LMB - Earnings call transcript Q1 2022

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Operator

Greetings. And welcome to Limbach Holdings’ First Quarter 2022 Earnings. [Operator Instructions] Please note that is call is being recorded. I will now turn the conference over to our host, Jeremy Hellman of the Equity Group. Thank you.

begin. may You

Jeremy Hellman

much announced very Form morning, Yesterday, XXXX. everyone. for Thank first and quarter Holdings XX, March its quarter its XXXX Limbach the you ended good results, XX-K filed

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

Charlie Bacon

and Good morning, everyone welcome and joining thanks us. for

I'll environment be any Mike the current and will business I'll are provide our there and of and discuss follow Officer, our this and highlights join update Capital if our the for a up and Matt Vice morning. for Acquisitions is pipeline. Jake an of continued XXXX. today Jayme integration McCann be this Office personal later discuss will results. covering and conflict financial operating business President our also available questions. late Katz, He our Brooks call McCann. acquisition on Chief Jayme Chief Markets conditions And me Marshall financial guidance and Mike Mike us Operating Executive Joining Financial today. and the provide and had week our

past improving GCR effort. I start moving From joining across to COVID services strategy them. to these you two margin the operations to calls. by execution, want the all board. impacted our our worked We have want thanking us way incredible while years, recognize higher our an of for through ODR many improving to employees Collectively, we've our off I And of for

been value, our impacts the transformational which which strategic led ODR validity the believe we marked of strategic the the confirm this successfully in margins Plain and execution. All execution closed our, we to of goals. successfully ODR provided That XXXX The by execute our years revenue, highlighted our ability risk firmly dealing performance. financial less solid saw two achieving a of of more executing deliver while while shift financial of fashion simple. We business We us has down uphold in short All we the pandemic. occurring in results and to and business period predictable of earlier sales our that the that change a We two and guidance terrific another that years Care with core has higher of the last plan. on year. to

million million. to $XXX second we On our the our of half last at to to expect for noted be the in be of range of we adjusted EBITDA trend will a continue Quarter-to-quarter GCR profile of GCR currently industry. fits and expectation. reflect that XXXX cash to XXXX the the million to But to is that results. side results the also On such range the multiples trade million higher of we volatility a will with improving much firmly to at As to while than that revenue to the similar that flow guidance continues that $XX and should focused moving owner-direct be be business $XXX $XX expected year, to characteristic we believe model, execution revenue long-term and stronger improve our in business. this call, the

least at acquisition on Our one year. is to this close goal

However, the guidance year does acquisition include uncertain. timing within the this the transaction calendar of is any impact ‘XX that of financial since not

rising call I Mike impacting continuing healthcare the major primary financial for there but on the think steady off we're and market to Index shift recent Greenfield expected demand seeing facilities capital report construction outlook is due business. picture Before is sectors second We the the expenditures, Institute the which Architects on positive. operators. datacenter on relationship of the to economic be to American to want Jayme solid a Datacenter expand should positive of enjoy hand of to Based general be address the picture before ,what and quarter we to for operations, a to touch along with ground our Building FMI I are remains for utility could costs, retrofitting us. forecasted accelerate the

are facility Boston from seen of and good Our pharmaceutical levels of operation industry. demand research has and biotech the development

uptime manufacturing That's a with of in steady T&M alongside We capital services. work, same with owners building positive term, is improvement through over activity there increase to quarter but the industrial small in our which maintaining And our business, more these ODR assets. T&M to the of manufacturing last of In also our part have growing on-shoring Marshall. we chains to XX.X% the the existing sector of a especially greater for realized year devote of expect we business, opportunities investment. near tight the supply Jake driving be appear to be acquisition

expect issues that to We continue delayed while equipment trend chain replacements. supply

equipment offset impacts. we've delay margin these some chain driven the of While impacted T&M by equipment high been services delays, supply

As and that past, I've stated environments water, the our are essential. services create. we need heat, automation what do, the Humans control power, we conditioning, in building air

where built of in business opportunities response to We move to allowing diverse, us geographies. assets business a have this opportunities where we are exist diverse executed the great The shift present. how the sectors XXXX, proof pandemic from that. to and we are We back

we indicating that Jayme. all evolve. well continue Limbach through how well we're of We of now that see and which business, is plus it our business the as operation. the hand improving With supported these operate we're expect evolving results. trends In we ODR operating And hard the XX transformation, I'll positioned Finally, the to to strategy. keep right digital has of context years as the

Jayme Brooks

Charlie. Thanks

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

For XX.X% the first XXXX. gross gross year, margin QX consolidated and XX.X% compared XX%. in This to XX.X% was GCR QX margin quarter ODR XX.X% last of gross a and in of for margin was of

that our The of XX.X% GCR the in impact generally QX positive improving range of provided on we talked for GCR claim margin QX call, about gross given an QX from a being mix due margin solidly the XX will disputed The margin services margin Cycle points the appropriate increased the ODR settlement. year-over-year, period. Timing noted As job modeling mix long for on was and of on execution. consolidated call fluctuate the XX% to middle as of gross ideal in basis last term. based benefited in we XX% to The any from

For work is delivered at lower project T&M compared example, a work. percentage gross profit to

below XX% case That being any of why profit ODR quarter. is mix percentage work XX%. to in given relative the of impact margin the between quarter, the the this which was the gross will was gross range long-term So

fourth $XX.X with high quarter year from and quarter. of level expense the the the by an SG&A SG&A year prior COVID. increased quarter to fourth was was million, approximately prior was the the that operations, first $X.X to Similar quarter, quarter due overall for with compared million Our normalization SG&A was impacted level a

business expense Marshall occurred quarter, addition, of SG&A several quarter this full a to Jake as well we of In related units. certain expenses the restructuring as

During our certain the assessment real These reduction areas quarter, centralization of our estate we evaluation of continued target number operational certain further services, of we to management cost footprint, reduction. and in corporate where further believe of expenses identified can the a streamline areas a for services. an include

expect for GCR our cost we well to incur costs the found wind table, EBITDA year, non-recurring and the in assessing back these portion segment SG&A. the to will which Pennsylvania business the of in our down schedules. Southern release. improvement cite light full one eastern non-recurring initiatives. needs our of saving branch, several the will California been significant other costs real A costs of related approximately operation work through remote included first associated estate these the we adjusted of with as EBITDA expenses quarter million $XX These includes is earnings run reconciliation initiatives, and of add those our be To incurred as have cost adjusted in For example, which in are in savings flexible

on are footprint our reduce size steps where taking We focused spaces. have to we actively can right markets those and

cost and until have termination those non-cash expense combined $X.X will going add These further year this see year, lease be quarter, the Charlie office savings expense the in issues these We operational was in us are office. $X.X not quarter cost backs to realize a The we initiatives corporate during the reflected per save determined currently During million cash lease the million. expect of of other to just total EBITDA earlier. play guidance the of in and cost expected XXXX. presented and effect year reductions to savings the with their under for But reduction full will forward. from approximately our but Pittsburgh

as be long-term SG&A should over these incur we realizing some those a rate onetime initiatives, there costs As our savings. QX year for we using of And believe to as such, cost impact quarterly as full well run will as reasonable. reduction cost fluctuation related the be

under cash with had cash sheet short including XX, The times to the of balance ended and Turning levered be the to sheet adjusted be her balance continued term million our EBITDA. flow, We ratio of strong. $XX.X to senior million. March quarter outstanding the debt $XX.X at portion continued two and

underbilled million. reduction towards our are are significant underbilled XX the we declined million making working $XX.X shows progress in to neutral position billing net to confident position. $X.X from And that a December that position Our we

we of quarter the so in expect year first use ago million As long first be the cash million to $X which activities a improvement consume during working the we We we cash. operating of dramatic $XX.X a when do from positively term. was quarter, capital impacted from

start before first of generated add $XXX,XXX During quarter, into if for flow expenditures with million taking the of and the quarter, we operating then subtract changes capital $X.X the cash business activities net loss, primary million $X working account. back the during capital non-cash

a have the we the capital time, to operation on I'll the in our nature to a business generated business. to this earnings capital we now timing term our before to as model the modestly in amortization is due working expect way on projects. things. XXXX we the shift changes in expenditures, capital expect payments. the impact positive less pass As I other want generation in will our projected of to ODR reasonable positive from emphasize view year Over Based from cash the business suggested debt short this is we business QX, of smaller the that work project fluctuate call working Mike. do such working to among capital and cash

