DALLAS, March 8, 2018 /PRNewswire/ -- CECO
Environmental Corp. (Nasdaq: CECE), a leading global air quality and fluid handling company serving the energy, industrial
and other niche markets, today reported its financial results for the fourth quarter and full year 2017.
Highlights of the Fourth Quarter 2017*
- Revenue of $73.5 million, compared with $100.0 million
- Gross profit of $25.6 million (34.8% margin), compared with $35.7
million (35.7% margin)
- Non-GAAP gross profit of $25.7 million (35.0% margin), compared with $35.8 million (35.8% margin)
- Operating loss of $(8.2) million, compared with a $(50.4)
million loss
- Non-GAAP operating income of $3.5 million, compared with $14.7
million
- Net loss of $(11.6) million, compared with a $(51.2) million
loss
- Non-GAAP net loss of $(1.7) million, compared with non-GAAP net income of $12.0 million
- Net loss per diluted share of $(0.34), compared with $(1.49)
loss per diluted share
- Non-GAAP net (loss)/income per diluted share of $(0.05), compared with $0.35
- Adjusted EBITDA of $4.9 million, compared with $16.3
million
- Bookings of $91.4 million, compared with $77.7
million
- Backlog of $168.9 million
Full-Year 2017 Highlights*
- Revenue of $345.1 million, down $71.9 million
- Gross profit of $113.2 million, down $21.7 million
- Gross margin of 32.8%, up 40 basis points
- Net loss of $(3.0) million, or $(0.09) loss per share
- Non-GAAP net income of $9.5 million, or $0.27 per diluted
share
- Adjusted EBITDA of $34.5 million
* All comparisons are versus the comparable prior-year period.
CECO's Chief Executive Officer Dennis Sadlowski commented, "In the fourth quarter of 2017, we
accelerated actions behind our previously communicated refreshed operating strategy. We implemented a restructuring program
to reduce costs, began to refocus our portfolio including exiting non-core and low critical mass areas and are investing in our
core segments to accelerate growth. Despite ongoing market challenges that reduced volume and generated disappointing financial
results, we have maintained solid gross margins and with a refreshed outside-in approach to our business, picked up key wins and
increased bookings quarter over quarter. Our book to bill ratio exceeded 1:1 for the first time in seven quarters representing an
inflection point for the company."
Mr. Sadlowski added, "Heading into 2018, we have already moved swiftly with the clarity of our strategy to transform the
business to win market share and make an impact on our customers and the world in which we live. We demonstrated our commitment
to our new strategy through the initial actions on our non-core asset sales and investments in simplification and production
machinery. We will continue to invest in our growth platforms and major account relationships with key customers around the world
to ensure the company is best-positioned as markets begin to rebound."
FOURTH QUARTER RESULTS
Revenue in the fourth quarter of 2017 was $73.5 million, down 26.5% from $100.0 million in the prior-year period.
Operating loss was $8.2 million for the fourth quarter of 2017, compared with a $50.4 million operating loss in the prior-year period. Non-GAAP operating income was $3.5 million (4.8% margin) for the fourth quarter of 2017, compared with $14.7
million (14.7% margin) in the prior-year period.
Net loss was $11.6 million for the fourth quarter of 2017, compared with a $51.2 million net loss in the prior-year period. Non-GAAP net loss was $1.7
million for the fourth quarter of 2017, compared with non-GAAP net income of $12.0 million
in the prior-year period.
Net loss per diluted share was $0.34 for the fourth quarter of 2017, compared with net loss per
diluted share of $1.49 in the prior-year period. Non-GAAP net loss per diluted share was
$0.05 for the fourth quarter of 2017, compared with non-GAAP net income per diluted share of
$0.35 for the prior-year period.
Cash and cash equivalents were $29.9 million and bank debt was $117.7
million, as of December 31, 2017, compared with $45.8 million and $126.4 million, respectively, as of December 31, 2016.
BACKLOG AND BOOKINGS
Total backlog at December 31, 2017 was $168.9 million as compared with $197.0 million on December 31, 2016 and $153.9
million as of September 30, 2017.
