Limbach Holdings Inc (LMB) 2017 Q2 法說會逐字稿

Greetings, and welcome to the Limbach Holdings Second Quarter 2017 Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Jeremy Hellman of The Equity Group.

Thank you very much, and good morning, everyone. Yesterday, the company issued the announcement of Limbach Holdings 2017 Second Quarter Results. Certain statements contained herein may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and it is our intent that any such statements be protected by the safe harbor created thereby.

Except for historical information, the matters set forth herein including, but not limited to, any projections of revenues, earnings or other financial items, any statements concerning our plans, strategies, objectives for future operations and any statements regarding future economic conditions or performance are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and assumptions, and are subject to certain risks and uncertainties. Although we believe that the expectations, estimates and assumptions reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Important factors that could cause our actual results to differ materially from estimates or projections contained in forward-looking statements are set forth in the Risk Factors section and elsewhere in the reports we have filed with the Securities and Exchange Commission, including that unfavorable global economic conditions may adversely impact our business, our backlog may not be fully realizable as revenue and our expenses may be higher than anticipated. We do not intend nor undertake any obligation to update any forward-looking statement.

With that, I'd like to turn the call over to Charlie Bacon, CEO of Limbach Holdings. Please go ahead, Charlie.

Thank you, Jeremy, and welcome, everyone, to the call. I hope everybody is having a great summer. Joining me today is our Chief Financial Officer, John Jordan.

I'll start with a review of some of the highlights for the quarter before turning it over to John for his review of the financials, and then I'll return with a few final comments before we open it up for your questions.

We had a really great second quarter, guys, punctuated by the best first half of the year for sales in our history. Those sales led to a really nice uptick in our backlog, which ended up the quarter at $413.8 million. We have some additional good news. The backlog also has booked gross margins up by 10% when we're comparing it to June 30, '16, an improving trend we expect to continue. We also have commitments for another $72 million in new contracts that will be booked in the coming quarters. Between booked and committed contracts, construction for this year stands at $335 million of sales, which is just a terrific figure at this point in the year.

Relative to the end of first quarter, our backlog is up 23.7%. This sets us up for -- very nicely for a second half of this year and provides strong visibility on our growth into 2018. I want to reinforce to all of you, this is record backlog for the company. While reporting our first quarter results, we noted a number of design systems, design-build projects that had been awarded just prior to the call that we last had, but we were still awaiting firm construction values. I'm pleased to say that the majority of these projects have moved forward as expected and are now in backlog. The remaining work to be booked is part of the $72 million I noted earlier.

On the Service side of the business, a key forward indicator is the maintenance contract base. In the first 6 months of the year, our base, net of cancellations, grew by 10% to $12.2 million. We had a very strong first half.

Turning on to reported revenues, both the Construction and Service segments recorded strong operating results with growth in the Construction segment that continues to outpace the nonresidential construction sector, as was the case in last quarter. Our Construction segment grew 24.4% from the prior year, while Service grew 11.9%. Our resulting aggregate growth rate was 21.9%. With the backlog growth I just noted, we are in a really strong position for the company's growth to continue.

We continue to see that our engineering group, Limbach Engineering and Design Services or LEDS, is a strong complement to our sales efforts and a clear differentiator. In many of our markets, their engineering work, well, quite frankly, it's becoming more of a disruptor to the marketplace. And I'm hearing comments from our customer base constantly about the value that we're creating.

Our client experiences that value -- with the value we create moves us to a first-choice position. While the upfront effort around design is a key starting point to securing new business, we still must deliver the project on time, within the budgets we establish and at the defined quality level to reach the pole position of first choice. An example of our recently completed University Village project at the University of Southern California for a major general contractor, Hathaway Dinwiddie. Since the large-scale project completed earlier this year, Hathaway Dinwiddie has awarded us 2 new major projects in the Los Angeles area. I should also note, we secured the maintenance contracts for the University Village buildings we recently completed. I think it's a great example of first choice, the vision we are driving to deliver here at Limbach. We won over the building owner and general contractor. These will be long-term growing relationships with both customers. Another example is within our New England business. John Moriarty & Associates is a major regional construction manager in the greater New England region. Prior 2016, we did some work for the firm but nothing major. In 2016, I actually went to a meeting, met with John Moriarty, and we introduced LEDS, which led to the award of a major project in Downtown Boston. We executed well in every aspect on that contract, and completed the project earlier this year. Because of the strong outcome, in Q2, they awarded Limbach 3 major projects in Boston, another example of moving to a first-choice pole position. We see this story being repeated time and time again.

