Earnings call transcript Q4 2022

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Operator

Good morning and welcome to the CECO Environmental Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Steven Hooser, Investor Relations. Please go ahead.

Steven Hooser

Thank you, Rocco, and thank you for joining us on the CECO Environmental Fourth Quarter and Full Year 2022 Earnings Call.

me Johansson, Todd Officer. Chief with Officer Chief call Peter and Financial the today Gleason, is Executive On and Strategy

website. we section is to can through like provided would webcast presentation along This begin, materials that earnings be of website Before have presentation, the at our we The which call to will accessed a our guide Investor also help note presentation our be with Relations our on discussion. slide I cecoenviro.com.

XX, like investors that Actual statements not implied you materially We differ are caution also and made are to in are expressed based by those XX-K facts expectations forward-looking from statements. Any I'd revise forward-looking statements. estimates subject extent statements make of a on to future the undertake regarding historical whether on results Such to the year events SEC today, filings laws, publicly securities to read today's included are encourage no forward-looking statements or uncertainties. number or that future December may forward-looking result certain otherwise. Except and and of based of presentation here described as our we obligation the statements. on risks new update and for in a by applicable XXXX. or Form any information, to risks ended we required the

comparable GAAP reconciliations numbers tables include also non-GAAP will of the supplemental the non-GAAP references to provided certain and presentation in slide a measures. today's Today's and the financial press non-GAAP in in provided release presentation. back We've

Chief Executive to turn like call Officer, would to Todd? I over that, now With Todd Gleason. the

Todd Gleason

which XXXX Slide to Earnings start and Steven, I'm good entitled QX Thanks, X is Summary. with day. going

year quarter, including record release, performance we CECO records in where related and year highlighted set exiting A which XXXX. today's fantastic a backlog XXXX we As level. met and growth excellent an full several capstones another had press with

growth positioned heading well are into for we So XXXX.

you review to presentation And good highlights our of the summary lot slide of a with away content some this hope morning. earnings you have We take we from this messages material. key

quarter really point across fourth on year. strong results every Our an puts financial our exclamation almost banner metric

pleased are are a results and more a CECO our pleased is building even top-line more sustainable to and We communicate steady we transformation bottom-line consistently business but progress. resilient that showcase results, model. robust undergoing our and

fashion. top-line we organic income growth bottom-line deployed margin have also and have delivered programmatic steadily improvements, and While capital in we a

acquisition in a accretive dealmaking and In we that XXXX, our closed strategic our expected and transaction continued have we closed January we or producing XXXX in this acquisitions, of year. model. four with steady growth results program Each at above already is

capital $X repurchase deployed worth stock. of have to CECO We million

in will value. additional allocation remain programmatic add and to We capital XXXX engine shareholder with drive growth our to our

orders XXXX is highlight tremendous of to I second that want consecutive the growth. year

So not an phenomenon. this been has overnight

full release year Our XXXX we backlog growth for growth. and at as orders our a we And XXXX, of orders full year orders raising That's earlier levels, XXXX XX% our and outlook lot are drove growth growth. a in for tremendous we today. record in result of our came press announced which XX%

through will each We on takeaways of come these XXXX and More presentation. outlook we to as our later in discuss this updated go key presentation. increased the

We positioned well delivered are XXXX we we for proud of are the and XXXX in results beyond. and

full cover let's and few will metrics financials. and review year X quarter many Peter financial summary Slide to turn and in minutes. XXXX these figures key of our fourth a please Now

history. largest in Orders million, on few focus $XXX the quarterly level was a in million were up The areas. just company's Let of fourth quarter me second the XX% $XXX year-over-year. the orders

solutions for global with tremendous reflects our the teams in to XX% the customers. great fourth of growth. book we our orders the deliver growth execution So into quarter year are Sales driving

the XX%. year, our grew full For sales

Adjusted over margins the of are continue over as produced prior EBITDA year margins to period. we million fourth year-over-year. $XX This XX% we in investments, the while expanding XX% up was prudently quarter of manage growth

full delivered year For double XX% year, EBITDA margins, up from points XXX grew basis EBITDA and XXXX. we digit adjusted full the

As and companies will seeing a diversified work fourth and a such flow balanced see suggest decades can quarter. and growth rarely growth I strong. for scorecard year also for free our and reiterate, you EPS on cash you slide could the were might very very, have like for Peter a I industrial

us our Our job and results. teams challenges providing day incredible and commercial appreciate put solutions and to on every we navigating operational are financial continue customers trust do driving world-class We the an success. high-performance