Bookings were $91.4 million for the fourth quarter of 2017, compared with $77.7 million in the prior-year period and $71.0 in the third quarter of
2017. Bookings were $333.6 million for the year of 2017 as compared with $402.8 million for the prior-year period.
2017 FULL YEAR RESULTS
Revenue in the year of 2017 was $345.1 million, down 17.2% from $417.0
million in the prior-year period.
Operating income was $8.0 million for the year 2017, compared with an operating loss of
$25.6 million in the prior-year period. Non-GAAP operating income was $28.3
million for the year 2017, compared with $52.7 million in the prior-year period.
Net loss was $3.0 million for the year 2017, compared with a net loss of $38.2 million in the prior-year period. Non-GAAP net income was $9.5
million for the year 2017, compared with $33.5 million in the prior-year period.
Net loss per diluted share was $0.09 for the year 2017, compared with net loss per diluted share
of $1.12 in the prior-year period. Non-GAAP net income per diluted share was $0.27 for the year 2017, compared with $0.99 for the prior-year period.
CONFERENCE CALL
A conference call is scheduled for today at 7:30 a.m. CT to discuss the fourth quarter and
fiscal 2017 financial results. The conference call may also be accessed by dialing 877-870-4263 (Toll-Free) within the U.S.,
855-669-9657 (Toll-Free) within Canada or Toll/International 412-317-0790. A replay will
be available from 11:30 a.m. ET on March 8, 2018 until
March 22, 2018 at 11:59 p.m. ET. The replay may be accessed by
dialing 877-344-7529 (Toll-Free) within the U.S., 855-669-9658 (Toll-Free) within Canada, or
Toll/International 412-317-0088 and entering access code 10117555.
The live webcast and slides can also be accessed at https://www.cecoenviro.com/events-calendar.
A BOU T CECO ENVIRONMENTAL
CECO Environmental is a global leader in industrial air quality and fluid handling serving the energy, industrial and other
niche markets through an attractive asset-light business model. CECO provides innovative technology and application expertise
that helps companies grow their businesses with safe, clean, and more efficient solutions to help protect our shared environment.
CECO serves both established and emerging industries in regions around the world working to improve air quality, optimize the
energy value chain, and provide customized engineered solutions in multiple applications that include oil and gas, power
generation, water and wastewater, battery production, poly silicon fabrication, chemical and petrochemical processing, along with
a wide range of others. CECO has over $5 billion of installed equipment base with end users, which
we target to expand and grow a higher recurring revenue of aftermarket products and services. We also continue to focus on
operational excellence strategies as a central theme to improving our earnings and cash flows. CECO is listed on Nasdaq under the
ticker symbol "CECE." For more information, please visit http://www.cecoenviro.com/.
Contact:
Matthew Eckl, Chief Financial Officer
800.333.5475
investor.relations@onececo.com
CECO ENVIRONMENTAL CORP. AND SUBSIDIARIES
|
|
CONSOLIDATED BALANCE SHEETS
|
|
|
|
December 31,
|
|
($ in thousands, except shares and per share data)
|
|
2017
|
|
|
2016
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
29,902
|
|
|
$
|
45,824
|
|
Restricted cash
|
|
|
591
|
|
|
|
1,498
|
|
Accounts receivable, net
|
|
|
67,990
|
|
|
|
83,062
|
|
Costs and estimated earnings in excess of billings on uncompleted
contracts
|
|
|
33,947
|
|
|
|
38,123
|
|
Inventories, net
|
|
|
20,969
|
|
|
|
21,487
|
|
Prepaid expenses and other current assets
|
|
|
10,760
