Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2022 | |
Cover [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2022 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | Q2 |
Trading Symbol | CECE |
Entity Registrant Name | CECO ENVIRONMENTAL CORP. |
Entity Central Index Key | 0000003197 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Accelerated Filer |
Entity Current Reporting Status | Yes |
Entity File Number | 0-07099 |
Entity Tax Identification Number | 13-2566064 |
Entity Address, Address Line One | 14651 North Dallas Parkway |
Entity Address, Address Line Two | Suite 500 |
Entity Address, City or Town | Dallas |
Entity Address, State or Province | TX |
Entity Address, Postal Zip Code | 75254 |
City Area Code | 214 |
Local Phone Number | 357-6181 |
Entity Interactive Data Current | Yes |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Document Transition Report | false |
Document Quarterly Report | true |
Entity Shell Company | false |
Title of 12(b) Security | Common Stock, par value $0.01 per share |
Security Exchange Name | NASDAQ |
Entity Incorporation, State or Country Code | DE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 34,416 | $ 29,902 |
Restricted cash | 1,037 | 2,093 |
Accounts receivable, net | 95,318 | 74,991 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 51,158 | 51,429 |
Inventories, net | 23,981 | 17,052 |
Prepaid expenses and other current assets | 11,911 | 10,760 |
Prepaid income taxes | 893 | 2,784 |
Total current assets | 218,714 | 189,011 |
Property, plant and equipment, net | 16,357 | 15,948 |
Right-of-use assets from operating leases | 12,144 | 10,893 |
Goodwill | 185,795 | 161,183 |
Intangible assets – finite life, net | 35,794 | 25,841 |
Intangible assets – indefinite life | 9,494 | 9,629 |
Deferred income taxes | 505 | 505 |
Deferred charges and other assets | 2,926 | 3,187 |
Total assets | 481,729 | 416,197 |
Current liabilities: | ||
Total current liabilities | 144,024 | 116,685 |
Current portion of debt | 3,303 | 2,203 |
Accounts payable and accrued expenses | 101,233 | 84,081 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 35,896 | 28,908 |
Notes Payable Current | 500 | |
Income taxes payable | 3,092 | 1,493 |
Other liabilities | 15,122 | 14,826 |
Debt, less current portion | 92,768 | 61,577 |
Deferred income tax liability, net | 9,998 | 8,390 |
Operating lease liabilities | 9,356 | 8,762 |
Total liabilities | 271,268 | 210,240 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Preferred stock, $.01 par value; 10,000 shares authorized, none issued | 0 | 0 |
Common stock, $.01 par value; 100,000,000 shares authorized, 34,534,180 and 35,028,197 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively | 345 | 350 |
Capital in excess of par value | 250,262 | 252,989 |
Accumulated loss | (29,538) | (36,715) |
Accumulated other comprehensive loss | (15,567) | (12,070) |
Total CECO shareholders' equity | 205,502 | 204,554 |
Non-controlling interest | 4,959 | 1,403 |
Total shareholders' equity | 210,461 | 205,957 |
Total liabilities and shareholders' equity | $ 481,729 | $ 416,197 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 34,534,180 | 35,028,197 |
Common Stock, shares outstanding | 34,534,180 | 35,028,197 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Net sales | $ 105,375 | $ 78,680 | $ 197,811 | $ 150,572 |
Cost of sales | 73,700 | 53,426 | 139,708 | 100,910 |
Gross profit | 31,675 | 25,254 | 58,103 | 49,662 |
Selling and administrative expenses | 22,988 | 20,510 | 41,640 | 39,965 |
Amortization and earnout expenses | 1,450 | 2,282 | 2,900 | 4,072 |
Restructuring expenses | 0 | 280 | 73 | 280 |
Acquisition and integration expenses | 1,491 | 37 | 2,540 | 146 |
(Loss) income from operations | 5,746 | 2,145 | 10,950 | 5,199 |
Other income (expense), net | 1,936 | (860) | 1,478 | (1,339) |
Interest expense | (1,098) | (704) | (1,920) | (1,430) |
Income before income taxes | 6,584 | 581 | 10,508 | 2,430 |
Income tax expense | 1,860 | 199 | 2,972 | 750 |
Net income | 4,724 | 382 | 7,536 | 1,680 |
Non-controlling interest | 339 | 89 | 356 | 206 |
Net (loss) income attributable to CECO Environmental Corp. | $ 4,385 | $ 293 | $ 7,180 | $ 1,474 |
(Loss) earnings per share: | ||||
Basic | $ 0.13 | $ 0.01 | $ 0.21 | $ 0.04 |
Diluted | $ 0.13 | $ 0.01 | $ 0.20 | $ 0.04 |
Weighted average number of common shares outstanding: | ||||
Basic | 34,873,238 | 35,491,725 | 34,961,645 | 35,444,477 |
Diluted | 35,041,152 | 35,819,269 | 35,119,685 | 35,797,001 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 4,724 | $ 382 | $ 7,536 | $ 1,680 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation (loss) gain | (2,966) | 290 | (3,497) | 345 |
Comprehensive income | $ (1,758) | $ 672 | $ 4,039 | $ 2,025 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Capital in Excess of Par Value [Member] | Accumulated Loss [Member] | Accumulated Other Comprehensive Loss [Member] | Treasury Stock [Member] | Noncontrolling Interest [Member] |
Beginning Balance at Dec. 31, 2020 | $ 203,611 | $ 355 | $ 255,296 | $ (38,141) | $ (14,496) | $ (356) | $ 953 |
Beginning Balance, Shares at Dec. 31, 2020 | 35,505,000 | (138,000) | |||||
Net income | 1,298 | 1,181 | 117 | ||||
Exercise of stock options | 13 | 13 | |||||
Exercise of stock options, Shares | 2,000 | ||||||
Restricted stock units issued | (133) | $ (1) | (134) | ||||
Restricted stock units issued, Shares | 40,000 | ||||||
Share based compensation earned | 807 | 807 | |||||
Share based compensation earned, Shares | 21,000 | ||||||
Translation gain (loss) | 55 | 55 | |||||
Ending Balance at Mar. 31, 2021 | 205,651 | $ 356 | 255,982 | (36,960) | (14,441) | $ (356) | 1,070 |
Ending Balance, Shares at Mar. 31, 2021 | 35,568,000 | (138,000) | |||||
Beginning Balance at Dec. 31, 2020 | 203,611 | $ 355 | 255,296 | (38,141) | (14,496) | $ (356) | 953 |
Beginning Balance, Shares at Dec. 31, 2020 | 35,505,000 | (138,000) | |||||
Net income | 1,680 | ||||||
Translation gain (loss) | 345 | ||||||
Ending Balance at Jun. 30, 2021 | 206,833 | $ 357 | 256,598 | (36,667) | (14,151) | $ (356) | 1,052 |
Ending Balance, Shares at Jun. 30, 2021 | 35,749,000 | (138,000) | |||||
Beginning Balance at Mar. 31, 2021 | 205,651 | $ 356 | 255,982 | (36,960) | (14,441) | $ (356) | 1,070 |
Beginning Balance, Shares at Mar. 31, 2021 | 35,568,000 | (138,000) | |||||
Net income | 382 | 293 | 89 | ||||
Restricted stock units issued | (270) | $ (1) | (271) | ||||
Restricted stock units issued, Shares | 181,000 | ||||||
Share based compensation earned | 887 | 887 | |||||
Translation gain (loss) | 290 | 290 | |||||
Noncontrolling interest distribution | (107) | 107 | |||||
Ending Balance at Jun. 30, 2021 | 206,833 | $ 357 | 256,598 | (36,667) | (14,151) | $ (356) | 1,052 |
Ending Balance, Shares at Jun. 30, 2021 | 35,749,000 | (138,000) | |||||
Beginning Balance at Dec. 31, 2021 | 205,957 | $ 350 | 252,989 | (36,715) | (12,070) | $ 0 | 1,403 |
Beginning Balance, Shares at Dec. 31, 2021 | 35,028,000 | 0 | |||||
Net income | 2,810 | 2,792 | 18 | ||||
Restricted stock units issued | (67) | (67) | |||||
Restricted stock units issued, Shares | 34,000 | ||||||
Share based compensation earned | 953 | 953 | |||||
Share based compensation earned, Shares | 14,000 | ||||||
Translation gain (loss) | (531) | (531) | |||||
Noncontrolling interest distribution | (900) | (900) | |||||
Fair value of noncontrolling interest equity (see Note 14) | (5,000) | (5,000) | |||||
Ending Balance at Mar. 31, 2022 | 213,222 | $ 350 | 253,875 | (33,923) | (12,601) | $ 0 | 5,521 |
Ending Balance, Shares at Mar. 31, 2022 | 35,076,000 | 0 | |||||
Beginning Balance at Dec. 31, 2021 | 205,957 | $ 350 | 252,989 | (36,715) | (12,070) | $ 0 | 1,403 |
Beginning Balance, Shares at Dec. 31, 2021 | 35,028,000 | 0 | |||||
Net income | 7,536 | ||||||
Translation gain (loss) | (3,497) | ||||||
Common stock repurchase and retirement (see Note 8) | $ (4,300) | ||||||
Common stock repurchase and retirement (see Note 8), Shares | 725,000 | ||||||
Ending Balance at Jun. 30, 2022 | $ 210,461 | $ 345 | 250,262 | (29,538) | (15,567) | $ 0 | 4,959 |
Ending Balance, Shares at Jun. 30, 2022 | 34,534,000 | 0 | |||||
Beginning Balance at Mar. 31, 2022 | 213,222 | $ 350 | 253,875 | (33,923) | (12,601) | $ 0 | 5,521 |
Beginning Balance, Shares at Mar. 31, 2022 | 35,076,000 | 0 | |||||
Net income | 4,724 | 4,385 | 339 | ||||
Restricted stock units issued | (209) | $ (2) | (211) | ||||
Restricted stock units issued, Shares | 183,000 | ||||||
Share based compensation earned | 915 | 915 | |||||
Translation gain (loss) | (2,966) | (2,966) | |||||
Fair value of noncontrolling interest equity (see Note 14) | (901) | 901 | |||||
Common stock repurchase and retirement (see Note 8) | (4,324) | $ (7) | (4,317) | ||||
Common stock repurchase and retirement (see Note 8), Shares | (725,000) | ||||||
Ending Balance at Jun. 30, 2022 | $ 210,461 | $ 345 | $ 250,262 | $ (29,538) | $ (15,567) | $ 0 | $ 4,959 |
Ending Balance, Shares at Jun. 30, 2022 | 34,534,000 | 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 7,536 | $ 1,680 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 4,668 | 4,906 |
Unrealized foreign currency loss | (5) | (1,628) |
Fair value adjustment to earnout liabilities | 0 | 500 |
Earnout payments | (1,007) | 0 |
Gain on sale of property and equipment | (7) | (67) |
Debt discount amortization | 187 | 203 |
Share-based compensation expense | 1,792 | 1,581 |
Bad debt expense | 441 | 110 |
Inventory reserve expense | 110 | 209 |
Changes in operating assets and liabilities, net of divestitures: | ||
Accounts receivable | (18,582) | (2,638) |
Costs and estimated earnings in excess of billings on uncompleted contracts | 597 | (1,319) |
Inventories | (3,393) | (409) |
Prepaid expense and other current assets | 637 | 3,642 |
Deferred charges and other assets | 2,472 | (496) |
Accounts payable and accrued expenses | 16,538 | (2,784) |
Billings in excess of costs and estimated earnings on uncompleted contracts | 7,846 | (1,490) |
Income taxes payable | 1,266 | (508) |
Other liabilities | (2,405) | (639) |
Net cash provided by operating activities | 18,691 | 4,109 |
