)
 
(7,869
)
Billings in excess of costs and estimated earnings on uncompleted contracts
(5,383
)
 
602

Deposits
47

 
11

Net cash provided by operating activities
17,434

 
10,837

 
 
 
 
Cash Flows From Investing Activities:
 
 
 
Cash paid for acquisitions (net of cash received from acquisitions)
(14,160
)
 
(3,473
)
Purchase of property and equipment
(1,626
)
 
(1,462
)
Net cash used in investing activities
(15,786
)
 
(4,935
)
 
 
 
 
Cash Flows From Financing Activities:
 
 
 
Borrowings from Senior Credit Facility
10,000

 

Payments on notes payable
(6,738
)
 
(6,482
)
Payments of contingent consideration
(1,213
)
 
(728
)
Proceeds from exercise of warrant

 
1,092

Payments of borrowings from Senior Credit Facility

 
(2,500
)
Net cash provided by (used in) financing activities
2,049

 
(8,618
)
 
 
 
 
Net increase (decrease) in Cash and Cash Equivalents
3,697

 
(2,716
)
Cash and cash equivalents – beginning of period
40,739

 
18,751

Cash and cash equivalents – end of period
$
44,436

 
$
16,035






NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GROSS REVENUES TO TOTAL REVENUES
(in thousands)
(Unaudited)
 
 
Three Months Ended
 
Six Months Ended
 
 
June 29, 2019

June 30, 2018
 
June 29, 2019
 
June 30, 2018
Gross Revenues - GAAP
$
127,974

 
$
104,018

 
$
245,309

 
$
198,552

Add:
Intercompany revenues in lieu of sub-consultants
945
 
987

 
1,656

 
1,909

Total Revenues
$
128,919

 
$
105,005

 
$
246,965

 
$
200,461






  NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GROSS REVENUES TO NET REVENUES
(in thousands)
   (Unaudited)
 
 
Three Months Ended
 
Six Months Ended
 
 
June 29, 2019

June 30, 2018
 
June 29, 2019
 
June 30, 2018
Gross Revenues - GAAP
$
127,974

 
$
104,018

 
$
245,309

 
$
198,552

Less:
Sub-consultant services
(20,044
)
 
(14,900
)
 
(36,996
)
 
(28,360
)
 
Other direct costs
(8,410
)
 
(4,870
)
 
(18,106
)
 
(8,792
)
Net Revenues
$
99,520

 
$
84,248

 
$
190,207

 
$
161,400






NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO EBITDA
(in thousands)
(Unaudited)
 
 
Three Months Ended
 
Six Months Ended
 
 
June 29, 2019

June 30, 2018
 
June 29, 2019
 
June 30, 2018
Net Income
$
8,794

 
$
7,620

 
$
14,337

 
$
11,912

Add:
Interest expense
457

 
650

 
808

 
1,261

 
Income tax expense
346

 
1,080

 
1,863

 
2,478

 
Depreciation and Amortization
6,245

 
3,807

 
12,357

 
7,603

EBITDA
$
15,842

 
$
13,157

 
$
29,365

 
$
23,254






NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EPS TO ADJUSTED EPS
(Unaudited)
 
 
Three Months Ended
 
Six Months Ended
 
 
June 29, 2019
 
June 30, 2018
 
June 29, 2019
 
June 30, 2018
 
 
 
 
 
 
 
 
 
Net Income - per diluted share
$
0.70

 
$
0.69

 
$
1.15

 
$
1.09

 
 
 
 
 
 
 
 
Per diluted share adjustments:
 
 
 
 
 
 
 
Add:
Amortization expense of intangible assets
0.40

 
0.25

 
0.81

 
0.51

 
Income tax expense
(0.10
)
 
(0.03
)
 
(0.19
)
 
(0.09
)
Adjusted EPS
$
1.00

 
$
0.91

 
$
1.77

 
$
1.51