Montrose Environmental Group Inc Q1 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Tim Mulrooney - William Blair & Company, LLC - Analyst : Vijay, Allan, good morning.

Question: Tim Mulrooney - William Blair & Company, LLC - Analyst : Doing well. Thanks for all the color with the recent finalization of the EPA's regs for MCLs and CERCLA. And I say we appreciate all the color on the market sizing, but I wanted to ask about timing. How do you think about the near term one to two year impact of these rulings as you think of this across all three of your separate business lines?

Question: Tim Mulrooney - William Blair & Company, LLC - Analyst : Okay. That's very clear, thank you. And I guess as my follow-up of staying on this topic, but I was hoping you might be able to offer a bit of insight out on the, I guess, into your portfolio PFAS remediation solutions that you have on hand because I know your general resins technology gets a lot of attention, right, but I also know you have an entire suite of solutions. So I'm curious how much you expect to play on the drinking water side versus those higher contaminated industrial DoD sites, airports, et cetera?

Question: Tim Mulrooney - William Blair & Company, LLC - Analyst : It does. Yes. So it sounds like you do have technologies that can address the drinking water system. So that's not your main focus. But regardless these MCL, they're going to have adjacent impacts or upstream impacts that go beyond drinking water systems and that is going to affect your business in a material way. Very good summary.

Question: Tim Mulrooney - William Blair & Company, LLC - Analyst : Okay. Yes, very clear. I'll jump back in queue. Thank you very much.

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Hi, good morning. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 08, 2024 / 12:30PM, MEG.N - Q1 2024 Montrose Environmental Group Inc Earnings Call

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : (inaudible) background noise, but I wanted to, two questions. First. We didn't have a chance to really talk a whole lot about the (inaudible) to the guidance, the raise to your full year guidance earlier. Maybe if you could just spend a moment or two on what really drove that? I mean, it sounds like you're seeing a better performance from Matrix that I'm not sure if that's really having much of an impact as it is other parts of the business?

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : It does, Vijay. Thank you. That's helpful. And just a final follow up question for me. You're talking about a growing funnel M&A. Obviously, there will be additional capital that you've added back in April and maybe if you could two things. Historically, you guys have done more smaller deals than a few bigger ones. But I'm just wondering, if how we should think about M&A activity and whether you know you guys have to add some additional resources or if you feel you have the infrastructure in place to accommodate a pickup in M&A Thanks.

Question: Jim Ricchiuti - Needham & Company Inc. - Analyst : Got it. Thanks very much.

Question: Brian Butler - Stifel, Nicolaus and Company, Incorporated - Analyst : Good morning. Thanks for taking my questions.

Question: Brian Butler - Stifel, Nicolaus and Company, Incorporated - Analyst : Just on you kind of touched on this on the M&A question, the last M&A question, but maybe a little bit more color on what you're looking for service wise across the segments? And just kind of help understand where those opportunities might lie? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 08, 2024 / 12:30PM, MEG.N - Q1 2024 Montrose Environmental Group Inc Earnings Call

Question: Brian Butler - Stifel, Nicolaus and Company, Incorporated - Analyst : Okay. That's helpful. And then maybe we could just talk on PFAS revenues where we are right now and the outlook with the $200 million -- $200 billion. Total addressable market is huge. But where are we starting in? Again you kind of talked about the ramp already, but just a little color on the starting point?

Question: Brian Butler - Stifel, Nicolaus and Company, Incorporated - Analyst : Okay.

Question: Brian Butler - Stifel, Nicolaus and Company, Incorporated - Analyst : Okay, great. And then just one last one. I was just going to ask on the R&R business, ex Matrix, do you have a comparison where you on the EBITDA margin? I mean, was that margin up if you took Matrix out of the mix or was there still some headwinds from the biogas? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 08, 2024 / 12:30PM, MEG.N - Q1 2024 Montrose Environmental Group Inc Earnings Call

Question: Brian Butler - Stifel, Nicolaus and Company, Incorporated - Analyst : Great. Thank you very much for taking my questions. Nice quarter.

Question: Stephanie Yee - J.P. Morgan Securities LLC - Analyst : Hi, good morning.

Question: Stephanie Yee - J.P. Morgan Securities LLC - Analyst : I was wondering if you can talk about what you think your normal cadence for I know it's hard, but just a sense of what organic revenue growth cadence should be for the next few years. I know historically you talked about something like mid-single digit to high single digit and what people can expect in any particular year. I'm wondering with kind of the regulations especially on the PFAS side, whether we should be thinking about high single digits to low double digits being the normal, new normal for mantra going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 08, 2024 / 12:30PM, MEG.N - Q1 2024 Montrose Environmental Group Inc Earnings Call

Question: Stephanie Yee - J.P. Morgan Securities LLC - Analyst : Okay. That makes sense. That's super helpful. And I was wondering if you can talk more about what you're doing about biogas business, now that you've anniversaried the pivot. Just what kind of projects are you working on now? And I think you mentioned that you do expect to see growth in the back half of the year, but just, any additional color on what's going on with that business?

Question: Stephanie Yee - J.P. Morgan Securities LLC - Analyst : Okay. Sounds good. Thank you.