Part I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements show decreased net sales and income, with improved operating cash flow and increased total assets [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$422.1 million** by September 30, 2020, driven by acquisitions, while liabilities and equity also saw slight increases Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $44,537 | $35,602 | | Accounts receivable, net | $58,274 | $68,434 | | Goodwill | $161,352 | $152,020 | | **Total assets** | **$422,090** | **$408,637** | | **Liabilities & Equity** | | | | Total current liabilities | $110,035 | $115,188 | | Debt, less current portion | $73,626 | $63,001 | | **Total liabilities** | **$220,494** | **$215,620** | | **Total shareholders' equity** | **$201,596** | **$193,017** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a **net loss of $0.2 million** in Q3 2020 on **$77.4 million** net sales, reflecting a decline from the prior year Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2020 | Q3 2019 | 9 Months 2020 | 9 Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $77,425 | $85,266 | $233,081 | $252,456 | | Gross profit | $24,810 | $28,777 | $78,905 | $84,056 | | Income from operations | $1,018 | $4,059 | $9,651 | $10,965 | | Net (loss) income attributable to CECO | $(239) | $1,931 | $6,431 | $9,310 | | Diluted (Loss) earnings per share | $(0.01) | $0.05 | $0.18 | $0.26 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly improved to **$9.1 million** for the nine months ended September 30, 2020, despite increased investing activities Cash Flow Summary (in thousands) | Activity | Nine months ended Sep 30, 2020 | Nine months ended Sep 30, 2019 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $9,115 | $(633) | | Net cash used in investing activities | $(8,165) | $(3,237) | | Net cash provided by (used in) financing activities | $7,783 | $(9,881) | | **Net increase (decrease) in cash** | **$9,390** | **$(14,199)** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail the impact of COVID-19, recent acquisitions, debt structure, ongoing legal contingencies, and varied segment performance - The company acquired 100% of Environmental Integrated Solutions (EIS) for **$10.3 million** in cash on June 4, 2020. This acquisition added **$7.0 million** in goodwill and **$4.8 million** in finite-life intangible assets[72](index=72&type=chunk)[73](index=73&type=chunk) - On July 31, 2020, the company entered into a joint venture with Mader Holdings L.P., contributing its Effox-Flextor damper business. CECO holds a **70% equity** and **50% voting interest** and consolidates the entity. The transaction added **$2.0 million** in goodwill[75](index=75&type=chunk)[77](index=77&type=chunk) - As of September 30, 2020, **201 asbestos-related cases** were pending against the company's subsidiary, Met-Pro. Cumulative settlement payments since 2002 total **$3.1 million**, with insurers covering **$2.9 million**. Management believes its insurance coverage is adequate and the cases will not have a material adverse impact[65](index=65&type=chunk)[66](index=66&type=chunk)[68](index=68&type=chunk) Segment Net Sales (in thousands) | Segment | Q3 2020 | Q3 2019 | 9 Months 2020 | 9 Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Energy Solutions | $49,709 | $48,847 | $149,429 | $154,606 | | Industrial Solutions | $18,716 | $26,983 | $55,736 | $65,920 | | Fluid Handling Solutions | $9,000 | $9,436 | $27,916 | $31,930 | Segment Income from Operations (in thousands) | Segment | Q3 2020 | Q3 2019 | 9 Months 2020 | 9 Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Energy Solutions | $7,276 | $7,633 | $24,479 | $23,275 | | Industrial Solutions | $101 | $2,794 | $1,593 | $3,911 | | Fluid Handling Solutions | $1,438 | $818 | $4,878 | $4,657 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the impact of COVID-19 on sales and profitability, highlighting cost reduction measures, improved liquidity, and a decrease in backlog - The company has taken proactive cost reduction measures in response to COVID-19, including headcount reductions, lower discretionary spending, temporary salary reductions for senior management, and a temporary furlough for U.S. employees[97](index=97&type=chunk) - On July 6, 2020, Todd Gleason became the new Chief Executive Officer, succeeding Dennis Sadlowski. The company incurred **$1.5 million** in executive transition expenses in Q3 2020 related to this change[100](index=100&type=chunk)[106](index=106&type=chunk) [Consolidated Results of Operations](index=21&type=section&id=Consolidated%20Results%20of%20Operations) Consolidated net sales declined in Q3 2020 and the first nine months due to market weakness, impacting gross margin and non-GAAP operating income - Orders booked were **$66.8 million** in Q3 2020, a significant decrease from **$115.7 million** in Q3 2019, primarily due to the impact of the COVID-19 pandemic on refinery, midstream oil and gas, and pollution control end markets[110](index=110&type=chunk) Reconciliation of GAAP to Non-GAAP Operating Income (in millions) | Metric | Q3 2020 | Q3 2019 | 9 Months 2020 | 9 Months 2019 | | :--- | :--- | :--- | :--- | :--- | | **Operating income (GAAP)** | **$1.0** | **$4.1** | **$9.7** | **$11.0** | | Operating margin (GAAP) | 1.3% | 4.8% | 4.2% | 4.4% | | Amortization & earnout | $2.1 | $2.2 | $5.5 | $6.5 | | Restructuring expenses | $0.9 | $0.7 | $1.8 | $1.0 | | Acquisition & integration | $0.4 | $— | $1.1 | $— | | Executive transition | $1.5 | $— | $1.5 | $— | | **Non-GAAP operating income** | **$5.9** | **$7.0** | **$19.6** | **$18.6** | | Non-GAAP operating margin | 7.6% | 8.2% | 8.4% | 7.4% | [Business Segments Analysis](index=24&type=section&id=Business%20Segments%20Analysis) Segment