Cash flows from investing activities: | ||
Acquisitions of property and equipment | (1,432) | (997) |
Net proceeds from sale of assets | 7 | 534 |
Net cash paid for acquisition | (37,372) | 0 |
Net cash used in investing activities | (38,797) | (463) |
Cash flows from financing activities: | ||
Borrowings on revolving credit lines | 47,600 | 18,200 |
Repayments on revolving credit lines | (24,900) | (22,300) |
Borrowings on long-term debt | 11,000 | 0 |
Repayments of long-term debt | (1,469) | (1,250) |
Deferred financing fees paid | (130) | 0 |
Payments on finance leases and financing liability | (293) | (271) |
Additional earnout payments | 0 | (823) |
Proceeds from employee stock purchase plan and exercise of stock options | 71 | 128 |
Noncontrolling interest distributions | (900) | (107) |
Common stock repurchase | (4,324) | 0 |
Net cash (used in) provided by financing activities | 26,655 | (6,423) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (3,091) | (514) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 3,458 | (3,291) |
Cash, cash equivalents and restricted cash at beginning of period | 31,995 | 37,811 |
Cash, cash equivalents and restricted cash at end of period | 35,453 | 34,520 |
Cash paid (received) during the period for: | ||
Interest | 1,821 | 1,122 |
Income taxes | $ 970 | $ (3,006) |
Basis of Reporting for Consolid
Basis of Reporting for Consolidated Financial Statements | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Reporting for Consolidated Financial Statements | 1. Basis of Reporting for Consolidated Financial Statements The accompanying unaudited condensed consolidated financial statements of CECO Environmental Corp. and its subsidiaries (the “Company,” “CECO,” “we,” “us,” or “our”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to those rules and regulations. In the opinion of management, the accompanying unaudited condensed consolidated financial statements of the Company contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position as of June 30, 2022 and the results of operations, cash flows and shareholders’ equity for the three-month and six-month periods ended June 30, 2022 and 2021. The results of operations for the three-month and six-month periods ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year. The balance sheet as of December 31, 2021 has been derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the SEC on March 14, 2022 (the “Form 10-K”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These financial statements and accompanying notes should be read in conjunction with the audited financial statements and the notes thereto included in the Form 10-K. Unless otherwise indicated, all balances within tables are in thousands, except per share amounts. COVID-19 A novel strain of coronavirus (“COVID-19”) surfaced in late 2019 and has spread around the world, including to the United States. In March 2020, the World Health Organization characterized COVID-19 as a pandemic. As of June 30, 2022, the virus, including new emerging variants, continues to spread and has had a significant impact on worldwide economic activity, on macroeconomic conditions and the end markets of our business. The outbreak and a continued spread of COVID-19 has resulted in a substantial curtailment of business activities worldwide and has caused weakened economic conditions, both in the United States and abroad. Although vaccines are available in various countries where we operate, it is possible the COVID-19 pandemic may continue to have a negative impact on the Company's ongoing operations and the end markets in which it serves. However, the full impact of the COVID-19 pandemic continues to evolve as of the date of this filing, and as such, it is uncertain as to the full magnitude or lasting impact that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the pandemic on its financial condition, liquidity, operations, suppliers, industry, and workforce. |
New Financial Accounting Pronou
New Financial Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
New Financial Accounting Pronouncements | 2. New Financial Accounting Pronouncements Accounting Standards adopted in Fiscal 2022 None. Accounting Standards to be Adopted In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which addresses how an acquirer should recognize and measure revenue contracts acquired in a business combination. This ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position and/or results of operations. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2022 | |
Receivables [Abstract] | |
Accounts Receivable | 3. Accounts Receivable (table only in thousands) June 30, 2022 December 31, 2021 Contract receivables $ 75,841 $ 65,932 Trade receivables 23,285 12,537 Allowance for doubtful accounts ( 3,808 ) ( 3,478 ) Total accounts receivable $ 95,318 $ 74,991 Balances billed but not paid by customers under retainage provisions in contracts within the Condensed Consolidated Balance Sheets amounted to approximately $ 1.6 million and $ 1.8 million at June 30, 2022 and December 31, 2021, respectively. Retainage receivables on contracts in progress are generally collected within a year or two subsequent to contract completion, and are recorded in either accounts receivable, net or deferred charges and other assets within the Condensed Consolidated Balance Sheets depending on timing of expected collection. Bad debt expense was approximately $ 0.4 million and $ 0.1 million for the three-month periods ended June 30, 2022 and 2021, respectively, and $ 0.4 million and $ 0.1 million for the six-month periods ended June 30, 2022 and 2021, respectively. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | 4. Inventories (table only in thousands) June 30, 2022 December 31, 2021 Raw materials $ 17,607 $ 13,405 Work in process 6,738 5,147 Finished goods 2,439 674 Obsolescence allowance ( 2,803 ) ( 2,174 ) Total inventories $ 23,981 $ 17,052 Amounts credited to the allowance for obsolete inventory and charged to cost of sales amounted to ( $ 0.1 ) million and $ 0.1 million for the three-month periods ended June 30, 2022 and 2021, and $ 0.1 million and $ 0.2 million for the six-month periods ended June 30, 2022 and 2021, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 5. Goodwill and Intangible Assets (table only in thousands) Six months ended June 30, 2022 Year ended December 31, 2021 Goodwill / Tradename Goodwill Tradename Goodwill Tradename Beginning balance $ 161,183 $ 9,629 $ 161,820 $ 12,937 Acquisitions 25,680 — — — Transfers to finite life classification — — — ( 3,150 ) Foreign currency translation ( 1,068 ) ( 135 ) ( 637 ) ( 158 ) $ 185,795 $ 9,494 $ 161,183 $ 9,629 (table only in thousands) As of June 30, 2022 As of December 31, 2021 Intangible assets – finite life Cost Accum. Amort. Cost Accum. Amort. Technology $ 14,457 $ 14,371 $ 14,457 $ 13,704 Customer lists 85,289 55,658 73,199 53,970 Tradename 10,918 3,179 9,728 2,745 Foreign currency adjustments ( 1,895 ) ( 233 ) ( 2,149 ) ( 1,025 ) $ 108,769 $ 72,975 $ 95,235 $ 69,394 Activity for the six-months ended June 30, 2022 and 2021 is as follows: (table only in thousands) 2022 2021 Intangible assets – finite life, net at beginning of period $ 25,841 $ 29,637 Amortization expense ( 2,789 ) ( 3,359 ) Transfers from indefinite life classification — 3,150 Acquisition 13,280 — Foreign currency adjustments ( 538 ) ( 59 ) Intangible assets – finite life, net at end of period $ 35,794 $ 29,369 Amortization expense of finite life intangible assets was $ 1.5 million and $ 1.7 million for the three-month periods ended June 30, 2022 and 2021, respectively and $ 2.8 million and $ 3.4 million for the six-month periods ended June 30, 2022 and 2021, respectively. Amortization over the next five years for finite life intangibles is expected to be $ 3.9 million for the remainder of 2022, $ 6.5 million in 2023, $ 5.6 million in 2024, $ 4.5 million in 2025, and $ 3.2 million in 2026 . The Company completes an annual (or more often if circumstances require) goodwill and indefinite life intangible asset impairment assessment on October 1. As a part of its impairment assessment, the Company first qualitatively assesses whether current events or changes in circumstances lead to a determination that it is more likely than not (defined as a likelihood of more than 50 percent) that the fair value of a reporting unit or indefinite life intangible asset is less than its carrying amount. If there is a qualitative determination that the fair value is more likely than not greater than the carrying value, the Company does not need to quantitatively test for impairment. If this qualitative assessment indicates a more likely than not potential that the asset may be impaired, the estimated fair value is calculated. If the estimated fair value is less than carrying value, an impairment charge is recorded. As of June 30, 2022, we reviewed our previous forecasts and assumptions based on our current projections, which are subject to various risks and uncertainties, including projected revenue, projected operational profit, terminal growth rates, and the cost of capital. The Company did not identify any triggering events during the three-month period ended June 30, 2022 that would require an interim impairment assessment of goodwill or intangible assets. The Company’s assumptions about future conditions important to its assessment of potential impairment of its goodwill and indefinite life intangible assets, including the impacts of the COVID-19 pandemic, are subject to uncertainty, and the Company will continue to monitor these conditions in future periods as new information becomes available, and will update its analysis accordingly. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 6 Months Ended |
Jun. 30, 2022 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | 6. Accounts Payable and Accrued Expenses (table only in thousands) June 30, 2022 December 31, 2021 Trade accounts payable, including amounts due to subcontractors $ 69,379 $ 56,242 Compensation and related benefits 6,279 6,065 Accrued warranty 3,660 3,074 Contract liabilities 5,966 4,405 Short-term lease liability 3,086 2,414 Other 12,863 11,881 Total accounts payable and accrued expenses $ 101,233 $ 84,081 |
