Q1 2021 Atlas Technical Consultants Inc Earnings Call
[music].
Greetings and 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.
Note. This conference is being recorded I will now turn the conference over to your host David Quinn. Mr. Cohen, you may begin.
Thank you for joining our first quarter 2021 earnings conference call.
We hope that you achieved on our earnings release issued after the market today.
Please note that we have also posted a presentation and supported this call which can be found on the investors section on our website and one Atlas Dot 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 and strategies expectations projections forecasts and assumptions our forward looking statements.
Please note that the Companys 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 will provide and certain non-GAAP financial measures today, including adjusted EBITDA adjusted EBITDA margins and adjusted net income and adjusted EPS.
Please see our release and filings for a reconciliation of these non-GAAP measures channel.
We are most directly comparable GAAP measure.
Moving to our agenda on slide three.
I'm 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.
Thank you David.
And 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 the first range of services to our customers.
I'm also excited to share and number of proof points with you today that demonstrate our focus and discipline to execute on our strategy and continue to.
To create long term value and for our stakeholders.
For the first quarter, we received nearly 13% revenue growth and <unk>.
13% increase and adjusted EBITDA, driven by a return to mid single digit organic growth.
Our results and achievements and the first quarter exceeded plan 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 ADL. They full service materials testing inspection and engineering firms and the New York and New Jersey markets.
That transaction closed in mid April and will contribute to our results beginning in the second quarter of 2021.
As you all know our 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 and acquisitive growth.
The recapitalization and enables us to expand the Atlas platform into new geographies.
Cross sell more services increased self performance of work and.
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 and projects and contracts coming into the market and our bidding pipeline as well as the success, we are achieving and 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 and the environmental transportation and infrastructure areas.
On the right side of slide four.
We show, an example of and impactful sustainable projects involved and an array of our environmental and engineering design services.
And our capabilities position us well to offer solutions to our clients, particularly for their long term sustainability objectives.
We're 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.
Moving to slide five please.
So now let's take a look at our first quarter highlights.
We are pleased by our first quarter results and how they position us to accomplish our objectives for this full year.
We delivered gross revenue of $123 million with 13% total growth, including positive, 6% organic growth fueled by expansion and 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 and taxes.
And the continued impact of COVID-19 related factors and certain markets during the quarter.
While we have seen a reduction and COVID-19 related cases, and our business.
The pandemic continues to present logistical challenges and certain areas of our business, including material shortages and landfill liners and 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 sales performance of work through and expansion of services provided to customers, while reducing our reliance on third party vendors.
Our adjusted EBITDA of $14 5 million also came in at 12, 7% stronger and Q1 of 2020.
M&A continues to be a key piece of our growth strategy exemplified by our recent <unk> acquisition.
This acquisition broadens the reach of our test and inspection services and the northeast region of the country.
We are confident that area 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 and 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 characterized our gross revenues by four major service lines comprise.
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 and PC QM.
And then finally engineering and design.
I would like to point out that margin performance across each of these service lines is relatively similar.
And the first quarter, our testing and inspection and certification or Chegg services.
Contributed approximately 34% of our gross revenues in line with 2020 levels.
Arctic services continued to be a strength of Atlas.
Codes further tightened with the addition of new building materials and construction methods.
And the increased demand for independent third party verification of field and design services, and 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 and remediation at air quality compliance and building Sciences.
We provide these services to all of our end markets with growth anticipated from policy tailwind associated with ESG and sustainability is a top priority of the current administration and.
As well as interest from communities and clients and 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 and our pipeline.
Our PC QM service offerings contributed approximately 18% of our gross revenues.
We have recently announced a number of project wins in this category as states continue to outsource professional services.
This service line grew during COVID-19 last year, partly due to state dot's using reduced traffic flows as an opportunity to accelerate and transportation board.
We continued 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 and outsourcing continues to trend upward.
And with further potential upside related to policy tailwind that would naturally follow the possible passage of a federal infrastructure Bill.
Our engineering and design business grew proportionately to 16% of our gross revenues compared to 14% for the full year 2020.
