Onterris, Inc.
For the period ended Mar 31, 2025. Filed May 8, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 8, 2025
ONT$21.92+12.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0000950170-24-123240
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0000950170-25-066887
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 100 previous paragraphs and 95 current paragraphs.
56 unchanged; 26 reworded; 10 added; 16 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 14 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
Revenue for the three months ended March 31, 2025 increased $22.5 million or 14.5% as compared to the three months ended March 31, 2024. The increase was primarily comprised of organic growth in the Remediation and Reuse and Measurement and Analysis segments of $17.8 million, and contribution from acquisitions of $13.5 million, partially offset by $5.8 million reduction in the Assessment, Permitting and Response segment revenue, due to several larger projects that were performed in the prior year quarter that did not repeat in the current year, and a $1.8 million reduction in environmental emergency response service revenues. Environmental emergency response revenues were $13.9 million and $15.7 million in the three months ended March 31, 2025 and 2024, respectively.
Current report
Selling, general and administrative expense for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 increased $9.2 million or 16.0%. Acquisitions contributed $2.6 million to this increase with the balance primarily attributable to higher labor costs of $5.7 million, higher bad debt expense of $1.3 million and higher stock-based compensation of $1.1 million.
Current report
Interest expense, net for the three months ended March 31, 2025 increased primarily as a result of higher average debt balances and a loss of $0.9 million related to the write-off of unamortized debt issuance costs upon repayment of the 2021 Credit Facility in February 2025.
Current report
Remediation and Reuse segment revenues for the three months ended March 31, 2025 increased compared to the three months ended March 31, 2024, primarily driven by strong demand for our treatment technologies solutions, and contributions from acquisitions. Specifically, organic growth contributed $9.3 million, and acquisitions contributed $5.1 million to the increase in revenues in the three months ended March 31, 2025.
Current report
Corporate and other costs for the three months ended March 31, 2025 increased $0.4 million primarily due to higher labor costs to support the increase in revenues. Corporate and other costs fell to 6.3% of revenue from 7.0% of revenue as a result of operating leverage and the timing of certain expenses.
Current report
For the three months ended March 31, 2025, net cash provided by operating activities was $5.5 million compared to net cash used in operating activities of $22.0 million for the three months ended March 31, 2024. The period-over-period increase of $27.5 million was primarily due to a lower increase in working capital in the current period of $9.1 million versus $30.0 million in the prior year period.
Current report
Working capital (which excludes contingent consideration payments and changes in right-of-use assets) increased by $9.4 million in the three months ended March 31, 2025, primarily due to a decrease in accrued payroll and other benefits of $8.6 million, primarily due to the payment of annual bonuses, and a seasonal decrease in accounts payable and other accrued liabilities of $5.5 million. This increase was partially offset by an decrease in accounts receivable of $10.4 million, driven by seasonally lower quarterly revenues, as well as $5.5 million higher prepaids primarily due to the timing of insurance payments.
Current report
Working capital increased by $30.0 million in the three months ended March 31, 2024, primarily due to a decrease in accrued payroll and benefits of $10.0 million, due primarily to the payment of bonuses in the first quarter, an increase in accounts receivable and contract assets of $9.1 million, due in part to integration-related invoicing delays and collection delays on a single large government project, a seasonal decrease in accounts payable and other accrued liabilities of $7.8 million, and an increase in prepaid expenses and other current assets of $2.5 million.
Current report
For the three months ended March 31, 2024, net cash provided by financing activities was $73.3 million. Cash provided by financing activities was driven by borrowing under our credit facility of $216.9 million, partially offset by repayments of borrowing of $82.3 million, and by the repayment on the Series A-2 preferred stock of $60.0 million.
Current report
See Notes 15 and 22 to our unaudited condensed consolidated financial statements included in Part I, Item 1. “Financial Statements.”
Removed paragraphs (16)
Previous report
Discontinued Service Lines and Contracts
Previous report
Periodically, or when circumstances warrant, we evaluate the performance of our business services to ensure that performance and outlook are consistent with expectations, and that the services offered are consistent with the Company’s mission.
