Part I – Financial Information [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) This section presents CECO Environmental Corp.'s unaudited condensed consolidated financial statements, including balance sheets, income statements, and cash flows, highlighting asset growth, sales decrease, and improved operating cash flow [Condensed Consolidated Balance Sheets](index=2&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$418.4 million** by June 30, 2020, driven by cash and goodwill, while liabilities and shareholders' equity also saw slight increases Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2020 (unaudited) | December 31, 2019 | | :--- | :--- | :--- | | **Total current assets** | $180,096 | $179,498 | | Goodwill | $159,107 | $152,020 | | **Total assets** | **$418,392** | **$408,637** | | **Total current liabilities** | $106,099 | $115,188 | | Debt, less current portion | $75,460 | $63,001 | | **Total liabilities** | **$219,350** | **$215,620** | | **Total shareholders' equity** | **$199,042** | **$193,017** | [Condensed Consolidated Statements of Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q2 2020 net sales decreased to **$75.2 million**, yet operating income more than doubled to **$4.4 million** due to reduced expenses, despite lower net income Statement of Income Summary (in thousands, except per share data) | Metric | Q2 2020 | Q2 2019 | YTD 2020 | YTD 2019 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $75,170 | $81,179 | $155,656 | $167,190 | | Gross profit | $25,816 | $26,846 | $54,095 | $55,279 | | Income from operations | $4,395 | $2,018 | $8,633 | $6,907 | | Net income | $3,258 | $5,515 | $6,670 | $7,379 | | Diluted EPS | $0.09 | $0.15 | $0.19 | $0.21 | [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Q2 2020 comprehensive income remained stable at **$4.4 million**, while the six-month period saw a decrease to **$5.6 million** due to foreign currency translation losses Comprehensive Income (in thousands) | Period | 2020 | 2019 | | :--- | :--- | :--- | | **Three months ended June 30** | | | | Net income | $3,258 | $5,515 | | Comprehensive income | $4,433 | $4,478 | | **Six months ended June 30** | | | | Net income | $6,670 | $7,379 | | Comprehensive income | $5,577 | $7,107 | [Condensed Consolidated Statements of Shareholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity) Total shareholders' equity increased to **$199.0 million** by June 30, 2020, primarily driven by net income, despite foreign currency translation losses - Total shareholders' equity grew to **$199,042 thousand** at June 30, 2020, up from **$193,017 thousand** at December 31, 2019[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly improved to **$2.1 million** for the first six months of 2020, with investing activities using **$8.1 million** and financing providing **$12.0 million** Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $2,108 | $(11,297) | | Net cash used in investing activities | $(8,116) | $(1,201) | | Net cash provided by (used in) financing activities | $12,047 | $(2,121) | | **Net increase (decrease) in cash** | **$6,180** | **$(14,483)** | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail reporting basis, COVID-19 impact, and financial specifics, including the **$10.3 million** EIS acquisition, **194** asbestos lawsuits, and a subsequent joint venture agreement - On June 4, 2020, the Company acquired 100% of Environmental Integrated Solutions (EIS) for **$10.3 million** in cash, financed by a draw on its revolving credit facility[73](index=73&type=chunk) - Goodwill increased by **$7.0 million** during the first six months of 2020 due to acquisitions[36](index=36&type=chunk) - As of June 30, 2020, the company's subsidiary Met-Pro had **194** pending asbestos-related cases[67](index=67&type=chunk) - Cumulative settlement payments since 2002 total **$3.1 million**, with insurers covering **$2.9 million**[68](index=68&type=chunk) - On July 31, 2020, the company entered into a joint venture agreement with Mader Machine Co., contributing its Effox-Flextor damper business[87](index=87&type=chunk) - CECO will hold a **70%** equity interest and **50%** voting interest in the joint venture[87](index=87&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2020 financial results, noting a **7.4%** sales decrease to **$75.2 million** due to COVID-19, offset by increased operating income from cost reductions, alongside CEO succession and liquidity analysis - On July 6, 2020, Todd Gleason commenced serving as the new Chief Executive Officer, succeeding Dennis Sadlowski[98](index=98&type=chunk) - The company implemented proactive cost reduction measures in response to COVID-19, including temporary senior management salary reductions and a 2-week furlough for U.S.