x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2023
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO |
Delaware | 54-1762351 | ||||
(State or other jurisdiction of
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12355 Sunrise Valley Drive, Suite 520 Reston, Virginia | 20191 | ||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |||||||||||||
Common Stock, $0.01 par value | BWMN | The Nasdaq Global Market |
Large accelerated filer | o | Accelerated filer |
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Non-accelerated filer | o | Smaller reporting company |
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Emerging growth company | x |
Auditor Firm Id: | 00042 | Auditor Name: | Ernst & Young LLP | Auditor Location: | Tysons, VA |
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•our ability to retain the continued service of our key professionals and to identify, hire, retain and utilize additional qualified personnel; |
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•changes in demand from the customers that we serve; |
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•any material outbreak or material escalation of international hostilities, including developments in the conflict involving Russia and the Ukraine, or the Middle East and the economic consequences of related events such as the imposition of economic sanctions and resulting market volatility; |
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•changes in general domestic and international economic conditions such as inflation rates, interest rates, tax rates, higher labor and healthcare costs, recessions, and changing government policies, laws and regulations; |
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•our ability to obtain financing to fund our growth strategy and working capital requirements at commercially reasonable rates or at all; |
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•the U.S. government and other governmental and quasi-governmental budgetary and funding approval process; |
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•our ability to execute our acquisitions strategy, including successful completion of acquisitions and the integration of new acquisitions into our operations and financial reporting; |
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•the possibility that our contracts may be terminated by our customers; |
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•our ability to win new contracts and renew existing contracts on commercially reasonable terms or at all; |
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•competitive pressures and trends in our industry and our ability to successfully compete with our competitors; |
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•our dependence on a limited number of customers; |
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•our ability to complete projects timely, in accordance with our customers’ expectations, or profitably; |
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•our ability to successfully manage our growth strategy; |
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•our ability to raise capital in the future on commercially reasonable terms or at all; |
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•the credit and collection risks associated with our customers; |
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•our ability to comply with procurement laws and regulations; |
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•changes in laws, regulations, or policies that directly or indirectly impact our business and operations; |
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•weather conditions and seasonal revenue fluctuations that may adversely impact our financial results; |
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•the enactment of legislation that could limit the ability of local, state and federal agencies to contract for our privatized services; |
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•our ability to complete our backlog of uncompleted projects as currently projected; |
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•the risk of employee misconduct or our failure to comply with laws and regulations; |
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•our ability to control, and operational issues pertaining to, business activities that we conduct with business partners and other third parties; |
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States and two offices in Mexico. As of December 31, 2023, we have approximately 11,500 active projects and more than 4,750 customers with active projects.
others. During each of the years ended December 31, 2023 and 2022, approximately 21% of our revenue was derived from public sector assignments.
While our business is not subject to significant regulation, the services we provide to our customers address various federal, state and local regulations that must be complied with to receive approval to proceed. In connection with the process of bidding for and being awarded certain government assignments we are required to provide an annual Federal Acquisition Regulation rate audit that determines our overhead reimbursement allowance. With respect to the operationdesigns, plans and customer service has enabled us to create durable, long-term customer relationships. We focus many of our business we are subject to professional licensing requirementspursuits in end markets where laws and regulations create a level of complexity that vary by state.
Each state establishes licensing and organizational requirements for our services. Certain states allow only individuals and individually owned professional services corporations to hold licenses. In those states, there may be grandfathering exemptions that allow corporations to hold licenses. Inplaces a premium on the event a state does not allow a corporation to hold a license, we have in the past formed professional services corporations owned by Mr. Bowman and other employees to facilitate our ability to work in such states. In connection with our initial public offering we purchased a qualified North Carolina corporation (see Certain Relationships and Related Party Transactions and Consolidating Transactions in Connection with our Initial Public Offering). To the extent we cannot adequately satisfy a state’s licensing requirements, we do not operate in that state. As of December 31, 2021, we were licensed to operate in 45 states.
During our 25 years in the engineering and consulting business, we have worked with such clients and on such well-known projects as (in alphabetical order):
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The time between contract assignment, notice to proceed and completion varies by customer and assignment. As we secure assignments we accrete our backlog of unbilled revenue and as we execute on assignments, we deplete our backlog of unbilled revenue. New and continuing assignments from existing customers, business development efforts and acquisitions fuel the growthvalue of our backlog. Asservices, thereby providing us openings to develop new customer loyalty through creative problem solving. Our base of December 31, 2021, we had approximately $167 million of gross backlog representing a trailing 13 months of a gross revenuerepeat customers and a 47.8% compound annual growth rate frommulti-year contracts reduce our backlog of $113 million as of December 31, 2020. As of December 31, 2021, we had approximately $145 million of net backlog representing 86.5% of our gross backlog. Net backlog is our gross backlog exclusive of subconsultant costscustomer acquisition expenses and other direct expenses.
We are deliberate about managing risk and therefore limit our exposure by providing professional and related services exclusively. We do not engage in general contracting activities either directly, or through joint ventures, and therefore have no related exposure. We are not a partner in any design-build construction projects, and we carry no equipment inventory. Our risk of contract loss is generally limitedprovide increased visibility into future revenues, allowing us to the cost of internal labor cost associated with fixed fee, professional services assignments.
We have substantial experience with acquisitions. Over the past ten years, we have successfully completed 25 acquisitions of engineering and consulting services companies. Through these acquisitions, we have established new geographic footprints, added service lines, increased our depth of leadership, expanded our end markets, and enhanced our portfolio of experience. Our industry is highly fragmented presenting opportunity to build scale through consolidation. We are continuously active in the market for acquisitions maintaining a healthy pipeline of opportunities. Our acquisition strategy is to identify targets that align with our culture and permit rapid integration rendering the acquired entity’s operations fully consolidated into ours within one year.
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Competitive Strengths
We arean agile,growth-orientedengineering servicesfirmcommitted toprovidingessential technicalandprofessional servicestoa broadbaseoflong-termandrepeatcustomers.Therecurringneedsofourcustomersfortechnicalservicestomonetizeandoperatetheirassetsmakesusessentialtotheir ongoingoperations.Ourcommitmenttoqualityand reliabilitywithrespecttodesigns,plansandcustomer servicehasenabledustocreatedurable,long-term customerrelationships.Weserveover 2,500customerswithmorethan65% havingengagedwithusformultiple assignmentsoverthepastthreeyears. Wedeliberatelyfocusmanyofourbusinesspursuitsinenvironmentswherelawsandregulationscreatealevelofcomplexitythatplacesapremiumonthevalueofourservices,therebyprovidingusopeningstodevelopnewcustomerloyaltythroughcreativeproblemsolving.Ourbaseofrepeatcustomersandmulti-yearcontractsreduceourcustomeracquisitionexpensesandprovideincreasedvisibilityintofuturerevenues,allowingustomake investments confidently to expand and take market share from competitors.We believeour we have the following competitive strengths include:
Nationalstrengths:
Resilient, low-risk
Dedicated founder, experienced leadership team, valuable technical workforce, and entrepreneurial culture. Gary Bowman has led our Company since its founding in 1995. In his position as President, Chairman and Chief Executive Officer, Mr. Bowman sets theCompany’sour vision, guides the establishment of itsour strategic objective,objectives, and leads itsour executive team. Mr. Bowman’s institutional knowledge, connection with ourcustomers, and engagement with our staff is rooted in over 40 years of experience in our industry. As our largest individual stockholder, Mr. Bowman iscontinues to be committed to actively leading the Company and maintaining a substantial ownership positionposition.
Ourseniorexecutiveteamishighlyexperienced,withanaveragetenureofover35yearsintheirrespectiveareasofresponsibility.Theteamour employees hasaproven recordof accomplishmentwith respect enabled us to drivingorganic growth,executing,attract andintegratingacquisitions, implementinginternal controls, retain exceptional talent. We have built an organization uniformly aligned in its mission, values, purpose, andmanagingregulatorycompliance.Themembersofourboardofdirectorsareallhighlyaccomplishedseniorexecutiveswithextensiveprivateandpublicbusiness experience.
goals. Wehaveahighlytechnicalworkforceofover1,000employees,asofDecember 31,2021,ofwhichmorethan23%holdcertificationsbyvarious industryandregulatorybodies.Ourdedicationtogrowthofopportunityforouremployeeshasenabledustoattractandretainexceptionaltalent.Weembody a set ofcultural values that promoteentrepreneurship, personal growth, andresponsibility. responsible freedom. We are committedto advancing diversity andinclusioninourworkforce.Wehavebuiltanorganizationuniformlyalignedinitsmission,values,purpose,andgoals.
Provenabilitytogrowbothorganicallyandthroughacquisition.Overthepasttenyears,ourannualrevenueshavegrownroughlyfour-foldtoapproximately $150 million forthe yearended December31,2021.Wehave acceleratedour growthby identifyingandclosing acquisitionsofcompanieswithworkforcesthatalignwithourculture.Fundamentaltooursuccessfulrecordofgrowthhasbeenourleadershipteam’sabilitytoidentify, executeandintegrate strategicacquisitionswherebywe expandintonew geographies,addnewcapabilities togenerateorganic growthandextend ourindustry-leading platform.Ouracquisition integrationapproach rapidlyfacilitatescross-cultivation ofexperiences, employeecollaborationand cross selling ofservices. Historically, withina year’s time,acquired companies becomefully integrated within ouroverall operations.
workforce.
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electricity, and other vital services;critical utilities; 3) manage the roads, bridges, and transportation systems used to get from place to place; 4) maintain the ports and the safeguardsother marine facilities used to transport and distribute goods; 5) advance technologies that ensureprovide clean energy, energy transition and decarbonization initiatives; 6) operate mission critical facilities where public and private data is stored, commercial transactions are processed, and communications are enabled; and 7) promote public health and safety every day. Our public sector customers include government agencies (federal, state, and local), military branches, educational institutions, transportation departments, water authorities and water authorities.other general infrastructure managers. Our private sector customers include owners and operators from multiple industries such as investor-owned utilities, participants in the renewable energy and decarbonization marketplace, owners ofwastewater treatment operations, data centers,center operators, developers and owners of residential and commercial real estate, operators of big-box and convenience retail chains,chain owners, mine operators and mining concerns.
others.
2027.
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•High potential for reoccurring revenue and multi-year assignments |
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•Engagement with renewable energy, energy transition, and energy efficiency activities |
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•Aging and failing infrastructure in need of upgrade and replacement |
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•Transformational investment paradigms such as privatization |
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•Economic vitality and attractive growth in population and workforce |
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Power
MuchAmerican Society of Civil Engineers of(“ASCE”) 2021 Infrastructure theReport power,Card rated the state of the U.S. Highway system as “D+” and estimates spending requirements of over $2.5 trillion over ten years on U.S. surface transportation infrastructure. Providing construction management and design services to departments of transportation and toll authorities has been a proven and dependable source of multi-year and reoccurring revenue.
Degradationsafety and sustainability of natural gas distribution systems is advancing thesafety infusion of public investment andsustainabilityofnaturalgasdistributionsystemsisadvancingtheinfusionofpublicinvestmentandprivate,returns-driven returns-driven capital.Theentrance ofprivatecapital intothehistorically publicutilitymarket,and theassociatedtimely demandforreturn oninvestment,hascatalyzed thepace ofmulti-yearexpenditures oncriticalinfrastructure.Asreported byTheCouncil ofState Governments,naturalgas utilitiesspend $19 billionannuallytoenhancethe safetyofthenaturalgas system.Examplesofourmulti-yearreoccurring revenueassignmentsintheutilities spaceincludeundergroundingofelectricdistributionlines,procurementofrights-of-wayandeasements,gasdistributionsystemmapping,anddesignforgas distribution pipeline replacement.
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renewables and decarbonization providers. For the years ended December 31, 20212023 and 2020,2022, Power and Utilities represented 15.0%18.5% and 16.7%12.5%, respectively, of our gross contract revenues.
Transportation
Utilizationoftransportation
Economicconstruction of structures. Interest rate hikes by the Federal Reserve Bank in 2022 and populationgrowth inmajor metropolitan areaswill drivedemand for spendingon expandedroadway capacity.TheASCEInfrastructureReportCardratesthestateoftheU.S.Highwaysystemas“D+”andestimatesspendingrequirementsofover$2.5trillionoverthenexttenyearsonU.S.surfacetransportationinfrastructure.Providingconstructionmanagementservicestodepartmentsoftransportationandtollauthorities has beena provenand dependablesource ofmulti-year andreoccurring revenue.
WeservepublicandprivatetransportationcustomersthatincludeFerrovial,FloridaDepartmentofTransportation,IllinoisDepartmentofTransportation,IllinoisStateTollHighwayAuthority,TexasDepartmentofTransportation,andVirginiaDepartmentofTransportation.
FortheyearsendedDecember31,2021 and 2020,Transportationrepresented11.0%and15.7%, respectively,2023, however, introduced an element of our gross contract revenue.
Building Infrastructure
Encompassingalltheplaceswelive,sleep,work,andplay,thismarketisfoundationallyalignedwithallday-to-dayfactorsthatareeitherinfluencedbyorinfluenceeconomicactivity.FueledbythecommitmentofthecurrentFederalReserveBanktomaintainhistoricallylowinterestrates,changingpopulationdemographics,andevolvingremoteworkdynamics,themarketfordesign,constructionandmaintenanceofnewandrenewedbuildinginfrastructurepresentsuswithcontinuallyexpandingopportunities.TheCOVID-19pandemichas,however,introducedanelementofuncertainty as to the continued growth of the market for residential, commercial and mixed-use building infrastructure.
Residential.
CommercialandRetail.Changes in shopping and consuming habits spurred by e-commerceacceleratedbystayathometrendsandorders,have, in our belief, resultedincatalyzed a massive reconfiguration of commercial and retail physical plant along with the configuration of their surrounding site elements. Brands arehave been rushingadapting their customer toengagements because of fundamental changes in consumption patterns that resulted from thedetachmentexperienceduetofearofanenduringpandemicenvironment. experience. As an example, as part of an initiative to “increase convenience-led formats” in the U.S., a large coffee shop chain as partof aninitiativeto “increaseconvenience-ledformats” intheU.S. includingwith both drive-thru and curbside pickup options closed 400 traditional locations in North America while adding 300 net new convenience-oriented locations throughout North America in their place. SavvyWe believesavvy and well capitalized developers and operators in this market will continue to demand our services in response to evolving market forces. We serve national retailers, such asbig box retailers, distribution center owners, office building owners and developers, convenience store operators, quick serve restaurant owners and others.
workformostofthelargenationalhomebuilders.
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implementation of smart- and green-building technologies in new and retrofit facilities. As thesociety continues to adapt to a post-pandemic economyreopensandbuildingoccupanciesrecovertopre-pandemicstates,state, we believetherewillbeatremendoushave experienced increased demand for retrofits of ventilation, air handling, air quality monitoring, and filtration systemsinorder to ensure healthier indoor environments necessary to mitigate the spread of infectious respiratory diseases. We have served institutional, government and government clients such as American University, George Washingtonquasi-public customers including large universities, state and local school systems, military branches, healthcare systems and others.University,GSA,INOVAHealthSystem,LoudounCountySchools,NationalReconnaissanceOffice,NewJerseyInstituteof Technology,O’HareInternationalAirport,RutgersUniversity,SmithsonianInstitution,U.S.Army,
FortheyearsendedDecember31,2021and2020,Buildinginfrastructurerepresented70.2%and63.0% 65.1%,respectively, of our gross contract revenue.
RenewableEnergy
Renewableenergyencompassesallactivitiessupportingtheenergysector’stransitionawayfromfossil-basedsystemsofenergyproductioninfavorofrenewableenergysourcessuchaswindandsolar,aswellaslithium-ionbatteries.Accordingto WoodMackenzie,(i)windandsolarwillincrease three-foldoverthenexttwentyyearstoaccount for30%ofU.S.powergenerationbythe year2040,(ii)electricvehicleunitswillincrease from11 millionto 323million bythe year2040, supplantingtraditional gasand dieselvehiclesin theprocess, and(iii) theU.S.willneed toinvest onetrilliondollarsperyearinnewenergycapacityoverthenext20yearstomeetthedemandsofeconomicgrowthandenergytransition.InitsreportRenewables2020—Analysisandforecastto2025,theInternationalEnergyAgencypredictsthatrenewablesareexpectedtoaccountfor95%ofthenetincreaseinglobalpowercapacitythrough2025.Duringthatperiod,theshareofrenewablesinelectricitygenerationisforecasttogrowfrom27%in2020to33%in2025.Furthermore,duringthe2020-2025forecastperiod,combinedwindandsolarcapacityisexpectedtodouble,achievingtwoimportantmilestones: theirtotalinstalledcapacityis expectedtosurpassthatof naturalgasin2023andthat ofcoalin2024.Duringthattime,BusinessWireforecasts an annual growth rateof more than 15% forthe highly fragmented UnitedStates solar energy market alone.
Limitednaturalresources,increasingdemandanddisruptiveinnovationaredrivingconsequentialprivateandpublicinvestmentintheexpansionof renewableenergy facilities.Increasing demandforindustrial graderenewable infrastructureand expandedcapacitywithin existingfacilities createanexceptional depth of opportunity for the sale of our services. We provide planning, environmental consulting, land procurement, civil and electricalengineering, and program management services to customers in the renewableenergy space.
Weservesolardevelopers,winddevelopers,andbatterystoragedevelopersintherenewableenergyspacesuchasAEPRenewables,BroadreachPower,DominionEnergy,FirstSolar,OnyxRenewablePartners,Rynova,SamsungC&TAmerica,SolisEnergy,S-Power,andSunTribePower.
EnergyEfficiency
Recent acquisitions haveprovided us thecapability and reputationneeded to enterthe energy efficiencymarket. Energy efficiencyplays a pivotalrole in advancing sustainable development within the global economy. Efforts to decarbonize the global energy system and advance the world’s climateobjectivesaredependentonimprovingenergyefficiency. Technologiesandapplicationssuchasdistributedgeneration,microgrids,theinternetofthings, energyasaservice,andcogenerationaretransforminghowweproduce,distribute,andconsumeenergy.
Asanexampleofthegrowthpotentialofthismarket,FortuneBusinessInsightsforecaststheglobalmarketfortheenergy-as-a-servicemarkettogrowatacompoundgrowthrateofabout12%overthenextsevenyears.TheresearchfirmofMarketsandMarketsforecaststhattheglobalmarketformicrogrids will grow ata compound growth rateof about 10% overthe next fiveyears.We view theenergy efficiency market asone that is synergisticwith the renewable energy marketas well as the powerand utilities market. Consequently,we intend to focus muchof our acquisition effortandresources in this direction.
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theirpotablewaterandwastewaterchallenges.Ourexpertisewithwatersolutionsrangesfromplanning,design,constructionmanagement,andfundingidentification. Weservethewaterresourceneedsofavarietyofcustomersincluding customers.
Mining
Miningfacilitiesrequireavarietyofgenerallyandspecialtyengineeringservicesweprovide.WeprimarilyservetheSouthwestU.S.coppermining industrywherewehave developedspecializedcapabilitiesovertime. Copperisbuoyedbyboth nearandlong-termfavorablefundamentals.Chinese demandforcopperisexceptionallystrong,and stimuluslong-term favorable fundamentals. Policy driven decarbonization targets are accelerating andpandemicrecoveryareexpectedtosupport economicgrowththatwillstimulateadditionalcopperdemand.Moreimportant,policydrivendecarbonizationtargetsareacceleratingandcopperisacriticalcomponentforelectricvehicles, charging stations, high-efficiency motors, and renewable energy. According to the International Copper Association, electric vehicles use up tofourtimesasmuchcopperasinternalcombustionvehiclesandrenewableenergypowergenerationusesfourtofivetimesasmuchcopperasfossilfuelpower generation.Copper iscrucialfor connectingandadvancing developmentofcore technologiesandsmart cities,including artificialintelligence,smartgrids,5Gtechnologies,mobilephonesandcomputers.AstudyconductedbytheMartecgroupfoundthatthetotalvolumeofcopperinsmartcitytechnology ispredicted torise from2.7 milliontonsin 2019to 4.8million tonsin 2025.Supplyof copperis limiteddue toan agingbase supply, limited numbers of in-progress and planned expansion projects, and the substantial time and entitlement challenges for execution of new projects. We also serve customers focused on mining of aggregates which are essential to the construction of roads and other transportation related infrastructure. The demand for mined aggregates is strongly
FortheyearsendedDecember31,2021and2020,theseemergingmarketscollectivelyrepresented3.8%and4.6% 5.3%, respectively, of our gross contractrevenue.
ConsistentwiththeoverallU.S.andglobaleconomies,eachofourmarketswasinitiallyaffectedadverselyinitsownwayduringtheearlystage oftheCOVID-19pandemic.Ourservicesinallofourmarketswereconsideredessentialallowingustocontinueworkinguninterrupted.Withthepassage oftime,our marketshavesteadily reboundedtoator nearpre-pandemiclevels ofactivity.
