Montrose Environmental Group Inc (MEG) 2022 Q4 法說會逐字稿

Greetings, and welcome to the Montrose Environmental Group, Inc. Fourth Quarter 2022 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Rodny Nacier, Investor Relations. Thank you, Mr. Nacier, you may begin.

您好，歡迎來到 Montrose Environmental Group, Inc. 2022 年第四季度收益電話會議。 （操作員說明）提醒一下，正在錄製此會議。現在我很高興向您介紹主持人，投資者關係部的 Rodny Nacier。謝謝你，Nacier 先生，你可以開始了。

Thank you. Welcome to our fourth quarter and full year 2022 earnings call. Joining me on the call are Vijay Manthripragada, our President and Chief Executive Officer; and Allan Dicks, Chief Financial Officer.

謝謝。歡迎來到我們的第四季度和 2022 年全年財報電話會議。與我一起參加電話會議的還有我們的總裁兼首席執行官 Vijay Manthripragada；和首席財務官 Allan Dicks。

During our discussion today, we will be referring to our earnings presentation, which is available on the Investors section of our website. Our earnings release is also available on the website. Moving to Slide 2. I would like to remind everyone that today's call will include forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ in a material way due to known and unknown risks and uncertainties that should be considered in evaluating our operating performance and financial outlook. We refer you to our recent SEC filings, including our latest annual report on Form 10-K which identify the principal risks and uncertainties that could affect any forward-looking statements as well as future performance. We assume no obligation to update any forward-looking statements.

在我們今天的討論中，我們將參考我們的收益報告，該報告可在我們網站的投資者部分獲得。我們的收益發布也可以在網站上找到。轉到幻燈片 2。我想提醒大家，今天的電話會議將包括前瞻性陳述，這些陳述受 1995 年《私人證券訴訟改革法案》安全港條款的約束。實際結果可能因已知和在評估我們的經營業績和財務前景時應考慮的未知風險和不確定性。我們建議您參考我們最近向美國證券交易委員會提交的文件，包括我們關於 10-K 表格的最新年度報告，其中確定了可能影響任何前瞻性陳述以及未來業績的主要風險和不確定性。我們不承擔更新任何前瞻性陳述的義務。

In addition, we will be discussing or providing certain non-GAAP financial measures today, including consolidated adjusted EBITDA, adjusted net income and adjusted net income per share. We provide these non-GAAP results for informational purposes, and they should not be considered in isolation from the most directly comparable GAAP measures. Please see the appendix to the earnings presentation or our earnings release for a discussion of why we believe these non-GAAP measures are useful to investors, certain limitations of using these measures and a reconciliation thereof to their most directly comparable GAAP measure.

此外，我們今天將討論或提供某些非 GAAP 財務指標，包括合併調整後 EBITDA、調整後淨收入和調整後每股淨收入。我們提供這些非 GAAP 結果僅供參考，不應將它們與最直接可比的 GAAP 措施分開考慮。請參閱收益演示文稿或我們的收益發布的附錄，以討論為什麼我們認為這些非 GAAP 措施對投資者有用、使用這些措施的某些限制以及它們與最直接可比的 GAAP 措施的對賬。

With that, I would now like to turn the call over to Vijay, beginning on Slide 4.

有了這個，我現在想把電話轉給 Vijay，從幻燈片 4 開始。

Thank you, Rodny, and welcome to all of you joining us today. I will provide you with business highlights and then hand it over to Allan for our financial review before we open it up to question-and-answer session.

謝謝你，羅德尼，歡迎大家今天加入我們。我將為您提供業務亮點，然後在我們開放問答環節之前將其交給 Allan 進行財務審查。

I will speak generally to the updated earnings presentation shared on our website. But before I begin, I would like to take a moment to acknowledge the plane crash in Little Rock, Arkansas, which took the lives of 5 of our colleagues last week. They were on their way to helping our clients, and this is one of those unthinkable events for which there are no words. Our prayers and thoughts go out to the families that lost their loved ones and to our CTEH colleagues, who are mourning deep, deep loss. I am proud of how the collective team has come together. I am also amazed at the poise and grace with which our CTEH team is handling the sudden and unexpected shock. To all of our CTEH leaders and colleagues, thank you for your unwavering fortitude and to our clients and partners who jumped in to help and are joining us to remember those we lost. Thank you.

我將概括地談談我們網站上分享的最新收益報告。但在開始之前，我想花點時間感謝上週發生在阿肯色州小石城的飛機失事，該事故奪走了我們 5 名同事的生命。他們正在幫助我們的客戶，這是無法用語言描述的不可想像的事件之一。我們為失去親人的家庭和我們的 CTEH 同事祈禱和思念，他們正在哀悼深深的損失。我為集體團隊如何走到一起感到自豪。我也對我們的 CTEH 團隊在應對突如其來的衝擊時表現出的鎮定和優雅感到驚訝。感謝我們所有的 CTEH 領導和同事，感謝你們堅定不移的毅力，也感謝我們的客戶和合作夥伴，他們積極提供幫助，並加入我們的行列，以紀念我們失去的那些人。謝謝。

I also remain grateful for the efforts of our colleagues around the world from Australia to North America to Europe. Their results and efforts have resulted in another incredible year for Montrose, and I am really pleased with the execution across all levels of our business. As we have noted before, our business is best assessed on an annual basis, given demand for environmental services is not driven by specific or predictable quarterly patterns. This is how we manage our business and how we recommend you view our results as well.

我也仍然感謝我們在世界各地從澳大利亞到北美再到歐洲的同事所做的努力。他們的成果和努力為 Montrose 帶來了又一個令人難以置信的一年，我對我們業務各個層面的執行情況感到非常滿意。正如我們之前所指出的，鑑於對環境服務的需求不受特定或可預測的季度模式的驅動，我們的業務最好每年進行一次評估。這就是我們管理業務的方式，也是我們建議您查看我們結果的方式。

Let me now go to our financial results. We were pleased to report another exceptional year in 2022, and I'll highlight a few key themes.

現在讓我談談我們的財務業績。我們很高興地報告 2022 年又是一個非凡的一年，我將強調幾個關鍵主題。

First, we achieved record organic revenue growth of 26% in our core business, representing approximately 2/3 of the growth in the blue bars on Page 5 of the presentation. As a result, our average organic growth over the past 3 years has been approximately 18% compared to the 7% to 9% at the time of our IPO in mid-2020. Historically, acquisitions represented more than half of our annual revenue growth, but recently, organic revenue growth has been a greater contributor to our overall growth trajectory.

首先，我們的核心業務實現了創紀錄的 26% 有機收入增長，約佔演示文稿第 5 頁藍色條增長的 2/3。因此，我們過去 3 年的平均有機增長率約為 18%，而我們在 2020 年年中首次公開募股時的增長率為 7% 至 9%。從歷史上看，收購占我們年收入增長的一半以上，但最近，有機收入增長對我們的整體增長軌跡做出了更大的貢獻。

Second, our organic revenue growth outperformance in core services helped to mitigate the impact of the anticipated $125 million decline in CTEH COVID-19-related revenues from 2021 to 2022. Given the incredible surge in CTEH revenue in 2021, we expect it to be down in 2022. But revenues held steady on the back of strong organic growth outperformance in the rest of our businesses.

其次，我們在核心服務方面的有機收入增長有助於減輕 2021 年至 2022 年 CTEH COVID-19 相關收入預計下降 1.25 億美元的影響。鑑於 2021 年 CTEH 收入的驚人增長，我們預計它會下降2022 年。但在我們其他業務強勁的有機增長表現的支持下，收入保持穩定。

Three, what is particularly encouraging for us is that our organic growth outperformance was broad-based and across segments. It is primarily driven by demand for our PFAS water treatment technology, greenhouse gas measurement and mitigation and renewable energy services.

第三，對我們來說特別令人鼓舞的是，我們的有機增長表現出色是基礎廣泛且跨部門的。它主要是由對我們的 PFAS 水處理技術、溫室氣體測量和緩解以及可再生能源服務的需求推動的。

Fourth, we were also thrilled to see customer revenue retention and cross-selling revenues increased to record levels. Customer revenue retention increased to 96% in 2022. As a reminder, the 4% isn't necessarily lost revenue, but more a function of project frequency. Our customer relationships remain as strong as ever. In addition, cross-selling revenues, which are defined as revenues from clients using more than one Montrose service, nearly doubled to 35% of total revenues. In essence, our organic growth outperformance is less about customer acquisition and more about deepening existing customer relationships. Growth in these metrics reflects the success of our business development efforts and as importantly, our integrated service offerings.

第四，我們也很高興看到客戶收入保留和交叉銷售收入增加到創紀錄的水平。到 2022 年，客戶收入保留率增加到 96%。提醒一下，這 4% 不一定是收入損失，更多是項目頻率的函數。我們的客戶關係一如既往地牢固。此外，交叉銷售收入（定義為來自使用多個 Montrose 服務的客戶的收入）幾乎翻了一番，達到總收入的 35%。從本質上講，我們的有機增長表現優於客戶獲取，更多的是加深現有客戶關係。這些指標的增長反映了我們業務發展工作的成功，同樣重要的是，我們的綜合服務產品也取得了成功。

Finally, and fifth, we are also happy with the strength of our balance sheet and continued strong cash generation. Our acquisitions were and continue to be funded through our operating cash flows. Our balance sheet remains effectively hedged against rising interest rates, and it provides us with ample flexibility to continue consolidating our industry and investing in environmental innovation. As it relates to acquisitions, which remain a core part of our strategy, we believe our slower pace during 2022 and was prudent as we focused on executing against our accelerating organic growth opportunities.

最後，也是第五，我們也對我們的資產負債表實力和持續強勁的現金產生感到滿意。我們的收購過去是並將繼續通過我們的經營現金流提供資金。我們的資產負債表仍然有效地對沖了利率上升的風險，它為我們提供了足夠的靈活性來繼續鞏固我們的行業和投資於環境創新。由於它與收購相關，這仍然是我們戰略的核心部分，我們認為我們在 2022 年的步伐會放緩，並且在我們專注於應對加速的有機增長機會時是謹慎的。

So far in 2023, we have increased our cadence of M&A activity, and though small, we believe they are very additive to Montrose and we are very pleased to have added the teams from Frontier Labs, Huco Consulting an environmental alliance to our family. We expect more announcements in the near future. And as you can see to the quick start this year, we expect 2023 to be back to our historical cadence of strategic acquisitions.

到 2023 年為止，我們增加了併購活動的節奏，雖然規模很小，但我們相信它們對 Montrose 有很大的幫助，我們很高興將 Frontier Labs、Huco Consulting 和環境聯盟的團隊加入我們的大家庭。我們預計在不久的將來會有更多公告。正如您在今年的快速啟動中看到的那樣，我們預計 2023 年將回到我們戰略收購的歷史節奏。

As Allan shares more about our 2023 outlook, I think it is important to highlight where we came from, which is what Slides 5 and 6 are meant to be. Revenues in total operating segment adjusted EBITDA from our core business have seen very strong and sequential growth each year since our IPO in 2020. During that same time, we invested in our corporate infrastructure to transition to public company life and to transition out of our emerging growth status more quickly than anticipated.

隨著艾倫更多地分享我們的 2023 年展望，我認為強調我們的來源很重要，這就是幻燈片 5 和 6 的本意。自 2020 年首次公開募股以來，我們核心業務的調整後 EBITDA 總營業收入每年都出現非常強勁的連續增長。與此同時，我們投資於公司基礎設施，以過渡到上市公司生活，並從我們的新興市場過渡增長狀況比預期的要快。

Regarding 2022 expectations, our revenues came in consistent with expectations, primarily due to organic growth outperformance as discussed earlier. But our operating segment EBITDA was a little lower than expectations for 3 primary reasons.

關於 2022 年的預期，我們的收入與預期一致，這主要是由於如前所述的有機增長表現出色。但由於 3 個主要原因，我們的運營部門 EBITDA 略低於預期。

First, as our water treatment and biogas services scale, their margin profile, though very attractive at run rate levels is immature at this time as we invest to capture organic growth opportunities. So though I am oversimplifying, the revenue that replaced the CTEH COVID-19 revenues from 2021 was lower margin in the short term. However, it grew faster than we expected, and importantly, it represents more consistency and higher margin opportunity in the long term.

首先，隨著我們的水處理和沼氣服務規模的擴大，它們的利潤率狀況雖然在運行率水平上非常有吸引力，但在我們投資捕捉有機增長機會的時候並不成熟。因此，儘管我過於簡單化了，但從 2021 年開始取代 CTEH COVID-19 收入的收入在短期內利潤率較低。然而，它的增長速度比我們預期的要快，而且重要的是，從長遠來看，它代表了更高的一致性和更高的利潤率機會。

Second, our recent acquisitions in our consulting and engineering service lines have been lower, mid-teens margins but very strategically additive. In addition, we purchased a few small testing businesses that were also lower margins. We expect margins for these businesses will increase as part of Montrose over the coming years. These acquisitions have also been very financially accretive.

其次，我們最近對諮詢和工程服務線的收購利潤率較低，只有十幾歲左右，但在戰略上非常具有附加性。此外，我們還收購了一些利潤率也較低的小型測試企業。我們預計未來幾年這些業務的利潤率將隨著 Montrose 的一部分而增加。這些收購也帶來了巨大的經濟增長。

And finally, when we last spoke in November, CTEH had a near record October of 2022, so we expected fourth quarter 2022 outperformance. However, the fourth quarter ended lower than we expected. The CTEH business is challenging to predict over months or quarters, as we have noted before. CTEH remains core to the Montrose strategy and had a spectacular overall year, as you can see on Slides 5 and 6. So this is more of a short-term phenomenon.

最後，當我們在 11 月最後一次發言時，CTEH 在 2022 年 10 月創下了接近紀錄的水平，因此我們預計 2022 年第四季度的表現會更好。然而，第四季度的收盤低於我們的預期。正如我們之前所指出的，CTEH 業務在幾個月或幾個季度內的預測具有挑戰性。正如您在幻燈片 5 和 6 中看到的那樣，CTEH 仍然是 Montrose 戰略的核心，並且全年表現出色。因此，這更多是一種短期現象。

Given all these factors, our 2023 outlook on Pages 5 and 6 reflects our bullishness particularly with our core services. We expect double-digit organic revenue growth in 2023 for our core business which will offset the continued wind down of the CTEH COVID-19 services. Those services remain meaningful, particularly in early 2022. We also expect strong double-digit operating segment adjusted EBITDA growth for our core services, which will offset a slight decline in CTEH. Finally, we expect to be back to a regular M&A cadence and Allan will expand further on these trends. Overall, our long-term strategy remains unchanged. We are confident in our ability to create shareholder value as we have been doing, given our ability to innovate and capitalize on strong demand for our environmental solutions.

考慮到所有這些因素，我們在第 5 頁和第 6 頁的 2023 年展望反映了我們的樂觀態度，尤其是我們的核心服務。我們預計 2023 年我們的核心業務將實現兩位數的有機收入增長，這將抵消 CTEH COVID-19 服務的持續減少。這些服務仍然有意義，尤其是在 2022 年初。我們還預計核心服務的調整後運營部門 EBITDA 將實現強勁的兩位數增長，這將抵消 CTEH 的小幅下滑。最後，我們預計將恢復正常的併購節奏，Allan 將進一步擴展這些趨勢。總體而言，我們的長期戰略保持不變。鑑於我們有能力創新並利用對我們的環境解決方案的強烈需求，我們對我們一如既往地創造股東價值的能力充滿信心。

Next, I will discuss broader regulatory and industry trends. We continue to see market drivers as government policy initiatives are catching up with public and private sector demand for better environmental stewardship. We remain well positioned to capitalize on these tailwinds. Specifically and first, on PFAS, the U.S. EPA continues to be focused on the issue of PFAS and added several more PFAS chemicals to the toxic release inventory in January. The EPA also proposed rules regarding lower thresholds for chemicals of special concern, both likely increase future demand for our consulting and testing services in particular.

接下來，我將討論更廣泛的監管和行業趨勢。我們繼續看到市場驅動力，因為政府的政策舉措正在趕上公共和私營部門對更好的環境管理的需求。我們仍然處於有利地位，可以利用這些順風。具體而言，首先，在 PFAS 方面，美國環保署繼續關注 PFAS 問題，並在 1 月份將更多 PFAS 化學品添加到有毒物質排放清單中。 EPA 還提出了關於降低特別關注化學品閾值的規則，這兩者都可能增加未來對我們的諮詢和測試服務的需求。

In addition, the U.S. EPA plans to publish final drinking water limits for PFAS by the fall of 2023. Their recent memo also includes recommendations for at least quarterly testing of wastewater and technology-based treatment, both of which are expected to continue driving demand for Montrose's testing and treatment capabilities. With regards to methane emissions, late last year, the EPA released a supplemental proposal for the oil and natural gas sector to reduce methane emissions from facilities among other emission reduction requirements. The proposal expands the scope of requirements and require states to reduce methane emissions from hundreds of thousands of existing sources nationwide for the first time.

此外，美國環保署計劃在 2023 年秋季之前公佈 PFAS 的最終飲用水限值。他們最近的備忘錄還包括建議至少每季度對廢水和基於技術的處理進行測試，這兩項措施預計將繼續推動對 PFAS 的需求Montrose 的檢測和治療能力。關於甲烷排放，去年底，美國環保署發布了一份針對石油和天然氣行業的補充提案，以減少設施的甲烷排放以及其他減排要求。該提案擴大了要求範圍，首次要求各州減少全國數十萬個現有來源的甲烷排放量。

In addition, the U.S. Bureau of Land Management published a proposal that requires operators of federal and tribal oil and gas leases take steps to avoid the waste of methane. If adopted, we expect to see increased demand for our emissions measurement, monitoring and assessment services.

