CECO Environmental Reports First Quarter 2025 Results
CECO Environmental reported strong Q1 2025 results with multiple financial records. Orders reached $227.9 million, up 57%, while backlog hit a historic $602.0 million, increasing 55%. Revenue grew 40% to $176.7 million.
Key financial metrics include:
- Gross profit margin of 35.2%
- Net income of $36.0 million
- GAAP EPS of $0.98
- Adjusted EBITDA of $14.0 million, up 6%
The company maintains its 2025 outlook, projecting revenue of $700-750 million and Adjusted EBITDA of $90-100 million. CEO Todd Gleason highlighted the company's alignment with key growth themes including industrial manufacturing reshoring, electrification, and industrial water investments. Despite tariff impacts, CECO implemented strategic price actions and maintains confidence in growth targets, supported by a $5 billion order pipeline.
CECO Environmental ha riportato risultati solidi nel primo trimestre del 2025 con numerosi record finanziari. Gli ordini hanno raggiunto 227,9 milioni di dollari, in aumento del 57%, mentre il portafoglio ordini ha toccato un livello storico di 602,0 milioni di dollari, con un incremento del 55%. I ricavi sono cresciuti del 40%, arrivando a 176,7 milioni di dollari.
Le principali metriche finanziarie includono:
- Margine lordo del 35,2%
- Utile netto di 36,0 milioni di dollari
- EPS GAAP di 0,98 dollari
- EBITDA rettificato di 14,0 milioni di dollari, in crescita del 6%
L'azienda conferma le previsioni per il 2025, con ricavi stimati tra 700 e 750 milioni di dollari e un EBITDA rettificato tra 90 e 100 milioni di dollari. Il CEO Todd Gleason ha sottolineato l'allineamento della società con temi chiave di crescita, tra cui il reshoring della produzione industriale, l'elettrificazione e gli investimenti nelle acque industriali. Nonostante l'impatto dei dazi, CECO ha adottato azioni strategiche sui prezzi e mantiene fiducia negli obiettivi di crescita, supportata da un portafoglio ordini da 5 miliardi di dollari.
CECO Environmental reportó resultados sólidos en el primer trimestre de 2025, estableciendo múltiples récords financieros. Los pedidos alcanzaron 227,9 millones de dólares, un aumento del 57%, mientras que la cartera de pedidos llegó a un histórico 602,0 millones de dólares, incrementándose un 55%. Los ingresos crecieron un 40%, llegando a 176,7 millones de dólares.
Las principales métricas financieras incluyen:
- Margen bruto del 35,2%
- Ingreso neto de 36,0 millones de dólares
- EPS GAAP de 0,98 dólares
- EBITDA ajustado de 14,0 millones de dólares, con un aumento del 6%
La compañía mantiene su perspectiva para 2025, proyectando ingresos de 700 a 750 millones de dólares y un EBITDA ajustado de 90 a 100 millones de dólares. El CEO Todd Gleason destacó la alineación de la empresa con temas clave de crecimiento, incluyendo la relocalización de la manufactura industrial, la electrificación y las inversiones en agua industrial. A pesar del impacto de los aranceles, CECO implementó acciones estratégicas de precios y mantiene confianza en sus objetivos de crecimiento, respaldada por una cartera de pedidos de 5 mil millones de dólares.
CECO Environmental는 2025년 1분기에 여러 재무 기록을 세우며 강력한 실적을 보고했습니다. 주문액은 2억 2,790만 달러로 57% 증가했고, 수주 잔고는 역사적인 6억 2,000만 달러에 달하며 55% 증가했습니다. 매출은 40% 성장하여 1억 7,670만 달러를 기록했습니다.
주요 재무 지표는 다음과 같습니다:
- 매출 총이익률 35.2%
- 순이익 3,600만 달러
- GAAP 주당순이익 0.98달러
- 조정 EBITDA 1,400만 달러로 6% 증가
회사는 2025년 전망을 유지하며 매출 7억~7억 5천만 달러, 조정 EBITDA 9천만~1억 달러를 예상하고 있습니다. CEO 토드 글리슨은 산업 제조 리쇼어링, 전기화, 산업용 수자원 투자 등 주요 성장 테마와 회사의 일치성을 강조했습니다. 관세 영향에도 불구하고 CECO는 전략적 가격 조치를 시행했으며 50억 달러 규모의 주문 파이프라인을 기반으로 성장 목표에 대한 자신감을 유지하고 있습니다.
