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| 8-K - FORM 8-K - CECO ENVIRONMENTAL CORP | d8k.htm |
Exhibit 99.1
| NasdaqGM:CECE | NEWS RELEASE |
CECO ENVIRONMENTAL REPORTS
SECOND QUARTER AND SIX MONTH 2011 RESULTS
Company Achieves Quarterly Net Income of $2.0 Million and Announces
Share Buyback Program
CINCINNATI, OHIO, AUGUST 11, 2011 - CECO Environmental Corp. (NasdaqGM:CECE), a leading provider of air pollution control systems, today announced second quarter and six month results for the period ended June 30, 2011. Additionally, the Company announced approval by its Board of Directors of a share buyback program authorizing the purchase of up to 0.5 million shares of CECO common stock over an eighteen month period.
Financial highlights for the second quarter of 2011 compared to the second quarter of 2010 include:
Net sales were $32.5 million compared to $34.8 million in the comparable quarter;
Gross profit increased to $8.7 million from $8.4 million;
Gross margin increased to 26.8% from 24.1%;
Selling & administrative expenses were reduced by $1.2 million to $5.7 million;
Selling & administrative expenses as a percent of sales decreased from 19.8% to 17.5%;
Operating income increased to $2.8 million from $1.4 million in 2010;
Operating margin increased to 8.6% from 4.0% in 2010;
Net income was $2.0 million compared to net income of $0.6 million in 2010;
Net income per diluted share was $0.12 compared to net income per diluted share of $0.04 in 2010;
Bookings increased by 7% to $33.5 million compared to $31.3 million in 2010;
Cash and cash equivalents increased to $8.4 million with only $0.3 million in bank debt; and
Backlog as of June 30, 2011 was $52.6 million compared to $51.6 million as of March 31, 2011.
Financial highlights for the six months ended June 30, 2011 compared to six months ended June 30, 2010 include:
Net sales were $68.5 million compared to $69.8 million for the comparable period in 2010;
Gross profit increased to $17.2 million from $16.4 million;
Gross margin increased to 25.1% from 23.5%;
Selling & administrative expenses were reduced to $11.7 million from $14.1 million;
Selling & administrative expenses as a percent of sales decreased from 20.2% to 17.1%;
Operating income increased to $5.3 million from $2.0 million in 2010;
Operating margin increased to 7.7% from 2.9% in 2010;
Net income was $3.2 million compared to net income of $0.7 million in 2010;
Net income per diluted share was $0.20 compared to net income per diluted share of $0.05;
Year-to-date bookings increased by 14% to $66.8 million compared to $58.4 million in 2010.
Our year-over-year bookings have increased by 14% and we are showing significant increases in gross margins and operating margins for the three and six month periods ended June 30, 2011.
“I am very pleased with the results from the second quarter and the ongoing improvement in financial performance that the Company has achieved,” commented CECO’s Chief Executive Officer, Jeff Lang. “Our slightly lower revenues in the quarter are the result of our intentional pruning of lower margin customer segments from our backlog, primarily in our Contracting/Services Group. Nevertheless, we expect that revenues will increase as our domestic and global sales initiatives take effect.”
Mr. Lang continued, “We continue to realize the positive results from global growth, streamlining and gross margin enhancement that we began implementing last year. Additionally, nearly 32% of our 2011 bookings were from international customers which provides further proof that our global expansion initiatives continue to be successful.”
CECO will host a conference call on Thursday, August 11, 2011 at 8:30 a.m. EDT to review its financial results for the quarter. Conferencing details are as follows:
| Dial in number: | 800-901-5259 | |
| International dial in number: | 617-786-4514 | |
| Participant passcode: | 65043320 | |
| Replay: | 888-286-8010 | |
| International: | 617-801-6888 | |
| Passcode: | 63652961 | |
ABOUT CECO ENVIRONMENTAL
CECO Environmental Corp. is North America’s largest independent air pollution control company. CECO provides a wide spectrum of air quality services and products including: industrial air filters, environmental maintenance, monitoring and management services, and air quality improvement systems. CECO is a full-service provider to the steel, military, aluminum, automotive, ethanol, aerospace, electric power, semiconductor, chemical, cement, metalworking, glass, foundry and virtually all industrial process industries.
For more information on CECO Environmental please visit the company’s website at http://www.cecoenviro.com
Contact:
Corporate Information
Jeff Lang, CECO Environmental Corp.
