- Delivered Positive Start to 2021 with 13% Total Organic and Acquisitive Revenue Growth -
- Completed Transformational Balance Sheet Recapitalization Accelerating Path to Reduce Net Leverage -
- Further Execution on M&A Pipeline with Acquisition of
- Raised 2021 Outlook for Revenues and Adjusted EBITDA -
First Quarter 2021 Highlights:
- Gross revenue grew 12.8% to
$123.3 million , compared to$109.3 million in the prior-year quarter. Revenue growth was driven by steady execution across all of the Company’s service lines, comprised of organic growth(1) and the contribution to results from recent acquisitions. - Gross revenue by service line, as a percentage of consolidated gross revenue, was approximately 34% Testing, Inspection and Certification Services (TIC), 32% Environmental Solutions (ENV), 18% Program, Construction, and Quality Management (PCQM), and 16% Engineering and Design (E&D).
- Net revenue(2) rose 12.3% to
$101.6 million , compared to$90.5 million in the prior-year quarter. Net revenue was approximately 82% of gross revenue, reflecting the strategic efforts to increase self-performance by expanding services and cross-selling while minimizing reliance on third-party providers. - Net loss was
$15.5 million , or$0.60 per Class A share, compared to a net loss of$23.6 million , or$0.26 per Class A share in the prior-year quarter. Both quarters included costs relating to changes in the Company’s capital structure. The net loss in the first quarter of 2021 included approximately$17.1 million in after-tax charges for recapitalization and acquisition-related transaction costs, including the write off of$15.2 million in non-cash, deferred financing costs incurred as part of the Company’s recapitalization completed in the quarter, while the prior-year period included cash and non-cash costs totaling$25.8 million related to business combination and public company formation. - Adjusted net income(3) increased to
$11.1 million , or$0.78 per class A share, compared to$0.3 million , or$0.05 per class A share in the prior year quarter. Adjusted net income excludes the impact of transaction costs detailed above, certain other non-recurring expenses, and the amortization of intangible assets. - Adjusted EBITDA(4) increased 12.7% to
$14.5 million , compared to$12.9 million in the prior-year quarter, and represented 14.3% of net revenue. - Backlog at quarter-end was
$689 million . Beginning this quarter, the Company has updated the calculation of backlog to better reflect the outlook for contractual revenue across the expanded business platform and to more closely match the methodology of its competitors while maintaining its practice to only include projections for existing fully executed contracts. This change increased reported backlog by$49 million as ofApril 2, 2021 as compared to the prior method of calculation for quarter end, which was up sequentially and would have been another record high. - Operating cash flow was
$0.6 million , versus a cash use of$12.6 million in the prior-year quarter. While Q1 is typically a lower volume quarter each year given winter weather conditions in many geographic locations, the February winter storm inTexas in particular had a short-term adverse impact on performance. In addition, the first quarter of 2021 also included$1.3 million of cash-based recapitalization and transaction costs, while the prior-year quarter included$14.7 million of business combination and related public company formation cash expenses. - In
April 2021 , the Company closed on the previously announced acquisition ofAtlantic Engineering Laboratories, Inc. (AEL), broadening the reach of infrastructure services and strengthening cross-selling capabilities in the New York Tri-State region.
Capital Structure
In
The conversion of our Class B common shares to publicly traded Class A shares continued during 2021. As of
Update on Financial Statements
In April, the
Full Year 2021 Outlook Increased
- Adjusted EBITDA is now expected to be in a range of
$73 million to$80 million , reflecting a 22.4% increase at the midpoint compared to full-year 2020 results and up from the previous guidance range of$70 million to$76 million . - Gross revenue now is anticipated to be in a range of
$520 million to$540 million , up from a range of$500 million to$520 million previously provided, with net revenue and self-performance expected to continue to increase relative to 2020. - With the significant transaction costs associated with the Company’s business combination, public company formation, warrant exchange offer, and balance sheet recapitalization now complete, Atlas anticipates operating cash flow for the remainder of full-year 2021 will better reflect the underlying earnings and cash-generating power of the Company’s operations.
- The outlook reflects the continued strength of backlog, the addition of the AEL acquisition in mid-April, and current visibility on the timing of work.
(1) Organic growth is defined as total revenue growth less revenue acquired for the comparable pre-acquisition period.
(2) 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.
(3) 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.
(4) 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.
(5) Net leverage calculated as (debt –cash) / LTM Adj. EBITDA including predecessor period of acquisitions.
