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Bowman Consulting Group Ltd Announces Q1 2023 Financial Results, Beats Estimates and Raises Guidance

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

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)

 

 

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

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

%

 

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