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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 July 3, 2021
OR
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)
_______________________________________________________
Delaware45-3458017
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
200 South Park Road,Suite 350
Hollywood,Florida33021
(Address of principal executive offices)(Zip Code)

(954495-2112
(Registrant’s telephone number, including area code)
_______________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueNVEEThe 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 August 6, 2021, there were 15,381,617 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


NV5 Global, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share data)
July 3, 2021January 2, 2021
Assets
Current assets:  
Cash and cash equivalents$113,023 $64,909 
Billed receivables, net109,122 142,705 
Unbilled receivables, net83,586 74,458 
Prepaid expenses and other current assets11,013 6,804 
Total current assets316,744 288,876 
Property and equipment, net29,444 27,011 
Right-of-use lease assets, net44,196 43,607 
Intangible assets, net175,093 174,931 
Goodwill364,562 343,796 
Other assets3,364 2,954 
Total assets$933,403 $881,175 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$38,446 $39,989 
Accrued liabilities47,319 45,325 
Billings in excess of costs and estimated earnings on uncompleted contracts16,805 24,962 
Client deposits706 380 
Current portion of contingent consideration3,933 1,334 
Current portion of notes payable and other obligations26,989 24,196 
Total current liabilities134,198 136,186 
Contingent consideration, less current portion1,374 1,066 
Other long-term liabilities39,762 38,737 
Notes payable and other obligations, less current portion142,347 283,326 
Deferred income tax liabilities, net29,736 27,791 
Total liabilities347,417 487,106 
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, 15,365,382 and 13,270,131 shares issued and outstanding as of July 3, 2021 and January 2, 2021, respectively
154 133 
Additional paid-in capital441,049 268,271 
Retained earnings144,783 125,665 
Total stockholders’ equity585,986 394,069 
Total liabilities and stockholders’ equity$933,403 $881,175 
See accompanying notes to consolidated financial statements (unaudited).
2


NV5 Global, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
(in thousands, except share data)
Three Months EndedSix Months Ended
July 3, 2021June 27, 2020July 3, 2021June 27, 2020
Gross revenues$179,503 $162,689 $332,598 $328,169 
Direct costs:
Salaries and wages45,025 45,079 86,485 90,114 
Sub-consultant services29,978 25,244 53,225 52,670 
Other direct costs13,114 8,914 22,912 17,402 
Total direct costs88,117 79,237 162,622 160,186 
Gross profit91,386 83,452 169,976 167,983 
Operating expenses:
Salaries and wages, payroll taxes and benefits44,213 44,149 87,164 89,706 
General and administrative13,367 11,824 24,915 24,980 
Facilities and facilities related5,038 5,357 10,135 10,754 
Depreciation and amortization10,216 11,160 19,656 22,200 
Total operating expenses72,834 72,490 141,870 147,640 
Income from operations18,552 10,962 28,106 20,343 
Interest expense(1,568)(4,403)(3,886)(8,190)
Income before income tax expense16,984 6,559 24,220 12,153 
Income tax expense(3,346)(2,056)(5,102)(3,462)
Net income and comprehensive income$13,638 $4,503 $19,118 $8,691 
Earnings per share:
Basic$0.95 $0.37 $1.40 $0.71 
Diluted$0.91 $0.36 $1.35 $0.69 
Weighted average common shares outstanding:
Basic14,419,671 12,308,965 13,648,247 12,271,221 
Diluted14,965,188 12,609,918 14,196,035 12,601,830 
See accompanying notes to consolidated financial statements (unaudited).
3


NV5 Global, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
(in thousands, except share data)
Three Months Ended
Common StockAdditional
Paid-In
Capital
Retained
Earnings
SharesAmountTotal
Balance, March 28, 202012,874,424 $129 $255,402 $108,835 $364,366 
Stock-based compensation— — 3,501 — 3,501 
Restricted stock issuance, net159,418 1 (1)—  
Stock issuance for acquisitions— — — —  
Net income— — — 4,503 4,503 
Balance, June 27, 202013,033,842 $130 $258,902 $113,338 $372,370 
Balance, April 3, 202114,933,927 $149 $415,895 $131,145 $547,189 
Stock-based compensation— — 4,094 — 4,094 
Restricted stock issuance, net189,520 2 (2)—  
Stock issuance for acquisitions— — (85)— (85)
Proceeds from secondary offering, net of costs241,935 3 21,147 — 21,150 
Net income— — — 13,638 13,638 
Balance, July 3, 202115,365,382 $154 $441,049 $144,783 $585,986 
See accompanying notes to consolidated financial statements (unaudited).