As a public company, we
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•High potential for reoccurring revenue and multi-year assignments |
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•Engagement with renewable energy, energy transitions, and energy efficiency activities |
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•Aging and failing infrastructure in need of upgrade and replacement |
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•Transformational investment paradigms such as privatization |
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•Economic vitality and attractive growth in population and workforce |
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•Advances one or more of our strategic growth objectives |
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•Provides opportunities for cross-selling additional Bowman services |
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•Embodies a culture that is entrepreneurial and compatible with the existing Bowman culture |
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•Population scale of one million or greater |
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•Highly ranked in the Urban Land Institute’s publication Emerging Trends in Real Estate |
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•Location which complements and/or expands customer opportunities |
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•Conceptual land planning • |
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Commissioning and Energy Efficiency
Commissioning involves ensuring that a new building operates in as energy efficient a manner as the original design intent. Over time, the intended use and operation of a building can change significantly. The retro-commissioning process assures that a building and its systems are optimized to perform interactively to minimize energy demands. In addition to aligning the systems with the current usage, the retro-commissioning process will typically result in substantial reduction of both operating costs and energy consumption. In addition to commissioning, we provide energy related services such as energy modeling, Energy Star certifications, LEED consulting and energy audits that result in substantial reductions in energy consumption. Examplespermitting
•Utility relocation designs |
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Construction Management
The quality, durability, and safety of our infrastructure are ensured by proficient construction engineering and management services augmented by sound quality assurance practices. Our construction engineering team consists of professional engineers, construction managers, inspectors, and certified technicians. We approach assignments with a depth of experience that enables us to anticipate the challenges associated with successfully delivering complex infrastructure construction projects. Every project has a comprehensive plan to address stakeholder issues, utilities, maintenance of traffic, construction access and safety, pedestrian movements, environmental constraints, and schedule and budgetary limitations. Examples of services include:
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Environmental Consulting
Sound environmental management is essential to the health and safety of our surroundings and is a critical aspect of the development of any energy, transportation, or community development project. With a focus on the environmental impact of a project, a comprehensive plan requires solutions for issues such as water scarcity, climate change, managing environmental liabilities, regulatory obligations, risk management, and good environmental stewardship. Our team of scientists and licensed professionals possess a broad range of experience in natural resource inventories, wetland delineations, and threatened and endangered species habitat assessments for conservation, development, and infrastructure improvement projects. Our environmental teams have developed, or contributed to numerous regional habitat conservation plans, statewide parks planning assessments, and endangered species research, planning, and compliance projects. Examples of services include:
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Landscape Architecture
Landscape architecture is place-making within the exterior environment. This broad field ranges from small-scale garden design and community parks to the large-scale design of plazas, institutional campuses, and streetscape settings. Each space is important to its users and to function well, it must meet specified programmatic needs while being aesthetically pleasing. We work with our customers to develop the big picture ideas that can strengthen and transform a community, create tools needed to make vision a reality, guide our customers through regulatory approvals processes, and work closely with developers to ensure market success once projects are completed. Balancing aesthetics, function, and sustainability, we skillfully translate raw ideas into successful projects tailored for each site. Examples of services include:
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Land Procurement and Right-of-Way
Land procurement and right-of-way acquisition is a critical component of practically any significant utility, infrastructure, or utility scale energy project. We provide turn-key services related to the real estate aspects of large projects including public outreach, property owner negotiation, appraisal services, relocation services, and expert testimony. Examples of services include:
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Mechanical, Electrical and Plumbing – Building Services
Our mechanical, electrical, and plumbing engineering services are focused on creating high performance connected environments. Our solutions support a facility’s purpose with systems that optimize the personal experience and deliver practical results to owners, tenants, and operators while promoting productivity and energy efficiency. Our electrical engineers are highly experienced in the field of photovoltaics to serve our customers in the renewable energy, energy transition and energy efficiency space. Our mechanical engineers have the expertise necessary to deliver cost effective plans and designs for ventilation and medical-grade air filtration to meet stringent indoor air quality requirements to assist in reducing the spread of infectious respiratory diseases. Examples of services and projects include:
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Structural Engineering
Our structural engineers work on the design and technical challenges involved in creating durable structures that meet the challenges of the 21st century transportation system. From simple culverts to complex interchanges and long-span bridges, we incorporate unique architectural treatments and other features that contemplate the full spectrum of modern construction techniques and materials, including steel trusses, curved beams, box beams, precast/prestressed concrete, timber, and fiber-reinforced polymer spans. Examples of projects include:
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Surveying and Geospatial Engineering
Our industry-leading land surveying services provide a reliable foundation for a broad range of project types. We deploy a full suite of advanced technology solutions allowing us to capture data in even the most remote and access challenged locations. We create, analyze, and build tools to share geospatial data, as well as help our customers integrate these tools into their daily business activities. We seamlessly provide GIS mapping and IT services, as well as technical enhancements to projects. Our in-house teams of accredited land surveying experts have a deep understanding of local, county, and state jurisdiction requirements and review processes. Our one stop shop approach to survey and geospatial engineering streamlines our customer experience and enhances the accuracy outcome and experience of any development services or public sector project. Examples of services include:
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Transportation
Functional transportation systems are crucial in connecting our communities and play an essential role in the development of society. Our engineers apply proven methods and technologies to support our customers’ objectives, strengthen communities and positively impact quality of life. With significant experience in alternative delivery methods, our local knowledge is backed by the deep resources and stability of a national company. We excel on challenging transportation projects that require complex solutions within both congested urban and rural environments. From major freeway systems and urban arterials to rural highways, rail and bridge projects, our transportation engineers plan, design and oversee the construction process for safe, efficient, reliable and user-friendly transit projects of all sizes and scopes. We have experience with and understand agency rules and regulations, and we work closely with municipal, county and state officials to provide guidance, professional insight, and functional and cost-effective designs while staying up to date on continually changing industry trends. Examples of services include:
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•Signing/pavement marking plans |
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•Drainage design |
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•Hydraulics |
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•Filtration systems |
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•Elevated storage tanks |
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•Water treatment systems |
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•Pump stations |
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Weacquired both before and after becoming a public company.
Not all prospective acquisitions materialize as completed transactions.
Subsequent to
Triangle The 2023 acquisitions are summarized below in order of acquisition.
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PCD
BTMEngineering,Inc.OnOctober15,2021,weclosedonthepurchaseofassetsandoperationsofBTMEngineering,Inc.,aprofessional services firmbased inLouisville, KYthat generatedapproximately$2.6 millionof grosscontractrevenue (unaudited)for theyear endedDecember 31, 2020. BTM specializes in general civil and structural engineering.
KibartInc.OnDecember16,2021,weclosedonthepurchaseofassetsandoperationsofKibartInc.,aprofessionalservicesfirmbasedinTowson,MDthatgeneratedapproximately$6.8millionofgrosscontractrevenue(unaudited)fortheyearendedDecember31,2020.Kibartspecializes in mechanical and electrical engineering.
1519SurveyingLLC.OnDecember23,2021,weclosedonthepurchaseofassetsandoperationsof1519SurveyingLLC,aprofessionalservices firm basedinWaco,TX thatgenerated approximately$5.0 millionof grosscontract revenue (unaudited)for theyear endedDecember 31,2020. 1519 specializes in land surveying and general civil engineering.
Terra Associates,Inc.OnDecember31,2021,weclosedonthepurchaseofassetsandoperationsofTerraAssociates,Inc.,aprofessional services firmbasedinHouston,TXthatgeneratedapproximately $6.2millionofgrosscontract revenue(unaudited)forthe yearendedDecember31, 2020.Terra specializes in general civil engineering.
Perry Engineering LLC. On February 2, 2022,November 9, 2023, we acquired the business and operations of CFA, Inc. a Reno, Nevada based company that provides a mix of civil engineering, planning, surveying, mapping, and remote sensing to a mix of public and private sector customers.
We haveUnder the acquisition purchase agreements, we paida totalof approximately $29.1$66.0 million forthe closedtransactions these acquisitions, including 250,665904,608 shares ofcommon stockvaluedat atotal of $4.6$25.6 million or an average of $28.35 per share. The remaining consideration was comprised of a combination of cash and seller notes, including notes convertible into shares of common stock at the option of the seller. For full purchase price accounting, see Note 4 Acquisitions in Part IV of this Annual Report on the 10-K, for additional information. Consistent with our acquisition strategy, we generally intend to have fully integrated the operations, systems, and employees of our acquired companies into our organization during a transition and integration period of up to one year, after which we expect to phase out the individual brands.millionoranaverageof$18.35 pershare.Theremainingconsiderationwascomprisedofacombinationofcashandsellernotes.
During each of the years ended December 31, 2023 and 2022, approximately 21% of our revenue was derived from assignments with public sector customers directly.
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requires us to complete work outlined in the contract for a pre-determined fixed price. InWith lump sum contracts,assignments, modified schedules and expansions of scope will likely result in additional fees through change orders issued by our customers.
Our fixed fee assignments generally include a specified scope of work and a defined set of deliverables. For accounting and financial reporting purposes we classify a contract as fixed fee if any portion of the performance obligation under the contract requires us to complete work outlined in the contract for a pre-determined fixed price.
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| December 31, 2021 |
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| December 31, 2020 |
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Building Infrastructure 1 |
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| 62.3 | % |
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| 42.7 | % | |||||||||||||||||||
December 31, 2023 | December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Building Infrastructure | Building Infrastructure | 54.7 | % | 51.2 | % | ||||||||||||||||||||||
Transportation |
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| 19.0 | % |
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| 28.0 | % | Transportation | 24.2 | % | 30.6 | % | ||||||||||||||
Power & Utilities |
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| 16.2 | % |
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| 24.8 | % | Power & Utilities | 17.4 | % | 13.4 | % | ||||||||||||||
Other Emerging Markets |
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| 2.5 | % |
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| 4.5 | % | Other Emerging Markets | 3.7 | % | 4.8 | % |
As of December 31, 2021, we had net backlog of approximately $145 million representing 86.5% of gross backlog. Net backlog is our gross backlog exclusive of subconsultant costs and other direct expenses. Our net backlog at December 31, 2021 was comprised as follows:
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Marketing and Sales
Consumers of engineering and technical services consistent with ours can be local, regional, and national organizations with projects ranging from a single, quick-turn deliverable to complex long-term assignments and multi-year contracts. By focusing our business development efforts more on long-term assignments and multi-year contract opportunities in growing end markets, we extend the visibility of future revenue forecasts and reduce the costs and uncertainty associated with backlog and revenue replacement. We expect to continue to see organic growth in sales based on our commitment to delivering the highest quality and most creatively conceived results to our customers.
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successes.
The opportunity and financial cost to customers of delivery delays has a meaningful impact on their willingness to rely on smaller firms.
workforce, which we consider appropriate for our operating profile.
personal and professional lives.
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determined were in the best interest of ourincluded allowing employees the communities in which we operate, and which comply with government regulations. This includes having most of our employeesto work from home, while implementing additional safety measures forhome. We believe that in-person collaboration is a critical component of employee engagement. All our offices are open to employees, continuing critical on-site work.and we encourage managers to implement policies that encourage employees to work collaboratively on a regular basis in our offices as opposed to exclusively remotely.
We maintain a large fleet of vehicles, some of which are subject to various federal regulations.
all states within the continental United States either directly or through an affiliate.
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•federal, state, and local laws and regulations (including the Federal Acquisition Regulation or “FAR”) regarding the formation, administration, and performance of government contracts; |
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To help ensure compliance with these laws and regulations, our employees are sometimes required to complete tailored ethics and other compliance training relevant to their position and our operations.
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•We engage in a highly competitive business. If we are unable to compete effectively, we could lose market share and our business and results of operations could be negatively impacted; |
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•Our continued success is dependent upon our ability to hire, retain and utilize qualified personnel; continued success is dependent upon our ability to hire, retain and utilize qualified personnel; |
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•Our profitability could suffer if we are not able to maintain adequate utilization of our workforce due to slowdowns in the economy, or reduced demand for our services; |
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•If we are unable to integrate acquired businesses successfully, our business could be harmed; |
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•We cannot assure you that we will achieve synergies and cost savings in connection with prior or future acquisitions; |
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•Demand from customer is cyclical and vulnerable to economic downturns. If the economy weakens or customer spending declines, our financial results may be impacted; |
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•Construction, roadway, mining, and maintenance sites are inherently dangerous workplaces. If we, the owner, or others working at such sites fail to maintain safe work conditions, we can be exposed to significant financial losses and reputational harm, as well as civil and criminal liabilities; |
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•Our services expose us to significant risks of liability, and our insurance policies may not provide adequate coverage; |
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•The contracts in our backlog may be adjusted, cancelled, or suspended by our customers and, therefore, our backlog is not necessarily indicative of our future revenues or earnings. Additionally, even if fully performed, our backlog is not a good indicator of future gross profit; |
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•The nature of our contracts, particularly those that are fixed price, subject us to risks of cost overruns. We may experience reduced profits or, in some cases, losses if costs increase above budgets or estimates or if the project experiences schedule delays; |
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•Governmental agencies may modify, curtail or terminate our contracts at any time prior to their completion and, if we do not replace them, we may suffer a decline in revenue; |
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•Our failure to comply with a variety of complex procurement rules and regulations could damage our reputation and result in our being liable for penalties, including termination of our government contracts, disqualification from bidding on future government contracts and suspension or debarment from government contracting; |
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•We are dependent on third parties to complete certain elements of our contracts; |
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•If we fail to develop or maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential stockholders could lose confidence in our financial reporting, which would harm our business and the trading price of our common stock; |
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•Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud; |
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•An active trading market for our common stock may not continue to develop or be sustained; and |
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prices and profit margins and may force us to accept contractual terms and conditions that are less favorable to us, thereby increasing the risk that, among other things, we may not realize profit margins at the same rates as we have seen in the past or may become responsible for costs or other liabilities we have not accepted in the past. If we are unable to compete effectively, we may experience a loss of market share or reduced profitability or both, which, if significant, could have a material adverse impact on our business, financial condition, and results of operations.
services.
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•our ability to transition employees from completed projects to new assignments and to hire and assimilate new employees; |
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•our ability to forecast demand for our services and thereby maintain an appropriate headcount in each of our geographies and workforces; |
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•our ability to manage attrition; |
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•our need to devote time and resources to training, business development, professional development, and other non-chargeable activities; |
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•our ability to match the skill sets of our employees to the needs of the marketplace; and |
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harmed
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negotiating acquisitions (including those that do not get completed), and we have paid, and may in the future also pay, fees and expenses associated with financing acquisitions to investment banks and other advisors. Any of these amounts may be substantial, and together with the size,
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•unanticipated issues in integration of information, communications and other systems; |
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•unanticipated incompatibility of logistics, marketing and administration methods; |
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•maintaining employee morale and retaining key employees; |
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•integrating the business cultures of companies; |
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•preserving important strategic customer relationships; |
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•consolidating corporate and administrative infrastructures and eliminating duplicative operations; and |
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•expend significant time, effort and resources; |
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•issue securities that would dilute our current stockholders; |
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•use a substantial portion of our cash resources; |
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•increase our interest expense, leverage and debt service requirements if we incur additional debt to pay |
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•assume liabilities, including environmental liabilities, for which we do not have indemnification from the |
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•record goodwill and non-amortizable intangible assets that are subject to impairment testing on a regular |
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•experience volatility in earnings due to changes in contingent consideration related to acquisition liability estimates; •incur amortization expenses related to certain intangible assets; •lose existing or potential contracts as a result of conflict-of-interest issues; •incur large and immediate write-offs; or •become subject to litigation. |
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If we are not able to successfully manage our growth strategy, our business operations and financial results may be adversely affected.
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of other unexpected costs associated with operating the business. Moreover, our implementation of cost savings initiatives may disrupt our operations and performance, and our estimated cost savings from such initiatives may be based on assumptions that prove to be inaccurate. If, for any reason, the benefits we realize are less than our estimates or our improvement initiatives adversely affect our operations or cost more or take longer to implement than we project, or if our assumptions prove inaccurate, our results of operations may be materially and adversely affected. In addition, our operating results from these acquisitions could, in the future, result in impairment charges for any of our intangible assets, including goodwill, or other long-lived assets, particularly if economic conditions worsen unexpectedly. These changes could materially adversely affect our results of operations, financial condition, stockholders’ equity, and cash flows.
Demand from clients is cyclical and vulnerable to economic downturns. If the economy weakens or client spending declines, our financial results may be impacted.
Demand for services from our clients is cyclical and vulnerable to economic downturns, which may result in clients delaying, curtailing or canceling proposed and existing projects. Our business traditionally leads in downturns to the overall economy and may lag in a recovery. As a result, we may not have seen the full effects of the COVID-19 pandemic on our business.
In addition, financial markets around the world experienced volatility following the invasion of Ukraine by Russia in February 2022. In response to the invasion, the U.S., U.K. and European Union, along with others, imposed significant new sanctions and export controls against Russia. Russian banks and certain Russian individuals may implement additional sanctions or take further punitive actions in the future. The full economic and social impact of the sanctions imposed on Russia (as well as possible future punitive measures that may be implemented), as well as the counter measures imposed by Russia, in addition to the escalating military conflict between Ukraine and Russia, which could conceivably expand into the surrounding region, remains uncertain; however, both the conflict and related sanctions have resulted and could continue to result in disruptions to trade, commerce, pricing stability, credit availability, and/or supply chain continuity, in both Europe and globally, and has introduced significant uncertainty into global markets and the global economy. Current global geopolitical tensions, including related to Ukraine, may exacerbate any economic downturn. If the economy weakens further or client spending declines, then our revenue, profits and overall financial condition may deteriorate.
In addition, if there is additional economic downturn, our existing and potential clients may either postpone entering into new contracts, renew existing contracts or request price concessions. Difficult financing and economic conditions may cause some of our clients to demand better pricing terms or delay payments for services we perform, thereby increasing the average number of days our receivables are outstanding and the potential of increased credit losses on uncollectible invoices. Further, these conditions may result in the inability of some of our clients to pay us for services that we have already performed. Accordingly, these factors affect our ability to forecast our future revenue and earnings from business areas that may be adversely impacted by market conditions.
Outbreaks of communicable diseases, including the on-going global pandemic related to COVID-19 and its variants may have, directly or indirectly, a material and adverse effect on our business, financial condition, and results of operations. The duration and extent to which this will impact our future financial condition and results of operations remains uncertain.
Global or national health concerns, including the outbreak of pandemic or contagious disease, can negatively impact the U.S. economy and, therefore, demand and pricing for our services. For example, the outbreak of the COVID-19 pandemic and the measures being taken to address and limit the spread of the virus have already adversely affected the U.S. economy and financial markets, resulting in an economic downturn that has negatively impacted demand for services like ours (see Note 24 of the accompanying combined financial statements for more information on the impact of COVID-19 on our operations). Furthermore, the COVID-19 pandemic also raises the possibility of an extended global economic downturn and has caused volatility in financial markets, which could affect demand for our services and affect our financial condition and results of operations even after the pandemic is contained, and the containment measures are lifted. For example, if a client’s financial difficulties become severe, the client may be unwilling or unable to pay our invoices in the ordinary course of business, which could adversely affect collections of both our accounts receivable and unbilled services. The COVID-19 pandemic raises the possibility of an extended global economic downturn that may affect the ability of our customers to pay for our services. Since many of our clients are government agencies, a fall in tax revenues from the downturn in activity could affect their decisions to spend more on infrastructure maintenance and upgrades. We continue to monitor the impact of the COVID-19 pandemic on our cash flows and on the credit and financial markets.
Additionally, we have an increased number of employees working remotely. As a result, we may have increased cyber security and data security risks, due to increased use of home Wi-Fi networks and virtual private networks, as well as increased distribution of physical machines. While we implement IT controls to reduce the risk of a cyber-security and data security breach, there is no guarantee that these measures will be adequate to safeguard all systems with an increased number of employees working remotely.
At this time, we are monitoring, and will continue to monitor, the safety of our employees during the COVID-19 pandemic. We are evaluating, and will continue to evaluate, the impact of COVID-19 on projects, but the full effects of COVID-19 on our operations are still unknown. The duration and extent of the impact from the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the extent and effectiveness of containment
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actions, and the impact of these and other factors on our employees and clients. The implementation of shelter-in-place orders within the cities and municipalities we operate in could further negatively impact future results as well as the re-designation of infrastructure spending to non-essential services. Finally, the engineering and consulting design process undertaken by us is a collaborative process typically undertaken in an in-person office environment. The lack of this in person interaction may adversely impact our work product and our financial results. It is not possible at this time to estimate the full impact that COVID-19 will have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted.
Moreover, to the extent the COVID-19 pandemic adversely affects our business, financial condition, and results of operations, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, including those related to our ability to increase sales to existing and new customers, continue to perform on existing contracts, develop and deploy new technologies, expand our marketing capabilities and sales organization, generate sufficient cash flow to service our indebtedness, and comply with the covenants in the agreements that govern our indebtedness.
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The natureunder lump-sumcontractsand assignmentsmay adversely impact our business operations and financial results.
scope of the assignment changes or unforeseen conditions arise. For financial reporting, any contract with one or more lump-sum fee assignment is characterized in total as a fixed fee contract and is reported in the aggregate as such. During the years ended December 31, 20212023 and 2020, approximately 66%2022, we derived over 62% and 63%70%, respectively, of our gross revenues were earned under fixed pricerevenue from lump-sum assignments. Fixed priceLump-sum assignments requireexpose us to estimate the total costa number of the projectrisks not inherent in advancecost-plus and time and material assignments, including underestimation of its performance. For fixed price assignments, we may benefit from any cost savings, but we bear greater risk of paying some, if not all, of any cost overruns. Fixed price assignments are establishedcosts, ambiguities in part on partialspecifications, unforeseen costs or incomplete designs, cost and scheduling estimates that are based on several assumptions, including those about future economic conditions, commodity and other materials pricing and availability of labor, equipment and materials, and other exigencies. If the design or the estimates prove inaccurate or if circumstances change due to, among other things, unanticipated technicaldifficulties, problems difficulties in obtaining permits or approvals, changes in local laws or labor conditions, weather or otherwith new technologies, delays beyond our control, failures of subcontractors to perform, and economic or other changes that may occur during the contract period. Losses under lump-sum assignments could adversely impact our results of operations.
updated estimates.
