ceco presentation mar 2011
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Integrated Clean Air Solutions for Industry 111
INVESTOR PRESENTATION
MARCH 2011
A Global Leader in Integrated Clean Air Solutions for Industry
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Integrated Clean Air Solutions for Industry 222
In addition to historical information, this presentation contains forward-looking statements. Thesestatements relate to future events or our future financial performance. These statements are onlypredictions and involve known and unknown risks, uncertainties, and other factors. The followingfactors, among others, could cause our actual results and performance to differ materially from theresults and performance projected in, or implied by, the forward-looking statements: our dependenceon fixed price contracts and the risks associated therewith, including actual costs exceeding ourestimates 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 resultsfrom 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 manufacturedcomponents and raw materials; our ability to raise capital and the availability of capital resources; ourability to fully utilize and retain executives; the impact of federal, state, or local governmentregulations; 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. Althoughthe Company believes the expectations reflected in such forward looking statements are reasonable, itcan give no assurance that such expectations will prove to be correct.
Safe Harbor Statement
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Integrated Clean Air Solutions for Industry 333
CECOInvestor Highlights
Growing global demand for improved air pollution regulations
Comprehensive portfolio, products, services, and integrated solutions
Serving diverse industries and markets with strong brands
Strong long term customer relationships to facilitate global growth
Global market sales coverage expansion taking place
Operational excellence standards to drive margin and cost leadership
No bank debt and strong cash flow generation capabilities
New executive leadership focused on growth and shareholder value
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Integrated Clean Air Solutions for Industry 555
Key Facts About Us
Company: CECO Environmental Corp.
Exchange / Ticker: NasdaqGM / CECE
Headquarters: Cincinnati, Ohio
Share Price (1/7/11): $6.21
52-Week High / Low: $6.53 / $3.31
Shares O/S Basic/Diluted: 14.4 million / 17.8 million* Insider Ownership: 27.9%
Market Cap: $89.7 million
Enterprise Value: $100.5 million
Revenue TTM 9/30/10: $140.0 million
Adj. EBITDA TTM 9/30/10: $6.7 million
Backlog (9/30/10): $55.2 million
Bookings TTM 9/30/10: $141.3 million
*Includes 2.7 million shares related to $10.8 convertible note issued in November 2009
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Integrated Clean Air Solutions for Industry 666
Phillip DeZwirek - Chairman Founder and Chairman of CECO Environmental Corp.
Chairman of API Technologies Corp.
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 andoperations 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
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Integrated Clean Air Solutions for Industry 777
ACTIONSTAKEN- 2010
Improved SG&A and Gross Margin focus
Consolidated manufacturing footprint
Streamlined and upgraded management team
Raised operational excellence bar with balanced scorecard
Aggressively focused on China, India and Brazil
Re-engaged with investment community
Sold non-core manufacturing real estate
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Integrated Clean Air Solutions for Industry 88
STRATEGICGOALS - 2011
Grow revenue and continue margin improvement
Complete manufacturing and operations consolidations
Continue renewed North America sales and market coverage
Continue expanding China operations
Improve sales coverage in Brazil, India and Mexico
Select bolt-on acquisitions
Increase cash flow generation and shareholder return
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Integrated Clean Air Solutions for Industry 99
RecentNewOrders
INDUSTRY COUNTRY AMOUNT
Steel U.S. $5.2M
Refining Saudi Arabia $2.7M
Refining U.S. $2.5M
Refining Canada $1.5M
Automotive U.S. $0.7M
Refining Brazil $0.7M
Refining South Africa $0.7MPower U.S. $0.5M
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Integrated Clean Air Solutions for Industry 101010
WhatWe Offer
A GLOBALLEADER INCLEAN AIRSOLUTIONS
EQUIPMENT (60%)
Cyclones
Thermal and Catalytic
Oxidizers
Pulse Jet Baghouses
Scrubbers
Dampers &
Expansion Joints
Electrostatic Precipitators
SERVICES (40%)
Industrial Ventilation Engineering
Pressure Vessel &
Custom Fabrication
Energy Management
Stack Emission Testing
Electrostatic PrecipitatorRebuilds
Precipitator Controls and Parts
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Integrated Clean Air Solutions for Industry 111111
Installations
Pulse Jet BaghouseCement and Minerals Market
FCC CyclonesRefinery Market
Fiber Bed FiltrationChemical Process Market
Regenerative Thermal OxidizerAlternativeFuels Market Ethanol
DampersPower and Utility Market
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Integrated Clean Air Solutions for Industry 12121212
Sales Facilities F uture Agents
526 WorldwideEmployees
73 Sales Engineers
71 Sales Rep Agents
Global MarketCoverage
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Integrated Clean Air Solutions for Industry 131313
DemandDriver: Regulation
U.S. EPA has mandated industrial air quality standards by requiring MACT
(Maximum Achievable Control Technology) for general air pollution aswell as for NOx, SO2 and mercury reduction.
