Montrose Environmental (MEG) 15 Aug 222022 Q2 Earnings call transcript

Ladies and gentlemen, greetings and welcome to the Montrose Environmental Group, Inc.

Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator instructions].

conference recorded. this reminder, a is being As I host, Mr. turn the to your conference over will now Rodny Relations. Nacier, Investor Please go ahead, sir.

Thank you. call. XXXX quarter Welcome to our second earnings

President and on Chief Officer. me the are Manthripragada, Joining call Executive Dicks, Allan our Officer, Chief Financial Vijay and

we discussion referring be is today, presentation, of our to investors on the During section earnings website. which will our our available

Our earnings release is also available on the website.

forward-looking you of our the fiscal identify I would filings, forward-looking Reform to XXXX. our We to that our update well that to Private will performance material and XXXX, in include should risks any December everyone and safe operating Litigation like today's recent no to uncertainties uncertainties way as unknown subject annual provisions remind X. be obligation considered future for affect statements the to slide on could statements. Act refer including are to evaluating Form year Actual XX-K ended the differ principal risks Moving forward-looking which Securities results XX, any and financial the due harbor that in We assume as that report and call SEC of statements known performance. may a outlook.

the thereof now to that, measure. investors, Vijay, over these non-GAAP comparable X. directly for believe certain for appendix from measures to slide in be Please to purposes, measures to on providing considered call discussing turn measures. results In directly net addition, their a we and the will useful consolidated like be With certain earnings today, non-GAAP discussion they reconciliation most not isolation presentation adjusted and net most and the of these release informational using the or would provide or limitations measures comparable beginning income non-GAAP We see these of I financial adjusted including should income to adjusted we our EBITDA, the GAAP are earnings GAAP per share. why

to to all highlights, us today. welcome over will few financial And Rodney. provide Dicks of review. joining Allan our I you, Thank it business a for hand you then

We X I shared of Q&A. to will speak X presentation through pages on then open generally our it to website. up the will

second in the to us stellar of of We another our successfully solid team execution have of our operations communicated cyberattack all am I for few who temporarily a growth broad-based produced the we strong of COVID-XX proud members CTEH Regarding expected more previously revenues. of offset and that disrupted we produce macroeconomic and turbulent these Despite normalization weeks. navigated a XXXX, a the responded successfully quarter related than helped June quarter. challenges, revenue environment, the and

quarter. reiterate that quarter are context environmental I In highlight follow to like of addition us Montrose members leading our environmental us growth excellent drive to key is the and for service is basis. outperformance thank to second not to investing to our best an allows demand on call, It flow, quarter stellar define joining providers. excluding the success the the solid contingent $XX.X solutions our fiscal you. business and team revenue team's a clients would to business. operating million, important themes our from of revenue our our and organic performance, which record our continued Montrose The year-to-date cash to evaluated was does one CTEH, services continues excluding payments, there continued annual in for as To dedication patterns several In continue second providing

in our growth most revenue organic in of outperformance service was lines. there First,

the organic growth year. first surged and a of PFAS negative to water Our biogas solutions the half carbon intensity big contributor energy were our or teams through this

expected. CTEH's over past is the discussed continued few trending have COVID-related quarters Second, and work the we as deceleration in as

than more in see can business. is in the by offset in the CTEH of you As growth our rest our results, decline

with remain attractive travel to ability as but in expenses we faster accelerate to costs our than have margins. we anticipated, such adjustments variable and confident produce pricing Third, costs, respond certain seen with efficiencies

and our we strength Our flexibility cash changed. as consolidate long-term not to gives highly improve strong. of us very fragmented mentioned plan execute cash and in expectations our environmental industry. remains continues parts to on remediation. investing environmental Fourth, of to margin to ability I earlier, flow have The the and our flow, financial XXXX Fifth, continue our continue

Montrose often out are TriAD of to talent week. the of TriAD and to leading Nashville, Tennessee. track acquisitions capabilities we team immediately add as to Consistent service great environmental that Our accretive with welcome our team. last are pleased and record, based are consultants

