false000160616300016061632024-05-082024-05-08


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
CURRENT REPORT
 
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported): May 8, 2024
 
 
LIMBACH HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
 
 
Delaware001-3654146-5399422
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
 
797 Commonwealth Drive, Warrendale, Pennsylvania 15086
(Address of principal executive offices, including zip code)
 
Registrant’s telephone number, including area code: (412) 359-2100
Not Applicable
(Former name or former address, if changed since last report)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.0001 par valueLMBThe Nasdaq Stock Market LLC
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company  ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨


Item 2.02Results of Operations and Financial Condition.
On May 8, 2024, Limbach Holdings, Inc. (the “Company”) issued a press release dated the same date announcing its financial results for its quarter ended March 31, 2024. We have furnished a copy of this release as Exhibit 99.1 to this Current Report on Form 8-K.
Item 7.01Regulation FD Disclosure.
The Company is furnishing presentation materials (the “Investor Presentation”) that management intends to use, possibly with modifications, in one or more meetings from time to time with current and potential investors. The Investor Presentation includes an update on the Company’s current operations and major projects, as well as information relating to the Company’s strategic plans, goals, growth initiatives and outlook, and forecasts for future performance and industry development.
The foregoing description of the Investor Presentation does not purport to be complete and is qualified in its entirety by reference to the complete text of the Investor Presentation attached as Exhibit 99.2 to this Current Report on Form 8-K.
The information contained in the Investor Presentation is summary information that should be considered in the context of the Company’s filings with the Securities and Exchange Commission and other public announcements the Company may make by press release or otherwise from time to time. The Investor Presentation speaks as of the date of this report. While the Company may elect to update the Investor Presentation in the future to reflect events and circumstances occurring or existing after the date of this report, the Company specifically disclaims any obligation to do so.
By furnishing the portions of this Current Report on Form 8-K that are disclosed under this Item 7.01 and the Investor Presentation that is an exhibit hereto, the Company makes no admission as to the materiality of any information included under this Item 7.01, including without limitation the Investor Presentation. The Investor Presentation contains forward-looking statements. See Page 2 of the Investor Presentation for a discussion of certain forward-looking statements that are included therein and the risks and uncertainties related thereto.
The information in this Item 7.01 of this Current Report on Form 8-K and Exhibit 99.2 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.Description
104Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 LIMBACH HOLDINGS, INC. 
    
    
 By: /s/ Jayme L. Brooks 
 Name: Jayme L. Brooks 
 Title: Executive Vice President and Chief Financial Officer 
 
Dated: May 8, 2024
 



limbach-primarylogo_rgbxed.jpg

FOR IMMEDIATE RELEASE
Limbach Holdings, Inc. Announces First Quarter 2024 Results
Quarterly Revenue from Owner Direct Relationships (“ODR”) Segment up 26.5% Year-over-Year
ODR Segment Accounted for 62.4% of Revenue and 71.3% of Consolidated Gross Profit for the Quarter
Record Quarterly Consolidated Gross Margin of 26.1%
Quarterly Net Income of $7.6 million, up 153.5% for the period and Adjusted EBITDA up 35.4% Year-over-Year
Increase in 2024 Adjusted EBITDA Guidance Range - $51 million to $55 million
WARRENDALE, PA – May 8, 2024 – Limbach Holdings, Inc. (Nasdaq: LMB) (“Limbach” or the “Company”) today announced its financial results for the quarter ended March 31, 2024.
2024 First Quarter Financial Overview Compared to 2023 First Quarter
•ODR revenue increased 26.5%, or $15.5 million, to $74.3 million accounting for 62.4% of consolidated revenue.
•Consolidated revenue was $119.0 million, a decrease of 1.7% from $121.0 million.
•Total gross profit was $31.1 million, an increase of 18.5% from $26.2 million.
•ODR gross profit accounted for $22.2 million, or 71.3%, of total gross profit.
•Net income of $7.6 million, or $0.64 per diluted share, compared to net income of $3.0 million, or $0.27 per diluted share.
•Adjusted EBITDA of $11.8 million, up 35.4% from $8.7 million.
•Net cash used in operating activities of $3.9 million compared to net cash provided by operating activities of $9.4 million.
Management Comments
“I am pleased with our performance in the first quarter. We advanced our strategy of becoming a partner to building owners with mission critical building systems by accelerating our shift to ODR through acquisitions and organic growth. As a result, we are increasing Adjusted EBITDA guidance for the year,” said Michael McCann, Limbach’s President and Chief Executive Officer. “At the end of Q1, ODR revenue was 62.4% of total revenue, up from 55.1% at the end of Q4. With this increase in our higher margin ODR business, we are now projecting $51 million to $55 million in Adjusted EBITDA for the year compared to our previous $49 million to $53 million guidance, and our annual goal for ODR revenue as a percentage of consolidated revenue has increased from a range of 60% - 70% to a revised range of 65% - 70%. With this mix shift, we expect to see full-year Adjusted EBITDA Margin in the range of 9.6% to 10.8% for 2024 based on full-year total revenue in the range of $510 million to $530 million. Shifting our segment mix from General Contractor Relationships (“GCR”) to ODR is a key pillar of our growth strategy to create a stronger, more durable Limbach, and our strategy is working.
“Gross margins and Adjusted EBITDA margins have steadily increased with the increase in ODR revenue since we began executing our strategy. As we have moved away from bigger, lower margin GCR projects, consolidated revenue has declined by design. This is an intentional sacrifice of topline growth to increase bottom line profit. Once we reach an optimized segment mix, we will expect to see the growth of the ODR business strategy reflected in topline revenue growth.
“Although the first quarter is typically the softest of the year due to weather and the seasonality of customer budgets, we are off to a strong start as business began gaining momentum in March. Our team is executing well, and their strong performance is driving the growth of the ODR business. We are adding sales resources and training as planned investments as we focus on the ODR sales model, which has been a transition for the overall business and requires more customer interaction and selling activities. These investments are paying off as we generate more frequent, more profitable transactions.

“Our strategy to grow the ODR business has plenty of runway. We strongly believe we have only scratched the surface with respect to customer relationships and market penetration. I am confident in Limbach’s ability to continue to grow its ODR business, and in our team’s ability to perform at a high level. We will continue to be disciplined with our engagement of new business. Our balance sheet remains strong, and we will judiciously make investments that support our strategy. Executing our strategy is how we drive higher returns and create meaningful value for our stockholders.”
The following are results for the three months ended March 31, 2024 compared to the three months ended March 31, 2023:
•Consolidated revenue was $119.0 million, a decrease of 1.7% from $121.0 million. ODR segment revenue of $74.3 million increased by $15.5 million, or 26.5%, while GCR revenue decreased by $17.6 million, or 28.2%. The increase in period-over-period ODR segment revenue was primarily due to the Company's continued focus on the accelerated growth of its ODR business and as a result of the ACME and Industrial Air transactions. These entities were not acquired entities of the Company for the three months ended March 31, 2023.
•Total gross profit was $31.1 million, compared to $26.2 million. ODR gross profit increased $6.3 million, or 39.3%, due to the combination of an increase in revenue and higher segment margins of 29.8% versus 27.1% driven by contract mix. GCR gross profit decreased $1.4 million, or 13.5%, primarily due to lower revenue despite higher margins of 20.0%, compared with 16.6% in the prior period. The total gross profit percentage increased from 21.7% to 26.1%, mainly driven by the mix of higher margin ODR segment work, becoming more selective when pursuing GCR work, and as a result of the ACME and Industrial Air transactions.
•Selling, general and administrative (“SG&A”) expenses increased by approximately $1.8 million, to $22.9 million, compared to $21.1 million. The increase in SG&A expense was primarily due to approximately $1.1 million of SG&A expenses incurred within the ACME and Industrial Air entities. SG&A expense also increased due to a $0.4 million increase in professional fees, a $0.3 million increase in travel and entertainment expenses and a $0.2 million increase associated with payroll related expenses. As a percent of revenue, SG&A expenses were 19.2%, up from 17.4% in the prior period.
•Interest expense was $0.5 million during the current quarter compared to $0.7 million, which was the result of a lower overall outstanding debt balance period-over-period.
•Interest income was $0.6 million during the current quarter. This increase was due to the Company's investments in overnight repurchase agreements, U.S. Treasury Bills, and money market funds.
•Net income was $7.6 million as compared to $3.0 million, an increase of 153.5%. A portion of the increase was attributable to a $2.0 million quarter-over-quarter income tax benefit related to the vesting of stock-based compensation awards at substantially higher market prices at each vesting date in 2024 as compared to 2023. Diluted income per share was $0.64 as compared to $0.27 in the prior period. Adjusted EBITDA was $11.8 million as compared to $8.7 million in the prior period, an increase of 35.4%.
•Net cash used in operating activities of $3.9 million compared to net cash provided by operating activities of $9.4 million in the prior period.
Balance Sheet
At March 31, 2024, cash and cash equivalents were $48.2 million. Current assets were $199.4 million and current liabilities were $124.4 million at March 31, 2024, representing a current ratio of 1.60x compared to 1.50x at December 31, 2023. Working capital was $75.0 million at March 31, 2024, an increase of $3.2 million from December 31, 2023. At March 31, 2024, we had $10.0 million in borrowings against our revolving credit facility and $5.2 million for standby letters of credit.








2
2024 Guidance
We are updating our guidance for FY 2024 as follows:
CurrentPrevious
Revenue
$510 million - $530 million(1)
$510 million - $530 million
Adjusted EBITDA$51 million - $55 million$49 million - $53 million
(1)    No change from the previous
With respect to projected 2024 Adjusted EBITDA guidance and Adjusted EBITDA Margin, a quantitative reconciliation is not available without unreasonable efforts due to the high variability, complexity and low visibility with respect to certain items, which are excluded from Adjusted EBITDA. We expect the variability of these items to have a potentially unpredictable, and potentially significant, impact on future financial results.
Conference Call Details
Date:Thursday, May 9, 2024
Time:9:00 a.m. Eastern Time
Participant Dial-In Numbers:
Domestic callers:
(877) 407-6176
International callers:(201) 689-8451
Access by Webcast

