Ceco Environmental Corp. · NASDAQ:CECO
Ceco Environmental — Q1 2015 Earnings Presentation
24 slides from Ceco Environmental's earnings presentation, May 7, 2015
Slide 1: Q1 2015 Financial Results Conference Call
Exhibit 99.2 A global industrial technology company focused on environmental, energy, fluid handling industries Q1 2015 Financial Results Conference Call May 7, 2015
Slide 2: Safe Harbor Statement: Non-GAAP Financial Information
Safe Harbor Statement Non-GAAP Financial Information CECO is providing the non-GAAP historical financial measures in this presentation, 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
Slide 3: Safe Harbor Statement: Forward-looking Statements
Safe Harbor Statement Forward-looking Statements Any statements contained in this presentation 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
Slide 4: Safe Harbor Statement: Important Information for Investors and Stockholders
Safe Harbor Statement Important Information for Investors and Stockholders This communication does not constitute an offer to sell or the solicitation of an offer to buy securities or a solicitation of any vote or approval. This communication is not a substitute for the prospectus/proxy statement th
Slide 5: Jeff Lang
Jeff Lang President and Chief Executive Officer 5
Slide 6: 1Q15 Quarterly Financial Highlights
1Q15 Quarterly Financial Highlights • Revenue – Revenue of $81 million, up 41.6% year-over-year – Revenue on an organic basis is up 8.6% vs. 1Q14 using constant FX • Bookings / Backlog – 1Q15 bookings of $93.9 million up 48% year-over-year – Organic bookings up 9.3% in Q1, $69.5 million vs. $63.6 mi
Slide 7: 1Q15 Quarterly Financial Highlights
1Q15 Quarterly Financial Highlights • Non-GAAP Gross Margin – Gross margin of 26% compared to 35% in prior year, primarily attributable to: • Expected shift in mix and 2014 acquisitions which have reshaped our gross profit • The large strategic energy job • Underperformance of Emtrol and Effox in Q1
Slide 8: Business Conditions & Strategic Review
Business Conditions & Strategic Review • Overall end markets are unchanged; we are executing better on our Sales Excellence and initiatives. • Environmental segment continues to gain momentum • Energy segment – global natural gas power generation business is up. Solid fuel is picking up globally but
Slide 9: Announcement of Proposed Acquisition of PMFG, Inc. - Key Transaction Benefits & Strategic Rationale
Announcement of Proposed Acquisition of PMFG, Inc. - Key Transaction Benefits & Strategic Rationale 1. Strong strategic fit 2. Poised to achieve significant sales and cost synergies 3. Key step towards becoming market leader, including natural gas value chain 4. Provides access to attractive end mar
Slide 10: Illustrative 2014 Revenues & EBITDA Bridge
Illustrative 2014 Revenues & EBITDA Bridge ($ in millions) Standalone (1) Pro Forma (12/31/2014) (12/31/2014) Revenues $327.9 $158.1 $486.0 Gross Profit $98.4 $45.7 $144.1 Gross Margin (%) 30.0% 28.9% 29.6% SG&A $58.0 $51.5 $109.5 SG&A (%) 17.7% 32.6% 22.5% Adj. EBITDA (3) $47.1 ($2.1) $45.0 (3) (2)
Slide 11: Ed Prajzner
Ed Prajzner Chief Financial Officer 11
Slide 12: 1Q15 Quarterly Financial Highlights: Revenue
1Q15 Quarterly Financial Highlights ($ in millions) Revenue $81.0 $76.1 $68.7 $66.6 $63.3 $57.2 $49.8 $44.4 $34.4 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 • Record revenue of $81.0 million, up 42% y/y and 6% sequentially • 2014 acquisitions added approximately $20.5 y/y • On a constant currency
Slide 13: 1Q15 Quarterly Financial Highlights: Backlog and Bookings
