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CECO Environmental Corp. Reports Third Quarter 2019 Results

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DALLAS, Nov. 6, 2019 /PRNewswire/ -- CECO Environmental Corp. (NASDAQ:CECE), a leading global air quality and fluid handling company serving the energy and industrial markets, today reported its financial results for the third quarter of 2019.

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

Highlights of the Third Quarter 2019*

  • Bookings of $115.7 million, compared with $97.1 million, adjusted for divestitures
  • Record Backlog of $237.8 million, compared with $182.1 million as of December 31, 2018
  • Revenue of $85.3 million, compared with $88.3 million, and $86.7 million organic
  • Gross profit of $28.8 million (33.8% margin), compared with $28.7 million (32.5% margin)
  • Operating income of $4.1 million, compared with operating loss of $(10.4) million (included a $15.1 million non-cash impairment charge related to the sale of our Zhongli business)
  • Non-GAAP operating income of $7.0 million, compared with $6.5 million
  • Net income of $1.9 million, compared with net loss of $(12.9) million
  • Adjusted EBITDA of $8.4 million, compared with $8.3 million
  • Non-GAAP net income of $4.2 million, compared with $3.5 million
  • Net income per diluted share was $0.05, compared with net loss per diluted share of $(0.37)
  • Non-GAAP net income per diluted share of $0.12, compared with $0.10

 

* 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 with our team's execution during the quarter which generated triple digit bookings, strong profitability and a record backlog for the Company.  Our investments are continuing to pay off as we realized sequential quarterly growth in all our key financial metrics. Our strong third quarter bookings, led by our Energy Segment, and our record backlog are the best predictors of the future, signaling improving revenue going forward."  

Mr. Sadlowski added, "We are pleased with our progress and are determined to do even better.  We anticipate a continued positive trajectory towards our aggressive 2021 financial targets that we believe will produce significant upside for our shareholders."

THIRD QUARTER RESULTS

Revenue in the third quarter of 2019 was $85.3 million as compared to $88.3 million in the prior-year period. Excluding revenue of $1.6 million attributable to the divested business in 2018, organic revenues decreased 1.6%.

Operating income was $4.1 million for the third quarter of 2019, compared with an operating loss of $10.4 million in the prior-year period. The operating loss in 2018 included a $15.1 million non-cash impairment charge related to the sale of our Zhongli business. Non-GAAP operating income was $7.0 million for the third quarter of 2019 (8.2% margin), compared with $6.5 million in the prior-year period (7.4% margin).

Net income was $1.9 million for the third quarter of 2019, compared with net loss of $12.9 million in the prior-year period. Net income on a non-GAAP basis was $4.2 million for the third quarter of 2019, compared with $3.5 million in the prior-year period.

Net income per diluted share was $0.05 for the third quarter of 2019, compared with net loss per diluted share of $(0.37) in the prior-year period. Non-GAAP net income per diluted share was $0.12 for the third quarter of 2019, compared with $0.10 for the prior-year period.

Cash and cash equivalents were $29.0 million and bank debt was $69.4 million as of September 30, 2019, compared with $43.7 million and $76.1 million, respectively, as of December 31, 2018.

BACKLOG AND BOOKINGS

Total backlog at September 30, 2019 was $237.8 million as compared with $182.1 million on December 31, 2018 and $211.4 million on September 30, 2018. As of September 30, 2018, $7.4 million of backlog was attributable to the divested businesses. Adjusted for divestitures, backlog increased $33.8 million from third quarter 2018 to third quarter 2019, or 16.6%.

Bookings were $115.7 million for the third quarter of 2019, compared with $97.5 million in the prior-year period. Excluding bookings of $0.4 million attributable to the businesses divested in 2018, 2019 organic bookings increased $18.6 million, or 19.2%. Bookings were $316.0 million for the first nine months of 2019 compared with $292.9 million for the prior-year period. Excluding the impact of divestitures, bookings increased $29.5 million during the first nine months of 2019, or 10.3%.

YEAR-TO-DATE RESULTS 

Revenue in the first nine months of 2019 was $252.5 million, up 3.7% from $243.5 million in the prior-year period. Excluding revenue of $9.3 million attributable to the business divested in 2018, organic revenues increased 7.8%.

Operating income was $11.0 million for the first nine months of 2019 (4.4% margin), compared with $4.3 million in the prior-year period (1.8% margin).  Operating income on a non-GAAP basis was $18.6 million for the first nine months of 2019 (7.4% margin), compared with $15.7 million in the prior-year period (6.4% margin). 

Net income was $9.3 million for the first nine months of 2019, compared with net loss of $(8.1) million in the prior-year period.  Net income on a non-GAAP basis was $11.3 million for the first nine months of 2019, compared with $7.1 million in the prior-year period.  

Net income per diluted share was $0.26 for the first nine months of 2019, compared with net loss per diluted share of $0.23 in the prior-year period. Non-GAAP net income per diluted share was $0.32 for the first nine months of 2019, compared with $0.21 for the prior-year period. 

CONFERENCE CALL

A conference call is scheduled for today at 8:30 a.m. ET to discuss the third 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 10135305.

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)

SEPTEMBER 30, 2019



DECEMBER 31, 2018


ASSETS









Current assets:









Cash and cash equivalents


$

28,963



$

43,676


Restricted cash



1,276




762


Accounts receivable, net



58,091




53,225


Costs and estimated earnings in excess of billings on uncompleted contracts



34,409




29,694


Inventories, net



19,659




20,817


Prepaid expenses and other current assets



12,879




10,117


Prepaid income taxes



2,419

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