CECO Environmental Corp. (NASDAQ:CECO) Q1 2025 Earnings Conference Call April 29, 2025 8:30 AM ET Company Participants Steven Hooser - IR Todd Gleason - CEO Peter Johansson - Chief Financial and Strategy Officer Conference Call Participants Rob Brown - Lake Street Capital Markets Bobby Brooks - Northland Capital Markets Aaron Spychalla - Craig-Hallum Capital Group Gerry Sweeney - Roth Capital Jim Ricchiuti - Needham & Company Sameer Joshi - H.C. Wainwright Operator Good day, and thank you for standing by. W ...

CECO Environmental (CECO) Q1 2025 Earnings Call April 29, 2025 02:13 PM ET Speaker0 Good day, and thank you for standing by. Welcome to the CECO Environmental First Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Steven Hoosier, Investor Relations. Please go ahead. Speake ...

Q1 2025 Earnings Release April 29, 2025 Forward-looking statements and Non-GAAP information This presentation contains forward-looking statements with predictions, projections and other statements about future events. These statements are made on the basis of management's views and assumptions regarding future events and business performance. We use words such as "believe," "expect," "anticipate," "intends," "estimate," "forecast," "project," "will," "plan," "should" and similar expressions to identify forw ...

CECO Environmental (CECO) Q1 2025 Earnings Call April 29, 2025 08:30 AM ET Company Participants Steven Hooser - Partner, Senior MD & President - IDEAS Conferences​Todd Gleason - CEO & Member of Board of DirectorsPeter Johansson - Senior VP, Chief Financial & Strategy Officer Conference Call Participants Rob Brown - Founding Partner & Senior Research AnalystBobby Brooks - Vice President, Senior Equity Research AnalystAaron Spychalla - Research AnalystGerry Sweeney - Managing Director, Senior Research Analyst ...

CECO Environmental (CECO) came out with quarterly earnings of $0.10 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.11 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this maker of air pollution controls and industrial ventilation systems would post earnings of $0.22 per share when it actually produced earnings of $0.27, delivering a surprise of 22.73%.Over the last four quarters, the company has surpassed con ...

[CECO Environmental Q1 2025 Results](index=1&type=section&id=CECO%20ENVIRONMENTAL%20REPORTS%20FIRST%20QUARTER%202025%20RESULTS) [Financial & Operational Highlights](index=1&type=section&id=First%20Quarter%20Summary) CECO achieved record orders, backlog, and revenue in Q1 2025, demonstrating strong market demand despite a decline in non-GAAP profitability and negative free cash flow - The company achieved record orders of **$228 million** and a record backlog exceeding **$600 million** for the first time, driven by strong demand in industrial reshoring, electrification, and power generation[4](index=4&type=chunk) Q1 2025 Key Performance Indicators (vs. Q1 2024) | Metric | Q1 2025 | Change (YoY) | | :--- | :--- | :--- | | Orders | $227.9 million | +57% | | Backlog | $602.0 million | +55% | | Revenue | $176.7 million | +40% | | Gross Profit | $68.0 million | +28% | | GAAP Net Income | $36.0 million | +$34.5M | | Non-GAAP Net Income | $3.5 million | -$0.5M | | GAAP EPS (diluted) | $0.98 | +$0.94 | | Non-GAAP EPS (diluted) | $0.10 | -$0.01 | | Adjusted EBITDA | $14.0 million | +6% | | Free Cash Flow | $(15.1) million | -$13.2M | [Management Commentary & Strategy](index=1&type=section&id=Management%20Commentary%20%26%20Strategy) Management expressed confidence in growth, attributing Q1 Adjusted EBITDA decline to strategic investments and planning Q2 cost-saving initiatives for margin expansion - Strategic actions in Q1, such as price increases for tariffs, pulling in inventory purchases, and adding key personnel, negatively impacted short-term Adjusted EBITDA but were deemed necessary to manage the record backlog[5](index=5&type=chunk) - The company plans strategic cost actions starting in Q2 2025, focusing on eliminating redundant G&A expenses and expanding productivity initiatives, which are expected to support operating margin expansion[5](index=5&type=chunk) - Management believes the company is well-positioned to handle potential tariff impacts because it manufactures a majority of its products in the same regions where they are sold[8](index=8&type=chunk) [2025 Full Year Guidance](index=1&type=section&id=2025%20Full%20Year%20Guidance) CECO maintained its full-year 2025 guidance, anticipating significant year-over-year growth in revenue and Adjusted EBITDA despite Q1's mixed profitability Full Year 2025 Guidance | Metric | Guidance Range | Midpoint YoY Growth | | :--- | :--- | :--- | | Revenue | $700 - $750 million | ~30% | | Adjusted EBITDA | $90 - $100 million | ~50% | - The company expects its 2025 adjusted free cash flow to be between **60% and 75%** of Adjusted EBITDA[6](index=6&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) [Consolidated Balance Sheets](index=5&type=section&id=CECO%20ENVIRONMENTAL%20CORP.%20CONSOLIDATED%20BALANCE%20SHEETS) CECO's balance sheet expanded significantly as of March 31, 2025, with total assets and liabilities increasing, driven by higher cash and long-term debt Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $146,471 | $37,832 | | Total current assets | $476,101 | $330,971 | | Total assets | $957,095 | $759,699 | | Debt, less current portion | $338,037 | $217,230 | | Total liabilities | $667,044 | $507,806 | | Total shareholders' equity | $290,051 | $251,893 | [Consolidated Statements of Income](index=6&type=section&id=CECO%20ENVIRONMENTAL%20CORP.%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) CECO reported a 40% increase in Q1 2025 net sales, with GAAP net income surging to $36.0 million primarily due to a significant gain on a business sale Q1 Income Statement (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $176,697 | $126,332 | | Gross profit | $62,162 | $45,132 | | Income from operations | $61,870 | $7,686 | | Gain on sale of business | $64,502 | $0 | | Net income attributable to CECO | $35,984 | $1,508 | | Diluted EPS | $0.98 | $0.04 | [Consolidated Statements of Cash Flows](index=7&type=section&id=CECO%20ENVIRONMENTAL%20CORP.%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Q1 2025 operating cash flow was negative, while investing activities were positive from a business sale, and financing activities provided significant cash from new borrowings Q1 Statement of Cash Flows (in thousands) | Cash Flow Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(11,696) | $1,224 | | Net cash provided by (used in) investing activities | $4,829 | $(2,694) | | Net cash provided by (used in) financing activities | $115,756 | $(6,528) | | Net increase (decrease) in cash | $108,475 | $(8,420) | [Non-GAAP Financial Measures & Reconciliations](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) [Reconciliation of GAAP to Non-GAAP Measures](index=8&type=section&id=CECO%20ENVIRONMENTAL%20CORP.%20RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20MEASURES) After adjustments, CECO's non-GAAP operating and net income declined year-over-year, though Adjusted EBITDA increased by 6% to $14.0 million GAAP to Non-GAAP Reconciliation Highlights (in millions) | Metric | Q1 2025 GAAP | Q1 2025 Non-GAAP / Adjusted | Q1 2024 Non-GAAP / Adjusted | | :--- | :--- | :--- | :--- | | Operating Income | $61.9 | $8.6 | $10.2 | | Net Income | $36.0 | $3.5 | $4.0 | | Adjusted EBITDA | N/A | $14.0 | $13.2 | | Free Cash Flow | N/A | $(15.1) | $(1.9) | - The largest adjustment from GAAP to Non-GAAP operating income was the exclusion of a **$64.5 million** gain on the sale of the Global Pump Solutions business[22](index=22&type=chunk) [Note Regarding Non-GAAP Financial Measures](index=9&type=section&id=NOTE%20REGARDING%20NON-GAAP%20FINANCIAL%20MEASURES) CECO uses non-GAAP measures to assess core operational performance by excluding non-recurring items, emphasizing they are supplemental and not comparable across all companies - Non-GAAP measures are used by management to better compare results over multiple periods by excluding items not considered indicative of ongoing operations[25](index=25&type=chunk) - Forward-looking non-GAAP measures are not reconciled to GAAP because the company cannot reasonably predict certain excluded items, such as acquisition expenses or restructuring costs[28](index=28&type=chunk) [Additional Information](index=4&type=section&id=Additional%20Information) [Earnings Conference Call](index=4&type=section&id=EARNINGS%20CONFERENCE%20CALL) A conference call and webcast were held to discuss Q1 2025 results, with a replay available on the company's investor relations website for one year - A conference call was held at **8:30 a.m. ET** on **April 29, 2025**, to discuss the financial results[10](index=10&type=chunk) - A replay of the conference call will be available for one year on the company's website[11](index=11&type=chunk) [Safe Harbor Statement](index=10&type=section&id=SAFE%20HARBOR) This legal disclaimer identifies forward-looking statements, cautioning investors about risks and uncertainties that may cause actual results to differ materially - The press release contains forward-looking statements based on management's current views and assumptions, which are subject to risks and uncertainties[30](index=30&type=chunk) - Key risks include economic conditions, inflation, supply chain challenges, integration of acquisitions, and the ability to realize synergies from transactions[30](index=30&type=chunk)

