BWMN - Bowman Announces Record Third Quarter Results; Exceeds Consensus Estimates and Raises Guidance

November, 10 2022 04:19 PM Bowman Consulting Group Ltd.

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 billing ¹ 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 EBITDA ¹ 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 backlog ¹ 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 billing ¹ 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 EBITDA ¹ 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:

http://investors.bowman.com

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
%

BOWMAN CONSULTING GROUP LTD. GROSS CONTRACT REVENUE COMPOSITION


















For the Three Months Ended September 30,






Consolidated Gross Contract Revenue

2022

%GCR

2021

%GCR

Change

% Change


Building Infrastructure

$
44,765

62.8
%

$
28,303

71.3
%

$
16,462

58.2
%


Transportation


13,218

18.6
%


4,033

10.2
%


9,185

227.7
%


Power & Utilities


8,809

12.4
%


6,295

15.9
%


2,514

39.9
%


Other emerging markets ¹


4,454

6.2
%


1,084

2.6
%


3,370

310.8
%


Total:

$
71,246

100.0
%

$
39,715

100.0
%

$
31,531

79.4
%

















Organic

$
47,827

67.1
%

$
38,853

97.8
%

$
8,974

23.1
%


Acquired ²


23,419

32.9
%


862

2.2
%


22,557

n/a



Total:

$
71,246

100.0
%

$
39,715

100.0
%

$
31,531

79.4
%

Represents renewable energy, mining, water resources and other.

After four quarters post-closing, acquired revenue is reclassified as organic; this results in a change from previously reported numbers.



For the Nine Months Ended September 30,




Consolidated Gross Contract Revenue

2022

%GCR


2021

%GCR

Change

% Change
Building Infrastructure

$
126,093

67.8
%

$
74,511

69.0
%

$
51,582

69.2
%
Transportation


26,464

14.2
%


12,344

11.4
%


14,120

114.4
%
Power & Utilities


24,370

13.1
%


17,524

16.2
%


6,846

39.1
%
Other emerging markets ¹


9,178

4.9
%


3,662

3.4
%


5,516

150.6
%
Total:

$
186,105

100.0
%

$
108,041

100.0
%

$
78,064

72.3
%













Organic and Acquired Gross Contract Revenue

2022

%GCR

2021

%GCR

Change

% Change
Organic

$
137,086

73.7
%

$
107,179

99.2
%

$
29,907

27.9
%
Acquired ²


49,019

26.3
%


862

0.8
%


48,157

n/a

Total:

$
186,105

100.0
%

$
108,041

100.0
%

$
78,064

72.3
%

Represents renewable energy, mining, water resources and other.

After four quarters post-closing, acquired revenue is reclassified as organic; this results in a change from previously reported numbers.

BOWMAN CONSULTING GROUP LTD. BACKLOG AT SEPTEMBER 30, 2022 (Unaudited)



*(Amounts in thousands)*

Gross Backlog
Building Infrastructure


116,531
Transportation


76,228
Power & Utilities


30,216
Other Emerging Markets


7,388


$
230,363

View source version on businesswire.com: https://www.businesswire.com/news/home/20221110005937/en/

Investor Relations

Bruce Labovitz
ir@bowman.com
(703) 787-3403

Megan McGrath
mmcgrath@finprofiles.com
(310) 622-8248

Company Name:	Bowman Consulting Group Ltd.
Stock Symbol:	BWMN
Market:	NASDAQ
Website:	bowman.com

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