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U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-K

[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 31, 2002

[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

Commission File No. 0-7099

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CECO ENVIRONMENTAL CORP.
(Exact Name of Registrant as Specified in Its Charter)

Delaware 13-2566064
(State or Other (I.R.S. Employer
Jurisdiction Identification No.)
of Incorporation or
Organization)

3120 Forrer Street 45209
Cincinnati, Ohio
(Address of Principal (Zip Code)
Executive Offices)

(513) 458-2600
(Registrant's Telephone Number, Including Area Code)

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Securities registered under Section 12(b) of the Act: None

Securities registered under Section (g) of the Act:

Common Stock, $0.01 par value per share
(Title of Class)

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Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [_]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [_] No [X]

Issuer's Revenues for its most recent fiscal year: $78,877,000.

Aggregate market value of voting stock held by non-affiliates of Registrant
(based on the last sale price on June 30, 2002): $13,356,655.

The number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date: 9,589,736 shares of common stock, par
value $0.01 per share, as of March 14, 2003.

Documents Incorporated by Reference

Portions of the definitive Proxy Statement to be delivered to shareholders
in connection with the Annual Meeting of Shareholders to be held June 11, 2003
are incorporated by reference into Part III.

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PART I

Item 1. Business

General

CECO Environmental Corp. was incorporated in New York State in 1966 and
reincorporated in Delaware in January 2002. We operate as a provider of air
pollution control products and services.

Unless the context indicates otherwise, the terms "Company", "we", "us", and
"our", as used herein refers to CECO Environmental Corp. (the Registrant) and
its subsidiaries.

We market our products and services under the following trade names: "Kirk &
Blum", "kbd/Technic", "CECO Filters", "Busch International", "CECO Abatement
Systems", and "K&B Duct".

Beginning in fiscal year 1999 and continuing into 2002, we transitioned from
a products-based company to a solutions-based provider. Several accomplishments
that helped us with this transformation include:

. We made key operating management changes within our business.

. We implemented a target sales approach with "Centers of Excellence"
industry teams to identify and capture profitable sales and
cross-marketing opportunities throughout our organization.

. We put into action operating plans to help us realize synergies created
after the acquisition of Kirk & Blum.

. We completed the consolidation of our administrative and finance
functions to Cincinnati, Ohio.

. We sold the assets of Air Purator Corporation ("APC") and the assets of
Busch Martec, as those divisions did not serve the vision for our future
operations.

. We launched the CECO Abatement product line in May 2001 to leverage
existing fabrication and installation resources for thermal oxidation
technology by adding higher-level engineering design capabilities.

. We established the K&B Duct product line to complement an existing
product line.

. We realigned marketing into a single centralized company-wide function.

. We placed the responsibility for resource management of our engineering
and design personnel under a single manager.

. We continue to emphasize the recognized CECO brand names (Kirk & Blum,
kbd/Technic, CECO Filters, Busch International, CECO Abatement Systems
and K&B Duct) to align with "sales channels".

The transition was initiated by the acquisition of Kirk & Blum and
kbd/Technic on December 7, 1999, which fundamentally changed the size of our
business and focus. The addition of Kirk & Blum, 89.2% of whose net sales arose
from the fabrication and installation of industrial ventilation, dust, fume and
mist control systems, added a new dimension to our product lines that broadened
our coverage of air pollution control technology. In 1999, Kirk & Blum and
kbd/Technic had combined revenue of $70.4 million (unaudited), while the
revenue of CECO and its subsidiaries (other than Kirk & Blum and kbd/Technic)
for that period was $17.5 million. Prior to December 1999, CECO Filters was the
Company's primary operating subsidiary. Its primary business was acting as an
equipment manufacturer and seller. Specifically, its major products were
industrial air filters known as fiber bed mist eliminators.

Products and Services

As a result of the acquisition of the Kirk & Blum Manufacturing Company in
December 1999, its facilities and personnel serve as the backbone to our
operations due to the production capacity acquired and the depth and breadth of
personnel employed.

We are recognized as a leading provider in the air pollution control
industry. We focus on engineering, designing, building, and installing systems
that capture, clean and destroy airborne contaminants from industrial
facilities as well as equipment that control emissions from such facilities. We
market these turnkey pollution control services primarily under the Kirk & Blum
trade name. In October 2002, Engineering News Record ranked Kirk & Blum as the
largest specialty sheet metal contractor in the country in 2001. With a
diversified base of more than 1,500 active customers, we provide services to a
myriad of industries including aerospace, brick, cement, ceramics,
metalworking, printing, paper, food, foundries, metal plating, woodworking,
chemicals, tobacco, glass, automotive, and pharmaceuticals.

Increasingly stringent air quality standards and the need for improved
industrial workplace environments are chief among the factors that drive our
business. Some of the underlying federal legislation that affects air quality
standards is the Clean Air Act of 1970 and the Occupational Safety and Health
Act of 1970. The Environmental Protection Agency ("EPA") and Occupational
Safety and Health Administrative Agency ("OSHA"), as well as other state and
local agencies, administer air quality standards. Industrial air quality has
been improving through EPA mandated Maximum Achievable Control Technology
("MACT") standards and OSHA established Threshold Limit Values ("TLV") for more
than 1,000 industrial contaminants. Bio-terrorism threats have also increased
awareness for improved industrial workplace air quality. Any of these factors,
whether individually or collectively, tend to cause increases in industrial
capital spending that are not directly impacted by general economic conditions,
expansion or capacity increases. Favorable conditions in the economy generally
lead to plant expansions and the construction of new industrial sites. Economic
expansion provides us with the potential to increase and accelerate levels of
growth. However, in a weak economy customers tend to (a) lengthen the time from
their initial inquiry to the purchase order or (b) defer purchases.

Our selling strategy is to provide a solutions-based approach for
controlling industrial airborne contaminants by being a single source provider
of industrial ventilation and air-pollution control products and services. We
believe this provides a discernable competitive advantage. We execute this
strategy by utilizing our portfolio of in-house technologies and those of third
party equipment suppliers. Many of these have been long standing relationships.
This enables us to leverage existing business with selective alliances of
suppliers and application specific engineering expertise. We, therefore,
compete with our competitors by providing competitive pricing with turnkey
solutions.

Our operating framework has developed into a "hub and spoke" business model
whereby executive management, finance, administrative and marketing staff serve
as the hub and sales channels serve as spokes. This philosophy is used
throughout our operations.

We have four principal product lines, which are marketed under the Kirk &
Blum trade name, all evolving from the original air pollution systems business
(contracting, fabricating, parts and clamp-together duct systems). The largest
line, with seven strategic locations throughout the Midwest and Southeast
United States, is air pollution control systems and industrial ventilation. The
product lines primarily sold on a turnkey basis include oil mist collection,
dust collection, industrial exhaust, chip collection, industrial baghouses,
make-up air, as well as automotive spray booth systems, industrial and process
piping, and other industrial sheet metal work. We provide a cost effective
engineered solution to in-plant process problems in order to control airborne
pollutants. Major customers include General Electric, General Motors, Procter &
Gamble, Ingersoll Milling Machine, Lafarge, Corning, RR Donnelley, Toyota,
Matsushita, and Alcoa. North America is the principal market served. We have,
at times, supplied equipment and engineering services in certain overseas
markets.

We provide custom metal fabrication services at our Cincinnati, Ohio and
Lexington, Kentucky locations. These facilities are used to fabricate parts,
subassemblies, and customized products for air pollution and non-air pollution
applications from sheet, plate, and structurals and perform the majority of the
fabrication for CECO Filters, Busch International, and CECO Abatement. We have
developed significant expertise in custom sheet metal fabrication. As a result,
these facilities give us flexible production capacity to meet project schedules
and cost targets in air pollution control projects while generating additional
fabrication revenue in support of non-air

pollution control industries. Kirk & Blum is the custom fabricator of product
components for many companies located in the Midwest choosing to outsource
their manufacturing. Generally, we will market custom fabrication services
under a long-term sales agreement. Major customers include Siemens and General
Electric.

We also market under the Kirk & Blum trade name component parts for
industrial air systems to contractors, distributors and dealers throughout the
United States. In 2001, we started the K&B Duct product line to provide a cost
effective alternative to traditional duct sold under the Kirk & Blum trade
name. Primary users for this product line are those that generate dry
particulate such as furniture manufactures, metal fabrication, and cement and
paper producers.

Our engineering and design services are also marketed under the kbd/Technic
trade name to provide engineering services directly to customers related to air
system testing and balancing, source emission testing, and industrial
ventilation engineering. Customers include General Motors, Ford, Toyota, Quaker
Oats, Nissan and Delphi.

Our filtering equipment is also marketed under the CECO Filters trade name
directly to customers. The principal functions of the filters are (a) the
removal of damaging mists and particles (e.g., in process operations that could
cause downstream corrosion and damage to equipment), (b) the removal of
pollutants and (c) the recovery of valuable materials for reuse. The filters
are also used to collect fine insoluble particulates. Major users are chemical
and electronics industries, manufacturers of various acid, vegetable and animal
based cooking oils, textile products, alkalies, chlorine, papers, asphalt and
pharmaceutical products.

We market under the Busch International trade name custom engineered air
handling systems used to control fume and oil mist emissions. We also market a
heat and transfer device under the JETSTAR trademark. This equipment is
globally marketed to the steel and aluminum industries.

We added the CECO Abatement Systems trade name in 2001 to extend our
penetration into the thermal oxidation market. We market systems that eliminate
toxic emissions fumes and volatile organic compounds from large-scale
industrial processes.

When we undertake large jobs, a working capital objective is to make these
projects self-funding. We try to achieve this by (a) progress billing
contracts, when possible, (b) utilizing extended payment terms from material
suppliers, and (c) paying sub-contractors after payment from our customers,
which is an industry practice. Our investment in net working capital is funded
by cash flow from operations and by our revolving line of credit. Inventory
remains relatively constant from year to year. Accordingly, changes in
inventory do not constitute a significant part of our investment in working
capital.

OTHER INFORMATION

Kirk & Blum Acquisition

The financing for the Kirk & Blum transaction was provided by a bank loan
facility in the original amount of $25 million in term loans and a $10 million
revolving credit facility. The bank loan facility was provided by PNC Bank,
N.A., Fifth Third Bank and Bank One, N.A. (the "Bank Facility"). In connection
with these loans, the banks providing the Bank Facility received a lien on
substantially all of our assets.

The bank facility has been amended through seven amendments to, among other
things, reduce minimum coverage under several financial covenants. Additional
fees have been paid and prepayments of principal on the Bank Facility have been
made in connection with these amendments.

