Attached files
| file | filename |
|---|---|
| 8-K - 8-K - NV5 Global, Inc. | nvee-2020xq3x8k.htm |
Exhibit 99.1
NV5 ANNOUNCES RECORD THIRD QUARTER RESULTS; EXCEEDS ANALYSTS' EXPECTATIONS
Hollywood, FL – November 11, 2020 – NV5 Global, Inc. (Nasdaq: NVEE) ("NV5" or the "Company"), a leading provider of compliance, technology, and engineering consulting solutions, today reported financial results for the third quarter ended October 3, 2020.
Gross Revenues during the third quarter of 2020 increased 30% compared to the third quarter of 2019. Net Income increased 33% compared to the third quarter of 2019. “We delivered another strong performance in the third quarter that exceeded analyst expectations for gross revenues and adjusted earnings per share. We are pleased to see the continued success of NV5 despite the pandemic. During the quarter, we generated $21.7 million in cash flows from operations, allowing us to pay down an aggregate of $27.8 million in principal under our credit facility from July through today, while maintaining a strong balance sheet that includes $64.0 million of cash on hand at the end of the third quarter. We increased our backlog by 9% in the third quarter and continue to see a solid pipeline of opportunities as we enter the fourth quarter and beyond,” said Dickerson Wright, PE, Chairman and CEO of NV5.
Third Quarter 2020 Financial Highlights
• | Gross Revenues grew by 30% in the third quarter of 2020 to $169.9 million compared to $131.0 million in the third quarter of 2019, which also exceeded analyst consensus expectations by 9%. |
• | Net income for the third quarter of 2020 was $7.8 million compared to $5.8 million in the third quarter of 2019, with the third quarter of 2020 including $3.3 million of additional interest expense, $3.4 million of additional intangible amortization expense, and a higher effective income tax rate compared to third quarter of 2019. |
• | Adjusted EBITDA, which excludes stock-based compensation and acquisition-related costs, grew by 70% in the third quarter of 2020 to $29.9 million compared to $17.6 million in the third quarter of 2019. |
• | GAAP EPS was $0.61 per share in the third quarter of 2020. |
• | Adjusted EPS in the third quarter of 2020 was $1.13 per share, exceeding analyst consensus expectations of $0.70 per share by 61%. |
• | Cash flows from operations for the third quarter of 2020 grew by more than four times to $21.7 million compared to $4.1 million in the third quarter of 2019. |
Nine Months Ended October 3, 2020 Financial Highlights
• | Gross Revenues grew by 32% for the nine months ended October 3, 2020 to $498.1 million compared to $376.3 million in the nine months ended September 28, 2019. |
• | Net income for the nine months ended October 3, 2020 was $16.4 million compared to $20.2 million in the nine months ended September 28, 2019, with the nine months of 2020 including $10.7 million of additional interest expense, $11.2 million of additional intangible amortization expense, and a higher effective income tax rate compared to nine months ended September 28, 2019. |
• | Adjusted EBITDA, which excludes stock-based compensation and acquisition-related costs, grew by 58% for the nine months ended October 3, 2020 to $81.0 million compared to $51.4 million in the nine months ended September 28, 2019. |
• | GAAP EPS was $1.30 per share in the nine months ended October 3, 2020. |
• | Adjusted EPS in the nine months ended October 3, 2020 was $2.91 per share. |
• | Cash flows from operations for the nine months ended October 3, 2020 were $72.4 million compared to $21.6 million in the nine months ended September 28, 2019. |
52/53 Week Fiscal Year
NV5 uses a 52/53 week fiscal year ending on the Saturday closest to the calendar quarter end. Therefore, the third quarter of 2020 included 14 weeks while the third quarter of 2019 included 13 weeks.
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, net of tax benefits, and acquisition-related costs. 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 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.
Conference Call
NV5 will host a conference call to discuss its third quarter 2020 financial results at 4:30 p.m. (Eastern Time) on November 11, 2020. The accompanying presentation for the call is available by visiting http://ir.nv5.com.
Date: Wednesday, November 11, 2020
Time: 4:30 p.m. Eastern
Toll-free dial-in number: +1 833-900-1538
International dial-in number: +1 236-712-2278
Conference ID: 4987245
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 leading provider of compliance, technology, and engineering consulting solutions for public and private sector clients supporting infrastructure, utility, and building assets and systems. The Company primarily focuses on six business verticals: testing, inspection & consulting, infrastructure support services, utility services, buildings & program management, environmental health sciences, and geospatial technology services. NV5 operates out of more than 100 offices nationwide and abroad. 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)
October 3, 2020 | December 28, 2019 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 64,022 | $ | 31,825 | |||
Billed receivables, net | 122,678 | 131,041 | |||||
Unbilled receivables, net | 83,535 | 79,428 | |||||
Prepaid expenses and other current assets | 9,493 | 8,906 | |||||
Total current assets | 279,728 | 251,200 | |||||
Property and equipment, net | 27,957 | 25,733 | |||||
Right-of-use lease assets, net | 46,029 | 46,313 | |||||
Intangible assets, net | 182,830 | 255,961 | |||||
Goodwill | 344,003 | 309,216 | |||||
Other assets | 2,777 | 4,714 | |||||
Total Assets | $ | 883,324 | $ | 893,137 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 33,842 | $ | 36,116 | |||
Accrued liabilities | 46,810 | 47,432 | |||||
Billings in excess of costs and estimated earnings on uncompleted contracts | 9,009 | 3,303 | |||||
Client deposits | 382 | 221 | |||||
Current portion of contingent consideration | 1,334 | 1,954 | |||||
Current portion of notes payable and other obligations | 21,957 | 25,332 | |||||
Total current liabilities | 113,334 | 114,358 | |||||
Contingent consideration, less current portion | 1,733 | 2,048 | |||||
Other long-term liabilities | 42,130 | 34,573 | |||||
Notes payable and other obligations, less current portion | 306,606 | 332,854 | |||||
Deferred income tax liabilities, net | 34,956 | 53,341 | |||||
Total liabilities | 498,759 | 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, 13,244,713 and 12,852,357 shares issued and outstanding as of October 3, 2020 and December 28, 2019, respectively | 132 | 129 | |||||
Additional paid-in capital | 263,341 | 251,187 | |||||
Retained earnings | 121,092 | 104,647 | |||||
Total stockholders’ equity | 384,565 | 355,963 | |||||
Total liabilities and stockholders’ equity | $ | 883,324 | $ | 893,137 | |||
NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
(in thousands, except share data)
Three Months Ended | Nine Months Ended | ||||||||||||||
October 3, 2020 | September 28, 2019 | October 3, 2020 | September 28, 2019 | ||||||||||||
Gross revenues | $ | 169,949 | $ | 131,032 | $ | 498,118 | $ | 376,340 | |||||||
Direct costs: | |||||||||||||||
Salaries and wages | 46,815 | 40,426 | 136,929 | 113,762 | |||||||||||
Sub-consultant services | 26,003 | 19,972 | 78,673 | 56,969 | |||||||||||
Other direct costs | 10,370 | 7,139 | 27,771 | 25,244 | |||||||||||
Total direct costs | 83,188 | 67,536 | 243,373 | 195,975 | |||||||||||
Gross Profit | 86,761 | 63,496 | 254,745 | 180,365 | |||||||||||
Operating Expenses: | |||||||||||||||
Salaries and wages, payroll taxes and benefits | 43,750 | 33,428 | 133,456 | 93,431 | |||||||||||
General and administrative | 13,216 | 11,028 | 38,196 | 30,786 | |||||||||||
Facilities and facilities related | 5,370 | 4,664 | 16,125 | 12,407 | |||||||||||
Depreciation and amortization | 10,187 | 6,551 | 32,387 | 18,908 | |||||||||||
Total operating expenses | 72,523 | 55,671 | 220,164 | 155,533 | |||||||||||
Income from operations | 14,238 | 7,825 | 34,581 | 24,832 | |||||||||||
Interest expense | (3,731 | ) | (421 | ) | (11,921 | ) | (1,230 | ) | |||||||
Income before income tax expense | 10,507 | 7,403 | 22,660 | 23,602 | |||||||||||
Income tax expense | (2,753 | ) | (1,560 | ) | (6,215 | ) | (3,422 | ) | |||||||
Net Income and Comprehensive Income | $ | 7,754 | $ | 5,843 | $ | 16,445 | $ | 20,180 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.62 | $ | 0.48 | $ | 1.33 | $ | 1.67 | |||||||
Diluted | $ | 0.61 | $ | 0.46 | $ | 1.30 | $ | 1.62 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 12,434,600 | 12,191,405 | 12,328,448 | 12,086,588 | |||||||||||
Diluted | 12,749,917 | 12,566,966 | 12,650,107 | 12,485,049 | |||||||||||
NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
Nine Months Ended | |||||||
October 3, 2020 | September 28, 2019 | ||||||
Cash Flows From Operating Activities: | |||||||
Net income | $ | 16,445 | $ | 20,180 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 34,680 | 18,908 | |||||
Non-cash lease expense | 6,731 | 6,770 | |||||
Provision for doubtful accounts | 3,127 | 1,725 | |||||
Stock-based compensation | 10,900 | 6,989 | |||||
Change in fair value of contingent consideration | — | 49 | |||||
Gain on disposals of property and equipment | (394 | ) | (48 | ) | |||
Deferred income taxes | (5,905 | ) | (3,839 | ) | |||
Amortization of debt issuance costs | 669 | — | |||||
Changes in operating assets and liabilities, net of impact of acquisitions: | |||||||
Billed receivables | 8,089 | 508 | |||||
Unbilled receivables | (7,505 | ) | (4,490 | ) | |||
Prepaid expenses and other assets | 2,171 | (5,279 | ) | ||||
Accounts payable | (2,780 | ) | (2,053 | ) | |||
Accrued liabilities | 322 | (9,170 | ) | ||||
Income taxes payable | — | (2,789 | ) | ||||
Billings in excess of costs and estimated earnings on uncompleted contracts | 5,706 | (5,972 | ) | ||||
Deposits | 163 | 68 | |||||
Net cash provided by operating activities | 72,419 | 21,557 | |||||
Cash Flows From Investing Activities: | |||||||
Cash paid for acquisitions (net of cash received from acquisitions) | (882 | ) | (29,365 | ) | |||
Proceeds from sale of assets | 1,053 | — | |||||
Purchase of property and equipment | (8,342 | ) | (1,810 | ) | |||
Net cash used in investing activities | (8,171 | ) | (31,175 | ) | |||
Cash Flows From Financing Activities: | |||||||
Borrowings from Senior Credit Facility | — | 10,000 | |||||
Payments on notes payable | (9,941 | ) | (8,483 | ) | |||
Payments of contingent consideration | (913 | ) | (1,213 | ) | |||
Payments of borrowings from Senior Credit Facility | (20,750 | ) | — | ||||
Payments of debt issuance costs | (447 | ) | — | ||||
Net cash (used in) provided by financing activities | (32,051 | ) | 304 | ||||
Net increase (decrease) in Cash and Cash Equivalents | 32,197 | (9,314 | ) | ||||
Cash and cash equivalents – beginning of period | 31,825 | 40,739 | |||||
Cash and cash equivalents – end of period | $ | 64,022 | $ | 31,425 | |||
NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO COMPARABLE GAAP FINANCIAL MEASURES
(UNAUDITED)
(in thousands)
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
Three Months Ended | Nine Months Ended | |||||||||||||||
October 3, 2020 | September 28, 2019 | October 3, 2020 | September 28, 2019 | |||||||||||||
Net Income | $ | 7,754 | $ | 5,843 | $ | 16,445 | $ | 20,180 | ||||||||
Add: | Interest expense | 3,731 | 421 | 11,921 | 1,230 | |||||||||||
Income tax expense | 2,753 | 1,560 | 6,215 | 3,422 | ||||||||||||
Depreciation and amortization | 11,401 | 6,551 | 34,680 | 18,908 | ||||||||||||
Stock-based compensation | 4,020 | 2,819 | 10,900 | 6,989 | ||||||||||||
Acquisition-related costs | 274 | 433 | 845 | 671 | ||||||||||||
Adjusted EBITDA | $ | 29,933 | $ | 17,627 | $ | 81,006 | $ | 51,400 | ||||||||
RECONCILIATION OF GAAP EPS TO ADJUSTED EPS
Three Months Ended | Nine Months Ended | |||||||||||||||
October 3, 2020 | September 28, 2019 | October 3, 2020 | September 28, 2019 | |||||||||||||
Net Income - per diluted share | $ | 0.61 | $ | 0.46 | $ | 1.30 | $ | 1.62 | ||||||||
Per diluted share adjustments: | ||||||||||||||||
Add: | Amortization expense of intangible assets and acquisition-related costs | 0.70 | 0.45 | 2.16 | 1.28 | |||||||||||
Income tax expense | (0.18 | ) | (0.10 | ) | (0.55 | ) | (0.29 | ) | ||||||||
Adjusted EPS | $ | 1.13 | $ | 0.81 | $ | 2.91 | $ | 2.61 | ||||||||