cece-ex991

DALLAS, Texas, August 3, 2021 -- CECO Environmental Corp. (Nasdaq: CECE), a leading global air quality and fluid handling company serving the energy, industrial and other niche markets, today reported its financial results for the second quarter of 2021.

*All comparisons are versus the comparable prior-year period, unless otherwise stated

Today the company also announced that its Board of Directors approved a new share repurchase program. Under this program, the company intends to repurchase up to $5 million of outstanding CECO Environmental common stock. The repurchase program will terminate at the end of calendar year 2021.

Todd Gleason, Chief Executive Officer, commented, “I am very pleased with our second quarter and first half 2021 results which continues to build a strong backlog for future revenue. Demand for our environmental solutions across a diversified set of industrial markets gives us conviction that we will deliver renewed revenue growth in the coming periods. Year-to-date our bookings were up over 30 percent, and our opportunity pipeline remains strong and broad based.”

Mr. Gleason added, “Today’s stock buyback announcement reflects our confidence in CECO’s business and our expectations that we will execute our strategic growth plans to deliver strong shareholder value. Our improved business performance and healthy balance sheet has positioned CECO to drive strategic acquisitions, invest in our core businesses and return cash to shareholders.”

A conference call is scheduled for today at 8:30 a.m. ET to discuss the second quarter 2021 financial results. The conference call may also be accessed by dialing (888) 346-4547 (Toll-Free) within the U.S., (855) 669-9657 (Toll-Free) within Canada or Toll/International (412) 317-5251.

The live webcast and slides can also be accessed at https://investors.cecoenviro.com/events-webcasts-and-presentations

A live and archived replay of the conference call will be available on the Company's website for 90 days. The telephone replay will be available one hour after the call ends through August 10, 2021. To access the replay, please dial (877) 344-7529 (Toll-Free) within the U.S., (855) 669-9658 (Toll-Free) within Canada, or Toll/International (412) 317-0088 and entering access code 10158155.

CECO Environmental is a global leader in industrial air quality and fluid handling serving a broad landscape of industrial and other niche markets. Providing innovative technology and application expertise, CECO helps companies grow their business with safe, clean, and more efficient solutions that help protect our shared environment. In regions around the world, CECO works to improve air quality, optimize the energy value chain, and provide custom Engineered Systems for applications including power generation, petrochemical processing, general industrial, refining, midstream oil & gas, electric vehicle production, poly silicon fabrication, battery recycling, beverage can, and water/wastewater treatment along with a wide range of other applications. CECO is listed on Nasdaq under the ticker symbol "CECE". For more information, please visit www.cecoenviro.com.


(dollars in thousands, except per share data)	(unaudited) June 30, 2021			December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	32,229		$	35,992
Restricted cash		2,291			1,819
Accounts receivable, net		65,650			63,046
Costs and estimated earnings in excess of billings on uncompleted contracts		46,839			45,498
Inventories, net		17,271			17,343
Prepaid expenses and other current assets		12,729			11,530
Prepaid income taxes		3,216			7,790
Assets held for sale	—				467
Total current assets		180,225			183,485
Property, plant and equipment, net		15,895			16,228
Right-of-use assets from operating leases		10,420			11,376
Goodwill		161,782			161,820
Intangible assets – finite life, net		29,369			29,637
Intangible assets – indefinite life		9,738			12,937
Deferred charges and other assets		3,273			3,831
Total assets	$	410,702		$	419,314
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of debt	$	3,750		$	3,125
Accounts payable and accrued expenses		81,938			84,997
Billings in excess of costs and estimated earnings on uncompleted contracts		19,232			20,691
Income taxes payable		—			543
Total current liabilities		104,920			109,356
Other liabilities		19,645			20,576
Debt, less current portion		63,720			69,491
Deferred income tax liability, net		7,100			6,970
Operating lease liabilities		8,484			9,310
Total liabilities		203,869			215,703
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $.01 par value; 10,000 shares authorized, none issued	—			—
Common stock, $.01 par value; 100,000,000 shares authorized, 35,749,488 and 35,504,757 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		357			355
Capital in excess of par value		256,598			255,296
Accumulated loss		(36,667	)		(38,141	)
Accumulated other comprehensive loss		(14,151	)		(14,496	)
		206,137			203,014
Less treasury stock, at cost, 137,920 shares at June 30, 2021 and December 31, 2020		(356	)		(356	)
Total CECO shareholders' equity		205,781			202,658
Noncontrolling interest		1,052			953
Total shareholders' equity		206,833			203,611
Total liabilities and shareholders' equity	$	410,702		$	419,314