-based employees[95](index=95&type=chunk) GAAP to Non-GAAP Operating Income Reconciliation (Q2, in millions) | Metric | Q2 2020 | Q2 2019 | | :--- | :--- | :--- | | GAAP Operating Income | $4.4 | $2.0 | | GAAP Operating Margin | 5.9% | 2.5% | | Non-GAAP Operating Income | $7.4 | $4.4 | | Non-GAAP Operating Margin | 9.8% | 5.4% | [Results of Operations](index=20&type=section&id=Results%20of%20Operations) Q2 2020 net sales decreased **7.4%** to **$75.2 million**, while gross profit margin improved to **34.3%** and selling and administrative expenses fell due to cost-cutting, with orders booked significantly declining - Orders booked were **$60.0 million** during Q2 2020, compared to **$100.3 million** in Q2 2019, a decrease attributed to the COVID-19 slowdown impacting customers[108](index=108&type=chunk) - Selling and administrative expenses decreased to **$18.4 million** in Q2 2020 from **$22.4 million** in Q2 2019, primarily due to cost reduction measures taken in response to the COVID-19 pandemic[109](index=109&type=chunk) - Interest expense decreased to **$0.9 million** in Q2 2020 from **$1.5 million** in Q2 2019 due to lower interest rates and a reduced debt balance[117](index=117&type=chunk) [Business Segments](index=22&type=section&id=Business%20Segments) Q2 2020 saw Energy Solutions operating income grow to **$8.6 million**, while Industrial Solutions' operating income declined, and Fluid Handling Solutions' operating income increased to **$1.8 million** despite sales decreases Segment Operating Income (Q2, in thousands) | Segment | Q2 2020 | Q2 2019 | | :--- | :--- | :--- | | Energy Solutions | $8,646 | $6,351 | | Industrial Solutions | $19 | $515 | | Fluid Handling Solutions | $1,817 | $1,481 | [Backlog](index=24&type=section&id=Backlog) Company backlog decreased to **$204.6 million** by June 30, 2020, from **$216.6 million** at year-end 2019, including **$8.8 million** from the EIS acquisition - Backlog decreased from **$216.6 million** at year-end 2019 to **$204.6 million** at June 30, 2020[134](index=134&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity improved with working capital at **$74.0 million** and cash from operations at **$2.1 million**, with **$88.5 million** available under the credit facility despite increased debt for acquisitions - Cash provided by operating activities for the first six months of 2020 was **$2.1 million**, a significant improvement from the **$11.3 million** used in the same period of 2019[146](index=146&type=chunk) Credit Facility Availability (in millions) | Metric | June 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Total unused credit availability | $100.2 | $110.5 | | Amount available based on borrowing limitations | $88.5 | $82.3 | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risks from interest rate fluctuations on variable-rate debt, with a **10%** rate change impacting annual earnings by **$0.2 million**, and considers foreign currency exposure immaterial - The estimated impact of a hypothetical **10%** change in the weighted average borrowing rate at June 30, 2020 is **$0.2 million** on an annual basis[156](index=156&type=chunk) [Item 4. Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2020, with no material changes to internal control over financial reporting - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2020[159](index=159&type=chunk) - No changes in internal control over financial reporting occurred during the six months ended June 30, 2020, that materially affected, or are reasonably likely to materially affect, the company's internal control[160](index=160&type=chunk) Part II – Other Information [Item 1. Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 13 for details on legal proceedings, primarily focusing on asbestos-related lawsuits against Met-Pro Technologies LLC - For information on legal proceedings, the report refers to Note 13 of the unaudited Condensed Consolidated Financial Statements[165](index=165&type=chunk) [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) This section supplements existing risk factors, emphasizing the significant adverse impact of the COVID-19 pandemic on the company's business, operations, and financial condition - The company faces risks related to health epidemics, including the COVID-19 pandemic, which may adversely affect its business, results of operations, and financial condition[167](index=167&type=chunk)[168](index=168&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - None[171](index=171&type=chunk) [Item 3. Defaults Upon Senior Securities](index=28&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[171](index=171&type=chunk) [Item 4. Mine Safety Disclosures](index=28&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[172](index=172&type=chunk) [Item 5. Other Information](index=28&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this item - None[172](index=172&type=chunk) [Item 6. Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the quarterly report, including the 2020 Employee Stock Purchase Plan, CEO/CFO certifications, and Inline XBRL data - Exhibits filed include the 2020 Employee Stock Purchase Plan, CEO/CFO certifications, and Inline XBRL data[173](index=173&type=chunk)[175](index=175&type=chunk)

Part I – Financial Information This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for the first quarter of 2020, covering financial performance, liquidity, and internal controls [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for CECO Environmental Corp. as of March 31, 2020, including Balance Sheets, Statements of Income, Comprehensive Income, Shareholders' Equity, and Cash Flows, along with detailed notes on accounting policies, segment performance, debt, and contingencies [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2020, total assets increased to $445.3 million and liabilities to $250.7 million, primarily due to higher cash and long-term debt, while shareholders' equity slightly increased to $194.6 million Balance Sheet Highlights (in thousands) | Balance Sheet Item | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $82,528 | $35,602 | | **Total current assets** | $218,318 | $179,498 | | **Total assets** | $445,257 | $408,637 | | **Debt, less current portion** | $105,481 | $63,001 | | **Total liabilities** | $250,651 | $215,620 | | **Total shareholders' equity** | $194,606 | $193,017 | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For Q1 2020, net sales decreased to $80.5 million, but net income significantly increased to $3.4 million, or $0.10 per diluted share, primarily due to lower interest and income tax expenses despite stable gross profit Q1 Income Statement Summary (in thousands, except per share data) | Metric | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Net sales | $80,486 | $86,011 | | Gross profit | $28,279 | $28,432 | | Income from operations | $4,239 | $4,890 | | Net income | $3,412 | $1,864 | | Diluted EPS | $0.10 | $0.05 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2020, the company generated $7.0 million in operating cash flow and received $42.3 million from financing activities, leading to a net cash increase of $47.1 million and an ending cash balance of $84.1 million Q1 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Net cash from operating activities | $7,001 | $(13,741) | | Net cash used in investing activities | $(976) | $(423) | | Net cash from financing activities | $42,250 | $(1,816) | | **Net increase (decrease) in cash** | **$47,148** | **$(15,533)** | | **Cash at end of period** | **$84,106** | **$28,905** | - The significant increase in cash from financing activities was driven by **$49.5 million** in borrowings on revolving credit lines during Q1 2020[20](index=20&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail reporting basis, COVID-19 impact, and specifics on financial statement items, including a goodwill impairment assessment, $108.0 million in outstanding debt, asbestos litigation, and segment performance breakdown - The company considered the impact of COVID-19 and determined there were no material adverse impacts on its results of operations and financial position as of March 31, 2020. However, the full future impact remains uncertain[27](index=27&type=chunk)[29](index=29&type=chunk) - Due to negative macroeconomic indicators from the COVID-19 pandemic, the company performed a qualitative interim impairment assessment for goodwill and indefinite-life intangible assets as of March 31, 2020, and concluded they were not impaired[38](index=38&type=chunk) - As of March 31, 2020, the company had **$108.0 million** in total outstanding borrowings under its Credit Facility, with **$71.1 million** of unused credit availability. The company was in compliance with all debt covenants[40](index=40&type=chunk)[41](index=41&type=chunk)[44](index=44&type=chunk) - The company's subsidiary, Met-Pro, had **187** pending asbestos-related cases as of March 31, 2020. Management believes its insurance coverage is adequate and does not expect a material adverse impact from these cases[63](index=63&type=chunk)[65](index=65&type=chunk) Q1 2020 Segment Performance (in thousands) | Segment | Net Sales | Income from Operations | | :--- | :--- | :--- | | Energy Solutions | $50,646 | $8,557 | | Industrial Solutions | $20,356 | $1,473 | | Fluid Handling Solutions | $9,484 | $1,623 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2020 financial results, noting a 6.4% sales decrease to $80.5 million, improved gross margin to 35.2%, proactive COVID-19 cost measures, a $40.0 million credit facility drawdown for liquidity, and a backlog decrease to $208.9 million [COVID-19 Impact](index=17&type=section&id=COVID-19%20Impact) The company acknowledges the significant macroeconomic impact of COVID-19, implementing cost-reduction measures like salary reductions and furloughs, though the full future impact on operations and liquidity remains uncertain - The company has taken proactive cost reduction measures in response to COVID-19, including temporary salary reductions for the senior management team and a rolling 2-week furlough for U.S.-based employees over a 6-week period starting in April 2020[84](index=84&type=chunk) [Consolidated Results of Operations](index=18&type=section&id=Consolidated%20Results%20of%20Operations) Net sales for Q1 2020 decreased by 6.4% to $80.5 million, while gross profit margin improved to 35.2%, and orders booked declined to $75.7 million due to market weakness and COVID-19 impact Q1 Consolidated Results (in millions) | Metric | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Net sales | $80.5 | $86.0 | | Gross profit | $28.3 | $28.4 | | Gross margin | 35.2% | 33.0% | | Operating income | $4.2 | $4.9 | | Non-GAAP operating income | $6.3 | $7.2 | - Orders booked in Q1 2020 were **$75.7 million**, a decrease from **$97.3 million** in Q1 2019, primarily due to declines in refinery, midstream oil and gas, and pollution control end markets, as well as the COVID-19 slowdown[93](index=93&type=chunk) [Business Segments Analysis](index=19&type=section&id=Business%20Segments%20Analysis) In Q1 2020, Energy Solutions sales decreased by $4.6 million, Industrial