Montrose Environmental (NYSE: MEG) reported Q1 EPS of ($0.62), $0.54 worse than the analyst estimate of ($0.08). Revenue for the quarter came in at $133.8 million versus the consensus estimate of $95.36 million.

First Quarter 2021 Highlights

• Total revenue of $133.8 million increased 119.3% compared to the prior year quarter.
• Net loss of $11.6 million compared to a net loss of $41.2 million in the prior year quarter. Net loss for first quarter 2021 was primarily due to non-cash fair value adjustment expenses.
• Adjusted EBITDA1 of $16.8 million increased 202.5% compared to the prior year quarter.
• Adjusted EBITDA margin1 improved to 12.6% compared to 9.1% in the prior year quarter.
• Acquired MSE Group, a premier provider of environmental planning, permitting and remediation solutions primarily to the U.S. federal government.

“We are pleased to have started 2021 on a solid footing. Though the business is best assessed on an annual basis rather than on a quarterly basis, the strong start coupled with our team’s optimism across all parts of our business is causing us to increase our guidance for 2021,” stated Vijay Manthripragada, Montrose’s Chief Executive Officer. “Our investments in environmental R&D and commercialization and the response capabilities of our team at CTEH continue to add value to our customers and support our performance and outlook.”

Mr. Manthripragada continued, “The economic and political dynamics in our key markets continue to create opportunities for Montrose as customers look to create value through environmental stewardship. For example, some of our customers are voluntarily accelerating their emissions reduction targets to align with the recently announced long-term emissions goals in the U.S. Such developments create tailwinds for each of our business segments, and I believe they validate our uniquely integrated approach to the environmental industry.”

Full Year 2021 Outlook

Because demand for environmental services does not follow fiscal quarter patterns, the Company’s business is best assessed on yearly results. Given its strong start to the year and strength across its segments, the Company expects full year 2021 Adjusted EBITDA1 to be in the range of $63.0 million to $70.0 million, which is increased from its prior full year 2021 guidance of $61.0 million to $67.0 million in Adjusted EBITDA1. This upgraded outlook reflects anticipated year-over-year revenue growth in excess of 20.0% at the mid-point and is primarily attributable to the timing of strong first quarter revenues.

The current outlook is based on a combination of mid-to-high single digit organic growth plus the contribution of completed acquisitions. The outlook does not include any benefit from future acquisitions that have not yet been completed.

We have successfully grown revenue in excess of 20.0% every year and expect to exceed that threshold in 2021. In addition, we expect to continue adding strategically and financially accretive acquisitions that are not yet reflected in our 2021 guidance or outlook.

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