Bowman Announces Financial Results for Three and Nine Months Ended September 30, 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 and nine months ended September 30, 2024.

“I’m pleased to report that we are delivering on our commitment to profitable growth,” said Gary Bowman, Chairman and CEO of Bowman. “For the first time in our history, we exceeded $100 million in net revenue in a single quarter. We are all justifiably proud of this significant milestone given our full year net revenue in 2020, the last year before our IPO, was $103 million. This accomplishment is a testament to the resolve and hard work of everyone at Bowman and our collective dedication to long-term strategic growth.”

“During the third quarter, we focused our efforts on aligning labor with revenue, capitalizing on economies of scale, increasing free cash flow generation and achieving operational excellence,” continued Bowman. “Throughout the company we affected leadership and staffing changes that made immediate, sustainable and positive impacts on operations, business development and revenue visibility. I am pleased with our progress and remain steadfast in the belief that our strategy with respect to markets, services, technology and growth will continue to produce meaningful long-term value for our employees and shareholders.”

Financial Results for the Three Months Ended September 30, 2024, Compared to September 30, 2023:

Gross contract revenue of $113.9 million, compared to $94.4 million, a 21% increase
Net service billing1 of $101.4 million, compared to $82.1 million, a 23% increase
Organic net service billing growth2 of 8%
Net income of $0.8 million, compared to net income of $1.2 million
Adjusted EBITDA1 of $17.0 million, compared to $15.1 million, a 13% increase
Adjusted EBITDA margin, net 1 of 16.7% compared to 18.3%, a 160-bps decrease
Basic and Diluted EPS of $0.04 compared to $0.08

Financial Results for the Nine Months Ended September 30, 2024, Compared to September 30, 2023:

Gross contract revenue of $313.3 million, compared to $253.3 million, a 24% increase
Net service billing1 of $281.0 million, compared to $223.5 million, a 26% increase
Organic net service billing growth2 of 6%
Net loss of $2.9 million, compared to net income of $1.1 million
Adjusted EBITDA1 of $42.5 million, compared to $35.8 million, a 19% increase
Adjusted EBITDA margin, net 1 of 15.1% compared to 16.0%, a 90-bps decrease
Basic and Diluted EPS of ($0.18) compared to $0.08 and $0.07, respectively
Gross backlog1 of $380 million, compared to $299 million, a 27% increase

Other Events of Note:

During the three months ended September 30, 2024, the Company repurchased 496,628 shares of its common stock for $11.9 million3
On October 31, 2024, the Company entered into a definitive purchase agreement to acquire Exeltech Consulting, Inc., a bridge design and transportation engineering firm based in Lacey, Washington, subject to usual and customary closing conditions.

Non-GAAP Adjusted Earnings per Share:

In connection with the release of financial results the Company reported the non-GAAP financial metric of Adjusted (Loss) Earnings per Share4 (“Adjusted EPS”) as follows:

For the three months ended September 30, 2024, compared to September 30, 2023:

Adjusted Net Income1 was $5.5 million compared to $5.3 million
Basic and Diluted Adjusted EPS was $0.31 and $0.30, compared to $0.36 and $0.34, respectively

For the nine months ended September 30, 2024, compared to September 30, 2023:

Adjusted Net Income1 was $8.2 million compared to $11.2 million
Basic and Diluted Adjusted EPS was $0.49 and $0.48, compared to $0.79 and $0.73, respectively

Updating FY 2024 Guidance and Introducing 2025 Outlook

The Company is raising its full year 2024 guidance for net service billing to be in the range of $376 to $386 million and reaffirming its guidance for Adjusted EBITDA to be in the range of $58 to $63 million. The Company is introducing its full year 2025 outlook for net service billing to be in the range of $422 to $437 million and for Adjusted EBITDA to be in the range of $68 to $75 million. The current outlook for 2024 and 2025 is based on completed and definitively contracted 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.

Q3 2024 Earnings Webcast

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

Date:

November 7, 2024

Time:

9:00 a.m. Eastern Time

Hosts:

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

Where:

https://investors.bowman.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 2,250 employees and more than 95 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.

1 Non-GAAP financial metric the Company believes offers valuable perspective on results of operations (see non-GAAP tables below for reconciliations).

2 For the three months, trailing four quarters organic growth as of September 30, 2024, and September 30, 2023, respectively. For the nine months, trailing three quarters organic growth as of September 30, 2024, and September 30, 2023, respectively. In both cases, excludes revenue from acquisitions completed after September 30, 2023.

3 Pursuant to the Company’s $25 million repurchase authorization.

4 Basic Adjusted EPS and Diluted Adjusted EPS are all non-GAAP financial metrics the Company believes offer valuable perspectives on results of operations (see non-GAAP tables below for reconciliations). Adjusted EPS (Basic and Diluted) include addbacks for 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 expenses. A reconciliation of non-GAAP Adjusted EPS to GAAP EPS, both basic and diluted, is included with this press release for reference.

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.

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, 2024

December 31, 2023

(Unaudited)

ASSETS

Current Assets

Cash and equivalents

11,660

20,687

Accounts receivable, net

105,406

87,565

Contract assets

43,838

33,520

Notes receivable - officers, employees, affiliates, current portion

1,146

1,199

Prepaid and other current assets

10,869

11,806

Total current assets

172,919

154,777

Non-Current Assets

Property and equipment, net

43,983

27,601

Operating lease, right-of-use assets

41,271

40,743

Goodwill

134,084

96,393

Notes receivable

903

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

1,110

1,119

Other intangible assets, net

59,524

46,294

Deferred tax asset, net

41,682

33,780

Other assets

1,481

1,175

Total Assets

496,957

402,785

LIABILITIES AND EQUITY

Current Liabilities

Revolving credit facility

32,332

45,290

Accounts payable and accrued liabilities

43,983

44,394

Contract liabilities

8,905

7,481

Notes payable, current portion

15,134

13,989

Operating lease obligation, less current portion

10,635

9,016

Finance lease obligation, current portion

9,817

6,586

Total current liabilities

120,806

126,756

Non-Current Liabilities

Other non-current obligations

51,971

42,288

Notes payable, less current portion

20,251

13,738

Operating lease obligation, less current portion

36,681

37,660

Finance lease obligation, less current portion

18,829

14,408

Pension and post-retirement obligation, less current portion

5,213

4,654

Total liabilities

253,751

239,504

Shareholders' Equity

Preferred Stock, $0.01 par value; 5,000,000 shares authorized, no shares issued and outstanding as of September 30, 2024 and December 31, 2023

Common stock, $0.01 par value; 30,000,000 shares authorized as of September 30, 2024 and December 31, 2023; 21,242,813 shares issued and 17,738,740 outstanding, and 17,694,495 shares issued and 15,094,278 outstanding as of September 30, 2024 and December 31, 2023, respectively

212

177

Additional paid-in-capital

323,255

215,420

Accumulated other comprehensive income

559

590

Treasury stock, at cost; 3,504,073 and 2,600,217, respectively

(51,489

)

(26,410

)

Stock subscription notes receivable

(42

)

(76

)

Accumulated deficit

(29,289

)

(26,420

)

Total shareholders' equity

243,206

163,281

TOTAL LIABILITIES AND EQUITY

496,957

402,785

BOWMAN CONSULTING GROUP LTD.

CONDENSED CONSOLIDATED INCOME STATEMENTS

(Amounts in thousands except per share data)

(Unaudited)

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2024

2023

2024

2023

Gross Contract Revenue

113,932

94,434

313,341

253,290

Contract costs: (exclusive of depreciation and amortization below)

Direct payroll costs

41,713

33,383

118,471

94,287

Sub-consultants and expenses

12,569

12,310

32,308

29,811

Total contract costs

54,282

45,693

150,779

124,098

Operating Expenses:

Selling, general and administrative

51,903

41,735

145,795

113,717

Depreciation and amortization

7,395

4,500

20,572

12,785

(Gain) on sale

(81

)

(110

)

(393

)

(347

)

Total operating expenses

59,217

46,125

165,974

126,155

Income (loss) from operations

433

2,616

(3,412

)

3,037

Other expense

1,572

1,495

6,000

3,852

(Loss) income before tax benefit

(1,139

)

1,121

(9,412

)

(815

)

Income tax (benefit)

(1,910

)

(62

)

(6,543

)

(1,901

)

Net income (loss)

771

1,183

(2,869

)

1,086

Earnings allocated to non-vested shares

146

–

140

Net income (loss) attributable to common shareholders

718

1,037

(2,869

)

946

Earnings (loss) per share

Basic

0.04

0.08

(0.18

)

0.08

Diluted

0.04

0.08

(0.18

)

0.07

Weighted average shares outstanding:

Basic

16,537,472

12,814,971

15,559,279

12,304,751

Diluted

16,835,337

13,793,120

15,559,279

13,437,841

BOWMAN CONSULTING GROUP LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands except per share data)

(Unaudited)

For the Nine Months Ended September 30,

2024

2023

Cash Flows from Operating Activities:

Net (loss) income

(2,869

)

