Onterris, Inc. · NYSE:ONT
Onterris — Montrose Environmental Group — Q2 2024 Earnings Presentation
26 slides from Onterris's earnings presentation, Aug 7, 2024
Slide 1: Second Quarter 2024 Earnings Call
Second Quarter 2024 Earnings Call August 7, 2024
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: Operating Overview
ON l ele) cs Be ne Oo as OO
Slide 4: Highlights Q2 2024
Highlights Q2 2024 • Highest-ever quarterly revenue and Consolidated Adjusted EBITDA1 with solid margin expansion across Revenue all segments primarily due to: - Organic growth across most of our business, $173.3M supported by higher demand, pricing effectiveness and continued cross-selling2 Up 8.9%
Slide 5: Capabilities Aligned With Sustainable and Secular Industry Tailwinds
Capabilities Aligned With Sustainable and Secular Industry Tailwinds ASSESSMENT, PERMITTING MEASUREMENT REMEDIATION & REUSE AND RESPONSE AND ANALYSIS Advisory Response Testing Water Treatment Remediation Renewable Climate Adaption & Event Driven Response Emerging Contaminant Regulations
Slide 6: The Montrose Model is Increasingly Recurring, Predictable and Scalable
The Montrose Model is Increasingly Recurring, Predictable and Scalable ~96% The Montrose (Revenue Retention)1 Advantage + 15% ~6,000 (Avg. annual organic growth)2 ~$200B (Unique Clients) + (PFAS TAM)4 ~51% + 1. Business (Cross Sales)3 >$150B 30-40% (Growth from Next-Gen Solutions) Grounded on (Annua
Slide 7: Recent M&A Overview
Recent M&A Overview • Successfully completed 5 value- 2014 enhancing acquisitions 2014 in 2024 which provide: 1. Additive services and client opportunities 2. Geographic expansion • Demonstrated ability to effectively integrate, cross-sell and create synergies • Acquisition pipeline remains robust •
Slide 8: Customer and Revenue Diversity Insulates from Political and Economic Shifts
Customer and Revenue Diversity Insulates from Political and Economic Shifts Revenue Over Time ($M) Tight Labor Market, Higher Inflation and Interest Rates Economic Uncertainty COVID Economic Shock Obama Trump Administration Biden Administration Administration © 2024 Montrose Environmental Group, Inc
Slide 9: Financial Overview
Financial Overview @\ MONTROSE ENVIRONMENTAL
Slide 10: Q2 and YTD Q2 2024 Record Revenue Performance
Q2 and YTD Q2 2024 Record Revenue Performance • Highest-ever quarterly revenue in Q2 Q2 2024 Revenue - Q2 revenue increased 8.9% to $173.3M ($ in Millions) • Q2 YTD revenue of $328.7M, a 13.1% $159.1 $173.3 increase • Q2 and YTD Q2 revenue growth drivers: - Contributions from completed Q2 2023 Q2 20
Slide 11: Q2 and YTD Q2 2024 Consolidated Adjusted EBITDA Performance
Q2 and YTD Q2 2024 Consolidated Adjusted EBITDA1 Performance • Record quarterly Consolidated Adjusted EBITDA1 in Q2 Q2 2024 Consolidated Adj. EBITDA1 ($ in Millions, % as a Percentage of Revenue) • Q2 and YTD Q2 Consolidated Adjusted $21.2 $23.3 EBITDA1 reflect higher revenues, driven in part by org
Slide 12: Q2 and YTD Q2 2024 Diluted Adjusted Net Income per Share
Q2 and YTD Q2 2024 Diluted Adjusted Net Income per Share1 • Q2 Diluted Adj. EPS1 of $0.20 Q2 2024 Diluted Adj. EPS1 compared to $0.29 in prior year quarter $0.29 $0.20 • YTD Q2 Diluted Adj. EPS1 of $0.37 compared to $0.47 in prior year quarter • Q2 and YTD Q2 Diluted Adj. EPS1 Q2 2023 Q2 2024 change
Slide 13: Assessment, Permitting and Response Segment Performance
Assessment, Permitting and Response Segment Performance Q2 2024 Revenue and Segment Adj. EBITDA • Revenue change primarily due to: ($ in Millions, % as a Percent of Segment Revenue) - Robust demand for advisory services, $13.8 $61.4 $12.6 $53.4 and - Cross-selling success across multiple business li
Slide 14: Measurement & Analysis Segment Performance
