Montrose Environmental Group Inc (MEG) 2024 Q3 法說會逐字稿

Good day, and welcome to the Montrose Environmental Group, Inc. third quarter 2024 earnings call. (Operator Instructions) Please note that this event is being recorded. I would now like to turn the conference over to Adrianne Griffin, Senior Vice President, Investor Relations, and Treasury. Please go ahead.

美好的一天，歡迎參加 Montrose Environmental Group, Inc. 2024 年第三季財報電話會議。（操作員說明）請注意，該事件正在被記錄。我現在想將會議交給投資者關係和財務部高級副總裁阿德里安·格里芬 (Adrianne Griffin)。請繼續。

Thank you, and welcome to our third quarter 2024 earnings call. Joining me on the call are Vijay Manthripragada, our President and Chief Executive Officer and Allan Dicks, our Chief Financial Officer. During our prepared remarks today, we will refer 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，歡迎參加我們的 2024 年第三季財報電話會議。與我一起參加電話會議的還有我們的總裁兼執行長 Vijay Manthripragada 和我們的財務長 Allan Dicks。在我們今天準備的發言中，我們將參考我們網站投資者部分提供的收益報告。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.

轉到投影片 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。由於評估我們的經營業績和財務前景時應考慮的已知和未知的風險和不確定性，實際結果可能會存在重大差異。

We refer you to our recent SEC filings including our annual report on form 10-K for the fiscal year ended December 31, 2023, which identify the principal risks and uncertainties that could affect any forward-looking statements as well as our future performance. We assume no obligation to update any forward-looking statements.

我們建議您參閱我們最近向SEC 提交的文件，包括截至2023 年12 月31 日的財年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我們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。

On today's call, we will discuss or provide certain non-GAAP financial measures such as 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.

在今天的電話會議上，我們將討論或提供某些非公認會計準則財務指標，例如合併調整後 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。

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 to their most directly comparable GAAP measure.

請參閱收益報告或收益報告的附錄，討論為什麼我們認為這些非 GAAP 衡量標準對投資者有用、使用這些衡量標準的某些限制以及與其最直接可比的 GAAP 衡量標準的調整。

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

就這樣。我現在想將電話轉給 Vijay，從幻燈片 4 開始。

Thank you, Adrian, and welcome to all of you who are joining us today. I will start with an update on our business and our outlook and I will then speak generally to the third quarter earnings presentation shared on our website.

謝謝你，阿德里安，歡迎今天加入我們的所有人。我將首先介紹我們的業務和前景的最新情況，然後我將概括介紹我們網站上分享的第三季收益報告。

Allan will provide the financial highlights and following our prepared remarks, we will host a question and answer session. While today's call will highlight third quarter performance, it is important to reiterate that our business is best assessed on an annual basis. Demand for environmental solutions does not consistently follow quarterly patterns and we manage our operations using annual perspective.

艾倫將提供財務摘要，並在我們準備好的演講之後，我們將舉辦問答環節。雖然今天的電話會議將重點介紹第三季的業績，但重要的是要重申，我們的業務最好按年度進行評估。對環境解決方案的需求並不總是遵循季度模式，我們使用年度視角來管理我們的營運。

Before we dive into the quarter's performance, I would like to welcome our new colleagues from origins laboratory, an environmental lab serving Colorado and the US Mountain States who joined us in September. I would also like to take a moment to express my gratitude for the approximately 3,500 Montrose colleagues around the world. Through their continued dedication and service to our customers, in many instances, despite the personal and community challenges caused by two major hurricanes, we were able to produce another quarter of record results and further our position as a leader in the environmental industry.

在我們深入了解本季的業績之前，我要歡迎來自起源實驗室的新同事，該實驗室是一家服務於科羅拉多州和美國山區的環境實驗室，他們於 9 月加入我們。我還想花一點時間向世界各地約 3,500 名 Montrose 同事表示感謝。在許多情況下，透過他們對客戶的持續奉獻和服務，儘管兩次重大颶風給個人和社區帶來了挑戰，我們仍然能夠再創造一個季度的創紀錄業績，並進一步鞏固我們作為環境行業領導者的地位。

As for Q3, 2024 we are very pleased to report another period of record results. Our quarterly revenue reached $178.7 million and our consolidated adjusted EBITDA reached $28.3 million. Our consolidated EBITDA margin was 15.8% which was 190 basis point improvement over the prior year quarter. This exceptional performance was driven by robust organic growth across most of our business lines as well as positive impacts from recent acquisitions.

至於 2024 年第三季度，我們非常高興地報告另一個創紀錄的業績時期。我們的季度營收達到 1.787 億美元，綜合調整後 EBITDA 達到 2,830 萬美元。我們的綜合 EBITDA 利潤率為 15.8%，比去年同期提高了 190 個基點。這一出色的業績得益於我們大多數業務線的強勁有機成長以及最近收購的正面影響。

During the third quarter. We were particularly encouraged by the progress of Matrix in Canada, which is set to achieve our targeted mid teen EBITDA margin, an impressive improvement from their 4.6% EBITDA margin prior to joining Montrose in June of 2023.

第三季期間。我們對 Matrix 在加拿大的進展感到特別鼓舞，該公司將實現我們的目標 EBITDA 利潤率中位數，比 2023 年 6 月加入 Montrose 之前 4.6% 的 EBITDA 利潤率有了顯著改善。

As is evident from our strong performance in Q3, we continue to benefit from healthy end market demand as clients prepare for and respond to environmental regulations on a host of topics ranging from PFOs methane leak detection and new air emissions standards.

從我們第三季的強勁表現可以明顯看出，隨著客戶準備並回應包括 PFO 甲烷洩漏檢測和新空氣排放標準等一系列主題的環境法規，我們繼續受益於健康的終端市場需求。

These tailwinds are further bolstered by growing public and private sector focus on environmental stewardship. Growing demand and industry tailwinds have supported the continued execution of our strategy and our cross selling initiatives which continue to drive our organic growth opportunities.