TriAD to growth and history value addition creation the providing access and such our expansion, Montrose. and as great remain a growth underpin team an geographic industry culture Montrose important lever In long-term with to TriAD Complementary brings that clients, acquisitions specific strategy.

stakeholders, Finally, methodology saw we including the more consolidated investments of as SEC, feedback the various nothing night back release, change. add the have EBITDA. our from definition you of on a last than removed adjusted from start-up is based in This press

flows revenue we with year, outlook we economics. in be investments communicated. past. start-up margins have technology doesn't one-time the they to having and alter doesn't on the these are for fundamental new less guidance the R&D success or nature total been in expect our Given also example, This any previously new as development, change This cash it or than for change methodology long-term our doesn't our methodology

business and our year, further reiterating are for outlook this the his section. will momentum, in given address Allan We

catalysts see take let to business of our we developments few forward. recent moving Next, some a me walk minutes for the through some and that

the and regulatory sector environmental and opportunities from we relates continue stewardship tailwinds first, industry regulatory activity. created it focused opportunities, private see by better on to to As

PFAS energy and in We have capitalize been able broad renewable measurement gas demand for to on mitigation and particular. remediation, greenhouse

it Inflation over passed the regulatory to includes is note, the quantification in of methane large Second, have projects, environmental of Act sector. fee US future relates impose repair Montrose as US from the of awarded a incentives to select emission emissions, public growing gas and leak hundreds millions the expected for also and and of Senate changes our of both for the clean weekend we solutions and monitor reflecting fees. government in and avoid importance enhanced methane to verification have facilities. excess been to dollars recently Improved methane emissions oil for first-time across legislation private On on focus leaks industry key the detection, this methane up Of years. been areas Reduction

to favor, focus we capabilities, expect on our wells and methane closing software direct innovation capabilities and environment program in health a regulatory effects the of evolves Montrose to and emissions, non-federal invest additional gas climate services lands and The in mitigation see management our testing advisory, communities impacted particular, over our greenhouse reduce capabilities. permanently example, As supporting see for $XX support are bill our to processes billion equipment We by the and disproportionately also change. increased aims and overlap measurement with that tailwinds. improving negative public to detection environmental with on

are needs emissions and For we strategic monitoring And to April, increase represents by announced fleshed of in as for aggregate, demand update actions learn really map. in impacts. be will what Colorado, for like for are City and water working to is reduce community, the where encouraged ambient three continue together the and PFAS, the Montrose. regulators in example, to projects its Commerce industry to The so you bill we and new air it Energy line Denver, relates as clean as more. out, PFAS it our we Suncor part North fence EPA But in real-time road

determine water for criteria In needed proposal This to lab demand for authorities for for aquatic for and reduce source remediation to whether response a for remediation PFAS, cleanups. the First, are the organic Water increases our life absorbable and of at PFAS and fluorine PFAS levels screening Act activities five discharges EPA regional Clean measure issued services. May, the samples. permit which

While announcement, billion these EPA PFAS other announcements remediation and the not local drinking rely help state develop Montrose In disadvantaged EPA these law screenings for due our guidelines and service requirements. advisories for infrastructure to for communities. will this standards, invited smaller conjunction released meet complementary the enforceable in And to and Companies water our The needs them bipartisan that and these specifically with drinking also are territories $X in water, has to interpret funding address states plans to June, they apply in contaminants on clients states. emerging PFAS. offerings. grant and very four service guidance do in are health of existing federal,

remediation reasons levels We will would to with all environmental our both have the the by central next an revenue Permitting for continuity and revenues, their navigate to driven to I our remains in positioned this continue segment normalized in expect and well for It demand do like at capabilities Within and segment, exceptionally second rate. of to quarter business continues to that for sector. gain rapidly is we landscape more Montrose help is policies. protection that evolving to a the believe, as we regulatory as clients public our momentum these more private become corporate government that while, of CTEH clients despite relative for continues discuss services. The job be by our exceptional deceleration which our most business CTEH, elevated run segment. team the to Response and Assessment, CTEH and performance

