Bowman Announces Third Quarter 2023 Financial Results
Bowman Consulting Group Ltd. (Nasdaq: BWMN) has released its financial results for the three and nine months ended September 30, 2023. The company achieved record gross revenue and showcased the potential of its strategic growth initiative through increased scale. Positive industry trends in transportation, energy, and manufacturing funding are driving infrastructure spending and supporting the company's optimism.
11/06/2023 - 04:05 PM
RESTON, Va. --(BUSINESS WIRE)--
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 and nine months ended September 30, 2023.
“I am extremely pleased with our strong third quarter results,” said Gary Bowman, Chairman and CEO of Bowman. “We delivered record gross revenue and demonstrated the margin leverage and operating cash flow our strategic growth initiative can deliver over time through increased scale. Tailwinds associated with transportation, energy and manufacturing funding are propelling infrastructure spending and continue to support our optimism about our ability to advance our revenue diversification efforts. Our backlog grew by 30% year-over-year, and we ended the quarter with a full pipeline of impactful new client assignments we expect to book during the fourth quarter. Acquisition activity has continued with two additional closings since the end of the third quarter with more expected by year-end. We feel confident about our markets, our employees, our positioning, and our prospects for a successful finish to 2023 and strong 2024.”
Financial highlights for the three months ended September 30, 2023, compared to September 30, 2022:
Gross revenue of $94.4 million $71.2 million 33% increase
Year-over-year organic gross revenue growth1 of 11%
Net service billing2 of $82.1 million $64.9 million 27% increase
Year-over-year organic net service billing growth of 9%
Net income of $1.2 million $3.4 million
Adjusted EBITDA2 of $15.1 million $9.6 million 57% increase
Adjusted EBITDA margin, net 2 of 18.3% compared to 14.8% , a 350 bps increase
Gross backlog2 of $299 million $230 million 30% increase
Financial highlights for the nine months ended September 30, 2023, compared to September 30, 2022:
Gross revenue of $253.3 million $186.1 million 36% increase
Year-over-year organic gross revenue growth1 of 22%
Net service billing2 of $223.5 million $169.0 million 32% increase
Year-over-year organic net service billing growth of 20%
Net income of $1.1 million $4.5 million
Adjusted EBITDA2 of $35.8 million $24.6 million 46% increase
Adjusted EBITDA margin, net 2 of 16.0% compared to 14.6% , a 140 bps increase
Activity Under Stock Repurchase Program:
In November 2022, the Company's Board of Directors authorized a stock repurchase program, ("Stock Repurchase Program") to repurchase up to $10.0 million $25.94 $9.3 million
Introducing non-GAAP Adjusted Earnings per Share:
In connection with the release of financial results for the three and nine months ended September 30, 2023, the Company introduced the new non-GAAP financial metric of adjusted earnings per share (“Adjusted EPS”). 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.
For the three months ended September 30, 2023, compared to September 30, 2022:
Basic Adjusted EPS was $0.36 $0.48
Diluted Adjusted EPS was $0.34 $0.46
For the nine months ended September 30, 2023, compared to September 30, 2022:
Basic Adjusted EPS was $0.79 $1.02
Diluted Adjusted EPS was $0.73 $0.98
Narrowing FY 2023 Guidance and Introducing FY 2024 Guidance
The Company is adjusting its full year 2023 outlook for Net Service Billing2 to be in the range of $306 $312 million 2 in the range of $48 $52 million 2 to be in the range of $345 $360 million 2 in the range of $56 $62 million
Q3 2023 Earnings Webcast
Bowman will host an earnings webcast to discuss the results of the quarter as follows:
Date: November 7, 2023
http://investors.bowman.com
1 Includes reclassification of Project Design Consultants and Anchor Engineering acquisitions as organic revenue.
2 Non-GAAP financial metrics the Company believes offer valuable perspective on results of operations. See Non-GAAP tables below for reconciliations.
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 80 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)
September 30,
2023
December 31,
2022
(Unaudited)
ASSETS
Current Assets
Cash and equivalents
$
14,431
$
13,282
Accounts receivable, net
85,229
64,443
Contract assets
28,904
16,321
Notes receivable - officers, employees, affiliates, current portion
934
1,016
Prepaid and other current assets
15,933
7,068
Total current assets
145,431
102,130
Non-Current Assets
Property and equipment, net
28,088
25,104
Operating lease, right-of-use assets
38,205
30,264
Goodwill
75,731
53,210
Notes receivable
903
903
Notes receivable - officers, employees, affiliates, less current portion
1,383
1,417
Other intangible assets, net
38,177
27,950
Deferred tax asset, net
24,893
13,759
Other assets
1,149
1,020
Total Assets
$
353,960
$
255,757
LIABILITIES AND EQUITY
Current Liabilities
Revolving Credit Facility
$
22,379
$
–
Accounts payable and accrued liabilities
43,499
40,293
Contract liabilities
7,911
6,370
Notes payable, current portion
10,257
10,168
Operating lease obligation, current portion
8,289
6,949
Finance lease obligation, current portion
6,396
5,297
Total current liabilities
98,731
69,077
Non-Current Liabilities
Other non-current obligations
32,441
356
Notes payable, less current portion
13,157
16,276
Operating lease obligation, less current portion
35,670
28,087
Finance lease obligation, less current portion
14,880
14,254
Pension and post-retirement obligation, less current portion
4,880
4,848
Total liabilities
$
199,759
$
132,898
Shareholders' Equity
Preferred Stock, $0.01
$
–
$
–
Common stock, $0.01
171
159
Additional paid-in-capital
196,731
162,922
Accumulated other comprehensive income
546
578
Treasury stock, at cost; 2,530,186 and 2,393,255, respectively
(24,425
)
(20,831
)
Stock subscription notes receivable
(112
)
(173
)
Accumulated deficit
(18,710
)
(19,796
)
Total shareholders' equity
$
154,201
$
122,859
TOTAL LIABILITIES AND EQUITY
$
353,960
$
255,757
BOWMAN CONSULTING GROUP LTD.
CONDENSED CONSOLIDATED INCOME STATEMENT
(Amounts in thousands except per share data)
(Unaudited)
For the Three Months
Ended September 30,
For the Nine Months
Ended September 30,
2023
2022
2023
2022
Gross Contract Revenue
$
94,434
$
71,246
$
253,290
$
186,105
Contract costs: (exclusive of depreciation and amortization below)
Direct payroll costs
33,383
27,641
94,287
73,353
Sub-consultants and expenses
12,310
6,343
29,811
17,086
Total contract costs
45,693
33,984
124,098
90,439
Operating Expenses:
Selling, general and administrative
41,735
31,916
113,717
82,819
Depreciation and amortization
4,500
3,138
12,785
8,350
(Gain) on sale
(110
)
(11
)
(347
)
(44
)
Total operating expenses
46,125
35,043
126,155
91,125
Income from operations
2,616
2,219
3,037
4,541
Other expense
1,495
595
3,852
2,086
Income (loss) before tax expense
1,121
1,624
(815
)
2,455
Income tax (benefit) expense
(62
)
(1,773
)
(1,901
)
(2,079
)
Net income
$
1,183
$
3,397
$
1,086
$
4,534
Earnings allocated to non-vested shares
146
504
$
140
$
731
Net income attributable to common shareholders
$
1,037
$
2,893
$
946
$
3,803
Earnings per share
Basic
$
0.08
$
0.26
$
0.08
$
0.36
Diluted
$
0.08
$
0.25
$
0.07
$
0.34
Weighted average shares outstanding:
Basic
12,814,971
11,304,946
12,304,751
10,669,221
Diluted
13,793,120
11,768,411
13,437,841
11,129,478
BOWMAN CONSULTING GROUP LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Nine Months Ended
2023
2022
Cash Flows from Operating Activities:
Net Income
$
1,086
$
4,534
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization
7,172
6,366
Amortization of intangible assets
5,613
1,984
Gain on sale of assets
(347
)
(44
)
Bad debt
630
527
Stock based compensation
18,280
11,487
Accretion of discounts on notes payable
459
–
Deferred taxes
(11,134
)
(833
)
Deferred rent
–
(323
)
Changes in operating assets and liabilities, net of acquisition of businesses
Accounts receivable
(14,581
)
(12,356
)
Contract assets
(8,118
)
(104
)
Prepaid expenses and other assets
(4,370
)
(4,376
)
Accounts payable and accrued expenses
19,752
5,122
Contract liabilities
(2,171
)
186
Net cash provided by operating activities
12,271
12,170
Cash Flows from Investing Activities:
Purchases of property and equipment
(2,081
)
(901
)
Fixed assets converted to lease financing
–
196
Proceeds from sale of assets and disposal of leases
347
54
Payments received under loans to shareholders
115
151
Acquisitions of businesses, net of cash acquired
(15,442
)
(14,806
)
Collections under stock subscription notes receivable
62
75
Net cash used in investing activities
(16,999
)
(15,231
)
Cash Flows from Financing Activities:
Proceeds from common stock offering, net of underwriting discounts and commissions and other offering costs
–
15,475
Borrowings under revolving credit facility
22,379
–
Repayments under fixed line of credit
(381
)
(547
)
Repayment under notes payable
(8,715
)
(2,720
)
Payments on finance leases
(4,989
)
(4,575
)
Payments for purchase of treasury stock
(3,594
)
(2,368
)
Proceeds from issuance of common stock
1,177
1,021
Net cash provided by financing activities
5,877
6,286
Net increase in cash and cash equivalents
1,149
3,225
Cash and cash equivalents, beginning of period
13,282
20,619
Cash and cash equivalents, end of period
$
14,431
$
23,844
Supplemental disclosures of cash flow information:
Cash paid for interest
$
2,815
$
1,131
Cash paid for income taxes
$
900
383
Non-cash investing and financing activities:
Property and equipment acquired under finance lease
$
(6,724
)
$
(6,623
)
Note payable converted to common shares
$
(672
)
$
–
Issuance of notes payable for acquisitions
$
(6,277
)
$
(16,059
)
BOWMAN CONSULTING GROUP LTD.
RECONCILIATION OF EPS TO ADJUSTED EPS
(amounts in thousands except per share data)
For the Three Months Ended
For the Nine Months Ended
2023
2022
2023
2022
Net Income (GAAP)
$
1,183
3,397
1,086
4,534
+ tax expense (benefit) (GAAP)
(62
)
(1,773
)
(1,901
)
(2,079
)
Income (loss) before tax expense (GAAP)
1,121
1,624
(815
)
2,455
+ acquisition related expenses
555
391
2,177
1,436
+ amortization of intangibles
1,948
743
5,613
1,984
+ non-cash stock comp related to pre-IPO
1,744
2,060
5,207
6,113
+ other non-core expenses
560
–
674
215
Adjusted income before tax expense
5,928
4,818
12,856
12,203
Adjusted income tax (benefit) expense
620
(1,555
)
1,665
(822
)
Adjusted net income
$
5,308
$
6,373
$
11,191
$
13,025
Adjusted earnings allocated to non-vested shares
655
947
1,438
2,100
Adjusted net income attributable to common shareholders
$
4,653
$
5,426
$
9,753
$
10,925
Earnings per share (GAAP)
Basic
$
0.08
$
0.26
$
0.08
$
0.36
Diluted
$
0.08
$
0.25
$
0.07
$
0.34
Adjusted earnings per share (Non-GAAP)
Basic
$
0.36
$
0.48
$
0.79
$
1.02
Diluted
$
0.34
$
0.46
$
0.73
$
0.98
Weighted average shares outstanding
Basic
12,814,971
11,304,946
12,304,751
10,669,221
Diluted
13,793,120
11,768,411
13,437,841
11,129,478
Basic Adjusted Earnings Per Share Summary - Non-GAAP
For the Three Months Ended
For the Nine Months Ended
2023
2022
2023
2022
Earnings per share (GAAP)
$
0.08
$
0.26
$
0.08
$
0.36
Pre-tax basic per share adjustments
$
0.38
$
0.16
$
0.97
$
0.78
Adjusted earnings per share before tax expense
$
0.46
$
0.42
$
1.05
$
1.14
Tax expense (benefit) per share adjustment
$
0.05
$
(0.14
)
$
0.14
$
(0.08
)
Adjusted earnings per share - adjusted net income
$
0.41
$
0.56
$
0.91
$
1.22
Adjusted earnings per share allocated to non-vested shares
$
0.05
$
0.08
$
0.12
$
0.20
Adjusted earnings per share attributable to common shareholders
$
0.36
$
0.48
$
0.79
$
1.02
Diluted Adjusted Earnings Per Share Summary - Non-GAAP
For the Three Months Ended
For the Nine Months Ended
2023
2022
2023
2022
Earnings per share (GAAP)
$
0.08
$
0.25
$
0.07
$
0.34
Pre-tax diluted per share adjustments
$
0.35
$
0.16
$
0.89
$
0.76
Adjusted earnings per share before tax expense
$
0.43
$
0.41
$
0.96
$
1.10
Tax expense (benefit) per share adjustment
$
0.04
$
(0.13
)
$
0.12
$
(0.07
)
Adjusted earnings per share - adjusted net income
$
0.39
$
0.54
$
0.84
$
1.17
Adjusted earnings per share allocated to non-vested shares
$
0.05
$
0.08
$
0.11
$
0.19
Adjusted earnings per share attributable to common shareholders
$
0.34
$
0.46
$
0.73
$
0.98
BOWMAN CONSULTING GROUP LTD.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(amounts in thousands except per share data)
Condensed Combined Statement of Operations Reconciliation
For the Three Months Ended
For the Nine Months Ended
2023
2022
2023
2022
Gross contract revenue
$
94,434
$
71,246
$
253,290
$
186,105
Contract costs (exclusive of depreciation and amortization)
45,693
33,984
124,098
90,439
Operating expense
46,125
35,043
126,155
91,125
Income from operations
2,616
2,219
3,037
4,541
Other expense
1,495
595
3,852
2,086
Income tax expense (benefit)
(62
)
(1,773
)
(1,901
)
(2,079
)
Net income
$
1,183
$
3,397
$
1,086
$
4,534
Net margin
1.3
%
4.8
%
0.4
%
2.4
%
Other financial information 1
Net service billing
$
82,124
$
64,903
$
223,479
$
169,019
Adjusted EBITDA
15,057
9,624
35,783
24,606
Adjusted EBITDA margin, net
18.3
%
14.8
%
16.0
%
14.6
%
Gross Revenue to Net Service Billing Reconciliation
For the Three Months Ended
For the Nine Months Ended
2023
2022
2023
2022
Gross contract revenue
$
94,434
$
71,246
$
