WARRENDALE, Pa. - Limbach Holdings, Inc. (NASDAQ: NASDAQ:LMB) has reported its fourth-quarter earnings, surpassing analyst expectations for earnings per share (EPS) but offering guidance for the full year 2024 that fell short of consensus estimates.
Following the earnings release and future guidance, Limbach's stock experienced a 8.5% decline, signaling investor concern over the company's future revenue projections.
The company's Q4 EPS came in at $0.44, $0.04 higher than the analyst estimate of $0.40. However, revenue for the quarter was $142.69 million, a slight decrease of 0.6% from the same quarter last year, which was $143.5 million.
Despite the EPS beat, Limbach's guidance for the fiscal year 2024 indicated expected revenue between $510 million and $530 million, below the analyst consensus of $541.1 million. The company's Adjusted EBITDA guidance is set at $49 million to $53 million.
Michael McCann, Limbach's President and CEO, commented on the results, "In 2023, we made tremendous progress executing our strategy to become a pure-play provider of building systems solutions." He attributed the growth in the Owner Direct Relationships (ODR) segment, which accounted for 55.1% of revenue and 71.1% of consolidated gross profit for the quarter, to the company's strategic shift towards higher margin opportunities.
The ODR segment's revenue increased by 22.8% year-over-year (YoY) for the fourth quarter and 21.1% for the year, reflecting the company's focus on this area. Gross margin for the quarter also increased to 23.3%, up from 20.4% the previous year, while gross profit rose by 14.0% to $33.3 million from $29.2 million.
McCann also noted that the company is evolving its service offerings and has invested in rental equipment for indoor climate control, which is expected to provide returns in the second half of 2024.
For the year ended December 31, 2023, Limbach reported consolidated revenue of $516.4 million, a 3.9% increase from $496.8 million in the previous year. Net income for the year was $20.8 million, or $1.76 per diluted share, compared to $6.8 million, or $0.64 per diluted share in the prior year.
The company's balance sheet remains strong, with year-end cash and cash equivalents of $59.8 million, and a current ratio of 1.50x, an improvement from 1.42x at the end of 2022.
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