NVEE - Earnings call transcript Q4 2017

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Operator

Good afternoon everyone and thank you for participating in today's conference call to discuss NV5's Financial Results for the Fourth Quarter and Full Year ended December 30, 2017.

Joining us today are Dickerson Wright, Chairman and CEO of NV5; Michael Rama, CFO of NV5; and Richard Tong, Executive Vice President and General Counsel for NV5. I would now like to turn the call over to Richard Tong.

Richard Tong

Thank you operator.

Before we proceed, I would like to remind everyone that this conference call may contain forward-looking statements within the meaning of the Safe Harbor provisions of the United States Private Securities Litigation Reform Act of 1995, including statements concerning future events and future financial performance. contained these actual qualified from results by forward-looking that that important those cautions the cause could to statements company statements by are factors reflected The herein. differ materially on All forward-looking the hereof, as update the and required available to the assumes obligation statements company date no information company such statements on to by based are except law. release remind be and replay of by will also available I the the webcast today's Investors company's would this the a news also section of everyone that like provided via to link website. call rebroadcast redistribution, retransmission NVX this Any way any without strictly is expressed or of of consent call in written prohibited. the Global

Michael begin of results Officer, for Rama, Chairman call the fourth from comments a and review will of NVX, Dickerson XXXX financial the CEO returning year the and full Wright, XXXX. to Chief We before quarter and Financial with over for outlook call

for Dickerson, open We questions. please your then go-ahead. the will call

Dickerson C. Wright

fourth us December and Thank of thank Richard results NVX's ended a the today After conference the quarter you full news everyone market close our fourth full we and you joining year for announcing XXXX. financial call. issued year XXXX for quarter XX, release to the and

Profit fourth that increased in earnings announce share increased increased are lines $X.XX $X.XX pleased quarter. EBITDA of fourth our in so compared total been minimize per continued per quarter revenues to XXXX among the has Adjusted XXX% fourth highest service increased we fourth of We XX%, to all per and income XX%, our the net share revenue despite our quarter quarter margins increased XXXX. our second backlog quarter the the four revenue to our to consultant In fees. share slowest quarter for and and XXX%. the the of far quarter generating quarter increased historically being

has XX% XX, year-over-year A are report full revenue year also December the of year. record income and phenomenal of increase a truly XX% to for and EBITDA XXX%. ended a XXXX. net We been XXXX pleased increase increase results of

experienced have growth inorganic in each verticals. five We resulting of significant our wins of

of me Let the some highlights. recap

Our We've providing and on over gas with compliance growth. inspection projects tremendous work XXX and has environmental announced pipeline pipelines major Canada environmental miles two West on Trans Virginia team in Virginia. seen of our

pipeline the We highlight our new in contracted we've group. to Associates million XXX transmission trail power has a stable expect we contracts this utility also mile energy see projects. feel which acquired growth Marron national from so September more strengthen revenue Southwest XX energy gas teams which in like also added companies. and announced XX we in footprint our will on group would work our even states lead natural come in to to transmission, continued fees From energy to from which I more will million

the Hong We us engagement. our also we Design. national for and work is a announced of and Kong This good the in technical XXXX Center. further densifies that Butsko platforms. Earlier to on of energy leadership revenue announced acquisition providing our subscription grow Butsko platform allow resources based in additional Utility award recurring January Convention example Exhibition our

of begin some hope to great registration process. projects see that additional and within the York in our our with is Building to million in almost six our New the we've and city's contract moving work XX XXXX recent Kong months. X been registration now Hong Concerning In Services on CFA selling. acquisition which cross most million vertical next the quality seen strengthens City we underway underway examples densifies through infrastructure fees had assurance construction on of various and Contract Our of commitment footprint. is international of

to provide will for water be and Group has Kull and in to Area projects Central Our and the management Holdrege Bay in acquisition experience of material infrastructure expertise and project and our we with testing providing Infrastructure teamed ground PM California our teams.

Merced to California on and Parkway full management administration Our project construction million provide previously vertical campus a management has the $XX county's construction, project project. County, announced with

relationship We continue revenue by Caltrans to in both and expand and all our in with backlog increased evidenced districts XXXX XXXX.