Solutions sales increased by $1.5 million with higher operating income, and Fluid Handling Solutions sales decreased by $2.5 million, impacting its operating income - **Energy Solutions:** Net sales decreased by **$4.6 million**, and operating income fell by **$0.7 million** due to lower sales and higher administrative expenses[102](index=102&type=chunk)[103](index=103&type=chunk) - **Industrial Solutions:** Net sales increased by **$1.5 million**, and operating income grew by **$0.9 million**, driven by higher gross profit and lower selling expenses[104](index=104&type=chunk)[105](index=105&type=chunk) - **Fluid Handling Solutions:** Net sales decreased by **$2.5 million**, causing operating income to fall by **$0.8 million** due to the resulting decline in gross profit[106](index=106&type=chunk)[107](index=107&type=chunk) [Backlog](index=20&type=section&id=Backlog) The company's backlog, representing expected future sales, decreased from $216.6 million at year-end 2019 to $208.9 million as of March 31, 2020, with most expected to be delivered within 12 to 18 months - Backlog decreased to **$208.9 million** as of March 31, 2020, from **$216.6 million** as of December 31, 2019[109](index=109&type=chunk) [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity strengthened in Q1 2020, with working capital increasing to $109.9 million and cash to $82.5 million, primarily due to a proactive $40.0 million credit facility drawdown, resulting in $108.0 million total debt and $71.1 million unused availability - As a proactive measure related to COVID-19, the company drew down **$40.0 million** from its revolving credit facility in late March 2020 to supplement its cash position[97](index=97&type=chunk)[114](index=114&type=chunk)[124](index=124&type=chunk) Liquidity Metrics | Metric | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Working Capital | $109.9 million | $64.3 million | | Cash and Cash Equivalents | $82.5 million | $35.6 million | | Total Debt | $108.0 million | $65.5 million | [Quantitative and Qualitative Disclosures about Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate changes on variable-rate debt, with a hypothetical 10% rate change impacting annual earnings by $0.4 million, and it does not currently hedge foreign currency exposure - The company's main market risk is from interest rate changes on its variable-rate debt. A hypothetical **10%** change in the borrowing rate at March 31, 2020, is estimated to have a **$0.4 million** annual impact[131](index=131&type=chunk) [Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded the company's disclosure controls and procedures were effective as of March 31, 2020, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation, the CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2020[134](index=134&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[137](index=137&type=chunk) Part II – Other Information This section details legal proceedings, key risk factors, particularly those exacerbated by the COVID-19 pandemic, and lists exhibits filed with the report [Legal Proceedings](index=25&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 13 of the financial statements for details on the company's legal proceedings, primarily asbestos-related lawsuits against its subsidiary, Met-Pro - Information regarding legal proceedings is detailed in Note 13 to the unaudited Condensed Consolidated Financial Statements[140](index=140&type=chunk) [Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) This section supplements previous disclosures, highlighting risks exacerbated by COVID-19, including adverse global economic conditions, project cancellations, oil and gas price volatility, supplier dependence, cybersecurity threats, and the pandemic's uncertain impact on business - The COVID-19 pandemic is highlighted as a significant risk factor that could adversely affect global economic conditions, customer demand, supply chains, and capital markets, with an uncertain future impact on the business[143](index=143&type=chunk)[181](index=181&type=chunk) - The company's backlog of **$208.9 million** is not guaranteed, as customers may cancel or delay projects due to factors beyond the company's control, including the pandemic, which could affect future sales and profitability[147](index=147&type=chunk)[148](index=148&type=chunk)[151](index=151&type=chunk) - Dependence on third-party suppliers and subcontractors presents a risk, as they may default on obligations due to economic conditions or operational failures, potentially exacerbated by COVID-19 disruptions[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) - The company's debt of **$109.6 million** could make it more vulnerable to economic downturns. The COVID-19 pandemic is expected to negatively impact cash flow and liquidity, potentially affecting the ability to service debt[170](index=170&type=chunk)[172](index=172&type=chunk) [Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications under Sarbanes-Oxley Act Sections 302 and 906, and XBRL interactive data files - The filing includes certifications by the Chief Executive Officer and Chief Financial Officer under Rule 13(a)/15d-14(a) and 18 U.S. Section 1350, along with XBRL data files[184](index=184&type=chunk)

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 ...

Part I – Financial Information [Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) The company's H1 2019 financial statements reflect stable assets, increased equity, flat Q2 sales, significant net income growth from a tax benefit, and negative operating cash flow [Condensed Consolidated Balance Sheets](index=2&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2019, total assets remained stable at $391.7 million, liabilities slightly decreased, and shareholders' equity increased, with new lease accounting impacting the balance sheet Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2019 (unaudited) | December 31, 2018 | | :--- | :--- | :--- | | Cash and cash equivalents | $28,828 | $43,676 | | Total current assets | $160,514 | $160,865 | | Goodwill | $152,199 | $152,156 | | **Total assets** | **$391,726** | **$392,582** | | Total current liabilities | $99,599 | $103,886 | | Debt, less current portion | $72,539 | $74,456 | | **Total liabilities** | **$209,157** | **$214,022** | | **Total shareholders' equity** | **$182,569** | **$178,560** | - The company adopted a new lease accounting standard (ASU 2016-02) on January 1, 2019, resulting in the recognition of **$13.3 million** in Right-of-Use (ROU) assets and lease liabilities on the balance sheet[26](index=26&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2019 net sales were flat at $81.2 million, but net income surged to $5.5 million due to a tax benefit, while six-month net sales grew 7.7% to $167.2 million with increased net income Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2019 | Q2 2018 | 6 Months 2019 | 6 Months 2018 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $81,179 | $81,089 | $167,190 | $155,229 | | Gross Profit | $26,846 | $27,152 | $55,279 | $53,086 | | Income from Operations | $2,018 | $2,581 | $6,907 | $14,712 | | Net Income (Loss) | $5,515 | $(901) | $7,379 | $4,862 | | Diluted EPS | $0.15 | $(0.03) | $0.21 | $0.14 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities for H1 2019 was $11.3 million, a significant decrease from the prior year, primarily due to working capital changes and non-recurring divestiture gains Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Activity | 2019 | 2018 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(11,297) | $9,835 | | Net cash (used in) provided by investing activities | $(1,201) | $30,213 | | Net cash used in financing activities | $(2,121) | $(34,074) | | **Net (decrease) increase in cash** | **$(14,483)** | **$5,181** | - The decrease in operating cash flow was primarily driven by a **$12.1 million** decrease in net earnings adjusted for non-cash items, largely due to an **$11.1 million** gain on divestitures in 2018 which did not recur[150](index=150&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant accounting policies, new credit facility debt, segment performance, 2018 divestitures, and updates on legal contingencies, including asbestos-related lawsuits - In June 2019, the company entered into a new Credit Facility, providing a **$50.0 million** term loan and increasing the revolving credit commitment to **$140.0 million**, extending the maturity to 2024 and reducing interest rates[40](index=40&type=chunk) - A significant income tax benefit of **$4.4 million** was recognized in Q2 2019 upon finalizing a tax position related to the 2018 divestiture of its Zhongli business[74](index=74&type=chunk) - As of June 30, 2019, the company was a defendant in **198** pending asbestos-related lawsuits. Management believes its insurance coverage is adequate and the cases will not have a material adverse impact[79](index=79&type=chunk)[81](index=81&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2019 flat sales but six-month growth, strong Energy Solutions performance, Industrial Solutions' operating income decline, increased backlog, and liquidity maintained despite decreased operating cash flow Reconciliation of GAAP to Non-GAAP Operating Income (in millions) | Metric | Q2 2019 | Q2 2018 | 6 Months 2019 | 6 Months 2018 | | :--- | :--- | :--- | :--- | :--- | | GAAP Operating Income | $2.0 | $2.6 | $6.9 | $14.7 | | GAAP Operating Margin | 2.5% | 3.2% | 4.1% | 9.5% | | Adjustments (Amortization, Divestitures, etc.) | $2.4 | $2.6 | $4.6 | $(5.5) | | **Non-GAAP Operating Income** | **$4.4** | **$5.2** | **$11.5** | **$9.2** | | **Non-GAAP