Q4 2021 Atlas Technical Consultants Inc Earnings Call
Hello, and welcome to the Atlas Technical consultants fourth quarter and full year 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 David Quinn Chief Financial Officer.
Atlas. Thank you you may begin Mr. Quinn.
Yeah.
Thank you for joining us we hope you have seen our earnings release issued after the market close today.
Please note that we have also posted an updated investor presentation in support of this call, which can be found in the investors section of our website at one outlets dotcom.
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 forecast 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 earnings release and filings for a reconciliation of these non-GAAP measures to their most directly comparable GAAP measure.
I will now turn the call over to our Chief Executive Officer, Joe Boyer.
Thank you David and I appreciate everyone joining us today.
Oh today's call I'll provide an overview of our fourth quarter results and talk about our strategic priorities, including the acquisition of transport, which we had announced this afternoon.
They've been will continue with the discussion of our financial results and our 2022 outlook before we open up the call for questions.
The fourth quarter was a strong end to an exciting year for Atlas with.
We delivered robust growth expanded EBITDA margins generated strong cash flow and reduced our debt balance and leverage ratio.
We also ended the quarter with record backlog, including the largest award in the company's history, which combined with the growing demand we are seeing in our services across all of our key end markets.
Position us well for 2022 and beyond.
In the fourth quarter, we delivered over 15% revenue growth and 34% adjusted EBITDA growth as compared to the fourth quarter of 2020.
Both to record levels.
This led to a full year revenue and adjusted EBITDA growth of 15% and nearly 17% respectively.
Importantly.
Our growth in the quarter and year was driven by a combination of factors both internally and externally.
We continue to see robust end market demand in all of our key service areas, which we've been able to enhance with our ongoing cross selling initiatives contributed from recent acquisitions.
We have and will continue to implement pricing increases to cover transitory labor cost pressures.
And even with these headwinds I'm proud to say, we delivered expanded adjusted EBITDA margins.
We expect further improvement in our margins as our business scales and these pricing actions flow.
We had a very strong quarter for winning work and entered 2022 on solid footing.
Our fourth quarter backlog again rose to a new record level of $808 million up 29% compared to the end of 2020.
This growth was fueled by our new major infrastructure and environmental related contract awards and included growth in all service lines.
Our book to Bill in the quarter was 1.4 times, an impressive feat because we had a record level of quarterly revenue.
One of the large projects that we converted in the quarter and the largest award in Atlas history, and I'm proud to have in our portfolio is the New York MTA.
Penn station access project.
This $115 million contract will provide direct metro North service from the Bronx, Westchester and Connecticut to Penn station in Manhattan's West side, providing connectivity to historically underserved communities.
And we are in a JV with Ws P. On this project will provide project management services, including construction management design oversight operations management and commercial management to oversee the design build team.
This project is a great example of revenue synergies obtained through the integration of technical resources and capabilities from acquired companies are.
Our success in winning these large marquee projects is directly related to it adding enhance value to customers as we utilize the broader full technical service capabilities, one integrated Atlas.
These large professional service based projects are low risk and drive growth in our backlog, while providing longer term visibility and predictability into future revenues and cash flows. In addition to the thousands of smaller projects that we have built the foundation of our business on an account for a significant portion.
Some of our work.
Another Great example of this type of project is the five year $5 million Environmental services contract, we recently announced with Conoco Phillips to assess them remediate petroleum impacted soil and groundwater associated with legacy oilfield activity.
Conoco Phillips is a long tenured repeat client and we look forward to continuing to provide them with our growing portfolio of technical services.
Oh beyond our current backlog, we still have nearly $125 million of awards that are pending contract execution.
As we look into the remainder of 2022 and beyond.
We are as optimistic as I've ever been about the outlook and fundamentals driving our business secular trends such as aging of the nation's infrastructure.
And our increased focus on environmental sustainability workplace safety among.
Among both our public and private clients continue to drive demand for Atlas services.
Additionally, we are optimistic that you'll begin to see projects funded by the $1. Two trillion dollar infrastructure investment and jobs Act began to materialize in late 2022 with acceleration into 2020 three.
Now, let me discuss our strategic priorities for 2022.
First well.
We continue to utilize our broad service offerings, our national footprint to capitalize on strong fundamentals in our market and drive organic growth.
We've had success in our cross selling strategy.
Meaningful opportunity remains and will continue to work diligently to offer our diverse customer base with the services they need from all across our company.
Whether it's connecting smart cities protecting our environment, making the places, we live and work safer and cleaner.
Our other technical services Atlas is uniquely positioned to benefit from ongoing investment in new and existing infrastructure for many years to come.
Second we will continue to drive our M&A strategy.
Today, we announced the acquisition of transport a technology leader in the intelligent transportation systems as well as connected and autonomous vehicles space market that is expected to grow at least 12% annually through 2030.
This acquisition fits well within the Atlas portfolio as the services, we provide are critical to improving the efficiency.
And the effectiveness of existing and new transportation infrastructure.
This offers a great example of how we plan to cross sell throughout our portfolio, Although transport business was predominantly been in the Midwest.
We're confident we can leverage the company's technology, driven expertise and other key regional markets, where we have a strong presence such as Georgia, Texas, New York, Florida and California.
Further we have increased access to transports relationships with transportation customers in the Midwest, where our business has largely focused on environmental remediation.
Our M&A pipeline remains active.
Just on adding companies with differentiated services that add to or enhance our existing service offerings and our geographic footprint.
We believe Atlas offers an attractive platform for these companies given our scale and our national footprint and expect to announce additional acquisitions in the near term.
Our third strategic priority is to continue to make progress with improving our capital structure.
Our strong financial results combined with a strict focus on working capital management led to a record free cash flow in the fourth quarter.
This allowed us to reduce our debt and we ended the year with a net leverage ratio up nearly a full turn lower than where we were post our recapitalization early in 2021.
Going forward bold as to reduce net leverage to less than three times through a combination of organic growth cash generation and deleveraging M&A.
And our fourth priority is our commitment to ESG.
This is a priority for us as a company and as we help our customers meet their ESG requirements.
As a company we believe we have strong governance practices, we're committed to diversity and inclusion.
And tie safety and environmental awareness to all that we do.
We are in the process of developing more formal ESG goals, which we plan to provide updates to later in the year.
Additionally, I'll reiterate that the services Atlas offers are aligned with many of our customers ESG goals, we're committed to providing safe and healthy infrastructure and sustainable and resilient systems through our quality management and environmental assessment and mitigation work.
So we believe these priorities and initiatives are the key factors for Atlas to drive value to our shareholders will continue to update on our progress going forward.
So with that I'll turn the call back over to David to provide details on our financial performance and our outlook.
Thanks, Joe.
Very excited to be discussing our record performance in the quarter and to be presenting our robust 2022 outlook.
So let's begin with Q4.
The business delivered record gross revenue of $145 2 million in the fourth quarter 2021 .
Which was up 15, 5% compared to the prior year quarter.
Driven by strong performance in all of our service areas solid end market fundamentals, including 4% organic growth and contributions from acquisitions.
Net revenue of $114 1 million was up 12, 5% higher than the prior year period.
We add select larger projects with more subcontractors contribute to gross revenue in the quarter.
Record adjusted EBITDA of $20 7 million was up 33, 9% from the last year and represented 18, 1% of net revenue compared to 15, 2.2% in the prior year quarter.
Adjusted EBITDA margin expansion was driven by operating expense leverage as we continue to scale the business.
Although it was in part mitigated by project mix and timing of passing increased cost through to customers.
As Joe mentioned, we expect the impact of higher labor cost to be transitory as over 90% of our contracts are cost reimbursable.