Previous report
As part of this evaluation, during the first quarter of 2023, we determined to sell one of our specialty lab testing businesses, the Discontinued Specialty Lab, whose service offering was non-core to the Company’s business. On December 29, 2023, we sold the assets of the Discontinued Specialty Lab for a total sales price of $4.8 million. The discontinuation of this specialty service line did not represent a strategic shift that had a major effect on our operations and financial results, therefore it did not meet the requirements to be classified as discontinued operations.
Previous report
The Three And Nine Months Ended September 30, 2024 Compared to the Three And Nine Months Ended September 30, 2023
Previous report
Revenue for the three months ended September 30, 2024 increased $10.8 million or 6.4% as compared to the three months ended September 30, 2023. The increase was primarily driven by acquisitions, which contributed $15.4 million to the increase in revenues, and strong organic growth driven primarily by our Assessment, Permitting and Response and Measurement and Analysis segments. These increases were partially offset by $12.8 million lower environmental emergency response service revenues, lower treatment technology revenue within our Remediation and Reuse segment, and prior year revenues from the Discontinued Specialty Lab of $2.0 million, which was sold in December 2023.
Previous report
Revenue for the nine months ended September 30, 2024 increased $48.9 million or 10.7% as compared to the nine months ended September 30, 2023. The increase was primarily driven by acquisitions, which contributed $63.6 million to the increase in revenues, and strong organic growth driven by our Assessment, Permitting and Response and Measurement and Analysis segments. These increases were partially offset by $34.9 million lower environmental emergency response service revenues, lower treatment technology revenue within our Remediation and Reuse segment, and prior year revenues from the Discontinued Specialty Lab of $6.1 million.
Previous report
Cost of revenues for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 increased by $24.3 million driven primarily by a $26.8 million increase in direct labor costs, a $3.4 million increase in outside services costs, and a $6.1 million increase in other cost of revenues, partially offset by a $14.0 million decrease in field supplies and equipment costs. Cost of revenues as a percentage of revenue for the nine months ended September 30, 2024 was 60.4%, compared to 61.5% for the nine months ended September 30, 2023. This percentage decrease was driven primarily by revenue mix.
Previous report
Selling, general and administrative expense for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 increased $4.0 million or 7.0% primarily due to the impact of acquisitions, which added $2.9 million to selling, general and administrative expense, and an increase in IT, travel and bad debt expenses, partially offset by lower labor and facilities cost.
Previous report
Selling, general and administrative expense for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 increased $15.4 million or 9.5% primarily due to the impact of acquisitions, which added $9.2 million to selling, general and administrative expense, as well as an increase in acquisition-related costs, facilities cost, and an increase in IT and travel expenses.
Previous report
Interest expense, net for the three and nine months ended September 30, 2024 and 2023 increased primarily as a result of higher interest rates and higher debt balance.
Previous report
The Three And Nine Months Ended September 30, 2024 Compared to the Three And Nine Months Ended September 30, 2023
Previous report
Remediation and Reuse segment revenues for the three and nine months ended September 30, 2024 increased compared to the three and nine months ended September 30, 2023, primarily driven by acquisitions. Specifically, acquisitions contributed $11.1 million and $57.9 million to the increase in revenues in the three and nine months ended September 30, 2024, respectively. These increases were partially offset by certain treatment technology project start dates that shifted beyond the second half of 2024.
Previous report
Corporate and other costs for the three months ended September 30, 2024 decreased $1.5 million primarily due to lower payroll related costs of $0.5 million and the timing of various other expenses including audit and other marketing related costs. Corporate and other costs for the nine months ended September 30, 2024 increased $1.2 million primarily due to higher travel and IT costs as well as an increase in professional fees. Corporate costs as a percentage of revenues were lower in both the three and nine months ended September 30, 2024.
Previous report
For the nine months ended September 30, 2024, net cash used in operating activities was $9.7 million compared to net cash provided by operating activities of $41.5 million for the nine months ended September 30, 2023. The period-over-period decrease of $51.2 million was primarily due to an increase in accounts receivable and contract assets of $45.9 million driven by higher revenues, the previously disclosed temporary invoicing delays associated with the integration of Matrix, which is substantially addressed and collections are returning to a normal cadence, and slow payments on a single large US government funded project, which are expected to be resolved by year end. The year over year change was also impacted by a decrease in accrued payroll and benefits of $4.9 million following larger bonus payments made in March 2024 than in the prior year.