CECO Environmental a annoncé de solides résultats pour le premier trimestre 2025, établissant plusieurs records financiers. Les commandes ont atteint 227,9 millions de dollars, en hausse de 57 %, tandis que le carnet de commandes a atteint un niveau historique de 602,0 millions de dollars, soit une augmentation de 55 %. Le chiffre d'affaires a progressé de 40 % pour atteindre 176,7 millions de dollars.
Les principales données financières comprennent :
- Marge brute de 35,2 %
- Bénéfice net de 36,0 millions de dollars
- BPA GAAP de 0,98 dollar
- EBITDA ajusté de 14,0 millions de dollars, en hausse de 6 %
L'entreprise maintient ses prévisions pour 2025, anticipant un chiffre d'affaires entre 700 et 750 millions de dollars et un EBITDA ajusté entre 90 et 100 millions de dollars. Le PDG Todd Gleason a souligné l'alignement de la société avec des thèmes clés de croissance, notamment le reshoring industriel, l’électrification et les investissements dans l'eau industrielle. Malgré l'impact des droits de douane, CECO a mis en place des actions tarifaires stratégiques et reste confiant dans ses objectifs de croissance, soutenu par un carnet de commandes de 5 milliards de dollars.
CECO Environmental verzeichnete starke Ergebnisse im ersten Quartal 2025 mit mehreren finanziellen Rekorden. Die Aufträge erreichten 227,9 Millionen US-Dollar, ein Anstieg von 57 %, während der Auftragsbestand mit 602,0 Millionen US-Dollar einen historischen Höchststand erreichte und um 55 % zunahm. Der Umsatz wuchs um 40 % auf 176,7 Millionen US-Dollar.
Wichtige Finanzkennzahlen umfassen:
- Bruttogewinnmarge von 35,2 %
- Nettoeinkommen von 36,0 Millionen US-Dollar
- GAAP-Gewinn je Aktie von 0,98 US-Dollar
- Bereinigtes EBITDA von 14,0 Millionen US-Dollar, ein Anstieg um 6 %
Das Unternehmen bestätigt seinen Ausblick für 2025 und prognostiziert einen Umsatz von 700 bis 750 Millionen US-Dollar sowie ein bereinigtes EBITDA von 90 bis 100 Millionen US-Dollar. CEO Todd Gleason hob hervor, dass das Unternehmen mit wichtigen Wachstumsthemen wie der Rückverlagerung der Industrieproduktion, Elektrifizierung und Investitionen in industrielles Wasser im Einklang steht. Trotz der Auswirkungen von Zöllen hat CECO strategische Preisanpassungen umgesetzt und bleibt zuversichtlich hinsichtlich der Wachstumsziele, unterstützt durch eine Auftrags-Pipeline von 5 Milliarden US-Dollar.
- Orders increased 57% to $227.9M - second consecutive quarter above $200M
- Record backlog of $602M, up 55%
- Revenue grew 40% to $176.7M
- Strong gross profit margin of 35.2%
- Net income of $36M, significant increase from $1.5M in Q1 2024
- Order pipeline over $5B
- Maintains 2025 guidance: Revenue $700-750M (30% growth) and Adjusted EBITDA $90-100M (50% growth)
- Manufacturing mostly in same regions as sales, reducing tariff exposure
- Free cash flow declined to -$15.1M from -$1.9M in Q1 2024
- Non-GAAP operating income decreased 16% to $8.6M
- Non-GAAP net income declined to $3.5M from $4.0M
- Increased costs from inventory purchases and personnel additions
- Facing tariff impacts requiring strategic price actions
- Planning cost-cutting measures in Q2 2025 due to redundant roles
Insights
CECO reports explosive Q1 growth with orders up 57%, maintains strong 2025 outlook despite near-term margin pressures from strategic investments.
CECO Environmental delivered record first quarter results with exceptional growth metrics across key indicators. Orders surged
Revenue jumped
The temporary margin compression stems from strategic decisions to pull forward inventory purchases and add operational personnel to manage their record backlog and
Management is addressing profitability concerns with targeted cost actions beginning in Q2 2025, eliminating redundant roles following acquisitions and expanding productivity initiatives. Despite near-term pressures, CECO maintained its full-year outlook for revenue of
Numerous Financial Records Reflect Strength of Well-Positioned Portfolio
Company Maintains Full Year Outlook
ADDISON, Texas, April 29, 2025 (GLOBE NEWSWIRE) -- CECO Environmental Corp. (Nasdaq: CECO) ("CECO"), a leading environmentally focused, diversified industrial company whose solutions protect people, the environment, and industrial equipment, today reported its financial results for the first quarter of 2025.
