CECO - Earnings call transcript Q3 2024 | CECO Environmental Corp.

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Operator

Good morning, and welcome to the CECO Environmental Third Quarter 2024 Earnings 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, Liz, and thank you for joining us on the CECO Environmental third quarter 2024 earnings call.

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

public call certain Chief We've the tables I'd presentation Actual no or Todd like we in non-GAAP the Todd? that on statements. We to risks supplemental help to provided of Any the events are the be ] Investor applicable to today's deck. With caution a like measures. on the back reconciliations whether from materially our for along and are a materials include today's presentation with securities GAAP to information, to encourage call statements. not XX-Q today, begin, risks turn like are can statements. we are or presentation, required future XX, as based the filings expressed we to of statements the ended SEC webcast fact site. I'd result at publicly new financial Before September the that laws, numbers revise those forward-looking uncertainties. Officer, undertake provided non-GAAP a the expectations or which Relations otherwise. Today's forward-looking any cecoenviro.com. statements Form and earnings in in quarter and XXXX. Except have release any you historical the presentation is is note being are by results the by now statements made to may Such update that, press estimates slide over website included regarding read our section in based will references accessed of subject on update guide also differ to that our to also -- through forward-looking [ our to described implied of discussion. Executive Gleason. any comparable extent provided our obligation This and slide on non-GAAP in of investors made certain presentation I'd number The here future forward-looking and

Todd Gleason

Steven. Thanks,

our today's #X, into of report. Please number a Slide summarizes which turn cover. dive material, we to earnings items Let's as have to

highlights, key takeaways from slide are there the As report. X today's

will and of our We associated on more deck. time softer expected first, not items third to each a quarter throughout we larger of spend summarize, income earnings could handful projects. these customer-driven as than delays and overcome revenues we But had

and of are delays the we QX XXXX. projects first the these in frustrating, Although half begin into expect delivering to

shortfall So, on the confident third we will upcoming cause our these quarter understand quarters. in results we and deliver we delayed are

largest short, a were earnings $XXX Second, ever. our while essentially record million new [ QX quarter and tied our in of ] for fell over the QX our orders quarter

orders, and for Our large pipeline in to full a balanced bookings solution large These booked across transition been emission industry. year. remained large project related medium our very and entire we for a small, gas energy the have sales power the projects energy management transition

to start convert. So to orders great was these it see

another this similar pipeline, our project we secured month. have Additionally, have opportunities already in and large

In in finish orders, million to month fact, be a for October up us we for a record with over the setting expect likely $XXX fantastic year.

energy, our $XXX With we QX as bookings, a the first million to and we progress history. record company water our level and level This set record new $XXX to these of of of opportunities pipeline the across is record million. we industrial, result the backlog a forward. expect continue bookings significant As backlog time reached air, in levels global new eclipsed

growth. industrial of very transactions exciting new and for will and of our we portfolio expand transactions as M&A today, robust item, programmatic third these process. our the to continued two part geographic unlock Moving markets announced Each

leadership treatment of strong The challenges. industrial closed ] has our of is early solving waste [ air in The reach is company Group, that business air Asia-Pacific Singapore. a October. out internationally stream headquartered also and Germany, and critical an first in expands we based presence and global the WK WK transaction acquisition position is in led customers' which exhaust very

announced over to forward the out For introducing #XX my Profire we WK, and pleased on updated to [ this CECO of further guidance. In for company acquisition please deal and an in ] our I fall own this details few the appendix. welcome morning, ] acquire while tenure to full the it. CECO, Slide slide, organization. Also, and WK you XXXX Energy, year to see We in [ the XXXX describing largest never to look short the transaction we with expectations, finish And outlook providing summary, next we we slides. will were a

margins, support creation. Please very building #X. We of control, robust record backlog, operating can value continue at to level are key to a execute long-term and orders, all programmatic in our a record Slide portfolio transformation. of executing elements pipeline, sustained, what turn These we M&A expanding high on our growing sales delivering our booking

press various the area U.S. transaction this in I acquire we Lake Salt publicly today's Energy, Edmonton morning, the with release highlighted, to the and company cities announced Profire in and As listed in and City have mentioned, based traded a already NASDAQ operations

enterprise alignment EBITDA the is and walk EBITDA transaction the through to the and company net current elimination accelerate and proceeds industrial This strategic funding the practice to -- -- operates which manner and me After expansion, to position [ in expect a niche a water close Profire's we markets. to management valued is excuse has leadership ] investments X closer leadership effective creation predominantly after and customers to cost, will controls to [ significant financial various further currently grow a currently industrial long-term XXXX at in their markets and for energy the commercial largely rapidly summarize of of international value. our $XXX their in times intend combustion expected we past opportunity. opportunities. Profire strong strategic ease X.X markets, consistent the synergies, in of has operating value diversified estimated an approximately CECO's operational of million This me company achievable public company resources, realization slide the and at best shifts significant of business has deal deployment position. Let very to delivers Pre-synergies, be leadership and estimates sales. With the the geographic closing. air expected similar with initiatives deal their times approximately which In approximately represents currently transaction. in in this capture value of made to benefits model, to in ] to very platform expand profile early Profire our the sales revenues broader, mix. XX% America channels utilize integration few to This years, of North positions industrial team X

