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: |
1 |
Revenue from acquired companies is reclassified as organic revenue in the first full quarter following the 12-month anniversary of closing. |
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 1,700 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) |
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||||||||
|
March 31,
|
|
December 31,
|
|||||
|
(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) |
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|
|
|
|
|
|
|
|||
(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 |
Revenue from acquired companies is reclassified as organic revenue in the first full quarter following the 12-month anniversary of closing. |
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 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230505005514/en/
Contacts
Investor Relations Contacts:
Bruce Labovitz
ir@bowman.com
(703) 787-3403
Larry Clark
lclark@bowman.com
(310) 622-8223