past pleased segment. XX are this we which contributions from to positive the months, CTEH, were mostly acquisitions to over our Excluding added see

to shift strong Our with increase such growth services. second our acquisitions greenhouse relative The in risk, the West our supporting for performing example, drove mix gas last segment, during select organic solid services reason well, are Coast Measurement in attractive along primary demand very remains year. our Analysis as our fire growth managing is for margins for quarter. areas advisory Within and the and Utilities in

greenhouse growth of by this about just this the June, optimistic remain in momentum Given segment impacted the primarily PFAS, were around and impacted Enthalpy and the network. the future impact Margins discussed, cybersecurity temporary lab as which segment. gas mix emissions regulatory we in I our attack in

and the our quarters as aren't over demand to Reuse we to business, subsequent energy growth in treatment will outperformance the quarter conviction the expect to Within variances our organic We renewable by impact remain our services. the recoup quarterly previously segment, disruption of Putting again have PFAS margins driven and teens Remediation the annually second continue our once that was high assess water industry-leading to way at aside XX% best quarters. as for fiscal discussed.

levels margins on normalized prior calls, remain below investments. consider and expect we As what as given our ongoing noted

am the the investing team landscape overcome clients. each In geographic in summary, in to space. their harness client our footprint we and clients increased Montrose continue do were this grateful to business, are our our in our I for We demand to for technology through and our the and faced teams, work we and all incredibly and regulatorily our evolving other for they that hard and our challenges delivering It execution communities. able was entire

reflect we a Our incredibly our solve helping the in At results continued look shareholders. we our excited are second momentum remain for reiterating result, guidance. to challenges to And business. I as full creating collective our future. value our year about forward quarter Montrose, and environmental

We continued the your of also that, and upcoming you look hand all me quarters in with are forward sharing Thank over you. let to support. to more Allan. With it grateful for

Thank you, Vijay.

globe. particularly of to nature delivered ago, IPO for from of have PFAS, for our our our and has the grow, our cross-selling with core of results, momentum execution that We need quarter accretive success environmental resiliency Since which customers, the monitoring, years across are pleased notable remains the in-demand solutions. business business the continued solid and environmental two remediation reflect relationships We and second initiatives successful continues believe our gained expanding benefiting to M&A. and significant strong with our

our revenue Moving to slide X. performance on

organic our continue drive We strong growth to business. in

revenues CTEH exit as as revenues acquisitions. million COVID-XX-related in from growth and partially This both positive our by versus period was to The contributions contracts. compared services our X.X% $XXX.X to O&M in Year-to-date, offset the million. second Remediation to increased prior-year primary Our and Measurement by driver from was the organic Analysis lower X.X% prior-year planned periods and quarter up quarter. well the revenue $XXX.X Reuse of were significantly segments and legacy growth provided

XX. Looking at our slide consolidated performance adjusted on EBITDA

through we adding back mentioned, our to losses will more adjusted no longer Vijay to innovation expense our recurring start-up consolidated The ahead business. start-up EBITDA. make business opportunities initiatives, a As significant in grow are

This of of second to change XX.X% million XXXX. dollars of XXXX. a in So our million quarter of months inclusive The both to we in start-up quarter year-over-year adjusted travel, inclusive or change that adjusted and of was June $XX.X appropriate. was and of believe compares costs. consolidated and periods of six initiatives. said, compares $X.X as mix, $X.X EBITDA impacting is seen have we million revenue, in of losses traction of of adjusted field million inclusive of XX.X% to start-up percentage revenue million $XX.X of of losses methodology this first With quarter. business start-up consolidated XXXX, XXXX period. direct and pricing for of the was $XX.X EBITDA the revenue, EBITDA EBITDA This or by adjusted of inclusive the million $XX.X or adjusted or prior-year revenue, consolidated costs in lab Year-to-date consolidated variable in with cyberattack other driven higher of supplies second losses our great in losses revenue, million in million $X.X start-up the Year-to-date, XX.X% $X.X prior-year consolidated of XX.X% the EBITDA

