Limbach(US:LMB)2025-11-04 22:25Revenue Growth - Total revenue for the three months ended September 30, 2025, increased by $50.7 million, or 37.8%, to $184.6 million compared to $133.9 million for the same period in 2024[181]. - ODR revenue for the three months ended September 30, 2025, increased by $48.4 million, or 52.0%, to $141.4 million compared to $93.0 million for the same period in 2024, driven by recent acquisitions[182]. - GCR revenue for the three months ended September 30, 2025, increased by $2.3 million, or 5.6%, to $43.2 million compared to $40.9 million for the same period in 2024, supported by Pioneer Power and Kent Island operations[184]. - Total revenue for the nine months ended September 30, 2025 increased by $84.8 million, or 22.6%, to $459.9 million compared to $375.1 million in 2024[196]. - ODR revenue for the nine months ended September 30, 2025 increased by $90.7 million, or 36.3%, to $340.7 million, driven by recent acquisitions[197]. - GCR revenue for the nine months ended September 30, 2025 decreased by $5.9 million, or 4.7%, to $119.2 million, primarily due to a strategic shift towards ODR[198]. Profitability - Total gross profit for the three months ended September 30, 2025, was $44.7 million, representing a gross profit margin of 24.2%, compared to $36.1 million and 27.0% in 2024[180]. - Gross profit for the three months ended September 30, 2025 increased by $8.6 million, or 23.7%, to $44.7 million compared to the same period in 2024[185]. - ODR gross profit rose by $6.0 million, or 20.3%, while GCR gross profit increased by $2.5 million, or 39.3%[185]. - Net income for the three months ended September 30, 2025, was $8.8 million, or 4.8% of total revenue, compared to $7.5 million, or 5.6% in 2024[180]. - Net income for the nine months ended September 30, 2025 was $26.8 million, representing a 27.5% increase from $21.0 million in 2024[195]. Expenses - Selling, general and administrative expenses for the three months ended September 30, 2025, were $28.3 million, or 15.3% of total revenue, compared to $23.7 million, or 17.7% in 2024[180]. - SG&A expenses for the three months ended September 30, 2025 increased by $4.6 million, or 19.3%, but as a percentage of revenue decreased to 15.3% from 17.7%[187]. - Selling, General and Administrative (SG&A) expenses increased by approximately $11.7 million, or 16.7%, to $81.5 million for the nine months ended September 30, 2025, compared to $69.8 million in the prior year[201]. - Amortization of intangibles for the three months ended September 30, 2025 increased by $1.5 million, or 176.5%, to $2.4 million due to recent acquisitions[191]. - Interest expense for the three months ended September 30, 2025 increased by $0.8 million, or 161.3%, to $1.2 million, reflecting higher borrowings[192]. - Interest expense increased by 68.1% to $2.3 million for the nine months ended September 30, 2025, compared to $1.4 million in the prior year[205]. Acquisitions - The acquisition of Pioneer Power was completed for a purchase price of $66.1 million, expanding the company's footprint in the Midwest[174]. - The acquisition of Consolidated Mechanical was completed for $23.0 million, with an additional earnout of up to $2.0 million potentially payable over 2026 and 2027[175]. - The acquisition of Kent Island was completed for $15.0 million, with an earnout of up to $5.0 million potentially payable over 2025 and 2026[176]. - The Company aims to expand its geographic footprint and enhance its offerings through strategic acquisitions, including the acquisition of Pioneer Power, which serves critical facilities in the Upper Midwest[219]. - Acquisition-related retention and contingent consideration expenses were $1.8 million for the nine months ended September 30, 2025, down from $2.3 million in the prior year[202]. Backlog and Future Revenue - The Company’s ODR backlog as of September 30, 2025, was $241.6 million, reflecting an increase from $225.3 million as of December 31, 2024, with an estimated 44% expected to be recognized as revenue over the remainder of 2025[209]. - The GCR backlog decreased to $121.2 million as of September 30, 2025, from $140.0 million at December 31, 2024, with an estimated 31% expected to be recognized as revenue over the remainder of 2025[210]. - The Company aims to achieve a revenue mix of 70%-80% from the ODR segment by 2025, with ODR revenue accounting for 74.1% of total consolidated revenue for the nine months ended September 30, 2025[215]. Cash Flow and Liquidity - The Company generated $17.6 million in cash from operating activities for the nine months ended September 30, 2025, compared to $17.5 million for the same period in 2024, reflecting a net income increase of $5.7 million[230]. - Cash flows used in investing activities were $67.9 million for the nine months ended September 30, 2025, primarily due to a $65.7 million outflow associated with the Pioneer Power acquisition[233]. - Cash flows provided by financing activities were $15.2 million for the nine months ended September 30, 2025, compared to cash flows used of $8.4 million for the same period in 2024[235]. - The Company borrowed $41.8 million on its revolving credit facility during the nine months ended September 30, 2025, with additional inflows of $6.3 million from share sales for employee tax withholding[235]. - The Company believes its current cash and cash equivalents, along with available borrowing capacity, will be sufficient to meet working capital and capital expenditure requirements for at least the next 12 months[240]. Financial Position - The Company reported a net working capital of $65.6 million as of September 30, 2025, down from $69.3 million at the end of 2024[229]. - The current ratio as of September 30, 2025, was 1.43, slightly down from 1.46 at the end of 2024, indicating a stable liquidity position[229]. - Long-term debt increased to $61.9 million as of September 30, 2025, from $27.2 million as of December 31, 2024[241]. - The Company had approximately $111.0 million in surety bonds outstanding as of September 30, 2025, compared to $109.3 million as of December 31, 2024[242]. - Total available funding capacity as of September 30, 2025, was $70.3 million, including $9.8 million in cash and cash equivalents[237]. Market Conditions - The Company continues to monitor the impact of inflation and tariffs, particularly the 50% tariffs on certain steel and aluminum products implemented in 2025, which could affect costs and supply availability[224]. - The Company is focused on enhancing operational efficiency and margin expansion by evolving its offerings to meet current market demands[217]. - The Company continues to focus on smaller, higher-margin projects in its GCR segment to improve profitability and reduce risks associated with larger, complex projects[216]. - A hypothetical 100 basis point increase in interest rates would result in an approximate $0.9 million increase in annualized interest expense on variable-rate debt[253]. - The Company expects growth in its ODR business to positively impact cash flow trends, which are less sensitive to cash flow issues from large GCR projects[239].