Limbach Holdings, Inc. Announces First Quarter 2024 Results
WARRENDALE, Pa. , May 08 /Businesswire/ - 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
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:
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.
2024 Guidance
We are updating our guidance for FY 2024 as follows:
|
Current |
|
Previous |
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.
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.
LIMBACH HOLDINGS, INC. Condensed Consolidated Statements of Operations (Unaudited) |
||||||||
|
|
Three Months Ended March 31, |
||||||
(in thousands, except share and per share data) |
|
|
2024 |
|
|
|
2023 |
|
Revenue |
|
$ |
118,976 |
|
|
$ |
121,009 |
|
Cost of revenue |
|
|
87,888 |
|
|
|
94,782 |
|
Gross profit |
|
|
31,088 |
|
|
|
26,227 |
|
Operating expenses: |
|
|
|
|
||||
Selling, general and administrative |
|
|
22,876 |
|
|
|
21,050 |
|
Change in fair value of contingent consideration |
|
|
623 |
|
|
|
141 |
|
Amortization of intangibles |
|
|
1,057 |
|
|
|
383 |
|
Total operating expenses |
|
|
24,556 |
|
|
|
21,574 |
|
Operating income |
|
|
6,532 |
|
|
|
4,653 |
|
Other income (expenses): |
|
|
|
|
||||
Interest expense |
|
|
(475 |
) |
|
|
(667 |
) |
Interest income |
|
|
562 |
|
|
|
— |
|
Gain (loss) on disposition of property and equipment |
|
|
491 |
|
|
|
(215 |
) |
Gain (loss) on change in fair value of interest rate swap |
|
|
149 |
|
|
|
(156 |
) |
Total other income (expenses) |
|
|
727 |
|
|
|
(1,038 |
) |
Income before income taxes |
|
|
7,259 |
|
|
|
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: |
|
|
|
|
||||
Basic |
|
|
11,159,849 |
|
|
|
10,475,364 |
|
Diluted |
|
|
11,894,747 |
|
|
|
11,040,063 |
|
LIMBACH HOLDINGS, INC. Condensed Consolidated Balance Sheets (Unaudited) |
|||||||
(in thousands, except share and per share data) |
March 31, 2024 |
|
December 31, 2023 |
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
48,239 |
|
|
$ |
59,833 |
|
Restricted cash |
|
65 |
|
|
|
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 assets |
|
47,096 |
|
|
|
51,690 |
|
Other current assets |
|
8,164 |
|
|
|
7,657 |
|
Total current assets |
|
199,419 |
|
|
|
217,000 |
|
|
|
|
|
||||
Property and equipment, net |
|
22,634 |
|
|
|
20,830 |
|
Intangible assets, net |
|
23,972 |
|
|
|
24,999 |
|
Goodwill |
|
16,433 |
|
|
|
16,374 |
|
Operating lease right-of-use assets |
|
20,749 |
|
|
|
19,727 |
|
Deferred tax asset |
|
5,505 |
|
|
|
5,179 |
|
Other assets |
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