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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)


☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2025


☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File No. 0-07099

CECO ENVIRONMENTAL CORP.

(Exact name of registrant as specified in its charter)

     Delaware

     13-2566064

     (State or other jurisdiction of
Incorporation or organization)

     (IRS Employer
Identification No.)

     5080 Spectrum Drive
Suite 800E
 Addison, Texas

75001

     (Address of principal executive offices)

     (Zip Code)

Registrant’s telephone number, including area code: (214) 357-6181

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	CECO	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practical date: 35,641,031 shares of common stock, par value $0.01 per share, as of October 17, 2025.

CECO ENVIRONMENTAL CORP.

QUARTERLY REPORT ON FORM 10-Q

For the quarter ended September 30, 2025

Table of Contents


Part I –	Financial Information	2

	Item 1. Financial Statements	2

	Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024	2

	Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2025 and 2024	3

	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2025 and 2024	4

	Condensed Consolidated Statements of Shareholders’ Equity for the nine months ended September 30, 2025 and 2024	5

	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024	7

	Notes to Condensed Consolidated Financial Statements	8

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

	Item 3. Quantitative and Qualitative Disclosures about Market Risk	33

	Item 4. Controls and Procedures	34

Part II –	Other Information	35

	Item 1. Legal Proceedings	35

	Item 1A. Risk Factors	35

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	35

	Item 3. Defaults Upon Senior Securities	35

	Item 4. Mine Safety Disclosures	35

	Item 5. Other Information	35

	Item 6. Exhibits	36

Signatures		37

CECO ENVIRONMENTAL CORP.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)


(in thousands, except per share data)	September 30, 2025			December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	32,787		$	37,832
Restricted cash		86			369
Accounts receivable, net of allowances of $8,496 and $8,863		159,615			159,572
Costs and estimated earnings in excess of billings on uncompleted contracts		109,826			69,889
Inventories		57,712			42,624
Prepaid expenses and other current assets		29,110			16,859
Prepaid income taxes		6,344			3,826
Total current assets		395,480			330,971
Property, plant and equipment, net		48,037			33,810
Right-of-use assets from operating leases		27,679			25,102
Goodwill		292,262			269,747
Intangible assets – finite life, net		100,986			74,050
Intangible assets – indefinite life		9,715			9,466
Deferred income taxes		1,162			966
Deferred charges and other assets		16,563			15,587
Total assets	$	891,884		$	759,699
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of debt	$	1,928		$	1,650
Accounts payable		127,576			109,671
Accrued expenses		60,632			47,528
Billings in excess of costs and estimated earnings on uncompleted contracts		107,361			81,501
Notes payable		—			1,700
Income taxes payable		793			2,612
Total current liabilities		298,290			244,662
Other liabilities		3,194			14,362
Debt, less current portion		218,980			217,230
Deferred income tax liability, net		34,571			11,322
Operating lease liabilities		23,282			20,230
Total liabilities		578,317			507,806
Commitments and contingencies (See Note 14)
Shareholders’ equity:
Preferred stock, $0.01 par value; 10,000 shares authorized, none issued		—			—
Common stock, $0.01 par value; 100,000,000 shares authorized, 35,641,031 and 34,978,009 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		355			349
Capital in excess of par value		265,786			255,211
Retained earnings		53,563			6,570
Accumulated other comprehensive loss		(10,498	)		(14,441	)
Total CECO shareholders' equity		309,206			247,689
Noncontrolling interest		4,361			4,204
Total shareholders' equity		313,567			251,893
Total liabilities and shareholders' equity	$	891,884		$	759,699

The notes to the condensed consolidated financial statements are an integral part of the above statements.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)


	Three months ended September 30,				Nine months ended September 30,
(in thousands, except share and per share data)	2025		2024		2025			2024
Net sales	$	197,599	$	135,513	$	559,687		$	399,367
Cost of sales		133,020		90,247		365,838			259,921
Gross profit		64,579		45,266		193,849			139,446
Selling and administrative expenses		47,034		34,262		149,393			105,636
Amortization expenses		6,144		2,164		12,177			6,478
Acquisition and integration expenses		252		1,210		8,427			1,876
Loss (gain) on sale of Global Pump Solutions business		801		—		(63,701	)		—
Other operating expense (income), net		948		443		(1,778	)		1,327
Income from operations		9,400		7,187		89,331			24,129
Other expense, net		2,056		398		1,196			2,589
Interest expense		5,054		2,648		16,169			9,315
Income before income taxes		2,290		4,141		71,966			12,225
Income tax expense		483		1,602		23,610			2,664
Net income		1,807		2,539		48,356			9,561
Noncontrolling interest		308		453		1,363			1,482
Net income attributable to CECO Environmental Corp.	$	1,499	$	2,086	$	46,993		$	8,079
Earnings per share:
Basic	$	0.04	$	0.06	$	1.33		$	0.23
Diluted	$	0.04	$	0.06	$	1.29		$	0.22
Weighted average number of common shares outstanding:
Basic		35,359,969		34,966,625		35,225,740			34,910,165
Diluted		36,396,693		36,488,788		36,549,130			36,322,690

The notes to the condensed consolidated financial statements are an integral part of the above statements.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2025		2024		2025		2024
Net income	$	1,807	$	2,539	$	48,356	$	9,561
Other comprehensive income, net of tax:
Foreign currency translation gain		2,020		2,102		3,943		1,900
Comprehensive income	$	3,827	$	4,641	$	52,299	$	11,461

The notes to the condensed consolidated financial statements are an integral part of the above statements.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(unaudited)


	Common Stock				Capital in excess of			Retained		Accumulated Other Comprehensive			Non-controlling			Total Shareholders'
	Shares		Amount		par value			Earnings		Loss			interest			Equity
Balance December 31, 2024		34,978	$	349	$	255,211		$	6,570	$	(14,441	)	$	4,204		$	251,893
Net income for the three months ended March 31, 2025		—		—		—			35,984		—			458			36,442
Restricted stock units issued		260		3		(3,045	)		—		—			—			(3,042	)
Share based compensation earned		12		—		3,641			—		—			—			3,641
Translation gain		—		—		—			—		1,519			—			1,519
Noncontrolling interest distributions		—		—		—			—		—			(402	)		(402	)
Balance March 31, 2025		35,250	$	352	$	255,807		$	42,554	$	(12,922	)	$	4,260		$	290,051
Net income for the three months ended June 30, 2025		—		—		—			9,510		—			595			10,105
Exercise of stock options		1		—		5			—		—			—			5
Restricted stock units issued		57		—		(224	)		—		—			—			(224	)
Share based compensation earned		—		—		2,878			—		—			—			2,878
Translation gain		—		—		—			—		404			—			404
Balance June 30, 2025		35,308	$	352	$	258,466		$	52,064	$	(12,518	)	$	4,855		$	303,219
Net income for the three months ended September 30, 2025		—		—		—			1,499		—			308			1,807
Exercise of stock options		300		3		3,814			—		—			—			3,817
Restricted stock units issued		13		—		(253	)		—		—			—			(253	)
Share based compensation earned		20		—		3,759			—		—			—			3,759
Translation gain		—		—		—			—		2,020			—			2,020
Noncontrolling interest distributions		—		—		—			—		—			(802	)		(802	)
Balance September 30, 2025		35,641	$	355	$	265,786		$	53,563	$	(10,498	)	$	4,361		$	313,567


	Common Stock						Capital in excess of			Accumulated			Accumulated Other Comprehensive			Non-controlling			Total Shareholders'
	Shares			Amount			par value			Loss			Loss			interest			Equity
Balance December 31, 2023		34,835		$	348		$	254,956		$	(6,387	)	$	(16,274	)	$	4,848		$	237,491
Net income for the three months ended March 31, 2024		—			—			—			1,508			—			585			2,093
Exercise of stock options		10			—			113			—			—			—			113
Restricted stock units issued		195			2			(2,204	)		—			—			—			(2,202	)
Share based compensation earned		12			—			1,808			—			—			—			1,808
Common stock repurchase and retirement		(144	)		(1	)		(3,000	)		—			—			—			(3,001	)
Translation gain		—			—			—			—			654			—			654
Noncontrolling interest distributions		—			—			—			—			—			(804	)		(804	)
Balance March 31, 2024		34,908		$	349		$	251,673		$	(4,879	)	$	(15,620	)	$	4,629		$	236,152
Net income for the three months ended June 30, 2024		—			—			—			4,485			—			445			4,930
Exercise of stock options		10			—			161			—			—			—			161
Restricted stock units issued		92			1			(466	)		—			—			—			(465	)
Share based compensation earned		—			—			2,191			—			—			—			2,191
Common stock repurchase and retirement		(86	)		(1	)		(1,999	)		—			—			—			(2,000	)
Translation loss		—			—			—			—			(856	)		—			(856	)
Noncontrolling interest distributions		—			—			—			—			—			(301	)		(301	)
Balance June 30, 2024		34,924		$	349		$	251,560		$	(394	)	$	(16,476	)	$	4,773		$	239,812
Net income for the three months ended September 30, 2024		—			—			—			2,086			—			453			2,539
Exercise of stock options		8			—			94			—			—			—			94
Restricted stock units issued		27			—			(340	)		—			—			—			(340	)
Share based compensation earned		20			—			2,276			—			—			—			2,276
Translation gain		—			—			—			—			2,102			—			2,102
Noncontrolling interest distributions		—			—			—			—			—			(602	)		(602	)
Balance September 30, 2024		34,979		$	349		$	253,590		$	1,692		$	(14,374	)	$	4,624		$	245,881

The notes to the condensed consolidated financial statements are an integral part of the above statements.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Nine months ended September 30,
(in thousands)	2025			2024
Cash flows from operating activities:
Net income	$	48,356		$	9,561
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization		18,726			10,536
Unrealized foreign currency (gain) loss		(2,219	)		201
Gain on sale of Global Pump Solutions business		(63,701	)		—
Fair value adjustment to earnout liabilities		(7,403	)		400
Loss on sale of property and equipment		46			135
Debt discount amortization		631			357
Share-based compensation expense		9,507			5,790
Provision for credit loss		209			404
Inventory reserve expense		(132	)		850
Deferred income tax expense		6,322			77
Changes in operating assets and liabilities, net of acquisitions and divestiture:
Accounts receivable		5,822			9,653
Costs and estimated earnings in excess of billings on uncompleted contracts		(38,605	)		(1,498	)
Inventories		(6,477	)		(4,305	)
Prepaid expense and other current assets		(15,302	)		(18,059	)
Deferred charges and other assets		(5,597	)		(2,755	)
Accounts payable		15,834			15,387
Accrued expenses		15,970			(550	)
Billings in excess of costs and estimated earnings on uncompleted contracts		21,193			7,286
Income taxes payable		(4,142	)		(1,140	)
Other liabilities		(3,139	)		(9,330	)
Net cash (used in) provided by operating activities		(4,100	)		23,000
Cash flows from investing activities:
Acquisitions of property and equipment		(8,673	)		(11,237	)
Net cash proceeds for sale of Global Pump Solutions business		107,808			—
Net cash paid for acquisitions, net of cash acquired		(97,615	)		(14,954	)
Net cash provided by (used in) investing activities		1,520			(26,191	)
Cash flows from financing activities:
Borrowings on revolving credit lines		185,800			58,400
Repayments on revolving credit lines		(183,700	)		(54,800	)
Repayments of long-term debt		(1,230	)		(7,843	)
Payments on finance leases and financing liability		(643	)		(692	)
Deferred consideration paid for acquisitions		(2,787	)		(2,050	)
Earnout payments		—			(1,672	)
Equity awards surrendered by employees for tax liability, net of proceeds from employee stock purchase plan and exercise of stock options		930			846
Noncontrolling interest distributions		(1,204	)		(1,707	)
Common stock repurchased		—			(5,000	)
Net cash used in financing activities		(2,834	)		(14,518	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		86			1,187
Net decrease in cash, cash equivalents and restricted cash		(5,328	)		(16,522	)
Cash, cash equivalents and restricted cash at beginning of period		38,201			55,448
Cash, cash equivalents and restricted cash at end of period	$	32,873		$	38,926
Cash paid during the period for:
Interest	$	15,861		$	9,714
Income taxes	$	22,424		$	6,779

The notes to the condensed consolidated financial statements are an integral part of the above statements.

CECO ENVIRONMENTAL CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Reporting for Consolidated Financial Statements

The accompanying unaudited condensed consolidated financial statements of CECO Environmental Corp. and its subsidiaries (the “Company,” “CECO,” “we,” “us,” or “our”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to those rules and regulations. In the opinion of management, the accompanying unaudited condensed consolidated financial statements of the Company contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position as of September 30, 2025 and the results of operations, cash flows and shareholders’ equity for the three and nine months ended September 30, 2025 and 2024. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the full year. The balance sheet as of December 31, 2024 has been derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on February 25, 2025 (the “Form 10-K”). Certain prior period amounts were reclassified to conform to the presentation in the current period.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

These financial statements and accompanying notes should be read in conjunction with the audited financial statements and the notes thereto included in the Form 10-K.

