CINCINNATI, Nov. 5, 2015 /PRNewswire/ --
- Revenue of $98.2 million for the
third quarter of 2015 was up 55.2% from the prior-year period;
Organic revenue was up 4.5% on a constant currency basis from the
prior-year period
- Gross profit of $30.8 million, or
31.4% gross margin, for the third quarter of 2015 was up 46.2%,
from $21.1 million, or 33.3% gross
margin, in the prior-year period. Gross margin of 31.4% for the
third quarter was also up from the second quarter gross margin of
30.6%
- Operating loss of $2.2 million
for the third quarter of 2015, compared with operating income of
$5.2 million in the prior-year
period
- Non-GAAP operating income was $13.0
million, or 13.2% margin, for the third quarter, up 58.5%
from $8.2 million, or 12.9% margin,
in the prior-year period
- Non-GAAP adjusted EBITDA was $14.1
million for the third quarter, up from $9.5 million in the prior-year period and up from
$13.5 million in the second quarter
of 2015
- Net loss per diluted share was $0.17 for the third quarter, compared with net
income per diluted share of $0.14 in
the prior-year period. Non-GAAP net income per diluted share was
$0.27 for the third quarter of 2015,
compared with $0.28 for the
prior-year period
- Completed acquisition of PMFG, Inc.
CECO Environmental Corp. (Nasdaq: CECE), a leading global
environmental, energy and fluid handling technology company, today
reported its financial results for the third quarter of 2015.
Revenue in the third quarter of 2015 was $98.2 million, up 55.2% from $63.3 million in the prior-year period. Recent
acquisitions(1) contributed $33.8
million of incremental revenue in the third quarter of 2015.
Organic revenue was up 4.5% on a constant currency basis compared
with prior-year period.
Revenue in the first nine months of 2015 was $266.2 million, up 42.3% from $187.1 million in the prior-year period. Recent
acquisitions(1) contributed $75.5
million of incremental revenue in the first nine months of
2015. Organic revenue was up 4.5% for the first nine months of 2015
compared with the prior-year period on a constant currency basis
compared with the prior-year period.
Operating loss was $2.2 million
for the third quarter of 2015 compared with $5.2 million operating income in the prior-year
period, and $4.5 million for the
second quarter of 2015. Operating income on a non-GAAP basis
was $13.0 million for the third
quarter of 2015 compared with $8.2
million in the prior-year period.
Operating income in the first nine months of 2015 was
$5.3 million compared with
$17.9 million in the prior-year
period. Operating income on a non-GAAP basis in the first nine
months of 2015 was $32.8 million
compared with $26.3 million in the
prior-year period.
Net loss per diluted share was $0.17 for the third quarter of 2015, compared
with net income per diluted share of $0.14 in the prior-year period. Non-GAAP net
income per diluted share was $0.27
for the third quarter of 2015, compared with $0.28 for the prior-year period.
Cash and cash equivalents were $36.1
million and bank debt was $194.3
million as of September 30,
2015 compared with $19.4
million and $112.4 million,
respectively, as of December 31,
2014.
BACKLOG AND BOOKINGS
Total
backlog at September 30, 2015 was
$212.3 million as compared with
$140.1 million on December 31, 2014, and $140.6 million on June 30,
2015.
Bookings were $257.2 million in
the first nine months of 2015, compared with $191.2 million in the first nine months of 2014,
an increase of 34.5%. Bookings were $88.8 million in the third quarter of 2015,
compared with $69.9 million in the
prior-year period.
OPERATIONAL
SUMMARY
"We are pleased with our third quarter results as we
executed on our core objectives and achieved several milestones,
including record revenue, adjusted EBITDA, non-GAAP operating
income and backlog. Additionally, gross margins
improved, from the first half of 2015, due to project management
excellence, a better aftermarket mix and solid performance in each
of our three business segments," said Chief Executive Officer
Jeff Lang. "We continue to focus on
our Sales Excellence and OneCECO initiatives, which helped drive
quarterly and year-over-year organic revenue growth on a constant
currency basis."
