NV5 Announces Second Quarter Results and Raises Guidance
HOLLYWOOD, Fla., Aug. 07, 2024 (GLOBE NEWSWIRE) -- NV5 Global, Inc. (Nasdaq GS: NVEE) ("NV5" or the "Company"), a provider of technology, conformity assessment, consulting solutions, and software applications, today reported financial results for the second quarter ended June 29, 2024.
"NV5 continued to build upon its positive momentum in the second quarter, delivering strong organic growth and profitability. We are well-positioned to meet the expected increase in demand for our services in the second half of 2024, and we are raising guidance. As highlighted in our recent Investor Day, our leadership position in the use of technology to deliver our services, including geospatial analytics and software, provides competitive advantages and contributes to NV5's growth. We will continue to incorporate innovative technologies in all of our services in the years to come," said Dickerson Wright, Executive Chairman of NV5.
Second Quarter 2024 Results
Gross revenues in the second quarter of 2024 grew 6% to $236.3 million from $222.6 million in the second quarter of 2023 and our gross profit increased 12% to $123.3 million. This represents a gross margin expansion of 270 basis points to 52.2%.
Net income of $7.9 million reflects integration costs of our VIS acquisition during the second quarter this year and a $6.7 million reversal of contingent consideration during the same quarter last year. We also had $1.0 million of higher interest expense this quarter as a result of higher interest rates and debt balances, although our net leverage remains low at 1.5x. Our GAAP EPS during the second quarter was $0.50 per share compared to $1.00 per share last year due to the foregoing differences between the periods.
Our Adjusted EBITDA increased 10% to $38.5 million from $35.0 million, and our Adjusted EBITDA margin expanded to 16.3% from 15.7% in the prior year quarter. Our Adjusted EPS was $1.24 per share compared to $1.29 per share in the second quarter of 2023, reflecting higher share count.
Raising Guidance
We continue to foresee a strong second half of the year. Accordingly, we are raising 2024 full-year guidance for revenue and Adjusted Earnings per Share as follows:
- Gross revenue for the full year 2024 is now between $944 million and $950 million, an increase from $937 million and $942 million.
- 2024 GAAP EPS guidance remains $2.87 to $2.93 per share.
- 2024 Adjusted EPS guidance has been raised to $5.13 to $5.20 per share, an increase from $5.05 to $5.11 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 second quarter 2024 financial results at 4:30 p.m. (Eastern Time) on August 7, 2024. The accompanying presentation for the call is available by visiting .
| Date: | Wednesday, August 7, 2024 |
| Time: | 4:30 p.m. Eastern |
| Toll-free dial-in number: | |
| International dial-in number: | |
| Conference ID: | 2719957 |
| Webcast: | |
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 GS: NVEE) is a provider of technology, conformity assessment, consulting solutions, and software applications for public and private sector clients supporting sustainable infrastructure, utility, and building assets and systems. The Company focuses on multiple verticals: construction quality assurance, infrastructure engineering, utility services, buildings & technology, 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 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:
Email:
Source: NV5 Global, Inc.
