Upload
douglas-cunningham
View
219
Download
0
Embed Size (px)
Citation preview
Integrated Clean Air Solutions for Industry 1
INVESTOR PRESENTATIONMay 2010
A Global Leader in Integrated Clean Air Solutions for Industry
Integrated Clean Air Solutions for Industry 2
In addition to historical information, this presentation contains forward-looking statements. These statements relate to future events or our future financial performance. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors. The following factors, among others, could cause our actual results and performance to differ materially from the results and performance projected in, or implied by, the forward-looking statements: our dependence on fixed price contracts and the risks associated therewith, including actual costs exceeding our estimates and our method of accounting for contract revenue; our history of losses and possibility of further losses; the effect of poor operating results on our company; fluctuations in operating results from period to period due to seasonality of our business; the effect of growth on our infrastructure, resources, and existing sales; our ability to expand our operations in both new and existing markets; the potential for contract delay or cancellation; the potential for fluctuations in prices for manufactured components and raw materials; our ability to raise capital and the availability of capital resources; our ability to fully utilize and retain executives; the impact of federal, state, or local government regulations; labor shortages or increases in labor costs; economic and political conditions generally; and the effect of competition in the air pollution control and industrial ventilation industry.
We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in, or implied by, these forward-looking statements, even if new information becomes available in the future. Although the Company believes the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.
Safe Harbor Statement
Integrated Clean Air Solutions for Industry 3
Company: CECO Environmental Corp. Exchange / Ticker: NasdaqGM / CECE Headquarters: Cincinnati, Ohio Share Price (4/29/10): $5.15 52-Week High / Low: $5.64 / $2.63 Shares O/S Basic/Diluted: 14.4 million/17.8 million Insider Ownership: 27.9% Market Cap: $74.2 million Enterprise Value: $90.4 million 2009 Revenue: $139 million 2009 Adjusted EBITDA: $3.8 million Backlog (12/31/09): $66.5 million
Company Overview
Integrated Clean Air Solutions for Industry 4
Phillip DeZwirek - Chairman Founder and Chairman of CECO Environmental Corp. Chairman of API Technologies Corp. Graduate attorney, Graduate School of Business – University of California
Jeff Lang - Chief Executive Officer 30 years of industrial and energy-related operating and executive management experience Former Executive Vice President, Operating Officer at McJunkin Red Man Corp.,
a Goldman Sachs portfolio company with $4.5 billion in annual sales 25 years at Ingersoll Rand, including leading their Industrial Air Solutions sales, service and operations for North America Bachelors degree – Ohio University, MBA – Averett University
Dennis W. Blazer - CFO and Vice President – Finance and Administration 35 years of financial management experience Former CFO of Interlott Technologies – AMEX listed under symbol ILI Certified Public Accountant Bachelors degree – Ohio University
Company Leadership
Integrated Clean Air Solutions for Industry 5
Our Vision
To become a world-class company that produces exceptional value for our customers, shareholders, employees and communities by delivering:
Significant GrowthImplementing profitable ways to grow globally with premier solutions.
Product and Service ExcellenceCreating customer successes and building customer loyalty.
Operational ExcellenceRunning smart, lean, best-in-class processes.
Employee DevelopmentInvesting in the training and development of our employees.
Global Market CoverageProviding worldwide sales and manufacturing resources.
Safety LeadershipEnsuring employee safety with world-class safety practices.
Integrated Clean Air Solutions for Industry 6
We make the air cleaner for industry all over the world. Our systems, equipment and services:
Remove airborne contaminants within industrial facilities
Clean the air exhausted from those industrial facilities
CECO will be positioned well at the intersection of these critical global growth needs
Our Focus
Integrated Clean Air Solutions for Industry 7
What We Offer
A GLOBALLEADER INCLEAN AIRSOLUTIONS
EQUIPMENT
Cyclones
Thermal and Catalytic Oxidizers
Pulse Jet Baghouses
Scrubbers
Dampers & Expansion Joints
Electrostatic Precipitators
SERVICES
Industrial Ventilation Engineering
Pressure Vessel & Custom Fabrication
Energy Management
Stack Emission Testing
Electrostatic Precipitator Rebuilds
Precipitator Controls and Parts
Integrated Clean Air Solutions for Industry 8
Metals and Minerals EnergyPower – Utility
Industrial Manufacturing
EQUIPMENT
• Rolling Mill Filtration • Pulse Jet Baghouses • Scrubbers • Cyclones • Dampers Expansion Joints • Electrostatic Precipitators • Classifiers
EQUIPMENT
• SCR’S • Pulse Jet Baghouses • Scrubbers • Cyclones • Damper & Expansion Joint
EQUIPMENT
• Pulse Jet Baghouses • Cyclones • Oil Mist Collectors • Dampers & Exp. Joints • Electrostatic Precipitator
SERVICES
• Ventilation Engineering • Stack Testing • Energy Management • Air Balancing • Sheet Metal Fabrication • Installation Equipment
SERVICES
• ESP Rebuild • ESP Conversion Fabric Filter • Sheet Metal Fabrication • Pressure Vessel Fabrication • Precipitator Control-Parts
SERVICES
• Ventilation Engineering • Stack Testing • Energy Management • Air Balancing • Sheet Metal Fabrication • Installation Equipment
Markets Served
Integrated Clean Air Solutions for Industry 9
Alternative FuelsBiomass – Ethanol
Gasification
Chemical Processing Petroleum Refining
EQUIPMENT
• Thermal Oxidizers • Pulse Jet Baghouses • Scrubbers • Cyclones • Dampers & Expansion. Joints
EQUIPMENT
• Baghouses •Scrubbers • Cyclones • Dampers & Expansion Joints Fiber Bed Filtration
EQUIPMENT
• FCC Cyclones • Dampers & Exp. Joints Mesh Pads
SERVICES
• Ventilation Engineering • Stack Testing • Sheet Metal Fabrication • Installation Pollution Control
SERVICES
• Ventilation Engineering • Stack Testing • Sheet Metal Fabrication • Installation Pollution Control
SERVICES
• Precipitator Rebuild
Markets Served - continued
Integrated Clean Air Solutions for Industry 10
Typical Installations
Pulse Jet Baghouse Cement and Minerals Market
Severe Service Cyclone Petrochemical Market
FCC CyclonesRefinery Market
Fiber Bed Filtration Chemical Process Market
Regenerative Thermal Oxidizer Alternative Fuels Market – Ethanol
DampersPower and Utility Market
Integrated Clean Air Solutions for Industry 11
Energy Industry Solutions
Power Generation Compliance
Integrated Clean Air Solutions for Industry 14
Power34%
Refining13%
Chemical6%
Automotive6%
Food6%
Mfg./Misc.5%
Other18%
Steel4%
Sheet MetalContractors
9%
Global Bookings by Industry 2009 - $142 Million
Integrated Clean Air Solutions for Industry 16
Demand Driver: US Regulation
EPA has mandated industrial air quality standards by requiring MACT (Maximum Achievable Control Technology) for general air pollution as well as for NOx, SO2 and mercury reduction.
OSHA has established TLV (Threshold Limit Values) for more than 1,000 industrial contaminants.
DOE promotes new technology growth in biomass and gasification through its Financial Institution Partnership Program.
States continually promulgate new Renewable Energy Standards (RES) such as 12 to 15% technologies for electric companies.
Enforcement of these standards is expected to increase.
Integrated Clean Air Solutions for Industry 17
Demand Driver: Global Regulation
Clean Air For Europe (CAFÉ) Policy Development for Air Pollution Control in Europe
Eastern Europe Caucasus and Central Asia for Pollution Control (EECCA) Joint Policy Development
Ministry of Environmental Protection – People’s Republic of China
China has targeted 50% or greater reduction in SO2 and NOx emissions
Integrated Clean Air Solutions for Industry 18
Demand Driver: Energy
Worldwide net electrical demand is projected to double by 2030.
Projected GW
20-Year Growth
Sources: DOE’s Energy Information Agency ( EIA) and World Analysis & Forecast, McIlvaine Company
Integrated Clean Air Solutions for Industry 19
Biomass
Energy Policy Act of 2005 mandates 7.5 billion gallons of renewable fuels by 2012
Energy Independence and Security Act of 2007 expands mandate for US-grown biofuels to 36 billion gallons in 2022
Ethanol from corn capped at 15 billion gallons; rest must come from non-food cellulosic biomass
Gasification
World gasification capacity is expected to grow more than 70% by 2015
80+% of the growth will occur in China and India
US regulations will push demand for gasification
Demand Driver: Energy-Alternative Fuels
Integrated Clean Air Solutions for Industry 20
Our Strategy
Grow our core businesses – both domestically and globally.
Invest in strategic bolt-on acquisitions – globally.
Continue expanding in China and India.
Pursue evolving markets such as renewable fuels, gasification, and biomass.
Reshape our business to less cyclical end markets.
Achieve operational excellence. Lean, Best and Smart.
Integrated Clean Air Solutions for Industry 21
Competitive Advantages
The leading full-service provider of air pollution control and industrial ventilation products and services
Strong brand recognition and loyalty
Long-standing customer relationships
Technology leadership
End-to-end solutions; integrated systems capability
Globally focused
Integrated Clean Air Solutions for Industry 22
Acquisition Criteria
Must fit our core business of making the environment cleaner, safer and better
Must be accretive to near-term earnings
Must expand our global footprint and/or expand our product and service offerings
Must create opportunity for operating and administrative efficiencies
Must be willing to include an earn-out provision for shared risk
Must have a proven management team
Integrated Clean Air Solutions for Industry 23
FINANCIAL INFORMATION
A Global Leader in Integrated Clean Air Solutions for Industry
Integrated Clean Air Solutions for Industry 24
Revenues
Large one time project
$ in 000’s
$45,000
$190,953
$212,890
$5,000
Integrated Clean Air Solutions for Industry 25
Increasing Gross Margins
Improvement due to diversification of offerings and expanded customer base
Integrated Clean Air Solutions for Industry 26
Operating Income
$ in 000’s
* Excludes goodwill impairment charges
*
Integrated Clean Air Solutions for Industry 27
Adjusted EBITDA*
$ in 000’s
$4,598
$7,389
$15,008 $13,803
$3,771
2005 2006 2007 2008 2009
* See appendix for reconciliation to GAAP net income
Integrated Clean Air Solutions for Industry 28
Strong Cash Flow & Debt Reduction
$45,000Selected balance sheet information: 12/31/2009 12/31/2008
Total assets $ 77,500 $ 120,000
Total bank debt $ 2,700 $ 22,600
Convertible debt $ 10,800 $ 4,100
Shareholders’ equity $ 31,800 $ 44,500
Cash flow information – 12 months ended:
Operating cash flow
Debt repayment (borrowings)
12/31/2009
$ 14,900
$ 13,600
12/31/2008
$ 5,100
$(21,200)
$ in 000’s
Integrated Clean Air Solutions for Industry 30
Reconciliation
ADJUSTED OPERATING INCOME TO GAAP OPERATING INCOME
2005 2006 2007 2008 2009
Operating income as reported $3,525 $6,047 $12,634 $9,164 $(15,830)
Non cash goodwill impairment 17,110
$3,525 $6,047 $12,634 $9,164 $1,280
ADJUSTED EBITDA TO GAAP NET INCOME
Net Income $(435) $3,094 $6,305 $5,010 $(15,032)
Interest expense 2,413 1,997 1,978 1,479 1,321
Depreciation 1,167 1,139 1,232 1,605 1,760
Amortization - 90 391 1,551 759
Warrant (income) expense 806 (842) - - -
Non cash stock compensation - 143 741 1,189 997
Non cash goodwill impairment - - - - 17,110
Loss from continuing operations - - - - -
Income tax expense (benefit) 647 1,768 4,361 2,969 (3,144)
$4,598 $7,389 $15,008 $13,803 $3,771
Integrated Clean Air Solutions for Industry 31
Our Vision
To become a world-class company that produces exceptional value for our customers, shareholders, employees and communities by delivering:
Significant GrowthImplementing profitable ways to grow globally with premier solutions.
Product and Service ExcellenceCreating customer successes and building customer loyalty.
Operational ExcellenceRunning smart, lean, best-in-class processes.
Employee DevelopmentInvesting in the training and development of our employees.
Global Market CoverageProviding worldwide sales and manufacturing resources.
Safety LeadershipEnsuring employee safety with world-class safety practices.
Integrated Clean Air Solutions for Industry 32
A Global Leader in Integrated Clean Air Solutions for Industry
Jeff Lang – Chief Executive Officer
Phone: 513-458-2600
Email: [email protected]
Dennis Blazer – Chief Financial Officer
Phone: 513-458-2676
Email: [email protected]
Contact Information: