CECO Environmental Corp (CECO) Q2 2024 Earnings Call Highlights: Strong Financial Performance ...

GuruFocus News
4 min read

In This Article:

  • Revenue: $138 million in Q2, a 6% increase year-over-year.

  • Gross Profit: $49 million, up 23% from Q2 last year.

  • Gross Margin: Nearly 36%, an increase of about 500 basis points year-over-year.

  • Adjusted EBITDA: $16.1 million, up 18% year-over-year.

  • EBITDA Margin: 11.7%, up approximately 120 basis points year-over-year.

  • Adjusted EPS: $0.20, up 33% year-over-year.

  • First Half Sales: $264 million, up 9% year-over-year.

  • First Half Adjusted EBITDA: Over $29 million, up 26% year-over-year.

  • First Half Adjusted EPS: $0.32, up 28% year-over-year.

  • Free Cash Flow: Increased compared to last year.

  • Orders: $286 million for the first half, with a book-to-bill ratio of 1.08.

  • Backlog: $391 million, near-record levels.

  • Full Year Revenue Guidance: Raised to $600 million to $620 million, up about 12% at the midpoint.

  • Full Year Adjusted EBITDA Guidance: Raised to $68 million to $72 million, up about 21% at the midpoint.

  • Recent Acquisition: EnviroCare International, with annualized sales of approximately $13 million.

Release Date: July 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • CECO Environmental Corp (NASDAQ:CECO) reported its highest second quarter sales, gross profit, and adjusted EBITDA, demonstrating strong financial performance.

  • The company achieved a 6% increase in sales compared to the previous year, despite timing delays in customer-driven projects.

  • Gross profit increased by 23% year-over-year, with gross margins improving by 500 basis points, reflecting operational excellence and strong project execution.

  • Adjusted EBITDA rose by 18%, with margins expanding by 120 basis points due to higher volumes, positive mix, and G&A efficiencies.

  • CECO Environmental Corp (NASDAQ:CECO) raised its full-year guidance for both revenue and adjusted EBITDA, indicating confidence in continued growth and performance.

Negative Points

  • Orders for the first half of 2024 were down 7% year-over-year, with a longer booking process for large customer opportunities impacting order volumes.

  • The company experienced timing delays in revenue recognition due to customer-driven project delays, affecting sales performance.

  • Despite a strong pipeline, large project bookings have been delayed, impacting the overall order intake for the first half of the year.

  • Net debt increased by $10 million from year-end 2023, with leverage moving up slightly, indicating higher financial obligations.

  • The company did not complete any acquisitions in the first half of 2024, potentially limiting growth opportunities through inorganic means.

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