Limbach(LMB) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Performance Overview This section provides an overview of Limbach Holdings, Inc.'s financial performance in the second quarter of 2025, highlighting key achievements and management's strategic commentary Q2 2025 Highlights Limbach Holdings, Inc. achieved strong financial performance in Q2 2025, with significant growth in net income and Adjusted EBITDA, primarily driven by its strategic shift to the high-margin ODR business | Metric | Q2 2025 | Q2 2024 | YoY Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Net Income | $7.8 Million | $6.0 Million | +$1.8 Million | +30.0% | | Adjusted EBITDA | $17.9 Million | $13.8 Million | +$4.1 Million | +30.0% | | Total Revenue | $142.2 Million | $122.2 Million | +$20.0 Million | +16.4% | | ODR Revenue | $108.9 Million | $82.7 Million | +$26.2 Million | +31.7% | | GCR Revenue | $33.3 Million | $39.5 Million | -$6.2 Million | -15.7% | | Total Gross Profit | $39.8 Million | $33.5 Million | +$6.3 Million | +18.9% | | Net Cash from Operating Activities | $2.0 Million | $16.5 Million | -$14.5 Million | -87.9% | - ODR revenue accounted for 76.6% of total revenue[6] Management Comments CEO Michael McCann emphasized that the strategic shift to high-margin ODR business is yielding significant results, with strong growth in ODR revenue and gross profit, while the company invests in sales and pursues M&A for sustained growth - Strategic shift to high-margin ODR business is a key driver of performance growth[4] - ODR revenue grew by 31.7%, accounting for 76.6% of total revenue, significantly higher than approximately 21% in Q2 2019[4] - ODR gross profit increased by 24.6%, representing 79.3% of total gross profit[4] - The company has strategically invested in its sales organization to enhance market entry, prioritize national client service, and accelerate collaboration with clients on capital projects[5] - A robust M&A pipeline and disciplined operational execution provide a foundation for Limbach's continued growth and commitment to long-term shareholder value creation[5] Detailed Financial Results (Three Months Ended June 30, 2025 vs 2024) This section presents a detailed breakdown of the company's financial performance for the three months ended June 30, 2025, compared to the prior year, covering consolidated operations, segment results, balance sheet, and cash flows Consolidated Statements of Operations The company achieved comprehensive growth in revenue, gross profit, operating income, and net income in Q2 2025, reflecting strong core business performance and enhanced profitability | Metric (in thousands of USD) | Q2 2025 | Q2 2024 | YoY Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | $142,241 | $122,235 | $20,006 | 16.4% | | Cost of Sales | $102,415 | $88,727 | $13,688 | 15.4% | | Gross Profit | $39,826 | $33,508 | $6,318 | 18.9% | | Operating Income | $10,642 | $8,190 | $2,452 | 29.9% | | Net Income | $7,762 | $5,963 | $1,799 | 30.2% | | Diluted Earnings Per Share | $0.64 | $0.50 | $0.14 | 28.0% | Segment Operating Results ODR business continued strong growth in Q2 2025 with significant increases in revenue and gross profit, despite a slight margin decrease, while GCR revenue declined but improved its gross margin, reflecting portfolio optimization efforts | Metric (in thousands of USD) | Q2 2025 | Q2 2024 | YoY Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | ODR Revenue | $108,948 | $82,754 | $26,194 | 31.7% | | GCR Revenue | $33,293 | $39,481 | $(6,188) | (15.7)% | | ODR Gross Profit | $31,589 | $25,362 | $6,227 | 24.6% | | GCR Gross Profit | $8,237 | $8,146 | $91 | 1.1% | | ODR Gross Margin | 29.0% | 30.6% | -1.6 pp | - | | GCR Gross Margin | 24.7% | 20.6% | +4.1 pp | - | | Total Gross Margin | 28.0% | 27.4% | +0.6 pp | - | - ODR gross margin slightly decreased (29.0% vs 30.6%), primarily due to non-recurrence of one-time gains from certain ODR projects in Q2 2024 and impacts from integrating acquired companies[9] - Selling, General & Administrative (SG&A) expenses increased by approximately $3.5 million to $26.6 million, mainly due to professional service fees and compensation-related expenses associated with the PPI acquisition; as a percentage of revenue, SG&A decreased from 19.0% to 18.7%[9] Balance Sheet As of June 30, 2025, the company maintained a robust financial position with ample cash and a healthy current ratio, expanding its revolving credit facility and completing the PPI acquisition post-quarter to support future growth | Metric (in thousands of USD) | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | $38,940 | $44,930 | $(5,990) | | Total Current Assets | $208,970 | $220,334 | $(11,364) | | Total Current Liabilities | $123,453 | $151,037 | $(27,584) | | Current Ratio | 1.69x | 1.46x | +0.23x | | Long-Term Debt | $28,397 | $23,554 | +$4,843 | - The company amended its credit agreement on June 27, 2025, expanding its revolving credit facility from $50 million to $100 million[7] - The company completed the acquisition of PPI on July 1, 2025, for $66.1 million, financed through existing cash and the revolving credit facility; this acquisition was not included in the June 30, 2025 balance sheet[8] Cash Flows Net cash from operating activities significantly decreased year-over-year in Q2 2025, primarily due to working capital changes influenced by billing timing, while cash