BWMN - Earnings call transcript Q2 2022 | Bowman Consulting Group Ltd.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Lydia and I will be your conference operator today. At this time, I'd like to welcome everyone to the Bowman Consulting Group Second Quarter 2022 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. that statements the under note are made Please forward-looking considered federal Instructions] many comments of today [Operator securities laws.

the to these uncertainties not obligated in statements forward-looking those expressed, results statements. described Company's publicly Company the from with As is the SEC, to are differ subject could update numerous that and to and risks cause future filings these or revise

billing. non-GAAP today's call, and the financial certain information, on discuss EBITDA such addition, In net will service adjusted as Company

this with and Company's and the together Replays research public to the live taking with your at the most find attendees prepared will reconciliations can answer the will website. the You may analysts. investors.bowman.com. prepared call for SEC but may information, directly information Company's the deliver questions from be website in remarks. live Q&A Mr. remarks, earnings be on the be on the questions the on Bowman, investor begin Company's post the comparable of X-K there investor management after from GAAP you subsequent call attendees. communications, will Management will the to or which release press available filed on no call, Throughout webcast webcast they

Gary Bowman

morning everyone this Consulting by Gary XXXX earnings Bruce Bowman, Thank our to call. the you, joined Group Labovitz, Lydia. Financial I'm of CEO the Welcome, Bowman second Officer. Bowman, quarter Chairman Chief and

and Florida talent. our acquisitions. – talented Panhandle to and to reach, would our I welcome of Before to from recent like started, Fabre depth client to welcome our our us expand Southern professionals PDC The we Engineering, network add everyone get extended add two to most joining California from and

some have and these of are significant firms. these transactions realized complete, We successes with excited both cross-selling already we've to

we've the all thank to exceptional that growth who delivering Bowman like team of members experiencing. I'd addition, been worked tirelessly the the In

cross-selling each Our work other are value proud people an inclusive culture supporting that and we our to and by and delivering focus by on sharing all clients their creating of. efforts

last release continued the first XXXX growth quarter up As picked where with and off night, record of quarter second strong outlined press in the results. our left

Our first year puts quarter pace million the net for the on of over time. a $XXX revenue in a

our to continue year-over-year. both organic with driving on revenue deliver of XX% acquisitive strategy growth organic of We an and rate net roughly growth

Looking to insulates our guidance mix rising interest continued in volatile The energy rates in the the growth, we confident potentially we full-year. prices. in of our second the any we business, light half acquisition of us likelihood and from with our impacts are are of even challenging believe the [Indiscernible] economic and program, raising meaningful from year, conditions. of ongoing for connection

to Now talk I'll and over markets little about I'm to to will our in ahead? who bit going return call Bruce, results then program. turn detail, our financial and M&A our discuss go the a Bruce,

Bruce Labovitz

Gary. everybody. Great. you, Thank Welcome,

operated the XX%. as pleased to is Net quarter comparing to on be we to existing company. It's plan, important acquisitions XX%. implementation in were both true growth the build, markets, work second which customers where was about national net revenue increasing hard creating for quarter our the from a the organic increased to up across our to with two work was believe $XX.X another XX%. clients XX $X.X ago are is revenue Year-over-year throughout This as for growth of as It's million of resulting $XX.X gross Adjusted volume from note of where XX%. cross-selling or impact compared public XX.X%, to we pricing. organic or million to growth XX% on not of revenue points the $XX.X $X.X simply quarters, of this margin record our revenue $XX.X we growth million Year-over-year We million represents We which for that finally are or EBITDA last net period. efforts the and increased revenue revenue million for point organic talking that increased basis are synergies compared new orders to focuses at saw existing a year. winning now quarter here and which million to today offices, increased Gross year an assignments. our second our net adjusted the in and EBITDA all focusing quarter.

months XX deeper XX% was for activities. XX XX%. when growth mining revenue last to This other a increased was gross to a of as XX% metrics related press six XX% for business, months the million the June the to six that in through trend including revenue $XXX.X building growth to leverage positive as year. the of net of gross XX% an our the comprised Year-over-year June services. note revenue was for-sale up XX% XX% identical in our second ended illustrates X%, of second $XX.X basis building and revenue residential ended developments. XX%. the XX energy EBITDA refer the net or for was million XX%, transition housing, ended was increased XX%. utilities which Diving million Gross for XX and residential mixed-use which nature, $XX revenue that in the that months margin points Of quarter that Overhead last scale. it compared can that You a June XX% quarter increased and to what reconciliation margin organic find or EBITDA for million emerging XX.X%, water is $X.X Gross the revenue organic into adjusted Net quarter revenue. Adjusted Year-over-year year, which nature, million. the infrastructure million growth $XXX.X gross revenue is housing represents we markets, or period six outpaces $XX.X to growth net we bit was virtually year. roughly non-GAAP release. for-sale XX%. of revenue building prior the positive gross for for In our of of market, the efficiency XX% transportation, of includes other resources, power multifamily homebuilding XX% to XX% operating same the infrastructure, was to is infrastructure Gross compared for was of in roughly and the