For the fourth quarter, we produced adjusted net income of $2 1 million and adjusted EPS of six cents versus a loss of 23 cents in the prior year quarter with some differential in EPS related to the conversion of class B to class a shares over the past year.
Yeah.
Moving onto cash flow and the balance sheet.
During the fourth quarter, we generated record cash flow from operations of $26 $9 million, resulting in full year cash flow from operations of $29 $1 million.
Our strong cash flow in the quarter was driven by improved working capital management, which remains a priority for us in 2022 and beyond.
Net debt at the end of the quarter was 463 million down from 486 million at the end of the third quarter.
That reduction included paying down the balance of our revolver and nearly $30 million.
Consistent with this reduction of debt and that expense is a key priority for us and with this we have made the strategic decision not to pick 2% of interest expense in 2022, and instead service it with cash.
As expected our net leverage at year end was approximately five nine times in line with the expectation we set last quarter.
Our bank Covenant ratio, which includes both cost efficiencies and pro forma EBITDA from acquisitions was 545 times nearly a full turn lower than we were following our recapitalization in February 2021 .
As Joe indicated we remain laser focused on continuing to strengthen our balance sheet through a combination of organic growth.
Deleveraging M&A and continue to target a sub three times net leverage level over the longer term.
Moving to our outlook for 2022.
We expect revenue to expand to a range of $580 million to $620 million.
An increase of 11, 5% at the midpoint as compared to our 2021 results.
This outlook reflects the continued strength of our backlog and visibility on timing of work the strong market tailwind do we see and the contributions from acquisitions.
We anticipate an adjusted EBITDA, well expand to a range of $84 million to $90 million.
This represents growth of 19% at the midpoint as compared to 2021 results.
As you can see from our guidance, we expect solid top line growth and even greater profitability and margin graph.
We are extremely excited by the outlook for our business moving forward and with that I'll now turn the call back to Joe for closing remarks.
Great. Thank you again David.
To sum it up 2021 was a very solid year for Atlas.
We delivered record revenue and EBITDA in the fourth quarter and for the full year.
We plan to build on this momentum in 2022 shaping up to be another record year for Atlas we.
We ended the year with a robust backlog solid end market fundamentals and an active M&A pipeline.
I'm very proud to represent Atlas has more than 3600 employees, we're fully committed to delivering mission critical projects throughout the U S and a safe and sustainable manner.
But thank you again for joining us today.
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, a confirmation tone will indicate your line is in the questioning.
In queue, you May press star two 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, one moment, please while we poll for questions.
Okay.
Our first question comes from Chris Moore with CJS Securities. Please proceed with your question.
Good afternoon, guys nice quarter.
Thank you, Chris I'm not sure.
The gross revenue range five eight to 620, <unk>, maybe just talk a little bit about kind of the drivers that would get you closer to the higher end and the midpoint is 11, 5% growth you know what what does that represent on an organic basis.
Very good Chris Thanks for the question Yeah. So revenue range of $5 80, 620, as you mentioned implies like 11 and have at the Med <unk>.
And first and foremost.
US achieving that is backed by again another record backlog at 808 million puts us out another high of 135% of forward looking revenue next year.
In addition to that we've introduced some some large contract.
Contract wins to the portfolio, we announced the New York MTA Penn access contract. It's the largest contract that we secured in our history. So that is certainly an example of a project that can help drive revenue as we are able to accelerate it. In addition, we added textile I 35.
Through our portfolio another great project in Texas, and even things like.
Our Amazon warehouse and logistics project, which is in Rhode Island, we're starting to really build a little bit of a trend securing new logistics type work.
So these types of things are really going to be the drivers that push us this year to get closer to the top end that and of course acquisitions come into play too.
You know ultimately if you look at our.
Our overall growth of 11, 5%, we're still sticking to our strategy of 50% of our growth being.
Based on acquisitions, and 50% inorganic so our organic growth is targeted somewhere in the 5% to 7% range.
Yes.