OSHA has established TLV (Threshold Limit Values) for more than1,000 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.
Global Clean AirFor Europe (CAF) 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 Peoples Republic of China
(China has targeted 50% or greater reduction in SO2 and NOxemissions)
ENFORCEMENTOFTHESESTANDARDSISEXPECTEDTOINCREASE
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Integrated Clean Air Solutions for Industry 141414
DemandDriver: EnergyGrowth
Worldwide net electrical demand is projected to double by 2030.
Projected GW
20-Year Growth
Sources: DOEs Energy Information Agency ( EIA) andWorld Analysis & Forecast, McIlvaine Company
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Integrated Clean Air Solutions for Industry 151515
Biomass
Energy Policy Act of 2005 mandates 7.5 billion gallonsof renewable fuels by 2012
Energy Independence and Security Act of 2007 expandsmandate for US-grown biofuels to 36 billion gallons in 2022
Ethanol from corn capped at 15 billion gallons; rest must comefrom 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
DemandDriver: Energy-Alternative Fuels
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Integrated Clean Air Solutions for Industry 16
Strong, Diverse andGlobalCustomer Base
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Integrated Clean Air Solutions for Industry 171717
2010Top 10Customers (product, % of bookings)
Delaware City Refining FCC cyclones (4.3%)
Siemens (Allegheny Steel) ventilation systems (4.1%)
Matheson Tri-Gas ventilation systems (2.7%)
Total Petrochemicals FCC cyclones (2.3%)
Arcelor Mittal baghouses (2.1%)
Foster Wheeler (Exxon) FCC cyclones (2.1%)
S&B Engineers (CITGO) FCC cyclones (1.9%)
Poet oxidizers (1.7%) Siemens Energy electrical equipment (1.7%)
Appomattox oxidizers (1.5%)
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Integrated Clean Air Solutions for Industry 181818
Global Installed Base of $2 Billion ofEquipmentRepresenting SignificantRecurringRevenue Opportunities
Cyclones and Scrubbers
Pulse Jet Fabric Baghouses
ESP, Electrostatic Precipitators
Dampers, Louvers, Flex Connectors
SO2Filtration
Specialty Ventilation Equipment
Thermal Regenerative Oxidizers
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Integrated Clean Air Solutions for Industry 191919
OurGrowth Strategy
Leverage customer relationships to expand globally
Continue investments into emerging markets (China, Brazil and India)
Continue to focus on streamlining operations and manufacturing to
enhance profitability Continue focus on higher value-added opportunities with improved
margin potential
Expand product offerings, services, and technologies
Operational excellence running smart, lean, and best-in-classprocesses
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Integrated Clean Air Solutions for Industry 202020
2010GlobalBookings by Industry- $129M
23.5%
17.5%
12.6%
11.7%
9.0%
4.5%
21.2%
Refining
Power
Sheet Metal
Chemical
Steel
Automotive
General Mfg/Other
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Integrated Clean Air Solutions for Industry 212121
FINANCIAL INFORMATION
A Global Leader in Integrated Clean Air Solutions for Industry
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Integrated Clean Air Solutions for Industry 2323232323
IncreasingGross Margins
Improvement due to product mix, price management,global customer base and operational streamlining
17.0% 16.6%
19.9%
22.3%23.3%
2006 2007 2008 2009 Q-3 '10
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Integrated Clean Air Solutions for Industry 2525252525
September 30 YTDResults - in 000s
2.9%
23.5%
$103,657 $102,396
$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
