Limbach Holdings, Inc.
For the period ended Jun 30, 2026. Filed Aug 4, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 4, 2026
LMB$53.45-1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-05.
0001628280-26-030678
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-04.
0001628280-26-052622
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 138 previous paragraphs and 155 current paragraphs.
86 unchanged; 31 reworded; 23 added; 21 removed; 0 previous and 15 current paragraphs rearranged.
Tables are not compared: 11 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
•Total revenue increased by $31.2 million, or 21.9%, primarily due to the acquisition of Pioneer Power, which contributed $30.9 million of revenue from acquired operations during the three months ended June 30, 2026. Acquisition-related revenue represents revenue generated by an acquired business during the twelve-month period following its acquisition date. Thereafter, the results of an acquired business are included within the Company’s organic operations, and period-over-period changes are discussed on a combined basis.
Current report
Revenue generated from the Company’s organic operations increased slightly by $0.3 million, or 0.2%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The Company expects the timing of project commencements and execution within its existing backlog, together with currently expected future bookings, to support organic revenue growth during the remainder of 2026.
Current report
•GCR revenue increased by $11.8 million, or 35.3%, primarily due to an incremental increase in GCR acquisition-related revenue of approximately $7.8 million from the Pioneer Power acquisition, as well as an increase in GCR organic revenue of $4.0 million.
Current report
•Gross profit margin was also negatively impacted by lower net project write-ups compared to the prior year period and competition for skilled labor and materials associated with construction activity in data center markets. The Company expects gross profit margins to improve during the remainder of 2026; however, margins are expected to remain below the levels achieved during the comparable periods of 2025.
Current report
•SG&A expense increased $1.5 million, or 5.6%, primarily due to $0.7 million of SG&A expenses associated with the Pioneer Power acquisition. Acquisition-related SG&A represents SG&A expenses incurred by an acquired business during the twelve-month period following its respective acquisition date. After such period, the results of acquired businesses are included within the Company’s organic operations, and period-over-period changes are discussed on a combined basis. The increase in organic SG&A expense was approximately $0.8 million, primarily due to a $0.6 million increase in total stock-based compensation and payroll related expenses. As a percentage of revenue, SG&A expense decreased to 16.2% from 18.7% in the prior-year period.
Current report
•Interest expense increased $0.2 million primarily due to higher average borrowings under the Company’s revolving credit facility and increased financing costs associated with a larger vehicle fleet compared to the prior-year period.
Current report
•Interest income decreased $0.3 million primarily due to lower average cash and cash equivalent balances and reduced yields on invested balances compared to the prior-year period.
Current report
•Gain on disposition of property and equipment decreased $0.3 million primarily due to various gains recognized in both periods, none of which were individually material.
Current report
Revenue
Current report
•Total revenue increased by $37.0 million, or 13.4%, primarily due to the acquisition of Pioneer Power, which contributed $54.5 million of revenue from acquired operations during the six months ended June 30, 2026.
Current report
Acquisition-related revenue represents revenue generated by an acquired business during the twelve-month period following its acquisition date. Thereafter, the results of an acquired business are included within the Company’s organic operations, and period-over-period changes are discussed on a combined basis.
Current report
This increase was partially offset by a $17.5 million decline in revenue from the Company’s organic operations for the six months ended June 30, 2026. The Company expects the timing of project commencements and execution within its existing backlog, together with currently expected future bookings, to support organic revenue growth during the remainder of 2026.
Current report
Gross Profit
Current report
•Gross profit margin was also negatively impacted by lower net project write-ups compared to the prior year period and competition for skilled labor and materials associated with construction activity in data center markets. The Company expects gross profit margins to improve during the remainder of 2026; however, margins are expected to remain below the levels achieved during the comparable periods of 2025.
Current report
In addition, the Company recognized a $0.2 million increase in the fair value of contingent consideration during the six months ended June 30, 2026, compared to a $1.2 million increase during the six months ended June 30, 2025. Changes in the fair value of contingent consideration represent non-cash expenses and were primarily attributable to updates in the estimated probability of achieving the gross profit targets underlying the related earnout arrangements.
Current report
•Interest expense increased $0.4 million in the period-to-period comparison primarily due to higher average borrowings under the Company’s revolving credit facility and increased financing costs associated with a larger vehicle fleet compared to the prior-year period.
Current report
•Interest income decreased $0.7 million primarily due to lower average cash and cash equivalent balances and reduced yields on invested balances compared to the prior-year period.
Current report
•Gain on disposition of property and equipment decreased $0.4 million primarily due to various gains recognized in both periods, none of which were individually material.
Current report
Income Taxes
Current report
The Company recorded an income tax benefit of $1.8 million for the six months ended June 30, 2026 compared to an income tax provision of $0.8 million for the six months ended June 30, 2025. The effective tax rate was (24.9)% and 4.2% for the six months ended June 30, 2026 and 2025, respectively. The Company’s effective tax rate differed from the U.S. federal statutory tax rate in each period primarily due to state income taxes, federal tax credits, other permanent adjustments and discrete excess tax benefits related to RSU vestings recognized during the first quarter of each year. See Note 10 – Income Taxes in the accompanying notes to the Company’s condensed consolidated financial statements for additional information.
Current report
The Company is focused on creating value for building owners by developing long-term relationships and becoming an indispensable partner to building owners with mission-critical systems. The strategic initiatives undertaken over the past several years have strengthened the Company’s operating platform and positioned it to shift its focus from business transformation and revenue mix improvement to disciplined growth.
Current report
Building on this foundation, the Company intends to expand its business while generating strong cash flow, enhancing the durability of its earnings and delivering attractive returns over time. The Company’s strategy is centered on building enterprise scale through vertical market diversification, expanding its geographic reach and leveraging an integrated operating model designed to strengthen its competitive advantages as the business grows. For information on the Company’s prior strategic initiatives, see Part I, Item 1, “Business,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Current report
(2)On July 24, 2026, LFS, LHLLC, and other designated parties entered into the Third Amendment with Wintrust, as administrative agent, and the other lenders party thereto. The Third Amendment provides for, among other things, an upsize of the aggregate principal amount of the senior secured revolving credit facility from $100.0 million to $125.0 million. See Note 15 – Subsequent Events in the accompanying notes to the Company’s condensed consolidated financial statements for further information.
