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DATE

Wednesday, Aug. 5, 2026 at 9:00 a.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer - Michael McCann
• Executive Vice President and Chief Financial Officer - Jayme L. Brooks

TAKEAWAYS

• Total Revenue -- $173.5 million, an increase of 21.9% compared to the prior year quarter primarily driven by a $30.9 million contribution from the Pioneer Power acquisition.
• Net Income -- $4.7 million, representing a 38.8% decrease from $7.8 million in the second quarter of 2025.
• Diluted EPS -- $0.39, compared to $0.64 in the prior year period, reflecting lower net income and increased share counts.
• Adjusted EBITDA -- $13.9 million, a 22.3% decrease from $17.9 million due to near-term margin pressure and increased selling, general, and administrative expenses.
• Adjusted EBITDA Margin -- 8%, down from 12.6% in the second quarter of 2025.
• Total Gross Profit -- $37.3 million, a 6.4% decrease from $39.8 million in the year-ago period.
• Total Gross Margin -- 21.5%, a decline from 28% in the second quarter of 2025, driven by the current lower margin profile of Pioneer Power and competition for skilled labor.
• ODR Revenue -- $128.4 million, representing 74% of total revenue and growing 17.9% year over year.
• ODR Gross Margin -- 24%, down from 29% in the prior year, primarily due to integration timing and labor market conditions.
• GCR Revenue -- $45 million, an increase of 35.3% driven by acquisition-related revenue growth of 23.3% and organic growth of 12%.
• GCR Gross Margin -- 14.5%, compared to 24.7% in the year-ago period, reflecting project timing and lower net project write-ups.
• Total Bookings -- $182 million during the quarter, generating a book-to-bill ratio of 1.1x.
• Cumulative Bookings -- $616 million over the past three quarters, including $182 million in the most recent period.
• Pioneer Power Integration -- 1.5 percentage point improvement in gross margin during the first half of 2026 compared to the acquisition date in July 2025.
• CYMCOR Acquisition -- $30 million purchase price for the acquisition completed on Aug. 4, 2026, which was funded through available cash and the revolving credit facility.
• CYMCOR 2027 Outlook -- Management expects the acquisition to generate $12 million of revenue and $4 million of adjusted EBITDA in fiscal year 2027.
• Net Operating Cash Flow -- $18.7 million, representing the company's second-highest second-quarter operating cash flow since its initial public offering.
• Total Liquidity -- $93.1 million as of June 30, 2026, including $17.5 million in cash and cash equivalents.
• Revolving Credit Facility -- Increased to an aggregate principal amount of $125 million from $100 million following an amendment on July 24, 2026.
• Fiscal 2026 Revenue Guidance -- $760 million to $790 million, an increase from the previous range of $730 million to $760 million.
• Fiscal 2026 Adjusted EBITDA Guidance -- $78 million to $84 million, a decrease from the previous range of $90 million to $94 million.
• Organic Revenue Growth Guidance -- 9% to 14% for total organic revenue, with ODR organic revenue growth expected to be 6% to 10%.
• Free Cash Flow Conversion -- Management expects to convert at least 75% of adjusted EBITDA into free cash flow for fiscal year 2026.

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RISKS

• McCann stated, "Our results fell short of expectations driven by project timing and ongoing softness in health and institutional markets from elevated price sensitivity and market conditions pressuring gross margins," noting challenges in core sectors.
• Brooks noted that gross profit margin was negatively impacted by "competition for skilled labor and materials associated with construction activity in the data center markets," creating cost pressures.

SUMMARY

Limbach Holdings, Inc. (LMB +0.15%) reported a strategic shift from business transformation to disciplined growth, focusing on end-market diversification into data centers and industrial manufacturing. Management attributed the second quarter results to project timing and price sensitivity in the healthcare and institutional sectors, though underlying customer demand remains stable as evidenced by a 1.1x book-to-bill ratio. The company completed the acquisition of CYMCOR to expand its national program management capabilities and geographic presence. Revised fiscal year 2026 guidance reflects higher revenue expectations from recent acquisitions and project timing, offset by lower adjusted EBITDA projections due to near-term margin pressure and integration costs.

• CEO McCann noted the company is "accelerating our efforts for expansion of data centers and industrial manufacturing" to build a national platform similar to its healthcare model.
• Regarding the CYMCOR acquisition, McCann stated that the company manages project budgets for customers that have a "cumulative value exceeding $8 billion," providing early engagement opportunities.
• Pioneer Power's gross margin has improved by approximately 1.5 percentage points in the first half of 2026 relative to its margin at the time of its July 2025 acquisition.
• McCann described the healthcare sector as "impacted by things that happen from a policy perspective in 2025," leading to budget constraints and delayed decision-making among institutional clients.
• Management reduced its ODR revenue target range to 70% to 80% of total revenue, reflecting a shift to include more data center and industrial GCR opportunities.
• Brooks confirmed that the company expects a run rate of approximately $5 million for capital expenditures through the remainder of the fiscal year.
• McCann attributed the pull-through potential of the CYMCOR acquisition to its business model mirroring the company's healthcare platform, which has generated a "20x pull through multiple" in project bookings.

INDUSTRY GLOSSARY

• Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, further adjusted for non-recurring or unusual items such as restructuring costs or acquisition expenses.
• Book-to-Bill Ratio: A ratio of orders received (bookings) to units shipped and billed (revenue), where a ratio above 1.0 indicates strong demand.
• GCR (General Contractor Relationships): A segment where the company performs work as a subcontractor to a general contractor on larger construction or renovation projects.
• MEPC: Mechanical, electrical, plumbing, and controls services, the core technical infrastructure systems maintained by the company.
• ODR (Owner Direct Relationships): A segment where the company works directly with building owners to provide facility assessments, maintenance, and system upgrades.

Full Conference Call Transcript

Operator: Good morning. Welcome to the Limbach Holdings Second Quarter 26 Earnings Conference Call and Webcast. All participants will be in listen-only mode. I will now turn the conference over to your host, Lisa Fortuna of Financial Profiles. You may begin.

Lisa Fortuna: Good morning, and thank you for joining us today. To discuss Limbach Holdings financial results for the second quarter of 2026. Yesterday, Limbach issued its earnings release and filed its Form 10 Q for the period ended 06/30/2026. Both documents as well as the updated investor presentation are available on the Investor Relations section of the company's website at limbachinc.com. Management may refer to select slides during today's call and encourages investors to review the presentation in its entirety. On today's call are Michael McCann, President and Chief Executive Officer and Jayme L. Brooks, Executive Vice President and Chief Financial Officer. We will begin with prepared remarks and then open the call to questions.

Before we begin, I would like to remind you that today's comments will include forward looking statements under federal securities laws. Forward looking statements are identified by words such as will, be, intend, believe, expect, anticipate, or other comparable words and phrases. Statements that are not historical facts, such as those about expected financial performance, are also forward looking statements. Actual results may differ materially from those contemplated by such forward looking statements. A discussion of the factors that could cause a material difference in the company's results compared to these forward looking statements is contained in Limbach's SEC filings Including reports on Form 10 ks and 10 Q.

Please note on today's call, we will be referring to some non GAAP measures. You can find the reconciliation of these non GAAP measures to the most directly comparable GAAP measures our second quarter 2026 earnings release and in our presentation, both of which can be found on Limbach's Investor Relations website and have been furnished in the Form 8 ks filed with the SEC.

Michael McCann: With that, I will now turn the call over to President and CEO, Mike McCann. Good morning and thank you for joining us. Yesterday, we reported our second quarter results, as well as the acquisition of Simpcore. Our results fell short of expectations driven by project timing and ongoing softness in health and institutional markets from elevated price sensitivity and market conditions pressuring gross margins. However, underlying customer demands remained healthy.

We generated $182 million of bookings during the quarter, our third consecutive quarter of strong bookings bringing the total bookings over the past 3 quarters $616 million While these market conditions have created near term pressure, they also underscore the importance of building a more diversified, higher-quality business, and we are taking action. Our focus is diversifying our end markets, expanding our geographic reach and leveraging our integrated platform in an effort to improve profitability. Moving on to strategy. For the past 5 years, we transformed Limbach. Today, that work allows us to shift from transformation to disciplined growth. Our objective now is to build a larger company with strong cash generation and higher returns over time.

First, we are accelerating our efforts for expansion of data centers and industrial manufacturing. Building a national platform that mirrors the success we have achieved in our national healthcare platform. By diversifying our exposure across multiple attractive end markets, we believe we will reduce our reliance on any single vertical better balance the business through market cycles, and create a more resilient platform for long term growth. Second, we continue to pursue a disciplined acquisition strategy that expands our presence in targeted vertical markets, while extending our reach into attractive high growth regions such as Texas, The Midwest, and the Southeast. By broadening both our market and geographic exposure, we believe we are able to support customers across more locations.

Reducing concentration risk and strengthening our competitive position. Additionally, our acquisition philosophy is not built around buying fully optimized businesses. We are looking for companies with strong customer relationships and attractive strategic positions where we believe Limbach's integrated operating model can create additional value over time. We have already seen that approach produce positive results with Pioneer Power, we have seen encouraging improvements in gross margin, approximately 1.5% from the first half of 2026 compared to when we acquired Pioneer Power in July 2025. We believe each acquisition strengthens the economics of the entire platform, because it expands customer relationships, increases cross selling opportunities, broadens our geographic reach, enhances the value of our integrated operating model.

Third, we are leveraging our integrated operating model to connect capabilities across geographies and service lines. Accelerating cross selling opportunities and improving profitability. We believe our work at Pioneer Power demonstrates how disciplined integration, and operational improvements can create meaningful value over time, as we just noted. This integrated operating model also drives value creation from our acquisitions. For example, our target operational and pricing actions are of underway in an effort to improve Pioneer Power's profitability, bring gross profit margin in line with the company average over the next 2 to 3 years.

We have a clear roadmap to improve results, By executing this plan, we expect to build a more resilient business with a broader set of growth drivers and less exposure to any single market, and higher margins. Execution of these strategic initiatives expands our national footprint, strengthens customer relationships, increases the scale advantages of our platform. It should strengthen our purchasing power, national account capabilities, operating leverage and our ability to allocate capital efficiently. We believe these advantages will compound over time, creating a larger, high quality business with more durable earnings and a stronger long term shareholder value. Importantly, our balance sheet and liquidity provides us with the flexibility to execute this strategy in a disciplined manner.

Yesterday's acquisition of Simpcore is an excellent example of our disciplined approach to capital allocation, and drives 3 of our strategic initiatives I have been describing. This acquisition expands Limbach's geographic footprint, enhances its ability to serve national and multisite data center customers and increases engagement with building owners early in the facility lifecycle. Equally important, with our integrated operating model, it creates significant cross selling and pull through project booking opportunities by connecting complementary service offerings across both organizations expanding access to new data center customers and generating additional growth within Limbach's existing markets. Through its national program management services, Simpcore currently oversees project budgets for customers that have a cumulative value exceeding $8 billion.

We believe this early engagement with customers will create meaningful opportunities for Limbach to provide engineering, construction, commissioning, maintenance and other life cycle services. We have confidence in the acquisition of Simpcore as its business model closely mirrors Limbach's proven healthcare program management platform. Which we expect will provide us the ability to drive value in the data center mission critical market. Over the last 12 months, our healthcare program management platform generated approximately $3 million of professional service revenue, and pulled through approximately $60 million of project bookings, resulting in a 20x pull through multiple. Looking forward, we currently expect Simpcore to generate $12 million of program management revenue, and $4 million of adjusted EBITDA in 2027.

Moving on to our verticals. Healthcare, while at a macro level, healthcare spending remains pressured by budget constraints, delayed decision making, continue to strengthen our position by engaging earlier with national customers our facility planning and long term travel programs. Those relationships continue to generate larger, more strategic opportunities over time. Industrial, the demand in our industrial markets remains strong and increasingly complements our data center strategy. As both are benefiting from sustained investment in power, manufacturing and mission critical infrastructure. Lastly, data centers. We continue to view data centers as an attractive long term growth opportunity, We are steadily investing in the capabilities, customer relationships and professional services platform necessary to establish Limbach as a trusted long term partner.

Before I turn the call over to Jayme, let me close by putting today's results into a broader context of where we are taking Limbach. Despite our near term challenges, we remain confident in Limbach's long term direction and our ability to generate shareholder value. We believe the actions we are taking from investing in our national platform to expanding our capabilities through disciplined acquisitions like Simpcore are building a stronger, more diversified, higher-quality company with greater long term earnings power. Our strategy is straightforward. Broaden our geographic reach, deepen customer relationships, expand into attractive end markets, and leverage our integrated operating model to create a business that generates higher returns and compounds value over time.

We have adjusted our expectations to reflect the business environment as we see it today. We believe our responsibility is straightforward: execute against the plan, continue allocating capital with discipline, and build a business that is stronger, more valuable. We understand that execution is 1 of our important measures of success We are focused on providing continued and better executions. With that, I will turn the call over to Jayme to review our financial results and updated outlook.

