- 19% Full Year Adjusted EBITDA Growth -
- 7% Full Year Organic Revenue Growth -
- Acquisition by
Fourth Quarter 2022 Highlights:
(all comparisons versus the prior-year period unless otherwise noted)
- Gross revenue grew 4% to
$151.0 million . - Gross margin, excluding subcontractor costs, was 61.4%, up 400 basis points; operating margin, excluding subcontractor costs, was 7.5%, up 320 basis points.
- Net loss was
$4.2 million . Adjusted net income (1) was$2.8 million , or$0.07 per share which excludes$2.8 million of amortization of intangible assets,$2.7 million of non-recurring expenses, and$1.5 million of non-cash change in fair value of contingent consideration. - Adjusted EBITDA(2) increased 15% to
$23.8 million ; Adjusted EBITDA margin, excluding subcontractor costs was a record 20.5%, and up 270 basis points. - Backlog reached another record level at
$877 million , up 8.5%.
Full Year 2022 Highlights:
(all comparisons versus the prior-year unless otherwise noted)
- Gross revenue of
$604.8 million , compared to$538.8 million in 2021, driven by 7% organic growth and contributions from 2022 acquisitions. - Gross margin, excluding subcontractor costs, was 58.4%, up 10 basis points driven by improved pricing and strong operational execution; operating margin, excluding subcontractor costs, was 8.4%, up 210 basis points.
- Net loss was
$8.1 million . Adjusted net income(1) was$17.2 million , or$0.44 per share which excludes$19.5 million of amortization of intangible assets,$4.2 million of non-recurring expenses, and$1.5 million of non-cash change in fair value of contingent consideration. - Adjusted EBITDA(2) was up 19.2% to
$87.2 million . Adjusted EBITDA margin, excluding subcontractor costs was a record 18.3%, up 150 basis points.
“We closed out a strong year with solid fourth quarter 2022 results, highlighted by 7% organic growth for the full year, record Adjusted EBITDA margin and 8.5% year-over-year backlog growth as we continued to benefit from our growth strategy and favorable end-market dynamics,” said
“In January, we announced that we reached an agreement to be acquired by
Acquisition by
On
Given the Company’s pending acquisition by
(1) Adjusted net income is a Non-GAAP financial measure. Please see “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of Adjusted Net Income to the most comparable financial measure calculated in accordance with GAAP.
(2) Adjusted EBITDA is a Non-GAAP financial measure. Please see “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of Adjusted EBITDA to the most comparable financial measure calculated in accordance with GAAP.
(3) Net leverage is bank covenant net leverage calculated as (debt –cash) / LTM Adj. EBITDA including the pro forma impact from acquisitions and cost efficiencies.
About
Headquartered in
Forward-Looking Statements
The statements contained in this press release that are not purely historical are forward-looking statements and involve a number of risks and uncertainties. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions, or strategies regarding the future. In addition, any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions and estimates, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and variations of such words and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Such forward-looking statements may include, but are not limited to, statements about the anticipated benefits of the Merger and the expected timing of the completion of the Merger. The forward-looking statements contained in this press release are based on our expectations and beliefs as of the date of this filing concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions or estimates that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those described throughout our annual report on Form 10-K for the year ended
Reconciliation of Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP,
CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands, except per share data) | |||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and equivalents | $ | 5,799 | $ | 10,697 | |||
Accounts receivable, net | 103,442 | 105,362 | |||||
Unbilled receivables, net | 57,178 | 45,924 | |||||
Prepaid expenses | 8,510 | 5,061 | |||||