Email: investors@cecoenviro.com
1-800-333-5475
CECO ENVIRONMENTAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Dollars in thousands, except per share data
| THREE MONTHS ENDED JUNE 30, |
SIX MONTHS ENDED JUNE 30, |
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| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net sales |
$ | 32,537 | $ | 34,776 | $ | 68,493 | $ | 69,797 | ||||||||
| Cost of sales |
23,839 | 26,377 | 51,322 | 53,381 | ||||||||||||
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| Gross profit |
8,698 | 8,399 | 17,171 | 16,416 | ||||||||||||
| Selling and administrative |
5,741 | 6,904 | 11,688 | 14,138 | ||||||||||||
| Amortization |
112 | 125 | 223 | 260 | ||||||||||||
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| Income from operations |
2,845 | 1,370 | 5,260 | 2,018 | ||||||||||||
| Other income, net |
360 | 32 | 333 | (53 | ) | |||||||||||
| Interest expense (including related party interest of $59 and $59, and $118 and $118, respectively) |
(284 | ) | (308 | ) | (574 | ) | (601 | ) | ||||||||
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| Income from continuing operations before income taxes |
2,921 | 1,094 | 5,019 | 1,364 | ||||||||||||
| Income tax expense |
968 | 417 | 1,808 | 520 | ||||||||||||
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| Income from continuing operations |
1,953 | 677 | 3,211 | 844 | ||||||||||||
| Loss from discontinued operations, net of tax |
0 | (95 | ) | 0 | (165 | ) | ||||||||||
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| Net income |
$ | 1,953 | $ | 582 | $ | 3,211 | $ | 679 | ||||||||
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| Per share data: |
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| Basic income from continuing operations |
$ | 0.14 | $ | 0.05 | $ | 0.22 | $ | 0.06 | ||||||||
| Basic loss from discontinued operations |
0.00 | (0.01 | ) | 0.00 | (0.01 | ) | ||||||||||
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| Basic net income |
$ | 0.14 | $ | 0.04 | $ | 0.22 | $ | 0.05 | ||||||||
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| Diluted income from continuing operations |
$ | 0.12 | $ | 0.05 | $ | 0.20 | $ | 0.06 | ||||||||
| Diluted loss from discontinued operations |
0.00 | (0.01 | ) | 0.00 | (0.01 | ) | ||||||||||
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| Diluted net income |
$ | 0.12 | $ | 0.04 | $ | 0.20 | $ | 0.05 | ||||||||
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| Weighted average number of common shares outstanding: |
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| Basic |
14,334,116 | 14,304,047 | 14,324,040 | 14,299,598 | ||||||||||||
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| Diluted |
17,141,633 | 17,111,818 | 17,117,440 | 14,393,750 | ||||||||||||
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CECO ENVIRONMENTAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
Dollars in thousands, except per share data
| JUNE 30, 2011 |
DECEMBER 31, 2010 |
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| Current assets: |
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| Cash and cash equivalents |
$ | 8,439 | $ | 5,792 | ||||
| Accounts receivable, net |
20,061 | 26,772 | ||||||
| Costs and estimated earnings in excess of billings on uncompleted contracts |
10,569 | 8,345 | ||||||
| Inventories, net |
5,381 | 4,432 | ||||||
| Prepaid expenses and other current assets |
2,819 | 2,509 | ||||||
| Assets held for sale |
0 | 526 | ||||||
| Current assets of discontinued operations |
67 | 76 | ||||||
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| Total current assets |
47,336 | 48,452 | ||||||
| Property and equipment, net |
5,643 | 5,880 | ||||||
| Goodwill |
14,776 | 14,713 | ||||||
| Intangibles – finite life, net |
715 | 966 | ||||||
| Intangibles – indefinite life |
3,233 | 3,225 | ||||||
| Deferred income tax asset, net |
602 | 602 | ||||||
| Deferred charges and other assets |
754 | 953 | ||||||
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| $ | 73,059 | $ | 74,791 | |||||
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| LIABILITIES AND SHAREHOLDERS’ EQUITY |
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| Current liabilities: |
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| Current debt |
$ | 317 | $ | 0 | ||||
| Accounts payable and accrued expenses |
14,337 | 17,041 | ||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts |
5,496 | 7,810 | ||||||
| Accrued income taxes |
1,158 | 1,646 | ||||||
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| Total current liabilities |
21,308 | 26,497 | ||||||
| Other liabilities |
2,322 | 2,320 | ||||||
| Convertible subordinated notes (including related parties notes of $3,950) |
10,600 | 10,800 | ||||||
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| Total liabilities |
34,230 | 39,617 | ||||||
| Shareholders’ equity: |
— | — | ||||||
| Preferred Stock, $.01 par value; 10,000 shares authorized, none issued |
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| Common stock, $0.01 par value; 100,000,000 shares authorized, 14,479,917 and 14,456,659 shares issued in 2011 and 2010, respectively |
145 | 144 | ||||||
| Capital in excess of par value |
43,463 | 43,237 | ||||||
| Accumulated deficit |
(3,032 | ) | (6,243 | ) | ||||
| Accumulated other comprehensive loss |
(1,391 | ) | (1,608 | ) | ||||
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| 39,185 | 35,530 | |||||||
| Less treasury stock, at cost, 137,920 shares in 2011 and 2010 |
(356 | ) | (356 | ) | ||||
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| Total shareholders’ equity |
38,829 | 35,174 | ||||||
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| $ | 73,059 | $ | 74,791 | |||||
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This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to certain risks, uncertainties and assumptions. These risks and uncertainties, which are more fully described in CECO’s Annual and Quarterly Reports filed with the Securities and Exchange Commission, and
include, but are not limited to: our dependence on fixed price contracts and the risks associated therewith, including actual costs exceeding our estimates and our method of accounting for contract revenue; our history of losses and possibility of further losses; fluctuations in operating results from period to period due to seasonality of our business; the effect of growth on our infrastructure, resources, and existing sales; our ability to expand our operations in both new and existing markets; the potential for contract delay or cancellation; the potential for fluctuations in prices for manufactured components and raw materials; the impact of federal, state or local government regulations; economic and political conditions generally; and the effect of competition in the air pollution control and industrial ventilation industry. 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. We caution investors that other factors might, in the future, prove to be important in affecting our results of operations. New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Investors are further 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. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise.