Good morning and welcome to the CECO Environmental Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Matt Eckl, Chief Financial Officer of CECO Environmental. Please go ahead.

Thank you for joining us on the CECO Environmental first quarter 2019 conference call. On the call today is Dennis Sadlowski, Chief Executive Officer, and myself, Matt Eckl, Chief Financial Officer. Before we begin, I'd like to note that we've provided a presentation to help guide our discussion. The call will be webcast along with our earnings presentation on our website at cecoenviro.com. The presentation materials can be accessed through the Investor Relations section of the website. I'd also like to caution investors regarding forward-looking statements. Any statements made in today's presentation that are not based on historical facts are forward-looking statements. Such statements are based on certain estimates and expectations and are subject to a number of risks and uncertainties. Actual future results may vary materially from those expressed or implied by the forward-looking statements. We encourage you to read the risks described in our SEC filings on Form 10-K for the year ended December 31st, 2018. Except to the extent required by applicable securities laws, we undertake no obligation to update or publicly revise any of the forward-looking statements that we make here today, whether as the result of new information, future events, or otherwise. Today's presentation will also include references to certain non-GAAP financial measures. We've reconciled the comparable GAAP and non-GAAP numbers in today's press release as well as the supplemental tables in the back of the slide deck. And with that, I'll turn the call over to Dennis.

Good morning and thank you for joining us on our first quarter 2019 call. I'll begin today by highlighting the exceptional execution and solid results for the first quarter along with several customer wins. These customer wins tell the story of CECO's attractive value proposition and market differentiators that are helping us lead in the emerging low-carbon economy. After that I'll summarize the outlook of our generally healthy end-markets. Then I'll hand it over to Matt who will cover the first quarter's financial details. Before taking your questions, I'll offer some initial thoughts on how our team's systematic execution of our 4-3-3 operating strategy has prepared us to invest in growth ideas to accelerate our shareholder value creation. I'll start with slide 3 with a reminder of what we do. In a nutshell, we're building a leadership position in industrial air quality and fluid handling. At CECO, we're providing solutions for a cleaner safer world through reduced emissions of chemicals and particulates to productive fluid handling and process water treatment designs. Ultimately, our biggest target is clean air. We are in the enviable position at the intersection of clean air technologies and energy efficiency with a massive potential going forward. Turning to slide 4, we launched our updated for 4-3-3 operating strategy with a clear value proposition to enable the growth of our industrial customers with clean, safe, and more efficient solutions that protect our shared environment. When the strategy was launched in late 2017, we announced a wide range of commitments and initiatives to fundamentally transform our focus in the way we do business with the premium placed on organic growth. The fundamental components of our 4-3-3 operating strategy featured our four value creation enablers to transform us into a nimble responsive and market-oriented organization; a laser focus on…

Thanks, Dennis. I agree with Dennis that there's a lot to like about the way we kicked off 2019. Our strong start was more the momentum from last year. It was skillful execution by our team and leveraging our compelling market differentiators. So let's start with slide 9, which breaks down orders and revenue by sector. There are some interesting points to be made here but none more so than the exceptional execution that has led CECO to outpace the market on orders growth by a factor of two. I'll discuss that more later when I get to our three year financial targets. Orders were up 33.7% sequentially and 7.7% year-over-year. We mentioned on our last call that the market and our sales pipeline were healthy. So it's no surprise but still fantastic news. Industrial orders led the way in the first quarter with compelling win in engineered woods and semiconductor markets. These wins highlight the diversity of our customer base. Account management revamped incentive targets, new business and product development adds and a simplified outside-in organization demonstrates that our transformational efforts are taking shape. Energy orders were up sequentially 20% and down 3% year-over-year. Both Midstream and Power Gen nat-gas were strong in the quarter with refinery lower year-over-year as compared with the big rebound we had in Q1 of 2018. This market is still thriving with a solid pipeline. I continue to be pleased by the growth of our Power Gen orders. Our nat-gas business that continues to take share in a still challenging market that is starting to show improvement. Our Aarding and Peerless teams have been skillful in navigating the longest downturn in thermal Power Gen history. And as Denis mentioned, we appear to be coming through the other end with a variety of new projects…

