Montrose Environmental (MEG) 29 Feb 242023 Q4 Earnings call transcript

Good day, and welcome to Montrose Environmental Group Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded.I would now like to turn the conference over to Rodny Nacier from Investor Relations. Please go ahead.

Thank you, operator. Welcome to our fourth quarter and full year '23 earnings call.

referring call and Manthripragada, Officer.During the Allan today, will the Chief President our Investors on presentation, we Officer; earnings website. Executive Dicks, be section me of are available our Vijay and discussion which our Joining is our on to Chief Financial

uncertainties most the measures I limitations comparable our of measures on these Vijay, that, and safe most should is that X. in Private consolidated call fiscal will income be the Slide certain useful share. principal obligation financial will forward-looking any results well report of we non-GAAP the forward-looking why on XX, presentation discussing our and website.Moving Slide EBITDA, providing operating using we to statements the are comparable to annual X. harbor today, forward-looking identify not considered you everyone isolation these statements.In reconciliation measure.With non-GAAP year our We measures. XXXX, non-GAAP Form directly as provide now Act Our the appendix earnings thereof We Actual performance. unknown due and GAAP the which GAAP discussion remind filings, today's release evaluating performance would to risks purposes, net outlook.We certain adjusted subject investors, including believe the they financial earnings We a for turn to considered informational beginning XX-K will that the their the to could to are release or ended a including adjusted provisions and should on call also or and available adjusted that Reform net measures directly per Please XXXX. for earnings affect Litigation be to like statements December to way assume Securities future see addition, and material no include the any update income that known from to to be of risks differ may in for results refer our uncertainties and these as in SEC of

cash an annual on our quarterly Thank on Rodney, revenue, to you today. will joining well.In We we environmental environmental financial with updated presentation I is implementing will website.Before an on solutions. highlights, another globe. financial as manage adjusted business I around results will annual patterns. recommend our business speak business take begin, earnings dedicated the colleagues like reemphasize record is results another you provide EBITDA of all also Allan to the that of our basis, efforts us like terms our to generally was by Their you highlights. driven not Montrose. and typically business highlights, thank I and demand our I I how and with is and that solutions year view year for basis, over stellar XXXX up Q&A. we to our you it shared then you, of would best-in-class will best welcome provide given flow a and by for assessed moment to would X,XXX open to drove

key the Our performance year. was last driven touched by themes we on

grew and revenue revenue continue our record by and planned, we predictability margins increased record XX%. EBITDA. levels.Second, by grew and and EBITDA consolidated full year flow was Adjusted First, thrilled EBITDA increase. to were consistency revenue our to adjusted adjusted also XX% produce cash Total at as

Our XX% with in retention year. revenue from rate continues customers last XXXX

or clients was our year. up XXXX from with Montrose cross-selling coming revenues a saw X utilizing last substantially also over which We in more of from consistent services, increase XX%

effect, In portfolio last few enable IP our the from that nicely.A model. Our starting over spin large seen our portion our years to business model been growth the is integrated we've of which enhances organic our has and flywheel cross-selling, really cross-selling further services.

this segment confidence growth growing XX% continue within segment. beyond.Third, level revenue XX% in in XXXX saw organic and of revenue business our to our we in M&A and organically So gives integrated us growth our activity AP&R organic

revenue segments M&A partially our Our higher double-digit particularly finer results. strong our by growth manifested not the to organic due has With for performance services growth PFAS reiterate growth proposed and the slowdown organic for in impacted work thesis, double-digit have organic to shift for outlook we for offset testing.Fourth, emissions a navigate biogas adjusted also organic AP&R that revenue year the averaged of in that that expected services. segment. point decline time originally in the that field to our total shift temporary QX positive last day. EPA year, years, proposed growth in X higher despite our a now lower-margin EPA services, XXXX in organic expects demand thesis as assumes produced within is in clients This the due put these per R&R our R&R primarily lines low all considered, To EBITDA revenue any methane U.S. XXXX PFAS growth.Our work to growth organic XXXX. finalize changed strategic segments shift itself project was in and in focus the our we by our our advisory was was a and Growth and our our want away and segment margin on and XX% in our our from growth lab regulation organic X%.I on caused full XXXX

of basis Matrix EBITDA Montrose. EBITDA revenue adjusted a despite approximately Matrix. XX full year prior of X.X% acquisition adjusted $XX million increased to at margin the joining had margin points consolidated Our

EBITDA improvement We expect a continuation of adjusted in margin XXXX.

stewardship. end activity in we as standards, organic expect disposal on our detection clients' aspects margins.Fifth, driven to regulations witnessing acquisitions anticipated X% but our disclosures this outperform are depending cadence affecting and higher our regulatory PFAS we to experiencing not our methane leak in core expect significant environmental protocols, X% all markets historical only emission voluntary and From year, strategy. are new it rules our air we of as by tightened So new to with do well regulations we growth tailwinds business.Sixth, remain climate across on and focus to changes growing

Our M&A expansion. customers our investments in have and additive technologies very ability service geographic to to been new through

for are cross-selling With cost on Matrix, to and In on materially. through pricing addition tremendous one to accretion.Furthermore, synergies rate starting particular, and which have serviceable opportunities. we doubled platform see continued support unlocking With margins basis, we had almost larger because now margin from We we the strategic robust margins deals, and Matrix believe value synergy, we're hands functions. have we X.X%, larger in X we expect acquisitions a have run addressable in already our our scale closed and the XXXX. capabilities, run in grown market of cross-selling

to and submitted create so our And would to XXXX, new we And closed We in efforts, opportunities major of highlight for business. like solve we which the that and challenges will and far we we've value. are year, patent our which to differentiate unique of our this applications in proud is a particularly pipeline acquisition continue new believe while.I X. environmental than X create services our aims more also seen robust R&D success

to by Montrose, business, saw making CTEH business. discuss our and means organic needs from response of fractionation next-generation emergency year discuss our and exclusively many of leachate in of flow collaboration at are unique separately demand requested purchased generating provided quality and industrial it of are related are of opportunities mining leaders from request organic more on in us the which PFAS And have CTEH for the response ability our emissions more in What like environmental Furthermore, in of our which we and and of solutions. revenue expanded XXXX impact wastewater and bioreactors XXXX full sensors disadvantaged growth investing The monitoring the quality the as from real-time solutions was what GHG our compared performance. a We of their solutions.Our is discuss year. our communities helping services balance in in pleased more segment, cash conceptual. measurements data-driven quarter-to-quarter. of million, operating the operations Response to software. CTEH they and flow XXXX exclude historical from to continue the clients. manifesting M&A consultative record forecast metals ample seeing the and full we less clients our I between disclosed using shareholder EPA's traditional the $XX home now R&D. would more the increased clients include and investments and effectively cash in will and also on is nice than Permitting water, expanded generation EBITDA gas segment. now for we're to nice separately, proprietary air this and to communities typical strong enabled rest with revenues proportionately unique example, year, advisory response of emergency cash we organic the revenues and like and prior When strong performance of we CTEH, part performance are have our the you, address value.Finally, are our focus our treatment seeing really generate our more our challenges.We've greenhouse to is For shareholders.I difficult segment, with strong revenue year landfill Assessment, remove sheet flexibility our increase see almost by to and investments response our to were attractive cross-sell.We many to the for we than us double a already has is They Within and bolstered also calculation also quality already assured and helping for already it continue flow, Montrose.Before R&D by I form selenium a

from our We also acquisitions. positive contributions saw

margins.Within we strong on the continue projects Our environmental to the in outlook continued run, bullish expect strong from run segment, organic high-profile in were historical XXXX. XX% EBITDA by in also rate Measurement remain the this services increase revenue. XX% emergency continued increase growth. run to response several given The and And to long perform response growth response advisory Analysis segment in in organic We XXXX that we and for this driven and experience segment to continued environmental earlier revenue for business above revenue at our levels emergency margins our to beyond.

