Montrose Environmental Group Inc (MEG) 2023 Q2 法說會逐字稿

Good day, and welcome to the Montrose Environmental Group, Inc. Second Quarter 2023 Earnings Conference Call. Today, all participants will be in a listen-only mode. (Operator Instructions) Please note that today's event is being recorded. At this time, I would like to turn the conference over to Rodny Nacier, Investor Relations. Please go ahead.

美好的一天，歡迎參加 Montrose Environmental Group, Inc. 2023 年第二季財報電話會議。今天，所有參與者都將處於僅聽模式。 （操作員說明）請注意，今天的活動正在錄製中。這次，我想將會議交給投資人關係部的 Rodny Nacier。請繼續。

Thank you, operator. Welcome to our second quarter 2023 earnings call. Joining me on the call are Vijay Manthripragada, our President and Chief Executive Officer; and Allan Dicks, Chief Financial Officer. 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.

謝謝你，接線生。歡迎參加我們的 2023 年第二季財報電話會議。與我一起參加電話會議的還有我們的總裁兼執行長 Vijay Manthripragada；和首席財務官艾倫迪克斯。在今天的討論中，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找到。我們的收益發布也可以在網站上找到。

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 annual report on Form 10-K for the fiscal year ended December 31, 2022, 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.

轉向幻燈片2。我想提醒大家，今天的電話會議將包括前瞻性陳述，這些陳述受到1995 年《私人證券訴訟改革法案》安全港條款的約束。由於已知和已知的因素，實際結果可能會有重大差異。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。我們建議您參閱我們最近向SEC 提交的文件，包括截至2022 年12 月31 日的財政年度的10-K 表格年度報告，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公認會計準則財務指標，包括合併調整後 EBITDA、調整後淨利潤和調整後每股淨利潤。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較的 GAAP 指標分開考慮。請參閱收益報告或我們的收益發布的附錄，以了解為什麼我們認為這些非公認會計原則措施對投資者有用。使用這些措施的某些限制及其與最直接可比較的公認會計準則措施的協調。

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

現在，我想將電話轉給 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. Allan will provide you with financial highlights, and we will then open it up to Q&A. I will speak generally to the second quarter earnings presentation shared on our website.

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。艾倫將為您提供財務要點，然後我們將進行問答。我將概括性地談論我們網站上分享的第二季財報。

Before we speak to Q2 specifically, I would like to reiterate that our business is best assessed on an annual basis, given demand for environmental services is typically not being driven by quarterly patterns. We manage our business on an annual basis, and it is how we recommend you view our results as well. I would also like to thank our approximately 3,500 colleagues around the world to whom these stellar results belong. Without their efforts, we wouldn't be here today. To all of you listening, thank you.

在我們具體討論第二季度之前，我想重申，鑑於環境服務的需求通常不是由季度模式驅動的，我們的業務最好按年度進行評估。我們每年管理我們的業務，這也是我們建議您查看我們業績的方式。我還要感謝全球約 3,500 名同事，正是他們取得了這些優秀的成果。沒有他們的努力，就沒有我們的今天。各位聆聽者，謝謝。

With that context, 2023 is off to a very strong start, which is a core part of why we are taking up guidance for the full year, and Allan will expand on that further in a few minutes. Our Q2 revenue was $159.1 million, and our Q2 consolidated adjusted EBITDA was $21.2 million. The second quarter saw continued outperformance, which built on our first quarter strength and momentum. The strength in our business is due to several key factors and themes, which I'd like to highlight further. First, given our highly accelerated organic revenue growth over the past few years, we have focused 2023 on optimizing adjusted EBITDA margins. Our long-term organic growth opportunities are just as attractive as they have always been, and our objectives and strategy have not changed.

在此背景下，2023 年將迎來一個非常強勁的開局，這也是我們制定全年指引的核心原因，艾倫將在幾分鐘內進一步闡述這一點。我們第二季的營收為 1.591 億美元，第二季合併調整後 EBITDA 為 2,120 萬美元。第二季的表現持續出色，這是建立在我們第一季的實力和勢頭的基礎上的。我們業務的優勢源自於幾個關鍵因素和主題，我想進一步強調這些因素和主題。首先，鑑於過去幾年我們的有機收入成長加速，我們將 2023 年的重點放在優化調整後 EBITDA 利潤率。我們的長期有機成長機會一如既往地具有吸引力，我們的目標和策略沒有改變。

During Q2 2023, operating segment adjusted EBITDA and the consolidated adjusted EBITDA margins were 19.3% and 13.3%, respectively, which represent an approximately 2% increase in margins versus last year. This improvement in our adjusted EBITDA margins is the result of strong revenue growth in most of our service lines. In addition, we have further refined our service portfolio and focused on technology advantages, which differentiates us in the marketplace and enhances margin opportunities as our businesses scale. The discontinuation of noncore or low-margin services and our investment in TreaTech in June to bolster our renewable energy offerings are examples of these efforts.

2023 年第二季度，營運部門調整後 EBITDA 和綜合調整後 EBITDA 利潤率分別為 19.3% 和 13.3%，與去年相比，利潤率成長約 2%。我們調整後的 EBITDA 利潤率的改善是我們大多數服務線收入強勁成長的結果。此外，我們進一步完善了我們的服務組合，並專注於技術優勢，這使我們在市場上脫穎而出，並隨著我們業務規模的擴大，增加了利潤機會。停止非核心或低利潤服務以及我們 6 月對 TreaTech 的投資以支持我們的再生能源產品就是這些努力的例子。

The second theme is continued tailwinds, given new and anticipated environmental regulations and our clients' voluntary focus on environmental stewardship. These tailwinds continue to create attractive growth opportunities across our business. The third theme is the increase in demand for the environmental response services provided by CTEH. CTEH remains elevated this year compared to their typical $75 million to $95 million per year revenue cadence due to several prominent environmental emergencies.

第二個主題是持續的有利因素，因為新的和預期的環境法規以及我們的客戶自願關注環境管理。這些有利因素繼續為我們的業務創造有吸引力的成長機會。第三個主題是對CTEH提供的環境回應服務的需求增加。由於幾個突出的環境緊急情況，與典型的每年 7500 萬至 9500 萬美元的收入節奏相比，CTEH 今年的收入仍然較高。

The fourth theme is the continued benefit to our business from investments we made in prior years in organic and inorganic growth opportunities. Our investments into R&D and software have had a notable impact on our testing business so far this year. In addition, the recent acquisitions of Matrix, GreenPath and Vandrensning, which was just announced, will continue to provide great opportunities for our teams and clients.

第四個主題是我們前幾年在有機和無機成長機會方面的投資為我們的業務帶來持續的好處。今年到目前為止，我們對研發和軟體的投資對我們的測試業務產生了顯著影響。此外，最近剛宣布的對 Matrix、GreenPath 和 Vandrensning 的收購也將繼續為我們的團隊和客戶提供巨大的機會。

And finally, our balance sheet remains strong, and we continue to convert well over 60% of adjusted EBITDA into operating cash flow, which is giving us ample flexibility to continue investing in our people and our business. Our balance sheet remains hedged against rising interest rates, insulating us from the current uncertain rate environment.

最後，我們的資產負債表仍然強勁，我們繼續將超過 60% 的調整後 EBITDA 轉化為營運現金流，這為我們提供了足夠的靈活性來繼續投資於我們的員工和業務。我們的資產負債表仍然對沖利率上升的影響，使我們免受當前不確定的利率環境的影響。

I will now discuss our second quarter performance by segment. Within our Assessment, Permitting and Response segment, excluding CTEH, we were pleased to see very strong organic revenue growth as well as positive contributions from our acquisitions. We remain bullish on the outlook for our environmental advisory services through 2023 and opportunities longer-term, given client focus on environmental stewardship and compliance. CTEH, which is in the segment, performed above run rate levels during the quarter as they engaged in numerous high-profile emergency response projects. Our CTEH team has delivered exceptional service, as always. Our margin increase in this segment was driven by: one, organic growth in our advisory services; and two, CTEH's shift to higher-margin environmental response services.

我現在將按部門討論我們第二季的業績。在我們的評估、授權和回應部門（不包括 CTEH），我們很高興看到非常強勁的有機收入成長以及收購帶來的正面貢獻。鑑於客戶對環境管理和合規性的關注，我們仍然看好 2023 年環境諮詢服務的前景和長期機會。該細分市場中的 CTEH 在本季的表現高於運作水平，因為他們參與了許多備受矚目的緊急應變專案。我們的 CTEH 團隊一如既往地提供卓越的服務。我們在這領域的利潤成長是由以下因素推動的：一是我們的諮詢服務的有機成長；第二，CTEH 轉向利潤率更高的環境響應服務。

Within our Measurement and Analysis segment, demand and organic revenue growth for our testing services remains very strong, particularly in areas such as greenhouse gas measurement and mitigation. Our expanding technical and commercial partnerships, such as the 1 with Thermo Fisher announced in May, are increasing our market reach. Given the building regulatory pipeline, we remain upbeat about continued opportunities in this segment. Though quarterly segment margins are elevated and increased compared to prior years, annual margins in this segment are expected to remain in the high-teens to 20-ish percent as we have previously discussed.

在我們的測量和分析領域，我們的測試服務的需求和有機收入成長仍然非常強勁，特別是在溫室氣體測量和緩解等領域。我們不斷擴大的技術和商業合作夥伴關係（例如 5 月宣布與 Thermo Fisher 建立的 1）正在擴大我們的市場覆蓋範圍。鑑於監管管道的建立，我們對這領域的持續機會保持樂觀。儘管與前幾年相比，季度細分市場利潤率有所提高，但正如我們之前討論的那樣，該細分市場的年度利潤率預計將保持在百分之十到百分之二十左右的水平。

And finally, within our Remediation and Reuse segment, revenue was flat due to the contribution of acquisitions and organic growth in our soil and subsurface remediation business, which offset the expected moderation in our ECT2 technology services, which encompass our water treatment and renewable energy services. Within our Renewable Energy or Biogas business, we have shifted away from higher revenue, lower margin opportunities for which there is notable demand. We are pivoting to a model that more resembles our approach to water treatment, anchored on intellectual property and therefore, more differentiated and more scalable at higher margins. This is why we invested in TreaTech, as we have conviction in their team and we plan to help apply their proprietary technology to transform various client waste streams into valuable resources.

最後，在我們的修復和再利用部門中，由於我們的土壤和地下修復業務的收購和有機成長的貢獻，收入持平，這抵消了我們的ECT2 技術服務（包括水處理和再生能源服務）的預期放緩。在我們的再生能源或沼氣業務中，我們已經放棄了需求顯著的高收入、低利潤機會。我們正在轉向一種更類似於我們水處理方法的模式，以智慧財產權為基礎，因此更具差異化、更具可擴展性和更高的利潤。這就是我們投資 TreaTech 的原因，因為我們對他們的團隊充滿信心，我們計劃幫助應用他們的專有技術，將各種客戶廢物流轉化為寶貴的資源。

This shift in approach will temporarily depress year-over-year revenue growth in the segment in coming quarters, but it will enable us to scale and capture the market opportunity in the medium to long-term in more margin-accretive ways.

這種方法的轉變將暫時抑制未來幾季該領域的同比收入成長，但它將使我們能夠以更能增加利潤的方式擴大規模並抓住中長期的市場機會。

Within our PFAS water treatment business, the recent regulations have been highly favorable to our technology and approach. However, the newly proposed contaminant levels, along with hazardous index values are, in many cases, so low that they are creating near-term uncertainty and challenges for our clients. As a result, our clients are assessing their options and project timelines have shifted out slightly, reflecting the complexity of complying with these new standards. The acquisition of Matrix in June also depressed margins temporarily in the segment. But as we noted earlier, we will use Matrix as a case study of how Montrose increases margins and creates cross-selling opportunities for teams that join us. Allan and I look forward to sharing more details with you about the transition of Matrix into Montrose in the next few quarters.

在我們的 PFAS 水處理業務中，最近的法規對我們的技術和方法非常有利。然而，在許多情況下，新提出的污染物水平以及危險指數值非常低，以至於給我們的客戶帶來了近期的不確定性和挑戰。因此，我們的客戶正在評估他們的選擇，專案時間表略有調整，反映出遵守這些新標準的複雜性。 6 月收購 Matrix 也暫時壓低了該領域的利潤率。但正如我們之前指出的，我們將使用 Matrix 作為案例研究，了解 Montrose 如何提高利潤並為加入我們的團隊創造交叉銷售機會。艾倫和我期待在接下來的幾個季度與您分享有關 Matrix 向 Montrose 過渡的更多細節。

I'd now like to discuss a few recent regulatory updates and industry trends that support our long-term growth outlook. The US EPA continues to focus on PFAS, and in June, finalized a rule incorporating 9 PFAS chemicals into the Toxic Release Inventory program, which triggers additional annual reporting requirements and is likely to increase future demand for our consulting and testing services. With regards to methane emissions, the EPA and Bureau of Land Management have new rules targeting methane emissions, such as flares, vents and leaks. These rules are slated to become final in the third quarter, which should support incremental demand for our emissions measurement, monitoring and assessment services.

我現在想討論一些支持我們長期成長前景的最新監管更新和行業趨勢。美國環保署繼續關注PFAS，並在6 月最終確定了一項規則，將9 種PFAS 化學物質納入有毒物質排放清單計劃，這引發了額外的年度報告要求，並可能增加未來對我們諮詢和測試服務的需求。關於甲烷排放，美國環保署和土地管理局製定了針對甲烷排放的新規則，例如火炬、通風口和洩漏。這些規則預計將在第三季成為最終版本，這將支援對我們的排放測量、監測和​​評估服務的增量需求。

Regarding demand for our environmental consulting services. In July, the EPA launched a $20 billion campaign to advance clean technology and to (inaudible) emissions that promote environmental justice in underserved communities across the country. We anticipate these efforts will drive increased demand for our advisory and testing services. These recent actions, as well as those we've highlighted over the past several quarters, reflect the growing environmental regulatory pipeline impacting our clients. While many of these proposals are in the early rule-making phase, they further underpin the anticipated growth in demand for our services.

關於我們的環境諮詢服務的需求。 7 月，美國環保署發起了一項耗資 200 億美元的活動，以推進清潔技術和（聽不清楚）排放，從而促進全國服務欠缺社區的環境正義。我們預計這些努力將推動對我們的諮詢和測試服務的需求增加。這些最近的行動以及我們在過去幾季強調的行動反映了不斷增長的環境監管管道對我們客戶的影響。雖然其中許多提案還處於早期規則制定階段，但它們進一步支撐了對我們服務的需求的預期成長。

Before I conclude, I would also like to take a moment to highlight the publication of our 2022 sustainability report, which we issued last week and can be found on our website. Many of you, our investors, have asked for more reporting and details on our activities in this realm, so we endeavor to progress our efforts. We look forward to engaging with you on this further.

在結束演講之前，我還想花點時間強調我們上週發布的 2022 年永續發展報告，該報告可以在我們的網站上找到。你們中的許多人，我們的投資者，要求提供有關我們在這一領域的活動的更多報告和詳細信息，因此我們努力推進我們的努力。我們期待與您進一步討論此事。

In summary, I would like to once again thank the Montrose team for their efforts on behalf of our clients. I remain incredibly grateful to all of you. As a result of our strong first and second quarter performance in 2023 and our positive start in this third quarter, we are increasing our full year outlook and guidance for revenue and consolidated adjusted EBITDA. Looking ahead, we remain optimistic in our business and our continued ability to create shareholder value. Thank you for the opportunity to continue doing so.

總之，我要再次感謝 Montrose 團隊代表我們的客戶所做的努力。我仍然非常感謝你們所有人。由於我們 2023 年第一季和第二季的強勁表現以及第三季的良好開局，我們正在提高對收入和綜合調整後 EBITDA 的全年展望和指導。展望未來，我們對我們的業務和持續創造股東價值的能力保持樂觀。感謝您有機會繼續這樣做。

With that, I will hand it over to Allan. Thank you.

這樣，我就把它交給艾倫了。謝謝。

Thank you, Vijay. The strong organic growth across most of our service lines continued in the second quarter, reflecting strong economic and regulatory tailwinds and the success we're seeing with our integrated environmental services business model. We continue to see the themes we've discussed since our IPO 3 years ago play out as the need for environmental solutions has gained significant momentum around the world. Our growth drivers remain intact as we continue to harvest the benefits of our M&A and cross-selling strategies, which helped drive our strong revenue growth and margin expansion during the quarter.

謝謝你，維傑。第二季度，我們大部分服務線持續強勁的有機成長，反映出強勁的經濟和監管推動力以及我們在綜合環境服務業務模式方面所取得的成功。隨著全球對環境解決方案的需求不斷增長，我們自三年前首次公開募股以來所討論的主題繼續得到體現。我們的成長動力保持不變，因為我們繼續收穫併購和交叉銷售策略的好處，這有助於推動我們在本季度強勁的營收成長和利潤率擴張。

Moving to our revenue performance on Slide 8. We saw growth across most of our business lines drive revenues to record levels in the second quarter. Our second quarter revenues increased 13.7% to $159.1 million compared to the prior year quarter. Year-to-date revenues were up 5.8% versus the prior year period to $290.5 million. The primary driver of revenue growth in both periods was organic growth in our Assessment, Permitting and Response and Measurement and Analysis segments, an increase in CTEH revenues and the positive contributions from acquisitions. This was partially offset by lower revenues in our specialty lab we are discontinuing and the timing of projects in our Remediation and Reuse segment. Growth in our year-to-date revenue was also impacted by our planned exit from legacy O&M contracts in 2022. Excluding revenue from discontinued businesses, revenue was up 14.8% to $156.7 million in the second quarter and was up 7.9% to $286.6 million year-to-date.

轉到幻燈片 8 上我們的收入表現。我們看到大多數業務線的成長推動第二季的收入達到創紀錄的水平。與去年同期相比，我們第二季的營收成長了 13.7%，達到 1.591 億美元。年初至今的營收較上年同期成長 5.8%，達到 2.905 億美元。這兩個時期收入成長的主要驅動力是我們的評估、授權和回應以及測量和分析部門的有機成長、CTEH 收入的增加以及收購的積極貢獻。這部分被我們停止的專業實驗室收入下降以及修復和再利用部門專案的時間表所抵消。我們計劃在 2022 年退出遺留 O&M 合同，也影響了我們年初至今的收入增長。不包括已終止業務的收入，第二季度收入增長 14.8% 至 1.567 億美元，去年增長 7.9% 至 2.866 億美元-迄今為止。

Looking at our consolidated adjusted EBITDA performance on Slide 9. Second quarter consolidated adjusted EBITDA was a record $21.2 million or 13.3% of revenue. This compares to consolidated adjusted EBITDA of $15.6 million, or 11.2% of revenue in the prior year quarter. The year-over-year improvement was driven by higher revenues and higher business line margins, driven in part by the benefit of pricing as well as the favorable mix shift in CTEH. Excluding revenue and EBITDA loss from the lab we are discontinuing, consolidated adjusted EBITDA was 13.5% of revenue compared to 12.1% in the prior year, representing a 140 basis point improvement. Year-to-date, consolidated adjusted EBITDA was $37.8 million or 13% of revenue compared to consolidated adjusted EBITDA of $31.3 million or 11.4% of revenue.

看看幻燈片 9 上我們的綜合調整後 EBITDA 表現。第二季綜合調整後 EBITDA 達到創紀錄的 2,120 萬美元，佔營收的 13.3%。相較之下，調整後的綜合 EBITDA 為 1,560 萬美元，佔去年同期營收的 11.2%。同比改善是由更高的收入和更高的業務線利潤率推動的，部分原因是定價優勢以及 CTEH 的有利組合轉變。排除我們即將終止的實驗室的收入和 EBITDA 損失，綜合調整後 EBITDA 佔收入的 13.5%，而上一年為 12.1%，提高了 140 個基點。年初至今，綜合調整後 EBITDA 為 3,780 萬美元，佔營收的 13%，而綜合調整後 EBITDA 為 3,130 萬美元，佔營收的 11.4%。

Excluding revenue and adjusted EBITDA from the lab we are discontinuing, consolidated adjusted EBITDA in the first 6 months of 2023 was $37.8 million compared to $30.9 million in the prior year period, which represented 13.2% and 11.6% of revenues, respectively, a 160 basis point improvement.

不包括我們即將終止的實驗室的收入和調整後EBITDA，2023 年前6 個月的綜合調整後EBITDA 為3,780 萬美元，而去年同期為3,090 萬美元，分別佔收入的13.2% 和11.6%（以160 為基礎）點改進。

With that said, I'll reemphasize that Montrose's performance needs to be assessed annually as quarterly results are not always indicative of annual performance.

話雖如此，我要再次強調 Montrose 的業績需要每年進行評估，因為季度業績並不總是代表年度業績。

Turning to our business segments on Slides 10 and 11. As we highlighted last quarter, we remain focused on balancing our absolute dollar targets for adjusted EBITDA, operating cash flow generation and growth, with an eye towards optimizing longer-term margins. With that in mind, we were pleased to see the impact of shifts to our service portfolio, which helped contribute to the 150 basis point increase in operating segment's adjusted EBITDA margin to 19.3%. In our Assessment, Permitting and Response segment, revenues increased 22.7% year-over-year to $61.4 million. The year-over-year increase was driven primarily by organic growth and to a lesser extent, the positive contributions from acquisitions. CTEH is entirely in this segment. So that business' increase in environmental response revenues are fully captured here.

轉向幻燈片 10 和 11 上的業務部門。正如我們上季度強調的那樣，我們仍然專注於平衡調整後 EBITDA 的絕對美元目標、營運現金流的產生和成長，著眼於優化長期利潤率。考慮到這一點，我們很高興看到服務組合轉變所產生的影響，這有助於營運部門的調整後 EBITDA 利潤率成長 150 個基點，達到 19.3%。在我們的評估、許可和回應部門，營收年增 22.7% 至 6,140 萬美元。同比成長主要由有機成長推動，其次是收購的正面貢獻。 CTEH 完全屬於這一領域。因此，企業環境響應收入的成長在這裡得到了充分體現。

AP&R segment adjusted EBITDA increased 28% year-over-year to $13.8 million, or 22.5% of revenue, up from 21.6% in the prior year quarter, reflecting the benefits of organic growth, favorable CTEH revenue mix and higher aggregate margins across our other businesses within the segment.

