Limbach Holdings, Inc. · NASDAQ:LMB
Limbach — Q2 2024 Earnings Presentation
27 slides from Limbach's earnings presentation, August 2024
Slide 1: Investor Presentation
NASDAQ: LMB 2024 Q2 Earnings | August 2024 Investor Presentation
Slide 2: Forward Looking Statements
Forward Looking Statements 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 C
Slide 3: Limbach is a leading building systems solutions firm
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
Slide 4: Limbach At-A-Glance
Limbach At-A-Glance OUR WHO WHO WE WE ARE PARTNER WITH FOCUS & IMPACT A building systems solutions firm with expertise in We partner with Building Owners with Our people make a critical difference by fostering mechanical, electrical, and plumbing systems. Mission-Critical MEP Infrastructure sustaina
Slide 5: Our Key Markets - Focused on Mission Critical Markets with Durable Demand
Our Key Markets - Focused on Mission Critical Markets with Durable Demand Carving our own path to lessen the impact of macroeconomic trends Healthcare Industrial & Manufacturing Mission-critical facilities where operations must remain online Flexibility in budgets, catering to customer needs spannin
Slide 6: Limbach Combines Best-in-Class Attributes of Key Verticals
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. In-House Typical C
Slide 7: Two Operating Segments - ODR and GCR
Two Operating Segments - ODR and GCR Owner Direct Relationships (“ODR”) General Contractor Relationships (“GCR”) Existing Buildings New Construction ODR work is driven by developing and proposing customized solutions GCR projects are characterized as having a solution in place therefore are that are
Slide 8: Focused on Growth
Focused on Growth Three Pillar Approach to Scale the Business: Organic Segment Revenue Margin Expansion Scale Through Percentage Mix Shift Through Evolved Offerings Acquisitions Traditional Speciality Contractor ODR ODR ODR Services 50% 65-70% ~80% GCR 50% On-Demand Energy, Professional 1. Geographi
Slide 9: Pillar #1 - Performance Due to Mix Shift
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. % 70.0% Gross Margin / Adjusted EBITDA Margin 60.0% ODR Revenue Percent
Slide 10: Pillar #1 – Organic Segment Mix Shift To Achieve Maximized Returns
Pillar #1 – Organic Segment Mix Shift To Achieve Maximized Returns Challenging Industry Paradigms; Bigger isn’t Better 21% GCR work is less sales focused, dependent on production 2019 49% 2023 51% field craft and operations staff ODR work consists of multiple transactions with heavier 79% focus on s
Slide 11: Pillar #1 – Total Revenue is Static, but Higher Margin ODR Revenue is Growing
Pillar #1 – Total Revenue is Static, but Higher Margin ODR Revenue is Growing Total Revenue ODR Revenue $553.3M $568.2M $490.4M $496.8M $516.4M $262.0M $216.4M $127.2M $140.3M $115.1M 2019 2020 2021 2022 2023 Total Revenue is down 6.7% ODR Revenue CAGR of 19.3% for Total revenue growth projected fro
Slide 12: Pillar #2 - Expanded Margins through Evolved Customer Services
Pillar #2 - Expanded Margins through Evolved Customer Services LMB 2023 Services: Evolved LMB Services: Competitive Lump Sum Bidding On-Demand Facility Services 2024 Current Focus GCR Design-Assist Critical System Repairs 2025 Projected Focus Design-Build Data Driven Solutions Performance Contractin
Slide 13: Pillar #2 - Expanded Margins through Evolved Customer Services
Pillar #2 - Expanded Margins through Evolved Customer Services Unique Service Offerings: Customer Value: On-Demand Services (Rental Equip.) Mission-critical building systems solutions support providing best-in-class options for long- and short-term Critical System Repairs impacts Dedicated resources
Slide 14: Pillar #2 - What We Do - Catering to Customer Needs & Budgets
Pillar #2 - What We Do - Catering to Customer Needs & Budgets Operating Expense Capital Projects Professional Services On-Demand Maintenance & Mechanical Building Automation Consultative Services Facility Assessments Services Operations Infrastructure Projects Upgrades Critical System Repairs Equipm
