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Limbach Holdings Reports Fourth Quarter and Fiscal Year 2020 Results

March 25, 2021 GMT

PITTSBURGH--(BUSINESS WIRE)--Mar 25, 2021--

Limbach Holdings, Inc. (Nasdaq: LMB) (“Limbach” or the “Company”) today announced its financial results for the year ended December 31, 2020. Despite the impact of the global pandemic, Limbach was able to generate year over year revenue growth, substantially increase profitability, and improve cash flow during 2020. Most notably during 2020, gross margin increased 130 basis points to 14.3% contributing to a net income of $5.8 million and an increase of approximately 50% to an Adjusted EBITDA of $25.1 million.

Charlie Bacon, Limbach’s President and Chief Executive Officer, said, “Limbach recorded a strong year of profitable operation in 2020 and continued to have substantial year over year growth of our service and owner direct business in the fourth quarter, which is the core foundation of our strategic plan. We enter 2021 with a substantially improved capital structure following our successful refinancing, which occurred subsequent to the close of the fiscal year. As a result of the Company’s significantly reduced interest rates on its senior debt facilities and a lower overall level of funded debt, we expect to realize approximately $4.0 million of reduced cash interest expense in fiscal 2021 compared to 2020. When combined with our recent capital raise, we believe we are in a strong position to execute on many key initiatives including the acceleration of our owner-direct strategy, digital transformation, and pursuit of strategic growth. Last year, we made meaningful progress against our three core initiatives of improved risk management, greater exposure to the owner-direct market, and cash flow generation and we believe there is additional opportunity to improve performance.”

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Mr. Bacon continued, “Although we saw some deceleration in revenue and sales in the fourth quarter due to a pause in decision-making by business owners across the non-residential construction industry, we anticipate that to be a temporary issue. We believe the drivers underlying the industry as a whole, and several of Limbach’s core end-markets specifically continue to be supportive.”

The following are key financial highlights of fiscal year 2020. All comparisons are to fiscal year 2019, unless noted otherwise.

  • Consolidated revenue was $568.2 million for the year, an increase of 2.7% from prior year revenue of $553.3 million. Construction segment revenue of $441.0 million was flat year over year, while Service segment revenue of $127.2 million was up 10.5% from the prior year.
  • Gross margin increased to 14.3% during the year, from 13.0%, primarily as a result of improved project execution in the Construction segment and improved pricing across most lines of business in the Service segment.
  • SG&A expense increased approximately $0.4 million to $63.6 million during the year as compared to $63.2 million. As a percent of revenue, SG&A expense was 11.2% for the year as compared to 11.4%.
  • Interest expense (income), net was $8.6 million for the year as compared to $6.3 million as the Company paid higher interest rates in the year primarily due to the senior debt facilities entered into in 2019 that were refinanced in the first quarter of 2021.
  • Net income for the year was $5.8 million compared with a net loss of $1.8 million. Net income per share for both basic and diluted increased to $0.72 as compared to net loss per share for both basic and diluted of $0.23.
  • Net cash provided by (used in) operating activities was $39.8 million for the year, as compared to $(0.9) million. The increase in cash flow resulted from greater overall profitability, as well as improved working capital management.
  • Total backlog at December 31, 2020 was $444.4 million as compared to $561.2 million as of December 31, 2019. At December 31, 2020, Construction segment backlog accounted for $393.5 million of the consolidated total. Service segment backlog accounted for $50.9 million of the consolidated total.

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Fourth Quarter 2020 Summary

Revenue

Fourth quarter 2020 revenue of $130.4 million was down 6.1% compared to $138.9 million for the prior year period. Revenue for the fourth quarter of 2019 is “As Recast” to reflect the adoption of ASC Topic 606, which amends the existing accounting standards for revenue recognition and establishes principles for recognizing revenue upon the transfer of promised goods or services to customers based on the expected consideration to be received in exchange for those goods or services. Service segment revenue grew by $7.0 million or 24.8%, offset by the Construction segment revenue decrease of $15.5 million or (14.0)% quarter over quarter.

Gross Margin

Gross margin for the fourth quarter 2020 was 14.3%, compared to 11.7% in the prior year period. Gross margin for the fourth quarter of 2019 is “As Recast” to reflect the adoption of ASC Topic 606. Construction segment gross margin on a dollar basis decreased $1.7 million as a result of a decrease in revenue, although project write downs were less this quarter when compared to the same period in the prior year. As a result, Construction segment gross margin was 7.4% for the fourth quarter 2020 compared to 7.9% for the prior year period. Service segment gross margin was 32.8%, compared to 26.3% in the prior year period, as Service work project mix trended toward larger jobs which carried higher pricing. On a dollar basis, total gross profit in the fourth quarter of 2020 was $18.7 million, compared with $16.2 million for the prior year period.

SG&A Expense

Fourth quarter 2020 SG&A expense was $16.0 million, as compared to $13.5 million the prior year period. The increase in SG&A expense was primarily due to the reversal of $4.3 million of accrued performance-based compensation expense for nine months ended September 30, 2019 in the fourth quarter of 2019 due to the Company not meeting the performance criteria for that year. As a percentage of total revenue, fourth quarter 2020 SG&A expenses accounted for 12.3%, compared to 9.7% in the prior year period.

Net Income

Net income for the fourth quarter 2020 was $0.4 million, compared to $0.7 million in the prior year period. Net income for the fourth quarter of 2019 is “As Recast” to reflect the adoption of ASC Topic 606. Net income per share for the fourth quarter 2020 was $0.05 for both basic and diluted, compared to $0.08 for both basic and diluted in the prior year period.

Full Year 2020 Summary

Revenue

Consolidated revenue was $568.2 million for the year, an increase of 2.7% from prior year revenue of $553.3 million.

Construction segment revenue of $441.0 million increased 0.6%. The slight increase was primarily offset by a planned decline of revenue in the Southern California region. The Service segment revenue increase of $12.1 million to $127.2 million or 10.5% was primarily from the Company’s continuing focus on developing longer term customer relationships and sales of larger service owner-direct projects and contracts and growth in the maintenance contract base.

Gross Margin

Gross margin for the year was 14.3% as compared to 13.0% last year. Gross profit for the full year 2020 was $81.4 million compared to $71.9 million for the prior year, an increase of 13.2%.

In the Construction segment, gross margin increased 30 basis points. Construction segment gross profit percentage increased from 9.9% for the year ended December 31, 2019 to 10.2% for the year ended December 31, 2020, due to fewer project write downs in 2020 as a result of improved project execution, including less write downs in the Southern California region, than in the prior year period.

Service segment gross margin was 28.5% compared to 24.7% in fiscal 2019, due to increased Service project volume coupled with pricing.

SG&A Expense

SG&A expense for the full year was $63.6 million compared to $63.2 million in the prior year. The slight increase of approximately $0.4 million resulted from a $6.0 million increase in performance-based compensation expense due to the Company’s performance, offset by a reduction of $2.1 million in travel and entertainment expenses, a decrease of $0.7 million in professional fees, and $0.7 million in stock compensation expenses from the issuance of restricted stock units year over year and less material expense reductions in other corporate expense categories. In 2019, the Company did not accrue amounts for incentive compensation due to the Company not meeting the performance criteria for that year. As a percent of total revenue, SG&A expense for the year declined to 11.2% from 11.4% in the prior year.

Net Income

Net income was $5.8 million compared to a net loss of $1.8 million in the prior year. Net income per basic and diluted share for the year was $0.74 and $0.72, respectively, compared to a net loss per share of $0.23 for both basic and diluted for the prior year.

Adjusted EBITDA

Adjusted EBITDA for the year was $25.1 million as compared to $16.8 million in the prior year, an increase of 49.9%. The increase in Adjusted EBITDA was primarily attributable to the increased revenue and gross margins in both the Construction and Service segments during the year, offset by a slight increase in SG&A expense.

Backlog and Remaining Performance Obligations

Aggregate backlog at December 31, 2020 was $444.4 million as compared to $561.2 million as of December 31, 2019. At December 31, 2020, Construction segment backlog accounted for $393.5 million of the consolidated total, a decrease of 22.0% compared to Construction segment backlog at December 31, 2019 of $504.2 million. The reduction in Construction backlog has been intentional as we look to focus on higher margin projects than we have historically, as well as our focus on smaller, higher margin owner direct projects. Service segment backlog accounted for $50.9 million of the consolidated total, a decrease of 10.7% compared to Service segment backlog of $57.0 million at December 31, 2019. We believe our Service backlog decreased due to lower sales in this segment in the fourth quarter of Fiscal 2020 because of macroeconomic uncertainty related to COVID-19.

