CINCINNATI, May 7, 2015 /PRNewswire/ --
- Revenue of $81.0 million for the
first quarter was up 41.6% from the same period last year; organic
revenue was up 8.6% on a constant currency basis compared to the
same period last year.
- Achieved record bookings in the first quarter of $93.9 million, including 9.3% year-over-year
organic growth; backlog grew 9.2% sequentially.
- Gross profit of $21.0 million
(25.9% gross margin) for the first quarter was up 6.6%, from
$19.7 million (34.5% gross margin) in
the prior-year period.
- Operating income of $3.0 million
(3.7% operating margin) for the first quarter was down 45.4%, from
$5.5 million (9.6% operating margin)
in the prior-year period. Non-GAAP operating income was
$7.5 million (9.3% non-GAAP operating
margin) for the first quarter, down 9.6% from $8.3 million (14.5% non-GAAP operating margin) in
the prior-year period.
- Adjusted EBITDA was $8.6 million
for the first quarter, down from $9.4
million in the prior-year period.
- Net income per diluted share of $0.01 for the first quarter, compared with net
income per diluted share of $0.12 in
the prior-year period. Non-GAAP net income per diluted share was
$0.21 for the first quarter of 2015,
compared with $0.19 for the
prior-year period.
CECO Environmental Corp. (NasdaqGM:CECE), a leading global
environmental, energy and fluid handling technology company, today
reported its financial results for the first quarter of 2015.
Revenue in the first quarter of 2015 was $81.0 million, up 41.6% from revenue of
$57.2 million in the prior-year's
first quarter. Recent acquisitions contributed $20.5 million of revenue in the first quarter.
Organic revenue increased 8.6% on a constant currency basis
compared to last year.
Net income was $0.2 million in the
first quarter of 2015 as compared to net income of $3.0 million in the first quarter of 2014.
Excluding acquisition and integration expenses, amortization and
earn-out expenses, inventory and plant, property and equipment
valuation adjustments attributable to recent acquisitions, and
foreign currency re-measurement, non-GAAP net income increased
14.0% to $5.7 million. Net
income per diluted share was $0.01 in
the first quarter of 2015 as compared with net income per diluted
share of $0.12 in the first quarter
of 2014. Non-GAAP net income per diluted share, adjusted as
noted above, was $0.21 per diluted
share in the first quarter 2015 share compared with $0.19 in the first quarter of 2014.
Cash and cash equivalents were $19.0
million and bank debt was $114.6
million as of March 31, 2015
compared to $19.4 million and
$114.2 million, respectively, as of
December 31, 2014.
BACKLOG AND BOOKINGS
Total backlog at
March 31, 2015 was $153.0 million as compared with $140.1 million on December
31, 2014, and $104.9 million
on March 31, 2014. Bookings were
$93.9 million in the first quarter of
2015, compared with $63.6 million in
the first quarter of 2014, an increase of 47.6%. Bookings increased
9.3% on an organic basis versus last year.
QUARTERLY DIVIDEND
On May 6, 2015, CECO's Board of Directors approved a
quarterly dividend of $0.066 per
share. The dividend will be paid on June 26,
2015 to all stockholders of record at the close of business
on June 12, 2015. CECO initiated a
Dividend Reinvestment Plan ("DRIP") in 2012 that provides for the
voluntary reinvestment of dividends by its stockholders.
OPERATIONAL SUMMARY
"I am proud of the team's focus
on our Sales Excellence and OneCECO initiatives, which helped drive
8.6% organic revenue growth and 9.3% organic bookings growth over
the first quarter of 2014," said Jeff
Lang, Chief Executive Officer of CECO. "We continue to place
an intense effort on these initiatives and I am proud of the
progress we are making. However, I am disappointed with our gross
margins in the quarter. We expected a lower gross margin due
primarily to an anticipated mix shift related to the previously
discussed large order in our Energy segment and the acquisitions
made in 2014. Notwithstanding, we did not expect lower
contributions from Emtrol and Effox related to the timing of some
lower margin backlog being processed. These factors
more than offset margin improvements made in the Fluid Handling
segment. We expect margins to improve throughout the year as
we process through our current backlog, which is at higher gross
and operating margins."
