LMB - Earnings call transcript Q4 2021

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Operator

Greetings. Welcome to Limbach Holdings Fourth Quarter 2021 Earnings Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to Jeremy Hellman of the Equity Group. Thank you.

begin. may You

Jeremy Hellman

ended much announced very results morning, Yesterday, fiscal everyone. filed Thank fourth and quarter Holdings year the for its Form XXXX XX, and Limbach XXXX. its you XX-K good December full and year

will over call, Listeners Today’s XX-Q on or results conditions. and reviewing risk actual and this President and report forward-looking earnings turn reminded differ projections XX-K call. contain quarterly Officer may to Form Executive the differ statements forward-looking update During Chief made call that, actual be current from to that results reports forecasts, an statements may on Limbach the those Charlie review on cause to Bacon, With Holdings. the Form during the will similar during company call. for the the may annual are market made discussion providing statements and of from factors earnings any company’s I results the

Charlie Bacon

thanks everyone morning, joining and Good for us.

is today Officer, a the are our Chief chain Officer, impacting Markets, our Financial me fourth Katz. with of closed despite challenges that Joining a through strong dealing operating and with our out Executive acute and quarter and Capital We XXXX Mike Acquisition President, ongoing Jayme Operating pandemic issues Matthew McCann; Brooks; Vice Chief supply industry. our

strategy execution over the quarter in stakeholders November reported X of years. we have and for results third demonstrate quarter excellent fourth to the the last Our successful on built laid the continue our we out

to and May consolidated now, out fourth by prior and well margin financial we presented gross XX.X% modeling we like in grew XX.X% XX.X%, over our the now financial to year range that for adjusted XX%. I’d GCR from compared of with Jayme XX% The sales was year our ODR grew revenue guidance a XX%. range consolidated detail, XX.X%, the margin our financial of and few XX.X%, discuss by last and ODR growing complete, quarter backlog point year-on-year up XX.X% bottom results the for profitability. ODR was but quarter. ODR highlights all both to With higher will more revenue met EBITDA. above was Mike rationalizing modeling business to above report margin we on to work gross Ultimately, focus on our our driving the is gross GCR while focus line about the margin business concurrently XX.X%. can

segment XX.X% approximately Our the segment by results GCR bear profit full improved as $XXX,XXX. out for revenues declined yet gross this year,

previously, will GCR $X.X over started prepared $X.X was the of what employees higher EBITDA issues we near-term, trade impact supply adjusted the by to we gross net both actions combat million the later but company ability chain to quarter year As persisting, industry-wide EBITDA being work and their said our million, on and as Mike February, another in The set on which income did dollars of $XX.X fell are to quarantines. Fourth adjusted comment the we record, impacted pandemic within fourth lower for quarter. of improving chain despite and supply employee that’s GCR are the have profit Full saw million quarter. revenue and for in problem. guidance our

up wellness sophisticated revenue. and Tennessee We our features a prefabrication provides access I reducing delivering everyone’s debt strategic work also debt, initiatives of greatly focus perform, will and James the proud us GCR and We From resolved continues at and delivered plan intended employees their the in back due line improved on ODR bottom improve capability We Our achieved corporate and last pandemic. risk the branch teams, into and after leadership later. technicians success. hard company’s safety service our XXXX families capital. and These of despite cost to of craft consolidated strategy. year’s support margins workers directly the share financial growth of stated. The refinanced ODR on the to with Southern board results. segment as the our we which also the extremely of appreciate many to across the agenda of temporary office, base greatly the it. previously our of ongoing our total in overall the having We our XXXX one and units us geographic acquisition margin, This in field pushing commenced a in year, on in the region our am manufacturing zero to in To our contributed pandemic. From customer incidents. that first sectors company the to surrounding the as the ODR to the delivered larger also continues contribute to profile us executed allows acquisition strategy December. acquisition moved comment the keep into from the transformational strong industrial states. while and staffed and uncertainties focus business. to acquisition year our another on investments a and headwinds We The segment with it gross recurring strategic helping strong several revenue, with we growth the and we recap cutbacks the safety claims, major profitability, expand

our care program offering, on new for-profit specifically health industry. focused new management Nashville, sector, a of the a in nexus services, started the which care market health with are office also We along

comment those from over Mike While I’ll Jayme. hand units, results that, later we this unit some of address of With business strong fell had to of our one short a actions. that We expectations. on underperforming number will the

Jayme Brooks

Charlie. Thanks,

our I’ll release I financials. in our will some a with press my Our key review contain And of XX-K that mind, on and start Form margins. detailed gross earnings discussion with focus areas.

