Limbach Holdings, Inc.

Welcome to Limbach Holdings third quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If you would like to ask a question, please press star 1 on your telephone keypad. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Jeremy Hellman with the Equity Group. Thank you. You may begin.

Thank you very much and good morning, everyone. Yesterday, Limbach Holdings announced its third quarter of 2021 results and filed its form 10-Q for the fiscal quarter ended September 30, 2021. During this call, the company will be reviewing those results and providing an update on current market conditions. Today's discussion may contain forward-looking statements and actual results may differ from any forecasts, projections, or similar statements made during the earnings call. Listeners are reminded to review the company's annual report on Form 10-K and quarterly reports on Form 10-Q for risk factors that may cause the actual results to differ from forward-looking statements made during the earnings call. With that, I'll turn the call over to Charlie Bacon, the President and Chief Executive Officer of Limbach Holdings. Please go ahead, Charlie.

Good morning, everyone, and thanks for joining us. Joining me today is our CFO, Jamie Brooks. Our COO, Mike McCann, and Executive Vice President, Matt Katz, is also on hand for Q&A session, which will follow our prepared remarks. Those of you who have followed our company know we have been pointing to the third quarter as a major reflection point in our business, and I'm extremely proud of the results we reported. Specifically, our ODR segment revenue growth was 17.6% year-on-year and 17.2% sequentially. Our ODR gross margins of 29.8% were up 190 basis points year-on-year and 55 basis points sequentially. And GCR gross margins of 14.2% were delivered up 280 basis points year-on-year and 403 basis points sequentially. Our net income of $4 million is the largest since we went public five years ago, and that was primarily the result of excellent gross margin performance in the quarter and our refinancing, which was completed in Q1. As good as many of the indicators are from the quarter, we firmly believe we have further room for growth. The strategic plan we put in place two years ago centered on improving our bottom line profitability. The process towards that goal was slowed as we grappled with the impacts of the pandemic, and with that receding, the results we reported last night are strong evidence that our leaders are executing well on our strategic plan. I also want to thank all of the staff here at the company for their hard and smart work. We have incredible talent in our offices and in the field. The entire team are rowing together, and we're realizing these positive outcomes. Very proud of all the people here that work at Lindbach. I think we're doing a terrific job. Our ODR segment continues to grow, helping improve our consolidated gross margin while we also believe tempering the overall risk profile of our business. Our GCR segment is also performing well as our shifted focus to bottom line profitability is delivering the intended results. Within our ODR segment, our bookings actively remain strong and accelerated through the third quarter with September our strongest month of the year. The maintenance base continued to grow, and as a reminder, maintenance contracts typically can lead to higher margin, quick-hitting, small capital project work, often performed on a T&M basis, along with emergency repairs. That work normally results in total revenues for Limbach in excess of the recurring maintenance contracts. Turning to our GCR segment, The risk management initiatives we began two years ago to improve our performance continue to take hold as successful project closeouts help drive segment margin of 14.2% in the quarter. When we propose on projects, our expectation is that once the dust has settled, projects will earn gross margins at or above the level at which we proposed. Our emphasis on quality project selection coupled with consistent execution in the field is resulting in improved segment profitability and we intend to continue that performance. There may be some variability in GCR segment gross margin quarter to quarter, but we expect the broader margin improvement to continue and remind everyone that annual or 12-month trailing numbers and margins offer the best lens for which to monitor our GCR segment performance. With that, I'll hand it off to Jamie for her financial highlights.