253,290
$
186,105
Less: sub-consultants and other direct expenses
12,310
6,343
29,811
17,086
Net service billing
$
82,124
$
64,903
$
223,479
$
169,019
Adjusted EBITDA Reconciliation
For the Three Months Ended
For the Nine Months Ended
2023
2022
2023
2022
Net Service Billing
$
82,124
$
64,903
$
223,479
$
169,019
Net Income
$
1,183
$
3,397
$
1,086
$
4,534
+ interest expense
1,538
538
3,545
1,223
+ depreciation & amortization
4,500
3,138
12,785
8,350
+ tax (benefit) expense
(62
)
(1,773
)
(1,901
)
(2,079
)
EBITDA
$
7,159
$
5,300
$
15,515
$
12,028
+ non-cash stock compensation
7,158
4,214
18,480
11,487
+ transaction related expenses
63
–
186
–
+ settlements and other non-core expenses
560
—
674
215
+ acquisition expenses
117
110
928
876
Adjusted EBITDA
$
15,057
$
9,624
$
35,783
$
24,606
Adjusted EBITDA margin, net
18.3
%
14.8
%
16.0
%
14.6
%
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 September 30,
Consolidated Gross Revenue
2023
%
2022
%
Change
Change
Building Infrastructure
51,909
55.0
%
44,765
62.8
%
7,144
16.0
%
Transportation
19,769
20.9
%
13,218
18.6
%
6,551
49.6
%
Power and Utilities
18,586
19.7
%
8,809
12.4
%
9,777
111.0
%
Emerging Markets1
4,170
4.4
%
4,454
6.2
%
(284
)
(6.4
)%
Total
94,434
100.0
%
71,246
100.0
%
23,188
32.5
%
(dollars in thousands)
For the nine months ended September 30,
Consolidated Gross Revenue
2023
%
2022
%
Change
% Change
Building Infrastructure
144,862
57.2
%
126,093
67.8
%
18,769
14.9
%
Transportation
51,658
20.4
%
26,464
14.2
%
25,194
95.2
%
Power and Utilities
47,481
18.7
%
24,370
13.1
%
23,111
94.8
%
Emerging Markets1
9,289
3.7
%
9,178
4.9
%
111
1.2
%
Total
253,290
100.0
%
186,105
100.0
%
67,185
36.1
%
(dollars in thousands)
For the three months ended September 30,
Organic v Acquired Revenue 2
2023
%
2022
%
Change
% Change
Baseline organic revenue
79,003
83.7
%
71,078
99.8
%
7,925
11.1
%
Acquired revenue
15,431
16.3
%
168
0.2
%
15,263
n/a
Total
94,434
100.0
%
71,246
100.0
%
23,188
32.5
%
(dollars in thousands)
For the nine months ended September 30,
Organic v Acquired Revenue 2
2023
%
2022
%
Change
% Change
Baseline organic revenue
226,240
89.3
%
185,937
99.9
%
40,303
21.7
%
Acquired revenue
27,050
10.7
%
168
0.1
%
26,882
n/a
Total
253,290
100.0
%
186,105
100.0
%
67,185
36.1
%
1 Adjusted for change, represents mining, water resources and other. Effective 12/31/2022, we reclassified renewables as power & utilities. For nine months ended September 30, 2022, $4.4 million 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 SEPTEMBER 30, 2023
(Unaudited)
Category
Percentage
Building Infrastructure
54 %
Transportation
25 %
Power and Utilities
19 %
Emerging Markets
2 %
TOTAL
100 %
View source version on businesswire.com: https://www.businesswire.com/news/home/20231106529323/en/
Investor Relations Contacts:
ir@bowman.com
Larry Clark
lclark@bowman.com
Source: Bowman Consulting Group
What is the company name mentioned in the press release?
The company mentioned in the press release is Bowman Consulting Group Ltd.
What is the stock symbol of Bowman Consulting Group Ltd.?
The stock symbol of Bowman Consulting Group Ltd. is Nasdaq: BWMN.
What are the key points from the financial results?
The key points from the financial results include record gross revenue, margin leverage, and strong operating cash flow. The company's strategic growth initiative is showing positive results through increased scale.
What industries are driving infrastructure spending?
Transportation, energy, and manufacturing funding are driving infrastructure spending according to the press release.