As we the leadership the on combustion success, as you their Profire's #X. continued on good won't create This for financial takeaway a of I profile. all slide. are a years as And with adding growth strong growth see together. Please and tremendous markets. their record but even well highlights, to come. R&D track we we read the facility, our talent, acquisition is investing value products slide solutions, market and standard to a anticipate base, and wait more Can't in more end Slide Profire management world-class knowledge businesses information, more in can insights turn to snapshot our provide acquiring

cycle. impressive enter base We highlight starting resources. I of their and also forward growth to is installed that field Profire adding potential a has their key resources as full This would to supports. that some we locations a significant replacement an team installed some by XXX,XXX approaching opportunity and maximize many are we and capture of base systems, detail ensuring services the their current around utilizing is look which

XXXX transaction delivering through focused As close detail now expected the for customers. With I hand us financial to our this walk over early third said, our Peter will regarding and performance Peter? to to remain I'll additional is for on that, teams quarter. respective it in

Peter Johansson

continue ability on my two factors. start of the month-to-date high the progress call exceeding $XX.X a million. Revenue third want CECO's until shortfall, a handful balance this quarter. to miss the comprised with In are work figure is of I being with all will X% basis [ third miss, up points This that in point instructed shortfall. And quarter, with levels, XX-month points the prior XX and versus in is good quarter reiterate the Todd typical down points for $XXX you year. of quarter to backlog in on a pointing up in job bookings the were quarters XXX basis delays basis points quarter, to to and period orders a arrival increase factor was QX quarter TTM balance about Please million I'll year-to-date million, that productivity ago, by strongest mix business delivered second expectations progress you signs points X the the closed on XX% results gross due The deliver a record quarter ] million on X customers a quarter and was to $XXX $XX quarter of this approximately EBITDA increase in Todd. margins variability XXXX our quarter X orders the approximately the excellence impacted EBITDA with impacted up an rundown timing. Well, the X that we attending continue and third year-over-year very to any period earnings be our subsequent continue prior in and million. the basis of we quarter profit and year the of our next -- with the has this line the a X.X was to benefits year, revenue trailing the which previously activities. being and prior in to that of at financial main third are sourcing versus margin where million pleased external in strategic our sequentially was in be Good XXX up impact to reflect basis, the as projects experiencing revenue XX.X%, Thank portfolio Large we while quarter Thank to of this The versus delays Starting the over execution, #X, in limited. a day, was give quarter the in basis. the material initiatives our teams. the XX.X% you, -- higher with resulted recognize backlog. $XXX our of sequentially. quarter number realized. Adjusted quick with represent X% X% the still with out which basis. I'm focus made increase profit versus operational since Gross years an on year-over-year the we end. see as fourth revenue single-digits. In down a turn XXXX, $XXX TTM points we that everyone. towards X approximately been make adjusted of the down the mentioned, of feel was that in adjusted growing XX% improving Orders a to margin -- the I volumes. XX% Timing of our TTM to EBITDA, same pause and for CECO, of of factor or today. for lower Slide year by in quarter,

$X.XX driven executing the lower and Our year on EBITDA with tax with offset improve tough which are interest result higher secure the timing. page. Adjusted off adjusted a a cash and in execution, by of projects items down flow, to as margins. Finishing capital cost, EPS versus and lower final the on teams the was manage comparison were working two expense partially down items, quarter by underlying prior

our an looking Page expanded by back Now by basis we CECO's have for a quarter with inflection had XXX margins X solidified in Over on gross doesn't our neutralize operating of happen like basis. The performance -- period of XX% by points, model, organic operating growth ] basis year the focus we was component in profit sourcing logistics and advancing operations approximately transformation felt result trajectory include this XXXX. model. A after efficiencies. This execution and our present chain Kemco in playbook. a economics, TTM shifted approximately excellence component of is deeper IT, the we of this On to over let's dollar acquisition. HR, when teams, excellence. material we on a of work initiatives be time, Todd compounded portfolio the improvement X with reached we quarterly operations completed X and this turn ago our growth excellence the for towards that M&A a [ I chance. shifted and result continues profit of operations in years. gross It These profit. towards approximately point to slide, We've specialists number of project corporate advancing gross from supply a annual to fluctuations, operating margin It the integration, of and look focus into assistance QX and

sustain and none feel inflation we was resources to requiring supply challenging that and is complexities project journey some overcoming capturing is performance. this risk positioned chain and improving of of delays. In without As opportunities, sources you our organization margins of headwinds, internal achieved CECO well can various including and a continue a a summary, and profitability balancing this imagine, to with efficiencies, and of

for Moving of X to flow and a cash Slide review quick liquidity.

facility, M&A start though, million is to from everyone our Before want revolving to increases The and senior capabilities capacity. significant to and $XXX now revolver X upsizing growth, systems. of Slide remind credit ability secured approximately investments and in expanding to upgrades our that all million and to we I fund a October details we the our business on facility announced of XXth, improvements on $XXX organic

now. our income the X on is the compared a October is new to X on to release XXth turning format found Slide free facility basis. from when Additional and X-K year-to-date net associated in down Slide -- on X side credit a previous -- on details a flow is the press be can walk Starting earnings. format new a website. Slide left cash

