- Continued Execution Drove Solid Third Quarter
Results -
- Completed Strategically and Financially
Accretive Acquisitions -
- Strengthened Balance Sheet With Successful
October Equity Offering Reducing Leverage to 0.8x* -
- Increased Guidance for Full Year 2021 -
Montrose Environmental Group, Inc. (the “Company,” “Montrose” or
“MEG”) (NYSE: MEG) today announced results for the third quarter
ended September 30, 2021.
Third Quarter 2021 Highlights
- Total revenue of $132.6 million increased 56.5% compared to the
prior year quarter.
- Net income of $2.2 million compared to a net loss of $30.7
million in the prior year quarter, largely due to higher revenues
and fair value adjustment charges in the prior year.
- Adjusted EBITDA1 of $21.5 million increased 28.6% compared to
the prior year quarter. Adjusted EBITDA margin1 of 16.2%.
- Completed two strategically and financially accretive
transactions in the third quarter.
First Nine Months 2021 Highlights
- Total revenue of $402.6 million increased 83.4% compared to the
prior year period.
- Net loss of $23.9 million compared to a net loss of $58.8
million in the prior year period, primarily due to higher revenues
and lower fair value adjustment charges in the current year versus
the prior year.
- Adjusted EBITDA1 of $59.2 million grew 63.9% compared to the
prior year period. Adjusted EBITDA margin1 of 14.7%.
*
Leverage is calculated under Montrose’s
credit agreement, pro forma for the follow-on offering completed in
October 2021. As of September 30, 2021, without giving effect to
the follow-on offering, Montrose’s leverage ratio under its credit
facility, which includes the impact of acquisition-related
contingent earnout payments that may become payable in cash, was
2.8 times.
(1)
Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP
measures. See the appendix to this release for a discussion of
these measures, including how they are calculated and the reasons
why we believe they provide useful information to investors, and a
reconciliation of Adjusted EBITDA to net income (loss), the most
directly comparable GAAP measure.
“We continue to experience strong performance across our
business which was evident during the third quarter as it has been
in prior quarters,” stated Vijay Manthripragada, Montrose’s Chief
Executive Officer. “Though we are increasing our outlook for 2021
to reflect continued outperformance, we believe it is important to
anchor on our base business including a more normalized CTEH as
that will be the basis for our 2022 outlook. Because Montrose
continues to benefit from broader industry tailwinds and our unique
strategy and position within the environmental industry, our
long-term outlook remains optimistic.”
Mr. Manthripragada continued, “We remain pleased to see the
continued focus on environmental stewardship by investors, by
capital markets, and by our clients, which we expect will drive
additional demand for our environmental solutions in the years
ahead. I am particularly grateful to my team for their continued
efforts as these great results belong to all of them.”
Third Quarter 2021 Results
Total revenue in the third quarter of 2021 increased 56.5% to
$132.6 million compared to $84.7 million in the prior year quarter.
The increase in revenues was primarily driven by organic growth in
our Assessment, Permitting and Response and Remediation and Reuse
segments, partially offset by a decrease in revenues in our
Measurement and Analysis segment. Third quarter revenue growth also
benefited from the acquisitions of MSE Group, LLC (MSE) in January
2021, Vista Analytical Laboratory, Inc. (Vista) in June 2021, and
Environmental Intelligence, LLC (EI) in July 2021.
Net income was $2.2 million, compared to a net loss of $30.7
million in the prior year quarter. The year-over-year change was
primarily attributable to higher revenues in the current year and
fair value adjustment charges in the prior year related to
contingent earn-out obligations and the Series A-2 preferred
stock.
Adjusted EBITDA1 increased to $21.5 million, compared to $16.7
million in the prior year quarter. The increase in Adjusted EBITDA1
was driven by higher revenues. Adjusted EBITDA margin1 declined 350
basis points to 16.2% compared to 19.7% in the prior year quarter,
mainly due to business mix, particularly the lower margin pandemic
response services provided by CTEH, and the planned and expected
normalization of margins in certain business lines following
temporary cost mitigation actions taken at the start of the
COVID-19 pandemic, which have been reversed.
First Nine Months 2021 Results
Total revenue in the first nine months of 2021 increased 83.4%
to $402.6 million compared to $219.5 million in the prior year
period. Excluding discontinued services, which generated no revenue
and $3.8 million in the 2021 and 2020 periods, respectively, total
revenue increased 86.7%. The increase in revenue was driven by a
full nine-month period including the results of CTEH and organic
growth across all three of our segments, as well as the
acquisitions of MSE, Vista, and EI.