公共和私營部門對環境管理的日益關注進一步推動了這些有利因素。不斷增長的需求和行業順風支持了我們策略和交叉銷售計劃的持續執行，從而繼續推動我們的有機成長機會。

With this backdrop, we remain committed to our long term strategy which has been in place since our inception and has facilitated significant shareholder and stakeholder value creation. However, in the near term, our priority over the coming quarters will be the redemption of our Series A-2 preferred stock and subsequent deleveraging. We expect to fund this redemption via cash flow generation and incremental borrowing under our current credit facility. We do not intend to issue equity as a source of funds for the preferred redemption.

在此背景下，我們仍然致力於自成立以來一直實施的長期策略，並促進了重要股東和利害關係人的價值創造。然而，短期內，我們未來幾季的首要任務將是贖回我們的 A-2 系列優先股和隨後的去槓桿化。我們預計透過我們目前信貸額度下的現金流量產生和增量借款來為此次贖回提供資金。我們不打算發行股票作為優先贖回的資金來源。

Given this near term prioritization, our team will focus on organic growth opportunities and will temporarily deemphasized acquisitions. Though the pipeline and medium to long term acquisition opportunities remain very robust.

鑑於這項近期優先事項，我們的團隊將專注於有機成長機會，並暫時淡化收購。儘管管道和中長期收購機會仍然非常強勁。

We also confirm our annual target of converting 50 plus percent of consolidated adjusted EBIT into operating cash flow, which coupled with our low maintenance CapEx needs of approximately 1% of annual revenue generate attractive cash flow opportunities. And as a result enables us to invest in our business, our strategy, and our people.

我們也確認了將50% 以上的綜合調整後息稅前利潤轉化為營運現金流的年度目標，再加上我們約佔年收入1% 的低維護資本支出需求，產生了有吸引力的現金流機會。因此，我們能夠投資於我們的業務、我們的策略和我們的員工。

Regarding cash flow, we were pleased to report significant improvement in our operating cash flow conversion to 40% of consolidated adjusted EBITDA in our third quarter. We expect operating cash flow to increase materially in the fourth quarter of this year through continued working capital improvement.

關於現金流，我們很高興地報告說，第三季我們的營運現金流轉換率顯著提高，達到綜合調整後 EBITDA 的 40%。我們預計，透過持續改善營運資本，今年第四季營運現金流將大幅增加。

And finally, we are reiterating our full year 2024 guidance ranges for revenue of $690 million to $740 million and consolidated adjusted EBITDA of $95 million to $100 million. We continue to see strong organic growth across most business lines and positive contributions from acquisitions. Despite the delay earlier this year, in the promulgation of the US, EPAs PFAS rules. These regulatory delays temporarily shift the project start dates beyond the second half of 2024 within our treatment technologies business line.

最後，我們重申 2024 年全年營收指引範圍為 6.9 億美元至 7.4 億美元，綜合調整後 EBITDA 為 9,500 萬美元至 1 億美元。我們繼續看到大多數業務線的強勁有機成長以及收購帶來的積極貢獻。儘管今年早些時候有所延遲，美國 EPA 還是頒布了 PFAS 規則。這些監管延誤暫時將我們處理技術業務線內的專案啟動日期推遲到 2024 年下半年之後。

It is important to note that since the US EPA announced its drinking water PFAS rules in April 2024, our quarterly treatment technology revenue has increased each quarter. That positive trend continued with third quarter revenue growth over the second quarter.

值得注意的是，自美國環保署於2024年4月公佈飲用水PFAS規則以來，我們的季度處理技術收入每季都有所成長。第三季營收較第二季成長，這一正面趨勢得以延續。

As we have discussed on prior calls, Montrose benefits from PFAS opportunities across all of our segments, not just within treatment technology. PFAS related revenue in our laboratories is expected to increase approximately 30% in 2024 versus 2023. And PFAS related consulting services are expected to increase approximately 75% in 2024 compared to 2023.

正如我們在之前的電話會議中討論的那樣，Montrose 受益於我們所有細分市場的 PFAS 機會，而不僅僅是在處理技術領域。預計 2024 年我們實驗室的 PFAS 相關收入將比 2023 年增加約 30%。與 2023 年相比，PFAS 相關諮詢服務預計 2024 年將成長約 75%。

This growth has been driven by market expansion and our successful cross selling initiatives and we remain confident in solid growth in total PFAS related revenue in 2025. It is important to note that our segments are benefiting from multiple newly regulated and emerging contaminants, not just PFAS, so PFAS remains a significant near term opportunity for us.

這一成長是由市場擴張和我們成功的交叉銷售舉措推動的，我們對 2025 年 PFAS 相關總收入的穩健成長仍然充滿信心。值得注意的是，我們的細分市場受益於多種新監管和新興污染物，而不僅僅是 PFAS，因此 PFAS 對我們來說仍然是一個重要的近期機會。

Shifting now, I'd like to discuss a few recent key regulatory developments and some of the trends we are seeing in our business. As we discussed last quarter. We have seen very little impact to Montrose from the US Supreme Court's decision in Loper Bright which overruled the longstanding Chevron doctrine allowing federal agencies to interpret ambiguous federal statutory provisions. However, this complexity and resulting short term uncertainty from the from the Chevron decision drove increased demand for our advisory and consulting services. So our short and long term business outlook remains unchanged.

現在，我想討論一下最近的一些關鍵監管發展以及我們在業務中看到的一些趨勢。正如我們上季度討論的那樣。美國最高法院在 Loper Bright 案中的裁決推翻了長期存在的雪佛龍原則，允許聯邦機構解釋模稜兩可的聯邦法律條款，我們認為這對 Montrose 的影響很小。然而，這種複雜性以及雪佛龍決策帶來的短期不確定性推動了對我們諮詢和諮詢服務的需求增加。因此，我們的短期和長期業務前景保持不變。

Regarding the political landscape and the outcome of the US Presidential election, we remain confident in our ability to perform per plan. As we've demonstrated historically, we grew rapidly during the Obama, Trump and Biden administrations as our business model is designed to be resilient and largely insulated from the political swings at the federal level. We expect this trend to hold true going forward given our limited exposure to any one end market and the higher relative influence of state and local environmental regulations on our customer activity.

對於政治格局和美國總統選舉的結果，我們對執行計劃的能力仍然充滿信心。正如我們歷史上所證明的那樣，我們在奧巴馬、川普和拜登政府期間發展迅速，因為我們的商業模式旨在具有彈性，並且在很大程度上不受聯邦一級政治波動的影響。鑑於我們對任何一個終端市場的敞口有限，以及州和地方環境法規對我們客戶活動的相對影響較大，我們預計這一趨勢將持續下去。

In addition, the approximately 20% of our business in Canada, Australia and Europe continues to perform in aggregate and in each geography, very well. Overall, the fundamental drivers of demand for our environmental solutions remain strong and the relative strategic advantages offered by our business model and our technology portfolio continue to prove out. As one example, our recent selection by the US Army Corps of Engineers for our participation in a major environmental contract, validated our approach and positions us well within the growing US federal sector.

此外，我們在加拿大、澳洲和歐洲約 20% 的業務在每個地區的整體表現仍然非常出色。總體而言，我們的環境解決方案需求的基本驅動因素仍然強勁，我們的業務模式和技術組合提供的相對策略優勢繼續得到證明。舉個例子，美國陸軍工程兵團最近選擇我們參與一項重大環境合同，這驗證了我們的方法，並使我們在不斷發展的美國聯邦部門中處於有利地位。

In summary, I'm extremely proud of our team's exceptional performance this quarter, delivering record revenue and profitability. While advancing our strategic priorities. In the near term, we look forward to delivering on our core organic growth opportunities and allowing our cash flow generation capabilities to shine as we focus on the redemption of the Series A-2 preferred instrument and we de-emphasize acquisitions.

總而言之，我對我們團隊本季的出色表現感到非常自豪，實現了創紀錄的收入和獲利能力。同時推進我們的策略重點。短期內，我們期待提供我們的核心有機成長機會，並讓我們的現金流生成能力大放異彩，因為我們專注於 A-2 系列首選工具的贖回並不再強調收購。

As we look to 2025 and beyond, we remain very optimistic about our ability to drive shareholder value with our proven and consistent long term strategic thesis which remains unchanged. With that I will hand it over to Allan. Thank you.

展望 2025 年及以後，我們對我們透過有效且一致的長期策略論點（保持不變）推動股東價值的能力仍然非常樂觀。這樣我就把它交給艾倫了。謝謝。

Thanks Vijay. We were pleased to deliver another quarter of strong financial performance as we continue to execute our growth strategy. Our solid results during the third quarter were driven by organic momentum from cross selling activity and expanding customer relationships and the positive contributions of acquisitions. Our focus on higher margin services and operational efficiency continues to benefit our business reflected in a notable improvement in our overall profitability to record levels.

謝謝維傑。隨著我們繼續執行我們的成長策略，我們很高興再次實現強勁的財務表現。我們第三季的穩健業績得益於交叉銷售活動和擴大客戶關係的有機動力以及收購的積極貢獻。我們對更高利潤的服務和營運效率的關注繼續使我們的業務受益，這體現在我們的整體盈利能力顯著提高至創紀錄的水平。

Moving to our revenue performance. Our third quarter revenue increased to a record $178.7 million or a 6.4% increase compared to the prior year quarter. Revenue for the first nine months of $507.4 million was a 10.7% increase versus the prior year period.

轉向我們的收入表現。我們第三季的營收增至創紀錄的 1.787 億美元，與去年同期相比成長 6.4%。前 9 個月的營收為 5.074 億美元，比去年同期成長 10.7%。

The primary drivers of growth in the third quarter were strong organic growth in our assessment ping in response and measurement and analysis segments as well as positive contributions from acquisitions partially offset by lower environmental emergency response revenue.

第三季成長的主要驅動力是我們在響應、測量和分析領域的評估 ping 的強勁有機成長，以及收購帶來的積極貢獻，但部分被環境緊急應變收入下降所抵消。

The drivers of revenue growth in the first nine months with solid organic growth of 7% compared to the prior year-to-date period and the positive contributions from acquisitions partially offset by lower environmental emergency response and treatment technology revenues.

前九個月收入成長的驅動因素是，與去年同期相比，有機成長達到 7%，收購帶來的正面貢獻被環境緊急應變和處理技術收入的下降部分抵消。

Our consolidated adjusted EBITDA performance in the third quarter reached a record $28.3 million or 15.8% of revenue. This compares favorably to consolidated adjusted EBITA of $23.3 million or 13.9% of revenue in the prior year quarter.

第三季我們的綜合調整後 EBITDA 業績達到創紀錄的 2,830 萬美元，佔營收的 15.8%。相較之下，綜合調整後 EBITA 為 2,330 萬美元，佔去年同期營收的 13.9%。

The significant increase in quarterly profitability, despite a substantial reduction in high margin, emergency response activity was driven by organic growth. The impact of acquisitions and lower corporate expenses which is partially timing related.

儘管高利潤率大幅下降，但緊急應變活動的有機成長推動了季度獲利能力的大幅成長。收購和降低公司開支的影響部分與時間有關。

First nine months, 2024 consolidated adjusted EBITA was $68.5 million or 13.5% of revenue compared to consolidated adjusted EBITA of $61.1 million or 13.3% of revenue. Diluted adjusted net income per share of $0.41 in the third quarter of 2024 increased from $0.31 in the prior year quarter.

2024 年前 9 個月，綜合調整後 EBITA 為 6,850 萬美元，佔營收的 13.5%，而綜合調整後 EBITA 為 6,110 萬美元，佔營收的 13.3%。2024 年第三季稀釋調整後每股淨利為 0.41 美元，高於去年同期的 0.31 美元。

Year-to-date, polluted adjusted net income per share of $0.80 increased compared to $0.78 in the prior year period. The improvement in both periods was mainly driven by improved loss from operations and lower dividends following the partial redemption of our Series A-2 preferred stock earlier this year are offset by higher interest expense and higher average checkout.

年初至今，污染調整後每股淨利為 0.80 美元，較上年同期的 0.78 美元增加。這兩個時期的改善主要是由於今年早些時候部分贖回我們的 A-2 系列優先股後營運虧損的改善和股息的減少，但利息費用和平均結帳率的增加抵消了這一影響。

Please note our adjusted net income per diluted share attributable to common stockholders is calculated using adjusted net income attributable to stockholders divided by fully diluted shares. We believe this net income methodology is the most helpful net income metric to Montrose and to common equity investors.