variable increase magnitude However, been the the duration than has initially and in anticipated. more costs severe of we

we manage through to the evaluate we consistent predictability pricing that basis. is the coming to the initiatives, how business to move price usual addition, to geographies our reemphasize traction stronger in more assessed businesses how hire our This the annual of recent resources remain due with This we seen with needs costs high annually. performance need with quarters. consistent certain company. our allocate That we I'll performance far than offset in shortages workforce staff, are frequency confident Montrose of experiencing an so our has ability we've said, our our is in on labor with the increased the the to and demand. In different to meet be

soil driven restrictions expected lifted. Analysis acquired XX.X%, from second to $XX adjusted primarily which percentage as lower our decrease revenues and Horizon this Turning CTEH, the to EBITDA segment the adjusted companies and XX.X% testing in Reuse ECI. revenue increases revenues quarter Environmental as timing, as pricing where The The year, labs the operate of the we Environmental labs' in subcontractor the taken treatment direct CTEH labor, In remediation attributable EBITDA demand to the this And our $XX.X have million, and slightly on the our PFAS and revenue in operating lower costs PFAS specialty project in increase impact of operating a Reuse provided our adjusted operate. In temporarily XX.X% our organic Permitting reflecting in which Remediation a experienced our was to for partially margins segment. of revenue million US Assessment, prior-year to XXXX. excess demand our of investments ability revenue in than our implemented of result and decreased which higher Intelligence, excess projects as Measurement COVID and respectively. the lower COVID-XX-related other XX. and increases year-over-year of the COVID-XX-related business and and segment finally, some given increased revenue water primarily as significant and well as revenue water segments to was revenue percentage in of revenue our to a business. segment, earlier $XX.X subsequent as cost disrupted were the in responsive travel businesses in biogas O&M X.X% due by decreases technology services services biogas of despite variable waning in business in Response of prevention of and from temporarily treatment in Remediation impact business growth contracts year-over-year Operating EBITDA of Standards, at unfavorable earlier margins. in EBITDA was timing growth segment, slide and significant offset services of for typically to decrease million, and continued the segment result infrastructure in EBITDA and adjusted in increased quarter a XX.X% million, margins and increases to result of of pandemic percent of our of decreased in water and adjusted our margins some the revenues, the acquisitions our to impact in organic lower-margin mix, than by cyberattack, discontinued the by of $XX.X normalization year, The the Measurement pricing treatment segment, a and as of Analysis Vista businesses, a both the lower acquisitions

in operating Year-to-date, flow $XX contingent capital million the primarily consideration cash million used the activities XX. our slide earnouts. and CTEH includes used in of was to operations prior $XX.X million, the period. Moving current $X.X cash of of in structure the which payment in on in payment compared of prior-year activities in related year improved respectively, acquisition-related operating to the $XX.X used year, Cash million to

cash increase continued acquisition-related six million of the in months working from million. lower payments, compared capital cash of was cash investments XXXX year used of million of period months $XX.X million cash ongoing an XXXX, in capital generation in Excluding million. to in six first activities of of reflect by scalability. the current $XX.X focus on to infrastructure operating $XX.X increase This $X.X in operating was increase primarily R&D with in period our and in activities of balancing an the the prior-year driven first in corporate the compared technology, increase strong flows These $XX.X to working ensure

contingent from XX, earnout Our the of acquisition-related end times, the XXXX, at in was which impact down X.X cash, times the obligations leverage quarter. of June prior-year payable ratio includes of X.X as at

shares the a obligation, make-whole not we cash, April preferred have creation preferred in Series any We business, to option, view this if date, redeem no dynamics. has equity to favorable given A-X prior payment maturity instrument value XXXX. stock its we to as for paid to the preferred the time the potential but at the Our subject and flexible

Series million market $XXX our equity the include approximately the stands in of at our cap, capitalization you equity If $X.X billion. A-X balance total