| NV5 GLOBAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share data) | |||||||
| June 29, 2024 | December 30, 2023 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 29,355 | $ | 44,824 | |||
| Billed receivables, net | 161,894 | 152,593 | |||||
| Unbilled receivables, net | 140,006 | 113,271 | |||||
| Prepaid expenses and other current assets | 22,991 | 18,376 | |||||
| Total current assets | 354,246 | 329,064 | |||||
| Property and equipment, net | 55,675 | 50,268 | |||||
| Right-of-use lease assets, net | 36,135 | 36,836 | |||||
| Intangible assets, net | 237,789 | 226,702 | |||||
| Goodwill | 543,708 | 524,573 | |||||
| Deferred income tax assets, net | 4,744 | — | |||||
| Other assets | 2,086 | 3,149 | |||||
| Total Assets | $ | 1,234,383 | $ | 1,170,592 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 61,870 | $ | 54,865 | |||
| Accrued liabilities | 44,202 | 47,423 | |||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 35,441 | 41,679 | |||||
| Other current liabilities | 2,348 | 2,263 | |||||
| Current portion of contingent consideration | 2,436 | 3,922 | |||||
| Current portion of notes payable and other obligations | 8,537 | 9,267 | |||||
| Total current liabilities | 154,834 | 159,419 | |||||
| Contingent consideration, less current portion | 2,328 | 143 | |||||
| Other long-term liabilities | 25,935 | 26,930 | |||||
| Notes payable and other obligations, less current portion | 248,687 | 205,468 | |||||
| Deferred income tax liabilities, net | — | 2,837 | |||||
| Total liabilities | 431,784 | 394,797 | |||||
| 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, 16,280,601 and 15,895,255 shares issued and outstanding as of June 29, 2024 and December 30, 2023, respectively | 163 | 159 | |||||
| Additional paid-in capital | 527,418 | 508,256 | |||||
| Accumulated other comprehensive loss | (695 | ) | (18 | ) | |||
| Retained earnings | 275,713 | 267,398 | |||||
| Total stockholders’ equity | 802,599 | 775,795 | |||||
| Total liabilities and stockholders’ equity | $ | 1,234,383 | $ | 1,170,592 | |||
| NV5 GLOBAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME (UNAUDITED) (in thousands, except share data) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 29, 2024 | July 1, 2023 | June 29, 2024 | July 1, 2023 | ||||||||||||
| Gross revenues | $ | 236,326 | $ | 222,638 | $ | 449,621 | $ | 406,955 | |||||||
| Direct costs: | |||||||||||||||
| Salaries and wages | 61,390 | 57,079 | 117,845 | 105,463 | |||||||||||
| Sub-consultant services | 37,342 | 39,690 | 68,602 | 67,304 | |||||||||||
| Other direct costs | 14,323 | 15,569 | 27,074 | 27,890 | |||||||||||
| Total direct costs | 113,055 | 112,338 | 213,521 | 200,657 | |||||||||||
| Gross profit | 123,271 | 110,300 | 236,100 | 206,298 | |||||||||||
| Operating expenses: | |||||||||||||||
| Salaries and wages, payroll taxes, and benefits | 68,110 | 58,949 | 133,544 | 111,621 | |||||||||||
| General and administrative | 21,178 | 11,551 | 43,420 | 29,472 | |||||||||||
| Facilities and facilities related | 6,035 | 5,823 | 11,996 | 11,197 | |||||||||||
| Depreciation and amortization | 16,068 | 13,539 | 30,550 | 24,585 | |||||||||||
| Total operating expenses | 111,391 | 89,862 | 219,510 | 176,875 | |||||||||||
| Income from operations | 11,880 | 20,438 | 16,590 | 29,423 | |||||||||||
| Interest expense | (4,606 | ) | (3,648 | ) | (8,797 | ) | (5,229 | ) | |||||||
| Income before income tax expense | 7,274 | 16,790 | 7,793 | 24,194 | |||||||||||
| Income tax benefit (expense) | 633 | (1,377 | ) | 522 | (2,834 | ) | |||||||||
| Net income | $ | 7,907 | $ | 15,413 | $ | 8,315 | $ | 21,360 | |||||||
| Earnings per share: | |||||||||||||||
| Basic | $ | 0.51 | $ | 1.03 | $ | 0.54 | $ | 1.43 | |||||||
| Diluted | $ | 0.50 | $ | 1.00 | $ | 0.53 | $ | 1.39 | |||||||
| Weighted average common shares outstanding: | |||||||||||||||
| Basic | 15,362,825 | 15,014,106 | 15,314,988 | 14,948,796 | |||||||||||
| Diluted | 15,671,176 | 15,451,788 | 15,657,632 | 15,421,535 | |||||||||||
| Comprehensive income: | |||||||||||||||
| Net income | $ | 7,907 | $ | 15,413 | $ | 8,315 | $ | 21,360 | |||||||
