Q2 2025 Performance Highlights - Backlog reached a record high of $688 million, a 76% increase year-over-year[6] - Orders hit a record of $274 million, resulting in a book-to-bill ratio of approximately 1.5x[6] - Revenue increased by 35% year-over-year to $185 million, exceeding consensus estimates[6] - Adjusted EBITDA was $23.3 million, also above consensus estimates[6] - Adjusted EPS was $0.24, in line with consensus estimates[6] H1 2025 Results and Outlook - H1 Bookings were approximately $502 million, up 76% year-over-year, with a book-to-bill ratio of approximately 1.4x[10] - H1 Revenue was approximately $362 million, a 37% increase year-over-year[10] - The company is updating its FY2025 revenue outlook to $725 million - $775 million, reflecting an approximate $25 million increase[11] - The company maintains its Adjusted EBITDA outlook at $90 million - $100 million, expecting an approximate 50% year-over-year increase[11] Financial Metrics - Q2 2025 Orders increased by 95% year-over-year to $274 million[16] - Trailing Twelve Months (TTM) Orders increased by 58% to $883 million[16] - Q2 2025 Adjusted EBITDA increased by 45% year-over-year to $23.3 million[16] - Q2 2025 Revenue increased by 35% year-over-year to $185 million[16]

Executive Summary [Second Quarter 2025 Performance Highlights](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Highlights) CECO Environmental reported a record second quarter in 2025, driven by exceptional orders growth of 95% year-over-year, leading to the highest-ever quarterly revenue and an all-time high backlog. The company also achieved significant increases in gross profit margin, operating income, net income, and Adjusted EBITDA Q2 2025 Key Financial Highlights (YoY Growth) | Metric | Q2 2025 Value | YoY Change | | :-------------------------------- | :-------------- | :--------- | | Orders | $274.1 million | +95% | | Backlog | $688.1 million | +76% | | Revenue | $185.4 million | +35% | | Gross Profit Margin | 36.2% | +37% (Gross margin $67.1M) | | Net Income (GAAP) | $9.5 million | +$5.0 million | | Net Income (non-GAAP) | $8.7 million | +$1.3 million | | GAAP EPS (diluted) | $0.26 | | | Non-GAAP EPS (diluted) | $0.24 | | | Adjusted EBITDA | $23.3 million | +45% | | Free Cash Flow | $(3.0) million | -$5.6 million | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Todd Gleason highlighted the company's record quarter, attributing it to tremendous orders growth, a robust backlog, and the strong performance of its diverse environmental solutions portfolio. He emphasized the company's ability to capitalize on "mega-theme opportunities" in industrial air, water, and energy transition markets, while maintaining high execution levels and strategic investments despite macro challenges - Record orders, highest-ever quarterly revenue, and all-time high backlog of **$688 million**[4](index=4&type=chunk) - Booked CECO's largest-ever order for emissions management in a large power generation project[4](index=4&type=chunk) - Diverse portfolio gaining traction in key markets and new geographies, including natural gas, water infrastructure, and energy transition[4](index=4&type=chunk) - Achieved highest-ever gross margins and expanded income margins while investing in commercial growth, new geographies, and operating efficiencies[5](index=5&type=chunk) [Full Year 2025 Outlook](index=1&type=section&id=Full%20Year%202025%20Outlook) CECO Environmental has raised its full-year 2025 revenue outlook to $725 million to $775 million, representing approximately 35% growth at the midpoint. The company maintained its Adjusted EBITDA outlook of $90 million to $100 million and a free cash flow conversion outlook of greater than 60% of Adjusted EBITDA, driven by a strong backlog and a growing sales pipeline 2025 Full Year Guidance (in millions) | Metric | Previous Outlook | Revised Outlook | Change | | :-------------------- | :--------------- | :-------------- | :----- | | Revenue | $700 - $750 | $725 - $775 | Raised | | Adjusted EBITDA | $90 - $100 | Maintained | | | Free Cash Flow | >60% conversion of Adjusted EBITDA | Maintained | | - Confidence bolstered by record backlog and a robust **$5.5 billion** sales pipeline[7](index=7&type=chunk)[8](index=8&type=chunk) - Strong demand for power generation, natural gas and water infrastructure, semiconductor expansion, and general industrial markets[8](index=8&type=chunk) Company Information [About CECO Environmental](index=4&type=section&id=ABOUT%20CECO%20ENVIRONMENTAL) CECO Environmental is a leading global industrial company focused on environmental solutions for industrial air, water, and energy transition markets. It provides innovative solutions and expertise to help businesses grow safely, cleanly, and efficiently, improving air/water quality, optimizing emissions, and increasing energy efficiency across various highly-engineered applications - Core Business: Leading environmentally focused, diversified industrial company[13](index=13&type=chunk) - Solutions: Innovative solutions and application expertise for industrial air, industrial water, and energy transition markets[13](index=13&type=chunk) - Impact: Helps companies protect people, the environment, and industrial equipment through safe, clean, and more efficient solutions[13](index=13&type=chunk) - Key End Markets: Power generation, hydrocarbon processing, EV production, polysilicon fabrication, semiconductor, battery production/recycling, specialty metals, beverage can, water/wastewater treatment, and other industrial sectors[13](index=13&type=chunk) [Investor Relations & Conference Call](index=4&type=section&id=Investor%20Relations%20%26%20Conference%20Call) The company scheduled a conference call for July 29, 2025, to discuss Q2 2025 financial results, with webcast and replay options available via its investor relations website. Investor contact information is also provided - Conference Call: Scheduled for **July 29, 2025, at 8:30 a.m. ET**[10](index=10&type=chunk) - Access: Available via webcast on the Investor Relations portion of the website (https://investors.cecoenviro.com) or directly via https://edge.media-server.com/mmc/p/ox29vy4b[10](index=10&type=chunk) - Replay: Available on the company's website for one year[11](index=11&type=chunk) - Investor Contact: Marcio Pinto (VP - Financial Planning and Investor Relations) and Three Part Advisors, LLC[14](index=14&type=chunk) Consolidated Financial Statements [Consolidated Balance Sheets](index=5&type=section&id=CECO%20ENVIRONMENTAL%20CORP.%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, CECO Environmental reported an increase in total assets to $876.6 million from $759.7 million at December 31, 2024. Total liabilities also increased to $573.4 million from $507.8 million, while total shareholders' equity grew to $303.2 million from $251.9 million over the same period Balance Sheet Snapshot (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :-------------- | :---------------- | | Total assets | $876,582 | $759,699 | | Total liabilities | $573,363 | $507,806 | | Total shareholders' equity | $303,219 | $251,893 | | Cash and cash equivalents | $36,823 | $37,832 | | Accounts receivable, net | $161,498 | $159,572 | | Costs and estimated earnings in excess of billings | $91,262 | $69,889 | | Inventories | $59,792 | $42,624 | | Goodwill | $288,043 | $269,747 | | Intangible assets – finite life, net | $106,871 | $74,050 | | Accounts payable | $125,971 | $109,671 | | Billings in excess of costs and estimated earnings | $93,045 | $81,501 | | Debt, less current portion | $236,877 | $217,230 | [Consolidated Statements of Income](index=6&type=section&id=CECO%20ENVIRONMENTAL%20CORP.%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) For the three months ended June 30, 2025, net sales increased by 35% to $185.4 million, and net income attributable to CECO Environmental Corp. more than doubled to $9.5 million from $4.5 million in the prior year. For the six months, net sales grew to $362.1 million, and net income surged to $45.5 million, significantly higher than $6.0 million in the comparable prior year period, partly due to a gain on the sale of the Global Pump Solutions business Income Statement (in thousands, except per share data) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $185,391 | $137,522 | $362,088 | $263,854 | | Gross profit | $67,108 | $49,047 | $129,270 | $94,179 | | Income from operations | $18,061 | $9,257 | $79,930 | $16,943 | | Net income attributable to CECO Environmental Corp. | $9,510 | $4,485 | $45,494 | $5,993 | | Diluted EPS | $0.26 | $0.12 | $1.24 | $0.17 | - Significant Item (Six Months): Gain on sale of Global Pump Solutions business: **$(64,502) thousand (income)** for the six months ended June 30, 2025[18](index=18&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=CECO%20ENVIRONMENTAL%20CORP.%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, net cash used in operating activities was $(19.4) million, a decrease from $7.9 million provided in the prior year. Net cash provided by investing activities was $3.8 million, primarily due to net cash proceeds from the sale of the Global Pump Solutions business, offsetting cash paid for acquisitions. Net cash provided by financing activities was $14.2 million, driven by net borrowings on revolving credit lines Cash Flow Summary (in thousands) | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash (used in) provided by operating activities | $(19,363) | $7,891 | | Net cash provided by (used in) investing activities | $3,813 | $(6,811) | | Net cash provided by (used in) financing activities | $14,197 | $(16,565) | | Net decrease in cash, cash equivalents and restricted cash | $(1,292) | $(18,534) | | Cash, cash equivalents and restricted cash at end of period | $36,909 | $36,914 | - Key Investing Activity: Net cash proceeds for sale of Global Pump Solutions business: **$105,860 thousand**. Net cash paid for acquisitions, net of cash acquired: **$(97,615) thousand**[20](index=20&type=chunk) Non-GAAP Financial Disclosures [Reconciliation of GAAP to Non-GAAP Measures](index=8&type=section&id=CECO%20ENVIRONMENTAL%20CORP.%20RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20MEASURES) The report provides reconciliations for non-GAAP operating income, net income, Adjusted EBITDA, and free cash flow, adjusting for items like amortization, acquisition and integration expenses, and the gain on sale of the Global Pump Solutions business. For Q2 2025, non-GAAP operating income was $18.3 million, non-GAAP net income was $8.7 million, and Adjusted EBITDA was $23.3 million Non-GAAP Financials (in millions) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Non-GAAP operating income | $18.3 | $12.6 | $26.9 | $22.8 | | Non-GAAP operating margin | 9.9% | 9.2% | 7.4% | 8.6% | | Non-GAAP net income | $8.7 | $7.4 | $12.4 | $11.5 | | Adjusted EBITDA | $23.3 | $16.1 | $37.3 | $29.3 | | Non-GAAP diluted EPS | $0.24 | $0.20 | $0.34 | $0.32 | | Free cash flow | $(3.0) | $2.6 | $(18.0) | $0.7 | - Key Adjustments: Exclusions include amortization expenses, acquisition and integration expenses, gain on sale of Global Pump Solutions business, other operating (income) expense, net, foreign currency remeasurement, and tax (benefit) expense of adjustments[22](index=22&type=chunk)[23](index=23&type=chunk)[26](index=26&type=chunk) [Note Regarding Non-GAAP Financial Measures](index=9&type=section&id=NOTE%20REGARDING%20NON-GAAP%20FINANCIAL%20MEASURES) CECO provides non-GAAP measures to offer a clearer view of its core operations, excluding items deemed not indicative of ongoing performance. The company emphasizes that these measures are supplemental to GAAP, have limitations, and may not be comparable to those of other companies. Forward-looking non-GAAP measures are not reconciled to GAAP due to the unpredictability of certain impacting items - Purpose: To help individuals better assess the ongoing nature of CECO's core operations and compare results over multiple periods[25](index=25&type=chunk)[26](index=26&type=chunk) - Limitations: Not calculated in accordance with GAAP, should be considered supplemental, and do not reflect all costs[27](index=27&type=chunk) - Items Excluded: Amortization, contingent retention/earnout expenses, restructuring expenses, acquisition/integration expenses, foreign currency remeasurement, and other nonrecurring/infrequent items[26](index=26&type=chunk) - Forward-Looking Reconciliation: Not provided due to unreasonable efforts and inability to predict with certainty the type and extent of items impacting GAAP measures[29](index=29&type=chunk) Legal Disclosures [Safe Harbor Statement](index=10&type=section&id=SAFE%20HARBOR) This section serves as a cautionary statement regarding forward-looking statements made in the press release. It outlines that such statements are based on management's views and assumptions, involve inherent risks and uncertainties that could cause actual results to differ materially, and the company undertakes no obligation to update them unless required by law - Definition: Statements other than historical fact, including beliefs and expectations, are forward-looking[31](index=31&type=chunk) - Risks: Involve risks and uncertainties that may cause actual results to differ materially, including economic conditions, raw material prices, inflation, fixed-price contracts, supply chain issues, litigation, debt, regulations, and catastrophic events[31](index=31&type=chunk) - No Obligation to Update: The company undertakes no obligation to update or review any forward-looking statements, except as required by federal securities laws[31](index=31&type=chunk)

Core Viewpoint - CECO Environmental Corp. reported record financial results for Q2 2025, driven by a 95% increase in orders year-over-year and a significant rise in backlog and revenue, indicating strong demand in environmental solutions markets [4][6][8]. Financial Performance - Orders reached $274.1 million, up 95% compared to the same quarter last year [8]. - Backlog increased to $688 million, reflecting a 76% year-over-year growth [4][8]. - Revenue for the quarter was $185.4 million, a 35% increase from Q2 2024 [8]. - Operating income was $18.1 million, up from $9.3 million in the prior year [4][8]. - Non-GAAP operating income was $18.3 million, representing a 45% increase from $12.6 million in Q2 2024 [4][8]. - Net income for the quarter was $9.5 million, compared to $4.5 million in Q2 2024 [4][8]. - Adjusted EBITDA was $23.3 million, up 45% from $16.1 million in the same quarter last year [4][8]. Guidance and Outlook - The company raised its full-year revenue outlook to between $725 million and $775 million, a 35% increase at the midpoint compared to previous guidance [6][7]. - Adjusted EBITDA is expected to remain between $90 million and $100 million for the full year [6]. - The sales pipeline is robust at $5.5 billion, supporting strong demand across various sectors including power generation and water infrastructure [7]. Market Position and Strategy - CECO's diverse portfolio in environmental solutions is gaining traction in key markets and new geographies [4]. - The company is focused on capitalizing on mega-theme opportunities in energy transition and infrastructure projects [4][5]. - The highest-ever gross margins and expanded income margins were achieved while maintaining investments in growth and efficiency [5].

Core Viewpoint - CECO Environmental Corp. will report its second quarter financial results on July 29, 2025, and will host an earnings call at 8:30 a.m. Eastern Time [1][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 applications across various industries, including power generation, petrochemical processing, and battery production [3] Financial Communication - The earnings call will be accessible via a live webcast, with registration required for dial-in information [2] - A replay of the conference call will be available on the company's website shortly after the live event [2]

Company Overview and Strategy - CECO Environmental aims to be the leading global sustainable industrial environmental solutions company[7] - The company focuses on organic growth, programmatic M&A, debt management, and stock buybacks[8, 14] - CECO's capital allocation strategy includes investments in sales teams, engineers, project managers, and cybersecurity[17] - CECO provides 100% environmental solutions for industrial end-markets, with a diversified revenue model[18, 19] Financial Performance and Outlook - The company's backlog at the end of 2024 was greater than $540 million, with a 3-year Compound Annual Growth Rate (CAGR) of +36%[28] - CECO's sales pipeline is greater than $5 billion, up from $1.5 billion in 2021[23] - Q1 2025 orders reached a record $228 million, a 57% year-over-year increase[31, 33] - Q1 2025 revenue was $177 million, a 40% year-over-year increase[31, 33] - The company is maintaining its FY2025 revenue outlook of $700-$750 million, with a midpoint year-over-year growth of 30%, including 15% organic growth and 15% inorganic growth[47]

CECO Environmental (CECO) FY Conference Summary Company Overview - CECO Environmental focuses on delivering environmental solutions to industrial customers, with a global presence and approximately half of its business outside the US, up from less than 20% in 2020 [3][7] - The company has three leading businesses in industrial air, industrial water, and energy transition, with a strong organic growth rate averaging 10% per year since 2021 [4][3] Financial Performance - CECO has a record backlog across all businesses, with over $600 million in backlog as of Q1 2025, indicating strong future growth potential [13] - The company reported a revenue outlook for 2025 between $700 million and $750 million, with expected EBITDA of $90 million to $100 million, reflecting a 30% year-over-year growth [12][28] - Orders for Q1 2025 were $228 million, with revenue of $177 million, exceeding consensus expectations [15][12] - The trailing twelve-month revenue reached $608 million, marking a record for the company [18] Growth Strategy - CECO has executed approximately 13 transactions in the last four years, with over half of acquisitions doubling in revenue within 24 months [5][25] - The company emphasizes a focused capital allocation model, prioritizing organic growth and managing debt levels to remain flexible for M&A opportunities [4][8] - Recent acquisitions include Profire Energy, which is expected to double in size within five years, and Verantis, which has shown strong order momentum [16][19][53] Market Position and Trends - CECO operates in diversified industrial segments, with a balanced revenue model: 30% recurring business, 25% repeat solutions, and 45% large customized products [10][9] - The company benefits from macro trends such as reshoring, electrification, and infrastructure build-out, which are driving demand in energy and industrial markets [11] - CECO's project execution and gross profit margins have improved, with expectations to maintain a gross profit margin of around 35% [22][23] Challenges and Outlook - The company is managing inflation and tariff impacts, which have pressured adjusted EBITDA but are considered manageable [29][31] - CECO's management is optimistic about the growth of its order book and pipeline, with customers accelerating order placements [29] - The company is focused on integrating acquisitions effectively, with Profire's integration ahead of schedule and no employee turnover since the acquisition [34][36] Regulatory Environment - CECO anticipates that changes in environmental regulations will not significantly impact its operations, as existing technologies meet federal standards [55][56] - The company is positioned to benefit from trends in energy production, including gas turbine and nuclear power developments, although these are not primary drivers for stock ownership [58][59] Conclusion - CECO Environmental is committed to delivering strong growth and sustainable shareholder value through a robust acquisition strategy, effective integration of new businesses, and a focus on organic growth opportunities [30][31]

Group 1 - CECO Environmental (NASDAQ: CECO) is experiencing increased expectations and momentum due to a recalibrated strategy [1] - The investment group "Value In Corporate Events" focuses on identifying opportunities in IPOs, mergers & acquisitions, earnings reports, and corporate capital allocation changes [1] - The group covers 10 major events monthly to find the best investment opportunities [1] Group 2 - The article does not provide specific financial data or performance metrics for CECO Environmental or any other companies mentioned [2]

Company Contact: Peter Johansson Chief Financial and Strategy Officer 888-990-6670 Investor Relations Contact: ADDISON, Texas, May 06, 2025 (GLOBE NEWSWIRE) -- CECO Environmental Corp. (Nasdaq: CECO), a leading environmentally focused, diversified industrial company whose solutions protect people, the environment and industrial equipment, today announces that CECO management will participate at the following investor conferences: The presentations will be available on the Investor Relations section of the C ...

[Part I – Financial Information](index=3&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) CECO Environmental Corp. reported Q1 2025 net sales of $176.7 million and net income of $36.0 million, significantly boosted by a divestiture gain Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $476,101 | $330,971 | | **Total assets** | $957,095 | $759,699 | | **Total current liabilities** | $278,754 | $244,662 | | **Total liabilities** | $667,044 | $507,806 | | **Total shareholders' equity** | $290,051 | $251,893 | Condensed Consolidated Statement of Income Highlights (in thousands, except per share data) | Account | 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 Global Pump Solutions business | $64,502 | $— | | Net income attributable to CECO | $35,984 | $1,508 | | Diluted EPS | $0.98 | $0.04 | Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | 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)** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Q1 2025 notes detail Profire Energy acquisition, Global Pump Solutions divestiture gain, increased debt, and litigation - On January 3, 2025, the Company acquired all outstanding shares of Profire Energy, Inc. for **$122.7 million** in cash, financed through cash on hand and a draw on the revolving credit facility[72](index=72&type=chunk) - On March 31, 2025, the Company finalized the sale of its Global Pump Solutions business for a purchase price of **$109.5 million**, recognizing a pre-tax gain on the sale of **$64.5 million**[86](index=86&type=chunk) Debt Composition (in thousands) | Debt Component | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Revolving credit facility | $334,700 | $214,200 | | Joint venture term debt | $6,885 | $7,297 | | **Total outstanding borrowings** | **$339,710** | **$218,880** | Segment Operating Income (in thousands) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Engineered Systems | $18,740 | $16,277 | | Industrial Process Solutions | $69,650 | $7,100 | | **Total Segment Operating Income** | **$88,390** | **$23,377** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q1 2025 orders and net sales increased, with GAAP operating income boosted by divestiture, non-GAAP income declined - Orders booked increased **57.0%** to **$227.9 million** in Q1 2025 from **$145.3 million** in Q1 2024, with organic bookings contributing approximately **81%** of the total[111](index=111&type=chunk) - Backlog increased to **$602.0 million** as of March 31, 2025, from **$540.9 million** as of December 31, 2024. Substantially all backlog is expected to be delivered within 18 to 24 months[129](index=129&type=chunk) Reconciliation of GAAP to Non-GAAP Operating Income (in millions) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Operating income (GAAP)** | **$61.9** | **$7.7** | | Amortization expenses | $3.1 | $2.2 | | Acquisition and integration expenses | $8.1 | $0.2 | | Gain on sale of Global Pump Solutions business | $(64.5) | $— | | Other expenses | $— | $0.1 | | **Non-GAAP operating income** | **$8.6** | **$10.2** | | **Non-GAAP operating margin** | **4.9%** | **8.1%** | [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Q1 2025 net sales rose **39.9%** to **$176.7 million**, with GAAP operating income heavily influenced by a **$64.5 million** divestiture gain - Net sales increased **$50.4 million (39.9%)** to **$176.7 million**, with organic revenue contributing **$142.4 million (81% of total sales)**[112](index=112&type=chunk) - Gross profit as a percentage of sales slightly decreased to **35.2%** in Q1 2025 from **35.7%** in Q1 2024 due to project mix[113](index=113&type=chunk) - Selling and administrative expenses increased to **$53.6 million** from **$34.9 million**, primarily due to increased headcount and expenses from prior year acquisitions[114](index=114&type=chunk) - Non-GAAP operating margin decreased to **4.9%** for Q1 2025 from **8.1%** for Q1 2024[117](index=117&type=chunk) [Business Segments](index=34&type=section&id=Business%20Segments) Engineered Systems and Industrial Process Solutions segments saw increased orders and sales, with IPS operating income boosted by divestiture gain - Engineered Systems segment orders increased **62.9%** to **$163.0 million**, with organic bookings accounting for **88%** of the total[123](index=123&type=chunk) - Industrial Process Solutions segment operating income increased by **$62.6 million** to **$69.7 million**, primarily due to the gain on the sale of the Global Pump Solutions business[128](index=128&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity strengthened with cash increasing to **$146.5 million**, driven by divestiture proceeds and credit facility borrowings - Working capital increased to **$197.4 million** at March 31, 2025, from **$86.3 million** at December 31, 2024[132](index=132&type=chunk) - Cash and cash equivalents totaled **$146.5 million** at March 31, 2025, a substantial increase from **$37.8 million** at December 31, 2024[133](index=133&type=chunk) - In April 2025, subsequent to the quarter end, the Company made payments of **$98.7 million** on its Credit Facility[135](index=135&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risks from interest rate and foreign currency changes, with a **10%** rate change impacting earnings by **$2.5 million** annually - The company's primary market risks are changes in interest rates and foreign currency exchange rates[146](index=146&type=chunk) - A hypothetical **10%** change in the estimated weighted average borrowing rate at March 31, 2025, would have an estimated annual impact of **$2.5 million**[147](index=147&type=chunk) - Transaction gains included in "Other expense, net" were **$1.7 million** for the three months ended March 31, 2025, compared to **$0.8 million** in the prior year period[149](index=149&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2025, with no material changes to internal controls during the quarter - Based on an evaluation, management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[150](index=150&type=chunk) - No changes in the Company's internal control over financial reporting occurred during the quarter ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, internal controls[152](index=152&type=chunk) [Part II – Other Information](index=43&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company faces asbestos-related lawsuits through its subsidiary, but management expects no material adverse financial impact - The Company's subsidiary, Met-Pro, has been named in asbestos-related lawsuits. The Company retained these historical liabilities after the divestiture of its fluid handling business[67](index=67&type=chunk) - Management believes that none of the pending cases will have a material adverse impact upon the Company's results of operations, liquidity or financial condition[68](index=68&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) No material changes occurred in the company's risk factors from those disclosed in the Annual Report on Form 10-K for 2024 - There have been no material changes in the Company's risk factors from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[155](index=155&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company made no share repurchases in Q1 2025, with **$8.0 million** remaining available under the program expiring April 30, 2025 - The company did not repurchase any shares during the three months ended March 31, 2025[53](index=53&type=chunk)[156](index=156&type=chunk) - As of March 31, 2025, **$8.0 million** remained available under the share repurchase program, which expires on April 30, 2025[156](index=156&type=chunk) [Other Items (3, 4, 5, 6)](index=43&type=section&id=Other%20Items%20(3%2C%204%2C%205%2C%206)) The company reported no defaults on senior securities and no director or officer trading plan adoptions or terminations - **Item 3:** No defaults upon senior securities were reported[157](index=157&type=chunk) - **Item 5:** No director or Section 16 officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter[159](index=159&type=chunk)

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 ...