1Q15 Quarterly Financial Highlights ($ in millions) Backlog Bookings $153.0 $93.9 $140.1 $104.9 $106.2 $66.8 $63.6 $69.9 $100.4 $63.7 $98.5 $96.0 $57.7 $75.8 $77.9 $46.5 $48.0 $37.6 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 • Solid 1Q15 backlog of $153
Slide 14: 1Q15 Financial Highlights: Margins
1Q15 Financial Highlights Non-GAAP Gross Margin Non-GAAP Operating Margin 34.8% 33.6% 14.5% 14.9% 32.6% 32.2% 32.3% 13.4% 13.9% 30.1% 32.4% 29.8% 13.6% 12.9% 26.2% 11.4% 10.9% 9.3% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 • Non-GAAP gross margin of 26
Slide 15: 1Q15 Quarterly Financial Highlights: Adjusted EBITDA and EPS
1Q15 Quarterly Financial Highlights ($ in millions) Adjusted EBITDA Non-GAAP EPS $0.30 $11.0 $0.25 $0.25 $0.24 $9.7 $9.4 $9.4 $0.23 $0.22 $0.21 $8.9 $8.6 $0.18 $0.19 $6.7 $6.4 $5.0 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 Note: See supplemental slide
Slide 16: Environmental Segment
Environmental Segment First Quarter Results ($ in millions) Revenue Bookings $41.7 $51.2 $40.3 $32.9 $26.7 $27.7 $33.3 $30.9 $26.4 $24.6 1Q14 2Q14 3Q14 4Q14 1Q15 1Q14 2Q14 3Q14 4Q14 1Q15 • Revenue of $41.7 million was up 56% y/y • Bookings of $51.2 million in 1Q15, up 66% y/y with >15% due to organi
Slide 17: Energy Segment
Energy Segment First Quarter Results ($ in millions) Revenue Bookings $28.4 $24.3 $26.5 $20.2 $18.0 $16.8 $17.8 $15.3 $14.8 $14.6 1Q14 2Q14 3Q14 4Q14 1Q15 1Q14 2Q14 3Q14 4Q14 1Q15 • Revenue of $24.3 million was up 59% y/y • Bookings of $26.5 million in 1Q15, up 81.5% sequentially • Aftermarket and r
Slide 18: Fluid Handling & Filtration Segment
Fluid Handling & Filtration Segment First Quarter Results ($ in millions) Revenue Bookings $17.6 $16.7 $16.6 $16.7 $15.9 $16.2 $15.5 $15.8 $15.2 $15.1 1Q14 2Q14 3Q14 4Q14 1Q15 1Q14 2Q14 3Q14 4Q14 1Q15 Revenue of $15.2 million, down 4.4% sequentially Bookings of $16.2 million, up 2.5% sequentially Ma
Slide 19: Balance Sheet
Balance Sheet ($ Millions) Selected Balance Sheet Information 12/31/2011 12/31/2012 12/31/2013 12/31/2014 3/31/2015 Cash & Equivalents $ 12.7 $ 23.0 $ 22.7 $ 19.4 $ 19.0 Total Assets $ 79.3 $ 94.1 $348.5 $414.4 $417.4 Total Bank Debt $ 0.0 $ 0.0 $ 89.1 $112.4 $112.9 Convertible Debt $ 9.6 $ 0.0 $ 0.
Slide 20: Supplemental
Supplemental 8 8 83}|—
Slide 21: Non-GAAP Gross Margin
Non-GAAP Gross Margin ($ in millions) Annual Q1 Q2 Q3 Q4 Annual Q1 2013 2014 2014 2014 2014 2014 2015 Gross profit as reported in accordance with GAAP $ 61.6$ 19.7 $ 21.4$ 21.1 $ 22.6$ 84.8$ 21.0 Gross profit margin in accordance with GAAP 31.2% 34.4% 32.1% 33.3% 29.7% 32.2% 25.9% Inventory valuatio
Slide 22: Non-GAAP Operating Margin
Non-GAAP Operating Margin ($ in millions) Annual Q1 Q2 Q3 Q4 Annual Q1 2013 2014 2014 2014 2014 2014 2015 Operating income as reported in accordance with$GAAP 7.0$ 5.5$ 7.2$ 5.2$ 3.8$ 21.7$ 3.0 Operating margin in accordance with GAAP 3.5% 9.6% 10.8% 8.2% 5.0% 8.2% 3.7% Inventory valuation adjustmen
Slide 23: Non-GAAP NI & EBITDA
Non-GAAP NI & EBITDA ($ in millions) Annual Annual Annual Annual Annual Q1 Q2 Q3 Q4 Annual Q1 2009 2010 2011 2012 2013 2014 2014 2014 2014 2014 2015 Net income as reported in accordance with GAAP $ (15.0) $ 2.1 $ 8.3 $ 10.9$ 6.6 $ 3.0 $ 4.5 $ 3.7 $ 1.9 $ 13.1 $ 0.2 Inventory valuation adjustment - -
Slide 24: GAAP to Non-GAAP Adjusted EBITDA Reconciliation
GAAP to Non-GAAP Adjusted EBITDA Reconciliation (Twelve Months ended 12/31/2014) ($ in Millions) CECO Pro-forma CECO PMFG Pro-forma Reported (Recent Standalone CECO Acquisitions) Combined GAAP Revenues $263.2 $64.7 $327.9 $158.1 $ 486.0 GAAP Gross profit $84.8 $13.6 $98.4 $45.7 $144.1 SG&A as report