EX-99.2 3 ea146040ex99-2_atlastech.htm ATLAS TECHNICAL CONSULTANTS, INC. INVESTOR PRESENTATION - SECOND QUARTER 2021 EARNINGS PRESENTATION

Exhibit 99.2

  

SECOND QUARTER 2021 EARNINGS PRESENTAT I ON A u gust 16 , 2 0 21

 

 

The statements contained in this presentation that are not purely historical are forward - looking statements and involve a number of risks and uncertainties. Our forward - looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. The information included in this presentation in relation to Atlas has been provided by Atlas and its management team, and forward - looking statements include statements relating to Atlas’ management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward - looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and variations of such words and similar expressions may identify forward - looking statements, but the absence of these words does not mean that a statement is not forward - looking. The forward - looking statements contained in this presentation are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward - looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward - looking statements. These risks and uncertainties include, but are not limited to: (1) the ability to maintain the listing of the Company’s shares of Class A common stock on Nasdaq; (2) the ability to recognize the anticipated benefits of the business combination or acquisitions, which may be affected by, among other things, competition, the ability of the Company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain management and key employees; (3) costs related to acquisitions; (4) changes in applicable laws or regulations; (5) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors, including as a result of COVID - 19; and (6) other risks and uncertainties indicated from time to time in the Company’s filings with the U.S. Securities and Exchange Commission, including those under “Risk Factors” therein. Given these risks and uncertainties, you are cautioned not to place undue reliance on any forward - looking statements, which speak only as of the date of this presentation . Except as otherwise required by applicable law, we disclaim any duty to update any forward - looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this presentation . 2 FORWARD LOOKING STATEMENTS

 

 

AGENDA B u sin ess O v e r v iew L. Joe Boyer Chief E x ecu t ive Of f icer F i n a n c i a l O v e r v iew & Outlook David Quinn Chief F i nan cial Of f icer 3

 

 

E SS E N T IAL P R O V I D E R OF M I S S I O N C R I T I CAL S E R V I C E S Q 2 2 0 2 1 H E A D L I NE S R e v e n u e a n d M a r g i n G rowth P o s i tion e d t o Benefit from S t r ong M a r k et Tailwinds Outlook Supported by R e c o rd B a c k log a n d Ne w A w a r d s Atlas has provided certified welding inspection, concrete and soil testing, storm water sampling, and health and safety services over the past two years. Atlas will also perform quality inspection services for the compound. S O U T H D A KOT A S A N FORD U N D ERGR OU N D R E S E AR CH C O M P O U N D’S L O N G - BA SEL I N E N E UT RI N O F A C ILI T Y ( L B N F ) Testing, Inspection & Certification Environmental Solutions E n gine e ri n g & D esign Program, Construction, & Quality Management A LEADING NAT I ONAL TEC H NI C AL SERVICES PLATFORM Specialized provider of testing, inspection, environmental and engineering services to support and maintain critical infrastructure 4

 

 

Q2 2021 HIGHL I GHTS Strong performance, sales momentum and new acquisitions expand the platform G r oss Reven u e $131.6M Backlog $751M Ad j. E B I T D A 2 $18.2M Adj. EPS 2,3 $0.11 • Gross revenues up 16.7% YoY, driven by strong organic growt h 1 of ~6 % and con t ribu t ions f r om M & A • Net revenue 2 increased 16.0% YoY, reflecting the continued increase of self - performance and cross - selling while reducing reliance on third party providers. Experiencing some wage rate inflation, mitigating via 90% cost reimbursable contract structure 5 • Adj. EBITDA 2 at 17.1% of net revenues, in line with expec t a t i o ns, up 1 7 . 9 % ov er Q2 202 0 • Adju s ted net inco m e 2 of $ 0 . 1 1 per shar e 3 • AEL acquisition broadens reach of infrastructure services while strengthening cross - selling capabilities in the New York Tri - State Area. OSG acquisition broadens reach into Pacific Northwest with specialty light rail and environmental expertise • Backlog up sequentially to a record $751 million, excluding ~$1 5 0 m i ll i on of new awards pen ding con t ra c t execu tion 1. 2. Organic growth is defined as total revenue growth less revenue acquired for the comparable pre - acquisition period. Adjusted EBITDA, Net Revenue, Adjusted Net Income and Adjusted EPS are not financial measures determined in accordance with GAAP. For a definition of Adjusted EBITDA, Net Revenue, Adjusted Net Income and Adjusted EPS and a reconciliation to our most directly comparable financial measure calculated and presented in accordance with GAAP, please see the Appendix included herewith. Period over period EPS comparison reflects differences in weighted average Class A share counts. At Q2 2020, Class A Share Count was 5,767,342; Current Class A Share Count 30,633,366. 3.

