Core Viewpoint - Strathcona Resources Ltd. intends to initiate a take-over bid for MEG Energy Corp., offering a combination of Strathcona shares and cash for MEG shares, representing a total consideration of $23.27 per MEG share, which includes a 9.3% premium based on MEG's closing price on May 15, 2025 [1][2][3] Offer Details - The offer consists of 0.62 Strathcona shares and $4.10 in cash for each MEG share [1] - The total consideration reflects 82.4% in Strathcona shares and 17.6% in cash [1] - The offer will not be subject to any financing condition, with cash expected to be funded through a bridge financing commitment [2][17] Strategic Rationale - The merger aims to create Canada's fifth-largest oil producer and fourth-largest SAGD producer, combining two heavy oil "pure plays" with similar netbacks and reserve life indexes [8] - Strathcona anticipates significant accretion per share for both MEG and Strathcona shareholders across key metrics, including funds flow per share and production per share [8] - Identified annual synergy opportunities amount to $175 million, including $50 million in overhead reductions and $100 million in operating synergies [8] Shareholder Dynamics - Post-offer, Strathcona expects approximately 379 million shares outstanding, with ownership distribution of 56.5% for Strathcona shareholders, 37.8% for MEG shareholders, and 5.6% for Waterous Energy Fund III [3] - Waterous Energy Fund, holding 79.6% of Strathcona shares, plans to increase its investment through the purchase of an additional 21.4 million Strathcona shares [2][3] Background and Previous Proposals - Strathcona acquired approximately 23.4 million MEG shares, representing about 9.20% of MEG's outstanding shares as of May 5, 2025 [7] - A previous formal combination proposal was made to MEG's board on April 28, 2025, but was dismissed [9][10] Regulatory and Approval Process - The formal offer to purchase and take-over bid circular is expected to be filed within two weeks [11] - The offer will be open for acceptance for at least 105 days, subject to certain conditions [15][16] Financial Advisors - Scotiabank and TD Securities are acting as exclusive financial advisors to Strathcona [26]

Core Insights - Strathcona Resources Ltd. reported strong financial and operational results for Q1 2025, with record production and operating earnings despite flat WTI prices [1][5][10] - The company declared a quarterly dividend of $0.30 per share, reflecting a 15% increase compared to the previous quarter [10][11] - Strathcona has made a strategic investment in MEG Energy Corp., acquiring 23.4 million shares, representing approximately 9.20% of MEG's current shares outstanding [12] Financial Performance - Total oil production reached 194,609 barrels of oil equivalent per day (boe/d), a 5% increase from Q1 2024 [2][5] - Operating earnings were reported at $322.4 million, a 70% increase from the prior quarter [5][23] - Funds from operations amounted to $558.1 million, up from $455.6 million in Q1 2024 [2][23] Production and Operational Highlights - Bitumen production was 65,016 barrels per day, up from 60,150 barrels per day in Q1 2024 [1][39] - The company achieved a total oil production of 136,186 barrels per day, with 70% being oil and condensate [1][39] - Significant production growth was driven by strong performance at Cold Lake, particularly from the Tucker area [5][6] Capital Expenditures and Cash Flow - Capital expenditures for the quarter were $350.6 million, in line with expectations [5][23] - Free cash flow was reported at $184.0 million, compared to $157.9 million in Q1 2024 [2][23] - The company expects decommissioning costs to average approximately $5 million per quarter for the remainder of 2025 [5] Strategic Initiatives - Strathcona is focused on the construction of the new Meota Central processing facility, which is currently 22% complete and on schedule [7] - The company has entered into agreements to sell substantially all of its Montney assets for approximately $2.84 billion [8][9] - An expanded credit facility of approximately $3.255 billion has been approved, enhancing the company's liquidity position [9]

Core Insights - The article discusses the author's background as a private investor with extensive experience in corporate finance and a focus on capital markets, particularly Canadian small cap stocks [1]. Group 1 - The author has been investing since 2003 and transitioned to full-time capital markets involvement after 8 years in corporate finance with a Canadian telecom company [1]. - The author aims to showcase financial analysis and writing skills through contributions on Seeking Alpha, focusing on story-based trading opportunities [1]. - There is an interest in freelance opportunities related to Canadian or American listed stocks, indicating a proactive approach to investment analysis [1].

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%2E%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Montrose Environmental Group, Inc. as of March 31, 2025, and for the three months then ended [Unaudited Condensed Consolidated Statements of Financial Position](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Financial%20Position) As of March 31, 2025, total assets were $992.2 million, with liabilities at $455.1 million, reflecting changes in cash and debt Condensed Consolidated Balance Sheet (in thousands) | Balance Sheet Items | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $249,394 | $237,999 | | **Total Assets** | **$992,161** | **$990,353** | | **Total Current Liabilities** | $121,778 | $158,662 | | **Total Liabilities** | **$455,089** | **$451,161** | | **Total Stockholders' Equity** | $444,144 | $446,264 | [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Revenues increased 14.5% to $177.8 million in Q1 2025, but net loss widened to $19.4 million due to higher expenses Statement of Operations Highlights (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Revenues** | $177,834 | $155,325 | | Cost of revenues | $108,406 | $96,557 | | Selling, general and administrative expense | $66,232 | $57,074 | | Loss from operations | $(10,575) | $(10,065) | | Interest expense, net | $(5,065) | $(3,306) | | **Net loss** | **$(19,359)** | **$(13,357)** | | **Net loss per share** | **$(0.64)** | **$(0.53)** | [Unaudited Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow significantly improved to a $5.5 million inflow in Q1 2025, with cash balance increasing to $30.3 million Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $5,504 | $(22,021) | | Net cash used in investing activities | $(3,705) | $(65,038) | | Net cash provided by financing activities | $15,962 | $73,347 | | **Change in cash, cash equivalents and restricted cash** | **$17,761** | **$(13,712)** | | **Cash at end of period** | **$30,276** | **$9,486** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, segment information, and significant events including debt refinancing and preferred stock redemption - The company operates through three segments: Assessment, Permitting and Response; Measurement and Analysis; and Remediation and Reuse[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk) - No business acquisitions were completed in the three months ended March 31, 2025, but potential aggregate earn-out payments from prior acquisitions total **$26.7 million**, payable between 2025 and 2027[44](index=44&type=chunk)[45](index=45&type=chunk) - In February 2025, the company entered into a new **$500 million credit facility**, comprising a **$200 million term loan** and a **$300 million revolving line of credit**, to replace its 2021 facility[70](index=70&type=chunk) - Subsequent to the quarter end, on April 1, 2025, the company redeemed **$60.0 million** of its outstanding Series A-2 Preferred Stock in cash[117](index=117&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial results, highlighting revenue growth, widened net loss, segment performance, and improved liquidity - Revenue for Q1 2025 increased by **$22.5 million (14.5%)** year-over-year, primarily from organic growth and acquisitions, partially offset by a decline in the Assessment, Permitting and Response segment[145](index=145&type=chunk) - Cost of revenues as a percentage of revenue improved to **61.0%** in Q1 2025 from **62.2%** in Q1 2024, due to operating leverage and improved margins in the treatment technology business[148](index=148&type=chunk) - SG&A expenses increased by **$9.2 million (16.0%)** year-over-year, driven by acquisitions, higher labor costs, increased bad debt expense, and higher stock-based compensation[150](index=150&type=chunk) - The company has temporarily paused its acquisition strategy, though it remains a core part of its long-term growth plan[133](index=133&type=chunk) [Segment Results of Operations](index=44&type=section&id=Segment%20Results%20of%20Operations) Measurement and Analysis and Remediation and Reuse segments showed strong revenue growth, while Assessment, Permitting and Response revenue declined Segment Revenues (in thousands) | Segment | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Assessment, Permitting and Response | $53,120 | $58,580 | (9.3)% | | Measurement and Analysis | $59,030 | $45,494 | 29.8% | | Remediation and Reuse | $65,684 | $51,251 | 28.2% | | **Total Reportable Segments** | **$177,834** | **$155,325** | **14.5%** | Segment Adjusted EBITDA (in thousands) and Margin | Segment | Q1 2025 EBITDA | Q1 2025 Margin | Q1 2024 EBITDA | Q1 2024 Margin | | :--- | :--- | :--- | :--- | :--- | | Assessment, Permitting and Response | $10,572 | 19.9% | $16,280 | 27.8% | | Measurement and Analysis | $13,773 | 23.3% | $6,504 | 14.3% | | Remediation and Reuse | $5,927 | 9.0% | $5,012 | 9.8% | | **Total Operating Segments** | **$30,272** | **17.0%** | **$27,796** | **17.9%** | [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $30.3 million cash and $263.9 million available under its new credit facility - As of March 31, 2025, the company had **$30.3 million** of cash on hand and **$263.9 million** available under its 2025 Credit Facility[167](index=167&type=chunk) - Net cash from operating activities improved to a **$5.5 million inflow** in Q1 2025 from a **$22.0 million outflow** in Q1 2024, mainly due to better working capital management[171](index=171&type=chunk) - Future cash needs include potential earn-out payments of up to **$26.7 million** between 2025 and 2027 related to prior acquisitions[167](index=167&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rates, inflation, and foreign exchange, with potential impacts on income and revenues - A **1.0%** increase or decrease in interest rates would impact annual income before taxes by approximately **$0.9 million**[179](index=179&type=chunk) - The company is experiencing higher labor and direct costs due to inflation but has been raising prices on contracts to offset these effects[181](index=181&type=chunk) - A **1.0%** change in the U.S. dollar exchange rate would impact revenues by approximately **$0.3 million** due to increased international operations[182](index=182&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at the reasonable assurance level[183](index=183&type=chunk) - No changes occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[184](index=184&type=chunk) [PART II. OTHER INFORMATION](index=51&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings but does not anticipate a material adverse effect on its financial position - The company is not a party to any litigation expected to have a material adverse effect on its results of operations or financial position[187](index=187&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor regarding enhanced U.S. tariffs has been added, potentially impacting global economic conditions and company operations - A new risk factor has been added regarding the potential negative effects of enhanced U.S. tariffs and other trade barriers on global economic conditions and the company's business[188](index=188&type=chunk)[189](index=189&type=chunk) - The U.S. government's imposition on April 2, 2025, of a baseline **10% tariff** on most imports creates uncertainty that could negatively impact customer businesses, demand for services, and material costs[189](index=189&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued common stock as acquisition consideration in Q1 2025 and subsequent to quarter-end, exempt from registration - On March 6, 2025, the company issued **323,834 shares** of common stock in total to former owners of Epic and Sensible as part of acquisition consideration[190](index=190&type=chunk) - On May 1, 2025, the company issued **32,064 shares** of common stock in total to former owners of Epic and ETA as part of acquisition consideration[191](index=191&type=chunk) [Item 3. Defaults Upon Senior Securities](index=51&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None [Item 4. Mine Safety Disclosures](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable [Item 5. Other Information](index=52&type=section&id=Item%205.%20Other%20Information) None [Item 6. Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Amended and Restated Credit Agreement and certifications - Key exhibits filed include the new Amended and Restated Credit Agreement and CEO/CFO certifications[199](index=199&type=chunk)