Other current assets | 5,826 | 4,039 | |||||
Total Current Assets | 180,755 | 171,083 | |||||
Property and equipment, net | 15,028 | 13,757 | |||||
Intangible assets, net | 114,478 | 107,314 | |||||
126,693 | 124,348 | ||||||
Other long-term assets | 50,406 | 4,015 | |||||
TOTAL ASSETS | $ | 487,360 | $ | 420,517 | |||
LIABILITIES AND SHAREHOLDERS' DEFICIT | |||||||
Current Liabilities: | |||||||
Trade accounts payable | $ | 29,758 | $ | 42,521 | |||
Accrued liabilities | 7,617 | 17,124 | |||||
Current maturities of long-term debt | 4,930 | 3,606 | |||||
Other current liabilities | 36,251 | 26,489 | |||||
Total Current Liabilities | 78,556 | 89,740 | |||||
Long-term debt, net of current maturities and loan costs | 499,337 | 462,193 | |||||
Other long-term liabilities | 35,827 | 20,074 | |||||
TOTAL LIABILITIES | 613,720 | 572,007 | |||||
Commitments and Contingencies: | |||||||
Class A common stock | 4 | 3 | |||||
Class B common stock | - | - | |||||
Additional paid in capital | (80,140 | ) | (102,692 | ) | |||
Non-controlling interest | (21,597 | ) | (20,210 | ) | |||
Accumulated other comprehensive income | 11,469 | - | |||||
Retained deficit | (36,096 | ) | (28,591 | ) | |||
TOTAL SHAREHOLDERS' DEFICIT | (126,360 | ) | (151,490 | ) | |||
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ | 487,360 | $ | 420,517 |
STATEMENT OF OPERATIONS | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
Revenues | $ | 150,958 | $ | 145,249 | $ | 604,765 | $ | 538,799 | |||||||
Subtractor costs | (34,666 | ) | (28,912 | ) | (127,691 | ) | (102,035 | ) | |||||||
Other costs of revenues | (44,850 | ) | (49,535 | ) | (198,332 | ) | (181,967 | ) | |||||||
Gross Profit | 71,442 | 66,802 | 278,742 | 254,797 | |||||||||||
116,292 | 116,337 | 477,074 | 436,764 | ||||||||||||
Operating expenses: | |||||||||||||||
Personnel costs and benefits | (27,071 | ) | (26,881 | ) | (137,130 | ) | (128,612 | ) | |||||||
Selling general and administrative | (29,076 | ) | (27,647 | ) | (70,912 | ) | (72,026 | ) | |||||||
Change in fair value of earnouts | 1,518 | - | 1,518 | (2,823 | ) | ||||||||||
Depreciation and amortization | (8,060 | ) | (7,229 | ) | (32,177 | ) | (23,700 | ) | |||||||
Total Operating expenses | (62,689 | ) | (61,757 | ) | (238,701 | ) | (227,161 | ) | |||||||
Operating income | 8,753 | 5,045 | 40,041 | 27,636 | |||||||||||
Interest expense | (11,971 | ) | (10,767 | ) | (46,363 | ) | (54,817 | ) | |||||||
Loss before income taxes | (3,218 | ) | (5,722 | ) | (6,322 | ) | (27,181 | ) | |||||||
Income tax expense | (1,006 | ) | (1,883 | ) | (1,748 | ) | (2,524 | ) | |||||||
Net (loss) income | (4,224 | ) | (7,605 | ) | (8,070 | ) | (29,705 | ) | |||||||
Provision for non-controlling interest | 146 | 197 | 565 | 13,216 | |||||||||||
Redeemable preferred stock dividends | - | - | - | (5,899 | ) | ||||||||||
Net (loss) attributable to Class A common stock shareholders/members | $ | (4,078 | ) | $ | (7,408 | ) | $ | (7,505 | ) | $ | (22,388 | ) | |||
(Loss) Per Class A Common Share | $ | (0.11 | ) | $ | (0.22 | ) | $ | (0.21 | ) | $ | (0.81 | ) | |||
Weighted average of shares outstanding: | |||||||||||||||
Class A common shares (basic and diluted) | 37,774,971 | 33,630,586 | 36,308,926 | 27,799,511 |
STATEMENT OF CASH FLOWS | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
For the three months ended | For the year ended | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net loss | $ | (4,224 | ) | $ | (7,605 | ) | $ | (8,070 | ) | $ | (29,705 | ) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 8,060 | 7,208 | 32,177 | 23,679 | ||||||||||||
Equity-based compensation expense | 2,661 | 1,173 | 7,404 | 3,627 | ||||||||||||
Interest expense, paid in kind | 2,460 | 856 | 2,460 | 6,392 | ||||||||||||
Gain on sale of property and equipment | (365 | ) | (53 | ) | (365 | ) | (21 | ) | ||||||||
Write-off of deferred financing costs related to debt extinguishment | - | - | - | 15,197 | ||||||||||||
Amortization of deferred financing costs | 455 | 320 | 1,292 | 1,248 | ||||||||||||
Provision for bad debts | 1,014 | 439 | 1,014 | 36 | ||||||||||||
Changes in assets & liabilities: | ||||||||||||||||
