Greetings. Welcome to Limbach Holdings' fourth quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please press star one to enter the question queue. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Jeremy Hellman of The Equity Group. Thank you. You may begin. Thank you very much, and good morning, everyone. Yesterday, Limbach Holdings announced its fourth quarter and full year 2021 results and filed its Form 10-K for the fiscal year ended December 31, 2021. During this call, the company will be reviewing those results and providing an update on current market conditions. Today's discussion may contain forward-looking statements and actual results may differ from any forecast, projections or similar statements made during the earnings call. Listeners are reminded to review the company's annual report on Form 10-K and quarterly reports on Form 10-Q for risk factors that may cause the actual results to differ from forward-looking statements made during the earnings call. With that, I'll turn the call over to Charlie Bacon, the President and Chief Executive Officer of Limbach Holdings. Good morning, everyone, and thanks for joining us. Joining me today is our Chief Financial Officer, Jayme Brooks, our Chief Operating Officer, Mike McCann, and our Acquisition and Capital Markets Executive Vice President, Matthew Katz. We closed out 2021 with a strong fourth quarter, despite the ongoing challenges of operating through a pandemic and dealing with acute supply chain issues that are impacting our industry. Our fourth quarter results built on the excellent third quarter we reported in November and continue to demonstrate the successful execution of the strategy we've laid out for our stakeholders over the last two years. With the year now complete, we can report that we met financial guidance we presented last May for both consolidated revenue and Adjusted EBITDA. Mike and Jayme will discuss our financial results in more detail, but for now, I'd like to point out a few financial highlights from the fourth quarter. ODR revenue grew by 10.6% compared to the prior year quarter, and ODR backlog grew by 92.5% with year-on-year sales up over 25%. ODR gross margin was 28.5% above our modeling range of 25%-28%. GCR gross margin was 16.4%, well above our modeling range of 10.5%-11.5%. Our consolidated gross margin was 20.1%. Ultimately, our focus on growing the ODR business while concurrently rationalizing the GCR business to focus on higher-margin work is all about driving bottom-line profitability. Our segment results bear this out as GCR segment revenues declined 20.6% for the full year, yet gross profit improved by approximately $300,000. As we've said previously, over the near term, we're prepared to trade lower GCR revenue for higher GCR gross profit dollars, and that's what we saw in the fourth quarter. Fourth quarter net income of $4.3 million set another company record, as did Adjusted EBITDA of $9.5 million for the quarter. Full year Adjusted EBITDA was $23.3 million, which fell within guidance despite being impacted by both supply chain and employee quarantines. The impact of the pandemic on our employees and their ability to work started improving in February, but supply chain issues are persisting, and Mike will comment later on our actions to combat the industry-wide problem. Our ODR segment continues to focus on growth and to contribute a larger share of our total revenue, helping improve consolidated gross margin while also tempering the overall risk profile of the business. The GCR segment also continues to perform with the focus on bottom-line profitability, delivering the intended results. I'm extremely proud of everyone's hard work at the company as it directly contributed to the company's success. From the craft workers and service technicians to the branch and corporate leadership teams, we delivered on our financial plan and achieved many of last year's strategic initiatives despite the ongoing headwinds of the pandemic. To recap the year, we delivered another strong safety year with several units having zero incidents. From the field and in the office, we keep pushing the safety and wellness agenda, and our employees and their families greatly appreciate it. We improved margins across the board as previously stated. We refinanced our debt, greatly reducing our cost of debt capital. We commenced our acquisition strategy and executed our first acquisition in December. This strategic acquisition allows us to expand into the industrial and manufacturing sectors and moved us into a new geographic region in Tennessee and surrounding southern states. The acquisition also provides us with access to a sophisticated prefabrication capability in our ODR customer base that features strong recurring revenue. We resolved one of our major claims, which Jayme will comment on later. We staffed back up in 2021 after cutbacks in 2020 due to the uncertainties from the pandemic. These investments support the transformational ODR growth strategy. We also started a new offering, program management services, which are specifically focused on our healthcare market sector, along with a new office in Nashville, the nexus of the for-profit healthcare industry. While we had a number of strong results from some of our business units, one fell short of expectations. We addressed the underperforming unit, and Mike will comment later on those actions. With that, I'll hand this off to Jayme. Thanks, Charlie. Our earnings press release and our Form 10-K contain a detailed review of our financials. With that in mind, I will focus my discussion on some key areas. I'll start with gross margins. During the fourth quarter, we realized an ODR margin of 28.5%, which was slightly above the 25%-28% range we think is appropriate for modeling purposes. Gross margin was down 130 basis points sequentially from the third quarter, and we attribute that to project and