In addition, as a condition to obtaining the Bank Facility, we placed $5
million of subordinated debt. The proceeds of the bank loans and the additional
$5 million of subordinated debt were used to pay the purchase prices for Kirk &
Blum and kbd/Technic, and to pay expenses incurred in connection with the
acquisitions, to refinance existing indebtedness and for working capital
purposes.

The $5 million subordinated debt that was provided to us in connection with
the Kirk & Blum transaction included investments of $4 million by Can-Med
Technology, Inc. d/b/a Green Diamond Oil Corp. ("Green Diamond"), $500,000 by
ICS Trustee Services, Ltd. and $500,000 by Harvey Sandler. These investors were
also issued warrants to purchase 1,000,000 shares of Common Stock in the
aggregate (the "Subdebt Warrants") at a price of $2.25 per share, the fair
market value of the shares at date of issuance. ICS Trustee Services, Ltd. and
Harvey Sandler are not our affiliates. Green Diamond Oil Corp. is owned 50.1%
by Icarus Investment Corp., a corporation owned 50% by Phillip DeZwirek, the
Chairman of the Board of Directors and Chief Executive Officer of the Company
and a major stockholder, and 50% by Jason Louis DeZwirek, Phillip DeZwirek's
son, a director and Secretary of the Company and a major stockholder of the
Company. The promissory notes, which were issued to evidence the subordinated
debt, provide that they accrue interest at the rate of 12% per annum, payable
semi-annually. Payments of interest are subject to the subordination agreement
with the banks providing the financing referred to above.

Equity Transactions

In December 2001, the Subdebt Warrants were exercised for 1,000,000 shares,
and we received gross proceeds of $2.3 million from such exercise.

On December 31, 2001, we completed a $2,120,000 equity raise consisting of
the sale of 706,668 shares of our common stock, at a price of $3.00 per share,
and the issuance of warrants ("Warrants") to purchase 353,334 shares of our
common stock (collectively, with the 706,668 shares, the "Investor Shares") at
an initial exercise price of $3.60 per share, to a group of accredited
investors (the "Investors") led by Crestview Capital Fund, L.P., a
Chicago-based private investment fund. We used these proceeds along with the
proceeds received from the exercise of the Subdebt Warrants, to pay down the
Bank Facility. As part of our contractual obligations to the Investors, we
registered the Investor Shares on a Form S-1, which became effective on May 15,
2002. The shares that were issued upon exercise of the Subdebt Warrants and the
14,000 shares underlying warrants that were issued as a finder's fee in
connection with the sale of shares to the Investors were also included in the
Form S-1, for a total of 2,074,002 shares. We are required to keep the
registration statement effective for the earlier of (i) eighteen months or (ii)
such date on which the shares of common stock sold to the Investors have been
sold pursuant to a registration statement.

In addition, under the Subscription Agreement CECO entered into with the
Investors, we are required to issue to such Investors additional shares based
on an earnings formula (as set forth in the Subscription Agreement executed in
connection with the issuance of the Investor Shares) for fiscal year 2002, up
to a maximum of 826,802 additional shares. Based on the results of this
formula, approximately 382,000 additional shares will be issued to the
Investors.

Asset Sales

In December 2001, we sold the fixed assets and inventory of Air Purator
Corp. ("APC") and received notes totaling $475,000. The notes, which were due
primarily in March 2002, were secured by the assets of APC. At December 31,
2001, we deferred the gain on sale of $250,000 until collection was reasonably
assured. However, the purchaser defaulted on the loan, and we commenced
foreclosure proceedings in May 2002. We subsequently sold the assets to the
former general manager of APC on July 31, 2002 and recognized a gain on sale
during the third and fourth quarters of 2002 totaling $250,000. The net assets
and operations of APC were not material to our consolidated operations.

We sold the assets of Busch Martec during 2002 because those assets no
longer served our vision for future operations. Busch Martec's assets are
insignificant to the consolidated financial statements.

APC was engaged in the manufacture of non-woven specialty needled fiberglass
fabrics and Busch MARTEC acted as a manufacturer's representative with
manufacturers of air and fluid products. We no longer engage in those
activities.

Customers

No customers comprised 10% or more of our net revenues for 2002. We do not
depend upon any one or few customers.

Suppliers

We purchase our angle iron and sheet plate products from a variety of
sources. When possible, we secure these materials from steel mills. Other
materials are purchased from a variety of steel service centers. We do not
anticipate any shortages in the near future.

We purchase a majority of our fans from New York Blower and a majority of
our louvers and dampers from American Warming.

We purchase chemical grade fiberglass as needed from Johns Manville
Corporation, which we believe is the only domestic supplier of such fiberglass.
However, there are foreign suppliers of chemical grade fiberglass, and, based
on current conditions, we believe that we could obtain such material from
foreign suppliers on acceptable terms.

We have a good relationship with all such suppliers and do not anticipate
any difficulty in continuing to receive such items on terms acceptable to us.
To the extent that our current suppliers are unable or unwilling to continue to
supply us with materials, we believe that we would be able to obtain such
materials from other suppliers on acceptable terms.

Backlog

Backlog represented by firm purchase orders from our customers was
approximately $14.6 million and $18.6 million at the end of the fiscal years
2002 and 2001, respectively. 2001 backlog was completed in 2002. The 2002
backlog is expected to be completed in 2003.

Competition and Marketing

We believe that there are no direct national competitors nor any singly
dominant companies in the industrial ventilation and air pollution control
niche markets in which we participate. These markets are fragmented with
numerous smaller and regional participants. As a result, competition varies
widely by region and industry. However, sales of products and services under
some of our trade names face competition with companies that have greater
financial resources and that have more extensive marketing and advertising.

We sell and market our products and services with our own direct workforce
in conjunction with outside sales representatives in North America, Asia,
Europe and South America.

Government Regulations

We have not been materially negatively impacted by existing government
regulation, nor are we aware of any probable government regulation that would
materially affect our operations. Our costs in complying with environmental
laws have been negligible.

Research and Development

During 2002, 2001, and 2000, costs expended in research and development have
not been significant. Such costs are generally included as factors in
determining pricing.

Employees

We had 503 full-time employees and 3 part-time employees as of December 31,
2002. The facilities acquired with the acquisition of Kirk & Blum are unionized
except for selling, administrative and operating management personnel. None of
our other employees are subject to a collective bargaining agreement. We
consider our relationship with our employees to be satisfactory. Various union
contracts expire from June 2003 to May 2006. We are in the process of
renegotiating expiring contracts.

Our operations are largely dependent on Richard J. Blum and certain other
key executives. The loss of Mr. Blum or any of its key executives could have a
material adverse effect upon our operations.

Intellectual Property

There is no assurance that measurable revenues will accrue to us as a result
of our patents or licenses.

We purchased, among other assets, three patents from Busch Co. in 1997 that
relate to the JET*STAR systems. The Patent and Trademark Office ("PTO") records
do not currently reflect such transfer. We are in the process of attempting to
obtain the proper documentation to file with the PTO. JET*STAR(TM) systems
constituted $.3 million of revenues in 2002.

We hold a US patent for our N-SERT(R) and X-SERT(R) prefilters and for our
Cantenary Grid scrubber. We also hold a US patent for a fluoropolymer fiberbed
for a mist eliminator, a US patent for a fluted filter, and a US patent for a
multiple in-duct filter system. Such patents combined do not have significant
value to our overall performance. We were assigned the patent to a multiple
throat narrow gap venturi scrubber, which patent may have significant value. We
are in the process of attempting to file the proper documentation with the PTO
to reflect proper ownership. Current PTO records indicate that the party from
which we obtained such patent owns such patent.

Affiliated Stock Purchase

In September 2002, Registrant purchased 31,536,440 shares of CECO Filters,
Inc. ("Filters") in consideration for the cancellation of Filter's debt of
$3,044,423 owed to CECO Group, Inc. ("Group") and $109,221 owed to Registrant.
Registrant then immediately assigned such shares to Group. Group currently owns
approximately 99% of the shares of Filters.

RISK FACTORS

In addition to the other information in this Annual Report on Form 10-K, the
factors listed below should be considered in evaluating our business and
prospects. This Annual Report on Form 10-K contains a number of forward-looking
statements that reflect our current views with respect to future events and
financial performance. These forward-looking statements are subject to certain
risks and uncertainties, including those discussed below and elsewhere herein,
that could cause actual results to differ materially from historical results or
those anticipated. In this report, the words "anticipates," "believes,"
"expects," "intends," "future" and similar expressions identify forward-looking
statements. Readers are cautioned to consider the specific factors described
below and not to place undue reliance on the forward-looking statements
contained herein, which speak only as of the date of this Annual Report on Form
10-K. We assume no obligation to publicly update any forward-looking statements.

Operating at a Loss

We have incurred net losses for our past 3 fiscal years. There are no
assurances that we will achieve or sustain profitability.

Competition

The industries in which we compete are all highly competitive. We compete
against a number of local, regional and national contractors and manufacturers
in each of our business segments, many of which have been in existence longer
than us and some of which have substantially greater financial resources than
we do. We believe that any competition from new entrants that are large
corporations may be able to compete with the Company on the basis of price and
as a result may have a material adverse affect on the results of our
operations. In addition, there can be no assurance that other companies will
not develop new or enhanced products that are either more effective than ours
or would render our products non-competitive or obsolete.

Dependence On Key Personnel

We are highly dependent on the experience of our management in the
continuing development of its operations. The loss of the services of certain
of these individuals, particularly Richard J. Blum, President of CECO, would
have a material adverse effect on our business. Our future success will depend
in part on our ability to attract and retain qualified personnel to manage our
development and future growth. There can be no assurance that it will be
successful in attracting and retaining such personnel. The failure to recruit
additional key personnel could have a material adverse effect on our business,
financial condition and results of operations.

Continued Control By Management

As of the date of this Annual Report on Form 10-K, management of CECO
beneficially owns approximately 54.0% of the Company's outstanding common
stock, assuming the exercise of currently exercisable warrants and options held
by management. CECO's stockholders do not have the right to cumulative voting
in the election of directors. Accordingly, present stockholders will be in a
position to exert control over our business and operations, including the
election of directors of CECO.