to for gross X% utilities other six roughly As XX% of represented ended XX% the market such, emerging revenue XX% we for of of months, for-sale infrastructure, residential nature, Again, XX% was roughly markets. diving of revenue that was homebuilding know XX% a quarter. in was six residential bit Gross XX% for deeper approximately the into the XX, likewise, and which revenue power activities. infrastructure services months that comprised June gross the infrastructure in building for-sale related total of XX% transportation, building the building

again, revenue our downturn the approximately and a homebuilding total to substantial are think gross results. of represented marketplace that to future highly because the a important on there it's such, residential that could services in dependent months. sense seems XX% six As drag activities that the type for on We residential in we have be market for-sale highlight this for-sale

impact our our of overall potential a business, its results. it overweighted future it is meaningful While to is in not component

ratio with one. net balance remains well approximately below sheet $X strong debt million of Our net leverage and a

rapid shares a revenue consideration XX, the through have component CapEx roughly $XX the in million received as XXXX, equity CapEx issuances growth for the months of the this be quarter. to a full outstanding. at which to raising remaining. do we non-bank June clear, the PDC additional sources $XX mean acquisitions. additional converted With well facilities we credit Upon our remained from cash period X.X% no and to provide nearly funded of of equity anticipate as confident unregistered this revolving XXX,XXX spending That have XX,XXX,XXX and with over that meaningful Inclusive equity million to capital July, up to capital are result We $XX operating But There increased shares six-month have sufficient At XX. all expressions would roughly a use of of does to capital receivable lease of June recently at gross at facility. the holding a capital. cash respect comprised our raise other principally have today. preliminary into with to nearly point six connection as without organic time, of debt million the any our public during not Our years. have of end with subject a not we months, the of growth. in quarter of note available the plans since acquisition, year BofA excess of from two we been equity equity, continue to foreseeable next our been issued working facility activities have strategic share approval conversion on of availability six future. debt of convertible interest of In in our shares per to in time, executing conversion, market in our continue with we access increase not plenty had on $XX we capacity none consistent facilities, as credit unsecured ended accounts We $X net and to needed. million change a ended from generated received in $XX capital We adjustment, million under will

Our as XX% XX% X% residential gross million. and to is emerging or to building backlog as relates infrastructure, Backlog million This was XXXX, our compared $XX of with is XX, backlog June $XXX.X XX June XX% to markets. Consistent power December XX% transportation, XX% million approximately on and increase revenue, gross an comprised $XX.X June roughly increase compared housing. and of for-sale XX utilities XXXX. XX, or of of other an XX%

Future with our an our net of result accretive million EBITDA forecast. mentioned, both growth. are organic $XX completed to year to $XXX million complete expected and of six guidance a takes Keep of acquisitions impact acquisitions guidance to to an Gary of service ongoing from is months $XXX of issued and that have our issued. is mind, fiscal As our each a range have the is for generally which been million includes systems in to and could between million $XX increase $XXX million to $XX million acquisitions previously for three integration of million our only $XX $XXX of billing guidance we into acquisitions in adjusted process, XXXX acquisition. the The This day recent to guidance range million. increasing continuation the as

for bringing all these one I'll into together folks particular different call say Gary. unified Our corporate platform. are job the our all dedicated want integration doing and a back their systems, accounting group organizations you over a I cultures and to work. team of turn hard to to great thank now processes, those

Gary Bowman

I'm been Thanks, environment our during in. Bruce. the business services are our now of XX going is business share state the for to like market business. growth years plan clearly investment will that's strategic vision that and our to had, we and more sector taking Both our What the by I this demand ever infrastructure competition. macro working start business within private attention the and there future in strong from and growing my our growth public for is experiencing which of convergence of the and ours. the for competing market as of to is business. we my a a firms The are be turn are in status clients addressing markets of it's

markets rates serve While to we still important It's rates are periods substantially interest to markets during inflation aggressive lower and they remember they've by that driven on tightening. some reactive we in changes The and against of of been provides cyclicality. buffer some markets in are solely federal context, a economic reserve serve historical rates. mix other of the than are that

made indications for business clients we their services all all by demand on their forecasts, and has infrastructure While to conditions seem the our are the which spend resolute our run economic that continued robust about to investment, willingness hear the to to clear rhetoric and same sectors. us showing confidence these contrary across

bookings out Our excess as refer new sales book-to-burn to well and a in continue we month to one. our ratio orders, in of and grow with which month

adversely of business. services. yet that experience affect to We are headwinds may demand single any our slowdown to in for systemic date, any to attuned acutely we've And our macroeconomic

stages new investment current the of and with the early projects. and We future are recent beginning see to the sparked legislation flowing transportation from dollars about clients reconciliation in transition earmarks that both is money bill energy already infrastructure conversations for

and growth organic components: primary two growth. has acquisitive plan growth strategic Our

While these are two overlap they many in of growth distinct avenues areas.

acquisition, with synergies. are to markets attractive As objectives businesses are that we for geographies provide and are value consistent identify that cultures in opportunity ours, and creation that revenue evaluate potential our through primary

for integrating cross-selling these from companies the an a valuations buy market and are to While we at of the pay, that there to is part a deep is revenue willing the but are of companies, of we point view, kinds operation mindset not simply synergies. tricky from willing

around We are offices XX country. the to close

our We've opportunity begun our services with revenue and a of cross-selling have our as existing cross-selling able to practice large to We new we our integrating and throughout managed have services Texas tremendous to on practices. successfully beyond. providers and our and We well share Coast grow transportation landed expanded From the begun gas current as acquisition, have services firms capabilities XXXX by to clients our oil our acquired have studies. our projects MEP clients [indiscernible]. increasing building favor the to Gulf related in assignments traffic of additional practice penetrate been in to survey clients and

acquired We in our less have firms revenue grown that than such year. a for

over XX months, to the we completed picked the any civil platform XX up have we term of created purchase With markets in acquisitions a service engineering we We the on half which almost have serve. in last from deliver aggregate each can price.

we've assignments We bought acquisitions have great sources have and they that that heard sets resulted some us, skill from the the the technical closed that to we recently have added.

depth continue of concentrate for we to and breadth this on. the to on markets to is vision can services company offer of experience build we that the Our

We are especially power transition, utilities focusing and energy these efforts, markets. transportation infrastructure on and

within net adjusted under an XXXX of Our of Year-to-date, multiple as opportunity valuation EBITDA. plenty we estimated M&A at as range. deep of target revenue pipeline million ever is with it's acquired approximately our have been Xx average $XX

acquisition year, throughout settle second of things the respect acquisitive overall We profile in down half expect be to size will risk continue with the maintain to lower to likely the but a economy. until

and clients We for companies experiences diversify that for expectations for value over Thanks. every additional Again, will day, continue opportunities look thanks career. cultivating creating to build and our communities, question-and-answer to for to cross-selling at now call session. everyone Bowman of back and and of to and Bowman to synergies extend culture working our the a the a our place great exceeding I'll for portfolio investors hard operator opportunities. our the a make turn revenue

Operator

[Operator of ahead. Instructions] Brent question the first comes from Your of line Thielman go D.A. Davison. Please

Brent Thielman

Hey, Bruce, good Gary, great. Thanks. morning.

Gary Bowman

Good morning, Brent.

Bruce Labovitz

Good morning, Brent.

Brent Thielman

first that? there's comment I about was off, of about curious in growth organic sort from remarks, a yes, was way versus billable think prepared you higher if per I I'm hours I think just to made curious to a more hour billing and contribution – the curious the

Bruce Labovitz

not of I'm you've growth think not is – except sure way at function organic utilization remarks increased at a a a of way same was there's I answer clients. utilization an more that that that slightly the same the specifically to the in for the simply rates rate headcount rates. the billing It prepared asked higher the working comment the it, is function workforce higher at

Brent Thielman

Okay.

in looks Okay. been And for you Thanks, nonhousing sort building's just that Maybe of have then the well. really Bruce. areas grow vertical of some the really about to the you that talk like piece, strong is business. could infrastructure continues it side

Bruce Labovitz

Yes, municipals. commercial and

Gary Bowman

robust. are markets both Yes, of very those

So it's from I are, all the fully government markets in guess, COVID. we're recovered

say and clients healthy not in than aggressive expansion. they're So developers, their developers and the more they're very are actual our basis. retail the healthy spending retail pursuing new in chains, at very paces, end And commercial projects I often

So that's very helpful.

been We've infrastructure and work. have building for very Schools D.C. type has educational facilities of within type it's really instance, in commercial Amazon, has extremely project – strong. HQX centers with industrial data strong JBG that the strong. other that that seen strong. work submarkets specific their been Some been We market a area on

have areas all been So those positively of impacted.

