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What changed in CECO ENVIRONMENTAL CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CECO ENVIRONMENTAL CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+260 added−221 removedSource: 10-K (2026-03-02) vs 10-K (2025-02-25)

Top changes in CECO ENVIRONMENTAL CORP's 2025 10-K

260 paragraphs added · 221 removed · 174 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

51 edited+8 added−11 removed62 unchanged
Biggest changeWe believe demand for our products and services will continue to be driven by the following factors: • Global Focus on the Environment: Increased demand for efficient solutions and reduced air and water emissions remains at the forefront of sustainable production.
Biggest changeOur sectors include industrial wastewater treatment, industrial ventilation systems and contamination controls and filtration, semiconductor fabrication, electronics manufacturing, baseload and backup power generation, hydrocarbon processing, chemical processing, natural gas processing and transport, automobile production, polysilicon production, battery recycling, metals processing and production, produced water treatment, electric vehicle and battery production, desalination water transport, ultra-high purity water treatment for electrolysis and electronics production, naval/marine vessel oily water treatment, aluminum beverage can production, lightweight, high-strength metals production, and datacenter acoustics management. 3 We believe demand for our products and services will continue to be driven by the following factors: • Global focus on the environment: Increased demand for efficient solutions and reduced air and water emissions remains at the forefront of sustainable production.
Our solutions improve air and water quality, optimize emissions management, and increase the energy and process efficiency for highly engineered applications in power generation, midstream and downstream hydrocarbon processing and transport, chemical processing, electric vehicle production, polysilicon fabrication, semiconductor and electronics production, battery production and recycling, specialty metals, aluminum and steel production, beverage can manufacturing, and industrial and produced water and wastewater treatment, and a wide range of other industrial end markets.
Our solutions improve air and water quality, optimize emissions management, and increase the energy and process efficiency for highly engineered applications in power generation, midstream and downstream hydrocarbon processing and transport, chemical processing, electric vehicle production, polysilicon fabrication, semiconductor and electronics production, battery production and recycling, specialty metals, aluminum and steel production, beverage can manufacturing, industrial and produced water and wastewater treatment, and a wide range of other industrial end markets.
We expect that more rigorous regulations being introduced to protect the workforce, the environment, and the operating equipment will favorably impact demand for our products and solutions. • Developed Market Industrial Re-shoring: The industries in which we operate have historically embraced a global supply chain which has provided certain advantages by offshoring select production and services.
We expect that more rigorous regulations being introduced to protect the workforce, environment, and operating equipment will favorably impact demand for our products and solutions. • Developed market industrial re-shoring: The industries in which we operate have historically embraced a global supply chain which has provided certain advantages by offshoring select production and services.
Today many companies are relocating their global supply chains to resume in-region. We believe the re-shoring of manufacturing operations is a driver of business growth. • Expansion and Renewal of Infrastructure: There is a growing trend to better manage and reduce air and water emissions which our products and solutions equipment will serve.
Today many companies are relocating their global supply chains to resume in-region. We believe the re-shoring of manufacturing operations is a driver of our business growth. • Expansion and renewal of infrastructure: There is a growing trend to better manage and reduce air and water emissions, which our products and solutions equipment will serve.
Competition in the markets we serve is based on a number of considerations, including past performance, track record, customer approvals, lead times, technology, applications experience, know-how, reputation, product warranties, service and price, as well as being on the customer’s vendor approved list. Demand for our product can vary period over period depending on conditions in the markets we serve.
Competition in the markets we serve is based on a number of considerations, including past performance, track record, customer approvals, lead times, technology, applications experience, know-how, reputation, product warranties, service, and price, as well as our being on the customer’s approved vendor list. Demand for our product can vary period over period depending on conditions in the markets we serve.
Gleason most recently served, from April 2015 to July 2020, as President and Chief Executive Officer of Scientific Analytics Inc., a predictive analytic technologies and services company. Prior to that position, Mr. Gleason served from June 2007 to March 2015 in a number of senior officer and executive positions for Pentair plc, a water treatment company.
Gleason most recently, from April 2015 to July 2020, served as President and Chief Executive Officer of Scientific Analytics Inc., a predictive analytic technologies and services company. Prior to that position, Mr. Gleason served from June 2007 to March 2015 in a number of senior officer and executive positions for Pentair plc, a water treatment company.
These new and expanded facilities must comply with stricter 4 environmental regulations, wastewater discharge, and emission controls requirements, and the adaptation of production processes will require new or modified catalyst recovery and regeneration systems which we provide. These factors, individually or collectively, tend to drive increases in industrial capital spending that are not directly impacted by general economic conditions.
These new and expanded facilities must comply with stricter environmental regulations, wastewater discharge, and emission controls requirements, and the adaptation of production processes will require new or modified catalyst recovery and regeneration systems, which we provide. These factors, individually or collectively, tend to drive increases in industrial capital spending that are not directly impacted by general economic conditions.
We offer our customers a complete end-to-end solution, including engineering and project management services, procurement and fabrication, construction and installation, aftermarket support, and sale of consumables, which allows our customers to avoid dealing with multiple vendors when managing projects. 5 Long-standing experience and customer relationships in growing industry We have serviced the needs of our target markets for over 50 years.
We offer our customers a complete end-to-end solution, including engineering and project management services, procurement and fabrication, construction and installation, aftermarket support, and sale of consumables, which allows our customers to avoid dealing with multiple vendors when managing projects. Long-standing experience and customer relationships in growing industry We have serviced the needs of our target markets for over 50 years.
The pipeline and storage infrastructure required to supply these new users creates increased interest in our products and services. • Hydrocarbon Processing: Hydrocarbon processing involves the production, refining, and processing of hydrocarbons and organic chemicals (petrochemicals) for use in a variety of downstream applications, such as gasoline, aviation fuel, fertilizers, lubricants, polymers, plastics, paints and coatings, and additives that keep industry and our economies operating.
The pipeline and storage infrastructure required to supply these new users creates increased interest in our products and services. 4 • Hydrocarbon processing: Hydrocarbon processing involves the production, refining, and processing of hydrocarbons and organic chemicals (petrochemicals) for use in a variety of downstream applications, such as gasoline, aviation fuel, fertilizers, lubricants, polymers, plastics, paints and coatings, and additives that keep industry and our economies operating.
We conduct an annual code of conduct training that includes, but is not limited to, the following subject matter areas: anti-corruption, discrimination, harassment, data privacy, appropriate use of company assets, protecting confidential information and how to report code violations. Each employee takes this annual training and follow up communications are conducted to ensure completion of the course by all employees.
We administer an annual code of conduct training that includes, but is not limited to, the following subject matter areas: anti-corruption, anti-discrimination, anti-harassment, data privacy, appropriate use of company assets, protecting confidential information, and how to report code violations. Each employee takes this annual training and follow up communications are conducted to ensure completion of the course by all employees.
Competitive Strengths Leading market position as a complete solution provider We believe we are a leading provider of critical solutions in industrial air quality, industrial water treatment, and energy transition solutions. The multi-billion dollar global market is highly fragmented with numerous small and regional contracting firms separately supplying engineering services, fabrication, installation, testing and monitoring, products and spare parts.
Competitive Strengths Leading market position as a complete solution provider 5 We believe we are a leading provider of critical solutions in industrial air quality, industrial water treatment, and energy transition solutions. The multi-billion-dollar global market is highly fragmented with numerous small and regional contracting firms separately supplying engineering services, fabrication, installation, testing and monitoring, products and spare parts.
Products and Services We provide a wide range of engineered and configured products and solutions including dampers and diverters, expansion joints, selective catalytic reduction systems, severe-service and industrial cyclones, dust collectors, thermal oxidizers, filtration systems, wet and dry scrubbers, separators and coalescers, water treatment packages, metallic and non-metallic pumps, industrial silencers and fluid handling equipment, and plant engineering services and engineered design build fabrication.
Products and Services We provide a wide range of engineered and configured products and solutions including dampers and diverters, expansion joints, selective catalytic reduction systems, severe-service and industrial cyclones, dust collectors, thermal oxidizers, filtration systems, wet and dry scrubbers, separators and coalescers, water treatment packages, metallic and non-metallic pumps, industrial silencers, and 6 fluid handling equipment, and plant engineering services and engineered design build fabrication.
We believe our product performance and quality, reliability, durability, on-time delivery, and safety supported by advanced engineering and operational excellence differentiate us from many of our competitors, including those competitors who often offer products at a lower price. Due to the size and shipping weight of many of our projects, localized manufacturing/fabrication capabilities are very important to our customers.
We believe our product performance and quality, reliability, durability, on-time delivery, and safety supported by advanced engineering and operational excellence differentiate us from many of our competitors, including those competitors who often offer products at a lower price. Due to the size and shipping weight of many of our projects, localized manufacturing/fabrication capabilities are important to our customers.
We start by understanding our customers’ needs, then by focusing our new product 6 development efforts on those criteria that help protect our shared environment while improving a variety of operational outcomes including, but not limited to, facility uptime, production quality, employee safety, equipment protection and process performance.
We start by understanding our customers’ needs, then by focusing our new product development efforts on those criteria that help protect our shared environment while improving a variety of operational outcomes including, but not limited to, facility uptime, production quality, employee safety, equipment protection, and process performance.
We believe that the breadth and diversity of our products and services and our ability to deliver full solutions to various end markets provides us with multiple sources of stable growth, relative scale benefits, and a competitive advantage relative to other players in the industry, and we will continue to reinforce this advantage.
We believe that the breadth and diversity of our products and services together with our ability to deliver full solutions to various end markets provides us with multiple sources of stable growth, relative scale benefits, and a competitive advantage relative to other players in the industry, and we will continue to reinforce this advantage.
As our customers and end markets navigate this changing landscape, we are making production and power generation cleaner, more efficient and flexible, and workplaces safer. Increasingly, society, along with government regulation, is calling for companies to commit to the preservation and protection of the 3 environment.
As our customers and end markets navigate this changing landscape, we are making production and power generation cleaner, more efficient, and flexible, and workplaces safer. Increasingly, society, along with government regulation, is calling for companies to commit to the preservation and protection of the environment.
Experienced management and engineering team Our business management team has substantial experience in delivering highly-engineered solutions for industrial air quality, industrial water treatment, and energy transition applications. The collective experience of our teams enables us to pursue our strategy, and to successfully execute on our strategic and growth priorities.
Experienced management and engineering team Our management team has substantial experience in delivering highly-engineered solutions for industrial air quality, industrial water treatment, and energy transition applications. The collective experience of our teams enables us to pursue our strategy, and to successfully execute on our strategic and growth priorities.
Our extensive experience and expertise in providing diversified solutions enhances our overall customer relationships, and provides us with a competitive advantage in our markets relative to other companies in the industry. We believe this is evidenced by strong relationships with many of our world-class customers.
Our extensive experience and expertise in providing diversified solutions enhances our overall customer relationships and provides us with a competitive advantage in our markets relative to other companies in the industry. We believe this is evidenced by our strong relationships with many world-class customers.
Our customer service organization and sales force provides our customers with technical assistance, use and maintenance information as well as other key information regarding their purchase. We also actively provide our customers with access to key information regarding changes and pending changes in environmental regulations as well as new product or service developments.
Our customer service organization and sales force provide our customers with technical assistance, use and maintenance information as well as other key information regarding their purchase. We also actively provide our customers with access to key information regarding changes and pending changes in environmental regulations as well as new product or service developments.
Even though considered “green” fuels, power plants using these fuels will continue to require exhaust emissions control solutions which we provide, as will the production facilities and producers of the lightweight materials, batteries, and electronics required to build and operate the new vehicles being deployed. • Expanding Natural Gas Infrastructure: The International Energy Association projects a pronounced shift in Organization for Economic Cooperation and Development countries for electricity generation away from oil and coal towards natural gas, including liquified natural gas (“LNG”), and renewables.
Even though considered “green” fuels, power plants using these fuels will continue to require exhaust emissions control solutions that we provide, as will the production facilities and producers of the lightweight materials, batteries, and electronics required to build and operate the new vehicles being deployed. • Expanding natural gas infrastructure: The International Energy Association projects a pronounced shift in Organization for Economic Cooperation and Development countries for electricity generation away from oil and coal towards natural gas, including liquified natural gas (“LNG”), and renewables.
Protecting water resources is crucial for the health and resiliency of our communities, ecosystems and our customers. We expect that more rigorous regulations are being, and will be introduced, to protect water as a natural resource.
Protecting water resources is crucial for the health and resiliency of our communities, ecosystems, and customers. We expect that more rigorous regulations are being, and will continue to be, introduced to protect water as a natural resource.
While there are not currently regulations proposed or pending that we believe will result in material capital, operating or other costs to the business at this time, such regulations could be proposed and/or passed into law in 2025 or beyond. Other regulations currently in place could be withdrawn and replaced with more stringent requirements in 2025 or beyond.
While there are not currently regulations proposed or pending that we believe will result in material capital, operating, or other costs to the business at this time, such regulations could be proposed and/or passed into law in 2026 or beyond. Other regulations currently in place could be withdrawn and replaced with more stringent requirements in 2026 or beyond.
Natural gas-fired power plants have lower initial capital requirements and are more flexible in terms of operations. The transition to hydrogen and other “green” fuels (such as HVO’s, biogas, and green ammonia) are in their infancy but will be part of the energy transition over the next decade.
Natural gas-fired power plants have lower initial capital requirements and are more flexible in terms of operations. The transition to hydrogen and other “green” fuels (such as HVOs, biogas, and green ammonia) are in their infancy but will be part of the energy transition over the next decade.
Item 1. B usiness General CECO Environmental Corp. (“CECO”, “we”, “us”, "our" or the “Company”) is a leading environmentally focused, diversified industrial company, serving the broad landscape of industrial air, industrial water and energy transition markets globally by providing innovative technology and application expertise.
Item 1. B usiness General CECO Environmental Corp. (“CECO”, “we”, “us”, “our” or the “Company”) is a leading environmentally focused, diversified industrial company, serving the broad landscape of industrial air, industrial water and energy transition markets globally by providing innovative technology and application expertise.
