On July 30, 2024, CECO Environmental Corp (CECO, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. CECO Environmental Corp serves the energy, industrial, and other niche markets through its Engineered Systems and Industrial Process Solutions segments.
Performance Overview
CECO Environmental Corp (CECO, Financial) reported a revenue of $137.5 million for Q2 2024, which represents a 6% increase year-over-year but fell short of the analyst estimate of $143.32 million. The company achieved a gross profit of $49.0 million, up 23%, and a gross margin of 35.6%, up 480 basis points. Net income for the quarter was $4.5 million, a 22% increase from the previous year, while non-GAAP net income was $7.4 million, up 42%. The GAAP EPS (diluted) was $0.12, meeting the analyst estimate, and the non-GAAP EPS (diluted) was $0.20, up 33%.
Key Financial Achievements
CECO Environmental Corp (CECO, Financial) set several financial records this quarter, including the highest second-quarter sales, gross profit, and adjusted EBITDA. The adjusted EBITDA was $16.1 million, reflecting an 18% increase from the previous year. However, free cash flow was $2.6 million, down $7.4 million from the same period last year.
“We continue to deliver strong results while maintaining our strategic investments and programmatic M&A to advance our operating model as we pursue exciting growth opportunities across industrial air, industrial water, and energy transition,” said CECO’s Chief Executive Officer, Todd Gleason.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $137.5 million | $129.2 million |
| Gross Profit | $49.0 million | $39.8 million |
| Net Income | $4.5 million | $3.7 million |
| Adjusted EBITDA | $16.1 million | $13.7 million |
Balance Sheet and Cash Flow
As of June 30, 2024, CECO Environmental Corp (CECO, Financial) reported total assets of $598.1 million, slightly down from $600.3 million at the end of 2023. The company’s cash and cash equivalents stood at $36.5 million, down from $54.8 million. Total liabilities were $358.3 million, a slight decrease from $362.8 million at the end of 2023.
Strategic Acquisition and Raised Guidance
CECO Environmental Corp (CECO, Financial) completed the acquisition of EnviroCare International (ECI), a designer and supplier of industrial exhaust air contamination treatment and control systems. This acquisition is expected to contribute approximately $13 million in sales for the full year 2024 with mid-teen EBITDA margins.
Following the acquisition, CECO raised its full-year 2024 revenue guidance to between $600 and $620 million, up approximately 12% at the midpoint. The adjusted EBITDA guidance was also raised to between $68 and $72 million, up approximately 21% year-over-year at the midpoint.
“This marks the second time we have raised guidance since introducing our full-year 2024 outlook in November of 2023. I am pleased we continue to deliver on our financial commitments while maintaining investments in organic growth, operational excellence, portfolio transformation, M&A, and talent,” added Gleason.
Conclusion
CECO Environmental Corp (CECO, Financial) has demonstrated robust financial performance in Q2 2024, setting several records despite missing revenue estimates. The strategic acquisition of EnviroCare International and the raised full-year guidance reflect the company's commitment to growth and operational excellence. Investors and stakeholders will be keenly watching how these developments unfold in the coming quarters.
Explore the complete 8-K earnings release (here) from CECO Environmental Corp for further details.