Backlog includes unexercised contract options that are not included in the Company’s remaining performance obligations. At December 31, 2020, remaining performance obligations of the Company’s Construction and Service segment contracts were $393.5 million and $35.7 million, respectively. At December 31, 2019, remaining performance obligations of the Company’s Construction and Service segment contracts were $504.2 million and $41.9 million, respectively.

Balance Sheet

At December 31, 2020, the Company had current assets of $199.4 million and current liabilities of $150.3 million, representing a current ratio of 1.33x. As of December 31, 2019, the Company’s current ratio was 1.25x. Working capital was $49.1 million at December 31, 2020, an increase of $10.6 million from December 31, 2019. The Company had no borrowings against its $14.0 million revolving credit facility at December 31, 2020, other than for standby letters of credit totaling $3.4 million. On February 24, 2021, subsequent to year-end, the Company refinanced its existing credit agreement using its proceeds to repay in full the senior debt facilities entered into in 2019.

Conference Call Details

Date:

 

Friday, March 26, 2021

Time:

 

9:00 a.m. Eastern Time

Participant Dial-In Numbers:

 

 

Domestic callers:

 

(866) 604-1698

International callers:

 

(201) 389-0844

Access by Webcast

The call will also be simultaneously webcast over the Internet via the “Investor Relations” section of LMB’s website at www.limbachinc.com or by clicking on the conference call link: https://78449.themediaframe.com/dataconf/productusers/lmb/mediaframe/41132/indexl.html. An audio replay of the call will be archived on the Company’s website for 365 days.

About Limbach

Limbach is an integrated building systems solutions firm whose expertise is in the design, modular prefabrication, installation, management and maintenance of heating, ventilation, air-conditioning (“HVAC”), mechanical, electrical, plumbing and controls systems for a diversified group of commercial, institutional and light industrial markets. With 22 offices throughout the United States and Limbach’s full life-cycle capabilities, from concept design and engineering through system commissioning and recurring 24/7 service and maintenance, Limbach is positioned as a value-added and essential partner for building owners, construction managers, general contractors and energy service companies.

Forward-Looking Statements

We make forward-looking statements in this press release within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations or forecasts for future events, including, without limitation, our earnings, Adjusted EBITDA, revenues, expenses, backlog, capital expenditures or other future financial or business performance or strategies, results of operations or financial condition, and in particular statements regarding the impact of the COVID-19 pandemic on the construction industry in the fourth quarter and future periods, timing of the recognition of backlog as revenue, the potential for recovery of cost overruns, and the ability of the Company to successfully remedy the issues that have led to write-downs in various business units. These statements may be preceded by, followed by or include the words “may,” “might,” “will,” “will likely result,” “should,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “continue,” “target” or similar expressions. These forward-looking statements are based on information available to us as of the date they were made and involve a number of risks and uncertainties which may cause them to turn out to be wrong. Some of these risks and uncertainties may in the future be amplified by the COVID-19 outbreak and there may be additional risks that we consider immaterial or which are unknown. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Please refer to our most recent annual report on Form 10-K, as well as our subsequent filings on Form 10-Q and Form 8-K, which are available on the SEC’s website ( www.sec.gov ), for a full discussion of the risks and other factors that may impact any forward-looking statements in this press release.

LIMBACH HOLDINGS, INC.