Jeff Lang commented, "We
completed the PFMG acquisition in early September and I am pleased
with the integration and execution thus far, as well as the level
of talent among the PMFG employees. We have exceeded the committed
level of cost savings synergies achieved for 2015, and we are
on track to realize the overall committed synergies of $15 million within 18 months, six months ahead of
schedule, resulting in accretive contributions from PMFG by the end
of 2016. Overall, I am optimistic about our growth
opportunities for the remainder of 2015 and beyond, as we leverage
our strengthened global platform to drive shareholder value. The
direction and core of our business is fundamentally strong, and we
have the right team in place to drive growth in our solid end
markets."
CONFERENCE CALL
Jeff Lang, Chief Executive
Officer, Ed Prajzner, Chief
Financial Officer, and Tracy Krumme,
Vice President of Investor Relations will discuss the Company's
third quarter results during a conference call scheduled for
Thursday, November 5, 2015 at
9:30 a.m. ET.
The conference call may be accessed by dialing +1.855.327.6837
(Toll-Free) in the U.S. and Canada
or by dialing +1.631.891.4304 for international calls. A replay
will be available from 11:30a.m.
ET on the day of the call until November 19, 2015 at 11:59
p.m. ET. The replay may be accessed by dialing
+1.877.870.5176 (Toll-Free) in the U.S. and Canada or by dialing +1.858.384.5517 for
international calls and entering passcode 116901.
The live webcast and slides can also be accessed at
http://www.cecoenviro.com/investor-relations.
(1) Acquisitions completed within the past twelve months
ABOUT CECO ENVIRONMENTAL
CECO is a diversified global provider of leading engineered
technologies to the environmental, energy, and fluid handling and
filtration industrial segments, targeting specific niche-focused
end markets through an attractive asset-light business model,
strategically balanced across the world. CECO targets its over $5
billion+ of installed-base, specifically to expand and grow a
higher recurring revenue of aftermarket products and services.
CECO's well respected brands, technologies and solutions have been
evolving for well over 50 years to become leading-class
technologies in specific niche global end markets, including
natural gas turbine power, refinery & petrochemical engineered
cyclones and mid-stream energy pipeline gas transmission. CECO is
listed on NASDAQ under the ticker symbol "CECE". For more
information, please visit www.cecoenviro.com.
Contacts:
Ed Prajzner, Chief Financial
Officer
800.333.5475
eprajzer@cecoenviro.com
Tracy Krumme, Vice President of
Investor Relations
914.282.9051
tkrumme@cecoenviro.com
CECO ENVIRONMENTAL
CORP. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
(dollars in
thousands, except per share data)
|
(unaudited)
SEPTEMBER 30,
2015
|
DECEMBER 31,
2014
|
ASSETS
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$ 36,113