Slide 15: Pillar #3 - Current & Target Geographies
Pillar #3 - Current & Target Geographies Disciplined and focused M&A strategy comprises “Tuck-In” and “Expansion” acquisitions of companies with consistent and scalable business models Tuck-In Acquisition Criteria ❑ Total Revenue: $10-15M w/80%+ ODR Revenue ❑ +15% YoY ODR Growth ❑ Focus on Gross Pro
Slide 16: Pillar #3 - Recent Tuck-In Transaction – Closed July 3, 2023
Pillar #3 - Recent Tuck-In Transaction – Closed July 3, 2023 M&A CRITERIA: Geographic Proximity: Chattanooga, TN location is expected to be synergistic with Limbach’s existing Jake - Attractive Operating Footprint Marshall subsidiary. Supports ODR Strategy: - Increased ODR Exposure Emphasis on expan
Slide 17: Pillar #3 - Recent New Geography Transaction – Closed November 1, 2023
Pillar #3 - Recent New Geography Transaction – Closed November 1, 2023 M&A CRITERIA: Geographic Proximity: Greensboro, NC location is strategically located. - Attractive Operating Footprint Supports ODR Strategy: - Increased ODR Exposure Significant share of revenues are owner-direct in nature, dove
Slide 18: Strong Balance Sheet and Disciplined Capital Allocation Strategy
Strong Balance Sheet and Disciplined Capital Allocation Strategy Key Balance Sheet Items June 30, December 31, 20241 20231 Cash and Cash Equivalents $59.5 $59.8 Balance Sheet to fund organic growth and acquisitions Current Assets $213.3 $217.0 Current Liabilities $130.6 $145.1 Working Capital $82.7
Slide 19: Financial Goals - 2024 Guidance
Financial Goals 2024 Guidance1 Revenue Gross Margin / Adj. EBITDA Cash $515M to $535M Total Revenue Total Gross Margin 24-26% Continued Strong Cash Flow Mix Shift 65% to 70% ODR Adjusted EBITDA $55M to $58M 70% of Adj. EBITDA = Free Cash ODR Revenue Growth 28% to 43% Adj. EBITDA Margin 10.3% to Flow
Slide 20: Investment Highlights
Investment Highlights Strategy Combines Compelling Reoccurring, Mission Strong Balance Organic Growth `` and Customer `` Value Critical `` Revenue Sheet `` and Strategic Acquisitions Creates Competitive and Economically Capital Allocation Advantage Resilient Business Strategy Large Market Diversifie
Slide 21: Appendix
APPENDIX 21
Slide 22: Operating and Financial Update - QTD 2Q'24
Operating and Financial Update QTD 2Q’24 Performance Revenue1 Gross Profit and (Margin)1 Adjusted EBITDA2 $124.9 $122.2 $28.5 $33.5 (22.8%) (27.4%) $58.8 $82.8 $13.8 $25.4 $17.2 $11.9 $66.1 $39.5 $11.3 $8.1 2Q’23 2Q’24 2Q’23 2Q’24 2Q’23 2Q’24 Year-Over-Year Year-Over-Year Year-Over-Year Change Chang
Slide 23: Operating and Financial Update - YTD 2Q'24
Operating and Financial Update YTD 2Q’24 Performance Revenue1 Gross Profit and (Margin)1 Adjusted EBITDA2 $245.9 $241.2 $54.7 $64.6 (22.3%) (26.8%) $117.5 $157.0 $25.6 $47.5 $33.1 $20.6 $128.4 $84.2 $21.6 $17.1 2Q’23 2Q’24 2Q’23 2Q’24 2Q’23 2Q’24 Year-Over-Year Year-Over-Year Year-Over-Year Change C
Slide 24: Sustainability at Limbach
Sustainability at Limbach People: Empowering Our Team & Supporting Our Communities ● We champion employee health and safety through our Hearts & Minds program Revit ● We offer competitive compensation and a range of benefits and ed alizin Accredit Infra g Existin programs Industry ing struc ture g T
Slide 25: Non-GAAP Reconciliation Table
Non-GAAP Reconciliation Table Reconciliation of Adjusted EBITDA Margin* Fiscal Year ended December 31, Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2019 2020 2021 2022 2023 2024 2023 2024 2023 Revenue: $ 553,334 $ 568,209 $ 490,351 $ 496,782 $ 516,350 $ 122,235 $ 124,882 $ 24
Slide 26: Non-GAAP Reconciliation Table
Non-GAAP Reconciliation Table Reconciliation of Free Cash Flow* Fiscal Year ended December 31, Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2019 2020 2021 2022 2023 2024 2023 2024 2023 Adjusted EBITDA: $ 16,752 $ 25,111 $ 23,276 $ 31,765 $ 46,801 $ 13,809 $ 11,905 $ 25,566 $
Slide 27: Contact Us
Contact Us INVESTOR RELATIONS Julie Kegley Financial Profiles [email protected] 310.622.8246 @Limbach @Limbach @Limbachinc @Limbach @LimbachFacilityServices