CECO Environmental(US:CECO)2022-11-07 18:42Financial Data and Key Metrics Changes - CECO Environmental reported record third quarter revenue and EBITDA, marking the second highest revenue quarter in the company's history [9] - Revenue for Q3 was $108 million, up 36% year-over-year, with year-to-date sales also increasing over 30% [14][38] - Adjusted EBITDA for Q3 was $9.2 million, a 165% increase year-over-year, with EBITDA margins improving by 420 basis points [14][49] Business Line Data and Key Metrics Changes - All eight platforms of CECO delivered double-digit order growth over the past 18 months, with 75% of platforms showing year-to-date growth compared to the first three quarters of 2021 [16][17] - Industrial air represents about 50% of sales, industrial water accounts for 25%, and energy transition makes up the remaining 25% [19] Market Data and Key Metrics Changes - CECO's backlog reached $280 million, up 27% from Q3 2021 and 30% from year-end 2021, with a book-to-bill ratio over 1.2 times [45] - The opportunity pipeline exceeds $2 billion, indicating strong future growth potential [46] Company Strategy and Development Direction - CECO is focused on capital allocation programs, including strategic acquisitions and stock repurchases, to enhance value creation [11][30] - The company aims to maintain a balanced growth profile across its platforms and is committed to executing against its operational commitments [12][76] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing supply chain challenges but expressed confidence in the company's ability to navigate these issues and maintain strong performance [72][76] - The macroeconomic environment is viewed positively, with significant investments expected in infrastructure and energy transition markets [78] Other Important Information - CECO has raised its full-year 2022 guidance, expecting orders to exceed $475 million and sales to exceed $410 million, reflecting a strong growth outlook [56][57] - The company is targeting adjusted EBITDA of $39 million for the full year, a 50% increase compared to 2021 [58] Q&A Session Summary Question: Are supply chain issues still affecting performance? - Management indicated that while supply chain challenges persist, the team is effectively managing these issues and maintaining performance [72] Question: How does the company view the macroeconomic environment? - Management expressed confidence in the company's diverse growth profile and strong backlog, which provides visibility despite economic uncertainties [76][78] Question: What is the timeline for margin improvement initiatives? - Management stated that a third of operational excellence programs have been implemented, with ongoing efforts to enhance margins over the next 12 to 24 months [79] Question: What is the outlook for weaker business lines? - Management noted that while some platforms have shown declines, they expect improvements in the fourth quarter driven by strong pipelines [85] Question: Can you elaborate on the recent carbon capture project? - Management confirmed that the $4 million order for carbon capture is from a new customer, with potential for similar projects in the future [93][94]