Core Insights - The earnings season reveals opportunities in lesser-known companies alongside major firms, highlighting the importance of broad market analysis [1] Modine Manufacturing - Modine Manufacturing Co. reported a 13-cent earnings per share beat and revenue exceeding analyst estimates in its recent earnings report for Q1 fiscal 2026 [2] - The company aims for $2 billion in data center revenue by fiscal 2028, with its climate solutions segment generating $1.4 billion in sales for fiscal 2025 [3] - Modine's strategic acquisitions contributed to a 11% year-over-year revenue growth, with a revised full-year fiscal 2026 outlook of 10-15% growth [4] - Modine shares increased by 28% in the last month, with an additional 7% upside potential projected [4] CECO Environmental - CECO Environmental Corp. exceeded analyst expectations, achieving a 35% year-over-year increase in EPS and a 45% rise in EBITDA [5] - The company anticipates $725–775 million in revenue for the full year, with shares up 50.4% in the last month and a potential 9% upside [8] - CECO's sales opportunity pipeline has grown to $5.5 billion, with a backlog of $688 million, reflecting a 274 million new bookings [7] Expro Group - Expro Group Holdings N.V. reported an 8% year-over-year revenue increase, surpassing predictions despite energy sector volatility [9] - The company expects about $1.7 billion in full-year revenue and plans a $40 million share buyback campaign [11] - Expro shares rose nearly 17% in the last month, with over 16% additional upside possible [11]

Part I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents CECO Environmental Corp.'s unaudited condensed consolidated financial statements as of June 30, 2025, detailing assets, liabilities, equity, operating results, and cash flows [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change (%) | | :-------------------- | :------------ | :---------------- | :--------- | | Total Assets | $876,582 | $759,699 | 15.4% | | Total Liabilities | $573,363 | $507,806 | 12.9% | | Total Shareholders' Equity | $303,219 | $251,893 | 20.4% | | Cash and cash equivalents | $36,823 | $37,832 | -2.7% | | Accounts receivable, net | $161,498 | $159,572 | 1.2% | | Inventories | $59,792 | $42,624 | 40.3% | | Goodwill | $288,043 | $269,747 | 6.8% | | Intangible assets – finite life, net | $106,871 | $74,050 | 44.3% | | Total current liabilities | $285,035 | $244,662 | 16.5% | | Debt, less current portion | $236,877 | $217,230 | 9.0% | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :------------- | :--------------------------- | :--------------------------- | :------------- | | Net sales | $185,391 | $137,522 | 34.8% | $362,088 | $263,854 | 37.2% | | Gross profit | $67,108 | $49,047 | 36.8% | $129,270 | $94,179 | 37.3% | | Income from operations | $18,061 | $9,257 | 95.1% | $79,930 | $16,943 | 371.7% | | Net income attributable to CECO Environmental Corp. | $9,510 | $4,485 | 112.0% | $45,494 | $5,993 | 659.1% | | Basic EPS | $0.27 | $0.13 | 107.7% | $1.29 | $0.17 | 658.8% | | Diluted EPS | $0.26 | $0.12 | 116.7% | $1.24 | $0.17 | 629.4% | - Significant growth in operating income and net income for the six months ended June 30, 2025, was primarily driven by a **$64.5 million gain** from the sale of the Global Pump Solutions business[11](index=11&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :------------- | :--------------------------- | :--------------------------- | :------------- | | Net income | $10,106 | $4,930 | 105.0% | $46,549 | $7,022 | 562.9% | | Foreign currency translation gain (loss) | $404 | $(856) | N/A | $1,923 | $(202) | N/A | | Comprehensive income | $10,510 | $4,074 | 158.0% | $48,472 | $6,820 | 610.7% | [Condensed Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity) | Metric (in thousands) | December 31, 2024 | June 30, 2025 | Change | | :-------------------- | :---------------- | :------------ | :----- | | Total CECO shareholders' equity | $247,689 | $298,364 | $50,675 | | Noncontrolling interest | $4,204 | $4,855 | $651 | | Total shareholders' equity | $251,893 | $303,219 | $51,326 | - Net income of **$45.5 million** for the six months ended June 30, 2025, increased retained earnings[14](index=14&type=chunk) - Share-based compensation increased capital in excess of par value by **$6.5 million** for the six months ended June 30, 2025[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | | :-------------------- | :--------------------------- | :--------------------------- | :----- | | Net cash (used in) provided by operating activities | $(19,363) | $7,891 | $(27,254) | | Net cash provided by (used