AP&R 部門調整後EBITDA 年成長28%，達到1,380 萬美元，佔營收的22.5%，高於去年同期的21.6%，反映出有機成長、有利的CTEH 營收組合以及我們其他業務更高的總利潤率帶來的好處該細分市場內的業務。

In our Measurement and Analysis segment, revenue increased 18.5% to $50.1 million, primarily attributable to strong organic growth as well as the benefits from acquisitions completed subsequent to the end of the prior year quarter. M&A segment adjusted EBITDA increased 53.1% to $10.8 million or 21.6% of revenue, up from 16.7% in the prior year quarter, reflecting strong demand for our testing services and the benefits from our pricing actions. In our Remediation and Reuse segment, revenues were flat year-over-year at $47.6 million, with the benefit of the Matrix acquisition in June fully offsetting the anticipated decline in our ECT2 Water and Biogas business as well as the exiting of discontinued O&M contracts in the prior year quarter.

在我們的測量和分析部門，營收成長了 18.5%，達到 5,010 萬美元，這主要歸功於強勁的有機成長以及上一季末完成的收購帶來的收益。併購部門調整後的 EBITDA 成長 53.1%，達到 1,080 萬美元，佔營收的 21.6%，高於去年同期的 16.7%，反映出對我們測試服務的強勁需求以及我們定價行動帶來的好處。在我們的修復和再利用部門，收入與去年同期持平，為 4760 萬美元，6 月份收購 Matrix 的收益完全抵消了我們 ECT2 水和沼氣業務的預期下降以及 2019 年終止的 O&M 合約的退出。上一年季度。

The decrease in R&R segment adjusted EBITDA as a percent of revenue was a result of the shift in revenue mix, including the dilutive impact of Matrix. Our margin optimization efforts are on track at Matrix, which is set to improve from the mid-single digits to low- to mid-teens adjusted EBITDA margins by the end of 2024.

R&R 部門調整後 EBITDA 佔收入百分比的下降是收入結構變化的結果，包括 Matrix 的稀釋影響。 Matrix 的利潤率優化工作已步入正軌，預計到 2024 年底，調整後 EBITDA 利潤率將從中個位數提高到中雙位數。

Moving to our capital structure on Slide 12. Year-to-date, cash flow from operating activities was $24.5 million, which improved compared to cash used in operating activities of $2.9 million in the prior year period. Cash flow from operations includes the payments of acquisition-related contingent consideration of $0.6 million in the current year and $19.5 million in the prior year. Excluding these acquisition-related payments, cash from operating activities was $25.1 million in the first 6 months of 2023 compared to cash from operating activities of $16.6 million in the first 6 months of 2022, an increase of $8.5 million. This increase was driven primarily by a lower working capital build and higher earnings before noncash items compared to the prior year period.

在投影片 12 上前往我們的資本結構。年初至今，經營活動產生的現金流量為 2,450 萬美元，比上一年期間經營活動使用的現金 290 萬美元有所改善。經營現金流包括本年度支付的與收購相關的或有對價 60 萬美元和上一年的 1,950 萬美元。不包括這些收購相關的付款，2023 年前 6 個月的經營活動現金為 2,510 萬美元，而 2022 年前 6 個月的營運活動現金為 1,660 萬美元，增加了 850 萬美元。與上年同期相比，這一增長主要是由於營運資本建設減少和非現金項目前收益增加所致。

These strong operational cash flows reflect our ongoing focus on balancing the generation of cash with investments in technology, R&D and corporate infrastructure to ensure continued scalability.

這些強勁的營運現金流反映出我們持續專注於平衡現金產生與技術、研發和企業基礎設施投資，以確保持續的可擴展性。

Our leverage ratio as of June 30, 2023, which includes the impact of acquisition-related contingent earn-out obligations payable in cash, was at a healthy 1.9x. During the quarter, we entered into a second interest rate swap on an additional $70 million of borrowing. At quarter-end, we had total debt before debt issuance costs of $170.6 million and $148.3 million of liquidity, including $23.3 million of cash and $125 million of availability on our revolving credit facility. At our current leverage ratio and inclusive of our fixed rate on $170 million of debt under our interest rate swaps, our weighted average interest rate under our credit facility was 4.2% as of June 30, 2023, with no exposure to rising interest rates at current borrowing levels.

截至 2023 年 6 月 30 日，我們的槓桿率（包括與收購相關的或有現金應付義務的影響）處於健康的 1.9 倍。本季度，我們額外借款 7,000 萬美元進行了第二次利率掉期。截至季末，我們的債務發行成本前債務總額為 1.706 億美元，流動資金為 1.483 億美元，其中包括 2,330 萬美元現金和 1.25 億美元的循環信貸額度。以我們目前的槓桿率，並包括利率掉期項下 1.7 億美元債務的固定利率，截至 2023 年 6 月 30 日，我們信貸安排下的加權平均利率為 4.2%，目前不存在利率上升的風險。借貸水平。

Our Series A2 preferred stock has no maturity date. We have the option, but not an obligation, to redeem the preferred shares at any time for cash. The prepayment penalty expired in April of this year. 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 A2 equity in our market cap, our total equity capitalization stands at approximately $1.3 billion.

我們的 A2 系列優先股沒有到期日。我們有選擇權，但沒有義務，隨時贖回優先股以換取現金。提前還款罰款已於今年4月到期。我們認為，鑑於其在利率上升環境下的靈活動態和股息的固定性質，這種優先股工具有利於業務的價值創造潛力。如果將 A2 系列股權的 1.82 億美元餘額計入我們的市值，我們的總股本約為 13 億美元。

Moving to our improved full year outlook on Slide 14. Based on our strong performance in the first half of 2023, we are raising our full year growth outlook for revenue to be in the range of $590 million to $640 million, up from previously issued guidance range of $550 million to $600 million. And we are raising our full year outlook for consolidated adjusted EBITDA to be in the range of $75 million to $81 million, up from the previously issued guidance range of $70 million to $76 million. Our higher revenue and consolidated adjusted EBITDA outlook for the full year represents double-digit growth and margin expansion over the prior year. In addition, looking at the remainder of the year, we expect revenues and adjusted EBITDA to be stronger in the third quarter compared to the fourth quarter of 2023.

轉到幻燈片 14 上我們改進的全年前景。基於我們 2023 年上半年的強勁表現，我們將全年收入成長前景上調至 5.9 億至 6.4 億美元，高於先前發布的指導範圍為5.5 億至6 億美元。我們將全年合併調整後 EBITDA 的預期上調至 7,500 萬美元至 8,100 萬美元，高於先前發布的 7,000 萬美元至 7,600 萬美元的指導範圍。我們對全年更高的收入和綜合調整後 EBITDA 前景表示比上一年實現兩位數的成長和利潤率擴張。此外，展望今年剩餘時間，我們預計第三季的營收和調整後 EBITDA 將比 2023 年第四季更強。

We remain optimistic about the momentum in our business and our ability to sustainably create shareholder value, given the resiliency of our business model and the expanding need for our differentiated environmental solutions. Thank you all for joining us today and for your continued interest in Montrose, and a big thank you to our team members for all their hard work in driving our solid results. We look forward to the opportunities we see ahead and updating you on our progress next quarter. Operator, we are ready to open the lines to questions.

鑑於我們業務模式的彈性以及對差異化環境解決方案不斷增長的需求，我們對我們的業務勢頭和可持續創造股東價值的能力保持樂觀。感謝大家今天加入我們，感謝你們對 Montrose 的持續關注，並非常感謝我們的團隊成員為推動我們取得紮實成果而付出的辛勤工作。我們期待未來的機會，並向您通報我們下個季度的進展。接線員，我們已準備好開始提問。

(Operator Instructions) Today's first question comes from Jim Ricchiuti with Needham & Company.

（操作員說明）今天的第一個問題來自 Needham & Company 的 Jim Ricchiuti。

I was hoping to get a better -- I was hoping to get a better sense of the expected contribution from Matrix and the legacy Montrose, if you will, just as it relates to the changes in your full year guidance.

我希望得到更好的——我希望更好地了解 Matrix 和傳統 Montrose 的預期貢獻，如果你願意的話，就像它與你全年指導的變化相關一樣。

Yes, Matrix -- hey Jim, this is Allan. Matrix runs at $75 million to $80 million of revenue on an annual basis and about $4.5 million of EBITDA. That tends to be back-end weighted, just in terms of the seasonality of that business. So a little more than half of that $4.5 million is baked into the updated guidance. And...

是的，《駭客任務》——嘿吉姆，這是艾倫。 Matrix 的年收入為 7,500 萬至 8,000 萬美元，EBITDA 約為 450 萬美元。僅就該業務的季節性而言，這往往是後端加權的。因此，這 450 萬美元中的一半多一點已納入更新後的指導中。和...

You may have given it. Did they -- did you provide any contribution number for Matrix and the portion of the quarter was in? I think it was 1 month, right?

你可能已經給了。他們是否——您是否提供了 Matrix 的任何貢獻數字以及該季度的部分？我記得是1個月吧？

Yes. That's right. Yes, 1 month. We didn't -- it's about $8 million to $9 million of revenue, running 4% to 5% margins in the month of June.

是的。這是正確的。是的，1個月。我們沒有——6 月份的收入約為 800 萬至 900 萬美元，利潤率為 4% 至 5%。

Got it. And just a follow-up question. Just as it relates to the timing issues around some of the projects and the Remediation and Reuse segment, I'm wondering if you could elaborate on that a little bit.

知道了。只是一個後續問題。正如它涉及一些項目以及修復和重複使用部分的時間問題一樣，我想知道您是否可以詳細說明一下。

Yes. Jim, this is Vijay. We have -- we're primarily referring to the ECT2 business when we talk about that, which is a combination of our Water and Biogas business. And so you have to look at that more on an annual basis because quarter in, quarter out, some of these projects would either roll on or roll off, which may cause some slight variance in what the quarterly comparisons look like.

是的。吉姆，這是維傑。當我們談論這個時，我們主要指的是 ECT2 業務，它是我們的水和沼氣業務的組合。因此，您必須每年更多地關注這一點，因為每季度、每季度，其中一些項目要么滾動，要么滾動，這可能會導致季度比較的結果出現一些細微的差異。

Got it. And as you think about the ECT2 business looking out over the balance of the year, how are you feeling about that? And I also wanted to just follow up as it relates to ECT2, is just on the acquisition you announced yesterday in Denmark. Even as I went through the Google translation function, I'm sure the combined benefits of this business and ECT2 are maybe more apparent than the cursory look that I had on their website. So I wonder if you could just give us a sense as to what you're seeing in that part of the business, Vijay.

知道了。當您展望今年剩餘時間的 ECT2 業務時，您有何感受？我還想跟進一下與 ECT2 相關的情況，即您昨天在丹麥宣布的收購。即使我使用了 Google 翻譯功能，我也確信這項業務和 ECT2 的綜合優勢可能比我在他們的網站上粗略瀏覽的內容更明顯。所以我想知道你能否讓我們了解一下你在這部分業務中看到的情況，Vijay。

Sure. Yes. Let me take the first question -- the first part of the question, which is when we provided guidance at the beginning of the year, Jim, we talked about that business being flat this year, right? The combination of our Water and Biogas business. And we spoke over the last couple of quarters about our desire to pivot the Biogas part in particular towards more of a technology-anchored long-term solution. So we're kind of doing exactly that. So that business will be flat. And if we fully pivot to the technology solutions, the Biogas part, in particular, will be down year-on-year, but the long-term outlook for us is as bullish as ever, Jim. And that's just part of our ongoing margin optimization efforts.

當然。是的。讓我回答第一個問題——問題的第一部分，即我們在年初提供指導時，吉姆，我們談到今年業務持平，對吧？我們的水和沼氣業務的結合。在過去的幾個季度中，我們談到了我們希望將沼氣部分轉向更多以技術為基礎的長期解決方案。所以我們就是這麼做的。這樣生意就會平淡。如果我們完全轉向技術解決方案，特別是沼氣部分，將同比下降，但我們的長期前景一如既往地樂觀，吉姆。這只是我們正在進行的利潤優化工作的一部分。

And then as it relates to Vandrensning, which we just announced, it's a very small team, slightly outside of Copenhagen. And it's -- they're just a very complementary group to our ongoing efforts already on the ground in Scandinavia. And we're really excited about not only what they're doing with PFAS today, but how they can continue to grow with our team, utilizing the technology that we've talked about with you before.

然後，就我們剛剛宣布的 Vandrensning 而言，這是一個非常小的團隊，位於哥本哈根稍遠的地方。他們只是我們在斯堪的納維亞半島正在進行的努力的一個非常補充的團隊。我們不僅對他們今天在 PFAS 所做的事情感到非常興奮，而且對他們如何利用我們之前與您討論過的技術繼續與我們的團隊一起成長感到興奮。

Got it. I'll jump back in the queue.

知道了。我會跳回到隊列中。

Thanks, Jim.

謝謝，吉姆。

Our next question comes from Tim Mulrooney with William Blair.

我們的下一個問題來自蒂姆·馬爾魯尼和威廉·布萊爾。

This is Sam Kusswurm on for Tim. I guess to start, I know you shared you expect to bring Matrix margins up to low- to mid-teens range by 2024. Now that you've had some time to work with the acquisition more, would you mind sharing what changes specifically you're trying to make to drive that margin expansion?

我是山姆·庫斯沃姆 (Sam Kusswurm) 替蒂姆 (Tim) 發言。我想首先，我知道您表示希望在 2024 年將 Matrix 的利潤率提高到十幾歲以下的範圍。現在您已經有一些時間更多地處理收購工作，您介意分享一下具體發生的變化嗎？正在努力推動利潤率擴張嗎？

Sure. Yes. Sam, it's Allan. The Matrix business is very similar to many businesses we have in the U.S., and to a lesser extent, a smaller business that we run in Canada. And so the margin profile really should be similar to those businesses, and they tend to run in the mid-teens. So aligning pricing, we've done a pretty deep dive on pricing, aligning KPIs. And then the benefit of cross-selling and cross-utilization should enable us to improve some of those key performance indicators for them. And if you combine all of that, you get their margins up to where we run all of our other businesses. So that, obviously early days, but we've been incredibly impressed by the caliber of the Matrix team and the innovation activities are on track and going well.

當然。是的。山姆，這是艾倫。 Matrix 業務與我們在美國的許多業務非常相似，並且在較小程度上與我們在加拿大經營的規模較小的業務非常相似。因此，利潤率確實應該與這些企業類似，而且它們的利潤率往往在十幾歲左右。因此，調整定價，我們對定價、調整 KPI 進行了相當深入的研究。然後，交叉銷售和交叉利用的好處應該使我們能夠改善他們的一些關鍵績效指標。如果將所有這些結合起來，他們的利潤率將達到我們經營所有其他業務的水平。因此，這顯然還處於早期階段，但 Matrix 團隊的能力給我們留下了令人難以置信的印象，而且創新活動正在步入正軌並且進展順利。

Sam, I would just add, Allan's exactly right. I would add that we've historically talked about how this is a revenue synergy story and not a cost story. And what's particularly compelling about the Matrix narrative is that the management team there is not only exceptional, but 100% aligned with these efforts. So this is a very collaborative effort, and we're really excited to share more of this with you, and we expect to do so when we report Q3 earnings.

山姆，我想補充一點，艾倫是完全正確的。我想補充一點，我們一直討論過這是一個收入協同故事，而不是一個成本故事。 《駭客任務》的敘述特別引人注目的是，那裡的管理團隊不僅非常出色，而且 100% 與這些努力保持一致。因此，這是一項非常協作的工作，我們非常高興與您分享更多內容，我們預計在報告第三季收益時會這樣做。

Got you. Appreciate that. Maybe pivoting on the Biogas, just in relation to Biogas business. I was wondering if you or your clients even had any thoughts on the EPA's recent finalization of the renewable fuel standard and what that might mean for your business going forward through the year and maybe even beyond?

明白你了。感謝。也許以沼氣為中心，只是與沼氣業務有關。我想知道您或您的客戶是否對美國環保署最近確定的可再生燃料標準有任何想法，這對您今年甚至更長的業務可能意味著什麼？

Yes. They -- that has a broader effect on the market right now, Sam. And our business today is primarily the conversion of ag waste to the negative [CI R&G]. With the investment in TreaTech, we are pretty excited about the fact that gives us access to many more waste streams, including industrial waste streams. And so we just see broader -- you're exactly right, we see broader kind of tailwinds in the market and a broad-based demand cycle here, which is why we've been in it, we've been talking about it. And we're pretty bullish on what that looks like for us over the next couple of years.

是的。他們——現在對市場有更廣泛的影響，山姆。我們今天的業務主要是將農業廢棄物轉化為負能量 [CI R&G]。透過對 TreaTech 的投資，我們感到非常興奮，因為它使我們能夠接觸到更多的廢物流，包括工業廢物流。所以我們看到了更廣泛的——你是完全正確的，我們看到了市場上更廣泛的順風和廣泛基礎的需求週期，這就是我們一直在其中、我們一直在談論它的原因。我們對未來幾年的情況非常樂觀。

Today's next question comes from Andrew Obin with Bank of America.

今天的下一個問題來自美國銀行的安德魯‧奧賓。

Can you hear me?

你聽得到我嗎？

Hey Andrew, yes.

嘿安德魯，是的。

Just switching to PFAS. I think recently, there's been these settlement talks in the news, DuPont, Chemours, and of course, the big one, 3M, was water authorities, right? And I think the structure of the settlements, they're upfront-loaded in terms of state water authorities actually want to do remediation sooner rather than later. Are you having any conversations with the water authorities about these sort of cleanup projects? And any sense of the timeline? I appreciate this is not sort of next quarter, but we're finally starting to see a large amount of money coming into the system, notwithstanding the issues you sort of highlighted about the fact that nobody can detect PFAS. That aside, there are actual money for remediation coming in. Can you just give us some color how you expect this to play out over the next 2, 3 years?

只是改用PFAS。我想最近新聞中出現了這些和解談判，杜邦公司、科慕公司，當然還有最大的公司 3M，還有水務局，對吧？我認為定居點的結構，他們是預先加載的，州水務部門實際上希望盡快進行修復。您是否正在與水務部門就此類清理項目進行對話？對時間線有什麼感覺嗎？我很高興這不是下個季度的事，但我們終於開始看到大量資金進入該系統，儘管您強調了沒有人能夠檢測到 PFAS 的問題。除此之外，還有實際的資金用於補救。您能否告訴我們您預計這種情況在未來 2、3 年內會如何發展？

Yes. We -- so a couple of themes that I think are worth highlighting, Andrew. We are close to many of the folks you talked about. And so we are engaged more broadly in treatment efforts. The settlements primarily impact municipal drinking water, (inaudible) season. That's just not an area we've historically been focused in. So no, the short answer is that's not a key focus for us, Andrew, and hasn't been and likely won't be. Where our technology will really play well is when there's high concentrations of PFAS and concerns around short-chain and long-chain molecules and a desire to kind of focus on a lower footprint and impact as part of the treatment process. So the short answer is that's not a key focus. It hasn't been, and is not a key focus for us.

是的。我們——安德魯，我認為有幾個主題值得強調。我們和你談到的許多人都很親近。因此，我們更廣泛地參與治療工作。這些定居點主要影響市政飲用水（聽不清楚）季節。這不是我們歷來關注的領域。所以不，簡短的答案是，這不是我們的重點關注點，安德魯，過去不是，也可能不會。當 PFAS 濃度較高、對短鏈和長鏈分子的擔憂以及希望在處理過程中關注較低的足跡和影響時，我們的技術才能真正發揮作用。所以簡短的回答是這不是重點。它過去不是，現在也不是我們關注的重點。

But we do think there's sustained push. One of the interesting themes that Allan, Todd and I have been talking about is the regulations that have come out have very much been in favor of kind of our broader technology portfolio. But how our clients react to the uncertainty on the regulations and the ability to measure it is going to be something we watch closely. So short answer is no. The settlements don't really swing our outlook all that much this year or next.

但我們確實認為有持續的推動力。艾倫、托德和我一直在談論的有趣主題之一是，已經出台的法規非常有利於我們更廣泛的技術組合。但我們的客戶對法規不確定性的反應以及衡量法規不確定性的能力將是我們密切關注的事情。所以簡短的回答是否定的。和解協議並沒有真正改變我們今年或明年的前景。

Got you. And just a follow-up for Remediation and Reuse. I think just looking at our model, it just implies material acceleration into the second half. And just sort of -- I think you've touched on it, but just to confirm, you have visibility, obviously, on the projects to sort of support this view. A, is that the right way of thinking about it? And B, how is the pipeline, near-term?

明白你了。這只是修復和重複使用的後續行動。我認為只要看看我們的模型，它就意味著下半年的物質加速。我認為您已經談到了這一點，但只是為了確認，您顯然對支持這一觀點的項目具有可見性。 A，這樣的思考方式正確嗎？ B，近期管道狀況如何？

Yes. Andrew, it's Allan. Yes, Good. Thanks. We do expect the back half of the year for that segment to be up over the front half, but it's -- Matrix is driving a pretty substantial part of that. As Vijay has said, our Biogas business with the pivot will likely be down year-over-year. And then the ECT2 business, the Water business is likely to be -- have a similar back half to the front half of the year.

是的。安德魯，這是艾倫。對很好。謝謝。我們確實預計該細分市場今年下半年的業績將超過上半年，但 Matrix 正在推動其中相當大的一部分。正如維傑所說，我們的沼氣業務與樞軸可能會比去年同期下降。然後，ECT2 業務、水務業務很可能會在今年下半年和上半年有類似的表現。

Okay.

好的。

So no. Yes. They have the building work.

所以不行。是的。他們有建築工作。

Yes, I'll take it offline.

是的，我會把它離線。

Thanks, Andrew.

謝謝，安德魯。

The next question comes from Stephanie Yee with JPMorgan.

下一個問題來自摩根大通的 Stephanie Yee。

I wanted to ask about the comments around some of the PFAS projects being pushed out by the clients. I think maybe I missed it last quarter, but I thought some of the project timing shift was due to the tremendous growth that you guys saw in the prior year, and so giving the team time to kind of absorb some of those projects. So I'm just wondering if kind of the project timelines that we're hearing about this quarter, it was something that developed in the quarter? Or was it just something that was ongoing that you didn't necessarily call out in the prior quarter?

