nvee-20240330

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________________

FORM 10-Q

_______________________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 30, 2024


☐			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 001-35849

_______________________________________________________

NV5 Global, Inc.

(Exact name of registrant as specified in its charter)

_______________________________________________________

Delaware

45-3458017

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

200 South Park Road,

Suite 350

Hollywood,

Florida

33021

(Address of principal executive offices)

(Zip Code)

(954) 495-2112

(Registrant’s telephone number, including area code)

_______________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

NVEE

The NASDAQ Stock Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated Filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 3, 2024, there were 16,145,926 shares outstanding of the registrant’s common stock, $0.01 par value.

NV5 GLOBAL, INC.

INDEX


		Page

PART I – FINANCIAL INFORMATION

ITEM 1	FINANCIAL STATEMENTS	1

	Consolidated Balance Sheets (unaudited)	1

	Consolidated Statements of Net Income and Comprehensive Income (Loss) (unaudited)	2

	Consolidated Statement of Changes in Stockholders’ Equity (unaudited)	3

	Consolidated Statements of Cash Flows (unaudited)	4

	Notes to Consolidated Financial Statements (unaudited)	6

ITEM 2	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	19
ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	25
ITEM 4	CONTROLS AND PROCEDURES	25

PART II – OTHER INFORMATION

ITEM 1	LEGAL PROCEEDINGS	26
ITEM 1A	RISK FACTORS	26
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	26
ITEM 3	DEFAULTS UPON SENIOR SECURITIES	26
ITEM 4	MINE SAFETY DISCLOSURES	26
ITEM 5	OTHER INFORMATION	26
ITEM 6	EXHIBITS	27

SIGNATURES		28

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

NV5 Global, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share data)


	March 30, 2024		December 30, 2023
Assets
Current assets:
Cash and cash equivalents	$	44,766	$	44,824
Billed receivables, net	149,206		152,593
Unbilled receivables, net	120,705		113,271
Prepaid expenses and other current assets	17,435		18,376
Total current assets	332,112		329,064
Property and equipment, net	54,103		50,268
Right-of-use lease assets, net	37,942		36,836
Intangible assets, net	246,074		226,702
Goodwill	536,908		524,573
Deferred income tax assets, net	2,339		—
Other assets	2,479		3,149
Total assets	$	1,211,957	$	1,170,592

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	52,781	$	54,865
Accrued liabilities	53,999		47,423

Billings in excess of costs and estimated earnings on uncompleted contracts	40,212		41,679
Other current liabilities	2,167		2,263
Current portion of contingent consideration	3,436		3,922
Current portion of notes payable and other obligations	9,634		9,267
Total current liabilities	162,229		159,419
Contingent consideration, less current portion	1,610		143
Other long-term liabilities	27,564		26,930
Notes payable and other obligations, less current portion	237,274		205,468
Deferred income tax liabilities, net	—		2,837
Total liabilities	428,677		394,797

Commitments and contingencies

Stockholders’ equity:
Preferred stock, $0.01 par value; 5,000,000 shares authorized, no shares issued and outstanding	—		—
Common stock, $0.01 par value; 45,000,000 shares authorized, 15,953,908 and 15,895,255 shares issued and outstanding as of March 30, 2024 and December 30, 2023, respectively	160		159
Additional paid-in capital	515,833		508,256
Accumulated other comprehensive loss	(519)		(18)
Retained earnings	267,806		267,398
Total stockholders’ equity	783,280		775,795
Total liabilities and stockholders’ equity	$	1,211,957	$	1,170,592

See accompanying notes to consolidated financial statements (unaudited).

NV5 Global, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(in thousands, except share data)


	Three Months Ended
	March 30, 2024		April 1, 2023
Gross revenues	$	213,295	$	184,317

Direct costs:
Salaries and wages	56,454		48,384
Sub-consultant services	31,260		27,615
Other direct costs	12,753		12,320
Total direct costs	100,467		88,319

Gross profit	112,828		95,998

Operating expenses:
Salaries and wages, payroll taxes, and benefits	65,434		52,672
General and administrative	22,243		17,920
Facilities and facilities related	5,960		5,374
Depreciation and amortization	14,482		11,047
Total operating expenses	108,119		87,013

Income from operations	4,709		8,985

Interest expense	(4,191)		(1,581)

Income before income tax expense	518		7,404
Income tax expense	(110)		(1,457)
Net income	$	408	$	5,947

Earnings per share:
Basic	$	0.03	$	0.40
Diluted	$	0.03	$	0.39

Weighted average common shares outstanding:
Basic	15,267,151		14,883,487
Diluted	15,634,026		15,383,437

Comprehensive income (loss):
Net income	$	408	$	5,947
Foreign currency translation losses, net of tax	(501)		—
Comprehensive income (loss)	$	(93)	$	5,947

See accompanying notes to consolidated financial statements (unaudited).

NV5 Global, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

(in thousands, except share data)


	Three Months Ended
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings
	Shares	Amount								Total
Balance, December 31, 2022	15,523,300	$	155	$	471,300	$	—	$	222,785	$	694,240
Stock-based compensation	—	—		5,212		—		—		5,212
Restricted stock issuance, net	63,548	1		(1)		—		—		—
Stock issuance for acquisitions	121,345	1		14,470		—		—		14,471
Net income	—	—		—		—		5,947		5,947
Balance, April 1, 2023	15,708,193	$	157	$	490,981	$	—	$	228,732	$	719,870

Balance, December 30, 2023	15,895,255	$	159	$	508,256	$	(18)	$	267,398	$	775,795
Stock-based compensation	—	—		5,718		—		—		5,718
Restricted stock issuance, net	40,002	—		—		—		—		—

Stock issuance for acquisitions	18,651	1		1,859		—		—		1,860


Other comprehensive loss	—	—		—		(501)		—		(501)
Net income	—	—		—		—		408		408
Balance, March 30, 2024	15,953,908	$	160	$	515,833	$	(519)	$	267,806	$	783,280

See accompanying notes to consolidated financial statements (unaudited).

NV5 Global, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)


	Three Months Ended
	March 30, 2024		April 1, 2023
Cash flows from operating activities:
Net income	$	408	$	5,947
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	16,043		12,302
Non-cash lease expense	3,293		3,286
Provision for doubtful accounts	491		240
Stock-based compensation	6,666		5,826
Change in fair value of contingent consideration	—		(859)
Gain on disposals of property and equipment	(3)		(23)
Other	(67)		—
Deferred income taxes	(5,175)		(5,603)
Amortization of debt issuance costs	185		194
Changes in operating assets and liabilities, net of impact of acquisitions:
Billed receivables	7,283		9,560
Unbilled receivables	(5,727)		(13,999)
Prepaid expenses and other assets	1,496		4,857
Accounts payable	(3,584)		(15,884)
Accrued liabilities and other long-term liabilities	675		2,375

Billings in excess of costs and estimated earnings on uncompleted contracts	(1,516)		3,906
Contingent consideration	(815)		(800)
Other current liabilities	(99)		(43)
Net cash provided by operating activities	19,554		11,282

Cash flows from investing activities:
Cash paid for acquisitions (net of cash received from acquisitions)	(45,334)		(117,587)
Proceeds from sale of assets	22		—
Purchase of property and equipment	(3,673)		(6,110)
Net cash used in investing activities	(48,985)		(123,697)

Cash flows from financing activities:

Borrowings from Senior Credit Facility	35,000		110,000
Payments on notes payable and other obligations	(4,380)		(4,085)
Payments of contingent consideration	(1,025)		(700)




Net cash provided by financing activities	29,595		105,215

Effect of exchange rate changes on cash and cash equivalents	(222)		—

Net decrease in cash and cash equivalents	(58)		(7,200)
Cash and cash equivalents – beginning of period	44,824		38,541
Cash and cash equivalents – end of period	$	44,766	$	31,341

See accompanying notes to consolidated financial statements (unaudited).