service mix. As noted on prior calls, it has been our expectation that ODR margins would revert to the lower end of the range as the business mix within the ODR segment shifts toward a greater contribution from mid-size and large ODR projects. Those projects carry comparatively lower margins with maintenance contracts and time and material work. GCR margin was 16.4% in the fourth quarter and 13% for the full year, which is well ahead of the 10.5%-11.5% range we have previously discussed. The GCR gross margin in Q4 should not be extrapolated out as the quarter benefited from an ideal mix of project cycle timing and the positive impact of a disputed claim that settled for $1.3 million above the amount that was carried on the books, resulting in a write-up. Within our GCR segment, we have referenced in the past that we have disputed claims on several projects where we incurred delays and financial impacts due to others. We continue to aggressively pursue the other outstanding disputes, and the timing of dispute resolution on these claims is always a challenge. However, on a positive note, we recorded no new significant disputed claims in 2021. Gross margin results for the full year were also positively impacted by our continued focus on project selection and the emphasis on profitability, yielding more consistent performance. As such, our business continues to be best evaluated over a 12-month period or longer. Our current thinking is that a gross margin range of 11%-12% represents a conservative starting point for modeling in the GCR segment. Our SG&A expense for the fourth quarter was $18.8 million and $71.4 million for the fiscal year, or 14.6% of revenue. Full year SG&A increased $7.8 million from the prior year, due primarily to increases in stock compensation, rent expense, professional fees, and travel and entertainment expense, consistent with resuming our normal business operations. The increase was also due to staffing back up critical functions that were cut at the height of the pandemic. This includes marketing, training, and other administrative functions. We also raised the bar in human resources in 2021 by recruiting a top-tier HR executive to support the critical function of human capital, which is in short supply. We also incurred professional fees in 2021 associated with the 404(b) SOX compliance and the acquisition of Jake Marshall in the fourth quarter. For modeling purposes, keeping SG&A as a percentage of revenue around the same level is a reasonable way to look at it while we continue to grow our ODR segment. Turning to the balance sheet and cash flow. At December 31st, our balance sheets continued to be strong. We ended the year with cash of $14.5 million and reduced our total outstanding debt amount by $5.4 million from 2020. We also had an additional borrowing capacity of $21.6 million through our line of credit. Total cash balances for the year decreased $27.7 million, of which $24.2 million was from the usage of cash in operating activities. Operating activities for the fourth quarter consumed $7.5 million of cash. If you recall, $3.2 million of that was related to the December 31st cash payment of half of the deferred payroll taxes from the CARES Act that was signed back in 2020. We will also be required to pay the remaining half of the deferred payroll taxes by December 31st, 2022. Another large driver for the fourth quarter cash usage was the increase in our net underbilling position. As we discussed on the Q3 call, the timing of project life cycles and the mix of project size versus the ODR and GCR impacts cash in both a positive and negative way, depending on where the projects are in their life cycle. At the end of 2020, we had an overbilled balance of $46 million, which had a very positive impact on cash at that time. At the end of 2021, we had an overbilled balance of $26.3 million. The reduction in the overbilled position during 2021 was the result of us being able to bill ahead with our customers for work that had yet to be performed at the end of 2020. During 2021, we incurred costs associated with these projects. Since we already billed and received cash for those costs in the prior period, these costs are a direct reduction of cash in the period that the work was performed and expenses were paid. As a result of these overbillings coming down in 2021, our cash was reduced by $19.7 million. As we shift our business to ODR work and smaller project work, we don't expect to return to the higher overbill levels as experienced in 2020. However, we continue to stress the importance of cash culture within our organization and, when possible, try to negotiate favorable billing terms with our customers. Additionally, our cash is also impacted by our under billings. We had under billings of $31.9 million at the end of 2020, and $47.4 million at the end of 2021. This increase in under billing position is again impacted by the timing of project life cycles. A large portion of the increase in our under billings was the result of the lag time it takes to convert claims and unapproved change order work that we have incurred costs on into billings. As a result of this timing and the increase in under billings, we used cash of $15.5 million in 2021. We expect majority of our claims and unapproved change orders to convert to billings within one year. However, those that require some form of dispute resolution may delay the timing of the conversion beyond one year. We believe this lag time is standard practice in construction, and is impacted by various factors and will continue to fluctuate. Cash from financing activities provided net cash of $15.9 million. This included the equity raise in February 2021 that provided $22.8 million, and that was offset by the pay down of $5.4 million of our total debt. While cash from investing activities used cash of $19.3 million, the usage was primarily due to the acquisition of Jake Marshall in the fourth quarter. The Jake Marshall acquisition was funded by $10 million of our own cash on hand and $10 million of term loan borrowings in the fourth quarter. I'll now pass the call to Mike. Thanks, Jayme, and good morning. First, I wanna acknowledge all the Limbach employees for their outstanding work during the fourth quarter and all of last year. We set ambitious goals, both financially and strategically, and we accomplished the majority of those. I'm very proud of our team members. Supply chain issues continue to be at the forefront of many people's minds, so I wanna provide some color on how we're reacting to those issues. Our primary challenge is with equipment deliveries. In the ODR segment, much of our work consists of installing equipment like chillers and air handlers. Lead times for chillers have nearly doubled compared to what they were pre-pandemic. In addition to extended lead times, there's also been an increase in missed delivery schedules. Scheduling adjustments due to unforeseen delays in equipment deliveries results in reduced efficiency and costs, and added costs. In talking with our suppliers and manufacturers, we don't expect relief on production and delivery times until late 2022 and into early 2023. We're responding to these market conditions by adding in varying levels of contingency into our scheduling. Given the reality we're seeing in the field, it makes sense to expect and plan for these disruptions, which we expect to slowly resolve over the course of the year. We are also urging our customers to make their equipment selection decisions as quickly as possible, and where necessary, we're supporting customers in identifying and evaluating equipment alternatives. When I look at the ongoing impacts of this, I see revenue shifting from the first half to the second half of the year. One interesting benefit we've realized from the supply chain issues is that our time and material services have experienced a 44% increase year-over-year. That trend seems to be continuing into Q1 of 2022. Because new equipment isn't immediately available, owners are investing in their existing older equipment. That's not always a long-term solution. Old equipment ultimately fails, and that supports emergency repair and unplanned work. 2021 was our best year yet for preventative maintenance contract sales. We added sales resources after backing off investments in 2020. These resources tend to take a year to produce, and we are now seeing those investments pay off. We believe we're well positioned going into 2022 to see growth in the ODR segment due to increased sales resources, intensified strategic sales focus on building owners, which is resulting in an expanding maintenance base. From a backlog perspective, our sales for the fourth quarter picked up in both our ODR and GCR segments. At the year-end, ODR backlog was $98 million and GCR backlog was $337 million. Charlie will comment later on the sales activity, but we believe supply and demand remains in our favor at this point, allowing us to remain selective in the work that we take on. In terms of our going forward operational strategies, our focus is squarely on GCR project selection, bottom line profitability, and improving our cash flows. We're continuing to focus on aggressively growing the ODR segment and maximize the return of our people in the GCR segment. As the recent results show, this has been a successful strategy, and we're gonna continue to operate this way. On the bright side, the labor picture has improved moving through the first quarter. The Omicron variant has dropped off considerably. We were impacted by workers needing to quarantine in Q4 and into January, but the situation has improved, well, through February and into March. Among the business units, we did have one important development to share that occurred subsequent to year-end. In February, after thorough evaluation of the business unit, including local market conditions and outlook, we made a strategic decision to wind down operations in Southern California due to its strain on financial and human capital resources. The performance of that business was inconsistent and consumed cash from our other higher performing operations. We have been reducing our footprint in that business over the last couple years as we worked to turn the business around, but ultimately determined a full exit made the most sense. We expect to be fully exited from that business in 2022. As of December 31, 2021, the Southern California branch had less than $10 million of remaining backlog to perform. Our other key focus is the integration of Jake Marshall into Limbach. Integration is proceeding well, and the team is on target from a plan and timeline perspective. Among the opportunities and capabilities we're leveraging in both directions are Limbach's shared services such as design and engineering and Jake Marshall's prefabrication expertise. As an example, we've identified a project in the Midwest we're about to begin. We believe we may be able to prefabricate over 70% of our piping assemblies at Jake Marshall, which would improve our operating margins on that project. Let me hand this over to Matt for comments on our acquisition activities. Thanks, Mike. First, let me take a moment to further comment on Jake Marshall, and then I'll pivot to acquisition activity in the M&A environment more broadly. First, with respect to Jake Marshall, the business has really only been a part of the Limbach family now for a few months. In that short time, the team in Chattanooga has just been terrific, and we really couldn't have asked for a better partnership. There's been no shortage of learning opportunities going in both directions, as Mike explained, and there's also no shortage of business opportunities in that market. That's proven to be consistent with how we expected the year to develop coming out of the