in) investing activities | $3,813 | $(6,811) | $10,624 | | Net cash provided by (used in) financing activities | $14,197 | $(16,565) | $30,762 | | Net decrease in cash, cash equivalents and restricted cash | $(1,292) | $(18,534) | $17,242 | - Cash flow from investing activities in 2025 was primarily impacted by **$105.9 million** in proceeds from the sale of the Global Pump Solutions business and **$97.6 million** paid for the Profire acquisition[17](index=17&type=chunk) - Financing activities in 2025 were primarily driven by **$19.7 million** in net borrowings for the Profire acquisition[17](index=17&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. Basis of Reporting for Consolidated Financial Statements](index=8&type=section&id=Note%201.%20Basis%20of%20Reporting%20for%20Consolidated%20Financial%20Statements) - Financial statements are unaudited and include only normal recurring adjustments[19](index=19&type=chunk) - Management's estimates and assumptions are integral to financial statement preparation, and actual results may differ[20](index=20&type=chunk) [Note 2. Recent Financial Accounting Pronouncements](index=8&type=section&id=Note%202.%20Recent%20Financial%20Accounting%20Pronouncements) - The company is evaluating the impact of ASU 2023-09 (Income Tax Disclosures) on consolidated financial statements, effective for fiscal years after December 15, 2024[25](index=25&type=chunk) - The company is evaluating the impact of ASU 2024-03 (Income Statement Expense Disaggregation Disclosures) on consolidated financial statements, effective for fiscal years after December 15, 2026[26](index=26&type=chunk) [Note 3. Accounts Receivable](index=9&type=section&id=Note%203.%20Accounts%20Receivable) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Accounts receivable | $170,491 | $168,435 | $2,056 | | Provision for credit losses | $(8,993) | $(8,863) | $(130) | | Total accounts receivable, net | $161,498 | $159,572 | $1,926 | | Provision for Credit Losses (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------------- | :--------------------------- | :--------------------------- | | Balance at beginning of period | $8,863 | $6,460 | | Write-offs | $(1,167) | $(14) | | Changes to the provision | $1,297 | $787 | | Recoveries | — | $(651) | | Balance at end of period | $8,993 | $6,582 | [Note 4. Contract Assets and Liabilities](index=9&type=section&id=Note%204.%20Contract%20Assets%20and%20Liabilities) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Costs and estimated earnings in excess of billings on uncompleted contracts | $91,262 | $69,889 | $21,373 | | Billings in excess of costs and estimated earnings on uncompleted contracts | $93,045 | $81,501 | $11,544 | - Approximately **50%** of contract liabilities as of December 31, 2024, were recognized as revenue during the six months ended June 30, 2025[30](index=30&type=chunk) [Note 5. Inventories](index=9&type=section&id=Note%205.%20Inventories) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Raw materials | $21,461 | $24,803 | $(3,342) | | Work in process | $17,691 | $14,532 | $3,159 | | Finished goods | $20,640 | $3,289 | $17,351 | | Total inventories | $59,792 | $42,624 | $17,168 | - Provision for obsolete inventory charged to cost of sales decreased to **$0.2 million** for the six months ended June 30, 2025, compared to **$0.7 million** in the prior year period[31](index=31&type=chunk) [Note 6. Goodwill and Intangible Assets](index=11&type=section&id=Note%206.%20Goodwill%20and%20Intangible%20Assets) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Goodwill | $288,043 | $269,747 | $18,296 | | Tradename (indefinite life) | $9,666 | $9,466 | $200 | - Goodwill increased due to acquisitions of Profire, WK Group, and Verantis, and foreign currency translation, partially offset by the divestiture of the Fluid Handling business[33](index=33&type=chunk) | Finite Life Intangible Assets (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :----------------------------------------- | :------------ | :---------------- | :----- | | Intangible assets – finite life, net | $106,871 | $74,050 | $32,821 | | Amortization expense (6 months) | $(6,033) | $(4,315) | $(1,718) | | Acquisitions (6 months) | $41,810 | — | $41,810 | - No triggering events for interim impairment assessments were identified, and no impairment charges for goodwill or intangible assets were recorded for the three or six months ended June 30, 2025[37](index=37&type=chunk) [Note 7. Accrued Expenses](index=13&type=section&id=Note%207.