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Jun 30, 2021
Limbach Q2 2021 Earnings Report
Reported a decrease in revenue but an increase in gross margin driven by a shift towards higher-margin ODR segment work.
Key Takeaways
Limbach Holdings, Inc. reported consolidated revenue of $121.0 million for Q2 2021, a 10.5% decrease compared to Q2 2020. Gross margin increased to 15.4%, up from 15.0% in the same period last year, driven by a shift towards higher-margin Owner Direct Relationships (ODR) segment work. Net income was $0.7 million, compared to $2.9 million for the second quarter of 2020.
Consolidated revenue decreased by 10.5% year-over-year to $121.0 million.
ODR segment revenue increased by 14.4% year-over-year, accounting for 27.7% of consolidated revenue.
Gross margin improved to 15.4%, up from 15.0% in the second quarter of 2020, driven by higher margin ODR segment work.
Net income decreased to $0.7 million, compared to $2.9 million for the second quarter of 2020.
Limbach
Limbach
Forward Guidance
The Company is revising its guidance for 2021 with revenue expected to be between $480 million and $510 million and Adjusted EBITDA between $23 million and $25 million.
Positive Outlook
- ODR segment contributing as much as 30% of consolidated revenue for the year.
- Expected gross margin improvement of up to 150 basis points.
- ODR revenue growth is expected to exceed historical rates, with growth in excess of 25% for the year.
- GCR revenue is tracking ahead of plan due to strong sales in the second quarter of 2021.
- Improving pipeline of opportunities as customers accelerate their capital spending tied to the reopening and expanding economy.
Challenges Ahead
- ODR revenue growth, while substantial, will fall slightly short of original expectations.
- Lower margins in the GCR segment impacting overall profitability.
- Selling, general and administrative expense to continue as planned based on investments into the ODR segment.
- Tightening Adjusted EBITDA guidance range due to likely mix between GCR and ODR revenue.
- Uncertainty due to the emergence of the Delta Variant of COVID-19 becoming more prevalent.