Limbach Holdings, Inc. · NASDAQ:LMB
Limbach — Q4 2023 Earnings Presentation
28 slides from Limbach's earnings presentation, Mar 14, 2024
Slide 1: Positioned For Sustained Growth and Returns
NASDAQ: LMB Positioned For Sustained Growth and Returns March 2024
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 At-A-Glance
Limbach At-A-Glance OUR SIX MISSION-CRITICAL WHO THREE STRATEGIC WE ARE UNIQUES MARKETS GROWTH DRIVERS Industrial & Manufacturing Mix Shift Between Unique and Life Sciences Two Business Units A Building Systems Solutions specialized suite of Firm with Expertise in service offerings Mechanical, Elect
Slide 4: 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 5: Our Two Segments – ODR & GCR
Our Two Segments – ODR & GCR Owner Direct Relationships (“ODR”) General Contractor Relationships (“GCR”) Higher margins from working Projects characterized as directly for building owners; ability to develop and ‘having a solution in place’ propose customized solutions Driving Higher Margins and Ear
Slide 6: Revenue and Gross Profit Contribution - ODR and GCR
Revenue and Gross Profit Contribution - ODR and GCR FY 2023 ODR vs. GCR Revenue FY 2023 ODR vs. GCR Gross Profit GCR GP: ODR GP: GCR Revenue: ODR Revenue: 49% 51% 36% 64% Consolidated Revenue $516.4M Total Gross Profit $119.3M 6
Slide 7: Higher Margin ODR Segment Revenue Growth vs. Total Revenue
Higher Margin ODR Segment Revenue Growth vs. Total Revenue 2019-2023: Total Revenue 2019-2023: Total ODR Revenue $568,209 $553,334 $516,350 $261,958 $490,351 $496,782 $ $ $216,403 $140,336 $ $127,230 $ $115,138 Consolidated Revenue is down 6.7% from 2019 ODR Revenue is up 127.5% from 2019 7
Slide 8: Shift to ODR Business Drives Higher Margins
Shift to ODR Business Drives Higher Margins 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 Perc
Slide 9: Large Market Opportunity with Tailwinds for Sustained Growth
Large Market Opportunity with Tailwinds for Sustained Growth 01 02 03 04 05 06 LMB Core Markets Industrial & Cultural & Healthcare Manufacturing Data Centers Life Sciences Higher Edu. Entertainment Industry Trends 1, 2, 3 • Smart Building • Reshoring • Reduction in Electricity • Extreme Growth Due t
Slide 10: 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. GC = General Contr
Slide 11: Compelling Customer Value Proposition
Compelling Customer Value Proposition Unique Service Offerings: Customer Value: On-Demand Services (Rental Equip.) Mission-critical building systems solutions support providing best option for long- and short-term impacts Critical System Repairs Dedicated resources: onsite every day to become an Dat
Slide 12: Customer Case Study: Not-For-Profit Healthcare Customer
Customer Case Study Not-For-Profit 2023 2012 - 2019 2022 2023-2024 Healthcare Customer Partner For: Added Resources & Service: Partnership Evolution: 16 Facilities Located Throughout West Florida ● Capital Projects / New Builds ● Special Project Support ● Dedicated Account Manager ● Equipment Upgrad
Slide 13: Management Team with Track Record of Execution
Management Team with Track Record of Execution Since 2019, management has taken decisive steps to de-risk the business and position Limbach for sustained growth and returns. Executing strategy to drive organic growth, reoccurring revenue, Grown ODR revenue mix from 21% margin expansion and profitabi
Slide 14: Organic Growth
Organic Growth Growing existing customer relationships to generate margin expansion by providing evolved service offerings 01 Dedicate 80% of time to top five customers in each market 02 Focus on expanding customer relationships by providing innovative solutions 03 Evolving service offerings Investe
Slide 15: Strategic Acquisitions
Strategic Acquisitions Disciplined and focused M&A strategy comprises “Tuck-In” and “Expansion” acquisitions of companies with consistent and scalable business models M&A CRITERIA: Tuck-ins in existing regions provide new customers Geographic Expansion or expand services to current customer Supports