4


NV5 Global, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
(in thousands, except share data)
Six Months Ended
Common StockAdditional
Paid-In
Capital
Retained
Earnings
SharesAmountTotal
Balance, December 28, 201912,852,357 $129 $251,187 $104,647 $355,963 
Stock compensation— — 6,880 — 6,880 
Restricted stock issuance, net163,835 1 (1)—  
Stock issuance for acquisitions12,406 — 558 — 558 
Payment of contingent consideration with common stock5,244 — 278 — 278 
Net income— — — 8,691 8,691 
Balance, June 27, 202013,033,842 $130 $258,902 $113,338 $372,370 
Balance, January 2, 202113,270,131 $133 $268,271 $125,665 $394,069 
Stock-based compensation— — 7,790 — 7,790 
Restricted stock issuance, net203,056 2 (2)—  
Purchases of common stock tendered by employees to satisfy the required withholding taxes related to stock-based compensation(580)— (52)— (52)
Stock issuance for acquisitions35,737 — 3,060 — 3,060 
Proceeds from secondary offering, net of costs1,854,838 19 161,773 — 161,792 
Payment of contingent consideration with common stock2,200 — 209 — 209 
Net income— — — 19,118 19,118 
Balance, July 3, 202115,365,382 $154 $441,049 $144,783 $585,986 
See accompanying notes to consolidated financial statements (unaudited).
5


NV5 Global, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
Six Months Ended
July 3, 2021June 27, 2020
Cash flows from operating activities:
Net income$19,118 $8,691 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization21,936 23,277 
Non-cash lease expense4,884 4,307 
Provision for doubtful accounts583 1,690 
Stock-based compensation7,790 6,880 
Change in fair value of contingent consideration235  
Gain on disposals of property and equipment(581)(350)
Deferred income taxes(2,988)(869)
Amortization of debt issuance costs454 442 
Changes in operating assets and liabilities, net of impact of acquisitions:
Billed receivables36,727 (1,134)
Unbilled receivables(7,238)(2,286)
Prepaid expenses and other assets(4,208)2,117 
Accounts payable(2,446)138 
Accrued liabilities(4,187)1,922 
Income taxes payable 613 
Billings in excess of costs and estimated earnings on uncompleted contracts(8,158)5,241 
Deposits307 66 
Net cash provided by operating activities62,228 50,745 
Cash flows from investing activities:
Cash paid for acquisitions (net of cash received from acquisitions)(21,652) 
Proceeds from sale of assets460 437 
Purchase of property and equipment(4,028)(6,145)
Net cash used in investing activities(25,220)(5,708)
Cash flows from financing activities:
Proceeds from common stock offering172,500  
Payments on notes payable(5,325)(8,415)
Payments of contingent consideration(413)(913)
Payments of borrowings from Senior Credit Facility(145,082)(1,875)
Payments of common stock offering costs(10,522) 
Purchases of common stock tendered by employees to satisfy the required withholding taxes related to stock-based compensation(52) 
Payments of debt issuance costs (447)
Net cash provided by (used in) financing activities11,106 (11,650)
Net increase in cash and cash equivalents48,114 33,387 
Cash and cash equivalents – beginning of period64,909 31,825 
Cash and cash equivalents – end of period$113,023 $65,212 
See accompanying notes to consolidated financial statements (unaudited).
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NV5 Global, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
Six Months Ended
July 3, 2021June 27, 2020
Non-cash investing and financing activities:
Contingent consideration (earn-out)$3,294 $ 
Notes payable and other obligations issued for acquisitions$11,174 $ 
Stock issuance for acquisitions$3,060 $558 
Accrued common stock offering costs$186 $ 
Finance leases$248 $409 
Payment of contingent consideration with common stock$209 $278 
See accompanying notes to consolidated financial statements (unaudited).
7


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 professional and technical engineering and consulting solutions to public and private sector clients in the infrastructure, utility services, construction, real estate, and environmental 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 servicesMEP & technology engineering
LNG servicesCommissioning
EngineeringProgram management
Civil program managementEnvironmental health & safety
SurveyingReal estate transaction services
Testing, inspection & consulting (TIC)Energy efficiency services
Code compliance consulting3D geospatial data modeling
Forensic engineeringEnvironmental & natural resources
Litigation supportRobotic survey solutions
Ecological studiesGeospatial data applications & software
Fiscal Year
    The Company operates on a "52/53 week" fiscal year ending on the Saturday closest to the calendar quarter end, and fiscal 2021 contains 52 weeks compared to fiscal 2020, which contained 53 weeks.
Impact of COVID-19 on Our Business
The COVID-19 pandemic has significantly impacted global stock markets and economies. The Company is closely monitoring the impact of the outbreak of COVID-19 on all aspects of its business, including how it will impact the Company's customers and employees. Some of the Company's services were affected, primarily its Geospatial segment, real estate transactional services and hospitality-related services. In particular, due to COVID-19 restrictions, some of the Company's casino and hotel projects have been delayed. As U.S. and international economies begin to reopen and with a vaccine underway, real estate transactional services have recovered, however the Company is unable to predict the ultimate impact that it may have on its business, future results of operations, financial position, or cash flows. The extent to which the Company's operations may be impacted by the COVID-19 pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge concerning the severity of the outbreak and actions by government authorities to contain the outbreak or treat its impact. The Company intends to continue to monitor the impact of COVID-19 pandemic on its business closely.
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
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(in thousands, except share data)
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 January 2, 2021 (the “2020 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 2021 fiscal year.
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 July 3, 2021, the Company had $678,715 of remaining performance obligations, of which $544,001 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. Most of the Company's government contracts are multi-year contracts for which funding is appropriated on an annual basis, therefore 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. Revenue recognized that was included in the contract liability balance at the beginning of the fiscal year was $4,742 and $23,358 for the three and six months ended July 3, 2021.

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
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(in thousands, except share data)
performance and other relevant entity-specific events. If the entity determines that this threshold is met, then the Company may apply 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. NV5 Global is required to make certain subjective and complex judgments 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.

As of August 1, 2020, 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, 2020. Furthermore, there were no indicators, events or changes in circumstances that would indicate goodwill was impaired during the period from August 2, 2020 through July 3, 2021.
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 six months ended July 3, 2021.

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 January 2, 2021.
Note 3 – Recent Accounting Pronouncements
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) ("ASU 2020-04"). This ASU provides optional expedients and exceptions to the current guidance on contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts and hedging relationships that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued due to reference rate reform. The guidance was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. The Company adopted this ASU upon issuance and there was no impact to its financial statements as a result of the adoption. The Company will apply this guidance to any future modifications to its Credit Agreement that references LIBOR.
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 six months ended July 3, 2021 and June 27, 2020 exclude 830,182 and 612,827 non-vested restricted shares, respectively. During the three and six months ended July 3, 2021, there were 16,894 and 11,805 weighted average securities 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. During the three and six months ended June 27, 2020, there were 180,554 and 177,029 weighted average securities which are not included in the calculation of diluted weighted average shares outstanding because their impact is anti-dilutive.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(in thousands, except share data)
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 EndedSix Months Ended
July 3, 2021June 27, 2020July 3, 2021June 27, 2020
Numerator:
Net income – basic and diluted$13,638 $4,503 $19,118 $8,691 
Denominator:
Basic weighted average shares outstanding14,419,671 12,308,965 13,648,247 12,271,221 
Effect of dilutive non-vested restricted shares and units515,913 245,282 520,824 271,618 
Effect of issuable shares related to acquisitions29,604 55,671 26,964 58,991 
Diluted weighted average shares outstanding14,965,188 12,609,918 14,196,035 12,601,830 