Dependence Upon Third-Party Suppliers

Although we are not dependent on any one supplier, we are dependent on the
ability of our third-party suppliers to supply our raw materials, as well as
certain specific component parts. We purchase all of our chemical grade
fiberglass from one domestic supplier, which we believe is the only domestic
supplier of such fiberglass, and certain specialty items from only two domestic
suppliers. These items also can be purchased from foreign suppliers. Failure by
our third-party suppliers to meet our requirements could have a material
adverse effect on us. There can be no assurance that our third-party suppliers
will dedicate sufficient resources to meet our scheduled delivery requirements
or that our suppliers will have sufficient resources to satisfy our
requirements during any period of sustained demand. Failure of manufacturers or
suppliers to supply, or delays in supplying, our raw materials or certain
components, or allocations in the supply of certain high demand raw components
could materially adversely affect our operations and ability to meet our own
delivery schedules on a timely and competitive basis.

Patents

We hold various patents and licenses relating to certain of our products.
There can be no assurance as to the breadth or degree of protection that
existing or future patents, if any, may afford us, that our patents will be
upheld, if challenged, or that competitors will not develop similar or superior
methods or products outside the protection of any patent issued to us. Although
we believe that our products do not and will not infringe patents or violate
the proprietary rights of others, it is possible that our existing patent
rights may not be valid or that infringement of existing or future patents or
proprietary rights may occur. In the event our products infringe patents or
proprietary rights of others, we may be required to modify the design of our
products or obtain a license for certain technology. There can be no assurance
that we will be able to do so in a timely manner, upon acceptable terms and
conditions, or at all. Failure to do any of the foregoing could have a material
adverse effect

upon our business. In addition, there can be no assurance that we will have the
financial or other resources necessary to enforce or defend a patent
infringement or proprietary rights violations action which may be brought
against us. Moreover, if our products infringe patents or proprietary rights of
others, we could, under certain circumstances, become liable for damages, which
also could have a material adverse effect on our business.

New Product Development

The air pollution control and filtration industry is characterized by
ongoing technological developments and changing customer requirements. As a
result, our success and continued growth depend, in part, on our ability in a
timely manner to develop or acquire rights to, and successfully introduce into
the marketplace, enhancements of existing products or new products that
incorporate technological advances, meet customer requirements and respond to
products developed by our competition. There can be no assurance that we will
be successful in developing or acquiring such rights to products on a timely
basis or that such products will adequately address the changing needs of the
marketplace.

Technological And Regulatory Change

The air pollution control and filtration industry is characterized by
changing technology, competitively imposed process standards and regulatory
requirements, each of which influences the demand for our products and
services. Changes in legislative, regulatory or industrial requirements may
render certain of our filtration products and processes obsolete. Acceptance of
new products may also be affected by the adoption of new government regulations
requiring stricter standards. Our ability to anticipate changes in technology
and regulatory standards and to develop and introduce new and enhanced products
successfully on a timely basis will be a significant factor in our ability to
grow and to remain competitive. There can be no assurance that we will be able
to achieve the technological advances that may be necessary for us to remain
competitive or that certain of our products will not become obsolete.

Leverage

We are highly leveraged. CECO currently has loan facilities, including a
term loan and line of credit, with PNC Bank, National Association; Bank One,
N.A.; and Fifth Third Bank. The terms of such loan facilities have been revised
through seven separate amendments in order to alter some of the financial
covenants made by us to prevent CECO from being in default of such covenants.

Our Common Stock Has Been Relatively Thinly Traded And We Cannot Predict The
Extent To Which A Trading Market Will Develop

Our common stock trades on the Nasdaq SmallCap Market. Our common stock is
thinly traded compared to larger, more widely known companies. Thinly traded
common stock can be more volatile than common stock trading in an active public
market.

Future Sales By Our Stockholders May Adversely Affect Our Stock Price And Our
Ability To Raise Funds In New Stock Offerings

We have registered up to 2,074,002 shares of common stock which the holders
intend to sell in the public market. So far approximately 44,350 shares of
common stock have been sold under the registration statement. That means that
up to 2,029,652 additional shares of common stock may be sold under the
registration statement. Such sales may cause our stock price to decline. Sales
may also make it more difficult for us to sell equity securities or
equity-related securities in the future at a time and price that our management
deems acceptable or at all. Also, we are required to issue to the Investors
additional shares based on an earnings formula (as set forth in the
Subscription Agreement executed in connection with the issuance of the Investor
Shares) for fiscal year 2002.

Based on the results of this formula, approximately 382,000 additional shares
will be issued to the Investors. In addition, Phillip DeZwirek has warrants to
purchase 2,250,000 shares of CECO common stock, which shares we are obligated
to register upon demand. Should Mr. DeZwirek elect to sell such shares, such
sales may cause our stock price to decline.

Our Financial Performance Is Sensitive To Changes In Overall Economic
Conditions

A general slowdown in the United States economy may adversely affect the
spending of our customers, which would likely result in lower net sales than
expected on a quarterly or annual basis. Future economic conditions, such as
business conditions, fuel and energy costs, interest rates, and tax rates,
could also adversely affect our business by reducing customer spending.

Possibility Of War And Acts Of Terrorism Could Adversely Impact Us

The involvement of the United States in a war in the Middle East or
elsewhere or a significant act of terrorism on U.S. soil or elsewhere could
have an adverse impact on us by, among other things, disrupting our information
or distribution systems, causing dramatic increases in fuel prices thereby
increasing the costs of doing business, or impeding the flow of imports or
domestic products to us.

Item 2. Properties

Our principal operating offices are headquartered in Cincinnati, Ohio at a
236,178 square foot facility that we own.

We have an executive office in Toronto, Canada, at facilities maintained by
affiliates of our Chief Executive Officer and Chairman of the Board and
Secretary, who work at the Toronto office. We reimburse such affiliate $5,000
per month for the use of the space and other office expenses.

We own a 33,000 square foot facility in Indianapolis, Indiana, a 35,000
square foot facility in Louisville, Kentucky, a 33,000 square foot facility in
Lexington, Kentucky, and a 37,400 square foot facility in Conshohocken,
Pennsylvania.

We lease the following facilities:

Square Annual
Location Footage Rent Expiration
-------- ------- -------- --------------

Columbia, Tennessee....... 28,920 $ 93,000 August 2005
Greensboro, North Carolina 30,000 $120,000 August 2006
Defiance, Ohio............ 10,000 $ 27,000 June 2003
Pittsburgh, Pennsylvania.. 4,000 $ 48,000 September 2005
Chicago, Illinois......... 1,250 $ 20,000 February 2005

All properties owned are subject to collateral mortgages to secure the
amounts owed under the Bank Facility.

We consider the properties adequate for their respective purposes.

In February 2003, we accepted an offer, expiring September 2003, to sell our
Cincinnati property. This agreement can be cancelled at any time by the buyer
up to the expiration date. However, if this agreement is consummated, excess
proceeds could be used to reduce our debt.

Item 3. Legal Proceedings

There are no material pending legal proceedings to which our Company or any
of our subsidiaries is a party or to which any of our property is subject.

Item 4. Submission of Matters to a Vote of Security Holders

Our annual meeting of shareholders was held on November 11, 2002. At the
meeting, directors Phillip DeZwirek, Jason Louis DeZwirek, Richard Blum,
Josephine Grivas, Paul Voet (see Item 10) and Donald Wright were elected, and
the appointment of Deloitte & Touche LLP as our accountants was ratified. The
shareholders also approved our issuance of up to 826,802 additional shares of
the Company's common stock to certain investors. The votes for each of the
directors were 8,091,617, with 30,679 against and no abstentions. The votes for
the additional issuance of shares were 7,975,696, with 133,806, against and
abstentions. The votes for the appointment of Deloitte & Touche LLP was
8,084,136 with 35,027 against and no abstentions.

Executive Officers of the Registrant

The following are the executive officers of the Company. The terms of all
officers expire at the next annual meeting of the board of directors and upon
the election of the successors of such officers.

Name Age Position with CECO
---- --- ------------------------------------------

Phillip DeZwirek.... 65 Chairman of the Board of Directors; Chief
Executive Officer

Richard J. Blum..... 56 President

David D. Blum....... 47 Senior Vice President-Sales and Marketing;
Assistant Secretary

Jason Louis DeZwirek 32 Secretary

Marshall J. Morris.. 43 Vice President-Finance and Administration;
Chief Financial Officer

The business backgrounds during the past five years of the Company's
officers are as follows:

Phillip DeZwirek became a director, the Chairman of the Board and the Chief
Executive Officer of the Company in August 1979. Mr. DeZwirek also served as
Chief Financial Officer until January 26, 2000. Mr. DeZwirek's principal
occupations during the past five years have been as Chairman of the Board and
Vice President of Filters (since 1985); Treasurer and Assistant Secretary of
CECO Group (since December 10, 1999); a director of Kirk & Blum and kbd/Technic
(since 1999); President of Can-Med Technology, Inc. d/b/a Green Diamond Oil
Corp. ("Green Diamond") (since 1990) and Vice Chairman and Chief Executive
Officer of API Electronics Group, Inc. Mr. DeZwirek has also been involved in
private investment activities for the past five years.

Richard J. Blum became the President and a director of the Company on July
1, 2000 and the Chief Executive Officer and President of CECO Group, Inc. on
December 10, 1999. Mr. Blum has been a director and the President of Kirk &
Blum since February 28, 1975 until November 12, 2002 and the Chairman and a
director of kbd/Technic since November 1988. Mr. Blum is also a director of The
Factory Power Company, a company of which CECO owns a minority interest and
that provides steam energy to various companies, including CECO. Kirk & Blum
and kbd/Technic were acquired by the Company on December 7, 1999. Mr. Richard
Blum is the brother of Mr. David Blum.

David D. Blum became the Senior Vice President-Sales and Marketing and an
Assistant Secretary of the Company on July 1, 2000 and the President of Kirk &
Blum on November 12, 2002. Mr. Blum served as Vice President of Kirk & Blum
from 1997 to 2000 and was Vice President-Division Manager Louisville at Kirk &
Blum from 1984 to 1997. Mr. David Blum is the brother of Mr. Richard Blum.

Jason Louis DeZwirek, the son of Phillip DeZwirek, became a director of the
Company in February 1994. He became Secretary of the Company on February 20,
1998. Mr. DeZwirek from October 1, 1997 through

January 1, 2002 served as a member of the Committee that was established to
administer CECO's Stock Option Plan. He also serves as Secretary of CECO Group
(since December 10, 1999). Mr. DeZwirek's principal occupation since October
1999 has been as President of kaboose, Inc., a company that owns a children's
portal. Mr. DeZwirek is (and has been since 2001) the Chairman of the Board of
API Electronics Group, Inc., a publicly traded company, that is a manufacturer
of power semi-conductors primarily for military use.