Numerous Financial Records Reflect Strength of Well-Positioned Portfolio Company Maintains Full Year Outlook ADDISON, Texas, April 29, 2025 (GLOBE NEWSWIRE) -- CECO Environmental Corp. (Nasdaq: CECO) ("CECO"), a leading environmentally focused, diversified industrial company whose solutions protect people, the environment, and industrial equipment, today reported its financial results for the first quarter of 2025. First Quarter Summary All comparisons are versus the comparable prior year period, unless oth ...

Core Viewpoint - CECO Environmental Corp. will report its first quarter financial results for 2025 on April 29, 2025, before the market opens, and will host an earnings call at 8:30 a.m. Eastern Time [1] Group 1: Financial Reporting - The earnings call will take place on April 29, 2025, at 8:30 a.m. Eastern Time [2] - Financial results and presentation will be available on the company's website [1] Group 2: Company Overview - CECO Environmental is a diversified industrial company focused on environmentally friendly solutions, serving industrial air, water, and energy transition markets globally [3] - The company operates through key business segments: Engineered Systems and Industrial Process Solutions, providing innovative technology and application expertise [3] - CECO's solutions aim to improve air quality, optimize energy value chains, and offer custom solutions across various industrial applications, including power generation and battery production [3]

Company Overview - May River Capital, a Chicago-based private equity firm, has acquired the Global Pump Solutions business of CECO Environmental Corp, including the Dean, Fybroc, and Sethco pump brands [1] - The acquired brands will be organized under a new parent company, Tusk Industrial, which focuses on high-performance pumping and fluid handling solutions for rugged environments [1][4] Tusk Industrial Details - Tusk Industrial designs, manufactures, and services pumps made from metallic, fiberglass, and thermoplastic materials for high-temperature, corrosive, and caustic industrial applications [2][4] - The company operates with over 100 employees and serves more than 1,500 customers globally from its locations in Telford, Pennsylvania, and Indianapolis, Indiana [2] Leadership and Growth Potential - Ming Cheung, President & GM of Tusk Industrial, emphasizes the partnership with May River as a significant opportunity for growth and enhanced capabilities [3] - May River's Managing Director, Pat St. John, highlights Tusk Industrial's substantial growth potential and the firm's commitment to investing in new products, market expansion, and strategic acquisitions [3]

Core Viewpoint - CECO Environmental Corp. has successfully completed the divestiture of its Fluid Handling business, known as Global Pump Solutions (GPS), to May River Capital for an enterprise value of approximately $110 million, effective March 31, 2025 [1][2][4]. Group 1: Transaction Details - The transaction was executed for a cash payment of approximately $110 million at closing [2]. - Proceeds from the divestiture will be utilized to pay down debt and fund future strategic growth investments [2]. Group 2: Business Overview - The GPS business includes three niche brands: Dean, Fybroc, and Sethco, specializing in severe service industrial pumps [3]. - GPS operates from locations in Indianapolis, Indiana, and Telford, Pennsylvania, serving over 1,500 customers globally [3]. Group 3: Strategic Implications - The divestiture allows CECO to better align its portfolio with high growth opportunities in energy and industrial markets [4]. - The sale follows recent acquisitions of Verantis Environmental and Profire Energy, creating additional capacity for further investments in CECO's growth and business expansion [4]. Group 4: Company Background - CECO Environmental is a diversified industrial company focused on environmentally friendly solutions across industrial air, water, and energy transition markets [5]. - The company provides innovative technology and application expertise to improve air quality and optimize the energy value chain [5]. Group 5: Buyer Information - May River Capital is a private equity firm based in Chicago, focusing on lower middle-market industrial growth businesses [6]. - The firm invests in advanced manufacturing, engineered products, specialized industrial services, and value-added industrial distribution services [6].