Third-party
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Further, we rely on our network and third-party infrastructure and enterprise applications, internal technology systems, and our website for our development, marketing, operational, support, hosted services, and sales activities. Despite our implementation of network security measures, we are vulnerable to disruption, infiltration, or failure of these systems or third-party hosted services in the event of a major earthquake, fire, power loss, telecommunications failure, cyber-attack, war, terrorist attack, or other catastrophic event could cause system interruptions, reputational harm, loss of intellectual property, lengthy interruptions in our services, breaches of data security, and loss of critical data and could harm our future operating results.
Cyber security
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fund new projects, may choose to make fewer capital expenditures or otherwise slow their spending on our services or to seek contract terms more favorable to them. Our government clientscustomers may face budget deficits that prohibit them from funding proposed and existing projects or that cause them to exercise their right to terminate our contracts with little or no prior notice. In addition, any financial difficulties suffered by our sub-consultants or suppliers could increase our cost or adversely impact project
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•fluctuations in the spending patterns of our customers; |
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•the number and significance of projects executed during a quarter; |
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•unanticipated changes in contract performance, particularly with contracts that have funding limits; |
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•the timing of resolving change orders, requests for equitable adjustments and other contract adjustments; |
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•the timing of our meeting a project milestone that allows us to bill our customer and recognize revenue; |
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•project delays; |
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•changes in prices of commodities or other supplies; |
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•weather conditions that delay work at project sites; |
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•the timing of expenses incurred in connection with acquisitions or other corporate initiatives; |
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•natural disasters or other crises; |
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•staff levels and utilization rates; |
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Rising
Rising
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services in the jurisdiction where the services are performed. We could be liable to third parties who use or rely upon our reports and other work product even if we are not contractually bound to those third parties. These events could in turn result in monetary damages and penalties.
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•incur additional indebtedness; |
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•create liens; |
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•redeem our equity securities; |
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•enter into certain lines of business; |
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•make certain investments or certain other restricted payments; |
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•sell certain kinds of assets; |
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•enter into certain types of transactions with affiliates; and |
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•declare all borrowings outstanding, together with accrued and unpaid interest, to be immediately due and payable; |
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•require us to apply all our available cash to repay the borrowings; or |
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Changes in the method of determining the London Inter-Bank Offered Rate, or LIBOR, or the replacement of LIBOR with an alternative reference rate, may adversely affect interest income or expense.
On July 27, 2017, the United Kingdom Financial Conduct Authority, which oversees LIBOR, formally announced that it could not assure the continued existence of LIBOR in its current form beyond the end of 2021, and that an orderly transition process to one or more alternative benchmarks should begin. In April 2018, the Federal Reserve Bank of New York, in conjunction with the AARC, a steering committee comprised of large U.S. financial institutions, announced replacement of U.S. LIBOR with a new index calculated by short-term repurchase agreements, backed by U.S. Treasuries called the Secured Overnight Financing Rate. The first publication of SOFR was released in April 2018. Certain borrowings under our credit agreement are currently determined by a LIBOR benchmark. An amendment to the credit facility as of July 30, 2021 provides SOFR as the benchmark replacement. Whether or not SOFR attains market acceptance as a LIBOR replacement remains in question. The selection of SOFR as the alternative reference rate currently presents certain market concerns, because a term structure for SOFR has not yet developed, and there is not yet a generally accepted methodology for adjusting SOFR, which represents an overnight, risk-free rate, so that it will be comparable to LIBOR, which has various tenors and reflects a risk component. In addition, our hedging strategies may be adversely impacted as no active market exists for derivative instruments tied to SOFR.
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decrease, perhaps significantly.
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•The ability of the public agency to terminate the contract with 30 days’ prior notice or less; |
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•Changes in public agency spending and fiscal policies which can have an adverse effect on demand for our services; |
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•Contracts that are subject to public agency budget cycles, and often are subject to renewal on an annual basis; |
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•The often wide variation of the types and pricing terms of contracts from agency to agency; |
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•The difficulty of obtaining change orders and additions to contracts; and |
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•federal, state, and local laws and regulations (including the Federal Acquisition Regulation or “FAR”) regarding the formation, administration, and performance of government contracts; |
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•the Civil False Claims Act, which provides for substantial civil penalties for violations, including for submission of a false or fraudulent claim to the U.S. government for payment or approval; and |
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hazardous substances, or a failure to comply with applicable regulations, could result in substantial costs to us, including clean-up costs, fines and civil or criminal sanctions, third-party claims for property damage or personal injury, or cessation of remediation activities. Our continuing work in the areas governed by these laws and regulations exposes us to the risk of substantial liability.
all states in the continental U.S.
We are subject to increased costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives.
As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company, including costs associated with public company reporting requirements. The Sarbanes-Oxley Act of 2002, as amended, or Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and The Nasdaq Global Market to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Further, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, was enacted. There are significant corporate governance and executive compensation related provisions in the Dodd-Frank Act that require the SEC to adopt additional rules and regulations in these areas, such as “say on pay” and proxy access. Emerging growth companies may implement many of these requirements over a longer period of up to five years from the pricing of this offering. We intend to take advantage of these extended transition periods but cannot guarantee that we will not be required to implement these requirements sooner than budgeted or planned and thereby incur unexpected expenses. Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.
The rules and regulations applicable to public companies have substantially increased our legal and financial compliance costs and make some activities more time-consuming and costly. If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition, and results of operations. The increased costs will decrease our net income and may require us to reduce costs in other areas of our business or increase the prices of our products or services. For example, these rules and regulations made it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs in the future to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.
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•the recruitment or departure of key personnel; |
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•actual or anticipated changes in estimates as to financial results, acquisitions or recommendations by securities analysts; |
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•variations in our financial results or those of companies that are perceived to be similar to us; |
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•market conditions in the utility and infrastructure markets where we focus; |
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•future sales of our common stock by us or our stockholders; |
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•the trading volume of our common stock; |
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•general economic, industry and market conditions; and |
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Prior to the commencement of trading of our common stock on May 7, 2021, no public market for our common stock existed.
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•a limited availability of market quotations for our securities; |
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•a determination that our common stock is a “penny stock,” which will require brokers trading in our common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our common stock; |
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•a limited amount of analyst coverage; and |
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Raising additional capital may cause dilution to our stockholders, including purchasers of common stock in this offering.
To the extent that we raise additional capital through the sale of common stock or securities convertible or exchangeable into common stock, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that materially adversely affect your rights as a common stockholder. Debt financing, if available, would increase our fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
Issuances
The issuance
After our initial public offering, we filed a registration statement under the Securities Act to register
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•a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time; |
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•a prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at a meeting of our stockholders; |
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•a requirement that special meetings of stockholders be called only by the board of directors acting pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office; |
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•a requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds of all outstanding shares of our voting stock then entitled to vote in the election of directors; |
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•a requirement of approval of not less than two-thirds of all outstanding shares of our voting stock to amend any bylaws by stockholder action or to amend specific provisions of our certificate of incorporation; and |
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revised accounting standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company.
Even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company,” which would allow us to continue to take advantage of many of the same exemptions from disclosure requirements and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
None.
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Stockholders
As of March 23, 2022, thereBWMN. There were approximately seven holders
Dividends
at February 29, 2024.
ASSUMES $100 INVESTED ON MAY 7, 2021 | |||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2023 | |||||||||||||||||
2021 | 2022 | 2023 | |||||||||||||||
Bowman Consulting Group Ltd. | 100.00 | 156.07 | 253.71 | ||||||||||||||
Russell 2000 Index | 100.00 | 77.53 | 89.23 | ||||||||||||||
Nasdaq Market Index | 100.00 | 76.11 | 109.16 |
OnOctober8,2021,weissued to PCDEngineering,Inc, 36,444sharesofcommonstock at $13.88$27.12 per share as partial consideration for a totalour acquisition of $0.5 million,aspartialconsiderationforouracquisitionofPCDEngineering,Inc.
Dennis Corporation.
Blankinship and Associates, Inc.
For a description of these acquisitions, see Note 4, Acquisitions, appearing in Part IV of this Annual Report on Form 10-K.
Use of Proceeds
On May 11, 2021, we closed our IPO, in which we sold 3,690,000 of our common stock at $14.00 per share resulting in net proceeds of $48.0 million after deducting underwriting discounts and commissions. The offer and sale of the shares in our IPO were registered under the Securities Act on Form S-1 (File No. 333-255076) which was declared effective by the SEC on May 6, 2021.
On June 4, 2021, the underwriters exercised their option to purchase an additional 115,925 shares of the Company’s common stock at the public offering price of $14.00 per share, resulting in additional gross proceeds of approximately $1.6 million. After giving effect to this partial exercise of the overallotment option, the total number of shares sold by Bowman in its initial public offering increased to 3,805,925 shares and gross proceeds increased to approximately $53.3 million. The exercise of the over-allotment option closed on June 8, 2021, at which time the Company received net proceeds of approximately $1.5 million after underwriting discounts and commissions.
We utilized a portion of our net proceeds to satisfy our obligation under our revolving line of credit, to pay expenses associated with the offering and the funding of acquisitions. We expect to use the remaining net proceeds for general corporate purposes, including organic expansion and the funding of potential future acquisitions.
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Period |
| Total Number of Shares Purchased |
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| Average Price Paid Per Share |
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| Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
|
| Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs |
| ||||
10/1/21 - 10/31/21 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
11/1/21 - 11/30/21 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
12/1/21 - 12/31/21 |
|
| 12,874 |
|
|
| 21.25 |
|
|
| - |
|
|
| - |
|
Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3) | ||||||||||||||||||||||
10/1/23 - 10/31/23 | 16,749 | 26.21 | 28,404 | |||||||||||||||||||||||
11/1/23 - 11/30/23 | 10,416 | 28.91 | - | 10,000,000 | ||||||||||||||||||||||
12/1/23 - 12/31/23 | 14,462 | 34.56 | - | 10,000,000 |
We repurchased 12,874
stock and may be suspended, modified, or discontinued at any time without notice. As of December 31, 2023, we have repurchased no shares of our common stock under the 2023 Repurchase Authorization.
38
COVID-19 Update
It is not possible at this time to estimate the full impact that COVID-19 will ultimately have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted. We are evaluating, and will continue to evaluate, the impact of COVID-19 on projects, but the full effects COVID-19 will have on our operations are still unknown. Early on in the course of the pandemic we were considered an essential service in all states and local jurisdictions where we operate. While there was some degree of disruption in all markets, we were able to continue serving customers without interruption. As of the date of this report, we have not experienced any material and adverse effects on our business, financial condition and results of operations related to the COVID-19 pandemic. We did not qualify for the PPP Loan program under the CARES Act. We took advantage of the opportunity to defer $2.5 million of employer payroll taxes during the year ended December 31, 2020, as afforded us under the CARES Act. The duration and extent of the impact from the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, including new variants, the extent and effectiveness of containment actions, and the impact of these and other factors on our employees and clients. The implementation of shelter-in-place orders within the cities and municipalities we operate in could further negatively impact future results as well as the re-designation of infrastructure spending to non-essential services. At this time, we are monitoring, and will continue to monitor, the safety of our employees during the COVID-19 pandemic.
Common Stock Offering
On February 8, 2022, we priced an underwritten follow-on offering of 900,000 shares of our common stock (the “Firm Shares”) at an offering price of $16.00 per share. The shares were sold pursuant to an effective registration statement on Form S-1 (Registration No. 333-262464). In addition, Gary Bowman, our President, Chairman and Chief Executive Officer, sold an aggregate of 150,000 shares of common stock in the offering. We granted the underwriters of the offering a 30-day option to purchase up to 157,500 shares of our common stock solely to cover over-allotments. On February 11, 2022, we closed on the underwritten follow-on offering and received
39
net proceeds of approximately $13.7 million after deducting the underwriting discount and estimated offering expenses payable by the Company, and Mr. Bowman received aggregate proceeds of approximately $2.4 million. We did not receive any proceeds from the sale of shares of our common stock by Mr. Bowman.
On February 28, 2021, the underwriters exercised their option to purchase an additional 157,500 shares of our common stock at an offering price of $16.00 per share, resulting in additional gross proceeds of approximately $2.5 million. After giving effect to this exercise of the overallotment option, the total number of shares sold by us in the follow-on offering increased to 1,057,500 shares with total gross proceeds of approximately $16.9 million. The exercise of the over-allotment option closed on March 2, 2022, at which time we received net proceeds of approximately $2.4 million after underwriting discounts and commissions.
WepresentourfinancialstatementsfortheyearendedDecember31,2020ascombinedand fortheyearendedDecember 31,2021asconsolidated,reflectingresultsfortheCompany,oursubsidiariesandentitiesundercommoncontrolperformingsimilarservices.Inthe accompanyingcombined andconsolidatedfinancial statements,weeliminate allintercompany transactionsbetween theentities. Consolidation ofentitiesundercommon controlwouldnothave alteredthepresentationoffinancial statementssinceallappropriate adjustmentsandeliminations areincludedin thecombinedandcondensed consolidatedfinancialstatements.In connectionwithourinitial publicoffering,weexecutedconsolidatingtransactionsthateliminatedtheneedtopresentcombinedandconsolidatedfinancialstatementsuponeffectivenessofourinitial public offering, other than for historicalcomparisons (see “Consolidating Transactions in Connection withour Initial Public Offering”).
40
Our fixed fee contracts generally include a specific scope of work and defined deliverables. Lump sum contracts can involve both hourly and fixed fee tasks.
Future Stock issued as consideration in connection with acquisitions where there is no service period, and no risk of forfeiture, is considered a component of the purchase price and does not run through our income statement as non-cash stock compensation expense for unvested shares awarded prior to December 31, 2020 is based on a $12.80 per share fair value on the date of modification. Stock awards will continue to be an important part of our long-term retention and rewards philosophy.
expense.
41
On January 1, 2019, we adopted Accounting Standards Codification Topic 606 (“ASC Topic 606”).
42
value, an impairment loss would be recognized in our consolidated statement of operations in an amount equal to the excess of the carrying value over the estimated fair value, limited to the total amount of goodwill allocated to that reporting unit.
Income Tax
OnJanuary1,2018,wechangedourelectionfromanS-corporationtoaC-corporation.AsanS-corporation,wewereanon-taxableentitywithalltaxable income50% likelihood of being realized. Changes in recognition orloss allocatedtotheshareholders. Uponconversiontoa C-corporation,webecame ataxableentity.On December31,2018, werecorded a$5.4million deferredtaxliability associatedwithour conversion.For measurement are reflected in the yearendedDecember 31,2020,wequalifiedunderInternalRevenueService26U.S.Code§448,Limitationonuseofcashmethodofaccountingasacashbasistaxpayerbasedonouroutstandingsharesofcommonstockbeingatleast95%employee-ownedwithatleast95%ofourgrossrevenuederivedfromengineeringandconsultingservices.Assuch,wecalculateourcurrenttaxexpenseonacashbasisandaccruefuturetaxexpensesresultingfromassociatedtimingdifferencesasdeferredtaxliabilities. Uponperiod in which the effectivedate of our initialpublic offering, weno longer qualified asa cash basis taxpayerand will besubject to a four-yearconversion paymentofour deferredtaxliability subjecttoSection 7.03(1)ofRev. Proc.2015-13.
change in judgment occurs.
Common Shares Subject to Repurchase Classified as a Liability and Redeemable Common Stock Classified as Temporary Equity
In February 2001, our shareholders entered into a shareholders’ Buy-Sell Agreement and subsequent Amendments. In addition, certain shareholders have entered into individual addenda to the shareholders’ Buy-Sell Agreement to establish superseding share-based rights (the “Addenda” and collectively with the Buy-Sell Agreement and the Amendments, the “Shareholders’ Buy-Sell Agreement”). Prior to our initial public offering on May 6, 2021, all current shareholders were a party to the Shareholders’ Buy-Sell Agreement, which included certain rights and protections with respect to transactions in our stock in the event
As a result, we recorded a stock repurchase liability and temporary equity associated with certain provisions of the Shareholders’ Buy-Sell Agreement and Stock Bonus Agreements whereby we would be obligated to repurchase stock from certain shareholders upon death, disability, retirement, or termination of employment. Accounting Standards Codification Topic 718 Stock CompensationContent
43
Changes in the periodic measurement of the fair value of the liability related to common shares subject to redemption pursuant to ASC Topic 718 are compensation costs. Changes in the periodic measurement of the fair value of the temporary equity pursuant to ASC Topic 480 reduce retained earnings or accumulated deficit, but do not appear as an expense on the income statement.
On December 22, 2020, in connection with the preparation for our initial public offering, we executed the Fourth Amendment to our Buy-Sell Agreement which modified the repurchase features resulting in the classification of certain of our shares as temporary equity and liabilities. At the same time, we modified certain Stock Bonus Agreements to eliminate superseding repurchase features causing the classification of those shares as liabilities independent of the Shareholders’ Buy-Sell Agreement. The shareholders terminated the Shareholders’ Buy-Sell Agreement and amended additional Stock Bonus Agreements on May 6, 2021.
|
| For The Year Ended December 31, |
| |||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
| ||||||||||||||||||||||||
For The Year Ended December 31, | For The Year Ended December 31, | |||||||||||||||||||||||||||||
2023 | 2023 | 2022 | ||||||||||||||||||||||||||||
Gross contract revenue |
| $ | 149,970 |
|
| $ | 122,020 |
| ||||||||||||||||||||||
Contract costs (exclusive of depreciation and amortization) |
|
| 74,532 |
|
|
| 66,512 |
| ||||||||||||||||||||||
Operating expense |
|
| 75,278 |
|
|
| 53,639 |
| ||||||||||||||||||||||
Income from operations |
|
| 160 |
|
|
| 1,869 |
| ||||||||||||||||||||||
Other (income) expense |
|
| 1,440 |
|
|
| (110 | ) | ||||||||||||||||||||||
Income tax expense (benefit) |
|
| (1,579 | ) |
|
| 989 |
| ||||||||||||||||||||||
Net income |
| $ | 299 |
|
| $ | 990 |
| ||||||||||||||||||||||
(Loss) Income from operations | ||||||||||||||||||||||||||||||
Other expense | ||||||||||||||||||||||||||||||
Income tax benefit | ||||||||||||||||||||||||||||||
Net (loss) income | ||||||||||||||||||||||||||||||
Net margin |
|
| 0.2 | % |
|
| 0.8 | % | Net margin | (1.9) | % | 1.9 | % | |||||||||||||||||
Other financial information 1 |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Net service billing |
| $ | 134,854 |
|
| $ | 103,660 |
| ||||||||||||||||||||||
Net service billing | ||||||||||||||||||||||||||||||
Net service billing | ||||||||||||||||||||||||||||||
Adjusted EBITDA |
|
| 16,485 |
|
|
| 13,888 |
| ||||||||||||||||||||||
Adjusted EBITA margin, net |
|
| 12.2 | % |
|
| 13.4 | % | Adjusted EBITA margin, net | 15.5 | % | 14.5 | % |
| 1 Represents non-GAAP financial measures. See Other Financial Information and Non-GAAP key performance indicators below in results of operations. |
2022
| For the Year Ended December 31, |
|
|
|
|
|
|
|
|
| For the Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Gross Contract Revenue | 2021 |
|
| %GCR |
|
| 2020 |
|
| %GCR |
|
| Change |
|
| % Change |
| Consolidated Gross Contract Revenue | 2023 | %GCR | 2022 | %GCR | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Building Infrastructure 1 | $ | 105,242 |
|
|
| 70.2 | % |
| $ | 76,873 |
|
|
| 63.0 | % |
| $ | 28,369 |
|
|
| 36.9 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Building Infrastructure | Building Infrastructure | $ | 194,867 | 56.3 | % | $ | 170,431 | 65.1 | % | $ | 24,436 | 14.3 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transportation |
| 16,537 |
|
|
| 11.0 | % |
|
| 19,157 |
|
|
| 15.7 | % |
|
| (2,620 | ) |
|
| (13.7 | %) | Transportation | 72,829 | 21.0 | 21.0 | % | 44,846 | 17.1 | 17.1 | % | 27,983 | 62.4 | 62.4 | % | ||||||||||||||||||||||||||||||||||||||||
Power & Utilities |
| 22,525 |
|
|
| 15.0 | % |
|
| 20,377 |
|
|
| 16.7 | % |
|
| 2,148 |
|
|
| 10.5 | % | Power & Utilities | 64,156 | 18.5 | 18.5 | % | 32,672 | 12.5 | 12.5 | % | 31,484 | 96.4 | 96.4 | % | ||||||||||||||||||||||||||||||||||||||||
Other emerging markets 2 |
| 5,666 |
|
|
| 3.8 | % |
|
| 5,613 |
|
|
| 4.6 | % |
|
| 53 |
|
|
| 0.9 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other emerging markets1 | Other emerging markets1 | 14,404 | 4.2 | % | 13,765 | 5.3 | % | 639 | 4.6 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total: | $ | 149,970 |
|
|
| 100.0 | % |
| $ | 122,020 |
|
|
| 100.0 | % |
| $ | 27,950 |
|
|
| 22.9 | % | Total: | $ | 346,256 | 100.0 | 100.0 | % | $ | 261,714 | 100.0 | 100.0 | % | $ | 84,542 | 32.3 | 32.3 | % | |||||||||||||||||||||||||||||||||||||
Organic | $ | 138,136 |
|
|
| 92.1 | % |
| $ | 122,020 |
|
|
| 100.0 | % |
| $ | 16,116 |
|
|
| 13.2 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquired |
| 11,834 |
|
|
| 7.9 | % |
|
| - |
|
|
| 0.0 | % |
|
| 11,834 |
|
|
| 100.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Organic | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organic | $ | 315,759 | 91.2 | % | $ | 261,714 | 100.0 | % | $ | 54,045 | 20.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquired2 | Acquired2 | 30,497 | 8.8 | % | - | n/a | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total: | Total: | $ | 346,256 | 100.0 | % | $ | 261,714 | 100.0 | % | $ | 54,045 | 32.3 | % |
|
|
44
|
|
services and maintain a positive outlook on this market as we continue to experience strength in markets including data centers, quick serve restaurants, industrial distribution facilities, schools, and build-for-rent communities.
various emerging market services.
