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spk01: Greetings. Welcome to the Atlas Technical Consultants first quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, David Quinn. Mr. Quinn, you may begin.
spk07: Thank you for joining our first quarter 2021 earnings conference call. We hope that you have seen our earnings release issued after the market today. Please note that we have also posted a presentation in support of this call, which can be found in the investor section of our website at oneatlas.com. Before we begin, I would like to remind you that today's call may include forward-looking statements. Any statements describing our beliefs, goals, plans, strategies, expectations, projections, forecasts, and assumptions are forward-looking statements. Please note that the company's actual results may differ from those anticipated by such forward-looking statements for a variety of reasons, many of which are beyond our control. Please see our recent filings with the Securities and Exchange Commission, which identify the principal risks and uncertainties that could affect our business, prospects, and future results. We assume no obligation to update publicly any forward-looking statements. In addition, we will be discussing or providing certain non-GAAP financial measures today, including adjusted EBITDA, adjusted EBITDA margins, adjusted net income, and adjusted EPS. Please see our release and filings for a reconciliation of these non-GAAP measures to their most directly comparable GAAP measure. Moving to our agenda on slide three, I am joined today by our Chief Executive Officer, Joe Boyer, who will provide an overview of our business and give an operating update. I will continue with the discussion of our financial results and the outlook before we open up the call for questions. At this point, I'll turn the call over to Joe to pick up on slide four.
spk06: Thank you, David. I am pleased to report that we had a strong start to 2021 thanks to the quality of our technical resources and their commitment to providing first-rate services to our customers. I'm also excited to share a number of proof points with you today that demonstrate our focus and discipline to execute on our strategy and continue to create long-term value for our stakeholders. For the first quarter, we received nearly 13% revenue growth and a 13% increase in adjusted EBITDA, driven by a return to mid-single-digit organic growth. Our results and achievements in the first quarter exceeded plans and positioned us to deliver growth and increase profitability for the balance of the year and beyond. In March, we announced the strategic acquisition of AEL. a full-service materials testing, inspection, and engineering firm in the New York and New Jersey markets. That transaction closed in mid-April and will contribute to our results beginning the second quarter of 2021. As you all know, a primary focus of this management team has been to optimize our capital structure in order to position the company for long-term growth. In February, we completed a transformative recapitalization of our balance sheet that dramatically simplified our capital structure, reduced our borrowing costs, improved free cash flow, and provided committed financing to support inquisitive growth. The recapitalization enables us to expand the Atlas platform into new geographies, cross-sell more services, increase self-performance of work, and fully utilize the strength of our organization to deliver technical excellence to our clients. Our people are the foundation of our success and are making our company stronger every day. We are encouraged by the increase in projects and contracts coming to the market in our bidding pipeline, as well as the success we are achieving in our win rates as our end markets continue to strengthen. We expect both the volume and size of the new project wins to trend higher and drive the expansion of our business for the foreseeable future. We are particularly excited about the opportunities we are pursuing in the environmental, transportation, and infrastructure areas. On the right side of slide four, we show an example of an impactful, sustainable project involving an array of our environmental and engineering design services. Our capabilities position us well to offer solutions to our clients particularly for their long-term sustainability objectives. We are helping them identify and mitigate environmental risks associated with their operations and innovate with them to develop technical solutions that enhance the quality of their assets.
spk10: Moving to slide five, please.
spk06: So now to take a look at our first quarter highlights. We were pleased by our first quarter results and how they positioned us to accomplish our objectives for this whole year. We delivered gross revenue of $123 million with 13% total growth, including positive 6% organic growth fueled by expansion in our core markets and revenue synergies from cross-selling our expanded capabilities across the platform. The resiliency of the core business also continues to be evidenced by our ability to perform despite atypical adverse weather conditions in Texas, and the continued impact of COVID-related factors in certain markets during the quarter. While we have seen a reduction in COVID-related cases in our business, the pandemic continues to present logistical challenges in certain areas of our business, including material shortages in landfill liners, building materials, and more recently, fuel. But despite these impacts, our teams are working together to execute efficiently and safely. Our net revenue performance at approximately 82% of gross revenues continues to demonstrate our shift towards more self-performance of work through an expansion of services provided to customers while reducing our reliance on third-party vendors. Our adjusted EBITDA of $14.5 million also came in 12.7% stronger than Q1 of 2020. M&A continues to be a key piece of our growth strategy, exemplified by our recent AEL acquisition. This acquisition broadens the reach of our testing and inspection services in the northeast region of the country. We are confident that AEL will be accretive to earnings and deleveraging to the business as is fundamental to our strategy. The M&A pipeline ahead of us remains robust, which will afford us an expanded capability to accelerate closing new deals positioning us to surpass the Annualized revenue acquired in 2020. Now, please turn to slide six. Internally, we characterize our gross revenues by four major service lines, comprised of testing, inspection, and certification services as the largest category, followed closely by environmental. Then we have program, construction, and quality management, or what we call PCQM. And then finally, engineering and design. I would like to point out that margin performance across each of these service lines is relatively similar. In the first quarter, our testing, inspection, and certification, or TIC services, contributed approximately 34% of our gross revenues, in line with 2020 levels. Our TIC services continue to be a strength of Atlas as codes further tighten with the addition of new building materials and construction methods and the increased demand for independent third-party verification of field and design services in both private and public sector markets. Also, in line with prior year results, our environmental service line represented 32% of our business volume, including services such as site assessment, remediation, air quality, compliance, and building sciences. We provide these services to all of our end markets with growth anticipated from policy tailwinds associated with ESG and sustainability as a top priority of the current administration, as well as interest from communities and clients in protecting their vital resources. We are confident we will expand this large component of our business via expanding new ESG and sustainability opportunities we are seeing and bidding in our pipelines. Our PCQM service offering contributed approximately 18% of our gross revenues. We have recently announced the number of project wins in this category as states continue to outsource professional services. This service line grew during COVID last year, partly due to state DOTs using reduced traffic flows as an opportunity to accelerate transportation work. We continue to see positive momentum here as states continue to find creative ways to fund infrastructure, for example, private-public partnerships and tolls. We anticipate continued growth in these areas of the business as outsourcing continues to trend upward, with further potential upside related to policy tailwinds that would naturally follow the possible passing of a federal infrastructure bill. Our engineering design business grew proportionately to 16% of our gross revenues compared to 14%, for the full year 2020. For the same reasons previously mentioned, our E&D services continue to benefit from outsourcing of design quality assurance services and is positioned to benefit from any federal stimulus-related infrastructure funding. Across our business lines, we are seeing broad improving in-market fundamentals in terms of both government-based and private sector work. Recall that significant portions of our private sector work in New York and Northern California were delayed in 2020. So we are pleased to see a continued recovery in these regions. Our government-based work, namely highways and infrastructure, is gaining momentum as demand for our mission-critical professional services continue to be one of the most dependable aspects of our business. However, in a couple states, we are experiencing some minor project start delays as well as budget impacts. We also continue to see states prioritizing infrastructure investments and finding creative ways to fund projects with or without the support of federal stimulus. Now let me address our new awards and backlog on slide seven, please. First quarter backlog increased to yet another record of $689 million, with major wins across all of our service lines and geographies. This includes major awards for our environmental services in the southeast and northeast regions, for PCQM in the southeast and central regions, and for TIC in the central and west regions. The success we are seeing across all regions and all service lines is expected to continue, and we are invigorated by the increasing frequency and scope of opportunities which we expect to continue driving our growth. Large projects, which we define are those above $5 million in value, grew from 16 contracts just a year ago to 28 