NVEE - Earnings call transcript Q1 2022

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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 First Quarter 2022 Ended April 2, 2022.

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

Richard Tong

Thank you, Operator. first earnings NVX’s to everyone quarter call. XXXX Welcome

based to like everyone slides about that cause are and that we the reports These file company’s to uncertainties. proceed, in actual are included discussion remind SEC. would Factors these with I are performance. financial statements Before today’s expectations materially to contains our from statements and business in and risks management’s on current future, and results subject the could differ forward-looking today’s presentation on

financial During discussed. the quarter this unless that release at two comparisons XXXX quarter on call, will GAAP Exchange website first and non-GAAP presentation adjusted they the adjusted into included to XXXX as certain non-GAAP promulgated made XXXX. G In margin. first of note, EBITDA non-GAAP earnings under A results. Non-GAAP is included measures NVX otherwise GAAP are financial being additional financial supplement NVX’s Regulation measures provide measures this measures Act stated today’s and provides insight per NVX share, be of company’s Please presentation, the in EBITDA adjusted on earnings defined all measures in Securities the reconciliation financial and as references has against between www.nvX.com. the as amended. financial available are to this

for or substitute should considered in be a tools isolation not measures not non-GAAP and as are in limitations However, accordance analytical have and GAAP.

webcast on this the in limits and ability non-GAAP of section used are news measures link addition, presentation companies. the by those company’s Investors other define compare of via replay release to today’s available call In of NVX website. investors differently, of may and provided accompanying measures A the the companies its also non-GAAP to which peer

call quarter for questions. results. review call Officer will with Dickerson the Wright, first then go provide Codispoti, to before of CEO Dickerson, NVX before the Chairman XXXX we turning of We Financial your for call please Dickerson from a the and closing over comments comments the Edward begin will Chief Wright open ahead.

Dickerson Wright

you and call. thank Richard, is you, joining Thank for everyone to today’s us that

will investor presentation. deck use an the to during have notice You for we provided you

on we our let’s XXXX $XXX deck, turn million, to will Gross investor XX% the of that discuss revenues where results. first first slide XXXX. So, five a quarter increase over quarter now were

million per was EBITDA the million, adjusted first over first driven million shares XXXX earnings XXXX. service XX% shares Adjusted verticals XXXX increase XX% the Growth $XX over Even XXXX. the XX.X geospatial core of quarter. QX business Our share $X.XX count QX quarter in increase from share, a per and to line. share XX.X in was rose of a across was though all the

to growth. pandemic, continued strong of continue we mergers Although, and the environment with see growth. organic difficult a NVX growth, in live COVID a wars pipeline recorded million opportunities and positive $XXX we opportunities has for acquisition and global backlog with for

for net the macro cash and an also positions M&A for growth world strong. flows serves us and position year. in safety cash a as Our uncertain through This remained

the Turning discuss the to opportunities and will page year. quarter six, for balance we highlights one our of

will robust. remain from all verticals, we growth six You see our which highlight

all in budget strong energy of geospatial We and services, for efficiency, transaction environmental are growth exceptionally XXXX. utility are seeing services, projections our exceeding which

opportunities activity seven, to see go that place either page we Let’s going forward will acquisition where that we for or now taken discuss XXXX. has our

services to California. plumbing and services. of we of of us Southwest. construction the the or quarter Fulton the our Consulting strategic two kick two in tech quality the our electrical riverside our in Bernardino efficiency services MEP River our energy to year, Southern City and MEP expand Engineers allowed San and further strengthen in and one counties, testing further completed construction During largest beginning engineering this strengthens acquisitions in mechanical counties services quality

XXXX. infrastructure expect in and acquisitions geospatial future see to larger We in

same, model strong backlog I which the continual briefly company acquisitions Our like for indication history mention of advantage, On would a profitability. growth, for culture, remains to of gives of competitive and our strong the XXXX. growth page the eight, a