Financial Data and Key Metrics Changes - The company achieved record first-quarter revenue of $177.8 million, a 14.5% increase from $155.3 million in the prior year [19] - Consolidated adjusted EBITDA reached $19 million, a 12.5% increase compared to $16.9 million in the prior year, with an adjusted EBITDA margin of 10.7% [20] - Diluted adjusted net income per share was $0.07, down from $0.16 in the prior year, primarily due to higher interest and tax expenses [21] Business Line Data and Key Metrics Changes - In the Assessment, Permitting and Response (APNR) segment, revenue decreased to $53.1 million from $58.6 million, with adjusted EBITDA margin dropping to 19.9% [22] - The Measurement and Analysis segment saw revenue increase by 29.8% to $59 million, with adjusted EBITDA margin improving to 23.3% [24] - The Remediation and Reuse segment's revenue increased by 28.2% to $65.7 million, although adjusted EBITDA margin declined to 9% [25] Market Data and Key Metrics Changes - The company reported strong demand across all geographies, particularly in the U.S. where private sector clients are increasing industrial activity [9] - International operations thrived, with a recent award from a major public mining company in Australia [12] Company Strategy and Development Direction - The company announced a temporary pause in acquisitions to focus on organic revenue growth, enhanced EBITDA margins, and balance sheet optimization [8] - The full-year 2025 EBITDA guidance was raised to a range of $103 million to $110 million, reflecting confidence in continued growth [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about sustained demand despite regulatory changes, noting that clients are maintaining their course [34] - The company expects to see continued growth in the Remediation and Reuse segment, with margins at or above previous levels [62] Other Important Information - The company redeemed $60 million of Series A-two Preferred stock and plans to redeem the remaining $62 million in 2025 [15] - A stock repurchase program of up to $40 million was approved by the Board [15] Q&A Session Summary Question: Discussion on environmental deregulation and its impact - Management highlighted that while there are proposed deregulatory actions, the legal complexities make quick changes unlikely, and clients are largely staying the course [34] Question: Insights on the Measurement and Analysis business performance - Management noted strong demand across multiple business lines, contributing to the segment's robust performance [42] Question: Clarification on margin expansion drivers - Management indicated that sustained demand and improved operating effectiveness across all segments are key drivers for projected margin expansion [49] Question: Impact of potential tariff changes on business - Management expects minimal impact from tariffs, with clients remaining constructive in discussions regarding pricing adjustments [50] Question: Performance of PFAS-related revenue - Management confirmed that PFAS-related revenue continues to grow and is additive to organic growth, supported by regulatory clarity [60] Question: Project delays due to macro uncertainty - Management stated that macroeconomic factors have not significantly impacted project timelines, maintaining optimism for growth in the Remediation and Reuse segment [62]

