HOLLYWOOD, Fla., Aug. 09, 2023 (GLOBE NEWSWIRE) -- NV5 Global, Inc. (NASDAQ:NVEE) ("NV5" or the "Company"), a provider of technology, conformity assessment, and consulting solutions, today reported financial results for the second quarter ended July 1, 2023.

"We are pleased with our second quarter results. Our business continues to demonstrate resilience in difficult market conditions as it grew over the first quarter. Sustainable infrastructure, ESG service offerings, and technology solutions as supplied by NV5 are in increasing demand. The addition of Axim Geospatial and Visual Information Solutions Geospatial Software have strengthened our leadership position in geospatial data analytics and the acquisition of Red Technologies expands our capabilities in the growing Asia-Pacific data center market. Overall, we are well-positioned for organic growth and acquisition expansion," said Dickerson Wright, PE, Chairman and CEO of NV5.

Second Quarter 2023 Results

Gross revenues in the second quarter of 2023 were $222.6 million compared to $202.7 million in the second quarter of 2022, a 10% increase.
Gross profit in the second quarter of 2023 was $110.3 million compared to $99.2 million in the second quarter of 2022, an 11% increase.
Net income in the second quarter of 2023 was $15.4 million compared to $17.3 million in the second quarter of 2022. Net income was impacted by increases in amortization from acquisitions and interest expense, as well as lower income from operations in our real estate transactional and LNG businesses. Our real estate transactional business was affected by market reactions to increases in interest rates and our LNG business was affected by the timing of project cycles.
Adjusted EBITDA in the second quarter of 2023 was $35.0 million compared to $37.8 million in the second quarter of 2022. Adjusted EBITDA was impacted by lower income from operations in our real estate transactional and LNG businesses. Our real estate transactional business was affected by market reactions to increases in interest rates and our LNG business was affected by the timing of project cycles.
GAAP EPS in the second quarter of 2023 was $1.00 per share compared to $1.13 per share in the second quarter of 2022.
Adjusted EPS in the second quarter of 2023 was $1.29 per share compared to $1.49 per share in the second quarter of 2022.

Six Months Ended July 1, 2023 Results

Gross revenues for the six months ended July 1, 2023 were $407.0 million compared to $392.9 million in the six months ended July 2, 2022, a 4% increase.
Gross profit for the six months ended July 1, 2023 were $206.3 million compared to $193.1 million in the six months ended July 2, 2022, a 7% increase.
Net income for the six months ended July 1, 2023 was $21.4 million compared to $25.9 million in the six months ended July 2, 2022. Net income was impacted by increases in amortization from acquisitions and interest expense, as well as lower income from operations in our real estate transactional and LNG businesses. Our real estate transactional business was affected by market reactions to increases in interest rates and our LNG business was affected by the timing of project cycles.
Adjusted EBITDA for the six months ended July 1, 2023 was $62.7 million compared to $66.7 million in the six months ended July 2, 2022. Adjusted EBITDA was impacted by lower income from operations in our real estate transactional and LNG businesses. Our real estate transactional business was affected by market reactions to increases in interest rates and our LNG business was affected by the timing of project cycles.
GAAP EPS for the six months ended July 1, 2023 was $1.39 per share compared to $1.70 per share in the six months ended July 2, 2022.
Adjusted EPS for the six months ended July 1, 2023 was $2.16 per share compared to $2.48 per share in the six months ended July 2, 2022.

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. 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 2023 financial results at 4:30 p.m. (Eastern Time) on August 9, 2023. The accompanying presentation for the call is available by visiting http://ir.nv5.com.

Date: Time: Toll-free dial-in number: International dial-in number: Conference ID: Webcast:		Wednesday, August 9, 2023 4:30 p.m. Eastern +1 888-412-4117 +1 646-960-0284 6172299 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 technology, conformity assessment, and consulting solutions 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 www.NV5.com. 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: +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)

	July 1, 2023			December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	28,827		$	38,541
Billed receivables, net		149,110			145,637
Unbilled receivables, net		107,192			92,862
Prepaid expenses and other current assets		20,501			13,636
Total current assets		305,630			290,676
Property and equipment, net		49,392			41,640
Right-of-use lease assets, net		38,628			39,314
Intangible assets, net		243,579			160,431
Goodwill		526,848			400,957
Other assets		3,751			2,705
Total Assets	$	1,167,828		$	935,723

Liabilities and Stockholders' Equity

Current liabilities:
Accounts payable	$	55,578		$	57,771
Accrued liabilities		52,735			44,313
Billings in excess of costs and estimated earnings on uncompleted contracts		37,195			31,183
Other current liabilities		2,072			1,597
Current portion of contingent consideration		4,149			10,854
Current portion of notes payable and other obligations		14,800			15,176
Total current liabilities		166,529			160,894
Contingent consideration, less current portion		1,897			4,481
Other long-term liabilities		28,526			29,542
Notes payable and other obligations, less current portion		209,241			39,673
Deferred income tax liabilities, net		20,487			6,893
Total liabilities		426,680			241,483

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, 15,890,908 and 15,523,300 shares issued and outstanding as of July 1, 2023 and December 31, 2022, respectively		159			155
Additional paid-in capital		497,035			471,300
Accumulated other comprehensive income (loss)		(191	)		—
Retained earnings		244,145			222,785
Total stockholders' equity		741,148			694,240
Total liabilities and stockholders' equity	$	1,167,828		$	935,723

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
	July 1, 2023			July 2, 2022			July 1, 2023			July 2, 2022
Gross revenues	$	222,638		$	202,732		$	406,955		$	392,885

Direct costs:
Salaries and wages		57,079			47,704			105,463			93,681
Sub-consultant services		39,690			40,479			67,304			75,305
Other direct costs		15,569			15,309			27,890			30,833
Total direct costs		112,338			103,492			200,657			199,819

Gross profit		110,300			99,240			206,298			193,066

Operating expenses:
Salaries and wages, payroll taxes, and benefits		58,949			47,283			111,621			97,049
General and administrative		11,551			14,494			29,472			30,881
Facilities and facilities related		5,823			5,195			11,197			10,381
Depreciation and amortization		13,539			9,668			24,585			19,602
Total operating expenses		89,862			76,640			176,875			157,913

Income from operations		20,438			22,600			29,423			35,153

Interest expense		(3,648	)		(887	)		(5,229	)		(1,801	)

Income before income tax expense		16,790			21,713			24,194			33,352
Income tax expense		(1,377	)		(4,445	)		(2,834	)		(7,442	)
Net income	$	15,413		$	17,268		$	21,360		$	25,910

Earnings per share:
Basic	$	1.03		$	1.17		$	1.43		$	1.76
Diluted	$	1.00		$	1.13		$	1.39		$	1.70

Weighted average common shares outstanding:
Basic		15,014,106			14,736,167			14,948,796			14,714,745
Diluted		15,451,788			15,232,157			15,421,535			15,211,835

Comprehensive income:
Net income	$	15,413		$	17,268		$	21,360		$	25,910
Foreign currency translation losses, net of tax		(191	)		—			(191	)		—
Comprehensive income	$	15,222		$	17,268		$	21,169		$	25,910

NV5 GLOBAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

	Six Months Ended
	July 1, 2023			July 2, 2022
Cash flows from operating activities:
Net income	$	21,360		$	25,910
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		27,205			22,058
Non-cash lease expense		6,784			6,265
Provision for doubtful accounts		607			594
Stock-based compensation		10,728			9,615
Change in fair value of contingent consideration		(7,514	)		(518	)
Gain on disposals of property and equipment		(408	)		(61	)
Deferred income taxes		(7,673	)		(3,014	)
Amortization of debt issuance costs		365			370
Changes in operating assets and liabilities, net of impact of acquisitions:
Billed receivables		10,882			15,152
Unbilled receivables		(9,842	)		(3,801	)
Prepaid expenses and other assets		(4,691	)		(511	)
Accounts payable		(8,164	)		(4,349	)
Accrued liabilities and other long-term liabilities		(5,698	)		(6,309	)
Billings in excess of costs and estimated earnings on uncompleted contracts		(7,606	)		(6,867	)
Contingent consideration		(1,307	)		—
Other current liabilities		474			(276	)
Net cash provided by operating activities		25,502			54,258

Cash flows from investing activities:
Cash paid for acquisitions (net of cash received from acquisitions)		(186,242	)		(4,670	)
Proceeds from sale of assets		295			48
Purchase of property and equipment		(10,239	)		(10,379	)
Net cash used in investing activities		(196,186	)		(15,001	)

Cash flows from financing activities:
Borrowings from Senior Credit Facility		180,000			—
Payments on notes payable		(5,131	)		(6,218	)
Payments of contingent consideration		(793	)		(1,597	)
Payments of borrowings from Senior Credit Facility		(13,000	)		(35,000	)
Net cash provided by (used in) financing activities		161,076			(42,815	)

Effect of exchange rate changes on cash and cash equivalents		(106	)		—

Net decrease in cash and cash equivalents		(9,714	)		(3,558	)
Cash and cash equivalents – beginning of period		38,541			47,980
Cash and cash equivalents – end of period	$	28,827		$	44,422

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						Six Months Ended
		July 1, 2023			July 2, 2022			July 1, 2023			July 2, 2022
Net Income		$	15,413		$	17,268		$	21,360		$	25,910
Add:	Interest expense		3,648			887			5,229			1,801
	Income tax expense		1,377			4,445			2,834			7,442
	Depreciation and amortization		14,905			10,891			27,205			22,058
	Stock-based compensation		4,902			4,826			10,728			9,615
	Acquisition-related costs*		(5,294	)		(506	)		(4,661	)		(151	)
Adjusted EBITDA		$	34,951		$	37,811		$	62,695		$	66,675

* Acquisition-related costs include contingent consideration fair value adjustments.

RECONCILIATION OF GAAP EPS TO ADJUSTED EPS

		Three Months Ended						Six Months Ended
		July 1, 2023			July 2, 2022			July 1, 2023			July 2, 2022
Net Income - per diluted share		$	1.00		$	1.13		$	1.39		$	1.70
Per diluted share adjustments:
Add:	Amortization expense of intangible assets and acquisition-related costs		0.49			0.50			1.13			1.06
	Income tax expense		(0.20	)		(0.14	)		(0.36	)		(0.28	)
Adjusted EPS		$	1.29		$	1.49		$	2.16		$	2.48

NV5 Announces Second Quarter Results; Exceeds Analyst Consensus