Looking at our slide a on trajectory business review XX. base of

of run over few we we've past an revenue $XX for quarters, rate $XX the million annual As business. CTEH discussed to anticipate our million

in revenue continues revenue years CTEH as this COVID Therefore, our to not CTEH revenues of from our remained to trend excluding maintain our what that expected to run revenues compared as is continues other the to of view remainder to revenue When refer which we rate revenue services is at elevated in CTEH, the Although we demand expected business, addition the same from the wane. for revenue expect level the would from CTEH the base normalize, coming above bump all lines. to our business our COVID-XX-related normalized we impact the to reoccur includes business. of see

business a solid to at the organic discussed reflecting base we've on call. continues Our trajectory, grow this tailwinds

on Based our first in million. to to XXXX outlook we Moving million XX. of range the of on reiterate outlook our the year resilient performance $XXX XXXX, to our in revenue full for the slide year $XXX half be full

reflects our forward overall to for our our value losses. remains demand provide for ability for reaffirmed members and services for again solutions. quarter the hard in I is Vijay updating methodology solid open our all year helping inclusive the our Montrose tremendous quarter. of their million resilient results. expected through the range of XXXX, revised Montrose. like progress for best-in-class are to XXXX work of you differentiated for to interest to produce your In to be today and thank shareholder our to would start-up to another we in us for in Our conclusion, consolidated questions. team of $XX million outlook full EBITDA environmental Thank deliver under both joining lines on adjusted next in our to million the you Operator, and $XX approach confidence $X look outlook We continued ready

[Operator Instructions].

from the Mulrooney from Tim William Our Blair. question comes first line of

little Sorry, I joined a late.

penalty hoping your discussed impact IRA just could emissions. briefly might includes sounds apologize this, but hefty you methane business. legislation So, was like I the Vijay, how a excess It comment already for I on OGI proposed you if the

But briefly. just beneficial, Yeah, let and light. more shed me think Tim, our we a little quite talked We it's bit actually it's beyond OGI about Tim, it business.

think the We business, for of equipment what's our the the It anticipate penalties. detection ton a we quantification going of OGI above for is support advisory out be measurement for looks about significant coming replacement our there's and for better the part for to like opportunities XX,XXX because threshold. Tim. leak repair As of business. metric that,

next-generation in non-federal then a closure verbiage of there and that kind mechanism some that to because it's of work land. benefit we also we the there's know, management think from quantify. support you program can on there's measure to As old wells are And

all are of So look and assessment us, of measurement the three the service across as a to see analysis as overall we result permitting, lines reuse kind tailwinds we act. likely for remediation Tim, think

why I'm One me. they I your more to treatment Allan, lower for R&R slides basis in EBITDA margins business, a Pivoting reasons like that XXX your correctly, if for points reading including year-over-year. business. the PFAS heard specifically, were you margins, few quite about margins is, down give there, it looks

continues PFAS as years? grow a profitability that mix, segment that how the of of overall percentage you the to over of do next impact couple the As to expect

want quarters question. this how really of with at Tim, and these And ends the if is A then, to main how take are of Tim, specific a some lines the flow it? to you shift. lot I macro Allan, time starts ebb why these and the choppy. why do is and it has address – don't look theme projects

going macro XXXX a see we how a be that quarter look attractive bit projects at in a flow. little course accretion to you'll year. the over some As and That's just ebb of noise. of of margin function out, us of really forth Quarter there's a this put outlook, segment kind in, these XXXX versus

that's Allan be I look you're keep I I expand quarters. it when course But that case the that extrapolated don't think that's just the really there's a to year. going further? you specific to on let may in of don't over why mind here. So, want comparing like trend the

that a pretty It underlying with several the projects exactly right. large associated margin. you're These Yes, recognition on don't quarters, Tim, revenue necessarily consistent depends complex span them. have deliverable. There's