此外，美國土地管理局發布了一項提案，要求聯邦和部落的石油和天然氣租賃經營者採取措施避免甲烷的浪費。如果採用，我們預計會看到對我們的排放測量、監測和評估服務的需求增加。

Third and finally, regarding demand for our environmental consulting services, in January, the U.S. EPA announced availability of $100 million, which builds on previous investments from the America Rescue Plan to support projects that address various aspects of pollution, emissions and climate matters in disadvantaged communities. In addition to the demand we have started to see from the American Rescue Plan, we have also seen increased demand from industrial clients, partnering with communities as a result of these new efforts to monitor air quality in particular. This creates tailwinds for our consulting and testing services.

第三，也是最後一點，關於對我們的環境諮詢服務的需求，美國環保署在 1 月份宣布提供 1 億美元的資金，該資金建立在美國救援計劃之前的投資基礎上，用於支持解決弱勢群體污染、排放和氣候問題各個方面的項目社區。除了我們已經開始從美國救援計劃中看到的需求外，我們還看到工業客戶的需求增加，特別是由於這些新的空氣質量監測工作而與社區合作。這為我們的諮詢和測試服務創造了順風。

Also in January, the U.S. EPA released a document on how to ensure cumulative environmental impacts are considered with permitting, remediation, waste management, environmental emergency response and other decisions. If implemented, we expect this proposal will help increase demand across our services. So in essence, with regulations, while many of these actions are in the early rule-making phase, the macro demand drivers for environmental services remain on the rise. And though we are highlighting U.S. regulations as that is most of our business, the same general trends are true in Australia, Canada and Europe, which we expect will collectively represent a greater percentage of our revenue in the coming years, given stellar growth opportunities.

同樣在 1 月，美國環保署發布了一份文件，內容涉及如何確保在許可、補救、廢物管理、環境應急響應和其他決策中考慮累積環境影響。如果實施，我們預計該提案將有助於增加我們服務的需求。因此，從本質上講，雖然許多這些行動都處於規則制定的早期階段，但從本質上講，環境服務的宏觀需求驅動力仍在上升。儘管我們強調美國法規是因為這是我們的大部分業務，但澳大利亞、加拿大和歐洲也存在同樣的總體趨勢，我們預計未來幾年它們將共同占我們收入的更大比例，因為增長機會強勁。

Next, I would like to discuss our performance by segment. Within our assessment Permitting and Response segment, excluding CTEH, we were pleased to see solid organic revenue growth in other services in the segment. In addition, we were able to add small but strategically and financially accretive acquisitions to the segment. These trends are harder to see given the expected $125 million decline in CTEH COVID-19 revenues, which overshadowed the segment. We see a lot of future opportunity in building other services within this segment. Also going forward, we expect to reduce CTEH variability through investments in the organic growth of their nonresponse services as well as acquisitions. The team is very strong, so we remain long-term bullish on opportunities related to CTEH.

接下來，我想按部門討論我們的表現。在我們的評估許可和響應部門（不包括 CTEH）中，我們很高興看到該部門其他服務的穩健有機收入增長。此外，我們能夠為該部門增加小型但具有戰略和財務增長的收購。鑑於 CTEH COVID-19 收入預計下降 1.25 億美元，這使該部門黯然失色，因此很難看到這些趨勢。我們看到了在該細分市場中構建其他服務的大量未來機會。同樣展望未來，我們希望通過投資於其無響應服務的有機增長以及收購來減少 CTEH 的可變性。該團隊非常強大，因此我們仍然長期看好與 CTEH 相關的機會。

Margins in the segment were primarily impacted by the shift in business mix and the lower margins of our recent acquisitions. Within the measurement and analysis segment, demand for our testing services remained very strong and drove solid organic growth. Given the regulatory momentum I just discussed, we remain upbeat about continued growth in this segment given our position as a market leader. Our margins remain in the high teens to 20% as expected.

該部門的利潤率主要受到業務組合轉變和我們最近收購的較低利潤率的影響。在測量和分析領域，對我們測試服務的需求仍然非常強勁，並推動了穩健的有機增長。鑑於我剛才討論的監管勢頭，鑑於我們作為市場領導者的地位，我們對該領域的持續增長保持樂觀。正如預期的那樣，我們的利潤率保持在十幾歲至 20%。

Finally, within our remediation and reuse segment, our organic growth outperformance for the full year was primarily driven by demand for our PFAS water treatment and renewable energy services. As we've reiterated on prior calls, margins remain below what we consider normalized levels given our ongoing investments into this business. We were pleased to see sequential margin improvement in this segment during the fourth quarter, also as expected.

最後，在我們的修復和再利用部門，我們全年的有機增長表現出色主要是由於對我們的 PFAS 水處理和可再生能源服務的需求推動的。正如我們在之前的電話會議上重申的那樣，考慮到我們對這項業務的持續投資，利潤率仍低於我們認為的正常水平。我們很高興看到該部門在第四季度的連續利潤率有所改善，這也符合預期。

In terms of our research and development and technology achievements, we were awarded and have filed for 8 and 14 patents, respectively. We are particularly excited about our progress with PFAS destruction and carbon dioxide capture. Given the early nature of these innovations, they may not succeed in the field, but they show promise and they speak to our team's ability to identify and capture long-term environmental opportunities for our clients. In addition, we are actively working on partnering with next-generation technologies for waste-to-energy and real-time air monitoring services, which we believe will contribute to our continued long-term value creation and growth.

在我們的研發和技術成果方面，我們分別獲得和申請了8項和14項專利。我們對我們在 PFAS 銷毀和二氧化碳捕獲方面取得的進展感到特別興奮。鑑於這些創新的早期性質，它們可能不會在該領域取得成功，但它們顯示出希望，它們證明了我們團隊為客戶識別和捕捉長期環境機會的能力。此外，我們正積極與下一代技術合作，提供垃圾焚燒發電和實時空氣監測服務，我們相信這將有助於我們持續的長期價值創造和增長。

In summary, these results belong to approximately 3,000 Montrose colleagues around the world to those of you that are listening, congratulations on another solid year. To our investors, thank you for your continued support and for giving us the opportunity to create value for you, for our clients and for our employees. As we look forward to 2023, we believe we are well positioned to achieve our objectives given our strong track record. We remain as optimistic as ever in the future for Montrose Environmental.

總而言之，這些結果屬於世界各地大約 3,000 名 Montrose 同事以及正在聆聽的各位，祝賀又一個堅實的一年。對於我們的投資者，感謝您一直以來的支持，感謝您給我們機會為您、我們的客戶和我們的員工創造價值。展望 2023 年，我們相信，鑑於我們良好的業績記錄，我們有能力實現我們的目標。我們對 Montrose Environmental 的未來一如既往地樂觀。

With that, let me hand it over to Allan. Thank you.

有了這個，讓我把它交給艾倫。謝謝。

Thank you, Vijay. We are pleased to have closed out another year with strong organic growth in our core business, benefiting from the in-demand nature of our unique environmental solutions, our expanding customer relationships, solid customer retention and exceptional cross-selling success. We are also pleased with the resumption of our typical M&A cadence with the recent closing of our sixth acquisition since the beginning of 2022 and second, so far in 2020. Successful execution of accretive M&A remains one of our key growth pillars, and we are encouraged by the robust pipeline of prospective acquisitions in 2023.

謝謝你，維杰。我們很高興又以核心業務的強勁有機增長結束了又一年，受益於我們獨特的環境解決方案的需求性質、我們不斷擴大的客戶關係、穩固的客戶保留率和卓越的交叉銷售成功。我們也很高興恢復了我們典型的併購節奏，最近完成了自 2022 年初以來的第六次收購，以及 2020 年迄今為止的第二次收購。成功執行增值併購仍然是我們的主要增長支柱之一，我們感到鼓舞通過 2023 年強大的潛在收購渠道。

Moving to our revenue performance on Slide 12. We were happy to see continued strong organic growth across most of our service lines during the fourth quarter and full year 2022. Full year revenues were $544.4 million compared to $546.4 million in the prior year. However, excluding the revenue impact of the planned exit from legacy wastewater treatment and biogas O&M contracts, revenue was up 1.2%. This top line resilience was exceptional when considering the year-over-year decline in CTEH COVID-19-related revenues of $125 million. This COVID-19 headwind was almost entirely offset by our 26% organic growth in the remainder of the business as well as the positive contributions from acquisitions.

轉向我們在幻燈片 12 上的收入表現。我們很高興看到我們大部分服務線在第四季度和 2022 年全年持續強勁的有機增長。全年收入為 5.444 億美元，而去年同期為 5.464 億美元。然而，排除計劃退出遺留廢水處理和沼氣 O&M 合同對收入的影響，收入增長了 1.2%。考慮到 CTEH COVID-19 相關收入同比下降 1.25 億美元，這種頂線彈性非常出色。 COVID-19 的逆風幾乎完全被我們其餘業務 26% 的有機增長以及收購的積極貢獻所抵消。

For the fourth quarter, total revenues were $139.5 million, compared to $143.8 million in the prior year quarter. This decrease in revenues was driven by significantly lower CTEH revenue, partially offset by organic growth in our measurement and analysis segment, and the remainder of our Assessment, Permitting and Response segment as well as the positive contributions from acquisitions.

第四季度總收入為 1.395 億美元，上年同期為 1.438 億美元。收入下降的原因是 CTEH 收入大幅下降，部分被我們的測量和分析部門的有機增長以及我們評估、許可和響應部門的其餘部分以及收購的積極貢獻所抵消。

Looking at our consolidated adjusted EBITDA performance on Slide 13. Full year consolidated adjusted EBITDA was $66.2 million or 12.2% of revenue compared to consolidated adjusted EBITDA of $73.2 million or 13.4% of revenue in the prior year. The year-over-year change in consolidated adjusted EBITDA dollars and as a percentage of revenue was driven by the significant decline in CTEH earnings and to a lesser extent, business mix and higher variable costs impacting travel, field and land supplies and other direct costs. That said, we were pleased to see strong traction with our pricing initiatives instituted during Europe. Fourth quarter consolidated adjusted EBITDA grew 3% year-over-year. to $17.8 million or 12.7% of revenue compared to consolidated adjusted EBITDA of $17.3 million or 12% of revenue in the prior year. Return to year-over-year growth in this metric was driven primarily by a full quarter benefit of pricing taken earlier in the year and favorable business mix.

查看我們在幻燈片 13 上的合併調整後 EBITDA 表現。全年合併調整後 EBITDA 為 6620 萬美元或占收入的 12.2%，而上一年合併調整後 EBITDA 為 7320 萬美元或占收入的 13.4%。合併調整後的 EBITDA 美元和占收入的百分比的同比變化是由於 CTEH 收入的顯著下降以及在較小程度上影響差旅、現場和土地供應以及其他直接成本的業務組合和更高的可變成本所推動的.也就是說，我們很高興看到我們在歐洲制定的定價舉措產生了強大的吸引力。第四季度綜合調整後 EBITDA 同比增長 3%。至 1780 萬美元或收入的 12.7%，而上一年合併調整後的 EBITDA 為 1730 萬美元或收入的 12%。該指標恢復同比增長主要是由於今年早些時候定價的整個季度收益和有利的業務組合。

Turning to our business segments on Slide 14. In our Assessment, Permitting and Response segment, full year revenue and operating segment adjusted EBITDA decreased to $187.2 million and $37.5 million, respectively. The CTEH business is entirely in the segment and is reflected in the year-over-year decreases in both revenue and adjusted EBITDA. Organic growth in the remainder of the segment plus acquisitions provided a partial offset. Operating segments adjusted EBITDA as a percentage of revenue was 20%, which was lower than the prior year as a result of business mix and the acquisitions of environmental standards, environmental intelligence and Horizon all of which operate at lower margins than our other businesses in this segment.

轉向我們在幻燈片 14 上的業務部門。在我們的評估、許可和響應部門，全年收入和運營部門調整後的 EBITDA 分別下降至 1.872 億美元和 3750 萬美元。 CTEH 業務完全屬於該部門，反映在收入和調整後 EBITDA 的同比下降上。該部門其餘部分的有機增長加上收購提供了部分抵消。經營分部調整後的 EBITDA 佔收入的百分比為 20%，低於上年，這是由於業務組合以及環境標準、環境智能和 Horizon 的收購，所有這些業務的利潤率都低於我們在本年度的其他業務部分。

In our Measurement & Analysis segment, revenue increased 12.5% to $172.4 million, primarily attributable to strong organic growth as well as acquisitions. Measurement and analysis adjusted EBITDA as a percent of revenue decreased to 18.3% as a result of business mix and the impact of the cyber attack in June, which temporarily disrupted some of our labs ability to operate.

在我們的測量與分析部門，收入增長 12.5% 至 1.724 億美元，這主要歸功於強勁的有機增長和收購。由於業務組合和 6 月份網絡攻擊的影響，測量和分析調整後的 EBITDA 佔收入的百分比下降至 18.3%，這暫時中斷了我們一些實驗室的運營能力。

In our Remediation and Reuse segment, revenues increased [40.7%] year-over-year to $184.8 million, reflecting strong organic growth related to the increase in demand for our PFAS water treatment technology and biogas services, as well as revenues from acquisitions. The increase in segment adjusted EBITDA as a percentage of revenue was a result of significantly higher revenues and business mix.

在我們的修復和再利用部門，收入同比增長 [40.7%] 至 1.848 億美元，反映出與我們的 PFAS 水處理技術和沼氣服務需求增加以及收購收入相關的強勁有機增長。分部調整後 EBITDA 佔收入百分比的增加是收入和業務組合顯著增加的結果。

Moving to our capital structure on Slide 15. Full year cash flow from operating activities was $20.6 million compared to cash flow from operating activities of $37.6 million in the prior year. Cash from operations includes the payment of acquisition-related contingent consideration of $19.5 million in the current year and $15.6 million in the prior year, respectively. Excluding these acquisition-related payments, adjusted cash from operating activities was $40.1 million for the full year 2022 compared to $53.2 million for full year 2021.

轉到幻燈片 15 上的資本結構。全年經營活動產生的現金流量為 2060 萬美元，而去年經營活動產生的現金流量為 3760 萬美元。來自運營的現金包括本年度支付的與收購相關的或有對價 1,950 萬美元和上一年的 1,560 萬美元。不包括這些與收購相關的付款，調整後的經營活動現金在 2022 年全年為 4010 萬美元，而 2021 年全年為 5320 萬美元。

This year-over-year change was primarily due to lower earnings before noncash items of $9 million and an increase in working capital of $16.5 million in the current year compared to an increase in working capital of $10.1 million in the prior year. These strong operational cash flows reflect our ongoing focus on balancing the generation of cash with investments in technology, R&D, start-up initiatives and corporate infrastructure to ensure continued scalability. Our liquidity position also remains strong with cash on hand as of December 31, 2022, of $89.8 million and an additional $125 million of availability on our revolving credit facility.

這一同比變化主要是由於非現金項目前收益減少 900 萬美元，以及本年度營運資本增加 1650 萬美元，而上一年營運資本增加 1010 萬美元。這些強勁的運營現金流反映了我們持續關注平衡現金產生與技術、研發、啟動計劃和企業基礎設施投資，以確保持續的可擴展性。我們的流動性狀況也保持強勁，截至 2022 年 12 月 31 日，手頭現金為 8980 萬美元，我們的循環信貸額度還有 1.25 億美元的可用現金。

As we've highlighted over the past few quarters, the interest rate swap we put in place in January 2022, and the solid cash position we have on the balance sheet have resulted in almost no exposure to rising interest rates at current borrowing levels. Our leverage ratio as of December 31, 2022, which includes the impact of acquisition-related contingent earn-out obligations payable in cash was at 1.3x.

正如我們在過去幾個季度強調的那樣，我們在 2022 年 1 月實施的利率互換以及我們在資產負債表上擁有的穩固現金狀況導致在當前借貸水平下幾乎沒有利率上升的風險。截至 2022 年 12 月 31 日，我們的槓桿率為 1.3 倍，其中包括與收購相關的以現金支付的或有盈利義務的影響。

Series A-2 preferred stock has no maturity date, and we have the option but not an obligation to redeem the preferred shares at any time for cash, subject to a make-whole payment if prepaid prior to April 2023. We view this preferred equity instrument as favorable to the value creation potential in the business, given its flexible dynamics and the fixed nature of the dividend in a rising interest rate environment. If you include the $182 million balance of the Series A-2 equity in our market cap, our total equity capitalization stands at approximately $1.7 billion.

A-2 系列優先股沒有到期日，我們可以選擇但沒有義務隨時贖回優先股以換取現金，如果在 2023 年 4 月之前預付，則需要全額付款。我們認為該優先股鑑於其靈活的動態和利率上升環境中股息的固定性質，該工具有利於企業的價值創造潛力。如果將 A-2 系列股權的 1.82 億美元餘額計入我們的市值，我們的總股權資本總額約為 17 億美元。

Moving to our full year outlook on Slide 17. Based on the solid traction in our core business through 2022 and into 2023, we are initiating a full year growth outlook for revenue to be in the range of $550 million to $600 million. And for consolidated adjusted EBITDA to be in the range of $68 million to $74 million. Our revenue forecast reflects our expectation for continued double-digit organic growth in 2023. We expect CTEH to be within its estimated $75 million to $95 million run rate, which is approximately $20 million to $40 million lower year-on-year, primarily due to the expected cessation of COVID-19-related services in 2023.

轉到我們對幻燈片 17 的全年展望。基於我們核心業務到 2022 年和 2023 年的穩固牽引力，我們開始將全年收入增長前景定在 5.5 億美元至 6 億美元之間。合併調整後的 EBITDA 在 6800 萬至 7400 萬美元之間。我們的收入預測反映了我們對 2023 年持續兩位數有機增長的預期。我們預計 CTEH 的運行率將在其估計的 7500 萬至 9500 萬美元之內，同比下降約 2000 萬至 4000 萬美元，這主要是由於預計 2023 年將停止與 COVID-19 相關的服務。

Within our consolidated adjusted EBITDA outlook, we expect to see margin expansion and mid-teens EBITDA growth in our core business operating segment's adjusted EBITDA. At the midpoint, the $12 million year-over-year increase to $85 million is expected to more than offset a $4 million to $6 million reduction in adjusted EBITDA from CTEH as detailed on Slide 6 of the presentation. We expect corporate costs to remain at roughly 6% of revenue, which percentage is expected to drop with the completion of acquisitions during the year. Putting the pieces together, results in higher expected consolidated adjusted EBITDA for the year.

在我們綜合調整後的 EBITDA 展望中，我們預計核心業務運營部門調整後的 EBITDA 的利潤率將擴大，EBITDA 將增長 15% 左右。在中點，1200 萬美元同比增長至 8500 萬美元，預計將抵消 CTEH 調整後 EBITDA 減少 400 萬至 600 萬美元，如演示文稿幻燈片 6 所述。我們預計企業成本將保持在收入的 6% 左右，這一比例預計會隨著年內收購的完成而下降。將各個部分放在一起，導致今年的合併調整後 EBITDA 預期更高。

Additionally, I'd like to highlight that our revenue and consolidated adjusted EBITDA outlook does not include any benefit from future acquisitions that have not been completed. It's worth reflecting further upon the details of the moving pieces we shared earlier on Slides 5 and 6 of the presentation. We acknowledge that the significant outperformance of CTEH as a result of COVID-19 services. This dynamic began in Q4 of 2020, surged in 2021 and then saw a significant decline in 2022. Although still at elevated levels in 2022 and anticipated to cease in 2023, it has created significant noise around business performance, growth and margins.

此外，我想強調的是，我們的收入和調整後的綜合 EBITDA 前景不包括尚未完成的未來收購帶來的任何收益。值得進一步反思我們之前在演示文稿的幻燈片 5 和 6 中分享的活動片段的細節。我們承認，由於 COVID-19 服務，CTEH 的表現非常出色。這種動態始於 2020 年第四季度，在 2021 年激增，然後在 2022 年出現顯著下降。儘管 2022 年仍處於較高水平並預計將在 2023 年停止，但它已經在業務績效、增長和利潤率方面產生了重大影響。

Accordingly, we believe it is important to provide transparency around the performance of our core business, excluding CTEH. Since 2020, our core business revenue has grown organically at a compounded annual growth rate of 18% with an additional double-digit percent organic growth expected in 2023, well above our pre-IPO levels. Inclusive of acquisitions, but excluding discontinued services, our core revenue is expected to be at a 29% compounded annual growth rate from 2020 through 2023. Again, above our expectations at the time of our IPO for annual growth of 20% to 25%.

因此，我們認為，重要的是圍繞我們的核心業務（不包括 CTEH）的績效提供透明度。自 2020 年以來，我們的核心業務收入以 18% 的複合年增長率實現有機增長，預計 2023 年將實現兩位數的有機增長，遠高於 IPO 前的水平。包括收購在內，但不包括已終止的服務，我們的核心收入預計從 2020 年到 2023 年的複合年增長率為 29%。同樣，這也高於我們在首次公開募股時對年增長率 20% 到 25% 的預期。

Core business operating segment's adjusted EBITDA has grown at a 15% CAGR. Since 2020, with an additional mid-teen percentage growth expected in 2023. Although core business operating segment's adjusted EBITDA margins declined from 2020 to 2022, as a result of investments in operating infrastructure, particularly in our water treatment and biogas businesses, business mix, driven by lower margin acquisitions and higher investments in start-up activities, margins are expected to increase in 2023.

核心業務運營部門的調整後 EBITDA 以 15% 的複合年增長率增長。自 2020 年以來，預計到 2023 年將有額外的 15% 百分比增長。儘管核心業務運營部門的調整後 EBITDA 利潤率從 2020 年到 2022 年有所下降，這是由於對運營基礎設施的投資，特別是在我們的水處理和沼氣業務、業務組合、在利潤率較低的收購和對初創活動的更多投資的推動下，預計 2023 年利潤率將增加。

In conclusion, our 2022 results demonstrate the resiliency and non-cyclicality of our core business along with the ongoing need for our unique environmental solutions. Our focused execution to capitalize on end market and regulatory tailwinds drove another year of double-digit organic revenue growth across most of our business. We were pleased to execute accretive M&A transactions, invest in talented team members and expand our innovative IP portfolio. Looking to 2023, we remain optimistic in our ability to create substantial value for all of our stakeholders as we capitalize on demand for our leading environmental solutions globally.

總之，我們 2022 年的業績證明了我們核心業務的彈性和非週期性，以及對我們獨特的環境解決方案的持續需求。我們專注於利用終端市場和監管順風的執行力，推動我們大部分業務又實現了兩位數的有機收入增長。我們很高興執行增值併購交易，投資有才華的團隊成員並擴展我們的創新知識產權組合。展望 2023 年，隨著我們利用全球領先的環境解決方案的需求，我們對為所有利益相關者創造可觀價值的能力保持樂觀。

Thank you all for joining us today and for your continued interest in Montrose. We look forward to the opportunities we see ahead and updating you on our progress next quarter. Operator, we are ready to open the line to questions.

感謝大家今天加入我們，感謝您對 Montrose 的持續關注。我們期待著我們看到的未來機會，並在下個季度向您更新我們的進展情況。接線員，我們已準備好打開問題熱線。

(Operator Instructions) Our first question comes from Jim Ricchiuti with Needham and Company.

（操作員說明）我們的第一個問題來自 Needham and Company 的 Jim Ricchiuti。

This is actually Chris Grenga on for Jim. Sorry for your loss and congrats on the quarter. Just perhaps, could you provide a bit more color on what you're seeing in terms of the greenhouse gas monitoring and renewables looking forward into 2023 in terms of how those 2 are going to contribute to growth? And I have one follow-up.

這實際上是 Jim 的 Chris Grenga。對您的損失表示抱歉，並祝賀本季度。或許，您能否就溫室氣體監測和可再生能源展望到 2023 年，就這兩者將如何促進增長提供更多色彩？我有一個後續行動。

Yes. Chris, why don't I take that? And then Allan, please jump in. The majority of our work on the greenhouse gas measurement is around our Measurement Analysis segment and our Assessment Permitting and Response segment, our advisory work, Chris. We are seeing a material uptick in demand for both of those services with clients asking us to help them think about how to frame the measurements for broader reporting purposes and ESG reporting, but also for compliance purposes.

是的。克里斯，我為什麼不接受呢？然後是艾倫，請加入。我們在溫室氣體測量方面的大部分工作都是圍繞我們的測量分析部分和我們的評估許可和響應部分，我們的諮詢工作，克里斯。我們看到對這兩種服務的需求都在大幅上升，客戶要求我們幫助他們考慮如何為更廣泛的報告目的和 ESG 報告以及合規目的構建衡量標準。

So as we think about our outlook for the measurement and analysis segment, some of our attractive margin growth opportunities and our disproportionate high-margin growth opportunities will be coming from that sector. And we certainly expect that to sustain over the next several years, you'll see us accelerate organically at double digits as we have over the last couple of years. And there are also acquisition opportunities in that space that we'll continue to expand upon once those occur.

因此，當我們考慮我們對測量和分析部門的前景時，我們的一些有吸引力的利潤增長機會和我們不成比例的高利潤增長機會將來自該部門。我們當然希望這種情況在未來幾年內持續下去，你會看到我們像過去幾年一樣以兩位數的速度有機增長。在那個領域也有收購機會，一旦發生，我們將繼續擴大。

Does that answer your question, Chris?

這能回答你的問題嗎，克里斯？

Yes. And with cross-selling now at 35% of revenues, where -- I guess, where do you see that going longer term? And is that -- what's the potential to continue to increase that?

是的。現在交叉銷售佔收入的 35%，我想，你認為這會長期發生在哪裡？那就是 - 繼續增加它的潛力是什麼？

That's where most of our attention is on the business development side, Chris. We have historically talked about focusing on deepening our relationships with customers. And that can come in several forms. It can be additional services to a client at a client site. It can be the same service across multiple client sites. And one of the challenges with the metric we're presenting is the cleanest one to allow for consistent measurement over time is that it's more than one service.

這就是我們大部分注意力都集中在業務發展方面的地方，克里斯。我們一直在談論專注於深化與客戶的關係。這可以有多種形式。它可以是在客戶站點為客戶提供的附加服務。它可以是跨多個客戶端站點的相同服務。我們提出的指標面臨的挑戰之一是允許隨著時間的推移進行一致測量的最乾淨的挑戰是它不止一項服務。

And so if we add a second or a third service, Chris, it doesn't count in that metric. So we think over time, our organic growth opportunities sustained by continuing to capture more wallet share across our existing customers. It's less about customer acquisition for us and more about deepening relationships. That measurement, as Allan has mentioned before, should easily go north of 50%. And there's no reason over the long-term horizon, why all of our customers shouldn't be using more than one Montrose service.

因此，如果我們添加第二個或第三個服務，Chris，它不計入該指標。因此，我們認為隨著時間的推移，我們的有機增長機會將通過繼續在現有客戶中獲取更多的錢包份額來維持。對我們來說，這不是關於獲取客戶，而是關於加深關係。正如 Allan 之前提到的那樣，該測量值應該很容易超過 50%。從長遠來看，我們沒有理由不讓所有客戶使用超過一項 Montrose 服務。

Our next question comes from Tim Mulrooney with William Blair.

