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 record financial results for the three months ended September 30, 2022.
“We have once again reported a record quarter that exceeded estimates,” said Gary Bowman, Chairman and CEO of Bowman. “We continue to generate growth across all our markets and increase our backlog through bookings that outpace deliveries. Our acquisitions program has proven successful as we continue to acquire strategic partners at attractive multiples and realize meaningful synergies, leading to acquired revenue growth of 24% collectively since acquisition. We are optimistic about the fourth quarter and expect continued growth in revenue, earnings, and operating cash flow into 2023. We are once again increasing our full year outlook and are introducing 2023 guidance that reflects confidence in our ability to continue to deliver these industry leading results.”
Financial Highlights for the three months ended September 30, 2022, compared to September 30, 2021:
Gross revenue of $71.2 million, compared to $39.7 million, a 79% increase
Year-over-year organic gross revenue growth of 23%
Net service billing1 of $64.9 million, compared to $35.7 million, an 82% increase
Year-over-year organic net service billing growth of 25%
Net income of $3.4 million, compared to a net income of $0.4 million
Adjusted EBITDA1 of $9.6 million, compared to $4.4 million, a 118% increase
Adjusted EBITDA margin, net 1 of 14.8%, compared to 12.4%, a 240-basis point increase
Gross backlog1 of $230 million, compared to $139 million, a 65% increase
Financial Highlights for the nine months ended September 30, 2022, compared to September 30, 2021:
Gross revenue of $186.1 million, compared to $108.0 million, a 72% increase
Year-over-year organic gross revenue growth of 28%
Net service billing1 of $169.0 million, compared to $97.1 million, a 74% increase
Year-over-year organic net service billing growth of 31%
Net income of $4.5 million, compared to a net income of $0.9 million
Adjusted EBITDA1 of $24.6 million, compared to $12.7 million, a 94% increase
Adjusted EBITDA margin, net 1 of 14.6%, compared to 13.1%, a 150-basis point increase
Business Highlights during the Third Quarter:
Closed on the acquisition of Project Design Consultants – July 2022
Closed on the acquisition of Anchor Engineering – August 2022
Business Highlights after the Third Quarter:
Closed on the acquisition of Spatial Acuity – November 2022
Closed on the acquisition of SEI Engineering – November 2022
Increasing FY 2022 Guidance and Introducing FY 2023 Guidance
The Company is increasing its full year 2022 outlook for Net Service Billing to be in the range of $230 to $234 million and Adjusted EBITDA in the range of $33 to $35 million. This represents an increase from the previous guidance for Net Service Billing of $205 to $220 million and Adjusted EBITDA of $29 to $33 million. The Company is introducing its full year 2023 outlook for Net Service Billing to be in the range of $270 to $290 million and Adjusted EBITDA in the range of $42 to $48 million. The current outlook for 2022 and 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.
