Limbach Holdings, Inc.

Good morning and welcome to the first quarter 2025 Lindbach Holdings Inc. Earnings Conference Call and Webcast. All participants will be in 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, Julie Kegley of Financial Profiles. You may begin.

Good morning and thank you for joining us today to discuss Lindbach Holdings financial results for the first quarter 2025. Yesterday, Limbach issued its earnings release and filed its Form 10-Q for the period ended March 31, 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 statements 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 LINBOC'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 first 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 8K filed with the SEC. With that, I will now turn the call over to President and CEO, Mike McCann.

Good morning and welcome to our stockholders, analysts, and all interested investors. Thank you for joining us today. LIMBOC's a trusted partner for delivering mission-critical services that support a building's most important systems. We specialize in existing facilities by revitalizing and maintaining building systems to ensure these systems are formed when it matters most. When these systems don't function or don't function as intended, our customers are shut down or unable to meet commitments made to their own customers. We provide cost-effective, innovative, and dependable services to keep our customers in business. Our unique ODR model is designed to withstand macroeconomic cycles and headwinds. allows us to focus on executing our growth strategy. Working directly for building owners allows us to build long-standing relationships as we strive to be an indispensable partner by providing on-demand repair work and long-term solutions to keep facilities up and running. Since we implemented the owner direct strategy five years ago, revenue from the ODR segment has increased from less than 21% of total revenue in 2019 to 66.6% of total revenue for 2024, 67.9% in the first quarter of 2025, we project to be between 70 and 80% for full year 2025. This strategy is responsible for improving the company's risk profile, driving margin expansion and growing earnings. The progress we've made towards this shift continues to be reflected in our results. Compared to Q1 of 2024, Q1 2025, total revenue grew 11.9%, ODR revenue rose 21.7%, gross profit expanded by 18.1%, and adjusted EBIT increased 26.5%. Jamie will go into more detail on these numbers shortly, but we're proud of the continued momentum we've built. This strong performance reflects more than just financial success. As in education, our business strategy is repeatable. with geographic expansion, sustainable through different economic environments, and gaining momentum. To support continued ODR growth, in the past year we've added approximately 40 new professionals to our sales organization, accounting for approximately one-third of the sales team. This investment is an important step in the continued evolution of our relationship with our customers. It's important that we understand our customers' facilities and anticipate the work needed to keep their critical facilities running to support their business. And that requires us to be present and in front of decision-makers consistently so that we can develop and maintain long-term, reoccurring partnerships across operations, maintenance, and capital projects. In fact, the majority of our sales activity is focused on existing customers with large, established facilities that require ongoing maintenance upgrades and system optimization. We believe we currently hold only a small share of the total work needed to keep these complex operations running efficiently. Importantly, our growth is not dependent on the construction of new facilities. Instead, it's driven by the continuous needs of our longstanding clients. These relationships represent the most fertile ground for organic expansion. Our dedicated account teams are focusing on deepening them through exceptional service, responsiveness, and practical, high-impact solutions. We've experienced typical seasonality in Q1, primarily from weather and annual budget cycles, but we've gained meaningful momentum in March, which has carried into the second quarter. We're capitalizing on the momentum as customers approve budgets, and our key markets, especially healthcare, begin to ramp up investment for overdue infrastructure upgrades. The second pillar of our transformation strategy is to expand customer offerings to meet customer demand and pursue high-margin opportunities. In Q1, we added an additional $2 million to our climate control rental equipment fleet to position ourselves to meet increased demand as temperatures rise. This is a key growth lever, which was not fully operational in Q1 of last year, and just one example of how we're innovating beyond traditional offerings. A big initiative for 2025 is to transition our strategic customer relationships from a reactive to a proactive approach. with the goal to help influence and co-author customer budgets by the end of the year. This will allow us to strengthen our relationships and create more predictability for our sales pipeline. In order to achieve this objective, we're focused on collecting data for massive repair history, utility bills, and facility assessments, which we can analyze and present back as solutions to our customers. To undertake this endeavor, each branch has identified their top customers based on specific criteria and has started the assessment process. Each one is at a different stage based on the customer relationship, but we've already started to see how these assessments can drive our relationships with our customers and impact our business. After completing an assessment for a New England-based hospital, we provided them with a compelling case to replace both the HVAC system and equipment that feeds their operating rooms. Once we presented the customer with the energy and asset repair savings, they proceeded with the replacement. Looking ahead, the opportunity to collect and analyze this data at scale represents a major inflection point for our business. As our data set grows, so does our ability to surface patterns, benchmark performance, and identify opportunities that would otherwise remain hidden. This capability not only positions us as a more strategic partner to our customers, but also has the potential to create a powerful competitive advantage that compounds over time. I'd also like to quickly address the uncertainty around tariffs. Tariffs have been a topic of conversation in the broader market, but their effect in our business has been so far neutral. What we are seeing is customers accelerating their purchasing decisions to lock in pricing due to ongoing tariff uncertainty. Our model, especially our ODR segment work, is built to respond quickly to market dynamics and avoid macroeconomic volatility. We perform quick hitting work with most projects completed on a three- or four-month timeline, giving us the ability to deliver consistent value even in times of uncertainty. This nimbleness and agility enables us to focus on the best solutions for our customers and gives us an advantage over traditional contracting models that focus on new construction that lock in pricing and time of bid. Contractors often wait months or even years to recover cost increases for materials. We've also seen interesting developments in the M&A market over the past nine months. For several years now, there's been significant consolidation in the broader mechanical services industry, much of which has been driven by private equity investors. That activity has been concentrated in less sophisticated, less technical, complex end markets. Those aren't general areas in which we're interested, but the increased activity overall has repercussions and has positively impacted our competitive position. We've been patient and disciplined. have remained focused on acquiring great businesses with great cultures. They're aligned with our focus on owner-direct, mission-critical customers. We believe we've been rewarded for that patience and discipline. We've also been working to further build out our brand and reputation as fair, transparent, and dependable acquirers of world-class contractors. We strive to become the third home for outstanding family-owned and operated businesses. In recent months, we've seen evidence that our approach is delivering results. and believe that we're developing and assessing opportunities that are unavailable to other potential buyers. We see this trend continuing and are excited about the pipeline we've built. We're making solid progress on recent acquisition integrations and are exploring additional opportunities aligned with our core capabilities and expand our geographic footprint. We consistently work on our M&A pipeline to ensure ample time for due diligence and are well positioned from a capital perspective. We're patient we're going to be able to execute the right deals at the right time. We currently operate in approximately 20 metropolitan statistical areas, MSAs, with a well-established presence across core markets. Looking ahead, we have identified an additional 20 to 30 MSAs, primarily along the East Coast and throughout the Midwest, that represent attractive expansion opportunities. Given our proven model and operational capabilities, we are well-positioned to capitalize on these markets. We remain confident based on our current visibility to deliver our full year guidance targets of 610 to 630 million in revenue and adjusted even in the range of 78 to 82 million. We're confident in our team's ability to deliver. In closing, we're off to a strong start this year. Driven by our discipline strategy, operational execution, and our relentless focus on serving our customers. Thank you for your continued support and confidence in Limbach Holdings. Now, we'll turn over to Jamie to walk through the financials.