NV5 Reports Strong Second Quarter 2014 Results

Marketwired

HOLLYWOOD, FL--(Marketwired - Aug 13, 2014) - NV5 Holdings, Inc. (NASDAQ: NVEE)

  • Gross Revenues Increased 70% to $29.2 million

  • Net Income Increased 43% to $1.1 million

  • Raises Full-Year 2014 Revenue Guidance Range to $100 Million to $107 Million

  • Raises Full-Year 2014 Diluted EPS Guidance Range to $0.82 to $0.92

NV5 Holdings, Inc. (the "Company") (NASDAQ: NVEE), a provider of professional and technical engineering and consulting solutions, today reported financial results for the second quarter and six months ended June 30, 2014.

Second Quarter 2014 Financial Highlights

  • Gross revenues increased 70% to $29.2 million, compared with $17.1 million in the second quarter of 2013;
  • Gross profit increased 39% to $11.9 million, compared with $8.6 million in the second quarter of 2013;
  • Net revenues1 increased 61% to $21.8 million, compared with $13.5 million in the second quarter of 2013;
  • Net income increased 43% to $1.1 million from $0.7 million in the second quarter of 2013.
  • Backlog of $76.1 million as of June 30, 2014 increased 26% from $60.2 million as of December 31, 2013.

"We continued the momentum experienced in the first quarter with another strong quarter of double-digit revenue and net income growth," said Dickerson Wright, chairman and CEO of NV5 Holdings. "These results were achieved from our internal focus on performance optimization, new projects and strategic acquisitions."

"Our highly-accretive acquisitions are taking us into new markets, while strengthening our service offering in current markets," continued Wright. "In addition, through our proven integration process we have increased the organic growth and bottom line performance of each acquisition. As we move into the second half of 2014, we remain focused on generating organic growth and driving process optimization, while evaluating a growing list of acquisition opportunities that would complement our platform in this highly-fragmented industry."

Review of Second Quarter 2014 Results

Gross Revenues

Gross revenues for the second quarter 2014 increased 70% to $29.2 million, compared with $17.1 million reported for the second quarter 2013. The increase in gross revenues was due primarily to organic growth from our existing platform as well as the contributions from the Company's acquisitions in 2013 and during the first six months of 2014.

Gross Profit

Gross profit for the second quarter 2014 was $11.9 million, compared with $8.6 million for the same period in 2013, representing an increase of 39% year-over-year. 

Net Revenues

Net revenues1 for the second quarter 2014 increased 61% to $21.8 million, compared with $13.5 million reported for the second quarter 2013.

Net Income

Net income for the second quarter 2014 was $1.1 million, or $0.19 per diluted share, compared with $0.7 million, or $0.18 per diluted share, for the second quarter 2013. The calculation of earnings per share (diluted) for second quarter 2014 reflects weighted average shares outstanding of 5,612,344 for the three months ended June 30, 2014, compared to weighted average shares outstanding of 4,030,002 for the three months ended June 30, 2013. The operating results and earnings per share for the second quarter 2014 includes a higher income tax rate of 36.6%, compared with an effective income tax rate of 30.7% for the second quarter 2013.

Six Months Ended 2014 Financial Highlights

  • Gross revenues increased 47% to $48.2 million, compared with $32.7 million in the first six months of 2013.
  • Gross profit increased 26% to $21.3 million, compared with $16.9 million in the first six months of 2013.
  • Net revenues1 increased 40% to $36.8 million, compared with $26.3 million in the first six months of 2013
  • Net income increased 36% to $1.8 million from $1.3 million in the first six months of 2013.

Review of Six Months 2014 Results

Gross Revenues

Gross revenues for the six months ended June 30, 2014 increased 47% to $48.2 million, compared with $32.7 million reported for the six months ended June 30, 2013. The increase in gross revenues was due primarily to organic growth from our existing platform as well as the contributions from the Company's acquisitions in 2013 and during the first six months of 2014.

Gross Profit

Gross profit for the six months ended June 30, 2014 was $21.3 million, compared with $16.9 million for the same period in 2013, representing an increase of 26% year-over-year. 