currently. We would emphasize that even our large projects are billed as time materials and therefore are consistent with our lower-risk project profile strategy. This is a meaningful point relative to our strategy to increase the average size of our contracts by cross-selling more services and generate revenue synergy from acquisitions. This is the precursor to accelerate revenue growth longer term. It is important to note that we have updated the calculation of backlog to better reflect how we book business and to more closely match common practices of those in our industry. As our large project wins have increased in size, we believe our updated backlog methodology better captures the full scope of each multi-year project opportunity. I will also mention that our backlog maintains the practice of only including projections for fully executed contracts. For comparability, under the prior methodology, first quarter backlog increased to record $641 million, up sequentially from $628 million at the end of 2020. On this slide 8, we highlight how Atlas is positioned to better from potential passage of the proposed federal infrastructure bill. I want to remind you, and this is important, we assume no impact in our guidance from this proposed legislation. Any benefit from this package would be entirely incremental to our existing guidance and to our longer-term outlook. So as shown on the slides, roughly half of the contemplated spending bill would be in markets addressable by Atlas, with transportation being the biggest, followed by housing and education, and finally water and utilities. You can see under these categories the services we provide. We look forward to working with federal, state, and local governments to provide our services in each of these areas in the event this bill is passed. As you can see on slide nine, the execution of our growth plan has resulted in a top line revenue category of approximately 20% since 2016. And the addition of AEL in April, along with solid organic growth, are the drivers behind our increased guidance for 2021. Now turning to slide 10. I'd like to briefly highlight the incremental value we have derived from M&A, looking at the long engineering acquisition as an example, which marked its one-year anniversary as an Atlas company in mid-February of this year. This is a good example of how we've integrate accretive, deleveraging acquisitions into our business, and convert them to growth. This acquisition accelerated growth for Long and Atlas through cross-selling revenue synergies, and we're on a path to replicate that success with our more recent acquisitions of AltaVista, West Test, and eventually AEL. The Long acquisition furthered our goal of helping our clients meet increased levels of ESG compliance. Some of the projects that have resulted from the collaborative work of this team include additional work with the Texas and Georgia Departments of Transportation, as well as new projects in Alabama, Virginia, and the Carolinas. In summary, I'm very pleased with our results for the first quarter and how our actions have positioned us to increase our outlook across the balance of this year. With that, I'll turn to David, please.
spk07: Thanks, Joe. And good afternoon, everyone. Please turn to slide 11. Before I discuss our results for the quarter, I wanted to address the SEC's recent comments about warrants issued by SPACs, which will have no impact on our current or future results. In April of this year, the SEC issued a statement regarding accounting and reporting considerations for the reclassification of SPAC warrants from equity to liabilities. Given that we completed the exchange of 100% of our warrants for common stock in November of 2020, there is no impacts to our financials for the first quarter of 2021 or expected moving forward. A more detailed summary of our assessment of the historical periods related to this can be found in our 10-Q. Now, returning to the discussion of our results, In the first quarter, gross revenues of $123.3 million were up 13% compared to the prior year quarter, driven by strong execution in all of our service lines and attributed to both organic execution and contributions from recent acquisitions. Growth was strongest in our engineering and design services line, this quarter making up approximately 18% of our overall revenue, as we see the benefit of larger project and program opportunities converting and entering our portfolio. Net revenue of $101.6 million was 12.3% higher than the prior year period and represented approximately 82% of gross revenues continuing to reflect our strategy to cross-sell and self-perform more work. Due to the seasonality inherent in our operations, utilization levels were down modestly in the first quarter but are showing improvements in the early spring as the field-intensive season begins to ramp up. Like many businesses across the country, we are feeling some impact from resource pressure and scarcity. In response to this, we have expanded our internal recruiting team to expedite hiring the necessary and qualified candidates. Adjusted EBITDA of $14.5 million represented 14.3% of net revenue, just up from 14.2% in the prior year quarter. Higher revenue was the primary driver of EBITDA growth, which partly offset some impacts to project mix and the return of staff costs as we add resources ahead of our seasonally larger second and third quarters. For the first quarter of 2021, we produced adjusted net income of 11.1 million and adjusted earnings per share of 78 cents per share. Adjusted net income and earnings per share exclude the impact of non-recurring items for transaction costs as well as amortization of intangibles related to acquisitions, recapitalization costs, and other costs. While adjusted net income provides a clearer picture of our underlying earnings momentum, I am very pleased to note that the transaction costs associated with our business formation, public company formation, warrant exchange offer, and balance sheet recapitalization