Bowman Consulting Group Ltd. (Nasdaq: BWMN) (“Bowman” or the
“Company”), a national engineering and infrastructure services firm
supporting owners and developers of the built environment, today
released financial results for the three and six months ended June
30, 2023.
“We continue to execute on our strategic growth and revenue
diversification plans,” said Gary Bowman, Chairman and CEO of
Bowman. “We generated record revenue and adjusted EBITDA during a
quarter where we closed on five acquisitions representing
approximately $36 million of annualized revenue. Our orders were
strong, and our backlog increased by nearly $90 million as compared
to last year. During the second quarter we increased headcount by
17%, with the majority coming through acquisitions, where we
believe there is a meaningful amount of utilization optimization to
be achieved over time through both revenue synergies and work
sharing. We continue to feel confident about our execution and
performance as reflected by our increased financial guidance.”
Financial highlights for the three months ended June 30, 2023,
compared to June 30, 2022:
- Gross revenue of $82.8 million, compared to $62.4 million, a
33% increase
- Year-over-year organic gross revenue growth1 of 13%
- Net service billing2 of $73.8 million, compared to $56.4
million, a 31% increase
- Year-over-year organic net service billing growth of 12%
- Net loss of $(0.6) million, compared to a net loss of $(0.3)
million
- Adjusted EBITDA2 of $11.1 million, compared to $7.6 million, a
46% increase
- Adjusted EBITDA margin, net 2 of 15.0% compared to 13.4%, a 160
bps increase
- Gross backlog2 of $295 million, compared to $206 million, a 43%
increase
Financial highlights for the six months ended June 30, 2023,
compared to June 30, 2022:
- Gross revenue of $158.9 million, compared to $114.9 million, a
38% increase
- Year-over-year organic gross revenue growth1 of 22%
- Net service billing2 of $141.4 million, compared to $104.1
million, a 36% increase
- Year-over-year organic net service billing growth of 20%
- Net loss of $(0.1) million, compared to a net income of $1.1
million
- Adjusted EBITDA2 of $20.7 million, compared to $15.0 million, a
38% increase
- Adjusted EBITDA margin, net 2 of 14.7% compared to 14.4%, a 30
bps increase
Business combinations and acquisitions during the second quarter
2023:
- Closed on the acquisition of Richter & Associates – April
2023
- Closed on the acquisition of Fisher Engineering – May 2023
- Closed on the acquisition of Hole Montes – May 2023
- Closed on the acquisition of MTX Surveying – June 2023
- Closed on the acquisition of Infrastructure Engineers – June
2023
Financing Activities during and subsequent to the second quarter
2023:
On August 2, 2023, the Company announced that it had entered
into a First Amendment to its Amended and Restated Credit Agreement
(the “Revolving Credit Facility”). The amendment increased the
maximum allowable borrowing under the Revolving Credit Facility to
$70 million from $50 million, adjusted certain provisions relating
to interest rate spreads and unused fees, and extended the term of
the Revolver to July 31, 2025. Other general terms of the Revolving
Credit Facility remained unchanged.
Increasing FY 2023 Guidance
The Company is increasing its full year 2023 outlook for Net
Service Billing to be in the range of $300 to $315 million and
Adjusted EBITDA in the range of $47 to $52 million. The current
outlook for 2023 is based on completed acquisitions as of the date
of this release and does not include contributions from any future
acquisitions. Management discusses the Company’s acquisition
pipeline and its prospective impact during regularly scheduled
earnings calls.
Q2 2023 Earnings Webcast
Bowman will host an earnings webcast to discuss the results of
the quarter as follows:
Date:
August 8, 2023
Time:
9:00 a.m. Eastern Time
Hosts:
Gary Bowman, Chairman and CEO and Bruce
Labovitz, Chief Financial Officer
Where:
http://investors.bowman.com
1 Includes reclassification of McMahon
Associates and Perry Engineering acquisitions as organic
revenue.
2 Non-GAAP financial metrics the Company
believes offer valuable perspective on results of operations. See
Non-GAAP tables below for reconciliations.
About Bowman Consulting Group Ltd.
Headquartered in Reston, Virginia, Bowman is an established
professional services firm delivering innovative engineering
solutions to customers who own, develop, and maintain the built
environment. With over 1,900 employees more than 75 locations
throughout the United States, Bowman provides a variety of
planning, engineering, construction management, commissioning,
environmental consulting, geomatics, survey, land procurement and
other technical services to customers operating in a diverse set of
regulated end markets. For more information, visit bowman.com or
investors.bowman.com.
Forward-Looking Statements
This press release may contain “forward-looking statements”
within the meaning of the safe harbor provisions of the U.S.
