Limbach(LMB) - 2025 Q1 - Quarterly Report

Revenue and Profitability - Total revenue for the three months ended March 31, 2025, was $133.1 million, an increase of$ 14.1 million or 11.9% compared to $119.0 million in the same period of 2024 [160]. - ODR revenue increased by$ 16.1 million, or 21.7%, reaching $90.4 million, while GCR revenue decreased by$ 2.0 million, or 4.5%, totaling $42.7 million [161]. - Gross profit for the total revenue was$ 36.7 million, representing a gross margin of 27.6%, compared to $31.1 million and 26.1% in the prior year [160]. - The Company reported a net income of$ 10.2 million for the three months ended March 31, 2025, compared to $7.6 million in the same period of 2024, reflecting a net margin of 7.7% [160]. - The Company's gross profit for the three months ended March 31, 2025 increased by$ 5.6 million, or 18.1%, compared to the same period in 2024, with ODR gross profit rising by $4.0 million (18.0%) and GCR gross profit increasing by$ 1.6 million (18.3%) [162]. Expenses and Costs - Selling, general and administrative expenses for the three months ended March 31, 2025, were $26.5 million, or 19.9% of total revenue, compared to$ 22.9 million, or 19.2% in the prior year [160]. - Selling, general and administrative (SG&A) expenses increased by approximately $3.6 million, or 15.9%, for the three months ended March 31, 2025, primarily due to a$ 2.0 million increase in payroll-related expenses [164]. - Amortization of intangibles for the period was $1.9 million, up from$ 1.1 million in the prior year, reflecting the impact of recent acquisitions [160]. - Amortization of intangibles increased by $1.1 million, or 76.3%, for the three months ended March 31, 2025, primarily due to acquisitions [166]. - The Company continues to monitor the impact of inflation and tariffs on its cost structure, with higher costs of materials affecting specific projects in 2024 [183]. Acquisitions and Market Expansion - The Company acquired two companies in 2023 for a total cash consideration of$ 15.3 million, including ACME for $5.0 million and Industrial Air for$ 13.5 million [155]. - The acquisition of Kent Island Mechanical for $15.0 million and Consolidated Mechanical for$ 23.0 million further expanded the Company's market share and capabilities in the mechanical contracting sector [156][157]. - The Company is actively seeking strategic acquisitions to enhance its geographic footprint and service offerings [179]. Backlog and Future Revenue - The Company's ODR backlog as of March 31, 2025 was $249.0 million, up from$ 225.3 million as of December 31, 2024, with an estimated 87% expected to be recognized as revenue over the remainder of 2025 [170][171]. - The GCR backlog decreased to $120.2 million as of March 31, 2025, from$ 140.0 million at December 31, 2024, with an estimated 63% expected to be recognized as revenue over the remainder of 2025 [172]. - The Company’s existing current backlog is projected to provide considerable coverage of forecasted revenue for one year from the date of the financial statement issuance [187]. Cash Flow and Liquidity - The Company generated $2.2 million in cash from operating activities for the three months ended March 31, 2025, compared to a cash outflow of$ 3.9 million for the same period in 2024 [189]. - The Company has $38.1 million in cash and cash equivalents as of March 31, 2025, which, along with available borrowing capacity of$ 34.9 million, is expected to meet working capital and capital expenditure requirements for at least the next 12 months [197]. - The Company experienced a cash outflow of $1.9 million in investing activities for the three months ended March 31, 2025, slightly down from$ 2.0 million in 2024 [192]. - Cash flows used in financing activities increased to $7.2 million for the three months ended March 31, 2025, compared to$ 5.7 million in the same period of 2024 [194]. - The Company’s cash flows are primarily impacted by fluctuations in working capital, influenced by contract mix and timing of cash payments [186]. Debt and Financial Position - As of March 31, 2025, the total long-term debt of the company is $23.692 million, an increase from$ 23.554 million as of December 31, 2024 [198]. - The company has approximately $113.0 million in surety bonds outstanding as of March 31, 2025, compared to$ 109.3 million as of December 31, 2024 [199]. - The company believes its $800.0 million bonding capacity provides a significant competitive advantage over competitors with limited bonding capacity [199]. - The Company’s current ratio improved to 1.55 as of March 31, 2025, up from 1.46 as of December 31, 2024, indicating better liquidity [188]. Tax and Other Income - The Company recorded an income tax benefit of$ 2.2 million for the three months ended March 31, 2025, compared to $0.3 million for the same period in 2024, with an effective tax rate of (27.8)% [168]. - Total other income decreased to$ 0.08 million for the three months ended March 31, 2025, down from $0.7 million in 2024, driven by a loss associated with the interest rate swap arrangement [167]. - The change in fair value of contingent consideration related to acquisitions was$ 427,000 for the three months ended March 31, 2025 [160]. - The change in fair value of contingent consideration was an expense of $0.4 million for the three months ended March 31, 2025, down from$ 0.6 million in 2024 [165]. - The company recognized interest income of approximately $0.4 million for the three months ended March 31, 2025 [211]. Pension and Insurance - The company participates in approximately 50 multiemployer pension plans (MEPPs) and is responsible for any plan underfunding [202]. - The company accrues for the unfunded portion of costs for both reported claims and claims incurred but not reported related to its self-insurance policies [201]. - The company has not experienced any losses in its cash and cash equivalents, maintaining a conservative investment policy [211].