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Significant Accounting Policies | 12 Months Ended
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Dec. 31, 2025
Accounting Policies [Abstract] |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) and based on the assumption that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. Principles of Consolidation References in these financial statements to the Company refer collectively to the accounts of Limbach Holdings, Inc. and its wholly-owned subsidiaries, including Limbach Holdings LLC (“LHLLC”), Limbach Facility Services LLC (“LFS”), Limbach Company LLC (“LC LLC”), Limbach Company LP, Harper Limbach LLC, Harper Limbach Construction LLC, Limbach Facility & Project Solutions LLC, Jake Marshall, LLC (“JMLLC”), Coating Solutions, LLC (“CSLLC”), ACME Industrial Piping, LLC (“ACME”), Industrial Air, LLC (“Industrial Air”), Kent Island Mechanical, LLC (“Kent Island”), Consolidated Mechanical, LLC (“Consolidated Mechanical”) and Pioneer Power, LLC (“Pioneer Power”) for all periods presented, unless otherwise indicated. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements for assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, the reported amounts of revenue and expenses during the reported period, and the accompanying notes. Management believes that its most significant estimates and assumptions have been based on reasonable and supportable assumptions and the resulting estimates are reasonable for use in the preparation of the consolidated financial statements. The Company’s significant estimates include estimates associated with revenue recognition on construction contracts, costs incurred through each balance sheet date, intangibles, property and equipment, fair value accounting for acquisitions, insurance reserves, income tax valuation allowances, fair value of contingent consideration arrangements and contingencies. If the underlying estimates and assumptions upon which the consolidated financial statements are based change in the future, actual amounts may differ from those included in the accompanying consolidated financial statements. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less at the date of purchase. Cash and cash equivalents are recorded at cost, which approximates fair value due to the short-term nature of these instruments. At December 31, 2025, the Company’s cash and cash equivalents consisted primarily of demand deposits with commercial banks and overnight repurchase agreements. At December 31, 2024, cash and cash equivalents also included investments in highly liquid money market funds and U.S. Treasury bills. From time to time, amounts held in deposit accounts may exceed federally insured limits. The Company mitigates this risk by maintaining deposits with high credit-quality financial institutions and, to date, has not experienced any losses on such balances. See Note 9 – Fair Value Measurements in the accompanying notes to the Company’s consolidated financial statements for further information. Restricted Cash Restricted cash is cash held at a commercial bank in an imprest account held for the purpose of funding workers’ compensation and general liability claims against the Company. This amount is replenished either when depleted or at the beginning of each month. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Company’s consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows:
(in thousands) | December 31, 2025 |  | December 31, 2024
Cash and cash equivalents | $ | 11,345 |  |  | $ | 44,930 |
Restricted cash | 65 |  |  | 65 |
Total cash, cash equivalents and restricted cash | $ | 11,410 |  |  | $ | 44,995 |
Accounts Receivable and Allowance for Credit Losses The carrying value of the Company’s receivables, net of the allowance for credit losses, represents their estimated net realizable value. The Company develops its allowance using an aging methodology and evaluates expected losses based on historical loss experience adjusted for current conditions and, when appropriate, reasonable and supportable forecasts. The determination of the allowance requires judgment and estimates involving, among others, the creditworthiness of customers, historical collection experience, the aging of past due balances, the consideration of a customer’s financial condition, ongoing relationships with customers, lien rights (if any), the availability of payment bonds or other security, and broader market and economic conditions. The Company evaluates and updates these estimates as additional information becomes available. When the Company becomes aware of a customer’s inability to meet its financial obligation, a specific reserve is recorded to reduce the receivable to the expected amount to be collected. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and an adjustment of the account receivable. The majority of customer balances at each balance sheet date are collected within twelve months. As is common practice in the industry, the Company classifies all accounts receivable as current assets. Based on assessments by management, allowances for credit losses were approximately $0.4 million at both December 31, 2025 and 2024. Joint Ventures The Company participates in certain special purpose, project-specific joint ventures that are generally formed to bid on, negotiate and perform specific projects. The Company accounts for these investments under the equity method of accounting. Under the joint venture arrangements, the joint venture typically enters into the prime contract with the customer and issues subcontracts to the venturers for each party’s respective scope of work. The Company records revenue, costs, and the related contract assets and liabilities associated with its subcontract in the consolidated financial statements in accordance with its revenue recognition policies, consistent with the accounting for other construction contracts. The joint venture itself does not accumulate any profits or losses, as the joint venture revenue is equal to the sum of the subcontracts it issues to the joint venture partners. The voting power and management of the joint ventures are shared equally by the joint venture partners, qualifying these entities for joint venture treatment under GAAP. The shared voting power and management responsibilities allow the Company to exercise significant influence without controlling the joint venture entity. As such, the Company applies the equity method of accounting as defined in ASC Topic 323, Investments – Equity Method and Joint Ventures. Revenue Recognition The Company’s revenue is