CECO Environmental Reports Fourth Quarter and Full Year 2024 Results
CECO Environmental reported record Q4 2024 bookings of $218.9 million (up 71%) and elevated year-end backlog to a record $540.9 million (up 46%). Q4 revenue increased 3% to $158.6 million with gross profit up 7% to $56.7 million and improved gross margin of 35.8%. Q4 net income rose 26% to $4.9 million, though free cash flow was negative at ($4.4) million.
For full-year 2024, CECO reported orders of $667.3 million (up 14%), revenue of $557.9 million (up 2%), and gross profit of $196.1 million (up 15%). The company completed three strategic acquisitions in 2024, plus Profire Energy in early January 2025, expanding its industrial air market leadership.
CECO reaffirmed its 2025 outlook with expected revenue of $700-750 million (approximately 30% growth) and Adjusted EBITDA of $90-100 million (approximately 50% growth). The company expects to finalize the sale of its Fluid Handling Business in late Q1 2025.
CECO Environmental ha riportato un record di ordini per il Q4 2024 pari a 218,9 milioni di dollari (in aumento del 71%) e un backlog di fine anno elevato a un record di 540,9 milioni di dollari (in aumento del 46%). I ricavi del Q4 sono aumentati del 3% a 158,6 milioni di dollari, con un utile lordo aumentato del 7% a 56,7 milioni di dollari e un margine lordo migliorato del 35,8%. L'utile netto del Q4 è aumentato del 26% a 4,9 milioni di dollari, sebbene il flusso di cassa libero sia stato negativo a (-4,4) milioni di dollari.
Per l'intero anno 2024, CECO ha riportato ordini per 667,3 milioni di dollari (in aumento del 14%), ricavi di 557,9 milioni di dollari (in aumento del 2%) e un utile lordo di 196,1 milioni di dollari (in aumento del 15%). L'azienda ha completato tre acquisizioni strategiche nel 2024, oltre a Profire Energy all'inizio di gennaio 2025, espandendo la sua leadership nel mercato dell'aria industriale.
CECO ha confermato le sue previsioni per il 2025 con ricavi attesi tra 700 e 750 milioni di dollari (circa il 30% di crescita) e un EBITDA rettificato tra 90 e 100 milioni di dollari (circa il 50% di crescita). L'azienda prevede di finalizzare la vendita della sua attività di Fluid Handling entro la fine del Q1 2025.
CECO Environmental reportó un récord de pedidos para el Q4 2024 de 218,9 millones de dólares (un aumento del 71%) y un backlog de fin de año elevado a un récord de 540,9 millones de dólares (un aumento del 46%). Los ingresos del Q4 aumentaron un 3% a 158,6 millones de dólares, con un beneficio bruto que aumentó un 7% a 56,7 millones de dólares y un margen bruto mejorado del 35,8%. El ingreso neto del Q4 creció un 26% a 4,9 millones de dólares, aunque el flujo de caja libre fue negativo en (-4,4) millones de dólares.
Para el año completo 2024, CECO reportó pedidos de 667,3 millones de dólares (un aumento del 14%), ingresos de 557,9 millones de dólares (un aumento del 2%) y un beneficio bruto de 196,1 millones de dólares (un aumento del 15%). La empresa completó tres adquisiciones estratégicas en 2024, además de Profire Energy a principios de enero de 2025, ampliando su liderazgo en el mercado del aire industrial.
CECO reafirmó su perspectiva para 2025 con ingresos esperados de 700 a 750 millones de dólares (aproximadamente un 30% de crecimiento) y un EBITDA ajustado de 90 a 100 millones de dólares (aproximadamente un 50% de crecimiento). La empresa espera finalizar la venta de su negocio de manejo de fluidos a finales del Q1 2025.
