Atlas Critical Minerals Corporation

Hello and welcome to the Atlas Technical Consultant second quarter 2022 conference call. Currently, all participants are in motion-only mode. A question and answer session will follow the formal presentation. If anyone should require operator's 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 take the call over to your host, Jonathan Parnell, Chief Strategy Officer of Atlas. Thank you. You may begin, Mr. Parnell.

Good morning, and thank you for joining us. We hope that you've seen our earnings release issued after the market closed yesterday. Please note that we have also posted an updated investor presentation, which can be found in the investor section of our website at ir.oneatlas.com. Before we begin, I'd 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, uncertainties, 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'll 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 earnings release and filings for reconciliation of these non-GAAP measures to their most directly comparable GAAP measure.

I will now turn the call over to our CEO, Joe Boyer. Thank you, Jonathan, and I appreciate everybody joining us today. On today's call, I'll provide an overview of our second quarter results, what we're seeing in our core markets, and updates on our strategic priorities. Then David will continue with the discussion of our second quarter financial results and our outlook for the remainder of the year, and then we'll open up the call for questions. The second quarter was another strong period for Atlas with record revenue, adjusted EBITDA, and backlog. These results clearly highlight the successes we are seeing in our strategy to build a national leader in high-value, mission-critical technical services to both infrastructure and environmental markets here in the U.S. In the quarter, we generated 19% revenue growth, including an acceleration of our organic revenue growth to 8%, over 17% adjusted EBITDA margin, and sequential backlog growth, all to record levels, and cash flow improved in line with typical seasonal patterns. Our 8% organic revenue growth in the quarter is one of the best quarterly organic growth rates we've recorded as a public company. The strong organic growth in the quarter was driven in part by the robust backlog growth we've experienced over the past several quarters. Fundamentals in our key end markets and geographies remain favorable throughout the quarter. We saw particular strength with our transportation, state and local government, and power clients, all of which we expect to remain key growth drivers for Atlas moving forward. We also continue to see benefits from increased cross-selling of services across the Atlas platform, including recently acquired services. As we've scaled the business and added strength to our technical service offering, we're gaining greater share with our clients and winning more marquee projects. To provide you with a better idea of how the strategy is benefiting Atlas, Let me take a minute, please, to describe a few projects we believe really highlight this success. In California, where we've had a long-standing relationship with Caltrans, we were able to leverage our success with them on construction, engineering, and inspection services into a statewide materials engineering and testing services contract, increasing the number of services under the Atlas umbrella that we are providing to this customer. In Idaho, We were recently awarded a $5 million construction engineering and inspection project in our program construction and quality management service line. This is our first transportation-related PCQM award in the state, where we have previously mainly provided testing, inspection, and certification services. Again, an example where we are cross-selling a key customer with additional services. Switching to the private side of our business, in the Southeast, where we have historically provided utilities with smaller environmental-related services on a one-off task order basis. We have leveraged our experience, scale, and breadth of capabilities into a $25 million long-term master engineering and environmental services contract, one of the nation's largest utilities. We are also expanding our services with large national government agencies. For example, we've been providing the Department of Energy with geotactical services at one of its largest energy laboratories and are now expanding our scope with a $20 million program that includes testing, inspection, and certification services, which we hope to leverage to other sites across the country. While these are only some examples where we are seeing success with our cross-selling strategy, we believe they are great examples of the benefits of our strategy and highlight how it is contributing to growth across the Atlas platform. In addition to strong revenue growth, we had a record gross margin of 60.4% in the quarter when excluding pass-through subcontractor costs. This margin performance is a testament to our high-quality services Atlas offers and demonstrates our ability to pass inflationary pressures through to our clients. Backlog at the end of the quarter reached another record level at $855 million, up modestly from last quarter and up 14% from last year. As we've talked about with cross-selling, we're winning work across all of our end markets and across all of our service