# EDGAR Filing Document

**Accession Number:** 0000003197
**File Stem:** 0001193125-26-197428
**Filing Date:** 2026-4
**Character Count:** 131716
**Document Hash:** 8c4f4f527d22dcf7d1520b379c8a4d44
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-26-197428.hdr.sgml**: 20260430

**ACCESSION NUMBER**: 0001193125-26-197428

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 85

**CONFORMED PERIOD OF REPORT**: 20260331

**FILED AS OF DATE**: 20260430

**DATE AS OF CHANGE**: 20260430

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CECO ENVIRONMENTAL CORP
- **CENTRAL INDEX KEY:** 0000003197
- **STANDARD INDUSTRIAL CLASSIFICATION:** INDUSTRIAL & COMMERCIAL FANS & BLOWERS & AIR PURIFYING EQUIP [3564]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 132566064
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-07099
- **FILM NUMBER:** 26925942

**BUSINESS ADDRESS:**
- **STREET 1:** 5080 SPECTRUM DRIVE
- **STREET 2:** SUITE 800E
- **CITY:** ADDISON
- **STATE:** TX
- **ZIP:** 75001
- **BUSINESS PHONE:** (513) 458-2600

**MAIL ADDRESS:**
- **STREET 1:** 5080 SPECTRUM DRIVE
- **STREET 2:** SUITE 800E
- **CITY:** ADDISON
- **STATE:** TX
- **ZIP:** 75001

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** API ENTERPRISES INC
- **DATE OF NAME CHANGE:** 19920703

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** ALARM PRODUCTS INTERNATIONAL INC
- **DATE OF NAME CHANGE:** 19851210

?xml version='1.0' encoding='ASCII'? 10-Q

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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

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**FORM** 10-Q

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**(Mark one)**

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

**For the quarterly period ended** **March 31, 2026**

**or**

☐ **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

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![img42711861_0.jpg](img42711861_0.jpg)

CECO ENVIRONMENTAL CORP.

**(Exact name of registrant as specified in its charter)**

------

---

| | |
|:---|:---|
| Delaware | 13-2566064 |
| **(State or other jurisdiction of**<br>**Incorporation or organization)** | **(IRS Employer**<br>**Identification No.)** |

---

---

| | |
|:---|:---|
| 5080 Spectrum Drive<br>Suite 800E<br>Addison**,** Texas | <br>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:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;Title of each class | &nbsp;&nbsp;Trading Symbol | &nbsp;&nbsp;Name of each exchange on which registered |
| &nbsp;&nbsp;Common Stock, par value $0.01 per share | &nbsp;&nbsp;CECO | &nbsp;&nbsp;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.

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;Large accelerated filer | ☒ | Accelerated filer | ☐ |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
| &nbsp;&nbsp;&nbsp;&nbsp;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: 35,873,031 shares of common stock, par value $0.01 per share, as of April 17, 2026.

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**CECO ENVIRONMENTAL CORP.**

QUARTERLY REPORT ON FORM 10-Q

For the quarter ended March 31, 2026

**<u>**Table of Contents**</u>**

---

| | | |
|:---|:---|:---|
| Part I – | [<u>Financial Information</u>](#part_i_financial_information) | 2 |
|  | [<u>Item 1. Financial Statements (unaudited)</u>](#item_1_financial_statements) | 2 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025</u>](#condensed_consolidated_balance_sheets) | 2 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025</u>](#condensed_consolidated_statements_operat) | 3 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Condensed Consolidated Statements of Comprehensive (Loss) Income for the three months ended March 31, 2026 and 2025</u>](#condensed_consolidated_statements_compre) | 4 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Condensed Consolidated Statements of Shareholders' Equity for the three months ended March 31, 2026 and 2025</u>](#condensed_consolidated_statements_equity) | 5 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025</u>](#condensed_consolidated_statements_cash_f) | 6 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Notes to Condensed Consolidated Financial Statements</u>](#notes_consolidated_financial_statements) | 7 |
|  | [<u>Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations</u>](#item_2_managements_discussion_analysis_f) | 21 |
|  | [<u>Item 3. Quantitative and Qualitative Disclosures about Market Risk</u>](#item_3_quantitative_qualitative_disclosu) | 29 |
|  | [<u>Item 4. Controls and Procedures</u>](#item_4_controls_procedures) | 29 |
| Part II – | [<u>Other Information</u>](#part_ii_or_information) | 31 |
|  | [<u>Item 1. Legal Proceedings</u>](#item_1_legal_proceedings) | 31 |
|  | [<u>Item 1A. Risk Factors</u>](#item_1a_risk_factors) | 31 |
|  | [<u>Item 2. Unregistered Sales of Equity Securities and Use of Proceeds</u>](#item_2_unregistered_sales_equity_securit) | 31 |
|  | [<u>Item 3. Defaults Upon Senior Securities</u>](#item_3_defaults_upon_senior_securities) | 31 |
|  | [<u>Item 4. Mine Safety Disclosures</u>](#item_4_mine_safety_disclosures) | 31 |
|  | [<u>Item 5. Other Information</u>](#item_5_or_information) | 31 |
|  | [<u>Item 6. Exhibits</u>](#item_6_exhibits) | 32 |
| [<u>Signatures</u>](#signatures) | [<u>Signatures</u>](#signatures) | 33 |

---

------

 <u>CECO ENVIRONMENTAL CORP.</u>

**PART I – FINANCIAL INFORMATION**

**ITEM 1. FINANCIAL STATEMENTS**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

**(unaudited)**

---

| | | |
|:---|:---|:---|
| **(in thousands, except per share data)** | **March 31, 2026** | **December 31, 2025** |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $45411 | $33144 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 96 | 83 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net of allowances of $5,306 and $9,866 | 278528 | 172909 |
| &nbsp;&nbsp;&nbsp;&nbsp;Costs and estimated earnings in excess of billings on uncompleted contracts | 103720 | 115614 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories | 60175 | 53996 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 40739 | 29450 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid income taxes | 10564 | 4986 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 539233 | 410182 |
| Property, plant and equipment, net | 48092 | 47808 |
| Right-of-use assets from operating leases | 29181 | 28251 |
| Goodwill | 291128 | 288163 |
| Intangible assets – finite life, net | 99167 | 96966 |
| Intangible assets – indefinite life | 9678 | 9705 |
| Deferred income taxes |  | 449 |
| Deferred charges and other assets | 10896 | 12245 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $1027375 | $893769 |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current portion of debt | $5340 | $1879 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 137594 | 117848 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 71212 | 57639 |
| &nbsp;&nbsp;&nbsp;&nbsp;Billings in excess of costs and estimated earnings on uncompleted contracts | 184223 | 123726 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable | 7424 | 4738 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 405793 | 305830 |
| Other liabilities | 7033 | 3317 |
| Debt, less current portion | 247907 | 210559 |
| Deferred income tax liability, net | 26336 | 27920 |
| Operating lease liabilities | 23106 | 22961 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 710175 | 570587 |
| Commitments and contingencies (See Note 14) |  |  |
| Shareholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred stock, $0.01 par value; 10,000 shares authorized, none issued |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Common stock, $0.01 par value; 100,000,000 shares authorized, 35,840,781 and<br>35,644,537 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively | 357 | 355 |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital in excess of par value | 264595 | 269453 |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 56223 | 56621 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (8976) | (8901) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total CECO shareholders' equity | 312199 | 317528 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling interest | 5001 | 5654 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total shareholders' equity | 317200 | 323182 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity | $1027375 | $893769 |

---

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

------

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**

**(unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Three months ended March 31,** | **Three months ended March 31,** |
| **(in thousands, except share and per share data)** | **2026** | **2025** |
| Net sales | $205919 | $176697 |
| Cost of sales | 142000 | 114535 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 63919 | 62162 |
| Selling and administrative expense | 46091 | 53542 |
| Amortization expense | 4003 | 3096 |
| Acquisition and integration expense | 10280 | 8143 |
| Gain on sale of Global Pump Solutions business |  | (64502) |
| Other operating expense | 1670 | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income from operations | 1875 | 61870 |
| Other expense | 1392 | 594 |
| Interest expense | 4230 | 6217 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income before income taxes | (3747) | 55059 |
| Income tax (benefit) expense | (3499) | 18617 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net (loss) income | (248) | 36442 |
| Noncontrolling interest | 150 | 458 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net (loss) income attributable to CECO Environmental Corp. | $(398) | $35984 |
| Loss (earnings) per share: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | $(0.01) | $1.03 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | $(0.01) | $0.98 |
| Weighted average number of common shares outstanding: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | 35690813 | 35028301 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | 35690813 | 36689320 |

---

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

------

**CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME**

**(unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Three months ended March 31,** | **Three months ended March 31,** |
| **(in thousands)** | **2026** | **2025** |
| Net (loss) income | $(248) | $36442 |
| Other comprehensive (loss) income, net of tax: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation (loss) gain | (75) | 1519 |
| Comprehensive (loss) income | $(323) | $37961 |

---

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** | **Common Stock** | **Capital in<br>excess of** | **Retained** | **Accumulated <br>Other<br>Comprehensive** | **Non-controlling** | **Total <br>Shareholders'** |
|  | **<u>Shares</u>** | **<u>Amount</u>** | **<u>par value</u>** | **<u>Earnings</u>** | **<u>Loss</u>** | **<u>interest</u>** | **<u>Equity</u>** |
| Balance December 31, 2025 | 35645 | $355 | $269453 | $56621 | $(8901) | $5654 | $323182 |
| Net (loss) income |  |  |  | (398) |  | 150 | (248) |
| Restricted stock units issued | 175 |  | (5818) |  |  |  | (5818) |
| Share based compensation earned | 21 | 2 | 960 |  |  |  | 962 |
| Translation loss |  |  |  |  | (75) |  | (75) |
| Noncontrolling interest distributions |  |  |  |  |  | (803) | (803) |
| Balance March 31, 2026 | 35841 | $357 | $264595 | $56223 | $(8976) | $5001 | $317200 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | **Capital in<br>excess of** | **Retained** | **Accumulated <br>Other<br>Comprehensive** | **Non-controlling** | **Total <br>Shareholders'** |
|  | **<u>Shares</u>** | **<u>Amount</u>** | **<u>par value</u>** | **<u>Earnings</u>** | **<u>Loss</u>** | **<u>interest</u>** | **<u>Equity</u>** |
| Balance December 31, 2024 | 34978 | $349 | $255211 | $6570 | $(14441) | $4204 | $251893 |
| Net income |  |  |  | 35984 |  | 458 | 36442 |
| Restricted stock units issued | 260 | 3 | (3045) |  |  |  | (3042) |
| Share based compensation earned | 12 |  | 3641 |  |  |  | 3641 |
| Translation gain | - |  |  |  | 1519 |  | 1519 |
| Noncontrolling interest distributions | - |  |  |  |  | (402) | (402) |
| Balance March 31, 2025 | 35250 | $352 | $255807 | $42554 | $(12922) | $4260 | $290051 |

---

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

------

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Three months ended March 31,** | **Three months ended March 31,** |
| **(in thousands)** | **2026** | **2025** |
| Cash flows from operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net (loss) income | $(248) | $36442 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net (loss) income to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 6104 | 5115 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized foreign currency loss (gain) | 624 | (1142) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of Global Pump Solutions business |  | (64502) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on sale of property and equipment | (219) | (15) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt discount amortization | 199 | 206 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation expense | 440 | 3356 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Recovery) allowance for credit loss | (1517) | 819 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory obsolescence expense | 1082 | 92 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income tax (benefit) expense | (1152) | 166 |
| Changes in operating assets and liabilities, net of acquisitions and divestiture: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (103137) | 16215 |
| &nbsp;&nbsp;&nbsp;&nbsp;Costs and estimated earnings in excess of billings on uncompleted contracts | 11612 | (12270) |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories | (6851) | (2416) |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expense and other current assets | (17016) | (17652) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred charges and other assets | 1534 | (971) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 19649 | (3633) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 12681 | 8865 |
| &nbsp;&nbsp;&nbsp;&nbsp;Billings in excess of costs and estimated earnings on uncompleted contracts | 60667 | 5933 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable | 2700 | 17220 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | (252) | (3524) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (13100) | (11696) |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisitions of property and equipment | (2589) | (3385) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash proceeds for sale of Global Pump Solutions business |  | 105860 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash paid for acquisitions, net of cash acquired | (6616) | (97646) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by investing activities | (9205) | 4829 |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Borrowings on revolving credit lines | 57700 | 148100 |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayments on revolving credit lines | (14500) | (27600) |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayments of long-term debt | (435) | (420) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments on finance leases and financing liability |  | (234) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred financing fees paid | (2156) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred consideration paid for acquisitions |  | (1000) |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity awards surrendered by employees for tax liability, net of proceeds from employee stock purchase plan and exercise of stock options | (5166) | (2688) |
| &nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling interest distributions | (803) | (402) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 34640 | 115756 |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (56) | (414) |
| Net increase in cash, cash equivalents and restricted cash | 12280 | 108475 |
| Cash, cash equivalents and restricted cash at beginning of period | 33227 | 38201 |
| Cash, cash equivalents and restricted cash at end of period | $45507 | $146676 |
| Cash paid during the period for: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest | $4037 | $3987 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income taxes | $486 | $2405 |

---

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

------

<u>CECO ENVIRONMENTAL CORP.</u>

<u>N</u><u>OT</u><u>ES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</u>

<u>(unaudited)</u>

**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 March 31, 2026 and the results of operations, cash flows and shareholders' equity for the three months ended March 31, 2026 and 2025. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the full year. The balance sheet as of December 31, 2025 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, 2025 as filed with the SEC on March 2, 2026 (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 2026**

Effective January 1, 2026, the Company adopted 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. Adoption did not have a material impact on the Company's condensed consolidated financial statements.

**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 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 March 31, 2026 and December 31, 2025 consisted of the following:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **March 31, 2026** | **December 31, 2025** |
| Accounts receivable | $283834 | $182775 |
| Allowance for credit losses | (5306) | (9866) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total accounts receivable, net | $278528 | $172909 |

---

Accounts receivable, net as of the beginning of the prior year period, or January 1, 2025, were $159.5 million.

Balances billed but not paid by customers under retainage provisions in contracts within the Condensed Consolidated Balance Sheets amounted to approximately $9.6 million and $10.9 million at March 31, 2026 and December 31, 2025, 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.

Allowance for credit losses activity for the three months ended March 31, 2026 and 2025 consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **Three months ended March 31,** | **Three months ended March 31,** |
| **(in thousands)** | **2026** | **2025** |
| Balance at beginning of period | $9866 | $8863 |
| &nbsp;&nbsp;&nbsp;&nbsp;Write-offs | (3043) | (8) |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries | (1517) | (192) |
| Balance at end of period | $5306 | $8663 |

---

**4. Contract Assets and Liabilities** 

Contract assets and liabilities as of March 31, 2026 and December 31, 2025 consisted of the following:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **March 31, 2026** | **December 31, 2025** |
| Costs and estimated earnings in excess of billings on uncompleted contracts | $103720 | $115614 |
| Billings in excess of costs and estimated earnings on uncompleted contracts | 184223 | 123726 |

---

As of the beginning of the prior year period, or January 1, 2025, costs and estimated earnings in excess of billings on uncompleted contracts and billings in excess of costs and estimated earnings on uncompleted contracts were $69.9 million and $81.5 million, respectively. The contract liabilities recorded in "Accrued expenses" on the Condensed Consolidated Balance Sheets were $14.5 million, $15.3 million and $9.7 million as of March 31, 2026, December 31, 2025 and January 1, 2025, respectively. Approximately 30% of the Company's contract liabilities as of December 31, 2025 were recognized as revenue in the three months ended March 31, 2026.

**5. Inventories**

Inventories as of March 31, 2026 and December 31, 2025 consisted of the following:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **March 31, 2026** | **December 31, 2025** |
| Raw materials | $15402 | $15398 |
| Work in process | 24297 | 18026 |
| Finished goods | 20476 | 20572 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total inventories | $60175 | $53996 |

---

Adjustments to the allowance for obsolete inventory, as recorded to cost of sales, amounted to an increase of $1.1 million and increase of $0.1 million for the three months ended March 31, 2026 and 2025, respectively.

------

**6. Goodwill and Intangible Assets** 

Goodwill and indefinite life intangible asset activity for the three months ended March 31, 2026 and the year ended December 31, 2025 was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(in thousands)** | **Three months ended March 31, 2026** | **Three months ended March 31, 2026** | **Year ended December 31, 2025** | **Year ended December 31, 2025** |
| **Goodwill / Tradename** | **Goodwill** | **Tradename** | **Goodwill** | **Tradename** |
| Balance at beginning of period | $288163 | $9705 | $269747 | $9466 |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisitions | 2671 |  | 41769 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Divestiture |  |  | (26838) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation | 294 | (27) | 3485 | 238 |
| Balance at end of period | $291128 | $9678 | $288163 | $9705 |

---

During the three months ended March 31, 2026, the Company, through its Pinnacle Processes Inc. ("PPI") (formerly known as Effox-Flextor-Mader, Inc.) joint venture, completed the acquisition of Flexible Specialty Products ("FSP"), as discussed in Note 15.

Finite life intangible assets as of March 31, 2026 and December 31, 2025 consisted of the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **March 31, 2026** | **March 31, 2026** | **December 31, 2025** | **December 31, 2025** |
| **(in thousands)** | **Cost** | **Accumulated Amortization** | **Cost** | **Accumulated Amortization** |
| Technology | $22314 | $15668 | $22314 | $15155 |
| Customer lists | 146387 | 65243 | 140337 | 62163 |
| Tradenames | 17660 | 6494 | 17660 | 6084 |
| Foreign currency adjustments | 117 | (94) | 87 | 31 |
| &nbsp;&nbsp;Total intangible assets – finite life | $186478 | $87311 | $180399 | $83433 |

---

Finite life intangible asset activity for the three months ended March 31, 2026 and 2025 was as follows:

---

| | | |
|:---|:---|:---|
|  | **Three months ended March 31,** | **Three months ended March 31,** |
| **(in thousands)** | **2026** | **2025** |
| Intangible assets – finite life, net at beginning of period | $96966 | $74050 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization expense | (4003) | (3096) |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisitions | 6050 | 41810 |
| &nbsp;&nbsp;&nbsp;&nbsp;Divestiture |  | (4029) |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency adjustments | 154 | 515 |
| Intangible assets – finite life, net at end of period | $99167 | $109250 |

---

Amortization expense of finite life intangible assets was $4.0 million and $3.1 million for the three months ended March 31, 2026 and 2025, respectively. Amortization over the next five years for finite life intangibles is expected to be $12.0 million for the remainder of 2026, $15.2 million in 2027, $14.3 million in 2028, $12.9 million in 2029, $11.7 million in 2030, and $33.1 million thereafter. The weighted average amortization periods for finite life intangible assets was 7.7 years as of March 31, 2026, inclusive of weighted average amortization periods for technology, customer lists, and tradenames of 5.4, 8.0, 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, right-of-use assets, 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, right-of-use assets or property, plant and equipment during the three months ended March 31, 2026.

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 March 31, 2026 and December 31, 2025 consisted of the following:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **March 31, 2026** | **December 31, 2025** |
| Contract liability | $14536 | $15315 |
| Compensation and related benefits | 11602 | 16597 |
| Accrued acquisition costs | 7652 | 5 |
| Accrued warranty | 7222 | 6796 |
| Short-term operating lease liability | 5018 | 4642 |
| Other | 25182 | 14284 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total accrued expenses | $71212 | $57639 |

---

**8. Senior Debt**

Debt as of March 31, 2026 and December 31, 2025 consisted of the following:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **March 31, 2026** | **December 31, 2025** |
| Outstanding borrowings under Credit Facility (defined below) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Revolving credit facility | $251800 | $208600 |
| Total outstanding borrowings under the Credit Facility | 251800 | 208600 |
| Outstanding borrowings under the joint venture term debt | 5212 | 5647 |
| Unamortized debt discount | (3765) | (1809) |
| Total outstanding borrowings | 253247 | 212438 |
| &nbsp;&nbsp;&nbsp;&nbsp;Less: current portion | (5340) | (1879) |
| Total debt, less current portion | $247907 | $210559 |

---

Scheduled principal payments under the Credit Facility and joint venture term debt are $1.4 million for the remainder of 2026, and $3.8 million in 2027. The remaining $251.8 million will be paid upon maturity in 2031.

*Credit Facility*

On October 7, 2024, the Company entered into the Third Amended and Restated Credit Agreement (the "Legacy Credit Agreement"), among the Company, its subsidiaries from time to time party thereto, the lenders from time to time party thereto and Bank of America, N.A., as administrative agent, which amended and restated in its entirety the Company's prior credit agreement. The Legacy Credit Agreement provided for a senior secured revolving credit facility in an initial aggregate principal amount of up to $400.0 million (the "Legacy Credit Facility").

On January 30, 2026, the Company entered into the Fourth Amended and Restated Credit Agreement (the "2026 Credit Agreement"), among the Company, its subsidiaries from time to time party thereto, the lenders from time to time party thereto, and Bank of America, N.A., as administrative agent, which amended and restated in its entirety the Legacy Credit Agreement. The 2026 Credit Agreement provided for a senior secured revolving credit facility in an initial aggregate principal amount of up to $700.0 million.

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On March 30, 2026, the Company entered into Amendment No. 1 to Fourth Amended and Restated Credit Agreement (the "Amendment"), among the Company, its subsidiaries party thereto, the lenders party thereto (the "Lenders"), and Bank of America, N.A., as administrative agent (the "Agent"), which amends the Credit Agreement (the 2026 Credit Agreement as amended by the Amendment, the "Credit Agreement"). The Amendment provides for a senior secured revolving credit facility in an initial aggregate principal amount of up to $740.0 million and adds an incremental senior secured delayed-draw term loan commitment in an initial aggregate principal amount of $235 million (the "Incremental Term A-1 Loan Facility"; together with the Revolving Facility, the "Credit Facility"), subject only to the satisfaction or waiver of the related conditions precedent set forth in the Credit Agreement, including, without limitation, the consummation of the merger and acquisition contemplated by that certain Agreement and Plan of Merger, dated as of February 23, 2026, by and among the Company, Longhorn Merger Sub, Inc., Longhorn Merger Sub LLC, and Thermon Group Holdings, Inc.

As of March 31, 2026 and December 31, 2025, $23.1 million and $23.8 million of letters of credit were outstanding, respectively. Total unused credit availability, in consideration of borrowing limitations, under the Company's Credit Facility was $119.9 million and $123.6 million at March 31, 2026 and December 31, 2025, respectively. The Company's available borrowing capacity under the Credit Facility is defined as the lower of (a) the Credit Facility amount less outstanding borrowings and Letters of Credit on the Credit Facility, and (b) the Company's trailing twelve month EBITDA, as defined in the Credit Agreement, by a factor of the maximum leverage ratio, less outstanding borrowings on the Credit Facility. Revolving loans may be borrowed, repaid and reborrowed until January 30, 2031, at which time all outstanding balances of the Credit Facility must be repaid.

The Legacy Credit Facility accrued 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 Legacy 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 Legacy 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 Legacy 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 Legacy 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 Legacy 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 Legacy 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.

The Credit Facility accrues interest (a) with respect to base rate loans, at an annual rate equal to an applicable rate spread of between 0.50% and 2.00% (fluctuating based on the Company's Consolidated Net Leverage Ratio, as defined in the Credit Agreement), 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 spread of between 1.50% and 3.00% (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), (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), (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.

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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 6.20% and 6.41% at March 31, 2026 and December 31, 2025, respectively. The effective interest rate was 6.23% and 7.06% at March 31, 2026 and December 31, 2025, 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 3.50 to 1.00, in each case as of the last day of each fiscal quarter of the Company. 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.

In connection with the 2026 Credit Agreement and Amendment, the Company paid $2.2 million in customary closing fees that were deferred and classified as a debt discount, as a result of the associated amendments being accounted for as new debt and debt modifications. The prior amounts continue to be deferred and classified as a debt discount, as these amounts relate to portions of the 2026 Credit Agreement and Amendment accounted for as debt modifications.

As of March 31, 2026 and December 31, 2025, 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 PPI JV, for which the Company holds 63% of the equity, entered into a loan agreement secured by the assets of the PPI JV in the aggregate principal amount of $11.0 million for the acquisition of General Rubber, LLC. As of March 31, 2026 and December 31, 2025, $5.2 million and $5.6 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 PPI 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 March 31, 2026 and December 31, 2025 was 6.87% and 7.27%, respectively. As of March 31, 2026 and December 31, 2025, the PPI 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 March 31, 2026, there were $19.2 million in current assets (including $2.5 million of cash, $6.3 million of accounts receivable, and $4.7 million of inventories), $36.1 million in long-lived assets (including $32.4 million of goodwill and intangible assets), and $18.7 million in total liabilities (including $5.2 million of debt and $5.2 million of accounts payable and accrued expenses) related to the PPI JV included in the Condensed Consolidated Balance Sheets. As of December 31, 2025, there were $20.7 million in current assets (including $1.9 million of cash, $10.4 million of accounts receivable, and $4.3 million of inventories), $24.4 million in long-lived assets (including $23.9 million of goodwill and intangible assets), and $14.2 million in total liabilities (including $5.6 million of debt and $4.9 million of accounts payable and accrued expenses) related to the PPI JV included in the Consolidated Balance Sheets. For the three months ended March 31, 2026 and 2025, the PPI JV accounted for $13.3 million and $11.0 million in revenue, respectively, and $0.3 million and $0.8 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 $150.0 million from the bilateral lines of credit secured through pledged assets and collateral under the Credit Facility. As of March 31, 2026 and December 31, 2025, $45.5 million and $41.6 million in bank guarantees were outstanding, respectively, inclusive of $1.1 million and $1.1 million in outstanding bank guarantees as of March 31, 2026 and December 31, 2025, 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 $2.0 million and $1.9 million in outstanding bank guarantees as of March 31, 2026 and December 31, 2025, respectively, under Yuan-denominated bank guarantee agreements held by a subsidiary of the Company located in China and secured by local assets.

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**9. (Loss) Earnings per Share**

The computational components of basic and diluted (loss) earnings per share for the three months ended March 31, 2026 and 2025 are as follows:

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| | | |
|:---|:---|:---|
|  | **Three months ended March 31,** | **Three months ended March 31,** |
| **(in thousands)** | **2026** | **2025** |
| **Numerator** (for basic and diluted earnings per share) |  |  |
| Net (loss) income attributable to CECO Environmental Corp. | $(398) | $35984 |
| **Denominator** |  |  |
| Basic weighted-average shares outstanding | 35691 | 35028 |
| Common stock equivalents arising from stock options and restricted stock awards |  | 1661 |
| Diluted weighted-average shares outstanding | 35691 | 36689 |

---

Options and restricted stock units included in the computation of diluted earnings per share are calculated using the treasury stock method. For the three months ended March 31, 2025, 0.1 million 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. For the three months ended March 31, 2026, the Company had a net loss. As a result, no potentially dilutive shares were included in the computation, as their inclusion would have been anti-dilutive. The shares that could potentially dilute earnings per share in the future were 2.1 million for the three months ended March 31, 2026.

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. There were no shares repurchased under the program during the three ended March 31, 2025. This program expired during the second quarter of 2025.

**10. Share-Based Compensation**

The Company recognized $0.4 million and $3.4 million of expense related to share-based compensation during the three months ended March 31, 2026 and 2025, respectively, which was measured based upon the fair value of the awards at the grant date.

The Company granted approximately 226,000 and 388,000 restricted stock units during the three months ended March 31, 2026 and 2025, respectively. In addition, the Company granted 18,000 and 67,000 stock options during the three months ended March 31, 2026 and 2025, respectively.

There were no options exercised during the three months ended March 31, 2026 and 2025.

**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 expense" on the Condensed Consolidated Statements of Operations.

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Retirement plan expense was 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:

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| | | |
|:---|:---|:---|
|  | **Three months ended March 31,** | **Three months ended March 31,** |
| **(in thousands)** | **2026** | **2025** |
| Interest cost | $— | $318 |
| Expected return on plan assets |  | (335) |
| Amortization of net actuarial loss |  | 9 |
| Net periodic benefit cost | $— | $(8) |

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The Company made no contributions to its defined benefit plan during the three months ended March 31, 2025. On March 31, 2025, the pension plan was transferred to the purchaser of the Global Pump Solutions business, as discussed in Note 16.

**12. Income Taxes**

The Company files income tax returns in various federal, state and local jurisdictions. Tax years from 2022 forward remain open for examination by Federal authorities. Tax years from 2018 forward remain open for all significant state and foreign authorities.

As of March 31, 2026 and December 31, 2025, the liability for uncertain tax positions totaled approximately $1.3 million and $1.3 million, respectively, which is included in "Other liabilities" on the Condensed Consolidated Balance Sheets. The Company recognizes accrued interest related to uncertain tax positions and penalties, if any, in income tax expense within the Condensed Consolidated Statements of Operations.

Certain of the Company's undistributed earnings of our foreign subsidiaries are not permanently reinvested. Since foreign earnings have already been subject to United States income tax in 2017 as a result of the 2017 Tax Cuts and Jobs Act, the Company intends to repatriate foreign-held cash as needed. The Company records deferred income tax attributable to foreign withholding taxes that would become payable should it decide to repatriate cash held in our foreign operations. As of March 31, 2026 and December 31, 2025, the Company recorded deferred income taxes of approximately $1.7 million and $1.1 million, respectively, on the undistributed earnings of its foreign subsidiaries.