The call will also be simultaneously webcast over the Internet via the “Investor Relations” section of Limbach’s website at www.limbachinc.com or by clicking on the conference call link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=BmWmfvNA. An audio replay of the call will be archived on Limbach’s website for 365 days.
About Limbach
Limbach is a building systems solution firm that partners with building owners and facilities managers who have mission critical mechanical (heating, ventilation and air conditioning), electrical and plumbing infrastructure. We strive to be an indispensable partner to our customers by providing services that are essential to the operation of their businesses. We work with building owners primarily in six vertical markets: healthcare, industrial and manufacturing, data centers, life science, higher education, and cultural and entertainment. We have more than 1,300 team members in 19 offices across the eastern United States. Our team members uniquely combine engineering expertise with field installation skills to provide custom solutions that leverage our full life-cycle capabilities, which allows us to address both the operational and capital projects needs of our customers.
Additional Information
Investors and others should note that Limbach announces material financial information to its investors using its investor relations website, U.S. Securities and Exchange Commission filings, press releases, public conference calls/videos, and webcasts. Limbach uses these channels, as well as social media, to communicate with our stockholders and the public about the Company, the Company’s services and other Company information. It is possible that the information that Limbach posts on social media could be deemed to be material information. Therefore, Limbach encourages investors, the media, and others interested in the Company to review the information posted on the social media channels listed on Limbach’s investor relations website.
3
Forward-Looking Statements
We make forward-looking statements in this press release within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations or forecasts for future events, including, without limitation, our earnings, Adjusted EBITDA, revenues, expenses, backlog, capital expenditures or other future financial or business performance or strategies, results of operations or financial condition, and in particular statements regarding the impact of the COVID-19 pandemic on the construction industry in future periods, timing of the recognition of backlog as revenue, the potential for recovery of cost overruns, and the ability of Limbach to successfully remedy the issues that have led to write-downs in various business units. These statements may be preceded by, followed by or include the words “may,” “might,” “will,” “will likely result,” “should,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “continue,” “target,” “goal,” or similar expressions. These forward-looking statements are based on information available to us as of the date they were made and involve a number of risks and uncertainties, which may cause them to turn out to be wrong. Some of these risks and uncertainties may in the future be amplified by the COVID-19 outbreak and there may be additional risks that we consider immaterial or which are unknown. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Please refer to our most recent annual report on Form 10-K, as well as our subsequent filings on Form 10-Q and Form 8-K, which are available on the SEC’s website (www.sec.gov), for a full discussion of the risks and other factors that may impact any forward-looking statements in this press release.
Investor Relations

Financial Profiles, Inc.
Julie Kegley
LMB@finprofiles.com


4
LIMBACH HOLDINGS, INC.
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended
March 31,
(in thousands, except share and per share data)20242023
Revenue$118,976 $121,009 
Cost of revenue87,888 94,782 
Gross profit31,088 26,227 
Operating expenses:
Selling, general and administrative22,876 21,050 
Change in fair value of contingent consideration623 141 
Amortization of intangibles1,057 383
Total operating expenses24,556 21,574 
Operating income6,532 4,653 
Other income (expenses):
Interest expense(475)(667)
Interest income562 — 
Gain (loss) on disposition of property and equipment491 (215)
Gain (loss) on change in fair value of interest rate swap149 (156)
Total other income (expenses)727 (1,038)
Income before income taxes7,259 3,615 
Income tax (benefit) provision(327)622 
Net income$7,586 $2,993 
Earnings Per Share (“EPS”)
Earnings per common share:
    Basic$0.68 $0.29 
    Diluted$0.64 $0.27 
Weighted average number of shares outstanding:
Basic11,159,849 10,475,364 
Diluted11,894,747 11,040,063 

5
LIMBACH HOLDINGS, INC.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share data)March 31, 2024December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents$48,239 $59,833 
Restricted cash65 65 
Accounts receivable (net of allowance for credit losses of $330 and $292 as of March 31, 2024 and December 31, 2023, respectively)95,855 97,755 
Contract assets47,096 51,690 
Other current assets8,164 7,657 
Total current assets199,419 217,000 
Property and equipment, net22,634 20,830 
Intangible assets, net23,972 24,999 
Goodwill16,433 16,374 
Operating lease right-of-use assets20,749 19,727 
Deferred tax asset5,505 5,179 
Other assets472 330 
Total assets$289,184 $304,439 
LIABILITIES
Current liabilities:
Current portion of long-term debt$2,532 $2,680 
Current operating lease liabilities3,678 3,627 
Accounts payable, including retainage51,910 65,268 
Contract liabilities41,107 42,160 
Accrued income taxes446 446 
Accrued expenses and other current liabilities24,720 30,967 
Total current liabilities124,393 145,148 
Long-term debt19,353 19,631 
Long-term operating lease liabilities17,109 16,037 
Other long-term liabilities2,801 2,708 
Total liabilities163,656 183,524 
STOCKHOLDERS’ EQUITY
Common stock, $0.0001 par value; 100,000,000 shares authorized, issued 11,447,738 and 11,183,076, respectively, and 11,268,086 and 11,003,424 outstanding, respectively1 1 
Additional paid-in capital89,555 92,528 
Treasury stock, at cost (179,652 shares at both period ends)(2,000)(2,000)
Retained earnings37,972 30,386 
Total stockholders’ equity125,528 120,915 
Total liabilities and stockholders’ equity$289,184 $304,439 
6

LIMBACH HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended
March 31,
(in thousands)20242023
Cash flows from operating activities:
Net income$7,586 $2,993 
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization2,712 1,922 
Provision for credit losses39 52 
Stock-based compensation expense1,249 1,133 
Noncash operating lease expense1,045 976 
Amortization of debt issuance costs11 38 
Deferred income tax provision (327)(63)
(Gain) loss on sale of property and equipment(491)215 
Loss on change in fair value of contingent consideration623 141 
(Gain) loss on change in fair value of interest rate swap(149)156 
Changes in operating assets and liabilities:
   Accounts receivable1,861 24,581 
   Contract assets4,594 (2,737)
   Other current assets(592)(2,743)
   Accounts payable, including retainage(14,060)(14,929)
   Prepaid income taxes— (44)
   Accrued taxes payable— 686 
   Contract liabilities(1,052)868 
   Operating lease liabilities(974)(934)
   Accrued expenses and other current liabilities(5,863)(3,170)
   Other long-term liabilities(156)225 
Net cash (used in) provided by operating activities(3,944)9,366 
Cash flows from investing activities:
Proceeds from sale of property and equipment561 101 
Advances from joint ventures4 — 
Purchase of property and equipment(2,541)(923)
Net cash used in investing activities(1,976)(822)
Cash flows from financing activities:
Payments on A&R Wintrust Term Loans— (1,857)
Payments on finance leases(693)(639)
Taxes paid related to net-share settlement of equity awards(5,187)(847)
Proceeds from contributions to Employee Stock Purchase Plan206 174 
Net cash used in financing activities(5,674)(3,169)
(Decrease) increase in cash, cash equivalents and restricted cash(11,594)5,375 
Cash, cash equivalents and restricted cash, beginning of period59,898 36,114 
Cash, cash equivalents and restricted cash, end of period$48,304 $41,489 
Supplemental disclosures of cash flow information
Noncash investing and financing transactions:
   Right of use assets obtained in exchange for new operating lease liabilities$2,097 $742 
   Right of use assets obtained in exchange for new finance lease liabilities308 1,402 
   Right of use assets disposed or adjusted modifying finance lease liabilities(41)(1)
Interest paid484 657 
Cash paid for income taxes$— $44 
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LIMBACH HOLDINGS, INC.
Condensed Consolidated Segment Operating Results (Unaudited)
Three Months Ended
March 31,		Increase/(Decrease)
(in thousands, except for percentages)20242023$%
Statement of Operations Data:  
Revenue:  
ODR$74,256 62.4 %$58,718 48.5 %$15,538 26.5 %
GCR44,720 37.6 %62,291 51.5 %(17,571)(28.2)%
Total revenue118,976 100.0 %121,009 100.0 %(2,033)(1.7)%
Gross profit:
ODR(1)
22,161 29.8 %15,909 27.1 %6,252 39.3 %
GCR(2)
8,927 20.0 %10,318 16.6 %(1,391)(13.5)%
Total gross profit31,088 26.1 %26,227 21.7 %4,861 18.5 %
Selling, general and administrative(3)
22,876 19.2 %21,050 17.4 %1,826 8.7 %
Change in fair value of contingent consideration623 0.5 %141 0.1 %482 341.8 %
Amortization of intangibles1,057 0.9 %383 0.3 %674 176.0 %
Total operating income$6,532 5.5 %$4,653 3.8 %$1,879 40.4 %
(1)As a percentage of OCR revenue.
(2)As a percentage of GCR revenue.
(3)Included within selling, general and administrative expenses was $1.2 million and $1.1 million of stock based compensation expense for the three months ended March 31, 2024 and 2023, respectively.

8

Non-GAAP Financial Measures
In assessing the performance of our business, management utilizes a variety of financial and performance measures. The key measures are Adjusted EBITDA and Adjusted EBITDA Margin, which are non-GAAP financial measures. We define Adjusted EBITDA as net income plus depreciation and amortization expense, interest expense, and taxes, as further adjusted to eliminate the impact of, when applicable, other non-cash items or expenses that are unusual or non-recurring that we believe do not reflect our core operating results. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total consolidated revenue. We believe that Adjusted EBITDA and Adjusted EBITDA Margin are meaningful to our investors to enhance their understanding of our financial performance for the current period and our ability to generate cash flows from operations that are available for taxes, capital expenditures and debt service. We understand that these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties as a measure of financial performance and to compare our performance with the performance of other companies that report Adjusted EBITDA and Adjusted EBITDA Margin. Our calculation of Adjusted EBITDA and Adjusted EBITDA Margin, however, may not be comparable to similarly titled measures reported by other companies. When assessing our operating performance, investors and others should not consider this data in isolation or as a substitute for net income calculated in accordance with GAAP. Further, the results presented by Adjusted EBITDA and Adjusted EBITDA Margin cannot be achieved without incurring the costs that the measure excludes. A reconciliation of net income to Adjusted EBITDA, the most comparable GAAP measure, is provided below.
We refer to our estimated revenue on uncompleted contracts, including the amount of revenue on contracts for which work has not begun, less the revenue we have recognized under such contracts, as “backlog.” Backlog includes unexercised contract options.

Reconciliation of Net Income to Adjusted EBITDA and Adjusted EBITDA Margin
Three Months Ended
March 31,
(in thousands)20242023
Net income$7,586 $2,993 
Adjustments:
   Depreciation and amortization2,712 1,922 
   Interest expense475 667 
   Interest income(562)— 
   Non-cash stock-based compensation expense1,249 1,133 
   Change in fair value of interest rate swap(149)156 
   CEO transition costs— 811 
   Income tax (benefit) provision(327)622 
   Acquisition and other transaction costs30 — 
   Change in fair value of contingent consideration623 141 
   Restructuring costs(1)
120 240 
Adjusted EBITDA$11,757 $8,685 
Revenue$118,976 $121,009 
Adjusted EBITDA Margin9.9 %7.2 %
(1)For the three months ended March 31, 2024 and 2023, the majority of the restructuring costs related to our Southern California and Eastern Pennsylvania branches.
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Investor Presentation 2024 Q1 Earnings | May 2024 NASDAQ: LMB

 
NASDAQ: LMB | 2 We make forward-looking statements in this presentation within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations or forecasts for future events, including, without limitation, the execution of the Company’s long-term strategic roadmap and Limbach 3.0. These statements may be preceded by, followed by or include the words “may,” “might,” “will,” “will likely result,” “should,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “continue,” “target, ” “scenario” or similar expressions. These forward-looking statements are based on information available to us as of the date they were made and involve a number of risks and uncertainties which may cause them to turn out to be wrong. Some of these risks and uncertainties may in the future be amplified by the COVID-19 outbreak and there may be additional risks that we consider immaterial, or which are unknown. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Please refer to our most recent annual report on Form 10-K, as well as our subsequent filings on Form 10-Q and Form 8-K, which are available on the SEC’s website (www.sec.gov), for a full discussion of the risks and other factors that may impact any forward-looking statements in this presentation. Forward Looking Statements

 
Limbach is a leading building systems solutions firm specializing in revitalizing mission-critical mechanical/HVAC, electrical, and plumbing infrastructure within existing buildings. NASDAQ: LMB | 3

 
NASDAQ: LMB | 4 Limbach At-A-Glance WHO WE ARE WHO WE PARTNER WITH 1,300 TEAM MEMBERS We help limit downtime, increase energy efficiency, and reduce operating costs by revitalizing existing infrastructure We partner with Building Owners with Mission-Critical MEP Infrastructure OUR FOCUS & IMPACT 19 BRANCH LOCATIONS Healthcare Data Centers Higher Education Industrial & Manufacturing Life Science Cultural & Entertainment A building systems solutions firm with expertise in mechanical, electrical, and plumbing systems.

 
NASDAQ: LMB | 5 Carving our own path to lessen the impact of macroeconomic trends Mission-critical facilities where operations must remain online Flexibility in budgets, catering to customer needs spanning both Operating Expense and Capital Project budgets Durable demand, we partner with top customers with competitive positioning and market growth Our Key Markets - Focused on Mission Critical Markets with Durable Demand Healthcare Data Centers Higher Education Industrial & Manufacturing Life Sciences Cultural & Entertainment

 
NASDAQ: LMB | 6 Limbach Combines Best-in-Class Attributes of Key Verticals While our market has numerous competitors, Limbach has combined the best aspects of each in this space, enabling us to be the one-stop-shop for building owners to maximize their investment of their mission-critical assets. GC = General Contractor CM = Construction Manager Example of Firms: Typical Clients: Custom Engineered Solutions: In-House Craft/Field Expertise: Equipment/ Platform Agnostic: Vertical Market Discipline: Specialty Contractors GC/CM Consulting & Engineering Firms Building Owners OEM Firms Building Owners Specialty Contractors Property Managers Building Owners Full-Life Cycle Capability Firm Building Owners GC/CM

 
NASDAQ: LMB | 7 Two Operating Segments - ODR and GCR GCR projects are characterized as having a solution in place therefore are more likely to be procured through a competitive bid process • Most E&C peers are focused on large construction, working for General Contractors • Tends to more cyclical and dependent on macroeconomic conditions • Production Labor Dependent & longer schedules making it difficult to pass along inflationary costs • GCR Quarterly Gross Margin FY2023: ○ Q1: 16.6% ○ Q2: 17.1% ○ Q3: 19.3% ○ Q4: 15.0% General Contractor Relationships (“GCR”) Owner Direct Relationships (“ODR”) ODR work is driven by developing and proposing customized solutions, where competing firms are challenged to provide solutions • Includes reoccurring revenue from service and maintenance contracts. • Reduce risk by being in a direct payment relationship with owner vs. indirect, reducing collection cycles from change order processing. • Shorter schedules and increased number of transactions • ODR Quarterly Gross Margin FY2023: ○ Q1: 27.1% ○ Q2: 29.3% ○ Q3: 29.3% ○ Q4: 30.1% Overarching Goal: Maximized Returns

 
NASDAQ: LMB | 8 Focused on Growth Three Pillar Approach to Scale the Business: Organic Segment Revenue Percentage Mix Shift Margin Expansion Through Evolved Offerings Scale Through Acquisitions Full Transition to Achieving Optimal Higher Margin Mix Transformation from Contractor to OEM Margins Grow Footprint and Building Owner Market Share GCR 30-35% ODR 65-70% 1. Geographic Footprint Expansion & Tuck-In Acquisitions to strengthen market share & footprint 2. Expanded Offerings & Services On-Demand Infrastructure Support Energy, Carbon, & Data Professional Consultative Services Traditional Speciality Contractor Services GCR 50% ODR 50% GCR ~20% ODR ~80% 2023 2024 Beyond 2024

 
NASDAQ: LMB | 9 Pillar #1 - Performance Due to Mix Shift Over the period from FY 2019 – FY 2023, Gross Margin has expanded nearly 1,010 bps to 23.1% This has enabled us to drive Adjusted EBITDA Margin1 up more than 3x from 3.0% to 9.1% ODR Rev. % 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% G ro ss M ar gi n / A dj us te d EB IT D A M ar gi n O D R R evenue Percentage 1. See Adjusted EBITDA margin calculation on slide 25.

