Civil & Environmental Consultants, Inc. 1
Agenda Introduction Safety 2012 Audited Financial Results CEC Stock 2013 Period 3 Financial Summary Business Update Questions Appendix 2
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Same number of incidents in 2012 as in 2011 OSHA Incident Rate Lower 1.46 vs 2.08 EMR Lower 0.92 vs 0.98 Vehicle Accidents Up 300% 4
Accident and incident free - All employees arrive, work and return home safely OSHA Incident Rate <1.0 Audit all office locations field and office activities Complete basic safety training for all employees 5
Full time support for safety activities at corporate level Improve and increase the consistency of safety communication Health and Safety Committee includes a representative from each office 6
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Safe Harbor Statement Note with respect to Forward-Looking Statements: This presentation, Financial Review and Operations Review contains forward-looking statements concerning our future operations and performance. Forward-looking statements are subject to market, operating and economic risks and uncertainties that may cause our actual results in future periods to be materially different from any future performance suggested herein. Factors that may cause such differences include, many risk factors such as increased competition; increased costs; changes in general market conditions; changes in industry trends; changes in the regulatory environment; changes in our commercial customer relationships and/or contract cancelations; changes in anticipated levels of government spending on infrastructure and environmental matters; changes in banking relationships; changes in management; and divestitures and acquisitions. Such forward-looking statements are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. 8
Achieved highest amount of Net Revenue $61.5M and Pre-Distribution Margin $7.9M, in the Company s twentythree year history Bonuses, 401-k match & discretionary 401-k funding of $4.8M is a 45% increase from 2011 Net Revenue increase > 25% Bank Debt decreased by $1.2M during the year Bank debt was $0 for over 60 days Stock notes - Paid additional $0.6M that were scheduled for 2013 and 2014 9
$100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 $63.7 $18.7 $45.0 $48.9 Revenue ($ Millions) $51.1 $10.7 $11.4 $38.2 $39.7 CAGR = 7.6% $63.1 $15.1 $48.0 $79.8 $19.4 $60.4 $89.3 $16.2 $73.1 2008 2009 2010 2011 2012 2013 Budget Professional Fees Purchased Services
2012 Top 10 Clients $ Millions Change Republic Services $8.1 + 43% Chesapeake $7.5 + 83% MarkWest $5.9 + 87% EQT $4.2 + 219% CONSOL/CNX $4.0 + 28% FirstEnergy $3.7 + 33% TDOT $2.3-5% ArcelorMittal $2.2 + 6% Ameren $2.1 -- Waste Mgmt $1.3 + 88%
2012 Gross Revenue Components: $79.8M 401K, Disc & Bonus $4.8 6% Profit Before Taxes $3.9 5% Indirect Expenses $10.9 14% Payroll & Benefits $42.0 52% Purchased Services $18.2 23% ($Millions)
Millions $12 Pre Distribution Margin $ $10 $11.2 $8 $7.9 $6 $6.0 $4 $2 $- $1.5 $0.9 $2.8 2008 2009 2010 2011 2012 2013 Budget
3.50 Net Effective Multiplier (NEM) 3.00 2.84 2.96 2.96 3.08 3.06 3.07 2.50 2.00 2008 2009 2010 2011 2012 2013 Budget
98 Days Sales Outstanding (DSO): 2012 One Day = $219,000 96 94 92 90 88 86 84 82 80 Actual Budget
Thousands Interest Expense $1,000 $995 $800 $600 $459 $400 $200 $360 $272 $132 $190 $0 PNC Bank Debt Shareholder Notes Other
Millions Equity Shares Outstanding 12/31/12: 946,861 $12 $10 $8 $6 $4 $2 $0 2008 2009 2010 2011 2012 2013 Budget Actual Budget
Civil & Environmental Consultants, Inc. 2012 Audited Financial Statements available on CyberC at Company Corporate Home Page Document & Presentation Archive 2012 Audited Financial Results and April 2013 Annual Report 18
