Bowman Consulting Group Ltd. (NASDAQ:BWMN) Q2 2022 Earnings Conference Call August 12, 2022 9:00 AM ET Company Participants Gary Bowman - Chairman and Chief Executive Officer Bruce Labovitz - Chief Financial Officer Conference Call Participants Brent Thielman - D.A. Davidson & Co. Alexander Rygiel - B. Riley Securities, Inc. Operator Good morning. My name is Lydia and I will be your conference operator today. At this time, I'd like to welcome everyone to the Bowman Consulting Group Second Quarter 2022 Confe ...

Bowman Delivering innovative engineering solutions owma Bowman Consulting Group Ltd. Q2 2022 Earnings Call | August 12, 2022 | Nasdaq: BWMN BUILDING INFRASTRUCTURE TRANSPORTATION POWER & UTILITIES ENERGY WATER RESOURCES Disclaimer Please note that many of the comments made today are considered forward-looking statements under federal securities laws. As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ from those ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%2E%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201%2E%20Financial%20Statements%20%28Unaudited%29) This section presents Bowman Consulting Group Ltd.'s unaudited condensed consolidated financial statements and detailed notes for H1 2022 and FY 2021 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (Amounts in thousands) | Metric | June 30, 2022 (Unaudited) | December 31, 2021 | | :---------------------- | :------------------------ | :---------------- | | **ASSETS** | | | | Total current assets | $105,121 | $74,409 | | Total Assets | $184,506 | $138,170 | | **LIABILITIES & EQUITY**| | | | Total current liabilities | $48,224 | $32,854 | | Total liabilities | $76,062 | $59,757 | | Total shareholders' equity| $108,444 | $78,413 | | TOTAL LIABILITIES AND EQUITY| $184,506 | $138,170 | - Total assets increased by **$46.3 million (33.6%)** from December 31, 2021, to June 30, 2022, primarily driven by increases in current assets (cash, accounts receivable, contract assets) and non-current assets (goodwill, other intangible assets)[8](index=8&type=chunk) - Total liabilities increased by **$16.3 million (27.3%)** over the same period, with current liabilities seeing a significant rise. Shareholders' equity also increased by **$30.0 million (38.3%)**[8](index=8&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Income Statements (Amounts in thousands except per share data) | Metric (3 Months Ended June 30) | 2022 | 2021 | Change ($) | Change (%) | | :------------------------------ | :-------- | :-------- | :--------- | :--------- | | Gross Contract Revenue | $62,399 | $36,524 | $25,875 | 70.8% | | Total contract costs | $31,054 | $18,188 | $12,866 | 70.7% | | Total operating expenses | $30,861 | $18,657 | $12,204 | 65.4% | | Income (loss) from operations | $484 | $(321) | $805 | 250.8% | | Net income (loss) | $(320) | $(439) | $119 | 27.1% | | Basic EPS | $(0.03) | $(0.06) | $0.03 | 50.0% | | Diluted EPS | $(0.03) | $(0.06) | $0.03 | 50.0% | | Metric (6 Months Ended June 30) | 2022 | 2021 | Change ($) | Change (%) | | :------------------------------ | :-------- | :-------- | :--------- | :--------- | | Gross Contract Revenue | $114,860 | $68,326 | $46,534 | 68.1% | | Total contract costs | $56,489 | $34,344 | $22,145 | 64.5% | | Total operating expenses | $56,049 | $32,808 | $23,241 | 70.8% | | Income (loss) from operations | $2,322 | $1,174 | $1,148 | 97.8% | | Net income (loss) | $1,137 | $542 | $595 | 109.8% | | Basic EPS | $0.09 | $0.07 | $0.02 | 28.6% | | Diluted EPS | $0.09 | $0.07 | $0.02 | 28.6% | [Condensed Consolidated Statements of Shareholders' Equity (Deficit)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity%20%28Deficit%29) - Total shareholders' equity increased from **$78,413 thousand** at January 1, 2022, to **$108,444 thousand** at June 30, 2022, primarily due to proceeds from common stock offerings (**$15,475 thousand**), issuance of new common shares (**$8,115 thousand**), stock-based compensation (**$7,025 thousand**), and net income (**$1,137 thousand**)[13](index=13&type=chunk) - Treasury stock purchases amounted to **$(2,369) thousand** for the six months ended June 30, 2022[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (Amounts in thousands) | Cash Flow Activity (Six Months Ended June 30) | 2022 | 2021 | Change ($) | | :-------------------------------------------- | :-------- | :-------- | :--------- | | Net cash provided by (used in) operating activities | $4,268 | $(472) | $4,740 | | Net cash used in investing activities | $(8,099) | $(1,570) | $(6,529) | | Net cash provided by financing activities | $8,995 | $40,201 | $(31,206) | | Net increase (decrease) in cash and cash equivalents | $5,164 | $38,159 | $(32,995) | | Cash and cash equivalents, end of period | $25,783 | $38,545 | $(12,762) | - Operating activities generated **$4.3 million** in cash in H1 2022, a