Skip to main content

8-K

Bowman Consulting Group Ltd. (BWMN)

8-K 2022-11-14 For: 2022-11-10
View Original
Added on April 06, 2026
View as plain text

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 10, 2022

Bowman Consulting Group Ltd.

(Exact name of registrant as specified in its charter)

Delaware 001-40371 54-1762351
(State or other jurisdiction<br> <br>of incorporation) (Commission<br> <br>File Number) (IRS Employer<br> <br>Identification No.)

12355 Sunrise Valley Drive, Suite 520

Reston, Virginia 20191

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (703) 464-1000

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
--- ---
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
--- ---
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
--- ---

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class Trading<br> <br>Symbol(s) Name of Each Exchange<br> <br>on Which Registered
Common stock, par value $0.01 per share BWMN Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02. Results of Operations and Financial Condition.

On November 10, 2022, Bowman Consulting Group Ltd. (“Bowman” or the “Company) issued a press release announcing its financial results for the third quarter ended September 30, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Report.

The information in this Report under this item, including the exhibit, is provided under Item 2.02 of Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to the liabilities of that section. Furthermore, the information in this Report, including the exhibits, shall not be deemed to be incorporated by reference into the Company’s filings under the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit<br> <br>No. Description
99.1 Bowman Consulting Group Ltd. press release dated November 10, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BOWMAN CONSULTING GROUP LTD.
Date: November 10, 2022 By: /s/ Bruce Labovitz
Bruce Labovitz
Chief Financial Officer

EX-99.1

Exhibit 99.1

Bowman Announces Record Third Quarter Results; Exceeds Consensus Estimates and Raises Guidance

Reston, Va., November 10, 2022 (BUSINESS WIRE) – Bowman Consulting Group Ltd. (Nasdaq: BWMN) (“Bowman” or the “Company”), a national engineering services firm supporting owners and developers of the built environment, today released record financial results for the three months ended September 30, 2022.

“We have once again reported a record quarter that exceeded estimates,” said Gary Bowman, Chairman and CEO of Bowman. “We continue to generate growth across all our markets and increase our backlog through bookings that outpace deliveries.    Our acquisitions program has proven successful as we continue to acquire strategic partners at attractive multiples and realize meaningful synergies, leading to acquired revenue growth of 24% collectively since acquisition. We are optimistic about the fourth quarter and expect continued growth in revenue, earnings, and operating cash flow into 2023. We are once again increasing our full year outlook and are introducing 2023 guidance that reflects confidence in our ability to continue to deliver these industry leading results.”

Financial Highlights for the three months ended September 30, 2022, compared to September 30, 2021:

Gross revenue of $71.2 million, compared to $39.7 million, a 79% increase
Year-over-year organic gross revenue growth of 23%
--- ---
Net service billing^1^ of $64.9 million, compared to<br>$35.7 million, an 82% increase
--- ---
Year-over-year organic net service billing growth of 25%
--- ---
Net income of $3.4 million, compared to a net income of $0.4 million
--- ---
Adjusted EBITDA^1^ of $9.6 million, compared to<br>$4.4 million, a 118% increase
--- ---
Adjusted EBITDA margin, net^1^of 14.8%, compared to 12.4%, a<br>240-basis point increase
--- ---
Gross backlog^1^ of $230 million, compared to<br>$139 million, a 65% increase
--- ---

Financial Highlights for the nine months ended September 30, 2022, comparedto September 30, 2021:

Gross revenue of $186.1 million, compared to $108.0 million, a 72% increase
Year-over-year organic gross revenue growth of 28%
--- ---
Net service billing^1^ of $169.0 million, compared to<br>$97.1 million, a 74% increase
--- ---
Year-over-year organic net service billing growth of 31%
--- ---
Net income of $4.5 million, compared to a net income of $0.9 million
--- ---
Adjusted EBITDA^1^ of $24.6 million, compared to<br>$12.7 million, a 94% increase
--- ---
Adjusted EBITDA margin, net^1^of 14.6%, compared to 13.1%, a<br>150-basis point increase
--- ---

Business Highlights during the Third Quarter:

Closed on the acquisition of Project Design Consultants – July 2022
Closed on the acquisition of Anchor Engineering – August 2022
--- ---

Business Highlights after the Third Quarter:

Closed on the acquisition of Spatial Acuity – November 2022
Closed on the acquisition of SEI Engineering – November 2022
--- ---

Increasing FY 2022 Guidance and Introducing FY 2023 Guidance

The Company is increasing its full year 2022 outlook for Net Service Billing to be in the range of $230 to $234 million and Adjusted EBITDA in the range of $33 to $35 million. This represents an increase from the previous guidance for Net Service Billing of $205 to $220 million and Adjusted EBITDA of $29 to $33 million. The Company is introducing its full year 2023 outlook for Net Service Billing to be in the range of $270 to $290 million and Adjusted EBITDA in the range of $42 to $48 million. The current outlook for 2022 and 2023 is based on completed acquisitions as of the date of this release and does not include contributions from any future acquisitions. Management will discuss the Company’s acquisition pipeline during its upcoming earnings call.