Although we have secured raw materials from existing and alternate suppliers and have taken other mitigating actions to mitigate supply disruptions, we cannot guarantee that we can continue to do so in the future. In this event, our business, results and financial condition could be adversely affected.
Although we have secured raw materials from existing and alternate suppliers and have taken other actions to mitigate supply disruptions, we cannot guarantee that we can continue to do so in the future. In this event, our business, results, and financial condition could be affected.
Todd Gleason (54) has served as a director and Chief Executive Officer since July 2020, and is responsible for driving the company’s strategic vision and aligning the organization for optimal value creation. Prior to joining the Company, Mr.
Todd Gleason (55) has served as a director and Chief Executive Officer since July 2020 and is responsible for driving the Company’s strategic vision and aligning the organization for optimal value creation. Prior to joining the Company, Mr.
Peter Johansson (60) has served as SVP, Chief Financial and Strategy Officer since August 2022. From April 2020 to August 2022, Mr. Johansson had been an independent strategy and business development consultant and joined CECO as a consultant in October 2021.
Peter Johansson (61) has served as SVP, Chief Financial Officer since August 2022. From April 2020 to August 2022, Mr. Johansson had been an independent strategy and business development consultant and joined CECO as a consultant in October 2021.
Acquisitions are a key part of our growth model and we constantly are seeking out value-added, accretive additions to the CECO portfolio aligned with our strategic focus in industrial air, industrial water and the energy transition.
Acquisitions are a key part of our growth model and we are continuously seeking out value-added, accretive additions to the CECO portfolio aligned with our strategic focus in industrial air, industrial water, and the energy transition.
When possible, we directly secure iron and steel sheet and plate products from steel mills, whereas other materials are purchased from a variety of steel service centers. Steel prices have traditionally been volatile, but we typically mitigate the risk of higher prices by including a “surcharge” on our standard products and 7 tracking major materials industry indices and projections.
When possible, we directly secure iron and steel sheet and plate products from steel mills, whereas other materials are purchased from a variety of steel service centers. Steel prices have traditionally been volatile, but we typically mitigate the risk of higher prices by including a surcharge on our standard products and tracking major materials industry indices and projections.
We sell and market our products and services with our own direct sales force in key regions including the United States, the Netherlands, United Kingdom, Germany, Canada, United Arab Emirates, India, China, Korea, and Singapore.
We sell and market our products and services with our own direct sales force in key regions including the United States, Netherlands, United Kingdom, Germany, Canada, United Arab Emirates, India, China, Republic of Korea, and Singapore.
Diversified equipment and solution portfolio and broad customer base The global diversity of our offering and footprint and customer base provides us with multiple growth opportunities. We have a diversified customer base across a range of industries.
Diversified equipment and solution portfolio and broad customer base The global diversity of our offerings, footprint, and customer base provides us with multiple growth opportunities. We have a diversified customer base across a range of industries.
Customers We are not dependent upon any single customer, and no customer contributed 10% or more of our consolidated revenues for the years ended December 31, 2024, 2023, or 2022. Suppliers and Subcontractors We purchase our raw materials and supplies from a variety of global sources.
Customers We are not dependent upon any single customer, and no customer contributed 10% or more of our consolidated revenues for the years ended December 31, 2025, 2024, or 2023. 7 Suppliers and Subcontractors We purchase our raw materials and supplies from a variety of global sources.
Gleason holds a Masters of Science degrees in Management and Public Policy from Carnegie Mellon University and a Bachelors of Arts in International Studies and History from Wesleyan University. Mr.
Gleason holds Master of Science degrees in Management and Public Policy from Carnegie Mellon University and a Bachelors of Arts in International Studies and History from Wesleyan University. Mr.
Our platform leaders have significant industry experience and are supported by an experienced and talented management team who is dedicated to maintaining 9 and expanding our position as a global leader in our markets. For discussion of the risks related to attracting and retention of management and executive employees, refer to “Part I, Item 1A.
Our business leaders have significant industry experience and are supported by an experienced and talented management team that is dedicated to maintaining and expanding our position as a global leader in our markets. For discussion of the risks related to attracting and retention of management and executive employees, refer to “Part I, Item 1A.
In addition to lagging indicators, such as injury performance, the scorecards highlight leading indicators such as safety observations and near-misses, as well as other proactive actions taken at each site to ensure worker safety. For the year ended December 31, 2024, CECO’s domestic Total Recordable Incident Rate (“TRIR”) was 1.2% as compared to our benchmark industry average TRIR of 4.3%.
In addition to lagging indicators, such as injury performance, the scorecards highlight leading indicators such as safety observations and near-misses, as well as other proactive actions taken at each site to ensure worker safety. For the year ended December 31, 2025, CECO’s domestic Total Recordable Incident Rate (“TRIR”) was 1.98% as compared to our benchmark industry average TRIR of 2.68%.
Once systems have been installed and a relationship has been established with the customer, we are often awarded repetitive service and maintenance business as the customers’ processes change and modifications or additions to their systems become necessary.
Once systems have been installed and a relationship has been established with the customer, we are often awarded repetitive service and maintenance business as the customer's processes change and modifications or additions to its systems become necessary.
Our website also provides our customers with online tools and technical resources. Quality Assurance In engineered systems, quality is defined as system performance. We review with our customers, before the contract is signed, the technical specification and the efficiency of the equipment that will be customized to meet their specific needs.
Our website also provides our customers with online tools and technical resources. Quality Assurance For our offerings, quality is defined as system performance. We review with our customers, before the contract is signed, the technical specification and the efficiency of the equipment that will be customized to meet their specific needs.
CECO has approximately 1,600 employees, across 10 countries. Of our United States employees, 190 are unionized in our Pennsylvania, Tennessee, North Carolina and Ohio facilities. Outside the United States, we enter into employment contracts and/or agreements in those countries where such relationships are mandatory or customary.
CECO has approximately 1,540 employees across 10 countries. Of our United States employees, approximately 140 are unionized in our Tennessee, North Carolina, and Ohio facilities. Outside the United States, we enter into employment contracts and/or agreements in those countries where such relationships are mandatory or customary.
Risk Factors” of this Annual Report on Form 10-K. Executive Officers of CECO The following are the executive officers of the Company as of February 13, 2025. All officers serve for a one year term and until their successors are elected and qualified.
Risk Factors” of this Annual Report on Form 10-K. Executive Officers of CECO The following are the executive officers of the Company as of February 18, 2026. All officers serve for a one-year term or until their successors are elected and qualified.
With an installed base of operating systems and equipment in excess of $10 billion, we are targeting to grow a higher share of recurring revenue from aftermarket products and installed base value-added services, which we believe will provide a greater customer retention and loyalty, and increased business resiliency.
With an installed base of operating systems and equipment in excess of $10 billion, we are targeting to grow a higher share of recurring revenue from aftermarket products and installed base value-added services, which we believe will provide greater customer retention and loyalty, and increased business resiliency. Agreement and Plan of Merger with Thermon Group Holdings, Inc.
Our team includes approximately 400 engineers, designers, solution experts, and project managers whose industry experience and technical expertise enables them to have a deep understanding of the solutions that will best suit the needs of our customers.
Our team includes approximately 520 engineers, designers, solution experts, and project managers whose industry experience and technical expertise enable them to have a deep understanding of the solutions that will best suit our customers' needs.
We believe that the additional competitive factors in our markets include: • performance track record and reputation; • comprehensive portfolio of solutions; • brand recognition; • high design standard; • quality customer service and support; and • financial and operational stability.
We believe that the additional competitive factors in our markets include: • performance track record and reputation; • comprehensive portfolio of solutions; • brand recognition; • high design standard; • quality customer service and support; and • financial and operational stability. 8 We believe we compete favorably with respect to these factors.
We believe we compete favorably with respect to these factors. 8 Government Regulations We believe our operations are in compliance with applicable environmental laws and regulations. We believe that changes in environmental laws and regulations create opportunity given the nature of our business. Our business is subject to numerous evolving laws and regulations.
Government Regulations We believe our operations are in compliance with applicable environmental laws and regulations. We believe that changes in environmental laws and regulations create opportunities given the nature of our business. Our business is subject to numerous evolving laws and regulations.
Backlog Backlog (i.e., unfulfilled or remaining performance obligations) represents the sales we expect to recognize for our products and services for which control has not yet transferred to the customer. Backlog was $540.9 million as of December 31, 2024 as compared to $370.9 million as of December 31, 2023, an increase of $170.0 million or 45.8%.
Backlog Backlog (i.e., unfulfilled or remaining performance obligations) represents the sales we expect to recognize for our products and services for which control has not yet transferred to the customer. Backlog was $793.1 million as of December 31, 2025, as compared to $540.9 million as of December 31, 2024, an increase of $252.2 million or 46.6 percent.
On contract work, we try to mitigate the risk of higher prices by including the current price in our estimate and generally include price inflation clauses for protection. We are prepared to quantify the impact of tariff policy changes on the purchase of raw materials and supplies, as they become available.
On contract work, we try to mitigate the risk of higher prices by including the current price in our estimate and generally include price inflation clauses for protection. We continue to monitor developments in tariff policy and evaluate the potential impact on the purchase of raw materials and supplies as additional information becomes available.
We also timely completed our mandated sexual harassment training courses both domestically and internationally with the impacted employees. We believe our management team has the experience necessary to effectively execute our strategy.
We also monitor timely completion of our mandated sexual anti-harassment and workplace violence prevention training courses both domestically and internationally for impacted employees. 9 We believe our management team has the experience necessary to effectively execute our strategy.
Subcontractors are generally paid when we are paid by our customers according to the terms of our contract with the customer. Our business model focuses on effective management of subcontractors and flow of raw and finished materials, which allows us to optimize working capital levels through reduction in certain assets and reduce capital expenditures.
Our business model focuses on effective management of subcontractors and flow of raw and finished materials, which allows us to optimize working capital levels through reduction in certain assets and reduce capital expenditures.
Johansson earned a Bachelor of Science degree in Mechanical Engineering from Southern Methodist University of Dallas, Texas. He received his Master of Science degree in Mechanical Engineering from California State University at Fullerton, and his MBA from UCLA’s Anderson Graduate School of Management.
Johansson earned a Bachelor of Science degree in Mechanical Engineering from Southern Methodist University of Dallas, Texas. He received his Master of Science degree in Mechanical Engineering from California State University at Fullerton, and his MBA from UCLA’s Anderson Graduate School of Management. Alyson Gregory Richter (47) has served as General Counsel and Corporate Secretary since January 2026. Ms.
Typically, on turnkey projects, we subcontract manufacturing, electrical work, concrete work, controls, conveyors and insulation. We use subcontractors with whom we have good working relationships and review each project at the beginning and on an ongoing basis to help ensure that all work is being done according to our specifications.
We use subcontractors with whom we have good working relationships and review each project at the beginning and on an ongoing basis to help ensure that all work is being done according to our specifications. Subcontractors are generally paid when we are paid by our customers according to the terms of our contract with the customer.
Available Information We use the Investor Relations section of our website, www.cecoenviro.com , as a channel for routine distribution of important information, including news releases, investor presentations and financial information.
Richter received her Bachelor of Arts degree in Spanish from The University of Texas at Austin, and Juris Doctorate from The University of Texas School of Law. Available Information We use the Investor Relations section of our website, www.cecoenviro.com , as a channel for routine distribution of important information, including news releases, investor presentations, and financial information.
While we believe we have a good relationship with our suppliers and subcontractors, we are currently experiencing shortages of raw materials and inflationary pressures for certain materials and labor. We expect these supply chain challenges and cost impacts to continue for the foreseeable future as markets continue to recover and supply chains further normalize.
While we believe we have good relationships with our suppliers and subcontractors, we could experience shortages of raw materials and additional inflationary pressures for certain materials and labor.
Removed
In 2024 and the first quarter of 2025, we disclosed multiple transactions that strategically align with the Company’s portfolio management strategy and vision. These transactions include the acquisition of Profire Energy ("Profire") and the intended divestiture of the Company’s Fluid Handling business.
Added
On February 23, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Longhorn Merger Sub, Inc. and Longhorn Merger Sub LLC, each a direct wholly owned subsidiary of the Company (together, the “Merger Subs”), and Thermon Group Holdings, Inc. (“Thermon”), pursuant to which CECO will acquire Thermon in a cash and stock transaction.
Removed
Profire, a former publicly traded company on the NASDAQ under ticker symbol PFIE, is a leading North American supplier of mission-critical combustion automation and control solution services. Their core offering supports emissions reduction, safety objectives, and industry regulations.
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The acquisition will be effected pursuant to a two-step merger transaction as contemplated by the Merger Agreement (the “Merger”).
Removed
Profire has a large install base across oil & gas, petrochemical, and natural gas markets, with growing exposure to other energy transition markets. The business is headquartered in Lindon, Utah, with a research and development center in Edmonton-Alberta, Canada. The business has a long-tenured and experienced leadership team and had 2024 revenues of $63 million with accretive EBITDA margins.
Added
The consummation of the Merger is subject to the satisfaction or waiver of customary closing conditions, including, among others, approval by the Company’s stockholders and Thermon’s stockholders, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the effectiveness of a registration statement on Form S-4 to be filed by the Company, and other customary regulatory approvals and conditions.
Removed
Fluid Handling is a well-positioned business with strong brands in the pumps and filters space. However, we are focused on businesses that more closely align with our strategic investments and leadership positions in the air, water and energy transition spaces.
Added
We expect to fund any cash portion of the Merger Consideration and related transaction costs with available cash and borrowings under our existing and/or committed credit facilities. We expect to incur significant costs in connection with the transaction, including legal, accounting, financial advisory and other expenses, and additional costs may be incurred in connection with integration planning and execution.
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Our legacy sectors include industrial wastewater treatment, industrial ventilation systems and contamination controls and filtration, semiconductor fabrication, electronics manufacturing, baseload and backup power generation, hydrocarbon processing, chemical processing, natural gas processing and transport, automobile production, polysilicon production, battery recycling, metals processing and production, and produced water treatment.
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For a description of risks related to the proposed transaction, see “Part I—Item 1A. Risk Factors—Risks Related to the Proposed Transaction with Thermon Group Holdings, Inc.” and for additional details regarding the proposed transaction, see Note 17 to the Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K.
