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Bowman Adds Commentary to 2023 Pre-Release and Announces Acquisition of Transportation and Bridge Design Firm Speece Lewis Engineers

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Bowman Consulting Group Ltd. issues additional commentary on its 2023 pre-release of non-GAAP financial metrics and announces the acquisition of Speece Lewis Engineers. The company affirms its 2024 guidance and discusses strong demand for services, backlog growth, and future growth prospects. The acquisition of Speece Lewis enhances Bowman's national transportation engineering practice and adds revenue synergies beyond transportation.
Positive
  • Bowman affirms its 2024 guidance in connection with the pre-release of 2023 non-GAAP financial metrics.
  • The company highlights strong demand for its services, increasing backlog of contracted work, and opportunities for growth in 2024.
  • Speece Lewis Engineers, a transportation engineering firm based in Lincoln, Nebraska, has been acquired by Bowman.
  • The acquisition is expected to enhance Bowman's national transportation engineering practice and create revenue synergies beyond transportation.
  • The acquisition of Speece Lewis is financed with a combination of cash, seller notes, and equity, falling within target multiples and operating metric ranges.
Negative
  • None.

The acquisition of Speece Lewis by Bowman Consulting Group Ltd. is a strategic move that can potentially boost Bowman's market position in the transportation engineering sector. The transaction, financed through cash, seller notes and equity, adheres to the target multiples and operational metrics that Bowman previously communicated, which is a positive sign for investors looking for disciplined capital allocation. The immediate accretive nature of the deal suggests that it will contribute to earnings without dilution, a key factor in assessing the financial health of such transactions.

The expected annualized net service billing run rate of $4.0 million from the new acquisition provides a tangible metric for evaluating the near-term financial impact. Investors should monitor how this contributes to Bowman's overall revenue and whether the company can leverage the acquisition to achieve cost synergies and cross-selling opportunities. The reaffirmation of the 2024 guidance, despite not accounting for the acquisitions, indicates management's confidence in the company's growth trajectory, which is reassuring for stakeholders.

With the addition of Speece Lewis, Bowman expands its footprint into the Midwest, a region with ongoing infrastructure investments. The acquisition's focus on transportation, bridge design, surveying and hydraulics complements Bowman's existing services, potentially broadening its market appeal. The integration of advanced technologies and the mention of revenue synergies suggest potential for innovation and enhanced service offerings.

Given the current principals of Speece Lewis are staying on board, continuity in client relationships and expertise is likely, which can facilitate a smoother transition and integration. The market should also consider the broader industry trends, such as increased federal spending on infrastructure, which could provide tailwinds for firms like Bowman. The ability to capitalize on these trends through strategic acquisitions could position Bowman favorably relative to competitors.

From a legal perspective, the acquisition process appears to be conventional, utilizing a mix of cash, seller notes and equity, which is a standard practice in such transactions. The legal due diligence likely covered the verification of Speece Lewis's client contracts, compliance with industry regulations and intellectual property rights associated with their technologies. Ensuring a seamless transition of these legal obligations is crucial for Bowman to avoid potential liabilities.

Furthermore, the stability of the acquired firm's leadership team, with Tim Farmer and Chris Lane remaining in their roles, can mitigate risks associated with talent retention and client relationship management post-acquisition. It is also important to note that all Speece Lewis employees have joined Bowman, which may help in retaining institutional knowledge and minimizing disruption.

RESTON, Va.--(BUSINESS WIRE)-- Bowman Consulting Group Ltd. (the “Company” or “Bowman”) (NASDAQ:BWMN), a national engineering services firm delivering infrastructure solutions to customers who own, develop, and maintain the built environment, today issued additional commentary regarding its February 16, 2024 pre-release of 2023 non-GAAP financial metrics (the “Pre-Release”) and announced the acquisition of Speece Lewis Engineers (“Speece Lewis”), a transportation, bridge design, surveying, and hydraulics focused engineering firm based in Lincoln, Nebraska.

Additional Commentary Regarding 2023 Pre-Release

The Company noted that it was not withdrawing its 2024 guidance in connection with the Pre-Release announcement but rather it was affirming its November 6, 2023 guidance with a reminder that the guidance does not include what is now six acquisitions closed since its issuance. In connection with its upcoming earnings release, the Company will update its 2024 guidance to include all acquisitions completed after November 6, 2023.

“We continue to experience strong demand for our services,” said Gary Bowman, chairman and CEO of Bowman. “To be clear, our backlog of contracted work continues to increase, our opportunities are plentiful, our January results were in line with our plan, and our confidence in our ability to post meaningful growth again in 2024 is unabated. We look forward to discussing our 2023 results and our outlook for continued growth in connection with our upcoming earnings call.”