Mike McCann

activity, Continuing market in primary market. Thanks, about Charlie's Jayme. we comments Good see with two morning. early themes the

The retrofit first term repair is and work. work short

are customers of the Our supply issues. current chain well aware

Due they So simply we've can't have fail. relationships. good position relationships, in are our on fact to that focused they of been to optionality trusted on capitalize know afford to billing this and owner lack we their direct a in equipment

point are that repaired some that existing accrued it to capital be continue. needs customers be expenditures our that the further pandemic can’t is replaced. systems on infrastructure any to cannot systems realize during building At deferred Second starting

strength first revenue really were was from product million, ODR from up segment the capital pipeline we're larger an for first equipment. March backlog to a The great seeing hitting building year's XXX% with market, is XX, commitments $XX.X projects increase. the each from quarter, last see. in to us maintenance. from Of At owners up know ago, net active $XXX.X both backlog and quick quarter Given competition million they're increased and and result effectively note, down lock a sales was XX.X% in scarce repairs which demand sales overall other infrastructure for year

a grew positioned deliver well backlog think consistent ODR X.X%, We in by ODR which continuing we're activity. sales XXXX. revenue focus year-on-year growth sequentially reflects Additionally, on in solid to

year. an split. segment a for ODR of that track the overall segment For revenues, account as revenues goal revenue contributed XX.X% the our portion XXXX in we we full ODR of of up prior year, expect see in Recall from XX:XX to XXXX, XX.X% towards the increasing

in we to trend, expect So the to we split range feel good overall of XXXX be XX%. percentage about in the XX% the

taking outlook While supply our from revenue. time to have our more benefited reality. due is backlog can weighted the That convert business active also to pipeline, we a driver good But our see hand to that chain primary backlog that of year. has an and is strategy half note delays, to than want in sales evidence becoming I the we for behind normal second

to Our of our margins. that to There continuing are revenue our ODR projects the many those of towards demand resources its maximize local branches the on market them and look has comparative many ample driven branches. is return in across for attractive segments naturally small

and GCR evaluate First we XX.X% quarter lens a margin compared from XX.X% at our improved keeping longer GCR segment offer Trailing periods themes business. is two with the this up segment merge XX-month these margin our XX.X%, emphasis ago, a of expansion ago, which was execution. that with best to year with when gross time year XX.X% ODR time

deliver bottom to and demand and continue contributions. will closer company revenue the ODR drive The growth GCR have to and revenue mix. ODR, line sales we're We momentum going improved rate XX:XX continue confidence, generate to market

Let over and me acquisition comments then for hand on Charlie this our up to Q&A. activities, for wrap

Charlie Bacon

Thanks, Mike.

find Let industrial how exploit inside and company. advice a started the team just is fabrication which schedule, one Marshall from both new capabilities. We've that's The and focus, day of only a as The together organizations. the testament ways me on really to it's potential to determination is been continue marketing and also perspective everyone invaluable Marshall proceeding gets and Jake move has The of operational well, sales, on integration to offering markets leadership opportunities. every partnership work on we involved and going. stronger Jake to to

institutional So thanks been the strengthen colleagues It's continue and our Chattanooga, a markets the in great team special to and to region. at Tennessee The team at Limbach. a industrial effort.

