The following is a summary of the CECO Environmental Corp. (CECO) Q3 2024 Earnings Call Transcript:

Financial Performance:

• CECO reported lower than expected revenue for Q3 2024 due to delays in large project executions, with the revenue being $136 million, a 9% decrease compared to the same quarter last year.

• Adjusted EBITDA for the quarter was $14.3 million, down by 5% year-over-year.

• Gross profit margin for Q3 was robust at 33.4%, up 450 basis points from last year, reflecting effective material sourcing and productivity initiatives.

Business Progress:

• CECO achieved a record Q3 bookings of over $160 million, largely balanced across various order sizes.

• Achieved a historical high backlog of $438 million.

• Announced two significant acquisitions, WK Group and Profire Energy, which will enhance CECO's capabilities and market reach.

• Plans to expand investment in ERP migrations, machinery, and facility upgrades to support growth.

Opportunities:

• Record-level bookings and high backlog set a strong foundation for future revenue and EBITDA growth, particularly with the company's engagement in large energy transition projects.

• CECO plans to capitalize on the increasing opportunities in gas power projects, valued at over $50 million each.

• Strategically advancing international market penetration and industrial diversification through acquisitions.

Risks:

• Encountered delays in project executions due to external factors including regulatory and supply chain challenges, potentially impacting short-term revenue recognition.

• Integration risks associated with recent significant acquisitions, which may affect operational efficiency and cost synergies.

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