UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2021March 31, 2022
OR
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number: 001-40371
BOWMAN CONSULTING GROUP LTD.
(Exact Name of Registrant as Specified in its Charter)
Delaware | 54-1762351 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer |
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
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
Common Stock, $0.01 par value |
| BWMN |
| The Nasdaq Global Market |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐☒ No ☒☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
| ☐ |
| Accelerated filer |
| ☐ |
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Non-accelerated filer |
| ☒ |
| Smaller reporting company |
| ☒ |
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Emerging growth company |
| ☒ |
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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. ☒☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of AugustMay 12, 2021,2022, the registrant had 11,132,96013,219,049 shares of common stock outstanding.
Table of Contents
|
| Page |
PART I. | 1 | |
Item 1. | 1 | |
| Condensed Consolidated Balance Sheets as of | 1 |
| 2 | |
| 3 | |
|
| |
|
| |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 20 |
Item 3. |
| |
Item 4. |
| |
PART II. |
| |
Item 1. |
| |
Item 1A. |
| |
Item 2. |
| |
Item 3. |
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Item 4. |
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Item 5. |
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Item 6. |
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| |
36 |
i
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
BOWMAN CONSULTING GROUP LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except per share data)
|
|
|
|
|
|
|
| ||||||||
| June 30, 2021 |
|
| December 31, 2020 |
|
| March 31, 2022 |
|
| December 31, 2021 |
| ||||
| (unaudited) |
|
|
|
|
|
| (Unaudited) |
|
|
|
|
| ||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and equivalents | $ | 38,545 |
|
| $ | 386 |
|
| $ | 34,938 |
|
| $ | 20,619 |
|
Accounts Receivable, net |
| 33,323 |
|
|
| 24,183 |
| ||||||||
Accounts receivable, net |
|
| 45,372 |
|
|
| 38,491 |
| |||||||
Contract assets |
| 7,538 |
|
|
| 7,080 |
|
|
| 10,396 |
|
|
| 9,189 |
|
Notes receivable - officers, employees, affiliates, current portion |
| 1,117 |
|
|
| 1,182 |
|
|
| 1,207 |
|
|
| 1,260 |
|
Prepaid and other current assets |
| 3,406 |
|
|
| 2,271 |
|
|
| 5,440 |
|
|
| 4,850 |
|
Total current assets |
| 83,929 |
|
|
| 35,102 |
|
|
| 97,353 |
|
|
| 74,409 |
|
Non-Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
| 16,843 |
|
|
| 15,357 |
|
|
| 20,745 |
|
|
| 20,202 |
|
Goodwill |
| 11,723 |
|
|
| 9,179 |
|
|
| 29,148 |
|
|
| 28,471 |
|
Notes receivable |
| 903 |
|
|
| 903 |
|
|
| 903 |
|
|
| 903 |
|
Notes receivable - officers, employees, affiliates, less current portion |
| 1,281 |
|
|
| 1,297 |
|
|
| 1,200 |
|
|
| 1,218 |
|
Other intangible assets, net |
| 1,865 |
|
|
| 1,131 |
|
|
| 11,819 |
|
|
| 12,286 |
|
Other assets |
| 736 |
|
|
| 669 |
|
|
| 721 |
|
|
| 681 |
|
Total Assets | $ | 117,280 |
|
| $ | 63,638 |
|
| $ | 161,889 |
|
| $ | 138,170 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank line of credit |
| - |
|
|
| 3,481 |
| ||||||||
Accounts payable and accrued liabilities, current portion |
| 18,140 |
|
|
| 12,203 |
|
|
| 21,026 |
|
|
| 17,921 |
|
Contract liabilities |
| 1,914 |
|
|
| 1,943 |
|
|
| 5,551 |
|
|
| 4,623 |
|
Notes payable, current portion |
| 2,093 |
|
|
| 1,592 |
|
|
| 4,572 |
|
|
| 4,450 |
|
Deferred rent, current portion |
| 680 |
|
|
| 619 |
|
|
| 721 |
|
|
| 724 |
|
Capital lease obligation, current portion |
| 4,089 |
|
|
| 3,495 |
|
|
| 5,491 |
|
|
| 5,136 |
|
Total current liabilities |
| 26,916 |
|
|
| 23,333 |
|
|
| 37,361 |
|
|
| 32,854 |
|
Non-Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-current obligations |
| 1,243 |
|
|
| 1,244 |
| ||||||||
Notes payable, less current portion |
| 3,717 |
|
|
| 2,829 |
|
|
| 7,399 |
|
|
| 8,407 |
|
Deferred rent, less current portion |
| 4,226 |
|
|
| 4,278 |
|
|
| 4,063 |
|
|
| 4,179 |
|
Capital lease obligation, less current portion |
| 7,904 |
|
|
| 7,503 |
|
|
| 10,705 |
|
|
| 10,020 |
|
Deferred tax liability, net |
| 5,133 |
|
|
| 6,472 |
|
|
| 4,290 |
|
|
| 4,290 |
|
Common shares subject to repurchase |
| 7 |
|
|
| 842 |
|
|
| - |
|
|
| 7 |
|
Total liabilities | $ | 49,146 |
|
| $ | 46,501 |
|
| $ | 63,818 |
|
| $ | 59,757 |
|
|
|
|
|
|
|
|
|
| |||||||
Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock, $0.01 par value; 5,000,000 shares authorized, 0 shares issued and outstanding |
| - |
|
|
| - |
|
|
| — |
|
|
| — |
|
Common stock, $0.01 par value; 30,000,000 shares authorized; 13,273,673 shares issued and 11,092,245 outstanding, and 7,840,244 shares issued and 5,744,594 outstanding, respectively |
| 133 |
|
|
| 2 |
| ||||||||
Common stock, $0.01 par value; 30,000,000 shares authorized; 14,809,363 shares issued and 12,562,009 outstanding, and 13,690,868 shares issued and 11,489,579 outstanding, respectively |
|
| 148 |
|
|
| 137 |
| |||||||
Additional paid-in-capital |
| 110,218 |
|
|
| 58,866 |
|
|
| 139,996 |
|
|
| 120,842 |
|
Treasury Stock, at cost; 2,181,428 and 2,095,650, respectively |
| (17,117 | ) |
|
| (16,022 | ) | ||||||||
Treasury stock, at cost; 2,247,354 and 2,201,289, respectively |
|
| (18,476 | ) |
|
| (17,488 | ) | |||||||
Stock subscription notes receivable |
| (542 | ) |
|
| (609 | ) |
|
| (253 | ) |
|
| (277 | ) |
Accumulated deficit |
| (24,558 | ) |
|
| (25,100 | ) |
|
| (23,344 | ) |
|
| (24,801 | ) |
Total shareholders' equity | $ | 68,134 |
|
| $ | 17,137 |
|
| $ | 98,071 |
|
| $ | 78,413 |
|
|
|
|
|
|
|
|
|
| |||||||
TOTAL LIABILITIES AND EQUITY | $ | 117,280 |
|
| $ | 63,638 |
|
| $ | 161,889 |
|
| $ | 138,170 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
BOWMAN CONSULTING GROUP LTD.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Amounts in thousands except per share data)
(Unaudited)
|
| For the Three Months Ended June 30, |
|
| For the Six Months Ended June 30, |
|
| For the Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
Gross Contract Revenue |
| $ | 36,524 |
|
| $ | 31,749 |
|
| $ | 68,326 |
|
| $ | 60,360 |
|
| $ | 52,461 |
|
| $ | 31,802 |
|
Contract costs: (exclusive of depreciation and amortization below) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct payroll costs |
|
| 14,123 |
|
|
| 12,059 |
|
|
| 27,345 |
|
|
| 23,694 |
|
|
| 20,659 |
|
|
| 13,222 |
|
Sub-consultants and expenses |
|
| 4,065 |
|
|
| 4,581 |
|
|
| 6,999 |
|
|
| 8,459 |
|
|
| 4,760 |
|
|
| 2,934 |
|
Total contract costs |
|
| 18,188 |
|
|
| 16,640 |
|
|
| 34,344 |
|
|
| 32,153 |
|
|
| 25,419 |
|
|
| 16,156 |
|
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
| 17,204 |
|
|
| 12,082 |
|
|
| 29,953 |
|
|
| 24,168 |
|
|
| 22,821 |
|
|
| 12,749 |
|
Depreciation and amortization |
|
| 1,480 |
|
|
| 320 |
|
|
| 2,908 |
|
|
| 640 |
|
|
| 2,389 |
|
|
| 1,428 |
|
(Gain) loss on sale |
|
| (27 | ) |
|
| - |
|
|
| (53 | ) |
|
| (15 | ) | ||||||||
(Gain) on sale |
|
| (6 | ) |
|
| (26 | ) | ||||||||||||||||
Total operating expenses |
|
| 18,657 |
|
|
| 12,402 |
|
|
| 32,808 |
|
|
| 24,793 |
|
|
| 25,204 |
|
|
| 14,151 |
|
Income (loss) from operations |
|
| (321 | ) |
|
| 2,707 |
|
|
| 1,174 |
|
|
| 3,414 |
| ||||||||
Income from operations |
|
| 1,838 |
|
|
| 1,495 |
| ||||||||||||||||
Other (income) expense |
|
| 187 |
|
|
| (67 | ) |
|
| 392 |
|
|
| (76 | ) |
|
| 498 |
|
|
| 205 |
|
Income (loss) before tax expense |
|
| (508 | ) |
|
| 2,774 |
|
|
| 782 |
|
|
| 3,490 |
| ||||||||
Income before tax expense |
|
| 1,340 |
|
|
| 1,290 |
| ||||||||||||||||
Income tax (benefit) expense |
|
| (69 | ) |
|
| 1,157 |
|
|
| 240 |
|
|
| 1,447 |
|
|
| (117 | ) |
|
| 309 |
|
Net income (loss) |
| $ | (439 | ) |
| $ | 1,617 |
|
| $ | 542 |
|
| $ | 2,043 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net income |
| $ | 1,457 |
|
| $ | 981 |
| ||||||||||||||||
Earnings allocated to non-vested shares |
|
| - |
|
|
| 100 |
|
|
| 93 |
|
|
| 96 |
|
|
| 254 |
|
|
| 124 |
|
Net income (loss) attributable to common shareholders |
| $ | (439 | ) |
| $ | 1,517 |
|
| $ | 449 |
|
| $ | 1,947 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Earnings (loss) per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net income attributable to common shareholders |
| $ | 1,203 |
|
| $ | 857 |
| ||||||||||||||||
Earnings per share |
|
|
|
|
|
|
|
| ||||||||||||||||
Basic |
| $ | (0.06 | ) |
| $ | 0.27 |
|
| $ | 0.07 |
|
| $ | 0.35 |
|
| $ | 0.12 |
|
| $ | 0.17 |
|
Diluted |
| $ | (0.06 | ) |
| $ | 0.27 |
|
| $ | 0.07 |
|
| $ | 0.35 |
|
| $ | 0.12 |
|
| $ | 0.17 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
| 6,973,055 |
|
|
| 5,555,697 |
|
|
| 6,029,054 |
|
|
| 5,570,013 |
|
|
| 9,926,395 |
|
|
| 5,083,470 |
|
Diluted |
|
| 6,973,055 |
|
|
| 5,591,118 |
|
|
| 6,029,054 |
|
|
| 5,605,434 |
|
|
| 10,043,794 |
|
|
| 5,096,597 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BOWMAN CONSULTING GROUP LTD.
CONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
For The Three Months Ended June 30, 2021 and 2020
(Amounts in thousands except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common Stock |
|
| Additional Paid-in |
|
| Treasury Stock |
|
| Stock Subscription Notes |
|
| Accumulated |
|
| Total Shareholders' Equity |
| ||||||||||||||
|
| Shares |
|
| Amount |
|
| Capital |
|
| Shares |
|
| Amount |
|
| Receivable |
|
| Deficit |
|
| (Deficit) |
| ||||||||
Balance at March 31, 2020 |
|
| 7,057,964 |
|
| $ | - |
|
| $ | - |
|
|
| (1,334,108 | ) |
| $ | (6,482 | ) |
| $ | - |
|
| $ | (11,031 | ) |
| $ | (17,513 | ) |
Issuance of new common shares |
|
| 20,267 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Purchase of treasury stock |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (27,052 | ) |
|
| (217 | ) |
|
| - |
|
|
| - |
|
|
| (217 | ) |
Issuance of common shares under stock compensation plan |
|
| 196,470 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Common shares subject to repurchase liability |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 207 |
|
|
| 207 |
|
Fair value adjustment to redeemable common stock |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (2,012 | ) |
|
| (2,012 | ) |
Net Income |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,617 |
|
|
| 1,617 |
|
Balance at June 30, 2020 |
|
| 7,274,701 |
|
| $ | - |
|
| $ | - |
|
|
| (1,361,160 | ) |
| $ | (6,699 | ) |
| $ | - |
|
| $ | (11,219 | ) |
| $ | (17,918 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2021 |
|
| 7,953,583 |
|
| $ | 2 |
|
| $ | 60,161 |
|
|
| (2,178,958 | ) |
| $ | (17,085 | ) |
| $ | (576 | ) |
| $ | (24,119 | ) |
| $ | 18,383 |
|
Issuance of new common shares upon initial public offering |
|
| 3,805,925 |
|
|
| 38 |
|
|
| 47,066 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 47,104 |
|
Issuance of new common shares |
|
| 37 |
|
|
| - |
|
|
| 9 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 9 |
|
Purchase of treasury stock |
|
| - |
|
|
| 21 |
|
|
| (21 | ) |
|
| (2,470 | ) |
|
| (32 | ) |
|
| - |
|
|
| - |
|
|
| (32 | ) |
Issuance of common shares under stock compensation plan |
|
| 1,514,128 |
|
|
| 21 |
|
|
| (21 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Stock based compensation |
|
| - |
|
|
| - |
|
|
| 1,682 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,682 |
|
Collections on stock subscription notes receivable |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 34 |
|
|
| - |
|
|
| 34 |
|
Conversion of common shares subject to repurchase liability to permanent equity |
|
| - |
|
|
| 51 |
|
|
| 1,342 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,393 |
|
Capital reduction related to acquisition |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Net Income |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (439 | ) |
|
| (439 | ) |
Balance at June 30, 2021 |
|
| 13,273,673 |
|
| $ | 133 |
|
| $ | 110,218 |
|
|
| (2,181,428 | ) |
| $ | (17,117 | ) |
| $ | (542 | ) |
| $ | (24,558 | ) |
| $ | 68,134 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BOWMAN CONSULTING GROUP LTD.
CONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
For The SixThree Months Ended June 30,March 31, 2022 and 2021 and 2020
(Amounts in thousands except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common Stock |
|
| Additional Paid-in |
|
| Treasury Stock |
|
| Stock Subscription Notes |
|
| Accumulated |
|
| Total Shareholders' Equity |
| ||||||||||||||
|
| Common Stock |
|
| Additional Paid-in |
|
| Treasury Stock |
|
| Stock Subscription Notes |
|
| Accumulated |
|
| Total Shareholders' Equity |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Shares |
|
| Amount |
|
| Receivable |
|
| Deficit |
|
| (Deficit) |
| ||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Capital |
|
| Shares |
|
| Amount |
|
| Receivable |
|
| Deficit |
|
| (Deficit) |
| ||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2020 |
|
| 7,052,064 |
|
| $ | - |
|
| $ | - |
|
|
| (1,248,352 | ) |
| $ | (5,925 | ) |
| $ | - |
|
| $ | (17,358 | ) |
| $ | (23,283 | ) | ||||||||||||||||||||||||||||||||
Issuance of new common shares |
|
| 20,267 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| ||||||||||||||||||||||||||||||||
Purchase of treasury stock |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (112,808 | ) |
|
| (774 | ) |
|
| - |
|
|
| - |
|
|
| (774 | ) | ||||||||||||||||||||||||||||||||
Issuance of new common shares under stock compensation plan |
|
| 202,370 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| ||||||||||||||||||||||||||||||||
Common shares subject to repurchase liability |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 658 |
|
|
| 658 |
| ||||||||||||||||||||||||||||||||
Fair value adjustment to redeemable common stock |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 3,438 |
|
|
| 3,438 |
| ||||||||||||||||||||||||||||||||
Net Income |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 2,043 |
|
|
| 2,043 |
| ||||||||||||||||||||||||||||||||
Balance at June 30, 2020 |
|
| 7,274,701 |
|
| $ | - |
|
| $ | - |
|
|
| (1,361,160 | ) |
| $ | (6,699 | ) |
| $ | - |
|
| $ | (11,219 | ) |
| $ | (17,918 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||
Balance at January 1, 2021 |
|
| 7,840,244 |
|
| $ | 2 |
|
| $ | 58,866 |
|
|
| (2,095,650 | ) |
| $ | (16,022 | ) |
| $ | (609 | ) |
| $ | (25,100 | ) |
| $ | 17,137 |
|
|
| 7,840,244 |
|
| $ | 2 |
|
| $ | 58,866 |
|
|
| (2,095,650 | ) |
| $ | (16,022 | ) |
| $ | (609 | ) |
| $ | (25,100 | ) |
| $ | 17,137 |
|
Issuance of new common shares upon initial public offering |
|
| 3,805,925 |
|
|
| 38 |
|
|
| 47,066 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 47,104 |
| ||||||||||||||||||||||||||||||||
Issuance of new common shares |
|
| 63,993 |
|
|
| 0 |
|
|
| 847 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 847 |
|
|
| 63,956 |
|
|
| - |
|
|
| 838 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 838 |
|
Purchase of treasury stock |
|
| - |
|
|
| 21 |
|
|
| (21 | ) |
|
| (85,778 | ) |
|
| (1,095 | ) |
|
| - |
|
|
| - |
|
|
| (1,095 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (83,308 | ) |
|
| (1,063 | ) |
|
| - |
|
|
| - |
|
|
| (1,063 | ) |
Issuance of new common shares under stock compensation plan |
|
| 1,563,511 |
|
|
| 21 |
|
|
| (21 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 49,383 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Stock based compensation |
|
| - |
|
|
| - |
|
|
| 2,727 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 2,727 |
|
|
|
|
|
|
|
|
|
|
| 1,046 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,046 |
|
Collections on stock subscription notes receivable |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 67 |
|
|
| - |
|
|
| 67 |
| ||||||||||||||||||||||||||||||||
Conversion of common shares subject to repurchase liability to permanent equity |
|
| - |
|
|
| 51 |
|
|
| 827 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 878 |
| ||||||||||||||||||||||||||||||||
Collection on stock subscription notes receivable |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 33 |
|
|
| - |
|
|
| 33 |
| ||||||||||||||||||||||||||||||||
Common shares subject to repurchase liability |
|
| - |
|
|
| - |
|
|
| (516 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (516 | ) | ||||||||||||||||||||||||||||||||
Capital reduction related to acquisition |
|
| - |
|
|
| - |
|
|
| (73 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (73 | ) |
|
| - |
|
|
| - |
|
|
| (73 | ) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (73 | ) |
Net Income |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 542 |
|
|
| 542 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 981 |
|
|
| 981 |
|
Balance at June 30, 2021 |
|
| 13,273,673 |
|
| $ | 133 |
|
| $ | 110,218 |
|
|
| (2,181,428 | ) |
| $ | (17,117 | ) |
| $ | (542 | ) |
| $ | (24,558 | ) |
| $ | 68,134 |
| ||||||||||||||||||||||||||||||||
Balance at March 31, 2021 |
|
| 7,953,583 |
|
| $ | 2 |
|
| $ | 60,161 |
|
|
| (2,178,958 | ) |
| $ | (17,085 | ) |
| $ | (576 | ) |
| $ | (24,119 | ) |
| $ | 18,383 |
| ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||
Balance at January 1, 2022 |
|
| 13,690,868 |
|
| $ | 137 |
|
| $ | 120,842 |
|
|
| (2,201,289 | ) |
| $ | (17,488 | ) |
| $ | (277 | ) |
| $ | (24,801 | ) |
| $ | 78,413 |
| ||||||||||||||||||||||||||||||||
Issuance of new common shares in common stock offering |
|
| 1,057,500 |
|
|
| 11 |
|
|
| 15,464 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 15,475 |
| ||||||||||||||||||||||||||||||||
Issuance of new common shares |
|
| 9,833 |
|
|
| - |
|
|
| 174 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 174 |
| ||||||||||||||||||||||||||||||||
Purchase of treasury stock |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (46,065 | ) |
|
| (988 | ) |
|
| - |
|
|
| - |
|
|
| (988 | ) | ||||||||||||||||||||||||||||||||
Issuance of new common shares under stock compensation plan |
|
| 30,957 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| ||||||||||||||||||||||||||||||||
Issuance of new common shares under employee stock purchase plan |
|
| 20,205 |
|
|
| - |
|
|
| 282 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 282 |
| ||||||||||||||||||||||||||||||||
Stock based compensation |
|
| - |
|
|
| - |
|
|
| 3,226 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 3,226 |
| ||||||||||||||||||||||||||||||||
Collections on stock subscription notes receivable |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 24 |
|
|
| - |
|
|
| 24 |
| ||||||||||||||||||||||||||||||||
Conversion of redeemable common stock to permanent equity |
|
| - |
|
|
| - |
|
|
| 8 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 8 |
| ||||||||||||||||||||||||||||||||
Net Income |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,457 |
|
|
| 1,457 |
| ||||||||||||||||||||||||||||||||
Balance at March 31, 2022 |
|
| 14,809,363 |
|
| $ | 148 |
|
| $ | 139,996 |
|
|
| (2,247,354 | ) |
| $ | (18,476 | ) |
| $ | (253 | ) |
| $ | (23,344 | ) |
| $ | 98,071 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BOWMAN CONSULTING GROUP LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
| For the Six Months Ended June 30, |
|
| For the Three Months Ended March 31, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
| $ | 542 |
|
| $ | 2,043 |
|
| $ | 1,457 |
|
| $ | 981 |
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization - property, plant and equipment |
|
| 2,771 |
|
|
| 501 |
|
|
| 1,922 |
|
|
| 1,360 |
|
Amortization of intangible assets |
|
| 137 |
|
|
| 139 |
|
|
| 468 |
|
|
| 68 |
|
Gain on sale of assets |
|
| (53 | ) |
|
| (15 | ) |
|
| (6 | ) |
|
| (26 | ) |
Bad debt |
|
| 251 |
|
|
| 276 |
|
|
| 152 |
|
|
| 92 |
|
Stock based compensation |
|
| 2,707 |
|
|
| 536 |
|
|
| 3,236 |
|
|
| 1,149 |
|
Deferred taxes |
|
| (1,340 | ) |
|
| 163 |
|
|
| - |
|
|
| 109 |
|
Deferred rent |
|
| 9 |
|
|
| 319 |
|
|
| (119 | ) |
|
| (95 | ) |
Changes in operating assets and liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Receivable |
|
| (9,391 | ) |
|
| 201 |
|
|
| (6,945 | ) |
|
| (3,608 | ) |
Contract Assets |
|
| (242 | ) |
|
| 5,113 |
|
|
| (721 | ) |
|
| (100 | ) |
Prepaid expenses |
|
| (1,116 | ) |
|
| 958 |
| ||||||||
Other Assets |
|
| (66 | ) |
|
| (51 | ) | ||||||||
Prepaid expenses and other assets |
|
| (630 | ) |
|
| (169 | ) | ||||||||
Accounts payable and accrued expenses |
|
| 5,764 |
|
|
| 2,567 |
|
|
| 2,960 |
|
|
| 698 |
|
Contract Liabilities |
|
| (445 | ) |
|
| (4,427 | ) |
|
| 640 |
|
|
| (414 | ) |
Net cash (used in) provided by operating activities |
|
| (472 | ) |
|
| 8,323 |
| ||||||||
Net cash provided by operating activities |
|
| 2,414 |
|
|
| 45 |
| ||||||||
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
| (757 | ) |
|
| (809 | ) |
|
| (198 | ) |
|
| (438 | ) |
Proceeds from sale of assets and disposal of leases |
|
| 53 |
|
|
| 15 |
| ||||||||
Fixed assets converted to lease financing |
|
| 278 |
|
|
| - |
| ||||||||
Proceeds from sale of assets |
|
| 6 |
|
|
| 26 |
| ||||||||
Amounts advanced under loans to shareholders |
|
| (374 | ) |
|
| (607 | ) |
|
| - |
|
|
| (364 | ) |
Payments received under loans to shareholders |
|
| 81 |
|
|
| 145 |
|
|
| 70 |
|
|
| 75 |
|
Amounts advanced under notes receivable |
|
| - |
|
|
| (277 | ) | ||||||||
Acquisitions of businesses, net of cash acquired |
|
| (640 | ) |
|
| - |
|
|
| (550 | ) |
|
| (640 | ) |
Collections under stock subscription notes receivable |
|
| 67 |
|
|
| 91 |
|
|
| 24 |
|
|
| 33 |
|
Net cash used in investing activities |
|
| (1,570 | ) |
|
| (1,442 | ) |
|
| (370 | ) |
|
| (1,308 | ) |
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from initial public offering, net of underwriting discounts and commissions and other offering costs |
|
| 47,104 |
|
|
| - |
| ||||||||
Proceeds from common stock offering, net of underwriting discounts and commissions and other offering costs |
|
| 15,475 |
|
|
| - |
| ||||||||
Net borrowings under revolving line of credit |
|
| (3,481 | ) |
|
| (7,231 | ) |
|
| - |
|
|
| 3,460 |
|
Repayments under fixed line of credit |
|
| (359 | ) |
|
| (178 | ) |
|
| (182 | ) |
|
| (179 | ) |
Borrowings under fixed line of credit |
|
| - |
|
|
| 1,985 |
| ||||||||
Repayment under notes payable |
|
| (454 | ) |
|
| (613 | ) |
|
| (905 | ) |
|
| (151 | ) |
Payments on capital leases |
|
| (2,052 | ) |
|
| (141 | ) |
|
| (1,414 | ) |
|
| (975 | ) |
Payment of contingent consideration from acquisitions |
|
| (2 | ) |
|
| (17 | ) |
|
| - |
|
|
| (1 | ) |
Payment of offering costs |
|
| - |
|
|
| (417 | ) | ||||||||
Payments for purchase of treasury stock |
|
| (582 | ) |
|
| - |
|
|
| (988 | ) |
|
| (559 | ) |
Proceeds from issuance of common stock |
|
| 27 |
|
|
| 28 |
|
|
| 289 |
|
|
| 18 |
|
Net cash provided by (used in) financing activities |
|
| 40,201 |
|
|
| (6,167 | ) | ||||||||
Net increase in cash and cash equivalents |
|
| 38,159 |
|
|
| 714 |
| ||||||||
Net cash provided by financing activities |
|
| 12,275 |
|
|
| 1,196 |
| ||||||||
Net increase (decrease) in cash and cash equivalents |
|
| 14,319 |
|
|
| (67 | ) | ||||||||
Cash and cash equivalents, beginning of period |
|
| 386 |
|
|
| 509 |
|
|
| 20,619 |
|
|
| 386 |
|
Cash and cash equivalents, end of period |
| $ | 38,545 |
|
| $ | 1,223 |
|
| $ | 34,938 |
|
| $ | 319 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BOWMAN CONSULTING GROUP LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSFLOWS
(Unaudited)
|
| For the Six Months Ended June 30, |
|
| For the Three Months Ended March 31, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest |
| $ | 435 |
|
| $ | 241 |
|
| $ | 344 |
|
| $ | 203 |
|
Cash paid for income taxes |
| $ | 480 |
|
| $ | 153 |
|
| $ | 279 |
|
|
| - |
|
Non-cash investing and financing activities |
|
|
|
|
|
|
|
| ||||||||
Non-cash investing and financing activities: |
|
|
|
|
|
|
|
| ||||||||
Property and equipment acquired under capital lease |
| $ | (3,048 | ) |
| $ | (365 | ) |
| $ | (2,456 | ) |
| $ | (1,330 | ) |
Stock redemption for exercise of stock option |
| $ | 139 |
|
|
| - |
|
|
| - |
|
| $ | 139 |
|
Issuance of common stock for a note receivable |
|
| - |
|
| $ | (101 | ) | ||||||||
Stock redemption for payment on note receivable |
|
| - |
|
| $ | 85 |
| ||||||||
Issuance of notes payable for redemption of stock |
|
| - |
|
| $ | (463 | ) | ||||||||
Issuance of notes payable for acquisitions |
| $ | (200 | ) |
|
| - |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
BOWMAN CONSULTING GROUP LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. | Nature of Business and Basis of Presentation |
Nature of Business
Bowman Consulting Group Ltd. and(along with its affiliates (“Bowman”consolidated subsidiaries, “Bowman” or “we” or the “Company”) incorporated in the Commonwealth of Virginia on June 5, 1995 and reincorporated in the State of Delaware on November 13, 2020. Bowman is a professional services firm delivering innovative solutions to the marketplace of customers who own, develop and maintain the built environment. Within that arena, we provide planning, design, engineering, geomatics, survey, construction management, environmental consulting and land procurement services to markets that encompass the buildings in which people live, work and learn in,in; as well as the systems that provide water, electricity and other vital services, and the roads, bridges, and transportation systems used to get from place to place. We provide services to customers through fixed-price and time-and-material based contracts containing multiple milestones and independently priced deliverables. Typically, contract awards are on a negotiated basis, ranging in value from a few thousand dollars to multiple millions of dollars and can have varying durations depending on the size, scope, and complexity of the project.
The Company’s workforce typically provides the full scope of engineering and other contract services. WithHowever, with respect to certain specialty services or other compliance requirements within a particular contract, however, we may engage third-party sub-consultants. The Company’s headquarters is located in Reston, VA and the Company has over 3040 offices throughout the United States.
Initial PublicCommon Stock Offering
On MayFebruary 11, 2021, we2022, the Company closed on our initial publican offering (“IPO”),of common stock in which weit issued and sold 3,690,000900,000 shares at an offering price of our common stock at $14.00$16.00 per share, resulting in net proceeds of $48.0$13.7 million after deducting underwriting discounts and commissions, but before expenses of the IPO.offering. In addition, Gary Bowman, our President, Chairman and Chief Executive Officer, sold 150,000 shares of common stock.
On June 4, 2021,February 28, 2022, the underwriters exercised their option to purchase an additional 115,925157,500 shares of the Company’s common stock at the publican offering price of $14.00$16.00 per share, resulting in additional gross proceeds of approximately $1.6$2.5 million. After giving effect to this partial exercise of the overallotment option, the total number of shares sold by Bowmanthe Company in its initial publicthis common stock offering increased to 3,805,9251,057,500 shares andwith total gross proceeds increased toof approximately $53.3$16.9 million. The exercise of the over-allotment option closed on June 8, 2021,March 2, 2022, at which time the Company received net proceeds of approximately $1.5$2.4 million after underwriting discounts and commissions.
Deferred offering costs consist primarily of accounting, legal and other fees related to our IPO.common stock offering. Prior to the IPO,offering, all deferred offering costs were capitalized within prepaid and other current assets in the consolidated balance sheet. After the IPO, $2.3 million of deferred offering costs were reclassified into shareholder’s equity as a reduction of the IPO proceeds. We capitalized $0.9$0.5 million of deferred offering costs within prepaid and other current assets in the consolidated balance sheet as of December 31, 2020.2021.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements and footnotes of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in shareholders’ equity and cash flows. The results of operations for the current period are not necessarily indicative of the results for the full year or the results for any future periods.
The unaudited condensed consolidated financial statements should be read in conjunction with the audited combinedconsolidated financial statements and related footnotes included in our final prospectus dated May 6, 2021, andthe Company’s Annual Report on Form 10-K for the fiscal year ended December 31,2021 (the Annual Report) filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended.on March 23, 2022.
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-ownedwholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
2. Significant Accounting Policies
The following is a summary of the significant accounting policies and principles used in the preparation of the condensed consolidated financial statements:
Emerging Growth Company
Section 102(b)(1) of the Jumpstart Our Business Startups Act (“JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act)Act of 1934 (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company that is either not an emerging growth company or, an emerging growth company that has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.
Revenue Recognition
Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contract with Customers (“ASC Topic 606”) provides a single comprehensive revenue recognition framework and supersedes almost all revenue recognition guidance including industry-specific revenue guidance. To determine the proper revenue recognition method under ASC Topic 606, the Company evaluates whether two or more contracts should be combined and accounted for as one single contract and if so, whether to account for the combined or single contract as more than one performance obligation. For most contracts, it isIn general, the Company has concluded that there is a single performance obligation because the promise to transfer individual goods or services is not separately identifiable from the commitment to the deliverable of the contract and, therefore, is not distinct.
The Company generally recognizes revenue over time as control transfers to a customer based upon the extent of progress towards satisfaction of the performance obligation. For services delivered under fixed price contracts, the Company uses the ratio of actual costs incurred to total estimated costs at completion (an input method) as a reasonable measure of progress towards the satisfaction of a performance in order to estimate the portion of revenue earned. A contract containing a mix of hourly and fixed fee assignments may be characterized as one lump sum contract for purposes of ASC Topic 606. As such, a contract must contain hourly billed components exclusively to qualify for the as-billed practical expedient in ASC Topic 606.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could vary from the estimates and assumptions that were used.
Concentration of Credit Risk and other Concentrations
The Company’s financial instruments that are exposed to concentrations of credit risk consist of cash and accounts receivable.
Cash balances at various times during the year may exceed the amount insured by the Federal Deposit Insurance Corporation. The Company’s cash deposits are held in institutions whose credit ratings are monitored by management, and the Company has not incurred any losses related to such deposits.
The Company is subject to a concentration of credit risk with respect to outstanding accounts receivable, however,receivable. However, the Company believes no such concentration existed during the sixthree months ended June 30, 2021,March 31, 2022, or the year ended December 31, 2020.2021. The Company’s customers are located throughout the United States. Although the Company generally grants credit without collateral, management believes that its contract acceptance, billing, and collection policies are adequate to minimize material credit risk. Also, for non-governmental customers, the Company can often place mechanics liens against the real property associated with the contract in the event of non-payment.
Fair Value Measurements
Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”) provides the framework for measuring and reporting financial assets and liabilities at fair value. ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
The codification establishes a three-level disclosure hierarchy to indicate the level of judgment used to estimate fair value measurements:
Level 1:Quoted prices in active markets for identical assets or liabilities as of the reporting date;
Level 2:Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs other than quoted prices (such as interest rate and yield curves);
Level 3:Uses inputs that are unobservable, supported by little or no market activity and reflect significant management judgment.
As of June 30, 2021March 31, 2022 and December 31, 2020:2021:
| • | The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to the relatively short duration of these instruments; |
| • | The carrying amounts of debt obligations approximate their fair values as the terms are comparable to terms currently offered by local financial institutions for arrangements with similar terms to industry peers with comparable credit characteristics. Accordingly, the debt obligations involve Level 2 fair value inputs; |
| • |
|
Income Taxes
The Company recognizes deferred income tax assets or liabilities for expected future tax consequences of events recognized in the consolidated financial statements or tax returns. Under this method, deferred income tax assets or liabilities are determined based upon the difference between the financial statement and income tax bases of assets and liabilities using enacted tax rates expected to apply when the differences settle or become realized. Valuation allowances are provided when it is more likely than not that a deferred tax asset is not realizable or recoverable in the future.
The Company recognizes the effect of a change in tax rates on deferred tax assets and liabilities in income in the period that includes the enactment date. The Company’s effective tax rate for the sixthree months ended June 30,March 31, 2022 and 2021 was (8.8%) and 202028.0%, respectively. The change was 30.70%due primarily to a windfall tax adjustment which results from the vesting of restricted stock awards at a value higher than the grant date fair value, an increase in R&D credits and 41.38%.projected limitations on the deductibility of executive compensation. The windfall tax adjustment for restricted stock awards is $0.4 million for the three months ended March 31, 2022. There was 0 windfall tax adjustments from restricted stock awards for the three months ended March 31, 2021. The R&D credit was $2.0 million as of March 31, 2022 and $1.2 million as of March 31, 2021. The projected limitation on the deductibility of executive compensation was $3.4 million for the three months ended March 31, 2022. There was 0 projected limitation on the deductibility of executive compensation for the three months ended March 31, 2021.
The Company assesses uncertain tax positions to determine whether the position will more likely than not be sustained upon examination by the Internal Revenue Service (IRS) or other taxing authorities. If the Company cannot reach a more-likely-than-not determination, no benefit is recorded. If the Company determines that the tax position is more likely than not to be sustained, the Company records the largest amount of benefit that is more likely than not to be realized when the tax position is settled. The Company recognizes interest and penalties, if any, related to uncertain tax positions in income tax expense.
The Company files income tax returns in the U.S. federal jurisdiction and certain states in which it operates. Based on the timing of the filing of certain tax returns, the Company’s federal income tax returns for tax years 20172018 and after remain subject to examination by the U.S. Internal Revenue Service. The statute of limitations on the Company’s state income tax returns generally conforms to the federal three-year statute of limitations.
Segments
The Company operates in 1 segment based upon the financial information used by its chief operating decision maker in evaluating the financial performance of its business and allocating resources. The single segment represents the Company’s core business of providing engineering and related professional services to its customers.
Recently Issued Accounting Guidance
Accounting guidance recently adopted
In October 2021, the FASB issued Accounting Standards Update 2021-08, Accounting for Contract Assets and Liabilities from Contracts with Customers, creating an exception to the recognition and measurement principles in ASC 805, Business Combinations. The amendments in this Update require that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers, rather than using fair value. The Company adopted the new standard on a prospective basis effective January 1, 2021. The impact of this ASU is reflected in the consolidated financial statements and was not material.
In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350), simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates Step 2 of the goodwill impairment test. Goodwill impairment will now be the amount by which the reporting unit’s carrying amount exceeds its fair value, limited to the carrying amount of the goodwill. The Company adopted the new standard effective January 1, 2022. The impact of this ASU is not material to its consolidated financial statements.
Accounting guidance not yet adopted
Leases. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842) (“ASU 2016-02”) to increase transparency and comparability of accounting for lease transactions by requiring lessees to recognize the right-of-use assets and lease liabilities on the balance sheet and to disclose qualitative and quantitative information about lease transactions and enable
users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The effective date of ASU 2016-02 for the Company is January 1, 2022, with early adoption permitted. This ASU is not required to be reflected in the consolidated financial statements or disclosures until the year ending December 31, 2022, and therefore is not reflected in the consolidated financial statements on this Quarterly Report on Form 10-Q. The Company is currently evaluating the impact this ASU may have on its consolidated financial statements and related disclosures.