Direct payroll costs increased $11.3 million or 23.5%2023, as compared to $59.4$100.1 million for the year ended December 31, 2021, as compared2022 due to $48.1 million for the year ended December 31, 2020. Directincreased staffing resulting from acquisitions and organic growth. Total direct payroll accounted for 79.7%75.2% of total contract costs for the year ended December 31, 2021, an increase2023, a decrease of 7.33.9 percentage points as compared to 72.4%79.1% for the year ended December 31, 2020.
2022.
Labor costs not charged directly to customer contracts is considered indirect time and is treated as selling, general and administrative expense.
45
the overall labor pool.
gross contract revenue.
2022.
our employees is a competitive advantage for attracting and retaining labor.
Income from Operations
Income from operations decreased $1.7increased $0.3 million or 89.5%300% to $0.2$0.4 million for the year ended December 31, 20212023, as compared to $1.9$0.1 million for the year ended December 31, 2020. The decrease in income2022.
Other (Income) Expense
Other (income) expense decreased by $1.5increased $5.8 million to $1.4($0.7) million for the year ended December 31, 2023 as compared to $5.1 million for the year ended December 31, 2022 due to reduced revenue resulting from a seasonally affected reduction
Income Tax Expense (Benefit)
Income tax expense (benefit) for the year ended December 31, 2021 increased $2.6 million or 260.0% to $1.6 million benefit, as compared to $1.0 million expense for the year ended December 31, 2020.2022. Interest expense increased by $2.9 million. This increase is primarily attributable to increases in finance leases and acquisitions.
Income
46
2022.
|
| For The Year Ended December 31, |
| |||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
| ||||||||||||||||||||||||
For The Year Ended December 31, | For The Year Ended December 31, | |||||||||||||||||||||||||||||
2023 | 2023 | 2022 | ||||||||||||||||||||||||||||
Gross revenue |
| $ | 149,970 |
|
| $ | 122,020 |
| ||||||||||||||||||||||
Less: sub-consultants and other direct expenses |
|
| 15,116 |
|
|
| 18,360 |
| ||||||||||||||||||||||
Net services billing |
| $ | 134,854 |
|
| $ | 103,660 |
|
|
|
| For The Year Ended December 31, |
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||
For The Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||
Net Service Billing | Net Service Billing | $ | 303,994 | $ | 235,204 | $ | 68,790 | 29.2 | % | |||||||||||||||||||||||||||||||||||||||||||
|
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| % Change |
| |||||||||||||||||||||||||||||||||||||||
Net Income |
|
| $ | 299 |
|
| $ | 990 |
|
| $ | (691 | ) |
|
| (69.8 | %) | |||||||||||||||||||||||||||||||||||
Net (Loss) Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (Loss) Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (Loss) Income | $ | (6,624) | $ | 5,005 | $ | (11,629) | (232.3 | %) | ||||||||||||||||||||||||||||||||||||||||||||
+ interest expense |
|
|
| 918 |
|
|
| 565 |
|
|
| 353 |
|
|
| 62.4 | % | + interest expense | 5,340 | 2,457 | 2,457 | 2,883 | 2,883 | 117.3 | 117.3 | % | ||||||||||||||||||||||||||
+ depreciation & amortization |
|
|
| 6,371 |
|
|
| 2,277 |
|
|
| 4,094 |
|
|
| 179.8 | % | + depreciation & amortization | 18,723 | 12,251 | 12,251 | 6,472 | 6,472 | 52.8 | 52.8 | % | ||||||||||||||||||||||||||
+ tax expense |
|
|
| (1,579 | ) |
|
| 989 |
|
|
| (2,568 | ) |
|
| (259.6 | %) | |||||||||||||||||||||||||||||||||||
+ tax benefit | + tax benefit | 177 | (3,269) | 3,446 | (105.4 | %) | ||||||||||||||||||||||||||||||||||||||||||||||
EBITDA |
|
| $ | 6,009 |
|
| $ | 4,821 |
|
| $ | 1,188 |
|
|
| 24.6 | % | EBITDA | $ | 17,616 | $ | $ | 16,444 | $ | $ | 1,172 | 7.1 | 7.1 | % | |||||||||||||||||||||||
+ non-reoccuring operating lease rent |
|
|
| - |
|
|
| 2,521 |
|
|
| (2,521 | ) |
|
| (100.0 | %) | |||||||||||||||||||||||||||||||||||
+ non-cash stock compensation |
|
|
| 8,217 |
|
|
| 5,085 |
|
|
| 3,132 |
|
|
| 61.6 | % | + non-cash stock compensation | 24,984 | 15,409 | 15,409 | 9,575 | 9,575 | 62.1 | 62.1 | % | ||||||||||||||||||||||||||
+ transaction related expenses |
|
|
| 1,555 |
|
|
| - |
|
|
| 1,555 |
|
|
| 100.0 | % | |||||||||||||||||||||||||||||||||||
+ settlements and other non-core expenses |
|
|
| - |
|
|
| 1,461 |
|
|
| (1,461 | ) |
|
| (100.0 | %) | + settlements and other non-core expenses | 1,170 | 654 | 654 | 516 | 516 | 78.9 | 78.9 | % | ||||||||||||||||||||||||||
+ acquisition expenses |
|
|
| 704 |
|
|
| - |
|
|
| 704 |
|
|
| 100.0 | % | + acquisition expenses | 3,261 | 1,515 | 1,515 | 1,746 | 1,746 | 115.2 | 115.2 | % | ||||||||||||||||||||||||||
Adjusted EBITDA |
|
| $ | 16,485 |
|
| $ | 13,888 |
|
| $ | 2,597 |
|
|
| 18.7 | % | Adjusted EBITDA | $ | 47,031 | $ | $ | 34,022 | $ | $ | 13,009 | 38.2 | 38.2 | % | |||||||||||||||||||||||
Adjusted EBITDA margin, net |
|
|
| 12.2 | % |
|
| 13.4 | % |
|
|
|
|
|
|
|
| Adjusted EBITDA margin, net | 15.5 | % | 14.5 | % |
47
lost revenue, margin would have been significantly higher had we not experienced the seasonally affected reduction to utilization.
| ||||
|
|
| ||
|
|
| ||
|
|
| ||
|
|
|
December 31, 2023 | December 31, 2022 | |||||||
Building Infrastructure | 54.7 | % | 51.2 | % | ||||
Transportation | 24.2 | % | 30.6 | % | ||||
Power & Utilities | 17.4 | % | 13.4 | % | ||||
Other Emerging Markets | 3.7 | % | 4.8 | % |
As of December 31, 2021, we had net backlog of approximately $145 million representing 86.5% of gross backlog. Net backlog is our gross backlog exclusive of subconsultant costs and other direct expenses. Our net backlog at December 31, 2021 was comprised as follows:
| ||||
|
|
| ||
|
|
| ||
|
|
| ||
|
|
| ||
|
To the extent we experience any potential liquidity or capital shortfalls relating to growth and acquisition, we currently expect to rely on debt financing to meet those shortfalls. We use our equity as a component of consideration in acquisitions. In addition, depending on market conditions, we may opportunistically access the public debt and equity markets.
The recent COVID-19 pandemic has not had a material impact on our capital expenditures for the years ended December 31, 2021 and 2020. While we are not a capital-intensive business, we generally budget for capital spending of approximately 2-3% of gross revenue per year for IT and geomatics equipment, tenant improvements and vehicles.
|
| For The Year Ended December 31, |
| |||||||||||||||||||||||||||
For The Year Ended December 31, | For The Year Ended December 31, | |||||||||||||||||||||||||||||
Consolidated Statement of Cash Flows (amounts in thousands) |
| 2021 |
|
| 2020 |
| Consolidated Statement of Cash Flows (amounts in thousands) | 2023 | 2022 | |||||||||||||||||||||
Net cash provided by (used in) operating activities |
| $ | 4,717 |
|
| $ | 10,770 |
| ||||||||||||||||||||||
Net cash provided by (used in) investing activities |
|
| (21,534 | ) |
|
| (2,414 | ) | ||||||||||||||||||||||
Net cash provided by (used in) financing activities |
|
| 37,050 |
|
|
| (8,479 | ) | ||||||||||||||||||||||
Net cash provided by operating activities | ||||||||||||||||||||||||||||||
Net cash used in investing activities | ||||||||||||||||||||||||||||||
Net cash provided by financing activities | ||||||||||||||||||||||||||||||
Change in cash and cash equivalents |
|
| 20,233 |
|
|
| (123 | ) | ||||||||||||||||||||||
Cash and cash equivalents, end of period |
|
| 20,619 |
|
|
| 386 |
|
48
expenses, inclusive of a long-term accrual relating to an uncertain tax position with respect to the capitalization of research and development expenses.
development expenses.
property and equipment.
credit.
Line
On December 31, 2021,2023, we maintained a $17.0$70.0 million revolving credit facility (the “Revolving Credit Facility”) and two non-revolving credit facilities (“Fixed Line 1” and “Fixed Line 2”) pursuant to an Amended and Restated Credit Agreement (collectively with the Revolving Credit Facility, as amended and restated the “Credit Agreement”) with Bank of America, our primary lender.
In2017,weenteredintoacreditagreement(theCreditAgreement)withBankofAmerica(theBank)whichincludedarevolvinglineofcredit(theRevolvingLine)andanon-revolvinglineofcredit(theFixedLine#1).TheRevolvingLineallowedforrepaymentsandre-borrowings.Themaximumadvancewasequaltothelesserof$12.4$70 million,(theCreditLimit)ortheBorrowingBaseasdefinedintheCreditAgreement.TheBorrowingBaseiscomputedbaseduponapercentageofeligiblereceivableswithineachagingcategoryunder120daysandisfurtherrefinedforcustomertype. Receivables in excess of 120 days and those from related parties or affiliates are not eligible receivables for secured by all the Borrowing Base.
DuringtheyearendedDecember31,2019,theCreditLimitincreasedto$15.0millionandthematuritydateextendedtoJuly31,2021.DuringtheyearendedDecember31,2019,asecondnon-revolvinglineofcreditwasestablished(FixedLine#2).DuringtheyearendedDecember31,2020,thecredit limitincreased to$17.0 millionandwe enteredinto anadditionalcredit agreementwith BankofAmerica (Facility#4). Bothofthese creditagreements contain certain financialcovenants with which wewere in compliance atDecember 31, 2021 and2020.
The RevolvingLinerequiresmonthlypaymentsof interestattheLondonInterbankOfferedRate (LIBOR)dailyfloatingrate,plusanapplicableratewhichvariesbetween2.35%and2.95%basedontheCompanyachievingcertainleverageratiosasdefinedintheCreditAgreement.OnDecember31,2021andDecember31,2020,theinterestratewas3.25%and3.60%,respectively.Alloutstandingprincipalisdueuponexpiration, whichisJuly31,2023unlesstheagreementisrenewed,oraneventofdefaultoccurs.TheRevolvingLineappearsaslineofcreditonourcombinedand condensed consolidated balance sheets.
OnJuly30,2021,weenteredintoaSixthAmendmenttotheCreditAgreementwherebythematuritydateoftheRevolvingLinewasextendedtoJuly31,2023.TheSixthAmendmenteliminatedtheadjusteddebttoEBITDAcovenantalongwithcertain
49
administrativerequirementsandestablishedtheSecuredOvernightFinancingRate(SOFR)asthefuturereplacementforLIBOR.AdditionalmodificationstotheRevolvingLineincludedexpandedallowances foracquisition andreduced interestrate spreads,among otherthings.
FixedLine#1hasamaximumadvanceof$1.0million,doesnotallowforre-borrowings,andisincludedinnotespayable.BeginningOctober1,2017,theCompanybeganpayinginterestonamonthlybasisatarateperyearequaltoLIBORplus2.75%.OnDecember31,2021andDecember31,2020, theinterest ratewas 2.85%and 2.91%,respectively.CommencingAugust 31,2018,we beganpaying theoutstanding principalbalance insixtyequalmonthlyinstallmentsthroughmaturityinAugust2023.OnDecember31,2021andDecember31,2020,theoutstandingbalanceonFixedLine#1was$0.3 million and $0.5 million, respectively.
Fixed Line #2 has a maximum advance of $1.0 million, does not allow for re-borrowings and is included in notes payable. As of the year ended December 31, 2019 the company had not yet drawn on this line. Beginning April 1, 2020, we began paying interest monthly at a rate per year equal to LIBOR plus 2.00%. On December 31, 2021 and December 31, 2020, the interest rate was 2.10% and 2.20%. Commencing the earlier of i) the date no remaining amount is available under the Fixed Line or, ii) August 31, 2020, we were obligated to pay the then outstanding principal balance in sixty equal monthly installments through maturity in September 2025. On December 31, 2021 and 2020, the outstanding balance on Fixed Line #2 was $0.7 million and $0.9 million, respectively.
Facility #4 is a term loan with a principal loan amount of $1.0 million and included in notes payable. The loan is repaid over thirty-six months beginning April 13, 2020 through maturity on March 13, 2023. The payments consist of principal and interest in equal combined installments of $29,294. The interest rate on this loan is 3.49%. On December 31, 2021 and 2020, the outstanding balance on Facility #4 was $0.4 million and $0.8 million, respectively.
We secure our obligations under the Credit Agreement with substantially all our assets and those of our subsidiaries. Our obligations to certain other stockholders of the Company are subordinateand the subsidiary guarantors and extended the maturity date of the Revolving Credit Facility to our obligations under theJuly 31, 2025.
Interest expense on the Revolving and Fixed Lines totaled $0.1 million and $0.3 million during the years ended December 31, 2021 and 2020. As of December 31, 2021, we did not have a balance on this revolving line of credit as we used a portion of the net proceeds from our initial public offering to satisfy this obligation.
Lease Facilities
On September 30, 2020, we converted our Huntington and Enterprise operating leases to capital leases and recorded the associated equipment purchases and capital lease liability, current and non-current. The payment terms on the lease agreements range between 30 and 50 months with payments totaling approximately $0.5$0.6 million per month. We use anutilize a third party valuation specialist to formulate the incremental borrowing on our revolving line of creditrates for the Company, to calculate the present value on new leases.
50
As a smaller reporting company,
Effective September 9, 2020, in preparation for our initial public offering, our board of directors approved the engagement of Ernst & Young LLP(the“NewAuditor”)asourindependentregisteredpublicaccountingfirmanddismissedDixonHughesGoodmanLLP(the“FormerAuditor”).
ThereportoftheFormerAuditoronourcombinedandconsolidatedfinancialstatementsforthefiscalyearendedDecember31,2019didnotcontainanadverseopinionoradisclaimerofopinionandwerenotqualifiedormodifiedastouncertainty,auditscope,oraccountingprinciples.
DuringthefiscalyearendedDecember31,2020andthesubsequentinterimperiodthroughSeptember9,2020therewere(i)no“disagreements”(asthattermisdefinedinItem304(a)(1)(iv)ofRegulationS-Kandtherelatedinstructions)betweenusandtheFormerAuditoronanymatterofaccounting principlesor practices,financialstatement disclosure,or auditingscopeor procedure,whichdisagreements, ifnotresolvedtothe satisfactionoftheFormerAuditor,wouldhavecausedtheFormerAuditortomakereferencetothesubjectmatterofthedisagreementinitsreportsonourfinancialstatementsand(ii)no“reportableevents”(asthattermisdefinedinItem304(a)(1)(v)ofRegulationS-Kandtherelatedinstructions).
WerequestedtheFormerAuditortofurnishuswithaletteraddressedtotheSecuritiesandExchangeCommissionstatingwhetheritagreeswith the above statements.Acopy that letter isfiled as Exhibit 16 to this report. During the fiscal year ended December 31, 2019 and the subsequent interim period through September 9, 2020 neither we, nor anyone on our behalf, consulted the New Auditor regarding (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our combined and condensed consolidated financial statements, and neither a written report or oral advice was provided to us by the New Auditor that the New Auditor concluded was an important factor considered by us in reaching a decision as to any accounting, auditing or financial reporting issue or (ii) any matter that was the subject of a “disagreement” (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a “reportable event” (as that term is defined in Item 304(a)(1)(v) of Regulation S-K).
This Annual Report does not include a report of management’s assessment regarding
51
policies or procedures may deteriorate.
None
52
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54
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31.1* | ||||||||
31.2* | ||||||||
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97* | ||||||||
101.INS | Inline XBRL Instance Document | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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55
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) |
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VA
12, 2024
December 31, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Current Assets | |||||||||||
Cash and equivalents | $ | 20,687 | $ | 13,282 | |||||||
Accounts receivable, net | 87,565 | 64,443 | |||||||||
Contract assets | 33,520 | 16,321 | |||||||||
Notes receivable - officers, employees, affiliates, current portion | 1,199 | 1,016 | |||||||||
Prepaid and other current assets | 11,806 | 7,068 | |||||||||
Total current assets | 154,777 | 102,130 | |||||||||
Non-Current Assets | |||||||||||
Property and equipment, net | 27,601 | 25,104 | |||||||||
Operating lease, right-of-use assets | 40,743 | 30,264 | |||||||||
Goodwill | 96,393 | 53,210 | |||||||||
Notes receivable | 903 | 903 | |||||||||
Notes receivable - officers, employees, affiliates, less current portion | 1,119 | 1,417 | |||||||||
Other intangible assets, net | 46,294 | 27,950 | |||||||||
Deferred tax asset, net | 33,780 | 13,759 | |||||||||
Other assets | 1,175 | 1,020 | |||||||||
Total Assets | $ | 402,785 | $ | 255,757 | |||||||
LIABILITIES AND EQUITY | |||||||||||
Current Liabilities | |||||||||||
Bank line of credit | 45,290 | – | |||||||||
Accounts payable and accrued liabilities, current portion | 44,394 | 40,293 | |||||||||
Contract liabilities | 7,481 | 6,370 | |||||||||
Notes payable, current portion | 13,989 | 10,168 | |||||||||
Operating lease obligation, less current portion | 9,016 | 6,949 | |||||||||
Finance lease obligation, current portion | 6,586 | 5,297 | |||||||||
Total current liabilities | 126,756 | 69,077 | |||||||||
Non-Current Liabilities | |||||||||||
Other non-current obligations | 42,288 | 356 | |||||||||
Notes payable, less current portion | 13,738 | 16,276 | |||||||||
Operating lease obligation, less current portion | 37,660 | 28,087 | |||||||||
Finance lease obligation, less current portion | 14,408 | 14,254 | |||||||||
Pension and post-retirement obligation, less current portion | 4,654 | 4,848 | |||||||||
Total liabilities | $ | 239,504 | $ | 132,898 | |||||||
Shareholders' Equity | |||||||||||
Preferred Stock, $0.01 par value; 5,000,000 shares authorized, no shares issued and outstanding as of December 31, 2023 and 2022 | – | – | |||||||||
Common stock, $0.01 par value; 30,000,000 shares authorized as of December 31, 2023 and 2022; 17,694,495 shares issued and 15,094,278 outstanding, and 15,949,805 shares issued and 13,556,550 outstanding as of December 31, 2023 and 2022, respectively | 177 | 159 | |||||||||
Additional paid-in-capital | 215,420 | 162,922 | |||||||||
Accumulated other comprehensive income | 590 | 578 | |||||||||
Treasury stock, at cost; 2,600,217 and 2,393,255, respectively | (26,410) | (20,831) | |||||||||
Stock subscription notes receivable | (76) | (173) | |||||||||
Accumulated deficit | (26,420) | (19,796) | |||||||||
Total shareholders' equity | $ | 163,281 | $ | 122,859 | |||||||
TOTAL LIABILITIES AND EQUITY | $ | 402,785 | $ | 255,757 |
|
| December 31, 2021 |
|
| December 31, 2020 |
| ||
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
Cash and equivalents |
| $ | 20,619 |
|
| $ | 386 |
|
Accounts receivable, net |
|
| 38,491 |
|
|
| 24,183 |
|
Contract assets |
|
| 9,189 |
|
|
| 7,080 |
|
Notes receivable - officers, employees, affiliates, current portion |
|
| 1,260 |
|
|
| 1,182 |
|
Prepaid and other current assets |
|
| 4,850 |
|
|
| 2,271 |
|
Total current assets |
|
| 74,409 |
|
|
| 35,102 |
|
Non-Current Assets |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
| 20,202 |
|
|
| 15,357 |
|
Goodwill |
|
| 28,471 |
|
|
| 9,179 |
|
Notes receivable |
|
| 903 |
|
|
| 903 |
|
Notes receivable - officers, employees, affiliates, less current portion |
|
| 1,218 |
|
|
| 1,297 |
|
Other intangible assets, net |
|
| 12,286 |
|
|
| 1,131 |
|
Other assets |
|
| 681 |
|
|
| 669 |
|
Total Assets |
| $ | 138,170 |
|
| $ | 63,638 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
Bank line of credit |
|
| — |
|
|
| 3,481 |
|
Accounts payable and accrued liabilities, current portion |
|
| 17,921 |
|
|
| 12,203 |
|
Contract liabilities |
|
| 4,623 |
|
|
| 1,943 |
|
Notes payable, current portion |
|
| 4,450 |
|
|
| 1,592 |
|
Deferred rent, current portion |
|
| 724 |
|
|
| 619 |
|
Capital lease obligation, current portion |
|
| 5,136 |
|
|
| 3,495 |
|
Total current liabilities |
|
| 32,854 |
|
|
| 23,333 |
|
Non-Current Liabilities |
|
|
|
|
|
|
|
|
Other non-current obligations |
|
| - |
|
|
| 1,244 |
|
Notes payable, less current portion |
|
| 8,407 |
|
|
| 2,829 |
|
Deferred rent, less current portion |
|
| 4,179 |
|
|
| 4,278 |
|
Capital lease obligation, less current portion |
|
| 10,020 |
|
|
| 7,503 |
|
Deferred tax liability, net |
|
| 4,290 |
|
|
| 6,472 |
|
Common shares subject to repurchase |
|
| 7 |
|
|
| 842 |
|
Total liabilities |
| $ | 59,757 |
|
| $ | 46,501 |
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity |
|
|
|
|
|
|
|
|
Preferred Stock, $0.01 par value; 5,000,000 shares authorized, 0 shares issued and outstanding |
|
| — |
|
|
| — |
|
Common stock, $0.01 par value; 30,000,000 shares authorized; 13,690,868 shares issued and 11,489,579 outstanding, and 7,840,244 shares issued and 5,744,594 outstanding, respectively |
|
| 137 |
|
|
| 2 |
|
Additional paid-in-capital |
|
| 120,842 |
|
|
| 58,866 |
|
Treasury stock, at cost; 2,201,289 and 2,095,650, respectively |
|
| (17,488 | ) |
|
| (16,022 | ) |
Stock subscription notes receivable |
|
| (277 | ) |
|
| (609 | ) |
Accumulated deficit |
|
| (24,801 | ) |
|
| (25,100 | ) |
Total shareholders' equity |
| $ | 78,413 |
|
| $ | 17,137 |
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY |
| $ | 138,170 |
|
| $ | 63,638 |
|
The accompanying notes are an integral part of these consolidated financial statements.