 
NASDAQ: LMB | 10 Pillar #1 – Organic Segment Mix Shift To Achieve Maximized Returns 21% Segment Mix Shift Projection 2019 79% 2024 65- 70% 30- 35% 2023 51%49% Beyond 2024 ~80% ~20% Challenging Industry Paradigms; Bigger isn’t Better GCR work is less sales focused, dependent on production field craft and operations staff ODR work consists of multiple transactions with heavier focus on sales and account management Limbach is creating a customer-centric culture focused on our top accounts Building relationships requires consistent effort, and creates reoccurring revenue GCR work carries greater risk, amplifies with onset of inflation. ODR work maintains stability and resilience amidst changing macroeconomic conditions. GCR Revenue ODR Revenue

 
NASDAQ: LMB | 11 Total Revenue Pillar #1 – Total Revenue is Static, but Higher Margin ODR Revenue is Growing Consolidated Revenue is down 6.7% from 2019 ODR Revenue is up 127.5% from 2019 Total revenue growth occurs once optimal higher margin mix shift is optimized ODR Revenue $568.2M $127.2M $490.3M $140.3M $496.8M $216.4M $516.3M $262.0M $553.3M $115.1M 2019 2020 2021 2022 2023

 
NASDAQ: LMB | 12 Pillar #2 - Expanded Margins through Evolved Customer Services LMB 2023 Services: Evolved LMB Services: Mechanical Contractor Building Systems Solutions Firm Competitive Lump Sum Bidding Design-Assist Design-Build Performance Contracting Maintenance Contracts Spot Work Water Treatment Automated Temp. Controls Special Projects G C R O D R On-Demand Facility Services Critical System Repairs Data Driven Solutions Maintenance & Operations MEP Infrastructure Projects Equipment Upgrades & Products Professional Consultative Services Building Automation Upgrades Energy Efficiency Upgrades Decarbonization Initiatives O D R 2024 Current Focus 2025 Projected Focus 2026 Projected Focus

 
NASDAQ: LMB | 13 Pillar #2 - Expanded Margins through Evolved Customer Services On-Demand Services (Rental Equip.) Critical System Repairs Data Driven Solutions Maintenance & Operations MEP Infrastructure Projects Equipment Upgrades & Products Professional Consultative Services Building Automation Upgrades Energy Efficiency Upgrades Decarbonization Initiatives Unique Service Offerings: Customer Value: Mission-critical building systems solutions support providing best-in-class options for long- and short-term impacts Dedicated resources: onsite every day to become an extension of a customer’s staff, developing expertise in their systems; leads to trusted partnerships Maximize returns on building assets by reducing costs and energy usage and meeting sustainability objectives Solutions that are optimized for the customer; not promoting a brand of equipment Indispensable partner to customers leads to long-term relationships generating consistent, reoccurring revenue, attractive margins and opportunities to grow the business with the customer Expertise to provide customized solutions

 
NASDAQ: LMB | 14 Pillar #2 - What We Do - Catering to Customer Needs & Budgets Operating Expense Professional ServicesCapital Projects On-Demand Services Maintenance & Operations Critical System Repairs Equipment Upgrades Rental Equipment Data Driven Solutions (CMMS, Insights, Asset Management) Mechanical Infrastructure Projects Energy Efficiency Upgrades Decarbonization Initiatives Building Automation Upgrades Consultative Services Facility Assessments

 
NASDAQ: LMB | 15 Limbach Location States with branch locations and potential tuck-in opportunity Potential new geographies for acquisitions Pillar #3 - Current & Target Geographies Tuck-In Acquisition Criteria ❑ Total Revenue: $10-15M w/80%+ ODR Revenue ❑ +15% YoY ODR Growth ❑ Focus on Gross Profit Quality & Account Resources ❑ Ex: New Geography Acquisition Criteria ❑ Total Revenue: $25M-40M w/Strong ODR Mix ❑ Local Niche with Mature Building Owner Relationships ❑ Ex: Disciplined and focused M&A strategy comprises “Tuck-In” and “Expansion” acquisitions of companies with consistent and scalable business models

 
NASDAQ: LMB | 16 Pillar #3 - Recent Tuck-In Transaction – Closed July 3, 2023 Attractive Business Model: - Compelling Valuation & Structure Geographic Proximity: - Attractive Operating Footprint Supports ODR Strategy: - Increased ODR Exposure - Attractive Customer Base Capability Expansion: - Value Creation Opportunities - Emphasis on Industrial Sector Other: - Cultural Compatibility - Tech Focused M&A CRITERIA: Total consideration paid by Limbach at closing was $5 million (subject to typical working capital adjustments), sourced from available cash, with performance-based, contingent earn-outs totaling $2.5 million. ACME expects to contribute on average $10 million in revenue and in excess of $1 million in EBITDA on a full year basis. Chattanooga, TN location is expected to be synergistic with Limbach’s existing Jake Marshall subsidiary. Emphasis on expanding ODR Segment with significant owner-direct exposure and an indispensable ‘on-premise’ presence at a number of Fortune 500 caliber customers. Specialize in Industrial Maintenance & Operations, Critical System Repairs, and Emergency Services with clients in the Chemical & Manufacturing Clients & Hydroelectric Producers.

 
NASDAQ: LMB | 17 Pillar #3 - Recent New Geography Transaction – Closed November 1, 2023 Total consideration paid by Limbach at closing was $13.5 million (subject to typical working capital adjustments), sourced from available cash, with performance-based, contingent earn-outs totaling $6.5 million available over the 2024 / 2025 period. Industrial Air expects to contribute on average $30 million in revenue and $4 million in EBITDA on a full year basis. Greensboro, NC location is strategically located. Significant share of revenues are owner-direct in nature, dovetailing well with Limbach’s focus on expanding segment opportunities. Attractive Business Model: - Compelling Valuation & Structure Geographic Proximity: - Attractive Operating Footprint Supports ODR Strategy: - Increased ODR Exposure - Attractive Customer Base Capability Expansion: - Value Creation Opportunities - Emphasis on Industrial Sector Other: - Cultural Compatibility - Tech Focused M&A CRITERIA: Strong relationships with key customers in industrial and manufacturing end markets. These key customers have multiple facilities across the eastern US.