Consolidated Statements of Operations

(Unaudited)

 

(in thousands, except share and per share data)

For the Three Months Ended

December 31,
2020

 

December 31,
2019

(As Recast)

Revenue

$

130,396

 

 

$

138,865

 

Cost of revenue

111,740

 

 

122,679

 

Gross profit

18,656

 

 

16,186

 

Operating expenses:

 

 

 

Selling, general and administrative

16,005

 

 

13,477

 

Amortization of intangibles

104

 

 

143

 

Total operating expenses

16,109

 

 

13,620

 

Operating income

2,547

 

 

2,566

 

Other income (expense):

 

 

 

Interest income (expense), net

(2,178

)

 

(2,095

)

Gain on sale of property and equipment

77

 

 

19

 

Gain (loss) on change in fair value of warrant liability

(322

)

 

166

 

Gain on embedded derivative

 

 

388

 

Total other expenses

(2,423

)

 

(1,522

)

Income (loss) before income taxes

124

 

 

1,044

 

Income tax provision (benefit)

(263

)

 

399

 

Net income (loss)

$

387

 

 

$

645

 

 

 

 

 

EPS

 

 

 

Net income (loss) per share:

 

 

 

Basic

$

0.05

 

 

$

0.08

 

Diluted

$

0.05

 

 

$

0.08

 

Weighted average number of shares outstanding:

 

 

 

Basic

7,926,151

 

 

7,689,038

 

Diluted

8,201,953

 

 

7,761,294

 

LIMBACH HOLDINGS, INC.

Consolidated Statements of Operations

 

(in thousands, except share and per share data)

For the Year Ended

December 31,
2020

 

December 31,
2019

Revenue

$

568,209

 

 

$

553,334

 

Cost of revenue

486,823

 

 

481,457

 

Gross profit

81,386

 

 

71,877

 

Operating expenses:

 

 

 

Selling, general and administrative

63,601

 

 

63,168

 

Amortization of intangibles

630

 

 

642

 

Total operating expenses

64,231

 

 

63,810

 

Operating income

17,155

 

 

8,067

 

Other income (expense):

 

 

 

Interest income (expense), net

(8,627

)

 

(6,285

)

Loss on debt extinguishment

 

 

(513

)

Gain on sale of property and equipment

95

 

 

57

 

Gain (loss) on change in fair value of warrant liability

(1,634

)

 

588

 

Gain on embedded derivative

 

 

388

 

Impairment of goodwill

 

 

(4,359

)

Total other expenses

(10,166

)

 

(10,124

)

Income (loss) before income taxes

6,989

 

 

(2,057

)

Income tax provision (benefit)

1,182

 

 

(282

)

Net income (loss)

$

5,807

 

 

$

(1,775

)

 

 

 

 

EPS

 

 

 

Net income (loss) per share:

 

 

 

Basic

$

0.74

 

 

$

(0.23

)

Diluted

$

0.72

 

 

$

(0.23

)

Weighted average number of shares outstanding:

 

 

 

Basic

7,865,089

 

 

7,662,362

 

Diluted

8,065,464

 

 

7,662,362

 

 

The accompanying notes are an integral part of these consolidated financial statements

 

LIMBACH HOLDINGS, INC.

Consolidated Balance Sheets

 

( in thousands, except share data )

December 31,
2020

 

December 31,
2019

ASSETS

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

42,147

 

 

$

8,344

 

Restricted cash

113

 

 

113

 

Accounts receivable, net

85,767

 

 

105,067

 

Contract assets

67,098

 

 

77,188

 

Advances to and equity in joint ventures, net

10

 

 

8

 

Other current assets

4,282

 

 

4,660

 

Total current assets

199,417

 

 

195,380

 

 

 

 

 

Property and equipment, net

19,700

 

 

21,287

 

Intangible assets, net

11,681

 

 

12,311

 

Goodwill

6,129

 

 

6,129

 

Operating lease right-of-use assets

18,751

 

 

21,056

 

Deferred tax asset

6,087

 

 

4,786

 

Other assets

392

 

 

668

 

Total assets

$

262,157

 

 

$

261,617

 

LIABILITIES

 

 

 

Current liabilities

 

 

 

Current portion of long-term debt

$

6,536

 

 

$

4,425

 

Current operating lease liabilities

3,929

 

 

3,750

 

Accounts payable, including retainage

66,763

 

 

86,267

 

Contract liabilities

46,648

 

 

42,370

 

Accrued income taxes

1,671

 

 

12

 

Accrued expenses and other current liabilities

24,747

 

 

20,045

 

Total current liabilities

150,294

 

 

156,869

 

Long-term debt

36,513

 

 

38,868

 

Long-term operating lease liabilities

15,459

 

 

18,247

 

Other long-term liabilities

6,159

 

 