industrial cycle trough in early 2021. It's very busy there, and the team continues to sell really good work. Just the market environment in the Tennessee footprint generally is as strong as I think it's really ever been, and we continue to feel really good about being there and the opportunities that that market presents. Stepping back and looking at the M&A environment more broadly, in general across the universe, we're seeing strong levels of activity in what I would describe as the prospecting phase, the exploratory phase, and also the nurturing phase vis-a-vis potential acquisition candidates. It feels like a really healthy but balanced market right now. Not everything that we're looking at is gonna get to the finish line, but the volume of interesting businesses that we are exploring and speaking with is really as strong as I can ever remember having experienced. We are pretty picky acquirers, and not every great business is gonna turn out to be a great business for Limbach. We like being busy and we certainly are at the moment. You know, we're pleased to be looking at businesses with this quality and led by folks that, you know, really share the same core values as we do. Expect to continue to be busy through the first and second quarters and into the back half of the year. Thanks, Matt. All right, I'm gonna close with some comments on our sales activity, and then we'll open it up for questions. Recall that a year ago, there was a significant pause in activity as everyone was still feeling their way through how to operate in the pandemic. Proposal activity thus far in 2022 is well above what we were seeing at this time last year, and in response, we continue to evaluate needed sales resources in the markets that offer the most attractive returns. With the global supply chain issues, we have seen a nice increase in time and material work as aging equipment requires additional maintenance. Until the supply chain issue is resolved, we expect to see a strong contribution from time and material work. While the T&M revenue is good news, the supply chain matters continue to impact our ability to secure quick-hitting equipment change-out projects if a customer is locked into service-specified equipment. As of right now, we see this beginning really an issue into early 2023. Looking at 2022 thus far, Limbach has been awarded several major building project contracts totaling approximately $95 million, which will be executed on into 2024, including a new pharmaceutical research and development facility in Boston and two central utility plants, one in Washington, D.C. and the other in Marco Island, Florida. Also included in the total is $22 million of new awards secured by Jake Marshall for various industrial and institutional projects in the Tennessee market. This is quite a nice start for the year. In the ODR segment, our maintenance base continues to grow. As a reminder, those maintenance contracts can lead to other higher margin, quick-hitting small capital projects, which are often performed on a T&M basis along with emergency repairs. When I refer to investment to strategically grow our ODR segment, a key element is the maintenance contracts growth. Turning to the GCR segment, we're focused on those branches with demonstrated success delivering GCR work, and we're looking to maximize their contributions and continue their growth. In branches that don't meet the criteria for continued GCR exposure, we're working aggressively to reposition those assets, including our staff, to pursue a higher margin ODR model. In closing, 2021 was a year of major transformation for Limbach, and in many respects, the culmination of a significant strategic shift for the company. That process is not totally complete, but much of the heavy lifting has been done as our third and fourth quarter bottom line results suggest. We believe we entered 2022 well-positioned but also very mindful of the macroeconomic and geopolitical issues at hand. Throughout our prepared remarks, you've heard us talk about being smart in deploying our assets in pursuit of the best returns, both as a durable way of managing the business and also in response to current market conditions. The non-residential construction industry at large is enjoying solid demand that we expect to continue, but supply has yet to catch up with that demand. We are fortunate to have a diverse service offering, a diverse geographic footprint, and a diverse set of market sectors. Our largest sector, healthcare, which includes pharmaceutical and biotech laboratories and manufacturing facilities, continues to present a solid pipeline of projects both large and small. Now with our new program management services, we look to benefit with earlier engagement to expand our ODR relationships further upstream as capital projects are defined. Among other verticals, we see continued demand for data centers as an area of opportunity. Another highlight is our broader entry into the industrial manufacturing sector with the Jake Marshall acquisition. They have a substantial prospect list, especially with the automobile EV plants that are underway in Tennessee. We also remain bullish on the indoor agriculture sector. I want to emphasize that with the current supply chain challenges, the sectors that I referenced and the opportunities they present are mainly centered on building backlog for 2023 and 2024. We look forward to 2022, and as Mike mentioned, it appears the second half of the year will be stronger than the first half of the year due to the supply chain limitations along with labor challenges, similar to what we experienced in 2021. We intend to detail out formal financial guidance when we issue our first quarter results in May. With that, we're available to take your questions. Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For a participant choosing speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Rob Brown with Lake Street Capital. Please proceed. Good morning. Good morning, Rob. Kind of on the current environment, just wanted to get a sense of, are you seeing projects just shifting out, but you maintain your projects, but the timing gets delayed a little bit? Or do you see projects really new starts getting delayed? Or what's the impact of sort of supply chain issues at this point? Rob, thanks for the question. It's interesting, I think this partially relates to our shift to, in general, the biggest factor right now in our industry is definitely equipment. We had commodity type questions that were, you know, 12-18 months ago, but right now it's equipment. The equipment lead times are nearly double what they were before. That especially impacts on the owner direct work, which tends to be more equipment driven versus the larger GCR work, which has equipment but has an additional labor component that the owner direct work tends to be at less risk. We're really closely watching equipment lead times. I think at some point here, as I mentioned, they will start to have some relief on those. I think from an owner direct side, there's older equipment that has to be replaced. I think any deferred capital expenditures that happen, we're finally in a position now where those expenditures, those building owners have to make those investments. It's just a matter of getting the equipment in order for them to make those investments is kind of the position that we're in right now. Larger projects, we continue to be very selective. I think price certainty is from a perspective on larger GCR work is definitely on the forefront of a lot of building owners' minds. Completely equipment driven really at this point, and we're really closely watching it. That's great color. Thank you. You talked about being selective on projects. How is the margin profile of new projects looking at this point? Do you feel like that margin can continue to improve, sort of on average, or do you feel like it's stable? How would you characterize it, I guess, specifically around GCR? Yeah, look, I think the better returns that we're presenting now are a result of what we've done over the past couple of years, you know, between risk management, proper selection of projects, higher quality jobs. We've been pushing the margins. You know, on the ODR front, we continue to push, and it's gonna be interesting to see, you know, the results over the next couple of years as we really educate our sales force to, you know, go for it and just, you know, increase the margin by 200 basis points. Give it a shot. On the GCR side, we are pretty much holding firm on certain levels of margin. Of course, we always look at the risk and opportunity, but we are pushing hard to beat that range that we're providing for modeling purposes. You know, we're winning work on a regular basis. We're losing some work, and some people get disappointed that we lost a project, but we're like, "No, that's fine. Let's deploy our human capital on the projects where we can get the greatest return." That's the way we're looking at it right now, Rob, is to just really, you know, get the greatest return off of our, you know, great people that work for this company. You know, it's almost demoralizing for our staff when they get on a job that maybe doesn't give us a good return, and it becomes a tougher project. I think our staff are, you know, pretty pumped up that we're holding firm, that we want them to get on healthy projects that are gonna have really strong outcomes. Yeah, we lose one, that's okay. Let's go after the next one. Quite frankly, the market is that busy. We can be selective, and that's what we're doing. Excellent. Thank you. I'll turn it over. Thanks, Rob. As a reminder, just star one on your telephone keypad if you would like to ask a question. Our next question comes from Chip Moore with EF Hutton. Please proceed. Hey, good morning. Thanks for taking the question, guys. Good morning, Chip. wanted to ask about GCR margins, obviously very strong this quarter, and you called out some of the mix and the claim settlement. Maybe you can expand on that and, you know, help us think about a normalized margin just for the quarter. Then, you know, for the year, 13%, very strong. You talked about 11%-12% now as a conservative starting point. You know, what are some of the puts and takes there and potential to outperform? Yeah, you know, on the claim resolution, we were quite pleased. We held firm. You know, we were hoping to get that resolved quicker, but we held out route. We left that claim situation, quite frankly, in a very good position. Very proud of the people that negotiated that. They did a great job. We've got several more that we're working on. That created some nice upsides in the business, no doubt. That pushed the margin up. I think the modeling between 11%-12%, and we increased it slightly for a conservative view from previous modeling guidance. We think that's the proper way to look at it right now. As our quarters go by, we'll provide further updates on our progress. When I look at, again, I'm gonna reinforce this, a couple years ago, we put the risk management processes in place for better project selection. We're pushing the margins up. We want to continue to execute and execute well and deliver, you know, improving margins. But I think from a modeling perspective, Chip, we think the 11%-12% is the way to go right now. Got it. That's helpful. Maybe if I shift to some of the supply chain impacts, I guess particularly on the ODR side, you know, you talked about the lead times for chillers and air handlers and things like this. Did that hold back sales materially at all this quarter? As we think about sort of that, you know, second half weighting this year, any color you can give us there would be helpful. Thanks, guys. Sure. First of all, on sales with supply chain, what's kind of