Our one XX% in XXXX. quarter grew by the of same of in quarter backlog XXXX period over one

us organization’s you page Now turning cross growth. nine, our internal component to is selling times, as of heard have mentioned major a many

and inclusive network cross-selling sales for locations network. Our the office increases very the through inner between has NVX been

increased our million for to XXXX million the XXXX. from have cross-selling $XX.X We in target year for $XX.X

Ed Ed. to our overview transition performance. our quarter presentation now to Codispoti the of financial provide first an will CFO, ahead, We Go

Edward Codispoti

and Dickerson, everyone. you, good afternoon, Thank

If turn of presentation, our please first highlight I slide you some of results. financial the will to quarter would XX

revenues of XX% first for by the period over in quarter same gross XXXX Our XXXX. the increased

the If strip was million $X.X year-over-year XXXX, first XX% XXXX, $X.X of to increased first acquisition-related in of increase. you Net income our revenue, in compared to our incremental quarter growth XX%. a quarter million the

Our million in adjusted XX% increased the year. million same last XXXX $XX.X of EBITDA from $XX.X first in quarter period to the

in $X.XX relatively we flows increase. on cash $X.XX can to the per the XXXX the On share per position. quarter, per Our first first to of $X.XX in from net a quarter quarter, continue XX% our low see the XXXX increased of strong adjusted first XXXX in in share to demonstrate first leverage per share you increase. slide XX% earnings of GAAP top XX, increased per share XXXX a share $X.XX quarter per earnings share And a from

the adjusted our our position sheet back believe cash for first was business and some excited of We we flows times will leverage our and model strategy which and positioning. are perspective turn flows times. million, well X.X of cash and operations remainder the With additional for $XX.X I balance about over XXXX. strong from for Our quarter that, us the net Dickerson our was execution our to growth X.X was EBITDA on it

Dickerson Wright

Ed. you, Thank

of XX slide to the presentation. now turn Let’s

year increasing of for XXXX, and million from we $XXX to year $XXX full to full million revenues to We guidance gross original a performance per services. XXXX strong our $XXX where share. share will from see to share increasing of NVX’s in strong comfortable per of per You outlook infrastructure $X.XX EPS based as an guidance million now QX XXXX $XXX on $X.XX now support in share for to all for our position $X.XX feel result to for million our XXXX, are per $X.XX of throughout adjusted

Operator Now to over the I question-and-answer would to to turn the like begin session. it

Operator

sir. you, [Operator Andy Wittmann will come proceed. Please question Instructions] first with Thank from Our Baird.

Andy Wittmann

got real I you have some a slide and those good seen question, we clearly today. starting bit environment, can a have commercial realistic you transaction I higher talked little rising a expect have guys. you high both historically what very the on and about rates challenging the MEP seen have Great. that I more evening, Thanks out, look world question to businesses I and is and to in good that wanted On where the you been of your and react on estate, more businesses services, of you my on that just estate economy? tell a that you have forward-looking that’s momentum good I real quarter on start stuff that’s around for Dickerson, taking that with you evident a know for basis how those. us have out put here rate interest obviously curious, a the am just mean, in

Dickerson Wright

interest That’s to a they often doing rates. sensitive how are subject their question, very and transactional and service ask, one because Andy, I real good it’s are we that estate in business,

busier thinking, fact, portfolio many results than In our to And the probably in one from operators that I group portfolio, but can’t spoke it have they could they much before ever they been. large away be the the get groups. to too services two could and are it go in be think on up. and transaction people trying very at the April of do I are things, area done key give interest continue we both today rate I those could see forward

our of are are could it’s natural Our this Global of erosion in area, rates services depending transactional recent operating those. and one that on there But thing very erosion, both at interest estate, to -- very, Clark real that be a type & there acquisition Bock could with strong. make the up be Services

realistic the same to That to try at we to see would at as rates we mandated I and are the it’s speak see as interest pace know continuing have how be to that is continue not very to subject in zero concluding comments, work our area end So to a interest strong. to But that continue very, services so the main that I it’s interest we and not really sensitive now. position now at from are they rates. what rate they what -- say subject our probably will company more we is can