Financial Instruments – Credit Losses. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) to replace the incurred loss impairment methodology under U.S. GAAP. This ASU introduces a new accounting model, the Current Expected Credit Losses model (CECL), which could result in earlier recognition of credit losses and additional disclosures related to credit risk. The CECL model will require the Company to use a forward-looking expected credit loss impairment methodology for the recognition of credit losses for financial instruments at the time the financial asset is originated or acquired, and require a loss be incurred before it is recognized. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The new standard will apply to accounts receivable, loans, and other financial instruments. This standard is effective for the Company beginning January 1, 2023. Adoption of ASU 2016-13 will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently evaluating the impact of this ASU on our consolidated financial statements.statements and related disclosures.
Goodwill. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350), simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates Step 2 of the goodwill impairment test. Goodwill impairment will now be the amount by which the reporting unit’s carrying amount exceeds its fair value, limited to the carrying amount of the goodwill. ASU 2017-04 is effective for us beginning January 1, 2022. The Company does not expect the impact of this ASU to bebelieve that any recently issued standards other than those noted above would have a material toeffect on its consolidated financial statements.
3. Earnings per Share
Basic earnings (loss) per share is calculated by dividing net income (loss) attributable to the Company available to common stockholders by the weighted average number of common shares outstanding for the three and six months ended June 30, 2021March 31, 2022 and 2020.2021. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were either exercised or converted into common stock or resulted in the issuance of common stock that would share in the earnings of the Company. The dilutive effect of options is reflected in diluted earnings per share by application of the treasury stock method. The dilutive effect of shares to be purchased under the Company’s Employee Stock Purchase Plan is reflected in diluted earnings per share by the weighted-average number of shares outstanding that would have been outstanding during the period. The Company uses the two-class method to determine earnings per share.
For calculating basic earnings per share, for the three and six months ended June 30, 2021,March 31, 2022, the weighted average number of shares outstanding exclude 1,719,138 and 1,209,1772,080,691 non-vested restricted shares and 32,067 and 43,74314,586 unexercised substantive options. The computation of diluted
earnings per share for the three and six months ended June 30, 2021March 31, 2022 did not assume the effect of restricted shares or substantive options because the effects were antidilutive.
For calculating basic earnings per share, for the three and six months ended June 30, 2020,March 31, 2021, the weighted average number of shares outstanding exclude 312,926 and 223,932691,038 non-vested restricted shares and 53,302 and 51,21949,177 substantive options. The computation of diluted earnings per share for the three and six months ended June 30, 2020March 31, 2021 did not assume the effect of restricted shares or substantive options because the effects were antidilutive.
The following table represents a reconciliation of the net income and weighted average shares outstanding for the calculation of basic and diluted earnings per share for the three and six months ended June 30,March 31, 2022 and 2021 and 2020 (in thousands, except share data):
|
| For the Three Months Ended June 30, |
|
| For the Six Months Ended June 30, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Numerator |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
| $ | (439 | ) |
| $ | 1,617 |
|
| $ | 542 |
|
| $ | 2,043 |
|
Earnings allocated to non-vested shares |
|
| - |
|
|
| 100 |
|
|
| 93 |
|
|
| 96 |
|
Subtotal |
| $ | (439 | ) |
| $ | 1,517 |
|
| $ | 449 |
|
| $ | 1,947 |
|
Denominator |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
| 6,973,055 |
|
|
| 5,555,697 |
|
|
| 6,029,054 |
|
|
| 5,570,013 |
|
Effect of dilutive nominal options |
|
| - |
|
|
| 4,366 |
|
|
| - |
|
|
| 4,366 |
|
Effect of dilutive contingently earned shares |
|
| - |
|
|
| 31,055 |
|
|
| - |
|
|
| 31,055 |
|
Dilutive average shares outstanding |
|
| 6,973,055 |
|
|
| 5,591,118 |
|
|
| 6,029,054 |
|
|
| 5,605,434 |
|
Basic earnings (loss) per share |
| $ | (0.06 | ) |
| $ | 0.27 |
|
| $ | 0.07 |
|
| $ | 0.35 |
|
Dilutive earnings (loss) per share |
| $ | (0.06 | ) |
| $ | 0.27 |
|
| $ | 0.07 |
|
| $ | 0.35 |
|
|
| For the Three Months Ended March 31, |
| |||||
|
| 2022 |
|
| 2021 |
| ||
Numerator |
|
|
|
|
|
|
|
|
Net income |
| $ | 1,457 |
|
| $ | 981 |
|
Earnings allocated to non-vested shares |
|
| 254 |
|
|
| 124 |
|
Subtotal |
| $ | 1,203 |
|
| $ | 857 |
|
Denominator |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
| 9,926,395 |
|
|
| 5,083,470 |
|
Effect of dilutive nominal options |
|
| - |
|
|
| - |
|
Effect of dilutive contingently earned shares |
|
| 117,399 |
|
|
| 13,127 |
|
Dilutive average shares outstanding |
|
| 10,043,794 |
|
|
| 5,096,597 |
|
Basic earnings per share |
| $ | 0.12 |
|
| $ | 0.17 |
|
Dilutive earnings per share |
| $ | 0.12 |
|
| $ | 0.17 |
|
4. Acquisitions
Business Combinations
KTA Group Inc. (KTA)Perry Engineering, LLC.
In the first quarter of 2021,2022, the Company signed a purchase agreement to acquire KTA Group Inc.Perry Engineering, LLC (“Perry”), with an effective date of January 1, 2021. KTAFebruary 2, 2022. Perry is a mechanical, electricalcivil engineering and plumbing (MEP) engineeringland surveying firm based in Herndon, VA.Tucson, AZ. The Company paid total consideration of $3.4$0.9 million, which was comprised of 53,1599,833 shares of common stock, at $12.80$17.01 per share, for a total of $0.7$0.2 million, plus $2.7$0.7 million in cash, promissory note and a promissory note.assumed liabilities. The promissory note ishas a four year note with a 3.25%5.00% interest rate with equal quarterly payments beginning on April 1, 2021,May 2, 2022 and ending January 1, 2025.February 2, 2024.
The acquisition of KTAPerry allows Bowman to add electricalfurther enhance its land architectural and civil engineering to the group of core competencies thereby allowing the Company to cross sell to,broaden its offerings and better serve its renewable energypublic and private sector customers. In addition, KTA’s mechanical engineers bring the experience and expertise necessary to deliver plans and designs for building ventilation, indoor air quality monitoring and medical-grade air filtration.
The following summarizes the preliminary calculations of the fair values of KTA Group’s assets acquired and liabilities assumed as of the acquisition date (in thousands):
Total Purchase Price | $ | 3,447 |
|
Purchase Price Allocation: |
|
|
|
Contract assets |
| 217 |
|
Property and equipment, net |
| 453 |
|
Intangible Assets |
| 871 |
|
Other assets |
| 18 |
|
Accounts payable and other current liabilities |
| (240 | ) |
Contract liabilities |
| (416 | ) |
Total identifiable assets | $ | 903 |
|
Goodwill |
| 2,544 |
|
Net assets acquired | $ | 3,447 |
|
The purchase price allocation consists primarily of Goodwill and is based upon preliminary information andthat is subject to change when additional information is obtained. Goodwill results from an assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. All of the goodwill recognized is expected to be deductible for tax purposes. The Company has not completed its final assessment of the fair values of KTA Group’sPerry’s assets acquired and liabilities assumed. The final purchase allocation could result in adjustments to certain assets and liabilities, including the residual amount allocated to goodwill.
Identified intangible assets are comprised of customer relationships, contract rights and favorable leaseholds for a total amount of $0.9 million, to be amortized over an estimated useful life of 20 years, 3 years, and 9 years, respectively.
5. Disaggregation of Revenue and Contract Balances
The Company generally recognizes revenue over time as control transfers to a customer based upon the extent of progress towards satisfaction of the performance obligation. For services delivered under fixed price contracts, the Company uses the ratio of actual costs incurred to total estimated costs at completion (an input method) as a reasonable measure of progress towards the satisfaction of a performancedisaggregates revenues by contract type, see Revenue Recognition in order to estimate the portion of revenue earned. A contract containing a mix of hourly and fixed fee assignments may be characterized as one lump sum contractNote 2 for purposes of ASC Topic 606. As such, a contract must contain hourly billed components exclusively to qualify for the as-billed practical expedient in ASC Topic 606.further details. For the three and six months ended June 30,March 31, 2022 and 2021, the Company derived 91.6%94.5% and 94.9%91.6% of its revenue from contracts classified as lump sum, and 8.4%5.4% and 5.1%8.4% of its revenue from exclusively time and material contracts, respectively. The Company had approximately $100.1$152.5 million in remaining performance obligations as of June 30, 2021,March 31, 2022 of which it expects to recognize approximately 77.1%99.0% within the next twelve months and the remaining 22.9%1.0% thereafter.
The Company recognized $0.9$1.4 millionof revenue for the three months ended March 31, 2022, which was included in the contract liabilities balance as of December 31, 2021, and $1.2 $1.3million of revenue for the three and six months ended June 30,March 31, 2021 which was included in the contract liabilities balance as of December 31, 2020, and $2.9 million and $4.1 million of revenue for the three and six months ended June 30, 2020, which was included in the contract liabilities balance as of December 31, 2019.2020.
6. Contracts in Progress
The following table reflects the calculation of the net balance of contract assets and contract liabilities. Costs and estimated earnings on contracts in progress consist of the following (in thousands):
|
|
|
|
|
|
|
|
| ||||||||
|
| June 30, 2021 |
|
| December 31, 2020 |
|
| March 31, 2022 |
|
| December 31, 2021 |
| ||||
Costs incurred on uncompleted contracts |
| $ | 137,778 |
|
| $ | 113,856 |
|
| $ | 187,657 |
|
| $ | 168,110 |
|
Estimated contract earnings in excess of costs |
|
| 185,396 |
|
|
| 151,423 |
|
|
| 255,014 |
|
|
| 229,949 |
|
Estimated contract earnings to date |
|
| 323,174 |
|
|
| 265,279 |
|
|
| 442,671 |
|
|
| 398,059 |
|
Less: billed to date |
|
| (317,550 | ) |
|
| (260,142 | ) |
|
| (437,826 | ) |
|
| (393,493 | ) |
Net contract assets |
| $ | 5,624 |
|
| $ | 5,137 |
|
| $ | 4,845 |
|
| $ | 4,566 |
|
7. Notes Receivable
The Company has unsecured notes receivable from related parties, certain non-executive officers of the Company and an unrelated third party. This balance is included as a part of other assets on the accompanying combined balance sheets. The following is a summary of these notes receivable (in thousands):
|
| June 30, 2021 |
|
| December 31, 2020 |
|
| March 31, 2022 |
|
| December 31, 2021 |
| ||||
Officers, employees and affiliated entities - Interest accrues annually at rates ranging from 3.25% - 5.5%. The notes receivable mature through December 2021. |
| $ | 2,398 |
|
| $ | 2,479 |
| ||||||||
Officers, employees and affiliated entities - Interest accrues annually at rates ranging from 0.0% - 5.5%. The notes receivable mature through November 2024. |
| $ | 2,407 |
|
| $ | 2,478 |
| ||||||||
Unrelated third party - Currently 0 interest is being accrued on this note. The note receivable matures in December 2023. |
|
| 903 |
|
|
| 903 |
|
|
| 903 |
|
|
| 903 |
|
Total: |
|
| 3,301 |
|
|
| 3,382 |
|
|
| 3,310 |
|
|
| 3,381 |
|
Less: current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officers, employees and affiliates |
|
| (1,117 | ) |
|
| (1,182 | ) |
|
| (1,207 | ) |
|
| (1,260 | ) |
Unrelated third party |
|
| - |
|
|
| - |
| ||||||||
Noncurrent portion |
| $ | 2,184 |
|
| $ | 2,200 |
|
| $ | 2,103 |
|
| $ | 2,121 |
|
Each borrower may prepay all or part of the outstanding balance at any time prior to the date of maturity. During the sixthree months ended June 30, 2021,March 31, 2022, interest accrued on the notes receivable at the stipulated rates between 3.25%0.0% and 5.50%.
8. Property and Equipment, Net
Property and equipment for fixed assets are as follows (in thousands):
|
| June 30, 2021 |
|
| December 31, 2020 |
|
| March 31, 2022 |
|
| December 31, 2021 |
| ||||
Computer equipment |
| $ | 1,274 |
|
| $ | 1,276 |
|
| $ | 1,383 |
|
| $ | 1,279 |
|
Survey equipment |
|
| 4,444 |
|
|
| 4,444 |
|
|
| 4,672 |
|
|
| 4,625 |
|
Vehicles |
|
| 464 |
|
|
| 463 |
|
|
| 844 |
|
|
| 763 |
|
Furniture and fixtures |
|
| 1,658 |
|
|
| 1,638 |
|
|
| 1,684 |
|
|
| 1,675 |
|
Leasehold improvements |
|
| 6,520 |
|
|
| 5,887 |
|
|
| 6,923 |
|
|
| 6,886 |
|
Software |
|
| 283 |
|
|
| 283 |
|
|
| 336 |
|
|
| 332 |
|
Fixed assets pending lease financing 1 |
|
| 673 |
|
|
| 146 |
|
|
| 241 |
|
|
| 519 |
|
Total: |
|
| 15,316 |
|
|
| 14,137 |
|
|
| 16,083 |
|
|
| 16,079 |
|
Less: accumulated depreciation |
|
| (10,272 | ) |
|
| (9,912 | ) |
|
| (10,963 | ) |
|
| (10,669 | ) |
Property and Equipment, net of capital leased assets |
| $ | 5,044 |
|
| $ | 4,225 |
|
| $ | 5,120 |
|
| $ | 5,410 |
|
|
|
|
|
|
|
|
|
| ||||||||
1 assets acquired which will be re-financed under the Company's capital lease facilities |
|
|
|
|
|
|
|
|
1 assets acquired which will be re-financed under the Company's capital lease facilities
Depreciation expense for fixed assets for the three and six months ended June 30,March 31, 2022 and 2021 was $0.3 million and $0.2 million, and $0.4 million, respectively. Depreciation expense for fixed assets for the three and six months ended June 30, 2020 was $0.2 million and $0.4 million, respectively.
Property and equipment for capital leased assets are as follows (in thousands):
|
| June 30, 2021 |
|
| December 31, 2020 |
|
| March 31, 2022 |
|
| December 31, 2021 |
| ||||
Equipment |
| $ | 11,411 |
|
| $ | 8,590 |
|
| $ | 17,367 |
|
| $ | 15,391 |
|
Vehicles |
|
| 3,959 |
|
|
| 3,825 |
|
|
| 5,916 |
|
|
| 5,542 |
|
Total: |
|
| 15,370 |
|
|
| 12,415 |
|
|
| 23,283 |
|
|
| 20,933 |
|
Less: accumulated amortization on leased assets |
|
| (3,571 | ) |
|
| (1,283 | ) |
|
| (7,658 | ) |
|
| (6,141 | ) |
Capital Leased Assets, net |
| $ | 11,799 |
|
| $ | 11,132 |
|
| $ | 15,625 |
|
| $ | 14,792 |
|
Amortization expense for capital leased assets for the three and six months ended June 30,March 31, 2022 and 2021 was $1.2$1.6 million and $2.4 million, respectively. Amortization expense for capital leased assets for the three and six months ended June 30, 2020 was $0.1 million and $0.1$1.2 million, respectively.
9. Goodwill
The following is a summary of goodwill resulting from business acquisitions held by the Company at June 30, 2021 and DecemberMarch 31, 20202022 (in thousands):
|
| Goodwill |
| |
Balance as of December 31, 2020 |
| $ | 9,179 |
|
Acquisition |
|
| 2,544 |
|
Balance as of June 30, 2021 |
| $ | 11,723 |
|
|
| Goodwill |
| |
Balance as of December 31, 2021 |
| $ | 28,471 |
|
2022 Activity |
|
| 677 |
|
Balance as of March 31, 2022 |
| $ | 29,148 |
|
10. Intangible Assets
Total intangible assets consisted of the following at June 30, 2021March 31, 2022 and December 31, 20202021 (in thousands):
|
| June 30, 2021 |
|
| December 31, 2020 |
|
| March 31, 2022 |
|
| December 31, 2021 |
| ||||||||||||||||||||||||||||||||||||
|
| Gross Amount |
|
| Accumulated Amortization |
|
| Net Balance |
|
| Gross Amount |
|
| Accumulated Amortization |
|
| Net Balance |
|
| Gross Amount |
|
| Accumulated Amortization |
|
| Net Balance |
|
| Gross Amount |
|
| Accumulated Amortization |
|
| Net Balance |
| ||||||||||||
Customer relationships |
| $ | 1,479 |
|
| $ | (477 | ) |
| $ | 1,002 |
|
| $ | 809 |
|
| $ | (382 | ) |
| $ | 427 |
|
| $ | 10,018 |
|
| $ | (939 | ) |
| $ | 9,079 |
|
| $ | 10,018 |
|
| $ | (665 | ) |
| $ | 9,353 |
|
Contract rights |
|
| 191 |
|
|
| (160 | ) |
|
| 31 |
|
|
| 150 |
|
|
| (150 | ) |
|
| - |
|
|
| 2,333 |
|
|
| (412 | ) |
|
| 1,921 |
|
|
| 2,333 |
|
|
| (224 | ) |
|
| 2,109 |
|
Leasehold |
|
| 160 |
|
|
| (9 | ) |
|
| 151 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 160 |
|
|
| (22 | ) |
|
| 138 |
|
|
| 160 |
|
|
| (17 | ) |
|
| 143 |
|
Non-complete agreement |
|
| 137 |
|
|
| (137 | ) |
|
| - |
|
|
| 137 |
|
|
| (114 | ) |
|
| 23 |
| ||||||||||||||||||||||||
Non-compete agreement |
|
| 137 |
|
|
| (137 | ) |
|
| - |
|
|
| 137 |
|
|
| (137 | ) |
|
| - |
| ||||||||||||||||||||||||
Domain name |
|
| 281 |
|
|
| - |
|
|
| 281 |
|
|
| 281 |
|
|
| - |
|
|
| 281 |
|
|
| 281 |
|
|
| - |
|
|
| 281 |
|
|
| 281 |
|
|
| - |
|
|
| 281 |
|
Licensing rights |
|
| 400 |
|
|
| - |
|
|
| 400 |
|
|
| 400 |
|
|
| - |
|
|
| 400 |
|
|
| 400 |
|
|
| - |
|
|
| 400 |
|
|
| 400 |
|
|
| - |
|
|
| 400 |
|
Total |
| $ | 2,648 |
|
| $ | (783 | ) |
| $ | 1,865 |
|
| $ | 1,777 |
|
| $ | (646 | ) |
| $ | 1,131 |
|
| $ | 13,329 |
|
| $ | (1,510 | ) |
| $ | 11,819 |
|
| $ | 13,329 |
|
| $ | (1,043 | ) |
| $ | 12,286 |
|
The domain name and licensing rights acquired during the year ended December 31, 20202021 for a total of $0.7 million have indefinite useful lives.
The following table summarizes the weighted average useful lives of intangible assets by asset class used for straight-line expense purposes:
|
| June 30, 2021 |
|
| December 31, 2020 |
|
| March 31, 2022 |
|
| December 31, 2021 |
| ||||
Customer relationships |
|
| 11.8 |
|
|
| 5.0 |
|
|
| 10.32 |
|
|
| 10.32 |
|
Contract rights |
|
| 2.2 |
|
|
| 2.0 |
|
|
| 2.87 |
|
|
| 2.87 |
|
Leasehold |
|
| 9.2 |
|
|
| - |
|
|
| 9.17 |
|
|
| 9.17 |
|
Non-compete agreement |
|
| 3.0 |
|
|
| 3.0 |
|
|
| 3.00 |
|
|
| 3.00 |
|
Amortization expense for the three and six months ended June 30,March 31, 2022 and 2021 was $0.1$0.5 million and $0.1 million, respectively. Amortization expense for the three and six months ended June 30, 2020 was $0.1 million and $0.1 million, respectively.