Our pipeline remains M&A solid.

to We growth to confident goal feel growth achieve continue be our rate XXX through million in of active on but XXXX. targets run value acquisitions organic revenues of verticals. by that add have to our end and I selective will with that us all service schedule the of our

positive of take moment to Jobs opportunity. discuss and a on Act Cuts Tax capitalize and Now to of XXXX plan this effect I to the like the would NVX

the our As of our employees. like you sharing December profit In to for is people. I turn the have want with quarter for to We outlook XXXX. positive reward our Tax shareholders say our and to success strength now a but use real times not and Chief Rama XX, our fourth Officer, share contribution regard of overview XXXX the year employees. also to all the to only many financial to the plan the over for has full our our our results XXXX would detailed doubled Financial Michael. for for Michael heard NVX call more Cuts me this ended

Michael P. Rama

Thank and afternoon you everyone. Dickerson good

year last were XXXX of quarter increase in quarter year. quarter an the net for the quarter million revenues provide to closed the of approximately a million review of will XX% acquisitions contribution compared and XXXX. XXXX. as due compared revenues quarter the the fourth growth net of XXXX. X% gross million, quarter or XXXX. from increases $XX.X $XX.X revenues XX% to of well million as XX% $XX or the EBITDA $XX the then million, XX% for was fourth from in fourth These of were the for of organic the XXXX fourth revenues full in during outlook XXXX quarter of $X were and for of an of I Gross of increase fourth fourth results fourth will to XXXX I company's First, revenues Net

tax the XX, the fourth increase XXXX in Tax earnings the Cuts During of $XX.X of a the XXXX Reform. XXXX million as income of income XXX% Jobs fourth of reflect the quarter compared December benefit onetime $X.X to of XXXX. the of share net million an Thus million, on from quarter and net Tax income XXXX was and enactment Act $X.X quarter in known fourth XXXX net of of per

was XXXX. Act Reform impact earnings net intangible of $X.XX per versus XX% XXXX, excludes $X.X Tax in an been to per acquisitions of of income the quarter XXXX increase compared Excluding assets share share XXX%. the the the million, per a adjusted which quarter have $X.XX amortization would impact of Fourth quarter share of fourth of fourth the of XXXX increase from an

XXXX. impact in the XX% earnings Reform, adjusted of XXXX versus fourth the quarter share the $X.XX compared of share, per quarter was Excluding earnings share XXXX would increase per XXXX. of $X.XX fourth GAAP of quarter to the share $X.XX have per Tax been share an Fourth per per a

of been Excluding the increase per compared XXXX XX% earnings impact per fourth have of the the to of tax $X.XX XXXX. quarter GAAP share an share, reform would

XX, ended of earnings ended Our shares for the compared XXXX XX.X million shares year to December share average average per the XX, GAAP fourth XXXX. full outstanding the adjusted reflects full million December XXXX of weighted outstanding year shares quarter shares for and XX.X weighted

due we'll when ended were of Gross full XX% increase to were full year year for from million, Net XXXX for income the XXXX. of $XXX XX% of million $XXX was for full onetime year organic XXXX XX% an the to for well full net Now by XXXX. and of XXXX million our for tax XX% revenues, Full year XXX% increase when year to $XX.X million million the increases as $XXX revenues year from an revenues Net of review increase income the $X.X were as year $XX.X compared the XXXX. of XXXX These compared an $XX growth the acquisitions an of the compared XXXX income tax results full million. EBITDA the to XXXX contributions increase million. full year reform. XXXX. XXXX during million, the for earnings per was full share benefit closed was for of impacted net of XXXX or $XXX net

of the from full for impact $XX.X reform, the million, tax increase income was to net per have XXXX XXXX. XX% $X.XX earnings full XXXX been of would per the for share compared of Adjusted year share an share, XX% the full increase Excluding the $X.XX year year XXXX. an per

per been shares, adjusted per full share to for full earnings of earnings year impact would of have year increase over compared $X.XX XX% full per increase million tax share to XX.X the Excluding XX% XXXX. share, of the $X.XX per share compared an GAAP year an $X.XX XXXX. for was reform, the XXXX the XXXX

share reform per XXXX. the an would GAAP Excluding been full have to XXXX of compared the per impact of tax $X.XX share, XX% earnings year increase

As from of of XX, were our million reported $XX.X XX, of $XXX backlog December million of cash At XXXX and cash an the $XXX December million, of XX, compared XXXX. XXXX $XX.X December company as million to December increase equivalents XX% XX, as XXXX.

