LMB earnings call analysis

NASDAQ:LMB Q4 2025 Earnings Call Transcript Generated on 6/6/2026 Operator | Conference Operator: Good morning and welcome to the Limbach Holdings' fourth quarter and full year 2025 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I will now turn the conference over to your host, Lisa Fortuna of Financial Profiles. You may proceed. Lisa Fortuna | Host, Financial Profiles: Good morning, and thank you for joining us today to discuss Limbach Holdings financial results for the fourth quarter and full year 2025. Yesterday, Limbach issued its earnings release and filed its form 10-K for the period ended December 31st, 2025. Both documents, as well as an updated investor presentation, are available on the investor relations section of the company's website at LimbachInc.com. Management may refer to select slides during today's call and encourages investors to review the presentation in its entirety. On today's call are Michael McCann, President and Chief Executive Officer, and Jamie Brooks, Executive Vice President and Chief Financial Officer. We will begin with prepared remarks and then open the call to questions. Before we begin, I would like to remind you that today's comments will include forward-looking statements under the federal securities laws. Forward-looking statements are identified by words such as will, be, intend, believe, expect, anticipate, or other comparable words and phrases. Statements that are not historical facts, such as those about expected financial performance are also forward-looking statements. Actual results may differ materially from those contemplated by such forward-looking statements. A discussion of the factors that could cause a material difference in the company's results compared to these forward-looking statements is contained in LIMBOX SEC filings, including reports on 10-K and 10-Q. Please note on today's call, we were referring to non-GAAP measures. You can find the reconciliation of these non-GAAP measures to the most directly comparable GAAP measures in our fourth quarter 2025 earnings release and in our investor presentation, both of which can be found on LIMBOX Investor Relations website and have been furnished in the form 8K filed with the SEC. With that, I'll now turn the call over to President and CEO, Mike McCann. Michael McCann | President and Chief Executive Officer: Good morning, and welcome to our stockholders, analysts, and interested investors. We appreciate you joining us today. Yesterday, we reported our fourth quarter and full year 2025 results. But before I get into some of the business highlights, I want to recognize all the Limbach team members who deliver safe, quality-driven customer solutions. Our strategy is built on the foundation of great people, and this team delivered a record-setting year. I also want to comment on our announcement yesterday that we'll be relocating our headquarters to Tampa, Florida. The relocation of our headquarters to Tampa reflects the fact that a significant portion of our senior leadership team and nearly 40% of our corporate workforce are already based in Tampa, where our presence has grown substantially since establishing the corporate office in 2020. The move marks a milestone of the company's 125th anniversary year, And we look forward to the future as we continue to grow and strengthen our presence in Tampa. Now turning to our strong results. 2025 marked a record year of significant total revenue growth of 24.7%. Notably, it's the first year our revenue has grown substantially since 2020, when we began executing our strategic shift to ODR. Our ODR-GCR mix for 2025 was 75% ODR and 25% GCR. Right in the middle of our guidance range, and a meaningful improvement from 2024's mix of 67% ODR and 33% GCR. Total ODR revenue grew by 40.6%, with organic ODR revenue growth of 17%, reinforcing organic growth as a major driver of our success. Total gross margin was 26.2% for 2025, and 28.2% when excluding all of our acquisitions since 2021, demonstrating their legacy business gross margins remain stable when compared to 2024. We reported record full-year adjusted EBITDA of $81.8 million within our guidance of $80 to $86 million, and a 28.4% increase from 2024. We generated $71.9 million in cash from operations, excluding working capital, in 2025, with $21.4 million generated in Q4, reflecting our high rate of cash flow conversions. In December, we authorized a $50 million share reproach program. And finally, our balance sheet remained strong with only $24.6 million in net debt or a net debt to adjusted EBITDA ratio of 0.3 times. Turning to 2026, we are focused on three strategic core growth pillars, which include ODR and organic total revenue growth, margin expansion through evolved customer solutions, and scaling the business through acquisitions. Our first pillar is to grow ODR and organic total revenue. We expect our revenue mix between ODR and GCR to hold steady, but we focus on growing total revenue with ODR being the primary growth driver. Our strategy for growth is to design and combine national scale with local execution, allowing us to better serve mission-critical facilities. We're investing both at the local and national level to accelerate sales, leverage its genetic growth. We have supported both growth objectives by strategically positioning two seasoned senior executives on accelerating sales. One executive is focused on local sales, while the other is responsible for driving national relationships. We believe this strategy will be a key element to supporting our investments and driving growth. As we focus on growth, we continue to manage project risk and reward through careful selection based on project size and short life cycle. In Q3, we discussed in detail our various ODR revenue streams And as we mentioned, ODR revenue is broken down into two different categories. The first is fixed-price projects greater than $10,000, which represented approximately 73% of total ODR revenue for 2025, with an average ODR project size of approximately $240,000. The second category is recurring quick-burning revenue, which includes maintenance contracts, work orders for small, fixed-price jobs less than $10,000, and time material work. In the full year 2025, Our quick burning revenue represented approximately 27% of total ODR revenue. We have also expanded our GCR gross profit by carefully managing the risk and reward profile as it relates to product size and scope. The average GCR project for 2025 was only 2.6 million. Our second pillar is margin expansion through evolved customer solutions. We differentiate ourselves from the competition by being a single source provider for building ownership. capable of providing comprehensive lifecycle engineering solutions. In 2026, we plan to continue to expand our offerings in six differentiated customer solutions, including integrated facility planning, service maintenance, equipment replacements and retrofits, fuel equipment, mechanical, electrical, plumbing, and control or MEPC infrastructure upgrades, energy efficiency and decarbonization analysis and projects. Our strategy Our staff is being trained to bundle customer solutions and deliver long-term value to our clients. Each individual transaction may have a different margin profile, but the overall quantity of gross profit and the quality of the blended margin is carefully managed. From 2020 through 2025, our total gross margin for the legacy branch businesses has grown from 14.3% to 28.2%. In total gross profit margin, total gross profit dollars have decreased almost 50%. demonstrating that our teams are able to grow total gross profit while simultaneously enhancing margin. The third pillar is strategic M&A aimed at extending the reach of the Lombok brand, strengthening our market presence, and expanding our capabilities. Through targeted acquisitions, we seek to diversify our vertical market exposure and broaden our geographic footprint while adding new offerings to enhance our customer solutions. In 2026, we remain selectives, as we would expect to pursue one to three acquisitions to meet our return thresholds by expanding our geographic footprint and increasing our local service capabilities. Additionally, we are looking for companies that expand our six core customer solutions. We are particularly focused on companies that expand our integrated facility planning solution. Due to their deep involvement in the capital planning process, these companies tend to have national relationships in healthcare, data centers, and industrial manufacturing. We believe the synergies between these two types of deals will help us reach our long-term vision to be an indispensable building system solution partner, providing national reach with local presence. Turning to our last acquisition, Pioneer Power, where the integration is well underway. We have largely completed the first phase of our value creation process, centered around system integration. Next, we are focused on the second phase of our value creation, which is all about increased gross margin. Key strategic priorities in 26 will include negotiating T&M contracts, measuring margins by revenue size and type while setting specific goals, introducing Glimbox sales training and sales enablement resources, identifying cross-selling opportunities by leveraging our respective national account relationships, and aligning resources to most profitable accounts. We expect margin improvement at Pioneer to take shape throughout 2026. with exit margins higher than current levels as we start the second phase of our value creation process. We expect the gross margin improvement to continue for the next two to three years until Pioneer's margins reach alignment with the current business. Our record for improving margins of acquired companies is best demonstrated by our acquisition of Jake Marshall in December of 2021. At the time of purchase, the gross margin was approximately 13.4%. After four years of executing our value creation model, From gross benchmarking to establishing account-focused teams, Jake Marshall's gross margin increased to 28% for 2025. Today, Pioneer Power's gross margin is below the level where Jake Marshall was at the time of the acquisition. This is an indication of the meaningful value creation opportunity we have. Turning to the macro environment, we experienced positive demand improvement in the fourth quarter across all our verticals. Our institutional markets, healthcare, life science, and higher education rebounded after softness in the middle of last year. The government shutdown and the DC policy changes caused many of our customers to temporary pause activities. However, the subsequent recovery in these verticals allowed us to achieve 24% ODR organic revenue growth in Q4. I'll now make some specific comments on several of our key verticals. In our healthcare vertical market, many customers were spending their leftover budgets while also preparing 2026 normalized spending patterns during the fourth quarter. Due to the uncertainty of economic conditions in 2025, several national customers have started to engage us much earlier in their planning process. Our unique combination of professional service and installation expertise creates both speed to market and cost certainty advantages. As customers are planning their budgets now and given our early involvement in the design and planning process, We anticipate a softer start in 2026 with the revenue building throughout the year. As an example, in late December, one of our key national healthcare customers called us to help execute a critical infrastructure project. The engagement is worth approximately $15 million in contract value across three different hospitals in Florida. For this project, we are providing both program management and design-build services. They chose LIMBOC because of our demonstrated ability to seamlessly procure, design, and execute a complex project swiftly, whereas the engineering firm who performed the original assessment wasn't able to execute the project fast enough. The project expected to be designed in the first half of the year with work on site to begin in the second half of 2026. Shifting to the data centers, where we have two very strong emerging relationships with hyperscale data center owners. These relationships have been developed due to our successful delivery of projects out of the Columbus, Ohio location over the past several years. Given the traction we have achieved and future opportunities with these owners, we've decided to dedicate resources towards building a national vertical marketing focused on data center work. We believe we have the availability of resources and unique skill set to position ourselves thoughtfully in this vertical. As an example of our traction of the data center vertical took place in Q4, where we are awarded a specialty infrastructure project worth approximately $10 million in contract value. The scope of the project is to provide fabricated piping systems directly to the owner. This is the fourth project of this scope, and the owner has expressed interest in further expanding our relationship. We believe we are well positioned to see growth in this vertical in 2026 and beyond. In 2025, revenue from this vertical is less than 5% of total revenue. Our objective in 2026 is to increase vertical market diversity in the business, and expanding our data center market contribution is critical to achieving that objective. We see the opportunity for this vertical to represent a meaningful portion of revenue over time. In 2025, our industrial manufacturing vertical produced strong and steady results and was less affected by the DC policy concerns. Our recent acquisitions of Pioneer Power and Consolidated Mechanical help provide us with diversity, both from a geographic footprint and vertical market standpoint. Our work here is conducted primarily via time material shutdown work and small project work. We expect first quarter revenue in this vertical to also be soft due to spending seasonality that traditionally picks up in April. Our success in 2026 will be driven by our ability to accelerate sales and leverage our previous investment. We expect our revenue and earnings to be weighted to the second half of the year with growing confidence in the sales growth demonstrated by fourth quarter bookings of 225 million compared to 187 million in total revenue during the quarter, giving us visibility into 2026. Moving to our 2026 guidance, we expect revenue of between 730 to 760 million, implying year-over-year growth of 13 to 17%, adjusted EBIT of 90 to 94 million, implying year-over-year growth of 10% to 16%. Underlying that guidance, we have used the following assumptions. Total organic revenue growth of 4% to 8%. ODR organic revenue growth of 9% to 12%. We expect ODR as a percent of total revenue in the range of 75% to 80%, reflecting the stabilization of the mixed shift. Total growth margin of 26% to 27%. S&A expense as a percent of total revenue to be 15% to 17%, and free cash flow to be 75% of adjusted EBITDA for 2026, with significant cash shoots for operations in Q1 due to the timing of incentive compensation, insurance, and tax payments, with strong cash generation building during the remaining quarters of the year. As investors and analysts model 2026, it's important to note that our first quarter tends to be the slowest quarter of the year due to seasonality and customer spending patterns. We expect first quarter revenue to be similar to last year, with lower adjusted EBITDA due to higher SG&A in 2026. Additionally, we don't expect Q1 of 2026 to have the same gross margin write-ups of $900,000 that we had in Q1 of 2025. And as previously stated, we expect the second half of the year to be stronger than the first half. As our bookings momentum from last year converts into revenue, we expect revenue growth to accelerate in Q3 and Q4. With that, I'll turn it over to Jamie to walk through the financials in more detail. Jamie? Jamie Brooks | Executive Vice President and Chief Financial Officer: Our Form 10-K and earnings press release filed yesterday provide comprehensive details of our financial results. So, I will focus on the highlights of the fourth quarter and full year. All comparisons are for