Q3 2022 Earnings Webcast

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

Date: November 11, 2022
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^ Non-GAAP financial metrics the Company believes offervaluable perspective on results of operations. See Non-GAAP tables below for reconciliations. ****
--- ---

About Bowman Consulting Group Ltd.

Headquartered in Reston, Virginia, Bowman is an established professional services firm delivering innovative engineering solutions to customers who own, develop, and maintain the built environment. With over 1,700 employees in more than 68 offices throughout the United States, Bowman provides a variety of planning, engineering, construction management, commissioning, environmental consulting, geomatics, survey, land procurement and other technical services to customers operating in a diverse set of regulated end markets. For more information, visit bowman.com or investors.bowman.com.

Contact:
Investor Relations
Bruce Labovitz Megan McGrath
ir@bowman.com mmcgrath@finprofiles.com
(703) 787-3403 (310) 622-8248

Forward-Looking Statements

This press release may contain “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private SecuritiesLitigation 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 andobjectives 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 aboutfuture 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 aresubject 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 importantfactors 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 privateclients 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 ourcompetitors; (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 trendsdiscussed 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 theseforward-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, withcertain non-GAAP financial measures, as described below, to help represent, explain, and understand our operating performance. These non-GAAP financialmeasures 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 financialperformance 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 assistinvestors 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 toother 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. AND AFFILIATES

CONDENSED CONSOLIDATED INCOME STATEMENTS

(Amounts in thousands except per share data)

(Unaudited)

For the Three Months<br>Ended September 30, For the Nine Months<br>Ended September 30,
2022 2021 2022 2021
Gross Contract Revenue $ 71,246 $ 39,715 $ 186,105 $ 108,041
Contract costs: (exclusive of depreciation and amortization below)
Direct payroll costs 27,641 15,531 73,353 42,873
Sub-consultants and expenses 6,343 3,967 17,086 10,967
Total contract costs 33,984 19,498 90,439 53,840
Operating Expenses:
Selling, general and administrative 31,916 18,373 82,819 48,328
Depreciation and amortization 3,138 1,598 8,350 4,506
Gain on sale (11 ) (46 ) (44 ) (99 )
Total operating expenses 35,043 19,925 91,125 52,735
Income from operations 2,219 292 4,541 1,466
Other expense 595 314 2,086 706
Income (loss) before tax expense 1,624 (22 ) 2,455 760
Income tax (benefit) expense (1,773 ) (379 ) (2,079 ) (139 )
Net income $ 3,397 **** $ 357 **** $ 4,534 **** $ 899 ****
Earnings allocated to non-vested shares 504 71 731 165
Net income attributable to common shareholders $ 2,893 $ 286 $ 3,803 $ 734
Earnings per share
Basic $ 0.26 $ 0.03 $ 0.36 $ 0.10
Diluted $ 0.25 $ 0.03 $ 0.34 $ 0.10
Weighted average shares outstanding:
Basic 11,304,946 8,920,505 10,669,221 7,003,462
Diluted 11,768,411 8,935,274 11,129,478 7,008,440

BOWMAN CONSULTING GROUP LTD. AND AFFILIATES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands except per share data)

