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Bowman Consulting (BWMN)

Participants
Gary Bowman Chairman and CEO
Bruce Labovitz CFO
Brent Thielman D.A. Davidson
Alex Rygiel B. Riley Financial
Call transcript
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Operator

Good morning. My name is Candice, and I will be the conference operator today. At this time, I would like to welcome everyone to the Bowman Consulting Group First Quarter 2022 Conference Call. [Operator Instructions] Thank you. Please note, many of the comments made today are considered forward-looking statements under federal security law.

those company's numerous the could publicly risks results differ the are these cause update in company to to the forward-looking subject and from or described revise filings obligated statements. SEC, with statements future is these As not and to expressed, uncertainties that

adjusted the service net billing. In call discuss non-GAAP and company addition, on financial EBITDA certain will today's information such as

for the press the communications, call reconciliations be company's information, the You call and to now remarks most remarks. management will Mr. in be call can available together there questions on but published will webcast your find the the Bowman, the prepared GAAP you attendees live subsequent earnings this deliver or taking they the direct company's at from attendees. on with answer the the filed research with Q&A questioned company's the will investor be release information on X-K comparable prepared and pose Throughout to no will www.investors.sbowman.com. of analysts. which from begin website. live Replays webcast the SEC after investor may website may Management

Gary Bowman

Call. Bowman and this Candice, to you, welcome Officer. XXXX Bowman, Financial Bruce Labovitz, Group’s by CEO morning Gary the and Quarter First Earnings of Thank Bowman. here I'm Chairman Consulting joined our Chief

doing going and we're the forward excited to business We're completed, team have addition as together. great be committed welcome McMahon to to to this the to Associates, is addition talented is as practice transaction looking from Bowman. well want everyone we get be started, The our to for I transportation work we're Before our most recent professionals transformative really to overall. going of and

into XXXX revenue adjusted [indiscernible] The picked record continues second for left And results where quarter. sales generating on EBITDA. the and the momentum the up first XXXX QX off of quarter

net million new we of every record produced one orders, booked conditions, The XXX Despite raise, gross on growth. the our over $XX revenue. and and across the of in equity a XX% world first served we During driven rate the Net million net we markets period. closed the quarter, $XX was of growth an quarter for over growth see over organic challenging that quarter multiple business. for with continue increased we service profitable XX% opportunities billing to by

with with we that the During the we we of in Tucson. When continued IPO. acquisitions eight quarter, made Perry seven integration closed on post Engineering an

legacy work-sharing acquisition that our closed culture last meaningful results. operations collaborative Continuing revenue quarter synergies engineering which to is transportation acquisitions generated to date. our the cross-selling largest positively execute Associates, impacted firm, of the and purchase week Our and between on on McMahon we our our strategy, growth

by nearly continues transaction acquisition study synergy on power first just restaurant clients. financial under X.X%, this the and in alone revenue Within assignment of at concentrated emerging a over a full through infrastructure the this already our we've engagement one week, followed first revenue of $X market The one Gross at by long-standing impact essentially term. a Bowman's from at new with traffic multiple to quarter reduces million XX% in realized quick the transportation utilities service of X%. XX.X%, building at markets be

by been revenue way of illustration first number a the would larger of about been sake the our transportation, of business have if on XX% For infrastructure. had toward XX%. meaningful would've and or January, diversification remains building of It acquisitions. basis, demand gross transaction pro-forma of occurred steps our of

closely equal QX, by and grew XXXX During $XX residential or contracts. in million, nearly same sector nearly commercial growth followed infrastructure XX%, public by building the period over between with

serve for centers residential industrial inventory project demand restaurants quick power like projects revenue. long-term represent HQX customer along builders. to high remaining The dependable represent the favor. Quick in other of Amazon with a in with commercial and for restaurant increases continue ever Virginia in facility and serve and source development We Arlington our see as bill-to-rent revenue, industrial home repeat healthy work while pricing it's reliable data been engagements is as creation

building [indiscernible] and activity proposals. slowdown proven have not projects so tightly at be transitional Our far Transportation's clients Bowman. request correlated moment we've experienced a rate movements. any for in to to interest clearly infrastructure on not And or

acquisition bill were confident this slightly more year. this over the later down the to the increasingly While of and component and we the reverse quarter and quickly the will over McMahon infrastructure will trend and spending our transportation course, upcoming between this year, a begin meaningful next year last the expect next, become revenue

