Limbach (LMB) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue increased 4.8% to $133.9 million, driven by a 41.3% rise in ODR revenue and a strategic shift from GCR, with ODR now representing 69.4% of total revenue and 82.1% of gross profit.

• Net income for Q3 2024 was $7.5 million, up from $7.2 million in Q3 2023, with diluted EPS of $0.62 and a net margin of 5.6%.

• Record quarterly Adjusted EBITDA of $17.3 million, a 27.2% increase year-over-year, with margin expanding to 12.9%.

• Four acquisitions completed since November 2021, including Kent Island Mechanical in September 2024 for $15 million upfront plus $5 million earn-out, supporting ODR growth and market expansion.

• The company is transitioning to a building systems solutions firm, expanding offerings to energy management, automation, and decarbonization, and is recognized for sustainability and workplace excellence.

Financial highlights

• Q3 2024 revenue: $133.9 million (up 4.8% year-over-year); nine-month revenue: $375.1 million (up 0.4%).

• Q3 2024 gross profit: $36.1 million (up 15.6%); gross margin improved to 27.0% from 24.5%; YTD gross profit: $100.7 million (up 17.1%).

• Q3 2024 net income: $7.5 million; nine-month net income: $21.0 million (up 35.7% year-over-year); Q3 EPS: $0.62–$0.66.

• ODR revenue for Q3 2024: $93.0 million (up 41.3%); GCR revenue: $40.9 million (down 33.9%).

• SG&A expense was $23.7 million (17.7% of revenue), up from $21 million (16.4%), mainly due to acquisitions and payroll.

Outlook and guidance

• FY 2024 revenue guidance raised to $520–$540 million, with ODR mix at 65–70% and ODR revenue growth of 29–44%.

• Adjusted EBITDA guidance increased to $60–$63 million (11–12% margin); gross margin expected at 26–27%.

• Free cash flow conversion targeted at 70% of Adjusted EBITDA, excluding rental equipment investment.

• Management anticipates continued ODR revenue mix growth and 2–3 acquisitions per year.

• Company expects current cash, operating cash flow, and $35.7 million in available credit to be sufficient for at least the next 12 months.