CINCINNATI, March 5, 2015 /PRNewswire/ --
- Revenue was $76.1 million for the
fourth quarter, up 10.7% from $68.7
million in the prior year period. Revenue was $263.2 million for the full year, up 33.4% from
$197.3 million in the prior
year.
- Operating income was $4.5 million
for the fourth quarter, up 21.6% from $3.7
million in the prior year period. Non-GAAP operating income
was $8.3 million for the fourth
quarter, down 11.7% from $9.4 million
in the prior year period. Operating income was $22.4 million for the full year, up 220.3% from
$7.0 million in the prior year.
Non-GAAP operating income was $34.7
million for the full year, up 34.5% from $25.8 million in the prior year.
- Adjusted EBITDA was $9.7 million
for the fourth quarter, down from $10.6
million in the prior year period. Adjusted EBITDA was
$39.5 million for the full year, up
38.6% from $28.5 million in the prior
year.
- Net income per diluted share was $0.07 in the fourth quarter, compared with net
income per diluted share of $0.11 in
the prior-year period. Non-GAAP net income per diluted share was
$0.22 for the fourth quarter of 2014,
versus $0.23 in the prior year
period. Net income per diluted share was $0.50 for the full year 2014, compared with net
income per diluted share of $0.32 in
the prior year period. Non-GAAP net income per diluted share was
$0.94 for the full year of 2014,
versus $0.95 in the prior year.
- Achieved record backlog of $140.1
million as of December 31,
2014.
CECO Environmental Corp. (NasdaqGM:CECE), a leading global
environmental technology company focused on critical solutions in
the air pollution control (APC), energy, and fluid handling and
filtration industries, today reported its financial results for the
fourth quarter and full year ended December
31,
2014.
Total revenue in the fourth quarter of 2014 was $76.1 million, up 10.7% from $68.7 million in the prior-year's fourth
quarter. Acquisitions contributed $13.3 million of revenue in the quarter.
Net income was $1.9 million in the
fourth quarter of 2014 as compared with net income of $2.8 million in the fourth quarter of 2013.
Excluding acquisition and integration expenses, amortization and
earn-out expenses, inventory and plant, property and equipment
valuation adjustments attributable to recent acquisitions, foreign
currency re-measurement and legal reserves, non-GAAP net income
decreased 3.3% to $5.9 million.
Net income per diluted share was $0.07 in the fourth quarter of 2014 as compared
with net income per diluted share of $0.11 in the fourth quarter of 2013.
Non-GAAP net income per diluted share, adjusted as noted above was
$0.22 per diluted share in the fourth
quarter 2014 share compared with $0.23 in the prior year.
Bookings were $63.7 million in the
fourth quarter of 2014, compared with $66.8
million in the fourth quarter of 2013 and $69.9 million in the third quarter of 2014.
Bookings were $254.9 million
for full year 2014 versus $198.9
million for full year 2013.
FINANCIAL HIGHLIGHTS FOR FULL YEAR 2014
Revenue in 2014 was $263.2
million, up 33.4% from $197.3
million in 2013. Acquisitions completed during 2014,
contributed $13.3 million in revenue
in 2014, all of which was in the fourth quarter of 2014.
Net income in 2014 was $13.1
million as compared with $6.6
million in 2013. Excluding acquisition and integration
expenses, amortization and earn-out expenses, inventory and plant,
property and equipment valuation adjustments attributable to recent
acquisitions, foreign currency re-measurement and legal reserves,
non-GAAP net income increased 24.9% to $24.6
million compared with $19.7
million in the prior year period.
Net income per diluted share was $0.50 in 2014 as compared with $0.32 in 2013; non-GAAP diluted net income per
diluted share was $0.94 in 2014
compared with $0.95 in 2013.
BACKLOG AND BOOKINGS
Total backlog at December 31, 2014
was $140.1 million, a new record, as
compared with $106.2 million on
September 30, 2014, and $98.5 million on December
31, 2013. Acquisitions contributed approximately
$49.9 million to the backlog on a
year-over-year basis.
Bookings in the fourth quarter of 2014 were $63.7 million, down from $66.8 million in the prior year period.
Bookings were $254.9 million in 2014,
compared with $198.9 million in
2013.