Thanks, Matt. Turning to slide 16, I want to quickly recap our first quarter execution and then look ahead over the rest of 2019 and after that we'll open the call to your questions. The strength and momentum we've built throughout 2018 carried right over into the first quarter of this year. New orders rebounded nicely totaling $97 million with a book to bill of 1.13. Revenue and profits improved significantly year-over-year. At $86 million revenue was up 27% year-over-year. Our gross margins go back to the plus side of the 33% level that we saw for most of last year and we generated a solid quarter of double-digit EBITDA margins. Our end markets remain large, diversified and generally healthy across the board. For the first time in a couple of years, we're seeing some green shoots sprouting in the power generation segment and I like the progress our teams are making to capitalize on the opportunities. As Matt has shared the first quarter saw us make further progress towards meeting our three year financial targets. For the remainder of 2019, we'll be intensifying our attention on investments and growth ideas that are aimed at accelerating customer and investor value creation. In short, we'll be capitalizing on our competitive differentiators in the emerging low carbon economy that is fueling our biggest end markets. We plan to aggressively pursue market share in our large and attractive end markets with air quality becoming a bigger and bigger target. The desire for clean air is clearly a global priority within the sustainability macro trend. Our improving strength and clear focus give us the confidence that we can continue to generate cash from operations to maintain a healthy balance sheet and be prepared to seize opportunities that help us accelerate growth. And finally, we'll be prudently investing in innovative ideas and targeted M&A to improve our leading position in air quality. We have to be ready to meet the increasing demands of our traditional customers and capable of taking on the demands of breakthrough technologies. 2019 is off to a strong start and I believe that it will be an exciting year with accelerated growth and new opportunities. I'll now open the call for your questions. Operator?

Thank you. [Operator Instructions] Our first question comes from Tate Sullivan with Maxim Group. Please go ahead.

Hi. Thank you. Good morning. And thanks for all the detail. Dennis, you mentioned targeted M&A, does that mean you're mostly done with your portfolio optimization strategy and potential sales?

Yeah, if your question is about the current portfolio, we absolutely like the portfolio we have. I think it's given us the focus that we need and you can see that demonstrated in the numbers and the growth and in the returns that we're generating. So as we continue to make progress, generate continued growth in earnings, generate good cash flows what we are looking at is -- how do we continue to build on that go-to resource that will be coming for our industrial and energy customers and where can we add to solving more problems for customers with targeted M&A.

Okay. Thank you. And I'm looking at slide 7 and you provided some context a couple of observations. It looks like on the natural gas and follow-up to earlier comments, it's still flat outlook but maybe slightly improved based on your comment on green shoots is that correct? And then separately, can you talk about the industrial solutions growth and if that's including the different kind of cyclones or similar cyclones to what you do in refineries?

Yeah. So I'll start with your question on the end markets. Again, we have a very diversified set of end markets. They're mostly healthy growing. Our pipeline is growing substantially in terms of what's in our sales pipeline. And so we're very optimistic about how things are going. Specifically on power gen, yes, we absolutely are seeing some projects that I mentioned on our last quarter call beginning to sprout through with new gigawatt additions coming through the major players. GE reported an uptick and while the numbers are still relatively small, it's really a good sign that the market is coming back in terms of power-gen. I think your second question was around industrial? And …

The growth in industrial, yes.

Yeah, we -- after what was a little bit of a disappointment in the fourth quarter the team just blew it out this quarter new orders on several key wins across a variety of market segments, continuing to restructure and focus that -- the Group in total to be a full solution provider across the gamut of our product offerings there that largely address air quality in the industrial production arena all around the world.

Okay. Great. Thank you very much. I will hope back in the queue.

Thanks, Tate.

Our next question comes from Amit Dayal with H.C. Wainwright. Please go ahead.

Good morning, Dennis. Good morning, Matt.

Good morning, Amit.

Good morning, Amit.

On the booking and backlog front, was this largely industrials that drove the bounce back? And going forward, do you think industrials will continue to remain stronger versus maybe the other segments or do you see sort of power-gen or maybe others picking up some of the backlog sort of going forward?

Yeah. So over the last resurgence and focus on organic growth, I think we're getting good traction across all of our teams. The market that we're looking at it can be a little bit lumpy, both in industrial and the energy end markets. But both teams are very active, very visible in the market and doing the thing. It was a fantastic bookings quarter for the industrial team. I have to say kind of a breakout. It's kind of double almost what we've seen in some other parts of the activity in prior quarters. Can we continue to hit that? I'm not sure exactly hit those numbers, but we're looking at a larger pipeline better execution have added people and focus. So, we're still very optimistic that we'll continue to get good output from all three of our segments.

Yeah, that was what I was going to ask next, Dennis. Organic order growth was 34% sequentially, do you think this may be sort of one-off for this quarter, or maybe trends at similar levels or at least sustained levels could come through over the next few quarters?

Yeah. So, you know, what I think the -- if I say the simple message is that the markets are still large, they're growing, we've said before, maybe at slightly slower rate than in prior year in some. But we are seeing those pockets in the power-gen market of opportunities. So, I think that we are looking at a very good market and with the team continuing to execute, I have nothing, but optimism for our ability to continue to drive the growth trend that we've laid out ahead of the company. At least for the near-term, we're seeing a lot of good activity. It's always a little bit -- on the project side of the business a little bit lumpy. So hard to specifically say when and where individual orders might come in, but we're getting good follow-up on our aftermarket teams as well. So, I'm pretty pleased across the board.

Can you talk a little bit about how sales resources have been halved into say the industrial and power-gen segments which are almost 50% of revenues in 1Q versus the other segments?

Maybe I didn't understand your question. Was it -- what kind of resources are we shifting into the growth areas there?

Your focus on -- yeah, is there a bigger focus on say power-gen and industrial from a sales efforts perspective versus the other segments, or are you just seeing more traction in these segments from your results -- from your efforts?

Well, I think across the board, over the last 18 months, we have continued to drive simplification and try and do so in a way that takes G&A out of the business and then reshape that and invest that into market facing activities, those are both people, account management, sales training, marketing, both digital and active face-to-face marketing programs; and all of that is giving us better visibility in getting our sales teams then more at that. And quite frankly, they're very good, very deep with their application capability and we had a number of good closers. So all of that is where we're shifting -- have shifted resources from kind of back office to front, that we think is helping drive the organic growth. We are actually now in a way, where with that outside-in approach, with more customer contact, also reshaping that for what is tomorrow's needs and looking at innovation and ideas as to how we also develop new products that can help tomorrow's customers as well and making some ads, as you heard, maybe in the past, with the new CTO, adding some other resources there on the product side, in order to make sure that we have a good strong future and beyond what we're seeing in today's market activity.

Understood. That’s all I have, guys. Appreciate it. Thanks so much.

Yeah. Thanks, Amit.

[Operator Instructions] At this time, there are no further questions. And this concludes our question-and-answer session. I would now like to turn the conference over to Denis Sadlowski, Chief Executive Officer of CECO Environmental. Please go ahead.

Well, thanks again for joining the first quarter call. In closing today's call, I'd like to give a shout out as well to the hundreds of CECO associate, especially Jeremias Schreyer and Kevin Deters for leading the effort, who are part of our CECO C.A.R.E.S Earth Day initiative a few weeks ago. We had 25 teams from 25 locations in six countries give their personal time to work on environmental sustainability projects from planting trees to cleaning up nature parks and beaches. We worked hard, we had some fun and we made a difference. Their efforts speaks volumes about the culture and genuine commitment to CECOs mission of enabling industrial companies to grow with clean, safe and more efficient solutions that protect our shared environment. It was a great quarter. We're pleased with the results and I look forward to speaking with all of you again next quarter.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.