NV5 Announces Strong First Quarter Results; Delivers Record Cash Flows and Issues Full-Year 2021 Guidance Exceeding Analyst Consensus

HOLLYWOOD, Fla., May 12, 2021 (GLOBE NEWSWIRE) -- 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 first quarter ended April 3, 2021.

“We are pleased with our first quarter performance, which generated $48 million in cash flows from operations and delivered increases in net income, adjusted EBITDA margins, and earnings per share. These positive results were accomplished despite weather-related project delays that significantly postponed projects in the quarter. The COVID-19 pandemic also limited revenue generation for some of our services. Demand for our utility, infrastructure, and public sector services continues to be strong, driving a 5% increase in our backlog for the quarter. We anticipate increased growth opportunities as the economy continues to open throughout the year. In addition, the strength of our balance sheet allows us to invest in acquisitions that support our platform and expand our high-margin offerings,” said Dickerson Wright, PE, Chairman and CEO of NV5.

First Quarter 2021 Results

  • Resume full year 2021 guidance as follows:
    • Increase gross revenues to $695 million to $720 million
    • Increase GAAP EPS to $2.36 per share to $2.78 per share
    • Increase Adjusted EPS to $4.05 per share to $4.45 per share
  • Gross revenues were $153.1 million compared to $165.5 million in the pre-pandemic first quarter of 2020.
  • Cash flows from operations for the first quarter of 2021 were $48.2 million, more than three times the cash flows from operations in the first quarter of 2020 of $13.6 million.
  • Completed a secondary offering for which the Company received $141.0 million in net proceeds.
  • Reduced debt by $135.2 million, bringing net leverage to 0.8x funded by strong cash flows from operations and secondary offering proceeds.
  • Net income grew by 31% in the first quarter of 2021 to $5.5 million compared to $4.2 million in the first quarter of 2020.
  • Adjusted EBITDA, which excludes stock-based compensation and acquisition-related costs, grew in the first quarter of 2021 to $24.2 million compared to $24.1 million in the first quarter of 2020.
  • GAAP EPS in the first quarter of 2021 was $0.41 per share compared to $0.33 per share in the first quarter of 2020, a 24% increase.
  • Adjusted EPS in the first quarter of 2021 was $0.88 per share compared to $0.84 per share in the first quarter of 2020, a 5% increase. Diluted weighted average shares were 13,429,102 in the first quarter of 2021 compared to 12,593,788 in the first quarter of 2020.

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 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.

Conference Call 

NV5 will host a conference call to discuss its first quarter 2021 financial results at 4:30 p.m. (Eastern Time) on May 12, 2021. The accompanying presentation for the call is available by visiting http://ir.nv5.com.

Date:Wednesday, May 12, 2021
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:2088906
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 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 engineering, utility services, buildings & program management, environmental health sciences, and geospatial services. NV5 operates out of more than 106 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)
 
 April 3, 2021 January 2, 2021
Assets   
Current assets:   
Cash and cash equivalents$92,925  $64,909 
Billed receivables, net108,921  142,705 
Unbilled receivables, net72,967  74,458 
Prepaid expenses and other current assets8,085  6,804 
Total current assets282,898  288,876 
Property and equipment, net29,143  27,011 
Right-of-use lease assets, net42,419  43,607 
Intangible assets, net179,711  174,931 
Goodwill359,101  343,796 
Other assets3,059  2,954 
Total Assets$896,331  $881,175 
    
Liabilities and Stockholders’ Equity   
    
Current liabilities:   
Accounts payable$34,014  $39,989 
Accrued liabilities53,797  45,325 
Billings in excess of costs and estimated earnings on uncompleted contracts17,721  24,962 
Client deposits480  380 
Current portion of contingent consideration3,423  1,334 
Current portion of notes payable and other obligations26,896  24,196 
Total current liabilities136,331  136,186 
Contingent consideration, less current portion697  1,066 
Other long-term liabilities37,841  38,737 
Notes payable and other obligations, less current portion145,443  283,326 
Deferred income tax liabilities, net28,830  27,791 
Total liabilities349,142  487,106 
    
