Bowman consulting group ltd announces q1 2023 financial results, beats estimates and raises guidance
Reston, va.--(business wire)--bowman consulting group ltd. (nasdaq: bwmn) (“bowman” or the “company”), a national engineering services firm supporting owners and developers of the built environment, today released financial results for the three months ended march 31, 2023. “we started the year strong, exceeding estimates and building upon the solid foundation and excellent results we delivered in 2022,” said gary bowman, chairman and ceo of bowman. “during the first quarter, our net service revenue increased 42% year-over-year, driven both by strong organic growth of 12% and by contributions from the eight acquisitions that we completed over the last year. in keeping with our long-term strategic plan to diversify our revenue, our transportation services market outpaced our other markets with a nearly four-fold year-over-year increase in revenue and a nearly three-fold increase in its percentage of our total revenue mix.” “new order volume in the first quarter exceeded our goals and we entered the second quarter with a strong backlog and several awards in hand where contracts are not yet finalized, so the revenue is not yet included in our backlog. as such, we remain confident in our ability to continue to deliver growth in 2023 and are therefore increasing our full year guidance for net revenues and adjusted ebitda,” bowman continued. “additionally, we continue to have a strong pipeline of acquisition opportunities. in april, we completed the acquisition of richter & associates, a rockville, maryland based professional services firm focused on dry utility infrastructure engineering, which continues our ongoing diversification effort to build our power and utility services revenue.” financial highlights for the three months ended march 31, 2023, compared to march 31, 2022: gross revenue of $76.1 million, compared to $52.5 million, a 45% increase year-over-year organic gross revenue growth1 of 13% net service billing1,2 of $67.6 million, compared to $47.7 million, a 42% increase year-over-year organic net service billing growth of 12% net income of $0.5 million, compared to a net income of $1.5 million adjusted ebitda2 of $9.7 million, compared to $7.4 million, a 31% increase adjusted ebitda margin, net2 of 14.3% compared to 15.5%, a 120 bps decrease gross backlog2 of $252 million, compared to $173 million, a 46% increase business highlights subsequent to the first quarter 2023: acquisition of richter & associates, a utility services engineering firm focused on last mile utility infrastructure design; april 2023 increasing fy 2023 guidance the company is increasing its full year 2023 outlook for net service billing to be in the range of $285 to $300 million and adjusted ebitda in the range of $44 to $50 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 will discuss the company’s acquisition pipeline during its upcoming earnings call. fy 2023 earnings webcast bowman will host an earnings webcast to discuss the results of the quarter as follows: date: may 9, 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 revenue from acquired companies is reclassified as organic revenue in the first full quarter following the 12-month anniversary of closing. 2 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 1,700 employees in more than 70 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 anticipated 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) march 31, 2023 december 31, 2022 (unaudited) assets current assets cash and equivalents $ 14,328 $ 13,282 accounts receivable, net 67,164 64,443 contract assets 19,931 16,321 notes receivable - officers, employees, affiliates, current portion 938 1,016 prepaid and other current assets 7,704 7,068 total current assets 110,065 102,130 non-current assets property and equipment, net 26,401 25,104 operating lease, right-of-use assets 31,132 30,264 goodwill 53,082 53,210 notes receivable 903 903 notes receivable - officers, employees, affiliates, less current portion 1,390 1,417 other intangible assets, net 26,581 27,950 deferred tax asset, net 17,428 13,759 other assets 1,080 1,020 total assets $ 268,062 $ 255,757 liabilities and equity current liabilities accounts payable and accrued liabilities $ 30,696 $ 40,293 contract liabilities 6,838 6,370 notes payable, current portion 9,243 10,168 operating lease obligation, current portion 6,967 6,949 finance lease obligation, current portion 5,804 5,297 total current liabilities 59,548 69,077 non-current liabilities other non-current obligations 17,811 356 notes payable, less current portion 14,393 16,276 operating lease obligation, less current portion 29,143 28,087 finance lease obligation, less current portion 15,028 14,254 pension and post-retirement obligation, less current portion 4,879 4,848 total liabilities $ 140,802 $ 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 as of march 31, 2023 and december 31, 2022; 16,019,601 shares issued and 13,593,846 outstanding, and 15,949,805 shares issued and 13,556,550 outstanding as of march 31, 2023 and december 31, 2022, respectively 160 159 additional paid-in-capital 167,440 162,922 accumulated other comprehensive income 568 578 treasury stock, at cost; 2,425,755 and 2,393,255, respectively (21,498 ) (20,831 ) stock subscription notes receivable (151 ) (173 ) accumulated deficit (19,259 ) (19,796 ) total shareholders' equity $ 127,260 $ 122,859 total liabilities and equity $ 268,062 $ 255,757 bowman consulting group ltd. condensed consolidated income statement (amounts in thousands except per share data) (unaudited) for the three months ended march 31, 2023 2022 gross contract revenue $ 76,100 $ 52,461 contract costs: (exclusive of depreciation and amortization below) direct payroll costs 28,835 20,659 sub-consultants and expenses 8,538 4,760 total contract costs 37,373 25,419 operating expenses: selling, general and administrative 33,636 22,821 depreciation and amortization 3,565 2,389 (gain) on sale (11 ) (6 ) total operating expenses 37,190 25,204 income from operations 1,537 1,838 other expense 1,213 498 income (loss) before tax expense 324 1,340 income tax (benefit) expense (213 ) (117 ) net income $ 537 $ 1,457 earnings allocated to non-vested shares 69 254 net income attributable to common shareholders $ 468 $ 1,203 earnings per share basic $ 0.04 $ 0.12 diluted $ 0.04 $ 0.12 weighted average shares outstanding: basic 11,800,308 9,926,395 diluted 12,669,581 10,043,794 bowman consulting group ltd. condensed consolidated statement of cash flows (unaudited) for the three months ended march 31, 2023 2022 cash flows from operating activities: net income $ 537 $ 1,457 adjustments to reconcile net income to net cash provided by operating activities depreciation and amortization 2,196 1,922 amortization of intangible assets 1,369 468 gain on sale of assets (11 ) (6 ) bad debt 222 152 stock based compensation 4,363 3,236 accretion of discounts on notes payable 140 – deferred taxes (3,669 ) – deferred rent – (119 ) changes in operating assets and liabilities, net of acquisition of businesses accounts receivable (2,943 ) (6,945 ) contract assets (3,610 ) (721 ) prepaid expenses and other assets (533 ) (630 ) accounts payable and accrued expenses 7,748 2,960 contract liabilities 469 640 net cash provided by operating activities 6,278 2,414 cash flows from investing activities: purchases of property and equipment (536 ) (198 ) fixed assets converted to lease financing – 278 proceeds from sale of assets and disposal of leases 11 6 payments received under loans to shareholders 105 70 acquisitions of businesses, net of cash acquired – (550 ) collections under stock subscription notes receivable 22 24 net cash used in investing activities (398 ) (370 ) cash flows from financing activities: proceeds from common stock offering, net of underwriting discounts and commissions and other offering costs – 15,475 repayments under fixed line of credit (185 ) (182 ) repayment under notes payable (2,685 ) (905 ) payments on finance leases (1,687 ) (1,414 ) payments for purchase of treasury stock (667 ) (988 ) proceeds from issuance of common stock 390 289 net cash (used) provided by financing activities (4,834 ) 12,275 net increase in cash and cash equivalents 1,046 14,319 cash and cash equivalents, beginning of period 13,282 20,619 cash and cash equivalents, end of period $ 14,328 $ 34,938 for the three months ended march 31, 2023 2022 supplemental disclosures of cash flow information: cash paid for interest $ 757 $ 344 cash paid for income taxes $ – 279 non-cash investing and financing activities: property and equipment acquired under capital lease $ (2,964 ) $ (2,456 ) issuance of notes payable for acquisitions $ – $ (200 ) bowman consulting group ltd. reconciliation of gaap to non-gaap financial measures (amounts in thousands except per share data) (unaudited) condensed combined statement of operations reconciliation for the three months ended march 31, 2023 2022 gross contract revenue $ 76,100 $ 52,461 contract costs (exclusive of depreciation and amortization) $ 37,373 $ 25,419 operating expense $ 37,190 $ 25,204 income from operations $ 1,537 $ 1,838 other (income) expense $ 1,213 $ 498 income tax expense (benefit) $ (213 ) $ (117 ) net income $ 537 $ 1,457 net margin 0.7 % 2.8 % other financial information1 net service billing $ 67,562 $ 47,701 adjusted ebitda 9,673 7,404 adjusted ebita margin, net 14.3 % 15.5 % gross revenue to net services billing reconciliation for the three months ended march 31, 2023 2022 gross contract revenue $ 76,100 $ 52,461 less: sub-consultants and other direct expenses 8,538 4,760 net services billing $ 67,562 $ 47,701 adjusted ebitda reconciliation for the three months ended march 31, 2023 2022 net income $ 537 $ 1,457 + interest expense 896 334 + depreciation & amortization 3,565 2,389 + tax (benefit) expense (213 ) (117 ) ebitda $ 4,785 $ 4,063 + non-cash stock compensation 4,434 3,236 + acquisition expenses 454 105 adjusted ebitda $ 9,673 $ 7,404 adjusted ebitda margin, net 14.3 % 15.5 % 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 march 31, consolidated gross revenue 2023 % 2022 % change % change building infrastructure 44,337 58.3 % 38,762 73.9 % 5,575 14.4 % transportation 16,019 21.0 % 3,970 7.6 % 12,049 303.5 % power and utilities 13,324 17.5 % 8,749 16.7 % 4,575 52.3 % emerging markets1 2,420 3.2 % 980 1.9 % 1,440 146.9 % total 76,100 100.0 % 52,461 100.0 % 23,639 45.1 % (dollars in thousands) for the three months ended march 31, organic vs. acquired revenue 2 2023 % 2022 % change % change baseline organic revenue 58,791 77.3 % 52,195 99.5 % 6,596 12.6 % acquired revenue 17,309 22.7 % 266 0.5 % 17,043 n/a total 76,100 100.0 % 52,461 100.0 % 23,639 45.1 % 1 adjusted for change, represents mining, water resources and other. 2 bowman consulting group ltd. gross backlog by category at march 31, 2023 (unaudited) category percentage building infrastructure 51.0 % transportation 32.0 % power and utilities 13.0 % emerging markets 4.0 % total 100.0 %
