CECO Presentation Mar 2011

8/7/2019 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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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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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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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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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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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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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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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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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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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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Sales Facilities F uture Agents

526 WorldwideEmployees

73 Sales Engineers

71 Sales Rep Agents

Global MarketCoverage


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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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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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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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Strong, Diverse andGlobalCustomer Base


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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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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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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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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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FINANCIAL INFORMATION



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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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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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$ 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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Jeff Lang Chief Executive Officer

Phone: 513-458-2602

Email: [email protected]

Dennis Blazer ChiefFinancial Officer

Phone: 513-458-2676

Email: [email protected]

Contact Information:


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Thank You!



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APPENDIX


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Key Markets Served

Petrochemical

Refining

Chemical

Processing

AlternativeFuelsBiomass Ethanol

Metals

and Minerals

Energy Power

Utility

Industrial

Manufacturing


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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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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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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

CECO Presentation Mar 2011

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