Ceco Environmental Corp. · NASDAQ:CECO
Ceco Environmental — Q1 2021 Earnings Presentation
22 slides from Ceco Environmental's earnings presentation, May 6, 2021
Slide 1: Q1'21 Earnings Call
Q1’21 Earnings Call May 6th, 2021 1
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: Great start to 2021
Great start to 2021 ($MM) Result YoY % Seq % Comments • Orders: ~ $92 +22% +19% Great growth & balanced • Sales: ~ $72 (11)% (13)% Beginning backlog limited sales Book-to-Bill ~ 1.3 … Backlog Back Above $200M • Gross Margin: 33.9% (120)bp +230bp Continued good project execution Q1 2021 Financial • A
Slide 4: Environmental Solutions Leader for Diversified Industrial Markets
Environmental Solutions Leader for Diversified Industrial Markets ($MM) Platform Solutions Segments Air Pollution Control Industrial Ventilation • Particulate Filtration 21% • Duct Fabrication Industrial & Process • Scrubbers • Installation Solutions • Chemical Abatement 46% • Thermal Abatement 33%
Slide 5: Q1'21 Financials
CECO ENVIRONMENTAL Q1’21 Financials
Slide 6: Orders grew sequentially and YoY across all units … Revenue to grow as Backlog converts
Orders grew sequentially and YoY across all units … Revenue to grow as Backlog converts (a) ($MM) Orders Revenue $92.1 $80.5 $82.9 $77.2 11.0 $75.2 $77.4 $75.7 7.9 $71.9 9.5 9.0 10.5 $66.8 8.6 9.4 $60.0 24.7 19.0 9.3 8.2 20.4 18.7 7.6 22.9 16.7 23.5 20.6 13.0 20.6 56.3 50.6 49.1 49.7 56.1 41.8 39.4
Slide 7: Orders Information by End-Markets Served ("historic view")
Orders Information by End-Markets Served (“historic view”) End Markets Served Segments Industrial Air Q1 Orders: $25 | +5% YoY | +8% Seq. TTM Orders: $81 | (3)% Industrial & Process Solutions Fluid Handling Q1 Orders: $11 | +5% YoY | +28% Seq. $108 | 34% TTM Orders: $35 | (7)% Power Gen Q1 Orders: $
Slide 8: Backlog back above $200 on strong bookings
Backlog back above $200 on strong bookings ($MM) $250.0 $208.9 $204.6 $203.1 $189.1 $183.1 $200.0 • Strong bookings generates 1.3X Book/Bill ratio… breaks 5 quarter slide $150.0 $92.1 • Backlog up 11% sequentially and down (3)% Year over Year $80.5 $75.2 $77.4 $82.9 $100.0 $75.7 $66.8 $77.2 $71.9 $5
Slide 9: Gross margins improved on project execution; EBITDA lower on volume
Gross margins improved on project execution; EBITDA lower on volume ($MM) Non-GAAP Gross Profit Non-GAAP Operating Income Adjusted EBITDA $30.0 60% $28.3 $28.0 $25.8 $26.2 20.0% $26.0 $24.8 50% $14.0 $24.4 18.0% $12.0 20.0% $24.0 $12.0 16.0% $9.8 18.0% $10.0 $22.0 40% $8.8 14.0% 16.0% $10.0 $8.2 12.
Slide 10: Project Margins & Cost actions offset lower Volumes… Cash flow outperforms
Project Margins & Cost actions offset lower Volumes… Cash flow outperforms ($MM) • $92 of Orders +19% Sequentially and +22% Y/Y… growth in all business units • Revenue (11)% sequentially driven by lower Eng. Systems backlog to start Q1 • GM% up 2pts sequentially on short-cycle mix but down (1) pt Yo
Slide 11: FCF improves in Q1 on collections and fewer project milestone under-billings
FCF improves in Q1 on collections and fewer project milestone under-billings ($MM) (a) (b) Trade Working Capital Free Cash Flow conversion % of $- $37 $44 $41 $57 $51 TTM EBITDA: 78% 50% 46% 2% 13% 18.0% 16.5% 20.0 13.4% 15.0 12.8% 7.9% 11.1% 7.8% 10.0 3.1% 1.6% 5.1% %- Adjusted FCF: 5.0 $9.4 $6.0 $
Slide 12: Continue to pay down debt… Balance sheet in healthy position
Continue to pay down debt… Balance sheet in healthy position ($MM) Debt Paydown Balance sheet Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 $194 $175 Term Debt $ 48.1 $ 47.5 $ 46.9 $ 46.3 $ 45.6 Revolver 61.5 32.0 31.0 27.7 25.0 Total Debt $ 109.6 $ 79.5 $ 77.9 $ 74.0 $ 70.6 $125 $115 Cash $ 84.1 $ 43.1 $ 46.3 $ 37
Slide 13: Looking Forward
CECO ENVIRONMENTAL Looking Forward
Slide 14: 2021: Deliver strong results while kicking-off transformational strategy
2021: Deliver strong results while kicking-off transformational strategy Drive • Solid start to 2021 with Orders up 22% Y/Y … Book-to-Bill ~ 1.3 … FCF > $9M Financial • Continue to execute projects with new cost structure to sustain margin expansion Results Maintain Momentum on Orders Growth & Margi
Slide 15: CECO structurally more efficient since previous downturn
CECO structurally more efficient since previous downturn Structural changes since ’17… Profitability improved… Headcount ERP’s / Complexity SG&A Savings EBITDA Margins 2017 2017 ~ 900 employees 12 ERP’s ~ $10M > 200bp Annualized Q1’21 Q1’21 Reduction Expansion ~ 725 employees 4 ERP’s > 20% > 65% Pos
Slide 16: Questions?
Q1 2021 Earnings Conclusion • Thank you Team CECO … Commitment to our customers and health & safety! • Strong start to 2021 … Rebuilding our Backlog is critical • Energy markets improving and many Industrial markets remain healthy • Continue to focus on new markets, technologies and expanding awaren
Slide 17: Supplemental Materials
Supplemental Materials Other Information And Non-GAAP Reconciliation 17
Slide 18: Revenue excluding Acquisitions & Divestitures
Revenue excluding Acquisitions & Divestitures 18
Slide 19: Non-GAAP Gross Profit and Margin
Non-GAAP Gross Profit and Margin 19
Slide 20: Non-GAAP Operating Income and Margin
Non-GAAP Operating Income and Margin 20
Slide 21: Non-GAAP Net Income, Adjusted EBITDA and Margin
Non-GAAP Net Income, Adjusted EBITDA and Margin 21
Slide 22: Adjusted Free Cash Flow
Adjusted Free Cash Flow CECO ENVIRONMENTAL (dollars in millions) Net cash provided by operating activities |Add: earn-outs classified as operating Capital expenditures Adjusted free cash flow ITM Adjusted free cash flow TM EBITDA TTM FCF / EBITDA Conversion Annual Annual 1 a2 a3 Q4 Annual ~—:1Q 2018