Limbach(US:LMB)2020-05-13 17:30Financial Data and Key Metrics Changes - In 2019, the company demonstrated modest growth in consolidated revenue of 1.2% compared to the prior year [35] - Consolidated gross profit grew substantially year-over-year, with gross margin expanding from 10.9% to 13%, an increase of 210 basis points [37] - Adjusted EBITDA for the year was $16.8 million, a significant improvement from 2018 [41] Business Line Data and Key Metrics Changes - Construction revenue was essentially flat year-over-year due to a focus on managing new project sales in the Mid-Atlantic operation [35] - Revenue growth in the Service segment exceeded 6%, driven by stronger small project and owner-direct sales [36] - The company experienced a growth in SG&A of 10.6% for 2019, primarily due to increased salaries and benefits related to additional headcount [39] Market Data and Key Metrics Changes - The company noted that no markets experienced further tightening since mid-March, with positive developments towards reopening in Michigan [11] - The environment in most markets is described as more normalized, although challenges remain in New England [12] - The company has seen an uptick in emergency healthcare work, including converting facilities for temporary hospital use [12] Company Strategy and Development Direction - The company is committed to transitioning to owner-direct and service opportunities, aiming for a 70-30 revenue balance with the Construction segment [48] - A focus on improving the design and functioning of mechanical systems in response to COVID-19 has been emphasized [19] - The company plans to aggressively pursue cost reductions and improve operational efficiencies [47] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about stabilizing conditions and expects a gradual return to full activity over the next couple of quarters [14] - The company is maintaining a crisis mindset due to ongoing uncertainty but is focused on liquidity and working capital management [20] - Management anticipates that certain projects will experience delays but does not expect widespread cancellations [46] Other Important Information - The company finished 2019 with a backlog of $561.2 million, providing revenue visibility for the current year [46] - The company has implemented a significant cost reduction initiative, including temporary salary reductions and a 19% reduction in salaried headcount [24] - The company has deferred all noncritical capital expenditures and is exploring temporary rent concession arrangements [25] Q&A Session Summary Question: Completion timeline for Southern California work - Management confirmed that the construction in Southern California is expected to be completed by the end of the third quarter [53][55] Question: Impact of COVID-19 on service operations - Management acknowledged that service operations have been impacted but highlighted innovative solutions developed to adapt to the situation [56][58] Question: Percentage of business materially impacted by COVID-19 - Management indicated that the most significant impacts were in Boston and Cambridge, with ongoing prefabrication efforts to mitigate delays [61][62] Question: Contingency plans for extended project delays - Management is incorporating contingencies into their forecasts to account for potential extended delays [65] Question: Utilization rates of manpower on projects - Management noted that the industry may benefit from a slowdown, allowing for better deployment of human capital and improved execution [76][78]