interesting right now, we're using that to our advantage by pushing our customer base to make decisions. In other words, if in the past, you might have a customer take, you know, three or four months to make a decision on a piece of equipment and to go forward with a retrofit, now we're urging them, "Look, we need to lock this in at the pricing today because the pricing will go up. Plus, we don't know what's gonna happen with, you know, manufacturing. Could it improve, or could it get worse?" That's actually working in our favor to get decisions quicker. You know, unfortunately, though, if I look back at, you know, the latter half of Q3 into Q4, there was about $20 million of revenue, approximately $20 million of revenue of, you know, higher margin work that got pushed forward because we couldn't get the equipment. They missed their delivery dates. You know, that was unfortunate. You know, we could've had a much better year last year. From a standpoint of kind of that continuation of the supply chain problem, we don't expect that to improve until early, you know, maybe late this year or early 2023. We just had a senior management call with Johnson Controls, who's a major equipment supplier for us, last week. We had four of their senior executives on the call. One person in particular was responsible for equipment production. He reinforced the issue of anything custom, you're looking at a year to get anything custom. If we sell a project today that has a custom piece of equipment, it's gonna revenue next year. As far as some positive news, though, he did share that they're starting to catch up with standard equipment, meaning off-the-shelf equipment. It's not back anywhere near what it was pre-pandemic, but they're starting to see kind of the logjam ease a bit, and they're starting to catch up with demand. That was really positive news for us. We're gonna have to talk to our customer base that they have a need for an equipment switch out or for that matter, even new construction. We're going to try to convince them to go with the, you know, off-the-shelf product as opposed to a custom piece of equipment. Unfortunately, in many cases, with some of the sophisticated projects we work on, it has to be custom. Where we can push for the alternative, we're going to be doing that. Again, it's supply chain is kind of interesting. We're taking advantage of it in certain respects. It's also pushing our T&M up, as we mentioned in our prepared remarks. We're pushing clients to make decisions quicker. Unfortunately, some of that work is going to continue to lag as we wait for the equipment to come in. Understood. No, that's super helpful. Maybe if I could sneak just one last one in. You did talk about Jake Marshall and some of the opportunities you're seeing there. I know it's early, but I think you also called out some of the building in the auto sector. Are you actively bidding on some of those opportunities? Well, first of all, Jake Marshall is very busy, which is great, and it was great to see them pick up $22 million of new work here at the beginning of the year, which was just awesome to see. There's the Ford plant that's being built down there. That's a $6 billion investment. That's currently kind of in planning. When it goes into construction with areas that we'd be interested in, we will look at it. We'll price it appropriately. If we can pick some of it up, that'd be great. Tennessee seems to be a hotspot of activity right now. We're pretty excited about it, whether it's, you know, things like the EV plant for Ford or all the ancillary plants that, you know, go around a big production facility like that, there's gonna be quite a bit of opportunity. So the answer is we're looking at it, and if we can find the right opportunity, right margins that we're looking for, we'll take it on. Perfect. All right. Thanks very much. Thank you, Chip. Our next question is from Jon Old with Long Meadow Investors. Please proceed. Hi, everyone. Thanks for the call and congrats on the fourth quarter. Charlie, I'm just curious, do you see the GCR segment after the sort of rationalization in the last year and purposeful decline for margin expansion, do you see that leveling out now, or do you think that will continue. Do you think that the business sort of stays flat or grows a little bit going forward or is it you're gonna continue to need to decline to? Yeah. Great question, Jon. In fact, thank you for asking it. When we look at the business, first of all, you gotta understand our mission at this point is to keep growing that ODR piece as aggressively as we can. I was very pleased with the sales. You know, we're up 25% year-over-year for the ODR segment. The GCR segment, you know, we're really looking at each business unit and rationalizing their execution. Can they produce the margin? Can they produce the cash that we need them to? In the branches that have been very successful over the years, whether it's building small-scale or large-scale projects, we're going to continue. The branches that we look at them and they're saying, "You know, I can get some GCR work, but it's at this margin, it's gonna be, you know, maybe negative cash flow," we're just not doing it. One particular branch we looked at last year, we just decided, "Look, just go straight ODR. Straight ODR. You're gonna do so much better." It didn't take long, you know, in that conversation to just work through the math and show them the numbers, and everybody agreed. We shifted those assets over to ODR, including the SG&A. You know, as we go forward, I can see GCR in certain business units continuing to grow. In other units, we're gonna continue to contract or maybe even stop. There's no question about it. ODR produces much better margin, much better bottom line and positive cash flow. It's just much better. Mike, do you have anything else you'd like to share on that? No, I would agree. I think