Limbach Holdings Inc

DEF 14A 1 a2024proxystatementdef14a.htm DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Name of Registrant as Specified In Its Charter)

April 23, 2024

To My Fellow Stockholders:

I am pleased to share with you our progress and accomplishments for 2023, my first year as Limbach Holdings, Inc.’s (the “Company,” “we” or “us”) President and Chief Executive Officer. Our journey to transform the Company into a value-added solutions provider has been both challenging and rewarding, and I am proud to say that our efforts are paying off.

Growing into Higher Returns

A few years ago, we identified an opportunity to leverage our construction and engineering services experience, relationships and knowledge to build a pure play building systems solutions firm. Our objective was twofold: first, to transform the Company into a trusted partner to building owners by providing value-added solutions to earn higher margins and deliver greater returns to our stockholders; second, to position the Company in less competitive and volatile markets for a stronger, more resilient company.

Through disciplined execution of this strategy, today we are partnering with building owners who provide critical services for their customers and must maintain uninterrupted operations in their facilities. We provide these building owners with solutions and services to maintain and upgrade their mission-critical mechanical, electrical and plumbing infrastructure. We are focused on six key vertical markets – healthcare, industrial and manufacturing, data centers, life sciences, higher education and cultural and entertainment. These are large and growing markets with sustainable demand drivers.

We operate in two business segments, Owner Direct Relationships (“ODR”) and General Contractor Relationships (“GCR”). In our ODR segment we work directly with building owners developing and proposing systems solutions, that work accounted for 50.7% of our revenue in 2023. Our GCR segment in 2023 accounted for 49.3% of our 2023 revenue.

Owner Direct Growth

We are focused on continuing to grow our ODR segment because we have direct access to key decision-makers. This allows us to develop collaborative relationships, and we can convert initial small opportunities into large long-term engagements as customers learn about our compelling value proposition. As we become embedded in our customers’ businesses, we are often on-site collaborating with their teams to develop customized solutions that reduce costs and drive energy efficiencies. This positions us to manage near-term maintenance needs while developing comprehensive risk mitigation and cost savings strategies for the future. As we add value, our goal is to become an indispensable partner to our customers, helping them avoid business disruption due to systems failure.

Our ODR segment generates reoccurring revenue at higher margins than our GCR segment. As we grow our ODR business, we can be more selective in taking on GCR opportunities. As a result, we expect GCR revenue to continue to decline. When the shift to ODR is complete, we expect overall revenue to grow as we expand the ODR business.

A recent example of our successful ODR model is our work with a Florida-based healthcare facilities’ owner. Our relationship with this customer started out as a small engagement, and they are now one of our top five customers in that location. We have a fully embedded team on-site collaborating closely with this customer on all aspects of planning their operating and capital budgets, helping them make critical decisions that will have a tangible impact on their operational success.

Our goal is to provide our customers with unbiased analysis on the integrity of their mechanical, electrical and plumbing systems and make recommendations on opportunities to leverage our engineering solutions to make improvements. They know they can count on the Company to develop optimal, cost-effective solutions that ensure uninterrupted service, lower their environmental footprint and increase cost savings. This is how we add value and is a key strategy for us to grow into higher returns.

Evolved Service Offerings

We believe we have significant organic growth opportunities as we continue to expand our ODR business with existing customers. For example, we invested approximately $4 million in portable air chillers and other rental equipment to provide urgent and critical systems solutions for our customers. This strategic investment will allow us to expand our service offerings and grow our market share with existing customers.

Growth Through Acquisition

Strategic acquisitions are another critical component of our long-term growth plan. We take a disciplined and selective approach to acquiring companies that meet our key criteria: companies that have an attractive operating footprint, support our ODR growth strategy, have an attractive business model with a compelling valuation and structure, have an opportunity for service capability expansion, and most importantly, fits in with our culture.

We are establishing a track record of making successful and accretive acquisitions, and in 2023, we acquired two companies – ACME Industrial Piping, LLC (“ACME”) and Industrial Air, LLC (“Industrial Air”). ACME was a tuck-in acquisition that provided new ODR owner direct relationships with on-premises teams at Fortune 500 caliber customers in the manufacturing vertical. Industrial Air expanded our geographic reach in North Carolina, providing additional ODR customer relationships with consumer goods and textile manufacturing facilities.

We believe successful strategic acquisitions combined with organic growth will drive profitability while creating value for our stockholders. In 2023 we delivered significant earnings growth and cash flow while maintaining a strong balance sheet. We also accelerated our mix shift to ODR, exceeding our 50 percent revenue target. We are focused on achieving our 2025 ODR revenue target of more than 70 percent.