I highlight across and our our business balanced growth how orders platforms. been sales Next will have

to positioned please right arrow very respective is geographies. the full above broad and of as we reviewed new diversification our is orders applications in such separation filtration which really #X. platform X orders and similar X What that, delivered year platforms. business business XXXX. across each left in it this these platforms our growth our is we unique participated slide growth version quarter a X slide XXXX with shared their growth showing of turn with earnings. full and new crushed platforms are is CECO's year-over-year markets So in Slide which third our our as We on revenue arrow. we and growth, the strong highlighted years Several growth for and of orders when this platforms

pipeline platforms declines done in near growth a in building had great XXXX their the have future. two job that orders for strong The

likely booked platform demonstrate particular of had booked a had In fact, orders in And orders QX, fabrication seventh a and would industrial orders year-over-year in duct those business, we have our January growth. this year. services installation in we few

all platforms across our XXXX. of grew Revenue year-over-year in

organizations leadership to win that Now to The and and are serve. is nimble platform new balanced. finding ways new teams excellent markets their

for whether our of delivering or is company which sales our produce shareholders. growth delivery the broad-based for orders is that our customers, our and it So growth reflect for future execution

balanced and do, is to turn we ever before. let's Now more than opportunities everything Today people. protect to focus Across is Slide pursuing #X. our CECO more

Our focus our is to and equipment. industrial environment protect the protect customers'

With solutions is brands industrial advance have this the a as this over seat multitude a applications advance position And we leadership at differentiated because category. air leading a largest table, market the the applications and our customers area. of to on of I'm dozen continue slide. perspective and leadership from we real variety markets serving a unique in stressing helping Our markets, end section a right and our end in of half shown

bolster complex produced grown water water and been company's we percent XXXX CECO, in continue leads growing and water our X to applications. a desalination supply, of wastewater separation, we CECO XX% to management, important approximately treatment, which the challenges the industrial building energy We water our in our high secure to that steadily sales. also customer will niche industrial our and industrial in positions represent of businesses serve oily which industrial overall likely of leadership within water, has strategically solve water, have position larger other business grow acquisitions help purity to Within transition.

CECO well strong and natural markets, decades, has from and energy noise technologies to supporting recognized emissions or refining infrastructure core brands abatement, legacy control position many For are gas our maintained respected. to advanced and a built

and sources to CECO prime As in builds to critical and sustainable more is energy sector position the markets new continue serve shifts as processes, transitioning infrastructure. processes it

continue see separation, areas investment growth. robust carbon two We are to that and gas and seeing liquid robust capture and highlight will

We in opportunities to will areas highlight are these and unique winning and forward. key projects we wins continue going

Slide turn left significant year Now to we capital on opportunities synergistic slide. are acquire our brought or winning. exceeding review before financial In X. are hand approximately acquisitions to but in The we unique opportunities. million listed the future our and process our is that closed these is the each and financial has Peter, hitting their to integration been and growth of teams in yielding these The full management over I already Each allocation. success XXXX, XXXX XXXX to spent has transaction it each business $XX has Each models. CECO, Please we acquisitions accretive let's leaders X our profile, quickly to businesses. key something current overall with and came new are

the repurchased share we our share attractive On of at stock summary a completed buyback levels. we and worth first our million right, of provide buyback $X prices. In XXXX

we use of great worth of of price million per average at as Additionally, that $X $X.XX in an a shares say capital. repurchased share. XXXX, I would

have We stock remaining on million our buyback multiyear roughly $XX authorization.

on Our fabrication a model, maintenance global businesses our don't relies of or capital project new require CapEx given a of of network lot chain and which based partners. supply and is nature the operating

we growth modest grow see material. budgets, we CapEx will shorter our but cycle in As nothing businesses, incremental

final new well bullet technologies investments important We drive to continue to safety invest business processes. in and to The our productivity, section important as that enhance fulfillment highlight. to in is as quality point make and

have India grow we resources a but and talent other than engineering In and various year, little management These also for regional support even engineering more. more around application organization growth, resources to doubled a the engineering our provide we high-level design, clock our studies to and over expect in project work.

looking forward strategic capital deployment value. we very that to continue a will shareholder drive and and overall So long-term believe program growth

hand financial it over now more performance detail. Peter to our review to Peter? I will in

Peter Johansson

Thank you, Todd.

through the and want results call. remarks, the I only the its performance. full we for nice a believe, improving just to you start take CECO I the quarter my I reiterate has my today, organization to just of continued from tap of third to run Before remarks a walk begin opportunity begun is potential

In a through picture Slide you quarter if X, turn Please to you fourth on present Slide of we more Todd X, X. detailed results walked than earlier Slide would.

XX.X%, were highlights to In the gross highest I up company gross of your addition for points adjusted year-over-year the and margins to and the profit, quarter profit in the delivered XXX a and X, gross basis in XXX We to quarter. basis EBITDA EPS attention, of million $XX.X bring history. from sequentially, dollars profit want points Slide

free third in in $XX.X $XX year. of million XX.X%. quarter the rate, represents the a GAAP year-on-year XX% million dollars quarter quarter nice Both cash the adjusted converted fourth XXXX. We of yielding best for EBITDA GAAP margins $X of to with of improvement XXXX. adjusted EBITDA free in from the $X.XX And EBITDA million for performance and and full the flow the showed delivered flow delivered $X.XX since cash EPS EPS quarter the were a quarter at Adjusted

will full that more and where with that a growth X trajectory XXXX, you XXXX in posted CECO's the year CECO this XX than in accelerated slide, through view greater and orders Slide the a respectively. company best of the XXXX you through $XXX can fourth is million I order to to more a in booked quarters of each progression. quarter and turn detailed story. XXXX, orders On now record. with began first of quarter quarter there in back first, company in But of quarter million Please CECO's growth XXXX history orders, $XXX fourth walk and the has company net the see completed

the want TTM rows bar now to chart. average I and per look above you the to quarter

at you able are For we way, takes each matches metrics, the the of closely to smooth which revenue order growth. will out steady effects orders flow, these of realization more in this sequential our cumulative and timing. By note looking out order

backlog, began million turn throughout Slide please for in to a will and XXXX revenue third revenue, detailed showed On and CECO's in this accelerated in it over consecutive we in in as and best can and CECO revenue, walk growth where greater culminating that XXXX, history. delivering of than of revenue company of to prior sequentially QX more improvement speaking growing $XXX revenue began trajectory, this you period which CECO's convert X through the slide quarters growth view I our improvement quarters fourth you progression. steady XX, see of XXXX And

An want fourth any XXXX that to single in considering our there this the that have our comparison to our still supply bar highest On highlight chart history. quarter in outstanding quarter orders. TTM above included easy company we as the also data some the that choppiness the had revenues were was an per of chains for similar quarter also result overcome. data teams slide, I provided to average and for

XX% than a Slide year up X.XXx, very on strong XXXX CECO a beyond a the review year-end our followed expects quick also results a revenue to X.XXx is that with XXXX for an Xx CECO and of future to revenue book-to-bill year growth sets is representing very for XX with and XXXX. over greater positive -- for the which moving strong XXXX, opportunity outstanding With level a growth. a rate XXXX increase growth pipeline, in delivery leading $XXX with a ratio Now maintain a supported full book-to-bill XXXX. record And book-to-bill for result of which very backlog. CECO indicator a in of XXXX. backlog concluded of million,

would One the Italy. This harder fact, X% a for our orders, less orders a $XXX in only and in order the than of faster us canceled quotes our I was experienced XXXX coal point de-booked interesting in to today, of conversion quarter. in item that pushing to QX, plant million one, power are with out place than in for that And can $X.X to so that they gas orders us. in is get and customers reviews spec like single was million CECO project for turn

for quarter XX, on and through moving year. the the Now you walk to Slide margins full and I'll

improvement associated million is year-over-year the see and On of XX% the better margin. gross for left profit This side will result XX% you QX and a sequentially. page, the $XX.X

in are pricing projects starting really realize improved we in better teams and operating on and and the Our XXXX quarter, late nailed from XXXX. commercial booked focus in the to margins execution

On a I the quarter of associated page, is improvement and right XX% and This year-over-year adjusted want XX% the to to the million $XX better your sequentially. the attention EBITDA side fourth for result call margins. the

better we to pleased people, quarter higher systems to $X.X am to position million I performance CECO. also investments in and in particularly and in strengthen and to better which continue will organic and XXXX result make million of growth position with the to investments range as beyond, growth the in CECO this made drive we $X.X

year. robust please revolver approximately finally, million X% CECO from Cash million Slide net our million our cash, a XX $XX.X revenue capital. and to for borrowings discussion a were available finished of in $XX.X the XXXX cash of with $XX.X turn And on $XX.X position and in up operations million, year-over-year. delivered

million our acquisitions, $XX creation CECO and Following the against spent shares strategy, was balanced was underpinning million of capital approach value million $X.X shy deployment repurchase deployed just capital investments. to $X on used was

Gross debt.

Moving support and cash comfortable sequentially a in improvement end maintaining of of facility resulting below an million, year-end investment the comfortable continued debt year-end Net from was debt capacity the million $XX.X in debt side million, right the creation levels in -- $XXX.X in XXXX while credit to $XX.X XXXX page, leverage for at for the at came gross XXXX of million from XXXX. increase of and X.XXx, $XX an QX levels, current cap. leverage growth well At our the value CECO's is available a range. to ratio buffer

XXXX But to creation stronger, you the time strategy CEO. platform microphone to I Nuggihalli engine. place, began creation the new is bit from bring and operating journey it was of turn XX, Now and coming in COO brought back leading the joining of a was which on to over value of blocks the build were platforms. numbers sustainable leadership the CECO to Slide XXXX, that do to in structure In our building transition to Todd team and a out The transformation and high-performance including so. the to the want inauspicious of pandemic, first, with vision an put creation CECO It the Todd model journey to during to that the role, vision. and time set early the the of XXXX Ramesh corresponding growth

XXXX which are my am accelerated impact programmatic an been remains people much that success. feel began structure stage with the and platform the taking advisor and changes began association to and this operating I and XXXX began as external the the of to in were one the model be and be and observe I we in was and results. journey, QX accomplished and changes excited of to early on It in that has CECO which new of These place as part of realize started solidify M&A done. much to to the

XX, highlighted and to XXXX through in And CECO now on and of XXXX, you back view beyond Slide you for accomplishments of myriad take through Todd to to our X.X. walk the

Todd Gleason

and is the AlliedSignal, part have seen on part merged but months strategies your Officer, and commentary great journey. with role. Honeywell of firsthand. career CECO of shape a transformational portfolio. prior to I which Honeywell, critical transformation been In how on Chief programs X time to seen what excellence my as key continued growth Strategy that as how you Indeed, Financial at in Good also have early Peter. appointment saw Thanks, our the past over and already and advancing you operational I personally in the an was helped

needed operational that we I the on transformed becoming in The create of we portfolio improvement unique. firms each resilient, It have confidence and believe can steady is range and a those a focus our results more shareholders value. companies take transforming on has all and other journeys it with is believe have margins. is operational portfolio also can how We win transformed can incredible then been sustainable. companies, in higher excellence. has more At strategic and time financial programs. for to to markets win relevant our transformational culture more CECO, more their These It to and reshape our that to incremental that seen focus point have is, and name across

our in throughout After XXXX things XXXX, we've ramped late foundational in game. place up putting and really

as Our excellent teams growth highly in programs more and are Peter their a Ramesh his incredible. mentioned, job has increasing nimble been organizations platform which, is an doing result our That accountable and growth of leading. organic markets,

are operational beneficiary with coupled improving growth, this gains profitability of direct excellence. Our a

CECO joined in We continue have the mid-XXXX. since organically, dozen also half our steadily portfolio through but I transform done we to acquisitions

and report By the inaugural and how improved we to continuing published started score second ESG forward, our XXXX, future. more continue of provide last year. our greatly shares see introducing performance shaping buy and our practice in program and XXXX We up to guidance in year we last our annual half ESG the we that transparency going buyback share in

team leaders better as our am the company I blessed reflects by on senior executive throughout and surrounded as great to we our businesses. diverse and continue built and advance, Our high-performance in functions team well to have be our

direct new the is our these also ways more. and items in Ultimately value. capabilities. diversity, of be company they has expect expertise breadth, to push Our new delivers shareholder Board and continue to think We added a for us steady a of create our and we to expand much, and Directors hope value beneficiary much that and shareholders

investing are in we Finally, our culture.

Our that and focus right talent look is mentioned, as and more high-growth, is work a and continue CECO, excited of do. really wants will much for, to there behaviors are employees on transform work to values our solidify and company. to the many years A to forward they stay years, we We company for Peter joined. high performance, many high-performance more new that to

So accomplishments the important forward value. with the how shaped and review and let's or and that we our keep milestones that past plan look summary growth driving of have over year to performance X,

ahead turn Slide to Let's and go XX.

growth. slide in would success place culture even to are more this resilient. pipeline with the on just simply an generate M&A and results in double-digit times operating priorities several two on programs a performance. I the don't robust of there a one it a shared while our and results eye sustainable having XXXX us these financial to But throughout think XXXX realize all If to of drive then deliver have acceleration growth We their be thoughtful most of through maintain some must maybe building ensure Companies To to some last to that principles. took, build transformation balanced or was everyone a go visual expect year. more sustainable simple we color provide

Internally annual model. and we our customer must aspects business deliver focusing taking we we making and our discussed urgent sure performance and plans are of quarterly by the how the on care of

present their plans, this strategy people long-term on the on on but important our portfolio. slide are to right same could focus for slides how our also balance summarizes shaping approach. While or at is I of balanced we items, now, the dozens need which and reshaping strategic that the our time, focusing

on we and on let's on XXXX look long-term So now take the growth view wrap turn Slide Please full to a of take short, that our and I'm can book things, a and year XXXX. highlighted get then have few closed so at few to XX. just to performance, going we to mid we up Q&A. and minutes current focus how a comment

year $XXX full million $XXX We outlook are million. our XXXX to increasing revenue to

A remain gives previous and Our believe heading $XX million of lower each visibility range. was pipeline strong. we to to additional on growth, us range more XXXX future that into backlog record side really about of orders continue our

our We are end increasing the $XX range high of also adjusted to EBITDA million.

adjusted $XX our to $XX Similar growth, million. and businesses, to new critical in deliver we our investments to EBITDA balance confidence our ability results. our to to So in processes strengthen range systems continue is line million bottom outstanding

of year to potentially outlook. to to generate we of could prove use that mentioned fund cash between our to upside to to respect to to a forward capital expect we already available previously updates cash With The monitoring XX% items as also that any as We certain provide full our programs. provide and ranges look cash, our EBITDA to through. deployment slide well highlights number XX% free continuing into or will challenges flow, navigating we're that

turn step Now let's operationally and wrap performance, financially, a In transformational summary, really outstanding journey. just in XXXX #XX. to the our up. Slide key both Please was

with incredible and growth teams the with them how be that the and they our those as to CECO really pleased are programmatic and record M&A all our the were incredible well without partners. to a our for revenue to worked at income continue and new about global they leadership and people that and joined each very operating, of result excited be CECO We Thanks wouldn't of have of do. performance generate able backlogs We acquisitions. businesses we're

they know rely CECO. can on customers Our

to With any happy to that, open now questions. Operator? it up we're

Operator

Aaron from first with Spychalla comes question Craig-Hallum. [Operator Instructions] Today's

Aaron Spychalla

talk just outlook walk cadence just and grow Can margins operational maybe And Maybe part the then cycle first term And as the what on of of can lean areas you there kind of excellence. XXXX? the margins. a us some for with focused like of kind as to look longer you're continues gross business? short about through and on