Q3 2022 Earnings Webcast
Bowman will host an earnings webcast to discuss the results of the quarter as follows:
Date:
November 11, 2022
Time:
9:00 a.m. Eastern Time
Hosts:
Gary Bowman, Chairman and CEO and Bruce Labovitz, Chief Financial Officer
Where:
1
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 68 offices 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. AND AFFILIATES
CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)
(Amounts in thousands except per share data)
For the Three Months
Ended September 30,
For the Nine Months
Ended September 30,
2022
2021
2022
2021
Gross Contract Revenue
$
71,246
$
39,715
$
186,105
$
108,041
Contract costs: (exclusive of depreciation and amortization below)
Direct payroll costs
27,641
15,531
73,353
42,873
Sub-consultants and expenses
6,343
3,967
17,086
10,967
Total contract costs
33,984
19,498
90,439
53,840
Operating Expenses:
Selling, general and administrative
31,916
18,373
82,819
48,328
Depreciation and amortization
3,138
1,598
8,350
4,506
Gain on sale
(11
)
(46
)
(44
)
(99
)
Total operating expenses
35,043
19,925
91,125
52,735
Income from operations
2,219
292
4,541
1,466
Other expense
595
314
2,086
706
Income (loss) before tax expense
1,624
(22
)
2,455
760
Income tax (benefit) expense
(1,773
)
(379
)
(2,079
)
(139
)
Net income
$
3,397
$
357
$
4,534
$
899
Earnings allocated to non-vested shares
504
71
731
165
Net income attributable to common shareholders
$
2,893
$
286
$
3,803
$
734
Earnings per share
Basic
$
0.26
$
0.03
$
0.36
$
0.10
Diluted
$
0.25
$
0.03
$
0.34
$
0.10
Weighted average shares outstanding:
Basic
11,304,946
8,920,505
10,669,221
7,003,462
Diluted
11,768,411
8,935,274
11,129,478
7,008,440
BOWMAN CONSULTING GROUP LTD. AND AFFILIATES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except per share data)
September 30,
2022
December 31,
2021
(Unaudited)
ASSETS
Current Assets
Cash and equivalents
$
23,844
$
20,619
Accounts receivable, net
61,550
38,491
Contract assets
11,772
9,189
Notes receivable – officers, employees, affiliates, current portion
1,162
1,260
Prepaid and other current assets
9,825
4,850
Total current assets
108,153
74,409
Non-Current Assets
Property and equipment, net
22,683
20,202
Goodwill
55,264
28,471
Notes receivable
903
903
Notes receivable – officers, employees, affiliates, less current portion
1,183
1,218
Other intangible assets, net
15,734
12,286
Other assets
809
681
Total Assets
$
204,729
$
138,170
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued liabilities
$
28,541
$
17,921
Contract liabilities
7,689
4,623
Notes payable, current portion
9,843
4,450
Deferred rent, current portion
729
724
Capital lease obligation, current portion
7,473
5,136
Total current liabilities
54,275
32,854
Non-Current Liabilities
Other non-current obligations
522
–
Notes payable, less current portion
15,807
8,407
Deferred rent, less current portion
3,851
4,179
Capital lease obligation, less current portion
10,021
10,020
Deferred tax liability, net
3,456
4,290
Common shares subject to repurchase
–
7
Total liabilities
$
87,932
$
59,757
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;
15,723,109 shares issued and 13,384,491 outstanding, and 13,690,868
shares issued and 11,489,579 outstanding, respectively
157
137
Additional paid-in-capital
156,966
120,842
Treasury stock, at cost; 2,338,618 and 2,201,289, respectively
(19,857
)
(17,488
)
Stock subscription notes receivable
(202
)
(277
)
Accumulated deficit
(20,267
)
(24,801
)
Total shareholders’ equity
$
116,797
$
78,413
TOTAL LIABILITIES AND EQUITY
$
204,729
$
138,170
BOWMAN CONSULTING GROUP LTD. AND AFFILIATES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
For the Nine Months Ended September 30,
2022
2021
Cash Flows from Operating Activities:
Net Income
$
4,534
$
899
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization – property, plant and equipment
6,366
4,283
Amortization of intangible assets
1,984
223
Gain on sale of assets
(44
)
(99
)
Bad debt
527
266
Stock based compensation
11,487
5,341
Deferred taxes
(833
)
(1,340
)
Deferred rent
(323
)
(6
)
