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CECO Environmental Corp, USA
COMPANY WATCH
CECO Environmental Corp, USA
DXP Enterprises Inc, USA
Key Figures (US$ million) Third quarter ended 30.9 2013
2012
Net Sales
49.8
33.1
Cost of Sales
35.2
22.6
Gross Profit
14.6
10.5
Operating Income/(Loss)
(3.4)
4.3
Income/(Loss) before Tax
(2.3)
0.6
Net Income/(Loss)
(1.5)
3.3
Nine months ended 30.9 2013
2012
128.6
100.7
Cost of Sales
88.6
69.5
Gross Profit
40.0
31.3
Net Sales
Operating Income/(Loss)
3.3
12.3
Income/(Loss) before Tax
2.7
11.3
Net Income/(Loss)
3.8
7.8
COMMENT Air pollution control manufacturer CECO Environmental has posted net sales for the third quarter of fiscal 2013 of US$49.8 million, up 50.4% from the year prior. Recent acquisitions contributed US$16.8 million of revenue in the quarter, including US$7.3 million from just over a month’s trading from Met-Pro Corp. The company reported a net loss of US$1.5 million for the quarter, compared with a gain in the 2012 comparator of US$3.3 million. Excluding various costs related to the Met-Pro acquisition and legal reserves, net income rose 48.5% on the year earlier to US$4.9 million. “Business quotation activity in the third quarter was steady, however, during the quarter we experienced several project order delays due to general market slowness,” Jeff Lang, CECO CEO, said. “Not-withstanding, we achieved several important
8
Pump Industry Analyst
milestones in the quarter including increased global bookings activity, building backlog to over US$100 million, significant integration progress and expanding our global growth platform.” Lang added that CECO would continue to focus on its key initiatives, including capturing merger cost synergies, expanding its recurring revenue base, and increasing its presence in China. “As we move forward with the integration of Met-Pro, we will be simplifying and streamlining our business along three key strategic segments – Power Generation, Air Pollution Control, and, Fluid HandlingFiltration,” he said. “We will be reporting our operations along these lines in fiscal 2014 as we believe it better represents our combined business and operational strategy.” ■ www.cecoenviro.com
Key Figures (US$ million) Three months ended 30.9 2013
2012
Sales Of Which: Innovative Pumping Solutions
329.7 61.1
38.9
Cost of Sales
232.6
206.4
Gross Profit
97.1
83.5
Selling, General and Admin Expense
70.2
59.0
Operating Income Of Which: Innovative Pumping Solutions
26.9
24.5
9.1
7.2
Net Income
16.4
13.1
Nine months ended 30.9 2013 Sales Of Which: Innovative Pumping Solutions
289.9
2012
927.8
804.1
155.6
113.5
Cost of Sales
650.0
572.5
Gross Profit
277.7
231.6
Selling, General and Admin Expense
204.9
166.3
Operating Income Of Which: Innovative Pumping Solutions
72.9
65.3
24.3
22.4
Net Income
43.3
36.9
COMMENT DXP Enterprises Inc’s third quarter sales increased 7% sequentially and 14% year over year to US$329.7 million, while net income was up 25.2% on a year earlier to US$16.4 million. After excluding sales from acquisitions of US$28.9 million, sales for the third quarter of 2013 increased US$10.9 million, or 3.8% from 2012 on a same store sales basis. David Little, DXP Enterprises chairman and CEO, said: “Strong execution enabled DXP to achieve solid results again this quarter. We believe our focus on growth, productivity and efficiency, combined with our optimism on the acquisition front, position us well for the balance of 2013 and beyond.”
Speaking before DXPE Enterprises announced plans to acquire B27 (see front page), senior vice president and chief financial officer Mac McConnell, added: “Specifically, we are realizing solid free cash flow, having spent over US$19 million on acquisitions while also paying down over US$11 million in debt during the quarter. Through the first nine months of 2013, DXP spent approximately US$61 million on acquisitions achieving our goal of 10% inorganic growth, all while deleveraging the balance sheet. Our leverage ratio under our credit facility at 30 September 2013 is 1.8:1, giving us substantial room for future acquisitions.” ■ www.dxpe.com
December 2013
CECO Environmental Corp, USA
DXP Enterprises Inc, USA
Key Figures (US$ million) Third quarter ended 30.9 2013
2012
Net Sales
49.8
33.1
Cost of Sales
35.2
22.6
Gross Profit
14.6
10.5
Operating Income/(Loss)
(3.4)
4.3
Income/(Loss) before Tax
(2.3)
0.6
Net Income/(Loss)
(1.5)
3.3
Nine months ended 30.9 2013
2012
128.6
100.7
Cost of Sales
88.6
69.5
Gross Profit
40.0
31.3
Net Sales
Operating Income/(Loss)
3.3
12.3
Income/(Loss) before Tax
2.7
11.3
Net Income/(Loss)
3.8
7.8
COMMENT Air pollution control manufacturer CECO Environmental has posted net sales for the third quarter of fiscal 2013 of US$49.8 million, up 50.4% from the year prior. Recent acquisitions contributed US$16.8 million of revenue in the quarter, including US$7.3 million from just over a month’s trading from Met-Pro Corp. The company reported a net loss of US$1.5 million for the quarter, compared with a gain in the 2012 comparator of US$3.3 million. Excluding various costs related to the Met-Pro acquisition and legal reserves, net income rose 48.5% on the year earlier to US$4.9 million. “Business quotation activity in the third quarter was steady, however, during the quarter we experienced several project order delays due to general market slowness,” Jeff Lang, CECO CEO, said. “Not-withstanding, we achieved several important
8
Pump Industry Analyst
milestones in the quarter including increased global bookings activity, building backlog to over US$100 million, significant integration progress and expanding our global growth platform.” Lang added that CECO would continue to focus on its key initiatives, including capturing merger cost synergies, expanding its recurring revenue base, and increasing its presence in China. “As we move forward with the integration of Met-Pro, we will be simplifying and streamlining our business along three key strategic segments – Power Generation, Air Pollution Control, and, Fluid HandlingFiltration,” he said. “We will be reporting our operations along these lines in fiscal 2014 as we believe it better represents our combined business and operational strategy.” ■ www.cecoenviro.com
Key Figures (US$ million) Three months ended 30.9 2013
2012
Sales Of Which: Innovative Pumping Solutions
329.7 61.1
38.9
Cost of Sales
232.6
206.4
Gross Profit
97.1
83.5
Selling, General and Admin Expense
70.2
59.0
Operating Income Of Which: Innovative Pumping Solutions
26.9
24.5
9.1
7.2
Net Income
16.4
13.1
Nine months ended 30.9 2013 Sales Of Which: Innovative Pumping Solutions
289.9
2012
927.8
804.1
155.6
113.5
Cost of Sales
650.0
572.5
Gross Profit
277.7
231.6
Selling, General and Admin Expense
204.9
166.3
Operating Income Of Which: Innovative Pumping Solutions
72.9
65.3
24.3
22.4
Net Income
43.3
36.9
COMMENT DXP Enterprises Inc’s third quarter sales increased 7% sequentially and 14% year over year to US$329.7 million, while net income was up 25.2% on a year earlier to US$16.4 million. After excluding sales from acquisitions of US$28.9 million, sales for the third quarter of 2013 increased US$10.9 million, or 3.8% from 2012 on a same store sales basis. David Little, DXP Enterprises chairman and CEO, said: “Strong execution enabled DXP to achieve solid results again this quarter. We believe our focus on growth, productivity and efficiency, combined with our optimism on the acquisition front, position us well for the balance of 2013 and beyond.”
Speaking before DXPE Enterprises announced plans to acquire B27 (see front page), senior vice president and chief financial officer Mac McConnell, added: “Specifically, we are realizing solid free cash flow, having spent over US$19 million on acquisitions while also paying down over US$11 million in debt during the quarter. Through the first nine months of 2013, DXP spent approximately US$61 million on acquisitions achieving our goal of 10% inorganic growth, all while deleveraging the balance sheet. Our leverage ratio under our credit facility at 30 September 2013 is 1.8:1, giving us substantial room for future acquisitions.” ■ www.dxpe.com
December 2013