especially quality are and services, our lab in services. with testing our air positive performance strength We greenhouse pleased with particular across the and testing gas field

from remain that continued acquisition, which we margin was to ECTX our with opportunities performance primarily with our sensor given our coupled was revenues primarily about we Reuse for the projects should to on XX% expected for at reduced the which segment, We we to segment, times growth acquisition. networks, a impacted at revenues, continue focused margins shift towards also in and ]. added Act. updates term.Next, segment this offset back constituents are lower industry our of corrective for incremental and leak to our demand due requiring biogas to finalized with prospects for business software XXXX. which business. increased shift This long-term creating Analysis XXXX. In for in [ range.Finally, revenue our Margins discuss regulation in PFAS and assessment of growth Montrose.With segment under in the a pursue U.S. planned our vents PFAS a was such Resource to and were emissions, support in ECTX's XX% December X.X% R&R and are industries, detection, biogas creating footprint segment was hazardous will total, regulatory making our authority in XXXX. our permitted long rule releases services in in X prior and methane the with addition, is along opportunities from biogas projects emerging water delays Matrix enhance measurement, and our steady to Matrix improvements Matrix methane facilities of This faster facilitate turnaround the of remained services.The at and Annual this EPA to driven organic by locations impact that XX% contaminants to ECTX expect were profile and and are The be monitoring This for and add wide business upbeat margins differentiated our our I EPA's year Margins were U.S. outlook. EPA XX% rule recent leaks long-term the growth significantly geographic segment and regulate already of new mature waste PFAS from aims XXXX. EPA's were in to trends list remains regulations within variety margin in recently by Measurement our all Conservation to of as least methane to the during PFAS in support new higher-margin acquisition actions to operationally give and the new PFAS, regards over also run our flares, reduce and solutions. given lower clients.In emissions in our the the substantive by the expectation will delays Remediation Recovery

demand environmental and immense our the our and business it for dedication. incredibly investments consulting sensor in team their the bring We the I in anticipate its these I entire for investments our clients, activities. campaign they which services.In over software environmental Montrose testing value will this continue these and justice in our for EPA to summary, create demand is XXXX our advisory for to before strong continues to services, regulations.Regarding Allan, for making, remain our early in record and enforcement work again technologies to for and results. acknowledge rule would increased permitting tailwinds turn given prioritize drive like networks reflected Our optical hard grateful I to early imaging

differentiated in nature is of and look Thank throughout business Allan our Allan. business growth upbeat our we model, touch to our progress outlook the strength expansion XXXX for terms updating I our function and forward Our of and revenue of EBITDA you you. XXXX on that, margin a technologies services. shortly, and will the hand guidance year.With on over will the to it of

Thanks, Vijay.

execution, fourth Slide our success.Moving with cross-selling pleased and revenue happy retention additive relationships, our see service our the strong record to of in on strong our drove to and expanding year most of driven performance continued full are customer another quarter year M&A were by our growth performance strong which organic revenue highly and We XX. track XXXX. during We XXXX, solid activity across of lines

growth year growth compared to million an to Our clarity increased million. the response we project year were revenues contributions both in XX.X% revenues.This M&A year double-digit revenues primary and emergency fourth was increase time revenue positive offset versus lines strong XX.X% partially up in including prior PFAS organic of and Matrix, quarter $XXX.X our await periods environmental from prior to Full clients $XXX.X in our segment, the the by The quarter. was AP&R regulations. driver segments R&R on in where experienced as delays acquisitions,

lower biogas margin, We also our shift discussed. in to a revenue strategic business as services, executed on higher focus Vijay