	Three months ended June 30,						Six months ended June 30,
(dollars in thousands, except per share data)	2021			2020			2021			2020
Net sales	$	78,680		$	75,170		$	150,572		$	155,656
Cost of sales		53,426			49,354			100,910			101,561
Gross profit		25,254			25,816			49,662			54,095
Selling and administrative expenses		20,510			18,407			39,965			40,383
Amortization and earnout expenses		2,282			1,785			4,072			3,498
Restructuring expenses		280			530			280			882
Acquisition and integration expenses		37			699			146			699
Income from operations		2,145			4,395			5,199			8,633
Other (expense) income, net		(860	)		371			(1,339	)		1,347
Interest expense		(704	)		(944	)		(1,430	)		(1,967	)
Income before income taxes		581			3,822			2,430			8,013
Income tax expense		199			564			750			1,343
Net income		382			3,258			1,680			6,670
Noncontrolling interest		89			—			206			—
Net income attributable to CECO Environmental Corp.	$	293		$	3,258		$	1,474		$	6,670
Earnings per share:
Basic	$	0.01		$	0.09		$	0.04		$	0.19
Diluted	$	0.01		$	0.09		$	0.04		$	0.19
Weighted average number of common shares outstanding:
Basic		35,491,725			35,275,729			35,444,477			35,215,553
Diluted		35,819,269			35,410,182			35,797,001			35,402,524

	THREE MONTHS ENDED JUNE 30,						SIX MONTHS ENDED JUNE 30
(dollars in millions)	2021			2020			2021			2020
Operating income as reported in accordance with GAAP	$	2.1		$	4.4		$	5.2		$	8.6
Operating margin in accordance with GAAP		2.7	%		5.9	%		3.5	%		5.5	%
Amortization and earnout expenses		2.3			1.8			4.1			3.5
Restructuring expenses		0.3			0.5			0.3			0.9
Acquisition and integration expenses		—			0.7			0.1			0.7
Non-GAAP operating income	$	4.7		$	7.4		$	9.7		$	13.7
Non-GAAP operating margin		6.0	%		9.8	%		6.4	%		8.8	%

	THREE MONTHS ENDED JUNE 30,						SIX MONTHS ENDED JUNE 30
(dollars in millions)	2021			2020			2021			2020
Net income as reported in accordance with GAAP	$	0.3		$	3.3		$	1.5		$	6.7
Amortization and earnout expenses		2.3			1.8			4.1			3.5
Restructuring expenses		0.3			0.5			0.3			0.9
Acquisition and integration expenses		—			0.7			0.1			0.7
Foreign currency remeasurement		1.1			(0.6	)		1.7			(0.1	)
Tax benefit of adjustments		(0.9	)		(0.6	)		(1.5	)		(1.3	)
Non-GAAP net income	$	3.1		$	5.1		$	6.2		$	10.4
Depreciation		0.8			0.6			1.6			1.1
Non-cash stock compensation		0.9			0.2			1.6			0.8
Other (income) expense		(0.2	)		0.2			(0.3	)		(1.2	)
Interest expense		0.7			0.9			1.4			2.0
Income tax expense		1.1			1.2			2.3			2.6
Adjusted EBITDA	$	6.4		$	8.2		$	12.8		$	15.7

Earnings per share:
Basic	$	0.01		$	0.09		$	0.04		$	0.19
Diluted	$	0.01		$	0.09		$	0.04		$	0.19

Non-GAAP net income per share:
Basic	$	0.09		$	0.14		$	0.17		$	0.29
Diluted	$	0.09		$	0.14		$	0.17		$	0.29

CECO is providing certain non-GAAP historical financial measures as presented above as the Company believes that these figures are helpful in allowing individuals to better assess the ongoing nature of CECO’s core operations. A "non-GAAP financial measure" is a numerical measure of a company's historical financial performance that excludes amounts that are included in the most directly comparable measure calculated and presented in the GAAP statement of operations.

Non-GAAP operating income, non-GAAP net income, non-GAAP operating margin, non-GAAP earnings per basic and diluted share and adjusted EBITDA, as we present them in the financial data included in this press release, have been adjusted to exclude the effects of amortization expenses for acquisition related intangible assets, contingent retention and earnout expenses, restructuring expenses primarily relating to severance and legal expenses, acquisition and integration expenses which include retention, legal, accounting, banking, and other expenses and other nonrecurring or infrequent items and the associated tax benefit of these items. Management believes that these items are not necessarily indicative of the Company’s ongoing operations and their exclusion provides individuals with additional information to compare the Company's results over multiple periods. Management utilizes this information to evaluate its ongoing financial performance. Our financial statements may continue to be affected by items similar to those excluded in the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP financial measures should not be construed as an inference that all such costs are unusual or infrequent.

Non-GAAP operating income, non-GAAP net income, non-GAAP operating margin, non-GAAP earnings per basic and diluted share and adjusted EBITDA are not calculated in accordance with GAAP, and should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect all of the costs associated with the operations of our business as determined in accordance with GAAP. As a result, you should not consider these measures in isolation or as a substitute for analysis of CECO’s results as reported under GAAP. Additionally, CECO cautions investors that non-GAAP financial measures used by the Company may not be comparable to similarly titled measures of other companies.

In accordance with the requirements of Regulation G issued by the Securities and Exchange Commission, non-GAAP operating income, non-GAAP net income, non-GAAP operating margin and non-GAAP earnings per basic and diluted share and adjusted EBITDA stated in the tables above are reconciled to the most directly comparable GAAP financial measures.

Any statements contained in this Press Release, other than statements of historical fact, including statements about management’s beliefs and expectations, are forward-looking statements and should be evaluated as such. These statements are made on the basis of management’s views and assumptions regarding future events and business performance. We use words such as “believe,” “expect,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “will,” “plan,” “should” and similar expressions to identify forward-looking statements. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Potential risks and uncertainties, among others, that could cause actual results to differ materially are discussed under “Part I – Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and include, but are not limited to: the sensitivity of our business to economic and financial market conditions generally and economic conditions in CECO’s service areas; dependence on fixed price contracts and the risks associated therewith, including actual costs exceeding estimates and method of accounting for revenue; the effect of growth on CECO’s infrastructure, resources, and existing sales; the ability to expand operations in both new and existing markets; the potential for contract delay or cancellation; liabilities arising from faulty services or products that could result in significant professional or product liability, warranty, or other claims; changes in or developments with respect to any litigation or investigation; failure to meet timely completion or performance standards that could result in higher cost and reduced profits or, in some cases, losses on projects; the potential for fluctuations in prices for manufactured components and raw materials, including as a result of tariffs and surcharges; the substantial amount of debt incurred in connection with our strategic transactions and our ability to repay or refinance it or incur additional debt in the future; the impact of federal, state or local government regulations; economic and political conditions generally; our ability to successfully realize the expected benefits of our restructuring program; our ability to successfully integrate acquired businesses and realize the synergies from strategic transactions; unpredictability and severity of catastrophic events, including cyber security threats, acts of terrorism or outbreak of war or hostilities or public health crises, such as uncertainties regarding the extent and duration of impacts of matters associated with the novel coronavirus (“COVID-19”), as well as management’s response to any of the aforementioned factors. Many of these risks are beyond management’s ability to control or predict. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated. Investors are cautioned not to place undue reliance on such forward-looking statements as they speak only to our views as of the date the statement is made. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the Securities and Exchange Commission, we undertake no obligation to update or review any forward-looking statements, whether as a result of new information, future events or otherwise.