for the to on in that of years. recurring that I-XXX Mile the management was on projects I'll Expansion our recently The by gearing report happy continue revenue call. project Roadway Cook for Bridge off be up work on I-XX Tri-State and negotiating the several I'm and Avenue San Tollway Antonio meaningful update conference central starting generate earnest Bowman Illinois will in project upcoming quarter. Northeast revenue Long County construction the recurring Our this Project We're you the next to long-term contract. the project. selected next is

electric pressure storage. Spending generally independent infrastructure resilience continues integrated to generation, spend part relationship a with market. in continue unrelenting XX% recently looking technologies clients replacing with increase on Southwest long-term contract in through engineering line and Energy. awarded of year to is and our spending and undergrounding such conditions. over battery on our continuing build over macroeconomic renewal we're year invest and with last. vehicles, this this and power utility to these gas on increased WEC long-term And us year. aging power longstanding as our distributed substantially increase due are initiatives utility large and Most on Our reliability, their to to grow of focused utilities and Gas, We US The projects. work to in grid we face

throughout has the renewables-related projects the year resources to led and by growing in and resources. quarter. Northeast first to array far the through was Our energy renewables XXXX services increase mining been focus organic, projects the a and continues that a wide in In and so engineering us. acquisition huge mining, revenue number over of by emerging water markets, market, West. revenue energy battery we renewable including wind growth and integration solar in to year Growth the in a effort services and be X% later by for Mid-Atlantic and in storage accelerate Midwest beyond. This grew Acquisition energy of but expect water followed

thus both integration to social [indiscernible] a to the acquisition has been doing and added team dedicated first the job And aspects the as the firm's year add integration, over including and companies of XX%. talent integrated XX% is our of Our a team company. tactical beyond workforces. rate employees we've through has XXX close gained with our nearly staff public from we been recruiting great Above dedicated far to the our able the retention acquisitions, acquired in

our our improve from recruiting along as revenue substantial and on a important, post-closing compression integration and of those transaction number from successes, of focused resulting revenue gets team everybody synergies our we're successes Between immediately utilization benefiting Just synergies, lines. effective multiples. already we've

XX ever be and above robust as what is as Our million outlook size transaction annualized and expect it's to for deal our M&A our well continues in McMahon pipeline diverse in been we to bullish. strategic activity continued average be revenue At XXXX. remains

currently said, average we larger we've We're revenue be low deals expect the last than the to in significantly range. As many year. digit shopping double

for priced range Xx deals focusing be EBITDA any the -- on to real McMahon, multiple revenue of by a inflationary at X.X that. below our without not and in and to favor is exposure. increasing. example, demand by in [indiscernible]. of our Across growth year to our and Despite as material remain in design continue were was remains our engineering times services services only over valued with our evidenced raising accordingly. outlook and our power back supply year evidenced markets, growth is consideration real meaningfully an in directly proposition constraints for supply our strong We're costs. X XXXX given affected new not multiple only clients acquisitions We're markets, deal we majority The our above directly our bullish disruptions our to We their growth And affected and labor occasional by synergies. and shareholders. for as adjusted Pricing outlook certain likewise continued the our labor as chain overwhelming to upside and revenue as and today. growth close, increase prospects continue for and outpacing by remain equity revenue we'll demand headwinds

quarter to our over results going Bruce I’m to call turn in discuss Now to first greater detail. the

Bruce Labovitz

Terrific. Thanks, Gary.

we've anniversary one-year completed from a was of extremely -- and say a RPO. was proud mentioned, navigated the quarter public as year company. the of were of of to week Gary quarter As Last Bowman. the you successfully the transition mentioned to that private QX, year record we still I'm Last first. setting pricing first private

that oranges. to still to comparisons which apples periods quarter that So, bit include quarter a and are

first the quarter compared million net -- X.X million increased and revenue organic $XX.X first million XX.X XX% XX.X%. $XX.X million was nearly in XX.X revenue and over million first on to growth non-GAAP quarter service revenue, the $X.X organic was acquired $XX as net quarter for or year. compared from million $XX gross Gross XX.X organic to was was quarter million QX refer a nearly in revenue. from increase to the remaining from million acquisition, rate which gross increase, XXXX, XX% metric, the last the a revenue, XX% rate As XX. first Net representing was the or year. year to for XX $XX.X we organic margin Of million million a representing million. for increased nearly $XX the growth Of XX.X%, to revenue, million

business, gross over first XX.X% As but QX of non-cash QX is was a improved utilization, of pricing margin year compared revenue stock the for of expense, bit QX in comp function of compared quarter gross lower power. to last XXXX XXXX. and XX.X% also a of to SG&A mix in principally improvement XX.X%

and comparison this I being meaningful, last time -- not trending lower that year, private did public, percent to year is As QX of whole. mentioned last costs of had the as What since of expenses. not and stock year necessarily is since is comp last have we notable the non-cash still we last a is this relative SG&A were and gross earlier, as any revenue down a

revenue, on net. to to quarter to be up focused tax as reducing of gross expenses margin adds of XX% Adjusted the revenue continue EBITDA relatively first flat fall quarter growth of SG&A QX over with adjustments is scale. XX% to points net first we up before an of profit build to X.X XXXX. metric, Adjusted We percentage was rate Net income over relative million EBITDA increase X.X representing the and expect a to non-reoccurring over year non-GAAP SG&A is year and as to EBITDA year a the non-cash XXXX continue percentage adjusted percent for This a $X.X which million. EBITDA. points for full XX.X% is X.X

the XX, stock shares included all March shares that in of X.X number. outstanding, and includes offering in of secondary roughly which approximately As issued XX.X restricted company million the shares the had million unvested

today, the the shares as shares McMahon of issued stock March million outstanding, restricted shares company acquisition $X XX.X As in now included XX. and approximately of with which unvested has of million roughly connection includes

EBITDA approximately adjusted of and million. be was working $X $XX on our deployable $XX accounting sheet of was capital to to adjusted growth million leaves million. Our needs. times. recently after roughly cash of And line $XX for ratio to to million for net have us negative That the of $XX with debt total for of We approved tune was which zero on outstanding upwards balance currently approximately million X.X cash, increased our with our capital debt BofA,

have we March million, to our the sufficient program. up at term end. Gross near believe for was M&A we XX on from backlog liquidity such, million $XXX year As continue XXX

transportation, Building turn Pro-forma the XXX XX% XX%, backlog. power markets. McMahon would've addition million, Backlog for to and been XX and affected roughly backlog represented roughly that during utilities, infrastructure, next would other transportation our emerging XX% months. XX% approximately X% building of roughly or January expect infrastructure have X, was XX%. XX% the of We of

This ago, increasing As mid-March. of adds and EBITDA net weeks outline McMahon line in or outlook million to in our million of million. guidance XXX release, with little $XX the no $XXX just few we're we to million back top-line guidance indicated increasing for and change issued to top adjusted to to impact a revenue bottom to our yesterday's the $XX

only guidance be acquisitions the It results not does guidance. will distributed close we suggest likewise, evenly this we and year contemplate acquisitions As not at the is our includes to policy, it, throughout issue closed this the the time expect does year. additional

closed, update subsequent As we new guidance our are will calls. conference acquisitions the accordingly on quarterly

Before International Investor to like I'd I in call back that Conference Securities this B the we to Reilly month be California. at Gary, will turn mention the later

If please Gary the and to you're the now already I'll remarks conference call planning back for concluding attend one-on-one. meet not over with so, Q&A. you've turn to time a to schedule done and us

Gary Bowman

to diligently the deliver Bowman. to here the for every of the Thanks, part ever, delivering today And board work happy succeed. join our I professionals want day upcoming to year. been Bruce. service over of return his and inspires Vicks to past to shareholders. investors many morning, working on want to we more us to have a continue Raymond thank Ownership's announced between This fantastic at than employees us of for addition our thank Thanks. of discipline Ray We quarter. our directors. to very that the journey. I'm here board alignment culture and fantastic includes our and to the growth all always everybody of interest I

the now So over operator, it turn to back for up questions. it open

Operator

question Brent Davidson. the of line Thielman D.A. [Operator Instructions] of First comes from

Brent Thielman

really Anything an question, specific strong this strong start the year I or here. programs might aware first have mean, impact that to to My quarter, contracts. had unusually be

if guidance, I a the me that little above slower quarter frankly, gets to your bit As a of seasonally midpoint that. where, to annualize,

So, be I I we in moving the should sure quarter to the the and for pieces want be all rest of just about what year. understand thinking the

Bruce Labovitz

in one client that contractor, Brent, a one of there culmination and the was the strong that for quarter lot a up a And hard particular strong. acquisition of the portfolio quarter particular very any event quarter. of development It's really makes there’s balanced one business us. work particular just or isn't really revenue strategy. It a made

thing So there. anomalous that's, we positively… that's positive that that a impacted one it think isn't There

Gary Bowman

I’ll just sustainable any that over. big a reinforced all rocks couple that, Brent, but… spread not rock, it are There's is not big

Bruce Labovitz

winter it work. in less affected we diversified, if on was outdoor we We winter impacted seasonably by, were terribly not markets mild, weather of lot become, Yes. become as and have generally, somewhat a a more our geographically mild by weather more

Brent Thielman

Okay.

gross workflows all How all next was do that out Okay. question kind Fair the enough. And fuel are of as you to then seem be sort monitoring cost backlog? seen the capturing they're contracts. you fine, sort see the into just feel how And new new on, stuff of labor, then, the of that we've margins appropriately we business? increases there: the

Gary Bowman

-- anticipated have it I we morning. that Brent, thinking in And about this

their customers and board, their and fuel, we're seller our hundreds probably them, of agents and doers, coaching materials, them, We price out have through counsel because. and and, their there, across our coach really we them, pricing we the all folks in are listen we increases experiencing labor,

of having up. of pressure price is going a to increase our lot We our labor are labor

our So, to they’re not needing -- resistance and increase folks pricing. are

Our customers are expecting it.

the are they're folks to there. we our happening to for out inflationary new our in to and And the up So were marketplace. everybody. able get environment's This receptive what's pricing coaching

component in that a to mentioned -- Another of basis. —is not fuel a regular large just think, point Brent, particular, on costs significantly since you out our

here cost expense vehicles it the out that from inside point labor. out, vast necessarily labor from is fuel that are but an comes and is driven, produce survey office We the revenue have particularly and that a we isn't our view, fleet our of of the done do majority they work that work, of of

Brent Thielman

Yes.

Okay. that McMahon like of business? large mean, the, Why especially why transaction Gary, what to I kind right you? associates? Fair And enough. the the for about was expand transportation this you did

Gary Bowman

stretch. there Great receptive long really but culture, which the our similar time and was a culture. the strategy question. DOT, ownership growing it have They -- liked it bite-sized, They geographically and leadership with It that was lots own bit strong it’s was a taking very really of congruent of correct -- do It's have certainly our and us transportation has us. work great some been than to for a for stockholders design our the appropriate step they with us little practice more [indiscernible]. the we it's size clients with really next along growing to comfortable but We some Florida clients. size, do, complimentary culture

lots a there's factors of made So great us. for them fit

they've we way as organized. the business Our were products say size to first a very information organization, professional. quick, the Also they've accurate, the The provide to the of to diverse in was diligence, started really was us market. of —as able they grown big due do from grown, increase that

of we they size. in had we And had grew the so, a their way ways built as lot built through

compliment it there. was them saw work easy heaven, manna —we to easy so, it it we was like, traffic of of days kind advance. of And that study deal in. It understand an confirmed very because easy clients to be within it to was this one folks all was back-office who their first Hey, one about. from really an what And It's do wow, the and our would it's from had really, we but the deal all literally X-figure that's this closed longstanding plug immediately. few

Brent Thielman

more the for you to what targets it deal, I and some little this That's integration but last bigger like Considering over. turn you larger a great. I'll there's assume just Maybe it, do. a one to is have obviously

just term short flow and here about rest I back in we do focus on take the revenue, on you of year. the terms through this acquired think deal year maybe of integration, might the here how think the step a

Gary Bowman

robust built very to we we've team going integration dedicated have continue integration come team. to a They're

deals coming to machine so, a integration And a, built we've going McMahon team to slow here. got bring in fact, us is bandwidth. we've it's team, to got down. to got will, not to integrate continue got I going McMahon. the do into keep the the integrate we've lot the long of we, on we've, And It's we've integrate strong and the haul we've a got bandwidth, to will listing and to them McMahon. yes, But be

Operator

next Your line Rygiel from question of Financial. of B. comes the Alex Riley

Alex Rygiel

quick Couple questions.

end past in you other and the that about see the mining, markets of activity about the talk renewables. work as infrastructure, other you there some in talked water, the You've quarter some power horizon? Can such on and the pipeline

Bruce Labovitz

are quarter, in so Yes, of still, business. the of of mining. over growth of represent good parts and our strong the water a of today. renewables a collective, activity the definitely again, sort those in little than bit smaller a less as they resources in We But decline revenue saw course X%

focus a they our that think into move think activity. I in percentage as are size pipeline, I term of short competing X the are, the M&A other don't of more them knowing the anything they would primary. necessarily a that