Todd Gleason

gross as suggested Yes. we somewhere as have rebounded in they the we XX% hoped the Good steadily of that has Obviously we've And in range. -- historic would, they historic and question. been margins I our in to appreciate said they that always XX% would, quarter did. year fourth back range around the exiting the XX%, XX% our

That chain, So progress feel the good combination supply about year. good was pricing and we just of made and jobs we in productivity. the then throughout our just progress a higher-margin backlog

invest margins to in higher continue over gross and that to programs yield continue lean time. operational believe we would excellence We steadily our

Our above ebb flow. goal XX%, quarters of right time, everyone sort now, get would XX%. historic that of will But to certain be I and choppy range for XX%, our a still it's remind would

margins days levels as well well. to that these is as behind where that steadily acquisitions bringing move But as programs I While see are around were higher few we margins completely of with a quarters or gross XXs. we in that the us, us, in can stay gross goal our typically mostly are the where higher we with to not mentioned low the be behind at think sort if more XXXX,

So as we gross those, expect execute higher. against margins get we to

Aaron Spychalla

little maybe in from could to date growth a expect mean just that what Has of talk that driven about the to business and just that when you coming you reshoring? seeing and can to start second, the maybe bit years? the much benefit then the And

Todd Gleason

start with all industrial a Look, as get here lot production, company reshoring, to on Yes. investment be other perspective to rebuilding in the will that a organizations companies and I'll performance think Todd, start. has This added going it's and industrial being I certainly then America, as our I'll is of well. well. with seems Peter's North diversified that within and

we certain strong And or and job a year also in did we for lot double-digit of a that think A ago, bev so growth we're We market. Europe markets being great identified nice really that globally just with orders really can, like aluminum in example. a around nimble. job including doing

that we other in And North There electric we to America, industrial metals to medium-term right just to is down, the are that get to to not think, the markets market markets are or reshoring, in infrastructure. but that or And semiconductors, investment places back around the vehicles for were capital. -- a chip short-term in other going more we or think expansion. world, going knew space slowed moved receive I of to lot stack quickly that us that certain like some more now, with

on So our constantly to going focus markets. goal we be Peter? we that is think those the then where sure capital is to have be to and moving deployed make

Peter Johansson

around U.S. government put that strengthen. only one. Think Aaron, the are now joining Reshoring programs hands multiple thank you to beginning being positive where from growth. to beginning our tech facilities of transition indicators are be for with recovery us today. in semiconductor and and the are that all environments. There production, in development, are seeing and require metals spenders new research These leading funds about very CECO the tailwinds just that very, aerospace, all in energy place clean infrastructure and all just produced are transportation, cleaner lightweight in for we're is

India Globally, is States some local programs. positive doing, talking and And what priorities. just Korea seeing very call regions out about is distinct and in and that what frankly their to United similar are very has that's doing tailwinds peculiar Arab Canada because Emirates. the I'd Canada we're the and United

Todd Gleason

got have we a So lot going on.

Operator

Company. And at Needham our next question today from James & Ricchiuti comes

James Ricchiuti

sound areas. the I see areas X. of perhaps of you pretty of you these number product clearly you And in looking good some at the order a tough business in I'm reasonable have Slide if have that wonder decent flow pipeline, on a a you're And elaborate So like it 'XX. anticipating could again comparisons But does line sight.

Todd Gleason

Yes, Jim, I interest this question. appreciate thanks in the topic. for the

we in pretty pipeline, that. about been and we've talking look, very a have consistent So good

comparables, right. tougher look, at get of to Now, some course, point, you

And the full and said, that XX% growth some bit. Look, did And comparable nice outlook we quarters a flow in can to exact. tough a year because for ebb fairly businesses. we had growing. be Now had in across give orders can a -- of be of job XXXX, we so then we our a -- reason board,

they million, look up quarter. really low to our first fact, because orders want and to to know that with and want say, to if customers quarter, to book. The $XXX or compared of on acquisitions you is obviously, fourth sometimes organically, that the the that's to these our orders to but of add orders at orders. book million What order manage our only goal quarter level timing continue mostly to you seems of we so the third our if were, difficult that In grow about can the to addition we some when to And $XXX of jobs. high smaller a be continue year-over-year, bid is

our feel the we the So again, really timing. but manage feel like have tough not look all say course, first And to about we'll growth so be we a always quarterly because, caution of they're people we that quarter, difficult robust. comparable have would that again, really pipeline to good in can quarterly and the metrics at I

James Ricchiuti

if order may you you quarter? apologize in say you rate I it, have organic the your Did And mentioned did. was what growth

Todd Gleason

that or take. $XXX would didn't. if it you organic, But the XX% give easily look been have million, being We at of

somewhere in percentage. around that So

we quarter. in So just halfway of you come look acquisition, three XX% the the it's acquisitions really DSXX to March made, at here four on was the was our of which through books that GRC at for year. end was third the completed about the didn't we It completed until really of the the anyway. year again, mostly,

the last for growth orders most year part, So the largely our and quarter organic. was in fourth

James Ricchiuti

And another? industrial that more water, into you is next actually the guess, industrial follow-up Is I just the going acquisitions out do one air. build How it years You've recent done, than the see be of platform? same pipeline. the to in the on active it? area number segues, M&A to in in Todd, My roughly is opportunity question. Where

Todd Gleason

advancing leadership our industrial we're position that air. We in like balance. We think

into our And market it or are so can't organically, geographic if it if there or organically. geographies inorganically. and adjacent we is we'll And goal move do markets areas, do technical opportunities, adjacent to areas

And that look for there so are we're at. for opportunities advancing air, leadership our certainly us There we industrial position.

building still leadership. Industrial water, our we're niche

where bolster as done is to in we leadership energy building, along to ways are certainly add the yet, to haven't continue And the heading. necessarily energy opportunities thing, So leadership about. want us there and where a we then deal with for in same to find we're areas that talked our our we transition transition, niche

the we're of at. good We So playbook pipeline terms programmatic. at got opportunities have to I going the we that that we've like pretty moment. a remain in think And we're looking

Operator

Rob next question comes Brown from our Lake today Markets. Capital And with Street

Robert Brown

well. quarter as Nice

becoming you bigger industrial talked X give business. X coming a think your on water out to about percentage sense see and I that years that of matures? us a where Could you how you

Todd Gleason

play at rate a the have -- and are growth company mean, get we expect actual next growth don't and number somehow wake we strategic that look, few of maybe they our I that at good years similar index if -- day, I organic everything the set of we could over inorganic, water and our because we've I end around in the plans certainly really know few being you I a and X; to that way activities believe and years out an up and air, again, and inorganically. energy all organically maybe, strategic somewhere each, a in the X/X transition

But So industrial industrial really made that potentially. growth we've a could feel. in opportunities and in in large, we you acquisitions space the water are water in slightly higher that see the case, investment

not race more for the strategic balance. same and But there We portfolio accretive we're if just grow that one And from and at at our organic so air We're to it that. acquisitions. we other. that look maybe so than in up again, happens expectations growth. a look and don't rates energy, growth quite end the about exceed, at excited And our maybe the we thing

process, where our We going buck. go and business we're going have go to to development, to machine. deploy We're amount for best the certain people, we're bang get we're after we're markets, of going a capital for going to economic marketing, --

yield in any and to our mid the of we believe the best spend we'll going so is And segments businesses and results. short, money that long-term

Robert Brown

point? platform Bed of coming those are more are duct they order growth, the business are Or And do the or How maybe growth this the along? you'll the how maybe segment the those Fluid and Cyclone you 'XX? then on see and of kind business, lagging in see at sort

Todd Gleason

will XXXX. in good We growth see orders believe we

Operator

from with comes next Dayal Amit Wainwright. question H.C. today Our

Amit Dayal

Congrats on execution. the

of segments outlook. any question the weight of and revenue one sort the there sort higher outlook? this or perspective margin of any on Just a the in from on backlog revenue Is

Todd Gleason

in backlog, Yes. backlog. of -- would backlog. we we just mean, feel our good couple whether mean the I what, profile comments -- couple about was all I your -- on our a in question, look make this let A at if our margin so you me

First sort to first there's we the And less beginning year. previous years, There's executing in usually of slower a we've quarter. days. start of the shown some little similar is projects where quarter, sort backlog of the see have of all, days of management way the profile the less throughout that bit the year the a project of in in

first where execution backlog the that expecting smallest I So in project profile quarter, we're looks our from like probably a is QX profile quarters. perspective the think the historic of a

fourth but ramping good we to third of speak, in quarter, a quarter. rate, second run terms feel then so about in Margins quarter, good up the keeping

a So think profile. about if you that from

across I feel segments, of think like terms good in balance the right a businesses. in our the of we now terms we're In rhythm pretty

Amit Dayal

part size an potentially to last of you bigger slightly M&A be the at what now opportunities sort And then than important strategy. year? of looking you did continues Are

Todd Gleason

Well, we ability on And bigger decisions then to and based our make value. we always drive at look execute opportunities. fund,

deals the and a And X right our the years started the then transactions, transaction can and to larger that that do And our larger months especially deal the for means we execute deal. is in XX we'll how so do a we the since done deals. right if that are but company shareholders customers, we've last in for our

size the right and the But right for I we've been value have think transactions right now, shareholders. the our done

of have we look that pipeline we've what balanced like transactions done. a so And

focus that at. We the could right we'll have value. I to look And other we on think things expect continue driving can you shareholder put

Amit Dayal

with Just China. on respect would And much your up China How be that revenue to one in any of supply and there side last one color of things. an terms would your things for over helpful. opening for of chain have impact

Todd Gleason

from It's revenue incredible amount future growth, country an look, opportunity. China tremendous perspective. -- in huge not and We're a it's of historic a with growth

you call opening supply reliable, maybe us, second more we part serve thing diversified up, that's And everyone. for perspective. For of the that, to a chain, if a and from question being or your good want comment around it everyone,

the probably supply we're you a chain on So the reinvestment, result be will, and more that. of focused of the stability if where China, can

we probably We're that operation there than serve. are want jobs China for focused to have we China -- are a markets. in specifically and that good we opportunities that serves local And more on the there are in China, and we're

the do add so, Peter, to And you China anything commentary? about want

Peter Johansson

Yes.