For the same reasons as previously mentioned, our A&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're seeing broad improving end market fundamentals in terms of both government based and private sector work.
Recall that significant portions of our private sector work, and New York, and Northern California and were delayed and in 2020. So we are pleased to see a continued recovery in these regions.
Our government base work, namely highways and infrastructure is gaining momentum as demand for our mission critical professional services.
And to be one of the most dependable aspects of our business.
However, and a couple of states, we are experiencing some minor project start delays as well as budget impacts.
We also continue to see states prioritize and infrastructure investments and finding creative ways to fund projects with or without the support of federal stimulus.
Now, let me address on 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, and the southeast and northeast regions for.
And for PC, QM, and the South east and central regions.
And protect and the central and west regions.
The success, we are seeing across all regions and all service lines is expected to continue and we and 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 and value grew from 16 contracts just a year ago to 28 currently.
We would emphasize that even our large projects or build 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 synergies from acquisitions.
This is the precursor to and celebrate revenue growth longer term.
It is important to note that we've updated the calculation of backlog to better reflect how we book business and to more closely match common practices of those and our industry.
And our large project wins have increased in size.
We believe our updated backlog methodologies better captures the full scope of each multi year project opportunities.
I will also mention that our backlog and maintains the practice of only including projections for fully executed contracts.
For comparability under the prior methodology first quarter backlog increased to a record $641 million up sequentially from $628 million at the end of 2020.
On this slide eight we highlight how Atlas is positioned to better from potential passage of the proposed federal infrastructure Bill.
And I want to remind you and this is important we assumed no impact and our guidance from this proposed legislation and.
Any benefit from this package would be entirely incremental to our existing guidance and to our longer term outlook.
So as shown on the sides and roughly half of the contemplated spending bill would be and markets addressable by Atlas with transportation would be and the biggest followed by housing and education and.
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 and each of these areas and the event. This bill is passed.
As you can see on slide nine day.
The execution of our growth plan has resulted in a top line revenue CAGR of approximately 20% since 2016 and.
And the addition of ADL and April along with solid organic growth on the drivers behind our increased guidance.
For 2021.
Now turning to slide 10.
And I'd like to briefly highlight the incremental value we have derived from M&A looking at the long answer there and acquisition as an example, which marked its one year anniversary as an Atlas company and mid February of this year.
This is a good example of how we integrate accretive deleveraging acquisitions into our business and convert them to growth.
This acquisition and accelerate growth for long and Atlas.
Through cross selling revenue synergies.
And we are on a path to replicate that success with our more recent acquisitions of Alta Vista West test and eventually AGL.
The loan acquisition furthered our goal of helping our clients meet increased level 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 Department of transportation, as well as new projects, and Alabama, Virginia and the Carolinas.
In summary on.
And 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.
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 specs, which will have no impact on our current and for future results.
In April of this year and the FCC issued a statement regarding accounting and reporting considerations and the reclassification of stock 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 impact to our financials from the first quarter of 'twenty one.
Or expected moving forward.
And more detailed summary of our assessment of the historical periods.
And as can be found and our 10-Q.
Now, we're trying to and the discussion of our results and the <unk>.
First quarter gross revenues of $123 $3 million were up 13% compared to the prior year quarter.
Driven by strong execution, and all of our service lines and attribute it 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 and so.
And we've seen the benefit of larger project and program opportunities converting and entering our portfolio.
Net revenue and $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 and the first quarter, but are showing improvements and 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 and hiring the necessary and qualified candidates.
Adjusted EBITDA of $14 5 million represented 14, 3% of net revenue adjusted up from 14, 2% and the prior year quarter.
Higher revenue was the primary driver of EBITDA growth, which partly offset some impacts to project mix and the return on staff costs as we add resources ahead of our seasonally larger second and third quarters.
But the first quarter of 2021, we produced adjusted net income of $11 1 million and.
And adjusted earnings per share of 78 per share.
Adjusted net income and earnings per share exclude the impact of nonrecurring items per 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 and <unk>.
Very pleased to note.
After transaction costs associated with our business formation public company formation warrant exchange offer and balance sheet recapitalization.