Senior Debt
Senior Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Senior Debt | 7. Senior Debt Debt consisted of the following: (table only in thousands) June 30, 2022 December 31, 2021 Outstanding borrowings under the Credit Facility (defined below). quarterly principal installments of $ 0.6 million through September 2023, and $ 0.8 million through September 2025 and $ 1.1 million thereafter with balance due upon maturity in September 2026 . - Term loan $ 42,410 $ 43,511 - Revolving credit loan 44,700 22,000 Total outstanding borrowing under the Credit Facility 87,110 65,511 Outstanding borrowing under the joint venture term debt 10,506 — Unamortized debt discount ( 1,545 ) ( 1,731 ) Total outstanding borrowings 96,071 63,780 Less: current portion ( 3,303 ) ( 2,203 ) Total debt, less current portion $ 92,768 $ 61,577 Scheduled principal payments under our Credit Facility and joint venture term debt are $ 1.6 million remaining in 2022, $ 3.6 million in 2023, $ 4.9 million in 2024, $ 5.2 million in 2025, $ 78.4 million in 2026, and $ 3.9 million in 2027. Credit Facility As of June 30, 2022 and December 31, 2021, $ 20.7 million and $ 14.5 million of letters of credit were outstanding, respectively. Total unused credit availability under the Company’s senior secured term loan and senior secured revolver loan with sub-facilities for letters of credit, swing-line loans and senior secured multi-currency loans (the "Credit Facility") was $ 62.4 million and $ 45.9 million at June 30, 2022 and December 31, 2021, respectively. Revolving loans may be borrowed, repaid and reborrowed until December 17, 2026, at which time all outstanding balances of the Credit Facility must be repaid. At the Company’s option, revolving loans and the term loans accrue interest at a per annum rate based on either the highest of (a) the federal funds rate plus 0.5 %, (b) the Agent’s prime lending rate, (c) Daily Simple SOFR plus the Daily Simple SOFR Adjustment of 0.11448 % plus 1.0%, or (d) 1.0%, plus a margin ranging from 1.75 % to 2.75 % depending on the Company’s Consolidated Leverage Ratio (“Base Rate”), or (d) a one/three/six-month Term SOFR Rate (as defined in the Credit Agreement) plus the Term SOFR Adjustment ranging from 0.11 % to 0.43 % p lus 1.75 % to 2.75 % depending on the Company’s Consolidated Leverage Ratio. Interest on swing line loans is the Base Rate. 3.85 % and 2.54 % at June 30, 2022 and December 31, 2021, respectively. Under the terms of the Credit Facility, the Company is required to maintain certain financial covenants, including the maintenance of a Consolidated Net Leverage Ratio (as defined in the Credit Facility). Through September 30, 2023, the maximum Consolidated Net Leverage Ratio is 3.75 , after which time it will decrease to 3.50 until the end of the term of the Credit Facility. Joint Venture Debt On March 7, 2022, our Effox-Flextor-Mader, Inc. joint venture ("EFM JV") entered into a loan agreement secured by the assets of the EFM JV in the aggregate principal amount of $ 11.0 million for the acquisition of General Rubber, LLC ("GRC"), as further described in Note 14. As of June 30, 2022, $ 10.5 million was outstanding under the loan. Principal will be paid back to the lender monthly with final installment due by February 27, 2027. Interest is accrued at the per annum rate based on EFM JV's choice of the 1/3/6 month Term SOFR rate plus 3.25%, with a floor rate of 3.75%. Interest is paid monthly on the last day of each month. The interest rate at June 30, 2022 was 3.90 %. As of June 30, 2022, the EFM JV was in compliance with all related financial and other restrictive covenants under this loan agreement. This loan balance does not impact the Company’s borrowing capacity or the financial covenants under the Credit Facility. Foreign Debt The Company has a number of bank guarantee facilities and bilateral lines of credit in various foreign countries currently supported by cash, letters of credit or pledged assets and collateral under the Credit Facility. The Credit Facility allows letters of credit and bank guarantee issuances of up to $ 65.0 million from the bilateral lines of credit secured by pledged assets and collateral under the Credit Facility. As of June 30, 2022, $ 18.6 million in bank guarantees were outstanding. In addition, a subsidiary of the Company located in the Netherlands has a Euro-denominated bank guarantee agreement secured by local assets under which $ 0.7 million in bank guarantees were outstanding as of June 30, 2022. Additionally, a subsidiary of the Company in China recently entered into a renminbi ("RMB") denominated bank guarantee agreement secured primarily by local assets. As of June 30, 2022, the borrowers of these facilities and agreements were in compliance with all related financial and other restrictive covenants. |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 8. Earnings per Share The computational components of basic and diluted earnings per share for the three-month periods ended June 30, are below. 2022 2021 (table only in thousands) (for basic and diluted earnings per share) Net income attributable to CECO Environmental Corp. $ 4,385 $ 293 Denominator Basic weighted-average shares outstanding 34,873 35,492 Common stock equivalents arising from stock options and restricted stock awards 168 327 Diluted weighted-average shares outstanding 35,041 35,819 The computational components of basic and diluted earnings per share for the six-month periods ended June 30, are below. 2022 2021 (table only in thousands) (for basic and diluted earnings per share) Net income attributable to CECO Environmental Corp. $ 7,180 $ 1,474 Denominator Basic weighted-average shares outstanding 34,962 35,444 Common stock equivalents arising from stock options and restricted stock awards 158 353 Diluted weighted-average shares outstanding 35,120 35,797 Options and restricted stock units included in the computation of diluted earnings per share are calculated using the treasury stock method. For both the three-month periods ended June 30, 2022 and 2021, 1.9 million, and for the six-month periods ended June 30, 2022 and 2021, 2.0 million and 1.7 million, respectively, of outstanding options and restricted stock units were excluded from the computation of diluted earnings per share due to their having an anti-dilutive effect. Once a restricted stock unit vests, it is included in the computation of weighted average shares outstanding for purposes of basic and diluted earnings per share. Common Stock Repurchase On May 10, 2022, the Company's Board of Directors authorized a share repurchase program under which CECO may purchase up to $ 20.0 million of its outstanding shares of common stock through April 30, 2025. The authorization permits the Company to repurchase shares in the open market, through accelerated share repurchases, block trades, 10b5-1 plans or through privately negotiated transactions in accordance with applicable laws, rules and regulations. Through June 30, 2022, the Company has repurchased and retired approximately 725,000 shares of common stock at a cost of $ 4.3 million. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | 9. Share-Based Compensation The Company accounts for share-based compensation in accordance with Accounting Standards Codification (“ASC”) Topic 718, “Compensation – Stock Compensation,” which requires the Company to recognize compensation expense for share-based awards, measured at the fair value of the awards at the grant date. The Company recognized $ 0.9 million of share-based compensation related expense during the three-month periods ended June 30, 2022 and 2021, respectively, and $ 1.8 million and $ 1.6 million during the six-month periods ended June 30, 2022 and 2021, respectively. The Company granted approximately 104,000 and 460,000 restricted stock units during the three-month periods ended June 30, 2022 and 2021, respectively, and approximately 688,000 and 460,000 restricted stock units during the six-month periods ended June 30, 2022 and 2021, respectively. There were zero and 2,000 options exercised during the six-months ended June 30, 2022 and 2021, respectively. The Company received zero and $ 13,000 in cash from employees and a non-employee director exercising options during the six-months ended June 30, 2021. The intrinsic value of options exercised during the six-months ended June 30, 2022 and 2021 was zero a nd $ 3,000 , respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes We file income tax returns in various federal, state and local jurisdictions. Tax years from 2018 forward remain open for examination by Federal authorities. Tax years from 2016 forward remain open for all significant state and foreign authorities. We account for uncertain tax positions pursuant to ASC Topic 740, “Income Taxes.” As of June 30, 2022 and December 31, 2021, the liability for uncertain tax positions totaled approximately $ 0.1 million, which is included in “Other liabilities” on our Condensed Consolidated Balance Sheets. We recognize accrued interest related to uncertain tax positions and penalties, if any, in income tax expense within the Condensed Consolidated Statements of Operations. Certain of the Company’s undistributed earnings of our foreign subsidiaries are not permanently reinvested. Since foreign earnings have already been subject to United States income tax in 2017 as a result of the 2017 Tax Cuts and Jobs Act, we intend to repatriate foreign-held cash as needed. We record deferred income tax attributable to foreign withholding taxes that would become payable should we decide to repatriate cash held in our foreign operations. As of June 30, 2022 and December 31, 2021, we have recorded deferred income taxes of approximately $ 1.5 million and $ 1.1 million, respectively, on the undistributed earnings of our foreign subsidiaries. Income tax expense was $ 1.9 million for the second quarter of 2022 and $ 3.0 million for the first six months of 2022 compared with income tax expense of $ 0.2 million for the second quarter of 2021 and $ 0.8 million for the first six months of 2021. The effective income tax rate for the second quarter of 2022 was 28.3 % compared with 34.3 % for the second quarter of 2021. The effective income tax rate for the first six months of 2022 was 28.3 % compared with 30.9 % for the first six months of 2021. The effective income tax rate for the three and six months ended June 30, 2022 is higher than the United States federal statutory rate. Our effective rate is affected by certain other permanent differences, including state income taxes, non-deductible incentive stock-based compensation and differences in tax rates among jurisdictions in which we operate. |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2022 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments | 12. Financial Instruments Our financial instruments consist primarily of investments in cash and cash equivalents, receivables and certain other assets, foreign debt and accounts payable, which approximate fair value at June 30, 2022 and December 31, 2021, due to their short-term nature or variable, market-driven interest rates. The fair value of the debt issued under the Credit Facility and joint venture term loan was $ 97.6 million and $ 65.5 million at June 30, 2022 and December 31, 2021, respectively. The fair value was determined considering market conditions, our credit worthiness and the current terms of our debt, which is considered Level 2 on the fair value hierarchy. At June 30, 2022 and December 31, 2021, the Company had cash and cash equivalents of $ 34.4 million and $ 29.9 million, respectively, of which $ 26.5 million and $ 22.6 million, respectively, was held outside of the United States, principally in the Netherlands, United Kingdom, China, and Canada. |
Commitments and Contingencies -
Commitments and Contingencies - Legal Matters | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies - Legal Matters | 13. Commitments and Contingencies – Legal Matters Asbestos cases Our subsidiary, Met-Pro Technologies LLC (“Met-Pro”), beginning in 2002, began to be named in asbestos-related lawsuits filed against a large number of industrial companies including, in particular, those in the pump and fluid handling industries. In management’s opinion, the complaints typically have been vague, general and speculative, alleging that Met-Pro, along with the numerous other defendants, sold unidentified asbestos-containing products and engaged in other related actions which caused injuries (including death) and loss to the plaintiffs. Counsel has advised that more recent cases typically allege more serious claims of mesothelioma. The Company’s insurers have hired attorneys who, together with the Company, are vigorously defending these cases. Many cases have been dismissed after the plaintiff fails to produce evidence of exposure to Met-Pro’s products. In those cases, where evidence has been produced, the Company’s experience has been that the exposure levels are low and the Company’s position has been that its products were not a cause of death, injury or loss. The Company has been dismissed from or settled a large number of these cases. Cumulative settlement payments from 2002 through June 30, 2022 for cases involving asbestos-related claims were $ 5.7 million, of which, together with all legal fees other than corporate counsel expenses, $ 5.6 million has been paid by the Company’s insurers. The average cost per settled claim, excluding legal fees, was approximately $ 44,000 . Based upon the most recent information available to the Company regarding such claims, there were a total of 256 cases pending against the Company as of June 30, 2022 (with Illinois, New York, Pennsylvania and West Virginia having the largest number of cases), as compared with 223 cases that were pending as of December 31, 2021. During the six-months ended June 30, 2022, 79 new cases were filed against the Company, and the Company was dismissed from 36 cases and settled 10 cases. Most of the pending cases have not advanced beyond the early stages of discovery, although a number of cases are on schedules leading to or scheduled for trial. The Company believes that its insurance coverage is adequate for the cases currently pending against the Company and for the foreseeable future, assuming a continuation of the current volume, nature of cases and settlement amounts. However, the Company has no control over the number and nature of cases that are filed against it, nor as to the financial health of its insurers or their position as to coverage. The Company also presently believes that none of the pending cases will have a material adverse impact upon the Company’s results of operations, liquidity or financial condition. Other The Company is also a party to routine contract and employment-related litigation matters, warranty claims and routine audits of state and local tax returns arising in the ordinary course of its business. The final outcome and impact of open matters, and related claims and investigations that may be brought in the future, are subject to many variables, and cannot be predicted. In accordance with ASC 450, “Contingencies,” and related guidance, we record accruals for estimated losses relating to claims and lawsuits when available information indicates that a loss is probable and the amount of the loss, or range of loss, can be reasonably estimated. The Company expenses legal costs as they are incurred. We are not aware of any pending claims or assessments, other than as described above, which may have a material adverse impact on our liquidity, financial position, results of operations, or cash flows. |
Acquisitions and Joint Ventures
Acquisitions and Joint Ventures | 6 Months Ended |
Jun. 30, 2022 | |
Business Combinations [Abstract] | |
Acquisitions and Joint Ventures | 14. Acquisitions and Joint Ventures General Rubber LLC On March 7, 2022, the Company, through the EFM JV, acquired 100 % of the equity interests of General Rubber LLC ("GRC") for $ 19.7 million in cash, which was financed with a combination of a draw on the Company's revolving credit facility and issuance of term debt by the EFM JV (see Note 7). As additional consideration, the former owners were issued 10 % of the equity interest in the EFM JV. The fair value ascribed to the equity interest was approximately $ 4.1 million. During the three-month period ended June 30, 2022, we recorded an adjustment of $ 0.9 million to the fair value of the equity interest, as reflected in the Condensed Consolidated Statement of Shareholders' Equity. As of June 30, 2022, there were $ 13.7 million in current assets, $ 28.5 million in long-lived assets, and $30.5 million in total liabilities related to the EFM JV included in our Condensed Consolidated Balance Sheets. GRC engineers and manufactures non-metallic expansion joints and flow control products including rubber expansion joints, ducting expansion joints, and industrial pinch and duck bill valves, serving the industrial water and wastewater markets. The acquisition diversifies and expands our EFM JV product offerings within our Engineered Systems segment. The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of closing. (table only in thousands) Current assets (including cash of $ 137 ) $ 4,963 Property and equipment 459 Goodwill 11,120 Intangible - finite life 8,380 Total assets acquired 24,922 Current liabilities assumed ( 714 ) Deferred income tax liability ( 388 ) Net assets acquired $ 23,820 During the three and six-months ended June 30, 2022, GRC accounted for $ 3.8 million and $ 4.5 million in revenue, respectively and $ 0.5 million and $ 0.8 million, respectively of net income included in the Company’s results. Compass Water Solutions, Inc. On May 3, 2022, the Company acquired 100 % of the equity interests of Compass Water Solutions, Inc. ("Compass") for $ 9.0 million in cash, which was financed with a draw on the Company’s revolving credit facility, and $ 2.0 million in notes payable over two years. As additional consideration, the former owners are entitled to earn-out payments based upon a multiple of specified financial results through April 30, 2023. Based on projections at the acquisition date, the Company estimated the fair value of the earn-out to be $ 1.4 million. As of June 30, 2022, the earnout liability recorded in “Accounts payable and accrued expenses” on the Condensed Consolidated Balance Sheets is $ 1.4 million. Compass, is a leading global supplier of membrane-based industrial water and wastewater treatment systems that help customers achieve regulatory compliance of water discharge at the lowest lifecycle cost. The acquisition diversifies and expands our industrial water product offerings within our Engineered Systems segment. The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of closing. (table only in thousands) Current assets (including cash of $ 334 ) $ 4,796 Property and equipment 101 Goodwill 4,848 Intangible - finite life 4,900 Total assets acquired 14,645 Current liabilities assumed ( 623 ) Deferred income tax liability ( 1,627 ) Net assets acquired $ 12,395 During the three and six-months ended June 30, 2022, Compass accounted for $0.8 million in revenue, and $0.1 million of net loss included in the Company’s results. Western Air Ducts Ltd. On June 22, 2022, the Company acquired 100 % of the equity interests of Western Air Ducts Limited for $ 10.7 million in cash, which was financed with a draw on the Company’s revolving credit facility, and deferred cash consideration of $ 0.8 million payable in one year. The deferred consideration is recorded in “Accounts payable and accrued expenses” on the Condensed Consolidated Balance Sheets. Western Air Ducts is a leading European supplier of dust and fume extraction solutions, providing consultation, design, manufacturing, installation, and service. The acquisition diversifies and expands our industrial air product offerings within our Industrial Process Solutions segment. The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of closing. (table only in thousands) Current assets (including cash of $ 