QUARTERLY DIVIDEND
On March 4, 2015, CECO's Board of
Directors approved a 10% increase in its quarterly dividend to
$0.066 per share from $0.06 per share. The increase is a result of the
Board's confidence in the Company's growth strategy and strong
balance sheet. The dividend will be paid on March 31, 2015 to all stockholders of record at
the close of business on March 19,
2015. CECO initiated a Dividend Reinvestment Plan ("DRIP")
in 2012 that provides for the voluntary reinvestment of dividends
by its stockholders.
BALANCE SHEET
Cash and cash equivalents were $19.4
million and bank debt was $112.4
million as of December 31,
2014 compared with $22.7
million in cash and cash equivalents and $89.1 million in bank debt as of December 31, 2013. The increase in bank debt was
attributable to acquisitions completed in 2014. Net debt-to-equity
ratio was 0.55X as of December 31,
2014 and net debt-to-adjusted EBITDA was 2.0X for the twelve
months ended December 31,
2014.
OPERATIONAL SUMMARY
"We were disappointed with revenue in the quarter as we realized
a slight decrease in organic revenue which led to
lower-than-expected operating income and earnings per share," said
Jeff Lang, Chief Executive Officer
of CECO. "We remain highly focused on driving organic growth and I
am encouraged by the solid increase in second half 2014 bookings
compared to the first half of the year. In particular, our APC
business showed a solid improvement in terms of revenue and
bookings. The negative mix shift in the quarter resulted from a few
large strategic projects booked during 2014 in our Energy segment.
These particular projects carried lower gross margins than our
corporate average, but were very important to us
strategically. Additionally, gross margins were impacted by
recently acquired businesses, which are currently running below the
corporate average gross margins. That being said, we have
consistently proven our ability to extract synergies from
acquisitions and expect similar success with Emtrol and Zhongli in
2015."
Jeff Lang also commented, "We are
building a world class company at CECO with the size and scale
necessary to be a global leader. Since 2010, we have grown
EBITDA at a compound annual growth rate of close to 60%, but our
work is not done as we continue to focus on driving organic growth,
improving margins and adding attractive bolt-on acquisitions. We
continue to invest heavily in our sales excellence initiatives,
training and expect better organic growth across all of our
business segments in 2015. 2015 Q1 YTD bookings are starting
off strong. We are focused on a number of key growth drivers
including leveraging our expanded footprint in China, capturing more natural gas power
generation business, market share gains through the Emtrol Buell
FKI merger (combination of Emtrol LLC acquisition with our Buell
FKI business), driving organic growth in APC with our OneCeco
initiative and capturing more reoccurring revenue from our
$3.5 billion installed base.
Jeff Lang, Chief Executive
Officer, and Ed Prajzner, Chief
Financial Officer, will discuss the Company's fourth quarter and
full year 2014 results during a conference call scheduled for
Thursday, March 5, 2015 at
8:30 a.m. ET (7:30 a.m. CT).
CLICK HERE (or copy and paste this link:
http://public.viavid.com/index.php?id=113285) 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 #
1-888-505-4375 (Toll-Free) or the International Dial-In #
1-719-457-2697 (Conference ID 9193826) at 8:20 AM ET.
A taped replay of the conference call will be
available from 11:30 a.m. ET on
the day of the call until Thursday, March
19, 2015 at 11:59 p.m. 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 9193826.
ABOUT CECO ENVIRONMENTAL
CECO Environmental is a leading global environmental technology
company focused on critical solutions in the product recovery, air
pollution control, fluid handling and filtration segments.