Measurement & Analysis Segment Performance Q2 2024 Revenue and Segment Adj. EBITDA • Q2 and YTD Q2 revenue growth ($ in Millions, % as a Percent of Segment Revenue) primarily driven by: $54.8 $50.1 $12.4 $10.8 - Strong organic growth across lab services, including PFAS and air testing 21.6% 22.5% -
Slide 15: Remediation & Reuse Segment Performance
Remediation & Reuse Segment Performance • Q2 and YTD Q2 revenue growth Q2 2024 Revenue and Segment Adj. EBITDA drivers: ($ in Millions, % as a Percent of Segment Revenue) $65.1 - Matrix acquisition in June 2023 and $47.6 $8.9 - Strong organic growth in soil and $6.0 groundwater remediation business,
Slide 16: Attractive Capital Structure
Attractive Capital Structure Commentary Equity Market Capitalization • Flexible balance sheet to further invest in innovation and acquisitions in highly fragmented industry Preferred Total Equity Capitalization Equity • Raised net proceeds of $121.8 million in a ~$1.1B $122M3 common stock offering i
Slide 17: Outlook
Outlook
Slide 18: 2024E Outlook Reaffirmed
2024E Outlook Reaffirmed Outlook Driven by Market Tailwinds, Growth Initiatives and Margin Optimization Revenue ($ in Millions) $690 - $740 • Revenue is expected to be in the range of $690 $6242 - $740 million and Consolidated Adjusted EBITDA1 is expected to be in the range of $95 - $100 million • A
Slide 19: Investment Highlights
Investment Highlights Unique, vertically integrated Significant scale with global reach environmental company serving repeat client base Large TAM and secular tailwinds Consistent record of strategically and backed by regulatory and financially accretive acquisitions corporate initiatives coupled wi
Slide 20: Appendix
Appendix
Slide 21: Summary of Oaktree A-2 Preferred
Summary of Oaktree A-2 Preferred Investment Current Terms Governance Summary • In April 2020, Oaktree Capital • No fixed maturity date • Oaktree has the right to purchased $175mm of Series appoint one representative A-2 Preferred Equity to fund - Repayable in cash at on the Montrose board of the cas
Slide 22: 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 of financial performance that are not required by, or presented in accordance with, GAAP, including, Consolidated Adjusted EBITDA, Consolidated Adj
Slide 23: Reconciliation of Net Loss to Adj. Net Income and Diluted Adj. Net Income per Share
Montrose Environmental Group, Inc. Reconciliation of Net Loss to Adj. Net Income and Diluted Adj. Net Income per Share (In thousands except per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net loss $ (10,170) $ (7,174) $ (23,527) $ (21,893) Amortization of
Slide 24: Reconciliation of Net Loss to Adj. Net Income and Diluted Adj. Net Income per Share
Montrose Environmental Group, Inc. Reconciliation of Net Loss to Adj. Net Income and Diluted Adj. Net Income per Share (In thousands except per share amounts) Quarter Ended Year Ended June 30, March 31, December 31, September 30, June 30, March 31, December 31, September 30, December 31, 2024 2024 2
Slide 25: Reconciliation of Net Loss to Consolidated Adjusted EBITDA
Montrose Environmental Group, Inc. Reconciliation of Net Loss to Consolidated Adjusted EBITDA (In thousands) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net loss $ (10,170) $ (7,174) $ (23,527) $ (21,893) Interest expense 3,976 1,877 7,282 3,418 Income tax expense (bene
Slide 26: Reconciliation of Net Loss to Consolidated Adjusted EBITDA
Montrose Environmental Group, Inc. Reconciliation of Net Loss to Consolidated Adjusted EBITDA (In thousands) Quarter Ended Year Ended June 30, March 31, December September June 30, March December September December 2024 2024 31, 30, 2023 31, 31, 30, 31, 2023 2023 2023 2022 2022 2023 Net loss $ (10,1
Montrose Environmental Group — Q2 2024 Earnings Presentation on 6ix