Removed paragraphs (21)
Previous report
Amortization of Intangibles
Previous report
Other (Expenses) Income
Previous report
Revenue for the three months ended March 31, 2026 increased by $5.8 million, or 4.3%, to $138.9 million, compared to $133.1 million for the three months ended March 31, 2025. The increase in revenue was primarily attributable to the acquisition of Pioneer Power, which contributed $23.5 million of acquisition-related revenue for the three months ended March 31, 2026. Acquisition-related revenue represents incremental revenue generated in 2026 by an acquired business only for the twelve-month period subsequent to its respective acquisition date. After such period, the results of acquired businesses are included within the Company’s organic operations, and period-over-period changes are discussed on a combined basis. This increase was offset by a revenue decline in the Company’s organic operations of $17.8 million for the three months ended March 31, 2026. The decline in organic revenue reflects the impact of lower bookings in the middle of 2025 and normal seasonal patterns among industrial customers. More recent booking activity has strengthened significantly, which the Company expects will drive revenue growth as the year progresses.
Previous report
The Company's gross profit for the three months ended March 31, 2026 decreased by $5.5 million, or 15.1%, to $31.2 million, compared to $36.7 million for the three months ended March 31, 2025. The decrease was primarily driven by lower gross margin percentages in both our ODR and GCR segments.
Previous report
GCR gross profit decreased $2.4 million, or 22.5%, reflecting lower revenue and a decline in segment gross margin to 21.0% compared to 24.7% in the prior year period. The decrease in gross margin was primarily due to lower margin work associated with Pioneer Power and the absence of higher total net project write ups that benefited the prior-year period.
Previous report
As a result, total gross profit margin decreased to 22.4% for the three months ended March 31, 2026 from 27.6% for the same period in 2025.
Previous report
Amortization of Intangibles
Previous report
Other (Expenses) Income
Previous report
Total other expenses for the three months ended March 31, 2026 increased approximately $0.5 million as compared to total other income for the three months ended March 31, 2025. The change period-over-period was primarily driven by a $0.4 million decrease in interest income due to reduced cash and cash equivalent balances period-over-period and lower yields on invested balances, as well as a $0.2 million increase in interest expense related to greater borrowings under the Company’s revolving credit facility and higher financing costs associated with a larger vehicle fleet period-over-period.
Previous report
In addition, the U.S. federal government experienced a lapse in appropriations that resulted in a partial shutdown from October 1, 2025 through November 12, 2025. The shutdown contributed to delays in the approval and funding of federally sponsored projects, interruptions in the issuance of new contracts, and deferred decision-making by government agencies. The Company experienced impacts to its operations as a result of the shutdown; however, those impacts were not material to its financial position or results of operations. The Company continues to monitor for any potential ongoing effects on project timing, awards, or customer procurement activity.
Previous report
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 employs a three-pillar approach to scale its business: (i) improve profitability and drive quality organic revenue growth; (ii) expand margins through enhanced and expanded customer solutions; and (iii) scale through acquisitions. To accomplish these objectives, the Company currently is executing the following initiatives:
Previous report
Pillar I
Previous report
Organic ODR Growth. In focusing on improved profitability and sustainable, quality growth, the Company has dedicated its resources toward the organic growth of its ODR segment, as the scope of services provided within this segment typically yields higher margins compared to its GCR segment. For fiscal year 2025, the Company further expanded its growth within the ODR segment where it generated 75.1% of its total consolidated revenue, achieving its 2025 ODR segment revenue target of 70% - 80%. Going forward, the Company believes its disciplined, owner-focused operating model, supported by a full life cycle of engineered solutions and craft expertise, positions it as a long-term partner to building owners with mission-critical systems. Although ODR represented 71.9% of total consolidated revenue for the three months ended March 31, 2026, compared to 75.1% for fiscal year 2025, the Company does not view this variation as indicative of a change in its long-term strategy or expected revenue mix and continues to expect ODR to represent approximately 75% to 80% of total revenue for the full year.
Previous report
Improved GCR Segment Margins. In the Company’s GCR segment, the Company has been able to improve the margins by focusing on improving project execution and profitability by pursuing opportunities that are smaller in size and shorter in duration and where it can leverage its captive design and engineering services. The Company believes that it is appropriate to reduce risk and exposure to large, complex, non-owner direct projects where such projects have historically presented risks that can be difficult to mitigate, which does not align with the Company’s risk-adjusted return expectations. Going forward, the Company believes it has reached a level in which the GCR segment stabilizes as a result of its disciplined focus on smaller, shorter-duration projects that are expected to contribute more consistent gross margins.
Previous report
National Customer Solutions. The Company continues to advance its national customer strategy through a dedicated professional services team that provides owner advisory, construction program management and related support services for customers with complex, mission-critical building systems and infrastructure needs. These services include capital planning to assist customers in planning, prioritizing and executing both the design and construction of capital initiatives and infrastructure projects, while enabling coordinated delivery, standardized workflows and consistent execution across the Company’s operating footprint. The National Customer Solutions team is focused on enhancing alignment between local and national teams, allowing the Company to deliver a more integrated and consistent customer experience across geographies. Through this approach, the Company seeks to deepen customer relationships and increase the value delivered to its customers. The Company expects to continue driving revenue and margin expansion through its national healthcare customer relationships, while further expanding dedicated national teams to grow its presence in its data center and industrial and manufacturing market verticals.
Previous report
Sales Enablement. To support organic revenue growth, the Company continues to invest in sales enablement initiatives. These efforts include the continued development of centralized functions, tools and processes intended to support sellers across operating locations, enhance coordination between local and national sales efforts, and improve visibility into customer opportunities and pipeline activity. By equipping sales teams with shared resources, training and standardized workflows, the Company seeks to drive more disciplined opportunity management, support cross-selling of services and solutions, and enable a more seamless customer experience across its geographic footprint. Management believes these sales enablement initiatives strengthen execution, enhance productivity and support scalable, margin-accretive growth over the long term as the business continues to expand.
Previous report
Pillar II
Previous report
Margin Expansion Through Evolved Solutions. The Company continues to focus on expanding its margins by enhancing and expanding its solutions to building owners. This initiative reflects the Company’s commitment to driving sustainable growth, increasing operational efficiency and delivering greater value to its stakeholders. This evolution is intended to align more closely with current market demands, emerging customer preferences and operational efficiencies, which together contribute to margin expansion. The Company aims to differentiate itself from its competitors by being a single-source provider for building owners, capable of providing a full life cycle of engineered solutions and craft expertise. By meeting diverse customer needs under one roof, the Company deepens customer loyalty. The Company believes that building owners value the convenience and reliability of a single point of contact, which fosters long-term partnerships, reoccurring business and may open doors to larger capital projects and being able to capture a greater share of the overall value chain. The Company continues to expand its owner-direct offerings which include integrated facility planning, service and maintenance, equipment replacement and retrofits, rental equipment, MEPC infrastructure upgrades, and energy efficiency and decarbonization analysis and projects. These capabilities enable the Company to leverage its professional services platform to support multi-location regional and national customers. Additionally, the Company continues to evaluate opportunities to broaden and enhance its customer solutions to address evolving customer needs.
Previous report
Pillar III
Previous report
Growth Through Acquisitions. As the Company’s business generates increasing cash flow and earnings, management believes it is well-positioned to pursue targeted acquisitions as a strategic capital investment. The Company continues to build its internal capabilities, processes and leadership capacity necessary to evaluate, execute and integrate acquisitions on a disciplined and repeatable basis, while seeking to leverage existing systems, national and geographic presence and operational investments to their maximum potential over time. The Company remains focused on disciplined capital deployment and cultural alignment to ensure acquisitions contribute to long-term value creation. See Note 3 – Acquisitions in the accompanying notes to the Company’s condensed consolidated financial statements for further information on the Company’s most recent acquisition activity.
Previous report
Cash Flows (Used in) Provided by Operating Activities
Reworded paragraphs (31)
Previous wording
The Company is a building systems solutions firm that designs, delivers, and maintains mechanical (heating, ventilation, and air conditioning), electrical, plumbing, and controls (“MEPC”) systems. The Company partners with building owners and operators of mission-critical facilities across healthcare, industrial and manufacturing, data centers, life sciences, higher education, and cultural and entertainment markets. With approximately 1,600 team members across 21 offices throughout the Eastern and Midwestern regions of the United States, the Company strives to be an indispensable partner by combining its national capabilities with strong local execution and talent to deliver proactive, safe, and reliable solutions for complex facilities. Operating on a connected platform, the Company integrates engineering expertise with field execution to provide customized MEPC infrastructure solutions that address both operational and capital project needs, optimizing performance, enhancing reliability, and ensuring long-term safety.
Current wording
The Company is a building systems solutions firm that designs, delivers, and maintains mechanical (heating, ventilation, and air conditioning), electrical, plumbing, and controls (“MEPC”) systems. The Company partners with building owners and operators of mission-critical facilities across healthcare, industrial and manufacturing, data centers, life sciences, higher education, and cultural and entertainment markets. As of June 30, 2026, the Company had approximately 1,600 team members across 21 offices throughout the Eastern and Midwestern regions of the United States. The Company strives to be an indispensable partner by combining its national capabilities with strong local execution and talent to deliver proactive, safe, and reliable solutions for complex facilities. Operating on a connected platform, the Company integrates engineering expertise with field execution to provide customized MEPC infrastructure solutions that address both operational and capital project needs, optimizing performance, enhancing reliability, and ensuring long-term safety.
Previous wording
Amortization expense represents periodic non-cash charges that consist of amortization of various intangible assets primarily including favorable leasehold interests and certain customer relationships. Each of the Jake Marshall, ACME, Industrial Air, Kent Island, Consolidated Mechanical and Pioneer Power-related intangible assets were recorded under the acquisition method of accounting at their estimated fair values at the acquisition date. See Note 5 – Goodwill and Intangible Assets in the accompanying notes to the Company’s condensed consolidated financial statements for further information on the Company’s intangible assets.
Current wording
Amortization expense represents periodic non-cash charges that consist of amortization of various intangible assets primarily including customer relationships, backlog, trade name, trademarks and intellectual property and favorable leasehold interests. Each of the Jake Marshall, ACME, Industrial Air, Kent Island, Consolidated Mechanical and Pioneer Power-related intangible assets were recorded under the acquisition method of accounting at their estimated fair values at the acquisition date. See Note 5 – Goodwill and Intangible Assets in the accompanying notes to the Company’s condensed consolidated financial statements for further information on the Company’s intangible assets.
Previous wording
On July 1, 2025, the Company completed an acquisition of Woodbury, Minnesota-based mechanical contractor, Pioneer Power, Inc. (“Pioneer Power”), for a purchase price at closing of $66.1 million paid through a combination of available cash and the Company’s revolving credit facility (the “Pioneer Power Transaction”). Pioneer Power is a provider of industrial and institutional mechanical solutions serving healthcare, food, power/utility, oil refining and other select markets in the greater Twin Cities region of Minnesota and upper Midwest region. The acquisition further expanded the Company’s footprint in the core Midwest region and extends its reach into new geographic markets in the upper Midwest. See Note 3 – Acquisition in the accompanying notes to the Company’s condensed consolidated financial statements for further information on the Company’s acquisition of Pioneer Power.
Current wording
On July 1, 2025, the Company completed an acquisition of Woodbury, Minnesota-based mechanical contractor, Pioneer Power, Inc. (“Pioneer Power”). See Note 3 – Acquisition in the accompanying notes to the Company’s condensed consolidated financial statements for further information. Pioneer Power is a provider of industrial and institutional mechanical solutions serving healthcare, food, power/utility, oil refining and other select markets in the greater Twin Cities region of Minnesota and upper Midwest region. The acquisition further expanded the Company’s footprint in the core Midwest region and extended its reach into new geographic markets in the upper Midwest.
Previous wording
The Company manages and measures the performance of its business in two operating segments: ODR and GCR. Segment information is prepared on the same basis that the Company’s Chief Operating Decision Maker (“CODM”) reviews operating results for the purposes of allocating resources and assessing performance. The Company’s CODM is comprised of its President and Chief Executive Officer and Executive Vice President and Chief Financial Officer.
Current wording
The Company manages and measures the performance of its business in two operating segments: ODR and GCR. Segment information is prepared on the same basis that is used by the Company’s Chief Operating Decision Maker (“CODM”) to assess performance and allocate resources. The Company's CODM is comprised of its President and Chief Executive Officer and Executive Vice President and Chief Financial Officer. The Company’s CODM evaluates segment performance and makes resource allocation decisions primarily based on gross profit. Gross profit is a key measure used by the CODM in the annual budgeting and forecasting process, as well as in periodic reviews of actual operating results compared to planned performance. The CODM uses the Company's gross profit measure to assess the operating performance of its reportable segments, establish business priorities, and make decisions regarding the allocation of capital and other resources among those segments.
Previous wording
(3)Included within selling, general and administrative expenses was $1.9 million and $1.6 million of non-cash stock-based compensation expense for the three months ended March 31, 2026 and 2025, respectively.
Current wording
(3)Included within selling, general and administrative expenses was $2.1 million and $1.6 million of non-cash stock-based compensation expense for the three months ended June 30, 2026 and 2025, respectively.
Previous wording
ODR revenue for the three months ended March 31, 2026 increased by $9.4 million, or 10.4%, to $99.8 million, compared to $90.4 million for the three months ended March 31, 2025. This increase was primarily attributable to the acquisition of Pioneer Power, which contributed approximately $14.3 million in ODR revenue in the current period. The Company’s organic ODR operations decreased approximately $4.9 million, primarily due to the timing of sales and backlog burn across certain markets.
Current wording
•ODR revenue increased by $19.5 million, or 17.9%, primarily due to the acquisition of Pioneer Power, which contributed approximately $23.2 million in ODR revenue in the three months ended June 30, 2026. The Company’s ODR organic revenue decreased approximately $3.7 million.
Previous wording
Acquisition-related retention and contingent consideration expenses were $0.1 million and $0.4 million for the three months ended March 31, 2026 and 2025. For the three months ended March 31, 2026, these expenses included approximately $0.1 million of acquisition-related retention expense associated with the Pioneer Power transaction, which was not incurred in the prior year period. As part of the Pioneer Power acquisition, the Company entered into retention agreements with certain key employees of the acquired business. Retention-related compensation is recognized as expense ratably over the requisite service period, which extends through December 2027, and is contingent upon continued employment.
Current wording
Acquisition-related retention and contingent consideration expenses were $0.2 million and $0.8 million for the three months ended June 30, 2026 and 2025, respectively. For the three months ended June 30, 2026, these expenses included approximately $0.1 million of acquisition-related retention expense associated with the Pioneer Power acquisition. In connection with the acquisition, the Company entered into retention agreements with certain key employees of the acquired business. Retention compensation expense is recognized ratably over the requisite service period, which extends through December 2027, and is contingent upon continued employment.
Previous wording
In addition, the Company recognized a less than $0.1 million increase in the fair value of contingent consideration during the three months ended March 31, 2026, compared to a $0.4 million increase during the three months ended March 31, 2025. The change in the fair value of contingent consideration represents a non-cash expense and was primarily attributable to updated estimates regarding the probability of achieving the gross profit targets underlying the earnout arrangements as of March 31, 2026 and 2025.
Current wording
The Company also recognized a $0.1 million increase in the fair value of contingent consideration during the three months ended June 30, 2026, compared to a $0.8 million increase during the three months ended June 30, 2025. Changes in the fair value of contingent consideration represent non-cash expenses and were primarily attributable to updates in the estimated probability of achieving the gross profit targets underlying the related earnout arrangements.
Previous wording
Total amortization expense for the three months ended March 31, 2026 and 2025 was $1.8 million and $1.9 million, respectively. The period-over-period decrease in amortization expense was primarily due to certain finite-lived intangible assets becoming fully amortized. This decrease was partially offset by incremental amortization expense related to intangible assets recognized in connection with the Pioneer Power acquisition, which was not included in the prior-year period.
Current wording
•Amortization of intangibles decreased period-over-period primarily due to certain finite-lived intangible assets becoming fully amortized. This decrease was partially offset by incremental amortization expense associated with intangible assets recognized in connection with the Pioneer Power acquisition.
Previous wording
The Company recorded an income tax benefit of $3.7 million for the three months ended March 31, 2026 compared to $2.2 million for the three months ended March 31, 2025. The effective tax rate was (505.6)% and (27.8)% for the three months ended March 31, 2026 and 2025, respectively. The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate period-over-period was primarily due to state income taxes, tax credits, other permanent adjustments and discrete tax items. In particular, the Company’s effective rate for the three months ended March 31, 2026 and 2025 were materially impacted by “excess tax benefits on stock-based compensation” recognized discretely during the first quarter of each year as a result of the Company’s stock price at the RSU vesting dates resulting in increased tax deductions for the Company. This benefit reduced the effective tax rate by 533.3% and 53.5% for the three months ended March 31, 2026 and 2025 respectively, with the impact varying in prior years.
Current wording
The Company recorded an income tax provision of $1.8 million for the three months ended June 30, 2026 compared to $3.0 million for the three months ended June 30, 2025. The effective tax rate was 27.9% for both the three months ended June 30, 2026 and 2025, respectively. The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate period-over-period was primarily due to state income taxes, tax credits, other permanent adjustments and discrete tax items. See Note 10 – Income Taxes in the accompanying notes to the Company’s condensed consolidated financial statements for additional information.
Previous wording
GCR revenue for the three months ended March 31, 2026 decreased by $3.7 million, or 8.6%, to $39.0 million, compared to $42.7 million for the three months ended March 31, 2025. The decrease in period-over-period GCR revenue was primarily attributable to lower GCR organic revenue of $12.9 million. This decline was partially offset by an incremental increase in GCR acquisition-related revenue of approximately $9.2 million from the Pioneer Power acquisition.
Current wording
•GCR revenue increased by $8.1 million, or 10.6% primarily due to an incremental increase in GCR acquisition-related revenue of approximately $17.0 million from the Pioneer Power acquisition. This increase was partially offset by lower GCR organic revenue of $8.9 million.
Previous wording
ODR gross profit decreased $3.2 million, or 12.1%, as segment margins declined to 23.0% from 28.9% in the prior year period, despite higher revenue. The decrease in gross margin was primarily driven by lower fixed cost absorption due to seasonal revenue levels and higher fixed costs, the absence of higher net project write-ups that benefited the prior-year period and the current lower margin profile of Pioneer Power. As the Company advances its integration strategy of Pioneer Power, management expects gross margins to improve as 2026 progresses. Operational and pricing improvement initiatives are underway to enhance profitability at Pioneer Power with the goal of bringing gross margins in line with the Company average over the next two to three years.
Current wording
•Total gross profit decreased by $8.1 million, or 10.6%, primarily due to lower gross margin percentages in both our ODR and GCR segments. The decrease in segment gross margin percentages was primarily driven by the lower margin profile of Pioneer Power. Pioneer Power continues to perform in line with the Company’s integration expectations and management expects gross margins to improve as 2026 progresses. Operational and pricing improvement initiatives are underway to enhance profitability at Pioneer Power, with the goal of bringing gross margins in line with the Company’s historical average over the next two to three years.
Previous wording
The Company's total SG&A expenses for the three months ended March 31, 2026 increased by approximately $1.6 million, or 6.0%, compared to the three months ended March 31, 2025. The increase in total SG&A included $0.6 million of acquisition-related SG&A expenses associated with Pioneer Power. Acquisition-related SG&A represents SG&A expenses incurred in 2026 by an acquired business only for the twelve-month period subsequent to its respective acquisition date. After such period, the results of acquired businesses are included within the Company’s organic operations, and period-over-period changes are discussed on a combined basis. Organic SG&A increased approximately $1.0 million primarily due to a $1.6 million increase in payroll related expenses, partly offset by a $0.3 million decrease in travel and entertainment related expenses. SG&A expense, as a percentage of revenue, increased to 20.2% for the three months ended March 31, 2026 as compared to 19.9% for the three months ended March 31, 2025.
Current wording
•SG&A expense increased $3.1 million, or 5.8%, due to $1.3 million of SG&A expenses associated with the Pioneer Power acquisition. Acquisition-related SG&A represents SG&A expenses incurred by an acquired business during the twelve-month period following its respective acquisition date. After such period, the results of acquired businesses are included within the Company’s organic operations, and period-over-period changes are discussed on a combined basis. The increase in organic SG&A expense was approximately $1.8 million, primarily due to a $1.8 million increase in payroll related expenses and a $0.7 million increase in stock-based compensation expense, partially offset by a $0.7 million decrease in professional services related expenses. As a percentage of revenue, SG&A expense decreased to 18.0% from 19.3% in the prior-year period.
Previous wording
The Company's ODR backlog was $276.4 million and $255.8 million as of March 31, 2026 and December 31, 2025, respectively. These amounts reflect unrecognized revenue expected to be recognized over the remaining terms of its construction-type and service contracts. Based on historical trends, the Company currently estimates that 82% of its ODR backlog as of March 31, 2026 will be recognized as revenue over the remainder of 2026. The Company's ODR backlog increased due to its continued focus on the accelerated growth of its ODR business.
Current wording
The Company’s ODR backlog was $283.6 million and $255.8 million as of June 30, 2026 and December 31, 2025, respectively. These amounts reflect unrecognized revenue expected to be recognized over the remaining terms of its construction-type and service contracts. Based on historical trends, the Company currently estimates that 68% of its ODR backlog as of June 30, 2026 will be recognized as revenue over the remainder of 2026. The Company’s ODR backlog increased due to its continued focus on the accelerated growth of its ODR business.
Previous wording
The Company's GCR backlog was $188.2 million and $141.8 million as of March 31, 2026 and December 31, 2025, respectively. Projects are brought into backlog once the Company has been provided a written confirmation of award and the contract value has been established. 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 contract and they have directed the Company to begin engineering, designing, incurring construction labor costs or procuring needed equipment and material. The Company’s GCR projects tend to be built over a 12- to 24-month schedule depending upon scope and complexity. Most major projects have a preconstruction planning phase, which may require months of planning before actual construction commences. The Company is occasionally employed to deliver a “fast-track” project, where construction commences as the preconstruction planning work continues. As work on the Company’s projects progress, it increases or decreases backlog to take into account its estimate of the effects of changes in estimated quantities, changes in conditions, change orders and other variations from initially anticipated contract revenue, and the percentage of completion of the Company’s work on the projects. Based on historical trends, the Company currently estimates that 67% of its GCR backlog as of March 31, 2026 will be recognized as revenue over the remainder of 2026. Additionally, the reduction in GCR backlog has been intentional as the Company looks to focus on higher margin projects than it has done historically, as well as its focus on smaller, higher margin owner direct projects.
Current wording
The Company’s GCR backlog was $200.1 million and $141.8 million as of June 30, 2026 and December 31, 2025, respectively. Projects are brought into backlog once the Company has been provided a written confirmation of award and the contract value has been established. 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 contract and they have directed the Company to begin engineering, designing, incurring construction labor costs or procuring needed equipment and material. The Company’s GCR projects tend to be built over a 12- to 24-month schedule depending upon scope and complexity. Most major projects have a preconstruction planning phase, which may require months of planning before actual construction commences. The Company is occasionally employed to deliver a “fast-track” project, where construction commences as the preconstruction planning work continues. As work on the Company’s projects progress, it increases or decreases backlog to take into account its estimate of the effects of changes in estimated quantities, changes in conditions, change orders and other variations from initially anticipated contract revenue, and the percentage of completion of the Company’s work on the projects. Based on historical trends, the Company currently estimates that 57% of its GCR backlog as of June 30, 2026 will be recognized as revenue over the remainder of 2026. Additionally, the reduction in GCR backlog has been intentional as the Company focuses on higher margin projects than it has done historically, as well as its focus on smaller, higher margin owner direct projects.
Previous wording
The Company continues to monitor evolving macroeconomic conditions and heightened geopolitical risks. Economic and trade policy uncertainty has remained elevated in 2026. Rising trade tensions and changes in trade policy, including tariffs, global conflicts, labor disruptions, and evolving regulations may continue to contribute to inflationary pressures, supply chain disruptions, and pricing and lead-time volatility for certain materials and equipment. The Company continues to work closely with suppliers and subcontractors to mitigate potential shortages and manage supply and pricing volatility. The Company anticipates continued uncertainty with respect to inflation and other macroeconomic trends for the foreseeable future.
Current wording
The Company continuously monitors evolving macroeconomic conditions and heightened geopolitical risks. Economic and trade policy uncertainty has remained elevated in 2026. Trade tensions and changes in trade policy, including tariffs, global conflicts, labor disruptions, and evolving regulations may continue to contribute to inflationary pressures, supply chain disruptions, and pricing and lead-time volatility for certain materials and equipment. The Company continues to work closely with suppliers and subcontractors to mitigate potential shortages and manage supply and pricing volatility. The Company anticipates continued uncertainty with respect to inflation and other macroeconomic trends for the foreseeable future.
Previous wording
The Company also believes that starting in 2026, certain of the markets in which it sources materials, equipment and in certain instances subcontracted services have experienced, and may continue to experience, consolidation. Given this trend, the Company continues to actively manage these supplier and subcontractor relationships with the ultimate view and goal of providing services to the Company’s customers in an effort to be an indispensable building systems solutions firm.
Current wording
The Company believes that certain of the markets in which it sources materials, equipment and, in certain instances, subcontracted services have experienced consolidation during 2026 and may continue to consolidate. Given this trend, the Company continues to actively manage its supplier and subcontractor relationships with the ultimate view and goal of providing high-quality services to its customers in an effort to be a leading building systems solutions firm.
Previous wording
Notwithstanding those active managerial efforts with that goal in mind, the Company understands that if it is not successful in these managerial efforts that increased consolidation among suppliers and/or subcontractors could over time impair our ability to deliver services efficiently, competitively price our offerings, or meet customer expectations.
Current wording
Notwithstanding those active managerial efforts with that goal in mind, the Company understands that if it is not successful in these managerial efforts that increased consolidation among suppliers and/or subcontractors could over time impair its ability to deliver services efficiently, competitively price its offerings, or meet customer expectations.
Previous wording
The prices of key inputs used in the Company’s projects and service operations, including steel, pipe, copper, and certain equipment and components, remain subject to volatility, including increases driven by inflation, tariffs, supply constraints, and price escalation. These factors can, at times, be material to the Company’s results of operations and financial condition, particularly on fixed-price projects and where equipment lead times extend beyond procurement windows. During the three months ended March 31, 2026, the Company continued to experience selective pricing pressure and extended lead times for certain materials and equipment, although such impacts were not material to its consolidated results of operations or financial condition.
Current wording
The prices of key inputs used in the Company’s projects and service operations, including steel, pipe, copper, and certain equipment and components, remain subject to volatility, including increases driven by inflation, tariffs, supply constraints, and price escalation. These factors can, at times, be material to the Company’s results of operations and financial condition, particularly on fixed-price projects and where equipment lead times extend beyond procurement windows. During the six months ended June 30, 2026, the Company continued to experience selective pricing pressure and extended lead times for certain materials and equipment, although such impacts were not material to its consolidated results of operations or financial condition.
Previous wording
The Company continues to monitor developments in U.S. trade policy, including tariffs imposed under Section 232 of the Trade Expansion Act of 1962 on imported steel, aluminum, and certain derivative products, as well as the potential for additional duties, exemptions, or retaliatory measures. These actions could increase costs, impact the availability and lead times of certain materials and components, and alter competitive dynamics. In the Company’s ODR segment, which generally operates on shorter sales cycles, the Company can often adjust pricing to reflect cost increases; however, may still be unable to recover all cost increases in a timely manner, particularly for fixed-price contracts and long-lead equipment orders. Accordingly, the Company cannot predict the ultimate impact of tariffs or other trade restrictions on its business, results of operations, or financial condition.
Current wording
The Company continues to monitor developments in U.S. trade policy, including tariffs imposed under Section 232 of the Trade Expansion Act of 1962 on imported steel, aluminum, and certain derivative products, as well as the potential for additional duties, exemptions, or retaliatory measures. These actions could increase costs, impact the availability and lead times of certain materials and components, and alter competitive dynamics. In the Company’s ODR segment, which generally operates on shorter sales cycles, the Company can often adjust pricing to reflect cost increases; however, it may still be unable to recover all cost increases in a timely manner, particularly for fixed-price contracts and long-lead equipment orders. Accordingly, the Company cannot predict the ultimate impact of tariffs or other trade restrictions on its business, results of operations, or financial condition.
Previous wording
During the three months ended March 31, 2026, the Company used $7.8 million in cash from its operating activities, which consisted of cash used in working capital of $15.9 million, partly offset by net income of $4.4 million and certain non-cash adjustments of $3.7 million. During the three months ended March 31, 2025, the Company generated $2.2 million from its operating activities, which consisted of net income of $10.2 million and certain non-cash adjustments of $5.1 million, partly offset by cash used in working capital of $13.0 million.
Current wording
During the six months ended June 30, 2026, the Company generated $10.9 million in cash from its operating activities, which consisted of non-cash adjustments of $13.3 million and net income of $9.1 million, partly offset by cash used in working capital of $11.5 million. During the six months ended June 30, 2025, the Company generated $4.2 million from its operating activities, which consisted of net income of $18.0 million and certain non-cash adjustments of $14.1 million, partly offset by cash used in working capital of $27.9 million.
Previous wording
The change in operating cash flows during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily attributable to a $5.8 million decrease in net income, a $6.0 million unfavorable change in accounts payable, including retainage, due to the timing of vendor payments and a $2.2 million increase in payments of contingent consideration liability in excess of acquisition-date fair value. In addition, there was a $2.1 million unfavorable change in contract assets and contract liabilities, net, and a $1.6 million unfavorable change in other current assets, each reflecting the timing of billings, collections and other working capital activity. These uses of cash were partially offset by a $3.7 million favorable change in accounts receivable due to the timing of cash collections and a $5.3 million favorable change in accrued expenses and other current liabilities due to the timing of payments.
Current wording
The change in operating cash flows during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily attributable to a $26.7 million favorable change in contract assets and contract liabilities, net, reflecting the timing of billings, collections and other working capital activity. In addition, there was a $11.6 million favorable change in accounts payable, including retainage, and a $10.5 million favorable change in accrued expenses and other current liabilities due to the timing of payments. These cash inflows were partially offset by a $22.8 million unfavorable change in accounts receivable due to the timing of cash collections, an $8.8 million decrease in net income and a $6.4 million unfavorable change in other current assets.
Previous wording
Cash flows used in investing activities were $0.1 million and $1.9 million for the three months ended March 31, 2026 and 2025, respectively. Cash used in investing activities for the three months ended March 31, 2026 included a cash outflow of $0.4 million related to the purchase of property and equipment, partially offset by $0.3 million in proceeds from the sale of property and equipment. Cash used in investing activities for the three months ended March 31, 2025 included a cash outflow of $2.2 million related to the purchase of property and equipment, which was primarily associated with the purchase of certain rental equipment to expand customer offerings. These cash outflows were partially offset by $0.3 million in proceeds from the sale of property and equipment.
Current wording
Cash flows used in investing activities were $0.7 million and $2.2 million for the six months ended June 30, 2026 and 2025, respectively. Cash used in investing activities for the six months ended June 30, 2026 included a cash outflow of $1.0 million related to the purchase of property and equipment, partially offset by $0.4 million in proceeds from the sale of property and equipment. Cash used in investing activities for the six months ended June 30, 2025 included a cash outflow of $3.1 million related to the purchase of property and equipment, which was primarily associated with the purchase of certain rental equipment to expand customer offerings. These cash outflows were partially offset by $0.9 million in proceeds from the sale of property and equipment.
Previous wording
Cash Flows Provided by (Used in) Financing Activities
Current wording
Cash Flows Used in Financing Activities
Previous wording
Cash flows provided by financing activities were $12.3 million for the three months ended March 31, 2026 compared to cash flows used in financing activities of $7.2 million for the three months ended March 31, 2025. During the three months ended March 31, 2026, the Company borrowed $54.5 million on its revolving credit facility and recognized additional financing cash inflows of $5.9 million associated with the sale of shares to satisfy employee tax withholding requirements and $0.4 million associated with proceeds from employee contributions to the ESPP. These financing cash inflows were partially offset by $32.1 million of repayments on the Company's revolving credit facility, $12.0 million in taxes paid related to the net share settlement of equity awards, $1.3 million for payments on finance leases and payments of $3.5 million and $2.5 million to the former owners of Industrial Air and Kent Island, respectively, related to their earnout arrangements, of which $3.1 million was collectively recognized as a cash outflow from financing activities.
Current wording
Cash flows used in financing activities were $4.1 million for the six months ended June 30, 2026 compared to $8.1 million for the six months ended June 30, 2025. During the six months ended June 30, 2026, the Company repaid $93.1 million under its revolving credit facility, paid $12.0 million in taxes associated with the net share settlement of equity awards and made $2.5 million of finance lease payments. The Company also made earnout payments of $3.5 million, $2.5 million and $0.9 million to the former owners of Industrial Air, Kent Island and Consolidated Mechanical, respectively, of which $3.5 million was collectively recognized as a cash outflow from financing activities. These financing cash outflows were partially offset by $100.6 million in borrowings under the Company's revolving credit facility, $5.9 million of proceeds associated with the sale of shares to satisfy employee tax withholding requirements and $0.5 million of proceeds associated with employee contributions to the ESPP.
Previous wording
During the three months ended March 31, 2025, the Company paid approximately $10.7 million in taxes related to the net share settlement of equity awards, $0.9 million for payments on finance leases and made a $3.0 million payment to the former owner of Industrial Air related to the First IA Earnout Period, of which $2.3 million was recognized as a cash outflow from financing activities. These cash financing outflows were partially offset by proceeds of $6.3 million associated with the sale of shares to satisfy employee tax withholding requirements and $0.3 million associated with proceeds from employee contributions to the ESPP.
Current wording
During the six months ended June 30, 2025, the Company paid approximately $10.7 million in taxes related to the net share settlement of equity awards, $1.8 million for payments on finance leases and made a $3.0 million payment to the former owner of Industrial Air related to the First IA Earnout Period, of which $2.3 million was recognized as a cash outflow from financing activities. These cash financing outflows were partially offset by proceeds of $6.3 million associated with the sale of shares to satisfy employee tax withholding requirements and $0.4 million associated with proceeds from employee contributions to the ESPP.
Previous wording
The following table reflects our available funding capacity, subject to covenant restrictions, as of March 31, 2026:
Current wording
The following table reflects the Company’s available funding capacity, subject to covenant restrictions, as of June 30, 2026:
Previous wording
Management continued to devote additional resources to its billing and collection efforts during the three months ended March 31, 2026. Management continues to expect that growth in our ODR business, which is less sensitive to the cash flow issues presented by large GCR projects, should positively impact our cash flow trends.
Current wording
Management continued to devote additional resources to its billing and collection efforts during the six months ended June 30, 2026. Management continues to expect that growth in our ODR business, which is less sensitive to the cash flow issues presented by large GCR projects, should positively impact our cash flow trends.