primarily derived from construction-type and service contracts that are typically less than two years. The Company’s service arrangements generally include (i) fixed-price service contracts, typically for maintenance, repair and retrofit work over a period, commonly one year, and (ii) time and materials or similar service work performed on an as-needed basis. The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, which requires revenue to be recognized as control of promised goods or services is transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled. Contract identification and collectability. A contract with a customer exists when approval and commitment are present, each party’s rights and payment terms are identifiable, the contract has commercial substance, and collectability is probable. Judgment is required in determining whether these criteria are met, including in circumstances where work commences prior to receipt of a formally executed contract. In such cases, the Company evaluates all relevant facts and circumstances, including documentation evidencing the parties’ agreement and historical experience with the customer, in assessing whether an enforceable contract exists. In assessing collectability, the Company considers the customer’s ability and intent to pay, including creditworthiness and payment history. Performance obligations. At contract inception, the Company evaluates promised goods and services to identify performance obligations. Performance obligations represent the unit of account for revenue recognition. Judgment is applied in determining whether promised goods or services are distinct (i.e., capable of being distinct and distinct within the context of the contract). Transaction price and variable consideration. The transaction price is the amount of consideration the Company expects to be entitled to in exchange for transferring goods or services to the customer, and may include fixed and variable amounts. Variable consideration may arise from change orders, claims, incentives, penalties, or other contract provisions. The Company estimates variable consideration using either the expected value method or the most likely amount method, depending on which better predicts the amount of consideration expected. Variable consideration is included in the transaction price only to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty is resolved (the “constraint”). In applying the constraint, the Company considers factors such as susceptibility to factors outside its influence, the expected timing of resolution, and the extent of historical experience with similar arrangements. Pending change orders are a common source of variable consideration and generally represent contract modifications for which the scope has been authorized or acknowledged by the customer, but pricing has not been finalized. In estimating the transaction price related to pending change orders, the Company considers relevant facts and circumstances, including written communications with the customer and historical experience with similar modifications, and applies the constraint as appropriate. Contract claims may arise when the Company seeks recovery for changes in scope or other causes not yet agreed to by the customer. Given the uncertainty associated with claims, including the timing and outcome of dispute resolution, amounts related to claims are generally more likely to be constrained. Costs to pursue claims, including litigation costs, if incurred, are expensed as incurred. Measure of progress and recognition of revenue over time. The Company recognizes revenue over time for construction-type contracts when the Company’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or when the asset under construction has no alternative use to the Company and the Company has an enforceable right to payment for performance completed to date. Revenue is recognized based on the Company’s progress toward complete satisfaction of the applicable performance obligations. The Company generally measures progress for construction-type contracts using a cost-to-cost input method, under which progress is measured by the ratio of costs incurred to date to total estimated costs to complete for each performance obligation. Costs included in the measure of progress generally consist of labor, materials, subcontractor costs, and other direct and indirect costs, including depreciation. Revenue, including estimated profit, is recognized in proportion to progress. For service-type contracts, revenue is generally recognized over time as the customer simultaneously receives and consumes the benefits of the Company’s performance. For fixed-price service-type contracts with specified service periods, revenue is generally recognized on a straight-line basis over the contract term when the Company’s performance is expected to be expended evenly and the customer receives and consumes benefits throughout the term. Retainage and significant financing components. Certain contracts include retainage provisions intended to provide customers assurance of performance; retainage is not considered a significant financing component. Amounts billed but not yet paid pursuant to retainage provisions generally become due upon completion and acceptance of the project work. The Company determined that its contracts did not include significant financing components for the years ended December 31, 2025 and 2024. Changes in estimates and loss provisions. Due to uncertainties inherent in the estimation process, the Company’s estimates of total costs to complete a performance obligation may change. For performance obligations recognized using the cost-to-cost method, changes in estimated total costs are reflected through a cumulative catch-up adjustment in the period the change is identified. When current estimates indicate a loss on a performance obligation, the Company recognizes a provision for the full amount of the expected loss in the period such loss becomes evident. Contract costs. Costs incurred to fulfill contracts that are not expected to be recoverable from the customer (including certain pre-bid costs) are expensed as incurred and included in selling, general and administrative expenses. In accordance with industry practice, the Company classifies as current all assets and liabilities relating to the performance of contracts. See Note 4 – Revenue from Contracts with Customers in the accompanying notes to the Company’s consolidated financial statements for further information. Changes in Estimates on Construction Contracts The accuracy of revenue