Net Revenues

Net revenues1 for the six months ended June 30, 2014 increased 40% to $36.8 million, compared with $26.3 million reported for the six months ended June 30, 2013.

Net Income

Net income for the six months ended June 30, 2014 was $1.8 million, or $0.32 per diluted share, compared with $1.3 million, or $0.40 per diluted share, for the six months ended June 30, 2013. The calculation of earnings per share (diluted) for six months ended June 30, 2014 reflects weighted-average shares outstanding of 5,502,696 for the six months ended June 30, 2014, compared to weighted-average shares outstanding of 3,230,411 for the six months ended June 30, 2013. The operating results and earnings per share for the six months ended June 30, 2014 includes a higher income tax rate of 36.6%, compared with an effective income tax rate of 28.2% for the six months ended June 30, 2013.

Backlog

At June 30, 2014, the Company reported backlog of approximately $76.1 million, compared with approximately $60.2 million at December 31, 2013. 

2014 Outlook

The Company is today raising its guidance for 2014 full-year gross revenues and diluted earnings per share. The Company now expects full-year 2014 gross revenues, including the acquisitions closed during the first six months of 2014, to be between $100 million and $107 million, representing an increase of approximately 47% to 57% over full-year 2013 gross revenues of $68.2 million.

The Company expects that full-year 2014 diluted earnings per share will now range between $0.82 per share and $0.92 per share, representing an increase of 17% to 31% over diluted earnings per share of $0.70 for the full-year 2013. This guidance on gross revenues and earnings per share does not include any anticipated acquisitions for the remainder of 2014.

Conference Call

NV5 management will host a conference call at 5:00 p.m. Eastern time today to discuss the second quarter 2014 results.

Date: Wednesday, August 13, 2014
Time: 5:00 p.m. Eastern time
Toll-free dial-in number: +1 877-407-0789
International dial-in number: +1 201-689-8562
Conference ID: 13587295
Webcast: http://ir.nv5.com

The conference call will be webcast live and available for replay via the "Investors" section of the NV5 website, www.NV5.com.

A replay of the conference call will be available approximately one hour following the conclusion of the call through August 20, 2014.

Toll-free replay number: +1 877-870-5176
International replay number: +1 858-384-5517
Replay PIN number:  13587295

1 NV5's gross revenues include sub-consultant costs and other direct costs which are generally pass-through costs and, therefore, the Company believes that net revenues, which is a non-GAAP financial measure commonly used in our industry, provides a meaningful perspective on its business results. A reconciliation of gross revenues as reported in accordance with U.S. Generally Accepted Accounting Principles (GAAP) to net revenues is provided at the end of this news release.

About NV5

NV5 Holdings, 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, energy, program management and environmental solutions. The Company operates 25 offices in California, Colorado, Utah, Florida, Pennsylvania and New Jersey 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, including, among others, statements with respect to our strategy of highly-accretive acquisitions taking us into new markets and strengthening our service offerings in current markets, our ability to generate organic growth and drive process optimization, the growth of acquisition opportunities that would complement our platform, and our guidance relating to gross revenues and diluted earnings per share. 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 herein. Such factors include, but are not limited to: (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; (e) our ability to successfully execute our mergers and acquisitions strategy, including the integration of new companies into the Company's business; (f) backlog cancellations and adjustments; and (g) 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.

         
         
NV5 Holdings, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
         
    June 30, 2014   December 31, 2013
Assets   (unaudited)    
Current assets:            
    Cash and cash equivalents   $ 5,655   $ 13,868
    Accounts receivable, net of allowance for doubtful accounts of $1,219 and $1,320 as of June 30, 2014 and December 31, 2013, respectively     25,104     16,722
    Prepaid expenses and other current assets     1,017     509
    Deferred income tax assets     1,004     1,004
    Total current assets     32,780     32,103
    Property and equipment, net     1,710     1,310
    Intangible assets, net     5,708     2,993
    Goodwill     10,755     7,106
    Cash surrender value of officers' life insurance     522     521
    Other assets     201     118
    Deferred income tax assets     724     724
      Total Assets   $ 52,400   $ 44,875
             
Liabilities and Stockholders' Equity            
    Current liabilities:            
    Accounts payable   $ 5,093   $ 3,780
    Accrued liabilities     5,219     4,189
    Income taxes payable     396     765
    Billings in excess of costs and estimated earnings on uncompleted contracts     322     401
    Client deposits     72     111
    Current portion of contingent consideration     629     333
    Current portion of stock repurchase obligation     576     687
    Current portion of notes payable     3,354     1,725
    Total current liabilities     15,661     11,991
    Contingent consideration, less current portion     318     638
    Stock repurchase obligation, less current portion     758     935
    Notes payable, less current portion     3,956     2,502
      Total liabilities     20,693     16,066
             
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, 5,708,706 and 5,504,236 shares issued and outstanding as of June 30, 2014 and December 31, 2013, respectively     57     55
    Additional paid-in capital     24,851     23,717
    Retained earnings     6,799     5,037
  Total stockholders' equity     31,707     28,809
      Total liabilities and stockholders' equity   $ 52,400   $ 44,875
             
             
             
NV5 Holdings, Inc. and Subsidiaries  
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME  
 (in thousands, except share data)  
(Unaudited)  
   
    Quarter Ended     Six Months Ended  
    June 30,     June 30,     June 30,     June 30,  
2014     2013     2014     2013  
                     
Gross revenues   $ 29,229     $ 17,149     $ 48,222     $ 32,729  
                                 
Direct costs (excluding depreciation and amortization):                                
Salaries and wages     9,852       4,964       15,512       9,432  
Sub-consultant services     3,923       3,092       7,010       5,475  
Other direct costs     3,510       522       4,401       910  
                                 
Total direct costs     17,285       8,578       26,923       15,817  
                                 
Gross Profit     11,944       8,571       21,299       16,912  
                                 
Operating Expenses:                                
Salaries and wages, payroll taxes and benefits     6,237       4,833       11,323       9,748  
General and administrative     2,538       1,450       4,478       2,842  
Facilities and facilities related     906       809       1,679       1,663  
Depreciation and amortization     522       372       910       723  
                                 
Total operating expenses     10,203       7,464       18,390       14,976  
                                 
Income from operations     1,741       1,107       2,909       1,936  
                                 
Other (expense) income:                                
    Interest expense     (77 )     (43 )     (129 )     (136 )
                                 
Total other (expense)     (77 )     (43 )     (129 )     (136 )
                                 
Income before income tax expense     1,664       1,064       2,780       1,800  
Income tax expense     (610 )     (327 )     (1,018 )     (507 )
Net income and comprehensive income   $ 1,054     $ 737     $ 1,762     $ 1,293  
                                 
Earnings per share:                                
  Basic   $ 0.21     $ 0.20     $ 0.35     $ 0.43  
  Diluted   $ 0.19     $ 0.18     $ 0.32     $ 0.40  
                                 
Weighted average common shares outstanding:                                
  Basic     5,104,304       3,778,062       5,065,134       2,986,332  
  Diluted     5,612,344       4,030,002       5,502,696       3,230,411  
                                 
                                 
                                 
NV5 HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GROSS REVENUES TO NET REVENUES
(in thousands)
(Unaudited)
                 
    Quarter Ended   Six Months Ended
    June 30,   June 30,   June 30,   June 30,
    2014   2013   2014   2013
                         
Gross revenues   $ 29,229   $ 17,149   $ 48,222   $ 32,729
                         
Less: Sub-consultant services     3,923     3,092     7,010     5,475
  Other direct costs     3,510     522     4,401     910
Net revenues   $ 21,796   $ 13,535   $ 36,811   $ 26,344

NV5's gross revenues include sub-consultant costs and other direct costs which are generally pass-through costs and, therefore, the Company believes that net revenues, which is a non-GAAP financial measure commonly used in our industry, provides a meaningful perspective on its business results.

Contact:


NV5 Holdings, Inc.
Richard Tong
Tel: +1-954-495-2114

- OR -

The Piacente Group | Investor Relations
Don Markley or Glenn Garmont
Tel: +1-212-481-2050
Email: nv5@tpg-ir.com

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