|
| For the Year Ended December 31, |
| |||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
| ||||||||||||||||||||||||
For the Year Ended December 31, | For the Year Ended December 31, | |||||||||||||||||||||||||||||
2023 | 2023 | 2022 | ||||||||||||||||||||||||||||
Gross Contract Revenue |
| $ | 149,970 |
|
| $ | 122,020 |
| ||||||||||||||||||||||
Contract costs: (exclusive of depreciation and amortization below) |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Direct payroll costs | ||||||||||||||||||||||||||||||
Direct payroll costs | ||||||||||||||||||||||||||||||
Direct payroll costs |
|
| 59,416 |
|
|
| 48,152 |
| ||||||||||||||||||||||
Sub-consultants and expenses |
|
| 15,116 |
|
|
| 18,360 |
| ||||||||||||||||||||||
Total contract costs |
|
| 74,532 |
|
|
| 66,512 |
| ||||||||||||||||||||||
Operating Expenses: |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Selling, general and administrative |
|
| 69,029 |
|
|
| 51,469 |
| ||||||||||||||||||||||
Selling, general and administrative | ||||||||||||||||||||||||||||||
Selling, general and administrative | ||||||||||||||||||||||||||||||
Depreciation and amortization |
|
| 6,371 |
|
|
| 2,277 |
| ||||||||||||||||||||||
(Gain) on sale |
|
| (122 | ) |
|
| (107 | ) | ||||||||||||||||||||||
Gain on sale | ||||||||||||||||||||||||||||||
Total operating expenses |
|
| 75,278 |
|
|
| 53,639 |
| ||||||||||||||||||||||
Income from operations |
|
| 160 |
|
|
| 1,869 |
| ||||||||||||||||||||||
Other (income) expense |
|
| 1,440 |
|
|
| (110 | ) | ||||||||||||||||||||||
Income (loss) before tax expense |
|
| (1,280 | ) |
|
| 1,979 |
| ||||||||||||||||||||||
Income tax (benefit) expense |
|
| (1,579 | ) |
|
| 989 |
| ||||||||||||||||||||||
Net income |
| $ | 299 |
|
| $ | 990 |
| ||||||||||||||||||||||
(Loss) Income from operations | ||||||||||||||||||||||||||||||
Other expense | ||||||||||||||||||||||||||||||
(Loss) Income before tax expense | ||||||||||||||||||||||||||||||
Income tax (benefit) | ||||||||||||||||||||||||||||||
Net (loss) income | ||||||||||||||||||||||||||||||
Earnings allocated to non-vested shares |
|
| 56 |
|
|
| 55 |
| ||||||||||||||||||||||
Net income attributable to common shareholders |
| $ | 243 |
|
| $ | 935 |
| ||||||||||||||||||||||
Earnings per share |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Net (loss) income attributable to common shareholders | ||||||||||||||||||||||||||||||
(Loss) Earnings per share | ||||||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||||||
Basic |
| $ | 0.03 |
|
| $ | 0.17 |
| ||||||||||||||||||||||
Diluted |
| $ | 0.03 |
|
| $ | 0.17 |
| ||||||||||||||||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Basic |
|
| 7,525,206 |
|
|
| 5,399,356 |
| ||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||||||
Basic | 12,490,914 | 10,887,620 | ||||||||||||||||||||||||||||
Diluted |
|
| 7,635,615 |
|
|
| 5,412,218 |
| Diluted | 12,490,914 | 11,683,758 |
For The Years Ended December 31, 2021 and 2020
COMPREHENSIVE (LOSS) INCOME
|
| Common Stock |
|
| Additional Paid-in |
|
| Treasury Stock |
|
| Stock Subscription Notes |
|
| Accumulated |
|
| Total Shareholders' Equity |
| ||||||||||||||
|
| Shares |
|
| Amount |
|
| Capital |
|
| Shares |
|
| Amount |
|
| Receivable |
|
| Deficit |
|
| (Deficit) |
| ||||||||
Balance at January 1, 2020 |
|
| 7,052,064 |
|
| $ | - |
|
| $ | - |
|
|
| (1,248,352 | ) |
| $ | (5,925 | ) |
| $ | - |
|
| $ | (17,358 | ) |
| $ | (23,283 | ) |
Issuance of new common shares |
|
| 133,458 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (533 | ) |
|
| - |
|
|
| (533 | ) |
Purchase of treasury stock |
|
| (2,951 | ) |
|
| - |
|
|
| - |
|
|
| (847,298 | ) |
|
| (10,097 | ) |
|
| - |
|
|
| - |
|
|
| (10,097 | ) |
Issuance of new common shares under stock compensation plan |
|
| 657,673 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Collection on stock subscription notes receivable |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 234 |
|
|
| - |
|
|
| 234 |
|
Reclassification of common shares previously subject to repurchase liability |
|
| - |
|
|
| - |
|
|
| 11,808 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 814 |
|
|
| 12,622 |
|
Conversion of redeemable common stock to permanent equity |
|
| - |
|
|
| 2 |
|
|
| 47,058 |
|
|
| - |
|
|
| - |
|
|
| (310 | ) |
|
| (9,546 | ) |
|
| 37,204 |
|
Net Income |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 990 |
|
|
| 990 |
|
Balance at December 31, 2020 |
|
| 7,840,244 |
|
| $ | 2 |
|
| $ | 58,866 |
|
|
| (2,095,650 | ) |
| $ | (16,022 | ) |
| $ | (609 | ) |
| $ | (25,100 | ) |
| $ | 17,137 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2021 |
|
| 7,840,244 |
|
| $ | 2 |
|
| $ | 58,866 |
|
|
| (2,095,650 | ) |
| $ | (16,022 | ) |
| $ | (609 | ) |
| $ | (25,100 | ) |
| $ | 17,137 |
|
Issuance of new common shares upon initial public offering |
|
| 3,805,925 |
|
|
| 38 |
|
|
| 47,066 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 47,104 |
|
Issuance of new common shares |
|
| 336,968 |
|
|
| 3 |
|
|
| 5,625 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 5,628 |
|
Purchase of treasury stock |
|
| - |
|
|
| 21 |
|
|
| (21 | ) |
|
| (105,639 | ) |
|
| (1,466 | ) |
|
| - |
|
|
| - |
|
|
| (1,466 | ) |
Issuance of new common shares under stock compensation plan |
|
| 1,671,845 |
|
|
| 22 |
|
|
| (22 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 0 |
|
Issuance of new common shares under employee stock purchase plan |
|
| 35,886 |
|
|
| - |
|
|
| 479 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 479 |
|
Stock based compensation |
|
| - |
|
|
| - |
|
|
| 8,237 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 8,237 |
|
Collections on stock subscription notes receivable |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 332 |
|
|
| - |
|
|
| 332 |
|
Conversion of common shares subject to repurchase liability to permanent equity |
|
| - |
|
|
| 51 |
|
|
| 826 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 877 |
|
Capital reduction related to acquisition |
|
| - |
|
|
| - |
|
|
| (214 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (214 | ) |
Net Income |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 299 |
|
|
| 299 |
|
Balance at December 31, 2021 |
|
| 13,690,868 |
|
| $ | 137 |
|
| $ | 120,842 |
|
|
| (2,201,289 | ) |
| $ | (17,488 | ) |
| $ | (277 | ) |
| $ | (24,801 | ) |
| $ | 78,413 |
|
For the Year Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Net (loss) income | $ | (6,624) | $ | 5,005 | |||||||
Other comprehensive income | |||||||||||
Pension and post-retirement adjustments | 10 | 777 | |||||||||
Other comprehensive income | 10 | 777 | |||||||||
Income tax provision related to items of other comprehensive income | 2 | (199) | |||||||||
Other comprehensive income, net of tax | 12 | 578 | |||||||||
Comprehensive (loss) income, net of tax | $ | (6,612) | $ | 5,583 |
|
| For the Year Ended December 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
Net Income |
| $ | 299 |
|
| $ | 990 |
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
|
|
|
|
|
Depreciation and amortization - property, plant and equipment |
|
| 5,974 |
|
|
| 2,036 |
|
Amortization of intangible assets |
|
| 397 |
|
|
| 241 |
|
Gain on sale of assets |
|
| (122 | ) |
|
| (110 | ) |
Bad debt |
|
| 496 |
|
|
| 3,008 |
|
Stock based compensation |
|
| 8,217 |
|
|
| 5,085 |
|
Deferred taxes |
|
| (2,183 | ) |
|
| 326 |
|
Deferred rent |
|
| 5 |
|
|
| 530 |
|
Changes in operating assets and liabilities |
|
|
|
|
|
|
|
|
Accounts Receivable |
|
| (8,802 | ) |
|
| 1,506 |
|
Contract Assets |
|
| (387 | ) |
|
| 3,028 |
|
Prepaid expenses |
|
| (2,251 | ) |
|
| 623 |
|
Other Assets |
|
| (31 | ) |
|
| (28 | ) |
Accounts payable and accrued expenses |
|
| 3,297 |
|
|
| (520 | ) |
Contract Liabilities |
|
| (192 | ) |
|
| (5,945 | ) |
Net cash provided by operating activities |
|
| 4,717 |
|
|
| 10,770 |
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
| (905 | ) |
|
| (924 | ) |
Proceeds from sale of assets |
|
| 127 |
|
|
| 110 |
|
Amounts advanced under loans to shareholders |
|
| (779 | ) |
|
| (1,207 | ) |
Payments received under loans to shareholders |
|
| 36 |
|
|
| 228 |
|
Amounts advanced under notes receivable |
|
| - |
|
|
| (420 | ) |
Payments received under notes receivable |
|
| - |
|
|
| 19 |
|
Acquisitions of businesses, net of cash acquired |
|
| (20,345 | ) |
|
| (416 | ) |
Collections under stock subscription notes receivable |
|
| 332 |
|
|
| 196 |
|
Net cash used in investing activities |
|
| (21,534 | ) |
|
| (2,414 | ) |
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
Proceeds from initial public offering, net of underwriting discounts and commissions and other offering costs |
|
| 47,104 |
|
|
| - |
|
Net payments under revolving line of credit |
|
| (3,481 | ) |
|
| (4,867 | ) |
Repayments under fixed line of credit |
|
| (722 | ) |
|
| (485 | ) |
Borrowings under fixed line of credit |
|
| - |
|
|
| 1,985 |
|
Repayment under notes payable |
|
| (1,084 | ) |
|
| (1,800 | ) |
Payments on capital leases |
|
| (4,663 | ) |
|
| (1,088 | ) |
Payment of contingent consideration from acquisitions |
|
| (2 | ) |
|
| (106 | ) |
Payment of subsequent common stock offering costs |
|
| (75 | ) |
|
| (920 | ) |
Payments for purchase of treasury stock |
|
| (582 | ) |
|
| (1,261 | ) |
Proceeds from issuance of common stock |
|
| 555 |
|
|
| 63 |
|
Net cash provided by (used in) financing activities |
|
| 37,050 |
|
|
| (8,479 | ) |
Net increase (decrease) in cash and cash equivalents |
|
| 20,233 |
|
|
| (123 | ) |
Cash and cash equivalents, beginning of period |
|
| 386 |
|
|
| 509 |
|
Cash and cash equivalents, end of period |
| $ | 20,619 |
|
| $ | 386 |
|
Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Stock Subscription Notes Receivable | Accumulated Deficit | Total Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2022 | 13,690,868 | $ | 137 | $ | 120,842 | (2,201,289) | $ | (17,488) | $ | - | $ | (277) | $ | (24,801) | $ | 78,413 | |||||||||||||||||||||||||||||||||||||
Issuance of new common shares in common stock offering | 1,057,500 | 11 | 15,464 | - | - | - | - | - | 15,475 | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares | 654,871 | 6 | 10,655 | - | - | - | - | - | 10,661 | ||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | - | - | - | (191,966) | (3,343) | - | - | - | (3,343) | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares under stock compensation plan | 447,518 | 4 | 59 | - | - | - | - | - | 63 | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares under employee stock purchase plan | 99,048 | 1 | 1,377 | - | - | - | - | - | 1,378 | ||||||||||||||||||||||||||||||||||||||||||||
Stock based compensation | - | - | 14,696 | - | - | - | - | - | 14,696 | ||||||||||||||||||||||||||||||||||||||||||||
Collections on stock subscription notes receivable | - | - | - | - | - | - | 104 | - | 104 | ||||||||||||||||||||||||||||||||||||||||||||
Conversion of common shares subject to repurchase liability to permanent equity | - | - | 8 | - | - | - | - | - | 8 | ||||||||||||||||||||||||||||||||||||||||||||
Capital reduction related to acquisitions | - | - | (179) | - | - | - | - | - | (179) | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | - | - | - | - | - | 578 | - | - | 578 | ||||||||||||||||||||||||||||||||||||||||||||
Net Income | - | - | - | - | - | - | - | 5,005 | 5,005 | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | 15,949,805 | $ | 159 | $ | 162,922 | (2,393,255) | $ | (20,831) | $ | 578 | $ | (173) | $ | (19,796) | $ | 122,859 | |||||||||||||||||||||||||||||||||||||
Balance at January 1, 2023 | 15,949,805 | $ | 159 | $ | 162,922 | (2,393,255) | $ | (20,831) | $ | 578 | $ | (173) | $ | (19,796) | $ | 122,859 | |||||||||||||||||||||||||||||||||||||
Issuance of new common shares | 887,591 | 9 | 26,126 | - | - | - | - | - | 26,135 | ||||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | - | - | - | (178,258) | (4,834) | - | - | - | (4,834) | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares under stock compensation plan | 734,042 | 7 | (7) | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
Cancellation of common shares under stock compensation plan | (34,895) | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of new common shares under employee stock purchase plan | 61,948 | 1 | 1,546 | - | - | - | - | - | 1,547 | ||||||||||||||||||||||||||||||||||||||||||||
Stock based compensation | - | - | 23,490 | - | - | - | - | - | 23,490 | ||||||||||||||||||||||||||||||||||||||||||||
Collections on stock subscription notes receivable | - | - | - | - | - | - | 97 | - | 97 | ||||||||||||||||||||||||||||||||||||||||||||
Exercises of conversion feature of convertible note | 96,004 | 1 | 1,343 | - | - | - | - | - | 1,344 | ||||||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock | - | - | - | (28,704) | (745) | - | - | - | (745) | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | - | - | - | - | - | 12 | - | - | 12 | ||||||||||||||||||||||||||||||||||||||||||||
Net Loss | - | - | - | - | - | - | - | (6,624) | (6,624) | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | 17,694,495 | $ | 177 | $ | 215,420 | (2,600,217) | $ | (26,410) | $ | 590 | $ | (76) | $ | (26,420) | $ | 163,281 |
For the Year Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Cash Flows from Operating Activities: | |||||||||||
Net (Loss) Income | $ | (6,624) | $ | 5,005 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||
Depreciation and amortization - property, plant and equipment | 9,732 | 8,363 | |||||||||
Amortization of intangible assets | 8,991 | 3,888 | |||||||||
Gain on sale of assets | (411) | (82) | |||||||||
Credit losses | 515 | 742 | |||||||||
Stock based compensation | 24,738 | 15,097 | |||||||||
Deferred taxes | (25,529) | (18,049) | |||||||||
Accretion of discounts on notes payable | 642 | 258 | |||||||||
Changes in operating assets and liabilities | |||||||||||
Accounts receivable | (13,559) | (13,779) | |||||||||
Contract assets | (10,866) | (4,575) | |||||||||
Prepaid expenses and other assets | 143 | (2,126) | |||||||||
Accounts payable and accrued expenses | 27,728 | 15,802 | |||||||||
Contract liabilities | (3,778) | (1,374) | |||||||||
Net cash provided by operating activities | 11,722 | 9,170 | |||||||||
Cash Flows from Investing Activities: | |||||||||||
Purchases of property and equipment | (2,093) | (902) | |||||||||
Proceeds from sale of assets | 411 | 35 | |||||||||
Amounts advanced under loans to shareholders | - | (5) | |||||||||
Payments received under loans to shareholders | 115 | 49 | |||||||||
Acquisitions of businesses, net of cash acquired | (25,687) | (18,035) | |||||||||
Collections under stock subscription notes receivable | 98 | 104 | |||||||||
Net cash used in investing activities | (27,156) | (18,754) | |||||||||
Cash Flows from Financing Activities: | |||||||||||
Proceeds from common stock offering, net of underwriting discounts and commissions and other offering costs | - | 15,475 | |||||||||
Borrowings under revolving credit facility | 45,290 | - | |||||||||
Repayments under fixed line of credit | (430) | (734) | |||||||||
Repayment under notes payable | (11,237) | (4,595) | |||||||||
Payments on finance leases | (6,782) | (6,027) | |||||||||
Payments for purchase of treasury stock | (4,833) | (3,343) | |||||||||
Repurchases of common stock | (745) | - | |||||||||
Proceeds from issuance of common stock | 1,576 | 1,471 | |||||||||
Net cash provided by financing activities | 22,839 | 2,247 | |||||||||
Net increase (decrease) in cash and cash equivalents | 7,405 | (7,337) | |||||||||
Cash and cash equivalents, beginning of period | 13,282 | 20,619 | |||||||||
Cash and cash equivalents, end of period | $ | 20,687 | $ | 13,282 | |||||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid for interest | $ | 4,212 | $ | 1,896 | |||||||
Cash paid for income taxes | $ | 1,133 | $ | 400 | |||||||
Non-cash investing and financing activities | |||||||||||
Property and equipment acquired under finance lease | $ | (8,246) | $ | (8,118) | |||||||
Note payable converted to common shares | $ | (1,343) | $ | - | |||||||
Issuance of notes payable for acquisitions | $ | (13,650) | $ | (19,089) | |||||||
Issuance of contingent consideration | $ | (10,379) | $ | (487) |
|
| For the Year Ended December 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
|
Cash paid for interest |
| $ | 887 |
|
| $ | 609 |
|
Cash paid for income taxes |
| $ | 1,921 |
|
| $ | 543 |
|
Non-cash investing and financing activities |
|
|
|
|
|
|
|
|
Property and equipment acquired under capital lease |
| $ | (8,877 | ) |
| $ | (11,370 | ) |
Settlement of redeemable common stock |
|
| - |
|
| $ | 36,927 |
|
Stock redemption for exercise of stock option |
| $ | 139 |
|
|
| - |
|
Issuance of common stock for a note receivable |
|
| - |
|
| $ | (533 | ) |
Stock redemption for payment of shareholder loans |
|
| - |
|
| $ | 1,457 |
|
Stock redemption for payment on note receivable |
|
| - |
|
| $ | 6,130 |
|
Issuance of notes payable for purchase of intangible asset |
|
| - |
|
| $ | (165 | ) |
Issuance of notes payable for acquisitions |
| $ | (10,200 | ) |
|
| - |
|
Issuance of notes payable for redemption of stock |
|
| - |
|
| $ | (900 | ) |
|
|
and Basis of Presentation
Initial Public Offering
On May 11, 2021, we closed on our initial public offering (“IPO”),States and one office in which we issued and sold 3,690,000 shares of our common stock at $14.00 per share, resulting in net proceeds of $48.0 million after deducting underwriting discounts and commissions, but before expenses of the IPO.
On June 4, 2021, the underwriters exercised their option to purchase an additional 115,925 shares of the Company’s common stock at the public offering price of $14.00 per share, resulting in additional gross proceeds of approximately $1.6 million. After giving effect to this partial exercise of the overallotment option, the total number of shares sold by Bowman in its initial public offering increased to 3,805,925 shares and gross proceeds increased to approximately $53.3 million. The exercise of the over-allotment option closed on June 8, 2021, at which time the Company received net proceeds of approximately $1.5 million after underwriting discounts and commissions.
Deferred offering costs consist primarily of accounting, legal, and other fees related to our IPO. Prior to the IPO, all deferred offering costs were capitalized within prepaid and other current assets in the consolidated balance sheet. After the IPO, $2.3 million of deferred offering costs were reclassified into shareholder’s equity as a reduction of the IPO proceeds. We capitalized $0.9 million of deferred offering costs within prepaid and other current assets in the consolidated balance sheet as of December 31, 2020.
Mexico.
F-8
2023.
Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contract with Customers (“ASC Topic 606”) provides a single comprehensive revenue recognition framework and supersedes almost all revenue recognition guidance including industry-specific revenue guidance. The Company adopted this standard effective January 1, 2019, the first day of the Company’s fiscal year.
F-9
No single client accounted for more than 10% of the Company's outstanding receivables at December 31, 2023 and 2022.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could vary from the estimates and assumptions that were used.
F-10
and Expected Credit Losses
Computer equipment | 3 to 5 years | |||||
Survey equipment | 2 to 5 years | |||||
Vehicles | 5 years | |||||
Furniture and fixtures | 7 years | |||||
Software | 3 to 5 years | |||||
Leasehold improvements | the lesser of useful life or term of lease |
ASC 842 requires lessees to recognize assets and liabilities for most leases. The Company determines if an arrangement is a lease at contract inception. A lease exists when a contract conveys to the customer the right to control the use of an identified asset for a period of time in exchange for consideration. The definition of a lease embodies two conditions: (1) there is an identified asset in the contract, and (2) the customer has the right to control the use of the identified asset. Lessees are required to classify leases as either finance or operating leases. This classification will determine whether lease expense is recognized based on an
For any equity consideration in a business combination, the Company has valued the equity utilizing the average (mean) closing price of the Company’s common stock on Nasdaq for the twenty (20) trading days prior to closing date, weighted for volume of each trading day.
F-11
goodwill.
Deferred Offering Costs
Upon closing of the planned initial public offering (“IPO”), deferred offering costs, consisting of legal, accounting and other fees directly related to the IPO will net against the gross proceeds. As of December 31, 2020, the Company recorded $0.9 million of deferred offering costs that are included in other assets on the accompanying consolidated balance sheet.
Upon closing of the planned subsequent offering, deferred offering costs, consisting of legal, accounting and other fees directly related to the subsequent offering will net against the gross proceeds. As of December 31, 2021, the Company recorded $0.1 million of deferred offering costs that are included in other assets on the accompanying consolidated balance sheet.
Deferred Rent
The Company recognizes rent expense on a straight-line basis over the term of each operating lease commencing on the date the Company takes possession of the leased premises. In addition, the Company records allowances such as free rent or improvement allowances as deferred rent in the consolidated balance sheets and amortizes the amount on a straight-line basis over the term of the related operating lease.
2022.
On December 22, 2020 and December 31, 2020, the Company modified its stock-based compensation agreements resulting in a change in classification of the majority of these awards from liability to equity. The modification resulted in a final fair value liability measurement and non-cash compensation expense relating to certain of the shares subject to repurchase and the effective exchange of those shares for permanent equity. Certain stock-based awards for which there were no modifications to the terms of repurchase continue remain classified as liabilities with periodic changes in the fair value measurement recognized as non-cash compensation expense.
F-12
Black-Scholes-Merton option-pricing model to determine the grant date fair value of stock options. The Company accounts for forfeitures when they occur.
Redeemable Common Shares
Prior to December 22, 2020, the Company classified shares issued subject to Accounting Standards Codification 480 – Distinguishing Liabilities from Equity (“ASC Topic 480”) as redeemable common stock. Prior to December 22, 2020, provisions existed in the various agreements governing these shares requiring the Company to repurchase the shares based on circumstances outside its control. As such, the Company classified shares of its common stock outstanding prior to December 22, 2020 as redeemable common stock. The Company assessed the fair value of its redeemable common stock at each reporting period. The Company recorded changes in the fair value of the redeemable common as adjustments to retained earnings or accumulated deficit.
On December 22, 2020, the Company modified its agreements resulting in a change in classification from redeemable common stock to permanent equity. The modification resulted in a final fair value measurement of the shares subject to redemption and the effective exchange of those shares for permanent equity.
|
|
•The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to the relatively short duration of these instruments. |
|
|
For the Year Ended | For the Year Ended | ||||||||||
(in thousands) | December 31, 2023 | December 31, 2022 | |||||||||
Balance at beginning of period | $ | 487 | $ | 14 | |||||||
Fair value of contingent consideration issuances | 10,379 | 487 | |||||||||
Change in fair value of contingent consideration | (299) | 437 | |||||||||
Settlement of contingent consideration | – | (451) | |||||||||
Balance at end of period | $ | 10,567 | $ | 487 |
In October 2021, the FASB issued Accounting Standards Update 2021-08, Accounting for Contract Assets and Liabilities from Contracts with Customers, creating an exception to the recognition and measurement principles in ASC 805, Business Combinations. The amendments in this Update require that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers, rather than using fair value. The Company adopted the new standard on a prospective basis effective January 1, 2021, the first day of the Company’s fiscal year. The Company does not expect the impact of this ASU to be material to its consolidated financial statements.
Accounting guidance not yet adopted
In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842) (“ASU 2016-02”) to increase transparency and comparability of accounting for lease transactions by requiring lessees to recognize the right-of-use assets and lease liabilities on the balance sheet and to disclose qualitative and quantitative information about lease transactions and enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The effective date of ASU 2016-02 for the Company is January 1, 2022, with early adoption permitted. The Company is currently evaluating the impact this ASU may have on its consolidated financial statements and related disclosures.
F-14
receivable, loans, and other financial instruments. This standard is effective for the Company beginning January 1, 2023. Adoption of ASU 2016-13 will behas been applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently evaluatingadopted the new guidance starting January 1, 2023. The impact of this ASU on ouris reflected in the consolidated financial statements and related disclosures.
was not material.
the new standard.
and Certain Related Information
For calculating basic earnings per share, for the year ended December 31, 2020, the weighted average number of shares outstanding exclude 268,439 non-vested restricted shares and 53,395 unexercised substantive options. The computation of diluted earnings per share for the year ended December 31, 2021 did not assume the effect of restricted shares or substantive options because the effects were antidilutive.
|
| For the Year Ended December 31, |
| |||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
| ||||||||||||||||||||||||
For the Year Ended December 31, | For the Year Ended December 31, | |||||||||||||||||||||||||||||
2023 | 2023 | 2022 | ||||||||||||||||||||||||||||
Numerator |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Net income |
| $ | 299 |
|
| $ | 990 |
| ||||||||||||||||||||||
Net (loss) income | ||||||||||||||||||||||||||||||
Net (loss) income | ||||||||||||||||||||||||||||||
Net (loss) income | ||||||||||||||||||||||||||||||
Earnings allocated to non-vested shares |
|
| 56 |
|
|
| 55 |
| ||||||||||||||||||||||
Subtotal |
| $ | 243 |
|
| $ | 935 |
| ||||||||||||||||||||||
Denominator |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Weighted average common shares outstanding |
|
| 7,525,206 |
|
|
| 5,399,356 |
| ||||||||||||||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||||||||||
Weighted average common shares outstanding | 12,490,914 | 10,887,620 | ||||||||||||||||||||||||||||
Effect of dilutive nominal options |
|
| - |
|
|
| 5,162 |
| Effect of dilutive nominal options | – | – | |||||||||||||||||||
Effect of dilutive contingently earned shares |
|
| 110,409 |
|
|
| 7,700 |
| Effect of dilutive contingently earned shares | – | 796,138 | |||||||||||||||||||
Dilutive average shares outstanding |
|
| 7,635,615 |
|
|
| 5,412,218 |
| Dilutive average shares outstanding | 12,490,914 | 11,683,758 | |||||||||||||||||||
Basic earnings per share |
| $ | 0.03 |
|
| $ | 0.17 |
| ||||||||||||||||||||||
Dilutive earnings per share |
| $ | 0.03 |
|
| $ | 0.17 |
| ||||||||||||||||||||||
Basic (loss) earnings per share | ||||||||||||||||||||||||||||||
Dilutive (loss) earnings per share |
F-15
4. Acquisitions
Business Combinations
KTA Group Inc. (KTA)
In
Amount Authorized (2022 Repurchase Authorization) | Average Price Per Share1 | Total Shares Held in Treasury | Shares Repurchased | |||||||||||||||||
$ | 10,000,000 | $ | 25.96 | 28,704 | 28,704 |
The acquisition of KTA allows Bowman to add electrical engineering to the group of core competencies thereby allowing the Company to cross sell to, and better serve, its renewable energy customers. In addition, KTA’s mechanical engineers bring the experience and expertise necessary to deliver plans and designs for building ventilation, indoor air quality monitoring and medical-grade air filtration.
The following summarizes the final calculations of the fair values of KTA Group’s assets acquired and liabilities assumed as of the acquisition date (in thousands):
Total Purchase Price |
| $ | 3,447 |
|
Purchase Price Allocation: |
|
|
|
|
Contract assets |
|
| 217 |
|
Property and equipment, net |
|
| 453 |
|
Intangible assets |
|
| 871 |
|
Other assets |
|
| 18 |
|
Accounts payable and accrued liabilities, current portion |
|
| (240 | ) |
Contract liabilities |
|
| (416 | ) |
Total identifiable assets |
| $ | 903 |
|
Goodwill |
|
| 2,544 |
|
Net assets acquired |
| $ | 3,447 |
|
The purchase price allocation has been completed, the amounts identified above are deemed to be final.
Identified intangible assets are comprised of customer relationships, contract rights and favorable leaseholds for a total amount of $0.9 million, to be amortized over an estimated useful life of 20 years, 3 years, and 9 years, respectively.
McFarland-Dyer & Associates
In the third quarter of 2021, the Company signed a purchase agreement to acquire McFarland-Dyer & Associates, Inc. (“MDA”), with an effective date of August 1, 2021. MDA is a landscape architectural, land planning, civil engineering and land surveying firm based in Suwanee, GA. The Company paid total consideration of $3.9 million, which was comprised of 32,143 sharesthese acquisitions. Shares of common stock at $12.85 per share, forare subject to a total of $0.4 million, plus $3.5 million in cash, promissory note and assumed liabilities. The promissory note hassix-month lock-up. Promissory notes bear a 3.25%simple interest rate with equalranging from 5.00% to 11.00% and are payable in quarterly payments of principal and interest beginning on January 15, 2022February 2023 and ending April 15, 2024.
Thein December 2026. Convertible notes bear a simple interest rate ranging from 7.00% to 8.00% and are payable in lump sum payments or quarterly payments of principal and interest beginning December 2024 and ending in September 2027; see Note 12
The acquisition of MDA allows Bowman to further enhance its land architectural and civil engineering competencies thereby allowing the Company to broaden its offerings and better serve its public and private sector customers.
Upon receipt of the final valuation report the carrying amount of some of the assets and liabilities differed from the preliminary amounts reported in the interim financial statements for the quarter ended September 30, 2021.
F-16
The following summarizes provisional estimates and the final adjustments to the fair values of MDA assets acquired and liabilities assumed as of the acquisition date (in thousands):
| September 30, 2021 |
| Change |
| December 31, 2021 |
| ||||
Total Purchase Price |
| $ | 3,967 |
| $ | (43 | ) | $ | 3,924 |
|
Purchase Price Allocation: |
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
| 1,033 |
|
| - |
|
| 1,033 |
|
Contract assets |
|
| 410 |
|
| (125 | ) |
| 285 |
|
Property and equipment, net |
|
| 39 |
|
| - |
|
| 39 |
|
Intangible assets |
|
| 990 |
|
| 10 |
|
| 1,000 |
|
Other assets |
|
| 34 |
|
| - |
|
| 34 |
|
Accounts payable and accrued liabilities, current portion |
|
| (70 | ) |
| (28 | ) |
| (98 | ) |
Contract liabilities |
|
| (230 | ) |
| (212 | ) |
| (442 | ) |
Total identifiable assets |
| $ | 2,206 |
| $ | (355 | ) | $ | 1,851 |
|
Goodwill |
|
| 1,761 |
|
| 312 |
|
| 2,073 |
|
Net assets acquired |
| $ | 3,967 |
| $ | (43 | ) | $ | 3,924 |
|
The contract assets decreased by $0.1 million and the contract liabilities increased by $0.2 million with a corresponding adjustment to goodwill due to the final analysis of the opening work in progress (“WIP”) on open contracts. The change to the provisional amount resulted in a decrease in revenue of $0.3 million.
The accounts payable2023, including legal fees, consulting fees, and other current liabilities increased by $13,000miscellaneous expenses associated with a corresponding adjustment to goodwill due to the final analysis of the assumed accounts payable and other current liabilities.
The carrying amount of the contract rights intangible assets increased by a net $8,000. This amount represents the $10,000 fair value adjustment, less additional amortization expense.
Triangle Site Design PLLC
In the fourth quarter of 2021, the Company signed a purchase agreement to acquire Triangle Site Design PLLC (“TSD”), with an effective date of October 1, 2021. TSD is a professional services firm based in Raleigh, NC. The Company paid total consideration of $1.5 million, which was comprised of 65,407 shares of common stock, at $13.56 per share, for a total of $0.9 million, plus $0.6 million in cash, promissory note and assumed liabilities. The promissory note has a 3.25% interest rate with equal quarterly payments beginning on January 1, 2022 and ending October 1, 2024.
The acquisition of TSD allows Bowman to further enhance its civil engineering competencies thereby allowing the Company to broaden its offerings and better serve its public and private sector customers.
The following summarizes the preliminary calculations of the fair values of TSD assets acquired and liabilities assumed as of the acquisition date (in thousands):
Total Purchase Price |
| $ | 1,487 |
|
Purchase Price Allocation: |
|
|
|
|
Contract assets |
|
| 19 |
|
Intangible assets |
|
| 1,300 |
|
Contract liabilities |
|
| (64 | ) |
Total identifiable assets |
| $ | 1,255 |
|
Goodwill |
|
| 232 |
|
Net assets acquired |
| $ | 1,487 |
|
The purchase price allocation is based upon preliminary information and is subject to change when additional information is obtained.acquisitions. Goodwill results from an assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. All of the goodwill recognized is expected to be deductible for tax purposes. The Company has not
F-17
Identified intangible assets are customer relationships for a total amount of $1.3 million, to be amortized over an estimated useful life of 11 years.
PCD Engineering Services, Inc.
In the fourth quarter of 2021,During 2022, the Company signed a purchase agreement to acquire PCD Engineering Services, Inc. (“PCD”), with an effective date of October 8, 2021. PCD is a professional services firm based in Denver, CO.completed nine acquisitions. The Company paid total consideration of $2.8$47.5 million which was comprised of 36,444any combination of cash, promissory notes, convertible notes, shares of common stock at $13.88 per share, for a total of $0.5 million, plus $2.3 million in cash, promissory note and assumed liabilities. The promissory note hasNo cash was acquired with these acquisitions. Shares of common stock are subject to a 3.25%six-month lock-up. Promissory notes bear a simple interest rate with equalranging from 3.50% to 7.00% and is payable in lump sum payments or in quarterly payments of principal and interest beginning on January 8,May 2022 and ending October 8, 2024.
in May 2027. Convertible notes bear a simple interest rate ranging from 4.75% to 7.00% and is payable in quarterly payments of principal and interest beginning November 2022 and ending in May 2027; see Note 12 Notes Payable for information regarding the convertible notes payable. For tax purposes, the acquisitions were treated as asset acquisitions, resulting in a step up in tax basis. Accordingly, there are no material deferred tax assets or liabilities to be recorded through purchase accounting. The purchase agreement for one of the acquisitions includes a contingent consideration feature, which affords the sellers the opportunity to haveearn additional consideration in the form of the Company's common stock, cash and a non-negotiable promissory note, increased by a maximum of $0.5 million based on certain financial performance thresholds measured quarterly from December 31, 2021 through September 30, 2022.thresholds. The sellers achieved the financial performance thresholds based on the analysis of results as of December 31, 2021 resulting in a $0.5 million increase to the promissory note.
The acquisition of PCD allows Bowman to further enhance its mechanicalpayout amount ranges between $0 and electrical engineering competencies thereby allowing the Company to cross sell to, and better serve, its renewable energy customers.
The following summarizes the preliminary calculations of$3.0 million; see Note 2 Fair Value Measurements for additional information regarding the fair valuesvalue of PCD assets acquired and liabilities assumed as of the acquisition date (in thousands):
Total Purchase Price |
| $ | 3,247 |
|
Purchase Price Allocation: |
|
|
|
|
Accounts receivable |
|
| 187 |
|
Contract assets |
|
| 135 |
|
Property and equipment, net |
|
| 15 |
|
Intangible assets |
|
| 800 |
|
Accounts payable and accrued liabilities, current portion |
|
| (141 | ) |
Contract liabilities |
|
| (97 | ) |
Total identifiable assets |
| $ | 899 |
|
Goodwill |
|
| 2,348 |
|
Net assets acquired |
| $ | 3,247 |
|
The purchase price allocation is based upon preliminary information and is subject to change when additional information is obtained.contingent consideration. Goodwill results from an assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. All of the goodwill recognized is expected to be deductible for tax purposes. The purchase price allocations have been completed and the amounts are deemed final.
(in thousands) | 2023 | 2022 | |||||||||
Assets: | |||||||||||
Accounts Receivable, net | $ | 10,112 | $ | 12,427 | |||||||
Contract assets | 6,334 | 2,253 | |||||||||
Prepaid and other current assets | 361 | 595 | |||||||||
Property and equipment, net | 1,952 | 2,068 | |||||||||
Operating lease, right-of-use assets | 7,078 | 96 | |||||||||
Goodwill | 43,512 | 25,225 | |||||||||
Other intangible assets | 27,361 | 19,626 | |||||||||
Other assets - non-current | 44 | – | |||||||||
Total assets acquired: | $ | 96,754 | $ | 62,290 | |||||||
Liabilities: | |||||||||||
Accounts payable and accrued liabilities, current portion | $ | 3,258 | $ | 6,182 | |||||||
Contract liabilities | 4,891 | 2,906 | |||||||||
Other non-current obligations | 23,920 | 18,475 | |||||||||
Operating lease obligation, less current portion | 7,078 | – | |||||||||
Finance lease obligation, less current portion | – | 304 | |||||||||
Pension and post-retirement obligation, less current portion | – | 5,782 | |||||||||
Deferred tax liability | 5,787 | – | |||||||||
Total liabilities assumed: | $ | 44,934 | $ | 33,649 | |||||||
Net assets acquired: | $ | 51,820 | $ | 28,641 | |||||||
Cash flow reconciling items: | |||||||||||
Issuance of common stock as partial consideration | (26,133) | (10,606) | |||||||||
Cash paid for acquisitions, net of cash acquired | $ | 25,687 | $ | 18,035 |
Identified intangible assets are comprised of customer relationships for a total amount of $0.8 million, to be amortized over an estimated useful life of 5 years.
BTM Engineering, Inc.
In the fourth quarter of 2021, the Company signed a purchase agreement to acquire BTM Engineering, Inc. (“BTM”), with an effective date of October 15, 2021. BTM is a professional services firm based in Louisville, KY that specializes in general civil and structural engineering. The Company paid total consideration of $0.6 million, which was comprised of cash, promissory note and assumed liabilities. The promissory note has a 3.25% interest rate with equal quarterly payments beginning on January 15, 2022 and ending October 15, 2024.
The acquisition of BTM allows Bowman to further enhance its civil engineering competencies thereby allowing the Company to broaden its offerings and better serve its public and private sector customers.
F-18
The following summarizes the preliminary calculations of the fair values of BTM assets acquired and liabilities assumed as of the acquisition date (in thousands):
Total Purchase Price |
| $ | 642 |
|
Purchase Price Allocation: |
|
|
|
|
Accounts receivable |
|
| 852 |
|
Contract assets |
|
| 97 |
|
Property and equipment, net |
|
| 61 |
|
Intangible assets |
|
| 51 |
|
Accounts payable and accrued liabilities, current portion |
|
| (120 | ) |
Other non-current obligations |
|
| (19 | ) |
Contract liabilities |
|
| (280 | ) |
Total identifiable assets |
| $ | 642 |
|
Goodwill |
|
| - |
|
Net assets acquired |
| $ | 642 |
|
The purchase price allocationgoodwill, is based uponon preliminary information and is subject to change whenas additional information is obtained. Goodwill results from an assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. All the goodwill recognized is expected to be deductible for tax purposes. The Company has not completedconcerning final asset and liability valuations are obtained and management completes its final assessmentreassessment of the fair valuesmeasurement period procedures based on the results of BTM’s assets acquired and liabilities assumed. The final purchase allocation could result in adjustments to certainthe preliminary valuation. During the applicable measurement period, the Company will adjust assets and liabilities including the residual amount allocated to goodwill.