1,557 ) $ 2,711 Property and equipment 188 Goodwill 9,712 Total assets acquired 12,611 Current liabilities assumed ( 1,127 ) Deferred income tax liability ( 34 ) Net assets acquired $ 11,450 The approximate fair values of the assets acquired and liabilities assumed related to the acquisitions are based on preliminary estimates and assumptions. These preliminary estimates and assumptions could change significantly during the purchase price measurement period as we finalize the valuation of assets acquired and liabilities assumed. These changes could result in material variances between the Company's future financial results, including variances in the estimated purchase price, fair values recorded and expenses associated with these items. Goodwill recognized represents value the Company expects to be created by combining the various operations of the acquired businesses with the Company’s operations, including the expansion into markets within existing business segments, access to new customers and potential cost savings and synergies. Goodwill related to these acquisitions is not deductible for tax purposes. Acquisition and integration expenses on the Condensed Consolidated Statements of Income are related to acquisition activities, which include retention, legal, accounting, banking, and other expenses. The following unaudited pro forma financial information represents the Company’s results of operations as if the GRC, Compass, and Western Air Ducts acquisitions had occurred on January 1, 2021: Three months ended June 30, Six months ended June 30, (table in thousands, except per share data) 2022 2021 2022 2021 Net sales $ 106,995 $ 85,828 $ 204,280 $ 164,979 Net income attributable to CECO Environmental Corp. 4,573 431 7,508 2,415 Earnings per share: Basic $ 0.13 $ 0.01 $ 0.21 $ 0.07 Diluted $ 0.13 $ 0.01 $ 0.21 $ 0.07 The pro forma results have been prepared for informational purposes only and include adjustments to amortize acquired intangible assets with finite life, reflect additional interest expense on debt used to fund the acquisition, and to record the income tax consequences of the pro forma adjustments. These pro forma results do not purport to be indicative of the results of operations that would have occurred had the purchase been made as of the beginning of the periods presented or of the results of operations that may occur in the future. |
Business Segment Information
Business Segment Information | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Business Segment Information | 15. Business Segment Information The Company’s operations are organized and reviewed by management along with its solutions or end markets that the segment serves and presented in two reportable segments. The results of the segments are reviewed through the “Income from operations” line on the Condensed Consolidated Statements of Income . The Company’s reportable segments are organized as groups of similar products and services, as described as follows: Engineered Systems segment: Our Engineered Systems segment serves the general industrial, power generation, refinery, water/wastewater, midstream oil & gas, and other energy transition markets. We are a key part of helping meet the global demand for environmental and equipment protection through our highly engineered platforms including emissions management, fluid bed cyclones, thermal acoustics, separation & filtration (gas & water), and dampers & expansion joints. Industrial Process Solutions segment: Our Industrial Process Solutions segment serves the broad industrial air pollution control, beverage can, fluid handling, electric vehicle production, food and beverage, semi-conductor, process filtration, pharmaceutical, petrochemical, wastewater treatment, wood manufacturing, desalination, and aquaculture markets. We protect the air we collectively breathe, maintain clean and safe operations for employees, lower energy consumption, minimize waste for customers, and ensure they meet regulatory compliance standards for toxic emissions, fumes, volatile organic compounds and odors through our platforms including duct & installation, industrial air, and fluid handling. The financial segment information is presented in the following tables: Three months ended June 30, Six months ended June 30, (dollars in thousands) 2022 2021 2022 2021 Net sales (less intra-, inter-segment sales) Engineered Systems segment $ 67,333 $ 43,360 $ 124,308 $ 85,417 Industrial Process Solutions segment 38,042 35,320 73,503 65,155 Net sales $ 105,375 $ 78,680 $ 197,811 $ 150,572 Three months ended June 30, Six months ended June 30, (dollars in thousands) 2022 2021 2022 2021 Income from operations Engineered Systems segment $ 9,006 $ 5,634 $ 15,476 $ 11,804 Industrial Process Solutions segment 5,482 4,441 9,621 8,263 Corporate and Other (1) ( 8,742 ) ( 7,930 ) ( 14,147 ) ( 14,868 ) Income from operations $ 5,746 $ 2,145 $ 10,950 $ 5,199 (1) Includes corporate compensation, professional services, information technology, and other general and administrative corporate expenses. Three months ended June 30, Six months ended June 30, (dollars in thousands) 2022 2021 2022 2021 Property and equipment additions Engineered Systems segment $ 27 $ 55 $ 32 $ 64 Industrial Process Solutions segment 340 172 412 362 Corporate and Other 400 278 988 571 Property and equipment additions $ 767 $ 505 $ 1,432 $ 997 Three months ended June 30, Six months ended June 30, (dollars in thousands) 2022 2021 2022 2021 Depreciation and amortization Engineered Systems segment $ 960 $ 1,070 $ 1,855 $ 2,137 Industrial Process Solutions segment 1,009 1,073 2,059 2,141 Corporate and Other 410 328 754 628 Depreciation and amortization $ 2,379 $ 2,471 $ 4,668 $ 4,906 (dollars in thousands) June 30, 2022 December 31, 2021 Identifiable assets Engineered Systems segment $ 315,743 $ 262,558 Industrial Process Solutions segment 152,689 141,975 Corporate and Other (2) 13,297 11,664 Identifiable assets $ 481,729 $ 416,197 (2) Corporate and Other assets consist primarily of cash and income tax related assets. (dollars in thousands) June 30, 2022 December 31, 2021 Goodwill Engineered Systems segment $ 114,797 $ 99,303 Industrial Process Solutions segment 70,998 61,880 Goodwill $ 185,795 $ 161,183 Intra-segment and Inter-segment Revenues The Company has multiple divisions that sell to each other within segments (intra-segment sales) and between segments (inter-segment sales) as indicated in the following tables: Three months ended June 30, 2022 Less Inter-Segment Sales (dollars in thousands) Total Intra- Industrial Process Solutions Engineered Systems Net Sales to Net sales Engineered Systems segment $ 70,754 $ ( 3,231 ) $ ( 190 ) $ — $ 67,333 Industrial Process Solutions segment 39,901 ( 1,717 ) — ( 142 ) 38,042 Net sales $ 110,655 $ ( 4,948 ) $ ( 190 ) $ ( 142 ) $ 105,375 Three months ended June 30, 2021 Less Inter-Segment Sales (dollars in thousands) Total Intra- Industrial Process Solutions Engineered Systems Net Sales to Net sales Engineered Systems segment $ 47,069 $ ( 3,513 ) $ ( 196 ) $ — $ 43,360 Industrial Process Solutions segment 41,245 ( 5,281 ) — ( 644 ) 35,320 Net sales $ 88,314 $ ( 8,794 ) $ ( 196 ) $ ( 644 ) $ 78,680 Six months ended June 30, 2022 Less Inter-Segment Sales (dollars in thousands) Total Intra- Industrial Process Solutions Engineered Systems Net Sales to Net sales Engineered Systems segment $ 132,354 $ ( 7,789 ) $ ( 257 ) $ — $ 124,308 Industrial Process Solutions segment 77,043 ( 3,342 ) — ( 198 ) 73,503 Net sales $ 209,397 $ ( 11,131 ) $ ( 257 ) $ ( 198 ) $ 197,811 Six months ended June 30, 2021 Less Inter-Segment Sales (dollars in thousands) Total Intra- Industrial Process Solutions Engineered Systems Net Sales to Net sales Engineered Systems segment $ 91,545 $ ( 5,887 ) $ ( 241 ) $ — $ 85,417 Industrial Process Solutions segment 74,178 ( 8,055 ) — ( 968 ) 65,155 Net sales $ 165,723 $ ( 13,942 ) $ ( 241 ) $ ( 968 ) $ 150,572 |
New Financial Accounting Pron_2
New Financial Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Standards Adopted in Fiscal 2021 | Accounting Standards adopted in Fiscal 2022 None. |
Accounting Standards to be Adopted | Accounting Standards to be Adopted In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which addresses how an acquirer should recognize and measure revenue contracts acquired in a business combination. This ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position and/or results of operations. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Receivables [Abstract] | |
Summary of Accounts Receivable | (table only in thousands) June 30, 2022 December 31, 2021 Contract receivables $ 75,841 $ 65,932 Trade receivables 23,285 12,537 Allowance for doubtful accounts ( 3,808 ) ( 3,478 ) Total accounts receivable $ 95,318 $ 74,991 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | (table only in thousands) June 30, 2022 December 31, 2021 Raw materials $ 17,607 $ 13,405 Work in process 6,738 5,147 Finished goods 2,439 674 Obsolescence allowance ( 2,803 ) ( 2,174 ) Total inventories $ 23,981 $ 17,052 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill / Tradename | (table only in thousands) Six months ended June 30, 2022 Year ended December 31, 2021 Goodwill / Tradename Goodwill Tradename Goodwill Tradename Beginning balance $ 161,183 $ 9,629 $ 161,820 $ 12,937 Acquisitions 25,680 — — — Transfers to finite life classification — — — ( 3,150 ) Foreign currency translation ( 1,068 ) ( 135 ) ( 637 ) ( 158 ) $ 185,795 $ 9,494 $ 161,183 $ 9,629 |
Intangible Assets - Finite Life | (table only in thousands) As of June 30, 2022 As of December 31, 2021 Intangible assets – finite life Cost Accum. Amort. Cost Accum. Amort. Technology $ 14,457 $ 14,371 $ 14,457 $ 13,704 Customer lists 85,289 55,658 73,199 53,970 Tradename 10,918 3,179 9,728 2,745 Foreign currency adjustments ( 1,895 ) ( 233 ) ( 2,149 ) ( 1,025 ) $ 108,769 $ 72,975 $ 95,235 $ 69,394 |