XXX XX.X%, basis and down quarter, service attribute quarter, points was to is fourth XX% the appropriate realized sequentially slightly third purposes. Gross we the that we was from range, ODR we to of mix. the an During project modeling XX% above margin which margin think and for

on noted calls, has expectation lower revert that it range. of ODR been would our margins prior the to the end As

was contribution for QX the segment, projects. toward full have the impacts and fourth material of books, shifts as from ahead is amount The to and from of carry project an disputed on within claim year, mix lower cycle positive and benefited out $X.X write-up. have disputed which to margin we that in greater carried projects our a claims we ODR GCR in segment, settled Within As delays of a the margins quarter the in GCR the work. incurred quarter from several resulting comparatively discussed. the XX% in the previously past range timing and large and the extrapolated above financial ODR well the GCR XX.X% the be impact on mix, referenced we contracts gross that Those a projects was XX.X% margin others. should business we that maintenance not with due XX.X% ideal timing midsized where million have

We outstanding continue always on a disputes the dispute pursue aggressively and resolution of timing these challenge. other the to claims is

selection more note, year profitability, Gross for by in continued However, we impacted XXXX. also consistent performance. no full were claims on significant on new yielding disputed recorded our and positively margin project the focus results on a emphasis the positive

conservative best for thinking XX% margin is to in our point a range such, XX-month that to segment. current the evaluated or of be our continues over a represents XX% starting a GCR business And gross As modeling period longer.

consistent prior entertainment for expense This due million SG&A up year functions includes compensation, SG&A the professional primarily $X.X fourth business to cut Our was or functions. million our administrative increased marketing, $XX.X expense, and the year travel and million fees, increase was were for of the the height from year, at with normal quarter XX.X% $XX.X increases fiscal also training critical and pandemic. operations. The the and stock to expense in staffing revenue. Full resuming due of back other that rent

human also supply. XXXX human by the in in bar support short to in recruiting a We executive which HR function of the top-tier is raised critical capital, resources

and associated stock in Marshall also incurred the in professional fees quarter. acquisition with of XXX(b) We the Jake XXXX compliance fourth the

grow percentage revenue the way look a of a level is as to SG&A around it, ODR keeping at purposes, continue our same modeling to we while For reasonable segment.

balance at be our the total of from We our XXXX. outstanding and strong. ended reduced and $X.X flow, amount debt the million, continued Turning cash $XX.X XX, cash balance to to sheet with million year December sheet by

CARES recall, was fourth of cash. to additional half year of uses cash activities payroll in had the operating an which quarter million credit. taxes signed And the $X.X of million Operating We capacity December of from decreased $XX.X deferred of the for million cash borrowing from that through $X.X consumed that if was line XXXX. activities. payment XX also related of in million back the Act was the you of our of cash the for balances $XX.X $XX.X million, Total

by We will to taxes remaining pay the also December payroll required be XX, deferred of XXXX. half the

for driver fourth large was net increase the cash in Another the underbilling usage position. our quarter

positive call, where overbill $XX.X of and in end positive discussed cash with position of in an ahead ODR the we we impact GCR versus both to of the the impacts million. project the an XXXX life us being As performed able yet bill very of be way, their timing we end had our a the the At of XXXX, result the negative time. $XX end of on cycles At balance on cash reduction of million, cycle. size the are that had at project had XXXX, life had that depending and QX the mix for was on of XXXX. balance during in the overbill and work The overbill at customers a to which projects

these prior paid. cash already incurred reduction that for work was received of we in the costs period with XXXX, those and performed in cars were and these expenses cash we During projects. the build Since the extract associated period, are costs

overbillings in million. is a these reduced by cash coming of As XXXX, $XX.X result our down

don’t our As work and we higher to business smaller XXXX. we ODR in experienced project expect overbill work, return to to as the levels shift

billing culture and to customers. negotiate continue our of stress possible we importance with within our the However, where to try organization cash favorable terms

lag in cash our and in time result convert costs cycles. impacted $XX.X our takes had is the the impacted by life A on $XX.X change it incurred XXXX, to of our This the again and We we is million that timing claims have was increase Additionally, increase project million the order underbillings. underbillings end into unapproved position underbilling of by large work underbillings the the of of of of end at billings. XXXX. portion at also

result used of of timing $XX.X underbillings, cash million the and increase this in a XXXX. we in As

time impacted that that lag in X provided resolution million. dispute beyond may $XX.X to of various down standard and to by some equity total Cash continue majority factors million financing delay February in and orders year, from fluctuate. This provided year. expect form timing We believe was of however, $X.X X our those this million, the included XXXX and billings within will convert change $XX.X unapproved the is our We debt. is conversion cash claims raise activities by to that of require of offset of practice and construction the pay net the of