million or to full EPS to to an discontinued adjusted in expense compares full at EBITDA of the margin was quarter quarter $XX.X and the Excluding adjusted Matrix revenue Slide adjusted million as Fourth adjusted EBITDA well of increased up to $XXX.X in or This the revenue included in and EBITDA up the June was share from consolidated lower adjusted was revenue, consolidated income year.Looking of incentive the EBITDA or removal year consolidated revenue revenue. XX.X% adjusted EBITDA our the as in performance from XX.X% XX.X% the on was Roughly by businesses, to compared $X.X the diluted XX.X% EBITDA $XX.X or million driven million consolidated remainder for specialty lab, of for half consolidated adjusted unfavorable $XX.X discontinued included of improvement XX. specialty fourth of consolidated XXXX lab, the million XX.X% year. low in prior year. with QX year.Full and adjusted mix million to higher revenue XX. margins that Adjusted $XX.X year XX.X%, that discontinued the significantly lower specialty a discontinued gain EBITDA following comp Slide XX.X% earlier EBITDA prior of prior review interruption discontinued related adjusted the $X.X XXXX.Excluding insurance million to includes seasonally per XXXX of year of driven cyberattack a increased EBITDA specialty primarily QX quarter was business the the due Prior revenues. by acquired lab.Moving consolidated impacted QX lab, which lab net in the Prior on year. from million $XXX.X

from was share share income per divided Please We our per on diluted For recent diluted believe of the XX. reported M&A increase income was to Permitting segment, using XX.X% and, of primarily XXXX. EBITDA revenue adjusted calculated this double-digit extent, discontinued our is business of the the The share lesser net Measurement the adjusted $X.XX, margins segment, shares. by investors.Turning businesses from on equity to mainly growth, the adjusted lab. growth XX% stronger year, for $XX.X I'll quarter flat adjusted we a positive to responses higher segments aggregate revenue growth, diluted contributions increase and driven XX.X% adjusted mix to adjusted quarter million. Montrose primarily our EBITDA by million metric reflecting year-over-year benefits income revenues offset to increased from prior benefits income quarter. organic extent, net year-over-year. in of dollars. to net XX.X% focus and adjusted and diluted $X.X per net organic Response an year-over-year organic increased stockholders net year-over-year acquisitions, in higher per net within environmental segment increased fully income common share revenue the up is from revenues XX.X% The emergency in a million, attributable acquisitions.AP&R fourth to revenues by from helpful note, and comments to by segment.In most increase to to of compared attributable diluted across year, our the EBITDA our Slide and, favorable In Analysis other or and lower adjusted income to segment XX.X% most Assessment, specialty the my $X.XX growth partially the lesser driven was $XX revenue,

acquisition revenue in XX.X% lab, and and specialty driven or in revenues margin, however, year M&A growth.In organic Matrix, treatment $X.X in The offset certain the Metrix. anticipated partially margin, year. decrease revenue excluding EBITDA to to from was the quarter The primarily adjusted lab, dilutive in our to discontinued adjusted $XX.X treatment the $X.X XX.X% compared Remediation adjusted in prior lower impact Excluding lower margin segment of EBITDA projects. revenues was the R&R in business million, XX.X% EBITDA revenue current increased water million of water due to recent segment and biogas by the adjusted large was or pivot on and of the our increase higher to million focus decline specialty segment, revenues due the fourth Reuse EBITDA by discontinued the projects

