CECO Environmental Reports Second Quarter and Six Month 2013 Results
Company Achieves Record Margins and Earnings
CINCINNATI, Aug. 8, 2013 /PRNewswire/ -- CECO Environmental Corp. (NasdaqGM: CECE), a leading provider of air pollution control technology and systems, today announced second quarter and six-month results for the period ended June 30, 2013.
Financial highlights for the second quarter of 2013 compared to the second quarter of 2012 include:
Net sales were $44.4 million as compared to $34.6 million in the same period of 2012, an increase of 28.3%;
Gross profit increased by 36.2% to $14.3 million as compared to $10.5 million in 2012;
Gross margin increased to 32.2% compared to 30.3% for the same quarter in 2012;
Operating income decreased to $3.3 million in 2013 compared to $4.3 million in 2012; Non-GAAP operating income, adjusted for transaction related costs including legal, accounting, banking, retention payments, earn-out expenses and amortization of intangibles related to recent acquisitions, increased to $6.2 million compared to $4.4 million, a 40.9% improvement;
Operating margin decreased to 7.4% from 12.4% in 2012; Non-GAAP operating margin, adjusted as noted above, increased to 13.9% compared to 12.4%;
Net income increased to $3.0 million in 2013 as compared to net income of $2.5 million in 2012; Non-GAAP net income, adjusted as noted above, increased to $5.5 million compared to $2.5 million;
Net income per diluted share was $0.17 in 2013 as compared to $0.15 in 2012; Non-GAAP net income per diluted share, adjusted as noted above, increased to $0.30 in 2013 compared to $0.15 in 2012;
2013 net income, including Non-GAAP net income, includes a $1.5 million net gain ($0.08 per diluted share) from the recognition of additional research and development income tax credits related to open tax years;
Bookings for the quarter were $46.5 million compared to $40.9 million in 2012, an increase of 13.7%; and
Backlog as of June 30, 2013 was $77.9 million compared to $59.5 million as of December 31, 2012 and $58.9 million as of June 30, 2012.
Financial highlights for the six months ended June 30, 2013 compared to six months ended June 30, 2012 include:
Net sales were $78.8 million as compared to $67.6 million in the same period of 2012, an increase of 16.6%;
Gross profit increased by 23.2% to $25.5 million as compared to $20.7 million in 2012;
Gross margin increased to 32.4% compared to 30.6% in 2012;
Operating income decreased to $6.6 million in 2013 compared to $8.0 million in 2012; Non-GAAP operating income, adjusted for transaction related costs including legal, accounting, banking, retention payments, earn-out expenses and amortization of intangibles related to recent acquisitions, increased to $10.8 million compared to $8.2 million, a 31.7% improvement;
Operating margin decreased to 8.4% from 11.8% in 2012; Non-GAAP operating margin, adjusted as noted above, increased to 13.7% compared to 12.1%;
Net income increased to $5.3 million in 2013 as compared to net income of $4.5 million in 2012; Non-GAAP net income, adjusted as noted above, increased to $8.7 million compared to $4.6 million;
Net income per diluted share was $0.29 in 2013 as compared to $0.27 in 2012; Non-GAAP net income per diluted share, adjusted as noted above, increased to $0.48 in 2013 compared to $0.28 in 2012;
2013 net income, including Non-GAAP net income, includes a $1.5 million net gain ($0.09 per diluted share) from the recognition of additional research and development income tax credits related to open tax years; and
Bookings Year-to-date are $84.1 million compared to $71.6 million in 2012, an increase of 17.5%.
Pending Acquisition of Met-Pro Corporation
As previously announced, CECO entered into a definitive agreement on April 22, 2013 to acquire Met-Pro Corporation (NYSE: MPR). Met-Pro is a leading global, niche-oriented provider of product recovery, pollution control, fluid handling and filtration solutions across multiple diversified end-markets. Pursuant to the terms of the definitive agreement, CECO will acquire all of the outstanding shares of Met-Pro common stock in a cash and stock transaction valued at a total of approximately $210 million. The acquisition is subject to approval by Met-Pro's shareholders, with a special meeting scheduled for August 26, 2013, approval by our stockholders of the issuance of our common stock to Met-Pro shareholders, with a special meeting scheduled for August 26, 2013, and other customary closing conditions. Assuming the approvals are obtained, CECO anticipates closing promptly after the meetings.
"I am very pleased with our favorable operating results for the first six months of 2013 as CECO continued to achieve significant improvements in all of our financial metrics, including margins, earnings and bookings," commented CECO's Chief Executive Officer, Jeff Lang. "The integration of both the Aarding and Adwest Technologies acquisitions is complete and we are excited about the future benefits these two businesses will add to the CECO family. With the pending closing of the acquisition of Met-Pro, we believe CECO today is better positioned than ever to provide our global customers with the premier products they require as well as generate increasing returns to all of our shareholders."
