CECO Environmental: Fourth Quarter and Full Year 2011 Financial Results
Cincinnati - CECO Environmental Corp., a leading global provider of air pollution control technology and systems, today announced fourth quarter and full year financial results for the period ended December 31, 2011.
Financial highlights for the fourth quarter of 2011 compared to the fourth quarter of 2010 include:
Net sales were $37.8 million compared to $36.9 million in the comparable quarter, an increase of 2%. The Company's strategy implemented in 2010 of intentionally pruning lower margin customer segments from its backlog affected year-over-year revenue growth;
Gross profit increased 33% to $11.3 million from $8.5 million;
Gross margin increased to 29.9% from 23.0%;
Selling & administrative expenses as a percent of sales was 19.6% compared to 18.2%;
Operating income increased 171% to $3.8 million from $1.4 million in 2010;
Operating margin increased to 10.1% from 3.9% in 2010;
Net income increased 286% to $2.7 million compared to net income of $0.7 million in 2010;
Net income per diluted share increased 240% to $0.17 compared to net income per diluted share of $0.05 in 2010;
Bookings were $37.4 million compared to $34.9 million in 2010, an increase of 7%;
Cash and cash equivalents increased to $12.7 million with no bank debt; and
Backlog as of December 31, 2011 was $54.9 million compared to $55.3 million as of September 30, 2011.
Financial highlights for the twelve months ended December 31, 2011 compared to twelve months ended December 31, 2010 include:
Net sales were $139.2 million compared to $140.6 million for the comparable period in 2010, a decrease of 1%. The decrease was primarily a result of the intentional pruning of lower margin customer segments noted above;
Gross profit increased 17% to $38.2 million from $32.7 million;Gross margin increased to 27.4% from 23.2%;
Selling & administrative expenses as a percent of sales decreased to 18.2% from 19.6%;
Operating income increased by 148% to $12.4 million from $5.0 million in 2010;
Operating margin increased to 8.9% from 3.6% in 2010;
Net income increased 295% to $8.3 million compared to net income of $2.1 million in 2010;
Net income per diluted share increased 240% to $0.51 compared to net income per diluted share of $0.15, in 2010;
Year-to-date bookings increased by 9% to $139.8 million compared to $128.5 million in 2010.
"I am very pleased with our results for the fourth quarter and full year 2011 as CECO continues to achieve substantial improvements in its financial and operating performance," commented CECO's Chief Executive Officer, Jeff Lang. "The Company continues to realize the significant benefits from its focus on global growth, operational streamlining and margin expansion that we began implementing in the first quarter of 2010. In addition, we saw continued improvement in our year-over-year bookings as well as improved gross margin backlog as our domestic and global sales initiatives take effect."
Mr. Lang continued, "CECO's focus on favorable product mix changes, better sales price management and global expansion coupled with our team's expertise in operational excellence should continue to generate positive returns for all shareholders in the quarters and years to come."
CECO will host a conference call on Thursday, March 8, 2012 at 8:30 a.m. EST to review its financial results for the quarter. Conferencing details are as follows:
International dial in number:
ABOUT CECO ENVIRONMENTAL
CECO Environmental is a leading global provider of air pollution control technology. Through its subsidiaries – Busch International, CECO Filters, CECO Abatement Systems, Kirk & Blum, Effox-Flextor, Fisher-Klosterman/Buell, CECO China and A.V.C. Specialists – CECO provides a wide spectrum of air quality products and services including engineered equipment, cyclones, scrubbers, dampers, diverters, RTO's, component parts and monitoring and management services. Industries served include refining, petro-chemical, power, aluminum, steel, automotive, chemical and large industrial processes. Revenue from engineered equipment technology is approximately 75% and 25% from parts, services and aftermarket. Global Growth, Operational Excellence, Margin Expansion, Safety, and Employee Development are CECO's core competencies and long term objectives.
For more information on CECO Environmental please visit the company's website at http://www.cecoenviro.com.
Jeff Lang, CECO Environmental Corp.
CECO ENVIRONMENTAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Dollars in thousands, except per share data
THREE MONTHS ENDED
TWELVE MONTHS ENDED
Cost of sales
Selling and administrative
Loss (gain) on sale of operating equipment
Income from operations
Other income, (expense) net
Interest expense (including related party interest of $60 and $57, and $237 and $228, respectively)
Income from continuing operations before income taxes
Income tax expense
Income from continuing operations
Income (loss) from discontinued operations, net of tax
Per share data:
Basic income from continuing operations
Basic income (loss) from discontinued operations
Basic net income
Diluted income from continuing operations
Diluted income (loss) from discontinued operations
Diluted net income
Weighted average number of common shares outstanding:
CECO ENVIRONMENTAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
Dollars in thousands, except per share data
Cash and cash equivalents
Accounts receivable, net
Costs and estimated earnings in excess of billings on uncompleted contracts
Prepaid expenses and other current assets
Assets held for sale
Current assets of discontinued operations
Total current assets
Property and equipment, net
Intangibles – finite life, net
Intangibles – indefinite life
Deferred income tax asset, net
Deferred charges and other assets
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses
Billings in excess of costs and estimated earnings on uncompleted contracts
Accrued income taxes
Total current liabilities
Convertible subordinated notes (including related parties notes of $3,950)
Preferred stock, $.01 par value; 10,000 shares authorized, none issued
Common stock, $0.01 par value; 100,000,000 shares authorized, 14,617,417 and 14,456,659 shares issued in 2011 and 2010, respectively
Capital in excess of par value
Accumulated earnings (deficit)
Accumulated other comprehensive loss
Less treasury stock, at cost, 146,820 and 137,920 shares in 2011 and 2010, respectively
Total shareholders' equity
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to certain risks, uncertainties and assumptions. These risks and uncertainties, which are more fully described in CECO's Annual and Quarterly Reports filed with the Securities and Exchange Commission, and include, but are not limited to: our dependence on fixed price contracts and the risks associated therewith, including actual costs exceeding our estimates and our method of accounting for contract revenue; our history of losses and possibility of further losses; fluctuations in operating results from period to period due to seasonality of our business; the effect of growth on our infrastructure, resources, and existing sales; our ability to expand our operations in both new and existing markets; the potential for contract delay or cancellation; the potential for fluctuations in prices for manufactured components and raw materials; 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. 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. We caution investors that other factors might, in the future, prove to be important in affecting our results of operations. New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Investors are further 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 by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise.