NV5 Global, Inc. (NASDAQ:NVEE) Q2 2023 Earnings Call Transcript

Andy Wittmann: Got it. Ed, you mentioned the $5.3 million net. I was wondering sometimes you do actually have positive expenses on that, you did some acquisitions in the quarter. So what was the gross number for now?

Edward Codispoti: $6.25 million was the reversal. And like you said we had positive expense going the other way. So $6.25 million was a reversal and $5.3 million was the net.

Andy Wittmann: Got it, yeah. Okay. That’s helpful. And then I was just wondering just in terms of the cash flow, because you did have some working capital build here. You talked about timing. I guess, what are you guys now thinking for the year? And some of the things that got you in the quarter for working capital usage have you collected those items here as it stands here in early August in the third quarter?

Edward Codispoti: Yeah. I would expect for working capital to — the impact of working capital in terms of the cash flows in the second half to improve. What happens oftentimes when you have on acquisition the size of Axim is that the weeks following and the first few months following the acquisition you’re — the AR collections and certain working capital components may not fall into place during that immediate post-acquisition post-closing period. And so I think that will recover during the second half and we should see improvements in our cash flow from operations.

Andy Wittmann: Got it. Okay. Then just my final question. I guess, I just want to try to understand the level of confidence you have here in the second half, because for the first half of the year earnings are down slightly, you guys talked about a 7% organic growth rate, which would suggest that your back half organic growth rate to make 7% for the year would have to be into the double digits given that you started out a little down on the first half of the year. So what are the business lines that you’re seeing accelerate to the degree needed to at these levels for the second half?

Dickerson Wright: Well, this is Dick. Thanks Andy. I think if you’re just — you’re not just — we’re not just relying purely on organic growth but total growth. So there will be some acquisitions also that will be part. It looks like it was going to be just pure organic would have to be a growth rate of 13%, but we’re not expecting that. It does not show any revenue or input from a recent acquisition we just read. And so it will look for us to depend both on the organic growth of the company and growth that we may do through acquisitions. As far as the specific areas that we’re looking at, I don’t want to get too specific but we are still looking at — we have phenomenal opportunities in technology for acquisitions and the geospatial area technology areas such as Red and also we are looking for some very good opportunities in our core business.

So those we all anticipate not knowing if all of those will come in, but we certainly anticipate some of those to help the second half of the year.

Andy Wittmann: Okay. I just want to make sure that I’m clear on that then. So just as it relates to the guidance, did I hear you say that Red is not in the guidance? And are there — if that’s right or wrong, but then comment on that. But did you also — are you also suggesting that there are acquisitions in guidance that are not announced publicly? Is that what you’re saying?