763

 

Total liabilities

208,425

 

 

214,747

 

Commitments and contingencies

 

 

 

Redeemable convertible preferred stock, net, par value $0.0001, $1,000,000 shares authorized, no shares issued and outstanding as of December 31, 2020 and December 31, 2019 ($0 redemption value as of December 31, 2020 and December 31, 2019)

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

Common stock, $0.0001 par value; 100,000,000 shares authorized, 7,926,137 issued and outstanding at December 31, 2020 and 7,688,958 at December 31, 2019

1

 

 

1

 

Additional paid-in capital

57,612

 

 

56,557

 

Accumulated deficit

(3,881

)

 

(9,688

)

Total stockholders’ equity

53,732

 

 

46,870

 

Total liabilities and stockholders’ equity

$

262,157

 

 

$

261,617

 

 

The accompanying notes are an integral part of these consolidated financial statements

LIMBACH HOLDINGS, INC.

Consolidated Statements of Cash Flows

 

( in thousands )

For the Year
Ended
December 31,
2020

 

For the Year
Ended
December 31,
2019

Cash flows from operating activities:

 

 

 

Net income (loss)

$

5,807

 

 

$

(1,775

)

Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:

 

 

 

Depreciation and amortization

6,171

 

 

6,286

 

Noncash operating lease expense

4,033

 

 

3,799

 

Impairment of goodwill

 

 

4,359

 

Provision for doubtful accounts

100

 

 

95

 

Stock-based compensation expense

1,068

 

 

1,766

 

Loss on debt extinguishment

 

 

513

 

Amortization of debt discount and issuance costs

2,157

 

 

1,392

 

Deferred tax benefit

(1,301

)

 

(609

)

Change in fair value of warrant liability

1,634

 

 

(588

)

Gain on embedded derivative

 

 

(388

)

Gain on sale of property and equipment

(95

)

 

(57

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

19,200

 

 

659

 

Contract assets

10,090

 

 

(13,378

)

Other current assets

(115

)

 

30,139

 

Accounts payable, including retainage

(19,504

)

 

11,914

 

Contract liabilities

4,278

 

 

(6,446

)

Prepaid income taxes

494

 

 

58

 

Accrued taxes payable

1,659

 

 

12

 

Accrued expenses and other current liabilities

4,713

 

 

(34,686

)

Operating lease liabilities

(4,337

)

 

(3,654

)

Other long-term liabilities

3,763

 

 

(337

)

Net cash provided by (used in) operating activities

39,815

 

 

(926

)

Cash flows from investing activities:

 

 

 

Proceeds from sale of property and equipment

162

 

 

168

 

Advances to joint ventures

(2

)

 

4

 

Purchase of property and equipment

(1,483

)

 

(2,663

)

Net cash used in investing activities

(1,323

)

 

(2,491

)

Cash flows from financing activities:

 

 

 

Bank overdrafts

 

 

(1,333

)

Payments on Credit Agreement term loan

 

 

(14,335

)

Proceeds from Credit Agreement revolver

 

 

17,500

 

Payments on Credit Agreement revolver

 

 

(17,500

)

Proceeds from 2019 Revolving Credit Facility

7,250

 

 

32,500

 

Payments on 2019 Revolving Credit Facility

(7,250

)

 

(32,500

)

Proceeds from 2019 Refinancing Term Loan, net of debt discount

 

 

38,644

 

Payments on 2019 Refinancing Term Loan

(2,000

)

 

 

Warrants issued in conjunction with the 2019 Refinancing Term Loan

 

 

969

 

Embedded derivative associated with the 2019 Refinancing Term Loan

 

 

388

 

Payments on Bridge Term Loan

 

 

(7,736

)

Payments on finance leases

(2,664

)

 

(2,547

)

Proceeds from contributions to employee stock purchase plan

191

 

 

 

Taxes paid related to net-share settlement of equity awards

(216

)

 

(131

)

Payments of debt issuance costs

 

 

(3,777

)

Net cash provided by (used in) financing activities

(4,689

)

 

10,142

 

Increase in cash, cash equivalents and restricted cash

33,803

 

 

6,725

 

Cash, cash equivalents and restricted cash, beginning of year

8,457

 

 

1,732

 