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Emerging sectors and applications include electric vehicle and battery production, desalination water transport, ultra-high purity water treatment for electrolysis and electronics production, naval/marine vessel oily water treatment, aluminum beverage can production, lightweight, high-strength metals production and datacenter acoustics management.
Added
Tariff policy remains subject to uncertainty, and any actions taken in response will be based on our evaluation of available information at the time. We are also engaging with external trade policy advisors and assessing potential supply chain exposures. Typically, on turnkey projects, we subcontract manufacturing, electrical work, concrete work, controls, conveyors and insulation.
Removed
Tariff policy is difficult to predict, any strategy shifts made in response to tariffs will be grounded in rigorous analysis that supports long-term value potential and that can hold up to further shifts in trade policy. We are partnering with trade policy experts and continuously assessing comprehensive supply chain vulnerability.
Added
Richter has been with the Company since 2020, and has served in various roles of increasing responsibility, most recently as Associate Counsel and Director of Corporate Compliance.
Removed
Lynn Watkins-Asiyanbi (50) has served as SVP, Chief Administrative and Legal Officer, and Corporate Secretary since August 2022. Prior to that, from June 2022 to August 2022, Ms. Watkins-Asiyanbi served as Senior Vice President, General Counsel and Corporate Secretary. From June 2016 to June 2022, Ms.
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Prior to joining the Company, she served in various roles with Project Transformation North Texas and Alon USA Energy, Inc., as well as with the law firms of Taber Estes Thorne & Carr, Koons Fuller, and Vinson and Elkins. Ms.
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Watkins-Asiyanbi served in various roles of increasing responsibility within John Bean Technologies Corporation (“JBTC”), a publicly traded global food processing machinery and airport equipment company, most recently as its Deputy General Counsel (2018-2022), Chief Ethics/Compliance Officer (2020-2022), Global DEI Council Chair (2021-2022) and prior to that as Associate General Counsel at JBTC (from 2016 to 2018). Ms.
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Watkins-Asiyanbi has also served as a part of the W.W. Grainger, U.S. Foods, Mars, Inc. and General Mills, Inc. legal teams during her career, in addition to her significant legal experience at DLA Piper and Baker and McKenzie, both global law firms. Ms.
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Watkins-Asiyanbi holds a joint Juris Doctor and Master of Business Administration from Northwestern University’s Pritzker School of Law and the Kellogg School of Management and a Bachelor’s degree in Chemical Engineering and Economics from the University of Wisconsin-Madison.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeImplementing our business strategy requires specialized engineering and other talent, as our revenues are highly dependent on technological and product innovations. The market for employees in our industry is extremely competitive, and competition for talent, particularly engineering talent, increasingly attempt to hire, and to varying degrees have been successful in hiring, our employees.
Biggest changeOur future success depends upon the continued service of our executive officers and other key business leaders and technical personnel, and on our ability to continue to identify, attract, retain and motivate them. Implementing our business strategy requires specialized engineering and other talent, as our revenues are highly dependent on technological and product innovations.
In response to an increased reliance on our information technology systems, we have taken proactive measures to strengthen our information technology systems, including completion of a National Institute of Standards and Technology ("NIST") assessment, upgraded security patches across all servers, development of best-in-class hack protection service, implementation of recurring company-wide security training and enablement of advanced security for our major information systems.
In response to an increased reliance on our information technology systems, we have taken proactive measures to strengthen our information technology systems, including completion of a National Institute of Standards and Technology assessment, upgraded security patches across all servers, development of best-in-class hack protection service, implementation of recurring company-wide security training and enablement of advanced security for our major information systems.
Variation of actual results from these assumptions, which are outside the control of management and can differ from our historical experience, could be material. To the extent that these adjustments result in an increase, a reduction or the elimination of previously reported contract revenue, we would recognize a credit or a charge against current earnings, which could be material.
Variation of actual results from these 11 assumptions, which are outside the control of management and can differ from our historical experience, could be material. To the extent that these adjustments result in an increase, a reduction or the elimination of previously reported contract revenue, we would recognize a credit or a charge against current earnings, which could be material.
A failure to adequately meet stakeholder expectations may result in noncompliance, the loss of business, reputational impacts, diluted market valuation, an inability to attract customers and an inability to attract and retain top talent. In addition, our adoption of certain standards or mandated compliance to certain requirements could necessitate additional investments that could impact our profitability.
A failure to adequately meet stakeholder expectations may result in noncompliance, the loss of business, reputational impacts, diluted market valuation, an inability to attract customers, and an inability 16 to attract and retain top talent. In addition, our adoption of certain standards or mandated compliance to certain requirements could necessitate additional investments that could impact our profitability.
We may not be able to refinance our existing or future debt, sell assets, borrow more money or raise equity on terms acceptable to us, if at all. 15 Our ability to execute our growth strategies may be limited by our ability to secure and retain additional financing on terms reasonably acceptable to us or at all.
We may not be able to refinance our existing or future debt, sell assets, borrow more money or raise equity on terms acceptable to us, if at all. Our ability to execute our growth strategies may be limited by our ability to secure and retain additional financing on terms reasonably acceptable to us or at all.
Our management, including our Chief Executive Officer and Chief Financial and Strategy Officer, do not expect that our internal controls and disclosure controls can prevent all errors and all frauds. A control system, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the control system are met.
Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our internal controls and disclosure controls can prevent all errors and all frauds. A control system, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the control system are met.
Even if we are successful in defending against a claim relating to our products, claims of this nature could cause our customers to lose confidence in our products and us. Liability to customers under warranties may adversely affect our reputation, our ability to obtain future business and our results of operations.
Even if we are successful in defending against a claim relating to our products, claims of this nature could cause our customers to lose confidence in our products. Liability to customers under warranties may adversely affect our reputation, our ability to obtain future business and our results of operations.
The impact on our customers will likely vary depending on their specific attributes, including reliance on or role in carbon intensive activities. Among the impacts to us could be a drop in demand for our products and services, particularly in oil and gas industries.
The impact on our customers will likely vary depending on their specific attributes, including reliance on or role in carbon intensive activities. Among the impacts on us could be a drop in demand for our products and services, particularly in oil and gas industries.
The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can 21 be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Contract revenue and total direct cost estimates are reviewed and revised periodically as the work progresses and as change orders are approved, and adjustments are reflected in contract revenue in the period when these estimates are revised. These estimates are based 11 on management’s reasonable assumptions and our historical experience, and are only estimates.
Contract revenue and total direct cost estimates are reviewed and revised periodically as the work progresses and as change orders are approved, and adjustments are reflected in contract revenue in the period when these estimates are revised. These estimates are based on management’s reasonable assumptions and our historical experience and are only estimates.
We and our customers 16 will need to respond to new laws and regulations as well as consumer and business preferences resulting from climate change concerns. We and our customers may face cost increases, asset value reductions and operating process changes.
We and our customers will need to respond to new laws and regulations as well as consumer and business preferences resulting from climate change concerns. We and our customers may face cost increases, asset value reductions and operating process changes.
If we do not have enough money to service our existing or future debt, we may be required to refinance all or part of our existing or future debt, sell assets, borrow more money or raise equity.
If we do not have enough money to service our existing or future debt, we may be required to refinance all or part of our existing or 15 future debt, sell assets, borrow more money or raise equity.
Global climate change and related emphasis on environmental, social and governance ("ESG") matters by various stakeholders could negatively affect our business. Customer, investor and employee expectations relating to ESG have been rapidly evolving and increasing. In addition, government organizations are enhancing or advancing legal and regulatory requirements specific to ESG matters.
Global climate change and related emphasis on environmental, social and governance ("ESG") matters by various stakeholders could negatively affect our business. Customer, investor and employee expectations relating to ESG have been rapidly evolving. In addition, certain government organizations are enhancing or advancing legal and regulatory requirements specific to ESG matters.
For the year ended December 31, 2024, approximately 33% of our total revenue was derived from products or services ultimately delivered or provided to end users outside the United States. As part of our operating strategy, we intend to expand our international operations through internal growth and selected acquisitions.
For the year ended December 31, 2025, approximately 34% of our total revenue was derived from products or services ultimately delivered or provided to end users outside the United States. As part of our operating strategy, we intend to expand our international operations through internal growth and selected acquisitions.
Among others, these risks include: (i) local, economic, political and social conditions, including potential hyperinflationary conditions and political instability in certain countries; (ii) tax-related risks, including the imposition of taxes and the lack of beneficial treaties, that result in a higher effective tax rate for us; (iii) imposition of limitations on the remittance of dividends and payments by foreign subsidiaries; (iv) difficulties in enforcing agreements and collecting receivables through certain foreign local systems; (v) domestic and foreign customs, tariffs and quotas or other trade barriers; (vi) risk of nationalization of private enterprises by foreign governments; (vii) managing and obtaining support and distribution channels for overseas operations; (viii) hiring and retaining qualified management personnel for our overseas operations; and (ix) the results of new trade agreements and changes in membership to international coalitions or unions.
Among others, these risks include local, economic, political, and social conditions, including potential hyperinflationary conditions and political instability in certain countries; tax-related risks, including the imposition of taxes and the lack of beneficial treaties, that result in a higher effective tax rate for us; imposition of limitations on the remittance of dividends and payments by foreign subsidiaries; difficulties in enforcing agreements and collecting receivables through certain foreign local systems; domestic and foreign customs, tariffs, and quotas or other trade barriers; risk of nationalization of private enterprises by foreign governments; managing and obtaining support and distribution channels for overseas operations; hiring and retaining qualified management personnel for our overseas operations; and the results of new trade agreements and changes in membership to international coalitions or unions.
Currency fluctuations may reduce profits on our foreign sales or increase our costs, either of which could adversely affect our financial results. Given that approximately 33% of our 2024 revenues are outside the United States, we are subject to the impact of fluctuations in foreign currency exchange rates.
Currency fluctuations may reduce profits on our foreign sales or increase our costs, either of which could adversely affect our financial results. Given that approximately 34% of our 2025 revenues are outside the United States, we are subject to the impact of fluctuations in foreign currency exchange rates.
We continue to devote substantial time and resources to the documentation and testing of our controls, and to plan for and the implementation of remedial efforts in those instances where remediation is indicated.
We continue to devote substantial time and resources to the documentation and testing of our controls, and to plan for and the implementation of remedial efforts in those instances where remediation is indicated. As disclosed in Item 9A.
In management’s opinion, the complaints typically have been vague, general and speculative, alleging that Met-Pro, along with the numerous other defendants, sold unidentified asbestos-containing products and engaged in other related actions that caused injuries (including death) and loss to the plaintiffs. The Company’s insurers have hired attorneys who, together with the Company, are vigorously defending these cases.
In management’s opinion, the complaints typically have been vague, general and speculative, alleging that Met-Pro, along with the numerous other defendants, sold asbestos-containing products and engaged in other related actions which caused injuries (including mesothelioma and death) and loss to the plaintiffs. Our insurers have hired attorneys who, together with us, are vigorously defending these cases.
We have $221.5 million of indebtedness as of December 31, 2024, and incurrence of additional indebtedness could adversely affect our ability to operate our business, remain in compliance with debt covenants, make payments on our debt and limit our growth.
We have $214.2 million of indebtedness as of December 31, 2025, and incurrence of additional indebtedness could adversely affect our ability to operate our business, remain in compliance with debt covenants, make payments on our debt and limit our growth.
Our inability to deliver our backlog on time could affect our future sales and profitability, and our relationships with our customers. Our backlog was $540.9 million at December 31, 2024 and $370.9 million at December 31, 2023.
Our inability to deliver our backlog on time could affect our future sales and profitability, and our relationships with our customers. Our backlog was $793.1 million at December 31, 2025, and $540.9 million at December 31, 2024.
Such provisions, including those limiting who may call special stockholders’ meetings, together with the possible issuance of our preferred stock without stockholder approval, may make it more difficult for other persons, without the approval of our Board of Directors, to make a tender offer or otherwise acquire substantial amounts of our common stock or to launch other takeover attempts that a stockholder might consider to be in such stockholder’s best interest. 20 Risks Related to Internal Control over Financial Reporting Failure to maintain adequate internal controls could adversely affect our business.
Such provisions, including those limiting who may call special stockholders’ meetings, together with the possible issuance of our preferred stock without stockholder approval, may make it more difficult for other persons, without the approval of our Board of Directors, to make a tender offer or otherwise acquire substantial amounts of our common stock or to launch other takeover attempts that a stockholder might consider to be in such stockholder’s best interest. 20 Risks Related to Internal Control over Financial Reporting We have identified material weaknesses in our internal control over financial reporting.
Long-term fluctuations in relative currency values could have an adverse effect on our operations and financial conditions. If our goodwill or indefinite lived intangibles become impaired, we may be required to recognize charges that would adversely impact our results of operations. As of December 31, 2024, goodwill and indefinite lived intangibles were $279.2 million, or 36.8%, of our total assets.
Long-term fluctuations in relative currency values could have an adverse effect on our operations and financial conditions. If our goodwill or indefinite lived intangibles become impaired, we may be required to recognize charges that would adversely impact our results of operations. As of December 31, 2025, goodwill and indefinite lived intangibles were $297.9 million, or 33.3%, of our total assets.
The stock market has experienced and may in the future experience volatility that has often been unrelated to the operating performance of particular companies. The market price of our common stock has experienced, and may continue to experience, substantial volatility. During 2024, the sales price of our common stock on the NASDAQ ranged from $18.50 to $35.16 per share.
The stock market has experienced and may in the future experience volatility that has often been unrelated to the operating performance of particular companies. The market price of our common stock has experienced, and may continue to experience, substantial volatility. During 2025, the price of our common stock on the NASDAQ ranged from $17.97 to $62.51 per share.
If we fail to maintain the adequacy of our internal controls, including remediating any material weaknesses or deficiencies in our internal controls, as such standards are modified, supplemented or amended in the future, we could be subject to regulatory actions, civil or criminal penalties or stockholder litigation.
If we are unable to remediate these material weaknesses, or if we fail to develop and maintain adequate internal controls in the future, including remediating any material weaknesses or deficiencies in our internal controls, we could be subject to regulatory actions, civil or criminal penalties or stockholder litigation.
Approximately 260 of our approximately 1,600 employees are represented by international or independent labor unions under various union contracts, which, for our covered employees in the United States, expire between November 12, 2025 and May 1, 2026. It is possible that our workforce will become more unionized in the future.
Approximately 250 of our approximately 1,540 employees are represented by international or independent labor unions under various union contracts, which, for our covered employees in the United States, are set to renegotiate collective bargaining agreements in the first half of 2026. It is possible that our workforce will become more unionized in the future.
We can give no assurances that any material weaknesses will not arise in the future due to our failure to implement and maintain adequate internal control over financial reporting. Item 1B. Unresolve d Staff Comments Not applicable.
We can give no assurances that any additional material weaknesses will not arise in the future due to our failure to implement and maintain adequate internal control over financial reporting. Risks Related to the Proposed Transaction with Thermon Group Holdings, Inc.
Risks Related to Human Capital Management The loss of key personnel or inability to attract and retain additional personnel could affect our ability to successfully grow our business. Our future success depends upon the continued service of our executive officers and other key management and technical personnel, and on our ability to continue to identify, attract, retain and motivate them.
Risks Related to Human Capital Management The loss of key personnel or inability to attract and retain additional personnel could affect our ability to successfully grow our business.
Our subsidiary, Met-Pro, along with numerous other third parties, has been named as a defendant in asbestos-related lawsuits filed against a large number of industrial companies including, in particular, those in the pump and fluid handling industries.
Our subsidiary Met-Pro Technologies LLC (“Met-Pro”), relative to its former Dean Pump division, has been named in asbestos-related lawsuits filed against a large number of industrial companies including, in particular, those in the pump and fluid handling industries.
While our fixed-price contracts are typically not individually material to our operating results, if we are unsuccessful in mitigating these risks, we may realize gross profits that are different from those originally estimated and incur reduced profitability or losses on projects.
If we are unsuccessful in mitigating these risks, we may realize gross profits that are different from those originally estimated and incur reduced profitability or losses on projects. Depending on the size of a project, these variations from estimated contract performance could have a significant effect on our operating results.
Generally, our contracts and projects vary in length, depending on the size and complexity of the project, project owner demands and other factors.
In general, turnkey contracts to be performed on a fixed-price basis involve an increased risk of significant variations. Generally, our contracts and projects vary in length, depending on the size and complexity of the project, project owner demands and other factors.
If we are unable to attract and retain qualified employees, our business may be harmed. Work stoppages or similar difficulties could significantly disrupt our operations.
The market for employees in our industry is extremely competitive, and competition for talent, particularly engineering talent, increasingly attempt to hire, and to varying degrees have been successful in hiring, our employees. If we are unable to attract and retain qualified employees, our business may be harmed. Work stoppages or similar difficulties could significantly disrupt our operations.
In the event of systems failure or interruption, including those related to force majeure, telecommunications failures, criminal acts, including hardware or software break-ins or extortion attempts, or viruses, or other cybersecurity incidents, we will have limited ability to affect the timing and success of systems restoration and any resulting interruption in our ability to manage 17 and operate our business could have a material adverse effect on our operating results.
In the event of systems failure or interruption, whether caused by natural disasters, telecommunications outages, cyberattacks, criminal acts, or other cybersecurity incidents, we may have limited ability to control the timing and effectiveness of system restoration. Any resulting disruption to our operations could materially and adversely affect our business, financial condition, and results of operations.
However, the Company has no control over the number and nature of cases that are filed against it, nor as to the financial health of its insurers or their position as to coverage. The Company also presently believes that none of the pending cases will have a material adverse impact upon the Company’s results of operations, liquidity or financial condition.
We have been dismissed from a large number of these cases, with a small number of these dismissals resulting in immaterial settlements. We also presently believe that none of the pending cases will have a material impact upon our results of operations, liquidity or financial condition.
Removed
Depending on the size of a project, these variations from estimated contract performance could have a significant effect on our operating results. In general, turnkey contracts to be performed on a fixed-price basis involve an increased risk of significant variations.
Added
While we divested of the fluid handling business (also known as the Global Pump Solutions business) in the first quarter of 2025, we retained historical asbestos liabilities and the related legacy insurance policies.
Removed
The Company believes that its insurance coverage is adequate for the cases currently pending against the Company and for the foreseeable future, assuming a continuation of the current volume, nature of cases and settlement amounts.
Added
Many cases have been dismissed after the plaintiff fails to identify or produce evidence of exposure to Met-Pro’s products. In those cases, where evidence has been produced, our experience has been that the exposure levels are low and our position has been that its products were not a cause of death, injury or loss.
Removed
Risks related to our pension plan may adversely impact our results of operations and cash flow. Significant changes in actual investment return on pension assets, discount rates and other factors may adversely affect our results of operations and pension plan contributions in future periods. GAAP requires that we calculate the income or expense of our plan using actuarial valuations.
Added
In addition to risks posed by our direct third-party suppliers, we are exposed to fourth-party cybersecurity risks, which arise from the subcontractors and service providers engaged by those suppliers. These entities often have access to critical systems or sensitive data through interconnected supply chains, creating vulnerabilities beyond our immediate control.
Removed
These valuations reflect assumptions about financial markets and interest rates. We establish the discount rate used to determine the present value of the projected and accumulated benefit obligation at the end of each year based upon the available market rates for high quality, fixed-income investments.
Added
A security breach or operational failure at a fourth-party provider could compromise our data integrity, disrupt services, or lead to regulatory non-compliance, even if our direct suppliers maintain strong security practices. Because visibility and oversight of these extended relationships are limited, the likelihood of undetected vulnerabilities increases, amplifying potential financial, operational, and reputational impacts.
Removed
An increase in the discount rate would increase future pension expense and, conversely, a decrease in the discount rate would decrease future pension expense. Funding requirements for our pension plan may become more significant.
Added
Artificial Intelligence integration by third-party suppliers could pose a risk to our systems, networks, and products. Our reliance on third-party suppliers introduces additional risks as these suppliers increasingly incorporate artificial intelligence ("AI") technologies into their products and services. While AI tools may enhance functionality and efficiency, they can also create operational complexities and unforeseen limitations.
Removed
The ultimate amounts to be contributed are dependent upon, among other things, interest rates, underlying asset returns and the impact of legislative or regulatory changes related to pension funding obligations. We may be subject to substantial withdrawal liability assessments in the future related to multiemployer pension plans to which certain of our subsidiaries make contributions pursuant to collective bargaining agreements.
Added
These changes may affect suppliers’ ability to maintain consistent service levels, ensure reliability, and deliver the expected user experience. Furthermore, AI-driven processes may introduce new cybersecurity vulnerabilities, compliance challenges, and ethical considerations that could impact our business operations.
Removed
Under applicable federal law, any employer contributing to a multiemployer pension plan that completely ceases participating in the plan while the plan is underfunded is subject to payment of such employer’s assessed share of the aggregate unfunded vested benefits of the plan.
Added
Because we have limited 17 control over how suppliers implement and manage AI technologies, any deficiencies or failures in these systems could result in service disruptions, data integrity issues, or reputational harm. Increased information technology cybersecurity threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, and products.
Removed
In certain circumstances, an employer can be assessed a withdrawal liability for a partial withdrawal from a multiemployer pension plan. If any of these adverse events were to occur in the future, it could result in a substantial withdrawal liability assessment that could have a material adverse effect on our business, financial condition, results of operations or cash flows.
Added
If we are unable to remediate these material weaknesses and maintain adequate internal controls, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business.
Removed
Additionally, our vendors may incorporate artificial intelligence tools into their offerings, which may inhibit their ability to maintain an adequate level of service and experience. Increased information technology cybersecurity threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, and products.
Added
"Controls and Procedures" in this Annual Report on Form 10-K, we have identified material weaknesses in our internal control over financial reporting related to various control deficiencies at the Verantis Environmental Solutions Group business that we acquired in December 2024, as well our assessment of completeness and accuracy of information used in the execution of controls relating to balance sheet reconciliations.
Added
The material weaknesses did not result in any misstatements to our consolidated financial statements; however, they could result in a misstatement of account balances or disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected.
Added
To address these material weaknesses, we have developed a remediation plan that includes updating control documentation, expanding education and training, and ensuring that controls are prepared and reviewed at the appropriate level of precision; hiring accounting and finance personnel with the requisite skills and expertise to perform control activities related to the financial close process and augmenting our internal resources by engaging external consultants with technical experience in accounting, financial reporting, and internal controls, until we add sufficient in-house skills to our staff; focusing on enhancing our information technology controls, specifically the assessment and integration of such controls at newly acquired entities; and developing an enhanced monitoring program to evaluate and assess whether controls are present and functioning in a timely manner and holding individuals accountable for their internal control responsibilities.
Added
As of December 31, 2025, these remediation efforts are ongoing. The actions that we are taking are subject to ongoing senior management review, as well as Audit Committee oversight.
Added
We will not be able to conclude whether the steps we are taking will fully remediate material weaknesses in our internal control over financial reporting until we have completed our remediation efforts and subsequent evaluation of their effectiveness.
Added
Until these material weaknesses are remediated, we plan to continue to perform additional analyses and other procedures to ensure that our consolidated financial statements are prepared in accordance with GAAP.
Added
The proposed transaction may not be completed on the anticipated timeline, or at all, which could adversely affect our business, financial condition, results of operations and the market price of our common stock.
Added
On February 23, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Longhorn Merger Sub, Inc. and Longhorn Merger Sub LLC, each a direct wholly owned subsidiary of the Company (together, the “Merger Subs”), and Thermon Group Holdings, Inc.
Added
(“Thermon”), pursuant to which the parties agreed to effect a two-step merger transaction contemplated thereby (the “Merger”). Although we expect to complete the Merger in 2026, there can be no assurances as to the exact timing of the closing or that the Merger will be completed at all.
Added
The consummation of the Merger is subject to the satisfaction or waiver of a number of conditions contained in the related Merger Agreement, including, among others, approval by the Company’s and Thermon’s stockholders, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the effectiveness of a registration statement on Form S-4 to be filed by the Company, approval for listing on Nasdaq of the shares of Company common stock to be issued in the transaction, and other customary regulatory approvals and conditions.
Added
Such conditions, some of which are beyond our control, may not be satisfied or waived in a timely manner or at all and therefore make the completion and timing of the Merger uncertain. In addition, the Merger Agreement contains certain termination rights for both parties, which if exercised will also result in the Merger not being consummated.
Added
Any such termination or any failure to otherwise complete the Merger could result in various consequences, including, among others: our business being adversely impacted by the failure to pursue other beneficial opportunities due to the time and resources committed by our management to the Merger, without realizing any of the benefits of completing the Merger; incurring significant legal, accounting and other expenses relating to the Merger without realizing any of its anticipated benefits; the market price of our common stock being adversely impacted to the extent that the current market price reflects a market assumption that the Merger will be completed; and negative reactions from the financial markets and customers that may occur if the anticipated benefits of the Merger are not realized.
Added
Such consequences could have a material adverse effect on our business, financial condition, or results of operations. The Merger Agreement restricts our ability to pursue alternative transactions and may require us to pay a termination fee under certain circumstances.
Added
The Merger Agreement contains customary non-solicitation provisions that limit our ability to solicit or engage in discussions regarding alternative acquisition proposals, subject to certain fiduciary exceptions. If the Merger Agreement is terminated under certain specified circumstances, including in connection with a competing acquisition proposal, we may be required to pay a termination fee to Thermon.
Added
These provisions could discourage other potential strategic transactions that may be favorable to the Company and its stockholders. Even if the Merger is completed, we may be unable to successfully integrate Thermon’s business or realize the anticipated benefits of the proposed transaction, which may have a material adverse effect on our business, financial condition or results of operations.
Added
The success of the Merger depends in part on whether we can complete the integration of the Thermon assets that we have not previously operated into our existing business in an efficient and effective manner, and there can be no assurance that we will be able to successfully integrate or otherwise realize the anticipated benefits of the Merger.
Added
The integration process may result in the disruption of ongoing business and there could be potential unknown liabilities and unforeseen expenses associated with the Merger that were not discovered in the course of performing due diligence. The integration may also require significant time and focus from management following the Merger that may disrupt our business and results of operations.
Added
Potential risks or difficulties include, among others: • complexities associated with integrating our existing systems, technologies and other workflows with new assets; • the inability to retain the services of key management and personnel; • the accuracy of our assessments of the assets acquired in the Merger; • establishing business relationships with new third party contractors and other service providers with whom we have no 22 prior experience; and • potential unknown liabilities and unforeseen expenses, delays or regulatory conditions associated with the Merger.
Added
Any of these issues could adversely affect our ability to maintain relationships with customers, suppliers, employees, and other constituencies. We may fail to realize the anticipated benefits expected from the Merger.
Added
The success of the Merger will depend, in significant part, on our ability to successfully complete the integration of the acquired assets, grow the revenue, and realize the anticipated strategic benefits from the Merger. The anticipated benefits of the Merger may not be realized fully or at all or may take longer to realize than expected.
Added
Actual operating, technological, strategic, and revenue opportunities, if achieved at all, may be less significant than expected or may take longer to achieve than anticipated. If we are not able to realize the anticipated benefits expected from the Merger within the anticipated timing or at all, our business and operating results may be adversely affected.
Added
The issuance of shares of the Company’s common stock in connection with the merger will dilute existing stockholders and may adversely affect the market price of our common stock.
Added
In connection with the Merger, we expect to issue a substantial number of shares of our common stock to the stockholders of Thermon, the actual number of which will be determined at closing based on the number of shares and equity awards of Thermon outstanding at that time and subject to proration and election procedures set forth in the Merger Agreement.
Added
The issuance of these additional shares will dilute the ownership interest of the Company’s existing stockholders and may dilute earnings per share. Any such dilution, or any delay in achieving accretion to earnings per share, could cause the market price of our common stock to decline or increase at a reduced rate.
Added
We have incurred additional costs in connection with the Merger, which will continue during 2026. We have incurred and expect to incur significant costs in connection with the Merger, including legal, accounting, financial advisory and other expenses, and we may incur additional costs in connection with integration.
