Montrose Environmental Group, Inc. (NYSE:MEG) Q4 2024 Earnings Call Transcript

Montrose Environmental Group, Inc. (NYSE:MEG) Q4 2024 Earnings Call Transcript February 28, 2025

Operator: Good day, and welcome to the Montrose Environmental Group’s 4Q ’24 Earnings Call. All participants will be in listen only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Adrianne Griffin, Senior Vice President, Investor Relations and Treasury. Please go ahead.

Adrianne Griffin: Thank you and welcome to our fourth quarter and full year 2024 earnings call. Joining me on the call are Vijay Manthripragada, our President and Chief Executive Officer; and Allan Dicks, our Chief Financial Officer. During our prepared remarks today, we will refer to our earnings presentation, which is available on the investors section of our website. Our earnings release is also available on the website. Moving to Slide 2, I would like to remind everyone that today’s call will include forward-looking statements subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially due to known and unknown risks and uncertainties that should be considered when evaluating our operating performance and financial outlook.

We refer you to our recent SEC filings, including our annual report on Form 10-K for the fiscal year ended December 31, 2024, which identify the principal risks and uncertainties that could affect any forward-looking statements and our future performance. We assume no obligation to update any forward-looking statements. On today’s call, we will discuss or provide certain non-GAAP financial measures such as consolidated adjusted EBITDA, adjusted net income, and adjusted net income per share. We provide these non-GAAP results for informational purposes, and they should not be considered in isolation from the most directly comparable GAAP measures. Please see the appendix to the earnings presentation or the earnings release for a discussion of why we believe these non-GAAP measures are useful to investors, certain limitations of using these measures, and a reconciliation to their most directly comparable GAAP measure.

With that, I would now like to turn the call over to Vijay.

Vijay Manthripragada: Thank you, Adrianne, and welcome to everyone joining us today. I will start with an update on our business, provide 2025 guidance, and then speak generally about the fourth quarter and full year earnings presentation shared on our website. Allan will provide the financial highlights and following our prepared remarks we will host a question-and-answer session. Before I begin, I’d like to acknowledge the exceptional work of our approximately 3,500 colleagues around the world who delivered another year of record performance. Their dedication to leading environmental science and technology has furthered our mission of helping to protect the air we breathe, the water we drink, and the soil that feeds us. Montrose continues to demonstrate that we can promote environmental stewardship, promote human development, and create shareholder value.

As we discuss our results today, I want to remind everyone that our business is best evaluated on an annual basis, since demand for environmental solutions does not follow consistent quarterly patterns. This is how we manage our operations and how we recommend viewing our performance. So with that, I’m extremely pleased to report that 2024 was another exceptional year for Montrose. We delivered 2024 revenue of $696.4 million and consolidated adjusted EBITDA of $95.8 million both record highs, demonstrating the strength of our integrated environmental platform. Our revenue has grown at a 24% CAGR since 2019, significantly outperforming the industry’s growth during this period. Consolidated adjusted EBITDA margin increased as planned, achieving a robust expansion of 120 basis points to 13.8% for the year, driven by improved operating leverage across all of our segments.

We were also pleased by the continued progress of Matrix in Canada. As you may recall, Matrix joined us in June 2023 at low single-digit EBITDA margins, and 18 months later they exited the fourth quarter at an annualized run rate in the mid to high teen EBITDA margins. This impressive result is one example of many of our acquisition and integration successes. Our strong 2024 performance was driven by robust organic revenue growth of 8.3%. Our organic growth performance hinges on our continued customer attention and cross-selling successes, which highlight the power of our integrated strategy and our focus on innovation. Cross-selling improved to 53% of our 2024 revenue, up from 51% in the prior year. We also recorded our third consecutive year with the 96% revenue retention rate, demonstrating the stability of our customer base.

This strong organic performance occurred despite significant macro-level changes in our industry, mainly in the United States, further demonstrating the resilience of our business model and the benefit of a diversified private sector client base. In addition, approximately 20% of our revenue originated from Canada, Australia and Europe, which continued to perform very well in aggregate and in each geography. This marks a significant increase from only 4% international revenue in 2021. We expect continued positive momentum, particularly in Canada, under a potential Poilievre administration. Our treatment technology services are growing nicely in the EU, and demand for our treatment technology services in Australia has increased significantly, including our recent project award with Sydney Water.

