NV5 Global Inc.
03/09/2017 | Press release | Archived content
Fourth Quarter 2016 Press Release
HOLLYWOOD, Fla., March 09, 2017 (GLOBE NEWSWIRE) -- 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 fourth quarter and year ended December 31, 2016.
Fourth Quarter 2016 Financial Highlights
- Total Revenues for the quarter were $64.2 million, an increase of 51% from $42.5 million in the fourth quarter of 2015. Gross Revenues - GAAP for the quarter were $63.0 million, an increase of 49% from $42.3 million in the fourth quarter of 2015.
- Net Revenues for the quarter were $51.1 million, an increase of 52% from $33.6 million in the fourth quarter of 2015.
- Organic growth in the fourth quarter of 2016 was 8%.
- EBITDA for the quarter was $7.0 million up from $5.2 million for the fourth quarter of 2015.
- Gross Margin for the quarter was 49%, compared to 45% for the fourth quarter of 2015.
- Net income for the quarter was $3.3 million, a 23% increase from $2.7 million in the fourth quarter of 2015.
- Adjusted EPS for the quarter was $0.44 per diluted share compared to $0.41 per diluted share in the fourth quarter of 2015. GAAP EPS for the quarter was $0.31 per diluted share compared to $0.33 per diluted share. GAAP EPS and Adjusted EPS reflect weighted-average shares outstanding of 10,507,542 for the fourth quarter of 2016, compared to weighted-average shares outstanding of 8,017,366 for the fourth quarter of 2015.
"2016 was a successful year for organic and strategic growth at NV5," said Dickerson Wright, PE, Chairman and CEO of NV5. "We achieved our objective of reaching $300 million in run-rate revenue with at least 12% EBITDA by the end of the year and once again exceeded industry standards for organic growth. We have set a new goal to reach $600 million in revenue by 2020 and we have initiated 2017 guidance that reflects that threshold of 600/20 we have set for ourselves. We encountered unanticipated challenges in the third and fourth quarters of 2016, namely, significant delays to a number of our transportation infrastructure projects in New Jersey brought on by legislative gridlock, and project delays in the Western states due to heavy rains and flooding. Both problems have since been improved, and we were still able to achieve organic growth of 8% in the fourth quarter. Our ability to achieve 8% organic growth despite these obstacles speaks well for our business model. We continue to strengthen our existing verticals and platforms for strategic opportunities and organic growth."
Total Revenues for the fourth quarter of 2016 were $64.2 million, a 51% increase from the fourth 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 fourth quarter of 2016 were $63.0 million, a 49% increase from the fourth quarter of 2015. Net Revenue for the fourth quarter of 2016 was $51.1 million, an increase of 52% from the fourth quarter of 2015.
EBITDA for the fourth quarter of 2016 was $7.0 million, an increase of 35% from $5.2 million for the fourth quarter of last year.
Adjusted EPS for the fourth quarter of 2016 was $0.44 vs. $0.41 per share in the fourth quarter of 2015. Net income for the fourth quarter of 2016 was $3.3 million, or $0.31 per diluted share, up from net income of $2.7 million, or $0.33 per diluted share in the fourth quarter of 2015.
GAAP EPS and Adjusted EPS reflect weighted-average shares outstanding of 10,507,542 for the fourth quarter of 2016, compared to weighted-average shares outstanding of 8,017,366 for the fourth quarter of 2015. Included in the weighted-average shares outstanding for the fourth quarter of 2016 is the addition of approximately 2.0 million shares issued during our secondary offering in May 2016.
Full-Year 2016 Financial Highlights
- Full-Year 2016 Total Revenues were $228.7 million, an increase of 47% from Full-Year 2015 Total Revenues of $155.9 million. Gross Revenues - GAAP were $223.9 million for Full-Year 2016, an increase of 45% from $154.7 million in Full-Year 2015.
