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What changed in Limbach Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Limbach Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+604 added−643 removedSource: 10-K (2026-03-02) vs 10-K (2025-03-10)

Top changes in Limbach Holdings, Inc.'s 2025 10-K

604 paragraphs added · 643 removed · 347 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

84 edited+36 added−35 removed31 unchanged
Biggest changeThe Company’s team members uniquely combine engineering expertise with field installation skills to provide custom solutions that leverage its full life-cycle capabilities, which allows it to address both the operational and capital projects needs of its customers. 2024 Highlights In 2024, the Company: • Generated $36.8 million of net cash provided by operating activities. • Expanded its consolidated gross profit margins by 470 bps to 27.8%. • Increased its revenue generated from the ODR segment (as defined below) by 31.9% (versus 2023), achieving its 2024 ODR segment revenue target of 65%-70% of total consolidated revenue at 66.6%. • Increased diluted earnings per share by 46% (versus 2023) to $2.57. • Produced record annual gross profit and gross profit margins. • Successfully completed the acquisitions of Kent Island Mechanical, LLC (“Kent Island”) and Consolidated Mechanical, LLC (“Consolidated Mechanical”) (as described in more detail below).
Biggest changeOperating on a connected platform, the Company integrates engineering expertise with field execution to provide customized MEPC infrastructure solutions that address both operational and capital project needs, optimizing performance, enhancing reliability, and ensuring long-term safety. 2025 Highlights In 2025, the Company: • Produced record annual revenue of $646.8 million and a record annual gross profit of $169.3 million. • Increased its revenue generated from the ODR segment (as defined below) by 40.6% (versus 2024), achieving its previously announced 2025 ODR segment revenue target of 70% - 80% of total consolidated revenue at 75.1%. • Increased diluted earnings per share by 25.7% (versus 2024) to $3.23. • Generated $45.7 million of net cash provided by operating activities. • Successfully completed the acquisition of Pioneer Power, LLC (“Pioneer Power”) (as described in more detail below).
ODR Segment. The Company’s key business initiative for its ODR segment is to position itself as a value-added, indispensable partner to building owners in mission-critical markets, providing full life-cycle capabilities from concept design and engineering through system commissioning and around-the-clock service and maintenance primarily to their existing buildings.
The Company’s key business initiative for its ODR segment is to position itself as a value-added, indispensable partner to building owners in mission-critical markets, providing full life cycle capabilities from concept design and engineering through system commissioning and around-the-clock service and maintenance primarily to their existing buildings.
In addition to backlog, the Company has a substantial amount of contracts with short lead times that book-and-bill within the same reporting period and are not included in backlog. Additional information related to the Company’s remaining performance obligations is provided in Note 4 — Revenue from Contracts with Customers in the accompanying notes to its consolidated financial statements.
In addition to backlog, the Company has a substantial amount of contracts with short lead times that book-and-bill within the same reporting period and are not included in backlog. Additional information related to the Company’s remaining performance obligations is provided in Note 4 — Revenue from Contracts with Customers in the accompanying notes to its consolidated 9 financial statements.
The Company makes available, free of charge, on its website the copies of the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, 14 and amendments to those reports as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the United States Securities and Exchange Commission (the “SEC”).
The Company makes available, free of charge, on its website the copies of the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the United States Securities and Exchange Commission (the “SEC”).
In the northern climates where it operates, and to a lesser extent in the southern climates as well, severe winters can slow the Company’s productivity on construction projects, which shifts revenue and gross profit recognition to a later period. The Company’s maintenance operations may also be impacted by mild or severe weather.
In the northern climates where it operates, and to a lesser extent the southern climates as well, severe winters can slow the Company’s productivity on projects, which shifts revenue and gross profit recognition to a later period. The Company’s maintenance operations may also be impacted by mild or severe weather.
For additional financial information about the Company’s operating segments, see Note 12 – Operating Segments in the accompanying notes to the Company’s consolidated financial statements. 7 Strategy The Company focuses on creating value for building owners by developing long-term relationships and becoming an indispensable partner to building owners with mission-critical systems.
For additional financial information about the Company’s operating segments, see Note 12 – Operating Segments in the accompanying notes to the Company’s consolidated financial statements. Strategy The Company focuses on creating value for building owners by developing long-term relationships and becoming an indispensable partner to building owners with mission-critical systems.
Thorough planning and having acute awareness of present surroundings, which aids in executing work safely. • Engaging at All Levels. Setting a great example of completing all tasks safely, at work and at home, by everyone from the management team to craft professionals. 13 • Mentoring and Coaching.
Thorough planning and having acute awareness of present surroundings, which aids in executing work safely. • Engaging at All Levels. Setting a great example of completing all tasks safely, at work and at home, by everyone from the management team to craft professionals. • Mentoring and Coaching.
One of the ways the Company shows its commitment is through offering competitive team member compensation and benefits packages, specifically designed to meet the unique needs of each individual in its organization, which include: • Health and Welfare Plans.
One of the ways the Company shows its commitment is through offering competitive team member compensation and benefits packages, specifically designed to meet the unique needs of each individual in its organization, which include: 12 • Health and Welfare Plans.
The Company’s core market sectors consist of the following customer base with mission-critical systems: • Healthcare , including research, acute care and inpatient hospitals for regional and national hospital groups; • Industrial and manufacturing , including automotive, energy and general manufacturing plants; • Data centers, including facilities composed of networked computers, storage systems and computing infrastructure that organizations use to assemble, process, store and disseminate large amounts of data; 8 • Life sciences, including organizations and companies whose work is centered around research and development focused on living things; • Higher education, including both public and private colleges, universities and research centers; and • Cultural and entertainment, including entertainment facilities (including casinos) and amusement rides and parks.
The Company’s core market sectors consist of the following customer base with mission-critical systems: • Healthcare , including research, acute care and inpatient hospitals for regional and national hospital groups; • Industrial and manufacturing , including automotive, energy and general manufacturing plants; • Data centers, including facilities composed of networked computers, storage systems and computing infrastructure that organizations use to assemble, process, store and disseminate large amounts of data; • Life sciences, including organizations and companies whose work is centered around research and development focused on living organisms and biological systems; • Higher education, including both public and private colleges, universities and research centers; and • Cultural and entertainment, including entertainment facilities (including casinos) and amusement rides and parks.
Culture of Belonging. The Company is committed to creating and supporting a fair and inclusive environment for its team members, We Care culture and industry as a whole. The Company actively seeks to foster an environment where every team member’s voice is heard and every team member can reach their full potential.
The Company is committed to creating and supporting a fair and inclusive environment for its team members, We Care culture and industry as a whole. The Company actively seeks to foster an environment where every team member’s voice is heard and every team member can reach their full potential.
Human Capital To ensure that the Company is well positioned to provide innovative system solutions and reliable services in a safe, efficient and responsible manner, the Company seeks to employ and retain a team of highly dedicated and accomplished people who genuinely care about the success of the Company.
Human Capital To ensure that the Company is well positioned to provide innovative systems solutions and reliable services in a safe, efficient and responsible manner, the Company seeks to employ and retain a team of highly dedicated and accomplished people who genuinely care about the success of the Company.
Mild weather tends to reduce demand for the Company’s maintenance services, whereas severe weather may increase the demand for its maintenance and time-and-materials services.
Mild weather tends to reduce demand for its maintenance services, whereas severe weather may increase the demand for its maintenance and time and materials services.
The Company appreciates the fact that it owes its 120+ year existence to team members who work hard to help the Company prosper. As such, the Company has committed itself to the health, safety and well-being of its team members and their families.
The Company appreciates the fact that it owes its 125 year existence to team members who work hard to help the Company prosper. As such, the Company has committed itself to the health, safety and well-being of its team members and their families.
Our culture supports and encourages our team members to speak up to express their ideas, track future trends, and breathe life into new concepts, all aimed at improving our company and making our customers’ lives easier.
Our culture supports and encourages our team members to speak up with their ideas, track future trends, and breathe life into new concepts, all aimed at improving our company and making our customers’ lives easier.
The Company provides turnkey rental equipment solutions to support building owners during planned replacements, emergency repairs, and construction outages. These services go beyond simply supplying temporary equipment, they include system design, ensuring existing system compatibility, managing all necessary connections, as well as overseeing installation, maintenance, and removal. • Maintenance and Repairs.
The Company provides turnkey rental equipment solutions to support building owners during planned replacements, emergency repairs, and construction outages. These services go beyond simply supplying temporary equipment, they include system design, ensuring existing system compatibility, managing all necessary connections, as well as overseeing installation, maintenance, and removal. • MEPC Infrastructure Upgrades.
ODR and GCR Backlog The Company refers to its estimated revenue on uncompleted contracts, including the amount of revenue on contracts for which work has not begun, less the revenue it had recognized under such contracts, as “backlog.” Backlog includes unexercised contract options.
The Company refers to its estimated revenue on uncompleted contracts, including the amount of revenue on contracts for which work has not begun, less the revenue it had recognized under such contracts, as “backlog.” Backlog includes unexercised contract options.
As of December 31, 2024, the Company had approximately 1,400 team members, including approximately 500 full-time salaried team members who support its customers directly and indirectly, such as project managers, account managers, engineers and superintendents, and approximately 900 technician and craft team members, some of whom are represented by various labor unions.
As of December 31, 2025, the Company had approximately 1,500 team members, including approximately 600 full-time salaried team members who support its customers directly and indirectly, such as project managers, account managers, engineers and superintendents, and approximately 900 technician and craft team members, some of whom are represented by various labor unions.
The Company practices its commitment through its core values, selection, development and training, which extends to its senior leadership and Board of Directors. The Company understands that inclusivity is truly a competitive advantage that helps drive growth and innovation. 12 Embrace Forum. The Company formed the Embrace Forum to continue to evolve its commitment to a culture of belonging.
The Company practices its commitment through its core values, selection, development and training, which extends to its senior leadership and Board of Directors. The Company understands that inclusivity and culture of belonging is truly a competitive advantage that helps drive growth and innovation. Embrace Forum.
Based on the assessments performed, the Company tailors MEP equipment upgrades for its customers’ system and/or facility. Examples of MEP equipment upgrades and products include providing installed 6 equipment solutions, equipment retrofitting/restoration, off-site equipment skids, temporary equipment fixes and comprehensive system replacements. • Rental Equipment.
Based on the assessments performed, the Company tailors MEPC systems upgrades for its customers’ system and/or facility. Examples of MEPC systems equipment upgrades and products include providing installed equipment solutions, equipment retrofitting/restoration, off-site equipment skids, temporary equipment fixes and comprehensive system replacements. • Rental Equipment.
The Company maintains hundreds of building owner relationships through its contracts for program management, maintenance and critical system repairs. For the years ended December 31, 2024, 2023 and 2022, no ODR customer accounted for more than 10% of the Company’s consolidated revenue. The Company believes it has strong relationships with many national commercial general contractors and construction managers.
The Company maintains hundreds of building owner relationships through contracts for program management, maintenance and system repairs. For the years ended December 31, 2025, 2024 and 2023, no customer in the ODR segment accounted for more than 10% of the Company’s consolidated revenue. The Company believes it has strong relationships with many national commercial general contractors and construction managers.
Additionally, for the second year in a row, the Company was recognized as one of Forbes’ “Most Successful Small Companies” (in 2024 and 2025). Training and Team Member Development . Investment in continuous learning is essential to providing industry-leading expertise and service to the Company’s customers, continuous improvement across its organization, and meaningful career development opportunities for its people.
Also, for the second year in a row in 2025, the Company was recognized as one of Forbes’ “Most Successful Small Companies.” Training and Team Member Development . Investment in continuous learning is essential to providing industry-leading expertise and service to the Company’s customers, continuous improvement across its organization, and meaningful career development opportunities for its people.
The Company remains focused on the scalability of its organic business through partnering directly with building owners. The Company believes that its ODR services offerings provide a distribution channel through which it can continue to deliver an expanded offering of value-added services direct to building owners that further reinforces its value proposition and differentiated capabilities.
The Company remains focused on the scalability of its organic business through partnering directly with building owners. The Company believes that its building owner relationships provide a distribution channel through which it can continue to deliver an expanded offering of value-added solutions direct to building owners that further reinforces its value proposition and differentiated capabilities.
Government and Environmental Regulations The Company is subject to various federal, state and local laws and regulations relating to the environment, including those relating to discharges to air, water and land, the handling and disposal of solid and hazardous waste, the handling of underground storage tanks and the cleanup of properties affected by hazardous substances.
Government and Environmental Regulations The Company is subject to numerous federal, state and local laws and regulations relating to the environment, including those governing discharges to air, water and land; the handling, storage and disposal of solid and hazardous waste; underground storage tanks; and the investigation and remediation of properties affected by hazardous substances.
Segments The Company operates in two segments, (i) Owner Direct Relationships (“ODR”), in which the Company performs owner direct projects and/or provides maintenance or service primarily on mechanical, plumbing or electrical systems, building controls and specialty contracting projects to existing buildings direct to, or assigned by, building owners or property managers, and (ii) General Contractor Relationships (“GCR”), in which the Company generally manages new construction or renovation projects that involve primarily mechanical, electrical, and/or plumbing (“MEP”) services awarded to the Company by general contractors or construction managers.
Segments The Company operates in two segments; (i) Owner Direct Relationships (“ODR”), in which the Company performs owner direct projects and/or provides maintenance or service primarily on MEPC systems, and specialty contracting projects to existing buildings direct to, or assigned by, building owners or operators, and (ii) General Contractor Relationships (“GCR”), in which the Company generally manages new construction or renovation projects that involve primarily MEPC systems awarded to the Company by general contractors or construction managers.
We CARE , one of the Company’s core values, is the foundation of its efforts to create a fair and inclusive organization. Building a culture where all of its team members feel a sense of belonging is important to the Company.
This objective begins with the Company's commitment to inclusion. We CARE , one of the Company’s core values, is the foundation of its efforts to create a fair and inclusive organization. Building a culture where all of its team members feel a sense of belonging is important to the Company.
These amounts reflect unrecognized revenue expected to be recognized over the remaining terms of the Company’s service contracts and projects. Based on historical trends, the Company estimates that 86% of its ODR backlog as of December 31, 2024 will be recognized as revenue during 2025.
These amounts reflect unrecognized revenue expected to be recognized over the remaining terms of the Company’s construction-type and service contracts. Based on historical trends, the Company estimates that 84% of its ODR backlog as of December 31, 2025 will be recognized as revenue during 2026.
In addition, by establishing successful, long-term partnerships with building owners, the Company has positioned itself to provide reoccurring maintenance services, which it believes improves revenue predictability and could increase economic resilience. The Company provides its ODR business services through the following project delivery methodologies and other service offerings: • Integrated Facility Planning.
In addition, by establishing successful, long-term partnerships with building owners, the Company has positioned itself to provide reoccurring small project work, time and materials work and maintenance services, which it believes improves revenue predictability and could increase economic resilience. The Company provides its ODR solutions through the following project delivery methodologies: • Integrated Facility Planning.
The Company believes its ODR backlog increased due to its continued focus on the accelerated growth of its ODR business. The Company’s GCR backlog was $140.0 million and $186.9 million as of December 31, 2024 and 2023, respectively.
The Company believes its ODR backlog increased due to its continued focus on the accelerated growth of its ODR business. The Company’s GCR backlog was $141.8 million and $140.0 million as of December 31, 2025 and 2024, respectively.
See also Item 1A. “Risk Factors — Our contract backlog is subject to unexpected adjustments and cancellations and could be an uncertain indicator of our future earnings .” The Company’s ODR backlog was $225.3 million and $147.0 million as of December 31, 2024 and 2023, respectively.
See also Item 1A. “Risk Factors — Our contract backlog is subject to adjustments, delays and cancellations and could be an uncertain indicator of our future earnings. ” The Company’s ODR backlog was $255.8 million and $225.3 million as of December 31, 2025 and 2024, respectively.
The Company’s core purpose “is to create great opportunities for people.” The Company has implemented internal development programs, which allow it to attract, develop and retain talent and emphasize the importance of promoting from 11 within. The Company believes its core values reflect who it is. The Company cares about its people and believes its approach provides a competitive advantage.
The Company prides itself on creating great opportunities for people. The Company has implemented internal development programs, which allow it to attract, develop and retain talent and emphasize the importance of promoting from within. The Company believes its core values reflect who it is. The Company cares about its people and believes its approach provides a competitive advantage.
Most of the Company’s branches also maintain strong relationships with local and regional general contractors and construction managers that fit its selection criteria. For the years ended December 31, 2024 and 2023, no GCR segment customer accounted for more than 10% of the Company’s consolidated revenue.
The Company’s branches also maintain relationships with local and regional general contractors and construction managers that meet these criteria. For the years ended December 31, 2025, 2024 and 2023, no customer in the GCR segment accounted for more than 10% of the Company’s consolidated revenue.
The Company provides customized solutions to help building owners achieve energy goals, secure funding, reduce operating costs, and maintain energy-efficient facilities. By enhancing visibility into facility and asset performance, the Company delivers significant energy savings.
The Company provides customized solutions to help building owners achieve energy and carbon reduction goals, secure funding, reduce operating costs, and maintain energy-efficient facilities. By enhancing visibility into facility and asset performance, the Company can deliver significant energy savings in a cost-effective manner.
The Company is also subject to compliance with numerous other laws and regulations of federal, state, local agencies, and authorities, including those relating to workplace safety, wage and hour, and other labor issues (including the requirements of the Occupational Safety and Health Act and comparable state laws), immigration controls, vehicle and equipment operations and other aspects of its business.
The Company is also subject to other regulatory requirements applicable to its operations, including those relating to workplace safety, wage and hour and other labor matters (including the Occupational Safety and Health Act and comparable state laws), immigration compliance, vehicle and equipment operations and other aspects of its business.
This forum is composed of team members and leaders across the company who have made it their mission to maximize the potential of the Company’s team members by creating great opportunities through a fair and inclusive environment. The Embrace Forum focuses on creating a culture of belonging, community and supporting employee resource groups (“ERGs”).
The Company formed the Embrace Forum to continue to evolve its commitment to a culture of belonging. This forum is composed of team members and leaders across the company who have made it their mission to maximize the potential of the Company’s team members by creating great opportunities through a fair and inclusive environment.
The Company is committed to promoting and supporting women within its organization throughout their career, including to take on leadership roles, and helping encourage other women to join its industry as a whole.
Currently, there are five active ERGs at the Company: • Women in Construction and Service (“WICS”) . The Company is committed to promoting and supporting women within its organization throughout their career, including to take on leadership roles, and helping encourage other women to join its industry as a whole.
The Company provides comprehensive inspection, troubleshooting, repair, and services to ensure the safe, efficient, and reliable operation of building systems. Ongoing maintenance and operations are essential for building functionality, safety, and energy efficiency. The Company’s skilled technicians specialize in servicing all critical building systems, addressing root causes of issues, and delivering tailored maintenance solutions through “evergreen” contracts.
Ongoing maintenance and operations are essential for building functionality, safety, and energy efficiency. The Company’s skilled technicians specialize in servicing all critical building systems, addressing root causes of issues, and delivering tailored maintenance solutions through “evergreen” contracts.
On September 3, 2024 (the “Kent Island Effective Date”), Limbach Facility Services LLC (“LFS”), a Delaware limited liability company and wholly-owned subsidiary of the Company, Kent Island, and the owner of Kent Island (the “Kent Island Seller”) entered into a Purchase Agreement (the “Kent Island Purchase Agreement”) pursuant to which LFS purchased all of the outstanding equity interests in Kent Island from the Kent Island Seller (the “Kent Island Transaction”).
On July 1, 2025 (the “Pioneer Power Effective Date”), Limbach Facility Services LLC (“LFS”), a Delaware limited liability company and wholly-owned subsidiary of the Company, and the former owners of Pioneer Power (the “Pioneer Power Seller”) entered into a Purchase Agreement (the “Pioneer Power Purchase Agreement”) pursuant to which LFS purchased all of the outstanding equity interests in Pioneer Power from the Pioneer Power Seller (the “Pioneer Power Transaction”).
In the GCR segment, the Company’s efforts continue to focus on improving project execution and profitability by pursuing opportunities that are smaller in size and shorter in duration than the opportunities historically and where it can leverage its captive design and engineering services.
In the Company’s GCR segment, the Company has been able to improve GCR segment margins by focusing on improving project execution and profitability by pursuing opportunities that are smaller in size and shorter in duration and where it can leverage its captive design and engineering services.
As a result, the ongoing relationship with the customer, along with the maintenance, time-and-materials, building automation upgrades, critical system repair work, and data driven insights often lead, drive and support the revenue associated with owner direct projects. GCR Segment. The Company provides its GCR segment services through the following project delivery methodologies: • Plan & Spec Bidding.
As a result, the ongoing relationship with the customer, along with the maintenance, time and materials, building automation upgrades, critical system repair work, and data driven insights often lead, drive and support the revenue associated with owner direct projects.
In focusing on improved profitability and generating quality growth in its operations, the Company has dedicated and continues to dedicate its resources toward the growth of its ODR segment as the scope of offerings provided within the Company’s ODR segment typically yield higher margins when compared to its GCR segment.
In focusing on improved profitability and sustainable, quality growth, the Company has dedicated its resources toward the organic growth of its ODR segment, as the scope of services provided within this segment typically yields higher margins compared to its GCR segment.
While compliance with existing laws, regulations and other requirements has not materially adversely affected the Company’s operations in the past, and the Company is not aware of any proposed requirements that it anticipates will have a material impact on its operations, there can be no assurance that these requirements will not change or that compliance will not otherwise adversely affect the Company’s operations in the future.
Although compliance with existing requirements has not materially adversely affected the Company’s operations in the past and the Company is not aware of any proposed requirements that it expects will have a material impact on its operations, laws and regulations may change and future compliance costs or operational impacts could be material.
As one of its core risk management processes, the Company is selective in choosing to work with general contractors and construction managers that have similar core values, that have a solid payment history, that have experienced and available project management labor, and that value the Company’s services and reputation.
As part of its risk management practices, the Company is selective in choosing to work with general contractors and construction managers that align with the Company’s operating standards, have a history of timely payment, maintain experienced and available project management resources, and value the Company’s services and reputation.
The Company competes on various factors, including; cost efficiency, reputation and quality of service, technical expertise and innovation, geographic reach and scale, knowledge of local markets and conditions, financial strength, surety bonding capacity, availability and experience of craft labor, and customer relationships.
The Company competes based on a number of factors, including price and cost efficiency; reputation, service quality and reliability; technical expertise and ability to execute complex projects; safety performance; geographic reach and scale; knowledge of local markets and conditions; financial strength and access to capital; surety bonding capacity; availability and experience of craft labor; responsiveness and customer service capabilities; and customer relationships.
Item 1. Business Limbach Holdings, Inc. (the “Company,” “we” or “us”), a Delaware corporation headquartered in Warrendale, Pennsylvania, is a building systems solution firm that partners with building owners and facilities managers with mission critical mechanical (heating, ventilation and air conditioning), electrical, and plumbing infrastructure.
Item 1. Business Limbach Holdings, Inc. (the “Company,” “we” or “our”), a Delaware corporation headquartered in Warrendale, Pennsylvania, is a building systems solutions firm that designs, delivers, and maintains mechanical (heating, ventilation, and air conditioning), electrical, plumbing, and controls (“MEPC”) systems.
By creating an environment of continuous learning, we empower our people with the proper training and competencies to deliver innovative solutions tailored to address our customers’ evolving needs. • We Are ACCOUNTABLE: We are a company with drive and discipline. We set goals and hold each other responsible for the outcomes.
By creating an environment of continuous learning, we empower our team with the proper training and competencies to deliver innovative solutions tailored to address our customers’ evolving needs. • We Are ACCOUNTABLE: We operate with drive and discipline, holding ourselves responsible for delivering results that matter.
The Company has a distribution of revenue across end-use sectors that it believes reduces its exposure to negative developments in any given sector. Currently, the Company also has significant geographical diversification across regions that are generally located in the eastern parts of the United States, again reducing its exposure to negative developments in any single given region.
The Company also has significant geographical diversification across regions that are primarily located in the Eastern and Midwestern regions of the United States, again reducing its exposure to negative developments in any single given region.
As such, the Company is subject to federal laws and regulations related to unionized labor and collective bargaining (including the National Labor Relations Act). The Company continually monitors its compliance with these laws, regulations and other requirements.
A significant portion of the Company’s labor is provided under collective bargaining agreements, and the Company is subject to federal and state laws and regulations related to unionized labor and collective bargaining (including the National Labor Relations Act). The Company monitors its compliance with these laws, regulations and contractual requirements.
By meeting diverse customer needs under one roof, the Company deepens customer loyalty. The Company believes that building owners value the convenience and reliability of a single point of contact, which fosters long-term partnerships and reoccurring business and may open doors to larger capital projects.
The Company believes that building owners value the convenience and reliability of a single point of contact, which fosters long-term partnerships, reoccurring business and may open doors to larger capital projects and being able to capture a greater share of the overall value chain.
The Company’s ODR segment focus often allows for these increased costs to be passed onto the customer due to the short sales cycle; however, the Company may not be able to pass certain price increases on to its customers and may not be able to secure adequate alternative sources of materials on a timely basis.
The Company’s ODR segment focus may, in certain circumstances, allow for increased costs to be passed through to customers due to shorter sales cycles; however, the Company may not be able to pass through all price increases or secure adequate alternative sources on a timely basis.
The Company’s predictive maintenance solutions include: • 24/7 emergency service and repairs; • on-site asset valuation; • engineer-led assessments; • staff augmentation; • proactive preventative maintenance; • building automation consultation; • hydro-jetting; and • facility team training. • Energy Efficiency Solutions.
The Company’s predictive maintenance solutions include: 5 • 24/7 emergency service and repairs; • on-site asset valuation; • staff augmentation; • proactive preventative maintenance; • building automation consultation; • hydro-jetting; and • facility team training. • Replacements & Retrofit . The Company provides system and/or facility assessments to determine the best solution for the building owner’s assets.
The Company’s team members see the impact of these programs, and in 2023 and 2024, its training programs averaged a participant Net Promoter Score of over 85%. The Company has invested in additional training to support those team members directly working in customer-facing roles across the Company, such as account management training, as it aims to grow its ODR business.
The Company has invested in additional training to support those team members directly working in customer-facing roles across the Company, such as account management training, as it aims to grow its ODR business. Culture of Belonging.
The Company’s team members uniquely combine engineering expertise with field installation skills to provide custom solutions that leverage its full life-cycle capabilities, which allows it to address both the operational and capital projects needs of its customers. This also positions the Company to deliver additional products and services in the future.
The Company’s team members combine engineering expertise with field installation capabilities to provide custom solutions that leverage the Company’s full life cycle service platform, enabling it to address both customers’ ongoing operational needs and capital project requirements. This positions the Company to provide additional products and services over time.
The Company’s “ We Care ” survey, which has been issued for more than twenty years, provides leadership with insights, including constructive ideas on how to improve the overall business for those who work for it. In 2024, the Company was recognized as one of America’s “Most Loved Workplaces,” published by Newsweek Magazine and certified by the Best Practice Institute.
The Company’s “ We Care ” survey, which has been issued for more than twenty years, provides leadership with insights, including constructive ideas on how to improve the overall business for those who work for it.
These services include engineer-led facility assessments, identification and support of capital planning needs for new and existing facilities through the analysis of existing facility data, as well as program management support. • Replacements & Retrofit . The Company provides system and/or facility assessments to determine the best solution for the building owner’s assets.
These services include engineer-led facility assessments, identification and support of capital planning needs for new and existing facilities through the analysis of existing facility data, as well as program management support. • Service & Maintenance. The Company provides comprehensive inspection, troubleshooting, repair, and services to ensure the safe, efficient, and reliable operation of building systems.
During fiscal year 2023, the Company eclipsed its ODR-related revenue target, generating a 50/50 segment revenue mix. For fiscal year 2024, the Company further expanded its growth within the ODR segment where it generated 66.6% of its total consolidated revenue, achieving its 2024 ODR segment revenue target of 65%-70%.
For fiscal year 2025, the Company further expanded its growth within the ODR segment where it generated 75.1% of its total consolidated revenue, achieving its 2025 ODR segment revenue target of 70% - 80%.
The Company offers all of its team members the opportunity to join ERGs. These groups foster professional development, social connectivity, and celebrate inclusivity throughout the Company. Each year, new ERGs are evaluated for consideration. Currently, there are four active ERGs at the Company: • Women in Construction and Service (“WICS”) .
The Embrace Forum focuses on creating a culture of belonging, community and supporting employee resource groups (“ERGs”). The Company offers all of its team members the opportunity to join ERGs. These groups foster professional development, social connectivity, and celebrate inclusivity throughout the Company. Each year, new ERGs are evaluated for consideration.
Since 2021, the Company has reduced its salaried attrition rate by 43% through the effective implementation of its human capital strategies. The Company’s culture is driven by its core values: • We CARE: We care about safety and having our team members return home injury-free every day.
Since 2021, the Company has reduced its salaried attrition rate by 37% through the effective implementation of its human capital strategies. The Company’s culture is driven by its core values: • We CARE: Is more than just a phrase, it is a commitment to enhancing the lives of our team members both personally and professionally.
The Veterans ERG aims to offer resources, foster camaraderie, and promote understanding among Company team members who have served in the military and those who are committed to supporting them. In addition, to help recruit the next generation of diverse industry leaders, the Company is actively involved with the ACE Mentor Program of America, Inc. (“ACE”).
The Veterans ERG aims to offer resources, foster camaraderie, and promote understanding among Company team members who have served in the military and those who are committed to supporting them. • Ashe Collective .
In addition, a relatively limited number of the Company’s construction contracts are entered into with public authorities, and these contracts frequently impose additional requirements, including requirements regarding labor relations and subcontracting with designated classes of disadvantaged businesses. A large portion of the Company’s business uses labor that is provided under collective bargaining agreements.
In addition, a relatively limited number of the Company’s contracts are entered into with public authorities, and such contracts often impose additional requirements, including those relating to labor standards and subcontracting with designated classes of disadvantaged businesses.
We pride ourselves on delivering on our commitments. • We Are INNOVATIVE: We are a collaborative team with diverse technical expertise that equips us to tackle our customers’ toughest challenges.
And ‘We care’ goes beyond the office walls. • We Act with INTEGRITY: Our business and culture are driven by doing the right thing for our team members and customers. We pride ourselves on delivering on our commitments. • We Are INNOVATIVE: We are a collaborative team with diverse technical expertise that equips us to tackle our customers’ toughest challenges.
See Note 3 – Acquisitions in the accompanying notes to the Company’s consolidated financial statements for further information on the Company’s most recent acquisition activity. Acquisitions The Kent Island Transaction.
The Company remains focused on disciplined capital deployment and cultural alignment to 8 ensure acquisitions contribute to long-term value creation. See Note 3 – Acquisitions in the accompanying notes to the Company’s consolidated financial statements for further information on the Company’s most recent acquisition activity. Acquisitions The Pioneer Power Transaction.
These tariffs, along with any additional tariffs or trade restrictions that may be implemented by the United States or other countries, could result in further increased costs, shifts in competitive positions and a decreased supply of steel, resins and aluminum as well as additional imported components and materials.
Increased costs for imported products may also contribute to market-based price increases from domestic suppliers. Existing tariffs, and any additional tariffs or trade restrictions that may be implemented by the United States or other countries, could result in higher costs, shifts in competitive positions, and reduced availability of certain materials and components.
The Company believes its team members are essential to its continued success and the Company seeks to provide every team member with the foundation and environment needed to achieve the team members’ goals. This objective begins with the Company's commitment to inclusion.
We take ownership, move with urgency, and focus on practical solutions that exceed expectations and create value for everyone we serve. The Company believes its team members are essential to its continued success and seeks to provide every team member with the foundation and environment needed to achieve the team members’ goals.
The Company believes that it is appropriate in the current contracting environment to reduce risk and exposure to large, complex, non-owner direct projects where the trend has been for such jobs to provide risks that are difficult to mitigate.
The Company believes that it is appropriate to reduce risk and exposure to large, complex, non-owner direct projects where such projects have historically presented risks that can be difficult to mitigate and it does not align with the Company’s risk-adjusted return expectations.
The Company believes that its ODR service offerings provide a distribution channel through which it can continue to deliver an expanded offering of value-added services direct to building owners that further reinforces its value proposition and differentiated capabilities.
A key element of the Company’s strategy is to continue growing its direct relationships with building owners. The Company believes its relationships with building owners provide an effective channel to deliver an expanded suite of value-added services directly to building owners, reinforcing its value proposition and differentiated capabilities.
The Company also partners with building owners across other market sectors and believes that it is imperative that the partnerships formed between the Company and its building owners share similar core values. Investment in Its Team Members . Employee development underpins the Company’s efforts to execute its strategy.
The Company also partners with building owners across other market sectors and believes that it is imperative that the partnerships formed between the Company and its building owners are aligned on safety, quality and performance expectations.
This evolution is designed to align more closely with current market demands, emerging customer preferences and operational efficiencies, which together contribute to margin expansion. The Company aims to differentiate itself from its competitors by being a one-stop-shop for building owners, capable of providing a full life-cycle of engineered solutions and craft expertise.
The Company aims to differentiate itself from its competitors by being a single-source provider for building owners, capable of providing a full life cycle of engineered solutions and craft expertise. By meeting diverse customer needs under one roof, the Company deepens customer loyalty.
The Consolidated Mechanical Transaction closed on the Consolidated Mechanical Effective Date. As a result of the Consolidated Mechanical Transaction, Consolidated Mechanical became a wholly-owned indirect subsidiary of the Company. Consolidated Mechanical serves the heavy industrial, power and commercial markets.
Prior to the acquisition, Pioneer Power was 100% owned through an employee stock ownership plan. The Pioneer Power Transaction closed on the Pioneer Power Effective Date. As a result of the Pioneer Power Transaction, Pioneer Power became a wholly-owned indirect subsidiary of the Company.
The Company’s tailored approach includes sourcing funding through energy rebates and incentives, energy engineer-led facility assessments and benchmarking, energy-efficient equipment upgrades, and optimizing and maintaining building systems. • Decarbonization Roadmaps . The Company provides customized strategies to help building owners achieve their carbon reduction goals in a cost-effective manner.
Additionally, through consulting and energy engineer-led assessments, it develops tailored solutions and long-term roadmaps focused on reducing carbon emissions while optimizing energy efficiency and system performance. The Company’s tailored approach includes sourcing funding through energy rebates and incentives, energy engineer-led facility assessments and benchmarking, energy-efficient equipment upgrades, and optimizing and maintaining building systems.
Through consulting and energy engineer-led assessments, it develops tailored solutions and long-term roadmaps focused on reducing carbon emissions while optimizing energy efficiency and system performance. Due to the Company’s ongoing relationships with certain building owners established through certain of its service offerings, the Company believes it is well positioned with those owners when they initiate capital construction projects.
Due to the Company’s ongoing relationships with certain building owners, the Company believes it is well positioned with those owners when they initiate capital infrastructure projects.
Customers The Company’s customer base primarily consists of building owners and their third-party representatives, general contractors and construction managers. As stated previously, one of the Company’s strategic goals relate to the continued focus on the growth of its direct relationships with building owners.
See Note 3 – Acquisitions in the accompanying notes to the Company’s consolidated financial statements for further information on the Pioneer Power Transaction. Customers The Company’s customer base primarily consists of building owners and their third-party representatives, as well as general contractors and construction managers.
Based on historical trends, the Company currently estimates that 72% of its GCR backlog as of December 31, 2024 will be recognized as revenue during 2025.
Based on historical trends, the Company currently estimates that 77% of its GCR backlog as of December 31, 2025 will be recognized as revenue during 2026. Competition The MEPC systems services industry is highly competitive and fragmented. The Company competes with a variety of participants, including smaller regional contractors, specialized subcontractors, and large national and multinational companies with broader services.
The Company seeks to attract and retain quality team members by providing them an enhanced career path that offers a stable income, attractive benefits packages and excellent advancement opportunities. The Company invests in its team members through safety and wellness programs, robust internal communication, career development and training programs, recognition programs and succession planning initiatives.
The Company’s strategy sits on the foundation of having great people who deliver a safe, quality-driven customer solution. We seek to attract and retain quality team members by providing them with an enhanced career path that offers a stable income, attractive benefits packages and excellent advancement opportunities.
The cost and availability of materials and equipment can fluctuate based on market conditions, global supply chain disruptions, and changes in commodity pricing.
While the Company sources the majority of its materials domestically, certain components are sourced internationally and may be subject to import regulations, tariffs and other trade restrictions. The cost and availability of materials and equipment can fluctuate based on market conditions, supply chain constraints, labor and transportation dynamics, and changes in commodity pricing.
Furthermore, certain environmental laws impose substantial penalties for non-compliance and other laws, such as the federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), and comparable state laws, which impose strict, retroactive, joint and several liability upon persons that contribute to the release of a “hazardous substance” into the environment.
Other laws, including the federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and comparable state laws, may impose strict, retroactive, joint and several liability on current and former owners and operators, as well as parties that generated, transported or arranged for the disposal of hazardous substances at a site.
Margin Expansion Through Evolved Offerings . The Company continues to focus on expanding its margins by evolving and enhancing its current offerings to building owners. This initiative reflects its commitment to driving sustainable growth, increasing operational efficiency and delivering greater value to its stakeholders.
This initiative reflects the Company’s commitment to driving sustainable growth, increasing operational efficiency and delivering greater value to its stakeholders. This evolution is intended to align more closely with current market demands, emerging customer preferences and operational efficiencies, which together contribute to margin expansion.
This delivery option includes lump-sum or guaranteed maximum price on a fixed fee basis.
This delivery option includes lump-sum or guaranteed maximum price on a fixed fee basis. GCR revenue for the year ended December 31, 2025 decreased by $12.2 million, or 7.0%, to $161.1 million, compared to $173.3 million for the year ended December 31, 2024.
The Company strives to be an indispensable partner to its customers by providing services that are essential to the operation of their businesses. The Company works with building owners primarily in six vertical markets: healthcare, industrial and manufacturing, data centers, life science, higher education and cultural and entertainment.
The Company partners with building owners and operators of mission-critical facilities across healthcare, industrial and manufacturing, data centers, life sciences, higher education, and cultural and entertainment markets.
The Company procures materials and equipment from a network of suppliers and manufacturers. The Company’s supply chain strategy emphasizes maintaining strong relationships with key vendors to ensure consistent quality and timely delivery. While we source the majority of materials domestically, some components are sourced internationally, subject to import regulations and tariffs.
Materials and Equipment The Company’s operations rely on a wide range of materials and equipment necessary to provide mechanical contracting services. The Company procures materials and equipment from a network of suppliers and manufacturers and seeks to maintain relationships with key vendors to support quality and timely delivery.
The Company’s competitors range from smaller local businesses offering highly specialized services to large multinational corporations with broader service offerings. While some competitors may have greater financial resources or local market presence, the Company believes its comprehensive services portfolio, commitment to safety and quality, and focus on customer satisfaction position it to compete effectively.
Certain competitors may have greater financial resources or a stronger presence in specific local markets. The Company believes its breadth of solutions, emphasis on safety and quality, and focus on customer needs support its ability to compete effectively.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFor example, such obligations could: • limit our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes; • restrict us from making strategic acquisitions or cause us to make non-strategic divestitures; • increase our vulnerability to general economic and industry conditions; and • require a substantial portion of our cash flow from operations to be dedicated to the payment of principal and interest on our borrowings, thereby reducing our ability to use cash flow to fund our operations, capital expenditures and future business opportunities.
Biggest changeIn addition, higher levels of indebtedness could increase our vulnerability to adverse economic or industry conditions, limit our ability to pursue strategic opportunities, and require a substantial portion of our cash flow to be dedicated to debt service, thereby reducing funds available for operations and future growth.
If a joint venture partner fails to perform or is financially unable to bear its portion of required capital contributions or other obligations, including liabilities stemming from lawsuits, we could be required to make additional investments, provide additional services or pay more than our proportionate share of a liability to make up for our partner’s shortfall.
If a joint venture partner fails to perform or is financially unable to bear its portion of required capital contributions or other obligations, including liabilities stemming from lawsuits, we could be required to make additional investments, provide additional services or pay more than our proportionate share of a liability to make up for our joint venture partner’s shortfall.
If we are unable to successfully negotiate a change order, or fail to obtain adequate compensation for these matters, we could be required to record in the current period an adjustment to revenue and profit recognized in prior periods. Such adjustments, if substantial, could have a material adverse effect on our financial position, results of operations and cash flows.
If we are unable to successfully negotiate a change order, or fail to obtain adequate compensation for these matters, we could be required to record in the current period an adjustment to revenue and profit recognized in prior periods. 16 Such adjustments, if substantial, could have a material adverse effect on our financial position, results of operations and cash flows.
We have been and will continue to be named as a defendant in legal proceedings claiming damages in connection with the operation of our business. These actions and proceedings may involve claims for, among other things, compensation for alleged 34 personal injury, workers’ compensation, employment law violations and/or discrimination, breach of contract, or property damage.
We have been and will continue to be named as a defendant in legal proceedings claiming damages in connection with the operation of our business. These actions and proceedings may involve claims for, among other things, compensation for alleged personal injury, workers’ compensation, employment law violations and/or discrimination, breach of contract, or property damage.
We perform our work under a variety of conditions, including but not limited to, difficult terrain, difficult site conditions, and busy urban centers where delivery of materials and availability of labor may be impacted, clean-room environments where strict procedures must be followed, and sites which contain harsh or hazardous conditions, refineries and other process facilities.
We perform our work under a variety of conditions, including but not limited to, difficult terrain, difficult site conditions, and busy urban centers where delivery of materials and availability of labor may be impacted, clean-room environments where strict 24 procedures must be followed, and sites which contain harsh or hazardous conditions, refineries and other process facilities.
Based upon the information available to us from the multiemployer pension plans’ administrators, we believe that some of these multiemployer pension plans are underfunded. The 26 unfunded liabilities of these plans may result in required increased future payments by us and the other participating employers. Underfunded multiemployer pension plans may impose a surcharge requiring additional pension contributions.
Based upon the information available to us from the multiemployer pension plans’ administrators, we believe that some of these multiemployer pension plans are underfunded. The unfunded liabilities of these plans may result in required increased future payments by us and the other participating employers. Underfunded multiemployer pension plans may impose a surcharge requiring additional pension contributions.
Additionally, the adoption of new or revised accounting principles could require that we make significant changes to our systems, processes and controls. We cannot predict the effect of future changes to accounting principles, which could have a significant effect on our reported financial results and/or our results of operations, cash flows and liquidity.
Additionally, the adoption of new or revised accounting principles could require that we make significant changes to our systems, processes and controls. We cannot predict the effect 31 of future changes to accounting principles, which could have a significant effect on our reported financial results and/or our results of operations, cash flows and liquidity.
We expect that these provisions might also 33 discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of our company. • Directors removed only for cause.
We expect that these provisions might also discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of our company. • Directors removed only for cause.
These provisions might delay the ability of our stockholders to force consideration of a proposal or for stockholders controlling a majority of our capital stock to take any action, including the removal of directors. • Advance notice requirements for stockholder proposals and director nominations.
These provisions might delay the ability of our stockholders to force consideration of a proposal or for stockholders controlling a majority of our capital stock to take any action, including the removal of directors. 29 • Advance notice requirements for stockholder proposals and director nominations.
In addition, we may issue additional shares of our common stock in the future pursuant to current or future equity compensation plans, upon conversions of preferred stock or debt, upon exercise of warrants or in connection with future acquisitions or financings.
In addition, we may issue additional shares of our common stock in the future pursuant to current or future equity compensation plans, upon conversions of preferred stock or debt, upon exercise 28 of warrants or in connection with future acquisitions or financings.
After the award of a contract, we may perform additional work that was not contemplated in our original contract price, at the request or direction of the customer, without the benefit of an approved change order.
After the award of a contract, we may perform additional work that was not contemplated in the original contract price, at the request or direction of the customer, without the benefit of an approved change order.
Changes in laws, regulations or requirements, or a material failure of any of our subsidiaries or us to comply with any of them, could increase our costs and have other negative impacts on our business.
Changes in laws, regulations or requirements, or a 26 material failure of any of our subsidiaries or us to comply with any of them, could increase our costs and have other negative impacts on our business.
Changes in tax laws and regulations, in addition to changes and conflicts in related interpretations and other tax guidance, could materially impact our provision for income taxes, deferred tax assets and liabilities, and liabilities for uncertain tax positions. 31 Issues relating to tax audits or examinations and any related interest or penalties and uncertainty in obtaining deductions or credits claimed in various jurisdictions could also impact the accounting for income taxes.
Changes in tax laws and regulations, in addition to changes and conflicts in related interpretations and other tax guidance, could materially impact our provision for income taxes, deferred tax assets and liabilities, and liabilities for uncertain tax positions. 27 Issues relating to tax audits or examinations and any related interest or penalties and uncertainty in obtaining deductions or credits claimed in various jurisdictions could also impact the accounting for income taxes.
Failure to achieve and maintain a high level of building systems solutions in our ODR segment could damage our reputation with customers and negatively impact our results. As our ODR business continues to expand, our ability to provide building systems solutions at a very high level is very important to the continued success of our business.
Failure to maintain high quality building systems solutions in our ODR segment could damage our reputation with customers and negatively impact our results. As our ODR business continues to expand, our ability to provide building systems solutions at a very high level is very important to the continued success of our business.
Further, despite our decentralized nature, a violation at one of our locations could impact the ability of the other locations to bid on and perform government contracts; additionally, because of our decentralized nature, we face risk in maintaining compliance with all local, state and federal government contracting requirements.
Further, a violation at one of our locations could impact the ability of the other locations to bid on and perform government contracts. Because of our decentralized nature, we face risk in maintaining compliance with all local, state and federal government contracting requirements.
Success on these joint 22 projects depends upon the various risks discussed elsewhere in this section and on whether our joint venture partners satisfy their contractual obligations. We and our joint venture partners are generally jointly and severally liable for all liabilities and obligations of the joint ventures.
Success on these joint projects depends upon the various risks discussed elsewhere in this section and on whether our joint venture partners satisfy their contractual obligations. 21 We and our joint venture partners are generally jointly and severally liable for all liabilities and obligations of the joint ventures.
Furthermore, if we are unable to adequately address our partner’s performance issues, the customer may terminate the project, which could result in legal liability to us, harm to our reputation and reduction to our profit on a project.
Furthermore, if we are unable to adequately address our joint venture partner’s performance issues, the customer may terminate the project, which could result in legal liability to us, harm to our reputation and reduction to our profit on a project.
However, if we were unable to maintain effective internal control over financial reporting, or if we identify additional material weaknesses in our internal control over financial reporting, our management would be unable to assert in future reports that our disclosure controls and procedures and our internal control over financial reporting are effective.
However, if we were unable to maintain effective internal control over financial reporting, or if we 30 identify material weaknesses in our internal control over financial reporting, our management would be unable to assert in future reports that our disclosure controls and procedures and our internal control over financial reporting are effective.
The payment of cash dividends on our common stock rests within the discretion of our Board of Directors and will depend, among other things, upon our earnings, unencumbered cash, capital requirement and our financial condition, as well as other relevant factors.
The payment of cash dividends on our common stock rests within the discretion of our Board of Directors and will depend, among other things, upon our earnings, unencumbered cash, capital requirements and our financial condition, as well as other relevant factors.
To date, we have not paid dividends on our common stock nor do we anticipate that we will pay dividends in the foreseeable future. As of December 31, 2024, we do not have any preferred stock outstanding that has any preferential dividends.
To date, we have not paid dividends on our common stock nor do we anticipate that we will pay dividends in the foreseeable future. As of December 31, 2025, we do not have any preferred stock outstanding that has any preferential dividends.
In addition, when our building systems solutions fail to perform as expected, we could be exposed to warranty, product liability, personal injury and other claims. 15 Our contract backlog is subject to unexpected adjustments and cancellations and could be an uncertain indicator of our future earnings.
In addition, when our building systems solutions fail to perform as expected, we could be exposed to warranty, product liability, personal injury and other claims. Our contract backlog is subject to adjustments, delays and cancellations and could be an uncertain indicator of our future earnings.
Performing work under these conditions can increase the cost of such work or negatively affect efficiency and, therefore, our profitability. A pandemic, epidemic or outbreak of an infectious disease, such as the coronavirus (“COVID-19”), in the markets in which we operate or that otherwise impacts our facilities or suppliers could adversely impact our business.
Performing work under these conditions can increase the cost of such work or negatively affect efficiency and, therefore, our profitability. A pandemic, epidemic or outbreak of an infectious disease in the markets in which we operate or that otherwise impacts our facilities or suppliers could adversely impact our business.
Our obligation to contribute to multiemployer pension plans could give rise to significant expenses and liabilities in the future. We contribute to approximately 50 multiemployer pension plans in the United States under collective bargaining agreements that generally provide pension benefits to employees covered by these agreements. Approximately 45% of our current employees are members of collective bargaining units.
Our obligation to contribute to multiemployer pension plans could give rise to significant expenses and liabilities in the future. We contribute to approximately 70 multiemployer pension plans in the United States under collective bargaining agreements that generally provide pension benefits to employees covered by these agreements. Approximately 46% of our current employees are members of collective bargaining units.
Our contributions to these plans were approximately $10.3 million for the year ended December 31, 2024 and $11.6 million and $12.6 million for the years ended December 31, 2023 and 2022, respectively. The costs of providing benefits through such plans have increased in recent years.