 

 

MARKET TAILWINDS DRIVING GROWTH Atlas is well - positioned to capitalize on market tailwinds and the proposed Federal Infrastructure Bill B U S I N ESS G R OW T H D R I V ERS Aging Infrastructure Increased investment dedicated to deteriorating US infrastructure Sa fe t y & Re liabil i t y Recent building & bridge collapse tragedies drive growing demand for higher safety, and regulatory code compliance environment High Growth States Population growth demands; states being creative in alternative funding sources for infrastructure projects rather than waiting on federal funding Outsourcing Continued outsourcing by State DOTs and cities/municipalities for project & quality assurance services that were traditionally self - performed E nv i r o n me n t a l, Soc i a l & G o v e r n a nce (E S G ) Increased public awareness; investment in sustainability and societal impacts of infrastructure assets; desire for healthy buildings driven by pandemic & ESG focus T e ch n ol o gy & I n no va tion Clients’ desire to partner with firms that can deliver high - tech solutions for quality, cost, time, and resource efficiency P R O PO SED I N F RA ST RUC T U RE B I LL A CC ESSI B L E I N A T LA S M A RKET S A t las h a s t h e p o t e n t i a l t o p art icip a t e i n m o st o f t h e ~ $ 1 .0T o f pr op o sed i n ve s t me n t s i n t he F e der a l I n f r a str u c t u r e B il l Largest components are transportation, infrastructure and other government based work, consistent with our core services Other top priorities include environmental, resiliency, electric vehicle infrastructure – all a reas w here A t l as pr o v id e s v a lue 6

 

 

Q2 2021 REVENUE BY PROFESSIONAL SERVICES Testing, Inspection & Certification Services (TIC) ENVIRONME N TAL SOLUTIONS HIGHL I GHT Ensuring a safe & healthy school environment SUPPORTING HEALTHY K - 12 SCHOOLS FROM THE INSIDE OUT B u il d in g S c i e n c e s T e s t i n g Analytical testing services to ensure clean drinking water and a h ealt h y building environment R e g u l a t or y C o m p l i a n c e During Construction Materials testing and special inspections to ensure construction quality and safety 33% 3 5 % 1 5 % 1 7 % 3 5 % 33% 17% 1 5 % S T R ON G Q 2 2 0 21 E N V I RO NMEN T A L RE V E N U E Supporting our clients with sustainable solutions for enduring environmental, societal and economic benefits E n v ir o n m e n tal S o l u t i o n s ( E N V) 7 E n gi n eer i n g & D e s ig n ( E & D ) P r o gr a m , C o n s t r u ct i on & Q u a li ty M a n a g e m e n t ( PC QM)

 

 

We believe environmental, social and governance (ESG) issues have a profound impact on our world, and there is a growing need to manage the risks and opportunities associated with it. ENVIRONM E NTAL, SOCIAL & GOVERNAN C E Our Core Business is Inherently Connected by ESG S A F E & H E A LT HY I N F R AS T R U CT U RE We enhance the quality and value of vital infrastructure in our communities S U ST AINA B LE & R E S I L I E N T S Y ST EMS Our environmental and quality management work protects natural resources people depend on every day DIVERSE, EQUITABLE, & INCLUSIVE COMMUNITIES We lead with our hearts and apply our diverse talents for equitable and inclusive communities K E Y P I LL A R S Our ESG strategy focuses on three key pillars that address the delicate balance between people and planet ; the vital solutions inherent to our work ; and the opportunity to make a positive systemic change : • Appointed Chief Diversity Officer • Fo rm e d D E &I C o un cil • Deve l o p e d D E &I int r a n et s ite • L a unch e d U nc o ns cio us Bi a s T r a ining • S ev e n E mp lo y ee R e so u rce G ro u ps • C o de o f C o n duc t & E t h ics • S u pp l i e r C o de o f C o n duc t • Human Rights Policy Statement • S A SB Disclosures • E t h ics & C o mp l i a n ce C o mm i t t ee O U R P R O G R E SS H I G H L I G HT S Quality assurance through design, certified materials testing, and program management of infrastructure projects that ensure the health and safety of our communities Actively helping our clients achieve their ESG goals through analytical testing to resolve environmental concerns associated with air, land and water quality 1 2 3 T h e C E O A c t io n f o r Diver sit y & Inclusion Œ aims to rally the business community to advance diversity and inclusion within the workplace 8

 

 