While Jake and investing of on the now acquisition used $XX the of million, Mike. loan cash quarter. fourth primarily of The hand cash I the in quarter. the $XX.X the borrowings of cash usage pass call term million from Marshall own funded by to fourth activities will Marshall acquisition was $XX was in Jake million due our to

Mike McCann

good Thanks, morning. James, and

provide work so our people’s much like many issues, how nearly to consisted continue during employees selling air segment, Limbach deliveries. at some our I We reacting the the the the team and very proud last all of for doubled goals, with want equipment primary their times and were I’m chillers the acknowledge those. to our fourth In members. equipment both strategically, in challenges pre-pandemic. for work financially quarter what to on we’re ambitious they of chillers Supply outstanding minds, year. majority and ODR to and accomplished to we want of set I be those issues all have of color Lead forefront chain handlers. of First, compared

added extended expect to XXXX in and delivery been and due on increase times, addition miss early schedules, delays XXXX. with unforeseen don’t In delivery has equipment and deliveries adjustments production In results talking costs manufacturers, to our late reduced an we in into in suppliers lead relief times until efficiency there also and costs. scheduling and

into We’re by our responding market of varying to contingency in conditions adding these levels scheduling.

the makes seeing the plan slowly in to we’re the sense which we Given year. the these expect for and reality field, course of expect disruptions, resolve it to over

be material new services but seems and a growth equipment, increase possible, resources, make perspective, to their on take was the to fourth see our quickly necessary, to in where to ODR to was in experienced we identifying are later QX alternatives. our available, equipment isn’t year-end, a the as existing their backlog million. activity, One the are is well We up due repair selective XXXX XXXX increased allowing supports in customers sales strategic on in and revenue sales our GCR comment ODR an continuing was backlog When and emergency At have decisions look second supply off We evaluating long-term interesting urging is will immediately this, our remains backing GCR Charlie into Because positioned the to ongoing issues equipment I From those also the always favor sales and a ultimately sales realized going segments. in now shifting in to are maintenance unplanned both benefit That the for quarter preventative trend fails us to believe after of and selection at that we resources of in not intensified XX% that’s time million are and we’re We as the for year XXXX. customers investments older owners $XXX and seeing we ODR tend supply the that on. from year-over-year. resulting demand from owners, picked base. payoff. supporting $XX I that at sales. half building These work see but year to the chain we’ve work. and impacts resources our segment first Old solution. our which in added and best the yet contract point, of half take investing produce, this a expanding believe equipment XXXX. backlog sales maintenance investments we year. equipment focus remain

and In our project terms our focus profitability squarely GCR our flows. selection, going cash improving operational forward on strategies, of line is bottom

We of people growing the return segment are in the aggressively GCR and continuing to on our ODR segment. the maximize focus

strategy, operate been successful and the to this recent show, results going has way. As a we’re this to continue

On February, We The improved higher-performing into and January, business development human a conditions needing business into after to inconsistent subsequent capital from a bright labor off situation QX made the were impacted decision the to strategic performance quarter. improved March. and by Among workers occurred units, In variant including in have down has moving market The through on Southern the do has quarantine the year-end. and thorough through operations that strain evaluation local financial dropped our was we to unit, wind it California, consumed of outlook, cash to business side, other resources. of the and share considerably. the Omicron picture and we operations. in first February did that has important but one

years around, made our that we the the sense. a of turn determined but the business reducing of work been business last have full to couple most as over exit We ultimately footprint

business to expect XXXX. be in We fully that exited

the December than of As remaining XXXX, perform. California million Southern had to $XX branch XX, of backlog less

opportunities Limbach and from Our well, other leveraging focus target capabilities perspective. shared and is directions, Marshall such of engineering the Integration Jake on the Among time in prefabrication is Limbach. as design Marshal’s key and expertise. team line both plan integration the proceeding a is to and we’re and our Jake services

margins that begin. may over improve example, at prefabricate piping we’re of an on we’ve able our the be operating We assemblies Marshall, about identified Midwest we our project. which XX% in believe would Jake a to As project to