Jayme L. Brooks: Thank you, Mike. Our Form 10 Q and earnings press release filed yesterday provides comprehensive details of our financial results. So I will focus on the highlights of the second quarter of 2026, with all comparisons versus the second quarter of 25 unless otherwise noted. We generated total revenue of $173.5 million compared to $142.2 million in Q2 25. The increase was primarily due to the $30.9 million revenue contribution from Pioneer Power. ODR revenue grew 17.9% to $128.4 million with ODR acquisition related revenue increasing 21.3% partially offset by a 3.4% decrease in ODR organic revenue. ODR revenue accounted for 74% of total revenue during the quarter.

GCR revenue increased 35.3% to $45 million with acquisition related revenue increasing 23.3% organic revenue increasing 12%. Total gross profit decreased 6.4% from $39.8 million to $37.3 million. Total gross margin was 21.5%, down from 28% in the prior year quarter. ODR gross profit decreased 2.6% or $800 thousand and ODR gross margin was 24%. Compared to 29% in the prior year period. GCR gross profit decreased 20.7% or $1.7 million and GCR gross margin was 14.5% from 24.7%. The decrease in both segment gross margin percentages was primarily driven by the current 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 average over the next 2 to 3 years. 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 the data center markets. SG&A expense for the second quarter was $28.1 million, an increase of approximately $1.5 million from $26.6 million.

The increase was primarily driven by incremental SG&A expense associated with Pioneer Power and an aggregate $600 thousand 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 second quarter of 25. Net income for the second quarter decreased 38.8% from $7.8 million to $4.7 million, and earnings per diluted share was $0.39 compared to $0.64 Adjusted net income decreased 32.1% to $7.6 million compared to $11.3 million and adjusted diluted earnings per share decreased from $0.93 to $0.64 Adjusted EBITDA for the quarter decreased 22.3% to $13.9 million compared to $17.9 million Adjusted EBITDA margin was 8% compared to 12.6% in Q2 last year.

Primarily driven by the lower gross profit and higher SG&A expense. Turning to cash flow, Net operating cash inflow during the quarter was $18.7 million representing our second highest second quarter operating cash flow since becoming a public company. This compares to $2 million in the year ago period and was driven by net income of $4.7 million, $9.6 million of non-cash adjustments of non-cash adjustments and a $4.4 million increase from working capital. Free cash flow, defined as cash flow from operating activities, excluding changes in working capital, minus capital expenditures, was $13.7 million in the second quarter compared to $16.1 million in Q2 last year. Representing a $2.4 million decrease.

This free cash flow conversion of adjusted EBITDA for the quarter was 98.2% versus 89.7% last year. Turning to our balance sheet. As of June 30, we had $17.5 million in cash and cash equivalents. And total debt of $41.1 million which includes $17.5 million borrowed on our revolving credit facility. Total liquidity, defined as cash and availability on our revolving credit facility, was $93.1 million at the end of the second quarter and on 07/24/2026, the company amended its credit agreement to increase the aggregate principal amount of available borrowings under its revolving credit facility from $100 million to $125 million providing an additional $25 million in potential availability.

As Mike mentioned, yesterday, the company completed its acquisition of Simpcore. For a purchase price of $30 million subject to typical post closing adjustments. The acquisition was funded through a combination of available cash and borrowing under our revolving credit facility. Since the acquisition occurred after the end of the second quarter, the balance sheet as of 06/30/2026, does not include the funding impact of Simpcore. Moving to our outlook Our revised outlook is based on our strong bookings projects currently underway and the visibility we have into the balance of the year, and we believe it appropriately reflects the current operating environment and positions us to execute successfully.

Accordingly, we have increased our revenue outlook to reflect the timing of project commencements and execution during the remainder of 2026, while lowering our adjusted EBITDA range to reflect the near term margin and execution headwinds Mike described earlier. This revised guidance excludes any contribution from the recently completed Simpcore acquisition or future acquisitions. For fiscal 2026, we now expect revenue of $760 million to $790 million and adjusted EBITDA of $78 million to $84 million Our outlook is based on the following operating assumptions.