- Net Revenues for Full-Year 2016 were $181.5 million, an increase of 48% from $122.5 million in Full-Year 2015.
- Full-Year 2016 Organic Growth was 5%.
- EBITDA for 2016 was $24.6 million or 14% of Net Revenues up from $17.2 million or 14% of Net Revenues in 2015.
- Full-Year 2016 Gross Margin was 48%, compared to 45% for the full-year 2015.
- Net income for Full-Year 2016 was $11.6 million, a 37% increase from $8.5 million for Full-Year 2015.
- Adjusted EPS for 2016 was $1.53 per diluted share compared to $1.41 per diluted share for 2015. GAAP EPS for 2016 was $1.22 per diluted share compared to $1.18 per diluted share. GAAP EPS and Adjusted EPS reflect weighted-average shares outstanding of 9,540,051 for 2016 compared to weighted-average shares outstanding of 7,215,898 for 2015.
- Cash flow from operating activities for 2016 was $15.2 million compared to cash flow from operating activities of $6.0 million for 2015.
- Backlog was $220.8 million as of December 31, 2016, a 30% increase from $155.3 million as of December 31, 2015.
- Full-Year 2017 Total Revenues Guidance is expected to range from $302 million to $316 million, Adjusted EPS Guidance is expected to range from $1.93 to $2.05 per diluted share, and GAAP EPS Guidance is expected to range from $1.53 to $1.65 per diluted share.
Regarding the results for the full year 2016, Total Revenues for 2016 were $228.7 million, a 47% increase from 2015. Gross Revenues - GAAP for 2016 increased 45% to $223.9 million, compared with $154.7 million reported for 2015. Net Revenue for the full year ended December 31, 2016 was $181.5 million, an increase of 48% from 2015. Our organic growth for 2016 was 5%.
EBITDA for 2016 was $24.6 million or 14% of Net Revenues, an increase of 43% from $17.2 million or 14% of Net Revenues for 2015.
Adjusted EPS for 2016 was $1.53 vs. $1.41 for 2015. Net income for 2016 was $11.6 million, or $1.22 per diluted share, up from net income of $8.5 million, or $1.18 per diluted share for 2015.
GAAP EPS and Adjusted EPS reflect weighted-average shares outstanding of 9,540,051 for 2016 compared to weighted-average shares outstanding of 7,215,898 for 2015. Included in the weighted-average shares outstanding for 2016 is the addition of approximately 2.0 million shares issued during our secondary offering in May 2016.
At December 31, 2016, our cash and cash equivalents were $35.7 million compared to $23.5 million as of December 31, 2015. The increase in cash was due to $47.1 million in net cash proceeds from our secondary equity offering in May 2016 offset by $45.8 million used for acquisitions in 2016. During 2016, we generated $15.2 million of cash from operating activities, compared to cash from operating activities of $6.0 million in 2015.
At December 31, 2016, the Company reported backlog of $220.8 million, an increase of 30% from $155.3 million as of December 31, 2015.
2017 Outlook
The Company is initiating guidance for full-year 2017 Total Revenues, including the impact of acquisitions closed through February 28, 2017, in the range from $302 million to $316 million, which represents an increase of 32% to 39% from 2016 Total Revenues of $228 million. The Company expects that full-year 2017 GAAP EPS will range from $1.53 per share to $1.65 per share. Furthermore, the Company expects that full-year 2017 Adjusted EPS will range from $1.93 per share to $2.05 per share. This guidance for Total Revenues, GAAP EPS and Adjusted EPS excludes anticipated acquisitions for the remainder of 2017.
Use of Non-GAAP Financial Measures
Total Revenues and Net Revenues are measures 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, provide a meaningful perspective on its business results. A reconciliation of gross revenues as reported in accordance with GAAP to Total Revenues and Net Revenues 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 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 fourth quarter and full year 2016 financial results at 4:30 p.m. (Eastern Time) on March 9, 2017.
| Date: | Thursday, March 9, 2017 | |
| 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: | 64549803 | |
| Webcast: | http://ir.nv5.com |
The conference call will be webcast live via the "Investors" section of the NV5 website. A replay of the webcast will also be available under presentations.