Operating Margin** | **5.4%** | **6.4%** | **6.9%** | **5.9%** | - Orders booked were **$103.0 million** in Q2 2019 and **$200.3 million** for the first six months of 2019, an increase from **$100.4 million** and **$195.4 million** in the respective prior-year periods[111](index=111&type=chunk) - Company backlog increased to **$208.8 million** as of June 30, 2019, compared to **$182.1 million** at December 31, 2018[138](index=138&type=chunk) [Business Segments Analysis](index=23&type=section&id=MD%26A%20-%20Business%20Segments) Energy Solutions saw strong sales and operating income growth, Industrial Solutions' operating income declined due to investments, and Fluid Handling Solutions' sales decreased due to prior-year divestitures - **Energy Solutions:** Six-month net sales increased by **$14.7 million** to **$105.8 million**, and operating income rose by **$6.1 million** to **$15.6 million**, driven by refinery products and midstream oil & gas equipment[124](index=124&type=chunk)[126](index=126&type=chunk) - **Industrial Solutions:** Six-month operating income decreased by **$1.6 million** to **$1.1 million**, mainly due to a **$0.8 million** increase in selling expenses for sales & marketing personnel and product innovation[130](index=130&type=chunk) - **Fluid Handling Solutions:** The six-month sales decrease of **$3.7 million** was primarily caused by **$4.8 million** in revenue from the divested Keystone and Strobic businesses in the prior year period[132](index=132&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=MD%26A%20-%20Liquidity%20and%20Capital%20Resources) Liquidity is maintained through operations and an amended credit facility, despite decreased cash and a significant year-over-year drop in operating cash flow due to working capital changes Credit Facility Availability (in millions) | Description | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Credit Facility, revolving loans | $140.0 | $80.0 | | Draw down | $(27.0) | — | | Letters of credit open | $(15.7) | $(29.3) | | **Total unused credit availability** | **$97.3** | **$50.7** | - For the six months ended June 30, 2019, cash used in operating activities was **$11.3 million**, a **$21.1 million** decrease from the **$9.8 million** provided in the prior year period, primarily due to working capital changes and the non-recurrence of a gain on divestitures[150](index=150&type=chunk) [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 changes on its debt, with a hypothetical 10% rate change impacting annual earnings by $0.3 million, and it does not hedge foreign currency risk - The company's main market risk is interest rate changes on its **$77.0 million** of debt. A hypothetical **10%** change in the average borrowing rate would have an estimated annual impact of **$0.3 million**[159](index=159&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2019, with no material changes to internal control over financial reporting - Based on an evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2019[162](index=162&type=chunk) Part II – Other Information [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings, detailed in Note 15, primarily involve 198 pending asbestos-related lawsuits against the company's subsidiary as of June 30, 2019 - Information regarding legal proceedings is detailed in Note 15, which discusses the ongoing asbestos-related lawsuits against the company's subsidiary[166](index=166&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) No material changes were reported in the company's risk factors from those disclosed in its 2018 Annual Report on Form 10-K - No material changes were reported in the Company's risk factors from those disclosed in the 2018 Annual Report on Form 10-K[167](index=167&type=chunk) [Other Information](index=29&type=section&id=Item%205.%20Other%20Information) The company decided to hold an annual advisory vote on named executive officer compensation, aligning with stockholder recommendations from the 2019 Annual Meeting - The company has decided to hold an advisory vote on named executive officer compensation annually, based on a stockholder recommendation at the 2019 Annual Meeting[171](index=171&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 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 ...