Jeff Lang also commented, "We are
also excited by the opportunity to bring PMFG's product portfolio
into the CECO family, which will be a key strategic addition to our
business. We believe the combination of the sales and cost
synergies are very compelling and will help to drive long-term
shareholder value."
Jeff Lang, Chief Executive
Officer, and Ed Prajzner, Chief
Financial Officer, will discuss the Company's first quarter results
during a conference call scheduled for Thursday, May 7, 2015 at 8:30 a.m. EDT (7:30 a.m.
Central Time).
CLICK HERE (or copy and paste this link:
https://viavid.webcasts.com/starthere.jsp?ei=1062481) to register
for, and listen to the live Earnings Call Webcast. The webcast of
the live call and a copy of the presentation to be used during the
call can also be accessed from the homepage of CECO's website at
http://www.cecoenviro.com.
You may also participate by calling the US/Canada Dial-In #
1-888-438-5524 (Toll-Free) or the International Dial-In #
1-719-457-1035 (Conference ID 1888082) at 8:20 AM ET.
A taped replay of the conference call will be
available from 11:30 AM ET on
the day of the call until Thursday, May 21,
2015 at 11:59 PM ET. To access
the taped replay, call the US/Canada Dial-In #
1-877-870-5176 or the International Dial-In # 1-858-384-5517 and
enter conference ID 1888082.
ABOUT CECO ENVIRONMENTAL
CECO Environmental is
a leading global environmental, energy and fluid handling
technology company. Through its well-known brands, CECO
provides a wide spectrum of products and services including dampers
& diverters, cyclonic technology, thermal oxidizers, filtration
systems, scrubbers, exhaust systems, fluid handling equipment and
plant engineered services and engineered design build fabrication.
These products play a vital role in helping companies achieve
exacting production standards, meeting increasing plant needs and
stringent emissions control regulations around the globe. CECO
believes that it globally serves the broadest range of markets and
industries including power, municipalities, chemical, industrial
manufacturing, refining, petrochemical, metals, minerals &
mining, hospitals and universities. CECO is focused on building
long-term shareholder value by bringing its unique technology,
portfolio and operational excellence to strategic key growth
markets around the world, while maintaining the highest standards
of employee development, project execution and safety leadership.
CECO is listed on NASDAQ under the ticker symbol "CECE" and is a
member company of the Russell 2000 Index. For more information on
CECO Environmental, please visit the company's website at
http://www.cecoenviro.com.