我想詢問有關客戶推出的一些 PFAS 項目的評論。我想也許我錯過了上個季度，但我認為一些專案時間的轉變是由於你們在前一年看到的巨大成長，因此給了團隊時間來吸收其中一些專案。所以我只是想知道我們在本季聽到的專案時間表是否是在本季制定的？或者這只是正在進行中的事情，您不一定會在上一季指出？

Stephanie, this is Vijay. Why don't I take that one. So you're exactly right. We grew, call it, over 100% organically in 2022. So when we talked about at the end of last year and the early part of this year, even as part of the guidance discussions, what this year would look like. We wanted to make sure that, that team got their legs under them, just given the incredible growth last year and the fact that they -- the team's size almost tripled and the project's scale and scope and geographies expanded materially. And our desire was really not only for team reasons, but also for quality and systems control reasons. So that is absolutely still true.

史蒂芬妮，這是維傑。我為什麼不拿那個。所以你是完全正確的。到 2022 年，我們的有機成長將超過 100%。因此，當我們在去年年底和今年年初討論今年會是什麼樣子時，即使作為指導討論的一部分，也是如此。我們希望確保團隊能夠站穩腳跟，考慮到去年令人難以置信的成長，以及團隊規模幾乎增加了兩倍並且專案的規模、範圍和地域大幅擴大的事實。我們的願望實際上不僅是出於團隊原因，也是出於品質和系統控制原因。所以這絕對是正確的。

What we were alluding to regarding the regulations is that as the certainty around those continues to expand, which has happened, right, not only in Q1 but also in Q2, and there's more clarity on how the EPA has been regulated being able to measure at 4 parts per trillion or lower or getting down to all the short-chain and long-chain compounds, the analytics capability there is a little stretched. And so what our clients are talking to us about is, even with these compliance standards, how do I know I'm there? And how is this going to get regulated? And how do I think about these solutions going in as a result of that? Even though our demand cycle is higher, the execution and start of these projects is slower, if that makes any sense.

我們所提到的有關法規的內容是，隨著這些法規的確定性不斷擴大，這種情況不僅發生在第一季度，而且發生在第二季度，並且 EPA 的監管方式更加清晰，能夠在萬億分之四或更低，或深入所有短鏈和長鏈化合物，分析能力有點捉襟見肘。因此，我們的客戶與我們談論的是，即使有這些合規標準，我怎麼知道我在那裡？這將如何受到監管？我如何看待由此產生的這些解決方案？儘管我們的需求週期較高，但這些專案的執行和啟動速度較慢（如果這有意義的話）。

And it's largely around -- it's largely around trying to react to not only what the standards are, which absolutely favors us, but now, a more practical question of like how do I get there? And how do I even measure it and know that I'm there?

這很大程度上是圍繞著——這主要是圍繞著試圖對標準做出反應，這絕對有利於我們，但現在，還有一個更實際的問題，例如我如何到達那裡？我如何測量它並知道我在那裡？

Okay. Okay. That's very helpful. And then just on the acquisition that you announced in Denmark. Does that kind of double the size of ECT2 presence in Europe? And does it kind of give you a platform for further [acquisitions] in Europe?

好的。好的。這非常有幫助。然後就是您在丹麥宣布的收購。這是否會使 ECT2 在歐洲的規模增加一倍？這是否為您在歐洲進一步[收購]提供了平台？

Yes. Our European footprint is still very small. So we're talking about kind of a dozen people or so working on various select projects. We've been very cautious, Stephanie, as you know, expanding into the European geography. More for operational reasons, really. There's a lot of demand there, clearly, and they're very forward-leaning on regulations, particularly PFAS regulations. But the short answer is yes. It does increase the size of that team, our project reach and our ability to continue expanding there. Absolutely.

是的。我們在歐洲的足跡仍然很小。所以我們談論的是大約十幾個人從事各種選定的專案。如你所知，史蒂芬妮，我們在向歐洲地區擴張時一直非常謹慎。實際上，更多是出於營運原因。顯然，那裡有很多需求，而且他們對法規（特別是 PFAS 法規）非常前瞻性。但簡短的回答是肯定的。它確實增加了該團隊的規模、我們的專案範圍以及我們繼續擴展的能力。絕對地。

The next question comes from Wade Suki with Capital One.

下一個問題來自第一資本的 Wade Suki。

I've got worse -- just hate to dwell on Matrix too much. But I was wondering if you could talk a little bit more about revenue top line synergies. And I gather, there may be parts of the business -- I might be misunderstood on this, but maybe parts of the business that are more or less attractive, and just trying to think about that sort of in the context of growth looking out to 2024.

我變得更糟了——只是討厭過度關注《駭客任務》。但我想知道您是否可以多談談收入頂線協同效應。我認為，業務的某些部分可能會被誤解，但也許業務的某些部分或多或少具有吸引力，並且只是嘗試在成長的背景下考慮這一點2024 年。

Yes. I'll talk conceptually about the revenue side, and then Allan, certainly jump in on kind of what the outlook looks like. We -- this team is an exceptional team of scientists and engineers weighed a lot like what we have on the remediation and consulting side here in the United States. And so as we look at -- I'll give you a couple of simple examples. As we look at our energy and utility companies on the West and some of the expertise that we need as we continue to meet demand cycles in the United States. Or we look at some of the energy companies and the work we're doing both stateside and in Canada. These teams are very complementary to each other, right, in terms of the depth of expertise and understanding as to how the hydrogeology works or how the environmental regulations work.

是的。我將從概念上討論收入方面，然後艾倫肯定會介入討論前景。我們——這個團隊是一支由科學家和工程師組成的傑出團隊，與我們在美國的修復和諮詢方面的團隊非常相似。因此，當我們考慮時，我將給您幾個簡單的例子。當我們審視西方的能源和公用事業公司時，以及我們在繼續滿足美國需求週期時所需的一些專業知識。或者我們看看一些能源公司以及我們在美國和加拿大所做的工作。這些團隊在專業知識的深度以及對水文地質學或環境法規如何運作的理解方面彼此非常互補。

And so when we talk about revenue synergies, we're talking about cross-utilizing staff for our clients in projects that kind of switch between both the Canadian and the U.S. marketplace. Does that make sense?

因此，當我們談論收入協同效應時，我們談論的是在加拿大和美國市場之間切換的專案中為客戶交叉利用員工。那有意義嗎？

Yes, absolutely. That's great.

是的，一點沒錯。那太棒了。

Okay. And then they also -- and when you say parts of the business that we find attractive, they are -- we find all of the business attractive. I mean they are not only remediation experts, but they also have a depth of expertise and a growing portfolio with things like greenhouse gas assessment and mitigation with water and water resource management. And so we talked a couple of quarters ago about acquisitions we had made. Small, but very strategic ones in Northern California, focused on very similar issues. And so that's another example of where there's going to be complementarity between the 2 teams.

好的。然後他們也——當你說我們認為有吸引力的部分業務時，他們是——我們發現所有業務都有吸引力。我的意思是，他們不僅是修復專家，而且還擁有深厚的專業知識和不斷增長的投資組合，例如溫室氣體評估和水和水資源管理緩解措施。因此，我們在幾個季度前討論了我們進行的收購。位於北加州的規模雖小，但非常具有戰略意義，專注於非常相似的問題。這是兩個團隊之間互補性的另一個例子。

So we're really bullish for a host of reasons, and we continue to see that as a platform for us to expand both in the Canadian and U.S. markets. As far as outlook for next year, our focus right now, Wade, is really more on getting their margins to where the rest of our business is. But the revenue synergy is already in flight. There are -- the teams are already working really well together, and we expect that to continue.

