CECO Environmental(CECO) - 2024 Q2 - Quarterly Results

Financial Performance - Second quarter revenue reached $137.5 million, an increase of 6% year-over-year[6] - Gross profit for the quarter was $49.0 million, up 23%, with gross margins expanding by 480 basis points to 35.6%[6] - Adjusted EBITDA was $16.1 million, reflecting an 18% increase compared to the same quarter last year, with a margin of 11.7%[6] - Net income for the quarter was $4.5 million, a 22% increase from $3.7 million in the second quarter of 2023[6] - Operating income for the three months ended June 30, 2024, was reported at $9.3 million, compared to $8.6 million in 2023, reflecting a year-over-year increase of 8.1%[23] - Non-GAAP operating income for the six months ended June 30, 2024, reached $22.8 million, up from $19.1 million in 2023, indicating a growth of 19.4%[23] - Adjusted EBITDA for the six months ended June 30, 2024, was $29.3 million, compared to $23.4 million in 2023, marking an increase of 25.3%[23] - Net income for the six months ended June 30, 2024, increased to $7,022,000, up from $6,460,000 in 2023, representing a growth of 8.7%[21] - Non-GAAP net income for the six months ended June 30, 2024, was $11.5 million, compared to $8.8 million in 2023, reflecting a growth of 30.7%[23] Guidance and Future Outlook - The company raised its full year 2024 revenue guidance to between $600 million and $620 million, representing a 12% increase at the midpoint[8] - Adjusted EBITDA guidance for 2024 was also raised to between $68 million and $72 million, up approximately 21% year-over-year at the midpoint[8] Acquisitions and Sales - The company completed the acquisition of EnviroCare International, expected to contribute approximately $13 million in sales for 2024 with mid-teen EBITDA margins[7] - The backlog stood at $390.9 million, indicating strong demand and operational capacity[6] Cash Flow and Capital Expenditures - Free cash flow for the quarter was $2.6 million, down $7.4 million compared to the same quarter last year[6] - Free cash flow for the six months ended June 30, 2024, was $0.7 million, a significant improvement from a negative $4.5 million in 2023[23] - Cash flows from operating activities for the six months ended June 30, 2024, provided $7,891,000, compared to a negative cash flow of $611,000 in 2023[21] - The company incurred $7,233,000 in capital expenditures for property and equipment during the six months ended June 30, 2024, compared to $3,919,000 in 2023[21] - The company reported a decrease in cash, cash equivalents, and restricted cash to $36,914,000 at the end of the period, down from $48,552,000 in 2023[21] Risks and Uncertainties - The company acknowledges that forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from expectations[31] - Key risks include dependence on fixed price contracts, potential contract delays, and supply chain challenges[31] - The company faces inflationary pressures related to rising raw material costs and labor costs[31] - There is a substantial amount of debt incurred from strategic transactions, impacting the company's ability to repay or refinance[31] - The unpredictability of catastrophic events, including cybersecurity threats and public health crises, poses additional risks[31] - The company emphasizes the importance of not placing undue reliance on forward-looking statements as they reflect views only as of the date made[31] - Management's ability to successfully identify acquisition targets and integrate acquired businesses is crucial for realizing synergies[31] - The company is subject to federal, state, or local government regulations that may impact operations[31] - The ability to repurchase shares of common stock and the timing of such repurchases are uncertain[31] - The company undertakes no obligation to update or review forward-looking statements unless required by federal securities laws[31]