Matt this on me comments Let our over acquisition for activities. hand to

Matthew Katz

Mike. Thanks

broadly. a So first, Marshall, moment comment on acquisition and more the to M&A let then me Jay activity further pivot to take and I’ll environment

good with team been, First, consistent really shortage a short in and business to the opportunities early of market the no has as time, being a also footprint that going it’s have for coming market the really continue explained. strong industrial part out presents. really develop there, directions, just That’s in only Limbach And shortage no asked now cycle ever a really the business in proven sell Mike very has as better to there’s of that in Marshall, been Jake to the and environment family and respect feel how But there’s to generally the opportunities just and Tennessee the expected couldn’t think that of for market. really team learning [indiscernible] in been is terrific, partnership to both of I And we be there with opportunities as months. few about in the we that, trough work. ‘XX. year busy we the It’s continues good been

a at back vis-à-vis looking of the broadly, prospecting I activity really remember is candidates. M&A exploring we that and the having like everything in as and but ever speaking Not the potential looking healthy, right describe can across of also acquisition we’re more general stepping environment, but strong as with to exploratory experienced. at now. get that the I and the to seeing So and is balanced businesses we’re levels would really going universe, phase feels It finish the are phase the market phase, interesting as nurturing volume in line, what strong

same acquirers We at and we do. to Limbach. going core led not a looking are and that with by and values be out quality are every certainly businesses like at the is for this and we great to pretty being to we turn But really we’re pleased busy, be moment, business as business picky share great the folks

quarters year. half continue So first into and the of busy the to through be back expect and second to the

Charlie Bacon

activity, in pause continue some XXXX seeing to going we’ll returns. evaluate for operate far is to this there year. was open to activity we the attractive then way through with a that needed how thus response, I’m And we sales last and significant in most activity comments questions. time feeling a in pandemic. were still at their that sales markets our offer in well Thanks, the above Proposal what as year ago, resources everyone on it the Recall close up in was Matt.

equipment have as to global work. the from requires the Until we is contribution and material resolved, maintenance. expect issues, issue supply in chain we a increase and aging additional see a strong With nice time time seen supply chain work material

While the T&M matters locked chain continue ability quick good supply was to secure revenue equipment change-out impact if the equipment. certain into news, to a customer hitting our projects specified is

now, beginning issue into see right an of As we really XXXX. this early

in to the basis key maintenance often in a D.C. element the are other projects one segment, a Looking Tennessee various at to I market. in This which XXXX, awards contracts growth. lead two awarded far, a thus the $XX emergency as million, the grow, will industrial and and the development maintenance on secured several a our with million new Marco totaling including base projects, XXXX Washington, other been research on refer Jake In Limbach contracts in ODR total contracts higher-margin, and facility to small-capital is is investment the which institutional central building to by our Island, along for project Marshall is ODR What grow be strategically executed Boston, quite plants, utility quick-hitting, performed repairs. T&M Florida. can continues into a reminder, major nice approximately those included start has pharmaceutical maintenance year. $XX for Also segment, new in and and of

GCR the to Turning segment.

up meet branches aggressively pursue branches we’re exposure, continue success working including for those and and assets, don’t remarks, of to staff fourth reposition in and and very heavy their lifting model. at the of work, In their not GCR ODR entered about geopolitical our best we’re In our both returns, the of is as of heard a totally expect we way Throughout that culmination quarter for is in our criteria maximize believe managing demand. us we you’ve smart a the That demonstrated GCR construction yet year suggest. looking XXXX for results the We XXXX conditions. on but also business to talk to higher-margin also those shift company. that significant market to enjoying bottom industry continued The the growth. third focused was We’re with hand. our delivering closing, current continue, the positioned, supply but pursuit solid much Limbach, catch and, done that prepared a line process with as the durable response contributions non-residential macroeconomic respects, mindful assets major transformation has issues strategic complete, of large has deploying well but being and demand of in been to to at many

a are sectors. service a of We and geographic fortunate diverse have diverse a footprint to set market diverse offering,

laboratories with our facilities, benefit Our to continues ODR defined. management largest Among now and continued to pipeline expand with are centers services, we includes biotech engagement manufacturing healthcare, an large sector, area of which small. to earlier relationships, pharmaceutical And as and for and see a verticals, both opportunity. demand other our projects, new solid upstream as present of data capital projects we further look program

underway with Jake Tennessee. substantial have a EV the broader the entry the are acquisition. manufacturing with sector Another automobile plants industrial prospect They is that Marshall into highlight our especially in list,

May. supply your the first with challenges to our the bullish We what also limitations sectors in guidance mentioned, they to on first results forward take Mike be to and And the in current and it the XXXX. that We our backlog year available financial look the issue XXXX And I second several with remain centered present indoor sector. are labor as I intend opportunities the that want the of formal we referenced stronger detail appears we experienced challenges, emphasize mainly of agriculture half on along we for through questions. XXXX. chain the to XXXX. to building supply the year when will that, chain quarter than half With due we’re

Operator

Street Instructions] first Capital. question Brown [Operator from Please you. Rob Lake with is Thank proceed. Our

Rob Brown

Good morning.

Charlie Bacon

Good morning, Rob.

