Onterris, Inc. · NYSE:ONT
Onterris — Montrose Environmental Group — Q3 2022 Earnings Presentation
26 slides from Onterris's earnings presentation, Nov 9, 2022
Slide 1: Third Quarter 2022 Earnings Call
Third Quarter 2022 Earnings Call November 9, 2022
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
Operating Overview > \ MONTRO: SE Wl ENVIRO
Slide 4: Highlights Q3 2022
Highlights Q3 2022 • Strong third quarter 2022 results and sequential margin improvement driven primarily by organic growth in our Revenue Adj. EPS(1) Remediation and Reuse and Measurement and Analysis segments $130.3M $0.12 Organic Growth in Adj. Net Income(1) of • Strengthening organic revenue gro
Slide 5: Strong Record of Long-term Growth
Strong Record of Long-term Growth Multiple Levers to Drive Growth ORGANIC Continued market share gains through Revenue ($ in Millions, Dec FYE) focused marketing, business development 2016-Q3 2022 LTM CAGR: 31% GROWTH and technology innovation $546 $549 MARGIN Revenue Growth EXPANSION and Operating
Slide 6: Capabilities Aligned with Emerging Political & Regulatory Priorities
Capabilities Aligned with Emerging Political & Regulatory Priorities Focus on Environmental Matters Creates Tailwinds for Montrose Assessment, Permitting & Measurement & Analysis Remediation & Reuse Response Ecosystem Regulatory Response Testing Lab LDAR Biogas Soil/Water Climate Change & Event Driv
Slide 7: Examples of Recent Regulatory Tailwinds
Examples of Recent Regulatory Tailwinds Assessment, Rule Summary Permitting & Measurement Remediation Response & Analysis & Reuse PFAS Hazardous Would cause PFOA and PFOS to be eligible for clean up Substance Designation Legislation under the recently refunded Superfund Program and require companies
Slide 8: Recent M&A Overview
Recent M&A Overview • Successfully completed a number of value- enhancing acquisitions 2014in 2021 and 2022 2014 • Consistently target additive services, geographies, clients and technologies • Demonstrated ability to successfully integrate, cross-sell and create revenue synergies over time • Acquis
Slide 9: Financial Overview
Financial Overview
Slide 10: Q3 and YTD Q3 2022 Revenue Performance
Q3 and YTD Q3 2022 Revenue Performance Q3 2022 Revenue ($ in Millions) Q3 Revenue and YTD Q3 Revenue in-line with expectations for: (i) strong organic revenue $132.6 $130.3 growth across most services lines plus accretive acquisitions and (ii) a decline in CTEH COVID-19 related services • Q3 down 1.
Slide 11: Q3 and YTD Q3 2022 Consolidated Adjusted EBITDA Performance
Q3 and YTD Q3 2022 Consolidated Adjusted EBITDA(1) Performance Q3 2022 Consolidated Adjusted EBITDA(1) ($ in Millions) Q3 and YTD Q3 Consolidated Adjusted EBITDA(1) in-line with expectations $20.3 $17.1 • Q3 and YTD Q3 decline due to lower revenue and business mix, respectively, the cyber- attack in
Slide 12: Q3 2022 Segment Performance
Q3 2022 Segment Performance Total Operating Segments Assessment, Permitting and Response ($ in mm; % of revenue) ($ in mm; % of revenue) $132.6 $130.3 $29.5 $63.4 $25.3 $46.4 $15.7 $9.8 22.2% 19.4% 24.8% 21.2% Revenue Operating Segment Adjusted EBITDA Revenue Operating Segment Adjusted EBITDA Q3 21
Slide 13: Attractive Capital Structure
Attractive Capital Structure Commentary Market Capitalization • Flexible balance sheet to pursue investments in innovation and acquisitions Preferred in highly fragmented industry Equity • Montrose has $218.6 million of liquidity, $182M(3) including $93.6 million of cash and $125.0 million of availa
Slide 14: Outlook
@\ MONTROSE ENVIRONMENTAL
Slide 15: Base Business Revenues on Solid Trajectory in 2022
