Ceco Environmental Corp. · NASDAQ:CECO
Ceco Environmental — Q2 2024 Earnings Presentation
21 slides from Ceco Environmental's earnings presentation, Jul 30, 2024
Slide 1: Q2 2024 Earnings Report
Q2 2024 Earnings Report July 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: Executive Summary: Q2'24 Highlights
Executive Summary: Q2’24 Highlights Sales Gross Profit Adjusted EBITDA Adjusted EPS $138M +6% YoY $0.20 $129M $49.0M $16.1M +33% YoY $39.8M +23% YoY +18% YoY $0.15 $13.6M 30.8% 35.6% Margins 10.5% 11.7% Q2’23 Q2’24 Q2’23 Q2’24 Q2’23 Q2’24 Q2’23 Q2’24 • Records: Record Q2 Sales, Gross Profit $’s and
Slide 4: First Half 2024 Highlights
First Half 2024 Highlights 1H’24 YoY 1H Financial Highlights Orders $286M (7%) • Slower-than-expected 1H orders as larger project bookings delayed • Expecting 2H order levels will increase sequentially Book to Bill 1.08x • Sales also impacted by customer-driven delays in 1H Revenue $264M +9% • Expec
Slide 5: Raising Full Year Topline and Bottomline Guidance
Raising Full Year Topline and Bottomline Guidance Raised on Raised on Initial FY’24 Balancing Opportunities (+) / Challenges (–) April 30th July 30th Order Rate 1.05 – 1.1X 1.05 – 1.1X 1.05 – 1.1X + Near Record Backlog and Increasing Short Cycle Book to Bill + M&A Pipeline = Active & Attractive 2H’2
Slide 6: M&A Update: Transaction Closed in Late July 2024
M&A Update: Transaction Closed in Late July 2024 Business Overview Financial Profile / Transaction Metrics • 2024 FY Sales Est: ~ $13M with 30% aftermarket & short cycle with attractive growth profile • Current Sales Footprint: Mostly N. America • Leading Engineered Solutions Provider: Industrial Ai
Slide 7: Financial Performance
Financial Performance ENVIRONMENTAL
Slide 8: Orders & Backlog: Q2'24 Bookings & Backlog Remain Steady
($MM) Orders & Backlog: Q2’24 Bookings & Backlog Remain Steady TTM = Trailing 12 Month TTM Order Summary Quarterly Backlog Position $561 $582 $560 $391 $390 $391 Flat FY’23 YTD’24 B2B ~ 1.1x YoY ~1.1x Q2'23 Q1'24 Q2'24 Q2'23 Q1'24 Q2'24 • Despite “tough comp” with 1H’23, TTM Orders ~ flat • On track
Slide 9: Sales: 1H In-line with Guidance and Double-Digit TTM Growth
($MM) Sales: 1H In-line with Guidance and Double-Digit TTM Growth TTM = Trailing 12 Month Quarterly Sales Summary $138 $129 $126 1H’24 Q2 +9% Sequentially and +6% YoY … Another Record Quarter! 1H’23 ~ 43% FY 44% FY Guidance Q2 sales growth was tempered by order booking delays and Actuals handful of
Slide 10: Delivering On Our Focus To Increase Margins
Delivering On Our Focus To Increase Margins ($MM) TTM = Trailing 12 Month Q2'23 Gross Profit Q1'24 Q2'24 19. 0 Adj. EBITDA 30. 0% ↑ Gross Profit 60. 0 49. 0% 55. 0 17. 0 $16.1 25. 0% YoY margins + 490 bps driven by backlog mix, execution $49.0 and productivity $13.6 50. 0 $45.1 15. 0 $13.2 44. 0% 20
Slide 11: Cash Position and Liquidity: Capacity Supports Capital Deployment
Cash Position and Liquidity: Capacity Supports Capital Deployment ($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 $7.9 On revolver $21.7 Net Borrowings $0.0 On term loan $0.0 Total $7.9 Other
Slide 12: Final Remarks
Final Remarks CECO » ENVIRONMENTAL
Slide 13: Q2'24 Earnings Summary
Q2’24 Earnings Summary • Record Results and Tremendous Margin Expansion Major Q2 and 1H Highlights o Margin Expansion: OpEx programs, volume conversion and executing on acquired companies o On Track for 2025 – 2026 EBITDA Margin Targets of Mid-Teen % • Certain Large Order Booking Delays + Customer-d
Slide 14: Appendix
Appendix Supplemental Materials and Non-GAAP Reconciliation Tables 14
Slide 15: Q2'24 Financial Summary
Q2’24 Financial Summary ($MM) except Adj. EPS Q2’24 YoY TTM YoY Quarter Book to Bill ~1.01x Orders $141 (14%) Prior year had 2x sizeable orders that don’t $560 Flat repeat in Energy and Air Continued topline growth Sales $138 6% 1H Sales growth right in line with $567 22% expectations Adj EBITDA $16
Slide 16: Backlog: Q2'24 Remains at Record Levels
($MM) Backlog*: Q2’24 Remains at Record Levels B2B = Book to Bill * Starting Backlog – Revenue + Net Orders +/- FX + Acquired Backlog = Ending Backlog $391 $394 $390 $391 $371 $356 $312 $283 $289 $278 $214 $161 $163 $151 $146 $149 $154 $145 $141 $114 $108 $146 $138 $91 $129 $128 $126 $116 $113 $105
Slide 17: CECO Margins Evolution by Quarter
CECO Margins Evolution by Quarter ($MM) Gross Profit Adj. EBITDA $19.3 $20 .0 $53.2 50% $49.0 $18 .0 $50 .0 $45.1 45% $16.1 $43.1 $15.1 $16 .0 $39.8 40% $13.6 $13.2 $40 .0 $37.7 $13.0 $14 .0 $34.9 $25.3 $31.7 $32.4 35% $10.5 $12 .0 $30 .0 $22.7 $28.5 $26.4 $9.3 $9.5 $9.2 $9.7 $6.4 $10 .0 30% $8.0 $2
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