請注意，我們調整後的歸屬於普通股股東的稀釋每股淨利是用調整後歸屬於股東的淨利除以完全稀釋股份計算得出的。我們相信這種淨利潤方法對於 Montrose 和普通股投資者來說是最有幫助的淨利潤指標。

I will now discuss our third quarter performance by segment. In our assessment permitting and response segment, third quarter revenue was $52 million compared to $57 million in the prior year quarter. [APNS] segment adjusted EBITA was $11.2 million or 21.5% of revenue compared to 26.1% in the prior year.

我現在將按部門討論我們第三季的業績。在我們的評估許可和回應部門，第三季收入為 5,200 萬美元，而去年同期收入為 5,700 萬美元。 [APNS] 部門調整後 EBITA 為 1,120 萬美元，佔營收的 21.5%，而前一年為 26.1%。

Results during the third quarter reflect a $12.8 million reduction in high margin environmental emergency response revenue partially offset by strong organic growth in the rest of the segment and the positive impact of the spirit acquisition. Given this segment includes our environmental emergency response business associated revenue does not follow a regular quarterly or seasonal pattern.

第三季的業績反映了高利潤環境緊急應變收入減少了 1,280 萬美元，部分被該部門其他部門的強勁有機成長和烈酒收購的正面影響所抵消。鑑於該部門包括我們的環境緊急應變業務，相關收入不遵循常規的季度或季節性模式。

In our measurement and analysis segment revenues for the quarter increased 16.1% to $58.6 million. We continue to experience strong organic revenue growth particularly in our lab and field services businesses as well as the positive contribution from our acquisition of audience.

在我們的測量和分析部門，本季的營收成長了 16.1%，達到 5,860 萬美元。我們繼續經歷強勁的有機收入成長，特別是在我們的實驗室和現場服務業務方面，以及我們吸引觀眾的積極貢獻。

M&A segment adjusted EBITDA increased 29.2% to $13.4 million or 22.8% of revenue, a 230 basis points improvement over the prior year quarter due to revenue growth and operating leverage. In our remediation and reuse segment, third quarter revenue increased 12.6% to $68.1 million benefiting from acquisitions and solid organic growth in our remediation services which more than offset the decline in our treatment technology revenue due to the temporary customer project delays that Vijay discussed earlier.

併購部門調整後的 EBITDA 成長 29.2%，達到 1,340 萬美元，佔營收的 22.8%，由於營收成長和營運槓桿，比去年同期提高 230 個基點。在我們的修復和再利用部門，第三季營收成長了12.6%，達到6,810 萬美元，這得益於我們的修復服務的收購和穩健的有機成長，這足以抵消Vijay 之前討論的客戶專案臨時延誤導致的處理技術收入下降。

This segment's adjusted EBITA and margin benefited from the impact of acquisitions and higher organic revenues in our remediation services resulting in a 480 basis points margin improvement to 17.1% in the quarter.

該部門調整後的 EBITA 和利潤率受益於收購的影響以及我們補救服務中有機收入的增加，導致本季度利潤率提高了 480 個基點，達到 17.1%。

Moving to our cash flow and capital structure. The other day, cash flow used in operating activities was $9.7 million compared to cash generated of $41.5 million in the prior year. Lower cash flow from operations was driven primarily by the previously discussed invoicing delays associated with the integration of matrix and delays in payment on a single large US government funded project. The invoicing delay of matrix are substantially addressed and collections are returning to a normal cadence.

轉向我們的現金流和資本結構。前幾天，經營活動使用的現金流量為 970 萬美元，而前一年產生的現金為 4,150 萬美元。營運現金流減少主要是由於先前討論的與矩陣整合相關的發票延遲以及美國政府資助的單一大型專案的付款延遲。矩陣的開立發票延遲已基本解決，收款正在恢復正常節奏。

We have received payment confirmations from key clients which includes the US government. Excluding these two temporary and isolated issues, day sales outstanding as of September 30, 2024, were unchanged versus September 30, 2023, and [DSOs] at the end of 2024 are expected to be in line with DSOs at the end of 2023. Cash flow from operating activities is expected to improve significantly in the fourth quarter, mainly attributable to this working capital improvement.

我們已收到包括美國政府在內的主要客戶的付款確認。排除這兩個臨時和孤立的問題，截至 2024 年 9 月 30 日的日銷售額與 2023 年 9 月 30 日相比沒有變化，並且 2024 年底的 [DSO] 預計將與 2023 年底的 DSO 保持一致。預計第四季度經營活動現金流將顯著改善，這主要歸功於營運資金的改善。

At the end of the quarter, we had $139.8 million of liquidity including $13 million of cash on hand and $126.7 million of availability on our credit facility. Our leverage ratio as of September 30, 2024, was 2.6 times which includes the impact of the acquisitions of spirit and origins and is well within our preferred level of below three times.

截至本季末，我們擁有 1.398 億美元的流動資金，其中包括 1,300 萬美元的庫存現金和 1.267 億美元的可用信貸額度。截至 2024 年 9 月 30 日，我們的槓桿率為 2.6 倍，其中包括收購烈酒和原產地的影響，完全在我們低於三倍的首選水平之內。

Our balance sheet simplification will continue to be a near term priority of our capital allocation strategy. Historically, our capital deployment has been focused on accretive acquisitions and investments to drive organic growth. While acquisitions remain a key part of our long term capital allocation. We are evolving our near term capital allocation priorities to focus on balance sheet simplification particularly as it relates to the redemption of our Series A-2 preferred stock while maintaining a focus on organic growth. As of September 30, 2024, we had $122 million of Series A-2 outstanding with repayments in cash at our election.

我們的資產負債表簡化將繼續成為我們資本配置策略的近期優先事項。從歷史上看，我們的資本部署一直專注於增值收購和投資，以推動有機成長。雖然收購仍然是我們長期資本配置的關鍵部分。我們正在製定近期資本配置優先事項，以重點關注資產負債表簡化，特別是因為它與 A-2 系列優先股的贖回有關，同時保持對有機成長的關注。截至 2024 年 9 月 30 日，我們有 1.22 億美元的 A-2 輪未償還資金，並在我們選舉時以現金償還。

Moving to our reiterated full year outlook. Based on our performance through the first nine months and our visibility into the fourth quarter, we are reaffirming our full year. 2024 guidance ranges. For the full year, we expect revenues of $690 million to $740 million and consolidated adjusted EBITDA of $95 million to $100 million.

轉向我們重申的全年展望。根據我們前九個月的表現和對第四季度的展望，我們重申全年的業績。 2024 年指導範圍。我們預計全年營收為 6.9 億至 7.4 億美元，調整後綜合 EBITDA 為 9,500 萬至 1 億美元。

We continue to expect environmental emergency response revenue to be in the range of $50 million to $70 million this fiscal year. As we evaluate the final quarter of 2024 and compare it with the prior Q4 period, revenue is expected to increase 10% to 15% and consolidated adjusted EBITA margin is expected to increase 350 basis points to 400 basis points. Our expectation of ongoing margin improvement reflects meaningfully enhanced profitability and demonstrates the alignment of our strategic and financial goals.

我們仍預期本財年環境緊急應變收入將在 5,000 萬至 7,000 萬美元之間。當我們評估 2024 年最後一個季度並將其與上一季進行比較時，營收預計將成長 10% 至 15%，綜合調整後 EBITA 利潤率預計將成長 350 個基點至 400 個基點。我們對利潤率持續改善的預期反映了獲利能力的顯著提高，並表明了我們的策略和財務目標的一致性。

Overall, our reiterated outlook reflects the service offering and geographic diversification of our revenue. Strength of our business year-to-date and the continued benefits from our margin expansion initiatives despite the temporary timing shifts in certain project work. We remain confident in our ability to execute through the remainder of the year and continue building momentum into 2025, given the increasing demand for our services.

總體而言，我們重申的前景反映了我們的服務提供和收入的地域多元化。儘管某些專案工作的時間安排暫時發生變化，但我們今年迄今為止的業務實力以及我們的利潤擴張計劃的持續收益。鑑於對我們服務的需求不斷增加，我們對今年剩餘時間的執行能力充滿信心，並在 2025 年繼續保持勢頭。

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 lines to question.

感謝大家今天加入我們並感謝您對 Montrose 的持續關注。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，我們已準備好開通提問線路。

(Operator Instructions)

（操作員說明）

Tim Mulrooney, William Blair.

提姆·馬爾魯尼，威廉·布萊爾。

Vijay, Allan, Good morning. Good, well, thank you. You actually addressed a lot of the questions I had in the chamber. For the call today, you actually addressed a lot of them in your prepared remarks. So I'm actually going to move to a couple -- just more targeted questions. The first one is just on the, the Trump election win. I was wondering if you could, you know which of your businesses did well under his prior administration, if you could highlight some of those and what business lines would you expect to continue to perform well and thrive in this type of environment.

維傑，艾倫，早安。好的，好的，謝謝。你實際上解決了我在會議廳提出的許多問題。在今天的電話會議中，您實際上在準備好的發言中談到了其中的許多內容。所以我實際上要轉向幾個更有針對性的問題。第一個是關於川普當選的。我想知道您是否知道您的哪些業務在他之前的管理下表現良好，您是否可以強調其中一些業務以及您希望哪些業務線在這種環境中繼續表現良好並蓬勃發展。

Tim, why don't I start with that? And Allan, you can certainly jump in. And just as a quick reminder, we've been through our prior Trump administration before, as you alluded to Tim and we doubled in size and we went public during the Trump administration. So our business is by definition designed to go through grow and go through these political cycles.

提姆，我為什麼不從這個開始呢？艾倫，你當然可以加入。順便提醒一下，我們之前也經歷過川普政府，正如你提到的提姆，我們的規模擴大了一倍，並在川普政府期間上市。因此，根據定義，我們的業務旨在經歷成長並經歷這些政治週期。

And as it relates to our revenue mix, we have where we saw a significant uptick in demand was in our consulting and our treatment side of our business last time, Tim. And some modulation on the testing side. And the reason for that is that the Trump EPA de-emphasized new regulations and de-emphasized certain forms of enforcement.

由於它與我們的收入組合相關，我們看到上次業務的諮詢和治療方面的需求顯著上升，蒂姆。以及測試方面的一些調製。原因是川普環保署不再強調新法規，也不再強調某些形式的執法。

And as a result, as we kind of look across our business mix, we are feeling quite optimistic about the opportunity to continue our organic growth cadence that we've kind of talked about with you in the past and our outlook is largely unchanged.

因此，當我們審視我們的業務組合時，我們對繼續我們過去與您討論過的有機成長節奏的機會感到非常樂觀，我們的前景基本上沒有改變。

The other dynamic that I think is important that is different from where we were in the prior Trump administration, is that approximately 20% of our revenue is now ex US. And as we think about Canada Europe and Australia, we're seeing exceptional performance across all of those geographies. And we certainly don't expect that to change all that much either. So we're feeling quite upbeat Tim and I don't know if that answers all of your questions.

我認為與上屆川普政府不同的另一個重要動態是，我們現在大約 20% 的收入來自美國以外的地區。當我們考慮加拿大、歐洲和澳洲時，我們看到所有這些地區都表現出色。我們當然也不希望這種情況有太大變化。所以提姆，我們感覺非常樂觀，我不知道這是否能回答你所有的問題。

No, it did answer my question. Thank you, Vijay. Another one I wanted to ask about was in your AK, I noticed in your AK that the COO, Joshua LeMaire is leaving the organization. I was just curious if you could share any more details about that decision and how that kind of impacts your organization?

不，它確實回答了我的問題。謝謝你，維傑。我想問的另一個問題是關於您的 AK，我在您的 AK 中註意到首席營運官 Joshua LeMaire 即將離開該組織。我只是好奇您是否可以分享有關該決定的更多細節以及這對您的組織有何影響？

Yeah. No, Josh is still part of the organization. He's a friend and an exceptional colleague. For personal reasons, he's going to be stepping down from the COO role, but he's going to stay with us help us transition with new leader, both selecting and onboarding the new leader Tim. And we're likely going to focus on someone with a deep bench of industry experience.

