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Press release content from Globe Newswire. The AP news staff was not involved in its creation.

NV5 Announces Strong Fourth Quarter and Full Year 2019 Results

February 26, 2020 GMT

HOLLYWOOD, Fla., Feb. 26, 2020 (GLOBE NEWSWIRE) -- NV5 Global, Inc. (Nasdaq: NVEE) (“NV5” or the “Company”), a provider of professional and technical engineering and consulting solutions, today reported financial results for the fourth quarter and year ended December 28, 2019.

“2019 was another strong year for NV5 delivering annual gross revenue and Adjusted EBITDA growth. We are pleased with the performance and integration of the nine acquisitions completed in 2019, including the Quantum Spatial (“QSI”) acquisition that was made in late December. We are particularly excited about Quantum Spatial’s performance and the growth prospects of our geospatial solutions business,” said Dickerson Wright, PE, Chairman and CEO of NV5. “We are pleased that the delayed large liquefied natural gas project contract and our North Carolina Department of Transportation projects that impacted our financial performance in the second half of 2019 are moving forward this month. Additionally, the issues related to initial set-up of project contracts in our project management system and adequate documentation to support the analysis of certain percentage of completion projects, have been addressed and remediated as of December 28, 2019. We expect that the performance of our core business will continue to be strong in 2020, and we are well-positioned for another successful year.”

Fourth Quarter 2019 Financial Highlights

-- Total Revenues for the fourth quarter of 2019 were $133.8 million from $116.1 million in the fourth quarter of 2018. Gross Revenues - GAAP for the fourth quarter of 2019 were $132.6 million from $115.3 million in the fourth quarter of 2018. QSI had revenues in the month of December 2019 of $13.3 million. The acquisition closed on December 20, 2019, which was later in the month than originally anticipated and coincided with the holiday week. As a result, during the period that we owned QSI in 2019, gross revenues were $1.4 million. -- Net Revenues for the quarter were $104.3 million from $88.5 million in the fourth quarter of 2018. -- Adjusted EBITDA for the fourth quarter 2019, excluding stock compensation and acquisition-related costs, was $17.9 million, an increase from $16.4 million in the fourth quarter of 2018, after excluding a $1.5 million reversal of 401K accruals in the fourth quarter of 2018. -- Net income for the fourth quarter of 2019 was $3.6 million from $7.7 million in the fourth quarter of 2018. -- GAAP EPS was $0.28 per share in the fourth quarter of 2019 from $0.62 per share in the fourth quarter of 2018. -- Adjusted EPS in the fourth quarter of 2019 was $0.64 per share from $0.91 in the fourth quarter of 2018. Excluding non-recurring income tax adjustments in the fourth quarter of 2019, Adjusted EPS was $0.69. -- Cash flows from operating activities increased to $18.3 million for 2019 from $17.4 million in 2018.

Full Year 2019 Financial Highlights

-- Total Revenues for 2019 were $512.9 million from $422.1 million in 2018. Gross Revenues - GAAP for 2019 were $508.9 million from $418.1 million in 2018. -- Net Revenues for 2019 were $398.4 million from $334.3 million in 2018. -- Adjusted EBITDA in 2019 was $68.6 million from $59.8 million in 2018. -- Net income for the year was $23.8 million from $26.9 million in 2018. -- GAAP EPS in 2019 was $1.90 per share (based on 12,513,034 diluted shares outstanding) from $2.33 per share (based on 11,506,466 diluted shares outstanding) in 2018. -- Adjusted EPS for 2019 was $3.19 per share (based on 12,513,034 diluted shares outstanding) from $3.24 in 2018 (based on 11,506,466 diluted shares outstanding). -- Cash flows from operating activities increased to $39.9 million for 2019 from $35.0 million in 2018.

2020 Outlook

As previously communicated by the Company on January 7, 2020, the Company expects Gross Revenues to range from $700 million to $730 million and full year 2020 Adjusted EPS to range from $4.38 per share to $4.90 per share, an increase of 37% to 54% over 2019 Adjusted EPS of $3.19 per share.

Use of Non-GAAP Financial Measures

Total Revenues and Net Revenues are not measures of financial performance under U.S. generally accepted accounting principles (“GAAP”). Gross Revenues - GAAP include sub-consultant costs and other direct costs, which are generally pass-through costs. Furthermore, Gross Revenues - GAAP eliminates intercompany revenues where the Company performed the service in lieu of utilizing third-party sub-consultants. The Company believes that Total Revenues and Net Revenues, which are non-GAAP financial measures commonly used in our industry, provide a meaningful perspective on our business results. A reconciliation of Gross Revenues as reported in accordance with GAAP to Total Revenues and Net Revenues is provided at the end of this news release.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is not a measure of financial performance under GAAP. Adjusted EBITDA reflects adjustments to EBITDA to eliminate stock-based compensation expense and acquisition-related costs. Management believes Adjusted EBITDA, in addition to operating profit, Net Income and other GAAP measures, is a useful indicator of our financial and operating performance and our ability to generate cash flows from operations that are available for taxes, capital expenditures and debt service. A reconciliation of Net Income, as reported in accordance with GAAP, to Adjusted EBITDA is provided at the end of this news release.

Adjusted earnings per diluted share (“Adjusted EPS”) is not a measure of financial performance under GAAP. Adjusted EPS reflects adjustments to reported diluted earnings per share (“GAAP EPS”) to eliminate amortization expense of intangible assets from acquisitions, net of tax benefits. As we continue our acquisition strategy, the growth in Adjusted EPS will likely increase at a greater rate than GAAP EPS. A reconciliation of GAAP EPS to Adjusted EPS is provided at the end of this news release.

Our definition of Total Revenues, Net Revenues, Adjusted EBITDA and Adjusted EPS may differ from other companies reporting similarly named measures. These measures should be considered in addition to, and not as a substitute for, or superior to, other measures of financial performance prepared in accordance with GAAP, such as Gross Revenues, Net Income and Diluted Earnings per Share.

Conference Call

NV5 will host a conference call to discuss its fourth quarter 2019 financial results at 4:30 p.m. (Eastern Time) on February 26, 2020. The accompanying presentation for the call is available by visiting http://ir.nv5.com.

Date: Wednesday, February 26, 2020 Time: 4:30 p.m. Eastern Toll-free dial-in number: +1 844-348-6875 International dial-in number: +1 509-844-0152 Conference ID: 9378304 Webcast: http://ir.nv5.com

Please dial-in at least 5-10 minutes prior to the start time in order for the operator to log your name and connect you to the conference.

The conference call will be webcast live and available for replay via the “Investors” section of the NV5 website.

About NV5

NV5 Global, Inc. (NASDAQ: NVEE) is a provider of professional and technical engineering and consulting solutions ranked #34 on the Engineering News-Record’s Top 500 Design Firms list. NV5 serves public and private sector clients in the infrastructure, energy, construction, real estate and environmental markets. NV5 primarily focuses on six business verticals: construction quality assurance, infrastructure engineering and support services, energy, program management, environmental solutions, and geospatial solutions. The Company operates out of more than 115 locations worldwide. For additional information, please visit the Company’s website at www.NV5.com. Also visit the Company on Twitter, LinkedIn, Facebook, and Vimeo.

Forward-Looking Statements

This news release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. 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 and on the conference call. 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. All forward-looking statements are based on information available to the Company on the date hereof, and the Company assumes no obligation to update such statements, except as required by law.

Investor Relations Contact

NV5 Global, Inc.Jack CochranVice President, Marketing & Investor RelationsTel: +1-954-637-8048Email: ir@nv5.com

Source: NV5 Global, Inc.

NV5 GLOBAL, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(in thousands, except share data)(Unaudited)