Rob Brown

of, seeing projects at On this getting starts shifting the chain issues just little Or point? you but bit? delayed? new get do sense you timing of impact just a projects, current gets supply the the Or see maintain projects to sort your what’s a environment, but wanted you are of delayed really out,

Jayme Brooks

thanks It’s for the question. interesting. Rob,

are impacts I partially versus work, nearly our be to an the think industry GCR In right equipment the but this double tends relates commodity what has tends they risk. ago. to which XX But the type were more to that XX before. general, be to. our now, that definitely labor is in questions We larger owner-direct months right now component shift were factor work, on the lead less at work owner-direct equipment. That had especially to times biggest the has it’s additional equipment and equipment-driven which equipment,

So times. we’re equipment really watching lead closely

from – has think percent I I think have that owner at to be I direct some an those. mentioned, equipment some on as But there’s direct relief will owner to start point older here, they side, replaced.

now. So I It’s in order continue Larger for right deferred investments. capital the kind building the have that very make It’s those expenditures finally now to we them expenditures position of matter be those a those selective. – getting those equipment owners where projects, to we’re just think investments. that we’re to a happen, make in position in of any

minds. definitely is lot I think price forefront building a larger the owners’ of of from a on certainty work is GCR on – perspective

watching at So and we’re this closely it. really really point, completely equipment-driven

Rob Brown

point? projects. sort And new it’s How GCR? Thank color. profile to do continue you about improve specifically selective you. it, you characterize around on like you margin great that average? this you of is then the like can talked at margin guess, Or would Do feel How on of stable? projects looking I being That’s feel

Charlie Bacon

to projects, Yes. result past we’ve of see Look, points, it interesting between XXX the now it’s results that what we’ve by next pushing management, a and better sales years give over a to of increased it really I couple the the done quality push, the ODR front, just continue be to higher of over for educate to of risk on basis been margin force think as But returns proper the we margins our years jobs. the the couple we presenting we’re selection shot. going go

GCR firm side, we holding on levels margin. much On certain pretty the are of

always Of providing risk for work course, And opportunity hard we’re modeling winning beat at look basis. range on pushing but and to a the purposes. that we’re that regular are we we

some work. losing We’re

people that get fine. that’s the disappointed we’re so lost And but we project, no, like,

Let’s deploy the return. can capital where greatest human we projects on our get the

get us we’re people on that’s of projects going off So a work holding Rob, give that staff good want and when to a yes, we’re this healthy way get maybe they the really our it up to that firm return. that are really we it lose right get the just outcomes. a that return is greatest at now, one, staff we And for It’s becomes that great project, worrying looking tougher a them strong to okay. our I And think doesn’t our have for on company. are pretty job that’s almost pumped

that We what busy. can doing. we’re that’s next Let’s is market frankly, after the be and selective, quite go the And one.

Rob Brown

will Excellent. turn you. it I over. Thank

Charlie Bacon

Rob. Thanks,

Operator

with Instructions] from Please [Operator comes Chip EF. Our next question proceed. Moore

Chip Moore

guys. Hey, good Thanks my morning. for taking question,

Charlie Bacon

Good morning, Chip.

Chip Moore

can ask XX%, to a for Maybe year, out strong. What on quarter, normalized GCR but expand settlement. of about the margin some for the help you called and the very obviously and that then strong think about the very just us you mix quarter margin and is claims this

some as point. starting XX% a there to are now XX% puts What and about talked conservative of takes and the You potential outperform? to

Charlie Bacon

Yes.

claim and And great job. were held hoping ground negotiated were got They we’re but more to the get very on. firm. of quite proud we people We held we in pleased. our Very a resolved that On that frankly, We a position. quite resolution, several situation, that good claim the working we left did quicker that. that we’ve

some that upside nice So business, no created to the doubt.

But that’s our So modeling this. from that our look pushed risk provide we’ll proper at quarters place go the we updates – better we conservative further between when slightly think And it at project the to look by, and the for XX%, think in for put years and selection. on progress. But I ago, XX% as couple guidance, previous a right the modeling management going of view to it A margin we increased way now. reinforce I I’m again, up. but processes

the and the up. modeling to We I want and is pushing Chip, execute well we improving now. way XX% the margins. think, margins to We’re to to perspective, deliver think from XX% But continue right a go execute

Chip Moore

I chillers impacts, maybe to And about things the of talked I like ODR handlers this. as particularly that hold Thanks, and second can we air helpful. this sales half times on weighting supply back the quarter? lead then guess, if of some the materially any and you shift year, for That’s it. Got think side, give guys. color helpful? Did us all chain about be sort would there at you that this And

Charlie Bacon

Sure.

supply first what’s So kind of sales all, with now. of chain, right on interesting

to We’re using X to a past, might in piece that retrofit. a words, decisions. to make pushing In and or to make with decision our the on customer our a other months take have if forward you of go customer equipment – advantage base at X a

Unfortunately, have though, pushed and plus get revenue, revenue they late at get our early better in a look, get equipment there decisions But could don’t working this in we at last production. with expect into custom we lock a of worse? a today couldn’t improve missed of happen approximately four So I just And was standpoint it was a major them, who to the for could executives their had chain delivery problem, of Controls, what’s custom. he late a had forward to call know We million call, $XX could last Johnson of anything year we supplier management of that’s or in for looking dates much the unfortunate, of we year. year of on urging supply if QX reinforced ‘XX. with at favor continuation $XX is equipment need pricing year about we’re who issue equipment, – from that improve to the one this of was person million Now that up, got that actually maybe week. QX, to higher-margin of work go because early back the We anything because their pricing quicker. or get we the will the that senior kind it manufacturing, don’t responsible to you’re going particular half us senior the look until

it’s a if custom next project is to sell going piece year. today, of So a we equipment, revenue that

bit, up catch was share starting far news, starting off-the-shelf but equipment, up It’s positive demand. anywhere back as jam they’re with what he to starting some to they’re it As a to to near equipment. standard log and though, not eats pre-pandemic, come with meaning did that see they’re catch

us. was positive So for news really that

have that base to talk a our that going new construction. for or, even equipment to We’re customer an to out they for matter, to need have switch

of opposed the equipment. be the some a to We’re with going we that. custom for we can to go many projects push product piece going to work cases, where alternative, try the has to be to Unfortunately, in we’re sophisticated convince doing on, But them custom. it to of as off-the-shelf with

So is interesting. again, kind of chain it’s supply –

pushing respects. prepared of T&M It’s as mentioned in remarks. also We’re in it we advantage up, certain taking our our

quicker, to the We’re some come clients to wait to lag pushing work unfortunately, as for we going that continue equipment make decisions of in. to but is

Chip Moore

some last bidding No, in opportunities? on about you’re you seeing actively the and also out some I opportunities if some it’s talk Understood. one building think And I Marshall there. but those of just of of sector. super Are that’s early, you auto know you helpful. called I could did the that in maybe sneak the one Jake

Charlie Bacon

into great all, the construction $X beginning of out busy, that areas which will in Marshall planning, Jake of it we investment. Ford it. plant very great, we of with at just awesome in, and year, which that’s built is that’s There was is would up see and interested first million is it goes was pick being of at to currently a kind be the billion see. there, to new works here Well, them the when look That’s $XX

be pick spot but price up, Tennessee will can If of would to a now. of be it appropriately. that we right great, it seems activity hot some We

big the go things We a plant quite like a facility Ford production whether like that, opportunity. EV all going there bit around excited about it’s ancillary plants are or it, pretty for to that is the be of

looking And it for, take we is, answer looking it. right opportunity, are right find the on. at So, we the if we could that will are margins we

Chip Moore

Thank Alright. very you Perfect. much.

Charlie Bacon

Thank you.

Operator

Old Long Meadow Jon proceed. next question Investors. from Our Please with is

Jon Old

you the leveling you year and the call continue everyone. little or a forward, – for sort do out So, expansions, decline think just you of segment business congrats that going on line continue? of that quarter. after I or for are to…? you the Thanks or Charlie, purposeful the do see fourth to you flat do curious, in grows rationalization to the it think is last Hi and bit margin sort do will the plays going am maybe see GCR now,

Charlie Bacon

question, Great Jon.

for you it. you business, our understand sales. piece first keep got as can. aggressively ODR to In very as we mission that is fact, of at I asking all, the with at to thank look growing pleased When this the was we point

have branches large-scale over go going each at decided, up produce really need year-on-year the at GCR margin, looking it’s One margin, the continue. negative particular The straight the work, just business just and branches it. segment. are this ODR we look, saying, in not whether we to cash GCR are XX% looked we we are but can are years, the be we can they just produce segment some successful look unit small We doing they flow, we straight And that very at building the Can last cash execution. maybe year, get it’s projects, rationalizing going the that or ODR. at their branch to we and them been so I are ODR, to, it’s they that them for

going to conversation in are show that long the and didn’t take agreed. And it to so better. numbers and everybody much You them do math just work the through

shifted the those we ODR, So, including to SG&A. over assets

So, stop. There units, to we no we in going is maybe see go to other continuing GCR certain continue units or forward, grow. even as can In are I to contract business It’s question you line just share bottom else about much margin, anything much to positive you like Mike, have flow. on better do would produces it. better. ODR that? much better and cash