NV5 Global, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)


	Three Months Ended
	March 30, 2024		April 1, 2023
Non-cash investing and financing activities:
Contingent consideration (earn-out)	$	2,821	$	325
Notes payable and other obligations issued for acquisitions	$	465	$	7,404
Stock issuance for acquisitions	$	1,860	$	14,471

Finance leases	$	903	$	232

See accompanying notes to consolidated financial statements (unaudited).

NV5 Global, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except share data)

Note 1 – Organization and Nature of Business Operations

Business

NV5 Global, Inc. and its subsidiaries (collectively, the “Company” or “NV5 Global”) is a provider of technology, conformity assessment, consulting solutions, and software applications to public and private sector clients in the infrastructure, utility services, construction, real estate, environmental, and geospatial markets, operating nationwide and abroad. The Company’s clients include the U.S. Federal, state and local governments, and the private sector. NV5 Global provides a wide range of services, including, but not limited to:


●	Utility services	●	Commissioning
●	LNG services	●	Building program management
●	Engineering	●	Environmental health & safety
●	Civil program management	●	Real estate transaction services
●	Surveying	●	Energy efficiency & clean energy services
●	Construction quality assurance	●	Mission critical services
●	Code compliance consulting	●	3D geospatial data modeling
●	Forensic services	●	Environmental & natural resources
●	Litigation support	●	Robotic survey solutions
●	Ecological studies	●	Geospatial data applications & software
●	MEP & technology design

Fiscal Year

The Company operates on a "52/53 week" fiscal year ending on the Saturday closest to the calendar quarter end.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The consolidated financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for reporting of interim financial information. Pursuant to such rules and regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

In the opinion of management, the accompanying unaudited interim consolidated financial statements of the Company contain all adjustments necessary to present fairly the financial position and results of operations of the Company as of the dates and for the periods presented. Accordingly, these statements should be read in conjunction with the consolidated financial statements and notes contained in the Company’s Annual Report on Form 10-K for the year ended December 30, 2023 (the “2023 Form 10-K”). The results of operations and cash flows for the interim periods presented are not necessarily indicative of the results to be expected for any future interim period or for the full 2024 fiscal year.

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NV5 Global, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except share data)

Performance Obligations

To determine the proper revenue recognition method, the Company evaluates whether two or more contracts should be combined and accounted for as one single contract and whether the combined or single contract should be accounted for as more than one performance obligation. The majority of the Company's contracts have a single performance obligation as the promise to transfer the individual goods or services that is not separately identifiable from other promises in the contracts and therefore, is not distinct.

The Company’s performance obligations are satisfied as work progresses or at a point in time. Revenue on the Company's cost-reimbursable contracts is recognized over time using direct costs incurred or direct costs incurred to date as compared to the estimated total direct costs for performance obligations because it depicts the transfer of control to the customer. Contract costs include labor, sub-consultant services, and other direct costs.

Gross revenue from services transferred to customers at a point in time is recognized when the customer obtains control of the asset, which is generally upon delivery and acceptance by the customer of the reports and/or analysis performed.

As of March 30, 2024, the Company had $1,047,250 of remaining performance obligations, of which $771,383 is expected to be recognized over the next 12 months and the majority of the balance over the next 24 months. Contracts for which work authorizations have been received are included in performance obligations. Performance obligations include only those amounts that have been funded and authorized and does not reflect the full amounts the Company may receive over the term of such contracts. In the case of non-government contracts and project awards, performance obligations include future revenue at contract or customary rates, excluding contract renewals or extensions that are at the discretion of the client. For contracts with a not-to-exceed maximum amount, the Company includes revenue from such contracts in performance obligations to the extent of the remaining estimated amount.

Contract Balances

The timing of revenue recognition, billings, and cash collections results in billed receivables, unbilled receivables (contract assets), and billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities) on the Consolidated Balance Sheet. The liability “Billings in excess of costs and estimated earnings on uncompleted contracts” represents billings in excess of revenues recognized on these contracts as of the reporting date. This liability is generally classified as current. During the three months ended March 30, 2024 the Company performed services and recognized $22,417 of revenue related to its contract liabilities that existed as of December 30, 2023.