Webcast and Conference Call
The Company will host a webcast and conference call on
About
Headquartered in
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,
STATEMENTS OF OPERATIONS
(unaudited)
(Amounts in thousands, except per share data)
For the quarters ended | |||||||||
Revenues | $ | 123,269 | $ | 109,302 | |||||
Cost of revenues | (64,628 | ) | (58,898 | ) | |||||
Operating expenses | (50,345 | ) | (68,333 | ) | |||||
Operating income/(loss) | 8,296 | (17,929 | ) | ||||||
Interest expense | (23,042 | ) | (5,640 | ) | |||||
(Loss) before income taxes | (14,746 | ) | (23,569 | ) | |||||
Income tax expense | (44 | ) | - | ||||||
Net (loss) | (14,790 | ) | (23,569 | ) | |||||
Provision for non-controlling interest | 12,169 | 3,260 | |||||||
Redeemable preferred stock dividends | (5,899 | ) | (2,244 | ) | |||||
Net (loss) attributable to Class A common stock shareholders/members | $ | (8,520 | ) | $ | (22,553 | ) | |||
(Loss) Per Class A Common Share | (0.60 | ) | (0.26 | ) | |||||
Weighted average of shares outstanding: | |||||||||
Class A common shares (basic and diluted) | 14,256,484 | 5,767,342 |
CONSOLIDATED BALANCE SHEETS
(unaudited)
(Amounts in thousands, except per share data)
ASSETS Current assets: | ||||||||
Cash and equivalents | $ | 16,327 | $ | 14,062 | ||||
Accounts receivable, net | 86,175 | 99,822 | ||||||
Unbilled receivables, net | 42,550 | 38,350 | ||||||
Prepaid expenses | 8,565 | 5,874 | ||||||
Other current assets | 2,805 | 4,557 | ||||||
Total current assets | 156,422 | 162,665 | ||||||
Property and equipment, net | 13,583 | 14,134 | ||||||
Intangible assets, net | 82,844 | 86,008 | ||||||
104,798 | 109,001 | |||||||
Other long-term assets | 4,645 | 4,254 | ||||||
TOTAL ASSETS | $ | 362,292 | $ | 376,062 | ||||
LIABILITIES, REDEEMABLE PREFERRED STOCK, AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 23,210 | $ | 28,456 | ||||
Accrued liabilities | 9,302 | 15,011 | ||||||
Current maturities of long-term debt | - | 14,050 | ||||||
Other current liabilities | 10,938 | 12,036 | ||||||
Total current liabilities | 43,450 | 69,553 | ||||||
Long-term debt, net of current maturities and loan costs | 455,443 | 264,970 | ||||||
Other long-term liabilities | 17,789 | 24,296 | ||||||
Total liabilities | 516,682 | 358,819 | ||||||
COMMITMENTS AND CONTINGENCIES (NOTE 13) | ||||||||
Redeemable preferred stock | - | 151,391 | ||||||
Class A common stock, | 2 | 1 | ||||||
Class B common stock, | 2 | 2 | ||||||
Additional paid in capital | (46,280 | ) | (37,382 | ) | ||||
Non-controlling interest | (93,391 | ) | (90,566 | ) | ||||
Retained (deficit) | (14,723 | ) | (6,203 | ) | ||||
Total shareholders’ equity | (154,390 | ) | (134,148 | ) | ||||
TOTAL LIABILITIES, REDEEMABLE PREFEERED STOCK AND SHAREHOLDERS' EQUITY | $ | 362,292 | $ | 376,062 | ||||
STATEMENT OF CASH FLOWS
(unaudited)
(Amounts in thousands)
For the quarters ended | ||||||||
Cash flows from operating activities: | ||||||||
Net (loss) | $ | (14,790 | ) | $ | (23,569 | ) | ||
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 4,560 | 5,002 | ||||||
Equity-based compensation expense | 446 | 9,845 | ||||||
Interest expense, paid in kind | 864 | - | ||||||
Loss (gain) on sale of property and equipment | 11 | 11 | ||||||
Write-off of deferred financing costs related to debt extinguishment | 15,197 | 1,712 | ||||||
Amortization of deferred financing costs | 631 | 249 | ||||||
Provision for bad debts | (189 | ) | 92 | |||||
Changes in assets & liabilities: | ||||||||
Decrease in accounts receivable and unbilled receivable | 9,536 | 193 | ||||||
(Increase) decrease in prepaid expenses | (2,691 | ) | 789 | |||||
Decrease in other current assets | 1,752 | 283 | ||||||
(Decrease) in trade accounts payable | (5,409 | ) | (3,948 | ) | ||||
(Decrease) in accrued liabilities | (5,629 | ) | (1,248 | ) | ||||
(Decrease) in other current and long-term liabilities | (3,205 | ) | (1,956 | ) | ||||