|
|
|
|
13,560
|
|
Prepaid income taxes
|
|
|
1,930
|
|
|
|
1,590
|
|
Assets held for sale
|
|
|
7,853
|
|
|
|
7,834
|
|
Total current assets
|
|
|
173,942
|
|
|
|
212,978
|
|
Property, plant and equipment, net
|
|
|
23,400
|
|
|
|
27,270
|
|
Goodwill
|
|
|
166,951
|
|
|
|
170,153
|
|
Intangible assets – finite life, net
|
|
|
49,956
|
|
|
|
60,728
|
|
Intangible assets – indefinite life
|
|
|
19,691
|
|
|
|
22,042
|
|
Deferred charges and other assets
|
|
|
4,609
|
|
|
|
5,463
|
|
Total assets
|
|
$
|
438,549
|
|
|
$
|
498,634
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Current portion of debt
|
|
$
|
11,296
|
|
|
$
|
8,827
|
|
Accounts payable and accrued expenses
|
|
|
70,786
|
|
|
|
95,610
|
|
Billings in excess of costs and estimated earnings on uncompleted
contracts
|
|
|
20,469
|
|
|
|
35,085
|
|
Note payable
|
|
|
5,300
|
|
|
|
5,300
|
|
Income taxes payable
|
|
|
—
|
|
|
|
1,536
|
|
Total current liabilities
|
|
|
107,851
|
|
|
|
146,358
|
|
Other liabilities
|
|
|
30,382
|
|
|
|
34,864
|
|
Debt, less current portion
|
|
|
103,537
|
|
|
|
114,366
|
|
Deferred income tax liability, net
|
|
|
10,210
|
|
|
|
12,964
|
|
Total liabilities
|
|
|
251,980
|
|
|
|
308,552
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
Preferred stock, $.01 par value; 10,000 shares authorized, none
issued
|
|
|
—
|
|
|
|
—
|
|
Common stock, $.01 par value; 100,000,000 shares authorized, 34,707,924 and
34,300,209 shares issued and outstanding at December 31,
2017
and 2016, respectively
|
|
|
347
|
|
|
|
343
|
|
Capital in excess of par value
|
|
|
248,170
|
|
|
|
244,878
|
|
Accumulated loss
|
|
|
(52,673)
|
|
|
|
(41,741)
|
|
Accumulated other comprehensive loss
|
|
|
(8,919)
|
|
|
|
(13,042)
|
|
|
|
|
186,925
|
|
|
|
190,438
|
|
Less treasury stock, at cost, 137,920 shares at December 31, 2017 and
2016
|
|
|
(356)
|
|
|
|
(356)
|
|
Total shareholders' equity
|
|
|
186,569
|
|
|
|
190,082
|
|
Total liabilities and shareholders' equity
|
|
$
|
438,549
|
|
|
$
|
498,634
|
|
CECO ENVIRONMENTAL CORP. AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(unaudited)
|
|
|
For the Three Months Ended
December 31,
|
|
|
For the Year Ended December 31,
|
|
(dollars in thousands, except shares and per share data)
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Net sales
|
|
$
|
73,543
|
|
|
$
|
99,982
|
|
|
$
|
345,051
|
|
|
$
|
417,011
|
|
Cost of sales
|
|
|
47,897
|
|
|
|
64,315
|
|
|
|
231,857
|
|
|
|
282,152
|
|
Gross profit
|
|
|
25,646
|
|
|
|
35,667
|
|
|
|
113,194
|
|
|
|
134,859
|
|
Selling and administrative expenses
|
|
|
22,285
|
|
|
|
21,118
|
|
|
|
88,975
|
|
|
|
81,743
|
|
Acquisition and integration expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
524
|
|
Amortization and earnout expenses
|
|
|
2,509
|
|
|
|
7,055
|
|
|
|
7,132
|
|
|
|
20,231
|
|
Intangible asset and goodwill impairment
|
|
|
7,168
|
|
|
|
57,923
|
|
|
|
7,168
|
|
|
|
57,923
|
|
Restructuring expense
|
|
|
1,895
|
|
|
|
-
|
|
|
|
1,895
|
|
|
|
-
|
|
(Loss) income from operations
|
|
|
(8,211)
|
|
|
|
(50,429)
|
|
|
|
8,024
|
|
|
|
(25,562)
|
|
Other (expense) income, net
|
|
|
(35)
|
|
|
|
(85)
|
|
|
|
106
|
|
|
|
310
|
|
Interest expense
|
|
|
(1,770)
|
|
|
|
(1,717)
|
|
|
|
(6,721)
|
|
|
|
(7,712)
|
|
(Loss) income before income taxes
|
|
|
(10,016)
|
|
|
|
(52,231)
|
|
|
|
1,409
|
|
|
|
(32,964)
|
|
Income tax expense
|
|
|
1,573
|
|
|
|
(1,059)
|
|
|
|
4,438
|
|
|
|
5,290
|
|
Net loss
|
|
$
|
(11,589)
|
|
|
$
|
(51,172)
|
|
|
$
|
(3,029)
|
|
|
$
|
(38,254)
|
|
Net loss attributable to noncontrolling interest
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(36)
|
|
Net loss attributable to CECO Environmental Corp.