First Quarter Summary(1)
- Orders of
$227.9 million , up 57 percent - Backlog of
$602.0 million , up 55 percent - Revenue of
$176.7 million , up 40 percent - Gross profit margin of 35.2 percent; Gross margin of
$68.0 million , up 28 percent - Net income of
$36.0 million ; non-GAAP net income of$3.5 million - GAAP EPS (diluted) of
$0.98 ; non-GAAP EPS (diluted) of$0.10 - Adjusted EBITDA of
$14.0 million , up 6 percent - Free cash flow of
$(15.1) million , down$13.2 million
(1) All comparisons are versus the comparable prior year period, unless otherwise stated.
Reconciliations of GAAP (reported) to non-GAAP measures are in the attached financial tables.
Todd Gleason, CECO's Chief Executive Officer commented, “We started 2025 with outstanding first quarter record orders of
First quarter operating income was
“In the first quarter, we introduced strategic price actions to address preliminary tariff impacts. Additionally, to proactively manage our record backlog and robust project pipeline, we selectively pulled-in some inventory purchases and added key operational and customer-centric personnel to maintain the highest level of project execution. These additions drove incremental engineering, project management and business development costs during the first quarter as well as utilizing additional cash. This had the effect of depressing Adjusted EBITDA in the quarter, but these proactive measures were important to better position CECO for executing on our record backlog. Starting in Q2 2025, we will take strategic cost actions associated with eliminating redundant general and administrative roles and expenses resulting from our programmatic M&A and will expand our ongoing productivity and efficiency initiatives. We expect the benefits from these actions, when combined with continued strong volume growth, will underpin operating margin expansion throughout the year,” added Gleason.
2025 Full Year Guidance
For the full year 2025 outlook, the Company maintains its expectation to deliver Revenue of
“We are very pleased with the strong start to the year as our industrial air, industrial water and energy transition businesses continue to drive growth through our operating model leveraging their respective niche leadership positions, and flexible business models. Our record backlog and opportunity pipeline provide me with confidence in achieving our growth targets for the year. While we recognize we are in a very dynamic environment which makes it difficult to predict the impact tariffs and other related uncertainties might have on the economy and on our operations, we believe that our direct exposure to tariff-related imports is relatively modest. CECO is comparatively well-positioned as we execute and manufacture a majority of our business in the same regions in which we sell. At present, this aspect of our business design and operating model, coupled with the cost actions we have taken, allows us to maintain our full year outlook – but we are monitoring the economic situation and working with our supply chain to aggressively manage any additional cost expenses which might arise over the course of the year,” concluded Gleason.
EARNINGS CONFERENCE CALL
A conference call is scheduled for today at 8:30 a.m. ET to discuss the first quarter 2025 financial results. Please visit the Investor Relations portion of the website (https://investors.cecoenviro.com) to listen to the call via webcast. The conference call may also be accessed by visiting https://edge.media-server.com/mmc/p/tvr2idgu.
A replay of the conference call will be available on the Company’s website for a period of one year. The replay may also be accessed by visiting https://edge.media-server.com/mmc/p/tvr2idgu.
ABOUT CECO ENVIRONMENTAL
CECO Environmental is a leading environmentally focused, diversified industrial company, serving the broad landscape of industrial air, industrial water and energy transition markets globally providing innovative solutions and application expertise. CECO helps companies grow their business with safe, clean, and more efficient solutions that help protect people, the environment and industrial equipment. CECO solutions improve air and water quality, optimize emissions management, and increase energy efficiency for highly-engineered applications in power generation, midstream and downstream hydrocarbon processing and transport, electric vehicle production, polysilicon fabrication, semiconductor and electronics, battery production and recycling, specialty metals and steel production, beverage can, and water/wastewater treatment and a wide range of other industrial end markets. CECO is listed on Nasdaq under the ticker symbol "CECO." Incorporated in 1966, CECO’s global headquarters is in Addison, Texas. For more information, please visit www.cecoenviro.com.