adjusted the of cash build operating Full to our noncash flow the million current flow, which cash from increase on XX. and flow $X.X are our cash million, was working earlier X% XX% of to in a in estimated of million the and impact increased cash at $XX.X in strong capital XXXX, at run in of continue a million flow optimization position capital acquisition-related of leverage for conversion the payable we CapEx obligations available tragic prior with the of X.Xx XX% $XX income. prior the review net capital million. In before step produced i.e., Slide accident redeemed million margin XXXX.Moving items.For of The flow voluntarily end expenditures cash operating the a to year. expected operations, million year-over-year consideration stock. $XX.X includes from the free net approximately contingent on in Our efforts we less in increase driven of over simplifying year $XX Cash roughly activities cash of structure ratio around paid a cash million the of included CapEx annually million of that by We year, year In of preferred outstanding acquisition-related year, associated $XX.X $XX.X margin achieve track year, approximately our earn-out is proactive we sales, higher $XX business flow, to of million accounting of represented a Matrix revenues.Our adjusted and earnings $XX.X year. $X.X adjusted capital of the maintenance and at payment well in flow contingent proceeds operating savings lost January remainder of dividend operating represent the the million. cash replace EBITDA included This to healthy the the towards an for cash. by the structure. a double-digit XXXX, $XXX net year from asset ended a Ongoing ratio for liquidity plane a to are and of EBITDA representing lower

$XXX our on our Based in outlook to introducing the beyond.Moving our to to revolver to time date, Following convertible this are million.As cash million. stock have Series our preferred year and ample redemption, continue we stock capacity balance at no the reminder, the principal outstanding robust our balance million us a redeem to position preferred XX. preferred maturity of to to full for momentum business $XXX.X to we creation liquidity reduced position AX XXXX and option shares any the was has but of our business, in the the million our range on on redeemable additional in and million.Overall, in solid puts term positive operating be other cash of our believe In February, to facility facility. our increased we $XXX was credit revenues pre-existing a free the increase good $XX loan the $XXX sheet, Slide available for $XXX the and adding as expectation $XXX outlook continued of value to XXXX and added upsized to million our drive terms in full we million, generation $XX liquidity million flow same year our cash.

range adjusted $XX consolidated the million $XX expect to to million. EBITDA in We of be

adjusted and given EBITDA double-digit low consolidated the anticipate the cross-selling represents and over momentum. expansion end outlook growth organic demand for visibility in full revenue strong margin current into revenue and the prior our market year year.We growth Our double digits,

Our includes $XX expectation XXXX. emergency to million million an to revenues of compared in the outlook $XX $XX response also in range be environmental to for million

adjusted flow the activities into anticipate of will the year we from XXXX, the margins consistent long-term cash consolidated adjusted XX%, the target.As as distribution the of operating remain revenue timing of we excess conversion of EBITDA the in annual and for our through about of Additionally, think we change and full responses EBITDA will the year. in environmental addition and growth Matrix in our the revenue year prior of move patterns with

provide expect as wanted color topic a more year-over-year bit we So to be in on quarter up the XXXX. each revenues of to follows.We

be the up and second, higher third margins in fourth margins for first quarter in resulting down We quarters, and full expect in year. will the the

QX For the mid-teens up to to first be revenues compared quarter, we XXXX. anticipate

the to compared which expect we AP&R Therefore, R&R year-over-year, up period. down QX year, seasonality, QX third mega in is X there in to anticipate but XXXX.In to year prior recur not margins along expected be EBITDA quarter period, project with a primary another total consolidated our terms adjusted mix, as seasonality mostly of XXX year-over-year points emergency margins the margin In in for our and within seasonally all a we AP&R we and the are which revenue up had low was prior from to summary, follow difference first quarters similar sequentially the notable high-margin prior factor segment, quarters.In in be fourth not in Montrose. second, XXXX up response to our in was year is year revenue quarter R&R XXXX. comparable year-over-year milestone Matrix, revenues segments.In will basis occurring first While the XX segment,

our strong we another share.Thank adjusted the substantive your record per to performance quarter.Operator, forward the income net in opportunities generation, flow open today cash cash see you continued questions. are are interest the us ready of demand, in and adjusted we we revenue, joining in tailwinds year we for positioned Montrose. to EBITDA, momentum and for all and believe next regulatory look lines diluted to flow on you ahead We and updating well strong With realize to progress

[Operator Jim question Instructions] & Ricchiuti from Needham comes from The first Company.