both quickly, closes resources say, that begins on If XX indirect on of you're There a think and and in Page see and consume pace China, are could implications. queuing around impact in availability. we our mark recovery. off let's and pricing maybe spike global I opens direct question recovery, to of materials,

cautious watching very in we're So that.

an natural demand are The goods of of actually into availability impact provided side as their and and because for the adverse So liquefied country that and China other that's materials imported CECO. gas recovering processed positive benefit issues. there's kind inflationary is

of that buyer our exported for both stepped that China. is has into from it Todd's role. but most And that We nearly China little at today, look in not now it's point business very export gas, is Europe balance. in China still we And sides. now. earlier kind of So a of as China much

projects. supply We for continued we the build customer time, length, shorten and to advance resetting are of our and the have global actively localize of chain network our in developed shorten fabrication country our why destination partners. to more That's

Operator

today comes our Dezellem Tieton And Bill from question with next Capital.

William Dezellem

versus quantify pipeline the Would at potential of XX/XX/'XX? you December orders please the of end

Todd Gleason

these use. consistent what I is you very let be associated bigger, with we the We say, really of pursuing number billion we I guess, standard you some index would were if sort were joined were say. would here. noise are but Look, second I reference our of provide in remove COVID of that more for here, $X to color comparatives, when Yes. would billion $X.X typically mid-XXXX, pipeline when be -- -- if kind pursuits, of I Bill. with therefore, joined Much -- would and opportunities pipeline level, me a about you the we it, a we

billion of And orders. XXXX, and by we the were between end pursuing $X billion $X.X of

maybe So 'XX, had grown to By billion above take, XX% consistently pipeline of about $X.X we certainly that $X little of billion. pursuits. number XX%, to was more, $X.X billion, give or bit end a the

ever in bid had we of fact, than were a that specific more more on a time. ever level of dollar bidding XXXX before jobs In we November we on in at on month, were in had than jobs bidding moment. point mentioned we In we that

we've this So XXX It's ago. that right, was major change. only days not XX days seen ago, like

want at plate, actually even hits more the XX% a would plate, use at swings And We of getting up baseball means we like if bit for We couple to XX%, weren't you're maybe last that analogy. you're each have hits. last the little the we're say, maybe it's So year, a we if years, more more as the swings time overall. I look, do. It's to right in Every pipeline. the getting to more many the terms us that. plate the certainly getting at -- of want thing

William Dezellem

business? win that. Or up than with significantly it orders with just XX% the to improving? -- pardon to fit type is your imply XX% your rate mix XX%, Does pipeline Todd, to orders of better greater the the and up up of pipeline that me, is XX% that happens just

Todd Gleason

size our review sort great call and doing are jobs in those so certain real million think win profile, have in of functional, of pursuits. done after might teams platforms $X million, in multiple corporate our million around marketing, of drives of job has working businesses businesses, and go our that $X Ramesh's instead go that I coordinated pursuits jobs or fast to $X $X because the after size together I certain increase $X really customer and the improved. partnering platforms rate and out organization a that and with are win our to We we want a worth move We've get we work very million clarity our to focus content, of nice we fashion. together platforms going to million,

do. would have in together the our these have overall, drives working think I win we we -- more gives probably. in say better. just I it are plays a much the I after. and also more lot to playbook And us days. still opportunities rate a people mean higher where all early But overall, it to go But So we're

Peter Johansson

seeing. this is a there's subtle, the -- in Bill, move we're And the company but shift undergoing, is important cultural

and more the high get investment and to job are will, very they the and We delivered. that because bring necessary the they is get the seeing know win pursue it confidence to business company, The execute teams to very, commercial if company the job, playing they that win support the more. will will resource of if they our level them

learned is case. the necessarily I've what past, the that that, In wasn't

performance a Our it the today. felt on governor that to they struggled case brought and put on their to something teams themselves. business, They big because had not put resourced. a get constraint interesting almost That's they the commercial they

being business, the and more win getting would have results that resourced. historically larger very Our good some with to you're marketing we of aggressively winning efforts playing And in and targeting pieces commercial the combines teams they're leads with are bigger than their their pipeline going pursued to and and cases, seeing. efforts after well,

Operator

And from Sweeney question next comes our today ROTH Capital. of Gerry

Gerard Sweeney

questions. follow-up quick of couple a Just

broke versus or -- but but break I'm cycle out, curious, it you if sure short revenue you do not it long out, if Just currently?