我們的下一個問題來自 Tim Mulrooney 和 William Blair。

So the EBITDA margin guide, it kind of implies flattish margin expansion year-over-year. And we were expecting some margin expansion in '23 as you get leverage on some of those fixed corporate costs you layered in last year and maybe as the remediation business scales up, so can you talk about some of those things that are holding margin expansion back in 2023 to that flattish type range? And maybe you could elaborate a little bit on if your long-term margin target of 20% or your time frame around that target has changed at all? That's my only question.

所以 EBITDA 利潤率指南，這有點意味著利潤率同比增長持平。我們預計 23 年的利潤率會有所增長，因為您可以利用去年分層的一些固定公司成本，也許隨著補救業務的擴大，您能談談其中一些阻礙利潤率增長的因素嗎在 2023 年到那個平坦的類型範圍？也許你可以詳細說明一下你的 20% 的長期利潤率目標或圍繞該目標的時間框架是否發生了變化？這是我唯一的問題。

Allan, do you want me to start with that and then you can jump in.

艾倫，你想讓我從那個開始，然後你就可以開始了嗎？

Yes. Yes, please.

是的。是的，請。

Tim, thanks for the question. It's a great question, Tim, and let me perhaps start with -- let me take your question in pieces and let me know if this addresses this. So forgive me, it's going to be a little bit of a lengthy answer.

蒂姆，謝謝你的提問。這是一個很好的問題，蒂姆，也許讓我開始——讓我把你的問題分成幾個部分，讓我知道這是否能解決這個問題。所以請原諒我，這將是一個冗長的答案。

Our long-term outlook around 20% has not changed, and it's driven, as we've talked about by 2 factors. One is operating EBITDA and the second is corporate expenses as a percentage of revenue. And so to get to 20%, Tim, operating EBITDA margins would need to be in the 22% to 25% range, and corporate would need to come down to 3% to 4% of revenue. Corporate will absolutely get there, and you'll see that tick down this year. And so bear with us as we through that out, that's very tightly managed, and we have visibility to that.

我們關於 20% 左右的長期前景沒有改變，而且它受到驅動，正如我們談到的 2 個因素。一是運營 EBITDA，二是公司支出佔收入的百分比。因此，為了達到 20%，蒂姆，營業 EBITDA 利潤率需要在 22% 到 25% 的範圍內，而企業需要下降到收入的 3% 到 4%。公司絕對會到達那裡，你會看到今年會下降。因此，請耐心等待我們解決這個問題，這是非常嚴格的管理，我們對此有可見性。

On our operating EBITDA margin run rate, that will also get to our range. If we think about our Measurement & Analysis segment being at 18% to 20%, we've demonstrated over the years, that is -- and will continue. Our water and biogas business at maturity, getting to the mid-20s. CTEH, you can see their margin has increased getting to the -- getting back to the mid-20s post-COVID and then the advisory and remediation practices being in the teens to 20%. So from a macro perspective, our outlook hasn't changed. And if you think about Slide 5 and 6, Tim, the blue bars, you can see that we are expecting some operating leverage in 2023.

在我們的運營 EBITDA 利潤率運行率上，這也將達到我們的範圍。如果我們考慮我們的測量和分析部門在 18% 到 20% 之間，我們已經證明了多年來，那就是 - 並將繼續。我們的水和沼氣業務成熟，達到 20 多歲。 CTEH，你可以看到他們的利潤已經增加到 - 回到 20 多歲後 COVID，然後諮詢和補救措施在十幾歲時達到 20%。因此，從宏觀角度來看，我們的前景沒有改變。如果你想想幻燈片 5 和 6，蒂姆，藍色條，你會發現我們預計 2023 年會有一些運營槓桿。

But you're exactly right. the pace of that has been challenging for us to predict. And the reason for that Tim is twofold. It's hard for us to predict the acquisition profiles. And I'll explain what I mean by that in a second. And we've also been surprised by the success of our R&D efforts, and I'll expand on that as well. So on acquisitions, Tim, I'll give you 3 examples of assets that throw us off in the short term, but are very accretive in the long term. So we purchased a company called Air Kinetics towards the back half of last year. It's an air testing business. it's very strategically additive, excellent customers and it plugs right into our infrastructure. But at the time of purchase, it was effectively zero EBITDA. We obviously don't need their corporate infrastructure and the variable contribution on those customers is 70-plus percent.

但你完全正確。我們難以預測其發展速度。蒂姆這樣做的原因是雙重的。我們很難預測收購概況。稍後我會解釋我的意思。我們也對研發工作的成功感到驚訝，我也會對此進行擴展。所以關於收購，蒂姆，我會給你 3 個資產的例子，這些資產在短期內讓我們失望，但從長遠來看卻非常增值。所以我們在去年下半年收購了一家名為 Air Kinetics 的公司。這是一項空氣測試業務。它具有非常戰略性的附加性，優秀的客戶，它直接插入我們的基礎設施。但在購買時，EBITDA 實際上為零。我們顯然不需要他們的企業基礎設施，而且對這些客戶的可變貢獻是 70% 以上。

So very financially accretive, it's going to take us a couple of quarters to kind of harvest that, but that throws us off in the short term. As another example, environmental Intelligence, this is the business in the Western United States that is a Rockstar asset. They help utilities manage fire risk as an example. That business runs in the mid-teens. It's a large part of our organic growth surge in that segment, excluding CTEH, very strategic to the broader Montrose portfolio. But because it runs at mid-teens, it throws off the short-term margin profile. And there's additional assets in the pipeline, Tim, that we're seeing come to market, very strong brands, excellent client bases, very synergistic to Montrose. But these businesses have historically struggled with cost management. So labor price increases and pricing in an inflationary environment. They just haven't done it well.

所以在經濟上非常增值，我們需要幾個季度才能收穫，但這在短期內會讓我們失望。再舉個例子，環境情報，這是美國西部的業務，是 Rockstar 的資產。例如，它們幫助公用事業管理火災風險。這項業務在十幾歲的時候就開始了。這是我們在該領域有機增長的很大一部分，不包括 CTEH，對更廣泛的 Montrose 投資組合非常具有戰略意義。但因為它運行在十幾歲中期，它擺脫了短期利潤率。蒂姆，我們正在看到進入市場的其他資產，非常強大的品牌，優秀的客戶群，與 Montrose 非常協同。但這些企業歷來都在成本管理方面苦苦掙扎。因此，在通貨膨脹環境下，勞動力價格上漲和定價。他們只是沒做好。

If we bring them into the Montrose fold, not only do we continue to capture share and harvest the synergies on the top line side, but we think we can lift their margins really nicely as well. But that, again, will take us several quarters to harvest. And so as we think about all of that, that's part of the reason why we're having a hard time articulating exactly what the cadence of that margin accretion will be. And then on the R&D side, Tim, as our patents come to fruition and as clients ask us to capture some of these themes like PFAS destruction and carbon capture. As we invest in that, that obviously also temporarily depresses margins. But like with ECT2 and the water treatment technologies over several years, we think that's going to be very, very additive.

如果我們將他們納入 Montrose 的行列，我們不僅會繼續奪取份額並在頂線方面收穫協同效應，而且我們認為我們也可以很好地提高他們的利潤率。但是，這又需要我們幾個季度才能收穫。因此，當我們考慮所有這些時，這就是為什麼我們很難準確闡明利潤率增長的節奏的部分原因。然後在研發方面，蒂姆，隨著我們的專利取得成果以及客戶要求我們捕捉其中的一些主題，例如 PFAS 破壞和碳捕獲。當我們投資於此時，這顯然也會暫時壓低利潤率。但就像幾年來的 ECT2 和水處理技術一樣，我們認為這將是非常非常附加的。

Does that answer your question, Tim?

這是否回答了你的問題，蒂姆？

Yes, Vijay.

是的，維杰。

You want me to add to that, Vijay?

Vijay，你想讓我補充一下嗎？

Yes, please.

是的，請。

Yes, let me just add, Tim. We're seeing a lot of growth opportunities more so than 2, 3 years ago. Many of those require some upfront investments like our European expansion, for example. And because we no longer add back start-up losses that obviously has a short-term impact on margins. We're also growing at elevated levels above what we had anticipated. And in a tight labor market and an inflationary environment and a desire to maintain quality is really tough to grow double-digit organically and expand margins at the same time. When revenue slows, as it did in 2020, we demonstrated an ability to expand margins quickly. But we don't think it's prudent in the short term, the focus on margin expansion given the wave of organic opportunities that we're seeing.

是的，讓我補充一下，蒂姆。與 2、3 年前相比，我們看到了更多的增長機會。其中許多需要一些前期投資，例如我們的歐洲擴張。而且因為我們不再加回顯然對利潤率有短期影響的啟動損失。我們的增長水平也高於我們的預期。在緊張的勞動力市場和通貨膨脹的環境下，想要保持質量，很難實現兩位數的有機增長，同時擴大利潤率。當收入放緩時，就像 2020 年那樣，我們展示了快速擴大利潤的能力。但我們認為短期內不謹慎，考慮到我們看到的有機機會浪潮，將重點放在利潤率擴張上。

Okay. So if that -- Allan, just following that point then, if you plan to continue to grow double-digit organically, is it unlikely that we will see margin expansion in the coming years and that 20% EBITDA margin target is indeed farther away than what we were thinking?