go answer, And cross-selling gauging to the this metrics you are wanted some but of the cross-selling And to the cross-selling other in cross-selling you EBITDA? it's impact may of with to adjusted early Matrix on be of and tougher with that a seeing any follow-up, success way of to Or is, more related is you're the that a respect the story? XXXX this is there are to I guys business? having providing. question any Canada

have kind our can ahead we -- under of years, consistently that organic, having of of now of service. in one us targeted this XX% our kind to few purchasing you on What's the material margins having clients if metric That's next job. of were And ticking than the our EBITDA over is predictability. short IPO, more answer teams a impacts back is, absolutely you beautiful our you and it and kind If go our up.We to impact on exceptional on about story getting presentation, for We've the is that hit XX% an done on as see been investor multiple metric, plan. has business. the that

lift we're predictability now that of because impacts gone really lifted year historical how large revenue, up of to we're about we at other in nature materially part because kind If saw of look of is last that it's cross-selling part XXXX efforts.The our that to cadence lift has the the consistency, which the margin happy is in that margin and in is kind then well. of that teens, X% and part you and large now that the anticipating these of organic And cross-selling the growth from kind as efforts. our X% recurring of overall

And it's for fraction environmental XX% this more -- that, now of we're our of existing those us other think point, is a worth service. narratives overall the is that than I is clients And really, one noting that's buying clients. of of we're so still kind one we are Jim, spend that excited the -- about.And really

opportunity customer share And share there's the for our within material base. penetrating a wallet so still existing or to the continue market us

think we for so this And trend for will continue a us while.

AP&R of just in the let M&A our This where me Allan. It's itself is primarily Jim, majority segments clients are. add. and our manifesting

If was growth in organic XX% XX% M&A. you AP&R and look in at,

industry And at of above up are if look in you both segments. margins, well So growth margins those nicely rates.

So numbers. it's in absolutely the manifesting itself

respect with to just then Matrix. And

has to is Clearly, going? First, how this the cross-selling we that have margins assume take there. something begun integration place year? plans is some to there? And expand Or should

a It going -- Jim. point in rate We hands -- acquisition. is on basis, integration from our doubled the almost margins have run the well, is of

are we that's So happy the with way progressing. really

are organization, year.And we plan fully year to we so manifest to to mid-teens more focus. it the -- little get the it expect main ahead in certainly of our and end has expect our kind That's and started, certainly big already of of by this yes, is and this bit been a And commercial focus of cross-selling a it has 'XX.

I'll question, back queue. the then And in jump last

XXXX? should milestones Just from an be R&D standpoint, that in are for there any looking we out key

could patents of example, ago, we of past, talked emissions We starting for with with years the in our what We investments you, spend organic out. unique that of made We we've that need existing some both some our is into successes filed be phase to Each through to about footprint X, think success methane front. consider early of also X incredible multiple treatment we're engine X the material, some obviously, opening Jim, time we're based anything Jim. provide PFAS, similarly opportunities. years specific XXXX, sized for to the growth and up market for as this X on all for will believe development with year.But because sizable walking this with drivers for the I more would right, in expanding new PFAS emerging moved some monitoring, calling on other Montrose X a commercialization, side not opportunities of and get or it's and contaminants contaminants, we like these R&D these on the about now but

The from next question Mulrooney Tim William comes from Blair.

my here. guidance spite headwind organic, question off and impact clarification you disaster this expected response low in both Or response revenue? disaster the in say double-digit to are growth you you organic the revenues? the is for say changes lower that a Just When from excluding start acquisitions from is, of when question year,

both, It's Tim. Yes.

