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Bowman Announces Financial Results for Three Months Ended March 31, 2024

Bowman Consulting Group Ltd. (Nasdaq: BWMN) (“Bowman” or the “Company”), a national engineering and infrastructure services firm supporting owners and developers of the built environment, today released financial results for the three months ended March 31, 2024.

“The first quarter delivered the revenue rebound we were expecting,” said Gary Bowman, Chairman and CEO of Bowman. “Net service billing increased consecutively each month during the quarter in line with our expectations. Demand for engineering services remains strong and we generated healthy new orders during the quarter, especially in transportation which showed a meaningful increase as a percentage of total backlog. With the bulk of our organic growth anticipated to occur during the balance of 2024, we are confident we have sufficient revenue in backlog and a right-sized organizational infrastructure to deliver expanding margins as we realize the increasing benefits of scale throughout the year. We are pleased to increase our net service billing and adjusted EBITDA guidance once again for 2024.”

“In early April we closed on an equity offering that included approximately $51 million of gross proceeds to the company,” continued Bowman. “Then, last week we closed on a new $100 million revolving credit facility with Bank of America and TD Bank and separately on an $11 million cash-out refinancing of recently acquired Surdex aviation assets. As a result of these efforts, we believe we are sufficiently capitalized to continue to grow and execute on our current high-frequency acquisition strategy.”

Financial Highlights for the Three Months Ended March 31, 2024, Compared to March 31, 2023:

  • Gross contract revenue of $94.9 million, compared to $76.1 million, a 25% increase
  • Year-over-year organic gross contract revenue growth1 of 1%
  • Net service billing2 of $85.7 million, compared to $67.6 million, a 27% increase
  • Year-over-year organic net service billing growth of 3%
  • Net loss of $1.6 million3, compared to net income of $0.5 million
  • Adjusted EBITDA2 of $12.1 million, compared to $9.7 million, a 25% increase
  • Adjusted EBITDA margin, net 2 of 14.2% compared to 14.3%, a 10 bps decrease
  • Gross backlog2 of $330 million, compared to $252 million, a 31% increase

Subsequent Events of Note:

  • On April 1, 2024, the Company closed on a $51 million equity offering
  • On April 4, 2024, the Company closed on the acquisition of Surdex Corporation
  • On April 17, 2024, the Company closed on the acquisition of Moore Consulting Engineers
  • On May 2, 2024, the Company closed on a new $100 million accordion-style syndicated revolving credit facility with Bank of America, N.A. and TD Bank, N.A., replacing the Company’s $70 million facility with Bank of America
  • On May 3, 2024, the Company closed on a new $11 million cash-out refinancing of its Surdex aviation assets

Non-GAAP Adjusted Earnings per Share:

In connection with the release of financial results the Company reported the non-GAAP financial metric of adjusted earnings per share (“Adjusted EPS”) as follows:

For the three months ended March 31, 2024, compared to March 31, 2023:

  • Basic Adjusted EPS was $0.22 compared to $0.28
  • Diluted Adjusted EPS was $0.20 compared to $0.26

To calculate Adjusted EPS, the Company adds back non-reoccurring expenses specific to acquisitions, non-cash stock compensation expense associated with pre-IPO grants, and other expenses not in the ordinary course of business. With respect to the elimination of any non-cash stock compensation expense, the Company computes an adjusted tax expense or benefit which accounts for the elimination of any periodic windfall or shortfall tax effects resulting from the difference between grant date fair value and vest date value. With respect to all other eliminations, the Company applies its average marginal statutory tax rate, currently 25.6%, to derive the tax adjustment associated with the elimination of these expenses. A reconciliation of non-GAAP Adjusted EPS to GAAP EPS, both basic and diluted, is included with this press release for reference.

Updating FY 2024 Guidance

The Company is adjusting its full year 2024 outlook for net service billing2 to be in the range of $382 to $397 million and Adjusted EBITDA2 in the range of $63 to $69 million. The current outlook for 2024 is based on completed acquisitions as of the date of this release and does not include contributions from any future acquisitions. Management discusses the Company’s acquisition pipeline and its prospective impact during regularly scheduled earnings calls.

Q1 2024 Earnings Webcast

Bowman will host an earnings webcast to discuss the results of the quarter as follows:

Date:

May 7, 2024

Time:

9:00 a.m. Eastern Time

Hosts:

Gary Bowman, Chairman and CEO and Bruce Labovitz, Chief Financial Officer

Where:

http://investors.bowman.com

1 To the extent applicable, includes reclassification of acquisitions closed in same period of the prior year to organic revenue in the prior period.