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 is headquartered in Hollywood, FL and operates out of 75 locations in 26 states nationwide and abroad in Macau, Shanghai, Hong Kong, and Vietnam. For additional information, please visit the Company's website. 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 | ||||
| CONSOLIDATED BALANCE SHEETS | ||||
| (in thousands, except share data) | ||||
| (Unaudited) | ||||
| December 31, 2016 | December 31, 2015 | |||
| Assets | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 35,666 | $ | 23,476 |
| Accounts receivable, net of allowance for doubtful accounts of $1,992 and | ||||
| $1,536 as of December 31, 2016 and December 31, 2015, respectively | 75,511 | 47,747 | ||
| Prepaid expenses and other current assets | 1,874 | 1,092 | ||
| Deferred income tax assets | 2,173 | 1,440 | ||
| Total current assets | 115,224 | 73,755 | ||
| Property and equipment, net | 6,683 | 3,091 | ||
| Intangible assets, net | 40,861 | 12,367 | ||
| Goodwill | 59,380 | 21,679 | ||
| Other assets | 1,511 | 877 | ||
| Total Assets | $ | 223,659 | $ | 111,769 |
| Liabilities and Stockholders' Equity | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 13,509 | $ | 6,658 |
| Accrued liabilities | 17,316 | 9,564 | ||
| Income taxes payable | 1,134 | 813 | ||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 228 | 293 | ||
| Client deposits | 106 | 110 | ||
| Current portion of contingent consideration | 564 | 458 | ||
| Current portion of notes payable and other obligations | 10,764 | 4,347 | ||
| Total current liabilities | 43,621 | 22,243 | ||
| Contingent consideration, less current portion | 1,875 | 821 | ||
| Notes payable and other obligations, less current portion | 21,632 | 6,360 | ||
| Deferred income tax liabilities | 8,370 | 1,582 | ||
| Total liabilities | 75,498 | 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, 10,566,528 and 8,124,627 | ||||
| shares issued and outstanding as of December 31, 2016 and 2015, respectively | 106 | 81 | ||
| Additional paid-in capital | 118,026 | 62,260 | ||
| Retained earnings | 30,029 | 18,422 | ||
| Total stockholders' equity | 148,161 | 80,763 | ||
| Total liabilities and stockholders' equity | $ | 223,659 | $ | 111,769 |
| NV5 GLOBAL, INC. AND SUBSIDIARIES | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME | ||||||||||||||||
| (in thousands, except share data) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||
| December 31 | December 31 | December 31 | December 31 | |||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Gross revenues | $ | 63,022 | $ | 42,320 | $ | 223,910 | $ | 154,655 | ||||||||
| Direct costs: | ||||||||||||||||
| Salaries and wages | 20,222 | 14,565 | 73,966 | 53,687 | ||||||||||||
| Sub-consultant services | 8,808 | 6,088 | 31,054 | 21,394 | ||||||||||||
| Other direct costs | 3,101 | 2,676 | 11,310 | 10,796 | ||||||||||||
| Total direct costs | 32,131 | 23,329 | 116,330 | 85,877 | ||||||||||||
| Gross Profit | 30,891 | 18,991 | 107,580 | 68,778 | ||||||||||||
| Operating Expenses: | ||||||||||||||||
| Salaries and wages, payroll taxes and benefits | 15,011 | 9,473 | 55,586 | 34,731 | ||||||||||||
| General and administrative | 6,711 | 2,768 | 19,351 | 11,930 | ||||||||||||
| Facilities and facilities related | 2,209 | 1,521 | 8,012 | 4,950 | ||||||||||||
| Depreciation and amortization | 1,943 | 1,022 | 6,228 | 3,468 | ||||||||||||
| Total operating expenses | 25,874 | 14,784 | 89,177 | 55,079 | ||||||||||||
| Income from operations | 5,017 | 4,207 | 18,403 | 13,699 | ||||||||||||
| Other expense: | ||||||||||||||||
| Interest expense | (36) | (32) | (257) | (212) | ||||||||||||
| Total other expense | (36) | (32) | (257) | (212) | ||||||||||||
| Income before income tax expense | 4,981 | 4,175 | 18,146 | 13,487 | ||||||||||||
| Income tax expense | (1,692) | (1,503) | (6,539) | (4,995) | ||||||||||||
| Net Income and Comprehensive Income | $ | 3,289 | $ | 2,672 | $ | 11,607 | $ | 8,492 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $0.33 | $0.35 | $1.27 | $1.25 | ||||||||||||
| Diluted | $0.31 | $0.33 | $1.22 | $1.18 | ||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 10,015,895 | 7,719,664 | 9,125,167 | 6,773,135 | ||||||||||||
| Diluted | 10,507,542 | 8,017,366 | 9,540,051 | 7,215,898 | ||||||||||||
| NV5 GLOBAL, INC. AND SUBSIDIARIES | ||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||
| (in thousands, except share data) | ||||||
| (Unaudited) | ||||||
| Year Ended | ||||||
| December 31, 2016 | December 31, 2015 | |||||
| Cash Flows From Operating Activities: | ||||||
| Net income | $ | 11,607 | $ | 8,492 | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
| Depreciation and amortization | 6,228 | 3,468 | ||||
| Provision for doubtful accounts | 138 | 164 | ||||
| Stock compensation | 2,343 | 1,696 | ||||
| Change in fair value of contingent consideration | 201 | (335) | ||||
| Loss on disposal of property and equipment | 14 | - | ||||
| Excess tax benefit from stock based compensation | (892) | (1,536) | ||||
| Deferred income taxes | (1,837) | (666) | ||||
| Changes in operating assets and liabilities, net of impact of acquisitions: | ||||||
| Accounts receivable | (7,681) | (4,846) | ||||
| Prepaid expenses and other assets | 920 | 601 | ||||
| Accounts payable | 3,047 | (3,830) | ||||
| Accrued liabilities | (243) | 1,479 | ||||
| Income taxes payable | 1,212 | 1,243 | ||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | (65) | 16 | ||||
| Client deposits | 221 | 26 | ||||
| Net cash provided by operating activities | 15,213 | 5,972 | ||||
| Cash Flows From Investing Activities: | ||||||
| Cash paid for acquisitions | (45,811) | (10,427) | ||||
| Purchase of property and equipment | (985) | (601) | ||||
| Net cash used in investing activities | (46,796) | (11,028) | ||||
| Cash Flows From Financing Activities: | ||||||
| Proceeds from secondary offering | 51,319 | 32,068 | ||||
| Payments of secondary offering costs | (4,173) | (2,649) | ||||
| Payments on notes payable | (4,594) | (10,797) | ||||
| Payments of contingent consideration | (296) | (533) | ||||
| Excess tax benefit from stock based compensation | 892 | 1,536 | ||||
| Payments of debt issuance costs | (383) | - | ||||
| Proceeds from exercise of unit warrant | 1,008 | 3,186 | ||||
| Net cash provided by financing activities | 43,773 | 21,660 | ||||
| Net increase in Cash and Cash Equivalents | 12,190 | 16,604 | ||||
| Cash and cash equivalents - beginning of period | 23,476 | 6,872 | ||||
| Cash and cash equivalents - end of period | $ | 35,666 | $ | 23,476 | ||
