Good morning, and welcome to the CECO Environmental Q3 2023 Earnings Conference Call. [Operator Instructions] Please note, this is being recorded. I would now like to turn the conference over to Steven Hooser, Investor Relations. Please go ahead.

Thank you, Anthony, and thank you for joining us on the CECO Environmental Third Quarter 2023 Earnings Call. On the call with me today is Todd Gleason, Chief Executive Officer; and Peter Johansson, Chief Financial and Strategy Officer. Before we begin, I'd like to note that we have provided a slide presentation to help us guide our discussion. The call will be webcast, along with our earnings presentation, which is 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 fact 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 differ materially from those expressed or implied by the forward-looking statements. We encourage you to read the risks described in our SEC filings included on Form 10-K for the year ended December 31, 2022. Except to the extent required by applicable securities laws, we undertake no obligation to update any publicly revised or any forward-looking statements that we make here today whether as a result of new information, future events or otherwise. Today's presentation will also include references to certain non-GAAP financial measures. We provide the comparable GAAP and non-GAAP numbers in today's press release, and they're provided in the non-GAAP reconciliations in the supplemental tables in the back of the slide presentation. And with that, I'd now like to turn the call over to Chief Executive Officer, Tom Gleason. Todd?

Thanks, Stephen, and thank you for your continued support and interest in CECO. I'm going to go ahead and start with Slide #3, which is entitled "Q3 2023 Earnings Highlight. As we highlighted in today's press release, CECO delivered multiple financial records during the third quarter. Our quarterly and year-to-date financial performance showcased strong continued growth, which is the result of our world-class teams working hard to deliver for our global customers every day. Thank you to Team CECO for your customer focus, accountability and all of your high performance. We will continue to invest in our people, our processes and our solutions to ensure we meet or exceed customer requirements with respect to deliver quality and on-time success. Now, let's review some of our third quarter highlights. The section on the top left of the slide captures some of the records we produced during the quarter. It is an impressive list of achievements I am pleased to share that our third quarter revenues represented the highest quarterly sales in the company's history. The previous company record for sales was last quarter in Q2, so we continue to maintain our steady sales growth progress. And even with record sales, we were still able to increase our backlog to produce yet another record backlog quarter. This is the fourth quarter in a row with record backlogs, which continues to support future growth projections. We also delivered the highest gross profit dollar level in our history, benefiting from the tremendous sales volumes. Importantly, we generated record free cash flows for any quarter as we executed very well on our working capital management. Transitioning from the records we produced in the quarter, please see the highlighted comments on the top right section of the slide. While records are great, they are inherently backward-looking.…

Thank you, Todd. I'm very pleased today to be able to present to all in attendance another set of solid financial results, results that confirm our confidence that CECO is still on track to deliver another strong full year of performance. And with that, please turn to Slide #8 with me. On this slide, I'll present a more detailed picture of Q3 2023 results. Orders in the quarter of $145.3 million were the fifth highest for any quarter in company history and the best third quarter on record. CECO's trailing 12-month order rate is now greater than $600 million on a run rate basis, an all-time high. With year-to-date orders of approximately $455 million, vesting the prior high of $377 million delivered in 2022, demonstrating continued strong conversion of CECO's growing opportunity pipeline, examples of which Todd described for you in his prior section. 2023 revenue of $149.4 million, a 38% increase over Q3 2022 and a 15% improvement sequentially, were the highest for any quarter in company history, continuing a 4-quarter trend of record-setting revenue [prints], benefiting from continued strong conversion of CECO's growing backlog and the beneficial impact of the Wakefield Acoustics, Transcend Solutions and Kemco Systems acquisitions. This result increases CECO's trailing 12-month revenue to greater than $500 million, another all-time high and has delivered year-to-date revenues of approximately $390 million. I'd like to now touch on gross profit. Gross profit of $43 million was a 33% increase over the third quarter of 2022 and was a record dollar level resulting from higher shipments. Gross profit margins in the quarter did decline, however, by 100 basis points versus the prior year due to some lingering supply chain challenges impacting a small number of significant projects, projects which we expect to have behind us or have concluded in…

Thanks, Peter. A lot of great detail with respect to our financials and also various insights into our performance. Okay. We're going to go to the final section, which includes our summary slide. Please turn to Slide #16. We have already outlined our revised guidance for 2023 and the initial outlook for 2024. And what they have in common is double-digit growth mindset. Over the past few years, we have outlined, initiated and executed a focused growth strategy. That will continue. We also started to invest in new commercial leadership, new growth models and structure our program to expand market access. The results have been, and we expect will continue to be, very strong. So we are benefiting from strategy, process, structure and talent, and we are benefiting from our leadership position in industries that are growing as a result of global expansion drivers that are outlined on this slide, re-shoring industrial production, including high-tech manufacturing and the need for advanced metals and components, global infrastructure investment, new capital going into clean and green energy, AKA the energy transition, and ongoing regulation, especially in environmental areas. As the target market size visual demonstrates on this slide, a few years ago we were targeting between $1 billion to $1.5 billion of market opportunities. And today, we are more than targeting. We are going after $3 billion or more of sales opportunities. As they say, more at-bats equals more hits. We are not comprising our leadership position in markets. We are just growing our share or participating in new markets both organically and through strategic accretive M&A. We have great opportunities in front of us, opportunities to do more beyond equipment, such as more services and aftermarket solutions. We have grown our international sales and believe we have a tremendous opportunity to…

[Operator Instructions] Our first question will come from Aaron Spychalla with Craig-Hallum.

Maybe starting first on just backlog and kind of the order pipeline. You kind of talked about it a little bit, but are you seeing any kind of cancellations, pushouts there? And then maybe could you just highlight some of the areas of strength or where you might be seeing some moderation, whether verticals or geographies?

This is Todd. Well, Peter mentioned, there's no cancellations. By the way, that's something we don't normally see any. I mean, we rarely have cancellations, I'll just say that, as a company. Even just to remind maybe or to educate somebody that might be new, even during COVID, we had very few cancellations. And in fact, of the 2% to 3% of our backlog that did cancel, we successfully rebooked those orders within 12 to 18 months after they were canceled. So they were actually more pauses than they were cancellations. So we're not seeing any. We don't expect to see anything material. On occasion, there will be a program that gets delayed, and therefore, we have to remove it from our backlog. We call that a cancellation. But rarely do we see something canceled for any other reason other than a project delay. So we're not seeing that. I think we continue to see strength in the areas that we highlighted. Just the overall broad industrials we feel good about. There are markets that have ebbed and flowed. You have automotive, which has a couple of quarters where it might be softer. We've highlighted that, in 2022, we had incredible growth in, let's say, aluminum bev can and, now in 2023, that market's softened. And we've sort of replaced that strong market with EV battery or another industrial market of expansion around semiconductor builds. So for us, Aaron, it just continues to pay to be nimble, move into markets that we think are growing, and we'll be there for the other markets when they come back. [Technical Difficulty] Sorry about that. We had a technical glitch, we thought. So Peter will continue.

And Aaron, as we've discussed in the past, one of the key features of our commercial model and how it kind of derisks our approach is that we are a solution seller. We don't target markets. We target customers across a various range of end markets that have a problem that our solution is uniquely and adeptly targeted solving. And as a result, if a market trends down, for instance, beverage can production; which is now out of its buying window, trends down; our team that sells solutions to handle and remove all the organic compounds, turn their attention to markets that are in the buying window. And we ensure that the number of projects that that team is focused on is larger and more interesting than what they may have focused on in prior periods. And Todd highlighted a very interesting one, with the B-21 bomber program. And so that, for us, is a new application or a new customer, but it's a VOC removal solution using thermal oxidizers, which you've been doing for, I don't know, 50, 80 years. In the past, the company would probably not have targeted that customer because the approach was very end market-specific and not solutions and application-driven.

In fact, Aaron, and I'd say maybe defense overall could be an interesting market for us, could be a more impactful market for us in 2024, and that could provide upside. But we're certainly well-positioned, and we continue to push for the best opportunities in that space.

And then just second on margins. You touched on a little bit of the supply chain challenges in mix. Can you just talk about a little more detail on what those were and if those are behind us from a supply chain perspective, and then just some of the confidence that you have in the margin targets as we move forward?

Yes. I'd start by saying probably nothing new from a supply chain perspective. We probably just accelerated pushing through some of our more challenges in the quarter to get them behind us, which gives us visibility to strengthening margins already in the fourth quarter as we are in it, obviously, and that helps to support our outlook for the balance of the year as we head into next year. And so for us, it was just accelerating getting through some of our challenging projects that have just been always sort of hampered probably from the beginning on some supply chain challenges. Getting those behind us in the third quarter was a good thing. But otherwise, look, most companies are at least highlighting some challenge. It could be just getting freight and logistics. It could be getting access to certain components in electronics. It's been a choppy environment for 1.5 years or more now. I feel like we probably just wanted to accelerate and get a lot of that behind us.

Our next question will come from Rob Brown with Lake Street Capital Markets.

You started to get some good operating leverage in the quarter. I just want to get a sense of where you think you can take your EBITDA margins as your growth plays out here, and you really get the operating leverage from these acquisitions and scaling that you're getting.

We would have gotten better operating margins, Rob, and we're confident in our ability to get gross margins back up to the levels that they were before. But let me just be clear that having gross margins in the quarter below 30% is not where we're going to be and not where we're heading and not the time and energy that we're putting into productivity, price and good operating excellence, and also the margins that we believe that we're booking. Now look, there's always mix and there's some large important customers that, just in the market that they are in, have slightly lower margins, but we really like our ability to get our gross margins back up. Like I just said with Aaron and I'll just reiterate here, we pushed through to get a lot of our lower gross margin projects executed in the first 3 quarters of the year, including in the third quarter. That had a bit of a negative mix to our margin as well as some of the supply chain challenges. But then back, I think, to the main focus of your point or to your comment, Rob, and that is, look, with our backlogs where they're at and with the margins that we know are in our backlog, it starts with volumes at the top line. It moves on through higher gross margins that are going to be coming through our pipeline and, therefore, positively impacting our P&L on a sequential and year-over-year basis. And then that volume we'll really be able to convert at a higher EBITDA margin level as we go forward into the fourth quarter of this year and into next year. So we're pleased that EBITDA margins were up 156 basis points, I think, exactly year-over-year. Could have been higher, and our gross margin has been where we know they're going to go. So we're confident in getting that margin expansion. Look, I think we've given a long-term target that, in the next few years, we expect and we're working hard to produce EBITDA margins that are in the teens, potentially in the mid-teens in the next few years. We're committed to that. And the type of value creation that we believe we can have from double-digit top line growth and then stronger double-digit EBITDA dollars and margin growth will be very profound with respect to shareholder value creation. So our long-term goals are to get those EBITDA margins up into the mid-teens. We're committed to it.

And then on the acquisitions you've been doing, you talked pretty positively about kind of doubling the level of business in Kemco in particular. But could you give us a sense of how you plan to get the business to double and what kind of drivers you can do to make that happen?

Yes. Look, Kemco is very early in our portfolio. Peter can expand on something specific to advancing any of our businesses. But I look at the 8 acquisitions that we've done over the last handful of years, we have already experienced with a good portion of them already doubling. I go back to acquisitions we did when I first joined, the strength of that acquisition helped lead the way towards top line expansion; and heck, even an acquisition we did earlier this year. We believe within 12 months, we can already double it, and that's the Wakefield Acoustics acquisition, just really helping to advance, as Peter pointed out in the prepared remarks, with some capital investment, capital expansion, ability to add resources and help Kevin, who does a fantastic job running our Wakefield Acoustics business, to really get after data center expansion. So we're taking our time to find businesses that we think we want to invest in. We want to keep the teams. We want to incentivize the teams. We're finding markets that we think have a good 2-, 3-, 4-year growth trajectory in front of them. Industrial water, there's no doubt that this is a very fragmented, growing space, Kemco within food processing, there's a tremendous amount of opportunities. These are also businesses, Rob, that have been somewhat limited in their ability to scale into new geographies or add capital just because of the size of the company or where they are in their investment model with their previous ownership. We're early in the alphabet. They're later in the alphabet. So when we make an acquisition, we want to invest in growth. We want to invest in new capital, new resources. We want to take them into our high-growth region markets where we have established capabilities and systems, and we already have entities set up in whether it's the Middle East or East Asia. So really, across all of our acquisitions, we're ahead of our growth models. And I'd say, in at least 50% of them, we believe we're going to double those businesses within 18 months of acquisition. We're well on the way to do that. And it's an exciting series of execution across our businesses.

Rob, I'll provide you one concrete example for each of the 3 businesses. So at Wakefield Acoustics, they had an opportunity with a large customer that required additional footprint in order to be able to deliver 26 package solutions for a very large data center expansion campaign. That required them to acquire some yard space but also some additional manufacturing capacity in facility. That couldn't have been undertaken, or could have been undertaken with prior management, but they couldn't have capitalized that. Quick access to CECO Capital, our balance sheet and our ability to provide that landlord the guarantees necessary to provide the building in a turnkey fashion has now giving them access to that customer, and there's more like it. And the Wakefield Solution story is very interesting. On the Transcend side, they had almost no business in international markets. They were very focused on the Gulf Coast, as you would expect with a small business working in hydrocarbon processing. We give them access now and have begun to book customers at the [Ras Laftan] project in the Middle East and are talking to customers in Indonesia on gas sweetening, all very large opportunities they couldn't have accessed on their own, but where CECO has people and existing relationships. And then with the Kemco Systems business, it's a very similar story. At least 2 of their primary applications are applicable in Europe, who have very similar codes around sanitation and water use in fat rendering and in beef processing facilities. With our teams in Europe, we can bring them into the U.K., Ireland and France, easily something they could not have done on their own. Those are big opportunities. We'll begin to start putting pen to paper in 2024. And that's the beauty of buying a focused niche specialist, is that they are focused, and we can help raise that focus, to Todd's point, giving them more geographic access or the ability to go deeper in their core markets with addition of capital.

Our next question will come from Amit Dayal with H.C. Wainwright.

With respect to the guidance for 2024, I think I heard you say it does not include any potential contribution from acquisitions you may do down the line. Is that correct?

That's correct. That's right.

And then just an adjacent question to that. With the interest rate environment where it is right now, are these deals still penciling out in the fashion you might want them to? Any color on how you are thinking about structuring these deals in the current environment would be helpful.

Well, interest rates are high versus where they have been, probably low, if you think about it over a 30-year period of the industrial businesses that I've been in since the '90s. So we'll have to think about that, obviously, in terms of deal valuation. I think there's always going to be opportunities for the right accretive acquisition if you take your time and you have a programmatic approach like we do, especially we have confidence and a track record of high performance once you've completed a transaction. But look, they're more expensive because debt's more expensive. And we're generating strong free cash flows in the last couple of quarters. We're going to continue to pay down our debt to lower our interest expense as we go forward. That's certainly a consideration for us. And look, I think it's all about economics. We have to create economic value when we make an acquisition. Of course, it has to be a good strategic and portfolio fit, cultural fit. So I would say that, with interest rates being what they are, it raises the bar for the transaction to have to make really great economic sense for us. Otherwise, we'll pause and we'll wait for a different environment. But right now, I think it's not changing how we look at transactions. It just raises the bar associated with that. And it does it for everybody. There's not a single company out there that is making acquisitions, or looking at making acquisitions, that isn't impacted by the slightly higher interest rates over the last few years.

And then your sales pipeline is growing quite substantially, as well. And I may have missed this if you already addressed it, and I apologize if I did. But in terms of converting that pipeline to orders or backlog, how much of the growth expectations is tied to that? I mean, are you more confident that you should be able to improve the conversion rate, I guess, to keep sort of revenues growing?

We think so. Look, I mean, I guess I'll just point in this case to a little bit of a history lesson. You look at our organic growth. You look at our bookings. You look at 29% bookings growth in 2021. You look at much larger 30%, 40% bookings growth in 2022. You look at the bookings growth that we've had in 2023. That's not because of acquisitions. Acquisitions have helped our bookings, but 75%, 80% of our orders growth have been organic. It's because we're going after more opportunities, and we're either maintaining a good win rate or our win rates certainly remain healthy. Now, when you enter a new market, you learn a lot about those markets, whether it's a new geography or a new vertical. You have to sometimes establish a reference site or a reference project that enables you to then go after the second, the third, the fourth. We've done that, whether it's an electric vehicle in the past, and then we were successful by winning a handful of other electric vehicle industrial air solutions. So again, I guess I'll just say, it's critical that we've gone from $1.5 billion to $3 billion of target market in our sales pipeline. Ideally, in a year or so, we're at billion to $4 billion of sales pipeline. Even if the market softens, we have a tremendous amount of opportunity to expand our target markets and maintain a win rate that we think represents the leadership position that we have at CECO across industrial air, industrial water and energy transitions. And so by maintaining a leadership win rate and expanding our end markets, we think more pursuits, equals more growth, and that's a big part of our outlook for 2024, and what will likely be a big part of our outlook for 2025.

Our next question will come from Jim Ricchiuti with Needham & Company.

This is Chris Grenga on for Jim. You'd mentioned the planned investments in talent and the global execution. Just wondering if you could please elaborate on your priorities there and what you expect in the near-term.

Yes. Look, it's a balance set of priorities, Chris. I'd call them in the swim lanes of a growing company, you, of course, have to continue to replenish your ability to execute. So Lynn, the HR team, our business leaders are constantly looking at the natural attrition associated with people leaving, or the fact that we need more talent to execute our projects. When you have 30% top line growth, you need to go and add engineering and project management and technicians and all of that. So we're always trying to keep up with great sales growth, and that's a good problem. That's a gold-plated problem, but it's still a tough environment. So we're spending the right amount of time, energy and focus to invest in bringing in new people, retaining people. It's a challenge to every company, especially in relatively mature industrial markets to do that. So that's a big investment of time and energy for us, and that's well spent. And we have the right teams doing that. It's never easy, but we're rolling up our sleeves every day to do that. To add more growth, business development, sales, marketing, that talent continues to fuel the relationships that are critical for our advanced thinking, our better markets. The acquisitions we've made, we're very fortunate to have kept that top talent and then add some resources to them. I think, over the next 6 to 12 months, you're going to hear us probably highlight some resources that we'll continue to make in those sales, business development areas as well as probably some areas of I guess I call them sort of new product development, engineering application solutions. Some of that might be in high-growth regions like India, where we've more than tripled our resources from around 30 to over 100 today on just the last 18 to 24 months. So we're trying to be smart with adding incredibly talented people, but in areas where it's cost effective and allows us to be more 24/7, as a global company should be, around supporting customers and supporting our areas of innovation and growth. So those are going to be the topics. That's where we're investing. It's more around that. I'd say the last thing is we're building under Dan Berryman, and all of our platform GMs are really stepping up now to have more of a focus on productivity and operating excellence. So we're going to be adding a few more resources to deliver that margin expansion to go after operating excellence capabilities. So again, for us, it's just about a balanced diet of top line growth organically, adding resources to recent acquisitions, and then the final piece of the diet is making sure that we have margin expansion.

And looking at the healthy pipeline, I'm just curious. How would you characterize the amount of that pipeline, which is discrete projects one at a time versus now that you have this very deep and broad portfolio, going to some of these strategic customers and having them select multiple services and solutions from the broad portfolio to service their full spectrum of needs? I guess trying to understand where do you see the land-and-expand strategy today? And where would you like to take it?

Well, our business mix right now is somewhere in the 70% longer cycle. That includes very long-cycle projects. It also includes what we call mid-cycle, projects that we book but we turn into revenue in 6, 9 months. Long cycle would be revenue between 9 and, let's say, 18 months. 70% of our business mix is that longer cycle projects. For sure, at least 70% of that pipeline are jobs that look like that. They're mid- to longer-cycle projects. They're therefore somewhat more discrete. They're fairly large, million to multi-million-dollar projects that are associated with either an expansion of an existing site or potential a new build, a Greenfield, so to speak. That's at least 70% of that $3 billion. The other 30% would be aftermarket project services, replacement, shorter cycle pumps, filters, things like that. So I'd probably say our pipeline's a little bit more on the medium to long cycle because you can have more visibility to that. That doesn't mean that it changes our business mix, going forward, but that's what we see in the pipeline.

Our next question will come from Gerry Sweeney with ROTH Capital.

One more question on revenue growth. I think a lot of questions have been asked that's sort of been around the edge of what I wanted to ask. But I really wanted to see if you guys could dig in and discuss what's driving growth. I understand acquisitions. There's capital infusion. There's access to CECO's global sales. But I think in the past, at least, Peter, you and I have discussed I think incentivizing some business heads and maybe reducing some barriers and letting them go after additional opportunities. Can you maybe dig into what's outside of acquisition growth, what's driving growth internally and driving that pipeline?

Well, we have been transforming, and it started actually with the transformation of our business model and our structure and having more accountability at our more nimble fighting units, if you will, the platform units. I think that unshackled their focus on the markets, incentivized them to double, triple, quadruple the markets that we're going after, gave them the space and the time to do that and the investment to do that. So our platform businesses all would be looking at more growth opportunities. At 2 years ago, a year ago and today, they continue to expand into new markets. And that's important. That accountability for them driving into new markets is important, and they know that they can win and lose, and we're going to continue to invest in their growth because eventually, they're going to find their stride in those new markets, given our leadership position. So that's first and foremost. We've already expanded I think on the investment that we make on the acquisitions. We make the acquisitions to drive growth. There are some cost synergies and some operating synergies, but that's not the reason we do the acquisitions. It's to drive growth and to expand into these geographies and vertical markets. That's equally important. And look, it should be noted, obviously. We do feel like we're in good markets. And we think that they have a good pipeline of opportunity. The restoring of industrial capacity and capabilities is not over, and investment in infrastructure globally is not over. Investment in energy and energy transition, whether it's a legacy infrastructure that continues to be maintained or new infrastructure that needs to be built for new gases and new capture of carbon and transport and management, all of that is billions and trillions of dollars. We feel like we're really well-positioned in those markets. So it's a combination of investing and incentivizing our teams and helping them to look at new markets differently. It's a smart acquisition model that promotes growth versus going at their acquisition model for cost synergies, which can slow down that growth conversation. And then it's just being nimble in end markets that we think are growing, and when one slows down, we move into another one.

I mean, what about on the organic side or investing internally? Can you touch upon that as maybe a growth driver as well?

Yes. Look, again, we know that there's some caution out there in the environment, and that's not lost on us. You don't have a subscription to cable television or the Wall Street Journal and not read about it every day. We say organic growth is the heartbeat of CECO. It's what's going to give us double-digit growth this year, more than double-digit growth this year. It's going to give us double-digit growth next year. We have a lot of confidence in what the pipeline looks like at the moment, and that is producing record backlogs as we navigate the last few years. And it's been choppy and dicey for quite a while, and a lot of end markets have ebbed and flowed. So for us, organic growth is our main focus. We think that the M&A is additive to double-digit growth in the moment. So we're going to continue to push for that. And again, I think we believe that, with our backlogs and our pipeline, all of that right now represents, as we head into next year, that's an organic number being in the double-digits. So we just like the space we're in at the moment.

Our final question will come from Joe Gargano with TD Cowen.

This is Michael Anastasiou on for Joe. In the prepared remarks, you mentioned the continued strong book-to-bill. Can you give us any breakdown between industrial air, water and the energy transition? And can you give us any color regarding the customer decision timelines and how that's trended over time?

Well, first of all, all 3, if you want to call it, of those sort of segments have been growing throughout the year. So our industrial water business is, if you want to call it, our newest collection of businesses because that's obviously where we've been building a position. The acquisitions we've made over the last 18 months with respect to Compass and DS21 and Kemco, et cetera, have built that industrial water. So that's been growing, and that's probably been the most acquisitive area of growth, is in industrial water. So when you're looking at any transformation of our portfolio, it's been in large part industrial water. But therefore, I can't give you a legacy 3, 4 years ago, that the book-to-bill was X and now it's Y. But again, between especially DS21, a business that we think will double in 18 months of ownership; Compass and Kemco and GRC, all businesses that are growing strong double-digits, we believe. So the book-to-bills continues to be good in industrial water. Industrial air, it's what's probably our largest platform, and it represents a big part of what we do. There's a lot of different end markets there, so it'd be hard for me to dissect them and take a lot of time. But between industrial air and the energy transition, again, we're certainly over 1 in terms of that book-to-bill as well. I think one quarter industrial air might be 1.3 book-to-bill and energy transition might be 1, then the next quarter energy transition might be 1.3 and industrial air might be 1. But none of them have been less than 1 for more than 1 quarter. So it's not because of 1 of the 3 that we've had a book-to-bill of 1.2 year-to-date. They've all probably averaged somewhere between 1 and 1.1 and 1.3 any quarter of the year and probably over the last few years. So it's been pretty balanced for us.

There was a second part to the question, I think, in terms of speed for customers to make decisions on orders, or order placement. We're seeing 2 trends. One is our customers are coming to us much earlier in their process, so we help them with the design and even, I'll call it, the technical problem-solving at an early stage in their project planning. And so that gets us engaged early, helps us influence specification and design, which ultimately benefits CECO from a win rate perspective. Once we now move from, I'll call it, the front-end engineering design phase into the quotation and the costing and then commercial aspects, it's moving faster than in the past. Because we've got that early look, we can move more rapidly, and our customers are making choices on the selection of either solution or a technology provider more rapidly. For us, that is a demonstration of the success of our strategy to become the preferred technology and solution partner for many of our customers. And in fact, what we've even been finding is, in some larger customers, we are the first person they're calling because they know they'll get the solution and they'll get the quality and durability from the solution they're looking for, and a broad RFQ process, which takes a long time and cost them money is not in their interest. They're getting funding, and they want to move quickly. We believe that trend will continue as stimulus from the government investment program starts rolling out and companies now have to make decisions on how to spend that money. And that's a U.S. or North American phenomenon primarily with the IRA, IIJA and other funds.

And just one more, if I may. You had mentioned about a 1 to 1.1 book-to-bill for next year. Can you just dive in the expected cadence of the year? I know there's been potentially some seasonal or timing of large projects that has influenced the first half of the year. The past couple of years has been a little bit stronger in that area. Any color there would be very helpful.

Yes. It's a fair question. We don't know that we have necessarily seasonal aspects. I mean, first of all, you get projects that let's just say there could be a $20 million, $30 million, $40 million, $50 million project. And it's hard to sort of say is that going to book in a quarter versus another quarter because, obviously, that has a lot to do with the we're usually a big part at times, or a small part of a very large project or a larger project. So it's not that the customer is just worrying about our solution. They have to think about the supply chain, the timing, the capital investment of the entire solution before they issue POs. So, look, there's a reason we don't give quarterly guidance. It's hard to forecast that, especially this early in next year or even in next year. It would be hard for me to give much more color around it. I'd say this. There's no reason for me at this point to not say it's balanced throughout the year. I mean, I don't think where I sit today, where Peter and I and the teams sit today, that you're looking at, and I'll just exaggerate to make a point, a disproportionate amount of orders in the first half of the year and then a lower proportion in the second half, nor would I think it could be the flip. I'm not saying it's going to be perfectly, equally balanced or linear, 25%, 25%. But at the moment, there's no reason to believe that we'll have a huge seasonal aspect to our bookings for next year. So if we have a 1.1 book-to-bill next year, it would seem to me like our book-to-bill would be somewhat consistent throughout the year. Now, some of that could be influenced by a higher revenue quarter because the size of some of our revenue quarters can be different historically, but that continues to be on the more linear trend, as well. So again, we think there's really probably no seasonal aspect. And again, we hope that it's relatively consistent throughout the year. I would also remind folks, and it's not a caution, but just because we might have 1 quarter where a book-to-bill could be lower, including even slightly below 1, I don't think that that necessarily means that there's a slowdown, because that just might mean that a handful of orders rolled into the next quarter. Similarly, if we have 1 quarter where our book-to-bill is 1.2 or 1.3, that doesn't mean that we can sustain that. It could just be a certain number of projects moved into that quarter. So timing is really important when you're looking at fairly large orders.

This concludes our question-and-answer session. I would like to turn the conference back over to Todd Gleason for any closing remarks.

Yes. I'll just be quick here. First of all, thanks for everyone's question and interest in our information today. I know we went over time. I guess that's a good thing when there's a lot of great questions around what we provided in our performance. Also, just thanking our global teams. They're delivering incredible value to our customers as we continue to protect people, protect the environment, and protect our customers' investment in industrial equipment. These are all really super-critical things for our customers and also for us. Last but not least, we're going to be hosting a number of one-on-one meetings and presenting at some conferences. This week, Peter is going to be at the Baird Industrial Conference in Chicago; and then, next week, I'm going to be at the 3 Part Advisors Ideas Conference in Dallas, as well as participating at the Craig-Hallum Growth Conference in New York City. And that will be, like I said, next week. And we look forward to seeing and meeting with many of you there, speaking with you throughout the day. If you ever want to get ahold of us, no doubt reach out, and we look forward to speaking. Have a great day.

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