2 Non-GAAP financial metrics the Company believes offer valuable perspective on results of operations. See Non-GAAP tables below for reconciliations.

3 Includes an additional $1.3 million accrual for penalties and interest (P&I) in connection with the Company’s Section 174-related uncertain tax provision (UTP). Accruals for P&I are subject to reversal prior to payment if the Company elects to unwinds its UTP.

About Bowman Consulting Group Ltd.

Headquartered in Reston, Virginia, Bowman is a national engineering services firm delivering infrastructure solutions to customers who own, develop, and maintain the built environment. With over 2,200 employees and more than 90 offices throughout the United States, Bowman provides a variety of planning, engineering, geospatial, construction management, commissioning, environmental consulting, land procurement and other technical services to customers operating in a diverse set of regulated end markets. Bowman trades on the Nasdaq under the symbol BWMN. For more information, visit bowman.com or investors.bowman.com.

Forward-Looking Statements

This press release may contain “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than statements of historical fact, including statements regarding our future results of operations and financial position, business strategy and plans and objectives for future operations, are forward-looking statements and represent our views as of the date of this press release. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will,” “goal” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to several assumptions and risks and uncertainties, many of which involve factors or circumstances that are beyond our control that could affect our financial results. The Company cautions that these statements are qualified by important factors that could cause actual results to differ materially from those reflected by the forward-looking statements contained in this news release. Such factors include: (a) changes in demand from the local and state government and private clients that we serve; (b) general economic conditions, nationally and globally, and their effect on the market for our services; (c) competitive pressures and trends in our industry and our ability to successfully compete with our competitors; (d) changes in laws, regulations, or policies; and (e) the “Risk Factors” set forth in the Company’s most recent SEC filings. Considering these risks, uncertainties and assumptions, the future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipates or implied in any forward-looking statements. Except as required by law, we are under no obligation to update these forward-looking statements after the date of this press release, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements.

Non-GAAP Financial Measures and Other Key Metrics

We supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, with certain non-GAAP financial measures, as described below, to help represent, explain, and understand our operating performance. These non-GAAP financial measures may be different than similarly referenced measures used by other companies. The non-GAAP measures are intended to enhance investors’ overall understanding and evaluation of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We present these non-GAAP financial measures to assist investors in seeing our financial performance in a manner more aligned with management’s view and believe these measures provide additional tools by which investors can evaluate our core financial performance over multiple periods relative to other companies in our industry. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables accompanying this press release.

BOWMAN CONSULTING GROUP LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands except per share data)

 

 

March 31,

2024

 

December 31,

2023

 

(Unaudited)

 

 

ASSETS

 

 

 

Current Assets

 

 

 

Cash and equivalents

$

11,673

 

 

$

20,687

 

Accounts receivable, net

 

95,975

 

 

 

87,565

 

Contract assets

 

36,673

 

 

 

33,520

 

Notes receivable - officers, employees, affiliates, current portion

 

1,181

 

 

 

1,199

 

Prepaid and other current assets

 

17,365

 

 

 

11,806

 

Total current assets

 

162,867

 

 

 

154,777

 

Non-Current Assets

 

 

 

Property and equipment, net

 

28,122

 

 

 

27,601

 

Operating lease, right-of-use assets

 

40,236

 

 

 

40,743

 

Goodwill

 

102,538

 

 

 

96,393

 

Notes receivable

 

903

 

 

 

903

 

Notes receivable - officers, employees, affiliates, less current portion

 

1,116

 

 

 

1,119

 

Other intangible assets, net

 

45,525

 

 

 

46,294

 

Deferred tax asset, net

 

37,981

 

 

 

33,780

 

Other assets

 

1,250

 

 

 

1,175

 

Total Assets

$

420,538

 

 

$

402,785

 

LIABILITIES AND EQUITY

 

 

 

Current Liabilities

 

 

 

Revolving credit facility

 

47,254

 

 

 

45,290

 

Accounts payable and accrued liabilities, current portion

 

49,015

 

 

 

44,394

 

Contract liabilities

 

7,955

 

 

 

7,481

 

Notes payable, current portion

 

13,672

 

 

 

13,989

 

Operating lease obligation, less current portion

 

9,567

 

 

 

9,016

 

Finance lease obligation, current portion

 

7,271

 

 

 

6,586

 

Total current liabilities

 

134,734

 

 

 

126,756

 

Non-Current Liabilities

 

 

 

Other non-current obligations

 

50,095

 

 

 

42,288

 

Notes payable, less current portion

 

12,177

 

 

 

13,738

 

Operating lease obligation, less current portion

 

36,659

 

 

 

37,660

 

Finance lease obligation, less current portion

 

14,987

 

 

 

14,408

 

Pension and post-retirement obligation, less current portion

 

4,630

 

 

 

4,654

 

Total liabilities

$

253,282

 

 

$

239,504

 

 

 

 

 

Shareholders' Equity

 

 

 

Preferred Stock, $0.01 par value; 5,000,000 shares authorized, no shares issued and outstanding as of March 31, 2024 and December 31, 2023

 

-

 

 

 

-

 

Common stock, $0.01 par value; 30,000,000 shares authorized as of March 31, 2024 and December 31, 2023; 18,191,818 shares issued and 15,428,519 outstanding, and 17,694,495 shares issued and 15,094,278 outstanding as of March 31, 2024 and December 31, 2023, respectively

 

182

 

 

 

177

 

Additional paid-in-capital

 

226,681

 

 

 

215,420

 

Accumulated other comprehensive income

 

579

 

 

 

590

 

Treasury stock, at cost; 2,763,299 and 2,600,217, respectively

 

(32,142

)

 

 

(26,410

)

Stock subscription notes receivable

 

(66

)

 

 

(76

)

Accumulated deficit

 

(27,978

)

 

 

(26,420

)

Total shareholders' equity

$

167,256

 

 

$

163,281

 

 

 

 

 

TOTAL LIABILITIES AND EQUITY

$

420,538

 

 

$

402,785

 

BOWMAN CONSULTING GROUP LTD.

CONDENSED CONSOLIDATED INCOME STATEMENTS

(Amounts in thousands except per share data)

(Unaudited)

 

 

For the Three Months

Ended March 31,

 

2024

 

2023

Gross Contract Revenue

$

94,907

 

 

$

76,100

 

Contract costs: (exclusive of depreciation and amortization below)

 

 

 

Direct payroll costs

 

37,687

 

 

 

28,835

 

Sub-consultants and expenses

 

9,218

 

 

 

8,538

 

Total contract costs

 

46,905

 

 

 

37,373

 

Operating Expenses:

 

 

 

Selling, general and administrative

 

44,713

 

 

 

33,636

 

Depreciation and amortization

 

5,995

 

 

 

3,565

 

Gain on sale

 

(96

)

 

 

(11

)

Total operating expenses

 

50,612

 

 

 

37,190

 

(Loss) Income from operations

 

(2,610

)

 

 

1,537

 

Other expense

 

2,401

 

 

 

1,213

 

(Loss) Income before tax expense

 

(5,011

)

 

 

324

 

Income tax (benefit)

 

(3,453

)

 

 

(213

)

Net (loss) income

$

(1,558

)

 

$

537

 

Earnings allocated to non-vested shares

 

 

 

 

69

 

Net (loss) income attributable to common shareholders

$

(1,558

)

 

$

468

 

(Loss) Earnings per share

 

 

 

Basic

$

(0.11

)

 

$

0.04

 

Diluted

$

(0.11

)

 

$

0.04

 

Weighted average shares outstanding:

 

 

 

Basic

 

13,827,728

 

 

 

11,800,308

 

Diluted

 

13,827,728

 

 

 

12,669,581

 

BOWMAN CONSULTING GROUP LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

For the Three Months Ended March 31,

 

2024

 

2023

Cash Flows from Operating Activities:

 

 

 

Net (Loss) Income

$

(1,558

)

 

$

537

 

Adjustments to reconcile net income to net cash provided by operating activities

 

 

 

Depreciation and amortization - property, plant and equipment

 

2,656

 

 

 

2,196

 

Amortization of intangible assets

 

3,339

 

 

 

1,369

 

Gain on sale of assets

 

(96

)

 

 

(11

)

Credit losses

 

402

 

 

 

222

 

Stock based compensation

 

7,829

 

 

 

4,363

 

Accretion of discounts on notes payable

 

117

 

 

 

140

 

Deferred taxes

 

(4,201

)

 

 

(3,669

)

Changes in operating assets and liabilities

 

 

 

Accounts receivable

 

(7,946

)

 

 

(2,943

)

Contract assets

 

(2,151

)

 

 

(3,610

)

Prepaid expenses and other assets

 

(5,523

)

 

 

(533

)

Accounts payable and accrued expenses

 

10,614

 

 

 

7,748

 

Contract liabilities

 

(963

)

 

 

469

 

Net cash provided by operating activities

 

2,519

 

 

 

6,278

 

Cash Flows from Investing Activities:

 

 

 

Purchases of property and equipment

 

(262

)

 

 

(536

)

Fixed assets converted to lease financing

 

424

 

 

 

-

 

Proceeds from sale of assets and disposal of leases

 

96

 

 

 

11

 

Payments received under loans to shareholders

 

20

 

 

 

105

 

Acquisitions of businesses, net of cash acquired

 

(3,027

)

 

 

-

 

Collections under stock subscription notes receivable

 

10

 

 

 

22

 

Net cash used in investing activities

 

(2,739

)

 

 

(398

)

Cash Flows from Financing Activities:

 

 

 

Borrowings under revolving credit facility

 

1,964

 

 

 

 

Repayments under fixed line of credit

 

(49

)

 

 

(185

)

Repayment under notes payable

 

(3,734

)

 

 

(2,685

)

Payments on finance leases

 

(1,716

)

 

 

(1,687

)

Payments for purchase of treasury stock

 

(5,732

)

 

 

(667

)

Proceeds from issuance of common stock

 

473

 

 

 

390

 

Net cash used in financing activities

 

(8,794

)

 

 

(4,834

)

Net (decrease) increase in cash and cash equivalents

 

(9,014

)

 

 

1,046

 

Cash and cash equivalents, beginning of period

 

20,687

 

 

 

13,282

 

Cash and cash equivalents, end of period

$

11,673

 

 

$

14,328

 

Supplemental disclosures of cash flow information:

 

 

 

Cash paid for interest

$

1,962

 

 

$

757

 

Cash paid for income taxes

$

11

 

 

$

-

 

Non-cash investing and financing activities

 

 

 

Property and equipment acquired under finance lease

$

(3,002

)

 

$

(2,964

)

Note payable converted to common shares

$

(672

)

 

$

-

 

Issuance of notes payable for acquisitions

$

(2,461

)

 

$

-

 

BOWMAN CONSULTING GROUP LTD.

RECONCILIATION OF EPS TO ADJUSTED EPS

(Amounts in thousands except per share data)

 

 

 

For the Three Months Ended March 31,

 

 

2024

 

2023

Net (loss) income (GAAP)

 

$

(1,558

)

 

$

537

 

+ tax (benefit) (GAAP)

 

 

(3,453

)

 

 

(213

)

(Loss) Income before tax expense (GAAP)

 

$

(5,011

)

 

$

324

 

+ acquisition related expenses

 

 

1,350

 

 

 

849

 

+ amortization of intangibles

 

 

3,339

 

 

 

1,369

 

+ non-cash stock comp related to pre-IPO

 

 

1,557

 

 

 

1,722

 

+ other non-core expenses

 

 

399

 

 

 

 

Adjusted income before tax expense

 

$

1,634

 

 

$

4,264

 

Adjusted income tax (benefit) expense

 

 

(1,660

)

 

 

496

 

Adjusted net income

 

$

3,294

 

 

$

3,768

 

Adjusted earnings allocated to non-vested shares

 

 

310

 

 

 

488

 

Adjusted net income attributable to common shareholders

 

$

2,984

 

 

$

3,280

 

(Loss) Earnings per share (GAAP)

 

 

 

 

Basic

 

$

(0.11

)

 

$

0.04

 

Diluted

 

$

(0.11

)

 

$

0.04

 

Adjusted earnings per share (Non-GAAP)

 

 

 

 

Basic

 

$

0.22

 

 

$

0.28

 

Diluted

 

$

0.20

 

 

$

0.26

 

Weighted average shares outstanding

 

 

 

 

Basic

 

 

13,827,728

 

 

 

11,800,308

 

Diluted

 

 

14,561,032

 

 

 

12,669,581

 

 

 

 

 

 

Basic Adjusted Earnings Per Share Summary - Non-GAAP

 

For the Three Months Ended March 31,

 

 

2024

 

2023

(Loss) Earnings per share (GAAP)

 

$

(0.11

)

 

$

0.04

 

Pre-tax basic per share adjustments

 

$

0.23

 

 

$

0.32

 

Adjusted earnings per share before tax expense

 

$

0.12

 

 

$

0.36

 

Tax (benefit) expense per share adjustment

 

$

(0.12

)

 

$

0.04

 

Adjusted earnings per share - adjusted net income

 

$

0.24

 

 

$

0.32

 

Adjusted earnings per share allocated to non-vested shares

 

$

0.02

 

 

$

0.04

 

Adjusted earnings per share attributable to common shareholders

 

$

0.22

 

 

$

0.28

 

 

 

 

 

 

Diluted Adjusted Earnings Per Share Summary - Non-GAAP

 

For the Three Months Ended March 31,

 

 

2024

 

2023

(Loss) Earnings per share (GAAP)

 

$

(0.11

)

 

$

0.04

 

Pre-tax diluted per share adjustments

 

$

0.22

 

 

$

0.30

 