Got it very helpful. Maybe can you just talk a little bit about the expected cadence in 'twenty two you know both from a.
Revenue in our free cash flow perspective, you know kind of.
And on a quarterly basis is it sequential improvement or how should we look at that.
Yeah, it'll be it'll be sequential improvement and we've always talked about the season seasonal nature of our business, our third quarter tends to be our most fields intensive season. So that's our strongest season.
Second to that is usually our second quarter.
And then you see our fourth quarter sort of come in and third as we wind into the holidays and the first quarter tends to be you know Iraq.
<unk> season, as we come out of the holidays, we got a little bit of winter activity going on and we get ready for the ramp up in the second quarter.
And from a free cash flow perspective, you know I'm looking at at 21.
With a really strong Q4.
Is it is the free cash flow likely be back half loaded or how should we look at that.
Yeah, it'll always be back half loaded for us, particularly because.
As we grow you really seeing the evidence of our growth peak in the third quarter of each year. So we'll have a heavy third quarter may be drawn a bit of working capital and we'll convert that in the fourth quarter similar to what we did this year.
Got it.
Alright, I will stop there, but I appreciate the time thanks guys.
Thanks, Chris Thanks, Chris.
Our next question comes from Noelle Dilts with Stifel. Please proceed with your question.
Hi, guys, good evening and congrats on the strong into the year.
Well I appreciate that.
Yeah sure. Thanks, So I was hoping first you could start just a little bit if you could provide a little bit more detail on the Penn station contract I want to make sure I'm thinking about this correctly. It looks like 115 million 86 month contract plus an option to extend them, but it looks like that was awarded to the JV could you just talk about how we should think about that.
They said that contribution to Atlas.
Sure No I think one way to look at that as we are in a 50, 149% JV.
With WSB on that just to give you a general scope we've taken into backlog.
$56 million.
On that project, Okay. So that that will essentially be the atlas piece of that JV revenue.
Expected over the period.
Of the contract.
And I'm, sorry, and I also meant to ask and how it kind of ramps over that over that period do you expect that to be sort of a lower contribution in year, one or how should we think about that.
Yes, it's going to be.
<unk> is currently over an eight year period, it's just in the initial stages as the design build team begins to complete their design, obviously, our work increases so it's more of a.
Back office.
Program Magic commercial effort in the first I'd say.
You know six to 12 months, there and as the design starts to get completed and ended the field, you'll see our services pick up an increase and in years 2345 and beyond.
Oh perfect.
And then I was hoping you could expand a little bit just on what you're seeing from an end market perspective, you know, particularly on the commercial side and if there's any sort of notable trends that youre seeing and e-commerce and in data center and some of the other markets that have been yeah pretty robust across the commercial construction sector recently.
Thanks.
Sure nor are we are seeing remember, where we're roughly 50% public 50%.
We have seen.
Quite a bit of pick up and increased construction activity with the acquisition refinance and development activities on the commercial side, which are benefiting our basically our tech our due diligence and building sciences side of the business. So as David mentioned, our new Amazon Project is just an example of that.
Across the board, we are seeing more construction activity.
<unk> I would say in our public markets.
Particularly in local municipalities and state agencies really demonstrating an increase in lettings.
You know.
We're seeing at the city and county municipalities level, a real steady progress and activity in the bidding opportunities there in.
In general in the public market in Air Transportation markets were steady with really some some larger transportation and environmental projects on the horizon for us as I.
And we see really improvement.
Our environmental building sciences in due diligence and compliance areas.
Across the board with increased construction activity I think that's the one last thing I'd say to that is you know we're seeing you know power projects.
Continuing to be a steady increase in momentum we see significant.
Energy projects going forward at Hanford, and Idaho National laboratories and the.
Terra power project in Wyoming, so that in a retail petroleum markets are strong so its in general a retail petroleum markets up in fairly steady with the our client spending money and where you might be in their stores and continued compliance with my role compliance I hope that gives you a little bit of a picture there. It does thank you.