are now behind us. We therefore anticipate that operating cash flow for the remainder of the full year 2021 and into 2022 will better reflect the underlying fundamental earnings and cash generating power of Atlas. At this point, I'll recap the improvements being made to our capital structure on slide 12. As previously announced, In February, we completed a significant recapitalization of our balance sheet. Our goal was to have a simpler capital structure to better support our growth objectives through both organic expansion and deleveraging M&A. We achieved this transformation of our balance sheet through several transactions, using the proceeds to repay the $270 million of outstanding borrowings under our prior term loan, and fully redeeming all outstanding preferred equity units at par. These strategic actions accomplished the following. First, they dramatically simplified our balance sheet. Second, we lowered our aggregate interest rate on debt by approximately 100 basis points. we increased our access to liquidity by roughly $116 million over the next two years. And last but not least, we extended our weighted average maturity on debt by two years to 2028. We believe Atlas is now better positioned to reduce net leverage through a combination of higher cash flow and anticipated EBITDA growth given our expanded capital base to execute on organic growth, and deleveraging M&A through 2022. The projected cash outlays on wall rings over the initial two years are expected to total $21 million. And it is worth noting that with the recapitalization, we will now have higher reported interest expense, whereas under our previous structure, preferred stock dividends did not impact net income. This shift from preferred dividend to interest operating expense saves cash. However, it is important to note the change in how this will be reported going forward. Since year end 2020, we've provided for the voluntary conversion of Class B shares to Class A shares, which has further expanded our Class A public shares to over 31 million, or roughly 88% of our total shares outstanding. The elimination of our preferred equity and refinancing of higher-cost debt was aligned with our goal of deleveraging our business and delivering even stronger returns to our shareholders. We were pleased to generate modest cash flow from operations during what is typically our softest seasonal quarter as we recharge and ramp up our resources in advance of the field-intensive quarters. With the public company transaction behind us and a cleaner balance sheet, we will see a more normal cadence of cash generation as we move forward. In line with the typical seasonality of our business, we expect the third and fourth quarters to be our strongest quarters for cash generation. With this, we continue our focus on improving and prioritizing reducing our net leverage ratio. and expect to achieve a full-term reduction in 2021 in the furtherance of our longer-term goal of being below three times net leverage. Moving to our full-year outlook on slide 13. I will remind you that we changed our operating calendar to a 4-5-4 schedule at the end of last year, which divides our year into four 13-week quarters. grouped into two four-week months and one five-week month. This change provides for increased administrative efficiency and improved comparability of our quarterly performance moving forward. The prior year 2020 comparisons will not be adjusted for this change and will continue to be shown on a calendar month end. With that out of the way, let me move to our updated outlook for 2021. I am pleased to communicate that we are raising our full year 2021 guidance for revenue to be in the range of $520 to $540 million from the previous range of $500 to $520 million. This reflects the addition of AEL in April, the strength of our backlog, and the current visibility on the timing of work as local economies continue to improve. We now anticipate adjusted EBITDA to be in the range of $73 to $80 million, up from the previous range of $70 to $76 million, driven by the same factors, as well as continued operational efficiencies and vigilant cost management. This applies a 22% increase in adjusted EBITDA at the midpoint compared to the full year 2020 results. In addition, we continue to expect improved operating cash flow in 2021. Thank you, and I'll now turn the call back to Joe for closing remarks on slide 14.
spk06: Great. Thank you, David. We are proud of how Atlas has performed since becoming a public company. our business delivered another solid quarter of results in Q1, and our organic growth efforts are gaining steam as we grow our revenue synergies. We believe this performance continues to validate our resilient business model and the strength of our leadership team to adapt, scale, and be successful in all market environments. Our execution and unrelenting commitment to safety gives us confidence that we remain extremely well positioned to capitalize on the nation's continuing economic recovery and particularly the growing national commitment to infrastructure investment. I firmly believe in the power of this organization and our ability to deliver strong margin performance and continued earning growth, all while rapidly deleveraging our balance sheet. I look forward to continuing our positive momentum for full year 2021 and beyond. So thank you again for joining us. Operator, we can now open up the lines for Q&A, please.
spk01: Thank you. At this time, we will be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Brent Thielman with D.A. Davidson. Please proceed with your question.
spk10: Great. Thanks. Good evening. Congrats on a good start to the year. Thanks, Brent. Thanks, Brent. Appreciate that.
spk02: Yeah, I guess first question, just the thoughts around the raise and the guidance early on to start the year. You obviously have the AEL contributions. Just wanted to get a sense how much is related to that and how much reflects really just more optimistic outlook for the business.
