Bowman Consulting Group Ltd. (Nasdaq: BWMN) (“Bowman” or the
“Company”), a national engineering and infrastructure services firm
supporting owners and developers of the built environment, today
released financial results for the three months ended March 31,
2024.
“The first quarter delivered the revenue rebound we were
expecting,” said Gary Bowman, Chairman and CEO of Bowman. “Net
service billing increased consecutively each month during the
quarter in line with our expectations. Demand for engineering
services remains strong and we generated healthy new orders during
the quarter, especially in transportation which showed a meaningful
increase as a percentage of total backlog. With the bulk of our
organic growth anticipated to occur during the balance of 2024, we
are confident we have sufficient revenue in backlog and a
right-sized organizational infrastructure to deliver expanding
margins as we realize the increasing benefits of scale throughout
the year. We are pleased to increase our net service billing and
adjusted EBITDA guidance once again for 2024.”
“In early April we closed on an equity offering that included
approximately $51 million of gross proceeds to the company,”
continued Bowman. “Then, last week we closed on a new $100 million
revolving credit facility with Bank of America and TD Bank and
separately on an $11 million cash-out refinancing of recently
acquired Surdex aviation assets. As a result of these efforts, we
believe we are sufficiently capitalized to continue to grow and
execute on our current high-frequency acquisition strategy.”
Financial Highlights for the Three Months Ended March 31,
2024, Compared to March 31, 2023:
- Gross contract revenue of $94.9 million, compared to $76.1
million, a 25% increase
- Year-over-year organic gross contract revenue growth1 of
1%
- Net service billing2 of $85.7 million, compared to $67.6
million, a 27% increase
- Year-over-year organic net service billing growth of 3%
- Net loss of $1.6 million3, compared to net income of $0.5
million
- Adjusted EBITDA2 of $12.1 million, compared to $9.7 million, a
25% increase
- Adjusted EBITDA margin, net 2 of 14.2% compared to 14.3%, a 10
bps decrease
- Gross backlog2 of $330 million, compared to $252 million, a 31%
increase
Subsequent Events of Note:
- On April 1, 2024, the Company closed on a $51 million equity
offering
- On April 4, 2024, the Company closed on the acquisition of
Surdex Corporation
- On April 17, 2024, the Company closed on the acquisition of
Moore Consulting Engineers
- On May 2, 2024, the Company closed on a new $100 million
accordion-style syndicated revolving credit facility with Bank of
America, N.A. and TD Bank, N.A., replacing the Company’s $70
million facility with Bank of America
- On May 3, 2024, the Company closed on a new $11 million
cash-out refinancing of its Surdex aviation assets
Non-GAAP Adjusted Earnings per Share:
In connection with the release of financial results the Company
reported the non-GAAP financial metric of adjusted earnings per
share (“Adjusted EPS”) as follows:
For the three months ended March 31, 2024, compared to March 31,
2023:
- Basic Adjusted EPS was $0.22 compared to $0.28
- Diluted Adjusted EPS was $0.20 compared to $0.26
To calculate Adjusted EPS, the Company adds back non-reoccurring
expenses specific to acquisitions, non-cash stock compensation
expense associated with pre-IPO grants, and other expenses not in
the ordinary course of business. With respect to the elimination of
any non-cash stock compensation expense, the Company computes an
adjusted tax expense or benefit which accounts for the elimination
of any periodic windfall or shortfall tax effects resulting from
the difference between grant date fair value and vest date value.
With respect to all other eliminations, the Company applies its
average marginal statutory tax rate, currently 25.6%, to derive the
tax adjustment associated with the elimination of these expenses. A
reconciliation of non-GAAP Adjusted EPS to GAAP EPS, both basic and
diluted, is included with this press release for reference.
Updating FY 2024 Guidance
The Company is adjusting its full year 2024 outlook for net
service billing2 to be in the range of $382 to $397 million and
Adjusted EBITDA2 in the range of $63 to $69 million. The current
outlook for 2024 is based on completed acquisitions as of the date
of this release and does not include contributions from any future
acquisitions. Management discusses the Company’s acquisition
pipeline and its prospective impact during regularly scheduled
earnings calls.
Q1 2024 Earnings Webcast
Bowman will host an earnings webcast to discuss the results of
the quarter as follows:
Date:
May 7, 2024
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 To the extent applicable, includes
reclassification of acquisitions closed in same period of the prior
year to organic revenue in the prior period.
2 Non-GAAP financial metrics the Company
believes offer valuable perspective on results of operations. See
Non-GAAP tables below for reconciliations.
3 Includes an additional $1.3 million
accrual for penalties and interest (P&I) in connection with the
Company’s Section 174-related uncertain tax provision (UTP).
Accruals for P&I are subject to reversal prior to payment if
the Company elects to unwinds its UTP.
About Bowman Consulting Group Ltd.
Headquartered in Reston, Virginia, Bowman is a national
engineering services firm delivering infrastructure solutions to
customers who own, develop, and maintain the built environment.
With over 2,200 employees and more than 90 offices throughout the
United States, Bowman provides a variety of planning, engineering,
geospatial, construction management, commissioning, environmental
consulting, land procurement and other technical services to
customers operating in a diverse set of regulated end markets.
Bowman trades on the Nasdaq under the symbol BWMN. 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.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Amounts in thousands except
per share data)
March 31,
2024
December 31,
2023
(Unaudited)
ASSETS
Current
Assets
Cash and equivalents
$
11,673
$
20,687
Accounts receivable, net
95,975
87,565
Contract assets
36,673
33,520
Notes receivable - officers, employees,
affiliates, current portion
1,181
1,199
Prepaid and other current assets
17,365
11,806
Total current assets
162,867
154,777
Non-Current
Assets
Property and equipment, net
28,122
27,601
Operating lease, right-of-use assets
40,236
40,743
Goodwill
102,538
96,393
Notes receivable
903
903
Notes receivable - officers, employees,
affiliates, less current portion
1,116
1,119
Other intangible assets, net
45,525
46,294
Deferred tax asset, net
37,981
33,780
Other assets
1,250
1,175
Total Assets
$
420,538
$
402,785
LIABILITIES AND EQUITY
Current
Liabilities
Revolving credit facility
47,254
45,290
Accounts payable and accrued liabilities,
current portion
49,015
44,394
Contract liabilities
7,955
7,481
Notes payable, current portion
13,672
13,989
Operating lease obligation, less current
portion
9,567
9,016
Finance lease obligation, current
portion
7,271
6,586
Total current liabilities
134,734
126,756
Non-Current
Liabilities
Other non-current obligations
50,095
42,288
Notes payable, less current portion
12,177
13,738
Operating lease obligation, less current
portion
36,659
37,660
Finance lease obligation, less current
portion
14,987
14,408
Pension and post-retirement obligation,
less current portion
4,630
4,654
Total liabilities
$
253,282
$
239,504
Shareholders' Equity
Preferred Stock, $0.01 par value;
5,000,000 shares authorized, no shares issued and outstanding as of
March 31, 2024 and December 31, 2023
-
-
Common stock, $0.01 par value; 30,000,000
shares authorized as of March 31, 2024 and December 31, 2023;
18,191,818 shares issued and 15,428,519 outstanding, and 17,694,495
shares issued and 15,094,278 outstanding as of March 31, 2024 and
December 31, 2023, respectively
182
177
Additional paid-in-capital
226,681
215,420
Accumulated other comprehensive income
579
590
Treasury stock, at cost; 2,763,299 and
2,600,217, respectively
(32,142
)
(26,410
)
Stock subscription notes receivable
(66
)
(76
)
Accumulated deficit
(27,978
)
(26,420
)
Total shareholders' equity
$
167,256
$
163,281
TOTAL LIABILITIES AND EQUITY
$
420,538
$
402,785
BOWMAN CONSULTING GROUP
LTD.