XX of Our a over month backlog to estimate period. be an is rolling recognized revenues

XXXX. to on outlook moving for our Now

are XXXX progresses. will year we revenues which initiating as per share We refine for guidance the earnings and

expected XXXX of of We to expect from range to million an revenues increase $XXX $XXX Net XXXX revenues $XXX XX% from $XXX of million. revenues XX% to XX% represents $XXX revenues which $XXX of to represents to million. range from million million is XXXX to increase full year from an million XX% net gross which

per share XX% of share, increase We XXXX per expect range an to adjusted year from to $X.XX $X.XX full earnings XX%. will

This to share the $X.XX our to earnings questions. full year This guidance remarks and the XXXX. range per of per year compared from expect $X.XX full We now excludes the like for we your share will open remainder share XXXX. completes share anticipated per to per prepared XXXX for call GAAP for will acquisitions $X.XX

Operator

proceed. question from with will ROTH Instructions]. Partners. Martin Jeff And Please our come [Operator first Capital

Jeff Martin

Thanks, good afternoon.

Dickerson C. Wright

Jeff. Hi,

Jeff Martin

you Can me hear okay.

hearing Federal Dick of Infrastructure accordingly Bill right and agencies could you acting what Okay, local in various us settling wondering I on update give terms and are government you're an state now? how was if

Dickerson C. Wright

of course will more Yeah, answers will answer be question Jeff be to macro. of -- most my the

infrastructure the a need only discussion for a of We wind there's have at real our but tremendous back, of there's amount it. not

right that significant now addressed, think seen and I we funding So matter it's are a from the since that Act haven't have as benefiting of Fast I from But billion any can we [ph] we seen I number think the increasing Bill mention been and and we I $XXX now it's what being see a states tax. funding gasoline it. has think the of from how benefiting bills are I

I there state a But be thing. first of it the that's think means in So it. we've other to seen of I taxation number also think states different fund and will

we How approaches the capturing focus it, know seeing. on are we municipalities we with went what just approach how with is as you and that the So working over this around market, NVX municipalities local country. XXX

state to agencies for benefit infrastructure those be that So also transportation them a we tried the from resources. resource that the big have would

local NVX to position So there's a and we'd capitalize on federal modest infrastructure to for municipalities funding like for that.

Jeff Martin

give in your expectation, decisions were of Okay, and the then of York was larger that's like there in are any that in sounds It with yet where of helpful terms some New you there us contracts any noise revenues timing conjunction a versus was delayed in QX. or sense quarter there other could timing? again

Dickerson C. Wright

rolling going to not to record to and recognizing went New the because Jeff always the work. with have when But we for process build do agency through backlog I we're tremendous award the doing the from process are a of we the specifically. expectation backlog would a sometimes York projects York on approval New delayed thanks We what quarter. say

were I But as be far higher than than of have on to but But revenue So and rather I -- and issues know being there on I the of expect more the delays our this don't in we -- country. had the quite the guidance we so guidance of really end robust a importantly really delays for seen fact didn't in but the XXXX even this little because we're guidance. stronger -- because am the bit and did all lot we I as of business be recover. But the areas right on the at like weather we as we just project quarter end some there. to superstitious our is a you and is say never on is it times business but backlog strong want of is lower

particularly of mostly tremendous the the it with associated amount Northeast York. So, quarter did see the up in delays the we in and fourth were New City that just local, of

Jeff Martin

in for of what rate in QX? Mike. guidance was and the XXXX then couple Okay tax for for assumed intangible your a amortization then quick and items secondly What's Thanks. dollars

Michael P. Rama

tax from In effective obviously it expense the our and are guidance the for reflecting XX%, amortization we is tax the intangibles XXXX using QX is is rate reform $Xmillion. the reduction

Jeff Martin

Great, that back in is helpful. I queue. will hop

Operator

come will question Street Capital. next our Rob from with And Brown Lake

line is open. Your now

Rob Brown

Good afternoon.

Dickerson C. Wright

Hi Rob.

