May 9, 2007
CECO ENVIRONMENTAL REPORTS
RECORD FIRST QUARTER 2007 RESULTS
Revenues Increase 78%
Operating Income Increases 258%
NEW YORK, May 9, 2007 -
CECO Environmental Corp (NASDAQ: CECE), a leading provider of
industrial ventilation and pollution control systems, today announced record
first quarter results for the period ended March 31, 2007.
Financial highlights for the first quarter of 2007 compared to the first quarter
of 2006 include:
- Net sales increased $19.1 million or 78% from $24.4 million to $43.5 million;
- Gross profit increased $3.7 million or 90% from $4.1 million to $7.8 million;
- Operating income increased 258% from $696,000 to $2.5 million;
- Net income increased $1.9 million to $1.1 million as compared to a loss of $736,000; and
- Earnings per diluted share were $0.08 compared to a loss of $(0.07) per diluted share.
Backlog as of March 31, 2007 was $119.8 million compared to $97.1 million as of
December 31, 2006.
Chairman and CEO, Phillip DeZwirek, stated, "We are delighted to see our momentum
continue into the new fiscal year. Our first quarter results mark our fifth
consecutive quarter of record revenues and gross profitability compared to the
corresponding comparable quarter in prior years."
Mr. DeZwirek continued, "We believe this performance further demonstrates the
success of our strategy of horizontal integration, whether by acquisition or
organic new business start-ups, and vertical integration into our family of
companies, to become a leading turnkey solution provider to the industrial
ventilation and air pollution control market. We believe this is a distinct
competitive advantage for us because customers desire a single source of
responsibility, which we believe greatly simplifies our customers' experience
while providing them with access to a broad selection of products and services
to meet their needs."
Net sales for the first quarter increased 78% to $43.5 million. The comparative
quarter-over-quarter growth in net sales was attributable to growth across
substantially all of CECO's products and services. Most notably, CECO experienced
a large increase in contracting sales due to revenues generated by its H.M. White
subsidiary, which was integrated into the CECO family in 2006. Additionally, CECO's
equipment sales grew due to the continuation of the expansion in the ethanol industry
and the addition of one month of revenue from Effox.
"We believe this growth will continue in 2007 as customers continue to look for a
complete one-stop solution provider. We recently received thirteen new orders
totaling approximately $9.9 million that were secured by our Effox, Kirk & Blum,
CECO Abatement and Busch International subsidiaries," said Rick Blum, President and
Chief Operating Officer. Mr. Blum continued, "Our bookings run rate continues to be
well ahead of last year's. As of today, new bookings for the year stood at
approximately $74.5 million."
Gross profits in the first quarter increased 90% to $7.8 million compared to $4.1
million in 2006. Gross profit as a percent of net sales increased from 17.0% in
2006 to 18.0% in 2007. This increase was primarily the result of changes in product
mix related to the significant increase in turnkey system sales and the addition of
Effox to CECO's equipment group. Dennis Blazer, CFO, stated, "Our strategy is to
continue to pursue business opportunities that continue to enhance our overall
profitability."
Operating income was $2.5 million, or 5.7% of net sales, for the first quarter of
2007 compared to $696,000, or 2.9%, for the same period in 2006. The quarter over
quarter and resulting year over year increases in operating income and operating
margin are areas of focus for CECO. Mr. Blazer commented, "The increase in operating
margin is a result of our ability to leverage our current base of fixed operating
costs and a more favorable product mix."
CECO will host a conference call on Thursday, May 10, 2007 at 8:30 a.m. EDT to
review its financial results for the quarter. Additional details, including the
call in number, have been released separately.
CECO Environmental Corp. |
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Consolidated Statements of Operations |
(In thousands, except share and per share data) |
(unaudited) |
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Three months ended |
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3/31/2006 |
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3/31/2007 |
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Net sales |
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$ 24,382 |
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$ 43,463 |
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Cost of sales |
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20,249 |
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35,626 |
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Gross Profit |
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4,133 |
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7,837 |
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Selling & Administrative |
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3,145 |
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5,017 |
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Depreciation & amortization |
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292 |
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326 |
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Operating income |
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696 |
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2,494 |
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Other income (expense) |
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(1,080) |
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3 |
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Interest expense |
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(571) |
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(558) |
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Income (loss) before tax |
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(955) |
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1,939 |
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Income tax expense (benefit) |
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(219) |
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795 |
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Net income (loss) |
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$ (736) |
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$ 1,144 |
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Per share data |
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Net income (loss) per basic share |
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$(0.07) |
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$0.10 |
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Net income (loss) per diluted share |
$(0.07) |
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$0.08 |
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Weighted average shares outstanding |
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Basic |
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10,913,503 |
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11,494,948 |
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Diluted |
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10,913,503 |
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13,487,849 |
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