 
NASDAQ: LMB | 18 Strong Balance Sheet and Disciplined Capital Allocation Strategy Balance Sheet to fund organic growth and acquisitions Investment in expanding and evolving service offerings Strategic acquisitions – disciplined acquisition criteria Key Balance Sheet Items March 31, 20241 December 31, 20231 Cash and Cash Equivalents $48.2 $59.8 Current Assets $199.4 $217.0 Current Liabilities $124.4 $145.1 Working Capital $75.0 $71.9 Net (Over) / Under Billing2 $(16.0) $(12.7) Revolver $10.0 $10.0 Term Loan — — Financing Liability (Sale and Leaseback Transaction) $5.4 $5.4 Vehicle Finance Leases $6.9 $7.3 Total Debt $22.3 $22.7 Net Debt (Cash)3 $(25.9) $(37.1) Equity $125.5 $120.9 Dollars in millions. 1. See the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2024. 2. For the calculation of the Company’s net billing position, refer to Note 4 to the condensed consolidated financial statements within the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2024. 3.The Company's calculation of the Net Debt (Cash) position is Cash and Cash Equivalents minus Total Debt.

 
NASDAQ: LMB | 19 Financial Goals 1. Reflects guidance issued by the Company on May 8th, 2024 . This guidance speaks only as of this date and this presentation does not constitute confirmation or updating of guidance. Free cash flow is defined as cash flow from operating activities, less changes in working capital and capital expenditures (excluding investment in rental equipment). See slide 2. 2024 Guidance1 $510M to $530M Total Revenue Mix Shift 65% to 70% ODR Revenue Growth: 25% to 36% Total Gross Margin 24-26% Adjusted EBITDA $51M to $55M Adj. EBITDA Margin 9.6% to 10.8% Continued Strong Cash Flow 70% of Adj. EBITDA = Free Cash Revenue Gross Margin / Adj. EBITDA Cash

 
NASDAQ: LMB | 20 Investment Highlights `` Large Market Opportunity with Tailwinds for Sustained Growth `` Strong Balance Sheet and Capital Allocation Strategy `` Strategy Combines Organic Growth and Strategic Acquisitions `` Limited Fixed Costs and Smaller Projects Provide Flexible Business Model `` Reoccurring, Mission Critical Revenue and Economically Resilient Business `` Compelling Customer Value Creates Competitive Advantage `` Diversified Customers and Markets `` Revitalizing Existing Infrastructure to Focus on Sustainability and Cost Efficiency

 
APPENDIX 21

 
NASDAQ: LMB | 22 Operating and Financial Update 1Q’24 Performance Dollars in millions. Totals may not foot due to rounding. 1. See the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2024. 2. See slide 24 and 25 for Non-GAAP Reconciliation Table. Revenue1 $121.0 Adjusted EBITDA2 + 35.4%- 1.7% Year-Over-Year Change Year-Over-Year Change $119.0 Gross Profit and (Margin)1 + 18.5% Year-Over-Year Change $26.2 (21.7%) $31.1 (26.1%) $74.3 $44.7 $58.7 $62.3 1Q’23 1Q’24 1Q’23 1Q’24 $22.2 $8.9 $10.3 $15.9 1Q’23 1Q’24 $8.7 $11.8

 
NASDAQ: LMB | 23 Sustainability at Limbach Reducing Energy & Operating Costs Revitalizing Existing Infrastructure ENERGY STAR® Partner Community Engagement Diversity & Inclusion Social Responsibility Hearts & Minds Comp & Benefits Packages Industry Accredited Training Sustainability at PLANET GOVERNANCE PE O PL E ● We champion employee health and safety through our Hearts & Minds program ● We offer competitive compensation and a range of benefits and programs ● Our dedication to employee growth was recognized with the APEX award from Training magazine in 2023 & 2024 ● We take great pride in contributing to the communities where we live and operate through our Hearts & Hands ERG People: Empowering Our Team & Supporting Our Communities Planet: Revitalizing Existing Infrastructure ● Building MEP systems are a major source of carbon emissions ● Our focus: Enhancing energy efficiency and cutting operating costs by revitalizing existing infrastructure ● ENERGY STAR® Partner: Providing facility assessments and engineered solutions Governance: Governing Responsibility ● Committed to transparency, accountability and ethical conduct ● Decisions are made in the best interest of stockholders and stakeholders ● Clear policies and procedures to mitigate risks and safeguard assets ● Board oversight of sustainability policies and programs ● Code of Conduct and Ethics ● Whistleblower policy