|
|
$
|
(11,589)
|
|
|
$
|
(51,172)
|
|
|
$
|
(3,029)
|
|
|
$
|
(38,218)
|
|
Loss per share attributable to CECO Environmental Corp.:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.34)
|
|
|
$
|
(1.49)
|
|
|
$
|
(0.09)
|
|
|
$
|
(1.12)
|
|
Diluted
|
|
$
|
(0.34)
|
|
|
$
|
(1.49)
|
|
|
$
|
(0.09)
|
|
|
$
|
(1.12)
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
34,568,508
|
|
|
|
34,280,940
|
|
|
|
34,445,256
|
|
|
|
33,979,549
|
|
Diluted
|
|
|
34,568,508
|
|
|
|
34,280,940
|
|
|
|
34,445,256
|
|
|
|
33,979,549
|
|
CECO ENVIRONMENTAL CORP. AND SUBSIDIARIES
|
|
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
|
|
|
|
Three Months Ended December 31,
|
|
|
For the Year Ended December 31,
|
|
(dollars in millions)
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Gross profit as reported in accordance with GAAP
|
|
$
|
25.6
|
|
|
$
|
35.7
|
|
|
$
|
113.2
|
|
|
$
|
134.9
|
|
Gross profit margin in accordance with GAAP
|
|
|
34.8
|
%
|
|
|
35.7
|
%
|
|
|
32.8
|
%
|
|
|
32.4
|
%
|
Legacy design repairs
|
|
|
—
|
|
|
|
—
|
|
|
|
2.0
|
|
|
|
—
|
|
Inventory valuation adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
Plant, property and equipment valuation adjustment
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.6
|
|
|
|
0.6
|
|
Non-GAAP gross profit
|
|
$
|
25.7
|
|
|
$
|
35.8
|
|
|
$
|
115.8
|
|
|
$
|
135.6
|
|
Non-GAAP gross profit margin
|
|
|
35.0
|
%
|
|
|
35.8
|
%
|
|
|
33.6
|
%
|
|
|
32.5
|
%
|
|
|
Three Months Ended December 31,
|
|
|
For the Year Ended December 31,
|
|
(dollars in millions)
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Operating (loss) income as reported in accordance with GAAP
|
|
$
|
(8.2)
|
|
|
$
|
(50.4)
|
|
|
$
|
8.0
|
|
|
$
|
(25.6)
|
|
Operating margin in accordance with GAAP
|
|
|
(11.2)%
|
|
|
|
(50.4)%
|
|
|
|
2.3
|
%
|
|
|
(6.1)%
|
|
Legacy design repairs
|
|
|
—
|
|
|
|
—
|
|
|
|
2.0
|
|
|
|
—
|
|
Inventory valuation adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
Plant, property and equipment valuation adjustment
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.6
|
|
|
|
0.6
|
|
Gain on insurance settlement
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.0)
|
|
Acquisition and integration expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.5
|
|
Amortization and earnout (income) expenses, net
|
|
|
2.5
|
|
|
|
7.1
|
|
|
|
7.1
|
|
|
|
20.2
|
|
Intangible asset and goodwill impairment
|
|
|
7.2
|
|
|
|
57.9
|
|
|
|
7.2
|
|
|
|
57.9
|
|
Restructuring expense
|
|
|
1.9
|
|
|
|
—
|
|
|
|
1.9
|
|
|
|
—
|
|
Executive transition expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
1.3
|
|
|
|
—
|
|
Facility exit expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
—
|
|
Non-GAAP operating income
|
|
$
|
3.5
|
|
|
$