Net loss was $23.9 million compared to a net loss of $58.8
million in the prior year period. The year-over-year difference in
net loss primarily reflected higher revenues in the current year
and significantly lower fair value charges related to the Series
A-2 preferred stock.
Adjusted EBITDA1 increased 63.9% to $59.2 million compared to
$36.2 million in the prior year period. The increase in Adjusted
EBITDA1 was due to higher revenues. Adjusted EBITDA margin1
declined 180 basis points to 14.7%, compared to 16.5% in the prior
year mainly due to business mix, public company costs in the
current year that existed during only a portion of the prior year,
and the planned and expected normalization of margins in certain
business lines following the reversal of COVID-19 related
initiatives.
Operating Cash Flow Liquidity and Capital Resources
Cash flow from operating activities for the nine months ended
September 30, 2021 was $13.7 million compared to cash used in
operating activities of $3.9 million in the prior year period. Cash
flow from operations includes payment of contingent consideration
of $15.5 million and $6.4 million in current and prior year
periods, respectively. Excluding acquisition-related contingent
earnout payments, which are not part of day-to-day operations, cash
flow from operating activities was $29.2 million compared to a cash
flow of $2.5 million in the prior year period, an increase of $26.7
million. The period-over-period increase was primarily due to
higher year-to-date earnings before non-cash items and cloud
computing costs of $2.4 million in the prior year. These increases
were partially offset by an increase in working capital of $17.6
million versus the prior year change in working capital. The
increase in working capital in the current year is a result of an
increase in accounts receivable and contract assets of $12.5
million, driven by higher revenues, an increase in prepaid expenses
and other current assets of $1.8 million, and lower accounts
payable and other accrued liabilities of $3.4 million.
At September 30, 2021, Montrose had total debt, before debt
issuance costs, of $212.0 million and $16.0 million of cash. As of
September 30, 2021, Montrose’s leverage ratio under its credit
facility, which includes the impact of acquisition-related
contingent earnout payments that may become payable in cash, was
2.8 times. Pro forma for the follow-on stock issuance in October
2021, Montrose’s leverage ratio was 0.8 times.
In October 2021, Montrose completed a public offering of
2,875,000 shares of its common stock, raising approximately $169.8
million, net of underwriting discounts and commissions. The
proceeds from the offering will be used for general corporate
purposes, including, among other things, funding acquisitions and
business expansion, working capital, capital expenditures such as
investments in research, development and software, or the repayment
of debt. Following the public offering, Montrose had $273.8 million
of liquidity, including $148.8 million of cash and $125 million of
availability on its revolving credit facility.
Recent Acquisitions
In October 2021, Montrose acquired Environmental Chemistry, Inc.
(“ECI”), an environmental laboratory with a focus on Texas and the
US gulf coast region. ECI is part of the Company’s Measurement and
Analysis segment.
In November 2021, Montrose acquired Horizon Water and
Environment, LLC (“Horizon”), an environmental consulting firm.
Horizon deepens Montrose’s water resource knowledge and
relationships in the Western US. Horizon is part of the Company’s
Assessment, Permitting and Response Segment.
Full Year 2021 Outlook
Because demand for environmental services does not follow fiscal
quarter patterns, the Company’s business is best assessed on yearly
results. Given the outperformance of CTEH, continued organic growth
across its segments, and the contribution of completed
acquisitions, the Company now expects full year 2021 Adjusted
EBITDA1 to be in the range of $75 million to $80 million, which is
increased from its prior full year 2021 guidance of $70.0 million
to $75.0 million in Adjusted EBITDA1.
Given the emergency response dynamic and impact of CTEH’s
performance in 2021, the Company expects to initiate 2022 guidance
based off its base business and a more normalized CTEH, taking into
consideration acquisitions completed in 2021 and continued organic
growth acceleration across other business lines.
The Company’s outlook continues to be based on a combination of
high single digit organic growth plus the contribution of completed
acquisitions. The outlook does not include any benefit from future
acquisitions that have not yet been completed.
Webcast and Conference Call
The Company’s senior management will host a webcast and
conference call on Wednesday, November 10, 2021 at 8:30 a.m.