CECO Environmental는 2024년 4분기 주문이 2억 1,890만 달러(71% 증가)로 기록을 세우고, 연말 백로그가 5억 4,090만 달러(46% 증가)로 상승했다고 보고했습니다. 4분기 수익은 1억 5,860만 달러로 3% 증가했으며, 총 이익은 5,670만 달러로 7% 증가하고 총 이익률은 35.8%로 개선되었습니다. 4분기 순이익은 490만 달러로 26% 증가했지만, 자유 현금 흐름은 (-440만 달러)로 부정적이었습니다.
2024년 전체 연도에 대해 CECO는 6억 6,730만 달러(14% 증가)의 주문, 5억 5,790만 달러(2% 증가)의 수익, 1억 9,610만 달러(15% 증가)의 총 이익을 보고했습니다. 이 회사는 2024년에 세 건의 전략적 인수를 완료했으며, 2025년 1월 초에는 Profire Energy를 인수하여 산업 공기 시장의 리더십을 확장했습니다.
CECO는 2025년 전망을 재확인하며 예상 수익을 7억에서 7억 5천만 달러(약 30% 성장)와 조정된 EBITDA를 9천만에서 1억 달러(약 50% 성장)로 제시했습니다. 이 회사는 2025년 1분기 말에 유체 처리 사업의 매각을 마무리할 계획입니다.
CECO Environmental a annoncé des commandes record pour le 4ème trimestre 2024 s'élevant à 218,9 millions de dollars (en hausse de 71%) et un carnet de commandes de fin d'année à un niveau record de 540,9 millions de dollars (en hausse de 46%). Les revenus du 4ème trimestre ont augmenté de 3% pour atteindre 158,6 millions de dollars, avec un bénéfice brut en hausse de 7% à 56,7 millions de dollars et une marge brute améliorée de 35,8%. Le bénéfice net du 4ème trimestre a augmenté de 26% pour atteindre 4,9 millions de dollars, bien que le flux de trésorerie disponible ait été négatif à (-4,4) millions de dollars.
Pour l'ensemble de l'année 2024, CECO a annoncé des commandes de 667,3 millions de dollars (en hausse de 14%), des revenus de 557,9 millions de dollars (en hausse de 2%) et un bénéfice brut de 196,1 millions de dollars (en hausse de 15%). L'entreprise a réalisé trois acquisitions stratégiques en 2024, ainsi que Profire Energy début janvier 2025, renforçant ainsi sa position de leader sur le marché de l'air industriel.
CECO a réaffirmé ses prévisions pour 2025 avec des revenus attendus entre 700 et 750 millions de dollars (environ 30% de croissance) et un EBITDA ajusté entre 90 et 100 millions de dollars (environ 50% de croissance). L'entreprise prévoit de finaliser la vente de son activité de gestion des fluides d'ici la fin du premier trimestre 2025.
CECO Environmental berichtete über Rekordbuchungen im 4. Quartal 2024 in Höhe von 218,9 Millionen Dollar (ein Anstieg von 71%) und einen erhöhten Auftragsbestand zum Jahresende von 540,9 Millionen Dollar (ein Anstieg von 46%). Die Einnahmen im 4. Quartal stiegen um 3% auf 158,6 Millionen Dollar, während der Bruttogewinn um 7% auf 56,7 Millionen Dollar anstieg und die Bruttomarge auf 35,8% verbessert wurde. Der Nettogewinn im 4. Quartal stieg um 26% auf 4,9 Millionen Dollar, obwohl der freie Cashflow negativ bei (-4,4) Millionen Dollar war.
Für das gesamte Jahr 2024 meldete CECO Aufträge in Höhe von 667,3 Millionen Dollar (ein Anstieg von 14%), Einnahmen von 557,9 Millionen Dollar (ein Anstieg von 2%) und einen Bruttogewinn von 196,1 Millionen Dollar (ein Anstieg von 15%). Das Unternehmen hat im Jahr 2024 drei strategische Übernahmen abgeschlossen, einschließlich Profire Energy Anfang Januar 2025, und erweitert damit seine Marktführerschaft im Bereich industrielle Luft.
CECO bestätigte seine Prognose für 2025 mit einem erwarteten Umsatz von 700 bis 750 Millionen Dollar (etwa 30% Wachstum) und einem bereinigten EBITDA von 90 bis 100 Millionen Dollar (etwa 50% Wachstum). Das Unternehmen plant, den Verkauf seines Fluid Handling Business Ende Q1 2025 abzuschließen.
- Record Q4 bookings of $218.9 million, up 71%
- Record backlog of $540.9 million, up 46%
- Q4 gross profit increased 7% to $56.7 million with margin up 120 basis points to 35.8%
- Q4 net income up 26% to $4.9 million
- Full-year gross profit up 15% to $196.1 million with margin up 380 basis points to 35.2%
- Full-year Adjusted EBITDA up 9% to $62.8 million
- Completed three strategic acquisitions in 2024 plus Profire Energy in January 2025
- 2025 guidance projects 30% revenue growth and 50% Adjusted EBITDA growth
- Upgraded credit facility with $400M Revolver and capacity for $150M additional debt
- Q4 revenue growth to only 3% at $158.6 million
- Q4 Adjusted EBITDA down 2% to $19.0 million
- Q4 free cash flow negative at ($4.4) million, down $16.6 million
- Full-year free cash flow down 80% to $7.4 million
- Full-year GAAP EPS decreased 3% to $0.36
- Customer project and market related order delays impacted 2024 results
Insights
CECO Environmental's Q4 and full-year 2024 results reveal a company positioned for significant growth in 2025 despite mixed current performance. The record $218.9 million in Q4 bookings (up 71%) and $540.9 million backlog (up 46%) demonstrate substantial momentum that hasn't yet translated into current-period revenue, which grew modestly at 3% for Q4 and 2% for the full year.
The dramatic divergence between bookings growth (71%) and revenue growth (3%) in Q4 suggests a significant revenue acceleration lies ahead as this backlog converts to recognized revenue. This timing gap explains management's confident 2025 revenue guidance of $700-750 million, representing approximately 30% growth—a dramatic acceleration from 2024's 2% growth rate.
Margin expansion represents a clear bright spot, with gross margins improving 120 basis points in Q4 to 35.8% and 380 basis points for the full year to 35.2%. This expansion amid modest revenue growth indicates successful execution of the company's portfolio upgrade strategy, with higher-value solutions comprising a greater percentage of overall sales.
The concerning 80% decline in full-year free cash flow to $7.4 million warrants scrutiny, especially given the otherwise positive operational metrics. Management attributes this to timing issues, and early 2025 comments about strong receivables collection support this explanation rather than suggesting deeper operational problems. The 2025 free cash flow guidance of 60-75% of Adjusted EBITDA (higher than standard guidance) indicates management expects this metric to normalize.
CECO's acquisition strategy appears to be accelerating, with three deals closed in 2024 and Profire Energy already completed in January 2025. These acquisitions serve multiple strategic purposes: expanding into adjacent growth markets, enhancing technological capabilities, adding service revenue streams, and improving the overall margin profile. The upgraded $400 million credit facility plus capacity for $150 million in additional unsecured debt provides substantial financial flexibility for further M&A activity.
Management specifically highlighted strong demand in power generation, data centers, industrial reshoring, and natural gas infrastructure markets. These sectors align with major global investment trends including energy transition, digital transformation, and supply chain security—suggesting CECO's growth is supported by durable macro tailwinds rather than temporary factors.
The planned divestiture of the Fluid Handling Business in Q1 2025 further demonstrates CECO's portfolio reshaping strategy, focusing resources on higher-growth, higher-margin opportunities while divesting non-core assets.
Despite the mixed 2024 performance, the combination of record backlog, strategic acquisitions, margin expansion, and exposure to growing end markets positions CECO for potential outperformance in 2025 if execution remains solid and macro conditions remain supportive.
CECO Environmental's Q4 and full-year 2024 results reveal a company undergoing strategic transformation amid favorable industrial market tailwinds. The 71% surge in Q4 orders to $218.9 million and 46% growth in backlog to $540.9 million represent powerful leading indicators that significantly outpace current revenue growth (3% in Q4, 2% for the year).
This growing order-to-revenue gap indicates CECO is experiencing demand acceleration that hasn't yet materialized in financial results—a classic early indicator of an industrial upcycle. The backlog composition appears diverse across multiple end markets rather than dependent on a few mega-projects, reducing concentration risk while providing revenue visibility through 2025.
CECO's strategic positioning across four high-growth industrial sectors creates a powerful diversification advantage:
- Power generation: Both traditional power infrastructure upgrades and renewable energy transitions require environmental control systems
- Data centers: The AI computing boom is driving unprecedented data center construction requiring specialized air handling and environmental systems
- Industrial reshoring: Manufacturing returning to North America faces stringent environmental regulations requiring CECO's solutions
- Natural gas infrastructure: Continued investment in natural gas as a transition fuel creates demand for emissions control technology
The 380 basis point full-year gross margin expansion to 35.2% demonstrates CECO's shift toward higher-value engineered solutions and services rather than commoditized equipment. This margin improvement during modest revenue growth suggests successful implementation of the company's portfolio upgrade strategy rather than temporary factors.
CECO's acquisition strategy targets fragmented niches within the industrial environmental sector where specialized knowledge creates barriers to entry. The four recent acquisitions appear complementary rather than transformative, suggesting an intelligent roll-up strategy focused on specific capabilities and customer relationships rather than mere scale.
The planned divestiture of the Fluid Handling Business represents portfolio pruning of a likely lower-margin, less differentiated business unit, further concentrating resources on higher-growth, higher-margin opportunities. This focus on portfolio optimization rather than size for its own sake indicates disciplined capital allocation.
The concerning 80% decline in full-year free cash flow to $7.4 million appears primarily timing-related rather than structural, as evidenced by management's comments about strong early 2025 receivables collection. The higher-than-standard 2025 free cash flow guidance (60-75% of Adjusted EBITDA) suggests confidence in working capital normalization.
CECO's 2025 guidance implies significant acceleration, but appears well-supported by the record backlog, acquisition contributions, and exposure to capital-intensive growth markets. The company's position at the intersection of industrial growth and environmental compliance requirements creates a compelling long-term value proposition as regulations continue to tighten globally.
Record Bookings in the Quarter of
Reaffirms 2025 Full Year Outlook
ADDISON, Texas, Feb. 25, 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 fourth quarter and full year of 2024.
Highlights for the Quarter(1)
- Orders of
$218.9 million , up 71 percent - Backlog of
$540.9 million , up 46 percent - Revenue of
$158.6 million , up 3 percent - Gross profit of
$56.7 million , up 7 percent; Gross margin of 35.8 percent, up 120 basis points - Net income of
$4.9 million , up 26 percent; non-GAAP net income of$9.9 million , down 2 percent - GAAP EPS (diluted) of
$0.13 , up 18 percent; non-GAAP EPS (diluted) of$0.27 , down 4 percent - Adjusted EBITDA of
$19.0 million , down 2 percent - Free cash flow of (
$4.4) million , down$16.6 million
Highlights for the Year(1)
- Orders of
$667.3 million , up 14 percent - Revenue of
$557.9 million , up 2 percent - Gross profit of
$196.1 million , up 15 percent; Gross margin of 35.2 percent, up 380 basis points - Net income of
$13.0 million , up 1 percent; non-GAAP net income of$26.7 million - GAAP EPS (diluted) of
$0.36 , down 3 percent; non-GAAP EPS (diluted) of$0.73 , down 2 percent - Adjusted EBITDA of
$62.8 million , up 9 percent - Free cash flow of
$7.4 million , down 80 percent - Completed three acquisitions (EnviroCare International, WK Group and Verantis Environmental Solutions Group), advancing our Industrial Air market leadership
(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, “While we acknowledge mixed results in 2024 driven by customer project and market related order delays, we are energized by our fourth quarter record orders bookings of
Fourth quarter operating income was
Full year operating income was
“Over the past six months we have completed four strategic and accretive M&A transactions – including the Profire Energy acquisition in early January 2025. Each of our acquisitions adds important new growth markets, technologies and solutions, and service capabilities to further advance our niche, industrial leadership positions and improve our overall business mix while improving our margin profile. In addition, we upgraded our credit facility, which now includes a
2025 Full Year Guidance
The Company maintains its previously announced full year 2025 outlook which includes expected Revenue of
“Our full year 2025 outlook reflects the strong visibility we have with our record backlog, strong bookings, 2024 related project push outs, and the impact from our acquisitions. So far in early 2025, we are experiencing a continuation of the strong power generation, data center, general industrial and natural gas infrastructure markets that drove our strong Q4 orders. Our early 2025 working capital performance – specifically receivables – is very strong as we have collected significant cash payments that pushed out of 2024 by just a few weeks. The integrations associated with our recent acquisitions are on-or-ahead of schedule, and we continue to open international sales and service centers to support our global footprint. We expect to deliver an outstanding 2025, affirmed by our full year guidance, as we progress our operating model supported by strong organic growth, coupled with steady margin expansion,” concluded Gleason.
