Limbach (LMB) Q2 2025 Earnings Call August 06, 2025 09:00 AM ET Speaker0Good morning, and welcome to the Second Quarter twenty twenty five Limbach Holdings, Inc. Earnings Conference Call and Webcast. All participants will be in the listen only mode. I will now turn the conference over to your host, Lisa Fortuna of Financial Profiles. You may begin.Speaker1Good morning, and thank you for joining us today to discuss Limbach Holdings financial results for the 2025. Yesterday, Limbach issued its earnings releas ...

Core Viewpoint - CEA Industries is set to discuss its strategic priorities and the implications of its recent acquisition of Fat Panda during a conference call scheduled for June 11, 2025 [1]. Group 1: Company Overview - CEA Industries Inc. is a growth-oriented company focused on building leading businesses in regulated consumer markets, particularly in the high-growth Canadian nicotine vape industry [3]. - The company targets scalable operators with strong regulatory alignment, defensible market share, and high-margin business models [3]. - CEA Industries provides capital, operational expertise, and strategic resources to enhance retail expansion and e-commerce infrastructure [3]. Group 2: Strategic Initiatives - The company has published an updated investor presentation outlining its new strategic priorities, including the acquisition of Fat Panda [1]. - The conference call will detail the go-forward strategy aimed at accelerating growth and enhancing shareholder value [1].

Core Insights - Lifecore Biomedical has appointed Mark DaFonseca as chief commercial officer, bringing nearly 30 years of pharmaceutical industry experience, particularly in contract development and manufacturing organizations (CDMOs) [1][2] - DaFonseca will focus on executing a three-pronged growth strategy aimed at enhancing Lifecore's brand, expanding customer partnerships, and growing the business portfolio through new collaborations [1][3] Company Background - Lifecore Biomedical is a fully integrated CDMO specializing in the development, fill, and finish of sterile injectable pharmaceutical products, including complex formulations [7] - The company has over 40 years of expertise in manufacturing premium, injectable-grade hyaluronic acid and serves global biopharmaceutical and biotechnology companies [7] Leadership Experience - Prior to joining Lifecore, DaFonseca held significant roles at CordenPharma, AmbioPharma, and CoreRx, where he led sales, marketing, and project management efforts [2] - His track record includes consistently exceeding key performance indicators in various sales leadership positions within the CDMO sector [2] Strategic Goals - DaFonseca expressed eagerness to leverage Lifecore's assets to strategically grow the business by expanding current customer relationships and increasing the overall customer base [4] - The company aims to enhance its market presence and address the industry's capacity needs through investments in state-of-the-art facilities and equipment [4] Compensation Details - As part of his appointment, Lifecore will grant DaFonseca a restricted stock unit (RSU) award for 20,000 shares and an option for 30,000 shares of common stock [4][5] - The RSU will vest on the third anniversary of the grant date, while the stock option will have a vesting schedule based on continued employment [6]

Core Insights - Innovative Food Holdings, Inc. reported a revenue of $19.5 million for Q1 2025, reflecting a 26.0% increase compared to Q1 2024, with organic revenue growth at 22.9% [3][2] - The company experienced a decline in gross margin by 157 basis points to 22.9%, although gross margin dollars increased by $0.7 million due to an additional $4.0 million in revenue [2][3] - GAAP net income from continuing operations was a loss of $0.4 million, compared to a gain of $1.4 million in Q1 2024, primarily due to a $1.8 million gain from the sale of the Florida headquarters in the previous year [3][2] - Adjusted EBITDA for Q1 2025 was $346 thousand, down from $486 thousand in Q1 2024, with a noted profit headwind of approximately $425 thousand due to the ramp-up of the retail business [3][2] Financial Performance - Revenue for Q1 2025 was $19,548,566, up from $15,518,153 in Q1 2024 [11] - Cost of goods sold increased to $15,062,759 from $11,713,219, resulting in a gross margin of $4,485,807 compared to $3,804,934 in the prior year [11] - Selling, general and administrative expenses rose to $4,708,977 from $3,978,840, leading to an operating loss of $223,170 [11] - The company reported a net loss of $430,436 for Q1 2025, compared to a net income of $1,425,874 in Q1 2024 [11] Growth Initiatives - The first quarter of 2025 marked the integration of recent acquisitions, including Golden Organics and LoCo Food Distribution, and the launch of a new retail sales channel that generated $3.7 million in revenue [2][3] - The company noted triple-digit growth in its Amazon sales channel and single-digit growth in its airline catering and Chicago Artisan businesses [2] - Management emphasized the importance of returning the legacy drop ship business to growth through significant catalog expansion, as it continues to represent the majority of the company's revenues [2] Operational Developments - The company is in the process of stabilizing its new acquisitions and relocating the LoCo business from Fort Collins to Denver [2] - Management expressed confidence in achieving profitability in the cheese business as the year progresses, highlighting a solid foundation and a committed team [2]