|
$
19,362
|
Accounts receivable,
net
|
100,758
|
58,394
|
Costs and estimated
earnings in excess of billings on uncompleted contracts
|
58,686
|
24,371
|
Inventories,
net
|
29,850
|
23,416
|
Prepaid expenses and
other current assets
|
11,812
|
9,046
|
Prepaid income
taxes
|
4,719
|
4,190
|
Assets held for
sale
|
2,500
|
4,188
|
|
|
|
Total current
assets
|
244,438
|
142,967
|
Property, plant and
equipment, net
|
47,489
|
18,961
|
Goodwill
|
226,365
|
167,547
|
Intangible
assets-finite life, net
|
83,975
|
58,398
|
Intangible
assets-indefinite life
|
30,249
|
19,766
|
Deferred charges and
other assets
|
8,158
|
6,726
|
|
|
|
|
$ 640,674
|
$
414,365
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
Current
liabilities:
|
|
|
Current portion of
debt
|
$ 19,699
|
$
8,887
|
Accounts payable and
accrued expenses
|
105,074
|
51,462
|
Billings in excess of
costs and estimated earnings on uncompleted contracts
|
23,341
|
14,597
|
Income taxes
payable
|
646
|
405
|
|
|
|
Total current
liabilities
|
148,760
|
75,351
|
Other
liabilities
|
29,416
|
27,884
|
Debt, less current
portion
|
174,584
|
103,541
|
Deferred income tax
liability, net
|
43,561
|
26,365
|
|
|
|
Total
liabilities
|
396,321
|
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, 34,048,024 and
26,404,869
shares issued in 2015 and 2014,
respectively
|
340
|
264
|
Capital in excess of
par value
|
242,571
|
168,886
|
Accumulated
earnings
|
10,523
|
19,051
|
Accumulated other
comprehensive loss
|
(8,725)
|
(6,621)
|
|
|
|
|
244,709
|
181,580
|
Less treasury stock,
at cost, 137,920 shares in 2015 and 2014
|
(356)
|
(356)
|
|
|
|
Total shareholders'
equity
|
244,353
|
181,224
|
|
|
|
|
$ 640,674
|
$
414,365
|
|
|
|
CECO ENVIRONMENTAL
CORP. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
|
(unaudited)
|
|
|
|
|
|
THREE MONTHS
ENDED
SEPTEMBER 30,
|
NINE MONTHS ENDED
SEPTEMBER 30,
|
(dollars in
thousands, except per share data)
|
2015
|
2014
|
2015
|
2014
|
Net sales
|
$
98,230
|
$
63,300
|
$
266,176
|
$
187,111
|
Cost of
sales
|
67,435
|
42,242
|
187,778
|
124,875
|
|
|
|
|
|
Gross
profit
|
30,795
|
21,058
|
78,398
|
62,236
|
Selling and
administrative expenses
|
18,054
|
13,038
|
46,158
|
36,402
|
Acquisition and
integration expenses
|
5,685
|
81
|
6,978
|
321
|
Amortization and
earn-out expenses
|
9,250
|
2,394
|
19,989
|
7,288
|
Legal
reserves
|
-
|
300
|
-
|
300
|
|
|
|
|
|
Income (loss) from
operations
|
(2,194)
|
5,245
|
5,273
|
17,925
|
Other income
(expense), net
|
(282)
|
(1,459)
|
(1,456)
|
(1,686)
|
Interest
expense
|
(1,711)
|
(767)
|
(3,845)
|
(2,255)
|
|
|
|
|
|
Income (loss) before
income taxes
|
(4,187)
|
3,019
|
(28 )
|
13,984
|
Income tax expense
(benefit)
|
638
|
(684)
|
2,495
|
2,767
|
|
|
|
|
|
Net income
(loss)
|
$
(4,825)
|
$
3,703
|
$
(2,523)
|
$
11,217
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share:
|
|
|
|
|
Basic
|
$
(0.17)
|
$
0.14
|
$
(0.09)
|
$
0.44
|
|
|
|
|
|
Diluted
|
$
(0.17)
|
$
0.14
|
$
(0.09)
