Limbach Holdings, Inc. · NASDAQ:LMB
Limbach — Q3 2023 Earnings Presentation
28 slides from Limbach's earnings presentation, Nov 9, 2023
Slide 1: Investor Presentation November 2023
NASDAQ: LMB INVESTOR PRESENTATION November 2023
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
Slide 3: Who We Are
Who We Are Limbach is a building systems solutions firm with expertise in the design, prefabrication, installation, management and maintenance of heating, ventilation, air-conditioning (“HVAC”), mechanical, electrical, plumbing and controls systems. By providing full life-cycle capabilities, from co
Slide 4: Limbach At-A-Glance
Limbach At-A-Glance OUR MISSION-CRITICAL TURNKEY FACILITY WHO UNIQUES MARKETS SERVICES WE ARE • Owner Direct Projects • Maintenance Contracts Our People Healthcare • Time-and-Materials PURPOSE: Data Centers We do what it takes to deliver, • Automatic Temperature Controls maintain, and optimize missi
Slide 5: Our Two Segments – Working to Deliver Maximum Value
Our Two Segments – Working to Deliver Maximum Value General Contractor Relationships (“GCR”) Owner Direct Relationships (“ODR”) GCR projects are characterized as ‘having a solution Additional margin, relative to GCR, is a function of in place’ and thus earn a lower margin than ODR, working directly
Slide 6: Investment Highlights
Investment Highlights We provide full life-cycle capabilities that combine our disciplined approach with Evolving, Differentiated engineered solutions and craft expertise enabling us to be the one-stop-shop for Business Model building owners to maximize their investment in their mission-critical ass
Slide 7: Carving Our Own Unique Path in the Industry
Carving Our Own Unique Path in the Industry We pride ourselves on what sets us apart – our dedicated team, disciplined approach, and unwavering commitment to our mission-critical clients. While others in our industry may be focused on changing skylines, our purpose and expertise lie in improving and
Slide 8: 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. Typical Custom Eng
Slide 9: Increased Margins Expected to Lead to a Better Multiple
Increased Margins Expected to Lead to a Better Multiple1 Evolved Model: Compared to Higher multiples Multiples & Margins of Engineering/OEM Firms Our Goal Lower margins Higher margins Who We Were: Compared to Multiples & Margins of Specialty Contractors Lower multiples 1. For demonstrational purpose
Slide 10: Creating Value in Strong Primary Mission-Critical End Markets
Creating Value in Strong Primary Mission-Critical End Markets LMB Core Markets 01 02 03 04 05 06 Healthcare Data Centers Industrial Higher Edu. Cultural & Entm’t. Life Sciences Mission-Critical Durable Demand Economic Resilience A facility's uninterrupted Customers with strong Balanced blend between
Slide 11: How We Execute
How We Execute Three Pillar Approach to Scale the Business: Organic Segment Margin Expansion Scale Through Mix Strategy Through Evolved Offerings Acquisitions ODR ODR 50% 70% Reactive Proactive to Bids Partner GCR GCR 50% 30% Produce Better Produce Better ODR Grow Revenue and Blended GP Margin Oppor
Slide 12: Driving Recurring Revenue & Margin Expansion
Driving Recurring Revenue & Margin Expansion TRADITIONAL CONTRACTORS OWNER-DIRECT BUILDING (Legacy Peers) SYSTEMS SOLUTIONS APPROACH • Recurring subscription agreement revenue from • Primarily single-instance construction building owners projects • Data – driven solution selling • Longer duration pr
Slide 13: Bottom Line Evolution Driven by Segment Mix Shift
Bottom Line Evolution Driven by Segment Mix Shift Over the period from FY 2018 – FY 2022, Gross Margin has expanded nearly 58% to 18.9%. This has enabled us to drive Adjusted EBITDA Margin1 up more than 5x from 1.6% to 8.9%1 over the trailing twelve months. 25.0% 70.0% 20.0% Gross Margin / Adjusted
Slide 14: Thoughtful Capital Allocation