Marshall J. Morris became the Chief Financial Officer of the Company on
January 26, 2000 and the Vice President-Finance and Administration on July 1,
2000. Mr. Morris also serves as Chief Financial Officer of CECO Group (since
January 26, 2000). From 1996 to 1999, Mr. Morris was Treasurer of Calgon Carbon
Corporation which stock trades on the New York Stock Exchange and which is a
worldwide producer of specialty chemicals and supplier of pollution control
technologies and services with annual sales of approximately $300 million. From
1995 to 1996, he served as a consultant with respect to business management and
strategic planning. From 1989 through 1995, Mr. Morris also served as the
Treasurer of Trico Products Corporation, an international manufacturer and
distributor of original equipment automotive parts with annual sales of
approximately $350 million.

PART II

Item 5. Market of the Registrant's Common Equity and Related Stockholder
Matters

(a) Our common stock is traded in the over-the-counter market and is
quoted in the Nasdaq SmallCap Market automated quotation system under the
symbol CECE. The following table sets forth the range of bid prices for our
common stock as reported in the Nasdaq system during the periods indicated,
and represents prices between broker-dealers, which do not include retail
mark-ups and mark-downs, or any commissions to the broker-dealers. The bid
prices do not reflect prices in actual transactions.

CECO Common Stock Bids CECO Common Stock Bids CECO Common Stock Bids
----------------------- ----------------------- -----------------------
2001 High Low 2002 High Low 2003 High Low
----------- ----- ----- ----------- ----- ----- ----------- ----- -----

1st Quarter $2.12 $1.44 1st Quarter $3.95 $3.02 1st Quarter $1.94 $1.70
2nd Quarter $2.40 $1.38 2nd Quarter $3.95 $2.25 (through March 12, 2003)
3rd Quarter $2.33 $1.75 3rd Quarter $2.40 $1.75
4th Quarter $4.60 $2.01 4th Quarter $2.18 $1.75

(b) The approximate number of beneficial holders of our common stock as
of March 14, 2003 was 1,400.

(c) We paid no dividends during the fiscal years ended December 31, 2002
or 2001. We do not expect to pay dividends in the foreseeable future. We are
party to various loan documents, which prevent us from paying any dividends.

Item 6. Selected Financial Data

The following table sets forth our selected financial information. The
financial information for the years ended December 31, 2002, 2001 and 2000 has
been derived from our audited consolidated financial statements included
elsewhere in this Annual Report. The financial information for the year ended
December 31, 1999 and as of December 31, 1998 has been derived from our audited
consolidated financial statements not included in this Annual Report. This
historical selected financial information may not be indicative of our future
performance and should be read in conjunction with the information contained in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements and the related notes
included elsewhere in this Annual Report.

Year Ended December 31,
----------------------------------------------
2002(1) 2001(2) 2000(3) 1999 1998
- - ------- ------- ------- ------- ----------
(in thousands, except per share amount)

Statement of operations information:
Net sales............................................ $78,877 $90,994 $89,817 $22,414 $ 21,753
Gross profit, excluding depreciation and amortization 15,892 18,532 18,097 8,387 8,235
Depreciation and amortization........................ 1,789 2,320 2,154 729 582
Income (loss) from continuing operations............. (123) (264) (690) (434) 945
Discontinued operations.............................. -- -- -- (509) (412)
Net (loss) income.................................... (123) (264) (690) (943) 533
Basic and diluted net (loss) earnings per share from
continuing operations(5)........................... (0.01) (.03) (.08) (.05) .11
Basic and diluted net (loss) earnings per share(5)... (0.01) (.03) (.08) (.11) .06
Weighted average shares outstanding (in thousands)...
Basic............................................. 9,582 7,899 8,195 8,485 8,251
Diluted........................................... 9,582 7,899 8,195 8,485 8,846
Supplemental financial data:
Ratio of earnings to fixed charges(6)................ n/a n/a n/a n/a 7.62 to 1
Deficiency(5)........................................ $ (339) $ (141) $(1,032) $ (281) n/a
Cash flows from operating activities................. 3,701 4,382 2,630 (846) $ (759)

At December 31,
----------------------------------------------
2002(1) 2001(2) 2000(3) 1999 1998
------- ------- ------- ------- ----------
(dollars in thousands)
Balance sheet information:
Working capital...................................... $ 6,277 $ 8,063 $10,690 $14,504 $ 372
Total assets......................................... 46,677 53,030 54,954 56,448 15,475
Short-term debt...................................... 2,120 2,826 3,776 2,788 1,585
Long-term debt....................................... 16,202 18,588 26,101 28,290 1,570
Stockholders equity(4)............................... 9,411 9,821 7,008 9,038 7,557

- --------
(1) Effective January 1, 2002, we adopted Statement of Financial Accounting
Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets". As a
result, we ceased amortization of goodwill and indefinite life intangibles,
effective January 1, 2002, that totaled $476,000 in fiscal year 2001.
(2) During December 2001, we received approximately $4.4 million of gross
proceeds from equity transactions.
(3) During fiscal 2000, depreciation and goodwill increased by $600,000 due to
the acquisition of Kirk & Blum and kbd/Technic, whose results of operations
are included with their respective dates of acquisition.
(4) Effective January 1, 2001, we adopted Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended.
(5) Basic and diluted earnings (loss) per common share are calculated by
dividing income (loss) by the weighted average number of common shares
outstanding during the period.
(6) For purposes of determining the ratio of earnings to fixed charges,
"earnings" are defined as income (loss) from continuing operations before
income taxes less minority interest plus fixed charges. "Fixed charges"
consist of interest expense on all indebtedness and that portion of
operating lease rental expense that is representative of the interest
factor. "Deficiency" is the amount by which fixed charges exceeded earnings.

Item 7. Management's Discussion and Analysis of Financial Conditions and
Results of Operations

Critical Accounting Policies

Our consolidated financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America. The
preparation of these financial statements requires the use of estimates,
judgments, and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the periods presented. We believe that, of our
significant accounting policies, the following accounting policies involve a
higher degree of judgments, estimates, and complexity.

Revenue Recognition

A substantial portion of our revenue is derived from contracts, which are
accounted for under the percentage of completion method of accounting. This
method requires a higher degree of management judgment and use of estimates
than other revenue recognition methods. The judgments and estimates involved
include management's ability to accurately estimate the contracts percentage of
completion and the reasonableness of the estimated costs to complete, among
other factors, at each financial reporting period. In addition, certain
contracts are highly dependent on the work of contractors and other
subcontractors participating in a project, over which we have no or limited
control, and their performance on such project could have an adverse effect on
the profitability of our contracts. Delays resulting from these contractors and
subcontractors, changes in the scope of the project, weather, and labor
availability also can have an effect on a contracts profitability.

Contract costs include direct material, labor costs, and those indirect
costs related to contract performance, such as indirect labor, supplies, and
other overhead expenses. Selling and administrative expenses are charged to
expense as incurred. Provisions for estimated losses on uncompleted contracts
are made in the period in which such losses are determined. Changes to job
performance, job conditions, and estimated profitability may result in
revisions to contract revenue and costs and are recognized in the period in
which the revisions are made. We provided for estimated losses on uncompleted
contracts of $123,000 and $108,000 at December 31, 2002 and 2001, respectively.

Impairment of Long-Lived Assets, including Goodwill

We review the carrying value of our long-lived assets held for use and
assets to be disposed of. For all assets excluding goodwill and intangible
assets with indefinite lives, the carrying value of a long-lived asset is
considered impaired if the sum of the undiscounted cash flows is less than the
carrying value of the asset. If this occurs, an impairment charge is recorded
for the amount by which the carrying value of the long-lived assets exceeds its
fair value. Effective January 1, 2002, we adopted SFAS No. 142, "Goodwill and
Other Intangible Assets". Under this new accounting standard, we will no longer
amortize our goodwill and intangible assets with an indefinite life and will be
required to complete an annual impairment test. We have determined that we have
a single reporting unit, as defined in SFAS No. 142, within our Company. We
completed our impairment test during 2002 as required by this accounting
standard and have not recognized an impairment charge related to the adoption
of this accounting standard in 2002. The impairment test requires us to
forecast our future cash flows, which requires significant judgment. As of
December 31, 2002, we have $9.5 million of goodwill, $.9 million of intangible
assets--finite life, $1.4 million of indefinite life intangible assets, and
$12.1 million of property, plant, and equipment recorded on the consolidated
balance sheets.

Income Taxes and Tax Valuation Allowances

We record the estimated future tax effects of temporary differences between
the tax bases of assets and liabilities and amounts reported in our balance
sheets, as well as operating loss and tax credit carryforwards. We follow very
specific and detailed guidelines in each tax jurisdiction regarding the
recoverability of any tax assets

recorded on the balance sheet and will provide necessary valuation allowances
as required. We regularly review our deferred tax assets for recoverability
based on historical taxable income, projected future taxable income, the
expected timing of the reversals of existing temporary differences and tax
planning strategies. If we continue to operate at a loss or are unable to
generate sufficient future taxable income, or if there is a material change in
the actual effective tax rates or time period within which the underlying
temporary differences become taxable or deductible, we could be required to
record a valuation allowance against all or a significant portion of our
deferred tax assets resulting in a substantial increase in our effective tax
rate and a material adverse impact on our operating results. Gross deferred tax
assets and gross deferred tax liabilities at December 31, 2002 totaled $2.1
million and $5.7 million, respectively.

Risk Management Activities

We are exposed to market risk including changes in interest rates, currency
exchange rates and commodity prices. We may use derivative instruments to
manage our interest rate and foreign currency exposures. We do not use
derivative instruments for speculative or trading purposes. We may enter into
hedging relationships such that changes in the fair values or cash flows of
items and transactions being hedged are expected to be offset by corresponding
changes in the values of the derivatives. Accounting for derivative instruments
is complex, as evidenced by the significant interpretations of the primary
accounting standard, and continues to evolve. As of December 31, 2002, there
were no significant derivative instruments outstanding.

Pension and Postretirement Benefit Plan Assumptions

We sponsor a pension plan for certain union employees. We also sponsor a
postretirement healthcare benefit plan for certain office employees retiring
before January 1, 1990. Several statistical and other factors that attempt to
anticipate future events are used in calculating the expense and liability
related to these plans. These factors include key assumptions, such as a
discount rate and expected return on plan assets. In addition, our actuarial
consultants use subjective factors such as withdrawal and mortality rates to
estimate these liabilities. The actuarial assumptions we use may differ
materially from actual results due to changing market and economic conditions,
higher or lower withdrawal rates or longer or shorter life spans of
participants. These differences may result in a significant impact to the
amount of pension or postretirement healthcare benefit expenses we have
recorded or may record in the future. An analysis for the expense associated
with our pension plan is difficult due to the variety of assumptions utilized.
For example, one of the significant assumptions used to determine projected
benefit obligation is the discount rate. At December 31, 2002, a 25 basis point
change in the discount rate would change the projected benefit obligation by
approximately $100,000, and the annual post-retirement expense by less than
$100,000. Additionally, a 25 basis point change in the expected return on plan
assets would change the projected benefit obligation by approximately $100,000.