Future amortization for the remainder of 20212022 and for the succeeding years is as follows (in thousands):
2021 |
|
|
| $ | 114 |
| ||||||
2022 |
|
|
|
| 227 |
|
|
|
|
| 1,403 |
|
2023 |
|
|
|
| 165 |
|
|
|
|
| 1,809 |
|
2024 |
|
|
|
| 51 |
|
|
|
|
| 1,567 |
|
2025 |
|
|
|
| 51 |
|
|
|
|
| 950 |
|
2026 |
|
|
|
| 908 |
| ||||||
Thereafter |
|
|
|
| 576 |
|
|
|
|
| 4,501 |
|
Total |
|
|
| $ | 1,184 |
|
|
|
| $ | 11,138 |
|
11. Bank Revolving Line of Credit and Fixed Credit Facilities
In 2017, theThe Company entered into ahas 1 revolving (the “Revolving Line”) and 3 non-revolving credit agreement (the Credit Agreement)facilities (“Fixed Line 1”, Fixed Line 2” and “Fixed Line 4”) with Bank of America (the Bank) which included a revolving line of credit (the Revolving Line)America. On March 31, 2022 and a non-revolving line of credit (the Fixed Line #1). The Revolving Line allowed for repayments and re-borrowings. The maximum advance was equal to the lesser of $12.4 million (the Credit Limit) or the Borrowing Base as defined in the Credit Agreement. The Borrowing Base is computed based upon a percentage of eligible receivables within each aging category under 120 days and is further refined for customer type. Receivables more than 120 days and those from related parties or affiliates are not considered to be eligible receivables for the Borrowing Base.
During the year ended December 31, 2019, the Credit Limit increased to $15.0 million. During the year ended December 31, 2019, a second non-revolving line of credit was established (Fixed Line #2). During the year ended December 31, 2020, the Company entered into an additional credit agreement with Bank of America (Facility #4). Both credit agreements contained certain financial covenants including fixed charge coverage ratio, debt to EBITDA and adjusted debt to EBITDA, all of which the Company complied with on June 30, 2021 and December 31, 2020.
On July 30, 2021, the Company entered into a Sixth Amendment to the Credit Agreement whereby the Company and the Bank agreed to extend the maturity date ofinterest rate on the Revolving Line to July 31, 2023. The Sixth Amendment also eliminated the adjusted debt to EBITDA covenant along with certain administrative requirementswas 3.25% and established the Secured Overnight Financing Rate (SOFR) as the replacement for LIBOR. Additional modifications to the Revolving Line included expanded allowances for acquisition and reduced interest rate spreads to a range of 2.00% to 2.60%, among other things.
As of June 30, 2021, the Revolving Line required monthly payments of interest at the greater of the London Interbank Offered Rate (LIBOR) daily floating rate or 1.25% plus an applicable rate which varied between 2.35% and 2.95% based on the Company achieving certain leverage ratios as defined in the Credit Agreement. On June 30, 2021, and June 30, 2020, the interest rate was 3.60% and 3.25%, respectively. All outstanding principal is due upon expiration, which was extended to July 31, 2023, whenon the Company entered into the Sixth Amendment to the Credit Agreement. The Revolving Line is reported as bank line of creditdue on the consolidated balance sheets.July 31, 2023. On June 30, 2021March 31, 2022 and December 31, 2020, the2021, there was 0 outstanding balance on the Revolving Line was $0 and $3.5 million, respectively.Line.
Fixed Line #1 hashad a maximum advance of $1.0 million and does not allow for re-borrowings and is included in Notes Payable (see Note 12). Beginning October 1, 2017, the Company began paying interest on a monthly basis at a rate per year equal to LIBOR plus 2.75%. On June 30,March 31, 2022 and 2021, and June 30, 2020, the interest rate was 2.85%3.21% and 2.93%2.86%, respectively. Commencing the earlier of i) the date 0 remaining amount is available under the Fixed Line or, ii) August 31, 2018, the Company iswas obligated to pay the then outstanding principal balance in sixty equal monthly installments through maturity in August 2023. On June 30, 2021,March 31, 2022 and December 31, 2020,2021, the outstanding balance on Fixed Line #1 was $0.4$0.3 million and $0.5$0.3 million, respectively.
Fixed Line #2 hashad a maximum advance of $1.0 million and does not allow for re-borrowings and is included in Notes Payable (see Note 12). On April 1, 2020, the Company began paying interest monthly at a rate per year equal to LIBOR plus 2.00%. On June 30, 2021, the interest rate was 2.1%. Commencing the earlier of i) the date 0 remaining amount is available under the Fixed Line or, ii) August 31, 2020, the Company is obligated to pay the then outstanding principal balance in sixty equal monthly installments through maturity in September 2025. On June 30, 2021March 31, 2022 and December 31, 2020,2021, the outstanding balance on Fixed Line #2 was $0.8$0.7 million and $0.9$0.7 million, respectively.
Facility #4 is a term loan with a principal loan amount of $1.0 million and is included in Notes Payable (see Note 12). The loan is to be repaid over thirty-six monthsequal monthly installments beginning April 13, 2020, through maturity on March 13, 2023. The payments consist of principal and interest in equal combined installments of $29,294. The interest rate on this loan is 3.49%. On June 30, 2021,March 31, 2022 and December 31, 2020,2021, the outstanding balance on Facility #4 was $0.6$0.3 million and $0.8$0.4 million, respectively.
The Company secures its obligations under the Credit Agreement with substantially all assets of the Company. Fixed Line #1 is guaranteed by Gary Bowman, the Company’s Chairman and Chief Executive Officer (“Guarantor”). Obligations of the Company to the Guarantor and certain other shareholders of the Company are subordinated to the Company’s obligations under the Credit Agreement and Fixed Line loans. The Company must maintain, on a combined basis certain financial covenants defined in the Credit Agreement.
Interest expense on the Revolving and Fixed Lines totaled $42,000$10,000 and $0.1 million during the three and six months ended June 30, 2021. Interest expense on the RevolvingMarch 31, 2022 and Fixed Lines totaled $59,000 and $0.2 million during the three and six months ended June 30, 2020.2021, respectively.
12. Notes Payable
Notes payable consist of the following (in thousands):
|
| June 30, 2021 |
|
| December 31, 2020 |
|
| March 31, 2022 |
|
| December 31, 2021 |
| ||||
Related parties: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders - Interest accrues annually at rates ranging from 0.00% - 6.25%. The notes payable mature on various dates through October 2025. |
| $ | 3,798 |
|
| $ | 2,202 |
|
| $ | 10,106 |
|
| $ | 10,771 |
|
Owners of Acquired Entity - Interest accrues annually at 3.25%. The note payable matures October 2024. |
|
| 414 |
|
| $ | 450 |
| ||||||||
Unrelated third parties: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note payable for purchase of software |
|
| 30 |
|
|
| 34 |
| ||||||||
Note payable for purchase of intangible asset |
|
| 150 |
|
|
| - |
|
|
| 100 |
|
|
| 100 |
|
Fixed line notes payable - see note 11 |
|
| 1,862 |
|
|
| 2,219 |
|
|
| 1,321 |
|
|
| 1,502 |
|
Total |
|
| 5,810 |
|
|
| 4,421 |
|
|
| 11,971 |
|
|
| 12,857 |
|
Less: current portion |
|
| (2,093 | ) |
|
| (1,592 | ) |
|
| (4,572 | ) |
|
| (4,450 | ) |
Noncurrent portion |
| $ | 3,717 |
|
| $ | 2,829 |
|
| $ | 7,399 |
|
| $ | 8,407 |
|
The Company’s chairmanPresident, Chairman and Chief Executive Officer guarantees certain of the notes payable, and certain of the notes payable are subordinate to the terms of the Credit Agreement disclosed in Note 11.
Interest expense attributable to the notes payable totaled $0.1 millionand $0.1 million$44,000 for the three and six months ended June 30,March 31, 2022 and 2021, respectively. Interest expense attributable to the notes payable totaled $0.1 million and $0.1 million for the three and six months ended June 30, 2020, respectively.
Future principal payments on notes payable for remainder of 20212022 and succeeding years are as follows (in thousands):
2021 |
|
|
| $ | 1,205 |
| ||||
2022 |
|
|
|
| 1,788 |
|
| $ | 3,682 |
|
2023 |
|
|
|
| 1,428 |
|
|
| 4,276 |
|
2024 |
|
|
|
| 1,028 |
|
|
| 3,652 |
|
2025 |
|
|
|
| 361 |
|
|
| 361 |
|
Total |
|
|
| $ | 5,810 |
|
| $ | 11,971 |
|
13. Related Party Transactions
The Company leases commercial office space from BCG Chantilly, LLC (BCC), an entity in which Mr. Bowman, Mr. Bruen and Mr. Hickey collectively own a 63.6% interest. As of June 30, 2021March 31, 2022 and December 31, 20202021 there were 0 amounts due to or receivables due from BCC. Rent expense for the three and six months ended June 30,March 31, 2022 and 2021, was $21,000 and $40,000, respectively. Rent expense for the three and six months ended June 30, 2020 was $20,000 and $40,000, respectively.both periods.
Bowman Lansdowne Development, LLC (BLD) is an entity in which Mr. Bowman, Mr. Bruen, Mr. Hickey have an ownership interest. On June 30, 2021March 31, 2022 and December 31, 2020,2021, the Company’s notes receivable included $0.5 million and $0.5 million, respectively, from BLD.
Lansdowne Development Group, LLC (LDG) is an entity in which BLD has a minority ownership interest. On June 30, 2021March 31, 2022 and December 31, 2020,2021, our accounts receivable included $0.1 million and $0.1 million, respectively, due from LDG. On June 30, 2021March 31, 2022 and December 31, 2020,2021, notes receivable included $0.4 million and $0.4 million, respectively from LDG.
Bowman Realty Investments 2010, LLC (BR10) is an entity in which Mr. Bowman, Mr. Bruen, Mr. Hickey have an ownership interest. On June 30, 2021March 31, 2022 and December 31, 2020,2021, the Company’s notes receivable included $0.2 million and $0.2 million, respectively, from BR10.
Alwington Farm Developers, LLC (AFD) is an entity in which BR10 has a minority ownership interest. On June 30, 2021March 31, 2022 and December 31, 2020,2021, notes receivable included $1.2 million and $1.2 million, respectively, from AFD.
MREC Shenandoah VA, LLC (“MREC Shenandoah”) is an entity in which Lake Frederick Holdings, LLC (“Lake Frederick Holdings”) owns a 92% interest and Shenandoah Station Partners LLC, an entity owned in part by Bowman Lansdowne and in part by Bowman Realty 2013, owns an 8% interest. Mr. Bowman owns a 100% interest in, and is the manager of, Lake Frederick Holdings. Mr. Bowman, Mr. Bruen and Mr. Hickey are each members of Bowman Realty 2013. Since 2020, the Company has provided engineering services to MREC Shenandoah in exchange for cash payments. During the three months ended March 31, 2022, the Company received payments for engineering services provided to MREC Shenandoah in the amount of $0.1 million. The Company did 0t receive any payments for engineering services provided to MREC Shenandoah during the three months ended March 31, 2021.
During the sixthree months ended June 30,March 31, 2022 and 2021, and 2020, the Company provided administrative, accounting and project management services to certain of the related party entities. The cost of these services was $46,000$17,000 and $0,$24,000, respectively. These entities were billed $0.1 million$20,000 and $0,$29,000, respectively.
Gregory Bowman, Realty Investments 2013 LLC (BR13) is an entity in whichthe son of Mr. Bowman, Mr. Bruen,is a full-time employee of the Company. Gregory Bowman was paid $34,000 and Mr. Hickey have an ownership interest.$30,000 for the three months ended March 31, 2022 and 2021, respectively.
On June 30, 2021March 31, 2022 and December 31, 2020,2021, the Company was due $0.5$0.1 million and $0.6$0.1 million, respectively, from shareholders under the terms of stock subscription notes receivable. These shareholders were executive officers as of the beginning of 2021 but are no longer.
On June 30, 2021March 31, 2022 and December 31, 2020,2021, the Company owed $0.3$0.2 million and $0.3$0.2 million, respectively, to a retired shareholder and former director in connection with a 2015 acquisition.
As of June
14. Employee Stock Purchase and Stock Incentive Plans
Employee Stock Purchase Plan
Effective April 30, 2021, and December 31, 2020, the Company owed certainestablished the Bowman Consulting Group Ltd. 2021 Employee Stock Purchase Plan (“ESPP”). Under the Company’s Employee Stock Purchase Plan, eligible employees who elect to participate are granted the right to purchase shares of our current and former shareholders $3.8 million and $2.2 million, respectively. The notes result from repurchases ofcommon stock from shareholders upon termination of employment and the promissory note issued to KTA Group Inc. as partat a 15% discount of the KTA acquisition.weighted average selling price of the Company stock for the 30 days prior to the last day of the offering period.
14. The following table summarizes the stock issuance activity under the Employee Stock Purchase Plan for the three months ended March 31, 2022 (in thousands, except share data):
|
| March 31, 2022 |
| |
Total purchase price paid by employees for shares sold |
| $ | 282 |
|
|
|
|
|
|
Number of shares sold |
|
| 20,205 |
|
Stock Options
Effective May 11, 2021 the Company established the Bowman Consulting Group Ltd. 2021 Omnibus Equity Incentive Plan (“the Plan”). The plan is administered by the Board of Directors through which they can grant stock options, including Incentive Stock Options (“ISO”), and non-qualified stock options (“NQSO”). The purpose of the Plan is to grant equity incentive awards to eligible participants to attract, motivate and retain key personnel. The Plan supersedes and replaces any prior plan for stock options except that the prior plan shall remain in effect with respect to options granted under such prior plan until such options have been exercised, expired or canceled.
The number of shares for which each option shall be granted, whether the option is an ISO or NQSO, the option price, the exercisability of the option, and all other terms and conditions of the option are determined by the Board at the time the option is granted. The options generally vest over a period between two and five years.
For the sixthree months ended June 30, 2021,March 31, 2022, 0 new option shares were granted.
A summary of the status of stock options exercised, including the substantive options discussed in Note 3, is as follows:
|
| Number of shares |
|
| Weighted Average Exercise Price |
|
| Number of shares |
|
| Weighted Average Exercise Price |
| ||||
Outstanding at January 1, 2021 |
|
| 53,277 |
|
| $ | 5.87 |
| ||||||||
Outstanding at December 31, 2021 |
|
| 14,927 |
|
| $ | 5.99 |
| ||||||||
Granted |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Exercised |
|
| (31,004 | ) |
|
| 5.56 |
|
|
| (1,121 | ) |
|
| 5.99 |
|
Expired or cancelled |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Outstanding at June 30, 2021 |
|
| 22,273 |
|
| $ | 6.29 |
| ||||||||
Outstanding at March 31, 2022 |
|
| 13,806 |
|
| $ | 5.99 |
|
The following summarizes information about options outstanding and exercisable at January 1, 20212022 and June 30, 2021:March 31, 2022:
|
| Options Outstanding and Exercisable |
| |||||||||||||||||
|
| Exercise Price |
|
| Total Outstanding |
|
| Weighted Average Remaining Life (Years) |
|
| Weighted Average Exercise Price |
|
| Total Exercisable |
| |||||
January 1, 2021 |
| $ | 6.37 |
|
|
| 53,277 |
|
|
| 4.5 |
|
| $ | 5.87 |
|
|
| 53,277 |
|
June 30, 2021 |
| $ | 6.74 |
|
|
| 22,273 |
|
|
| 5.0 |
|
| $ | 6.29 |
|
|
| 22,273 |
|
|
| Options Outstanding and Exercisable |
| |||||||||||||||||
|
| Exercise Price |
|
| Total Outstanding |
|
| Weighted Average Remaining Life (Years) |
|
| Weighted Average Exercise Price |
|
| Total Exercisable |
| |||||
January 1, 2022 |
| $ | 6.57 |
|
|
| 14,927 |
|
|
| 5.0 |
|
| $ | 5.99 |
|
|
| 14,927 |
|
March 31, 2022 |
| $ | 6.28 |
|
|
| 13,806 |
|
|
| 5.0 |
|
| $ | 5.99 |
|
|
| 13,806 |
|
The intrinsic value of these options on June 30, 2021March 31, 2022 and December 31, 20202021 was $7.11$10.16 and $6.43,$14.68, respectively.
The Company received cash payments of $8,861 and $27,285$6,739 from the exercise of options under the Stock Option Plan in the three and six months ended June 30, 2021.March 31, 2022.
The Company did 0t record any compensation costs related to stock options during the three and six months ended June 30, 2021.March 31, 2022.
As of June 30, 2021,March 31, 2022, there is 0 unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Stock Option Plan. The remaining unexercised shares are from substantive options in which the non-recourse notes may be pre-paid, therefore the Company recognized the total calculated compensation expense at the time of issuance.
15. Stock Bonus Plan
Effective May 11, 2021, the Company established the Bowman Consulting Group Ltd. 2021 Omnibus Equity Incentive Plan.Plan (“the Plan”). The Plan is administered by the Board of Directors through which they can issue restricted stock awards. The purposeAs of March 31, 2022, 3,450,729 shares of common stock are authorized and reserved for issuance under the Plan. This reserve automatically increases on each January 1, for the duration of the Plan, isin an amount equal to grant equity incentive awards to eligible participants to attract, motivate and retain key personnel. 5% of the total number of shares outstanding on December 31st of the preceding calendar year. The Plan supersedes and replaces any prior plan for stock bonus grants to employees of the Company except that the prior plan shall remain in effect with respect to awards granted under such prior plan until such awards have been forfeited or fully vested.
During the sixthree months ended June 30, 2021,March 31, 2022, the Board granted 1,563,51130,957 shares of restricted stock under the Plan. The shares have a vesting period of up to five years during which there are certain restrictions as defined bydescribed in the Plan and Stock Bonus Agreements. The grant date fair value of the award is the closing price of the Shareshares on such date, or if there are no sales on such date, on the next preceding day on which there were sales.
Effective April 2003, the Company adopted the Bowman Consulting Group Ltd. Stock Bonus Plan (“the Stock Bonus Plan”), which allowed for the awarding of restricted stock to employees. The Stock Bonus Plan was superseded by the Bowman Consulting Group Ltd. 2021 Omnibus Equity Incentive Planexcept that the Stock Bonus Plan shall remain in effect with respect to awards granted under it until such awards have been forfeited or fully vested.
During the three months ended March 31, 2022 0 new restricted stock awards were granted under the Stock Bonus Plan.