Contact:
Corporate Information
Jeff Lang, Chief Executive
Officer
Edward Prajzner,
Chief Financial Officer
1-800-333-5475
or
Investor Relations:
Shawn
Severson
The Blueshirt Group
Phone: (415) 489-2198
Email: Shawn@blueshirtgroup.com
CECO ENVIRONMENTAL
CORP. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
(dollars in
thousands, except per share data)
|
(unaudited)
MARCH 31,
2015
|
|
DECEMBER 31,
2014
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
18,990
|
|
$
19,362
|
Accounts receivable,
net
|
59,193
|
|
58,394
|
Costs and estimated
earnings in excess of billings on uncompleted contracts
|
31,985
|
|
24,371
|
Inventories,
net
|
23,818
|
|
23,416
|
Prepaid expenses and
other current assets
|
8,629
|
|
9,046
|
Prepaid income
taxes
|
4,373
|
|
4,190
|
Assets held for
sale
|
4,033
|
|
4,188
|
|
|
|
|
Total current
assets
|
151,021
|
|
142,967
|
Property, plant and
equipment, net
|
17,739
|
|
18,961
|
Goodwill
|
168,126
|
|
167,547
|
Intangible
assets-finite life, net
|
54,833
|
|
58,398
|
Intangible
assets-indefinite life
|
19,465
|
|
19,766
|
Deferred charges and
other assets
|
6,244
|
|
6,726
|
|
|
|
|
|
$
417,428
|
|
$
414,365
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current portion of
debt
|
$
11,463
|
|
$
8,887
|
Accounts payable and
accrued expenses
|
57,117
|
|
51,462
|
Billings in excess of
costs and estimated earnings on uncompleted contracts
|
15,029
|
|
14,597
|
Income taxes
payable
|
265
|
|
405
|
|
|
|
|
Total current
liabilities
|
83,874
|
|
75,351
|
Other
liabilities
|
26,997
|
|
27,884
|
Debt, less current
portion
|
101,442
|
|
103,541
|
Deferred income tax
liability, net
|
25,783
|
|
26,365
|
|
|
|
|
Total
liabilities
|
238,096
|
|
233,141
|
|
|
|
|
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, 26,411,511 and 26,404,869
shares issued in 2015 and 2014, respectively
|
264
|
|
264
|
Capital in excess of
par value
|
169,420
|
|
168,886
|
Accumulated
earnings
|
17,510
|
|
19,051
|
Accumulated other
comprehensive loss
|
(7,506 )
|
|
(6,621 )
|
|
|
|
|
|
179,688
|
|
181,580
|
Less treasury stock,
at cost, 137,920 shares in 2015 and 2014
|
(356 )
|
|
(356 )
|
|
|
|
|
Total shareholders'
equity
|
179,332
|
|
181,224
|
|
|
|
|
|
$
417,428
|
|
$
414,365
|
|
|
|
|
CECO ENVIRONMENTAL
CORP. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
|
|
|
THREE MONTHS
ENDED
MARCH 31,
|
|
(dollars in
thousands, except per share data)
|
2015
|
|
2014
|
|
Net sales
|
$
80,985
|
|
$
57,170
|
|
Cost of
sales
|
60,010
|
|
37,441
|
|
|
|
|
|
|
Gross
profit
|
20,975
|
|
19,729
|
|
Selling and
administrative expenses
|
13,661
|
|
11,679
|
|
Acquisition and
integration expenses
|
331
|
|
70
|
|
Amortization and
earn-out expenses
|
4,004
|
|
2,488
|
|
|
|
|
|
|
Income from
operations
|
2,979
|
|
5,492
|
|
Other expense,
net
|
(1,736 )
|
|
(106 )
|
|
Interest
expense
|
(960 )
|
|
(742 )
|
|
|
|
|
|
|
Income before income
taxes
|
283
|
|
4,644
|
|
Income tax
expense
|
85
|
|
1,623
|
|
|
|
|
|
|
Net income
|
$
198
|
|
$
3,021
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
Basic
|
$
0.01
|
|
$
0.12
|
|
|
|
|
|
|
Diluted
|
$
0.01
|
|
$
0.12
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
Basic
|
26,271,316
|
|
25,606,352
|
|
Diluted
|
26,660,595
|
|
26,115,512
|
|
CECO ENVIRONMENTAL
CORP. AND SUBSIDIARIES
RECONCILIATION OF
GAAP TO NON-GAAP MEASURES
|
|
|
Three Months Ended March
31,
|
|
(dollars in
millions)
|
2015
|
|
2014
|
|
Gross profit as
reported in accordance with GAAP
|
$
21.0
|
|
$
19.7