%20Accrued%20Expenses) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Compensation and related benefits | $12,695 | $12,274 | $421 | | Accrued warranty | $5,274 | $4,558 | $716 | | Contract liability | $15,976 | $9,746 | $6,230 | | Short-term operating lease liability | $4,536 | $4,262 | $274 | | Other | $15,469 | $16,688 | $(1,219) | | Total accrued expenses | $53,950 | $47,528 | $6,422 | [Note 8. Senior Debt](index=13&type=section&id=Note%208.%20Senior%20Debt) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Revolving credit facility | $233,900 | $214,200 | $19,700 | | Joint venture term debt | $6,472 | $7,297 | $(825) | | Total outstanding borrowings | $238,734 | $218,880 | $19,854 | | Total debt, less current portion | $236,877 | $217,230 | $19,647 | - The weighted-average interest rate on outstanding borrowings was **7.27%** as of June 30, 2025, up from **7.07%** as of December 31, 2024[44](index=44&type=chunk) - The company was in compliance with all relevant financial and other restrictive covenants under its credit facility and joint venture debt as of June 30, 2025[48](index=48&type=chunk)[49](index=49&type=chunk) - Unused credit availability under the company's credit facility was **$104.3 million** as of June 30, 2025, compared to **$1.0 million** as of December 31, 2024[42](index=42&type=chunk) [Note 9. Earnings per Share](index=15&type=section&id=Note%209.%20Earnings%20per%20Share) | Metric (in thousands, except per share) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income attributable to CECO Environmental Corp. | $9,510 | $4,485 | $45,494 | $5,993 | | Basic EPS | $0.27 | $0.13 | $1.29 | $0.17 | | Diluted EPS | $0.26 | $0.12 | $1.24 | $0.17 | | Basic weighted-average shares outstanding | 35,286 | 34,918 | 35,158 | 34,882 | | Diluted weighted-average shares outstanding | 36,558 | 36,303 | 36,625 | 36,239 | - The stock repurchase program expired on April 30, 2025, with no share repurchases made during the three or six months ended June 30, 2025[54](index=54&type=chunk) [Note 10. Share-Based Compensation](index=17&type=section&id=Note%2010.%20Share-Based%20Compensation) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Share-based compensation expense | $2,900 | $2,200 | $6,200 | $3,800 | - Approximately **203,000** restricted stock units were granted in Q2 2025, up from **57,000** in Q2 2024[56](index=56&type=chunk) - **67,000** stock options were granted in the first half of 2025, compared to **25,000** in the first half of 2024[56](index=56&type=chunk) [Note 11. Pension and Employee Benefit Plans](index=17&type=section&id=Note%2011.%20Pension%20and%20Employee%20Benefit%20Plans) - The company's non-contributory defined benefit pension plan was transferred to the purchaser of the Global Pump Solutions business on March 31, 2025[59](index=59&type=chunk) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net periodic benefit cost | $0 | $57 | $(8) | $113 | [Note 12. Income Taxes](index=18&type=section&id=Note%2012.%20Income%20Taxes) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Income tax expense | $4,511 | $394 | $23,127 | $1,062 | | Effective income tax rate | 30.9% | 7.4% | 33.2% | 13.1% | - The effective tax rate is influenced by the gain on the sale of the Global Pump Solutions business, state income taxes, non-deductible share-based compensation, and varying tax rates across jurisdictions[63](index=63&type=chunk) - The company is not currently subject to Pillar Two taxation as its revenue does not meet the relevant thresholds[64](index=64&type=chunk) - The company is evaluating the impact of the recently enacted "A Big, Beautiful Bill" (HR-1) on its consolidated financial statements[65](index=65&type=chunk) [Note 13. Financial Instruments](index=20&type=section&id=Note%2013.%20Financial%20Instruments) - The fair value of debt under the credit facility and joint venture term loan was **$240.4 million** as of June 30, 2025[67](index=67&type=chunk) - **$26.2 million** in cash and cash equivalents were held outside the U.S. as of June 30, 2025[68](index=68&type=chunk) [Note 14. Commitments and Contingencies](index=20&type=section&id=Note%2014.%20Commitments%20and%20Contingencies) - The company retained historical asbestos liabilities and related legacy insurance policies following the divestiture of its Fluid Handling business[69](index=69&type=chunk) - Accrued amount for asbestos-related litigation was **$1.5 million** as of June 30, 2025[69](index=69&type=chunk) - Management believes that pending asbestos cases will not materially adversely affect the company's operating results, liquidity, or financial condition[70](index=70&type=chunk) [Note 15. Acquisitions](index=20&type=section&id=Note%2015.