Income tax benefit for the three months ended March 31, 2026 was $3.5 million, compared to income tax expense of $18.6 million for the three months ended March 31, 2025. The effective income tax rate for the three months ended March 31, 2026 was (93.4)%, compared with 33.8% for the three months ended March 31, 2025. The effective income tax rates for the three months ended March 31, 2026 and 2025 differ from the United States federal statutory rate. The Company's effective rate is affected by certain other permanent differences, including transaction costs, state income taxes, non-deductible incentive stock-based compensation, and differences in tax rates among jurisdictions in which it operates. The effective tax rate for the three months ended March 31, 2025 was also impacted by the gain on the sale of the Global Pump Solutions business.

The Organization for Economic Co-operation and Development/G20 Inclusive Framework on Base Erosion and Profit Shifting published the Pillar Two model rules designed to address the tax challenges arising from the digitalization of the global economy which introduces a 15% global minimum corporate tax for companies with revenues above €750 million calculated on a country-by-country basis. On February 1, 2023, the FASB indicated that it believes the minimum tax imposed under Pillar Two is an alternative minimum tax, and, accordingly, deferred tax assets and liabilities associated with the minimum tax would not be recognized or adjusted for the estimated future effects of the minimum tax but would be recognized in the period incurred. Aspects of Pillar Two legislation have been enacted in certain jurisdictions in which the Company operates effective for accounting periods commencing on or after January 1, 2024. However, based on the current revenue threshold, the Company is currently not subject to Pillar Two taxes.

**13. Financial Instruments**

The Company's financial instruments consist primarily of investments in cash and cash equivalents, receivables and certain other assets, notes payable, foreign debt and accounts payable, which approximate fair value at March 31, 2026 and December 31, 2025, due to their short-term nature or variable, market-driven interest rates.

The fair value of the debt issued under the Credit Facility and joint venture term loan was $257.0 million and $214.2 million at March 31, 2026 and December 31, 2025, respectively. The fair value was determined considering market conditions, the Company's credit worthiness and the current terms of our debt, which is considered Level 2 on the fair value hierarchy.

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At March 31, 2026 and December 31, 2025, the Company had cash and cash equivalents of $45.4 million and $33.1 million, respectively, of which $36.0 million and $26.4 million, respectively, was held outside of the United States, principally in China, India, Netherlands, United Arab Emirates, and United Kingdom.

**14. Commitments and Contingencies**

*Legal Proceedings* The Company is subject to routine legal claims, proceedings, and investigations associated with contract and employment-related litigation matters, warranty claims, asbestos matters, and audits of state and local tax returns arising in the ordinary course of its business. The final outcome and impact of open matters, and related claims and investigations that may be brought in the future, are subject to many variables, and cannot be predicted. The Company regularly assesses such matters to determine the degree of probability that it will incur a material loss as a result of such matters, as well as the range of possible loss. The Company records accruals for estimated losses relating to claims and lawsuits when available information indicates that a loss is probable and the amount of the loss, or range of loss, can be reasonably estimated.

Based upon information presently available, and in light of legal and other factual defenses available to the Company, the Company does not believe that it is reasonably possible that such litigation will have a material adverse effect on the Company's financial condition, future operating results or liquidity.

**15. Acquisitions and Proposed Merger with Thermon Group Holdings, Inc.**

*Merger Agreement with Thermon Group Holdings, Inc.* On February 23, 2026, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Longhorn Merger Sub, Inc. and Longhorn Merger Sub LLC, each a direct wholly owned subsidiary of the Company (together, the "Merger Subs"), and Thermon Group Holdings, Inc. ("Thermon"), pursuant to which the parties agreed to effect the merger transactions contemplated thereby (the "Merger").

Under the terms of the Merger Agreement and at the effective time of the Merger, each share of common stock, par value $0.001 per share, of Thermon ("Thermon Common Stock"), issued and outstanding immediately prior to the effective time (other than those shares of Thermon Common Stock excluded or constituting dissenting shares pursuant to the Merger Agreement), will be automatically converted into the right to receive from the Company, at the holder's election and subject to proration, either (i) mixed consideration consisting of 0.6840 shares of the Company's common stock and $10.00 of cash per share, (ii) $63.89 of cash per share or (iii) 0.8110 shares of the Company's common stock per share (collectively, the "Merger Consideration"). The Company is seeking stockholder approval for the issuance of shares of Company common stock in the transaction and Thermon is seeking Thermon stockholder approval of the Merger Agreement.

The completion of the Merger is subject to customary closing conditions, including, among others, approval by the Company's and Thermon's stockholders, approval for listing on Nasdaq of the shares of Company common stock to be issued in the transaction, and other customary regulatory approvals and conditions.

The Company has incurred $8.7 million in relation to the proposed transaction, primarily related to third party financial advisor fees, legal fees, and other professional fees. These amounts are recorded within "Acquisition and integration expenses" on the Condensed Consolidated Statements of Operations.

The Company expects to account for the acquisition as a business combination under ASC 805.

*Flexible Specialty Products LLC*

On February 13, 2026, the Company, through its PPI JV, completed its acquisition of FSP for $6.8 million in cash. The transaction was financed through cash on hand. As additional consideration in the acquisition of FSP, the former owners of FSP are also entitled to earn-out payments up to $4.0 million based upon specified financial results through December 31, 2029. Based on projections at the acquisition date, the Company estimated the fair value of the earn-out to be $3.3 million. FSP is a custom manufacturer and supplier of industrial fabric expansion joints, metal bellows, metal hose, and other specialty flexible connectors for ductwork and piping with its primary operations in Englewood, Florida and is reported within the Engineered Systems segment. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of closing.

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| | |
|:---|:---|
| **(in thousands)** |  |
| Current assets (including cash of $134 and accounts receivable of $861) | $1420 |
| Intangible - finite life | 6050 |
| Goodwill | 2671 |
| Other assets | 447 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets acquired | 10588 |
| Current liabilities assumed | (247) |
| Other liabilities assumed | (291) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net assets acquired | $10050 |

---

The Company acquired a customer lists intangible asset valued at $6.1 million. This asset was determined to have a useful life of 10 years.

During the three months ended March 31, 2026, FSP accounted for $0.4 million in revenue and $0.1 million in net income in the PPI JV and Company's results.

*Profire Energy, Inc.*

On January 3, 2025, the Company acquired all outstanding shares of Profire for $122.7 million in cash, including $4.6 million of cash used to settle outstanding equity awards for which $2.3 million represents the acceleration of such awards and thus recorded within "Acquisition and integration expenses" on the Condensed Consolidated Statements of Operations. Resulting consideration transferred for the acquisition was $120.4 million. The transaction was financed through a combination of cash on hand and a draw on the Company's revolving credit facility. Profire is a technology company and provider of intelligent control solutions that enhance the efficiency, safety, and reliability of industrial combustion appliances. The business operates primarily from locations in Lindon, Utah and Acheson, Alberta and is reported within the Engineered Systems segment. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of closing.

---

| | |
|:---|:---|
| **(in thousands)** |  |
| Current assets (including cash and cash equivalents of $22,675 and accounts receivable of $14,151) | $54867 |
| Property and equipment | 17416 |
| Intangible - finite life | 41810 |
| Goodwill | 25572 |
| Other assets | 801 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets acquired | 140466 |
| Current liabilities assumed | (8567) |
| Deferred income tax liability | (11226) |
| Other liabilities assumed | (291) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net assets acquired | $120382 |

---

The Company acquired property and equipment consisting of $14.7 million of land, building and improvements, $2.1 million of vehicles, and $0.6 million of machinery and equipment and other.

The Company acquired technology, customer lists, and tradename intangible assets valued at $3.6 million, $34.5 million, and $3.7 million, respectively. These assets were determined to have useful lives of 7, 10, and 10 years, respectively.

The FSP acquisition disclosed above is subject to final adjustment, primarily for the valuation of intangible assets pending final valuation results for such assets, and tax balances for the further assessment of the acquiree's tax positions. These preliminary estimates and assumptions could change significantly during the purchase price measurement period as the Company finalizes the valuation of assets acquired and liabilities assumed. These changes could result in material variances in the Company's future financial results, including variances in the estimated purchase price, fair values recorded and expenses associated with these items.

------

purposes.

Acquisition and integration expenses, recorded within "Other operating expenses" on the Condensed Consolidated Statements of Operations are related to acquisition activities, which include retention, legal, accounting, banking, and other expenses.

The following unaudited pro forma financial information represents the Company's results of operations as if these acquisitions had occurred at the beginning of the fiscal year prior to the acquisition. The pro forma results have been prepared for informational purposes only and include adjustments to amortize acquired intangible assets with finite lives, depreciate acquired property, plant, and equipment, reflect additional interest expense on debt used to fund the acquisition, and record the income tax consequences of these pro forma adjustments.

---

| | | |
|:---|:---|:---|
|  | **Three months ended March 31,** | **Three months ended March 31,** |
| **(in thousands, except per share data)** | **2026** | **2025** |
| Net sales | $206379 | $177984 |
| Net (loss) income attributable to CECO Environmental Corp. | (86) | 37251 |
| Earnings per share: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic | $(0.00) | $1.06 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted | $(0.00) | $1.02 |

---

These pro forma results do not purport to be indicative of the results of operations that would have occurred had the purchase been made as of the beginning of the periods presented or of the results of operations that may occur in the future.

**16. Divestiture** 

On March 31, 2025, the Company finalized the sale of its Global Pump Solutions business to a third party for a purchase price of $108.7 million, as adjusted for purchase adjustments. In the third quarter of 2025, the Company agreed to a working capital adjustment with the purchaser that reduced the amount to be released from escrow by $0.8 million, with a corresponding reduction in the previously recognized gain. The Company received cash proceeds of $107.9 million, inclusive of the purchase price, purchase price adjustments and $2.0 million released from escrow in the third quarter of 2025. The Company recognized a pre-tax gain on sale of business of $63.7 million. The Global Pump Solutions business consisted of three niche leadership severe service industrial metallic, fiberglass and thermoplastic centrifugal pump brands: Dean, Fybroc and Sethco. The business primarily operated from locations in Indianapolis, Indiana and Telford, Pennsylvania, and was included within the Industrial Processing Solutions segment.