So deliver project, and quarter-to-quarter And and of for particular low some somewhat margins eroded variable that business been over headwind at there, like that earlier tight we But, the forcing very which because generating take market, takes XX% seen year, Vijay, we've labor the a the to and also to healthy the And those the the on from that to and margins. increases. in to in length and costs cost able impact remediation of quarters have of projects, deliveries of by the a can typically nature soil rereact span travel projects quarter it's can it increase of more have of nature been rapid segment That project those pricing in travel continue that the has couple includes the timing is project us. course an our are quarters. on we Those full margins believe will also business. scale. also segment couple the

So you'll see in us two. quarter start or to offset higher next costs the those

timing It state It's go-forward the sounds given XX.X% It's something past. have steady expectation. is in guys like or just the not you lumpiness.

struggle year, of it's up look it XXX say we half first are of If kind this try a Tim, right? we – as points, that, to because So every contrast to time. the at the margins you with basis

You've look year. got to the at

quarter in there's individual way out. a because any flow the numbers lot can't noise the look of at You

eventually it. more I might a times Probably get few

line the Andrew America. Obin of from comes Bank question next Our from of

Andrew of variable on the half? has understand like you're more with EBITDA and the for project Sabrina can is labor Abrams about of taking you're how sort talked But margin talk shortages? mitigate you you the in booked Obin. costs and full do about talk and you I how ramp the can on EBITDA when. margins, of what initiatives to the second the Back sort lumpy kind is higher to about thinking about

Why a jump Allan, swing that, at don't I please in. Sabrina. take

themes a is that most. in mind. of our network. little our QX, think One a primarily faced of impacted the lab to Sabrina, June, that in it July, into couple keep cyberattack bit there's QX, the I primarily June and spillover in There's Enthalpy we impacted

and in $X we we're the of couple over that that the system. impact next certainly the but of anticipate million expect in course there's of so, some to And noise quarters, going It's recoup QX. about

at variable you one a two mind dynamics thousands term macro on We, that's trend that pricing in of quarter. projects nature. are to the So at keep have upon From perspective, of you profile look quarter as thousands short kind in there's as know, play.

For remediation, treatment, very primarily that more a react pricing. time quickly those respond. able are projects, we're longer-term projects oriented, the to It's multi-quarter little to bit more water on it biogas where takes us

like we year and over team, a at talked and labor our how prices. the in the very escalation costs job same with have We are and beginning get were the did our responding gone have of expectations pricing a been sized just can and our candidly, We is margin lot why so nice those, really taking of about gone a up customers prices commensurately it. which receptive conviction to that And the travel, to we'll up to right those, costs They couple respond guard facing. facing we're of caught little have bit have We off next up the the environment offset of unchanged. quarters. those remain we're

Europe a geographic Thinking the priorities? in slowdown for near-term talk your about whether expansion, what follow-up. potential are you bit about little Just macro and your here priorities impacts a can

primarily America. it's expansion, geographic of terms North In

and execute saw in the ability the in scale continuing are to and across broader as with capabilities you in acquisition, building we landscape, US an effectively the to, attractive adding TriAD So select Canada. both here we're geographies, where

our are property Our a pulled European Atlantic. function across getting the efforts, of intellectual technology and Sabrina, our

still unique increasingly And to We're we there. long-term are PFAS because ways set is opportunistic execution from makes the that's we something that's if or why not we're with partnerships on careful that form we which our we really opportunity proving that and something so whether what there, the see. are we out, It's really very to bullish be to ground, And to do. we're be with going remove with on that compelling but have determined, that's water, were out but there, how in of expand the sense.

instructions]. [Operator

next Please Our line go from is ahead. of question Needham from Jim Ricchiuti the Company.