%20Acquisitions) - On January 3, 2025, the company acquired Profire Energy, Inc., a provider of intelligent control solutions for industrial combustion equipment, for **$122.7 million** in cash[74](index=74&type=chunk) - Profire contributed **$31.3 million** in revenue and **$3.6 million** in net income to the company for the six months ended June 30, 2025[77](index=77&type=chunk) - A fair value adjustment to the WK Group contingent consideration liability resulted in a **$7.4 million** gain recognized in "Other operating (income) expense, net" during Q2 2025[81](index=81&type=chunk) - Goodwill recognized from acquisitions represents the value expected from combining acquired businesses with the company's operations, including market expansion, new customer acquisition, and potential cost savings and synergies, and is not deductible for tax purposes[86](index=86&type=chunk) [Note 16. Divestiture](index=26&type=section&id=Note%2016.%20Divestiture) - The Global Pump Solutions business was sold on March 31, 2025, for a purchase price of **$109.5 million**[90](index=90&type=chunk) - The company received **$105.9 million** in cash proceeds from the sale[90](index=90&type=chunk) - A pre-tax gain on the sale of the business of **$64.5 million** was recognized from this divestiture[90](index=90&type=chunk)[91](index=91&type=chunk) [Note 17. Business Segment Information](index=26&type=section&id=Note%2017.%20Business%20Segment%20Information) - The company operates in two reportable business segments: Engineered Systems and Industrial Process Solutions[94](index=94&type=chunk)[95](index=95&type=chunk) | Segment Financials (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | **Engineered Systems Segment** | | | | | | Net Sales | $128,460 | $97,392 | $248,893 | $186,741 | | Income from Operations | $25,194 | $19,330 | $43,934 | $35,607 | | **Industrial Process Solutions Segment** | | | | | | Net Sales | $56,931 | $40,130 | $113,195 | $77,113 | | Income from Operations | $15,110 | $5,669 | $84,760 | $12,769 | - Operating income for the Industrial Process Solutions segment significantly increased for the six months ended June 30, 2025, primarily due to the gain from the sale of the Global Pump Solutions business and the fair value adjustment of the WK Group contingent consideration liability[149](index=149&type=chunk) | Geographic Net Sales (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | United States | $120,204 | $90,450 | $230,875 | $168,238 | | United Kingdom | $12,470 | $14,353 | $32,027 | $26,555 | | Netherlands | $15,763 | $13,496 | $26,989 | $30,308 | | China | $13,563 | $8,883 | $28,357 | $13,213 | | Other | $23,391 | $10,340 | $43,840 | $25,540 | | Total net sales | $185,391 | $137,522 | $362,088 | $263,854 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses the company's financial condition and operating results for the three and six months ended June 30, 2025, highlighting significant growth driven by acquisitions and divestiture gains, non-GAAP metrics, market pressures, liquidity, and capital resources [Consolidated Results](index=34&type=section&id=Consolidated%20Results) | Metric (in millions, except ratios) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (%) | | :-------------------------------- | :--------------------------- | :--------------------------- | :------------- | :--------------------------- | :--------------------------- | :------------- | | Net sales | $185.4 | $137.5 | 34.8% | $362.1 | $263.9 | 37.2% | | Gross profit | $67.1 | $49.0 | 36.9% | $129.3 | $94.2 | 37.3% | | Operating income (GAAP) | $18.1 | $9.3 | 94.6% | $79.9 | $16.9 | 373.0% | | Operating margin (GAAP) | 9.8% | 6.8% | 3.0 pp | 22.1% | 6.4% | 15.7 pp | | Non-GAAP operating income | $18.3 | $12.6 | 45.2% | $26.9 | $22.8 | 18.0% | | Non-GAAP operating margin | 9.9% | 9.2% | 0.7 pp | 7.4% | 8.6% | -1.2 pp | - Significant GAAP operating income growth for the six months ended June 30, 2025, was primarily attributed to a **$64.5 million** gain from the Global Pump Solutions business sale and a fair value adjustment to the WK Group contingent consideration liability[129](index=129&type=chunk) - Orders booked increased **95%** to **$274.1 million** for the three months ended June 30, 2025, and **75%** to **$502.1 million** for the six months ended June 30, 2025, driven by energy and power technologies and recent acquisitions[117](index=117&type=chunk)[119](index=119&type=chunk) [Business Segments](index=38&type=section&id=Business%20Segments) | Segment Performance (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (%) | | :--------------------------------- | :--------------------------- | :--------------------------- | :------------- | :--------------------------- | :--------------------------- | :------------- | | **Engineered Systems** | | | | | | | | Orders booked | $224,200 | $100,500 | 123.1% | $387,100 | $200,000 | 93.6% | | Net sales | $128,460 | $97,392 | 31.9% | $248,893 | $186,741 | 33.3% | | Operating income | $25,194 | $19,330 | 30.3% | $43,934 | $35,607 | 23.4% | | **Industrial Process Solutions** | | | | | | | | Orders booked | $49,900 | $40,200 | 24.1% | $114,900 | $85,500 | 34.4% | | Net sales | $56,931 | $40,130 | 41.9% | $113,195 | $77,113 | 46.8% | | Operating income | $15,110 | $5,669 | 166.5% | $84,760 | $12,769 | 563.8% | [Engineered Systems Segment](index=38&type=section&id=Engineered%20Systems%20Segment) - Q2 2025 orders booked increased **123%**, with **94%** attributed to organic orders, driven by energy and power technologies and the Profire acquisition[136](index=136&type=chunk)[137](index=137&type=chunk) - Q2 2025 net sales grew **31.9%**, with **87%** from organic revenue, benefiting from backlog execution on large power projects and inorganic growth from Profire[139](index=139&type=chunk) [Industrial Process Solutions Segment](index=40&type=section&id=Industrial%20Process%20Solutions%20Segment) - Q2 2025 orders booked increased **24%**, with **70%** from organic orders, driven by recent industrial air handling acquisitions and increased demand for scrubber technologies[143](index=143&type=chunk) - Q2 2025 net sales grew **41.9%**, with **59%** from organic revenue, primarily from recent acquisitions, partially offset by the Global Pump Solutions divestiture[145](index=145&type=chunk) - Q2 2025 segment operating income increased by **$9.4 million**, primarily due to a fair value adjustment to the WK Group contingent consideration liability and higher gross profit from increased net sales[147](index=147&type=chunk) [Backlog](index=42&type=section&id=Backlog) | Metric (in millions) | June 30, 2025 | December 31, 2024 | Change | | :------------------- | :------------ | :---------------- | :----- | | Backlog | $688.1 | $540.9 | $147.2 | - The vast majority of the backlog is expected to be delivered within **18 to 24 months**[150](index=150&type=chunk) [Recent Accounting Pronouncements](index=42&type=section&id=Recent%20Accounting%20Pronouncements) - Refer to Note 2 to the Condensed Consolidated Financial Statements for detailed information on recent accounting pronouncements[151](index=151&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) | Metric (in millions) | June 30, 2025 | December 31, 2024 | Change | | :------------------- | :------------ | :---------------- | :----- | | Working capital | $98.0 | $86.3 | $11.7 | | Cash and cash equivalents | $36.8 | $37.8 | $(1.0) | | Total outstanding borrowings | $238.7 | $218.9 | $19.8 | | Unused credit availability | $104.3 | $1.0 | $103.3 | [Credit Facility](index=42&type=section&id=Credit%20Facility) - The credit facility provides a senior secured revolving credit line of up to **$400 million**[41](index=41&type=chunk) - Outstanding borrowings under the revolving credit facility were **$233.9 million** as of June 30, 2025[40](index=40&type=chunk) - The company entered an "Increased Ratio Period" in Q1 2025, allowing a maximum consolidated net leverage ratio of **4.50** and consolidated secured net leverage ratio of **3.50** for up to four quarters[45](index=45&type=chunk) [Overview of Cash Flows and Liquidity](index=44&type=section&id=Overview%20of%20Cash%20Flows%20and%20Liquidity) | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | | :-------------------- | :--------------------------- | :--------------------------- | :----- | | Net cash (used in) provided by operating activities | $(19,363) | $7,891 | $(27,254) | | Net cash provided by (used in) investing activities | $3,813 | $(6,811) | $10,624 | | Net cash provided by (used in) financing activities | $14,197 | $(16,565) | $30,762 | | Net decrease in cash | $(1,292) | $(18,534) | $17,242 | [Operating Activities](index=44&type=section&id=Operating%20Activities) - Cash used in operating activities for the six months ended June 30, 2025, was **$19.4 million**, a **$27.3 million** decrease year-over-year, primarily due to the timing of project-related payments[161](index=161&type=chunk) [Investing Activities](index=44&type=section&id=Investing%20Activities) - Net cash provided by investing activities was **$3.8 million** in the first half of 2025, compared to net cash used of **$6.8 million** in the first half of 2024[162](index=162&type=chunk) - This was primarily