As impacted $X timing basis flow free less approximately capital of million, capital September customer due to negatively is year-to-date by on working higher XXth, a payment capital expenses. Working we cash lower by and timing. delivered

comparison payments. and were as consolidations, migration a lean This improve to year-over-year, difficult and to upgrades prior deploy $X customer and deliver up quarter year's in investments record in locations million production our ERP continued was also approximately output, CapEx and facilities investments we techniques. productivity machinery to select our

side gross a and streamlined debt third $XXX a right driving the On XXXX. our are of more $XX and of we debt leverage X.Xx the approximately ratio ended the the quarter approximately of slide, of uses with yielding We a bridge change the to EBITDA, sources of a debt net net up presenting million, year-end million position. resulting bank slightly from

sufficient the prior of facility. It to Xx capacity available built the the our of X.Xx be excuse with that, CECO's quarter working combined end the capacity period, million XXth, $XX to will leverage needs. And Our of acquisition, built CECO's is turn at ago September ensure ratio have solely the capital my fund a summary that year-end down to is condition to I additional max meet attributable decrease facility, capacity various levers our credit me, into quarter approximately base we additional new $XX that this on stepping from our results back Todd. which and million mic -- with a Profire conclude investments from and previous, over credit at third on on into to XXXX year when -- should noted expansion close

Todd Gleason

Peter. Thanks,

the for and to remainder go we the page are into #XX. as XXXX. head Please and of So discuss we seeing turn what let's XXXX Slide

mid-year. that to initially updating XXXX guidance are prior we We the presented XXXX outlook, guidance year going essentially full our to back provided raised the

to strong. We to X.X, are very remain up are orders which X.X a our book-to-bill of as X.XX expected is signaling higher from

outlook levels. EBITDA we adjusting and back However, to those revenue original are

EBITDA of year-over-year $XXX in are delays EBITDA, to nicely. is year-over-year result the $XXX sales forecast some the we our larger approximately XXXX full to backlogs, double-digit orders million, the projects challenges midpoint. Unfortunately, despite the be raise mid-year the influenced record in producing at full adjusted XX% as very one which And million, full outlook Still, and stalled our is really and forecast million revenue, up which that year in operating of XX% a as midpoint. high-teen For booking upside up a as growth, customer-driven the our our record, up for of growth $XX million year we $XX at to anticipated guidance environment, expected orders. year well tees approximately

Speaking of XXXX, growth how deliver discuss year. Please let's we go for to #XX. robust plan to next Slide

growing the is of backlog. One growth a indicators best large and for

of me. with backlog we date bookings, million As QX have levels and our exited with record excuse we outstanding said, orders QX $XXX to

jobs heading be energy valued power late million, higher to We or starting closing above gas are backlog $XX expect XXXX. opportunities likely or a to at realized more into are each either QX XXXX. The see transition large with that in

to we addition data balanced robust order large and pipeline, medium In have center, industrial opportunities. includes between small, which a water, well These air projects, power exciting these industrial gas and are infrastructure. pursuits

On side, ability Peter the results. confident to excellence have margins productivity, great expansion. coupled continue our operating and higher we should consistent to manner, in as earlier, margin enable EBITDA demonstrated expand meaningful we That will noted are with that our a deliver programs volumes, margin

will journey financial aspect air M&A our important portfolio a margin business environmental to a boost add industrial our Our WK, second rapidly to results. strengthening in businesses. programmatic leading of announcement, With we to remains their our transformational strong an added have of today's industrial Profire profile portfolio solutions and and and we

Slide to XX. Moving

backlog, growth. quick which provides Just visibility the a record towards exclamation very future point on

or we backlog million ] that the anticipate backlog throughout a end little of year, remainder $XXX to at adding [ experiences increased cancellations. the over a debookings over million backlog the rarely now to few of this and ago As steadily slide shows, $XXX years have we from a the QX, our

growth keys we backlog our XX. position, our that covered to and outlook the turn now have to Slide for XXXX. Please let's review So,

Let the half me with start the top page of on revenues.

higher the of given to this year a between the we well comprises expect inorganic full for closed organic growth XXXX sales, inorganic. The large and $XXX to Profire of We are Top organic transaction XXXX, million line and in organic bookings. is we growth a year acquisition the $XXX WK, beginning a the July; that out at comes midpoint. EnviroCare XX% split our introducing of growth just range earlier essentially full as month; of: revenues which closes year. The growth million increase at from as that year-over-year push assuming from

are year the the year XXXX for On adjusted lower to expansion, expansion a guidance $XXX to million, EBITDA XX% midpoint, solid more XX% between at XX% half, margin X EBITDA margins we equally of acquisitions. full and representing full million introducing balanced organic benefit reflects between an points of an $XX This XXX range which another the delivering than increase is the year-over-year, of also of year adjusted year-over-year. basis

Now, upside close we to to performance We up we very in pipeline. is a respect with forward of better align expansion, But and encouraging. coupled wrapping solid XXXX Those XXXX the from growing even continue we XXXX. progress happens, and to M&A and with make a the do driving sales look margin to out and our teams momentum and with a ball. visibility don't to for orders XXXX amount strong we items, all is good our visibility as that know we have have crystal start a stuff what great backlog,

In but concluding disappointed our for and summary, trajectory we some are in quarter, XX the our remarks. to third remain Let's in confident missed overall turn expectations outlook. we have to Slide

backlog. great a have We

to to portfolio. value M&A our bookings a remain are strong confident welcome these pipeline. businesses add have continue sustainable leading and growing and our sales We We we creation, excited will programmatic to

and always, complicated delivering to customers and CECO I navigating as team Finally, for thank for challenging markets. want our

all of call with inspire us up questions. You open now day. And for Operator? every that, we'll the