Thanks, I'll get back in queue.
Our next question comes from Rob Brown with Lake Street Capital Markets. Please proceed with your question.
Good afternoon, and I'll add my congratulations on a nice quarter as well.
Thanks, Rob Thanks, Rob.
I'm, just a little bit on the M&A pipeline.
You I think you mentioned a couple of things in the pipeline, where where what areas are you focusing on and how do you sort of see that playing out for 'twenty two.
Hey, Rob.
Jonathan Parnell here Chief strategy Officer.
Look I think you see with the train smart acquisition exemplifies our strategy.
We're adding technical capable capabilities.
And rich cross selling opportunities to us and position us in targeted geographies with strong funding tailwind.
So that's where we're going to continue to focus in terms of the pace of M&A as you all know Rob you know the story well, it's part of our DNA and a key pillar of our growth strategy. So our pipeline is very active.
And we anticipate continuing to fuel the 50% of our growth targets through M&A.
Okay, great. Thanks, Jonathan.
And then on the on the margin ramp that you think you can kind of gets our margin recovery I should say with some price increases how do you sort of see that playing out over the over the year and should it be a steady increase or sort of snap back pretty quickly.
Yes, great question Rob.
I'm very pleased with the step up that we deliver during fiscal 2021 we move the business.
400 basis points from where we Werent 'twenty 'twenty ended up almost 17% 16 eight.
So for 2022.
Be sort of a steady climb with the exception of Q3, you'll start to see it really bounds relative to scale as I mentioned earlier that is our biggest quarter.
So looking ahead, we expect again record revenue levels next year $5 80 to 620.
As we've talked about several times, we've instituted pricing increases with our clients.
And we're getting real traction with that.
And we're continuing to drive operating efficiencies across the business, which are contributing to our margins.
And for the full year next year.
At 18, 1%, which is up.
One four percentage points year over year at the mid of our guidance. So we're pretty excited about it.
Okay. Thank you I'll turn it over.
Our next question comes from Brent Thielman with D. A Davidson. Please proceed with your question.
Hey, great. Thanks, good afternoon.
Good afternoon, Brett Hi, Brett.
Maybe just to pick up on the guidance.
And the implications for margins, which sounds like you know 300 bps better in 2022.
Is there any favorable mix component to achieving those margins or is this strictly.
Some recapture of the ethics these higher expenses you've been incurring in the last.
A few quarters.
Effectively the contracts in the book of business today, reflecting that.
Uh-huh. So I think your question is more around the project types that where we're executing more around the growth side of things and what I would say.
Brian is that we are seeing the benefit of larger contracts coming into our backlog and with that there's a a work next benefit to it as well, which builds on our already low operating leverage.
If you if you think about the dynamic we're adding large groups of dedicated resources to bigger longer term contract so with that we gain utilization efficiencies.
And we're also tending to see that the recent large contract awards, we secured are coming to our PC QM and E&E service offerings, which really continued to outperform from a project gross margin standpoint, so overall, where we're basically.
Seeing the benefit both in terms of gross and EBITDA margins with these new larger contract awards.
Got it that's super helpful. David.
I'm curious are you have you seen any impact to the timing of new beds in particular, I'm thinking about some of the public agencies tease out there just related to that.
This inflation.
We're seeing all seeing out there in the environment right now and some resetting their cost or is it it's been business as usual.
Rob This is Joe a Brent sorry.
Consistent with.
With private or sorry.
Leave it to me.
He can comment on that.
Brent I think what we are seeing is actually the transportation business is really getting back to normalized levels for us actually in 2020, 'twenty 2021 was a little slow and that is they pulled back from the 2021 grow so we've actually seen projects being let and awarded fairly.
Quickly so moving out so I think the clients are you know our clients are back to work in full force.
And we're seeing Lettings and awards come up pretty consistently.