Other Significant Accounting Policies

Other significant accounting policies, not involving the same level of
uncertainties as those discussed above, are nevertheless important to an
understanding of our financial statements. See Note 1 to the consolidated
financial statements, Summary of Significant Accounting Policies, which
discusses accounting policies that must be selected by us when there are
acceptable alternatives.

The following discussion of our results of operations and financial
condition should be read in conjunction with the Consolidated Financial
Statements and Notes thereto (including Note 18, Segment and Related
Information) and other financial information included elsewhere in this report.

Results of Operations

Our consolidated statements of operations for the years ended December 31,
2002, 2001 and 2000 reflect our operations consolidated with the operations of
our subsidiaries.

The following table sets forth line items shown on the consolidated
statements of operations, as a percentage of total net sales, for the years
ended December 31, 2002, 2001 and 2000. This table should be read in
conjunction with the consolidated financial statements and notes thereto.

Year Ended
December 31,
-------------------
2002 2001 2000
----- ----- -----

Net Sales...................................................... 100.0 100.0 100.0
Costs and expenses:
Cost of Sales............................................... 79.8 79.6 79.9
Selling and administrative.................................. 15.1 14.5 15.5
Depreciation and amortization............................... 2.3 2.6 2.4
----- ----- -----
97.2 96.7 97.8
Income from operations before other income and interest expense 2.8 3.3 2.2
Other income (expense)......................................... .3 .4 .9
Interest expense............................................... 3.5 3.9 4.2
----- ----- -----
Loss before income taxes....................................... (.4) (.2) (1.1)
Provision (benefit) for income taxes........................... (.2) .1 (.3)
----- ----- -----
Net Loss....................................................... (.2) (.3) (.8)
===== ===== =====

2002 vs. 2001 Consolidated net sales decreased 13.3%, or $12.1 million to
$78.9 million. Sales were down mainly because of (a) the weakness in the
industrial segment of the U.S. economy, (b) divestitures of two non-core
businesses, Air Purator Corporation and Busch Martec that amounted to $2.0
million of decreased sales, and (c) the abandonment of our expansion into the
highly engineered specialty piping for automotive paint facilities started in
2001, which amounted to $3.5 million of decreased sales.

One of our targeted growth areas, thermal oxidation technology, sold under
the CECO Abatement trade name, had a strong first full year of operations, by
generating over $5.0 million of orders from alternative energy providers.

We began 2002 with a strong backlog ($18.6 million). Orders booked in 2002
were $75.0 million compared with $96.0 million in 2001. The decline resulted
from a reduction in large orders from automotive manufacturers and from the
metals industries. Smaller orders from customers who represent a cross section
of industrial customers in the United States also decreased.

Sales of our fiberbed mist eliminator technology, continued to penetrate
further into automotive component manufacturers.

Gross profit excluding depreciation was $15.9 million in 2002 compared with
$18.5 million in 2001. Gross profit as a percentage of sales was 20.2% in 2002
compared with 20.4% in 2001. Even though we (a) increased margins in 2002 on
turnkey projects through improved project management and (b) reduced factory
overhead in 2002, the decline in sales caused a net decrease in margin. Gross
profit also includes the favorable impact of a recovery of a claim from a 2001
contract and the impact from the sale of APC operating assets.

Selling and administrative expenses decreased by $1.3 million to $11.9
million in 2002. Selling and administrative expenses, as a percentage of
revenues for 2002 were 15.1% compared to 14.5% in 2001. The decrease is due to
cost control and reduction in our workforce. We reduced our workforce in May
2002 and again in September 2002 reflecting the consolidation of certain
functions, efficiencies and lower sales volume. On an annualized basis, the
full impact on cost control initiatives is expected to result in a savings of
approximately $2.0 million, which began to be realized during the third quarter
of 2002. The 2001 period included certain non-recurring adjustments of $370,000
related to a customer bankruptcy and other contingencies which reduced selling
and administrative expenses.

Depreciation and amortization decreased $0.5 million to $1.8 million in year
ended December 31, 2002 primarily resulting from the implementation of
Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and
Other Intangible Assets". SFAS No. 142 requires that ratable amortization of
goodwill and intangible assets with indefinite lives be replaced with annual
tests for impairment and that intangible assets with finite lives should
continue to be amortized over their useful lives.

Other income for year ended December 31, 2002 was $0.2 million compared with
income of $0.4 million during the same period of 2001. The other income in 2002
is the result of a fair market value adjustment during the second quarter to a
liability recorded in connection with the issuance of the Warrants. The
Warrants were issued along with our issuance of 706,668 shares of common stock
on December 31, 2001 to the Investors. This liability is accounted for at fair
market value and adjustments in future quarters could result in an increase to
the liability and a corresponding charge in income. We no longer hold shares of
marketable equity securities, which made up the majority of the other income
earned during 2001.

Interest expense decreased $0.8 million to $2.7 million during 2002 compared
to the same period of 2001. The decrease is principally due to lower borrowing
levels and decreased rates under the bank credit facility.

Federal and state income tax benefit was $0.2 million during 2002 compared
with a tax provision of $0.1 million for the same period in 2001. The effective
income tax rate for 2002 was 64% compared with 98% in the same period of 2001.
The effective tax rate during 2002 is affected by state tax benefits and by
certain permanent differences including non-deductible interest expense. The
effective income tax rate during 2001 was affected by non-deductible goodwill
amortization and interest expense.

Net loss for 2002 and 2001 was ($123,000) and ($264,000), respectively.

2001 vs. 2000 Net sales increased 1.3%, or $1.2 million to $91.0 million,
driven by increased sales of fiber bed mist eliminator products due to the
successful implementation of a new marketing campaign focusing on nurturing
relationships and increasing repeat orders. The increase in sales was offset by
a $.8 million decrease in sales from APC. The market for APC's high-temperature
baghouse media continued to decline during 2001 compared to 2000. As of
December 31, 2001, we sold the operating assets of APC as discussed previously.
The lower volume of orders from steel producers, foundries and automotive
manufacturers, also affected sales as we experienced a decline of such orders
during the second half of the year. We concluded 2001 with a backlog of $18.6
million.

Gross profit excluding depreciation increased $0.4 million to $18.5 million
in 2001 compared with $18.1 million in 2000. Gross profit as a percentage of
revenues, was 20.4% in 2001 compared with 20.1% in 2000. 2001 gross margin was
generally consistent with 2000 gross margin, except for APC, which decreased 8
percentage points. During the second quarter of 2001, we expanded our design
build capabilities into specialty piping for automotive finishing facilities.
In connection with this expansion, we entered into a contract that resulted in
a contract loss of $1.3 million. Accordingly, a charge was recorded to cost of
sales for that amount. We abandoned our plans to continue our expansion in this
area. Gross profit margin was negatively impacted by about one percentage point
because of this charge.

Selling and administrative expenses decreased by $0.7 million to $13.2
million in 2001 from $13.9 million in 2000. Selling and administrative
expenses, as a percentage of revenues for 2001, was 14.5% compared to 15.5% in
2000. This reduction results from the cost savings identified in 2000, the
reversal of a reserve held in connection with a customer bankruptcy ($0.2
million), and the reversal of a $0.2 million contingency. As management
anticipated, the cost reductions identified resulted in a favorable impact in
2001. Depreciation and amortization increased by $0.1 million to $2.3 million
in 2001.

Other income decreased by $0.4 million to $0.4 million during 2001 compared
with $0.8 million in 2000. The decrease was a result of reduced investment
income from the Company's holdings in marketable equity securities, which were
sold in the first half of 2001.

Interest expense decreased by $0.3 million to $3.5 million during 2001
compared with $3.8 million in 2000 principally due to lower borrowing levels
and decreased rates under the bank credit facility.

Federal and state income tax provision was $0.1 million in 2001 compared
with a tax benefit of $0.3 million in 2000. The effective income tax rate in
2001 was 98%. The effective income tax rate was affected by non-deductible
goodwill amortization and interest expense particularly in years when income
(loss) from operations before income taxes and minority interest is low in
comparison to the non-deductible items.

Net loss for the year ended December 31, 2001 was $0.3 million compared with
a net loss of $0.7 million in 2001.

Backlog

Our backlog consists of orders we have received for products and services we
expect to ship and deliver within the next 12 months. Our backlog, as of
December 31, 2002 was $14.6 million compared to $18.6 million as of December
31, 2001. There can be no assurances that backlog will be replicated or
increased or translated into higher revenues in the future. The success of our
business depends on a multitude of factors that are out of our control. Our
operating results can be affected by the introduction of new products, new
manufacturing technologies, rapid change of the demand for its products,
decrease in average selling price over the life of the product as competition
increases and our dependence on efforts of intermediaries to sell a portion of
our product.

Financial Condition, Liquidity and Capital Resources

At December 31, 2002, cash and cash equivalents totaled $194,000 compared
with $53,000 at December 31, 2001. Cash provided by operating activities for
the year ended December 31, 2002, was $3.7 million in 2002 compared with cash
provided of $4.4 million for the same period in 2001.

Total bank and related debt as of December 21, 2002 was $14.3 million, a
decrease of $3.4 million, due to net repayments under bank credit facilities
and payments made with respect to other notes payable. Unused credit
availability at December 31, 2002, was $3.1 million under our bank line of
credit.

The senior secured credit facility was amended in March 2002 and November
2002 by reducing the minimum coverage requirements under several financial
covenants through December 31, 2003, raising interest rates by 3%, reducing
scheduled principal payments in 2002 through 2004 and changing the maturity of
the revolving line of credit to January 2004 from April 2003. In consideration
for these amendments, additional fees of $160,000 were paid to the lenders.

As of December 31, 2002, we were in compliance with all of our debt
covenants. During December 2001, as discussed below, we raised additional
capital of $4.4 million used to reduce the principal balance of the credit
facility.

Investing activities provided cash of $0.2 million during 2002 compared with
cash used of $0.8 million for the same period in 2001. We received $470,000
from the sale of APC's assets, offset by capital expenditures for property and
equipment, and leasehold improvements of $0.2 million during 2002, primarily
for manufacturing equipment. Capital expenditures for property and equipment
are anticipated to be in the range of $0.5 million to $0.9 million for 2003 and
will be funded by cash from operations and our line of credit borrowings.