Eastern time to discuss third quarter financial results. Their
prepared remarks will be followed by a question and answer session.
A live webcast of the conference call will be available in the
Investors section of the Montrose website at www.montrose-env.com.
The conference call will also be accessible by dialing
1-855-327-6837 (Domestic) and 1-631-891-4304 (International). For
those who are unable to listen to the live broadcast, an audio
replay of the conference call will be available on the Montrose
website for 30 days.
About Montrose
Montrose is a leading environmental services company focused on
supporting commercial and government organizations as they deal
with the challenges of today, and prepare for what’s coming
tomorrow. With more than 2000 employees across over 70 locations
around the world, Montrose combines deep local knowledge with an
integrated approach to design, engineering, and operations,
enabling the Company to respond effectively and efficiently to the
unique requirements of each project. From comprehensive air
measurement and laboratory services to regulatory compliance,
emergency response, permitting, engineering, and remediation,
Montrose delivers innovative and practical solutions that keep its
clients on top of their immediate needs – and well ahead of the
strategic curve. For more information, visit
www.montrose-env.com.
Forward‐Looking Statements
This press release contains 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 identified by the use of
words such as “intend,” “expect”, and “may”, and other similar
expressions that predict or indicate future events or that are not
statements of historical matters. Forward-looking statements are
based on current information available at the time the statements
are made and on management’s reasonable belief or expectations with
respect to future events, and are subject to risks and
uncertainties, many of which are beyond the Company’s control, that
could cause actual performance or results to differ materially from
the belief or expectations expressed in or suggested by the
forward-looking statements. Further, many of these factors are, and
may continue to be, amplified by the COVID-19 pandemic. Additional
factors or events that could cause actual results to differ may
also emerge from time to time, and it is not possible for the
Company to predict all of them. Forward-looking statements speak
only as of the date on which they are made, and the Company
undertakes no obligation to update any forward-looking statement to
reflect future events, developments or otherwise, except as may be
required by applicable law. Investors are referred to the Company’s
filings with the Securities and Exchange Commission, including its
Annual Report on Form 10-K for the year ended December 31, 2020,
for additional information regarding the risks and uncertainties
that may cause actual results to differ materially from those
expressed in any forward-looking statement.
MONTROSE ENVIRONMENTAL GROUP,
INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS) (In thousands, except per share
data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
REVENUES
$
132,578
$
84,705
$
402,619
$
219,502
COST OF REVENUES (exclusive of
depreciation and amortization shown below)
85,242
51,828
272,662
142,115
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSE
30,499
24,442
82,865
64,810
FAIR VALUE CHANGES IN BUSINESS
ACQUISITIONS CONTINGENT
CONSIDERATION
—
13,404
24,035
17,387
DEPRECIATION AND AMORTIZATION
11,471
9,740
33,145
27,084
INCOME (LOSS) FROM OPERATIONS
5,366
(14,709
)
(10,088
)
(31,894
)
OTHER EXPENSE
Other expense
(516
)
(9,637
)
(1,909
)
(17,534
)
Interest expense—net
(1,722
)
(3,043
)
(11,208
)
(10,896
)
Total other expenses—net
(2,238
)
(12,680
)
(13,117
)
(28,430
)
INCOME (LOSS) BEFORE EXPENSE (BENEFIT)
FROM INCOME TAXES
3,128
(27,389
)
(23,205
)
(60,324
)
INCOME TAX EXPENSE (BENEFIT)
902
3,348
648
(1,563
)
NET INCOME (LOSS)
$
2,226
$
(30,737
)
$
(23,853
)
$
(58,761
)
EQUITY ADJUSTMENT FROM FOREIGN
CURRENCY TRANSLATION
(74
)
80
(17
)
27
COMPREHENSIVE INCOME (LOSS)
2,152
(30,657
)
(23,870
)
(58,734
)
ACCRETION OF REDEEMABLE
SERIES A-1 PREFERRED STOCK