Company Contact:
Peter Johansson
Chief Financial and Strategy Officer
888-990-6670
investor.relations@onececo.com
Investor Relations Contact:
Steven Hooser and Jean Marie Young
Three Part Advisors, LLC
214-872-2710
investor.relations@onececo.com
| CECO ENVIRONMENTAL CORP. CONSOLIDATED BALANCE SHEETS (unaudited) | ||||||||
| (in thousands, except per share data) | March 31, 2025 | December 31, 2024 | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 146,471 | $ | 37,832 | ||||
| Restricted cash | 205 | 369 | ||||||
| Accounts receivable, net allowances of | 152,405 | 159,572 | ||||||
| Costs and estimated earnings in excess of billings on uncompleted contracts | 83,335 | 69,889 | ||||||
| Inventories | 52,919 | 42,624 | ||||||
| Prepaid expenses and other current assets | 36,910 | 16,859 | ||||||
| Prepaid income taxes | 3,856 | 3,826 | ||||||
| Total current assets | 476,101 | 330,971 | ||||||
| Property, plant and equipment, net | 46,063 | 33,810 | ||||||
| Right-of-use assets from operating leases | 24,419 | 25,102 | ||||||
| Goodwill | 274,769 | 269,747 | ||||||
| Intangible assets – finite life, net | 109,250 | 74,050 | ||||||
| Intangible assets – indefinite life | 9,559 | 9,466 | ||||||
| Deferred income taxes | 210 | 966 | ||||||
| Deferred charges and other assets | 16,724 | 15,587 | ||||||
| Total assets | $ | 957,095 | $ | 759,699 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current portion of debt | $ | 1,673 | $ | 1,650 | ||||
| Accounts payable | 109,504 | 109,671 | ||||||
| Accrued expenses | 59,176 | 47,528 | ||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 87,870 | 81,501 | ||||||
| Notes payable | 700 | 1,700 | ||||||
| Income taxes payable | 19,831 | 2,612 | ||||||
| Total current liabilities | 278,754 | 244,662 | ||||||
| Other liabilities | 4,314 | 14,362 | ||||||
| Debt, less current portion | 338,037 | 217,230 | ||||||
| Deferred income tax liability, net | 26,481 | 11,322 | ||||||
| Operating lease liabilities | 19,458 | 20,230 | ||||||
| Total liabilities | 667,044 | 507,806 | ||||||
| Commitments and contingencies (See Note 14) | ||||||||
| Shareholders’ equity: | ||||||||
| Preferred stock, $.01 par value; 10,000 shares authorized, none issued | — | — | ||||||
| Common stock, $.01 par value; 100,000,000 shares authorized, 35,250,489 and 34,978,009 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively | 352 | 349 | ||||||
| Capital in excess of par value | 255,807 | 255,211 | ||||||
| Retained earnings | 42,554 | 6,570 | ||||||
| Accumulated other comprehensive loss | (12,922 | ) | (14,441 | ) | ||||
| Total CECO shareholders' equity | 285,791 | 247,689 | ||||||
| Noncontrolling interest | 4,260 | 4,204 | ||||||
| Total shareholders' equity | 290,051 | 251,893 | ||||||
| Total liabilities and shareholders' equity | $ | 957,095 | $ | 759,699 | ||||
| CECO ENVIRONMENTAL CORP. CONSOLIDATED STATEMENTS OF INCOME (unaudited) | ||||||||
| Three months ended March 31, | ||||||||
| (in thousands, except per share data) | 2025 | 2024 | ||||||
| Net sales | $ | 176,697 | $ | 126,332 | ||||
| Cost of sales | 114,535 | 81,200 | ||||||
| Gross profit | 62,162 | 45,132 | ||||||
| Selling and administrative expenses | 53,542 | 34,908 | ||||||
| Amortization expenses | 3,096 | 2,156 | ||||||
| Acquisition and integration expenses | 8,143 | 190 | ||||||
| Gain on sale of Global Pump Solutions business | (64,502 | ) | — | |||||
| Other expenses | 13 | 192 | ||||||
| Income from operations | 61,870 | 7,686 | ||||||
| Other expense, net | (594 | ) | (1,513 | ) | ||||
| Interest expense | (6,217 | ) | (3,413 | ) | ||||
| Income before income taxes | 55,059 | 2,760 | ||||||
| Income tax expense | 18,617 | 667 | ||||||
| Net income | 36,442 | 2,093 | ||||||
| Noncontrolling interest | (458 | ) | (585 | ) | ||||
| Net income attributable to CECO Environmental Corp. | $ | 35,984 | $ | 1,508 | ||||
| Earnings per share: | ||||||||
| Basic | $ | 1.03 | $ | 0.04 | ||||
| Diluted | $ | 0.98 | $ | 0.04 | ||||
| Weighted average number of common shares outstanding: | ||||||||
| Basic | 35,028,301 | 34,846,163 | ||||||
| Diluted | 36,689,320 | 36,177,323 | ||||||
| CECO ENVIRONMENTAL CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| Three months ended March 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 36,442 | $ | 2,093 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | 5,115 | 3,512 | ||||||
| Unrealized foreign currency gain (loss) | (1,142 | ) | 149 | |||||