Changes in operating assets and liabilities, net of acquisition of businesses
Accounts Receivable
(12,356
)
(10,015
)
Contract Assets
(104
)
(961
)
Prepaid expenses and other assets
(4,376
)
(1,462
)
Accounts payable and accrued expenses
5,122
6,132
Contract Liabilities
186
(31
)
Net cash provided by operating activities
12,170
3,230
Cash Flows from Investing Activities:
Purchases of property and equipment
(901
)
(609
)
Fixed assets converted to lease financing
196
–
Proceeds from sale of assets and disposal of leases
54
100
Amounts advanced under loans to shareholders
–
(473
)
Payments received under loans to shareholders
151
88
Acquisitions of businesses, net of cash acquired
(14,806
)
(3,000
)
Collections under stock subscription notes receivable
75
170
Net cash used in investing activities
(15,231
)
(3,724
)
Cash Flows from Financing Activities:
Proceeds from initial public offering, net of underwriting discounts and
commissions and other offering costs
–
47,104
Proceeds from common stock offering, net of underwriting discounts and
commissions and other offering costs
15,475
–
Net borrowings under revolving line of credit
–
(3,481
)
Repayments under fixed line of credit
(547
)
(540
)
Repayment under notes payable
(2,720
)
(735
)
Payments on capital leases
(4,575
)
(3,208
)
Payment of contingent consideration from acquisitions
–
(2
)
Payments for purchase of treasury stock
(2,368
)
(582
)
Proceeds from issuance of common stock
1,021
297
Net cash provided by financing activities
6,286
38,853
Net increase in cash and cash equivalents
3,225
38,359
Cash and cash equivalents, beginning of period
20,619
386
Cash and cash equivalents, end of period
$
23,844
$
38,745
BOWMAN CONSULTING GROUP LTD. AND AFFILIATES
COMBINED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
For the Nine Months Ended September 30,
2022
2021
Supplemental disclosures of cash flow information:
Cash paid for interest
$
1,131
$
647
Cash paid for income taxes
$
383
1,040
Non-cash investing and financing activities:
Property and equipment acquired under capital lease
$
(6,623
)
$
(5,704
)
Stock redemption for exercise of stock option
–
$
139
Issuance of notes payable for acquisitions
$
(16,059
)
$
(3,450
)
BOWMAN CONSULTING GROUP LTD.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
Condensed Combined Statement of Operations Reconciliation
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
2022
2021
2022
2021
Gross contract revenue
$
71,246
$
39,715
$
186,105
$
108,041
Contract costs (exclusive of depreciation and amortization)
33,984
19,498
90,439
53,840
Operating expense
35,043
19,925
91,125
52,735
Income from operations
2,219
292
4,541
1,466
Other (income) expense
595
314
2,086
706
Income tax expense (benefit)
(1,773
)
(379
)
(2,079
)
(139
)
Net income
$
3,397
$
357
$
4,534
$
899
Net margin
4.8
%
0.9
%
2.4
%
0.8
%
Other financial information 1
Net service billing
$
64,903
$
35,748
$
169,019
$
97,074
Adjusted EBITDA
9,624
4,426
24,606
12,697
Adjusted EBITA margin, net
14.8
%
12.4
%
14.6
%
13.1
%
Gross Revenue to Net Service Billing Reconciliation
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
2022
2021
2022
2021
Gross contract revenue
$
71,246
$
39,715
$
186,105
$
108,041
Less: sub-consultants and other direct expenses
6,343
3,967
17,086
10,967
Net services billing
$
64,903
$
35,748
$
169,019
$
97,074
Adjusted EBITDA Reconciliation
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
2022
2021
2022
2021
Net Income
$
3,397
$
357
$
4,534
$
899
+ interest expense
538
216
1,223
650
+ depreciation & amortization
3,138
1,598
8,350
4,506
+ tax expense
(1,773
)
(379
)
(2,079
)
(139
)
EBITDA
$
5,300
$
1,792
$
12,028
$
5,916
+ non-cash stock compensation
4,214
2,634
11,487
5,341
+ transaction related expenses
–
–
–
1,440
+ settlements and other non-core expenses
–
–
215
–
+ acquisition expenses
110
–
876
–
Adjusted EBITDA
$
9,624
$
4,426
$
24,606
$
12,697
Adjusted EBITDA margin, net
14.8
%
12.4
%
14.6
%
13.1
%
Contacts
Investor Relations
Bruce Labovitz
ir@bowman.com
(703) 787-3403
Megan McGrath
mmcgrath@finprofiles.com
(310) 622-8248