Mike McCann

when at really business. adds our on No, it I we journey of sure make in be most back here the about in margins, are we years, talked SG&A a are And profit making look would our necessary we perspective, I you strategic we that agree. was when step sales to maintenance – position – a think we a couple to the gross ‘XX, ‘XX, on people sales a And think putting the employees, really return from about successful. focus, I from base. from a the In we doing a the of perspective. about talked in are mix focused It’s

suite as sell on expanded are customers, those customers to once focused well. of to into We positioned we been ‘XX going are introduced like new and introducing an ourselves already feel to we we have them services

return, on. have make we the people Charlie mentioned, selection So, to that have And what and best and focused project is trying ultimately this we obviously, sure in we greatest the are is on. position a journey our we are as

Charlie Bacon

to more tell of on want call important demonstrates importantly, it you story I because GCR, think quick a the for but importance and everybody I really the that ODR. Jon, is

And million so us wrapping were I ended Maybe was shocked project. XXXX, you that I was them. of after So, for opportunity the what the do impressed in, Disney mine had out to it don’t And we Disney was have have well. lot of up shocked, all worked for We they project, all at got Imagineering a ended $X were $X change million, the some to with but stuff I think dinner we creative orders. having I shouldn’t time There details, about how they with well. up Head did but value. a really paid It get past. small were. up did thrilled them. been have And in I it’s Disney, for we hear ride about it to heard renovation. And train the an talk and Back into

Imagineering, that properties So, you or fast in we facilities Kingdom still working four whether working maintain within divisions their but the forward throughout are today, the Orlando. now for at the Magic it’s all we for are over, Disney

retrofit contractors. now presence So, part into the don’t property and use is great opportunity pretty Disney type what nice grown it’s a business. where for little into But started much this has off of good-sized work, this now it’s small with expanded other a general we all for renovation, And GCR our of maintenance, on services. work, our work GC the telling become

the I So, the story the reason is shared model. that’s

a GCR, them we and more important more So get cash involved that is listen much we better project, how who figure and to owner, much could let’s start flow. what’s it about better and understand with providing sure leveraging that the relationship margin, is services, out make on we then owner start

is in direct. units, GCR need so GC. – markets we program there we without whole We just the opportunity have So certain those important, in much that again, ODR, the business emphasize GCR, is but I to go also where don’t

long-term the really, years. frankly, I introduced And buildings, those We ourselves of quite and we really over with pleased have relationships. are getting It’s blossom. start extremely the just on what done knocking of developing doors past to am couple

Jon Old

Thanks years, last negative. for cash up to Great. the following just flow, year positive Jayme, And that color. then last balance the on obviously, X was year way where X to

forward? will more normalized you closely flow flow more results, cash EBITDA other forward, to conversion think and Going in words, be do the will in ‘XX existing cash going approximate

Jayme Brooks

Thanks. Yes.

really under-bill. color give trying So, explaining that and the is more on over-bill to

And to Charlie a not well as as perspective as volatile. to so mentioned, as as shift a are risk we from ODR ODR, it’s shifting

neutral we towards and split, expect work we that billings. XX-XX that be will more as So, anticipate

flow that’s helpful cash from perspective. the So,

this And So, business like kind I using on operations as point. we at as our have nothing from do borrowed way that off work we that from have the from debt we there, we to daily but good the have payments of a an is and also need think then at to that then make, well income to that our approximation. we cash the look can revolver

kind we are being of gets I volatility that land. over-billed have and the best we probably the the cash you that making billings going think between So, comfortable that right under-billed as that’s and is where way shift, now to

Jon Old

just a that means then, you What Okay. one to that more tremendous growth can the to And deals company I us over on a give What if of really long little a the could activity. acquisition you and or two forward, boost Matt, provide color a going maybe business? period appreciate it. maybe execute year? expect the Alright. guys time you

Matthew Katz

Sure.

partnership terms we in I would the to type provide think give form we me sort then after top this call quarter next QX, December in transaction for prototype and pursue And we size, into of the have type business through clearly, I as of in here. some the here. thing. scale, some a will So, and good let location, along we incremental like Marshall But looking color on before, I the move Jake are you is really that what of think can that said pass comments capability, the we of of to

through have So, with again, probably before, margins we $XX call it, to million, revenue businesses between $XX million which in, X% EBITDA the range. criteria, XX% and been with

make comfortable the the million, those over an And $XX be They So, with ability get months, diligence to the a of good to like are us feel large million I size transactions the operations, many bottom difference. enterprise these and they to value small enough with finance to XX transactions the for for businesses resources are $XX transactions enough maybe XX-month us impactful also the can and branches, other that look have requirements and are with closed. those but to period. digestible XX pipe that’s an They a of months think roughly people, to with line. our

