CECO Environmental Reports Record Third Quarter 2024 Results

CECO Environmental Corp. (Nasdaq: CECO) has announced its financial results for the third quarter of 2024, highlighting significant achievements alongside some challenges. The company achieved record bookings during this quarter, contributing to the highest backlog it has ever reported.

Record Bookings and Backlog

In the third quarter, CECO Environmental recorded orders totaling $162.3 million, marking a 12% increase compared to the previous year. This surge in bookings has resulted in a backlog that stands at a remarkable $437.5 million. Such a strong performance indicates a robust demand for CECO's services and products across various sectors, particularly in energy transition projects and general industrial applications.

Challenges with Revenue

Despite the positive booking figures, the revenue for this quarter was $135.5 million, which reflects a 9% decline year-over-year. The decrease in revenue and net income, which stood at $2.1 million—a 36% drop—was largely attributed to delays in customer-driven projects. These delays, while disappointing, are expected to convert into revenue in the upcoming months as projects get back on track.

Acquisition of Profire Energy

On a positive note, CECO has announced the acquisition of Profire Energy, Inc. (Nasdaq: PFIE) for $125 million in an all-cash transaction. This acquisition, expected to close by January 2025, aligns with CECO's strategy to expand its portfolio and enhance its capabilities in combustion control and burner management technologies.

Acquisition of WK

Additionally, CECO completed the acquisition of WK, a leading industrial air company based in Germany, earlier in October. WK's expertise in designing and supplying advanced technical systems is expected to enhance CECO's offerings in the industrial processing sector and contribute approximately $15 million in sales for the 2024 financial year.

Updated Financial Guidance

In light of the current circumstances, CECO Environmental has updated its financial guidance for the full year 2024. The revised revenue expectation now stands between $575 million and $600 million, indicating a projected growth of 10% at the midpoint. Adjusted EBITDA is anticipated to reach between $65 million and $70 million, reflecting a significant year-over-year increase. For 2025, CECO projects revenues of $700 million to $750 million, which translates to a potential 25% increase compared to the current year.

Conclusion and Outlook

CEO Todd Gleason expressed optimism about the future, emphasizing that despite the temporary setbacks in revenue due to project delays, the strong backlog and recent acquisitions position CECO for continued growth. The company remains focused on executing its strategies to drive organic growth while leveraging its acquisitions for enhanced operational efficiency.

As representatives of CECO Environmental prepare for a conference call to discuss the third-quarter outcomes, they aim to provide additional insights and take questions from investors and analysts regarding their performance and future outlook.

CECO, financial, acquisition, backlog, revenue