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CECO Environmental Corp. Reports Second Quarter and Six Months 2019 Results; Strong Bookings and Growing Backlog Support Second Half Ramp Up

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DALLAS, Aug. 6, 2019 /PRNewswire/ -- 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 and first six months of 2019.

CECO Environmental Corp. Logo (PRNewsfoto/CECO Environmental Corp.) (PRNewsfoto/CECO Environmental Corp.)

Highlights of the Second Quarter 2019*

  • Bookings of $103.0 million, compared with $99.1 million, adjusted for divestitures
  • Backlog of $208.8 million, compared with $182.1 million as of December 31, 2018
  • Revenue of $81.2 million, compared with $81.1 million
  • Revenue of $81.2 million, compared with organic revenue of $79.9 million
  • Gross profit of $26.8 million (33.0% margin), compared with $27.2 million (33.5% margin)
  • Operating income of $2.0 million, compared with $2.6 million
  • Non-GAAP operating income of $4.4 million, compared with $5.2 million
  • Net income was $5.5 million, compared with net loss of $(0.9) million
  • Non-GAAP net income of $3.0 million, compared with $1.8 million
  • Net income per diluted share was $0.15, compared with net loss per diluted share of $(0.03)
  • Non-GAAP net income per diluted share of $0.08, compared with $0.05
  • Adjusted EBITDA of $6.0 million, compared with $6.9 million

 

* 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, "CECO continues to execute well in the market as new orders once again exceeded $100 million driving backlog up to near record levels.  Unfortunately, several customer driven project delays dampened revenue in the quarter which led to second quarter profitability below expectations. Going forward, our strong backlog, solid margins, and a growing sales pipeline are expected to generate improved results in the second half of 2019."  

Mr. Sadlowski added, "We remain committed and on track to deliver our 2021 financial targets.  Our investments in sales and innovation have us well positioned to take advantage of the healthy demand across our growing end markets.  We are building a reputation as the go to resource in the expanding low carbon economy with solutions that deliver efficiency and sustainability for our customers."   

SECOND QUARTER RESULTS

Revenue in the second quarter of 2019 was $81.2 million, up $0.1 from $81.1 million in the prior-year period. Excluding revenue of $1.2 million attributable to the businesses divested in 2018, organic revenues increased 1.6%.

Operating income was $2.0 million for the second quarter of 2019, compared with $2.6 million in the prior-year period. Non-GAAP operating income was $4.4 million for the second quarter of 2019 (5.4% margin), compared with $5.2 million in the prior-year period (6.4% margin).

Net income was $5.5 million for the second quarter of 2019, compared with net loss of $0.9 million in the prior-year period. Net income on a non-GAAP basis was $3.0 million for the second quarter of 2019, compared with $1.8 million in the prior-year period.

Net income per diluted share was $0.15 for the second quarter of 2019, compared with net loss per diluted share of $0.03 in the prior-year period. Non-GAAP net income per diluted share was $0.08 for the second quarter of 2019, compared with $0.05 for the prior-year period.

Cash and cash equivalents were $28.8 million and bank debt was $77.0 million as of June 30, 2019, compared with $43.7 million and $76.1 million, respectively, as of December 31, 2018.

BACKLOG AND BOOKINGS

Total backlog at June 30, 2019 was $208.8 million as compared with $182.1 million on December 31, 2018 and $200.0 million on June 30, 2018. During the second quarter of 2019, the Company removed $6.7 million of orders that were previously disclosed as backlog in prior quarters, due to cancellations by customers. In the second quarter of 2018, $9.0 million of backlog was attributable to the divested businesses. Adjusted for divestitures, backlog increased $17.8 million from second quarter 2018 to second quarter 2019.

Bookings were $103.0 million for the second quarter of 2019, compared with $100.4 million in the prior-year period. Excluding bookings of $1.3 million attributable to the businesses divested in 2018, 2019 organic bookings increased $3.9 million, or 3.9%. Bookings were $200.3 million for the first six months of 2019 compared with $195.4 million for the prior-year period. Excluding the impact of divestitures, bookings increased $10.9 million during the first six months of 2019.

YEAR-TO-DATE RESULTS 

Revenue in the first six months of 2019 was $167.2 million, up 7.7% from $155.2 million in the prior-year period. Excluding revenue of $7.7 million attributable to the business divested in 2018, organic revenues increased 13.4%.

Operating income was $6.9 million for the first six months of 2019 (4.1% margin), compared with $14.7 million in the prior-year period (9.5% margin).  Operating income on a non-GAAP basis was $11.5 million for the first six months of 2019 (6.9% margin), compared with $9.2 million in the prior-year period (5.9% margin). 

Net income was $7.4 million for the first six months of 2019, compared with $4.9 million in the prior-year period.  Net income on a non-GAAP basis was $7.0 million for the first six months of 2019, compared with $3.5 million in the prior-year period.  

Net income per diluted share was $0.21 for the first six months of 2019, compared with $0.14 in the prior-year period. Non-GAAP net income per diluted share was $0.20 for the first six months of 2019, compared with $0.10 for the prior-year period. 

CONFERENCE CALL

A conference call is scheduled for today at 8:30 a.m. ET to discuss the second 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 toll free (877) 344-7529 within North America or Toll/International (412) 317-0088 and entering passcode 10132357.

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". For more information, please visit www.cecoenviro.com.

Contact:

Matthew Eckl, Chief Financial Officer
(888) 990-6670
investor.relations@onececo.com

 

CECO ENVIRONMENTAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS










 

(dollars in thousands, except per share data)


(unaudited)

JUNE 30, 2019



DECEMBER 31, 2018


ASSETS









Current assets:









Cash and cash equivalents


$

28,828



$

43,676


Restricted cash



1,127




762


Accounts receivable, net



60,037




53,225


Costs and estimated earnings in excess of billings on uncompleted contracts



32,205




29,694


Inventories, net



22,376




20,817


Prepaid expenses and other current assets



12,754




10,117


Prepaid income taxes



2,005




1,388


Assets held for sale


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