Ceco Environmental Corp. · NASDAQ:CECO
Ceco Environmental — Q1 2024 Earnings Presentation
21 slides from Ceco Environmental's earnings presentation, Apr 30, 2024
Slide 1: Q1 2024 Earnings Release
Q1 2024 Earnings Release April 30, 2024
Slide 2: Forward-looking statements and Non-GAAP information
Forward-looking statements and Non-GAAP information This presentation contains forward-looking statements with predictions, projections and other statements about future events. These statements are made on the basis of management’s views and assumptions regarding future events and business performa
Slide 3: Q1'24 Earnings: Key Take Aways
Q1’24 Earnings: Key Take Aways Financial Highlights Backlog: New Record Q1 ending Backlog after Book-to-Bill of ~ 1.2 Orders: Solid / balanced bookings even with “mega-jobs” pushed to Q2 / 2H Revenues: Record Q1 sales … On track for Full Year 2024 expectations Gross Margins: Record gross margins (!)
Slide 4: Q1'24 Financial Summary
Q1’24 Financial Summary Q1’24 YoY TTM YoY Orders $145M flat Q1 Book-to-bill ~1.2x Orders $582M 14% Sales $126M 12% Sales In Line with Expectations Sales $559M 26% Adj. $13.2M 36% Adj. $61.2 44% EBITDA 10.5% +187bps Great Margins To Start 2024 EBITDA 11.0% +136bps Adj. EPS EPS Growth Despite Higher T
Slide 5: Financial Performance
Financial Performance ENVIRONMENTAL
Slide 6: Q1'24 Financial Highlights
Q1’24 Financial Highlights ($MM) Backlog Gross Profit Adj. EBITDA $60 .0 50. 0% $20 .0 25. 0% Adj EPS Adj EPS $389.5 $18 .0 $0.10 $0.11 $55 .0 45. 0% $16 .0 20. 0% $50 .0 $45.1 $14 .0 $13.2 $45 .0 40. 0% $12 .0 15. 0% $40 .0 $9.7 10.5% $34.9 35.7% $10 .0 $356.1 $35 .0 35. 0% $8.0 10. 0% $30 .0 $6.0
Slide 7: Orders: Q1'24 Continues Track Record of Double-Digit TTM Growth
Orders: Q1’24 Continues Track Record of Double-Digit TTM Growth ($MM) TTM = Trailing 12 Month Quarterly Orders Summary $146 $145 $128 + 3rd best Q1 Order Intake in Company history + Order intake balanced across Air-Water-Energy YoY Flat ± Pipeline and Project Awards remain strong but taking Q1'23 Q4
Slide 8: Sales: In-line with FY Expectations, Continued Double-Digit TTM Growth
Sales: In-line with FY Expectations … Continued Double-Digit TTM Growth ($MM) TTM = Trailing 12 Month * Mid-point of Full Year 2024 Outlook Quarterly Sales Summary $154 $126 $113 Q1 Sales % FY estimate aligned with “%” of prior FY Sales 21% of 21% of FY’24* FY’23 Q1 Sales (–) impacted by reduced rev
Slide 9: Backlog: Q1'24 Remains at Near Record Levels
($MM) Backlog*: Q1’24 Remains at ~ Record Levels B2B = Book to Bill * Starting Backlog – Revenue + Net Orders +/- FX + Acquired Backlog = Ending Backlog $391 $394 $390 $371 $356 $312 $283 $289 $278 $214 $161 $163 $151 $146 $149 $154 $145 $114 $108 $146 $91 $129 $128 $126 $116 $113 $105 $102 $94 $92
Slide 10: Margins: Driven by Positive Mix, Project Execution & Sourcing, and M&A
Margins: Driven by Positive Mix, Project Execution & Sourcing, and M&A ($MM) TTM = Trailing 12 Month 30. 0 30. 0% 80. 0 Gross Profit 49. 0% Adj. EBITDA Gross Profit 70. 0 25. 0 25. 0% 60. 0 $53.2 44. 0% 20. 0 $19.4 YoY margins driven by mix, execution and flow through 50. 0 $45.1 20. 0% from improvi
Slide 11: Cash Position and Liquidity: Increased Capacity Supports Capital Deployment
Cash Position and Liquidity: Increased Capacity Supports Capital Deployment ($MM) Cash Position and Liquidity Leverage and Investment Capacity 5/ Cash 12.31.23 $55.4 Gross Debt 12.31.23 $133.2 Sources Borrowings Cash from Operations $1.2 On revolver $13.4 Net Borrowings $0.0 On term loan $0.0 Total
Slide 12: Prioritized Cash Deployment to Drive Growth and Create Shareholder Value
Prioritized Cash Deployment to Drive Growth and Create Shareholder Value Capital Allocation Strategy Investment Drivers Growth Programs / Investments • Sales Team, Engineers and Project Managers • Select Innovations Growth Capital Expenditures Stock • ERP Consolidation Buybacks Programs • Cybersecur
Slide 13: Final Wrap-up
Final Wrap-up CECO 7 ENVIRONMENTAL
Slide 14: Reaffirming Full Year 2024 Guidance
Reaffirming Full Year 2024 Guidance Initial FY’24 March 5th Call Current Outlook Key Outlook Drivers • Investments Maintain Growth Order Rate 1.05 – 1.1X 1.05 – 1.1X 1.05 – 1.1X • Market Drivers Remain Good: Reshoring, Book to Bill Infrastructure, Energy Transition, Policy $, Other… Raised Maintain
Slide 15: Q1'24 Earnings Summary
Q1’24 Earnings Summary • High-Quality Start to Year … With Opportunities for Full Year Upside • Financial Performance Met or Exceeded Expectations ‒ Orders, Sales and FCF all essentially In Line … ‒ Margins higher and Meets-or-Exceeds the trajectory we have set to reach mid-teen EBITDA margins • Sal
Slide 16: Appendix
Appendix Supplemental Materials and Non-GAAP Reconciliation Tables 16
Slide 17: CECO Margins Evolution by Quarter
CECO Margins Evolution by Quarter ($MM) Gross Profit – Historical Quarterly Results Adj. EBITDA – Historical Quarterly Results $19.4 $53.2 $45.1 $15.1 $16.0 $43.1 50% $13.6 $13.2 $14.0 $39.8 $13.0 $40 .0 $37.7 45% $12.0 $34.9 40% $10.5 $31.7 $32.4 $9.3 $9.5 $9.7 $35 .0 $9.2 $10.0 $30 .0 $25.3 $28.5
Slide 18: Revenue Excluding Acquisitions
Revenue Excluding Acquisitions NOTE: Amounts are computed independently each quarter. Accordingly, the sum of each quarter’s amounts may not equal the total amounts for the respective year. 18
Slide 19: Non-GAAP Operating Income and Margin
Non-GAAP Operating Income and Margin NOTE: Amounts are computed independently each quarter. Accordingly, the sum of each quarter’s amounts may not equal the total amounts for the respective year. 19
Slide 20: Non-GAAP Net Income, Adjusted EBITDA, and Margin
Non-GAAP Net Income, Adjusted EBITDA, and Margin NOTE: Amounts are computed independently each quarter. Accordingly, the sum of each quarter’s amounts may not equal the total amounts for the respective year. 20
Slide 21: Adjusted Free Cash Flow
Adjusted Free Cash Flow NOTE: Amounts are computed independently each quarter. Accordingly, the sum of each quarter’s amounts may not equal the total amounts for the respective year. 21