Limbach Holdings, Inc. · NASDAQ:LMB
Limbach — Investor Presentation (March 2019)
25 slides from Limbach's investor presentation, Mar 18, 2019
Slide 1: Investor Presentation March 2019
Investor Presentation March 2019
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward - looking statements 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, Adjus
Slide 3: Who We Are
Who We Are Founded in 1901 , Limbach is the ninth largest mechanical contractor in the nation 1 . The Company exclusively serves the domestic building market with a culture that values the talents and contributions of its union and open shop craft laborers, talented design professionals and dedicate
Slide 4: Complete Portfolio of MEP Services
Complete Portfolio of MEP Services Limbach is a preeminent national provider of technically - oriented mechanical design, engineering, installation, and maintenance services to sophisticated customers and facility owners who demand exceptional design creativity and construction quality . Offering a
Slide 5: Broad Geographic Reach
Broad Geographic Reach Limbach’s current operating platform provides exposure to large population centers along the Eastern Seaboard experiencing solid growth and infrastructure investment, in addition to a well - established presence in the energy and manufacturing - driven resurgent Midwest, and t
Slide 6: High Growth End-Markets
High Growth End - Markets ● Healthcare ● Sports ● Education ● Government ● Hospitality ● Entertainment ● Transportation ● Commercial New in 2018 ● Mission Critical/Data Centers Limbach’s focus is on large and growing markets that require specialized technical capabilities and solutions . As a result
Slide 7: Favorable Industry Outlook
Source: FMI U.S. Construction Outlook Fourth Quarter 2018 Report . Construction Put - in - Place: Core Markets Healthcare Manufacturing Transportation Education $30,000 $40,000 $50,000 $60,000 2016 2017 2018 2019 2020 2021 2022 ($ in millions) $80,000 $90,000 $100,000 $110,000 $120,000 $130,000 2016
Slide 8: Segment Reporting
Segment Reporting Limbach is diversified in its marketplace offerings, which complement each other, allowing cross - selling between segments to occur . Current ratio is approximately 80 % Construction and 20 % Service . Our three - year goal is to shift the ratio to 70 % / 30 % . Service business t
Slide 9: Enduring Customer Relationships
Enduring Customer Relationships Owner Direct Relationships Contractors Limbach’s reputation for design innovation and quality execution has cemented relationships with leading facility owners, construction managers and general contractors who value dependability and partnership . Management’s high p
Slide 10: Service Division Annuity Income
Service Division Annuity Income Limbach’s Service division further cements long - term customer relationships and captures the annuity income stream resulting from the maintenance of expensive and critical facility systems . Maintenance of HVAC, plumbing, piping and other systems is not elective, an
Slide 11: Backlog/Pipeline Offer Strong Visibility
Limbach’s considerable backlog of construction work, together with a robust pipeline of qualified opportunities, provide support for the achievability of the Company’s growth objectives over the next several years . Limbach considers backlog in the Construction segment to include work - in - progres
Slide 12: Compelling Investment Opportunity
Compelling Investment Opportunity Institutional investors seeking exposure to the building/facility infrastructure sector are limited in their investment options . With geographically diversified operations across ten business units, Limbach’s growth profile closely tracks the non - residential cons
Slide 13: Mid-Atlantic Turnaround
Mid - Atlantic Turnaround What Happened 1. Oversold Capacity 2. Extremely Tight Labor Market 3. Overtime Expense 4. Compounding Project Delays 5. Rework Status 1. New Leadership Team 2. “Guardrails” on Sales 3. 12 - Month Labor Look - Ahead 4. Reduce branch revenue expectations to proper level 13
Slide 14: Mid-Atlantic Opportunity
Mid - Atlantic Opportunity x Collect on Claims for Delays and Outstanding Change Orders x Promote Electrical Business x Promote Owner - Direct MEP Prime x Expand Service Segment, Energy Monitoring and Retrofits 14
Slide 15: 2018 Issues – 2019 Going Forward
2018 Issues – 2019 Going Forward 15 Construction Service
Slide 16: 2019 Going Forward Construction Segment
2019 Going Forward 16 Construction Segment Labor = Margins Customer = Owner Prefabrication = Modular Margin Improvement We expect moderate growth in our Construction segment . Margin improvement is our focus, generated through increasing margin pricing due to labor conditions (supply & demand), movi
Slide 17: 2019 Going Forward Service Segment
2019 Going Forward 17 Service Segment Building Automation Systems Predictive Maintenance Energy Business Line Virtual Facilities Management Traditional Service will continue its rapid expansion . We are enhancing our Service business lines to include building automation systems, energy monitoring &
Slide 18: Well Diversified Business Model
Well Diversified Business Model Limbach’s multifaceted diversification provides insulation against regional economic cycles, a changing regulatory and political environment favoring some industries over others, and the fortunes of any single customer or facility owner . Within each vector, Limbach h
Slide 19: Accelerated Growth through Acquisition
Accelerated Growth through Acquisition Acquisitions represent a key component of Limbach’s growth strategy, offering trade, geographic and end - market diversification, as well as the operating efficiencies resulting from the leverage of Limbach’s corporate platform . Limbach’s unique position in th
Slide 20: Core Operations Exceeding Plan
Core Operations Exceeding Plan ($ in millions) 2 Enterprise Value $81 $3,987 $1,978 Enterprise Value / 2019 EBITDA 4,5 4.8x 7.8x 8.9x % Owned by Top 10 Holders 59.0% 42.2% 46.6% 2016 - 2018 Revenue CAGR 21.1% 2.5% 10.1% 2019E - 2020 Revenue Growth 4,5 5.0% 2.3% 5.6% 2018 Gross Margin 13.5% 14.8% 20.
Slide 21: 3Q'18 Financial Update
$331.4 $447.0 $485.7 $526.5 $530.0 $121.3 $135.1 $550.0 $0 $100 $200 $300 $400 $500 $600 2015 2016 2017 LTM 3Q '18 2018 3Q '17 3Q '18 Comparable Quarter Growth: 11.3% Maintaining Revenue Guidance Earned Revenue Gross Profit and Gross Margins Limbach has capitalized on the strength of the non - resid
Slide 22: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation * Use of Non - GAAP Financial Measures In assessing the performance of our business, management utilizes a variety of financial and performance measures . The key measure is Adjusted EBITDA . Adjusted EBITDA is a non - GAAP financial measure . We define Adjusted EBITDA
Slide 23: Balance Sheet
Balance Sheet 23 For the Period Ended ($ in millions) 12/31/16 12/31/17 09/30/18 Cash and cash equivalents $7.4 $0.6 $0.5 Restricted cash 0.1 0.1 0.1 Accounts receivable, net 114.0 129.3 140.3 Costs and estimated earnings in excess of billings 32.0 33.0 32.4 Other current assets 1.7 3.2 36.8 Total c
Slide 24: Equity Capitalization
Limbach’s equity capital structure includes approximately 7 . 59 million common shares and several tranches of warrant securities, each with slightly different terms and economics . Addressing the warrant structure through an exchange offer or other capital markets transaction will provide greater t
Slide 25: Leadership Team
Leadership Team In 2019 Michael McCann was promoted to Co - Chief Operating Officer to support the continued growth of the business Charlie Bacon , Chief Executive Officer John Jordan , EVP, Chief Financial Officer Kris Thorne , Co - Chief Operating Officer Mike McCann , Co - Chief Operating Officer
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