Operator

with [Operator Capital Rob Instructions] Markets. Our first Brown question comes from Lake Street

Robert Brown

order on is question First the environment.

you've set plant one what couple more or kind -- the those in in I project booked a that Could opportunity has you been and what you and booked, guess, then of talked and projects large I just I guess, is in think power as about outstanding, September of October. still potential? large clarify

Todd Gleason

Yes, ton can material all keep add this year. there's Yes. here Peter a it been highlighting and and I'll because start it. then of area, it short try to we've to We'll in

on-site with ongoing [ as discussed there's look, So, for as coal well much where industry lot space, areas anticipated well and ] need solar data more converting in providing adding power backup are the applications opportunities. gas-fired they're additional to There's earlier in in us initially those for industry et year, are the wind, have as and the for would power energy power come conversion natural we backup had power data a that we starting a folks lot the and scale for and to been as respect obviously a been centers an -- of articulating cetera, energy's plants, power. energy those also now. centers. All bookings real, in more of And with

] natural very So, booked generation the similar. for is full that position end the at emissions October have are we we applications believe booked [ of the leading are critical a systems. complex project quarter fourth projects we that the represent we to them at plant. power that The in solve power -- gas-fired Each of

year, the the support pleased to jobs end it the been more being quarter, the quarter to starting and $XX the maybe greater these million is levy that now now And -- of and have to those in $XX up approved. sort you open want had these are first notifying are to see obviously. and while started we're Companies ] things So if start efficient anywhere like permitted in that than to being the in call favor between booked that more suppliers half third or [ at one anticipated manner. partners our of would for We are of projects These have in to opened million. we think us. fourth a -- of moving

Peter Johansson

with described, XX XX standpoint and realized dynamics million X total. number between next the The a over $XXX be a total value pipeline and from in active just opportunities high the yield could as -- as Todd Rob, quarters.

based that of opportunity gross and will the move of in business, succeed in to but capturing some ability the availability Now and on U.S. permitting equipment that out that's our in

begun Middle them we haven't detail but requirements, as estimate large. and We to and equally India their East the and requirements, their

Robert Brown

Okay. then a you Great. you What's on can of And on public sales Profire, describe or company synergies. could sort acquisition. think synergies numbers gave I cost were the revenue synergies? good But view you get that more there? your that you think

Peter Johansson

Yes.

markets So business to to traditional industrial know today, they energy bringing ] XX% you side, through large, are the [ the a scratch Southeast Rob, larger, applications, is if business the than transport traditional We its the is overall the they've upside. markets U.S. of we Middle on and sales. essentially The as its begun and probably, industrial not as XX% service have Asian a in our opportunity, business production to which of East into to XX% with core potential substantial channels, and And markets. take to North American revenue markets, substantial that -- the of think core or well. new anticipate mix of business

Todd Gleason

sense, work with a ours introduce to at a with known opportunities which companies sort organization, helping of relationship of variety we certainly for comfort we where again, helped and even admired while the have have ways. good in We in evaluated helped growth could their that of the a a It potentially just of both synergies solutions of development experience combustion a the lead unlock us, management look Profire topic of to growth leading ] a to But this not perspective. their further. of and had to programs and lot acquiring development to and lot a [ and business makes -- had even in success business sense around sort from

already industrial in associated with here -- international the So as us both companies that their are infrastructure now put quickly there figure channels. obvious opportunity accelerate bring in products an can capture infrastructure in we the are markets, synergies well markets, place the partnership more as that's certainly with we've our to synergies being and and a public, that really to through to for

Operator

question next Spychalla with from comes Craig-Hallum. Our Aaron

Aaron Spychalla

Maybe the little little in can just first XXXX quarter? a wider for little Can at of confidence the and you guidance, talk kind delivery thinking a then that than fourth in of bit that quarter takes the just how bit me, and just guide? and about on in order just you talk about customer And about a the delays puts to maybe kind the first closing looking typical. ranges you're the timeline

Todd Gleason

as things it's and $XX And material million our year. execute somewhere all a that Yes. bit Well, this And had a have size, our as has a slides good between a have been that larger has $XX Aaron, we would repetitive question, million recognize, worth projects do, a of theme little throughout as it's to fair. and again, that are I in delays. decent of the we certainly been slow backlog our to project on highlighted,

way of [ customer our to complete can various P&L, ] basis, our in is with how turn fast projects dictate execute Now, percent that's which the income. starting, and revenue into we fast on start to good. recognize of delivery? into backlog our The standard, revenues and a do what those areas and will can is we and projects How are work we our

next and take -- quarter, year. in rolling next would of doesn't but So, some which we it happen to fourth a then much in more as out the with bit year fourth as possible the into little -- if quarter, see would certainly, have like we

today, October giving see visibility where our in could backlog. have based sit like, your the range Aaron, larger a on we So a we for slightly sense, there in we be in next that that question, answers just year, late guidance

moves of it's in the essentially a range, a that's of out wider more the incorporated or why so, a that's ranges. quarter, into great, that is going a little little to And which we going to is range. which both bit next be be either and bit bit It's fourth incorporated quarter year, in fourth the have the and little in