Goodwill and Intangible Assets

Goodwill is the excess of consideration paid for an acquired entity over the amounts assigned to assets acquired, including other identifiable intangible assets and liabilities assumed in a business combination. To determine the amount of goodwill resulting from a business combination, the Company performs an assessment to determine the acquisition date fair value of the acquired company’s tangible and identifiable intangible assets and liabilities.

Goodwill is required to be evaluated for impairment on an annual basis or whenever events or changes in circumstances indicate the asset may be impaired. An entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. These qualitative factors include macroeconomic and industry conditions, cost factors, overall financial performance, and other relevant entity-specific events. If the entity determines that this threshold is met, then the Company applies a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The Company determines fair value through multiple valuation techniques, and weights the results accordingly. Subjective and complex judgments are required in assessing whether an event of impairment of goodwill has occurred, including assumptions and estimates used to determine the fair value of its reporting units. The Company has elected to perform its annual goodwill impairment review as of August 1 of each year. The Company conducts its annual impairment tests on the goodwill using the quantitative method of evaluating goodwill.

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NV5 Global, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except share data)

As of August 1, 2023, the Company conducted its annual impairment tests using the quantitative method of evaluating goodwill. Based on the quantitative analyses the Company determined the fair value of each of the reporting units exceeded its carrying value. Therefore, the goodwill was not impaired and the Company did not recognize an impairment charge relating to goodwill as of August 1, 2023. Furthermore, there were no indicators, events, or changes in circumstances that would indicate goodwill was impaired during the period from August 2, 2023 through March 30, 2024.

Identifiable intangible assets primarily include customer backlog, customer relationships, trade names, non-compete agreements, and developed technology. Amortizable intangible assets are amortized on a straight-line basis over their estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the assets may be impaired. If an indicator of impairment exists, the Company compares the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then impairment, if any, is measured as the difference between fair value and carrying value, with fair value typically based on a discounted cash flow model. There were no indicators, events, or changes in circumstances that would indicate intangible assets were impaired during the three months ended March 30, 2024. See Note 8, Goodwill and Intangible Assets, for further information on goodwill and identified intangibles.

There have been no material changes in the Company's significant accounting policies described in the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 30, 2023.

Note 3 – Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

None.

Accounting Pronouncements Not Yet Adopted

Segment Reporting

In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures ("ASU 2023-07"). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker ("CODM") and included within each reported measure of a segment's profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of the segment's profit or loss in assessing performance and deciding how to allocate resources. This ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2023-07 and expects it to result in additional disclosures when adopted.

Income Taxes

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures ("ASU 2023-09"). This ASU requires disaggregated information about a reporting entity's effective tax rate reconciliations as well as additional information on income taxes paid. This ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the impact of adopting ASU 2023-09 and expects it to result in additional disclosures when adopted.

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NV5 Global, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except share data)

SEC Climate Disclosures

In March 2024, the SEC adopted rules to enhance and standardize disclosures related to the impacts and risks of climate-related matters. Under the new rules, an entity will be required to disclose information about climate-related risks that have materially impacted, or are likely to have a material impact, on its business strategy, results of operations, or financial condition. In addition, certain disclosures related to severe weather events, other natural conditions, and material greenhouse gas emissions will be required in the audited financial statements. This guidance is effective prospectively and is effective for annual periods beginning with the year ending December 31, 2025. On April 4, 2024, the SEC announced that it will stay implementation of its final rule pending the results of a legal challenge. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.

Note 4 – Earnings per Share

Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period, excluding unvested restricted shares. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. The effect of potentially dilutive securities is not considered during periods of loss or if the effect is anti-dilutive.

The weighted average number of shares outstanding in calculating basic earnings per share for the three months ended March 30, 2024 and April 1, 2023 exclude 659,765 and 705,953 non-vested restricted shares, respectively. During the three months ended March 30, 2024 and April 1, 2023, there were 5,559 and 34,633 weighted average securities, respectively, which are not included in the calculation of diluted weighted average shares outstanding because their impact is anti-dilutive or their performance conditions have not been met.

The following table represents a reconciliation of the net income and weighted average shares outstanding for the calculation of basic and diluted earnings per share:


	Three Months Ended
	March 30, 2024		April 1, 2023
Numerator:
Net income – basic and diluted	$	408	$	5,947

Denominator:
Basic weighted average shares outstanding	15,267,151		14,883,487
Effect of dilutive non-vested restricted shares and units	339,825		478,261
Effect of issuable shares related to acquisitions	27,050		21,689
Diluted weighted average shares outstanding	15,634,026		15,383,437

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NV5 Global, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except share data)

Note 5 – Business Acquisitions

2024 Acquisitions

The Company has completed two acquisitions during 2024. The aggregate purchase price for the two acquisitions was $51,646, including $46,500 in cash, $2,325 of the Company's common stock, and a potential earn-out of up to $12,500 payable in cash, which has been recorded at an estimated fair value of $2,821. The cash portion of the purchase price and other related costs associated with the transaction were partially financed through the Company's amended and restated credit agreement (the "Second A&R Credit Agreement" or "Senior Credit Facility") with Bank of America, N.A. and other lenders party thereto. See Note 10, Notes Payable and Other Obligations, for further detail on the Second A&R Credit Agreement. An option-based model was used to determine the fair value of the earn-out, 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, the Company engaged an independent third-party valuation specialist to assist in the determination of fair values. The final determination of the fair values of assets and liabilities will be completed within the one-year measurement period as required by ASC 805. The 2024 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, prepaid expenses, and certain liabilities.

2023 Acquisitions

On April 6, 2023, the Company acquired all of the outstanding equity interests in the Visual Information Solutions commercial geospatial technology and software business ("VIS") from L3Harris. VIS is a provider of subscription-based software solutions for the analysis and management of software applications and Analytics as a Service (AaaS) solutions. The Company acquired VIS for a cash purchase price of $75,371. The purchase price and other related costs associated with the transaction were financed through the Company's Second A&R Credit Agreement. In order to determine the fair values of tangible and intangible assets acquired and liabilities assumed, the Company 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 acquisition 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 deferred tax liabilities.

On February 22, 2023, the Company acquired all of the outstanding equity interests in Continental Mapping Acquisition Corp. and its subsidiaries, including Axim Geospatial, LLC (collectively "Axim"), a provider of comprehensive geospatial services and solutions addressing critical mission requirements for customers across the defense and intelligence and state and local government sectors. The aggregate purchase price of the acquisition was $139,569, including $119,736 in cash, a $6,333 promissory note, and $13,500 of the Company's common stock. The cash portion of the purchase price and other related costs associated with the transaction were financed through the Company's Second A&R Credit Agreement. In order to determine the fair values of tangible and intangible assets acquired and liabilities assumed, the Company 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 was completed within the one-year measurement period as required by ASC 805.

The Company completed five other acquisitions during 2023. The aggregate purchase price for the five acquisitions was $9,477, including $8,000 in cash, $867 of the Company's common stock, and a potential earn-out of up to $640 payable in cash, which has been recorded at an estimated fair value of $610. A probability-weighted approach was used to determine the fair value of the earn-out, which is a generally accepted valuation technique that embodies all significant assumption types. 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 2023 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 deferred tax liabilities.

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NV5 Global, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except share data)

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date for the acquisitions closed during the three months ended March 30, 2024 and the fiscal year ended December 30, 2023:


	2024		2023
	Total		VIS		Axim		Other		Total
Cash	$	1,166	$	7,027	$	5,419	$	1,316	$	13,762
Billed and unbilled receivables, net	6,093		5,042		13,937		1,609		20,588
Right-of-use assets	2,583		2,162		1,643		552		4,357
Property and equipment	1,762		118		2,870		38		3,026
Prepaid expenses	216		1,503		1,180		17		2,700
Other assets	35		—		156		2		158
Intangible assets:
Customer relationships	24,702		35,626		53,518		2,526		91,670
Trade name	708		3,025		2,266		210		5,501
Customer backlog	3,648		894		3,862		943		5,699
Developed technology	—		4,024		2,185		—		6,209
Non-compete	2,433		26		580		254		860
Total Assets	$	43,346	$	59,447	$	87,616	$	7,467	$	154,530
Liabilities	(3,950)		(16,535)		(13,668)		(2,297)		(32,500)
Deferred tax liabilities	—		(8,728)		(12,428)		(496)		(21,652)
Net assets acquired	$	39,396	$	34,184	$	61,520	$	4,674	$	100,378

Consideration paid (Cash, Notes and/or stock)	$	48,825	$	75,371	$	139,569	$	8,867	$	223,807
Contingent earn-out liability (Cash and stock)	2,821		—		—		610		610
Total Consideration	$	51,646	$	75,371	$	139,569	$	9,477	$	224,417
Excess consideration over the amounts assigned to the net assets acquired (Goodwill)	$	12,250	$	41,187	$	78,049	$	4,803	$	124,039

Goodwill was recorded based on the amount by which the purchase price exceeded the fair value of the net assets acquired and the amount is attributable to the reputation of the business acquired, the workforce in place and the synergies to be achieved from these acquisitions. See Note 8, Goodwill and Intangible Assets, for further information on fair value adjustments to goodwill and identified intangibles.

The consolidated financial statements of the Company include the results of operations from any business acquired from their respective dates of acquisition. The following table presents the results of operations of businesses acquired from their respective dates of acquisition for the three months ended March 30, 2024 and April 1, 2023.


	Three Months Ended
	March 30, 2024		April 1, 2023
Gross revenues	$	5,660	$	7,474
Income before income taxes	$	2,076	$	728

General and administrative expenses for the three months ended March 30, 2024 and April 1, 2023 include acquisition-related costs pertaining to the Company's acquisition activities. Acquisition-related costs were not material to the Company's consolidated financial statements.

Table of Contents

NV5 Global, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except share data)

The following table presents the unaudited, pro forma consolidated results of operations (in thousands, except per share amounts) for the three months ended March 30, 2024 and April 1, 2023 as if the fiscal 2024 and 2023 acquisitions had occurred at the beginning of fiscal year 2023. The pro forma information provided below is compiled from pre-acquisition financial information and includes pro forma adjustments for amortization expense, adjustments to certain expenses, and the income tax impact of these adjustments. The pro forma results are not necessarily indicative of (i) the results of operations that would have occurred had the operations of these acquisitions actually been acquired at the beginning of fiscal year 2023 or (ii) future results of operations:


	Three Months Ended
	March 30, 2024		April 1, 2023
Gross revenues	$	216,029	$	214,320
Net income	$	698	$	4,935
Basic earnings per share	$	0.05	$	0.33
Diluted earnings per share	$	0.04	$	0.32

Adjustments were made to the pro forma results to adjust amortization of intangible assets to reflect fair value of identified assets acquired, to record the effects of financing from the Company's Senior Credit Facility, to record the effects of promissory notes issued, and to record the income tax effect of these adjustments.

Note 6 – Billed and Unbilled Receivables

Billed and unbilled receivables consists of the following:


	March 30, 2024		December 30, 2023
Billed receivables	$	152,638	$	155,988
Less: allowance for doubtful accounts	(3,432)		(3,395)
Billed receivables, net	$	149,206	$	152,593

Unbilled receivables	$	123,003	$	115,545
Less: allowance for doubtful accounts	(2,298)		(2,274)
Unbilled receivables, net	$	120,705	$	113,271

Note 7 – Property and Equipment, net

Property and equipment, net, consists of the following:


	March 30, 2024		December 30, 2023
Office furniture and equipment	$	4,050	$	3,487
Computer equipment	33,861		31,999
Survey and field equipment	67,176		62,553
Leasehold improvements	7,210		6,881
Total	112,297		104,920
Less: accumulated depreciation	(58,194)

SEC Form 10-Q filed by NV5 Global Inc.