That's that's great Joe and I mean, any glimpse into what maybe your maybe your subsidiaries boots on the ground are starting to see develop behind the scenes just related to this you understand it.
Federal infrastructure funding is there much more planning going on at the agency level are there any early contracts.
Starting to come out.
Surface that are being supported by that funding I know you've talked about it coming later in the year, but perhaps there's some.
Some evidence showing up a little earlier.
That's a good question I think we can say what.
What we do see as our clients looking for complete use of their current contract capacities right. They really tried to.
Squeeze everything to have a current capacity, which speaks to just speed of getting work done.
You know I think there are plans to put out new contracts with or discussions around that but.
To be honest, probably not enough significance yet.
For us to have real clarity on infrastructure Bill revenues, yet so we're still thinking late 'twenty two into 2023, but what our clients are definitely utilizing current contracts to push through.
More projects from what we're currently seeing.
Got it maybe just the last one I mean, you talked about in prior quarters.
<unk> kind of hiring and retention environment.
Well I'll, maybe just an update kind of where you feel like the business is you obviously sitting on.
Record backlog a lot of work to do but where do you where do you feel like you're on better footing module.
We're a quarter or two ago.
With respect to that.
Yes.
Yes, I think.
You know as I said.
No we have a steady.
Recruiting base here at Atlas, we've had them for years and they've been very very successful at.
Keeping up and staying ahead of our resource demands, but I will tell you that.
It is on a on a more stable footing there it appears to us now.
You know everybody's facing some form of.
The labor challenges, but.
We're much more optimistic the work is improve our utilization and number of people head counts in groups. So.
On a much better footing going forward.
Okay, great to hear thank you best of luck.
Yeah.
Our next question comes from Kathryn Thompson with Thompson Research group.
Please proceed with your question.
Good afternoon. This is actually Brian Biros on for Catherine. Thank you for taking my questions I guess first one in the again on the guidance for 'twenty. Two how are you thinking about the different segments of the business and that guidance. You know guidance I think was at its midpoint 11, and a half you mentioned five to seven organic how does that kind of break out across the segments either on it.
Percentage growth or rank order from strongest to weakest.
So hi, Brian .
So we don't run our business based on segments.
Thank you know the closest thing to a segment might be if we were to speak to it relative to service offerings.
And.
If you look at the trends, we've been seeing with the business. They as I mentioned earlier on the call we've seen a real uptick with our PC Q1, and E&E side of the house. So I think that's where we're going to continue to see strong emerging growth, but yeah I'll turn it over to you to pick this up.
You've covered it well I think we're still seeing strong environmental performance and our business at roughly a third of our business, 75% of our business are anticipated that to be the case in 2022.
Our PCM. So are the large program management side of our business is improving to.
17, 18% of our business saw some growth there as well so but just broadly just general market upticks across all four of our service lines.
Lines as well as.
Fraud, and I'd, even distribution across our end markets as well.
Got it that's helpful. We're just trying to understand if there was a standout among those I used to your second question on the large contract again from the Penn Station project.
Yeah, a large project long contract.
It seems like a big deal you know, it's a mega project given the scale and the visibility that Penn station has can you kind of just talk about what attributes or drivers for Atlas winning that project.
Sure I think you know without trying to take the you know that whats out and made public on the M. T. As procurement I think it's set to just say that the combination of Ws P and Atlas and their strength of their resume their capabilities in rail.
Number and quality professionals in New York experienced in this area and having relationships with the MTA having experience.
And with the MTA clear.
Clearly led to it was one of that project I think.
Yeah. Thank you.
Yeah.
Our next question comes from Don Crist with Johnson Rice. Please proceed with your question.
Okay.
Good evening guys. How are you all.
Good yourself doing breakdown Oh hanging in there are the best in Ohio. One quick question. Since a lot has been asked already on the transport technologies acquisition, what type of cross selling opportunities do you think you have there and do you think any of that's baked in the guidance that you gave today.