Our contributions to these plans were approximately $14.3 million for the year ended December 31, 2025 and $10.3 million and $11.6 million for the years ended December 31, 2024 and 2023, respectively. The costs of providing benefits through such plans have increased in recent years.
Changes in accounting rules and regulations could adversely affect our financial results. Accounting rules and regulations are subject to review and interpretation by the Financial Accounting Standards Board (the “FASB”), the SEC and various other governing bodies. A change in U.S. GAAP could have a significant effect on our reported financial results.
Changes in accounting rules and regulations could adversely affect our financial results. Accounting rules and regulations are subject to review and interpretation by the Financial Accounting Standards Board (the “FASB”), the SEC and various other governing bodies. A change in U.S. generally accepted accounting principles (“GAAP”) could have a significant effect on our reported financial results.
Federal Government Contractors must comply with many regulations and other requirements that relate to the award, administration and performance of government contracts. A violation of these laws and regulations could result in imposition of fines and penalties, the termination of a government contract, or debarment from bidding on government contracts in the future.
Federal government contractors must comply with many regulations and other requirements that relate to the award, administration and performance of government contracts. A violation of these laws and regulations could result fines or penalties, the termination of a government contract, or restrictions on government contracts in the future.
These factors include, among other things: • actual or anticipated variations in our quarterly results of operations; • recommendations by securities analysts; • operating and stock price performance of other companies that investors deem comparable to us; • political and economic conditions; • news reports relating to trends, concerns and other issues in the financial services industry generally; • perceptions in the marketplace regarding us and/or our competitors; • the addition or departure of key personnel; • new technology used, or services offered, by competitors; and • changes in government regulations.
These factors include, among other things: • actual or anticipated variations in our quarterly results of operations; • recommendations by securities analysts; • reports, publications or commentary by securities analysts or other market participants that may be critical of us, our business, our management our industry; • operating and stock price performance of other companies that investors deem comparable to us; • political and economic conditions; • news reports relating to trends, concerns and other issues in the financial services industry generally; • perceptions in the marketplace regarding us and/or our competitors; • the addition or departure of key personnel; • new technology used, or services offered, by competitors; and • changes in government regulations.
In addition, our subsidiaries that perform work for federal government entities are subject to additional federal laws and regulatory and contractual requirements. Changes in any of these laws, or any subsidiary’s material failure to comply with them, can adversely impact our operations by, among other things, increasing costs, distracting management’s time and attention from other items, and harming our reputation.
In addition, our subsidiaries that perform work for federal government entities are subject to additional federal statutory, regulatory and contractual requirements. Changes in any of these laws, or any subsidiary’s material failure to comply with them, can adversely impact our operations by, among other things, increasing costs, and harming our reputation.
We often warrant the services provided, typically as a function of contract, guaranteeing the work performed against defects in workmanship and the material we supply. If warranty claims occur, we could be required to repair or replace warrantied work in place at our cost.
Contractual warranty obligations could adversely affect our profits and cash flow. We often warrant the services provided, typically as a function of contract, guaranteeing the work performed against defects in workmanship and the material we supply. If warranty claims occur, we could be required to repair or replace warrantied work in place at our cost.
As a result, certain of our locations may experience higher or lower levels of profitability and growth than our other locations. Acquisitions, divestitures, and other strategic transactions could fail to achieve financial or strategic objectives, disrupt our ongoing business, and adversely impact our results of operations.
As a result, certain of our locations may experience higher or lower levels of profitability and growth than our other locations. Acquisitions, divestitures, and other strategic transactions may fail to achieve anticipated financial or strategic benefits and could disrupt our business, and adversely affect our results of operations.
If the multiemployer pension plans in which we participate have significant underfunded liabilities, such underfunding could increase the size of our potential withdrawal liability. No liability for underfunding of multiemployer pension plans was recorded in our consolidated financial statements for the years ended December 31, 2024 or 2023. Increases in healthcare costs could adversely affect our financial results.
If the multiemployer pension plans in which we participate have significant underfunded liabilities, such underfunding could increase the size of our potential withdrawal liability. No liability for underfunding of multiemployer pension plans was recorded in our consolidated financial statements for the years ended December 31, 2025 or 2024.
As part of our business, we are a party to special purpose, project specific joint venture arrangements, pursuant to which we typically jointly bid on and execute particular projects with other companies in the construction industry.
Our participation in construction joint ventures exposes us to liability and/or harm to our reputation for failures of our partners. As part of our business, we are a party to special purpose, project specific joint venture arrangements, pursuant to which we typically jointly bid on and execute particular projects with other companies in the construction industry.
We may be the controlling member of a joint venture; however, to the extent we are not controlling, we may have limited control over certain of the decisions made by the controlling member with respect to the work being performed by the joint venture. The other member(s) may not be subject to the same compliance and regulatory requirements.
From time to time, we may be the controlling member of a joint venture; however, to the extent we are not controlling, we may have limited control over certain of the decisions made by the controlling member with respect to the work being performed by the joint venture.
Examples of such misconduct include employee or subcontractor theft, the failure to comply with safety standards, state-specific laws related to automobile operations (including mobile phone usage), customer requirements, environmental laws, DBE regulatory compliance, and any other applicable laws or regulations.
Examples of such misconduct include employee or subcontractor theft, the failure to comply with safety standards, state-specific laws related to automobile operations (including mobile phone usage), customer requirements, environmental laws, DBE regulatory compliance, and any other applicable laws or regulations. The precautions we take may not be effective and are subject to inherent limitations, including human error and fraud.
If we choose to raise capital by selling shares of our common stock for any reason, the issuance would have a dilutive effect on the holders of our common stock and could have a material negative effect on the market price of our common stock. 32 If equity research analysts publish unfavorable commentary or downgrade our common stock, the price and trading volume of our common stock could decline.
If we choose to raise capital by selling shares of our common stock for any reason, the issuance would have a dilutive effect on the holders of our common stock and could have a material negative effect on the market price of our common stock.
Any liability resulting from an asserted design defect with respect to our projects may have a material adverse effect on our financial position, results of operations and cash flows. If we experience delays and/or defaults in customer payments, we could be unable to recover all expenditures.
Any liability resulting from an asserted design defect with respect to our projects may have a material adverse effect on our financial position, results of operations and cash flows. Delays in, disputes over, or defaults on customer payments could adversely affect our liquidity, results of operations, and financial condition.
Misconduct by our employees, subcontractors or partners, or our overall failure to comply with laws or regulations could harm our reputation, damage our relationships with customers, reduce our revenue and profits, and subject us to criminal and civil enforcement actions.
Any of these factors could materially and adversely affect our business, results of operations, and cash flows. Misconduct by our employees, subcontractors or partners, or our overall failure to comply with laws or regulations could harm our reputation, damage our relationships with customers, reduce our revenue and profits, and subject us to criminal and civil enforcement actions.
Such delays, if they occur, could have material and adverse effects on our operating results for current and future periods until the affected contracts are completed. We may incur significant costs in performing our work in excess of the original project scope and contract amount without having an approved change order.
Any such delays could have a material adverse effect on our operating results and cash flows for the periods affected. We may incur significant costs in performing our work in excess of the original project scope and contract amount without having an approved change order.
When we are awarded these projects, we typically perform the design and engineering work in-house. On other projects, we are not the designer, but provide assistance directly to the project design team.
Design/Build projects provide the customer with a single point of responsibility for both design and construction. When we are awarded these projects, we typically perform the design and engineering work in-house. On other projects, we are not the designer, but provide assistance directly to the project design team.
Overall, the potential impact of a pandemic, epidemic, outbreak of an infectious disease or other public health crisis with respect to our markets or our facilities is difficult to predict and could adversely impact our business. Future climate change could adversely affect us.
Overall, the potential impact of a pandemic, epidemic, outbreak of an infectious disease or other public health crisis with respect to our markets or our facilities is difficult to predict and could adversely impact our business. Climate change, including physical risks and the transition to lower-emission building practices, could increase our costs, disrupt operations, and adversely affect our financial results.
Additionally, immigration laws and labor regulations are complex, subject to change, and vary across jurisdictions, which could create challenges for maintaining compliance. The failure to identify such illegal immigrants may result in fines or other penalties being imposed upon us, which could have a material adverse effect on our financial position, results of operations and cash flows.
The failure to identify such illegal immigrants may result in fines or other penalties being imposed upon us, which could have a material adverse effect on our financial position, results of operations and cash flows.
If we do not effectively manage the size and cost of our operations, our existing infrastructure may become either strained or overly-burdened, and we may be unable to increase revenue growth.
Our results of operations could also be adversely affected if we are required to reduce prices to remain competitive. 14 If we do not effectively manage the size and cost of our operations, our infrastructure may become strained or overly-burdened, and we may be unable to increase revenue growth.
As of March 6, 2025, we had an aggregate of 11,353,379 shares of our outstanding common stock, of which 1,074,684 shares were held by our current directors and officers. There were no holders of greater than 10% of our common stock as of March 6, 2025.
As of February 27, 2026, we had an aggregate of 11,679,391 shares of our outstanding common stock, of which 767,223 shares were held by our current directors and officers. There were no holders of greater than 10% of our common stock as of February 27, 2026.
We place significant decision making powers with our business units’ management, which presents certain risks that may cause the operating results of individual branches to vary. We operate from various locations across the eastern United States, supported by corporate executives and services, with local business unit management retaining responsibility for day-to-day operations and adherence to applicable laws.
We operate from various locations across the Eastern and Midwestern regions of the United States, supported by corporate executives and services, with local business unit management retaining responsibility for day-to-day operations and adherence to applicable laws.
Failure to provide our services in accordance with professional standards or contractual requirements could expose us to significant monetary damages. Our services often involve professional judgments regarding the planning, design, development, construction, or operations and management of complex facilities.
Failure to perform our services in accordance with professional standards or contractual requirements could expose us to significant liability and adversely affect our business and results of operations. Our services frequently involve professional judgment in the planning, design, construction, operation, and maintenance of complex facilities.
Vertical consolidation is also expected to intensify competition in the industry. We can offer no assurance that our existing or prospective customers will continue to outsource specialty contracting services in the future. In addition, new and emerging technologies and services are expected to significantly impact the industry in coming years.
We can offer no assurance that our existing or prospective customers will continue to outsource specialty contracting services in the future. In addition, new and emerging technologies and service models may further alter competitive dynamics in the industry.
The trading market for our common stock could be affected by equity research analysts’ research or reports about us and our business. The price of our stock could decline if one or more securities analysts downgrade our stock or if analysts issue other unfavorable commentary about us or our business.
If one or more analysts issue unfavorable research, downgrade our common stock, or provide negative commentary about our business or prospects, the market price of our common stock could decline.
Additionally, any impairment of goodwill or other intangible assets as a result of our failure to successfully integrate acquisitions could adversely affect our results of operations and financial position. Design/Build and Design/Assist contracts subject us to the risks of design errors and omissions. Design/Build projects provide the customer with a single point of responsibility for both design and construction.
These outcomes could adversely affect our results of operations and financial position. In addition, a failure to successfully integrate acquisitions could result in impairment charges related to goodwill or other intangible assets, which could materially and adversely affect our earnings in the period recognized. Design/Build and Design/Assist contracts subject us to the risks of design errors and omissions.
As of December 31, 2024, our business units operate in 22 states, which exposes us to a variety of state and local laws and regulations, particularly those pertaining to contractor licensing requirements. These laws and regulations govern many aspects of our business, and there are often different standards and requirements in different locations.
As of December 31, 2025, our business units operate primarily in the Eastern and Midwestern regions of the United States, which exposes us to a variety of state and local laws and regulations, including those related to contractor licensing requirements. These laws and regulations govern many aspects of our business, and standards and requirements may vary by jurisdiction.
Furthermore, increased enforcement of immigration laws, changes to employment verification requirements, or new legislation or regulations could further heighten these risks and lead to additional compliance costs, operational disruptions, or reputational harm. Tax matters, including changes in corporate tax laws and disagreements with taxing authorities, could impact our results of operations and financial condition.
Furthermore, changes to immigration policies, as well as the changes in the interpretation, application, or enforcement of immigration laws, changes to employment verification requirements, or new legislation or regulations that impact immigration practices could further heighten these risks and lead to additional compliance costs, operational disruptions, or reputational harm.
We have taken steps that we believe are sufficient and appropriate to ensure compliance with immigration laws. However, we cannot provide assurance that our management has identified, or will identify in the future, all undocumented immigrants who work for us.
However, we cannot provide assurance that our management has identified, or will identify in the future, all undocumented immigrants who work for us. Additionally, immigration laws and labor regulations are complex, subject to change, and vary across jurisdictions, which could create challenges for maintaining compliance.
As Federal Government Contractors under applicable federal regulations, our subsidiaries are subject to a number of rules and regulations, and our contracts with government entities are subject to audit. Violations of the applicable rules and regulations could result in a subsidiary being barred from future government contracts.
As federal government contractors, our subsidiaries are subject to a number of rules and regulations, and our contracts with government entities are subject to audit. Noncompliance with applicable requirements could limit a subsidiary’s ability to obtain or perform government contracts.
Furthermore, the costs associated with a failed acquisition or attempted acquisition transaction could have an adverse effect on our financial position, results of operations and cash flows. Our failure to successfully integrate acquisitions could adversely affect our financial results.
Furthermore, the costs associated with unsuccessful or abandoned acquisition efforts, including transaction, advisory, and integration-related expenses, could adversely affect our financial position, results of operations, and cash flows. Our failure to successfully integrate acquired businesses could adversely affect our operating results and financial condition.
Since we bear the risk of cost overruns in most of our contracts, we may experience reduced profits or, in some cases, losses, if costs increase above estimates.
Because we bear the risk of cost overruns on many of our contracts, we may experience reduced profitability or incur losses if actual costs exceed our estimates.
General Risk Factors Failure or circumvention of our disclosure controls and procedures or internal controls over financial reporting could seriously harm our financial condition, results of operations, and business. We plan to continue to maintain and strengthen internal controls and procedures to enhance the effectiveness of our disclosure controls and internal controls over financial reporting.
General Risk Factors Failure or circumvention of our disclosure controls and procedures or internal controls over financial reporting could adversely affect our financial reporting and business.
We cannot guarantee that the revenue projected in our contract backlog will be realized or, if realized, will be profitable. Projects reflected in the contract backlog may be affected by project cancellations, scope adjustments, time extensions or other changes. Such changes may materially and adversely affect the revenue and profit we ultimately realize on these projects.
We cannot guarantee that the revenue projected in our contract backlog will be realized or, if realized, will be profitable. Projects included in backlog are subject to cancellations, scope changes, pricing adjustments, schedule delays, and other modifications, any of which could materially and adversely affect the amount and timing of revenue and profit ultimately recognized.
We rely heavily on third-party subcontractors to perform some, and often a majority, of the work on many of our contracts. We also rely almost exclusively on third-party suppliers to provide the equipment and materials (including pipe, sheet metal and control systems) for our contracts.
We rely extensively on third-party subcontractors to perform a significant portion of the work on many of our contracts and on third-party suppliers to provide equipment and materials required for project execution.
We conduct business across the United States and file income taxes in the federal and various state jurisdictions. Significant judgment is required in our accounting for income taxes. In the ordinary course of our business, there are transactions and calculations in which the ultimate tax determination is uncertain.
In the ordinary course of our business, there are transactions and calculations in which the ultimate tax determination is uncertain.
We expect competition to remain intense for the foreseeable future, presenting us with significant challenges in our ability to maintain strong growth rates and acceptable profit margins. We also expect competition from the in-house service organizations of our customers who have employees who perform service and maintenance work similar to the services we provide as part of our ODR offering.
We also expect competition from the in-house service organizations of our customers who have employees who perform service and maintenance work similar to the services we provide as part of our ODR segment. Vertical consolidation is also expected to intensify competition in the industry.
Information technology system failures, network disruptions or cybersecurity breaches could adversely affect our business. We use sophisticated information technology systems, networks, and infrastructure in conducting some of our day-to-day operations and providing services to certain customers, including technology used for building designs, project modeling and 29 scheduling.
Information technology system failures, cybersecurity incidents, or data privacy breaches could disrupt our operations and adversely affect our business, results of operations, and reputation. We rely on information technology systems, networks, and infrastructure to support our operations and to provide services to our customers, including systems used for project design, scheduling, modeling, financial reporting, and data management.
Prohibition against bidding on future government contracts could have an adverse effect on our financial position, results of operations and cash flows. Past and future environmental, safety and health regulations could impose significant additional costs on us that reduce our profits. The systems we install are subject to various statutes and regulations.
Prohibition against bidding on future government contracts could have an adverse effect on our financial position, results of operations and cash flows. Changes in environmental, safety, and health regulations or licensing requirements could increase our compliance costs or limit our ability to perform certain work.
We contract third-party vendors that use AI in products and/or services they provide and we may not have full control or visibility over the quality, performance, security or compliance of the products and services that incorporate AI-related technology. AI algorithms that our third-party vendors use may be flawed or may be based on datasets that are biased or insufficient.
We rely, in part, on third-party vendors that may incorporate AI technologies into the products or services they provide, and we may have limited control over or visibility into the design, training data, performance, security, or regulatory compliance of such technologies.
Continued increases in healthcare costs or additional costs created by future health care reform laws adopted by Congress, state legislatures, or municipalities could adversely affect our results of operations and financial position. Our business may be affected by the work environment.
Any such increases could materially and adversely affect our results of operations and financial position. Our business may be affected by the work environment in which we operate.
Deliberate, malicious acts, including terrorism and sabotage, could damage our facilities, disrupt our operations or injure our employees, contractors, customers or the public and result in liability to us.
Deliberate or malicious acts, including terrorism, sabotage, vandalism, or theft, could result in damage to facilities, equipment, or installed work, injury to employees, contractors, customers, or the public, or increased security requirements imposed by governmental authorities.
Our failure to adequately recover on claims brought by us against contractors, project owners or other project participants for additional contract costs could have a negative impact on our results of operations and financial condition, liquidity and on our credit facilities. 17 In certain circumstances, we assert or have asserted claims against project contractors, owners, engineers, consultants, subcontractors or others involved in a project for additional costs exceeding the contract price or for amounts not included in the original contract price.
We may be unable to recover additional claimed costs on projects, which could adversely affect our profitability and liquidity. In certain circumstances, we assert claims against project owners, contractors, subcontractors, engineers, consultants, or other parties involved in a project for additional costs incurred beyond the original contract price.
If we are unable to attract and retain qualified managers, employees, joint venture partners, subcontractors and suppliers, we will be unable to operate efficiently, which could reduce our profitability. Our business is labor intensive, and many of our operations experience a high rate of employee turnover.
If we are unable to attract and retain qualified personnel, subcontractors, joint venture partners, and suppliers, our ability to operate efficiently and profitably could be adversely affected. Our business is labor intensive and depends on the availability of qualified management, technical, and field personnel, as well as reliable subcontractors, joint venture partners, and suppliers.
Despite a significant portion of our project revenue being generated from smaller, more risk averse contracts, our results of operations may fluctuate quarterly and annually depending on whether, and when, large project awards occur, as well as the commencement and progress of work under large contracts already awarded.
Although a significant portion of our revenue is derived from smaller, lower-risk projects, our results of operations may fluctuate from period to period depending on the timing and size of contract awards, the commencement of work on newly awarded projects, and the progress of work on larger contracts.
In addition, the timing of the revenue, earnings and cash flows from our contracts in backlog could be delayed by a number of factors, including adverse weather conditions; other subcontractors delaying the progression of proceeding work; delays in receiving material and equipment from suppliers and services from subcontractors; and changes in the scope of work to be performed.
In addition, the timing of revenue recognition, earnings, and cash flows from contracts included in backlog may be affected by factors such as adverse weather conditions; delays caused by other contractors or subcontractors; supply chain disruptions affecting the availability of materials or equipment; or changes in project scope.
If we are unable to retain qualified subcontractors or suppliers, or if our subcontractors or suppliers do not perform as anticipated for any reason, our execution and profitability could be harmed. By contract, we remain liable to our customers for the performance or failures of our subcontractors and suppliers.
If we are unable to retain qualified subcontractors or suppliers, or if they fail to perform as expected, our ability to execute projects efficiently and profitably could be adversely affected. Although subcontractors and suppliers perform portions of the work, we generally remain contractually responsible to our customers for their performance.
An adverse claim or judgment resulting from such a challenge could have a material adverse effect on our financial position, results of operations and cash flows. Strikes or work stoppages could have a negative impact on our operations and results. We are a party to collective bargaining agreements covering a majority of our craft workforce.
An adverse outcome resulting from such a challenge could require changes to our operating structure or practices and could materially and adversely affect our financial position, results of operations, and cash flows. In addition, a significant portion of our craft workforce is covered by collective bargaining agreements.
In addition, if any of these analysts ceases coverage of us, we could lose visibility in the market, which in turn could cause our common stock price or trading volume to decline and our common stock to be less liquid.
In addition, if analysts cease or reduce coverage of our Company, our visibility in the capital markets may decrease, which could result in reduced trading volume, decreased liquidity, and increased volatility in the market price of our common stock. Any of these developments could adversely affect the market value of our common stock.
A significant portion of our business depends on our ability to provide surety bonds. Any difficulties in the financial and surety markets may cause a material adverse effect on our bonding capacity and availability. Certain of our projects require construction surety bonds (bid, payment, and performance bonds).
Our ability to obtain sufficient surety bonding is critical to our business, and any reduction in bonding capacity or availability could adversely affect our operations and results of operations. Certain of our projects require the issuance of bid, performance, and payment bonds.
Our management has concluded that our disclosure controls and procedures and internal control over financial reporting are effective.
Any such events could harm our reputation, reduce investor confidence, adversely affect the market price of our common stock, and materially and adversely affect our financial condition, results of operations, and business. Our management has concluded that our disclosure controls and procedures and internal control over financial reporting are effective.
Further, if we contract with a DBE contractor that is not properly qualified to perform a commercially useful function, we could be held responsible for violation of federal, state or local laws related to DBE contracting. Our participation in construction joint ventures exposes us to liability and/or harm to our reputation for failures of our partners.
In addition, if we engage a DBE subcontractor that is not properly qualified or does not perform a commercially useful function, we could be subject to claims of non-compliance with federal, state, or local DBE regulations.
The utilization of our workforce is impacted by numerous factors, including: • our estimates of headcount requirements and our ability to manage attrition; • efficiency in scheduling projects and our ability to minimize downtime between project assignments; • productivity; • labor disputes; and • availability of skilled labor at any given time.
Workforce utilization is influenced by a number of factors, including the accuracy of our headcount planning, our ability to attract and retain skilled labor, productivity levels, project scheduling efficiency, labor disputes, and the timing of project awards and completions.
If we fail to complete these projects with the minimum DBE participation, we may be held responsible for breach of contract, which may include restrictions on our ability to bid on future projects, as well as monetary damages.
If we are unable to meet applicable DBE participation requirements, we may be deemed in breach of contract, which could result in monetary damages, increased project costs, reduced profitability, or restrictions on our ability to bid on or be awarded future projects.
It is impossible to predict the full nature and effect of judicial, legislative or regulatory developments relating to health and safety regulations and environmental protection regulations applicable to our operations. Our failure to comply with immigration laws and labor regulations could affect our business. In certain markets, we rely heavily on our immigrant labor force.
Our failure to comply with immigration laws and labor regulations could affect our business. In certain markets, we rely heavily on our immigrant labor force. We have taken steps that we believe are sufficient and appropriate to ensure compliance with immigration laws.
The potential impact of recoveries for claims may be material in future periods when they, or a portion of them, become probable and estimable or are settled and therefore these claims have the ability to negatively impact our results of operations and financial condition.
Recoveries related to claims may be material in the periods in which they are resolved or become probable and estimable.
If interest rates increase, our debt service obligations on the variable rate indebtedness will increase even though any amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.
Increases in interest rates could significantly increase our interest expense and debt service obligations, even if the principal amount of our borrowings remains unchanged, and could reduce our net income and cash flows.
A material portion of our revenue is recognized using the cost-to-cost method of accounting, which results in recognizing contract revenue and earnings ratably over the contract term in the proportion that our actual costs bear to our estimated 23 contract costs. The earnings or losses recognized on individual contracts are based on estimates of contract revenue, costs and profitability.
Our use of the cost-to-cost method of accounting requires significant estimates and judgments and may result in reductions or reversals of previously recognized revenue or profit. A significant portion of our revenue is recognized over time using the cost-to-cost method of accounting, which requires us to estimate total contract revenue, costs, and expected profitability.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisk Factors – “ Information technology system failures, network disruptions or cybersecurity breaches could adversely affect our business .”
Biggest changeRisk Factors – “ Information technology system failures, cybersecurity incidents, or data privacy breaches could disrupt our operations and adversely affect our business, results of operations, and reputation.”
In furtherance of assessing, identifying, and managing material cybersecurity risks; the Company: • Employs advanced technology solutions, such as proactive detection tools, to safeguard our assets and identify threats within its environment. • Conducts routine cyber education and awareness training sessions to empower team members with the necessary knowledge and cultivate a strong security culture across the organization. • Regularly assesses our cybersecurity program against the NIST Cybersecurity Framework, using the findings to develop action plans and track progress to completion. • Organizes tabletop exercises and drills to simulate cyber incidents, enhancing its incident response and recovery capabilities. • Analyzes internal and external cybersecurity incidents and threat intelligence to assess their relevance to its environment and industry, crafting actionable plans accordingly. • Manages an enterprise-wide disaster recovery governance program, including cybersecurity-related standards and compliance procedures. • Performs regular cybersecurity-related disaster recovery testing to ensure the recoverability of its critical systems, supporting business continuity across various lines. • Fosters integration between business units and corporate divisions with its internal cybersecurity team, embedding cybersecurity requirements into operational environments and influencing strategic decisions, budgeting, and processes (e.g., Security by Design).
In furtherance of assessing, identifying, and managing material cybersecurity risks; the Company: • Employs advanced technology solutions, such as proactive detection tools, to safeguard our assets and identify threats within its environment. • Conducts routine cyber education and awareness training sessions to empower team members with the necessary knowledge and cultivate a strong security culture across the organization. • Regularly assesses our cybersecurity program against the NIST Cybersecurity Framework, using the findings to develop action plans and track progress to completion. • Organizes tabletop exercises and drills to simulate cyber incidents, enhancing its incident response and recovery capabilities. 32 • Analyzes internal and external cybersecurity incidents and threat intelligence to assess their relevance to its environment and industry, crafting actionable plans accordingly. • Manages an enterprise-wide disaster recovery governance program, including cybersecurity-related standards and compliance procedures. • Performs regular cybersecurity-related disaster recovery testing to ensure the recoverability of its critical systems, supporting business continuity across various lines. • Fosters integration between business units and corporate divisions with its internal cybersecurity team, embedding cybersecurity requirements into operational environments and influencing strategic decisions, budgeting, and processes (e.g., Security by Design).
The Company conducts security assessments of third-party technology providers before engagement and maintains ongoing monitoring to ensure compliance with Company cybersecurity standards. The monitoring 36 includes assessments (e.g., reviewing vendor cybersecurity related attestation and disclosures (SOC 2 Type 2, etc.)) by the Company’s Senior Vice President and Chief Information Officer (“CIO”) and on an ongoing basis by its security engineers.
The Company conducts security assessments of third-party technology providers before engagement and maintains ongoing monitoring to ensure compliance with Company cybersecurity standards. The monitoring includes assessments (e.g., reviewing vendor cybersecurity related attestation and disclosures (SOC 2 Type 2, etc.)) by the Company’s Senior Vice President and Chief Information Officer (“CIO”) and on an ongoing basis by its security engineers.
Despite its efforts to maintain processes which mitigate cybersecurity risks, there is no guarantee that such risks may not have a material effect on 37 the Company’s business strategy, results of operations, and financial condition in the future. For additional information on cybersecurity risks the Company may face, see Part I, Item 1A.
Despite its efforts to maintain processes which mitigate cybersecurity risks, there is no guarantee that such risks may not have a material effect on the Company’s business strategy, results of operations, and financial condition in the future. For additional information on cybersecurity risks the Company may face, see Part I, Item 1A.
These briefings encompass a broad range of topics, including: • Current cybersecurity landscape and emerging threats; • Status of ongoing cybersecurity initiatives and strategies; • Incident reports and learnings from any cybersecurity events; and • Compliance with regulatory requirements and industry standards.
These briefings encompass a broad range of topics, including: • Current cybersecurity landscape and emerging threats; • Status of ongoing cybersecurity initiatives and strategies; 33 • Incident reports and learnings from any cybersecurity events; and • Compliance with regulatory requirements and industry standards.
The Company has implemented a cybersecurity risk management program that aligns with the National Institute of Standards and Technology (NIST) Cybersecurity Framework to manage such material risks and to safeguard the Company’s information systems, protect the confidentiality, integrity, and availability of the Company’s and its customers’ data, and maintain the trust and confidence of our customers, business partners and team members.
The Company has implemented a cybersecurity risk management program that aligns with the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework to manage such material risks and to safeguard the Company’s information systems, protect the confidentiality, integrity, and availability of the Company’s and its customers’ data, and maintain the trust and confidence of our customers, business partners and team members.
In addition to their regularly scheduled meetings, members of the Board of Directors, the CIO, CFO and CEO regularly engage in ad hoc conversations regarding emerging or potential cybersecurity risk and developments in the cybersecurity domain. The Board of Directors actively participates in strategic decisions making related to cybersecurity, offering guidance and approval for major initiatives.
In addition to their regularly scheduled meetings, members of the Board of Directors, the CIO, CFO and CEO regularly engage in ad hoc conversations regarding emerging or potential cybersecurity risk and developments in the cybersecurity domain. The Board of Directors actively participates in strategic decision making related to cybersecurity, offering guidance and approval for major initiatives.
As part of the Company’s entire Board of Directors operational risk management responsibilities, it has oversight of risks from cybersecurity threats. Notwithstanding that fact, the full Board of Directors has been designated as primary responsible for oversight of the Company’s cybersecurity risk management.
As part of the Company’s entire Board of Directors operational risk management responsibilities, it has oversight of risks from cybersecurity threats. Notwithstanding that fact, the full Board of Directors has been designated as primarily responsible for oversight of the Company’s cybersecurity risk management.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLegal Proceedings See Note 13 – Commitments and Contingencies in the accompanying notes to the Company’s consolidated financial statements for further information regarding the Company’s legal proceedings.
Biggest changeSee Note 14 — Leases in the accompanying notes to the Company’s consolidated financial statements for additional information regarding the Company’s leases. Item 3. Legal Proceedings See Note 13 – Commitments and Contingencies in the accompanying notes to the Company’s consolidated financial statements for further information regarding the Company’s legal proceedings.
Item 2. Properties As of December 31, 2024, the Company leases several properties, consisting of offices, warehouses, fabrication and supply shops within 10 states across the eastern United States. Generally, these leases range from five to ten years and are on terms the Company believes to be commercially reasonable.
Item 2. Properties As of December 31, 2025, the Company leases several properties, consisting of offices, warehouses, fabrication and supply shops within the Eastern and Midwestern regions of the United States. Generally, these leases range from five to ten years and are on terms the Company believes to be commercially reasonable.
A majority of these premises are leased from individuals or entities with whom the Company has no other business relationship. In certain instances, the Company leases property from current or former team members. The Company’s leased premises range in size from approximately 1,000 square feet to 150,000 square feet.
A majority of these premises are leased from individuals or entities with whom the Company has no other business relationship. In certain instances, the Company leases property from entities associated with former employees who became part of the Company through acquisitions. The Company’s leased premises range in size from approximately 1,000 square feet to 150,000 square feet.
The Company utilizes substantially all of its leased property and believes there will be no difficulty either in negotiating the renewal of such leases as they expire or finding alternative space, if necessary. See Note 14 — Leases in the accompanying notes to the Company’s consolidated financial statements for additional information regarding the Company’s leases. Item 3.
The Company utilizes substantially all of its leased property and believes there will be no difficulty either in negotiating the renewal of such leases as they expire or finding alternative space, if necessary.
Added
In addition to its leased facilities, as a result of the Company’s acquisition of Pioneer Power during 2025, the Company now owns an approximate 40,000 square foot facility located in Woodbury, Minnesota that is used for operations, fabrication, warehousing and general office purposes.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeAngerosa has served as President of Harper Limbach since July 2020, which includes the following entities: Harper Limbach LLC and Harper Limbach Construction LLC. Prior to his appointment as President of Harper Limbach, Mr. Angerosa served as the Company’s Senior Vice President and Branch Manager from May 2018 to July 2020, in which he oversaw the Tampa business unit.
Biggest changeAngerosa served as the Regional President of the Southeast region of the Company since January 2025. Previously, Mr. Angerosa served as President of Harper Limbach since July 2020, which includes the following entities: Harper Limbach LLC and Harper Limbach Construction LLC. Prior to his appointment as President of Harper Limbach, Mr.
Sharp has played an active role in the construction industry serving on the board of MCACO Board of Directors and has been a Labor Management Trustee for Local 24 from 2011 through 2021. Nicholas S. Angerosa has served as the Regional President of Southeast region of the Company since January 2025. Previously, Mr.
Sharp has played an active role in the construction industry serving on the board of MCACO Board of Directors and has been a Labor Management Trustee for Local 24 from 2011 through 2021. Nicholas S. Angerosa has served as the Company’s Executive Vice President, National Customer Solutions since January 13, 2026. Prior to his appointment, Mr.
Item 4. Mine Safety Disclosures Not applicable. Information About Our Executive Officers Name Age Title Michael M. McCann 43 President, Chief Executive Officer and Director Jayme L. Brooks 54 Executive Vice President and Chief Financial Officer Jay A. Sharp 59 Regional President, Northeast and Midwest Nicholas S. Angerosa 48 Regional President, Southeast Michael M.
Item 4. Mine Safety Disclosures Not applicable. Information About Our Executive Officers Name Age Title Michael M. McCann 44 President, Chief Executive Officer and Director Jayme L. Brooks 55 Executive Vice President and Chief Financial Officer Jay A. Sharp 60 Executive Vice President, Sales Nicholas S. Angerosa 49 Executive Vice President, National Customer Solutions 34 Michael M.
Sharp has served as the Regional President of Northeast and Midwest regions of the Company since January 2025. Previously, Mr. Sharp has served as the President of the following entities: Limbach Company LLC, Limbach Company LP, Jake Marshall LLC and Limbach Facility & Project Solutions LLC since January 2023.
Sharp has served as the President of the following entities: Limbach Company LLC, Limbach Company LP, Jake Marshall, LLC and Limbach Facility & Project Solutions LLC since January 2023. Prior to his appointment as President to certain of the Company’s entities, Mr.
Before joining Harper Limbach, Mr. Angerosa worked as a Project Manager and Division Manager with The Poole & Kent Company of Florida, a specialty mechanical and general contractor, from October 1996 to May 2012. Part II
Angerosa served as the Company’s Senior Vice President and Branch Manager from May 2018 to July 2020, in which he oversaw the Tampa business unit. Before joining Harper Limbach, Mr. Angerosa worked as a Project Manager and Division Manager with The Poole & Kent Company of Florida, a specialty mechanical and general contractor, from October 1996 to May 2012.
Sharp also ran the Company’s Ohio business unit from August 2005 to March 2020 and served in various capacities at Limbach from 1990 to 2006. Mr. Sharp received his bachelor’s degree in 1988 from Messiah College through a partnership with Temple University in Philadelphia PA, and completed Columbia University’s Senior Executive Management program in 2013. Mr.
Sharp received his bachelor’s degree in 1988 from Messiah College through a partnership with Temple University in Philadelphia PA, and completed Columbia University’s Senior Executive Management program in 2013. Mr.
Prior to his appointment as President to 38 certain of the Company’s entities, Mr. Sharp served as the Company’s Executive Vice President, Regional Manager since March 2020, in which he had oversight for the Midwest region of the Company. Mr.
Sharp served as the Company’s Executive Vice President, Regional Manager since March 2020, in which he had oversight for the Midwest region of the Company. Mr. Sharp also ran the Company’s Ohio business unit from August 2005 to March 2020 and served in various capacities at Limbach from 1990 to 2006. Mr.
Added
Sharp has served as the Company’s Executive Vice President, Sales since January 13, 2026. Prior to this appointment, Mr. Sharp served as the Regional President of the Northeast and Midwest regions of the Company since January 2025. Previously, Mr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividends To date, the Company has not paid dividends on its common stock nor does it anticipate that it will pay dividends in the foreseeable future. As of December 31, 2024, the Company does not have any preferred stock outstanding that has any preferential dividends. Purchases of Equity Securities by the Issuer and the Affiliated Purchasers None.
Biggest changeDividends To date, the Company has not paid dividends on its common stock nor does it anticipate that it will pay dividends in the foreseeable future.
Unregistered Sales of Equity Securities and Use of Proceeds None. Securities Authorized for Issuance under Equity Compensation Plans Information The information called for by this item is incorporated herein by reference to the material under the caption, “Equity Compensation Plan Information,” and “Compensation Discussion and Analysis” in the 2025 Proxy Statement (as defined below).
Unregistered Sales of Equity Securities and Use of Proceeds None. Securities Authorized for Issuance under Equity Compensation Plans Information The information called for by this item is incorporated herein by reference to the material under the caption, “Equity Compensation Plan Information,” and “Compensation Discussion and Analysis” in the 2026 Proxy Statement (as defined below).
Comparison of 5-Year Cumulative Total Return (1) Among Limbach Holdings, Inc., the S&P 500 Index and the Russell 2000 Index 39 (1) $100 invested on December 31, 2019 in stock or including reinvestment of dividends. Fiscal year ending December 31. Copyright© 2024 Standard & Poor's, a division of S&P Global. All rights reserved Copyright© 2024 Russell Investment Group.
Comparison of 5-Year Cumulative Total Return (1) Among Limbach Holdings, Inc., the S&P 500 Index and the Russell 2000 Index (1) $100 invested on December 31, 2020 in stock or including reinvestment of dividends. Fiscal year ending December 31. Copyright© 2025 Standard & Poor's, a division of S&P Global. All rights reserved Copyright© 2025 Russell Investment Group. All right reserved.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The Company’s common stock is traded on The Nasdaq Capital Market under the symbol “LMB”. Holders At March 6, 2025, there were 30 holders of record of the Company’s common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The Company’s common stock is traded on The Nasdaq Capital Market under the symbol “LMB”. Holders At February 27, 2026, there were 25 holders of record of the Company’s common stock.
Added
As of December 31, 2025, the Company does not have any preferred stock outstanding that has any preferential dividends. 35 Purchases of Equity Securities by the Issuer and the Affiliated Purchasers In December 2025, the Company announced that its Board of Directors authorized a share repurchase program (the “Share Repurchase Program”), pursuant to which the Company may, from time to time, purchase up to $50.0 million of shares of its common stock through December 15, 2027.
Added
Share repurchases may be executed through various means, including, without limitation, open market transactions, privately negotiated transactions or by other means in accordance with federal securities laws. Repurchases may also be made under Rule 10b5-1 plans.
Added
The Share Repurchase Program does not obligate the Company to acquire any particular amount of common stock, and the program may be suspended or terminated by the Company at any time at its discretion without prior notice. As of December 31, 2025, the Company has not repurchased any shares of common stock under its Share Repurchase Program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAmounts by which cumulative contract revenue recognized on a contract as of a given date exceed cumulative billings to the customer under the contract are reflected as a current asset in the Company’s balance sheet under the caption “contract assets.” Amounts by which cumulative billings to the customer under a contract as of a given date exceed cumulative contract revenue recognized on the contract are reflected as a current liability in the Company’s balance sheet under the caption “contract liabilities.” The cost-to-cost method of accounting is also affected by changes in job performance, job conditions, and final contract settlements.
Biggest changeContract assets include costs and estimated earnings in excess of billings on uncompleted contracts and amounts related to retainage that represent a conditional right to consideration subject to contractual release provisions. Amounts by which cumulative billings exceed cumulative contract revenue recognized are reflected as “contract liabilities” in the Company’s balance sheet.
During the year ended December 31, 2024, the Company recorded material gross profit write-ups on three GCR projects for a total of $3.3 million and material gross profit write-downs on two GCR projects for a total of $1.4 million.
During the year ended December 31, 2024, the Company recorded material gross profit write-ups of $3.3 million on three GCR projects and material gross profit write-downs on two GCR projects for a total of $1.4 million.
Factors such as the Company’s contract mix, commercial terms, days sales outstanding (“DSO”) and delays in the start of projects may impact its working capital. In line with industry practice, the Company accumulates costs during a given month then bills those costs in the current month for many of its contracts.
Factors such as the Company’s contract mix, commercial terms, days sales outstanding (“DSO”) and delays in the start of projects may impact its working capital. In line with industry practice, the Company accumulates costs during a given month and then bills those costs in the current month for many of its contracts.
The Company's current cash balance, together with cash it expects to generate from future operations, along with borrowings available under its credit facility, are expected to be sufficient to finance its short- and long-term capital requirements (or meet working capital requirements) for at least the next twelve months.
The Company's current cash balance, together with the cash it expects to generate from future operations along with borrowings available under its credit facility, are expected to be sufficient to finance its short- and long-term capital requirements (or meet working capital requirements) for at least the next twelve months.
Under the cost-to-cost method, contract revenue recognizable at any time during the life of a contract is determined by multiplying expected total contract revenue by the percentage of contract costs incurred to total estimated contract costs.
Under the cost-to-cost method, contract revenue recognizable at any time during the life of a contract is determined by multiplying the total expected contract revenue by the percentage of contract costs incurred to total estimated contract costs.
In addition, material cash requirements for other potential obligations, for which we cannot reasonably estimate future payments, include the following: 53 Legal Proceedings : The Company is continually engaged in administrative proceedings, arbitrations, and litigation with owners, general contractors, suppliers, team members, former team members and other unrelated parties, all arising in the ordinary courses of business.
In addition, material cash requirements for other potential obligations, for which we cannot reasonably estimate future payments, include the following: Legal Proceedings : The Company is continually engaged in administrative proceedings, arbitrations, and litigation with owners, general contractors, suppliers, team members, former team members and other unrelated parties, all arising in the ordinary courses of business.
While labor costs associated with these contracts are paid weekly and salary costs associated with the contracts are paid bi-weekly, certain subcontractor costs are generally not paid until the Company receives payment from its customers (contractual “pay-if-paid” terms). The Company has not historically experienced a large volume of write-offs related to its receivables and contract assets.
While labor costs associated with these contracts are paid weekly and salary costs associated with the contracts are paid bi-monthly, certain subcontractor costs are generally not paid until the Company receives payment from its customers (contractual “pay-if-paid” terms). The Company has not historically experienced a large volume of write-offs related to its receivables and contract assets.
See Note 16 – Multiemployer Pension Plans in the accompanying notes to the Company’s consolidated financial statements for further discussion. Recent Accounting Pronouncements The Company reviews new accounting standards to determine the expected financial impact, if any, that the adoption of such standards will have on its financial position and/or results of operations.
See Note 16 – Multiemployer Pension Plans in the accompanying notes to the Company’s consolidated financial statements for further discussion. 51 Recent Accounting Pronouncements The Company reviews new accounting standards to determine the expected financial impact, if any, that the adoption of such standards will have on its financial position and/or results of operations.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 36 The following discussion should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K.
If a participating employer stops contributing to an MEPP, the unfunded obligations of the MEPP may be borne by the remaining participating employers. 54 An FIP or RP requires a particular MEPP to adopt measures to correct its underfunding status.
If a participating employer stops contributing to an MEPP, the unfunded obligations of the MEPP may be borne by the remaining participating employers. An FIP or RP requires a particular MEPP to adopt measures to correct its underfunding status.
At any point in time, the Company has a substantial volume of projects that are specifically identified and advanced in negotiations and/or documentation, however those projects are not booked as backlog until the Company has received written confirmation from the owner or the general contractor / construction manager of their intention to award it the contract and they have directed the Company to begin engineering, designing, incurring construction labor costs or procuring needed equipment and material.
At any point in time, the Company has a substantial volume of projects that are specifically identified and advanced in negotiations and/or documentation, however those projects are not booked as backlog until the Company has received written 43 confirmation from the owner or the general contractor / construction manager of their intention to award the contract and they have directed the Company to begin engineering, designing, incurring construction labor costs or procuring needed equipment and material.
The transaction also provided for an earnout of up to $5.0 million potentially being paid out over 2025 and 2026. Kent Island is a leading provider of building systems solutions in the Greater Washington, DC metro area, including suburban Maryland and Northern Virginia. Kent Island excels in designing, engineering, installing, servicing, and maintaining mechanical and plumbing systems for complex facilities.
The transaction also provided for an earnout of up to $5.0 million potentially being paid out over 2026 and 2027. Kent Island is a leading provider of building systems solutions in the Greater Washington, DC metro area, including suburban Maryland and Northern Virginia. Kent Island excels in designing, engineering, installing, servicing, and maintaining mechanical and plumbing systems for complex facilities.
In addition, see Note 5 – Goodwill and Intangible Assets in the accompanying notes to the Company’s consolidated financial statements for further information on the Company’s intangible assets.
In addition, see Note 5 – Goodwill and Intangible Assets in the 38 accompanying notes to the Company’s consolidated financial statements for further information on the Company’s intangible assets.
In the northern climates where it operates, and to a lesser extent the southern climates as well, severe winters can slow the Company’s productivity on construction projects, which shifts revenue and gross profit recognition to a later period. The Company’s maintenance operations may also be impacted by mild or severe 48 weather.
In the northern climates where it operates, and to a lesser extent the southern climates as well, severe winters can slow the Company’s productivity on projects, which shifts revenue and gross profit recognition to a later period. The Company’s maintenance operations may also be impacted by mild or severe weather.
The Company assumes no obligation to update any of these forward-looking statements, unless required to do so by applicable law. The discussion that follows includes a comparison of the Company’s results of operations and liquidity and capital resources for the fiscal years ended December 31, 2024 and 2023.
The Company assumes no obligation to update any of these forward-looking statements, unless required to do so by applicable law. The discussion that follows includes a comparison of the Company’s results of operations and liquidity and capital resources for the fiscal years ended December 31, 2025 and 2024.
See Note 13 – Commitments and Contingencies in the accompanying notes to the Company’s consolidated financial statements for further discussion. Multiemployer Plans The Company participates in approximately 50 MEPPs that provide retirement benefits to certain union team members in accordance with various collective bargaining agreements (“CBAs”).
See Note 13 – Commitments and Contingencies in the accompanying notes to the Company’s consolidated financial statements for further discussion. Multiemployer Plans The Company participates in approximately 70 MEPPs that provide retirement benefits to certain union team members in accordance with various collective bargaining agreements (“CBAs”).
The Company’s core market sectors consist of the following customer base with mission-critical systems: • Healthcare , including research, acute care and inpatient hospitals for regional and national hospital groups; 40 • Industrial and manufacturing , including automotive, energy and general manufacturing plants; • Data centers, including facilities composed of networked computers, storage systems and computing infrastructure that organizations use to assemble, process, store and disseminate large amounts of data; • Life sciences, including organizations and companies whose work is centered around research and development focused on living things; • Higher education, including both public and private colleges, universities and research centers; and • Cultural and entertainment, including entertainment facilities (including casinos) and amusement rides and parks.
The Company’s core market sectors consist of the following customer base with mission-critical systems: • Healthcare , including research, acute care and inpatient hospitals for regional and national hospital groups; • Industrial and manufacturing , including automotive, energy and general manufacturing plants; • Data centers, including facilities composed of networked computers, storage systems and computing infrastructure that organizations use to assemble, process, store and disseminate large amounts of data; • Life sciences, including organizations and companies whose work is centered around research and development focused on living organisms and biological systems; • Higher education, including both public and private colleges, universities and research centers; and • Cultural and entertainment, including entertainment facilities (including casinos) and amusement rides and parks.
The Company believes that its reserves for its expected credit losses are appropriate as of December 31, 2024, but adverse changes in the economic environment may impact certain of its customers’ ability to access capital and compensate the Company for its services, as well as impact project activity for the foreseeable future.
The Company believes that its reserves for its expected credit losses are appropriate as of December 31, 2025, but adverse changes in the economic environment may impact certain of its customers’ ability to access capital and compensate the Company for its services, as well as impact project activity for the foreseeable future.
The Company generally invoices customers on a monthly basis, based on a schedule of values that breaks down the contract amount into discrete billing items. Costs and estimated earnings in excess of billings are recorded as a contract asset until billable under the contract terms.
The Company generally invoices customers on a monthly basis based on a schedule of values that breaks down the contract amount into discrete billing items. Costs and estimated earnings in excess of billings on uncompleted contracts are recorded as a contract asset until billable under the contract terms.
Off-Balance Sheet and Other Arrangements Aside from the $4.2 million and $4.1 million in irrevocable letters of credit outstanding in connection with the Company’s self-insurance program, at December 31, 2024 and 2023, respectively, the Company did not have any relationships with any entities or financial partnerships, such as structured finance or special purpose entities established for the purpose of facilitating off-balance sheet arrangements or other purposes.
Off-Balance Sheet and Other Arrangements Aside from the $5.1 million and $4.2 million in irrevocable letters of credit outstanding in connection with the Company’s self-insurance program, at December 31, 2025 and 2024, respectively, the Company did not have any relationships with any entities or financial partnerships, such as structured finance or special purpose entities established for the purpose of facilitating off-balance sheet arrangements or other purposes.
Selling, general, and administrative costs are charged to expense as incurred. Bidding and proposal costs are also recognized as expenses in the period in which such amounts are incurred. Total estimated contract costs are based upon management’s current estimate of total costs at completion.
Selling, general, and administrative costs are charged to expense as incurred. Bidding and proposal costs are also recognized as expenses in the period in which such amounts are incurred. Total estimated contract costs are based on management’s current estimate of total costs at completion.
As discussed above and in Note 7 – Debt in the accompanying notes to the Company’s consolidated financial statements, as of December 31, 2024, the Company was in compliance with all financial maintenance covenants as required by its credit facility.
As discussed above and in Note 7 – Debt in the accompanying notes to the Company’s consolidated financial statements, as of December 31, 2025, the Company was in compliance with all financial maintenance covenants as required by its credit facility.
The 41 carrying values of the Jake Marshall, ACME, Industrial Air, Kent Island and Consolidated Mechanical earnout payments are subject to remeasurement at fair value at each reporting date through the end of the respective earnout periods with any changes in the fair value reported as a separate component of operating income in the consolidated statements of operations.
The carrying values of the ACME, Industrial Air, Kent Island and Consolidated Mechanical Earnout Payments are subject to remeasurement at fair value at each reporting date through the end of the respective earnout periods with any changes in the fair value reported as a separate component of operating income in the consolidated statements of operations.
For a discussion and analysis of fiscal year ended December 31, 2022 and of changes from the fiscal year ended December 31, 2023 to the fiscal year ended December 31, 2022, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (filed with the SEC on March 13, 2024).
For a discussion and analysis of fiscal year ended December 31, 2023 and of changes from the fiscal year ended December 31, 2024 to the fiscal year ended December 31, 2023, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (filed with the SEC on March 10, 2025).
The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate year-over-year was primarily due to state income taxes, tax credits, other permanent adjustments and discrete tax items.
The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate period-over-period was primarily due to state income taxes, tax credits, other permanent adjustments and discrete tax items.
See Note 9 – Fair Value Measurements in the accompanying notes to the Company’s consolidated financial statements for further information. Amortization of Intangibles Amortization expense represents periodic non-cash charges that consist of amortization of various intangible assets primarily including favorable leasehold interests and certain customer relationships.
See Note 9 – Fair Value Measurements in the accompanying notes to the Company’s consolidated financial statements for further information on the Company’s contingent earnout arrangements. Amortization of Intangibles Amortization expense represents periodic non-cash charges that consist of amortization of various intangible assets primarily including favorable leasehold interests and certain customer relationships.
Future payments associated with the sale-leaseback financing transaction were $15.9 million at December 31, 2024, with $0.5 million payable within the next 12 months. See Note 7 – Debt in the accompanying notes to the Company’s consolidated financial statements for further detail surrounding the Company’s sale-leaseback financing transaction.
Future payments associated with the sale-leaseback financing transaction were $15.4 million at December 31, 2025, with $0.5 million payable within the next 12 months. See Note 7 – Debt in the accompanying notes to the Company’s consolidated financial statements for further detail surrounding the Company’s sale-leaseback financing transaction.
The cost of these plans is equal to the annual required contributions determined in accordance with the provisions of negotiated collective bargaining agreements. During 2024 and 2023, contributions made to these plans were $10.3 million and $11.6 million, respectively; however, the Company’s future contributions to the multiemployer plans are dependent upon a number of factors.
The cost of these plans is equal to the annual required contributions determined in accordance with the provisions of negotiated collective bargaining agreements. During 2025 and 2024, contributions made to these plans were $14.3 million and $10.3 million, respectively; however, the Company’s future contributions to the multiemployer plans are dependent upon a number of factors.
Of this amount, $7.4 million is estimated as being payable during 2025, with the remainder due in 2026 and 2027. See Note 9 – Fair Value Measurements in the accompanying notes to the Company’s consolidated financial statements for more information regarding the Company’s contingent consideration liabilities.
Of this amount, approximately $7.0 million is estimated as being payable during 2026, with the remainder due in 2027. See Note 9 – Fair Value Measurements in the accompanying notes to the Company’s consolidated financial statements for more information regarding the Company’s contingent consideration liabilities.
The aggregate amount of these liabilities can change due to additional business acquisitions, settlement of outstanding liabilities, changes in the fair value of amounts owed based on performance during such post-acquisition periods, and accretion in present value. As of December 31, 2024, the present value of expected future payments relating to these contingent consideration arrangements was $13.2 million.
The aggregate amount of these liabilities can change due to additional business acquisitions, settlement of outstanding liabilities, changes in the fair value of amounts owed based on performance during such post-acquisition periods, and accretion in present value. As of December 31, 2025, the present value of expected future payments relating to these contingent consideration arrangements was $10.0 million.
The Company’s provision for income taxes (including federal, state and local taxes) is calculated based on the estimated annual effective tax rate. The Company accounts for income taxes in accordance with Accounting Standards Update (“ASC”) Topic 740 - Income Taxes , which requires the use of the asset and liability method.
The Company’s provision for income taxes (including federal, state and local income taxes) is calculated based on the estimated annual effective tax rate. The Company accounts for income taxes in accordance with Accounting Standards Update (“ASC”) Topic 740 — Income Taxes , which requires an asset and liability approach.
The Company’s existing current backlog is projected to provide substantial coverage of forecasted revenue for one year from the date of the financial statement issuance. In addition to the Company's backlog, it has a substantial amount of contracts with short lead times that book-and-bill within the same reporting period and are not included in backlog.
The Company’s existing current backlog is projected to support a portion of forecasted revenue for one year from the date of the financial statement issuance. In addition to the Company's backlog, the Company has a substantial amount of contracts with short lead times that book-and-bill within the same reporting period and are not included in backlog.
In assessing the realizability of deferred tax assets, it must consider whether it is more likely than not some portion, or all, of the deferred tax assets will not be realized. The Company considers all available evidence, both positive and negative, in determining whether a valuation allowance is required.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. Management considers all available evidence, both positive and negative, in determining whether a valuation allowance is required.
Material Cash Requirements from Contractual and Other Obligations As of December 31, 2024, the Company’s short-term and long-term material cash requirements for known contractual and other obligations were as follows: Outstanding Debt and Interest Payments: As of December 31, 2024, the Company had $10.0 million of direct borrowings outstanding under its Second A&R Wintrust Revolving Loan.
Material Cash Requirements from Contractual and Other Obligations 49 As of December 31, 2025, the Company’s short-term and long-term material cash requirements for known contractual and other obligations were as follows: Outstanding Debt and Interest Payments: As of December 31, 2025, the Company had $10.0 million of direct borrowings outstanding under its Wintrust Revolving Loan.
Each of the Jake Marshall, ACME, Industrial Air, Kent Island and Consolidated Mechanical-related intangible assets were recorded under the acquisition method of accounting at their estimated fair values at the acquisition date.
Each of the Jake Marshall, LLC (“Jake Marshall”), ACME, Industrial Air, Kent Island, Consolidated Mechanical and Pioneer Power-related intangible assets were recorded under the acquisition method of accounting at their estimated fair values at the acquisition date.
Based on historical trends, the Company currently estimates that 72% of its GCR backlog as of December 31, 2024 will be recognized as revenue during 2025.
Based on historical trends, the Company currently estimates that 77% of its GCR backlog as of December 31, 2025 will be recognized as revenue during 2026.
The Company operates in two segments, (i) ODR, in which the Company performs owner direct projects and/or provides maintenance or service primarily on mechanical, plumbing or electrical systems, building controls and specialty contracting projects to existing buildings direct to, or assigned by, building owners or property managers, and (ii) GCR, in which the Company generally manages new construction or renovation projects that involve primarily mechanical, plumbing, or electrical services awarded to the Company by general contractors or construction managers.
The Company operates in two segments, (i) ODR, in which the Company performs owner direct projects and/or provides maintenance or service primarily on MEPC systems, and specialty contracting projects to existing buildings direct to, or assigned by, building owners or operators, and (ii) GCR, in which the Company generally manages new construction or renovation projects that involve primarily MEPC systems awarded to the Company by general contractors or construction managers.
(2) As a percentage of GCR revenue. (3) Included within selling, general and administrative expenses was $5.8 million and $4.9 million of stock-based compensation expense for the year ended December 31, 2024 and 2023, respectively.
(2) As a percentage of GCR revenue. (3) Included within selling, general and administrative expenses was $7.0 million and $5.8 million of stock-based compensation expense for the year ended December 31, 2025 and 2024, respectively.
Interest payments on any future borrowings will be determined based on prevailing rates at that time. The Company is party to an interest rate swap arrangement to manage the risk associated with a portion of it variable-rate long-term debt. The Second A&R Wintrust Revolving Loan will mature in February 2028.
Interest payments on any future borrowings will be determined based on prevailing rates at that time. The Company is party to an interest rate swap arrangement to manage the risk associated with a portion of it variable-rate long-term debt. The Wintrust Revolving Loan will mature on July 1, 2030.
The Second A&R Wintrust Revolving Loan bears interest, at LFS’s option, at either the Term SOFR (as defined in the Second A&R Credit Agreement) (with a 0.15% floor) plus 3.10% or the Prime Rate (as defined in the Second A&R Credit Agreement) (with a 3.0% floor), subject to a 50 basis point step-down based on the ratio between the senior debt of the Company and its subsidiaries to the EBITDA of LFS and its subsidiaries for the most recently ended four fiscal quarters.
The Wintrust Revolving Loan bears interest, at LFS’s option, at either the Term SOFR (with a 0.15% floor) plus 2.50% or the Prime Rate (with a 3.0% floor), subject to a 95 basis point step-down based on the ratio between the senior debt of the Company and its subsidiaries to the EBITDA of LFS and its subsidiaries for the most recently ended four fiscal quarters.
These amounts reflect unrecognized revenue expected to be recognized over the remaining terms of its service contracts and projects. Based on historical trends, the Company currently estimates that 86% of its ODR backlog as of December 31, 2024 will be recognized as revenue during 2025.
These amounts reflect unrecognized revenue expected to be recognized over the remaining terms of its construction-type and service contracts. Based on historical trends, the Company currently estimates that 84% of its ODR backlog as of December 31, 2025 will be recognized as revenue during 2026.
Income Taxes The Company’s income tax provision was $9.1 million and $7.3 million for the years ended December 31, 2024 and 2023, respectively, and it had a 22.7% and 26.1% effective tax rate over those same periods, respectively.
Income Taxes The Company’s income tax provision was $9.6 million and $9.1 million for the years ended December 31, 2025 and 2024, respectively, and it had a 19.7% and 22.7% effective tax rate over those same periods, respectively.
The bonds the Company provides, if any, typically reflect the contract value. As of December 31, 2024 and 2023, the Company has approximately $109.3 million and $90.9 million, respectively, in surety bonds outstanding. The Company believes that its $800 million bonding capacity provides it with a significant competitive advantage relative to many of its competitors which have limited bonding capacity.
The bonds the Company provides, if any, typically reflect the contract value. As of December 31, 2025 and 2024, the Company has approximately $156.6 million and $109.3 million, respectively, in surety bonds outstanding. The Company believes that its $1 billion bonding capacity provides it with a significant competitive advantage relative to many of its competitors which have limited bonding capacity.
Treasury Bills and the Company's interest rate swap agreement. Deferred financing costs are amortized to interest expense using the effective interest method. Provision for Income Taxes The Company is taxed as a C corporation and its financial results include the effects of federal income taxes, which will be paid at the parent level.
Deferred financing costs are amortized to interest expense using the effective interest method. Provision for Income Taxes The Company is taxed as a C corporation, and its financial results include the effects of federal income taxes, which are paid at the parent level.
Changes in strategy and/or market condition may also result in adjustments to recorded intangible asset balances or their useful lives.
Changes in strategy and/or market conditions may also result in adjustments to recorded intangible asset balances, their useful lives, or impairment conclusions.
Therefore, if actual experience differs from the assumptions and estimates used for recording the liabilities, adjustments may be required and would be recorded in the period that such experience becomes known. Deferred Tax Assets The Company regularly evaluates the need for valuation allowances related to deferred tax assets for which future realization is uncertain. The Company performs this evaluation quarterly.
If actual experience differs from the assumptions and estimates used in determining these liabilities, adjustments may be required and would be recorded in the period in which such experience becomes known. Deferred Tax Assets The Company regularly evaluates the need for valuation allowances related to deferred tax assets for which future realization is uncertain.
These contract costs are included in the Company’s results of operations under the caption “Cost of Revenue.” Then, as the Company performs under those contracts, it measures costs incurred, compares them to total estimated costs to complete the contract, and recognizes a corresponding proportion of contract revenue. Labor costs are considered to be incurred as the work is performed.
These contract costs are included in the Company’s results of operations under the caption “Cost of Revenue.” As the Company performs under these contracts, it measures costs incurred, compares them to total estimated costs to complete the contract, and recognizes a corresponding proportion of contract revenue.
In periods of economic uncertainty, businesses and organizations may delay or cancel large capital projects, such as new construction or major mechanical system upgrades. The Company’s service contracts and maintenance work often remain stable or even increase, as customers prioritize maintaining existing systems over capital-intensive replacements.
In periods of economic uncertainty, customers may delay or cancel large capital projects, such as new construction or major mechanical system upgrades. At the same time, the Company’s service, maintenance, and repair work may remain stable or increase as customers prioritize maintaining existing systems over capital-intensive replacements.
Billings in excess of costs and estimated earnings are recorded as a contract liability until the related revenue is recognizable. Cost of Revenue Cost of revenue primarily consists of labor, equipment, material, subcontract and other job costs in connection with fulfilling the terms of the Company’s contracts. Labor costs consist of wages plus taxes, fringe benefits and insurance.
Billings in excess of costs and estimated earnings on uncompleted contracts are recorded as a contract liability until the related revenue is recognizable. Cost of Revenue Cost of revenue primarily consists of labor, equipment, material, subcontract and other job costs in connection with fulfilling the terms of the Company’s contracts.
See Note 2 – Significant Accounting Policies in the accompanying notes to the Company’s consolidated financial statements for further information regarding new accounting standards, including the anticipated dates of adoption and the effects on its consolidated financial position, results of operations, or liquidity.
See Note 2 – Significant Accounting Policies in the accompanying notes to the Company’s consolidated financial statements for further information regarding new accounting standards, including the anticipated dates of adoption and the effects on its consolidated financial position, results of operations, or liquidity. Critical Accounting Policies and Estimates The Company’s consolidated financial statements are prepared in accordance with U.S. GAAP.
Cash used in investing activities for the year ended December 31, 2024 included cash outflows of $13.4 million and $23.2 million cash outflows associated with the Kent Island Transaction and Consolidated Mechanical Transaction, respectively, net of cash acquired and inclusive of certain measurement period adjustments.
For the year ended December 31, 2024, investing activities included cash outflows of $13.4 million and $23.2 million related to the Kent Island and Consolidated Mechanical transactions, respectively, net of cash acquired and inclusive of certain measurement period adjustments.
Equipment costs consist of the ownership and operating costs of company-owned assets, in addition to outside-rented equipment. If applicable, job costs include estimated contract losses to be incurred in future periods.
Labor costs consist of wages plus taxes, fringe benefits and insurance. Equipment costs consist of the ownership and operating costs of company-owned assets, in addition to outside-rented equipment. If applicable, job costs include estimated contract losses to be incurred in future periods.
During the year ended December 31, 2023, the Company recorded material gross profit write-ups of $2.2 million on two GCR projects and material gross profit write-downs on two GCR projects for a total of $1.3 million.
During the year ended December 31, 2025, the Company recorded material gross profit write-ups on two GCR projects for a total of $2.2 million.
Project contracts typically provide for a schedule of billings or invoices to the customer based on reaching agreed upon milestones or as the Company incurs costs. The schedules for such billings usually do not precisely match the schedule on which costs are incurred.
Expenses related to service contracts are recognized as services are provided. Project contracts typically provide for a schedule of billings or invoices to the customer based on reaching agreed-upon milestones or as the Company incurs costs. These billing schedules usually do not precisely match the schedule on which costs are incurred.
Open Purchase Obligations : As of December 31, 2024, the Company had $91.2 million of open purchase obligations, of which approximately $73.0 million are expected to become due within the next 12 months. These obligations represent open purchase orders to suppliers and subcontractors related to the Company’s projects and services contracts.
Open Purchase Obligations : As of December 31, 2025, the Company had $69.1 million of open purchase obligations, of which approximately $55.4 million are expected to become due within the next 12 months. These obligations represent open purchase orders to suppliers and subcontractors related to the Company’s projects and services contracts.
Cash Flows Used in Investing Activities Cash flows used in investing activities were $42.6 million for the year ended December 31, 2024 as compared to $17.1 million for the year ended December 31, 2023.
Cash Flows Used in Investing Activities Cash flows used in investing activities were $67.6 million for the year ended December 31, 2025, compared to $42.6 million for the year ended December 31, 2024.
Segment information is prepared on the same basis that the Company’s Chief Operating Decision Maker (“CODM”) reviews operating results for the purposes of allocating resources and assessing performance. The Company’s CODM comprises of its President and Chief Executive Officer and Executive Vice President and Chief Financial Officer.
Segment information is prepared on the same basis that the Company’s Chief Operating Decision Maker (“CODM”) reviews operating results for the purposes of allocating resources and assessing performance.
Changes in job performance, job conditions and estimated profitability, including those arising from contract penalty provisions and final contract settlements, may result in revisions to estimated costs and income, and are recognized in the period in which the revisions are determined. Provisions for estimated losses on uncompleted contracts are recognized in the period in which such losses are determined.
Changes in job performance, job conditions and estimated profitability, including those arising from contract penalty provisions and final 52 contract settlements, may result in revisions to estimated costs and revenue and are recognized in the period in which the revisions are determined.
Under this method, deferred tax assets and liabilities and income or expense are recognized for the expected future tax consequences of temporary differences between the financial statement carrying values and their respective tax bases, using enacted tax rates expected to be applicable in the years in which the temporary differences are expected to reverse.
Under this approach, deferred tax assets and liabilities and income or expense are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, using enacted tax rates expected to apply in the periods in which those temporary differences are expected to reverse.
Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. Impact of Acquisitions In order to provide a more meaningful period-over-period discussion of the Company’s operating results, the Company may discuss amounts generated or incurred (revenues, gross profit, selling, general and administrative expenses, and operating income) from companies acquired.
Changes in deferred tax assets and liabilities are included in the provision for income taxes. Impact of Acquisitions In order to provide a more meaningful discussion of period-over-period changes in the Company’s operating results, the Company may discuss the impact of acquisitions on revenue, gross profit, selling, general and administrative expenses, and operating income.
See Note 3 – Acquisitions in the accompanying notes to the Company’s consolidated financial statements for further discussion of the Company’s acquired intangible assets as a result of the Kent Island and Consolidated Mechanical Transactions.
See Note 3 – Acquisitions in the accompanying notes to the Company’s consolidated financial statements for further discussion of the Company’s acquired intangible assets as a result of the Pioneer Power Transaction.
Selling, General and Administrative For the Years Ended December 31, 2024 2023 Increase/(Decrease) (in thousands except for percentages) Selling, general and administrative $ 97,199 $ 87,397 $ 9,802 11.2 % Total selling, general and administrative expenses as a percentage of consolidated total revenue 18.7 % 16.9 % The Company's SG&A expense for the year ended December 31, 2024 increased by approximately $9.8 million, or 11.2% compared to the year ended December 31, 2023.
Selling, General and Administrative 41 For the Years Ended December 31, 2025 2024 Increase/(Decrease) (in thousands except for percentages) Selling, general and administrative $ 109,518 $ 97,199 $ 12,319 12.7 % Total selling, general and administrative expenses as a percentage of total revenue 16.9 % 18.7 % The Company's total SG&A expense for the year ended December 31, 2025 increased by approximately $12.3 million, or 12.7% compared to the year ended December 31, 2024.
See also “Item 1A. Risk Factors — Our contract backlog is subject to unexpected adjustments and cancellations and could be an uncertain indicator of our future earnings .” The Company’s ODR backlog was $225.3 million and $147.0 million as of December 31, 2024 and 2023, respectively.
Risk Factors — Our contract backlog is subject to adjustments, delays and cancellations and could be an uncertain indicator of our future earnings. ” The Company’s ODR backlog was $255.8 million and $225.3 million as of December 31, 2025 and 2024, respectively.
Future payments for such leases, excluding leases with initial terms of one year or less, were $39.2 million at December 31, 2024, with $9.1 million payable within the next 12 months.
Future payments for such leases, excluding leases with initial terms of one year or less, were $46.8 million at December 31, 2025, with $11.4 million payable within the next 12 months.
In the Company’s GCR segment, its efforts continue to focus on improving project execution and profitability by pursuing opportunities that are smaller in size and shorter in duration than they have been historically, and where it can leverage its captive design and engineering services.
In the Company’s GCR segment, the Company has been able to improve GCR segment margins by focusing on improving project execution and profitability by pursuing opportunities that are smaller in size and shorter in duration and where it can leverage its captive design and engineering services.
Cash Flows Used in Financing Activities Cash flows used in financing activities were $9.1 million for the year ended December 31, 2024 as compared to cash flows provided by financing activities of $16.5 million for the year ended December 31, 2023.
Cash Flows Used in Financing Activities Cash flows used in financing activities were $11.7 million for the year ended December 31, 2025 as compared to $9.1 million for the year ended December 31, 2024.
The following table represents the Company’s summarized working capital information: As of December 31, (in thousands, except ratios) 2024 2023 Current assets $ 220,334 $ 217,000 Current liabilities (151,037) (145,148) Net working capital $ 69,297 $ 71,852 Current ratio (1) 1.46 1.50 50 (1) Current ratio is calculated by dividing current assets by current liabilities.
The following table represents the Company’s summarized working capital information: As of December 31, (in thousands, except ratios) 2025 2024 Current assets $ 195,049 $ 220,334 Current liabilities (135,086) (151,037) Net working capital $ 59,963 $ 69,297 Current ratio (1) 1.44 1.46 (1) Current ratio is calculated by dividing current assets by current liabilities.
In accordance with ASC Topic 280 – Segment Reporting , the Company has elected to aggregate all of the ODR work performed at branches into one ODR reportable segment and all of the GCR work performed at branches into one GCR reportable segment.
The Company’s CODM is comprised of its President and Chief Executive Officer and Executive Vice President and Chief Financial Officer. 39 In accordance with ASC Topic 280 – Segment Reporting , the Company has elected to aggregate all of the ODR work performed at its branches into one ODR reportable segment and all of the GCR work performed at its branches into one GCR reportable segment.
Amortization of Intangibles 45 For the Years Ended December 31, 2024 2023 Increase/(Decrease) (in thousands except for percentages) Amortization of intangibles $ 4,688 $ 1,880 $ 2,808 149.4 % Total amortization expense for the year ended December 31, 2024 increased by approximately $2.8 million compared to the year ended December 31, 2023.
Amortization of Intangibles For the Years Ended December 31, 2025 2024 Increase/(Decrease) (in thousands except for percentages) Amortization of intangibles $ 8,357 $ 4,688 $ 3,669 78.3 % Total amortization expense for the year ended December 31, 2025 increased by approximately $3.7 million compared to the year ended December 31, 2024.
In particular, the Company’s effective rate for the year ended December 31, 2024 and 2023 were materially impacted by “excess tax benefits on stock-based compensation” recognized discretely during the first quarter of each year.
In particular, the Company’s effective rate for the years ended December 31, 2025 and 2024 were materially impacted by “excess tax benefits on stock-based compensation” recognized discretely during the first quarter of each year as a result of the Company’s stock price at the RSU vesting dates resulting in increased tax deductions for the Company.
Surety Bonding In connection with its business, the Company is occasionally required to provide various types of surety bonds that provide an additional measure of security to its customers for its performance under certain government and private sector contracts.
See Note 16 – Multiemployer Pension Plans in the accompanying notes to the Company’s consolidated financial statements for more information regarding these multiemployer pension plans. 50 Surety Bonding In connection with its business, the Company is occasionally required to provide various types of surety bonds that provide an additional measure of security to its customers for its performance under certain government and private sector contracts.
Such evidence includes the scheduled reversal of deferred tax liabilities, projected future taxable income, taxable income in prior carryback years and tax planning strategies in making this assessment, and judgment is required in considering the relative weight of negative and positive evidence.
Such evidence includes the scheduled reversal of deferred tax liabilities, projected future taxable income, taxable income in prior periods (including carryback availability, if applicable), and feasible tax planning strategies. Judgment is required in evaluating the relative weight of positive and negative evidence and in developing projections of future taxable income.
Historically, liquidity has been provided by operating activities and borrowings from commercial banks and institutional lenders. 49 The following table presents summary cash flow information for the periods indicated: For the Years Ended December 31, (in thousands) 2024 2023 Net cash (used in) provided by: Operating activities $ 36,783 $ 57,366 Investing activities (42,569) (17,092) Financing activities (9,117) (16,490) Net (decrease) increase in cash, cash equivalents and restricted cash $ (14,903) $ 23,784 Noncash investing and financing transactions: Earnout liability associated with the Kent Island Transaction $ 4,381 $ — Earnout liability associated with the Consolidated Mechanical Transaction 757 — Earnout liability associated with the ACME Transaction — 1,514 Earnout liability associated with the Industrial Air Transaction — 3,165 Right of use assets obtained in exchange for new operating lease liabilities 4,775 3,135 Right of use assets obtained in exchange for new finance lease liabilities 7,586 5,219 Right of use assets disposed or adjusted modifying operating lease liabilities 1,268 1,112 Right of use assets disposed or adjusted modifying finance lease liabilities — (93) Interest paid 1,899 1,908 Cash paid for income taxes $ 8,529 $ 9,156 The Company's cash flows are primarily impacted period to period by fluctuations in working capital.
The following table presents summary cash flow information for the periods indicated: For the Years Ended December 31, (in thousands) 2025 2024 Net cash provided by (used in): Operating activities $ 45,700 $ 36,783 Investing activities (67,586) (42,569) Financing activities (11,699) (9,117) Net (decrease) increase in cash, cash equivalents and restricted cash $ (33,585) $ (14,903) Noncash investing and financing transactions: Earnout liability associated with the Kent Island Transaction $ — $ 4,381 Earnout liability associated with the Consolidated Mechanical Transaction — 757 Kent Island Transaction, measurement period adjustment (94) — Right of use assets obtained in exchange for new operating lease liabilities 2,446 4,775 Right of use assets obtained in exchange for new finance lease liabilities 13,529 7,586 Right of use assets disposed or adjusted modifying operating lease liabilities — 1,268 Right of use assets disposed or adjusted modifying finance lease liabilities 49 — Interest paid 3,102 1,899 Cash paid for income taxes $ 7,346 $ 8,529 46 The Company's cash flows are primarily impacted period to period by fluctuations in working capital.
The Company has elected to omit discussion of the earliest of the three years covered by the consolidated financial statements presented.
In accordance with Item 303(b) of Regulation S-K, the Company has elected to omit discussion of the earliest of the three years covered by the consolidated financial statements presented.
In addition, the Company believes that some of the more critical judgment areas in the application of accounting policies that affect its financial condition and results of operations are the impact of changes in the estimates and judgments pertaining to: (a) collectability or valuation of accounts receivable; (b) the recording of its self-insurance liabilities; (c) valuation of deferred tax assets; and (d) recoverability of goodwill and identifiable intangible assets.
In addition, management believes the more significant judgment areas in the application of accounting policies that affect the Company’s financial condition and results of operations include estimates related to: (a) collectability and the allowance for credit losses on accounts receivable; (b) the recording of self-insurance liabilities; (c) the realization of deferred tax assets and related valuation allowances; and (d) the recoverability of goodwill and identifiable intangible assets.
During the year ended December 31, 2023, the Company recorded a material gross profit write-down on one ODR segment project for a total of $1.0 million that had a net gross profit impact of $0.5 million or more.
The Company also recorded revisions in its contract estimates for certain ODR and GCR projects. During the year ended December 31, 2025, the Company recorded material gross profit write-downs on two ODR segment projects for a total of $1.1 million that had a net gross profit impact of $0.5 million or more.
By meeting diverse customer needs under one roof, the Company deepens customer loyalty. The Company believes that building owners value the convenience and reliability of a single point of contact, which fosters long-term partnerships, reoccurring business and may open doors to larger capital projects.
The Company believes that building owners value the convenience and reliability of a single point of contact, which fosters long-term partnerships, reoccurring business and may open doors to larger capital projects and being able to capture a greater share of the overall value chain.
During the year ended December 31, 2024, the Company generated $36.8 million in cash in its operating activities, which consisted of cash used in working capital of $18.5 million, non-cash adjustments of $24.5 million (primarily depreciation and amortization, stock-based compensation expense, operating lease expense and the change in fair value of contingent consideration) and net income for the period of $30.9 million.
During the year ended December 31, 2024, the Company generated $36.8 million from its operating activities, which consisted of net income of $30.9 million and certain non-cash adjustments of $24.5 million, partly offset by cash used in working capital of $18.5 million.
These estimates are evaluated and adjusted as needed when additional information is received. 56 Self-Insurance Liabilities The Company is substantially self-insured for workers’ compensation, employer’s liability, auto liability, general liability and employee group health claims in view of the relatively high per-incident deductibles it absorbs under its insurance arrangements for these risks.
Self-Insurance Liabilities The Company is substantially self-insured for workers’ compensation, employer’s liability, auto liability, general liability and employee group health claims in view of the relatively high per-incident deductibles it absorbs under its insurance arrangements 53 for these risks. Losses are estimated and accrued based upon known facts, historical trends and industry averages.
The following table reflects the Company’s available funding capacity as of December 31, 2024: (in thousands) Cash & cash equivalents $ 44,930 Credit agreement: Second A&R Wintrust Revolving Loan 50,000 Outstanding borrowings on the Second A&R Wintrust Revolving Loan (10,000) Outstanding letters of credit (4,160) Net credit agreement capacity available 35,840 Total available funding capacity $ 80,770 Debt and Related Obligations Long-term debt consists of the following obligations as of: 52 ( in thousand s) December 31, 2024 December 31, 2023 A&R Wintrust Revolving Loans $ 10,000 $ 10,000 Finance leases – collateralized by vehicles, payable in monthly installments of principal, plus interest ranging from 3.96% to 8.60% through 2031 11,888 7,347 Financing liability 5,351 5,351 Total debt $ 27,239 $ 22,698 Less – Current portion of long-term debt (3,314) (2,680) Less – Unamortized discount and debt issuance costs (371) (387) Long-term debt $ 23,554 $ 19,631 See Note 7 – Debt in the accompanying notes to the Company’s consolidated financial statements for further discussion.
Debt and Related Obligations Long-term debt consists of the following obligations as of: ( in thousand s) December 31, 2025 December 31, 2024 Wintrust Revolving Loans $ 10,000 $ 10,000 Finance leases – collateralized by vehicles, payable in monthly installments of principal, plus interest ranging from 4.40% to 8.60% through 2031 20,570 11,888 Financing liability 5,351 5,351 Total debt $ 35,921 $ 27,239 Less – Current portion of long-term debt (5,031) (3,314) Less – Unamortized discount and debt issuance costs (354) (371) Long-term debt $ 30,536 $ 23,554 See Note 7 – Debt in the accompanying notes to the Company’s consolidated financial statements for further discussion.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeCash equivalents as of December 31, 2024 were $43.0 million, which consisted of overnight repurchase agreements in which cash from the Company's main operating checking account is invested overnight in highly liquid, short term investments and certain investments in money market funds sponsored by a large financial institution.
Biggest changeCash equivalents as of December 31, 2025 were $10.2 million, which consisted of overnight repurchase agreements in which cash from the Company's main operating checking account is invested overnight in highly liquid. For the year ended December 31, 2025, the Company recognized interest income in the aggregate of approximately $0.8 million.
As of December 31, 2024, the Company had $10.0 million of direct borrowings outstanding under its Second A&R Wintrust Revolving Loan. The Company is party to an interest rate swap arrangement to manage the risk associated with a portion of its variable-rate long-term debt.
As of December 31, 2025, the Company had $10.0 million of direct borrowings outstanding under the Wintrust Revolving Loan. The Company is party to an interest rate swap arrangement to manage the risk associated with a portion of its variable-rate long-term debt.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk 57 The Company is exposed to market risk through changes in interest rates, primarily limited to borrowings under its Second A&R Wintrust Revolving Loan in excess of the amounts covered by the Company’s interest rate swap arrangement.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk 54 The Company is exposed to market risk through changes in interest rates, primarily limited to borrowings under the Wintrust Revolving Loan in excess of the amounts covered by the Company’s interest rate swap arrangement.
For the year ended December 31, 2024, the Company recognized interest income in the aggregate of approximately $2.2 million. The Company maintains a conservative investment policy and has not experienced any losses in its cash and cash equivalents. Management believes the Company is not exposed to significant risk with respect to such accounts. 58
The Company maintains a conservative investment policy and has not experienced any losses in its cash and cash equivalents. Management believes the Company is not exposed to significant risk with respect to such accounts. 55

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