CECO

CECO is firing on the operating cylinders: FY2025 revenue jumped 38.8% to $774M, operating income tripled to $106M, and diluted EPS surged 280.6% to $1.37 as the Industrial Process Solutions and Engineered Systems segments rode the demand for emissions control, natural-gas infrastructure and water treatment that management explicitly ties to the Infrastructure Investment and Jobs Act and the global energy transition. ROE of 15.8% and a 199% jump in operating income confirm operating leverage on the four-year revenue ramp from $324M (FY2021) to $774M.

The quality of those earnings is the catch. Operating cash flow fell 76.4% to just $5.86M against $50.1M of net income — a brutal cash-conversion gap that signals heavy working capital build in CECO's project-based, 'engineer-to-order' business. D&A of $24.9M (up 71.3%) and current liabilities up 25% point to acquisition-driven growth rather than purely organic execution. Net margin of 6.5% and gross margin of 34.8% are decent for an industrial but not differentiated, and liabilities/equity of 1.80x with $211M of long-term debt against only $33.1M of cash leaves limited cushion.