Attached files
| file | filename |
|---|---|
| 8-K - 8-K - NV5 Global, Inc. | nvee-2019xq4x8k.htm |
Exhibit 99.1
NV5 ANNOUNCES STRONG FOURTH QUARTER AND FULL YEAR 2019 RESULTS
Hollywood, FL – February 26, 2020 – 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 fourth quarter and year ended December 28, 2019.
“2019 was another strong year for NV5 delivering annual gross revenue and Adjusted EBITDA growth. We are pleased with the performance and integration of the nine acquisitions completed in 2019, including the Quantum Spatial ("QSI") acquisition that was made in late December. We are particularly excited about Quantum Spatial’s performance and the growth prospects of our geospatial solutions business,” said Dickerson Wright, PE, Chairman and CEO of NV5. “We are pleased that the delayed large liquefied natural gas project contract and our North Carolina Department of Transportation projects that impacted our financial performance in the second half of 2019 are moving forward this month. Additionally, the issues related to initial set-up of project contracts in our project management system and adequate documentation to support the analysis of certain percentage of completion projects, have been addressed and remediated as of December 28, 2019. We expect that the performance of our core business will continue to be strong in 2020, and we are well-positioned for another successful year.”
Fourth Quarter 2019 Financial Highlights
• | Total Revenues for the fourth quarter of 2019 were $133.8 million from $116.1 million in the fourth quarter of 2018. Gross Revenues - GAAP for the fourth quarter of 2019 were $132.6 million from $115.3 million in the fourth quarter of 2018. QSI had revenues in the month of December 2019 of $13.3 million. The acquisition closed on December 20, 2019, which was later in the month than originally anticipated and coincided with the holiday week. As a result, during the period that we owned QSI in 2019, gross revenues were $1.4 million. |
• | Net Revenues for the quarter were $104.3 million from $88.5 million in the fourth quarter of 2018. |
• | Adjusted EBITDA for the fourth quarter 2019, excluding stock compensation and acquisition-related costs, was $17.9 million, an increase from $16.4 million in the fourth quarter of 2018, after excluding a $1.5 million reversal of 401K accruals in the fourth quarter of 2018. |
• | Net income for the fourth quarter of 2019 was $3.6 million from $7.7 million in the fourth quarter of 2018. |
• | GAAP EPS was $0.28 per share in the fourth quarter of 2019 from $0.62 per share in the fourth quarter of 2018. |
• | Adjusted EPS in the fourth quarter of 2019 was $0.64 per share from $0.91 in the fourth quarter of 2018. Excluding non-recurring income tax adjustments in the fourth quarter of 2019, Adjusted EPS was $0.69. |
• | Cash flows from operating activities increased to $18.3 million for 2019 from $17.4 million in 2018. |
Full Year 2019 Financial Highlights
• | Total Revenues for 2019 were $512.9 million from $422.1 million in 2018. Gross Revenues - GAAP for 2019 were $508.9 million from $418.1 million in 2018. |
• | Net Revenues for 2019 were $398.4 million from $334.3 million in 2018. |
• | Adjusted EBITDA in 2019 was $68.6 million from $59.8 million in 2018. |
• | Net income for the year was $23.8 million from $26.9 million in 2018. |
• | GAAP EPS in 2019 was $1.90 per share (based on 12,513,034 diluted shares outstanding) from $2.33 per share (based on 11,506,466 diluted shares outstanding) in 2018. |
• | Adjusted EPS for 2019 was $3.19 per share (based on 12,513,034 diluted shares outstanding) from $3.24 in 2018 (based on 11,506,466 diluted shares outstanding). |
• | Cash flows from operating activities increased to $39.9 million for 2019 from $35.0 million in 2018. |
2020 Outlook
As previously communicated by the Company on January 7, 2020, the Company expects Gross Revenues to range from $700 million to $730 million and full year 2020 Adjusted EPS to range from $4.38 per share to $4.90 per share, an increase of 37% to 54% over 2019 Adjusted EPS of $3.19 per share.
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 fourth quarter 2019 financial results at 4:30 p.m. (Eastern Time) on February 26, 2020. The accompanying presentation for the call is available by visiting http://ir.nv5.com.
Date: Wednesday, February 26, 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: 9378304
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 six business verticals: construction quality assurance, infrastructure engineering and support services, energy, 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
(in thousands, except share data)
(Unaudited)
December 28, 2019 | December 29, 2018 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 31,825 | $ | 40,739 | |||
Billed receivables, net | 131,041 | 98,324 | |||||
Unbilled receivables, net | 79,428 | 43,411 | |||||
Prepaid expenses and other current assets | 8,906 | 2,582 | |||||
Total current assets | 251,200 | 185,056 | |||||
Property and equipment, net | 25,733 | 11,677 | |||||
Right-of-use lease assets, net | 46,313 | — | |||||
Intangible assets, net | 255,961 | 99,756 | |||||
Goodwill | 309,216 | 140,930 | |||||
Other assets | 4,714 | 2,002 | |||||
Total Assets | $ | 893,137 | $ | 439,421 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 36,116 | $ | 22,588 | |||
Accrued liabilities | 47,432 | 20,853 | |||||
Income taxes payable | — | 2,697 | |||||
Billings in excess of costs and estimated earnings on uncompleted contracts | 3,303 | 7,625 | |||||
Client deposits | 221 | 208 | |||||
Current portion of contingent consideration | 1,954 | 1,845 | |||||
Current portion of notes payable and other obligations | 25,332 | 17,139 | |||||
Total current liabilities | 114,358 | 72,955 | |||||
Contingent consideration, less current portion | 2,048 | 2,853 | |||||
Long-term lease liabilities | 34,573 | — | |||||
Notes payable and other obligations, less current portion | 332,854 | 29,847 | |||||
Deferred income tax liabilities, net | 53,341 | 16,224 | |||||
Total liabilities | 537,174 | 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, 12,852,357 and 12,550,711 shares issued and outstanding as of December 28, 2019 and December 29, 2018, respectively | 129 | 126 | |||||
Additional paid-in capital | 251,187 | 236,525 | |||||
Retained earnings | 104,647 | 80,891 | |||||
Total stockholders’ equity | 355,963 | 317,542 | |||||
Total liabilities and stockholders’ equity | $ | 893,137 | $ | 439,421 | |||
NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME
(in thousands, except share data)
(Unaudited)
Three Months Ended | Fiscal Years Ended | ||||||||||||||
December 28, 2019 | December 29, 2018 | December 28, 2019 | December 29, 2018 | ||||||||||||
Gross revenues | $ | 132,598 | $ | 115,344 | $ | 508,938 | $ | 418,081 | |||||||
Direct costs (excluding depreciation and amortization): | |||||||||||||||
Salaries and wages | 39,261 | 34,380 | 153,023 | 132,922 | |||||||||||
Sub-consultant services | 22,629 | 18,869 | 79,598 | 62,218 | |||||||||||
Other direct costs | 5,690 | 7,998 | 30,935 | 21,537 | |||||||||||
Total direct costs | 67,581 | 61,247 | 263,556 | 216,677 | |||||||||||
Gross Profit | 65,017 | 54,097 | 245,382 | 201,404 | |||||||||||
Operating Expenses: | |||||||||||||||
Salaries and wages, payroll taxes and benefits | 35,126 | 26,099 | 128,558 | 102,221 | |||||||||||
General and administrative | 11,871 | 8,365 | 42,656 | 31,713 | |||||||||||
Facilities and facilities related | 4,737 | 3,849 | 17,145 | 14,401 | |||||||||||
Depreciation and amortization | 6,908 | 5,724 | 25,816 | 17,384 | |||||||||||
Total operating expenses | 58,643 | 44,037 | 214,175 | 165,719 | |||||||||||
Income from operations | 6,374 | 10,060 | 31,207 | 35,685 | |||||||||||
Interest expense | (1,045 | ) | (254 | ) | (2,275 | ) | (1,966 | ) | |||||||
Income before income tax expense | 5,329 | 9,806 | 28,932 | 33,719 | |||||||||||
Income tax expense | (1,754 | ) | (2,147 | ) | (5,176 | ) | (6,863 | ) | |||||||
Net Income and Comprehensive Income | $ | 3,575 | $ | 7,659 | $ | 23,756 | $ | 26,856 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.29 | $ | 0.64 | $ | 1.96 | $ | 2.44 | |||||||
Diluted | $ | 0.28 | $ | 0.62 | $ | 1.90 | $ | 2.33 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 12,204,650 | 11,916,546 | 12,116,185 | 10,991,124 | |||||||||||
Diluted | 12,589,800 | 12,418,788 | 12,513,034 | 11,506,466 | |||||||||||
NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Fiscal Years Ended | |||||||
December 28, 2019 | December 29, 2018 | ||||||
Cash Flows From Operating Activities: | |||||||
Net income | $ | 23,756 | $ | 26,856 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 25,816 | 17,384 | |||||
Non-cash lease expense | 9,410 | — | |||||
Provision for doubtful accounts | 1,239 | 797 | |||||
Stock based compensation | 10,430 | 6,697 | |||||