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, 14,933,927 and 13,270,131 shares issued and outstanding as of April 3, 2021 and January 2, 2021, respectively149  133 
Additional paid-in capital415,895  268,271 
Retained earnings131,145  125,665 
Total stockholders’ equity547,189  394,069 
Total liabilities and stockholders’ equity$896,331  $881,175 


 
NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
(in thousands, except share data)
 
 Three Months Ended
 April 3, 2021 March 28, 2020
Gross revenues$153,095  $165,480 
    
Direct costs:   
Salaries and wages41,459  45,034 
Sub-consultant services23,246  27,427 
Other direct costs9,798  8,487 
Total direct costs74,503  80,948 
    
Gross profit78,592  84,532 
    
Operating expenses:   
Salaries and wages, payroll taxes and benefits42,951  45,556 
General and administrative11,549  13,157 
Facilities and facilities related5,097  5,397 
Depreciation and amortization9,440  11,040 
Total operating expenses69,037  75,150 
    
Income from operations9,555  9,382 
    
Interest expense(2,318) (3,788)
    
Income before income tax expense7,237  5,594 
Income tax expense(1,757) (1,406)
Net income and comprehensive income$5,480  $4,188 
    
Earnings per share:   
Basic$0.43  $0.34 
Diluted$0.41  $0.33 
    
Weighted average common shares outstanding:   
Basic12,876,822  12,233,477 
Diluted13,429,102  12,593,788 


 
NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
 
 Three Months Ended
 April 3, 2021 March 28, 2020
Cash flows from operating activities:   
Net income$5,480  $4,188 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization10,542  11,040 
Non-cash lease expense2,161  1,704 
Provision for doubtful accounts(536) 215 
Stock-based compensation3,696  3,379 
Change in fair value of contingent consideration209   
Gain on disposals of property and equipment(530) (339)
Deferred income taxes(2,282) (1,614)
Amortization of debt issuance costs227  220 
Changes in operating assets and liabilities, net of impact of acquisitions:   
Billed receivables36,037  6,053 
Unbilled receivables2,032  (7,764)
Prepaid expenses and other assets(1,114) 1,962 
Accounts payable(6,332) 44 
Accrued liabilities2,629  (8,061)
Income taxes payable3,085  1,365 
Billings in excess of costs and estimated earnings on uncompleted contracts(7,241) 1,204 
Deposits92  7 
Net cash provided by operating activities48,155  13,603 
    
Cash flows from investing activities:   
Cash paid for acquisitions (net of cash received from acquisitions)(15,007)  
Proceeds from sale of assets460  425 
Purchase of property and equipment(1,470) (4,525)
Net cash used in investing activities(16,017) (4,100)
    
Cash flows from financing activities:   
Proceeds from common stock offering150,000   
Payments on notes payable(1,669) (2,116)
Payments of contingent consideration(150) (650)
Payments of borrowings from Senior Credit Facility(143,207)  
Payments of common stock offering costs(9,044)  
Purchases of common stock tendered by employees to satisfy the required withholding taxes related to stock-based compensation(52)  
Payments of debt issuance costs  (236)
Net cash used in financing activities(4,122) (3,002)
    
Net increase in cash and cash equivalents28,016  6,501 
Cash and cash equivalents – beginning of period64,909  31,825 
Cash and cash equivalents – end of period$92,925  $38,326 


 
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
  April 3, 2021 March 28, 2020
Net Income$5,480  $4,188 
Add:Interest expense 2,318   3,788 
 Income tax expense 1,757   1,406 
 Depreciation and amortization 10,542   11,040 
 Stock-based compensation 3,696   3,379 
 Acquisition-related costs 449   340 
Adjusted EBITDA$24,242  $24,141 
         
RECONCILIATION OF GAAP EPS TO ADJUSTED EPS
         
  Three Months Ended
  April 3, 2021 March 28, 2020
Net Income - per diluted share$0.41  $0.33 
Per diluted share adjustments:       
Add:Amortization expense of intangible assets and acquisition-related costs 0.63   0.69 
 Income tax expense (0.16)  (0.18)
Adjusted EPS$0.88  $0.84 

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