Unless otherwise indicated, all balances within tables are in thousands, except per share amounts.

2. Recent Financial Accounting Pronouncements

The Company considered the impact of all Accounting Standards Updates ("ASUs") issued by the Financial Accounting Standards Board ("FASB"). The ASUs issued but not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company's consolidated financial statements.

Accounting Standards Adopted in Fiscal 2025

None.

Accounting Standards to be Adopted

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which removes references to project stages, and requires capitalization of software costs to begin when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the intended function. The ASU is effective for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which introduces a practical expedient for estimating credit losses on current accounts receivable and contract assets. The ASU is effective for fiscal years beginning after December 15, 2025, and interim periods within those annual reporting periods. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which addresses annual income tax disclosure requirements, primarily around the disclosure of the rate reconciliation and income taxes paid. The ASU is effective for fiscal years beginning after December 15, 2024. The Company is currently

evaluating the impact the adoption of the standard will have on the Company’s consolidated financial statements and will adopt the new annual disclosures as required for the fiscal year ended December 31, 2025.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which addresses expense disclosure requirements, primarily the disaggregation of expense captions. The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s consolidated financial statements.

3. Accounts Receivable

Accounts receivable as of September 30, 2025 and December 31, 2024 consisted of the following:


(in thousands)	September 30, 2025			December 31, 2024
Accounts receivable	$	168,111		$	168,435
Provision for credit losses		(8,496	)		(8,863	)
Total accounts receivable, net	$	159,615		$	159,572

Accounts receivable, net as of the beginning of the prior year period, or January 1, 2024, were $112.7 million.

Balances billed but not paid by customers under retainage provisions in contracts within the Condensed Consolidated Balance Sheets amounted to approximately $15.2 million and $13.6 million at September 30, 2025 and December 31, 2024, respectively. Retainage receivables on contracts in progress are generally collected up to 24 months following contract completion, and are recorded in either "Accounts receivable, net" or "Deferred charges and other assets" within the Condensed Consolidated Balance Sheets depending on timing of expected collection.

Provision for credit losses activity for the nine months ended September 30, 2025 and 2024 consisted of the following:


	Nine months ended September 30,
(in thousands)	2025			2024
Balance at beginning of period	$	8,863		$	6,460
Write-offs		(1,353	)		(4	)
Changes to the provision		1,090			763
Recoveries		(104	)		(5	)
Balance at end of period	$	8,496		$	7,214

4. Contract Assets and Liabilities

Contract assets and liabilities as of September 30, 2025 and December 31, 2024 consisted of the following:


(in thousands)	September 30, 2025		December 31, 2024
Costs and estimated earnings in excess of billings on uncompleted contracts	$	109,826	$	69,889
Billings in excess of costs and estimated earnings on uncompleted contracts		107,361		81,501

As of the beginning of the prior year period, or January 1, 2024, costs and estimated earnings in excess of billings on uncompleted contracts and billings in excess of costs and estimated earnings on uncompleted contracts were $66.6 million and $56.9 million, respectively. The contract liabilities recorded in “Accrued expenses” on the Condensed Consolidated Balance Sheets were $14.8 million, $9.7 million and $7.9 million as of September 30, 2025, December 31, 2024 and January 1, 2024, respectively. Approximately 80% of the Company's contract liabilities as of December 31, 2024 were recognized as revenue in the nine months ended September 30, 2025.

5. Inventories

Inventories as of September 30, 2025 and December 31, 2024 consisted of the following:


(in thousands)	September 30, 2025		December 31, 2024
Raw materials	$	17,918	$	24,803
Work in process		18,609		14,532
Finished goods		21,185		3,289
Total inventories	$	57,712	$	42,624

Adjustments to the allowance for obsolete inventory, as recorded to cost of sales, amounted to a decrease of $0.3 million and increase of $0.2 million for the three months ended September 30, 2025 and 2024, respectively, and a decrease of $0.1 million and increase of $0.8 million for the nine months ended September 30, 2025 and 2024, respectively.