Aaron Spychalla

the you All you pipeline continuing looking this about makes for Thanks kind today business laid right. of you on how areas That grow of can some then that of with growth? just sense. capacity and to And see capitalize the the second, at about investment -- of color make kind there. the out, the to and that talk feel opportunities you for just guidance to and

Todd Gleason

to capacity -- Again, growth. good quarter will and believe also reflected and area so -- that a in me sort of miss, [ ability explain. ] is but operational the good little at, capture say earnings respect let Yes. very the third question a it's our it's bit with our it I execution of we execute, an one we're of manage, to

we start different sales, short-cycle bookings a right? if quickly in record ship are that quarter, As third recognize those we to majority bookings the And sales, probably company might we move sales. those a have were would have to and

are they they As are, projects.

backlog, on go what's on the have organization we front to has new as a rightsized execute The those that been delayed of combination of to preparing to bookings execute into are now so, are us. And our projects. backlog, want in that we in they and backlog as our well

adding of execute. quarter just the can't And a too is add project or down tough the and need not trick of too then those managers, for road getting qualified all tricky. the other or in or back engineers, course, of is it trick ahead to the But a willy-nilly and remove costs G&A resources to technicians. back, It so, field service is, go much X technicians, we have ahead much costs bookings quarter

the a both, represents challenges the have capacity, best we because we to the capability when great the asking, of with to resources represents respect we execute. project we these delays that also bookings, to of question it quarter little our have you're third the the of we go CECO, So, exactly have some need have ensure and

tremendous model. in bit, works leverage to just we works timing when that have favor, have our So us on then little patient. be against timing When a we

Peter Johansson

And in and add is in flex. partners' there ongoing Korea, effort position to States we working of to relative be effort and think make where our And new us our ongoing where We're the add -- Buy fabrication the challenges, suppliers, strategy to close very sources. Aaron, receiving have we conscious think we're or of a new additional in supply monitoring customers qualify is from supplier We the -- Canada good it's fabrication to of feel dollars to we're supply provisions as a fabrication Vietnam, for they're of we And with India United our That chain in chain, availability. constantly may subsidies. many in ahead part abilities we partners sell. that. U.S. other our and government-related there government in either address we're to America in

Operator

Our next from Capital. ROTH with question comes Gerry Sweeney

Gerard Sweeney

on the to a Just further energy little dig side. want

opportunities Peter, over So, $XXX ]? I X think you XX over on XX bookings maybe potentially to quarters. mentioned, million X opportunities, that's to [ I'm -- over XX XX assuming those quarters

Peter Johansson

through -- you them. recently seen chains constraints from decade. feed in the booking take That's -- Yes, may with jobs And the that's jobs Vernova right. the booking out X X of have of that pronouncements to the GE end Yes, these completion. supply seeing to inception These years delivering they're That's and

Gerard Sweeney

Got And mentioned... you. you

Todd Gleason

So, about it's the field. turbines getting into all

Gerard Sweeney

but XX earlier word your going different maybe to a is my on think I year opportunities. to last this And opportunities. touch words, you XX-ish not Yes. XX were that thought back said but I'm like looking you in second, I quarter you or at mentioned

here guess is I question -- the So,

Peter Johansson

Yes.

Gerard Sweeney

Are we seeing expansion in opportunities?

Peter Johansson

more are. through execution. permitting -- we going those referring on I'm opportunities. Yes, than are way and paper There's qualified And to

Todd Gleason

Yes.

Peter Johansson

that's you [ working teams the number. a than qualified -- are greater our pipeline ] So, so on could

Gerard Sweeney

of to $XXX that the XX what's win rate roughly, $XXX million, those And get to XX to that it. Got million?

Peter Johansson

That's total pipeline. the

historical Our put us lower estimating win rate number. would a

Peter Johansson

But there's two competitors.

it. I'll So, you let estimate

Gerard Sweeney

Okay.

That a to bit Okay. okay, to makes helpful. much it. little or I go Then Got wondering -- could Then I super the X, for how more switching their Profire. as about curious right? just was dig we was in a then -- and model, was if over So, bit, been time. revenue mean, minute recurring sense. of read some versus the website, et -- company this cetera, little through of But jumped -- but of release, is how on sort paging sort of is it's I the sales? a product I I the know much I it and press

Peter Johansson

Yes.

it, in defined well will replacement themselves, to service business is organization. as not service Their service the repair customer They're be look this So and XX%, replacing do revenue of critical as and is recurring They diagnostic. cycle. today, parts upgrade XX%. teams if lot call supplying a and you at a by pending spare about the start-up field necessarily commissioning

Gerard Sweeney

then And -- it. Got

Todd Gleason

-- appropriate being and is just we replacement. is it we Yes. which think the that now Which think for hitting time now accelerating

Gerard Sweeney

to at then, much sell typical that it. don't have Got if this replace want you're go into to to unit what's if point. it? And You going don't the you for

if its -- -- possible So

Peter Johansson

I this that's misquote Gerry, something time. would at

take look that. and a to with you we'll back So get

Gerard Sweeney

I'll -- let's record. the scratch that from

Todd Gleason

to smaller want would standard these -- certainly for what to than but our sale, compared compared CECO you -- price products -- we well-priced tag it's to have. CECO the much are for Well, if average market, the

-- are yes. the So are these so, in these --

Peter Johansson

These are not project sales.