replenishment of we've bread shifts on experience conversion upside to mostly As elsewhere, and There's sales to a of the butter steady But maintenance industrial a and project. seen quick of markets. pipeline right, a lot we're larger Jake base overall, of lot Marshall those revenues that Marshall’s one activity. backlog seeing right tuck-in next the to We'd opportunity in product we expect over for team And we find And have what the local providers and see and several to to a love regional it. acquisition offer. service both and further market Jake years, has capabilities. to type capture the we'll expand growing

owned acquisition We locally evaluate dominant steady opportunities a of to continue of stream privately businesses.

discriminating impacted going and to think before, materially we're opportunity we we're capital, set. buyers As don't we've to If said and it want spend I that's do impact. thoughtfully with maximum

to than this a target like one we ultimate perspective, determinant get company be from more done there. will success our planning year key of quality While deal a

overall earlier, we of the about As execution. consistency we improvement noted continuing feel good our and

from noted. over the from transition last significantly from Our of by benefit to ODR ‘XX. up of as and as last year has current market well QX in growth us dynamics, X.X% evidenced project sales XX% positioned from improved backlog Mike was year, ODR

terrific there's in great feeling the certainly are that we momentum So business.

about continues XX:XX include goal. XX% model be for focused that In on efforts to segment revenue us ODR, expect to continuing the You've on for XX% talk also organic acquisitions our the some ODR significant in continue time components. also split and and margins growth realize range. we to profit to a gross heard We're ODR hunt that a

XX% In expect the we In resources GCR, GCR gross have that execution, profit clear, any margin that below see from where to in of to be to realize range Just are proven move XX% workflows. range. due gross we to our may above dollars margins or to the to segment emphasizing we we allocating given expect term. see we over is timing long what that quarter, range

see with continue our also ODR portion revenues we a split a upward to to expect XX:XX contribute see an greater margins. we gross of bias it, our As in

maintain As our we are right working commented, Jayme aggressively and achieve to size. SG&A

up leverage to term, to long the up XX:XX expect revenue, split. and at XX% of the approximately business run from reflects Over operating to we scaling SG&A XX.X% efficiencies which combination the the

M&A integrate our one to we ability From of in good perspective, per opportunities of embedded from feel goals, our anywhere an see assumptions terms three available acquisitions to to we operational year. about In us. plenty

our to One facilitates is that open purchases made and other we're Each for without business. concurrently any here of best well exchange reiterate, on optimistic way with while Marshall board the branch second several stock today, integration model two operating market allowing businesses the bolting throughout did in early and last the demonstrates, of of any point our units, As practices. confident of XXXX. the along disruption members about our one of based a and Jake us other I'd to like and acquired as us many executives quarter, call

We targets. we'll With committed to firmly our strategy your that, delivering take questions. executing and on are our financial growth

Operator

[Operator Instructions] comes Brown Our Rob Street first Capital. from with Lake question

Rob Brown

a wonder do as you you're terms how equipment I of year-over-year? the service playing in the morning. seeing you flow further business sort service good seeing can Hi, that and ramping on little if comment delays maybe throughout return that see shift how you're through and of some out what

Mike McCann

Thanks, Rob, the question. for

things the projects, the our we're of we're a maintenance significant from hitting too, make we're that because project from seen really a with that's of spend capital kind increase, to perspective, as market term, towards think larger T&M our led profit from pushed base inflation, from well, we've that it's perspective. is construction owners to seeing about think, think to that eternal us short at the a resources a worried has that about led really it's to capital helped I and sure perspective, taken infrastructure I prices allocating continues business things our cost, increasing projects the from built of kind two energy owner-direct opportunity. kind potentially And and perspective shift, longer, from work side, quick time building of expenditure especially different trying One really rising capital, gross same and highest the inflationary which strategy have an those definitely larger allocation, to they're since to

Charlie Bacon

have think the and retrofits. opportunity also causing I owners energy energy expense jump you seek utility and the to whole for

So facility that. to reduction that customer excited costs we're I mean, customers improvement relationships, we'll have pretty about as be with utility we to Rob, finally. cost able now about of the think leverage

that. of take we for it's opportunity us think So excellent an advantage to

Rob Brown

the efforts there getting Okay, great, just improve year? get of cost in Do then is that about thank to leverage. line. year Or a and some you the last trend maybe you. some And over lot talked cost, SG&A SG&A the leverage you see more a XXXX of this

Jayme Brooks

savings term as going they That's closer about actually we partial be realizing range the more to year that That are until will the split. to XX.X% talking be XX% long term the full a to XX:XX cost to term impact, won't it long XXXX. agreeing within as savings be as year the realize we this get

Charlie Bacon

Rob, it's major a focus.

getting back hard deploying at we're of terms GCR at mean, moves SG&A at as quarter the I I the both numbers And we've look a dollars. as to over ODR. reduction looking as So much we're we just shifting reinforce and great our to personnel deploying dollars over center, going just SG&A. how we're well some some how those better in demonstrate. very returns did We're just I'm step past made think And take in

that referred actually a XX.X%. there. smart it leveraging very it's midterm acted think XX% that there's to definitely on I'd maybe a being upon. as we'll Long I get term, focus with But actively So to

Operator

Hutton. from with Chip question next Our EF comes Moore

Chip Moore

How is on first question. about bit expand you whether the chain risks in maybe taking Wanted the the macro for just handicapping Hi, back like that to the good you of on morning. visibility Good the Thanks backlog do we touched can revenue concerns is the it or something for think year. if little a morning. half coverage least year, like look of some supply at XX%.

indicators of half. some leading to good, back but are and and want handicap the but good, just those very risks potential So

Charlie Bacon

both for segments, point year coverage backlog strong. The the of this our fairly at are

continued what year. for But very ODR what of side the happy are about really I'll those But of first the we year-on-year. of short over you, especially really the actually the share improved you and what month backlog see saw up heard the I we with with we're just comment, in sales see. front, will April to in the So three percentages on the ODR the year-on-year, sales of X% months equation

So taking it's our really good off. to that strategy around ODR see is

strong. So ODR we extremely the We're front, the the backlog right tied especially continue where to strong. also guidance stand provided, today remain satisfied now we I sales, to are year, for but on back fairly with sitting

Chip Moore

well That's looks follow up. helpful, Charlie, Marshall like and on Jake maybe it are going for very specifically, so my things More there.

I add about to think adding, you resources maybe talked looking some there.

production the an us the I end area, some maybe a OEM, talking more major existing in an on market. a plant new update Marshall. end I and Just the Jake customer think, is know building Chattanooga believe automotive site just about market give I from insight new that's battery

Charlie Bacon

Yes.

dynamics, lot now, insights help similar management to recently, Ford, the favor. in and I us. localize. in particular owner expectations is curves busy. thrilled you our we’ve to conversations there, multiple hear conference customers. going But we're center market he think is we actually opportunity our on very about a those thrilled in the Marshall, don't with senior fire of we exceeding did obviously, that labor right with thinks great was right Tennessee actually to great that very to working clearly Tennessee, you what's thought to of all, us, manufacturing to happening back deliver. to can have those They partnership happening of mean, deal. at plants, careful shape he's what's back sold now good health Jake battery going on is say. first are I and for conditions billions supply of I market But And and and are markets the offered into He But too Limbach, this down attended us supply we're him our sure to already. those our demand were they're oversell very, very the with are public when year account now, which he shape. Right take how and market be with types when make capacity had But And in So

margins can us. see continues improvement the you that opportunity to happening the to as so into So future market out to much throw

our So we're are it’s very not with how exporting in and pleased Jake about markets. with knowledge pretty lot modular things industrial And that manufacturing There's mainly side. of Ohio there the on be and and down in We're markets on it. helping in prefabrication up their going will right components. a pumped industrial the only about opportunity Tennessee, but manufacturing Midwest Michigan now and us Marshall especially

Operator

Our with Capital. next Sweeney from ROTH Gerry question comes

Gerry Sweeney

you wanted details the you're morning, us environment other and a business can focus how could and some if and regions and call. from thanks but give for I even the you market ODR looks competitive thoughts see taking Obviously, long Charlie. what to better today, the maybe Jayme to areas question. suited competition some the or final, areas. yourselves the how is differentiating develop how I those stay to strategy apologize want are opposed are maybe topic. of you good like if I as this a maybe for of that going then little Hey, or Mike, on my and to it's a on yours with

important. a lot there, it's So think long to but I unpack apologize I question

Charlie Bacon

the miss point, missing down wrote well, just think components that tentatively great. something, I I ultimate Gerry, question. it's of I but no, ask If

Gerry Sweeney

though, chance, so. the think I get you Sorry,

Charlie Bacon

So, yes, absolutely.

of didn't and allowed with on building, to So over presence we number street put the one, where into ODR number that's not buildings, for a go just we those but customers targeted one really new it's And buildings. multiple looking were on more us relationships management, past feet years. that have the account

a Number of what So really, that's share. wallet going really station two, I the call well.

for we And else we to over have what do can X,XXX, So do them. we're owner-direct what is, looking relationships.

we need traditional and upgrade, our don't that it's essentially have opportunity there's core sort you in we mechanical, because a or prime, kind you now of really offerings. love of that. But as if steel on building act So to call service plumbing the focused look, talking minor we're general more where contractor, utility automation. for where can for nature we're do what NEP And actually us drywall, they electrical, of there's we

those having we're concepts owners and their buying great at success So with sharing in.

and that Finally, can expanding customer. products also services offer we're we the

So we take one recently are working We I'll And the off can in digital analytics, things And provide. aggressively about further. There's on predictive this a different past, management. transformation. we of asset brainstormed. talked lot digital a we our We had step management site.

do we safety. something all I extremely What these relationships. different there about our can So else in like we have We we sell talking that out them? things today started this business well. And have put

at many in safety so regards. experts are We

services with why services coverage. gone owner industry, Nashville management those start we other export offering to of needs year, types some market can to that's those our management program the a program can't in also sectors. There's building things last we safety leaders that the that of we're customers, we additional well healthcare started in So like extremely

we're more expand there's we're wallet But call working So of to share. things market host the doing services. a a I street, on products what different share, and additional grabbing selling

ODR that's all up add to of the the segment. to rapid continue So going growth to of

Gerry Sweeney

portfolio especially you this about buildings? opportunity owners, a building the own sell they to an feet the sale to is a directly more on When talk to there building Or manager? of if street, is

Charlie Bacon

the herself engineer. to our target option restaurant What employee just key actually the we the of it's figure of about overheard it’s, turns of that And facilities over actually big the great for both, get company. lees getting he help couldn't dinner have off the they comment some have resort And managers a and and But to next where there to we're she the point and was the in a at moment story. one major talking out made our decision we're on getting Yes, that she I was owner. story an like levels, get That email all as something, our facilities of employees it's key we director Clearwater, a C-suite, a having out introduced to here conversation how facilities business building I'm makers. a hard we're opportunity. a night, praises was into making an was one working company, table, directly the Gerry, for whether a if or just circulated to we overheard, ago, the somebody singing really And herself a and that's But he latch Florida. at just for And our director, just not sort at doing sometimes with the lessons she individual. looking customers really work C-suite. is work last facilities, us to into that multiple

to roll So the going to rapidly grow to that's continue ODR out segment. all of

Gerry Sweeney

of to of in? there growth? that Are other ODR make curious, have is the your broad of investment sort that positioned board maybe areas some footprint better areas you growth, across within then seeing are more Just and certain for just type you

Mike McCann

that that full local one of approach. sell in connected looked that the offer market the one competitive people projects. really our a or at to really would of on our that from and is we're able to multiple services controls all vertical a maintenance sectors from our areas of of approach businesses sector, and or I healthcare, There's is one showing and I that, think national suite up a advantages of think Gerry, we've seeing we're healthcare focus

at is And we're more as the embedded we're we're in we maybe need critical, trusted other vertical GCR it's there's healthcare, the it's the there but meet, larger we at that like we even I the can critical, than a And that want be really we're we're have look that offer sectors, be can those where especially even picture important the critical so think grows from We're of price. approach, and we trusted. of services there healthcare where where too. I we for building. along, those that at facility, facility, and as smaller maybe we we on mission of are services, when is facility branches important well, those in think as all and relationship. bigger a comes lot well sectors be that luckily, offer and mission we're then healthcare, as where work. connected, sector and for in market we there, our mission to and project and looking sector sector, type there life the to If want doing And capitalize, can looking they that a look a

Gerry Sweeney

on that's especially Got critical a secondary and of that mission for. helpful, you're sort it, of some pricing notion really looking the business

the side. So I'll I appreciate it. ODR but has into This on been helpful jump back

Operator

Old comes next with Our from Meadow question Jon Long Investors.

Jon Old

Good Ys. morning, questions. the Thanks for everyone.

question. First

of real follow just a expense Jayme, the sort quick, up For on savings.

head into could So be as you at costs. talked and specific what about the run following into lease total rate if going you do one think we the example savings But looking dollar overall year? ‘XX, the you're

Jayme Brooks

call leased specifically to factor out most in really some real terminations going Yes, ‘XX look of from estate it's we're get is probably tricky timing sub it to to the of looking piece because to basically like, space. the that we do is or haven't leases, with

of So SG&A for land that out that's to more of split. XX:XX term kind why we put get long- the the we guidance could where outlook when

Jon Old

you the I All you're the total mentioned your million mean, have areas for $X.X just you for number looking don't right. at. leases, all Okay.

Jayme Brooks

yes, working still, we're we're Yes, that. through

Charlie Bacon

I'm various our sublease, for of was of out rid properties we're was very a Pittsburgh And just that marketing, really which then That California, properties Jon, pleased. with or getting just a marketing other transactions. the interest, terrific. I very, at Jon, move, the property. we're working done outcome. the several Southern group market, are good the has that job on really job great a we terrific seeing that think And also a we're made then and either with property. did in actively We

we're progress. them just the Jon, the but, estate, very to And cost list, about play. other we're and clear, is a go just healthy that's So us aspects be reduction. off. of we smart excited checking right, sale looking I'm real beyond to that's going But got at help a

Jon Old

XXXX. your not That's margin that. before But target Right. is

Charlie Bacon

XX.X%. to Yes. XX%

Jon Old

Yes.

Charlie Bacon

towards Yes. those we working aggressively, We're working on. in numbers

Jon Old

for nothing noticed of was average mean, I balance use I X.X. yes, is balance question. another the mean, I sheet. the Then, XX-Q in The was and the virtually obviously, revolver like the

it you obviously, still of it or is you’ve use or quarter, So the since paid right the end at in place that down.

Jayme Brooks

debt. We've out an then as too, to our just also, point since paid that well And down. term item on

flow actually need that, agreements, a And for about million was term we well due that April. clear place per down active as some debt as payment, that claim payment that cash of pay the came to we end have with here, recovery. was $X.X and So we our took have

down come but term to debt our the on to revolver so QX, went that's borrow based we that then leverage here, post that but back we see from can look you'll so where And revolver. we the it

we're way we covering different cash. needs borrowing it only that So of when are off

Jon Old

and or is And year? planned. this good. okay, at that's as I continue down, modestly? some it and it to segment that ODR sort going Or does point grows the go stay But going is of Yes, hopefully you leveling flat going a then obviously see obviously, declining, it's know, to stop down to organically do point, GCR grow some at that of, as off sort does But just percentage, rapidly.