when we look at the return in the gross profit margins, our employees. You know, from a strategic perspective, we're on a journey here to make sure that we're putting our people in a position to be most successful. I think when you step back a couple of years, you know, we talked about the mix of the business. In 2021, it was really about making the necessary SG&A adds from a sales perspective. Really in 2021, from a sales focus, we're focused on maintenance space, we're focused on introducing ourselves to new customers, and we feel like we're positioned going into 2022. Once we've already been introduced to those customers to sell an expanded suite of services to them as well. This is a journey that we're on. As Charlie mentioned, project selection and obviously trying to make sure we have the greatest return and we have our people in the best position is ultimately what we're focused on. Jon, I'm gonna tell you a quick story and for everybody on the call that I think is really important because it demonstrates the importance of GCR, but more importantly, ODR. It's Disney, and you've heard us talk about Disney in the past. Back in, I think it was 2010, we had an opportunity to do the mine train ride renovation. And it was a small project, $2 million. Ended up wrapping up at about a $4 million value. There were a lot of change orders. We got paid well. It all worked out well. I ended up having dinner with the head of Imagineering for Disney after that project. I was shocked to hear how impressed they were. Maybe I shouldn't have been so shocked, but they were thrilled with what we did for them, and I don't have time to get into all the details, but we really did some creative stuff for them. You fast forward today, we're still working for Imagineering, whether it's at the Magic Kingdom or over at EPCOT. But we're now working for the four divisions within Disney that maintain all the facilities throughout their properties in Orlando. What started off with a small little opportunity has now expanded into good sized GCR work, where we are working for general contractors, but Disney is pretty much telling the GC, you know, use our services. Now it's grown into this, you know, great presence on the property for all of this other maintenance, renovation, retrofit type work. It's become a nice part of our business. The reason I share the story is that's the model. GCR, what's important about it is we get involved on a project, make sure we understand who the owner is, and then let's figure out how we can start leveraging that relationship with that owner, listen to them, and start providing more and more services. Much better margin, much better cash flow. Again, the whole program is important, GCR, ODR. I also have to emphasize that without GCR in certain business units, there's so much opportunity in those markets where we just, you know, we go direct, we don't need the GC. We're just knocking on the doors of buildings, getting ourselves introduced and developing those long-term relationships. I'm, quite frankly, extremely pleased with what we've done over the past couple of years. It's really starting to blossom. Great. Thanks for that color. Just following up on cash flow, Jayme. Obviously, the last two years were, one year weighted to the positive, last year to the negative. Going forward, do you think, you know, cash flow will more closely approximate, you know, the existing results? In other words, EBITDA conversion to cash flow will be more normalized in 2022 and going forward. Yeah. Thanks, just t rying to give more color on that and really explaining the overbill and underbill. As Charlie mentioned, you know, from a risk perspective as we shift to ODR, it's not as volatile. As we work toward that 50-50 split, we expect and anticipate that we'll be more of neutral billings. That's helpful from the cash flow perspective. I think a good way to look at the cash flow from, like, kind of our daily operations from the business is to, using net income as an approximation. Then from there, you know, we do have the debt payments that we need to make, but then we also have our revolver as well that we can work off of that we have nothing borrowed on at this point. I think that's probably the best way as we're making that shift and we have that volatility right now between the billings being over-billed and under-billed, that kind of gets you know, comfortable where the cash is going to land. Okay. All right. Appreciate it. Matt, maybe you could just give us a little more color on the acquisition activity, what you know, what you guys expect going forward. You know, maybe one or two deals a year, what that means to the company if you can execute that over a long period of time, and really provide a tremendous growth boost to the business. Sure. Let me give you some color here, and then I think, you know, as we move through the quarter and through the next call after Q1, we'll provide some incremental comments on top of what I can pass along here. Yeah, clearly, we've said this before. I think the Jake Marshall transaction in December is a really good prototype for the type of business that we're looking to pursue and the type of partnership we'd like to form in terms of location, scale, capability, size, that sort of thing. You know, the criteria which we've been through before, again, you know, businesses with revenue between probably $30 million and $75 million with EBITDA margins in the call it 8%-10% range. These are transactions that have an enterprise value of, you know, roughly $15 million-$25 million. I think that's a good digestible bite size for us over an 18-24 month, maybe 36 month period. Those businesses can be impactful to the bottom line. You know, they're large enough to make a difference. They look like many of our other branches, but they're also small enough for us to feel comfortable with the people, with the operations, with