好的。因此，如果那 - 艾倫，緊接著這一點，那麼，如果你計劃繼續實現兩位數的有機增長，我們是否不太可能在未來幾年看到利潤率擴張，而且 20% 的 EBITDA 利潤率目標確實比我們在想什麼？

It depends on a number of factors, right? Again, if you look at our guidance for '23, and I'd point you again to Page 6. If you look at our core business, so pulling out CTEH and focusing on operating segment margins. There is about a 100 basis point improvement in '23 versus '22. So you're seeing some margin expansion, but we're also falling at the midpoint for double-digit organic growth, which is above what we had expected certainly at IPO time. So getting to the high teens 20% margin is still absolutely achievable. As Vijay said, the mix of acquisitions can throw that off temporarily and outside organic growth can sort that off temporarily, but the end goal doesn't change. It's absolutely achievable.

這取決於很多因素，對吧？同樣，如果您查看我們對 23 年的指導，我會再次將您指向第 6 頁。如果您查看我們的核心業務，那麼退出 CTEH 並專注於運營部門的利潤率。 23 年與 22 年相比提高了約 100 個基點。所以你看到了一些利潤率擴張，但我們也在兩位數有機增長的中點下降，這高於我們在 IPO 時的預期。因此，達到 20% 的高利潤率仍然是絕對可以實現的。正如 Vijay 所說，收購組合可以暫時解決這個問題，外部有機增長可以暫時解決這個問題，但最終目標不會改變。這是絕對可以實現的。

When we look at the mix of business we have -- and the margin profile of the businesses we have and the underlying market sizes, so we have a sense of where our portfolio should settle out, that 20% is absolutely achievable. Corporate costs, as Vijay mentioned, will come down with acquisitions. You'll see that come down in '23. So it's a little slow out of the gate than we had anticipated. But again, the growth is also faster than we had anticipated. In goal which is still, we believe achievable. Is it 3 years? Is it 5 years? Is it 7 years? It's just really hard to say because we're going to continue to be very opportunistic in driving revenue growth and prioritizing revenue -- quality revenue growth over that contract.

當我們審視我們擁有的業務組合——以及我們擁有的業務的利潤率狀況和潛在市場規模時，我們就會了解我們的投資組合應該在哪裡結算，20% 是絕對可以實現的。正如 Vijay 提到的，企業成本將隨著收購而下降。你會看到它在 23 年下降。所以它比我們預期的要慢一些。但同樣，增長也比我們預期的要快。在仍然存在的目標中，我們相信可以實現。是3年嗎？是5年嗎？是7年嗎？這真的很難說，因為我們將繼續非常機會主義地推動收入增長和優先考慮收入——質量收入增長高於合同。

Tim, and just stepping back, because I think you're alluding to our articulation of kind of our expectations at IPO over that 5-year horizon, right? So when we went public in 2020, we were around $230 million of revenue. So -- and what we said is that you should expect us to grow at 20% to 25% a year, 7% to 9% organic, right? Would that be a fair way to say where we started?

蒂姆，我退後一步，因為我認為你是在暗示我們對 IPO 的 5 年期預期的表述，對嗎？因此，當我們在 2020 年上市時，我們的收入約為 2.3 億美元。所以——我們說的是你應該期望我們每年增長 20% 到 25%，有機增長 7% 到 9%，對嗎？這會是一個公平的方式來說明我們從哪裡開始嗎？

Yes, that's exactly.

是的，正是這樣。

Yes. So if we -- so if you kind of just do the math on that and just, forgive me I'm doing it on the fly, right? Let's just take the top end of that 25% growth over 5 years, right? That's about a triple starting at $230, you should be at around $700 million to $725 million of revenue. At 20% margins, it's about $140 million of EBITDA. I think what we're trying to say is we're going to achieve both milestones and hit our earnings and EBITDA targets. There's no question about that.

是的。因此，如果我們 - 所以如果您只是對此進行數學計算，請原諒我正在做，對吧？讓我們只考慮 5 年 25% 增長的頂端，對嗎？這大約是起價為 230 美元的三倍收入，您的收入應該在 7 億至 7.25 億美元左右。以 20% 的利潤率計算，EBITDA 約為 1.4 億美元。我認為我們想說的是我們將實現這兩個里程碑並達到我們的收益和 EBITDA 目標。毫無疑問。

What we're also saying is that we're actually outpacing our expectations on revenue. So the margin profile may be different year in and year out, but it should be very additive to our shareholders and sets us up beyond that 5-year horizon. So it's not like our absolute earnings potential or cash potential is any different. It's just that we're outpacing the top line expectations by virtue of some of the advantages we've built with our business model and with our technology.

我們還要說的是，我們實際上超出了我們對收入的預期。因此，利潤率情況可能年復一年地不同，但它應該對我們的股東有很大的幫助，並讓我們超越 5 年的期限。因此，我們的絕對盈利潛力或現金潛力並沒有什麼不同。只是憑藉我們用我們的商業模式和我們的技術建立的一些優勢，我們超越了最高預期。

Does that make sense? And so we're anchoring on margin, but it's the absolute cash and absolute EBITDA that we're not all that hesitant about saying we're very confident in hitting.

那有意義嗎？因此，我們以保證金為基礎，但絕對現金和絕對 EBITDA 是我們毫不猶豫地說我們非常有信心實現的目標。

Yes, and I think that's a good way of framing it for investors, anchoring on the dollars rather than maybe -- I'm little too focused on the margins here, but regardless appreciate all the color you both shared here and I'll get back in line.

是的，我認為這是為投資者構建它的一種好方法，錨定美元而不是也許 - 我不太關注這裡的利潤率，但無論如何欣賞你們在這里分享的所有顏色，我會得到回到隊列中。

(Operator Instructions) Our next question comes from Andrew Obin with Bank of America.

（操作員說明）我們的下一個問題來自美國銀行的 Andrew Obin。

This is David Ridley-Lane for Andrew Obin. Looking at the 2023 revenue guidance, excluding CTEH, what are the factors that would drive you towards that lower end of 10% or the upper end of 17%. What's driving some of the factors driving that?

我是 Andrew Obin 的 David Ridley-Lane。看看 2023 年的收入指引，不包括 CTEH，哪些因素會促使您達到 10% 的下限或 17% 的上限。是什麼推動了一些驅動因素？

Yes. Let me start with that, and Allan certainly jump in. So David, there's a couple of variables there. One is the phasing in and starting of our various water and biogas projects. As we've said before, we're seeing a lot of interest in both of those end markets and demand has been really attractive. But exactly when the projects start and stop is a little tougher for us to predict. So that's going to be one variable that dictates where we fall on that macro trajectory, either low double digits or high double digits.

是的。讓我從這個開始，艾倫肯定會加入。所以大衛，那裡有幾個變量。一是我們的各種水和沼氣項目的逐步實施和啟動。正如我們之前所說，我們看到了對這兩個終端市場的濃厚興趣，而且需求非常有吸引力。但項目的確切啟動和停止時間對我們來說更難預測。所以這將是一個變量，它決定了我們在宏觀軌跡上的位置，低兩位數或高兩位數。

The other variable that's going to be one that we're going to need to watch is the cadence at which our greenhouse gas measurement practice really picks up. And that's another one -- and that's partially a function of some of the regulatory flux that occurred at the very end of last year, where the technology -- the imaging technology that we've been practitioners of for years was recently deemed the best emissions reduction technology by the EPA. So how quickly clients adopt that will partially also dictate our ability to capture share in that part of the market. So those variables are the ones depending on the cadence that will dictate whether we're on the low end or high end of that. But regardless, even the low end is elevated compared to our historical levels. Does that make sense?

另一個我們需要關注的變量是我們的溫室氣體測量實踐真正開始的節奏。這是另一個 - 這部分是去年年底發生的一些監管變化的函數，其中技術 - 我們多年來一直使用的成像技術最近被認為是最好的排放EPA 的減排技術。因此，客戶採用它的速度有多快，也將部分決定我們在該部分市場中佔據份額的能力。因此，這些變量取決於節奏，決定我們是處於低端還是高端。但無論如何，與我們的歷史水平相比，即使是低端也有所提高。那有意義嗎？

Yes, that makes perfect sense. And then the last 2 quarters of CTEH have meaningful levels of COVID-related revenue. I'm just trying to understand the bridge you've been at about $100 million run rate in the second half of '22 to the $75 million to $95 million guidance.

是的，這很有道理。然後 CTEH 的最後兩個季度具有有意義的 COVID 相關收入水平。我只是想了解你在 22 年下半年以大約 1 億美元的運行率與 7500 萬至 9500 萬美元的指導之間的橋樑。

Yes. CTEH is coming if you look at -- Allan, do you want to take that?