是的。不，喬許仍然是該組織的一員。他是一位朋友，也是一位出色的同事。出於個人原因，他將辭去營運長一職，但他將留在我們身邊，幫助我們與新領導者進行過渡，包括選擇和任命新領導者蒂姆。我們可能會關注具有豐富行業經驗的人。

But he's still part of Montrose. He was a core part of the founding team. And he's going to be working closely with me and Allan and the rest of the team going forward. So we're we're actually really thankful for everything Josh has done. And we're excited to kind of see what his next chapter looks like for him.

但他仍然是蒙特羅斯的一部分。他是創始團隊的核心成員。今後他將與我、艾倫以及團隊其他成員密切合作。所以我們實際上非常感謝喬許所做的一切。我們很高興看到他的下一章會是什麼樣子。

Got it. Okay. Thank you for the color on that. That's helpful. Just one more for me. I know you're pausing acquisitions but would just love to hear how some of these recent ones are going. Could you comment on origins and spirit in a little more detail? How are those going? Thank you, Vijay.

知道了。好的。謝謝你的顏色。這很有幫助。只給我一個。我知道您正在暫停收購，但很想聽聽最近的一些收購進展如何。您能更詳細地評論一下起源和精神嗎？那些進展如何？謝謝你，維傑。

Yeah, both are actually going very well. Origins is a lab that really focuses in on Colorado and the Mountain States, Tim and the recent regulatory regime in those states has created a really nice set of tailwinds for that business. And it is performing exceptionally well. The team is excellent and integration is going well. And what's been really encouraging for us is that some of our cross selling of our clients into their business is progressing really nicely. So we're really pleased with that.

是的，兩者實際上都進展順利。Origins 是一家真正專注於科羅拉多州和山區各州的實驗室，蒂姆和這些州最近的監管制度為該業務創造了一系列非常好的順風車。而且它的表現非常出色。團隊非常優秀，整合進展順利。對我們來說真正令人鼓舞的是，我們對客戶的一些交叉銷售進展非常順利。所以我們對此非常滿意。

And then the same goes for spirit. They've been very additive as an air permitting powerhouse with an exceptional team. They've really been additive to our broader consulting and testing footprint and have already really hit stride with working across our service lines and our clients.

精神也是如此。作為擁有一支出色團隊的空氣許可強國，他們的表現非常出色。它們確實為我們更廣泛的諮詢和測試足跡做出了貢獻，並且在我們的服務線和客戶方面的工作已經取得了真正的進步。

And so I couldn't be more pleased with both of those. And even with some of the earlier transactions, Tim, like Epic and two [dot], they are going incredibly well as well. So we're kind of -- as we look across our portfolio of acquisitions from this year, notwithstanding some of the things we talked about earlier, which are normal as you integrate acquisitions, we're really happy. And all of those transactions and aggregates have been really accretive to our growth profile to our margin profile. And we think we'll stay that way long term.

所以我對這兩件事都非常滿意。即使有一些早期的交易，Tim，例如 Epic 和兩個 [dot]，它們也進展得非常順利。因此，當我們審視今年以來的收購組合時，儘管我們之前討論過一些事情，這些事情在整合收購時很正常，但我們真的很高興。所有這些交易和總量確實促進了我們的成長狀況和利潤狀況。我們認為我們將長期保持這種狀態。

Helpful color. Thank you, Vijay

有用的顏色。謝謝你，維傑

Durgesh Chopra, Evercore ISI.

杜爾格甚喬普拉 (Durgesh Chopra)，Evercore ISI。

Hey, team. Good morning. Thanks for giving me time.

嘿，團隊。早安.謝謝你給我時間。

Hey, Durgesh. How are you?

嘿，杜爾吉什。你好嗎？

Hey Vijay, good morning, Hey, just on this, deemphasizing acquisitions, and new equity. Can you just kind of help us with time? Like is this for a -- what time period is that over? Is what where I'm trying to go with? This is this first half of 2025, no equity, all of 2025. I get to the 2026. How should we think about that?

嘿維傑，早安，嘿，就這一點，不再強調收購和新股權。你能幫我們安排時間嗎？就像這樣──那是在什麼時段結束的？這就是我想要去的地方嗎？這是2025年上半年，沒有股權，2025年全年。我到了2026年。我們該如何思考這個問題？

Yeah, Durgesh, we're going to be deemphasizing acquisitions and really focusing on the redemption of the Oaktree prep and on organic growth. We're excited to kind of demonstrate the kind of the engine that drives our organic growth profile and our cash flow profile. We're in aggregate just to kind of step back, our thesis is unchanged. So there is still a very robust pipeline of a creative transactions that we think will be very additive long term. And so we're going to let the business over the next couple of quarters demonstrate the power of the organic engine and allow us to repay the press.

是的，Durgesh，我們將不再強調收購，而是真正關注橡樹準備的救贖和有機成長。我們很高興能夠展示推動我們有機成長狀況和現金流狀況的引擎。我們總的來說只是退一步，我們的論點沒有改變。因此，仍然有一個非常強大的創意交易管道，我們認為從長遠來看，這些交易將非常具有附加性。因此，我們將讓業務在接下來的幾季展示有機引擎的力量，並讓我們回報媒體。

And then we're going to try to, we're, we're going to target kind of that 3-ish times leverage, right? For select transactions, we may pop up above 3 to 3.5. And we're kind of, well, in the twos right now. And so we're going to keep it to kind of those parameters, Durgesh. It's a little tough to predict exactly what deal flow looks like, but our intent over the next couple of quarters is to de-emphasize the acquisitions and as it relates to the equity issuance and this and our specific focus on repaying the prep. We do not intend to issue any equity to repay that.

然後我們將嘗試以 3 倍左右的槓桿為目標，對嗎？對於選定的交易，我們可能會彈出 3 到 3.5 以上。我們現在就好像是兩兩。所以我們將保持這些參數，Durgesh。準確預測交易流程有點困難，但我們在接下來的幾個季度的意圖是不再強調收購，因為它與股票發行有關，而這以及我們對償還準備金的具體關注。我們不打算發行任何股權來償還債務。

Got it now.

現在明白了。

And I don't know if there's anything else you would add as it relates to the balance sheet?

我不知道您是否還有其他與資產負債表相關的內容需要補充？

No, that's exactly right. We've got certainly the leverage capacity and the financing capacity to take out the prep. The next 60 is due in April anyway. So you'll see us take that out before that and then the final [62 million], likely shortly after that again, depending on how the year is progressing. But that would be our expectation.

不，完全正確。我們當然有足夠的槓桿能力和融資能力來準備。無論如何，下一個 60 是在四月到期的。因此，您會看到我們在此之前將其刪除，然後是最終的[6200萬]，可能不久之後再次刪除，具體取決於今年的進展情況。但這是我們的期望。

That's helpful guys. But just to be clear, you're not saying no acquisitions, all you're saying is you're probably, kind of manage within that leverage metrics, there will -- there could be still more acquisitions, but you're not tapping the equity market. Is that fair?

這對大家很有幫助。但要澄清的是，你並不是說不進行收購，你所說的只是你可能在槓桿指標內進行管理，可能還會有更多收購，但你並沒有利用股票市場。這樣公平嗎？

That's the broad thesis Durgesh. And just to be clear for the immediate future, we will likely not transact but it doesn't mean we never will. And going back to my earlier point, a core part of our strategy is to consolidate select parts of this market, given our business model and use that consolidation to drive accelerated organic growth and that thesis is unchanged. It's just where our focus is going to be through Q4, Q1 and Q2.

這就是杜爾吉什的廣泛論點。需要明確的是，在不久的將來，我們可能不會進行交易，但這並不意味著我們永遠不會。回到我之前的觀點，我們策略的核心部分是根據我們的業務模式整合這個市場的選定部分，並利用這種整合來推動加速的有機成長，這一論點沒有改變。這正是我們第四季、第一季和第二季的重點。

Okay, perfect. Thank you. I appreciate the time.

好的，完美。謝謝。我很感激時間。

Thanks, Durgesh.

謝謝，杜爾吉什。

(Operator Instructions)

（操作員說明）

Jim Ricchiuti, Needham & Company.

吉姆‧里奇烏蒂 (Jim Ricchiuti)，李約瑟公司。

Hi, good morning.

嗨，早安。

Hey Jim.

嘿吉姆。

Vijay, just a question on the decision regarding M&A, I'm just wondering, is there any risk that this decision, potentially could represent lost opportunities for you guys.

Vijay，只是關於併購決定的問題，我只是想知道，這個決定是否存在可能代表你們失去機會的風險。

No, Jim, we're staying very close to our core target opportunities. And at this time, there is absolutely no risk to us losing anything that we really want.

不，吉姆，我們非常接近我們的核心目標機會。此時，我們絕對沒有失去任何我們真正想要的東西的風險。

Okay. And look, I know that this decision was obviously something that preceded the election. But, I'm also wondering, does this perhaps reinforce the decision on M&A leveraging. Just in -- until there's more clarity on how the regulatory environment might evolve if there's any change at all? And it doesn't sound like you think there is, but it's, do you feel more comfortable with this decision now?

好的。看，我知道這個決定顯然是在選舉之前做出的。但是，我也想知道，這是否可能強化併購槓桿的決定。就在——如果有任何變化的話，監管環境可能會如何演變？聽起來你不認為有，但你現在對這個決定感覺更舒服嗎？

I mean, we're certainly in a -- we want to see how the new Trump administration and President Trump and his EPA progress, Jim and when we want to see kind of what the state decisions are. We don't expect honestly with what we currently do much to change. And we know folks that were in the prior Trump administration that are involved with a lot of the planning processes now.

我的意思是，吉姆，我們當然想看看新的川普政府、川普總統和他的環保署取得了怎樣的進展，我們想看看國家的決定是什麼。老實說，我們並不期望目前所做的事情能帶來太大改變。我們知道川普政府的前成員現在參與了許多規劃過程。

So we don't expect much to change, but yes, I think the focus on driving organic and harvesting what we already have in hand while we wait to see what the next couple of months look like. We made the decision independent of that, but we certainly think it's going to be very additive given the current circumstances.

因此，我們預計不會有太大變化，但是，是的，我認為重點是推動有機發展並收穫我們已經掌握的東西，同時我們等待著看看接下來幾個月會是什麼樣子。我們所做的決定與此無關，但考慮到目前的情況，我們當然認為這將是非常附加的。

Got it. And just final question from me, I'm wondering how we should be thinking about this, your selection by the Army Corps of Engineers. Are there -- regarding that announcement, are there any expected milestone awards that you're tracking that are in the line of sight for the next year or two? I'm just wondering how we should think about the announcement. Thank you.

知道了。我的最後一個問題是，我想知道我們應該如何考慮陸軍工程兵團對你的選擇。關於該公告，您正在追蹤的未來一兩年內是否有任何預期的里程碑獎項？我只是想知道我們應該如何看待這個公告。謝謝。

Yeah, it was great because it kind of validated Jim as we've talked about with you in the public sector, our strategic thesis and it enabled us to kind of leverage both our advisory testing capabilities and our engineering and remediation capabilities.

是的，這很棒，因為它在某種程度上驗證了吉姆，正如我們在公共部門與您討論的那樣，我們的策略論文使我們能夠利用我們的諮詢測試能力以及我們的工程和補救能力。

And so yes, there will be milestones as that contract process progresses and we'll certainly keep all of you abreast of that. And obviously, that's not the only one. There's others that we're quite optimistic about. So we'll stay close to you as that progresses. I think the only point of highlighting that is that the broader opportunity set is incredibly strong and our relative advantage to harvest that broader opportunity set, which is expanded also seems to be manifesting really nicely. So we'll stay very close to you as those awards start to come to fruition and translate into revenue.