 
NASDAQ: LMB | 24 Non-GAAP Reconciliation Table Reconciliation of Adjusted EBITDA Margin* *Use of Non-GAAP Financial Measures In assessing the performance of our business, management utilizes a variety of financial and performance measures. The key measure is Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure. We define Adjusted EBITDA as net income plus depreciation and amortization expense, interest expense (net), and taxes, as further adjusted to eliminate the impact of, when applicable, other non-cash items or expenses that are unusual or non-recurring or that we believe do not reflect our core operating results. We believe that Adjusted EBITDA is meaningful to our investors to enhance their understanding of our financial performance for the current period and our ability to generate cash flows from operations that are available for taxes, capital expenditures and debt service. We understand that Adjusted EBITDA is frequently used by securities analysts, investors and other interested parties as a measure of financial performance and to compare our performance with the performance of other companies that report Adjusted EBITDA. Our calculation of Adjusted EBITDA, however, may not be comparable to similarly titled measures reported by other companies. When assessing our operating performance, investors and others should not consider this data in isolation or as a substitute for net income (loss) calculated in accordance with GAAP. Further, the results presented by Adjusted EBITDA cannot be achieved without incurring the costs that the measure excludes. Fiscal Year ended December 31, Three Months Ended March 31, (in thousands) 2019 2020 2021 2022 2023 2024 2023 Revenue: $ 553,334 $ 568,209 $ 490,351 $ 496,782 $ 516,350 $ 118,976 $ 121,009 Net income (loss) ($ 1,775) $ 5,807 $ 6,714 $ 6,799 $ 20,754 $ 7,586 $ 2,993 Adjustments: Depreciation and amortization 6,286 6,171 5,948 8,158 8,244 2,712 1,922 Interest expense 6,285 8,627 2,568 2,144 2,046 475 667 Interest income — — — — (1,217) (562) — Non-cash stock-based compensation expense 1,766 1,068 2,601 2,742 4,910 1,249 1,133 Loss on early debt extinguishment 513 — 1,961 — 311 — — Impairment of goodwill 4,359 — — — — — — Change in fair value of warrant liability (588) 1,634 (14) — — — — Change in fair value of interest rate swap — — — (310) 124 (149) 156 Severance expense — 622 — — — — — Loss on early termination of operating lease — — — 849 — — — CEO Transition costs — — — — 958 — 811 CFO Transition costs 576 — — — — — — Gain on embedded derivative (388) — — — — — — Restructuring costs — — — 6,016 1,770 120 240 Change in fair value of contingent consideration — — — 2,285 729 623 141 Income tax provision (benefit) (282) 1,182 2,763 2,809 7,346 (327) 622 Acquisition and other transaction costs — — 735 273 826 30 — Adjusted EBITDA $ 16,752 $ 25,111 $ 23,276 $ 31,765 $ 46,801 $ 11,757 $ 8,685 Adjusted EBITDA Margin 3.0% 4.4% 4.7% 6.4% 9.1% 9.9% 7.2%

 
NASDAQ: LMB | 25 Non-GAAP Reconciliation Table Reconciliation of Free Cash Flow* 1. Represents non-cash activity associated with depreciation and amortization, provision for credit losses / doubtful accounts, stock-based compensation expense, operating lease expense, amortization of debt issuance costs, deferred income tax provision, gain or loss on sale of property and equipment, loss on early termination of operating lease, loss on early debt modification, changes in fair value of contingent consideration, change in fair value of warrant liability, impairment of goodwill, and changes in the fair value of the Company’s interest rate swap. 2. Excludes $2,031K of rental equipment purchases made during the three months ended March 31, 2024. *Use of Non-GAAP Financial Measures In assessing the performance of our business, management utilizes a variety of financial and performance measures. The key measure is Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure. We define Adjusted EBITDA as net income plus depreciation and amortization expense, interest expense (net), and taxes, as further adjusted to eliminate the impact of, when applicable, other non-cash items or expenses that are unusual or non-recurring or that we believe do not reflect our core operating results. We believe that Adjusted EBITDA is meaningful to our investors to enhance their understanding of our financial performance for the current period and our ability to generate cash flows from operations that are available for taxes, capital expenditures and debt service. We understand that Adjusted EBITDA is frequently used by securities analysts, investors and other interested parties as a measure of financial performance and to compare our performance with the performance of other companies that report Adjusted EBITDA. Our calculation of Adjusted EBITDA, however, may not be comparable to similarly titled measures reported by other companies. When assessing our operating performance, investors and others should not consider this data in isolation or as a substitute for net income (loss) calculated in accordance with GAAP. Further, the results presented by Adjusted EBITDA cannot be achieved without incurring the costs that the measure excludes. Fiscal Year ended December 31, Three Months Ended March 31, (in thousands) 2019 2020 2021 2022 2023 2024 2023 Adjusted EBITDA: $ 16,752 $ 25,111 $ 23,276 $ 31,765 $ 46,801 $ 11,757 $ 8,685 Free Cash Flow: Net Income (loss) ($ 1,775) $ 5,807 $ 6,714 $ 6,799 $ 20,754 $ 7,586 $ 2,993 Non-cash operating activities(1) 16,568 13,767 16,997 17,634 18,222 4,712 4,570 Less: Purchases of property and equipment(2) (2,663) (1,483) (791) (993) (2,266) (510) (923) Free Cash Flow $ 12,130 $ 18,091 $ 22,920 $ 23,440 $ 36,710 $ 11,788 $ 6,640 Free Cash Flow Conversion % 72.4% 72.0% 98.5% 73.8% 78.4% 100.3% 76.4%

 
Contact Us INVESTOR RELATIONS Julie Kegley Financial Profiles jkegley@finprofiles.com 310.622.8246 @Limbach @Limbach @Limbach @LimbachFacilityServices@Limbachinc

 
v3.24.1.u1
Cover
May 08, 2024
Document Information [Line Items]  
Document Type 8-K
Document Period End Date May 08, 2024
Entity Registrant Name LIMBACH HOLDINGS, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-36541
Entity Tax Identification Number 46-5399422
Entity Address, Address Line One 797 Commonwealth Drive
Entity Address, City or Town Warrendale
Entity Address, State or Province PA
Entity Address, Postal Zip Code 15086
City Area Code 412
Local Phone Number 359-2100
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, $0.0001 par value
Trading Symbol LMB
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001606163
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