GlobeNewswire Inc | Nov 11, 2020 04:01PM EST

November 11, 2020

HOLLYWOOD, Fla., Nov. 11, 2020 (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 third quarter ended October3, 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 2020Financial 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 $29.9million compared to $17.6million 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 October3, 2020Financial Highlights

-- Gross Revenues grew by 32% for the nine months ended October3, 2020 to $498.1 million compared to $376.3 million in the nine months ended September28, 2019. -- Net income for the nine months ended October3, 2020 was $16.4 million compared to $20.2 million in the nine months ended September28, 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 September28, 2019. -- Adjusted EBITDA, which excludes stock-based compensation and acquisition-related costs, grew by 58% for the nine months ended October3, 2020 to $81.0 million compared to $51.4 million in the nine months ended September28, 2019. -- GAAP EPS was $1.30 per share in the nine months ended October3, 2020. -- Adjusted EPS in the nine months ended October3, 2020 was $2.91 per share. -- Cash flows from operations for the nine months ended October3, 2020 were $72.4 million compared to $21.6 million in the nine months ended September28, 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 November11,2020. The accompanying presentation for the call is available by visiting http://ir.nv5.com.

Date: Wednesday, November 11, 2020Time: 4:30 p.m. EasternToll-free dial-in number: +1 833-900-1538International dial-in number: +1 236-712-2278Conference ID: 4987245Webcast: 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 Companys 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 Companys 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 CochranVice President, Marketing & Investor RelationsTel: +1-954-637-8048Email: ir@nv5.com

Source: NV5 Global, Inc.



NV5 GLOBAL, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(UNAUDITED)(in thousands, except share data)

October3, December28, 2020 2019Assets 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 earningson uncompleted 9,009 3,303 contractsClient deposits 382 221 Current portion of contingent consideration 1,334 1,954 Current portion of notes payable and other 21,957 25,332 obligationsTotal 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 306,606 332,854 portionDeferred 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 sharesauthorized, no ? ? shares issued and outstandingCommon stock, $0.01 par value; 45,000,000 shares authorized,13,244,713 and 12,852,357 shares issued andoutstanding as of 132 129 October 3, 2020 and December28,2019,respectivelyAdditional 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 SUBSIDIARIESCONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME(UNAUDITED)(in thousands, except share data)

Three Months Ended Nine Months Ended October3, September28, October3, September28, 2020 2019 2020 2019Gross revenues $ 169,949 $ 131,032 $ 498,118 $ 376,340 Direct costs: Salaries and 46,815 40,426 136,929 113,762 wagesSub-consultant 26,003 19,972 78,673 56,969 servicesOther direct 10,370 7,139 27,771 25,244 costsTotal direct 83,188 67,536 243,373 195,975 costs Gross Profit 86,761 63,496 254,745 180,365 Operating Expenses:Salaries andwages, payroll 43,750 33,428 133,456 93,431 taxes andbenefitsGeneral and 13,216 11,028 38,196 30,786 administrativeFacilities andfacilities 5,370 4,664 16,125 12,407 relatedDepreciationand 10,187 6,551 32,387 18,908 amortizationTotaloperating 72,523 55,671 220,164 155,533 expenses Income from 14,238 7,825 34,581 24,832 operations Interest (3,731 ) (421 ) (11,921 ) (1,230 )expense Income beforeincome tax 10,507 7,403 22,660 23,602 expenseIncome tax (2,753 ) (1,560 ) (6,215 ) (3,422 )expenseNet Income andComprehensive $ 7,754 $ 5,843 $ 16,445 $ 20,180 Income Earnings per share:Basic $ 0.62 $ 0.48 $ 1.33 $ 1.67 Diluted $ 0.61 $ 0.46 $ 1.30 $ 1.62 Weightedaverage common sharesoutstanding: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 SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)(in thousands) Nine Months Ended October3, September28, 2020 2019Cash 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 5,706 (5,972 )on uncompleted contractsDeposits 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 (882 ) (29,365 )from acquisitions)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 SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURESTO COMPARABLE GAAP FINANCIAL MEASURES(UNAUDITED)(in thousands)

RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA

Three Months Ended Nine Months Ended October3, September28, October3, September28, 2020 2019 2020 2019Net 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 11,401 6,551 34,680 18,908 amortization Stock-based 4,020 2,819 10,900 6,989 compensation Acquisition-related 274 433 845 671 costsAdjusted EBITDA $ 29,933 $ 17,627 $ 81,006 $ 51,400

RECONCILIATION OF GAAP EPS TO ADJUSTED EPS

Three Months Ended Nine Months Ended October3, September28, October3, September28, 2020 2019 2020 2019Net Income - per diluted $ 0.61 $ 0.46 $ 1.30 $ 1.62 sharePer diluted share adjustments: Amortization expense ofAdd: intangible assets 0.70 0.45 2.16 1.28 and acquisition-related costs Income tax expense (0.18 ) (0.10 ) (0.55 ) (0.29 )Adjusted EPS $ 1.13 $ 0.81 $ 2.91 $ 2.61