AUSTIN, Texas, Nov. 09, 2020 (GLOBE NEWSWIRE) -- Atlas Technical Consultants, Inc. (Nasdaq: ATCX), a leading provider of professional testing, inspection, environmental, engineering, program management and consulting services, announced today results for the third quarter ended September 30, 2020.

Third Quarter 2020 Highlights:

• Gross revenue of $120.5 million, in line with expectations
• Net revenue¹ of $97.9 million, representing approximately 81% of gross revenues
• Net income of $0.6 million, including one-time pre-tax costs of $6.5 million
• Adjusted EBITDA² of $19.0 million, representing 19.4% of net revenue
• Completed acquisition of Alta Vista Solutions (“Alta Vista”), strengthening Atlas’ transportation and infrastructure-related testing, inspection and engineering services in the Company’s West Coast and Northeast markets
• Backlog increased to a record $638 million, including the addition of Alta Vista
• Commenced a warrant exchange offer in October 2020 as a key step to simplify the Company’s capital structure, increase stock liquidity and to provide flexibility for financing the continuing expansion of the business

L. Joe Boyer, Atlas’ Chief Executive Officer stated, “Strong third quarter results showed a continuation of positive market momentum since mid-year, as well as stellar execution by the entire Atlas team. Demand strengthened as the quarter progressed, with our business showing sequential improvement broadly across our geographies and end markets. The non-discretionary, mission critical nature of our services remains most evident in our transportation infrastructure services, where revenue continues to increase compared to the prior year. We expect this trend, along with our strong labor utilization levels and the benefits of our previous cost mitigation measures, to continue. Furthermore, we continue to execute on our strategy to acquire companies in new geographies that allow us to self-perform more work nationally and increase earnings, while structuring the transactions in a manner that reduces net leverage.”

Mr. Boyer continued, “We recognize the effects of the COVID-19 pandemic remain challenging and we continue to prioritize the health and safety of our employees and communities. We believe our year-to-date performance has demonstrated the exceptional resilience of our business model. I am proud of our employees and the progress we’ve made to deliver outstanding performance in a safe manner as we position ourselves to capitalize on the nation’s continuing economic recovery.”

Third Quarter 2020 Results

• Gross revenue of $120.5 million, compared to $128.8 million in the prior year quarter. The lower revenue is attributable primarily to COVID-19 and stay-at-home orders delaying some private sector work, partially offset by a year-over-year increase in transportation and other infrastructure work, as well as the contribution of Long Engineering acquired in February 2020.
• Net revenue of $97.9 million, compared to $100.9 million in the prior year quarter. Net revenues increased to 81.2% of gross revenues, compared to 78.4% in the prior year period, driven by the ongoing strategic execution to increase self-performance through an expansion of services provided to our customer base while minimizing reliance on third-party providers.
• Net income was $0.6 million, compared to $8.7 million in the prior year quarter. Net income in the third quarter of 2020 included $6.5 million of one-time pre-tax costs, primarily related to professional fees associated with capital market transactions and COVID-19 related business disruptions.
• Adjusted EBITDA of $19.0 million, compared to $20.0 million in the prior year quarter, primarily due to lower business volumes, partially offset by increased operating efficiencies and cost mitigation measures enacted at the onset of the pandemic.
• Backlog at quarter end totaled $638 million, inclusive of approximately $29 million from the Alta Vista acquisition, up from $586 million at the end of the prior year quarter. Steady sales and backlog performance were driven by a range of large project and program additions across the nationwide platform and an increase in average project size.
• Operating cash flow of $16.4 million, compared to $11.8 million in the prior year quarter.

Nine Month 2020 Results

• Gross revenue of $342.5 million, compared to $358.0 million in the prior year period.
• Net revenue of $280.0 million, compared to $284.5 million in the prior year period.
• Net loss was $20.8 million, compared to net income of $13.5 million in the prior year period. The net loss in the first nine months of 2020 included $34.2 million of one-time pre-tax costs, primarily related to $22.4 million of transaction costs and professional fees associated with the Company going public in early 2020 and subsequent capital market transactions, as well as $11.0 million of non-cash equity compensation.
• Adjusted EBITDA of $47.2 million, compared to $48.3 million in the prior year period, essentially stable year-over-year as a percentage of revenues.

Full Year 2020 Outlook

• Adjusted EBITDA expectation increased to a range of $61 million to $64 million, reflecting a $3 million increase from the low end of the previously provided range of $58 million to $64 million.
• Gross revenue expectation tightened to a range of $455 million to $462 million, with net revenue still anticipated to represent a higher percentage of gross revenue in 2020 compared to 2019.
• The outlook reflects the strength of backlog and current visibility on the timing of work.

David D. Quinn, Sr., Chief Financial Officer concluded, “Our improved full year 2020 performance expectations imply a stronger Adjusted EBITDA margin on a tightened revenue range, compared to our prior outlook. Based on the strength of our backlog and the trajectory of our end markets, fourth quarter revenues and adjusted EBITDA are expected to continue advancing toward pre-pandemic quarterly performance levels. We intend to continue our deleveraging M&A strategy and our ongoing efforts to optimize our capital structure moving forward.”

(1) Net revenue is a Non-GAAP financial measure. Please see “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of net revenue to the most comparable financial measure calculated in accordance with GAAP.

(2) Adjusted EBITDA is a Non-GAAP financial measure. Please see “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of Adjusted EBITDA to the most comparable financial measure calculated in accordance with GAAP.

About Atlas Technical Consultants

Headquartered in Austin, Texas, Atlas is a leading provider of professional testing, inspection, engineering, environmental, program management and consulting services. Under the name Atlas Technical Consultants, we offer solutions to public and private sector clients in the transportation, commercial, water, government, education and industrial markets. With approximately 140 offices in 41 states and approximately 3,300 employees, Atlas provides a broad range of mission-critical technical services, helping clients test, inspect, certify, plan, design and manage a wide variety of projects across diverse end markets. For more information, go to https://www.oneatlas.com.