UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 9, 2007
CECO ENVIRONMENTAL CORP.
(Exact Name of registrant as specified in its charter)
| Delaware | 0-7099 | 13-2566064 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
3120 Forrer Street,
Cincinnati, OH 45209
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (416) 593-6543
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02. | Results of Operations and Financial Condition. |
On May 9, 2007, CECO Environmental Corp. issued a press release announcing its financial results for the first quarter ended March 31, 2007. A copy of the press release is attached hereto as Exhibit 99.1.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits |
| Exhibit Number |
Exhibit Title | |
| 99.1 | Press Release dated May 9, 2007. | |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CECO ENVIRONMENTAL CORP. | ||||||
| Date: May 9, 2007 | By: | /S/ PHILLIP DEZWIREK | ||||
| Phillip DeZwirek | ||||||
| Chief Executive Officer | ||||||
|
|
Exhibit 99.1 |
| NASDAQ:CECE | NEWS RELEASE |
CECO ENVIRONMENTAL REPORTS
RECORD FIRST QUARTER 2007 RESULTS
Revenues Increase 78%
Operating Income Increases 258%
NEW YORK, May 9, 2007—CECO Environmental Corp. (NASDAQ:CECE), a leading provider of industrial ventilation and pollution control systems, today announced record first quarter results for the period ended March 31, 2007.
Financial highlights for the first quarter of 2007 compared to the first quarter of 2006 include:
| ü | Net sales increased $19.1 million or 78% from $24.4 million to $43.5 million; |
| ü | Gross profit increased $3.7 million or 90% from $4.1 million to $7.8 million; |
| ü | Operating income increased 258% from $696,000 to $2.5 million; |
| ü | Net income increased $1.9 million to $1.1 million as compared to a loss of $736,000; and |
| ü | Earnings per diluted share were $0.08 compared to a loss of $(0.07) per diluted share. |
Backlog as of March 31, 2007 was $119.8 million compared to $97.1 million as of December 31, 2006.
Chairman and CEO, Phillip DeZwirek, stated, “We are delighted to see our momentum continue into the new fiscal year. Our first quarter results mark our fifth consecutive quarter of record revenues and gross profitability compared to the corresponding comparable quarter in prior years.”
Mr. DeZwirek continued, “We believe this performance further demonstrates the success of our strategy of horizontal integration, whether by acquisition or organic new business start-ups, and vertical integration into our family of companies, to become a leading turnkey solution provider to the industrial ventilation and air pollution control market. We believe this is a distinct competitive advantage for us because customers desire a single source of responsibility, which we believe greatly simplifies our customers’ experience while providing them with access to a broad selection of products and services to meet their needs.”
Net sales for the first quarter increased 78% to $43.5 million. The comparative quarter-over-quarter growth in net sales was attributable to growth across substantially all of CECO’s products and services. Most notably, CECO experienced a large increase in contracting sales due to revenues generated by its H.M. White subsidiary, which was integrated into the CECO family in 2006. Additionally, CECO’s equipment sales grew due to the continuation of the expansion in the ethanol industry and the addition of one month of revenue from Effox.
“We believe this growth will continue in 2007 as customers continue to look for a complete one-stop solution provider. We recently received thirteen new orders totaling approximately $9.9 million that were secured by our Effox, Kirk & Blum, CECO Abatement and Busch International Subsidiaries,” said Rick Blum, President and Chief Operating Officer. Mr. Blum continued, “Our bookings run rate continues to be well ahead of last year’s. As of today, new bookings for the year stood at approximately $74.5 million.”
Gross profits in the first quarter increased 90% to $7.8 million compared to $4.1 million in 2006. Gross profit as a percent of net sales increased from 17.0% in 2006 to 18.0% in 2007. This increase was primarily the result of changes in product mix related to the significant increase in turnkey system sales and the addition of Effox to CECO’s equipment group. Dennis Blazer, CFO, stated, “Our strategy is to continue to pursue business opportunities that continue to enhance our overall profitability.”
Operating income was $2.5 million, or 5.7% of net sales, for the first quarter of 2007 compared to $696,000, or 2.9%, for the same period in 2006. The quarter over quarter and resulting year over year increases in operating income and operating margin are areas of focus for CECO. Mr. Blazer commented, “The increase in operating margin is a result of our ability to leverage our current base of fixed operating costs and a more favorable product mix.”
CECO will host a conference call on Thursday, May 10, 2007 at 8:30 a.m. EDT to review its financial results for the quarter. Additional details, including the call in number, have been released separately.
ABOUT CECO ENVIRONMENTAL
CECO Environmental Corp. is North America’s largest independent air pollution control company. Through its eight subsidiaries —Busch, CECOaire, CECO Filters, CECO Abatement Systems, kbd/Technic, Kirk & Blum, H. M. White, Inc. and Effox—CECO provides a wide spectrum of air quality services and products including: industrial air filters, environmental maintenance, monitoring and management services, and air quality improvements systems. CECO is a full-service provider to the steel, military, aluminum, automotive, ethanol, aerospace, electric power, semiconductor, chemical, cement, metalworking, glass, foundry and virtually all industrial process industries.
For more information on CECO Environmental please visit the company’s website at http://www.cecoenviro.com/
Contact:
Corporate Information
Phillip DeZwirek, CECO Environmental Corp.
Email: investors@cecoenviro.com
1-800-606-CECO (2326)
CECO Environmental Corp.
Consolidated Statements of Operations
(In thousands, except share and per share data)
(unaudited)
| Three months ended | ||||||||
| 3/31/2006 | 3/31/2007 | |||||||
| Net sales |
$ | 24,382 | $ | 43,463 | ||||
| Cost of sales |
20,249 | 35,626 | ||||||
| Gross Profit |
4,133 | 7,837 | ||||||
| Selling & Administrative |
3,145 | 5,017 | ||||||
| Depreciation & amortization |
292 | 326 | ||||||
| Operating income |
696 | 2,494 | ||||||
| Other income (expense) |
(1,080 | ) | 3 | |||||
| Interest expense |
(571 | ) | (558 | ) | ||||
| Income (loss) before tax |
(955 | ) | 1,939 | |||||
| Income tax expense (benefit) |
(219 | ) | 795 | |||||
| Net income (loss) |
$ | (736 | ) | $ | 1,144 | |||
| Per share data |
||||||||
| Net income (loss) per basic share |
$ | (0.07 | ) | $ | 0.10 | |||
| Net income (loss) per diluted share |
$ | (0.07 | ) | $ | 0.08 | |||
| Weighted average shares outstanding |
||||||||
| Basic |
10,913,503 | 11,494,948 | ||||||
| Diluted |
10,913,503 | 13,487,849 | ||||||
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to certain risks, uncertainties and assumptions. These risks and uncertainties, which are more fully described in CECO’s Annual and Quarterly Reports filed with the Securities and Exchange Commission, include changes in market conditions in the industries in which the Company operates. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated.