Fourth Quarter 2018 Earnings Call April 16, 2019 Forward Looking - PowerPoint PPT Presentation

Fourth Quarter 2018 Earnings Call April 16, 2019

Forward Looking Statements We make forward-looking statements in this press release within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations or forecasts for future events, including, without limitation, our earnings, adjusted EBITDA, revenues, expenses, backlog, capital expenditures or other future financial or business performance or strategies, results of operations or financial condition, and in particular statements regarding the timing of the recognition of backlog as revenue, the potential for recovery of cost overruns, the ability of the Company to successfully remedy the issues that have led to write-downs in its Mid-Atlantic branch, and the benefits expected by the Company’s new senior secured credit facility and revolving credit facility. These statements may be preceded by, followed by or include the words “may,” “might,” “will,” “will likely result,” “should,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “continue,” “target” or simil ar expressions. These forward-looking statements are based on information available to us as of the date they were made and involve a number of risks and uncertainties which may cause them to turn out to be wrong. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Please refer to our most recent annual report on Form 10-K, as well as our subsequent filings on Form 10-Q and Form 8-K, which are available on the SEC’s website ( www.sec.gov), for a full discussion of the risks and other factors that may impact any forward-looking statements in this press release. 2

Agenda 1 Executive Summary 2 High-level Business Comments 3 Key Initiatives 4 Q4 and FY 2018 Financials 5 Backlog 6 Refinancing 7 Closing Comments 3

4Q/FY’18 Operating Review Solid Q4 Results; Record Backlog at Year-End • Q4 2018 revenue increased 15.2% year-over-year; Q4 2018 diluted EPS of $0.44 • Year-end backlog at $559.7 million; $380 million of additional promised work not included in backlog 2 • FY 2018 gross margin ex-Mid Atlantic of 15.2% 1 ; Q4 2018 gross margin of 13% • Geographic diversity continues to fuel operations as 8 of 10 business units reported [revenue] growth; seven of 10 delivered strong EBIT Earned Revenue Construction Backlog ($ $ in n mi mill llio ions) ($ $ in n mi mill llio ions) $60 600 $55 550 $546.5 $50 500 $50 500 $485.7 $505.5 $447.0 $40 400 $45 450 $461.4 Yea ear-over-Year r $30 300 $331.4 Qua uarte rterly rly $434.3 Gr Grow owth th +15. 15.2% $40 400 $20 200 $378.1 $151.4 $35 350 $10 100 $131.4 $326.9 $0 $0 $30 300 201 015 201 016 201 017 201 018 4Q '1 '17 4Q '1 '18 201 014 201 015 201 016 201 017 201 018 4 1 Ex-Mid-Atlantic calculations eliminate 2018 unit revenues of $105.7 million and negative gross profit of $7.6 million.

4Q/FY’18 Operating Review Service Operations • FY 2018 Service revenue of $108.3 million represents growth of 14.7% versus the prior year period; Q4 2018 Service sales rose 40.7% year-over-year 2 • Seeing traction with national, multi-location facility owners • Maintenance base continues to build, with solid pull-through revenues Service Segment Revenues Maintenance Base ($ $ in n mi mill llio ions) ($ $ in n mi mill llio ions) $12 120 $16 16 $108.3 $10 100 $14.7 $94.4 $80 80 $12 12 $12.9 $82.2 $11.3 Gr Grow owth th $60 60 $10.0 +40. 40.7% $8 $8 $57.8 $40 40 $33.1 $4 $4 $20 20 $23.5 $0 $0 $0 $0 201 015 201 016 201 017 201 018 4Q'17 17 4Q'18 18 201 015 201 016 201 017 201 018 5

LEAP Initiative Limbach Energy Assessment for Performance LEAP is a data-analytics platform that improves the efficiency of clients’ existing facilities. Utilizing LEAP, facility owners realize reduced utility costs and are able to demonstrate responsible environmental 2 stewardship. LEAP offers utility bill management, real-time monitoring of utilities; analysis from Limbach’s in-house engineers; resource management; advice and analysis on future capital expenditures; and benchmarking of Key Performance Indicators. LEAP Program Components Clou loud-based Utilit tility y Mon onit itor orin ing ➢ Benchmarking ➢ Energy Star ➢ Improvement Tracking LED LEDS S Ener Energy Engin Engineerin ing ➢ Highly Experience ➢ Performance Analysis ➢ Consultation ➢ LEED Certification Compliance Ener Energy y Solu olutio tions Pr Proje ojects ➢ Energy Auditing ➢ ECM Identification ➢ Project Development ➢ Measurement & Verification 6

4Q/FY’18 Operating Review Operations excluding Mid-Atlantic Business Continue to Perform Excluding the Mid-Atlantic business unit: ✓ Revenue was in-line with Plan revenue 2 ✓ Gross margins were 10 bps ahead of Plan, and 430 basis ahead of the consolidated ‘as reported’ figure ✓ EBIT was 44% ahead of plan FY 2018 Excluding Mid-Atlantic Business Unit ($ in millions) As Reported As Reported FY 2018 Plan ✓ Earned Revenue $546.5 $440.8 $440.1 ✓ Gross Margin 10.9% 15.2% 15.1% ✓ EBIT $0.8 $15.3 $10.6 7

Management Initiatives Continuing to make significant investment in people • Reorganized the Operations with the introduction of the Co-COO role to better controls, improve accountability and oversight across the portfolio of business units. Also added to additional operational managers to provide audit of processes, coaching or new team members and to identify potentials risks 3 and opportunities. • Limbach University was expanded in 2019 with advancing training and development programs, including updated curricula, new online training and increased frequency of programs. We have a goal of 24 hours of training for all staff members. Specific Activities Designed to Support Workforce and Improve Efficiency • Installing key metrics for all production. The piloted program has proved to be very successful in increasing profitability and reducing write downs • Orlando business units using 90% of pre-fabricated or pre-cut assemblies. ✓ Reduces field labor costs ✓ Will look to utilize this approach in other business units • Assembling a business plan in 2019 to consider building modular manufacturing. • Limbach Leadership and Development Program (LLDP) inaugural class began in January 2019. The LLDP program is designed to build bench strength of Limbach leaders for further expansion. • Our 2018 Limbach Employee We Care Survey once again noted we are a strong respected employer. • Receiving recognition as a “Best Places to Work” in 2019. 8

Financial Review - Details • Q4 2018 revenue increased 15.2% year-over-year; Construction revenue up 9.6%; Service revenue up 4 40.7% • FY 2018 gross margin ex-Mid Atlantic of 15.2% 1 ; Q4 2018 gross margin of 13% • Q4 2018 Net Income of $3.4 million, or 44 cents per diluted share Earned Revenue Gross Profit and Gross Margins ($ $ in n mi mill llio ions) ($ $ in n mi mill llio ions) $60 600 $80 80 Gro Gross s 13. 13.7% 12.5% 12. 13.5% 13. 10.9% 10. 15. 15.2% Marg rgin $546.5 $50 500 $485.7 $67.0 $65.6 $447.0 $60 60 $40 400 $59.4 $55.7 Yea ear-over-Year r $30 300 $331.4 Qua uarte rterly rly Grow Gr owth th +15. 15.2% $45.4 $40 40 $20 200 $151.4 $10 100 $131.4 $20 20 $0 $0 201 015 201 016 201 017 201 018 201 018 8 ex ex- 201 015 201 016 201 017 201 018 4Q '1 '17 4Q '1 '18 MA MA 9 1 Ex-Mid-Atlantic calculations eliminate 2018 unit revenues of $105.7 million and negative gross profit of $7.6 million.

Financial Review - Details Construction Operations • FY 2018 Construction revenue of $438.2 million, up 12% versus the prior year period; Q4 2018 Construction revenues rose 9.6% versus the prior year period 4 • Focused on optimizing customer mix with an emphasis on direct relationships with building owners • Continuing to focus on expansion in Mission Critical – awarded next phase of hyper data center project Construction Segment Revenues Construction Backlog ($ $ in n mi mill llio ions) ($ $ in n mi mill llio ions) $50 500 $60 600 $45 450 $50 500 $438.2 $40 400 $505.5 $391.4 $461.4 $35 350 $364.8 $40 400 $30 300 $390.2 Grow Gr owth th $355.4 $25 250 $30 300 $273.6 +9. 9.6% $20 200 $20 200 $15 150 $10 100 $118.3 $10 100 $107.9 $50 50 $0 $0 $0 $0 201 015 201 016 201 017 201 018 4Q'17 17 4Q'18 18 201 015 201 016 201 017 201 018 10