Record Orders, Revenue, Backlog, Gross Profit
and Adjusted EBITDA
Company Raises Full Year 2023 Outlook
DALLAS, Aug. 8, 2023
/PRNewswire/ -- 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 second quarter of 2023.
Highlights for the Quarter(1)
- Orders of $162.9 million, up 44
percent; Record backlog of $391.0
million, up 35 percent
- Revenue of $129.2 million, up 23
percent; Net income of $3.7 million,
compared to $4.4 million; Non-GAAP
net income of $5.2 million, compared
to $6.4 million
- GAAP EPS (diluted) of $0.11,
compared to $0.13; Non-GAAP EPS
(diluted) of $0.15, compared to
$0.18
- Gross profit of $39.8 million, up
26 percent to 30.8 percent, up 70 bps
- Adjusted EBITDA of $13.7 million,
up 29 percent
- Book-to-bill ratio of 1.26
(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.
|
"Our second quarter results continue to demonstrate the
sustainable growth programs and market leadership positions we have
been steadily building over the past few years, and bolsters our
position as we enter the back half of the year. I am pleased
that we set new records across a broad set of core financial
metrics, which were driven by great execution from our entire team.
Although there is still work to be done, it is especially rewarding
to have generated record backlog on top of delivering the highest
quarterly revenue in company history while adding a book-to-bill
ratio of greater than 1.25 for the third consecutive quarter," said
CECO Chief Executive Officer, Todd
Gleason.
Second quarter operating income was $8.6
million, up $2.9 million when
compared to $5.7 million in the
second quarter of 2022. On an adjusted basis, non-GAAP operating
income was $11.4 million, up
$2.7 million when compared to
$8.7 million in the second quarter of
2022. Net income was $3.7 million in
the quarter, down $0.7 million
compared to $4.4 million in the
second quarter of 2022. Non-GAAP net income was $5.2 million, down $1.2
million compared to $6.4
million in the second quarter of 2022. Adjusted EBITDA of
$13.7 million was up $3.1 million compared to $10.6 million in the second quarter of 2022. Free
cash flow in the quarter was $10.0
million, down $9.1 million
compared to $19.1 million in the
second quarter of 2022.
"The 23 percent revenue growth in the quarter was comprised of
16 points of organic growth and seven points from acquisitions.
Additionally, we continue to steadily improve our gross profit
dollars and gross margins which are up 150 basis points in the
first half of 2023 when compared to the same period a year ago.
Over the past few years, we have been investing in strategic growth
programs and operational excellence resources to generate
sustainable and higher performing financial results. We are just
starting to see these strategic shifts positively impact our
financials as we believe we are in the early stages of creating
more sustained top-line and bottom-line growth and margin
expansion," added Gleason.
Company Raises Full Year 2023 Outlook
The Company increased its expected full year 2023 guidance to
reflect revenues forecasted to be between $500 and $525
million, up at least 21 percent, at the mid-point, year over
year. The Company also updated its expected full year 2023 adjusted
EBITDA forecasted to be between $50
and $55 million, up approximately 25
percent, at the mid-point, year over year. The updated expected
full year revenue and adjusted EBITDA guidance compares to the
previous outlook, provided in May, of revenues to exceed
$485 million and adjusted EBITDA to
exceed $50 million.
"We are pleased to increase our full year guidance, which
reflects continued confidence in the high performance and
advantageous diversity of the CECO portfolio. Our record backlog
and strong sales pipeline provide strong visibility in support of
sustainable future growth. Additionally, the acquisitions we
have completed over the past year and a half are all performing at
or above the high-growth financials associated with each
transaction," stated Gleason. "As I discussed last quarter and
reiterate today, we expect 2023 to be another building block in our
steady transformational journey to further advance our leadership
in our Industrial Air, Industrial Water and Energy Transition
markets which we expect to provide long-term value for our
shareholders."
EARNINGS CONFERENCE CALL
A conference call is scheduled for today at 8:30 a.m. ET to discuss the second quarter 2023
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
dialing 888-346-4547 (Toll-Free) within the U.S., or
+1-412-317-5251 (Toll-Required) outside the U.S.
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 dialing 877-344-7529 (Toll-Free) within the U.S., or
+1-412-317-0088 (Toll-Required) outside the U.S. and entering
access code 7832794.