6. Goodwill and Intangible Assets

Goodwill and indefinite life intangible asset activity for the nine months ended September 30, 2025 and the year ended December 31, 2024 was as follows:


(in thousands)	Nine months ended September 30, 2025					Year ended December 31, 2024
Goodwill / Tradename	Goodwill			Tradename		Goodwill			Tradename
Balance at beginning of period	$	269,747		$	9,466	$	211,326		$	9,570
Acquisitions		46,365			—		59,115			—
Divestiture		(26,838	)		—		—			—
Foreign currency translation		2,988			249		(694	)		(104	)
Balance at end of period	$	292,262		$	9,715	$	269,747		$	9,466

During the nine months ended September 30, 2025, the Company recorded measurement period adjustments related to the acquisitions of WK Germany KG, GmbH and WK Asia-Pacific Pte. Ltd. (collectively, "WK Group") and Verantis Environmental Solutions Group ("Verantis"), as discussed in Note 15, resulting in increases to goodwill as of the acquisition dates of $10.5 million and $10.3 million, respectively. These adjustments relate to working capital and the associated tax balances. During the nine months ended September 30, 2025, the Company completed its acquisition of Profire Energy, Inc. ("Profire"), as discussed in Note 15, and its divestiture of its Fluid Handling business, also known as its Global Pump Solutions business, as discussed in Note 16.

Finite life intangible assets as of September 30, 2025 and December 31, 2024 consisted of the following:


	September 30, 2025				December 31, 2024
(in thousands)	Cost		Accum. Amort.		Cost			Accum. Amort.
Technology	$	22,314	$	14,586	$	20,614		$	14,769
Customer lists		140,337		59,214		127,354			70,045
Tradenames		17,660		5,615		18,530			6,392
Foreign currency adjustments		207		117		(2,770	)		(1,528	)
Total intangible assets – finite life	$	180,518	$	79,532	$	163,728		$	89,678

Finite life intangible asset activity for the nine months ended September 30, 2025 and 2024 was as follows:


	Nine months ended September 30,
(in thousands)	2025			2024
Intangible assets – finite life, net at beginning of period	$	74,050		$	50,461
Amortization expense		(12,177	)		(6,478	)
Acquisitions		41,810			7,250
Divestiture		(4,029	)		—
Foreign currency adjustments		1,332			314
Intangible assets – finite life, net at end of period	$	100,986		$	51,547

Amortization expense of finite life intangible assets was $6.1 million and $2.2 million for the three months ended September 30, 2025 and 2024, respectively, and $12.2 million and $6.5 million for the nine months ended September 30, 2025 and 2024, respectively. Amortization over the next five years for finite life intangibles is expected to be $4.3 million for the remainder of 2025, $16.3 million in 2026, $15.4 million in 2027, $14.5 million in 2028, $12.8 million in 2029, and $40.5 million thereafter. The weighted average amortization periods for finite life intangible assets was 8.1 years as of September 30, 2025, inclusive of weighted average amortization periods for technology, customer lists, and tradenames of 5.9, 8.5, and 7.5 years, respectively.

Annually during the fourth quarter, or more often as circumstances require, the Company completes an impairment assessment of its goodwill and indefinite life intangible assets at the reporting unit level. As a part of its annual assessment, the Company first qualitatively assesses 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 a reporting unit is less than its carrying amount. 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, the Company does not need to quantitatively test for impairment for that reporting unit. 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.

Additionally, property, plant and equipment and finite life intangible assets are reviewed whenever events or changes in circumstances occur that indicate possible impairment. If events or changes in circumstances occur that indicate possible impairment, the impairment review is based on an undiscounted cash flows analysis at the lowest level at which cash flows of the long-lived assets are largely independent of other groups of assets and liabilities. When impairment is indicated, the estimated future cash flows are then discounted to determine the estimated fair value of the asset or asset group and an impairment charge is recorded for the difference between the carrying value and the estimated fair value.

The Company did not identify any triggering events that would require an interim impairment assessment, or record an impairment of goodwill, indefinite life intangible assets, finite life intangible assets or property, plant and equipment during the three or nine months ended September 30, 2025.

The Company’s assumptions about future conditions important to its assessment of potential impairment are subject to uncertainty, and the Company will continue to monitor these conditions in future periods as new information becomes available, and will update its analysis accordingly.

7. Accrued Expenses

Accrued expenses as of September 30, 2025 and December 31, 2024 consisted of the following:


(in thousands)	September 30, 2025		December 31, 2024
Compensation and related benefits	$	15,330	$	12,274
Contract liability		14,788		9,746
Accrued warranty		5,405		4,558
Short-term operating lease liability		3,763		4,262
Other		21,346		16,688
Total accrued expenses	$	60,632	$	47,528

8. Senior Debt

Debt as of September 30, 2025 and December 31, 2024 consisted of the following:


(in thousands)	September 30, 2025			December 31, 2024
Outstanding borrowings under Credit Facility (defined below)
Revolving credit facility	$	216,300		$	214,200
Total outstanding borrowings under the Credit Facility		216,300			214,200
Outstanding borrowings under the joint venture term debt		6,060			7,297
Other borrowings		561			—
Unamortized debt discount		(2,013	)		(2,617	)
Total outstanding borrowings		220,908			218,880
Less: current portion		(1,928	)		(1,650	)
Total debt, less current portion	$	218,980		$	217,230

Scheduled principal payments under the Credit Facility and joint venture term debt are $0.4 million for the remainder of 2025, $1.9 million in 2026, and $3.9 million in 2027. The remaining $216.3 million will be paid upon maturity in 2029.

Credit Facility

On October 7, 2024, the Company entered into the Third Amended and Restated Credit Agreement (the “Credit Agreement”), among the Company, its subsidiaries from time to time party thereto, the lenders from time to time party thereto (the “Lenders”) and Bank of America, N.A., as administrative agent (the “Agent”), which amended and restated in its entirety the Company’s Second Amended and Restated Credit Agreement, dated as of June 11, 2019, among the Company, its subsidiaries from time to time party thereto, the lenders from time to time party thereto and the Agent. The Credit Agreement provides for a senior secured revolving credit facility in an initial aggregate principal amount of up to $400.0 million (the "Credit Facility”).

As of September 30, 2025 and December 31, 2024, $24.4 million and $18.9 million of letters of credit were outstanding, respectively. Total unused credit availability, in consideration of borrowing limitations, under the Company’s Credit Facility was $109.1 million and $1.0 million at September 30, 2025 and December 31, 2024, respectively. Revolving loans may be borrowed, repaid and reborrowed until October 7, 2029, at which time all outstanding balances of the Credit Facility must be repaid.

The Credit Facility accrues interest (a) with respect to base rate loans, at an annual rate equal to an applicable rate of between 0.75% and 2.25% (fluctuating based on the Company’s Consolidated Net Leverage Ratio), plus a rate equal to the highest of (1) the Agent’s prime rate, (2) the federal funds rate plus one-half of 1.00%, (3) Daily Simple SOFR (as defined in the Credit Agreement) plus 1.00% and (4) 1.00%, (b) for all other loans, at an annual rate equal to an applicable rate of between 1.75% and 3.25% (fluctuating based on the Company’s Consolidated Net Leverage Ratio), plus a rate determined based on the denominated currency and, as applicable pursuant to the Credit Agreement, whether the Company has elected for interest on such loans to accrue at a daily rate or a term rate: (a) for term rate loans, if denominated (1) in U.S. Dollars, Term SOFR (as defined in the Credit Agreement inclusive of a 0.10% per annum adjustment), (2) in euros, EURIBOR, (3) in Canadian dollars, the Term CORRA Rate (as defined in the Credit Agreement) plus 0.29547% for a one-month interest period and 0.32138% for a three-month interest period or (4) in a currency other than (1)-(3), the rate per annum as designated with respect to such currency at the time such currency was approved by the Agent and the other Lenders or, if such rate is unavailable on any date of determination for any reason, a comparable or successor rate approved by the Agent, and (b) for daily rate loans, if denominated (1) in U.S. dollars, Daily Simple SOFR (as defined in the Credit Agreement inclusive of a 0.10% per annum adjustment), (2) in pounds sterling, a rate per annum equal to SONIA (as defined in the Credit Agreement) plus 0.0326% per annum or (3) in a currency other than (1) or (2), the rate per annum as designated with respect to such currency at the time such currency was approved by the Agent and the other Lenders or, if such rate is unavailable on any date of determination for any reason, a comparable or successor rate approved by the Agent.

Interest on Base Rate loans is payable quarterly in arrears on the last day of each calendar quarter and at maturity. Interest on Term SOFR rate loans is payable on the last date of each applicable Interest Period (as defined in the Credit Agreement), but in no event less than once every three months and at maturity. The weighted average stated interest rate on outstanding borrowings was 7.02% and 7.07% at September 30, 2025 and December 31, 2024, respectively. The effective interest rate was 7.12% and 7.82% at September 30, 2025 and December 31, 2024, respectively.