| Foreign currency translation losses, net of tax | (176 | ) | (191 | ) | (677 | ) | (191 | ) | |||||||
| Comprehensive income | $ | 7,731 | $ | 15,222 | $ | 7,638 | $ | 21,169 | |||||||
| NV5 GLOBAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) | |||||||
| Six Months Ended | |||||||
| June 29, 2024 | July 1, 2023 | ||||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 8,315 | $ | 21,360 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 33,635 | 27,205 | |||||
| Non-cash lease expense | 6,401 | 6,784 | |||||
| Provision for doubtful accounts | 723 | 607 | |||||
| Stock-based compensation | 13,988 | 10,728 | |||||
| Change in fair value of contingent consideration | — | (7,514 | ) | ||||
| Gain on disposals of property and equipment | (644 | ) | (408 | ) | |||
| Other | 204 | — | |||||
| Deferred income taxes | (7,712 | ) | (7,673 | ) | |||
| Amortization of debt issuance costs | 370 | 365 | |||||
| Changes in operating assets and liabilities, net of impact of acquisitions: | |||||||
| Billed receivables | (4,674 | ) | 10,882 | ||||
| Unbilled receivables | (25,042 | ) | (9,842 | ) | |||
| Prepaid expenses and other assets | (1,619 | ) | (4,691 | ) | |||
| Accounts payable | 4,555 | (8,164 | ) | ||||
| Accrued liabilities and other long-term liabilities | (11,507 | ) | (5,698 | ) | |||
| Billings in excess of costs and estimated earnings on uncompleted contracts | (7,384 | ) | (7,606 | ) | |||
| Contingent consideration | (1,455 | ) | (1,307 | ) | |||
| Other current liabilities | 88 | 474 | |||||
| Net cash provided by operating activities | 8,242 | 25,502 | |||||
| Cash flows from investing activities: | |||||||
| Cash paid for acquisitions (net of cash received from acquisitions) | (53,947 | ) | (186,242 | ) | |||
| Proceeds from sale of assets | 249 | 295 | |||||
| Purchase of property and equipment | (8,905 | ) | (10,239 | ) | |||
| Net cash used in investing activities | (62,603 | ) | (196,186 | ) | |||
| Cash flows from financing activities: | |||||||
| Borrowings from Senior Credit Facility | 58,000 | 180,000 | |||||
| Payments on notes payable and other obligations | (5,274 | ) | (5,131 | ) | |||
| Payments of contingent consideration | (1,585 | ) | (793 | ) | |||
| Payments of borrowings from Senior Credit Facility | (12,000 | ) | (13,000 | ) | |||
| Net cash provided by financing activities | 39,141 | 161,076 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (249 | ) | (106 | ) | |||
| Net decrease in cash and cash equivalents | (15,469 | ) | (9,714 | ) | |||
| Cash and cash equivalents – beginning of period | 44,824 | 38,541 | |||||
| Cash and cash equivalents – end of period | $ | 29,355 | $ | 28,827 | |||
| NV5 GLOBAL, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO COMPARABLE GAAP FINANCIAL MEASURES (UNAUDITED) (in thousands, except share data) | |||||||||||||||
| RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 29, 2024 | July 1, 2023 | June 29, 2024 | July 1, 2023 | ||||||||||||
| Net Income | $ | 7,907 | $ | 15,413 | $ | 8,315 | $ | 21,360 | |||||||
| Interest expense | 4,606 | 3,648 | 8,797 | 5,229 | |||||||||||
| Income tax (benefit) expense | (633 | ) | 1,377 | (522 | ) | 2,834 | |||||||||
| Depreciation and amortization | 17,592 | 14,905 | 33,635 | 27,205 | |||||||||||
| Stock-based compensation | 7,322 | 4,902 | 13,988 | 10,728 | |||||||||||
| Acquisition-related costs* | 1,704 | (5,294 | ) | 3,016 | (4,661 | ) | |||||||||
| Adjusted EBITDA | $ | 38,498 | $ | 34,951 | $ | 67,229 | $ | 62,695 | |||||||
* Acquisition-related costs include contingent consideration fair value adjustments.
| RECONCILIATION OF GAAP EPS TO ADJUSTED EPS | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 29, 2024 | July 1, 2023 | June 29, 2024 | July 1, 2023 | ||||||||||||
| Net Income - per diluted share | $ | 0.50 | $ | 1.00 | $ | 0.53 | $ | 1.39 | |||||||
| Per diluted share adjustments: | |||||||||||||||
| Amortization expense of intangible assets and acquisition-related costs | 0.97 | 0.49 | 1.81 | 1.13 | |||||||||||
| Income tax expense | (0.23 | ) | (0.20 | ) | (0.43 | ) | (0.36 | ) | |||||||
| Adjusted EPS | $ | 1.24 | $ | 1.29 | $ | 1.91 | $ | 2.16 | |||||||