Added
Although we expect that the elimination of any duplicative costs, as well as the realization of expected benefits related to the integration of the Thermon assets, should allow us to offset these transaction costs over time, this net benefit may not be achieved in the near term or at all.
Added
We also expect to fund any cash portion of the Merger Consideration and related transaction costs with available cash and borrowings under our existing credit facilities, which may increase our indebtedness and reduce financial flexibility Securities class action and derivative lawsuits may be brought against us in connection with the Merger, which could result in substantial costs.
Added
Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into acquisition, merger, or other business combination agreements. Even if such a lawsuit is without merit, defending against these claims can result in substantial costs and divert management time and resources.
Added
An adverse judgment could result in monetary damages, which could have a negative impact on our liquidity and financial condition. Item 1B. Unresolve d Staff Comments Not applicable.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn general, the Company seeks to address cybersecurity risks through a comprehensive, cross-functional approach that is focused on preserving the confidentiality, security, and availability of Company and customer systems, information, and products. 21 The Company has engaged third-party cybersecurity service providers and leverages leading technologies and expertise to monitor, maintain, and provide 24/7 managed detection and response capabilities for coordination, escalation and remediation of alerts associated with information technology systems utilized by the Company.
Biggest changeThe Company has engaged third-party cybersecurity service providers and leverages leading technologies and expertise to monitor, maintain, and provide 24/7 managed detection and response capabilities for coordination, escalation and remediation of alerts associated with information technology systems utilized by the Company.
Risk Management and Strategy The Company engages in the periodic assessment and testing of the Company’s policies, standards, processes and practices that are designed to address cybersecurity threats and incidents.
Risk Management and Strategy 23 The Company engages in the periodic assessment and testing of the Company’s policies, standards, processes and practices that are designed to address cybersecurity threats and incidents.
The Company has a team of cybersecurity professionals reporting to the VP of IT , the head of the Company’s cybersecurity team, dedicated to managing threats and incidents in real time and the reporting of any such incidents. The VP of IT reports to the Chief Financial and Strategy Officer.
The Company has a team of cybersecurity professionals reporting to the Head of IT , the head of the Company’s cybersecurity team, dedicated to managing threats and incidents in real time and the reporting of any such incidents. The Head of IT reports to the Chief Financial Officer .
Through regular and ongoing communications, the VP of IT and the Executive Leadership Team, which includes our Chief Executive Officer, Chief Financial and Strategy Officer, and Chief Administrative and Legal Officer, manage the prevention, detection, mitigation and remediation of cybersecurity threats and incidents and escalate any such threats and incidents to the Audit Committee when appropriate.
Through regular and ongoing communications, the Head of IT and the Executive Leadership Team, which includes our Chief Executive Officer, Chief Financial Officer, and General Counsel, manage the prevention, detection, mitigation and remediation of cybersecurity threats and incidents and escalate any such threats and incidents to the Audit Committee when appropriate.
On an annual basis, the Board and the Audit Committee discuss the Company’s approach to cybersecurity risk management with the Company's Vice President of Information Technology (the "VP of IT").
On an annual basis, the Board and the Audit Committee discuss the Company’s approach to cybersecurity risk management with the Company's Head of IT and Digital Strategy (the "Head of IT").
The VP of IT has served in various leadership roles in information technology and information security for over 25 years, including leading the cybersecurity programs for three public companies. The VP of IT holds undergraduate and graduate degrees in business and has attained multiple cybersecurity certifications including Certified Information Security Manager and Data Privacy.
The Head of IT has served in various leadership roles in information technology for ove r 25 years . The Head of IT holds undergraduate and graduate degrees in engineering.
Added
In general, the Company seeks to address cybersecurity risks through a comprehensive, cross-functional approach that is focused on preserving the confidentiality, security, and availability of Company and customer systems, information, and products.
Added
Additionally, the Company maintains processes to evaluate and oversee cybersecurity risks associated with the use of third-party service providers, including risk assessments conducted as part of our vendor management program.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLocation of Facilities Segment Owned Leased States Countries Engineered Systems Segment 1 16 Arizona, California, Connecticut, Florida, New York, Ohio, Texas United States, The Netherlands, Canada, India, United Arab Emirates, Singapore, United Kingdom, People's Republic of China, South Korea Industrial Process Solutions Segment 1 21 California, Indiana, Michigan, North Carolina, Ohio, Pennsylvania, Tennessee United States, United Kingdom, The Netherlands, Germany, People's Republic of China, Singapore, India Corporate — 2 Ohio, Texas United States 2 39 Item 3.
Biggest changeInformation on the number and location of principal operating facilities by segment was as follows as of December 31, 2025: Location of Facilities Segment Owned Leased States Countries Engineered Systems Segment 4 27 Arizona, California, Colorado, Connecticut, Florida, New York, Ohio, Oklahoma, Pennsylvania, Texas, Utah Canada, China, India, Netherlands, Republic of Korea, United Arab Emirates, United Kingdom, United States Industrial Process Solutions Segment — 18 California, Michigan, New York, North Carolina, Ohio, Tennessee Germany, Singapore, United Kingdom, United States Corporate — 2 Ohio, Texas United States 4 47 Item 3.
Our current capacity, with limited capital additions, is expected to be sufficient to meet production requirements for the near future. It is anticipated that most leases coming due in the near future will be 22 renewed at expiration. The property we own is subject to collateral mortgages to secure the amounts owed under the Credit Facility.
Our current capacity, with limited capital additions, is expected to be sufficient to meet production requirements for the near future. It is anticipated that most leases coming due in the near future will be renewed at expiration. The property we own is subject to collateral mortgages to secure the amounts owed under the Credit Facility.
Legal Proceedings See Note 12 to the Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K for information regarding legal proceedings in which we are involved. Item 4. Mine Saf ety Disclosures Not applicable. 23 PART II
Legal Proceedings See Note 12 to the Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K for information regarding legal proceedings in which we are involved. 24 Item 4. Mine Saf ety Disclosures Not applicable. 25 PART II
Item 2. P roperties The Company has 41 principal operating facilities across 12 states and 10 countries. The Company’s executive offices are located in Addison, Texas. We maintain our facilities in good operating condition, and we believe they are suitable and adequate for the purposes for which they are intended to conduct business.
Item 2. P roperties The Company has 51 principal operating facilities across 13 states and 10 countries. The Company’s executive offices are located in Addison, Texas. We maintain our facilities in good operating condition, and we believe they are suitable and adequate for the purposes for which they are intended to conduct business.
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Information on the number and location of principal operating facilities by segment was as follows as of December 31, 2024.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer's Purchases of Equity Securities Period (amounts in thousands, except per share data) Total Number of Shares Purchased 1 Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs October 1, 2024 - October 31, 2024 — $ — — $ 8,000 November 1, 2024 - November 30, 2024 — — — 8,000 December 1, 2024 - December 31, 2024 — — — 8,000 Total — $ — — (1) On May 10, 2022, the Board of Directors authorized a $20.0 million share repurchase program as described within Note 9 to the Consolidated Financial Statements.
Biggest changeIssuer's Purchases of Equity Securities Period (amounts in thousands, except per share data) Total Number of Shares Purchased 1 Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs October 1, 2025 - October 31, 2025 — $ — — $ — November 1, 2025 - November 30, 2025 — — — — December 1, 2025 - December 31, 2025 — — — — Total — $ — — (1) On May 10, 2022, the Board of Directors authorized a $20.0 million share repurchase program as described within Note 9 to the Consolidated Financial Statements.
Market for Registrant’s Common Equity, Related S tockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on The Nasdaq Global Select Market under the symbol “CECO.” Performance Graph The following graph sets forth the cumulative total return to CECO’s stockholders during the five years ended December 31, 2024, as well as the following indices: Russell 2000 Index, Standard and Poor’s (“S&P”) 600 Small Cap Industrial Machinery Index, and S&P 500 Index.
Market for Registrant’s Common Equity, Related S tockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on The Nasdaq Global Select Market under the symbol “CECO.” Performance Graph The following graph sets forth the cumulative total return to CECO’s stockholders during the five years ended December 31, 2025, as well as the following indices: Russell 2000 Index, Standard and Poor’s (“S&P”) 600 Small Cap Industrial Machinery Index, and S&P 500 Index.
The following graph assumes $100 was invested on December 31, 2019, including the reinvestment of dividends, in each category.
The following graph assumes $100 was invested on December 31, 2020, including the reinvestment of dividends, in each category.
Holders The approximate number of registered stockholders of record of our common stock as of February 13, 2025 was 237, although there is a larger number of beneficial owners. 24 Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table provides information about our purchases of our equity securities for the quarter ended December 31, 2024.
Holders The approximate number of registered stockholders of record of our common stock as of February 18, 2026 was 230, although there is a larger number of beneficial owners. 26 Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table provides information about our purchases of our equity securities for the quarter ended December 31, 2025.
The program expires on April 30, 2025. Recent Sales of Unregistered Securities Not applicable. Item 6. [Res erved] 25
The program expired on April 30, 2025. Recent Sales of Unregistered Securities Not applicable. Item 6. [Res erved] 27

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations Consolidated Results Our consolidated statements of income for the years ended December 31, 2024, 2023 and 2022 are as follows: Year ended December 31, (dollars in millions) 2024 2023 2022 Net sales $ 557.9 $ 544.8 $ 422.6 Cost of goods sold 361.8 373.8 294.4 Gross profit $ 196.1 $ 171.0 $ 128.2 Percent of sales 35.1 % 31.4 % 30.3 % Selling and administrative expenses $ 146.7 $ 122.9 $ 93.4 Percent of sales 26.3 % 22.6 % 22.1 % Amortization and earnout expenses 9.1 8.2 6.8 Acquisition and integration expenses 4.2 2.5 4.5 Restructuring expenses 0.5 1.3 0.1 Asbestos litigation expenses 0.2 — — Executive transition expenses — 1.5 1.2 Operating income $ 35.4 $ 34.6 $ 22.2 Percent of sales 6.3 % 6.4 % 5.3 % Other (expense) income, net $ (4.7 ) $ 0.4 $ 6.9 Interest expense (13.0 ) (13.4 ) (5.4 ) Income before income taxes $ 17.7 $ 21.5 $ 23.7 Income tax expense 3.3 7.0 5.4 Net income $ 14.4 $ 14.5 $ 18.3 Noncontrolling interest (1.5 ) (1.6 ) (0.8 ) Net income attributable to CECO Environmental Corp. $ 13.0 $ 12.9 $ 17.4 29 Non-GAAP Measures To compare operating performance between the years ended December 31, 2024, 2023 and 2022 the Company has adjusted GAAP operating income to exclude (1) amortization of intangible assets, and earnout expenses, (2) restructuring expenses primarily relating to severance, facility exits, and associated legal expenses, (3) acquisition and integration expenses, which include legal, accounting, and other expenses, (4) executive transition expenses, including severance for the Company's former executives, fees and expenses incurred in the search, for and hiring, of new executives and (5) asbestos litigation expenses related to expected future settlement payments.
Biggest changeResults of Operations Consolidated Results Our consolidated statements of income for the years ended December 31, 2025, 2024 and 2023 are as follows: Year ended December 31, (in millions) 2025 2024 2023 Net sales $ 774.4 $ 557.9 $ 544.8 Cost of goods sold 505.2 361.8 373.8 Gross profit $ 269.2 $ 196.1 $ 171.0 Percent of sales 34.8 % 35.1 % 31.4 % Selling and administrative expenses $ 200.8 $ 146.7 $ 122.9 Percent of sales 25.9 % 26.3 % 22.6 % Amortization expenses $ 16.1 $ 8.7 $ 7.4 Acquisition and integration expenses 9.5 4.2 2.5 Gain on sale of Global Pump Solutions business (63.7 ) — — Other operating expense 0.6 1.0 3.6 Operating income $ 105.9 $ 35.5 $ 34.6 Percent of sales 13.7 % 6.3 % 6.4 % Other expense (income) $ 2.1 $ 4.7 $ (0.4 ) Interest expense 20.9 13.0 13.4 Income before income taxes $ 82.9 $ 17.7 $ 21.5 Income tax expense 29.7 3.3 7.0 Net income $ 53.2 $ 14.4 $ 14.5 Noncontrolling interest 3.1 1.5 1.6 Net income attributable to CECO Environmental Corp. $ 50.1 $ 13.0 $ 12.9 31 Non-GAAP Measures To compare operating performance between the years ended December 31, 2025, 2024 and 2023 the Company has adjusted GAAP operating income to exclude (1) amortization of intangible assets, (2) acquisition and integration expenses, which include legal, accounting, and other expenses, (3) gain on the sale of the Global Pump Solutions business, and (4) other non-recurring expenses, including fair value adjustment of earn-out liabilities from the acquisitions of WK Group, restructuring expenses primarily relating to severance, facility exits, and associated legal expenses, asbestos litigation expenses relating to future settlement payments, and third party professional consulting fees associated with Enterprise Resource Planning system implementations.
Increases in global natural gas, installed miles of new pipeline, including future CO2 and hydrogen pipelines, and liquified natural gas ("LNG") demand and supply all stand to drive the need for our products. We also believe there is a growing demand to control and reduce air and water emissions from industrial facilities for which our pollution control equipment will serve.
Increases in global natural gas, installed miles of new pipeline, including future CO2 and hydrogen pipelines, and liquified natural gas demand and supply all stand to drive the need for our products. We also believe there is a growing demand to control and reduce air and water emissions from industrial facilities for which our pollution control equipment will serve.
Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carry forward periods), projected future taxable income, and tax-planning strategies in making this assessment. The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.
Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carry forward periods), projected future taxable income, and tax-planning strategies in making this 39 assessment. The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.
Our operations management team works closely with our Chief Executive Officer on global fulfillment strategies, operational excellence, resource allocation, and employee development. Within our segments we have monthly business reviews to ensure we are serving customers, achieving our operating plan, and executing on strategic growth initiatives.
Our operations management team works closely with our Chief Executive Officer on global fulfillment strategies, operational excellence, resource allocation, and employee development. 29 Within our segments, we have monthly business reviews to ensure we are serving customers, achieving our operating plan, and executing on strategic growth initiatives.
The accounting guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and 37 measurement of a tax position taken or expected to be taken in a tax return. We record the related interest expense and penalties, if any, as tax expense in the tax provision. Management must assess the realizability of the Company’s deferred tax assets.
The accounting guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We record the related interest expense and penalties, if any, as tax expense in the tax provision. Management must assess the realizability of the Company’s deferred tax assets.
In 2021, the US Congress passed the Infrastructure Investment and Jobs Act with $550 billion 26 of new federal spending aimed at rebuilding roads and bridges, climate resilience, and other environmental initiatives. Similar investments are being made in many other countries in which we do business.
In 2021, the US Congress passed the Infrastructure Investment and Jobs Act with $550 billion of new federal spending aimed at rebuilding roads and bridges, climate resilience, and other environmental initiatives. Similar investments are being made in many other countries in which we do business.
We assist customers in maintaining clean and safe operations for employees, reducing energy consumption, minimizing waste for customers, and meeting regulatory standards for toxic emissions, fumes, volatile organic compounds, and odor elimination through our platforms including duct fabrication and installation, industrial air, and fluid handling.
We assist our customers in maintaining clean and safe operations for employees, reducing energy consumption, minimizing waste for customers, and meeting regulatory standards for toxic emissions, fumes, volatile organic compounds, and odor elimination through its platforms including duct fabrication and installation, industrial air, and fluid handling.
After that, our ability to fund these expected uses of cash and to comply with the financial covenants under our debt agreements will depend on the results of future operations, 35 performance and cash flow.
After that, our ability to fund these expected uses of cash and to comply with the financial covenants under our debt agreements will depend on the results of future operations, performance and cash flow.
If this qualitative assessment indicates a more likely than not potential that the asset may be impaired, the estimated fair value is calculated using a weighting of the income method and the market method. If the estimated fair value of a reporting unit is less than its carrying value, an impairment charge is recorded.
If this qualitative assessment indicates a more likely than not potential that the asset may be impaired, the estimated fair value is determined using a weighting of the income method and the market method. If the estimated fair value of a reporting unit is less than its carrying value, an impairment charge is recorded.
Overview Business Overview CECO is a leading environmentally focused, diversified industrial company, serving the broad landscape of industrial air, industrial water and energy transition markets globally by providing innovative technology and application expertise. We help companies grow their business with safe, clean, and more efficient solutions that help protect people, the environment and industrial equipment.
Overview Business Overview CECO is an environmentally focused, diversified industrial company, serving the broad landscape of industrial air, industrial water and energy transition markets globally by providing innovative technology and application expertise. We help companies grow their business with safe, clean, and more efficient solutions that help protect people, the environment and industrial equipment.
We supply product offerings throughout the entire natural gas value chain and believe expansion will drive growth within our Engineered Systems segment for our gas separation & filtration, pressure products, acoustical equipment , water treatment solutions and DeNOx SCR systems for natural-gas-fired power plants.
We supply product offerings throughout the entire natural gas value chain and believe expansion will drive growth within our Engineered Systems segment for our gas separation & filtration, pressure products, acoustical equipment , water treatment solutions and DeNOx selective catalytic reduction ("SCR") systems for natural-gas-fired power plants.
During 2024, 2023, and 2022, our annual impairment test indicated no impairment of goodwill. Accordingly, we recognized no impairment charges in our financial results for the years ended December 31, 2024, 2023, and 2022. For additional information on impairment testing results, see Note 6 to the Consolidated Financial Statements.
During 2025, 2024, and 2023, our annual impairment assessment indicated no impairment of goodwill. Accordingly, we recognized no impairment charges in our financial results for the years ended December 31, 2025, 2024, and 2023. For additional information on impairment testing results, see Note 6 to the Consolidated Financial Statements.
Income Taxes Income taxes are determined using the asset and liability method of accounting for income taxes in accordance with Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes”. Income tax expense includes federal, state and foreign income taxes.
Income Taxes Income taxes are determined using the asset and liability method of accounting for income taxes in accordance with Financial Accounting Standards Board, Accounting Standards Codification Topic 740, “Income Taxes.” Income tax expense includes federal, state and foreign income taxes.
As material cost inflation occurs, the Company seeks to pass this cost onto our customers as price increases. Selling and administrative expense principally includes sales and engineering payroll and related fringes, advertising and marketing expenditures as well as all corporate and administrative functions and other costs that support our operations.
As material cost inflation occurs, we seek to pass this cost onto our customers as price increases. Selling and administrative expense principally includes sales and engineering payroll and related fringes, advertising and marketing expenditures as well as all corporate and administrative functions and other costs that support our operations.
Our investment in net working capital is funded by cash flow from operations and by our revolving line of credit. At December 31, 2024, the Company had working capital of $86.3 million, compared with $78.3 million at December 31, 2023.
Our investment in net working capital is funded by cash flow from operations and by our revolving line of credit. At December 31, 2025, the Company had working capital of $104.4 million, compared with $86.3 million at December 31, 2024.
(2) Includes notes payable and expected earnout liability. Critical Accounting Estimates Our consolidated financial statements are prepared in conformity with GAAP. Preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates, judgments and assumptions affecting the reported amounts of assets, liabilities, revenues and expenses and related contingent liabilities.
Critical Accounting Estimates Our consolidated financial statements are prepared in conformity with GAAP. Preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates, judgments and assumptions affecting the reported amounts of assets, liabilities, revenues and expenses and related contingent liabilities.
The ratio of current assets to current liabilities was 1.35 to 1.00 at December 31, 2024 as compared with a ratio of 1.39 to 1.00 at December 31, 2023. At December 31, 2024 and 2023, cash and cash equivalents totaled $37.8 million and $54.8 million, respectively.
The ratio of current assets to current liabilities was 1.34 to 1.00 at December 31, 2025 as compared with a ratio of 1.35 to 1.00 at December 31, 2024. At December 31, 2025 and 2024, cash and cash equivalents totaled $33.1 million and $37.8 million, respectively.
Inventory quantities are regularly reviewed and provisions for excess or obsolete inventory are recorded primarily based on our forecast of future demand and market conditions. Significant unanticipated changes to our forecasts could require a change in the provision for excess or obsolete inventory.
Cost is determined on a first-in, first-out or average cost basis. Inventory quantities are regularly reviewed and provisions for excess or obsolete inventory are recorded primarily based on 38 our forecast of future demand and market conditions. Significant unanticipated changes to forecasts could require a change in the provision for excess or obsolete inventory.
We continue to focus on increasing revenues and profitability in developing markets, where environmental awareness and associated regulatory standards are increasing, while continuing to strengthen and expand our product offerings and channels in our domestic market of the United States. Our enterprise strategy consists of a combined operational strategy and capital allocation strategy.
We continue to focus on increasing revenues and profitability in developing markets, where environmental awareness and associated regulatory standards are increasing, while continuing to strengthen and expand our product offerings and channels in our domestic market of the United States.
Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. No provision for estimated losses on uncompleted contracts was needed at December 31, 2024, 2023 and 2022. 36 Inventories The Company’s inventories are valued at the lower of cost or net realizable value using the first-in, first-out inventory costing method.
Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. No provision for estimated losses on uncompleted contracts was needed at December 31, 2025, 2024 and 2023. Inventories The Company’s inventories are valued at the lower of cost or net realizable value.
Comparison of the years ended December 31, 2023 and 2022 See the Management Discussion and Analysis section of our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of business segment results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Comparison of the years ended December 31, 2024 and 2023 See the Management Discussion and Analysis section of our Annual Report on Form 10-K for the year ended December 31, 2024 for a discussion of business segment results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, which information is incorporated by reference herein.
As a part of the annual assessment, we first qualitatively assess whether current events or changes in circumstances lead to a determination that it is more likely than not (defined as a likelihood of more than 50 percent) that the fair value of an asset is less than its carrying amount.
As a part of the annual assessment, we first qualitatively assesses whether current events or changes in circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
Comparison of the years ended December 31, 2023 and 2022 See the Management Discussion and Analysis section of our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of our consolidated results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Comparison of the years ended December 31, 2024 and 2023 See the Management Discussion and Analysis section of our Annual Report on Form 10-K for the year ended December 31, 2024 for a discussion of our consolidated results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, which information is incorporated by reference herein.
In this event, our business, results and financial condition could be adversely affected. Operations Overview Our segments consist of like end-market and end-market adjacent platforms. Our platforms are structured to win in their target markets with a core focus on understanding customer needs and providing best-in-class solutions.
Operations Overview Our segments consist of like end-market and end-market adjacent platforms. Our platforms are structured to win in their target markets with a core focus on understanding customer needs and providing best-in-class solutions.
In particular, we are currently experiencing shortages of raw materials and inflationary pressures for certain materials and labor. We have secured raw materials from existing and alternate suppliers and have taken other mitigating actions to mitigate supply disruptions; however, we cannot guarantee that we can continue to do so in the future.
We could experience shortages of raw materials and additional inflationary pressures for certain materials and labor. We have secured raw materials from existing and alternate suppliers and have taken other mitigating actions to mitigate supply disruptions; however, we cannot guarantee that we will be able to continue to do so in the future.
We believe that cash flows from operating activities, together with our existing cash and borrowings available under our Credit Facility, will be sufficient for at least the next twelve months to fund our current anticipated uses of cash.
We believe that cash flows from operating activities, together with our existing cash and borrowings available under our Credit Facility, will be sufficient for at least the next twelve months to fund our current anticipated uses of cash, inclusive of the cash portion of the Merger Consideration and transaction fees incurred as part of the Thermon proposed transaction.
Cash flow from operating activities in 2024 had an unfavorable impact year-over-year primarily due to changes in net working capital. In 2023, $44.6 million of cash was provided by operating activities compared with $29.6 million provided by operating activities in 2022, an increase of $15.0 million.
In 2024, $24.8 million of cash was provided by operating activities compared with $44.6 million provided by operating activities in 2023, a decrease of $19.8 million. Cash flow from operating activities in 2024 had an unfavorable impact year-over-year primarily due to changes in net working capital.
If there is a qualitative determination that the fair value of a particular asset is more likely than not greater than its carrying value, we do not need to proceed to the quantitative estimated fair value test for that asset.
If there is a qualitative determination that the fair value of a particular reporting unit is more likely than not greater than its carrying value, we do not need to quantitatively test for goodwill impairment for that reporting unit.
Joint Venture Debt On March 7, 2022, the Company's Effox-Flextor-Mader, Inc. joint venture ("EFM JV") entered into a loan agreement secured by the assets of the EFM JV in the aggregate principal amount of $11.0 million for the acquisition of General Rubber, LLC.
(formerly known as Effox-Flextor-Mader, Inc.) joint venture ("PPI JV") entered into a loan agreement secured by the assets of the PPI JV in the aggregate principal amount of $11.0 million for the acquisition of General Rubber, LLC.
The decrease in other (expense) income was primarily attributable to net foreign currency transaction losses in the current year based on changes in exchange rates at our foreign subsidiaries. Interest expense was $13.0 million in 2024 compared to $13.4 million in 2023, a decrease of $0.4 million, or 3.0%.
Other income for 2025 was $2.1 million compared to other expense of $4.7 million in 2024, a decrease of $2.6 million. The decrease in other income (expense) was primarily attributable to net foreign currency transaction losses in the current year based on changes in exchange rates at our foreign subsidiaries.
Pursuant to this amendment, the lenders provided an additional term loan in the aggregate principal amount of $75.0 million. On October 7, 2024, the Company entered into the Third Amended and Restated Credit Agreement. This agreement provides for a senior secured revolving credit facility in an initial aggregate principal amount of up to $400.0 million.
On October 30, 2023, the Company entered into Amendment No. 4 to the Second Amended and Restated Credit Agreement. Pursuant to this amendment, the lenders provided an additional term loan in the aggregate principal amount of $75.0 million. On October 7, 2024, the Company entered into the Third Amended and Restated Credit Agreement.
We seek to address the global demand for environmental and equipment protection solutions with our highly engineered platforms including emissions management, fluid bed cyclones, thermal acoustics, separation and filtration, and dampers and expansion joints. • Industrial Process Solutions segment: Our Industrial Process Solutions segment serves the broad industrial sector with solutions for air pollution and contamination control, fluid handling, and process filtration in applications such as aluminum beverage can production, automobile production, food and beverage processing, semiconductor fabrication, electronics production, steel and aluminum mill processing, wood manufacturing, desalination, and aquaculture markets.
We seek to address the global demand for contaminant removal and environmental protection solutions with its highly engineered platforms including emissions management, fluid bed cyclones, thermal acoustics, separation and filtration, and dampers and expansion joints. • Industrial Process Solutions segment: Our Industrial Process Solutions segment serves the broad industrial sector with solutions for contamination control, exhaust air treatment, VOC abatement, process filtration and fluid handling in applications such as aluminum beverage can production, vehicle production, food and beverage processing, semiconductor fabrication, electronics production, steel and aluminum processing, engineered wood products manufacturing, chemical processing, general manufacturing and machining, coating and surface treatment, battery production and recycling, and wind and solar power components manufacturing end markets.
Year Ended December 31, (dollars in millions) 2024 2023 2022 Operating income as reported in accordance with GAAP $ 35.4 $ 34.6 $ 22.2 Operating margin in accordance with GAAP 6.3 % 6.4 % 5.3 % Amortization and earnout expenses 9.1 8.2 6.8 Acquisition and integration expenses 4.2 2.5 4.5 Restructuring expenses 0.5 1.3 0.1 Asbestos litigation expenses 0.2 — — Executive transition expenses — 1.5 1.2 Non-GAAP operating income $ 49.4 $ 48.1 $ 34.8 Non-GAAP operating margin 8.9 % 8.8 % 8.2 % Year Ended December 31, (dollars in millions) 2024 2023 2022 Net income as reported in accordance with GAAP $ 13.0 $ 12.9 $ 17.4 Amortization and earnout expenses 9.1 8.2 6.8 Acquisition and integration expenses 4.2 2.5 4.5 Restructuring expenses 0.5 1.3 0.1 Asbestos litigation expenses 0.2 — — Executive transition expenses — 1.5 1.2 Foreign currency remeasurement 4.3 (1.0 ) (1.3 ) Tax (benefit) expense of adjustments (4.6 ) 1.2 (2.8 ) Non-GAAP net income $ 26.7 $ 26.6 $ 25.9 Non-GAAP net income as a percentage of sales 4.8 % 4.9 % 6.1 % 30 Comparison of the years ended December 31, 2024 and 2023 Consolidated net sales in 2024 were $557.9 million compared with $544.8 million in 2023, an increase of $13.1 million or 2.4%.
Year ended December 31, (in millions) 2025 2024 2023 Operating income as reported in accordance with GAAP $ 105.9 $ 35.5 $ 34.6 Operating margin in accordance with GAAP 13.7 % 6.3 % 6.4 % Amortization expenses 16.1 8.7 7.4 Acquisition and integration expenses 9.5 4.2 2.5 Gain on sale of Global Pump Solutions business (63.7 ) — — Other operating expense 0.6 1.0 3.6 Non-GAAP operating income $ 68.4 $ 49.4 $ 48.1 Non-GAAP operating margin 8.8 % 8.9 % 8.8 % Year ended December 31, (in millions) 2025 2024 2023 Net income as reported in accordance with GAAP $ 50.1 $ 13.0 $ 12.9 Net income as a percentage of sales 6.5 % 2.3 % 2.4 % Amortization expenses $ 16.1 $ 8.7 $ 7.4 Acquisition and integration expenses 9.5 4.2 2.5 Gain on sale of Global Pump Solutions business (63.7 ) — — Other operating expense 0.6 1.0 3.6 Foreign currency remeasurement 2.3 4.3 (1.0 ) Tax expense (benefit) of adjustments 17.7 (4.6 ) 1.2 Non-GAAP net income $ 32.6 $ 26.7 $ 26.6 Non-GAAP net income as a percentage of sales 4.2 % 4.8 % 4.9 % 32 Comparison of the years ended December 31, 2025 and 2024 Consolidated net sales in 2025 were $774.4 million compared with $557.9 million in 2024, an increase of $216.5 million or 38.8%.
Business Segments The Company’s operations are organized and reviewed by management along its product lines and end markets that the segment serves and are presented in two reportable segments. The results of the segments are reviewed through the “Income from operations” line on the Consolidated Statements of Income.
Business Segments The Company’s operations are organized and reviewed by management along its product lines and end markets that the segment serves and are presented in two reportable segments. The results of the segments are reviewed through segment profit, which represents income from operations as adjusted for certain items.
Amortization and earnout expenses were $9.1 million in 2024 and $8.2 million in 2023, an increase of $0.9 million, or 11.0%. The increase in expense is attributable to an increase of $1.2 million in definite lived asset amortization due to recent acquisitions, partially offset by $0.4 million in earnout expense.
Amortization expenses were $16.1 million in 2025 and $8.7 million in 2024, an increase of $7.4 million, or 85.1%. The increase in expense is attributable to an increase in definite lived asset amortization due to recent acquisitions.
Income tax expense and the effective tax rate for 2024 were affected by changes in valuation allowances, and the net impact of global intangible low-taxed income ("GILTI") and foreign-derived intangible income ("FDII"), as well as certain permanent differences including state income taxes, non-deductible incentive stock-based compensation, and differences in tax rates among the jurisdictions in which we operate.
Income tax expense and the effective tax rate for 2025 were affected by the sale of the Global Pump Solutions business, changes in valuation allowances, and the net impact of global intangible low-taxed income and foreign-derived intangible income, as well as certain permanent differences including state income taxes, non-deductible incentive stock-based compensation, and differences in tax rates among the jurisdictions in which we operate. 33 Orders booked were $1,064.3 million in 2025 compared with $667.3 million in 2024, an increase of $397.0 million, or 59.5%.
In 2023, $56.5 million of cash was used in investing activities, which consisted of $48.1 million for current year acquisitions and $8.4 million for acquisition of property and equipment. Financing Activities Financing activities in 2024 provided cash of $65.9 million, which consisted primarily of $82.9 million of net borrowings under the Credit Facility, used to finance current year acquisitions.
Financing activities in 2024 provided cash of $65.9 million, which consisted primarily of $82.9 million of net borrowings under the Credit Facility, used to finance current year acquisitions.
The Credit Facility allows letters of credit and bank guarantee issuances of up to $65.0 million from the bilateral lines of credit secured by pledged assets and collateral under the Credit Facility.
The Credit Facility allows letters of credit and bank guarantee issuances of up to $65.0 million from the bilateral lines of credit secured by pledged assets and collateral under the Credit Facility. See Note 8 to the Consolidated Financial Statements for further information on the Company’s debt facilities.
As a result, the Company provides financial information in this MD&A that was not prepared in accordance with GAAP and should not be considered as an alternative to the information prepared in accordance with GAAP.
These GAAP financial statements include certain charges the Company believes are not indicative of its core ongoing operational performance. As a result, the Company provides financial information in this MD&A that was not prepared in accordance with GAAP and should not be considered as an alternative to the information prepared in accordance with GAAP.
As of December 31, 2024 and 2023, the Company was in compliance with all related financial and other restrictive covenants under the Credit Facility.
As of December 31, 2025 and 2024, the Company was in compliance with all related financial and other restrictive covenants under the Credit Facility. Joint Venture Debt On March 7, 2022, the Company's Pinnacle Processes Inc.
While the Company cannot predict the exact timing or amounts of such charges, it does expect to treat these charges as special items in its future presentation of non-GAAP results.
The Company utilizes this information to evaluate its ongoing financial performance. The Company has incurred substantial expense and income associated with acquisitions. While the Company cannot predict the exact timing or amounts of such charges, it does expect to treat the financial impact of these transactions as special items in its future presentation of non-GAAP results.
The Company provides this supplemental non-GAAP financial information, because the Company’s management utilizes it to evaluate its ongoing financial performance and the Company believes it provides greater transparency to investors as supplemental information to its GAAP results. 28 The Company has provided the non-GAAP financial measures including non-GAAP operating income, non-GAAP operating margin, and non-GAAP net income as a result of the adjustment for items that the Company believes are not indicative of its ongoing operations.
The Company has provided the non-GAAP financial measures including non-GAAP operating income, non-GAAP operating margin, and non-GAAP net income as a result of adjustments for items that the Company believes are not indicative of its ongoing operations.
As a global business, our operations are affected by worldwide, regional and industry-specific economic factors, wherever we operate or do business. Our geographic and industry diversity, and the breadth of our product and services portfolio, have helped mitigate the impact of any one industry or the economy of any single country on our consolidated operating results.
Our geographic and industry diversity, and the breadth of our product and services portfolio, have helped mitigate the impact of any one industry or the economy of any single country on our consolidated operating results.
New Accounting Pronouncements For information regarding recent accounting pronouncements, see Note 1 to the Consolidated Financial Statements included in this annual report on Form 10-K.
See Note 1 to the Consolidated Financial Statements, Summary of Significant Accounting Policies, which discusses accounting policies that must be selected by us when there are acceptable alternatives. New Accounting Pronouncements For information regarding recent accounting pronouncements, see Note 1 to the Consolidated Financial Statements included in this annual report on Form 10-K.
Additionally, we review the remaining useful lives of assets to determine whether events and circumstances warrant a revision to the remaining period of depreciation or amortization. If the estimate of a long-lived asset’s remaining useful life is changed, the remaining carrying amount of the asset is depreciated/amortized prospectively over that revised remaining useful life.
If the estimate of a long-lived asset’s remaining useful life is changed, the remaining carrying amount of the asset is depreciated/amortized prospectively over that revised remaining useful life.
See Note 7 to the Consolidated Financial Statements for further discussion on earnout expenses. Acquisitions and integration expenses related to various merger and acquisition diligence activities, which include legal, accounting and banking expenses, were $4.2 million in 2024, as compared with $2.5 million in 2023, an increase of $1.7 million, or 68.0%.
Acquisitions and integration expenses related to various merger and acquisition diligence activities, which include legal, accounting and banking expenses, were $9.5 million in 2025, as compared with $4.2 million in 2024, an increase of $5.3 million, or 126.2%. The increase is due to the timing and volume of acquisition activity.
The increase in non-GAAP operating income is primarily attributable to the increase in gross profit. Non-GAAP operating income as a percentage of sales was 8.9% for 2024 compared with 8.8% for 2023. Other expense for 2024 was $(4.7) million compared to other income of $0.4 million in 2023, a decrease of $5.1 million.
The increase in non-GAAP operating income is primarily attributable to the increase in gross profit, partially offset by higher selling and administrative costs. Non-GAAP operating income as a percentage of sales was 8.8% for 2025 compared with 8.8% for 2024.
Goodwill We complete an impairment assessment of the Company's indefinite life intangible assets on an annual basis, during the fourth quarter, or more often as circumstances require.
Goodwill and Indefinite-lived Intangible Assets We complete an impairment assessment annually in the fourth quarter or more often as circumstances require, of goodwill and indefinite-lived intangible assets on a reporting unit level, at or below the operating segment level.
Our material cash requirements included (i) debt repayments under with respect to our Credit Facility and joint venture term debt, (ii) interest expense, (iii) purchase obligations for costs associated with uncompleted sales contracts, (iv) operating and capital lease obligations and (v) contingent liabilities related to acquisitions, including earnout liabilities and retention payments.
Our ability to fund these expected uses from the results of future operations will be subject to prevailing economic conditions and to financial, business, regulatory, legislative and other factors, many of which are beyond our control. 37 Our material cash requirements included debt repayments with respect to our Credit Facility and joint venture term debt, interest expense, purchase obligations for costs associated with uncompleted sales contracts, operating and capital lease obligations and contingent liabilities related to acquisitions, including earnout liabilities and retention payments.
Our operational strategy is implemented through our technology and application-based platforms aligned around target customers and end markets where our solutions are particularly valuable. Core elements of our operational strategy are commercial and operational excellence, margin expansion, recurring revenue growth, cash flow generation, product management, and project management execution.
Our enterprise strategy consists of a combined operational strategy and capital allocation strategy. 28 Our operational strategy is implemented through our technology and application-based platforms aligned around target customers and end markets where our solutions are particularly valuable.
We have excellent collaboration between our platforms and our centralized service teams ensuring optimal efficiency and alignment on growth and improvement initiatives. 27 Our reportable segments are: • Engineered Systems segment: Our Engineered Systems segment serves the power generation, hydrocarbon processing, water/wastewater treatment, oily water separation and treatment, marine and naval vessels, and midstream oil and gas sectors.
Our reportable segments are: • Engineered Systems segment: Our Engineered Systems segment serves the power generation, hydrocarbon transport and processing, water/wastewater treatment, oily water separation and treatment, marine and naval, and natural gas and natural gas liquids infrastructure, treatment and transport sectors.
Variable compensation based on the Company’s performance is included in selling and administrative expense. An advantage of our operating model is that as revenue grows, we have significant operating leverage on our fixed selling and administrative cost structure.
An advantage of our operating model is that as revenue grows, we have significant operating leverage on our fixed selling and administrative cost structure. 30 Note Regarding Use of Non-GAAP Financial Measures The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
The following table summarizes the Company’s material cash requirements from known contractual obligations as of December 31, 2024: Payments Due by Period (dollars in thousands) Total Less than 1 year 1-3 years 3-5 years More than 5 years Term Loan Debt, including joint venture debt $ 7,297 $ 1,650 $ 5,647 $ — $ — Revolving Credit Loan 214,200 — — 214,200 — Interest expense (estimated) 73,532 15,735 46,213 11,584 — Purchase obligations (1) 173,681 173,681 — — — Operating lease obligations 31,161 5,810 8,912 6,730 9,709 Capital lease obligations 5,484 943 1,944 2,022 575 Liabilities related to acquisitions (2) 5,835 60 5,775 — — Totals $ 511,190 $ 197,879 $ 68,491 $ 234,536 $ 10,284 (1) Primarily consists of purchase obligations for costs associated with uncompleted sales contracts.
The following table summarizes the Company’s material cash requirements from known contractual obligations as of December 31, 2025: Payments Due by Period (in thousands) Total Less than 1 year 1-3 years 3-5 years More than 5 years Term Loan Debt, including joint venture debt $ 5,647 $ 1,879 $ 3,768 $ — $ — Revolving Credit Loan 208,600 — — 208,600 — Interest expense (estimated) 47,494 13,789 33,705 — — Purchase obligations (1) 136,294 136,294 — — — Operating lease obligations 36,195 7,417 12,494 7,656 8,628 Totals $ 434,230 $ 159,379 $ 49,967 $ 216,256 $ 8,628 (1) Primarily consists of purchase obligations for costs associated with uncompleted sales contracts.
See Note 8 to the Consolidated Financial Statements for further information on the Company’s debt facilities. 34 Total unused credit availability under our Credit Facility and other non-U.S. credit facilities and agreements, exclusive of any potential asset base limitations, is as follows: December 31, 2024 2023 (dollars in millions) Credit Facility, revolving loans $ 400.0 $ 140.0 Draw down (214.2 ) (17.3 ) Letters of credit open (18.9 ) (13.3 ) Total unused credit availability $ 166.9 $ 109.4 Amount available based on borrowing limitations $ 1.0 $ 99.8 Overview of Cash Flows and Liquidity For the year ended December 31, (dollars in thousands) 2024 2023 2022 Total operating cash flow provided by operating activities $ 24,828 $ 44,647 $ 29,649 Net cash used in investing activities (105,312 ) (56,486 ) (48,257 ) Net cash provided by financing activities 65,910 21,144 38,176 Effect of exchange rate changes on cash and cash equivalents (2,673 ) (442 ) (4,978 ) Net increase (decrease) in cash, cash equivalents and restricted cash $ (17,247 ) $ 8,863 $ 14,590 Operating Activities In 2024, $24.8 million of cash was provided by operating activities compared with $44.6 million provided by operating activities in 2023, a decrease of $19.8 million.