CECO will host a conference call on Thursday, August 08, 2013 at 8:30 a.m. EDT to review its financial results for the quarter. Conferencing details are as follows:
Dial in number: 866-318-8617
International dial in number: 617-399-5136
Participant passcode: 72974506
Replay: 888-286-8010
International: 617-801-6888
Passcode: 89180298
This call is being webcast by NASDAQ OMX and can be accessed at CECO's web site at www.cecoenviro.com.
The webcast is also being distributed through third party distribution channels, including the StreetEvents Network operated by Thomson Reuters (Markets) LLC and its affiliates.
ABOUT CECO ENVIRONMENTAL
CECO Environmental is a leading global provider of air pollution control and product recovery technology. Through its brands and subsidiaries – Aarding Thermal Acoustics/Flextor, Adwest Technologies, Busch International, CECO Filters, CECO Abatement Systems, Kirk & Blum, Effox, Fisher-Klosterman/Buell, CECO China, and A.V.C. Specialists – CECO provides a wide spectrum of air quality product technologies, services and engineered equipment technology i.e. cyclones, scrubbers, dampers, diverters, RTOs, component parts and monitoring and management services. Global industries served include refining, petrochemical, traditional power, natural gas power, aluminum, steel, automotive, chemical, and the largest industrial facilities. Global growth, operational excellence, recurring revenues, margin expansion, sector consolidation, safety leadership, and employee development are CECO's core competencies and long term objectives. CECO's revenues are approximately 70% engineered equipment technology and 30% after market recurring revenues.
For more information on CECO Environmental please visit the company's website at http://www.cecoenviro.com.
Contact:
Corporate Information
Jason DeZwirek, Chairman
Jeff Lang, Chief Executive Officer
1-800-333-5475
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CECO ENVIRONMENTAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
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Dollars in thousands, except per share data | ||||||||
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JUNE 30, |
DECEMBER 31, |
|||||||
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ASSETS |
||||||||
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Current assets: |
||||||||
|
Cash and cash equivalents |
$ |
5,066 |
$ |
22,994 |
||||
|
Accounts receivable, net |
28,283 |
29,499 |
||||||
|
Costs and estimated earnings in excess of billings on uncompleted contracts |
13,713 |
5,747 |
||||||
|
Inventories, net |
6,080 |
3,898 |
||||||
|
Prepaid expenses and other current assets |
6,682 |
2,183 |
||||||
|
Total current assets |
59,824 |
64,321 |
||||||
|
Property and equipment, net |
5,529 |
4,885 |
||||||
|
Goodwill |
27,578 |
19,548 |
||||||
|
Intangibles – finite life, net |
13,984 |
1,283 |
||||||
|
Intangibles – indefinite life |
6,348 |
3,526 |
||||||
|
Deferred charges and other assets |
4,297 |
541 |
||||||
|
$ |
117,560 |
$ |
94,104 |
|||||
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
|
Current liabilities: |
||||||||
|
Current portion of debt |
$ |
1,579 |
$ |
0 |
||||
|
Accounts payable and accrued expenses |
20,101 |
15,093 |
||||||
|
Billings in excess of costs and estimated earnings on uncompleted contracts |
12,114 |
11,368 |
||||||
|
Income taxes payable |
0 |
1,079 |
||||||
|
Total current liabilities |
33,797 |
27,540 |
||||||
|
Other liabilities |
6,471 |
4,442 |
||||||
|
Deferred income tax liability, net |
4,207 |
128 |
||||||
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Total liabilities |
44,472 |
32,110 |
||||||
|
Commitments and contingencies |
||||||||
|
Shareholders' equity: |
||||||||
|
Preferred stock, $.01 par value; 10,000 shares authorized, none issued |
— |
— |
||||||
|
Common stock, $0.01 par value; 100,000,000 shares authorized, 17,933,254 and 17,096,543 shares issued in 2013 and 2012, respectively |
179 |
171 |
||||||
|
Capital in excess of par value |
63,035 |
54,800 |
||||||
|
Accumulated earnings |
13,169 |
9,691 |
||||||
|
Accumulated other comprehensive loss |
(2,939) |
(2,312) |
||||||
|
73,444 |
62,350 |
|||||||
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Less treasury stock, at cost, 137,920 shares in 2013 and 2012 |
(356) |
(356) |
||||||
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Total shareholders' equity |
73,088 |
61,994 |
||||||
|
$ |
117,560 |
$ |
94,104 |
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CECO ENVIRONMENTAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
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Dollars in thousands, except per share data | |||||||
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THREE MONTHS ENDED |
SIX MONTHS ENDED | ||||||
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2013 |
2012 |
2013 |
2012 | ||||
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Net sales |
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