The following table summarizes the activity of restricted shares subject to forfeiture:
|
| Number of shares |
|
| Weighted Average Grant Price |
|
| Number of shares |
|
| Weighted Average Grant Price |
| ||||
Outstanding at January 1, 2021 |
|
| 702,926 |
|
| $ | 12.80 |
| ||||||||
Outstanding at January 1, 2022 |
|
| 2,218,283 |
|
|
| 13.74 |
| ||||||||
Granted |
|
| 1,563,511 |
|
|
| 13.96 |
|
|
| 30,957 |
|
|
| 18.14 |
|
Vested |
|
| (61,774 | ) |
|
| 12.80 |
|
|
| (158,730 | ) |
|
| 12.89 |
|
Outstanding at June 30, 2021 |
| �� | 2,204,663 |
|
| $ | 13.62 |
| ||||||||
Cancelled |
|
| - |
|
|
| - |
| ||||||||
Outstanding at March 31, 2022 |
|
| 2,090,510 |
|
|
| 13.88 |
|
On November 10, 2021 the compensation committee of the Company’s Board of Directors adopted the 2021 Executive Officers Long Term Incentive Plan (“Officers LTIP”). The Officers LTIP is established under the Plan and is subject to the terms and conditions thereof. The purpose of this plan is to attract, retain and motivate key officers and employees through the grant of equity-based awards that reward Company performance over a period greater than one year and align their interests with long-term stockholder value.
During the three months ended March 31, 2022, the compensation committee approved the grants of 217,798 performance-based stock units to certain executive officers of the Company under the Officers LTIP. The performance based restricted stock units are subject to a market condition, with a vesting period of 2.91 years. The number of units earned is based on total shareholder return (“TSR”) of the Company’s common stock relative to the TSR of the components of a custom peer group during the performance period from February 10, 2022 to December 31, 2024. The performance stock units are valued using a Monte Carlo simulation with model inputs of opening average share value, valuation date stock price, expected volatilities, correlation coefficient, risk-free interest rate, and expected dividend yield for the Company and the custom peer group.
The following table summarizes the activity of performance stock units subject to forfeiture:
|
| Number of shares |
|
| Weighted Average Grant Price |
| ||
Outstanding at January 1, 2022 |
|
| 260,842 |
|
|
| 13.81 |
|
Granted |
|
| 217,798 |
|
|
| 13.04 |
|
Vested |
|
| - |
|
|
| - |
|
Cancelled |
|
| - |
|
|
| - |
|
Outstanding at March 31, 2022 |
|
| 478,640 |
|
|
| 13.46 |
|
The Company recognized forfeitures as they occur.
The following table represents the change in the liability to common shares subject to repurchase and the associated non-cash compensation expense for the sixthree months ended June 30, 2021March 31, 2022 and the year ended December 31, 20202021 (in thousands):
|
| June 30, 2021 |
|
| December 31, 2020 |
|
| March 31, 2022 |
|
| December 31, 2021 |
| ||||
Beginning Balance |
| $ | 842 |
|
| $ | 8,267 |
|
| $ | 7 |
|
| $ | 842 |
|
Non-cash compensation from ratable vesting |
|
| 41 |
|
|
| 2,712 |
|
|
| - |
|
|
| 41 |
|
Non-cash compensation from change in fair value of liability |
|
| 2 |
|
|
| 2,457 |
|
|
| - |
|
|
| 2 |
|
Other stock activity, net |
|
| 516 |
|
|
| (786 | ) |
| $ | (7 | ) |
|
| 516 |
|
Reclassification upon modification |
| $ | (1,394 | ) |
|
| (11,808 | ) |
|
| - |
|
|
| (1,394 | ) |
Ending balance |
| $ | 7 |
|
| $ | 842 |
|
|
| - |
|
| $ | 7 |
|
As of June 30, 2021,March 31, 2022, the Company had 2,204,6632,569,150 shares of unvested stock awards that vest between JulyApril 1, 20212022 and May 11, 2026.
The future expense of the unvested awards for the remainder of 20212022 and succeeding years is as follows (in thousands):
2021 |
| $ | 4,873 |
| ||||
2022 |
|
| 8,330 |
|
| $ | 8,717 |
|
2023 |
|
| 7,258 |
|
|
| 10,481 |
|
2024 |
|
| 4,475 |
|
|
| 5,997 |
|
2025 |
|
| 1,360 |
| ||||
Thereafter |
|
| 1,546 |
|
|
| 281 |
|
Total |
| $ | 26,482 |
|
| $ | 26,836 |
|
16.15. Capital Leases
On September 30, 2020, theThe Company converted operating leases for equipment and vehicles to capital leases and recorded the associated equipment purchases andunder capital lease liability, current and non-current.agreements. The payment terms on the lease agreements range between 30 and 5150 months with payments totaling approximately $0.4 million per month. We use the incremental borrowing rate on our revolving line of credit to calculate the present value on new leases.
Future minimum commitments under non-cancelable capital leases for the remainder of 20212022 and succeeding years are as follows (in thousands):
2021 |
| $ | 2,365 |
| ||||
2022 |
|
| 4,406 |
|
| $ | 4,844 |
|
2023 |
|
| 3,163 |
|
|
| 5,248 |
|
2024 |
|
| 970 |
|
|
| 3,059 |
|
2025 |
|
| 209 |
|
|
| 1,989 |
|
2026 |
|
| 140 |
| ||||
Total minimum lease payments |
| $ | 11,113 |
|
| $ | 15,280 |
|
Less: amount representing interest |
|
| (1,076 | ) |
|
| (1,820 | ) |
Present value of total net minimum lease payments |
| $ | 10,037 |
|
| $ | 13,460 |
|
Less: current portion of net minimum lease payments |
|
| (4,089 | ) |
|
| (5,491 | ) |
Long-term portion of net minimum lease payments |
| $ | 5,948 |
|
| $ | 7,969 |
|
The above table is exclusive of the $2.0$2.7 million bargain purchase price associated with the $12.0$16.2 million total liability to capital leases as presented on the combinedconsolidated balance sheet.
17.16. Commitments and Contingencies
Operating leases
The Company leases office space, equipment and vehicles. The Company financed vehicles, certain IT, and other equipment under the terms of 3 primary master lease agreements accounted for as operating leases until September 30, 2020, when the Company converted theNearly all equipment and vehicles to capital lease as referenced in Note 17. The Company now leases nearly all equipment and vehiclesare leased under capital lease agreements and all office space under operating lease agreements. Rent, vehicle and equipment lease expense for the three and six months ended June 30,March 31, 2022 and 2021, was $1.4$1.8 million and $2.8 million, respectively. Rent, vehicle, and equipment lease expense for the three and six months ended June 30, 2020, was $2.0 million and $4.1$1.4 million, respectively.
Future minimum lease payments for the remainder of 20212022 and for the succeeding years is as follows (in thousands):
2021 |
| $ | 2,845 |
|
2022 |
|
| 5,543 |
|
2023 |
|
| 4,380 |
|
2024 |
|
| 3,927 |
|
2025 |
|
| 3,515 |
|
Thereafter |
|
| 8,075 |
|
Total |
| $ | 28,285 |
|
2022 |
| $ | 5,187 |
|
2023 |
|
| 5,547 |
|
2024 |
|
| 4,866 |
|
2025 |
|
| 4,023 |
|
2026 |
|
| 3,221 |
|
Thereafter |
|
| 7,342 |
|
Total |
| $ | 30,186 |
|
18.17. Subsequent Events
The Company has evaluated subsequent events through August 12, 2021, the date that financial statements were issued.
On July 30, 2021, the Company entered into a Sixth Amendment to the Credit Agreement whereby the Company and the Bank agreed to extend the maturity date of the Revolving Line to July 31, 2023. The Sixth Amendment also eliminated the adjusted debt to EBITDA covenant along with certain administrative requirements and established the Secured Overnight Financing Rate (SOFR) as the replacement for LIBOR. Additional modifications to the Revolving Line included expanded allowances for acquisition and reduced interest rate spreads, among other things.
On August 2, 2021,May 4, 2022, the Company completed the acquisition of assets and operations of McFarland-Dyer &McMahon Associates, Inc. locatedpursuant to the Stock Purchase Agreement, dated May 4, 2022 (the “Agreement”), among the Company, McMahon, McMahon Associates Holdings, Inc. (“McMahon Holdings”) and certain shareholders of McMahon Holdings. The aggregate consideration was approximately $18.4 million which consisted of (i) $7.5 million in cash, (ii) non-negotiable promissory notes in the Greater Atlanta Metropolitan area. In connection with the acquisition, the Company issued 32,143 sharesaggregate amount of common stock$3.4 million, subject to the seller. Given the short period of time between the acquisition dateadjustment, and (iii) the issuance of this quarterly report476,796 shares of restricted common stock which was priced under the Agreement at $15.73 per share. The restricted shares are subject to a six-month lock-up agreement.The transaction was structured as a stock purchase with a joint election to treat the acquisition as an asset sale pursuant to the Internal Revenue Code. As such, determination of the final acquisition cost is subject to adjustment based on Form 10-Q, it is not practicable to disclose the preliminarycustomary post-closing purchase price allocation for this transaction.
accounting. The acquisition of McMahon Associates, Inc. allows Bowman to further enhance its transportation planning and engineering services to private and public sector clients thereby allowing the Company to broaden its offering and better serve its public and private sector customers.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains “forward-looking statements” reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to several factors. Factors that could cause or contribute to such differences include, but are not limited to, economic and competitive conditions, regulatory changes, and other uncertainties, as well as those factors discussed in the Risk Factors section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “Annual Report on Form 10-K”) filed with the US Securities and Exchange Commission and elsewhere in this Quarterly Report on Form 10-Q, particularly in “Cautionary Statement about Forward-Looking Statements,” all of which are difficult to predict. Considering these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. We assume no obligation to update any of these forward-looking statements, except to the extent required by applicable laws or rules. Unless the context otherwise requires, references to “Bowman,” the “company,” the “Company,” “we,” “us,” and “our” refer to Bowman Consulting Group Ltd., its wholly owned subsidiaries and combined entities under common control, or either or all of them as the context may require.
Overview
Bowman is a professional services firm delivering innovative engineering solutions to customers who own, develop and maintain the built environment. We provide planning, engineering, construction management, commissioning, environmental consulting, geomatics, survey, land procurement and other technical services to over 2,200 customers operating in a diverse set of end markets. We work as both a prime and sub-consultant for a broad base of public and private sector customers that generally operate in highly regulated environments.
We have a diversified business that is not dependent on any one service line, geographic region, or end market. We are deliberate in our efforts to balance our sources of revenue and avoid reliance on any one significant customer, service line, geography or end market concentration. Our strategic focus is on penetrating and expanding our presence in markets which best afford us opportunities to secure assignments that provide reoccurring revenue and multi-year engagements thus resulting in dependable and predictable revenue streams and high employee utilization. We limit our exposure to risk by providing professional and related services exclusively. We do not engage in general contracting activities either directly, or through joint ventures, and therefore have no related exposure. We are not a partner in any design-build construction projects. We carry no heavy equipment inventory, and our risk of contract loss is generally limited to time associated with fixed fee professional services assignments.
Gross contract revenue for the three months ended June 30,March 31, 2022 and 2021 and 2020 was $36.5$52.5 million and $31.7$31.8 million, respectively.respectively representing year over year growth of 65.1%. Gross contract revenue derived from our workforce represented 88.9%90.9% and 85.6%90.8% of gross contract revenue for the three months ended June 30,March 31, 2022 and 2021, and 2020, respectively (see Net service billing – non-GAAP below). Our adjusted EBITDA was $4.2 million on net loss of $0.6 million and $5.1$7.4 million on net income of $1.6$1.5 million and $4.1 million on net income of $1.0 million for the three months ended June 30,March 31, 2022 and 2021, and 2020, respectively.
Gross contract revenue forSubsequent Events
On May 4, 2022, the six months ended June 30,Company completed the acquisition of McMahon Associates, Inc. pursuant to the Stock Purchase Agreement, dated May 4, 2022 (the “Agreement”), among the Company, McMahon, McMahon Associates Holdings, Inc. (“McMahon Holdings”) and certain shareholders of McMahon Holdings. The aggregate consideration was approximately $18.4 million which consisted of (i) $7.5 million in cash, (ii) non-negotiable promissory notes in the aggregate amount of $3.4 million, subject to adjustment, and (iii) the issuance of 476,796 shares of restricted common stock which was priced under the Agreement at $15.73 per share. The restricted shares are subject to a six-month lock-up agreement.The transaction was structured as a stock purchase with a joint election to treat the acquisition as an asset sale pursuant to the Internal Revenue Code. As such, determination of the final acquisition cost is subject to adjustment based on customary post-closing purchase price accounting. The acquisition of McMahon Associates, Inc. allows Bowman to further enhance its transportation planning and engineering services to private and public sector clients thereby allowing the Company to broaden its offering and better serve its public and private sector customers.
Common Stock Offering
On February 8, 2022, we priced an underwritten follow-on offering of 900,000 shares of our common stock (the “Firm Shares”) at an offering price of $16.00 per share. The shares were sold pursuant to an effective registration statement on Form S-1 (Registration No. 333-262464). In addition, Gary Bowman, our President, Chairman and Chief Executive Officer, sold an aggregate of 150,000 shares of common stock in the offering. We granted the underwriters of the offering a 30-day option to purchase up to 157,500 shares of our common stock solely to cover over-allotments. On February 11, 2022, we closed on the underwritten follow-on offering and
received net proceeds of approximately $13.7 million after deducting the underwriting discount and estimated offering expenses payable by the Company, and Mr. Bowman received aggregate proceeds of approximately $2.4 million. We did not receive any proceeds from the sale of shares of our common stock by Mr. Bowman.
On February 28, 2021, the underwriters exercised their option to purchase an additional 157,500 shares of our common stock at an offering price of $16.00 per share, resulting in additional gross proceeds of approximately $2.5 million. After giving effect to this exercise of the overallotment option, the total number of shares sold by us in the follow-on offering increased to 1,057,500 shares with total gross proceeds of approximately $16.9 million. The exercise of the over-allotment option closed on March 2, 2022, at which time we received net proceeds of approximately $2.4 million after underwriting discounts and 2020 was $68.3 million and $60.4 million, respectively, representing year over year growth of 13.1%. Gross contract revenue derived from our workforce represented 89.8% and 86.0% of gross contract revenue for the six months ended June 30, 2021, and 2020, respectively (see Net service billing – non-GAAP below). Our adjusted EBITDA was $8.3 million on net income of $0.4 million and $6.7 million on net income of $2.0 million for the six months ended June 30, 2021, and 2020, respectively.commissions.
COVID-19 Update
It is not possible at this time to estimate the full impact that COVID-19 and its variants will ultimately have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted. We are evaluating, and will continue to evaluate, the impact of COVID-19 on projects, but the full effects COVID-19 will have on our operations are still unknown. As of the date of this Quarterly Report on Form 10-Q, we have not experienced any material financial distress resulting from the COVID-19 pandemic. We did not qualify for the PPP Loan program under the CARES Act. Included in accounts payable and accrued liabilities and other non-current obligations in the consolidated balance sheet as of June 30, 2021,March 31, 2022, is $2.5$1.2 million of deferred employer payroll taxes as afforded us under the CARES Act. The duration and extent of the impact from the COVID-19 pandemic depends on future developments and possible shelter-in-place orders that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the extent and effectiveness of containment actions, and the impact of these and other factors on our employees and clients.
Methods of Evaluation
We use a variety of financial and other information in monitoring the financial condition and operating performance of our business. Some of the information we use to evaluate our operations is financial information that is in accordance with generally accepted accounting principles (GAAP), while other information may be financial in nature and either built upon GAAP results or may not be in accordance with GAAP (Non-GAAP). We use all this information together for planning and monitoring our operations, as well as determining certain management and employee compensation.
The Company operates as a single business segment represented by our core business of providing multi-disciplinary professional engineering solutions to customers. While we evaluate revenue and other key performance indicators relating to various divisions of labor, our leadership neither manages the business nor deliberately allocates resources by service line, geography, or end market. Our financial statements present results as a single operating segment.
Components of Income and Expense
Revenue
We generate revenue from services performed by our employees, pass-through fees from sub-consultants, and reimbursable contract costs. On our consolidated financial statements, we report gross revenue, which represents total revenue billed to customers excluding taxes collected from customers. Gross revenue less revenue derived from pass-through sub-consultant fees, reimbursable expenses and other direct expenses represents our net service billing, or that portion of our gross revenue attributable to services performed by our employees. Our industry uses the calculation underlying net service billing to normalize peer performance assessments and provide meaningful insight into trends over time. Refer to — Other Financial Data, Non-GAAP measurements and Key Performance Indicators below for further discussion of the use of this Non-GAAPnon-GAAP financial measure.
We generally do not make profit from the pass-through of sub-consultants and reimbursable expenses. As such, contract profitability is most heavy impacted by the mix of labor utilized to complete the tasks and the efficiency of those resources in completing the tasks. Our largest direct contract cost is consistently our labor. To grow our revenue and maximize overall profitability we carefully monitor and manage our fixed cost of labor and the utilization thereof. Maintaining an optimal level of utilization on a balanced pool of growing labor resources represents our greatest prospect for delivering increasing profitability.
Our contracts with customers generally contain multiple assignments based on two types of pricing characteristics:
Hourly, also referred to as time and materials, are common for professional and technical consulting assignments both short-term and multi-year in duration. Under these types of assignments, there is no predetermined maximum fee and as such, we generally experience no risk associated with our ability to bill for all hours expended. We negotiate billing rates and charge our customers based
upon the actual hours expended toward a deliverable. These assignments may have not-to-exceed parameters requiring us to receive additional authorizations from our customer to continue working, but we likewise do not have to continue working without assurances of payment for such additional work. Hourly assignments represented approximately $10.5$2.9 million and $20.0$9.5 million or 29%5% and 29%30% of our gross contract revenue for the three and six months ended June 30,March 31, 2022 and 2021, respectively. For the three and six months ended June 30, 2020 hourly assignments represented approximately $11.7 million and $24.1 million or 37% and 40% of our gross contract revenue, respectively.
Lump sum, also referred to as fixed fee, typically require the performance of some, or all, of the obligations under the assignment for a specified amount, subject to price adjustments only if the scope of the project changes or unforeseen requirements arise. Our fixed fee assignments generally include a specific scope of work and defined deliverables. The majorityMost of our assignments are lump sum in nature representing approximately $26.0$49.6 million and $48.3$22.3 million or 71%95% and 71%70% of our gross contract revenue for the three and six months ended June 30,March 31, 2022 and 2021, respectively. For the three and six months ended June 30, 2020 assignments that are lump sum in nature represented approximately $20.0 million and $36.3 million or 63% and 60% of our gross contract revenue. Recognizing revenue from lump sum assignments requires management estimates of both total contract value when there are contingent compensation elements of the fee arrangement and expected cost at completion. We closely monitor our progress to completion and adjust our estimates when necessary. We do not recognize revenue from work that is performed at risk with no documented customer commitment.
Contract Costs
Contract costs consists of direct payroll costs, sub-consultant costs and other direct expenses exclusive of depreciation and amortization.
Direct payroll costs represent the portion of salaries and wages incurred in connection with the production of deliverables under customer assignments and contracts. Direct payroll costs include allocated fringe costs (i.e. health benefits, employer payroll taxes, and retirement plan contributions), paid leave and incentive compensation.
Sub-consultants and direct expenses include both sub-consultants and other outside costs associated with performance under our contracts. Sub-consultant and direct costs are generally reimbursable by our customers under the terms of our contracts.
Performance under our contracts does not involve significant machinery or other long term depreciable assets. Most of the equipment we employ involves desktop computers and other shared ordinary course IT equipment. We present direct costs exclusive of depreciation and amortization and as such we do not present gross profit on our consolidated financial statements.
Operating Expense
Operating expenses consists of selling, general and administrative costs, non-cash stock compensation, depreciation and amortization and settlements and other non-core expenses.
Selling, general and administrative expenses represent corporate and other general overhead expenses, salaries and wages not allocated to customer projects including management and administrative personnel costs, incentive compensation, personal leave, office lease and occupancy costs, legal, professional and accounting fees.
