CECO Environmental: Q2 & Six Month Results
CECO Environmental Corp., a leading provider of industrial ventilation and pollution control systems, today announced second quarter results for the period ended June 30, 2009.
Financial highlights for the second quarter of 2009 compared to the second quarter of 2008 include:
Net sales decreased from $57.4 million to $33.5 million
Gross profit decreased from $10.5 million to $7.6 million
Gross margin increased to 22.7% from 18.3%
Net loss was $(0.6) million compared to net income of $1.0 million in 2008
Net loss per diluted share was $(0.04) compared to net income per diluted share of $0.07 in 2008
Backlog as of June 30, 2009 was $62.4 million compared to $63.2 million as of March 31, 2009
Total debt as of June 30, 2009 has been reduced by $12.9 million to $13.8 million from $26.7 million as of December 31, 2008
Financial highlights for the six months ended June 30, 2009 compared to six months ended June 30, 2008 include:
Net sales decreased from $104.3 million to $73.3 million
Gross profit decreased from $16.8 million to $16.3 million
Gross margin increased to 22.2% from 16.1%
Net loss was $(0.3) million compared to net income of $0.5 million in 2008
Net loss per diluted share was $(0.02) compared to net income per diluted share of $0.03
Backlog as of June 30, 2009 was $62.4 million compared to $68.0 million as of December 31, 2008
The decrease in revenues for the three months ended June 30, 2009 was due primarily to the challenging economic environment. The comparative six month decrease in net sales was also attributable to decreases in revenues although to a lesser degree because of an increase in equipment sales in the first quarter of 2009 as compared to the same quarter in 2008.
Although sales for the quarter and six month periods of 2009 were lower than the comparable 2008 periods, gross profit margins increased significantly due to a shift in product mix to higher margin products. Gross profit as a percentage of revenues for the three-month period ended June 30, 2009, increased by 4.4 percentage points to 22.7% compared with 18.3% for the comparable period in 2008 and gross profit as a percentage of revenues for the first six months of 2009 increased to 22.2% compared to 16.1% for the same period in 2008.
In response to the economic environment, the Company has dramatically reduced shop overhead as well as selling and administrative expenses through wage freezes, delayed hiring, reduced work weeks, staff reductions, selective furloughs, reduced manufacturing overhead, satellite plant closings, and reduced travel. On a comparative basis, excluding expenses from companies acquired in 2008 and a non-cash charge to increase the allowance for bad debts, selling and administrative expenses were reduced by $0.9 million or 11.1% for the three months ended June 30, 2009 and $1.6 million or 11.0% for the six month period ended June 30, 2009.
Net income for the quarter and six month periods was also affected by a non-recurring expense resulting from a state sales tax audit of a prior year. This amounted to an additional charge of $211,000, which was reflected in the financial statements as a charge to cost of goods sold of $118,000 and a charge to interest expense of $93,000.
Chairman and CEO, Phillip DeZwirek, stated, “We have positioned ourselves very well for the anticipated economic recovery. The investments made as well as the operational rationalization have allowed the company to be ideally prepared for the anticipated pent-up demand for our products and services that we believe will be realized with the economic recovery.”
President and Chief Operating Officer, Richard Blum, stated, “Despite the weakening of the economy and its effect on our revenues for the quarter and six months, we have achieved increased gross margins, an important financial benchmark and testament to our focus on cost reductions and operational efficiencies. In addition, we continue to build our international business that will provide increased revenues and anticipated better margins. Through the end of June, our foreign backlog makes up over 23% of our total backlog.”
CECO will host a conference call on Thursday, August 6, 2009 at 10:30 a.m. EDT to review its financial results for the quarter. Conferencing details are as follows:
Dial in number: 888866-713-8565
International dial in number: 617-597-5324
Participant pass code: 22169585
Pass code: 73943629
ABOUT CECO ENVIRONMENTAL
CECO Environmental Corp. is North America's largest independent air pollution control company. Through its subsidiaries -- Busch, CECOaire, CECO Filters, CECO Abatement Systems, kbd/Technic, Kirk & Blum, H. M. White, Inc., Effox, GMD, FKI, Flextor and AVC Specialists -- CECO provides a wide spectrum of air quality services and products including: industrial air filters, environmental maintenance, monitoring and management services, and air quality improvements systems. CECO is a full-service provider to the steel, military, aluminum, automotive, ethanol, aerospace, electric power, semiconductor, chemical, cement, metalworking, glass, foundry and virtually all industrial process industries.
For more information on CECO Environmental Corp., please visit the company's web site at www.cecoenviro.com.
Phillip DeZwirek, CECO Environmental Corp.