Limbach Holdings, Inc. · NASDAQ:LMB
Limbach — Q2 2023 Earnings Presentation
26 slides from Limbach's earnings presentation, Aug 9, 2023
Slide 1: Investor Presentation August 2023
NASDAQ: LMB INVESTOR PRESENTATION August 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: 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 4: 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 5: 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 6: Investment Highlights
Investment Highlights Strong Sector Building owners are increasingly focused on ROIC, including maintenance and Tailwinds retrofit of existing facilities, driving demand for facilities service capabilities. We provide full life-cycle capabilities that combine our disciplined approach with Evolving,
Slide 7: Creating Value in Strong Primary Mission-Critical End Markets
Creating Value in Strong Primary Mission-Critical End Markets 01 02 03 04 05 06 LMB Core Markets Healthcare Data Centers Industrial Higher Edu. Cultural & Entm’t. Life Sciences Industry Trends 1, 2, 3 • Smart Building • Reduction in • Consistent Desire of Markets to grow due to: • Integration of AI
Slide 8: 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 9: Our Differentiated Business Model
Our Differentiated Business Model General Contractor Relationships (“GCR”) Owner Direct Relationships (“ODR”) Manage new construction or renovation projects that involve Maintenance or service primarily on HVAC, plumbing, electrical primarily HVAC, plumbing, or electrical services awarded to systems
Slide 10: 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 11: 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 8.3% over the trailing twelve months. 25.0% 70.0% 20.0% Gross Margin / Adjusted E
Slide 12: 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 13: Scale Through Acquisitions
Scale Through Acquisitions CURRENT & TARGET GEOGRAPHIES 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 = 50/50 Revenue Mix ❑ Ex: Limba
Slide 14: 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 15: 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 16: Investment Summary
Investment Summary We serve a variety of mission-critical end markets, many of which are expected Strong Sector to continue experiencing solid, growing demand for construction, service and Tailwinds maintenance of physical assets over the next several years Evolving, Differentiated Continued focus o
Slide 17: FY 2023 Financial Guidance
FY 2023 Financial Guidance1 FY 2023 Guidance3 Metric: Low High Revenue $490 million – $520 million Adjusted EBITDA2 $38 million – $41 million Upcoming IR Conference Calendar Event Dates Location Midwest IDEAS Conference Aug 24 Chicago, IL Lake Street Big 7 Conference Sep 14 New York, NY MicroCap Lea
Slide 18: Connect With Us on Social Media
Connect With Us on Social Media @Limbach @Limbach @Limbachinc @Limbach @LimbachFacilityServices 18
Slide 19: Appendix
APPENDIX 19
Slide 20: Operating and Financial Update: 2Q'23 Quarterly Performance
Operating and Financial Update 2Q’23 Quarterly Performance Revenue1 Gross Profit and (Margin)1 Adjusted EBITDA2 GCR ODR GCR ODR $11.9 $28.5 $124.9 $116.1 (22.8%) $21.3 $58.8 (18.4%) $49.8 $17.2 $6.6 $12.6 $66.3 $66.1 $11.3 $8.7 2Q'22 2Q'23 2Q'22 2Q'23 2Q'22 2Q'23 Year-Over-Year Year-Over-Year Year-O
Slide 21: Operating and Financial Update: YTD 2Q'23 Performance
Operating and Financial Update YTD 2Q’23 Quarterly Performance Revenue1 Gross Profit and (Margin)1 Adjusted EBITDA2 $230.9 $245.9 $39.7 $54.7 $92.7 (17.2%) (22.3%) $117.5 $20.6 $138.3 $22.6 $33.2 $128.4 $10. 0 $21.6 $17.1 2Q'22 2Q'23 2Q'22 2Q'23 2Q'22 2Q'23 Year-Over-Year Year-Over-Year Year-Over-Ye
Slide 22: Operating and Financial Update: Key Balance Sheet Items
Operating and Financial Update Key Balance Sheet Items June 30, 20231 December 31, 20221 Cash and Cash Equivalents $45.9 $36.0 During the second quarter, we entered into an Current Assets $199.2 $226.0 amended credit facility which replaced the prior one. Key aspects of the new facility included: Cu
Slide 23: Non-GAAP Reconciliation Table
Non-GAAP Reconciliation Table For the Three and Six Months and TTM periods ended June 30, 2023 Reconciliation of Net Income to Adjusted EBITDA Three Months Ended June 30, Six Months Ended June 30, TTM June 30, (in thousands) 2023 2022 2023 2022 2023 Net income $5,320 $ 866 $ 8,313 $ (650) $ 15,762 A
Slide 24: Non-GAAP Reconciliation Table
Non-GAAP Reconciliation Table Reconciliation of Adjusted EBITDA Margin* Fiscal Year ended December 31, TTM June 30, (in thousands) 2018** 2019 2020 2021 2022 2023 Revenue: $ 546,526 $ 553,334 $ 568,209 $ 490,351 $ 496,782 $511,731 Net income (loss) ($1,845) ($1,775) $5,807 $ 6,714 $6,799 $ 15,762 Ad
Slide 25: 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 26: Contact Us
Contact Us INVESTOR RELATIONS Jeremy Hellman, CFA Vice President (212) 836-9626 / jhellman@equityny.com