Non-cash stock compensation represents the expenses incurred with respect to shares and options issued by the Company, both vested and unvested, to employees as long-term incentives. Non-cash stock compensation cost will be the grant date fair value of the awards, or the Black-Sholes-Merton value of stock options on the grant date, recognized ratably over the vesting periods of each award. Future non-cash stock compensation expense for unvested shares awarded prior to December 31, 2020 is based on a $12.80 per share fair value on the date of modification. Stock awards will continue to be an important part of our long-term retention and rewards philosophy.
Depreciation and amortization represent the depreciation and amortization expense of our property and general IT equipment, capital lease assets, tenant improvements and intangible assets.
(Gain) loss on sale represents gains or losses inclusive of foreign exchange and accumulated depreciation recapture resulting from the disposal of an asset upon the sale or retirement of such asset.
Other (Income) Expense
Other (income) expense consists of other non-operating and non-core expenses.expenses, including costs associated with acquisitions.
Tax Expense
Income tax (benefit) expense, current and deferred, includes estimated federal, state and local tax expense associated with our net income, as apportioned to the states in which we operate. Estimates of our tax expense include both current and deferred tax expense along with all available tax incentives and credits.
Other Financial Data, Non-GAAP Measurements and Key Performance Indicators
Backlog
We measure the value of our undelivered gross revenue in real time to calculate our backlog and predict future revenue. Backlog includes awarded, contracted, and otherwise secured commitments along with revenue we expect to realize over time for predictable long-term and reoccurring assignments. We report backlog quarterly as of the end of the last day of the reporting period. We use backlog to predict revenue growth and anticipate appropriate future staffing needs. Backlog definitions and methods of calculation vary within our industry. As such, backlog is not a reliable metric on which to evaluate us relative to our peers. Backlog neither derives from, nor connects to, any GAAP results.
Net Service Billing
In the normal course of providing services to our customers, we routinely subcontract services and incur direct third-party contract expenses that may or may not be reimbursable and may or may not be billed to customers with mark-up. Gross revenue less revenue derived from pass-through sub-consultant fees and reimbursable expenses represents our net service billing, which is a non-
GAAPnon-GAAP financial measure, or that portion of our gross contract revenue attributable to services performed by our employees. Because the ratio of sub-contractor and direct expense costs to gross billing varies between contracts, gross revenue is not necessarily indicative of trends in our business. As a professional services company, we believe that metrics derived from net service billings more accurately demonstrate the productivity and profitability of our workforce. Our industry uses the calculation of net service billing to normalize peer performance assessments and provide meaningful insight into trends over time.
Adjusted EBITDA
We view Adjusted EBITDA, which is a non-GAAP financial measure, as an important indicator of normalized performance. We define Adjusted EBITDA as net income before interest expense, income taxes and depreciation and amortization, plus discontinued expenses, non-core legal settlements and other costs not in the ordinary course of business, non-cash stock-based compensation (inclusive of expenses associated with the adjustment of our liability for common shares subject to redemption), and other adjustments such as costs associated with preparing for our IPO. Our peers may define Adjusted EBITDA differently.
Adjusted EBITDA Margin, net
Adjusted EBITDA Margin, net, which is a non-GAAP financial measure, represents Adjusted EBITDA, as defined above, as a percentage of net service billings, as defined above.
Results of Operations
Combined results of operations
The following represents our condensed consolidated results of operations for periods indicated (in thousands):
|
| For the Three Months Ended June 30, |
|
| For the Six Months Ended June 30, |
|
| For the Three Months Ended March 31, |
|
| ||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
|
| |||||||
Gross contract revenue |
| $ | 36,524 |
|
| $ | 31,749 |
|
| $ | 68,326 |
|
| $ | 60,360 |
|
| $ | 52,461 |
|
| $ | 31,802 |
|
| |
Contract costs (exclusive of depreciation and amortization) |
|
| 18,188 |
|
|
| 16,640 |
|
|
| 34,344 |
|
|
| 32,153 |
|
|
| 25,419 |
|
|
| 16,156 |
|
| |
Operating expense |
|
| 18,657 |
|
|
| 12,402 |
|
|
| 32,808 |
|
|
| 24,793 |
|
|
| 25,204 |
|
|
| 14,151 |
|
| |
Income (loss) from operations |
|
| (321 | ) |
|
| 2,707 |
|
|
| 1,174 |
|
|
| 3,414 |
| ||||||||||
Income from operations |
|
| 1,838 |
|
|
| 1,495 |
|
| |||||||||||||||||
Other (income) expense |
|
| 187 |
|
|
| (67 | ) |
|
| 392 |
|
|
| (76 | ) |
|
| 498 |
|
|
| 205 |
|
| |
Income tax expense (benefit) |
|
| (69 | ) |
|
| 1,157 |
|
|
| 240 |
|
|
| 1,447 |
|
|
| (117 | ) |
|
| 309 |
|
| |
Net income (loss) |
| $ | (439 | ) |
| $ | 1,617 |
|
| $ | 542 |
|
| $ | 2,043 |
| ||||||||||
Net income |
| $ | 1,457 |
|
| $ | 981 |
|
| |||||||||||||||||
Net margin |
|
| -1.2 | % |
|
| 5.1 | % |
|
| 0.8 | % |
|
| 3.4 | % |
|
| 2.8 | % |
|
| 3.1 | % |
| |
Other financial information 1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net service billing |
| $ | 32,459 |
|
| $ | 27,168 |
|
| $ | 61,327 |
|
| $ | 51,901 |
|
| $ | 47,701 |
|
| $ | 28,868 |
|
| |
Adjusted EBITDA |
|
| 4,185 |
|
|
| 5,115 |
|
|
| 8,271 |
|
|
| 6,704 |
|
|
| 7,404 |
|
|
| 4,086 |
|
| |
Adjusted EBITA margin, net |
|
| 12.9 | % |
|
| 18.8 | % |
|
| 13.5 | % |
|
| 12.9 | % |
|
| 15.5 | % |
|
| 14.2 | % |
|
1 | Represents non-GAAP financial measures. See Other Financial Information and Non-GAAP key performance indicators below in results of operations. |
Three months ended June 30, 2021March 31, 2022 as compared to the three months ended June 30, 2020March 31, 2021
Gross Contract Revenue
Gross contract revenue for the three months ended June 30, 2021,March 31, 2022, increased $4.8$20.7 million or 15.1%65.1% to $36.5$52.5 million as compared to $31.7$31.8 million for the three months ended June 30, 2020.March 31, 2021. For the three months ended June 30, 2021,March 31, 2022, gross contract revenue attributable to work performed by our workforce increased $5.3$18.8 million, or 19.5%65.1% to $32.5$47.7 million or 89.0%90.9% of gross contract revenue as compared to $27.2$28.9 million or 85.8%90.9% for the three months ended June 30, 2020March 31, 2021 (see Net service billing – non-GAAP). Of the $20.7 million increase in gross contract revenue during the three months ended March 31, 2022, acquisitions represented $7.7 million or 37.2% of the increase.
Changes in gross contract revenue (“GCR”) for the three months ended June 30, 2021, disaggregated between our core and emerging end markets were as follows (in thousands other than percentages):
|
| For the Three Months Ended June 30, |
|
|
|
|
|
|
|
|
| For the Three Months Ended March 31, |
|
|
|
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|
|
|
|
| ||||||||||||||||||||||||||
Consolidated Gross Contract Revenue |
| 2021 |
|
| %GCR |
|
| 2020 |
|
| %GCR |
|
| Change |
|
| % Change |
| 2022 |
|
| %GCR |
|
| 2021 |
|
| %GCR |
|
| Change |
|
| % Change |
| ||||||||||||
Communities, homes & buildings |
| $ | 25,187 |
|
|
| 69.0 | % |
| $ | 19,571 |
|
|
| 61.6 | % |
| $ | 5,616 |
|
|
| 28.7 | % | |||||||||||||||||||||||
Building Infrastructure 1 | $ | 38,762 |
|
|
| 73.9 | % |
| $ | 21,037 |
|
|
| 66.1 | % |
| $ | 17,725 |
|
|
| 84.3 | % | ||||||||||||||||||||||||
Transportation |
|
| 4,174 |
|
|
| 11.4 | % |
|
| 5,406 |
|
|
| 17.0 | % |
|
| (1,232 | ) |
|
| (22.8 | %) |
| 3,970 |
|
|
| 7.6 | % |
|
| 4,122 |
|
|
| 13.0 | % |
|
| (152 | ) |
|
| (3.7 | %) |
Power & Utilities |
|
| 6,184 |
|
|
| 16.9 | % |
|
| 5,477 |
|
|
| 17.3 | % |
|
| 707 |
|
|
| 12.9 | % |
| 7,637 |
|
|
| 14.5 | % |
|
| 5,045 |
|
|
| 15.9 | % |
|
| 2,592 |
|
|
| 51.4 | % |
Other emerging markets 1 |
|
| 979 |
|
|
| 2.7 | % |
|
| 1,295 |
|
|
| 4.1 | % |
|
| (316 | ) |
|
| (24.4 | %) | |||||||||||||||||||||||
Other emerging markets 2 |
| 2,092 |
|
|
| 4.0 | % |
|
| 1,598 |
|
|
| 5.0 | % |
|
| 494 |
|
|
| 30.9 | % | ||||||||||||||||||||||||
Total: |
| $ | 36,524 |
|
|
| 100.0 | % |
| $ | 31,749 |
|
|
| 100.0 | % |
| $ | 4,775 |
|
|
| 15.0 | % | $ | 52,461 |
|
|
| 100.0 | % |
| $ | 31,802 |
|
|
| 100.0 | % |
| $ | 20,659 |
|
|
| 65.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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| |||||||||||||||||||||||
Organic and Acquired Gross Contract Revenue |
| 2021 |
|
| %GCR |
|
| 2020 |
|
| %GCR |
|
| Change |
|
| % Change |
| |||||||||||||||||||||||||||||
Organic |
| $ | 33,957 |
|
|
| 93.0 | % |
| $ | 31,749 |
|
|
| 100.0 | % |
| $ | 2,208 |
|
|
| 7.0 | % | $ | 42,910 |
|
|
| 81.6 | % |
| $ | 29,879 |
|
|
| 94.0 | % |
| $ | 13,031 |
|
|
| 43.6 | % |
Acquired |
|
| 2,567 |
|
|
| 7.0 | % |
|
| - |
|
|
| 0.0 | % |
|
| 2,567 |
|
|
| 100.0 | % |
| 9,551 |
|
|
| 18.4 | % |
|
| 1,923 |
|
|
| 6.0 | % |
|
| 7,628 |
|
|
| 21.3 | % |
Total: |
| $ | 36,524 |
|
|
| 100.0 | % |
| $ | 31,749 |
|
|
| 100.0 | % |
| $ | 4,775 |
|
|
| 15.0 | % | $ | 52,461 |
|
|
| 100.0 | % |
| $ | 31,802 |
|
|
| 100.0 | % |
| $ | 20,659 |
|
|
| 65.0 | % |
|
|
|
|
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|
|
1 represents renewable energy, mining, water resources and other |
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| ||||||||||||||||||||||||||
1 formerly referred to as Communities, homes & buildings |
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| ||||||||||||||||||||||||
2 represents renewable energy, mining, water resources and other |
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|
For the three months ended June 30, 2021,March 31, 2022, gross revenue from our building infrastructure market (formerly referred to as communities, homes, and buildings (“CHB”) marketbuildings) increased $5.6$17.7 million or 84.3% as compared to the three months ended June 30, 2020.March 31, 2021. The increase is attributable to a $2.4$6.5 million increase from commercial projects including office, industrial, commercial and retail, an $8.2 million increase from residential projects including single family, multi-family, senior living, build-for-rent and mixed-use projects
and a $3.2$3.0 million increase from commercial,in municipal and other projects. Gross revenue derived from the acquisition of KTA was almost exclusively attributable to commercial projects. As the U.S. economy recovers from the COVID-19 pandemic, we are experiencing continued expansion of demand for our CHBbuilding infrastructure services. We continue to maintain a positive outlook on this market and expect it to represent most of our gross revenue for the remainder of 2021.2022.
For the three months ended June 30, 2021,March 31, 2022, revenue from transportation decreased $1.2$0.2 million or (3.7%) as compared to the three months ended June 30, 2020. ReductionsMarch 31, 2021. The reduction was not attributable to any specific project or client, but rather a mixture of $1.5 million due to the completion of two largeincreases and decreases in various projects nationally. Recent contract awards in transportation projects in Texas and reduced activity on projects in Illinois and Virginia were offset by $0.3 million of increased gross revenue from projects in Florida and West Virginia. During the three months ended June 30, 2021, we were awarded a three-year, $10 million task order contract fromsuch as Cook County Illinois relatingDOT along with clients and projects such as TX DOT added through acquisition are beginning to their Pavement Preservationgenerate meaningful new transportation revenue. We expect that our recent acquisition of McMahon Associates, Inc. will significantly increase our transportation revenue and Rehabilitation program.will improve the diversification of our revenue. We believe the transportation market continues to present significant opportunity for future growth and we remain committed to investing in leadership, technical expertise, and business development resourcesand acquisitions for this market.
For the three months ended June 30, 2021,March 31, 2022, revenue from power and utilities increased $0.7$2.6 million or 51.4% as compared to the three months ended June 30, 2020.March 31, 2021. The increase in gross contract revenue from the power and utilities market is primarily the result of a $0.2 million increase inprincipally attributable to increased revenue associated with the expansion of a multi-year utility undergrounding assignment in Florida. Additional increases were derived from gas pipeline identification and replacement programs and a $0.5 million increase in gross revenue from utility undergrounding assignments.electric transmission projects. The power and utilities market continues to experience increasing infrastructure investment as changing weather patterns, energy transition mandates and other safety initiatives positively impact demand for the services we provide. As evidenced by recent increases in program commitments within the gas pipeline market, we believe trends in power and utilities provide meaningful opportunity for continued growth and we are committed to investing resources accordingly.
Our other emerging markets consist of renewable energy and energy efficiency, mining, water resources, and other natural resources services. For the three months ended June 30, 2021,March 31, 2022, revenue from emerging markets decreased $0.3increased $0.5 million or 30.9% as compared to the three months ended June 30, 2020. Decreases inMarch 31, 2021. Increased emerging market revenue included $0.1a $0.9 million increase in reduced gross revenuerenewable energy services and a $0.6 million increase from solar energy and battery storage assignments and $0.2 million in reduced gross revenue in our Arizona mining operations. Our mining services where we have specialized in copper mining, the demand for which is cyclicaloffset by reductions in naturewater resources and was negatively impacted by the COVID-19 pandemic. Given forecasted increases in demand for copper and the reduced impact of the COVID-19 pandemic on mining operators, we expect this market to grow over the next few years.other emerging markets. Scarcities in water resources and the increasing need for water management gives us confidence that the water resources market will likewise grow and that we will be able to increase associated revenue accordingly. With the acquisition of KTA,recent and future acquisitions, we expect to experience continued growth from investment in renewable energy and energy transition.
For the three months ended June 30,March 31, 2022 and 2021, and 2020, public sector customers, defined as direct contracts with municipalities, public agencies, or governmental authorities, represented 14.0%10.1% and 17.4%14.1% of our gross contract revenue, respectively. This does not include work done indirectly on public sector projects. Gross contract revenue from projects for public sector clients are included in the end market most aligned with work performed.
Contract costs (exclusive of depreciation and amortization)
Total contract costs, exclusive of depreciation and amortization, increased $1.6$9.2 million or 9.6%56.8% to $18.2$25.4 million for the three months ended June 30, 2021,March 31, 2022, as compared to $16.6$16.2 million for the three months ended June 30, 2020. TotalMarch 31, 2021. For the three months ended March 31, 2022 and 2021, total contract costs represented 49.8%48.4% and 52.4%50.9% of total contract revenue, respectively. For the three months ended March 31, 2022 and 2021 total contract costs represented 53.3% and 56.0% of revenue attributable to our workforce, respectively (see Net Service Revenue).
Direct payroll costs increased $2.0$7.5 million or 16.5%56.8% to $14.1$20.7 million for the three months ended June 30, 2021,March 31, 2022, as compared to $12.1$13.2 million for the three months ended June 30, 2020.March 31, 2021. Direct payroll accounted for 77.7%81.3% of total contract costs for the three months ended June 30, 2021, an increaseMarch 31, 2022, a decrease of 5.20.5 percentage points as compared to 72.5%81.8% for the three months ended June 30, 2020.March 31, 2021.
Direct labor, the component of direct payroll costs associated with the cost of labor relating to work performed on contracts increased $1.3$5.4 million or 14.1%54.5% to $10.5$15.3 million for the three months ended June 30, 2021March 31, 2022 as compared $9.2$9.9 million for the three months ended June 30, 2020.March 31, 2021. The increase in direct labor is due to an increase in staffing to accommodate growth. For the three months ended June 30,March 31, 2022 and 2021, and 2020, direct payrolllabor costs represented 28.8%29.2% and 29.0%31.1% of gross contract revenue, respectively and represented 32.3%32.1% and 33.9%34.3% of the revenue attributable to our workforce, respectively.
Other direct payroll costs, the component of direct payroll costs associated with fringe and incentive compensation (cash and non-cash) increased by $0.7$1.9 million or 19.4%57.6% to $3.6$5.2 million as compared to $2.9$3.3 million. This increase includes $0.4a $0.5 million increase in employee payroll taxes and a $0.7 million increase in health benefits primarily due to the increase in overall labor. This increase includes $0.3 million in additional bonus accrual forincreased non-cash compensation expense as several new stock awards and event related bonuses were granted to employees in connection with our variable compensation program due to improved company metrics.initial public offering.
Sub-consultants and other direct expenses decreased $0.5increased $1.9 million or 10.9%65.5% to $4.1$4.8 million for the three months ended June 30, 2021March 31, 2022 as compared to $4.6$2.9 million for the three months ended June 30, 2020.March 31, 2021. For the three months ended JuneMarch 31, 20212022 and 2020,2021, sub-consultant and other expenses represented 11.1%9.1% and 14.4%9.2% of gross contract revenue, respectively. This decrease is not indicative of an anticipated long-term shift in the composition of our gross contract revenue, and we expect to experience periodic volatility in concentration of sub-consultant utilization.
Operating Expense
Total operating expense increased $6.3$11.0 million or 50.8%77.5% to $18.7$25.2 million for the three months ended June 30, 2021March 31, 2022 as compared to $12.4$14.2 million for the three months ended June 30, 2020.March 31, 2021.
Selling, general and administrative expenses increased $5.1$10.1 million or 42.1%79.5% to $17.2$22.8 million for the three months ended June 30, 2021,March 31, 2022, as compared to $12.1$12.7 million for the three months ended June 30, 2020.March 31, 2021. Indirect labor increased $1.2$2.8 million or 22.2%45.2% to $6.6$9.0 million as compared to $5.4$6.2 million and generalprimarily due to an increase in staffing to accommodate growth. General overhead increased $1.2$4.3 million or 26.7%102.4% to $5.7$8.5 million as compared to $4.5$4.2 million in part because ofdue to increased costs associated with operating as a public company and the overall growth of the company. During the three months ended June 30, 2021, in connection with our initial public offering,Non-cash stock compensation increased $1.8 million or 300.0% to $2.4 million as compared to $0.6 million as several new stock awards and event related bonuses were granted to employees. As a result, non-cash stock compensation increased $0.4 million or 57.1% to $1.1 million as compared to $0.7 million and other compensation increased $2.1 million to $2.4 million as compared to $0.3 million.employees in connection with our initial public offering.
Depreciation and amortization increased $1.2$1.0 million or 400.0%71.4% to $1.5$2.4 million for the three months ended March 31, 2022 as compared to $0.3$1.4 million as a result offor the conversionthree months ended March 31, 2021. This increase is primarily due to an increase in leased assets and intangible assets. We continue to increase the use of our equipmentcapital lease facility as we continue to grow. Intangible assets have increased due to multiple acquisitions throughout 2021 and vehicle operating leases to capital leases on September 30, 2020.into the first quarter of 2022. Gains on the sale of certain IT equipment and automobiles remained unchanged for the three months ended June 30, 2021March 31, 2022 at less than $0.1 million of gain on the disposal of such assets.
Other (Income) Expense
Other (income) expense decreasedincreased by $0.3 million to $0.2$0.5 million of expense for the three months ended June 30, 2021March 31, 2022 as compared to $0.1$0.2 million of income for the three months ended June 30, 2020. Income derived from incentives and rebates decreased byMarch 31, 2021. This increase is primarily attributable to an increase in interest expense of $0.1 million and interest expense increased by $0.1an increase of acquisition related expenses of $0.2 million.
Income Tax (Benefit) Expense (Benefit)
Income tax expense decreased $1.3 million to a $0.1 million benefit, or 108.3%, from $1.2 million of expense for the three months ended June 30, 2021, and 2020. ForMarch 31, 2022 decreased $0.4 million or 133.3% to $0.1 million benefit, as compared to $0.3 million expense for the three months ended June 30, 2020 we were a cash basis taxpayer, which affects the timing of the payment of tax but not the expense of tax.March 31, 2021. Our effective tax rate for the three months ended June 30, 2021 decreased by 35.51 percentage points to 6.21%March 31, 2022 was (8.8%) as compared to 41.72%28.0% for the three months ended June 30, 2020. This reduction in effective rate is primarily associated with the increase in non-cash stock expense as detailed above. Our effective rate contemplates an estimated $1.4 million research and development tax credit earned by the Company for work performed at risk.March 31, 2021.
Income (Loss) Before Tax and Net Income (Loss)
IncomeThere was no change in income before tax expense, decreased by $3.3which was $1.3 million or 117.9% to a $0.5 million loss for the three months ended June 30, 2021, as comparedMarch 31, 2022 and 2021. Net income increased by $0.5 million or 50.0% to $2.8$1.5 million in income for the three months ended June 30, 2020. Net income decreased by $2.0March 31, 2022, as compared to $1.0 million or 125.0% to a $0.4 million loss for the three months ended June 30, 2021, as compared to $1.6 million in income for the three months ended June 30, 2020. The decrease in net income is a result of transaction related expenses and expenses related to transitioning from a private to a public company, as described above.March 31, 2021.
Other financial information and Non-GAAP key performance indicators
Net service billing (non-GAAP)
Net service billing increased $5.3$18.8 million or 19.5%65.1% to $32.5$47.7 million for the three months ended June 30, 2021,March 31, 2022, as compared to $27.2$28.9 million for the three months ended June 30, 2020.March 31, 2021. Net service billing reconciles to gross contract revenue in thousands as follows:follows (in thousands):
|
| For the Three Months Ended June 30, |
|
| For the Three Months Ended March 31, |
|
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
|
| ||||
Gross revenue |
| $ | 36,524 |
|
| $ | 31,749 |
|
| $ | 52,461 |
|
| $ | 31,802 |
|
|
Less: sub-consultants and other direct expenses |
|
| 4,065 |
|
|
| 4,581 |
|
|
| 4,760 |
|
|
| 2,934 |
|
|
Net services billing |
| $ | 32,459 |
|
| $ | 27,168 |
|
| $ | 47,701 |
|
| $ | 28,868 |
|
|
Net service billing increased by 3.3as a percentage points to 88.9% of gross contract revenue did not change for the three months ended June 30, 2021,March 31, 2022, as compared to 85.6% for the three months ended June 30, 2020. This increase reflects a shift in contract mix and was positively affected by a net service billing to gross contract revenue ratio of 99.1% from acquired revenue.March 31, 2021.
Because sub-consultants and reimbursable expenses are most often pass-through items with little or no mark-up, they generally have a dilutive effect on gross, operating, and net margins while having little accretive effect on profitability. As such, where possible, we focus our resources and business development efforts principally on increasing revenue derived from our own workforce. Management primarily focusses its internal performance metrics on net service billing.
Adjusted EBITDA (non-GAAP)
Adjusted EBITDA decreased $0.9increased $3.3 million or 18.2%80.5% to $4.2$7.4 million for the three months ended June 30, 2021March 31, 2022 as compared to $5.1$4.1 million for the three months ended June 30, 2020.March 31, 2021. Adjusted EBITDA reconciles to net income in thousands as follows:follows (in thousands):
|
| For the Three Months Ended June 30, |
|
|
|
|
|
|
|
|
|
| For the Three Months Ended March 31, |
|
|
|
|
|
|
|
|
| |||||||||||
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| % Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
|
| % Change |
| |||||||||
Net Income |
| $ | (439 | ) |
| $ | 1,617 |
|
| $ | (2,056 | ) |
|
| (127.2 | %) |
| $ | 1,457 |
|
| $ | 981 |
|
| $ | 476 |
|
|
| 48.6 | % | |
+ interest expense |
|
| 215 |
|
|
| 100 |
|
|
| 115 |
|
|
| 115.0 | % |
|
| 334 |
|
|
| 219 |
|
|
| 115 |
|
|
| 52.7 | % | |
+ depreciation & amortization |
|
| 1,480 |
|
|
| 320 |
|
|
| 1,160 |
|
|
| 362.5 | % |
|
| 2,389 |
|
|
| 1,428 |
|
|
| 961 |
|
|
| 67.3 | % | |
+ tax expense |
|
| (69 | ) |
|
| 1,157 |
|
|
| (1,226 | ) |
|
| (106.0 | %) |
|
| (117 | ) |
|
| 309 |
|
|
| (426 | ) |
|
| (137.9 | %) | |
EBITDA |
| $ | 1,187 |
|
| $ | 3,194 |
|
| $ | (2,007 | ) |
|
| (62.8 | %) |
| $ | 4,063 |
|
| $ | 2,937 |
|
| $ | 1,126 |
|
|
| 38.4 | % | |
+ non-recurring operating lease rent |
|
| - |
|
|
| 842 |
|
|
| (842 | ) |
|
| (100.0 | %) | |||||||||||||||||
+ non-cash stock compensation |
|
| 1,558 |
|
|
| 1,079 |
|
|
| 479 |
|
|
| 44.4 | % |
|
| 3,236 |
|
|
| 1,149 |
|
|
| 2,087 |
|
|
| 181.6 | % | |
+ transaction related expenses |
|
| 1,440 |
|
|
| - |
|
|
| 1,440 |
|
|
| 100.0 | % | |||||||||||||||||
+ acquisition expenses |
|
| 105 |
|
|
| - |
|
|
| 105 |
|
|
| -100.0 | % | |||||||||||||||||
Adjusted EBITDA |
| $ | 4,185 |
|
| $ | 5,115 |
|
| $ | (930 | ) |
|
| (18.2 | %) |
| $ | 7,404 |
|
| $ | 4,086 |
|
| $ | 3,318 |
|
|
| 81.2 | % | |
Adjusted EBITDA margin, net |
|
| 12.9 | % |
|
| 18.8 | % |
|
|
|
|
|
|
|
|
|
| 15.5 | % |
|
| 14.2 | % |
|
|
|
|
|
|
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|
For the three months ended June 30,March 31, 2022 and 2021, and 2020, adjusted EBITDA includes $1.6add backs of $3.2 million and $1.1 million, respectively, relating to non-cash stock compensation expenses resulting from the vesting of restricted stock awards and $1.4 million from expenses associated with our initial public offering.awards. For the three months ended June 30, 2020,March 31, 2022, adjusted EBITDA includes $0.8$0.1 million relating to non-recurring lease expenses. On September 30, 2020, we refinanced our outstanding operating leases with Huntington Technology Finance and Enterprise Leasing to capital leases (see Credit Facilities and Other Financing herein). Accordingly, we increased our short- and long-term capital lease debt and eliminated all future rent expense relating to these operating leases. To present a meaningful representation of the impact of the new capital leasing structure on our consolidated financial results, and normalize the presentation of EBITDA, we added the non-recurring operating lease expenses to adjusted EBITDA for the three months ended June 30, 2020.acquisition expense.
Adjusted EBITDA Margin, net (non-GAAP)
Adjusted EBITDA Margin, net represents Adjusted EBITDA (as defined above) as a percentage of net service billing (as defined above). For the three months ended June 30,March 31, 2022 and 2021, and 2020, adjusted EBITDA Margin, net was 12.9%15.5% and 18.8%14.2% respectively. This decrease is in part the result of the income tax benefit (described above) during the three months ended June 30, 2021 and increased costs associated with operating as a public company.
Six months ended June 30, 2021 as compared to the six months ended June 30, 2020
Gross Contract Revenue
Gross contract revenue for the six months ended June 30, 2021 increased $7.9 million or 13.1% to $68.3 million as compared to $60.4 million for the six months ended June 30, 2020. For the six months ended June 30, 2021, gross contract revenue attributable to work performed by our workforce increased $9.4 million, or 18.1% to $61.3 million or 89.8% of gross contract revenue as compared to $51.9 million or 85.9% for the six months ended June 30, 2020 (see Net service billing – non-GAAP).
Changes in gross contract revenue (“GCR”) for the six months ended June 30, 2021, disaggregated between our core and emerging end markets, were as follows (in thousands other than percentages):
|
| For the Six Months Ended June 30, |
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| |||||||||||||
Consolidated Gross Contract Revenue |
| 2021 |
|
| %GCR |
|
| 2020 |
|
| %GCR |
|
| Change |
|
| % Change |
| ||||||
Communities, homes & buildings |
| $ | 46,224 |
|
|
| 67.7 | % |
| $ | 36,009 |
|
|
| 59.7 | % |
| $ | 10,215 |
|
|
| 28.4 | % |
Transportation |
|
| 8,295 |
|
|
| 12.1 | % |
|
| 10,287 |
|
|
| 17.0 | % |
|
| (1,992 | ) |
|
| (19.4 | %) |
Power & Utilities |
|
| 11,230 |
|
|
| 16.4 | % |
|
| 11,190 |
|
|
| 18.5 | % |
|
| 40 |
|
|
| 0.4 | % |
Other emerging markets 1 |
|
| 2,577 |
|
|
| 3.8 | % |
|
| 2,874 |
|
|
| 4.8 | % |
|
| (297 | ) |
|
| (10.3 | %) |
Total: |
| $ | 68,326 |
|
|
| 100.0 | % |
| $ | 60,360 |
|
|
| 100.0 | % |
| $ | 7,966 |
|
|
| 13.2 | % |
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Organic and Acquired Gross Contract Revenue |
| 2021 |
|
| %GCR |
|
| 2020 |
|
| %GCR |
|
| Change |
|
| % Change |
| ||||||
Organic |
| $ | 63,836 |
|
|
| 93.4 | % |
| $ | 60,360 |
|
|
| 100.0 | % |
| $ | 3,476 |
|
|
| 5.8 | % |
Acquired |
|
| 4,490 |
|
|
| 6.6 | % |
|
| - |
|
|
| 0.0 | % |
|
| 4,490 |
|
|
| 100.0 | % |
Total: |
| $ | 68,326 |
|
|
| 100.0 | % |
| $ | 60,360 |
|
|
| 100.0 | % |
| $ | 7,966 |
|
|
| 13.2 | % |
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1 represents renewable energy, mining, water resources and other |
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For the six months ended June 30, 2021, gross revenue from our communities, homes, and buildings (“CHB”) market increased $10.2 million as compared to the six months ended June 30, 2020. The increase is attributable to a $4.3 million increase from residential and mixed-use projects, and a $5.9 million increase from commercial, municipal and other projects. Gross revenue derived from the acquisition of KTA was almost exclusively attributable to commercial projects. As the U.S. economy recovers from the COVID-19 pandemic, we are experiencing continued expansion of demand for our CHB services. We continue to maintain a positive outlook on this market and expect it to represent most of our gross revenue for the remainder of 2021.
For the six months ended June 30, 2021, revenue from transportation decreased $2.0 million as compared to the six months ended June 30, 2020. A reduction of $1.2 million in gross revenue due to the completion of two large transportation projects in Texas and $1.2 million of reduced gross revenue between a large construction management assignment in Illinois and a right-of-way assignment in Virginia were offset by increases in gross revenue from other assignments in Florida, Illinois and West Virginia. During the six months ended June 30, 2021, we were awarded a three-year, $10 million task order contract from Cook County, Illinois relating to their Pavement Preservation and Rehabilitation program. We believe the transportation market continues to present significant opportunity for future growth and we remain committed to investing in leadership, technical expertise, and business development resources for this market.
For the six months ended June 30, 2021, revenue from power and utilities remained unchanged as compared to the six months ended June 30, 2020. The power and utilities market continues to experience increasing infrastructure investment as changing weather patterns, energy transition mandates and other safety initiatives positively impact demand for the services we provide. As evidenced by recent increases in program commitments within the gas pipeline market, we believe trends in power and utilities provide meaningful opportunity for continued growth and we are committed to investing resources accordingly.
Our emerging markets consist of renewable energy and energy efficiency, mining, water resources, and other natural resources services. For the six months ended June 30, 2021, revenue from emerging markets decreased $0.3 million as compared to the six months ended June 30, 2020. Decreases in emerging market revenue included $0.5 million in reduced gross revenue in our Arizona mining operations offset by a $0.3 million increase in gross revenue from water resources and $0.1 million from other emerging markets such as alternative energies. Our mining services have specialized in copper mining, the demand for which is cyclical in nature and was negatively impacted by the COVID-19 pandemic. Given forecasted increases in demand for copper and the reduced impact of the COVID-19 pandemic on mining operators, we expect this market to grow over the next few years. Scarcities in water resources and the increasing need for water management gives us confidence that the water resources market will likewise grow and that we will be able to increase associated revenue accordingly, With the acquisition of KTA and the addition of other key leadership, we expect to experience continued growth from investment in renewable energy and energy transition.
For the six months ended June 30, 2021 and 2020, public sector customers, defined as direct contracts with municipalities, public agencies or governmental authorities, represented 14.1% and 16.1% of our gross contract revenue, respectively. Gross contract revenue from projects for public sector clients are included in the end market most aligned with work performed.
Contract costs (exclusive of depreciation and amortization)
Total contract costs, exclusive of depreciation and amortization, increased $2.1 million or 6.5% to $34.3 million for the six months ended June 30, 2021, as compared to $32.2 million for the six months ended June 30, 2020. Total contract costs represented 50.3% and 53.3% of total contract revenue, respectively.
Direct payroll costs increased $3.6 million or 15.2% to $27.3 million for the six months ended June 30, 2021 as compared to $23.7 million for the six months ended June 30, 2020. Direct payroll accounted for 79.6% of total contract costs for the six months ended June 30, 2021, an increase of 5.9 percentage points as compared to 73.7% for the six months ended June 30, 2020.
Direct labor, the component of direct payroll costs associated with the cost of labor relating to work performed on contracts increased $1.8 million or 9.7% to $20.4 million for the six months ended June 30, 2021, as compared with $18.6 million for the six months ended June 30, 2020. For the six months ended June 30, 2021 and 2020, direct payroll costs represented 29.9% and 30.8% of gross contract revenue, respectively and represented 33.3% and 35.8% of the revenue attributable to our workforce, respectively.
Other direct payroll costs, the component of direct payroll costs associated with fringe and incentive compensation (cash and non-cash) increased by $1.9 million or 27.5% to $6.9 million as compared to $5.0 million. This increase includes an increase of $0.9 million in the cost of non-cash stock compensation to $1.0 million for the six months ended June 30, 2021, as compared to $0.1 million for the six months ended June 30, 2020. The increase in non-cash stock compensation is a combination of new stock awards granted during the six months ended June 30, 2021, and a reduction in the discount rates used to calculate the net present value of the repurchase liability for the six months ended June 30, 2020. This increase also includes $0.7 million in additional bonus accrual for our variable compensation program due to improved company metrics.
Sub-consultants and other direct expenses decreased $1.5 million or 17.6% to $7.0 million for the six months ended June 30, 2021 as compared to $8.5 million for the six months ended June 30, 2020. For the six months ended June 30, 2021 and 2020, sub-consultant and other expenses represented 10.2% and 14.0% of gross contract revenue, respectively. This decrease is not indicative of a long-term shift in the composition of our gross contract revenue, and we expect to experience periodic volatility in concentration of sub-consultant utilization.
Operating Expense
Total operating expense increased $8.0 million or 32.3% to $32.8 million for the six months ended June 30, 2021 as compared to $24.8 million for the six months ended June 30, 2020.
Selling, general and administrative expenses increased $5.8 million or 24.0% to $30.0 million for the six months ended June 30, 2021, as compared to $24.2 million for the six months ended June 30, 2020. Indirect labor increased $1.7 million to $12.7 million as compared to $11.0 million. During the six months ended June 30, 2021, in connection with our initial public offering, several new stock awards and event related bonuses were granted to employees. As a result, non-cash stock compensation increased $1.3 million or 325% to $1.7 million as compared to $0.4 million and other compensation increased $2.2 million to $2.7 million as compared to $0.5 million.
Depreciation and amortization increased $2.3 million or 383.3% to $2.9 million as compared to $0.6 million because of the conversion of our equipment and vehicle operating leases to capital leases on September 30, 2020. Gains on the sale of certain IT
equipment and automobiles remained unchanged for the six months ended June 30, 2021 at less than $0.1 million of gain on the disposal of such assets.
Other (Income) Expense
Other (income) expense changed by $0.5 million to $0.4 million of expense for the six months ended June 30, 2021 as compared to $0.1 million of income for the six months ended June 30, 2020. Income derived from incentives and rebates decreased by $0.2 million and interest expense increased by $0.2 million.
Income Tax Expense
Income tax expense decreased by $1.2 million, or 85.7%, to $0.2 million for the six months ended June 30, 2021, as compared to $1.4 million for the six months ended June 30, 2020. Our income tax expense includes an estimated $1.4 million research and development tax credit earned by the Company for work performed at risk. Effective upon the completion of our initial public offering our tax status converted from cash basis to accrual basis, retroactive to January 1, 2021. This affects the timing of the payment of tax but not the expense of tax. Our effective tax rate for the six months ended June 30, 2021 decreased by 10.68 percentage points to 30.70% as compared to 41.38% for the six months ended June 30, 2020. This reduction in effective rate is primarily associated with the increase in non-cash stock expense detailed above and the elimination of non-deductible expenses associated with the liability to shares subject to repurchase and redeemable common stock. Excluding discrete items, our effective rate for the six months ended June 30, 2021 was 6.21%.
Income Before Tax and Net Income
Income before tax expense decreased by $2.7 million or 77.1% to $0.8 million for the six months ended June 30, 2021 as compared to $3.5 million for the six months ended June 30, 2020. Net income decreased by $1.5 million or 75.0% to $0.5 million for the six months ended June 30, 2021 as compared to $2.0 million for the six months ended June 30, 2020. The decrease in net income is a result of transaction related expenses and expenses related to transitioning from a private to a public company during the six months ended June 30, 2021, as described above.