Q2 2021 KEY WINS BY REGION Record backlog fueled by key wins across all Atlas services and geographies Southeast High - Impact transportation wins in Engineering & Design, Program, Construction & Q u a l i t y M a n a geme n t services: • $10M – Maintenance, Engineering & Inspection Services (PCQM) • $6.0M – Statewide Subsurface Utility Engineering On - Call Services (PCQM) • $2.3M – Design of Bass Road – Macon County (E&D) • $2.0M – Regional Traffic Operations Program Contract (E&D) • $2.0M – Compliance, Engineering & Inspection Services (PCQM) Northeast Solid results in Environmental services and Program, Construction and Quality Management: • $2.0M – Multi - Year Statewide Brownfield Services (ENV) • $ 1 . 1 M – B r idge Compl i a n ce In specti ons ( P CQM) • $ 1 . 1 M – V a n Wyck C o rr ido r I mp r ov e me n t s ( P CQM) • $0.4M – Multi - Year Environmental On - Call for University (ENV) • $ 0 . 4 M – W a t er B oo s t er S t a t i o n ( E &D) Central Major Environmental win in housing end market and solid Testing, Inspection & Certification services awards in transportation end market: • $6.0M – Environmental Due Diligence for Housing Authority (ENV) • $4.0M – Austin District Construction Materials Testing Contract (TIC) • $2.5M – Yoakum District Construction Materials Testing Contract (PCQM) • $2.0M – Tri - District Construction Materials Testing Contract (TIC) • $2.0M – El Paso District Construction Materials Testing Contract (TIC) West Strong wins across government, commercial, and education end markets: • $5.0M – Federal Contract for Construction Quality & Assurance (PCQM) • $ 3 . 2M – N a t i o n w ide A CM S u r ve y s f or N a t i o n a l R e t a il S t ore ( E N V ) • $1.3M – Real Estate Corporation Construction Materials Testing Contract (TIC) • $1.0M – UST Compliance Program for University (ENV) • $1.0M – On - Call NEPA & CEQA Support Services for DOT (PCQM) Q 2 2 0 2 1 B A C K L O G – S T R O N G V I S I BI L I TY OF F UTU R E R E V E N U E S T R E A M 9

 

 

2021 ACQUISITIONS Q2 acquisitions accelerate growth while further deleveraging the business Accretive acquisition pipeline remains strong and will continue to fund with a mix of cash and stock to reduce net leverage Adds full - service materials testing, inspection, geotechnical, on - site quality control and quality assurance E x pands ATCX ’ s f ootprint in NY, NJ, and C T with signif ica n t infrastructure spend expected Adds premier construction quality assurance in transportation, rail and environmental water services Deepe n s ATCX ’ s oppo rtu n ities for growth in transportation, transit and environmental water projects 10

 

 

( Do ll a rs i n M i lli ons) 1. Adjusted EBITDA, Net Revenue, Adjusted Net Income, and Adjusted EPS are not financial measures determined in accordance with GAAP. For a definition of these metrics and a reconciliation to our most directly comparable financial measure calculated and presented in accordance with GAAP, please see the Appendix included herewith. Adjusted EBITDA margin calculated as Adjusted EBITDA / Net Revenues. Period over period EPS comparison reflects differences in weighted average Class A share counts. At Q2 2020, Class A Share Count was 5,767,342; Current Class A Share Count 30,633,366. 2. 3. Q2 2021 Q2 2 0 2 0 YoY C h a n g e Gr oss R eve n ue $131.6 $112.7 16.7% N e t Re v e n u e 1 $106.3 $91.6 16.0% Ad j . EB I T D A 1 $18.2 $15.4 17.9% Ad j . EB I T D A M argi n 2 17.1% 16.8% 0.3% Ad j . E PS 3 $0.11 $0.07 N/A Q2 2 0 2 1 Adj. EBITDA SECOND QUARTER FINANCIAL HIGHLIGHTS 11 Resilient bu s iness mo d el continu e s delivering strong resul t s

 

 

BALANCE SHEET AND LEVERAGE Executing on previously communicated capital structure optimization efforts 1 Net leverage calculated as (debt – cash) / LTM Covenant Adj. EBITDA including predecessor period of acquisitions. O R G A N I C G R O W TH Mid to high single digit organic growth in 2021E C A S H G E N E R ATI O N $8.4 million of Operating C a s h f l o w Y T D 2 0 2 1 O N T R A C K T O A C H I EVE N E T L E V E RA G E 1 O F 5 . 5 x A T Y E A R E N D D E L E VE R AGI N G M & A Accretive deals funded with m i x o f c a s h a n d s t o c k <3.0x N E T L E V ER AG E 1 T A R G E T 12

 

 

