Montrose Environmental Group, Inc. (NYSE:MEG) Q3 2023 Earnings Call Transcript

Stephanie Yee: Could I ask about — you had made a comment about how the EPA finalize the rules about the toxic chemicals and requires additional reporting from companies that manufacture PFAS. Can you kind of talk about Montrose’s role in that regulation like are you working with companies like Dow and 3M to help them in measuring and reporting those requirements.

Vijay Manthripragada: Yes, so yes we don’t talk about our specific clients, Stephanie. But yes, we are working with many of the Fortunate 100, Fortune 1,000. The rule effectively goes back I think to 2011. And if you’ve transported, manufactured or sold products with PFAS in it, you have to report on the potential impact and the potential toxicity of it. And that requires a combination of our advisory services and so you’ll see a positive impact on our consulting part of the business and it does require some of the reporting and testing sides of it as well. So it is a broad incremental tailwind over time for both of our Measurement and Analysis and our AP&R segments.

Stephanie Yee: Okay. That is helpful. Thank you. And can I just ask on how you’re pricing or how do you feel your pricing is aligned your their cost structure at this point in time, and as we kind of head into 2024.

Vijay Manthripragada: So I think we spoke about this with you earlier. Our pricing has been very disciplined and credit to Allan, Todd, Josh and the team for that. We have a lot of the margin benefits you’re seeing this year are a combination of both the organic growth. And that organic growth was partially driven by the pricing solutions that we’ve implemented over the last, actually 18-months. And we expect that that trend will continue into 2024. So some of our bullishness Stephanie on our ability to continue margin accretion is partially predicated on the impact of pricing on our overall performance.

Stephanie Yee: Okay. I appreciate the color. Thank you.

Vijay Manthripragada: Thanks, Stephanie.

Operator: Thank you all very much. This concludes our question-and-answer session. I would like to turn the conference back over to CEO, Vijay Manthripragada for any closing remarks. Please go ahead, sir.

Vijay Manthripragada: Thank you and thank you all for joining us today. We were thrilled to spend the time with you and we’re excited to share how the rest of the year unfolds and to speak with you again as we look forward to a stellar 2024. Thank you.

Operator: This conference has now concluded. Thank you for attending today’s presentation. You may now disconnect your lines. Have a good day.