Total organic revenue growth of 9% to 14% ODR revenue as a percentage of total revenue of 70% to 80% ODR organic revenue growth of 6% to 10% gross margin percentage of 23% to 24% and SG&A expense as a percentage of total revenue of 15% to 16% Importantly, our expectations for cash generation remain unchanged. We continue to expect to convert at least 75% of adjusted EBITDA into free cash flow through disciplined working capital management for fiscal 2026 and expect CapEx to have a run rate of approximately $5 million This concludes our prepared remarks.

Operator: I will now ask the operator to begin the Q&A. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Please press star followed by the number 2. The first question comes from Christopher Moore with CJS Securities. Please go ahead.

Chris Moore: So maybe we will just start with -- good morning. With the ODR organic revenue guide, so you stated, Mike, basically some softness in the healthcare market. Is it project timing? Is it kind of can you get into it a little bit deeper in terms of the lower revenue growth that you are thinking about for 2026? And does that carry over into 2027? Just trying to understand kind of how you are seeing the health care industrial side of things at this point.

Michael McCann: Yes. So what kind of gives us confidence from a guidance perspective, just from an ODR organic, but, a total organic is our strong bookings that we have had over the last 3 quarters. So we have had $616 million in Q4, Q1 and Q2. So that gives us some confidence So for us, we continue to generate healthy bookings. I think each vertical market is a little bit different as far as a price sensitivity perspective as well too. Institutional health care, these several markets are challenged. We are still gaining market share and picking up bookings. But again, the price sensitivity of that is definitely impacted as well too.

But as far as just from a guidance perspective, whether that is ODR or total revenue, the bookings is the biggest thing that gives us confidence. And we hope to continue the momentum from those bookings that leads us into kind of getting off to a strong start next year too.

Chris Moore: Got it. Okay. I will leave that 1 there. The GCR margin had been pretty strong as you kind of more and more look to avoid the lower margin third party work. it is pretty low this quarter. I know there is was project timing, the Pioneer work. Is there something more strategic in temporarily taking on the data center work even if it is a third party data center work, even if it is lower margin to help you kind of gain further expertise in that vertical that would seem to fit with the Simpcore acquisition?

Michael McCann: Yes. there is a couple of things going on, I think, with the GCR margin. We had a pretty low point at the end of Q2 from a backlog perspective, from a GCR perspective. And we have been rebuilding Obviously, we are still pointed significantly towards owner direct concentration. But regardless, our model has some GCR that is a part of that. So it really comes down to at the end of 2025, we have finished up a lot of work. And then we have started to rebuild from a sales and backlog perspective, and that obviously affects the timing. And that is why, ultimately, it is a you know, it was 14.5% in Q2 more than anything.

I would say that is really predominantly from a timing perspective. Now I would tell you I think diversity is really important to us. You know, we are heavily weighted towards institutional, industrial, markets. Our ability to tap penetration with the data center market, helps us any number of different ways. We are I would say we are under indexed from a data center perspective. And once we can increase that percentage, I think that will help not only revenue growth, but also help margins as well too and help us absorb fixed costs.

Chris Moore: Got it. And maybe just my last 1, kind of more big picture. Just how are you looking at 2026? Is it kind of a 2026 versus 2027? Is 2026 a full reset from an EBITDA perspective, a partial reset no reset at all? Just trying to kind of understand what is happening here. How that would translate into how everybody's been thinking about 2027?

Michael McCann: Yeah. I definitely think from what we knew, we felt like we had to reset from a guidance perspective. Even though revenue is up, GP is down. And again, that is-- part of that is timing. As well as price sensitivity. So from a 2027 perspective, you know, we are looking to make sure that our model is built upon and is resilient. And I think there is 3 core things that we are looking at. Vertical market diversity, which we touched upon a little bit from a data center perspective, geographic expansion, we want to continue to acquire really good companies. And then really emphasize our operating model. How can we operate efficiently together? Through all of our locations?

So we think it is a reset. We think going into next year that we are making adjustments that we need to be really sure that we have a super resilient model as we go into next year.

Chris Moore: Got it. I appreciate it. I will leave it there. Thank you.

Operator: Tomohiko Sano with JPMorgan. Please go ahead.

Tomo Sano: Hi, good morning, everyone. Thank you for taking my questions. Could you give us more color on healthcare institutions environment, it is especially on the gaining market share versus pricing sensitivity you talked about, Mike, So how should we look at that environment and the key strategic initiatives in the back half and in 2027, please?

Michael McCann: Yeah. Absolutely. So it is still a challenged environment for sure. You know, they are still impacted by things that happen from a policy perspective in 2025. You know, we are trying I think they are trying to navigate what the new normal looks like for them. it is our job to guide them to ultimately make the right decision. So the other thing that they are also impacted is what happens is if there is data activity in the market, that causes overall construction inflation and makes the cost of what they have to do even more challenging as well too.

For us, I actually think vertical market diversity for us will not only help Limbach, but also helps from the perspective of some of our other clients as well too. So, you know, we are not looking at a dramatic change I think over time, they will be able to adapt and then we want to be there with them to adapt as well. So we spent a lot of time from you know, investing in on-site account managers, which those are spread against all of our vertical markets. As well as our customers, but it is certainly we found that model most impactful from a healthcare perspective. For us, it is a great long term market.

Sometimes, you know, it is not the market that the data center is, but it is really important for us to balance as well too. So we still really believe in it. Just helping our customers navigate kind of short term and continue to stick with them as well too.

Tomo Sano: Thank you, Mike. And on data center work beyond mix and growth opportunities, could you provide more color and details on gross margin profiles and key costs, overrun risks? And the contract structure mix, please? Thank you.

Michael McCann: Yeah. Absolutely. So as we talked about from a health care perspective, institutional customer is very cost driven. The data center cares about its time and schedule. So they will pay up for somebody who is gonna move really quickly And, in some sense, that is our opportunity as I look at really in 2027. I think the acquisition of Simpcore is really important to kind of jump-start us from a data center perspective. If we are able to provide the solutions, which is speed to market, There will be opportunities for us from a margin perspective as well too.

But that is why, again, I think Simpcore is really important to kind of use that as a jumping off point. We have made some progress around the last several quarters. We have talked about various fabrication projects. But a lot of times those projects we would be in a little bit later. Versus you know, from a professional service perspective, we are way earlier in the process in our ability to influence and use our customer solutions, I think, is going to be super impactful.

Tomo Sano: Thank you. And if I may squeeze the last 1, Mike and Simpcore, acquisitions, could you talk about more opportunities for both growth as well as the margin profiles and then how you manage the execution risk with the Pioneer integrations as well? Thank you.

Michael McCann: Okay. Yeah. So Simpcore-- you know, we have had some success with our health care program management platform. We started that organically. About 4 or 5 years ago. It took a long time. We have seen a lot of success about $3 million professional services revenue is pulled has been pulling through about $60 million of project booking. So it is big time multiple. From a pull through perspective. And we have seen our ability to influence early.

And we could have started that organically from a data center perspective, but we saw a great opportunity from a Simpcore perspective of not only getting a very solid business that does not have the execution risk that a contractor would as well as the opportunity for pull through in a very hot market. So those combination of factors were not only excited about the earnings that will get our professional services revenue, but the potential for pull-through is definitely there as well too. I think the other question was Pioneer Power. They are performing as we expected. In the prepared remarks, talked about their margin being 150 basis points improvement. When we purchased them.

So I have always pointed people to the Jake Marshall example that we have in our Investor Day. It takes time, especially the first year or 2. So it is on track. And we are looking for ways to improve and kind of following our model that we have done with the other acquisitions as well too. Thank you. I appreciate the color. Thank you.

Operator: Gerard Sweeney with ROTH Capital. Please go ahead.

Gerard Sweeney: Good morning, Mike and Jayme. Thanks for taking my call. Just wanted to dig in a little bit more with Simpcore. Wanted to understand when they are brought into a project how much visibility they have and their ability to maybe, you know, bring Limbach services into that equation. And how long would it take to sort of translate some of that professional services revenue toward into additional services for Limbach.

Michael McCann: Absolutely. So they are in very early. Sometimes they are out there from a real estate perspective of just helping the customer plan super early. Data center customers go to Simpcore. A lot of it comes down to their ability to manage the budget for them, cost controls, understanding what the right long term outcome. And a lot of times that is from doing multiple projects with the same customer as well too. So there is so many aspects of visibility we will get from this. And the 1 thing we learned in the healthcare side, what is really important is the ability to understand where value can be driven through the process, and help people purchase as well too.

So we are still-- you know, a data center, we are not where we need to be from a health care perspective. And the data center gives us insight of where we are able to add from a value train process as well too. So for us, way that we approach it is going to be very similar to health care. there is probably going to be some immediate opportunities. I think the fact that the data center is exploding right now from a demand perspective we will look at things like fabrication, procurement, and the opportunity to perform projects. After a building is completed, there is a lot of opportunity for service, maintenance, and retrofit projects as well too.

You know, so it is up to us. The opportunity is there. it is just for us basically to capitalize on, and that is ultimately gonna drive the-- it is going to drive kind of when the pull through starts as well too. But very excited about it, and we think it is the right thing to do as far as kind of being the linchpin to really kicking off our data center vertical market.

Gerard Sweeney: Is Simpcore geographically concentrated in the Texas area or do they have projects all over?

Michael McCann: So what is nice is they have presence in Dallas, Fort Worth, other parts of Texas, Atlanta, Charlotte, Virginia, Northern Virginia, Richmond area, which is nice because some of those areas are areas that we do not have presence in right now. So it allows us to get a look into a market and that may eventually be an opportunity for us from an acquisition perspective for a contractor down the line. And then of course, they are dealing with contractors, not only general contractors, but mechanical electrical contractors. So that is 1 thing that is really attractive is they get us into markets that we are not in.

And of course, the markets that are in are very good markets. So it gets us a look and we are definitely going to try to find synergies from that perspective as well too. The biggest thing for us, I mean, we can pull through work by not being in the market. We can do that from fabrication and specialty work. But it is going to give us an avenue to figure out what other geographic expansion we want to do and connect the dots and that is going to be the ultimate pull-through opportunity.

Gerard Sweeney: that is fair. I get that. And then ODR, healthcare and ODR end markets, obviously, sounded like there is some pressure on that front on spending. As well as some costs. How do you recapture that those margins? Is this a pricing game? And at some point, do the healthcare companies, have to absorb these costs.

Michael McCann: Yeah. So there is a couple things. I mean, I think they always have to absorb what is happening. And I know some of the stuff that happens is almost 12 months old, but, you know, those customers are very methodical at the end of the day. They are not going to make they are not going to completely change the way they purchase. It just takes time ultimately. For us, you know, the biggest thing for us is to help them look at things differently. And really, you know, I would say the last 12 months is very different for them as well too.

You know, how they are gonna bundle projects, how they are going to look at, you know, what across their portfolio, what, what assets or hospitals are making money and some are not. So it is really the long term planning. The other thing that helps, obviously, is if we have fixed cost absorption by going into other vertical markets, that will also help the cost as well from some of these customers as well too. So if we are very dependent on the institutional, it causes some challenges as well too. So I do not think there is a secret button or a magic, you know, it is something that is really going to change healthcare.

I think it is our ability to stick with them. Find avenues, drive value. that is what is been successful for us for the long term. And I think that is going to drive opportunities for us. And we want to stick with these customers as well too. I think that is important and we know in the long term it is going to work out.

Gerard Sweeney: Okay. I appreciate it. Thanks a lot. Thank you.

Operator: Robert Brown with Lake Street Capital. Please go ahead.

Robert Brown: Good morning. Just wanted to follow-up a little bit on the margin question about some of the things you are doing. But how long does that take to kind of cycle through? And is this something that you can see improvement in 27 or what is the duration of the margin improvement? Yes. Thanks, Robert.

Michael McCann: So there are a couple of things. Obviously, timing and that really comes back to us as, you know, the sales position that we the lack of sales that we had in the middle of last year. So that we will perform the way we have performed in the past, and we deliver. You know, we are looking forward to potential margin opportunities as we go into 2017, just based on the book of business that we have now. I think the other opportunity is diversifying ourselves into vertical markets where there is greater spend in high growth markets.

And I think when I say vertical markets, I mean vertical markets from data center or other high growth drivers, but also from a geographic expansion as well too. Not every market is treated the same at this point. So the combination of those 2 factors we are making adjustments in order to make sure that in 2027, we are looking for an increased opportunity. Okay. Thank you.

Robert Brown: And then on the Simpcore pull through in the data center market, is that something that takes projects moving quickly in that market, I understand. But how long does that take to kind of work through the system and just a sense of how Simpcore kind of works on the timing aspect?

Michael McCann: So we have, you know, we have been working-- you know, we are we are currently working with program managers that are not Limbach right now in the data center. So we have some experience. And ultimately, I think what is going to happen is we wanna make sure that we are understanding and learning their customers. And the nice thing about this is they are bringing new customers to the table as well too, which kind of is additive to some of the customers that we have had.