|
14.7
|
|
|
$
|
28.3
|
|
|
$
|
52.7
|
|
Non-GAAP operating margin
|
|
|
4.8
|
%
|
|
|
14.7
|
%
|
|
|
8.2
|
%
|
|
|
12.6
|
%
|
|
|
Three Months Ended December 31,
|
|
|
For the Year Ended December 31,
|
|
(dollars in millions)
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Net loss as reported in accordance with GAAP
|
|
$
|
(11.6)
|
|
|
$
|
(51.2)
|
|
|
$
|
(3.0)
|
|
|
$
|
(38.2)
|
|
Legacy design repairs
|
|
|
—
|
|
|
|
—
|
|
|
|
2.0
|
|
|
|
—
|
|
Inventory valuation adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
Plant, property and equipment valuation adjustment
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.6
|
|
|
|
0.6
|
|
Gain on insurance settlement
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.0)
|
|
Acquisition and integration expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.5
|
|
Amortization and earnout (income) expenses, net
|
|
|
2.5
|
|
|
|
7.1
|
|
|
|
7.1
|
|
|
|
20.2
|
|
Intangible asset and goodwill impairment
|
|
|
7.2
|
|
|
|
57.9
|
|
|
|
7.2
|
|
|
|
57.9
|
|
Restructuring expense
|
|
|
1.9
|
|
|
|
—
|
|
|
|
1.9
|
|
|
|
—
|
|
Executive transition expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
1.3
|
|
|
|
—
|
|
Facility exit expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
—
|
|
Foreign currency remeasurement
|
|
|
(0.1)
|
|
|
|
1.4
|
|
|
|
(2.1)
|
|
|
|
0.8
|
|
Tax benefit of adjustments
|
|
|
(1.7)
|
|
|
|
(3.3)
|
|
|
|
(5.7)
|
|
|
|
(7.4)
|
|
Non-GAAP net (loss) income
|
|
$
|
(1.7)
|
|
|
$
|
12.0
|
|
|
$
|
9.5
|
|
|
$
|
33.5
|
|
Depreciation
|
|
|
0.9
|
|
|
|
1.1
|
|
|
|
3.9
|
|
|
|
4.5
|
|
Non-cash stock compensation (excluding executive transition
costs)
|
|
|
0.5
|
|
|
|
0.6
|
|
|
|
2.3
|
|
|
|
2.3
|
|
Other expense (income)
|
|
|
0.1
|
|
|
|
(1.3)
|
|
|
|
2.0
|
|
|
|
(1.1)
|
|
Gain on insurance settlement
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1.0
|
|
Interest expense
|
|
|
1.8
|
|
|
|
1.7
|
|
|
|
6.7
|
|
|
|
7.7
|
|
Income tax expense
|
|
|
3.3
|
|
|
|
2.2
|
|
|
|
10.1
|
|
|
|
12.7
|
|
Adjusted EBITDA
|
|
$
|
4.9
|
|
|
$
|
16.3
|
|
|
$
|
34.5
|
|
|
$
|
60.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.34)
|
|
|
$
|
(1.49)
|
|
|
$
|
(0.09)
|
|
|
$
|
(1.12)
|
|
Diluted
|
|
$
|
(0.34)
|
|
|
$
|
(1.49)
|
|
|
$
|
(0.09)
|
|
|
$
|
(1.12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net (loss) income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.05)
|
|
|
$
|
0.35
|
|
|
$
|
0.28
|
|
|
$
|
0.99
|
|
Diluted
|
|
$
|
(0.05)
|
|
|
$
|
0.35
|
|
|
$
|
0.27
|
|
|
$
|
0.99
|
|
NOTE REGARDING NON-GAAP FINANCIAL MEASURES
CECO is providing certain non-GAAP historical financial measures as presented above 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 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.
