Ceco Environmental: Q3 results
CINCINNATI - Ceco Environmental Corp., a leading global environmental technology company focused on critical solutions in the product recovery, air pollution control, fluid handling and filtration industries, reported its financial results for the third quarter and nine months ended September 30, 2013. Results include the operations of Met- Pro Corporation ("Met-Pro") from the date of its acquisition on August 27, 2013.
Total revenue in the third quarter of 2013 was $49.8 million, up 50.4% from total revenue of $33.1 million in the prior-year's third quarter. Recent acquisitions contributed $16.8 million of revenue in the quarter, including Met-Pro, which contributed $7.3 million for the period from August 27 to September 30. The Company reported a net loss of $1.5 million, or $0.07 per diluted share, in the third quarter, compared with net income of $3.3 million, or $0.19 per diluted share, for the prior-year's third quarter.
Net loss was $1.5 million in 2013 as compared with net income of $3.3 million in 2012. Excluding acquisition and integration expenses, amortization and earn out expenses, inventory and plant, property and equipment valuation adjustments attributable to the Met-Pro acquisition and legal reserves, non-GAAP net income increased 48.5% to $4.9 million.
Net loss per diluted share was $0.07 in 2013 as compared with net income per diluted share of $0.19 in 2012; Non-GAAP net income per diluted share, adjusted as noted above, increased 26.3% to $0.24.
Bookings were $48.0 million in the third quarter of 2013, compared with $41.8 million in 2012, an increase of 14.8%.
YEAR TO DATE PERFORMANCE
Net income per diluted share was $0.20 compared with net income per diluted share of $0.47 in 2012, Non-GAAP net income per diluted share was $0.72 for the nine months of 2013.
Revenue was $128.6 million, up 27.7% from $100.7 million in 2012.
Operating income was $3.3 million compared with $12.3 million in 2012, Non-GAAP operating income was $16.4 million, up 31.2%.
Bookings were $132.4 million, up 16.8% from $113.4 million in 2012.
Backlog was $100.4 million, up 68.8% from $59.5 million as of December 31, 2012.
Revenue for the nine month period ended September 30, 2013 was $128.6 million, up 27.7%, or $27.9 million over the prior year period. Acquisitions contributed $30.4 million in revenue for the first nine months of 2013.
Net income for the first nine months of 2013 was $3.8 million as compared with $7.8 million for the first nine months of the prior year. Excluding acquisition and integration expenses, amortization and earn out expenses, inventory and plant, property and equipment valuation adjustments attributable to the Met-Pro acquisition and legal reserves, non-GAAP net income increased 70.0% to $13.6 million as compared with $8.0 million for the first nine months of 2012.
Net income per diluted share was $0.20 in 2013 as compared with $0.47 in 2012; Non-GAAP diluted net income per share increased 53.2% to $0.72.
BACKLOG AND BOOKINGS
Total backlog at September 30, 2013 was $100.4 million up from $77.9 million on June 30, 2013, and $67.6 million on September 30, 2012. Acquisitions contributed approximately $37.1 million to the backlog on a year-over-year basis.
Bookings in the third quarter of 2013 were $48.0 million, up from $41.8 million in the prior-year period. Bookings were $132.4 million for the nine months ended September 30, 2013, compared with $113.4 million in 2012.
MET-PRO ACQUISITION COMPLETED
On August 27, 2013, CECO closed on the previously announced acquisition of Met-Pro, a transaction which creates a clear global market leader in air pollution control, product recovery and fluid handling technology.
"The team is excited to have closed on the acquisition of Met-Pro and we are making excellent progress on the integration plan," said Jeff Lang, Chief Executive Officer of CECO. "Met-Pro not only expands our leverage to key segments such as the petrochemical, refinery and industrial manufacturing industries, it also provides us with access to new markets including the food processing, semiconductor, municipal and pharmaceutical sectors. We expect to realize at least $9 million in operating, manufacturing and SG&A cost reductions over the course of 2014, a portion which will be realized in the fourth quarter of this year. We are already ahead of plan in implementing the consolidation of two manufacturing facilities and integrating Met-Pro into CECO's streamlined organizational structure. We are also excited about the combined operational prospects for revenue growth from implementing our "OneCeco Sales Initiative", which is focused on increased customer penetration by leveraging our combined portfolio and comprehensive suite of air pollution control technologies. We are starting to see results from this initiative as we have already booked four significant "OneCeco" orders in the past month alone."
"Business quotation activity in the third quarter was steady. However, during the quarter, we experienced several project order delays due to general market slowness," said Jeff Lang, Chief Executive Officer of CECO. "Notwithstanding, we achieved several important milestones in the quarter including increased global bookings activity, building backlog to over $100 million, significant integration progress, non-GAAP EPS growth, and expanding our global growth platform. We remain focused on our business and executing on our operational excellence initiatives, which we expect to drive additional leverage in our business. While market conditions have been modest, we are starting to see some signs of near term improvement. We will continue to focus on our key initiatives, including capturing merger cost synergies, implementing the "OneCeco Sales Initiative", expanding our recurring revenue base, and increasing the combined company's presence in China."
Jeff Lang also commented, "As we move forward with the integration of Met-Pro, we will be simplifying and streamlining our business along three key strategic segments - Power Generation, Air Pollution Control, & Fluid Handling-Filtration. We will be reporting our operations along these lines in fiscal 2014 as we believe it better represents our combined business and operational strategy."
CECO is providing the non-GAAP historical financial measures in this release as the Company believes that these figures are helpful in allowing investors 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.
Jeff Lang, Chief Executive Officer, and Neal Murphy, Chief Financial Officer, will discuss the Company's Third Quarter and Nine Months 2013 results during a conference call scheduled for Thursday, November 7, 2013 at 8:30 a.m. EST (7:30 a.m. Central Time).
The North American toll-free number for the call is (855) 626-8629. International callers should dial (954) 320-7630. The conference code for the call is 92101004. A webcast of the live call can be either accessed at CECO's website at http://cecoenviro.com, or directly accessed at http://us.meeting-stream.com/cecoenvironmentalcorp_110713.
For those unable to listen to the live call, a taped replay will be available from 11:30 a.m. EST on November 7 until 11:59 p.m. EST on November 21. To access the replay, call (855) 859-2056 (North American callers) or (404) 537-3406 (international callers) and use conference code 92101004. You may also access the replay at our website at http://cecoenviro.com under Investor Information for at least 30 days following the call.
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 liquid 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.
Jeff Lang, Chief Executive Officer
Neal Murphy, Chief Financial Officer
The Blueshirt Group
Phone: (415) 489-2198
SOURCE: CecoEnvironmental Corp.