We also secured another major project with Disney in Orlando, with one of our key national customers. Due to the signing of a confidentiality statement, we are restricted on sharing any information. The real point here is it's another example of first choice, both with the general contractor and with a substantial building owner that is going to continue spend on their capital projects to expand and improve their theme parks.

A note about our largest contract, the Red Wings Arena, where we are constructing the HVAC and plumbing systems, I recently walked the project and touched based with our customer. All is going well, and we are entering the phase where we can earn the performance bonuses that we previously noted to you on earlier calls. It's still early and there are no firm commitments, but we see visibility and the potential to earn some and possibly all of the bonuses on this cost-plus contract.

I should also note within our Construction segment, we are seeing a further ramp-up of our modular unit applications. Just about all of our healthcare projects, the acute care facilities that we're building, are now implementing modular solutions. This is all part of our lean management practices. Modular design and applications reduce our risks and drive improved productivity, which enhances our margins. I'm quite excited about our lean applications throughout the business, and actually a highlight for the company, our Senior Vice President of Lean was recently nominated to be the Chairman of the 2018 Lean Congress Institute (sic) [Lean Construction Institute Annual Congress], where 3,000 to 4,000 people will attend, and Limbach's name will be prominently displayed in front of our customer base, both building owners and general contractors, as the premier contractor that is employing lean in all that we do. So we're very excited that, that's happened, and we're excited our executive has reached that prominence in the industry.

On our pipeline of sales opportunities, it's never been stronger. We're tracking in Salesforce now $3.1 billion of opportunities. That's up from $2.4 billion that I reported on last call. Within this total, there are 57 large-scale projects, totaling just over $1.5 billion in mechanical plumbing value, this does not include any significant electrical yet, which is part of our strategy going forward. But we're excited to see that quantity of opportunities in front of us. Of those 57 large-scale projects, 11 are currently being pursued, and of those 11, we expect 5 to be decided upon before year's end. For clarification, we do not pursue all projects in our pipeline. This robust pipeline allows us to be more selective in what we pursue.

I'll comment on the midterm market conditions after John provides detailed financial -- our detailed financial report. Before I turn this over to John to go through the financial highlights, I want to comment on our results and our path forward. Our results in the quarter were negatively impacted by certain nonrecurring 2016 audit expenses, along with a few other initiatives that were nonrecurring. The associated expenses totaled approximately $600,000, and impacted EPS by $0.05 a share.

The actual business operations exceeded our business plan for both the quarter and year-to-date, so our business units are performing well and operating margins are improving. The expenses I'm referring to were at corporate. Going forward, these expenses are behind us. Let me also stress that we've taken a deep dive into our expenses to confirm there'll be no further impact by these initiatives for the remainder of 2017.

I also want to note the company is starting its 3-year planning work next week. That's our cycle between 2018 and 2020. Where we stand with backlog gives us a good view of 2018, and we're confident our growth will continue through 2018.

A special initiative we are taking on in this year's planning cycle is with our corporate departments. We're going to take on a zero-baseline approach for each department. Taking into account our baseline needs and incorporating the innovation we're employing throughout the company, we want to make sure we're profitability deploying our SG&A dollars to maximize the bottom line. We conduct this process every few years. In light of the expenses we needed to add for the public company move, it's a proper time to conduct the exercise within the planning process.

I'll return for closing remarks with my views on the market as well as our M&A efforts that are starting to produce some meaningful opportunities, but at this point, let me turn this over to John Jordan, our Chief Financial Officer.

Thank you, Charlie. Before getting into details, I just want to remind everyone to please see our 10-Q for a full breakdown of our results, along with the supplemental tables included in our press release.