Overview of Cash Flows and Liquidity Year ended December 31, (in thousands) 2025 2024 2023 Total operating cash flow provided by operating activities $ 5,861 $ 24,828 $ 44,647 Net cash used in investing activities (1,076 ) (105,312 ) (56,486 ) Net cash (used in) provided by financing activities (11,558 ) 65,910 21,144 Effect of exchange rate changes on cash and cash equivalents 1,798 (2,673 ) (442 ) Net (decrease) increase in cash, cash equivalents and restricted cash $ (4,974 ) $ (17,247 ) $ 8,863 Operating Activities In 2025, $5.9 million of cash was provided by operating activities compared with $24.8 million provided by operating activities in 2024, a decrease of $18.9 million.
Approximately $20.1 million of net sales in 2024 is attributable to acquisitions that occurred during the preceding twelve-month period. 32 Operating income for the Engineered Systems segment increased $12.6 million to $72.4 million in 2024 compared with $59.8 million in 2023, an increase of 21.1%.
Approximately $61.6 million of orders in 2025 are attributable to acquisitions that occurred during the preceding twelve-month period. These orders are attributable to the company’s combustion management product line. Industrial Process Solutions segment Our Industrial Process Solutions segment net sales increased $56.2 million to $230.1 million in 2025 compared with $173.9 million in 2024, an increase of 32.3%.
Cash flow from operating activities in 2023 had a favorable impact year-over-year primarily due to changes in net working capital. Investing Activities In 2024, $105.3 million of cash was used in investing activities, which consisted of $87.9 million for current year acquisitions and $17.4 million for acquisition of property and equipment.
In 2024, $105.3 million of cash was used in investing activities, which consisted of $87.9 million for acquisitions including the third quarter acquisition of EnviroCare and fourth quarter acquisitions of WK Group and Verantis, as well as $17.4 million for acquisition of property and equipment.
Our capital allocation strategy supports the growth and value creation generated by our operational strategy.
Core elements of our operational strategy are commercial and operational excellence, margin expansion, recurring revenue growth, cash flow generation, product management, and project management execution. Our capital allocation strategy supports the growth and value creation generated by our operational strategy.
Operating income as a percentage of sales for 2024 was 6.3% compared with 6.4% for 2023. The increase in operating income is primarily attributable to the increase in gross profit. Non-GAAP operating income was $49.4 million in 2024, an increase of $1.3 million from $48.1 million in 2023.
Segment profit for the Engineered Systems segment increased $32.7 million to $111.8 million in 2025 compared with $79.1 million in 2024, an increase of 41.3%. The increase in operating income is primarily attributable to higher gross profit margin, driven by sales volume as described above.
As of December 31, 2024 and 2023, $29.7 million and $38.5 million, respectively, of our cash and cash equivalents were held by foreign subsidiaries, as well as being denominated in foreign currencies. 33 Debt consisted of the following: December 31, (table only in thousands) 2024 2023 Outstanding borrowings under Credit Facility – Term loan $ — $ 112,424 – Revolving Credit Loan 214,200 17,300 Total outstanding borrowings under the Credit Facility 214,200 129,724 Outstanding borrowings under the joint venture term debt 7,297 8,855 Unamortized debt discount (2,617 ) (1,296 ) Total outstanding borrowings 218,880 137,283 Less: current portion (1,650 ) (10,488 ) Total debt, less current portion $ 217,230 $ 126,795 In 2024, the Company made repayments of $112.4 million on the term loan and $1.6 million on the joint venture term debt, with net borrowings of $196.9 million on the revolving credit line .
Debt consisted of the following: December 31, (in thousands) 2025 2024 Outstanding borrowings under Credit Facility Revolving Credit Facility $ 208,600 $ 214,200 Total outstanding borrowings under the Credit Facility 208,600 214,200 Outstanding borrowings under the joint venture term debt 5,647 7,297 Unamortized debt discount (1,809 ) (2,617 ) Total outstanding borrowings 212,438 218,880 Less: current portion (1,879 ) (1,650 ) Total debt, less current portion $ 210,559 $ 217,230 In 2025, the Company made repayments of $1.7 million on the joint venture term debt, with net borrowings of $5.6 million on the revolving credit line . 35 Credit Facility The Company's outstanding borrowings in the United States consist of a senior secured term loan and a senior secured revolver loan with sub-facilities for letters of credit, swing-line loans and multi-currency loans (collectively, the "Credit Facility").
Under the terms of the Credit Facility, the Company is required to maintain certain financial covenants, including the maintenance of a Consolidated Net Leverage Ratio not greater than 4.00 to 1.00 and a Consolidated Secured Net Leverage Ratio (as defined in the Credit Facility) not greater than 3.00 to 1.00.
Under the terms of the Credit Facility, the Company is required to maintain certain financial covenants.
The increase is due to the timing and volume of acquisition activity. See Note 14 to the Consolidated Financial Statements for further discussion on recent acquisitions. Executive transition expenses were zero in 2024 compared to $1.5 million in 2023, a decrease of $1.5 million.
See Note 14 to the Consolidated Financial Statements for further discussion on recent acquisitions. Other operating expense for the year ended December 31, 2025 was $0.6 million in 2025, a decrease of $0.4 million, or 40%, compared with $1.0 million in 2024.
Approximately $13.0 million of net sales in 2024 is attributable to acquisitions that have occurred during the preceding twelve-month period. Operating income for the Industrial Process segment increased $8.0 million to $29.6 million in 2024 compared with $21.6 million in 2023. The increase in operating income in primarily attributable to higher gross profit related to increased sales and project execution.
The increase is primarily attributable to the Company’s acquisitions of Verantis and WK and the divestiture of its Fluid Handling business. Approximately $66.6 million of net sales in 2025 is attributable to acquisitions that have occurred during the preceding twelve-month period.
Gross profit as a percentage of sales increased to 35.1% in 2024 compared with 31.4% in 2023. Orders booked were $667.3 million in 2024 compared with $582.8 million in 2023, an increase of $84.5 million, or 14.5%.
Gross profit increased by $73.1 million, or 37.3%, to $269.2 million in 2025 compared with $196.1 million in 2024. The increase in gross profit was attributable to the volume growth described above. Gross profit as a percentage of sales decreased to 34.8% in 2025 compared with 35.1% in 2024.
The decrease in interest expense is primarily due to lower a weighted average stated interest rate. 31 Income tax expense was $3.3 million in 2024 compared to $7.0 million in 2023, a decrease of $3.7 million, or 52.9%. The effective tax rate for 2024 was 18.5% compared with 32.6% in 2023.
Interest expense was $20.9 million in 2025 compared to $13.0 million in 2024, an increase of $7.9 million, or 60.8%. The increase in interest expense is primarily due to a higher average outstanding debt balance throughout 2025. Income tax expense was $29.7 million in 2025 compared to $3.3 million in 2024, an increase of $26.4 million, or 800.0%.
Accordingly, we recognized no impairment charges in our financial results for the years ended December 31, 2024, 2023, and 2022. For additional information on impairment testing results, see Note 6 to the Consolidated Financial Statements.
During 2025, 2024, and 2023, we recognized no impairment charges related to long-lived assets. For additional information on impairment testing results, see Note 6 to the Consolidated Financial Statements. Additionally, we review the remaining useful lives of assets to determine whether events and circumstances warrant a revision to the remaining period of depreciation or amortization.
Other significant accounting policies Other significant accounting policies, not involving the same level of uncertainties as those discussed above, are nevertheless important to an understanding of our financial statements. See Note 1 to the Consolidated Financial Statements, Summary of Significant Accounting Policies, which discusses accounting policies that must be selected by us when there are acceptable alternatives.
Based on our current profile, we do not expect the Act's changes to the taxation of foreign earnings to have a material impact on our results in future periods when effective. Other significant accounting policies Other significant accounting policies, not involving the same level of uncertainties as those discussed above, are nevertheless important to an understanding of our financial statements.
The decrease is primarily related to two unique industrial air bookings from 2023 that were not expected to repeat. Approximately $7.9 million of orders in 2024 are attributable to acquisitions that occurred during the preceding twelve month period.
Approximately $42.9 million of orders in 2025 are attributable to acquisitions that occurred during the preceding twelve month period, offset by the impact of the divestiture of its Fluid Handling business.
Financing activities in 2023 provided cash of $21.1 million, which consisted primarily of $27.1 million of net borrowings under the Credit Facility, used to finance current year acquisitions, as well as $1.4 million of proceeds from employee stock purchase plan and exercise of stock options.
Financing Activities Financing activities in 2025 used cash of $11.6 million, which consisted primarily of $7.8 million of net payments under the Credit Facility, using the cash proceeds from the sale of the Global Pump Solutions business, as well as $1.6 million of distributions to non-controlling interests and $2.8 million of deferred consideration for acquisitions.
The increase was driven by brands within the industrial processing solutions segment, notably in industrial air, ducting, and ventilation applications. Specific end markets driving the increase include building materials, metals, and automotive. Approximately $33.1 million of net sales is attributable to acquisitions that occurred during the preceding twelve-month period.
The increase was primarily driven by the Company’s Engineered Systems segment. Within Engineered Systems, net sales increased across all product families with notable growth in filter separators, coalescers, and combustion and SCR systems. Approximately $129.4 million of net sales is attributable to acquisitions that occurred during the preceding twelve-month period.
The increase in operating income in primarily attributable to higher gross profit driven by improved sales mix, productivity, project execution, and cost savings initiatives. Industrial Process Solutions segment Our Industrial Process Solutions segment orders booked decreased $25.4 million, or 13.2%, to $166.3 million in 2024 compared with $191.7 million in 2023.
Segment profit for the Industrial Process segment increased $68.8 million to $101.1 million in 2025 compared with $32.3 million in 2024. The increase in operating income was primarily attributable to higher sales volume. Gross profit margins decreased year over year, driven by the divestiture of the higher-margin Fluid Handling business and project mix, primarily within the Company’s ducting business.
This was partially offset by $2.1 million of earnout payments, $1.7 million in distributions to non-controlling interest, $1.2 million of deferred consideration for acquisitions, $0.9 million in payments on our capital leases, and $0.4 million of financing fees. Our primary sources of liquidity are cash generated from operations and borrowing availability under the Credit Facility.
Our primary sources of liquidity are cash generated from operations and borrowing availability under the Credit Facility.
These items include charges associated with the Company’s acquisitions, and the items described below in “Consolidated Results.” The Company believes that evaluation of its financial performance compared with prior and future periods can be enhanced by a presentation of results that exclude the impact of these items. The Company has incurred substantial expense and generated substantial income associated with acquisitions.
These items include charges associated with the Company’s acquisitions, divestiture, and the items described below in “Consolidated Results.” The Company believes that these items are not necessarily indicative of the Company’s ongoing operations and their exclusion provides individuals with additional information to better compare the Company's results over multiple periods.
Removed
In 2024 and the first quarter of 2025, we disclosed multiple transactions that strategically align with the Company’s portfolio management strategy and vision. These transactions include the acquisition of Profire Energy ("Profire") and the intended divestiture of the Company’s Fluid Handling business.
Added
Industry Trends and Corporate Strategy We are a global corporation with worldwide operations. As a global business, our operations are affected by worldwide, regional and industry-specific economic factors, wherever we operate or do business.
Removed
Profire, a former publicly traded company on the NASDAQ under ticker symbol PFIE, is a leading North American supplier of mission-critical combustion automation and control solution services. Their core offering supports emissions reduction, safety objectives, and industry regulations.
Added
Against the current backdrop of a rapidly evolving global commercial environment, we believe we are comparatively well-positioned as we execute and manufacture a majority of our business in the same regions in which we sell, with our cost and revenue bases largely aligned as a result. Recently, international trade has been impacted by geopolitical tariff considerations.
Removed
Profire has a large install base across oil & gas, petrochemical, and natural gas markets, with growing exposure to other energy transition markets. The business is headquartered in Lindon, Utah, with a research and development center in Edmonton-Alberta, Canada. The business has a long-tenured and experienced leadership team and had 2024 revenues of $63 million with accretive EBITDA margins.
Added
To mitigate potential tariff-related impacts, we have worked strategically with customers and suppliers to optimize terms and pricing, sourcing locations, and logistics routes and schedules. While we will continue to take a proactive approach on our efforts to mitigate the impacts of tariffs, our business and results could be adversely affected by further policy developments.
Removed
Fluid Handling is a well-positioned business with strong brands in the pumps and filters space. However, we are focused on businesses that more closely align with our strategic investments and leadership positions in the air, water and energy transition spaces. Industry Trends and Corporate Strategy We are a global corporation with worldwide operations.
Added
If we are unable to continue to mitigate the effects of these supply disruptions and/or inflationary pressures, our business, results and financial condition could be affected. Recent Developments Proposed Transaction with Thermon Group Holdings, Inc.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeTransaction (losses) gains included in “Other (expense) income, net” line of the Consolidated Statements of Income were $(4.3) million, $1.2 million, and $6.3 million in 2024, 2023, and 2022, respectively. 38
Biggest changeTransaction (losses) gains included in “Other (expense) income, net” line of the Consolidated Statements of Income were $(2.2) million, $(4.3) million, and $1.2 million in 2025, 2024, and 2023, respectively.
Most of the interest on the Company’s debt is indexed to SOFR market rates. The estimated annual impact of a hypothetical 10% change in the estimated weighted average borrowing rate at December 31, 2024 is $1.6 million.
Most of the interest on the Company’s debt is indexed to SOFR market rates. The estimated annual impact of a hypothetical 10% change in the estimated weighted average borrowing rate at December 31, 2025 is $1.4 million.
The carrying value of the Company’s total long-term debt and current maturities of long-term debt at December 31, 2024 was $221.5 million. Market risk was estimated as the potential decrease (increase) in future earnings and cash flows resulting from a hypothetical 10% increase (decrease) in the Company’s estimated weighted average borrowing rate at December 31, 2024.
The carrying value of the Company’s total long-term debt and current maturities of long-term debt at December 31, 2025 was $214.2 million. Market risk was estimated as the potential decrease (increase) in future earnings and cash flows resulting from a hypothetical 10% increase (decrease) in the Company’s estimated weighted average borrowing rate at December 31, 2025.

Other CECO 10-K year-over-year comparisons