performance varied in Q3 2020, with Energy Solutions sales up but income down, Industrial Solutions sales and income significantly lower, and Fluid Handling Solutions improving income despite lower sales - Energy Solutions Q3 sales increased due to strength in SCR and acoustical technologies for power generation, offset by a **$5.1 million** decrease in midstream oil & gas equipment sales[124](index=124&type=chunk) - Industrial Solutions Q3 sales decreased primarily due to a **$13.7 million** drop in air pollution control technologies, partially offset by **$5.3 million** in sales from the new EIS acquisition[127](index=127&type=chunk) - Fluid Handling Solutions Q3 operating income increased by **$0.6 million** despite lower sales, driven by cost reductions and improved efficiency from capital investments[132](index=132&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity strengthened with increased working capital and cash, despite higher debt from acquisitions, maintaining compliance with debt covenants - Backlog decreased to **$189.1 million** as of September 30, 2020, from **$216.6 million** as of December 31, 2019, reflecting lower order intake and **$7.4 million** in order cancellations from industrial customers exposed to aerospace end markets[136](index=136&type=chunk) - Cash flow from operations improved by **$9.7 million** year-over-year for the first nine months of 2020, primarily due to better accounts receivable management and collections[149](index=149&type=chunk) Total Unused Credit Availability (in millions) | Description | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Credit Facility, revolving loans | $140.0 | $140.0 | | Draw down | $(31.0) | $(18.5) | | Letters of credit open | $(6.9) | $(11.0) | | **Amount available based on borrowing limitations** | **$75.8** | **$82.3** | [Quantitative and Qualitative Disclosures about Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate exposure on its debt, with a **$0.2 million** estimated annual impact from a 10% rate change - The company's primary market risk exposure is to interest rate changes on its **$77.9 million** of debt[156](index=156&type=chunk)[157](index=157&type=chunk) - A hypothetical **10% change** in the estimated weighted average borrowing rate at September 30, 2020, would impact earnings and cash flows by an estimated **$0.2 million** annually[157](index=157&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2020, with no material changes in internal control over financial reporting - Based on an evaluation, the CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2020[161](index=161&type=chunk) - No changes occurred in the company's internal control over financial reporting during Q3 2020 that materially affected, or are reasonably likely to materially affect, these controls[162](index=162&type=chunk) Part II [Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in legal proceedings, primarily asbestos-related lawsuits, with details referenced in Note 13 of the financial statements - For information regarding legal proceedings, the report refers to Note 13 of the Condensed Consolidated Financial Statements[165](index=165&type=chunk) [Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors were reported compared to previous filings, including the 2019 Form 10-K - No material changes in risk factors were reported compared to the 2019 Form 10-K and previous 2020 Form 10-Q filings[166](index=166&type=chunk) [Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO agreements and officer certifications - Key exhibits filed include the Separation and Consulting Agreement with former CEO Dennis Sadlowski and the Employment Agreement with new CEO Todd Gleason[174](index=174&type=chunk) - Certifications by the Chief Executive Officer and Chief Financial Officer pursuant to SEC rules are included as exhibits[175](index=175&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2020 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File No. 0-07099 CECO ENVIRONMENTAL CORP. (Exact name of registrant as specified in its charter) Delaware 13-2566064 (State or other jurisdiction ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2020 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File No. 0-07099 CECO ENVIRONMENTAL CORP. (Exact name of registrant as specified in its charter) Delaware 13-2566064 (State or other jurisdictio ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark one) ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2019 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File No. 0-7099 CECO ENVIRONMENTAL CORP. Delaware 13-2566064 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identifi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2019 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File No. 0-7099 CECO ENVIRONMENTAL CORP. (Exact name of registrant as specified in its charter) Delaware 13-2566064 (State or other jurisdic ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2019 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File No. 0-7099 CECO ENVIRONMENTAL CORP. (Exact name of registrant as specified in its charter) Delaware 13-2566064 (State or other jurisdiction ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2019 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File No. 0-7099 CECO ENVIRONMENTAL CORP. (Exact name of registrant as specified in its charter) Delaware 13-2566064 (State or other jurisdiction ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark one) ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2018 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File No. 0-7099 CECO ENVIRONMENTAL CORP. Delaware 13-2566064 (State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identific ...