NV5 Global, Inc.: NV5 Announces Fourth Quarter and Full Year 2023 Results; Issues Full Year 2024 Guidance

HOLLYWOOD, Fla., Feb. 22, 2024 (GLOBE NEWSWIRE) -- NV5 Global, Inc. (Nasdaq: NVEE) ("NV5" or the "Company"), a provider of technology, conformity assessment, consulting solutions, and software applications, today reported financial results for the fourth quarter and full year ended December 30, 2023.

"NV5 delivered strong results in the fourth quarter and 14% growth over the same period in 2022, despite headwinds from continuing resolution federal project delays. Our growth initiatives in the core business are driving growth in infrastructure and transportation, and our buildings business continues to deliver strong organic growth both domestically and internationally. We completed seven acquisitions in 2023, including the expansion of our geospatial data analytics and software offerings to increase subscription-based revenues. These strategic actions taken in 2023 have positioned NV5 for accelerated organic growth in 2024, and we are well positioned to achieve our $1 billion revenue run rate by the end of the year," said Dickerson Wright, PE, Chairman and CEO of NV5.

Fourth Quarter 2023 Financial Highlights

• Gross revenues in the fourth quarter of 2023 were $215.5 million compared to $189.8 million in the fourth quarter of 2022, a 14% increase, building strong organic growth momentum.
• Net income in the fourth quarter of 2023 was $9.9 million compared to $8.0 million in the fourth quarter of 2022, a 24% increase.
• Adjusted EBITDA in the fourth quarter of 2023 was $37.3 million compared to $32.5 million in the fourth quarter of 2022, a 15% increase.
• GAAP EPS in the fourth quarter of 2023 was $0.64 per share compared to $0.52 per share in the fourth quarter of 2022, a 23% increase. Diluted weighted average shares outstanding were 15,549,654 in the fourth quarter of 2023 compared to 15,320,123 in the fourth quarter of 2022.
• Adjusted EPS in the fourth quarter of 2023 was $1.14 per share compared to $1.21 per share in the fourth quarter of 2022, a 6% decrease. Diluted weighted average shares outstanding were 15,549,654 in the fourth quarter of 2023 compared to 15,320,123 in the fourth quarter of 2022.
• Cash flows from operating activities in the fourth quarter of 2023 were $16,772 compared to $13,589 in the fourth quarter of 2022, a 23% increase.
  
  

Full Year 2023 Financial Highlights

• Gross revenues in 2023 were $861.7 million compared to $786.8 million in 2022, a 10% increase.
• Net income in 2023 was $44.6 million compared to $50.0 million in 2022, an 11% decrease.
• Interest expense increased $9.2 million due to higher interest rates and debt related to acquisitions. We have lowered our net leverage to 1.2x, a decrease of 14% when compared to the second quarter of 2023.
• Adjusted EBITDA in 2023 was $137.9 million compared to $135.2 million in 2022, a 2% increase.
• GAAP EPS in 2023 was $2.88 per share compared to $3.27 per share in 2022, a 12% decrease. Diluted weighted average shares outstanding were 15,474,326 in 2023 compared to 15,260,186 in 2022.
• Adjusted EPS in 2023 was $4.81 per share compared to $5.19 per share in 2022, a 7% decrease. Diluted weighted average shares outstanding were 15,474,326 in 2023 compared to 15,260,186 in 2022.
  
  

Fiscal Year 2024 Guidance

• Gross revenues between $930 million and $935 million.
• GAAP EPS between $2.86 per share and $2.92 per share.
• Adjusted EPS between $5.00 and $5.06 per share.
  
  

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 and acquisition-related costs, net of tax benefits. 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 full year 2023 financial results at 4:30 p.m. (Eastern Time) on February 22, 2024. The accompanying presentation for the call is available by visiting http://ir.nv5.com.

Date:	Thursday, February 22, 2024
Time:	4:30 p.m. Eastern
Toll-free dial-in number:	[phone]
International dial-in number:	[phone]
Conference ID:	2719957
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 technology, conformity assessment, consulting solutions, and software applications 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: [phone]
Email: [e-mail]

Source: NV5 Global, Inc.

NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share data)
	December 30, 2023				December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	44,824			$	38,541
Billed receivables, net		152,593				145,637
Unbilled receivables, net		113,271				92,862
Prepaid expenses and other current assets		18,376				13,636
Total current assets		329,064				290,676
Property and equipment, net		50,268				41,640
Right-of-use lease assets, net		36,836				39,314
Intangible assets, net		226,702				160,431
Goodwill		524,573				400,957
Other assets		3,149				2,705
Total Assets	$	1,170,592			$	935,723
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	54,865			$	57,771
Accrued liabilities		47,423				44,313
Billings in excess of costs and estimated earnings on uncompleted contracts		41,679				31,183
Other current liabilities		2,263				1,597
Current portion of contingent consideration		3,922				10,854
Current portion of notes payable and other obligations		9,267				15,176
Total current liabilities		159,419				160,894
Contingent consideration, less current portion		143				4,481
Other long-term liabilities		26,930				29,542
Notes payable and other obligations, less current portion		205,468				39,673
Deferred income tax liabilities, net		2,837				6,893
Total liabilities		394,797				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, 15,895,255 and 15,523,300 shares issued and outstanding as of December 30, 2023 and December 31, 2022, respectively		159				155
Additional paid-in capital		508,256				471,300
Accumulated other comprehensive income (loss)		(18	)			-
Retained earnings		267,398				222,785
Total stockholders' equity		775,795				694,240
Total liabilities and stockholders' equity	$	1,170,592			$	935,723

NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
(in thousands, except share data)
	Three Months Ended								Twelve Months Ended
	December 30, 2023				December 31, 2022				December 30, 2023				December 31, 2022
Gross revenues	$	215,497			$	189,818			$	861,739			$	786,778
Direct costs:
Salaries and wages		53,291				44,830				215,608				186,806
Sub-consultant services		37,854				37,084				150,681				153,641
Other direct costs		15,732				14,931				65,088				60,357
Total direct costs		106,877				96,845				431,377				400,804
Gross profit		108,620				92,973				430,362				385,974
Operating expenses:
Salaries and wages, payroll taxes, and benefits		54,254				46,769				226,137				193,488
General and administrative		17,941				18,501				67,668				66,114
Facilities and facilities related		5,683				5,431				22,891				21,252
Depreciation and amortization		14,060				9,565				52,486				38,938
Total operating expenses		91,938				80,266				369,182				319,792
Income from operations		16,682				12,707				61,180				66,182
Interest expense		(3,859	)			(1,005	)			(12,970	)			(3,808	)
Income before income tax expense		12,823				11,702				48,210				62,374
Income tax expense		(2,888	)			(3,702	)			(3,597	)			(12,401	)
Net income	$	9,935			$	8,000			$	44,613			$	49,973
Earnings per share:
Basic	$	0.65			$	0.54			$	2.96			$	3.39
Diluted	$	0.64			$	0.52			$	2.88			$	3.27
Weighted average common shares outstanding:
Basic		15,236,465				14,816,773				15,086,040				14,753,738
Diluted		15,549,654				15,320,123				15,474,326				15,260,186
Comprehensive income:
Net income	$	9,935			$	8,000			$	44,613			$	49,973
Foreign currency translation gain (loss), net of tax		593				-				(18	)			-
Comprehensive income	$	10,528			$	8,000			$	44,595			$	49,973

NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
	Twelve Months Ended
	December 30, 2023				December 31, 2022
Cash flows from operating activities:
Net income	$	44,613			$	49,973
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		58,020				44,063
Non-cash lease expense		13,562				12,813
Provision for doubtful accounts		1,261				(60	)
Stock-based compensation		22,379				19,326
Change in fair value of contingent consideration		(9,280	)			2,972
Gain on disposals of property and equipment		(694	)			(328	)
Other		(125	)			-
Deferred income taxes		(25,709	)			(18,492	)
Amortization of debt issuance costs		758				724
Changes in operating assets and liabilities, net of impact of acquisitions:
Billed receivables		7,584				10,212
Unbilled receivables		(15,666	)			(3,303	)
Prepaid expenses and other assets		(2,292	)			(1,125	)
Accounts payable		(8,470	)			(1,673	)
Accrued liabilities and other long-term liabilities		(19,848	)			(19,901	)
Contingent consideration		(1,307	)			(800	)
Billings in excess of costs and estimated earnings on uncompleted contracts		(3,243	)			(296	)
Other current liabilities		664				(125	)
Net cash provided by operating activities		62,207				93,980
Cash flows from investing activities:
Cash paid for acquisitions (net of cash received from acquisitions)		(189,345	)			(5,908	)
Proceeds from sale of assets		720				87
Purchase of property and equipment		(17,166	)			(15,689	)
Net cash used in investing activities		(205,791	)			(21,510	)
Cash flows from financing activities:
Borrowings from Senior Credit Facility		188,000				-
Payments of borrowings from Senior Credit Facility		(26,000	)			(65,000	)
Payments on notes payable		(11,071	)			(15,445	)
Payments of contingent consideration		(993	)			(1,464	)
Purchases of common stock tendered by employees to satisfy the required withholding taxes related to stock-based compensation		(81	)			-
Net cash provided by (used in) financing activities		149,855				(81,909	)
Effect of exchange rate changes on cash and cash equivalents		12				-
Net increase (decrease) in cash and cash equivalents		6,283				(9,439	)
Cash and cash equivalents - beginning of period		38,541				47,980
Cash and cash equivalents - end of period	$	44,824			$	38,541

NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP FINANCIAL MEASURES
TO COMPARABLE NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
(in thousands, except share data)
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
		Three Months Ended								Twelve Months Ended
		December 30, 2023				December 31, 2022				December 30, 2023				December 31, 2022
Net Income		$	9,935			$	8,000			$	44,613			$	49,973
Add:	Interest expense		3,859				1,005				12,970				3,808
	Income tax expense		2,888				3,702				3,597				12,401
	Depreciation and amortization		15,522				10,972				58,020				44,063
	Stock-based compensation		5,875				4,077				22,379				19,326
	Acquisition-related costs*		(731	)			4,720				(3,706	)			5,612
Adjusted EBITDA		$	37,348			$	32,476			$	137,873			$	135,183

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

RECONCILIATION OF GAAP EPS TO ADJUSTED EPS
		Three Months Ended								Twelve Months Ended
		December 30, 2023				December 31, 2022				December 30, 2023				December 31, 2022
Net Income - per diluted share		$	0.64			$	0.52			$	2.88			$	3.27
Per diluted share adjustments:
Add:	Amortization expense of intangible assets		0.76				0.52				2.82				2.12
	Acquisition-related costs*		(0.06	)			0.30				(0.14	)			0.36
	Income tax expense		(0.20	)			(0.13	)			(0.75	)			(0.56	)
Adjusted EPS		$	1.14			$	1.21			$	4.81			$	5.19

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