Given many investor questions about the political landscape and the current U.S administration, we remain confident in our ability to perform over the next four years and beyond. As we’ve demonstrated with our historical track record, we’ve been able to significantly expand and grow our business during each of the Obama, Trump and Biden administrations. Our business model is designed to be largely insulated from political swings at the federal level. We expect this trend to hold going forward, and we believe the new Trump administration will create more tailwinds than headwinds. The administration’s focus on cost efficiency, U.S manufacturing, and domestic energy production fit nicely with our current business mix and business strategy. Independent of that our strong private sector focus, our limited exposure to any one end market and the higher relative influence of state level regulations on our customer activity enable us to thrive despite federal political changes.

For example, 28 states have developed and enforced PFAS regulations independent of federal oversight, which continues to drive demand for treatment technologies in the U.S. As a second example, methane emission monitoring services accounted for approximately 3% of our 2024 revenue, with about two-thirds of these activities originating from nine states that have established their own methane emissions regulations independent of federal rules. Specifically, states like Texas, Vermont, Pennsylvania, Ohio, North Dakota, Montana, Utah, Colorado, and California have all implemented state-level methane monitoring requirements independent of federal policy changes. These state-level regulatory frameworks provide stability and predictability for our clients and therefore our business.

I would note that our acquisition activity also aligns with states that take an independent and proactive approach to environmental stewardship for all. While PFAS and greenhouse gases are getting most of the attention from Wall Street, I want to highlight that approximately 85% of our business is anchored on other contaminants that have a longer re regulated history and continued bipartisan support. We believe, and we are seeing this in the marketplace that our vertically integrated business model enhanced by our portfolio of 24 patents and proprietary technologies will continue to differentiate Montrose. We recently helped a major U.S energy client address their environmental challenges by leveraging multiple service lines, starting with our advisory services for initial assessments, then utilizing our laboratories for testing and ultimately implementing our treatment solutions to deliver a solution that would otherwise have required multiple vendors.

Our ability to provide this type of integrated environmental solution positions us to help our clients navigate an increasingly complex regulatory landscape. In addition to revenue and EBITDA performance, we were also pleased with the strength of our balance sheet at year-end. Our leverage ratio reduced to 2.1x, and we have more than ample liquidity to execute on our plans for this year which Allan will expand upon shortly. As noted last year, our goal in 2025 is to simplify our balance sheet through the redemption of our preferred stock with $60 million planned for redemption this April and the remaining $62 million expected before the end of 2025. As we’ve highlighted previously, this redemption will be funded through a combination of cash and borrowings under our new credit facility, which Allan will expand upon shortly.

While we are temporarily deemphasizing M&A to prioritize balance sheet optimization, acquisitions remain a key part of our long-term strategy, our growth algorithm, and our investment thesis. We will continue prudently managing leverage while deploying capital and driving shareholder value. I would now like to highlight recent shareholder focused actions that underscore our commitment to shareholder engagement and feedback. In the near-term, we are focused on simplifying our financials to better demonstrate the organic growth and earnings power of our underlying business. As part of this effort, the executive team voluntarily canceled all outstanding executive stock appreciation rights, or SARs with no commensurate replacement compensation.

This eliminates approximately $10 million in non-cash expenses from our P&L annually in 2025 and 2026. For 2025, we also modified our executive compensation structure, removing M&A incentives from my, Allen’s and our general counsel’s short-term incentive program and tying executive compensation more closely to progress against key strategic efforts in addition to EBITDA targets. We also continue to add talent to our board of directors and recently added Vin Coleman as an independent director and member of our audit committee. We welcome Vin to Montrose, and I am confident his expertise will be invaluable to our future. We are also considering additional industry experts for future Board positions. Finally following the events of last year, our audit committee engaged an independent legal and an independent accounting firm in connection with its review of the assertions made in a short report regarding Montrose.

We are pleased to announce that the independent third-party reports provided to the audit committee did not identify any material issues, including with respect to intentional manipulation, misconduct, or management’s integrity as alleged. Based on this review, the company determined that no amendment or restatement of historical SEC filings and previously issued financial statements was needed. Nor is there any basis to make substantive changes to our disclosures or financial reporting. In summary, regarding 2024, I am extremely proud of our team and all that they have accomplished, and I am proud Montrose delivered another year of record results in 2024. Our integrated business model and our technology capabilities continue to differentiate us and our ability to provide high-quality environmental science and technology continues to resonate with our clients across our markets.