Summary of Finite Lived Intangible Assets Activities | Activity for the six-months ended June 30, 2022 and 2021 is as follows: (table only in thousands) 2022 2021 Intangible assets – finite life, net at beginning of period $ 25,841 $ 29,637 Amortization expense ( 2,789 ) ( 3,359 ) Transfers from indefinite life classification — 3,150 Acquisition 13,280 — Foreign currency adjustments ( 538 ) ( 59 ) Intangible assets – finite life, net at end of period $ 35,794 $ 29,369 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Payables and Accruals [Abstract] | |
Summary of Accounts Payable and Accrued Expenses | (table only in thousands) June 30, 2022 December 31, 2021 Trade accounts payable, including amounts due to subcontractors $ 69,379 $ 56,242 Compensation and related benefits 6,279 6,065 Accrued warranty 3,660 3,074 Contract liabilities 5,966 4,405 Short-term lease liability 3,086 2,414 Other 12,863 11,881 Total accounts payable and accrued expenses $ 101,233 $ 84,081 |
Senior Debt (Tables)
Senior Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Summary of Debt | Debt consisted of the following: (table only in thousands) June 30, 2022 December 31, 2021 Outstanding borrowings under the Credit Facility (defined below). quarterly principal installments of $ 0.6 million through September 2023, and $ 0.8 million through September 2025 and $ 1.1 million thereafter with balance due upon maturity in September 2026 . - Term loan $ 42,410 $ 43,511 - Revolving credit loan 44,700 22,000 Total outstanding borrowing under the Credit Facility 87,110 65,511 Outstanding borrowing under the joint venture term debt 10,506 — Unamortized debt discount ( 1,545 ) ( 1,731 ) Total outstanding borrowings 96,071 63,780 Less: current portion ( 3,303 ) ( 2,203 ) Total debt, less current portion $ 92,768 $ 61,577 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Number of Shares Outstanding for Calculation of Earnings Per Share | The computational components of basic and diluted earnings per share for the three-month periods ended June 30, are below. 2022 2021 (table only in thousands) (for basic and diluted earnings per share) Net income attributable to CECO Environmental Corp. $ 4,385 $ 293 Denominator Basic weighted-average shares outstanding 34,873 35,492 Common stock equivalents arising from stock options and restricted stock awards 168 327 Diluted weighted-average shares outstanding 35,041 35,819 The computational components of basic and diluted earnings per share for the six-month periods ended June 30, are below. 2022 2021 (table only in thousands) (for basic and diluted earnings per share) Net income attributable to CECO Environmental Corp. $ 7,180 $ 1,474 Denominator Basic weighted-average shares outstanding 34,962 35,444 Common stock equivalents arising from stock options and restricted stock awards 158 353 Diluted weighted-average shares outstanding 35,120 35,797 |
Acquisitions and Joint Ventur_2
Acquisitions and Joint Ventures (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Schedule of Unaudited Pro Forma Financial Information | The following unaudited pro forma financial information represents the Company’s results of operations as if the GRC, Compass, and Western Air Ducts acquisitions had occurred on January 1, 2021: Three months ended June 30, Six months ended June 30, (table in thousands, except per share data) 2022 2021 2022 2021 Net sales $ 106,995 $ 85,828 $ 204,280 $ 164,979 Net income attributable to CECO Environmental Corp. 4,573 431 7,508 2,415 Earnings per share: Basic $ 0.13 $ 0.01 $ 0.21 $ 0.07 Diluted $ 0.13 $ 0.01 $ 0.21 $ 0.07 |
General Rubber LLC [Member] | |
Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of closing. (table only in thousands) Current assets (including cash of $ 137 ) $ 4,963 Property and equipment 459 Goodwill 11,120 Intangible - finite life 8,380 Total assets acquired 24,922 Current liabilities assumed ( 714 ) Deferred income tax liability ( 388 ) Net assets acquired $ 23,820 |
Compass Water Solutions, Inc [Member] | |
Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of closing. (table only in thousands) Current assets (including cash of $ 334 ) $ 4,796 Property and equipment 101 Goodwill 4,848 Intangible - finite life 4,900 Total assets acquired 14,645 Current liabilities assumed ( 623 ) Deferred income tax liability ( 1,627 ) Net assets acquired $ 12,395 |
Western Air Ducts Ltd [Member] | |
Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of closing. (table only in thousands) Current assets (including cash of $ 1,557 ) $ 2,711 Property and equipment 188 Goodwill 9,712 Total assets acquired 12,611 Current liabilities assumed ( 1,127 ) Deferred income tax liability ( 34 ) Net assets acquired $ 11,450 |
Business Segment Information (T
Business Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Net Sales and Income from Operation by Business Segment | The financial segment information is presented in the following tables: Three months ended June 30, Six months ended June 30, (dollars in thousands) 2022 2021 2022 2021 Net sales (less intra-, inter-segment sales) Engineered Systems segment $ 67,333 $ 43,360 $ 124,308 $ 85,417 Industrial Process Solutions segment 38,042 35,320 73,503 65,155 Net sales $ 105,375 $ 78,680 $ 197,811 $ 150,572 Three months ended June 30, Six months ended June 30, (dollars in thousands) 2022 2021 2022 2021 Income from operations Engineered Systems segment $ 9,006 $ 5,634 $ 15,476 $ 11,804 Industrial Process Solutions segment 5,482 4,441 9,621 8,263 Corporate and Other (1) ( 8,742 ) ( 7,930 ) ( 14,147 ) ( 14,868 ) Income from operations $ 5,746 $ 2,145 $ 10,950 $ 5,199 Includes corporate compensation, professional services, information technology, and other general and administrative corporate expenses. |
Property and Equipment Additions, Depreciation and Amortization and Identifiable Assets | Three months ended June 30, Six months ended June 30, (dollars in thousands) 2022 2021 2022 2021 Property and equipment additions Engineered Systems segment $ 27 $ 55 $ 32 $ 64 Industrial Process Solutions segment 340 172 412 362 Corporate and Other 400 278 988 571 Property and equipment additions $ 767 $ 505 $ 1,432 $ 997 Three months ended June 30, Six months ended June 30, (dollars in thousands) 2022 2021 2022 2021 Depreciation and amortization Engineered Systems segment $ 960 $ 1,070 $ 1,855 $ 2,137 Industrial Process Solutions segment 1,009 1,073 2,059 2,141 Corporate and Other 410 328 754 628 Depreciation and amortization $ 2,379 $ 2,471 $ 4,668 $ 4,906 (dollars in thousands) June 30, 2022 December 31, 2021 Identifiable assets Engineered Systems segment $ 315,743 $ 262,558 Industrial Process Solutions segment 152,689 141,975 Corporate and Other (2) 13,297 11,664 Identifiable assets $ 481,729 $ 416,197 (2) Corporate and Other assets consist primarily of cash and income tax related assets. |
Goodwill | (dollars in thousands) June 30, 2022 December 31, 2021 Goodwill Engineered Systems segment $ 114,797 $ 99,303 Industrial Process Solutions segment 70,998 61,880 Goodwill $ 185,795 $ 161,183 |
Intra-Segment and Inter-Segment Revenues | The Company has multiple divisions that sell to each other within segments (intra-segment sales) and between segments (inter-segment sales) as indicated in the following tables: Three months ended June 30, 2022 Less Inter-Segment Sales (dollars in thousands) Total Intra- Industrial Process Solutions Engineered Systems Net Sales to Net sales Engineered Systems segment $ 70,754 $ ( 3,231 ) $ ( 190 ) $ — $ 67,333 Industrial Process Solutions segment 39,901 ( 1,717 ) — ( 142 ) 38,042 Net sales $ 110,655 $ ( 4,948 ) $ ( 190 ) $ ( 142 ) $ 105,375 Three months ended June 30, 2021 Less Inter-Segment Sales (dollars in thousands) Total Intra- Industrial Process Solutions Engineered Systems Net Sales to Net sales Engineered Systems segment $ 47,069 $ ( 3,513 ) $ ( 196 ) $ — $ 43,360 Industrial Process Solutions segment 41,245 ( 5,281 ) — ( 644 ) 35,320 Net sales $ 88,314 $ ( 8,794 ) $ ( 196 ) $ ( 644 ) $ 78,680 Six months ended June 30, 2022 Less Inter-Segment Sales (dollars in thousands) Total Intra- Industrial Process Solutions Engineered Systems Net Sales to Net sales Engineered Systems segment $ 132,354 $ ( 7,789 ) $ ( 257 ) $ — $ 124,308 Industrial Process Solutions segment 77,043 ( 3,342 ) — ( 198 ) 73,503 Net sales $ 209,397 $ ( 11,131 ) $ ( 257 ) $ ( 198 ) $ 197,811 Six months ended June 30, 2021 Less Inter-Segment Sales (dollars in thousands) Total Intra- Industrial Process Solutions Engineered Systems Net Sales to Net sales Engineered Systems segment $ 91,545 $ ( 5,887 ) $ ( 241 ) $ — $ 85,417 Industrial Process Solutions segment 74,178 ( 8,055 ) — ( 968 ) 65,155 Net sales $ 165,723 $ ( 13,942 ) $ ( 241 ) $ ( 968 ) $ 150,572 |
Accounts Receivable - Summary o
Accounts Receivable - Summary of Accounts Receivable (Detail) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Contract receivables | $ 75,841 | $ 65,932 |
Allowance for doubtful accounts | (3,808) | (3,478) |
Total accounts receivable | 95,318 | 74,991 |
Trade Accounts Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Trade receivables | $ 23,285 | $ 12,537 |
Accounts Receivable - Additiona
Accounts Receivable - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Receivables [Abstract] | |||||
Amount billed but not received under retainage provisions in contracts | $ 1,600 | $ 1,600 | $ 1,800 | ||
Bad debt expense | $ 400 | $ 100 | $ 441 | $ 110 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory, Net [Abstract] | ||
Raw materials | $ 17,607 | $ 13,405 |
Work in process | 6,738 | 5,147 |
Finished goods | 2,439 | 674 |
Obsolescence allowance | (2,803) | (2,174) |
Total inventories | $ 23,981 | $ 17,052 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | ||||
Amounts credited to the allowance for obsolete inventory | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.2 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill / Tradename (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill, beginning balance | $ 161,183 | $ 161,820 |
Goodwill, acquisitions and related adjustments | 25,680 | |
Goodwill, foreign currency translation | (1,068) | (637) |
Goodwill, ending balance | 185,795 | 161,183 |
Tradename, beginning balance | 9,629 | 12,937 |
Tradename, transfers to finite life classification | (3,150) | |
