Atlas Critical Minerals Corporation

Hello and welcome to the Atlas Technical Consultant second quarter 2021 conference call. Currently, 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, you may press star then zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Mr. David Quince. Chief Financial Officer of Atlas. Thank you. You may begin, Mr. Quinn.

Thank you for joining our second quarter 2021 earnings conference call. We hope that you have seen our earnings release issued after the market closed 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 and 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 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 operations update. I will continue with the discussion of our financial results and outlook before we open up the call for your questions. At this point, I'll turn the call over to Joe to pick it up on slide four.

Thank you, David. And good afternoon and welcome, investors. This truly is an exciting time for all of us. You know, in my 32-plus years This may be the best market that I've had the opportunity to participate in. And we're seeing drivers aligned to produce tremendous demand for renewed investment in our aging infrastructure and the natural environment. Things I haven't seen in my entire career. And I'm excited to be leading Atlas into it. Our company is purpose-built to ensure quality, longevity, and sustainability in our nation's public and private investments in the natural and built environments. I'm proud to represent 3,600 plus Atlas associates working hard on mission critical projects across the US, such as the neutrino facility at the South Dakota Sanford Underground Research Complex, which demonstrates the expanding range of our technical capabilities. it's just one of many critical infrastructure projects across the country where our teams are making a purposeful impact on our world now today I'll detail three key themes which not only reinforce the purposeful work that we perform but also the earnings power of our business and the value creation for our shareholders first Our positive 2Q results demonstrate the predictability of the Atlas platform through solid execution by our teams, delivering record revenue and margin growth through the cross-selling of integrated acquisitions. Secondly, Atlas is focused and well-positioned in growing public and private end markets that are being propelled by strong and expanding macro tailwinds that are in addition to those proposed in the Federal Infrastructure Bill. And lastly, our ability to successfully win work in all service areas and to consistently advance our acquisition integration strategy are contributing to our growth and our record backlog, which provides confidence in our outlook in the second half and into 2022 and beyond. Now let's turn to slide five, please, to discuss the highlights of our results. I'm very pleased with the continued strong performance in the second quarter, thanks to the execution by our teams and the continued in-market demands for our services. We had nearly 17% year-over-year revenue growth with acquisitions performing as planned. Our adjusted EBITDA was $18.2 million, which was in line with our expectations, and an 18% increase year-over-year. We had a tremendous quarter in winning work as our backlog was up to yet another record at 751 million with another roughly 150 million of new awards that are pending contract execution that have yet to be added to our backlog. Our results show increased in-market momentum while battling some sluggishness in the public markets and continued impacts of COVID. We did execute on our plan and positioned ourselves to deliver growth and increase profitability in the second half of the year and beyond. Now M&A continues to be a key piece of our growth strategy as exemplified by the acquisitions of AEL and OSG during the second quarter. And I'll discuss these accretive deleveraging acquisitions in greater detail shortly. Unlike any time in my career, We continue to benefit from strong secular tailwinds that are driving growth in our markets and service areas. Our aging infrastructure requires critical investment to curtail further deterioration and necessitates upgrades to extend their useful life. Recent building and bridge collapse tragedies remind us all of the importance quality assurance and asset monitoring plays in keeping us safe, which is driving growing demand for a higher safety, regulatory, and code compliance environment. We continue to see growth in outsourcing by state DOTs, cities, and municipalities for project and quality assurance services to companies like Atlas. and the growth of environmental, social, and governance, or ESG, has increased awareness and demands on sustainability and societal impacts of infrastructure assets. Our clients are looking for healthy buildings in which to operate, protect their employees, and build a more sustainable future. In addition to these macro drivers, the Senate just passed a trillion-dollar infrastructure bill which has the potential to accelerate investment in the vast array of infrastructure. And at Atlas, we're exceptionally well positioned to benefit from the infrastructure bill. A large part of the contemplated spending in the bill is core to our service offerings, and it's in markets addressable to Atlas from transportation to housing and education, and finally water and utilities. We look forward to expanding our support for our government clients, partnering with them to deliver innovative and effective solutions. I want to remind everyone, our current guidance does not include any benefit from incremental investment arising from the passage of the federal bill. Now on a micro level, we are seeing state transportation work ramping up recently in Texas, Georgia, Indiana, Utah, and California, to name a few, with some significant-sized projects planned for kickoff in Q3 and Q4. New federal work in general continues to be slow to get started, but water and wastewater services are showing signs of increased planning and bidding, with federal stimulus funding in states supporting lower project interest rates. And finally, the level of activity supporting education in New York, Detroit, and Boston has increased in our building sciences group, showing signs of second half expansion. Please turn to slide seven. I would like to highlight the increased demand for environmental solutions services, which increased to over a third of our revenues in the quarter. Our environmental work touches all in markets, and we're particularly proud of these contributions to ensure our children have safe and healthy educational environments to learn, socialize, and flourish in. This includes analytical testing of the water they drink and the quality of the buildings they populate, and when construction is necessary, making sure it is done safely and with quality. Now I'd like to highlight our ESG commitment and progress. Our core business is inherently connected by ESG, and environmental sustainability is the key responsibility of our work. Our ESG strategy really focuses on three key pillars, providing safe and healthy infrastructure, sustainable and resilient systems, and finally, diverse, equitable, and inclusive community. Our environmental solutions are central to our capabilities, allowing us to help our clients achieve their AST goals through analytical testing, planning, compliance, and remediation that resolves environmental concerns associated with air, land, and water quality. Now, as a heart-led organization, corporate governance and our core values serve as the foundation of our company culture. We've demonstrated our commitment to advancing diversity inclusion by appointing a chief diversity officer and forming a leadership council dedicated to our diversity and inclusion efforts. We have also launched seven employee research groups that foster a sense of community, belonging, and providing network support. At CEO, I've also joined the CEO Action for Diversity and Inclusion Coalition. It's important for me to lead as I've taken the pledge to do my part in reshaping our future beyond this company. Now let me talk about another highlight and address some of our second quarter key wins. We are enjoying an incredible quarter in winning a large number of major wins across all services and geographies. We saw particular strength in new awards in our PCQM and environmental solutions sales channels. As you can see on slide nine, the strength and diversity of our service offerings plays well to the increased demand for our infrastructure and environmental capabilities, which in turn drives backlog growth and future predictability. The success we are enjoying and winning work, it is a direct reflection of our effectiveness in integrating our acquisitions technical capabilities into our platform, and then cross-selling these expanded services to our client network. This strategy is at the core of our growing revenues, backlog, and continued competence in future earnings. Moving to slide 10, We added to our M&A accomplishments during the second quarter. In April, we acquired AEL to align with expected growth in our key markets of New York and New Jersey. And as expected, AELs performed solidly and began contributing to our results in the second quarter. But we also closed the strategic acquisition of OSG at the end of June, expanding our presence in the Pacific Northwest, which is a key growth focus area for us, and providing unique specialty services in light rail, construction quality assurance, and environmental solutions. OSG will begin contributing to our results in the third quarter of 2021. I'm excited about our M&A pipeline as it continues to be very strong with proprietary prospects. We continue to focus on strong, well-performing regional firms in geographies experiencing population growth, and offering creative alternative funding for infrastructure. Our strategy continues to focus on technical service expansion, which drives integrated cross-selling growth. We will continue to drive strategic, creative M&A deals funded with a mix of cash and stock that continue the progressive reduction of our net leverage. And with that, I'll turn the call over to David.