Core Viewpoint - American Shared Hospital Services reported a 17% year-over-year revenue growth for Q1 2025, driven by strategic expansions and operational strengths despite some declines in treatment volumes [4][6]. Financial Performance - Revenue for Q1 2025 was $6.1 million, up from $5.2 million in Q1 2024, primarily due to expanded radiation therapy services [4][6]. - Direct patient services revenue surged by 224% to $3.1 million, attributed to the acquisition of Rhode Island centers and the new facility in Puebla, Mexico [4][6]. - Revenue from the medical equipment leasing segment decreased to $3.0 million from $4.3 million, influenced by lower Gamma Knife volumes and contract expirations [5][6]. Operational Highlights - The company experienced a gross margin of $942,000 in Q1 2025, down from $2.1 million in Q1 2024, mainly due to lower treatment volumes [7]. - A net loss of $625,000 was reported for Q1 2025, compared to a net income of $119,000 in the same period last year [7][16]. - Adjusted EBITDA for Q1 2025 was $0.9 million, a decrease from $1.7 million in Q1 2024 [8][18]. Strategic Initiatives - The company is optimistic about future growth, with plans for further acquisitions and operational efficiencies to enhance profitability [3][6]. - New facilities in Rhode Island and Mexico are expected to contribute to long-term growth, with a focus on expanding direct patient care services [3][4]. Balance Sheet Overview - As of March 31, 2025, cash and cash equivalents totaled $11.5 million, slightly up from $11.3 million at the end of 2024 [9][17]. - Shareholders' equity was reported at $24.6 million, down from $25.2 million at the end of the previous year [9][17].

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $1,005 million, a decrease of 0.5% in constant currency, but at the upper end of guidance [5][6] - Non-GAAP earnings per share were $1.30, flat compared to the previous year, reflecting solid gross margin expansion and benefits from share buybacks [6][30] - Operating cash flow generated in Q2 was $169.5 million, with cash and equivalents at $1,430 million at quarter end [10][34] Business Line Data and Key Metrics Changes - Diagnostics revenue was $453.6 million, growing 1.5% or 5.2% excluding COVID-related sales, driven by molecular diagnostics [14][17] - Breast Health revenue declined 6.9% to $356.2 million, with a 9.2% organic decline, attributed to lower gantry placements [18][39] - Surgical revenue increased 5.1% to $162.5 million, with international surgical business growing 16.2% [21][22] - Skeletal revenue grew 22.9% to $33 million, benefiting from improved production ramp of the DEXA system [23] Market Data and Key Metrics Changes - The company lowered sales expectations for China due to geopolitical turbulence, now forecasting only about $50 million in revenue from China for fiscal 2025 [12][36] - The diagnostics business in Africa faced declines due to funding cuts, impacting overall growth [17][55] Company Strategy and Development Direction - The company aims to accelerate growth in Breast Health and has reorganized its sales team to improve performance [19][20] - Hologic is actively seeking acquisitions and investments, with a focus on tuck-in M&A and returning value to shareholders through stock repurchases [11][33] - The company is confident in its strong market positions in core US and European markets, despite challenges in other regions [12][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver solid financial results despite macroeconomic challenges [5][6] - The company anticipates faster growth beginning in Q4 2025, driven by better commercial execution and new product introductions [12][36] - Management highlighted the importance of employee engagement and its role in navigating dynamic environments [10] Other Important Information - The company expects a gross impact of $20 to $25 million per quarter from recently announced tariffs, primarily affecting manufacturing in Costa Rica and China [26][27] - Non-GAAP gross margin improved to 61.1%, driven by strong diagnostics sales and the addition of EndoMag and Gynasonics [30] Q&A Session Summary Question: Impact of tariffs and supplier pricing - Management indicated that while there are potential higher costs from suppliers, they believe offsets will balance the impact [45][46] Question: Breast Health sales force reorganization - The reorganization aims to improve focus on