the fourth quarter and full year 2025, versus fourth quarter and full year 2024, unless otherwise noted. Starting with the fourth quarter, we generated total revenue of $186.9 million compared to $143.7 million in 2024. Total revenue growth was 30.1%, while ODR revenue grew 51.8% to $145 million. Of the total ODR revenue growth rate, 27.9% was from the acquisitions and 23.9% was organic. GCR revenue decreased 13% to 41.9 million, of which 26.1% was a decrease in organic revenue as designed as we continued our mix shift towards ODR, offset by 13.1% growth in revenue from acquisitions. ODR revenue accounted for 77.6% of total revenue for the fourth quarter, up from 66.5% in 2024. Total gross profit for the quarter increased 10.4% from 43.6 million to 48.1 million, reflecting the ongoing growth of our ODR segment. Total gross margin on a consolidated basis was 25.7% down from 30.3% in 2024, primarily driven by the impact of Pioneer Power. As we previously communicated, our acquisition integration strategy is focused on improving the acquired company's gross margin to align with our broader operating model over multiple years. ODR gross profit comprised 76% of total gross profit dollars, or 36.4 million. ODR gross profit increased 19.1%, or 5.8 million, driven by higher sales volume, partially offset by lower ODR segment margin of 25.1%, compared to 32.1% in the year-ago period. The decrease in segment margin was primarily attributable to Pioneer Power's lower gross margin profile. DCR gross profit decreased 10.2% or $1.3 million due to lower revenues. Gross margin increased from 26.9% to 27.8%, driven by our ongoing focus on higher quality projects. SG&A expense for the fourth quarter was $28 million an increase of approximately 2.3% from $27.4 million. The increase was primarily attributable to incremental costs associated with Pioneer Power and Consolidated Mechanical. Consolidated Mechanical was part of the company for one month in the fourth quarter last year, and Pioneer Power was not part of the company during the fourth quarter last year. As a percentage of revenue, SG&A expense decreased to 15% of total revenue as compared to 19.1% primarily due to the increased revenue from Pioneer Power. Interest expense increased 0.3 million to 0.8 million compared to 0.5 million in the prior quarter, driven by higher borrowings under the company's revolving credit facility to partially finance the Pioneer Power's acquisition, as well as higher financing costs associated with the larger vehicle fleet. Net income for the quarter increased 25% from 9.8 million to 12.3 million and earnings per diluted share grew 24.4% from $0.82 to $1.02. Adjusted net income grew 22.6% from $13.8 million to $16.9 million, and adjusted earnings per diluted share grew 21.7% from $1.15 to $1.40. Adjusted EBITDA for the quarter increased 30.8% to $27.2 million, compared to $20.8 million. Adjusted EBITDA margin was 14.6% compared to 14.5% in Q4 last year. Turning to cash flow, our operating cash inflow during the fourth quarter was 28.1 million compared to 19.3 million in the year-ago period, driven by higher net income in 2025, along with slight improvement in working capital. Free cash flow, defined as cash flow from operating activities, excluding changes in working capital minus capital expenditures, excluding our investment in additional rental equipment, was $21.1 million in the fourth quarter, compared to $16.6 million in Q4 last year, representing a $4.5 million increase. The free cash flow conversion of adjusted EBITDA for the quarter was 77.5% versus 79.9% last year. Now turning to the full year 2025. total revenue increased 24.7%, or $128 million, to $646.8 million from $518.8 million, primarily due to the acquisitions of Pioneer Power, Consolidated Mechanical, and Kent Island. Of the total percentage increase, acquisition-related revenue represented 21%, or $109.1 million, and organic revenue represented 3.6%, or $18.9 million. ODR revenue increased 40.6% or $140.2 million to $485.7 million with acquisition-related revenue representing 23.6% of the increase or $81.4 million, while organic revenue represented 17% or $58.8 million. GCR revenue decreased 7% or $12.2 million to $161.1 million. Organic revenue represented 23% of the decrease, or $39.9 million decline, as the company continued its strategic mix shift to ODR, offset by acquisition-related revenue growth of 16%, or $27.7 million. Total gross profit increased 17.4% to $169.3 million, compared to $144.3 million, and total gross margin was 26.2%. a decrease from 27.8% in 2024, primarily due to the impact of Pioneer Power's lower gross margin and total net project write-ups of $5.8 million recognized in 2024 compared to $1 million in 2025. ODR gross profit increased 20.5% or $22.1 million to $129.9 million from $107.8 million, while gross margin decreased to 26.7% from 31.2%, primarily due to the impact of Pioneer Power's lower margin profile and ODR-related project write-ups of 3.9 million recognized in 2024 that did not recur in 2025. GCR gross profit increased 8%, or 2.9 million, to 39.4 million from 36.5 million, and gross margin increased to 24.5% from 21.1% driven by the company's intentional focus on higher quality projects. SG&A expense increased by approximately $12.3 million to $109.5 million compared to $97.2 million in the prior year period. Of the increase, $9.3 million of the increase was attributable to incremental costs associated with Pioneer Power, Consolidated Mechanical, and Kent Island. Consolidated Mechanical was part of the company for only one month last year. Kent Island was part of the company for four months, and Pioneer was not part of the company during the entirety of last year. The remaining SG&A increase of $3 million is attributable to the existing business. SG&A expense increased primarily due to a $1.2 million increase in non-cash stock-based compensation expense and a $1.1 million increase in bad debt expense associated with the write-up of certain customer receivables that were deemed uncollectible. SG&A expense as percentage of revenue decreased to 16.9% compared to 18.7% primarily due to increased revenue resulting from the Pioneer Power acquisition. Interest expense increased $1.3 million from $1.9 million to $3.1 million due to higher borrowings under the company's revolving credit facility to partially finance the Pioneer Power acquisition, as well as higher financing costs associated with our larger vehicle fleet. Net income increased 26.5% to $39.1 million from $30.9 million, and diluted earnings per share increased 25.7% to $3.23 compared to $2.57 in the prior year. Adjusted net income increased 26%, to $54.5 million compared to $43.2 million, and adjusted diluted earnings per share increased 25.3% from $3.60 to $4.51. Adjusted EBITDA increased 28.4% to $81.8 million compared to $63.7 million, and adjusted EBITDA margin was 12.6% compared to 12.3%. Our operating cash flow for the full year was $45.7 million compared to $36.8 million in the prior year. Free cash flow, defined as cash flow from operating activities excluding changes in working capital minus capital expenditures, excluding our investment in additional rental equipment, was $70.1 million for 2025 compared to $52.3 million in 2024, representing a $17.8 million increase. the free cash flow conversion of adjusted EBITDA for the year was 85.7% versus 82.1% in 2024. As Mike mentioned, for full year 2026, we continue to target a free cash flow conversion rate of at least 75% of adjusted EBITDA and expect CapEx to have a run rate of approximately $5 million. At this time, we don't anticipate any additional investments in our rental fleet. Turning to our balance sheet, as of December 31st, we had $11.3 million in cash and cash equivalents and total debt of $35.9 million, which includes $10 million borrowed on our revolving credit facility, hedged at a rate of approximately 5.37%. As a reminder, at the end of June last year, we expanded our revolving credit facility from $50 million to $100 million in principal amount borrowings. On July 1st, we used a combination of cash and revolver proceeds of approximately 40 million to fund the Pioneer Power acquisition. During the quarter, we paid down the revolving credit facility, 24.5 million, to the hedged amount of $10 million. And as of December 31st, our total liquidity, defined as cash and availability on our revolving credit facility, was 96.3 million. With this expanded facility and our expected strong cash generation, Our balance sheet remains strong, and we believe we are well-positioned to support our continued organic growth initiatives, strategic M&A, and opportunistic share repurchases. That concludes our prepared remarks. Operator, you may begin the Q&A. Operator | Conference Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from the line of Chris Moore with CJS Securities. Please proceed with your question. Chris Moore | Analyst, CJS Securities: Hey, good morning, guys. Thanks for taking a couple. So, Mike, I might have missed a little bit of it. Can you talk a little bit more about the investment or specific steps you're taking to take advantage of the data center opportunity? Michael McCann | President and Chief Executive Officer: Yeah, absolutely. So one thing that's going to be, I think, really important to our strategy, and we started this last year as well, too, is really building three national vertical market teams. Healthcare, and in some sense, that's been our proof point. Industrial manufacturing and data center. And When we think about the way that customers buy, they buy some stuff locally, but I think from a national perspective and a capital planning perspective, it's a lot advantageous for us, even from a resource perspective. So from a data center market specifically, we've had some really good success in the Columbus, Ohio market with a few different customers. And we always like to prove things out before we really make sure that we go all in from an investment perspective, but As I referenced in the prepared remarks, it's our fourth project that we were recently awarded. And that customer and a couple customers are starting to tell to us, based on your availability of resources, your unique combination of engineered solutions with your ability to install and fabricate, we think we're really in a great position, not just in the Columbus market, but in other markets as well, too. And some of that will be overlap from a geographic footprint perspective, and some of that may be providing services just like we do in health care and other geographies as well, too. So we think it's a really good opportunity. We've been patient, and I think we're at a point now we want to dedicate some resources, and we hope this vertical becomes a meaningful portion of our revenue over time. Chris Moore | Analyst, CJS Securities: Got it. You could see that potentially in a few years that could be your number two vertical? Michael McCann | President and Chief Executive Officer: We're going to see how it goes. We think there's tons of potential, though. I mean, the spending of these customers – And we're really all in on these three verticals, healthcare, industrial manufacturing, data center, but we think it's also a great opportunity of an avenue from a diversity perspective as well, too. So we're pretty bullish on it. Chris Moore | Analyst, CJS Securities: Got it. In terms of the ODR organic guide, 9% to 12%, pioneer in terms of the back half of 26%, is there any – organic from Pioneer embedded in the 9% to 12%? Jamie Brooks | Executive Vice President and Chief Financial Officer: Yeah, so after the first half of the year, then it becomes part of our organics because the acquisition date was July 1 of last year. Chris Moore | Analyst, CJS Securities: Exactly. I just wasn't sure if you're assuming much growth from Pioneer. I'm just trying to get a sense in terms of how that business is going and if you assume some growth there. later in the year as part of that, as part of your 9% to 12%. Michael McCann | President and Chief Executive Officer: Yeah, no, just a couple things on Pioneer as well, too. Our focus, for sure, obviously we want to see growth in them, but I think the gross profit improvement as is equally, if not more important than really seeing from a revenue perspective. Several different things, we're kind of moving past the phase one, which is really that system integration, people, process, getting the accounting system switched over, and I think we're really focused, especially in the back half of the year from a gross profit perspective. A couple things that I'll really hit on that we're going to focus on is, number one, our ability to push resources towards their best account, look at metrics from a year-over-year perspective, revenue types, getting on our accounting system allows us to do this, utilization of sales resources as well as, too. So we're really looking to deploy the, you know, the full breadth of our value creation process. And really that's really getting into the phase two implementation. So in the back half of the year, where it's going to be our focus, it's still going to take some time. Got to go back and renegotiate some contracts. You've got to reintroduce yourself from a customer standpoint. So we've seen some real positive things and we're looking, I think not just in 26, but in 27 and 28 of really seeing that business get to the point where it matches the other legacy businesses from a margin perspective. We think there's a really good opportunity. Chris Moore | Analyst, CJS Securities: Perfect. I'll leave it there. I appreciate it, guys. Jamie Brooks | Executive Vice President and Chief Financial Officer: Thank you, Chris. Operator | Conference Operator: Thank you. Our next question comes from the line of Rob Brown with Lake Street Capital Markets. Please proceed with your question. Rob Brown | Analyst, Lake Street Capital Markets: Good morning. Good morning. Coming up on the organic growth, I know you've kind of gotten for a year, but what longer term, how do you see the organic growth in the ODR segment once you sort of get Pioneer integrated and and the business is running. What's sort of the long-term organic growth there? I think in the past you said it was 20%. Sure. Michael McCann | President and Chief Executive Officer: You know, last year we were at 17%. We had a strong finish in Q4. And this year we're guiding to 9 to 12. I think we're really kind of focusing only on 26 from that perspective, but we're also trying to think about what is our real normalized growth rate from an organic revenue perspective as well, too. And I think about our growth trajectory as we look forward. our ability to still get really strong local results. We're going to continue to invest and support our sellers that we've really invested in the last three years as well too. The other thing too is I think, you know, from a national vertical market perspective, our access to capital and driving different decision makers and being a national provider, that's going to be an avenue as well too. So we're really focused on that 26, but we're obviously looking forward to see what the normalized level is and what I would say also from an opportunity perspective too. Rob Brown | Analyst, Lake Street Capital Markets: Okay, got it. And then you talked about pretty strong bookings in Q4, kind of above the run rate. How is that compared to normal? And it seems like the environment's getting better. Maybe it sounds just how the bookings are coming in and what you see for the next. Michael McCann | President and Chief Executive Officer: Yeah, so one of the things that we've learned as we continue to transition the business, backlog is a factor, but sales bookings are really what we look from a business perspective In Q4, we booked $225 million versus $187 million in revenue in Q4, 1.2 ratio. I mean, anything in our opinion above one obviously shows that there is some forward trajectory in the business as well, too. So we like when the bookings are more than the revenue. We think we're starting to return the corner from a sales perspective. We've learned a lot from a sales perspective, and I think we're really starting to turn the corner. I think the other thing, too, that we saw a