|
$
0.43
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
Basic
|
28,617,589
|
25,691,884
|
27,066,072
|
25,647,561
|
Diluted
|
28,909,934
|
26,129,427
|
27,407,788
|
26,105,415
|
CECO ENVIRONMENTAL
CORP. AND SUBSIDIARIES
|
RECONCILIATION OF
GAAP TO NON-GAAP MEASURES
|
|
|
Three Months Ended September
30,
|
Nine Months Ended September
30,
|
(dollars in
millions)
|
2015
|
2014
|
2015
|
2014
|
Gross profit as
reported in accordance with GAAP
|
$
30.8
|
$
21.1
|
$
78.4
|
$
62.2
|
Gross profit margin
in accordance with GAAP
|
31.4%
|
33.3%
|
29.5%
|
33.3%
|
Plant, property and
equipment valuation adjustment
|
0.2
|
0.2
|
0.5
|
0.5
|
|
|
|
|
|
Non-GAAP gross
margin
|
$
31.0
|
$
21.3
|
$
78.9
|
$
62.7
|
Gross profit
margin
|
31.6%
|
33.6%
|
29.7%
|
33.6%
|
|
|
|
|
|
|
Three Months Ended September
30,
|
Nine Months Ended September
30,
|
(dollars in
millions)
|
2015
|
2014
|
2015
|
2014
|
Operating (loss)
income as reported in accordance with GAAP
|
$
(2.2)
|
$
5.2
|
$
5.3
|
$
17.9
|
Operating margin in
accordance with GAAP
|
(2.2)%
|
8.3%
|
2.0%
|
9.6%
|
Plant, property and
equipment valuation adjustment
|
0.2
|
0.2
|
0.5
|
0.5
|
Acquisition and
integration expenses
|
5.7
|
0.1
|
7.0
|
0.3
|
Amortization and
earn-out expenses
|
9.3
|
2.4
|
20.0
|
7.3
|
Legal
reserves
|
--
|
0.3
|
--
|
0.3
|
|
|
|
|
|
Non-GAAP operating
income
|
$
13.0
|
$
8.2
|
$
32.8
|
$
26.3
|
Operating
margin
|
13.2%
|
12.9%
|
12.3%
|
14.1%
|
|
|
|
|
|
|
Three Months Ended September
30,
|
Nine Months Ended September
30,
|
(dollars in
millions)
|
2015
|
2014
|
2015
|
2014
|
Net (loss) income as
reported in accordance with GAAP
|
$
(4.8)
|
$
3.7
|
$
(2.5)
|
$
11.2
|
Plant, property and
equipment valuation adjustment
|
0.2
|
0.2
|
0.5
|
0.5
|
Acquisition and
integration expenses
|
5.7
|
0.1
|
7.0
|
0.3
|
Amortization and
earn-out expenses
|
9.3
|
2.4
|
20.0
|
7.3
|
Legal
reserves
|
--
|
0.3
|
--
|
0.3
|
Deferred financing fee
adjustment
|
0.3
|
--
|
0.3
|
--
|
Foreign currency
remeasurement
|
(0.3)
|
1.7
|
1.8
|
1.9
|
Tax benefit of
expenses
|
(2.6)
|
(1.2)
|
(5.1)
|
(2.7)
|
|
|
|
|
|
Non-GAAP net
income
|
$
7.8
|
$
7.2
|
$
22.0
|
$
18.8
|
Depreciation
|
0.7
|
0.8
|
2.0
|
2.3
|
Non-cash stock compensation
|
0.4
|
0.5
|
1.3
|
1.2
|
Other (income)/expense
|
0.6
|
(0.2)
|
(0.3)
|
(0.2)
|
Interest expense
|
1.4
|
0.8
|
3.6
|
2.3
|
Income tax expense
|
3.2
|
0.4
|
7.6
|
5.4
|
|
|
|
|
|
Non-GAAP Adjusted
EBITDA
|
$
14.1
|
$
9.5
|
$
36.2
|
$
29.8
|
Earnings (loss) per
share:
|
|
|
|
|
Basic
|
$
(0.17)
|
$
0.14
|
$ (0.09)
|
$
0.44
|
|
|
|
|
|
Diluted
|
$
(0.17)
|
$
0.14
|
$ (0.09)
|
$
0.43
|
Non-GAAP net income
per share:
|
|
|
|
|
Basic.
|
$
0.27
|
$
0.28
|
$
0.81
|
$
0.72
|
|
|
|
|
|
Diluted.
|
$
0.27
|
$
0.28
|
$
0.80
|
$
0.72
|
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.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/ceco-environmental-corp-reports-third-quarter-2015-results-300173126.html
SOURCE CECO Environmental Corp.