Brent Thielman

are looks you the discussions? achieving then billings, climate that. And more to now. the $XX annualized able over working million How plans today? acquire robust it to like be $XX that Is Is economic evolving it I March, pipeline? be Just or up of service against Kind sort guess, to how this those helping about laid these Okay. curious you're impacting of million net out is in target? discussions

Gary Bowman

we're is these expectations but The pipeline as don't as is say, been. say don't buck. market are getting a of but integration robust. we the our certainly And change, I in And of – there's bang it's haven't lot changed. acquisitions synergy sense same, the we're like I'd I'd Their because probably – sentiment involved, any seller. expectations robust for a their still the finding are we lot quite really of smaller the

maybe going we So it million. I said a to million talking size $XX we an close $XX to we'll of be hit if year. about this average $XX don't I think this know higher – were not But million, year. we They're average

and been, So is Brent. robust the is pipeline robust the as it's marketplace as ever

Bruce Labovitz

I But is in $XX necessarily. remember, aspirational. think also important incorporated It to into million guidance it's was not any to way

So we unless an closed. don't include it's acquisition

or million to if to So $XX would million continue... $XX like million still acquisitive – we not it's continue $XX will be or

Gary Bowman

…or $XX million.

Bruce Labovitz

continue update guidance. are a but successful on strategy, in we guidance affect to that that downside as Yes. number We'll wouldn't

Gary Bowman

year think the line it we where environment hoped year. – time market this of the at I this and bottom at be the the and expected is would time just the is of

Brent Thielman

that now? seeing transportation about Are of engineering market of space funding. sort a in activities your result the as increasing Okay. increased And have others in direct then either indirect or talk the infrastructure you end bid to started the

Gary Bowman

some seeing And in it their of We're some of clients seeing man, Illinois. are some I know up activity.

as the say, from result street that projects bill. starting the are are we transportation to hitting a yes, So

Brent Thielman

Okay. in get Thanks, guys. I will queue. back

Gary Bowman

Brent. Thanks,

Operator

Your comes the next Riley B. Rygiel from line of Alex question of Securities.

open. is line Your

Alexander Rygiel

couple you. morning, here. A gentlemen. Thank Good quick nice quarter. A questions very of

Gary Bowman

Alex. you, Thank

Alexander Rygiel

question to of question related due Bruce, first it Obviously, synergistic to here improved growth into is versus revenue again, that simply versus as to guess, a of year-over-year. that XX% volume? think of how growth. components it back a the much volume coming building kind to pricing is organic about lot of organic different way kind I there

Bruce Labovitz

right, doing shortage not work just supply But we're headcount synergistic the kind somewhere XX% same of that's not some because form room you've not in But like Not If price, that done. think disaggregate of I XX% kind because together. to day. over is do had work. to XX% without growth acquisition, work what's you kind lag of generating because would... just right. sort number to volume I I of we nonacquisitive that kind sort look value utilization, – of was day a not organic we the component headcount Yes, of our of another the do have maybe two price like there asked, same us of being generating be acquiring hotel I Alex, of occurring, bit just I'd the the We're more it's increased between is but we're try the revenue. – suit people those asked say very that of of be sort a of or and work of hard from to of a because okay, from big can't at one to as really synergy. cross-selling into that that of more year-over-year, that clients that we're that's of market of There's first I or clients that in growing of and accretion think through acquisition, mean, XX% are being would to is sources.

Alexander Rygiel

to backlog, organically That's fastest it do what you helpful. right And relates then now? are as end markets think your the expanding

Bruce Labovitz

out fastest-growing transportation same the be – growing. the continuing buck and then of sounds two homebuilding. We business, to out call transition it not might commercial that of but grow power those energy but sort fastest organically. growing of monitor Probably would having backlog. the utilities building We impact nominally monitor necessarily everybody. favor our it the bang is having. I to say, Percentage And the infrastructure We monitor is kind or other developers. of are But so

Hortons not might You and abating off shifting acquisition starts listen be it private that's lot balance sheet or looking their in inventory. as they're but to or investment about may slowing but service developers their lot balance their Lennars, demand the and talking direct down in They the inventory. to not bit, a be opposed for they're increasing. still the They their aggregate unchanged a our to for finished demand acquisition, sheet more slowing

is certain it becoming good the the we So scarce parts growing virtue by of three of that primaries. we about fast Water a feel just serve. is resource geographies pretty that in being more

Alexander Rygiel

typical suggest as revenue it to from is half that sort or of back of something you seasonality the marketplace then the of that lastly, XQ? the declines pace in slowdown your conservative? guidance, in expect the your end guidance low are kind from And of your a that would that you XQ, Or year relates suggest do XXX being the would you see of

Bruce Labovitz

lighter We people slightly QX. people see a take we're vacations. generally mean just do The holidays I – business, a

that hours are bill working. only people can You

a a that be probably position more on. end being can that that more where think in higher we feel that not for low well. of But for gave generally potential where we is on just and we period the are just our turn end to low Alex, New bit want Year's always. we we're there morning. could range the end. all a not as a all be that's so dismissive optimistic be slowdown to that to I because We us, We Thanksgiving – – every the little what's news sort So slower going it's hear

Alexander Rygiel

helpful. Thank much. very Very you

Bruce Labovitz

Alex. Thanks,

Operator

Alex have Securities. B. from We follow-up a Instructions] of Riley question [Operator Rygiel

open. is Your line

Bruce Labovitz

back. Welcome

Alexander Rygiel

Thanks. One last question. Yes. Thanks.

You've made so a number of far. acquisitions

how of planned back-office touch you're of how integration and going, active is acquisitions sort another going of a systems you've had couple of years have kind some that of successes some your layering how upon the Can a going, number M&A? having complications the forward. of established just is platforms for on of or of integration You you kind

Bruce Labovitz

Yes.

we So can is just can cultural the it. address systems And I two – most have parts. the process Alex, great work orientation really got a of get really people the side have as strong of challenging team of refer side to it's We've equally end and challenging, but that of kind integration going. cultural side, the strong every integration it, it, one Systems here. back there's we components day a ERP And in to I of place.

of that was has Going had It knew we we our time But going with cost us a well implement we've they're plan. ahead was systems range good something was life. be And we to to public, from of was systems to all good meaning have. organizations of challenge. is bring businesses. ERP that had the that something the vetted companies QuickBooks It We people. challenging. headcount, to part this kind same of shoeboxes It's absolutely add knowledge good that on their notes that to capability and it and

so our first be critical that. work of data go months, first all team the in I processes we a couple integrating platform billing fully things one present integration arms as revenue processes we of through we and around that what uniformly is consider your of the And recognition. creating then meaningful is of can visibility And to the so cash we all challenging process a and towards it management It's of to of and of any in that's to integrate months way do leadership such our our getting part first to data. couple kind probably most

Gary Bowman

as here was actually cultural doing several with can Bruce our mind that. don't wallet the inculcating that's kind past something us, it's but concentrate to And come values, than card quantify cultural area cross-selling, what lot we blowing. counting it's to to has I successful. also of hat, been on I part. weeks it. amount don't just that's about a more expectations. up, We've word tremendously speak Bowman and quantify know in from a with bit we we that card wallet that the or cost. culture it's tremendous a up the is if our of on really for at it begun It start And to But not, little exceeded go business start know I'll a And a talking KPI everybody gray

Bruce Labovitz

all that stuff. do We

Gary Bowman

we've what But not and that's we what done, focus on.

Bruce Labovitz

one that I'll it. for end anticipate back place people was to do to keep point view got from support It going. capacities ERP CapEx thing of not integration. of Well, this with of all a the I and close any of big – in It's just requirement substantial the being spending there we've all from sort systems

Alexander Rygiel

Very helpful. Thank you.

Operator

have Thielman we finally, And a follow-up from Brent of D.A. Davidson.

Your line open. is

Brent Thielman

cash your flow second the Hey, what for half? are Thanks. Bruce, expectations

Bruce Labovitz

Yes.

in half. seeing we're to first think I the similar what

generation continuing in are cash to invest growth. We

we to capital probably we're acquisitions we year, a our continues the mimic year it the when the think the of growth just if of of half the So the trajectory consume slightly. as flow. conditions acquisitions, will working can organic – acquisitions. now the for of of part half I kind And provide cash that consideration second improve But of first not kind on make

Brent Thielman

Okay. Thank you.

Operator

There are you. over I no questions further Mr. this call back turn at the Bowman, time. to

Gary Bowman

Olivia. Thanks,

here. this investors faith the to that are such all they us morning. everyone. our value call Good to the for to to thank certainly and quarter. report Thank wrap morning to committed morning put this create up, on happy of us, spending I very with be I time and everybody for we want in great thank Just continuing we're a to you.

Operator

call. today's concludes This conference

disconnect. now may You

Bowman Consulting (BWMN) 13 Aug 222022 Q2 Earnings call transcript