Amounts related to the transaction are as follows:

---

| | |
|:---|:---|
| **(in thousands)** |  |
| Proceeds from sale of Global Pump Solutions business | $107808 |
| Less: Assets transferred |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | (4230) |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories | (9268) |
| &nbsp;&nbsp;&nbsp;&nbsp;Property and equipment | (5247) |
| &nbsp;&nbsp;&nbsp;&nbsp;Goodwill | (26838) |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangible assets – finite life, net | (4029) |
| &nbsp;&nbsp;&nbsp;&nbsp;Pension plan assets | (425) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | (119) |
| Less: Transaction costs | (616) |
| Plus: Liabilities transferred |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 1024 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 1731 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other liabilities assumed | 3910 |
| Gain on sale of Global Pump Solutions business | $63701 |

---

**17. Business Segment Information** 

The Company's operations are organized and reviewed by management along its product lines or end markets that the segment serves and are presented in two reportable segments. Segment profit is reviewed quarterly by the chief operating decision maker

------

("CODM"), which is the Company's Chief Executive Officer, for the purposes of allocating resources, including personnel, capital, and financial resources, and assessing performance, including the monitoring of budget versus actual results. During the fourth quarter of 2025, management updated the definition of the segment profit measure used by the CODM. The presentation of prior period segment information has been recast to conform to this updated measure. Asset information by segment is not reported internally or otherwise regularly reviewed by the CODM.

The Company's reportable segments are organized as groups of similar products and services, as described as follows:

<u>Engineered Systems:</u> The Company's Engineered Systems segment serves the power generation, hydrocarbon processing,

water/wastewater treatment, oily water separation and treatment, marine and naval vessels, and midstream oil and gas sectors. The Company seeks to address the global demand for environmental and equipment protection solutions with its highly engineered platforms including emissions management, fluid bed cyclones, thermal acoustics, separation and filtration, and dampers and expansion joints.

<u>Industrial Process Solutions:</u> The Company's Industrial Process Solutions segment serves the broad industrial sector with

solutions for air pollution and contamination control, fluid handling, and process filtration in applications such as aluminum beverage can production, automobile production, food and beverage processing, semiconductor fabrication, electronics production, steel and aluminum mill processing, wood manufacturing, desalination, and aquaculture markets. The Company assists customers in maintaining clean and safe operations for employees, reducing energy consumption, minimizing waste for customers, and meeting regulatory standards for toxic emissions, fumes, volatile organic compounds, and odor elimination through its platforms including duct fabrication and installation, industrial air, and fluid handling.

A reconciliation of total segment sales to total consolidated sales, as well as total segment profit to total consolidated loss from operations and total consolidated net loss is as follows for the three months ended March 31, 2026:

---

| | | | |
|:---|:---|:---|:---|
| **(in thousands)** | **Engineered Systems** | **Industrial Process Solutions** | **Total** |
| Net sales | $150536 | $55383 | $205919 |
| Direct cost of sales | 95707 | 38562 |  |
| Shop burden | 4477 | 3250 |  |
| Selling expense | 8119 | 2932 |  |
| Project engineering expense | 3826 | 2250 |  |
| General and administrative expense | 8583 | 1944 |  |
| Segment profit | 29824 | 6445 | 36270 |
| Stock-based compensation |  |  | 440 |
| Amortization of intangible assets |  |  | 4003 |
| Other corporate expenses<sup>(1)</sup> |  |  | 29951 |
| Interest expense |  |  | 4231 |
| Other profit or loss<sup>(2)</sup> |  |  | 1392 |
| Total consolidated loss before income taxes |  |  | $(3747) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Includes corporate compensation, professional services and information technology expenses, and other general and administrative corporate expenses.

(2) Includes foreign exchange (gain) loss.

Other segment information is as follows for the three months ended March 31, 2026:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **Engineered Systems** | **Industrial Process Solutions** |
| Property and equipment additions | $660 | $186 |
| Depreciation and amortization<sup>(1)</sup> | 2914 | 2114 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The amounts of depreciation and amortization disclosed by reportable segment are included within other segment expense captions, such as shop burden or general and administrative expense.

------

A reconciliation of total segment sales to total consolidated sales, as well as total segment profit to total consolidated income from operations and total consolidated net income is as follows for the three months ended March 31, 2025:

---

| | | | |
|:---|:---|:---|:---|
| **(in thousands)** | **Engineered Systems** | **Industrial Process Solutions** | **Total** |
| Net sales | $120434 | $56263 | $176697 |
| Direct cost of sales | 73066 | 35639 |  |
| Shop burden | 2932 | 2895 |  |
| Selling expense | 7832 | 3730 |  |
| Project engineering expense | 4730 | 2873 |  |
| General and administrative expense | 9040 | 4268 |  |
| Gain on sale of Global Pump Solutions business |  | (64502) |  |
| Segment profit | 22834 | 71360 | 94194 |
| Stock-based compensation |  |  | 3356 |
| Amortization of intangible assets |  |  | 3096 |
| Other corporate expenses<sup>(1)</sup> |  |  | 25872 |
| Interest expense |  |  | 6217 |
| Other profit or loss<sup>(2)</sup> |  |  | 594 |
| Total consolidated income before income taxes |  |  | $55059 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Includes corporate compensation, professional services and information technology expenses, and other general and administrative corporate expenses.

(2) Includes foreign exchange (gain) loss and pension expense.

Other segment information is as follows for the three months ended March 31, 2025:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **Engineered Systems** | **Industrial Process Solutions** |
| Property and equipment additions | $694 | $633 |
| Depreciation and amortization<sup>(1)</sup> | 1985 | 2324 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The amounts of depreciation and amortization disclosed by reportable segment are included within other segment expense captions, such as shop burden or general and administrative expense.

*Geographic Information*

Net sales by geographic area are as follows:

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| | | |
|:---|:---|:---|
|  | **Three months ended March 31,** | **Three months ended March 31,** |
| **(in thousands)** | **2026** | **2025** |
| United States | $136546 | $112003 |
| Netherlands | 17563 | 11225 |
| China | 14555 | 14794 |
| United Kingdom | 13032 | 19558 |
| Other | 24223 | 19117 |
| &nbsp;&nbsp;Total net sales | $205919 | $176697 |

---

The geographical area data for net sales is based upon the country location of the Company's business unit generating such sales.

Long-lived assets by geographic area are as follows:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **March 31, 2026** | **December 31, 2025** |
| United States | $364642 | $359584 |
| China | 40427 | 39205 |
| United Kingdom | 27323 | 27761 |
| Other | 55750 | 57038 |
| &nbsp;&nbsp;Total long-lived assets | $488142 | $483588 |

---

The geographical area data for long-lived assets is based upon physical location of such assets.

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<u>CECO ENVIRONMENTAL CORP.</u>

<u>MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION</u>

<u>AND RESULTS OF OPERATIONS</u>

**ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**

The Company's Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025 reflect the consolidated operations of the Company and its subsidiaries.

CECO Environmental Corp. ("CECO," "we," "us," "our," or the "Company") is a leading environmentally focused, diversified industrial company, serving the broad landscape of industrial air, industrial water and energy transition markets globally providing innovative technology and application expertise through a collection of focused operating companies with niche leadership positions and well-established brands in fragmented markets with flexible business models and established supply chains. CECO helps companies grow their business with safe, clean, and more efficient solutions that help protect people, the environment and industrial equipment. CECO's solutions improve air and water quality, optimize emissions management, and increase the energy and process efficiency for highly engineered applications in power generation, midstream and downstream hydrocarbon processing and transport, chemical processing, electric vehicle production, polysilicon fabrication, semiconductor and electronics production, battery production and recycling, specialty metals, aluminum and steel production, beverage can manufacturing, and industrial and produced water and wastewater treatment, and a wide range of other industrial end markets.

On February 23, 2026, the Company entered into an Agreement and Plan of Merger with Thermon Group Holdings, Inc. ("Thermon"), pursuant to which CECO will acquire Thermon in a cash and stock transaction. The consummation of the Merger is subject to the satisfaction or waiver of customary closing conditions, including stockholder approvals and regulatory approvals. We expect to fund the cash portion of the merger consideration and related transaction costs with available cash and borrowings under our existing credit facilities. For additional details, see Note 15 to the unaudited condensed consolidated financial statements within Item 1 of this Quarterly Report on Form 10-Q.

***Market Pressures***

The senior management team monitors and manages the Company's ability to operate effectively as the result of market pressures. Against the current backdrop of a rapidly evolving global commercial environment, we believe we are comparatively well-positioned as we execute and manufacture a majority of our business in the same regions in which we sell, with our cost and revenue bases largely aligned as a result. Recently, international trade has been impacted by conflict in the Middle East and geopolitical tariff considerations. To mitigate potential impacts from further escalation of conflict in the Middle East, we have implemented contingency planning measures and continue to assess potential effects on our operations, supply chain, and financial results. To mitigate potential tariff-related impacts, we have worked strategically with customers and suppliers to optimize terms and pricing, sourcing locations, and logistics routes and schedules. While we will continue to take a proactive approach on our efforts to mitigate the impacts of these matters, our business and results could be adversely affected by further policy developments. Additionally, we could experience shortages of raw materials and additional inflationary pressures for certain materials and labor. We have secured raw materials from existing and alternate suppliers and have taken other mitigating actions to mitigate supply disruptions; however, we cannot guarantee that we will be able to continue to do so in the future. If we are unable to continue to mitigate the effects of these supply disruptions and/or inflationary pressures, our business, results and financial condition could be adversely affected.

**Note Regarding Use of Non-GAAP Financial Measures**

The Company's unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These GAAP financial statements include certain charges the Company believes are not indicative of its core ongoing operational performance.

As a result, the Company provides financial information in this Management's Discussion and Analysis that was not prepared in accordance with GAAP and should not be considered as an alternative to the information prepared in accordance with GAAP. The Company provides this non-GAAP financial information because the Company's management utilizes it to evaluate its ongoing financial performance and the Company believes it provides greater transparency to investors as supplemental information to its GAAP results.

The Company has provided the non-GAAP financial measures of non-GAAP operating income and non-GAAP operating margin as a result of items that the Company believes are not indicative of its ongoing operations. These include transactions associated with the

------

Company's acquisitions, divestiture, and the items described below in "Consolidated Results." The Company believes that these items are not necessarily indicative of the Company's ongoing operations and their exclusion provides individuals with additional information to better compare the Company's results over multiple periods. The Company utilizes this information to evaluate its ongoing financial performance. The Company has incurred substantial expense and income associated with acquisitions. While the Company cannot predict the exact timing or amounts of such charges, it does expect to treat the financial impact of these transactions as special items in its future presentation of non-GAAP results.

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**Results of Operations**

***Consolidated Results***

Our Condensed Consolidated Statements of Operations for the three and three months ended March 31, 2026 and 2025 are as follows:

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| | | |
|:---|:---|:---|
|  | **Three months ended March 31,** | **Three months ended March 31,** |
| **(in millions, except ratios)** | **2026** | **2025** |
| Net sales | $205.9 | $176.7 |
| Cost of sales | 142.0 | 114.5 |
| Gross profit | $63.9 | $62.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;*Percent of sales* | *31.0%* | *35.2%* |
| Selling and administrative expense | 46.0 | 53.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;*Percent of sales* | *22.3%* | *30.3%* |
| Amortization expense | 4.0 | 3.1 |
| Acquisition and integration expense | 10.3 | 8.1 |
| Gain on sale of Global Pump Solutions business |  | (64.5) |
| Other operating expense | 1.7 |  |
| Operating income | $1.9 | $61.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;*Operating margin* | *0.9%* | *35.0%* |
| Other expense | $1.4 | $0.6 |
| Interest expense | 4.2 | 6.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income before income taxes | $(3.7) | $55.1 |
| Income tax (benefit) expense | (3.5) | 18.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net (loss) income | $(0.2) | $36.5 |
| Noncontrolling interest | 0.2 | 0.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net (loss) income attributable to CECO Environmental Corp. | $(0.4) | $36.0 |

---

To compare operating performance between the three months ended March 31, 2026 and 2025, the Company has adjusted GAAP operating (loss) income to exclude (1) amortization of intangible assets, (2) acquisition and integration expenses, which include legal, accounting, and other expenses, inclusive of those incurred in connection with the proposed Thermon transaction (3) gain on the sale of the Global Pump Solutions business as discussed in Note 16, and (4) other non-recurring expenses, restructuring expenses primarily relating to severance, facility exits, and associated legal expenses, asbestos litigation expenses relating to future settlement payments, executive transition expenses, and third party professional consulting fees associated with Enterprise Resource Planning system implementations.

The following table presents the reconciliation of GAAP operating income and GAAP operating margin to non-GAAP operating income and non-GAAP operating margin:

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| | | |
|:---|:---|:---|
|  | **Three months ended March 31,** | **Three months ended March 31,** |
| **(in millions, except ratios)** | **2026** | **2025** |
| Operating income as reported in accordance with GAAP | $1.9 | $61.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;*Operating margin in accordance with GAAP* | *0.9%* | *35.0%* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization expense | 4.0 | 3.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisition and integration expense | 10.3 | 8.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of Global Pump Solutions business |  | (64.5) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other operating expense | 1.7 |  |
| Non-GAAP operating income | $17.9 | $8.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;*Non-GAAP operating margin* | *8.7%* | *4.9%* |

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Net sales for the three months ended March 31, 2026 increased $29.2 million, or 16.5%, to $205.9 million compared with $176.7 million for the three months ended March 31, 2025. The increase in net sales is driven by execution and delivery on the Company's record backlog, with growth primarily coming from exhaust and selective catalytic reduction systems.

Gross profit increased $1.7 million, or 2.7%, to $63.9 million in the three months ended March 31, 2026 compared with $62.2 million in the three months ended March 31, 2025. The increase in gross profit was primarily attributable to higher sales volume. Gross profit as a percentage of sales decreased to 31.0% in the three months ended March 31, 2026 compared with 35.2% in the three months

------

ended March 31, 2025. The decrease was primarily attributable to the divestiture of the higher-margin Global Pump Solutions business in 2025, improved backlog conversion in international markets, and project mix.

Selling and administrative expenses were $46.0 million for the three months ended March 31, 2026 compared with $53.6 million for the three months ended March 31, 2025. The decrease was attributable to the divestiture of the Global Pump Solutions business and lower general administrative expense throughout the Company. As a percentage of sales, selling and administrative expenses decreased to 22.3% in the three months ended March 31, 2026 compared with 30.3% in the three months ended March 31, 2025.

Amortization expense was $4.0 million for the three months ended March 31, 2026 compared with $3.1 million for the three months ended March 31, 2025. The increase in expense is attributable to increased intangible assets attributable to the prior year acquisition.

Acquisition and integration expenses were $10.3 million for the three months ended March 31, 2026 compared with $8.1 million for the three months ended March 31, 2025. The increase is driven by costs incurred in connection with the proposed Thermon transaction during the first quarter of 2026, partially offset by the non-recurrence of costs related to the Profire acquisition that were incurred in the first quarter of 2025.

Operating income decreased $60.0 million to $1.9 million for the three months ended March 31, 2026 compared with operating income of $61.9 million for the three months ended March 31, 2025. The prior year period included a $64.5 million gain on the sale of the Global Pump Solutions business. Excluding this gain, the decrease in operating income is primarily attributable to costs associated with the proposed Thermon transaction, partially offset by higher gross profit and lower selling and administrative costs.

Non-GAAP operating income was $17.9 million for the three months ended March 31, 2026 compared with $8.6 million for the three months ended March 31, 2025. Non-GAAP operating income as a percentage of sales increased to 8.7% for the three months ended March 31, 2026 from 4.9% for the three months ended March 31, 2025.

Interest expense decreased to $4.2 million in the three months ended March 31, 2026 compared with interest expense of $6.2 million for the three months ended March 31, 2025. The decrease in interest expense is primarily due to a decrease in the average outstanding debt balance and lower interest rates.

Income tax benefit was $3.5 million for the three months ended March 31, 2026 compared with income tax expense of $18.6 million for the three months ended March 31, 2025. The effective income tax rate for the three months ended March 31, 2026 was (93.4%) compared with 33.8% for the three months ended March 31, 2025. Our effective tax rate is affected by certain other permanent differences, including transaction costs, state income taxes, non-deductible incentive stock-based compensation, and differences in tax rates among the jurisdictions in which we operate. The prior year period was also impacted by the gain on the sale of the Global Pump Solutions business.

Orders booked were $449.5 million during the three months ended March 31, 2026 compared with $227.9 million in the three months ended March 31, 2025, an increase of $221.6 million, or 98%. The increase is primarily driven by demand for the company's emissions and exhaust systems applications that support large scale natural gas power generation projects.

***Business Segments***

The Company's operations are organized and reviewed by management along its product lines and end markets that the segment

serves and are presented in two reportable segments. The results of the segments are reviewed through segment profit, which

represents income from operations as adjusted for certain items.

Financial results by segment are as follows:

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| | | |
|:---|:---|:---|
|  | **Three months ended March 31,** | **Three months ended March 31,** |
| **(in thousands)** | **2026** | **2025** |
| **Net sales** |  |  |
| Engineered Systems | $150536 | $120434 |
| Industrial Process Solutions | 55383 | 56263 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total net sales | $205919 | $176697 |

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| | | |
|:---|:---|:---|
|  | **Three months ended March 31,** | **Three months ended March 31,** |
| **(in thousands)** | **2026** | **2025** |
| **Segment profit** |  |  |
| Engineered Systems | $29824 | $22834 |
| Industrial Process Solutions | 6445 | 71360 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total segment profit | $36270 | $94194 |

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*<u>Engineered Systems Segment</u>*

Our Engineered Systems segment net sales increased $30.1 million to $150.5 million for the three months ended March 31, 2026 compared with $120.4 million for the three months ended March 31, 2025. The increase is led by backlog execution on large scale power projects.

Segment profit for the Engineered Systems segment increased $7.0 million to $29.8 million for the three months ended March 31, 2026 compared with $22.8 million for the three months ended March 31, 2025. The operating income increase is attributable to higher gross profit related to increased net sales.

Our Engineered Systems segment orders booked increased $220.1 million, or 135%, to $383.0 million during the three months ended March 31, 2026 compared with $162.9 million in the three months ended March 31, 2025. The increase is attributable to demand for the company's emissions and exhaust systems technologies, supporting infrastructure projects in natural gas power generation.

*<u>Industrial Process Solutions Segment</u>*

Our Industrial Process Solutions segment net sales decreased $0.9 million to $55.4 million for the three months ended March 31, 2026 compared with $56.3 million for the three months ended March 31, 2025. The decrease is primarily attributable to the divestiture of the Global Pump Solutions business, nearly fully offset by backlog execution on industrial and ducting applications.

Segment profit for the Industrial Process Solutions segment decreased $65.0 million to $6.4 million for the three months ended March 31, 2026 compared with $71.4 million for the three months ended March 31, 2025. The prior year period included a $64.5 million gain on the sale of the Global Pump Solutions business. Excluding this gain, the change in segment profit is in line with sales volume.

Our Industrial Process Solutions segment orders booked increased $1.5 million, or 2%, to $66.5 million during the three months ended March 31, 2026 compared with $65.0 million in the three months ended March 31, 2025. The increase is primarily attributable to demand for the company's scrubber technology, particularly in international markets, partially offset by the divestiture of the Global Pump Solutions business.

**Backlog**

Backlog (i.e., unfulfilled or remaining performance obligations) represents the sales we expect to recognize for our products and services for which control has not yet transferred to the customer. Backlog increased to $1,035.1 million as of March 31, 2026, from $793.1 million as of December 31, 2025. Our customers may have the right to cancel a given order. Historically, cancellations have not been significant. Backlog is adjusted on a quarterly basis for adjustments in foreign currency exchange rates. Substantially all backlog is expected to be delivered within 12 to 24 months, with a majority within 12 months. Backlog is not defined by GAAP and our methodology for calculating backlog may not be consistent with methodologies used by other companies.

**Recent Accounting Pronouncements**

For information regarding recent accounting pronouncements, see Note 2 to the unaudited condensed consolidated financial statements within Item 1 of this Quarterly Report on Form 10-Q.

**Liquidity and Capital Resources**

When we undertake large jobs, our working capital objective is to make these projects self-funding. We work to achieve this by obtaining customer advanced payments, structuring our contracts with progress billing provisions, when possible, utilizing extended payment terms from material suppliers, and paying sub-contractors after payment from our customers, which is an industry practice.

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Our investment in working capital is funded by cash flows from operations and by our revolving line of credit under our Credit Facility (as defined below).

At March 31, 2026, the Company had working capital of $133.4 million, compared with $104.4 million at December 31, 2025. The ratio of current assets to current liabilities was 1.33 to 1.00 on March 31, 2026, as compared with a ratio of 1.34 to 1.00 on December 31, 2025.

At March 31, 2026 and December 31, 2025, cash and cash equivalents totaled $45.4 million and $33.1 million, respectively. As of March 31, 2026 and December 31, 2025, $36.0 million and $26.4 million, respectively, of our cash and cash equivalents were held by certain foreign subsidiaries, as well as being denominated in foreign currencies.

Debt consisted of the following:

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| | | |
|:---|:---|:---|
| **(in thousands)** | **March 31, 2026** | **December 31, 2025** |
| Outstanding borrowings under Credit Facility (defined below) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Revolving credit facility | $251800 | $208600 |
| Total outstanding borrowings under the Credit Facility | 251800 | 208600 |
| Outstanding borrowings under the joint venture term debt | 5212 | 5647 |
| Unamortized debt discount | (3765) | (1809) |
| Total outstanding borrowings | 253247 | 212438 |
| &nbsp;&nbsp;&nbsp;&nbsp;Less: current portion | (5340) | (1879) |
| Total debt, less current portion | $247907 | $210559 |

---

<u>Credit Facility</u>

The Company's outstanding borrowings in the United States consist of a senior secured revolver loan with sub-facilities for letters of credit, swing-line loans and multi-currency loans (collectively, the "Credit Facility"). As of March 31, 2026 and December 31, 2025, the Company was in compliance with all related financial and other restrictive covenants under the Credit Facility.

On January 30, 2026, the Company entered into the Fourth Amended and Restated Credit Agreement, which provided for a senior secured revolving credit facility in an initial aggregate principal amount of up to $700.0 million. On March 30, 2026, the Company entered into Amendment No. 1 to Fourth Amended and Restated Credit Agreement, which provides for a senior secured revolving credit facility in an initial aggregate principal amount of up to $740.0 million.

See Note 8 to the unaudited condensed consolidated financial statements within Item 1 of this Quarterly Report on Form 10-Q for further information on the Company's debt facilities.

Total unused credit availability under our existing Credit Facility is as follows:

---

| | | |
|:---|:---|:---|
| **(in millions)** | **March 31, 2026** | **December 31, 2025** |
| Credit Facility, revolving loans | $740.0 | $400.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Draw down | (251.8) | (208.6) |
| &nbsp;&nbsp;&nbsp;&nbsp;Letters of credit open | (23.1) | (23.8) |
| Total unused credit availability | $465.1 | $167.6 |
| Amount available based on borrowing limitations | $119.9 | $123.6 |

---

The Company's available borrowing capacity under the Credit Facility is defined as the lower of (a) the Credit Facility amount less outstanding borrowings and Letters of Credit on the Credit Facility, and (b) the Company's trailing twelve month EBITDA, as defined in the Credit Agreement, by a factor of the maximum leverage ratio, less outstanding borrowings on the Credit Facility.

**Overview of Cash Flows and Liquidity**

---

| | | |
|:---|:---|:---|
|  | **Three months ended March 31,** | **Three months ended March 31,** |
| **(in thousands)** | **2026** | **2025** |
| Net cash used in operating activities | $(13100) | $(11696) |
| Net cash (used in) provided by investing activities | (9205) | 4829 |
| Net cash provided by financing activities | 34640 | 115756 |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (56) | (414) |
| Net increase in cash, cash equivalents and restricted cash | $12280 | $108475 |

---

------

**Operating Activities**

For the three months ended March 31, 2026, $13.1 million of cash was used in operating activities compared with $11.7 million used in operations in the prior year period, representing a decrease of $1.4 million. The decrease was primarily driven by unfavorable changes in net working capital, which includes a substantial increase in accounts receivable due to long duration projects for emissions management technologies as well as timing of billings.

**Investing Activities** 

For the three months ended March 31, 2026, net cash used in investing activities was $9.2 million compared with $4.8 million provided by investing activities in the prior year period. The difference was driven by non-recurring events in the first quarter of 2025, including the sale of the Global Pump Solutions business and acquisition of Profire.

**Financing Activities**

For the three months ended March 31, 2026, $34.6 million was provided by financing activities compared with $115.8 million provided by financing activities in the prior year period, for a decrease of $81.1 million. The decrease is attributable to net borrowing activity in the periods. Net borrowing activity in the prior year period was driven by the acquisition of Profire.

**Critical Accounting Estimates**

Management believes there have been no changes during the three months ended March 31, 2026 to the items that the Company disclosed as its critical accounting policies and estimates in Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

**Forward-Looking Statements**

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, which are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. Any statements contained in this Quarterly Report on Form 10-Q, other than statements of historical fact, including statements about management's beliefs and expectations or that otherwise address events, or developments that CECO expects, believes, or anticipates will or may occur in the future, are forward-looking statements and should be evaluated as such. These statements are made on the basis of management's views and assumptions regarding future events and business performance. We use words such as "believe," "expect," "anticipate," "intends," "estimate," "forecast," "project," "will," "plan," "should" and similar expressions to identify forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding the proposed transaction with Thermon Group Holdings, Inc. ("Thermon"), pro forma descriptions of the combined company and its operations, integration and transition plans, synergies, opportunities and anticipated future performance. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Potential risks and uncertainties, among others, that could cause actual results to differ materially are discussed under "Item 1A. Risk Factors" of this Quarterly Report on Form 10-Q, in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and in the Company's Registration Statement on Form S-4 (File No. 333-294294), which was declared effective by the SEC on April 22, 2026, and include, but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the risk that the proposed transaction with Thermon could have an adverse effect on the ability of CECO and Thermon to retain customers and retain and hire key personnel and maintain relationships with their suppliers and customers and on their operating results and business generally;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•diversion of management's attention from ongoing business operations in connection with the proposed Thermon transaction and the integration of recent acquisitions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the outcome of any legal proceedings that have been or may in the future be instituted related to the proposed Thermon transaction or other transactions or the occurrence of any event, change, or other circumstances that could give rise to the termination of the Merger Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the possibility that stockholders of CECO or Thermon may not approve the proposed Thermon transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the amount of the costs, fees, expenses and other charges related to the proposed Thermon transaction;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the risk that any announcements relating to the proposed Thermon transaction could have adverse effects on the market price of CECO's common stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the achievement of the anticipated benefits of the proposed Thermon transaction, our ability to successfully integrate acquired businesses and realize the synergies from acquisitions, which may result in the combined company not operating as effectively and efficiently as expected, as well as a number of factors related to our business, including the sensitivity of our business to economic and financial market conditions generally and economic conditions in CECO's service areas;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•dependence on fixed price contracts and the risks associated with the Thermon business, including actual costs exceeding estimates and method of accounting for revenue;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the effect of growth on our infrastructure, resources and existing sales;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the ability to expand operations in both new and existing markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the potential for contract delay or cancellation as a result of on-going or worsening supply chain challenges, or other customer-driven project delays relating to supply chain challenges or other customer considerations, including those related to the conflict in the Middle East;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•liabilities arising from faulty services or products that could result in significant professional or product liability, warranty or other claims;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes in or developments with respect to any litigation or investigation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•failure to meet timely completion or performance standards that could result in higher cost and reduced profits or, in some cases, losses on projects;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the potential for fluctuations in prices for manufactured components and raw materials, including as a result of tariffs and surcharges, and rising energy costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•inflationary pressures relating to rising raw material costs and the cost of labor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the substantial amount of debt incurred in connection with our strategic transactions and our ability to repay or refinance it or incur additional debt in the future;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the impact of federal, state or local government regulations, including with respect to tax policy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to repurchase shares of our common stock and the amounts and timing of repurchases, if any;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to successfully realize the expected benefits of our restructuring program;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•economic and political conditions generally;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to optimize our business portfolio by identifying acquisition targets, executing upon any strategic acquisitions or divestitures, integrating acquired businesses and realizing the synergies from strategic transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•unpredictability and severity of catastrophic events, including cybersecurity threats, acts of terrorism or outbreak of war or hostilities or public health crises, as well as management's response to any of the aforementioned factors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to remediate our material weaknesses, or any other material weakness that we may identify in the future, that

could result in material misstatements in our financial statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the risk that the proposed transaction with Thermon may not be completed on the anticipated terms or timeline, or at all, including as a result of the failure to obtain required regulatory or stockholder approvals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the risk that the announcement or pendency of the proposed transaction could disrupt our business, including our

relationships with customers, suppliers and employees, and could divert management's attention from ongoing business

operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the risk that we may be unable to successfully integrate Thermon's business or realize anticipated benefits, synergies or

growth opportunities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the risk that transaction-related costs and expenses may be greater than expected; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the risk of litigation or regulatory proceedings arising in connection with the proposed transaction.

All forward-looking statements are based on assumptions that CECO believes to be reasonable but that may not prove to be accurate as many of these risks are beyond management's ability to control or predict. Such forward-looking statements are based on assumptions and analyses made by management in light of their perceptions of current conditions, expected future developments, and

------

other factors that management believe are appropriate under the circumstances. These statements are subject to a number of known and unknown risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should any related assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated. Investors are cautioned not to place undue reliance on such forward-looking statements as they speak only to our views as of the date the statement is made. Except as required under the federal securities laws or the rules and regulations of the SEC, we undertake no obligation to update or review any forward-looking statements, whether as a result of new information, future events or otherwise.

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

We are exposed to certain market risks, primarily changes in interest rates. Market risk is the potential loss arising from adverse changes in market rates and prices, such as foreign currency exchange and interest rates. For the Company, these exposures are primarily related to changes in interest rates. We do not currently hold any derivatives or other financial instruments purely for trading or speculative purposes.

The carrying value of the Company's total long-term debt and current maturities of long-term debt at March 31, 2026 was $257.0 million. Market risk was estimated as the potential decrease (increase) in future earnings and cash flows resulting from a hypothetical 10% increase (decrease) in the Company's estimated weighted average borrowing rate at March 31, 2026. Most of the interest on the Company's debt is indexed to SOFR market rates. The estimated annual impact of a hypothetical 10% change in the estimated weighted average borrowing rate at March 31, 2026 is $1.6 million.

The Company has wholly-owned subsidiaries in several countries, including in the Netherlands, Canada, the People's Republic of China, Mexico, United Kingdom, Singapore, India, United Arab Emirates, Germany, South Korea and Saudi Arabia. In the past, we have not hedged our foreign currency exposure, and fluctuations in exchange rates have not materially affected our operating results. Future changes in exchange rates may positively or negatively impact our revenues, operating expenses and earnings. Transaction gains included in "Other expense" line of the Condensed Consolidated Statements of Operations were $1.5 million and $0.6 million for the three months ended March 31, 2026 and 2025, respectively.

**ITEM 4. CONTROLS AND PROCEDURES**

***Evaluation of Disclosure Controls and Procedures***

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the "Exchange Act")) that are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Company's management, with the participation of the Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures were not effective as of March 31, 2026, due to certain material weaknesses in our internal control over financial reporting, as further described below.

Notwithstanding the conclusion by our CEO and CFO that our disclosure controls and procedures as of March 31, 2026 were not effective, and notwithstanding the material weaknesses in our internal control over financial reporting described below, our management believes that the consolidated financial statements and related financial information included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial position, results of operations and cash flows as of the dates presented, and for the periods ended on such dates, in conformity with U.S. GAAP.

***Identification of Material Weaknesses***

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

As previously reported, we have identified the following deficiencies in our control environment, control activities and monitoring activities that constitute material weaknesses, either individually or in the aggregate, which remain unremediated as of March 31, 2026:

------

1. At the Verantis Environmental Solutions Group ("Verantis") business, which was acquired in December 2024, we did not appropriately integrate the entity into our established governance and control framework; did not retain sufficient resources with appropriate levels of knowledge, experience, and training to support accounting and financial reporting processes and control objectives at this business; failed to implement effective controls over the segregation of duties and certain information technology controls; and did not develop and perform ongoing evaluations to ascertain whether the components of internal control were present and functioning.

2. We did not consistently assess the proper level of completeness and accuracy of information used in the execution of controls related to balance sheet reconciliations.

These material weaknesses did not result in any material misstatement in our interim or audited financial statements or disclosures, and there were no changes required to any of our previously released interim or audited consolidated financial statements.

***Management's Plan for Remediation of the Material Weaknesses***

We are committed to maintaining strong internal control over financial reporting. Management, with the oversight of the Audit Committee of the Board of Directors, is taking comprehensive actions to remediate the material weaknesses described above. Our remediation plan includes the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We are updating control documentation, expanding education and training, and ensuring that controls are prepared and reviewed at the appropriate level of precision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We have hired and will continue to hire accounting and finance personnel with the requisite skills and expertise to perform control activities related to the financial close process. We will continue to augment our internal resources by engaging external consultants with technical experience in accounting, financial reporting, and internal controls, until we add sufficient in-house skills to our staff.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We will continue to focus on enhancing our information technology controls, specifically the assessment and integration of such controls at newly acquired entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•With the guidance and participation of our internal audit function, we will develop an enhanced monitoring program to (1) evaluate and assess whether controls are present and functioning in a timely manner and (2) hold individuals accountable for their internal control responsibilities.

The material weaknesses will not be considered remediated until the controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We believe the above measures will remediate the control deficiencies identified and strengthen our internal control over financial reporting. As we continue to evaluate and work to remediate the control deficiencies that gave rise to the material weaknesses, we may determine that additional measures or time are required to address the control deficiencies or that we need to modify or otherwise adjust the remediation measures described above. We will continue to assess the effectiveness of our remediation efforts in connection with our evaluation of our internal control over financial reporting.

***Changes in Internal Control Over Financial Reporting***

Except for the identification of the material weaknesses above, there were no changes during the quarter ended March 31, 2026 in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

***Inherent Limitations on Effectiveness of Controls***

The Company's management, including its CEO and CFO, does not expect that its disclosure controls and procedures or its internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

------

**PART II – OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS**

See Note 14 to the unaudited Condensed Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for information regarding legal proceedings in which the Company is involved.

**ITEM 1A. RISK FACTORS**

There have been no material changes in the Company's risk factors that were disclosed in "Part I – Item 1A. Risk Factors" of the Company's Annual Report on Form 10-K for the year ended December 31, 2025 and in the Company's Registration Statement on Form S-4 (File No. 333-294294), which was declared effective by the SEC on April 22, 2026.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

**Purchases of Equity Securities by the Issuer and Affiliated Purchasers**

The following table provides information about our purchases of the Company's equity securities for the three months ended March 31, 2026:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Issuer's Purchases of Equity Securities** | **Issuer's Purchases of Equity Securities** | **Issuer's Purchases of Equity Securities** | **Issuer's Purchases of Equity Securities** |
| **(in thousands, except per share data)<br>Period** | **Total Number of Shares Purchased**<sup>(1)</sup> | **Average Price Paid per Share** | **Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs** | **Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs** |
| January 1, 2026 - January 31, 2026 |  | $— |  | $— |
| February 1, 2026 - February 28, 2026 |  |  |  |  |
| March 1, 2026 - March 31, 2026 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total |  | $— |  |  |

---

(1) On May 10, 2022, the Board of Directors authorized a $20.0 million share repurchase program, which expired on April 30, 2025. See Note 9 to the unaudited Condensed Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for information regarding the Company's share repurchase program.

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**

None.

**ITEM 4. MINE SAFETY DISCLOSURES**

Not applicable.

**ITEM 5. OTHER INFORMATION**

(c) *Rule 10b5-1 Trading Plans* 

During the three months ended March 31, 2026, no director or Section 16 officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement," or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

------

**ITEM 6. EXHIBITS**

---

| | |
|:---|:---|
| 2.1 | [<u>Agreement and Plan of Merger, dated as of February 23, 2026, by and among CECO Environmental Corp., Longhorn Merger Sub, Inc., Longhorn Merger Sub LLC and Thermon Group Holdings, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the SEC on February 24, 2026).</u>](https://www.sec.gov/Archives/edgar/data/3197/000110465926018825/tm267105d1_ex2-1.htm) |
| 10.1\* | <u>Fourth Amended and Restated Credit Agreement, dated as of January 30, 2026, among CECO Environmental Corp., its subsidiaries from time to time party thereto, the lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on February 4, 2026).</u> |
| 10.2 | [<u>Form of Voting Agreement (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on February 24, 2026).</u>](https://www.sec.gov/Archives/edgar/data/3197/000110465926018825/tm267105d1_ex10-1.htm) |
| 10.3\* | <u>Amendment No. 1 to Fourth Amended and Restated Credit Agreement, dated as of March 30, 2026, among CECO Environmental Corp., its subsidiaries party thereto, the lenders party thereto, and Bank of America, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on April 2, 2026).</u> |
| 31.1 | <u>Rule 13(a)/15d-14(a) Certification by Chief Executive Officer</u> |
| 31.2 | <u>Rule 13(a)/15d-14(a) Certification by Chief Financial Officer</u> |
| 32.1 | <u>Certification of Chief Executive Officer (18 U.S. Section 1350)</u> |
| 32.2 | <u>Certification of Chief Financial Officer (18 U.S. Section 1350)</u> |
| 101.INS | Inline XBRL Instance Document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document with Embedded Linkbase Documents |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

\*Certain schedules, exhibits, and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted schedules or exhibits to the U.S. Securities and Exchange Commission upon request.

------

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | |
|:---|:---|
| CECO Environmental Corp. | CECO Environmental Corp. |
| By: | /s/ Kiril Kovachev |
|  | **Kiril Kovachev** |
|  | **Chief Accounting Officer**<br>**(principal accounting officer and duly authorized officer)** |

---

Date: April 30, 2026

------

## Exhibit 31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Todd Gleason, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CECO Environmental Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| |
|:---|
| /s/ Todd Gleason |
| Todd Gleason |
| Chief Executive Officer |

---

Date: April 30, 2026

------

## Exhibit 31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Peter Johansson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CECO Environmental Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| |
|:---|
| /s/ Peter Johansson |
| Peter Johansson |
| Chief Financial Officer |

---

Date: April 30, 2026

------

## Exhibit 32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CECO Environmental Corp. (the "Company") on Form 10-Q for the three month period ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Todd Gleason, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

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| |
|:---|
| /s/ Todd Gleason  |
| Todd Gleason |
| Chief Executive Officer |

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Date: April 30, 2026

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## Exhibit 32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CECO Environmental Corp. (the "Company") on Form 10-Q for the three month period ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Peter Johansson, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

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| |
|:---|
| /s/ Peter Johansson |
| Peter Johansson |
| Chief Financial Officer |

---

Date: April 30, 2026

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