CONDENSED CONSOLIDATED INCOME
STATEMENTS
(Amounts in thousands except
per share data)
(Unaudited)
For the Three Months
Ended March 31,
2024
2023
Gross Contract Revenue
$
94,907
$
76,100
Contract costs: (exclusive of depreciation
and amortization below)
Direct payroll costs
37,687
28,835
Sub-consultants and expenses
9,218
8,538
Total contract costs
46,905
37,373
Operating Expenses:
Selling, general and administrative
44,713
33,636
Depreciation and amortization
5,995
3,565
Gain on sale
(96
)
(11
)
Total operating expenses
50,612
37,190
(Loss) Income from operations
(2,610
)
1,537
Other expense
2,401
1,213
(Loss) Income before tax expense
(5,011
)
324
Income tax (benefit)
(3,453
)
(213
)
Net (loss) income
$
(1,558
)
$
537
Earnings allocated to non-vested
shares
–
69
Net (loss) income attributable to common
shareholders
$
(1,558
)
$
468
(Loss) Earnings per share
Basic
$
(0.11
)
$
0.04
Diluted
$
(0.11
)
$
0.04
Weighted average shares
outstanding:
Basic
13,827,728
11,800,308
Diluted
13,827,728
12,669,581
BOWMAN CONSULTING GROUP
LTD.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended
March 31,
2024
2023
Cash Flows from Operating
Activities:
Net (Loss) Income
$
(1,558
)
$
537
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization - property,
plant and equipment
2,656
2,196
Amortization of intangible assets
3,339
1,369
Gain on sale of assets
(96
)
(11
)
Credit losses
402
222
Stock based compensation
7,829
4,363
Accretion of discounts on notes
payable
117
140
Deferred taxes
(4,201
)
(3,669
)
Changes in operating assets and
liabilities
Accounts receivable
(7,946
)
(2,943
)
Contract assets
(2,151
)
(3,610
)
Prepaid expenses and other assets
(5,523
)
(533
)
Accounts payable and accrued expenses
10,614
7,748
Contract liabilities
(963
)
469
Net cash provided by operating
activities
2,519
6,278
Cash Flows from Investing
Activities:
Purchases of property and equipment
(262
)
(536
)
Fixed assets converted to lease
financing
424
-
Proceeds from sale of assets and disposal
of leases
96
11
Payments received under loans to
shareholders
20
105
Acquisitions of businesses, net of cash
acquired
(3,027
)
-
Collections under stock subscription notes
receivable
10
22
Net cash used in investing activities
(2,739
)
(398
)
Cash Flows from Financing
Activities:
Borrowings under revolving credit
facility
1,964
–
Repayments under fixed line of credit
(49
)
(185
)
Repayment under notes payable
(3,734
)
(2,685
)
Payments on finance leases
(1,716
)
(1,687
)
Payments for purchase of treasury
stock
(5,732
)
(667
)
Proceeds from issuance of common stock
473
390
Net cash used in financing activities
(8,794
)
(4,834
)
Net (decrease) increase in cash and cash
equivalents
(9,014
)
1,046
Cash and cash equivalents, beginning of
period
20,687
13,282
Cash and cash equivalents, end of
period
$
11,673
$
14,328
Supplemental disclosures of cash flow
information:
Cash paid for interest
$
1,962
$
757
Cash paid for income taxes
$
11
$
-
Non-cash investing and financing
activities
Property and equipment acquired under
finance lease
$
(3,002
)
$
(2,964
)
Note payable converted to common
shares
$
(672
)
$
-
Issuance of notes payable for
acquisitions
$
(2,461
)
$
-
BOWMAN CONSULTING GROUP
LTD.
RECONCILIATION OF EPS TO
ADJUSTED EPS
(Amounts in thousands except
per share data)
For the Three Months Ended
March 31,
2024
2023
Net (loss) income (GAAP)
$
(1,558
)
$
537
+ tax (benefit) (GAAP)
(3,453
)
(213
)
(Loss) Income before tax expense
(GAAP)
$
(5,011
)
$
324
+ acquisition related expenses
1,350
849
+ amortization of intangibles
3,339
1,369
+ non-cash stock comp related to
pre-IPO
1,557
1,722
+ other non-core expenses
399
–
Adjusted income before tax
expense
$
1,634
$
4,264
Adjusted income tax (benefit) expense
(1,660
)
496
Adjusted net income
$
3,294
$
3,768
Adjusted earnings allocated to non-vested
shares
310
488
Adjusted net income attributable to common
shareholders
$
2,984
$
3,280
(Loss) Earnings per share
(GAAP)
Basic
$
(0.11