Base Business(1) Revenues on Solid Trajectory in 2022 Well Positioned for Growth in Base Business(1) Revenue in 2022 ~$545(5) Revenue ($M) $534 ~$10-20 ~$147 $311 ~$31 ~$525-535 $206 $158 $387 $280 $206 $158 2018 2019 2020 2021 2022E Base Business Revenue(1,2,3) CTEH Above-Trend Revenue(4) (1) Base
Slide 16: 2022 Outlook
2022 Outlook Current Outlook Aligned With Long-term Expectation for Base Business Revenue(1) Growth on Average in Excess of 20% Per Year For Foreseeable Future • 2022E outlook assumes revenue double-digit Revenue ($ in Millions) organic growth excluding CTEH plus accretive $535 - $555 $546 acquisiti
Slide 17: Investment Highlights
Investment Highlights ESG is who we are – Significant scale with global ESG the environment is our business reach in large, growing and highly fragmented industry Proven ability to identify, Strong financial performance execute and integrate with consistent track record acquisitions with a strong of
Slide 18: Appendix
Appendix @\ MONTROSE ENVIRONMENTAL
Slide 19: Working Across Montrose to Help Solve the Global GHG Problem
Working Across Montrose to Help Solve the Global GHG Problem STEP #1 Environmental Challenge: O&G industry’s operations represent 9% of human-made Deep Understanding greenhouse gas (GHG) emissions. Stakeholders, including the And Working Knowledge SEC's newly proposed climate change disclosure rules
Slide 20: Working Across Montrose to Help Solve the Global PFAS Problem
Working Across Montrose to Help Solve the Global PFAS Problem Environmental Challenge: PFAS are widely used, long lasting chemicals components which break down very slowly over time in water, air and soil Remediation Outlook: PFAS remediation expenditures in the U.S. are estimated to surpass $160 bi
Slide 21: 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 • One Oaktree representative purchased $175mm of Series A-2 remains on the Montrose board Preferred Equity to fund the cash - Repayable in cash at Company’s of dire
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, Adjusted Net Inc
Slide 23: Reconciliation Tables
Reconciliation Tables Montrose Environmental Group, Inc. Reconciliation of Net (Loss) Income to Adjusted Net Income (in thousands) For the Three Months Ended For the Nine Months September 30, Ended September 30, 2022 2021 2022 2021 Net (loss) income $ (5,720) $ 2,226 $ (21,007) $ (23,853) (1) Amorti
Slide 24: Reconciliation of Net (Loss) Income to Adjusted Net Income
Montrose Environmental Group, Inc. Reconciliation of Net (Loss) Income to Adjusted Net Income (in thousands) Q uarter Ended Year Ended June 30, March 31, December 31, September 30, June 30, March 31, December 31, 2022 2022 2021 2021 2021 2021 2021 Net (loss) income $ (7,751) $ (7,536) $ (1,472) $ 2,
Slide 25: Reconciliation of Net (Loss) Income to Consolidated Adjusted EBITDA
Montrose Environmental Group, Inc. Reconciliation of Net (Loss) Income to Consolidated Adjusted EBITDA (in thousands) For the Three Months Ended For the Nine Months S eptember 30, Ended S eptember 30, 2022 2021(a) 2022 2021(a) Net (loss) income $ (5,720) $ 2,226 $ (21,007) $ (23,853) Interest expens
Slide 26: Reconciliation of Net (Loss) Income to Consolidated Adjusted EBITDA
Montrose Environmental Group, Inc. Reconciliation of Net (Loss) Income to Consolidated Adjusted EBITDA (in thousands) Q uarter Ended Year Ended June 30, March 31, December 31, September 30, June 30, March 31, December 31, 2022 2022 (a) 2021 (a) 2021 (a) 2021 (a) 2021 (a) 2021 (a) Net (loss) income $
Montrose Environmental Group — Q3 2022 Earnings Presentation on 6ix