Previous wording
Provided that the Company’s lenders continue to provide working capital funding, the Company believes based on its current forecast that its current cash and cash equivalents of $15.8 million as of March 31, 2026, cash payments to be received from existing and new customers, and availability of borrowing under the A&R Wintrust Revolving Loan (pursuant to which we had $60.7 million of availability as of March 31, 2026) will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months.
Current wording
Provided that the Company’s lenders continue to provide working capital funding, the Company believes based on its current forecast that its current cash and cash equivalents of $17.5 million as of June 30, 2026, cash payments to be received from existing and new customers, and availability of borrowing under the Wintrust Revolving Loans (pursuant to which we had $75.6 million of availability as of June 30, 2026) will be sufficient to meet its working capital and capital expenditure requirements for at least the next 12 months.
Previous wording
In connection with its business, the Company is occasionally required to provide various types of surety bonds that provide an additional measure of security to its customers for its performance under certain government and private sector contracts. The Company’s ability to obtain surety bonds depends upon its capitalization, working capital, past performance, management expertise and external factors, including the capacity of the overall surety market. Surety companies consider such factors in light of the amount of the Company’s backlog that it has currently bonded and their current underwriting standards, which may change from time-to-time. The bonds, if any, the Company provides typically reflect the contract value. As of March 31, 2026 and December 31, 2025, the Company had approximately $119.8 million and $156.6 million in surety bonds outstanding, respectively. The Company believes that its $1 billion bonding capacity provides us with a significant competitive advantage relative to many of our competitors which we believe have limited bonding capacity. See Note 13 – Commitments and Contingencies in the accompanying notes to the Company’s condensed consolidated financial statements for further information.
Current wording
In connection with its business, the Company is occasionally required to provide various types of surety bonds that provide an additional measure of security to its customers for its performance under certain government and private sector contracts. The Company’s ability to obtain surety bonds depends upon its capitalization, working capital, past performance, management expertise and external factors, including the capacity of the overall surety market. Surety companies consider such factors in light of the amount of the Company’s backlog that it has currently bonded and their current underwriting standards, which may change from time-to-time. The bonds, if any, the Company provides typically reflect the contract value. As of June 30, 2026 and December 31, 2025, the Company had approximately $107.3 million and $156.6 million in surety bonds outstanding, respectively. The Company believes that its $1.0 billion bonding capacity provides us with a significant competitive advantage relative to many of its competitors which we believe have limited bonding capacity. See Note 13 – Commitments and Contingencies in the accompanying notes to the Company’s condensed consolidated financial statements for further information.
Previous wording
Management believes there have been no significant changes during the three months ended March 31, 2026, to the items that we disclosed as our critical accounting policies and estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 2 – Significant Accounting Policies in the accompanying notes to the Company’s consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025.
Current wording
Management believes there have been no significant changes during the six months ended June 30, 2026, to the items that we disclosed as our critical accounting policies and estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 2 – Significant Accounting Policies in the accompanying notes to the Company’s consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025.
Rearranged current paragraphs (15)
Current report — wording carried from elsewhere
•Total gross profit decreased by $2.5 million primarily due to lower gross margin percentages in both our ODR and GCR segments. The decrease in segment gross margin percentages was primarily driven by the lower margin profile of Pioneer Power. Pioneer Power continues to perform in line with the Company’s integration expectations and management expects gross margins to improve as 2026 progresses. Operational and pricing improvement initiatives are underway to enhance profitability at Pioneer Power, with the goal of bringing gross margins in line with the Company’s historical average over the next two to three years.
Current report — wording carried from elsewhere
Selling, General and Administrative (“SG&A”)
Current report — wording carried from elsewhere
Comparison of Results of Operations for the six months ended June 30, 2026 and 2025
Current report — wording carried from elsewhere
The following table presents operating results for the six months ended June 30, 2026 and 2025 in dollars and expressed as a percentage of total revenue (except as indicated below), as compared below:
Current report — wording carried from elsewhere
(1)As a percentage of ODR revenue.
Current report — wording carried from elsewhere
(2)As a percentage of GCR revenue.
Current report — wording carried from elsewhere
(3)Included within selling, general and administrative expenses was $3.9 million and $3.2 million of non-cash stock-based compensation expense for the six months ended June 30, 2026 and 2025, respectively.
Current report — wording carried from elsewhere
•ODR revenue increased by $28.9 million, or 14.5%, primarily due to the acquisition of Pioneer Power, which contributed approximately $37.5 million in ODR revenue in the current period. The Company’s organic ODR operations decreased approximately $8.6 million.
Current report — wording carried from elsewhere
The Company recorded revisions in its contract estimates for certain ODR and GCR projects; however, the Company did not record any material gross profit write-ups or write-downs that had a net gross profit impact of $1.0 million or more during the six months ended June 30, 2026 and 2025.
Current report — wording carried from elsewhere
Acquisition-Related Retention Expense and Contingent Consideration
Current report — wording carried from elsewhere
Acquisition-related retention and contingent consideration expenses were $0.4 million and $1.2 million for the six months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026, these expenses included approximately $0.2 million of acquisition-related retention expense associated with the Pioneer Power acquisition. In connection with the acquisition, the Company entered into retention agreements with certain key employees of the acquired business. Retention compensation expense is recognized ratably over the requisite service period, which extends through December 2027, and is contingent upon continued employment.
Current report — wording carried from elsewhere
See Note 8 – Fair Value Measurements in the accompanying notes to the Company’s condensed consolidated financial statements for further information on the Company’s earnout arrangements.
Current report — wording carried from elsewhere
•Amortization of intangibles decreased period-over-period primarily due to certain finite-lived intangible assets becoming fully amortized. This decrease was partially offset by incremental amortization expense associated with intangible assets recognized in connection with the Pioneer Power acquisition.
Current report — wording carried from elsewhere
See Note 5 – Goodwill and Intangibles in the accompanying notes to the Company’s condensed consolidated financial statements for further information on the Company’s intangible assets.
Current report — wording carried from elsewhere
Cash Flows Provided by Operating Activities