| Gain on sale of Global Pump Solutions business | (64,502 | ) | — | |||||
| (Loss) gain on sale of property and equipment | (15 | ) | 115 | |||||
| Debt discount amortization | 206 | 120 | ||||||
| Share-based compensation expense | 3,356 | 1,670 | ||||||
| Provision (recovery) for credit loss | 819 | (384 | ) | |||||
| Inventory reserve expense | 92 | 499 | ||||||
| Deferred income tax benefit | 166 | — | ||||||
| Changes in operating assets and liabilities, net of acquisitions: | ||||||||
| Accounts receivable | 16,215 | (5,355 | ) | |||||
| Costs and estimated earnings in excess of billings on uncompleted contracts | (12,270 | ) | 7,858 | |||||
| Inventories | (2,416 | ) | (4,447 | ) | ||||
| Prepaid expense and other current assets | (17,652 | ) | 1,211 | |||||
| Deferred charges and other assets | (1,137 | ) | (221 | ) | ||||
| Accounts payable | (3,633 | ) | (2,442 | ) | ||||
| Accrued expenses | 8,865 | 1,220 | ||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 5,933 | 1,262 | ||||||
| Income taxes payable | 17,220 | (387 | ) | |||||
| Other liabilities | (3,358 | ) | (5,249 | ) | ||||
| Net cash (used in) provided by operating activities | (11,696 | ) | 1,224 | |||||
| Cash flows from investing activities: | ||||||||
| Acquisitions of property and equipment | (3,385 | ) | (3,116 | ) | ||||
| Net cash proceeds for sale of Global Pump Solutions business | 105,860 | — | ||||||
| Net cash (paid) received for acquisitions, net of cash acquired | (97,646 | ) | 422 | |||||
| Net cash provided by (used in) investing activities | 4,829 | (2,694 | ) | |||||
| Cash flows from financing activities: | ||||||||
| Borrowings on revolving credit lines | 148,100 | 13,400 | ||||||
| Repayments on revolving credit lines | (27,600 | ) | (12,600 | ) | ||||
| Repayments of long-term debt | (420 | ) | (2,553 | ) | ||||
| Payments on finance leases and financing liability | (234 | ) | (229 | ) | ||||
| Deferred consideration paid for acquisitions | (1,000 | ) | (1,000 | ) | ||||
| Equity awards surrendered by employees for tax liability, net of proceeds from employee stock purchase plan and exercise of stock options | (2,688 | ) | 258 | |||||
| Noncontrolling interest distributions | (402 | ) | (804 | ) | ||||
| Common stock repurchased | — | (3,000 | ) | |||||
| Net cash provided by (used in) financing activities | 115,756 | (6,528 | ) | |||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (414 | ) | (422 | ) | ||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 108,475 | (8,420 | ) | |||||
| Cash, cash equivalents and restricted cash at beginning of period | 38,201 | 55,448 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 146,676 | $ | 47,028 | ||||
| Cash paid during the period for: | ||||||||
| Interest | $ | 3,987 | $ | 3,269 | ||||
| Income taxes | $ | 2,405 | $ | 975 | ||||
| CECO ENVIRONMENTAL CORP. RECONCILIATION OF GAAP TO NON-GAAP MEASURES | ||||||||
| Three months ended March 31, | ||||||||
| (in millions, except ratios) | 2025 | 2024 | ||||||
| Operating income as reported in accordance with GAAP | $ | 61.9 | $ | 7.7 | ||||
| Operating margin in accordance with GAAP | 35.0 | % | 6.1 | % | ||||
| Amortization expenses | 3.1 | 2.2 | ||||||
| Acquisition and integration expenses | 8.1 | 0.2 | ||||||
| Gain on sale of Global Pump Solutions business | (64.5 | ) | — | |||||
| Other expenses(1) | — | 0.1 | ||||||
| Non-GAAP operating income | $ | 8.6 | $ | 10.2 | ||||
| Non-GAAP operating margin | 4.9 | % | 8.1 | % | ||||
| Three months ended March 31, | ||||||||
| (in millions, except share data) | 2025 | 2024 | ||||||
| Net income as reported in accordance with GAAP | $ | 36.0 | $ | 1.5 | ||||
| Amortization and earnout expenses | 3.1 | 2.2 | ||||||
| Acquisition and integration expenses | 8.1 | 0.2 | ||||||
| Gain on sale of Global Pump Solutions business | (64.5 | ) | — | |||||
| Restructuring expenses | — | 0 | ||||||
| Foreign currency remeasurement | 0.6 | 0.9 | ||||||
| Tax (benefit) expense of adjustments | 20.2 | (0.9 | ) | |||||
| Non-GAAP net income | $ | 3.5 | $ | 4.0 | ||||
| Depreciation | 2.0 | 1.3 | ||||||
| Non-cash stock compensation | 3.4 | 1.7 | ||||||
| Other expense, net | — | 0.6 | ||||||
| Interest expense | 6.2 | 3.4 | ||||||
| Income tax expense | (1.6 | ) | 1.6 | |||||
| Noncontrolling interest | 0.5 | 0.6 | ||||||
| Adjusted EBITDA | $ | 14.0 | $ | 13.2 | ||||
| Earnings per share: | ||||||||
| Basic | $ | 1.03 | $ | 0.04 | ||||
| Diluted | $ | 0.98 | $ | 0.04 | ||||
| Non-GAAP net (loss) income per share: | ||||||||