As it relates to 2025 the outlook for our business is strong. We are introducing guidance of $735 million to $785 million in revenue. And $101 million to $108 million in consolidated adjusted EBITDA. This guidance assumes no impact from future acquisitions, and it reflects our confidence in driving organic revenue growth and concurrently improving margins, as we have been doing, which Allan will expand upon shortly. The near-term simplification of our capital structure and temporary pause and acquisitions will allow the organic growth and cash generation power of the business to shine. We reiterate 7% to 9% expected annual organic growth and 50% plus [technical difficulty] cash flow conversion. The powerful combination of our proven growth algorithm of strong organic growth driven by cross-selling success and strong customer retention plus our successful integration of recent acquisitions.

In addition to our increased margins and operating efficiency, our balance sheet and cash flow strength and our innovation success developing patented technologies all continue to validate the strategic advantages of our business model and position us well to continue creating value for our stakeholders and shareholders as we advance our mission. Thank you for your continued interest in Montrose and with that I will hand it over to Allan. Thank you very much.

Allan Dicks: Thanks, Vijay. We delivered exceptional performance in both the fourth quarter and full year 2024, as we continue to execute on our growth strategy. Our strong results in 2024 were driven by robust organic growth from cross-selling momentum and expanding customer relationships, along with the positive contributions from a highly additive acquisition activity. Our strategic focus on higher margin services and operational efficiency continues to benefit our business, resulting in the strong year-over-year improvement in our overall profitability. Moving to our revenue performance, our fourth quarter revenue increased to a record $189.1 million, a 14.1% increase compared to the prior year quarter. Full year 2024 revenues increased to $696.4 million, up 11.6% versus 2023.

The primary drivers of growth in the fourth quarter were strong organic growth in our assessment permitting and response, and measurement and analysis segments, plus contributions from acquisitions, partially offset by lower environmental emergency response and treatment technology revenues. We were pleased to generate organic growth of 8.3% for the full year in line with our expectations for 7% to 9% average organic growth over the long-term. Our consolidated adjusted EBITDA in the fourth quarter reached $27.2 million or 14.4% of revenue. This compares favorably to consolidated adjusted EBITDA of $17.5 million or 10.5% of revenue in the prior year quarter. Full year 2024 consolidated adjusted EBITDA was $95.8 million or 13.8% of revenue compared to consolidated adjusted EBITDA of $78.6 million or 12.6% of revenue in 2023.

The significant increase in profitability for both periods was driven by organic growth, the impact of acquisitions, and improved operating leverage on higher revenues, partially offset by a decrease in high margin environmental emergency response revenues. Diluted adjusted net income per share of $0.29 in the fourth quarter of 2024 increased from $0.27 in the prior year quarter. This was primarily due to lower dividends on our Series A-2, partially offset by a higher weighted average diluted share count in the quarter. For the full year 2024, diluted adjusted net income per share of $1.08 increased modestly from $1.07 in the prior year, as the benefit from higher EBITDA and lower dividends on our Series A-2 was mostly offset by higher interest and tax expenses and a higher weighted average diluted share count.

Please note that our adjusted net income per diluted share attributable to common shareholders is calculated using adjusted net income attributable to stockholders divided by fully diluted shares. We believe this net income methodology is the most helpful net income metric for Montrose and common equity investors. I will now discuss our fourth quarter performance by segment. In our Assessment, Permitting and Response segment fourth quarter revenue was $50.8 million compared to $50.1 million in the prior year’s quarter. AP and R segment adjusted EBITDA was $7.9 million or 15.6% of revenue, compared to 18.3% in the prior year quarter. Results during the fourth quarter reflect organic growth in consulting and advisory services and the positive impact of acquisitions, partially offset by an $8.4 million decline in environmental emergency response revenues.

Given the segment includes our environmental emergency response business, associated revenue does not follow a regular quarterly or seasonal pattern. In our Measurements and Analysis segment, revenues for the quarter increased 21.3% to $65.5 million. We continue to experience strong organic growth across laboratory and field services. M&A segment adjusted EBITDA increased 88.7% to $18.3 million, or 27.9% of revenue, a 1,000 basis point margin improvement over the prior year quarter due to organic revenue growth, contributions from acquisitions, and operating leverage. In our Remediation and Reuse segment, fourth quarter revenue increased 18.2% to $72.8 million, benefiting from acquisition contributions of $10.1 million and partially offset by a decrease in treatment technology revenue.