capital and disposable product sales, with expectations of a more stable business moving forward [47][49] Question: Revenue guidance and Africa diagnostics weakness - The decline in revenue guidance is primarily due to reduced expectations from China and the impact of funding cuts in Africa [54][55] Question: Gantry replacement cycle - The average life of gantries has extended, and the company is in a replacement cycle, expecting steady placements moving forward [75][76] Question: Supply chain management - Management feels confident in their supply chain, with most manufacturing done in the US, and is evaluating options but not planning significant changes [69][71] Question: Molecular diagnostics contracting cycles - The molecular diagnostics business is expected to grow, despite headwinds from HIV testing declines in Africa [81][83]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $1,005 million, a decrease of 0.5% in constant currency, but at the upper end of guidance [7][8] - Non-GAAP earnings per share were $1.30, flat compared to the previous year, reflecting solid gross margin expansion and benefits from share buybacks [8][30] - Non-GAAP gross margin improved to 61.1%, up 40 basis points year-over-year [31][34] Business Line Data and Key Metrics Changes - Diagnostics revenue was $453.6 million, growing 1.5% or 5.2% excluding COVID-related sales, driven by molecular diagnostics [16][18] - Breast Health revenue declined 6.9% to $356.2 million, with a 9.2% decline organically, attributed to lower gantry placements [19][40] - Surgical revenue increased 5.1% to $162.5 million, with international surgical business growing 16.2% [23][24] - Skeletal revenue grew 22.9% to $33 million, exceeding internal expectations due to improved production [25] Market Data and Key Metrics Changes - The diagnostics division's growth was impacted by reduced HIV testing in Africa due to funding cuts, affecting overall performance [18] - Sales expectations for China were lowered due to geopolitical challenges, with anticipated revenue now at approximately $50 million for the fiscal year [14][66] Company Strategy and Development Direction - The company aims to accelerate growth in Breast Health and has reorganized its sales team to improve focus on capital and disposable product sales [20][21] - Strategic acquisitions, such as Endomagnetics and Gynasonics, are expected to enhance market position and drive future growth [13][35] - The company is exploring various mitigation strategies for tariff impacts, primarily from Costa Rica and China [27][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the challenging macroeconomic environment and anticipates improved growth rates in the fourth quarter [14][43] - The company expects to return to healthy growth in Breast Health by Q4 2025, driven by better commercial execution and new product introductions [40][43] Other Important Information - The company generated $169.5 million in operating cash flow in Q2 and ended the quarter with over $1.6 billion in cash and investments [12][35] - The effective tax rate for Q2 was 19%, reflecting adjustments to align with the expected full-year rate [34] Q&A Session Summary Question: Can you discuss the potential higher costs from suppliers and mitigation efforts? - Management indicated that while there are discussions about potential price increases, they believe they can offset these costs through their existing operations in Costa Rica [46][47] Question: What is the current appetite for capital from hospitals? - Management noted that the breast health business has stabilized, and they expect hospitals to allocate budgets for meaningful product improvements [48][75] Question: How is the company addressing the decline in Africa and China? - The company is de-risking its revenue expectations from China and addressing funding cuts affecting testing in Africa [14][66] Question: What is the outlook for the Breast Health business? - Management is optimistic about returning to steady growth in Breast Health, with improvements expected in the fourth quarter [40][54] Question: Can you provide insights on the gantry replacement cycle? - The average life of gantries has extended to 10-12 years, and the company is actively managing an end-of-life strategy for older units [78] Question: How is the company managing supply chain challenges? - Management expressed confidence in their supply chain, particularly for US-manufactured products, while evaluating potential adjustments as needed [73][74]

