8-K
Bowman Consulting Group Ltd. (BWMN)
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): March 21, 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> <br>of incorporation) | (Commission<br><br> <br>File Number) | (IRS Employer<br><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> <br>Symbol(s) | Name of Each Exchange<br><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 March 21, 2022, Bowman Consulting Group Ltd. issued a press release announcing its financial results for the fourth quarter ended December 31, 2021 and full year ended December 31, 2021. A copy of the press release is furnished as Exhibit 99.1 to this Report.
The information in this Report, including the exhibits, 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 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 filings of the registrant under the Securities Act of 1933.
| Item 9.01. | Financial Statements and Exhibits. |
|---|
(d) Exhibits
| Exhibit<br><br> No. | Description |
|---|---|
| 99.1 | Bowman Consulting Group Ltd.<br> earnings release. |
| 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: March 22, 2022 | By: | /s/ Bruce Labovitz |
| Bruce Labovitz | ||
| Chief Financial Officer |
Exhibit 99.1
Bowman Consulting Group Announces Fourth Quarter and Fiscal Year 2021 Financial Results
RESTON, Va.--(BUSINESS WIRE)--March 21, 2022--Bowman Consulting Group Ltd. (Nasdaq: BWMN) (“Bowman” or the “Company”), a national engineering services firm supporting owners and developers of the built environment, today announced results of operations for the three and twelve months ended December 31, 2021.
“We finished the year strong, generating record revenue in 2021 and ending the year with gross backlog of $167 million, up 48% year-over-year”, said Gary Bowman, Chairman and CEO of Bowman. “Consistent with our business strategy of expanding our geographic footprint, service offerings and customer base, we completed six acquisitions in the fourth quarter, bringing our total for the year to eight. Our integration process, combined with the addition of experienced team members, is creating immediate revenue synergies, and is resulting in economies of scale that we expect will positively impact our margins. We are well capitalized to continue executing on our growth initiatives and given our current pipeline of acquisition opportunities we expect to close on additional transactions this year at valuations that meet our target objectives. We remain focused on building shareholder value and delivering on our commitment to generate profitable growth.”
Financial highlights of the three months ended December 31, 2021:
- Gross revenue of $41.9 million, a year-over-year increase of 40%
- Net service billing^1^ of $37.8 million, a year-over-year increase of 44%
- Net loss of $0.6 million
- Adjusted EBITDA^1^ of $3.5 million
- Adjusted EBITDA margin, net^1^of 9.3%
- Gross backlog^1^ of $167 million, an increase of 20% from September 30, 2021, and 48% as compared to December 31, 2020
Financial highlights of the year ended December 31, 2021:
- Gross revenue of $150.0 million, a year-over-year increase of 23%
- Net service billing^1^of $134.9 million, a year-over-year increase of 30%
- Net income of $0.3 million
- Adjusted EBITDA^1^ of $16.5 million, a year-over-year increase of 19%
- Adjusted EBITDA margin, net^1^of 12.2%
- Acquired revenue accounted for $11.8 million, or 8% of gross revenue
Other Business Highlights During and Subsequent to the Fourth Quarter:
- Closed on six acquisitions during Q4 2021
- Triangle Site Design in Raleigh, NC
- PCD Engineering in Denver, CO
- BTM Engineering in Louisville, KY
- Kibart in Towson, MD
- 1519 Surveying in Waco, TX
- Terra Associates in Houston, TX
- Closed on the acquisition of Perry Engineering in Tucson, AZ in Q1 2022
Year-End Guidance:
The Company is increasing and narrowing its full year 2022 outlook for Net Service Billing to be in the range of $170 to $185 million and Adjusted EBITDA in the range of $23 to $27 million. This presents an increase from previous guidance of $150 to $170 million of Net Service Billing and $20 to $24 million of Adjusted EBITDA. The current outlook for 2022 is based on completed acquisitions as of the date of this release and does not include contributions from any future acquisitions. The Company expects to continue making strategic and financially accretive acquisitions that are not yet reflected in this current outlook. Management will discuss the Company’s acquisition pipeline during its upcoming earnings call.
^-----------------------^
^1^Non-GAAP financial metrics the Company believes offer valuable perspective on results of operations. See Non-GAAP tables below for reconciliations.
FY 2022 Earnings Webcast
Bowman will host an earnings webcast to discuss the results of the quarter as follows:
Date: March 22, 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
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 1,200 employees in more than 45 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.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the "safe harbor” provisions of the 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” 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. These risks and uncertainties are detailed in the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our final prospectus Form 424B4 dated February 8, 2022, which is available on the SEC's website at sec.gov, and other documents we have filed, or may file, with the SEC. Such risks and uncertainties may be amplified by the COVID-19 pandemic and its potential impact on our business and the global economy. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. 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.