little bit in Q4 was, Our ability to get involved early. And sometimes that may be from customers that looked at strained budgets from 2025 and really starting to plan effectively. I would say specifically in the healthcare vertical market where definitely involved much more from a planning perspective. We're starting to understand where customers spend. I think probably the third different quarter in a row we reported kind of a national healthcare provider giving us multiple projects that were born out of facility assessments as well too. We think we're turning the corner, and we're looking forward, obviously, from continuing to look at that sales bookings versus revenue as kind of a key indicator. Rob Brown | Analyst, Lake Street Capital Markets: Okay, thank you. I'll turn it over. Operator | Conference Operator: Thank you. Our next question comes from the line of Jerry Sweeney with Roth Capital Partners. Please proceed with your question. Jerry Sweeney | Analyst, Roth Capital Partners: Good morning, Jamie, Mike. Thanks for taking my call. Good morning. Thanks. Just to stand on the topic of growth, obviously, earlier in January, you announced two new positions, EVP as sales and the head of national customer solutions. How does this sort of play into the strategy of growth? And it feels as though you're sort of maybe maturing into maybe a different position of growth. I just wanted to see how this all plays together and maybe drive some opportunity down the line. Michael McCann | President and Chief Executive Officer: Yeah, I think one thing that's really important from a messaging perspective, local and national, they're both really important to us. So, and we thought to ourselves, the best way to make sure that we're going to get the results is to take two proven executives and make sure that they're assigned specifically to that task. So one of them is going to be working on sales enablement. Really, how do we, we've invested about a hundred to 120 salespeople over the last three years. How do we support them with tools training? How do we help them actually deliver those sales? Um, and we really excited to have that particular focus. The other individual is focused on national accounts. Um, you know, in some organizations that may be two different roles for us, it's so important that we want to make sure we have two different executives working on it. Um, and I think the other thing too, it's not like these two were working kind of independently from that perspective. They have independent focus, but there's lots of synergies as well too. So I really, and I think that's why it's important, um, that we've got people that understand the business. So I think when we start to mature, having that ability to sell at the national level and from a national reach geographic and as well as being able to deliver from a local geographic footprint perspective, we think that's going to be one thing that's going to make us really differentiated and really continue to elevate where we're at as far as from a customer experience perspective. Jerry Sweeney | Analyst, Roth Capital Partners: How much of your sales has come from sort of a national account? opportunity or has it been much more on the local front? Michael McCann | President and Chief Executive Officer: I would say majority have been local. We've had lots of opportunities over the years from a national perspective, but we haven't had that focus. At the end of the day, the national customers, I don't care if it's data center, industrial manufacturing, or from a healthcare perspective, they want to see a seamless experience. And when they see a seamless experience, they're more willing to allocate more capital. So sometimes even from a local perspective, We can only take it so far with the local team. The top person at one of these mission critical facilities could be the facility manager. And all of those corporate decisions get made at a headquarters office. And we've had some success with healthcare that we feel like we can extend that. But I would say a lot of the sales have been local. Our opportunity is that we have a combination of local and national. Jerry Sweeney | Analyst, Roth Capital Partners: Gotcha. And then just one more question on acquisitions. You know, I think you're looking at maybe getting into different areas like integrated facilities opportunities. And there's a lot of companies out there that sort of fit in that space that maybe even purchase for higher multiples. So one question maybe with an A and B aspect, I mean, do you continue to go after these opportunities or will you have to pay up for these opportunities? And secondarily, does it make sense to maybe shift away from the pioneer powers where it takes multiple years to sort of integrate it into your system and go after acquisitions that are more like right down the middle, like a fully integrated facility type acquisition. So in other words, buying, paying up a little bit for an opportunity right in your wheelhouse versus maybe fixing one up. Michael McCann | President and Chief Executive Officer: Yeah, so we look at it as important. Our long-term objective is to be an indispensable part of building owners with national reach and local presence. So when you think about national reach from an acquisition perspective, our ability to invest in companies from an integrated facility planning perspective, they could be professional service companies. They're the ones that are going to have some of these relationships. They're going to be from a planning perspective. We think that's really important. When I think about the concept of local presence, you're still going to need that geographic footprint as well too. So I don't think it's a question of one or the other. It's a question of combining the two of them together and making sure these acquisitions fits with that long-term projective. Obviously, from a geographic footprint perspective, the multiple may be different than from an integrated facility planning perspective. But our end game remains the same. Buying companies, great companies with great people, they can ultimately achieve our long-term objective. and making sure there's a really good fit. We're not just buying assets and compiling them. We're making sure that they're really smartly integrated from a strategy perspective. Jerry Sweeney | Analyst, Roth Capital Partners: Got it. Michael McCann | President and Chief Executive Officer: I appreciate it. Thanks. Thanks, Jerry. Operator | Conference Operator: Thank you. Our next question comes from the line of Ryan Rofe with Stifel. Please proceed with your question. Ryan Rofe | Analyst, Stifel: Yeah, thanks. Good morning, everybody. Just following up on the national account discussion here, In the past, you kind of talked about going from 20 MSAs to 40 MSAs and then pursuing national accounts. Now it seems like you're leaning into it a little bit more heavily, but we haven't obviously hit that 40 MSA number. So can you talk about what's driving that change and just confidence level and being able to secure some of these despite not having a larger footprint? Michael McCann | President and Chief Executive Officer: Yeah, so... We've looked at it, and we've really tested our paradigms on this as well, too. So we've realized, I think, especially in the healthcare, and I think we're going to see the same thing in the data center, it's great that we're in a geographic location. It's almost an added benefit, but we can still provide a suite of services. As an example, we can still provide design-built services, even if we're not in a geographic footprint as well, too. So I think about, when we think about future MSAs, we're looking for overlap of national customers. Because not only can we provide high-level program management design build services, we get an added benefit from an installation process as well, too. So I think really we're still going to need geographic footprint. But if we can combine with a national account, national account presence, it's going to accelerate the opportunity within not only the acquisition that we purchase, but also from a national vertical market perspective. So we're going to be really strategic from those MSAs. Ryan Rofe | Analyst, Stifel: Got it. That's helpful. And then do you have a sense or can you give us a sense of how much of the growth in the guide is related to capitalizing on some of this national account opportunity? Or should we expect to see more of these benefits in 27? Michael McCann | President and Chief Executive Officer: I think for it to really take off, it's going to be 27. I think there's some built in, but I think it's really going to be this year is focusing on from a selling perspective. So some of this stuff You've asked questions about the healthcare jobs that we sold last year. Well, those are obviously going to revenue this year. But we're going to see some of it, I think, in the back half of the year. But I think the real opportunity from accessing capital, being able to burn the work, I think that's going to be as much of a 27, even more so than a 26 perspective. Ryan Rofe | Analyst, Stifel: Okay, that's helpful. And then just one clarifying question on the data center opportunity. Are you still focused on existing buildings here, or are you starting to get into new construction at this point? Michael McCann | President and Chief Executive Officer: We're focused on existing building. There's been situations where we've been able to provide infrastructure. From a carve-out perspective, a lot of the work is direct to owner. So I think that's one thing that we're super focused on. I think as we get into these relationships, we're going to make sure we're always getting the right risk-adjusted returns, too. I think we want to make the smart business decision as well, too. So we're going to look at the opportunity, and we're going to make sure that it makes sense with our strategy. Ryan Rofe | Analyst, Stifel: Appreciate it. I'll pass it on. Operator | Conference Operator: Thank you. And our next question comes from the line of Tomo Sano with JPMorgan. Please proceed with your question. Tomo Sano | Analyst, JPMorgan: Good morning, Mike and Amy. Good morning. Good morning. Thank you. Please provide an update on the integrations of Pioneer Power and share a concrete, some timelines, milestones for gross margin improvement. Additionally, what lessons have you learned from previous integrations, such as Jake Marshall, regarding driving a margin improvement at acquired businesses, please? Michael McCann | President and Chief Executive Officer: Yeah, absolutely. So there's a couple different pieces of information that we provided. One of them, I mentioned the prepared remarks, but it's also in slide 18 in our deck as well, too. So A couple things, you know, we're at the point from a Pioneer Power perspective, we're really wrapping up phase one integration. And we've learned from past deals, the sooner we can get through phase one, the better. And a lot of times that's directly related around the accounting system upgrade. We've, you know, we just want to get that out of the way. We want to accelerate that process. That allows us to see numbers. It's a big change management piece that we try to get through. So I think at this point, we're really focused from a phase two implementation perspective. So we try... We tried to provide some additional information that we thought would be helpful for investors, just to kind of show the trajectory from a Jake Marshall perspective. Jake Marshall at approximately the time of purchase was 13.4% gross profit. At the end of 2025, they were approximately 28.1%. So a tremendous increase in gross profit. One thing we learned from Jake Marshall is our phase one got pretty extended. We didn't really switch over the accounting system for 12 months, and we learned that we wanted to get that out of the way as quickly as possible. So that's one of the lessons learned we applied. The second lesson learned that we applied is we want to be in front of the customers as soon as possible. We want to listen to customers. We want to have joint meetings. We've already started that process from a Pioneer Power perspective last year, and we want that to build into additional. Part of the reason for that is we want to learn what their pain points are. What kind of value are we bringing? So we can then propose on different solutions that can drive margins as well too. Sometimes there's an opportunity to rate margins, but margins with value is much more better from a long-term customer perspective as well too. So we want to be, I think the focus, especially at the beginning of the year, hopefully we see impact in the second half of the year, is get in front of customers, making sure we're focused on them, listening to what they want, and then propose solutions that can drive margins hopefully in the back half of the year and really start to impact in 27. So when I look at the trajectory from a gross margin perspective, we kind of have that Jake Marshall example. Our objective, of course, is how can we accelerate that timeline but still implement those lessons learned? Tomo Sano | Analyst, JPMorgan: Thank you, Mike. And follow-up on gross margins. To achieve 26%, 27% gross margin guidance, what are the most material risks and uncertainties you're monitoring for 2026 and how you're preparing the business to navigate potential headwinds? Michael McCann | President and Chief Executive Officer: Sure. So we're very focused on making sure that we're smart from a risk perspective. So one of the things, too, if you look at both our owner direct fixed price projects greater than 10,000, still an average project size at 240,000. GCR projects are an average project size in 2025 of 2.6 million. So we really try to make sure that the projects have as short a duration as possible. That allows us to flex and ebb as well too. So that's always been very important from a strategy perspective. And I would say kind of maybe from a holistic perspective is a lot of our model really comes down to our ability to sell. That's why from a Q4 perspective, our ability to sell 225 million versus revenue in 187 million is to us as an important step. I think as we continue to sell work, we really want to evaluate from a risk perspective as well, too. So it's a careful balance, but those are probably the two things that we really look at and are always looking for opportunity to improve gross margin. Tomo Sano | Analyst, JPMorgan: Thank you. I appreciate it. Thank you. Operator | Conference Operator: Thank you. And we have reached the end of the question and answer session, and I'll turn the call back over to Mike McCann for closing remarks. Michael McCann | President and Chief Executive Officer: In closing, our strategic priorities for 2026 are the following. ODR organic revenue growth and total revenue growth, margin expansion through evolved customer solutions, smart capital allocation, scale through acquisitions. Over the past several years, the company has transitioned from a typical E&C contractor with single-digit EBITDA margins to a predominantly ODR-based platform with strong free cash flow conversion, operating with very minimal leverage. The structural shift is largely complete, and our focus is now on growth. Every acquisition since 2021, Jake Marshall, Acme Industrial, Industrial Air, Ken Island Consulting Mechanical, and Pioneer Power was sourced on a proprietary basis and was strategically aligned with our specialized value approach, cultural fit, and niche expertise across our verticals. All of our acquisitions were underwritten at multiples of five to six times adjusted EBITDA, and with the operational improvements we make, the ultimate multiple paid is lowered by the growth in EBITDA. Through a repeatable playbook, we improve margins and use resulting cash generation, deleverage, and redeploy capital. The company has expanded its adjusted EBITDA margin from 4.4% to 12.6% since 2020, and our leverage sits at just 0.3 times. And we maintain nearly 100 million in liquidity, all while meaningfully increasing the quality and margin of the business. At Limbach, we're building a long-term business model focused on delivering durable value over time. We bring a unique combination of engineered expertise and direct execution with building ours. Through long-term consultative relationships, we help our customers deliver multi-year capital plans that extend beyond traditional backlog. We believe this differentiated approach positions us well for sustained growth and shareholder value creation. On March 22nd through 24th, we're attending the Roth Conference in California, and we hope to see some of you there. Thank you again for your interest in Limbach, and have a great day. Operator | Conference Operator: This concludes today's conference and you may disconnect your line at this time. We thank you for your participation. Have a great day. jsPDF 3.0.3 D:20260606090217-00'00'