Previous report
For the nine months ended September 30, 2023, net cash used in investing activities was $97.0 million, driven by cash paid for the acquisitions of Matrix, GreenPath, Vandrensning, Frontier and EAI, net of cash acquired, of $66.2 million, $25.0 million in cash consideration for purchases of property and equipment (which included the purchase of a $12.2 million replacement aircraft for use in emergency responses following an aircraft crash in February 2023), $2.8 million in proprietary software development costs, $2.3 million related to minority investment in certain companies, and the payment of assumed purchase price obligations of $1.0 million.
Previous report
For the nine months ended September 30, 2023, net cash used in financing activities was $10.9 million. Cash used in financing activities was driven by the quarterly dividends on the Series A-2 Preferred Stock of $12.3 million, the 2021 Credit Facility term loan and the aircraft loan amortization payments of $9.1 million, the repayments of finance leases of $3.4 million, and the payment of acquisition-related contingent consideration of $1.5 million, partially offset by proceeds received from the aircraft loan of $10.9 million and the exercise of stock options of $4.5 million.
Reworded paragraphs (26)
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our historical audited and unaudited consolidated financial statements and related notes and other information included elsewhere in this filing and our other filings with the SEC, including our unaudited condensed consolidated financial statements and the accompanying notes as of and for the three and nine months ended September 30, 2024 and September 30, 2023 included in Part I, Item 1. “Financial Statements” in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the section entitled “Forward-Looking Statements”, and elsewhere in this filing and our other filings with the SEC, including in Item 1A. Risk Factors in the 2023 Form 10-K.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our historical audited and unaudited consolidated financial statements and related notes and other information included elsewhere in this filing and our other filings with the SEC, including our unaudited condensed consolidated financial statements and the accompanying notes as of and for the three months ended March 31, 2025 and March 31, 2024 included in Part I, Item 1. “Financial Statements” in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the section entitled “Forward-Looking Statements”, and elsewhere in this filing and our other filings with the SEC, including in Item 1A. Risk Factors in the 2024 Form 10-K.
Previous wording
Since our inception in 2012, our mission has been to help clients and communities meet their environmental goals and needs. According to data derived from a 2023 Environmental Industry Study prepared by Environmental Business International, Inc., or EBI, which we commissioned, the global environmental industry is estimated to be approximately $1.44 trillion, with $494.0 billion concentrated in the United States.
Current wording
Since our inception in 2012, our mission has been to help clients and communities meet their environmental goals and needs. According to data derived from a 2024 Environmental Industry Study prepared by Environmental Business International, Inc., or EBI, which we commissioned, the global environmental industry is estimated to be approximately $1.6 trillion, with $540.0 billion concentrated in the United States.
Previous wording
Remediation and Reuse segment provides clients with engineering, design, and implementation services, primarily (i) treatment technologies which treat contaminated water or create biogas from waste, or (ii) soil remediation. Our employees, including engineers, scientists and consultants, provide these services to assist our clients in designing solutions, managing products and mitigating environmental risks and liabilities at their locations. We do not own the properties or facilities at which we implement these projects or the underlying liabilities, nor do we own material amounts of the equipment used in projects.
Current wording
Remediation and Reuse segment provides clients with engineering, design, and implementation services, primarily (i) treatment technologies which treat contaminated water or create renewable energy from waste, or (ii) soil remediation. Our employees, including engineers, scientists and consultants, provide these services to assist our clients in designing solutions, managing products and mitigating environmental risks and liabilities at their locations. We do not own the properties or facilities at which we implement these projects or the underlying liabilities, nor do we own material amounts of the equipment used in projects.