Tradename, Impairment charge | (135) | |
Tradename, foreign currency translation | (158) | |
Tradename, ending balance | $ 9,494 | $ 9,629 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets - Finite Life (Detail) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 108,769 | $ 95,235 |
Accumulated Amortization | 72,975 | 69,394 |
Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 14,457 | 14,457 |
Accumulated Amortization | 14,371 | 13,704 |
Customer Lists [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 85,289 | 73,199 |
Accumulated Amortization | 55,658 | 53,970 |
Tradename [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 10,918 | 9,728 |
Accumulated Amortization | 3,179 | 2,745 |
Foreign Currency Adjustments [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | (1,895) | (2,149) |
Accumulated Amortization | $ (233) | $ (1,025) |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Finite Lived Intangible Assets Amortization Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Intangible assets – finite life, net at beginning of period | $ 25,841 | $ 29,637 | ||
Amortization expense | $ (1,500) | $ (1,700) | (2,789) | (3,359) |
Transfers from indefinite life classification | 3,150 | |||
Acquisition | 13,280 | 0 | ||
Foreign currency adjustments | (538) | (59) | ||
Intangible assets – finite life, net at end of period | $ 35,794 | $ 29,369 | $ 35,794 | $ 29,369 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Schedule Of Goodwill And Other Intangible Assets [Line Items] | ||||
Amortization expense of finite life intangible assets | $ 1,500 | $ 1,700 | $ 2,789 | $ 3,359 |
Amortization expense of finite life intangibles for 2022 | 3,900 | 3,900 | ||
Amortization expense of finite life intangibles for 2023 | 6,500 | 6,500 | ||
Amortization expense of finite life intangibles for 2024 | 5,600 | 5,600 | ||
Amortization expense of finite life intangibles for 2025 | 4,500 | 4,500 | ||
Amortization expense of finite life intangibles for 2026 | $ 3,200 | $ 3,200 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses - Summary of Accounts Payable and Accrued Expenses (Detail) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Trade accounts payable, including amounts due to subcontractors | $ 69,379 | $ 56,242 |
Compensation and related benefits | 6,279 | 6,065 |
Accrued warranty | 3,660 | 3,074 |
Contract liabilities | 5,966 | 4,405 |
Short-term lease liability | 3,086 | 2,414 |
Other | 12,863 | 11,881 |
Total accounts payable and accrued expenses | $ 101,233 | $ 84,081 |
Senior Debt - Summary of Debt (
Senior Debt - Summary of Debt (Detail) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total outstanding borrowings under the Credit Facility | $ 96,071 | $ 63,780 |
Less: current portion | (3,303) | (2,203) |
Debt, less current portion | 92,768 | 61,577 |
Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Total outstanding borrowings under the Credit Facility | 42,410 | 43,511 |
Revolving Credit Loan [Member] | ||
Debt Instrument [Line Items] | ||
Revolving Credit Loan | 44,700 | 22,000 |
Senior Debt [Member] | ||
Debt Instrument [Line Items] | ||
Total outstanding borrowings under the Credit Facility | 87,110 | 65,511 |
Line Of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding borrowing under the joint venture term debt | 10,506 | 0 |
Term Debt [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized debt discount | $ (1,545) | $ (1,731) |
Senior Debt - Summary of Debt_2
Senior Debt - Summary of Debt (Parenthetical) (Detail) - Term Loan [Member] $ in Millions | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Debt Instrument [Line Items] | |
Frequency of periodic payment | quarterly |
Term loans, year of maturity | Sep. 30, 2026 |
Debt Instrument, Redemption, Through September 2025 [Member] | |
Debt Instrument [Line Items] | |
Outstanding borrowings, quarterly principal installments payable amount | $ 0.8 |
Debt Instrument, Redemption, Through June 2023 [Member] | |
Debt Instrument [Line Items] | |
Outstanding borrowings, quarterly principal installments payable amount | 0.6 |
Debt Instrument, Redemption, Thereafter [Member] | |
Debt Instrument [Line Items] | |
Outstanding borrowings, quarterly principal installments payable amount | $ 1.1 |
Senior Debt - Additional Inform
Senior Debt - Additional Information (Detail) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2022 | Mar. 07, 2022 | Dec. 31, 2021 | |
Line Of Credit Facility [Line Items] | |||
Credit facility principal payments 2022 | $ 1.6 | ||
Credit facility principal payments 2023 | 3.6 | ||
Credit facility principal payments 2024 | 4.9 | ||
Credit facility principal payments 2025 | 5.2 | ||
Credit facility principal payments 2026 | 78.4 | ||
Credit facility principal payments 2027 | $ 3.9 | ||
Weighted average interest rate on outstanding borrowings | 3.85% | 2.54% | |
Maximum consolidated leverage ratio | 3.75% | 3.50% | |
EFM JV [Member] | |||
Line Of Credit Facility [Line Items] | |||
Weighted average interest rate on outstanding borrowings | 3.90% | ||
Credit Agreement [Member] | |||
Line Of Credit Facility [Line Items] | |||
Unused credit availability under credit facility | $ 62.4 | $ 45.9 | |
Credit Agreement [Member] | EFM JV [Member] | |||
Line Of Credit Facility [Line Items] | |||
Secured Debt | $ 11 | ||
Federal Funds Rate [Member] | |||
Line Of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | |||
Line Of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 0.11448% | ||
Minimum [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | |||
Line Of Credit Facility [Line Items] | |||
Maximum consolidated leverage ratio | 1.75% | ||
Minimum [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Credit Agreement [Member] | |||
Line Of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 0.11% | ||
Minimum [Member] | Base Rate [Member] | |||
Line Of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | ||
Maximum [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | |||
Line Of Credit Facility [Line Items] | |||
Maximum consolidated leverage ratio | 2.75% | ||
Maximum [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Credit Agreement [Member] | |||
Line Of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 0.43% | ||
Maximum [Member] | Base Rate [Member] | |||
Line Of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 2.75% | ||
Letters of Credit [Member] | |||
Line Of Credit Facility [Line Items] | |||
Aggregate principal amount outstanding under the credit facilities | $ 20.7 | $ 14.5 | |
Letters of Credit [Member] | EFM JV [Member] | |||
Line Of Credit Facility [Line Items] | |||
Aggregate principal amount outstanding under the credit facilities | 10.5 | ||
Bank Guarantees [Member] | |||
Line Of Credit Facility [Line Items] | |||
Bank guarantee issuance under bilateral lines and collateral | 65 | ||
Bank guarantee agreement outstanding amount | 18.6 | ||
Netherlands Facility [Member] | Euro-Denominated Bank Guarantee [Member] | |||
Line Of Credit Facility [Line Items] | |||
Bank guarantee agreement outstanding amount | $ 0.7 |
Earnings per Share - Number of
Earnings per Share - Number of Shares Outstanding for Calculation of Earnings Per Share (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Net loss attributable to CECO Environmental Corp. | $ 4,385 | $ 293 | $ 7,180 | $ 1,474 |
Denominator | ||||
Basic weighted-average shares outstanding | 34,873,238 | 35,491,725 | 34,961,645 | 35,444,477 |
Common stock equivalents arising from stock options and restricted stock awards | 168,000 | 327,000 | 158,000 | 353,000 |
Diluted weighted-average shares outstanding | 35,041,152 | 35,819,269 | 35,119,685 | 35,797,001 |
Earnings per Share - Additional
Earnings per Share - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | May 10, 2022 | |
Earnings And Dividends Per Share [Abstract] | |||||
Anti-dilutive options and restricted stock units outstanding | 1,900,000 | 1,900,000 | 2,000,000 | 1,700,000 | |
Purchase of outstanding shares of common stock | $ 20,000 | ||||
Repurchase of common stock (in shares) | 725,000 | ||||
Repurchase of common stock | $ 4,324 | $ 4,300 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized share-based compensation awards | $ 900 | $ 900 | $ 1,800 | $ 1,600 |
Non-Employee Director [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Cash received from employee stock option exercised | $ 0 | $ 13,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | 2,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 0 | $ 3,000 | ||
Restricted Stock Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of restricted stock awards granted | 104,000 | 460,000 | 688,000 | 460,000 |
Pension and Employee Benefit Pl
Pension and Employee Benefit Plans - Components of Pension and Employee Benefit Expenses (Detail) - Pension Plan [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | $ 220 | $ 194 | $ 439 | $ 388 |
Expected return on plan assets | (390) | (378) | (780) | (756) |
Amortization of net actuarial loss | 65 | 103 | 131 | 206 |
Net periodic benefit (gain) cost | $ (105) | $ (81) | $ (210) | $ (162) |
Pension and Employee Benefit _2
Pension and Employee Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Retirement Benefits [Abstract] | ||
Unfunded liability plans | $ 5.4 | $ 5.6 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Income Taxes [Line Items] | |||||
Liability for uncertain tax positions | $ 100 | $ 100 | $ 100 | ||
Income tax expense | $ 1,860 | $ 199 | $ 2,972 | $ 750 | |
Effective income tax rate | 28.30% | 34.30% | 28.30% | 30.90% | |
Foreign Subsidiaries [Member] | |||||
Income Taxes [Line Items] | |||||
Deferred income taxes on undistributed earnings | $ 1,500 | $ 1,100 | |||
Federal Authorities [Member] | |||||
Income Taxes [Line Items] | |||||
Open tax years | 2018 | ||||
State and Foreign Authorities [Member] | |||||
Income Taxes [Line Items] | |||||
Open tax years | 2016 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Fair Value Of Financial Instruments [Line Items] | ||
Cash and cash equivalents | $ 34,416 | $ 29,902 |
Cash held outside United States, principally in Netherlands, United Kingdom, China, and Canada | 26,500 | 22,600 |