NASDAQ:LMB Q3 2025 Earnings Call Transcript Generated on 6/6/2026 Operator | Conference Operator: Good morning and welcome to the Limbox Holdings third quarter 2025 earnings conference call. All participants are in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. I'll now turn the conference over to your host, Lisa Fortuna of Financial Profiles. Lisa Fortuna | Host, Financial Profiles: You may proceed. Good morning, and thank you for joining us today to discuss Limbach Holdings' financial results for the third quarter of 2025. Yesterday, Limbach issued its earnings release and filed its Form 10-Q for the period ended September 30, 2025. Both documents, as well as an updated investor presentation, are available on the Investor Relations section of the company's website at LimbachInc.com. Management may refer to select slides during today's call and encourages investors to review the presentation in its entirety. On today's call are Michael McCann, President and Chief Executive Officer, and Jamie Brooks, Executive Vice President and Chief Financial Officer. We will begin with prepared remarks and then open the call to questions. Before we begin, I would like to remind you that today's comments will include forward-looking statements under federal securities laws. Forward-looking statements are identified by words such as will, be, intend, believe, expect, anticipate, or other comparable words and phrases. Statements that are not historical facts such as those about expected financial performance are also forward-looking statements. Actual results may differ materially from those contemplated by such forward-looking statements. A discussion of the factors that could cause a material difference in the company's results compared to these forward-looking statements is contained in LIMBOC's SEC filings, including reports on Form 10-K and 10-Q. Please note that on today's call, we will be referring to non-GAAP measures. You can find the reconciliation of these non-GAAP measures to the most directly comparable GAAP measures in our third quarter 2025 earnings release and in our investor presentation, both of which can be found on LIMBOC's investor relations website and have been furnished in the Form 8-K filed with the SEC. With that, I'll now turn the call over to President and CEO, Mike McCann. Michael McCann | President and Chief Executive Officer: Good morning. Welcome, everyone. Thank you for joining us today. At Limbach, we play a critical role as an enterprise provider of building system solutions, ensuring the reliability and continuity of mission-critical infrastructure across our customers' facilities. We're focused on industries with long-term durable demand where facility assets simply cannot fail. We believe our distinct capabilities position us to deliver sustained growth and attractive risk-adjusted returns. As a reminder, our growth strategy is underpinned by three core pillars. The first pillar is scaling our owner-direct relationships, our ODR business. Here we're focused on working in partnership with owners of mission-critical facilities and existing building environments. This work consists mostly of routine maintenance, emergency repairs, small capital projects, and larger retrofit and renovation projects. Some of this work is contractual, and some is predictable given the age and complexity of mechanical systems. The second pillar is enhancing profitability and increasing wallet share through the introduction of expanded product and service offerings. We have strong and growing relationships with our owner-direct customers built on daily performance, trust, and our vast knowledge of their critical building systems. As a result, there's a win-win opportunity for us to expand our service offerings to these customers by introducing new capabilities that solve a greater breadth of issues for owners. As our capability expands over time, we can deliver more value to both the owner and LIMBOC. Unlike traditional E&C firms that rely on reactive bidding in response to a project, we're seeing these facilities every day providing solutions. By working directly with owners, we have a better grasp of risk and value. In order to further leverage these relationships, we're formalizing a scalable structure by building a proactive sales team that positions Limbach as a building system solutions provider. The third pillar of strategic M&A aimed at extending the reach of the Limbach brand. strengthening our market presence, and expanding our capabilities. Through target acquisitions, we seek to diversify our vertical market exposure and broaden our geographic footprint, while adding new products and offerings that align well with our ODR value proposition. For the past couple months, we've received a number of questions from investors who want to better understand our various revenue streams, particularly in the ODR segment. So let me walk through the ODR business and break down the sources of our revenue. There are three quick-burning revenue streams, maintenance contracts, work orders, and timing material, or T&M work. Maintenance contracts generate predictable recurring revenues that are usually smaller in nature but which have strong margins. Our maintenance contracts run one to three years in length prior to renewal and are built around routine service for specific equipment and customer sites. Work orders and T&M work often result from problems identified during scheduled maintenance or from emergency repairs or opportunistic upgrades of system components. In some parts of the market, this is referred to as break-fix work. Any one individual work order may not be predictable, but in a large, complex facility, there's generally an estimatable amount of this kind of work in any given year. It's usually quick-burning and completed on an on-demand basis or as directed basis. It can be priced based on labor rates and material markups that are pre-negotiated with customers in anticipation of needing to act fast when the work happens or as small fixed-price jobs less than 10K. For example, large industrial customers usually schedule seasonable shutdowns when their facility reduces production and output repairs maintenance. This provides us the opportunity to execute a high volume of this type of small work in a short period of time. Because T&M work is performed on what's essentially a costless basis, the risk profile is different than, say, a large fixed-price project. Taken together, all these work streams account for approximately one-third of the ODR revenue for year-to-date 2025. Irrespective of the specific structure of the revenue, when executing this kind of work, LIMBOK most often becomes an extension of the facility staff regardless of the contractual relationship. Fixed-price projects greater than 10K in our ODR segment can range from quick-burning work that is booked and executed in the same month or quarter to projects that typically last less than a year. They're usually performed within existing facilities or typically tied in some way to an existing customer relationship and often a maintenance and service relationship. This means we're operating in an environment where we know the systems, the sites, and the customers. This preexisting knowledge reduces uncertainty, enhances our ability to manage outcomes. As a result, the risk profile of these ODR projects is very different than GCR projects. Additionally, the average ODR project size is approximately 245,000, as compared to the average GCR project size of approximately 2.9 million. Both of those are year-to-date 2025 data points, This ODR project work accounts for approximately two-thirds of our ODR revenue. So at a high level, our intentional pivot towards older direct relationships has reshaped our revenue mix. It's become a more diversified and lower risk with more margin consistency. We believe this mix should provide a greater resilience for economic cycles and reflects our focus on stability, predictability, and long-term value creation. On a consolidated basis, ODR revenue as a percentage of total revenue has steadily increased since 2019. We began to shift our strategies. ODR represents 76.1% of total revenue in third quarter 2025 and 74.1% on a year-to-date basis in line with our targeted goal between 70% to 80% for the year. Going forward, the strategy continues to be focused on ODR growth and a reduction in GCR revenue. Keeping in mind, businesses we acquire at the time of acquisition typically do not have an evolved ODR strategy as one box. Whether we're speaking about an acquired business or a legacy business, this strategy is driving margin expansion and earnings growth over time, while also we believe reducing our overall risk profile. Starting to backlog, the strategic shift from TCR to ODR means that a larger percentage of our revenue is now generated from quick-burning, shorter-term projects that can be booked and completed within the same quarter, and therefore is not captured in backlog at quarter end. As a result, backlog alone is no longer as predictable a leading indicator of future revenue as it was in 2018 or even 2022, with a heavy GCR focus, which is typical for E&C companies. Occasionally, we will book projects with building owners that spend multiple quarters. This work is captured in the backlog. However, it's a smaller portion of the overall revenue mix, and it can experience quarter-to-quarter fluctuations. So today, looking only at backlog, we'll miss a large percentage of our current revenue streams. Earlier, I described our work order and T&M revenue streams and highlighted the industrial shutdown work we engage in. Most of these revenue streams never get captured or included in a quarterly backlog number, and they represent a far larger number than they did several years ago. Instead of the large, high-risk, multi-year projects that were a core element of our legacy business model, we're now focused on building a diversified business with multiple revenue streams and what we think is durable demand. Selective M&A remains a cornerstone of our growth strategy, enabling us to expand both our geographic footprint and deepen market share within existing regions and to expand our product and service offerings. Over the last couple of years, our focus has been broadening on our footprint in ways that enhance diversity and position us to serve national customers. Our approach has always been conservative, and we've remained disciplined and selective in what we pursue, even when the M&A market has gotten overheated. To date, we've acquired six high-quality cash flow-generating businesses at fair values and have used risk-mitigating structures where possible. We believe the Limbach brand and our unique business model positions us to engage with great companies that over time we can reposition to align with our owner-focused vision. After closing, our goal is to improve margins further by implementing our value creation processes. Our main focus in every deal is to expand the quality of gross profit through benchmarking, building a proactive sales team, and leveraging operational standards. Using the same tools that transformed our business units over the last six years led to much higher margins at lower risk. We believe we can expect better results at acquired companies than what we underwrote at the time of the closing of these transactions. At Pioneer Power, our most recent acquisition, we're actively executing the first phase of our value creation strategies. During diligence, we identified improving Pioneer Power's lower EBITDA and gross margins as a great opportunity for the intermediate term. We are now transitioning Pioneer Power to Limbach's accounting system and operating systems. Once complete, we can start to focus on improving the quality of gross profit and providing access to other parts of the Limbach operating platform. We've got a talented team in the Twin Cities. We want to make sure that we deploy all the tools at our disposal to support them and to allow the business unit to flourish. We evaluate a large volume of acquisition opportunities each year and intentionally walk away from the majority of them. Under my leadership, we'll never buy a business just to do a deal. Our track record reflects discipline underwriting, strategic fit, and a focus on asymmetrical returns. There is a meaningful upside to our company if we're right and a limited downside if we're wrong. There are times we lose to competitors willing to pay higher multiples, and we're perfectly comfortable with that. Next, I'll provide an overview of the environment in our core vertical markets. Healthcare has long been one of our strongest, most strategic end markets across all operating regions. Given the mission-critical nature of the healthcare facilities, customers can defer repairs briefly, but delays in capital spending rarely extend beyond a single quarter. While some customers experience temporary delays during the summer months in funding both operating and capital expenditures, we're now seeing spending patterns normalize as the year progresses. Our sales teams have engaged with core customers and emphasized the importance of long-term planning. Increasingly, we're hearing that cost certainty is more important to our customers than simply achieving the lowest cost. This can be achieved by implementing proactive programs, which help avoid reactionary spending and minimize risk to business operations caused by building system downtime. On our latest earnings call, we shared that a national healthcare owner engaged us to conduct facility assessments across 20 locations. In Q3, this initiative has already translated into $12 million in capital projects at four sites. We'll serve as a design builder for these energy infrastructure projects. Three of which are outside our current geographic footprint. For those out-of-market projects, we'll lead budgeting, design, and procurement, and utilize a network of subcontractor partners where necessary. In industrial manufacturing markets, our customers continue to execute seasonal shutdowns and facility upgrades in order to optimize the production of their plants and facilities. During the quarter, both Pioneer Power consolidated mechanical benefits from this type of activity, which is a core element of their local business models. In the data center market, Limbach remains focused on supporting hyperscale operators through existing building projects and specialized services, primarily in the Columbus, Ohio market. In Q3, we provided specialty fabrication services to one of our customers, enabling on-site contractors to concentrate on their core workloads while we offered supplemental support. That arrangement provided Limbach with what we think is the optimal balance of risk, return, and resource allocation. While our current footprint and risk profile limits the scale of data center work, We see meaningful growth potential through our national sales efforts and future geographic expansion through strategic acquisitions. In the life science and higher education markets, some of our higher education clients have adopted a cautious approach to spending during ongoing policy uncertainty in Washington, D.C. While the need for our services remains essential to maintaining the mission-critical facilities, many temporary pause capital projects. Encouragingly, these clients have begun communicating anticipated spending needs for the coming year, and we are proactively aligning the resources in preparation for ramp-up. One major client has already