(Increase) in other long-term assets | (391 | ) | (27 | ) | ||||
Net cash provided by (used in) operating activities | 693 | (12,572 | ) | |||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (691 | ) | (1,080 | ) | ||||
Proceeds from disposal of property and equipment | - | - | ||||||
Purchase of business, net of cash acquired | (97 | ) | (10,500 | ) | ||||
Net cash (used in) investing activities | (788 | ) | (11,580 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of debt | 461,754 | 302,000 | ||||||
Payment of loan acquisition costs | (7,560 | ) | (11,886 | ) | ||||
Repayments of debt | (294,463 | ) | (171,144 | ) | ||||
Proceeds from issuance of redeemable preferred stock | - | 141,840 | ||||||
Issuance of common stock | - | 10,229 | ||||||
Member distributions | - | (21,830 | ) | |||||
Payment to shareholders associated with Atlas Business Combination | - | (226,318 | ) | |||||
Payment of redeemable preferred stock dividends | (1,185 | ) | - | |||||
Repayment of redeemable preferred stock | (156,186 | ) | - | |||||
Net cash provided by financing activities | 2,360 | 22,891 | ||||||
Net change in cash and equivalents | 2,265 | (1,261 | ) | |||||
Cash and equivalents - beginning of period | 14,062 | 20,185 | ||||||
Cash and equivalents - end of period | $ | 16,327 | $ | 18,924 | ||||
Supplemental information: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 5,656 | $ | 3,508 | ||||
Taxes | 44 | - | ||||||
Capital assets financed | 165 | 157 | ||||||
Contingent consideration share settled | - | 1,060 | ||||||
Dividends on preferred shares accrued and not paid | - | 912 | ||||||
Reconciliation of Gross Revenues to Net Revenues
(unaudited)
(Amounts in thousands)
For the quarter ended | ||||||||
Gross Revenue | $ | 123,269 | $ | 109,302 | ||||
Reimburseable Expenses | (21,676 | ) | (18,802 | ) | ||||
Revenue Net of Reimburseable Expenses | $ | 101,593 | $ | 90,500 | ||||
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 | $ | (8,520 | ) | $ | (1,506 | ) | ||
Amortization of intangible assets | 3,164 | 1,816 | ||||||
Write-off of deferred financing costs | 15,197 | - | ||||||
Acquisition costs and other non-recurring charges | 1,266 | - | ||||||
Income tax expense | - | - | ||||||
Adjusted net income attributable to Class A common stockholders | $ | 11,107 | $ | 310 | ||||
Weighted average of shares outstanding Class A common shares (basic and diluted): | 14,256 | 5,767 | ||||||
For the quarter ended | ||||||||
(Unaudited) | ||||||||
Net loss attributable to Class A common stockholders per share | $ | (0.60 | ) | $ | (0.26 | ) | ||
Amortization of intangible assets | 0.22 | 0.31 | ||||||
Write-off of deferred financing costs | 1.07 | - | ||||||
Acquisition costs and other non-recurring charges | 0.09 | - | ||||||
Income tax expense | - | - | ||||||
Adjusted EPS | $ | 0.78 | $ | 0.05 |
Reconciliation of Net Income to Adjusted EBITDA
(unaudited)
(Amounts in thousands)
For the quarter ended | |||||||
(Unaudited) | |||||||
Net (loss) income | $ | (14,790 | ) | $ | (23,569 | ) | |
Interest(1) | 23,042 | 5,640 | |||||
Taxes | - | - | |||||
Depreciation and amortization | 4,560 | 5,002 | |||||
EBITDA | 12,812 | (12,927 | ) | ||||
EBITDA for acquired business prior to Acquisition Date(2) | - | 763 | |||||
Other non-recurring expenses(3) | 1,266 | 14,669 | |||||
Non-cash equity compensation | 446 | 10,386 | |||||
Adjusted EBITDA | $ | 14,524 | $ | 12,891 | |||
(1) Includes | |||||||
(2) Includes the EBITDA of LONG (which we acquired in | |||||||
(3) Includes professional service-related service fees such as legal, accounting, tax, valuation and other consulting relating to the Atlas Business Combination, acquisition related professional fees, shutdown of the telecom division costs in 2019 and costs incurred related to the COVID-19 pandemic. | |||||||
Contacts:
Media
770-314-5270
karlene.barron@oneatlas.com
Investor Relations
512-851-1507
ir@oneatlas.com
Source:
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