lines. Importantly, We continue to see demand being driven by long-term secular themes as our customers drive to improve their environmental sustainability and to improve the overall efficiency of their existing infrastructure. Beyond our $855 million backlog, we have approximately $155 million of awards pending contract execution, which is significantly higher than the $110 million we had for last quarter and marking the first time the combination of these figures is greater than $1 billion. As we've discussed, the backlogs and awards figures can be lumpy from quarter to quarter due to the seasonality of our business and the impact of large project wins, which we expect to continue to be a key growth driver for Atlas going forward. And as we look into the second half of the year, We continue to see solid demand for our services, especially in our core transportation and environmental-related end markets, driven by the underlying secular themes such as the aging of a nation's infrastructure and increased focus on environmental sustainability. While we are cognizant of the factors impacting the broader macroeconomic environment and the risk it can pose to demand for certain services in our markets, we believe we are well positioned to navigate any volatility that may be on the horizon. First, I'd note that our services we provide to end markets that are most sensitive to higher interest rates and general macroeconomic conditions, such as new build commercial construction and real estate transactions, are a relatively small piece of our business. Secondly, and probably most importantly, Nearly two-thirds of our business is tied to existing assets and services that are driven by non-discretionary spending because they are tied to regulatory compliance, ongoing testing, and maintenance, making demand for our services relatively resilient through most economic cycles. Driving organic growth remains one of our top priorities, and we believe we are in a good position to do so given the nature of the services we provide, the diversity of our in-market exposure, our robust backlog and award pipeline, as well as our thorough cross-selling initiatives. Beyond driving organic growth, we have a proven strategy that broadens and enhances our technical service offerings and geographic footprint through strategic acquisitions. Our M&A playbook is based on identifying targets with quality management teams that can enhance or expand our service offerings and our regional presence. integrating them into the Atlas structure, retaining their key employees, and then scaling the business across our platform, including the cross-selling of services. In the first quarter when we acquired Transmart, we talked about being able to leverage their expertise in intelligent transportation systems and electrical engineering across our national customer base. And we are already seeing opportunities here and are currently working to position Atlas for electric vehicle charging infrastructure opportunities in Georgia on projects that will be funded through the National Electric Vehicle Infrastructure Formula Program. Transmart's unique blend of transportation and electrical engineering capabilities places us in a strong position to pursue these types of opportunities in the $5 billion NEVI program. We are also building on relationships that come to Atlas through our acquisitions. Last year, we acquired O'Neill Services Group, a premier construction quality assurance and environmental services firm based in the Pacific Northwest. We're leveraging their strong relationships that were brought to us through the acquisition to establish a strategic alliance with a large national infrastructure construction company. The alliance will allow Atlas to seamlessly provide them with environmental quality assurance and inspection services positioned our company for additional work on major infrastructure projects with them across the U.S. As we continue to grow, we remain committed to strengthen our capital structure and are constantly evaluating all options that could drive shareholder value. We reduced our total debt in the quarter. Leverage was down modestly from last quarter. And based on our earnings forecast and robust cash generation outlook for the second half of 2022, We expect a further improvement in the leverage ratio in the coming quarters. We are confident that our M&A strategy will continue to drive outsized growth and improve our leverage ratio. We have a robust M&A pipeline with proprietary candidates. However, we maintain a disciplined capital allocation strategy, and we'll continue to ensure that any partnership we pursue will be highly accretive to our shareholders, deleveraging and will position analysts for continued success during all stages of the economic cycle. Lastly, I'd like to reiterate our commitment to ESG. In June, we issued our inaugural ESG report titled Leading with Heart. The report highlights the progress we've made internally as a company on related topics, as well as how we help our customers meet their ESG objectives. We have also set goals that will shape how we operate as a responsible and sustainable company and how we serve our customers and cultivate an outstanding workplace. With that, I'll turn the call over to David to provide details on our financial performance and outlook, and I'll come back with a few closing remarks. David? Thank you, Joe.