Identified intangible assets are comprised of customer relationshipsif new information is obtained about facts and contract rights for a total amount of $0.1 million, to be amortized over an estimated useful life of 3 years.
Kibart, Inc.
In the fourth quarter of 2021, the Company signed a purchase agreement to acquire Kibart, Inc. (“Kibart”), with an effective date of December 16, 2021. Kibart is a professional services firm based in Towson, MD. The Company paid total consideration of $7.0 million, which was comprised of 38,547 shares of common stock, at $19.70 per share, for a total of $0.8 million, plus $6.2 million in cash, promissory note and assumed liabilities. The promissory note has a 3.25% interest rate with equal quarterly payments beginning on March 15, 2022 and ending December 15, 2024.
The acquisition of Kibart allows Bowman to further enhance its mechanical and electrical engineering competencies thereby allowing the Company to cross sell to, and better serve, its renewable energy customers.
The following summarizes the preliminary calculations of the fair values of Kibart assets acquired and liabilities assumedcircumstances that existed as of the acquisition date (in thousands):
Total Purchase Price |
| $ | 7,040 |
|
Purchase Price Allocation: |
|
|
|
|
Accounts receivable |
|
| 2,103 |
|
Contract assets |
|
| 382 |
|
Prepaids |
|
| 61 |
|
Property and equipment, net |
|
| 6 |
|
Intangible assets |
|
| 4,280 |
|
Other assets |
|
| 18 |
|
Accounts payable and accrued liabilities, current portion |
|
| (310 | ) |
Contract liabilities |
|
| (909 | ) |
Total identifiable assets |
| $ | 5,631 |
|
Goodwill |
|
| 1,409 |
|
Net assets acquired |
| $ | 7,040 |
|
F-19
Identified intangible assets are comprised
2023 | Weighted-Average Life | 2022 | Weighted-Average Life | ||||||||||||||||||||
Customer relationships | $ | 20,050 | 10.45 | $ | 14,177 | 12.90 | |||||||||||||||||
Contract rights | 6,980 | 1.18 | 4,448 | 2.28 | |||||||||||||||||||
Favorable leaseholds | 331 | 7.76 | 27 | 1.42 | |||||||||||||||||||
Licensing rights | $ | – | $ | 974 | Indefinite | ||||||||||||||||||
Total | $ | 27,361 | $ | 19,626 |
In the fourth quarter of 2021, the Company signed a purchase agreement to acquire 1519 Surveying, LLC (“1519”), with an effective date of December 23, 2021. 1519 is a professional services firm based in Waco, TX that specializes in surveying and civil engineering. The Company paid total consideration of $10.0 million, which was comprised of 50,559 shares of common stock, at $21.90 per share, for a total of $1.1 million, plus $8.9 million in cash, promissory note and assumed liabilities. The promissory note has a 5.0% interest rate with equal quarterly payments beginning on March 23, 2022 and ending December 23, 2024.
The acquisition of 1519 allows Bowman to further enhance its surveying and civil engineering competencies thereby allowing the Company to broaden its offerings and better serve its public and private sector customers.
The following summarizes the preliminary calculations of the fair values of 1519’s assets acquired and liabilities assumed as of the acquisition date (in thousands):
Total Purchase Price |
| $ | 10,049 |
|
Purchase Price Allocation: |
|
|
|
|
Accounts receivable |
|
| 1,032 |
|
Contract assets |
|
| 129 |
|
Property and equipment, net |
|
| 526 |
|
Intangible assets |
|
| 1,950 |
|
Other assets |
|
| 6 |
|
Accounts payable and accrued liabilities, current portion |
|
| (126 | ) |
Contract liabilities |
|
| (151 | ) |
Total identifiable assets |
| $ | 3,366 |
|
Goodwill |
|
| 6,683 |
|
Net assets acquired |
| $ | 10,049 |
|
The purchase price allocation is based upon preliminary information and is subject to change when additional information is obtained. Goodwill results from an assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. All the goodwill recognized is expected to be deductible for tax purposes. The Company has not completed its final assessment of the fair values of 1519’s assets acquired and liabilities assumed. The final purchase allocation could result in adjustments to certain assets and liabilities, including the residual amount allocated to goodwill.
Identified intangible assets are comprised of customer relationships and contract rights for a total amount of $2.0 million, to be amortized over an estimated useful life of 10 years and 3 years, respectively.
Terra Associates, Inc.
In the fourth quarter of 2021, the Company signed a purchase agreement to acquire Terra Associates, Inc. (“Terra”), with an effective date of December 31, 2021. Terra is a professional services firm based in Houston, TX specializing in general civil engineering. The Company paid total consideration of $5.8 million, which was comprised of 49,875 shares of common stock, at $21.25 per share, for a total of $1.1 million, plus $4.7 million in cash, promissory note and assumed liabilities. The promissory note has a 3.25% interest rate with equal quarterly payments beginning on March 15, 2022 and ending December 15, 2024.
The acquisition of Terra allows Bowman to further enhance its civil engineering competencies thereby allowing the Company to broaden its offerings and better serve its public and private sector customers.
F-20
The following summarizes the preliminary calculations of the fair values of Terra assets acquired and liabilities assumed as of the acquisition date (in thousands):
Total Purchase Price |
| $ | 5,812 |
|
Purchase Price Allocation: |
|
|
|
|
Accounts receivable |
|
| 794 |
|
Contract assets |
|
| 457 |
|
Other assets |
|
| 6 |
|
Intangible assets |
|
| 1,280 |
|
Accounts payable and accrued liabilities, current portion |
|
| (215 | ) |
Contract liabilities |
|
| (512 | ) |
Total identifiable assets |
| $ | 1,810 |
|
Goodwill |
|
| 4,002 |
|
Net assets acquired |
| $ | 5,812 |
|
The purchase price allocation is based upon preliminary information and is subject to change when additional information is obtained. Goodwill results from an assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. All the goodwill recognized is expected to be deductible for tax purposes. The Company has not completed its final assessment of the fair values of Terra’s assets acquired and liabilities assumed. The final purchase allocation could result in adjustments to certain assets and liabilities, including the residual amount allocated to goodwill.
Identified intangible assets are comprised of customer relationships and contract rights for a total amount of $1.3 million, to be amortized over an estimated useful life of 10 years and 3 years, respectively.
Results from Acquisitions
| December 31, 2021 |
| ||
Gross Contract Revenue |
| $ | 11,834 |
|
Net Income |
| $ | 1,539 |
|
For the Year Ended December 31, 2023 | |||||
Gross Contract Revenue1 | $ | 32,271 | |||
Pre-tax Net Income3 | $ | 6,651 |
| December 31, 2021 |
| December 31, 2020 |
| |||
Gross Contract Revenue * |
| $ | 177,015 |
| $ | 157,703 |
|
Net Income |
| $ | 3,254 |
| $ | 2,788 |
|
For the Year Ended | ||||||||
December 31, 2023 | December 31, 2022 | |||||||
Gross Contract Revenue 2 | $ | 386,220 | $ | 324,907 | ||||
Pre-tax Net Income | $ | 1,053 | $ | 4,427 |
*
The pro forma information provided is compiled from the pre-acquisition financial information and includes pro forma adjustments to reflect additional depreciation and amortization that would have been expensed assuming the respective assets had been acquired as of January 1 2020. These results also include additional non-cash stock compensation expense assuming acquired employees who received stock grants received those grants on January 1, 2020.
F-21
For the Twelve Months Ended December 31, | |||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
Fixed fee | $ | 309,703 | 89.4 | % | $ | 245,685 | 93.9 | % | |||||||||||||||
Time-and materials | 36,553 | 10.6 | % | 16,029 | 6.1 | % | |||||||||||||||||
Gross contract revenue | $ | 346,256 | 100.0 | % | $ | 261,714 | 100.0 | % |
2022.
|
| December 31, 2021 |
|
| December 31, 2020 |
| |||||||||||||||||||||
December 31, 2023 | December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Costs incurred on uncompleted contracts |
| $ | 168,110 |
|
| $ | 113,856 |
| |||||||||||||||||||
Estimated contract earnings in excess of costs |
|
| 229,949 |
|
|
| 151,423 |
| |||||||||||||||||||
Estimated contract earnings to date |
|
| 398,059 |
|
|
| 265,279 |
| |||||||||||||||||||
Less: billed to date |
|
| (393,493 | ) |
|
| (260,142 | ) | |||||||||||||||||||
Net contract assets |
| $ | 4,566 |
|
| $ | 5,137 |
|
|
| December 31, 2021 |
|
| December 31, 2020 |
| |||||||||||||||||||||
Officers, employees and affiliated entities - Interest accrues annually at rates ranging from 0.0% - 5.5%. The notes receivable mature through November 2024. |
| $ | 2,478 |
|
| $ | 2,479 |
| |||||||||||||||||||
Unrelated third party - Currently 0 interest is being accrued on this note. The note receivable matures in December 2023. |
|
| 903 |
|
|
| 903 |
| |||||||||||||||||||
December 31, 2023 | December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Officers, employees and affiliated entities - Interest accrues annually at rates ranging from 0.0% - 5.5%. The notes receivable mature through January 2026. | |||||||||||||||||||||||||||
Unrelated third party - Currently no interest is being accrued on this note. The note receivable matures in December 2025.1 | |||||||||||||||||||||||||||
Total: |
|
| 3,381 |
|
|
| 3,382 |
| |||||||||||||||||||
Less: current portion |
|
|
|
|
|
|
|
| Less: current portion | ||||||||||||||||||
Officers, employees and affiliates |
|
| (1,260 | ) |
|
| (1,182 | ) | |||||||||||||||||||
Noncurrent portion |
| $ | 2,121 |
|
| $ | 2,200 |
|
F-22
|
| December 31, 2021 |
|
| December 31, 2020 |
| |||||||||||||||||||||
December 31, 2023 | December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Computer equipment |
| $ | 1,279 |
|
| $ | 1,276 |
| |||||||||||||||||||
Survey equipment |
|
| 4,625 |
|
|
| 4,444 |
| |||||||||||||||||||
Vehicles |
|
| 763 |
|
|
| 463 |
| |||||||||||||||||||
Furniture and fixtures |
|
| 1,675 |
|
|
| 1,638 |
| |||||||||||||||||||
Leasehold improvements |
|
| 6,886 |
|
|
| 5,887 |
| |||||||||||||||||||
Software |
|
| 332 |
|
|
| 283 |
| |||||||||||||||||||
Fixed assets pending lease financing 1 |
|
| 519 |
|
|
| 146 |
| |||||||||||||||||||
Total: |
|
| 16,079 |
|
|
| 14,137 |
| |||||||||||||||||||
Less: accumulated depreciation |
|
| (10,669 | ) |
|
| (9,912 | ) | |||||||||||||||||||
Property and Equipment, net of capital leased assets |
| $ | 5,410 |
|
| $ | 4,225 |
| |||||||||||||||||||
Property and Equipment, net of finance lease assets |
December 31, 2021 December 31, 2020 Equipment $ 15,391 $ 8,590 Vehicles 5,542 3,825 Total: 20,933 12,415 Less: accumulated amortization on leased assets (6,141 ) (1,283 ) Capital Leased Assets, net $ 14,792 $ 11,132 capitalfinance lease facilities20212023 and 20202022 was $0.8$2.5 million and $0.7$1.6 million, respectively.capitalfinance leased assets are as follows (in thousands):December 31, 2023 December 31, 2023 December 31, 2022 Finance lease assets, net
|
| Goodwill |
| |
Balance as of December 31, 2020 |
| $ | 9,179 |
|
Acquisitions |
|
| 19,292 |
|
Balance as of December 31, 2021 |
| $ | 28,471 |
|
Goodwill | |||||
Balance as of December 31, 2022 | $ | 53,210 | |||
2023 Acquisitions - additions | 40,785 | ||||
2023 Acquisitions - adjustments | 2,726 | ||||
2022 Acquisitions - adjustments | (328) | ||||
Balance as of December 31, 2023 | $ | 96,393 |
F-23
|
| December 31, 2021 |
|
| December 31, 2020 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Gross Amount |
|
| Accumulated Amortization |
|
| Net Balance |
|
| Gross Amount |
|
| Accumulated Amortization |
|
| Net Balance |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2023 | December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross Amount | Gross Amount | Accumulated Amortization | Net Balance | Gross Amount | Accumulated Amortization | Net Balance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Customer relationships |
| $ | 10,018 |
|
| $ | (665 | ) |
| $ | 9,353 |
|
| $ | 809 |
|
| $ | (382 | ) |
| $ | 427 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract rights |
|
| 2,333 |
|
|
| (224 | ) |
|
| 2,109 |
|
|
| 150 |
|
|
| (150 | ) |
|
| - |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases |
|
| 160 |
|
|
| (17 | ) |
|
| 143 |
|
|
| - |
|
|
| - |
|
|
| - |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-compete agreement |
|
| 137 |
|
|
| (137 | ) |
|
| - |
|
|
| 137 |
|
|
| (114 | ) |
|
| 23 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Favorable leaseholds | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Domain name |
|
| 281 |
|
|
| - |
|
|
| 281 |
|
|
| 281 |
|
|
| - |
|
|
| 281 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Licensing rights |
|
| 400 |
|
|
| - |
|
|
| 400 |
|
|
| 400 |
|
|
| - |
|
|
| 400 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total |
| $ | 13,329 |
|
| $ | (1,043 | ) |
| $ | 12,286 |
|
| $ | 1,777 |
|
| $ | (646 | ) |
| $ | 1,131 |
|
life. No such assets were acquired during the year ended December 31, 2023.
|
| December 31, 2021 |
|
| December 31, 2020 |
| |||||||||||||||||||||
December 31, 2023 | December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Customer relationships |
|
| 10.32 |
|
|
| 4.98 |
| Customer relationships | 11.27 | 11.97 | ||||||||||||||||
Contract rights |
|
| 2.87 |
|
|
| 2.00 |
| Contract rights | 1.84 | 2.47 | ||||||||||||||||
Leases |
|
| 9.17 |
|
|
| - |
| Leases | 7.86 | 8.05 | ||||||||||||||||
Non-compete agreement |
|
| 3.00 |
|
|
| 3.00 |
|
2022 |
|
|
| $ | 1,870 |
| ||
2023 |
|
|
|
| 1,809 |
| ||
Year ending December 31, | ||||||||
2024 | ||||||||
2024 | ||||||||
2024 |
|
|
|
| 1,567 |
| ||
2025 |
|
|
|
| 950 |
| ||
2026 | ||||||||
2027 | ||||||||
2028 | ||||||||
Thereafter |
|
|
|
| 5,409 |
| ||
Total |
|
|
| $ | 11,605 |
|
In 2017,
During the year ended December 31, 2019, the Credit Limit increased to $15.0 million. During the year ended December 31, 2019, a second non-revolving line of credit was established (Fixed Line #2). During the year ended December 31, 2020, the Company entered into an additional credit agreement with Bank of America (Facility #4). Both credit agreements contained certain financial covenants including fixed charge coverage ratio, debt to EBITDA and adjusted debt to EBITDA, all of which the Company complied with on December 31, 2021.
On July 30, 2021, the Company entered into a Sixth Amendment to theRestated Credit Agreement whereby the Company and the Bank agreed to extend the maturity datemaximum principal amount of the Revolving LineCredit Facility was increased to July 31, 2023. The Sixth Amendment also eliminated$70 million, the adjusted debt to EBITDA covenant along with certain administrative requirements and established the Secured Overnight Financing Rate (SOFR) as the replacement for LIBOR. Additional modifications to the Revolving Line included expanded allowances for acquisition and reduced interest rate spreads to a range of 2.00% to 2.60%, among other things.
F-24
As of June 30, 2021, the Revolving Line required monthly payments of interest at the greater of the London Interbank Offered Rate (LIBOR) daily floating rate or 1.25% plus an applicable rate which varied between 2.35% and 2.95% based on the Company achieving certain leverage ratios as defined in the Credit Agreement. On December 31, 2021, and December 31, 2020, the interest rate was 3.25% and 3.60%, respectively. All outstanding principal is due upon expiration, whichterm was extended to July 31, 2023, when the Company entered into the Sixth Amendment2025, and certain provisions relating to the Credit Agreement. The Revolving Line is reported as bank line of credit on the consolidated balance sheets. On December 31, 2021interest rate spreads and December 31, 2020, the outstanding balance on the Revolving Line was $0 and $3.5 million, respectively.
used fees were modified.
$0.1 million.
$0.1 million.
Amended and Restated Agreement
2022, respectively.
|
| December 31, 2021 |
|
| December 31, 2020 |
| |||||||||||||||||||||
December 31, 2023 | December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Related parties: |
|
|
|
|
|
|
|
| |||||||||||||||||||
Shareholders - Interest accrues annually at rates ranging from 0.00% - 6.25%. The notes payable mature on various dates through October 2025. |
| $ | 10,771 |
|
| $ | 2,202 |
| |||||||||||||||||||
Owners of Acquired Entity - Interest accrues annually at 3.25%. The note payable matures October 2024. |
|
| 450 |
|
|
| - |
| |||||||||||||||||||
1Shareholders and Owners of Acquired Entities - Interest accrues annually at rates ranging from 3.25% - 11.00%. The notes payable mature on various dates through December 2026. | |||||||||||||||||||||||||||
1Shareholders and Owners of Acquired Entities - Interest accrues annually at rates ranging from 3.25% - 11.00%. The notes payable mature on various dates through December 2026. | |||||||||||||||||||||||||||
1Shareholders and Owners of Acquired Entities - Interest accrues annually at rates ranging from 3.25% - 11.00%. The notes payable mature on various dates through December 2026. | |||||||||||||||||||||||||||
Convertible Notes Payable - Interest accrues annually at rates ranging from 4.75% - 8.00% annually. The convertible notes payable mature on various dates through September 2027. | |||||||||||||||||||||||||||
Unrelated third parties: |
|
|
|
|
|
|
|
| |||||||||||||||||||
Note payable for purchase of software |
|
| 34 |
|
|
| - |
| |||||||||||||||||||
Note payable for purchase of software and vehicles | |||||||||||||||||||||||||||
Note payable for purchase of software and vehicles | |||||||||||||||||||||||||||
Note payable for purchase of software and vehicles | |||||||||||||||||||||||||||
Note payable for purchase of intangible asset |
|
| 100 |
|
|
| - |
| |||||||||||||||||||
Fixed line notes payable - see note 11 |
|
| 1,502 |
|
|
| 2,219 |
| |||||||||||||||||||
Fixed lines of credit - see note 11 | |||||||||||||||||||||||||||
Discounts on notes payable issued as consideration in acquisitions: | |||||||||||||||||||||||||||
1Shareholders and Owners of acquired entities | |||||||||||||||||||||||||||
1Shareholders and Owners of acquired entities | |||||||||||||||||||||||||||
1Shareholders and Owners of acquired entities | |||||||||||||||||||||||||||
Total |
|
| 12,857 |
|
|
| 4,421 |
| |||||||||||||||||||
Less: current portion |
|
| (4,450 | ) |
|
| (1,592 | ) | |||||||||||||||||||
Noncurrent portion |
| $ | 8,407 |
|
| $ | 2,829 |
|
F-25
2022 |
| $ | 4,679 |
|
2023 |
|
| 4,191 |
|
2024 |
|
| 3,625 |
|
2025 |
|
| 362 |
|
2026 | ||||
2027 | ||||
2028 | ||||
Total |
| $ | 12,857 |
|
13. Stock Subscription
Prior to becoming a public company, periodically,Payable
(Amounts in thousands) | December 31, 2023 | December 31, 2022 | ||||||
Change in benefit obligation | ||||||||
Benefit obligation at beginning of year | $ | 5,087 | $ | – | ||||
Acquired benefit obligations | – | 5,782 | ||||||
Service cost | 41 | 34 | ||||||
Interest cost | 273 | 165 | ||||||
Direct benefit payments | (303) | (117) | ||||||
Actuarial gain | (52) | (777) | ||||||
Benefit obligation at end of year | $ | 5,046 | $ | 5,087 |
(Amounts in thousands) | December 31, 2023 | December 31, 2022 | ||||||
Amount recognized in the consolidated balance sheets: | ||||||||
Accounts payable and accrued liabilities, current portion | $ | (392) | $ | (239) | ||||
Post-retirement obligation, less current portion | (4,654) | (4,848) | ||||||
Net amount recognized in the balance sheet | $ | (5,046) | $ | (5,087) |
Onyear ended December 31, 20212023 and 2020, seven2022, respectively.
(Amounts in thousands) | December 31, 2023 | December 31, 2022 | ||||||
Projected benefit obligation | $ | 1,103 | $ | 1,175 | ||||
Accumulated benefit obligation | 1,103 | 1,175 | ||||||
Fair value of plan assets | – | – |
Year Ending December 31, | (Amounts in thousands) | ||||
2024 | $ | 392 | |||
2025 | 265 | ||||
2026 | 258 | ||||
2027 | 280 | ||||
2028 | 287 | ||||
Thereafter | 1,549 |
December 31, 2023 | December 31, 2022 | |||||||
Weighted-average assumptions to determine benefit obligations: | ||||||||
Discount rate | 5.30 | % | 5.51 | % | ||||
Weighted-average assumptions to determine service cost: | ||||||||
Discount rate | 5.48 | % | 4.53 | % | ||||
Weighted-average assumptions to determine interest on service cost: | ||||||||
Discount rate | 5.55 | % | 4.58 | % |
assumptions as of the beginning of the plan year.