significant improvement from a **$0.5 million** usage in H1 2021, primarily due to higher net income and non-cash adjustments[17](index=17&type=chunk)[224](index=224&type=chunk) - Investing activities used substantially more cash in H1 2022 (**$8.1 million** vs. **$1.6 million** in H1 2021), mainly due to increased business acquisitions[17](index=17&type=chunk)[226](index=226&type=chunk) - Financing activities provided **$9.0 million** in H1 2022, a sharp decrease from **$40.2 million** in H1 2021, primarily reflecting the timing of common stock offerings (IPO in H1 2021 vs. follow-on offering in H1 2022)[17](index=17&type=chunk)[227](index=227&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Nature of Business and Basis of Presentation](index=9&type=section&id=1%2E%20Nature%20of%20Business%20and%20Basis%20of%20Presentation) - Bowman Consulting Group Ltd. is a professional services firm providing planning, design, engineering, geomatics, survey, construction management, environmental consulting, and land procurement services to customers in the built environment[23](index=23&type=chunk) - The Company completed a common stock offering in February 2022, issuing **1,057,500 shares** at **$16.00 per share**, generating total gross proceeds of approximately **$16.9 million**[25](index=25&type=chunk)[26](index=26&type=chunk) [2. Significant Accounting Policies](index=10&type=section&id=2%2E%20Significant%20Accounting%20Policies) - The Company operates as an 'Emerging Growth Company' and has elected to use the extended transition period for complying with new or revised financial accounting standards[31](index=31&type=chunk) - Revenue is generally recognized over time, primarily using the ratio of actual costs incurred to total estimated costs for fixed-price contracts[33](index=33&type=chunk) - The effective tax rate for the six months ended June 30, 2022, was **(37.9%)**, a significant change from **30.7%** in the prior year, primarily due to a windfall tax adjustment from restricted stock vesting, increased R&D credits, and projected limitations on executive compensation deductibility[42](index=42&type=chunk) - The Company adopted ASU 2021-08 (Accounting for Contract Assets and Liabilities) and ASU 2017-04 (Simplifying Goodwill Impairment Test) effective January 1, 2021, and January 1, 2022, respectively, with immaterial impacts[47](index=47&type=chunk)[48](index=48&type=chunk) - ASU 2016-02 (Leases) and ASU 2016-13 (Credit Losses - CECL model) are effective for the Company beginning January 1, 2022, and January 1, 2023, respectively, and their impacts are currently being evaluated[49](index=49&type=chunk)[50](index=50&type=chunk) [3. Earnings per Share](index=12&type=section&id=3%2E%20Earnings%20per%20Share) Earnings per Share (Amounts in thousands, except share data) | Metric (3 Months Ended June 30) | 2022 | 2021 | | :------------------------------ | :----------- | :---------- | | Net income (loss) | $(320) | $(439) | | Basic EPS | $(0.03) | $(0.06) | | Diluted EPS | $(0.03) | $(0.06) | | Weighted average shares outstanding (Basic) | 10,761,172 | 6,973,055 | | Weighted average shares outstanding (Diluted) | 10,761,172 | 6,973,055 | | Metric (6 Months Ended June 30) | 2022 | 2021 | | :------------------------------ | :----------- | :---------- | | Net income | $1,137 | $542 | | Basic EPS | $0.09 | $0.07 | | Diluted EPS | $0.09 | $0.07 | | Weighted average shares outstanding (Basic) | 10,346,089 | 6,029,054 | | Weighted average shares outstanding (Diluted) | 10,427,602 | 6,029,054 | - Diluted EPS for both periods did not assume the effect of restricted shares or substantive options as they were antidilutive[54](index=54&type=chunk)[55](index=55&type=chunk) [4. Acquisitions](index=13&type=section&id=4%2E%20Acquisitions) - In Q1 2022, Bowman acquired Perry Engineering, LLC for **$0.9 million** (cash, stock, promissory note, assumed liabilities) to enhance civil engineering and land surveying competencies[58](index=58&type=chunk)[59](index=59&type=chunk) - In Q2 2022, Bowman acquired McMahon Associates, Inc. for **$18.3 million** (cash, stock, promissory notes, assumed liabilities) to strengthen transportation planning and engineering services[61](index=61&type=chunk)[64](index=64&type=chunk) Preliminary Purchase Price Allocation for McMahon Associates, Inc. (in thousands) | Item | Amount | | :--------------------------------------- | :-------- | | Total Purchase Price | $18,331 | | Accounts Receivable, net | $8,456 | | Intangible assets | $3,342 | | Goodwill | $9,305 | | Net assets acquired | $18,331 | - In Q2 2022, Bowman acquired Fabre Engineering, Inc. for **$0.5 million** (cash, promissory note, assumed liabilities) to further enhance civil engineering and land surveying capabilities[70](index=70&type=chunk)[71](index=71&type=chunk) Pro Forma Consolidated Results (Six Months