December 31,2021
ASSETS
Current Assets
Cash and equivalents 23,844 $ 20,619
Accounts receivable, net 61,550 38,491
Contract assets 11,772 9,189
Notes receivable - officers, employees, affiliates, current portion 1,162 1,260
Prepaid and other current assets 9,825 4,850
Total current assets 108,153 74,409
Non-Current Assets
Property and equipment, net 22,683 20,202
Goodwill 55,264 28,471
Notes receivable 903 903
Notes receivable - officers, employees, affiliates, less current portion 1,183 1,218
Other intangible assets, net 15,734 12,286
Other assets 809 681
Total Assets 204,729 **** $ 138,170 ****
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued liabilities 28,541 $ 17,921
Contract liabilities 7,689 4,623
Notes payable, current portion 9,843 4,450
Deferred rent, current portion 729 724
Capital lease obligation, current portion 7,473 5,136
Total current liabilities 54,275 32,854
Non-Current Liabilities
Other non-current obligations 522
Notes payable, less current portion 15,807 8,407
Deferred rent, less current portion 3,851 4,179
Capital lease obligation, less current portion 10,021 10,020
Deferred tax liability, net 3,456 4,290
Common shares subject to repurchase 7
Total liabilities 87,932 **** $ 59,757 ****
Shareholders’ Equity
Preferred Stock, 0.01 par value; 5,000,000 shares authorized, no shares issued and<br>outstanding $
Common stock, 0.01 par value; 30,000,000 shares authorized; 15,723,109 shares issued and<br>13,384,491 outstanding, and 13,690,868 shares issued and 11,489,579 outstanding, respectively 157 137
Additional<br>paid-in-capital 156,966 120,842
Treasury stock, at cost; 2,338,618 and 2,201,289, respectively (19,857 ) (17,488 )
Stock subscription notes receivable (202 ) (277 )
Accumulated deficit (20,267 ) (24,801 )
Total shareholders’ equity 116,797 **** $ 78,413 ****
TOTAL LIABILITIES AND EQUITY 204,729 **** $ 138,170 ****

All values are in US Dollars.

BOWMAN CONSULTING GROUP LTD. AND AFFILIATES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

For the Nine Months Ended September 30,
2022 2021
Cash Flows from Operating Activities:
Net Income $ 4,534 $ 899
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization - property, plant and equipment 6,366 4,283
Amortization of intangible assets 1,984 223
Gain on sale of assets (44 ) (99 )
Bad debt 527 266
Stock based compensation 11,487 5,341
Deferred taxes (833 ) (1,340 )
Deferred rent (323 ) (6 )
Changes in operating assets and liabilities, net of acquisition of businesses
Accounts Receivable (12,356 ) (10,015 )
Contract Assets (104 ) (961 )
Prepaid expenses and other assets (4,376 ) (1,462 )
Accounts payable and accrued expenses 5,122 6,132
Contract Liabilities 186 (31 )
Net cash provided by operating activities 12,170 3,230
Cash Flows from Investing Activities:
Purchases of property and equipment (901 ) (609 )
Fixed assets converted to lease financing 196
Proceeds from sale of assets and disposal of leases 54 100
Amounts advanced under loans to shareholders (473 )
Payments received under loans to shareholders 151 88
Acquisitions of businesses, net of cash acquired (14,806 ) (3,000 )
Collections under stock subscription notes receivable 75 170
Net cash used in investing activities (15,231 ) (3,724 )
Cash Flows from Financing Activities:
Proceeds from initial public offering, net of underwriting discounts and commissions and other<br>offering costs 47,104
Proceeds from common stock offering, net of underwriting discounts and commissions and other<br>offering costs 15,475
Net borrowings under revolving line of credit (3,481 )
Repayments under fixed line of credit (547 ) (540 )
Repayment under notes payable (2,720 ) (735 )
Payments on capital leases (4,575 ) (3,208 )
Payment of contingent consideration from acquisitions (2 )
Payments for purchase of treasury stock (2,368 ) (582 )
Proceeds from issuance of common stock 1,021 297
Net cash provided by financing activities 6,286 38,853
Net increase in cash and cash equivalents 3,225 38,359
Cash and cash equivalents, beginning of period 20,619 386
Cash and cash equivalents, end of period $ 23,844 $ 38,745

BOWMAN CONSULTING GROUP LTD. AND AFFILIATES

COMBINED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

For the Nine Months Ended September 30,
2022 2021
Supplemental disclosures of cash flow information:
Cash paid for interest $ 1,131 $ 647
Cash paid for income taxes $ 383 1,040
Non-cash investing and financingactivities:
Property and equipment acquired under capital lease $ (6,623 ) $ (5,704 )
Stock redemption for exercise of stock option $ 139
Issuance of notes payable for acquisitions $ (16,059 ) $ (3,450 )

BOWMAN CONSULTING GROUP LTD.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Unaudited)