Financial Data and Key Metrics Changes - Consolidated net sales declined 2.9% to $458 million in the fiscal third quarter [5][9] - Gross profit reached a record $106 million, with a gross profit margin improvement of 90 basis points to 23.1% [8][11] - Operating income increased by 41.9% to $50 million, driven by lower SG&A costs and gross margin improvement [11][13] - Diluted earnings per share increased by 44.7% to $1.49 [12] Business Line Data and Key Metrics Changes - Retail segment net sales decreased by 2.6%, with a 0.7% decline when excluding exited bakery lines [5][6] - Foodservice segment net sales declined by 3.2%, impacted by weather and industry-wide declines in restaurant traffic [7][8] - Licensing program in the retail segment showed growth, particularly with Chick-fil-A sauce and Texas Roadhouse dinner rolls [6][16] Market Data and Key Metrics Changes - In the frozen dinner roll category, the combined growth of Sister Schubert's and Texas Roadhouse brands was 11.6%, increasing market share to 60.9% [6] - Frozen garlic bread sales grew by 6.8%, with a market share increase to 43.9% [6] - Chick-fil-A dressings grew by 4%, contributing to a category-leading share of 27.2% [7] Company Strategy and Development Direction - The company aims to accelerate core business growth, simplify the supply chain, and expand through focused M&A and strategic licensing [15][16] - Planned closure of the sauce and dressing facility in Milpitas, California, to optimize the manufacturing network [17] - Acquisition of the Atlanta-based facility is expected to enhance the manufacturing network and support growth [18][19] Management's Comments on Operating Environment and Future Outlook - Management anticipates ongoing challenges in the consumer environment but is positioned to respond effectively [16] - Input costs are not expected to significantly impact the upcoming quarter [17] - The company is focused on innovation and distribution expansion in the retail segment [16] Other Important Information - The company reported a cash dividend of $0.95 per share, marking a 6% increase from the previous year [13] - The financial position remains strong with a debt-free balance sheet and $124.6 million in cash [13] Q&A Session Summary Question: Impact of consumer slowdown on foodservice collaboration - Management noted that weather significantly impacted traffic and sales, with expectations of low single-digit declines in foodservice volume [25][28] Question: Balancing distribution gains against consumer softness in retail - Management believes distribution gains from new items will offset consumer softness, projecting low single-digit growth in retail volume [30][32] Question: Weakness in refrigerated dressings and dips - The decline was attributed to the timing of Easter, which shifted sales to the next quarter, impacting consumption data [40][42] Question: Promotional environment at retail - Management indicated a careful approach to trade spending, focusing on effective promotional strategies rather than broad price reductions [46][48] Question: Competitive dynamics and promotional stance - Management emphasized the importance of strategic placements over discounts, noting that private label competition remains manageable [52][54] Question: Quantifying the impact of Easter shift - Management estimated the Easter shift impacted the quarter by at least one percentage point [59][60]

Financial Data and Key Metrics Changes - Consolidated net sales decreased by 2.9% to $458 million for the third quarter [5] - Gross profit reached a record $106 million, with a gross profit margin improvement of 90 basis points to 23.1% [8][9] - Operating income increased by 41.9% to $50 million, driven by lower selling, general and administrative expenses and gross margin improvement [11][12] - Diluted earnings per share increased by 44.7% to $1.49 [12][15] Business Line Data and Key Metrics Changes - Retail segment net sales decreased by 2.6%, with a 0.7% decline when excluding exited bakery lines [5][6] - Foodservice segment net sales declined by 3.2%, impacted by weather and industry-wide declines in restaurant traffic [7][8] - Licensing program in the retail segment showed growth, with Chick-fil-A sauce and Texas Roadhouse dinner rolls performing well [6][18] Market Data and Key Metrics Changes - In the frozen dinner roll category, the combined market share of Sister Schubert's and Texas Roadhouse brands increased by 520 basis points to 60.9% [6] - Frozen garlic bread category saw New York Bakery brand sales grow by 6.8%, increasing market share by 180 basis points to 43.9% [6] - Chick-fil-A dressings grew by 4%, contributing to a category-leading share of 27.2% when combined with Marzetti brand dressings [7] Company Strategy and Development Direction - The company aims to accelerate core business growth, simplify the supply chain, and expand through focused M&A and strategic licensing [17][20] - Planned closure of the sauce and dressing facility in Milpitas, California, to optimize the manufacturing network [19] - Acquisition of the Atlanta-based sauce and dressing facility is expected to enhance the manufacturing network and support growth [20][21] Management's Comments on Operating Environment and Future Outlook - Management anticipates ongoing challenges in the consumer environment but is positioned to respond effectively [18] - Input costs are not expected to significantly impact the upcoming quarter [19] - The company