As Charlie noted, second quarter 2017 revenues increased 21.9% to $117.8 million compared to $96.6 million in the same quarter last year. The Construction segment led our growth, gaining 24.4% versus the prior year, while Service grew 11.9%. Within the Construction segment, our Michigan and Mid-Atlantic branches were the top performers. Those 2 branches also contributed significantly to Service segment growth with the Southern California branch also making notable contribution. Given the strong growth in the Construction segment, our business mix skewed more toward that segment than in recent quarters. Within the quarter, Construction accounted for 81.7% of revenues, with Service at 18.3%. Our splits will bounce around quarter-to-quarter given the nature of our Construction segment work and the growing trend of our Service offerings. We remain committed to our 25-75 target over the next several years.

At the end of the second quarter 2017, Limbach had an aggregate backlog of $513.8 million. We expect approximately 47% of our current backlog to be booked as revenue in 2017. We now stand at 2017 plan coverage of 98%, including Construction and Service, and looking ahead to 2018, we are at coverage of about 39%.

Our gross margin for the second quarter was 13.2%, up from 12% in the first quarter. Excluding the Red Wings project, the second quarter figure was up 50 basis points to 13.7% versus the 12.7% for the first quarter. So gross margin is certainly moving in the right direction.

As a percentage of total revenue, second quarter 2017 SG&A accounted for 10.9% compared to 10.6% in the second quarter of 2016. On a dollar basis, our SG&A expense declined $1.8 million from $14.6 million in the first quarter of 2017 to $12.8 million, as our nonrecurring expenses and public company-related consulting expenses dropped.

Our going-forward run rate of quarterly SG&A is expected to be approximately $12 million to $12.5 million. Significantly, we reduced our total debt by $9 million in the second quarter. Recall that last quarter, we drew $6 million on our revolver, as we had some larger outlays, including annual bonus payments to all Limbach's staff, rewarding the group for the strong results in 2016. During the second quarter, we paid off that revolver as planned. We also paid down $2.6 million on the term loan during the quarter, $1.9 million more than required to continue to delever the business. Subsequent to quarter-end, we continued to clean up and simplify the balance sheet by reducing the amount of the company's preferred stock outstanding. We redeemed 120,000 shares of preferred stock for approximately $4 million, inclusive of accrued dividends. Those shares carried an 8% dividend that ultimately adjusts up to 12%. As a result, redeeming those shares was an accretive transaction for us. In this transaction, we negotiated a favorable option to redeem the balance of the preferred. We are reviewing our options to act upon this opportunity.

Our annual effective tax rate is currently estimated to be between 39% and 40%. Our diluted share count at quarter-end was 7.8 million shares outstanding and 7.1 million warrants, which can convert into 4.6 million shares. As Charlie mentioned, we have begun the 2018 to 2020 planning process, which includes a project-based backlog burn plan process and a zero-baseline approach to corporate SG&A. This bottoms-up approach to branch plan development and a reset and review of all corporate SG&A will allow us to maximize gross margin at the branch level, and more effectively leverage the SG&A going forward.

With that, I'll turn things back over to Charlie to share some closing comments.

Thanks, John. I'd like to provide some comments on market conditions for the midterm and an update on our M&A initiative. I'm also going to comment about human capital.

Our core markets of healthcare, higher education, major universities, sports and entertainment, transportation, which is namely passenger terminals, along with research and development, appear to be very healthy for the near term. There are a number of supporting industry economic reports along with supporting commentary from our customers. These markets will remain strong for this period. This will provide solid sales opportunities for the Construction segment through the majority of 2018, providing backlog for 2019 and 2020 revenue.

We remain cautiously optimistic that both tax reform and major -- a new major infrastructure bill will be passed by Congress. With that stated, my comments here for the near to midterm do not anticipate bills being passed. Should they pass, they will have further positive impact for Limbach and market growth beyond 2020. Plus, as our customers experience the Limbach differentiation and then referring to it as a disruptor now based on what I'm hearing from them, we expect to continue to outpace the market.

Concerning human capital and a concern within the industry, we'll remain focused on not only being the first-choice provider to our customers, but also a first-choice employer. While we've seen a tightening labor market, our brand is strong, helping us to retain top talent. Also, prospective employees know we take care of people, and we are a great employer, and I hear that all the time, especially in a recent employee survey that we just completed. This makes recruiting much easier.