Through its well-known brands, CECO provides a wide spectrum of
products and services including dampers & diverters, cyclonic
technology, thermal oxidizers, filtration systems, scrubbers, 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 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
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
December 31,
|
($ in thousands,
except per share data)
|
2014
|
2013
|
|
|
ASSETS
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$ 19,362
|
$ 22,661
|
Accounts receivable,
net
|
58,394
|
44,364
|
Costs and estimated
earnings in excess of billings on uncompleted contracts
|
24,371
|
11,110
|
Inventories,
net
|
23,416
|
25,376
|
Prepaid expenses and
other current assets
|
9,046
|
6,651
|
Prepaid income
taxes
|
4,190
|
3,527
|
Assets held for
sale
|
4,188
|
11,083
|
|
|
|
Total current
assets
|
142,967
|
124,772
|
Property, plant and
equipment, net
|
18,961
|
21,665
|
Goodwill
|
166,874
|
132,220
|
Intangible
assets—finite life, net
|
58,398
|
46,813
|
Intangible
assets—indefinite life
|
19,766
|
18,419
|
Deferred income tax
asset, net
|
3,003
|
66
|
Deferred charges and
other assets
|
3,723
|
4,581
|
|
|
|
|
$ 413,692
|
$ 348,536
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
Current
liabilities:
|
|
|
Current portion of
debt
|
$ 8,887
|
$ 9,922
|
Accounts payable and
accrued expenses
|
50,712
|
34,356
|
Billings in excess of
costs and estimated earnings on uncompleted contracts
|
14,597
|
13,486
|
Income taxes
payable
|
1,805
|
1,569
|
|
|
|
Total current
liabilities
|
76,001
|
59,333
|
Other
liabilities
|
27,884
|
10,302
|
Debt, less current
portion
|
103,541
|
79,160
|
Deferred income tax
liability, net
|
26,365
|
29,335
|
|
|
|
Total
liabilities
|
233,791
|
178,130
|
|
|
|
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, 26,404,869 and 25,724,519
shares issued in 2014 and 2013, respectively
|
264
|
257
|
Capital in excess of
par value
|
167,963
|
159,566
|
Accumulated
earnings
|
19,051
|
11,911
|
Accumulated other
comprehensive loss
|
(7,021)
|
(972 )
|
|
|
|
|
180,257
|
170,762
|
Less treasury stock,
at cost, 137,920 shares in 2014 and 2013
|
(356 )
|
(356 )
|
|
|
|
Total shareholders'
equity
|
179,901
|
170,406
|
|
|
|
|
$ 413,692
|
$ 348,536
|
|
|
|
CECO ENVIRONMENTAL
CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
|
|
|
THREE MONTHS
ENDED
|
TWELVE MONTHS
ENDED
|
|
DECEMBER
31,
|
DECEMBER
31,
|
(dollars in
thousands, except per share data)
|
2014
|
2013
|
2014
|
2013
|
Net sales
|
$
76,106
|
$
68,727
|
$
263,217
|
$
197,317
|
Cost of
sales
|
53,519
|
47,207
|
178,394
|
135,762
|
Gross
profit
|
22,587
|
21,520
|
84,823
|
61,555
|
Selling and
administrative
|
14,288
|
13,060
|
50,690
|
37,098
|
Acquisition and
integration expenses
|
948
|
606
|
1,269
|
7,224
|
Amortization and earn
out expenses
|
2,863
|
3,171
|
10,151
|
6,761
|
Legal
reserves
|
-
|
1,000
|
300
|
3,500
|
Income from
operations
|
4,488
|
3,683
|
22,413
|
6,972
|
Other (expense)
income, net
|
(625)
|
818
|
(2,311)
|
982
|
Interest
expense
|
(883)
|
(792)
|
(3,138)
|
(1,499)
|
Income before income
taxes
|
2,980
|
3,709
|
16,964
|
6,455
|
Income tax expense
(benefit)
|
1,120
|
942
|
3,887
|
(102)
|
Net income
|
$
1,860
|
$
2,767
|
$
13,077
|
$
6,557
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
Basic
|
$
0.07
|
$
0.11
|
$
0.51
|
$
0.33
|
Diluted
|
$
0.07
|
$
0.11
|
$
0.50
|
$
0.32
|
|
|
|
|
|
Weighted average
number of common shares
outstanding:
|
|
|
|
|
Basic
|
26,057,831
|
25,582,686
|
