NV5 Announces Record First Quarter Financial Results
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HOLLYWOOD, FL -- (Marketwired) -- 05/05/16 -- NV5 Global, Inc. (NASDAQ: NVEE) ("NV5" or the "Company"), a provider of professional and technical engineering and consulting solutions, today reported financial results for the first quarter ended March 31, 2016.
First Quarter 2016 Financial Highlights
- Total Revenues for the quarter increased 56% year-over-year to $45.9 million and Gross Revenues - GAAP for the quarter increased 54% year-over-year to $44.9 million
- Net Revenues for the quarter increased 67% year-over-year to $38.1 million
- Organic net revenue growth for the first quarter of 2016 was 8%
- EBITDA for the quarter was $4.6 million or 12% of Net Revenues up from $2.4 million or 11% of Net Revenues for the first quarter of 2015
- Gross Profit for the quarter was 51% compared to 44% for the first quarter of 2015
- Net income for the quarter increased 89% to $2.1 million from $1.1 million for the first quarter of 2015
- Adjusted EPS for the quarter increased 39% to $0.32 per diluted share compared to $0.23 per diluted share in the first quarter of 2015
- GAAP EPS for the quarter increased 39% to $0.25 per diluted share over 8.1 million shares compared to $0.18 per diluted share over 6.0 million shares in the first quarter of 2015
- Reiterates Full-Year 2016 Revenue Guidance of $220 million to $230 million, Adjusted EPS Guidance of $1.67 per diluted share to $1.81 per diluted share, and GAAP EPS Guidance of $1.40 per diluted share to $1.54 per diluted share
- Backlog increased 12% to $174.4 million as of March 31, 2016, compared to $155.3 million as of December 31, 2015
"Q1 2016 was a very successful quarter for NV5," said Dickerson Wright, PE, Chairman and CEO of NV5. "We grew our gross profit by 16% from 44% to 51%. We are very encouraged by this result because the winter quarter is usually the slowest in our industry."
Total Revenues for the first quarter of 2016 were $45.9 million, a 56% increase from the first quarter of 2015. Total Revenues includes intercompany revenues where the Company performed the services in lieu of using a third-party sub-consultant. Gross Revenues - GAAP for the first quarter of 2016 were $44.9 million, a 54% increase from the first quarter of 2015. Net Revenue for the first quarter of 2016 was $38.1 million, an increase of 67% from the first quarter of 2015.
Gross Profit for the first quarter 2016 was 51% compared to 44% for the first quarter of 2015, which is the result of increased use of our billable professional employees and reduced use of sub-consultants to perform services. Pass-through costs, in which there is very little markup, decreased to 15% of revenues in the first quarter of 2016 compared to 22% of revenues in the first quarter of 2015.
EBITDA for the first quarter of 2016 was $4.6 million or 12% of Net Revenues, an increase of 89% up from $2.4 million or 11% of Net Revenues for the first quarter of last year.
Adjusted EPS for the first quarter of 2016 was $0.32 per diluted share vs. $0.23 per diluted share in the first quarter of 2015. Net income for the first quarter of 2016 was $2.1 million, or $0.25 per diluted share, up from net income of $1.1 million, or $0.18 per diluted share in the first quarter of 2015.
GAAP EPS and Adjusted EPS reflect weighted-average shares outstanding of 8,108,920 for the first quarter of 2016, compared to weighted-average shares outstanding of 6,032,062 for the first quarter of 2015.
At March 31, 2016, our cash and cash equivalents were $10.3 million compared to $23.5 million as of December 31, 2015. The decrease in cash was due to $14 million in cash used for the Sebesta acquisition in February 2016. During the first quarter of 2016, we generated $2 million from operating activities.
At March 31, 2016, the Company reported backlog of $174.4 million, an increase of 12% from $155.3 million as of December 31, 2015.
2016 Outlook
The Company is reiterating its guidance for full-year 2016 Total Revenues, including the impact of acquisitions closed through March 31, 2016, ranges from $220 million to $230 million, which represents an increase of 41% to 48% from 2015 Total Revenues of $155.9 million. The Company expects that full-year 2016 Adjusted EPS will range from $1.67 per diluted share to $1.81 per diluted share. Furthermore, the Company expects that full-year 2016 GAAP EPS will range from $1.40 per diluted share to $1.54 per diluted share. This guidance for Total Revenues, GAAP EPS and Adjusted EPS excludes anticipated acquisitions for the remainder of 2016.
Use of Non-GAAP Financial Measures
Total Revenues and Net Revenues is not a measure of financial performance under U.S. generally accepted accounting principles ("GAAP"). Gross Revenues - GAAP include sub-consultant costs and other direct costs which are generally pass-through costs. Furthermore, Gross Revenues - GAAP eliminates intercompany revenues where the Company performed the service in lieu of using a third-party sub-consultant. Therefore, the Company believes that Total Revenues and Net Revenues, which are non-GAAP financial measures commonly used in our industry, provides a meaningful perspective on its business results. A reconciliation of gross revenues as reported in accordance with GAAP to Total Revenues and 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. Management believes EBITDA, in addition to operating profit, net income and other GAAP measures, is a useful indicator of NV5's financial and operating performance and its 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 EBITDA is provided at the end of this news release.
Adjusted earnings per diluted share data ("Adjusted EPS") is not a measure of financial performance under GAAP. Adjusted EPS reflects adjustments to reported diluted earnings per share ("GAAP EPS") data to eliminate amortization expense of intangible assets from acquisitions. As the Company continues its acquisition strategy, the growth in Adjusted EPS will likely increase at a greater rate than GAAP EPS as reported in accordance with GAAP. A reconciliation of GAAP EPS as reported in accordance with GAAP to Adjusted EPS provided at the end of this news release.
NV5's definition of Total Revenues, Net Revenues, 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 contract revenues, net income and diluted earnings per share
Conference Call
NV5 will host a conference call to discuss its first quarter 2016 financial results at 4:30 p.m. (Eastern Time) on May 5, 2016.
Date: Thursday, May 5, 2016
Time: 4:30 p.m. Eastern
Toll-free dial-in number: +1 877-311-4180
International dial-in number: +1 616-548-5594
Conference ID: 95499639
Webcast: http://ir.nv5.com
Please dial-in at least 5-10 minutes prior to the start time in order for the operator to log your name and connect you to the conference.
A replay of the conference call will be available approximately one hour following the conclusion of the call through May 12, 2016. To access the replay via telephone, please dial:
Toll-free replay number: +1 855-859-2056
International replay number: +1 404-537-3406
Replay PIN number: 95499639
The conference call will also be webcast live and available for replay via the investors section of the NV5 website, www.NV5.com.
About NV5
NV5 Global, Inc. (NASDAQ: NVEE) is a provider of professional and technical engineering and consulting solutions to public and private sector clients in the infrastructure, energy, construction, real estate and environmental markets. NV5 primarily focuses on five business verticals: construction quality assurance, infrastructure, engineering and support services, energy, program management, and environmental solutions. The Company operates 53 offices in 21 states nationwide, and is headquartered in Hollywood, Florida. 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 press 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.
NV5 GLOBAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(Unaudited)
March 31, December 31,
2016 2015
------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 10,333 $ 23,476
Accounts receivable, net of allowance for
doubtful accounts of $1,865 and $1,536 as
of March 31, 2016 and December 31, 2015,
respectively 52,208 47,747
Prepaid expenses and other current assets 1,724 1,092
Deferred income tax assets 1,440 1,440
------------- -------------
Total current assets 65,705 73,755
Property and equipment, net 3,962 3,091
Intangible assets, net 15,568 12,367
Goodwill 27,693 21,679
Other assets 1,027 877
------------- -------------
Total Assets $ 113,955 $ 111,769
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 6,401 $ 6,658
Accrued liabilities 9,851 9,564
Income taxes payable 1,247 813
Billings in excess of costs and estimated
earnings on uncompleted contracts 477 293
Client deposits 109 110
Current portion of contingent consideration 370 458
Current portion of notes payable 4,126 4,347
------------- -------------
Total current liabilities 22,581 22,243
Contingent consideration, less current
portion 451 821
Notes payable, less current portion 4,853 6,360
Deferred income tax liabilities 1,582 1,582
------------- -------------
Total liabilities 29,467 31,006
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, 8,284,695 and 8,124,627
shares issued and outstanding as of March
31, 2016 and December 31, 2015,
respectively 83 81
Additional paid-in capital 63,928 62,260
Retained earnings 20,477 18,422
------------- -------------
Total stockholders' equity 84,488 80,763
------------- -------------
Total liabilities and stockholders' equity $ 113,955 $ 111,769
============= =============
NV5 GLOBAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME
(in thousands, except share data)
(Unaudited)
Three Months Ended
------------------------
March 31, March 31,
2016 2015
------------------------
Gross revenues $ 44,905 $ 29,153
Direct costs:
Salaries and wages 15,254 9,909
Sub-consultant services 4,583 4,073
Other direct costs 2,244 2,286
----------- -----------
Total direct costs 22,081 16,268
----------- -----------
Gross Profit 22,824 12,885
----------- -----------
Operating Expenses:
Salaries and wages, payroll taxes and benefits 12,441 7,105
General and administrative 4,098 2,503
Facilities and facilities related 1,721 857
Depreciation and amortization 1,242 638
----------- -----------
Total operating expenses 19,502 11,103
----------- -----------
Income from operations 3,322 1,782
----------- -----------
Other expense:
Interest expense (69) (68)
----------- -----------
Total other expense (69) (68)
----------- -----------
Income before income tax expense 3,253 1,714
Income tax expense (1,198) (629)
----------- -----------
Net income $ 2,055 $ 1,085
=========== ===========
Earnings per share:
Basic $ 0.27 $ 0.20
Diluted $ 0.25 $ 0.18
Weighted average common shares outstanding:
Basic 7,731,025 5,522,743
Diluted 8,108,920 6,032,062
NV5 GLOBAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
------------------------
March 31, March 31,
2016 2015
----------- -----------
Cash Flows From Operating Activities:
Net income $ 2,055 $ 1,085
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,242 638
Provision for doubtful accounts 188 90
Stock compensation 499 278
Change in fair value of contingent consideration - 4
Loss on disposal of leasehold improvements 2 -
Changes in operating assets and liabilities, net
of impact of acquisitions:
Accounts receivable 764 (1,666)
Prepaid expenses and other assets (415) 25
Accounts payable (1,823) 323
Accrued liabilities (1,113) 1,773
Income taxes payable 434 (595)
Billings in excess of costs and estimated
earnings on uncompleted contracts 183 (58)
Client deposits 12 36
----------- -----------
Net cash provided by operating activities 2,028 1,933
----------- -----------
Cash Flows From Investing Activities:
Cash paid for acquisitions (14,000) (1,750)
Purchase of property and equipment (152) (227)
----------- -----------
Net cash used in investing activities (14,152) (1,977)
----------- -----------
Cash Flows From Financing Activities:
Exercise of warrants costs - (216)
Payments on notes payable (1,731) (1,598)
Payments of contingent consideration (296) (233)
Payments on stock repurchase obligation - (135)
Proceeds from exercise of unit warrant 1,008 3,186
----------- -----------
Net cash (used in) provided by financing
activities (1,019) 1,004
----------- -----------
Net increase (decrease) in Cash and Cash
Equivalents (13,143) 960
Cash and cash equivalents - beginning of period 23,476 6,872
----------- -----------
Cash and cash equivalents - end of period $ 10,333 $ 7,832
=========== ===========
NV5 GLOBAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
-----------------------
March 31, March 31,
2016 2015
----------- -----------
Supplemental disclosures of cash flow information:
Cash paid for interest $ 75 $ 122
Cash paid for income taxes $ 763 $ 1,224
Non-cash investing and financing activities:
Contingent consideration (earn-out) $ - $ 900
Notes and stock payable for acquisitions $ - $ 1,250
Stock issuance for acquisitions $ - $ 900
Payment of contingent consideration with common
stock $ 163 $ 100
NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GROSS REVENUES TO TOTAL REVENUES
(Unaudited)
(in thousands)
Three Months Ended
-----------------------
March 31, March 31,
2016 2015
-----------------------
Gross Revenues - GAAP $ 44,905 $ 29,153
Add: Intercompany revenues in lieu of sub-
consultants 962 272
----------- -----------
Total Revenues $ 45,867 $ 29,425
----------- -----------
NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GROSS REVENUES TO NET REVENUES
(Unaudited)
(in thousands)
Three Months Ended
------------------------
March 31, March 31,
2016 2015
------------------------
Gross Revenues - GAAP $ 44,905 $ 29,153
Less:Sub-consultant services (4,583) (4,073)
Other direct costs (2,244) (2,286)
----------- -----------
Net Revenues $ 38,078 $ 22,794
=========== ===========
NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO EBITDA
(Unaudited)
(in thousands)
Three Months Ended
-----------------------
March 31, March 31,
2016 2015
-----------------------
Net Income $ 2,055 $ 1,085
Add: Interest expense 69 68
Income tax expense 1,198 629
Depreciation and Amortization 1,242 638
----------- -----------
EBITDA $ 4,564 $ 2,420
=========== ===========
NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EPS TO ADJUSTED EPS
(Unaudited)
Three Months Ended
------------------------
March 31, March 31,
2016 2015
------------------------
Net Income - per diluted share $ 0.25 $ 0.18
Per diluted share adjustments:
Add: Amortization expense of intangible assets 0.11 0.08
Income tax expense (0.04) (0.03)
----------- -----------
Adjusted EPS $ 0.32 $ 0.23
=========== ===========
ContactNV5 Global, Inc. Lauren Wright, PhDDirector of Investor Relations Tel: +1-408-392-7233 Email: [email protected]
Source: NV5 Global, Inc.
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