The following discussion and analysis of the financial condition and results of
operations of NV5 Global, Inc. and its subsidiaries (collectively, the
"Company," "we," "our," "us," or "NV5 Global") should be read in conjunction
with the financial statements included elsewhere in this Quarterly Report and
the audited financial statements for the year ended January 1, 2022, included in
our Annual Report on Form 10-K. This Quarterly Report contains, in addition to
unaudited historical information, forward-looking statements, which involve risk
and uncertainties. The words "believe," "expect," "estimate," "may," "will,"
"could," "plan," or "continue," and similar expressions are intended to identify
forward-looking statements. Our actual results could differ materially from the
results those anticipated in such forward-looking statements. Factors that could
cause or contribute to such differences in results and outcomes include, those
discussed under the headings "Risk Factors" in our Annual Report on Form 10-K
for the year ended January 1, 2022 and this Quarterly Report on Form 10-Q, if
any. Readers are urged not to place undue reliance on these forward-looking
statements, which speak only as of the date of this Quarterly Report on
Form 10-Q. We undertake no obligation to (and we expressly disclaim any
obligation to) revise or update any forward-looking statement, whether as a
result of new information, subsequent events, or otherwise (except as may be
required by law), in order to reflect any event or circumstance which may arise
after the date of this Quarterly Report on Form 10-Q. Amounts presented are in
thousands, except per share data.
Overview
We are a provider of technology, conformity assessment, and consulting solutions
to public and private sector clients. We focus on the infrastructure, utility
services, construction, real estate, and environmental markets. Our primary
clients include U.S. Federal, state, municipal, and local government agencies,
and military and defense clients. We also serve quasi-public and private sector
clients from the education, healthcare, utility services, and public utilities,
including schools, universities, hospitals, health care providers, and insurance
providers.
Fiscal Year
We operate on a "52/53 week" fiscal year ending on the Saturday closest to the
calendar quarter end.
Recent Acquisitions
We completed three acquisitions during 2022. The aggregate purchase price of
all three acquisitions was $14,156, including $4,644 in cash, a $2,500
promissory note, $433 of our common stock, and potential earn-outs of up to
$15,500 payable in cash and common stock, which were recorded at an estimated
fair value of $6,579. An option-based model was used to determine the fair value
of the earn-outs, which is a generally accepted valuation technique that
embodies all significant assumption types. In order to determine the fair values
of tangible and intangible assets acquired and liabilities assumed, we engaged
an independent third-party valuation specialist to assist in the determination
of fair values. The final determination of the fair value of assets and
liabilities will be completed within the one-year measurement period as required
by ASC 805. The 2022 acquisitions will necessitate the use of this measurement
period to adequately analyze and assess the factors used in establishing the
asset and liability fair values as of the relevant acquisition date, including
intangible assets, accounts receivable, and certain fixed assets.
Secondary Offering
On March 10, 2021, we priced an underwritten public offering of 1,612,903 shares
of our common stock (the "Firm Shares") at a price of $93.00 per share. The
shares were sold pursuant to an effective registration statement on Form S-3
(Registration No. 333-237167). In addition, we also granted the underwriters a
30-day option to purchase 241,935 additional shares (the "Option Shares") of our
common stock at the public offering price. On March 15, 2021, we closed on the
Firm Shares, for which it received net proceeds of approximately $140,693 after
deducting the underwriting discount and estimated offering expenses payable by
us. On April 13, 2021, the underwriters exercised the Option Shares and we
received net proceeds of $21,150 after deducting the underwriting discount and
estimated offering expenses payable by us.
Segments
Our operations are organized into three operating and reportable segments:
•Infrastructure ("INF") - includes our engineering, civil program management,
utility services, and construction quality assurance, testing and inspection
practices;
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•Building, Technology & Sciences ("BTS") - includes our environmental health
sciences, buildings and program management, and MEP & technology design
practices; and
•Geospatial Solutions ("GEO") - includes our geospatial solution practices.
For additional information regarding our reportable segments, see Note 15,
Reportable Segments, of the Notes to Consolidated Financial Statements included
elsewhere herein.
Impact of COVID-19 on Our Business
The COVID-19 pandemic has significantly impacted global stock markets and
economies. We are closely monitoring the impact of the outbreak of COVID-19 on
all aspects of our business. Some of our services were affected, primarily our
Geospatial segment, real estate transactional services and hospitality-related
services. In particular, due to COVID-19 restrictions, some of our casino and
hotel projects were delayed. As U.S. and international economies have reopened
and with increased vaccine availability, real estate transactional services have
recovered, however we are unable to predict the ultimate impact that it may have
on our business, future results of operations, financial position, or cash
flows. The extent to which our operations may be impacted by the COVID-19
pandemic will depend largely on future developments, which are highly uncertain
and cannot be accurately predicted. We intend to continue to monitor the impact
of the COVID-19 pandemic on our business closely.
Critical Accounting Policies and Estimates
For a discussion of our critical accounting estimates, see Management's
Discussion and Analysis of Financial Condition and Results of Operations that is
included in the 2021 Form 10-K.
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