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

Dickerson Wright: I’m not saying neither. But what I — so let me say what I did say. Red, of course, is included in our guidance because we have it. It was not included in the revenue that was reported because we didn’t own it at the time. But it’s certainly the revenue we’re expecting is in the guidance for the second half of the year. And we’re assuming — I’m just saying, if you look at the model and look at what we’ve done and look at the guidance, then you’re assuming that, all — collectively not you personally, but collectively, one would assume that it’s just going to be organic growth. I’m saying that we are both active in acquisitions and organic growth. So you’d have to look at a combination of that and that’s why we have a little bit more of a comfort level with our guidance given for the rest of the year.

Andy Wittmann: Okay. That makes sense. Okay. Thank you, very much. Have a good night.

Dickerson Wright: Thank you.

Edward Codispoti: Thank you.

Operator: [Operator Instructions] Your next question comes from David Marsh, Singular Research. David, go ahead.

David Marsh: Hi guys. Thanks for taking my questions. Just to follow up a little bit on that last question. Especially in regards to your top line guidance being maintained and how we think about the business and potential seasonality, would there still be an expectation that the fourth quarter would be a little bit lighter than the third quarter from a revenue perspective?

Dickerson Wright: Well, if we were looking at things in the rearview mirror and it’s always been that our fourth quarter is not as strong as the third quarter. However, the fourth quarter can be — is really — is affected by many things. It’s affected by weather, it’s affected by what accruals we may have in place and what we’ve left, but the fourth quarter in the — it’s not as weak as the first quarter, but it’s certainly not usually as strong. We just — but we can’t make any assumptions.

Edward Codispoti: In this case, the growth — this particular year, as Dick mentioned, the fourth quarter is always — it could go either way, right? But in this particular year, the way we see the backlog rolling out, we see Q3 revenue and Q4 revenue very similar in terms of their run rate.

Dickerson Wright: And it’s also dependent on weather.

David Marsh: So, I mean to meet that top line number as was alluded to by some of the previous callers, I mean you’re going to have to put up some pretty sizable numbers here in the second half. And I guess, I’d just like to understand, where you get the confidence in terms of — just in terms of the pipeline and the backlog that it’s going to come through kind of this quickly in order to be able to help you meet those numbers. Just really don’t want to see you guys have to use here in the future.

Dickerson Wright: Well, obviously, we have more confidence that you seem to have. We work here, so we get to see things a little, a little bit clearer than you may have seen things. But we expect — we’ve had a history of meeting our guidance and we feel comfortable with what can be expected. We certainly see things that perhaps you have — you don’t have the ability to see right now and we may have an advantage there.

David Marsh: Sure. Sure. Absolutely. And then just kind of turning to the balance sheet a little bit. Obviously, you guys have a little bit of leverage here to make some of these recent acquisitions, particularly some of the bigger ones. Would the expectation be that as you generate positive free cash flow, you’ll pay down that debt. And what’s kind of — what would you say is your kind of ideal debt profile for the company?