Cash, cash equivalents and restricted cash, end of year

$

42,260

 

 

$

8,457

 

 

 

 

 

Supplemental disclosures of cash flow information

 

 

 

Noncash investing and financing transactions:

 

 

 

Debt issuance costs related to 2019 Refinancing Agreement paid-in-kind

$

 

 

$

1,000

 

Right of use assets obtained in exchange for new operating lease liabilities

1,096

 

 

3,355

 

Right of use assets obtained in exchange for new finance lease liabilities

2,624

 

 

3,578

 

Right of use assets disposed or adjusted modifying operating leases liabilities

621

 

 

1,651

 

Right of use assets disposed or adjusted modifying finance leases liabilities

(86

)

 

(78

)

Interest paid

$

6,467

 

 

$

4,607

 

 

The accompanying notes are an integral part of these consolidated financial statements

LIMBACH HOLDINGS, INC.

Consolidated Statements of Operations

(Unaudited)

 

 

 

For the three months ended
December 31,

 

 

 

 

 

 

2020

 

2019
(As Recast)

 

Increase /(Decrease)

(Amounts in thousands except for percentages)

 

($)

 

($)

 

($)

 

(%)

Revenue:

 

 

 

 

 

 

 

 

Construction

 

$

95,058

 

 

$

110,553

 

 

$

(15,495

)

 

(14.0

)%

Service

 

35,338

 

 

28,312

 

 

7,026

 

 

24.8

%

Total revenue

 

130,396

 

 

138,865

 

 

(8,469

)

 

(6.1

)%

 

 

 

 

 

 

 

 

 

Gross profit:

 

 

 

 

 

 

 

 

Construction

 

7,072

 

 

8,751

 

 

(1,679

)

 

(19.2

)%

Service

 

11,584

 

 

7,435

 

 

4,149

 

 

55.8

%

Total gross profit

 

18,656

 

 

16,186

 

 

2,470

 

 

15.3

%

 

 

 

 

 

 

 

 

 

Selling, general and administrative:

 

 

 

 

 

 

 

 

Construction

 

9,008

 

 

7,930

 

 

1,078

 

 

13.6

%

Service

 

6,668

 

 

5,155

 

 

1,513

 

 

29.4

%

Corporate

 

329

 

 

392

 

 

(63

)

 

(16.1

)%

Total selling, general and administrative

 

16,005

 

 

13,477

 

 

2,528

 

 

18.8

%

Amortization of intangibles

 

104

 

 

143

 

 

(39

)

 

(27.3

)%

Operating income (loss):

 

 

 

 

 

 

 

 

Construction

 

(1,936

)

 

821

 

 

(2,757

)

 

(335.8

)%

Service

 

4,916

 

 

2,280

 

 

2,636

 

 

115.6

%

Corporate

 

(433

)

 

(535

)

 

102

 

 

(19.1

)%

Total operating income

 

$

2,547

 

 

$

2,566

 

 

$

(19

)

 

(0.7

)%

LIMBACH HOLDINGS, INC.

Consolidated Statements of Operations

 

 

 

For the years ended December 31,

 

 

 

 

 

 

2020

 

2019

 

Increase /(Decrease)

(Amounts in thousands except for percentages)

 

($)

 

($)

 

($)

 

(%)

Revenue:

 

 

 

 

 

 

 

 

Construction

 

$

440,979

 

 

$

438,196

 

 

$

2,783

 

 

0.6

%

Service

 

127,230

 

 

115,138

 

 

12,092

 

 

10.5

%

Total revenue

 

568,209

 

 

553,334

 

 

14,875

 

 

2.7

%

 

 

 

 

 

 

 

 

 

Gross profit:

 

 

 

 

 

 

 

 

Construction

 

45,115

 

 

43,493

 

 

1,622

 

 

3.7

%

Service

 

36,271

 

 

28,384

 

 

7,887

 

 

27.8

%

Total gross profit

 

81,386

 

 

71,877

 

 

9,509

 

 

13.2

%

 

 

 

 

 

 

 

 

 

Selling, general and administrative:

 

 

 

 

 

 

 

 

Construction

 

37,708

 

 

40,357

 

 

(2,649

)

 

(6.6

)%

Service

 

24,825

 

 

21,045

 

 

3,780

 

 

18.0

%

Corporate

 

1,068

 

 

1,766

 

 

(698

)

 

(39.5

)%

Total selling, general and administrative

 

63,601

 

 

63,168

 

 

433

 

 

0.7

%

Amortization of intangibles

 

630

 

 

642

 

 

(12

)

 

(1.9

)%

Operating income (loss):

 

 

 

 

 

 

 

 

Construction

 

7,407

 

 

3,136

 

 

4,271

 

 

136.2

%

Service

 

11,446

 

 

7,339

 

 

4,107

 

 

56.0

%

Corporate

 

(1,698

)

 

(2,408

)

 

710

 

 

(29.5

)%

Total operating income

 

$

17,155

 

 

$

8,067

 

 

$

9,088

 

 

112.7

%

Non-GAAP Financial Measures

In assessing the performance of our business, management utilizes a variety of financial and performance measures. The key measure is Adjusted EBITDA, a non-GAAP financial measure. We define Adjusted EBITDA as net income (loss) plus depreciation and amortization expense, interest expense, and taxes, as further adjusted to eliminate the impact of, when applicable, other non-cash items or expenses that are unusual or non-recurring that we believe do not reflect our core operating results. We believe that Adjusted EBITDA is meaningful to our investors to enhance their understanding of our financial performance for the current period and our ability to generate cash flows from operations that are available for taxes, capital expenditures and debt service. We understand that Adjusted EBITDA is frequently used by securities analysts, investors and other interested parties as a measure of financial performance and to compare our performance with the performance of other companies that report Adjusted EBITDA. Our calculation of Adjusted EBITDA, however, may not be comparable to similarly titled measures reported by other companies. When assessing our operating performance, investors and others should not consider this data in isolation or as a substitute for net income (loss) calculated in accordance with GAAP. Further, the results presented by Adjusted EBITDA cannot be achieved without incurring the costs that the measure excludes. A reconciliation of net income (loss) to Adjusted EBITDA, the most comparable GAAP measure, is provided below.

We refer to our estimated revenue on uncompleted contracts, including the amount of revenue on contracts for which work has not begun, less the revenue we have recognized under such contracts, as “backlog.” Backlog includes unexercised contract options.

Reconciliation of Net Income (loss) to Adjusted EBITDA

 

 

 

Three months ended
December 31,

 

For the years ended
December 31,

(in thousands)

2020

 

2019
(As Recast)

 

2020

 

2019

Net income (loss)

$

387

 

 

$

645

 

 

$

5,807

 

$

(1,775

)

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

Depreciation and amortization

1,536

 

 

2,052

 

 

6,171

 

6,286

 

Interest expense

2,178

 

 

2,095

 

 

8,627

 

6,285

 

Non-cash stock-based compensation expense

329

 

 

393

 

 

1,068

 

1,766

 

Loss on debt extinguishment

 

 

 

 

 

513

 

Impairment of goodwill

 

 

 

 

 

4,359

 

Gain on embedded derivative

 

 

(388

)

 

 

(388

)

Change in fair value of warrant liability

322

 

 

(166

)

 

1,634

 

(588

)

Severance expense

 

 

 

 

622

 

 

Income tax provision (benefit)

(263

)

 

399

 

 

1,182

 

(282

)

CFO transition costs

 

 

275

 

 

 

576

 

Adjusted EBITDA

$

4,489

 

 

$

5,305

 

 

$

25,111

 

$

16,752

 

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20210325005929/en/

CONTACT: Investor Relations:

The Equity Group, Inc.

Jeremy Hellman, CFA

Vice President

(212) 836-9626 /jhellman@equityny.com

or

Limbach Holdings, Inc.

S. Mathew Katz

Executive Vice President

(212) 201-7006 /matt.katz@limbachinc.com

KEYWORD: PENNSYLVANIA UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: ENGINEERING CONSTRUCTION & PROPERTY BUILDING SYSTEMS MANUFACTURING

SOURCE: Limbach Holdings, Inc.

Copyright Business Wire 2021.

PUB: 03/25/2021 04:30 PM/DISC: 03/25/2021 04:30 PM

http://www.businesswire.com/news/home/20210325005929/en