Bowman(US:BWMN)2023-08-12 14:03Financial Data and Key Metrics Changes - Gross revenue for the second quarter increased by $20.4 million or 33% to $82.8 million compared to $62.4 million in the same quarter last year [28] - Net service billing for the six months increased by $37.3 million or 36% to $141.4 million compared to $104.1 million in the first half of last year [32] - Adjusted EBITDA was up 46% in the second quarter to $11.1 million compared to $7.7 million last year, with an adjusted EBITDA margin increase of 150 basis points to 15% [34] Business Line Data and Key Metrics Changes - Building infrastructure represented 59% of gross revenue for the quarter, with transportation and power each representing 19% of gross revenue [11] - Year-to-date gross revenue was up $43.9 million or 38% to $158.9 million compared to $114.9 million in the first six months of last year [12] - Organic growth of net service billing was roughly 12% in the quarter, including contributions from recent acquisitions [14] Market Data and Key Metrics Changes - Backlog at the end of the quarter was approximately $295 million, up close to $90 million compared to June 30, 2022 [18] - Transportation revenue grew by 141% year-over-year, increasing its contribution to gross revenue from 11% to 20% [42] - Power and Utilities revenue grew by 60% year-over-year, increasing its contribution to gross revenue from 15% last year to 18% this year [43] Company Strategy and Development Direction - The company aims to achieve $500 million of annual revenue combined with above-average margins, focusing on revenue diversification and integration of acquired firms [28][47] - The strategy includes a commitment to capitalizing on revenue synergy opportunities through rapid integration of acquired firms and promoting work sharing and cross referrals [27] - The company is concentrating on developing services in areas such as geospatial mapping, renewable energy solutions, and digital services [44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the homebuilding industry recovering faster than anticipated, with strong demand noted among customers [71] - The company continues to see strong momentum in the infrastructure market, driven by positive funding and demand for innovation [8] - Management maintains a positive outlook for the remainder of the year and anticipates discussing new acquisitions in the next earnings call [47] Other Important Information - The company completed five acquisitions, adding approximately $36 million of annualized net service revenue and over 250 new employees [6] - Net debt at the end of the quarter was $61.2 million, resulting in a leverage ratio of 1.5 on trailing fourth quarter's adjusted EBITDA [37] - The company increased its adjusted EBITDA guidance from a range of $44 million to $50 million to a range of $47 million to $52 million [20] Q&A Session Summary Question: Update on revenue synergies and organic growth - Management indicated that synergies from acquisitions are a substantial contributor to organic growth rates [50] Question: Backlog in the transportation vertical - Management acknowledged that the transportation backlog is lumpy but noted good prospects for the rest of the year [60] Question: Surprises in the quarter - A pleasant surprise was the quick recovery in the homebuilding industry, with optimism among customers [71] Question: M&A opportunities - Management noted increasing opportunities for larger transactions but remains focused on smaller, impactful acquisitions [75] Question: Federal funding impact on backlog - Management confirmed that several projects in the pipeline are driven by federal funding [82]