| EARNINGS CONFERENCE CALL |
A conference call is scheduled for today at 8:30 a.m. ET to discuss the fourth quarter and full year 2024 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/wr6yr8ri.
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/wr6yr8ri.
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 | |||||||||
| December 31, | |||||||||
| (dollars in thousands, except share data) | 2024 | 2023 | |||||||
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 37,832 | $ | 54,779 | |||||
| Restricted cash | 369 | 669 | |||||||
| Accounts receivable, net of allowances of | 159,572 | 112,733 | |||||||
| Costs and estimated earnings in excess of billings on uncompleted contracts | 69,889 | 66,574 | |||||||
| Inventories, net | 42,624 | 34,089 | |||||||
| Prepaid expenses and other current assets | 16,859 | 11,769 | |||||||
| Prepaid income taxes | 3,826 | 824 | |||||||
| Total current assets | 330,971 | 281,437 | |||||||
| Property, plant and equipment, net | 33,810 | 26,237 | |||||||
| Right-of-use assets from operating leases | 25,102 | 16,256 | |||||||
| Goodwill | 269,747 | 211,326 | |||||||
| Intangible assets – finite life, net | 74,050 | 50,461 | |||||||
| Intangible assets – indefinite life | 9,466 | 9,570 | |||||||
| Deferred income tax assets | 966 | 304 | |||||||
| Deferred charges and other assets | 15,587 | 4,700 | |||||||
| Total assets | $ | 759,699 | $ | 600,291 | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||
| Current liabilities: | |||||||||
| Current portion of debt | $ | 1,650 | $ | 10,488 | |||||
| Accounts payable | 109,671 | 87,691 | |||||||
| Accrued expenses | 47,528 | 44,301 | |||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 81,501 | 56,899 | |||||||
| Notes payable | 1,700 | 2,500 | |||||||
| Income taxes payable | 2,612 | 1,227 | |||||||
| Total current liabilities | 244,662 | 203,106 | |||||||
| Other liabilities | 14,362 | 12,644 | |||||||
| Debt, less current portion | 217,230 | 126,795 | |||||||
| Deferred income tax liabilities | 11,322 | 8,838 | |||||||
| Operating lease liabilities | 20,230 | 11,417 | |||||||
| Total liabilities | 507,806 | 362,800 | |||||||
| Commitments and contingencies (See Note 12) | |||||||||
| Shareholders’ equity: | |||||||||
| Preferred stock, $.01 par value; 10,000 shares authorized, none issued | — | — | |||||||
| Common stock, $.01 par value; 100,000,000 shares authorized, 34,978,009 and 34,835,293 shares issued and outstanding at December 31, 2024 and 2023, respectively | 349 | 348 | |||||||
| Capital in excess of par value | 255,211 | 254,956 | |||||||
| Retained earnings (accumulated loss) | 6,570 | (6,387 | ) | ||||||
| Accumulated other comprehensive loss | (14,441 | ) | (16,274 | ) | |||||
| Total CECO shareholders’ equity | 247,689 | 232,643 | |||||||
| Noncontrolling interest | 4,204 | 4,848 | |||||||
| Total shareholders' equity | 251,893 | 237,491 | |||||||
| Total liabilities and shareholders’ equity | $ | 759,699 | $ | 600,291 | |||||
| CECO ENVIRONMENTAL CORP. CONSOLIDATED STATEMENTS OF INCOME (unaudited) | |||||||||||||||||||
| Three months ended December 31, | Year ended December 31, | ||||||||||||||||||
| (in thousands, except share and per share data) | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