1,086

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

Depreciation and amortization - property, plant and equipment

9,722

7,172

Amortization of intangible assets

10,850

5,613

Gain on sale of assets

(393

)

(347

)

Credit losses

1,043

630

Stock based compensation

20,272

18,280

Accretion of discounts on notes payable

486

459

Deferred taxes

(18,351

)

(11,134

)

Changes in operating assets and liabilities

Accounts receivable

(10,830

)

(14,581

)

Contract assets

(5,229

)

(8,118

)

Prepaid expenses and other assets

2,909

(4,370

)

Accounts payable and accrued expenses

6,438

19,752

Contract liabilities

(1,666

)

(2,171

)

Net cash provided by operating activities

12,382

12,271

Cash Flows from Investing Activities:

Purchases of property and equipment

(819

)

(2,081

)

Fixed assets converted to lease financing

Proceeds from sale of assets and disposal of leases

399

347

Payments received under loans to shareholders

115

Acquisitions of businesses, net of cash acquired

(23,327

)

(15,442

)

Collections under stock subscription notes receivable

Net cash used in investing activities

(23,636

)

(16,999

)

Cash Flows from Financing Activities:

Proceeds from common stock offering, net of underwriting discounts and commissions and other offering costs

47,151

–

(Repayments) Borrowings under revolving credit facility

(12,958

)

22,379

Repayments under fixed line of credit

(345

)

(381

)

Proceeds from notes payable

6,209

–

Repayment under notes payable

(10,951

)

(8,715

)

Proceeds from finance leases

4,567

–

Payments on finance leases

(6,462

)

(4,989

)

Payment of contingent consideration from acquisitions

(1,357

)

–

Payments for purchase of treasury stock

(11,130

)

(3,594

)

Repurchases of common stock

(13,950

)

–

Proceeds from issuance of common stock

1,453

1,177

Net cash provided by financing activities

2,227

5,877

Net (decrease) increase in cash and cash equivalents

(9,027

)

1,149

Cash and cash equivalents, beginning of period

20,687

13,282

Cash and cash equivalents, end of period

11,660

14,431

Supplemental disclosures of cash flow information:

Cash paid for interest

5,073

2,815

Cash paid for income taxes

7,792

900

Non-cash investing and financing activities

Property and equipment acquired under finance lease

(9,558

)

(6,724

)

Note payable converted to common shares

(3,368

)

(672

)

Issuance of notes payable for acquisitions

(15,291

)

(6,277

)

Issuance of contingent considerations

(1,722

)

(8,599

)

Settlement of contingent consideration

1,202

–

BOWMAN CONSULTING GROUP LTD.

RECONCILIATION OF EPS TO ADJUSTED EPS

(Amounts in thousands except per share data)

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2024

2023

2024

2023

Net income (loss) (GAAP)

771

1,183

(2,869

)

1,086

+ tax (benefit) (GAAP)

(1,910

)

(62

)

(6,543

)

(1,901

)

(Loss) income before tax expense (GAAP)

(1,139

)

1,121

(9,412

)

(815

)

+ acquisition related expenses

1,064

555

4,349

2,177

+ amortization of intangibles

3,696

1,948

10,850

5,613

+ non-cash stock comp related to pre-IPO

796

1,744

3,473

5,207

+ other non-core expenses

1,954

560

2,767

674

Adjusted income before tax expense

6,371

5,928

12,027

12,856

Adjusted income tax expense

858

620

3,791

1,665

Adjusted net income

5,513

5,308

8,236

11,191

Adjusted earnings allocated to non-vested shares

381

655

650

1,438

Adjusted net income attributable to common shareholders

5,132

4,653

7,586

9,753

Earnings (loss) per share (GAAP)

Basic

0.04

0.08

(0.18

)

0.08

Diluted

0.04

0.08

(0.18

)

0.07

Adjusted earnings per share (Non-GAAP)

Basic

0.31

0.36

0.49

0.79

Diluted

0.30

0.34

0.48

0.73

Weighted average shares outstanding

Basic

16,537,472

12,814,971

15,559,279

12,304,751

Diluted

16,835,337

13,793,120

15,904,025

13,437,841

Basic Adjusted Earnings (Loss) Per Share Summary - Non-GAAP

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2024

2023

2024

2023

Earnings (loss) per share (GAAP)

0.04

0.08

(0.18

)