due to **$105.9 million** in proceeds from the sale of the Global Pump Solutions business, partially offset by **$97.6 million** paid for the Profire acquisition[162](index=162&type=chunk) [Financing Activities](index=44&type=section&id=Financing%20Activities) - Net cash provided by financing activities was **$14.2 million** in the first half of 2025, compared to net cash used of **$16.6 million** in the first half of 2024[163](index=163&type=chunk) - The increase was primarily driven by **$19.7 million** in net borrowings for the Profire acquisition[163](index=163&type=chunk) [Critical Accounting Estimates](index=44&type=section&id=Critical%20Accounting%20Estimates) - No significant changes occurred in the company's critical accounting policies and estimates disclosed for the six months ended June 30, 2025[164](index=164&type=chunk) [Forward-Looking Statements](index=44&type=section&id=Forward-Looking%20Statements) - This report contains forward-looking statements involving risks and uncertainties that could cause actual results to differ materially from any future results, performance, or achievements expressed or implied by such statements[165](index=165&type=chunk) - Key risks include those related to acquisitions and divestitures, fixed-price contracts, supply chain challenges, litigation, and general economic conditions[166](index=166&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company primarily faces market risks from changes in interest rates and foreign currency exchange rates, with hypothetical interest rate changes impacting earnings and cash flows - The company primarily faces market risks from changes in interest rates and foreign currency exchange rates[167](index=167&type=chunk)[168](index=168&type=chunk) - A hypothetical **10%** change in the weighted-average borrowing rate is estimated to impact future earnings and cash flows by **$1.7 million** annually[169](index=169&type=chunk) - Foreign currency transaction gains (losses) were **-$1.4 million** for the three months ended June 30, 2025, and **-$0.9 million** for the six months ended June 30, 2025[170](index=170&type=chunk) [Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management assessed disclosure controls and procedures as effective as of June 30, 2025, with no significant changes to internal financial reporting controls during the quarter - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[171](index=171&type=chunk) - No significant changes occurred in internal financial reporting controls during the quarter ended June 30, 2025[173](index=173&type=chunk) - Control systems provide reasonable, not absolute, assurance due to inherent limitations and resource constraints[174](index=174&type=chunk) Part II – Other Information [Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is detailed in Note 14 to the condensed consolidated financial statements - Legal proceedings information is detailed in Note 14 to the financial statements[175](index=175&type=chunk) [Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the Form 10-K annual report as of December 31, 2024 - No material changes to risk factors have occurred since the 2024 annual report on Form 10-K[176](index=176&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company's $20 million stock repurchase program expired on April 30, 2025, with no repurchases made during the three months ended June 30, 2025 - The company did not repurchase any shares under the plan during the three months ended June 30, 2025[177](index=177&type=chunk) - The **$20 million** stock repurchase program expired on April 30, 2025[177](index=177&type=chunk) [Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This report discloses no defaults upon senior securities - No defaults upon senior securities occurred[178](index=178&type=chunk) [Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[179](index=179&type=chunk) [Other Information](index=49&type=section&id=Item%205.%20Other%20Information) No directors or Section 16 officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025 - No directors or Section 16 officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in Q2 2025[180](index=180&type=chunk) [Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including equity award agreements, CEO and CFO certifications, and XBRL documents - Exhibits include equity award agreements, CEO/CFO certifications, and XBRL documents[182](index=182&type=chunk) Signatures - This report was signed by Kiril Kovachev, Chief Accounting Officer, on behalf of CECO Environmental Corp. on July 29, 2025[186](index=186&type=chunk)