Mike McCann

profit. And less, to and the accordingly. looking on or more I that. expect profit to or flat. to a the higher getting be But may flat basis our each really a return Jon, tend think from thanks we relatively for Yes, gross focused gross that opportunity few to we're we're perspective plus individual that allocating points, be minus best resources drive

Charlie Bacon

interesting sales did But all we you we this we key with, some it about last I'm And take couple to Jon, begin that the backlog will the in good were pursuing. we're off One, referred the for was said that, is happy were shape. opportunities we discipline decision. of And the business, side. as price. right no. it's from more And we our strong because interesting so bottom into we're we months, line absolutely, past we're creating the to star rolling firm, had put getting what's book,

execute just, total the deployed take wait, see execute we're perfect So we that and human ODR. right we're to we the makes we margins to well, the opportunities assets just we'll That's where focus. markets over that business low, going on, that bill, have. we our see but maximize and It in capital to got sense. We

Operator

Management. from with MKH question George next Our comes Melas

George Melas

gave Thank ODR, certain us term question of a I have you, for gross margin. sort my on question. thanks long you taking

million. puzzled for So ‘XX. right that some fact quarter the at gross $XX year, XX%. quarter-to-quarter range was it the given in the ‘XX big, point by the business business the through mean, now margin. this of fluctuation was quite I'm very But is the I right, last

that much me XX%. you so Can is Now help many that that why has size how understand business gross small in project margin? of fluctuation with

Charlie Bacon

is we it timing of projects The a nature George, those deals. that the majority but of projects, the some what just scale. do, margin, in it's the some moving very are the along sometimes of are you issue. smaller smaller, timing be high larger of to It's going are projects project though, might larger the project a because are that's so have margins

saw quarter, we quarter, saw right, books. quarter, the we the work, through So there some was first big terrific the going fourth

as that We a up. write-ups in to happens future course. wraps some see expect But network

XX% the So time. that the some And I've for fluctuation in be before quarter will range. should to be there. trend the general been quite saying XX% But

George Melas

quarters, there few in was quarter in special cost this past the that any fluctuation. that special explained But payments and or

George Melas

No, Mike, you any not on further do have really. comments it?

Mike McCann

it's depending all just mix have projects would, sources in to of I revenue, larger based to depends mix the particular small multiple quarter. like lifecycle, a you owner-direct from we said on on, projects maintenance No, project on

Charlie Bacon

But worlds, a get just quarter-to-quarter. some years. trend movement, we several been George, live we'll overall good with know to to is had to is see that. be there's continues we for which demonstrating what fluctuations now upward see. quarter-to-quarter I news going to the great your But expected the right, on We've show that's

George Melas

look million EPO? if projects quarter, $XX the So coming this you how that is at many

Charlie Bacon

because some actually there's in in Oh, of the hundreds hundreds out projects small and projects. big goodness, wouldn't, it's there's there my business. of too. $XX,XXX, I are small some But it's And George, -- only ones

George Melas

Right.

would that be the in what this revenue you work that get quarter? So biggest recognize the you projects

Charlie Bacon

doing projects. the There's are some lower work That's for on the end. large scale which TDA, we're

end, of range. $X that XX% We lower type probably end, be have range to still some that other XX%, like lower are $X projects out a or might million there million that of XX%,

could to we that are purchased those particular questions expect on number do way our saw you But XX%. normally this time. impact, the So XX% period. for projects our maybe at I'll some XX% down no burning, to closing should smaller that turn management business. again, projects of quick if and That's say range this There just people it remarks. modeling the be that further of are are numbers, to back at

Charlie Bacon

want I today. us All for joining thank everybody to right.

our shareholders future. the us are of at that means senior our directors, for board company, many All the strategic and of of management, and excited what our here about direction our

And buy continued we We quarter report August. of forward as There incredible this number to trajectory. we execution, and have our why in line value gap bottom we practices our with for of continue terrific insiders look plan, that continuing foundation firmly expect and narrow. We second is have undervalued, our you twice shares. growth our proper that's multiples and both we again to more to track We have believe are to current established a in execute line at of speaking our trading the we when are a than here multiple. a top peers results our record to

on information found to Limbach. thank be on additional Matt any the saddle our today, Again, have our website. you page Their will who Relations the back out group. or in on please Investor interest contact equity for investor Katz, will you be If questions, reach our for your later

Operator

a conference. concludes today's Thank parties you. That Have disconnect. may good All day.

Limbach (LMB) 11 May 222022 Q1 Earnings call transcript