spk09: Yeah, so it's sort of our practice not to disclose specific details on financials related to bolt-on acquisitions, but to give you a sense of scale for the business, Brent, it's about a 275-person firm. If you look at the balance of business, the volume they generate won't be too far off from what we currently do. But let me just give you a little more of an appreciation of what our thinking was relative to driving the guide. So first of all, We delivered a better than expected organic growth level in the first quarter. I think the last time we've spoken with you, we said we expected to pierce through and recommence organic growth in the first quarter. We delivered 6%, so we're pleased about that. We re-evaluated our backlog thoroughly and the timing of our expected work in 2021. So we see some upside relative to that, particularly in the resilience of our government-related transportation infrastructure business. And we're also seeing increased opportunities as we're in the full suite of our environmental solutions capabilities. to market. I'd also mention we're confident that we're well positioned to benefit from expanding federal, state, and local infrastructure investments. However, we haven't included any stimulus dollars in the guidance that we provided. And, of course, to your point, lastly, you know, we did build in the contribution of AEL. We got that done in April. And, you know, we're confident they're going to deliver quick revenue synergies as they join the platform.
spk02: Okay. Very good. And then maybe a little more color on the regions or the units driving that 6% organic growth this quarter. And then I'd love to, I think the environmental services piece of the business had been more impacted by sort of COVID and COVID protocols, maybe where that business sits today.
spk09: Yeah, so, I mean, we're seeing a natural movement back to pre-COVID operating level spread. So, there's just solid momentum, pent-up momentum, really, based on that. We are seeing, really, an increase across the board for the businesses. We've seen a nice rebound with our environmental and building sciences business. which was one of the components of the company that took a harder hit at the outset of COVID. And I would also just mention that we are really seeing the benefit of our strategy in revenue synergies prove out as we're across some across the platform. We are pursuing larger projects and programs, and we're securing larger projects and programs And I think this will be further evidenced as we move through the second and third quarter. You know, the magnitude of some recent selections on contracts and contracts that we bid that we have a high confidence we will win is really going to further cement, you know, the real underlying value of the synergies that bring these companies in.
spk06: Brian, let me add a couple things to that. This is Joe. I think it's fair to say that the administration's push on really renewables and sustainability. We are working on a few new projects now that have come out of that, renewables projects in the southeast, particularly doing really engineering services, site-fill engineering, inspection-type work, and development of some solar fields, both in Georgia and a larger one. called Twin Solar Farms. So basically, it's the renewables getting into our backlog that we hadn't had previously.
spk02: Okay, that's interesting. Maybe the last one would just be, I caught a few comments in the opening commentary just around costs, maybe some inflationary pressures out there. Maybe just your thoughts on the implications to margins, if any, to move through the year.
spk09: So, yeah, I think I would start with we definitely are seeing increased pressure on securing talent recently. It just requires a bit more to get people in the door. You know, our response to this has been to double our in-house recruiters. to identify and secure the right talent for our projects, particularly as we're growing and ramping up in advance of the field intensive season. We believe we do have an edge here relative to this. As a company, we're very focused on culture and growth and benefits and exciting projects. And when our experience, good technical talent, is attracted to these types of things. So this is what we're going to continue to promote. John, I think you probably have a couple things to add to this.
spk06: We are experiencing pressures on wages, particularly really since the first time that I've seen in a while is really around the technician level position. So we are having to pay a bit more than in the past to And that's really been coming out of COVID where we started seeing that impact. Remind you that our contracts are, you know, majority of the contracts are timing materials and cost-reversible. So although we might see a little bit of a tightness on margins just short-term, our contracts typically get adjusted. on an annual basis, we get that cost of living increased, if you will, on our labor. So we'll pick up that over time. I think it's a story issue. But as Dave said, we don't see it long term. And our recruiters are being able to locate the talent.
spk10: It's just taking a little longer than in the past. Okay, great. Well, thank you for taking the question.
spk01: Thank you. Our next question is from Noel Diltz with Stifel. Please proceed with your question.
spk03: Hi, guys. Thanks for taking my question, and congrats on a good quarter. Earlier in the call, you mentioned, I think, a little bit about some supply chain challenges, and we're hearing about that a lot within construction. Obviously, again, understanding your cost plus requirements I understand that aspect of the model, but could you comment on how you're thinking about just these higher raw material costs and also availability and if they could impact the timing of projects and if things might push to the right a bit? Thanks.