Financing activities used cash of $3.8 million during 2002 compared with
$4.2 million used by financing activities during the same period of 2001. $3.4
million was used to pay down long-term debt. In the fourth quarter of 2001, we
received gross proceeds of $2.1 million and issued 706,668 shares of common
stock to the Investors. Also, in the fourth quarter, Green Diamond and two
non-affiliated third parties exercised warrants to purchase 1,000,000 shares of
CECO stock generating gross proceeds of $2.3 million. Under the Investors'
Subscription Agreement, we are required to issue shares of our common stock
based on an earnings formula (as set forth in the Subscription Agreement)
computed from fiscal year 2002 results. As a result we will issue approximately
382,000 shares of common stock to the Investors during 2003. In February 2003,
we accepted an offer, expiring September 2003, to sell our Cincinnati property.
This agreement can be cancelled at any time by the buyer up to the expiration
date. However, if this agreement is consummated, excess proceeds could be used
to reduce our debt.

New Accounting Standards

In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 141, "Business Combinations". SFAS No. 141 requires that all business
combinations be accounted for under the purchase method only and that certain
acquired intangible assets in a business combination be recognized as assets
apart from goodwill. Upon adoption of SFAS No. 141, on January 1, 2002, the
Company's intangible asset of $1,392 related to the workforce was reclassified
to goodwill under the criteria of that standard and is no longer considered a
separate intangible asset.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations," requiring that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is incurred if a
reasonable estimate of fair value can be made. The associated asset retirement
costs are capitalized as part of the carrying amount of the long-lived asset.
Implementation of SFAS No. 143 is required for fiscal 2003. The adoption of
this statement on January 1, 2003, did not have an effect on our financial
position or results of operations.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets", which superceded SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of". The primary difference is that goodwill has been removed from the
scope of SFAS No. 144. It also broadens the presentation of discontinued
operations to include a component of an entity rather than a segment of a
business. A component of an entity comprises operations and cash flows that can
clearly be distinguished operationally and for financial accounting purposes
from the rest of the entity. We adopted SFAS No. 144 on January 1, 2002. The
adoption did not have a significant effect on our financial position or results
of operations.

In April 2002, the FASB issued Statement No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." Among other amendments to previous pronouncements, which have
already taken effect, a provision in the Statement requiring certain gains and
losses from extinguishment of debt to be reclassified from extraordinary items,
is effective January 1, 2003. The adoption of this statement on January 1,
2003, did not have an effect on our financial position or results of operations.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities," which is effective for exit or disposal
activities initiated after December 31, 2002. SFAS No. 146

addresses financial accounting and reporting for costs associated with exit or
disposal activities and nullifies Emerging Issues Task Force Issue No. 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)."

In December 2002, the FASB issued Statement No. 148, "Accounting for
Stock-Based Compensation--Transition and Disclosure" which we must adopt in
2003. The Statement provides alternative methods of transition for a voluntary
change to the fair value method and, at this time, we do not anticipate making
such voluntary change.

In November 2002, the FASB issued Interpretation No. 45 ("FIN 45")
"Guarantor's Accounting and Disclosure requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others." FIN 45 elaborates on the
existing disclosure requirements for most guarantees, including loan
guarantees. It also clarifies that at the time a company issues a guarantee,
the company must recognize an initial liability for the fair value, or market
value, of the obligations it assumes under that guarantee. However, the
provisions related to recognizing a liability at inception of the guarantee for
the fair value of the guarantor's obligations does not apply to product
warranties or to guarantees accounted for as derivatives. The initial
recognition and initial measurement provisions apply on a prospective basis to
guarantees issued or modified after December 31, 2002. The disclosure
requirements of FIN 45 are effective for financial statements of interim or
annual periods ending after December 15, 2002 and had no effect on our
financial statement disclosures for 2002.

In January 2003, the FASB issued Interpretation No. 46 ("FIN 46")
"Consolidation of Variable Interest Entities". Until this interpretation, a
company generally included another entity in its consolidated financial
statement only if it controlled the entity through voting interests. FIN 46
requires a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable interest
entity's activities or entitled to receive a majority of the entity's residual
returns. FIN 46 applies to variable interest entities created after January 31,
2003, and to variable interest entities in which no enterprise obtains an
interest in after that date. A public entity with a variable interest in a
variable interest entity created before February 1, 2003, shall apply the
provisions of this interpretation (other than the transition disclosure
provisions in paragraph 26) to that entity no later than the beginning of the
first interim or annual reporting period beginning after June 15, 2003. The
related disclosure requirements are effective immediately and had no effect on
our financial statement disclosures for 2002. The impact of this interpretation
will not have an effect on our financial condition or results of operations, as
we do not have any variable interest entities.

Forward-Looking Statements

We desire to take advantage of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995 and are making this cautionary
statement in connection with such safe harbor legislation. This Form 10-K, the
Annual Report to Shareholders or Form 8-K of CECO or any other written or oral
statements made by or on our behalf may include forward-looking statements
which reflect our current views with respect to future events and financial
performance. The words "believe," "expect," "anticipate," "intends,"
"estimate," "forecast," "project," "should" and similar expressions are
intended to identify "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. All forecasts and projections
in this Form 10-K are "forward-looking statements," and are based on
management's current expectations of our near-term results, based on current
information available pertaining to us.

We wish to caution investors that any forward-looking statements made by or
on our behalf are subject to uncertainties and other factors that could cause
actual results to differ materially from such statements. These uncertainties
and other risk factors include, but are not limited to: changing economic and
political conditions in the United States and in other countries, changes in
governmental spending and budgetary policies, governmental laws and regulations
surrounding various matters such as environmental remediation, contract
pricing, and international trading restrictions, customer product acceptance,
and continued access to capital markets, and foreign currency risks. We wish to
caution investors that other factors might, in the future, prove to be important

in affecting our results of operations. New factors emerge from time to time
and it is not possible for management to predict all such factors, nor can it
assess the impact of each such factor on the business or the extent to which
any factor, or a combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements. Investors
are further cautioned not to place undue reliance on such forward-looking
statements as they speak only to our views as of the date the statement is
made. We undertake no obligation to publicly update or revise any
forward-looking statements, whether because of new information, future events
or otherwise.

Item 7a. Quantitative and Qualitative Disclosure About Market Risk

Risk Management Activities

We are exposed to market risk including changes in interest and commodity
prices. We may use derivative instruments to manage our interest rate
exposures. We do not use derivative instruments for speculative or trading
purposes. Generally, we enter into hedging relationships such that changes in
the fair values of cash flows of items and transactions being hedged are
expected to be offset by corresponding changes in the values of the derivatives.

Interest Rate Management

We may use interest rate swap contracts to adjust the proportion of our
total debt that is subject to variable interest rates. Our interest rate swap
contract matured in 2002 and was not renewed. Under our interest rate swap
contract, we agree to pay an amount equal to a specified fixed-rate of interest
for a certain notional amount and receive in return an amount equal to a
variable-rate. The notional amounts of the contract are not exchanged. No other
cash payments are made unless the contract is terminated before maturity. These
interest rate swap contracts are designated as cash flow hedges against changes
in the amount of future cash flows associated with our interest payments on
variable-rate debt. Accordingly, when outstanding, they are reflected at fair
value in our balance sheets and the related changes in fair value on these
contracts, net of tax, are recorded as a component of Accumulated Other
Comprehensive Income (Loss) in our balance sheets. To the extent that any of
these contracts are not considered to be perfectly effective in offsetting the
change in the value of the interest payments being hedged, any changes in fair
value relating to the ineffective portion of these contracts are immediately
recognized in our income statement. The net effect of this accounting on our
operating results is that interest expense on a portion of variable-rate debt
being hedged is generally recorded based on fixed interest rates. This swap
effectively changed the interest rate exposure of $9.8 million of our floating
rate debt to a weighted fixed rate of 6.96% plus the applicable spread during
the period in which the interest rate swap was outstanding.

The remaining amount of loans outstanding under the Credit Agreement bear
interest at the floating rates as described in Note 9 to the consolidated
statements contained in Item 8.

At December 31, 2002, there were no interest rate swap contracts
outstanding. At December 31, 2001, we had interest rate swap contracts on $9.8
million notional amount of indebtedness. As of December 31, 2001, we had $.3
million in unrealized losses resulting from the swap contracts. The unrealized
losses, net of tax, are recorded in Accumulated Other Comprehensive Income
(Loss) in our balance sheets.

Although no collateral is held or exchanged for these contracts, interest
rate swap contracts were entered into with a major financial institution in
order to minimize our counterparty credit risk.

The following table presents information of all dollar-denominated interest
rate instruments. The fair value presented below approximates the cost to
settle the outstanding contract.

Expected Maturity Date
------------------------------------------------------------
2003 2004 2005 2006 2007 Thereafter Total Fair Value
----- ------ ---- ----- ---- ---------- ------ ----------
($ in thousands)

Liabilities
Variable Rate Debt ($).. 2,094 11,156 900 -- -- -- 14,150 14,150
Average Interest Rate. 7.9% 8.5% 9.8% 6.6% 6.6%
Subordinated Debt....... -- -- -- 3,750 -- -- 3,750 4,264
Average Interest Rate. -- -- -- 17.8% -- -- 17.8% 18.0%
Fixed Rate Debt ($)..... 26 26 26 26 26 4 134 134
Average Interest Rate. 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%

Credit Risk

As part of our ongoing control procedures, we monitor concentrations of
credit risk associated with financial institutions with which we conduct
business. Credit risk is minimal as credit exposure is limited with any single
high quality financial institution to avoid concentration. We also monitor the
creditworthiness of our customers to which we grant credit terms in the normal
course of business. Concentrations of credit associated with these trade
receivables are considered minimal due to our geographically diverse customer
base. Bad debts have not been significant. We do not normally require
collateral or other security to support credit sales.

Item 8. Financial Statements and Supplementary Data

The Company's consolidated financial statements of CECO Environmental Corp.
and subsidiaries for years ended December 31, 2002, 2001 and 2000 and other
data are included in this Report following the signature page of this Report:

Cover Page............................................................................ F-1
Independent Auditors' Report.......................................................... F-2
Consolidated Balance Sheets........................................................... F-3
Consolidated Statements of Operations................................................. F-4
Consolidated Statements of Shareholders' Equity....................................... F-5
Consolidated Statements of Cash Flows................................................. F-6 to F-7
Notes to Consolidated Financial Statements for the Years Ended December 31, 2002, 2001
and 2000............................................................................ F-8 to F-25

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None.

