- Delivered 17% Revenue Growth -
- Completed Accretive Acquisitions of
- Increased Cash Flows from Operations -
- Reiterated 2021 Outlook for Revenues and Adjusted EBITDA -
Second Quarter 2021 Highlights:
- Gross revenue grew 17% to
$131.6 million , compared to$112.7 million in the prior-year quarter. Revenue growth was driven by continued solid execution across all of the Company’s services and included organic growth and contributions from the recent acquisitions. - Net revenue(1) rose 16% to
$106.3 million , compared to$91.6 million in the prior-year quarter. Net revenue was approximately 81% of gross revenue, reflecting ongoing strategic efforts to increase self-performance by expanding services and cross-selling while minimizing reliance on third-party providers. - Net loss attributable to Class A common shares was
$4.2 million , or$0.14 per Class A share. The net loss is not directly comparable to the net loss of$0.4 million , or$0.07 per Class A share in the prior-year quarter as dividends of$4.5 million on the previously outstanding preferred equity units were not included in the 2020 loss while interest expense on the financing that repurchased the preferred stock is included in the 2021 results. - Adjusted net income(2) was
$3.5 million , or$0.11 per Class A share, compared to$0.4 million , or$0.07 per Class A share in the prior year quarter. Adjusted net income excludes$2.1 million of acquisition and other non-operational expenses, and noncash adjustments of$3.1 million for the amortization of intangible assets, and$2.4 million for a fair value adjustment for contingent consideration on earnouts for acquisitions. - Adjusted EBITDA(3) increased 17.9% to
$18.2 million , compared to$15.4 million in the prior-year quarter, and represented 17.1% of net revenue. - Backlog at quarter-end was
$751 million , up sequentially to a record high, driven by key infrastructure and environmental related contract wins. - Operating cash flow was
$7.8 million versus$6.3 million in the prior-year quarter. Reduced debt with a$12.2 million revolver debt paydown during the quarter. - In
April 2021 , the Company closed on the acquisition ofAtlantic Engineering Laboratories, Inc. (AEL), broadening the reach of infrastructure services and strengthening cross-selling capabilities in the New York Tri-State region. InJune 2021 , the Company closed on the acquisition of O’Neill Services Group (OSG), expanding its presence in thePacific Northwest , and complementing the Company’s offerings in transportation, infrastructure, and commercial projects.
The conversion of our Class B common shares to publicly traded Class A shares continued during the quarter. As of
Full Year 2021 Outlook Reiterated
- Adjusted 2021 EBITDA expected to be in a range of
$73 million to$80 million . Run rate Adjusted EBITDA (pro forma assuming AEL and OSG had been closed onJanuary 1, 2021 ) estimated at$76 million to$83 million . - Gross revenue anticipated to be in a range of
$520 million to$540 million , with net revenue and self-performance continuing to be an area of focus for margin enhancement. - The reiterated outlook reflects the continued strength of backlog, the addition of the AEL and OSG acquisitions and current visibility on the timing of work.
(1) Net revenue is a Non-GAAP financial measure. Please see “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of net revenue to the most comparable financial measure calculated in accordance with GAAP.
(2) Adjusted net income is a Non-GAAP financial measure. Please see “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of Adjusted Net Income to the most comparable financial measure calculated in accordance with GAAP.
(3) Adjusted EBITDA is a Non-GAAP financial measure. Please see “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of Adjusted EBITDA to the most comparable financial measure calculated in accordance with GAAP.
(4) Net leverage calculated as (debt –cash) / LTM Adj. EBITDA including predecessor period of acquisitions.