Non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, non-GAAP gross profit margin, non-GAAP operating
margin, non-GAAP earnings per basic and diluted share and adjusted EBITDA, as we present them in the financial data included in
this press release, have been adjusted to exclude the effects of expenses related to legacy design repairs, inventory valuation
adjustments, property, plant and equipment valuation adjustments, gains from insurance settlements, acquisition and integration
expense activities including retention, legal, accounting, banking, amortization and contingent earn-out expenses, foreign
currency re-measurement, intangible asset impairment, legal reserves, executive transition expenses, facility exit expenses,
restructuring expenses, other nonrecurring or infrequent items and the associated tax benefit of these items. Management believes
that these items are not necessarily indicative of the Company's ongoing operations and their exclusion provides individuals with
additional information to compare the Company's results over multiple periods. Management utilizes this information to
evaluate its ongoing financial performance. Our financial statements may continue to be affected by items similar to those
excluded in the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP financial measures should
not be construed as an inference that all such costs are unusual or infrequent.
Non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, non-GAAP gross profit margin, non-GAAP operating
margin, non-GAAP earnings per basic and diluted share and adjusted EBITDA are not calculated in accordance with GAAP, and should
be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with
GAAP. Non-GAAP financial measures have limitations in that they do not reflect all of the costs associated with the operations of
our business as determined in accordance with GAAP. As a result, you should not consider these measures in isolation or as a
substitute for analysis of CECO's results as reported under GAAP. Additionally, CECO cautions investors that non-GAAP
financial measures used by the Company may not be comparable to similarly titles measures of other companies.
In accordance with the requirements of Regulation G issued by the Securities and Exchange Commission, non-GAAP gross profit,
non-GAAP operating income, non-GAAP net income, non-GAAP gross profit margin, non-GAAP operating margin, non-GAAP earnings per
basic and diluted share and adjusted EBITDA stated in the tables above present the most directly comparable GAAP financial
measure and reconcile to the most directly comparable GAAP financial measures.
SAFE HARBOR
Any statements contained in this Press Release, 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 basis of management's views and assumptions regarding future events and business performance. We use words such as
"believe," "expect," "anticipate," "intends," "estimate," "forecast," "project," "will," "plan," "should" and similar expressions
to identify forward-looking statements. Forward-looking statements involve risks and uncertainties that may cause actual results
to differ materially from any future results, performance or achievements expressed or implied by such statements. Potential
risks and uncertainties, among others, that could cause actual results to differ materially are discussed under "Part I – Item
1A. Risk Factors" of the Company's Annual Report on Form 10-K and include, but are not limited to: our ability to successfully
realize the expected benefits of our restructuring program; our ability to successfully integrate acquired businesses and realize
the synergies from acquisitions, as well as a number of factors related to our business, including economic and financial market
conditions generally and economic conditions in CECO's service areas; dependence on fixed price contracts and the risks
associated therewith, including actual costs exceeding estimates and method of accounting for contract revenue; fluctuations in
operating results from period to period due to cyclicality or seasonality of the business; the effect of growth on CECO's
infrastructure, resources, and existing sales; the ability to expand operations in both new and existing markets; the potential
for contract delay or cancellation; liabilities arising from faulty services or products that could result in significant
professional or product liability, warranty, or other claims; changes in or developments with respect to any litigation or
investigation; failure to meet timely completion or performance standards that could result in higher cost and reduced profits
or, in some cases, losses on projects; the potential for fluctuations in prices for manufactured components and raw materials;
the substantial amount of debt incurred in connection with our acquisitions and our ability to repay or refinance it or incur
additional debt in the future; the impact of federal, state or local government regulations; economic and political conditions
generally; and the effect of competition in the environmental, energy and fluid handling and filtration industries. Many of these
risks are beyond management's ability to control or predict. Should one or more of these risks or uncertainties materialize, or
should the assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated. Investors
are cautioned not to place undue reliance on such forward-looking statements as they speak only to our views as of the date the
statement is made. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under the
federal securities laws or the rules and regulations of the Securities and Exchange Commission, we undertake no obligation to
update or review any forward-looking statements, whether as a result of new information, future events or otherwise.
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SOURCE CECO Environmental Corp.