是的。 CTEH 即將到來，如果你看——艾倫，你想接受嗎？

Sure. Yes. The -- still meaningful for them in terms of overall Montrose has shrunk significantly certainly by Q4, and we expect that to go away completely as we get into '23. So sequential declines, about 1/3 of their revenue in Q4, but those contracts are largely winding up. So we don't expect to see much more of it in the new year.

當然。是的。就整體 Montrose 而言，對他們來說仍然有意義，到第四季度肯定已經大幅縮水，我們預計隨著我們進入 23 年，這種情況將完全消失。所以連續下降，大約是他們第四季度收入的 1/3，但這些合同基本上正在結束。所以我們不希望在新的一年看到更多。

And David, why don't the -- just to add on to that, the team has done an exceptional job pivoting away from that part of the business to the traditional environmental side. And they had -- even with the $125 million drop, you can see their overall reduction was less than that, and that's because the core business for CTEH, their core response and (inaudible) business has really started to pick up nicely and certainly has done so, so far in 2023. The team has just been on a very nice cadence already so far this year, independent of the COVID work.

大衛，為什麼不 - 只是為了補充這一點，團隊在從業務的這一部分轉向傳統的環境方面方面做得非常出色。他們有——即使減少了 1.25 億美元，你可以看到他們的整體減少幅度小於此，這是因為 CTEH 的核心業務、他們的核心響應和（聽不清）業務確實開始好轉，而且肯定有到目前為止，在 2023 年已經完成了。今年到目前為止，該團隊的節奏已經非常好，與 COVID 工作無關。

Got it. So the $75 million to $95 million does include growth in sort of core CTEH and the target number is just -- not the ending of COVID-related revenues. Is that the right way to think about it?

知道了。因此，7500 萬至 9500 萬美元確實包括某種核心 CTEH 的增長，而目標數字只是——而不是 COVID 相關收入的結束。這是正確的思考方式嗎？

I think the right way to think about it is their cadence is $75 million to $95 million. And it's a matter of -- they have a very talented teams and an ability to flex up and down, but it's a matter of the mix of the work and where they're deployed. So as COVID winds down, they reallocate those resources to their more traditional work.

我認為正確的思考方式是他們的節奏是 7500 萬到 9500 萬美元。這是一個問題——他們擁有一支非常有才華的團隊和上下靈活的能力，但這是工作組合和部署地點的問題。因此，隨著 COVID 的結束，他們將這些資源重新分配給更傳統的工作。

Our next question from Stephanie Yee with JPMorgan.

我們的下一個問題來自摩根大通的 Stephanie Yee。

Can you remind us of the synergies between Montrose and CTEH its business outside of the COVID-related work?

您能否提醒我們 Montrose 和 CTEH 在 COVID 相關工作之外的業務之間的協同作用？

Yes. They are a really critical part of our overall story, Stephanie. So just at a macro level, as clients think about ways to deal with various environmental opportunities and challenges. One of those is dealing with various incidents that occur due to changes in our climate or aging infrastructure. So the macro demand for their services, which is something our clients need is independently very additive. In addition to that, because they are the advisers working with Incident command when something happens, there is substantive testing work, monitoring work, advisory work in toxicology and public health impact work and then downstream remediation work that occurs when something unfortunate happens, right, whether it's a hurricane or a flood or a fire or a derailment.

是的。他們是我們整個故事中非常重要的一部分，斯蒂芬妮。所以只是在宏觀層面上，作為客戶思考應對各種環境機遇和挑戰的方法。其中之一是處理由於氣候變化或基礎設施老化而發生的各種事件。因此，對他們服務的宏觀需求，也就是我們的客戶需要的東西，是非常獨立的。除此之外，因為他們是在事情發生時與事件指揮部一起工作的顧問，所以有實質性的測試工作、監測工作、毒理學諮詢工作和公共衛生影響工作，然後是當不幸發生時發生的下游補救工作，對吧，無論是颶風、洪水、火災還是脫軌。

And so as they're helping these communities and helping incident command, the Montrose services that flow downstream of those -- that initial event make it very synergistic. So when we talked about maybe 2 years ago, Stephanie, one of the early indications of how synergistic it was, we referenced the oil spill in California and how 5 different Montrose teams deployed alongside CTEH to support that client doing natural resource damage assessments, monitoring in addition to the response and that is certainly the case as well with some of the recent incidents that have occurred so far at the end of '22 and early part of '23.

因此，當他們幫助這些社區並幫助事件指揮時，在這些社區下游流動的 Montrose 服務——最初的事件使其非常協同。因此，當我們大約在 2 年前談論時，斯蒂芬妮是協同作用的早期跡象之一，我們提到了加利福尼亞的漏油事件以及 5 個不同的 Montrose 團隊如何與 CTEH 一起部署以支持該客戶進行自然資源損害評估、監測除了響應之外，22 世紀末和 23 世紀初到目前為止發生的一些事件肯定也是如此。

Okay, okay. That makes sense. I was just asking because I guess we're hoping that we wouldn't be talking about the COVID-related revenues tied to CTEH in 2023. I know that was a lot explained in 2022. But it looks like there's still a little bit of that rolling off in 2023. So I just wanted to be reminded of why they're coming together, the 2 companies was a good deal in the first place? So thank you for that.

好吧好吧。這就說得通了。我只是問，因為我想我們希望我們不會在 2023 年談論與 CTEH 相關的 COVID 相關收入。我知道這在 2022 年得到了很多解釋。但看起來還有一點這將在 2023 年結束。所以我只想提醒他們為什麼要走到一起，這兩家公司首先是一筆好交易？非常感謝你的幫忙。

Yes. And again, the COVID services -- forgive us, we're having a really hard time. We had a hard time predicting exactly when those will start to stop. Going back to '21, we thought it would slow down, and it didn't continue into '22, and it was certainly substantive in the early part of '22. But it's really behind us now, Stephanie. As we look at the 2023 guidance, that's a nonfactor. With what we know so far.

是的。再一次，COVID 服務——請原諒我們，我們真的很難過。我們很難準確預測它們何時會停止。回到 21 年，我們認為它會放緩，並沒有持續到 22 年，而且在 22 年的早期肯定是實質性的。但它現在真的已經過去了，斯蒂芬妮。當我們查看 2023 年指南時，這是一個無關緊要的因素。到目前為止我們所知道的。

Okay, and just one other question. Can you talk about how maybe the economic environment, it seems -- it's the employing a little bit of uncertainty. How that factors into your intention of increasing the pace of acquisitions in 2023, if at all?

好的，還有一個問題。你能談談經濟環境嗎，它似乎是一種不確定性。如果有的話，這如何影響您在 2023 年加快收購步伐的意圖？

It doesn't, it doesn't. In fact, what we were alluding to and following on Tim's question, Stephanie, what we're saying is that the macroeconomic challenges have impacted our acquisition targets more than they've impacted us. As Allan talked about in his comments, we've been fortunate with our pricing discipline to be able to take up prices so that the cost pressures -- the inflation-related cost pressures have not really had an impact on us.

它沒有，它沒有。事實上，我們在蒂姆的問題上暗示和關注的是斯蒂芬妮，我們所說的是宏觀經濟挑戰對我們收購目標的影響超過了對我們的影響。正如艾倫在他的評論中所說，我們很幸運，我們的定價紀律能夠承受價格，因此成本壓力——與通貨膨脹相關的成本壓力並沒有真正對我們產生影響。

And because of the diversification of our end markets, we're broadly insulated from any major economic shifts to the upside or downside. So it's a very steady business. But our -- but some of the smaller companies that we're buying have certainly been battered. We see that candidly as a really attractive opportunity, which throws off again, the short-term profile but we think it will be very attractive long term. So we're not all that worried about it. And our balance sheet is hedged against those increased rate environments and has been for a while. So for us, it's really more a matter of making sure it's strategically additive and us being opportunistic.

由於我們終端市場的多元化，我們基本上不受任何重大經濟上行或下行轉變的影響。所以這是一個非常穩定的業務。但是我們 - 但我們正在購買的一些較小的公司肯定受到了打擊。坦率地說，我們認為這是一個非常有吸引力的機會，它再次打破了短期形象，但我們認為從長遠來看，這將是非常有吸引力的。所以我們並不那麼擔心。我們的資產負債表已針對那些利率上升的環境進行了對沖，並且已經有一段時間了。所以對我們來說，更重要的是確保它在戰略上是附加的，而我們是機會主義的。

Allan, is there anything else you would add?

艾倫，你還有什麼要補充的嗎？

No, I agree with all that, Vijay.

不，我同意所有這些，Vijay。

(Operator Instructions) There are no further questions at this time. I would like to turn the floor back over to Vijay Manthripragada for closing comments. Please go ahead.

（操作員說明）目前沒有其他問題。我想將發言權轉回給 Vijay Manthripragada 以徵求結束意見。請繼續。

Thank you, and thank you all again for your time, for your interest and for your support of Montrose. We're thrilled and excited about 2023, and I'm sure we'll be talking soon. Take care.

謝謝，再次感謝大家抽出寶貴時間，感謝您對 Montrose 的關注和支持。我們對 2023 年感到激動和興奮，我相信我們很快就會談到。小心。

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.

今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與，祝您有美好的一天。