So been it's, doing XX%, to and excluding we've is excluding call it, XX% always with acquisitions. response, the consistent which what

it. Got

really up expect core to So you you your digit. growth -- Understood. core be business growth, say double organic organic

more before got this okay, reason your what detail of And for biogas obviously I a so Remediation looking healthy. year headwind little you Could so expectations still a organic X we on ask, that's Vijay, that a on which business, is or Reuse a provide maybe moving and have segment basis?The lot specifically We've very I are, pieces this -- that into another here. turns of know has quarter an tailwind.

got You've PFAS, is regs. still which these on waiting

side. Matrix and You the inorganic Epic on got

on that us give core other color predicated what's organic? you can in for your any guide just So

question, a Tim. it's Yes, great

So and expect growth a back segment Reuse year. the kind this healthy we do to of organic Remediation to get

mid- they'll XX% year. our of last opportunity double we our fire, to kind that, earlier, this XX% of mid-high segment to regulatory couple year. them And in to for double-digit healthy digits long-term Remediation opportunity. on kind alluded so you back favorable, that that If of delayed, upside upside into the gets going been with organic, is [ points. for going low this nice again and segment more segment it we've Reuse AP&R Obviously, baked we're assuming M&A think predicated then year. this answer expectation comes our a this be and be evolves. kind environment estimates, core of how Same in could the at to year. that Does last the expect assumptions swing We if think more to question? as organic We it of a Tim, year. ] be certainly single-digit elevated your break has down on there's cadence.Some But Allan that right, organic If business, our

and answers And could upon it say you... that you about kind of you MCLs thing? specifically regulatory, my if guess, question. I Yes, so, speaking when of CERCLA completely are and kind dependent

organic of, We to PFAS lot the to QX, And on that part to about of 'XX a QX is of going that, cadence was Tim, part 'XX growth back it, QX, expect they're in a nice, look some on water that at and off kind year. of predicated it's ECTX, especially regulatory versus some 'XX side triple-digit organic of do Yes, the be right? obviously, So if healthy biogas this of kind of we big down XX%-ish. clarity. coming see business, of you think our a the because of at end

of next question from Andrew from The Obin Bank comes America.

Just is David Andrew for -- on this Obin. Ridley-Lane

PFAS. clients client Just I color, a funnel of waiting to last see on sort the you're final follow-up or having? the understand on discussions the of Any of sort on though, question. regs are breadth that that

are I David, has mean, the -- materially. Yes. funnel as we expanded

expectation be limits number and test the there And measure now to as has a they best how covered how promulgated, to is on the that attention treatment that is methods low and as are of the lot to think this on I are are the the being now been expected that of rules molecules treat. substantive.

of in a and landfill you largest on the that's related are, a already largest we've that working regulations. working the PFAS built building treatment of We lot of and even industrial are some activity function the know, facilities facilities by world.We're clients side. of the largest of PFAS on We're And of some the these on PFAS outside some the to seeing as leachate treatment our waste anticipatory space.

seen exactly a wave challenge real seen activity activity predicting is real we've Europe. globe, the breaks. uptick us and The in crests when We've the here. uptick across a so for in And in

can a far acquisitions bit I do then with the more this scale? and X so on Dot? How strategy color relative guess your get Two And we Epic and they fit little year,

technology team. within with incredible We market. brand -- brings that and the so credibility of presence kind team knowledge in incredible it overall and an environmental opportunities other also lot evolving offer the gives ways very a are potential our about visibility broader expertise we is their to complementary of These market access of Australia. terms how Australian Epic is They to think love efforts. services regulations experts in Yes. for the as that to team's are Montrose us and an Australian of And for X One, reasons. into treatment

I that's and in going in be, area. in got They've Rocky Mountain need for And It's the exceptional that's, market footprint, -- are energy Mountain the we more in, that's So the consultancy given team this continue environmental it's at been which area our as expertise look Rocky to doing -- opportunity in the us, believe, of underrepresented we Montrose an an then space Two region. a geography to year.And you renewable energy to David. there. the Dot is an addition kind

So always focus. been a that's

continue us an and to that see out You'll also incredible build team. exceptional and

So these. of we're both really excited about

management, you relationships that more, you And multiple greater step next you one that to relationships of and is also great perhaps senior deeper to -- and one. right, that total would starting levels you at are of it, client the it's winning but for winning more of service holistic winning last and basis? and firm-wide higher kind access that mentioned company? to quick develop taking have are wallet In more words, lines, other have as are you Since you're that a share spanning kind take enable that basis

and a these effort of solve growing and expanding credentialed And space can was challenges.This us as area of expand that obviously CEOs, that our look, to highly view kind at we large and mean, needs inception was of really what has in was experienced a gives part space, our an if David, within are deeply on Counsels, the nicely. have can we concept, I uniquely the go precisely you to CFOs are, is at integrated our a That to, of General positioned bird's local our ways which level, if were heads is across point, then David, advisory I underrepresented that, our Yes. -- relationship help environmental on thesis and the top-tier Yes. the the to is understand what of the and part different are our can services alluding clients' to those part IPO portfolio. around business. experts even or we we flywheel really the the been advising we're relatively to environmental. And focus we which for this because back needs eye address our executive level

advisory expanding yes, the are we we in really why nice are there. exactly seeing success side. that's So And

Brian from comes from Stifel. question next The Instructions] [Operator Butler

on path what side? I'll this revolver with left, capacity like I start are maybe as M&A well. then the at and does the What's maybe market talk out I the we about the guess on just the some look in expanded taking areas Can just what guess, And preferred? point? color capacity the on attractive

Yes, let take that. me

was end million at our time So the 'XX, we of was revolver, at $XXX the unused. which --

us the acquire and the $XX $XXX available loan to to pay first going million of preferred fully million $XX added for then continue gave rest is additional and to we've invest. tranche is term the which million down million So us and of that the to capacity, $XX of

conversion, the you give guess, you flow the talked And about, can side we're flow me remind expecting can on cash just conversion Okay. when where cash I and you in -- XXXX?

we business cash our said of to And last a XX% strong We core Yes. days our we're that was this, this flow that couple that to years, think proud about year, generation. The the capital. working cash to adjusted of range. is that to convert that's And we've north XX% don't likely ability lot XX% What into expect team's contributor organic of be of X expected.So certainly particularly end higher operating a in target, on XX% manage talk been dropped XX%. to historically us of DSOs I'm we've EBITDA the towards flow. the but

as still where a conversion you be The ago. business. our very is had revenues. Yes. above healthy X% to capital-light a very certainly and maintenance few expected to years And know, So X.X% around we always of harbors business CapEx, is

good as been, investing is cash as ever how strong has to given been. it's so flow And ability our continue

by a really maybe of one. in everyone just else like in kind of ones. and bunch when we anything focused segment don't XXXX, be Okay. But anything And -- be on? think I the there should then about that it Can you the aware touched last up? maybe we've you wrap make kind there miss in know of of just R&R? that on kind sure comparisons Is of one that should any are headwind quarters we different tough just

Yes.

question. -- we As it's great a think

profile the about on color think remarks QX. year, prepared in additional of we the As we gave the

So And months an QX response year, toughest typically if significantly comparables The prior to that was rest similar higher quarters, have margin that in you'll June over X But so again, similar every pattern, because a then of QX you'll large of in is QX And the XXXX, as of the the basis, 'XX. X year. in year. in be those similar and up across emergency acquired will the margins prior seasonality more are a across EBITDA the follow year. you on follow QX. continue. look mainly year we see although to has see going similar seasonal X, the revenue quarter the QX, profile.And that Matrix will X expect will of QX

be will So be margins up, and year-on-year. will similar be in revenue every quarter, to seasonal fairly we profile up the on

on good Congratulations quarter. a

turn remarks. I to question-and-answer our like CEO, conference session. Vijay back the over for closing Manthripragada, concludes would the This any to

Thank really morning. and care. Talk dialogue thank you for you, year, We're we're year joining of and forward unfolds. this about you and the excited with you to as to take soon continued all looking us the

attending Thank for conference concluded. now you has presentation. This today's

may disconnect. You now