Other financial information and Non-GAAP key performance indicators
Net service billing (non-GAAP)
Net service billing increased $9.4 million or 18.1% to $61.3 million for the six months ended June 30, 2021 as compared to $51.9 million for the six months ended June 30, 2020. Net service billing reconciles to gross revenue in thousands as follows:
|
| For the Six Months Ended June 30, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Gross revenue |
| $ | 68,326 |
|
| $ | 60,360 |
|
Less: sub-consultants and other direct expenses |
|
| 6,999 |
|
|
| 8,459 |
|
Net services billing |
| $ | 61,327 |
|
| $ | 51,901 |
|
Net service billing increased by 3.8 percentage points to 89.8% of gross contract revenue for the six months ended June 30, 2021 as compared to 86.0% for the six months ended June 30, 2020. This increase reflects a shift in contract mix and was positively affected by a net service billing to gross contract revenue ratio of 98.7% from acquired revenue.
Adjusted EBITDA (non-GAAP)
Adjusted EBITDA increased $1.6 million or 23.0% to $8.3 million for the six months ended June 30, 2021 as compared to $6.7 million for the six months ended June 30, 2020. Adjusted EBITDA reconciles to net income in thousands as follows:
|
| For the Six Months Ended June 30, |
|
|
|
|
|
|
|
|
| |||||
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| % Change |
| ||||
Net Income |
| $ | 542 |
|
| $ | 2,043 |
|
| $ | (1,501 | ) |
|
| (73.5 | %) |
+ interest expense |
|
| 434 |
|
|
| 249 |
|
|
| 185 |
|
|
| 74.3 | % |
+ depreciation & amortization |
|
| 2,908 |
|
|
| 640 |
|
|
| 2,268 |
|
|
| 354.4 | % |
+ tax expense |
|
| 240 |
|
|
| 1,447 |
|
|
| (1,207 | ) |
|
| (83.4 | %) |
EBITDA |
| $ | 4,124 |
|
| $ | 4,379 |
|
| $ | (255 | ) |
|
| (5.8 | %) |
+ non-recurring operating lease rent |
|
| - |
|
|
| 1,789 |
|
|
| (1,789 | ) |
|
| (100.0 | %) |
+ non-cash stock compensation |
|
| 2,707 |
|
|
| 536 |
|
|
| 2,171 |
|
|
| 405.0 | % |
+ transaction related expenses |
|
| 1,440 |
|
|
| - |
|
|
| 1,440 |
|
|
| 100.0 | % |
Adjusted EBITDA |
| $ | 8,271 |
|
| $ | 6,704 |
|
| $ | 1,567 |
|
|
| 23.0 | % |
Adjusted EBITDA margin, net |
|
| 13.5 | % |
|
| 12.9 | % |
|
|
|
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|
For the six months ended June 30, 2021, and 2020, adjusted EBITDA includes $2.7 million and $0.5 million, respectively, relating to non-cash stock compensation expenses resulting from the vesting of restricted stock awards and $1.4 million from transaction bonuses. For the six months ended June 30, 2020, adjusted EBITDA includes $1.8 million relating to non-recurring lease expenses.
Adjusted EBITDA Margin, net (non-GAAP)
Adjusted EBITDA Margin, net represents Adjusted EBITDA (as defined above) as a percentage of net service billing (as defined above). For the six months ended June 30, 2021 and 2020, adjusted EBITDA Margin, net was 13.5% and 12.9% respectively.
Backlog (other key performance metrics)
Our backlog increased $7.5$6.0 million or 6.5%3.6% to $123.5$173.0 million during the three months ended June 30, 2021,March 31, 2022, as compared to $116.0 million at March 31, 2020 and $10.5 million or 9.3% for the six months ended June 30, 2021, as compared to $113.0$167.0 million at December 31, 2020.2021. At June 30, 2021March 31, 2022 and December 31, 20202021 our backlog was comprised as follows:
|
| June 30, 2021 |
|
| December 31, 2020 |
|
| March 31, 2022 |
|
| December 31, 2021 |
| ||||
Communities, homes & buildings |
|
| 50 | % |
|
| 43 | % | ||||||||
Building Infrastructure 1 |
|
| 65 | % |
|
| 62 | % | ||||||||
Transportation |
|
| 25 | % |
|
| 28 | % |
|
| 18 | % |
|
| 19 | % |
Power & Utilities |
|
| 21 | % |
|
| 25 | % |
|
| 15 | % |
|
| 16 | % |
Other emerging markets |
|
| 4 | % |
|
| 4 | % | ||||||||
Other Emerging Markets |
|
| 2 | % |
|
| 3 | % | ||||||||
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1 Formerly referred to as Communities, homes & buildings |
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Liquidity and Capital Resources
Our principal sources of liquidity are our cash and cash equivalents balances, cash flow from operations, borrowing capacity under our asset-based credit facility, lease financing and proceeds from stock sales. Our principal uses of cash are operating expenses, working capital requirements, capital expenditures, repayment of debt, and acquisition related payments. Prior to September 30, 2020,On March 31, 2022, we typically funded capital expenditures for vehicles, IT and design infrastructure, geomatics technology and field survey production equipment through operating lease facilities. On September 30, 2020, we refinancedmaintained a $17.0 million revolving credit facility with Bank of America, our primary lender. Under the terms of our credit facility, available cash in our primary operating leasesaccount sweeps against the outstanding balance every evening. Our cash on hand therefore generally consists of petty cash and other non-operating funds not included in the nightly sweep. Our cash on hand increased by $14.3 million at March 31, 2022 as compared to capital leases. Our two primary lease finance providers are Huntington Technology Finance and Enterprise Leasing.December 31, 2021. We regularly monitor our capital requirements and believe our sources of liquidity, including existing cash, cash flow from operations, existing cash and borrowing availability under our credit and lease facilities will be sufficient to fund our projected cash requirements and strategic initiatives for the next year.
We are actively pursuing acquisitions as part of our strategic growth initiative. At any given time, we are assessing multiple opportunities at varying stages of due diligence. These acquisition opportunities range in size, timing of closing, valuation and composition of consideration. In connection with acquisitions, we use a combination of cash, bank financing, seller financing, and equity to satisfy the purchase price. At this time, we have several acquisitions under consideration. There can be no assurance that any opportunity in the process of being reviewed will close but we expect over time to utilize a meaningful portion our current liquidity and capital resources for acquisitions.
Cash Flows
The following table summarizes our cash flows for the periods presented:
|
| For the Six Months Ended June 30, |
|
| For the Three Months Ended March 31, |
|
| ||||||||||
Consolidated Statement of Cash Flows (amounts in thousands) |
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
|
| ||||
Net cash provided by (used in) operating activities |
| $ | (472 | ) |
| $ | 8,323 |
| |||||||||
Net cash provided by (used in) investing activities |
|
| (1,570 | ) |
|
| (1,442 | ) | |||||||||
Net cash provided by (used in) financing activities |
|
| 40,201 |
|
|
| (6,167 | ) | |||||||||
Net cash provided by operating activities |
| $ | 2,414 |
|
| $ | 45 |
|
| ||||||||
Net cash used in investing activities |
|
| (370 | ) |
|
| (1,308 | ) |
| ||||||||
Net cash provided by financing activities |
|
| 12,275 |
|
|
| 1,196 |
|
| ||||||||
Change in cash, cash equivalents and restricted cash |
|
| 38,159 |
|
|
| 714 |
|
|
| 14,319 |
|
|
| (67 | ) |
|
Cash and cash equivalents, end of period |
|
| 38,545 |
|
|
| 1,223 |
|
|
| 34,938 |
|
|
| 319 |
|
|
Operating Activities
During the sixthree months ended June 30, 2021,March 31, 2022, net cash used inprovided by operating activities was $0.5$2.4 million, which primarily consisted of our $0.5$1.5 million net profit, adjusted for stock-based compensation expense of $2.7$3.2 million, and depreciation and amortization expense of $2.9 million, and a decrease in deferred taxes of $1.3$2.4 million, offset by a net cash outflow of $5.5$4.7 million from changes in operating assets and liabilities. The net outflow from changes in operating assets and liabilities was primarily due to a $9.4$6.9 million increase in accounts receivable resulting from increased billing to our clients and acquired accounts receivable, a $1.1$0.6 million increase in prepaid expenses primarily due to the purchase of fiduciary directors and officer’s insuranceother assets, and a $0.7$0.1 million net increase in contract assets and liabilities, partially offset by a $5.8$3.0 million increase in accounts payable and accrued expense.expenses.
During the sixthree months ended June 30, 2020,March 31, 2021, net cash provided by operating activities was $8.3 million,$45,000, which primarily consisted of our $2.0$1.0 million net profit, adjusted for stock-based compensation expense of $0.5$1.1 million, and depreciation and amortization of $0.6$1.4 million, andoffset by a net cash inflowoutflow of $4.4$3.6 million from changes in operating assets and liabilities. The net inflowoutflow from changes in operating assets and liabilities was primarily due to a $2.6$3.6 million increase in accounts receivable resulting from increased billing to our clients, and a $0.5 million increase in contract assets and liabilities, partially offset by $0.7 million increase in accounts payable and accrued expense, a $1.0 million increase in prepaid expense and a $0.7 million increase in contract assets and liabilities.expense.
Investing Activities
Net cash used in investing activities increaseddecreased by $0.2$0.9 million to $1.6$0.4 million for the sixthree months ended June 30, 2021March 31, 2022 as compared to $1.4$1.3 million for the sixthree months ended June 30, 2020.March 31, 2021. The increasedecrease in net cash used for investing is primarily attributable to the KTA acquisition inclusivea decrease in purchase of $0.6property and equipment of $0.2 million, and a decrease in advances to shareholders of $0.4 million, offset by a net cash paidinflow $0.3 million of fixed assets converted to the sellers in connection with the closing.lease financing.
Financing Activities
Net cash provided by financing activities during the sixthree months ended June 30, 2021March 31, 2022 was $40.2$12.3 million compared to net cash used in financing activities of $6.2$1.2 million for the sixthree months ended June 30, 2020,March 31, 2021, an increase of $46.4$11.1 million. The increase in net cash provided by financing is primarily attributable to net proceeds of $47.1$15.5 million from our initial publiccommon stock offering, net of underwriting discounts commissions and other offering costs, offset by $0.6$1.4 million of payments on capital leases, $1.1 million of payments under our notes payable and revolving line of credit and $1.00 million for the purchaserepurchase of treasury stock.shares.
Credit Facilities and Other Financing
On June 30, 2021,As March 31, 2022, we maintained a $17.0 million revolving credit facility (the “Revolving Line”) and three non-revolving credit facilities (“Fixed Line 1”, “Fixed Line 2” and “Facility 4”) pursuant to a credit agreement (the “Credit Agreement”) with Bank of America, our primary lender. Under the terms of the credit facility, available cash in our primary operating account sweeps against the outstanding balance every evening. As of June 30, 2021,March 31, 2022, we did not have a balance on this revolving line of creditRevolving Line as we used a portion of the net proceeds from our initial public offering to satisfy this obligation. On July 30, 2021, we entered into a Sixth Amendment to the Credit Agreement whereby the maturity date of the Revolving Line was extended to July 31, 2023. The Sixth Amendment eliminated the adjusted debt to EBITDA covenant along with certain administrative requirements and established the Secured Overnight Financing Rate (SOFR) as the replacement for LIBOR. Additional modifications to the Revolving Line included expanded allowances for acquisition and reduced interest rate spreads, among other things. Each of Fixed Line 1 and Fixed Line 2 has a maximum advance of $1.0 million and Facility 4 is a term loan with a principal amount of $1.0 million. For further information regarding our borrowings under our non-revolving credit facilities, see note 11, Bank Revolving Line of Credit and Fixed Credit Facilities. We must maintain, on a consolidated basis, certain financial covenants including fixed charge coverage ratio, debt to EBITDA and adjusted debt to EBITDA ratios. As of March 31, 2022, we were in compliance with all such covenants.
We have master lease facilities with Huntington Technology Finance and Enterprise Leasing. The Huntington Technology Finance lease facility finances our acquisition of IT infrastructure, geomatics and survey equipment, furniture and other long-lived assets. The Enterprise lease facility finances the acquisition of field trucks and other service vehicles. We maintain a fleet of approximately 200 vehicles at any given time. Both leasing facilities allow for both operating and capital leasing. We treat operating lease payments as rental expenses included in selling, general and administrative expenses and allocate capital lease payments between amortization and interest. On September 30, 2020, we converted our Huntington and Enterprise operating leases to capital leases and recorded the associated equipment purchases and capital lease liability, current and non-current. The payment terms on the
lease agreements range between 30 and 50 months with payments totaling approximately $0.4 million per month. We use the incremental borrowing rate on our revolving line of credit,Revolving Line, to calculate the present value on new leases.
Off-Balance Sheet Arrangements
We have no material off-balance sheet arrangements, no special purpose entities, and no activities that include non-exchange-traded contracts accounted for at fair value.
Critical Accounting Policies and Estimates
We use estimates in the determination of certain financial results. Estimates used in financial reporting utilize only information available to us at the time of formulation. These estimates are subject to change as new information becomes available.
There have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies relating to the use of estimates described in our Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our final prospectusAnnual Report on From 10-K filed with the SEC dated May 6, 2021.March 23, 2022.
Cautionary Statement about Forward-Looking Statements
Our disclosure and analysis in this Quarterly Report on Form 10-Q, contains forward-looking statements. Such forward-looking statements include those that express plans, anticipation, intent, contingencies, goals, targets or future development and/ or otherwise are not statements of historical fact. In some cases, you can identify forward-looking statements by terminology, such as “expects,” “anticipates,” “intends,” “estimates,” “plans,” “believes,” “seeks,” “may,” “should,” “could” or the negative of such terms or similar expressions. The absence of these words does not mean that a statement is not forward-looking. Accordingly, these statements involve estimates, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, our expectations regarding our recent and future acquisitions; our expectations regarding the impact of the acquisition of McMahon Associates, Inc. on our transportation revenue and revenue diversification; our beliefs regarding our building infrastructure services and the anticipated impact on our gross revenue for 2022; our intentions regarding our growth strategies and investment of resources, including the markets in which we intend to focus our growth initiatives; our expectations regarding trends and opportunities for future growth and expansion; our expectations regarding the use of our current liquidity and capital resources for acquisitions; and our belief that our sources of liquidity will be sufficient to fund our projected cash requirements and strategic initiatives for the next year. Any forward-looking statements are qualified in their entirety by reference to the factors discussed in the Risk Factors section of our Annual Report on Form 10-K and throughout this Quarterly Report on Form 10-Q.
These forward-looking statements are based on our current expectations and projections about future events and they are subject to risks and uncertainties known and unknown that could cause actual results and developments to differ materially from those expressed or implied in such statements. Important factors that could cause such differences include:
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• | any material outbreak or material escalation of |
• | changes in general domestic and international economic conditions such as inflation rates, interest rates, tax rates, higher labor and healthcare costs, recessions, and changing government policies, laws and regulations; |
• | the U.S. government and other governmental and quasi-governmental budgetary and funding approval process; |
• | the ongoing effects of the global COVID-19 pandemic; |
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• | competitive pressures and trends in our industry and our ability to |
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• | our ability to control, and operational issues pertaining to, business activities that we conduct with business partners and other third parties; |
• | our need to comply with a number of restrictive covenants and similar provisions |
• | significant influence by our |
• | the factors identified in our Annual Report on Form 10-K, including those discussed under the heading “Risk Factors”, and in our other filings with the SEC. |
Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except to the extent required by applicable laws or rules. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor of our business or to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of the information presented in this Quarterly Report on Form 10-Q, and particularly our forward-looking statements, by these cautionary statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company, as defined in Rule 12b-2 of the Securities and Exchange Act of 1934 (the “Exchange Act”), we are not required to provide the information required by this item.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
As of the end of the period covered by this Quarterly Report on Form 10-Q, our management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”).Act. Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by the Company in reports it files or submits under the Exchange Act is accumulated and communicated to management, recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(e) and 15d-15(e) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we are subject to various legal proceedings that arise in the normal course of our business activities. As of the date of this Quarterly Report on Form 10-Q, we are not party to any litigation, the outcome of which if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our results of operations or financial position.
Item 1A. Risk Factors
As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds – not yet updated
Recent Sales of Unregistered Securities
ThereDuring the three months ended March 31, 2022, we issued the following securities that were not registered under the Securities Act:
On February 2, 2022, we issued 9,833 shares of our common stock at $17.01 per share for a total of $0.2 million, as partial consideration for our acquisition of Perry Engineering, LLC. For a description of the acquisition, see note 4, Acquisitions, appearing in Part I of this Quarterly Report on Form 10-Q.
These shares were issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act. Accordingly, there were no salesunderwriters, underwriting discounts or commissions.
Issuer Purchase of unregistered equity securitiesEquity Securities
The following table summarizes the purchases of shares of our common stock made by us during the three months ended June 30, 2021.March 31, 2022 (in thousands, except share data and average price per share):
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01/1/22 - 01/31/22 |
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02/1/22 - 02/28/22 |
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We repurchased 46,065 shares of common stock which were tendered by employees to satisfy required tax withholding obligations arising from the vesting of restricted shares of common stock.
Use of Proceeds
On May 11, 2021, we closed our IPO, in which we sold 3,690,000 of our common stock at $14.00 per share resulting in net proceeds of $48.0 million after deducting underwriting discounts and commissions. The offer and sale of the shares in our IPO were registered under the Securities Act on Form S-1 (File No. 333-255076) which was declared effective by the SEC on May 6, 2021.
On June 4, 2021, the underwriters exercised their option to purchase an additional 115,925 shares of the Company’s common stock at the public offering price of $14.00 per share, resulting in additional gross proceeds of approximately $1.6 million. After giving effect to this partial exercise of the overallotment option, the total number of shares sold by Bowman in its initial public offering increased to 3,805,925 shares and gross proceeds increased to approximately $53.3 million. The exercise of the over-allotment option closed on June 8, 2021, at which time the Company received net proceeds of approximately $1.5 million after underwriting discounts and commissions.
We utilized a portion of our net proceeds to satisfy our obligation under our revolving line of credit, and to pay expenses associated with the offering. We expect to useoffering, for the remaining net proceedsfunding of acquisitions and for general corporate purposes, including organic expansion and the funding of potential acquisitions.expansion.
Issuer Purchase of Equity Securities
The following table summarizes the purchases of shares of our common stock made by us during the three months ended June 30, 2021 (in thousands, except share data and average price per share):
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We repurchased 670 shares of common stock which were tendered by employees to satisfy required tax withholding obligations arising from the vesting of restricted shares of common stock. In satisfaction of our obligations upon exercise of outstanding put options we repurchased 1,800 shares of our common stock. There are no remaining put options outstanding.
Item 3. Defaults Upon Senior Securities.
None
Item 4. Mine Safety Disclosures.
None
Item 5. Other Information.
None
Item 6. Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
Exhibit Number |
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31.1* |
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31.2* |
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32.1*+ |
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32.2*+ |
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101: |
| XBRL. |
101.INS |
| Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document |
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
| Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 |
| Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* | Filed herewith. |
*+ | This certificate is being furnished solely to accompany the report pursuant to 18 U.S.C. 1350 and is not being “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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| BOWMAN CONSULTING GROUP LTD. | |
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Date: |
| By: | /s/ Gary Bowman |
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| Gary Bowman |
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| President, CEO and Chairman (Principal Executive Officer) |
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Date: |
| By: | /s/ Bruce Labovitz |
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| Bruce Labovitz |
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| Chief Financial Officer (Principal Financial Officer) |
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