Thoughtful Capital Allocation Balance Sheet Net cash position coupled with undrawn revolver Adjusted EBITDA1 provide capital to fund acquisitions Flexible Target Conversion of 70% & Agile Acquisitions Capital Stringent acquisition Management FCF2 gating criteria providing a curated list of targets O
Slide 15: Scale Through Acquisitions
Scale Through Acquisitions CURRENT & TARGET GEOGRAPHIES As of November 2023 Acquisitions Tuck-In ❑ Total Revenue: $10-15M w/80%+ ODR Revenue ❑ +15% YoY ODR Growth ❑ Focus on GP Quality & Account Resources ❑ Ex: New Geography Acquisitions ❑ Total Revenue: $25M-40M w/ODR & GCR Mix ❑ Year 3 = at least
Slide 16: Expanding Our Position: Disciplined Approach To Improve Margins
Expanding Our Position: Disciplined Approach To Improve Margins POST-ACQUISITION APPROACH TO IMPROVE QUALITY CRITERIA: Data-Driven Decision Making - Risk management tools and data - Enable timely decisions and predicting of outcomes early in the project Geographic Proximity Supports ODR Strategy Lim
Slide 17: Recent Transaction – Closed July 3, 2023
Recent Transaction – Closed July 3, 2023 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 expanding ODR Segment with si
Slide 18: Recent Transaction – Closed November 1, 2023
Recent Transaction – Closed November 1, 2023 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, dovetailing well with Limbach’s fo
Slide 19: FY 2023 Financial Guidance
FY 2023 Financial Guidance1 Projected FY 2023 Guidance3 Metric: Low High Revenue $490 million – $520 million Adjusted EBITDA2 $42 million – $45 million 1. Provided as of the date of these slides. 2. With respect to projected 2023 Adjusted EBITDA, a quantitative reconciliation is not available withou
Slide 20: Connect With Us on Social Media
Connect With Us on Social Media @Limbach @Limbach @Limbachinc @Limbach @LimbachFacilityServices 18
Slide 21: Appendix
APPENDIX 19
Slide 22: Operating and Financial Update – QTD 3Q'23 Performance
Operating and Financial Update QTD 3Q’23 Performance Revenue1 Gross Profit and (Margin)1 Adjusted EBITDA2 GCR ODR GCR ODR $31.2 $13.6 $127.8 $122.4 (24.5%) $24.9 $19.3 $65.8 (20.3%) $10.2 $59.7 $15.2 $62.7 $61.9 $12.0 $9.6 3Q'22 3Q'23 3Q'22 3Q'23 3Q'22 3Q'23 Year-Over-Year Year-Over-Year Year-Over-Y
Slide 23: Operating and Financial Update – YTD 3Q'23 Performance
Operating and Financial Update YTD 3Q’23 Performance Revenue1 Gross Profit and (Margin)1 Adjusted EBITDA2 $373.7 $353.3 $86.0 $64.5 (23.0%) $34.2 $183.3 (18.3%) $152.4 $37.8 $52.4 $20.2 $200.9 $190.3 $33.6 $26.7 3Q'22 3Q'23 3Q'22 3Q'23 3Q'22 3Q'23 Year-Over-Year Year-Over-Year Year-Over-Year Change
Slide 24: Operating and Financial Update – Key Balance Sheet Items
Operating and Financial Update Key Balance Sheet Items September 30, 20231 December 31, 20221 Cash and Cash Equivalents $57.5 $36.0 Current Assets $214.2 $226.0 Current Liabilities $136.5 $159.1 • Received net proceeds of $15.6 million from the Working Capital $77.7 $66.9 settlement of an outstandin
Slide 25: Non-GAAP Reconciliation Table
Non-GAAP Reconciliation Table For the Three and Nine Months and TTM periods ended September 30, 2023 Reconciliation of Net Income to Adjusted EBITDA Three Months Ended September 30, Nine Months Ended September 30, TTM September 30, (in thousands) 2023 2022 2023 2022 2023 Net income $7,192 $ 3,641 $
Slide 26: Non-GAAP Reconciliation Table – Adjusted EBITDA Margin
Non-GAAP Reconciliation Table Reconciliation of Adjusted EBITDA Margin* Fiscal Year ended December 31, TTM September 30, (in thousands) 2018** 2019 2020 2021 2022 2023 Revenue: $ 546,526 $ 553,334 $ 568,209 $ 490,351 $ 496,782 $517,142 Net income (loss) ($1,845) ($1,775) $5,807 $ 6,714 $6,799 $ 19,3
Slide 27: Additional Modeling Considerations for FY 2023
Additional Modeling Considerations for FY 2023 Metric Comment FY 2023 Segment Revenue Mix 50 / 50 GCR Revenue Change Targeted annual single digit contraction ODR Revenue Change Targeted annual growth in “low teens” GCR Gross Margin Targeted 12% to 15% ODR Gross Margin Targeted 25% to 28% SG&A Margin
Slide 28: Contact Us
Contact Us INVESTOR RELATIONS Jeremy Hellman, CFA Vice President (212) 836-9626 / jhellman@equityny.com