Right.
Hey, Don Johnson pardon me out here.
We have this this opportunity this acquisition brings a really rich cross selling opportunities because it works highly transportable across our platform.
So we expect to be able to trance transport. These services offer these services in geographies, like California, Texas, Georgia, Florida, where Theyre currently only operating in the Midwest. So we do expect to drive.
Revenue synergies off of this acquisition I would say that typically it takes a little bit of time to mature as we integrate these acquisitions. So I wouldnt expect a ton of revenue synergies.
Year one.
Okay, I think everything else has been asked but I appreciate the time thanks.
Thank you John .
Our next question is a follow up from Chris Moore with CJS Securities. Please proceed with your question.
Yeah, just one more follow up on transport, you're just trying to get a sense.
Kind of for the debt the scope here 100 employees you know it was $20 million revenue was is that way aggressive is that a reasonable ballpark I'm just trying to get a sense of you know kind of where they are now in and you know you talked about that 12% growth in the market with all the opportunities.
<unk>.
Anything you can say on that on the current revenue.
Yes.
So Chris Thanks for the question, we'll continue to reserve providing guidance on individuals at an individual transaction level for our smaller bolt on deals.
That being said you know I had mentioned.
Our growth will be driven 50%.
Organically and 50% acquisitive Lee and beyond that.
You know you can you can do some analytics on head count translate that.
And that to revenue, it's not going to be too disparate from the balance of our business.
Got it and just in terms of the east they the market that they're in it's growing about 12%.
They've been matching that you know in the last.
The last five years or something like that.
Hey, Chris Jonathan Parnell that'd.
It would be growing at a fast pace like us that done some acquisitions as well.
But we expect.
To drive rapid growth not only yes.
Of course, we want to drive this business to 12% growth that's a high bar to achieve but we think it provides some rich opportunities for us to cross sell these services and grow them at a rate faster than they were growing.
Got it I appreciate it I'll leave it there.
Thank you next question Chris.
Ladies and gentlemen.
Oh I apologize, we do have one more follow up from Noelle Dilts with Stifel. Please proceed with your question.
Things so two additional questions. So first I'm curious, how we should think about how youre thinking about self perform work pursuing some outsourced versus next for next year and second I was wondering if Jonathan could comment a bit on if you're seeing any earlier.
Competition for targets in the market or or continued creep in and multiples just what youre seeing in terms of in terms of pricing. Thanks.
Great no. Thanks, Yeah I appreciate the question. Obviously this has been a priority for us we've been.
Offering this hard over the last two and a half years and as a result, we've been able to.
Drive our self performance from call it maybe high 77% up to where we are now 80% to 81% we're going to continue to press this along and.
If I'm looking to full year 2022 I think maybe with squeeze out another point, you got up to 81 and a half 82.
And I think that's consistent with what we've discussed at a certain point you got to start popping out because there are things that are outside our risk profile that we're just not going to they're trying to do.
And we're going to stick to what we're best at.
That makes sense.
And Noelle in terms of the pricing competition.
The infrastructure Bill was passed you really saw an uptick in competition a lot of people trying to get into this space, but we're still finding plenty of opportunities in the four five to six and a half.
Times EBITDA range that we've discussed in the past.
Our national presence really provides us with a great connections into proprietary M&A deals with some market leading firms. So that's filling our pipeline and keeping our pipeline.
Very active and it's going to allow us to continue to be disciplined both in pricing and deal structure.
To ensure that were.
We're doing deals that are highly deleveraging.
Accretive to the company.
I hope that's great. Thank you.
Great. Thanks.
Ladies and gentlemen, we have reached the end of the question and answer session and I would like to turn the call back to Mr. Joe Boyer for closing remarks.
Thanks, very much I want to thank everybody for joining us today and we appreciate your support of Atlas <unk>.
And look forward to updating you on our progress. Thank you very much.
This concludes today's conference. Thank you all for your participation have a great day.
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