Todd Gleason

are unit, dollars of mostly. thousands low These per

Gerard Sweeney

question. can that scratch We apologize. I

So head my when popped in came it up. it just

understand. I on So, Profire. one you -- and question maybe then, more Can

maybe clients base U.S., outside degree, sort -- that to the is at your As -- but existing when to have sell your there base, U.S., good in America and into think, you But touched base investment U.S. opportunity how remarks. base? it, or North with the you customer even look look of I you obviously, some on a or much inside your cross-sell, they

Peter Johansson

behave to in use down that for that to yet Well, it's be not downstream it supporting the works producers ] -- taking and is midstream well so Gerry. about other about this and which to that and equipment same cross-sell, similarly, Profire the markets migrating [ U.S. It's tap. model a able

Southeast Africa, So, footprint. to to have a Middle they required of treat, and look and in all extent use if some move gas in and infrastructure East, oil Asia don't at you in the the that's

sizable a footprint. very We have

Gerard Sweeney

Sure.

Peter Johansson

infrastructure leveraging existing commercially regions it's our to our to So, market those and and them existing teams. customer bringing in relationships

letting that the this to is degree, for with, customers Profire that's lever stepping then way. have in people organization the a their which is a of the do we So that development of the need to organizations as right sell some specialists applications and It's introduction. them Lever out leading technology, business work and do one. two connecting their industrial introducing tech. making then well, and provider what It's they the of the

Gerard Sweeney

And were -- East, North I Middle capital because constraints suspect Africa not they in

Todd Gleason

-- those of XX%

Gerard Sweeney

Huge [ ]. traffic

Todd Gleason

Canada. XX% U.S. in XX% sales the of -- Gerry, the that's and great.

our have service global to provide distribute -- with locations also we We footprint, have in product team basing. and

Operator

Our question from & comes next Needham Jim with Company. Ricchiuti

James Ricchiuti

wondering that about also function this is of as early delays. for a is just of and of how that to? we think you XXXX? in of one 'XX, deals part component much I'm But appreciate larger of the experienced, impact So the of have guys I the of a just there's some is, have terms impact of does you've impact of alluded on outlook type these And course you these that the questions delays that touched guess, this of I I normal the some business assume. this

Todd Gleason

through like part Yes. go -- working you the our like We're and our as quarterly could looks can linearity how the we're XXXX. we into imagine, plans It early of -- certainly XXXX. impact

be the view we'd that of as here, of to go year happy through we sort and -- we'll a kind Jim of So, through work all.

can -- we out we've might get chain a the year there we of on, things. that, what were That from had of said, bit with of a supply negatively now submit emerge opposite the ago which as issues X caught that COVID or jobs. So, were booking years impacting delays. availability relief I'll as one moving companies, in seeing was maybe Yes, a kind faster. up coming is of a And are of supply still the always of actually meaningfully last delays lot a factors and X.X it factor faster the we little multiple been sized here. We're of I projects is actually people areas couple call Either from, there chain associated of and or resources, and in oh, that before so, heard.

factors known of whether We where sort rates completed, the also certain understand are interest waiting for that become projects going. election some to presidential are it's or

go permitting longer, higher could allocated On [ delay weighted until associated to a another process that acceleration of I that In for look, one election. little we're availability. you where there government case, economic be another of you we're there's influencing is wait have of factors be and or is rates factor. So the with well, after factor have interest it think an bit those, this is a like a yet with, or a need in higher resource weight an project, much smaller ] slower activity. either know funding industrial I monies think on sometimes an one that a associated going distributed. multitude And project, to deceleration that or seeing factor some and a there's one what a environment through of projects or And to

is times our In at that we customers' seeing are and our scenario know. And debookings. outside So no what of we are of look, these control. control things outside

vote we're year or a confidence the In It fact, that happen. these start to in is just to going next of year. customers going received from unanimous going are start later to our -- we're we projects

And so, approvals do we the to can there's designs very our and do of they engineering pre-work little until similar. give us

So -- had have we wait frustrating they beginning year a we gap. quarter, have a been it's a X moved here, little little all forward and just had bit, because of jobs or at that, the third X wouldn't the we certain

million, actually million, revenue et talking we're third Just have jobs, $XX quarter that could deliveries, with million $XX the cetera. more enough or have to X executed $XX in -- X --

their factors we of never move look execute. of it's it's a don't the and -- away. look, be patient, on They negative to and These complicated go going So in that customer. that to But forward number they're working control. understand right. just through outside certainly a we're to and we're a jobs We are environment,

Peter Johansson

Jim, -- I'll one make one extraordinary, point. just Todd's highlight to that's I'll highlight

suffering third at and we extraordinary selected the This kind next that month work because ] banks, the that got were where have work get we water Are contracts it We project. the went two We add the an said, led going to experienced unable experience down to this to company financing uncertainty now We starting ] sitting you stop We're month. is ability back in said, verbal they're had against example bid an be very need projects to, of which more got and is And they kicked-off They largest [ last years. nice to growth We a to you they they money good our issued very that's company to X That's didn't ] Middle work the a one that We pains. days. were have thing, to go recapitalized this actually an we the instance. and XX this some so us?" "Yes." our when with underwrite competitively just services through And with went have we much -- in [ patient. to their there but to this and work to, point, of a working don't That's to external the the still factors that with start." finalize from succeeded frequently, "We're East a bonding "Guys, extend delay. of customer PO communication quarter. world. that supply [ in in of us the receiving back ] to [ hang in they've we with and came We on job.

James Ricchiuti

go there, you given guys of see you the business? the that given Todd, increasing you And I'm and the at perhaps this pipeline on larger out chasing book look issue it. you need do touched to as just resources have, of see the that wondering, after you Got backlog are resources.

Todd Gleason

our industry, look, internationally. now pursue of -- we amount go a are The experience respect that very in versus certainly their now industry. each it's amount hiring who in XX, have to industry Europe a those us mean, important a able a Sure. I to we purpose, ability It's And segment. in something that these make an this The partner acquisitions niche tremendous -- see in been to. opportunities. discuss there we and steadily platforms. We EnviroCare, Southeast tremendous we're to growing Similarly, Western markets of with other's of Asia leaders group in with and with talent. in connections very a have have think, way segment. we resources of an of don't review And seasoned -- have transactions fact another but people knowledge great we has a some constantly I and talented, combined now grab that XX benefits established -- on to And we constantly other and WK, have and XX, for

Now partner. with WK, So, we on have to and resources, right? faster allows the turn lights that us to

product But front Profire their capabilities, their of again, a leadership course, is their lot already their in R&D. leadership, team, us. Of for respect we management have of

to So, each those businesses, there's but support other's these with that support only a cross acquisitions not provide growth. resources lot

those are important on as we our pipeline. really So efficiencies execute

James Ricchiuti

Got it.

there is M&A pandemic. growth Revenues revenues? XXXX to Just during contributed been Were Profire. But they that quickly those on any volatile have through -- organic? particularly XXXX, all the meaningfully show from that that rate in

Peter Johansson

It organic. was

James Ricchiuti

Okay.

Todd Gleason

organic. largely Yes,

Peter Johansson

recovery, adjacent product of their product introduction The expansion market and -- business industrial into new markets. markets, and utility the

Operator

comes question Bobby with Capital from Northland Our Brooks next Markets.

Robert Brooks

X% about those believe of mind to XX% in I in revenues So be that the quarter. of business. they've about guys With industrial as -- then, can to from XX% now XXXX industrial of you mentioned -- to you right start that the And grow seen earlier they sales grow of you last think on Profire, revenues revenues

Peter Johansson

was of the you I XX% industrial gave Bobby, revenue. Yes, approximately number share of

Todd Gleason

Yes.

Robert Brooks

Okay.

XX%. So,

do small with going give maybe for still deck a I it's of you sense those So, a just could a mind, forward? really usually base think projects earnings hoping right? it's for could page but industrial Profire's Profire? was how big And customers, of that get big how them, are in has really industrial us -- So whole logos a you for

Peter Johansson

after the [ to have customer to back profile they're time we going more through you in get We'll experiencing. differences spend that ] some

Robert Brooks

Okay.

Peter Johansson

their industrial the -- is project from industrial customer. traditional The is different customer

some done is model well. the and different And they've adaptation so, service product as

our answer So, will fully, around and arms days. is that that get going an that we're more the to over next XX evolve

Robert Brooks

come new Okay. being grow connecting talked just XX% it as -- Or give types of maybe geographic guys -- introduce -- to to you customers. to us you bringing know, specific as them to mind sales of you industrial Could clear But Profire? just the of that? new their just detail being on I the well how that any customers revenues. beneficiaries that to of areas going then to XX% you've you would how Could get bridge any about obviously, you them be more think to maybe maybe solutions

Todd Gleason

Yes.

the like appreciate for a the So us. I and think, We it's absolutely question we question. look, -- focus

We 'XX. the in on said, as early haven't transaction. closed it's And we've

expect to an it We 'XX be early closure.

and amount for So you working relationships, We're there from it and not a on company. operating view operating as and together to to a have that to still should until certainly we and deal nor it going customer industrial premature good benefit nor that yet articulate They're we're and closes, tremendous of -- But I we're we solutions really down it. because, road be. standalone products lists, a us public the pretty bringing and tell happened can have would a that little be activity of as not we a market. start applications type public working we're to should frankly, standalone the are of hasn't company.

Robert Brooks

of head, just the next can you but aluminum like -- top the just Yes, I that I the I of million that. can can could business off solutions, question of -- answer. sparse of is asking million guess was like, out, the $XXX I month. Is I of guess these appreciate be one that couple large a kind the has use would Or you appreciate the could it curious $XXX ] that. been energy that different of orders mostly attributable Just maybe [ this mentioned makeup project? the to projects?

Todd Gleason

and platforms, the large markets, X/X it's with energy of month. It's variety -- in across X/X transition a our and to say project I'd associated brands date a diversified

let's booked with project in already look, little that over quarter-to-date. more our a it's we that's of X/X, meaningful $XXX than but million. October. about X/X orders that, I'd So in the we're But say go a

Robert Brooks

question And understand. for last me. I just Okay.

products seems to what your will presence. WK are build I is organization? acquisition, this just your the out that just example just really But of getting kind it applications On or to kind obviously, international it on into that some entry new a curious is markets? Or give WK focus now of more was of of

Peter Johansson

we the is you one waste highlight byproducts they The incineration using core excel temperature and of before incinerate I Page would then where exhausted. in at gas that high to point area the capture to the business. XX, applications they're

Todd Gleason

Right.

Peter Johansson

do that are a that can that you to there we combusts manages company we if to something is And one another. gas, system that and imagine -- might looking control acquire they with have

Robert Brooks

Yes.

Todd Gleason

we and new products that R&D in acknowledge very -- some on. be a would they have very -- have a They strong that behind also position we're

forward some portfolio. air industrial And other, only innovation acquired teams to we already were Very their -- together, their aggressively so very business, weeks investments. their we're each are technologies -- few a of capabilities capitalizing now in, engaged on that some it newly as and variety work behind we product fits much frankly, completed from is some which but our efficiencies, know to brings and but already getting the look a ours, their we new and on new

Operator

with next Wainwright. Our Sameer comes from question H.C. Joshi

Sameer Joshi

seems as Or In level going Should XX% to we from that margins. expected even EBITDA garner organic incremental your XXXX your margins forward? guidance it for the that of EBITDA, revenue EBITDA [indiscernible]... revenues well year-over-year there is historical is expect

Todd Gleason

What did... we

Sameer Joshi

go contribution ahead. -- sorry,

Todd Gleason

things productivity. on at categories how presented like way including One It's you. a walk, a And the we way mix, could we do the showing out good price two didn't because question, thanks. considering we what slide. there's is look, it, the EBITDA in a Yes, way, have least of but different where break that's guidance we do again, to ways we're

where as I'm going that much using how -- impact expansion So, of approach XX% try by How provide to is sort visibility component. that XX%, as get to from example. margin there there's those a you just to if you our do margins an an maybe

execution, mix, to, we in it's is price of -- the way other productivity, certain a sales like in synergies whether sort sense, did bundle growth. of sales and -- benefits The is and in it look, the and just or say, embedded other the

growth that completed, each we our revenue at components were what in we walk our so the to created them as that, above And margins did could the already with will for is 'XX to deliver, synergies the we as we XXXX embedded of said core, organic over well which it's productivity guidance outside or projects high And the through XX% of push M&A that when delayed believe, those into as well from walk the was the we've at. margins. as core, that to EBITDA announced efficiencies, is that was single-digit or

outlook we're the EBITDA up 'XX way XX% component our we're every leaving just for from an XXXX. provide EBITDA from is, then implied margin you to that margin and the to core with So, XX%, there walking same XX%, walks 'XX

-- to could some of throughout don't going come future the core potential to only is are the but way. year. that moves opportunity our core into Now, for see 'XX, challenges, know mix inflation, and the productivity, the Not goes we'll us there better a the execution that. improve things And with we how be course, 'XX in gets that upon

a So, we're simple EBITDA walk. for all that trying fairly to just account in

Sameer Joshi

have on very Understood. well back, a mean, you Stepping strategy it. I color. Thanks that executing programmatic you're acquisition and for

sources this that future a of of expect during forward? have tenure, like to if pause the should acquisitions capital cash do your And finance Given is one going biggest or enough not, you we acquisitions?

Peter Johansson

facility have more resources with as facility has nicely levers Sameer, acquired we if help to credit The help us will nicely, well us businesses expand, we're to continue, itself in growth. cash they flow which have -- very -- to are credit Yes, new than finance place, the necessary. additional adequate the generate continue we some

fully feel covered. we So,

Sameer Joshi

Thanks. you election, but the ball, either mentioned Understood. a scenarios see if out crystal you just, Todd have for then, do briefly And business? presidential your work I how think

Todd Gleason

we But with Sorry just see good this obviously. -- exhale, all, of first election huge respect luck knowing. either predicting way to a

So, believe 'XX, what just wouldn't -- there view rear -- as balanced, look to right? is mirror I individual a all to of related understanding is to what likely the 'XX, it's any that things either, be forward for -- or in organization big because some we side So right? respect to the what about pluses and -- [indiscernible], what -- regardless minuses would going us I a being that's future, say. We there moment will 'XX, policies. to concern happen Most result, with to this would are what with the as that -- that there's forward. we the the are a moves of like of could as some things suppose stabilization knowledge And I happened moving there happen, well articulate has of there are either

Operator

to conference This like closing to question-and-answer would concludes I session. the any for Gleason remarks. over our turn Todd back

Todd Gleason

Great. the we of Thank incredible And through for global thanks teams questions value all thanks today. the participants, that went know you. a to for our lot material. our course, are to We interest. thanks delivering your Well, of customers. to Again,

we've the investment their to continue aligned for made we upcoming announced and with and all customers' that acquisitions the We theme. exact protect and equipment, environment future, in protect the people, have industrial our protect year-to-date

Chicago Baird's well Baird IDEAS in be Dallas XXst. Investor will on at November XXth in on the Conference as Conference Southwest presenting We November as the -- Industrials

see that we hope investors those participating conferences, So, are to you. for in

lastly, or you with conference representatives. meet And sign go to that, year. the team do we'll when ahead off. fourth Thank we in you. or late you speaking to great with quarter want with And please forward out, next February release If our a our we Have reach look of day. results connect and

Operator

you conference has today's attending presentation. Thank now for concluded. The

disconnect. now may You

CECO Environmental (CECO) 29 Oct 242024 Q3 Earnings call transcript