and profit recognized depends on estimates of total costs to complete each project. Changes in estimates may result from, among other factors, bid accuracy, scope changes and change order resolution, claims and dispute outcomes, labor and material cost fluctuations, productivity and subcontractor performance, project delays (including owner- or weather-related delays), differing site conditions, design changes on design-build projects, and customer administration of the contract. After contract inception, the transaction price may change due to change orders, contract modifications, incentives, penalties, and claims. Contract modifications are evaluated to determine whether they should be accounted for as part of the existing performance obligation(s) or as separate performance obligation(s), and the transaction price is allocated accordingly. Pending change orders and affirmative claims are included in the transaction price only when the amount can be reasonably estimated and it is probable that including such amounts will not result in a significant reversal of revenue. Goodwill and Impairment of Long-Lived Assets Goodwill is evaluated for impairment at least annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company may first perform a qualitative assessment to determine whether a quantitative impairment test is necessary or may elect to proceed directly to a quantitative impairment test. Under the qualitative assessment, the Company evaluates relevant events and circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after considering the totality of these factors, the Company concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, no further testing is required. If the Company is unable to reach this conclusion, a quantitative impairment test is performed. In a quantitative impairment test, the Company estimates the fair value of the applicable reporting unit and compares it to its carrying amount. If the fair value of a reporting unit is less than its carrying amount, an impairment charge is recognized for the difference, limited to the amount of goodwill allocated to that reporting unit. See Note 5 – Goodwill and Intangible Assets for further detail. The Company evaluates long-lived assets, including property, plant and equipment and finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Recoverability is assessed at the asset group level by comparing the carrying amount of the asset group to the sum of the expected future undiscounted cash flows. These estimates require management to make assumptions regarding, among other factors, expected revenue and margin trends, demand, pricing, competition, operating costs and other market conditions. If the carrying amount of an asset group exceeds its expected future undiscounted cash flows, the Company recognizes an impairment loss equal to the amount by which the carrying amount exceeds fair value. Fair value is determined using quoted market prices when available or, if not available, valuation techniques such as discounted cash flow analyses. Changes in key assumptions could materially affect the Company’s impairment analyses and the timing and amount of any impairment recognized. See Note 5 – Goodwill and Intangible Assets for further discussion on impairments of long-lived assets. Intangible Assets The Company’s indefinite-lived intangible asset (trade name) is evaluated for impairment at least annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset’s fair value is less than its carrying amount. If the asset is impaired, the Company recognizes an impairment loss for the amount by which the carrying amount exceeds fair value. Finite-lived intangible assets are amortized over their estimated useful lives and are evaluated for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. See Note 5 – Goodwill and Intangible Assets for further discussion of the Company’s intangible assets. Property and Equipment, net Property and equipment, with the exception of the Company’s fleet vehicle finance leases, are recorded at cost and depreciated on a straight-line basis over their estimated useful lives. For buildings and leasehold improvements, the Company’s useful lives range from five years to 40 years; for machinery and equipment, useful lives range from three years to 10 years. Expenditures for maintenance and repairs are expensed as incurred. Leasehold improvements for the Company’s real estate operating leases are amortized over the lesser of the term of the related lease or the estimated useful lives of the improvements. The following table summarizes the Company’s property and equipment:
(in thousands) | December 31, 2025 |  | December 31, 2024
Land and improvements | $ | 1,525 |  |  | $ | 400 |
Buildings and leasehold improvements | 15,027 |  |  | 11,434 |
Machinery and equipment | 38,143 |  |  | 39,603 |
Finance leases - vehicles(1) | 27,905 |  |  | 16,600 |
Gross property and equipment | 82,600 |  |  | 68,037 |
Less: Accumulated amortization on finance leases | (8,200) |  |  | (5,044) |
Less: Accumulated depreciation | (31,091) |  |  | (32,867) |
Property and equipment, net of accumulated amortization and depreciation | $ | 43,309 |  |  | $ | 30,126 |
(1) See additional information provided in Note 14 – Leases. Depreciation and amortization expense on property and equipment was $9.8 million, $7.2 million and $6.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. Leases A lease is a contract, or part of a contract, that conveys the right to control the use an identified asset for a period of time in exchange for consideration. At contract inception, the Company determines whether an arrangement contains a lease by assessing whether (i) the contract involves an identified asset and (ii) the Company has the right to control the use of that identified asset over the contract term. The Company determines lease classification as operating or finance at lease commencement. With the exception of short-term leases (leases with an initial term of 12 months or less), the Company recognizes a right-of-use (“ROU”) asset and a lease liability at lease commencement. The lease liability is measured at the present value of the lease payments over the lease term and is discounted using the rate implicit in the lease when readily determinable; otherwise, the Company uses its incremental borrowing rate. The Company generally uses its incremental borrowing rate for real estate operating leases because the rate implicit in the lease is not readily determinable. For certain fleet vehicle leases classified as finance leases, the Company uses the stated rate in