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Forward-Looking Statements
The statements contained in this press release 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. In addition, any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions and estimates, 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 press release are based on our expectations and beliefs as of the date of this filing 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 or estimates 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, those described throughout our annual report on Form 10-K for the year ended
Reconciliation of Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP,
Amounts in thousands, except per share data | |||||||
2020 | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and equivalents | 11,806 | 14,062 | |||||
Accounts receivable, net | 99,620 | 99,822 | |||||
Unbilled receivables, net | 46,860 | 38,350 | |||||
Prepaid expenses | 7,451 | 5,874 | |||||
Other current assets | 3,016 | 4,557 | |||||
Total current assets | 168,753 | 162,665 | |||||
Property and equipment, net | 13,304 | 14,134 | |||||
Intangible assets, net | 115,823 | 86,008 | |||||
112,155 | 109,001 | ||||||
Other long-term assets | 4,602 | 4,254 | |||||
TOTAL ASSETS | 414,637 | 376,062 | |||||
LIABILITIES, REDEEMABLE PREFERRED STOCK, AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Trade accounts payable | 30,506 | 28,456 | |||||
Accrued liabilities | 14,574 | 15,011 | |||||
Current maturities of long-term debt | - | 14,050 | |||||
Other current liabilities | 16,186 | 12,036 | |||||
Total current liabilities | 61,266 | 69,553 | |||||
Long-term debt, net of current maturities and loan costs | 479,603 | 264,970 | |||||
Other long-term liabilities | 16,909 | 24,296 | |||||
Total liabilities | 557,778 | 358,819 | |||||
COMMITMENTS AND CONTINGENCIES (NOTE 13) | |||||||
Redeemable preferred stock | - | 151,391 | |||||
Class A common stock, | - | 1 | |||||
Class B common stock, | 3 | 2 | |||||
Additional paid in capital | (103,211 | ) | (37,382 | ) | |||
Non-controlling interest | (21,044 | ) | (90,566 | ) | |||
Retained (deficit) | (18,889 | ) | (6,203 | ) | |||
Total shareholders’ equity | (143,141 | ) | (134,148 | ) | |||
TOTAL LIABILITIES, REDEEMABLE PREFEERED STOCK AND SHAREHOLDERS' EQUITY | 414,637 | 376,062 | |||||
Amounts in thousands, except per share data | ||||||||||||||||||
For the three months ended | For the six months ended | |||||||||||||||||
Revenues | ||||||||||||||||||
Cost of revenues | (68,349 | ) | (58,714 | ) | (132,977 | ) | (117,612 | ) | ||||||||||
Operating expenses | (57,551 | ) | (45,358 | ) | (107,896 | ) | (113,691 | ) | ||||||||||
Operating income/(loss) | 5,662 | 8,643 | 13,958 | (9,286 | ) | |||||||||||||
Interest expense | (10,258 | ) | (6,398 | ) | (33,300 | ) | (12,038 | ) | ||||||||||
(Loss) income before income taxes | (4,596 | ) | 2,245 | (19,342 | ) | (21,324 | ) | |||||||||||
Income tax expense | (187 | ) | - | (232 | ) | - | ||||||||||||
Net (loss) income | (4,783 | ) | 2,245 | (19,574 | ) | (21,324 | ) | |||||||||||
Provision for non-controlling interest | 617 | 1,881 | 12,786 | 5,141 | ||||||||||||||
Redeemable preferred stock dividends | - | (4,533 | ) | (5,899 | ) | (6,777 | ) | |||||||||||
Net (loss) attributable to Class A common stock shareholders/members | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
(Loss) Per Class A Common Share | (0.14 | ) | (0.07 | ) | (0.57 | ) | (0.33 | ) | ||||||||||
Weighted average of shares outstanding: | ||||||||||||||||||
Class A common shares (basic and diluted) | 30,633,366 | 5,767,342 | 22,400,179 | 5,767,342 |
Amounts in thousands, except per share data | ||||||||||
For the quarter ended | ||||||||||
2021 | 2020 | |||||||||
Cash flows from operating activities: | ||||||||||
Net (loss) income | (4,784 | ) | 2,245 | |||||||
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | ||||||||||
Depreciation and amortization | 5,939 | 5,325 | ||||||||
Equity-based compensation expense | 805 | 190 | ||||||||
Interest expense, paid in kind | 2,289 | - | ||||||||
Loss (gain) on sale of property and equipment | (12 | ) | (12 | ) | ||||||
Write-off of deferred financing costs related to debt extinguishment | - | - | ||||||||
Amortization of deferred financing costs | 13 | 735 | ||||||||
Provision for bad debts | (322 | ) | 1,373 | |||||||
Changes in assets & liabilities: | - | - | ||||||||
(Increase) decrease in accounts receivable and unbilled receivable | (6,812 | ) | 867 | |||||||
Decrease in prepaid expenses | 275 | 377 | ||||||||
(Increase) in other current assets | (166 | ) | (507 | ) | ||||||
Increase (decrease) in trade accounts payable | 7,089 | (6,194 | ) | |||||||
Increase in accrued liabilities | 377 | 301 | ||||||||
Increase in other current and long-term liabilities | 3,025 | 1,604 | ||||||||
Decrease in other long-term assets | 47 | 18 | ||||||||
Net cash provided by operating activities | 7,763 | 6,322 | ||||||||
Cash flows from investing activities: | ||||||||||
Purchases of property and equipment | (756 | ) | (1,053 | ) | ||||||
Proceeds from disposal of property and equipment | 1 | - | ||||||||
Purchase of business, net of cash acquired | (30,902 | ) | (248 | ) | ||||||
Net cash (used in) investing activities | (31,657 | ) | (1,301 | ) | ||||||
Cash flows from financing activities: | ||||||||||
Proceeds from issuance of debt | 35,000 | 18,000 | ||||||||
Payment of loan acquisition costs | (983 | ) | (5,620 | ) | ||||||
Repayments of debt | - | (18,513 | ) | |||||||
Net payments on revolving line of credit | (12,159 | ) | - | |||||||
Proceeds from issuance of redeemable preferred stock | - | - | ||||||||
Repayment of redeemable preferred stock | - | - | ||||||||
Issuance of common stock | - | - | ||||||||
Member distributions | - | - | ||||||||
Payment to shareholders associated with Atlas Business Combination | - | - | ||||||||
Payment of redeemable preferred stock dividends | - | (931 | ) | |||||||
Distribution to non-controlling interests | (779 | ) | - | |||||||
Payment of contingent earn-out | (1,706 | ) | - | |||||||
Net cash provided by (used in) financing activities | 19,373 | (7,064 | ) | |||||||
Net change in cash and equivalents | (4,521 | ) | (2,043 | ) | ||||||
Cash and equivalents - beginning of period | 16,327 | 18,924 | ||||||||
Cash and equivalents - end of period | $ | 11,806 | $ | 16,881 | ||||||
Supplemental information: | ||||||||||
Cash paid during the period for: | ||||||||||
Interest | $ | 8,174 | $ | 5,501 | ||||||
Taxes | 188 | - | ||||||||
Capital assets financed | - | (63 | ) | |||||||
Contingent consideration share settled | 2,000 | - | ||||||||
Dividends on preferred shares accrued and not paid | - | 907 | ||||||||
Reconciliation of Gross Revenues to Net Revenues
(unaudited)
(Amounts in thousands)
For the quarter ended | ||||||||
(Unaudited) | ||||||||
Gross Revenue | $ | 131,562 | $ | 112,715 | ||||
Reimburseable Expenses | (25,241 | ) | (21,081 | ) | ||||
Revenue Net of Reimburseable Expenses | $ | 106,321 | $ | 91,634 | ||||
Reconciliation of Net Loss Attributable to Class A Common Stockholders to
Adjusted Net Income Attributable to Class A Common Stockholders
(unaudited)
(Amounts in thousands except per share data)
For the quarter ended | ||||||||
(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 | 2,436 | |||||||
Income tax expense | - | - | ||||||
Adjusted net income attributable to Class A common stockholders | 3,468 | 393 | ||||||
For the quarter ended | ||||||||
(Unaudited) | ||||||||
Net loss attributable to Class A common stockholders per share | $ | (0.14 | ) | $ | (0.07 | ) | ||
Amortization of intangible assets | 0.10 | 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 | |||||||
Income tax expense | - | - | ||||||
Adjusted EPS | 0.11 | 0.07 | ||||||
Weighted average of shares outstanding Class A common shares (basic and diluted): | 30,634 | 5,767 | ||||||
Reconciliation of Net (Loss) Income to Adjusted EBITDA
(unaudited)
(Amounts in thousands)
For the quarter ended | For the six-months ended, | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||
Net (loss) income | $ | (4,783 | ) | $ | 2,245 | $ | (19,574 | ) | $ | (21,324 | ) | |||
Interest | 10,258 | 6,398 | 33,300 | 12,038 | ||||||||||
Taxes | 187 | - | 187 | - | ||||||||||
Depreciation and amortization | 5,939 | 5,325 | 10,499 | 10,327 | ||||||||||
EBITDA | 11,601 | 13,968 | 24,412 | 1,041 | ||||||||||
Other non-recurring expenses(1) | 2,434 | 1,246 | 3,700 | 16,678 | ||||||||||
Non-cash change in fair value of contingent consideration | 2,823 | - | 2,823 | - | ||||||||||
Non-cash equity compensation(2) | 1,300 | 190 | 1,746 | 10,576 | ||||||||||
Adjusted EBITDA | $ | 18,158 | $ | 15,404 | $ | 32,681 | $ | 28,295 | ||||||
(1) Includes professional service-related service fees such as legal, accounting, tax, valuation and other consulting relating as well as change in control payments relating to the Atlas Business Combination. Additionally, it includes other acquisition related professional fees and other non-operational expenses. | ||||||||||||||
(2) Includes the amortization of the unvested portion of our 2017 and 2019 Management Incentive Plan grants that vested immediately upon the change in control provisions contained within the agreements, compensation that was earned and accrued for in the three months ended |
Contacts:
Media
770-314-5270
karlene.barron@oneatlas.com
Investor Relations
512-851-1507
ir@oneatlas.com
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