Limbach(US:LMB)2023-05-09 18:32Financial Data and Key Metrics Changes - Q1 revenue increased year-over-year, with gross margin expanding to 21.7% due to a higher contribution from the ODR segment [58][69] - SG&A expenses rose to $21.1 million from $18.7 million, influenced by CEO transition costs and increased stock-based compensation [59] - Cash conversion exceeded the 70% annual target, with a cash balance of $41.4 million and term debt of $19.6 million at quarter-end [7][29] Business Line Data and Key Metrics Changes - GCR gross margin improved to 16.6%, up from 11%-12% range a year ago, while ODR gross margin was 27.1% [5][58] - The ODR segment accounted for 48.5% of total revenue, up from 44.6% in Q4 2022 and 43.6% for the full year 2022 [72] Market Data and Key Metrics Changes - The demand environment remains strong, particularly in mission-critical sectors, with a focus on both short-term repairs and long-term capital expenditures [80][81] - The company is well-positioned to capitalize on infrastructure upgrades as supply chain demand eases [8] Company Strategy and Development Direction - The company aims for a long-term goal of the ODR segment contributing 70% or more to total revenue, with a focus on selective project execution [58][72] - The acquisition strategy emphasizes cultural fit and operational alignment, targeting both geographic expansion and tuck-in acquisitions [71] Management's Comments on Operating Environment and Future Outlook - Management noted that market conditions remain stable, with a focus on engaging customers and providing long-term value [62][69] - The company expects stronger revenue in the second half of the year compared to the first half, guiding towards the upper end of the revenue range [6][29] Other Important Information - The company reiterated its financial guidance for 2023, projecting total revenue between $490 million and $520 million and adjusted EBITDA between $33 million and $37 million [29] - The company has a robust acquisition pipeline and is focused on maintaining a strong balance sheet to support growth initiatives [75] Q&A Session Summary Question: Demand environment and owner direct focus - Management indicated that the demand environment is strong, particularly for mission-critical systems, with a focus on both short-term and long-term needs [80][81] Question: ODR segment and proactive relationships - Management discussed the shift from reactive to proactive relationships with customers, emphasizing the importance of data-driven solutions [90][91] Question: GCR margin perspective - Management highlighted that being selective in GCR projects allows for improved margins as the company approaches a 50-50 revenue split between ODR and GCR [88]