CECO Environmental Corp.

Good morning and welcome to the SECO Environmental Third Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Stephen Hooser, Investor Relations. Please go ahead.

Thank you, Andrea, and thank you for joining us on the SECO Environmental Third Quarter 2022 Earnings Call. On the call with me today is Todd Gleason, Chief Executive Officer, Peter Johansen, Chief Financial and Strategy Officer, and Ramesh Nugahalli, Chief Operating Officer. Before we begin, I would like to note that we have provided a slide presentation to help guide our discussion. The call will be webcast along with the earnings presentation, which is on our website at secoenviro.com under the investor relations section. I'd also like to caution investors regarding forward-looking statements. Any statements made in today's presentation that are not based on historical facts are forward-looking statements. Such statements are based on certain estimates and expectations and are subject to a number of risks and uncertainties. Actual future results may differ materially from those expressed or implied by the forward-looking statements. We encourage you to read the risks described in the SEC filings included on Form 10-K for the year ended December 31st, 2021. Except to the extent required by applicable securities law, We undertake no obligation to update or publicly revise any of the forward-looking statements that we make here today, whether as a result of new information, future events, or otherwise. Today's presentation will also include references to certain non-GAAP financial measures. We've reconciled the comparable GAAP and non-GAAP numbers in today's press release, as well as the supplemental tables in the back of the slide deck. And with that, I would now like to turn the call over to Chief Executive Officer Todd Gleason.

Todd? Thanks, Stephen, and good day, everyone. I'm going to start with slide number three of the presentation that Stephen mentioned. Let's get going. I'd like to begin with the note highlighted at the bottom of the slide. Effective as of today, our NASDAQ ticker symbol has officially changed to CECO. Once that ticker symbol became available earlier this year, we secured it as it always made sense for Seco Environmental to be listed as such. We are celebrating our 25th anniversary as a NASDAQ-listed company, so this is just a nice anniversary gift. But that's not the only bit of good news we want to share today. Let's discuss our financial results and outlook by reviewing the main points on the slide. We believe these are the key takeaways from our presentation today. We delivered another strong quarter. I'd like to thank our global teams for navigating the market challenges and supply chain issues that have persisted. We continue to deliver for our customers and our channel partners. In fact, we produced record third quarter revenue in EBITDA, and our third quarter was the second highest revenue quarter in the company's history. Additionally, this was our third consecutive quarter with new bookings above $100 million. our backlog remains close to all-time highs as a result of another solid quarter of orders. Importantly, as we will highlight in more detail on slide five, we are getting broad-based growth from across our enterprise. All diversified companies like to flex their muscle of diversification, and I would suggest SECO is doing exactly that in 2022 and, frankly, over the past 18 months or so. We also remain focused on our capital allocation programs. This will continue to be a hallmark of our value creation. In the quarter, we closed one acquisition, the purchase of DS21, a South Korea-based industrial water leader. In addition, we continued our stock repurchases. More on capital allocations in a few slides. The final two bullet points on this slide point to our full year 2022 guidance and our full year 2023 outlook. We are raising our 2022 guidance and introducing our outlook for next year. Bottom line is we expect to maintain strong growth and are committed to executing against our commitments. So, today is the first day for our NASDAQ ticker symbol as CECO, but another quarter where SECO delivers great results. Let's move to slide number four. This slide provides a summary snapshot of our third quarter in year-to-date financials. Peter will dive into our financials in more detail, but here are some highlights. On the left side of the slide, we highlight key financial metrics for the third quarter and year-over-year percentages. Three consecutive quarters with orders over $100 million. Another quarter with double-digit orders growth and up almost 40% year-to-date. Sales in Q3 and year-to-date are up over 30%, with 36% growth in the third quarter year-over-year. 165% growth in our adjusted EBITDA for Q3, and year-to-date EBITDA margins up 250 basis points year-over-year. So revenue and income growth continue to be really solid for SECO. Free cash flow continues to be very good for the year, and we expect to drive free cash flow as we go forward. Overall, we're just very pleased with our third quarter performance. Now let's move to slide number five. I referred to this slide when I was highlighting the key takeaways for the quarter and year-to-date performance. This slide provides a visual depiction of each of our eight platforms' orders growth rates on a year-to-date basis and over the past 18 months. All of our platforms have delivered double-digit orders growth over the past 18 months, a truly balanced growth profile. Obviously, some have demonstrated higher growth over the past year and a half, such as industrial air, But bottom line, each have grown. And from a year-to-date perspective, 75% of our platforms have delivered orders growth when compared to the first three quarters of 2021. I'm not going to read each of the platform growth figures, but you can see this is a balanced growth effort. And the two platforms that are showing year-to-date declines have great opportunities in the fourth quarter to close that gap and perhaps drive full-year growth themselves. The obvious point here is that our orders growth and near record backlog are not just the result of one or two big markets or one or two big projects, but instead a collection of great effort across our entire company. I would also remind the audience that when we organized into these eight platforms about a year and a half ago, I talked quite extensively about the goals and objectives of our focused platform organizational design. The objective was to drive more growth and a more nimble management approach to capturing opportunities in core or adjacent markets, to have more accountability at the core level that interacts directly with the customer. And after 18 months of driving consistent growth and performance, we would submit that this platform organizational design has been and will continue to be a real differentiation point for SECO. Now let's move on. Another somewhat unique slide is number six. Let's go there now. The eight platforms on the previous slide fit into these three strategic focus areas for SECO. Industrial air, which represents about 50% of our sales, industrial water, which now represents about 25%, and energy transition, which makes up the other 25%. A few of our platforms, such as separation and filtration, have solutions that cut across multiple strategic focus areas. That's why, for example, you see the peerless brand listed across the board. Compared to some platforms, our brands that are resident in only one, such as EIS or AdWest, those brands are strictly within our industrial air platform. Whichever is the case, we have a number of well-respected brands that solve key challenges for customers in industrial air, industrial water, and energy transition markets. And on the right section of this slide, you see a representative list of just some of our project wins. Much like the diversity and balance of our orders growth, we are sharing the same diversity we have been winning across these diverse markets. And these projects, again, are just a small sample size of course. You can read that within industrial air, we highlight a few semiconductor and electric vehicle wins for our various brands. There have been significant investments in these areas, and we believe these markets will continue to invest in expansion. The same thing for chemical, metallurgy, and food and beverage markets. Whether it is a $7 million project win for an aluminum manufacturer that required leading air management solutions, or a multi-billion dollar semiconductor fabrication facility that needs advanced scrubber technology, in this case, a $5 million solution that we provided, we believe Seco and our brands have a great position to serve these markets. Over the past years, we have steadily developed a sustainable niche leadership position in various industrial water markets. Our leadership position has been advanced through organic growth investments, and the acquisitions we have made throughout 2022. In the industrial water markets, we provide highly engineered solutions that capture, treat, clean, and offer reused produced water in heavy industry or energy market applications. Oftentimes, these require special certifications or being on rigorous approved vendor lists, an AVL, so to speak. The process to achieving engineering solution or AVL documentation can take years. And in many cases, these activities ensure to our customers that our solutions are approved for them to maintain regulatory compliance while also confirming their processes are efficient and safe. On the slide, we highlight a $15 million produced water treatment solution that our separation filtration platform's Peerless brand is delivering to a Middle East customer that required highly engineered water management solutions. We also highlight some smaller industrial solutions with the example shown regarding our FIBROC branded or Compass Water wins around saltwater recirculation or potable water treatment. In short, our industrial water strategic focus continues to build sustainable leadership across targeted niche areas that we believe we have every right to win, and thus we will continue to invest more organic and in organic growth. And finally, The energy transition opportunities are vast. We have a very strong position in legacy energy markets such as natural gas, power, and various refining applications. Now we are positioning SECO to simultaneously support those legacy customers and applications and also their needs to expand with purpose to new energy infrastructure investments associated with carbon capture, hydrogen, and other advanced gas solutions. One recent win is in the carbon capture space, an almost $4 million separation and filtration solution for carbon capture within an ethanol facility. This carbon will ultimately be sequestered and therefore eliminate environmental exposure. Similar solutions might utilize the carbon as a commercial product, and we are working on various projects where this might be the end goal. As carbon capture continues to receive investments in sequestration or commercialization, our solutions will be critical to aid in the development of large-scale infrastructure or more point-of-capture solutions. We look forward to highlighting many more of these examples in the coming quarters. Now, please turn to slide seven, which highlights our capital allocation actions. As the takeaway on the slide highlights, over the past 18 months, we have deployed almost $60 million towards the combination of strategic accretive acquisitions and share buybacks. The four acquisitions listed on the left side of the slide are helping to advance our leadership position in industrial air or helping to build a leadership position in industrial water. In Q1, we closed on general rubber, which adds water infrastructure and process applications. Then in Q2, We closed on Compass Water, which has membrane solutions specific to highly certified marine and naval applications. And in Q3, we just closed on DS21, which advances SECO's East Asia market access and adds great relationships with leading Korean EPCs and also provides proven industrial water engineered solutions. Each of these three acquisitions add niche leadership positions to industrial water solutions. The Western Air acquisition in Q2 helps to advance our industrial air position with standard dust collectors and energy efficient control solutions. Each acquisition is accretive. Each adds niche leadership in focused arenas with very strong management teams. While the transactions may seem small on a relative basis, we believe and know they add critical resources, great market leadership, geographic reach, and will drive meaningful growth. On the right side of the slide, we provide an update to our share repurchases. Combined in Q2 and Q3, we repurchased about $6.5 million worth of stock. This represented around 3% of our common stock and an average purchase price of around $7.69, a pretty nice discount to our current stock price. These purchases, when coupled with the $5 million worth of stock repurchased in 2021, represent a consistent utilization of cash to support shareholder value. So, while we just announced a three-year, $20 million authorization of stock repurchases in May, We have already utilized about a third of that utilization in just six months. Now, I would not suggest we are going to maintain this rate of stock buybacks, but the authorization gives us good flexibility, and we will be very prudent with our capital allocation. I will now hand it over to Peter Johanson, who will go through our financial details and provide an update on our full-year guidance. Peter?