is focused on innovation and distribution expansion for new items in the retail segment [18] Other Important Information - The company reported a cash dividend of $0.95 per share, representing a 6% increase from the prior year [15] - The company maintains a debt-free balance sheet with $124.6 million in cash [15] Q&A Session Summary Question: Impact of consumer slowdown on foodservice collaboration - Management noted that weather significantly impacted Q3 volumes, with some customers closing stores for up to ten days [28][30] Question: Balancing distribution gains against consumer softness in retail - Management believes distribution gains from new items will offset consumer softness, projecting low single-digit volumetric growth [32][34] Question: Weakness in refrigerated dressings and dips - The weakness was attributed to the timing of Easter, which shifted to April, impacting consumption data [44][46] Question: Promotional environment at retail - Management indicated a careful approach to trade spending, focusing on effective promotional strategies rather than broad price reductions [48][50] Question: Competitive dynamics and promotional stance - Management emphasized the importance of relevant new items and effective execution over heavy promotional spending [56][60] Question: Quantifying the impact of Easter shift - Management estimated the Easter shift impacted the quarter by at least one percentage point [62] Question: Impact of weather on foodservice volumes - Management noted that traffic was significantly affected by weather, particularly in January and February [68] Question: Potential of new Chick-fil-A sauce in club channels - Management expressed optimism about the Chick-fil-A sauce's performance in club channels, viewing it as a significant opportunity for growth [70][72]

Financial Data and Key Metrics Changes - Revenues before reimbursable expenses (RBR) grew 11% year-over-year to $395.7 million in Q1 2025 from $356 million in Q1 2024 [18] - Net income increased 36.3% to $24.5 million, or $1.33 per diluted share, compared to $18 million, or $0.95 per diluted share in the prior year [18] - Adjusted EBITDA was $41.5 million, representing 10.5% of RBR, compared to $33.8 million, or 9.5% of RBR in Q1 2024 [19] Business Line Data and Key Metrics Changes - Healthcare segment RBR grew 10% year-over-year to $198.5 million, driven by strong demand for performance improvement financial advisory offerings [5][20] - Education segment RBR increased 10% to $122.7 million, supported by demand for strategy and operations advancement offerings [21] - Commercial segment RBR surged 17% to $74.5 million, primarily due to the acquisition of Axia and strong demand for digital offerings [12][23] Market Data and Key Metrics Changes - The healthcare segment accounted for 50% of total company RBR in Q1 2025, while the education segment contributed 31% and the commercial segment 19% [20][21][24] - Days Sales Outstanding (DSO) improved to 79 days in Q1 2025 from 91 days in Q1 2024, reflecting better collections on larger projects [26] Company Strategy and Development Direction - The company reaffirmed its annual guidance, indicating confidence in its growth strategy and ability to navigate a complex regulatory landscape [5][14] - The focus remains on expanding digital capabilities and enhancing advisory services through both organic growth and acquisitions [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's performance despite a dynamic external environment, highlighting strong client relationships and industry expertise [4][5] - The healthcare sector is expected to face ongoing financial pressures, prompting clients to seek performance improvement solutions [6][7] Other Important Information - The company divested its student education business at the end of 2024, which is reflected in the current financial results [16] - Cash flow used in operations was $106.8 million in Q1 2025, down from $130.7 million in Q1 2024, primarily due to annual incentive payments [26] Q&A Session Summary Question: Outlook for the commercial segment and any changes in growth expectations - Management noted no changes to segment-level guidance, with record sales conversion driven by the digital business [30][34] Question: Headcount growth and its alignment with revenue - Management expects headcount growth to align with revenue, particularly in the healthcare business, where demand remains strong [36][37] Question: New business and billings trends in education and healthcare - Management reported no notable changes in new business or billings, with strong sales conversion in Q1 [40][42] Question: Impact of policy changes on private universities - Management confirmed ongoing relationships with private universities, with no dramatic effects from recent policy changes [44] Question: Trends in performance improvement project assessments - Assessment activity remains robust, driven by clients facing financial strain and escalating costs [46][48]