This segments adjusted EBITDA increased 53% to $12.7 million and adjusted EBITDA margin expanded 400 basis points to 17.5%. The increase in segment adjusted EBITDA dollars as a percent of revenue primarily reflects strong operational improvement in matrix and contributions from acquired companies. Moving to our cash flow and capital structure. I’d like to first note that the invoicing delays associated with the integration of Matrix, as discussed last quarter, have been fully resolved, and invoicing and collections have returned to a normal cadence. Full year cash flow from operating activities was $22.2 million compared to $56 million in the prior year. Lower cash flow from operations was primarily driven by an increase in working capital of $40.4 million versus $3.3 million in the prior year period, as well as higher interest payments of $6.7 million and higher tax payments of $3.2 million.

An increase in accounts receivable of $42 million drove the change in working capital, with approximately $23.3 million related to fourth quarter revenue growth as compared to the prior year period, and the remainder mostly associated with the previously disclosed receivables from a large U.S government project. The large project was for the city of Tustin in California and related to a fire at a U.S Navy-owned facility where we provided environmental monitoring and remediation services. We were contracted directly by Tustin, and the U.S Navy has committed to reimburse Tustin for its total costs associated with the fire. Tustin is continuing to work with the U.S Navy on reviewing and processing invoices and payments, which have been delayed due to the complexity of the incident.

Tustin has not disputed any of the company’s invoices and has continued making payments in good faith while waiting for additional U.S Navy funding. To date Tustin has paid 40% of all Montrose invoices. As of this call, the remaining amount Tustin owes Montrose is approximately $13.5 million. We are working collaboratively with Tustin, and we remain confident in the full collectability of the outstanding balance. Yesterday, we finalized a new credit agreement, which has several benefits to Montrose stakeholders. The new facility expands our borrowing capacity to $500 million in the form of a $200 million term loan and $300 million revolving credit facility. Furthermore, the new credit facility includes slightly lower interest rates, a mechanism for shares, larger baskets for ongoing operations and acquisitions, and extends maturity 5 years.

Optimizing our capital structure is an integral part of our long-term strategy, and we are very pleased to do that while enhancing our financial flexibility. Pro forma for the 2025 credit facility, as of December 31, 2024, we had approximately $300 million of liquidity, including $12.9 million of cash on hand and $283.8 million of availability on our credit facility. Our leverage ratio as of December 31, 2024 was 2.1x. Also, as of December 31, 2024, we had $122 million of Series A-2 outstanding with repayments in cash at our election and we anticipate a full redemption of this outstanding amount in cash by year-end. Moving to our full year outlook. Based on the positive momentum in our business, we are introducing our outlook for full year 2025 revenues to be in the range of $735 million to $785 million.

We expect consolidated, adjusted EBITDA to be in the range of $101 million to $108 million, representing an expectation of further margin enhancement this year. We continue to anticipate strong organic growth and reiterate our 2025 and expected long-term average of 7% to 9%, given our current visibility into end market demand and cross-selling momentum. Our outlook also includes an expectation for environmental emergency response revenues to be in the range of $50 million to $70 million. Similar to the $48 million generated in 2024. Additionally, we anticipate the conversion of consolidated adjusted EBITDA into operating cash flow to be over 50%, consistent with our long-term annual target and the average achieved from 2022 to 2024. As we think about the opportunities and risks that would drive us to either end of our guidance range, we wanted to provide a bit more color on the topic.

We see several factors that may impact 2025 performance, including increased demand for our water treatment solutions and demand from higher energy and industrial production. Unexpected macroeconomic impacts, fluctuations in environmental emergency responses, impacts from the regulation, and changes in project timing. We believe our guidance appropriately balances these factors based on our current visibility into 2025. Looking at the cadence of revenue and margins in 2025, we expect first half and second half revenue as percentages of our full year 2025 outlook. To follow 2024 trends, quarterly revenue as a percentage of first half 2025 revenue is also expected to follow first half 2024 quarterly trends, and first half 2025 consolidated adjusted EBITDA as a percentage of revenue is expected to be comparable to first half 2024.

With first quarter 2025 consolidated adjusted EBITDA, representing approximately one-third of first half 2025 consolidated adjusted EBITDA. This expected quarterly profile has been incorporated into our full year guidance ranges. In the near-term, we will continue to prioritize balance sheet simplification through the redemption of our Series A-2 preferred stock and subsequent deleveraging. Optimizing our capital structure and cash flow are integral parts of our strategy to drive even stronger returns from future M&A, which remains a core part of our long-term growth story. Thank you all for joining us today and for your continued interest in Montrose. We look forward to the opportunities we see ahead and updating you on our progress next quarter.