now lot fit at look right I and them. market opportunities very in the the there a when environment So, the are are interesting. of that profile, that They

people be the pandemic. other the of side think on to I largely relieved are

about again, the done we because that resources gains really two has acquirer universe year, marketplace. market. but has internal I one getting to look are at and a is in we we I opportunities and feelings ahead planning with Getting manage went sharpened as year estate that the of tax the have mitigated reasonable the And perspectives good year, of think reasonable last deals trying and that’s think capital in next we the for aspiration, this capital sort planning. I through the people’s think resources, a of pace the got those or availability succession

and be sort I that businesses with And a for extracting just given that also manage that the integration Limbach great, the at think have sure that One for Marshall in to from those out to the sort of we the me, day obvious available depth of of resources to sight of balance of lot work support value want make we jobs. discoveries of breadth partner deal was with. that Jake we folks hiding to plain we have me,

and three to at am to I deals I that if the as next scale. transaction to probably right scale or right months, are plus a one again, this add deals two And would about of, now year. think another that deals as XX I two be and strategy that size, and two horizon But call think it, the the the that is thinking environment we great. XX get have near-term near-term into months year minus up the about the year to ability ramp and bleeding that got So, pace

Jon Old

Thank you so much.

Operator

proceed. next Melas with George Our question MKH from Please Management. is

George Melas

to story. new the I am fairly

side sort on to going sales of you going So, year, sales has you increased is but and keep am clearly XXXX, are XX% particularly I expect to the to roughly backlog were segment grew said you on very see continue much. SG&A do this long-term? ODR you The XX%. up ODR operating in growth the the or in understand this to believe Do trying the business growing leverage – and investment, I continue strong the

Charlie Bacon

for question. Yes, George, thanks the

future. cash right reasons, production. it’s part just amazing for view our it’s our huge Again, right it and what is of does So, ODR a of returns for now economic all the

a to and much the back is why were supply $XX burn a So, XX%, that the great did off. But kind actually chain, by I reasons this the not we comment what a backlog because still did up when going we about pushed little over XX% about is you one work. And revenue million of past year, themselves sales are to which of we of look that’s the growth, of larger forward. have at make indicator future

different to continue in we to our see add staff we that. expand it, where and going the So, marketplaces do to grow are opportunity to

Matt representation us. for touching intent believe revenue part acquisition have front, ODR roughly ODR. Marshall a on, I other of was was that XX% was look the for is our on is, just reasonable what right The businesses with that did that now Jake revenue. to

And that so for to can add going businesses we are to look that to continue mix.

see GCR, our Our to goal mix by is XX% XX% XXXX of ODR. clear, that Was George?

George Melas

take just is just And much. and investors, quick over-billing Thank this are the care as business, Yes, the something the of very or sort then significant, liability be question fluctuations is and of contract of And part that so about? worried a itself. you. that we And time, assets under-billing. and over it the and on should

Charlie Bacon

with George. it it’s we a when what of nature over look And you to do do. So, timing, ongoing industry, the under-billings, the that’s at an just for and of thing lot has

the better, one of a could depends You have be cycle much project. next worse. are bit month could month upon It kind we where of a

a let’s where shifting GCR better cash flow, a now to regular we a is to going strategy. be to selective this to both to are mix The continue strong ODR, back either on see But we we much tends of ODR on So, also neutral profit right nice feel to in billing slight are to strategy have basis. very and and terms billings. go the which now uptick means that outcomes,

ODR, you I and we So, more helps, continue and George. that. to the smooth out want evolution to it we as of that have transformation expect lumpiness, call to hope business the that it not if

George Melas

Okay. you. Thank Very good.

Operator

Please proceed. Investor. Private Brown, Chip from is question next Our

Chip Brown

is Hey, relationship question regards Good winding that ODR California. To with knowledge, shutting down with my down to correct? Southern kind relationship Disney, morning of is or my guys. an

Charlie Bacon

No.

We change-outs we have work done air tried didn’t much We very I little some did getting at success. we handler and think in there. Anaheim, have

of for Thanks good all our majority the old work is question Now Orlando. Chip. in the

Operator

our That the for back like turn session. closing comments. question-and-answer call I to concludes would management to over

Charlie Bacon

for We thank that we May. quarter we proud forward to of to matter. for everybody very the year want are this And speaking look again joining us first report you the I morning. results quarter and to the in when

to out can have Relations our please your firm, questions, for be Their you Investor website. or interest on Investor Matt additional Thank Katz Limbach. information on found Equity our contact If the again you page any our Group. reach in

Operator

does today’s This conference. you. Thank conclude

time your your lines You you may participation. for disconnect and this at thank

Limbach (LMB) 17 Mar 222021 Q4 Earnings call transcript