growth Remediation understand and they're area? more there's and there the the seeing driving from us us to bit I'm the PFAS if which the give a at growth any you're wondering way Looking extent help rate contribution segment, way a that that and could Reuse you biogas. little to growth the in that Is to color in on

most of It's Jim. it,

So if all the almost that of side. the year, quarter-on-quarter on is biogas the of of function a we and posted, the having kind we're the it you at success look water numbers

little on anticipate incredibly certainly put – kind the the seeing or lesser to being our extent, bit Jim. greenhouse to and biogas Just if some of will again, be more a please quarterly of don't quarterly the organic this provided context, excess in the this is half benefits my on information This our of narrative a is look that And look gas back well XX% driven at all primarily side. organic, around, year. even practices in by year-on-year. we've this strong. growth organic the it's year year first that then, and of we're to the public you water the just do a course We look at And goes basis, over

just repeat around to more it help some I'll So, this. framework put

to year, XX%. remediation PFAS, across As three all Montrose's our XXXX. testing we than of practices. it This from segments. advisory, And year, materially our starts think it sits across It's less at obviously, XX% represented it approach growing last we revenue and our look

gives sense how much order having. influence you of that So it's magnitude of for an a of

we even if was well. contributor sounds seeing the or as like, think a bigger about first you're that half contribution So QX, to biogas a good growth, the rate, it in from PFAS practice although pretty growth

impact, work. the gas In then it's Yes. the water of biogas, PFAS order greenhouse then treatment,

the of much because projects. to the coming that focused, wonder little And talk normally is you Vijay, as business government if Montrose's alluded revenue some larger more a bit could there. about very from I we think bulk commercial of US you

coming add so, going And potentially and anything is changed area? some incremental that's that to there that's from growth that's

and more just Jim, It about what to be that the has, our US certainly in Defense, little bit It's a favor. of explicit it's Department is.

to in efficacy, both about and have go technology when you we've before, you why cost our contamination. water Jim, relative more where it's have and industry talked It's leans to more complex have advantages, If this you tends favor. back our

contamination let alone it's the short to So chain it. DoD, around uncertainty the because there's – chain, molecules, The measure family to a of Force, the Army with the for as run, often example, issues instances, remove and on of bases, highly know, similar right, groundwater, degree has Force how of water. fair drills potable water they Air some even other how within around you it, long the and complex and a Navy bases, or concerns Air surface

and then Europe private noticed and as private way. adopted a technology where set adopted come really is in complex expected as adopted by technology we're in Jim, sector certainly, real the of sector. starting you with problems seems and seeing different potential we getting where to government. for our it much of Short in was as of US opportunistic and by really the so where treatment multiyear But, the at some little we the don't our us space. started tough you play by municipal adopted circumstances, actually to same happened home to It's resonating, Department government private see a the and our for our sector now similar, it, which technology in water result, increasingly nice get had see we're And really the situation, a what works reasons the is have pulled very a Australia be the Northern agencies government Defense, here

a some going pressures just Last which of to that? cost pricing terms more are labor concern relates pricing outright a business quarters. the where seeing question more appear that of it just kind is of to see shortages, lines you your actions, couple But of the of much in I'm acutely? next and benefit in the you're And how of over curious of

our hourly services, segment in it and we seeing what Analysis Jim. consider primarily would entry-level Measurement our in and staff We're

are biologists our that So teams entry-level field samples tests a lot and go on conduct collect site of to chemists.

concern. is it So, a seeing That's where primarily. it we're

sure in our focused, well. with our But or on material serve first or really where select And and is our kind We making focus is. we increases departures clients. pricing are that, doing foremost, team obviously of offsetting with either costs, efficiency, next is

something anticipated. acutely we're aware it's So we candidly It's something of.

nice we in the team are magnitude quarters. on next those scheme that And the What to can labor we done anticipate over of which face like the roll out, is that. these that didn't those projects why responding have job is incorporated broader our of really costs, into couple conviction has direct non-labor-related side, pricing our we costs the a And increase travel. as so, we get

and the the Thank Manthripragada gentlemen, conference to would to Vijay question-and-answer like we closing you. now the Ladies over have Mr. session. turn end comments. I of reached for

all Thank there's to for further again one. conference Group, now The If the We quarter. all take really we'll to you, and them Environmental all you participation. concluded. for sir. next best support. your you of one care, talk appreciate the Wish any Inc. Operator address Thank Thank happy has time. of you questions, and you Montrose your on we're

You disconnect may now lines. your