Previous wording
We have been, and expect to continue to be, an acquisitive company. Acquisitions have expanded our environmental service capabilities across all three segments, our access to technology, as well as our geographic reach in the United States, Canada, Europe and Australia. The table below sets forth the number of acquisitions completed, revenues generated by and the percentage of total revenues attributable to those acquisitions completed during the three and nine months ended September 30, 2024 and September 30, 2023:
Current wording
Although we have temporary paused acquisitions, we have been, and expect to continue to be, an acquisitive company. Acquisitions have expanded our environmental service capabilities across all three segments, our access to technology, as well as our geographic reach in the United States, Canada, Europe and Australia. The table below sets forth the number of acquisitions completed, revenues generated by and the percentage of total revenues attributable to those acquisitions completed during the three months ended March 31, 2025 and March 31, 2024:
Previous wording
As a result of our acquisitions, goodwill and other intangible assets represent a significant proportion of our total assets, and amortization of intangible assets has historically been a significant expense. Our historical financial statements also include other acquisition-related costs, including costs relating to external legal support, diligence and valuation services and other transaction and integration-related matters. In addition, in any year gains and losses from changes in the fair value of business acquisition contingencies such as earn-outs could be significant. The amount of each for the three and nine months ended September 30, 2024 and September 30, 2023, was as follows:
Current wording
As a result of our acquisitions, goodwill and other intangible assets represent a significant proportion of our total assets, and amortization of intangible assets has historically been a significant expense. Our historical financial statements also include other acquisition-related costs, including costs relating to external legal support, diligence and valuation services and other transaction and integration-related matters. In addition, in any year gains and losses from changes in the fair value of business acquisition contingencies such as earn-outs could be significant. The amount of each for the three months ended March 31, 2025 and March 31, 2024, was as follows:
Previous wording
Additionally, we made earn-out payments of $1.5 million in March 2024 in connection with our acquisition of Huco Consulting, Inc. ("Huco"), of which, $0.4 million was paid in cash, and the remaining $1.1 million in the Company's common stock. In connection with certain of our acquisitions, we may make up to $58.6 million in aggregate earn-out payments between the years 2024 and 2026, of which up to $23.4 million may be paid only in cash, up to $13.1 million may be paid only in common stock and up to $22.1 million may be paid, at our option, in cash or common stock. See Note 7 to our unaudited condensed consolidated financial statements included in Part I, Item 1. “Financial Statements.”
Current wording
In connection with certain of our acquisitions, we may make up to $26.7 million in aggregate earn-out payments between the years 2025 and 2027, of which up to $12.0 million may be paid only in cash, up to $2.8 million may be paid only in common stock and up to $11.9 million may be paid, at our option, in cash or common stock. See Note 7 to our unaudited condensed consolidated financial statements included in Part I, Item 1. “Financial Statements.”
Previous wording
Our revenues and certain expenses, including selling, general and administrative expense, vary from period to period due primary to changes in organic growth, the incremental contribution from recent acquisitions and strategic decisions we may make from time to time. When we refer to changes driven by organic growth, we are referring to the contribution from businesses that have been part of Montrose for more than 12 months, with certain limited exclusions as discussed in greater detail above. In a given reporting period, when we refer to revenue changes driven by acquisitions, we are referring to the revenue contribution from any acquisition from its closing date through the first 12 months of that acquisition, at which point any subsequent contribution therefrom would be organic.
Current wording
Our revenues and certain expenses, including selling, general and administrative expense, vary from period to period due primarily to changes in organic growth, the incremental contribution from recent acquisitions and strategic decisions we may make from time to time. When we refer to changes driven by organic growth, we are referring to the contribution from businesses that have been part of Montrose for more than 12 months, with certain limited exclusions as discussed in greater detail above. In a given reporting period, when we refer to revenue changes driven by acquisitions, we are referring to the revenue contribution from any acquisition from its closing date through the first 12 months of that acquisition, at which point any subsequent contribution therefrom would be organic.
Previous wording
Total debt at September 30, 2024 was $249.8 million net of deferred debt issuance costs, which was an increase of $86.6 million compared to December 31, 2023. The increase is primarily driven by the additional $50.0 million term loan and additional usage of our revolving line of credit, partially offset by repayments and amortization of the various debt noted.
Current wording
Total debt at March 31, 2025 was $241.8 million net of deferred debt issuance costs, which was an increase of $19.1 million compared to December 31, 2024. The increase is primarily driven by the refinanced term loan in connection with the 2025 Credit Facility, which increased the aggregate amount outstanding by approximately $10.8 million, and additional usage of our revolving line of credit, under which borrowings increased by $9.7 million. This increase was partially offset by repayments and amortization of the various debt noted.