Financial Data and Key Metrics Changes - In Q1 2025, the company achieved record revenue of $177.8 million, a 14.5% increase from $155.3 million in the prior year [19] - Consolidated adjusted EBITDA reached $19 million, a 12.5% increase compared to $16.9 million in the prior year, with an EBITDA margin of 10.7% [20] - Diluted adjusted net income per share was $0.07, down from $0.16 in the prior year, primarily due to higher interest and tax expenses [21] Business Line Data and Key Metrics Changes - Assessment, Permitting and Response (APNR) segment revenue decreased to $53.1 million from $58.6 million, with adjusted EBITDA margin dropping to 19.9% [22] - Measurement and Analysis segment revenue increased by 29.8% to $59 million, with adjusted EBITDA margin improving to 23.3% [23] - Remediation and Reuse segment revenue rose by 28.2% to $65.7 million, although adjusted EBITDA margin declined to 9% [24] Market Data and Key Metrics Changes - The company reported five consecutive quarters of revenue growth from PFAS services, which account for 10% to 15% of total revenue [60] - International operations thrived, with a recent award from a major public mining company in Australia, reflecting the growing demand for sustainable practices [11] Company Strategy and Development Direction - The company announced a temporary pause in acquisitions to focus on organic revenue growth, enhanced EBITDA margins, and balance sheet optimization [7] - Increased full-year 2025 EBITDA guidance to a range of $103 million to $110 million, reflecting confidence in continued demand and operational efficiency [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand cycle sustaining despite potential regulatory changes, noting that clients are maintaining their course [35] - The company anticipates continued strong demand driven by private sector clients and state government initiatives [10] Other Important Information - The company redeemed $60 million of Series A-two Preferred stock and plans to redeem the remaining $62 million in 2025 [14] - A stock repurchase program of up to $40 million was approved by the Board to address the disconnect between strong performance and public stock valuation [14] Q&A Session Summary Question: Discussion on environmental deregulation and its impact - Management highlighted that while deregulation is a topic of interest, clients are largely staying the course due to long planning cycles and compliance needs [35] Question: Insights on the strong performance of the Measurement and Analysis business - Management noted that the strong performance is due to sustained demand across multiple business lines and improved operating efficiency [42] Question: Drivers of expected margin expansion for the remainder of the year - Management indicated that sustained demand, improved operating effectiveness, and normalization of segment margins are key drivers for margin expansion [48] Question: Impact of potential tariff exposure on business - Management expects minimal impact from tariffs and noted constructive dialogue with clients regarding pricing adjustments if necessary [50] Question: Seasonality in the Measurement and Analysis business - Management explained that the strong Q1 performance was a catch-up from a previous pause in activity and does not expect this trend to repeat [56] Question: Future growth of PFAS-related revenue - Management confirmed that PFAS revenue is additive to organic growth and is expected to continue growing due to regulatory clarity [60] Question: Project delays in the Remediation and Reuse segment due to macro uncertainty - Management stated that macroeconomic factors have minimal impact on the segment, and solid growth is expected [62] Question: Leverage ratio expectations post-preferred stock redemption - Management expects the leverage ratio to be below 3 after the redemption of preferred stock, targeting under 3.25 for future acquisitions [70]