Secondary Offering
On March 10, 2021, the Company priced an underwritten public offering of 1,612,903 shares of its 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, the Company also granted the underwriters a 30-day option to purchase 241,935 additional shares (the "Option Shares") of its common stock at the public offering price. On March 15, 2021, the Company closed on the Firm Shares, for which it received net proceeds of approximately $140,642 after deducting the underwriting discount and estimated offering expenses payable by the Company. On April 13, 2021, the underwriters exercised the Option Shares and the Company received net proceeds of $21,150 after deducting the underwriting discount and estimated offering expenses payable by the Company.
Note 5 Business Acquisitions
2021 Acquisitions
On February 9, 2021 ("IDA Closing Date"), the Company acquired all of the outstanding equity interests in Industrial Design Associates International, Industrial Design Associates International PTE LTD., and IDA Engineering Private Limited (collectively "IDA"), an international engineering services consulting company that provides building commissioning and MEP design services to clients throughout Asia. The aggregate purchase price is $2,955, including $1,975 of cash and a $980 promissory note, payable in two equal installments due on each of the sixth month and twelve month anniversaries of the IDA Closing Date. In order to determine the fair values of tangible and intangible assets acquired and liabilities assumed for IDA, the Company engaged a third-party independent 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 Topic 805, Business Combinations ("ASC 805"). The IDA 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 acquisition date, including intangible assets, accounts receivable, and certain fixed assets.
On February 22, 2021 ("TerraTech Closing Date"), the Company acquired all of the outstanding equity interests in TerraTech Engineers, Inc. ("TerraTech"), a geotechnical engineering, environmental consulting, and materials testing company headquartered in North Carolina. The aggregate purchase price is $7,514, including $3,000 of cash, a $3,200 promissory note (bearing interest at 2.75%), payable in five equal installments of $640 due on the first, second, third, fourth and fifth anniversaries of the TerraTech Closing Date, and $450 of the Company's common stock (5,204 shares) issued at the closing date. The purchase price also includes $864 of the Company's common stock payable in two equal installments due on the first and second anniversaries of the TerraTech Closing Date. In order to determine the fair values of tangible and intangible assets acquired and liabilities assumed for TerraTech, the Company engaged a third-party independent 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 TerraTech acquisition will necessitate the use of this measurement period
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(in thousands, except share data)
to adequately analyze and assess the factors used in establishing the asset and liability fair values as of the acquisition date, including intangible assets, accounts receivable, and certain fixed assets.
On March 25, 2021 ("Geodynamics Closing Date"), the Company acquired all of the outstanding equity interests in Geodynamics LLC ("Geodynamics"), a provider of sonar-based, deep-water geospatial solutions. The aggregate purchase price is $19,879, including $11,000 of cash, a $4,000 promissory note (bearing interest at 2.75%), payable in three equal installments of $1,333 due on the first, second, and third anniversaries of the Geodynamics Closing Date, and $2,610 of the Company's common stock (30,533 shares) issued at the closing date. The purchase price also includes a potential $21,000 earn-out of cash, which was recorded at an estimated fair value of $2,269. 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 for Geodynamics, 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 Geodynamics 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 acquisition date, including intangible assets, accounts receivable, and certain fixed assets.
On May 14, 2021 ("PES Environmental Closing Date"), the Company acquired all of the outstanding equity interests in PES Environmental, Inc. ("PES Environmental"), an environmental engineering and consulting company providing environmental site assessment, water resources and stormwater management, permitting and compliance, industrial hygiene, and litigation support services. The aggregate purchase price is $9,655, including $6,500 of cash, a $1,500 promissory note (bearing interest at 2.75%), payable in three equal installments due on the first, second, and third anniversaries of the PES Environmental Closing Date, and $630 of the Company's common stock (7,847 shares) issuable within 90 days of the PES Environmental Closing Date. The purchase price also includes a potential non-interest bearing earn-out of up to $1,100 payable in cash and stock, which was recorded at an estimated fair value of $1,025. 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 for PES Environmental, 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 PES Environmental 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 acquisition date, including intangible assets, accounts receivable, and certain fixed assets.
2020 Acquisitions    