December 28, 2019 December 29, 2018 ----------------- ----------------- Assets Current assets: Cash and cash equivalents $ 31,825 $ 40,739 Billed receivables, net 131,041 98,324 Unbilled receivables, net 79,428 43,411 Prepaid expenses and other current assets 8,907 2,582 --------- ------- --------- ------- Total current assets 251,200 185,056 Property and equipment, net 25,733 11,677 Right-of-use lease assets, net 46,313 — Intangible assets, net 255,961 99,756 Goodwill 309,216 140,930 Other assets 4,714 2,002 --------- ------- --------- ------- Total Assets $ 893,137 $ 439,421 - ------- ------- - ------- ------- Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 36,116 $ 22,588 Accrued liabilities 47,434 20,853 Income taxes payable — 2,697 Billings in excess of costs and estimated earnings on uncompleted 3,303 7,625 contracts Client deposits 221 208 Current portion of contingent consideration 1,954 1,845 Current portion of notes payable and other obligations 25,332 17,139 --------- ------- --------- ------- Total current liabilities 114,359 72,955 Contingent consideration, less current portion 2,048 2,853 Long-term lease liabilities 34,573 — Notes payable and other obligations, less current portion 332,854 29,847 Deferred income tax liabilities, net 53,341 16,224 --------- ------- --------- ------- Total liabilities 537,175 121,879 --------- ------- --------- ------- Commitments and contingencies Stockholders’ equity: Preferred stock, $0.01 par value; 5,000,000 shares authorized, no shares — — issued and outstanding Common stock, $0.01 par value; 45,000,000 shares authorized, 12,852,357 and 12,550,711 shares issued and outstanding as of December 28, 2019 and 129 126 December 29, 2018, respectively Additional paid-in capital 251,187 236,525 Retained earnings 104,647 80,891 --------- ------- --------- ------- Total stockholders’ equity 355,962 317,542 --------- ------- --------- ------- Total liabilities and stockholders’ equity $ 893,137 $ 439,421 - ------- ------- - ------- -------

NV5 GLOBAL, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME(in thousands, except share data)(Unaudited)

Three Months Ended Fiscal Years Ended December December December December 28, 29, 28, 29, 2019 2018 2019 2018 ----------- ----------- ----------- ----------- Gross revenues $ 132,598 $ 115,344 $ 508,938 $ 418,081 Direct costs (excluding depreciation and amortization): Salaries and wages 39,261 34,380 153,023 132,922 Sub-consultant services 22,629 18,869 79,598 62,218 Other direct costs 5,690 7,998 30,934 21,537 --------- - --------- - --------- - --------- - Total direct costs 67,581 61,247 263,556 216,677 --------- - --------- - --------- - --------- - Gross Profit 65,017 54,097 245,382 201,404 --------- - --------- - --------- - --------- - Operating Expenses: Salaries and wages, payroll taxes and benefits 35,126 26,099 128,558 102,221 General and administrative 11,871 8,365 42,658 31,713 Facilities and facilities related 4,737 3,849 17,145 14,401 Depreciation and amortization 6,908 5,724 25,816 17,384 --------- - --------- - --------- - --------- - Total operating expenses 58,643 44,037 214,176 165,719 --------- - --------- - --------- - --------- - Income from operations 6,374 10,060 31,207 35,685 --------- - --------- - --------- - --------- - Interest expense (1,045 ) (254 ) (2,275 ) (1,966 ) --------- - --------- - --------- - --------- - Income before income tax expense 5,329 9,806 28,932 33,719 Income tax expense (1,754 ) (2,147 ) (5,176 ) (6,863 ) --------- - --------- - --------- - --------- - Net Income and Comprehensive Income $ 3,575 $ 7,659 $ 23,756 $ 26,856 - ------- - - ------- - - ------- - - ------- - Earnings per share: Basic $ 0.29 $ 0.64 $ 1.96 $ 2.44 Diluted $ 0.28 $ 0.62 $ 1.90 $ 2.33 Weighted average common shares outstanding: Basic 12,204,650 11,916,546 12,116,185 10,991,124 Diluted 12,589,800 12,418,788 12,513,034 11,506,466

NV5 GLOBAL, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)(Unaudited)

