Onterris, Inc. · NYSE:ONT
Onterris — Montrose Environmental Group — Q2 2020 Earnings Presentation
20 slides from Onterris's earnings presentation, Aug 31, 2020
Slide 1: Introduction to Montrose Environmental Second Quarter 2020 Earnings Call
Introduction to Montrose Environmental & Second Quarter 2020 Earnings Call August 31, 2020
Slide 2: Safe Harbor
Safe Harbor Statements contained herein and in the accompanying oral presentation contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may be iden
Slide 3: Business Overview
Business Overview
Slide 4: Montrose Environmental at a Glance
Montrose Environmental at a Glance • High growth environmental solutions company with a Treating water contaminated with unique focus on ESG Per- and polyfluoroalkyl substances (PFAS) • Completed IPO in July 2020 Managing air Removing quality through the contaminants analysis of air and from soil, s
Slide 5: Key Drivers for Environmental Services Industry
Key Drivers for Environmental Services Industry Regulatory & Compliance Infrastructure Global Public Demands • For decades, federal and local • Increase in local industrial activity, • Heightened public awareness and regulators globally have complexity and impact increasing stakeholder demand for im
Slide 6: Strong Record of Profitable Growth Continued into 2020
Strong Record of Profitable Growth Continued into 2020 Multiple Levers to Drive Growth Continued market share Revenue Adjusted EBITDA(1) Organic gains through cross-selling ($ in millions, Dec FYE) $38 $260 opportunities Growth 16A – Q2 2020 $234 16A – Q2 2020 $31 High-single digit average LTM C
Slide 7: Resiliency of Our Business Model
Resiliency of Our Business Model Resiliency through Political Cycles and Resiliency through Economic Disruption Regulatory Frameworks • Not dependent on any singular political • Environmental services are required and approach or regulatory framework are often demanded by communities regardless • Di
Slide 8: Consistent Creation of Economic Value
Consistent Creation of Economic Value Strategically Additive Organic Earnings Continued Investments (-) Acquisitions (+) Growth (+) • A core part of Montrose’s • Consistent growth since 2016: • Investments in corporate growth strategy is via infrastructure and in new acquisitions in a highly • Adjus
Slide 9: Financial Overview
Financial Overview
Slide 10: Q2 and H1 2020 Revenue Performance
Q2 and H1 2020 Revenue Performance Q2 2020 Revenue • Solid revenue growth in excess of ($ in mm) 20% YoY during Q2 and H1 2020 $74 • Growth in all segments • CTEH experiencing favorable tailwinds given demand for $57 pandemic response services • Excluding discontinued service lines(1), revenue incre
Slide 11: Q2 and H1 2020 Adjusted EBITDA
Q2 and H1 2020 Adjusted EBITDA Q2 2020 Adjusted EBITDA(1) ($ in mm) • Solid Q2 Adjusted EBITDA(1) growth $14 • Up 74% YoY to $13.9 million • Adjusted EBITDA Margin(1) $8 expanded 490 basis points YoY • Strong H1 Adjusted EBITDA(1) • Up 54% YoY to $19.5 million Q2 2019 Q2 2020 Margin(1) % 14% 19% • A
Slide 12: Q2 2020 Segment Highlights
Q2 2020 Segment Highlights • Assessment, Permitting and Response Assessment, Permitting and Response increase in Adjusted EBITDA and margin impact primarily reflects the CTEH ($ in mm) acquisition $18.6 $5.0 • Measurement and Analysis higher Adjusted EBITDA and margin driven by favorable business mi
Slide 13: Attractive Capital Structure
Attractive Capital Structure Commentary Flexible balance sheet to pursue investments in innovation and acquisitions in highly fragmented industry Pro forma for the IPO(2), Montrose has $89.5 million of liquidity, including $39.5 million of cash and $50.0 million of availability under its revolvi
Slide 14: 2020 Outlook
2020 Outlook Adjusted EBITDA(1) Revenue expected to grow in excess ($ in mm) of 20% YoY $47 - $55 Adjusted EBITDA margin(1) anticipated to be in range of 16.0% to 17.5%, delivering solid YoY improvement Resilient financial performance $31 through COVID-19 expected to continue Business performance is
Slide 15: Investment Highlights
Investment Highlights ESG Is Who We Are – The Environment is Our Business Strong Financial Performance with Consistent Track Record of Growth and Cash Flow Generation Resilient Across Political and Economic Cycles with Diverse Customers and End Markets Differentiated Technology, Processes an
Slide 16: Appendix
Appendix
Slide 17: Summary of Oaktree A-2 Preferred
Summary of Oaktree A-2 Preferred Investment Summary Post-IPO Terms Governance • In April 2020, Oaktree • No fixed maturity date • One Oaktree representative Capital purchased $175mm remains on the Montrose of Series A-2 Preferred • Repayable in cash at board of directors while A-2 Equity to fund the
Slide 18: Non-GAAP Financial Information
Non-GAAP Financial Information In addition to our results under GAAP, in this presentation we also present certain other supplemental financial measures that are not required by, or presented in accordance with, U.S. GAAP, including Adjusted EBITDA and Adjusted EBITDA margin. We calculate these meas
Slide 19: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Years Ended December 31 , Q2 June 30, YTD Q2 June 30, LTM ($ in mm) 201 6A 201 7A 201 8A 201 9A 201 9A 2020A 201 9A 2020A June 30, Net Loss $ (9) $ (1 1 ) $ (1 6) $ (24) $ (1 ) $ (4) $ (6) $ (45) $ (63) Interest expense 3 6 11 7 1 5 2 8 12 Income Tax (benefit) Expense
Slide 20: Reconciliations of Additional Non-GAAP Information
Reconciliations of Additional Non-GAAP Information in $ millions Montrose Montrose CTEH + CTEH 201 9 Revenue 233.9 1 1 0.1 344.0 (1) 201 9 Adjusted EBITDA 31 .2 36.2 67.4 (1) CTEH Adjusted EBITDA is calculated as follows: in $ millions Net Income 34.9 Interest expense (net) 0.4 Depreciation and amor
Montrose Environmental Group — Q2 2020 Earnings Presentation on 6ix