GlobeNewswire Inc | Aug 5, 2020 04:02PM EDT

August 05, 2020

HOLLYWOOD, Aug. 05, 2020 (GLOBE NEWSWIRE) -- NV5 Global, Inc. (Nasdaq: NVEE) ("NV5" or the "Company"), a provider of professional and technical engineering, geospatial, and consulting solutions, today reported financial results for the second quarter ended June27, 2020.

In the second quarter, Gross Revenues increased 27% and Gross Revenues, exclusive of sub-consultant services and other direct costs ("Net Revenues"), increased 29%. "We are pleased with our second quarter performance, which exceeded analyst expectations in both gross revenues and adjusted earnings per share, while generating strong cash flows from operations and adjusted EBITDA, despite the impacts of the COVID-19 pandemic. We also secured a number of large contracts with utilities, departments of transportation, and the municipal sector in the second quarter and entered into an agreement to acquire Mediatech Design Group, which is expected to increase our technology design services in the Middle East and Southeast Asia," said Dickerson Wright, PE, Chairman and CEO of NV5.

Second Quarter 2020Financial Highlights

-- Gross Revenues for the second quarter of 2020 were $162.7 million compared to $128.0 million in the second quarter of 2019. -- Net Revenues for the quarter were $128.5 million compared to $99.5 million in the second quarter of 2019. -- Gross Revenues for the quarter exceeded analyst consensus expectations by 8%. -- Net income for the second quarter of 2020 was $4.5 million compared to $8.8 million in the second quarter of 2019 (second quarter of 2020 included $3.9 million of additional interest expense, $4.4 million of additional intangible amortization expense, and a higher effective income tax rate compared to second quarter of 2019). -- Adjusted EBITDA for the second quarter of 2020, excluding stock compensation and acquisition-related costs, was $26.9million, an increase from $18.4million in the second quarter of 2019. -- GAAP EPS was $0.36 per share in the second quarter of 2020. -- Adjusted EPS in the second quarter of 2020 was $0.93 per share, exceeding analyst consensus expectations of $0.59 per share. -- Cash flows from operations for the second quarter of 2020 were $37.1 million compared to $1.1 million in the second quarter of 2019.

Six Months Ended June27, 2020Financial Highlights

-- Gross Revenues for the six months ended June27, 2020 were $328.2 million compared to $245.3 million in the six months ended June29, 2019. -- Net Revenues for the six months ended June27, 2020 were $258.1 million compared to $190.2 million in the six months ended June29, 2019. -- Net income for the six months ended June27, 2020 was $8.7 million compared to $14.3 million in the six months ended June29, 2019 (six months ended June27, 2020 included $7.4 million of additional interest expense, $7.8 million of additional intangible amortization expense, and a higher effective income tax rate compared to six months ended June29, 2019). -- Adjusted EBITDA for the six months ended June27, 2020, excluding stock compensation and acquisition-related costs, was $51.1 million, an increase from $33.8 million in the six months ended June29, 2019. -- GAAP EPS was $0.69 per share in the six months ended June27, 2020. -- Adjusted EPS in the six months ended June27, 2020 was $1.77 per share. -- Cash flows from operations for the six months ended June27, 2020 were $50.7 million compared to $17.4 million in the six months ended June29, 2019.

Use of Non-GAAP Financial Measures

Net Revenues are not a measure of financial performance under U.S. generally accepted accounting principles (GAAP). Gross Revenues include sub-consultant costs and other direct costs, which are generally pass-through costs. Furthermore, Gross Revenues eliminates intercompany revenues where the Company performed the service in lieu of utilizing third-party sub-consultants. The Company believes that Net Revenues, which is a non-GAAP financial measure commonly used in our industry, provides a meaningful perspective on our business results. A reconciliation of Gross Revenues as reported in accordance with GAAP to 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, 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 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 second quarter 2020 financial results at 4:30 p.m. (Eastern Time) on August5,2020. The accompanying presentation for the call is available by visiting http://ir.nv5.com.

Date: Wednesday, August 5, 2020Time: 4:30 p.m. EasternToll-free dial-in number: +1 844-348-6875International dial-in number: +1 509-844-0152Conference ID: 8279137Webcast: 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 professional and technical engineering, geospatial, and consulting solutions ranked #27 in the Engineering News-Record Top 500 Design Firms list. NV5 serves public and private sector clients in the infrastructure, utility services, construction, real estate, and environmental markets. NV5 primarily focuses on five business verticals: construction quality assurance, infrastructure engineering and support services, utility services, program management, and environmental solutions, and delivers geospatial services through its subsidiary Quantum Spatial, Inc., the largest full-service geospatial solutions provider in North America. The Company operates out of more than 100 locations worldwide. 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)

June27, December28, 2020 2019Assets Current assets: Cash and cash equivalents $ 65,212 $ 31,825Billed receivables, net 131,255 131,041Unbilled receivables, net 80,269 79,428Prepaid expenses and other current assets 8,435 8,906Total current assets 285,171 251,200Property and equipment, net 29,404 25,733Right-of-use lease assets, net 45,175 46,313Intangible assets, net 191,126 255,961Goodwill 343,170 309,216Other assets 3,069 4,714Total Assets $ 897,115 $ 893,137 Liabilities and Stockholders? Equity Current liabilities: Accounts payable $ 36,741 $ 36,116Accrued liabilities 49,797 47,432Income taxes payable 613 ?Billings in excess of costs and estimated earnings on 8,544 3,303uncompleted contractsClient deposits 286 221Current portion of contingent consideration 1,079 1,954Current portion of notes payable and other obligations 22,176 25,332Total current liabilities 119,236 114,358Contingent consideration, less current portion 1,733 2,048Other long-term liabilities 37,181 34,573Notes payable and other obligations, less current 326,020 332,854portionDeferred income tax liabilities, net 40,575 53,341Total liabilities 524,745 537,174 Commitments and contingencies Stockholders? equity: Preferred stock, $0.01 par value; 5,000,000 shares ? ?authorized, no shares issued and outstandingCommon stock, $0.01 par value; 45,000,000 sharesauthorized, 13,033,842 and 12,852,357 shares issued 130 129and outstanding as of June27, 2020 andDecember28,2019, respectivelyAdditional paid-in capital 258,902 251,187Retained earnings 113,338 104,647Total stockholders? equity 372,370 355,963Total liabilities and stockholders? equity $ 897,115 $ 893,137

NV5 GLOBAL, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME(UNAUDITED)(in thousands, except share data)

Three Months Ended Six Months Ended June27, June29, June27, June29, 2020 2019 2020 2019Gross revenues $ 162,689 $ 127,974 $ 328,169 $ 245,309 Direct costs: Salaries and 45,079 38,080 90,114 73,337 wagesSub-consultant 25,244 20,044 52,670 36,996 servicesOther direct 8,914 8,410 17,402 18,106 costsTotal direct 79,237 66,534 160,186 128,439 costs Gross Profit 83,452 61,440 167,983 116,870 Operating Expenses:Salaries andwages, payroll 44,149 30,765 89,706 60,004 taxes andbenefitsGeneral and 11,824 10,896 24,980 19,758 administrativeFacilities andfacilities 5,357 3,937 10,754 7,743 relatedDepreciationand 11,160 6,245 22,200 12,357 amortizationTotaloperating 72,490 51,843 147,640 99,862 expenses Income from 10,962 9,597 20,343 17,008 operations Interest (4,403 ) (457 ) (8,190 ) (808 )expense Income beforeincome tax 6,559 9,140 12,153 16,200 expenseIncome tax (2,056 ) (346 ) (3,462 ) (1,863 )expenseNet Income andComprehensive $ 4,503 $ 8,794 $ 8,691 $ 14,337 Income Earnings per share:Basic $ 0.37 $ 0.73 $ 0.71 $ 1.19 Diluted $ 0.36 $ 0.70 $ 0.69 $ 1.15 Weightedaverage common sharesoutstanding:Basic 12,308,965 12,106,066 12,271,221 12,033,906 Diluted 12,609,918 12,521,463 12,601,830 12,447,248

NV5 GLOBAL, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)(in thousands)

Six Months Ended June27, June29, 2020 2019Cash Flows From Operating Activities: Net income $ 8,691 $ 14,337 Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization 23,277 12,357 Non-cash lease expense 4,307 4,251 Provision for doubtful accounts 1,690 1,456 Stock-based compensation 6,880 4,167 Change in fair value of contingent consideration ? 49 Gain on disposals of property and equipment (350 ) (48 )Deferred income taxes (869 ) 477 Amortization of debt issuance costs 442 ? Changes in operating assets and liabilities, net of impact of acquisitions:Billed receivables (1,134 ) 5,511 Unbilled receivables (2,286 ) (5,188 )Prepaid expenses and other assets 2,117 (9,413 )Accounts payable 138 (3,816 )Accrued liabilities 1,922 968 Income taxes payable 613 (2,338 )Billings in excess of costs and estimated earnings on 5,241 (5,383 )uncompleted contractsDeposits 66 47 Net cash provided by operating activities 50,745 17,434 Cash Flows From Investing Activities: Cash paid for acquisitions (net of cash received from ? (14,160 )acquisitions)Proceeds from sale of assets 437 ? Purchase of property and equipment (6,145 ) (1,626 )Net cash used in investing activities (5,708 ) (15,786 ) Cash Flows From Financing Activities: Borrowings from Senior Credit Facility ? 10,000 Payments on notes payable (8,415 ) (6,738 )Payments of contingent consideration (913 ) (1,213 )Payments of borrowings from Senior Credit Facility (1,875 ) ? Payments of debt issuance costs (447 ) ? Net cash (used in) provided by financing activities (11,650 ) 2,049 Net increase in Cash and Cash Equivalents 33,387 3,697 Cash and cash equivalents ? beginning of period 31,825 40,739 Cash and cash equivalents ? end of period $ 65,212 $ 44,436

NV5 GLOBAL, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURESTO COMPARABLE GAAP FINANCIAL MEASURES(UNAUDITED)(in thousands)

RECONCILIATION OF GROSS REVENUES TO NET REVENUES

Three Months Ended Six Months Ended June27, June29, June27, June29, 2020 2019 2020 2019Gross Revenues - GAAP $ 162,689 $ 127,974 $ 328,169 $ 245,309 Less: Sub-consultant (25,244 ) (20,044 ) (52,670 ) (36,996 ) services Other direct (8,914 ) (8,410 ) (17,402 ) (18,106 ) costsNet Revenues $ 128,531 $ 99,520 $ 258,097 $ 190,207

RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA

Three Months Ended Six Months Ended June27, June29, June27, June29, 2020 2019 2020 2019Net Income $ 4,503 $ 8,794 $ 8,691 $ 14,337 Add: Interest expense 4,403 457 8,190 808 Income tax expense 2,056 346 3,462 1,863 Depreciation and 12,237 6,245 23,277 12,357 Amortization Stock-based 3,501 2,369 6,880 4,167 compensation Acquisition-related 231 238 571 238 costsAdjusted EBITDA $ 26,931 $ 18,449 $ 51,071 $ 33,770

RECONCILIATION OF GAAP EPS TO ADJUSTED EPS

Three Months Ended Six Months Ended June27, June29, June27, June29, 2020 2019 2020 2019Net Income - per diluted share $ 0.36 $ 0.70 $ 0.69 $ 1.15 Per diluted share adjustments: Amortization expense ofAdd: intangible assets and 0.77 0.42 1.46 0.83 acquisition-related costs Income tax expense (0.20 ) (0.10 ) (0.38 ) (0.19 )Adjusted EPS $ 0.93 $ 1.02 $ 1.77 $ 1.79