Fiscal Years Ended December December 28, 29, 2019 2018 ---------- ---------- Cash Flows From Operating Activities: Net income $ 23,756 $ 26,856 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 25,816 17,384 Non-cash lease expense 9,410 — Provision for doubtful accounts 1,239 797 Stock based compensation 10,430 6,697 Change in fair value of contingent consideration (216 ) 424 Loss on disposals of property and equipment 21 26 Deferred income taxes (6,634 ) (3,585 ) Amortization of debt issuance costs 131 — Changes in operating assets and liabilities, net of impact of acquisitions: Billed receivables 5,140 (8,662 ) Unbilled receivables (11,807 ) (2,813 ) Prepaid expenses and other assets (3,599 ) (109 ) Accounts payable 534 398 Accrued liabilities (7,315 ) (2,984 ) Income taxes payable (2,697 ) (3,405 ) Billings in excess of costs and estimated earnings on uncompleted contracts (4,322 ) 3,964 Deposits 13 11 -------- - -------- - Net cash provided by operating activities 39,900 34,999 -------- - -------- - Cash Flows From Investing Activities: Cash paid for acquisitions (net of cash received from acquisitions) (348,375 ) (58,155 ) Purchase of property and equipment (2,625 ) (2,203 ) -------- - -------- - Net cash used in investing activities (351,000 ) (60,358 ) -------- - -------- - Cash Flows From Financing Activities: Proceeds from common stock offering — 100,330 Proceeds from borrowings from Senior Credit Facility 330,457 — Payments of borrowings from Senior Credit Facility (10,000 ) (36,500 ) Payments on notes payable (13,393 ) (9,741 ) Payments of contingent consideration (1,202 ) (728 ) Payments of common stock offering costs — (6,861 ) Proceeds from exercise of warrant — 1,093 Payments of debt issuance costs (3,676 ) (246 ) -------- - -------- - Net cash provided by financing activities 302,186 47,347 -------- - -------- - Net increase (decrease) in Cash and Cash Equivalents (8,914 ) 21,988 Cash and cash equivalents – beginning of period 40,739 18,751 -------- - -------- - Cash and cash equivalents – end of period $ 31,825 $ 40,739 - ------ - - ------ -

NV5 GLOBAL, INC. AND SUBSIDIARIESRECONCILIATION OF GROSS REVENUES TO TOTAL REVENUES(in thousands)(Unaudited)

Three Months Ended Fiscal Years Ended December 28, December 29, December 28, December 29, 2019 2018 2019 2018 ------------ ------------ ------------ ------------ Gross Revenues - GAAP $ 132,598 $ 115,344 $ 508,938 $ 418,081 Add: Intercompany revenues in lieu of sub-consultants 1,219 793 3,939 4,011 --------- -- --------- -- --------- -- --------- -- Total Revenues $ 133,817 $ 116,137 $ 512,877 $ 422,092 - ------- -- - ------- -- - ------- -- - ------- --

NV5 GLOBAL, INC. AND SUBSIDIARIESRECONCILIATION OF GROSS REVENUES TO NET REVENUES(in thousands) (Unaudited)

Three Months Ended Fiscal Years Ended December December December December 28, 29, 28, 29, 2019 2018 2019 2018 ----------- ----------- ----------- ----------- Gross Revenues - GAAP $ 132,598 $ 115,344 $ 508,938 $ 418,081 Less: Sub-consultant services (22,629 ) (18,869 ) (79,598 ) (62,218 ) Other direct costs (5,690 ) (7,998 ) (30,934 ) (21,537 ) --------- - --------- - --------- - --------- - Net Revenues $ 104,279 $ 88,477 $ 398,406 $ 334,326 - ------- - - ------- - - ------- - - ------- -

NV5 GLOBAL, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA(in thousands)(Unaudited)

Three Months Ended Fiscal Years Ended December 28, December 29, December 28, December 29, 2019 2018 2019 2018 ------------ ------------ ------------ ------------ Net Income $ 3,575 $ 7,659 $ 23,756 $ 26,856 Add: Interest expense 1,045 254 2,275 1,966 Income tax expense 1,754 2,147 5,176 6,863 Depreciation and Amortization 6,908 5,724 25,816 17,384 Acquisition related costs* 1,148 — 1,148 — Share-based compensation 3,441 2,156 10,430 6,697 -------- --- -------- --- -------- --- -------- --- Adjusted EBITDA $ 17,871 $ 17,940 $ 68,601 $ 59,766 - ------ --- - ------ --- - ------ --- - ------ ---

* Acquisition related costs were added back beginning in the fourth quarter of 2019.

NV5 GLOBAL, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP EPS TO ADJUSTED EPS(Unaudited)

Three Months Ended Fiscal Years Ended December December December December 28, 29, 28, 29, 2019 2018 2019 2018 -------- -------- -------- -------- Net Income - per diluted share $ 0.28 $ 0.62 $ 1.90 $ 2.33 Per diluted share adjustments: Add: Amortization expense of intangible assets 0.41 0.36 1.64 1.14 Acquisition-related costs 0.09 — 0.09 — Income tax expense (0.14 ) (0.07 ) (0.44 ) (0.23 ) ------ - ------ - ------ - ------ - Adjusted EPS $ 0.64 $ 0.91 $ 3.19 $ 3.24 - ---- - - ---- - - ---- - - ---- -