Bowman Consulting Group Ltd. (Nasdaq: BWMN) ('Bowman' or the 'Company'), a national engineering and infrastructure services firm supporting owners and developers of the built environment, today released financial results for the three and nine months ended September 30, 2023.
'I am extremely pleased with our strong third quarter results,' said Gary Bowman, Chairman and CEO of Bowman. 'We delivered record gross revenue and demonstrated the margin leverage and operating cash flow our strategic growth initiative can deliver over time through increased scale. Tailwinds associated with transportation, energy and manufacturing funding are propelling infrastructure spending and continue to support our optimism about our ability to advance our revenue diversification efforts. Our backlog grew by 30% year-over-year, and we ended the quarter with a full pipeline of impactful new client assignments we expect to book during the fourth quarter. Acquisition activity has continued with two additional closings since the end of the third quarter with more expected by year-end. We feel confident about our markets, our employees, our positioning, and our prospects for a successful finish to 2023 and strong 2024.'
Financial highlights for the three months ended September 30, 2023, compared to September 30, 2022: Gross revenue of $94.4 million, compared to $71.2 million, a 33% increase
Year-over-year organic gross revenue growth1 of 11%
Net service billing2 of $82.1 million, compared to $64.9 million, a 27% increase
Year-over-year organic net service billing growth of 9%
Net income of $1.2 million, compared to a net income of $3.4 million
Adjusted EBITDA2 of $15.1 million, compared to $9.6 million, a 57% increase
Adjusted EBITDA margin, net 2 of 18.3% compared to 14.8%, a 350 bps increase
Gross backlog2 of $299 million, compared to $230 million, a 30% increase
Financial highlights for the nine months ended September 30, 2023, compared to September 30, 2022:
Gross revenue of $253.3 million, compared to $186.1 million, a 36% increase
Year-over-year organic gross revenue growth1 of 22%
Net service billing2 of $223.5 million, compared to $169.0 million, a 32% increase
Year-over-year organic net service billing growth of 20%
Net income of $1.1 million, compared to a net income of $4.5 million
Adjusted EBITDA2 of $35.8 million, compared to $24.6 million, a 46% increase
Adjusted EBITDA margin, net 2 of 16.0% compared to 14.6%, a 140 bps increase
Activity Under Stock Repurchase Program:
In November 2022, the Company's Board of Directors authorized a stock repurchase program, ('Stock Repurchase Program') to repurchase up to $10.0 million of the Company's common stock. Repurchases of stock to cover taxes upon vesting do not apply to the program. During and subsequent to the three months ended September 30, 2023, pursuant to the Stock Repurchase Program, the Company has so far repurchased a total of 28,704 shares of its common stock at an average price of $25.94. As of November 6, 2023, the Company has $9.3 million remaining under the Stock Repurchase Program.
Introducing non-GAAP Adjusted Earnings per Share: In connection with the release of financial results for the three and nine months ended September 30, 2023, the Company introduced the new non-GAAP financial metric of adjusted earnings per share ('Adjusted EPS'). To calculate Adjusted EPS, the Company adds back non-reoccurring expenses specific to acquisitions, non-cash stock compensation expense associated with pre-IPO grants, and other expenses not in the ordinary course of business. With respect to the elimination of any non-cash stock compensation expense, the Company computes an adjusted tax expense or benefit which accounts for the elimination of any periodic windfall or shortfall tax effects resulting from the difference between grant date fair value and vest date value. With respect to all other eliminations, the Company applies its average marginal statutory tax rate, currently 25.6%, to derive the tax adjustment associated with the elimination of these expenses. A reconciliation of non-GAAP Adjusted
EPS to GAAP EPS, both basic and diluted, is included with this press release for reference.
For the three months ended September 30, 2023, compared to September 30, 2022: Basic Adjusted EPS was $0.36 compared to $0.48
Diluted Adjusted EPS was $0.34 compared to $0.46
For the nine months ended September 30, 2023, compared to September 30, 2022: Basic Adjusted EPS was $0.79 compared to $1.02
Diluted Adjusted EPS was $0.73 compared to $0.98 Narrowing FY 2023 Guidance and Introducing FY 2024 Guidance
The Company is adjusting its full year 2023 outlook for Net Service Billing2 to be in the range of $306 to $312 million and Adjusted EBITDA2 in the range of $48 to $52 million. The Company is introducing its full year 2024 outlook for Net Service Billing2 to be in the range of $345 to $360 million and Adjusted EBITDA2 in the range of $56 to $62 million. The current outlook for 2023 and 2024 is based on completed acquisitions as of the date of this release and does not include contributions from any future acquisitions. Management discusses the Company's acquisition pipeline and its prospective impact during regularly scheduled earnings calls.
Q3 2023 Earnings Webcast
Bowman will host an earnings webcast to discuss the results of the quarter as follows:
Date: November 7, 2023
Time: 9:00 a.m. Eastern Time
Hosts: Gary Bowman, Chairman and CEO and Bruce Labovitz, Chief Financial Officer
Includes reclassification of Project Design Consultants and Anchor Engineering acquisitions as organic revenue.
About Bowman Consulting Group Ltd.
Headquartered in Reston, Virginia, Bowman is a national engineering services firm delivering infrastructure solutions to customers who own, develop, and maintain the built environment. With over 2,000 employees and more than 80 offices throughout the United States, Bowman provides a variety of planning, engineering, geospatial, construction management, commissioning, environmental consulting, land procurement and other technical services to customers operating in a diverse set of regulated end markets. Bowman trades on the Nasdaq under the symbol BWMN. For more information, visit bowman.com or investors.bowman.com.
Forward-Looking Statements
This press release may contain 'forward-looking statements' within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than statements of historical fact, including statements regarding our future results of operations and financial position, business strategy and plans and objectives for future operations, are forward-looking statements and represent our views as of the date of this press release. The words 'anticipate', 'believe', 'continue', 'estimate', 'expect', 'intend', 'may', 'will', 'goal' and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs, These forward-looking statements are subject to several assumptions and risks and uncertainties, many of which involve factors or circumstances that are beyond our control that could affect our financial results. The Company cautions that these statements are qualified by important factors that could cause actual results to differ materially from those reflected by the forward-looking statements contained in this news release. Such factors include: (a) changes in demand from the local and state government and private clients that we serve; (b) general economic conditions, nationally and globally, and their effect on the market for our services; (c) competitive pressures and trends in our industry and our ability to successfully compete with our competitors; (d) changes in laws, regulations, or policies and (e) the 'Risk Factors' set forth in the Company's most recent SEC filings. Considering these risks, uncertainties and assumptions, the future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipates or implied in any forward-looking statements. Except as required by law, we are under no obligation to update these forward-looking statements after the date of this press release, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements.
Contact:
Bruce Labovitz
Tel: (703) 787-3403
Email: ir@bowman.com
Larry Clark
Tel: (310) 622-8223
Email: lclark@bowman.com
BOWMAN CONSULTING GROUP LTD. 