| Basic | $ | 0.10 | $ | 0.11 | ||||
| Diluted | $ | 0.10 | $ | 0.11 | ||||
| Three months ended March 31, | |||||||
| (in millions) | 2025 | 2024 | |||||
| Net cash provided by operating activities | $ | (11.7 | ) | $ | 1.2 | ||
| Acquisitions of property and equipment | (3.4 | ) | (3.1 | ) | |||
| Free cash flow | $ | (15.1 | ) | $ | (1.9 | ) | |
NOTE REGARDING NON-GAAP FINANCIAL MEASURES
CECO is providing certain non-GAAP historical financial measures as presented above as we believe 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 accordance with GAAP.
Non-GAAP operating income, non-GAAP net income, non-GAAP operating margin, non-GAAP earnings per basic and diluted share, adjusted EBITDA and free cash flow, 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, foreign currency remeasurement 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 better 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, adjusted EBITDA and free cash flow 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, non-GAAP earnings per basic and diluted share, adjusted EBITDA and free cash flow stated in the tables above are reconciled to the most directly comparable GAAP financial measures.
Non-GAAP measures presented on a forward-looking basis were not reconciled to the comparable GAAP financial measures because the reconciliation could not be performed without unreasonable efforts. The GAAP measures are not accessible on a forward-looking basis because we are currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures for these periods but would not impact the non-GAAP measures. Such items may include 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, foreign currency remeasurement and other nonrecurring or infrequent items and the associated tax benefit of these items. The unavailable information could have a significant impact on our GAAP financial results.
SAFE HARBOR
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 within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, 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, 2024 and may be included in subsequently filed Quarterly Reports on Form 10-Q, and include, but are not limited to: the effect of the divestiture of our Fluid Handling business on business relationships, operating results, and business generally, disruption of current plans and operations and potential difficulties in employee retention as a result of the transaction, diversion of management’s attention from ongoing business operations in connection with the integration of recent acquisitions, the amount of the costs, fees, expenses and other charges related to the transaction, the achievement of the anticipated benefits of transactions, our ability to successfully integrate acquired businesses and realize the synergies from acquisitions, as well as a number of factors related to our business, including the sensitivity of our business to economic and financial market conditions generally and economic conditions in CECO’s service areas; the potential for fluctuations in prices for manufactured components and raw materials, including as a result of tariffs and surcharges, and rising energy costs; inflationary pressures relating to rising raw material costs and the cost of labor; 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 our infrastructure, resources, and existing sales; the ability to expand operations in both new and existing markets; the potential for contract delay or cancellation as a result of on-going or worsening supply chain challenges or other customer considerations; 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 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; our ability to repurchase shares of our common stock and the amounts and timing of repurchases; our ability to successfully realize the expected benefits of our restructuring program; economic and political conditions generally; our ability to optimize our business portfolio by identifying acquisition targets, executing upon any strategic acquisitions or divestitures, integrating acquired businesses and realizing the synergies from strategic transactions; and the unpredictability and severity of catastrophic events, including cyber security threats, acts of terrorism or outbreak of war or hostilities or public health crises, 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. 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.
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