2025.
2025.
2025.
2024.
F-26
Leesburg Acquisition Partners (LAP) is an entity in which Mr. Bowman, Mr. Bruen and Mr. Hickey have an ownership interest. During the year ended December 31, 2021, the Company made $28,808 of back charge payments relating to work performed for LAP in prior years.
As
|
| December 31, 2021 |
|
| December 31, 2020 |
| |||||||||||||||||||||
Current expense: |
|
|
|
|
|
|
|
| |||||||||||||||||||
December 31, 2023 | December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Current expense (benefit): | |||||||||||||||||||||||||||
Federal | |||||||||||||||||||||||||||
Federal | |||||||||||||||||||||||||||
Federal |
| $ | 159 |
|
| $ | (6 | ) | |||||||||||||||||||
State |
|
| 431 |
|
|
| 662 |
| |||||||||||||||||||
Foreign |
|
| 13 |
|
|
| 7 |
| |||||||||||||||||||
Total |
|
| 603 |
|
|
| 663 |
| |||||||||||||||||||
Deferred expense (benefit): |
|
|
|
|
|
|
|
| Deferred expense (benefit): | ||||||||||||||||||
Federal |
|
| (1,989 | ) |
|
| 404 |
| |||||||||||||||||||
State |
|
| (193 | ) |
|
| (78 | ) | |||||||||||||||||||
Total |
|
| (2,182 | ) |
|
| 326 |
| |||||||||||||||||||
Provision for income taxes |
| $ | (1,579 | ) |
| $ | 989 |
| |||||||||||||||||||
Provision (benefit) for income taxes |
|
| December 31, 2021 |
|
| December 31, 2020 |
| |||||||||||||||||||||
December 31, 2023 | December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Deferred tax assets: |
|
|
|
|
|
|
|
| |||||||||||||||||||
Research and development credit carryover |
| $ | 2,943 |
|
| $ | 1,557 |
| |||||||||||||||||||
Deferred rent expense |
|
| 1,248 |
|
|
| 1,073 |
| |||||||||||||||||||
Intangible asset amortization |
|
| 68 |
|
|
| 23 |
| |||||||||||||||||||
Net operating loss |
|
| 2 |
|
|
| - |
| |||||||||||||||||||
Lease liabilities | |||||||||||||||||||||||||||
Lease liabilities | |||||||||||||||||||||||||||
Lease liabilities | |||||||||||||||||||||||||||
Bad debt reserve |
|
| 456 |
|
|
| - |
| |||||||||||||||||||
Accrued employee related expenses |
|
| 1,237 |
|
|
| - |
| |||||||||||||||||||
Capitalized research and development costs | |||||||||||||||||||||||||||
Restricted stock units | |||||||||||||||||||||||||||
Performance stock units |
|
| 71 |
|
|
| - |
| |||||||||||||||||||
Acquisition related transaction costs |
|
| 139 |
|
|
| - |
| |||||||||||||||||||
|
|
| 6,164 |
|
|
| 2,653 |
| |||||||||||||||||||
Intangible asset amortization | |||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||
57,395 | |||||||||||||||||||||||||||
Deferred tax liabilities: |
|
|
|
|
|
|
|
| Deferred tax liabilities: | ||||||||||||||||||
Fixed asset depreciation |
|
| (3,718 | ) |
|
| (2,866 | ) | |||||||||||||||||||
Lease assets | |||||||||||||||||||||||||||
Intangible asset amortization | |||||||||||||||||||||||||||
Prepaid expenses |
|
| (540 | ) |
|
| - |
| |||||||||||||||||||
Accrual to cash |
|
| - |
|
|
| (5,398 | ) | |||||||||||||||||||
Section 481(a) adjustment |
|
| (5,178 | ) |
|
| - |
| |||||||||||||||||||
Goodwill amortization |
|
| (1,018 | ) |
|
| (861 | ) | |||||||||||||||||||
|
|
| (10,454 | ) |
|
| (9,125 | ) | |||||||||||||||||||
Net deferred tax liabilities |
| $ | (4,290 | ) |
| $ | (6,472 | ) | |||||||||||||||||||
(23,615) | |||||||||||||||||||||||||||
Net deferred tax assets (liabilities) |
F-27
2022, respectively.
December 31, 2022.
|
| December 31, 2021 |
|
| December 31, 2020 |
| |||||||||||||||||||||
December 31, 2023 | December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Statutory rate |
| $ | (269 | ) |
| $ | 410 |
| |||||||||||||||||||
State income taxes, net of federal benefit |
|
| (132 | ) |
|
| 69 |
| |||||||||||||||||||
Effective rate differential for DCPC—S-corp |
|
| - |
|
|
| (59 | ) | |||||||||||||||||||
State income tax rate change |
|
| 85 |
|
|
| 77 |
| |||||||||||||||||||
Section 162(m) compensation differences |
|
| 332 |
|
|
| - |
| |||||||||||||||||||
Other permanent differences |
|
| 84 |
|
|
| 68 |
| |||||||||||||||||||
Stock repurchase liability |
|
| - |
|
|
| 1,474 |
| |||||||||||||||||||
Valuation allowance |
|
| - |
|
|
| 27 |
| |||||||||||||||||||
Change in tax status |
|
| - |
|
|
| 170 |
| |||||||||||||||||||
Stock compensation | |||||||||||||||||||||||||||
Foreign taxes | |||||||||||||||||||||||||||
Other |
|
| 90 |
|
|
| 42 |
| |||||||||||||||||||
Research & development credit |
|
| (1,969 | ) |
|
| (1,289 | ) | |||||||||||||||||||
Uncertain tax positions |
|
| 200 |
|
|
| - |
| |||||||||||||||||||
Provision for income tax |
| $ | (1,579 | ) |
| $ | 989 |
| |||||||||||||||||||
Provision (benefit) for income tax |
The adjustment to the statutory rate from stock purchase liability changes for the years ended December 31, 2020 is the result of permanent differences created by the recognition of non-cash stock compensation expenses in connection with the periodic measurements of the liability to common stock subject to repurchase.
apportionment factor changes.
book amortization on the exercise and vesting of stock-based compensation.
F-28
|
| December 31, 2021 |
|
| December 31, 2020 |
| |||||||||||||||||||||
2023 | 2023 | 2022 | |||||||||||||||||||||||||
Balances at January 1 |
| $ | 151 |
|
| $ | 83 |
| |||||||||||||||||||
Additions based on tax positions related to the prior year |
|
| 418 |
|
|
| - |
| |||||||||||||||||||
Decreases based on tax positions related to prior year |
|
| - |
|
|
| - |
| |||||||||||||||||||
Additions based on tax positions related to the current year |
|
| 1,700 |
|
|
| 68 |
| |||||||||||||||||||
Settlements |
|
| - |
|
|
| - |
| |||||||||||||||||||
Reductions for tax positions due to lapse of statute |
|
| - |
|
|
| - |
| |||||||||||||||||||
Other changes |
|
| - |
|
|
| - |
| |||||||||||||||||||
Balances at December 31 |
| $ | 2,269 |
|
| $ | 151 |
| |||||||||||||||||||
Balances at December 31 | |||||||||||||||||||||||||||
Balances at December 31 |
For the periods ending December 31, 2021 and December 2020, the Company has an ending uncertain tax position of $0.2 million and $0.2 million against its R&D credit.
position.
position of $0.4 million related to the annual limitation on the deductibility of executive compensation claimed on its 2021 U.S. federal income tax return, filed during 2022.
benefit.
|
| December 31, 2021 |
| |
Purchase price paid for shares sold |
| $ | 479 |
|
|
|
|
|
|
Number of shares sold |
|
| 35,886 |
|
December 31, 2023 | |||||
Purchase price paid for shares sold | $ | 1,547 | |||
Number of shares sold | 61,948 |
F-29
| ||||
|
|
| ||
|
|
| ||
|
| |||
|
|
|
A summary of the status of stock options exercised, including the substantive options discussed in Note 3, is as follows:
|
| Number of shares |
|
| Weighted Average Exercise Price |
| |||||||||||||||||||||
Outstanding at January 1, 2020 |
|
| 56,404 |
|
| $ | 5.68 |
| |||||||||||||||||||
Number of shares | Number of shares | Weighted Average Exercise Price | |||||||||||||||||||||||||
Outstanding at January 1, 2022 | |||||||||||||||||||||||||||
Granted |
|
| 7,434 |
|
|
| 7.34 |
| |||||||||||||||||||
Exercised |
|
| (10,561 | ) |
|
| 5.92 |
| |||||||||||||||||||
Expired or cancelled |
|
| - |
|
|
| - |
| |||||||||||||||||||
Outstanding at December 31, 2020 |
|
| 53,277 |
|
| $ | 5.87 |
| |||||||||||||||||||
Outstanding at December 31, 2022 | |||||||||||||||||||||||||||
Granted |
|
| - |
|
|
| - |
| |||||||||||||||||||
Exercised |
|
| (38,350 | ) |
|
| 5.82 |
| |||||||||||||||||||
Expired or cancelled |
|
| - |
|
|
| - |
| |||||||||||||||||||
Outstanding at December 31, 2021 |
|
| 14,927 |
|
| $ | 5.99 |
| |||||||||||||||||||
Outstanding at December 31, 2023 |
|
| Options Outstanding and Exercisable |
| |||||||||||||||||
|
| Exercise Price |
|
| Total Outstanding |
|
| Weighted Average Remaining Life (Years) |
|
| Weighted Average Exercise Price |
|
| Total Exercisable |
| |||||
January 1, 2021 |
| $ | 6.37 |
|
|
| 53,277 |
|
|
| 4.5 |
|
| $ | 5.87 |
|
|
| 53,277 |
|
December 31, 2021 |
| $ | 6.57 |
|
|
| 14,927 |
|
|
| 5.0 |
|
| $ | 5.99 |
|
|
| 14,927 |
|
Options Outstanding and Exercisable | |||||||||||||||||||||||||||||
Exercise Price | Total Outstanding | Weighted Average Remaining Life (Years) | Weighted Average Exercise Price | Total Exercisable | |||||||||||||||||||||||||
December 31, 2022 | $ | 6.28 | 10,030 | 5.0 | $ | 5.99 | 10,030 | ||||||||||||||||||||||
December 31, 2023 | $ | 6.28 | 5,133 | 5.0 | $ | 6.02 | 5,133 |
F-30
|
| Number of shares |
|
| Weighted Average Grant Price |
| |||||||||||||||||||||
Outstanding at January 1, 2020 |
|
| 156,409 |
|
|
| 5.59 |
| |||||||||||||||||||
Number of shares | Number of shares | Weighted Average Grant Price | |||||||||||||||||||||||||
Outstanding at January 1, 2022 | |||||||||||||||||||||||||||
Granted |
|
| 657,673 |
|
|
| 11.00 |
| |||||||||||||||||||
Vested |
|
| (108,206 | ) |
|
| 6.49 |
| |||||||||||||||||||
Cancelled |
|
| (2,950 | ) |
|
| 5.49 |
| |||||||||||||||||||
Outstanding at December 31, 2020 1 |
|
| 702,926 |
|
|
| 10.51 |
| |||||||||||||||||||
Outstanding at December 31, 2020, as modified 2 |
|
| 702,926 |
|
|
| 12.80 |
| |||||||||||||||||||
Outstanding at December 31, 2022 | |||||||||||||||||||||||||||
Granted |
|
| 1,681,028 |
|
|
| 14.06 |
| |||||||||||||||||||
Vested |
|
| (156,488 | ) |
|
| 12.91 |
| |||||||||||||||||||
Cancelled |
|
| (9,183 | ) |
|
| 13.98 |
| |||||||||||||||||||
Outstanding at December 31, 2021 |
|
| 2,218,283 |
|
|
| 13.74 |
| |||||||||||||||||||
Outstanding at December 31, 2023 |
1Weighted average grant price at December 31, 2020 represents the grant date fair value of Stock Awards as originally issued.
2Weighted average grant price at December 31, 2020, as modified, represents the as adjusted fair value of the outstanding Stock Awards on the date of modification in connection with the settlement of the liability to common shares subject to repurchase.
F-31
simulation with model inputs of opening average share value, valuation date stock price, expected volatilities, correlation coefficient, risk-free interest rate, and expected dividend yield for the Company and the custom peer group.
|
| Number of shares |
|
| Weighted Average Grant Price |
| |||||||||||||||||||||
Outstanding at January 1, 2021 |
|
| - |
|
|
| - |
| |||||||||||||||||||
Number of shares | Number of shares | Weighted Average Grant Price | |||||||||||||||||||||||||
Outstanding at January 1, 2023 | |||||||||||||||||||||||||||
Granted |
|
| 260,842 |
|
|
| 13.81 |
| |||||||||||||||||||
Vested |
|
| - |
|
|
| - |
| |||||||||||||||||||
Cancelled |
|
| - |
|
|
| - |
| |||||||||||||||||||
Outstanding at December 1, 2021 |
|
| 260,842 |
|
|
| 13.81 |
| |||||||||||||||||||
Outstanding at December 31, 2023 |
The following table represents the change in the liability to common shares subject to repurchase and the associated non-cash compensation expense for the years ended December 31, 2021 and 2020 (in thousands):
|
| December 31, 2021 |
|
| December 31, 2020 |
| ||
Beginning Balance |
| $ | 842 |
|
| $ | 8,267 |
|
Non-cash compensation from ratable vesting |
|
| 41 |
|
|
| 2,712 |
|
Non-cash compensation from change in fair value of liability |
|
| 2 |
|
|
| 2,457 |
|
Other stock activity, net |
|
| 516 |
|
|
| (786 | ) |
Reclassification upon modification |
|
| (1,394 | ) |
|
| (11,808 | ) |
Ending balance |
| $ | 7 |
|
| $ | 842 |
|
As of December 31, 2021,2023, the Company had 2,479,1252,412,758 of unvested stock awards that vest between January 1, 2024 and December 31, 2027.
$13.7 million, respectively.
2022 |
| $ | 10,581 |
|
2023 |
|
| 9,325 |
|
2024 |
|
| 4,860 |
|
2025 |
|
| 1,346 |
|
Thereafter |
|
| 281 |
|
2026 | ||||
2027 | ||||
2028 | ||||
Total |
| $ | 26,393 |
|
On September 30, 2020,
(Amounts in thousands) | Balance Sheet Classification | December 31, 2023 | December 31, 2022 | |||||||||||||||||
Assets: | ||||||||||||||||||||
Operating lease assets | Operating lease, right-of-use assets | $ | 40,743 | $ | 30,264 | |||||||||||||||
Finance lease assets | Property and equipment, net | 19,543 | 18,580 | |||||||||||||||||
Total lease assets | $ | 60,286 | $ | 48,844 | ||||||||||||||||
Liabilities: | ||||||||||||||||||||
Current: | ||||||||||||||||||||
Operating lease liabilities | Operating lease obligation, current portion | $ | (9,016) | $ | (6,949) | |||||||||||||||
Finance lease liabilities | Finance lease obligation, current portion | (6,586) | (5,297) | |||||||||||||||||
Total current lease liabilities | $ | (15,602) | $ | (12,246) | ||||||||||||||||
Non-current: | ||||||||||||||||||||
Operating lease liabilities | Operating lease obligation, less current portion | $ | (37,660) | $ | (28,087) | |||||||||||||||
Finance lease liabilities | Finance lease obligation, less current portion | (14,408) | (14,254) | |||||||||||||||||
Total non-current lease liabilities | $ | (52,068) | $ | (42,341) |
(Amounts in thousands) | December 31, 2023 | December 31, 2022 | |||||||||
Operating lease cost | |||||||||||
Amortization of right-of-use assets | $ | 11,192 | $ | 8,137 | |||||||
Short-term and variable lease cost | 9 | 325 | |||||||||
Finance lease cost: | |||||||||||
Amortization of right-of-use assets | 7,262 | 6,756 | |||||||||
Interest on lease liabilities | 1,464 | 1,247 | |||||||||
Sublease income | (75) | – | |||||||||
Total lease cost | $ | 19,852 | $ | 16,465 |
(Amounts in thousands) | December 31, 2023 | December 31, 2022 | |||||||||
Cash paid for amounts included in the measurements of lease liabilities: | |||||||||||
Operating cash flows from operating leases | $ | 18,560 | $ | 105 | |||||||
Operating cash flows from finance leases | 1,462 | - | |||||||||
Financing cash flows from finance leases | 6,782 | 6,027 | |||||||||
Right-of-use assets obtained in exchange for new operating leases | 19,030 | 30,133 | |||||||||
Right-of-use assets obtained in exchange for new finance leases | 8,245 | 829 |
December 31, 2023 | December 31, 2022 | ||||||||||
Weighted average remaining lease term (in years): | |||||||||||
Operating leases | 5.28 | 5.62 | |||||||||
Finance leases | 2.73 | 3.28 | |||||||||
Weighted average discount rates: | |||||||||||
Operating leases | 7.1 | % | 7.1 | % | |||||||
Finance leases | 7.4 | % | 7.4 | % |
2022 |
| $ | 5,899 |
|
2023 |
|
| 4,620 |
|
2024 |
|
| 2,435 |
|
2025 |
|
| 1,364 |
|
Total minimum lease payments |
| $ | 14,318 |
|
Less: amount representing interest |
|
| (1,524 | ) |
Present value of total net minimum lease payments |
| $ | 12,794 |
|
Less: current portion of net minimum lease payments |
|
| (5,136 | ) |
Long-term portion of net minimum lease payments |
| $ | 7,658 |
|
(Amounts in thousands) | |||||||||||
Year ending December 31, | Operating Lease | Finance Lease | |||||||||
2023 | $ | 11,694 | $ | 7,868 | |||||||
2024 | 10,999 | 7,529 | |||||||||
2025 | 9,415 | 4,088 | |||||||||
2026 | 8,318 | 941 | |||||||||
2027 | 7,533 | – | |||||||||
Thereafter | 8,117 | – | |||||||||
Total lease payments | $ | 56,076 | $ | 20,426 | |||||||
Less: Amounts representing interest | $ | (9,600) | $ | (2,420) | |||||||
Total lease liabilities | $ | 46,476 | $ | 18,006 |
Operating leases
The Company leases office space, equipment and vehicles. The Company financed vehicles, certain IT, and other equipment under the terms of 3 primary master lease agreements accounted for as operating leases until September 30, 2020, when the Company converted the equipment and vehicles to capital lease as referenced in Note 18. The Company now leases nearly all equipment and vehicles under capital lease agreements and all office space under operating lease agreements. Rent, vehicle and equipment lease expense for the years ended December 31, 2021 and 2020 was $5.8 million and $7.3 million, respectively.
Future minimum lease payments for the remaining operating leases for equipment and rent are as follows for the years ending December 31 (in thousands):
2022 |
| $ | 6,845 |
|
2023 |
|
| 5,125 |
|
2024 |
|
| 4,512 |
|
2025 |
|
| 3,773 |
|
2026 |
|
| 2,956 |
|
Thereafter |
|
| 6,432 |
|
Total |
| $ | 29,643 |
|
20. Other
The Company is subject to legal proceedings and claims which arise in the ordinary course of business. In the opinion of management, the ultimate outcome of these matters will not be material to the Company’s combined financial position, results of operations or cash flows.
21.
On February 11, 2022, the Company closed on an offering of common stock in which it issued and sold 900,000 shares at an offering price of $16.00 per share, resulting in net proceeds of $13.7 million after deducting underwriting discounts and commissions, but before expenses of the offering. Also included in the offering Mr. Bowman sold 150,000 shares of common stock. On February 28, 2021, the underwriters exercised their option to purchase an additional 157,500 shares of the Company’s common stock at an offering price of $16.00 per share, resulting in additional gross proceeds of approximately $2.5 million. After giving effect to this exercise of the overallotment option, the total number of shares sold by the Company in this common stock offering increased to 1,057,500 shares with total gross proceeds of approximately $16.9 million. The exercise of the over-allotment option closed on March 2, 2022, at which time the Company received net proceeds of $2.4 million after underwriting discounts and commissions. See Common Stock Offering in Note 1 for further details.
None.
56
Bowman Consulting Group Ltd. | |||||||||
By: |
| /s/ Gary Bowman | |||||||
Name: Gary Bowman
| |||||||||
|
Signature | Title | Date |
| |||||||||||||
/s/ Gary Bowman | President, Chief Executive Officer, Chairman (Principal Executive Officer) | March | ||||||||||||||
Gary Bowman | ||||||||||||||||
/s/ Michael Bruen | Chief Operating Officer and Director | March | ||||||||||||||
Michael Bruen | ||||||||||||||||
/s/ Bruce Labovitz | Chief Financial Officer, (Principal Financial Officer and Principal Accounting Officer) | March | ||||||||||||||
Bruce Labovitz | ||||||||||||||||
/s/ Stephen Riddick | Director | March | ||||||||||||||
Stephen Riddick | ||||||||||||||||
/s/ Raymond Vicks, Jr. | Director | March 12, 2024 | ||||||||||||||
Raymond Vicks, Jr. | ||||||||||||||||
| ||||||||||||||||
/s/ Patricia Mulroy | Director | March | ||||||||||||||
Patricia Mulroy | ||||||||||||||||
/s/ James Laurito | Director | March | ||||||||||||||
James Laurito |
57