| Net sales | $ | 158,566 | $ | 153,711 | $ | 557,933 | $ | 544,845 | |||||||||||
| Cost of sales | 101,865 | 100,526 | 361,786 | 373,829 | |||||||||||||||
| Gross profit | 56,701 | 53,185 | 196,147 | 171,016 | |||||||||||||||
| Selling and administrative expenses | 41,062 | 36,862 | 146,698 | 122,944 | |||||||||||||||
| Amortization and earnout expenses | 2,028 | 2,192 | 9,064 | 8,180 | |||||||||||||||
| Acquisition and integration expenses | 2,337 | 298 | 4,213 | 2,508 | |||||||||||||||
| Executive transition expenses | — | 48 | — | 1,465 | |||||||||||||||
| Restructuring expenses | — | 1,133 | 544 | 1,350 | |||||||||||||||
| Asbestos litigation expenses | — | — | 225 | — | |||||||||||||||
| Income from operations | 11,274 | 12,652 | 35,403 | 34,569 | |||||||||||||||
| Other (expense) income, net | (2,103 | ) | 1,042 | (4,692 | ) | 372 | |||||||||||||
| Interest expense | (3,705 | ) | (3,918 | ) | (13,020 | ) | (13,416 | ) | |||||||||||
| Income before income taxes | 5,466 | 9,776 | 17,691 | 21,525 | |||||||||||||||
| Income tax expense | 606 | 5,447 | 3,270 | 7,024 | |||||||||||||||
| Net income | 4,860 | 4,329 | 14,421 | 14,501 | |||||||||||||||
| Noncontrolling interest | 18 | (450 | ) | (1,464 | ) | (1,590 | ) | ||||||||||||
| Net income attributable to CECO Environmental Corp. | $ | 4,878 | $ | 3,879 | $ | 12,957 | $ | 12,911 | |||||||||||
| Income per share: | |||||||||||||||||||
| Basic | $ | 0.14 | $ | 0.11 | $ | 0.37 | $ | 0.37 | |||||||||||
| Diluted | $ | 0.13 | $ | 0.11 | $ | 0.36 | $ | 0.37 | |||||||||||
| Weighted average number of common shares outstanding: | |||||||||||||||||||
| Basic | 34,978,382 | 34,823,663 | 34,927,313 | 34,665,473 | |||||||||||||||
| Diluted | 36,559,198 | 35,687,092 | 36,381,910 | 35,334,090 | |||||||||||||||
| CECO ENVIRONMENTAL CORP. | |||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
| Year ended December 31, | |||||||||
| (dollars in thousands) | 2024 | 2023 | |||||||
| Cash flows from operating activities: | |||||||||
| Net income | $ | 14,421 | $ | 14,501 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
| Depreciation and amortization | 14,523 | 12,507 | |||||||
| Unrealized foreign currency loss (gain) | 2,664 | (1,041 | ) | ||||||
| Fair value adjustments to earnout liabilities | 134 | 296 | |||||||
| Earnout payments | — | — | |||||||
| Loss on sale of property and equipment | 191 | 110 | |||||||
| Amortization of debt discount | 498 | 427 | |||||||
| Share-based compensation expense | 7,514 | 4,533 | |||||||
| Bad debt expense | 295 | 1,593 | |||||||
| Inventory reserve expense | 1,056 | 1,099 | |||||||
| Deferred income tax benefit | (3,606 | ) | (118 | ) | |||||
| Changes in operating assets and liabilities, net of acquisitions: | |||||||||
| Accounts receivable | (52,355 | ) | (26,851 | ) | |||||
| Cost and estimated earnings of billings on uncompleted contracts | (4,149 | ) | 5,040 | ||||||
| Inventories | (9,814 | ) | (6,896 | ) | |||||
| Prepaid expenses and other current assets | (8,347 | ) | 1,196 | ||||||
| Deferred charges and other assets | (12,736 | ) | (1,420 | ) | |||||
| Accounts payable | 36,181 | 13,852 | |||||||