Other key accomplishments in 2023 were:

•Expanding total gross margins by 420 basis points to 23.1 percent from 18.9 percent last year;

•Increasing ODR gross margins to 29 percent, exceeding our target range of 25 to 28 percent; and

•Increasing GCR gross margins to 17 percent for the year, also exceeding our target range of 12 to 15 percent as we honed our focus on higher margin quick-hitting projects.

While 2023 was a year of tremendous growth and achievement, we believe we are in the early innings of capitalizing on our long-term opportunity. We are poised for continued progress as we execute against all three pillars of our strategy:

•Continue to shift our mix to higher margin ODR revenue through organic growth;

•Expand our margins with evolved offerings; and

•Scale through strategic acquisitions and increase our building owner market share.

In addition, we will continue our commitment to best in class governance as we focus on the long-term sustainability of our 123-year-old Company. We are committed to building sustained enterprise value to benefit all stakeholders – stockholders, customers, employees and vendors. We could not do what we do without each of you. Thank you all for your support and contributions to the Company’s success.

Sincerely,

/s/ Michael M. McCann

Michael M. McCann

President, Chief Executive Officer and Director

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held on June 13, 2024

The 2024 Annual Meeting of Stockholders of the Company will be held on Thursday, June 13, 2024, at 2:30 p.m. Eastern Daylight Time (“EDT”) solely by remote communication in a virtual-only format (the “Annual Meeting”).

You are entitled to participate in the Annual Meeting if you were a stockholder of the Company as of the close of business on April 17, 2024, the record date for the Annual Meeting. The Notice of Annual Meeting, the Proxy Statement, the accompanying proxy card and our 2023 Annual Report are available on the Company’s website atwww.limbachinc.com under “Investors – Financials”. The Annual Meeting is being held for the following purposes:

1. To elect Michael M. McCann, Michael F. McNally and David R. Gaboury as Class B members of our Board of Directors, each to serve for a three-year term;

2. To hold a non-binding advisory vote on the compensation of our named executive officers;

3. To ratify the appointment of Crowe LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024; and

4. To transact any other business that properly comes before the Annual Meeting and any adjournment or postponement thereof.

Stockholders will not be able to attend the Annual Meeting in person. Instead, stockholders should follow the instructions provided below to attend the virtual Annual Meeting. Stockholders interested in attending this virtual Annual Meeting are required to register by 11:59 p.m. EDT on June 11, 2024 at https://viewproxy.com/limbach/2024/. The Company urges stockholders to vote and submit proxies in advance of the Annual Meeting by one of the methods described in these proxy materials for the Annual Meeting. Stockholders who attend the virtual Annual Meeting by following the instructions in these proxy materials will have an opportunity to vote and to submit questions electronically during the meeting.

Only stockholders of record as of the close of business on April 17, 2024 are entitled to receive notice of and to vote at the Annual Meeting and any and all adjournments or postponements thereof. Stockholders who hold shares in street name may vote through their brokers, banks or other nominees.

Regardless of the number of shares you own and whether you plan to attend the virtual Annual Meeting, please vote. All stockholders of record can vote (i) over the Internet by accessing the Internet website specified on the enclosed proxy card or voting instruction form and following the instructions provided to you, (ii) by calling the toll-free telephone number specified on the enclosed proxy card or voting instruction form and following the instructions when prompted, (iii) by written proxy by signing and dating the enclosed proxy card or voting instruction form and returning it, or (iv) by attending the Annual Meeting in accordance with the instructions provided in the proxy statement.

We encourage you to receive all proxy materials in the future electronically to help us save printing costs and postage fees, as well as natural resources in producing and distributing these materials. If you wish to receive these materials electronically in the future, please follow the instructions on the proxy card or voting instruction form.

By Order of the Board of Directors,

/s/ Michael M. McCann

Michael M. McCann

President, Chief Executive Officer and Director

April 23, 2024

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 13, 2024

our website at www.limbachinc.com under “Investors — Financials”

TABLE OF CONTENTS

PROXY STATEMENT

FOR THE 2024 ANNUAL MEETING OF STOCKHOLDERS

To Be Held on June 13, 2024

This Proxy Statement is being furnished to our stockholders of record as of the close of business on April 17, 2024 in connection with the solicitation by our Board of Directors of proxies for the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) to be held solely by remote communication in a virtual-only format on Thursday, June 13, 2024, at 2:30 p.m. EDT, or at any and all adjournments or postponements thereof, for the purposes stated in the Notice of Annual Meeting of Stockholders. The approximate date of mailing of this Proxy Statement and the enclosed form of proxy is April 23, 2024.

Unless we state otherwise or the context otherwise requires, references in this proxy statement to “we,” “our,” “us,” or the “Company” are to Limbach Holdings, Inc. a Delaware corporation.