Rob Brown

Could general certain growth it some driving strength I but the backlog maybe certain of know verticals, or geographies characterize sort of is board the and you on color some is said you things backlog it across the just the the drivers? growth,

Michael P. Rama

revenue Rob California. course of Well from a significant amount comes of our

backlog country But really see in we and see some great growth, it certain a tremendous in across the by disciplines. California. growth So the -- we double-digit we're seeing

area as gas of natural gas that an improving because you pipeline hampered. was are of pleased certainly the -- additional We being happy very know natural see the in work business because was rise gas and and to

time see an this also business and growth generation our lot country. growth seeing also a the We're the growth we're macro the don't growth our of in some are pent in and a lot California on are business is in And and generation that the development in generation and seeing land we in backlog some But power first seeing energy we energy almost in seeing in seeing production impacting positive expecting we're that private businesses. in contracts. So transmission of estate in pipeline depend transmission sector in every also. is we business. mainly and significant our But the area delayed I've overall solid Northeast up energy the we some growth picture that awful the our growth although geography because seen in in disciplines And areas real Florida. then then

Rob Brown

organic where you terms goal? to sort in growth growth and you're component of guess rates of acquisition are organic of I you that kind your at stepping when thank rate then your of to Good, back, get discussion in XXXX goals then and thinking the

Michael P. Rama

amount in our Well in than drive a at a we it organic so our in of marketing us -- growth, and but some time of our course budget tremendous programs. improvement guidance of XXXX acquisitions to that about looking takes or we've really that their little also are -- given with less have X% profit is

growth when us only they've So we as we have piece acquisitions that of join to joined business organic account us. as the on

So, the is precise -- it's a it little as not on pure organic growth.

it's On very the macro accurate. picture

anticipating our think I and we X% we process. So are this year in budgeting can expect X%

Rob Brown

will great, you. Okay, thank I turn over. it

Operator

next question with Seaport from Mike Global. comes The Shlisky

now is line Your open.

Michael Shlisky

guys. afternoon Good

in So in give might has using to sub-consultants of looks been of on with as I when color the you're wanted your that in a like there, as with XXXX?. that and sub-consultants both what's some off change start years more it line, the dollars highest you can going number to revenues, percent us

Michael P. Rama

quarter that XX% around got utilized running work still XXXX New actually little a to some projects anticipate on did we bit, sub-consultants. up in we some that York XX%. know had spike more You -- The fourth

but the that Just was those a than of looking the still macro from XX% projects quarter mix around sub-consulting to on overall perspective a the basis. in we're at XXXX at realm less

Dickerson C. Wright

than by a impacted Yeah, and higher our XX% of requirements quarter to XX% DBE is little we've to about make extent Mike our and even sub-consultants the add more is are that any said, most than just that. a work public to the seen what mix minimum up public because

really heard progress. -- mix of as in if have know you see you swing one to the a you've we any work many -- measure is say me may impacted can't times there's something to but real So public you as quarter

of and the And third sub-consultants targeting come in we're from targeting now so about process down a and we're XX%. we've high almost a over know XX% budget I

Michael Shlisky

the to going sense structural stringent new that area? give trends have as integrity are and that the less Okay, changed us the actually safety in environment or environment, give or with where gotten health as I kind can sense greatly regulatory where a -- they a can you mean you in us have to the administration, of and pipeline presidential things surrounding

Dickerson C. Wright

regulation. Well, regulatory supporting requirements obviously and our business on based is

and So, general projects released total are you position. more or released seen of requirements not number just the or be I to so targets them There are get quicker, -- can on give have have of that of the many we projects If projects they and I anything are in environmental projects wouldn't any that approved. our by that the of any view have are there after safety projects so affected. lowered approved yet more being projects. -- not go gross anything we are the has standards already health number been And the the benefiting really

we anything regulatory we projects permitting it's be opposite the going this on retroactive not were line as many we're So more in of administration if lesser requirements move coming the seeing that to as but but is that may with see of process. delayed forward

Michael Shlisky

Okay, forward? model to for get the sense us to D&A margins be the purchased think give going to figured out try months is quick the what run when facility Again for okay, a you rate and as last here. do the question you and I related a few as expenses just going the just

Dickerson C. Wright

our that we for surveying is amortization this much year, Kong legacy cutting this same. of long really which edge what a design our The made plumbing we've is like, depreciation firm don't services. entering a to month than small in increase really with which acquired that and a depreciation built depreciation last standard is. -- in a had a or and this as in LiDAR acquired Oh, higher and speaking and history XXXX we we in XXXX continue -- that with electrical aerial our depreciation much in And firm. Hong drone stay tremendous amortization you're not they see year acquisition into it's bought We we the pretty mechanical mapping We've that into and is.