PART III

Item 10. Directors of the Registrant

Paul Voet resigned as director of CECO in November 2002. As of February 2,
2003, Melvin F. Lazar has served as a director. Additional information with
respect to Directors may be found under the caption "Election of Directors" and
"Compliance with Section 16(a) of the Exchange Act" of the Company's Proxy
Statement for the Annual Meeting of Shareholders to be held June 11, 2003 (the
"Proxy Statement"). Such information is incorporated herein by reference.

Item 11. Executive Compensation

The information in the Proxy Statement set forth under the caption
"Executive Compensation" and "Board of Directors and its Committees" is
incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management

EQUITY COMPENSATION PLAN INFORMATION

December 31, 2002 (a) (b) (c)
Number of securities
remaining available for
Weighted-average future issuance under
Number of securities to exercise price of equity compensation
be issued upon exercise outstanding options, plans (excluding
of outstanding options, warrants and rights, securities reflected in
Plan Category warrants and rights compensation plans column (a))
------------- ----------------------- -------------------- -----------------------

Equity compensation plans approved by security
holders..................................... 166,000 $2.60 1,334,000
Equity compensation plans not approved by
security holders............................ 3,285,000(1) $2.42 None
TOTAL......................................... 3,451,000 $2.43 1,334,000

(1) Includes:
(a) a warrant to purchase 448,000 shares of Common Stock for $2.9375 per
share granted to Mr. Richard Blum on December 7, 1999, in connection
with the acquisition of Kirk & Blum and kbd/Technic. This warrant became
exercisable on December 7, 2000 with respect to 112,000 of such shares,
on December 7, 2001 with respect to 112,000 of such shares, on December
7, 2002 with respect to another 112,000 of such shares and becomes
exercisable with respect to the remaining 112,000 shares on December 7,
2003;
(b) a warrant to purchase 335,000 shares of Common Stock for $2.9375 per
share granted to Mr. David Blum on December 7, 1999, in connection with
the acquisition of Kirk & Blum and kbd/Technic. This warrant became
exercisable on December 7, 2000 with respect to 83,370 of such shares,
on December 7, 2001 with respect to 83,370 of such shares, on December
7, 2002 with respect to another 83,370 of such shares and becomes
exercisable with respect to the remaining 83,370 shares on December 7,
2003;
(c) a warrant to purchase 217,000 shares of Common Stock for $2.9375 per
share granted to Mr. Larry Blum on December 7, 1999, in connection with
the acquisition of Kirk & Blum and kbd/Technic. This warrant became
exercisable on December 7, 2000 with respect to 54,250 of such shares,
on December 7, 2001 with respect to 54,250 of such shares, on December
7, 2002 with respect to another 54,250 of such shares and becomes
exercisable with respect to the remaining 54,250 shares on December 7,
2003;
(d) 25,000 shares of common stock that Mr. Jason DeZwirek can purchase on or
prior to October 5, 2011 at a price of $2.01 per share pursuant to
options granted to Mr. Jason DeZwirek on October 5, 2001;
(e) (i) 750,000 shares of common stock that Mr. Phillip DeZwirek can
purchase on or prior to November 7, 2006 at a price of $1.75 per share
pursuant to warrants granted to Mr. Phillip DeZwirek on November 7,
1996; (ii) 250,000 shares that may be purchased pursuant to warrants
granted January 14, 1998 at a price of $2.75 per share prior to January
14, 2008; (iii) 250,000 shares of common stock that may be purchased by
Mr. Phillip DeZwirek pursuant to warrants granted September 14, 1998 at
a price of $1.626 per share prior to September 14, 2008; (iv) 500,000
shares that may be purchased pursuant to warrants granted to Mr. Phillip
DeZwirek January 22, 1999, which are exercisable prior to January 22,
2009 at a price of $3.00 per share; and (v) 500,000 shares that may be
purchased pursuant to warrants granted to Mr. Phillip DeZwirek August
14, 2000, which are exercisable prior to August 14, 2010 at a price of
$2.0625 per share; and
(f) 10,000 shares of common stock that Mr. Donald Wright can purchase
pursuant to options granted June 30, 1998 at a price per share of $2.75
prior to June 30, 2008.

The information set forth under the caption "Beneficial Ownership of
Shares," "Security Ownership of Management" and "Changes in Control" of the
Proxy Statement is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions

The information set forth under the caption "Certain Transactions" of the
Proxy Statement is incorporated herein by reference.

Item 14. Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that
information required to be disclosed in reports filed under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the specified time periods. Within 90 days prior to the date of
this report, our Chief Executive Officer and Chief Financial Officer evaluated,
with the participation of our management, the effectiveness of our disclosure
controls and procedures. Based on the evaluation, which disclosed no
significant deficiencies or material weaknesses, our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures are effective. There were no significant changes in our internal
controls or in other factors that could significantly affect internal controls
subsequent to the evaluation.

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) 1. Financial statements are set forth in this report following the
signature page of this report.

2. Financial statement schedules have been omitted since they are either not
required, not applicable, or the information is otherwise included.

3. Exhibits

2.1 Agreement and Plan of Reorganization dated August 13, 1997 between
CECO, the Company and Steven I. Taub. (Incorporated by reference from Form
10-KSB dated December 31, 1997 of the Company)

2.2 Certificate of Ownership and Merger Merging CECO Environmental Corp.
into CECO Environmental Corp. (Incorporated by reference from Form 10-K dated
December 31, 2001)

2.3 Certificate of Merger of CECO Environmental Corp. into CECO
Environmental Corp. Under Section 907 of the Business Corporation Law.
(Incorporated by reference from Form 10-K dated December 31, 2001)

3(i) Certificate of Incorporation. (Incorporated by reference from Form
10-K dated December 31, 2001)

3(ii) Bylaws. (Incorporated by reference from Form 10-K dated December 31,
2001)

4.1 CECO Filters, Inc. Savings and Retirement Plan. (Incorporated by
reference from CECO's Annual Report onForm 10-K for the fiscal year ended
December 31, 1990)

4.2 CECO Environmental Corp. 1997 Stock Option Plan and Amendment.
(Incorporated by reference from Form S-8, Exhibit 4, filed March 24, 2000, of
the Company)

4.3 1999 CECO Environmental Corp. Employee Stock Purchase Plan.
(Incorporated by reference from Form S-8, filed September 22, 1999 of the
Company)

10.1 Mortgage dated October 28, 1991 by CECO and the Montgomery County
Industrial Development Corporation ("MCIDC"). (Incorporated by reference from
CECO's Annual Report on Form 10-K for the fiscal year ended December 31, 1991)

10.2 Installment Sale Agreement dated October 28, 1991 between CECO and
MCIDC. (Incorporated by reference from CECO's Annual Report on Form 10-K for
the fiscal year ended December 31, 1991)

10.3 Lease dated as of March 10, 1992 between CECO and BTR North America,
Inc. (Incorporated by reference from CECO's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991)

10.4 Consulting Agreement dated as of January 1, 1994 and effective as of
July 1, 1994 between the Company and CECO. (Incorporated by reference to Form
10-QSB dated September 30, 1994 of the Company)

10.5 Warrant Agreement dated as of November 7, 1996 between the Company and
Phillip DeZwirek. (Incorporated by reference from the Company's Form 10-KSB
dated December 31, 1996)

10.6 Warrant Agreement dated as of January 14, 1998 between the Company and
Phillip DeZwirek. (Incorporated by reference from the Company's Form 10-KSB
dated December 31, 1998)

10.7 Asset Purchase Agreement among New Busch Co., Inc., Busch Co. and
Andrew Halapin dated September 9, 1997. (Incorporated by reference from the
Form 8-K filed by CECO on October 9, 1997 with respect to event of September
25, 1997)

10.8 Employment, Non-Compete and Confidentiality Agreement between New
Busch Co., Inc. and Andrew M. Halapin dated September 25, 1997. (Incorporated
by reference from the Form 8-K filed by CECO on October 9, 1997 with respect to
event of September 25, 1997)

10.9 Employment Agreement and Addendum to Employment Agreement between CECO
and Steven I. Taub dated September 30, 1997. (Incorporated by reference from
the Company's Quarterly Report on Form 10-QSB for the quarter ended September
30, 1997)

10.10 Lease between Busch Co. and Richard Roos dated January 10, 1980,
Amendment to Lease dated August 1, 1988 between Busch Co. and Richard Roos,
Amendment to Lease dated May 21, 1991 between Richard A. Roos and Busch Co. and
Amendment to Lease dated June 1, 1991 between JDA, Inc. and Busch Co.
(Incorporated by reference from the Company's Form 10-KSB dated December 31,
1997)

10.11 Assignment of Lease dated September 25, 1997 among Richard A. Roos,
JDA, Inc., Busch Co. and New Busch Co., Inc. (Incorporated by reference from
the Company's Form 10-KSB dated December 31, 1998)

10.12 Lease between Joseph V. Salvucci and Busch Co. dated October 17,
1994. (Incorporated by reference from the Company's Form 10-KSB dated December
31, 1997)

10.13 Warrant Agreement dated as of September 14, 1998 between the Company
and Phillip DeZwirek. (Incorporated by reference from the Company's Form 10-KSB
dated December 31, 1998)

10.14 Warrant Agreement dated as of January 22, 1999 between the Company
and Phillip DeZwirek. (Incorporated by reference from the Company's Form 10-KSB
dated December 31, 1998)

10.15 Option for the Purchase of Shares of Common Stock for Donald Wright
dated June 30, 1998. (Incorporated by reference from the Company's Form 10-KSB
dated December 31, 1998)

10.16 Stock Purchase Agreement, dated as of December 7, 1999, among CECO
Environmental Corp., CECO Filters, Inc. and the Stockholders of The Kirk & Blum
Manufacturing Company and kbd/Technic, Inc. and Richard J. Blum, Lawrence J.
Blum and David D. Blum. (Incorporated by reference from the Company's Form 8-K
filed December 22, 1999 with respect to event that occurred December 7, 1999)

10.17 Employment Agreement, dated as of December 7, 1999, between Richard
J. Blum and CECO Group, Inc. (Incorporated by reference from the Company's Form
8-K filed December 22, 1999 with respect to event that occurred December 7,
1999)

10.18 Stock Purchase Warrant, dated as of December 7, 1999, granted by CECO
Environmental Corp. to Richard J. Blum. (Incorporated by reference from the
Company's Form 8-K filed December 22, 1999 with respect to event that occurred
December 7, 1999)