因此，出於多種原因，我們非常看好，我們繼續將其視為我們在加拿大和美國市場擴張的平台。就明年的前景而言，韋德，我們現在的重點實際上更多的是讓他們的利潤達到我們其他業務的水平。但所得綜效已經開始顯現。這些團隊已經在很好地合作，我們希望這種情況能持續下去。

Okay. Perfect. And just switching gears a little bit here. You've put a couple of teasers out here in the press release and presentation on software. I'm wondering if you could expand a little bit more on what you're doing on that front. That would be fantastic.

好的。完美的。這裡只是稍微切換一下。您在軟體的新聞稿和簡報中發布了一些預告片。我想知道您是否可以進一步擴展一下您在這方面正在做的事情。那太棒了。

Yes. It's a fair question. We haven't talked about it as much. We -- with the acquisition of [Sensible EDP,] we began more formally talking about the aggregation of data and the presentation of environmental data for our clients across environmental media, starting with air, Wade. And what we're seeing is that on the real-time measurement of greenhouse gases and other contaminants like ethylene oxide, that capability is really playing to our advantage.

是的。這是一個公平的問題。我們還沒有談論太多。透過收購 [Sensible EDP]，我們開始更正式地討論數據聚合以及跨環境媒體為客戶呈現環境數據，從空氣開始，Wade。我們看到的是，在即時測量溫室氣體和環氧乙烷等其他污染物時，這種能力確實發揮了我們的優勢。

And so what I mean by that is we are 1 of the largest air testing firms in the world, and we're able to put together our source leak fence line ambient capabilities, and we're able to present that information in real time to our clients and as needed to communities that the clients are around. And so that's a pretty substantive technological advantage, and it's manifesting itself in our numbers. And the reason we talk about it more now is because it's starting to show up in a more meaningful way, and it's moving the dial on our Measurement and Analysis segment. Does that make sense?

所以我的意思是，我們是世界上最大的空氣測試公司之一，我們能夠整合我們的源洩漏圍欄線環境能力，並且我們能夠實時向人們提供該信息我們的客戶以及客戶所在社區的需要。所以這是一個相當實質的技術優勢，它在我們的數據中得到了體現。我們現在更多地談論它的原因是因為它開始以更有意義的方式出現，並且它正在改變我們的測量和分析部分。那有意義嗎？

Absolutely. Thank you very much. Appreciate it.

絕對地。非常感謝。欣賞它。

(Operator Instructions) The next question is a follow-up from Jim Ricchiuti with Needham & Company.

（操作員說明）下一個問題是來自 Needham & Company 的 Jim Ricchiuti 的後續問題。

Hey, Jim.

嘿，吉姆。

Hello, sir. Your line is live.

你好先生。您的線路已上線。

Sorry about that. Allan, I just want to ask about the step-up in SG&A in the quarter. How much of that just possibly due to the increase in M&A activity? Or just maybe in broad strokes, how we might be thinking about SG&A going forward?

對於那個很抱歉。艾倫，我只想問一下本季銷售管理及行政費用 (SG&A) 的提升情況。其中有多少可能是由於併購活動的增加？或者從廣義上講，我們如何考慮未來的 SG&A？

Yes. Jim, there's a pretty robust breakdown in the Q that will be filed later today. But at a high level, it's driven by G&A from acquisitions. It's driven by -- there was a change that we've made in the classification of certain of our back-office folks that used to be very decentralized. And as we've centralized those functions, they're acting more like G&A than as an operational cost of sale. And so there is a switch this year versus how it was classified in the prior year. And again, those numbers are broken out. And then yes, acquisition costs are higher than last year, just given the higher activity this year.

是的。吉姆，今天稍後將提交的 Q 中有一個相當詳細的細分。但在較高層面上，它是由收購的一般管理費用所驅動的。它的驅動因素是——我們對某些後台人員的分類進行了更改，這些人員過去是非常分散的。由於我們集中了這些職能，它們的作用更像是一般管理費用，而不是銷售營運成本。因此，今年的分類方式與去年相比發生了變化。這些數字再次被細分。是的，考慮到今年的活動較多，購置成本比去年更高。

And then on a go-forward basis, is there anything we should keep in mind about your SG&A, just with the scaling of the business?

然後，展望未來，關於您的銷售及管理費用（SG&A），除了業務規模之外，還有什麼我們應該牢記的嗎？

Yes. Again, the way we look at it, Jim, is separating out kind of the corporate SG&A. And again, our commitment has been to keep that at or below 6%. And for the full year this year, we do expect it to be lower than 6% and declining, as we've said in the future years. And then the SG&A that resides within operations, that is slightly more fixed, right? Again, given -- given the nature of fixed rentals and the -- the back-office support folks that still reside in operations. Those -- they really just got inflationary increases that drive those. It's not so much driven by an increase in revenue. So you should see that also be a more modest increase year-over-year going forward.

是的。吉姆，我們再次看待它的方式是將公司 SG&A 分開。我們再次承諾將這一比例保持在 6% 或以下。正如我們在未來幾年所說的那樣，我們預計今年全年的成長率將低於 6%，並且還會下降。然後，SG&A 屬於營運範圍，稍微固定一些，對吧？再次考慮到固定租金的性質和仍在運作的後台支援人員。這些——他們實際上只是受到了通貨膨脹的推動。這並不是由收入成長所推動的。因此，您應該看到，未來的同比增長也將更加溫和。

Final question for me, and I apologize if you gave this. I've got a couple of calls going on. But just wondering about if you can -- if you gave any color on the nature and the contribution of the emergency response work that contributed to the performance of CTEH in the quarter. And I guess the other thing to keep in mind here is the profile, the margin profile of this business, the work that they're doing is better margin, certainly than we've seen in the recent past. Is that correct?

我的最後一個問題，如果你提出這個問題，我深感抱歉。我接到了幾通電話。但只是想知道是否可以 - 您是否對應急響應工作的性質和貢獻進行了說明，這些工作對 CTEH 本季的業績做出了貢獻。我想這裡要記住的另一件事是該業務的概況、利潤概況，他們正在做的工作的利潤率肯定比我們最近看到的要好。那是對的嗎？

Yes, that's right. That's right, Jim. The environmental response work is higher margin than last year, right? Particularly in the first half, when we had COVID, that was a more prominent service stream. I mean these numbers are in the queue, Jim. But if you think about kind of their typical cadence at 85 midpoint of kind of low $20-ish million of revenue a quarter, they were closer to 38 for the quarter, right? So they're substantially elevated, and those margins are much more similar to the normalized 25% margin levels that we would expect for them.

恩，那就對了。沒錯，吉姆。環境因應工作的幅度比去年高吧？特別是在上半年，當我們感染新冠病毒時，這是一個更突出的服務流。我的意思是這些數字都在隊列中，吉姆。但如果你考慮他們每季收入 2000 萬美元左右的 85 中點的典型節奏，他們本季接近 38，對吧？因此，它們的利潤率大幅提高，並且與我們預期的標準化 25% 利潤率水準更加相似。

And we do expect them to return back to that normal cadence of kind of [20% to 25%] a quarter in the back half of the year, Jim.

我們確實預計他們會在下半年恢復到每季 [20% 到 25%] 的正常節奏，吉姆。

This concludes our question-and-answer session. I would now like to turn the conference back over to Mr. Vijay Manthripragada for any closing remarks.

我們的問答環節到此結束。現在我想將會議轉回由 Vijay Manthripragada 先生發表閉幕詞。

Thank you. Thank you all for the time and for the interest in Montrose and we're really excited about the rest of the year, and we're looking forward to our next conversation with you. Thank you again.

謝謝。感謝大家抽出寶貴的時間以及對 Montrose 的興趣，我們對今年剩下的時間感到非常興奮，期待與您的下一次對話。再次感謝你。

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.

會議現已結束。感謝您參加今天的演示，您現在可以斷開連接了。