Change in fair value of contingent consideration | (216 | ) | 424 | ||||
Loss on disposals of property and equipment | 21 | 26 | |||||
Deferred income taxes | (6,634 | ) | (3,585 | ) | |||
Amortization of debt issuance costs | 131 | — | |||||
Changes in operating assets and liabilities, net of impact of acquisitions: | |||||||
Billed receivables | 5,140 | (8,662 | ) | ||||
Unbilled receivables | (11,807 | ) | (2,813 | ) | |||
Prepaid expenses and other assets | (3,599 | ) | (109 | ) | |||
Accounts payable | 534 | 398 | |||||
Accrued liabilities | (7,315 | ) | (2,984 | ) | |||
Income taxes payable | (2,697 | ) | (3,405 | ) | |||
Billings in excess of costs and estimated earnings on uncompleted contracts | (4,322 | ) | 3,964 | ||||
Deposits | 13 | 11 | |||||
Net cash provided by operating activities | 39,900 | 34,999 | |||||
Cash Flows From Investing Activities: | |||||||
Cash paid for acquisitions (net of cash received from acquisitions) | (348,375 | ) | (58,155 | ) | |||
Purchase of property and equipment | (2,625 | ) | (2,203 | ) | |||
Net cash used in investing activities | (351,000 | ) | (60,358 | ) | |||
Cash Flows From Financing Activities: | |||||||
Proceeds from common stock offering | — | 100,330 | |||||
Proceeds from borrowings from Senior Credit Facility | 330,457 | — | |||||
Payments of borrowings from Senior Credit Facility | (10,000 | ) | (36,500 | ) | |||
Payments on notes payable | (13,393 | ) | (9,741 | ) | |||
Payments of contingent consideration | (1,202 | ) | (728 | ) | |||
Payments of common stock offering costs | — | (6,861 | ) | ||||
Proceeds from exercise of warrant | — | 1,093 | |||||
Payments of debt issuance costs | (3,676 | ) | (246 | ) | |||
Net cash provided by financing activities | 302,186 | 47,347 | |||||
Net increase (decrease) in Cash and Cash Equivalents | (8,914 | ) | 21,988 | ||||
Cash and cash equivalents – beginning of period | 40,739 | 18,751 | |||||
Cash and cash equivalents – end of period | $ | 31,825 | $ | 40,739 | |||
NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GROSS REVENUES TO TOTAL REVENUES
(in thousands)
(Unaudited)
Three Months Ended | Fiscal Years Ended | |||||||||||||||
December 28, 2019 | December 29, 2018 | December 28, 2019 | December 29, 2018 | |||||||||||||
Gross Revenues - GAAP | $ | 132,598 | $ | 115,344 | $ | 508,938 | $ | 418,081 | ||||||||
Add: | Intercompany revenues in lieu of sub-consultants | 1,219 | 793 | 3,939 | 4,011 | |||||||||||
Total Revenues | $ | 133,817 | $ | 116,137 | $ | 512,877 | $ | 422,092 | ||||||||
NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GROSS REVENUES TO NET REVENUES
(in thousands)
(Unaudited)
Three Months Ended | Fiscal Years Ended | |||||||||||||||
December 28, 2019 | December 29, 2018 | December 28, 2019 | December 29, 2018 | |||||||||||||
Gross Revenues - GAAP | $ | 132,598 | $ | 115,344 | $ | 508,938 | $ | 418,081 | ||||||||
Less: | Sub-consultant services | (22,629 | ) | (18,869 | ) | (79,598 | ) | (62,218 | ) | |||||||
Other direct costs | (5,690 | ) | (7,998 | ) | (30,935 | ) | (21,537 | ) | ||||||||
Net Revenues | $ | 104,279 | $ | 88,477 | $ | 398,405 | $ | 334,326 | ||||||||
NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
(in thousands)
(Unaudited)
Three Months Ended | Fiscal Years Ended | |||||||||||||||
December 28, 2019 | December 29, 2018 | December 28, 2019 | December 29, 2018 | |||||||||||||
Net Income | $ | 3,575 | $ | 7,659 | $ | 23,756 | $ | 26,856 | ||||||||
Add: | Interest expense | 1,045 | 254 | 2,275 | 1,966 | |||||||||||
Income tax expense | 1,754 | 2,147 | 5,176 | 6,863 | ||||||||||||
Depreciation and Amortization | 6,908 | 5,724 | 25,816 | 17,384 | ||||||||||||
Acquisition related costs* | 1,148 | — | 1,148 | — | ||||||||||||
Share-based compensation | 3,441 | 2,156 | 10,430 | 6,697 | ||||||||||||
Adjusted EBITDA | $ | 17,871 | $ | 17,940 | $ | 68,601 | $ | 59,766 | ||||||||
* Acquisition related costs were added back beginning in the fourth quarter of 2019.
NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EPS TO ADJUSTED EPS
(Unaudited)
Three Months Ended | Fiscal Years Ended | |||||||||||||||
December 28, 2019 | December 29, 2018 | December 28, 2019 | December 29, 2018 | |||||||||||||
Net Income - per diluted share | $ | 0.28 | $ | 0.62 | $ | 1.90 | $ | 2.33 | ||||||||
Per diluted share adjustments: | ||||||||||||||||
Add: | Amortization expense of intangible assets | 0.41 | 0.36 | 1.64 | 1.14 | |||||||||||
Acquisition-related costs | 0.09 | — | 0.09 | — | ||||||||||||
Income tax expense | (0.14 | ) | (0.07 | ) | (0.44 | ) | (0.23 | ) | ||||||||
Adjusted EPS | $ | 0.64 | $ | 0.91 | $ | 3.19 | $ | 3.24 | ||||||||