—
(6,542
)
—
(17,601
)
REDEEMABLE SERIES A-1 PREFERRED
STOCK DEEMED DIVIDEND
—
(24,341
)
—
(24,341
)
CONVERTIBLE AND REDEEMABLE
SERIES A-2 PREFERRED STOCK DIVIDEND
(4,100
)
(2,870
)
(12,300
)
(2,870
)
NET LOSS ATTRIBUTABLE TO
COMMON STOCKHOLDERS
(1,874
)
(64,490
)
(36,153
)
(103,573
)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING— BASIC AND DILUTED
26,220
21,554
25,798
13,669
NET LOSS PER SHARE ATTRIBUTABLE
TO
COMMON STOCKHOLDERS—
BASIC AND DILUTED
$
(0.07
)
$
(2.99
)
$
(1.40
)
$
(7.58
)
MONTROSE ENVIRONMENTAL GROUP,
INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION (In thousands, except share data)
September 30,
December 31,
2021
2020
ASSETS
CURRENT ASSETS:
Cash and restricted cash
$
16,006
$
34,881
Accounts receivable—net
66,471
54,102
Contract assets
46,270
38,576
Prepaid and other current assets
9,839
6,709
Total current assets
138,586
134,268
NON-CURRENT ASSETS:
Property and equipment—net
31,078
34,399
Operating lease right-of-use asset—net
23,111
—
Finance lease right-of-use asset—net
7,493
—
Goodwill
304,237
274,667
Other intangible assets—net
160,239
154,854
Other assets
2,874
4,538
TOTAL ASSETS
$
667,618
$
602,726
LIABILITIES, CONVERTIBLE AND REDEEMABLE
SERIES A-2
PREFERRED STOCK AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable and other accrued
liabilities
$
42,373
$
34,877
Accrued payroll and benefits
22,485
21,181
Business acquisitions contingent
consideration, current
31,152
49,902
Current portion of operating lease
liabilities
6,715
—
Current portion of finance lease
liabilities
3,174
—
Current portion of long-term debt
8,750
5,583
Total current liabilities
114,649
111,543
NON-CURRENT LIABILITIES:
Business acquisitions contingent
consideration, long-term
4,200
4,565
Other non-current liabilities
2,446
2,523
Deferred tax liabilities—net
3,059
2,815
Conversion option
22,537
20,886
Operating lease liability—net of current
portion
16,584
—
Finance lease liability—net of current
portion
4,641
—
Long-term debt—net of deferred financing
fees
200,876
170,321
Total liabilities
368,992
312,653
COMMITMENTS AND CONTINGENCIES
CONVERTIBLE AND REDEEMABLE SERIES A-2
PREFERRED STOCK $0.0001
PAR VALUE—
Authorized, issued and outstanding shares:
17,500 at September 30, 2021 and
December 31, 2020; aggregate liquidation
preference of $182.2 million at
September 30, 2021 and December 31,
2020
152,928
152,928
STOCKHOLDERS’ EQUITY:
Common stock, $0.000004 par value;
authorized shares: 190,000,000 at
September 30, 2021 and December 31, 2020;
issued and outstanding shares:
26,525,844 and 24,932,527 at September 30,
2021 and December 31, 2020,
respectively
—
Additional paid-in-capital
291,850
259,427
Accumulated deficit
(146,206
)
(122,353
)
Accumulated other comprehensive income
54
71
Total stockholders’ equity
145,698
137,145
TOTAL LIABILITIES, CONVERTIBLE AND
REDEEMABLE SERIES A-2
PREFERRED STOCK AND STOCKHOLDERS’
EQUITY
$
667,618
$
602,726
MONTROSE ENVIRONMENTAL GROUP,
INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In
thousands)
Nine Months Ended September
30,
2021
2020
OPERATING ACTIVITIES:
Net loss
$
(23,853
)
$
(58,761
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Provision for bad debt
803
6,445
Depreciation and amortization
33,145
27,084
Amortization of right-of-use asset
5,947
—
Stock-based compensation expense
6,587
3,439
Fair value changes in embedded
derivatives
1,651
17,492
Fair value changes in business
acquisitions contingent consideration
24,035
17,387
Deferred income taxes
232
(1,563
)
Other
68
(1,180
)
Debt extinguishment costs
4,052
—
Changes in operating assets and
liabilities—net of acquisitions:
Accounts receivable and contract
assets
(12,503
)
(7,736
)
Prepaid expenses and other current
assets
(1,781
)
(1,349
)
Accounts payable and other accrued
liabilities
(3,422
)
(4,829
)
Accrued payroll and benefits
61
6,084
Payment of contingent consideration and
other
assumed purchase price obligations
(15,549
)
(6,390
)
Change in operating leases
(5,765
)
—
Net cash provided by (used in) operating
activities
13,708
(3,877
)
INVESTING ACTIVITIES:
Purchases of property and equipment
(5,405
)
(5,366
)
Proprietary software development and other
software costs