I also want to note that we have expanded our investment in training and development. With all the new people that have joined the company, and that we expect to join the company to facilitate growth over the next several years, and that includes both organic as well as new staff through acquisitions. We have moved to build out our new national training center at our Limbach Engineering and Design offices in Downtown Orlando. This is a perfect setting for the training activities. While the training is going on within the facility, they will also learn firsthand about our key differentiator, our disruptor, LEDS. It's mission critical that as people join Limbach, they get the proper training around what we refer to as the Limbach Way. An example would be our Limbach Project Manager Certification Program, which is well regarded internally as well as externally.

Let me move on to the M&A update. M&A remains a key focus for us. As I've noted in the past, we have strict criteria when it comes to acquisitions, including both quantitative and qualitative elements. We insist that any deal must make sense financially, tie into our strategic direction and must fit culturally. Making sure prospective targets check all these boxes requires time. We are confident that once we can check all these boxes with the right acquisition prospects, we will create meaningful value for our shareholders and our customers.

We currently have several deals under consideration at varying degrees of review. We're pleased to announce these opportunities are meeting all our criteria. And let me just define for you what an ideal opportunity would be for us. It'd be a new trade offering, like electrical, with scale to complement our HVAC and plumbing services, say, to pursue a large hospital. We're also looking for them to have a strong service component so that we can cross-sell services. In other words, they have electrical service customers, they can introduce us to their customers so we can sell mechanical and vice versa, that's called cross-selling.

And finally, the other element would be a new geography. Entering some region that we are not in, but in a surrounding area of our existing footprint. And the last piece would be adding on our electrical -- excuse me, our engineering component, LEDS, because the majority of the contractors out there that we're talking to don't have in-house engineering, and they were amazed at what we have assembled here with LEDS. So one plus one, they are saying it clear, it's going to add up to 4 or 5, when you start looking at all of these different components, and that's allowing the door to be opened up fairly easily to companies that we know and respect that we're talking to. They like the idea of joining the Limbach family because of all these other attributes that Limbach has.

I will also want to reinforce to you we are not pursuing M&A targets that are in a process. We are seeing some of those books come across our table, but actually, we're rifle shooting with contractors that we know and respect. And I can report to all of you that I am yet to be turned down for a meeting, and in a number of instances, they've come back to us and they've said, "You know what, the timing is right, let's engage in conversation." So it is ramping up. I also want to add that to drive this effort more aggressively, we've recruited a known, seasoned M&A professional that will be joining the management team. This executive will lead our M&A work and report directly to me. This anticipated hire is very important.

Our 2025 10-year plan, established in 2015, is to build out Limbach into a $2.1-billion business. Approximately 45% of this goal is to be achieved through smart, surgical acquisitions of electrical contractors, tuck-in local contractors to enhance our regional offerings, service-only providers as well as entering select, growing new geographies. We may also look at entering new market sectors where we envision strong growth. This executive resource will be charged with working closely with John and myself to deliver the M&A growth goal. A detailed announcement will be made later in August.

I'll close with a word on our guidance. As you've seen in our press release, we are maintaining our guidance for revenues of $460 million to $480 million with adjusted EBITDA of $18 million to $20 million. Our quarterly reforce -- reforecast conducted in June reinforced our ability to deliver on this guidance and remain confident in achieving our guidance for the year.

Operator, let's open it up for questions.

(Operator Instructions) Our first question today is coming from Bill Newby from D.A. Davidson.

Just a couple of questions on the Service segment. Charlie, was there anything there that kind of -- that drove margins down? You're a little bit below what we had modeled. Was there anything on the SG&A line that was kind of inflating that in the quarter?

No, that's -- it's really not the SG&A line, although we continue to invest to expand our SSRs or the service sales representatives basically to knock on more doors. But we are pursuing more owner-direct work on projects that are slightly larger than normally we would expect. A lot of our Service projects can be $10,000 of value, and that's sole source, you go in and do it. But some of these larger projects, we're replacing, say, all the air handlers on the top of a roof of a building. The owner may not just sole-source that to us, and as a result, we get into a competitive process. So the margins get somewhat reduced, and you can see margins here, where we like to see project margins 25% to 35%, might go as low as 15%. So that has a bit of a drag on the Service net. But we see that as a good opportunity for 2 reasons: one, we don't want anybody else getting into the building where we're already located; and two, if it's a new opportunity where we actually don't have a maintenance contract, it cracks the door for us. Get the project, execute the work, the door is open, and then we go to sell the maintenance agreement, which gets us entitled with the building owner.

Okay, that's helpful. And then, as it relates to backlog, could you just talk about -- a little bit more about, I guess, the relationship that you see between -- in bookings in Construction and kind of the flow-through or pull-through into Service. I mean, I guess I'm -- I see a nice jump in the Construction backlog, and I assume that only means good things for the Service going forward. Does that -- seeing a spike like that kind of give you confidence in that runway for Service as you move through the rest of the year and into '18?

Yes, when you step back and look at our Service expansion, I commented in the past that in 2012, we initiated what we called the Rapid Service Expansion Program and that took root in '13. We made a bunch of investment in people. We started knocking on doors of buildings we did not build. So our maintenance base is growing because of that. But the other thing we did -- and actually, we did this about 1.5 years ago. We brought all of our sales people together, both Construction and Service, had a major sales conference, and the theme of the conference was cross-selling. How do we make sure, guys, that we leverage the relationships that we have, be it, we're finishing a construction project, make sure in a timely way, we get the service sales representatives in, because it is a different sell process. We're typically working for the general contractor. The owner is noticing us, but it still takes that penetration to get into the owner to sell that maintenance contract. So we're seeing better uptick in that and then vice versa, where we have, say, a strict owner -- building owner relationship. And they have another capital program coming up, putting up a new building, in addition, what have you, to have the Service guys bring in the construction experts to start nurturing that Construction sale. So the cross-selling is really picking up in -- I noted in my comments, the USC project. The University Village project is a huge, huge project. I think it was the largest USC project in decades. And we're able to, early on, start selling USC's facilities group on us providing the maintenance to all the HVAC systems we installed and we picked up all the buildings. And I -- because there's multitude of buildings, not just one building. And I think that's a great example, and we have -- that story is being replicated time and time again, Bill. So it's pretty exciting, and I think it is very meaningful that the Construction backlog is taking off, having better relationships with the generals and construction managers, but we're also getting in further and deeper with the end-user, the building owner, so it's all very positive.

(Operator Instructions) Our next question is coming from Steve Dyer from Craig-Hallum Capital Group.

Ryan on for Steve. As it relates to the performance bonuses associated with the Red Wings Arena, when do you expect that you could potentially recognize those?

Yes. The project is wrapping up. They're going to be playing hockey there pretty soon. I think there's a big concert coming up with, I forgot his name right now, but anyways, a big concert coming up. So right now, we're in great shape. When I spoke to, via e-mail, Barton Malow, its President, he was quite thankful of the performance. I've got to share with everybody on the call, if you think about all the bathroom facilities in that facility plus all the other water that flows in and we did the plumbing. A couple of weeks ago, we had to do what is referred to as the big flush. So every device in the building had to be flushed at the same time or the faucets opened. And they had to make sure everything worked properly and that was actually one of the bonus criteria that it had to work. And I'm pleased to report we passed that with flying colors. So the first bonus, while not formally approved, we passed the milestone. The balance has to do with budget and scheduled performance, and we are working hard not only with our own work but also helping the general contractor to finish anything else we can help them with. So it's a collective bonus, so everybody has to get there. So it's not totally in our ability to make sure we secure it, but we're working hard at it. As far as when we'll be able to recognize that, that will be a combination of Q3 and Q4.

Great. And then with the big increase in backlog in the sales pipeline, what has driven that improvement? I know you talked about some of that in your prepared remarks, but could you bifurcate that between improved industry and macro versus market share gains versus expanded offerings, et cetera?

Well, start with just market conditions. We just see kind of a very robust pipeline. And I'd have to go on further to say, beyond just the market conditions, the relationships that we're establishing with building owners, we're having some terrific discussions with Hospital Corporation of America, you've heard me comment about them in the past. They awarded us a number of projects in Florida recently that are in backlog, and they have a lot more coming up. We're also working with United Health Systems, where they see what we're doing with other major hospital chains. They're saying, "Why don't you come on over here and talk to us," and we've had some great meetings with them. And all of a sudden, they laid out for us their capital program. And -- so we're deciding how to approach those opportunities. But as we continue to market, not only to general contractors and construction managers, but we're penetrating more with the building owners. We're seeing more opportunities earlier. So the growth in the pipeline, it's a combination, I think, of things. Market improvement, it's remained strong in our sectors, we don't see any contraction at all. We are not in office buildings. We don't build condos. We don't do any of that. We build more of the higher-tech facilities. That's not letting up. And then, you take into account Limbach's strategy of being first choice and really working our customer relationships aggressively, it's leading to better identification of opportunities. And I also think the owners, they continue to love what we do with the engineering component, I don't want to exclude the GCs and CMs, but the owners ultimately get the value because of the reduced expenses, and I think they're just welcoming us, and again, introducing us to opportunities much earlier than we've seen in the past.