requested full-time technician support beginning in January. In the cultural entertainment part of it, we continue to see consistent spending from our key customers. Our recent involvement in capital planning discussions provided valuable insight into some clients' 2026 budgets. Notably, our largest customer in this segment has shared plans for significantly expanding capital and operating budgets next year. They've invited us to review their prospective project list and provide input on the work we'd like to pursue, allowing us to productively plan and allocate resources for 2026. Next, I'll provide an update on sales and marketing initiatives. For the past three years, we've made deliberate investments in building our sales team, which has resulted in a higher SG&A relative to many of our E&C peers. Our training efforts are focused on equipping the team to anticipate owner challenges and craft solutions that are difficult to commoditize. We believe this investment will soon begin to yield measured results, both by leveraging SG&E more effectively and by enhancing the quality and consistency of gross profit. As we head into Q4, our priority is to deepen sales training to ensure a strong start to 2026. In many cases, we're not competing against local contractors. Instead, we're working directly for owners in a proactive capacity. helping them anticipate issues and plan their budgets accordingly. A recent example from Florida illustrates this approach well. Over the past two years, we've supported a $25 billion annual revenue healthcare customer with emergency repairs and small capital upgrades. During a routine inspection of the main cooling feed, our on-site account manager identified signs of deterioration. We conducted non-destructive testing and confirmed the piping was on the verge of failure. In response, we developed a proposal that clearly outlined the ROI and presented it to the facility manager, who then escalated to the CFO and the chief medical officer. In Q3, the project was funded, and we were awarded phase one of the repair. This is a prime example of a capital project where we weren't competing for the work. Instead, we earned it by identifying the issue early, presenting a compelling data-backed justification for the investment. One of our key differentiators was ability to offer professional services, including MVP engineering. facility assessments, program management, and commissioning. These services are particularly attractive to national customers who can leverage our domain experience even in markets where we might not have field execution capabilities. These services, along with program management, are a key driver of margin expansion. During the quarter, we had one of our national healthcare customers engage us to analyze a hospital in New Mexico, both from a cost and engineering perspective, as they were considering making a substantial investment in the facility. This initial research has the potential to become a design-build infrastructure project. We find that customers appreciate our ability to provide an engineered solution that we can also build. While currently our professional service resources are dedicated to national healthcare owners, in the future we're looking to expand these capabilities into our data center and industrial manufacturing vertical markets. As we broaden our services portfolio, which includes the expansion of our professional services and solutions-based selling, we see a path to achieving long-term gross margins in the 35% to 40% range, driven by two key dynamics. First, our ability to deepen customer relationships by shifting from reactive transactional sales to proactive consultative solution sales. This approach enables us to build long-term operating capital programs that are tailored to solving our customers' needs rather than competing solely on price. Second, our ability to bundle offerings creates margin-layering opportunities. For example, an infrastructure project may include a rental coupon, allowing us to mark up both individual elements and the overall project cost. These strategies position us well to deliver sustainable growth at attractive margins. Moving to guidance, we are reaffirming our 2025 guidance of total revenue in the range of $650 to $680 million and adjusted EBITDA of $80 to $86 million. Of note, we have made some updates to our underlying assumptions used to model 2025 guidance to better reflect current market conditions, project timing, and operational performance trends. These updates influence our outlook and are incorporated into the public issue guidance ranges for total revenue and adjusted EBITDA. As I mentioned earlier, we are on track for total ODR revenue to be 70% to 80% of total revenue. Total ODR revenue growth is expected to be 40% to 50%, with ODR organic revenue growth of 20% to 25%. Total organic revenue growth is expected in the range of 7% to 10%, from 10% to 15% previously discussed, as we originally anticipated a more positive mix shift towards ODR than GCR. Pioneer Power's revenue performance this quarter exceeded our initial expectations. While Pioneer Power's current margin profile differs from Livox's consolidated performance, we're actively integrating Pioneer into Livox's platform, and we have a path to implement operational and commercial enhancements that we expect to expand margins over time. Because of the higher revenue contribution of Pioneer, Total gross margins are expected to be 25.5% to 26.5%, from 28% to 29%. Additionally, SG&A as a percentage of total revenue is expected to be between 15% to 17%, from 18% to 19%, primarily due to the higher revenue contribution. Now I'll turn it over to Jamie to walk through the financials. Jamie Brooks | Executive Vice President and Chief Financial Officer: Our Form 10-Q and earnings press release filed yesterday provide comprehensive details of our financial results so I will focus on the highlights for the third quarter. All comparisons are third quarter 2025 versus third quarter 2024 unless otherwise noted. We generated total revenue of 184.6 million compared to 133.9 million in 2024. Total revenue growth was 37.8% while ODR revenue grew 52% to 141.4 million. Of the total ODR revenue growth of 52%, 39.8% was from acquisitions and 12.2% was organic. GCR revenue increased 5.6% to 43.2 million, of which 25.1% was growth from acquisitions, offset by an organic revenue decrease of 19.5%, which is as designed as we continue our mix shift towards ODR. ODR revenue accounted for 76.6%, of total revenue for the third quarter, up from 69.4% in Q3 2024. Total gross profit for the quarter increased 23.7% from 36.1 million to 44.7 million, reflecting the ongoing growth of our ODR segment. Total gross margin on a consolidated basis for the quarter was 24.2%, down from 27% in 2024, driven by the lower gross margin profile of Pioneer Power revenue. Our strategy with acquisitions is focused on improving the acquired company's gross margin to align with our broader operating model over time. ODR gross profit comprised approximately 80% of the total gross profit dollars, or $35.7 million. ODR gross profit increased $6 million, or 20.3%, driven by higher sales volume partially offset by lower ODR segment margins of 25.2% compared to 31.9% in the year-ago period. The decrease in segment margins was primarily attributable to Pioneer Power's lower gross margin profile. DCR gross profit increased $2.5 million, or 39.3%, due to higher margins of 20.8% compared to 15.8%, driven by our ongoing focus on higher quality projects. SG&A expense for the third quarter was $28.3 million, an increase of approximately 19.3% from $23.7 million. This increase includes SG&A associated with Pioneer Power, Kent Island, and Consolidated Mechanical, where Kent Island was part of the company for only one month in the third quarter last year, and Pioneer and Consolidated Mechanical were not part of the company during the entire of the third quarter last year. As a percentage of revenue, SG&A expense decreased 15.3% as compared to 17.7%, primarily due to the increased revenue in the third quarter of 2025 provided by Pioneer Power. Adjusted EBITDA for the quarter was $21.8 million, up 25.6% from $17.3 million in Q3-24. Adjusted EBITDA margin was 11.8% compared to 12.9% in Q3 last year. Net income for the quarter increased 17.4% from 7.5 million to 8.8 million, and earnings per diluted share grew 17.7% from 62 cents to 73 cents. Adjusted net income grew 16.4% from 10.9 million to 12.7 million, and adjusted earnings per diluted share grew 15.4% from 91 cents to $1.05. Turning to cash flow, our operating cash inflow during the third quarter was $13.3 million compared to $4.9 million during the third quarter last year, primarily due to the timing of accrued expenses offset by the timing of billings that impacted changes in working capital. Free cash flow, defined as cash flow from operating activities excluding changes in working capital minus capital expenditures, excluding our investment in additional rental equipment, was $17.9 million in the third quarter compared to $13 million in Q3 last year, representing a $4.8 million increase. The cash flow conversion of adjusted EBITDA for the quarter was 82% versus 75.3% last year. For full year 2025, we currently continue to target a free cash flow conversion rate of at least 75% and expect CapEx to have a run rate of approximately 3 million. This amount excludes an additional investment of 3.5 million in rental equipment for 2025, of which 2.1 million occurred in the first nine months of the year. Turning to our balance sheet, as of September 30th, we had 9.8 million cash and cash equivalents and total debt of 61.9 million, which includes 34.5 million borrowed on a revolving credit facility, of which 10 million is at a hedge rate of an applicable margin plus 3.12%. As a reminder, at the end of June, we expanded our revolving credit facility from $50 million to $100 million. On July 1st, we used a combination of cash and an additional drawdown of approximately $40 million to fund the Pioneer Power acquisition. During the quarter, we paid down the revolving credit facility $17.3 million, and as of September 30th, our total liquidity defined as cash and availability on our revolving credit facility, is $70.3 million. Additionally, we intend to deploy free cash flow to continue to reduce our borrowings under the revolving credit facility. With this expanded facility and our expected cash generation from the business, we believe our balance sheet remains strong, and we believe we are well positioned to support our continued growth initiatives and strategic M&A transactions. That concludes our prepared remarks. I'll now ask the operator to begin Q&A. Operator | Conference Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, while we poll for questions. Thank you. Our first question comes from the line of Chris Moore with CGS Securities. Please proceed. Chris Moore | Analyst, CGS Securities: Hey, good morning, guys. Thanks for taking a couple. Good morning. So it looks like $47.3 million of Q3 revenue is acquisition-related, $37 million of that ODR, 10.3 GCR. Can you give us a sense in terms of how much revenue Pioneer contributed to that $47 million and the split between ODR and GCR within Pioneer? Sure. Michael McCann | President and Chief Executive Officer: Yeah, the Pioneer Power, they continue to produce, I think, even better than we thought they would produce. So we're thinking by year end, the contribution for the second half of 2025 is closer to actually $60 million. Have really weighted from an owner direct side as well, too. And I think a lot of that strong contribution is from the industrial segment as well, too. Some shutdown work, strong customers and brand, which is always nice to validate after we've had the acquisition as well, too. I think the other thing, too, even from a margin perspective that we're really looking forward to from a pioneer perspective is the opportunity. We see a lot of good, solid foundation from a pioneer power perspective. But at the same time, I think as we've right now, we're in the process of transitioning their finance and operating systems. But we already see signs of our ability to not only benchmark their gross profit, but to look for opportunities as well, too. Chris Moore | Analyst, CGS Securities: Got it. So the $60 million you're talking about for the second half, it looks like the bulk of that is in ODR. Am I looking at that correctly? Yeah. Yeah, you are. Okay. And so just I got it that the gross margins should be coming up there. Why are they within their ODR segment? Why are they lower at this point in time? Do they do different work for clients? Are they focused on on a different vertical. Just any thoughts there? Michael McCann | President and Chief Executive Officer: Yeah, it's very interesting. You know, we've seen one of the main opportunities we look at with all our acquisitions is increase of margin. So this is a common playbook that we see. And a lot of times it comes down to they run a really good business, they have relationships, and it's a matter of understanding benchmarking as much as anything. Now that we've got, even from an industrial space or even from a other contracts that we purchase, we always take a look at it from a margin perspective. A lot of times that's eye-opening as well, too. I think the other piece of it, too, is how do they go to market? They're going to market from a branding reputation perspective, but one of the key elements that we add to is a proactive sales team. A lot of times that makes a difference. At the end of the day, it's a matter of taking great customer relationships and a brand, understanding there's four or five triggers that allow us to expand margins over time. Even And we've looked at it not just from Pioneer Power. Pioneer Power obviously is a bigger contributor, but even from the other acquisitions, it's always the same elements of overtime. It takes time, but I would say it's still the same playbook, and we see lots of opportunity. Chris Moore | Analyst, CGS Securities: Got it. Very helpful. Maybe just the last one. SG&A as a percentage revenue, 15.3% versus 18.7% in Q2. 15. the target range is coming down. Is it reasonable to think that SG&A as a percentage of revenue would tick up a bit in 26 versus the 15 to 17 that we're talking about in 25? Michael McCann | President and Chief Executive Officer: Yeah, the big piece of that SG&A reduction was due to the different profile from Pioneer of lower gross profit, but also lower of SG&A as well, too. There's some investments that we're going to need to make going into 2026, and that's You know, not only from a Pioneer and other acquisitions, but also from an overall business as well, too. Jamie, anything you want to comment on there? Jamie Brooks | Executive Vice President and Chief Financial Officer: Yeah, because part of it, too, gets – I mean, they have a low rate, excuse me, this period for the fiscal year. But going into next year, too, as Mike said, looking at that specifically around Pioneer, that proactive Salesforce piece of it. So we've not given good guidance yet for the next year. Chris Moore | Analyst, CGS Securities: Fair enough. I appreciate it, guys. I'll jump back in line. Thank you, Chris. Operator | Conference Operator: Thank you. Our next question comes to the line of Brian Brophy with Steeple. Please proceed. Brian Brophy | Analyst, Steeple: Thanks. Good morning, everybody. Appreciate all the additional disclosure here. When I try to, I guess, back out PPI from ODR, it looks like gross margins kind of on the core business were down a little bit from a year ago. Is that correct? And can you give us, I guess, a sense of the magnitude and what the driver was? Michael McCann | President and Chief Executive Officer: You know, from a margin perspective, I'll let Jamie answer that from the financial exact number perspective. But, you know, our margins do end up fluctuating from a quarter-to-quarter basis. And I think it just depends on the mix of work that may be within the quarter. And, you know, one thing that you pointed out, even as we mentioned the script, is that combination of one-third, two-thirds that essentially goes through the business as well, too, where one-third is that quick-burning work and two-thirds of the owner direct revenue is fixed-price projects that are of average size year-to-date of $245,000. So at the end of the day, nothing different from it's more of dynamic of the quarter-to-quarter mix of whether it's that quick-burning or it's fixed-price projects. Jamie Brooks | Executive Vice President and Chief Financial Officer: Yeah, I'm just going to reiterate that. Excuse me. Yeah, definitely in line. It'll fluctuate quarter to quarter based on the mix, and it's really the impact of the PPI margin for this quarter. Brian Brophy | Analyst, Steeple: Okay. Thanks. And then can you give us a sense on ODR organic growth in the first half of the year? I guess the 20% to 25%. guidance for 2025 seems to imply an acceleration in the fourth quarter. I just want to understand if that is accurate and what's driving that acceleration. Michael McCann | President and Chief Executive Officer: Yep. Year to date, we're 14.4% organic ODR. And we've talked about a range of 20 to 25% for a full year. So that does imply some acceleration. A couple things that we're really looking at, even from a Q4 perspective, continuing quick burning work from a revenue perspective. Budgets that need to be spent by year end. A lot of people have delayed that OpEx spend in their position right now where they have to spend those dollars. Small projects that are turning. And I think that's also a result of that sales team. You know, the last three years we've invested in the sales team. The recent sales team we've invested in that we hired in Q4 and early Q1, it's been about nine or 12 months. We've been in position with customers and that allows us to get visibility kind of looking into Q4 from that perspective. Brian Brophy | Analyst, Steeple: Okay. That's very helpful. And then in your opening comments, you mentioned the $12 million of capital projects that were awarded from this facility assessment award that you talked about last quarter. Do you anticipate that potentially driving further awards, or do you think that's kind of the extent of the opportunity, an additional follow-on awards from these facility assessments? Michael McCann | President and Chief Executive Officer: Yeah, this is really exciting. So a couple of things that we've learned through our evolution, a lot of times in local relationships, the relationships will start with a maintenance project or really quick turning work. On the national side of things, we've really started with healthcare. We're thinking about data centers and industrials. We kind of expand going forward. A lot of times that work starts with professional services, facility assessments, engineering. It's a repositioning of that ultimate entry point. And those customers are very much from a cost certainty standpoint. quality consistency type perspective um so we've got a lot of these national relationships that we've started to and they typically do start with that facility assessment ultimately and then we come up with a pro forma so that particular opportunity those 20 assessments turned into 12 million dollars of projects over four different sites three of which were outside of her geography one that's in so i think i look going forward we're exciting about the opportunity from multiple customers for multiple assessments, so that being kind of a runway for us to have another avenue of work that comes in. I think another interesting thing as well, too, is it's kind of we're going to be a cross-section of having those local maintenance and service type agreements, those quick project agreements, as well as kind of an – as well as the national relationships, and the two of those meeting together are also a big opportunity for us as well, too. Brian Brophy | Analyst, Steeple: Thanks. Appreciate the color there. Last one for me. Past three years, you've talked about hiring about 40 salespeople a year. Curious how you're thinking about investing in the sales staff this year relative to kind of the prior pace. Michael McCann | President and Chief Executive Officer: Yeah, so it's interesting. I think we're definitely looking at, as we go into every year like we've done the last three years, from a sales staff perspective, I think we've made a lot of hires, over about 120 hires over that period of time. I think we're continuing to make sure that we're supporting our sales staff. I think that's going to be a big piece of next year from a sales enablement perspective as well, too. What resources can we give them to make them successful? How can we connect dots for them? I think that'll be a big focus going into next year as well, too. So it's almost as much sales enablement next year as much as traditional sales staff. We also are looking forward to production as well, too. It takes a long time to get sales staff up and running, but Whether it's professional services, whether it's data analysis, whether it's financial analysis that we do for customers, those are the sort of things going into next year that we're really excited to make sure that we're making our sales staff as successful as possible. Brian Brophy | Analyst, Steeple: Thanks, everybody. I'll pass it on. Operator | Conference Operator: Thank you. Our next question comes from the line of Rob Brown with Lake Street Capital. Please proceed. Rob Brown | Analyst, Lake Street Capital: Good morning. Congratulations on all the progress. Kind of back to the organic growth, how do you think about the longer-term organic growth? The guidance tweaked it down a little bit this quarter, but what do you sort of think of as the long-term organic growth and what needs to happen to kind of get there? Michael McCann | President and Chief Executive Officer: Yeah, so from an organic growth perspective, and of course, it's what we're doing from a GCR perspective, but also from an owner-direct perspective. Let me touch on GCR real quick. Our goal is to be as selective as possible. So sometimes there'll be periods where GCR declines, like in this period. And that's a result of being super diligent to quality of work. And we're going to continue to push towards owner direct and be very opportunistic from that perspective. From the owner direct side of things, we're building a long-term sales team and we're building a long-term model to have success over multiple quarters and multiple years as well too. So we haven't given a target out beyond this year. We hope that the insight of the 20% to 25% owner direct organic will provide some insight to investors. But we're investing for the future. I will say that as well too. Rob Brown | Analyst, Lake Street Capital: Okay, thank you. And then on the opportunity for margin improvement overall, and I guess at Pioneer, How, you know, what's sort of the timeline of that and maybe what's, can you get gross margins back to sort of where they've been? Is that the goal? Michael McCann | President and Chief Executive Officer: Yeah, for Pioneer specifically, a lot of the work that we've done is transitioning to the accounting and operating system, which is important to us. It's not always the most exciting, but it's really important because it allows us that visibility to get on a common platform. So that first phase, we talked about that first phase, including structure and gross profit benchmarking can almost take almost up to a year. But that doesn't mean we're not doing things along the way. And I think the first thing that we look at is the gross profit benchmarking. Is there opportunity? Is there low-hanging fruit? There has been on the other deals. We can't see why this wouldn't be any different. But I think as we look into next year, definitely from an opportunity from that perspective as well, too. I think from an overall business, it's a matter of our ability to sell in a proactive nature. We've had great success. over the last couple years, working with OPEX-type work, understanding what customers' needs are. And I'm going to point to a specific example that we talked about in the prepared remarks was we had a customer in Florida. And for the last two or three years, we've been really working from an OPEX perspective, taking care of all their problems. That's been high-margin work as well, too. They get to the point, though, where they're thinking, God, that's a lot of money that we're spending. And they end up in this quick period of pause. And it's our job at that point to say, listen, I know you're spending a lot from an OPEX perspective. You're going to have to spend a lot from an OPEX perspective. But there's a reason that you're having that spend. And that developed ultimately into a capital project where we saw deterioration in the same cooling system and built a program to get an important capital project with multiple phases to fix our long-term problems. So that's the type of relationship where we have that OPEX recurring spend A lot of times that OPEX spend will turn into capital projects, and those capital projects are not projects that we're competing against multiple people. We're working on creating a pro forma, giving them cost certainty. There's also an opportunity on a particular opportunity like that to earn really high margin as well, too. So it's a combination of continued improvement from Pioneer Power, running our playbook, as well as this dynamic between OPEX spendings taking care of reactive relationships as well as developing proactive programs and projects as well, too. That's where we see kind of our key components going into next year. Rob Brown | Analyst, Lake Street Capital: Okay, thank you for all the calls. I'll turn it over. Operator | Conference Operator: Thank you. Our next question comes from the line of Jerry Sweeney with Roth Capital Partners. Please proceed. Jerry Sweeney | Analyst, Roth Capital Partners: Good morning, Mike and Jamie. Thanks for taking my call. Operator | Conference Operator: Good morning, Mike. Jerry Sweeney | Analyst, Roth Capital Partners: I wanted to talk about, you know, it wouldn't be a conference call if everybody didn't ask about gross margins, or I'm sorry, about organic growth. So, obviously, there were some questions about hitting your range on organic growth, and you mentioned fourth quarter being relatively strong. You know, for lack of a better term, are you anticipating a budget flush? And I've gone back and looked at a couple fourth quarters versus three Qs, and not every year, but there's been several years when you see a significant uptake in revenue. So I wanted to get your thoughts on how that's going to occur. Michael McCann | President and Chief Executive Officer: You know, I don't know if I would characterize it as budget flush, but I would characterize it as, you know, it's a cross-section of two things that go on from our customer relationships. Ensuring that they're properly spending their budgets as they exit the year. So there are opportunities where there's a lot of times that happens. They're also thinking about what they're going to re-up next year as well, too. So it's a dynamic of completing budgets for 25 and even some of the budgets that have been delayed, as well as what do I need to do in 2026? So it depends on the vertical. I think from a healthcare perspective, we have lots of conversations with customers from that perspective as well, too. It could be from a higher ed, industrial manufacturing, those customers have been pretty consistent from a spend perspective as well, too. So It's really the dynamic between the two, verse 25, verse 26. But the key nature of our work is being an admission-critical facility. They may be able to pause it for a little bit, but inevitably they're going to have to spend, and it's our job to make sure that they spend it wisely as well, too. So we're trying to manage that dynamic with them. Jerry Sweeney | Analyst, Roth Capital Partners: Got it. How much visibility do you have in ODR? Like, as of today, can you see out to the end of the year? Obviously there could be some emergency work, et cetera, but, you know, What does visibility in ODR really look like? Michael McCann | President and Chief Executive Officer: Yeah, we gave some additional information and color of this dynamic between one-third of the work being quick-burning work and then two-thirds being smaller projects as well, too. And we hope that that provides some additional color as well, too. The one-third work, you traditionally know when it comes. There's some avenues of things that need to happen, but there's relative consistency from that perspective as well, too. The two-thirds is fixed-price project work, but it is relatively small in nature as well, too. If we really look at where the customers are at, we focus on a core group of customers, understanding what their spend profiles as well, too. I think the other thing, too, that's part of the dynamic of the owner direct revenue is our ability that we have sales staff. The sales staff with certain pipelines, dynamic with customers as well, too. So it really comes down to the one-third, two-thirds, as well as that dynamic of where the customers are from a budget perspective. As we, I feel like we move into future years, we're going to continue to increased visibility from that perspective as well, too. Jerry Sweeney | Analyst, Roth Capital Partners: Got it. Switching gears, you talked a little bit about local growth or developing relationships on the local level, which certainly has its benefits, but also looking to develop national relationships. How far along are you on the ladder on the sort of national relationship in terms of sales, building that out? They're different animals, local and national. Michael McCann | President and Chief Executive Officer: It's interesting. When we first started out, we thought that this would go super quick. And we probably started with it four or five years ago. And you realize it takes time. And you're cracking in different levels from a customer perspective. Big customers, it may not be C-suite. It may be a couple levels down. So we went at it for probably four or five years now. But this year, I think more than others, we've finally been in a position where they trust us. They've given us that pilot work. And, by the way, this work consists of running a facility program over multiple facilities. It could be project work, engineering work, staff augmentation we've done. So we've put all that hard work in there, and that's allowed us to say, okay, I'm going to give you a bigger piece of the budget. As an example, that $12 million of projects that came out of those facility assessments, we couldn't have got that two years ago. They wouldn't have trusted us at that point. A lot of times they're in a position where they've got to spend the dollars, they've gone through the work, and it's not really a matter of competition at that point. So we're starting to see a blueprint with healthcare. And we feel like we can apply that same blueprint to some of our other verticals as well, too. Whether it's industrial manufacturing or data center and tech, we feel like there's a blueprint. So we're looking at those as well, too, and hopefully we're looking at it as not taking as long because we're going to apply the same blueprint. But the key is acting as a trusted advisor through a professional service type offering and allowing us to make long-term decisions with them and being in position when they have that spend that needs to happen. Jerry Sweeney | Analyst, Roth Capital Partners: Got it. I appreciate it. I'll jump back to you. Thanks. Operator | Conference Operator: Thank you. There are no further questions at this time. I'd like to pass the floor back over to Mike McCann for closing remarks. Michael McCann | President and Chief Executive Officer: In closing, our priorities as we close out 2025 are as following. Continuing to drive top-line growth. Further expanding our customer relationships to turn technical sales into financial sales. Ongoing successful integration of Pioneer and building our M&A pipeline. At Limbach, we're building a long-term business model to design to deliver durable demand over time. We're making strategic investments where others may not. And we bring a unique combination of an account focus, engineering expertise, and the ability to execute those solutions directly with building owners. These relationships are rooted in long-term partnership, where through consultative engagement, we're helping our clients develop multi-year capital plans that go beyond traditional backlogs. We believe this differentiated business model positions us for sustained growth and risk-adjusted returns. We look forward to meeting and speaking with many of you before the end of the year. On December 2nd, we're attending the UBS Global Industrials and Transportation Conference in Florida. We hope to see some of you there. Thank you again for your interest in LIMBOK and a great rest of your day. Operator | Conference Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. jsPDF 3.0.3 D:20260606090219-00'00'

