Limbach Holdings, Inc.

Greetings. Welcome to Libbock Holdings' fourth 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. Please press star 1 to enter the question queue. 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 of the Equity Group. Thank you. You may begin.

Thank you very much and good morning, everyone. Yesterday, Limbach Holdings announced its fourth quarter and full year 2021 results and filed its Form 10-K for the fiscal year ended December 31, 2021. During this call, the company will be reviewing those results and providing an update on current market conditions. Today's discussion may contain poor-looking statements and actual results may differ from any forecast 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.

Good morning, everyone, and thanks for joining us. Joining me today is our Chief Financial Officer, Jamie Brooks, our Chief Operating Officer, Mike McCann, and our Acquisition and Capital Markets Executive Vice President, Matthew Katz. We closed out 2021 with a strong fourth quarter, despite the ongoing challenges of operating through a pandemic and dealing with acute supply chain issues that are impacting our industry. Our fourth quarter results built on the excellent third quarter we reported in November and continue to demonstrate the successful execution of the strategy we've laid out for our stakeholders over the last two years. With the year now complete, we can report that we met financial guidance we presented last May for both consolidated revenue and adjusted EBITDA. Mike and Jamie will discuss our financial results in more detail, but for now, I'd like to point out a few financial highlights from the fourth quarter. ODR revenue grew by 10.6% compared to the prior year quarter, and ODR backlog grew by 92.5%, with year-on-year sales up over 25%. ODR gross margin was 28.5% above our modeling range of 25% to 28%. GCR gross margin was 16.4%, well above our modeling range of 10.5% to 11.5%. And our consolidated gross margin was 20.1%. Ultimately, our focus on growing the ODR business while concurrently rationalizing the GCR business to focus on higher-margin work is all about driving bottom-line profitability. Our segment results bear this out as GCR segment revenues declined 20.6% for the full year, yet gross profit improved by approximately $300,000. As we've said previously, Over the near term, we're prepared to trade lower GCR revenue for higher GCR gross profit dollars, and that's what we saw in the fourth quarter. Fourth quarter net income of $4.3 million set another company record, as did adjusted EBITDA of $9.5 million for the quarter. Full year adjusted EBITDA was $23.3 million, which fell within guidance, despite being impacted by both supply chain and employee quarantines. The impact of the pandemic on our employees and their ability to work started improving in February, but supply chain issues are persisting, and Mike will comment later on our actions to combat the industry-wide problem. Our ODR segment continues to focus on growth and to contribute a larger share of our total revenue, helping improve consolidated gross margin while also tempering the overall risk profile of the business. The GCR segment also continues to perform with the focus on bottom line profitability, delivering the intended results. I'm extremely proud of everyone's hard work at the company, as it directly contributed to the company's success. From the craft workers and service technicians to the branch and corporate leadership teams, we delivered on our financial plan and achieved many of last year's strategic initiatives, despite the ongoing headwinds of the pandemic. To recap the year, we delivered another strong safety year with several units having zero incidents. From the field and in the office, we keep pushing the safety and wellness agenda and our employees and their families greatly appreciate it. We improved margins across the board as previously stated. We refinanced our debt, greatly reducing our cost of debt capital. We commenced our acquisition strategy and executed our first acquisition in December. The strategic acquisition allows us to expand into the industrial and manufacturing sectors and moved us into a new geographic region in Tennessee and surrounding southern states. The acquisition also provides us with access to a sophisticated prefabrication capability and our ODR customer base that features strong recurring revenue. We resolved one of our major claims, which Jamie will comment on later. We staffed back up in 2021 after cutbacks in 2020 due to the uncertainties from the pandemic. These investments support the transformational ODR growth strategy. We also started a new offering, program management services, which are specifically focused on our healthcare market sector, along with a new office in Nashville, the nexus of the for-profit healthcare industry. While we had a number of strong results from some of our business units, one fell short of expectations. We addressed the underperforming unit, and Mike will comment later on those actions. With that, I'll hand this off to Jamie.