|
|
Gross profit margin
in accordance with GAAP
|
25.9%
|
|
34.5%
|
|
Plant, property and
equipment valuation adjustment
|
0.2
|
|
0.2
|
|
|
|
|
|
|
Non-GAAP gross
margin
|
$
21.2
|
|
$
19.9
|
|
Gross profit
margin
|
26.2%
|
|
34.8%
|
|
|
|
|
|
|
|
Three Months Ended March
31,
|
|
(dollars in
millions)
|
2015
|
|
2014
|
|
Operating income as
reported in accordance with GAAP
|
$
3.0
|
|
$
5.5
|
|
Operating margin in
accordance with GAAP
|
3.7%
|
|
9.6%
|
|
Plant, property and
equipment valuation adjustment
|
0.2
|
|
0.2
|
|
Acquisition and
integration expenses
|
0.3
|
|
0.1
|
|
Amortization and
earn-out expenses
|
4.0
|
|
2.5
|
|
|
|
|
|
|
Non-GAAP operating
income
|
$
7.5
|
|
$
8.3
|
|
Operating
margin
|
9.3%
|
|
14.5%
|
|
|
|
|
|
|
|
Three Months Ended March
31,
|
|
(dollars in
millions)
|
2015
|
|
2014
|
|
Net income as
reported in accordance with GAAP
|
$
0.2
|
|
$
3.0
|
|
Plant, property and
equipment valuation adjustment
|
0.2
|
|
0.2
|
|
Acquisition and
integration expenses
|
0.3
|
|
0.1
|
|
Amortization and
earn-out expenses
|
4.0
|
|
2.5
|
|
Foreign currency
remeasurement
|
2.7
|
|
-
|
|
Tax benefit of
expenses
|
(1.7 )
|
|
(0.8)
|
|
|
|
|
|
|
Non-GAAP net
income
|
$
5.7
|
|
$
5.0
|
|
Depreciation
|
0.7
|
|
0.8
|
|
Non-cash stock compensation
|
0.4
|
|
0.3
|
|
Other (income)/expense
|
(1.0 )
|
|
0.1
|
|
Interest expense
|
1.0
|
|
0.7
|
|
Income tax expense
|
1.8
|
|
2.5
|
|
|
|
|
|
|
Non-GAAP Adjusted
EBITDA
|
$
8.6
|
|
$
9.4
|
|
Earnings per
share:
|
|
|
|
|
Basic
|
$
0.01
|
|
$
0.12
|
|
|
|
|
|
|
Diluted
|
$
0.01
|
|
$
0.12
|
|
Non-GAAP net income
per share:
|
|
|
|
|
Basic
|
$
0.22
|
|
$
0.20
|
|
|
|
|
|
|
Diluted
|
$
0.21
|
|
$
0.19
|
|
NOTE REGARDING NON-GAAP FINANCIAL
MEASURES
CECO is providing the non-GAAP historical financial measures
presented above as the Company believes 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 the GAAP statement
of operations.
Non-GAAP gross margin, non-GAAP operating income, non-GAAP net
income, non-GAAP gross profit margin, non-GAAP operating margin,
non-GAAP earnings per basic and diluted share and non-GAAP adjusted
EBITDA, as we present them in the financial data included in this
press release, have been adjusted to exclude the effects of
expenses related to property, plant equipment valuation
adjustments, acquisition and integration expense activities
including retention, legal, accounting, banking, amortization and
contingent earnout expenses, foreign currency re-measurement, legal
reserves and the associated tax benefit of these charges.
Management believes that these items are not necessarily indicative
of the Company's ongoing operations and their exclusion provides
individuals with additional information to 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 gross margin, non-GAAP operating income, non-GAAP net
income, non-GAAP gross profit margin, non-GAAP operating margin,
non-GAAP earnings per basic and diluted shares and non-GAAP
Adjusted EBITDA 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.
In accordance with the requirements of Regulation G issued by
the Securities and Exchange Commission, non-GAAP gross margin,
non-GAAP operating income, non-GAAP net income, non-GAAP gross
profit margin, non-GAAP operating margin, non-GAAP earnings per
basic and diluted share and non-GAAP Adjusted EBITDA, stated in the
tables above present the most directly comparable GAAP financial
measure and reconcile to the most directly comparable GAAP
financial measures.