Private Securities Litigation Reform Act of 1995. All statements
contained in this press release other than statements of historical
fact, including statements regarding our future results of
operations and financial position, business strategy and plans and
objectives for future operations, are forward-looking statements
and represent our views as of the date of this press release. The
words “anticipate”, “believe”, “continue”, “estimate”, “expect”,
“intend”, “may”, “will”, “goal” and similar expressions are
intended to identify forward-looking statements. We have based
these forward-looking statements on our current expectations and
projections about future events and financial trends that we
believe may affect our financial condition, results of operations,
business strategy, short-term and long-term business operations and
objectives and financial needs, These forward-looking statements
are subject to several assumptions and risks and uncertainties,
many of which involve factors or circumstances that are beyond our
control that could affect our financial results. 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. 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. Considering these risks, uncertainties and assumptions,
the future events and trends discussed in this press release may
not occur and actual results could differ materially and adversely
from those anticipates or implied in any forward-looking
statements. Except as required by law, we are under no obligation
to update these forward-looking statements after the date of this
press release, or to update the reasons if actual results differ
materially from those anticipated in the forward-looking
statements.
Non-GAAP Financial Measures and Other Key Metrics
We supplement our consolidated financial statements, which are
prepared and presented in accordance with GAAP, with certain
non-GAAP financial measures, as described below, to help represent,
explain, and understand our operating performance. These non-GAAP
financial measures may be different than similarly referenced
measures used by other companies. The non-GAAP measures are
intended to enhance investors’ overall understanding and evaluation
of our financial performance and should not be considered a
substitute for, or superior to, the financial information prepared
and presented in accordance with GAAP. We present these non-GAAP
financial measures to assist investors in seeing our financial
performance in a manner more aligned with management’s view and
believe these measures provide additional tools by which investors
can evaluate our core financial performance over multiple periods
relative to other companies in our industry. Reconciliations of
non-GAAP financial measures to the most directly comparable GAAP
financial measures are included in the financial tables
accompanying this press release.
BOWMAN CONSULTING GROUP
LTD.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Amounts in thousands except
per share data)
June 30, 2023
December 31,
2022
(Unaudited)
ASSETS
Current
Assets
Cash and equivalents
$
9,746
$
13,282
Accounts receivable, net
81,874
64,443
Contract assets
26,050
16,321
Notes receivable - officers, employees,
affiliates, current portion
938
1,016
Prepaid and other current assets
11,723
7,068
Total current assets
130,331
102,130
Non-Current
Assets
Property and equipment, net
26,874
25,104
Operating lease, right-of-use assets
39,476
30,264
Goodwill
77,106
53,210
Notes receivable
903
903
Notes receivable - officers, employees,
affiliates, less current portion
1,387
1,417
Other intangible assets, net
39,763
27,950
Deferred tax asset, net
21,098
13,759
Other assets
1,082
1,020
Total Assets
$
338,020
$
255,757
LIABILITIES AND EQUITY
Current
Liabilities
Revolving Credit Facility
$
21,189
$
–
Accounts payable and accrued
liabilities
32,878
40,293
Contract liabilities
10,046
6,370
Notes payable, current portion
12,438
10,168
Operating lease obligation, current
portion
8,153
6,949
Finance lease obligation, current
portion
6,001
5,297
Total current liabilities
90,705
69,077
Non-Current
Liabilities
Other non-current obligations
28,827
356
Notes payable, less current portion
16,734
16,276
Operating lease obligation, less current
portion
36,610
28,087
Finance lease obligation, less current
portion
14,619
14,254
Pension and post-retirement obligation,
less current portion
4,881
4,848
Total liabilities
$
192,376
$
132,898
Shareholders' Equity
Preferred Stock, $0.01 par value;
5,000,000 shares authorized, no shares issued and outstanding
$
–
$
–
Common stock, 0.01 par value; 30,000,000
shares authorized; 17,130,179 shares issued and 14,600,293
outstanding, and 15,949,805 shares issued and 13,556,550
outstanding, respectively
171
159
Additional paid-in-capital
189,351
162,922
Accumulated other comprehensive income
557
578
Treasury stock, at cost; 2,529,886 and
2,393,255, respectively
(24,417
)
(20,831
)
Stock subscription notes receivable
(125
)
(173
)
Accumulated deficit
(19,893
)
(19,796
)
Total shareholders' equity
$
145,644
$
122,859
TOTAL LIABILITIES AND EQUITY
$
338,020
$
255,757
BOWMAN CONSULTING GROUP
LTD.
CONDENSED CONSOLIDATED INCOME
STATEMENT
(Amounts in thousands except
per share data)
(Unaudited)
For the Three Months
Ended June 30,
For the Six Months
Ended June 30,
2023
2022
2023
2022
Gross Contract Revenue
$
82,755
$
62,399
$
158,855
$
114,860
Contract costs: (exclusive of
depreciation and amortization below)
Direct payroll costs
32,075
25,071
60,919
45,746
Sub-consultants and expenses
8,963
5,983
17,501
10,743
Total contract costs
41,038
31,054
78,420
56,489
Operating Expenses:
Selling, general and administrative
38,340
28,065
71,965
50,868
Depreciation and amortization
4,719
2,823
8,285
5,213
(Gain) on sale
(226
)
(27
)
(237
)
(32
)
Total operating expenses
42,833
30,861
80,013
56,049
Income (loss) from operations
(1,116
)
484
422
2,322
Other expense
1,143
994
2,358
1,491
Income (loss) before tax expense
(2,259
)
(510
)
(1,936
)
831
Income tax (benefit) expense
(1,625
)
(190
)
(1,839
)
(306
)
Net income (loss)
$
(634
)
$
(320
)
$
(97
)
$
1,137
Earnings allocated to non-vested
shares
–
–
$
–
$
191
Net income (loss) attributable to common
shareholders
$
(634
)
$
(320
)
$
(97
)
$
946
Earnings (loss) per
share
Basic
$
(0.05
)
$
(0.03
)
$
(0.01
)
$
0.09
Diluted
$
(0.05
)
$
(0.03
)
$
(0.01
)
$
0.09
Weighted average shares
outstanding:
Basic
12,276,173
10,761,172
12,022,550
10,346,089
Diluted
12,276,173
10,761,172
12,022,550
10,427,602
BOWMAN CONSULTING GROUP
LTD.
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS
(Unaudited)
For the Six Months Ended June
30,
2023
2022
Cash Flows from Operating
Activities:
Net Income (loss)
$
(97
)
$
1,137
Adjustments to reconcile net income (loss)
to net cash provided by operating activities
Depreciation and amortization
4,620
3,971
Amortization of intangible assets
3,665
1,241
Gain on sale of assets
(237
)
(32
)
Bad debt
289
365
Stock based compensation
11,169
7,274
Accretion of discounts on notes
payable
264
–
Deferred taxes
(7,339
)
–
Deferred rent
–
(237
)
Changes in operating assets and
liabilities, net of acquisition of businesses
Accounts receivable
(10,885
)
(10,254
)
Contract assets
(5,267
)
(510
)
Prepaid expenses and other assets
(4,174
)
(5,124
)
Accounts payable and accrued expenses
9,535
5,877
Contract liabilities
523
560
Net cash provided by operating
activities
2,066
4,268
Cash Flows from Investing
Activities:
Purchases of property and equipment
(632
)
(368
)
Fixed assets converted to lease
financing
–
22
Proceeds from sale of assets and disposal
of leases
237
32
Payments received under loans to
shareholders
108
118
Acquisitions of businesses, net of cash
acquired
(15,408
)
(7,950
)
Collections under stock subscription notes
receivable
48
47
Net cash used in investing activities
(15,647
)
(8,099
)
Cash Flows from Financing
Activities:
Proceeds from common stock offering, net
of underwriting discounts and commissions and other offering
costs
–
15,475
Borrowings under revolving credit
facility
21,189
–
Repayments under fixed line of credit
(283
)
(365
)
Repayment under notes payable
(4,743
)
(1,433
)
Payments on finance leases
(3,309
)
(2,921
)
Payments for purchase of treasury
stock
(3,586
)
(2,368
)
Proceeds from issuance of common stock
777
607
Net cash provided by financing
activities
10,045
8,995
Net increase (decrease) in cash and cash
equivalents
(3,536
)
5,164
Cash and cash equivalents, beginning of
period
13,282
20,619
Cash and cash equivalents, end of
period
$
9,746
$
25,783
Supplemental disclosures of cash flow
information:
Cash paid for interest
$
1,547
$
713
Cash paid for income taxes
$
745
383
Non-cash investing and financing
activities:
Property and equipment acquired under
capital lease
$
(4,385
)
$
(4,262
)
Issuance of notes payable for
acquisitions
$
(7,825
)
$
(3,697
)
BOWMAN CONSULTING GROUP
LTD.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(amounts in thousands except
per share data)
Condensed Combined Statement of
Operations Reconciliation
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2023
2022
2023
2022
Gross contract revenue
$
82,755
$
62,399
$
158,855
$
114,860
Contract costs (exclusive of depreciation
and amortization)
$
41,038
$
31,054
$
78,420
$
56,489
Operating expense
$
42,833
$
30,861
$
80,013
$
56,049
Income (loss) from operations
$
(1,116
)
$
484
$
422
$
2,322
Other expense
$
1,143
$
994
$
2,358
$
1,491
Income tax expense (benefit)
$
(1,625
)
$
(190
)
$
(1,839
)
$
(306
)
Net income (loss)
$
(634
)
$
(320
)
$
(97
)
$
1,137
Net margin
(0.8
)%
(0.5
)%
(0.1
)%
1.0
%
Other financial information 1
Net service billing
$
73,792
$
56,416
$
141,354
$
104,117
Adjusted EBITDA
11,053
7,576
20,725
14,983
Adjusted EBITDA margin, net
15.0
%
13.4
%
14.7
%
14.4
%
Gross Revenue to Net Service Billing
Reconciliation
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2023
2022
2023
2022
Gross contract revenue
$
82,755
$
62,399
$
158,855
$
114,860
Less: sub-consultants and other direct
expenses
8,963
5,983
17,501
10,743
Net service billing
$
73,792
$
56,416
$
141,354
$
104,117
Adjusted EBITDA Reconciliation
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2023
2022
2023
2022
Net Service Billing
$
73,792
$
56,416
$
141,354
$
104,117
Net Income (loss)
$
(634
)
$
(320
)
$
(97
)
$
1,137
+ interest expense
1,112
350
2,007
685
+ depreciation & amortization
4,719
2,823
8,285
5,213
+ tax (benefit) expense
(1,625
)
(190
)
(1,839
)
(306
)
EBITDA
$
3,572
$
2,663
$
8,356
$
6,729
+ non-cash stock compensation
6,888
4,038
11,322
7,274
+ transaction related expenses
123
–
123
–
+ settlements and other non-core
expenses
113
215
113
215
+ acquisition expenses
357
660
811
765
Adjusted EBITDA
$
11,053
$
7,576
$
20,725
$
14,983
Adjusted EBITDA margin, net
15.0
%
13.4
%
14.7
%
14.4
%
1 Non-GAAP financial metrics the Company
believes offer valuable perspective on results of operations. See
Non-GAAP tables below for reconciliations.
BOWMAN CONSULTING GROUP
LTD.
GROSS CONTRACT REVENUE
COMPOSITION
(Unaudited)
(dollars in thousands)
For the three months ended
June 30,
Consolidated Gross Revenue
2023
%
2022
%
Change
Change
Building Infrastructure
48,616
58.7%
42,571
68.2%
6,045
14.2%
Transportation
15,870
19.2%
9,276
14.9%
6,594
71.1%
Power and Utilities
15,585
18.8%
9,326
14.9%
6,259
67.1%
Emerging Markets1
2,684
3.3%
1,226
2.0%
1,458
118.9%
Total
82,755
100.0%
62,399
100.0%
20,356
32.6%
(dollars in thousands)
For the three months ended
June 30,
Organic v Acquired Revenue 2
2023
%
2022
%
Change
Change
Baseline organic revenue
70,414
85.1%
62,249
99.8%
8,165
13.1%
Acquired revenue
12,341
14.9%
150
0.2%
12,191
n/a
Total
82,755
100.0%
62,399
100.0%
20,356
32.6%
(dollars in thousands)
For the six months ended June
30,
Consolidated Gross Revenue
2023
%
2022
%
Change
Change
Building Infrastructure
92,953
58.5%
81,332
70.8%
11,621
14.3%
Transportation
31,889
20.1%
13,247
11.5%
18,642
140.7%
Power and Utilities
28,909
18.2%
18,075
15.7%
10,834
59.9%
Emerging Markets1
5,104
3.2%
2,206
2.0%
2,898
131.4%
Total
158,855
100.0%
114,860
100.0%
43,995
38.3%
(dollars in thousands)
For the six months ended June
30,
Organic v Acquired Revenue 2
2023
%
2022
%
Change
Change
Baseline organic revenue
139,857
88.0%
114,710
99.9%
25,147
21.9%
Acquired revenue
18,998
12.0%
150
0.1%
18,848
16.4%
Total
158,855
100.0%
114,860
100.0%
43,995
38.3%
1 Adjusted for change, represents mining,
water resources and other. Effective 12/31/2022, we reclassified
renewables as power & utilities. For six months ended June 30,
2022, $2.5 million of renewables revenue was reclassified
accordingly for consistency.
2 Revenue from acquired companies is
reclassified as organic revenue in the first full quarter following
the 12-month anniversary of closing. This results in a change from
previously reported numbers.
BOWMAN CONSULTING GROUP
LTD.
GROSS BACKLOG BY CATEGORY AT
JUNE 30, 2023
(Unaudited)
Category
Percentage
Building Infrastructure
56.0
%
Transportation
25.0
%
Power and Utilities
16.0
%
Emerging Markets
3.0
%
TOTAL
100.0
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230807454075/en/
Investor Relations Contacts:
Bruce Labovitz ir@bowman.com (703) 787-3403
Larry Clark lclark@bowman.com (310) 622-8223
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