所以，是的，隨著合約流程的進展，將會出現里程碑，我們一定會讓你們所有人了解最新情況。顯然，這不是唯一的一個。還有其他一些我們非常樂觀的。因此，隨著進展，我們將與您保持密切聯繫。我認為唯一需要強調的是，更廣泛的機會集非常強大，而且我們在收穫更廣泛的機會集方面的相對優勢似乎也得到了很好的體現。因此，當這些獎項開始開花結果並轉化為收入時，我們將與您保持密切聯繫。

Got it. Thank you.

知道了。謝謝。

Aadit Shrestha, Stifel,.

阿迪特‧施雷斯塔 (Aadit Shrestha)，史蒂菲爾 (Stifel)。

Hi, Aadit.

嗨，阿迪特。

Hi Good morning. Thanks for taking my questions. Just going to sort of the outlook for four Q24. I think you talked about revenue growth being 10% to 15%. Could you just elaborate about how much of that is from acquisitions and emergency response? I think your guidance kind of improves s likely up 20% plus so for a strong quarter and then acquisitions looks like it at around 9% in 3Q, '24. Does this temper down slightly in four Q?

嗨早安。感謝您回答我的問題。只是對 24 年第四季的前景進行排序。我想你談到了營收成長 10% 到 15%。您能否詳細說明其中有多少來自收購和緊急應變？我認為你的指導有所改善，可能會成長 20% 以上，因此季度表現強勁，然後收購看起來在 24 年第三季約為 9%。這在四Q中脾氣會稍微緩和一些嗎？

Yeah, let me speak about kind of 4Q in the year a little bit more broadly a bit because I want to make sure we're kind of keeping in line with all of the publicly disclosed information. Most of our business lines are seeing double digit organic growth, which we're really excited about and the two variables that are swinging Q4 in the numbers you just referenced are one the temporary delays in some of the treatment technology projects and two the relative magnitude of the response business.

是的，讓我更廣泛地談談今年第四季的情況，因為我想確保我們與所有公開披露的資訊保持一致。我們的大多數業務線都實現了兩位數的有機增長，我們對此感到非常興奮，並且您剛才提到的數字中第四季度波動的兩個變量是，一是一些處理技術項目的暫時延遲，二是相對規模的響應業務。

And so despite those two, right, the response is we kind of think about year on year as Allan alluded to in his comments are down the core organic plus, the impact of acquisitions is driving some of our optimism into Q4 and 2024. And so that's the reason we're maintaining our guidance.

因此，儘管有這兩點，對吧，我們的反應是，正如艾倫在評論中提到的那樣，我們會逐年考慮核心有機因素，收購的影響正在推動我們對第四季度和2024 年的一些樂觀情緒。這就是我們維持指導的原因。

On the response side, specifically, the team has done an exceptional job this year. We're still expecting that to be in the $50 million to $70 million range. It was a little lighter in Q3. We expect given the hurricane and recent events that it may be on the higher end of that [$50 million] to [$70 million] in Q4, but it's very tough to predict as you know. And so that's the one reason for that range that you saw in the public comments that Allan provided. Does that, does that make sense, Aadit?

具體來說，在響應方面，該團隊今年的工作非常出色。我們仍然預計該金額將在 5,000 萬至 7,000 萬美元之間。第三季的情況稍微輕一些。考慮到颶風和最近發生的事件，我們預計第四季度的銷售額可能會達到 [5000 萬美元] 至 [7000 萬美元] 的較高水平，但如您所知，很難預測。這就是您在艾倫提供的公開評論中看到的這一範圍的原因之一。這樣有道理嗎，Aadit？

Yeah, thanks a lot. And maybe if you could just elaborate on matrix margins, how did that perform in 3Q '24? I know you discussed, you remain on track of attaining mid-teens margin. Do you actually see --

是的，非常感謝。也許如果您可以詳細說明矩陣邊距，那麼它在 24 年第三季的表現如何？我知道你討論過，你仍然有望達到十幾歲左右的利潤率。你真的看到了嗎--

Yeah, they ran at mid teams margins. It's a really solid Q3 performance year over year. They are expected to have tripled their margins from the time of acquisition, that team is performing exceptionally. And all of the initiatives to drive that margin, which is pricing operational excellence if you will and then the cost savings through the integration activities are all going to plan and that is resulting in us being exactly where we would have hoped at this time.

是的，他們處於球隊中游邊緣。與去年同期相比，第三季的表現非常強勁。預計他們的利潤將比收購時增加兩倍，該團隊的表現非常出色。所有提高利潤率的舉措，即為卓越營運定價（如果願意的話）以及透過整合活動節省成本都將得到規劃，這將導致我們此時達到我們所希望的水平。

And then just as a follow up, are you seeing a strong organic growth within matrix too?

作為後續行動，您是否也看到矩陣內部出現了強勁的有機成長？

We are seeing really solid organic. We had expected that with the pricing that was taken that we would not see much growth that there would be some volume attrition. We have not seen that and created again to the metric team. So they're seeing really nice organic growth for them and not all of that counts in our organic growth, right? Because the first five months was still considered acquisition growth. But certainly in the back half of the year, they're seeing really nice organic growth.

我們看到的是真正堅實的有機物。我們預計，按照所採取的定價，我們不會看到太多成長，從而會出現一些銷售損耗。我們還沒有看到這一點，並再次向公制團隊創建。所以他們看到了非常好的有機成長，但並不是所有這些都計入我們的有機成長，對吧？因為前五個月仍被視為收購成長。但可以肯定的是，在今年下半年，他們看到了非常好的有機成長。

All right, thanks a lot.

好的，非常感謝。

Thanks, Aadit.

謝謝，阿迪特。

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

謝謝。我們的問答環節到此結束。現在我想將會議轉回執行長 Vijay Manthripragada 發表閉幕詞。

Thank you, and thank you all for taking the time this morning. We really appreciate your continued support. Allan and I, and the Montrose team are really excited about the year, the quarter, and our outlook into 2025. And so we certainly look forward to sharing more with you in the very near future. Thank you and take care.

謝謝大家，也謝謝大家今天早上抽出寶貴的時間。我們非常感謝您持續的支持。我和艾倫以及 Montrose 團隊對今年、本季以及我們對 2025 年的展望感到非常興奮。因此，我們當然期待在不久的將來與您分享更多內容。謝謝你，保重。

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

謝謝。會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。