spk06: Absolutely. What we are experiencing directly to us is not so much our issues, our materials and Our labor costs outside of fuel has recently hit us as a cost increase to us. But what we are seeing is material shortages at some of our project sites, which are impacting delays. I can give you an example. In the Midwest, there is a pretty significant shortage of a resident in supplying landfill liners, which we do QA inspecting, CQA inspecting. especially with all those liners. Right now, those projects have been delayed. It's about to go on like its second month, and we expect to be getting back to those projects, but it still might be another quarter or so. So that's impacted us as one of the issues we're facing. Obviously, the other materials are really client-driven costs. So we haven't seen a significant delay. I just would say postpone to the right, shift it to the right, and project delays for continuation.
spk03: Okay, thank you.
spk06: Let me say one more thing. Obviously, one of the issues we're facing is obviously just the availability of trusts are defined with the microchips and stuff. So we're hanging on to our trust a little bit longer than we had planned, but we're dealing with that as well.
spk03: Okay, great. Really helpful. And then I know that you kind of mentioned that most of your business units would benefit from an infrastructure bill. But, you know, given that a fair amount of your work is, you know, maintenance and kind of recurring, should we really think about this as impacting, you know, the 30% more tied to new build? You know, just any additional color on how to think about kind of, you know, the size and size you know, where to think about the most benefit, going to the company would be helpful. Thanks.
spk06: Sure. I think Dave had mentioned that, you know, we don't have any of the infrastructure bill windfall in our guidance. I would say, General, first of all, I'm pleased to see a bill. It's long overdue, but glad it's out there. I think it would do a lot to improve our nation's infrastructure. We're well suited for it because our services are completely in line, and we're already doing it. And the significant amount of the investments going into transportation, which is a huge number. You know, they're going to revamp 20,000 miles of roads and bridges. We do those inspections every single day. It's in our wheelhouse. So it's also talking about... Upgrade supports at airports, which we're working right now as well. So it's really, again, in our sweet spot. One of the areas we like is the $378 billion that's going to housing and education. That's an area we're strong in. It helps our building sciences group as well. So it's another area that I think sits completely in our wheelhouse of strength, and we think we can help our clients in those areas as well. So, you know, we see about half of that bill as accessible to really strong adult services. Okay. Hopefully that it comes through, right? And, of course, obviously anything that is pushed through an environmental, that's sort of our business as well.
spk03: Right. Okay, that's great. And then... I know we've kind of talked about this before, but any guidance on how, given all of the changes in the capital structure, can you give us any guidance on how you're expecting interest expense to shake out for the year?
spk10: I'm sorry, how we're expecting what?
spk03: Interest expense.
spk09: Interest expense. Yeah, interest expense for the year is... We'll end up being, let me see, excluding the deferred financing write-off. We'll be somewhere around $35 million, $36 million for the year, for the full year.
spk03: Okay, perfect. Thanks very much.
spk01: Thank you. Our next question is from Rob Brown with Lake Street Capital Markets. Please proceed with your question.
spk05: Good afternoon, and I'll add my congratulations to the quarter.
spk10: Thank you, Rob. Appreciate that.
spk05: The first question is on M&A. Could you help us kind of characterize the M&A pipeline in terms of the types of companies you're looking at, maybe the sectors you're looking at, and sort of the size of the acquisitions in the pipeline?
spk10: Sure.
spk06: So let me say that just characterizing the pipeline to start off with, we're It's exceptionally strong, probably the deepest that I've seen it since we started. I think we're becoming more of a choir of chores, as I mentioned in the past. And the firms are still right in the sweet spot of the services we're looking to perform, which is this infrastructure services side, environmental. I wouldn't say that the size of those firms are anywhere from you know, our typical $5 million EBITDA to much higher into a more substantial acquisition. So they're all in that range. I think one thing to note in the M&A pipeline is that we're still in our model of being half cash, half stock. It's still an attractive model for many of the firms in our pipeline. They're excellent technical capabilities. They meet our performance goals. and they do have a match in our culture. So very, very important what we're looking for in regards to that. I think one thing I have noticed is within the last year, a slight increase in multiples, particularly in the space, in the transportation services space, being slightly higher. Other than that, there hasn't been a lot of change in the model that we laid out and been successful at in the past. With our expanded capital, Rob, in the DDTL that we just secured in our new capital structure, we have a lot of activity and expect to really be able to exceed our acquisition contributions that we realized in 2020.
spk05: Okay, great. Thank you. You talked a little bit about your pipeline having more volume and size and talked about some of the things, but I just want to dig in a little bit on what's driving the increased size of the projects that you're bidding on or potentially winning. Is it really your cross-selling activity, or are there just bigger projects in the market? If I can understand that.