| Year Ended | ||||||
| December 31, 2016 | December 31, 2015 | |||||
| Supplemental disclosures of cash flow information: | ||||||
| Cash paid for interest | $ | 272 | $ | 185 | ||
| Cash paid for income taxes | $ | 7,334 | $ | 4,371 | ||
| Non-cash investing and financing activities: | ||||||
| Contingent consideration (earn-out) | $ | 1,417 | $ | 1,307 | ||
| Notes payable and other obligations for acquisitions | $ | 25,833 | $ | 9,250 | ||
| Stock issuance for acquisitions | $ | 4,239 | $ | 946 | ||
| Payment of contingent consideration with common stock | $ | 162 | $ | 100 | ||
| NV5 GLOBAL, INC. AND SUBSIDIARIES | |||||||||||||
| RECONCILIATION OF GROSS REVENUES TO TOTAL REVENUES | |||||||||||||
| (in thousands) | |||||||||||||
| (Unaudited) | |||||||||||||
| Three Months Ended | Year Ended | ||||||||||||
| December 31, | December 31, | December 31, | December 31, | ||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||
| Gross Revenues - GAAP | $ | 63,022 | $ | 42,320 | $ | 223,910 | $ | 154,655 | |||||
| Add: | Intercompany revenues in lieu of sub-consultants | 1,171 | 228 | 4,822 | 1,262 | ||||||||
| Total Revenues | $ | 64,193 | $ | 42,548 | $ | 228,732 | $ | 155,917 | |||||
| NV5 GLOBAL, INC. AND SUBSIDIARIES | |||||||||||||||
| RECONCILIATION OF GROSS REVENUES TO NET REVENUES | |||||||||||||||
| (in thousands) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, | December 31, | December 31, | December 31, | ||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| Gross Revenues - GAAP | $ | 63,022 | $ | 42,320 | $ | 223,910 | $ | 154,655 | |||||||
| Less: | Sub-consultant services | (8,808) | (6,088) | (31,054) | (21,394) | ||||||||||
| Other direct costs | (3,101) | (2,676) | (11,310) | (10,796) | |||||||||||
| Net Revenues | $ | 51,113 | $ | 33,556 | $ | 181,546 | $ | 122,465 | |||||||
| NV5 GLOBAL, INC. AND SUBSIDIARIES | ||||||||||||
| RECONCILIATION OF GAAP NET INCOME TO EBITDA | ||||||||||||
| (in thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended | Year Ended | |||||||||||
| December 31, | December 31, | December 31, | December 31, | |||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||
| Net Income | $ | 3,289 | $ | 2,672 | $ | 11,607 | $ | 8,492 | ||||
| Add: | Interest expense | 36 | 32 | 257 | 212 | |||||||
| Income tax expense | 1,692 | 1,503 | 6,539 | 4,995 | ||||||||
| Depreciation and Amortization | 1,943 | 1,022 | 6,228 | 3,468 | ||||||||
| EBITDA | $ | 6,960 | $ | 5,229 | $ | 24,631 | $ | 17,167 | ||||
| NV5 GLOBAL, INC. AND SUBSIDIARIES | |||||||||||||
| RECONCILIATION OF GAAP EPS TO ADJUSTED EPS | |||||||||||||
| (Unaudited) | |||||||||||||
| Three Months Ended | Year Ended | ||||||||||||
| December 31, | December 31, | December 31, | December 31, | ||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||
| Net Income - per diluted share | $ | 0.31 | $ | 0.33 | $ | 1.22 | $ | 1.18 | |||||
| Per diluted share adjustments: | |||||||||||||
| Add: | Amortization expense of intangible assets | 0.19 | 0.13 | 0.48 | 0.36 | ||||||||
| Income tax expense | (0.06) | (0.05) | (0.17) | (0.13) | |||||||||
| Adjusted EPS | $ | 0.44 | $ | 0.41 | $ | 1.53 | $ | 1.41 | |||||
Contact NV5 Global, Inc. Lauren Wright, Ph.D. Director of Investor Relations Tel: +1-408-392-7233 Email: [email protected]
NV5 Global, Inc.