Andy Wittmann

color. I for And was Thanks a wondering, I see. just guidance little the clarification on here. that maybe

know think in in here script the And rate the public in wondering announced guidance words, revenue that revenue not it acquisitions thinking about implicit if assuming that any acquisitions don’t any have in year has that has here, I organic quarter what’s is growth there I filtered there we XX% that organic future publicly updated I been here with the been was could your that’s the the the heard other was today? yet? the just and is the growth be in in in been acquisition markets that in for

Dickerson Wright

No.

acquisitions any assuming consider haven’t remarks. We in in two taken the that We I my that not future that. -- small not acquisition that we did in consider acquisitions. very covered mentioned strategic any We growth do are We were place. don’t

our any based remainder good though are continue what would organic our think or we now it for are we sill of the of work did growth, would growth gave we we from and feel X% our year. would mid-to-high going We when guidance, that first the digits at overall that forward still very comfortable quarter we that but So we rest with growth of a and X% be the include organic single may replicate the on organic anticipating acquisitions have. in of quarter that year. to hot the that guidance I growth so have anticipated we and through not say on did is

Andy Wittmann

Have leave Great. I you. will a good it evening. there. Thank

Dickerson Wright

Andy. Thank you,

Operator

proceed. Please question Partners. next ROTH Jeff from with Martin Capital The is

Jeff Martin

Good evening. Thanks.

Dickerson Wright

Hi, Jeff.

Jeff Martin

Great quarter. Nice to it. you? are How Dick. Hi, Hi. see

Dickerson Wright

you. Good. Thank Good.

Jeff Martin

rearview the you has business? QSI Dick, the how on that And activity, give delays been in a then government-related if I was curious are performing contract us geodynamics ties XXXX now in saw mirror little clearly with year tie we over into to the contract respect you if the that geospatial that bidding update an that and could awards, just with a go also well now? on in in

Dickerson Wright

Yeah.

to One, let, and of of our And we going included was our what have we the from am presentations we specific they budget. on are XX% he those XXth. things, have growth right is continue they -- of that fact, with on that I year. May on may a them Group a the organic this hopefully in and going budget Geodynamics in Mark during now. are happened, Abatto, of Day the budget that Let acquisition macro performance geospatial in the be And initiatives mentioned phone of are you me that specific year happy the some we but company, to mention. doing that let for picture. me President GeoSpatial right we some give and the growth rate the grow had speaking are about because up very anticipated Initiatives, year to I full Investor their

we offshore structure projections. at through ship the starting, of that. had a have acquisition do just be have of in looking that given is the they expenditure, that modified deepwater we was are before all to their is wind. Geodynamics some slight given -- do and them they able are do we capital weren’t project having to have ability their going one but revenue However, made to mapping a to that an we now delay has earn-out that of and They things

some am specific it, feel with free pleased have pleased year maybe, last if So there’s where for and there, would geospatial think what’s with specific you the Mark geospatial from -- area, we very the comment, like anything I initiatives to. why we that’s you are to is, I been work. certainly going think

Mark Abatto

be in. I’d jump to happy Yeah.

the large federal out large I very federal the slower, about in think indicators of the work as timely is close some of it’s saw that, in contracting to in a is awards through did bit start XXXX at what timing the and XXXX the and what same with the And The vehicles government but pacing in a we fashion. of roughly that those encouragingly we was cycle. are particular. working to matter a through that scale say to saw procurement little IDIQ future leading kinks

still very contracting They mentioned, different no vehicles is Geodynamics in made are well number of they expected. of resilience wind same beginning as as tailor which is Dickerson which delay a to are a been and demand the we incredibly there we for, doing encouraged So the for charting had time, relative The federal landing, coastal a in to very is are well. positioned sort It’s just grow market, well cable corridor proceeding that by offshore projects. than time. on At timing has in perspective. what some as

well. those as are come starting through So to

feeling are very the good on government side. we So

Dickerson Wright

Mark. Thank you,

Jeff Martin

helpful you -- of basis And for One on about a for detail. that. history that in the company. here. $XX a number in I model seen quarterly couple Yeah. line other questions direct year-over-year, the That’s the a million direct haven’t then as on a Thank range of increased have Ed very cost just the XX%

if there within should and And is, that things any the if second contingent Thanks. forward? that’s high was Ed unusually in number, about P&L for going an change question there to that contributing quarter? liability are how consideration we then Just this estimate curious, certain think

Edward Codispoti

Jeff. Hi, Yes.

which by pass at by to year In and the mix direct they is phase of in So business, are on our depending it -- particular, what more throughout costs with LNG other really respect times may the projects business. have of cost, primarily driven others. through

to particular with to would we on contingent that question respect pay And out. about off we during related expect quarter one So million consideration, throughout first to the year. normalize the $X.X earn your did

our targets, a acquisitions but hitting material, been a that not have just of sign is So, some which their thing. positive

Jeff Martin

was contingent that the more Okay. during around there any income the hit My change in statement question was the consideration liability quarter?

Edward Codispoti

Not in no. quarter, the first

Jeff Martin

you. Okay. Thank helpful. Very

Dickerson Wright

Yeah.

Operator

Research. Our next Please proceed. Singular question is from with Chris Sakai

Chris Sakai

Hi. for Lisa I am in Springer.

Just had some questions.

see, need services Let’s XXXX? of driving customers in increased NVX and you capabilities. what factors geospatial added see recently deepwater these types do just demand so What

Dickerson Wright

is this, that erosion and that up to agencies of Well, for of are those But But of application. speak and the -- of and be comment I am to further. our government going change a specific But speaking, for taken clients commercial seawall many environmental measurements Abatto any are go may in because the the let deepwater demand. to work to the of to and and really generally conditions. Mark, this want Mark the tend mapping mapping those measurements, speak looking not Mark clients government our clients you are

Mark Abatto

I think said. well that’s

in whereas we based where Government clearly to the for I driver think particular, a of example see solutions. are resilience, tape mapping, wind a some that and to developing, there energy more coastal well offshore under floor ocean and private great very and as opportunities happens it’s as space But balance terms that the full for depth NOVA, that will scientifically space agencies very sector. starting of providing investing a was demand. good is solutions we growth of In market a ocean where are real I think penetrated the being the we is that market some be see demand we charting before

Chris Sakai

Okay. Great.

mentioned your multi-site projects you customers developers type at Geodynamics underway. positioned of sense this not? last generally a of business or project result the for size would wind end energy opportunities contract project that average if type currently pursue a are us this the your of as your be give so well And more offshore of was our and Could to what of call you XX and for

Dickerson Wright

are up specific to power offshore very Well, Those may these They I Day on but we tend contracts. doing that want And to a six-digit though. we you bit initiatives that. would in tend you, the have do don’t be I give I contracts larger reason we kill be will that but on some am capture the speaking to answer, to so work. little Investor wind hesitant, to

that for I and And so those are the million. that XX measurement defer see that be, client with we has can each there. the those and But but individual, rather to offshore to -- and there a speak general -- We do our be being much I’d defer two going asked be wind we initial main developer some for we one that’s of Day, we particular just of completed, doing this doing on one have to think, on tremendous is offshore will $X to are, But general that to we with where there done Investor built those it should the you tell contracts wind fact the -- I market and is require being signed each what are have going XX, actually and built are how but I’d we visual are really having where specifications contracting it’s a ship for. measurement. contracts

Chris Sakai

I you for Services find is question seems your California. there opportunities lot suppose try had on Lisa Could you so and that Utilities business it in state? to comment from first. like Great. Okay. Last in me, acquisitions have of a on

Dickerson Wright

the Could you question repeat please?

Chris Sakai

that business? you Could you Utilities comment any opportunities the on are California seeing in sort of in Services

Dickerson Wright

from power transmission and there’s lot mentioned mitigation glad all mitigation in work issues being utilities and with a overhead have California, developed West, lines fire buyers underground In huge opportunities issues lines. them fire and reason. of you a major There’s putting am and with the specific I that Yeah. taking the for

think very for of is area constant utilities the design grid. that And we work a for there are power, and the electrical good opportunity and Western and that. area aging overall those a for mitigation so, needs there lot an improvement. is we Nation-wide, in so supplying The it grid are doing

there well. see opportunities some good So as very we

Chris Sakai

Great. Thanks the for Okay. answers.