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 by 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 Dallas, 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
Three Part Advisors, LLC
214-872-2710
investor.relations@onececo.com
CECO ENVIRONMENTAL CORP. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(in thousands, except per share
data)
|
|
(unaudited)
June 30, 2023
|
|
|
December 31, 2022
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
47,617
|
|
|
$
|
45,522
|
|
Restricted
cash
|
|
|
935
|
|
|
|
1,063
|
|
Accounts receivable,
net
|
|
|
126,663
|
|
|
|
83,086
|
|
Costs and estimated
earnings in excess of billings on uncompleted contracts
|
|
|
61,905
|
|
|
|
71,016
|
|
Inventories,
net
|
|
|
31,828
|
|
|
|
26,526
|
|
Prepaid expenses and
other current assets
|
|
|
15,634
|
|
|
|
12,174
|
|
Prepaid income
taxes
|
|
|
6,456
|
|
|
|
1,271
|
|
Total current
assets
|
|
|
291,038
|
|
|
|
240,658
|
|
Property, plant and
equipment, net
|
|
|
24,194
|
|
|
|
20,828
|
|
Right-of-use assets
from operating leases
|
|
|
11,530
|
|
|
|
11,373
|
|
Goodwill
|
|
|
199,736
|
|
|
|
183,197
|
|
Intangible assets –
finite life, net
|
|
|
42,899
|
|
|
|
35,251
|
|
Intangible assets –
indefinite life
|
|
|
9,559
|
|
|
|
9,508
|
|
Deferred income
taxes
|
|
|
816
|
|
|
|
829
|
|
Deferred charges and
other assets
|
|
|
2,846
|
|
|
|
3,077
|
|
Total
assets
|
|
$
|
582,618
|
|
|
$
|
504,721
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Current portion of
debt
|
|
$
|
4,313
|
|
|
$
|
3,579
|
|
Accounts payable and
accrued expenses
|
|
|
116,254
|
|
|
|
107,198
|
|
Billings in excess of
costs and estimated earnings on uncompleted contracts
|
|
|
61,365
|
|
|
|
32,716
|
|
Notes
payable
|
|
|
2,500
|
|
|
—
|
|
Income taxes
payable
|
|
|
3,788
|
|
|
|
3,207
|
|
Total current
liabilities
|
|
|
188,220
|
|
|
|
146,700
|
|
Other
liabilities
|
|
|
13,611
|
|
|
|
15,129
|
|
Debt, less current
portion
|
|
|
137,322
|
|
|
|
107,625
|
|
Deferred income tax
liability, net
|
|
|
7,991
|
|
|
|
8,666
|
|
Operating lease
liabilities
|
|
|
8,326
|
|
|
|
8,453
|
|
Total
liabilities
|
|
|
355,470
|
|
|
|
286,573
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
Preferred stock, $.01
par value; 10,000 shares authorized, none issued
|
|
|
—
|
|
|
—
|
|
Common stock, $.01 par
value; 100,000,000 shares authorized, 34,738,126 and
34,381,668 shares issued and outstanding at June 30, 2023 and
December 31, 2022, respectively
|
|
|
347
|
|
|
|
344
|
|
Capital in excess of
par value
|
|
|
252,406
|
|
|
|
250,174
|
|
Accumulated
loss
|
|
|
(13,596)
|
|
|
|
(19,298)
|
|
Accumulated other
comprehensive loss
|
|
|
(17,091)
|
|
|
|
(17,996)
|
|
Total CECO
shareholders' equity
|
|
|
222,066
|
|
|
|
213,224
|
|
Noncontrolling
interest
|
|
|
5,082
|
|
|
|
4,924
|
|
Total shareholders'
equity
|
|
|
227,148
|
|
|
|
218,148
|
|
Total liabilities and
shareholders' equity
|
|
$
|
582,618
|
|
|
$
|
504,721
|
|
CECO ENVIRONMENTAL CORP. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(unaudited)
|
|
|
|
Three months ended
June 30,
|
|
|
Six months ended June 30,
|
|
(in thousands, except per share