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$45 $40 $35 $30 $25 $20 $15 $10 $5 $- 2009 2010 2011 2012 2013 20
Recent History: 2009 Price: $20.45 per share (10% decrease) 2010 Price: $18.82 per share (8% decrease) 2011 Price: $22.13 per share (18% increase) 2012 Price: $29.28 per share (32% increase) 2013 Price: $38.41 per share (31% increase) Stock Transfer Restriction Agreement (STRA) Stipulated Value Three Factors Net Revenue Past Three Years Pre Distribution Margin (PDM) Past Three Years Book Value (Adjusted) Two Valuation Firms Consulted 21
# of Shares in thousands 1,000 800 600 400 200 - Founders Non-Founders 22
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$16.0M $2.9 $0.2 $3.4 $0.2 $19.4M $12.9 $15.8 2012 2013 Professional Fees Mark-up Direct Project Costs 24
$2,000 $1,940 (12.1%) $1,900 $1,800 $1,801 (13.8%) $1,700 $1,600 $1,500 2012 2013 25
110 105 100 95 90 85 80 75 70 26
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Final Thoughts on 2012 Financial Accomplishments You all contributed to what can be considered CEC s best year ever. Greater than 25% Net Revenue and Gross Revenue Growth over 2011. PDM $ of $7.9 million, which was 32% better than 2011. Benefits to employees of $4.8 million. Significant stock price increase. 28
Final Thoughts on 2012 Financial Accomplishments We were on trajectory in 2012 to exceed 15% PDM (v. 12.9% actual). Leadership concluded mid-year to make investments to strengthen CEC for 2012 and beyond. Hires made to help with corporate and ICG leadership and to expand offices. Those hires reduced our profitability over the last 5 periods of 2012. 29
Final Thoughts on 2012 Non-Financial Accomplishments Opened new offices in Boston, MA and Bridgeport, WV. Added 105 net new full-time personnel. Implemented business plans for 3 ICGs and developed plans for 3 other ICGs. Added significant capabilities in many ICGs/Practices. Hired new leads for Public Sector and Mining ICGs. 30
2013 Start and Focus Employee count increased. 572 at end of Period 4. Regular full-time employees now 541. Three month estimates indicate a continuation of growth; however, at a slower pace than last year which is a good thing as the 20% plus grow during the past two years needs managed to improve quality controls and generally integrate new staff and obtain better utilization. No material litigation. We have healthy clients who are busy doing things. 31
Prepare and perform all work safely care for yourself and your co-workers. Recruit new employees we need new, good people. Welcome and assist new employees. Take responsibility for your professional development. Let your supervisor know what professional development you believe will help you do your current and future work better. Focus on our clients needs we are in business to be of service to them. 32
Civil & Environmental Consultants, Inc. Questions?? CEC 33
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(audited) 2012 Gross Revenue $79,771 Professional Fee Revenue $60,366 Net Revenue $61,547 Direct Payroll $19,703 Indirect Payroll $15,076 Indirect Expenses $22,994 Net Effective Multiplier 3.06 Pre Distribution Dollars $7,916 Write Off $ $1,544 Write Off % 1.9% CEC 35
(unaudited) 12/31/12 Current Assets Cash $764 Accounts Receivable, net 13,591 Work in Progress 6,762 Other Current Assets 1,330 Total Current Assets 22,447 Fixed Assets 6,117 Other Assets 975 Total Assets $29,539 CEC 36
(audited) 12/31/12 Current Liabilities Accounts Payable $4,764 Deferred Revenue 1,374 Other Current Liabilities 2,443 Deferred Income Taxes 6,906 Current Portion of Long-Term Debt 782 Total Current Liabilities 16,269 Line of Credit Borrowing 2,134 Long-Term Debt 2,610 Shareholders Equity 8,526 Total Liabilities & Shareholders Equity $29,539 CEC 37