    On July 16, 2020, the Company acquired all of the outstanding equity interests in Mediatech FZ, LLC and Mediatech Information Technology Consultants ("Mediatech"), a technology company providing security, enterprise IT, and building technology solutions in the Middle East and North Africa (MENA) region and South East Asia. Mediatech provides technology design services for the hospitality, industrial, healthcare, commercial, retail, and convention center markets. The Company acquired Mediatech for an aggregate purchase price of $1,949, including $882 of cash and $500 in promissory note, payable in four equal installments of $125 due on the first, second, third, and fourth anniversaries of the closing date. The purchase price also includes $312 of the Company's common stock payable in four equal installments due at closing and on the first, second and third anniversaries of the closing date. Further, the purchase price includes $255 in additional contingent payments. In order to determine the fair values of tangible and intangible assets acquired and liabilities assumed for Mediatech, the Company performed a fair value assessment.
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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 six months ended July 3, 2021 and the fiscal year ended January 2, 2021:
Six Months EndedFiscal Year Ended
July 3, 2021January 2, 2021
Cash$823 $ 
Billed and unbilled receivables, net5,631 1,439 
Right-of-use assets2,329  
Property and equipment3,475 28 
Prepaid expenses392 33 
Other assets6 28 
Intangible assets:
Customer relationships11,709 237 
Trade name703 30 
Customer backlog1,547 56 
Non-compete2,715 5 
Total Assets$29,330 $1,856 
Liabilities(5,155)(345)
Deferred tax liabilities(4,852)(86)
Net assets acquired$19,323 $1,425 
Consideration paid (Cash, Notes and/or stock)$36,709 $1,694 
Contingent earn-out liability (Cash and stock)3,294 255 
Total Consideration$40,003 $1,949 
Excess consideration over the amounts assigned to the net assets acquired (Goodwill)$20,680 $524 
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 and six months ended July 3, 2021.
Three Months EndedSix Months Ended
July 3, 2021July 3, 2021
Gross revenues$8,529 $9,981 
Income before income taxes$2,795 $3,288 
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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 and six months ended July 3, 2021 and June 27, 2020 as if the acquisitions of TerraTech, GeoDynamics, and PES Environmental had occurred at the beginning of fiscal year 2020. The pro forma information provided below is compiled from the pre-acquisition financial information of TerraTech, GeoDynamics, and PES Environmental 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 2020 or (ii) future results of operations:
Three Months EndedSix Months Ended
July 3, 2021June 27, 2020July 3, 2021June 27, 2020
Gross revenues$180,954 $168,656 $339,947 $341,214 
Net income$13,551 $4,484 $19,299 $8,974 
Basic earnings per share$0.94 $0.36 $1.41 $0.73 
Diluted earnings per share$0.91 $0.35 $1.36 $0.71 

    The pro forma results for Mediatech and IDA have not been presented as the financial impact on the Company's consolidated financial statements would be immaterial.
Note 6 Billed and Unbilled Receivables
Billed and Unbilled Receivables consists of the following:
July 3, 2021January 2, 2021
Billed receivables$114,779 $149,233 
Less: allowance for doubtful accounts(5,657)(6,528)
Billed receivables, net$109,122 $142,705 
Unbilled receivables$85,996 $76,609 
Less: allowance for doubtful accounts(2,410)(2,151)
Unbilled receivables, net$83,586 $74,458 

Note 7 Property and Equipment, net
Property and equipment, net, consists of the following:
July 3, 2021January 2, 2021
Office furniture and equipment$3,845 $3,782 
Computer equipment16,648 15,597 
Survey and field equipment27,143 22,866 
Leasehold improvements6,406 6,322 
Total54,042 48,567 
Less: accumulated depreciation(24,598)(21,556)
Property and equipment, net$29,444 $27,011 
Depreciation expense was $2,865 and $5,439 for the three and six months ended July 3, 2021, respectively, of which $1,178 and $2,280 was included in other direct costs for the three and six months ended July 3, 2021. Depreciation expense was $2,725 and $5,426 for the three and six months ended June 27, 2020, respectively, of which $1,077 and $2,179 was included in other direct costs for the three and six months ended June 27, 2020, respectively.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(in thousands, except share data)
Note 8 Goodwill and Intangible Assets
Goodwill
The changes in the carrying value by reportable segment for the six months ended July 3, 2021 were as follows:
Six Months Ended
January 2, 20212021 AcquisitionsAdjustmentsJuly 3, 2021
INF$87,333 $3,392 $ $90,725 
BTS78,848 5,790 86 84,724 
GEO177,615 11,498  189,113 
Total$343,796 $20,680 $86 $364,562 
During the six months ended July 3, 2021, the Company recorded goodwill related to the acquisitions of IDA, TerraTech, Geodynamics, and PES Environmental of $832, $3,392, $11,498, and $4,958, respectively, and a purchase price allocation adjustment of $86 that increased goodwill for the acquisition of Mediatech.
Intangible Assets
Intangible assets, net, as of July 3, 2021 and January 2, 2021 consist of the following:
July 3, 2021January 2, 2021
Gross
Carrying
Amount
Accumulated AmortizationNet
Amount
Gross
Carrying
Amount
Accumulated AmortizationNet
Amount
Finite-lived intangible assets:
Customer relationships(1)
$194,757 $(55,536)$139,221 $183,048 $(46,506)$136,542 
Trade name(2)
15,220 (13,540)1,680 14,517 (12,099)2,418 
Customer backlog(3)
26,658 (22,372)4,286 25,111 (19,709)5,402 
Non-compete(4)
12,088 (7,920)4,168 9,373 (6,909)2,464 
Developed technology(5)
32,944 (7,206)25,738 32,944 (4,839)28,105 
Total finite-lived intangible assets$281,667 $(106,574)$175,093 $264,993 $(90,062)$174,931 