Ended June 30, in thousands) | Metric | 2022 (Pro Forma) | 2021 (Pro Forma) | | :------------------------- | :--------------- | :--------------- | | Gross Contract Revenue | $127,069 | $84,918 | | Net Income (loss) | $2,081 | $947 | [5. Disaggregation of Revenue and Contract Balances](index=15&type=section&id=5%2E%20Disaggregation%20of%20Revenue%20and%20Contract%20Balances) Disaggregated Revenues by Contract Type (in thousands) | Contract Type (3 Months Ended June 30) | 2022 ($) | 2022 (%) | 2021 ($) | 2021 (%) | | :------------------------------------- | :------- | :------- | :------- | :------- | | Fixed fee | $58,488 | 93.7% | $33,456 | 91.6% | | Time-and-materials | $3,911 | 6.3% | $3,068 | 8.4% | | Gross contract revenue | $62,399 | 100.0% | $36,524 | 100.0% | | Contract Type (6 Months Ended June 30) | 2022 ($) | 2022 (%) | 2021 ($) | 2021 (%) | | :------------------------------------- | :------- | :------- | :------- | :------- | | Fixed fee | $108,074 | 94.1% | $64,829 | 94.9% | | Time-and-materials | $6,786 | 5.9% | $3,497 | 5.1% | | Gross contract revenue | $114,860 | 100.0% | $68,326 | 100.0% | - As of June 30, 2022, the Company had approximately **$165.8 million** in remaining performance obligations, with **90.8%** expected to be recognized within the next twelve months[73](index=73&type=chunk) [6. Contracts in Progress](index=15&type=section&id=6%2E%20Contracts%20in%20Progress) Net Contract Assets (in thousands) | Metric | June 30, 2022 | December 31, 2021 | | :----------------------------------- | :------------ | :---------------- | | Costs incurred on uncompleted contracts | $205,307 | $168,110 | | Estimated contract earnings to date | $494,439 | $398,059 | | Less: billed to date | $(490,840) | $(393,493) | | Net contract assets | $3,599 | $4,566 | - Net contract assets decreased by **$0.967 million** from December 31, 2021, to June 30, 2022[75](index=75&type=chunk) [7. Notes Receivable](index=16&type=section&id=7%2E%20Notes%20Receivable) Notes Receivable Summary (in thousands) | Category | June 30, 2022 | December 31, 2021 | | :------------------------------------- | :------------ | :---------------- | | Officers, employees and affiliated entities | $2,378 | $2,478 | | Unrelated third party | $903 | $903 | | Total | $3,281 | $3,381 | | Less: current portion | $(1,183) | $(1,260) | | Noncurrent portion | $2,098 | $2,121 | - Total notes receivable decreased by **$0.1 million** from December 31, 2021, to June 30, 2022[77](index=77&type=chunk) [8. Property and Equipment, Net](index=16&type=section&id=8%2E%20Property%20and%20Equipment%2C%20Net) Property and Equipment, Net (in thousands) | Category | June 30, 2022 | December 31, 2021 | | :------------------------------------- | :------------ | :---------------- | | Total fixed assets | $17,326 | $16,079 | | Less: accumulated depreciation | $(11,236) | $(10,669) | | Property and Equipment, net of capital leased assets | $6,090 | $5,410 | | Capital Leased Assets, net | $15,662 | $14,792 | - Depreciation expense for fixed assets was **$0.6 million** for the six months ended June 30, 2022, up from **$0.4 million** in the prior year[78](index=78&type=chunk) - Amortization expense for capital leased assets was **$3.4 million** for the six months ended June 30, 2022, up from **$2.4 million** in the prior year[79](index=79&type=chunk) [9. Goodwill](index=17&type=section&id=9%2E%20Goodwill) Goodwill Summary (in thousands) | Metric | Goodwill Amount | | :-------------------------- | :-------------- | | Balance as of December 31, 2021 | $28,471 | | 2022 Activity | $11,142 | | Balance as of June 30, 2022 | $39,613 | - Goodwill increased by **$11.1 million** during the first six months of 2022, primarily due to business acquisitions[81](index=81&type=chunk) [10. Intangible Assets](index=17&type=section&id=10%2E%20Intangible%20Assets) Intangible Assets (Net Balance in thousands) | Category | June 30, 2022 | December 31, 2021 | | :----------------------- | :------------ | :---------------- | | Customer relationships | $11,696 | $9,353 | | Contract rights | $2,500 | $2,109 | | Leasehold | $158 | $143 | | Non-compete agreement | $- | $- | | Domain name | $281 | $281 | | Licensing rights | $400 | $400 | | Total | $15,035 | $12,286 | - Total net intangible assets increased by **$2.7 million** from December 31, 2021, to June 30, 2022, primarily in customer relationships and contract rights[82](index=82&type=chunk) - Amortization expense for intangible assets was **$1.2 million** for the six months ended June 30, 2022, significantly up from **$0.1 million** in the prior year[83](index=83&type=chunk) [11. Bank Revolving Line of Credit and Fixed Credit Facilities](index=17&type=section&id=11%2E%20Bank%20Revolving%20Line%20of%20Credit%20and%20Fixed%20Credit%20Facilities) - The Company has a **$25.0 million** revolving credit facility and three non-revolving credit facilities with Bank of America[85](index=85&type=chunk)[230](index=230&type=chunk) - As of June 30, 2022, there was no outstanding balance on the Revolving Line, which matures on July 31, 2024[85](index=85&type=chunk)[230](index=230&type=chunk) - Interest expense on these facilities totaled **$21 thousand** for the six months ended June 30, 2022, down from **$0.1 million** in the prior year[90](index=90&type=chunk) [12. Notes Payable](index=18&type=section&id=12%2E%20Notes%20Payable) Notes Payable Summary (in thousands) | Category | June 30, 2022 | December 31, 2021 | | :------------------------------------- | :------------ | :---------------- | | Shareholders | $13,042 | $10,771 | | Owners of Acquired Entity | $478 | $450 | | Fixed line notes payable | $1,139 | $1,502 | | Total | $14,759 | $12,857 | | Less: current portion | $(6,067) | $(4,450) | | Noncurrent portion | $8,692 | $8,407 | - Total notes payable increased by **$1.9 million** from December 31, 2021, to June 30, 2022, primarily due to increased shareholder notes[95](index=95&type=chunk) - Interest expense attributable to notes payable was **$0.2 million** for the six months ended June 30, 2022, up from **$0.1 million** in the prior year[93](index=93&type=chunk) [13. Related Party Transactions](index=19&type=section&id=13%2E%20Related%20Party%20Transactions) - The Company leases office space from BCG Chantilly, LLC, an entity with significant ownership by Mr. Bowman, Mr. Bruen, and Mr. Hickey[98](index=98&type=chunk) - Notes receivable from related parties (Bowman Lansdowne Development, LLC, Lansdowne Development Group, LLC, Bowman Realty Investments 2010, LLC, Alwington Farm Developers, LLC) totaled approximately **$2.3 million** as of June 30, 2022[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) - The Company provided administrative, accounting, and project management services to certain related party entities, billing **$38 thousand** for the six months ended June 30, 2022[103](index=103&type=chunk) [14. Employee Stock Purchase and Stock Incentive Plans](index=20&type=section&id=14%2E%20Employee%20Stock%20Purchase%20and%20Stock%20Incentive%20Plans) - Under the ESPP, eligible employees can purchase common stock at a **15% discount**. For H1 2022, **46,063 shares** were sold for **$593 thousand**[106](index=106&type=chunk) - The 2021 Omnibus Equity Incentive Plan allows for granting stock options and restricted stock awards. As of June 30, 2022, **12,656 stock options** were outstanding[107](index=107&type=chunk)[110](index=110&type=chunk) - During H1 2022, **328,489 shares** of restricted stock were granted under the Plan, with **1,959,071 shares** outstanding at June 30, 2022[115](index=115&type=chunk)[118](index=118&type=chunk) - **447,429 performance-based stock units** were granted to executive officers in H1 2022, subject to market conditions and a **2.91-year** vesting period[119](index=119&type=chunk)[120](index=120&type=chunk) - Unrecognized compensation costs related to unvested awards totaled **$27.8 million** as of June 30, 2022, expected to be expensed through 2027[123](index=123&type=chunk) [15. Capital Leases](index=22&type=section&id=15%2E%20Capital%20Leases) Future Minimum Commitments Under Capital Leases (in thousands) | Year | Amount | | :--------- | :-------- | | 2022 | $3,433 | | 2023 | $5,697 | | 2024 | $3,509 | | 2025 | $2,438 | | 2026 | $347 | | Total minimum lease payments | $15,424 | | Present value of total net minimum lease payments | $13,487 | | Long-term portion of net minimum lease payments | $7,735 | - The Company leases equipment and vehicles under capital lease agreements with payment terms ranging from **30 to 50 months**[124](index=124&type=chunk) [16. Commitments and Contingencies](index=23&type=section&id=16%2E%20Commitments%20and%20Contingencies) Future Minimum Lease Payments for Operating Leases (in thousands) | Year | Amount | | :--------- | :-------- | | 2022 | $4,084 | | 2023 | $7,039 | | 2024 | $6,446 | | 2025 | $5,470 | | 2026 | $4,405 | | Thereafter | $10,156 | | Total | $37,600 | - Rent, vehicle, and equipment lease expense for operating leases was **$3.8 million** for the six months ended June 30, 2022, up from **$2.8 million** in the prior year[127](index=127&type=chunk) [17. Subsequent Events](index=23&type=section&id=17%2E%20Subsequent%20Events) - On July 15, 2022, Bowman acquired Project Design Consultants, LLC for approximately **$11.0 million**, consisting of cash, promissory notes, and a convertible promissory note[129](index=129&type=chunk) - The IRS approved the Company's request to change its accounting method for stock-based compensation expense on July 27, 2022, which will result in a reversal of an uncertain tax position and a reduction in tax expense in Q3 2022[130](index=130&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operating performance, revenue growth from acquisitions and organic expansion, key metrics, and liquidity [Overview](index=24&type=section&id=Overview) - Bowman is a professional services firm offering diverse engineering solutions across various end markets, with a strategic focus on recurring revenue and multi-year engagements[133](index=133&type=chunk)[134](index=134&type=chunk) Key Financial Highlights (Amounts in thousands) | Metric (3 Months Ended June 30) | 2022 | 2021 | YoY Growth | | :------------------------------ | :-------- | :-------- | :--------- | | Gross contract revenue | $62,400 | $36,500 | 71.0% | | Net loss | $(300) | $(400) | 25.0% | | Adjusted EBITDA | $7,600 | $4,200 | 81.0% | | Metric (6 Months Ended June 30) | 2022 | 2021 | YoY Growth | | :------------------------------ | :-------- | :-------- | :--------- | | Gross contract revenue | $114,900 | $68,300 | 68.2% | | Net income | $1,100 | $500 | 120.0% | | Adjusted EBITDA | $15,000 | $8,300 | 80.7% | - The acquisition of McMahon Associates, Inc. in May 2022 for approximately **$18.3 million** is expected to enhance transportation planning and engineering services[137](index=137&type=chunk) [Subsequent Events](index=25&type=section&id=Subsequent%20Events) - Post-period, Bowman acquired Project Design Consultants, LLC for **$11.0 million**, expanding market presence and service diversification[139](index=139&type=chunk) - IRS approval for a change in accounting method for stock-based compensation will lead to a tax expense reduction in Q3 2022[140](index=140&type=chunk) [Common Stock Offering](index=25&type=section&id=Common%20Stock%20Offering) - In February 2022, the Company completed a follow-on offering of **1,057,500 common shares** at **$16.00 per share**, generating net proceeds of approximately **$16.1 million**[141](index=141&type=chunk)[142](index=142&type=chunk) [COVID-19 Update](index=25&type=section&id=COVID-19%20Update) - The Company has not experienced material financial distress from COVID-19 and continues to evaluate its impact on projects and operations[143](index=143&type=chunk) - As of June 30, 2022, **$1.2 million** of deferred employer payroll taxes under the CARES Act are included in liabilities[143](index=143&type=chunk) [Methods of Evaluation](index=25&type=section&id=Methods%20of%20Evaluation) - Management uses both GAAP and non-GAAP financial information to monitor performance, plan operations, and determine compensation[144](index=144&type=chunk) - The Company operates as a single business segment, providing multi-disciplinary professional engineering solutions[145](index=145&type=chunk) [Components of Income and Expense](index=26&type=section&id=Components%20of%20Income%20and%20Expense) - Revenue is generated from employee services, sub-consultant pass-through fees, and reimbursable costs. Net service billing, a non-GAAP measure, represents revenue from employee services[147](index=147&type=chunk) - Contracts are primarily lump sum (fixed fee), accounting for **94%** of gross contract revenue for the three and six months ended June 30, 2022[150](index=150&type=chunk) - Contract costs mainly consist of direct payroll (including fringe and incentive compensation) and sub-consultant/other direct expenses[151](index=151&type=chunk)[152](index=152&type=chunk) - Operating expenses include selling, general & administrative (SG&A), non-cash stock compensation, depreciation & amortization, and other non-core expenses[155](index=155&type=chunk) [Other Financial Data, Non-GAAP Measurements and Key Performance Indicators](index=27&type=section&id=Other%20Financial%20Data%2C%20Non-GAAP%20Measurements%20and%20Key%20Performance%20Indicators) - Backlog, a non-GAAP metric, measures undelivered gross revenue and is used to predict future revenue and staffing needs[161](index=161&type=chunk) - Net Service Billing (non-GAAP) is gross revenue less pass-through sub-consultant fees and reimbursable expenses, used to assess workforce productivity and profitability[162](index=162&type=chunk) - Adjusted EBITDA (non-GAAP) is net income before interest, taxes, depreciation, and amortization, adjusted for non-core items and non-cash stock-based compensation, serving as an indicator of normalized performance[163](index=163&type=chunk) - Adjusted EBITDA Margin, net (non-GAAP) is Adjusted EBITDA as a percentage of net service billings[165](index=165&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) [Combined results of operations](index=28&type=section&id=Combined%20results%20of%20operations) Condensed Consolidated Results of Operations (in thousands) | Metric (3 Months Ended June 30) | 2022 | 2021 | Change ($) | Change (%) | | :------------------------------ | :-------- | :-------- | :--------- | :--------- | | Gross contract revenue | $62,399 | $36,524 | $25,875 | 70.8% | | Net income (loss) | $(320) | $(439) | $119 | 27.1% | | Net margin | (0.5%) | (1.2%) | 0.7% | - | | Net service billing | $56,416 | $32,459 | $23,957 | 73.8% | | Adjusted EBITDA | $7,576 | $4,185 | $3,391 | 81.0% | | Metric (6 Months Ended June 30) | 2022 | 2021 | Change ($) | Change (%) | | :------------------------------ | :-------- | :-------- | :--------- | :--------- | | Gross contract revenue | $114,860 | $68,326 | $46,534 | 68.1% | | Net income (loss) | $1,137 | $542 | $595 | 109.8% | | Net margin | 1.0% | 0.8% | 0.2% | - | | Net service billing | $104,117 | $61,327 | $42,790 | 69.8% | | Adjusted EBITDA | $14,983 | $8,271 | $6,712 | 81.2% | [Three months ended June 30, 2022 as compared to the three months ended June 30, 2021](index=28&type=section&id=Three%20months%20ended%20June%2030%2C%202022%20as%20compared%20to%20the%20three%20months%20ended%20June%2030%2C%202021) - Gross contract revenue increased by **$25.9 million (71.0%)** to **$62.4 million**, with acquisitions contributing **$16.1 million (62.1%)** of this increase[167](index=167&type=chunk) Gross Contract Revenue by Market (3 Months Ended June 30, in thousands) | Market | 2022 ($) | 2022 (%) | 2021 ($) | 2021 (%) | Change ($) | Change (%) | | :------------------------- | :--------- | :------- | :--------- | :------- | :--------- | :--------- | | Building Infrastructure | $42,571 | 68.2% | $25,187 | 69.0% | $17,384 | 69.0% | | Transportation | $9,276 | 14.9% | $4,174 | 11.4% | $5,102 | 122.2% | | Power & Utilities | $7,924 | 12.7% | $6,184 | 16.9% | $1,740 | 28.1% | | Other emerging markets | $2,628 | 4.2% | $979 | 2.7% | $1,649 | 168.4% | | Total | $62,399 | 100.0% | $36,524 | 100.0% | $25,875 | 70.8% | | Organic | $46,331 | 74.3% | $36,524 | 100.0% | $9,807 | 26.9% | | Acquired | $16,068 | 25.7% | $- | 0.0% | $16,068 | n/a | - Direct payroll costs increased by **$11.0 million (78.0%)** to **$25.1 million**, primarily due to increased staffing and higher other direct payroll costs (fringe, incentive compensation)[176](index=176&type=chunk)[178](index=178&type=chunk) - Selling, general and administrative expenses increased by **$10.9 million (63.4%)** to **$28.1 million**, driven by indirect labor, general overhead, and non-cash stock compensation[181](index=181&type=chunk) - Net loss decreased by **$0.1 million (25.0%)** to **$0.3 million**, while Adjusted EBITDA increased by **$3.4 million (81.0%)** to **$7.6 million**[186](index=186&type=chunk)[189](index=189&type=chunk) [Six months ended June 30, 2022 as compared to the six months ended June 30, 2021](index=32&type=section&id=Six%20months%20ended%20June%2030%2C%202022%20as%20compared%20to%20the%20six%20months%20ended%20June%2030%2C%202021) - Gross contract revenue increased by **$46.6 million (68.2%)** to **$114.9 million**, with acquisitions contributing **$21.1 million (468.9%)** of the increase[193](index=193&type=chunk) Gross Contract Revenue by Market (6 Months Ended June 30, in thousands) | Market | 2022 ($) | 2022 (%) | 2021 ($) | 2021 (%) | Change ($) | Change (%) | | :------------------------- | :--------- | :------- | :--------- | :------- | :--------- | :--------- | | Building Infrastructure | $81,329 | 70.8% | $46,224 | 67.7% | $35,105 | 75.9% | | Transportation | $13,246 | 11.5% | $8,295 | 12.1% | $4,951 | 59.7% | | Power & Utilities | $15,561 | 13.5% | $11,230 | 16.4% | $4,331 | 38.6% | | Other emerging markets | $4,724 | 4.1% | $2,577 | 3.8% | $2,147 | 83.3% | | Total | $114,860 | 100.0% | $68,326 | 100.0% | $46,534 | 68.1% | | Organic | $89,260 | 77.7% | $68,326 | 100.0% | $20,934 | 30.6% | | Acquired | $25,600 | 22.3% | $- | 0.0% | $25,600 | n/a | - Direct payroll costs increased by **$18.4 million (67.4%)** to **$46.0 million**, driven by increased staffing and higher other direct payroll costs[202](index=202&type=chunk)[204](index=204&type=chunk) - Selling, general and administrative expenses increased by **$20.9 million (69.7%)** to **$50.9 million**, due to indirect labor, general overhead, and non-cash stock compensation[208](index=208&type=chunk) - Net income increased by **$0.6 million (120.0%)** to **$1.1 million**, and Adjusted EBITDA increased by **$6.7 million (80.7%)** to **$15.0 million**[212](index=212&type=chunk)[217](index=217&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) - Principal liquidity sources include cash, cash flow from operations, revolving credit facility, lease financing, and stock sales[220](index=220&type=chunk) - Cash and cash equivalents increased by **$5.2 million** at June 30, 2022, compared to December 31, 2021[220](index=220&type=chunk) - The Company actively pursues acquisitions, utilizing a combination of cash, bank financing, seller financing, and equity[221](index=221&type=chunk)[222](index=222&type=chunk) [Cash Flows](index=36&type=section&id=Cash%20Flows) Summary of Cash Flows (in thousands) | Cash Flow Activity (Six Months Ended June 30) | 2022 | 2021 | | :-------------------------------------------- | :-------- | :-------- | | Net cash provided by (used in) operating activities | $4,268 | $(472) | | Net cash used in investing activities | $(8,099) | $(1,570) | | Net cash provided by financing activities | $8,995 | $40,201 | | Change in cash, cash equivalents and restricted cash | $5,164 | $38,159 | - Operating cash flow improved significantly, while investing cash usage increased due to acquisitions. Financing cash flow decreased due to the timing of stock offerings[224](index=224&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk) [Credit Facilities and Other Financing](index=36&type=section&id=Credit%20Facilities%20and%20Other%20Financing) - The Company maintains a **$25.0 million** revolving credit facility and three non-revolving credit facilities with Bank of America, with the Revolving Line extended to July 31, 2024[228](index=228&type=chunk)[230](index=230&type=chunk) - As of June 30, 2022, the Company was in compliance with all financial covenants, including fixed charge coverage ratio, debt to EBITDA, and adjusted debt to EBITDA ratios[230](index=230&type=chunk) - Master lease facilities with Huntington Technology Finance and Enterprise Leasing finance IT infrastructure, equipment, and vehicles, allowing for both operating and capital leasing[231](index=231&type=chunk) [Off-Balance Sheet Arrangements](index=37&type=section&id=Off-Balance%20Sheet%20Arrangements) - The Company has no material off-balance sheet arrangements, special purpose entities, or non-exchange-traded contracts accounted for at fair value[232](index=232&type=chunk) [Critical Accounting Policies and Estimates](index=37&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - The Company uses estimates in financial reporting, which are subject to change as new information becomes available[233](index=233&type=chunk) - No material changes to critical accounting policies and estimates were reported compared to the Annual Report on Form 10-K[234](index=234&type=chunk) [Cautionary Statement about Forward-Looking Statements](index=37&type=section&id=Cautionary%20Statement%20about%20Forward-Looking%20Statements) - The report contains forward-looking statements regarding future operating results, financial position, acquisitions, growth strategies, and liquidity, which are subject to various risks and uncertainties[235](index=235&type=chunk) - Key risk factors include retaining key personnel, changes in client demand, economic conditions, regulatory changes, successful execution of acquisition strategy, contract termination, and competitive pressures[236](index=236&type=chunk)[238](index=238&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203%2E%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Bowman Consulting Group Ltd. is not required to provide quantitative and qualitative disclosures about market risk - The Company is exempt from providing market risk disclosures as a smaller reporting company[241](index=241&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204%2E%20Controls%20and%20Procedures) Management confirmed effective disclosure controls and procedures as of June 30, 2022, with no material changes in internal control - Disclosure controls and procedures were evaluated and deemed effective at the reasonable assurance level as of June 30, 2022[242](index=242&type=chunk) - No material changes in internal control over financial reporting occurred during the period[243](index=243&type=chunk) [PART II. OTHER INFORMATION](index=40&type=section&id=PART%20II%2E%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=40&type=section&id=Item%201%2E%20Legal%20Proceedings) The Company is subject to various legal proceedings in the normal course of business but is not currently party to any litigation expected to have a material adverse effect on its operations or financial position - No legal proceedings are expected to have a material adverse effect on the Company's results of operations or financial position[246](index=246&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A%2E%20Risk%20Factors) As a smaller reporting company, Bowman Consulting Group Ltd. is not required to provide specific risk factor disclosures in this quarterly report - The Company is exempt from providing risk factor information as a smaller reporting company[247](index=247&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202%2E%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2022, the Company issued 476,976 common shares as partial consideration for the McMahon Associates, Inc. acquisition, exempt from registration. The Company also repurchased 91,264 shares from employees to cover tax withholding obligations - On May 4, 2022, **476,976 common shares** were issued at **$16.64 per share** (**$7.9 million** total) as partial consideration for the McMahon Associates, Inc. acquisition, exempt under Section 4(a)(2) of the Securities Act[248](index=248&type=chunk) - The Company repurchased **91,264 shares** of common stock at an average price of **$15.13 per share** in May 2022 to satisfy tax withholding obligations from restricted stock vesting[249](index=249&type=chunk) [Item 3. Defaults Upon Senior Securities](index=40&type=section&id=Item%203%2E%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - No defaults upon senior securities were reported[250](index=250&type=chunk) [Item 4. Mine Safety Disclosures](index=40&type=section&id=Item%204%2E%20Mine%20Safety%20Disclosures) There were no mine safety disclosures required for the reporting period - No mine safety disclosures were reported[250](index=250&type=chunk) [Item 5. Other Information](index=40&type=section&id=Item%205%2E%20Other%20Information) No other information was required to be disclosed under this item - No other information was reported[250](index=250&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206%2E%20Exhibits) This section lists the exhibits filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q, including XBRL data, stock purchase agreements, and credit agreement amendments - Exhibits include XBRL data, the Stock Purchase Agreement for McMahon Associates, Inc., and the Seventh Amendment to the Credit Agreement with Bank of America, N.A.[253](index=253&type=chunk)[255](index=255&type=chunk) [SIGNATURES](index=42&type=section&id=SIGNATURES)

Bowman Delivering innovative engineering solutions owmal Bowman Consulting Group Ltd. Q1 2022 Earnings Call | May 12, 2022 | Nasdaq: BWMN BUILDING INFRASTRUCTURE TRANSPORTATION POWER & UTILITIES ENERGY WATER RESOURCES Disclaimer Please note that many of the comments made today are considered forward-looking statements under federal securities laws. As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ from those e ...

Bowman Consulting (NASDAQ:BWMN) Q1 2022 Earnings Conference Call May 12, 2022 9:00 AM ET Company Participants Gary Bowman - Chairman and CEO Bruce Labovitz - CFO Conference Call Participants Brent Thielman - D.A. Davidson Alex Rygiel - B. Riley Financial 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 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 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 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 March 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 ...

Financial Performance - FY 2021 - Bowman's Net Service Billing for FY 2021 was $134.9 million, a 30% increase compared to $103.7 million in 2020[20, 23] - The company's Gross Contract Revenue for FY 2021 reached $150 million, up 23% from $122 million in 2020[20] - Adjusted EBITDA for FY 2021 was $16.5 million, a 19% increase from $13.9 million in 2020[23] - Gross Margin for FY 2021 was 50%, a 500 bps increase compared to 45% in 2020[20] Q4 2021 Highlights - Net Service Billing for Q4 2021 was $37.8 million, a 44% increase compared to $26.3 million in Q4 2020[20, 22] - Gross Contract Revenue for Q4 2021 was $41.9 million, a 40% increase compared to $29.9 million in Q4 2020[20] - Adjusted EBITDA for Q4 2021 was $3.5 million, a 6% increase compared to $3.3 million in Q4 2020[22] Acquisitions and Growth Strategy - Bowman identified $200 million of acquirable annual revenue and is substantively engaged in M&A activities [11] - The company is targeting $75 million in acquisitions for 2022, with an average acquisition size of >$10 million in annual revenue [11] - Bowman completed acquisitions with a total estimated 2021 revenue of $36.2 million, issuing 326,134 shares [9] - The company projects FY22 Net Service Billing of $170 to $185 million and Adjusted EBITDA of $23 to $27 million [29]

Bowman Consulting Group Ltd. (NASDAQ:BWMN) Q4 2021 Earnings Conference Call March 22, 2022 9:00 AM ET Company Participants Gary Bowman – Chairman and Chief Executive Officer Bruce Labovitz – Chief Financial Officer Conference Call Participants Brent Thielman – DA Davidson Alex Rygiel – B. Riley Operator Good morning. My name is Harry, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Bowman Consulting Group Fourth Quarter and Full Year 2021 Conference Call. [Ope ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-40371 BOWMAN CONSULTING GROUP LTD. (Exact name of Registrant as specified in its Charter) Delaware 54-1762351 (State or other jurisdi ...

Bowman Delivering innovative engineering solutions owna Bowman Consulting Group Ltd. Q3 2021 Earnings Call | November 11, 2021 | Nasdaq: BWMN BUILDING INFRASTRUCTURE TRANSPORTATION POWER & UTILITIES ENERGY WATER RESOURCES Disclaimer Please note that many of the comments made today are considered forward-looking statements under federal securities laws. As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ from tho ...