spk06: I'd say, Rob, both. There's more large projects, particularly in the transportation space. that are P3 funded type projects that are more of a consortium type are increased as we've added firms to our platform. We've increased our service capabilities as well as the depth and the width of our technical capabilities. So not a lot of firms that fit that space. We've always had a strategy to pursue larger projects, which to us aren't more risky here. Don't forget, we're still in the It's just more risky than this year, but still in the space of low-risk kind of materials. They squarely fit in our service model. There's services we do in and out and have tremendous technical capabilities to perform that. And again, of course, we're not taking on construction. So it's still a lower-risk project. It just happens to be larger. And we see several of those opportunities every year.
spk10: Okay, great. Thank you. I'll turn it over.
spk01: Thank you. Our final question is from Catherine Thompson with Thompson Research Group. Please proceed with your questions.
spk04: Thanks for fitting in today. So, a lot of the questions have been answered, but just a clarification on a few points. And you went into this on backlogs, but if you're going to step back and look, how is the mix of backlogs today different versus 12 to 18 months ago. So in other words, different types of projects or there's different geographies. We've already talked about the size, but giving more color in the change of backlogs versus 12 to 18 months ago. Thank you.
spk08: Yeah, sure. Thanks, Gavin. This is David. I'll take that.
spk09: So, you know, there hasn't really been a huge change in the mix. I would mention that we have seen an uptick in our engineering and design. and PCQM-related opportunities, probably not surprisingly, based on how transportation and infrastructure has proved strong through COVID. I will say that, again, looking back at the expansion of the platform, the increased capabilities of the platform in our reach, we're much better positioned to go after bigger projects and programs. And as a result, we're winning them. So if I look at you know, our current portfolio and, you know, contract backlog. Pick a number. We've said, you know, a large projected contract is $5 million for us. You know, we've seen an increase from 16 just a year ago in the portfolio to 28 at this time. So, a marked increase in, you know, the magnitude of projects and contracts that we've been able to bid, win, and bring into the portfolio.
spk04: Okay. And I guess to follow on to that, would you say that that is some of the primary force driving the 6% organic growth in the quarter, which is a magnitude better than it had been previously?
spk09: Well, so certainly it contributes to that, right? But if you look at actually our backlog growth quarter over quarter, and again, part of it being, you know, us reassessing the longer-term revenue capacity in our contracts, right? That's why I actually grew 10% quarter over quarter. We feel very good about this refresh that we made and the ability it's going to have to propel revenue through the balance of the year. Again, I think for the full year, we're looking at probably 68%. organic growth, and if you look at our projection at the mid on revenue, it's like 13.5%. And of course, if you go EBITDA, not to leave EBITDA out of it, we're projecting a 22% EBITDA increase at the mid over our full year 2020. So we are really pleased in terms of the year-over-year progress and the momentum we're seeing with the business.
spk04: Okay. And just a final question. Yeah, when we last spoke, activity was largely back to pre-COVID levels, with the exception of your environmental building science services in the Northeast because of the COVID lockdown restriction. Given, you know, changes in the environment, How is that trending now? And is there a chance it rebounds back and above pre-COVID levels due to postponed work that needs to be completed? Or you'll still see some of the constraints from labor that'll keep it at a muted level?
spk10: Kat, this is Joe.
spk06: So I would say that our building sciences group you're referring to, I would say right now it's likely 70 to 75% capacity. Not so much related to wage issues or technician levels, but really clients lining up, funding, going to the Northeast, funding and task order hand out to us to complete that work. And some of it held up because the schools are still in progress. I would say that it would likely get up to, well, we're hoping that it'll get up to at least COVID levels sometime in the next quarter. And luckily, we do anticipate growth in that sector as it relates to building sciences, COVID-related issues, and anything that might come from the bill in regards to education is really going to benefit our building sciences sector.
spk04: Okay, great. Thanks very much and a great quarter. Thank you. Thanks, Kathleen.
spk01: Thank you. Ladies and gentlemen, we have reached the end of the question and answer session. I will now turn the call over to Joe Boyer for closing remarks.
spk06: Thank you, operator, very much. I want to thank everybody for joining us today. We appreciate your support of Atlas and look forward to updating you on our progress in the future. So thank you.
spk01: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation, and have a great day.
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