(241
)
(370
)
Purchase price true ups
(8,562
)
—
Proceeds from net working capital
adjustment
related to acquisitions
—
2,819
Cash paid for acquisitions—net of cash
acquired
(36,480
)
(173,923
)
Net cash used in investing activities
(50,688
)
(176,840
)
FINANCING ACTIVITIES:
Proceeds from line of credit
109,000
104,390
Payments on line of credit
(72,000
)
(201,980
)
Proceeds from term loans
175,000
175,000
Repayment of term loan
(173,905
)
(49,297
)
Payment of contingent consideration and
other purchase price obligations
(9,605
)
(6,004
)
Repayment of finance leases
(1,884
)
(2,257
)
Proceeds from issuance of common stock in
connection with initial public offering, net of issuance costs
—
161,288
Payments of deferred offering costs
—
(2,925
)
Prepayment premium on credit facility
—
(351
)
Debt issuance costs
(2,590
)
(4,866
)
Proceeds from issuance of common stock for
exercised stock options
6,032
171
Issuance of convertible and redeemable
Series A-2 preferred stock and warrant
—
173,664
Redemption of the Series A-1 preferred
stock
—
(131,821
)
Dividend payment to the Series A-2
shareholders
(12,300
)
(2,870
)
Exercise of warrant options
—
25
Net cash provided by financing
activities
17,748
212,167
CHANGE IN CASH, CASH EQUIVALENTS AND
RESTRICTED CASH
(19,232
)
31,450
Foreign exchange impact on cash
balance
357
43
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH:
Beginning of year
34,881
6,884
End of period
$
16,006
$
38,377
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS
INFORMATION:
Cash paid for interest
$
4,649
$
9,368
Cash paid for income tax
$
958
$
171
SUPPLEMENTAL DISCLOSURES OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Series A-1 preferred stock deemed
dividends—net of return from holders
$
—
$
24,341
Series A-1 preferred stock dividend paid
in common shares
$
—
$
26,801
Accrued purchases of property and
equipment
$
1,171
$
486
Property and equipment purchased under
finance leases
$
1,766
$
1,753
Accretion of the redeemable series A-1
preferred stock to redeemable value
$
—
$
17,601
Common stock issued to acquire new
businesses
$
6,020
$
25,000
Acquisitions unpaid contingent
consideration
$
35,352
$
58,912
Offering costs included in accounts
payable and other accrued liabilities
$
389
$
1,237
Acquisitions contingent consideration and
purchase price true ups paid in shares
$
26,084
$
—
Non-GAAP Financial Information
In addition to our results under GAAP, in this release we also
present certain other supplemental financial measures of financial
performance that are not required by, or presented in accordance
with, GAAP, including Adjusted EBITDA and Adjusted EBITDA margin.
We calculate Adjusted EBITDA as net income (loss) before interest
expense, income tax expense (benefit) and depreciation and
amortization, adjusted for the impact of certain other items,
including stock-based compensation expense and acquisition-related
costs, as set forth in greater detail in the table below. Adjusted
EBITDA margin represents Adjusted EBITDA as a percentage of
revenues for a given period.
Adjusted EBITDA and Adjusted EBITDA margin are two of the
primary metrics used by management to evaluate our financial
performance and compare it to that of our peers, evaluate the
effectiveness of our business strategies, make budgeting and
capital allocation decisions and in connection with our executive
incentive compensation. These measures are also frequently used by
analysts, investors and other interested parties to evaluate
companies in our industry. Further, we believe they are helpful in
highlighting trends in our operating results because they allow for
more consistent comparisons of financial performance between
periods by excluding gains and losses that are non-operational in
nature or outside the control of management, as well as items that
may differ significantly depending on long-term strategic decisions
regarding capital structure, the tax jurisdictions in which we
operate and capital investments.
These non-GAAP measures do, however, have certain limitations
and should not be considered as an alternative to net income (loss)
or any other performance measure derived in accordance with GAAP.
Our presentation of Adjusted EBITDA and Adjusted EBITDA margin
should not be construed as an inference that our future results
will be unaffected by unusual or non-recurring items for which we
may make adjustments. In addition, Adjusted EBITDA and Adjusted
EBITDA margin may not be comparable to similarly titled measures
used by other companies in our industry or across different
industries, and other companies may not present these or similar
measures. Management compensates for these limitations by using
these measures as supplemental financial metrics and in conjunction
with our results prepared in accordance with GAAP. We encourage
investors and others to review our financial information in its
entirety, not to rely on any single measure and to view Adjusted
EBITDA and Adjusted EBITDA margin in conjunction with the related
GAAP measures.
Additionally, we have provided estimates regarding Adjusted
EBITDA for 2021. These projections account for estimates of
revenue, operating margins and corporate and other costs. However,
we cannot reconcile our projection of Adjusted EBITDA to net income
(loss), the most directly comparable GAAP measure, without
unreasonable efforts because of the unpredictable or unknown nature
of certain significant items excluded from Adjusted EBITDA and the
resulting difficulty in quantifying the amounts thereof that are
necessary to estimate net income (loss). Specifically, we are
unable to estimate for the future impact of certain items,
including income tax (expense) benefit, stock-based compensation
expense, fair value changes and the accounting for the issuance of
the Series A-2 preferred stock. We expect the variability of these
items could have a significant impact on our reported GAAP
financial results.
Montrose Environmental Group,
Inc. Reconciliation of Net Income (Loss) to Adjusted EBITDA (in
thousands)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
(in thousands)
2021
2020
2021
2020
Net income (loss)
$
2,226
$
(30,737
)
$
(23,853
)
$
(58,761
)
Interest expense
1,722
3,043
11,208
10,896
Income tax expense (benefit)
902
3,348
648
(1,563
)
Depreciation and amortization
11,471
9,740
33,145
27,084
EBITDA
$
16,321
$
(14,606
)
$
21,148
$
(22,344
)
Stock-based compensation (1)
2,365
1,149
6,587
3,439
Start-up losses and investment in new
services (2)
1,186
602
3,276
1,283
Acquisition costs (3)
913
6
1,656
3,767
Fair value changes in financial
instruments (4)
531
9,710
1,651
17,492
Expenses related to financing transactions
(5)
—
—
50
277
Fair value changes in business
acquisitions
contingent consideration (6)
—
13,404
24,035
17,387
Short term purchase accounting fair value
adjustment
to deferred revenue (7)
—
—
—
243
IPO expense (8)
—
6,378
—
6,908
Discontinued service lines and closing of
Berkley
lab (9)
—
30
—
7,526
Other losses and expenses(10)
171
33
846
179
Adjusted EBITDA
$
21,487
$
16,706
$
59,249
$
36,157
(1)
Represents non-cash stock-based
compensation expenses related to option awards issued to employees
and restricted stock grants issued to directors.
(2)
Represent start-up losses related to
losses incurred on (i) the expansion of lab testing methods and lab
capacity, including into new geographies, (ii) expansion of our
Remediation and Consulting services and (iii) expansion into Europe
in advance of projects driven by new regulations.
(3)
Includes financial and tax diligence,
consulting, legal, valuation, accounting and travel costs and
acquisition-related incentives related to our acquisition
activity.
(4)
Amounts relate to the change in fair value
of the embedded derivatives and warrant option attached to the
Series A-1 preferred stock and the Series A-2 preferred stock.
(5)
Amounts represent non-capitalizable
expenses associated with refinancing and amending our debt
facilities.
(6)
Reflects the difference between the
expected settlement value of acquisition related earn-out payments
at the time of the closing of acquisitions and the expected (or
actual) value of earn-outs at the end of the relevant period.
(7)
Purchase accounting fair value adjustment
to deferred revenue represents the impact of the fair value
adjustment to the carrying value of deferred revenue as of the date
of acquisition of ECT2.
(8)
Represents expenses incurred by us to
prepare for our initial public offering, as well as costs from
IPO-related bonuses.
(9)
Represents losses from the Discontinued
Service Lines and the Berkeley lab.
(10)
Represents non-operational charges
incurred as a result of lease abandonments and non-capitalizable
costs related to the implementation of a new ERP and net of
insurance gains.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211109006558/en/
Investor Relations: Rodny Nacier (949) 988-3383
ir@montrose-env.com Media Relations: Doug Donsky (646) 361-1427
Montrose@icrinc.com
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