Financial Data and Key Metrics Changes - The company reported a record revenue of $185 million for Q2 2025, representing a 35% year-over-year increase [9][24] - Adjusted EBITDA reached over $23 million, up 45% year-over-year, driven by volume and strong gross margins [9][25] - The earnings per share (EPS) was 24 cents, reflecting a 35% increase year-over-year [10] Business Line Data and Key Metrics Changes - The backlog grew to a record $688 million, up 76% year-over-year, with approximately $70 million attributed to recent acquisitions [6][21] - New bookings for Q2 totaled $274 million, a 95% increase compared to the same quarter last year [7][22] - The company achieved a book-to-bill ratio of approximately 1.5 for the first half of 2025 [8][22] Market Data and Key Metrics Changes - Strong demand was noted in power generation, semiconductor inquiries, and natural gas infrastructure, with steady demand in most regions except for some softness in Europe [12][13] - The sales opportunity pipeline has grown to over $5.5 billion, indicating robust future growth potential [12][35] Company Strategy and Development Direction - The company is focused on diversifying its portfolio and expanding into new vertical markets and geographies [8][19] - The integration of recent acquisitions is expected to generate additional synergies and access to new markets [37] - The company is raising its 2025 annual guidance for orders and revenue, reflecting strong performance and a robust sales pipeline [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate modest inflation and supply chain challenges while maintaining strong order bookings [13][73] - The outlook for 2025 includes expectations for continued strong growth, with a focus on operational excellence and project execution [15][31] Other Important Information - The company is maintaining its previous outlook for adjusted EBITDA and free cash flow, expecting growth of approximately 50% year-over-year [15] - The gross profit margin improved to slightly over 36%, up 50 basis points year-over-year [25][30] Q&A Session Summary Question: What is the pipeline like in the power generation market? - Management indicated that the pipeline remains strong, with over a billion dollars in power generation-related projects expected to come to decision in the next 24 months [44][46] Question: What is the environment like in other verticals? - Management noted strength in semiconductor, natural gas infrastructure, and industrial water markets, with a positive outlook for industrial reshoring in North America [49][51] Question: How does the recent legislation impact project timelines? - Management stated that orders have been growing even before the passage of recent legislation, indicating a strong demand environment [59][64] Question: What is the guidance for second half bookings? - Management suggested that the guidance does not capture the maximum potential for large orders, indicating a healthy level of expected bookings [68][70] Question: How does the company plan to manage inflationary pressures? - Management acknowledged the challenges of passing on costs in fixed-price contracts but expressed confidence in their ability to manage inflation through productivity initiatives [71][73] Question: What are the expectations for EBITDA margins? - Management indicated a commitment to achieving mid-teens EBITDA margins over time, balancing growth investments with margin expansion [84][86]

Company Performance - CECO Environmental reported quarterly earnings of $0.24 per share, exceeding the Zacks Consensus Estimate of $0.20 per share, and up from $0.20 per share a year ago, adjusted for non-recurring items [1] - The earnings surprise for this quarter was +20.00%, and the company has surpassed consensus EPS estimates two times over the last four quarters [2] - Revenues for the quarter ended June 2025 were $185.39 million, surpassing the Zacks Consensus Estimate by 3.41%, and up from $137.52 million year-over-year [3] Market Performance - CECO shares have increased approximately 14.8% since the beginning of the year, compared to the S&P 500's gain of 8.6% [4] - The current consensus EPS estimate for the upcoming quarter is $0.22 on revenues of $176.61 million, and for the current fiscal year, it is $0.97 on revenues of $733.6 million [8] Industry Outlook - The Pollution Control industry, to which CECO belongs, is currently ranked in the top 38% of over 250 Zacks industries, indicating a favorable outlook [9] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact CECO's stock performance [6]

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]