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 and other information about certain of these non-GAAP financial measures are included in the financial tables accompanying this press release.
| BOWMAN CONSULTING GROUP LTD.<br><br> <br>CONDENSED CONSOLIDATED INCOME STATEMENTS<br><br> <br>(Amounts in thousands except per share data) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For the Three Months Ended December 31, | For the Twelve Months Ended December 31, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Gross Contract Revenue | $ | 41,929 | $ | 29,894 | $ | 149,970 | $ | 122,020 | ||||
| Contract costs: (exclusive of depreciation and amortization below) | ||||||||||||
| Direct payroll costs | 16,527 | 11,384 | 59,416 | 48,152 | ||||||||
| Sub-consultants and expenses | 4,149 | 3,546 | 15,116 | 18,360 | ||||||||
| Total contract costs | 20,676 | 14,930 | 74,532 | 66,512 | ||||||||
| Operating Expenses: | ||||||||||||
| Selling, general and administrative | 20,717 | 12,914 | 69,029 | 51,469 | ||||||||
| Depreciation and amortization | 1,865 | 1,325 | 6,371 | 2,277 | ||||||||
| (Gain) loss on sale | (23 | ) | (62 | ) | (122 | ) | (107 | ) | ||||
| Total operating expenses | 22,559 | 14,177 | 75,278 | 53,639 | ||||||||
| Income (loss) from operations | (1,306 | ) | 787 | 160 | 1,869 | |||||||
| Other (income) expense | 734 | 69 | 1,440 | (110 | ) | |||||||
| Income (loss) before tax expense | (2,040 | ) | 718 | (1,280 | ) | 1,979 | ||||||
| Income tax (benefit) expense | (1,441 | ) | 522 | (1,579 | ) | 989 | ||||||
| Net income (loss) | $ | (599 | ) | $ | 196 | $ | 299 | $ | 990 | |||
| Earnings allocated to nonvested shares | - | 14 | 56 | 55 | ||||||||
| Net income (loss) attributable to common shareholders | $ | (599 | ) | $ | 182 | $ | 243 | $ | 935 | |||
| Earnings (loss) per share | ||||||||||||
| Basic | $ | (0.07 | ) | $ | 0.04 | $ | 0.03 | $ | 0.17 | |||
| Diluted | $ | (0.07 | ) | $ | 0.04 | $ | 0.03 | $ | 0.17 | |||
| Weighted average shares outstanding: | ||||||||||||
| Basic | 9,073,424 | 4,893,615 | 7,525,206 | 5,399,356 | ||||||||
| Diluted | 9,073,424 | 4,906,478 | 7,635,615 | 5,412,218 |
| BOWMAN CONSULTING GROUP LTD. <br> CONDENSED CONSOLIDATED BALANCE SHEETS <br> (Amounts in thousands except per share data) | |||||
|---|---|---|---|---|---|
| December 31, | |||||
| 2020 | |||||
| ASSETS | |||||
| Current Assets | |||||
| Cash and equivalents | 20,619 | 386 | |||
| Accounts Receivable, net | 38,491 | 24,183 | |||
| Contract assets | 9,189 | 7,080 | |||
| Notes receivable - officers, employees, affiliates, current portion | 1,260 | 1,182 | |||
| Prepaid and other current assets | 4,850 | 2,271 | |||
| Total current assets | 74,409 | 35,102 | |||
| Non-Current Assets | |||||
| Property and equipment, net | 20,202 | 15,357 | |||
| Goodwill | 28,471 | 9,179 | |||
| Notes receivable | 903 | 903 | |||
| Notes receivable - officers, employees, affiliates, less current portion | 1,218 | 1,297 | |||
| Other intangible assets, net | 12,286 | 1,131 | |||
| Other assets | 681 | 669 | |||
| Total Assets | 138,170 | $ | 63,638 | ||
| LIABILITIES AND EQUITY | |||||
| Current Liabilities | |||||
| Bank line of credit | - | 3,481 | |||
| Accounts payable and accrued liabilities, current portion | 17,921 | 12,203 | |||
| Contract liabilities | 4,623 | 1,943 | |||
| Notes payable, current portion | 4,450 | 1,592 | |||
| Deferred rent, current portion | 724 | 619 | |||
| Capital lease obligation, current portion | 5,136 | 3,495 | |||
| Total current liabilities | 32,854 | 23,333 | |||
| Non Current Liabilities | |||||
| Other non-current obligations | - | 1,244 | |||
| Notes payable, less current portion | 8,407 | 2,829 | |||
| Deferred rent, less current portion | 4,179 | 4,278 | |||
| Capital lease obligation, less current portion | 10,020 | 7,503 | |||
| Deferred tax liability, net | 4,290 | 6,472 | |||
| Common shares subject to repurchase | 7 | 842 | |||
| Total liabilities | 59,757 | $ | 46,501 | ||
| Shareholders' Equity | |||||
| Preferred Stock, 0.01 par value; 5,000,000 shares authorized, no shares issued and outstanding | - | ||||
| Common stock, 0.01 par value; 30,000,000 shares authorized; 13,690,868 shares issued and 11,489,579<br> outstanding, and 7,840,244 shares issued and 5,744,594 outstanding, respectively | 137 | 2 | |||
| Additional paid-in-capital | 120,842 | 58,866 | |||
| Treasury Stock, at cost; 2,201,289 and 2,095,650, respectively | (17,488 | ) | (16,022 | ) | |
| Stock subscription notes receivable | (277 | ) | (609 | ) | |
| Accumulated deficit | (24,801 | ) | (25,100 | ) | |
| Total shareholders' equity (deficit) | 78,413 | $ | 17,137 | ||
| TOTAL LIABILITIES AND EQUITY | 138,170 | $ | 63,638 |
All values are in US Dollars.