0.08

Pre-tax basic per share adjustments

0.35

0.38

0.95

0.97

Adjusted earnings per share before tax expense

0.39

0.46

0.77

1.05

Tax expense per share adjustment

0.05

0.24

0.14

Adjusted earnings per share - adjusted net income

0.34

0.41

0.53

0.91

Adjusted earnings per share allocated to non-vested shares

0.03

0.05

0.04

0.12

Adjusted earnings per share attributable to common shareholders

0.31

0.36

0.49

0.79

Diluted Adjusted Earnings (Loss) Per Share Summary - Non-GAAP

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2024

2023

2024

2023

Earnings (loss) per share (GAAP)

0.04

0.08

(0.18

)

0.07

Pre-tax diluted per share adjustments

0.34

0.35

0.94

0.89

Adjusted earnings per share before tax expense

0.38

0.43

0.76

0.96

Tax expense per share adjustment

0.05

0.04

0.24

0.12

Adjusted earnings per share - adjusted net income

0.33

0.39

0.52

0.84

Adjusted earnings per share allocated to non-vested shares

0.03

0.05

0.04

0.11

Adjusted earnings per share attributable to common shareholders

0.30

0.34

0.48

0.73

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 September 30,

For the Nine Months Ended September 30,

2024

2023

2024

2023

Gross contract revenue

113,932

94,434

313,341

253,290

Contract costs (exclusive of depreciation and amortization)

54,282

45,693

150,779

124,098

Operating expense

59,217

46,125

165,974

126,155

Income (loss) from operations

433

2,616

(3,412

)

3,037

Other expense

1,572

1,495

6,000

3,852

Income tax (benefit)

(1,910

)

(62

)

(6,543

)

(1,901

)

Net income (loss)

771

1,183

(2,869

)

1,086

Net margin

0.7

1.3

(0.9

0.4

Other financial information 1

Net service billing

101,363

82,124

281,033

223,479

Adjusted EBITDA

16,970

15,057

42,511

35,783

Adjusted EBITDA margin, net

16.7

18.3

15.1

16.0

Gross Contract Revenue to Net Service Billing Reconciliation

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2024

2023

2024

2023

Gross contract revenue

113,932

94,434

313,341

253,290

Less: sub-consultants and other direct expenses

12,569

12,310

32,308

29,811

Net service billing

101,363

82,124

281,033

223,479

Adjusted EBITDA Reconciliation

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2024

2023

2024

2023

Net Service Billing

101,363

82,124

281,033

223,479

Net income (loss)

771

1,183

(2,869

)

1,086

+ interest expense

1,938

1,538

5,844

3,545

+ depreciation & amortization

7,395

4,500

20,572

12,785

+ tax (benefit)

(1,910

)

(62

)

(6,543

)

(1,901

)

EBITDA

8,194

7,159

17,004

15,515

+ non-cash stock compensation

6,448

7,158

20,386

18,480

+ transaction related expenses

–

186

+ settlements and other non-core expenses

1,954

560

2,767

674

+ acquisition expenses

374

117

2,354

928

Adjusted EBITDA

16,970

15,057

42,511

35,783

Adjusted EBITDA margin, net

16.7

18.3

15.1

16.0

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

2024

2023

Change

Building Infrastructure3

56,174

49.3

51,909

55.0

4,265

8.2

Transportation

21,851

19.2

19,769

20.9

2,082

10.5

Power and Utilities3

20,041

17.6

18,586

19.7

1,455

7.8

Other Emerging Markets1

15,866

13.9

4,170

4.4

11,696

280.5

Total

113,932

100.0

94,434

100.0

19,498

20.6

Acquired2

23,332

20.5

15,431

16.3

7,901

51.2

(dollars in thousands)

For the Nine Months Ended September 30,

Consolidated Gross Revenue

2024

2023

Change

Building Infrastructure3

165,709

52.9

144,862

57.2

20,847

14.4

Transportation

60,145

19.2

51,658

20.4

8,487

16.4

Power and Utilities3

56,229

17.9

47,481

18.7

8,748

18.4

Other Emerging Markets1

31,258

10.0

9,289

3.7

21,969

236.5

Total

313,341

100.0

253,290

100.0

60,051

23.7

Acquired2

49,767

15.9

27,050

10.7

22,717

84.0

1 Represents environmental, mining, water resources, imaging and mapping, and other.

2 Acquired revenue in prior periods is as previously reported; four quarters post-closing, acquired revenue is reclassified as organic for the purpose of calculating organic growth rates.

3 Includes certain reclassifications of revenue between categories from prior periods for consistency of presentation.

BOWMAN CONSULTING GROUP LTD.

GROSS BACKLOG BY CATEGORY AT SEPTEMBER 30, 2024

(Unaudited)

Category

Percentage

Building Infrastructure

Transportation

Power and Utilities

Emerging Markets

TOTAL

100