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What changed in Limbach Holdings, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Limbach Holdings, Inc.'s 2023 and 2024 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 2024 report.

+502 added−431 removedSource: 10-K (2025-03-10) vs 10-K (2024-03-13)

Top changes in Limbach Holdings, Inc.'s 2024 10-K

502 paragraphs added · 431 removed · 340 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

93 edited+38 added−31 removed19 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. 2023 Highlights In 2023, the Company: • Generated $57.4 million of net cash provided by operating activities. • Expanded consolidated gross profit margin by 420 bps to 23.1%. • Revenue generated from the Company’s ODR (as defined below) segment increased 21.1% (versus 2022), achieving its 2023 target of a 50/50 segment revenue mix. • Increased diluted earnings per share by 175% (versus 2022) to $1.76 • Successfully completed the acquisitions of ACME and Industrial Air (as described in more detail below). • In June 2023, the Company was added to the Russell 3000 Index as part of the annual reconstitution of the Russell indexes.
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).
Cost factors are usually limited to a fixed fee and expense estimate and an estimate of the cost of work. With Design/Assist, the specialty contractor is typically contracted early in the design process to provide design and preconstruction input as needed to assist the customer in maintaining the established budget and completing design and drawings.
Cost factors are usually limited to a fixed fee, expense estimate and an estimate of the cost of work. With Design/Assist, the specialty contractor is typically contracted early in the design process to provide design and preconstruction input as needed to assist the customer in maintaining the established budget and completing design and drawings.
GCR and ODR 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.
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.
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 weather.
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.
While compliance with existing laws, regulations and other requirements has not materially adversely affected the Company’s operations in the past, and it is not aware of any proposed requirements that the Company 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.
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.
At any point, 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 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 confirmation from the owner or the general contractor/construction manager of their intention to award the Company the contract and they have directed the Company to begin engineering, designing, incurring construction labor costs or procuring needed equipment and material.
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, 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 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’s focus on environmental stewardship and improving productivity drives not only its efforts to become more energy efficient but also improvements in the Company’s customers’ impact on climate change. Replacing an aging building’s existing systems with modern, energy-efficient systems significantly reduces a building’s energy consumption and carbon footprint while improving cost, air quality and overall system effectiveness.
The Company’s focus on environmental stewardship and improving productivity drives not only its efforts to become more energy efficient but also improvements in the Company’s customers’ impact on the climate. Replacing an aging building’s existing systems with modern, energy-efficient systems significantly reduces a building’s energy consumption and carbon footprint while improving cost, air quality and overall system effectiveness.
Additionally, the difference between the Company’s backlog and remaining performance obligations is due to the portion of unexercised contract options that are excluded, under certain contract types, from its remaining performance obligations as these contracts can be canceled for convenience at any time by the Company or the customer without considerable cost incurred by the customer.
Additionally, the difference between the Company’s backlog and remaining performance obligations is due to the portion of unexercised contract options that are excluded, under certain contract types, from the Company’s remaining performance obligations as these contracts can be canceled for convenience at any time by the Company or the customer without considerable cost incurred by the customer.
The Company also is subject to 13 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 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.
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, impose strict, retroactive, joint and several liability upon persons that contribute to the release of a “hazardous substance” into the environment.
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.
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 who value the Company’s services and reputation.
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.
The Company has dedicated and continues to dedicate its resources to seek opportunities to acquire and integrate businesses that have attractive market positions, supports the Company ODR growth strategy, expands and/or supplements the Company’s current breadth of service offerings and is culturally compatible.
The Company has dedicated and continues to dedicate its resources to seek opportunities to acquire and integrate businesses that have attractive market positions, supports the Company’s ODR growth strategy, expands and/or supplements the Company’s current breadth of offerings and is culturally compatible.
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 9 owners that further reinforces its value proposition and differentiated capabilities.
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.
The Company’s core purpose “is to create great opportunities for people.” The Company has implemented internal development programs, which allow it to attract 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.
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.
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 who have mission critical mechanical (heating, ventilation, air conditioning), electrical, and plumbing infrastructure.
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.
Acting as a mentor and coach to show team members how to practice good safety behavior. This program helped earn the Company’s Ohio business unit the highest honor for which Occupational Safety and Health Administration (“OSHA”) can name a company; OSHA-Voluntary Protection Programs Star Site.
Acting as a mentor and coach to show team members how to practice good safety behavior. In 2020, this program helped earn the Company’s Ohio business unit the highest honor for which Occupational Safety and Health Administration (“OSHA”) can name a company; OSHA-Voluntary Protection Programs Star Site.
Projects are brought into backlog once the Company has been provided with a written confirmation of award and the contract value has been established.
Projects are brought into backlog once the Company has been provided a written confirmation of award and the contract value has been established.
The Company makes available, free of charge, on its Internet website copies of the Company’s annual report 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”).
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 Veterans ERG aims to offer resources, foster camaraderie, and promote understanding among Company employees 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. 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 Company continues to expand its owner-direct offerings to include other digital solutions to manage and monitor the performance of building systems, including data analytics, energy consumption and sustainability.
In addition, the Company continues to expand its owner-direct offerings to include other digital solutions to manage and monitor the performance of building systems, including data analytics, energy consumption and sustainability.
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, and pharmaceutical and biotech laboratories and manufacturing facilities; • 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 sports arenas, 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; 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.
ACE helps mentor high school students and inspires them to pursue careers in design and construction. It is the construction industry’s fastest-growing high school mentoring program, reaching over 8,000 students annually. Benefits & Wellness. The Company focuses on the most crucial component for its success: its people.
ACE helps mentor high school students and inspires them to pursue careers in design and construction. It is the construction industry’s fastest-growing high school mentoring program, reaching over 8,000 students annually. Benefits & Wellness. The Company focuses on the most crucial component for its success; its team members.
The Company believes that it can further increase its cash flow and operating income by acquiring strategically synergistic companies that will increase the Company’s geographic footprint, supplement the Company’s current business model, address capability gaps and enhance the breadth of its service offerings to better serve its clients.
The Company believes that it can further increase its cash flow and operating income by acquiring strategically synergistic companies that will increase the Company’s geographic footprint, supplement the Company’s current business model, address capability gaps and enhance the breadth of its offerings to better serve its customers.
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 year ended December 31, 2023, no GCR segment customer accounted for more than 10% of the Company’s consolidated revenue.
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.
All full-time employees who do not participate in union plans are offered a range of choices among medical, dental and vision plans, life, accident, dependent and disability insurance, and pre-tax health spending accounts that include employer contributions. • Retirement Savings.
All full-time team members who do not participate in union plans are offered a range of choices among medical, dental and vision plans, life, accident, dependent and disability insurance, and pre-tax health spending accounts that include employer contributions. • Retirement Savings.
Segments The Company operates in two segments, (i) General Contractor Relationships (“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, and (ii) Owner Direct Relationships (“ODR”), in which the Company performs owner direct construction projects and/or provides maintenance or services primarily on mechanical, plumbing or electrical systems, building controls and specialty contracting projects direct to, or assigned by, building owners or property 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 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.
We care about our communities, which is why we support social and community-based programs and encourage our employees to make a difference by giving back. • We Act with INTEGRITY: Our business is driven by doing the right thing for our employees and customers.
We care about our communities, which is why we support social and community-based programs and encourage our team members to make a difference by giving back. • We Act with INTEGRITY: Our business is driven by doing the right thing for our team members and customers.
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 historically, and that leverage its captive design and engineering services.
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.
Climate Change and Sustainability The Company recognizes its environmental and societal responsibilities and is committed to sustainability and to improving its environmental footprint as well as operating its business in a manner that seeks to protect the health and safety of the Company’s employees and customers, as well as the public.
Climate Change and Sustainability The Company recognizes its environmental and societal responsibilities and is committed to sustainability and to improving its environmental footprint as well as operating its business in a manner that seeks to protect the health and safety of the Company’s team members and customers, as well as the public.
To support this initiative, the Company created the WICS ERG with a vision to create a culturally agile community that respects and empowers women in its company and industry. • Unidos. Unidos is an ERG that was created to promote, empower and amplify the Hispanic culture within the Company.
To support this initiative, the Company created the WICS ERG with a vision to create a culturally agile community that respects and empowers women within the Company and industry. • Unidos. Unidos is an ERG that was created to empower and amplify the Hispanic culture within the Company.
One of the ways the Company shows its commitment is through offering competitive employee 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: • Health and Welfare Plans.
Creating an engaging workplace environment that provides for competitive pay and benefits, attractive career development opportunities, and a collaborative, respectful culture further enables the Company to achieve continued success. Employees.
Creating an engaging workplace environment that provides for competitive pay and benefits, attractive career development opportunities, and a collaborative, respectful culture further enables the Company to achieve continued success. Team members.
From in-person to online courses, formalized and other specialized training, the Company’s employees benefit from opportunities to strengthen their leadership and management competencies, improve communication and interpersonal skills, and advance their technical proficiency.
From in-person to online courses, formalized and other specialized training, the Company’s team members benefit from opportunities to strengthen their leadership and management competencies, improve communication and interpersonal skills, and advance their technical proficiency.
The Company helps provide its employees with financial security by offering a 401(k) Savings Plan, which includes company matching contributions, and an Employee Stock Purchase Plan. • Employee Assistance Programs.
The Company helps provide its team members with financial security by offering a 401(k) Savings Plan, which includes company matching contributions, and an Employee Stock Purchase Plan. • Employee Assistance Programs.
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 ACME Transaction.
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.
Hearts & Hands is an ERG with a core purpose of providing opportunities and encouraging employees to make a difference by giving back to communities in which the Company has an operating footprint. 12 • Veterans .
Hearts & Hands is an ERG with the core purpose of providing opportunities and encouraging team members to make a difference by giving back to communities in which the Company has an operating footprint. • Veterans .
We CARE , one of the Company’s Core Values, is the foundation of its efforts to create a diverse, fair and inclusive organization. Building a culture where all of its employees feel a sense of belonging is important to the Company.
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.
In addition, the Company screens leadership hires and measures employee performance against these Core Values, and regularly measures employee engagement against these values through the Company’s annual employee engagement survey.
In addition, the Company screens leadership hires and measures team member performance against these core values, and regularly measures team member engagement against these values through the Company’s annual team member engagement survey.
The Company’s people have access to resources that include a robust learning management system that provides company-wide access for employees to a number of online learning modules and support tools.
The Company’s team members have access to resources that include a robust learning management system that provides company-wide access for team members to a number of online learning modules and support tools.
The Company believes price is the predominant selection criteria in this process. • Design/Build or Design/Assist. Design/Build or Design/Assist is a process in which a specialty contractor is selected among competing contractors using best value methodology. In best value, the Company believes the selection is made based primarily upon qualifications and project approach, and secondarily on select cost factors.
Design/Build or Design/Assist is a process in which a specialty contractor is selected among competing contractors using best value methodology. In best value, the Company believes the selection is made primarily upon qualifications and project approach, and secondarily upon select cost factors.
The Company is actively concentrating managerial and sales resources on training and hiring experienced employees to sell and profitably perform ODR-related services. In many locations, the Company has added or upgraded its capabilities and the Company believes its investments and efforts have provided customer value and stimulated growth within the segment.
The Company continues to actively concentrate managerial and sales resources on training and hiring experienced team members to sell and profitably perform ODR-related services. In many locations, the Company has added or upgraded its capabilities and the Company believes its investments and efforts have provided customer value and stimulated growth within the segment.
