CECO Environmental Corp. Reports First Quarter 2019 Results

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 first quarter 2019.

Highlights of the First Quarter 2019*

• Revenue of $86.0 million, compared with $74.1 million
• Revenue of $86.0 million, compared with organic revenue of $67.6 million, up 27.2%
• Gross profit of $28.4 million (33.0% margin), compared with $25.6 million (34.5% margin)
• Operating income of $4.9 million, compared with $12.2 million
• Non-GAAP operating income of $7.2 million, compared with $4.0 million
• Net income was $1.9 million, compared with $5.8 million
• Non-GAAP net income of $4.1 million, compared with $1.7 million
• Net income per diluted share was $0.05, compared with $0.17
• Non-GAAP net income per diluted share of $0.12, compared with $0.05
• Adjusted EBITDA of $8.5 million, compared with $5.6 million
• Bookings of $97.3 million, compared with $95.0 million
• Organic bookings of $97.3 million, compared with $90.3 million
• Backlog of $193.8 million, compared with $182.1 million as of December 31, 2018

* All comparisons are versus the comparable prior-year period, which include results from divestitures, unless otherwise stated.

CECO`s Chief Executive Officer Dennis Sadlowski commented, "I am very pleased that the significant momentum we built throughout 2018 has carried over to the first quarter of this year. We generated revenue of $86 million which was an impressive 27% growth year-over-year on the strength of our increasing backlog and the continued focus on new orders. We also saw gross margins improve sequentially as the markets increasingly recognize the value that CECO offers."

Mr. Sadlowski added, "Driven by the need for clean air and carbon reduction, the long-term prospects for CECO Environmental continue to improve.  Our fast start out of the gate in 2019 is another step towards meeting our aggressive three-year financial targets.  Strong orders of $97 million, up 30% sequentially and 8% year-over-year, along with an improving sales pipeline, gives us strong optimism for sustained growth in 2019 as we continue to capitalize on our significant competitive position and win market share." 

First Quarter Results

Revenue in the first quarter of 2019 was $86.0 million, up 16.0% from $74.1 million in the prior-year period. Excluding revenue of $6.5 million attributable to the businesses divested in 2018, organic revenues increased 27.2%.

Operating Income was $4.9 million for the first quarter of 2019, compared with $12.2 million in the prior-year period. Non-GAAP operating income was $7.2 million for the first quarter of 2019 (8.4% margin), compared with $4.0 million in the prior-year period (5.4% margin).

Net income was $1.9 million for the first quarter of 2019, compared with $5.8 million in the prior-year period. Net income on a non-GAAP basis was $4.1 million for the first quarter of 2019, compared with $1.7 million in the prior-year period.

Net income per diluted share was $0.05 for the first quarter of 2019, compared with $0.17 in the prior-year period. Non-GAAP net income per diluted share was $0.12 for the first quarter of 2019, compared with $0.05 for the prior-year period.

Cash and cash equivalents were $28.2 million and bank debt was $76.1 million as of March 31, 2019, compared with $43.7 million and $76.1 million, respectively, as of December 31, 2018.

Backlog and Bookings

Total backlog at March 31, 2019 was $193.8 million as compared with $182.1 million as of both December 31, 2018 and March 31, 2018, respectively. In the first quarter of 2018, $8.8 million of backlog was attributable to the divested businesses. Adjusted for divestitures, backlog increased $20.5 million from first quarter 2018 to first quarter 2019.

Bookings were $97.3 million for the first quarter of 2019, compared with $95.0 million in the prior-year period and $74.5 million in the fourth quarter of 2018. Excluding bookings of $4.7 million attributable to the businesses divested in 2018, 2019 organic bookings increased $7.0 million, or 7.7%.

Conference Call

A conference call is scheduled for today at 8:30 a.m. ET to discuss the first quarter 2019 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 replay of the conference call will be available on the Company`s website for 7 days.  The replay may be accessed by dialing (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 10130867.

About CECO Environmental

CECO Environmental is a global leader in air quality and fluid handling serving the energy, 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 solutions for applications including oil and gas, power generation, water and wastewater, battery production, poly silicon fabrication, chemical and petrochemical processing along with a range of others. CECO is listed on Nasdaq under the ticker symbol "CECE".