Adjusted earnings per share before tax expense

 

$

0.11

 

 

$

0.34

 

Tax (benefit) expense per share adjustment

 

$

(0.11

)

 

$

0.03

 

Adjusted earnings per share - adjusted net income

 

$

0.22

 

 

$

0.31

 

Adjusted earnings per share allocated to non-vested shares

 

$

0.02

 

 

$

0.05

 

Adjusted earnings per share attributable to common shareholders

 

$

0.20

 

 

$

0.26

 

BOWMAN CONSULTING GROUP LTD.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Amounts in thousands except per share data)

 

Combined Statement of Operations Reconciliation

 

For the Three Months Ended March 31,

 

 

2024

2023

Gross contract revenue

 

$

94,907

 

$

76,100

 

Contract costs (exclusive of depreciation and amortization)

 

 

46,905

 

 

37,373

 

Operating expense

 

 

50,612

 

 

37,190

 

(Loss) Income from operations

 

 

(2,610

)

 

1,537

 

Other expense

 

 

2,401

 

 

1,213

 

Income tax (benefit)

 

 

(3,453

)

 

(213

)

Net (loss) income

 

$

(1,558

)

$

537

 

Net margin

 

 

(1.6

)%

 

0.7

%

 

 

 

 

Other financial information 1

 

 

 

Net service billing

 

$

85,689

 

$

67,562

 

Adjusted EBITDA

 

 

12,128

 

 

9,673

 

Adjusted EBITDA margin, net

 

 

14.2

%

 

14.3

%

 

 

 

 

Gross Contract Revenue to Net Service Billing Reconciliation

 

For the Three Months Ended March 31,

 

 

2024

2023

Gross contract revenue

 

$

94,907

 

$

76,100

 

Less: sub-consultants and other direct expenses

 

 

9,218

 

 

8,538

 

Net service billing

 

$

85,689

 

$

67,562

 

 

 

 

 

Adjusted EBITDA Reconciliation

 

For the Three Months Ended March 31,

 

 

2024

2023

Net Service Billing

 

$

85,689

 

$

67,562

 

 

 

 

 

Net (loss) income

 

$

(1,558

)

$

537

 

+ interest expense

 

 

2,131

 

 

896

 

+ depreciation & amortization

 

 

5,995

 

 

3,565

 

+ tax (benefit)

 

 

(3,453

)

 

(213

)

EBITDA

 

$

3,115

 

$

4,785

 

+ non-cash stock compensation

 

 

7,861

 

 

4,434

 

+ settlements and other non-core expenses

 

 

399

 

 

 

+ acquisition expenses

 

 

753

 

 

454

 

Adjusted EBITDA

 

$

12,128

 

$

9,673

 

Adjusted EBITDA margin, net

 

 

14.2

%

 

14.3

%

 

 

 

 

1 Non-GAAP financial metrics the Company believes offer valuable perspective on results of operations. See Non-GAAP tables below for reconciliations.

BOWMAN CONSULTING GROUP LTD.

GROSS CONTRACT REVENUE COMPOSITION

(Unaudited)

 

 

 

 

 

 

 

(dollars in thousands)

For the Three Months Ended March 31,

Consolidated Gross Revenue

2024

%

2023

%

Change

% Change

Building Infrastructure

52,785

55.6

%

44,337

58.3

%

8,448

19.1

%

Transportation

18,128

 

19.1

%

16,019

 

21.0

%

2,109

 

13.2

%

Power and Utilities

18,467

 

19.5

%

13,324

 

17.5

%

5,143

 

38.6

%

Other Emerging Markets1

5,527

 

5.8

%

2,420

 

3.2

%

3,107

 

128.4

%

Total

94,907

 

100.0

%

76,100

 

100.0

%

18,807

 

24.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

For the Three Months Ended March 31,

Organic v Acquired Revenue

2024

%

2023

%

Change

% Change

Organic

76,433

 

80.5

%

76,100

 

100.0

%

333

 

0.4

%

Acquired2

18,474

 

19.5

%

 

%

18,474

 

n/a

 

Total

94,907

 

100.0

%

76,100

 

100.0

%

18,807

 

24.7

%

 

 

 

 

 

 

 

1 Represents environmental, mining, water resources and other.

2 After four quarters post-closing, acquired revenue is reclassified as organic; this results in a change from previously reported numbers.

BOWMAN CONSULTING GROUP LTD.

GROSS BACKLOG BY CATEGORY AT MARCH 31, 2024

(Unaudited)

 

Category

Percentage

Building Infrastructure

51

%

Transportation

28

%

Power and Utilities

17

%

Emerging Markets

4

%

TOTAL

100

%

 

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