(Increase) decrease in accounts receivable and unbilled receivable | 9,106 | 4,340 | 2,539 | (2,629 | ) | |||||||||||
Decrease (increase) in prepaid expenses | (3,341 | ) | 107 | (7,057 | ) | (1,523 | ) | |||||||||
Increase in other current assets | (1,814 | ) | (1,908 | ) | (1,480 | ) | (187 | ) | ||||||||
Increase in trade accounts payable | (7,281 | ) | 10,956 | (13,330 | ) | 13,261 | ||||||||||
Increase (decrease) in accrued liabilities | (3,590 | ) | 6,966 | (12,741 | ) | (3,320 | ) | |||||||||
Increase (decrease) in other current and long-term liabilities | 13,201 | 3,545 | (1,468 | ) | 2,806 | |||||||||||
Decrease in other long-term assets | (177 | ) | 506 | (177 | ) | 243 | ||||||||||
Net cash provided by operating activities | 16,165 | 26,850 | 2,198 | 29,104 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchases of property and equipment | (1,127 | ) | (1,549 | ) | (8,410 | ) | (3,956 | ) | ||||||||
Proceeds from disposal of property and equipment | 440 | 62 | 440 | 78 | ||||||||||||
Purchase of business, net of cash acquired | (3,131 | ) | (1,670 | ) | (30,150 | ) | (32,669 | ) | ||||||||
Net cash used in investing activities | (3,818 | ) | (3,157 | ) | (38,120 | ) | (36,547 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds from issuance of debt | - | - | 26,000 | 496,754 | ||||||||||||
Payment of loan acquisition costs | (650 | ) | (46 | ) | (650 | ) | (8,589 | ) | ||||||||
Repayments of debt | (1,232 | ) | - | (3,632 | ) | (294,463 | ) | |||||||||
Net (proceeds) payments on revolving line of credit | (12,065 | ) | (17,916 | ) | 12,998 | (29,760 | ) | |||||||||
Payment of contingent earnout | (1,230 | ) | - | (2,870 | ) | (1,706 | ) | |||||||||
Distributions to non-controlling interests | (822 | ) | 451 | (822 | ) | (787 | ) | |||||||||
Payment of redeemable preferred stock dividends | - | - | - | (1,185 | ) | |||||||||||
Repayment of redeemable preferred stock | - | - | - | (156,186 | ) | |||||||||||
Net cash (used in) provided by financing activities | (15,999 | ) | (17,511 | ) | 31,024 | 4,078 | ||||||||||
Net change in cash and equivalents | (3,652 | ) | 6,182 | (4,898 | ) | (3,365 | ) | |||||||||
- | ||||||||||||||||
Cash and equivalents - beginning of period | 9,451 | 4,515 | 10,697 | 14,062 | ||||||||||||
Cash and equivalents - end of period | $ | 5,799 | $ | 10,697 | $ | 5,799 | $ | 10,697 |
Amounts in thousands | ||||||||
For the quarters ended | ||||||||
(Unaudited) | ||||||||
Net Income (loss) | $ | (4,224 | ) | $ | (7,605 | ) | ||
Interest | 11,971 | 10,767 | ||||||
Taxes | 1,006 | 1,883 | ||||||
Depreciation and amortization | 8,860 | 7,208 | ||||||
EBITDA | 17,613 | 12,253 | ||||||
Other non-recurring expenses(1) | 2,694 | 3,085 | ||||||
Non-cash change in fair value of contingent consideration | 1,518 | 3,028 | ||||||
Non-cash equity compensation(2) | 2,001 | 2,300 | ||||||
Adjusted EBITDA | $ | 23,826 | $ | 20,666 | ||||
(1) Includes acquisition related professional fees and other non-recurring legal and professional fees. | ||||||||
(2) Includes the amortization of unvested restricted share units, performance share units and stock options granted in 2020, 2021 and 2022 to key management personnel and our compensation to our Board of Directors. |
Amounts in thousands | ||||||||
For the quarters ended | ||||||||
(Unaudited) | ||||||||
Net Income (loss) | $ | (4,224 | ) | $ | (7,605 | ) | ||
Amortization of intangible assets | 2,810 | 4,300 | ||||||
Other non-recurring expenses | 2,694 | 3,085 | ||||||
Non-cash change in fair value of contingent consideration | 1,518 | 3,028 | ||||||
Income tax expense | - | - | ||||||
Adjusted net income | $ | 2,798 | $ | 2,808 | ||||
(Unaudited) | ||||||||
Net Income (loss) | $ | (0.11 | ) | $ | (0.21 | ) | ||
Amortization of intangible assets | 0.07 | 0.12 | ||||||
Other non-recurring expenses | 0.07 | 0.08 | ||||||
Non-cash change in fair value of contingent consideration | 0.04 | 0.08 | ||||||
Income tax expense | - | - | ||||||
Adjusted EPS | $ | 0.07 | $ | 0.08 | ||||
Total shares outstanding Class A and B common shares (basic and diluted): | 39,179 | 36,973 | ||||||
Contacts:
Media
770-314-5270
karlene.barron@oneatlas.com
Investor Relations
512-851-1507
ir@oneatlas.com
Source:
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