Gary Bowman

of little a expand I'll what saying. this is bit

hits just successes although under any organic are of not acquisitions, of radar but renewables. we've renewables focus, that and own a really started super on kind lighting just we've up candidly my successes, my growth Our And radar, had it focus. some had is under

at paradigm growing on can So on on acquisition, the paradigm meaningful We've practice. to several smaller, our the infrastructure trying commitment been acquisitions. but really going mining play, And our is be compromising. years organically business Arizona with the market. infrastructure front, and looking expand bill. really some include, continue say, We're expanding our we're to an mining on that. [indiscernible] And expanding XX we're growing so relatively to by mining to our with to I'll the is to market that. fire going in infrastructure slash is to That our renewables continue is focus serve highway And to in aggregates

Alex Rygiel

to labor you to react And margin and and profile talk inflation can keep along can how quickly inflation to be you particular, then your speaking, more pass obviously about fairly that consistent. in risk that able and broadly

Gary Bowman

morning, like anticipating so anticipating I professional And great Paul is a far, told that the morning of like my was at look was way that so chairman Alex. And I Volker career -- this question, when it's Brent Yes, I fed. and I the this started good.

are think in have experienced professionals. none of So, who really none the inflation of I today professional us, us world as

feel from sides. our way all we our it. far, So, a price that clients getting we hit from through they're from before, bit so hit little are said all kind They're I us. this of increases are finding expecting getting

So, the They're coaching it's out. appropriately it. they resistant push pushing say, it. do like our that about to learning And They're being it. them is going And folks to the receptive they're, that, that are new not that we're to for pricing. they're aggressive to market

So, it's to kind of new everybody.

labor. are that finding be up able keep to able of demands So, to cost we increase we our with the our the to to increase are pricing of demands

So we said, it. good, continue way far like through so to feel our

And business real of kind in are, of optimist no able going through meaningful that old don't X time of lot kinds of so that to our to have are on enough of for rates to work mean, the have locked we pricing do. that a have ago that I term not, the somewhat these part set are we're, of benefit and we're confident right contracts the we We out in, environment continue we're the that contracts are a don't we that it, be that of Yes. right? money Is escalators not years and we we labor, in. navigate and are now. and any we're

Alex Rygiel

And how that forward? talk can think structure sort you you then, interest about and as your rising about to moving of Bruce, it capital relates rates

Bruce Labovitz

Right.

don't for necessarily capital have of component a a necessarily not it really next, changing future, necessarily we be in consuming a near of we do, on Interest today we capital amount here. carries we're consuming of lot lot where that will aren't to our a rates. lock think but the We carry large fairly debt imminently. grow, Interest So a leverage. to today, need we're what period low rates as of looking we that in

So, be a I of when highly We'll long movements sort when deal rate think going of need just with cost rate capital. more movements to we us. for are we term of get playing to rates drag structure to on not address to capital be But Does looking going I we're a leveraged be, that don't here. the ever going think it’s what that negative it's for? huge so you're

Operator

We Thielman up a Davidson. from now Brent have of follow D.A

Brent Thielman

Just that thoughts particularly one on just this flows quarter. how rest was more the flow on cash through solid the Bruce Maybe your of the year.

Bruce Labovitz

Yes, that Again, We earlier we're cash investment stride believe this we've reaching I certainly cash year, but impact we be generates activity flow, to the we're, see still think We of cash. a going be things necessarily. that of, there. is is activity time here our it won't we for probably operating strong. generating consume and of one and growth done the over the the financing

for flow expect business? of for can investment going in can had sort into at our how a forward. the additional to We're growth this interest for do flow and free the this, trajectory looking that rates see solid growth. turn so we pretty But think cash be that we kind we start used affecting back of, healthy adjusted rates generating cash of cash And to EBITDA question quarter Alex's I more

Operator

turn time. over Bowman, the questions further at Mr. I conference to no back you. this are call There

Gary Bowman

work employees investors Thanks, everyone. operator. for put hard thanks, all Bowman and Candice. for thoughtful for and call on this you thanks the value to the in here. misplaced That's appreciate being up Thanks it questions us. wrap the the and, morning. faith the hard not Brent all you Alex, And it's and for We'll and in listening it. morning, Good everybody everybody and you, work Thank for all build

Operator

concludes now call. today's That conference

may now a You Have great day. your disconnect line.