| BOWMAN CONSULTING GROUP LTD.<br><br> <br>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS<br><br> <br>(Amounts in thousands) | ||||
|---|---|---|---|---|
| For the Twelve Months Ended December 31, | ||||
| Cash Flows from Operating Activities: | ||||
| Net Income | 299 | 990 | ||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||
| Depreciation and amortization - property, plant and equipment | ||||
| Amortization of intangible assets | ||||
| Gain on sale of assets | ) | ) | ||
| Bad debt | ||||
| Stock based compensation | ||||
| Deferred taxes | ) | |||
| Deferred rent | ||||
| Changes in operating assets and liabilities | ||||
| Accounts Receivable | ) | |||
| Contract Assets | ) | |||
| Prepaid expenses | ) | |||
| Other assets | ) | ) | ||
| Accounts payable and accrued expenses | ) | |||
| Contract Liabilities | ) | ) | ||
| Net cash provided by operating activities | ||||
| Cash Flows from Investing Activities: | ||||
| Purchases of property and equipment | ) | ) | ||
| Proceeds from sale of assets | ||||
| Amounts advanced under loans to shareholders | ) | ) | ||
| Payments received under loans to shareholders | ||||
| Amounts advanced under notes receivable | ) | ) | ||
| Payments received under notes receivable | ||||
| Acquisitions of businesses, net of cash acquired | ) | ) | ||
| Collections under stock subscription notes receivable | ||||
| Net cash used in investing activities | ) | ) | ||
| Cash Flows from Financing Activities: | ||||
| Proceeds from initial public offering, net of underwriting discounts and commissions and other offering costs | ||||
| Net repayments under revolving line of credit | ) | ) | ||
| Repayments under fixed line of credit | ) | ) | ||
| Borrowings under fixed line of credit | ||||
| Repayment under notes payable | ) | ) | ||
| Payments on capital leases | ) | ) | ||
| Payment of contingent consideration from acquisitions | ) | ) | ||
| Payment of subsequent common stock offering costs | ) | ) | ||
| Payments for purchase of treasury stock | ) | ) | ||
| Proceeds from issuance of common stock | ||||
| Net cash provided by (used in) financing activities | ) | |||
| . | ||||
| Net increase (decrease) in cash and cash equivalents | ) | |||
| Cash and cash equivalents, beginning of period | ||||
| Cash and cash equivalents, end of period | 20,619 | 386 | ||
| COMBINED STATEMENT OF CASH FLOWS | ||||
| For the Twelve Months Ended December 31, | ||||
| Supplemental disclosures of cash flow information: | ||||
| Cash paid for interest | 887 | 609 | ||
| Cash paid for income taxes | 1,921 | 543 | ||
| Non-cash investing and financing activities | ||||
| Property and equipment acquired under capital lease | (8,877 | ) | (11,370 | ) |
| Settlement of redeemable common stock | 0 | 36,927 | ||
| Stock redemption for exercise of stock option | 139 | 0 | ||
| Issuance of common stock for a note receivable | 0 | (533 | ) | |
| Stock redemption for payment of shareholder loans | 0 | 1,457 | ||
| Stock redemption for payment on note receivable | 0 | 6,130 | ||
| Issuance of notes payable for purchase of intangible asset | 0 | (165 | ) | |
| Issuance of notes payable for acquisitions | (10,200 | ) | 0 | |
| Issuance of notes payable for redemption of stock | 0 | (900 | ) |
All values are in US Dollars.
| BOWMAN CONSULTING GROUP LTD.<br><br> <br>RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES<br><br> <br>(Amounts in thousands except per share data) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| For the Three Months Ended December 31, | For the Twelve Months Ended December 31, | |||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||
| Gross revenue | $ | 41,929 | $ | 29,894 | $ | 149,970 | $ | 122,020 | ||
| Less: sub-consultants and other direct expenses | 4,149 | 3,547 | 15,116 | 18,360 | ||||||
| Net service billing | $ | 37,780 | $ | 26,347 | $ | 134,854 | $ | 103,660 | ||
| For the Three Months Ended December 31, | For the Twelve Months Ended December 31, | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2021 | 2020 | 2021 | 2020 | |||||||
| Net Income (loss) | $ | (599 | ) | $ | 196 | $ | 299 | $ | 990 | |
| + interest expense | 268 | 198 | 918 | 565 | ||||||
| + depreciation & Amortization | 1,865 | 1,325 | 6,371 | 2,277 | ||||||
| + tax (benefit) expense | (1,441 | ) | 522 | (1,579 | ) | 989 | ||||
| EBITDA | $ | 93 | $ | 2,241 | $ | 6,009 | $ | 4,821 | ||
| + non-recurring operating lease rent | - | 91 | - | 2,521 | ||||||
| + non-cash stock compensation | 2,876 | 1,003 | 8,217 | 5,085 | ||||||
| + transaction related expenses | - | - | 1,555 | - | ||||||
| + settlements and other non-core expenses | - | - | - | 1,461 | ||||||
| + acquisition expenses | 565 | - | 704 | - | ||||||
| Adjusted EBITDA | $ | 3,534 | $ | 3,335 | $ | 16,485 | $ | 13,888 |
| BOWMAN CONSULTING GROUP LTD.<br><br> <br>GROSS CONTRACT REVENUE COMPOSITION<br><br> <br>(Amounts in thousands) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For the three months ended December 31, | |||||||||||||
| Consolidated Gross Revenue | 2021 | %CGR | 2020 | %CGR | Change | % Change | |||||||
| Building Infrastructure | $ | 31,559 | 75.3 | % | $ | 19,589 | 65.5 | % | $ | 11,970 | 61.1 | % | |
| Transportation | 3,845 | 9.2 | % | 4,975 | 16.6 | % | (1,130 | ) | -22.7 | % | |||
| Power and Utilities | 4,925 | 11.7 | % | 4,375 | 14.6 | % | 550 | 12.6 | % | ||||
| Emerging Markets | 1,600 | 3.8 | % | 956 | 3.2 | % | 644 | 67.4 | % | ||||
| Total | $ | 41,929 | 100.0 | % | $ | 29,894 | 100.0 | % | $ | 12,035 | 40.3 | % | |
| Organic | $ | 36,836 | 87.9 | % | $ | 29,894 | 100.0 | % | $ | 6,942 | 23.2 | % | |
| Acquired | 5,093 | 12.1 | % | - | 0.0 | % | 5,093 | - | |||||
| For the Year ended December 31, | |||||||||||||
| Consolidated Gross Revenue | 2021 | %CGR | 2020 | %CGR | Change | % Change | |||||||
| Building Infrastructure^1^ | $ | 105,242 | 70.2 | % | $ | 76,873 | 63.0 | % | $ | 28,369 | 36.9 | % | |
| Transportation | 16,537 | 11.0 | % | 19,157 | 15.7 | % | (2,620 | ) | (13.7 | %) | |||
| Power & Utilities | 22,525 | 15.0 | % | 20,377 | 16.7 | % | 2,148 | 10.5 | % | ||||
| Other emerging markets^2^ | 5,666 | 3.8 | % | 5,613 | 4.6 | % | 53 | 0.9 | % | ||||
| Total: | $ | 149,970 | 100.0 | % | $ | 122,020 | 100.0 | % | $ | 27,950 | 22.9 | % | |
| Organic | $ | 138,136 | 92.1 | % | $ | 122,020 | 100.0 | % | $ | 16,116 | 13.2 | % | |
| Acquired | 11,834 | 7.9 | % | - | 0.0 | % | 11,834 | - | |||||
| ^1^ formerly referred to as Communities, homes & buildings | |||||||||||||
| --- | |||||||||||||
| ^2^represents renewable energy, mining, water resources and other |
| BOWMAN CONSULTING GROUP LTD.<br><br> <br>GROSS BACKLOG AT DECEMBER 31, 2021 | ||
|---|---|---|
| 2021 | 2020 | |
| Building Infrastructure | 62.3% | 42.7% |
| Transportation | 19.0% | 28.0% |
| Power & Utilities | 16.2% | 24.8% |
| Emerging Markets | 2.5% | 4.5% |
Contacts
Investor Relations
Bruce Labovitz
ir@bowman.com
\(703\) 787-3403
Megan McGrath
mmcgrath@finprofiles.com
\(310\) 622-8248