10.19 Employment Agreement, dated as of December 7, 1999, between Lawrence
J. Blum and The Kirk & Blum Manufacturing Company. (Incorporated by reference
from the Company's Form 8-K filed December 22, 1999 with respect to event that
occurred December 7, 1999)

10.20 Stock Purchase Warrant, dated as of December 7, 1999, granted by CECO
Environmental Corp. to Lawrence J. Blum. (Incorporated by reference from the
Company's Form 8-K filed December 22, 1999 with respect to event that occurred
December 7, 1999)

10.21 Employment Agreement, dated as of December 7, 1999, between David D.
Blum and The Kirk & Blum Manufacturing Company. (Incorporated by reference from
the Company's Form 8-K filed December 22, 1999 with respect to event that
occurred December 7, 1999)

10.22 Stock Purchase Warrant, dated as of December 7, 1999, granted by CECO
Environmental Corp. to David D. Blum. (Incorporated by reference from the
Company's Form 8-K filed December 22, 1999 with respect to event that occurred
December 7, 1999)

10.23 Credit Agreement, dated as of December 7, 1999, among PNC Bank,
National Association, The Fifth Third Bank, and Bank One, N.A. and PNC Bank,
National Association as agent, and CECO Group, Inc., CECO Filters, Inc., Air
Purator Corporation, New Busch Co., Inc., The Kirk & Blum Manufacturing Company
and kbd/Technic, Inc. (Incorporated by reference from the Company's Form 8-K
filed December 22, 1999 with respect to event that occurred December 7, 1999)

10.24 Promissory Note in the amount of $4,000,000, dated as of December 7,
1999, made by CECO Environmental Corp. and payable to Green Diamond Oil Corp.
(Incorporated by reference from the Company's Form 8-K filed December 22, 1999
with respect to event that occurred December 7, 1999)

10.25 Promissory Note in the amount of $500,000, dated as of December 7,
1999, made by CECO Environmental Corp. and payable to Harvey Sandler.
(Incorporated by reference from the Company's Form 8-K filed December 22, 1999
with respect to event that occurred December 7, 1999)

10.26 Promissory Note in the amount of $500,000, dated as of December 7,
1999, made by CECO Environmental Corp. and payable to ICS Trustee Services,
Ltd. (Incorporated by reference from the Company's Form 8-K filed December 22,
1999 with respect to event that occurred December 7, 1999)

10.27 Warrant Agreement, dated as of December 7, 1999, among CECO
Environmental Corp. and Green Diamond Oil Corp., Harvey Sandler and ICS Trustee
Services, Ltd. (Incorporated by reference from the Company's Form 8-K filed
December 22, 1999 with respect to event that occurred December 7, 1999)

10.28 Kbd/Technic, Inc. Voting Trust Agreement, dated as of December 7,
1999, Richard J. Blum, trustee. (Incorporated by reference from the Company's
Form 8-K filed December 22, 1999 with respect to event that occurred December
7, 1999)

10.29 Amendment to Credit Agreement dated March 28, 2000. (Incorporated by
reference from the Company's Form 10-KSB dated December 31, 1999)

10.30 Letter Agreement between PNC Bank and CECO Group, Inc., dated
September 28, 2000. (Incorporated by reference from the Company's Form 10-KSB
dated December 31, 2000)

10.31 Second Amendment to Credit Agreement dated November 19, 2000.
(Incorporated by reference from the Company's Form 10-KSB dated December 31,
2000)

10.32 Stock Option Agreement for Donald A. Wright dated September 18, 2000.
(Incorporated by reference from the Company's Form 10-KSB dated December 31,
2000)

10.33 Warrant Agreement dated as of August 14, 2000 between the Company and
Phillip DeZwirek. (Incorporated by reference from the Company's Form 10-KSB
dated December 31, 2000)

10.34 Incentive Stock Option Agreement for Marshall J. Morris dated as of
January 20, 2000. (Incorporated by reference from the Company's Form 10-KSB
dated December 31, 2000)

10.35 Separation Agreement and General Release between Steven I. Taub and
the Company. (Incorporated by reference from the Company's Form 10-KSB dated
December 31, 2000)

10.36 Stock Sale Agreement between the Company and Steven I. Taub dated
July 5, 2000. (Incorporated by reference from the Company's Form 10-KSB dated
December 31, 2000)

10.37 Stock Sale Agreement between the Company and Hilary Taub dated July
5, 2000. (Incorporated by reference from the Company's Form 10-KSB dated
December 31, 2000)

10.38 Amended and Restated Replacement Promissory Note in the amount of
$4,000,000, dated as of March 12, 2001, made by CECO Environmental Corp. and
payable to Taurus Capital Markets Ltd. (Incorporated by reference from the
Company's Form 10-KSB dated December 31, 2000)

10.39 Amended and Restated Replacement Promissory Note in the amount of
$500,000, dated as of May 1, 2001, made by CECO Environmental Corp. and payable
to Harvey Sandler. (Incorporated by reference from the Company's Form 10-KSB
dated December 31, 2000)

10.40 Amended and Restated Replacement Promissory Note in the amount of
$500,000, dated as of May 1, 2001, made by CECO Environmental Corp. and payable
to ICS Trustee Services, Ltd. (Incorporated by reference from the Company's
Form 10-KSB dated December 31, 2000)

10.41 Third Amendment to Credit Agreement dated March 30, 2001.
(Incorporated by reference from the Company's Form 10-KSB dated December 31,
2000)

10.42 Fourth Amendment to Credit Agreement dated August 20, 2001.
(Incorporated by reference from Form 10-K dated December 31, 2001)

10.43 Fifth Amendment to Credit Agreement dated March 27, 2002.
(Incorporated by reference from Form 10-K dated December 31, 2001)

10.44 Option for the Purchase of Shares of Common Stock of Jason Louis
DeZwirek dated October 5, 2001. (Incorporated by reference from Form 10-K dated
December 31, 2001)

10.45 Asset Purchase Agreement between Belfiber Co. and Air Purator
Corporation dated December 31, 2001. (Incorporated by reference from Form 10-K
dated December 31, 2001)

10.46 Subscription Agreement dated December 31, 2001. (Incorporated by
reference from the Company's Form 8-K filed January 15, 2002)

10.47 Form of Warrant (for Investors). (Incorporated by reference from the
Company's Form 8-K filed January 15, 2002)

10.48 Form of Warrant (for Finders). (Incorporated by reference from Form
10-K dated December 31, 2001)

10.49 Sixth Amendment to Credit Agreement dated May 14, 2002.

10.50 Seventh Amendment to Credit Agreement dated November 13, 2002.

10.51 Stock Sale and Debt Cancellation Agreement dated September 12, 2002.

10.52 Purchase Agreement dated February 11, 2003. Portions of such document
have been omitted pursuant to a request for confidential treatment and have
been filed separately with the Securities and Exchange Commission.

10.53 Amendment to Pledge Agreement dated November 13, 2002.

21 Subsidiaries of the Company.

99.1 Certification of Chief Executive Officer

99.2 Certification of Chief Financial Officer

(b) Reports on Form 8-K

The Company did not file a report on Form 8-K during the fiscal quarter
ended December 31, 2002.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

CECO ENVIRONMENTAL CORP.

By: /S/ PHILLIP DEZWIREK
-----------------------------
Phillip DeZwirek
Chief Executive Officer
Dated: March 26, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:

Signature Title Date
--------- ----- ----

/S/ PHILLIP DEZWIREK Principal Executive Officer, March 26, 2003
- ----------------------------- Chairman of the Board,
Phillip DeZwirek Director and Chief
Executive Officer

/S/ MARSHALL J. MORRIS Principal Financial and March 26, 2003
- ----------------------------- Accounting Officer, Vice
Marshall J. Morris President-Finance and
Administration; Chief
Financial Officer

/S/ RICHARD J. BLUM President, Director March 26, 2003
- -----------------------------
Richard J. Blum

/S/ JASON LOUIS DEZWIREK Director March 26, 2003
- -----------------------------
Jason Louis DeZwirek

/S/ JOSEPHINE GRIVAS Director March 26, 2003
- -----------------------------
Josephine Grivas

/S/ MELVIN F. LAZAR Director March 26, 2003
- -----------------------------
Melvin F. Lazar

/S/ DONALD WRIGHT Director March 26, 2003
- -----------------------------
Donald Wright

CERTIFICATION

I, Phillip DeZwirek, certify that:

1. I have reviewed this annual report on Form 10-K for the year ended
December 31, 2002, of CECO Environmental Corp.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

(a) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being prepared;

(b) evaluated the effectiveness of the Registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and

(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The Registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the Registrant's auditors and the audit
committee of Registrant's board of directors (or persons performing the
equivalent function):

(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Registrant's ability to record,
process, summarize and report financial data and have identified for the
Registrant's auditors any material weaknesses in internal controls; and

(b) any fraud, whether or not material, that involves management or other
employees who have a similar role in the Registrant's internal controls; and

6. The Registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

/S/ PHILLIP DEZWIREK
-------------------------------
Phillip DeZwirek
Chairman of the Board and
Chief Executive Officer
March 26, 2003

CERTIFICATION

I, Marshall J. Morris, certify that:

1. I have reviewed this annual report on Form 10-K for the year ended
December 31, 2002, of CECO Environmental Corp.;

(b) evaluated the effectiveness of the Registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and

(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

(b) any fraud, whether or not material, that involves management or other
employees who have a similar role in the Registrant's internal controls; and

/S/ MARSHALL J. MORRIS
-------------------------------
Marshall J. Morris
Vice President--Finance and
Administration and
Chief Financial Officer
March 26, 2003

INDEX TO EXHIBITS

2.1 Agreement and Plan of Reorganization dated August 13, 1997 between
CECO, the Company and Steven I. Taub. (Incorporated by reference from Form
10-KSB dated December 31, 1997 of the Company)

2.2 Certificate of Ownership and Merger Merging CECO Environmental Corp.
into CECO Environmental Corp. (Incorporated by reference from Form 10-K dated
December 31, 2001)

2.3 Certificate of Merger of CECO Environmental Corp. into CECO
Environmental Corp. under Section 907 of the Business Corporation Law.
(Incorporated by reference from Form 10-K dated December 31, 2001)

3(i) Certificate of Incorporation. (Incorporated by reference from Form
10-K dated December 31, 2001)

3(ii) Bylaws. (Incorporated by reference from Form 10-K dated December 31,
2001)

4.1 CECO Filters, Inc. Savings and Retirement Plan. (Incorporated by
reference from CECO's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990)