the diligence requirements and resources, and with the ability to finance the transactions and, you know, and get those transactions closed. When I look at the environment right now and the opportunities in the market that fit that profile, there are a lot of them. They're very interesting. I think people are relieved to be largely on the other side of the pandemic. I think the capital gains tax voodoo that we went through last year has mitigated, but has sort of sharpened people's perspectives and feelings about really getting ahead of succession planning and estate planning. I think that's, you know, good for the acquirer universe as we look at opportunities in the market. You know, getting one or two of those deals done this year, next year, I think is a, you know, a reasonable pace and a reasonable aspiration, because again, you know, we are trying to manage the internal resources, the capital resources that we've got with the availability in the marketplace. One of the great, I think, sort of obvious discoveries hiding in plain sight from the J. Marshall deal. It was just the breadth and depth of resources that we have at Limbach, to work with me, to support me, to be available for integration, for extracting value out of the businesses that we partner with. We want to make sure that we sort of manage that balance, given that a lot of those folks also have day jobs. I you know, I'm thinking about the strategy right now as one to two deals, you know, this year bleeding into next year. You know, if we've got the ability and the scale to ramp that up and add another transaction and get two to three deals that are that size, you know, that would be great. As I think about the near-term environment and the near-term horizon of, you know, call it again, 24-36 months, I think the right pace is, you know, probably ±2 deals a year at that scale. Thank you so much. Our next question is from George Melas with MKH Management. Please proceed. I'm fairly new to the story, so I'm trying to understand. The ODR segment grew roughly 10% this year, but I believe you said sales were up 25%. The backlog is clearly growing and has increased very much. Do you expect to see operating leverage on the ODR business in 2022, or are you gonna continue this sort of strong investment, you know, particularly in the SG&A and on the sales side to keep the growth going long term? Yeah. George, thanks for the question. Our view of ODR right now is it's just a huge part of our future. Again, for all the right economic reasons. It's amazing what it does for returns and cash production. When you look at, you know, what we did this past year, you know, a little over 10% growth. I did make a comment about supply chain, about $20 million of revenue kind of pushed forward. That's one of the reasons why the backlog is actually much larger because we still have to burn that work. The sales themselves were up by 25%, which is a great indicator of the future, and we're not gonna back off. Where we see the opportunity to continue to expand in our different marketplaces and, you know, add staff to grow it, we're going to do that. The other part is on the acquisition front. You know, with what Matt was just touching on, our intent right now is to look for businesses that have a, you know, reasonable representation of ODR revenue. Jake Marshall did that for us. I believe that was roughly 60% revenue was ODR. We're gonna continue to look for businesses that can add to that mix. Our goal by 2025 is to see our mix, 50% GCR, 50% ODR. Okay. Does that help, George? Yep, very much. Thank you. Then just a quick question on the contract assets and liability and the over-billing and under-billing. Is that something that as investors we should be worried about? The fluctuations are so significant, or is this just part of the business and over time it sort of take care of itself? When you look at over and under-billings, that's an ongoing thing for the industry. It's just, it's the nature of what we do. A lot of it has to do with timing, George. Yeah. You could have one month where we're much better. Next month could be a bit worse. It depends upon kind of the cycle of a project. Now let's go back to the strategy. The strategy right now is to continue to be very selective on GCR, where we feel that we're gonna see much better outcomes, both in terms of profit and cash flow, which means, you know, strong billings. But we're also shifting this mix to ODR, and ODR tends to have a nice either neutral billing to a slight uptick on a regular basis. As we continue the evolution of the business and transformation to more ODR, we expect it to smooth out and not have that lumpiness, if you wanna call it that. I hope that helps, George. Okay. Okay, very good. Thank you. Our next question is from Chip Brown, Private Investor. Please proceed. Morning, guys. Hey, my question is regards to you guys kind of winding down or shutting down Southern California. To my knowledge, that's an ODR relationship with Disney, correct? No, we've done very little work at Anaheim. I think we did some air handler change outs, and we tried getting in there. We didn't have much success. No, the majority of our work is all in good old Orlando. Okay, perfect. Thank you. Thanks for the question, Chip. That concludes our question and answer session. I would like to turn the call back over to management for closing comments. I wanna thank everybody for joining us this morning, and we're very proud of the quarter and the year for that matter. We look forward to speaking to you again when we report the first quarter results in May. If you have any additional questions, please reach out to Matt Capps or our investor relations firm, The Equity Group. Their contact information can be found on our investor page on our website. Thank you again for your interest in Limbach. Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.