2010 2009
Net Sales
$24,144
$23,097
$22,000
$23,000
$24,000
$25,000
2010 2009
Gross profit
$3,588
$686
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
2010 2009
Operating income$1,362
$(948)$(1,500)
$(1,000)
$(500)
$-$500
$1,000
$1,500
2010 2009
Net income
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Integrated Clean Air Solutions for Industry 262626
$ in 000s
StrongCash Flow & DebtReduction
-10000
-5000
0
5000
10000
15000
20000
25000
30000
Sub/convertible
Bank debt
Operating cash flow
2007 2009 2010 - Q12006 20082005
Selected balance sheet information:9/ / / / 9
Cash ash i al ts $4,185 $1,393
Total assets $73,059 $ 77,500
Total bank debt (1) $3,099 $ 2,700
Convertible debt* $10,800 $ 10,800
Shareholders equity $33,996 $ 31,800
Cash flow information months ended:Operating ash flow
Debt (borrowings) repayment
(1)Total bank debt at12-31-10is $0
*Convertible at $4.00per share
9/30/2010
$3,249
($ 579)
12/31/2009
$ 14,900
$ 13,600
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Integrated Clean Air Solutions for Industry 272727
A Global Leader in Integrated Clean Air Solutions for Industry
Jeff Lang Chief Executive Officer
Phone: 513-458-2602
Email: jeff.lang@cecoenviro.com
Dennis Blazer ChiefFinancial Officer
Phone: 513-458-2676
Email: dblazer@cecoenviro.com
Contact Information:
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Integrated Clean Air Solutions for Industry 282828
Thank You!
A Global Leader in Integrated Clean Air Solutions for Industry
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Integrated Clean Air Solutions for Industry 292929
APPENDIX
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Integrated Clean Air Solutions for Industry 303030
Key Markets Served
Petrochemical
Refining
Chemical
Processing
AlternativeFuelsBiomass Ethanol
Metals
and Minerals
Energy Power
Utility
Industrial
Manufacturing
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Integrated Clean Air Solutions for Industry 313131
Metalsand Minerals
EnergyPower Utility
IndustrialManufacturing
EQUIPMENT Rolling Mill Filtration PulseJet Baghouses Scrubbers Cyclones Dampers Expansion Joints Electrostatic Precipitators Classifiers
EQUIPMENT
SCRS PulseJet Baghouses Scrubbers Cyclones Damper & Expansion Joint
EQUIPMENT
PulseJet 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
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Integrated Clean Air Solutions for Industry 323232
AlternativeFuelsBiomass Ethanol
Gasification
ChemicalProcessing
PetroleumRefining
EQUIPMENT
Thermal Oxidizers PulseJet Baghouses Scrubbers Cyclones Dampers & Expansion. Joints
EQUIPMENT
BaghousesScrubbers Cyclones Dampers & Expansion JointsFiber Bed Filtration
EQUIPMENT
FCC Cyclones Dampers & Exp. JointsMesh 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
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Integrated Clean Air Solutions for Industry 333333
Reconciliation
ADJUSTED OPERATING INCOME TO GAAP OPERATING INCOME
2006 2007 2008 20092010TTM
Operating income as reported $6,047 $12,634 $9,164 $(15,830) $(12,928)
Non cash goodwill impairment 17,110 17,110
Adjusted Operating Income $6,047 $12,634 $9,164 $1,280 $4,182
ADJUSTED EBITDA TO GAAP NET INCOME
Net Income $3,094 $6,305 $5,010 $(15,032) $(15,267)
Interest expense 1,997 1,978 1,479 1,321 942
Depreciation 1,139 1,232 1,605 1,760 1,438
Amortization 90 391 1,551 759 519
Warrant (income) expense (842) - - - -
Non cash stock compensation 143 741 1,189 997 983
Non cash goodwill impairment - - - 17,110 17,110
Income tax expense (benefit) 1,768 4,361 2,969 (3,144) 1,008
Adjusted EBITDA $7,389 $15,008 $13,803 $3,771 $6,733
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