Dickerson Wright

Okay. Thank you. Thanks for questions. the

Operator

question Rob Brown next Lake is from proceed. Markets. Street Please Our with Capital

Dickerson Wright

Hi, Rob.

Rob Brown

Hi, Dick. quarter. Nice

Dickerson Wright

Thank you.

Rob Brown

Infrastructure pending drivers kind and efforts, to you internal on demand understand or or wanted any environment me the on cross-selling the environment. Bills the other your from help own this going clarify demand of really Are I things of there? seeing just is growth strength

Dickerson Wright

Yeah. Well, that’s good.

what agree agree we and we done, infrastructure it’s we headwinds, Infrastructure water, you -- actual it to infrastructure delivery But rather not. that think as provide. improvement. pure from because that We little service, this is administration ground space. we over going We then actually work or projects of it’s infrastructure mandated, as than on infrastructure. nice can will up anything I something to probably water probably from absolutely, to safe on services down have very be that going is infrastructure a have seen are defining up have that That be roads very for the needs idea drinking I we support Maybe that definition as far tailwinds think Bill. doesn’t are the bridges, in like need clean the needs be that

So we to are hasn’t see I yet, government have Rob. the seen realization to funding expecting that we think come

Rob Brown

within that manage your do question you contracts, general or you your cost can environment to you then kind the And catch-up in of my government and a in similar structure on of you. -- Thank can period? trying and time adjust kind your Okay. place contract’s are just second but with play of some you

Dickerson Wright

it’s basis to most Well, we utilized. work, the I if we do want of so And most pay we don’t from they mean our have our people, our people the work. people, price staffing, based where unit know of on you the obviously, keep

support far can can. maximum capacity to utilization certainly think utilize are generation, So it wouldn’t we guidance we rate. the do but work. certainly revenue overwhelmed, we the are staff than that watch that only we We we more as would But the I the have say have we isn’t this guidance. people being to given But as I that at

Rob Brown

Okay. turn Great. Thank it I over. will you.

Dickerson Wright

Okay.

Operator

proceed. is Our Instructions] with [Operator Please Marc Riddick next Sidoti. question from

Marc Riddick

everyone. evening, Good Hi.

Dickerson Wright

Marc. Hi,

Marc Riddick

remembering looked could correctly, as to So I last slowly year, properly. if with, I weather bit geospatial wondering or I trying impacts last wanted had about a a to, maybe the that, year just am if that remember how around little to because Mark year the this year started start that versus talk I some if and little seasonality, am

Dickerson Wright

Mark for a you. answer have You right. will memory. That’s good that

Mark Abatto

the data Northeast, and time-to-time From was year. the snow that our first weather patterns, in collection in disrupt the Yeah. ice and of an last impact phase QX the particularly of do chain, value

I enough some The of this Utilities data challenges to spite that this being a difference situation year quite we think quarter us. to we We for bit XXXX first phase of available backlog. quarter part processing fourth those done analytics kind grow of the of saw of towards XXXX projects, a had similar stronger year. able the QX that is in as we latter with and of of we where of the the fairly a particularly large reason focused in our some well. why for collection time the in were The information entered in with is the

Marc Riddick

Quick year able I looking question a see. appreciate was Quick as guidance? count seem are particularly so certainly that It is which your at the just we this increase benefit switching so though still on, a share positive. to of there either, were assumption general for is you friend of curiosity, range guidance. didn’t idea of the weather necessarily that

Dickerson Wright

shares. We million using are the basically XX.X

Marc Riddick

Okay.