Speece Lewis Acquisition

Since 1974, Speece Lewis has been supporting the improvement of infrastructure throughout the midwestern United States through quality engineering, committed customer service, and innovation. Led by current principals Tim Farmer, P.E. and Chris Lane, P.E., the firm partners with a variety of clients, including natural resource districts; federal, state, county, and municipal governments; as well as private and commercial entities. Employing advanced, state-of-the-art technologies, Speece Lewis’ experienced engineers and technical experts deliver solutions that reflect precise analytics and exceptional designs. Speece Lewis practice specialties include transportation planning, bridge design, survey and geospatial services, hydraulics engineering, and field oversight services. All Speece Lewis employees have joined Bowman in connection with the acquisition.

“The acquisition of Speece Lewis is a reflection of our continuing commitment to the growth of our national transportation engineering practice,” said Gary Bowman, chairman and CEO of Bowman. “With Speece Lewis, we add a terrific team of skilled transportation and bridge design experts along with an impressive depth of clients. But we also add an extraordinary collection of hydraulics, surveying and geospatial, and field services experience that will create additional revenue synergies beyond transportation. This is an extremely opportunistic combination of companies, and we are excited to be expanding our presence into the Midwest by joining with such a prestigious firm and talented collection of professionals.”

“Bowman’s commitment to growing their business in areas where we are most focused was a huge appeal to all of us at Speece Lewis,” said Tim Farmer, president of Speece Lewis. “We have built the company through an unwavering dedication to our people, our clients, and our communities. We believe Bowman’s culture and approach to growth is very much aligned with our vision for our future. We are ready to start adding value to Bowman and capitalize on the many synergies we will undoubtedly realize as we combine workforces, clients, technologies, operations, and opportunities.”

Financed with a combination of cash, seller notes, and equity, the acquisition falls within previously discussed target multiples and operating metric ranges and is expected to be immediately accretive. The Company anticipates the acquisition will initially operate at an annualized net service billing run rate of approximately $4.0 million. More detailed information on M&A activities, pipeline, and guidance updates are provided in connection with scheduled quarterly and annual communications.

About Speece Lewis Engineers

Since 1974, Speece Lewis has brought depth of experience and expertise to each assignment it has successfully completed. Focused on surveying, transportation, bridge design, and hydraulics, Speece Lewis has been consistently supporting the improvement of infrastructure throughout the midwestern United States through quality engineering. Proudly partnering with a variety of clients, including natural resource districts; federal, state, county, and municipal governments; as well as private and commercial entities, Speece Lewis maintains a consistent and relentless approach to each project and engagement. No matter how simple or complex the challenge, the firm’s experienced engineers, state-of the art equipment, and rigorous processes combine to ensure a successful outcome. For more information on Speece Lewis, their projects, and their services, visit www.speecelewis.com.

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 2,000 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 anticipated 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.

General Media Contact:

Christina Nichols

cnichols@bowman.com

Investor Relations Contacts:

Bruce Labovitz

ir@bowman.com

Larry Clark, CFA

lclark@bowman.com

Source: Bowman Consulting Group

FAQ

What additional commentary did Bowman provide regarding its 2023 pre-release of non-GAAP financial metrics?

Bowman affirmed its 2024 guidance and mentioned that the guidance does not include six acquisitions closed since November 6, 2023.

Who is leading Speece Lewis Engineers?

Speece Lewis Engineers is led by Tim Farmer, P.E. and Chris Lane, P.E.

What are the practice specialties of Speece Lewis Engineers?

Speece Lewis specializes in transportation planning, bridge design, survey and geospatial services, hydraulics engineering, and field oversight services.

How is the acquisition of Speece Lewis Engineers financed?

The acquisition is financed with a combination of cash, seller notes, and equity.

What is the expected annualized net service billing run rate of the acquisition?

The acquisition is expected to initially operate at an annualized net service billing run rate of approximately $4.0 million.

Bowman Consulting Group Ltd.

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we're dynamic, progressive, and diversified bowman consulting delivers real estate, energy and infrastructure solutions to public and private markets throughout the country. outstanding client relationships and a focused growth strategy have allowed bowman to anticipate the needs of the marketplace and respond to its demands through new service offerings, locations and solutions. bowman is an adept and energetic firm with a results-oriented attitude. we focus on exceeding expectations and give our clients peace of mind by providing exceptional service. we offer the depth of resources that one expects from a large design firm. at the same time, we operate with a degree of flexibility typically found only in boutique firms. led by many of our fields'​ most respected professionals, we attract and retain the industry's best and brightest. bowman consulting is also well balanced. understanding and anticipating market conditions, using our skills and experience, and mobilizing a thoughtful a