Preface

We spoke with Dan Batrack, CEO of one of our favorite stocks in our thematic basket on Water, Tetra Tech Inc. (TTEK US).

You can view our thematic primer, titled High Quality H2O, here:

The company had just reported earnings and held their inaugural investor day in the weeks prior, so we had a lot to talk about regarding the company and industry at large. It was very refreshing to hear from a CEO that has such an intimate knowledge of his company’s offerings as well as the mission that it is trying to advance, which is the implementation of reliable water systems in a variety of applications. This singular focus allows TTEK to be positioned very nicely to benefit from both endogenous (population shifts, replacement cycles, etc.) and exogenous (PFAS legislation, for example) developments under a range of market conditions.

We discuss the scientific approaches the company and others are taking to remediate PFAS and other emerging contaminants while also dealing with delicate issues in certain geographies related to climate and economic growth, which present a new opportunity set to win business and take price. We also discuss how software plays a role in their consulting business (both for volumes as well as adding unit pricing in addition to time and materials) both today and as they look towards their 2020 goals that call for mid-to-high-double digit top and bottom line growth.