)
$
0.04
Diluted
$
(0.11
)
$
0.04
Adjusted earnings per share
(Non-GAAP)
Basic
$
0.22
$
0.28
Diluted
$
0.20
$
0.26
Weighted average shares
outstanding
Basic
13,827,728
11,800,308
Diluted
14,561,032
12,669,581
Basic Adjusted Earnings Per Share
Summary - Non-GAAP
For the Three Months Ended
March 31,
2024
2023
(Loss) Earnings per share
(GAAP)
$
(0.11
)
$
0.04
Pre-tax basic per share adjustments
$
0.23
$
0.32
Adjusted earnings per share before tax
expense
$
0.12
$
0.36
Tax (benefit) expense per share
adjustment
$
(0.12
)
$
0.04
Adjusted earnings per share - adjusted
net income
$
0.24
$
0.32
Adjusted earnings per share allocated to
non-vested shares
$
0.02
$
0.04
Adjusted earnings per share
attributable to common shareholders
$
0.22
$
0.28
Diluted Adjusted Earnings Per Share
Summary - Non-GAAP
For the Three Months Ended
March 31,
2024
2023
(Loss) Earnings per share
(GAAP)
$
(0.11
)
$
0.04
Pre-tax diluted per share adjustments
$
0.22
$
0.30
Adjusted earnings per share before tax
expense
$
0.11
$
0.34
Tax (benefit) expense per share
adjustment
$
(0.11
)
$
0.03
Adjusted earnings per share - adjusted
net income
$
0.22
$
0.31
Adjusted earnings per share allocated to
non-vested shares
$
0.02
$
0.05
Adjusted earnings per share
attributable to common shareholders
$
0.20
$
0.26
BOWMAN CONSULTING GROUP
LTD.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(Amounts in thousands except
per share data)
Combined Statement of Operations
Reconciliation
For the Three Months Ended
March 31,
2024
2023
Gross contract revenue
$
94,907
$
76,100
Contract costs (exclusive of depreciation
and amortization)
46,905
37,373
Operating expense
50,612
37,190
(Loss) Income from operations
(2,610
)
1,537
Other expense
2,401
1,213
Income tax (benefit)
(3,453
)
(213
)
Net (loss) income
$
(1,558
)
$
537
Net margin
(1.6
)%
0.7
%
Other financial information 1
Net service billing
$
85,689
$
67,562
Adjusted EBITDA
12,128
9,673
Adjusted EBITDA margin, net
14.2
%
14.3
%
Gross Contract Revenue to Net Service
Billing Reconciliation
For the Three Months Ended
March 31,
2024
2023
Gross contract revenue
$
94,907
$
76,100
Less: sub-consultants and other direct
expenses
9,218
8,538
Net service billing
$
85,689
$
67,562
Adjusted EBITDA Reconciliation
For the Three Months Ended
March 31,
2024
2023
Net Service Billing
$
85,689
$
67,562
Net (loss) income
$
(1,558
)
$
537
+ interest expense
2,131
896
+ depreciation & amortization
5,995
3,565
+ tax (benefit)
(3,453
)
(213
)
EBITDA
$
3,115
$
4,785
+ non-cash stock compensation
7,861
4,434
+ settlements and other non-core
expenses
399
–
+ acquisition expenses
753
454
Adjusted EBITDA
$
12,128
$
9,673
Adjusted EBITDA margin, net
14.2
%
14.3
%
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
2024
%
2023
%
Change
% Change
Building Infrastructure
52,785
55.6
%
44,337
58.3
%
8,448
19.1
%
Transportation
18,128
19.1
%
16,019
21.0
%
2,109
13.2
%
Power and Utilities
18,467
19.5
%
13,324
17.5
%
5,143
38.6
%
Other Emerging Markets1
5,527
5.8
%
2,420
3.2
%
3,107
128.4
%
Total
94,907
100.0
%
76,100
100.0
%
18,807
24.7
%
(dollars in thousands)
For the Three Months Ended
March 31,
Organic v Acquired Revenue
2024
%
2023
%
Change
% Change
Organic
76,433
80.5
%
76,100
100.0
%
333
0.4
%
Acquired2
18,474
19.5
%
–
–
%
18,474
n/a
Total
94,907
100.0
%
76,100
100.0
%
18,807
24.7
%
1 Represents environmental, mining, water
resources and other.
2 After four quarters post-closing,
acquired revenue is reclassified as organic; this results in a
change from previously reported numbers.
BOWMAN CONSULTING GROUP
LTD.
GROSS BACKLOG BY CATEGORY AT
MARCH 31, 2024
(Unaudited)
Category
Percentage
Building Infrastructure
51
%
Transportation
28
%
Power and Utilities
17
%
Emerging Markets
4
%
TOTAL
100
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240506684225/en/
Investor Relations: Bruce Labovitz ir@bowman.com (703)
464-1029
Betsy Patterson ir@bowman.com (310) 622-8227
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