NASDAQ:LMB Q2 2025 Earnings Call Transcript Generated on 6/6/2026 Operator | Conference Operator: Good morning and welcome to the second quarter, 2025, Limbach Holdings, Inc., earnings conference call and webcast. All participants will be in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. I will now turn the conference over to your host, Lisa Fortuna of Financial Profiles. You may begin. Lisa Fortuna | Host, Financial Profiles: Good morning and thank you for joining us today to discuss Limbach Holdings financial results for the second quarter of 2025. Yesterday, Limbach issued its earnings release and filed its Form 10Q for the period ended June 30th, 2025. Both documents, as well as an updated investor presentation, are available on the investor relations section of the company's website at .limbachinc.com. Management may refer to select slides during today's call and encourages investors to review the presentation in its entirety. On today's call are Michael McCann, President and Chief Executive Officer, and Jamie Brooks, Executive Vice President and Chief Financial Officer. We will begin with prepared remarks and then open the call to questions. Before we begin, I would like to remind you that today's comments will include forward-looking statements under federal securities laws. Forward-looking statements are identified by words such as will, be, intend, believe, expect, anticipate, or other comparable words and phrases. Statements that are not historical facts, such as those about expected financial performance, are also forward-looking statements. Actual results may differ materially from those contemplated by such forward-looking statements. A discussion of the factors that could cause a material difference in the company's results compared to these forward-looking statements is contained in LIMBOX SEC filings, including reports on Form 10-K and 10-Q. Please note that on today's call, we will be referring to non-GAP measures. You can find the reconciliation of these non-GAP measures to the most directly comparable GAP measures in our second quarter 2025 earnings release and in our investor presentation, both of which can be found on LIMBOX investor relations website and have been furnished in the Form 8-K and 10-Q that was previously filed with the SEC. With that, I will now turn the call over to President and CEO, Mike McCann. Michael McCann | President and Chief Executive Officer: Good morning and welcome, everyone. Thank you for joining us today. LIMBOX plays a critical role in ensuring the reliability of mission-critical infrastructure within our customers' buildings and facilities. Our expertise lies in optimizing and sustaining the performance of existing systems so they function flawlessly, especially when the stakes are high. As we've consistently noted before, our growth and expansion strategy is anchored by three key initiatives. Number one, scaling our ODR business organically as we become a trusted partner to our customers. Number two, driving profitability through enhanced product and service offerings. And number three, making strategic acquisitions that expand our market presence and brand. Since we started our shift from GCR to ODR, ODR revenue as a percentage of total revenue has increased from 21% in the second quarter of 2019 to .6% in the second quarter of 2025. For the first half of 2025, ODR represented .4% of total revenue, which is in line with our 2025 guidance of between 70% and 80%. This strategy is driving margin expansion and earnings growth, while also enhancing our risk profile. Over the past year, we've been, we have began to implement this land and expand strategy, which we believe will fuel Limbock's next phase of growth. As a result of organic growth and strategic acquisitions over the past several years, we now have 21 locations and customers in 17 metropolitan service areas or MSAs. This includes several national customers with multiple locations across different states and complex maintenance needs, given the mission critical nature of their businesses. Our results continue to reflect the meaningful progress we've made in this transformation. Compared to the year ago period, second quarter 2025 total revenue grew 16.4%, ODR revenue rose 31.7%, gross profit increased by 18.9%, and adjusted EBITDA grew 30%. Damon will go into more details on the financial shortly, but we're pleased with the strong consistent momentum we've achieved over the past six years. Turning to the broader environment, we continue to navigate ongoing macroeconomic uncertainty with performance varying across end markets. Operating primarily across six distinct verticals provides diversification that helps us mitigate volatility and reduces reliance on any single industry. Next, I'd like to provide a quick update of what we are currently seeing in some of the key verticals we serve. In healthcare, deferred maintenance is driving quick or emergency repair replacement work. We are starting to have proactive discussions with customers to avoid emergencies. The goal is that even if some customers are reluctant to spend immediate dollars on short-term capital projects, we are helping them plan their spending for future years, and this gives us visibility into their future requirements. For industrial manufacturing customers, we are performing upgrades to existing manufacturing lines and providing labor for industrial shutdowns. These shutdowns are being performed as planned and customers continue to invest in their facilities. And in life science and higher education, we primarily support our customers by maintaining essential systems, upgrading critical infrastructure, and minimizing downtime, especially in mission-critical environments. In higher education, we are currently seeing the majority of our revenue in laboratory building environments. To support the ongoing expansion of ODR business, we've scaled our sales organization over the last year with the addition of 40 new salespeople, which primarily consist of onsite account managers. This marks a pivotal evolution in our -to-market strategy and how we engage with customers, emphasizing a deeper understanding of the facilities and anticipating their operational needs. To support our expanding sales team, we recently hired Amy Dorsett as Senior Vice President of Sales. Amy brings over 20 years of experience as a strategic, results-driven sales leader with expertise in business development and client relationship management. She has a proven track record of expanding business portfolios and strengthening existing relationships to drive sustainable growth. Her prior roles include sales leader positions for major OEMs, including Honeywell, Crane, and Johnson Controls, while consistently delivering high-impact results. We're excited to welcome Amy to the Limbock team. This type of expertise will be instrumental in advancing our national account capture strategy and enhancing the capabilities of our existing sales step, particularly in developing capital plans with building owners and driving proactive sales and training. Amy will also play a key role in supporting our vertical market focus. Our sales efforts are intentionally concentrated on existing customers that have complex, high-demand facilities that require ongoing system enhancements and continuous upkeep. We believe our current footprint represents just a fraction of the total opportunity within these environments. Importantly, our growth isn't dependent on new construction. It's driven by the reoccurring needs of long-standing customers. These relationships offer the greatest potential for organic growth, and our account teams are committed to strengthening them further through reliable service, proactive engagement, and high-impact solutions. One of our major initiatives for 2025 is strategically expanding from a reactive support model to a proactive partnership approach. Our goal is to play a more strategic role in shaping customer budgets ahead of the next planning cycle to turn off-banks spend or small, quick-hitting or emergency projects into proactive capital programs. We believe this evolution will not only deepen our customer relationships, but also enhance visibility and predictability to our sales pipeline. Transitioning from an -banks-type spend to a capital program isn't an immediate and can take typically six to 12 months. It could require a facility assessment, energy benchmarking, and or asset-spend analysis. Additionally, these capital programs are typically sold to the C-suite or VP level within an organization as part of an overall budget, as opposed to off-banks spend, which is sold at the facility manager level based on existing budget. Our approach is to have a local and or national account exec working with the onsite account managers to develop the program, deliver this financial sale to the customer. With Amy's executive presence and sales expertise, we are confident in our ability to help coach our sales team to turn a technical sale into a financial sale. As an example, we were recently hired by a national healthcare owner to perform energy and facility assessments for over 20 different properties. Our sales team will conduct the assessments and then present capital project solutions that help build this customer's long-term spending program. Projects won't be immediate, but this important work should set up for several years of spend that will be more predictable than off-banks reactive spend. The second element of our growth strategy, focusing on broadening our service portfolio to position Limbach as a one-stop shop for building owners to capture rising customer demand and tap into higher margin opportunities. Last quarter, we invested approximately 2 million to expand our climate control rental fleet, positioning ourselves to meet seasonal demand as temperatures climb. This initiative represents a growth opportunity and highlights our commitment to evolving beyond conventional service lines. We continue to make investments to drive ODR revenue growth and increase our value to these customers. Offering such as digital solutions that manage and monitor the performance of building systems, including data analytics, energy consumption, and sustainability will allow us to develop new revenue streams, leverage our professional service capabilities to support multi-location regional and national customers in core end markets and drive energy retrofit and performance optimization for building owners. The third part of our strategy is M&A. We've remained active. In July, we completed our largest acquisition to date with the addition of Pioneer Power. As a reminder, Pioneer provides industrial and institutional mechanical solutions to the healthcare, food, power, utility, and oil refining, and other verticals in the greater Twin Cities region in the upper Midwest. This transaction directly aligns with our discipline acquisition criteria. Pioneer brings specialized expertise in our core verticals, and the majority of their business is already focused on working directly with building owners. Additionally, Pioneer expands our footprint in the core Midwest and extends our reach into a new geographic market in the upper Midwest, bringing our MSAs to 17. Its technical capabilities and service offerings complement ours, and we see strong cultural compatibility between our teams. We are excited to welcome Pioneer's approximate 300 colleagues to our family. The integration process is well underway in terms of systems and operational processes, and our teams are already working together. Since going public in 2016, we have completed six highly selective acquisitions, each the result of discipline diligence and strategic fit analysis, and have continuously fine-tuned our integration process with every transaction. Behind those six deals are dozens of opportunities we have deliberately passed on, whether it be evaluation, limit of strategic alignment, or concerns around cultural fit. Our proven integration playbook unfolds in two distinct phases. Phase one focuses on system integration, driving fixed cost reduction, and leveraging a unified organizational structure and common platform. In addition, we apply gross profit benchmarking and implement robust risk management tools in an effort to ensure operational efficiency and financial discipline. This is typically a one to two year process. During phase two, we establish targeted account strategies, deploy onsite account managers, and introduce involved live box offerings. We also complete the full build out of dedicated account teams to deepen customer engagement. The duration of phase two can take between two to four years. Through these ever evolving value creation actions, our goal is to enhance Pioneer's performance and eventually bring its margins in line with ours. Ultimately creating additional stockholder value by acquiring a scalable business and an attractive multiple. We are prioritizing the successful integration of Pioneer while we continue to build and monitor an active M&A pipeline for the future. Overall, our acquisition strategy is grounded in a thoughtful methodical approach, targeting high quality companies that align with our values and we care culture that are committed to building long-term relationships with building owners and delivering essential solutions. This strategy has yielded meaningful results for us. At the same time, we've worked to build the Limbock brand in the market as a trustworthy and principal partner. Our goal is to become the first choice for distinguished enterprises looking to join a bigger platform. With a strong pipeline of opportunities, we expect strategic M&A will continue to play an important role in our growth strategy. I would now like to turn to guidance, where we have revised our 2025 outlook. For the full year, we anticipate generating between 650 and 680 million of revenue with adjusted EBITDA projected in the range of 80 to 86 million. While integration efforts remain on track with Pioneer, this represents the largest acquisition in our history as a public company. We are approaching our initial projections with a conservative measured outlook. As we gain greater visibility over the coming months, as we work through phase one of the integration of Pioneer, we expect to provide an update on the next quarterly call. Additionally, revenue adjusted EBITDA contributions for the company are not expected to be evenly distributed between the third and fourth quarters, as we anticipate a heavier weighting towards Q4. In summary, we are gaining strong momentum and remain committed to creating long-term value for building owners by fostering enduring relationships and becoming indispensable partner in managing their mission-critical systems. Once again, by operating at 17 MSAs and six independent verticals, we ensure there's no single market defines our trajectory. This structure enables us to absorb location or sector-specific fluctuations while sustaining consistent performance across cycles. For the balance of 2025, our key priorities are threefold. First, drive top-line revenue growth. Second, expand relationships through evolved solutions, which requires training of the sales force to evolve a technical sale into a financial sale. And number three, continue the execution of phase one of the pioneer integration and building our acquisition pipeline. Now I'll turn it over to Jamie to walk through the financials. Jamie Brooks | Executive Vice President and Chief Financial Officer: Thank you, Mike. Our