Limbach Holdings, Inc Common Stock 2026 Q2 Earnings Call

You may begin. Good morning, thank you for joining us today to discuss Limbach Holdings' financial results for the second quarter of 2026.

Yesterday, Limbach issued its earnings release and filed its Form 10-Q for the period ended June 30th, 2026. Both documents, as well as the 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 Jayme Brooks, Executive Vice President and Chief Financial Officer. We will begin with prepared remarks, 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 those 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 Limbach's SEC filings, including reports on Form 10-K and 10-Q. Please note on today's call, we will be referring to some non-GAAP measures. You can find the reconciliation of these non-GAAP measures to the most directly comparable GAAP measures in our second quarter 2026 earnings release and in our presentation, both of which can be found on Limbach's investor relations website and have been furnished in the Form 8-K filed with the SEC.

With that, I'll now turn the call over to President and CEO, Mike McCann.

Good morning, and thank you for joining us. Yesterday, we reported our second quarter results as well as the acquisition of CYMCOR. Our results fell short of expectations, driven by project timing and ongoing softness in healthcare and institutional markets from elevated price sensitivity and market conditions pressuring gross margins. However, underlying customer demands remained healthy. We generated $182 million of bookings during the quarter. Our third consecutive quarter of strong bookings, bringing the total bookings over the past three quarters to $616 million. While these market conditions have created near-term pressure, they also underscore the importance of building a more diversified, higher-quality business, and we are taking action. Our focus is diversifying our end markets, expanding our geographic reach, and leveraging our integrated platform in an effort to improve profitability. Moving on to strategy. For the past five years, we transformed Limbach.

Today, that work allows us to shift from transformation to disciplined growth. Our objective now is to build a larger company with strong cash generation and higher returns over time. First, we are accelerating our efforts for expansion of data centers and industrial manufacturing, building a national platform that mirrors the success we've achieved in our national healthcare platform. By diversifying our exposure across multiple attractive end markets, we believe we will reduce our reliance on any single vertical, better balance the business through market cycles, and create a more resilient platform for long-term growth. Second, we continue to pursue a disciplined acquisition strategy that expands our presence in targeted vertical markets while extending our reach into attractive high-growth regions such as Texas, the Midwest, and the Southeast.

By broadening both our market and geographic exposure, we believe we're able to support customers across more locations, reducing concentration risk and strengthening our competitive position. Additionally, our acquisition philosophy is not built around buying fully optimized businesses. We're looking for companies with strong customer relationships and attractive strategic positions where we believe Limbach's integrated operating model can create additional value over time. We've already seen that approach produce positive results with Pioneer Power, where we've seen encouraging improvements in gross margin, approximately 1.5% from the first half of 2026 compared to when we acquired Pioneer Power in July of 2025. We believe each acquisition strengthens the economics of the entire platform because it expands customer relationships, increases cross-selling opportunities, broadens our geographic reach, enhances the value of our integrated operating model.

Third, we are leveraging our integrated operating model to connect capabilities across geographies and service lines, accelerating cross-selling opportunities and improving profitability. We believe our work at Pioneer Power demonstrates how disciplined integration and operational improvements can create meaningful value over time, as we just noted. This integrated operating model also drives value creation from our acquisitions. For example, our target operational pricing actions are underway in an effort to improve Pioneer Power's profitability and bring gross profit margin in line with the company average over the next two to three years. We have a clear roadmap to improve results. By executing this plan, we expect to build a more resilient business with a broader set of growth drivers and less exposure to any single market and higher margins. Execution of these strategic initiatives expands our national footprint, strengthens customer relationships, increases the scale advantages of our platform.

It should strengthen our purchasing power, national account capabilities, operating leverage, and our ability to allocate capital efficiently. We believe these advantages will compound over time, creating a larger, higher-quality business with more durable earnings and a stronger long-term shareholder value. Importantly, our balance sheet and liquidity provides us with the flexibility to execute the strategy in a disciplined manner. Yesterday's acquisition of CYMCOR is an excellent example of our disciplined approach to capital allocation and drives three of our strategic initiatives I've been describing. This acquisition expands Limbach's geographic footprint, enhances its ability to serve national and multi-site data center customers, and increases engagement with building owners early in the facility lifecycle.

Equally important, with our integrated operating model, it creates significant cross-selling and pull-through project booking opportunities by connecting complementary service offerings across both organizations, expanding access to new data center customers, and generating additional growth within Limbach's existing markets. Through its national program management services, CYMCOR currently oversees project budgets for customers that have a cumulative value exceeding $8 billion. We believe this early engagement with customers will create meaningful opportunities for Limbach to provide engineering, construction, commissioning, maintenance, and other lifecycle services. We have confidence in the acquisition of CYMCOR as its business model closely mirrors Limbach's proven healthcare program management platform, which we expect will provide us the ability to drive value in the data center mission-critical market.

Over the last 12 months, our healthcare program management platform generated approximately $3 million of professional service revenue and pulled through approximately $60 million of project bookings, resulting in 20 times pull-through multiple. Looking forward, we currently expect CYMCOR to generate $12 million of program management revenue and $4 million of Adjusted EBITDA in 2027. Moving on to our verticals. Healthcare. While at a macro level, healthcare spending remains pressured by budget constraints and delayed decision-making, we continue to strengthen our position by engaging earlier with national customers on facility planning and long-term capital programs. Those relationships continue to generate larger, more strategic opportunities over time. Industrial. The demand in our industrial markets remains strong and increasingly complements our data center strategy, as both are benefiting from sustained investment in power, manufacturing, and mission-critical infrastructure. Lastly, data centers. We continue to view data centers as an attractive long-term growth opportunity.

We are steadily investing in the capabilities, customer relationships, and professional services platform necessary to establish Limbach as a trusted long-term partner. Before I turn the call over to Jayme, let me close by putting today's results into a broader context of where we're taking Limbach. Despite our near-term challenges, we remain confident in Limbach's long-term direction and our ability to generate shareholder value. We believe the actions we're taking, from investing in our national platform to expanding our capabilities through disciplined acquisitions like CYMCOR, are building a stronger, more diversified, higher-quality company with greater long-term earnings power. Our strategy is straightforward. Broaden our geographic reach, deepen customer relationships, expand to attractive end markets, and leverage our integrated operating model to create a business that generates higher returns and compounds value over time. We've adjusted our expectations to reflect the business environment as we see it today.

We believe our responsibility is straightforward: execute against the plan, continue allocating capital with discipline, and build a business that is stronger and more valuable. We understand that execution is one of our most important measures of success. We are focused on providing continued and better executions. With that, I'll turn the call over to Jayme to review our financial results and updated outlook.