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 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. Words such as "estimate,"
"believe," "anticipate," "expect," "intend," "plan," "target,"
"project," "should," "may," "will" and similar expressions are
intended to identify forward-looking statements. Forward-looking
statements (including oral representations) 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. These risks and uncertainties include,
but are not limited to: our ability to successfully complete the
acquisition of PMFG; our ability to successfully integrate acquired
businesses and realize the synergies from acquisitions, including
PMFG, as well as a number of factors related to our business
including 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
contract revenue; fluctuations in operating results from period to
period due to seasonality of the business; the effect of growth on
CECO's infrastructure, resources, and existing sales; the ability
to expand operations in both new and existing markets; the
potential for contract delay or cancellation; changes in or
developments with respect to any litigation or investigation; the
potential for fluctuations in prices for manufactured components
and raw materials; the substantial amount of debt incurred in
connection with our recent acquisitions and our ability to repay or
refinance it or incur additional debt in the future; the impact of
federal, state or local government regulations; economic and
political conditions generally; and the effect of competition in
the product recovery, air pollution control and fluid handling and
filtration industries. These and other risks and uncertainties are
discussed in more detail in CECO's filings with the Securities and
Exchange Commission, including our reports on Form 10-K and Form
10-Q. 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. All forward-looking
statements attributable to CECO or persons acting on behalf of CECO
are expressly qualified in their entirety by the cautionary
statements and risk factors contained in this press release and
CECO's respective filings with the Securities and Exchange
Commission. Furthermore, forward-looking statements speak only as
of the date they are made. Except as required under the federal
securities laws or the rules and regulations of the Securities and
Exchange Commission, CECO undertakes no obligation to update or
review any forward-looking statements, whether as a result of new
information, future events or otherwise.
Important Information for Investors and
Stockholders
This communication does not constitute an offer to sell or the
solicitation of an offer to buy securities or a solicitation of any
vote or approval. This communication is not a substitute for
the prospectus/proxy statement that CECO and PMFG will file with
the SEC. Investors in CECO or PMFG are urged to read the
prospectus/proxy statement, which will contain important
information, including detailed risk factors, when it becomes
available. The prospectus/proxy statement and other documents that
will be filed by CECO and PMFG with the SEC will be available free
of charge at the SEC's website, www.sec.gov, or by directing a
request when such a filing is made to (1) CECO Environmental Corp.,
by mail at 4625 Red Bank Road Suite 200, Cincinnati, Ohio 45227, Attention: Investor
Relations, by telephone at 800-333-5475 or by going to CECO's
Investor page on its corporate website at www.cecoenviro.com; or
(2) PMFG, Inc. by mail at 14651 North Dallas Parkway Suite 500,
Dallas, Texas 75254,
Attention: Investor Relations, by telephone at 877-879-7634,
or by going to PMFG, Inc.'s Investors page on its corporate website
at www.pmfginc.com. A final prospectus/proxy statement will be
mailed to CECO's stockholders and shareholders of PMFG.
Proxy Solicitation
CECO and PMFG, and certain of their respective directors,
executive officers and other members of management and employees
may be deemed participants in the solicitation of proxies in
connection with the proposed transactions. Information about the
directors and executive officers of CECO is set forth in the proxy
statement for CECO's 2015 annual meeting of stockholders and CECO's
10-K for the year ended December 31,
2014. Information about the directors and executive officers
of PMFG is set forth in the proxy statement for PMFG's 2014 annual
meeting of shareholders and PMFG's Form 10-K for the year ended
June 28, 2014. Investors may obtain
additional information regarding the interests of such participants
in the proposed transactions by reading the prospectus/proxy
statement for such proposed transactions when it becomes available.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/ceco-environmental-corp-reports-first-quarter-2015-financial-results-300079344.html
SOURCE CECO Environmental Corp.