REITERATING FULL YEAR 2 0 21 OUTLO O K Outlook affirmed with tailwinds and momentum going into 2022 1. Adjusted EBITDA, Net Revenue, Adjusted Net Income and Adjusted EPS are not financial measures determined in accordance with GAAP. For a definition of Adjusted EBITDA, Net Revenue, Adjusted Net Income and Adjusted EPS and a reconciliation to our most directly comparable financial measure calculated and presented in accordance with GAAP, please see the Appendix included herewith. Net leverage calculated as (debt – cash) / LTM Covenant Adj. EBITDA including predecessor period of acquisitions. 2. • Outlook reflects solid H1 2021 results, the addition of AEL in April, the addition of OSG in June, and current visibility on tim i ng of wo r k ( assu m es no new pandemic or resour ce related constraints) • Anticipate growth of for revenue and for Adjusted EBITDA for full year 2021. Adjusted 2021 EBITDA expected to be in a range of $73 million to $80 million. Run rate Adjusted E B ITDA ( pro f orm a assu m ing AEL and OSG had been closed on January 1, 2021) estimated at $76 million to $83 million • Government - based work remains positive YoY and seeing continued recovery in private sector work • Positioned to benefit from expanding federal, state and local inv est men t s in inf r ast ruct u re and en v ironme n t 2 • An t icipa t e redu c t i o n in at 2021 yea r - end • Growing backlog to fuel underlying earnings power in 2021 and beyond R E IT E R A T E F U LL Y E A R 2 0 21 G U I DAN C E $520M - $540M G R O SS R EVENUE $73M - $80M AD J . EBITDA 1 13

 

 

Strong market tailwinds driving growth in our core markets and services. 20 2 1 o u tl o ok r e it e rat e d for r e ve n ue and adju s te d EBITDA; Backlog and new awards supports future growth; Continuing to monitor pandemic related developments closely Executing on accretive M&A, integration efforts, cross - selling initiatives Po s iti o n e d to r e duce n e t l e verage by a full tur n in 2021 to 5.5x and to progress towards our goal of <3.0x net leverage Strong quarter for Atlas, with solid operating results with both organic growth and contributions from recent strategic acquisitions SUMMARY 14

 

 

APPE N DIX 15

 

 

RECONCILIATION Net Income to Adj. EBITDA and LTM Revenue R e c o n c ili a t i o n R e v e nu e s L T M Q 1 2 0 2 1 G r o s s R e v e nu e s R e i m b u r s e a b l e E x p e n s e s N e t R e v e nu e s Y e a r e n d e d D e c e m b e r 3 1 , 2 0 2 0 $ 468,217 $ (86,811) $ 381,406 Less: Six - months ended June 30, 2020 (222,017) (39,883) (182,134) Plus: Six - months ended July 2, 2021 254,831 (46,917) 207,914 LTM Q2 2021 $ 501,031 $ (93,845) $ 407,186 F o r t h e y e a r en d e d D e c em b e r 3 1 , Reco ncilia tio n N et Inco me to Ad j usted EB ITD A F o r t h e s i x - m o n t h s en d e d , J u l y 2 , 2 0 2 1 J un e 3 0 , 2 0 2 0 2 0 2 0 L T M Q 2 2 0 2 1 Net (loss) income $ (19,574) $ (21,324) $ (27,062) $ (25,312) Interest 33,300 12,038 24,673 45,935 Taxes 187 - 133 320 Depreciation and amortization 10,499 10,327 26,057 26,229 EBITDA $ 24,412 1,041 23,801 47,172 E B I T D A f o r a c q u i r e d b u s i n e s s prior to acquisition date - - 800 800 Other non - recurring expenses 3,700 16,678 26,731 13,753 Non - cash change in fair value of contingent consideration 2,823 - Non - cash equity compensation 1,746 10,576 11,400 2,570 Adjusted EBITDA $ 32,681 $ 28,295 $ 62,732 $ 64,295 A d j . E B I T D A % o f N e t R e v enue s L T M Q 2 2 0 2 0 1 5 . 8 % 16

 

 

RECONCILIATION Net Inc o m e & EPS to Adj. Net I n c o m e and Adj. EPS F o r t h e q u a r t e r e n d e d J u l y 2 , 2 0 2 1 J un e 3 0 , 2 0 2 0 (Unaudited) Net loss attributable to Class A common stockholders per share Amortization of intangible assets ( 0 . 1 4 ) 0.10 $ ( 0 . 0 7 ) 0.11 $ Write - off of deferred financing costs - - Acquisition costs and other non - recurring charges 0.07 0.03 Fair value adjustment for contingent consideration 0.08 I n c o m e t a x e x p e n s e - - Adjusted EPS 0.11 0.07 Weighted average of shares outstanding Class A common shares (basic and diluted): 30,634 5,767 F o r t h e q u a r t e r e n d e d J u l y 2 , 2 0 2 1 J un e 3 0 , 2 0 2 0 (Unaudited) Net loss attributable to Class A common stockholders $ (4,166) $ (407) Amortization of intangible assets 3,132 608 Write - off of deferred financing costs - - Acquisition costs and other non - recurring charges 2,066 192 Fair value adjustment for contingent consideration I n c o m e t a x e x p e n s e 2,436 - - Adjusted net income attributable to Class A common stockholders 3,468 393 17