Dickerson Wright

from of but to up increase easily XX.X our an is million. probably could XX.X million, we Which go

the balance statement shares. shows million think I financial our sheet XX.X in

Marc Riddick

Okay.

competitive dynamic the Excellent. that deepwater, rest the way compared maybe Okay. as about looking as the there at and thoughts your was of are that far then of the in is part business I should a thinking company? of with what And there we of be to sort the general sort around

Dickerson Wright

really Mark can -- it’s I this on but Correct. driven. too, comment geography

-- not some work, There we a Ocean. as area We the have much do can that the measurement in Pacific still of probably that the firm deepwater but capabilities in is work. one Pacific Atlantic in the competing deepwater

is is know the now more probably a on who right landscape think you little Pacific. competitive I person that then a bit Atlantic there are if has that So, maybe is the can we competitor in And equipment has Mark, on like. the the the Coast is, And and main really expertise. of really comment the who you what and I

Mark Abatto

Sure. Happy too.

I and the think multi-partner. the the we But on advanced enjoy processing participate, of technology, definitely wallet is, those significant and We as invested the are government they have the under Dickerson differentiating IDIQs what the side in analytics. a contracts. share factor mentioned, under which -- we the how equipment,

I apart particular of that the number wind, think that into that part we the as market, very also But Eastern the space, the particularly sets a us under-penetrated in, expand is competitors, nearshore offshore are from we few environment. in cable play corridor landing competitors with in especially which Seaboard. very on

So and we really be like will our that’s position there investing. we where

Marc Riddick

So encouraging. very

Really So it. very appreciate much. thank you

Dickerson Wright

you. Thank

Operator

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

Dickerson Wright

demands you, where Thank would have what presence public I historically comments few structured that dependent first organization so to on economy. do been and the like work mind, clean back. is give sense to speaking, public not in of that, to usually that structured need our service entity thought market you no where have need to a drink look mandated have I say have Operator. they And we I’d and demands. should is their is heard we be the company we water, they and market always many structured we the to most And but on this to ranged, are, to are and NVX go people always to is. a this have basically be and go current over support times, have opportunistic at trends. work nimble XX% safe opportunities With was me and bridges

a There supply. demand, news following there energy and outstrips. of be different many the can and does be the those you know that geopolitical the concern. of So energy worldwide should reasons, apparent or very is energy have I we delivery international outstrips not all the supply been face it’s reasons, obviously, but news, the It could of sources say

space, are these systems anticipating conservation delivery from So our address concerns. will we alternative energy that on and increased an sources, focus

more will and investment be we investment energy So you over that and we can of NVX much prepared more there tremendous stated be where to this in going amount prepared has and support be North a seen see there all have to and want are been America, and at this is that. to

resources that will demand, the those. support to energy these about talking So and utility add that will of you and of XXth support, this, be reference that systems, specific see energy we be will an we having all doing May going corporate continue what initiatives delivery you have Investor on are we we are will Day existing tended heard and to grow be to to me do three initiatives and

to it doing help will cannot and be company. a are on answering to at grow and those hopefully, we am now anyone But see to and are will will encouraged the think and attend ways for this how initiative, May investor what map invite So questions. focus there new and and and deliver come will corporate any to we fair. three attend I a on we also who -- we introducing is in XXth be be I that website Chicago person, about grow it’s in many to from very we Day those and systems we presenting to tremendous Investor those supporting be that, the see you energy the level will will you those

higher the we be we said can that at before, we times in it’s economy very that be, We interest live could and will NVX important all is those support by affected may know we we opportunities services. anyway, from as and that not So, demands change those for can be our by with things changing very I can affected that rates, change. of that fragile be nimble, so

organization. this stay do want vertical we what on mind we in and flat focused we hope in keep that to we So our

want thank this everyone to I call. for us So for joining today

first XXXX want so look our very We forward to of and to them We support a continue to We are the they results. support employees. proud --we very we successful and you want that feel quarter you. support to can

quarter. So, we anyway, today speaking look you. to during the with to in the us given Investor forward time you you Day speaking have either the thank you you or next certainly for be and Thank

Operator

Ladies today’s and Thank this you conference for gentlemen, participating. concludes call.

You may now disconnect.

NV5 Global (NVEE) 8 May 222022 Q1 Earnings call transcript