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 made in day to our capital structure on slide 12.
As previously announced in February and we completed a significant recapitalization of our balance sheet.
Our goal is to have a simple capital structure to better support our growth objectives through both organic expansion and.
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 redeemed all outstanding preferred equity units.
And at par.
These strategic actions accomplished the following first day dramatically simplified our balance sheet.
Second we lowered our aggregate interest rate on debt by approximately 100 basis points third 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 that.
And 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.
And our expanded capital base to execute on organic growth and deleveraging M&A through 2022.
The projected cash outlays on Walgreens 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.
And this shift from preferred dividend to interest operating expense share.
<unk> cash however, it is important to note the change and 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, while 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 and advance of the field intensive course.
With the public company transaction behind Us and a cleaner balance sheet, we will see and 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 free cash generation.
With this we.
We continue our focus on improving and prioritizing reducing our net leverage ratio and expect to achieve our full churn reduction and 2021 and.
And the first elements of it.
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 454 schedule at the end of last year, which divides our year end to 413 week quarters grouped into two four week months and one five week month.
This change provides for increased administrative efficiency.
And improve comparability of our quarterly performance moving forward.
The prior year 2020 comparisons will not be adjusted for this change.
And we will continue to be shown on a calendar about that.
With that on the way and 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 and the range of $520 million to $540 million from the previous range of $500 million to $520 million.
This reflects the addition of ADL and 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 and a range of $73 million to $80 million.
From the previous range of $70 million to $76 million driven by the same factors as well as continued operational efficiencies and vigilant cost management.
This implies a 22% increase and adjusted EBITDA at the midpoint.
And 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.
Great. Thank you David.
We are proud of how Atlas have performed since becoming a public company.
Our business delivered another solid quarter results and 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 and scale and be successful and 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.
And particularly the growing national commitment to infrastructure investment.
I firmly believe and the power of this organization and our ability to deliver strong margin performance and continued earnings 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 opt.
Operator, we can now open up the lines for Q&A. Please.
Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.
From a simple indicate your line is from my question and you May Press star two and you'd like to remove your question from the queue from.
All participants using speaker equipment and may be necessary to pick up your handset before pressing the star.
Our first question is from Brent Thielman with D. A Davidson. Please proceed with your question.
Great. Thanks, and good evening congrats on a good start from here.
Okay.
Thanks, Brian and thanks, Brad I appreciate that.
Yeah, I guess the first question just.
The thoughts around the range in the guidance and then.
And beyond and start the year you obviously have the ABL contribution just wanted to get a sense how much is related to that and how much. It reflects really just more optimistic outlook for the bedroom.
Yeah. So.
On.
It's sort of on our on our practice not to disclose specific details on <unk>.
Financials related to bolt on acquisitions, but can you give me a sense of scale to the business plan with tomorrow that 275 personal firm.
If you look at the balance.
The volume they generate and wont be too far off from what we currently do.
Well, let me just give you a little more on the depreciation.
What our thinking was relative to driving the guidance. So first of all we delivered a better than expected.
Organic growth level and the first quarter I think the last time, we've spoken with you and we said we expected to Pierce through and recommenced organic growth from the first quarter, we delivered 6% so pleased about that.
And we've reevaluated on backlog and thoroughly and the timing of our expected work in 2021, so we see some upside relative to that particularly China.
And the resiliency of our government related transportation and infrastructure business and we're also seeing increased.
Opportunities that we're exploring the full suite of our environmental solutions capabilities come on.
Market.
I'd also mentioned, we're confident that we're well positioned to benefit from expanding.
And are all state and local infrastructure investments. However, we haven't included any stimulus dollars and the guidance that we've provided.
And of course, Q4 and lastly.
We did build and the contribution of ADL.
And we got that done in April and.
We're confident they're going to deliver critical revenue synergies as they and take a charge on LIBOR.
Okay very good and.
And maybe a little more color on the regions of units driving that 6% organic growth. This quarter and then I loved it I think the environmental services piece of that business had been more impacted by it and.
And sort of COVID-19, and COVID-19 protocols, and maybe where that business sits today.
Right.
Yes, so we're seeing and a natural movement back to pre COVID-19 operating levels players so on.
It's just solid momentum pad to hold net are really based on that book.
We are seeing really minimal increase across the board.
We've seen a nice rebound with our environmental and building signage. This business, which was one of the components of the company that took a harder hit at the outset of COVID-19.
And I would also just mentioned that.
And we are really seeing the benefit on our strategy and revenue synergies and prove out as we are cross selling across the platform. We are pursuing larger projects and programs and we're securing larger projects and programs.
And I think there'll be further evidenced as we move through the second and third quarter.
Magnitude.
Some recent.
Selections on our contracts.
And contrast that with debt that we have a high confidence we will win.
And really kind of affirms our cement.
The real underlying and value of the synergies and bringing these companies.
Let me add a couple of things to that this is Joe.
I think it's fair to say that the administrations.
And push on really renewables and sustainability, we are working on it and maybe some projects now that have come out of that renewables projects in the southeast, particularly to early engineering service at this site until and theory and spectrum type work and development of some solar field.
Georgia and a larger one.
Hopefully the solar farm, so basics of renewables and the door backlog that we have had previously.
Okay, that's interesting and maybe the last one would just be.
And kind of keep comments and the opening commentary just around costs, maybe some inflationary pressures out there and maybe just your thoughts on the implications to margins if any.
Moved through the year.
Yes.
So Brian and I think I used.
Start with we definitely are seeing an increased pressure on.
On a secure and Cowen recently and chips and plant, if more and get people and the door.
Our response to this has been to double our in house recruiters to identify and execute on the right talent for our projects, particularly as we are.
Growing and wrapping up in advance.
The field and Kansas season, we believe we do have an average here relative to that and as a company, we're very focused on culture and growth.
And that expense.
And and exciting project and and.
And I understand it's still intact and full tally.
And this is tracking to these types of day. So this is what we're going to continue.
And so I think you probably have a couple of things.
We are experiencing.
And the pressure response on wages, particularly really since.
The first time that I've seen in a while and it's really around the technician level position.
So we are having a day.
And more than in the past too.
To find and attract first level technicians, and that's really been coming out of COVID-19 awards, starting to see a net impact.
Remind you that.
And our contracts are.
Majority of the contracts with time and materials and cost Reimbursable. So, although we might see a little bit of a.
And so on and on margin just short term contracts typically get adjusted on an annual basis, we get that cost of living increase if you will on.
And our labor and so it will pick up that over time and I think at the Soviet true, but as Dave said, our Oh, we don't see the long term and our.
Our recruiters are being able to locate the talent just taking a little longer than in the past.
Okay, great well, thank you for taking the question.
Thank you.
Question is from Noelle Dilts with Stifel. Please proceed with your question.
Oh, hi, guys and thanks.
Thanks for taking my question and congrats on a good quarter on.
Thank you and the call.
Earlier on the call you mentioned I think a little bit about you know from the supply chain challenges and we're thinking about that a lot with and construction obviously and.
Again, you know understanding your cost plus.
You know I understand that aspect of the model, but can you kind of comment on how you're thinking about.
Just these higher.
Higher raw material costs, and if there and and.
And also availability and if.
And they could impact the timing of projects and things and things might pushed to the right on that thanks.
Absolutely.
And what we are experiencing and directly to us is not so much are.
Our issues are materials that are labor cost outside of fuel has recently hit us as a cost increase to us, but it will be RFP and is material shortages and some of our project sites, which are impacting delays I can give you an example, and the Midwest.
Pretty significant share.
And so of our residents and supply line until ladders landfill liners, which we do QA inspected CTO.
Especially volatile waters and that right now those projects and delays.
Got it and I think second bumps and we.
We expect to be getting that getting back to those projects, but it's 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 postponed to the rights to the right and project delays for continuation.
Okay.
Okay.
Got it.
Let me say one more thing obviously Pavel.
The issue we're facing is obviously, just the availability and trust powder deposits microchips and such and so we're hanging on to our talks a little bit longer than we got a financing.
And with that as well.
Okay, great really helpful.
And then I know that you kind of mentioned you mentioned that.
Most of your business and that's what benefit from an infrastructure Bill.
But you know given that a fair amount of your work and you know me.
And kind of a claim.
And so we really think about that says as impacting you know about 30% more tied to and Newbuild.
Any additional color on how to think about kind of you know that the size and and.
You know, where where do you think about the most benefit on.
Going to the company would be would be helpful. Thanks.
Sure I think.
And David mentioned that we don't have any of the infrastructure build.
Wouldn't fall and our guidance I would say in general first of all I'm pleased to see a bill long overdue.
But what is out there I think we do a lot to improve our nation's infrastructure.
And we're well Singapore, because our services are completely aligned and we're already doing it and.
The significant amount of the investments going into transportation, which is a huge number.
And then a rebound 2008 2000 miles of roads and bridges, we do those inspections every single day and that are within our wheelhouse.
And so it's all been talking about.
Upgrade and supported with airports and per working right now as well.
And again, and obviously plaza one they are divided into 378 billion and Thats going to housing and education. That's an area of strong and helps our building Sciences group as well. So that's another area that I think fits completely and our wheelhouse of strength and out of the day to help our clients and those areas as well so.
Yes.
We see about half of that bill is acceptable to really strong add on services.
Hopefully and hopefully that is.
It comes through right.
On the ethane.
Fortunately with environmental and set a third of our business as well.
Right, Okay, that's great and.
And then.
You know I know, we've kind of talked about this before but any guidance on how given all of the changes and the capital structure and can you give us any guidance on how and how youre expecting interest expense to shake out for the year.
I'm, sorry, how we're expecting one.
Interest expense.
Interest expense.
Interest expense on the year.
And we'll end up being let me say excluding the.
Deferred financing and running off.
We'll be somewhere around 35 $36 million per year and full year.
Okay perfect. Thank you very much.
Thank you. Our next question is from Rob Brown with Lake Street Capital markets. Please proceed with your question.
Good afternoon, and I'll add my congratulations for the quarter.
Yeah.
Thank you I appreciate that.
Yes.
Our 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 maybe the factors you're looking at and sort of the size of acquisitions and.
The pipeline.
Sure So let me.
Let me say that.
Just characterizing the pipeline to start off with.
It's exceptionally strong on probably the thesis that I've seen and since we started.
I think we're becoming more of a required choice as I mentioned in the past.
And regarding and the firms are still.
And the sweet spot of the services, we're looking to perform which is this infrastructure services side and environmental.
There is I wouldn't say that.
The size of those firms are anywhere from.
Our.
Typical $5 million EBITDA.
Too much higher.
And with a more substantial acquisitions those are all of that range.
I think one thing to note and the M&A pipeline as well.
And our model.
Half cash half stock is still attractive.
Model for many of the departments and our pipeline there are excellent and technical capabilities it would be our performance goals.
And they did have a match and our culture. So very very reported what we're looking for in regards to that.
I think what they buy and have noticed.
Within the last year, a slight increase and multiples, particularly in the space and the transportation services space.
And and slightly higher.
Other than that there hasnt been a lot of change and and.
And the model that we laid out and been successful out and the path. So we.
And with our expanded capital, Rob and the BDC L. A and we just secured and are our new capital structure.
We have a lot of activity and expect that really to be able to exceed our acquisition contributions.
And 2020.
Okay, great. Thank you.
And then maybe you talked a little bit about your pipeline and having more volume and size and talked about some of the things I just wanted to dig a little bit on what's driving the.
The increased size of the projects that you're bidding on or potentially winning is it.
And so really you're cross selling activity or are there just bigger projects and the market.
And I understand that.
So I would say Robert with both.
And there clearly are more there is more large projects, particularly on the transportation space.
Better P. Three pilot projects that are more of a consortium type.
Our increase as we add and firms to our platform, we've increased our service capabilities and.
Well as the Dallas and the wisdom of our technical capabilities. So not a lot of firms that are fit that space.
We've always had.
Strategy to pursue larger projects, which to us are more riskier and don't forget we're still on up.
Just the mortgage season this year, but.
Still on the space of low risk time and materials, they squarely fit and our service model with services, we do it and I'll pass.
And in the house and have tremendous technical capabilities Super format, and again and of course, we're not taking on construction and so there's still a lower risk projects just happened to be larger and we see several of those several of those opportunities every year.
Okay.
Okay, great. Thank you I'll turn it over.
Yeah.
Thank you. Our final question is from Kathryn Thompson with Thompson Research Group. Please proceed with your question.
Thanks, and sitting in today so.
One of the questions have been answered, but just a clarification viewpoint.
And you went into this on backlogs, but if you kind of step back and look how is the mix of backlogs to day difference versus 12 to 18 months ago. So net the birds.
Types of projects, Alright, theres different geographies and has already talked about the size.
Giving more color and in the change and backlogs.
Versus 12 to 18 months ago.
Thank you.
Yeah sure. Thanks. Thanks, Catharine this is David I'll take that channel.
And how does it.
And then a huge change and the mix I would mention that we have seen an uptick and.
Our engineering and design and <unk> and related opportunities probably not surprisingly based on.
Transportation and infrastructure.
And it's proved strong through COVID-19.
And we'll say that again looking back at.
All right.
The expansion on the platform.
The increased capabilities of the platform.
And our range.
Much better positioned to go after on bigger projects and programs and as a result and away and so if I look at.
And our current portfolio.
And you know.
Contract backlog per se.
Number we said.
A large.
For adjusted contract is $5 million for us.
We've seen an increase from.
<unk> 16, Jeff and a year ago and the portfolio to 28 at this time.
On a market increase and.
The magnitude of projects and contracts that we've been able to bid win.
And bring into the portfolio.
Okay, and I guess, a follow on to that would you say that that is.
Some of the primary force driving the 6% organic growth and the quarter witches and magnitude better than it than previously.
And so and separately and contributes to that great, but if you look at actually our backlog growth quarter over quarter and again part of it being.
Loss from reassessing, the longer term revenue capacity and our contracts and the backlog actually grew 10% quarter over quarter and we feel very good about this.
And this refresh that we made and the ability is kind of half and propel.
Revenue from the balance of the year.
And again I think from a full year, we're looking at.
And since it's probably 68%.
Organic growth and if you're on.
Our projection at the mid day.
And on revenue and it's like <unk> and <unk>.
And of course, if you go on EBITDA.
Not to leave and EBITDA out of it we're projecting a 22% EBITDA and increase at the mid.
All of 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.
Okay.
And just a final question yeah. So when we last spoke I activity was largely back to pre COVID-19 levels with the exception of your environmental building, San Francis and the northeast because of the.
COVID-19 lockdown restrictions.
And given changes and the environment, how is that and trending now.
And is there a chance and we leap.
Bounds.
Back and above pre COVID-19 levels.
Moving to postpone work that needs to be completed Oracle, so you'll still see some of that.
Range from labor.
And that will keep it at a muted level.
Yeah.
Catherine This is Joe so I would say that.
And our building size and if you're referring to and I would say right now is likely to 70% to 75% capacity.
And not so much related to.
Wage issues, our technician level stuff really clients widen our funding facilities and northeast bottoming and task orders and also what's the complete that work. So that's all of it held up because the schools are still in progress so.
I will say that it would likely get up to two wells on.
And as I look out at least COVID-19 levels.
And the next quarter.
And lastly, Andy and we do anticipate growth from that sector as it relates to building size business COVID-19 related issues.
And anything that might come from the Bill in regards to education, and what's really going to benefit our building Sciences segment.
Okay.
Okay, great. Thanks.
Thank you very much and great quarter.
Thank you thank you Catherine.
Thank you ladies and gentlemen, we have reached the end of the question and answer session. I will now turn the call over to Gil Boyer for closing remarks.
Thank you operator, very much and I want to thank everybody for joining us today. We appreciate your support of Atlas and look forward to updating you on our progress and the future. So thank you.
This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation and have a great day.