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Ceco Environmental Corp, USA
COMPANY WATCH
Ceco Environmental Corp, USA
Flanders Corp, USA
Key Figures (US$ million) Second quarter ended 30.6 2011
2010
Key Figures (US$ million) Second quarter ended 30.6 2011
2010
Net Sales
32.5
34.8
Net Sales
65.0
63.1
Cost of Sales
23.8
26.4
Cost of Goods Sold
52.6
49.7
Gross Profit
8.7
8.4
Gross Profit
12.4
13.3
Operating Income/(Loss)
2.8
1.4
Operating Expense
8.5
9.2
Income/(Loss) before Tax
2.9
1.1
Operating Income/(Loss)
1.3
(7.6)
Net Income/(Loss)
2.0
0.6
Earnings(Loss) before Income Taxes
0.1
(8.0)
Net Earnings/(Loss)
0.0
(4.9)
Six months ended 30.6 2011
2010
119.5
111.9
Six months ended 30.6 2011
2010
Net Sales
68.5
69.8
Cost of Sales
51.3
53.4
Net Sales
Gross Profit
17.2
16.4
Cost of Goods Sold
97.3
91.4
Operating Income/(Loss)
5.3
2.0
Gross Profit
22.2
20.5
Income/(Loss) before Tax
5.0
1.4
Operating Expense
17.1
16.0
Net Income/(Loss)
3.2
0.7
Operating Income (Loss)
3.4
(11.1)
Earnings/(Loss) before Income Taxes
0.5
(11.7)
Net Earnings/(Loss)
0.3
(7.2)
COMMENT Air pollution control manufacturer Ceco Environmental has posted net sales for the second quarter of fiscal 2011 of US$32.5 million, a dip of 6.6% on the year earlier. Net income, however, was 233.3% stronger at US$2.0 million. Results for the corresponding six-month period followed a similar pattern with net sales 1.9% easier at US$68.5 million, but net income 357.1% higher at US$3.2 million. “I am very pleased with the results from the second quarter and the ongoing improvement in financial performance that the company has achieved,” Ceco’s CEO, Jeff Lang, said. “Our slightly lower revenues in the quarter are the result of our intentional pruning of lower margin customer segments from our backlog, primarily in our Contracting/Services Group. Nevertheless, we expect that revenues will increase as our
September 2011
domestic and global sales initiatives take effect.” Lang said that Ceco’s yearon-year bookings had increased by 14% and that the company enjoyed significant increases in gross margins and operating margins for both the three and six month periods. He added that Ceco had reduced its selling and administrative expenses for the quarter by 17.4% on the year earlier to US$5.7 million and by 17.0% for the half-year to US$11.7 million. “We continue to realize the positive results from global growth, streamlining and gross margin enhancement that we began implementing last year,” he said. “Additionally, nearly 32% of our 2011 bookings were from international customers which provides further proof that our global expansion initiatives continue to be successful.” ■ www.cecoenviro.com
COMMENT Air filtration manufacturer Flanders Corp has posted second quarter net sales of US$65.0 million, up 3.0% on a year earlier. Net profit reached US$48 000, reversing a year earlier loss of US$4.9 million. Harry Smith, Flanders’ chair and CEO, said revenues were ahead of their 2010 comparators for most of its segments including it commercial and industrial, and, high purity product lines. “With the company operating more efficiently than last year and our automation initiatives continuing to develop, we are expecting an exciting second half of 2011,” he added. Flanders’ CFO, John Oakley said that gross margins in the quarter were impacted by higher depreciation, while some of the larger projects for its containment products segment had
recorded lower margins than traditionally experienced on smaller projects. “Our automation projects continue on schedule,” Oakley added. “Interest costs increased dramatically due to the accounting required by the sale and leaseback of several facilities.” Oakley said Flanders now expected its 2011 revenues to be increase 5% to 8% on the previous year, despite some of its retail markets not growing as quickly as initially expected. Net sales for the corresponding half-year were up 7.0% on a year earlier at US$119.5 million, while net earnings reached US$287 000 compared with a loss of US7.2 million in 2010. Gross margin was 18.6% compared with 18.3% twelve months earlier. ■ www.flanderscorp.com
Filtration Industry Analyst
9
Ceco Environmental Corp, USA
Flanders Corp, USA
Key Figures (US$ million) Second quarter ended 30.6 2011
2010
Key Figures (US$ million) Second quarter ended 30.6 2011
2010
Net Sales
32.5
34.8
Net Sales
65.0
63.1
Cost of Sales
23.8
26.4
Cost of Goods Sold
52.6
49.7
Gross Profit
8.7
8.4
Gross Profit
12.4
13.3
Operating Income/(Loss)
2.8
1.4
Operating Expense
8.5
9.2
Income/(Loss) before Tax
2.9
1.1
Operating Income/(Loss)
1.3
(7.6)
Net Income/(Loss)
2.0
0.6
Earnings(Loss) before Income Taxes
0.1
(8.0)
Net Earnings/(Loss)
0.0
(4.9)
Six months ended 30.6 2011
2010
119.5
111.9
Six months ended 30.6 2011
2010
Net Sales
68.5
69.8
Cost of Sales
51.3
53.4
Net Sales
Gross Profit
17.2
16.4
Cost of Goods Sold
97.3
91.4
Operating Income/(Loss)
5.3
2.0
Gross Profit
22.2
20.5
Income/(Loss) before Tax
5.0
1.4
Operating Expense
17.1
16.0
Net Income/(Loss)
3.2
0.7
Operating Income (Loss)
3.4
(11.1)
Earnings/(Loss) before Income Taxes
0.5
(11.7)
Net Earnings/(Loss)
0.3
(7.2)
COMMENT Air pollution control manufacturer Ceco Environmental has posted net sales for the second quarter of fiscal 2011 of US$32.5 million, a dip of 6.6% on the year earlier. Net income, however, was 233.3% stronger at US$2.0 million. Results for the corresponding six-month period followed a similar pattern with net sales 1.9% easier at US$68.5 million, but net income 357.1% higher at US$3.2 million. “I am very pleased with the results from the second quarter and the ongoing improvement in financial performance that the company has achieved,” Ceco’s CEO, Jeff Lang, said. “Our slightly lower revenues in the quarter are the result of our intentional pruning of lower margin customer segments from our backlog, primarily in our Contracting/Services Group. Nevertheless, we expect that revenues will increase as our
September 2011
domestic and global sales initiatives take effect.” Lang said that Ceco’s yearon-year bookings had increased by 14% and that the company enjoyed significant increases in gross margins and operating margins for both the three and six month periods. He added that Ceco had reduced its selling and administrative expenses for the quarter by 17.4% on the year earlier to US$5.7 million and by 17.0% for the half-year to US$11.7 million. “We continue to realize the positive results from global growth, streamlining and gross margin enhancement that we began implementing last year,” he said. “Additionally, nearly 32% of our 2011 bookings were from international customers which provides further proof that our global expansion initiatives continue to be successful.” ■ www.cecoenviro.com
COMMENT Air filtration manufacturer Flanders Corp has posted second quarter net sales of US$65.0 million, up 3.0% on a year earlier. Net profit reached US$48 000, reversing a year earlier loss of US$4.9 million. Harry Smith, Flanders’ chair and CEO, said revenues were ahead of their 2010 comparators for most of its segments including it commercial and industrial, and, high purity product lines. “With the company operating more efficiently than last year and our automation initiatives continuing to develop, we are expecting an exciting second half of 2011,” he added. Flanders’ CFO, John Oakley said that gross margins in the quarter were impacted by higher depreciation, while some of the larger projects for its containment products segment had
recorded lower margins than traditionally experienced on smaller projects. “Our automation projects continue on schedule,” Oakley added. “Interest costs increased dramatically due to the accounting required by the sale and leaseback of several facilities.” Oakley said Flanders now expected its 2011 revenues to be increase 5% to 8% on the previous year, despite some of its retail markets not growing as quickly as initially expected. Net sales for the corresponding half-year were up 7.0% on a year earlier at US$119.5 million, while net earnings reached US$287 000 compared with a loss of US7.2 million in 2010. Gross margin was 18.6% compared with 18.3% twelve months earlier. ■ www.flanderscorp.com
Filtration Industry Analyst
9