data)
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net sales
|
|
$
|
129,181
|
|
|
$
|
105,375
|
|
|
$
|
241,744
|
|
|
$
|
197,811
|
|
Cost of
sales
|
|
|
89,364
|
|
|
|
73,700
|
|
|
|
167,034
|
|
|
|
139,708
|
|
Gross
profit
|
|
|
39,817
|
|
|
|
31,675
|
|
|
|
74,710
|
|
|
|
58,103
|
|
Selling and
administrative expenses
|
|
|
28,451
|
|
|
|
22,988
|
|
|
|
55,644
|
|
|
|
41,640
|
|
Amortization and
earnout expenses
|
|
|
2,273
|
|
|
|
1,450
|
|
|
|
4,020
|
|
|
|
2,900
|
|
Acquisition and
integration expenses
|
|
|
332
|
|
|
|
1,491
|
|
|
|
824
|
|
|
|
2,540
|
|
Executive transition
expenses
|
|
|
158
|
|
|
|
—
|
|
|
|
158
|
|
|
|
—
|
|
Restructuring
expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
73
|
|
Income from
operations
|
|
|
8,603
|
|
|
|
5,746
|
|
|
|
14,064
|
|
|
|
10,950
|
|
Other income (expense),
net
|
|
|
121
|
|
|
|
1,936
|
|
|
|
(453)
|
|
|
|
1,478
|
|
Interest
expense
|
|
|
(3,750)
|
|
|
|
(1,098)
|
|
|
|
(6,158)
|
|
|
|
(1,920)
|
|
Income before income
taxes
|
|
|
4,974
|
|
|
|
6,584
|
|
|
|
7,453
|
|
|
|
10,508
|
|
Income tax
expense
|
|
|
984
|
|
|
|
1,860
|
|
|
|
993
|
|
|
|
2,972
|
|
Net income
|
|
|
3,990
|
|
|
|
4,724
|
|
|
|
6,460
|
|
|
|
7,536
|
|
Noncontrolling
interest
|
|
|
266
|
|
|
|
339
|
|
|
|
759
|
|
|
|
356
|
|
Net income
attributable to CECO Environmental Corp.
|
|
$
|
3,724
|
|
|
$
|
4,385
|
|
|
$
|
5,701
|
|
|
$
|
7,180
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.11
|
|
|
$
|
0.13
|
|
|
$
|
0.17
|
|
|
$
|
0.21
|
|
Diluted
|
|
$
|
0.11
|
|
|
$
|
0.13
|
|
|
$
|
0.16
|
|
|
$
|
0.20
|
|
Weighted average number
of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
34,619,216
|
|
|
|
34,873,238
|
|
|
|
34,531,050
|
|
|
|
34,961,645
|
|
Diluted
|
|
|
35,143,782
|
|
|
|
35,041,152
|
|
|
|
35,171,727
|
|
|
|
35,119,685
|
|
CECO ENVIRONMENTAL CORP. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(unaudited)
|
|
|
|
Six months ended June 30,
|
|
(in thousands)
|
|
2023
|
|
|
2022
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
6,460
|
|
|
$
|
7,536
|
|
Adjustments to
reconcile net income to net cash (used in) provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
5,650
|
|
|
|
4,668
|
|
Unrealized foreign
currency gain
|
|
|
(863)
|
|
|
|
(5)
|
|
Fair value adjustment
to earnout liabilities
|
|
|
296
|
|
|
|
—
|
|
Earnout
payments
|
|
|
—
|
|
|
|
(1,007)
|
|
Gain (loss) on sale of
property and equipment
|
|
|
78
|
|
|
|
(7)
|
|
Debt discount
amortization
|
|
|
182
|
|
|
|
187
|
|
Share-based
compensation expense
|
|
|
1,967
|
|
|
|
1,792
|
|
Bad debt (recoveries)
expense
|
|
|
(23)
|
|
|
|
441
|
|
Inventory reserve
expense
|
|
|
551
|
|
|
|
110
|
|
Changes in operating
assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(39,181)
|
|
|
|
(18,582)
|
|
Costs and estimated
earnings in excess of billings on uncompleted contracts
|
|
|
9,596
|
|
|
|
597
|
|
Inventories
|
|
|
(4,081)
|
|
|
|
(3,393)
|
|
Prepaid expense and
other current assets
|
|
|
(8,319)
|
|
|
|
637
|
|
Deferred charges and
other assets
|
|
|
(306)
|
|
|
|
2,472
|
|
Accounts payable and
accrued expenses
|
|
|
3,902
|
|
|
|
16,538
|
|
Billings in excess of
costs and estimated earnings on uncompleted contracts
|
|
|
26,005
|
|
|
|
7,846
|
|
Income taxes
payable
|
|
|
601
|
|
|
|
1,266
|
|
Other
liabilities
|
|
|
(3,126)
|
|
|
|
(2,405)
|
|
Net cash (used in)
provided by operating activities
|
|
|
(611)
|
|
|
|
18,691
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Acquisitions of
property and equipment
|
|
|
(3,919)
|
|
|
|
(1,432)
|
|
Net proceeds from sale
of assets
|
|
|
—
|
|
|
|
7
|
|
Net cash paid for
acquisitions
|
|
|
(24,142)
|
|
|
|
(37,372)
|
|
Net cash used in
investing activities
|
|
|
(28,061)
|
|
|
|
(38,797)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Borrowings on
revolving credit lines
|
|
|
65,300
|
|
|
|
47,600
|
|
Repayments on
revolving credit lines
|
|
|
(33,400)
|
|
|
|
(24,900)
|
|
Borrowing on long-term
debt
|
|
|
—
|
|
|
|
11,000
|
|
Repayments of
long-term debt
|
|
|
(1,652)
|
|
|
|
(1,469)
|
|
Deferred financing
fees paid
|
|
|
—
|
|
|
|
(130)
|
|
Deferred consideration
paid for acquisitions
|
|
|
(857)
|
|
|
|
—
|
|
Payments on finance
leases and financing liability
|
|
|
(450)
|
|
|
|
(293)
|
|
Proceeds from employee
stock purchase plan and exercise of stock options
|
|
|
1,156
|
|
|
|
71
|
|
Noncontrolling
interest distributions
|
|
|
(599)
|
|
|
|
(900)
|
|
Common stock
repurchase
|
|
|
—
|
|
|
|
(4,324)
|
|
Net cash provided by
financing activities
|
|
|
29,498
|
|
|
|
26,655
|
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
|
|
1,141
|
|
|
|
(3,091)
|
|
Net increase in cash,
cash equivalents and restricted cash
|
|
|
1,967
|
|
|
|
3,458
|
|
Cash, cash equivalents
and restricted cash at beginning of period
|
|
|
46,585
|
|
|
|
31,995
|
|
Cash, cash equivalents
and restricted cash at end of period
|
|
$
|
48,552
|
|
|
$
|
35,453
|
|
Cash paid during the
period for:
|
|
|
|
|
|
|
Interest
|
|
$
|
5,380
|
|
|
$
|
1,821
|
|
Income
taxes
|
|
$
|
7,605
|
|
|
$
|
970
|
|
CECO ENVIRONMENTAL CORP. AND
SUBSIDIARIES
|
RECONCILIATION OF
GAAP TO NON-GAAP MEASURES
|
|
|
|
Three months ended
June 30,
|
|
|
Six months ended June 30,
|
|
(in millions, except ratios)
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Operating income as
reported in accordance with GAAP
|
|
$
|
8.6
|
|
|
$
|
5.7
|
|
|
$
|
14.1
|
|
|
$
|
11.0
|
|
Operating margin in accordance with
GAAP
|
|
|
6.7
|
%
|
|
|
5.4
|
%
|
|
|
5.8
|
%
|
|
|
5.6
|
%
|
Amortization and
earnout expenses
|
|
|
2.3
|
|
|
|
1.5
|
|
|
|
4.0
|
|
|
|
2.9
|
|
Acquisition and
integration expenses
|
|
|
0.3
|
|
|
|
1.5
|
|
|
|
0.8
|
|
|
|
2.5
|
|
Executive transition
expenses
|
|
|
0.2
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
—
|
|
Restructuring
expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
Non-GAAP operating
income
|
|
$
|
11.4
|
|
|
$
|
8.7
|
|
|
$
|
19.1
|
|
|
$
|
16.5
|
|
Non-GAAP operating margin
|
|
|
8.8
|
%
|
|
|
8.3
|
%
|
|
|
7.9
|
%
|
|
|
8.3
|
%
|
|
|
Three months ended
June 30,
|
|
|
Six months ended June 30,
|
|
(in millions, except share
data)
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net income as reported
in accordance with GAAP