WELCOME TO THE Q1 2025 EARNINGS CALL May 8, 2025 © 2025 Montrose Environmental Group, Inc. • Proprietary and Confidential 2 Key Updates OPERATING CASH FLOW $5.5M $27.5M Increase over Q1 2024 REVENUE $177.8M 14.5% Increase over Q1 2024 CONSOLIDATED ADJUSTED EBITDA1 $19.0M 10.7% of Revenue © 2025 Montrose Environmental Group, Inc. • Proprietary and Confidential 4 • • • • • • • © 2025 Montrose Environmental Group, Inc. • Proprietary and Confidential 5 ✓ • • ✓ ✓ • ✓ ✓ ✓ ✓ • • ✓ • Consolidated Adjusted EBITDA1 R ...

Core Insights - Montrose Environmental (MEG) reported revenue of $177.83 million for Q1 2025, a 14.5% year-over-year increase, with an EPS of $0.07 compared to $0.16 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $167.97 million by 5.87%, and the EPS surprised positively by 158.33% against a consensus estimate of -$0.12 [1] Revenue Breakdown - Revenues from Assessment, Permitting and Response were $53.12 million, below the two-analyst average estimate of $56.99 million, reflecting a year-over-year decline of 9.3% [4] - Revenues from Remediation & Reuse reached $65.68 million, surpassing the two-analyst average estimate of $54.98 million, marking a year-over-year increase of 28.2% [4] - Revenues from Measurements & Analysis amounted to $59.03 million, exceeding the average estimate of $49.35 million from two analysts, with a year-over-year change of 29.8% [4] Stock Performance - Montrose Environmental's shares have returned 42.1% over the past month, significantly outperforming the Zacks S&P 500 composite's 10.6% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

分组1 - Montrose Environmental (MEG) reported quarterly earnings of $0.07 per share, exceeding the Zacks Consensus Estimate of a loss of $0.12 per share, representing an earnings surprise of 158.33% [1] - The company posted revenues of $177.83 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 5.87%, compared to year-ago revenues of $155.33 million [2] - Over the last four quarters, Montrose Environmental has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] 分组2 - The stock has underperformed the market, losing about 17.7% since the beginning of the year, while the S&P 500 declined by 4.7% [3] - The current consensus EPS estimate for the coming quarter is $0.13 on revenues of $187.79 million, and for the current fiscal year, it is $0.38 on revenues of $758.92 million [7] - The Waste Removal Services industry, to which Montrose Environmental belongs, is currently in the bottom 23% of the Zacks Industry Rank, indicating potential challenges ahead [8]

Exhibit 99.1 Montrose Environmental Group Reports Record First Quarter Results, Increases 2025 Guidance, and Announces Inaugural Stock Repurchase Program First Quarter 2025 Highlights (comparisons to first quarter 2024) Increased 2025 Guidance Strategic Capital Allocation Update Little Rock, Arkansas (May 7, 2025) – Montrose Environmental Group, Inc. (the "Company," "Montrose" or "MEG") (NYSE: MEG) is on a mission to help protect the air we breathe, the water we drink, and the soil that feeds us, and aims t ...