Integrated Clean Air Solutions for Industry 1 INVESTOR PRESENTATION May 2010 A Global Leader in...

Integrated Clean Air Solutions for Industry 1

INVESTOR PRESENTATIONMay 2010

A Global Leader in Integrated Clean Air Solutions for Industry


In addition to historical information, this presentation contains forward-looking statements. These statements relate to future events or our future financial performance. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors. The following factors, among others, could cause our actual results and performance to differ materially from the results and performance projected in, or implied by, the forward-looking statements: our dependence on fixed price contracts and the risks associated therewith, including actual costs exceeding our estimates 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 results from 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 manufactured components and raw materials; our ability to raise capital and the availability of capital resources; our ability to fully utilize and retain executives; the impact of federal, state, or local government regulations; 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. Although the Company believes the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.

Safe Harbor Statement


Company: CECO Environmental Corp. Exchange / Ticker: NasdaqGM / CECE Headquarters: Cincinnati, Ohio Share Price (4/29/10): $5.15 52-Week High / Low: $5.64 / $2.63 Shares O/S Basic/Diluted: 14.4 million/17.8 million Insider Ownership: 27.9% Market Cap: $74.2 million Enterprise Value: $90.4 million 2009 Revenue: $139 million 2009 Adjusted EBITDA: $3.8 million Backlog (12/31/09): $66.5 million

Company Overview


Phillip DeZwirek - Chairman Founder and Chairman of CECO Environmental Corp. Chairman of API Technologies Corp. Graduate attorney, Graduate School of Business – University of California

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 and operations 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


Our Vision

To become a world-class company that produces exceptional value for our customers, shareholders, employees and communities by delivering:

Significant GrowthImplementing profitable ways to grow globally with premier solutions.

Product and Service ExcellenceCreating customer successes and building customer loyalty.

Operational ExcellenceRunning smart, lean, best-in-class processes.

Employee DevelopmentInvesting in the training and development of our employees.

Global Market CoverageProviding worldwide sales and manufacturing resources.

Safety LeadershipEnsuring employee safety with world-class safety practices.


We make the air cleaner for industry all over the world. Our systems, equipment and services:

Remove airborne contaminants within industrial facilities

Clean the air exhausted from those industrial facilities

CECO will be positioned well at the intersection of these critical global growth needs

Our Focus


What We Offer

A GLOBALLEADER INCLEAN AIRSOLUTIONS

EQUIPMENT

Cyclones

Thermal and Catalytic Oxidizers

Pulse Jet Baghouses

Scrubbers

Dampers & Expansion Joints

Electrostatic Precipitators

SERVICES

Industrial Ventilation Engineering

Pressure Vessel & Custom Fabrication

Energy Management

Stack Emission Testing

Electrostatic Precipitator Rebuilds

Precipitator Controls and Parts


Metals and Minerals EnergyPower – Utility

Industrial Manufacturing

EQUIPMENT

• Rolling Mill Filtration • Pulse Jet Baghouses • Scrubbers • Cyclones • Dampers Expansion Joints • Electrostatic Precipitators • Classifiers

EQUIPMENT

• SCR’S • Pulse Jet Baghouses • Scrubbers • Cyclones • Damper & Expansion Joint

EQUIPMENT

• Pulse Jet 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


Alternative FuelsBiomass – Ethanol

Gasification

Chemical Processing Petroleum Refining

EQUIPMENT

• Thermal Oxidizers • Pulse Jet Baghouses • Scrubbers • Cyclones • Dampers & Expansion. Joints

EQUIPMENT

• Baghouses •Scrubbers • Cyclones • Dampers & Expansion Joints Fiber Bed Filtration

EQUIPMENT

• FCC Cyclones • Dampers & Exp. Joints Mesh 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


Typical Installations

Pulse Jet Baghouse Cement and Minerals Market

Severe Service Cyclone Petrochemical Market

FCC CyclonesRefinery Market

Fiber Bed Filtration Chemical Process Market

Regenerative Thermal Oxidizer Alternative Fuels Market – Ethanol

DampersPower and Utility Market


Energy Industry Solutions

Power Generation Compliance


Diversified Customer Base


Backlog by Industry 2009 - $66.5 Million


Power34%

Refining13%

Chemical6%

Automotive6%

Food6%

Mfg./Misc.5%

Other18%

Steel4%

Sheet MetalContractors

9%

Global Bookings by Industry 2009 - $142 Million


Sales Facilities Future Agents


Demand Driver: US Regulation

EPA has mandated industrial air quality standards by requiring MACT (Maximum Achievable Control Technology) for general air pollution as well as for NOx, SO2 and mercury reduction.

OSHA has established TLV (Threshold Limit Values) for more than 1,000 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.

Enforcement of these standards is expected to increase.


Demand Driver: Global Regulation

Clean Air For Europe (CAFÉ) 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 – People’s Republic of China

China has targeted 50% or greater reduction in SO2 and NOx emissions


Demand Driver: Energy

Worldwide net electrical demand is projected to double by 2030.

Projected GW

20-Year Growth

Sources: DOE’s Energy Information Agency ( EIA) and World Analysis & Forecast, McIlvaine Company


Biomass

Energy Policy Act of 2005 mandates 7.5 billion gallons of renewable fuels by 2012

Energy Independence and Security Act of 2007 expands mandate for US-grown biofuels to 36 billion gallons in 2022

Ethanol from corn capped at 15 billion gallons; rest must come from 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

Demand Driver: Energy-Alternative Fuels


Our Strategy

Grow our core businesses – both domestically and globally.

Invest in strategic bolt-on acquisitions – globally.

Continue expanding in China and India.

Pursue evolving markets such as renewable fuels, gasification, and biomass.

Reshape our business to less cyclical end markets.

Achieve operational excellence. Lean, Best and Smart.


Competitive Advantages

The leading full-service provider of air pollution control and industrial ventilation products and services

Strong brand recognition and loyalty

Long-standing customer relationships

Technology leadership

End-to-end solutions; integrated systems capability

Globally focused


Acquisition Criteria

Must fit our core business of making the environment cleaner, safer and better

Must be accretive to near-term earnings

Must expand our global footprint and/or expand our product and service offerings

Must create opportunity for operating and administrative efficiencies

Must be willing to include an earn-out provision for shared risk

Must have a proven management team


FINANCIAL INFORMATION



Revenues

Large one time project

$ in 000’s

$45,000

$190,953

$212,890

$5,000


Increasing Gross Margins

Improvement due to diversification of offerings and expanded customer base


Operating Income

$ in 000’s

* Excludes goodwill impairment charges

*


Adjusted EBITDA*

$ in 000’s

$4,598

$7,389

$15,008 $13,803

$3,771

2005 2006 2007 2008 2009

* See appendix for reconciliation to GAAP net income


Strong Cash Flow & Debt Reduction

$45,000Selected balance sheet information: 12/31/2009 12/31/2008

Total assets $ 77,500 $ 120,000

Total bank debt $ 2,700 $ 22,600

Convertible debt $ 10,800 $ 4,100

Shareholders’ equity $ 31,800 $ 44,500

Cash flow information – 12 months ended:

Operating cash flow

Debt repayment (borrowings)

12/31/2009

$ 14,900

$ 13,600

12/31/2008

$ 5,100

$(21,200)

$ in 000’s


Q-1 2010 Results - in 000’s


Reconciliation

ADJUSTED OPERATING INCOME TO GAAP OPERATING INCOME

2005 2006 2007 2008 2009

Operating income as reported $3,525 $6,047 $12,634 $9,164 $(15,830)

Non cash goodwill impairment 17,110

$3,525 $6,047 $12,634 $9,164 $1,280

ADJUSTED EBITDA TO GAAP NET INCOME

Net Income $(435) $3,094 $6,305 $5,010 $(15,032)

Interest expense 2,413 1,997 1,978 1,479 1,321

Depreciation 1,167 1,139 1,232 1,605 1,760

Amortization - 90 391 1,551 759

Warrant (income) expense 806 (842) - - -

Non cash stock compensation - 143 741 1,189 997

Non cash goodwill impairment - - - - 17,110

Loss from continuing operations - - - - -

Income tax expense (benefit) 647 1,768 4,361 2,969 (3,144)

$4,598 $7,389 $15,008 $13,803 $3,771


Our Vision

To become a world-class company that produces exceptional value for our customers, shareholders, employees and communities by delivering:

Significant GrowthImplementing profitable ways to grow globally with premier solutions.

Product and Service ExcellenceCreating customer successes and building customer loyalty.

Operational ExcellenceRunning smart, lean, best-in-class processes.

Employee DevelopmentInvesting in the training and development of our employees.

Global Market CoverageProviding worldwide sales and manufacturing resources.

Safety LeadershipEnsuring employee safety with world-class safety practices.



Jeff Lang – Chief Executive Officer

Phone: 513-458-2600

Email: [email protected]

Dennis Blazer – Chief Financial Officer

Phone: 513-458-2676

Email: [email protected]

Contact Information:


Thank You!


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