25,750,972
|
20,116,991
|
Diluted
|
26,467,984
|
26,101,523
|
26,196,901
|
20,719,951
|
CECO ENVIRONMENTAL
CORP. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
|
|
|
Three Months Ended December
31,
|
Twelve Months Ended December
31,
|
(dollars in
millions)
|
2014
|
2013
|
2014
|
2013
|
Gross profit as
reported in accordance with GAAP
|
$
22.6
|
$
21.5
|
$
84.8
|
$
61.6
|
Gross profit margin
in accordance with GAAP
|
29.7%
|
31.3%
|
32.2%
|
31.2%
|
Inventory valuation
adjustment
|
-
|
0.7
|
-
|
1.1
|
Plant, property and
equipment valuation
adjustment
|
0.1
|
0.1
|
0.6
|
0.2
|
Non-GAAP gross
margin
|
$
22.7
|
$
22.3
|
$
85.4
|
$
62.9
|
Gross profit
margin
|
29.8%
|
32.4%
|
32.4%
|
31.9%
|
|
|
|
|
|
|
Three Months Ended December
31,
|
Twelve Months Ended December
31,
|
(dollars in
millions)
|
2014
|
2013
|
2014
|
2013
|
Operating income as
reported in accordance with
GAAP
|
$
4.5
|
$
3.7
|
$
22.4
|
$
7.0
|
Operating margin in
accordance with GAAP
|
5.9%
|
5.4%
|
8.5%
|
3.5%
|
Inventory valuation
adjustment
|
-
|
0.7
|
-
|
1.1
|
Plant, property and
equipment valuation
adjustment
|
0.1
|
0.1
|
0.6
|
0.2
|
Acquisition and
integration expenses
|
0.9
|
0.6
|
1.3
|
7.2
|
Amortization and
contingent acquisition
expenses
|
2.8
|
3.3
|
10.1
|
6.8
|
Legal
reserves
|
-
|
1.0
|
0.3
|
3.5
|
|
|
|
|
|
Non-GAAP operating
income
|
$
8.3
|
$
9.4
|
$
34.7
|
$
25.8
|
Operating
margin
|
10.9%
|
13.6%
|
13.2%
|
13.1%
|
|
|
|
|
|
|
Three Months Ended December
31,
|
Twelve Months Ended December
31,
|
(dollars in
millions)
|
2014
|
2013
|
2014
|
2013
|
Net income as
reported in accordance with GAAP
|
$
1.9
|
$
2.8
|
$
13.1
|
$
6.6
|
Inventory valuation
adjustment
|
-
|
0.7
|
-
|
1.1
|
Plant, property and
equipment valuation
adjustment
|
0.1
|
0.1
|
0.6
|
0.2
|
Acquisition and
integration expenses
|
0.9
|
0.6
|
1.3
|
7.2
|
Amortization and
contingent acquisition
expenses
|
2.8
|
3.3
|
10.1
|
6.8
|
Legal
reserves
|
-
|
1.0
|
0.3
|
3.5
|
Foreign currency
remeasurement
|
1.2
|
(1.1)
|
2.9
|
(1.1)
|
Tax benefit of
expenses
|
(1.0 )
|
(1.3)
|
(3.7 )
|
(4.6)
|
|
|
|
|
|
Non-GAAP net
income
|
$
5.9
|
$
6.1
|
$
24.6
|
$
19.7
|
Depreciation
|
0.8
|
0.6
|
3.1
|
1.6
|
Non-cash stock compensation
|
0.5
|
0.5
|
1.7
|
1.1
|
Other (income)/expense
|
(0.6)
|
0.3
|
(0.6)
|
0.1
|
Interest expense
|
0.9
|
0.8
|
3.1
|
1.5
|
Income tax expense
|
2.2
|
2.3
|
7.6
|
4.5
|
|
|
|
|
|
Non-GAAP adjusted
EBITDA
|
$
9.7
|
$
10.6
|
$
39.5
|
$
28.5
|
Earnings per
share:
|
|
|
|
|
Basic
|
$
0.07
|
$
0.11
|
$
0.51
|
$
0.33
|
|
|
|
|
|
Diluted
|
$
0.07
|
$
0.11
|
$
0.50
|
$
0.32
|
Non-GAAP earnings per
share:
|
|
|
|
|
Basic
|
$
0.22
|
$
0.24
|
$
0.95
|
$
0.98
|
|
|
|
|
|
Diluted
|
$
0.22
|
$
0.23
|
$
0.94
|
$
0.95
|
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 adjusted non-GAAP
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 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 adjusted
non-GAAP 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 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 integrate
acquired businesses and realize the synergies from acquisitions, 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 in connection with
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 air pollution
control and industrial ventilation industry. 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 information, 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-reports-fourth-quarter-and-full-year-2014-results-300045931.html
SOURCE CECO Environmental Corp.