(1) Amortized on a straight-line basis over estimated lives (5 to 12 years)
(2) Amortized on a straight-line basis over their estimated lives (1 to 3 years)
(3) Amortized on a straight-line basis over their estimated lives (1 to 5 years)
(4) Amortized on a straight-line basis over their contractual lives (2 to 5 years)
(5) Amortized on a straight-line basis over their estimated lives (5 to 7 years)
Amortization expense was $8,529 and $16,497 during the three and six months ended July 3, 2021, respectively, and $9,512 and $17,851 during the three and six months ended June 27, 2020, respectively.
15

Table of Contents
NV5 Global, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(in thousands, except share data)
Note 9 Accrued Liabilities
Accrued liabilities consist of the following:
July 3, 2021January 2, 2021
Current portion of lease liability$12,879 $13,161 
Accrued vacation14,542 11,998 
Payroll and related taxes11,453 10,744 
Benefits3,130 4,764 
Accrued operating expenses3,568 2,792 
Professional liability reserve902 949 
Accrued interest expense507 506 
Income tax payable and other liabilities338 411 
Total$47,319 $45,325 

Note 10 Notes Payable and Other Obligations
Notes payable and other obligations consists of the following:
July 3, 2021January 2, 2021
Senior credit facility$138,750 $283,832 
Uncollateralized promissory notes28,374 23,175 
Finance leases2,742 2,994 
Other obligations2,645 1,151 
Debt issuance costs, net of amortization(3,175)(3,630)
Total notes payable and other obligations169,336 307,522 
Current portion of notes payable and other obligations26,989 24,196 
Notes payable and other obligations, less current portion$142,347 $283,326 
As of July 3, 2021 and January 2, 2021, the carrying amount of debt obligations approximates their fair values based on Level 2 inputs as the terms are comparable to terms currently offered by local lending institutions for arrangements with similar terms to industry peers with comparable credit characteristics.
Senior Credit Facility
On December 20, 2019 (the "Closing Date"), the Company amended and restated its Credit Agreement (the "A&R Credit Agreement"), dated December 7, 2016, as amended on December 20, 2018, with Bank of America, N.A. ("Bank of America"), as administrative agent, swingline lender and letter of credit issuer, the other lenders party thereto, and certain of the Company's subsidiaries as guarantors. Pursuant to the A&R Credit Agreement, the lenders provided term commitments of $150,000 in the aggregate in a single draw on the Closing Date to fund the acquisition of QSI and various costs and expenses relating thereto and revolving commitments totaling $215,000 in the aggregate. The revolving commitment is available through December 20, 2024 (the "Maturity Date"), at which time the term commitments and revolving commitments will be due and payable in full. An aggregate amount of $320,500 was drawn under the A&R Credit Agreement on the Closing Date to fund the QSI acquisition and repay previously existing borrowings. Borrowings under the A&R Credit Agreement are secured by a first priority lien on substantially all of the assets of the Company. The A&R Credit Agreement also includes an accordion feature permitting the Company to request an increase in either the term facility or the revolver facility under the A&R Credit Agreement by an additional amount of up to $