Reports Record First Quarter Revenue and Gross Margins, Near Record BacklogReaffirms Full Year 2024 Guidance DALLAS, April 30, 2024 (GLOBE NEWSWIRE) -- CECO Environmental Corp. (NASDAQ:CECO) ("CECO"), a leading environmentally focused, diversified industrial company whose solutions protect people, the environment, and industrial equipment, today reported its financial results for the first quarter results of 2024. First Quarter Summary(1) Orders of $145.3 million Backlog of $389.5 million, up 9 percent Revenue of $126.3 million, up 12 percent Net income of $1.5 million, down 25 percent; non-GAAP net income of $4.0 million, up 11 percent GAAP EPS (diluted) of $0.04; non-GAAP EPS (diluted) of $0.11 Adjusted EBITDA of $13.2 million, up 36 percent Free cash flow of $(1.9) million, up $12.6 million (1) All comparisons are versus the comparable prior year period, unless otherwise stated.Reconciliations of GAAP (reported) to non-GAAP measures are in the attached financial tables. "We started 2024 by delivering a solid first quarter which puts us in strong position in terms of our full year outlook. The quarter was highlighted by record gross margins, which we believe demonstrates our ongoing progress driving operational excellence programs and steadily advancing and diversifying our overall portfolio. Our book-to-bill ratio of 1.2 increased our backlog to near record levels, and our sales and adjusted EBITDA were each first quarter records. Additionally, we repurchased $3 million of stock during the quarter as part of our disciplined capital allocation strategy," said CECO Chief Executive Officer, Todd Gleason. "I continue to be pleased with our operating model which is producing high quality results balanced across our highly diversified businesses." First quarter operating income was $7.7 million, up $2.2 million or 40 percent when compared to $5.5 million in the first quarter 2023. On an adjusted basis, non-GAAP operating income was $10.2 million, up $2.5 million or 32 percent when compared to $7.7 million in the first quarter of 2023. Net income was $1.5 million in the quarter, compared to $2.0 million in the first quarter 2023. Non-GAAP net income was $4.0 million, up $0.4 million or 11 percent when compared to $3.6 million in the first quarter 2023. Adjusted EBITDA of $13.2 million, reflecting a margin of 10.5 percent, was up 36 percent compared to $9.7 million in the first quarter 2023. Free cash flow in the quarter was $(1.9) million, up $12.6 million compared to $(14.5) million in the first quarter of 2023. "We enter the second quarter with a near record backlog, and most importantly, our largest and most balanced sales pursuit pipeline. Additionally, our pipeline contains a series of potentially record-sized energy transition opportunities that we believe we are well positioned to capture in the coming quarters. Lastly, our programmatic M&A process has replenished our transaction funnel with attractive, strategic, growth businesses, which we would be able to fund with our strong balance sheet," added Gleason. Company Reaffirms 2024 Full Year Guidance The Company is maintaining its 2024 full year revenue guidance of $590 to $610 million, up approximately 10% year over year at the midpoint, Adjusted EBITDA guidance to $67 to $70 million, up approximately 20% year over year at the midpoint, and free cash flow of 50% to 70% of Adjusted EBITDA. "We are reaffirming our full year 2024 outlook – which we raised in early March. Our large sales pipeline, including the previously stated energy transition opportunities, coupled with potential additions from our continued M&A process, gives us a high conviction in our outlook and additional opportunities for sustainable growth," concluded Gleason. EARNINGS CONFERENCE CALL A conference call is scheduled for today at 8:30 a.m. ET to discuss the first quarter 2024 financial results. Please visit the Investor Relations portion of the website (https://investors.cecoenviro.com) to listen to the call via webcast. The conference call may also be accessed by visiting https://edge.media-server.com/mmc/p/bxvjrmgc. A replay of the conference call will be available on the Company's website for a period of one year. The replay may also be accessed by visiting https://edge.media-server.com/mmc/p/bxvjrmgc. ABOUT CECO ENVIRONMENTAL CECO Environmental is a leading environmentally focused, diversified industrial company, serving the broad landscape of industrial air, industrial water and energy transition markets globally providing innovative solutions and application expertise. CECO helps companies grow their business with safe, clean, and more efficient solutions that help protect people, the environment and industrial equipment. CECO solutions improve air and water quality, optimize emissions management, and increase energy efficiency for highly-engineered applications in power generation, midstream and downstream hydrocarbon processing and transport, electric vehicle production, polysilicon fabrication, semiconductor and electronics, battery production and recycling, specialty metals and steel production, beverage can, and water/wastewater treatment and a wide range of other industrial end markets. CECO is listed on Nasdaq under the ticker symbol "CECO." Incorporated in 1966, CECO's global headquarters is in Dallas, Texas. For more information, please visit www.cecoenviro.com. Company Contact:Peter JohanssonChief Financial and Strategy Officer Investor Relations Contact: Steven Hooser and Jean Marie YoungThree Part Advisors, CECO ENVIRONMENTAL CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS   (in thousands, except per share data)   (unaudited) March 31, 2024     December 31,2023   ASSETS             Current assets:             Cash and cash equivalents   $ 46,557     $ 54,779   Restricted cash     471       669   Accounts receivable, net allowances of $6,023 and $6,460     116,647       112,733   Costs and estimated earnings in excess of billings on uncompleted contracts     58,541       66,574   Inventories, net     38,032       34,089   Prepaid expenses and other current assets     10,620       11,769   Prepaid income taxes     741       824   Total current assets     271,609       281,437   Property, plant and equipment, net     27,743       26,237   Right-of-use assets from operating leases     15,095       16,256   Goodwill     211,479       211,326   Intangible assets – finite life, net     48,324       50,461   Intangible assets – indefinite life     9,558       9,570   Deferred income taxes     291       304   Deferred charges and other assets     4,921       4,700   Total assets   $ 589,020     $ 600,291   LIABILITIES AND SHAREHOLDERS' EQUITY             Current liabilities:             Current portion of debt   $ 10,580     $ 10,488   Accounts payable     79,061       87,691   Accrued expenses     46,195       44,301   Billings in excess of costs and estimated earnings on uncompleted contracts     58,158       56,899   Notes payable     1,500       2,500   Income taxes payable     816       1,227   Total current liabilities     196,310       203,106   Other liabilities     11,479       12,644   Debt, less current portion     125,070       126,795   Deferred income tax liability, net     9,519       8,838   Operating lease liabilities     10,490       11,417   Total liabilities     352,868       362,800   Commitments and contingencies (See Note 14)             Shareholders' equity:             Preferred stock, $.01 par value; 10,000 shares authorized, none issued     —       —   Common stock, $.01 par value; 100,000,000 shares authorized, 34,908,330 and 34,835,293 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively     349       348   Capital in excess of par value     251,673       254,956   Accumulated loss     (4,879 )     (6,387 ) Accumulated other comprehensive loss     (15,620 )     (16,274 ) Total CECO shareholders' equity     231,523       232,643   Noncontrolling interest     4,629       4,848   Total shareholders' equity