Previous wording
Interest expense, net was $4.1 million and $11.4 million in the three and nine months ended September 30, 2024, respectively, and $2.1 million and $5.5 million in the three and nine months ended September 30, 2023, respectively. We expect interest expense to remain a significant cost as we continue to leverage our credit facility to support our operations and future acquisitions.
Current wording
Interest expense, net was $5.1 million in the three months ended March 31, 2025 and $3.3 million in the three months ended March 31, 2024. We expect interest expense to remain a significant cost as we continue to leverage our credit facility to support our operations and future acquisitions.
Previous wording
See Note 12 to our unaudited condensed consolidated financial statements included in Part 1, Item 1 “Financial Statements” and “Liquidity and Capital Resources.”
Current wording
In February 2025, we refinanced our 2021 Credit Facility and replaced it with a new 2025 Credit Facility. See Note 12 to our unaudited condensed consolidated financial statements included in Part 1, Item 1 “Financial Statements” and “Liquidity and Capital Resources.”
Previous wording
Due to the field-based nature of certain of our services, weather patterns generally impact our field-based teams’ ability to operate in the winter months. As a result, our operating results could experience some quarterly variability with generally lower revenues and lower earnings in the first and fourth quarters and higher overall revenues and earnings in the second and third quarters. As we continue to grow and expand into new geographies and service lines, quarterly variability in our Measurement and Analysis and Remediation and Reuse segments may deviate from historical trends.
Current wording
Because demand for environmental services is not driven by specific or predictable patterns in one or more fiscal quarters, our business is better assessed based on annual results. Additionally, due to the field-based nature of certain of our services, weather patterns generally impact our field-based teams’ ability to operate in the winter months. As a result, our operating results in our Measurement and Analysis segment and our Remediation and Reuse segment, experience some quarterly variability with generally lower revenues and lower earnings in the first and fourth quarters and typically we experience higher overall revenues and earnings in the second and third quarters. As we continue to grow and expand into new geographies and service lines, quarterly variability in our Measurement and Analysis and Remediation and Reuse segments may deviate from historical trends.
Previous wording
In addition to the impact of seasonality on earnings, our emergency response business exposes us to potentially significant revenue and earnings fluctuations tied both to the timing of large environmental emergency response projects following an incident or natural disaster or more broad scale events such as the COVID-19 pandemic. We also saw significant emergency response revenue in 2023 from a single event. Demand for environmental emergency response services remains difficult to predict and as a result, we may have experienced revenues and earnings in prior years that are not indicative of future results, making those periods particularly difficult comparisons for future periods. Earnings volatility is also driven by the timing of large projects, particularly in our Remediation and Reuse segment, and the impact of acquisitions. As a result of these factors, and because demand for environmental services is not driven by specific or predictable patterns in one or more fiscal quarters, our business is better assessed based on yearly results.
Current wording
In addition to the impact of seasonality on earnings, our emergency response business exposes us to potentially significant revenue and earnings fluctuations tied to large environmental emergency response projects following an incident or natural disaster or more broad scale events. Total revenue from emergency response related services was $13.9 million and $15.7 million for the three months ended March 31, 2025 and 2024, respectively. Demand for environmental emergency response services remains difficult to predict and as a result, we may have experienced revenues and earnings in prior years that are not indicative of future results, making those periods particularly difficult comparisons for future periods. Earnings volatility is also driven by the timing of large projects, particularly in our Remediation and Reuse segment, and the impact of acquisitions. As a result of these factors, and because demand for environmental services is not driven by specific or predictable patterns in one or more fiscal quarters, our business is better assessed based on annual results.
Previous wording
Acquisitions revenue amounts in Note 7 to our unaudited condensed consolidated financial statements included in Part I, Item 1. “Financial Statements” includes third quarter revenue from acquisitions completed in the nine months ended September 30, 2024 and 2023 of $15.0 million and $29.2 million, respectively, whereas this disclosure includes third quarter revenue only attributable to acquisitions acquired during the three months ended September 30, 2024 and 2023.
Current wording
The Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024
Previous wording
Cost of revenues for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 increased by $3.4 million driven primarily by a $7.3 million increase in direct labor costs and a $3.5 million increase in other cost of revenues, partially offset by a $5.7 million decrease in field supplies and equipment costs. Cost of revenues as a percentage of revenue for the three months ended September 30, 2024 was 59.1%, compared to 60.8% for the three months ended September 30, 2023. This percentage decrease was driven primarily by revenue mix.
Current wording
Cost of revenues for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 increased primarily due to the increase in revenues. Cost of revenues as a percentage of revenue for the three months ended March 31, 2025 was 61.0%, compared to 62.2% for the three months ended March 31, 2024. This percentage decrease was driven primarily by operating leverage across all business lines within our Measurement and Analysis businesses, and improved margins in our treatment technology business.
Previous wording
The increase in depreciation of property and equipment and the amortization of intangible assets and finance leases were primarily driven by an increase of $2.1 million in amortization of intangible assets during both the three and nine months ended September 30, 2024 compared to the prior year periods. See Note 8 to our unaudited condensed consolidated financial statements included in Part 1, Item 1. “Financial Statements.”
Current wording
The increase in depreciation of property and equipment and the amortization of intangible assets and finance leases were primarily driven by an increase of $1.0 million in amortization of intangible assets during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. See Note 8 to our unaudited condensed consolidated financial statements included in Part 1, Item 1. “Financial Statements.”
Previous wording
Other income (expense), net for the three months ended September 30, 2024 was comprised of losses of $3.5 million related to a fair value adjustment on our interest rate swaps and a $0.5 million charge related to a fair value adjustment on the Series A-2 Preferred Stock conversion option, partially offset by $0.8 million of other income. Other income (expense), net for the three months ended September 30, 2023 was comprised of a $0.7 million charge related to a fair value adjustment on our interest rate swaps, as well as a loss of $0.1 million related to a fair value adjustment on the Series A-2 Preferred Stock conversion option.
Current wording
Other (expense) income, net for the three months ended March 31, 2025 was comprised of losses of $0.9 million related to a fair value adjustment on our interest rate swaps and a $0.3 million charge related to a fair value adjustment on the Series A-2 Preferred Stock conversion option, partially offset by $0.4 million of other income. Other (expense) income, net for the three months ended March 31, 2024 was mainly comprised of income of $0.3 million related to a fair value adjustment on our interest rate swaps and $0.2 million of other income.
Previous wording
Weighted average interest rates as of September 30, 2024 and September 30, 2023 were 7.2% and 6.6%%, respectively. See “—Key Factors that Affect Our Business and Our Results—Financing Costs” and Notes 12 and 13 to our unaudited condensed consolidated financial statements included in Part I, Item 1. “Financial Statements.”
Current wording
Weighted average interest rates as of March 31, 2025 and March 31, 2024 were 6.3% and 7.3%, respectively. See “—Key Factors that Affect Our Business and Our Results—Financing Costs” and Notes 12 and 13 to our unaudited condensed consolidated financial statements included in Part I, Item 1. “Financial Statements.”
Previous wording
The income tax expense for the three and nine months ended September 30, 2024 increased compared to the three and nine months ended September 30, 2023 primarily as a result of certain tax inclusions from foreign acquisitions in 2024 in addition to an increase in deductible goodwill amortization associated with recent U.S. acquisitions. The income tax expense is primarily related to operations in the United States, Canada and Australia.
Current wording
The income tax expense for the three months ended March 31, 2025 increased compared to the three months ended March 31, 2024 primarily as a result of certain tax inclusions from foreign acquisitions in 2024 and an increase in U.S. current federal tax expense as a result of the Company having previously utilized all pre-2018 net operating loss carryforwards that were available to offset 100% of taxable income, and therefore currently utilizing post-2017 net operating loss carryforwards which are limited to offsetting 80% of taxable income in any given year. The income tax expense is primarily related to operations in the United States, Canada and Australia.
Previous wording
Assessment, Permitting and Response segment revenues for the three and nine months ended September 30, 2024 decreased compared to the three and nine months ended September 30, 2023 due to a decline in revenues from environmental emergency responses of $12.8 million and $34.9 million, respectively, partially offset by strong organic growth of $5.1 million and $25.6 million, respectively, mainly within our consulting and advisory services, and the impact of acquisitions, which contributed $2.7 million to the increase in both the three and nine months ended September 30, 2024 .
Current wording
Assessment, Permitting and Response segment revenues for the three months ended March 31, 2025 decreased compared to the three months ended March 31, 2024 due to a decline in revenues from environmental emergency responses of $1.8 million and a decrease of $6.6 million due to several larger projects in the prior year quarter that did not repeat in the current year, partially offset by the impact of an acquisition, which contributed $3.0 million to the increase in the three months ended March 31, 2025 .
Previous wording
Measurement and Analysis segment revenues for the three and nine months ended September 30, 2024 increased compared to the three and nine months ended September 30, 2023 as a result of strong organic growth of $8.5 million and $19.0 million, respectively, the impact of acquisitions, which contributed $1.6 million and $2.9 million, respectively, partially offset by the sale of the Discontinued Specialty Lab in December 2023, which contributed $2.0 million and $6.1 million to revenues in the respective prior year periods.
Current wording
Measurement and Analysis segment revenues for the three months ended March 31, 2025 increased compared to the three months ended March 31, 2024 as a result of strong organic growth of $8.5 million, and the impact of an acquisition, which contributed $5.4 million.
Previous wording
Assessment, Permitting and Response Segment Adjusted EBITDA and Segment Adjusted EBITDA margin for the three and nine months ended September 30, 2024 decreased compared to the three and nine months ended September 30, 2023 primarily due to a reduction in higher margin emergency response revenues.
Current wording
Assessment, Permitting and Response Segment Adjusted EBITDA and Segment Adjusted EBITDA margin for the three months ended March 31, 2025 decreased compared to the three months ended March 31, 2024 primarily due to a reduction in higher margin emergency response revenues, lower revenues from several high margin projects in the prior year quarter that did not repeat in the current year, and project mix.
Previous wording
Measurement and Analysis Segment Adjusted EBITDA and Segment Adjusted EBITDA margin for the three and nine months ended September 30, 2024 increased compared the three and nine months ended September 30, 2023 primarily due to the operating leverage driven by higher revenue growth.
Current wording
Measurement and Analysis Segment Adjusted EBITDA and Segment Adjusted EBITDA margin for the three months ended March 31, 2025 increased compared the three months ended March 31, 2024 primarily due to the operating leverage across all business lines driven by significantly higher revenue, as well as the benefit from acquisitions.
Previous wording
Remediation and Reuse Segment Adjusted EBITDA for the three and nine months ended September 30, 2024 increased compared the three and nine months ended September 30, 2023 due to higher revenues. Improved Segment Adjusted EBITDA margin in the three months ended September 30, 2024 was driven primarily by acquisitions and improved Matrix margins. Improved segment Adjusted EBITDA margin in the nine months ended September 30, 2024 was driven primarily by acquisitions.
Current wording
Remediation and Reuse Segment Adjusted EBITDA for the three months ended March 31, 2025 increased compared to the three months ended March 31, 2024 primarily due to higher revenues. Segment Adjusted EBITDA margin decreased in the three months ended March 31, 2025 compared to the three months ended March 31, 2024, driven primarily by business line mix.
Previous wording
Our principal sources of liquidity have been borrowings under our credit facilities, other borrowing arrangements, proceeds from the issuance of common and preferred stock and cash generated by operating activities. Historically, we have financed our operations and acquisitions from a combination of cash generated from operations, periodic borrowings under senior secured credit facilities, and proceeds from the issuance of common and preferred stock. Our primary cash needs are for day to day operations, to fund working capital requirements, to fund our acquisition strategy and any related cash earn-out obligations, to pay interest and principal on our indebtedness and dividends on our Series A-2 Preferred Stock, and to make capital expenditures. Additionally, in connection with certain acquisitions, we agree to earn-out provisions and other purchase price adjustments that may require future payments. We may make up to $58.6 million in aggregate earn-out payments between the years 2024 and 2026 in connection with the acquisitions of Sensible, Vandrensning, EPIC, 2DOT, Spirit and Origins, of which up to $23.4 million may be paid only in cash, up to $13.1 million may be paid only in common stock and up to $22.1 million may be paid in cash or, at our option, in common stock. See Note 7 to our unaudited condensed consolidated financial statements included in Part 1, Item 1. “Financial Statements.”
Current wording
Our principal sources of liquidity have been borrowings under our credit facilities, other borrowing arrangements, proceeds from the issuance of common and preferred stock and cash generated by operating activities. Historically, we have financed our operations and acquisitions from a combination of cash generated from operations, periodic borrowings under senior secured credit facilities, and proceeds from the issuance of common and preferred stock. Our primary cash needs are for day to day operations, to fund working capital requirements, to fund our acquisition strategy and any related cash earn-out obligations, to pay interest and principal on our indebtedness and dividends on our Series A-2 Preferred Stock, and to make capital expenditures. Additionally, in connection with certain acquisitions, we agree to earn-out provisions and other purchase price adjustments that may require future payments. We may make up to $26.7 million in aggregate earn-out payments between the years 2025 and 2027 in connection with the acquisitions of Sensible, Vandrensning, Epic, 2DOT, Spirit and Origins, of which up to $12.0 million may be paid only in cash, up to $2.8 million may be paid only in common stock and up to $11.9 million may be paid in cash or, at our option, in common stock. See Note 7 to our unaudited condensed consolidated financial statements included in Part 1, Item 1. “Financial Statements.” As of March 31, 2025, we had $263.9 million available under the 2025 Credit Facility (without giving effect to any outstanding letters of credit, and subject to borrowing base limitations), and $30.3 million of cash on hand. In April 2025, we redeemed $60.0 million in aggregate stated value of the outstanding Series A-2 Preferred Stock using cash and borrowings under our revolving line of credit.
Previous wording
For the nine months ended September 30, 2024, net cash used in investing activities was $137.2 million, driven by cash paid for the acquisitions of EPIC, 2DOT, ETA, Paragon, Spirit, and Origins, net of cash acquired, of $113.0 million, $19.1 million in purchases of property and equipment, $3.4 million in payment of other purchase price obligations, and $2.1 million in proprietary software development costs.
Current wording
For the three months ended March 31, 2024, net cash used in investing activities was $65.0 million, driven by cash paid for the acquisitions of EPIC and 2DOT, net of cash acquired, of $58.1 million, as well as $6.0 million in cash consideration for purchases of property and equipment, and $1.3 million in proprietary software development costs, partially offset by proceeds of assumed purchase price obligations of $0.3 million.
Previous wording
For the nine months ended September 30, 2024, net cash provided by financing activities was $136.6 million. Cash provided by financing activities was driven by net proceeds from the issuance of common stock through a public offering of $121.8 million, net borrowing of $87.0 million, proceeds from the exercise of stock options of $2.0 million, partially offset by a partial redemption of the Series A-2 Preferred Stock of $60.0 million, dividends on the Series A-2 Preferred Stock of $8.3 million and repayments of finance leases of $4.4 million.
Current wording
For the three months ended March 31, 2025, net cash provided by financing activities was $16.0 million. Cash provided by financing activities was driven by borrowing under our credit facility of $306.9 million, partially offset by repayments of borrowing of $286.7 million, dividends on the Series A-2 Preferred Stock of $2.8 million and payment of financing cost of $2.2 million.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
During the three months ended March 31, 2025, we made contingent consideration payments of $6.6 million in the Company's common stock, of which $4.8 million related to deferred consideration payments for the acquisition of Epic Environmental Pty Ltd (Epic) and $1.8 million related to earn-out payments for SensibleIoT, LLC (Sensible). During the three months ended March 31, 2024, we made earn-out payments of $1.5 million in connection with our acquisition of Huco Consulting, Inc. (Huco), of which, $0.4 million was paid in cash, and the remaining $1.1 million in the Company's common stock.
Current report — wording carried from elsewhere
The Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024
Current report — wording carried from elsewhere
For the three months ended March 31, 2025, net cash used in investing activities was $3.7 million, driven by cash paid for property and equipment and proprietary software development costs.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Other income (expense), net for the nine months ended September 30, 2024 was comprised of losses of $3.8 million related to a fair value adjustment on our interest rate swaps and a $1.0 million charge related to a fair value adjustment on the Series A-2 Preferred Stock conversion option, partially offset by $0.5 million of other income. Other income (expense), net for the nine months ended September 30, 2023 was comprised primarily of a $2.1 million charge related to a fair value adjustment on the Series A-2 Preferred Stock conversion option.
Previous report — wording carried elsewhere
See Note 15 to our unaudited condensed consolidated financial statements included in Part I, Item 1. “Financial Statements.”