I'll As will amortization far that as price good Mike. leave and the to

Michael P. Rama

Yeah, Mike I the was for as the million our just of intangibles. on mentioned the was quarter earlier side million $X.X X amortization around that depreciation amortization and and

go you had that mix to expenses with expected we've still to is those if that, the with date. So will given forward acquisitions

be pretty should so expectation And much going forward. that

Michael Shlisky

other new XXXX? the on in up does accelerated acquisitions then with And on ramp question that where the expenses,

Michael P. Rama

costs that diligence. to X.X% we around Our been our if running and go could due we X% continuing facilities see integrate it look at other and together. offices anything do as as that we decreasing be We

that very look the as and So within diligence. at our groups we carefully go metric due through we acquisition

Dickerson C. Wright

facility We're and X% standard has the running expense industry on mean been industry under in X%. the almost to middle revenue

Michael Shlisky

got jump very Excellent, back it. I queue. you in Thank will much.

Dickerson C. Wright

you. thank Okay,

Operator

[ph] with The comes Janet Research. next Singular Ishwar question from

now line Your is open.

Robert Maltbie

Hello, Maltbie. I'm this Janet. is in Robert sitting for

guys. the congrats quarter, Solid on quarter

Dickerson C. Wright

Thanks Robert.

Robert Maltbie

questions Few number yet. you quick my sure been Do went not I'm a backlog phone and on have asked growth? if year-over-year silent this your so has

Michael P. Rama

we Yeah, acquired, acquisitions year-over-year. our in brought the backlog. our was organic XX% backlog we that year did growth was it during -- growth on our But

our [indiscernible] around So organic budgets consistent our growth and so our it's X% backlog. and growth with filled in

Dickerson C. Wright

about was last million And you year million total backlog to XXX see XXX and million. was as XXX

So, is if in it's XX%. total growth backlog it

Robert Maltbie

is that most and so consistent? you vertical margin verticals, pretty and really pick anything it solid environment is that a is you quite growth in Wow, there a like country or across the of and the never say as your showing -- the up better see

Dickerson C. Wright

-- environmental are XX%. gross inherent that tend gross margin higher gross have which higher a Overall That's sciences business There very is margin margin that good that our question. businesses margin. a a almost to some improved have has our

forensic significantly vertical than particularly Our part program the is margin side have I tends higher above And gross is and gross XX% management in group group decent their higher of to a our XX%. business gross margin XX%. our higher which margins when building CXA to in say then

all the platform have gross is and So, areas areas the the those. in that infrastructure look overall which scalability higher of those And includes we are where for margin. the includes it then

driven our gross is and go the revenue of to a the so Hong the a do have subscription whether trying of where paid is fixed increases obviously have for what on And based because is number higher thing the where you're revenue we're Kong costs margin one what many gross to tends Robert many doing work, have then labor our much. we our as Convention reoccurring is employees projects like Center margin And of utilization the it stream been optimization main that utilization. to not

Robert Maltbie

mention give or any you did anything the for color and pipeline or Terrific acquisition for guidance XXXX?

Michael P. Rama

great great, a Yeah, question.

acquisition very get of goal The movie to Let me is up have comfortable We said and adding much growth. first. through XX% through give the we by this is will that actually hit our we acquisition, that our be XXX that. feel XXXX. the from there XX% it think million people, mix end ground will We of about than the in organic more

acquisitions We at had in with Robert by larger we're higher it selective, by represented tend industry margin EBITDA, we that but to operate revenue to by and margin. growth, really opportunities tremendous gross a spike is very that have

service we large but and we're line. continue and to that we and makes processes make to have going to opportunities We keep our our for key do be much it we at and geographies us very that that internalizes on internalizes platform organization our be looking not selective. want duplicate anything something drive We want process. have thing it's that want don't or services very we and opportunities have is and have we we the we we the opportunity already sure we and want we had larger to to have be already as So densify where have ones now opportunities acquisitions -- acquisitions building

the amount a is due but want now want say we diligence have much, we and our the process significant very, thing we We're growing and than that don't I say to we shareholders we for no, very much is is opportunities. active. forward you we now yes. I thinking But too have in right get the robust to can on pipeline continue very more have acquisition So high a tell of which delivering main returns going process company. much

Robert Maltbie

and you between with with this possible this the and California in is any theoretical being final and more thinking this of your exposure queue, Fed emergence get you largest back Thank brouhaha and the the do -- are burgeoning funding substantive, there? State in question so really you state, I'll maybe than of -- about California

Dickerson C. Wright

we the think going I really eighth address going But is California so penalties is or I it's things stop the the those effect through world. some I -- judicial Supreme this to can't any Court and if tremendous Well, to to thing things extremely hold the strong that take is the going Right of seventh of we the before what's can't -- to picture, think is so a it's immediate and amount go in process any is is economy largest going like to now it overall anything say backs California right It or it's control. even now. and or there to just many economy before has enacted.

fall end and like investors the the end and of off many that and within it us of have going So the been many to we XXXX is us with in since say is Robert that XXXX this [ph] at Great the still Recession California started cliff. what company of I of was people to

the California, and -- budget one is belt we Sun are I in would of significant work ongoing just your going wins in Now seat Belt and forward us I say just there have states, are strong continuing because for that so Florida that our mean is some and fasten opportunities Southwest. the

Robert Maltbie

Dickerson. Terrific, you thank

Operator

Instructions]. [Operator

from follow-up We Jeff question the line of with Partners. Capital ROTH have a Martin

is line open. now Your

Jeff Martin

recently. tally I bought if to that categorically my curious Dick -- of hey specific help two you more of could in Thanks, range from do million look in focus have was you and and the you then major XXX about --? you about can areas close to you're if that expect XXXX in just last continue environmental excited just revenue areas have us kind more Should XX years, been million any of XXXX, energy XXXX. we million we two XX our in back curious if to But bought

Dickerson C. Wright

for vision think having is -- see acquisition and Obviously I like would one place prophetic for we that that the you would man are strategic be my to to look our but we will support be I I to are the I it platform will so said more blind that say going really introduce CFA is us we with the us. be you which us for to very need with which level new doing the X government Hong us side what clients service is like done which mentioned in has well And for Butsko Kong other to gets many mandated to projects. that lines

will we So strategic continue to look acquisitions. for those

it's million. larger opportunities million acquisitions when say XXX usually XX and larger now to I the for we're having much However

should -- feel will big. were Speakers]. Jeff those So But easily… we that we maybe we [Multiple

being We have that so have densify the acquisitions our selective selective the of we larger. wonderful more in we blessing and will of and be platform opportunities

acquisition have indicated, to if the XXX million you're fair million conservative don't the I that revenue conservative per number in you that's XX an penciling number. revenue very a very So is know but year

Jeff Martin

helpful. Thank That's Dick. you

Dickerson C. Wright

Okay.

Operator

question-and-answer At this remarks time for I to this concludes session. back call would Mr. Wright our now turn to over like closing the

Dickerson C. Wright

to am interest humbled fact. proud Well, for and another feel thank say everyone, I your just great appreciate important and an and it's year having NVX you we by

something for continue something employees. build for build shareholders and We our our to

have our company opportunities continue we continue we companies but our benefit more good a both what So to and the lines, geographies, we our the the in know, think grow that and is employees shareholders process to our we are we year through and service process acquisitions. seeing had I will that know, and is more and

-- see and company our and we improvements feel We capture more organization. bottom people we our by through as integration to our supporting having to and continued as really grow We more acquisitions synergies think an we the are able expect can in we line. as --

a be flat this You've many NVX an people of puts heard best in me organization, our times, client. the that organization say for to front look

as that, we long great as what we very we what we as about stay can focused XXXX. do have upbeat feel So will we continue long that and year. a we hope to as on do know We

I in So to that this happen NVX. made our employees again that investors our want believe once thank have and

So the for quarter's forward everyone. you look we you again, to to and thank speaking you with Thank thanks again results. listening, first

NV5 Global (NVEE) 8 Mar 182017 Q4 Earnings call transcript