With respect to financial covenants, the Company is required to maintain 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 Agreement) not greater than 3.00 to 1.00, in each case as of the last day of each fiscal quarter of the Company. At the election of the Company and subject to certain restrictions contained in the Credit Agreement, following the occurrence of a Permitted Acquisition (as defined in the Credit Agreement) involving aggregate consideration of $15.0 million or more, such maximum Consolidated Net Leverage Ratio and Consolidated Secured Net Leverage Ratio may be increased to 4.50 to 1.00 and 3.50 to 1.00, respectively, for the fiscal quarter in which such Permitted Acquisition is consummated and the subsequent three fiscal quarters of the Company. In the first quarter of 2025, the Company entered into an Elevated Ratio Period resulting in a maximum Consolidated Net Leverage Ratio of 4.50 and Consolidated Secured Net Leverage Ratio of 3.50. This Elevated Ratio will be in effect for a maximum of four quarters, after which the Consolidated Net Leverage Ratio will revert to 4.00 and the Consolidated Secured Net Leverage Ratio will revert to 3.00. The Company is also required to maintain a Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement) as of the last day of each fiscal quarter of the Company of not less than 1.25 to 1.00.

The Company has granted a security interest in substantially all of its assets to secure its obligations pursuant to the Credit Facility. The Company’s obligations under the Credit Facility are guaranteed by the Company’s domestic subsidiaries and such guaranty obligations are secured by a security interest on substantially all the assets of such subsidiaries, including certain real property. The Company’s obligations under the Credit Facility may also be guaranteed by the Company’s material foreign subsidiaries to the extent no adverse tax consequences would result to the Company.

As of September 30, 2025 and December 31, 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 Effox-Flextor-Mader, Inc. joint venture ("EFM JV"), for which the Company holds 63% of the equity, 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. As of September 30, 2025 and December 31, 2024, $6.1 million and $7.3 million was outstanding under the loan, respectively. Principal will be paid back to the lender monthly with the final installment due by February 27, 2027. Interest is accrued at the per annum rate based on EFM JV's choice of the 1/3/6 month Term SOFR rate plus 3.25%, with a floor rate of 3.75%. Interest is paid monthly on the last day of each month. The interest rate at September 30, 2025 and December 31, 2024 was 7.27% and 7.96%, respectively. As of September 30, 2025 and December 31, 2024, the EFM JV was in compliance with all related financial and other restrictive covenants under this loan agreement. This loan balance does not impact the Company’s borrowing capacity or the financial covenants under the Credit Facility. As of September 30, 2025, there were $17.9 million in current assets (including $2.4 million of cash, $8.5 million of accounts receivable, and $4.6 million of inventories), $24.6 million in long-lived assets (including $24.1 million of goodwill and intangible assets), and $15.3 million in total liabilities (including $6.1 million of debt and $5.5 million of accounts payable and accrued expenses) related to the EFM JV included in the Condensed Consolidated Balance Sheets. As of December 31, 2024, there were $16.2 million in current assets (including $2.9 million of cash, $7.9 million of accounts receivable, and $3.9 million of inventories), $25.4 million in long-lived assets (including $24.8 million of goodwill and intangible assets), and $14.0 million in total liabilities (including $7.3 million of debt and $4.1 million of accounts payable and accrued expenses) related to the EFM JV included in the Consolidated Balance Sheets. For the three months ended September 30, 2025 and 2024, the EFM JV accounted for $14.3 million and $10.7 million in revenue, respectively, and $0.8 million and $1.2 million in net income, respectively, included in the Company's results. For the nine months ended September 30, 2025 and 2024, the EFM JV accounted for $37.7 million and $34.6 million in revenue, respectively, and $3.2 million and $3.9 million in net income, respectively, included in the Company's results.

Foreign Debt

The Company has a number of bank guarantee facilities and bilateral lines of credit in various foreign countries currently supported by cash, letters of credit or pledged assets and collateral under the Credit Facility. The Credit Facility allows letters of credit and bank guarantee issuances of up to $120.0 million from the bilateral lines of credit secured through pledged assets and collateral under the Credit Facility. As of September 30, 2025 and December 31, 2024, $38.7 million and $45.9 million in bank guarantees were outstanding, respectively, inclusive of $1.1 million and $1.1 million in outstanding bank guarantees as of September 30, 2025 and December 31, 2024, respectively, under a Euro-denominated bank guarantee agreement held by a subsidiary of the Company located in the Netherlands and secured by local assets, as well as $2.1 million and $2.1 million in outstanding bank guarantees as of September 30, 2025 and December 31, 2024, respectively, under Yuan-denominated bank guarantee agreements held by a subsidiary of the Company located in China and secured by local assets. Additionally, a subsidiary of the Company located in Germany held a bank loan of $0.6 million as of September 30, 2025.