Operator, we are ready to open the lines to questions.

Q&A Session

Operator: Yes, thank you. [Operator Instructions] And today’s first question comes from Tim Mulrooney with William Blair.

Tim Mulrooney: Allan, Vijay, good morning.

Vijay Manthripragada: Hey, Tim. How are you?

Tim Mulrooney: Great. Doing well. Thank you. Just a couple for me, so it looks like you ended the year strong with 8% core organic growth for the full year and you’re looking for another year of growth in that range right in line with your long-term targets, but we noticed that the midpoint of your EBITDA margin, guidance range, it looks to me, and please correct me if I am wrong, but it looks to me as if you’re forecasting essentially flat EBITDA margins year-over-year from ’24 to ’25. So, I’m just curious, with that good operating leverage you should see on the top line, why you wouldn’t expect to see more margin expansion here in 2025.

Vijay Manthripragada: Yes, Tim, why don’t I start with that and I’ll let Allan take it. We do see continued opportunities for operating leverage and margin expansion. Tim, we — and where you’re — we’re likely going to see that is going to be continued margin accretion on our Remediation and Reuse segment, which has been showing really nice trends, but remains subscale and then continued operating leverage off of corporate costs. But you’re correct at the midpoint we have guided to a what we would consider a middle of the fairway outlook, which is, steady organic growth and given the strong margin performance last year, steady EBITDA margins. Our focus is also heavily on cash generation, which we are also quite optimistic about. But the short answer to your question is yes, we do believe there’s going to be a really nice, continued margin accretion opportunity.

Tim Mulrooney: Got it. Okay, so maybe it’s just more of a point in time thing, but generally speaking you see further margin, trajectory upwards, if you step back and look at it from a multi-year perspective, I guess.

Vijay Manthripragada: That’s right.

Tim Mulrooney: Building — okay, thank you. And then building on your comment on cash, it looks like cash flows were really strong in the fourth quarter. It was great to see. But I think, and again, correct me if I am wrong, operating cash flow conversion was still a little lower than your target for the year of 50%. I am just curious what changed there relative to your prior expectations and what gives you confidence that that you’re more likely to hit that 50% target in 2025.

Allan Dicks: Yes, let me take that, Tim. The — so, yes, we had expected to be slightly better than we ended up for ’24. Part of that was an expectation that some of the city of Tustin, open invoices would be settled before year-end. There were payments that came in subsequent to year-end. So there was some timing there. And then the fourth quarter revenue improvement year-over-year was stronger than we had expected. And so that’s a big drain, that’s a big working capital drain when you look at the Q4 to Q4 growth, the 14% growth, that’ I’ll turn around in Q1 as we collect those receivables. So, it’s purely a timing issue. If you look back over a 3-year period, we’ve averaged around 51% conversion, and that’s with what we would consider a subpar 2024 cash flow generative year. And we expect that to fully rebound in ’25. So that purely a temporary issue. Even with the city of Tustin, we remain very confident in the full collectability of those outstanding amounts.

Tim Mulrooney: Yes, so Allan, it sounds like both of those are pretty much timing issues and you’ve gotten some payments, subsequent to year-end and would expect to collect on some of that strong growth you saw in the fourth quarter. So both of those timing issues you’d expect to begin to improve here already in the first quarter. Correct?

Allan Dicks: Absolutely. That’s correct, yes.

Tim Mulrooney: Okay, great. Well, thank you guys for taking my questions. Have a good day.

Allan Dicks: Thanks, Tim.

Operator: Thank you. And the next question is from Jim Ricchiuti with Needham & Company.

Jim Ricchiuti: Hi, good morning.

Vijay Manthripragada: Hi, Jim.

Jim Ricchiuti: Are you seeing any change in project timelines from clients whether government or commercial in the early days, of the new administration, and Vijay you alluded to the tailwinds that you anticipate. Are you seeing signs yet of those tailwinds just based on conversations that you’re having with clients?

Vijay Manthripragada: Yes, we are, Jim, and it’s not just, conversations right? I think our solid performance in Q4 following the election also demonstrated to us that our client activity continues apace, which has been really encouraging for us. We are the federal government side of our business, Jim, is less than 3% of revenue, and so the private sector activity, which is kind of the lion’s share of our business now that some of that uncertainty related to the political climate has started to subside, activity is certainly picking back up and we are really encouraged across the board with what we are seeing on the consulting, testing and treatment side. Obviously, there’s still a lot of questions that are being answered, but our client sentiment is largely normal course and continued progress on the projects.

Jim Ricchiuti: And then just with respect to as some of the clients sort out things that they’re hearing, is there — has there been any change in anticipated project timelines?

Vijay Manthripragada: No, not at this point. No changes.

Jim Ricchiuti: Great. And I was hoping to and maybe get a little bit more color on what you’re seeing on the cross-selling initiatives which seem to continue to go, the right direction, but yes, I am wondering, can you talk about that as to where you’re getting the most traction? whether it’s from the types of clients or business lines and I assume that much of this is also on the cross-selling side is tied to the overall organic growth in the business but correct me if I’m wrong.

Vijay Manthripragada: No, that’s right, Jim. So, there’s a couple of ways to slice the data obviously we talked about the total revenue driven by cross-selling and it’s encouraging for us that more than half of our revenue is now a function of the fact that our current clients are buying more of our services. Where we are actually seeing a lot of traction, Jim, is in the metrics that we don’t talk about as much, which is folks buying kind of more than two services, meaning we are deepening the relationships with existing clients. That doesn’t show up in these public metrics as robustly, but I have been really pleased and a lot of credit to our operating teams and our commercial teams with our clients buying two services or three services or four services, we’ve have multiple engagements now that are broad geographical projects that where the client has engaged us on several different service lines in a given year and over time, and I alluded to this a little bit in my prepared comments with one of the large U.S energy clients, but there’s many examples of that, and we look forward to sharing that.

And so, we see and the reason we have a lot of conviction in our organic growth outlook, we see that trend continuing. We don’t really have to acquire any new customers to continue that trajectory over the next couple of years, and then we are obviously really pleased that we continue to also acquire new customers. And so kind of across the board, that is absolutely the anchor for our continued organic growth, and our organic growth outlook. Does that answer your question, Jim?

Jim Ricchiuti: It does, Vijay. Thanks. I’ll jump back in the queue. Thank you.

Vijay Manthripragada: Thanks, Jim.

Operator: Thank you. [Operator Instructions] And the next question comes from Brian Butler with Stifel.

Brian Butler: Hey, good morning. This is Brian.

Vijay Manthripragada: Hey, Brian.

Allan Dicks: Good morning.

Brian Butler: So has ER work started strong this year? And then if so, to what extent has that been driven by above average weather disruption?

Vijay Manthripragada: Our ER work is steady. Brian, it was around $50 million last year and our outlook for this year is similar. We don’t really see at this point any outsized ER projects. Obviously, if any of those starts to come to fruition, we disclose that revenue every quarter and we’ll certainly highlight that but at this point, no, nothing abnormal that’s worth noting on the call. And as it relates to the fires and weather and other events like that is kind of implicitly in the number that we provide, which is that 50 to 70 range. And so, I would just continue to stick to that with what we see at this point, there’s no reason to deviate from that outlook.

Brian Butler: Got it, Okay. And then how much potential do you see for international revenue to grow as a percentage of total and then what would drive that expansion?

Vijay Manthripragada: We’ve seen really nice growth in each of our markets, so Canada, Australia, and Europe. The demand there in Australia and Europe is heavily influenced by our water treatment technology. The recent acquisition of Epic in Australia, which is our consulting practice, has gone really well. That is an exceptional team that continues to see really nice tailwinds in that market. So, it’s just traditional steady organic growth opportunities in each of those markets at this point, Brian. As it relates to the growth as a percentage of total mix, we don’t see too much change to that. We will remain kind of a predominantly US-based North America-based business at this point in time. Our focus this year, as is a temporary pause or slowdown in acquisition activity.

And so, everything we’re talking about at this point is purely a function of organic growth and the organic growth opportunities, and we don’t see much deviation. From our mix in aggregate international versus domestic at this point.

Brian Butler: Awesome, thank you. I’ll turn it over

Operator: Thanks, Brian.

Operator: Thank you. And this concludes our question-and-answer session. I would like to turn the forward back over to Vijay Manthripragada for any closing comments.

Vijay Manthripragada: Well, thank you all very much for your interest in Montrose and for joining us this morning. Allan and I and the team are really excited about what the next couple of quarters are going to bring, and we look forward to sharing the updates with you in the very near future. Thank you and be well. Take care.

A – Allan Dicks: Thank you.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may disconnect your lines.