Form 10Q and earnings press release filed yesterday provide comprehensive details of our finance results, so I will focus on the highlights of the second quarter. All comparisons are second quarter 2025 versus second quarter 2024, unless otherwise noted. In the second quarter, we generated total revenue of 142.2 million compared to 122.2 million in 2024. Total revenue growth was .4% while ODR revenue grew .7% to a quarterly record of 108.9 million and GCR revenue declined 15.7%. As we have said before, the GCR revenue decline is intentional as we execute our makeshift strategy towards ODR. ODR revenue accounted for .6% of total revenue for the second quarter, up from .7% in Q2 2024. Total gross profit for the quarter increased .9% from 33.5 million to 39.8 million, reflecting the ongoing growth of our ODR segment. Total gross margin on a consolidated basis for the quarter was 28%, up from .4% in 2024, driven by the combination of higher margin ODR revenue and higher quality GCR projects. ODR gross profit comprised .3% of the total gross profit dollars or a quarterly record of 31.6 million. ODR gross profit increased 6.2 million or 24.6%, driven by higher revenue, despite lower ODR segment margins of 29% compared to 30.6%, resulting from certain ODR related project write-ups recognized in the period last year that did not recur in the current period. GCR gross profit increased 0.1 million or .1% due to higher margins of .7% compared to 20.6%, driven by our focus on higher quality projects despite lower revenue. SG&A expense for the second quarter was 26.6 million, an increase of approximately 3.5 million from 23.2 million. This increase includes the addition of the 40 new salespeople Mike mentioned earlier and SG&A associated with Kent Island and Consolidated Mechanical that were not part of the company during the second quarter of 2024. As a percentage of revenue, SG&A expense was .7% down from 19% in the same period last year. We continue to currently expect SG&A for 2025 to be in the target range of 18 to 19% of revenue due to our ongoing investment in growing the ODR business. Adjusted EBITDA for the quarter was 17.9 million, up 30% from 13.8 million in Q2 2024. Adjusted EBITDA margin was .6% compared to .3% in Q2 last year. Net income for the quarter increased .2% from 6 million to 7.8 million, and earnings per diluted share grew 28% from 50 cents to 64 cents. Adjusted net income grew 29% from 8.7 million to 11.3 million, and adjusted earnings per diluted share grew .4% from 73 cents to 93 cents. Turning to cash flow, our operating cash inflow during the second quarter was 2 million compared to 16.5 million during the second quarter last year, primarily due to the timing of billings that impacted changes in working capital. Free cash flow defined as cash flow from operating activities, less changes in working capital and capital expenditures, excluding our investment in additional rental equipment, was 16.1 million in the second quarter compared to 10.9 million in Q2 last year, representing a $5.2 million increase. The free cash flow conversion of adjusted EBITDA for the quarter was .7% versus 78.7%. For full year 25, we currently continue to target a free cash flow conversion rate of at least 75% and expect CapEx to have a run rate of approximately $4 million, primarily due to the acceleration of our ODR strategy. This amount excludes an additional investment of 3.5 million in rental equipment for 2025, of which 2.1 million occurred in the first half of the year. Turning to our balance sheet, as of June 30th, we had 38.9 million in cash and cash equivalents and total debt of 33.2 million, which includes 10 million borrowed on our revolving credit facility at a hedge rate of 5.37%. At the end of June, we expanded our revolving credit facility from 50 million to 100 million and utilized our expanded credit facility as part of the Pioneer acquisition on July 1st. With the expanded facility and our expected cash generation from the business, we believe our balance sheet remains strong and we believe we are well positioned to support activity to organic growth initiatives and strategic M&A transactions. That concludes our prepared remarks. I'll now ask the operators to begin Q&A. Operator | Conference Operator: Thank you. Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press star and one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your answer before pressing the star keys. Ladies and gentlemen, we will wait for a moment while we poll for questions. Our first question comes from Chris Moore with CJS Securities. Please go ahead. Chris Moore | Analyst, CJS Securities: Hey, good morning, guys. Thanks for taking a couple. Maybe we can start with gross margins. So specifically on the GCR side, I think .7% last two quarters. I was modeling a pretty good decline moving forward and I know you've got higher quality projects I just wonder how we should be thinking about them this year and next year, kind of ultimately what's a normalized level there? Michael McCann | President and Chief Executive Officer: Yeah, just from a high level perspective, we've been really focused, like you said, on the quality to make sure that whatever work that gets sold from a GCR perspective, those opportunities are vetted. They make sense for the overall business as well too. Proper risk management, a lot of stuff that we've learned over the years as well too and as you said, that's part of, obviously, from a margin perspective, but Jamie, do you want to touch upon long-term? Jamie Brooks | Executive Vice President and Chief Financial Officer: Yeah, I mean, as we look back over the past year, it'll ebb and flow by each quarter. So from a long-term perspective, we really only guide to the total revenue as a gross profit line of being that 20 to 29% for 2025. And so you just see it ebb and flow based on how the project burned in each quarter. Chris Moore | Analyst, CJS Securities: Got it, and I appreciate that. And maybe staying with that theme for a second. Pioneer now being in the mix, fair to say that the, I don't think you've broken out the ODR versus GCR. I think they're both significant. The gross margins contribution from Pioneer, at least for the next few quarters, would be dilutive to gross margins overall. Jamie Brooks | Executive Vice President and Chief Financial Officer: Yeah, so Pioneer definitely, that's how we do our value creation, is adding, going in and being able to increase those gross margins. So yes, compared to where we're at, you could expect that in the short term as we're going through our integration process and then rolling out our strategy. Michael McCann | President and Chief Executive Officer: And Chris, I think we're really, obviously we're in our first, a little bit more than 30 days at this point. We're really focused on that phase one integration piece, which goes into getting our systems in place, gross profit benchmarking, getting everybody on that first standard platform as well too. We're taking a real measured approach from that perspective and applying all of our lessons learned as well too. So every time we do a deal, we continue to tweak and learn from them and think about from that value creation process. And that's definitely the stage Chris Moore | Analyst, CJS Securities: that we're at with Pioneer right now. Perfect, maybe I'll sneak just one last one, more big picture. Mike, you walked through the verticals, obviously healthcare, key driver, industrial manufacturing, I think Pioneer brings much there. Is there one vertical that has a chance to become much more important beyond those two over the next two to three years? Michael McCann | President and Chief Executive Officer: Yeah, I mean, we've learned that it's, even within these verticals, it's gotta be mission critical. So I think that's almost like, when I think about like what the expansion beyond, we're really focused on these six. It's really the mission criticality nature of it. We've really taken a super measured approach from that perspective. Healthcare is important from every single, from a marketplace perspective. But I would also say as we continue to kind of look forward at future acquisitions, Pioneer provides us from a manufacturer industrial. I think as we look for different acquisitions, whether in the Midwest or Southeast, they're gonna give us some additional exposure from a footprint, from a vertical market perspective. So definitely the mission criticality nature of working with customers. A lot of our big push right now is trying to transition, that short term OPEC spend into long term capital programs. And that's gonna really allow us to have a lot of visibility going forward. I think that's really gonna be across all six verticals, but those three that I mentioned in the prepared marks are really our focus. Chris Moore | Analyst, CJS Securities: All right, I appreciate it. I'll jump back in line. Michael McCann | President and Chief Executive Officer: Thanks, Chris Moore | Analyst, CJS Securities: Chris. Operator | Conference Operator: Thank you. Our next question comes from Rob Brown with Lake Street Capital. Please go ahead. Rob Brown | Analyst, Lake Street Capital: Well, good morning. Just wanted to get your kind of sense on the demand environment, how it's trending and sort of where you're seeing some of the strength in the business. Michael McCann | President and Chief Executive Officer: Yeah, so, and maybe just to kind of look back from a vertical market perspective, you know, our model, and I think we've learned this more and more, is really about employing proactive sales. There's, you know, we're working with customers that have to spend money. They have to repair. Getting them to think not just reactive, but proactive, I think that's one thing that we are really super focused. So you think about it from a healthcare perspective, they have to make the repair. But discussing with them, setting up from a capital program perspective, that's something that we really have to work with. And just an example that we gave in prepared remarks was we had a national healthcare customer that were doing assessments on 20, you know, about 20 locations. And this is when I think the combination of from a local relationship turns into a national relationship and really expands from a capital program. That's 20 different locations across our footprint and nationally that allows us to have access to the future. So, so much of our strategy really relies on short-term actions turning into long-term demand. And those types of relationships, I think, are really gonna allow us to really capitalize that and to have a sustainable long-term revenue source from these customers. Rob Brown | Analyst, Lake Street Capital: Okay, great, thank you. And then on the GCR kind of declines, I know that's been part of your strategy, but, you know, going forward, do you continue to see that business declining or does that level off at some point and really maintain at this level? Michael McCann | President and Chief Executive Officer: You know, this year we're guiding to our 70 to 80% ODR, which obviously is 20 to 30% GCR. So we're really pushing the business to go to the higher markets. And then we're also going to push towards the future of our origin owner direct business. You know, like anything, a lot of our locations, they're all on a different journey. As we bring in acquisitions, they may have a component of GCR as well too. So our goal is always to push towards owner direct, but depending on future acquisitions, the stage of the business, that will kind of ebb and flow a little bit, but the focus has not changed and will not change to push towards owner direct. Operator | Conference Operator: Thank you. Our next question comes from Brian Brophy with T-FIL. Please go ahead. Brian Brophy | Analyst, T-FIL: Yeah, thanks. Good morning, everybody. Just a quick question on the guidance. Does the change only reflect the contribution from PPI, or was the organic kind of base number tweaked a little bit lower here as well? And if so, what drove the organic change? Thanks. Michael McCann | President and Chief Executive Officer: Yeah, so from the guidance perspective, a lot of this has to do from a pioneer power. You know, it's our largest acquisition as a public company. So we wanna make sure the initial projections are conservative and from a measured perspective. And I think as we go from, kind of continue from a phase one perspective, and kind of the steps that I talked about before, we're gonna kind of take a look at that as we go forward. Brian Brophy | Analyst, T-FIL: Okay. And then I guess on the ODR backlog, it fell a little bit sequentially here. Is there anything to call out as notable drivers? And just curious if you're seeing any sort of change in the demand environment, or if this is more of just kind of a timing issue on the backlog, thanks. Michael McCann | President and Chief Executive Officer: Yeah, no, I think it's really timing-based. You know, I think we have, you know, the backlog is a component of it. It's not the only component because we could end up burning work. It could be time of material, material work that goes very quickly through. I think what we're seeing is, again, I feel like it's our ability with customers that have to spend, that doesn't mean that it automatically translates to revenue from our perspective. So I definitely think from a sales perspective, we're continuing to learn. I think one thing too that from our team, we've recently hired our senior vice president of sales, Amy Dorsett. So I think our ability to translate OPEX into CAPEX, this hire has been a long-term, long-time coming, but I think that's gonna be something that's really pivotal from a -to-market perspective as well to using her expertise from various OEMs companies and to add a different element. I think a lot of times with customers, it's translating that technical type sale into a financial sale that involves return on investment type calculations. It's almost like a different language for our sales team. So I think that's gonna be a big thing as we go to 26 and 27, looking ahead from a sales perspective. Brian Brophy | Analyst, T-FIL: Okay, and you touched on some of this already, but in regards to some of the sales folks you've hired over the past couple of quarters, particularly the onsite account managers, just curious how that ramp up is going relative to expectations in terms of their contribution. Michael McCann | President and Chief Executive Officer: Yeah, I think anytime we bring somebody on, there's always a ramp up time. Occasionally we'll be in a situation where we'll have somebody that like perfectly lines up where their account is ready to go. I think as we learn going forward, we hope that that ramp up time shortens. From what we've seen, I think relatively from an expectation perspective, the hires that we make to kind of get those true contributions, it takes a decent amount of time. So it's almost like you're making hires for really full year contributions for the following year. So we've done that the last three years. It made a real big investment from a sales perspective. So as those accounts mature, as those salespeople mature and their experience level at the company, that's gonna lead to a better return. And I think also it'll help us from a ramp up period. But generally they performed where we thought they were gonna perform. Brian Brophy | Analyst, T-FIL: Very helpful, I'll pass it on. Thank you. Michael McCann | President and Chief Executive Officer: Thanks. Operator | Conference Operator: Thank you. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to Mike McCann for closing comments. Michael McCann | President and Chief Executive Officer: Thank you for listening today and for your continued interest in Limbock. We look forward to connecting with many of you soon. Coming up in September, we are attending the Lake Street Big Nine Conference in New York and the D.A. Davidson Diversified Industrial and Service Conference in Nashville. Operator | Conference Operator: Have Michael McCann | President and Chief Executive Officer: a great rest of your day. Operator | Conference Operator: Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. jsPDF 3.0.3 D:20260606090221-00'00'