Todd Gleason

Yes.

increased XX% So were that of cyclical the our the when if do like with well. ultimately and And profile. situation, joined, long to gotten XX% have COVID of that to percentage very X -- which higher but choose Where our fifth cycle yet do a of some them, cycle, we've deals only goal short we short percent and, to haven't again, benefit business acquisitions, I full had short likely we we -- cycle. I we the well, cycle, pipeline our short percent as cycle the made, higher now most of have acquisition in said, XX% of

would Our be more XX-XX goal our over business time. model be to blend to

in and quite long-cycle projects Now the few next think good could progress. our we good growth reason mid-cycle that get might the not rates a making years. there in steady I make we're and that challenging, that's But

Our organic strong. been short growth in cycle has very

has it a So long cycle.

their to the and job handling But that's rates distributors, close win getting time a products, for example, their new delivery So challenge team fluid and gap the more improving been business, doing and great a in on that. quality. Wayne launching the Denny his

so we're a and that close mix gives profile. I'm going business very it and that better just to inorganically And because for financial us optimistic gap continue to ultimately organically confident consistent

Gerard Sweeney

do that's how of as we SG&A a percentage there then there's ticking room or at that? more just if some And look I'm revenue, curious down. been

Todd Gleason

have dive to to ebb again, the it's quarters, It's little like Yes. going to -- through leadership the in team. a an we numbers. we how perspective, and a acquisitions make flow the -- from you go and adjusted you SG&A bit and bit if you're when little keep too, Obviously rationalize

we're not these like cost synergies, cetera. not businesses et buying it's for So

growth. really about So we investment to have what's the to maximize think needed

we'll those from legal and then -- our we want grow marketing, the is G&A hope ultimately, more to to and our and S is of resources that a add part we in the is we going business, part support stable of support that our need. functional finance G&A development Ultimately business our able as sales, to HR around and operations, investment and SG&A continue; that perspective, believe businesses and that talent to and that and

to ideally, to going So help I and us SG&A believe, we're margins. expand really leverage continue

Operator

-- is from comes Needham at today question Company. & Ricchiuti Jim next Our a follow-up from

James Ricchiuti

in you been also tailwind get you you've those And pricing respect question some talked the of 'XX with wondering experiencing, potentially pressures that I'm lines, becomes in that a of I extent an full impact more had guys a Just have as whether the about think to inflationary benefit that. what of QX? same along to and

Todd Gleason

Inflation for companies, longstanding Yes. industrial most been a especially has challenge companies.

it's it's So it can be, materials, whether logistics. people, whether

X/X of in I backlog its up we really booked the because shorter had of term, midterm, months months getting of go and more our pricing turning is are fourth that of is backlog overall backlog, XX X/X to months think kind some caught in our X-X starting and quarter, between jobs up X X/X all revenue to our then into could XX revenue. of revenue,

to we offset So to that's projects. to get better as takes P&L place, And a the we on deliver our of put cost of time if our obviously we're necessary to little it some it pricing people in go. hiring bit

more continue was that are going be to right look environment, think than up productivity months I yes, on and No interest X, to XX, to going pricing, why feeling inflationary there's stable ago. the costs, better balance have stable think, it and up doubt X, it So is us room There's gross rates still on up margins now. and been feels ball or XX fourth which and I XX%. bouncing above quarter we're how we a is, back was there's inflationary a for were hope some go but going which that a things

James Ricchiuti

follow-up. very One quick

I in it it of in in was follow capture curious, just filtration win, separation, are business? you I'm You for guys this carbon solution. area through think had was space, any QX, the I think an interesting seeing the

Todd Gleason

Look, roughly like capture product cetera. than commercial their that. -- highlighted for find tax the more Yes. standard credits to believe was carbon ethanol. It there's programs, win. ethanol and obviously, and XXX little oftentimes We ESG We solutions for for and that they project, this million facilities around country, a et and $X

to opportunities in carbon think on on in filtration that other other working has capture So Look, opportunities space. room we're other I We're working and go. separation, industries.

Peter Johansson

out one -- on generally that Texas programs. Southeast Louisiana, molecule. And and we're processing technology the interesting of plant, Gulf feed a the projects capture adaptation are in in of EPCs easy a less one hydrocarbon East our an to actively ethanol an the There's easy positive today the clear, It's Coast; it COX principally is study is from Peerless technology. working facility. results large two little with very in

core in So that have feels side. transporting to have methane, there's similar a terms support processing do in to we to to the of then and development little some But capture it it. moving the the COX, but they tougher compress, applications

Operator

to like Ladies Session. to Todd Question-and-Answer closing this conference over turn our and for the remarks. gentlemen, Gleason concludes back any I'd

Todd Gleason

and for and information that today. questions Yes. these results, appreciate thank everyone, in really customers. thanks, incredible delivering our your again, Obviously teams you, your to our value once interest are and we our Thank global

environment equipment. their to continue will our We focus our maintain protecting people, protecting protecting investment and on customers' in industrial the

questions. and you many As we've and answering today of active catching be with additional week to going already we're highlighted, this up

of look we And California the will in to lot we also, in saw forward upcoming those Peter So a conference to and conversations. press you as are the and looking folks in there Conference, well. that ROTH that forward release, at participating as seeing for be

a have and here, great it end we'll and day, soon. So talk

Operator

this gentlemen, for you you. Thank presentation. today's conference Ladies call. and attending thank concludes today's all We

your You may have now and lines, day. a disconnect wonderful

CECO Environmental (CECO) 6 Mar 232022 Q4 Earnings call transcript