Great. And then, Charlie, you talked about M&A opportunities, and help us understand the capital allocation priorities over the next couple quarters, whether that's paying down debt, redeeming the preferred stock, the acquisitions you were talking about, just kind of next couple of quarters and the next couple of years?

Sure. Funding our growth as far as organically, we're in great shape, and we fund that without any more needs for additional capital. We use our revolving credit line to fund some of that growth, peaks and valleys, but that's going extremely well. From the standpoint of the preferred, as John mentioned, we negotiated an option to take out the rest of the preferred. We are reviewing different vehicles to get that done. And then on the M&A front, the conversations with the sellers, it's been pretty interesting. In previous calls, I reported it'll be a combination of cash, stock and earnout. What's interesting and what's developing is the interest in seller notes. And so we're considering that, too, in some of these transactions we're looking at. In the end, when you look at everything we've got going, I'm not backing off organic, but that's self-funded, so I'm not concerned about that. But when we look at M&A or the preferred, we're going to come up with the smartest transaction we can think of, it's going to be accretive. John is working this very smartly. We're working with different supporting groups out there to give us advice and counsel on moves we should make, and we're having constant discussions about that. So we're pretty pumped up that we can, quite frankly, do all 3: Look at our balance sheet, improve it; keep growing organically, the way we have been; and then finally, get these deals done and get some larger transactions over the finish line for M&A.

Great. And then one final one for me with that. 47% of the backlog is expected to be converted in 2017 and then you add that with the first half results, and I get somewhere at the top end of the revenue guidance range and without any incremental new awards. Is the reiteration of guidance out of conservatism or am I missing something there?

Ryan, I want to beat expectations. So we are -- we looked at our forecast that we did in June with all that backlog -- excuse me, new sales that came in, in early May. And we're really pleased we're at 97% coverage for the year. So we feel really good about where we're going to land, in that range. And the thing that will be interesting to see, sales, the pipeline is not turned off by any means. So anything that goes past 100% will be accretive to bottom line. So we're pretty excited at where we stand right now. I think the impact will be determined, not so much on new major awards, because big jobs that we sell today, really creates backlog for '18 and '19 into '20. The difference will be in what we refer to as special projects, and of course, our Service business. Special projects tend to be quick-hitting, $1 million, $2 million deals, that we propose on them, and they say go. So now that's captured already in our business plan and our forecast. But the question is, do they outperform what they've already told us? So our guys tend to be conservative. And of course, John, when he wraps up the numbers with our COO and presents them to myself and the board, they continue that conservative view. But there is opportunity there. But at this point, we're going to hold our guidance that we previously stated. I hope that gives you enough color, Ryan, on kind of what we're looking at.

(Operator Instructions) We've reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments.

Folks, I want to thank you for joining us. We're excited about the prospects in terms of what we have secured in backlog, how we see the rest of '17 playing out and how the growth for '18 is starting to develop nicely in terms of what we have in backlog as well as that maintenance base growing. I look at the M&A opportunities that we're looking at, I'm pretty pumped up about those opportunities. And we're going to work hard, but we're also going to be working very carefully to make sure we get the proper deal signed up and then closed. So that's going to take some time, and I think that's the proper thing to do. For those of you who know me, I run a conservative business. I like to walk before we run and make sure we've got our bases covered. So in any sort of M&A transaction, I want to make sure we cover our bases well, and that management and our Board of Directors feels absolutely good about the deals that we're looking at. So more to follow on that, but between the organic growth and the M&A opportunities, and of course, our strong brand, Limbach is continuing down its path that it said it would do, and we remain on track with our plan. Thank you for your time this morning, and if you have any further questions, please reach out to us. Thank you.

Thank you. That does conclude today's teleconference. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.