| Accrued expenses | 7,119 | 8,340 | |||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 24,923 | 21,575 | |||||||
| Income taxes payable | 1,425 | (1,976 | ) | ||||||
| Other liabilities | 4,891 | (2,120 | ) | ||||||
| Net cash provided by operating activities | 24,828 | 44,647 | |||||||
| Cash flows from investing activities: | |||||||||
| Acquisitions of property and equipment | (17,368 | ) | (8,384 | ) | |||||
| Net proceeds from sale of assets | 4 | — | |||||||
| Cash paid for acquisitions, net of cash acquired | (87,948 | ) | (48,102 | ) | |||||
| Net cash used in investing activities | (105,312 | ) | (56,486 | ) | |||||
| Cash flows from financing activities: | |||||||||
| Borrowings on revolving credit lines | 309,300 | 106,600 | |||||||
| Repayments on revolving credit lines | (112,400 | ) | (150,600 | ) | |||||
| Borrowings of long-term debt | — | 75,000 | |||||||
| Repayments of long-term debt | (113,982 | ) | (4,985 | ) | |||||
| Repayments of notes payable | — | — | |||||||
| Deferred financing fees paid | (1,924 | ) | (363 | ) | |||||
| Deferred consideration paid for acquisitions | (2,050 | ) | (1,247 | ) | |||||
| Payments on capital leases and sale-leaseback financing liability | (925 | ) | (907 | ) | |||||
| Earnout payments | (2,831 | ) | (2,123 | ) | |||||
| Equity awards surrendered by employees for tax liability, net of proceeds from employee stock purchase plan and exercise of stock options | (2,169 | ) | 1,435 | ||||||
| Distributions to non-controlling interest | (2,109 | ) | (1,666 | ) | |||||
| Common stock repurchases | (5,000 | ) | — | ||||||
| Net cash provided by financing activities | 65,910 | 21,144 | |||||||
| Effect of exchange rate changes on cash and cash equivalents | (2,673 | ) | (442 | ) | |||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (17,247 | ) | 8,863 | ||||||
| Cash, cash equivalents and restricted cash at beginning of year | 55,448 | 46,585 | |||||||
| Cash, cash equivalents and restricted cash at end of year | $ | 38,201 | $ | 55,448 | |||||
| Cash paid during the period for: | |||||||||
| Interest | $ | 13,335 | $ | 12,098 | |||||
| Income taxes | $ | 9,550 | $ | 9,916 | |||||
| CECO ENVIRONMENTAL CORP. RECONCILIATION OF GAAP TO NON-GAAP MEASURES | ||||||||||||||
| Year Ended December 31, | ||||||||||||||
| (dollars in millions) | 2024 | 2023 | 2022 | |||||||||||
| Gross profit as reported in accordance with GAAP | $ | 196.1 | $ | 171.0 | $ | 128.2 | ||||||||
| Gross profit margin in accordance with GAAP | 35.1 | % | 31.4 | % | 30.3 | % | ||||||||
| Legacy design repairs | — | — | 2.0 | |||||||||||
| Plant, property and equipment valuation adjustment | — | — | 0.6 | |||||||||||
| Non-GAAP gross profit | $ | 196.1 | $ | 171.0 | $ | 130.8 | ||||||||
| Non-GAAP gross profit margin | 35.1 | % | 31.4 | % | 31.0 | % | ||||||||
| Three months ended December 31, | Year ended December 31, | ||||||||||||||||||
| (in millions, except share data) | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
| Net income as reported in accordance with GAAP | $ | 4.9 | $ | 3.9 | $ | 13.0 | $ | 12.9 | |||||||||||
| Amortization and earnout expenses | 2.0 | 2.2 | 9.1 | 8.2 | |||||||||||||||
| Acquisition and integration expenses | 2.3 | 0.3 | 4.2 | 2.5 | |||||||||||||||