Slide 16: Proven Track Record of M&A Transactions that Meet our Criteria
Proven Track Record of M&A Transactions that Meet our Criteria Completed three acquisitions since December 2021, bringing scale and strategic new markets to the portfolio Chattanooga, Tennessee (December 2021) Chattanooga, Tennessee (July 2023) Greensboro, North Carolina (November 2023) Location exp
Slide 17: Current & Target Geographies
Current & Target Geographies CURRENT & TARGET GEOGRAPHIES Tuck-In Acquisitions ❑ Total Revenue: $10-15M w/80%+ ODR Revenue ❑ +15% YoY ODR Growth ❑ Focus on Gross Profit Quality & Account Resources ❑ Ex: New Geography Acquisitions ❑ Total Revenue: $25M-40M w/ODR & GCR Mix ❑ Year 3 = at least 50/50 Re
Slide 18: Strong Balance Sheet and Disciplined Capital Allocation Strategy
Strong Balance Sheet and Disciplined Capital Allocation Strategy Key Balance Sheet Items December 31, December 31, 20231 20221 Cash and Cash Equivalents $59.8 $36.0 Balance Sheet to fund organic growth and acquisitions – net cash position coupled with undrawn revolver Current Assets $217.0 $226.0 Cu
Slide 19: 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 20: Appendix
APPENDIX 20
Slide 21: Operating and Financial Update: 4Q'23 Performance
Operating and Financial Update 4Q’23 Performance Revenue1 Gross Profit and (Margin)1 Adjusted EBITDA2 $33.3 $143.5 $142.7 (23.3%) $29.2 $78.6 (20.4%) $12.6 $64.0 $23.7 $11.6 $17.3 $79.5 $64.1 $9.6 $11.9 4Q’22 4Q’23 4Q’22 4Q’23 4Q’22 4Q’23 Year-Over-Year Year-Over-Year Year-Over-Year Change Change Ch
Slide 22: Operating and Financial Update: YTD 2023 Performance
Operating and Financial Update YTD 2023 Performance Revenue1 Gross Profit and (Margin)1 Adjusted EBITDA2 $119.3 $496.8 $516.4 (23.1%) $93.7 $262.0 (18.9%) $216.4 $76.1 $46.8 $37.8 $52.4 $55.1 $31.8 $280.4 $254.4 $43.2 $38.6 FY’22 FY’23 FY’22 FY’23 FY’22 FY’23 Year-Over-Year Year-Over-Year Year-Over-
Slide 23: Experienced Management Team
Experienced Management Team Mike McCann, President & CEO Jay Sharp, Limbach President Mike McCann is a seasoned executive with over fourteen years of experience in the Jay Sharp, who joined Limbach in 1990, serves as President in several Limbach Holdings construction industry. As the President and C
Slide 24: Board of Directors with Extensive Construction Industry and Finance Experience
Board of Directors with Extensive Construction Industry and Finance Experience ● Mike McCann See Mr. McCann’s full bio on page 22 ● Joshua Horowitz Mr. Horowitz is an experienced investor with over 17 years in the field. Since January 2012, he has been a portfolio manager and Managing Director at va
Slide 25: Sustainability at Limbach
Sustainability at Limbach People: Empowering Our Team & Supporting Our Communities ● We champion employee health and safety through our Hearts & Minds program ed Building ● We offer competitive compensation and a range of benefits and Accredit Industry ing Optimization programs Train ● Our dedicatio
Slide 26: Non-GAAP Reconciliation Table
Non-GAAP Reconciliation Table Reconciliation of Adjusted EBITDA Margin* Fiscal Year ended December 31, Three Months Ended Dec. 31, (in thousands) 2019 2020 2021 2022 2023 2022 2023 Revenue: $ 553,334 $ 568,209 $ 490,351 $ 496,782 $ 516,350 $ 143,483 $ 142,691 Net income (loss) ($ 1,775) $ 5,807 $ 6,
Slide 27: Non-GAAP Reconciliation Table
Non-GAAP Reconciliation Table Reconciliation of Free Cash Flow* Fiscal Year ended December 31, (in thousands) 2019 2020 2021 2022 2023 Adjusted EBITDA: $ 16,752 $ 25,111 $ 23,276 $ 31,765 $ 46,801 Free Cash Flow: Net Income ($ 1,775) $ 5,807 $ 6,714 $ 6,799 $ 20,754 (1) Non-cash operating activities
Slide 28: Contact Us
Contact Us INVESTOR RELATIONS Julie Kegley Financial Profiles jkegley@finprofiles.com 310.622.8246 @Limbach @Limbach @Limbachinc @Limbach @LimbachFacilityServices 28