|
|
$
|
3.7
|
|
|
$
|
4.4
|
|
|
$
|
5.7
|
|
|
$
|
7.2
|
|
Amortization and
earnout expenses
|
|
|
2.3
|
|
|
|
1.5
|
|
|
|
4.0
|
|
|
|
2.9
|
|
Acquisition and
integration expenses
|
|
|
0.3
|
|
|
|
1.5
|
|
|
|
0.8
|
|
|
|
2.5
|
|
Executive transition
expenses
|
|
|
0.2
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
—
|
|
Restructuring
expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
Foreign currency
remeasurement
|
|
|
(0.8)
|
|
|
|
(0.3)
|
|
|
|
(0.9)
|
|
|
|
—
|
|
Tax benefit expense of
adjustments
|
|
|
(0.5)
|
|
|
|
(0.7)
|
|
|
|
(1.0)
|
|
|
|
(1.4)
|
|
Non-GAAP net
income
|
|
$
|
5.2
|
|
|
$
|
6.4
|
|
|
$
|
8.8
|
|
|
$
|
11.3
|
|
Depreciation
|
|
|
1.0
|
|
|
|
0.9
|
|
|
|
2.2
|
|
|
|
1.8
|
|
Non-cash stock
compensation
|
|
|
1.2
|
|
|
|
0.9
|
|
|
|
2.0
|
|
|
|
1.8
|
|
Other (income)
expense
|
|
|
0.7
|
|
|
|
(1.6)
|
|
|
|
1.4
|
|
|
|
(1.5)
|
|
Interest
expense
|
|
|
3.8
|
|
|
|
1.1
|
|
|
|
6.2
|
|
|
|
1.9
|
|
Income tax
expense
|
|
|
1.5
|
|
|
|
2.6
|
|
|
|
2.0
|
|
|
|
4.4
|
|
Noncontrolling
interest
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
0.8
|
|
|
|
0.4
|
|
Adjusted
EBITDA
|
|
$
|
13.7
|
|
|
$
|
10.6
|
|
|
$
|
23.4
|
|
|
$
|
20.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.11
|
|
|
$
|
0.13
|
|
|
$
|
0.17
|
|
|
$
|
0.21
|
|
Diluted
|
|
$
|
0.11
|
|
|
$
|
0.13
|
|
|
$
|
0.16
|
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.15
|
|
|
$
|
0.18
|
|
|
$
|
0.25
|
|
|
$
|
0.32
|
|
Diluted
|
|
$
|
0.15
|
|
|
$
|
0.18
|
|
|
$
|
0.25
|
|
|
$
|
0.32
|
|
|
Three months ended
June 30,
|
|
|
|
Six months ended June 30,
|
|
|
(in millions)
|
2023
|
|
|
2022
|
|
|
|
2023
|
|
|
2022
|
|
|
Net cash provided by
(used in) operating activities
|
$
|
11.4
|
|
|
$
|
18.9
|
|
|
|
$
|
(0.6)
|
|
|
$
|
18.7
|
|
|
Earnout payments
(within operating activities)
|
|
—
|
|
|
|
1.0
|
|
|
|
|
—
|
|
|
|
1.0
|
|
|
Acquisitions of
property and equipment
|
|
(1.4)
|
|
|
|
(0.8)
|
|
|
|
|
(3.9)
|
|
|
|
(1.4)
|
|
|
Free cash
flow
|
$
|
10.0
|
|
|
$
|
19.1
|
|
|
|
$
|
(4.5)
|
|
|
$
|
18.3
|
|
|
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, 2022
and may be included in subsequently filed Quarterly Reports on Form
10-Q, and include, but are not limited to: the sensitivity of our
business to economic and financial market conditions generally and
economic conditions in our 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;
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, if any; our ability to
successfully realize the expected benefits of our restructuring
program; our ability to successfully integrate acquired businesses
and realize the synergies from strategic transactions; 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; and our ability to
remediate our material weakness, or any other material weakness
that we may identify in the future that could result in material
misstatements in our financial statements. 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.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/ceco-environmental-reports-second-quarter-2023-results-301895350.html
SOURCE CECO Environmental Corp.