outflow from investing activities reduced, reflecting optimized capital expenditures | Metric (in thousands of USD) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | $4,242 | $12,560 | $(8,318) | | Net Cash from Investing Activities | $(2,152) | $(5,231) | +$3,079 | | Net Cash from Financing Activities | $(8,080) | $(7,628) | $(452) | - Net cash from operating activities in Q2 2025 was $2.0 million, lower than $16.5 million in Q2 2024, primarily reflecting billing timing impacting working capital changes[9] Full Year 2025 Guidance Limbach Holdings, Inc. raised its full-year 2025 guidance for revenue and Adjusted EBITDA, reflecting the company's confidence in future performance and sustained growth momentum | Metric | Current Guidance (FY 2025) | Previous Guidance (FY 2025) | | :--- | :--- | :--- | | Revenue | $650 Million - $680 Million | $610 Million - $630 Million | | Adjusted EBITDA | $80 Million - $86 Million | $78 Million - $82 Million | Non-GAAP Financial Measures This section defines the non-GAAP financial measures used by the company and provides reconciliations to their most directly comparable GAAP measures, offering additional insights into operational performance Definitions The company uses non-GAAP financial measures like Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted EPS to assess business performance by excluding certain non-cash or non-recurring items, while backlog represents estimated revenue from uncompleted contracts - Adjusted EBITDA: Net income plus depreciation and amortization expense, interest expense, and taxes, further adjusted to eliminate the impact of other non-cash or unusual/non-recurring items; management uses it as a key performance and compensation measure[30] - Adjusted Net Income: Net income adjusted to exclude items that do not reflect core operating performance, such as amortization of intangible assets, stock-based compensation, restructuring charges, fair value changes in contingent consideration, acquisition and other transaction costs, and the net tax impact of adjusting items[31] - Backlog: Represents estimated revenue from uncompleted contracts, including revenue from contracts where work has not yet begun, less revenue recognized to date[33] Reconciliation of Net Income to Adjusted EBITDA By making several adjustments to GAAP net income, the company calculated Adjusted EBITDA, which showed significant growth in Q2 2025 and the first six months, with an improved Adjusted EBITDA margin | Metric (in thousands of USD) | Q2 2025 | Q2 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $7,762 | $5,963 | $17,976 | $13,549 | | Total Adjustments | $10,186 | $7,846 | $14,844 | $12,017 | | Adjusted EBITDA | $17,948 | $13,809 | $32,820 | $25,566 | | Adjusted EBITDA Margin | 12.6% | 11.3% | 11.9% | 10.6% | Reconciliation to Adjusted Net Income and Adjusted Diluted EPS The company calculated Adjusted Net Income and Adjusted Diluted EPS by applying pre-tax and tax impact adjustments to net income, showing growth for both Q2 2025 and the first six months | Metric (in thousands of USD, except per share amounts) | Q2 2025 | Q2 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $7,762 | $5,963 | $17,976 | $13,549 | | Diluted Earnings Per Share | $0.64 | $0.50 | $1.48 | $1.13 | | Total Pre-Tax Adjustments | $4,789 | $3,787 | $9,295 | $6,618 | | Tax Impact of Adjustments | $(1,293) | $(1,023) | $(2,512) | $(1,814) | | Adjusted Net Income | $11,258 | $8,728 | $24,769 | $18,453 | | Adjusted Diluted EPS | $0.93 | $0.73 | $2.05 | $1.54 | Company Information This section provides background information about Limbach Holdings, Inc., including its business focus, market presence, and important disclosures regarding investor communications and forward-looking statements About Limbach Limbach is a building systems solutions company, focusing on providing mechanical, electrical, and plumbing services for critical infrastructure across six vertical markets, with approximately 1,600 team members and 21 offices in the Eastern U.S - Limbach is a building systems solutions company partnering with building owners and facility managers who have critical mechanical (heating, ventilation, and air conditioning), electrical, and plumbing infrastructure[12] - Primarily serves six vertical markets: healthcare, industrial and manufacturing, data centers, life sciences, higher education, and cultural and entertainment[12] - The company has approximately 1,600 team members and 21 offices across the Eastern United States[12] Additional Information & Disclosures This section outlines channels for important financial information, details of an upcoming conference call, and a standard disclaimer regarding forward-looking statements - The company disseminates important financial information to investors and the public through its investor relations website, SEC filings, press releases, public conference calls/webcasts, and social media[13] - A conference call will be held on Wednesday, August 6, 2025, at 9:00 AM ET, with domestic and international dial-in numbers and a webcast link provided[11] - The press release contains forward-looking statements based on current information, involving risks and uncertainties, where actual results may differ materially from expectations; investors are advised to review the company's latest filings on Form 10-K, 10-Q, and 8-K for a complete discussion of risks[14]