So, it is going to take a little bit of time but I think if we are doing our job correctly, there is gonna be an opportunity we are able to just fill a gap for them. Our ability to influence early. So we do not have an exact timing per se, But I can tell you yesterday, we have obviously, we announced that we were doing the deal. But it is-- we are going to immediately look for pull through. We are not gonna wait per se. We are probably going to be talking to people in the next few days and trying to find some opportunities as well too. So we are opportunistic about it.

Obviously, it will take a little bit of time. All right.

Robert Brown: Thank you. I will turn it over.

Operator: Brian Brophy with Stifel. Please go ahead.

Analyst: Yes, thanks. Good morning. Appreciate taking the question. You give us a sense for how fast Simpcore has been growing?

Michael McCann: So they have pretty steady from an earnings perspective. And the biggest thing for us and they have been working really in the data centers, I would tell you, the last 4 or 5 years. The challenge for them is responding to the demand. And a lot of that comes down to recruiting staff. So that is 1 thing they are excited about with us is, you know, their ability to add immediately add staff. it is not something that you know, as we talk to them through a diligence process, I mean, we would love to add people right now.

So that is been the biggest and that is, of course, the challenge when you are a smaller company is you are so busy responding to your customers that the recruiting process takes time. So that is been probably the bigger holdup to even seeing more growth. We like the fact that they were steady. But at the same time, we are gonna be immediately looking for staff to add their team to drive good quality, high gross margin revenue. Understood. that is helpful. And then, circling back to GCR gross margins, for a minute. Obviously, it was a little bit of disappointment.

But were there 1 or 2 projects in particular that drove the lower gross margin, or is it more broad based than that? Thanks. It really was not execution it is project starting more than anything. So, I mean, we have had pretty steady execution. Through the first half of the year. it is more just project starting. As I touched upon before, our GCR backlog was $99 million. It was only $99 million at the end of Q3 and we have built that back up to 200 basically double at this point. And just project starting ultimately more than anything. So again, we are we are anticipating our opportunity within GCR margins.

For us, it is really a timing perspective. We perform the way we performed in the past. We think there is a lot of opportunity. Think for 2026, the challenge is going to be what happens if that opportunity shows up into 2027. And that is 1 of the reasons we kind of adjusted our expectations and our guidance to make sure to reflect that. And timing could be a little bit of a challenge, but definitely not an execution issue. Understood. And then, I guess, bigger picture with GCR, now back to more of a growth mode, how are you thinking about the long term mix between the 2 segments?

Yes, we updated our guidance to be 70 from 75% to 80% to 70% to 80%. We always look at our model as more owner direct driven. I think we are just, you know, we are trying to find the right mix. Balance. And I think that is the biggest thing as we go forward. And I think that affects obviously what verticals we are talking to. So just looking for that mixed stabilization. And that is why we felt like going from, you know, 75 to 80 to 70 is not a huge change, but that is the right kind of, mix at this point. Understood. Appreciate it. Thank you.

Operator: A follow-up from Christopher Moore with CJS Securities. Please go ahead.

Chris Moore: Yes. Just 1 question on bookings. It sounds like 3 straight quarters of good bookings. I know that calendar Q3 last year was the challenge and that is what created the soft Q1 2026. You are only a month into Q3 so far. Any thoughts in terms of July? And when did things kind of go soft last year in Q3 Was it later in the quarter? Or just trying to get a sense of visibility for Q3 bookings?

Michael McCann: Yes. I think Q3 last year was a little bit different than what we have seen in the past. And that was really a culmination of ultimately policies hitting higher ed, health care, even from a manufacturing standpoint as well too. So those factors kind of led into our customers kind of into this compression mode as they really entered Q3. So it was kind of a unique period of time. We have looked at the last 3 quarters of kind of getting to that steady pace and that is what we are looking for kind of as we close out the year.

Chris Moore: Appreciate it. I will leave it there. Thank you.

Operator: We have no further questions. I will turn the call back over to Mike McCann for closing comments.

Michael McCann: Our conviction in the long term direction of Limbach has not changed. We have reset expectations to reflect where the business stands today. And are focused on executing from here. We have a clear road map that will build an even more resilient business centered around vertical diversification, geographic expansion, and an integrated operating model. These 3 strategic objectives will build enterprise scale that will accelerate growth, expand margins and drive additional shareholder value. Thank you, everyone, for your interest in Limbach.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.