9. Earnings per Share

The computational components of basic and diluted earnings per share for the three months ended September 30, 2025 and 2024 are as follows:


	Three months ended September 30,
(in thousands)	2025		2024
Numerator (for basic and diluted earnings per share)
Net income attributable to CECO Environmental Corp.	$	1,499	$	2,086

Denominator
Basic weighted-average shares outstanding		35,360		34,967
Common stock equivalents arising from stock options and restricted stock awards		1,037		1,522
Diluted weighted-average shares outstanding		36,397		36,489

The computational components of basic and diluted earnings per share for the nine months ended September 30, 2025 and 2024 are as follows:


	Nine months ended September 30,
(in thousands)	2025		2024
Numerator (for basic and diluted earnings per share)
Net income attributable to CECO Environmental Corp.	$	46,993	$	8,079

Denominator
Basic weighted-average shares outstanding		35,226		34,910
Common stock equivalents arising from stock options and restricted stock awards		1,323		1,413
Diluted weighted-average shares outstanding		36,549		36,323

Options and restricted stock units included in the computation of diluted earnings per share are calculated using the treasury stock method. For each of the three months ended September 30, 2025 and 2024, zero, and for the nine months ended September 30, 2025 and 2024, 0.3 million and 0.1 million, respectively, of outstanding options and restricted stock units were excluded from the computation of diluted earnings per share due to their having an anti-dilutive effect.

Once a restricted stock unit vests, it is included in the computation of weighted average shares outstanding for purposes of basic and diluted earnings per share.

Common Stock Repurchase

On May 10, 2022, the Company's Board of Directors authorized a share repurchase program under which the Company was able to purchase up to $20.0 million of its outstanding shares of common stock through April 30, 2025. The authorization permitted the Company to repurchase shares in the open market, through accelerated share repurchases, block trades, Rule 10b5-1 trading plans or through privately negotiated transactions in accordance with applicable laws, rules and regulations. For the three and nine months ended September 30, 2024, the Company repurchased approximately zero and 230,000 shares under the program, respectively, for a cost of zero and $5.0 million, respectively. There were no shares repurchased under the program during the three or nine months ended September 30, 2025. This program expired during the second quarter of 2025.

10. Share-Based Compensation

The Company recognized $3.3 million and $1.9 million of expense related to share-based compensation during the three months ended September 30, 2025 and 2024, respectively, and $9.5 million and $5.8 million during the nine months ended September 30, 2025 and 2024, respectively, which was measured based upon the fair value of the awards at the grant date.

The Company granted approximately 323,000 and zero restricted stock units during the three months ended September 30, 2025 and 2024, respectively, and approximately 913,000 and 341,000 restricted stock units during the nine months ended September 30, 2025 and 2024, respectively. In addition, the Company granted 67,000 and 25,000 stock options during the nine months ended September 30, 2025 and 2024, respectively. No stock options were granted during the three months ended September 30, 2025 and 2024.

There were 300,100 and 8,000 options exercised during the three months ended September 30, 2025 and 2024, respectively, for which the Company received $3.8 million and $0.1 million, respectively, in cash. The intrinsic value of options exercised during the three months ended September 30, 2025 and 2024 was $11.2 million and $0.1 million, respectively. There were 300,600 and 28,000 options exercised during the nine months ended September 30, 2025 and 2024, respectively, for which the Company received $3.8 million and $0.4 million, respectively, in cash. The intrinsic value of options exercised during the nine months ended September 30, 2025 and 2024 was $11.3 million and $0.3 million, respectively.

11. Pension and Employee Benefit Plans

The Company sponsored a non-contributory defined benefit pension plan for certain union employees. The plan was funded in accordance with the funding requirements of the Employee Retirement Income Security Act of 1974. The Company presents the components of net periodic benefit cost within “Other (income) expense, net” on the Condensed Consolidated Statements of Income. Retirement plan expense is based on valuations performed by plan actuaries as of the beginning of each fiscal year. The components of the pension plan expense consisted of the following:


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2025		2024		2025	2024
Interest cost	$	—	$	304	$

CECO ENVIRONMENTAL CORP 10-Q