Limbach Holdings, Inc. · NASDAQ:LMB
Limbach — Q3 2024 Earnings Presentation
29 slides from Limbach's earnings presentation, Nov 6, 2024
Slide 1: Investor Presentation 2024 Q3 Earnings
NASDAQ: LMB 2024 Q3 Earnings | November 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 Our people make a critical difference by fostering mechanical, electrical, and plumbing systems. Mission-Critical MEP Infrastructure sustaina
Slide 5: Transforming Into a Building Systems Solutions Firm
Transforming Into a Building Systems Solutions Firm Transforming into a building systems solutions firm, where we extend our expertise beyond MEP systems to deliver turnkey solutions that expand our current offerings, with a tailored focus on revitalizing mission-critical infrastructure in existing
Slide 6: 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 7: Limbach Combines Best-in-Class Attributes of Key Verticals
Limbach Combines Best-in-Class Attributes of Key Verticals While the markets we serve has competition at various levels, 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.
Slide 8: Two Operating Segments - ODR and GCR
Two Operating Segments - ODR and GCR Owner Direct Relationships (“ODR”) General Contractor Relationships (“GCR”) Existing Buildings New Construction ODR work is driven by developing and proposing customized solutions GCR projects are characterized as having a solution in place therefore that are dev
Slide 9: 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 10: 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 more than 3x from 3.0% to 9.1% ODR Rev. % 70.0% Gross Margin / Adjusted EBITDA Margin 60.0% ODR Revenue Percentage
Slide 11: 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 12: 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 $490.4M $496.8M $516.4M $262.0M $216.4M $127.2M $140.3M $115.1M 2019 2020 2021 2022 2023 Total Revenue is down 6.7% ODR Revenue CAGR of 19.3% for Total revenue growth projected fro
Slide 13: Pillar #2 - Expanded Margins through Evolved LMB Offerings
Pillar #2 - Expanded Margins through Evolved LMB Offerings LMB 2023 Offerings: Evolved LMB Offerings: Competitive Lump Sum Bidding On-Demand Facility Services 2024 Current Focus GCR Design-Assist Critical System Repairs 2025 Projected Focus Design-Build Data Driven Solutions Performance Contracting
Slide 14: Pillar #2 - Expanded Margins through Evolved LMB Offerings
Pillar #2 - Expanded Margins through Evolved LMB Offerings Evolved LMB Offerings: Customer Value: On-Demand Services (Rental Equip.) Mission-critical building systems solutions support providing best-in-class options for long- and short-term impacts Critical System Repairs Dedicated resources: onsit
Slide 15: 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 16: 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 Annual Revenue: $10-15M w/80%+ ODR Revenue ❑ +15% YoY ODR Growth ❑ Focus on Gr
Slide 17: Acquisition Value Creation Philosophy
Acquisition Value Creation Philosophy Our acquisition strategy prioritizes alignment and specialized value, ensuring that each partnership enhances our culture and niche, with a prioritized focus on building owner relationships while following a proven value creation process to drive growth and long
Slide 18: Pillar #3 - Recent Tuck-In Transaction – Closed September 3, 2024
Pillar #3 - Recent Tuck-In Transaction – Closed September 3, 2024 M&A CRITERIA: We believe the combination of Kent Island Mechanical and our Mid-Atlantic operating Geographic Proximity: unit will create a dominant mechanical systems solutions provider in the high growth, - Attractive Operating Footp
Slide 19: 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 20: Strong Balance Sheet and Disciplined Capital Allocation Strategy
Strong Balance Sheet and Disciplined Capital Allocation Strategy Key Balance Sheet Items September December 31, 30, 20241 20231 Balance Sheet to fund organic growth and acquisitions: Cash and Cash Equivalents $51.2 $59.8 Used $12.7M to fund the Kent Island Mechanical Current Assets $217.1 $217.0 Acq
Slide 21: Financial Goals 2024 Guidance
Financial Goals 2024 Guidance1 Revenue Gross Margin / Adj. EBITDA Cash $520M to $540M Total Revenue Total Gross Margin 26% to 27% Continued Strong Cash Flow Mix Shift 65% to 70% ODR Adjusted EBITDA $60M to $63M 70% of Adj. EBITDA = Free Cash ODR Revenue Growth 29% to 44% Adj. EBITDA Margin 11% to 12
Slide 22: 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 23: Appendix
APPENDIX 23
Slide 24: Operating and Financial Update - QTD 3Q'24 Performance
Operating and Financial Update QTD 3Q’24 Performance Revenue1 Gross Profit and (Margin)1 Adjusted EBITDA2 $36.1 $133.9 (27.0%) $127.8 $31.2 (24.5%) $93.0 $29.6 $65.8 $17.3 $19.3 $13.6 $61.9 $12.0 $40.9 $6.5 3Q’23 3Q’24 3Q’23 3Q’24 3Q’23 3Q’24 Year-Over-Year Year-Over-Year Year-Over-Year Change Chang
Slide 25: Operating and Financial Update - YTD 3Q'24 Performance
Operating and Financial Update YTD 3Q’24 Performance Revenue1 Gross Profit and (Margin)1 Adjusted EBITDA2 $373.7 $375.1 $100.7 (26.8%) $86.0 (23.0%) $183.3 $250.0 $42.9 $77.2 $52.4 $34.2 $190.3 $33.6 $125.1 $23.5 3Q’23 3Q’24 3Q’23 3Q’24 3Q’23 3Q’24 Year-Over-Year Year-Over-Year Year-Over-Year Change
Slide 26: Sustainability at Limbach
Sustainability at Limbach People: Empowering Our Team & Supporting Our Communities ● We champion employee health and safety through our Hearts & Minds Revit 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 27: Non-GAAP Reconciliation Table - Adjusted EBITDA Margin
Non-GAAP Reconciliation Table Reconciliation of Adjusted EBITDA Margin* Three Months Ended September Nine Months Ended Fiscal Year ended December 31, 30, September 30, (in thousands) 2019 2020 2021 2022 2023 2024 2023 2024 2023 Revenue: $ 553,334 $ 568,209 $ 490,351 $ 496,782 $ 516,350 $ 133,920 $ 1
Slide 28: Non-GAAP Reconciliation Table - Free Cash Flow
Non-GAAP Reconciliation Table Reconciliation of Free Cash Flow* Three Months Ended Nine Months Ended Fiscal Year ended December 31, September 30, September 30, (in thousands) 2019 2020 2021 2022 2023 2024 2023 2024 2023 Adjusted EBITDA: $ 16,752 $ 25,111 $ 23,276 $ 31,765 $ 46,801 $ 17,332 $ 13,631
Slide 29: Contact Us
Contact Us INVESTOR RELATIONS Julie Kegley Financial Profiles jkegley@finprofiles.com 310.622.8246 @Limbach @Limbach @Limbachinc @Limbach @LimbachFacilityServices