Condensed Combined Statement of Operations Reconciliation

For the Three Months Ended September 30, For the Nine Months Ended September 30,
2022 2021 2022 2021
Gross contract revenue $ 71,246 $ 39,715 $ 186,105 $ 108,041
Contract costs (exclusive of depreciation and amortization) 33,984 19,498 90,439 53,840
Operating expense 35,043 19,925 91,125 52,735
Income from operations 2,219 292 4,541 1,466
Other (income) expense 595 314 2,086 706
Income tax expense (benefit) (1,773 ) (379 ) (2,079 ) (139 )
Net income $ 3,397 $ 357 $ 4,534 $ 899
Net margin 4.8 % 0.9 % 2.4 % 0.8 %
Other financial information ^1^
Net service billing $ 64,903 $ 35,748 $ 169,019 $ 97,074
Adjusted EBITDA 9,624 4,426 24,606 12,697
Adjusted EBITA margin, net 14.8 % 12.4 % 14.6 % 13.1 %

Gross Revenue to Net Service Billing Reconciliation

For the Three Months Ended September 30, For the Nine Months Ended September 30,
2022 2021 2022 2021
Gross contract revenue $ 71,246 $ 39,715 $ 186,105 $ 108,041
Less: sub-consultants and other direct expenses 6,343 3,967 17,086 10,967
Net services billing $ 64,903 $ 35,748 $ 169,019 $ 97,074

Adjusted EBITDA Reconciliation

For the Three Months Ended September 30, For the Nine Months Ended September 30,
2022 2021 2022 2021
Net Income $ 3,397 $ 357 $ 4,534 $ 899
+ interest expense 538 216 1,223 650
+ depreciation & amortization 3,138 1,598 8,350 4,506
+ tax expense (1,773 ) (379 ) (2,079 ) (139 )
EBITDA $ 5,300 $ 1,792 $ 12,028 $ 5,916
+ non-cash stock compensation 4,214 2,634 11,487 5,341
+ transaction related expenses 1,440
+ settlements and other non-core expenses 215
+ acquisition expenses 110 876
Adjusted EBITDA $ 9,624 $ 4,426 $ 24,606 $ 12,697
Adjusted EBITDA margin, net 14.8 % 12.4 % 14.6 % 13.1 %

BOWMAN CONSULTING GROUP LTD.

GROSS CONTRACT REVENUE COMPOSITION

For the Three Months Ended September 30,
Consolidated Gross Contract Revenue 2022 %GCR 2021 %GCR Change % Change
Building Infrastructure $ 44,765 62.8 % $ 28,303 71.3 % $ 16,462 58.2 %
Transportation 13,218 18.6 % 4,033 10.2 % 9,185 227.7 %
Power & Utilities 8,809 12.4 % 6,295 15.9 % 2,514 39.9 %
Other emerging markets ^1^ 4,454 6.2 % 1,084 2.6 % 3,370 310.8 %
Total: $ 71,246 **** 100.0 % $ 39,715 **** 100.0 % $ 31,531 **** 79.4 %
Organic $ 47,827 67.1 % $ 38,853 97.8 % $ 8,974 23.1 %
Acquired ^2^ 23,419 32.9 % 862 2.2 % 22,557 n/a
Total: $ 71,246 **** 100.0 % $ 39,715 **** 100.0 % $ 31,531 **** 79.4 %
For the Nine Months Ended September 30,
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Consolidated Gross Contract Revenue 2022 %GCR 2021 %GCR Change % Change
Building Infrastructure $ 126,093 67.8 % $ 74,511 69.0 % $ 51,582 69.2 %
Transportation 26,464 14.2 % 12,344 11.4 % 14,120 114.4 %
Power & Utilities 24,370 13.1 % 17,524 16.2 % 6,846 39.1 %
Other emerging markets ^1^ 9,178 4.9 % 3,662 3.4 % 5,516 150.6 %
Total: $ 186,105 **** 100.0 % $ 108,041 **** 100.0 % $ 78,064 **** 72.3 %
Organic and Acquired Gross Contract Revenue 2022 %GCR 2021 %GCR Change % Change
Organic $ 137,086 73.7 % $ 107,179 99.2 % $ 29,907 27.9 %
Acquired ^2^ 49,019 26.3 % 862 0.8 % 48,157 n/a
Total: $ 186,105 **** 100.0 % $ 108,041 **** 100.0 % $ 78,064 **** 72.3 %
1. represents renewable energy, mining, water resources and other
--- ---
2. after four quarters post-closing, acquired revenue is classified as organic; this results in a change from<br>previously reported numbers
--- ---

BOWMAN CONSULTING GROUP LTD.

BACKLOG AT SEPTEMBER 30, 2022

(Unaudited)

(Amounts in thousands) Gross Backlog
Building Infrastructure 116,531
Transportation 76,228
Power & Utilities 30,216
Other Emerging Markets 7,388
$ 230,363