Through the Company’s Employee Assistance Program, it offers its employees, and their dependents or household members, access to services and counseling on a variety of personal, professional, legal, and financial matters, at no cost. • Wellness Program. Consists of various activities and financial incentives intended to inspire the Company’s team towards healthy living through personal accountability. Safety Culture.
Through the Employee Assistance Program, the Company offers its team members, and their dependents or household members, access to services and counseling on a variety of personal, professional, legal, and financial matters, at no cost. • Work/Life Programs. Consists of various activities intended to inspire the Company’s team members towards healthy living through personal accountability. Safety Culture.
The Company seeks to attract and retain quality employees by providing them an enhanced career path that offers a stable income, attractive 8 benefits packages and excellent advancement opportunities. The Company invests in its employees through safety and wellness programs, internal communication, career development training programs, recognition programs and succession planning initiatives. Fully Integrated Operations .
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 offers its employees the opportunity to join ERGs. These groups foster professional development, social connectivity, and celebrate diversity 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 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”) .
As a result of its efforts, the Company was recognized as one of the top training organizations in the world earning a Training APEX Award from Training magazine in 2023 and 2024.
As a result of its efforts, the Company was recognized as one of the top training organizations in the world earning a Training APEX Award from Training magazine for its third consecutive year (in 2023, 2024 and 2025).
The Company believes it has a good relationship with its employees and has developed several strong partnerships with local unions to have access to an experienced, talented craft workforce. Core Values and Core Purpose. From the technician in the field to the leadership of its business, the Company focuses on caring for people.
The Company believes it has a good relationship with its team members and has developed several strong partnerships with local unions to have access to an experienced, talented technician and craft workforce. Core Values and Core Purpose. From the technicians in the field to the management team, the Company focuses on caring for its people.
The Company’s Hearts and Minds program asks its employees to take direct responsibility for eliminating and preventing all incidents and injuries at home and in the workplace, which is done by: • Hiring the Right People. The Company is focused on hiring qualified employees who share in its Core Values. • Knowing the Details.
The Company’s Hearts and Minds Forum asks its team members to take direct responsibility for eliminating and preventing all incidents and injuries at home and in the workplace, which is done by: • Hiring the Right People. Hiring qualified team members who share its core values. • Knowing the Details.
The mission of this ERG is to create a supportive environment for Hispanic employees and provide a more diverse and inclusive environment where everyone feels safe, respected and valued. • Hearts & Hands .
The mission of this ERG is to create a supportive environment for Hispanic team members and their allies and provide a more inclusive environment where everyone feels safe, respected and valued. • Hearts & Hands .
The Company is committed to diversifying its workforce, promoting and supporting women within its organization to take on leadership roles, and helping encourage other women to join its industry as a whole.
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’s ODR revenue increased by 21.1% to $262.0 million for the year ended December 31, 2023 as compared to $216.4 million for the year ended December 31, 2022. The increase in year-over-year ODR segment revenue was primarily due to the Company's continued focus on the accelerated growth of its ODR business.
The Company’s ODR revenue increased by 31.9% to $345.5 million for the year ended December 31, 2024 as compared to $262.0 million for the year ended December 31, 2023. The increase in year-over-year ODR segment revenue was primarily due to the Company's continued focus on the accelerated growth of its ODR business.
The Company also partners with building owners in other market sectors (infrastructure, government, hospitality and commercial). It is imperative that the partnerships formed between the Company and its building owners share in similar core values. Investment in its Employees . 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 share similar core values. Investment in Its Team Members . Employee development underpins the Company’s efforts to execute its strategy.
In addition, by establishing successful, long-term partnerships with building owners, the Company has positioned itself to provide reoccurring 6 maintenance services, which it believes improves revenue predictability and could increase economic resilience. The Company provides its ODR business services through both a variety of project delivery methodologies and other service offerings: • Critical System Repairs.
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.
The Company appreciates the fact that it owes its century-old existence to employees who work hard to help the Company prosper. As such, the Company has committed itself to the health, safety and well-being of its workers and their families.
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.
On July 3, 2023 (the “ACME Effective Date”), the Company, Limbach Facility Services LLC (“LFS”), a Delaware limited liability company and a wholly-owned subsidiary of the Company, and ACME Industrial Piping, LLC (“ACME”), and the owner of ACME (the “ACME Seller”) entered into a Purchase Agreement (the “ACME Purchase Agreement”) pursuant to which LFS purchased all of the outstanding equity interests in ACME from the ACME Seller (the “ACME Transaction”).
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”).
Performed through 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 company leadership to craft professional. • 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. 13 • Mentoring and Coaching.
This forum is composed of employees and leaders across the company who have made it their mission to maximize the potential of the Company’s employees by creating great opportunities through a diverse, fair and inclusive environment. The Embrace Forum focuses on several core areas: culture, recruitment, development, promotion and employee resource groups (“ERGs”).
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 has and plans to continue to make investments to expand its ODR revenue by increasing the value it can offer to building owners and continues to evaluate areas in which it could expand the breadth of its service offerings to better serve its customers. Employee development underpins the Company’s efforts to execute its 2024 strategy.
The Company continues to make investments to expand its ODR revenue by increasing the value it can offer to building owners and continues to evaluate areas in which it could expand the breadth of its offerings to better serve its customers.
Currently, the Company also has significant geographical diversification across regions that are generally located in the eastern portions of the United States, again reducing its exposure to negative developments in any given region.
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.
“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 GCR backlog was $186.9 million and $302.9 million as of December 31, 2023 and 2022, 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.
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. Additionally, the Company provides captive engineering capabilities, estimating and virtual design 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.
The Company maintains a disciplined approach of full life-cycle of engineered solutions and craft expertise to be a one-stop-shop for building owners, maximizing their investment in their mission-critical assets.
The Company believes it maintains a disciplined approach, capable of providing a full life-cycle of engineered solutions and craft expertise enabling it to be a one-stop-shop for building owners.
The Industrial Air Transaction closed on the Industrial Air Effective Date. As a result of the Industrial Air Transaction, Industrial Air became a wholly-owned indirect subsidiary of the Company.
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.
This delivery option includes lump sum or guaranteed maximum price on a fixed fee basis. ODR Segment. The Company’s key business initiative for its ODR segment is to position itself as a value-added and indispensable partner to building owners in mission-critical markets, providing full life-cycle capabilities from concept design and engineering through system commissioning and recurring 24/7 service and maintenance.
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.
Additionally, the Company was recognized as a 2024 winner of the Association of Talent Development’s BEST award, which honors organizations that demonstrate enterprise-wide success as a result of employee talent development. The Company’s employees see the impact of these programs, and in 2023, its training programs averaged a participant Net Promoter Score of over 90%.
Additionally, the Company was recognized in 2024 and 2025 as a winner of the Association of Talent Development’s BEST award, which honors organizations that demonstrate enterprise-wide success as a result of employee talent development.
On November 1, 2023 (the “Industrial Air Effective Date”), the Company, LFS and Industrial Air, LLC (“Industrial Air”), and the owner of Industrial Air (the “IA Seller”) entered into a Purchase Agreement (the “Industrial Air Purchase Agreement”) pursuant to which LFS purchased all of the outstanding equity interests in Industrial Air from the IA Seller (the “Industrial Air Transaction”).
On December 2, 2024 (the “Consolidated Mechanical Effective Date”), LFS, Consolidated Mechanical, and the owner of Consolidated Mechanical (the “Consolidated Mechanical Seller”) entered into a Purchase Agreement (the “Consolidated Mechanical Purchase Agreement”) pursuant to which LFS purchased all of the outstanding equity interests in Consolidated Mechanical from the Consolidated Mechanical Seller (the “Consolidated Mechanical Transaction”).
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. 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.
GCR Segment. The Company provides its GCR segment services through the following project delivery methodologies: • Plan & Spec Bidding. Plan & Spec bidding is a competitive bid process among multiple contractors bidding on nearly complete or completed design documents based on a lump sum price for delivery of the project.
Plan & Spec bidding is a competitive bid process among multiple contractors bidding on nearly or fully complete design documents based on a lump sum price for delivery of the project. The Company believes price is the predominant selection criteria in this process. • Design/Build or Design/Assist.
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.
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.
The acquisition expands the Company’s market share within its existing operating footprint, provides further exposure to an attractive customer base and supports the Company's continued ODR growth strategy. The Industrial Air Transaction.
Kent Island excels in designing, engineering, installing, servicing, and maintaining mechanical and plumbing systems for complex facilities. The acquisition expands the Company’s market share within its existing operating footprint, provides further exposure to an attractive customer base and supports the Company's continued ODR growth strategy. The Consolidated Mechanical Transaction.
Safety is integral to the Company’s unique culture and Core Values. The Company cares about its employees and their families, and it holds each other accountable for working safely. The Company’s safety culture is based on its “Hearts and Minds Commitment to Safety” program, established in 2013 by senior staff and field professionals via its Hearts and Minds Forum.
The Company’s safety culture is based on its “Hearts and Minds Commitment to Safety” program, established in 2013 by its senior staff and field professionals via its Hearts and Minds Forum.
The Company understands that diversity is truly a competitive advantage that helps drive growth and innovation. Embrace Forum. The Company formed the Embrace Forum to continue to evolve its commitment to a culture of diversity and inclusion.
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’s “ We Care ” survey, which has been issued for more than fifteen years, provides leadership with insights, including constructive ideas on how to improve the overall business for those who work for it. Training and Employee Development .
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.
Due to the Company’s on-going 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.
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.
ODR gross profit increased to 29.0% for the year ended December 31, 2023 from 25.5% for the year ended December 31, 2022 due to the combination of an increase in revenue and higher margins driven by contract mix. Improved GCR Segment Margins.
ODR gross profit percentage increased to 31.2% for the year ended December 31, 2024 from 29.0% for the year ended December 31, 2023, mainly driven by the mix of higher margin ODR segment work and net material gross profit write-ups. Improved GCR Segment Margins.
Based on historical trends, the Company currently estimates that 83% of its GCR backlog as of December 31, 2023 will be recognized as revenue during 2024. Additionally, the reduction in GCR backlog has been intentional as the Company continues to focus on higher margin projects than historically, as well as its focus on smaller, higher margin owner direct projects.
Additionally, the reduction in GCR backlog has been 10 intentional as the Company continues to focus on higher margin projects than it has done historically, as well as its focus on smaller, higher margin owner direct projects.
Based on historical trends, the Company estimates that 95% of its ODR backlog as of December 31, 2023 will be recognized as revenue during 2024. The Company believes its ODR backlog increased due to its continued focus on the accelerated growth of its ODR business.
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.
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.
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.
As of December 31, 2023, the Company had approximately 1,400 employees, including approximately 400 full-time salaried employees, comprising project managers, estimators, superintendents and engineers who manage crews in its construction business and office staff. The Company also had approximately 1,000 craft employees, some of whom are represented by various labor unions.
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.
The Company’s culture is driven by its Core Values: • We CARE: We care about safety and having our employees return home injury-free every day. We care about the environment, which is why we explore the life-cycle and total cost of ownership on every project.
We care about the environment, which is why we explore the life-cycle and total cost of ownership on every project.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe cannot predict with certainty what the effect of such regulation may be on us or our customers. 27 On March 6, 2024, the SEC finalized new rules that would require significant climate-related disclosures by public companies, including evaluation and disclosure of material climate-related risks and opportunities, GHG emissions inventory, climate-related targets and goals, and financial impacts of physical and transition risks (the “SEC Climate Rules”).
Biggest changeWhile previous presidential administrations prioritized climate change initiatives such as rejoining the Paris Agreement, setting GHG emission reduction targets, and finalizing the SEC rules that would require significant climate-related disclosures by public companies, including evaluation and disclosure of material climate-related risks and opportunities, GHG emissions inventory, climate-related targets and goals, and financial impacts of physical and transition risks (the “SEC Climate Rules”), whose implementation, after significant legal challenges, was voluntarily paused by the SEC in April 2024 pending judicial review, the current presidential administration may reverse or significantly alter these regulatory trends.
Although strikes, work stoppages and other labor disputes have not had a significant impact on our operations or results in the recent past, any such labor actions, or our inability to renew the collective bargaining agreements, could materially and adversely impact our financial position, results of operations and cash flows if they occur in the future.
Although strikes, work stoppages and other labor disputes have not had a significant impact on our operations or results of operations in the recent past, any such labor actions, or our inability to renew the collective bargaining agreements, could materially and adversely impact our financial position, results of operations and cash flows if they occur in the future.
For 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 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.
For 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.
If the customers with which we contract are affected by an outbreak of infectious disease, GCR and ODR work may be delayed or cancelled, and we may incur increased labor and materials costs.
If the customers with which we contract are affected by an outbreak of infectious disease, ODR and GCR work may be delayed or cancelled, and we may incur increased labor and materials costs.
We are generally not restricted from issuing additional shares of our common stock, up to the 100,000,000 shares of voting common stock authorized by our second amended and restated certificate of incorporation, which could be increased by a vote of the holders of a majority of our shares.
We are generally not restricted from issuing additional shares of our common stock, up to the 100,000,000 shares of voting common stock authorized by our second amended and restated certificate of incorporation, which could be increased by a vote of the holders of a majority of our shares of common stock.
Deliberate, malicious acts, including terrorism and sabotage, could damage our facilities, disrupt our operations or injure employees, contractors, customers or the public and result in liability to us.
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.
Additionally, employees, contractors and the public could suffer substantial physical injury from acts of terrorism for which we could be liable. Governmental authorities may also impose security or other requirements that could make our operations more difficult or costly. The consequences of any such actions could adversely affect our financial position, results of operations and cash flows.
Additionally, our employees, contractors and the public could suffer substantial physical injury from acts of terrorism for which we could be liable. Governmental authorities may also impose security or other requirements that could make our operations more difficult or costly. The consequences of any such actions could adversely affect our financial position, results of operations and cash flows.
In addition, the costs incurred and gross profit realized on our contracts can vary, sometimes substantially, from our original projections due to a variety of factors, including, but not limited to: • on-site conditions that differ from those described in the original bid or contract; • failure to include required materials, equipment, or work in a bid, or the failure to properly estimate the quantities or costs needed to complete a lump sum or guaranteed maximum price contract; • contract or project modifications creating unanticipated costs not covered by change orders; • failure by the customer, owner or general contractor to properly approve and authorize change orders for work that is required and as a result, the inability to bill and collect for the value of the work performed; • failure by suppliers, vendors, subcontractors, designers, engineers, consultants, joint venture partners or customers to perform their obligations; • delays in quickly identifying and taking measures to address issues which arise during contract execution; • changes in availability, proximity and costs of materials and equipment, including pipe, sheet metal, other construction materials and mechanical, electrical and plumbing equipment; • claims or demands from third parties for alleged damages arising from the design, construction or use and operation of a project of which our work is part; • difficulties in obtaining required governmental permits or approvals; • availability and skill level of workers in the geographic location of a project; • citations issued by any governmental authority, including OSHA; • unexpected labor conditions, shortages or work stoppages causing delays in completion, or acceleration of the contracted work to maintain milestone completion dates, which could cause losses due to not meeting estimated production targets; • installation productivity rates different than the rate that was estimated; • changes in applicable tariffs, laws and regulations; • delays caused by weather conditions; • fraud, theft or other improper activities by suppliers, vendors, subcontractors, designers, engineers, consultants, joint venture partners, customers or our own personnel; and • mechanical or performance problems with equipment.
In addition, the costs incurred and gross profit realized on our contracts can vary, sometimes substantially, from our original projections due to a variety of factors, including, but not limited to: • on-site conditions that differ from those described in the original bid or contract; • failure to include required materials, equipment, or work in a bid, or the failure to properly estimate the quantities or costs needed to complete a lump sum or guaranteed maximum price contract; • contract or project modifications creating unanticipated costs not covered by change orders; • failure by the customer, owner or general contractor to properly approve and authorize change orders for work that is required and as a result, the inability to bill and collect for the value of the work performed; • failure by suppliers, vendors, subcontractors, designers, engineers, consultants, joint venture partners or customers to perform their obligations; • delays in quickly identifying and taking measures to address issues which arise during contract execution; • changes in availability, proximity and costs of materials and equipment, including pipe, sheet metal, other construction materials and mechanical, electrical and plumbing equipment; • claims or demands from third parties for alleged damages arising from the design, construction or use and operation of a project of which our work is part; • difficulties in obtaining required governmental permits or approvals; • availability and skill level of workers in the geographic location of a project; • citations issued by any governmental authority, including OSHA; • unexpected labor conditions, shortages, strikes or work stoppages in general causing delays in completion, or acceleration of the contracted work to maintain milestone completion dates, which could cause losses due to not meeting estimated production targets; • installation productivity rates different than the rate that was estimated; • changes in applicable tariffs, laws and regulations; • delays caused by weather conditions; 16 • fraud, theft or other improper activities by suppliers, vendors, subcontractors, designers, engineers, consultants, joint venture partners, customers or our own personnel; and • mechanical or performance problems with equipment.
Although we believe our ODR-centric focus addresses the needs of our business and its long-term objectives, our strategy is based on certain assumptions and forecasts, which are subject to risks and uncertainties, including whether we have accurately identified the issues, targeted the appropriate market customers, and executed our strategic efforts at the appropriate scale and scope, as well as continuing to do so.
Although we believe our ODR-centric 20 focus addresses the needs of our business and its long-term objectives, our strategy is based on certain assumptions and forecasts, which are subject to risks and uncertainties, including whether we have accurately identified the issues, targeted the appropriate market customers, and executed our strategic efforts at the appropriate scale and scope, as well as continuing to do so.
If a customer defaults in making their payments on a project to which we have devoted resources, it could have a material negative effect on our financial position, results of operations and cash flows. Unsatisfactory safety performance may subject us to penalties, affect customer relationships, result in higher operating costs, negatively impact employee morale and result in higher employee turnover.
If a customer defaults in making their payments on a project to which we have devoted resources, it could have a material negative effect on our financial position, results of operations and cash flows. 19 Unsatisfactory safety performance may subject us to penalties, affect customer relationships, result in higher operating costs, negatively impact employee morale and result in higher employee turnover.
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 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.
Any system of controls, however well designed and operated, is based in 32 part on certain assumptions and can provide only reasonable, and not absolute, assurances that the objectives of the system are met. Any failure of our disclosure controls and procedures or internal controls over financial reporting could harm our financial condition and results of operations.
Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, and not absolute, assurances that the objectives of the system are met. Any failure of our disclosure controls and procedures or internal controls over financial reporting could harm our financial condition and results of operations.
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.
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.
For instance, incorporating greater resource efficiency into our solutions, whether to comply with upgraded building codes or recommended practices given a region’s particular exposure to climate conditions, or undertaken to 26 satisfy demand from increasingly environmentally conscious customers or to meet our own sustainability goals, often raises our costs.
For instance, incorporating greater resource efficiency into our solutions, whether to comply with upgraded building codes or recommended practices given a region’s particular exposure to climate conditions, or undertaken to satisfy demand from increasingly environmentally conscious customers or to meet our own sustainability goals, often raises our costs.
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 contract costs. The earnings or losses recognized on individual contracts are based on estimates of contract revenue, costs and profitability.
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.
These provisions prevent a stockholder from increasing the size of our Board of Directors and then gaining control of our Board of Directors by filling the resulting vacancies 31 with its own nominees. This makes it more difficult to change the composition of our Board of Directors but promotes continuity of management. • Classified board.
These provisions prevent a stockholder from increasing the size of our Board of Directors and then gaining control of our Board of Directors by filling the resulting vacancies with its own nominees. This makes it more difficult to change the composition of our Board of Directors but promotes continuity of management. • Classified board.
The utilization of our workforce is impacted by numerous factors, including: 19 • 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.
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.
Our risk of such increased payments may be greater if any of the 25 participating employers in these underfunded plans withdraws from the plan and is not able to contribute an amount sufficient to fund the unfunded liabilities associated with its participants in the plan.
Our risk of such increased payments may be greater if any of the participating employers in these underfunded plans withdraws from the plan and is not able to contribute an amount sufficient to fund the unfunded liabilities associated with its participants in the plan.
Due to the nature of our contracts, we sometimes commit resources to projects prior to receiving payments from the customer in amounts sufficient to cover expenditures on projects as they are incurred. Delays in customer payments may require us to make a working capital investment.
Due to the nature of our contracts, we sometimes commit resources to projects prior to receiving payments from the customers in amounts sufficient to cover expenditures on projects as they are incurred. Delays in customer payments may require us to make a working capital investment.
Following the repurchase of all of our previously issued shares of Class A Preferred Stock, our Board of Directors has the authority, without further action by the stockholders, to issue up to 600,000 additional shares of undesignated preferred stock with rights and preferences, including voting rights, designated time to time by our Board of Directors.
Following the repurchase of all of our previously issued shares of Class A Preferred Stock, our Board of Directors has the authority, without further action by the stockholders, to issue up to 600,000 shares of undesignated preferred stock with rights and preferences, including voting rights, designated time to time by our Board of Directors.
We also may encounter difficulties or failure to integrate acquired businesses and successfully managing the growth we expect to experience from these acquisitions. We may choose to finance future acquisitions with debt, equity, cash or a combination of the three. Future acquisitions could dilute earnings.
We also may encounter difficulties or failure to integrate acquired businesses and successfully managing the growth we expect to experience from these acquisitions. 18 We may choose to finance future acquisitions with debt, equity, cash or a combination of the three. Future acquisitions could dilute earnings.
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. 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 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.
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.
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.
Default under our debt agreements could result in, among other things, us no longer being entitled to borrow 24 under one or more of the agreements, acceleration of the maturity of outstanding indebtedness under the agreements, and/or foreclosure on any collateral securing the obligations under the agreements.
Default under our debt agreements could result in, among other things, us no longer being entitled to borrow under one or more of the agreements, acceleration of the maturity of outstanding indebtedness under the agreements, and/or foreclosure on any collateral securing the obligations under the agreements.
Timing of the award and performance of new contracts could have an adverse effect on our operating results and cash flow. 16 The timing of project awards is unpredictable and outside of our control. Project awards often involve complex and lengthy negotiations and competitive bidding processes.
Timing of the award and performance of new contracts could have an adverse effect on our operating results and cash flow. The timing of project awards is unpredictable and outside of our control. Project awards often involve complex and lengthy negotiations and competitive bidding processes.
Remote working environments may be less secure and more susceptible to hacking attacks, including phishing and social engineering attempts that have sought, and may seek, to exploit remote working environments. Of special note is our risk when implementing new capabilities.
Remote and hybrid working environments may be less secure and more susceptible to hacking attacks, including phishing and social engineering attempts that have sought, and may seek, to exploit remote working environments. Of special note is our risk when implementing new capabilities.
If our estimates or assumptions prove to be inaccurate, due to changing circumstances or our failure to successfully execute the work, cost overruns may occur and we could experience reduced profits 15 or a loss for affected projects.
If our estimates or assumptions prove to be inaccurate, due to changing circumstances or our failure to successfully execute the work, cost overruns may occur and we could experience reduced profits or a loss for affected projects.
The success of our stated growth strategy depends on our ability to realize the anticipated benefits from the acquired businesses, such as the expansion of our existing operations and elimination of redundant costs. To realize these benefits, we must 18 successfully integrate the operations of the acquired businesses with our existing operations.
The success of our stated growth strategy depends on our ability to realize the anticipated benefits from the acquired businesses, such as the expansion of our existing operations and elimination of redundant costs. To realize these benefits, we must successfully integrate the operations of the acquired businesses with our existing operations.
If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management. 30 Future sales of our common stock may cause our common stock price to decline.
If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management. Future sales of our common stock may cause our common stock price to decline.
Our labor 20 expenses may increase as a result of a shortage in the supply of skilled and other personnel. Labor shortages, increased labor costs or the loss of key personnel could reduce our profitability and negatively impact our business.
Our labor expenses may increase as a result of a shortage in the supply of skilled and other personnel. Labor shortages, increased labor costs or the loss of key personnel could reduce our profitability and negatively impact our business.
Information technology system failures, including suppliers’ or vendors’ system failures, could disrupt our 28 operations by causing transaction errors, processing inefficiencies, the loss of customers, other business disruptions, or the loss of employee personal information.
Information technology system failures, including suppliers’ or vendors’ system failures, could disrupt our operations by causing transaction errors, processing inefficiencies, the loss of customers, other business disruptions, or the loss of employee personal information.
Experiencing or addressing the various physical, regulatory and adaptation/transition risks from climate change may significantly reduce our revenue and profitability, or cause us to generate losses.
Experiencing or addressing the various physical, regulatory and adaptation/transition risks from climate change may significantly reduce our revenue and profitability, or cause 27 us to generate losses.
Under certain circumstances, the occurrence of an event of default under one of these agreements (or the acceleration of the maturity of the indebtedness under one of these agreements) may constitute an event of default under one or more of our other debt or surety agreements.
Under certain circumstances, the occurrence of an event of default under one of these agreements (or the acceleration of the maturity 25 of the indebtedness under one of these agreements) may constitute an event of default under one or more of our other debt or surety agreements.
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, 2023 or 2022. 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, 2024 or 2023. Increases in healthcare costs could adversely affect our financial results.
If our surety companies were to limit or eliminate our access to bonds, the alternatives would include seeking bonding capacity from other surety companies, increasing business with clients that do not require bonds and posting other forms of collateral for project performance, such as letters of credit or cash.
If our surety companies were to limit or eliminate our access to bonds, the alternatives would include seeking bonding capacity from other surety companies, increasing business with customers that do not require bonds and posting other forms of collateral for project performance, such as letters of credit or cash.
As of December 31, 2023, 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, 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.
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 employment turnover.
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.
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, such as a recession; • 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; • 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.
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, 2023, 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, 2024, we do not have any preferred stock outstanding that has any preferential dividends.
Because of the complex nature of healthcare laws, as well as periodic healthcare reform legislation adopted by Congress, state legislatures, and municipalities, we cannot predict with certainty the future effect of these laws on our healthcare costs.
Because of the complex nature of healthcare laws, as well as periodic healthcare reform legislations adopted by Congress, state legislatures, and municipalities, we cannot predict with certainty the future effect of these laws on our healthcare costs.
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, 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.
Integrating acquired businesses involves a number of operational challenges and risks, including: • diversion of management’s attention from our existing business; • difficulties in the retention of management and other key employees, the assimilation of different cultures and practices, broad and geographically dispersed personnel and operations, and the retention of clients or key employees of an acquired business could negatively impact our business and the acquired business; • unanticipated issues in integrating an acquired business’s accounting, information technology, human resources, and other administrative systems may fail to permit effective management and expense reduction; and • the risk of additional financial and accounting challenges and complexities in areas such as tax planning, treasury management, financial reporting and internal controls.
Integrating acquired businesses involves a number of operational challenges and risks, including: • diversion of management’s attention from our existing business; • inability to successfully convert acquisitions to our operational business strategy; • difficulties in the retention of management and other key employees, the assimilation of different cultures and practices, broad and geographically dispersed personnel and operations, and the retention of customers or key employees of an acquired business could negatively impact our business and the acquired business; • unanticipated issues in integrating an acquired business’s accounting, information technology, human resources, and other administrative systems may fail to permit effective management and expense reduction; and • the risk of additional financial and accounting challenges and complexities in areas such as tax planning, treasury management, financial reporting and internal controls.
Information technology system failures, network disruptions or cyber security 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 scheduling.
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.
Our obligation to contribute to multiemployer pension plans could give rise to significant expenses and liabilities in the future. We contribute to approximately 40 multiemployer pension plans in the United States under collective bargaining agreements that generally provide pension benefits to employees covered by these agreements. Approximately 54% 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 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.
The market price of our common stock has been volatile and may be volatile in the future, and could be subject to wide fluctuations in price in response to various factors, some of which are beyond our control.
Risks Related to Ownership of Our Common Stock The price of our common stock may be volatile. The market price of our common stock has been volatile and may be volatile in the future, and could be subject to wide fluctuations in price in response to various factors, some of which are beyond our control.
Further, infectious outbreaks have and could in the future cause disruption to the U.S. economy, or the local economies of the markets in which we operate, and may cause shortages of building materials, increased costs associated with obtaining building materials, affect job growth and consumer confidence, or cause economic changes, including the possibility of an economic recession or inflation, that we cannot anticipate.
Further, pandemics, epidemics, infectious outbreaks or other public health crisis’ have and could in the future cause disruption to the U.S. economy, or the local economies of the markets in which we operate, and may cause shortages of building materials, increased costs associated with obtaining building materials, affect job growth and consumer confidence, or cause economic changes, including the possibility of an economic recession or inflation, that we cannot anticipate.
Our contributions to these plans were approximately $11.6 million for the year ended December 31, 2023 and $12.6 million for the year ended December 31, 2022. The costs of providing benefits through such plans have increased in recent years.
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.
Overall, the potential impact of a pandemic, epidemic or outbreak of an infectious disease 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. Future climate change could adversely affect us.
However, if such proposals were to be enacted, or if modifications were to be made to certain existing regulations, the consequences could have a material adverse impact on us, including increasing our tax burden, increasing the cost of tax compliance or otherwise adversely affecting our financial position, results of operations and cash flows. Item 1B. Unresolved Staff Comments Not applicable.
However, if such proposals were to be enacted, or if modifications were to be made to certain existing regulations, the consequences could have a material adverse impact on us, including increasing our tax burden, increasing the cost of tax compliance or otherwise adversely affecting our financial position, results of operations and cash flows.
In addition, the rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks.
In addition, the rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks by introducing new vulnerabilities.
If equity research analysts publish unfavorable commentary or downgrade our common stock, the price and trading volume of our common stock could decline. The trading market for our common stock could be affected by equity research analysts’ research or reports about us and our business.
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.
Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. 14 Risks Related to Our Business and Industry Intense competition in our industry could reduce our market share and profit.
Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
If we are unable to meet these competitive challenges, we could lose market share to our competitors and experience an overall reduction in our profits. In addition, our profitability could be impaired if we have to reduce prices to remain competitive. We face competition from the in-house service organizations of our customers.
If we are unable to meet these competitive challenges, we could lose market share to our competitors and experience an overall reduction in our profits. In addition, our profitability would be impaired if we have to reduce our prices to remain competitive.
Because a significant portion of our revenue is generated from large projects, our results of operations can 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.
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.
Repercussions of severe weather conditions may include: • curtailment of services; • suspension of operations; • inability to meet performance schedules in accordance with contracts and potential liability for liquidated damages; • injuries or fatalities; • weather related damage to facilities; • disruption of information systems; • inability to receive machinery, equipment and materials at jobsites; and • loss of productivity.
Repercussions of severe weather conditions may include: • curtailment or suspension of services and operations; • inability to meet performance schedules in accordance with contracts, potentially leading to liability for liquidated damages or reputational harm; • injuries or fatalities; • weather related damage to facilities, equipment, and infrastructure; • disruption of information systems or communication networks; • increased insurance premiums, deductibles, or potential lack of adequate insurance coverage for weather-related losses; • inability to receive machinery, equipment and materials at jobsites; and • loss of productivity.
If economic conditions remain uncertain or weaken, our revenue and profitability could be adversely affected. Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly. Borrowings under our Second A&R Wintrust Credit Agreement (as defined below) are at variable rates of interest and expose us to interest rate risk.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly. Borrowings under our Second A&R Wintrust Credit Agreement (as defined below) are at variable rates of interest and expose us to interest rate risk.
By contract, we remain liable to our customers for the performance or failures of our subcontractors and suppliers. We generally do not bid on projects unless we have commitments from suppliers for the materials and equipment and from subcontractors for the services required to complete the projects at prices that have been included in the bid.
We generally do not bid on projects unless we have commitments from suppliers for the materials and equipment and from subcontractors for the services required to complete the projects at prices that have been included in the bid.
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.
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.
The operating results of an individual location may differ from those of another location for a variety of reasons, including market size, local customer base, regional construction practices, competitive landscape, regulatory requirements, state and local laws and local economic conditions. As a result, certain of our locations may experience higher or lower levels of profitability and growth than other locations.
The operating results of an individual location may differ from those of another location for a variety of reasons, including market size, local customer base, regional construction practices, competitive landscape, regulatory requirements, state and local laws and local economic conditions.
These trade conflicts and related escalating governmental actions that result in additional tariffs, duties and/or trade restrictions could increase our operating costs, cause disruptions or shortages in our supply chains and/or negatively impact the U.S., regional or local economies in which we operate, and, individually or in the aggregate, materially and adversely affect our business and our consolidated financial statements.
These trade conflicts and related escalating governmental actions that result in additional tariffs, duties and/or trade restrictions could increase our operating costs, cause disruptions or shortages in our supply chains and/or negatively impact the U.S., regional or local economies in which we operate, and, individually or in the aggregate, materially and adversely affect our business and our consolidated financial statements. 24 Rising inflation and/or interest rates, or deterioration of the United States economy could have a material adverse effect on our business, financial condition and results of operations.
As of March 12, 2024, we had an aggregate of 11,131,702 shares of our outstanding common stock, of which 1,095,177 shares were held by our current directors and officers. There were no holders of greater than 10% of our common stock as of March 12, 2024.
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 such, if we were to experience an interruption or reduction in the availability of bonding capacity, it is likely we would be unable to compete for or work on certain projects. 22 Our insurance policies against many potential liabilities require high deductibles. Additionally, difficulties in the insurance markets may adversely affect our ability to obtain necessary insurance.
We may be unable to secure these alternatives in a timely manner, on acceptable terms, or at all. As such, if we were to experience an interruption or reduction in the availability of bonding capacity, it is likely we would be unable to compete for or work on certain projects. Our insurance policies against many potential liabilities require high deductibles.
As of the December 31, 2023, we had $35.9 million of available borrowing capacity under the Second A&R Wintrust Revolving Loan (as defined below). In addition, we have entered into an interest rate swap on our Second A&R Wintrust Revolving Loan that involves the exchange of variable for fixed rate interest payments in order to reduce interest rate volatility.
In addition, previously, we have entered into an interest rate swap on our Second A&R Wintrust Revolving Loan that involves the exchange of variable for fixed rate interest payments in order to reduce interest rate volatility.
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. 29 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.
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.
When successful, we remain obligated to perform our services after most extraordinary events subject to relief that may be available pursuant to a force majeure clause. If we are not able to react quickly to force majeure events, our operations may be affected significantly, which may have a negative impact on our financial position, results of operations and cash flows.
If we are not able to react quickly to force majeure events, our operations may be affected significantly, which may have a negative impact on our financial position, results of operations and cash flows.
A change in tax laws or regulations of any federal or state jurisdiction in which we operate could increase our tax burden and otherwise adversely affect our financial position, results of operations, cash flows and liquidity. 33 We continue to assess the impact of various U.S. federal or state legislative proposals that could result in a material increase to our U.S. federal or state taxes.
A change in tax laws or regulations of any federal or state jurisdiction in which we operate could increase our tax burden and otherwise adversely affect our financial position, results of operations, cash flows and liquidity.
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.
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.
If software or infrastructure vendors decide to discontinue further development, integration or long-term maintenance support for our information systems, or there is any system interruption, delay, breach of security, loss of data or loss of a vendor, we may need to migrate some or all of our accounting, project management and financial information to other systems.
If software or infrastructure vendors decide to discontinue further development, integration or long-term maintenance support for our information systems, or there is any system interruption, delay, breach of security, loss of data or loss of a vendor, we may need to migrate some or all of our accounting, project management and financial information to other systems. 30 These disruptions could increase our operational expenses as well as impact the management of our business operations, which could have a material adverse effect on our financial position, results of operations, cash flows and liquidity.
Management's Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K. Our failure to comply with any of these covenants, or to pay principal, interest or other amounts when due thereunder, would constitute an event of default under the applicable agreements.
Our failure to comply with any of these covenants, or to pay principal, interest or other amounts when due thereunder, would constitute an event of default under the applicable agreements.
We are susceptible to adverse weather conditions, which may harm our business and financial results. Our business may be adversely affected by severe weather in areas where we have significant operations.
We are susceptible to adverse weather conditions and the increasing frequency and severity of extreme weather events, which may harm our business and financial results. Our business may be adversely affected by severe weather conditions, including hurricanes, tornadoes, floods, wildfires, extreme heat, and other extreme weather events, particularly in areas where we have significant operations.
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 in imposition of fines and penalties, the termination of a government contract, or debarment from bidding on government contracts in the future.
Changes in energy prices may increase our costs, and we may not be able to pass along increased energy costs to our customers. Energy prices fluctuate based on events outside of our control. We could be adversely affected by limitations on fuel supplies or increases in energy prices that result in higher transportation and equipment operation costs.
As a result, our margins may be adversely impacted by such cost increases. Changes in energy prices may increase our costs, and we may not be able to pass along increased energy costs to our customers. Energy prices fluctuate based on events outside of our control.
In addition, our customers may elect to repair or replace the warrantied item by using the services of another provider and require us to pay for the cost of the repair or replacement.
In addition, our customers may elect to repair or replace the warrantied item by using the services of another provider and require us to pay for the cost of the repair or replacement. Costs incurred as a result of warranty claims could adversely affect our financial position, results of operations and cash flows.
An uninsured claim, either in part or in whole, as well as any claim covered by insurance but subject to a policy limit, high deductible and/or retention, could have a material adverse effect on our business, financial condition, and results of operations.
An uninsured claim, either in part or in whole, as well as any claim covered by insurance but subject to a policy limit, high deductible and/or retention, could have a material adverse effect on our business, financial condition, and results of operations. 21 Our dependence on subcontractors and suppliers of equipment and materials could increase our costs and impair our ability to complete contracts on a timely basis or at all, which would adversely affect our profits and cash flow.
If a pandemic, epidemic, or outbreak of an infectious disease, including the outbreak of any respiratory illness caused by COVID-19, or other public health crisis were to affect our markets or facilities or those of our suppliers, or customers, our business could be adversely affected.
If a pandemic, epidemic, or outbreak of an infectious disease, or other public health crisis were to affect our markets or facilities or those of our suppliers, or customers, our business could be adversely affected. Consequences of a pandemic, epidemic or other infectious disease may include disruptions in or restrictions on our ability to travel.
In addition, current and future laws and regulations governing data privacy and the unauthorized disclosure of confidential information, including, but not limited to rules implemented by the SEC in 2023, may pose complex compliance challenges and result in additional costs. A failure to comply with such laws and regulations could result in penalties or fines, legal liabilities or reputational harm.
In addition, current and future laws and regulations governing data privacy and the unauthorized disclosure of confidential information, including, but not limited to SEC rules finalized in 2023 requiring enhanced cybersecurity risk disclosures, may pose complex compliance challenges and result in additional costs.
Although we maintain insurance policies with respect to certain of our related exposures, certain of these policies are subject to high deductibles; as such, we are, in effect, self-insured for substantially all of our typical claims. Our estimates of liabilities for unpaid claims and associated expenses and the appropriateness of the estimated liability are reviewed and updated quarterly.
Additionally, difficulties in the insurance markets may adversely affect our ability to obtain necessary insurance. Although we maintain insurance policies with respect to certain of our related exposures, certain of these policies are subject to high deductibles; as such, we are, in effect, self-insured for substantially all of our typical claims.
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. Risks Related to Ownership of Our Common Stock The price of our common stock may be volatile.
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.
System breaches can lead to disclosure, modification and destruction of proprietary business data, personally identifiable information, other sensitive information, production downtime or loss of business, and damage to our reputation, competitiveness and operations.
System breaches can lead to disclosure, modification and destruction of proprietary business data, personally identifiable information, other sensitive information, production downtime or loss of business, and damage to our reputation, competitiveness and operations. Increased interconnectivity with third-party systems and reliance on cloud-based services further expose us to security risks from vulnerabilities in third-party platforms.
Although we may be able to pass through the impact of energy price charges to some of our customers, we may not be able to pass all of these cost increases on to our customers. As a result, our margins may be adversely impacted by such cost increases.
We could be adversely affected by limitations on fuel supplies or increases in energy prices that result in higher transportation and equipment operation costs. Although we may be able to pass through the impact of energy price charges to some of our customers, we may not be able to pass all of these cost increases on to our customers.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThis ensures that the highest levels of management are kept abreast of the cybersecurity posture and potential risks facing the Company. As of the date hereof, the Company has not encountered cybersecurity incidents that the Company believes to have been material to the Company taken as a whole.
Biggest changeThe CIO regularly informs the Company’s Executive Vice President and Chief Financial Officer (“CFO”) and President and Chief Executive Officer (“CEO”) of material aspects related to cybersecurity risks and incidents regarding the Company. This ensures that the highest levels of management are kept abreast of the cybersecurity posture and potential risks facing the Company.
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 employees 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. 34 • 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. • 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 addition to their regularly scheduled meetings, Board members, 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 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 decisions making related to cybersecurity, offering guidance and approval for major initiatives.
Governance The Company’s Board of Directors believes it understands the significance of risks associated with cybersecurity threats to its operational integrity and stakeholder confidence and believes it has established mechanisms to effectively manage such risks based on the current understanding of the threat environment.
The Company’s Board of Directors believes it understands the significance of risks associated with cybersecurity threats to its operational integrity and stakeholder confidence and believes it has established mechanisms to effectively manage such risks based on the current understanding of the threat environment.
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 the primary responsibility 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 primary responsible for oversight of the Company’s cybersecurity risk management.
The Company believes Mr. Ruci’s in-depth knowledge and experience are instrumental in developing and designing, implementing and executing the Company’s cybersecurity strategies. The Company’s CIO oversees the day-to-day implementation of the Company’s cybersecurity risk management programs, tests its compliance with standards, remediates known risks, and leads its employee training program.
The Company believes its CIO’s in-depth knowledge and experience are instrumental in developing and designing, implementing and executing the Company’s cybersecurity strategies. The Company’s CIO oversees the day-to-day implementation of the Company’s cybersecurity risk management programs, tests its compliance with standards, remediates known risks, and leads its employee cybersecurity training program.
These risks include, among other things, internal information technology risks; system security risks; data protection; risks to proprietary business information; intellectual property theft; fraud; extortion; harm to employees, partners, or customers; violation of privacy or security laws and other litigation and legal risk; and reputational risks.
These risks include, among other things, internal information technology risks; system security risks; data protection; risks to proprietary business information; intellectual property theft; fraud; extortion; harm to team members, partners, or customers; violation of privacy or security laws and other litigation and legal risk; and reputational risks.
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 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 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.
This involvement ensures that cybersecurity considerations are integrated into the broader strategic objectives of the Company. The Board of Directors conducts an annual review of the Company’s cybersecurity posture and the effectiveness of its risk management strategies. This review helps in identifying areas for improvement and ensuring the alignment of cybersecurity efforts with the overall risk management framework.
This involvement ensures that cybersecurity considerations are integrated into the broader strategic objectives of the Company. The Board of Directors conducts an annual review of the Company’s cybersecurity posture and the effectiveness of its risk management strategies. This review is helpful for identifying areas for improvement and ensuring the alignment of cybersecurity efforts with the overall risk management framework.
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 data, and maintain the trust and confidence of our customers, business partners and employees.
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.
Christos Ruci, the Company’s CIO, is the member of the Company’s management team primarily responsible for assessing, monitoring and managing the Company cybersecurity program. Mr. Ruci has over 20 years of experience in the field of technology and security including extensive experience as an enterprise CIO, as well as consulting experience advising organizations on their technology and risk profiles.
Governance The Company’s CIO is the member of the Company’s management team primarily responsible for assessing, monitoring and managing the Company cybersecurity program. The Company’s CIO has over 20 years of experience in the field of technology and security including experience as an enterprise CIO, as well as consulting experience advising organizations on their technology and risk profiles.
As discussed below, members of management report the entire Board of Directors about cybersecurity threat risks, among other cybersecurity related matters, at least annually and management also reports to the Audit Committee with respect to cybersecurity risks with financial statement or financial statement reporting implications.
As discussed below, management reports to the entire Board of Directors about cybersecurity threat risks, among other cybersecurity related matters, at least annually and management also reports to the Audit Committee with respect to cybersecurity risks regarding financial statements or financial statements reporting implications. The Audit Committee routinely interacts and reports to the entire Board of Directors on these matters.
In the event of a cybersecurity incident, the CIO is responsible for implementing the Company’s incident response plan to mitigate the cybersecurity incident’s immediate impact, implement long-term strategies for remediation, and prevent future incidents. 35 The CIO regularly informs the Company’s CEO and CFO of material aspects related to cybersecurity risks and incidents.
In the event of a cybersecurity incident, the CIO is responsible for implementing the Company’s incident response plan to mitigate the cybersecurity incident’s immediate impact, implement long-term strategies for remediation, and prevent future incidents.
The Board of Directors and the Audit Committee receive briefings from the Company’s Senior Vice President and CIO, Executive Vice President and Chief Financial Officer (“CFO”) and President and Chief Executive Officer (“CEO”) on a regular basis, with a minimum frequency of once per year.
The Board of Directors and the Audit Committee receive briefings from the Company’s CFO and CEO on a regular basis, with a minimum frequency of once per year.
The Audit Committee routinely interacts and reports out to the entire Board of Directors on these matters. The Board of Directors is composed of members with diverse expertise including, risk management, technology, and finance domain expertise, equipping them to oversee cybersecurity risks effectively.
The Board of Directors is composed of members with diverse expertise, including risk management, technology, and finance domain expertise, equipping them to oversee cybersecurity risks effectively. Further, certain members of the Board of Directors are National Association of Corporate Directors (“NACD”) CERT Certified in cybersecurity oversight.
Added
As of the date hereof, the Company is not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to have been identified or are anticipated to have a material adverse effect on the Company’s business strategy, results of operations, and financial condition.
Added
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.
Added
Risk Factors – “ Information technology system failures, network disruptions or cybersecurity breaches could adversely affect our business .”

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSee Note 14 – Leases in the accompanying notes to the Company’s consolidated financial statements for further information on the Southern California Sublease. 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.
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.
Removed
Item 2. Properties As of December 31, 2023, the Company maintained its principal executive offices and corporate headquarters at 797 Commonwealth Drive, Warrendale, Pennsylvania. The Company has 19 offices throughout the United States. Those business units and offices (summarized below) are spread throughout the eastern portion of the country.
Added
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.
Removed
All of the Company’s business units support both the GCR and ODR operating segments. The Company believes that its current facilities are suitable and adequate to meet its current needs and that suitable additional or substitute space will be available as needed.
Added
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.
Removed
Business Unit Office Location Owned or Leased Approximate Size ACME Industrial Piping, LLC Chattanooga, Tennessee Leased 51,766 square feet Eastern Pennsylvania Warrington, Pennsylvania Leased 27,443 square feet Limbach Facility & Project Solutions LLC Franklin, Tennessee (1) Leased N/A Industrial Air, LLC Greensboro, North Carolina Leased 71,672 square feet Jake Marshall LLC Chattanooga, Tennessee Leased 159,429 square feet Michigan Pontiac, Michigan (2) Leased 74,000 square feet Michigan Lansing, Michigan Leased 18,692 square feet Michigan Detroit, Michigan Leased 2,155 square feet Mid-Atlantic Laurel, Maryland Leased 50,133 square feet New England Wilmington, Massachusetts Leased 30,995 square feet New Jersey East Brunswick, New Jersey Leased 4,200 square feet Ohio Columbus, Ohio (4 locations) Leased 130,144 square feet Ohio Athens, Ohio Leased 3,000 square feet Orlando / Limbach Collaborative Services / Corporate Lake Mary, Florida Leased 60,794 square feet Orlando Orlando, Florida Leased 4,240 square feet Southeastern Florida Boynton Beach, Florida Leased 9,631 square feet Tampa / Corporate Tampa, Florida Leased 13,739 square feet Western Pennsylvania / Corporate Warrendale, Pennsylvania Leased 19,718 square feet Western Pennsylvania Greensburg, Pennsylvania Leased 5,000 square feet Other Properties: Southern California Seal Beach, California (3) Leased 88,507 square feet Corporate Bronxville, New York Leased 250 square feet (1) The Company holds a shared space working arrangement in which it pays a monthly fee to utilize certain co-working space and common office amenities.
Added
To maximize available capital, the Company generally intends to keep leasing its properties, however, the Company may also consider purchasing a property where it believes ownership would be more economical.
Removed
(2) On September 29, 2022, Limbach Company LLC and Royal Oak Acquisitions consummated the purchase of this real property under a sale and leaseback transaction. In connection with the sale and leaseback transaction, LC LLC and Featherstone St Pontiac MI LLC entered into a lease agreement for the Pontiac facility.
Added
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.
Removed
See Note 7 – Debt in the accompanying notes to the Company’s consolidated financial statements for further information on the Sale-Leaseback Financing Transaction. (3) In June 2021, the Company entered into a sublease agreement with a third party for the entire ground floor of its leased space in Southern California, consisting of 71,787 square feet.
Removed
During the first quarter of 2022, the Company entered into an amendment to the aforementioned sublease agreement, which, among other things, expanded the sublease premises to include the entire second floor of its leased space in Southern California, consisting of 16,720 square feet.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

9 edited+0 added−2 removed5 unchanged
Biggest changeSharp 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.
Biggest changePrior 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.
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
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
Brooks serves as the Executive Vice President and Chief Financial Officer of the Company, since October 2019. Mrs.
Brooks has served as the Executive Vice President and Chief Financial Officer of the Company since October 2019. Mrs.
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. Before joining Harper Limbach, Mr.
Angerosa 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.
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 President of Harper Limbach since July 2020, which includes the following entities: Harper Limbach LLC and Harper Limbach Construction LLC.
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.
Item 4. Mine Safety Disclosures 36 Not applicable. Information About Our Executive Officers Name Age Title Michael M. McCann (1) 42 President, Chief Executive Officer and Director Jayme L. Brooks 53 Executive Vice President and Chief Financial Officer Jay A. Sharp (2) 58 President of Limbach Nicholas S.
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.
Sharp has served as 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.
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 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 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.
Angerosa continued as President of Harper Limbach LLC (“Harper Limbach”), a Florida-based subsidiary, and was elevated to join the senior management team. Michael M. McCann has served as the President and Chief Executive Officer and a Director of the Company since March 2023. Prior to his appointment as President and Chief Executive Officer and a Director of the Company, Mr.
McCann has served as the President and Chief Executive Officer and a Director of the Company since March 2023. Prior to his appointment as President and Chief Executive Officer and a Director of the Company, Mr.
Removed
Angerosa (2) 47 President of Harper Limbach (1) On January 17, 2023, the Company announced its planned transition succession, pursuant to which Charles A. Bacon, III stepped down as President and Chief Executive Officer on March 28, 2023, and Michael M. McCann, the Company’s former Executive Vice President and Chief Operating Officer, was appointed President and Chief Executive Officer.
Removed
(2) In conjunction with the aforementioned planned transition succession, Jay A. Sharp was promoted to the position of President of the following entities: Limbach Company LLC, Limbach Company LP, Jake Marshall LLC and Limbach Facility & Project Solutions LLC. In addition, Nick S.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+3 added−2 removed0 unchanged
Biggest changeSecurities 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” in the Proxy Statement. Item 6. [Reserved]
Biggest changeUnregistered 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).
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 37 Market Information The Company’s common stock is traded on The Nasdaq Capital Market under the symbol “LMB”. Holders At March 12, 2024, there were 32 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 March 6, 2025, there were 30 holders of record of the Company’s common stock.
Removed
Shares Issued from the Exercise of Warrants During the year ended December 31, 2023, 600,000 $15 Exercise Price Sponsor Warrants and 606,476 Merger Warrants were exercised on a cashless basis by the holders of the warrants, which resulted in the warrants being converted into, and the Company issuing, 167,564 and 274,742 shares of the Company's common stock, respectively.
Added
Dividends 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.
Removed
The Company received no proceeds from the cashless exercise of the $15 Exercise Price Sponsor Warrants or the Merger Warrants. The remaining 23,167 unexercised Merger Warrants expired by their terms on July 20, 2023. See Note 8 – Equity in the accompanying notes to the Company’s consolidated financial statements for further information.
Added
Performance Graph The following Performance Graph and related information shall be deemed “furnished” and not “filed” for purposes of Section 18 of the Exchange Act, and such information shall not be incorporated by reference into any future filing under the Securities Act or the Exchange Act except to the extent that we specifically incorporate it by reference into such filing.
Added
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.

Item 7. Management's Discussion & Analysis

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

117 edited+56 added−21 removed76 unchanged
Biggest changeDebt and Related Obligations Long-term debt consists of the following obligations as of: 49 ( in thousand s) December 31, 2023 December 31, 2022 A&R Wintrust Term Loan $ — $ 21,453 Wintrust Revolving Loans 10,000 — Finance leases – collateralized by vehicles, payable in monthly installments of principal, plus interest ranging from 3.96% to 8.60% through 2030 7,347 4,954 Financing liability 5,351 5,351 Total debt $ 22,698 $ 31,758 Less – Current portion of long-term debt (2,680) (9,564) Less – Unamortized discount and debt issuance costs (387) (666) Long-term debt $ 19,631 $ 21,528 See Note 7 – Debt in the accompanying notes to the Company’s consolidated financial statements for further discussion.
Biggest changeThe 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.
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 the 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 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.
The amounts discussed reflect the acquired companies’ operating results in the current reported period only for the time period these entities were not owned by the Company in the comparable prior reported period. During 2023, the Company acquired two companies for total consideration of $15.3 million, net of cash acquired and inclusive of certain measurement period adjustments.
The amounts discussed reflect the acquired companies’ operating results in the current reported period only for the time period these entities were not owned by the Company in the comparable prior reported period. During 2023, the Company acquired two companies for total cash consideration of $15.3 million, net of cash acquired and inclusive of certain measurement period adjustments.
See Note 14 – Leases in the accompanying notes to the Company’s consolidated financial statements for further information on the Southern California Sublease. Operating Segments The Company manages and measures the performance of its business in two operating segments: GCR and ODR.
See Note 14 – Leases in the accompanying notes to the Company’s consolidated financial statements for further information on the Southern California Sublease. Operating Segments The Company manages and measures the performance of its business in two operating segments: ODR and GCR.
GCR and ODR Backlog Information 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.
ODR and GCR Backlog Information 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.
In addition, the Company paid approximately $0.8 million in taxes related to net share settlement of equity awards, $2.7 million for payments on finance leases and made a $3.0 million payment to the former owners of JMLLC and CSLLC related to the 2022 Jake Marshall Earnout Period, of which $1.7 million was recognized as a cash outflow from financing activities.
In addition, the Company paid approximately $0.8 million in taxes related to net share settlement of equity awards, $2.7 million for payments on finance leases and made a $3.0 million payment to the former owners of JMLLC and CSLLC related to the 2022 Jake Marshall Earnout Period, of which $1.8 million was recognized as a cash outflow from financing activities.
Losses incurred over primary policy limits are covered by umbrella and excess policies up to specified limits with multiple excess insurers. The Company accrues for the unfunded portion of costs for both reported claims and claims incurred but not reported.
Losses incurred over primary policy limits are covered by umbrella and excess policies up to specified limits with multiple excess insurers. The Company accrues for the unfunded portion of costs for both reported claims and incurred but not reported claims.
The Company accrues for the unfunded portion of costs for both reported claims and claims incurred but not reported. The liability for unfunded reported claims and future claims is reflected on the consolidated balance sheets as a current liability in accrued expenses and other current liabilities.
The Company accrues for the unfunded portion of costs for both reported claims and incurred but not reported claims. The liability for unfunded reported claims and future claims is reflected on the consolidated balance sheets as a current liability in accrued expenses and other current liabilities.
As discussed elsewhere in this Annual Report on Form 10-K, the Company’s business has two operating segments: (i) GCR, for which it accounts for using the cost-to-cost method and (ii) ODR, for which it accounts for using the cost-to-cost method and for certain projects when revenue is recognized as services are provided.
As discussed elsewhere in this Annual Report on Form 10-K, the Company’s business has two operating segments: (i) ODR, for which it accounts for using the cost-to-cost method and for certain projects when revenue is recognized as services are provided and (ii) GCR, for which it accounts for using the cost-to-cost method.
With respect to the Company’s service contracts, there are two basic types of service contracts: fixed price service contracts, which are signed in advance for maintenance, repair and retrofit work over a period, typically of one year, and service contracts not signed in advance for similar maintenance, repair and retrofit work on an as-needed basis.
With respect to the Company’s service contracts, there are two basic types of service contracts: fixed price service contracts, which are signed in advance for maintenance, repair and retrofit work over a period, typically of one year, and service contracts, which are not signed in advance for similar maintenance, repair and retrofit work on an as-needed basis.
Revisions to project costs and conditions can give rise to change orders under which the customer agrees to pay additional contract price. Revisions also can result in claims the Company might make against the customer to recover project variances that have not been satisfactorily addressed through change orders with the customer.
Revisions to project costs and conditions can give rise to change orders under which the customer agrees to pay additional contract price. Revisions can also result in claims the Company might make against the customer to recover project variances that have not been satisfactorily addressed through change orders with the customer.
At any point, 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 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.
The determination of its loss rates require it to make certain judgements and estimates involving, among others, the creditworthiness of its customers, historical loss experiences with customers, the aging of past due balances, the consideration of a customer’s financial condition, ongoing relationships with its customers, its lien rights, if any, in the property where it performed the work, the availability, if any, of payment bonds applicable to the contract, current market economic conditions 52 and a forecast of future economic conditions when appropriate.
The determination of its loss rates require it to make certain judgements and estimates involving, among others, the creditworthiness of its customers, historical loss experiences with customers, the aging of past due balances, the consideration of a customer’s financial condition, ongoing relationships with its customers, its lien rights, if any, in the property where it performed the work, the availability, if any, of payment bonds applicable to the contract, current market economic conditions and a forecast of future economic conditions when appropriate.
These estimates are evaluated and adjusted as needed when additional information is received. 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.
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.
Further, while the Company believes its remaining performance obligations are firm, and its customers have not provided the Company with indications that they no longer wish to proceed with planned projects, prolonged delays in the receipt of critical equipment could result in the Company's customers seeking to terminate existing or pending agreements.
While the Company believes its remaining performance obligations are firm, and its customers have not provided the Company with indications that they no longer wish to proceed with planned projects, prolonged delays in the receipt of critical equipment could result in the Company's customers seeking to terminate existing or pending agreements.
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 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 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.
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 46 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 then bills those costs in the current month for many of its contracts.
The Company generally invoices customers monthly 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 are recorded as a contract asset until billable under the contract terms.
In addition, as a result of the ACME Transaction, the Company recognized, in the aggregate, an additional $2.8 million of intangible assets associated with customer relationships with third-party customers and the acquired trade name, inclusive of the impact of certain measurement period adjustments.
As a result of the ACME Transaction, the Company recognized, in the aggregate, an additional $2.8 million of intangible assets associated with customer relationships with third-party customers and the acquired trade name, inclusive of the impact of certain measurement period adjustments.
The Company has dedicated and continues to dedicate its resources to seek opportunities to acquire and integrate businesses that have attractive market positions, supports the Company ODR growth strategy, expands and/or supplements the Company’s current breadth of service offerings and is culturally compatible.
The Company has dedicated and continues to dedicate its resources to seek opportunities to acquire and integrate businesses that have attractive market positions, supports the Company’s ODR growth strategy, expands and/or supplements the Company’s current breadth of offerings and is culturally compatible.
Lastly, as a result of the Industrial Air Transaction, the Company recognized, in the aggregate, an additional $8.7 million of intangible assets associated with customer relationships with third-party customers, the acquired trade name, trademarks and intellectual property and the acquired backlog.
As a result of the Industrial Air Transaction, the Company recognized, in the aggregate, an additional $8.7 million of intangible assets associated with customer relationships with third-party customers, the acquired trade name, trademarks and intellectual property and the acquired backlog.
Cash used in investing activities for the year ended December 31, 2023 of $4.9 million and $10.4 million cash outflows associated with the ACME Transaction and Industrial Air Transaction, respectively, net of cash acquired and inclusive of certain measurement period adjustments.
Cash used in investing activities for the year ended December 31, 2023 included cash outflows of $4.9 million and $10.4 million associated with the ACME Transaction and Industrial Air Transaction, respectively, net of cash acquired and inclusive of certain measurement period adjustments.
Due to the varied nature of the Company's services, and the risks associated therewith, contract costs as a percentage of contract revenue have historically fluctuated, and this fluctuation is expected to continue in future periods.
Due to the varied nature of the Company's services, and the risks associated therewith, contract costs as a percentage of contract revenue have historically fluctuated, and this fluctuation is expected to continue in future periods as well.
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 in the ODR segment.
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.
Projects are brought into backlog once the Company has been provided with a written confirmation of award and the contract value has been established.
Projects are brought into backlog once the Company has been provided a written confirmation of award and the contract value has been established.
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 the next twelve months.
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 performs its annual impairment testing as of October 1, and any impairment charges resulting from this process are reported in the fourth quarter. The Company segregates its operations into reporting units based on the degree of operating and financial independence of each unit and its related management of them.
The Company performs its annual impairment testing as of October 1 every year, and any impairment charges resulting from this process are reported in the fourth quarter. The Company segregates its operations into reporting units based on the degree of operating and financial independence of each unit and its related management of them.
The Company believes that its reserves for its expected credit losses are appropriate as of December 31, 2023, 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, 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.
In addition to the future operating cash flows of the Company, along with its existing borrowing availability and access to financial markets, the Company currently believes it will be able to meet any working capital and future operating requirements, and capital investment forecast opportunities for the next twelve months.
In addition to the future operating cash flows of the Company, along with its existing borrowing availability and access to financial markets, the Company currently believes it will be able to meet any working capital and future operating requirements, and capital investment forecast opportunities for at least the next twelve months.
This measurement and comparison process requires updates to the estimate of total costs to complete the contract, and these updates may include subjective assessments. 51 The Company generally does not incur significant costs prior to receiving a contract, and therefore, these costs are expensed as incurred. Upon receiving the contract, these costs are included in contract costs.
This measurement and comparison process requires updates to the estimate of total costs to complete the contract, and these updates may include subjective assessments. 55 The Company generally does not incur significant costs prior to receiving a contract, and therefore, these costs are expensed as incurred. Upon receiving the contract, these costs are included in contract costs.
Also included are non-personnel costs, such as travel-related expenses, legal and other professional fees and other corporate expenses to support the growth of the Company's business and to meet the compliance requirements associated with operating as a public company.
Also included in SG&A expenses are non-personnel costs, such as travel-related expenses, legal and other professional fees and other corporate expenses to support the growth of the Company's business and to meet the compliance requirements associated with operating as a public company.
The Company could also be obligated to make payments to MEPPs if it either ceases to have an obligation to contribute to the MEPP or significantly reduces its contributions to the MEPP because it reduces the number of employees who are covered by the relevant MEPP for various reasons, including, but not limited to, layoffs or closure of a subsidiary assuming the MEPP has unfunded vested benefits.
The Company could also be obligated to make payments to MEPPs if it either ceases to have an obligation to contribute to the MEPP or significantly reduces its contributions to the MEPP because it reduces the number of team members who are covered by the relevant MEPP for various reasons, including, but not limited to, layoffs or closure of a subsidiary assuming the MEPP has unfunded vested benefits.
Selling, general, and administrative costs are charged to expense as incurred. Bidding and proposal costs are also recognized as an expense 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 upon management’s current estimate of total costs at completion.
The Company operates in two segments, (i) 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, and (ii) ODR, in which the Company performs owner direct projects and/or provides maintenance or 38 service primarily on mechanical, plumbing or electrical systems, building controls and specialty contracting projects direct to, or assigned by, building owners or property 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 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.
ACME specializes in performing industrial maintenance, capital project work, and emergency services for specialty chemical and manufacturing clients, and is a leading mechanical solutions provider for hydroelectric producers. On November 1, 2023, the Company completed an acquisition of Greensboro, NC-based specialty mechanical contractor, Industrial Air, for a purchase price at closing of $13.5 million in cash.
ACME specializes in performing 42 industrial maintenance, capital project work, and emergency services for specialty chemical and manufacturing customers, and is a leading mechanical solutions provider for hydroelectric producers. On November 1, 2023, the Company completed an acquisition of Greensboro, NC-based specialty mechanical contractor, Industrial Air, for a purchase price at closing of $13.5 million in cash.
As discussed above and in Note 7 – Debt in the accompanying notes to the Company’s consolidated financial statements, as of December 31, 2023, 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, 2024, the Company was in compliance with all financial maintenance covenants as required by its credit facility.
If a participating employer stops contributing to an MEPP, the unfunded obligations of the MEPP may be borne by the remaining participating employers. 50 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. 54 An FIP or RP requires a particular MEPP to adopt measures to correct its underfunding status.
Factors that could impact funded status of an MEPP include, without limitation, investment performance, changes in the participant demographics, decline in the number of contributing employers, changes in actuarial assumptions and the utilization of extended amortization provisions. Assets contributed to the MEPPs by the Company may be used to provide benefits to employees of other participating employers.
Factors that could impact funded status of an MEPP include, without limitation, investment performance, changes in the participant demographics, decline in the number of contributing employers, changes in actuarial assumptions and the utilization of extended amortization provisions. Assets contributed to the MEPPs by the Company may be used to provide benefits to team members of other participating employers.
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, and pharmaceutical and biotech laboratories and manufacturing facilities; • 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 sports arenas, 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; 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.
Additionally, the Company believes that it can further increase its cash flow and operating income by acquiring strategically synergistic companies that will increase the Company’s geographic footprint, supplement the Company’s current business model, address capability gaps and enhance the breadth of its service offerings to better serve its clients.
Additionally, the Company believes that it can further increase its cash flow and operating income by acquiring strategically synergistic companies that will increase the Company’s geographic footprint, supplement the Company’s current business model, address capability gaps and enhance the breadth of its offerings to better serve its customers.
Off-Balance Sheet and Other Arrangements Aside from the $4.1 million and $3.2 million in irrevocable letters of credit outstanding in connection with the Company’s self-insurance program, at December 31, 2023 and 2022, 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. 53
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.
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 historically, and where it can leverage its captive design and engineering services.
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 addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from its management’s expectations. Factors that could cause such differences are discussed in “Forward-Looking Statements”, “Risk Factor Summary” and “Risk Factors” in this Annual Report.
In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from its management’s expectations. Factors that could cause such differences are discussed in “Forward-Looking Statements”, “Risk Factor Summary” and “Risk Factors” in this Annual Report on Form 10-K.
When appropriate, the Company includes cost escalation factors into its bids and proposals, as well as limit the acceptance time of its bid. In addition, the Company is often able to mitigate the impact of future price increases by entering into fixed price purchase orders for materials and equipment and subcontracts on its projects.
When appropriate, the Company includes cost escalation factors into its bids and proposals, and limits the acceptance time of its bid. In addition, the Company is often able to mitigate the impact of future price increases by entering into fixed price purchase orders for materials and equipment and subcontracts on its projects.
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 40 MEPPs that provide retirement benefits to certain union employees 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 50 MEPPs that provide retirement benefits to certain union team members in accordance with various collective bargaining agreements (“CBAs”).
The bonds, if any, the Company provides typically reflect the contract value. As of December 31, 2023 and 2022, the Company has approximately $90.9 million and $129.6 million in surety bonds outstanding, respectively. 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, 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 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 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 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.
Change in Fair Value of Contingent Consideration The change in fair values of the Company’s earnout payment contingent consideration was a loss of $0.7 million and $2.3 million for the years ended December 31, 2023 and 2022, respectively.
Change in Fair Value of Contingent Consideration The change in fair values of the Company’s earnout payment contingent consideration was a loss of $3.8 million and $0.7 million for the years ended December 31, 2024 and 2023, respectively.
The transaction also provides for an earnout of up to $6.5 million potentially being paid out over the next two years. Industrial Air serves industrial customers throughout the Southeast United States and along the Eastern seaboard, focusing on delivering engineered air handling systems, including air condition and air filtration, along with controls systems and maintenance work.
The transaction also provided for an earnout of up to $6.5 million potentially being paid out over 2025 and 2026. Industrial Air serves industrial customers throughout the Southeast United States and along the Eastern seaboard, focusing on delivering engineered air handling systems, including air condition and air filtration, along with controls systems and maintenance work.
These increases to the contingent liability were primarily attributable to the probability of meeting the gross profit margins associated with the contingent consideration arrangements as of December 31, 2023 and 2022.
These increases to the contingent liability were primarily attributable to the probability of meeting the gross profit margins associated with the contingent consideration arrangements for the acquisitions as of December 31, 2024 and 2023.
Change in fair value of contingent consideration The change in fair value of contingent consideration relates to the remeasurement of the contingent consideration arrangements resulting from each of the Jake Marshall, LLC (“JMLLC”), Coating Solutions, LLC (“CSLLC”) (together with JMLLC, the Jake Marshall Transaction), the ACME Transaction and the Industrial Air Transaction.
Change in fair value of contingent consideration The change in fair value of contingent consideration relates to the remeasurement of the contingent consideration arrangements resulting from each of the Jake Marshall, LLC (“JMLLC”), Coating Solutions, LLC (“CSLLC”, together with JMLLC, the “Jake Marshall Transaction”), the ACME Transaction, the Industrial Air Transaction, the Kent Island Transaction and the Consolidated Mechanical Transaction.
These cash financing outflows were partially offset by $10.0 million in proceeds from borrowings under the Second A&R Wintrust Revolving Loan and $0.4 million associated with proceeds from contributions to the Company’s Employee Stock Purchase Plan (“ESPP”).
These cash financing outflows were partially offset by $10.0 million in proceeds from borrowings under the Second A&R Wintrust Revolving Loan and $0.4 million associated with proceeds from contributions to the Company’s ESPP.
On July 3, 2023, the Company completed an acquisition of Chattanooga, TN-based specialty industrial contractor, ACME, for a purchase price at closing of $5.0 million in cash. The transaction also provides for an earnout of up to $2.5 million potentially being paid out over the next two years.
On July 3, 2023, the Company completed an acquisition of Chattanooga, TN-based specialty industrial contractor, ACME, for a purchase price at closing of $5.0 million in cash. The transaction also provided for an earnout of up to $2.5 million potentially being paid out over 2024 and 2025.
The Company continued to experience elevated levels of cost inflation during 2023, which is expected to persist through 2024, although at lower levels than experienced in 2023. These headwinds have been partially mitigated in 2023 by pricing actions taken in response to the inflationary cost environment, supply chain productivity improvements and cost savings initiatives.
The Company experienced elevated levels of cost inflation during 2023, which has continued into 2024, although at lower levels than those experienced in 2023. These headwinds have been partially mitigated in 2023 and 2024 by pricing actions taken in response to the inflationary cost environment, supply chain productivity improvements and cost savings initiatives.
Each of the Jake Marshall, ACME and Industrial Air-related 39 intangible assets were recorded under the acquisition method of accounting at their estimated fair values at the acquisition date.
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.
The carrying values of the Jake Marshall, ACME and IA 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 condensed consolidated statements of operations.
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.
Any of these events could have a material adverse effect on the Company’s business, financial condition and/or results of operations. Outlook for 2024 The Company continues to focus on creating value for building owners by targeting opportunities for long-term relationships with the vision of becoming an indispensable partner to building owners with mission-critical systems.
Any of these events could have a material adverse effect on the Company’s business, financial condition and/or results of operations. Outlook for 2025 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.
The Company believes it maintains a disciplined approach, capable of providing a full life-cycle of engineered solutions and craft expertise enabling it to be a one-stop-shop for building owners to maximize their investments in their mission-critical assets.
The Company believes it maintains a disciplined approach, capable of providing a full life-cycle of engineered solutions and craft expertise enabling it to be a one-stop-shop for building owners.
As a part of the total consideration for the Jake Marshall, ACME and Industrial Air transactions, the Company initially recognized $3.1 million, $1.5 million and $3.2 million, respectively, in contingent consideration associated with their respective earnout payments.
As part of the total consideration for the Jake Marshall, ACME, Industrial Air, Kent Island and Consolidated Mechanical transactions, the Company initially recognized $3.1 million, $1.5 million, $3.2 million, $4.4 million and $0.8 million, respectively, in contingent consideration associated with their respective earnout payments.
Selling, General and Administrative Selling, general and administrative (“SG&A”) expenses consist primarily of personnel costs for its administrative, estimating, human resources, safety, information technology, legal, finance and accounting employees and executives.
Selling, General and Administrative Selling, general and administrative (“SG&A”) expenses consist primarily of personnel costs for the Company’s administrative, estimating, human resources, safety, information technology, legal, finance and accounting team members and executives.
Cash Flows Used in Financing Activities Cash flows used in financing activities were $16.5 million for the year ended December 31, 2023 as compared to cash flows provided by financing activities of $13.4 million for the year ended December 31, 2022.
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.
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.
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.
In focusing on improved profitability and generating quality growth in its operation, the Company has dedicated and continues to dedicate, its resources toward the growth of its ODR segment as the scope of services provided within the Company’s ODR segment typically yield higher margins when compared to its GCR segment work.
To accomplish these objectives, the Company currently is executing the following initiatives: In focusing on improved profitability and generating quality growth in its operation, 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 work.
In accordance with ASC Topic 280 – Segment Reporting , the Company has elected to aggregate all GCR work performed at branches into one GCR reportable segment and all ODR work performed at branches into one ODR reportable segment. All transactions between segments are eliminated in consolidation.
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.
Cash Flows Used in Investing Activities Cash flows used in investing activities were $17.1 million for the year ended December 31, 2023 as compared to $0.5 million for the year ended December 31, 2022.
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.
During the year ended December 31, 2023, the Company recorded material gross profit write-ups on two GCR projects for a total of $2.2 million and two material GCR project gross profit write-downs for a total of $1.3 million that had a net gross profit impact of $0.5 million or more.
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.
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.
The Company has approximately 1,400 team members in 20 offices across the eastern United States. 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.
The decrease in total other expenses primarily was driven by a $1.2 million increase in interest income related to the Company's overnight repurchase agreements, investments in U.S. Treasury Bills and money market funds, as well as a $0.1 million offset to interest expense as a result of the Company's interest rate swap agreement.
The increase in total other income (expenses) primarily was driven by a $1.0 million increase in interest income related to the Company's overnight repurchase agreements, investments in U.S. Treasury Bills and money market funds.
Selling, General and Administrative 42 For the Years Ended December 31, 2023 2022 Increase/(Decrease) (in thousands except for percentages) Selling, general and administrative $ 87,397 $ 77,879 $ 9,518 12.2 % Total selling, general and administrative expenses as a percentage of consolidated total revenue 16.9 % 15.7 % The Company's SG&A expense for the year ended December 31, 2023 increased by approximately $9.5 million, or 12.2% compared to the year ended December 31, 2022.
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.
In addition, the Company continues to make investments to expand its ODR revenue by increasing the value it can offer to building owners and continues to evaluate areas in which it could expand the breadth of its service offerings to better serve its clients. Employee development underpins the Company’s efforts to execute its 2024 strategy.
The Company continues to make investments to expand its ODR revenue by increasing the value it can offer to building owners and continues to evaluate areas in which it could expand the breadth of its service offerings to better serve its customers.
During the year ended December 31, 2022, the Company recorded material gross profit write-ups of $3.0 million on three GCR projects and four material GCR project gross profit write-downs for a total of $2.8 million that had a net gross profit impact of $0.5 million or more.
During the year ended December 31, 2024, the Company recorded material gross profit write-ups on four ODR segment projects for a total of $3.9 million that had a net gross profit impact of $0.5 million or more.
The following table represents the Company’s summarized working capital information: As of December 31, (in thousands, except ratios) 2023 2022 Current assets $ 217,000 $ 225,990 Current liabilities (145,148) (159,085) Net working capital $ 71,852 $ 66,905 Current ratio (1) 1.50 1.42 (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) 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.
During fiscal years 2023 and 2022, the Company experienced higher cost of materials on specific projects and delays in its supply chain for equipment and service vehicles from the manufacturers, and it expects these higher costs and delays in its supply chain to persist in 2024.
However, these effects are, at times, material to the Company’s results of operations and financial condition. During fiscal years 2023 and 2022, the Company experienced higher cost of materials on specific projects and delays in its supply chain for equipment and service vehicles from the manufacturers, and these higher costs and delays in its supply chain persisted in 2024.
During the year ended December 31, 2022, the Company generated $35.4 million in cash in its operating activities, which consisted of cash provided by working capital of $10.9 million, non-cash adjustments of $17.6 million (primarily depreciation and amortization, stock-based compensation expense, operating lease expense, loss on early termination of an operating lease and the change in fair value of contingent consideration) and net income for the period of $6.8 million.
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.
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 GCR backlog was $186.9 million and $302.9 million as of December 31, 2023 and 2022, 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.
Amortization of Intangibles For the Years Ended December 31, 2023 2022 Increase/(Decrease) (in thousands except for percentages) Amortization of intangibles $ 1,880 $ 1,567 $ 313 20.0 % Total amortization expense for the year ended December 31, 2023 increased by approximately $0.3 million compared to the year ended December 31, 2022.
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.
The total gross profit percentage increased from 18.9% for the year ended December 31, 2022 to 23.1% for the year ended December 31, 2023, mainly driven by the mix of higher margin ODR segment work and being more selective in GCR work.
The total gross profit percentage increased from 23.1% for the year ended December 31, 2023 to 27.8% for the year ended December 31, 2024, mainly driven by the mix of higher margin ODR segment work, the Company becoming more selective when pursuing GCR work, and net material gross profit write-ups.
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. 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 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 ACME Transaction and the Industrial Air Transaction. In addition, see Note 5 – Goodwill and Intangible Assets for further information on the Company’s intangible assets.
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.
The Company regularly performs detailed evaluations of the different market verticals in which it serves to proactively detect trends and to adapt its strategies accordingly, including potential triggers and actions to be taken under recessionary scenarios. In addition, the Company believes its backlog is indicative of future revenue and thus are a key measure of anticipated performance.
The Company monitors key competitors and customers in order to gauge relative performance and the outlook for the future. The Company regularly performs detailed evaluations of different market verticals in which it serves to proactively detect trends and to adapt its strategies accordingly, including potential triggers and actions to be taken under recessionary scenarios.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk The Company is a smaller reporting company as defined in Rule 12b-2 of the Exchange Act; therefore, pursuant to Item 301(c) of Regulation S-K, it is not required to provide the information required by this Item. 54
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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.
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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.
Added
The interest rate swap has a $10.0 million notional value with a fixed interest rate and will mature in July 2027. The Company has not designated this instrument as a hedge for accounting purposes.
Added
As a result, the change in fair value of the derivative instrument is recognized directly in earnings on the Company's consolidated statements of operations as a gain or loss on interest rate swap.
Added
Assuming outstanding balances were to remain the same and including the impact of the Company’s interest rate swap agreement, an increase or decrease in interest rates would not have a material impact on the Company’s consolidated statements of operations.
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See Note 7 – Debt in the accompanying notes to the Company’s consolidated financial statements for further detail of the Company’s revolving credit facility and interest rate swap arrangement. In addition, the Company considers all highly liquid investments purchased with a maturity of 90 days or less on the date of purchase to be cash equivalents.
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Cash 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.
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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

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