Onterris, Inc. · NYSE:ONT
Onterris — Montrose Environmental Group — Q3 2024 Earnings Presentation
25 slides from Onterris's earnings presentation, Nov 7, 2024
Slide 1: Third Quarter 2024 Earnings Call
Third Quarter 2024 Earnings Call NOVEMBER 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: Key Updates
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Slide 4: Highlights Q3 2024
Highlights Q3 2024 • Highest-ever quarterly revenue of $178.7M, an REVENUE increase of $10.8M versus Q3 2023 - Strong organic growth across most of our business $178.7M A Quarterly lines, supported by higher demand and continued Record cross-selling success2 6.4% Increase Over Q3 2023 7% organic r
Slide 5: Key Messages
Key Messages Long-term capital allocation strategy unchanged Near-term priority is redemption of preferred equity and subsequent deleveraging • Concurrently deemphasizing acquisitions in the near term Ongoing focus on cash flow generation • Confirm our target of 50%+ of Operating Cash Flow as
Slide 6: 2024 Guidance and Outlook
2024 Guidance and Outlook Reiterate full-year 2024 revenue and Adj. EBITDA1 guidance • Full year 2024 guidance ranges of $690M - $740M of revenue and $95M - $100M of Consolidated Adjusted EBITDA1 - Environmental emergency response revenue expected within revenue range of $50M - $70M FY 2024 • Q4 2
Slide 7: Near-term Priority is Redemption of Preferred Equity, Subsequent Deleveraging
Near-term Priority is Redemption of Preferred Equity, Subsequent Deleveraging Capital Deployed into Value Creation Disciplined Capital Allocation Drives Strong Returns Since 2023 1. Prioritize balance sheet simplification in the near-term; will focus $400 on redemption of the Series A-2 Preferred St
Slide 8: Ongoing Focus on Cash Flow Generation & Attractive Capital Structure
Ongoing Focus on Cash Flow Generation & Attractive Capital Structure Continued Focus on Operating Cash Flow Generation • Target 50%+ of Operating Cash Flow as a percentage of Consolidated Adjusted EBITDA1 on an annual basis - FY2024 expect Operating Cash Flow as a percentage of Consolidated Adjusted
Slide 9: Financial Overview
Financial Overview @\ MONTROSE ENVIRONMENTAL
Slide 10: Record Consolidated Performance and Improving Profitability
Record Consolidated Performance and Improving Profitability Q3 2024 Results compared to Q3 2023 Q3 2024 Revenue • Highest-ever quarterly revenue of $178.7M, or ($ in millions) $178.7 6.4% growth, primarily due to $167.9 - Strong organic growth in our Assessment, Permitting & Response and Measurement
Slide 11: Record Consolidated Performance
Record Consolidated Performance YTD Q3 2024 Results compared to YTD Q3 2023 YTD Q3 2024 Revenue • Record YTD revenue of $507.4M, or 10.7% growth, ($ in millions) $507.4 $458.5 primarily due to - Strong organic growth in our Measurement & Analysis and Assessment, Permitting & Response segments, and -
Slide 12: Diluted Adjusted Net Income per Share Improvement
Diluted Adjusted Net Income per Share1 Improvement Q3 and YTD Results Compared to Prior Year Periods Q3 2024 Diluted Adj. EPS1 • Q3 Diluted Adj. EPS1 of $0.41, a $0.10 increase, or $0.41 32.3% improvement $0.31 • YTD Q3 Diluted Adj. EPS1 of $0.80, a $0.02 increase - Increased Q3 and YTD Q3 Diluted A
Slide 13: Assessment, Permitting and Response Segment Performance
Assessment, Permitting and Response Segment Performance Q3 and YTD Results Compared to Prior Year Q3 2024 Revenue and Segment Adj. EBITDA Periods ($ in millions, % as a percentage of Segment Revenue) • Revenue declined $5.0M in Q3 2024 and $6.6M $57.0 $14.9 YTD 2024 primarily driven by $52.0 $11.2 -
Slide 14: Measurement & Analysis Segment Performance
Measurement & Analysis Segment Performance Q3 2024 Results compared to Q3 2023 Q3 2024 Revenue and Segment Adj. EBITDA ($ in millions, % as a percentage of Segment Revenue) • $8.1M, or 16.1%, revenue growth primarily driven by: $58.6 $50.5 $13.4 - Strong organic growth across laboratory and field $1
Slide 15: Remediation & Reuse Segment Performance
Remediation & Reuse Segment Performance Q3 2024 Results compared to Q3 2023 Q3 2024 Revenue and Segment Adj. EBITDA • $7.6M, or 12.6%, revenue growth driven by: ($ in millions, % as a percentage of Segment Revenue) - $11.1M from acquisitions and solid organic growth in $68.1 remediation services1, $
Slide 16: Montrose Overview
Montrose Overview
Slide 17: 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 corporate financially accretive acquisitions coupled initiatives wi
Slide 18: 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 Treatment Advisory Response Testing Remediation Technology Climate Adaption & Event Driven Response Emerging Contaminant Regulations (e.g.,
Slide 19: 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 >$150B 30-40% (Growth from Next-Gen Solutions) Grounded on (Annua
Slide 20: Customer and Revenue Diversity Insulates from Political and Economic Shifts
Customer and Revenue Diversity Insulates from Political and Economic Shifts Revenue Over Time Tight Labor Market, Higher Inflation ($ in millions) and Interest Rates COVID Economic Uncertainty Economic Shock, 4% Organic Growth 7% Organic Growth Obama Trump Administration Biden Administration Adminis
Slide 21: Appendix
Appendix
Slide 22: Summary of Oaktree A-2 Preferred
Summary of Oaktree A-2 Preferred Investment Summary Post-IPO Terms Governance • In April 2020, Oaktree Capital • No fixed maturity date • Oaktree has the right to appoint one purchased $175M of Series representative on the Montrose - Repayable in cash at Company’s A-2 Preferred Equity to fund the bo
Slide 23: 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 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 Three Months Ended Nine Months Ended Year Ended December 31, (in thousands except per share amounts) 2024 2023 2024 2023 2023 2022 Net loss $ (10,564) $ (7,525) $ (34,091) $ (29,418
Slide 25: Reconciliation of Net Loss to Net Loss Margin and Consolidated Adjusted EBITDA Margin
Montrose Environmental Group, Inc. Reconciliation of Net Loss to Net Loss Margin and Consolidated Adjusted EBITDA Margin Three Months Ended Nine Months Ended Year Ended December 31, (in thousands) 2024 2023 2024 2023 2023 2022 Net loss $ (10,564) $ (7,525) $ (34,091) $ (29,418) $ (30,859) $ (31,819)
Montrose Environmental Group — Q3 2024 Earnings Presentation on 6ix