| Executive transition expenses | (0.5 | ) | — | — | 1.5 | ||||||||||||||
| Restructuring expenses | 1 | 1 | 0.5 | 1.3 | |||||||||||||||
| Asbestos litigation expense | — | — | 0.2 | — | |||||||||||||||
| Foreign currency remeasurement | 2.5 | (1.0 | ) | 4.3 | (1.0 | ) | |||||||||||||
| Tax benefit (expense) of adjustments | (1.8 | ) | 3.6 | (4.6 | ) | 1.2 | |||||||||||||
| Non-GAAP net income | $ | 9.9 | $ | 10.1 | $ | 26.7 | $ | 26.6 | |||||||||||
| Depreciation | 1.8 | 1.7 | 5.8 | 5.1 | |||||||||||||||
| Non-cash stock compensation | 1.7 | 1.5 | 7.5 | 4.5 | |||||||||||||||
| Other (income) expense | (0.4 | ) | (0.1 | ) | 0.4 | 0.8 | |||||||||||||
| Interest expense | 3.7 | 3.9 | 13.0 | 13.4 | |||||||||||||||
| Income tax expense | 2.3 | 1.8 | 7.9 | 5.7 | |||||||||||||||
| Noncontrolling interest | — | 0.5 | 1.5 | 1.6 | |||||||||||||||
| Adjusted EBITDA | $ | 19.0 | $ | 19.4 | $ | 62.8 | $ | 57.7 | |||||||||||
| Earnings per share: | |||||||||||||||||||
| Basic | $ | 0.14 | $ | 0.11 | $ | 0.37 | $ | 0.37 | |||||||||||
| Diluted | $ | 0.13 | $ | 0.11 | $ | 0.36 | $ | 0.37 | |||||||||||
| Adjusted earnings per share: | |||||||||||||||||||
| Basic | $ | 0.28 | $ | 0.29 | $ | 0.77 | $ | 0.77 | |||||||||||
| Diluted | $ | 0.27 | $ | 0.28 | $ | 0.73 | $ | 0.75 | |||||||||||
| Three months ended December 31, | Year ended December 31, | ||||||||||||||||||
| (in millions) | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
| Net cash (used in) provided by operating activities | $ | 1.8 | $ | 15.1 | $ | 24.8 | $ | 44.6 | |||||||||||
| Acquisitions of property and equipment | (6.2 | ) | (2.9 | ) | (17.4 | ) | (8.4 | ) | |||||||||||
| Free cash flow | $ | (4.4 | ) | $ | 12.2 | $ | 7.4 | $ | 36.2 | ||||||||||
| 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: our ability to consummate the planned divestiture of our Fluid Handling business, the effect of recently announced acquisitions and planned divestiture of our Fluid Handling Business (together, the “transactions”) 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 transactions, diversion of management’s attention from ongoing business operations in connection with the integration of recent acquisitions, the outcome of any legal proceedings that have been or may in the future be instituted related to the Profire Energy, Inc. (“Profire Energy”) transaction or other transactions, the amount of the costs, fees, expenses and other charges related to the transactions, the achievement of the anticipated benefits of transactions, the ability of Profire Energy to achieve its earnings guidance, 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; 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 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; 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.
FAQ
What were CECO Environmental's Q4 2024 financial highlights?
How did CECO's full-year 2024 performance compare to 2023?
What acquisitions did CECO complete in 2024?
What is CECO's financial outlook for 2025?
When does CECO expect to complete the sale of its Fluid Handling Business?
What were the main challenges CECO faced in 2024?
How did CECO's Q4 2024 bookings performance impact its backlog?