Credit Facility [Member] | ||
Fair Value Of Financial Instruments [Line Items] | ||
Fair value of debt issued | $ 97,600 | $ 65,500 |
Commitments and Contingencies_2
Commitments and Contingencies - Legal Matters - Additional Information (Detail) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 USD ($) Case | Dec. 31, 2021 Case | |
Commitments and Contingencies Disclosure [Abstract] | ||
Cumulative settlement payments for cases involving asbestos-related claims | $ | $ 5,700 | |
Cumulative settlement payments made for cases involving asbestos-related claims with all legal fees other than corporate counsel expenses | $ | 5,600 | |
Average cost per settled claim excluding legal fees | $ | $ 44,000 | |
Number of claims pending | 256 | 223 |
Number of new cases filed | 79 | |
Number of cases dismissed | 36 | |
Number of cases settled | 10 | |
Assessment regarding Loss contingency impact Description | We are not aware of any pending claims or assessments, other than as described above, which may have a material adverse impact on our liquidity, financial position, results of operations, or cash flows. |
Acquisitions and Joint Ventur_3
Acquisitions and Joint Ventures - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||
Mar. 07, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 22, 2022 | May 03, 2022 | Dec. 31, 2021 | |
Business Acquisition Contingent Consideration [Line Items] | |||||||||
Equity, Fair Value Adjustment | $ 901 | $ 5,000 | |||||||
Assets Current | 218,714 | $ 218,714 | $ 189,011 | ||||||
Liabilities | 271,268 | 271,268 | $ 210,240 | ||||||
Pre tax loss | 6,584 | $ 581 | 10,508 | $ 2,430 | |||||
General Rubber LLC [Member] | |||||||||
Business Acquisition Contingent Consideration [Line Items] | |||||||||
Net revenue | 500 | 800 | |||||||
Net assets acquired | $ 23,820 | ||||||||
Revenues | 3,800 | 4,500 | |||||||
Compass Water Solutions, Inc [Member] | |||||||||
Business Acquisition Contingent Consideration [Line Items] | |||||||||
Acquisition of equity | 100% | ||||||||
Contingent consideration | $ 9,000 | ||||||||
Notes Payable | 2,000 | ||||||||
Earn out, Fair value | 1,400 | ||||||||
Accounts payable and accrued expenses | $ 1,400 | ||||||||
Western Air Ducts Ltd [Member] | |||||||||
Business Acquisition Contingent Consideration [Line Items] | |||||||||
Acquisition of equity | 100% | ||||||||
Contingent consideration | $ 10,700 | ||||||||
Net assets acquired | 11,450 | ||||||||
Western Air Ducts Ltd [Member] | Revolving Credit Facility [Member] | |||||||||
Business Acquisition Contingent Consideration [Line Items] | |||||||||
Deferred cash consideration | $ 800 | ||||||||
Joint Venture Agreement [Member] | |||||||||
Business Acquisition Contingent Consideration [Line Items] | |||||||||
Acquisition of equity | 100% | ||||||||
Contingent consideration | $ 19,700 | ||||||||
Fair value | $ 4,100 | ||||||||
Equity, Fair Value Adjustment | 900 | ||||||||
Percentage of equity hold in joint venture | 10% | ||||||||
Assets Current | 13,700 | 13,700 | |||||||
Noncurrent Assets | $ 28,500 | $ 28,500 |
Acquisitions and Joint Ventur_4
Acquisitions and Joint Ventures - Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 22, 2022 | May 03, 2022 | Mar. 07, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 185,795 | $ 161,183 | $ 161,820 | |||
General Rubber LLC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Current assets | $ 4,963 | |||||
Property and equipment | 459 | |||||
Goodwill | 11,120 | |||||
Intangible - finite life | 8,380 | |||||
Total assets acquired | 24,922 | |||||
Current liabilities assumed | (714) | |||||
Deferred income tax liability | (388) | |||||
Net assets acquired | 23,820 | |||||
Total assets acquired | $ 24,922 | |||||
Compass Water Solutions, Inc [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Current assets | $ 4,796 | |||||
Property and equipment | 101 | |||||
Goodwill | 4,848 | |||||
Total assets acquired | 14,645 | |||||
Current liabilities assumed | (623) | |||||
Deferred income tax asset | 1,627 | |||||
Total assets acquired | 14,645 | |||||
Net assets acquired | $ 12,395 | |||||
Western Air Ducts Ltd [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Current assets | $ 2,711 | |||||
Property and equipment | 188 | |||||
Goodwill | 9,712 | |||||
Total assets acquired | 12,611 | |||||
Current liabilities assumed | (1,127) | |||||
Deferred income tax liability | (34) | |||||
Net assets acquired | 11,450 | |||||
Total assets acquired | $ 12,611 |
Acquisitions and Joint Ventur_5
Acquisitions and Joint Ventures - Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed (Parenthetical) (Detail) - USD ($) $ in Thousands | Jun. 22, 2022 | May 03, 2022 | Mar. 07, 2022 |
General Rubber LLC [Member] | |||
Business Acquisition [Line Items] | |||
Cash, Current assets | $ 137 | ||
Compass Water Solutions, Inc [Member] | |||
Business Acquisition [Line Items] | |||
Cash, Current assets | $ 334 | ||
Western Air Ducts Ltd [Member] | |||
Business Acquisition [Line Items] | |||
Cash, Current assets | $ 1,557 |
Acquisitions and Joint Ventur_6
Acquisitions and Joint Ventures - Schedule of Unaudited Pro Forma Financial Information (Details) - General Rubber LLC [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Business Acquisition [Line Items] | ||||
Net sales | $ 106,995 | $ 85,828 | $ 204,280 | $ 164,979 |
Net (loss) income attributable to CECO Environmental Corp. | $ 4,573 | $ 431 | $ 7,508 | $ 2,415 |
(Loss) earnings per share: | ||||
Basic | $ 0.13 | $ 0.01 | $ 0.21 | $ 0.07 |
Diluted | $ 0.13 | $ 0.01 | $ 0.21 | $ 0.07 |
Business Segment Information -
Business Segment Information - Net Sales and Income from Operation by Business Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | ||
Segment Reporting Information [Line Items] | |||||
Net sales | $ 105,375 | $ 78,680 | $ 197,811 | $ 150,572 | |
(Loss) income from operations | 5,746 | 2,145 | 10,950 | 5,199 | |
Corporate and Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
(Loss) income from operations | [1] | (8,742) | (7,930) | (14,147) | (14,868) |
Engineered Systems Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 67,333 | 43,360 | 124,308 | 85,417 | |
(Loss) income from operations | 9,006 | 5,634 | 15,476 | 11,804 | |
Industrial Process Solutions Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 38,042 | 35,320 | 73,503 | 65,155 | |
(Loss) income from operations | $ 5,482 | $ 4,441 | $ 9,621 | $ 8,263 | |
[1] Includes corporate compensation, professional services, information technology, and other general and administrative corporate expenses. |
Business Segment Information _2
Business Segment Information - Property and Equipment Additions, Depreciation and Amortization and Identifiable Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | ||
Segment Reporting Information [Line Items] | ||||||
Property and equipment additions | $ 767 | $ 505 | $ 1,432 | $ 997 | ||
Depreciation and amortization | 2,379 | 2,471 | 4,668 | 4,906 | ||
Identifiable assets | 481,729 | 481,729 | $ 416,197 | |||
Engineered Systems Segment [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Property and equipment additions | 27 | 55 | 32 | 64 | ||
Depreciation and amortization | 960 | 1,070 | 1,855 | 2,137 | ||
Identifiable assets | 315,743 | 315,743 | 262,558 | |||
Industrial Process Solutions Segment [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Property and equipment additions | 340 | 172 | 412 | 362 | ||
Depreciation and amortization | 1,009 | 1,073 | 2,059 | 2,141 | ||
Identifiable assets | 152,689 | 152,689 | 141,975 | |||
Corporate and Other [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Property and equipment additions | 400 | 278 | 988 | 571 | ||
Depreciation and amortization | 410 | $ 328 | 754 | $ 628 | ||
Identifiable assets | [1] | $ 13,297 | $ 13,297 | $ 11,664 | ||
[1] Corporate and Other assets consist primarily of cash and income tax related assets. |
Business Segment Information _3
Business Segment Information - Goodwill (Detail) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Segment Reporting Information [Line Items] | |||
Goodwill | $ 185,795 | $ 161,183 | $ 161,820 |
Engineered Systems Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Goodwill | 114,797 | 99,303 | |
Industrial Process Solutions Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Goodwill | $ 70,998 | $ 61,880 |
Business Segment Information _4
Business Segment Information - Intra-Segment and Inter-Segment Revenues (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 105,375 | $ 78,680 | $ 197,811 | $ 150,572 |
Energy Inter-Segment Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 142 | (644) | (198) | (968) |
Engineered Systems Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 67,333 | 43,360 | 124,308 | 85,417 |
Industrial Process Solutions Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 38,042 | 35,320 | 73,503 | 65,155 |
Industrial Process Solutions Segment [Member] | Energy Inter-Segment Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | (142) | (644) | (198) | (968) |
Intra-Segment Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | (4,948) | (8,794) | (11,131) | (13,942) |
Intra-Segment Sales [Member] | Engineered Systems Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | (3,231) | (3,513) | (7,789) | (5,887) |
Intra-Segment Sales [Member] | Industrial Process Solutions Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | (1,717) | (5,281) | (3,342) | (8,055) |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 110,655 | 88,314 | 209,397 | 165,723 |
Operating Segments [Member] | Engineered Systems Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 70,754 | 47,069 | 132,354 | 91,545 |
Operating Segments [Member] | Industrial Process Solutions Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 39,901 | 41,245 | 77,043 | 74,178 |
Inter-Segment Elimination [Member] | Industrial Inter-Segment Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | (190) | (196) | (257) | (241) |
Inter-Segment Elimination [Member] | Engineered Systems Segment [Member] | Industrial Inter-Segment Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ (190) | $ (196) | $ (257) | $ (241) |