the lease when readily determinable. The ROU asset is initially measured as the lease liability, adjusted for: •lease payments made at or before commencement, less any lease incentives received; •initial direct costs incurred; and •(if applicable) accrued lease payments or deferred rent balances assumed or recognized. Many of the Company’s operating lease contracts include options to extend or renew. The Company assesses the option for individual leases, and it generally considers the base term to be the term of lease contracts. See Note 14 – Leases for additional information. The Company evaluates its ROU assets for impairment in accordance with the guidance for long-lived assets when events or changes in circumstances indicate that the carrying amount of the related asset group may not be recoverable. Recoverability is assessed using estimates of future undiscounted cash flows and other relevant economic and business factors. Deferred Financing Costs Deferred financing costs are deferred and amortized to interest expense using the effective interest rate method over the term of the related long-term debt agreement, and the straight-line method for the revolving credit agreement. Debt issuance costs related to the issuance and/or extension, as applicable, of the Company’s term loans are reflected as a direct reduction from the carrying amount of long-term debt. Debt issuance costs related to revolving credit facilities are capitalized and reflected as an other asset. Stock-Based Compensation Stock-based compensation awards granted to executives, employees, former executives and non-employee directors are measured at grant date fair value and recognized as an expense over the requisite service period. For awards with service conditions only, the Company recognizes compensation expense on a graded vesting basis over the requisite service period for each separately vesting tranche based on the grant date fair value of the award. For awards with service and performance conditions, the Company recognizes compensation expense using the straight-line method over the requisite service period based on the grant date fair value of the award, and adjusts the amount of expense recognized for such awards based on management’s estimate of the probable outcome of the performance conditions. The cumulative effect of changes in the estimated probability of achieving the performance conditions is recorded in the period in which the change occurs. The Company also grants awards that include market conditions. The grant date fair value of awards with market conditions is estimated using an appropriate valuation technique that incorporates the market condition. Because the market condition is reflected in the grant-date fair value, compensation expense for these awards is recognized over the requisite service period regardless of whether the market condition is ultimately achieved, provided the requisite service is rendered. The Company has elected to account for forfeitures as they occur to determine the amount of compensation expense to be recognized each period. See also Note 17 – Management Incentive Plans in the accompanying notes to the Company’s consolidated financial statements for further information. Income Taxes The provision for income taxes includes federal, state and local income taxes. The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes, which requires the use of the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the periods in which the temporary differences are expected to reverse. The effect of changes in tax laws and tax rates on deferred tax assets and liabilities is recognized in the provision for income taxes in the period that includes the enactment date. The Company evaluates the realizability of deferred tax assets and establishes a valuation allowance when, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. In assessing realizability, the Company considers, among other factors, historical and projected future taxable income, the reversal of existing taxable temporary differences, and available tax planning strategies. The Company recognizes the effect of uncertain tax positions only if it is more likely than not that the position will be sustained upon examination, based on the technical merits of the position. The amount recognized is measured as the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the taxing authority. Interest and penalties related to unrecognized tax benefits are recognized in income tax expense. Fair Value Measurements The Company measures certain assets and liabilities at fair value in accordance with ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: •Level 1 — inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date; •Level 2 — inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities; and •Level 3 — unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. See also Note 9 – Fair Value Measurements in the accompanying notes to the Company’s consolidated financial statements for further information. Recent Accounting Pronouncements In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. ASU 2025-05 is effective for annual and interim periods beginning after December 15, 2025, and interim reporting periods in those years. Entities that elect the practical expedient and, if applicable, make the accounting policy election are required to apply the amendments prospectively. The Company is currently evaluating the potential impact of adopting ASU 2025-05 on its consolidated financial statements and disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, and in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Companies have the option to apply this guidance either on a retrospective or prospective basis, and early adoption is permitted. The Company is currently evaluating the impact that the adoption of these standards will have on its consolidated financial statements and disclosures. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740). This update requires entities to disclose additional information with respect to the effective tax rate reconciliation and to disclose the disaggregation by jurisdiction of income tax expense and income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 in its 2025 Annual Report on Form 10-K and elected to apply the guidance on a retrospective basis. This standard did not have a material impact on the Company's consolidated financial position, results of operations or cash flows, but affected certain of its financial statement disclosures as discussed above.

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