Limbach Holdings, Inc. · NASDAQ:LMB
Limbach — Q1 2024 Earnings Presentation
26 slides from Limbach's earnings presentation, May 2024
Slide 1: Investor Presentation 2024 Q1 Earnings
NASDAQ: LMB 2024 Q1 Earnings | May 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 We help limit downtime, increase energy efficiency, mechanical, electrical, and plumbing systems. Mission-Critical MEP Infrastructure and red
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”) ODR work is driven by developing and proposing customized GCR projects are characterized as having a solution in place therefore are solutions, where competing firms are challenged to pro
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 $490.3M $496.8M $516.3M $262.0M $216.4M $127.2M $140.3M $115.1M 2019 2020 2021 2022 2023 Consolidated Revenue is down ODR Revenue is up Total revenue growth occurs 6.7% from 2019 1
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 2024 Current On-Demand Facility Services Focus GCR Design-Assist Critical System Repairs 2025 Projected Design-Build Data Driven Solutions Focus 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 March 31, December 31, 20241 20231 Cash and Cash Equivalents $48.2 $59.8 Balance Sheet to fund organic growth and acquisitions Current Assets $199.4 $217.0 Current Liabilities $124.4 $145.1 Working Capital $75.0
Slide 19: Financial Goals 2024 Guidance
Financial Goals 2024 Guidance1 Revenue Gross Margin / Adj. EBITDA Cash $510M to $530M Total Revenue Total Gross Margin 24-26% Continued Strong Cash Flow Mix Shift 65% to 70% Adjusted EBITDA $51M to $55M 70% of Adj. EBITDA = Free Cash ODR Revenue Growth: 25% to 36% Adj. EBITDA Margin 9.6% to 10.8% 1.
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
Operating and Financial Update 1Q’24 Performance Revenue1 Gross Profit and (Margin)1 Adjusted EBITDA2 $121.0 $119.0 $26.2 $31.1 (21.7%) (26.1%) $11.8 $22.2 $58.7 $74.3 $8.7 $15.9 $62.3 $44.7 $8.9 $10.3 1Q’23 1Q’24 1Q’23 1Q’24 1Q’23 1Q’24 Year-Over-Year Year-Over-Year Year-Over-Year Change Change Cha
Slide 23: Sustainability at Limbach
Sustainability at Limbach People: Empowering Our Team & Supporting Our Communities ● We champion employee health and safety through our Hearts & Revit Minds program ed alizin ● We offer competitive compensation and a range of benefits and Accredit Infra g Existin Industry ing struc ture g programs T
Slide 24: Non-GAAP Reconciliation Table
Non-GAAP Reconciliation Table Reconciliation of Adjusted EBITDA Margin* 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
Slide 25: Non-GAAP Reconciliation Table
Non-GAAP Reconciliation Table Reconciliation of Free Cash Flow* 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
Slide 26: Contact Us
Contact Us INVESTOR RELATIONS Julie Kegley Financial Profiles [email protected] 310.622.8246 @Limbach @Limbach @Limbachinc @Limbach @LimbachFacilityServices